Financial Analysis

11. Commitments and Contingencies Commercial Commitments During the normal course of business, we enter into commercial commitments in the form of letters of credit and surety bonds to provide financial and performance assurance to third parties. As of June 30, 2026, the issued and outstanding amounts and available capacities under these commitments were as follows (in millions): Issued and Outstanding Available Capacity Credit Facility (1) $ 1.4 $ 148.6 Bilateral facilities (2) 222.0 190.7 Surety bonds 140.8 144.3 (1) Our Credit Facility provides us with a committed sub-limit of $150.0 million to issue letters of credit, at a fee based on the applicable margin for Term SOFR loans, a fronting fee, and other customary letter of credit fees. (2) Of the total letters of credit issued under the bilateral facilities, $1.6 million was secured with cash. Product Warranties When we recognize revenue for sales of modules, we accrue liabilities for the estimated future costs of meeting our limited warranty obligations. We estimate our limited product warranty liability for power output and defects in materials and workmanship under normal use and service conditions based on return rates for each series of module technology and other factors. We make and revise these estimates based primarily on the number of solar modules under warranty installed at customer locations, our historical experience with and projections of warranty claims, and our estimated per-module replacement costs. We …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

9. Debt Our debt arrangements consisted of the following at June 30, 2026 and December 31, 2025 (in thousands): Balance (USD) Loan Agreement Currency June 30, 2026 December 31, 2025 Credit Facility USD $ $ India Credit Facility USD 373,651 India JPM Working Capital Facility INR 19,612 26,140 India Citibank Working Capital Facility INR 12,722 11,123 India Credit Agricole Working Capital Facility INR 5,301 41,157 India HSBC Working Capital Facility INR 46,719 Total debt principal 37,635 498,790 Less: unamortized issuance costs (218) Total debt 37,635 498,572 Less: current portion (37,635) (215,979) Noncurrent portion $ $ 282,593 Credit Facility In June 2023, we entered into a credit agreement with several financial institutions as lenders and JPMorgan Chase Bank, N.A. as administrative agent, which provided us with a senior secured credit facility (the Revolving Credit Facility) with an aggregate borrowing capacity of $1.0 billion. In February 2026, we entered into a new credit agreement with several financial institutions as lenders and JPMorgan Chase Bank, N.A. as administrative agent and terminated the prior Revolving Credit Facility. This new agreement provides us with a senior unsecured five-year revolving credit facility (the Credit Facility) with an aggregate borrowing capacity of $1.5 billion and a sub-limit of $450 million, $150 million of which is currently committed and available for the issuance of letters of credit. Borrowings under the Credit Facility bear interes …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

13. Share-Based Compensation The following table presents share-based compensation expense recognized in our condensed consolidated statements of operations for the three and six months ended June 30, 2026 and 2025 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Cost of sales $ 717 $ 962 $ 1,449 $ 1,306 Selling, general and administrative 5,294 4,815 10,049 6,700 Research and development 1,034 1,032 2,328 1,387 Production start-up 1 1 Total share-based compensation expense $ 7,045 $ 6,810 $ 13,826 $ 9,394 As of June 30, 2026, we had $40.5 million of unrecognized share-based compensation expense related to unvested restricted stock and performance units, which we expect to recognize over a weighted-average period of approximately 1.6 years. In March 2022 and March 2023, the compensation committee of our board of directors approved grants of performance units for key executive officers to be earned over multi-year performance periods, which ended in December 2024 and December 2025, respectively. Vesting of the 2022 and 2023 grants of performance units was contingent upon the specific attainment targets of each grant, which targets included metrics such as contracted revenue, return on capital, cost per watt, production, and operating income metrics. In February 2025, the compensation committee certified the achievement of the vesting conditions applicable to the 2022 grants, which approximated the maximum level of performance. In Februa …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

8. Fair Value Measurements The following is a description of the valuation techniques that we use to measure the fair value of assets and liabilities that we measure and report at fair value on a recurring basis: Cash Equivalents and Restricted Cash Equivalents. At June 30, 2026 and December 31, 2025, our cash equivalents and restricted cash equivalents consisted of money market funds. We value our cash equivalents and restricted cash equivalents using observable inputs that reflect quoted prices for securities with identical characteristics and classify the valuation techniques that use these inputs as Level 1. Marketable Securities and Restricted Marketable Securities. At June 30, 2026 and December 31, 2025, our marketable securities consisted of time deposits and U.S. debt, and our restricted marketable securities consisted of U.S. debt, foreign and U.S. government obligations, and supranational debt. We value our marketable securities and restricted marketable securities using observable inputs that reflect quoted prices for securities with identical characteristics or quoted prices for securities with similar characteristics and other observable inputs (such as interest rates that are observable at commonly quoted intervals). Accordingly, we classify the valuation techniques that use these inputs as either Level 1 or Level 2 depending on the inputs used. We also consider the effect of our counterparties credit standing in these fair value measurements. Derivative Assets …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

