Q2 2024 First Solar Inc Earnings Call

Good afternoon, everyone, and welcome to First Solar's second quarter 2024 earnings call. This call is being webcast live on the Investors section of First Solar's website at investor.firstsolar.com.

Unknown Executive: This call is being webcast live on the Investor section of First Solar's website at investor.firstsolar.com. At this time, all participants are in a listen-only mode.

Unknown Attendee: Call. This call is being webcast live on the investor section of First Solar's website at investor.firstsolar.com. At this time, all participants are in a listen-only mode.

Unknown Executive: As a reminder, today's call is being recorded. I would now like to turn the call over to Richard Romero from First Solar Investor Relations. Richard, you may begin.

Unknown Attendee: As a reminder, today's call is being recorded.

Richard Romero: At this time, all participants are in a listen-only mode. As a reminder, today's call is being recorded. I would now like to turn the call over to Richard Romero from First Solar Investor Relations. Richard, you may begin.

Richard Romero: I would now like to turn the call over to Richard Romero from First Solar Investor Relations.

Richard Romero: Richard, you made it again. Good afternoon, and thank you for joining us. Today, the company issued a press release. Announcing its second quarter, 2024 financial results. A copy of the press release and associated presentation are available on First Solar's website at investor.firstsolar.com.

Richard Romero: Good afternoon, and thank you for joining us. Today, the company issued a press release announcing its second quarter, 2024 financial results. A copy of the press release and associated presentation are available on First Solar's website at investor.firstsolar.com. Also with me today are Mark Widmar, Chief Executive Officer, and Alex Bradley, Chief Financial Officer.

Speaker Change: Good afternoon and thank you for joining us. Today, the company issued a press release announcing its second quarter.

Speaker Change: 2024 financial results. A copy of the press release and associated presentation are available on First Solar's website at investor.firstsolar.com.

Richard Romero: With me today, I'm Mark Widmar, Chief Executive Officer, and Alex Bradley, Chief Financial Officer. Mark will provide business, strategy, technology, and policy updates. Alex will discuss our bookings, pipeline, quarterly financial results, and provide updated guidance.

Speaker Change: With me today are Mark Widmar, Chief Executive Officer, and Alex Bradley, Chief Financial Officer. Mark will provide business, strategy, technology, and policy updates.

Speaker Change: Alex will discuss our bookings, pipeline, quarterly financial results, and provide updated guidance.

Richard Romero: Following that remarks, we will open the call to questions. Please note, this call will include overlooking statements that involve risks and uncertainties that could cause actual results to differ materially from management's current expectations. We encourage you to review the safe harbor statements contained in today's press release and presentations for more complete descriptions.

Speaker Change: Following their remarks, we will open the call to questions.

Speaker Change: Please note this call will include overlooking statements that involve risks and uncertainties that could cause actual results to differ materially from management's current expectations.

Speaker Change: We encourage you to review the Safe Harbor Statements contained in today's press release.

Mark Widmar: It is now my pleasure to introduce Mark Widmar, Chief Executive Officer. Good afternoon, and thank you for joining us today. Reflecting on the first half of 2024, we are pleased with our ongoing efforts to strengthen the fundamentals of business. With solid operating and financial performance, selective incremental bookings, robust pipeline of demand, including a recently signed 620 megawatt module supply agreement subject to the achievement of conditions precedent with a new U.S. customer that will be supplying power. And investment in technology are in the infrastructure and manufacturing expansions. We continue to solidify our market position through strong execution.

Richard Romero: Mark will provide business, strategy, technology, and policy updates. Alex will discuss our bookings, pipeline, quarterly financial results, and provide updated guidance. Following their remarks, we will open the call to questions. Please note this call will include forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from management's current expectations. We encourage you to review the Safe Harbor Statements contained in today's press release and presentations for more complete descriptions. It is now my pleasure to introduce Mark Widmar, Chief Executive Officer. Good afternoon, and thank you for joining us today.

Speaker Change: and presentation for more complete descriptions. It is now my pleasure to introduce Mark Widmar, Chief Executive Officer.

Mark R. Widmar: Reflecting on the first half of 2024, we are pleased with our ongoing efforts to strengthen the fundamentals of our business with solid operating and financial performance, selective incremental bookings, a robust pipeline of demand, including a recently signed 620 megawatt module supply agreement subject to the achievement of conditions precedent with a new US customer that will be supplying power to a hyperscale. Through an investment in technology, R&D infrastructure, and manufacturing expansions, we continue to Our balanced approach to growth.

Mark R. Widmar: Good afternoon and thank you for joining us today.

Mark R. Widmar: Reflecting on the first half of 2024, we are pleased with our ongoing efforts to strengthen the fundamentals of our business, with solid operating and financial performance, selective incremental bookings, and a robust pipeline of demand, including a recently signed

Mark R. Widmar: 620 megawatt module supply agreement subject to the achievement of conditions president with a new US customer that will be supplying power to a hyperscaler.

Mark R. Widmar: An investment in technology, R&D infrastructure, and manufacturing expansions, we continue to solidify our market position through strong execution.

Mark Widmar: Our balance approach to growth, profitability and liquidity combined with multiple technological and business models points of differentiation and able us to deliver value for both our customers and our shareholders.

Mark R. Widmar: Profitability and liquidity, combined with multiple technological and business model points of differentiation, enable us to deliver value for both our customers and our shareholders. Beginning on slide three, I will share some key highlights for the second quarter. From a commercial perspective, we continued our disciplined approach to booking. Since our last earnings call, we have secured a net 0.9 gigawatts of bookings with an ASP of 31.6 cents per watt. Adjusters were applicable, or 33.4 cents per watt assuming the realization of adjusters was applicable and in each case excluding India domestic sale.

Mark R. Widmar: Our balanced approach to growth, profitability, and liquidity, combined with multiple technological and business model points of differentiation, enable us to deliver value for both our customers and our shareholders.

Mark Widmar: Beginning on slide three, I will share some key highlights for the second quarter. From a commercial perspective, we continue our disciplined approach to bookings. Since our last earnings call, we have secured a net 0.9 gigawatts of bookings within ASP of 31.6 cents per watt, excluding the gestures were applicable, or 33.4 cents per watt, assuming the realization of adjusters were applicable. And in each case, excluding India domestic sales. This includes 0.4 gigawatt debugging related to determination for convenience exercised by one of our European power and utilities customers who is selling a portfolio of U.S. development assets as reference on our last earnings call.

Speaker Change: Beginning on slide three, I will share some key highlights for the second quarter.

Speaker Change: From a commercial perspective, we continued our disciplined approach to bookings.

Speaker Change: Since our last earnings call, we have secured a net 0.9 gigawatts of bookings with an ASP of 31.6 cents per watt.

Speaker Change: excluding adjusters where applicable, or 33.4 cents per watt, assuming the realization of adjusters were applicable, and in each case, excluding India domestic sales.

Speaker Change: This includes a 0.4 gigawatt debooking related to the termination for convenience exercise by one of our European power and utilities customers who is selling a portfolio of US development assets as reference on our last earnings call.

Mark Widmar: And who is obligated to pay the associated contract termination payment. This brings our year-to-date net bookings to 3.6 gigawatts. Our total contracted backlog now stands at 75.9 gigawatts with orders stretching through 23rd.

Speaker Change: and who is obligated to pay the associated contract termination payment.

Mark R. Widmar: This includes a 0.4 gigawatt debooking related to the termination for convenience exercise by one of our European power and utilities customers who is selling a portfolio of US development assets, as discussed on our last earnings call, and who is obligated to pay the associated contract termination payment. This brings our year-to-date net bookings to 3.6 gigawatts. Our total contracted backlog now stands at 75.9 gigawatts with orders stretching through 2030. From a technology perspective, since our Q1 earnings call, we have established a new world record cad-tel research cell with a conversion efficiency of 23.1%, commissioned new critical R&D infrastructure in Ohio, and remain on track to launch our CURE program in Q4 of this year. Our CARE program is expected to increase energy production in real world conditions through improved module temperature coefficient, bifurcation, and degradation rate.

Speaker Change: This brings our year-to-date net bookings to 3.6 gigawatts.

Speaker Change: Our total contracted backlog now stands at 75.9 gigawatts with order stretching through 2030.

Mark Widmar: From a technology perspective, since our Q1 earnings call, we have established a new world record cad-tail research cell with a conversion efficiency of 23.1 percent, commissioned new critical R&D infrastructure in Ohio, and remain on track to launch our Cure program in Q4 this year. Our Cure program is expected to increase energy production in real-world conditions to improve module temperature coefficient, bifaciality, and degradation rate. Additionally, we have announced the ownership of certain issued and pending patents related to the manufacturing of top-con Christmas and silicon solar cells.

Speaker Change: From a technology perspective, since our Q1 earnings call, we have established a new world record cad-tel research cell with a conversion efficiency of 23.1%.

Speaker Change: Commission New Critical R&D Infrastructure in Ohio and remain on track to launch our CURE program in Q4 of this year.

Speaker Change: Our CURE program is expected to increase energy production in real world conditions through improved module temperature coefficient, bifaciality, and degradation rate.

Mark R. Widmar: Additionally, we have announced the ownership of certain issued and pending patents related to the manufacturing of Topcon crystalline silicon solar. And while Alex will provide a comprehensive overview of our second quarter 2024 results, I would like to highlight our ability to deliver financially with second quarter earnings per diluted share of $3.25 and a quarter in this cash balance of $1.2 billion. Despite this strong execution and our success... Delivering on the manufacturing technology.

Speaker Change: Additionally, we have announced the ownership of certain issued and pending patents related to the manufacturing of Topcon crystalline silicon solar cells.

Mark Widmar: While Alex will provide a comprehensive overview of our second quarter 2024 results, I would like to highlight our ability to deliver financially, with second quarter earnings for a diluted share of $3.25 and a quarter in net cash balance of 1.2 billion. Despite this strong execution and our success, delivering on the manufacturing technology, customer, and financial commitments, we must acknowledge that our industry faces varying degrees of increasing external uncertainties, particularly related to policy, supply conditions, and evaluations of strategic direction and capital allocation by certain large multinational companies. These will be discussed later during the call. Turning to slide 4, our growth plans remain on track.

Speaker Change: And while Alex will provide a comprehensive overview of our second quarter 2024 results, I would like to highlight our ability to deliver financially with second quarter earnings per diluted share of $3.25.

Alexander R. Bradley: and a quarter in this cash balance of $1.2 billion.

Alexander R. Bradley: Despite this strong execution and our success...

Mark R. Widmar: Customer and Financial Commitments. We must acknowledge that our industry faces varying degrees of increasing external uncertainties, particularly related to policy, supply conditions, and evaluations of strategic direction and capital allocation by certain large multinational companies. These will be discussed later during the call. Turning to slide four, our growth plans remain on track. The expansion of our Ohio manufacturing footprint has been completed, and commercial shipments began, as scheduled at the end of the second quarter.

Alexander R. Bradley: Delivering on the manufacturing technology.

Alexander R. Bradley: Customer and Financial Commitments. We must acknowledge that our industry faces varying degrees of increasing external uncertainties, particularly related to policy, supply conditions, and evaluations of strategic direction and capital allocation by certain large multinational companies.

Speaker Change: These will be discussed later during the call.

Mark Widmar: The expansion of our Ohio manufacturing footprint has been completed, and commercial shipments began as scheduled at the end of the second quarter. The completion of this phase expands our manufacturing capacity to the state by almost one gigawatts to nearly seven gigawatts. In Alabama, we expect to complete the installation of tools, complete plant certification, and commence production this quarter, with the first commercial shipments from the plan expected in Q4 of 2024. We are pleased with the speed at which we were able to construct, equip, and commission the 2.4 million square foot facility, achieving this in approximately 24 months from the investment decision.

Speaker Change: Turning to slide four, our growth plans remain on track. The expansion of our Ohio manufacturing footprint has been completed and commercial shipments began.

Mark R. Widmar: The completion of this phase expands our manufacturing capacity in this state by almost 1 gigawatt to nearly 7 gigawatts. In Alabama, we expect to complete the installation of tools, complete plant certification, and commence production this quarter, with the first commercial shipments from the plant expected in Q4 of 2024. We are pleased with the speed at which we were able to construct, equip, and commission the 2.4 million square foot facility in approximately 24 months from the investment.

Speaker Change: as scheduled at the end of the second quarter.

Speaker Change: The completion of this phase expands our manufacturing capacity in this state by almost 1 gigawatts to nearly 7 gigawatts.

Speaker Change: In Alabama, we expect to complete the installation of tools, complete plant certification, and commence production this quarter.

Speaker Change: with the first commercial shipments from the plant expected in Q4 of 2024.

Speaker Change: We are pleased with the speed at which we were able to construct, equip, and commission the 2.4 million square foot facility, achieving this in approximately 24 months from the investment decision.

Mark Widmar: Our new Louisiana facility is also on track, with the start of commercial operations expected in the second half of 2025. Furthermore, we commissioned the Jim Nolan Center for Solar Innovation earlier this month. This new research and development innovation center in Ohio is the largest facility of its kind in the Western Hemisphere. The 1.3 million square foot facility includes a high-tech pilot manufacturing line, which we expect will allow us to produce full-size prototypes of thin film and tandem PV modules in a manufacturing sandbox, freeing up our commercial production loft. In addition, we are on track to commission our new Perafky development line at our Ohio campus in the second half of 2024.

Mark R. Widmar: Our new Louisiana facility is also on track, with start of commercial operations expected in the second half of 2025. Furthermore, we commissioned the Jim Nolan Center for Solar Innovation earlier this month. This new Research and Development Innovation Center in Ohio is the largest facility of its kind in the Western Hemisphere.

Speaker Change: Our new Louisiana facility is also on track.

Speaker Change: with the start of commercial operations expected in the second half of 2025.

Speaker Change: Furthermore, we commissioned the Jim Nolan Center for Solar Innovation earlier this month. This new Research and Development Innovation Center in Ohio is the largest facility of its kind in the Western Hemisphere.

Mark R. Widmar: The 1.3 million square foot facility includes a high-tech pilot manufacturing line, which we expect will allow us to produce full-size prototypes of thin film and tandem PV modules in a manufacturing sandbox, freeing up our commercial production. In addition, we are on track to commission our new perovskite development line at our Ohio campus in the second half of 2024. Combined, these new facilities represent an investment of nearly half a billion dollars in American R&D infrastructure. We believe that thin film research is critical for commercializing multi-junction tandem devices, which are anticipated to be the next disruptive innovation in the solar industry.

Speaker Change: The 1.3 million square foot facility includes a high-tech pilot manufacturing line, which we expect will allow us to produce full-size prototypes of thin film and tandem PV modules in a manufacturing sandbox.

Speaker Change: Freeing up our commercial production lists.

Speaker Change: In addition, we are on track to commission our new perovskite development line at our Ohio campus in the second half of 2024.

Mark Widmar: Combined, these new facilities represent an investment of nearly half a billion dollars in American R&D infrastructure. We believe that thin film research is critical for commercializing multi-junction tandem devices, which are anticipated to be the next disruptive innovation in the solar district. While the US leads the world in thin film PV under First Solar stewardship, China is racing to close the innovation gap, and we expect that our strategic investment in R&D infrastructure will help us maintain our nation's strategic advantage in thin film technology and position the next generation of disruptive transformative solar technologies to be American made.

Speaker Change: Combined, these new facilities represent an investment of nearly half a billion dollars in American R&D infrastructure.

Speaker Change: We believe that thin film research is critical for commercializing multi-junction tandem devices, which are anticipated to be the next disruptive innovation in the solar industry.

Mark R. Widmar: While the U.S. leads the world in thin-film PV under First Solar stewardship, China is racing to close the innovation gap, and we expect that our strategic investment in R&D infrastructure will help us maintain our nation's strategic advantage in thin-film technology and position the next generation of disruptive, transformative solar technologies to be American-made. Turning to slide five.

Speaker Change: While the U.S. leads the world in thin-film TV under First Solar stewardship, China is racing to close the innovation gap.

Speaker Change: And we expect that our strategic investment in R&D infrastructure will help us maintain our nation's strategic advantage in thin-film technology and position the next generation of disruptive, transformative solar technologies to be American-made.

Mark Widmar: Turning to slide five, we continue to progress our technology roadmap, and during the quarter, established a new world record cad-tail research cell conversion efficiency of 23.1%. This achievement, certified by the United States Department of Energy's National Renewable Energy Laboratory, was accomplished at our California Technology Center. We remain on track to launch CURROR at our lead line in Ohio in Q4 this year, and following the pull-in of CAPEX discussed at our previous earnings call, intent to accelerate replication across the fleet beginning in late 2025 with our Vietnam and third Ohio facility. Additionally, we announced the ownership of issued impending patents related to the manufacturing of TopCon, Chris, and Silicon photovoltaic solar cells earlier this month, which we continue to leverage as we pursue multiple pathways towards our goal of developing the next transformative disruptive tandem solar technology.

Mark R. Widmar: We continue to progress our technology roadmap and, during the quarter, established a new world record cad-tel research cell conversion efficiency of 23.1%. This achievement, certified by the United States Department of Energy's National Renewable Energy Laboratory, was accomplished at our California Technology Center. We remain on track to launch Cure at our lead line in Ohio in Q4 of this year and, following the polling of CapEx discussed at our previous earnings call, intend to accelerate replication across the fleet beginning in late 2025 with our Vietnam and third Ohio facility.

Speaker Change: Turning to slide 5.

Speaker Change: We continue to progress our technology roadmap, and during the quarter established a new world record cad-tel research cell conversion efficiency of 23.1%.

Speaker Change: This achievement, certified by the United States Department of Energy's National Renewable Energy Laboratory, was accomplished at our California Technology Center.

Speaker Change: We remain on track to launch CURE at our lead line in Ohio in Q4 of this year.

Speaker Change: And following the polling of CapEx discussed at our previous earnings call, intend to accelerate replication across the fleet beginning in late 2025 with our Vietnam and third Ohio facility.

Mark R. Widmar: Additionally, we announced the ownership of issued and pending patents related to the manufacturing of Topcon crystalline silicon photovoltaic solar cells earlier this year, which we continue to leverage as we pursue multiple pathways towards our goal of developing the next transformative, disruptive, tandem solar technology. This portfolio, which includes issued patents across various jurisdictions, including the U.S., and pending patents in the EU and Japan, has validity extending to 2030.

Speaker Change: Additionally, we announced the ownership of issued and pending patents related to the manufacturing of Topcon crystalline silicon photovoltaic solar cells earlier this month.

Speaker Change: which we continue to leverage as we pursue multiple pathways towards our goal of developing the next transformative, disruptive, tandem solar technology.

Mark Widmar: This portfolio, which includes issued patents across various jurisdictions, including the U.S. and pending patents in the EU and Japan, has validabilities extending to 2030. We are mindful that there has recently been a number of TopCon patent ownership announcements and several litigation claims related to particular aspects of TopCon cell production. Based on thorough and ongoing analysis, including the engagement of third-party legal and technology experts, we firmly believe in the value and strength of our patents and are investigating several leading Chris and Silicon solar manufacturers for potential infringement.

Speaker Change: This portfolio, which includes issued patents across various jurisdictions, including the U.S., and pending patents in the EU and Japan, has validity extending to 2030.

Alexander R. Bradley: We are mindful that there have recently been a number of Top Gun patent ownership announcements and several litigation claims related to particular aspects of Top Gun cell production. Based on thorough and ongoing analysis, including the engagement of third-party legal and technology experts, we firmly believe in the value and strength of our patents and are investigating several leading crystalline silicon solar manufacturers for potential infringement. If infringement is discovered, we intend to challenge the ability to manufacture, assemble, and sell infringing Top Gun technologies by pursuing enforcement, licensing, and other measures to safeguard our rights. And I'll turn the call over to Alex to discuss our bookings, pipeline, and connections. Thanks, Mark.

Speaker Change: We are mindful that there have recently been a number of Top Gun patent ownership announcements and several litigation claims related to particular aspects of Top Gun cell production.

Speaker Change: Based on thorough and ongoing analysis, including the engagement of third-party legal and technology experts, we firmly believe in the value and strength of our patents.

Speaker Change: and are investigating several leading crystalline silicon solar manufacturers.

Mark Widmar: If infringement is discovered, we intend to challenge the ability to manufacture, assemble, and sell and fringing TopCon technologies by pursuing enforcement, licensing, and other measures to safeguard our rights.

Speaker Change: for potential infringement. If infringement is discovered, we intend to challenge the ability to manufacture, assemble, and sell infringing Top Gun technologies by pursuing enforcement, licensing, and other measures to safeguard our rights.

Alex Bradley: And I'll turn the call over to Alex to discuss our bookings pipeline. Thanks, Mark. Getting on the slide 6. As of December 31, 2023, a contracted backlog of 78.3 gigawatts with an aggregate value of 23.3 billion. Through June 30, 2024, we contracted 2.7 gigawatts of incremental volume, reduced our bookings by 0.4 gigawatts due to the aforementioned contract termination by a European customer, and recognized 6.1 gigawatts of volume sold. This brings our total backlog to 74.6 gigawatts at quarter-end, with an aggregate value of 22.3 billion, implying an ASP of approximately 29.9 cents per watt, excluding adjusters where applicable.

Speaker Change: And I'll turn the call over to Alex to discuss our bookings, pipeline, and connections.

Alexander R. Bradley: On slide six, as of December 31, 2023, we had a contracted backlog of 78.3 gigawatts with an aggregate value of 23.3 billion. Through June 30, 2024, we contracted 2.7 gigawatts of incremental volume, reduced our bookings by 0.4 gigawatts due to the aforementioned contract termination by a European customer, and recognized 6.1 gigawatts of volume salt. This brings our total backlog to 74.6 gigawatts at quarter end, with an aggregate value of $22.3 billion, implying an ASP of approximately 29.9 cents per watt, excluding adjusters where applicable.

Alexander R. Bradley: Thanks, Mark. Leading on to slide six, as of December 31st, 2023, a contracted backlog of 78.3 gigawatts with an aggregate value of 23.3 billion.

Alexander R. Bradley: Through June 30, 2024, we contracted 2.7 gigawatts of incremental volume, reduced our bookings by 0.4 gigawatts due to the aforementioned contract termination by a European customer.

Alexander R. Bradley: and recognize 6.1 gigawatts of volume salt.

Alexander R. Bradley: This brings our total backlog to 74.6 gigawatts at quarter-end with an aggregate value of $22.3 billion, implying an ASP of approximately 29.9 cents per watt, excluding adjusters where applicable.

Alex Bradley: Since the end of the second quarter, we've entered into an additional 1.3 gigawatts of contract, resulting in a total backlog of 75.9 gigawatts.

Alexander R. Bradley: Since the end of the second quarter, we've entered into an additional 1.3 gigawatts of contracts, resulting in a total backlog of 75.9 gigawatts. A central portion of our backlog includes opportunities to increase the base ASP through the application of adjusted ASP if we realize achievements within our current technology roadmap as of the expected timing for delivery of the product. At the end of the second quarter, we had approximately 38.4 gigawatts of contracted volume with these adjusters, which, if fully realized, could result in additional revenue of up to approximately 0.7 billion, or approximately two cents per watt, the majority of which would be recognized between 2025 and 2028.

Alexander R. Bradley: Since the end of the second quarter, we've entered into an additional 1.3 gigawatts of contracts, resulting in a total backlog of 75.9 gigawatts.

Alex Bradley: Stuart. substantial portion of our backlog includes opportunities to increase the base ASP through the application of adjusters if we realize achievements within our current technology roadmap as of the expected timing for delivery of the product. This increase in adjusters relative to the prior quarter is a function of the opportunity discussed on our prior earnings call to accelerate expected replication of cure across the fleet. This amount does not include potential adjustments, which are generally applicable to the total contracted backlog, both the ultimate module bin delivered to the customer, which may adjust the ASP into the sales contract upwards or downwards.

Alexander R. Bradley: Substantial portion of our backlog includes opportunities to increase the base ASP through the application of adjusters if we realize achievements within our current technology roadmap as of the expected timing for delivery of the product.

Alexander R. Bradley: At the end of the second quarter, we had approximately 38.4 gigawatts of contracted volume with these adjusters, which, if fully realized, could result in additional revenue of up to approximately 0.7 billion, or approximately two cents per watt, the majority of which would be recognized between 2025 and 2028.

Alexander R. Bradley: This increase in adjusters relative to the prior quarter is a function of the opportunity discussed on our prior earnings call to accelerate the expected replication of Cure across the board. This amount does not include potential adjustments, which are generally applicable to the total contracted backlog, both the ultimate module being delivered to the customer, which may adjust the ASP under the sales contract upwards or downwards, and for increases in sales rates or applicable aluminum or steel commodity price changes.

Alexander R. Bradley: This increase in adjusters relative to the prior quarter is a function of the opportunity discussed on our prior earnings call to accelerate expected replication of cure across the fleet.

Alexander R. Bradley: This amount does not include potential adjustments, which are generally applicable to the total contracted backlog, both the ultimate module bin delivered to the customer, which may adjust the ASP under the sales contract upwards or downwards.

Alex Bradley: And for increases in sales rate or applicable aluminum or steel commodity price changes. As reflects on slide seven, our total pipeline of potential bookings remains strong. The bookings opportunity is totaling 80.6 gigawatts and increase approximately 7.8 gigawatts since the previous quarter. Our mid to late stage bookings opportunities decreased by approximately 0.8 gigawatts to 28.6 gigawatts, now includes 24.6 gigawatts in North America and 3.7 gigawatts in India. Within our mid to late stage pipeline, our 4.1 gigawatts of opportunities that are contracted subject to conditions precedent, including 1.2 gigawatts in India. And in the US, a 620 megawatt module supply agreement with a new customer will be supplying power to our hyperscaler, which Mark knows earlier.

Alexander R. Bradley: and for increases in sales rate or applicable aluminium or steel commodity price changes.

Alexander R. Bradley: As reflected on slide 7, our total pipeline of potential bookings remains strong, with bookings opportunities totaling 80.6 gigawatts, an increase of approximately 7.8 gigawatts since the previous quarter. Our mid-to-late-stage bookings opportunities decreased by approximately 0.8 GW to 28.6 GW, which now includes 24.6 gigawatts in North America and 3.7 gigawatts in India. Within our mid to late stage pipeline are 4.1 gigawatts of opportunities that are contracted subject to conditions precedent, including 1.2 gigawatts in India, and in the U.S., a 620 megawatt module supply agreement with a new customer will be supplying power to our hyperscaler, which Mark mentioned earlier. As a reminder, signed contracts in India will not be recognized as bookings until we've received full security against the offtake.

Alexander R. Bradley: As reflected on slide 7, our total pipeline of potential bookings remains strong, with bookings opportunities totaling 80.6 gigawatts, an increase of approximately 7.8 gigawatts since the previous quarter.

Alexander R. Bradley: Our mid to late stage bookings opportunities decreased by approximately 0.8 gigawatts to 28.6 gigawatts, now includes 24.6 gigawatts in North America and 3.7 gigawatts in India.

Alexander R. Bradley: Within our mid- to late-stage pipeline are 4.1 gigawatts of opportunities that are contracted subject to conditions precedent, including 1.2 gigawatts in India, and in the U.S. a 620-megawatt module supply agreement with a new customer who will be supplying power to our hyperscaler, which Mark mentioned earlier.

Alex Bradley: As a reminder, sign contracts in India will not be recognized as bookings until we've received full security against the optic. Note that we anticipate reducing our opportunities as a contracted subject to conditions precedent for India by 0.4 gigawatts as a result of an expected termination of a defaulted module supply agreement with an Indian affiliate of a European oil major, which was in the process of selling this process.

Alexander R. Bradley: As a reminder, signed contracts in India will not be recognised as bookings until we've received full security against the offtake.

Alexander R. Bradley: Note that we anticipate reducing our opportunities for a contract subject to conditions precedent for India by 0.4 gigawatts as a result of an expected termination of a defaulted module supply agreement with an Indian affiliate of a European oil major who is in the process of selling, and has stayed on previous earnings calls given our diminished available supply through 2027. The long-dated timeframe into which we are now selling, and the need to align customer project visibility with our balanced approach to ASPs, payment security, and other key contractual terms, and given the uncertainty related to the policy environment due to the upcoming U.S. election.

Alexander R. Bradley: Note that we anticipate reducing our opportunities on a contract subject to conditions precedent for India by 0.4 gigawatts as a result of an expected termination of a defaulted module supply agreement with an Indian affiliate of a European oil major who is in the process of selling this business.

Alex Bradley: Our statement on previous earnings calls given our diminished available supplies through 2027, the long dated timeframe into which we are now selling, and the need to align customer project visibility with our balanced approach to ASP's, payment security, and other key contractual terms. And given the uncertainty related to the policy environment due to the upcoming US election, we will continue to leverage our position of strengths in our contracted backlog and be highly selective in our approach to new bookings this year. We intend to continue forward contracting with customers to prioritize long-term relationships and appropriately value our points of differentiation.

Alexander R. Bradley: As stated on previous earnings calls, given our diminished available supply through 2027, the long-dated timeframe into which we are now selling, and the need to align customer project visibility with our balanced approach to ASPs, payment security, and other key contractual terms, we are now in a situation in which we are not able to meet our long-term financial needs.

Alexander R. Bradley: We will continue to leverage our position of strength in our contracted backlog and be highly selective in our approach to new bookings this year. We intend to continue forward contracting with customers who prioritize long-term relationships and appropriately value our points of differentiation. Slide 8 will cover our financial results for the second quarter. Net sales in the second quarter were $1 billion, an increase of $0.2 billion compared to the first quarter.

Alexander R. Bradley: And given the uncertainty related to the policy environment due to the upcoming US election, we will continue to leverage our position of strength in our contracted backlog and be highly selective in our approach to new bookings this year.

Alexander R. Bradley: We intend to continue forward-contracting with customers who prioritize long-term relationships and appropriately value our points of differentiation.

Alex Bradley: Slide 8, I'll cover our financial results for the second quarter. Net sales in the second quarter were 1 billion, an increase of 0.2 billion compared to the first quarter. Increasing net sales was driven by a 24% increase in the volume of megawatts sold, and the aforementioned contract termination payment obligation of one of our European customers. Gross margin was 49% in the second quarter compared to 44% in the first quarter, and this increase was primarily due to a high mix of module sold from our US factories, which led to 255 million Section 45X tax credits in the second quarter.

Alexander R. Bradley: The increase in net sales was driven by a 24% increase in the volume of megawatts sold and the aforementioned contract termination payment obligation of one of our European customers. Gross margin was 49% in the second quarter compared to 44% in the first quarter. This increase was primarily due to a high mix of modules sold from our U.S. factories, which led to $255 million of Section 45X tax credits in the second quarter. Additionally, the aforementioned contract termination payment obligation, Reduction of warehousing and logistics costs, and continued reductions in production costs. SG&A R&D and production start-up expenses totaled $126 million in the second quarter, an increase of approximately $22 million compared to the first quarter.

Alexander R. Bradley: This increase was primarily driven by higher start-up expenses for our Alabama factory, higher R&D expenses associated with the development of next-generation solar technologies, and higher professional costs. Our second quarter operating income was $373 million, which included depreciation, amortization, and accretion of $97 million, ramp costs of $6 million, and production startup expenses of $27 million. Share-based compensation Expense of $8 million, Second quarter; other income was five. Tax expense for the second quarter was $28 million, compared to $19 million in the first quarter.

Alexander R. Bradley: Slide 8 will cover our financial results for the second quarter.

Alexander R. Bradley: Net sales in the second quarter were $1 billion, an increase of $0.2 billion compared to the first quarter.

Alexander R. Bradley: Increase in net sales was driven by a 24% increase in the volume of megawatts sold and the aforementioned contract termination payment obligation of one of our European customers.

Alexander R. Bradley: Gross Margin was 49% in the second quarter compared to 44% in the first quarter.

Alexander R. Bradley: This increase was primarily due to a high mix of modules sold from our U.S. factories, which led to $255 million of Section 45X tax credits in the second quarter.

Alex Bradley: Carter, the aforementioned contract termination payment obligation, the reduction of warehousing logistics costs, and continued reductions in production costs. SCNA R&D and production start-up expenses totaled $126 million in the second quarter, an increase of approximately $22 million compared to the first quarter. This increases primarily driven by higher start-up expenses for our Alabama factory, higher R&D expenses associated with the development of next-generation solar technologies, and higher professional fees. Our second quarter operating income was $373 million, which included depreciation, amortization, and accretion of $97 million, ramp costs of $6 million, production start-up expenses of $27 million, and share-based compensation expense of $8 million.

Alexander R. Bradley: The aforementioned contract termination payment obligation.

Alexander R. Bradley: Reduction of warehousing and logistics costs and continued reductions in production costs.

Alexander R. Bradley: SG&A R&D and production startup expenses totaled $126 million in the second quarter, an increase of approximately $22 million compared to the first quarter.

Alexander R. Bradley: This increase is primarily driven by higher startup expenses for our Alabama factory, higher R&D expenses associated with the development of next-generation solar technologies, and higher professional fees.

Alexander R. Bradley: Our second quarter operating income was $373 million, which included depreciation, amortization and accretion of $97 million, RAM costs of $6 million, production start-up expense of $27 million, and share-based compensation expense of $8 million.

Alex Bradley: Second quarter other income was $5 million. To add expense to the second quarter was $28 million compared to $19 million in the first quarter. This increase was driven by higher pre-tax income during the period, and a change in opposition related to reinvesting the accumulated earnings of a foreign subsidiary, which allows us to repatriate certain offshore funds to support a strategic investment in the US, and show that our worldwide cash is available in the locations in which it is needed. Formination of the aforementioned items that the second quarter earnings for diluted share of $3.25.

Alexander R. Bradley: Second quarter other income was $5 million.

Alexander R. Bradley: This increase was driven by higher pre-tax income during the period and a change in our position related to reinvesting the accumulated earnings of a foreign subsidiary, which allows us to repatriate certain offshore funds to support our strategic investments in the U.S. and show that our worldwide cash is available in the locations in which it is needed. The combination of the aforementioned items led to second quarter earnings per diluted share of $3.25. Next, turn to slide nine and discuss select balance sheet items and summary cash flows.

Alexander R. Bradley: Tax expense for the second quarter was $28 million, compared to $19 million in the first quarter.

Alexander R. Bradley: This increase was driven by higher pre-tax income during the period and a change in our position related to reinvesting the accumulated earnings of a foreign subsidiary, which allows us to repatriate certain offshore funds to support our strategic investments in the U.S. and show that our worldwide cash is available in the locations in which it is needed.

Alexander R. Bradley: Combination of the aforementioned items led to second quarter earnings for diluted share of $3.25.

Alex Bradley: Next term is Slide 9. Discuss, select balance sheet items and summary cash loan information. Our cash equivalent for restricted cash equivalent to multiple securities ended the quarter at $1.8 billion compared to $2 billion at the end of the prior quarter. This decrease was primarily attributable to capital expenditures, associated with our new US factories in Alabama and Louisiana, along with the repayment of working capital loans in India, partially offset by operating cash flows from our modules business. Total debt at the end of the second quarter was $559 million, a decrease of $61 million from the first quarter, driven by the repayment of certain working capital loans in India, which helps support the ramp of our new plant in the region.

Alexander R. Bradley: Next, turn to slide 9 to discuss select balance sheet items and summary cash flow information.

Alexander R. Bradley: Our cash, cash equivalents, restricted cash, restricted cash equivalents, and marketable securities ended the quarter at $1.8 billion compared to $2 billion at the end of the prior quarter. This decrease is primarily attributable to capital expenditures associated with our new U.S. factories in Alabama and Louisiana, along with the repayment of work-for-capital loans in India, partially offset by operating cash flows from our modules. Total debt at the end of the second quarter was $559 million, a decrease of $61 million from the first quarter, driven by the repayment of certain working capital loans in India, which helped support the ramp-up for a new plant in the region.

Alexander R. Bradley: Our cash, cash equivalents, restricted cash, restricted cash equivalents and multiple securities ended the quarter at $1.8 billion compared to $2 billion at the end of the prior quarter.

Alexander R. Bradley: This decrease is primarily attributable to capital expenditures associated with our new U.S. factories in Alabama and Louisiana, along with the repayment of work-for-capital loans in India, partially offset by operating cash flows from our modules business.

Alexander R. Bradley: Total debt at the end of the second quarter was $559 million, a decrease of $61 million from the first quarter, driven by the repayment of certain working capital loans in India, which helped support the rampant new plant in the region.

Alex Bradley: Our net cash position decreased by approximately 0.2 billion to 1.2 billion as a result of the aforementioned factors. Cash flows for operations were $193 million in the second quarter, and capital expenditures were $365 million during the period. Continuing on slide 10, our full year 2024 guidance remains unchanged. Now, following the aforementioned termination for convenience of 0.4 gigawatts in Q2, one of the limited number of contracts that have such a right, we expect volume sold, revenue, and net cash to be toward the bottom of our guidance range. From a second half earnings cadence perspective, we expect our net sales and cost of sales profile, exclude the benefit of Section 45X tax credits, to be approximately 40% in the third quarter and 60% in the fourth quarter.

Alexander R. Bradley: Our net cash position decreased by approximately $0.2 billion to $1.2 billion as a result of the aforementioned factors. Cash flows from operations were $193 million in the second quarter, and capital expenses were $365 million during the period.

Alexander R. Bradley: Our net cash position decreased by approximately 0.2 billion to 1.2 billion as a result of the aforementioned factors.

Alexander R. Bradley: Cash flows from operations were $193 million in the second quarter, and capital expenditures were $365 million during the period.

Alexander R. Bradley: Continuing on to slide 10, our full year 2024 guidance remains unchanged. Note following the aforementioned termination for convenience of 0.4 gigawatts in Q2, one of the limited number of contracts that have such a right. We expect volume sold, revenue, and net cash to be toward the bottom of our guidance risk. From a second half earnings cadence perspective, we expect our net sales and cost of sales profile, excluding the benefit of Section 45X tax credits, to be approximately 40% in the third quarter and 60% in the fourth quarter.

Alexander R. Bradley: Continuing on slide 10, our full year 2024 guidance remains unchanged.

Alexander R. Bradley: Note, following the aforementioned termination for convenience of 0.4 gigawatts in Q2, one of the limited number of contracts that have such a right, we expect volume sold, revenue, and net cash to be toward the bottom of our guidance range.

Alexander R. Bradley: From a second half earnings cadence perspective, we expect our net sales and cost of sales profile, excluding the benefit of Section 45x tax credits, to be approximately 40% in the third quarter and 60% in the fourth quarter.

Alex Bradley: We forecast Section 45X tax credits of approximately 240 million in the third quarter and 335 million in the fourth quarter. With an operating expense profile roughly evenly spread across the remainder of the year, this results in a forecasted earnings to diluted share profile of approximately 40% in the third quarter and 60% in the fourth quarter.

Alexander R. Bradley: We forecast Section 45x tax credits of approximately $240 million in the third quarter and $335 million in the fourth quarter. With an operating expense profile roughly evenly spread across the remainder of the year, this results in a forecasted earnings per diluted share profile of approximately 40% in the third quarter and 60% in the fourth.

Alexander R. Bradley: We forecast Section 45x tax credits of approximately $240 million in the third quarter and $335 million in the fourth quarter.

Alexander R. Bradley: With an operating expense profile roughly evenly spread across the remainder of the year, this results in a forecasted earnings per diluted share profile of approximately 40% in the third quarter and 60% in the fourth quarter.

Alex Bradley: And note, while the third quarter event, we, like many companies, were impacted by the recent defective software update issued by CrowdStrike to result in IT assures of around the world. So the corporate manufacturing operations were briefly impacted, including the temporary idling of our fleet, which was gradually restored over a period of approximately two days. This incident did not impact our fully in 2024 guidance.

Mark R. Widmar: And note, whilst a third quarter event, we, like many companies, were impacted by the recent defective software update issued by CrowdStrike, which resulted in IT outages around the world. First Solar's corporate and manufacturing operations were briefly impacted, including the temporary idling of our fleet, which was gradually restored over a period of approximately two days. This incident did not impact the full year 2024 guide. I'll now hand the call back to Mark to continue the business update. All right. Thank you, Alex.

Alexander R. Bradley: And note, whilst a third-quarter event, we, like many companies, were impacted by the recent defective software update issued by CrowdStrike that resulted in IT outages around the world.

Speaker Change: First Solar's corporate and manufacturing operations were briefly impacted, including the temporary idling of our fleet, which was gradually restored over a period of approximately two days.

Mark Widmar: I'll now hand the call back to Mark to continue the business update. All right, thank you, Alex. As reflected by remarks at the beginning of the call, we are pleased with our financial and operational execution for the second quarter. We have continued to deliver on our commitments and have largely advanced our planned initiatives throughout the year thus far, such as progressing our U.S. manufacturing capacity expansion on schedule, commissioning our research and development infrastructure billed out on plan and maintaining a disciplined approach to new bookings opportunities.

Speaker Change: This incident did not impact our Fully Air 2024 guidance.

Mark R. Widmar: As reflected in our remarks at the beginning of the call, we are pleased with our financial and operational execution for the second quarter. We have continued to deliver on our commitments and have largely advanced our planned initiatives throughout the year thus far, such as progressing our U.S. manufacturing capacity expansion on schedule, commissioning our research and development infrastructure, build out on plan, and maintaining a disciplined approach to new bookings opportunities. That said, we're also mindful of several externalities that may impact the industry as a whole, including First Solar.

Mark R. Widmar: I'll now hand the call back to Mark to continue the business update. All right. Thank you, Alex. As reflected by remarks at the beginning of the call, we are pleased with our financial and operational execution for the second quarter.

Mark R. Widmar: We have continued to deliver on our commitments and have largely advanced our planned initiatives throughout the year thus far, such as progressing our U.S. manufacturing capacity expansion on schedule, commissioning our research and development infrastructure build-out on plan, and maintaining a disciplined approach to new bookings opportunities.

Mark Widmar: That said, we are also mindful of several externalities which may impact the industry as a whole, including for solar among their personalities. We are most frequently encountering are the uncertainties related to politics and policies, irrational global supply conditions, and the evaluation of strategic directions and capital occasions by certain large multinational companies. Firstly, with a November election fast approaching, the solar industry is again facing an uncertain policy environment. The impact of this uncertainty became more apparent as a second quarter progressed. We have observed increasing constraints on access to capital, both for early stage solar technology companies seeking to finance the next stage of their growth, as well as for the established companies looking to build domestic manufacturing capacity.

Mark R. Widmar: That said, we are also mindful of several externalities which may impact the industry as a whole, including First Solar. Among the externalities we are most frequently encountering are the uncertainties related to politics and policies.

Mark R. Widmar: Among the externalities we are most frequently encountering are the uncertainties related to politics and policies. Irrational Global Supply Conditions, and the Evaluation of Strategic Corrections and Capital Allocation by Certain Large Multinational Companies. Firstly, with the November election fast approaching, the solar industry is again facing an uncertain policy environment. The impact of this uncertainty became more apparent as the second quarter progressed.

Speaker Change: Irrational Global Supply Conditions, and the Evaluation of Strategic Corrections and Capital Allocation by Certain Large Multinational Companies.

Speaker Change: Firstly, with the November election fast approaching, the solar industry is again facing an uncertain policy environment.

Mark R. Widmar: We have observed increasing constraints on access to capital, both for early stage solar technology companies seeking to finance the next stage of their growth, as well as for established companies looking to build domestic manufacturing capacity. Financiers are waiting to make investment decisions until they have a clear view of the policy picture. This uncertainty has also impacted developers evaluating risk and returns within Project Proforma and comes at a time when, as mentioned earlier, some oil and gas and power and utility developers are contemplating the pivot from renewables to prioritizing fossil projects.

Speaker Change: The impact of this uncertainty became more apparent as the second quarter progressed.

Speaker Change: We have observed increasing constraints on access to capital, both for early-stage solar technology companies seeking to finance the next stage of their growth.

Mark Widmar: A financing party is waiting to make investment decisions until they have a clear view of the policy picture. This uncertainty has also impacted developers evaluating risk and returns within project performance, and which comes at a time when, as mentioned earlier, some oil and gas and power and utility developers are contemplating the pivot from renewables to prioritizing fossil projects. The potential for Republican control, the presidency, and both houses of Congress has given rise to concern over the prospect of a legislative reconciliation process or use of the Congressional Review Act adversely impacting the Inflation Reduction Act legislation or its related regulations.

Speaker Change: As well as for the established companies looking to build domestic manufacturing capacity, our financing parties wait to make investment decisions until they have a clearer view of the policy picture.

Speaker Change: This uncertainty has also impacted developers evaluating risk and returns within Project

Speaker Change: and which comes at a time when, as mentioned earlier, some oil and gas and power and utility developers are contemplating the pivot from renewables to prioritizing fossil projects.

Mark R. Widmar: The potential for Republican control of the presidency in both houses of Congress has given rise to concern over the prospect of a legislative reconciliation process or use of the Congressional Review Act adversely impacting the Inflation Reduction Act legislation or its related regulations.

Speaker Change: The potential for Republican control of the presidency in both houses of Congress has given rise to concern over the prospect of a legislative reconciliation process or use of the Congressional Review Act adversely impacting the Inflation Reduction Act legislation or its related regulations.

Mark Widmar: A change in the executive administration alone, regardless of the results of the Senate and the House elections, has raised similar concerns of the potential use of executive orders to block or delay implementation of IRA-related guidance and the administration of both published and finalized regulations. While we cannot predict the outcome of the November election or what a Republican suite would mean for the renewable energy industry and trade policies, we can help inform policymakers across the political spectrum of the significant economic and strategic benefits of promoting and securing a robust domestic solar energy manufacturing base and how policies such as 45X of the IRA significantly contribute to the economic life of our nation's communities.

Mark R. Widmar: A change in the Executive Administration alone, regardless of the results of the Senate and House elections, has raised similar concerns about the potential use of Executive Orders to block or delay implementation of IRA-related guidance and the administration of both published and unfinalized regulations. However, we cannot predict the outcome of the November election or what a Republican majority would mean for the renewable energy industry and trade policy. We can help inform policymakers across the political spectrum of the significant economic and strategic benefits of promoting and securing a robust domestic solar energy manufacturing base and how policies such as 45X of the IRA significantly contribute to the economic life of our nation's communities, particularly those located in traditionally red states. Our investments are already delivering tangible value by creating jobs and raising wages for American workers.

Speaker Change: A change in the Executive Administration alone, regardless of the results of the Senate and House elections, has raised similar concerns of the potential use of Executive Orders to block or delay implementation of IRA-related guidance and the administration of both published and unfinalized regulations.

Speaker Change: Well, we cannot predict the outcome of the November election or what a Republican suite would mean for renewable energy industry and trade policies.

Speaker Change: We can help inform policy makers across the political spectrum of the significant economic and strategic benefits of promoting and securing a robust domestic solar energy manufacturing base.

Speaker Change: and how policies such as 45X of the IRA significantly contribute to the economic life of our nation's communities, particularly those located in traditionally red states.

Mark Widmar: Particularly those located in traditionally red states. According to an economic analysis commissioned by First Solar and conducted by the University of Louisiana Lafayette, our investments are already delivering tangible value by creating jobs and raising wages for American workers. Our existing facilities combined with our expansions in Ohio and new facilities in Alabama and Louisiana are expected to see a support over 30,000 direct, indirect, and induced American jobs by 2026 and 2.8 billion annually in labor income. Our growth trajectory and longstanding commitment to investing in local supply chains is estimated to support 7.3 jobs nationally for every first solar job created and is expected to add over 10 billion annually to the country's economic output by 2026.

Mark R. Widmar: According to an economic analysis commissioned by First Solar and conducted by the University of Louisiana at Lafayette, our investments are already delivering tangible value by creating jobs and raising wages for American workers.

Mark R. Widmar: Our existing facilities, combined with our expansions in Ohio and new facilities in Alabama and Louisiana, are expected to see us support over 30,000 direct, indirect, and induced American jobs by 2026 and $2.8 billion in labor income. Our growth trajectory and longstanding commitment to investing in local supply chains is estimated to support 7.3 jobs nationally for every First Solar job created, and is expected to add over $10 billion annually to the country's economic output by 2026.

Speaker Change: Our existing facilities, combined with our expansions in Ohio and new facilities in Alabama and Louisiana, are expected to see us support over 30,000 direct, indirect, and induced American jobs by 2026 and $2.8 billion annually in labor income.

Mark R. Widmar: Our growth trajectory and long-standing commitment to investing in local supply chains is estimated to support 7.3 jobs nationally for every First Solar job created, and is expected to add over $10 billion annually to the country's economic output by 2026.

Mark Widmar: We are demonstrating that investing in American solar manufacturing, innovation, and supply chains delivers enduring job creation and economic value, solidifying solar's manufacturers' role in America's all-of-the-above approach to energy security. We believe our model of high value domestic manufacturing is the towering example of what of the art of the possible is when the nation follows through on bipartisan goals of countering China's ambition to dominate critical supply chains. Our manufacturing and domestic sourcing is also an example of capturing and retaining maximum value in the US, leveraging it to spur cycles of innovation to advance American technological leadership and attract and retain an enduring workforce.

Mark R. Widmar: We are demonstrating that investing in American solar manufacturing, innovation, and supply chains delivers enduring job creation and economic value. Solidifying solar's manufacturer's role in America's all-of-the-above approach to energy security. We believe our model of high-value domestic manufacturing is a towering example of what the art of the possible is when the nation follows through on bipartisan goals of countering China's ambition to dominate critical supply chains. Our manufacturing and domestic sourcing is also an example of capturing and retaining maximum value in the U.S., leveraging it to spur cycles of innovation to advance American technological leadership and attract and retain an enduring workforce. It is, however, a relatively unique example.

Mark R. Widmar: We are demonstrating that investing in American solar manufacturing, innovation, and supply chains delivers enduring job creation and economic value.

Mark R. Widmar: Solidifying solar's manufacturer's role in America's all-of-above approach to energy security.

Mark R. Widmar: We believe our model of high-value domestic manufacturing is the towering example of what of the art of the possible is when the nation follows through on bipartisan goals of countering China's ambition to dominate critical supply chains.

Mark R. Widmar: Our manufacturing and domestic sourcing is also an example of capturing and retaining maximum value in the U.S., leveraging it to spur cycles of innovation, to advance American technological leadership, and attract and retain an enduring workforce.

Mark Widmar: It is, however, a relatively unique example, and while intended to enable the growth of domestic renewable manufacturer and value chains, we believe Section 45X of the Inflation Reduction Act of 2022 can and must be strengthened by establishing guardrails and prevent companies controlled by, owned by, or subject to the jurisdiction of adversarial governments such as China from receiving US taxpayer dollars. We believe that any legislation that establishes these guardrails will help reinforce the IRA's intent of encouraging true value in job creation and retention across the solar value chain. A message we believe resonates with policymakers across the political spectrum.

Mark R. Widmar: And while intended to enable the growth of domestic renewable manufacturer and value chains, we believe section 45 x of the Inflation Reduction Act of 2022 can and must be strengthened by establishing guardrails and preventing companies controlled by, owned, or subject to the jurisdiction of adversarial governments such as China from receiving U.S. taxpayer dollars. We believe that any legislation that establishes these guardrails will help reinforce the IRA's intent of encouraging true value in job creation and retention across the Solar Valley.

Mark R. Widmar: It is, however, a relatively unique example, and while intended to enable the growth of domestic renewable manufacture and value chains, we believe Section 45X of the Inflation Reduction Act of 2022 can and must be strengthened by establishing guardrails

Mark R. Widmar: and prevent companies controlled by, owned, or subject to the jurisdiction of adversarial governments, such as China, from receiving U.S. taxpayer dollars.

Mark R. Widmar: We believe that any legislation that establishes these guardrails will help reinforce the IRA's intent of encouraging true value in job creation and retention across the solar value chain.

Mark R. Widmar: A message we believe resonates with policymakers across the political spectrum. Despite the political uncertainties ahead, a look back on the quarter reflects several positive developments in trade and, Over the past quarter, we have seen the United States government continue to address Systemic Overcapacity in China by leveraging the tools in the Trade Policy Toolbox. Recently, the Biden-Harris administration acted to close a loophole in trade law by removing the Section 201 bifacial module exemption, which the Trump administration had also attempted to remove, and announced plans to double the Section 301 tariffs on solar cells and modules imported from China, another trade measure initiated by the Trump administration.

Mark R. Widmar: A message we believe resonates with policy makers across the political spectrum.

Mark Widmar: Despite the political uncertainties ahead, a look back on the quarter reflects several positive developments in the trade environment. Over the past quarter, we have seen the United States government continue to address systemic overcapacity in China by leveraging the tools in the trade policy toolbox. Recently, the Biden-Harris administration acted to close a loophole in trade law by removing the Section 201 by facial module exemption, which the Trump administration had also attempted to remove, and it outspans to double the Section 301 tariffs on solar cells and modules imported from China, another trade measure initiated by the Trump administration.

Mark R. Widmar: Despite the political uncertainties ahead, a look back on the quarter reflects several positive developments in the trade environment.

Mark R. Widmar: Over the past quarter, we have seen the United States

Mark R. Widmar: Systematic Overcapacity in China by Leveraging the Tools in the Trade Policy Toolbox.

Mark R. Widmar: Recently, the Biden-Harris administration acted to close a loophole in trade law by removing the Section 201 bifacial module exemption.

Mark R. Widmar: which the Trump administration had also attempted to remove and announced plans to double the Section 301 tariffs on solar cells and modules imported from China, another trade measure initiated by the Trump administration.

Mark Widmar: In addition, the two-year anti-circumvention solar-bridge moratorium expired in the second quarter, and the administration pledged to crack down on stockpiling through quote vigorous enforcement, announcing that importers which brought product and tear-free during the moratorium will be required to certify as to module installation by the December 2024 deadline, with detailed information about the imported modules being deployed or pay the required tariff. In June, the U.S. International Trade Commission, by unanimous and notably bipartisan decision, issued a preliminary determination finding a reasonable indication of material injury caused by the dumping of solar cells and modules by Cambodia, Malaysia, Thailand, and Vietnam.

Mark R. Widmar: In addition, the two-year anti-circumvention SolarBridge moratorium expired in the second quarter, and the administration pledged to crack down on stockpileing through, quote, vigorous enforcement, announcing that importers which brought product in tariff-free during the moratorium will be required to certify as to module installation by the December 2024 deadline with detailed information about the imported modules being deployed or pay the required tariff. In June, the U.S. International Trade Commission, by unanimous and notably bipartisan decision, issued a preliminary determination finding a reasonable indication of material injury caused by the dumping of solar cells and modules by Cambodia, Malaysia, Thailand, and Vietnam. Material injury caused by subsidies by Malaysia, Thailand, and Vietnam, and a threat finding caused by subsidies in Cambodia.

Mark R. Widmar: In addition, the two-year anti-circumvention Solar Bridge moratorium expired in the second quarter, and the administration pledged to crack down on stockpiling through, quote, vigorous enforcement.

Mark R. Widmar: Announcing that importers which brought product in tariff-free during the moratorium will be required to certify as to module installation by the December 2024 deadline, with detailed information about the imported modules being deployed or pay the required tariff.

Mark R. Widmar: In June , the U.S. International Trade Commission, by unanimous and notably bipartisan decision,

Mark R. Widmar: Issued a preliminary determination finding a reasonable indication of material injury caused by the dumping of solar cells and modules by Cambodia, Malaysia, Thailand, and Vietnam. Material injury caused by subsidies by Malaysia,

Mark Widmar: Material injury caused by subsidies by Malaysia. Thailand and Vietnam, and a threat finding caused by subsidies in Cambodia. The unanimous bipartisan vote supports the petition of the American Alliance for Solar Manufacturing Trade Committee, of which First Solar is a member, and underscores the harm caused by the unfair trade practices of China's solar companies and their affiliates in Southeast Asia. The alliance is currently evaluating filing critical circumstances petitions, in response to the surge of injuries. Solar imports from the subject countries and the wake of the Department of Commerce's initiation of the trade investigation. For example, recent data suggests import increases of more than 60 percent from Malaysia, Vietnam, and approximately 19 percent from Thailand.

Mark R. Widmar: Thailand and Vietnam, and a threat finding caused by subsidies in Cambodia.

Mark R. Widmar: The unanimous bipartisan vote supports the petitions of the American Alliance for Solar Manufacturing Trade Committee, of which First Solar is a member, and underscores the harm caused by the unfair trade practices of China's solar companies and their affiliates in Southeast Asia. The Alliance is currently evaluating filing critical circumstances petitions in response to solar imports from the subject countries in the wake of the Department of Commerce's initiation of the trade investigation. For example, RISA data suggests import increases of more than 60% from Malaysia and Vietnam and approximately 19% from Thailand.

Speaker Change: The unanimous bipartisan vote supports the petitions of the American Alliance for Solar Manufacturing Trade Committee, which First Solar is a member, and underscores the harm caused by the unfair trade practices of China's solar companies and their affiliates in Southeast Asia.

Speaker Change: The Alliance is currently evaluating filing critical circumstances petitions in response to the surge of injurious

Speaker Change: Solar imports from the subject countries in the wake of the Department of Commerce's initiation of the trade investigation.

Speaker Change: For example, RISA data suggests import increases of more than 60% from Malaysia and Vietnam, and approximately 19% from Thailand.

Mark R. Widmar: The suspicions are filed with the United States Department of Commerce, which determines that critical circumstances exist. Cash deposits requirements can be imposed retroactively on solar cells and panels entering the country up to 90 days prior to the date of the Commerce's preliminary determination.

Mark Widmar: Suspectations are filed with the United States Department of Commerce determines that critical circumstances exist. Cash deposits requirements can be imposed retroactively on solar cells and panels entering the country up to 90 days prior to the date of the commerce's preliminary determinations. Critical circumstances can be alleged at any point until just before Commerce's final determination. Based on the Republican campaign platform, which has expressly contemplated employing tariffs to increase trade imbalances, we believe it is reasonably foreseeable that the administration were to change, could result in incremental tariffs on the Chinese, crystalline, silicon supply chain operating from mainland and through its Southeast Asian and other satellite countries.

Speaker Change: If such petitions are filed with the United States Department of Commerce, determines that critical circumstances exist, cash deposits requirements can be imposed retroactively on solar cells and panels entering the country up to 90 days prior to the dates of the Commerce's preliminary determinations.

Mark R. Widmar: Critical circumstances can be alleged at any point until just before commerce's final determination. Based on the Republican campaign platform, which has expressly contemplated employing tariffs to increase trade imbalances. We believe it is reasonably foreseeable that the administration were to change could result in incremental tariffs on the Chinese crystalline silicon supply chain operating from the mainland and through its Southeast Asian and other satellite countries. While broadly beneficial to us given our significant and expanding U.S. manufacturing base, any new universal tariffs on imports could adversely impact the gross margin related to our Malaysia, Vietnam, and India production sold into the United States.

Speaker Change: Critical circumstances can be alleged at any point until just before commerce's final determination.

Speaker Change: Based on the Republican campaign platform, which has expressly contemplated employing tariffs to increase trade imbalances,

Speaker Change: We believe it is reasonably foreseeable that the administration were to change could result in incremental tariffs on the Chinese crystalline silicon supply chain operating from the mainland and through its Southeast Asian and other satellite countries.

Mark Widmar: While broadly beneficial to us, given our significant and expanding U.S. manufacturing base, any new universal tariffs on imports could adversely impact the gross margin related to our Malaysia, Vietnam, and India production sold into the United States.

Speaker Change: While broadly beneficial to us given our significant and expanding U.S. manufacturing base, any new universal tariffs on imports could adversely impact the gross margin related to our Malaysia, Vietnam, and India production sold into the United States.

Mark Widmar: Finally, it is also important to note that, regardless of the outcome of the November election, utility scale demand for renewables is expected to continue to grow. The sources of this projected substantial demand are varied, including from data center, the reshort of manufacturing, cryptocurrency mining, the heating and cooling to name a few. Critically, such demand is generally not dependent on policy-enabled drivers. Solar continues to demonstrate that in many U.S. locations is the lowest cost source of energy, and there are a few other generation sources that can be expanded at scale or notably deployed as quickly as solar, a critical attribute for end users who place a priority on time to power.

Mark R. Widmar: Finally, it is also important to note that regardless of the outcome of the November election, utility scale demand for renewables is expected to continue to grow. The sources of this projected substantial demand are varied, including from data centers, the reshort of manufacturing, cryptocurrency mining, heating and cooling, to name a few. Critically, such demand is generally not dependent on policy-enabled drivers. Solar continues to demonstrate that, in many U.S. locations, it is the lowest-cost source of energy, and there are few other generation sources that can be expanded at scale or notably deployed as quickly as solar, a critical attribute for end-users who place a priority on time-to-power.

Speaker Change: Finally, it is also important to note that regardless of the outcome of the November election, utility-scale demand for renewables is expected to continue to grow.

Speaker Change: The sources of this projected substantial demand are varied, including from data center, the reshort of manufacturing, cryptocurrency mining,

Speaker Change: The heating and cooling, to name a few.

Speaker Change: Critically, such demand is generally not dependent on policy-enabled drivers.

Speaker Change: Solar continues to demonstrate that in many U.S. locations, it is the lowest cost source of energy, and there are few other generation sources that can be expanded at scale or notably deployed as quickly as solar, a critical attribute for end-users who place a priority on time-to-power.

Mark Widmar: In addition, given the presence of long-term, fixed-priced PPAs, relatively predictable degradation, few moving parts, and an unlimited free fuel source in the form of sunlight, solar, and by nature, is a deflationary energy generation asset, further contributing to the nation's economic growth.

Mark R. Widmar: In addition, given the presence of long-term fixed price PPA, relatively predictable degradation, few moving parts, and an unlimited free fuel source in the form of sunlight, solar, and by nature is a deflationary energy generation asset, further contributing to the nation's economic growth.

Speaker Change: In addition, given the presence of long-term fixed price PPAs,

Speaker Change: Relatively predictable degradation, few moving parts, and an unlimited free fuel source in the form of sunlight, solar, and by nature, is deflationary energy generation asset, further contributing to the nation's economic growth.

Mark Widmar: Moving on from political consideration, the second externality, a long-common theme in the solar industry, is a rational oversupply, driven almost exclusively by China's well-documented ambitions to dominate solar supply. The unsustainable market conditions resulting from this behavior continue to be an adverse macro condition confronting module manufacturers like First Solar that are committed to competing on a level playing field and on the basis of their merits and undertaking growth that is underpinned by demand. Ours of light conditions in the EU continued on debated as policymakers struggled to provide a coherent policy response to ensure sustainable manufacturing conditions with the European block.

Mark R. Widmar: Moving on from political considerations, the second externality, a long-standing common theme in the solar industry, is irrational oversupply, driven almost exclusively by China's well-documented ambitions to dominate solar supply chains. The unsustainable market conditions resulting from this behavior continue to be an adverse macro condition confronting module manufacturers like First Solar that are committed to competing on a level playing field and on the basis of their merits and undertaking growth that is underpinned by demand.

Speaker Change: Moving on from political consideration.

Speaker Change: The second externality, a long common theme in the solar industry, is a rational oversupply driven almost exclusively by China's well-documented ambitions to dominate solar supply chains.

Speaker Change: The unsustainable market conditions resulting from this behavior continue to be an adverse macro condition confronting module manufacturers like First Solar that are committed to

Speaker Change: Competing on a level playing field and on the basis of their merits and undertaking growth that is underpinned by demand.

Mark R. Widmar: These market distorting practices have resulted in a 2024 year-end projected US oversupply position of approximately 40 gigawatts. Oversupplied conditions in the EU continued unabated as policymakers struggle to provide a coherent policy response to ensure sustainable manufacturing conditions within the European bloc.

Speaker Change: These market distorting practices have resulted in a 2024 year-end projected U.S. oversupply position of approximately 40 gigawatts.

Speaker Change: Oversupplied conditions in the EU.

Speaker Change: Continued unabated as policymakers struggle to provide a coherent policy response to ensure sustainable manufacturing conditions within the European bloc.

Mark Widmar: In India, a challenged ASP environment is a large part of consequence of Chinese cell dumping. That is artificially lower pricing and challenges the country's aspiration to end its reliance on an adversarial by developing a domestic manufacturing base that serves a domestic market. Despite several of our Christian Silicon competitors publicly reporting significant financial losses for the first half of the year, as they work to shed excess inventory and rationalized capacity. The Chinese solar industry continues its race to the bottom through overbuilding capacity. Ignoring clear indications that the market cannot sustain such levels of production, this results in continued dumping of products into key markets at depressed prices.

Mark R. Widmar: In India, a challenged ASP environment is a large part a consequence of Chinese cell dumps, that is, artificially lowered pricing, which challenges the country's aspiration to end its reliance on an adversary by developing a domestic manufacturing base that serves a domestic market. Despite several of our Kristin Silicon competitors publicly reporting significant financial losses for the first half of the year, as they work to shed excess inventory and rationalize capacity, the Chinese solar industry continues its race to the bottom through overbuilding capacity. Ignoring clear indications that the market cannot sustain such levels of production, this results in continued dumping of products into key markets at depressed prices.

Speaker Change: In India, a challenged ASP environment is a large part a consequence of Chinese cell dumping.

Speaker Change: That is artificially lower pricing and challenges the country's aspiration to end its reliance on an adversarial by developing a domestic manufacturing base that serves a domestic market.

Speaker Change: Despite several of our Kristin Silicon competitors publicly reporting significant financial losses for the first half of the year, as they work to shed excess inventory and rationalize capacity,

Speaker Change: The Chinese solar industry continues its race to the bottom through overbuilding capacity.

Speaker Change: Ignoring clear indications that the market cannot sustain such levels of production, this results in continued dumping of products into key markets at depressed prices.

Mark Widmar: Despite the recently published proposal by China's Ministry of Industry and Information Technology seeking to raise the minimum capital ratio for new PV capacity and impose intellectual property ownership criteria related to capacity expansion, their skepticism that such measures will be effective in curtailing production, expansions, and reshoring supply and demand balance. Particularly, as a consequence, we see China capacity expansion, particularly as we see continuously see China capacity expansion plans announced. In a market challenged by irrational oversupply and, in sharp contrast, the results recently announced by some of our Chinese competitors, we have continued to deliver strong performance as reflected by our year-to-date earnings, recent bookings, and total backlog.

Mark R. Widmar: Despite the recently published proposal by China's Ministry of Industry and Information Technology seeking to raise the minimum capital ratio for new PV capacity and impose intellectual property ownership criteria related to capacity expansion, there is skepticism that such measures will be effective in curtailing production expansions and reshoring the supply and demand balance. Particularly, as a consequence, we see China capacity expansions, oh, excuse me, particularly as we see, continuously see, Chinese capacity expansion plans announced in a market challenged by irrational oversupply.

Speaker Change: Despite the recently published proposal by China's Ministry of Industry and Information Technology seeking to raise the minimum capital ratio for new PV capacity and impose intellectual property ownership criteria related to capacity expansion,

Speaker Change: There is skepticism that such measures will be effective in curtailing production expansions and reshoring supply and demand balance.

Speaker Change: Particularly, as a consequence, we see China capacity expansions, oh, excuse me, particularly as we see, continuously see, China capacity expansion plans announced.

Mark R. Widmar: In sharp contrast to the results recently announced by some of our Chinese competitors, we have continued to deliver strong performance as reflected by our year-to-date earnings, recent bookings, and total backlog. And while the crystalline silicon industry faces potential obstacles to innovation due to weakening fundamentals and pending legal challenges to its freedom to operate, including as it relates to First Solar's recently announced TopCon technology path. During the quarter, we established a new record cad-tel research cell, remained on track related to our cure launch and Fleet Replication Schedule, and commissioned our new R&D facility. The third externality we have observed relates to certain multinational companies' strategic direction and capital allocation.

Speaker Change: in a market challenged by irrational oversupply.

Speaker Change: And in sharp contrast to the results recently announced by some of our Chinese competitors.

Speaker Change: We have continued to deliver strong performance as reflected by our year-to-date earnings, recent bookings, and total backlog.

Mark Widmar: And while the Christian Silicon industry faces potential obstacles to innovation due to weakening fundamentals and pending legal challenges to its freedom to operate, including as it relates to first-sellers recently announced many of top-contek technology patents.

Speaker Change: And while the crystalline silicon industry faces potential obstacles to innovation due to weakening fundamentals and pending legal challenges to its freedom to operate, including as it relates to First Solar's recently announced TopCon technology patents.

Mark Widmar: During the quarter, we established a new record cad-tail research cell, remained on track related to our pure launch and fleet replication schedule, and commissioned our new R&D facility.

Speaker Change: During the quarter, we established a new record CAD-TEL research cell, remained on track related to our CURE launch and fleet replication schedule, and commissioned our new R&D facility.

Mark Widmar: The third externality we have observed relates to certain multinational companies, strategic direction, and cap allocation. As referenced on our prior earnings call and during this call, we are observing some multinational oil and gas empowering utility companies, particularly those based in Europe, considering pivots from renewable project development back to fossil projects in an effort to increase return. For example, we've been made aware that a U.S. affiliate of a European-based multinational and gas customers is evaluating their strategic direction with regards to renewable project development. Now, withstanding, we believe the other light fundamentals of solar remain robust. As mentioned in our last theories call, we are seeing the potential for significant increase in demand as a decade advances, driven in part by data center low growth.

Speaker Change: The third externality we have observed relates to certain multinational companies' strategic direction and capital allocation.

Mark R. Widmar: As referenced on our prior earnings call and during this call, we are observing some multinational oil and gas and power and utility companies, particularly those based in Europe, considering pivots from renewable project development back to fossil projects in an effort to increase returns. For example, we've been made aware that a U.S. affiliate of a European-based multinational oil and gas customer is evaluating their strategic direction with regard to renewable project development. Notwithstanding, we believe the underlying fundamentals of solar energy remain robust.

