First Solar, Inc. (NASDAQ:) reported robust demand, successful manufacturing operations, and ambitious expansion plans during its third-quarter 2023 earnings call. The solar power company reported 6.8 GW of net bookings since the last earnings call, bringing the year-to-date net bookings to 27.8 GW and the total backlog to a record 81.8 GW. The company also reported $801 million in net sales for Q3 2023 and a gross margin of 47%, up from 38% in the previous quarter.Key takeaways from the call include:
- First Solar produced 2.5 GW of Series 6 modules in Q3 2023, with an average watt per module of 469 and a manufacturing yield of 98%.
- The company's third Ohio factory ramped up production to 565 MW in Q3, while the India plant produced 154 MW.
- First Solar is progressing with its manufacturing expansion, with the India facility starting production and the Louisiana and Alabama facilities under construction.
- The company aims to achieve 25 GW of global nameplate capacity by 2026.
- First Solar is also focused on building a resilient domestic supply chain, expanding agreements with Vitro Architectural Glass and Omco Solar.
- The company's contracted backlog totaled 77.6 GW with an aggregate value of $23 billion.
- First Solar's contracted backlog extends into 2030, and the company is sold out through 2026, with 1.5 GW of production from the India facility to support US deliveries in 2024 and 2025.
CEO Mark Widmar highlighted the company's strong demand and average selling prices (ASPs), as well as its manufacturing operations and expansion plans. He also discussed the company's technology advancements, including the production of bifacial modules and plans for perovskite development.CFO Alex Bradley provided updates on bookings, backlog, and revenue. He mentioned the potential for additional revenue through adjusters and reported a robust pipeline of 65.9 GW opportunities. However, the mid- to late-stage pipeline decreased due to converting certain opportunities to bookings and limited available supply.During the earnings call, the company also discussed its manufacturing advantages over competitors. It mentioned that its fully vertically integrated production, with a roadmap of 14 gigawatts, gives it a cost advantage. The company also highlighted its localized supply chain, with components sourced mainly from the U.S.First Solar executives also addressed the company's finished goods inventory and production run rate in India. The company ended the quarter with over 3 gigawatts of finished goods inventory, with 150 megawatts produced in India. The inventory is in line with anticipated shipments in the fourth quarter.The company also highlighted its ability to provide certainty and de-risk projects for customers, leading to new contracts and partnerships. The cost of capital environment is seen as a competitive advantage for First Solar, attracting new customers to its technology and supply chain. The company announced three large contracts this quarter, including a return customer and two new customers. The company's contracted backlog is now over 80 gigawatts.
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