14. Income Taxes In July 2025, the U.S. President signed the budget reconciliation legislation (House of Representatives 1, or H.R.1) into law, commonly referred to as the One Big Beautiful Bill. H.R.1 includes significant provisions, such as (i) the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, (ii) modifications to the international tax framework, and (iii) the restoration of favorable tax treatment for certain business provisions. H.R.1 has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The enactment of H.R.1 did not result in a material impact on our condensed consolidated financial statements. In August 2022, the previous U.S. President signed into law the IRA, which revised U.S. tax law by, among other things, including a new corporate alternative minimum tax of 15% on certain large corporations, imposing a 1% excise tax on stock buybacks, and providing various incentives, including the introduction of the advanced manufacturing production credit under Section 45X of the IRC. The provisions of the IRA are generally effective for tax years beginning after 2022. In December 2021, the OECD released model rules for a new global minimum tax framework (Pillar Two). Certain governments in countries in which we operate have enacted local Pillar Two legislation, which includes qualified domestic minimum top-up tax and undertaxed profits rules. Our effective tax rate was 5.5% and 3.1% for …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

7. Leases Our lease arrangements include our corporate and administrative offices, certain warehouses, certain land for our manufacturing facilities, and certain of our manufacturing equipment. Such leases primarily relate to assets located in the United States, Malaysia, India, and Vietnam. The following table presents certain quantitative information related to our lease arrangements for the three and six months ended June 30, 2026 and 2025, and as of June 30, 2026 and December 31, 2025 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Finance lease cost: Amortization of right-of-use assets $ 503 $ 403 $ 1,177 $ 801 Interest on lease liabilities 604 536 1,262 1,068 Operating lease cost 5,629 4,198 10,833 8,313 Variable lease cost 1,062 822 2,218 1,717 Short-term lease cost 330 161 848 435 Total lease cost $ 8,128 $ 6,120 $ 16,338 $ 12,334 Cash paid for amounts included in the measurement of: Operating lease liabilities $ 11,990 $ 7,830 Finance lease liabilities 1,841 933 Lease assets obtained in exchange for: Operating lease liabilities $ 9,834 $ 1,663 Finance lease liabilities 313 34 June 30, 2026 December 31, 2025 Operating Leases Finance Leases Operating Leases Finance Leases Lease assets $ 163,518 $ 32,813 $ 161,756 $ 34,302 Lease liabilities current 11,405 2,965 15,183 2,907 Lease liabilities noncurrent 108,104 33,901 103,753 34,920 Weighted-average remaining lease term 12 years 24 years 12 years 24 years Weighted-average discoun …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

12. Revenue from Contracts with Customers We recognize revenue for module sales at a point in time following the transfer of control of the modules to the customer, which typically occurs upon delivery of the modules to the location specified in the terms of the underlying contract. Our customer contracts generally contain provisions that (i) require us to pay the customer liquidated damages if we fail to deliver modules by scheduled dates or if we fail to deliver modules that meet certain U.S. domestic content requirements and (ii) entitle us to a termination payment if the customer defaults on its contractual obligations and the contract is terminated. For sales of modules imported into the United States, our customer contracts generally include provisions that are intended to mitigate the adverse impact from changes in trade policy, such as tariffs. If a contract is terminated on the basis of these trade policy provisions, such contract would effectively be canceled without liability to either party, resulting in a corresponding reduction in future sales of solar modules related to such contract and the return of any customer deposit under the contract, if applicable. The following table reflects the changes in our contract liabilities, which we classify as Deferred revenue, for the six months ended June 30, 2026 (in thousands): June 30, 2026 December 31, 2025 Six Month Change Deferred revenue $ 1,698,860 $ 1,819,404 $ (120,544) (7) % During the six months ended June 30, 2 …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

17. Segment Reporting First Solar operates as one business, which involves the design, manufacture, and sale of cadmium telluride (CdTe) solar modules, which convert sunlight into electricity. As such, we operate as a single operating segment. Third-party customers of this segment include system developers, independent power producers, utilities, commercial and industrial companies, large corporate energy buyers, and other system owners and operators. Our business is managed by our Chief Executive Officer, who is also considered our chief operating decision maker (CODM). Although our CODM regularly uses gross profit for key operating decisions about allocating resources and assessing performance, we have concluded that consolidated net income is also used and is the measure of profit or loss required to be disclosed under the provisions of ASC 280 for our single operating segment. Accordingly, we considered whether there were any significant expense categories to disclose and concluded that the condensed consolidated financial statements and accompanying notes thereto include the relevant categories regularly provided to our CODM. The measure of segment assets is reported in our condensed consolidated balance sheets as Total assets. …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing