FIRST SOLAR, INC. — Call Transcript 2025

Good afternoon and welcome to First Solar second quarter 2025 earnings call. Today's call is being webcast live on the Investors section of First Solar's website at investor.firstsolar.com. All participants are in a listen only mode, and please note that today's call is being recorded. I would now like to turn the conference over to your host, Byron Jeffers, Head of Investor Relations. Please go ahead, sir. Good afternoon. Thank you for joining us on today's earnings call. Joining me today are our Chief Executive Officer Mark Widmar and our Chief Financial Officer Alex Bradley. During this call, we will review our financial performance for the quarter and discuss our business outlook for the remainder of 2025. Following our remarks, we will open the call for questions. Before we begin, please note that some statements made today are forward looking and involve risks and uncertainties that could cause actual results to differ materially from management's current expectations. We undertake no obligation to update these statements due to new information or future events. For a discussion of factors that could cause these results to differ materially, please refer to today's earnings press release and our most recent annual report on Form 10-K, as supplemented by our other filings with the SEC, including our most recent. Quarterly report on Form 10-Q. You can find these documents on our website at investor.firstsolar.com. With that, I'm pleased to turn the call over to our CEO Mark Widmar. Mark. Good afternoon. Thank you for joining us today. Beginning on slide three, I will share some key highlights from Q2 2025. We recorded 3.6 GW of module sales during the quarter, above the midpoint of what we forecasted on the previous earnings call. Our Q2 earnings per diluted share came in above the high end of our guidance range at $3.18 per share. From a manufacturing standpoint, we produced 4.2 GW in Q2, with 2.4 GW produced from our U.S. facilities and 1.8 GW from our international facilities. We progressed our domestic capacity expansion during the quarter, continuing to ramp up at our Alabama facility. As of today, equipment installation and commissioning at our Louisiana site is complete. We have begun the integrated production run and expect to complete plant qualification in October. Once fully ramped, this facility is projected to boost our U.S. nameplate manufacturing capacity to over 14 GW by 2026. As it relates to technology, we have seen further improvements regarding our CuRe technology platform from both a performance and a manufacturability standpoint over the course of the quarter. Recent field data from deployed CuRe modules continues to validate the enhanced energy profile expected from the improved temperature response and bifaciality of CuRe. This field data is consistent with the superior degradation rate that we have seen through laboratory accelerated life testing. In addition, progress continued during the quarter at our new perovskite development line located at our Pearisburg campus. Line on track for full inline runs in August, is expected to produce small form factor modules featuring a perovskite semiconductor. We have continued to timely meet our internal metrics for our perovskite development program, including the achievement of initial stage efficiency, stability, and manufacturability objectives. We are pleased with the progress we are making towards commercializing our perovskite technology over the next several years. Finally, we are proud to have published our annual Corporate Responsibility Report yesterday. This report highlights First Solar's efforts to lead the way in strengthening support for solar by leveraging and extending our differentiation. As noted in the report, our vertical integration drives resource efficiency, enabling our products to deliver up to five times greater energy return on investment than crystalline silicon panels made from components manufactured in China. This not only supports our nation's energy independence, it helps unleash American energy dominance. We also continue to achieve and surpass key metrics. For example, 2024 marked the second straight year that we have nearly doubled the volume of water we recycle, conserving resources in water-scarce regions. We continued our focus on reducing waste, diverting 88% of waste from disposal and increasing recycling, recovering a global average of 95% of materials from recycled panels. These are among just a few of the highlights of our approach to responsible corporate stewardship that can be found in the report, which is available through our website. Turning to slide four, I would like to focus on the current U.S. policy and trade environment from an industrial policy standpoint. Earlier this month, the President signed the new reconciliation legislation that we believe places First Solar in a greater position of strength than it was following the passage of the Inflation Reduction Act of 2022 as relates to Section 45X advanced manufacturing tax credits. Under this new law, key provisions for solar were maintained and new restrictions severely limit 45X eligibility for products manufactured by or with material assistance from foreign control, foreign entities of control, or entities of concern FEOC such as Chinese solar manufacturers. These restrictions address one of the biggest loopholes under the IRA and we expect these FEOC provisions will factor into capital commitment decisions for U.S. manufacturing by our Chinese competitors. In our view, it is not unreasonable to expect there will be limited Chinese solar manufacturing in the U.S. in the foreseeable future, which, together with other recent industrial policy and trade developments that I will discuss momentarily, may reduce the supply of domestic content. Turning to the Investment Tax Credit, the legacy PTC and ITC which support project safe harbor by the end of 2024 and require placed in service by year end 2028 remains unchanged by the new legislation. We expect that these projects will proceed as scheduled, thereby strengthening the resiliency of our existing contracted backlog. We have a strong contracted position for our U.S. Production through 2028, which we believe, coupled with the current policy environment, creates a strategic foothold to integrate our international supply with U.S. and potentially create a U.S. finishing line to leverage our Series six and Series seven international assets. In addition, the provisions in the Reconciliation legislation relating to the new Technology Neutral investment and Production tax credits potentially incentivize near term demand for new bookings with deliveries through the end of this decade. There are three reasons for this potential demand catalyst. Firstly, under the new Tech Neutral Credits, projects that commence construction prior to July of 2026 will have a required place in service deadline by the end of 2030, thereby potentially incentivizing new procurement to safe harbor projects through 2030. Secondly, procurement projects that commence construction starting January 1, 2026 are subject to the new FEOC material assistance restrictions in order to be eligible for the Tech Neutral credits. Thirdly, projects that have not commenced construction before June 16th, 2025 will be required to meet increasing domestic content thresholds should they seek to qualify for the related bonus. While there remains uncertainty around the structure and scope of the forthcoming begin construction guidance pursuant to a recent Executive Order, we expect this guidance will be consistent with long standing rules. Note the same Executive Order also mandates the development of FEOC guidance focusing on the threat to national security by "making the United States dependent on supply chains controlled by foreign adversaries." As indicated earlier, these new demand drivers also potentially support a business case to establish one or more lines in the United States to finish front end production initiated within our international fleet. Leveraging existing overseas capital assets and our skilled workforce for front end production, combined with new backend factories in the U.S., could enable additional near term FEOC free supply for the U.S. market as well as improve the gross margin profile of our sales by reducing tariff charges and logistics costs associated with importing finished modules. Moving from industrial policy to trade policy, we continue to see evidence that pursuing anti-dumping and countervailing duty or AD/CVD cases, while time consuming and expensive, is effective at addressing illegal trade practices. Imports of cells and modules from Cambodia, Malaysia, Thailand, and Vietnam, which were subject of the Solar three AD/CVD case, meaningfully decreased in the January through May of 2025 period as compared to the equivalent period in 2024. However, trade data also demonstrates an influx of cells and modules imported into the U.S. from other countries as the Chinese crystalline silicon industry continues to move production to circumvent existing trade laws. Against this backdrop, the Alliance for American Solar Manufacturing and Trade, a distinct but similar coalition from that which launched the Solar three AD/CVD case directed at Cambodia, Malaysia, Thailand, and Vietnam, has filed a new AD/CVD petition with the U.S. International Trade Commission and the U.S. Department of Commerce seeking investigations into the violation of trade laws by Chinese-owned companies operating through entities in Laos and Indonesia as well as Indian-headquartered companies which we believe utilize a Chinese-subsidized supply chain. Separately, the Department of Commerce has made the decision to self-initiate a Section 232 investigation into imports of polysilicon and its derivatives. While the scope of derivatives is unclear, this could implicate downstream pricing for polysilicon-based products such as wafers, cells, or modules, introducing a new source of uncertainty for those relying on Chinese-tied crystalline silicon procurement. The scope of the investigation includes many of the strategic vulnerabilities created by China's dominance of the polysilicon production, such as the risk posed by over-concentrated supply chains, subsidy-fueled mandatory trade practices, systematic overcapacity, and the potential for export restrictions by U.S. adversaries. In addition, we are encouraged by recently available, though not broadly publicized, data regarding the processing of cell and module entries by the U.S. Customs and Border Protection, or CBP, that were imported during the Biden administration's June 2022 to June 2024 solar moratorium. As a reminder, the moratorium provided AD/CVD duty-free treatment for Southeast Asia imports if the entries were both circumventing the China Solar AD/CVD orders and were utilized in projects no later than December of 2024. The U.S. government recently reported that approximately 44,000 entries were processed during the moratorium window and that more than half, roughly 24,000 entries, did not qualify for the moratorium and remain subject to the application of AD/CVD tariffs. The government reports that it is taking multiple approaches to collect duties on these imports. The remaining approximately 20,000 continue to be under manual CBP requirements review, which could take several months to complete and may become subject to the application of these tariffs. In short, despite the Biden administration's ill-advised enforcement suspension, no single entry has yet been closed with the benefits of the tariff moratorium and all remain subject to potential AD/CVD tariff payments, representing potentially significant contingent liabilities for the importers of record of these foreign-produced crystalline silicon modules. We applaud CBP for the thorough entry-by-entry process they are running. Our determination to advocate for strong industrial policy represented by the new reconciliation legislation is matched by our commitment to employ the rule of law to help create a level playing field for domestic manufacturers. As we have long stated, we are supportive of free trade and international competition so long as this trade is also fair and within the constructs of the law. Unfortunately, in our industry, China relentlessly engages in unfair, in our view, illegal trade practices, leaving us no choice but to seek the enforcement of existing laws that are designed to address these practices. This respect for the rule of law also underpins our effort to enforce our TOPCon patent portfolio against potential infringements. For example, following our previously announced filing of a complaint against various Jinko Solar entities alleging infringement of our U.S. TOPCon patents, during the quarter, we filed a similar lawsuit against various Canadian Solar entities. These actions reflect our intention to actively enforce our intellectual property rights against companies that we believe are infringing upon our long-standing TOPCon technology patents. In summary, our policy, trade, and legal efforts can be viewed as a consistent three-prong approach. Firstly, a dedicated commitment to continuously advocate for strong industrial policies that enable domestic solar manufacturers in the face of a foreign adversary seeking to dominate critical aspects of the U.S. energy supply chain. Secondly, a commitment to employ the rule of law against the industrial representation of those adversaries who seek to violate our trade laws, and thirdly, a commitment to employ the rule of law to enforce long-established principles of intellectual property rights protection. As discussed during our previous earnings call, we are not immune from adverse effects related to trade policy. Later in the call, Alex will address the impact of the global tariff measures on our international production capacity considerations as well as on our bill of material costs. That said, notwithstanding these headwinds, together with the uncertainty related to the Executive Order mentioned earlier, as well as the potential implications for the recent Department of Interior directive ordering Secretary's approval of many renewable project development activities, we believe that the recent policy and trade development have on balance strengthened First Solar's relative position in the solar manufacturing industry as illustrated on slide five. At a broader macro level, we believe the long-term position of the utility-scale solar industry as a whole remains strong given significantly increasing demand for electricity and the ability of solar generation to meet this demand. As we stated previously, American leadership in AI, cryptocurrency, and reshoring manufacturing needs abundant, cost-competitive electricity generation. Absent new generating capacity coming online quickly, there are risks of not being enough electricity to power these strategically important industries to their full potential before the current administration ends. Given its attributes of low cost and high speed to deployment relative to other sources of energy generation, solar should clearly be a significant part of the near-term solution mix. This argument is supported by numerous recent reports. For example, in June, Lazard, the most recent Levelized Cost of Energy report demonstrates that utility-scale PV is cost competitive with conventional forms of energy generation including natural gas and nuclear. This fact does not consider the practicalities of a typical natural gas project development timeline, which requires approximately five years to complete, assuming it is untethered by supply chain constraints or the availability of pipeline infrastructure, or nuclear projects, which take about twice as long and create a potential supply chain strategic vulnerability requiring sourcing uranium from Russia and China. We believe that on a fundamental basis, with its cost-competitive energy and faster time to power profile, the case for utility-scale solar generation is compelling regardless of the policy environment. This case is underpinned by the role that utility-scale solar can play alongside energy storage as a viable, reliable, cost-competitive complement to the eventual scale-up in nuclear power generation capacity. Utility-scale solar has also been shown to help lower electricity prices, dampening the effects of inflation while supporting grid reliability and helping utilities navigate peak demand in extreme conditions, lowering the likelihood of blackouts. First Solar is mission ready today to help power the key pillars of economic growth, which we believe places First Solar, a utility-scale leader, in a position of strength, and I'll turn the call over to Alex to discuss shipments, bookings, Q2 financials, and guidance. Thanks Mark. Beginning on slide six, as of December 31, 2024, our contracted backlog totaled 68.5 GW valued at $20.5 billion, or approximately $0.299 per watt. Through Q2 we recognized 6.5 GW in sales. We continued our disciplined approach to new bookings, strategically leveraging the strength of our customer backlog amid the policy uncertainty that continued during the quarter and limited pricing visibility. As a result, we recorded 0.9 GW of gross bookings in the first half of the year. Offsetting this, we recorded 1.1 GW of debookings driven by contract terminations, resulting in net debookings of 0.2 GW through June 30, 2025. Notably, 0.9 GW of the debookings were related to our Series six international products and were recorded in our Q2 results. As a result, our quarter-end contracted backlog stood at 61.9 GW valued at $18.5 billion or approximately $0.299 per watt. As a reminder, a significant portion of this contracted backlog includes pricing adjusters that provide the opportunity to increase the base ASP contingent on meeting specific milestones within our current technology roadmap by the time of delivery. These figures exclude such potential adjustments including additional changes tied to module bin freight overages, commodity price shifts, committed wattage, U.S. Content volumes, and tariff changes. Following the enactment of the recent reconciliation bill, we saw an increase in customer engagement resulting in 2.1 GW of new bookings as customers pursued near-term opportunities. Of this total, approximately 1.4 GW was Series six international product, 0.9 GW of which was recontracted volume that was previously terminated in Q2 including the associated termination payments. This recontracted volume was effectively sold at approximately $0.33 per watt. The remaining 0.7 GW of the 2.1 GW was contracted at approximately $0.32 per watt excluding the impact of adjusted and India domestic sales. As of today, our total contracted backlog stands at 64 GW. While demand for our U.S. manufactured products remains strong, we continue to face an under allocation of Series six production from our Malaysia and Vietnam facilities. This imbalance initially resulted from customers exercising contractual delivery shift rights out of 2025 due to policy uncertainty and has more recently been exacerbated by increased tariff pressure. These factors contribute to the termination of a portion of our Series six international backlog this quarter. Of our total 64 GW backlog, approximately 11 GW consists of international Series six products. Of that, approximately 10.1 GW is planned for sale into the U.S., with the vast majority under contracts that include circuit breaker provisions designed to mitigate tariff exposure as referenced in our previous earnings call. Accordingly, the inclusion of tariff mitigation provisions in our contract serves as a strategic safeguard, enabling us to proactively manage and limit potential gross margin erosion should tariff-related impacts not be resolved through customer engagement. Beyond these immediate drivers and contractual mitigants, we also continue to observe indicators of a broader strategic shift among multinational oil and gas and power utilities companies, particularly those headquartered in Europe, away from renewable project development and back towards fossil fuel investments. Moving to slide seven, our total pipeline and mid to late stage booking opportunities remain strong. The booking opportunity is 83.3 GW and mid to late stage booking opportunities of 20.1 GW. Our mid to late stage pipeline includes 3.9 GW of opportunities that are contracted subject to conditions precedent. As a reminder, signed contracts in India will not be recognized as bookings until we've received full security against the offtake. Turning to slide eight, I'll cover our second quarter financial results. We recognized 3.6 GW of module sales, including 2.3 GW from our U.S. manufacturing facilities. This resulted in second quarter net sales of $1.1 billion, an increase of $0.3 billion from the first quarter. The increase was primarily driven by an anticipated increase in shipment volumes and stronger demand for domestically produced modules. Our second quarter results included $63 million in contract termination payments tied to 1.1 GW of volume, with $50 million related to 0.9 GW of terminated Series six international volume. Note this 1.1 GW of terminated volume represented less than 2% of our contracted backlog as of second quarter end. Gross margin for the quarter was 46%, up from 41% in Q1. The increase was primarily driven by higher contract termination revenue and a greater proportion of modules sold from our U.S. manufacturing facilities, which are eligible for Section 45X tax credits. These factors were partially offset by increased detention and demurrage charges, higher core costs associated with a sales mix weighted towards U.S. produced modules, and a change in Section 45X credit valuation between periods. The sale of a portion of these credits through an agreement with a leading financial institution, combined with our expectation to sell the majority of credits generated in 2025, resulted in a cumulative $29 million reduction to cost of sales, reflecting the anticipated value of the remaining credits generated through Q2. As an update on warranty related matters, we did not incur any new warranty charges this quarter related to the Series seven modules affected by prior manufacturing issues. As of the end of Q2, we continue to hold approximately 0.7 GW of potentially impacted Series seven inventory. We're making continued progress in reaching settlement agreements for impacted Series seven modules from our initial production, consistent with our disclosed warranty range. SG&A, R&D, and production startup expenses totaled $138 million in the second quarter, reflecting an increase of approximately $15 million as compared to the first quarter. A primary driver of this increase was production startup costs associated with the ramp up of our Louisiana facility. Additional one-time expenses included broker fees related to the sale of our Section 45X tax credits and legal costs tied to the previously disclosed SEC Division of Enforcement investigation, and we're pleased to report the SEC has concluded its inquiry into First Solar and the staff does not intend to recommend any enforcement action against the company. Operating income for the quarter was $362 million, which included $125 million in depreciation, amortization, and accretion, $15 million in ramp and underutilization costs, $31 million in production startup expense, and $7 million in share-based compensation. Non-operating income resulted in a net expense of $9 million in the second quarter, representing a decline of approximately $5 million as compared to the prior quarter. This was primarily driven by lower interest income as a result of a decrease in investable cash, cash equivalents, and marketable securities. Tax expense in the second quarter was $10 million compared to $8 million in the first quarter. This increase was primarily driven by a change in pre-tax income and the jurisdictional mix of such income, and this resulted in second quarter earnings of $3.18 per diluted share. Turning to slide nine, I'll discuss select balance sheet items and summary cash flow information. As of the end of Q2, our total balance of cash, cash equivalents, restricted cash, restricted cash equivalents, and marketable securities was $1.2 billion, an increase of approximately $0.3 billion from the prior quarter. This increase was primarily driven by the sale of certain of our Section 45X tax credits generated in the first half of 2025. Furthermore, as disclosed in our Form 8-K filed yesterday, on July 28th we entered into a new tax credit transfer agreement to sell up to $391 million Section 45X tax credits generating up to approximately $373 million in proceeds, transaction instruction in three installments with approximately $124 million received in connection with closing and the remaining payments expected in the fourth quarter of 2025. This transaction further demonstrates the liquidity of the 45X credit market, and the proceeds will continue to support our near-term working capital and capital expansion priorities. The quarterly increase in accounts receivable was primarily driven by higher sales volumes, with approximately 2/3 of our quarterly revenue being recognized in June, resulting in back-end weighted receivables. As of quarter end, total overdue balances stood at approximately $394 million. This includes a previously negotiated settlement with a customer following a payment default, which deferred payments to Q4, of which $93 million remains outstanding with interest payments being current and made on schedule. Also included is $70 million in cumulative uncollected receivables related to customer termination payments. These overdue termination-related receivables correspond to approximately 1.8 GW of contract of cancelled volume. In such cases, we are actively pursuing litigation or arbitration to enforce our contractual rights and recover the payments owed. Inventory balances increased by $121 million, consistent with expectations, reflecting the backlog of revenue profile tied to continuous production throughout the year to fulfill contracted commitments. We anticipate our working capital position to improve throughout the year as our module shipment and sale profile increases relative to production, inventories decline, and we continue to collect on our accounts receivable while they remain contractually due. Overdue termination payments are expected to remain outstanding pending resolution of arbitration and litigation proceedings. Capital expenditures totaled $288 million in the second quarter, primarily driven by investments in our newest facility in Louisiana where we've begun the integrated production run and expect to complete plant qualification in October. Our net cash position increased by approximately $0.2 billion-$0.6 billion as a result of the aforementioned factors. Before we turn to our updated financial outlook, I'd like to revisit the key assumptions informing our current guidance in light of recent policy and trade developments. These include tariff-related impacts on anticipated international module sales volumes and their associated logistics costs as outlined on slide 10. Our prior guidance was based on a binary set of tariff policy scenarios, each with distinct operational and financial implications. The upper end of our guide assumed the continuation of the universal tariff regime through year-end 2025, applying a 10% tariff and maintaining the suspension of country-specific reciprocal tariffs excluding China. The lower end reflected the same baseline but incorporated the impact of reciprocal tariffs taking effect as of July 9 with rates of 26% for India, 24% for Malaysia, and 46% for Vietnam. Our revised guidance incorporates the anticipated implementation of recently negotiated tariffs of 25% to market Malaysia and 20% for Vietnam, so relates to India. Our revised guidance incorporates the previously announced reciprocal tariff rate of 26% for India and does not incorporate the President's announcement yesterday of a 25% rate plus an unquantified penalty for India's purchase of military equipment and energy from Russia. A volume sold outlook for U.S. manufactured modules remains unchanged at 9. GW-9.8 GW. Our forecast of sales from our India manufacturing entity remains unchanged combined with an increase at the low end of the Series six international range. We now forecast international module sales of 7.2GW-9.5 GW for total module sales of 16.7 GW-19.3 GW. The international volume sold range remains wide and reflects both uncertainty and opportunity related to the outcome of tariff cost discussions with customers, the Section 232 action related to polysilicon and its derivatives, SIOP-related restrictions, and the Solar for AD/CVD investigation. In the event of customer terminations resulting from an inability or unwillingness to absorb tariff impacts on our international product, we plan to address the resulting supply demand imbalance through additional curtailments, including the potential temporary idling of production. As such, the lower end of our guidance range reflects increased underutilization period costs and the associated loss margin tied to these volume assumptions. Accordingly, this curtailment strategy does not assume the incremental cost related to warehousing, detention, demurrage, or other logistics associated with internationally produced modules. It's important to note that certain indirect or currently unknown costs related to these tariffs, including potential restructuring charges or asset impairments, are excluded from the guidance provided today as it relates to tariff impact. Based on a doubling of Section 232 tariffs on aluminum and steel from 25%-50%, as well as updated rates applicable to other imports including substrate, glass, and interlayer, we anticipate a full year production cost impact from tariffs of approximately $70 million. We forecast approximately $80 million-$130 million in tariffs on finished goods imports, net of contractual recoveries from customers. It's important to note that without tariff recovery, international module sales may be dilutive to earnings. As such, the ability to recover tariffs is a key factor in our production and sales volume guidance. If we are unable to effectively negotiate these recoveries, we may further reduce international Series six production below current assumptions, which would result in additional underutilization charges. Under. Utilization charges related to running our international Series six production below full production capacity with under absorption costs accounted for as period expenses are forecast to total approximately $95 million-$180 million for the full year. Additionally, non-standard freight, warehousing, detention, demurrage, and other logistics-related costs have increased approximately $100 million-$400 million for the full year. This increase was driven by several factors: accelerated imports ahead of the July 9 and subsequently revised August 1 tariff implementation dates, shorter ocean freight transit times which led to earlier than expected port arrivals, Q2 customer terminations of Series six international products, lower than forecasted Series six international sales resulting in a short notice inventory buildup, and ongoing efforts to avoid anticipated Section 301 tonnage fees on Chinese-built vessels beginning in Q4. Lastly, although our forecast value of 2025 Section 45X tax credits generated remains unchanged, our updated guidance now assumes the sale of these credits from all but one of our U.S. facility, the remaining facility. We plan to utilize the credits to offset taxable income and claim any residual benefit via direct pay. Accordingly, we've reduced the projected value of Section 45X tax credits in our guidance by approximately $75 million. I'll now cover the full year 2025 guidance ranges on slide 11. Our net sales guidance is between $4.9 billion and $5.7 billion, which includes an unchanged range of U.S. manufactured volume and India manufactured volumes sold. Our updated narrow range of international Series six volumes sold includes contract termination revenue of $63 million recognized in our Q2 results. Gross margin is expected to be between $2.05 billion and $2.35 billion or approximately 42%, which includes approximately $1.58 billion-$1.63 billion Section 45X tax credits, $95 million-$180 million of ramp underutilization costs, $80 million-$130 million of tariffs on finished goods imports, and $70 million of tariffs on bill of material imports. SG&A expense is expected to total $185 million-$195 million and R&D expected to total $230 million-$250 million. SG&A and R&D combined expense is expected to total $415 million-$445 million. Total operating expenses, which include $65 million-$75 million of production startup expense, are expected to be between $480 million and $520 million. Operating income is expected to range between $1.53 billion and $1.87 billion, implying an operating margin range of approximately 32%. This guidance includes $160 million-$255 million in combined ramp underutilization and plant startup costs, as well as approximately $1.58 billion-$1.63 billion in Section 45X credits net of the anticipated loss associated with the sale of these credits. This results in a full year 2025 earnings per diluted share guidance range of $13.50-$16.50, the midpoint of which is unchanged from our previous guidance. Notwithstanding the approximately $0.70 of impact of forecasted diluted EPS, our updated guidance now assumes the sale of 2025 Section 45X credits from all but one of our U.S. facilities. From. An earnings cadence perspective, we anticipate module sales of 5 GW-6 GW for the third quarter with $390-$425 million in Section 45X credits resulting in earnings per diluted share between $3.30 and $4.70. Capital expenditures for 2025 remain consistent with prior guidance expected to range between $1 and $1.5 billion. Our year-end 2025 net cash balance is anticipated to be between $1.3 and $2 billion. Turning to slide 12, I'll summarize the key messages from today's call. Our Q2 earnings per diluted share came in above the high end of our guidance range at $3.18 per share, primarily due to customer contract termination payments and a favorable mix of U.S. versus international products sold within the quarter. Our forecast for U.S. produced volume sold remains unchanged for the year in the near term. Ongoing trade policy uncertainty, particularly around the tariff regime, has introduced challenges that were not anticipated at the start of the year and have persisted and continuously evolved throughout. We've updated our guidance to reflect the expected impact of the most recent proposed tariffs. Other than the President's indication yesterday of a potential penalty rate applying to India and our current outlook on their implications, we know the midpoint of our diluted EPS guidance remains unchanged even with the approximately $0.70 of impact of forecast to lose EPS in our updated guidance which assumes the sale of 2025 Section 45X credit to more than one of our U.S. receipts. Looking ahead, we are on balance pleased with the overall industrial and trade policy environment that emerged over recent weeks. We continue to remain confident in the long-term outlook for U.S. solar energy demand and First Solar's continued leadership underpinned by a vertically integrated manufacturing platform, domestic supply chain, non FEOC profile, and proprietary CADTEL technology. Demand for our U.S. manufactured product remains strong and our updated outlook continues to reflect the potential long-term resilience of our Series six international product contingent on the U.S. market's ability to adapt amid ongoing policy and trade uncertainty. With that, we conclude our prepared remarks and open the call for questions. Operator. Thank you, sir. We'll take our first question today from Brian Lee from Goldman Sachs. Thanks for taking the questions here. Kudos on the nice execution. I think obviously there's going to be a lot of focus here on what seems to be incremental improvement in the bookings environment as well as some expansion in kind of your pricing power based on some of the numbers you rattled off. Maybe just digging into that a bit. Two 2+ GW bookings just in the month of July, presumably pent up demand waiting for OBBBA to get through to the finish line. What kind of run rate bookings are you seeing real time? What can we read into the 2+ GW of bookings just in the month of July? Maybe as a follow up just on the pricing side, the $0.32-$0.33 per watt, depending on which portion of the bookings you're talking about, a couple pennies higher, several pennies higher than what you had been run rating at. What does that reflect? Is that AD/CVD? Is it FEOC? Is it domestic content entitlement? How much of that is actually being cap? What do you think could still be part of that pricing picture as you move through the next couple of quarters and into 2026? Thanks, guys. All right, thanks, Brian. I'll take that. First off, I would say that we're still learning. We're kind of feeling our way around in terms of what's happening in the market and what are the implications around pricing. Clearly, after July 4th, when the bill was signed, we had a lot of inbounds, a lot of questions, a lot of inquiries, a lot of people trying to think through their safe harbor strategy. What's really nice when you think about it, we already had safe harbor largely was through 2028, and really robust demand for that period of window. Now with the kind of where we are right now, you've got a window now that will take that activity all the way out through 2030, right. Another two more years of safe harbor, contingent, depending on what ultimately happens to the executive order. It's given us, the industry, a nice runway to move forward to the end of this decade, which is what we all love to have in terms of long-term visibility and certainty. When we look at the individual drivers and trying to translate that into what sort of created the ongoing engagement, I would argue this in the bookings we saw in July, it's a little bit of everything. Some of it is wanting to safe harbor for projects that would then be completed in 2029. Some of it is, you call it FEOC or you could call it AD/CVD related. We had a large volume of the bookings was related to. A. customer who had already committed volume or believed they had committed volume from a Chinese supplier, and that Chinese supplier reneged on that volume. That volume was actually needed in kind of the 2026 time frame. They needed to react very quickly in order to recover and get certainty of a supply chain available. We were able to leverage kind of the opportunistic debooking that we saw in the quarter, plus some inventory position we had on international volume in order to fulfill that requirement for that particular customer. I would say there's still good momentum. I was talking with our Chief Commercial Officer today and we got a number of deals near term that we would expect to close that could add up to another GW here near term. We're encouraged, we're going to continue to sort of feel our way through it and we'll do a little price discovery and kind of see where everything settles in. As we said, we've done a lot here to try to best position this market and to address a level playing field. We think we're finally getting into that position and we think there's opportunity for additional price. In terms of our average ASPs, we'll have to sort of discover where that ultimately lands. We're encouraged with what we're seeing right now. Moving on to Mark Strouse from J.P. Morgan. Yes, good afternoon. Thanks for taking our questions. Just going back to the last point, Mark, on some of your customers that are contracted out through year end 2028, to the extent that there is a negative change in the, I'm sorry, in the safe harbor language from the executive order, can you just talk about kind of the percentage of that backlog that could potentially be at risk that contractually open for them to cancel? Thank you. First off, I just want to make sure we're clear on one thing. The executive order was not intended to address the Section 48 and Section 45 ITC and PTC that was safe harbor at the end of 2024. From that point in time, you have four calendar years in order to complete and build your projects and put to place them in service. That executive order should not have any impact relative to the legacy Section 48 and Section 45. The intent of the executive order was to focus on the tech neutral ITC, PTC and to focus on a couple of different things. One is to ensure there's true substance and appropriate guidance as it relates to what determines commence construction. There are a couple different ways to do that. One is through committing 5% or so of the CapEx of a project or implementing physical activities at the project or at the site physical work. Those are being looked at to provide definition and guidance. The reconciliation bill alluded to a need for guidance. I think the guidance was originally to be placed out no later than end of 2026. The executive order came out after the bill was signed saying, hey, we want that closer dated. It has effectively a 45-day window, which I think goes out to August 18th where that guidance is to be provided or notice of guidance. It also has some FEOC provisions in there as well. It is not just to address the commence construction, it is also to address some of the FEOC provisions and to effectively ensure that the investments that we're making are not tethering back into nations that could be adversaries, such as Russia and China and others. The Section 48 legacy as it relates then to our project contracted backlog that carries through 2028 should be unaffected by whatever comes out through the executive order. The opportunity is what are the catalysts going beyond that. That is the new tech neutral guidance which will have some clarity around definition for commence construction and FEOC. Assuming that those are all amenable and manageable by the market, then now we have a new window that we can continue to book out and see strong demand through 2029 into 2030, which we think is highly encouraging from that standpoint. The next question today comes from Praneeth Satish, Wells Fargo. Thanks. Yeah, in terms of the bookings in July, it looks like it included Series six and recontracted volumes, but it does not look like you've tapped into your 2027 and beyond U.S. Series seven capacity yet. Should we interpret that to mean that pricing in that $0.32-$0.33 range just is not compelling enough for you to commit your 2027 to 2030 U.S. capacity? You mentioned you've got 1 GW of bookings here in advanced stages. Kind of putting two and two together here, should we assume that at a minimum you're trying to look for some price discovery above $0.32, $0.33 and maybe just as a follow up to that? Why even sell capacity at these levels? You've got the Section 232 polysilicon probe underway and if that's successful in its full intent, it could really boost pricing. Maybe if you could just kind of talk through that rationale. Yeah, you're right, a good percentage of the bookings that we had in July were for Essex International. Really, even the bookings through the first half of the year, we had, call it, 1.2 GW or something like that, and slightly less than half of it was international product. As we think about how do we want to position the product, and knowing the backdrop of everything that's going on around us, how do we ensure getting what we think is full entitlement for the product? What I like about some of the safe harbor, let me back up first before I go. If I look at the Series six that we recontracted, to me that was a great transaction with a great price and to clear out the inventory that was largely sitting either in a warehouse or sitting in a port and incurring D&D charges because the customer defaulted on that obligation. I wanted to get that inventory cleared as quickly as possible. This inventory, while it will not be deployed until 2026 with the customer, it is actually there taking ownership and it is going to their warehouse. I am not incurring any cost, and that's pretty important and pretty critical for us. We have to get the warehousing and D&D cost down in particular. The other thing I like about feathering in some safe harbor, taking some of the safe harbor volume that we did in July, is under the new 48E tech neutral, the safe harbor requirements and the tech neutral either investment tax credit or production tax credit has to be done at the inverter level. Now, once I committed to some percentage of a project, right. I think I have in a very strong position to capture the balance of that opportunity. As you think about it right now, if we safe harbor 200 MW, if you kind of do the math that potentially creates 2 GW-3 GW of opportunity of follow up. Right? Because it's going to be very difficult to take our technology at the inverter level and try to blend it with crystalline silicon. We have different voltages and you can't in string lengths and everything else. It's very, very difficult and costly. I'm looking at, look, if I can take some near term safe harbor, seed those projects and then create a follow on opportunity for the balance of that. That's a good thing for us to do. I do fully take your comments about, yes, we very much are appreciative of the self-initiated 232 case and poly and the associated derivatives. That obviously could be another catalyst for us. We're being very selective in that regard. I do think what we did here near term with the bookings was to be very strategic and I do like doing some safe harboring that allows me to be better positioned for follow on volumes when those projects ultimately get built. Philip Shen from ROTH Capital Partners has the next question. Hey guys, thanks for taking the questions. A few here. Just as a follow-up on the pricing, prior questioner talked about the 232, there's also what we've read about which is the ramping UFLPA reinforcement. That's yet another potential catalyst. Mark, as you think through pricing, if international is at this $0.32 level, domestic content must be, I mean I gotta imagine high 30s is possible. Wondering if you can comment on that at all. How much inventory might be left in the warehouse? Finally, as it relates to capacity expansion, now that we're past OBB and we have these strong FEOC rules, the 232 and the linear catalysts that you have, to what degree are you starting to think about new capacity? What are the things that you need to see before you make that next announcement? Thanks. On the last one, in terms of what do I need to see, we kind of, I think, need to let all the dust settle. Dust also includes, you know, kind of understanding what comes out with this executive order, to see what implications it has. That, I think, is a piece of the puzzle that hopefully we'll see here near term. Look, the thing I want to, maybe I want to make sure we, it was said in our prepared remarks, but I want to make sure it's clear as well. Our domestic supply and our contract for that domestic supply is pretty solid through 2028. Our levers for the domestic, discrete domestic, sit further, it's further out in the horizon. What we have supply for is with that, I think I said in my prepared remarks, that domestic position that we have created is a strategic foothold in my mind to leverage our international volume as both Series six and Series seven. What we're looking to do, and I think we've alluded to this in the past because this ties back to your capacity expansion question, is to bring finishing capability into the U.S. We can bring finishing capabilities into the U.S. for both Series six and for Series seven. The other thing that does for us is we can get to market faster with new volume, which is great, but it helps mitigate the exposure to the tariffs because at these price points that we're seeing, you do simple math. At a 25% tariff, the tariffs are pretty hefty. The opportunity to bring it into the U.S. and to do that on a semi-finished product drops my declared value upon import to about a third of that. Now I'm bringing it in and it's costing me $0.10, $0.11 kind of number versus something in the 30s, and therefore my tariffs are much lower. The other thing that it does is it allows us to qualify for the manufacturing tax credit for assembly. That's another lever that gets played into the math for the fundamental economics. We alluded to, you know, the business case is very attractive to doing that. What happens is I have the opportunity because of the constructs that are put in place right now to determine domestic content requirements. I can actually blend some more international in with my domestic and it allows that opportunity to be multiplied significantly in terms of its value lever. There's lots that's in play in that regard, Phil. We're working through each one of those items. We're trying to triangulate, get our insights, understanding what direction we want to go, you know, but I've been telling our team that hey, we've got to be ready for this. We've already been working through and identifying site selection. We already are thinking through the transferring of tools and equipment. The nice thing about running Malaysia and Vietnam at lower capacity right now means there's excess tools that are available. That means we can go after those tools. If the decision is that as the rates have come now with announcement of tariff rates, it really is going to be uneconomical to continue to import from those markets. It's going to be more beneficial for us to bring in semi-finished product, do that here in the U.S., take advantage of the manufacturing tax credit environment and then give a little bit more. There'll be some domestic content associated with that product. Get some more value in that regard as well. Phil, just one thing I'll add in terms of what do we need to see, and Mark just touched on a little bit on the periphery, there is related to tariffs. Tariffs impact both how we might price our international fully finished products, but also is impactful as we think through. If we do a finishing line, how do we source the early stage product and bring it over? Is it coming from Malaysia, Vietnam? Just given that if you go back to our previous guide, we gave you two discrete scenarios because there was so much uncertainty around like long term tariff outcomes. Would it be at that 10% or would it be at the more reciprocal rates? We have updated that in our current guide to what we believe the current outlook is today. Clearly, we have some better visibility. I'd say it's far from perfect, and even as we're putting the guide together, there was information that came out yesterday that could have potentially changed the view around India. What do we still need to see? We still need to have a bit more understanding of how the tariff regime is going to play out. Next question is Moses Sutton, BNP Paribas. Thanks for squeezing in. If I look at the North America booking opportunity pipeline, it's up 1 GW, maybe 3 GW if I gross up the two that you booked in July. slide seven. How do we think of this? There's 70 GW of North America booking opportunity, there's your stuff that's in contracted backlog, and then there's in the industry that has a bunch of panels. If I add all that up, it almost looks like it's the whole industry's volume for the next few years. Is there a signal there that we could even see that there's more coming into the pipeline, or are you just seeing everything in the market already and that's reflected in that metric? Moses, I think there's a lot going on right now and we've had a number of inbounds that are very large. What I don't fully know, I'll use an example of this. As I indicated, we had a customer who had a near term need because their Chinese supplier reneged on that deal and they came to us. I've got others that are coming to us as well. That particular customer is looking to do something even bigger than what we've done, meaningfully larger for us in 2027 and 2028. That volume we sold to them this time around was 426. What I don't know is if others are getting those who, and this particular customer is not one that we've actually sold to over the last several years. I don't know if they're all getting signaled the same way, that the commitments they thought they had from their supply chain have now been reneged on and they're coming to First Solar. Our pipeline could be just a reallocation of demand that's already in the marketplace because of disruption to their supply chain or people pivoting away from what they had initially envisioned that they were going to do. I don't know. It's hard for me to determine if what I'm seeing, because I've seen a handful of very large commitments. Some of it I think is more incremental. Some of it I do think is, I'll call it, put it in that hyperscaler bucket. AI related, it could be an incremental catalyst to maybe near term visibility of market demand. I think there are many things that are adding up right now that may be influencing a bigger view of the market than it would be otherwise. Everyone, our final question today comes from Julien Dumoulin-Smith from Jefferies. Excellent. Hey, thanks for the opportunity to clean up here, team. If I can just on the use of cash, right? Obviously, you found yourself in a nice position here coming into the back half of the year. Got this at least chunk of clarity coming out of O triple B pending tariff. How do you think about use of cash here? Again, obviously, you've got a final decision on the finishing line. You've now disclosed that you're moving forward on a perovskite development line in Ohio. How do you think about, you know, the palatability of use of cash, the different decision trees, and the timeline for it? Again, pending tariffs seems to be a big consideration per your prior comments. When and how do you think about it, both in the R&D sense and as well as in shareholder returns? Yes, we've shored up the liquidity position from where we were at the last call pretty meaningfully this year. I think I mentioned on the call we were at a lower cash point than we'd been historically. Not something I was worried about necessarily, but we wanted to make sure we put some more resilience in there, which is what we've done. We continue to expect that to get better over the year as we get back to somewhat of a more normalized working capital position across both AR and inventory. That's helpful if you look at it. Where we end the year. Absent significant new investment, we're through a large amount of the CapEx cycle that we've been through over the last couple of years. There still will be some spend to finish up on the Louisiana side, although that's getting up and running now. Some of the cash payments that holdbacks will happen in 2026. As Mark mentioned, there's an opportunity around the finishing line that'll depend on if we're bringing back end tools from Asia that exist today and repurposing them here. Are we adding any new tools? Whether we lease a building, whether we buy a building, that will change the CapEx profile here as well. The perovskite development line is up and running. If that goes well, there is opportunity to expand around that. In general, I would say I'm viewing this year as let's get through the year, let's figure out how we stand around tariffs, and as the dust settles on the executive order, we should have a lot more clarity going into Q3, Q4 of this year of what that longer term position looks like. When you combine that with the clarity we had out of the OBBBA being passed, that's helpful for the longer term view. The fundamental waterfall approach we have to cash hasn't changed, so we still look at core running the business. Can we expand either new manufacturing sites or finishing lines? Are we willing to spend more on R&D? The answer recently has been yes, both internally and potentially looking at M&A around the R&D side. If we can't find accretive uses of cash through there, then we'll potentially look at how we return capital. There's a lot more still, I think, to happen this year. As Mark mentioned, there's still just to settle around a lot of the policy that's really very fresh. Once we have better clarity on that and we sense what we're going through next year, we'll update you on the cash position, most likely to go into the 2026 guide towards the end of the year or early next year. Ladies and gentlemen, that does conclude our question and answer session. It also does conclude our conference for today. We would like to thank you all for your participation. You may now disconnect.

Speaker 8: Good afternoon and welcome to First Solar second quarter 2025 earnings call. Today's call is being webcast live on the Investors section of First Solar's website at investor.firstsolar.com. All participants are in a listen only mode, and please note that today's call is being recorded. I would now like to turn the conference over to your host, Byron Jeffers, Head of Investor Relations. Please go ahead, sir. Good afternoon and welcome to First Solar second quarter 2025 earnings call. good afternoon and welcome to first solar second quarter 2025 earnings call Today's call is being webcast live on the Investors section of First Solar's website at investor.firstsolar.com. today's call is being webcast live on the investors section of first solar's website at investor.firstsolar.com All participants are in a listen only mode, and please note that today's call is being recorded. all participants are in a listen only mode and please note that today's call is being recorded I would now like to turn the conference over to your host, Byron Jeffers, Head of Investor Relations. i would now like to turn the conference over to your host byron jeffers head of investor relations Please go ahead, sir. please go ahead sir

Speaker 2: Good afternoon. Thank you for joining us on today's earnings call. Joining me today are our Chief Executive Officer Mark Widmar and our Chief Financial Officer Alex Bradley. During this call, we will review our financial performance for the quarter and discuss our business outlook for the remainder of 2025. Following our remarks, we will open the call for questions. Before we begin, please note that some statements made today are forward looking and involve risks and uncertainties that could cause actual results to differ materially from management's current expectations. We undertake no obligation to update these statements due to new information or future events. For a discussion of factors that could cause these results to differ materially, please refer to today's earnings press release and our most recent annual report on Form 10-K, as supplemented by our other filings with the SEC, including our most recent. Good afternoon. good afternoon Thank you for joining us on today's earnings call. thank you for joining us on today's earnings call Joining me today are our Chief Executive Officer Mark Widmar and our Chief Financial Officer Alex Bradley. joining me today are our chief executive officer mark widmar and our chief financial officer alex bradley During this call, we will review our financial performance for the quarter and discuss our business outlook for the remainder of 2025. during this call we will review our financial performance for the quarter and discuss our business outlook for the remainder of 2025 Following our remarks, we will open the call for questions. following our remarks we will open the call for questions Before we begin, please note that some statements made today are forward looking and involve risks and uncertainties that could cause actual results to differ materially from management's current expectations. before we begin please note that some statements made today are forward looking and involve risks and uncertainties that could cause actual results to differ materially from management's current expectations We undertake no obligation to update these statements due to new information or future events. we undertake no obligation to update these statements due to new information or future events For a discussion of factors that could cause these results to differ materially, please refer to today's earnings press release and our most recent annual report on Form 10-K, as supplemented by our other filings with the SEC, including our most recent. for a discussion of factors that could cause these results to differ materially please refer to today's earnings press release and our most recent annual report on form 10-k as supplemented by our other filings with the sec including our most recent Quarterly report on Form 10-Q. Quarterly report on Form 10-Q. quarterly report on form 10-q You can find these documents on our website at investor.firstsolar.com. With that, I'm pleased to turn the call over to our CEO Mark Widmar. Mark. You can find these documents on our website at investor.firstsolar.com. you can find these documents on our website at investor.firstsolar.com With that, I'm pleased to turn the call over to our CEO Mark Widmar. with that i'm pleased to turn the call over to our ceo mark widmar mark Mark. mark

Speaker 9: Good afternoon. Thank you for joining us today. Beginning on slide three, I will share some key highlights from Q2 2025. We recorded 3.6 GW of module sales during the quarter, above the midpoint of what we forecasted on the previous earnings call. Our Q2 earnings per diluted share came in above the high end of our guidance range at $3.18 per share. From a manufacturing standpoint, we produced 4.2 GW in Q2, with 2.4 GW produced from our U.S. facilities and 1.8 GW from our international facilities. We progressed our domestic capacity expansion during the quarter, continuing to ramp up at our Alabama facility. As of today, equipment installation and commissioning at our Louisiana site is complete. G ood afternoon. g ood afternoon Thank you for joining us today. thank you for joining us today Beginning on slide three, I will share some key highlights from Q2 2025. beginning on slide three i will share some key highlights from q2 2025 We recorded 3.6 GW of module sales during the quarter, above the midpoint of what we forecasted on the previous earnings call. we recorded 3.6 gw of module sales during the quarter above the midpoint of what we forecasted on the previous earnings call Our Q2 earnings per diluted share came in above the high end of our guidance range at $3.18 per share. our q2 earnings per diluted share came in above the high end of our guidance range at $3.18 per share From a manufacturing standpoint, we produced 4.2 GW in Q2, with 2.4 GW produced from our U.S. facilities and 1.8 GW from our international facilities. from a manufacturing standpoint we produced 4.2 gw in q2 with 2.4 gw produced from our u.s facilities and 1.8 gw from our international facilities We progressed our domestic capacity expansion during the quarter, continuing to ramp up at our Alabama facility. we progressed our domestic capacity expansion during the quarter continuing to ramp up at our alabama facility As of today, equipment installation and commissioning at our Louisiana site is complete. as of today equipment installation and commissioning at our louisiana site is complete We have begun the integrated production run and expect to complete plant qualification in October. Once fully ramped, this facility is projected to boost our U.S. nameplate manufacturing capacity to over 14 GW by 2026. As it relates to technology, we have seen further improvements regarding our CuRe technology platform from both a performance and a manufacturability standpoint over the course of the quarter. Recent field data from deployed CuRe modules continues to validate the enhanced energy profile expected from the improved temperature response and bifaciality of CuRe. This field data is consistent with the superior degradation rate that we have seen through laboratory accelerated life testing. In addition, progress continued during the quarter at our new perovskite development line located at our Pearisburg campus. Line on track for full inline runs in August, is expected to produce small form factor modules featuring a perovskite semiconductor. We have begun the integrated production run and expect to complete plant qualification in October. we have begun the integrated production run and expect to complete plant qualification in october Once fully ramped, this facility is projected to boost our U.S. nameplate manufacturing capacity to over 14 GW by 2026. once fully ramped this facility is projected to boost our u.s nameplate manufacturing capacity to over 14 gw by 2026 As it relates to technology, we have seen further improvements regarding our CuRe technology platform from both a performance and a manufacturability standpoint over the course of the quarter. as it relates to technology we have seen further improvements regarding our cure technology platform from both a performance and a manufacturability standpoint over the course of the quarter Recent field data from deployed CuRe modules continues to validate the enhanced energy profile expected from the improved temperature response and bifaciality of CuRe. recent field data from deployed cure modules continues to validate the enhanced energy profile expected from the improved temperature response and bifaciality of cure This field data is consistent with the superior degradation rate that we have seen through laboratory accelerated life testing. this field data is consistent with the superior degradation rate that we have seen through laboratory accelerated life testing In addition, progress continued during the quarter at our new perovskite development line located at our Pearisburg campus. in addition progress continued during the quarter at our new perovskite development line located at our pearisburg campus Line on track for full inline runs in August, is expected to produce small form factor modules featuring a perovskite semiconductor. line on track for full inline runs in august is expected to produce small form factor modules featuring a perovskite semiconductor We have continued to timely meet our internal metrics for our perovskite development program, including the achievement of initial stage efficiency, stability, and manufacturability objectives. We are pleased with the progress we are making towards commercializing our perovskite technology over the next several years. Finally, we are proud to have published our annual Corporate Responsibility Report yesterday. This report highlights First Solar's efforts to lead the way in strengthening support for solar by leveraging and extending our differentiation. As noted in the report, our vertical integration drives resource efficiency, enabling our products to deliver up to five times greater energy return on investment than crystalline silicon panels made from components manufactured in China. This not only supports our nation's energy independence, it helps unleash American energy dominance. We also continue to achieve and surpass key metrics. We have continued to timely meet our internal metrics for our perovskite development program, including the achievement of initial stage efficiency, stability, and manufacturability objectives. we have continued to timely meet our internal metrics for our perovskite development program including the achievement of initial stage efficiency stability and manufacturability objectives We are pleased with the progress we are making towards commercializing our perovskite technology over the next several years. we are pleased with the progress we are making towards commercializing our perovskite technology over the next several years Finally, we are proud to have published our annual Corporate Responsibility Report yesterday. finally we are proud to have published our annual corporate responsibility report yesterday This report highlights First Solar's efforts to lead the way in strengthening support for solar by leveraging and extending our differentiation. this report highlights first solar's efforts to lead the way in strengthening support for solar by leveraging and extending our differentiation As noted in the report, our vertical integration drives resource efficiency, enabling our products to deliver up to five times greater energy return on investment than crystalline silicon panels made from components manufactured in China. as noted in the report our vertical integration drives resource efficiency enabling our products to deliver up to five times greater energy return on investment than crystalline silicon panels made from components manufactured in china This not only supports our nation's energy independence, it helps unleash American energy dominance. this not only supports our nation's energy independence it helps unleash american energy dominance We also continue to achieve and surpass key metrics. we also continue to achieve and surpass key metrics For example, 2024 marked the second straight year that we have nearly doubled the volume of water we recycle, conserving resources in water-scarce regions. We continued our focus on reducing waste, diverting 88% of waste from disposal and increasing recycling, recovering a global average of 95% of materials from recycled panels. These are among just a few of the highlights of our approach to responsible corporate stewardship that can be found in the report, which is available through our website. Turning to slide four, I would like to focus on the current U.S. policy and trade environment from an industrial policy standpoint. Earlier this month, the President signed the new reconciliation legislation that we believe places First Solar in a greater position of strength than it was following the passage of the Inflation Reduction Act of 2022 as relates to Section 45X advanced manufacturing tax credits. For example, 2024 marked the second straight year that we have nearly doubled the volume of water we recycle, conserving resources in water-scarce regions. for example 2024 marked the second straight year that we have nearly doubled the volume of water we recycle conserving resources in water-scarce regions We continued our focus on reducing waste, diverting 88% of waste from disposal and increasing recycling, recovering a global average of 95% of materials from recycled panels. we continued our focus on reducing waste diverting 88% of waste from disposal and increasing recycling recovering a global average of 95% of materials from recycled panels These are among just a few of the highlights of our approach to responsible corporate stewardship that can be found in the report, which is available through our website. these are among just a few of the highlights of our approach to responsible corporate stewardship that can be found in the report which is available through our website Turning to slide four, I would like to focus on the current U.S. policy and trade environment from an industrial policy standpoint. turning to slide four i would like to focus on the current u.s policy and trade environment from an industrial policy standpoint Earlier this month, the President signed the new reconciliation legislation that we believe places First Solar in a greater position of strength than it was following the passage of the Inflation Reduction Act of 2022 as relates to Section 45X advanced manufacturing tax credits. earlier this month the president signed the new reconciliation legislation that we believe places first solar in a greater position of strength than it was following the passage of the inflation reduction act of 2022 as relates to section 45x advanced manufacturing tax credits Under this new law, key provisions for solar were maintained and new restrictions severely limit 45X eligibility for products manufactured by or with material assistance from foreign control, foreign entities of control, or entities of concern FEOC such as Chinese solar manufacturers. These restrictions address one of the biggest loopholes under the IRA and we expect these FEOC provisions will factor into capital commitment decisions for U.S. manufacturing by our Chinese competitors. In our view, it is not unreasonable to expect there will be limited Chinese solar manufacturing in the U.S. in the foreseeable future, which, together with other recent industrial policy and trade developments that I will discuss momentarily, may reduce the supply of domestic content. Under this new law, key provisions for solar were maintained and new restrictions severely limit 45X eligibility for products manufactured by or with material assistance from foreign control, foreign entities of control, or entities of concern FEOC such as Chinese solar manufacturers. under this new law key provisions for solar were maintained and new restrictions severely limit 45x eligibility for products manufactured by or with material assistance from foreign control foreign entities of control or entities of concern feoc such as chinese solar manufacturers These restrictions address one of the biggest loopholes under the IRA and we expect these FEOC provisions will factor into capital commitment decisions for U.S. manufacturing by our Chinese competitors. these restrictions address one of the biggest loopholes under the ira and we expect these feoc provisions will factor into capital commitment decisions for u.s manufacturing by our chinese competitors In our view, it is not unreasonable to expect there will be limited Chinese solar manufacturing in the U.S. in the foreseeable future, which, together with other recent industrial policy and trade developments that I will discuss momentarily, may reduce the supply of domestic content. in our view it is not unreasonable to expect there will be limited chinese solar manufacturing in the u.s in the foreseeable future which together with other recent industrial policy and trade developments that i will discuss momentarily may reduce the supply of domestic content Turning to the Investment Tax Credit, the legacy PTC and ITC which support project safe harbor by the end of 2024 and require placed in service by year end 2028 remains unchanged by the new legislation. We expect that these projects will proceed as scheduled, thereby strengthening the resiliency of our existing contracted backlog. We have a strong contracted position for our U.S. Production through 2028, which we believe, coupled with the current policy environment, creates a strategic foothold to integrate our international supply with U.S. and potentially create a U.S. finishing line to leverage our Series six and Series seven international assets. In addition, the provisions in the Reconciliation legislation relating to the new Technology Neutral investment and Production tax credits potentially incentivize near term demand for new bookings with deliveries through the end of this decade. There are three reasons for this potential demand catalyst. Turning to the Investment Tax Credit, the legacy PTC and ITC which support project safe harbor by the end of 2024 and require placed in service by year end 2028 remains unchanged by the new legislation. turning to the investment tax credit the legacy ptc and itc which support project safe harbor by the end of 2024 and require placed in service by year end 2028 remains unchanged by the new legislation We expect that these projects will proceed as scheduled, thereby strengthening the resiliency of our existing contracted backlog. we expect that these projects will proceed as scheduled thereby strengthening the resiliency of our existing contracted backlog We have a strong contracted position for our U.S. we have a strong contracted position for our u.s Production through 2028, which we believe, coupled with the current policy environment, creates a strategic foothold to integrate our international supply with U.S. and potentially create a U.S. finishing line to leverage our Series six and Series seven international assets. production through 2028 which we believe coupled with the current policy environment creates a strategic foothold to integrate our international supply with u.s and potentially create a u.s finishing line to leverage our series six and series seven international assets In addition, the provisions in the Reconciliation legislation relating to the new Technology Neutral investment and Production tax credits potentially incentivize near term demand for new bookings with deliveries through the end of this decade. in addition the provisions in the reconciliation legislation relating to the new technology neutral investment and production tax credits potentially incentivize near term demand for new bookings with deliveries through the end of this decade There are three reasons for this potential demand catalyst. there are three reasons for this potential demand catalyst Firstly, under the new Tech Neutral Credits, projects that commence construction prior to July of 2026 will have a required place in service deadline by the end of 2030, thereby potentially incentivizing new procurement to safe harbor projects through 2030. Secondly, procurement projects that commence construction starting January 1, 2026 are subject to the new FEOC material assistance restrictions in order to be eligible for the Tech Neutral credits. Thirdly, projects that have not commenced construction before June 16th, 2025 will be required to meet increasing domestic content thresholds should they seek to qualify for the related bonus. While there remains uncertainty around the structure and scope of the forthcoming begin construction guidance pursuant to a recent Executive Order, we expect this guidance will be consistent with long standing rules. Firstly, under the new Tech Neutral Credits, projects that commence construction prior to July of 2026 will have a required place in service deadline by the end of 2030, thereby potentially incentivizing new procurement to safe harbor projects through 2030. firstly under the new tech neutral credits projects that commence construction prior to july of 2026 will have a required place in service deadline by the end of 2030 thereby potentially incentivizing new procurement to safe harbor projects through 2030 Secondly, procurement projects that commence construction starting January 1, 2026 are subject to the new FEOC material assistance restrictions in order to be eligible for the Tech Neutral credits. secondly procurement projects that commence construction starting january 1 2026 are subject to the new feoc material assistance restrictions in order to be eligible for the tech neutral credits Thirdly, projects that have not commenced construction before June 16th, 2025 will be required to meet increasing domestic content thresholds should they seek to qualify for the related bonus. thirdly projects that have not commenced construction before june 16th 2025 will be required to meet increasing domestic content thresholds should they seek to qualify for the related bonus While there remains uncertainty around the structure and scope of the forthcoming begin construction guidance pursuant to a recent Executive Order, we expect this guidance will be consistent with long standing rules. while there remains uncertainty around the structure and scope of the forthcoming begin construction guidance pursuant to a recent executive order we expect this guidance will be consistent with long standing rules Note the same Executive Order also mandates the development of FEOC guidance focusing on the threat to national security by "making the United States dependent on supply chains controlled by foreign adversaries." As indicated earlier, these new demand drivers also potentially support a business case to establish one or more lines in the United States to finish front end production initiated within our international fleet. Leveraging existing overseas capital assets and our skilled workforce for front end production, combined with new backend factories in the U.S., could enable additional near term FEOC free supply for the U.S. market as well as improve the gross margin profile of our sales by reducing tariff charges and logistics costs associated with importing finished modules. Note the same Executive Order also mandates the development of FEOC guidance focusing on the threat to national security by "making the United States dependent on supply chains controlled by foreign adversaries." As indicated earlier, these new demand drivers also potentially support a business case to establish one or more lines in the United States to finish front end production initiated within our international fleet. note the same executive order also mandates the development of feoc guidance focusing on the threat to national security by "making the united states dependent on supply chains controlled by foreign adversaries." as indicated earlier these new demand drivers also potentially support a business case to establish one or more lines in the united states to finish front end production initiated within our international fleet Leveraging existing overseas capital assets and our skilled workforce for front end production, combined with new backend factories in the U.S., could enable additional near term FEOC free supply for the U.S. market as well as improve the gross margin profile of our sales by reducing tariff charges and logistics costs associated with importing finished modules. leveraging existing overseas capital assets and our skilled workforce for front end production combined with new backend factories in the u.s could enable additional near term feoc free supply for the u.s market as well as improve the gross margin profile of our sales by reducing tariff charges and logistics costs associated with importing finished modules Moving from industrial policy to trade policy, we continue to see evidence that pursuing anti-dumping and countervailing duty or AD/CVD cases, while time consuming and expensive, is effective at addressing illegal trade practices. Imports of cells and modules from Cambodia, Malaysia, Thailand, and Vietnam, which were subject of the Solar three AD/CVD case, meaningfully decreased in the January through May of 2025 period as compared to the equivalent period in 2024. However, trade data also demonstrates an influx of cells and modules imported into the U.S. from other countries as the Chinese crystalline silicon industry continues to move production to circumvent existing trade laws. Against this backdrop, the Alliance for American Solar Manufacturing and Trade, a distinct but similar coalition from that which launched the Solar three AD/CVD case directed at Cambodia, Malaysia, Thailand, and Vietnam, has filed a new AD/CVD petition with the U.S. Moving from industrial policy to trade policy, we continue to see evidence that pursuing anti-dumping and countervailing duty or AD/CVD cases, while time consuming and expensive, is effective at addressing illegal trade practices. moving from industrial policy to trade policy we continue to see evidence that pursuing anti-dumping and countervailing duty or ad/cvd cases while time consuming and expensive is effective at addressing illegal trade practices Imports of cells and modules from Cambodia, Malaysia, Thailand, and Vietnam, which were subject of the Solar three AD/CVD case, meaningfully decreased in the January through May of 2025 period as compared to the equivalent period in 2024. imports of cells and modules from cambodia malaysia thailand and vietnam which were subject of the solar three ad/cvd case meaningfully decreased in the january through may of 2025 period as compared to the equivalent period in 2024 However, trade data also demonstrates an influx of cells and modules imported into the U.S. from other countries as the Chinese crystalline silicon industry continues to move production to circumvent existing trade laws. however trade data also demonstrates an influx of cells and modules imported into the u.s from other countries as the chinese crystalline silicon industry continues to move production to circumvent existing trade laws Against this backdrop, the Alliance for American Solar Manufacturing and Trade, a distinct but similar coalition from that which launched the Solar three AD/CVD case directed at Cambodia, Malaysia, Thailand, and Vietnam, has filed a new AD/CVD petition with the U.S. against this backdrop the alliance for american solar manufacturing and trade a distinct but similar coalition from that which launched the solar three ad/cvd case directed at cambodia malaysia thailand and vietnam has filed a new ad/cvd petition with the u.s International Trade Commission and the U.S. Department of Commerce seeking investigations into the violation of trade laws by Chinese-owned companies operating through entities in Laos and Indonesia as well as Indian-headquartered companies which we believe utilize a Chinese-subsidized supply chain. Separately, the Department of Commerce has made the decision to self-initiate a Section 232 investigation into imports of polysilicon and its derivatives. While the scope of derivatives is unclear, this could implicate downstream pricing for polysilicon-based products such as wafers, cells, or modules, introducing a new source of uncertainty for those relying on Chinese-tied crystalline silicon procurement. The scope of the investigation includes many of the strategic vulnerabilities created by China's dominance of the polysilicon production, such as the risk posed by over-concentrated supply chains, subsidy-fueled mandatory trade practices, systematic overcapacity, and the potential for export restrictions by U.S. adversaries. International Trade Commission and the U.S. international trade commission and the u.s Department of Commerce seeking investigations into the violation of trade laws by Chinese-owned companies operating through entities in Laos and Indonesia as well as Indian-headquartered companies which we believe utilize a Chinese-subsidized supply chain. department of commerce seeking investigations into the violation of trade laws by chinese-owned companies operating through entities in laos and indonesia as well as indian-headquartered companies which we believe utilize a chinese-subsidized supply chain Separately, the Department of Commerce has made the decision to self-initiate a Section 232 investigation into imports of polysilicon and its derivatives. separately the department of commerce has made the decision to self-initiate a section 232 investigation into imports of polysilicon and its derivatives While the scope of derivatives is unclear, this could implicate downstream pricing for polysilicon-based products such as wafers, cells, or modules, introducing a new source of uncertainty for those relying on Chinese-tied crystalline silicon procurement. while the scope of derivatives is unclear this could implicate downstream pricing for polysilicon-based products such as wafers cells or modules introducing a new source of uncertainty for those relying on chinese-tied crystalline silicon procurement The scope of the investigation includes many of the strategic vulnerabilities created by China's dominance of the polysilicon production, such as the risk posed by over-concentrated supply chains, subsidy-fueled mandatory trade practices, systematic overcapacity, and the potential for export restrictions by U.S. adversaries. the scope of the investigation includes many of the strategic vulnerabilities created by china's dominance of the polysilicon production such as the risk posed by over-concentrated supply chains subsidy-fueled mandatory trade practices systematic overcapacity and the potential for export restrictions by u.s adversaries In addition, we are encouraged by recently available, though not broadly publicized, data regarding the processing of cell and module entries by the U.S. Customs and Border Protection, or CBP, that were imported during the Biden administration's June 2022 to June 2024 solar moratorium. As a reminder, the moratorium provided AD/CVD duty-free treatment for Southeast Asia imports if the entries were both circumventing the China Solar AD/CVD orders and were utilized in projects no later than December of 2024. The U.S. government recently reported that approximately 44,000 entries were processed during the moratorium window and that more than half, roughly 24,000 entries, did not qualify for the moratorium and remain subject to the application of AD/CVD tariffs. The government reports that it is taking multiple approaches to collect duties on these imports. In addition, we are encouraged by recently available, though not broadly publicized, data regarding the processing of cell and module entries by the U.S. in addition we are encouraged by recently available though not broadly publicized data regarding the processing of cell and module entries by the u.s Customs and Border Protection, or CBP, that were imported during the Biden administration's June 2022 to June 2024 solar moratorium. customs and border protection or cbp that were imported during the biden administration's june 2022 to june 2024 solar moratorium As a reminder, the moratorium provided AD/CVD duty-free treatment for Southeast Asia imports if the entries were both circumventing the China Solar AD/CVD orders and were utilized in projects no later than December of 2024. as a reminder the moratorium provided ad/cvd duty-free treatment for southeast asia imports if the entries were both circumventing the china solar ad/cvd orders and were utilized in projects no later than december of 2024 The U.S. government recently reported that approximately 44,000 entries were processed during the moratorium window and that more than half, roughly 24,000 entries, did not qualify for the moratorium and remain subject to the application of AD/CVD tariffs. the u.s government recently reported that approximately 44,000 entries were processed during the moratorium window and that more than half roughly 24,000 entries did not qualify for the moratorium and remain subject to the application of ad/cvd tariffs The government reports that it is taking multiple approaches to collect duties on these imports. the government reports that it is taking multiple approaches to collect duties on these imports The remaining approximately 20,000 continue to be under manual CBP requirements review, which could take several months to complete and may become subject to the application of these tariffs. In short, despite the Biden administration's ill-advised enforcement suspension, no single entry has yet been closed with the benefits of the tariff moratorium and all remain subject to potential AD/CVD tariff payments, representing potentially significant contingent liabilities for the importers of record of these foreign-produced crystalline silicon modules. We applaud CBP for the thorough entry-by-entry process they are running. Our determination to advocate for strong industrial policy represented by the new reconciliation legislation is matched by our commitment to employ the rule of law to help create a level playing field for domestic manufacturers. The remaining approximately 20,000 continue to be under manual CBP requirements review, which could take several months to complete and may become subject to the application of these tariffs. the remaining approximately 20,000 continue to be under manual cbp requirements review which could take several months to complete and may become subject to the application of these tariffs In short, despite the Biden administration's ill-advised enforcement suspension, no single entry has yet been closed with the benefits of the tariff moratorium and all remain subject to potential AD/CVD tariff payments, representing potentially significant contingent liabilities for the importers of record of these foreign-produced crystalline silicon modules. in short despite the biden administration's ill-advised enforcement suspension no single entry has yet been closed with the benefits of the tariff moratorium and all remain subject to potential ad/cvd tariff payments representing potentially significant contingent liabilities for the importers of record of these foreign-produced crystalline silicon modules We applaud CBP for the thorough entry-by-entry process they are running. we applaud cbp for the thorough entry-by-entry process they are running Our determination to advocate for strong industrial policy represented by the new reconciliation legislation is matched by our commitment to employ the rule of law to help create a level playing field for domestic manufacturers. our determination to advocate for strong industrial policy represented by the new reconciliation legislation is matched by our commitment to employ the rule of law to help create a level playing field for domestic manufacturers As we have long stated, we are supportive of free trade and international competition so long as this trade is also fair and within the constructs of the law. Unfortunately, in our industry, China relentlessly engages in unfair, in our view, illegal trade practices, leaving us no choice but to seek the enforcement of existing laws that are designed to address these practices. This respect for the rule of law also underpins our effort to enforce our TOPCon patent portfolio against potential infringements. For example, following our previously announced filing of a complaint against various Jinko Solar entities alleging infringement of our U.S. TOPCon patents, during the quarter, we filed a similar lawsuit against various Canadian Solar entities. These actions reflect our intention to actively enforce our intellectual property rights against companies that we believe are infringing upon our long-standing TOPCon technology patents. As we have long stated, we are supportive of free trade and international competition so long as this trade is also fair and within the constructs of the law. as we have long stated we are supportive of free trade and international competition so long as this trade is also fair and within the constructs of the law Unfortunately, in our industry, China relentlessly engages in unfair, in our view, illegal trade practices, leaving us no choice but to seek the enforcement of existing laws that are designed to address these practices. unfortunately in our industry china relentlessly engages in unfair in our view illegal trade practices leaving us no choice but to seek the enforcement of existing laws that are designed to address these practices This respect for the rule of law also underpins our effort to enforce our TOPCon patent portfolio against potential infringements. this respect for the rule of law also underpins our effort to enforce our topcon patent portfolio against potential infringements For example, following our previously announced filing of a complaint against various Jinko Solar entities alleging infringement of our U.S. for example following our previously announced filing of a complaint against various jinko solar entities alleging infringement of our u.s TOPCon patents, during the quarter, we filed a similar lawsuit against various Canadian Solar entities. topcon patents during the quarter we filed a similar lawsuit against various canadian solar entities These actions reflect our intention to actively enforce our intellectual property rights against companies that we believe are infringing upon our long-standing TOPCon technology patents. these actions reflect our intention to actively enforce our intellectual property rights against companies that we believe are infringing upon our long-standing topcon technology patents In summary, our policy, trade, and legal efforts can be viewed as a consistent three-prong approach. Firstly, a dedicated commitment to continuously advocate for strong industrial policies that enable domestic solar manufacturers in the face of a foreign adversary seeking to dominate critical aspects of the U.S. energy supply chain. Secondly, a commitment to employ the rule of law against the industrial representation of those adversaries who seek to violate our trade laws, and thirdly, a commitment to employ the rule of law to enforce long-established principles of intellectual property rights protection. As discussed during our previous earnings call, we are not immune from adverse effects related to trade policy. Later in the call, Alex will address the impact of the global tariff measures on our international production capacity considerations as well as on our bill of material costs. In summary, our policy, trade, and legal efforts can be viewed as a consistent three-prong approach. in summary our policy trade and legal efforts can be viewed as a consistent three-prong approach Firstly, a dedicated commitment to continuously advocate for strong industrial policies that enable domestic solar manufacturers in the face of a foreign adversary seeking to dominate critical aspects of the U.S. energy supply chain. firstly a dedicated commitment to continuously advocate for strong industrial policies that enable domestic solar manufacturers in the face of a foreign adversary seeking to dominate critical aspects of the u.s energy supply chain Secondly, a commitment to employ the rule of law against the industrial representation of those adversaries who seek to violate our trade laws, and thirdly, a commitment to employ the rule of law to enforce long-established principles of intellectual property rights protection. secondly a commitment to employ the rule of law against the industrial representation of those adversaries who seek to violate our trade laws and thirdly a commitment to employ the rule of law to enforce long-established principles of intellectual property rights protection As discussed during our previous earnings call, we are not immune from adverse effects related to trade policy. as discussed during our previous earnings call we are not immune from adverse effects related to trade policy Later in the call, Alex will address the impact of the global tariff measures on our international production capacity considerations as well as on our bill of material costs. later in the call alex will address the impact of the global tariff measures on our international production capacity considerations as well as on our bill of material costs That said, notwithstanding these headwinds, together with the uncertainty related to the Executive Order mentioned earlier, as well as the potential implications for the recent Department of Interior directive ordering Secretary's approval of many renewable project development activities, we believe that the recent policy and trade development have on balance strengthened First Solar's relative position in the solar manufacturing industry as illustrated on slide five. At a broader macro level, we believe the long-term position of the utility-scale solar industry as a whole remains strong given significantly increasing demand for electricity and the ability of solar generation to meet this demand. As we stated previously, American leadership in AI, cryptocurrency, and reshoring manufacturing needs abundant, cost-competitive electricity generation. Absent new generating capacity coming online quickly, there are risks of not being enough electricity to power these strategically important industries to their full potential before the current administration ends. That said, notwithstanding these headwinds, together with the uncertainty related to the Executive Order mentioned earlier, as well as the potential implications for the recent Department of Interior directive ordering Secretary's approval of many renewable project development activities, we believe that the recent policy and trade development have on balance strengthened First Solar's relative position in the solar manufacturing industry as illustrated on slide five. that said notwithstanding these headwinds together with the uncertainty related to the executive order mentioned earlier as well as the potential implications for the recent department of interior directive ordering secretary's approval of many renewable project development activities we believe that the recent policy and trade development have on balance strengthened first solar's relative position in the solar manufacturing industry as illustrated on slide five At a broader macro level, we believe the long-term position of the utility-scale solar industry as a whole remains strong given significantly increasing demand for electricity and the ability of solar generation to meet this demand. at a broader macro level we believe the long-term position of the utility-scale solar industry as a whole remains strong given significantly increasing demand for electricity and the ability of solar generation to meet this demand As we stated previously, American leadership in AI, cryptocurrency, and reshoring manufacturing needs abundant, cost-competitive electricity generation. as we stated previously american leadership in ai cryptocurrency and reshoring manufacturing needs abundant cost-competitive electricity generation Absent new generating capacity coming online quickly, there are risks of not being enough electricity to power these strategically important industries to their full potential before the current administration ends. absent new generating capacity coming online quickly there are risks of not being enough electricity to power these strategically important industries to their full potential before the current administration ends Given its attributes of low cost and high speed to deployment relative to other sources of energy generation, solar should clearly be a significant part of the near-term solution mix. This argument is supported by numerous recent reports. For example, in June, Lazard, the most recent Levelized Cost of Energy report demonstrates that utility-scale PV is cost competitive with conventional forms of energy generation including natural gas and nuclear. This fact does not consider the practicalities of a typical natural gas project development timeline, which requires approximately five years to complete, assuming it is untethered by supply chain constraints or the availability of pipeline infrastructure, or nuclear projects, which take about twice as long and create a potential supply chain strategic vulnerability requiring sourcing uranium from Russia and China. Given its attributes of low cost and high speed to deployment relative to other sources of energy generation, solar should clearly be a significant part of the near-term solution mix. given its attributes of low cost and high speed to deployment relative to other sources of energy generation solar should clearly be a significant part of the near-term solution mix This argument is supported by numerous recent reports. this argument is supported by numerous recent reports For example, in June, Lazard, the most recent Levelized Cost of Energy report demonstrates that utility-scale PV is cost competitive with conventional forms of energy generation including natural gas and nuclear. for example in june lazard the most recent levelized cost of energy report demonstrates that utility-scale pv is cost competitive with conventional forms of energy generation including natural gas and nuclear This fact does not consider the practicalities of a typical natural gas project development timeline, which requires approximately five years to complete, assuming it is untethered by supply chain constraints or the availability of pipeline infrastructure, or nuclear projects, which take about twice as long and create a potential supply chain strategic vulnerability requiring sourcing uranium from Russia and China. this fact does not consider the practicalities of a typical natural gas project development timeline which requires approximately five years to complete assuming it is untethered by supply chain constraints or the availability of pipeline infrastructure or nuclear projects which take about twice as long and create a potential supply chain strategic vulnerability requiring sourcing uranium from russia and china We believe that on a fundamental basis, with its cost-competitive energy and faster time to power profile, the case for utility-scale solar generation is compelling regardless of the policy environment. This case is underpinned by the role that utility-scale solar can play alongside energy storage as a viable, reliable, cost-competitive complement to the eventual scale-up in nuclear power generation capacity. Utility-scale solar has also been shown to help lower electricity prices, dampening the effects of inflation while supporting grid reliability and helping utilities navigate peak demand in extreme conditions, lowering the likelihood of blackouts. First Solar is mission ready today to help power the key pillars of economic growth, which we believe places First Solar, a utility-scale leader, in a position of strength, and I'll turn the call over to Alex to discuss shipments, bookings, Q2 financials, and guidance. We believe that on a fundamental basis, with its cost-competitive energy and faster time to power profile, the case for utility-scale solar generation is compelling regardless of the policy environment. we believe that on a fundamental basis with its cost-competitive energy and faster time to power profile the case for utility-scale solar generation is compelling regardless of the policy environment This case is underpinned by the role that utility-scale solar can play alongside energy storage as a viable, reliable, cost-competitive complement to the eventual scale-up in nuclear power generation capacity. this case is underpinned by the role that utility-scale solar can play alongside energy storage as a viable reliable cost-competitive complement to the eventual scale-up in nuclear power generation capacity Utility-scale solar has also been shown to help lower electricity prices, dampening the effects of inflation while supporting grid reliability and helping utilities navigate peak demand in extreme conditions, lowering the likelihood of blackouts. utility-scale solar has also been shown to help lower electricity prices dampening the effects of inflation while supporting grid reliability and helping utilities navigate peak demand in extreme conditions lowering the likelihood of blackouts First Solar is mission ready today to help power the key pillars of economic growth, which we believe places First Solar, a utility-scale leader, in a position of strength, and I'll turn the call over to Alex to discuss shipments, bookings, Q2 financials, and guidance. first solar is mission ready today to help power the key pillars of economic growth which we believe places first solar a utility-scale leader in a position of strength and i'll turn the call over to alex to discuss shipments bookings q2 financials and guidance

Speaker 10: Thanks Mark. Beginning on slide six, as of December 31, 2024, our contracted backlog totaled 68.5 GW valued at $20.5 billion, or approximately $0.299 per watt. Through Q2 we recognized 6.5 GW in sales. We continued our disciplined approach to new bookings, strategically leveraging the strength of our customer backlog amid the policy uncertainty that continued during the quarter and limited pricing visibility. As a result, we recorded 0.9 GW of gross bookings in the first half of the year. Offsetting this, we recorded 1.1 GW of debookings driven by contract terminations, resulting in net debookings of 0.2 GW through June 30, 2025. Notably, 0.9 GW of the debookings were related to our Series six international products and were recorded in our Q2 results. As a result, our quarter-end contracted backlog stood at 61.9 GW valued at $18.5 billion or approximately $0.299 per watt. Thanks Mark. thanks mark Beginning on slide six, as of December 31, 2024, our contracted backlog totaled 68.5 GW valued at $20.5 billion, or approximately $0.299 per watt. beginning on slide six as of december 31 2024 our contracted backlog totaled 68.5 gw valued at $20.5 billion or approximately $0.299 per watt Through Q2 we recognized 6.5 GW in sales. through q2 we recognized 6.5 gw in sales We continued our disciplined approach to new bookings, strategically leveraging the strength of our customer backlog amid the policy uncertainty that continued during the quarter and limited pricing visibility. we continued our disciplined approach to new bookings strategically leveraging the strength of our customer backlog amid the policy uncertainty that continued during the quarter and limited pricing visibility As a result, we recorded 0.9 GW of gross bookings in the first half of the year. as a result we recorded 0.9 gw of gross bookings in the first half of the year Offsetting this, we recorded 1.1 GW of debookings driven by contract terminations, resulting in net debookings of 0.2 GW through June 30, 2025. offsetting this we recorded 1.1 gw of debookings driven by contract terminations resulting in net debookings of 0.2 gw through june 30 2025 Notably, 0.9 GW of the debookings were related to our Series six international products and were recorded in our Q2 results. notably 0.9 gw of the debookings were related to our series six international products and were recorded in our q2 results As a result, our quarter-end contracted backlog stood at 61.9 GW valued at $18.5 billion or approximately $0.299 per watt. as a result our quarter-end contracted backlog stood at 61.9 gw valued at $18.5 billion or approximately $0.299 per watt As a reminder, a significant portion of this contracted backlog includes pricing adjusters that provide the opportunity to increase the base ASP contingent on meeting specific milestones within our current technology roadmap by the time of delivery. These figures exclude such potential adjustments including additional changes tied to module bin freight overages, commodity price shifts, committed wattage, U.S. Content volumes, and tariff changes. Following the enactment of the recent reconciliation bill, we saw an increase in customer engagement resulting in 2.1 GW of new bookings as customers pursued near-term opportunities. Of this total, approximately 1.4 GW was Series six international product, 0.9 GW of which was recontracted volume that was previously terminated in Q2 including the associated termination payments. This recontracted volume was effectively sold at approximately $0.33 per watt. As a reminder, a significant portion of this contracted backlog includes pricing adjusters that provide the opportunity to increase the base ASP contingent on meeting specific milestones within our current technology roadmap by the time of delivery. as a reminder a significant portion of this contracted backlog includes pricing adjusters that provide the opportunity to increase the base asp contingent on meeting specific milestones within our current technology roadmap by the time of delivery These figures exclude such potential adjustments including additional changes tied to module bin freight overages, commodity price shifts, committed wattage, U.S. these figures exclude such potential adjustments including additional changes tied to module bin freight overages commodity price shifts committed wattage u.s Content volumes, and tariff changes. content volumes and tariff changes Following the enactment of the recent reconciliation bill, we saw an increase in customer engagement resulting in 2.1 GW of new bookings as customers pursued near-term opportunities. following the enactment of the recent reconciliation bill we saw an increase in customer engagement resulting in 2.1 gw of new bookings as customers pursued near-term opportunities Of this total, approximately 1.4 GW was Series six international product, 0.9 GW of which was recontracted volume that was previously terminated in Q2 including the associated termination payments. of this total approximately 1.4 gw was series six international product 0.9 gw of which was recontracted volume that was previously terminated in q2 including the associated termination payments This recontracted volume was effectively sold at approximately $0.33 per watt. this recontracted volume was effectively sold at approximately $0.33 per watt The remaining 0.7 GW of the 2.1 GW was contracted at approximately $0.32 per watt excluding the impact of adjusted and India domestic sales. As of today, our total contracted backlog stands at 64 GW. While demand for our U.S. manufactured products remains strong, we continue to face an under allocation of Series six production from our Malaysia and Vietnam facilities. This imbalance initially resulted from customers exercising contractual delivery shift rights out of 2025 due to policy uncertainty and has more recently been exacerbated by increased tariff pressure. These factors contribute to the termination of a portion of our Series six international backlog this quarter. Of our total 64 GW backlog, approximately 11 GW consists of international Series six products. The remaining 0.7 GW of the 2.1 GW was contracted at approximately $0.32 per watt excluding the impact of adjusted and India domestic sales. the remaining 0.7 gw of the 2.1 gw was contracted at approximately $0.32 per watt excluding the impact of adjusted and india domestic sales As of today, our total contracted backlog stands at 64 GW. as of today our total contracted backlog stands at 64 gw While demand for our U.S. manufactured products remains strong, we continue to face an under allocation of Series six production from our Malaysia and Vietnam facilities. while demand for our u.s manufactured products remains strong we continue to face an under allocation of series six production from our malaysia and vietnam facilities This imbalance initially resulted from customers exercising contractual delivery shift rights out of 2025 due to policy uncertainty and has more recently been exacerbated by increased tariff pressure. this imbalance initially resulted from customers exercising contractual delivery shift rights out of 2025 due to policy uncertainty and has more recently been exacerbated by increased tariff pressure These factors contribute to the termination of a portion of our Series six international backlog this quarter. these factors contribute to the termination of a portion of our series six international backlog this quarter Of our total 64 GW backlog, approximately 11 GW consists of international Series six products. of our total 64 gw backlog approximately 11 gw consists of international series six products Of that, approximately 10.1 GW is planned for sale into the U.S., with the vast majority under contracts that include circuit breaker provisions designed to mitigate tariff exposure as referenced in our previous earnings call. Accordingly, the inclusion of tariff mitigation provisions in our contract serves as a strategic safeguard, enabling us to proactively manage and limit potential gross margin erosion should tariff-related impacts not be resolved through customer engagement. Beyond these immediate drivers and contractual mitigants, we also continue to observe indicators of a broader strategic shift among multinational oil and gas and power utilities companies, particularly those headquartered in Europe, away from renewable project development and back towards fossil fuel investments. Moving to slide seven, our total pipeline and mid to late stage booking opportunities remain strong. The booking opportunity is 83.3 GW and mid to late stage booking opportunities of 20.1 GW. Of that, approximately 10.1 GW is planned for sale into the U.S., with the vast majority under contracts that include circuit breaker provisions designed to mitigate tariff exposure as referenced in our previous earnings call. of that approximately 10.1 gw is planned for sale into the u.s with the vast majority under contracts that include circuit breaker provisions designed to mitigate tariff exposure as referenced in our previous earnings call Accordingly, the inclusion of tariff mitigation provisions in our contract serves as a strategic safeguard, enabling us to proactively manage and limit potential gross margin erosion should tariff-related impacts not be resolved through customer engagement. accordingly the inclusion of tariff mitigation provisions in our contract serves as a strategic safeguard enabling us to proactively manage and limit potential gross margin erosion should tariff-related impacts not be resolved through customer engagement Beyond these immediate drivers and contractual mitigants, we also continue to observe indicators of a broader strategic shift among multinational oil and gas and power utilities companies, particularly those headquartered in Europe, away from renewable project development and back towards fossil fuel investments. beyond these immediate drivers and contractual mitigants we also continue to observe indicators of a broader strategic shift among multinational oil and gas and power utilities companies particularly those headquartered in europe away from renewable project development and back towards fossil fuel investments Moving to slide seven, our total pipeline and mid to late stage booking opportunities remain strong. moving to slide seven our total pipeline and mid to late stage booking opportunities remain strong The booking opportunity is 83.3 GW and mid to late stage booking opportunities of 20.1 GW. the booking opportunity is 83.3 gw and mid to late stage booking opportunities of 20.1 gw Our mid to late stage pipeline includes 3.9 GW of opportunities that are contracted subject to conditions precedent. As a reminder, signed contracts in India will not be recognized as bookings until we've received full security against the offtake. Turning to slide eight, I'll cover our second quarter financial results. We recognized 3.6 GW of module sales, including 2.3 GW from our U.S. manufacturing facilities. This resulted in second quarter net sales of $1.1 billion, an increase of $0.3 billion from the first quarter. The increase was primarily driven by an anticipated increase in shipment volumes and stronger demand for domestically produced modules. Our second quarter results included $63 million in contract termination payments tied to 1.1 GW of volume, with $50 million related to 0.9 GW of terminated Series six international volume. Our mid to late stage pipeline includes 3.9 GW of opportunities that are contracted subject to conditions precedent. our mid to late stage pipeline includes 3.9 gw of opportunities that are contracted subject to conditions precedent As a reminder, signed contracts in India will not be recognized as bookings until we've received full security against the offtake. as a reminder signed contracts in india will not be recognized as bookings until we've received full security against the offtake Turning to slide eight, I'll cover our second quarter financial results. turning to slide eight i'll cover our second quarter financial results We recognized 3.6 GW of module sales, including 2.3 GW from our U.S. manufacturing facilities. we recognized 3.6 gw of module sales including 2.3 gw from our u.s manufacturing facilities This resulted in second quarter net sales of $1.1 billion, an increase of $0.3 billion from the first quarter. this resulted in second quarter net sales of $1.1 billion an increase of $0.3 billion from the first quarter The increase was primarily driven by an anticipated increase in shipment volumes and stronger demand for domestically produced modules. the increase was primarily driven by an anticipated increase in shipment volumes and stronger demand for domestically produced modules Our second quarter results included $63 million in contract termination payments tied to 1.1 GW of volume, with $50 million related to 0.9 GW of terminated Series six international volume. our second quarter results included $63 million in contract termination payments tied to 1.1 gw of volume with $50 million related to 0.9 gw of terminated series six international volume Note this 1.1 GW of terminated volume represented less than 2% of our contracted backlog as of second quarter end. Gross margin for the quarter was 46%, up from 41% in Q1. The increase was primarily driven by higher contract termination revenue and a greater proportion of modules sold from our U.S. manufacturing facilities, which are eligible for Section 45X tax credits. These factors were partially offset by increased detention and demurrage charges, higher core costs associated with a sales mix weighted towards U.S. produced modules, and a change in Section 45X credit valuation between periods. The sale of a portion of these credits through an agreement with a leading financial institution, combined with our expectation to sell the majority of credits generated in 2025, resulted in a cumulative $29 million reduction to cost of sales, reflecting the anticipated value of the remaining credits generated through Q2. Note this 1.1 GW of terminated volume represented less than 2% of our contracted backlog as of second quarter end. note this 1.1 gw of terminated volume represented less than 2% of our contracted backlog as of second quarter end Gross margin for the quarter was 46%, up from 41% in Q1. gross margin for the quarter was 46% up from 41% in q1 The increase was primarily driven by higher contract termination revenue and a greater proportion of modules sold from our U.S. manufacturing facilities, which are eligible for Section 45X tax credits. the increase was primarily driven by higher contract termination revenue and a greater proportion of modules sold from our u.s manufacturing facilities which are eligible for section 45x tax credits These factors were partially offset by increased detention and demurrage charges, higher core costs associated with a sales mix weighted towards U.S. produced modules, and a change in Section 45X credit valuation between periods. these factors were partially offset by increased detention and demurrage charges higher core costs associated with a sales mix weighted towards u.s produced modules and a change in section 45x credit valuation between periods The sale of a portion of these credits through an agreement with a leading financial institution, combined with our expectation to sell the majority of credits generated in 2025, resulted in a cumulative $29 million reduction to cost of sales, reflecting the anticipated value of the remaining credits generated through Q2. the sale of a portion of these credits through an agreement with a leading financial institution combined with our expectation to sell the majority of credits generated in 2025 resulted in a cumulative $29 million reduction to cost of sales reflecting the anticipated value of the remaining credits generated through q2 As an update on warranty related matters, we did not incur any new warranty charges this quarter related to the Series seven modules affected by prior manufacturing issues. As of the end of Q2, we continue to hold approximately 0.7 GW of potentially impacted Series seven inventory. We're making continued progress in reaching settlement agreements for impacted Series seven modules from our initial production, consistent with our disclosed warranty range. SG&A, R&D, and production startup expenses totaled $138 million in the second quarter, reflecting an increase of approximately $15 million as compared to the first quarter. A primary driver of this increase was production startup costs associated with the ramp up of our Louisiana facility. As an update on warranty related matters, we did not incur any new warranty charges this quarter related to the Series seven modules affected by prior manufacturing issues. as an update on warranty related matters we did not incur any new warranty charges this quarter related to the series seven modules affected by prior manufacturing issues As of the end of Q2, we continue to hold approximately 0.7 GW of potentially impacted Series seven inventory. as of the end of q2 we continue to hold approximately 0.7 gw of potentially impacted series seven inventory We're making continued progress in reaching settlement agreements for impacted Series seven modules from our initial production, consistent with our disclosed warranty range. we're making continued progress in reaching settlement agreements for impacted series seven modules from our initial production consistent with our disclosed warranty range SG&A, R&D, and production startup expenses totaled $138 million in the second quarter, reflecting an increase of approximately $15 million as compared to the first quarter. sg&a r&d and production startup expenses totaled $138 million in the second quarter reflecting an increase of approximately $15 million as compared to the first quarter A primary driver of this increase was production startup costs associated with the ramp up of our Louisiana facility. a primary driver of this increase was production startup costs associated with the ramp up of our louisiana facility Additional one-time expenses included broker fees related to the sale of our Section 45X tax credits and legal costs tied to the previously disclosed SEC Division of Enforcement investigation, and we're pleased to report the SEC has concluded its inquiry into First Solar and the staff does not intend to recommend any enforcement action against the company. Operating income for the quarter was $362 million, which included $125 million in depreciation, amortization, and accretion, $15 million in ramp and underutilization costs, $31 million in production startup expense, and $7 million in share-based compensation. Non-operating income resulted in a net expense of $9 million in the second quarter, representing a decline of approximately $5 million as compared to the prior quarter. This was primarily driven by lower interest income as a result of a decrease in investable cash, cash equivalents, and marketable securities. Additional one-time expenses included broker fees related to the sale of our Section 45X tax credits and legal costs tied to the previously disclosed SEC Division of Enforcement investigation, and we're pleased to report the SEC has concluded its inquiry into First Solar and the staff does not intend to recommend any enforcement action against the company. additional one-time expenses included broker fees related to the sale of our section 45x tax credits and legal costs tied to the previously disclosed sec division of enforcement investigation and we're pleased to report the sec has concluded its inquiry into first solar and the staff does not intend to recommend any enforcement action against the company Operating income for the quarter was $362 million, which included $125 million in depreciation, amortization, and accretion, $15 million in ramp and underutilization costs, $31 million in production startup expense, and $7 million in share-based compensation. operating income for the quarter was $362 million which included $125 million in depreciation amortization and accretion $15 million in ramp and underutilization costs $31 million in production startup expense and $7 million in share-based compensation Non-operating income resulted in a net expense of $9 million in the second quarter, representing a decline of approximately $5 million as compared to the prior quarter. non-operating income resulted in a net expense of $9 million in the second quarter representing a decline of approximately $5 million as compared to the prior quarter This was primarily driven by lower interest income as a result of a decrease in investable cash, cash equivalents, and marketable securities. this was primarily driven by lower interest income as a result of a decrease in investable cash cash equivalents and marketable securities Tax expense in the second quarter was $10 million compared to $8 million in the first quarter. This increase was primarily driven by a change in pre-tax income and the jurisdictional mix of such income, and this resulted in second quarter earnings of $3.18 per diluted share. Turning to slide nine, I'll discuss select balance sheet items and summary cash flow information. As of the end of Q2, our total balance of cash, cash equivalents, restricted cash, restricted cash equivalents, and marketable securities was $1.2 billion, an increase of approximately $0.3 billion from the prior quarter. This increase was primarily driven by the sale of certain of our Section 45X tax credits generated in the first half of 2025. Tax expense in the second quarter was $10 million compared to $8 million in the first quarter. tax expense in the second quarter was $10 million compared to $8 million in the first quarter This increase was primarily driven by a change in pre-tax income and the jurisdictional mix of such income, and this resulted in second quarter earnings of $3.18 per diluted share. this increase was primarily driven by a change in pre-tax income and the jurisdictional mix of such income and this resulted in second quarter earnings of $3.18 per diluted share Turning to slide nine, I'll discuss select balance sheet items and summary cash flow information. turning to slide nine i'll discuss select balance sheet items and summary cash flow information As of the end of Q2, our total balance of cash, cash equivalents, restricted cash, restricted cash equivalents, and marketable securities was $1.2 billion, an increase of approximately $0.3 billion from the prior quarter. as of the end of q2 our total balance of cash cash equivalents restricted cash restricted cash equivalents and marketable securities was $1.2 billion an increase of approximately $0.3 billion from the prior quarter This increase was primarily driven by the sale of certain of our Section 45X tax credits generated in the first half of 2025. this increase was primarily driven by the sale of certain of our section 45x tax credits generated in the first half of 2025 Furthermore, as disclosed in our Form 8-K filed yesterday, on July 28th we entered into a new tax credit transfer agreement to sell up to $391 million Section 45X tax credits generating up to approximately $373 million in proceeds, transaction instruction in three installments with approximately $124 million received in connection with closing and the remaining payments expected in the fourth quarter of 2025. This transaction further demonstrates the liquidity of the 45X credit market, and the proceeds will continue to support our near-term working capital and capital expansion priorities. The quarterly increase in accounts receivable was primarily driven by higher sales volumes, with approximately 2/3 of our quarterly revenue being recognized in June, resulting in back-end weighted receivables. As of quarter end, total overdue balances stood at approximately $394 million. Furthermore, as disclosed in our Form 8-K filed yesterday, on July 28th we entered into a new tax credit transfer agreement to sell up to $391 million Section 45X tax credits generating up to approximately $373 million in proceeds, transaction instruction in three installments with approximately $124 million received in connection with closing and the remaining payments expected in the fourth quarter of 2025. furthermore as disclosed in our form 8-k filed yesterday on july 28th we entered into a new tax credit transfer agreement to sell up to $391 million section 45x tax credits generating up to approximately $373 million in proceeds transaction instruction in three installments with approximately $124 million received in connection with closing and the remaining payments expected in the fourth quarter of 2025 This transaction further demonstrates the liquidity of the 45X credit market, and the proceeds will continue to support our near-term working capital and capital expansion priorities. this transaction further demonstrates the liquidity of the 45x credit market and the proceeds will continue to support our near-term working capital and capital expansion priorities The quarterly increase in accounts receivable was primarily driven by higher sales volumes, with approximately 2/3 of our quarterly revenue being recognized in June, resulting in back-end weighted receivables. the quarterly increase in accounts receivable was primarily driven by higher sales volumes with approximately 2/3 of our quarterly revenue being recognized in june resulting in back-end weighted receivables As of quarter end, total overdue balances stood at approximately $394 million. as of quarter end total overdue balances stood at approximately $394 million This includes a previously negotiated settlement with a customer following a payment default, which deferred payments to Q4, of which $93 million remains outstanding with interest payments being current and made on schedule. Also included is $70 million in cumulative uncollected receivables related to customer termination payments. These overdue termination-related receivables correspond to approximately 1.8 GW of contract of cancelled volume. In such cases, we are actively pursuing litigation or arbitration to enforce our contractual rights and recover the payments owed. Inventory balances increased by $121 million, consistent with expectations, reflecting the backlog of revenue profile tied to continuous production throughout the year to fulfill contracted commitments. We anticipate our working capital position to improve throughout the year as our module shipment and sale profile increases relative to production, inventories decline, and we continue to collect on our accounts receivable while they remain contractually due. This includes a previously negotiated settlement with a customer following a payment default, which deferred payments to Q4, of which $93 million remains outstanding with interest payments being current and made on schedule. this includes a previously negotiated settlement with a customer following a payment default which deferred payments to q4 of which $93 million remains outstanding with interest payments being current and made on schedule Also included is $70 million in cumulative uncollected receivables related to customer termination payments. also included is $70 million in cumulative uncollected receivables related to customer termination payments These overdue termination-related receivables correspond to approximately 1.8 GW of contract of cancelled volume. these overdue termination-related receivables correspond to approximately 1.8 gw of contract of cancelled volume In such cases, we are actively pursuing litigation or arbitration to enforce our contractual rights and recover the payments owed. in such cases we are actively pursuing litigation or arbitration to enforce our contractual rights and recover the payments owed Inventory balances increased by $121 million, consistent with expectations, reflecting the backlog of revenue profile tied to continuous production throughout the year to fulfill contracted commitments. inventory balances increased by $121 million consistent with expectations reflecting the backlog of revenue profile tied to continuous production throughout the year to fulfill contracted commitments We anticipate our working capital position to improve throughout the year as our module shipment and sale profile increases relative to production, inventories decline, and we continue to collect on our accounts receivable while they remain contractually due. we anticipate our working capital position to improve throughout the year as our module shipment and sale profile increases relative to production inventories decline and we continue to collect on our accounts receivable while they remain contractually due Overdue termination payments are expected to remain outstanding pending resolution of arbitration and litigation proceedings. Capital expenditures totaled $288 million in the second quarter, primarily driven by investments in our newest facility in Louisiana where we've begun the integrated production run and expect to complete plant qualification in October. Our net cash position increased by approximately $0.2 billion-$0.6 billion as a result of the aforementioned factors. Before we turn to our updated financial outlook, I'd like to revisit the key assumptions informing our current guidance in light of recent policy and trade developments. These include tariff-related impacts on anticipated international module sales volumes and their associated logistics costs as outlined on slide 10. Our prior guidance was based on a binary set of tariff policy scenarios, each with distinct operational and financial implications. Overdue termination payments are expected to remain outstanding pending resolution of arbitration and litigation proceedings. overdue termination payments are expected to remain outstanding pending resolution of arbitration and litigation proceedings Capital expenditures totaled $288 million in the second quarter, primarily driven by investments in our newest facility in Louisiana where we've begun the integrated production run and expect to complete plant qualification in October. capital expenditures totaled $288 million in the second quarter primarily driven by investments in our newest facility in louisiana where we've begun the integrated production run and expect to complete plant qualification in october Our net cash position increased by approximately $0.2 billion- $0.6 billion as a result of the aforementioned factors. our net cash position increased by approximately $0.2 billion- $0.6 billion as a result of the aforementioned factors Before we turn to our updated financial outlook, I'd like to revisit the key assumptions informing our current guidance in light of recent policy and trade developments. before we turn to our updated financial outlook i'd like to revisit the key assumptions informing our current guidance in light of recent policy and trade developments These include tariff-related impacts on anticipated international module sales volumes and their associated logistics costs as outlined on slide 10. these include tariff-related impacts on anticipated international module sales volumes and their associated logistics costs as outlined on slide 10 Our prior guidance was based on a binary set of tariff policy scenarios, each with distinct operational and financial implications. our prior guidance was based on a binary set of tariff policy scenarios each with distinct operational and financial implications The upper end of our guide assumed the continuation of the universal tariff regime through year-end 2025, applying a 10% tariff and maintaining the suspension of country-specific reciprocal tariffs excluding China. The lower end reflected the same baseline but incorporated the impact of reciprocal tariffs taking effect as of July 9 with rates of 26% for India, 24% for Malaysia, and 46% for Vietnam. Our revised guidance incorporates the anticipated implementation of recently negotiated tariffs of 25% to market Malaysia and 20% for Vietnam, so relates to India. Our revised guidance incorporates the previously announced reciprocal tariff rate of 26% for India and does not incorporate the President's announcement yesterday of a 25% rate plus an unquantified penalty for India's purchase of military equipment and energy from Russia. A volume sold outlook for U.S. manufactured modules remains unchanged at 9. GW-9.8 GW. The upper end of our guide assumed the continuation of the universal tariff regime through year-end 2025, applying a 10% tariff and maintaining the suspension of country-specific reciprocal tariffs excluding China. the upper end of our guide assumed the continuation of the universal tariff regime through year-end 2025 applying a 10% tariff and maintaining the suspension of country-specific reciprocal tariffs excluding china The lower end reflected the same baseline but incorporated the impact of reciprocal tariffs taking effect as of July 9 with rates of 26% for India, 24% for Malaysia, and 46% for Vietnam. the lower end reflected the same baseline but incorporated the impact of reciprocal tariffs taking effect as of july 9 with rates of 26% for india 24% for malaysia and 46% for vietnam Our revised guidance incorporates the anticipated implementation of recently negotiated tariffs of 25% to market Malaysia and 20% for Vietnam, so relates to India. our revised guidance incorporates the anticipated implementation of recently negotiated tariffs of 25% to market malaysia and 20% for vietnam so relates to india Our revised guidance incorporates the previously announced reciprocal tariff rate of 26% for India and does not incorporate the President's announcement yesterday of a 25% rate plus an unquantified penalty for India's purchase of military equipment and energy from Russia. our revised guidance incorporates the previously announced reciprocal tariff rate of 26% for india and does not incorporate the president's announcement yesterday of a 25% rate plus an unquantified penalty for india's purchase of military equipment and energy from russia A volume sold outlook for U.S. manufactured modules remains unchanged at 9. GW- 9.8 GW. a volume sold outlook for u.s manufactured modules remains unchanged at 9. gw- 9.8 gw Our forecast of sales from our India manufacturing entity remains unchanged combined with an increase at the low end of the Series six international range. We now forecast international module sales of 7.2GW-9.5 GW for total module sales of 16.7 GW-19.3 GW. The international volume sold range remains wide and reflects both uncertainty and opportunity related to the outcome of tariff cost discussions with customers, the Section 232 action related to polysilicon and its derivatives, SIOP-related restrictions, and the Solar for AD/CVD investigation. In the event of customer terminations resulting from an inability or unwillingness to absorb tariff impacts on our international product, we plan to address the resulting supply demand imbalance through additional curtailments, including the potential temporary idling of production. As such, the lower end of our guidance range reflects increased underutilization period costs and the associated loss margin tied to these volume assumptions. Our forecast of sales from our India manufacturing entity remains unchanged combined with an increase at the low end of the Series six international range. our forecast of sales from our india manufacturing entity remains unchanged combined with an increase at the low end of the series six international range We now forecast international module sales of 7.2GW- 9.5 GW for total module sales of 16.7 GW- 19.3 GW. we now forecast international module sales of 7.2gw- 9.5 gw for total module sales of 16.7 gw- 19.3 gw The international volume sold range remains wide and reflects both uncertainty and opportunity related to the outcome of tariff cost discussions with customers, the Section 232 action related to polysilicon and its derivatives, SIOP-related restrictions, and the Solar for AD/CVD investigation. the international volume sold range remains wide and reflects both uncertainty and opportunity related to the outcome of tariff cost discussions with customers the section 232 action related to polysilicon and its derivatives siop-related restrictions and the solar for ad/cvd investigation In the event of customer terminations resulting from an inability or unwillingness to absorb tariff impacts on our international product, we plan to address the resulting supply demand imbalance through additional curtailments, including the potential temporary idling of production. in the event of customer terminations resulting from an inability or unwillingness to absorb tariff impacts on our international product we plan to address the resulting supply demand imbalance through additional curtailments including the potential temporary idling of production As such, the lower end of our guidance range reflects increased underutilization period costs and the associated loss margin tied to these volume assumptions. as such the lower end of our guidance range reflects increased underutilization period costs and the associated loss margin tied to these volume assumptions Accordingly, this curtailment strategy does not assume the incremental cost related to warehousing, detention, demurrage, or other logistics associated with internationally produced modules. It's important to note that certain indirect or currently unknown costs related to these tariffs, including potential restructuring charges or asset impairments, are excluded from the guidance provided today as it relates to tariff impact. Based on a doubling of Section 232 tariffs on aluminum and steel from 25%-50%, as well as updated rates applicable to other imports including substrate, glass, and interlayer, we anticipate a full year production cost impact from tariffs of approximately $70 million. We forecast approximately $80 million-$130 million in tariffs on finished goods imports, net of contractual recoveries from customers. It's important to note that without tariff recovery, international module sales may be dilutive to earnings. Accordingly, this curtailment strategy does not assume the incremental cost related to warehousing, detention, demurrage, or other logistics associated with internationally produced modules. accordingly this curtailment strategy does not assume the incremental cost related to warehousing detention demurrage or other logistics associated with internationally produced modules It's important to note that certain indirect or currently unknown costs related to these tariffs, including potential restructuring charges or asset impairments, are excluded from the guidance provided today as it relates to tariff impact. it's important to note that certain indirect or currently unknown costs related to these tariffs including potential restructuring charges or asset impairments are excluded from the guidance provided today as it relates to tariff impact Based on a doubling of Section 232 tariffs on aluminum and steel from 25%- 50%, as well as updated rates applicable to other imports including substrate, glass, and interlayer, we anticipate a full year production cost impact from tariffs of approximately $70 million. based on a doubling of section 232 tariffs on aluminum and steel from 25%- 50% as well as updated rates applicable to other imports including substrate glass and interlayer we anticipate a full year production cost impact from tariffs of approximately $70 million We forecast approximately $80 million- $130 million in tariffs on finished goods imports, net of contractual recoveries from customers. we forecast approximately $80 million- $130 million in tariffs on finished goods imports net of contractual recoveries from customers It's important to note that without tariff recovery, international module sales may be dilutive to earnings. it's important to note that without tariff recovery international module sales may be dilutive to earnings As such, the ability to recover tariffs is a key factor in our production and sales volume guidance. If we are unable to effectively negotiate these recoveries, we may further reduce international Series six production below current assumptions, which would result in additional underutilization charges. As such, the ability to recover tariffs is a key factor in our production and sales volume guidance. as such the ability to recover tariffs is a key factor in our production and sales volume guidance If we are unable to effectively negotiate these recoveries, we may further reduce international Series six production below current assumptions, which would result in additional underutilization charges. if we are unable to effectively negotiate these recoveries we may further reduce international series six production below current assumptions which would result in additional underutilization charges Under. Under. under Utilization charges related to running our international Series six production below full production capacity with under absorption costs accounted for as period expenses are forecast to total approximately $95 million-$180 million for the full year. Additionally, non-standard freight, warehousing, detention, demurrage, and other logistics-related costs have increased approximately $100 million-$400 million for the full year. This increase was driven by several factors: accelerated imports ahead of the July 9 and subsequently revised August 1 tariff implementation dates, shorter ocean freight transit times which led to earlier than expected port arrivals, Q2 customer terminations of Series six international products, lower than forecasted Series six international sales resulting in a short notice inventory buildup, and ongoing efforts to avoid anticipated Section 301 tonnage fees on Chinese-built vessels beginning in Q4. Utilization charges related to running our international Series six production below full production capacity with under absorption costs accounted for as period expenses are forecast to total approximately $95 million- $180 million for the full year. utilization charges related to running our international series six production below full production capacity with under absorption costs accounted for as period expenses are forecast to total approximately $95 million- $180 million for the full year Additionally, non-standard freight, warehousing, detention, demurrage, and other logistics-related costs have increased approximately $100 million- $400 million for the full year. additionally non-standard freight warehousing detention demurrage and other logistics-related costs have increased approximately $100 million- $400 million for the full year This increase was driven by several factors: accelerated imports ahead of the July 9 and subsequently revised August 1 tariff implementation dates, shorter ocean freight transit times which led to earlier than expected port arrivals, Q2 customer terminations of Series six international products, lower than forecasted Series six international sales resulting in a short notice inventory buildup, and ongoing efforts to avoid anticipated Section 301 tonnage fees on Chinese-built vessels beginning in Q4. this increase was driven by several factors accelerated imports ahead of the july 9 and subsequently revised august 1 tariff implementation dates shorter ocean freight transit times which led to earlier than expected port arrivals q2 customer terminations of series six international products lower than forecasted series six international sales resulting in a short notice inventory buildup and ongoing efforts to avoid anticipated section 301 tonnage fees on chinese-built vessels beginning in q4 Lastly, although our forecast value of 2025 Section 45X tax credits generated remains unchanged, our updated guidance now assumes the sale of these credits from all but one of our U.S. facility, the remaining facility. We plan to utilize the credits to offset taxable income and claim any residual benefit via direct pay. Accordingly, we've reduced the projected value of Section 45X tax credits in our guidance by approximately $75 million. I'll now cover the full year 2025 guidance ranges on slide 11. Our net sales guidance is between $4.9 billion and $5.7 billion, which includes an unchanged range of U.S. manufactured volume and India manufactured volumes sold. Our updated narrow range of international Series six volumes sold includes contract termination revenue of $63 million recognized in our Q2 results. Lastly, although our forecast value of 2025 Section 45X tax credits generated remains unchanged, our updated guidance now assumes the sale of these credits from all but one of our U.S. facility, the remaining facility. lastly although our forecast value of 2025 section 45x tax credits generated remains unchanged our updated guidance now assumes the sale of these credits from all but one of our u.s facility the remaining facility We plan to utilize the credits to offset taxable income and claim any residual benefit via direct pay. we plan to utilize the credits to offset taxable income and claim any residual benefit via direct pay Accordingly, we've reduced the projected value of Section 45X tax credits in our guidance by approximately $75 million. accordingly we've reduced the projected value of section 45x tax credits in our guidance by approximately $75 million I'll now cover the full year 2025 guidance ranges on slide 11. i'll now cover the full year 2025 guidance ranges on slide 11 Our net sales guidance is between $4.9 billion and $5.7 billion, which includes an unchanged range of U.S. manufactured volume and India manufactured volumes sold. our net sales guidance is between $4.9 billion and $5.7 billion which includes an unchanged range of u.s manufactured volume and india manufactured volumes sold Our updated narrow range of international Series six volumes sold includes contract termination revenue of $63 million recognized in our Q2 results. our updated narrow range of international series six volumes sold includes contract termination revenue of $63 million recognized in our q2 results Gross margin is expected to be between $2.05 billion and $2.35 billion or approximately 42%, which includes approximately $1.58 billion-$1.63 billion Section 45X tax credits, $95 million-$180 million of ramp underutilization costs, $80 million-$130 million of tariffs on finished goods imports, and $70 million of tariffs on bill of material imports. SG&A expense is expected to total $185 million-$195 million and R&D expected to total $230 million-$250 million. SG&A and R&D combined expense is expected to total $415 million-$445 million. Total operating expenses, which include $65 million-$75 million of production startup expense, are expected to be between $480 million and $520 million. Operating income is expected to range between $1.53 billion and $1.87 billion, implying an operating margin range of approximately 32%. Gross margin is expected to be between $2.05 billion and $2.35 billion or approximately 42%, which includes approximately $1.58 billion- $1.63 billion Section 45X tax credits, $95 million- $180 million of ramp underutilization costs, $80 million- $130 million of tariffs on finished goods imports, and $70 million of tariffs on bill of material imports. gross margin is expected to be between $2.05 billion and $2.35 billion or approximately 42% which includes approximately $1.58 billion- $1.63 billion section 45x tax credits, $95 million- $180 million of ramp underutilization costs, $80 million- $130 million of tariffs on finished goods imports and $70 million of tariffs on bill of material imports SG&A expense is expected to total $185 million- $195 million and R&D expected to total $230 million- $250 million. sg&a expense is expected to total $185 million- $195 million and r&d expected to total $230 million- $250 million SG&A and R&D combined expense is expected to total $415 million- $445 million. sg&a and r&d combined expense is expected to total $415 million- $445 million Total operating expenses, which include $65 million- $75 million of production startup expense, are expected to be between $480 million and $520 million. total operating expenses which include $65 million- $75 million of production startup expense are expected to be between $480 million and $520 million Operating income is expected to range between $1.53 billion and $1.87 billion, implying an operating margin range of approximately 32%. operating income is expected to range between $1.53 billion and $1.87 billion implying an operating margin range of approximately 32% This guidance includes $160 million-$255 million in combined ramp underutilization and plant startup costs, as well as approximately $1.58 billion-$1.63 billion in Section 45X credits net of the anticipated loss associated with the sale of these credits. This results in a full year 2025 earnings per diluted share guidance range of $13.50-$16.50, the midpoint of which is unchanged from our previous guidance. Notwithstanding the approximately $0.70 of impact of forecasted diluted EPS, our updated guidance now assumes the sale of 2025 Section 45X credits from all but one of our U.S. facilities. This guidance includes $160 million- $255 million in combined ramp underutilization and plant startup costs, as well as approximately $1.58 billion- $1.63 billion in Section 45X credits net of the anticipated loss associated with the sale of these credits. this guidance includes $160 million- $255 million in combined ramp underutilization and plant startup costs as well as approximately $1.58 billion- $1.63 billion in section 45x credits net of the anticipated loss associated with the sale of these credits This results in a full year 2025 earnings per diluted share guidance range of $13.50- $16.50, the midpoint of which is unchanged from our previous guidance. this results in a full year 2025 earnings per diluted share guidance range of $13.50- $16.50 the midpoint of which is unchanged from our previous guidance Notwithstanding the approximately $0.70 of impact of forecasted diluted EPS, our updated guidance now assumes the sale of 2025 Section 45X credits from all but one of our U.S. facilities. notwithstanding the approximately $0.70 of impact of forecasted diluted eps our updated guidance now assumes the sale of 2025 section 45x credits from all but one of our u.s facilities From. From. from An earnings cadence perspective, we anticipate module sales of 5 GW-6 GW for the third quarter with $390-$425 million in Section 45X credits resulting in earnings per diluted share between $3.30 and $4.70. Capital expenditures for 2025 remain consistent with prior guidance expected to range between $1 and $1.5 billion. Our year-end 2025 net cash balance is anticipated to be between $1.3 and $2 billion. Turning to slide 12, I'll summarize the key messages from today's call. Our Q2 earnings per diluted share came in above the high end of our guidance range at $3.18 per share, primarily due to customer contract termination payments and a favorable mix of U.S. versus international products sold within the quarter. Our forecast for U.S. produced volume sold remains unchanged for the year in the near term. An earnings cadence perspective, we anticipate module sales of 5 GW-6 GW for the third quarter with $390- $425 million in Section 45X credits resulting in earnings per diluted share between $3.30 and $4.70. an earnings cadence perspective we anticipate module sales of 5 gw-6 gw for the third quarter with $390- $425 million in section 45x credits resulting in earnings per diluted share between $3.30 and $4.70 Capital expenditures for 2025 remain consistent with prior guidance expected to range between $1 and $1.5 billion. capital expenditures for 2025 remain consistent with prior guidance expected to range between $1 and $1.5 billion Our year-end 2025 net cash balance is anticipated to be between $1.3 and $2 billion. our year-end 2025 net cash balance is anticipated to be between $1.3 and $2 billion Turning to slide 12, I'll summarize the key messages from today's call. turning to slide 12 i'll summarize the key messages from today's call Our Q2 earnings per diluted share came in above the high end of our guidance range at $3.18 per share, primarily due to customer contract termination payments and a favorable mix of U.S. versus international products sold within the quarter. our q2 earnings per diluted share came in above the high end of our guidance range at $3.18 per share primarily due to customer contract termination payments and a favorable mix of u.s versus international products sold within the quarter Our forecast for U.S. produced volume sold remains unchanged for the year in the near term. our forecast for u.s produced volume sold remains unchanged for the year in the near term Ongoing trade policy uncertainty, particularly around the tariff regime, has introduced challenges that were not anticipated at the start of the year and have persisted and continuously evolved throughout. We've updated our guidance to reflect the expected impact of the most recent proposed tariffs. Other than the President's indication yesterday of a potential penalty rate applying to India and our current outlook on their implications, we know the midpoint of our diluted EPS guidance remains unchanged even with the approximately $0.70 of impact of forecast to lose EPS in our updated guidance which assumes the sale of 2025 Section 45X credit to more than one of our U.S. receipts. Looking ahead, we are on balance pleased with the overall industrial and trade policy environment that emerged over recent weeks. We continue to remain confident in the long-term outlook for U.S. Ongoing trade policy uncertainty, particularly around the tariff regime, has introduced challenges that were not anticipated at the start of the year and have persisted and continuously evolved throughout. ongoing trade policy uncertainty particularly around the tariff regime has introduced challenges that were not anticipated at the start of the year and have persisted and continuously evolved throughout We've updated our guidance to reflect the expected impact of the most recent proposed tariffs. we've updated our guidance to reflect the expected impact of the most recent proposed tariffs Other than the President's indication yesterday of a potential penalty rate applying to India and our current outlook on their implications, we know the midpoint of our diluted EPS guidance remains unchanged even with the approximately $0.70 of impact of forecast to lose EPS in our updated guidance which assumes the sale of 2025 Section 45X credit to more than one of our U.S. receipts. other than the president's indication yesterday of a potential penalty rate applying to india and our current outlook on their implications we know the midpoint of our diluted eps guidance remains unchanged even with the approximately $0.70 of impact of forecast to lose eps in our updated guidance which assumes the sale of 2025 section 45x credit to more than one of our u.s receipts Looking ahead, we are on balance pleased with the overall industrial and trade policy environment that emerged over recent weeks. looking ahead we are on balance pleased with the overall industrial and trade policy environment that emerged over recent weeks We continue to remain confident in the long-term outlook for U.S. we continue to remain confident in the long-term outlook for u.s solar energy demand and First Solar's continued leadership underpinned by a vertically integrated manufacturing platform, domestic supply chain, non FEOC profile, and proprietary CADTEL technology. Demand for our U.S. manufactured product remains strong and our updated outlook continues to reflect the potential long-term resilience of our Series six international product contingent on the U.S. market's ability to adapt amid ongoing policy and trade uncertainty. With that, we conclude our prepared remarks and open the call for questions. solar energy demand and First Solar's continued leadership underpinned by a vertically integrated manufacturing platform, domestic supply chain, non FEOC profile, and proprietary CADTEL technology. solar energy demand and first solar's continued leadership underpinned by a vertically integrated manufacturing platform domestic supply chain non feoc profile and proprietary cadtel technology Demand for our U.S. manufactured product remains strong and our updated outlook continues to reflect the potential long-term resilience of our Series six international product contingent on the U.S. market's ability to adapt amid ongoing policy and trade uncertainty. demand for our u.s manufactured product remains strong and our updated outlook continues to reflect the potential long-term resilience of our series six international product contingent on the u.s market's ability to adapt amid ongoing policy and trade uncertainty With that, we conclude our prepared remarks and open the call for questions. with that we conclude our prepared remarks and open the call for questions Operator. Operator. operator

Speaker 8: Thank you, sir. We'll take our first question today from Brian Lee from Goldman Sachs. Thank you, sir. thank you sir We'll take our first question today from Brian Lee from Goldman Sachs. we'll take our first question today from brian lee from goldman sachs

Speaker 3: Thanks for taking the questions here. Kudos on the nice execution. I think obviously there's going to be a lot of focus here on what seems to be incremental improvement in the bookings environment as well as some expansion in kind of your pricing power based on some of the numbers you rattled off. Maybe just digging into that a bit. Two 2+ GW bookings just in the month of July, presumably pent up demand waiting for OBBBA to get through to the finish line. What kind of run rate bookings are you seeing real time? What can we read into the 2+ GW of bookings just in the month of July? Thanks for taking the questions here. thanks for taking the questions here Kudos on the nice execution. kudos on the nice execution I think obviously there's going to be a lot of focus here on what seems to be incremental improvement in the bookings environment as well as some expansion in kind of your pricing power based on some of the numbers you rattled off. i think obviously there's going to be a lot of focus here on what seems to be incremental improvement in the bookings environment as well as some expansion in kind of your pricing power based on some of the numbers you rattled off Maybe just digging into that a bit. maybe just digging into that a bit Two 2+ GW bookings just in the month of July, presumably pent up demand waiting for OBBBA to get through to the finish line. two 2+ gw bookings just in the month of july presumably pent up demand waiting for obbba to get through to the finish line What kind of run rate bookings are you seeing real time? what kind of run rate bookings are you seeing real time What can we read into the 2+ GW of bookings just in the month of July? what can we read into the 2+ gw of bookings just in the month of july Maybe as a follow up just on the pricing side, the $0.32-$0.33 per watt, depending on which portion of the bookings you're talking about, a couple pennies higher, several pennies higher than what you had been run rating at. What does that reflect? Is that AD/CVD? Is it FEOC? Is it domestic content entitlement? How much of that is actually being cap? What do you think could still be part of that pricing picture as you move through the next couple of quarters and into 2026? Thanks, guys. Maybe as a follow up just on the pricing side, the $0.32- $0.33 per watt, depending on which portion of the bookings you're talking about, a couple pennies higher, several pennies higher than what you had been run rating at. maybe as a follow up just on the pricing side the $0.32- $0.33 per watt depending on which portion of the bookings you're talking about a couple pennies higher several pennies higher than what you had been run rating at What does that reflect? what does that reflect Is that AD/CVD? is that ad/cvd Is it FEOC? is it feoc Is it domestic content entitlement? is it domestic content entitlement How much of that is actually being cap? how much of that is actually being cap What do you think could still be part of that pricing picture as you move through the next couple of quarters and into 2026? what do you think could still be part of that pricing picture as you move through the next couple of quarters and into 2026 Thanks, guys. thanks guys

Speaker 9: All right, thanks, Brian. All right, thanks, Brian. all right thanks brian I'll take that. I'll take that. i'll take that First off, I would say that we're still learning. We're kind of feeling our way around in terms of what's happening in the market and what are the implications around pricing. Clearly, after July 4th, when the bill was signed, we had a lot of inbounds, a lot of questions, a lot of inquiries, a lot of people trying to think through their safe harbor strategy. What's really nice when you think about it, we already had safe harbor largely was through 2028, and really robust demand for that period of window. Now with the kind of where we are right now, you've got a window now that will take that activity all the way out through 2030, right. Another two more years of safe harbor, contingent, depending on what ultimately happens to the executive order. First off, I would say that we're still learning. first off i would say that we're still learning We're kind of feeling our way around in terms of what's happening in the market and what are the implications around pricing. we're kind of feeling our way around in terms of what's happening in the market and what are the implications around pricing Clearly, after July 4th, when the bill was signed, we had a lot of inbounds, a lot of questions, a lot of inquiries, a lot of people trying to think through their safe harbor strategy. clearly after july 4th when the bill was signed we had a lot of inbounds a lot of questions a lot of inquiries a lot of people trying to think through their safe harbor strategy What's really nice when you think about it, we already had safe harbor largely was through 2028, and really robust demand for that period of window. what's really nice when you think about it we already had safe harbor largely was through 2028 and really robust demand for that period of window Now with the kind of where we are right now, you've got a window now that will take that activity all the way out through 2030, right. now with the kind of where we are right now you've got a window now that will take that activity all the way out through 2030 right Another two more years of safe harbor, contingent, depending on what ultimately happens to the executive order. another two more years of safe harbor contingent depending on what ultimately happens to the executive order It's given us, the industry, a nice runway to move forward to the end of this decade, which is what we all love to have in terms of long-term visibility and certainty. When we look at the individual drivers and trying to translate that into what sort of created the ongoing engagement, I would argue this in the bookings we saw in July, it's a little bit of everything. Some of it is wanting to safe harbor for projects that would then be completed in 2029. Some of it is, you call it FEOC or you could call it AD/CVD related. We had a large volume of the bookings was related to. It's given us, the industry, a nice runway to move forward to the end of this decade, which is what we all love to have in terms of long-term visibility and certainty. it's given us the industry a nice runway to move forward to the end of this decade which is what we all love to have in terms of long-term visibility and certainty When we look at the individual drivers and trying to translate that into what sort of created the ongoing engagement, I would argue this in the bookings we saw in July, it's a little bit of everything. when we look at the individual drivers and trying to translate that into what sort of created the ongoing engagement i would argue this in the bookings we saw in july it's a little bit of everything Some of it is wanting to safe harbor for projects that would then be completed in 2029. some of it is wanting to safe harbor for projects that would then be completed in 2029 Some of it is, you call it FEOC or you could call it AD/ CVD related. some of it is you call it feoc or you could call it ad/ cvd related We had a large volume of the bookings was related to. we had a large volume of the bookings was related to A. A. a customer who had already committed volume or believed they had committed volume from a Chinese supplier, and that Chinese supplier reneged on that volume. That volume was actually needed in kind of the 2026 time frame. They needed to react very quickly in order to recover and get certainty of a supply chain available. We were able to leverage kind of the opportunistic debooking that we saw in the quarter, plus some inventory position we had on international volume in order to fulfill that requirement for that particular customer. I would say there's still good momentum. I was talking with our Chief Commercial Officer today and we got a number of deals near term that we would expect to close that could add up to another GW here near term. customer who had already committed volume or believed they had committed volume from a Chinese supplier, and that Chinese supplier reneged on that volume. customer who had already committed volume or believed they had committed volume from a chinese supplier and that chinese supplier reneged on that volume That volume was actually needed in kind of the 2026 time frame. that volume was actually needed in kind of the 2026 time frame They needed to react very quickly in order to recover and get certainty of a supply chain available. they needed to react very quickly in order to recover and get certainty of a supply chain available We were able to leverage kind of the opportunistic debooking that we saw in the quarter, plus some inventory position we had on international volume in order to fulfill that requirement for that particular customer. we were able to leverage kind of the opportunistic debooking that we saw in the quarter plus some inventory position we had on international volume in order to fulfill that requirement for that particular customer I would say there's still good momentum. i would say there's still good momentum I was talking with our Chief Commercial Officer today and we got a number of deals near term that we would expect to close that could add up to another GW here near term. i was talking with our chief commercial officer today and we got a number of deals near term that we would expect to close that could add up to another gw here near term We're encouraged, we're going to continue to sort of feel our way through it and we'll do a little price discovery and kind of see where everything settles in. As we said, we've done a lot here to try to best position this market and to address a level playing field. We think we're finally getting into that position and we think there's opportunity for additional price. In terms of our average ASPs, we'll have to sort of discover where that ultimately lands. We're encouraged with what we're seeing right now. We're encouraged, we're going to continue to sort of feel our way through it and we'll do a little price discovery and kind of see where everything settles in. we're encouraged we're going to continue to sort of feel our way through it and we'll do a little price discovery and kind of see where everything settles in As we said, we've done a lot here to try to best position this market and to address a level playing field. as we said we've done a lot here to try to best position this market and to address a level playing field We think we're finally getting into that position and we think there's opportunity for additional price. we think we're finally getting into that position and we think there's opportunity for additional price In terms of our average ASPs, we'll have to sort of discover where that ultimately lands. in terms of our average asps we'll have to sort of discover where that ultimately lands We're encouraged with what we're seeing right now. we're encouraged with what we're seeing right now

Speaker 8: Moving on to Mark Strouse from J.P. Morgan. Moving on to Mark Strouse from J.P. moving on to mark strouse from j.p Morgan. morgan

Speaker 5: Yes, good afternoon. Thanks for taking our questions. Just going back to the last point, Mark, on some of your customers that are contracted out through year end 2028, to the extent that there is a negative change in the, I'm sorry, in the safe harbor language from the executive order, can you just talk about kind of the percentage of that backlog that could potentially be at risk that contractually open for them to cancel? Thank you. Yes, good afternoon. yes good afternoon Thanks for taking our questions. thanks for taking our questions Just going back to the last point, Mark, on some of your customers that are contracted out through year end 2028, to the extent that there is a negative change in the, I'm sorry, in the safe harbor language from the executive order, can you just talk about kind of the percentage of that backlog that could potentially be at risk that contractually open for them to cancel? just going back to the last point mark on some of your customers that are contracted out through year end 2028 to the extent that there is a negative change in the i'm sorry in the safe harbor language from the executive order can you just talk about kind of the percentage of that backlog that could potentially be at risk that contractually open for them to cancel Thank you. thank you

Speaker 9: First off, I just want to make sure we're clear on one thing. The executive order was not intended to address the Section 48 and Section 45 ITC and PTC that was safe harbor at the end of 2024. From that point in time, you have four calendar years in order to complete and build your projects and put to place them in service. First off, I just want to make sure we're clear on one thing. first off i just want to make sure we're clear on one thing The executive order was not intended to address the Section 48 and Section 45 ITC and PTC that was safe harbor at the end of 2024. the executive order was not intended to address the section 48 and section 45 itc and ptc that was safe harbor at the end of 2024 From that point in time, you have four calendar years in order to complete and build your projects and put to place them in service. from that point in time you have four calendar years in order to complete and build your projects and put to place them in service That executive order should not have any impact relative to the legacy Section 48 and Section 45. The intent of the executive order was to focus on the tech neutral ITC, PTC and to focus on a couple of different things. One is to ensure there's true substance and appropriate guidance as it relates to what determines commence construction. There are a couple different ways to do that. One is through committing 5% or so of the CapEx of a project or implementing physical activities at the project or at the site physical work. Those are being looked at to provide definition and guidance. The reconciliation bill alluded to a need for guidance. I think the guidance was originally to be placed out no later than end of 2026. The executive order came out after the bill was signed saying, hey, we want that closer dated. That executive order should not have any impact relative to the legacy Section 48 and Section 45. that executive order should not have any impact relative to the legacy section 48 and section 45 The intent of the executive order was to focus on the tech neutral ITC, PTC and to focus on a couple of different things. the intent of the executive order was to focus on the tech neutral itc ptc and to focus on a couple of different things One is to ensure there's true substance and appropriate guidance as it relates to what determines commence construction. one is to ensure there's true substance and appropriate guidance as it relates to what determines commence construction There are a couple different ways to do that. there are a couple different ways to do that One is through committing 5% or so of the CapEx of a project or implementing physical activities at the project or at the site physical work. one is through committing 5% or so of the capex of a project or implementing physical activities at the project or at the site physical work Those are being looked at to provide definition and guidance. those are being looked at to provide definition and guidance The reconciliation bill alluded to a need for guidance. the reconciliation bill alluded to a need for guidance I think the guidance was originally to be placed out no later than end of 2026. The executive order came out after the bill was signed saying, hey, we want that closer dated. i think the guidance was originally to be placed out no later than end of 2026. the executive order came out after the bill was signed saying hey we want that closer dated It has effectively a 45-day window, which I think goes out to August 18th where that guidance is to be provided or notice of guidance. It also has some FEOC provisions in there as well. It is not just to address the commence construction, it is also to address some of the FEOC provisions and to effectively ensure that the investments that we're making are not tethering back into nations that could be adversaries, such as Russia and China and others. The Section 48 legacy as it relates then to our project contracted backlog that carries through 2028 should be unaffected by whatever comes out through the executive order. The opportunity is what are the catalysts going beyond that. That is the new tech neutral guidance which will have some clarity around definition for commence construction and FEOC. It has effectively a 45-day window, which I think goes out to August 18th where that guidance is to be provided or notice of guidance. it has effectively a 45-day window which i think goes out to august 18th where that guidance is to be provided or notice of guidance It also has some FEOC provisions in there as well. it also has some feoc provisions in there as well It is not just to address the commence construction, it is also to address some of the FEOC provisions and to effectively ensure that the investments that we're making are not tethering back into nations that could be adversaries, such as Russia and China and others. it is not just to address the commence construction, it is also to address some of the feoc provisions and to effectively ensure that the investments that we're making are not tethering back into nations that could be adversaries such as russia and china and others The Section 48 legacy as it relates then to our project contracted backlog that carries through 2028 should be unaffected by whatever comes out through the executive order. the section 48 legacy as it relates then to our project contracted backlog that carries through 2028 should be unaffected by whatever comes out through the executive order The opportunity is what are the catalysts going beyond that. the opportunity is what are the catalysts going beyond that That is the new tech neutral guidance which will have some clarity around definition for commence construction and FEOC. that is the new tech neutral guidance which will have some clarity around definition for commence construction and feoc Assuming that those are all amenable and manageable by the market, then now we have a new window that we can continue to book out and see strong demand through 2029 into 2030, which we think is highly encouraging from that standpoint. Assuming that those are all amenable and manageable by the market, then now we have a new window that we can continue to book out and see strong demand through 2029 into 2030, which we think is highly encouraging from that standpoint. assuming that those are all amenable and manageable by the market then now we have a new window that we can continue to book out and see strong demand through 2029 into 2030 which we think is highly encouraging from that standpoint

Speaker 8: The next question today comes from Praneeth Satish, Wells Fargo. The next question today comes from Praneeth Satish, Wells Fargo. the next question today comes from praneeth satish wells fargo

Speaker 6: Thanks. Yeah, in terms of the bookings in July, it looks like it included Series six and recontracted volumes, but it does not look like you've tapped into your 2027 and beyond U.S. Series seven capacity yet. Should we interpret that to mean that pricing in that $0.32-$0.33 range just is not compelling enough for you to commit your 2027 to 2030 U.S. capacity? You mentioned you've got 1 GW of bookings here in advanced stages. Kind of putting two and two together here, should we assume that at a minimum you're trying to look for some price discovery above $0.32, $0.33 and maybe just as a follow up to that? Why even sell capacity at these levels? You've got the Section 232 polysilicon probe underway and if that's successful in its full intent, it could really boost pricing. Thanks. thanks Yeah, in terms of the bookings in July, it looks like it included Series six and recontracted volumes, but it does not look like you've tapped into your 2027 and beyond U.S. yeah in terms of the bookings in july, it looks like it included series six and recontracted volumes but it does not look like you've tapped into your 2027 and beyond u.s Series seven capacity yet. series seven capacity yet Should we interpret that to mean that pricing in that $0.32- $0.33 range just is not compelling enough for you to commit your 2027 to 2030 U.S. capacity? should we interpret that to mean that pricing in that $0.32- $0.33 range just is not compelling enough for you to commit your 2027 to 2030 u.s capacity You mentioned you've got 1 GW of bookings here in advanced stages. you mentioned you've got 1 gw of bookings here in advanced stages Kind of putting two and two together here, should we assume that at a minimum you're trying to look for some price discovery above $0.32, $0.33 and maybe just as a follow up to that? kind of putting two and two together here should we assume that at a minimum you're trying to look for some price discovery above $0.32 $0.33 and maybe just as a follow up to that Why even sell capacity at these levels? why even sell capacity at these levels You've got the Section 232 polysilicon probe underway and if that's successful in its full intent, it could really boost pricing. you've got the section 232 polysilicon probe underway and if that's successful in its full intent it could really boost pricing Maybe if you could just kind of talk through that rationale. Maybe if you could just kind of talk through that rationale. maybe if you could just kind of talk through that rationale

Speaker 9: Yeah, you're right, a good percentage of the bookings that we had in July were for Essex International. Really, even the bookings through the first half of the year, we had, call it, 1.2 GW or something like that, and slightly less than half of it was international product. As we think about how do we want to position the product, and knowing the backdrop of everything that's going on around us, how do we ensure getting what we think is full entitlement for the product? What I like about some of the safe harbor, let me back up first before I go. Yeah, you're right, a good percentage of the bookings that we had in July were for Essex International. yeah you're right a good percentage of the bookings that we had in july were for essex international Really, even the bookings through the first half of the year, we had, call it, 1.2 GW or something like that, and slightly less than half of it was international product. really even the bookings through the first half of the year we had call it 1.2 gw or something like that and slightly less than half of it was international product As we think about how do we want to position the product, and knowing the backdrop of everything that's going on around us, how do we ensure getting what we think is full entitlement for the product? as we think about how do we want to position the product and knowing the backdrop of everything that's going on around us how do we ensure getting what we think is full entitlement for the product What I like about some of the safe harbor, let me back up first before I go. what i like about some of the safe harbor let me back up first before i go If I look at the Series six that we recontracted, to me that was a great transaction with a great price and to clear out the inventory that was largely sitting either in a warehouse or sitting in a port and incurring D&D charges because the customer defaulted on that obligation. I wanted to get that inventory cleared as quickly as possible. This inventory, while it will not be deployed until 2026 with the customer, it is actually there taking ownership and it is going to their warehouse. I am not incurring any cost, and that's pretty important and pretty critical for us. We have to get the warehousing and D&D cost down in particular. If I look at the Series six that we recontracted, to me that was a great transaction with a great price and to clear out the inventory that was largely sitting either in a warehouse or sitting in a port and incurring D& D charges because the customer defaulted on that obligation. if i look at the series six that we recontracted to me that was a great transaction with a great price and to clear out the inventory that was largely sitting either in a warehouse or sitting in a port and incurring d& d charges because the customer defaulted on that obligation I wanted to get that inventory cleared as quickly as possible. i wanted to get that inventory cleared as quickly as possible This inventory, while it will not be deployed until 2026 with the customer, it is actually there taking ownership and it is going to their warehouse. this inventory while it will not be deployed until 2026 with the customer it is actually there taking ownership and it is going to their warehouse I am not incurring any cost, and that's pretty important and pretty critical for us. i am not incurring any cost and that's pretty important and pretty critical for us We have to get the warehousing and D&D cost down in particular. we have to get the warehousing and d&d cost down in particular The other thing I like about feathering in some safe harbor, taking some of the safe harbor volume that we did in July, is under the new 48E tech neutral, the safe harbor requirements and the tech neutral either investment tax credit or production tax credit has to be done at the inverter level. Now, once I committed to some percentage of a project, right. I think I have in a very strong position to capture the balance of that opportunity. As you think about it right now, if we safe harbor 200 MW, if you kind of do the math that potentially creates 2 GW-3 GW of opportunity of follow up. Right? Because it's going to be very difficult to take our technology at the inverter level and try to blend it with crystalline silicon. We have different voltages and you can't in string lengths and everything else. The other thing I like about feathering in some safe harbor, taking some of the safe harbor volume that we did in July, is under the new 48E tech neutral, the safe harbor requirements and the tech neutral either investment tax credit or production tax credit has to be done at the inverter level. the other thing i like about feathering in some safe harbor taking some of the safe harbor volume that we did in july is under the new 48e tech neutral the safe harbor requirements and the tech neutral either investment tax credit or production tax credit has to be done at the inverter level Now, once I committed to some percentage of a project, right. now once i committed to some percentage of a project right I think I have in a very strong position to capture the balance of that opportunity. i think i have in a very strong position to capture the balance of that opportunity As you think about it right now, if we safe harbor 200 MW, if you kind of do the math that potentially creates 2 GW- 3 GW of opportunity of follow up. as you think about it right now if we safe harbor 200 mw if you kind of do the math that potentially creates 2 gw- 3 gw of opportunity of follow up Right? right Because it's going to be very difficult to take our technology at the inverter level and try to blend it with crystalline silicon. because it's going to be very difficult to take our technology at the inverter level and try to blend it with crystalline silicon We have different voltages and you can't in string lengths and everything else. we have different voltages and you can't in string lengths and everything else It's very, very difficult and costly. I'm looking at, look, if I can take some near term safe harbor, seed those projects and then create a follow on opportunity for the balance of that. That's a good thing for us to do. I do fully take your comments about, yes, we very much are appreciative of the self-initiated 232 case and poly and the associated derivatives. That obviously could be another catalyst for us. We're being very selective in that regard. I do think what we did here near term with the bookings was to be very strategic and I do like doing some safe harboring that allows me to be better positioned for follow on volumes when those projects ultimately get built. It's very, very difficult and costly. it's very very difficult and costly I'm looking at, look, if I can take some near term safe harbor, seed those projects and then create a follow on opportunity for the balance of that. i'm looking at look if i can take some near term safe harbor seed those projects and then create a follow on opportunity for the balance of that That's a good thing for us to do. that's a good thing for us to do I do fully take your comments about, yes, we very much are appreciative of the self-initiated 232 case and poly and the associated derivatives. i do fully take your comments about yes we very much are appreciative of the self-initiated 232 case and poly and the associated derivatives That obviously could be another catalyst for us. that obviously could be another catalyst for us We're being very selective in that regard. we're being very selective in that regard I do think what we did here near term with the bookings was to be very strategic and I do like doing some safe harboring that allows me to be better positioned for follow on volumes when those projects ultimately get built. i do think what we did here near term with the bookings was to be very strategic and i do like doing some safe harboring that allows me to be better positioned for follow on volumes when those projects ultimately get built

Speaker 8: Philip Shen from ROTH Capital Partners has the next question. Philip Shen from ROTH Capital Partners has the next question. philip shen from roth capital partners has the next question

Speaker 4: Hey guys, thanks for taking the questions. A few here. Just as a follow-up on the pricing, prior questioner talked about the 232, there's also what we've read about which is the ramping UFLPA reinforcement. That's yet another potential catalyst. Mark, as you think through pricing, if international is at this $0.32 level, domestic content must be, I mean I gotta imagine high 30s is possible. Wondering if you can comment on that at all. How much inventory might be left in the warehouse? Finally, as it relates to capacity expansion, now that we're past OBB and we have these strong FEOC rules, the 232 and the linear catalysts that you have, to what degree are you starting to think about new capacity? What are the things that you need to see before you make that next announcement? Thanks. Hey guys, thanks for taking the questions. hey guys thanks for taking the questions A few here. a few here Just as a follow-up on the pricing, prior questioner talked about the 232, there's also what we've read about which is the ramping UFLPA reinforcement. just as a follow-up on the pricing prior questioner talked about the 232 there's also what we've read about which is the ramping uflpa reinforcement That's yet another potential catalyst. that's yet another potential catalyst Mark, as you think through pricing, if international is at this $0.32 level, domestic content must be, I mean I gotta imagine high 30s is possible. mark as you think through pricing if international is at this $0.32 level domestic content must be i mean i gotta imagine high 30s is possible Wondering if you can comment on that at all. wondering if you can comment on that at all How much inventory might be left in the warehouse? how much inventory might be left in the warehouse Finally, as it relates to capacity expansion, now that we're past OBB and we have these strong FEOC rules, the 232 and the linear catalysts that you have, to what degree are you starting to think about new capacity? finally as it relates to capacity expansion now that we're past obb and we have these strong feoc rules the 232 and the linear catalysts that you have to what degree are you starting to think about new capacity What are the things that you need to see before you make that next announcement? what are the things that you need to see before you make that next announcement Thanks. thanks

Speaker 9: On the last one, in terms of what do I need to see, we kind of, I think, need to let all the dust settle. Dust also includes, you know, kind of understanding what comes out with this executive order, to see what implications it has. That, I think, is a piece of the puzzle that hopefully we'll see here near term. Look, the thing I want to, maybe I want to make sure we, it was said in our prepared remarks, but I want to make sure it's clear as well. Our domestic supply and our contract for that domestic supply is pretty solid through 2028. Our levers for the domestic, discrete domestic, sit further, it's further out in the horizon. On the last one, in terms of what do I need to see, we kind of, I think, need to let all the dust settle. on the last one in terms of what do i need to see we kind of i think need to let all the dust settle Dust also includes, you know, kind of understanding what comes out with this executive order, to see what implications it has. dust also includes you know kind of understanding what comes out with this executive order to see what implications it has That, I think, is a piece of the puzzle that hopefully we'll see here near term. that i think is a piece of the puzzle that hopefully we'll see here near term Look, the thing I want to, maybe I want to make sure we, it was said in our prepared remarks, but I want to make sure it's clear as well. look the thing i want to maybe i want to make sure we it was said in our prepared remarks but i want to make sure it's clear as well Our domestic supply and our contract for that domestic supply is pretty solid through 2028. our domestic supply and our contract for that domestic supply is pretty solid through 2028 Our levers for the domestic, discrete domestic, sit further, it's further out in the horizon. our levers for the domestic discrete domestic sit further it's further out in the horizon What we have supply for is with that, I think I said in my prepared remarks, that domestic position that we have created is a strategic foothold in my mind to leverage our international volume as both Series six and Series seven. What we're looking to do, and I think we've alluded to this in the past because this ties back to your capacity expansion question, is to bring finishing capability into the U.S. We can bring finishing capabilities into the U.S. for both Series six and for Series seven. The other thing that does for us is we can get to market faster with new volume, which is great, but it helps mitigate the exposure to the tariffs because at these price points that we're seeing, you do simple math. At a 25% tariff, the tariffs are pretty hefty. The opportunity to bring it into the U.S. What we have supply for is with that, I think I said in my prepared remarks, that domestic position that we have created is a strategic foothold in my mind to leverage our international volume as both Series six and Series seven. what we have supply for is with that i think i said in my prepared remarks that domestic position that we have created is a strategic foothold in my mind to leverage our international volume as both series six and series seven What we're looking to do, and I think we've alluded to this in the past because this ties back to your capacity expansion question, is to bring finishing capability into the U.S. what we're looking to do and i think we've alluded to this in the past because this ties back to your capacity expansion question is to bring finishing capability into the u.s We can bring finishing capabilities into the U.S. for both Series six and for Series seven. we can bring finishing capabilities into the u.s for both series six and for series seven The other thing that does for us is we can get to market faster with new volume, which is great, but it helps mitigate the exposure to the tariffs because at these price points that we're seeing, you do simple math. the other thing that does for us is we can get to market faster with new volume which is great but it helps mitigate the exposure to the tariffs because at these price points that we're seeing you do simple math At a 25% tariff, the tariffs are pretty hefty. at a 25% tariff the tariffs are pretty hefty The opportunity to bring it into the U.S. the opportunity to bring it into the u.s and to do that on a semi-finished product drops my declared value upon import to about a third of that. Now I'm bringing it in and it's costing me $0.10, $0.11 kind of number versus something in the 30s, and therefore my tariffs are much lower. The other thing that it does is it allows us to qualify for the manufacturing tax credit for assembly. That's another lever that gets played into the math for the fundamental economics. We alluded to, you know, the business case is very attractive to doing that. What happens is I have the opportunity because of the constructs that are put in place right now to determine domestic content requirements. I can actually blend some more international in with my domestic and it allows that opportunity to be multiplied significantly in terms of its value lever. There's lots that's in play in that regard, Phil. and to do that on a semi-finished product drops my declared value upon import to about a third of that. and to do that on a semi-finished product drops my declared value upon import to about a third of that Now I'm bringing it in and it's costing me $0.10, $0.11 kind of number versus something in the 30s, and therefore my tariffs are much lower. now i'm bringing it in and it's costing me $0.10 $0.11 kind of number versus something in the 30s and therefore my tariffs are much lower The other thing that it does is it allows us to qualify for the manufacturing tax credit for assembly. the other thing that it does is it allows us to qualify for the manufacturing tax credit for assembly That's another lever that gets played into the math for the fundamental economics. that's another lever that gets played into the math for the fundamental economics We alluded to, you know, the business case is very attractive to doing that. we alluded to you know the business case is very attractive to doing that What happens is I have the opportunity because of the constructs that are put in place right now to determine domestic content requirements. what happens is i have the opportunity because of the constructs that are put in place right now to determine domestic content requirements I can actually blend some more international in with my domestic and it allows that opportunity to be multiplied significantly in terms of its value lever. i can actually blend some more international in with my domestic and it allows that opportunity to be multiplied significantly in terms of its value lever There's lots that's in play in that regard, Phil. there's lots that's in play in that regard phil We're working through each one of those items. We're trying to triangulate, get our insights, understanding what direction we want to go, you know, but I've been telling our team that hey, we've got to be ready for this. We've already been working through and identifying site selection. We already are thinking through the transferring of tools and equipment. The nice thing about running Malaysia and Vietnam at lower capacity right now means there's excess tools that are available. That means we can go after those tools. If the decision is that as the rates have come now with announcement of tariff rates, it really is going to be uneconomical to continue to import from those markets. We're working through each one of those items. we're working through each one of those items We're trying to triangulate, get our insights, understanding what direction we want to go, you know, but I've been telling our team that hey, we've got to be ready for this. we're trying to triangulate get our insights understanding what direction we want to go you know but i've been telling our team that hey we've got to be ready for this We've already been working through and identifying site selection. we've already been working through and identifying site selection We already are thinking through the transferring of tools and equipment. we already are thinking through the transferring of tools and equipment The nice thing about running Malaysia and Vietnam at lower capacity right now means there's excess tools that are available. the nice thing about running malaysia and vietnam at lower capacity right now means there's excess tools that are available That means we can go after those tools. that means we can go after those tools If the decision is that as the rates have come now with announcement of tariff rates, it really is going to be uneconomical to continue to import from those markets. if the decision is that as the rates have come now with announcement of tariff rates it really is going to be uneconomical to continue to import from those markets It's going to be more beneficial for us to bring in semi-finished product, do that here in the U.S., take advantage of the manufacturing tax credit environment and then give a little bit more. There'll be some domestic content associated with that product. Get some more value in that regard as well. It's going to be more beneficial for us to bring in semi-finished product, do that here in the U.S., take advantage of the manufacturing tax credit environment and then give a little bit more. it's going to be more beneficial for us to bring in semi-finished product do that here in the u.s take advantage of the manufacturing tax credit environment and then give a little bit more There'll be some domestic content associated with that product. there'll be some domestic content associated with that product Get some more value in that regard as well. get some more value in that regard as well

Speaker 10: Phil, just one thing I'll add in terms of what do we need to see, and Mark just touched on a little bit on the periphery, there is related to tariffs. Tariffs impact both how we might price our international fully finished products, but also is impactful as we think through. If we do a finishing line, how do we source the early stage product and bring it over? Is it coming from Malaysia, Vietnam? Just given that if you go back to our previous guide, we gave you two discrete scenarios because there was so much uncertainty around like long term tariff outcomes. Would it be at that 10% or would it be at the more reciprocal rates? We have updated that in our current guide to what we believe the current outlook is today. Clearly, we have some better visibility. Phil, just one thing I'll add in terms of what do we need to see, and Mark just touched on a little bit on the periphery, there is related to tariffs. phil just one thing i'll add in terms of what do we need to see and mark just touched on a little bit on the periphery there is related to tariffs Tariffs impact both how we might price our international fully finished products, but also is impactful as we think through. tariffs impact both how we might price our international fully finished products but also is impactful as we think through If we do a finishing line, how do we source the early stage product and bring it over? if we do a finishing line how do we source the early stage product and bring it over Is it coming from Malaysia, Vietnam? is it coming from malaysia vietnam Just given that if you go back to our previous guide, we gave you two discrete scenarios because there was so much uncertainty around like long term tariff outcomes. just given that if you go back to our previous guide we gave you two discrete scenarios because there was so much uncertainty around like long term tariff outcomes Would it be at that 10% or would it be at the more reciprocal rates? would it be at that 10% or would it be at the more reciprocal rates We have updated that in our current guide to what we believe the current outlook is today. we have updated that in our current guide to what we believe the current outlook is today Clearly, we have some better visibility. clearly we have some better visibility I'd say it's far from perfect, and even as we're putting the guide together, there was information that came out yesterday that could have potentially changed the view around India. What do we still need to see? We still need to have a bit more understanding of how the tariff regime is going to play out. I'd say it's far from perfect, and even as we're putting the guide together, there was information that came out yesterday that could have potentially changed the view around India. i'd say it's far from perfect and even as we're putting the guide together there was information that came out yesterday that could have potentially changed the view around india What do we still need to see? what do we still need to see We still need to have a bit more understanding of how the tariff regime is going to play out. we still need to have a bit more understanding of how the tariff regime is going to play out

Speaker 8: Next question is Moses Sutton, BNP Paribas. Next question is Moses Sutton, BNP Paribas. next question is moses sutton bnp paribas

Speaker 7: Thanks for squeezing in. If I look at the North America booking opportunity pipeline, it's up 1 GW, maybe 3 GW if I gross up the two that you booked in July. slide seven. How do we think of this? There's 70 GW of North America booking opportunity, there's your stuff that's in contracted backlog, and then there's in the industry that has a bunch of panels. If I add all that up, it almost looks like it's the whole industry's volume for the next few years. Is there a signal there that we could even see that there's more coming into the pipeline, or are you just seeing everything in the market already and that's reflected in that metric? Thanks for squeezing in. thanks for squeezing in If I look at the North America booking opportunity pipeline, it's up 1 GW, maybe 3 GW if I gross up the two that you booked in July. slide seven. if i look at the north america booking opportunity pipeline it's up 1 gw maybe 3 gw if i gross up the two that you booked in july slide seven How do we think of this? how do we think of this There's 70 GW of North America booking opportunity, there's your stuff that's in contracted backlog, and then there's in the industry that has a bunch of panels. there's 70 gw of north america booking opportunity there's your stuff that's in contracted backlog and then there's in the industry that has a bunch of panels If I add all that up, it almost looks like it's the whole industry's volume for the next few years. if i add all that up it almost looks like it's the whole industry's volume for the next few years Is there a signal there that we could even see that there's more coming into the pipeline, or are you just seeing everything in the market already and that's reflected in that metric? is there a signal there that we could even see that there's more coming into the pipeline or are you just seeing everything in the market already and that's reflected in that metric

Speaker 9: Moses, I think there's a lot going on right now and we've had a number of inbounds that are very large. Moses, I think there's a lot going on right now and we've had a number of inbounds that are very large. moses i think there's a lot going on right now and we've had a number of inbounds that are very large What I don't fully know, I'll use an example of this. As I indicated, we had a customer who had a near term need because their Chinese supplier reneged on that deal and they came to us. I've got others that are coming to us as well. That particular customer is looking to do something even bigger than what we've done, meaningfully larger for us in 2027 and 2028. That volume we sold to them this time around was 426. What I don't know is if others are getting those who, and this particular customer is not one that we've actually sold to over the last several years. I don't know if they're all getting signaled the same way, that the commitments they thought they had from their supply chain have now been reneged on and they're coming to First Solar. What I don't fully know, I'll use an example of this. what i don't fully know i'll use an example of this As I indicated, we had a customer who had a near term need because their Chinese supplier reneged on that deal and they came to us. as i indicated we had a customer who had a near term need because their chinese supplier reneged on that deal and they came to us I've got others that are coming to us as well. i've got others that are coming to us as well That particular customer is looking to do something even bigger than what we've done, meaningfully larger for us in 2027 and 2028. that particular customer is looking to do something even bigger than what we've done meaningfully larger for us in 2027 and 2028 That volume we sold to them this time around was 426. that volume we sold to them this time around was 426 What I don't know is if others are getting those who, and this particular customer is not one that we've actually sold to over the last several years. what i don't know is if others are getting those who and this particular customer is not one that we've actually sold to over the last several years I don't know if they're all getting signaled the same way, that the commitments they thought they had from their supply chain have now been reneged on and they're coming to First Solar. i don't know if they're all getting signaled the same way that the commitments they thought they had from their supply chain have now been reneged on and they're coming to first solar Our pipeline could be just a reallocation of demand that's already in the marketplace because of disruption to their supply chain or people pivoting away from what they had initially envisioned that they were going to do. I don't know. It's hard for me to determine if what I'm seeing, because I've seen a handful of very large commitments. Some of it I think is more incremental. Some of it I do think is, I'll call it, put it in that hyperscaler bucket. AI related, it could be an incremental catalyst to maybe near term visibility of market demand. I think there are many things that are adding up right now that may be influencing a bigger view of the market than it would be otherwise. Our pipeline could be just a reallocation of demand that's already in the marketplace because of disruption to their supply chain or people pivoting away from what they had initially envisioned that they were going to do. our pipeline could be just a reallocation of demand that's already in the marketplace because of disruption to their supply chain or people pivoting away from what they had initially envisioned that they were going to do I don't know. i don't know It's hard for me to determine if what I'm seeing, because I've seen a handful of very large commitments. it's hard for me to determine if what i'm seeing because i've seen a handful of very large commitments Some of it I think is more incremental. some of it i think is more incremental Some of it I do think is, I'll call it, put it in that hyperscaler bucket. some of it i do think is i'll call it put it in that hyperscaler bucket AI related, it could be an incremental catalyst to maybe near term visibility of market demand. ai related it could be an incremental catalyst to maybe near term visibility of market demand I think there are many things that are adding up right now that may be influencing a bigger view of the market than it would be otherwise. i think there are many things that are adding up right now that may be influencing a bigger view of the market than it would be otherwise

Speaker 8: Everyone, our final question today comes from Julien Dumoulin-Smith from Jefferies. Everyone, our final question today comes from Julien Dumoulin-Smith from Jefferies. everyone our final question today comes from julien dumoulin-smith from jefferies

Speaker 1: Excellent. Hey, thanks for the opportunity to clean up here, team. If I can just on the use of cash, right? Obviously, you found yourself in a nice position here coming into the back half of the year. Got this at least chunk of clarity coming out of O triple B pending tariff. How do you think about use of cash here? Again, obviously, you've got a final decision on the finishing line. You've now disclosed that you're moving forward on a perovskite development line in Ohio. How do you think about, you know, the palatability of use of cash, the different decision trees, and the timeline for it? Again, pending tariffs seems to be a big consideration per your prior comments. When and how do you think about it, both in the R&D sense and as well as in shareholder returns? Excellent. excellent Hey, thanks for the opportunity to clean up here, team. hey thanks for the opportunity to clean up here team If I can just on the use of cash, right? if i can just on the use of cash right Obviously, you found yourself in a nice position here coming into the back half of the year. obviously you found yourself in a nice position here coming into the back half of the year Got this at least chunk of clarity coming out of O triple B pending tariff. got this at least chunk of clarity coming out of o triple b pending tariff How do you think about use of cash here? how do you think about use of cash here Again, obviously, you've got a final decision on the finishing line. again obviously you've got a final decision on the finishing line You've now disclosed that you're moving forward on a perovskite development line in Ohio. you've now disclosed that you're moving forward on a perovskite development line in ohio How do you think about, you know, the palatability of use of cash, the different decision trees, and the timeline for it? how do you think about you know the palatability of use of cash the different decision trees and the timeline for it Again, pending tariffs seems to be a big consideration per your prior comments. again pending tariffs seems to be a big consideration per your prior comments When and how do you think about it, both in the R&D sense and as well as in shareholder returns? when and how do you think about it both in the r&d sense and as well as in shareholder returns

Speaker 9: Yes, we've shored up the liquidity position from where we were at the last call pretty meaningfully this year. I think I mentioned on the call we were at a lower cash point than we'd been historically. Not something I was worried about necessarily, but we wanted to make sure we put some more resilience in there, which is what we've done. We continue to expect that to get better over the year as we get back to somewhat of a more normalized working capital position across both AR and inventory. That's helpful if you look at it. Yes, we've shored up the liquidity position from where we were at the last call pretty meaningfully this year. yes we've shored up the liquidity position from where we were at the last call pretty meaningfully this year I think I mentioned on the call we were at a lower cash point than we'd been historically. i think i mentioned on the call we were at a lower cash point than we'd been historically Not something I was worried about necessarily, but we wanted to make sure we put some more resilience in there, which is what we've done. not something i was worried about necessarily but we wanted to make sure we put some more resilience in there which is what we've done We continue to expect that to get better over the year as we get back to somewhat of a more normalized working capital position across both AR and inventory. we continue to expect that to get better over the year as we get back to somewhat of a more normalized working capital position across both ar and inventory That's helpful if you look at it. that's helpful if you look at it Where we end the year. Where we end the year. where we end the year Absent significant new investment, we're through a large amount of the CapEx cycle that we've been through over the last couple of years. There still will be some spend to finish up on the Louisiana side, although that's getting up and running now. Some of the cash payments that holdbacks will happen in 2026. As Mark mentioned, there's an opportunity around the finishing line that'll depend on if we're bringing back end tools from Asia that exist today and repurposing them here. Are we adding any new tools? Whether we lease a building, whether we buy a building, that will change the CapEx profile here as well. The perovskite development line is up and running. If that goes well, there is opportunity to expand around that. Absent significant new investment, we're through a large amount of the CapEx cycle that we've been through over the last couple of years. absent significant new investment we're through a large amount of the capex cycle that we've been through over the last couple of years There still will be some spend to finish up on the Louisiana side, although that's getting up and running now. there still will be some spend to finish up on the louisiana side although that's getting up and running now Some of the cash payments that holdbacks will happen in 2026. some of the cash payments that holdbacks will happen in 2026 As Mark mentioned, there's an opportunity around the finishing line that'll depend on if we're bringing back end tools from Asia that exist today and repurposing them here. as mark mentioned there's an opportunity around the finishing line that'll depend on if we're bringing back end tools from asia that exist today and repurposing them here Are we adding any new tools? are we adding any new tools Whether we lease a building, whether we buy a building, that will change the CapEx profile here as well. whether we lease a building whether we buy a building that will change the capex profile here as well The perovskite development line is up and running. the perovskite development line is up and running If that goes well, there is opportunity to expand around that. if that goes well, there is opportunity to expand around that In general, I would say I'm viewing this year as let's get through the year, let's figure out how we stand around tariffs, and as the dust settles on the executive order, we should have a lot more clarity going into Q3, Q4 of this year of what that longer term position looks like. When you combine that with the clarity we had out of the OBBBA being passed, that's helpful for the longer term view. The fundamental waterfall approach we have to cash hasn't changed, so we still look at core running the business. Can we expand either new manufacturing sites or finishing lines? Are we willing to spend more on R&D? The answer recently has been yes, both internally and potentially looking at M&A around the R&D side. If we can't find accretive uses of cash through there, then we'll potentially look at how we return capital. In general, I would say I'm viewing this year as let's get through the year, let's figure out how we stand around tariffs, and as the dust settles on the executive order, we should have a lot more clarity going into Q3, Q4 of this year of what that longer term position looks like. in general i would say i'm viewing this year as let's get through the year let's figure out how we stand around tariffs and as the dust settles on the executive order we should have a lot more clarity going into q3 q4 of this year of what that longer term position looks like When you combine that with the clarity we had out of the OBBBA being passed, that's helpful for the longer term view. when you combine that with the clarity we had out of the obbba being passed that's helpful for the longer term view The fundamental waterfall approach we have to cash hasn't changed, so we still look at core running the business. the fundamental waterfall approach we have to cash hasn't changed so we still look at core running the business Can we expand either new manufacturing sites or finishing lines? can we expand either new manufacturing sites or finishing lines Are we willing to spend more on R&D? are we willing to spend more on r&d The answer recently has been yes, both internally and potentially looking at M&A around the R&D side. the answer recently has been yes both internally and potentially looking at m&a around the r&d side If we can't find accretive uses of cash through there, then we'll potentially look at how we return capital. if we can't find accretive uses of cash through there then we'll potentially look at how we return capital There's a lot more still, I think, to happen this year. As Mark mentioned, there's still just to settle around a lot of the policy that's really very fresh. Once we have better clarity on that and we sense what we're going through next year, we'll update you on the cash position, most likely to go into the 2026 guide towards the end of the year or early next year. There's a lot more still, I think, to happen this year. there's a lot more still i think to happen this year As Mark mentioned, there's still just to settle around a lot of the policy that's really very fresh. as mark mentioned there's still just to settle around a lot of the policy that's really very fresh Once we have better clarity on that and we sense what we're going through next year, we'll update you on the cash position, most likely to go into the 2026 guide towards the end of the year or early next year. once we have better clarity on that and we sense what we're going through next year we'll update you on the cash position most likely to go into the 2026 guide towards the end of the year or early next year

Speaker 8: Ladies and gentlemen, that does conclude our question and answer session. It also does conclude our conference for today. We would like to thank you all for your participation. You may now disconnect. Ladies and gentlemen, that does conclude our question and answer session. ladies and gentlemen that does conclude our question and answer session It also does conclude our conference for today. it also does conclude our conference for today We would like to thank you all for your participation. we would like to thank you all for your participation You may now disconnect. you may now disconnect