Speaker Change: As referenced on our prior earnings call and during this call, we are observing some multinational oil and gas and power and utility companies, particularly those based in Europe , considering pivots from renewable project development back to fossil projects in an effort to increase returns.

Speaker Change: For example, we've been made aware that a U.S. affiliate of a European-based multinational oil and gas customer is evaluating their strategic direction with regards to renewable project development.

Mark R. Widmar: As mentioned in our last earnings call, we are seeing the potential for a significant increase in demand as the decade advances, driven in part by data center slow growth. Ten of our largest customers have ongoing and future projects that are serving the nation's largest hyperscale. Deploying our technology for the balance of the deck. According to an analysis by the Boston Consulting Group, data center-driven energy demand is expected to increase by 15-20% annually through 2030.

Speaker Change: Notwithstanding, we believe the underlying fundamentals of solar remain robust.

Speaker Change: As mentioned in our last earnings call, we are seeing the potential for significant increase in demand as the decade advances, driven in part by data center low growth. Ten of our largest customers have ongoing and future projects that are serving the nation's largest hyperscalers.

Mark Widmar: Ten of our largest customers have ongoing and future projects that are serving the nation's largest harvest scalers. Deploying our technology for the balance of the decade. According to an analysis by the Boston Consulting Group, data center driven energy demand is expected to increase by 15 to 20% annually through 2030. Solar U.S. Power consumption is expected to increase by 3% per year through the end of this decade, with data centers alone expected to contribute more than 60% of the total growth. We believe that this potential, hyper-scarer related demand, coupled with their publicly stated commitments to address their energy needs through clean generation, along with our strong track record of parting with developers to provide solutions for these off-takers, places First Solar in a strong position to have an important role in powering the industry of the future.

Speaker Change: Deploying our technology for the balance of the decade.

Speaker Change: According to an analysis by the Boston Consulting Group, data center driven energy demand is expected to increase by 15 to 20 percent annually through 2030.

Mark R. Widmar: Total US power consumption is expected to increase by 3% per year through the end of this decade, with data centers alone expected to contribute more than 60% of the total growth. We believe that this potential hyperscale related demand, coupled with their publicly stated commitments to address their energy needs through clean generation, along with our strong track record of partnering with developers to provide solutions for these offtakers, places First Solar in a strong position to have an important role in powering an industry of the future, as demonstrated by a recently signed 620 megawatt model supply agreement, subject to additional conditions, Underlying fundamentals related to fossil fuel retirements, movement towards electrification, utility and corporate demand for clean energy, scrutiny of environmental impact and social consciousness of supply chain providers and load growth, especially related to AI-driven data center demand, aligned with First Solar's position as a leading provider of eco-efficient modules and its approach to responsible solar.

Speaker Change: Total U.S. power consumption is expected to increase by 3% per year through the end of this decade, with data centers alone expected to contribute more than 60% of the total growth.

Speaker Change: We believe that this potential hyperscale-related demand, coupled with their publicly stated commitments to address their energy needs through clean generation,

Speaker Change: Along with our strong track record of partnering with developers to provide solutions for these offtakers, places First Solar in a strong position to have an important role in powering an industry of the future. As demonstrated by a recently signed

Mark Widmar: As demonstrated by a recently signed 620 megawatt model supply agreement, subject to additional conditions, president with a new U.S. customer that will be supply and power to a hyper-scaler. Underline fundamentals related to fossil fuel retirements, movement towards electrification, utility and corporate demand for clean energy, scrutiny of environmental impact, and social consciousness of supply chain. Providers and load growth, especially related to AI driven data center demand, aligned with First Solar's position as a leading provider of equal-efficient modules and its approach to responsible solar.

Speaker Change: 620 megawatt module supply agreement subject to additional conditions present with a new U.S. customer that will be supplying power to a hyperscaler.

Speaker Change: Underlying fundamentals related to fossil fuel retirements, the movement towards electrification, utility and corporate demand for clean energy, scrutiny of environmental impact and social consciousness of supply chain providers, and load growth, especially related to AI-driven data center demand.

Speaker Change: Aligned with First Solar's position as a leading provider of eco-efficient modules and its approach to responsible solar.

Mark Widmar: We're also seeing increased demand driven by the modified domestic content bonus safe harbor guidance issued by the Department of Treasury in IRS in May of 2024. The updated guidance sets out a more practical point-space calculation rather than a cost-based calculation for a renewable energy project to qualify for the bonus. Lacing a high value on vertically integrated manufacturing that utilizes domestically procured components, a profile exemplified by First Solar's growing domestic manufacturing operations. Given the high domestic content embedded in our U.S. Purdue Series 6 and Series 7 modules, which critically feature a domestically manufactured cell, and incorporate domestic components for either all or almost all of the points eligible components specified in the elective safe harbor in the May 2024 updated guidance, our customers' projects can satisfy key aspects of the domestic content bonus criteria just by procuring First Solar modules.

Mark R. Widmar: We're also seeing increased demand driven by the modified domestic content bonus safe harbor guidance issued by the Department of Treasury and IRS in May of 2024. The updated guidance sets out a more practical points-based calculation rather than a cost-based calculation for a renewable energy project to qualify for the bonus, placing a high value on vertically integrated manufacturing that utilizes domestic procured components, a profile exemplified by First Solar's growing domestic manufacturing operation, given the high domestic content embedded in our U.S. Purdue Series 6 and Series 7 modules, which critically feature a domestically manufactured Our customers' projects can satisfy key aspects of the domestic content bonus criteria just by procuring First Solar Modules.

Speaker Change: We're also seeing increased demand driven by a modified domestic content bonus safe harbor guidance issued by the Department of Treasury and IRS in May of 2024.

Speaker Change: The updated guidance sets out a more practical points-based calculation rather than a cost-based calculation for a renewable energy project to qualify for the bonus.

Speaker Change: Placing a high value on vertically integrated manufacturing that utilizes domestic procured components, a profile exemplified by First Solar's growing domestic manufacturing operations.

Speaker Change: Given the high domestic content embedded in our U.S. Purdue Series 6 and Series 7 modules,

Speaker Change: which critically feature a domestically manufactured cell and incorporate domestic components for either all or almost all of the points eligible components specified in the elective safe harbor in the May 2024 updated guidance.

Speaker Change: Our customers' projects can satisfy key aspects of the Domestic Content Bonus Criteria just by procuring First Solar Modules.

Mark Widmar: On the new elective safe harbor, there are opportunities for First Solar to blend its deliveries to customers with modules produced across its global fleet, potentially increasing the optimization of all of our facts. Industries, while enabling our customers to qualify more projects for the domestic content bonus.

Mark R. Widmar: On the new elected safe harbor, there are opportunities for First Solar to blend its deliveries to customers with modules produced across its global fleet, potentially increasing the optimization of all of our factors, while enabling our customers to qualify more projects for the domestic content bonus. In summary, while external factors such as the outcome and impact of the forthcoming election and the continued impact of the global Chinese-driven overcapacity on supply present challenges, First Solar continues to focus and deliver on its planned initiatives through continued execution, active policy engagement, utilizing our balanced approach to growth, profitability, and liquidity, and leveraging our points of differentiation.

Speaker Change: On the new elective Safe Harbor, there are opportunities for First Solar to blend its deliveries to customers with modules produced across its global fleet, potentially increasing the optimization of all of our factories.

Speaker Change: While enabling our customers to qualify more projects for the domestic content bonus.

Mark Widmar: In summary, while external factors such as the outcome and impact of the forthcoming election and the continued impact of the global Chinese traditional capacity on supply present challenges, First Solar continues to focus and deliver on our planned initiatives. Through continued execution, active policy engagement, utilizing our balance approach to growth, profitability, and liquidity, and leveraging our point of differentiation, we believe we remain well positioned to navigate these challenges.

Speaker Change: In summary, while external factors such as the outcome and impact of the forthcoming election and the continued impact of the global Chinese driven overcapacity on supply present challenges, First Solar continues to focus and deliver on our planned initiatives.

Speaker Change: Through continued execution, active policy engagement, utilizing our balanced approach to growth, profitability, and liquidity, and leveraging our points of differentiation, we believe we remain well positioned to navigate these challenges.

Mark R. Widmar: We believe we remain well-positioned to navigate these challenges. To conclude, Alex will now summarize the key messages from today's call on slide 11. Demand continues to be robust, 3.6 GW of net bookings year to date, including 0.9 GW of net bookings since our last earnings call, leading to a resilient contracted backlog of 75.9 GW. Continued focus on manufacturing technology excellence resulted in a record quarterly production of 3.7 gigawatt

Alex Bradley: This includes Alice will now summarize the key messages from today's call on Site 11. Demand continues to be robust; 3.6 gigawatts of net bookings here today, including 0.9 gigawatts of net bookings since our last earnings call, leading to a resilient contracted backlog of 75.9 gigawatts. A continued focus on manufacturing technology excellence resulted in a record-courtly production of 3.7 gigawatts. Alabama and Louisiana factory expansions remain on schedule. The expansion of our Ohio manufacturing footprint has been completed, and commercial shipments began as scheduled at the end of the second quarter.

Alexander R. Bradley: To conclude, Alex will now summarize the key messages from today's call on slide 11.

Alexander R. Bradley: Demand continues to be robust, 3.6 GW of net bookings year-to-date, including 0.9 GW of net bookings since our last earnings call, leading to a resilient contracted backlog of 75.9 GW.

Speaker Change: Continued focus on manufacturing technology excellence resulted in a record quarterly production of 3.7 gigawatts. Alabama and Louisiana factory expansions remain on schedule.

Mark R. Widmar: The Alabama and Louisiana factory expansions remain on schedule. The expansion of our Ohio manufacturing footprint has been completed, and commercial shipments began as scheduled at the end of the second quarter. From a technology perspective, we've established a new world record CAT cell research cell, commissioned our new R&D facility in Ohio, and expect our Cure Lee line launch in Q4 of this year. Additionally, we announce the ownership of certain issued and pending patents related to the manufacturing of top-concrystalline silicon cells. Financially, we earned $3.25 per diluted share, and we ended the quarter with a gross cash balance of $1.8 billion, or $1.2 billion net of debt.

Speaker Change: The expansion of our Ohio manufacturing footprint has been completed and commercial shipments began as scheduled at the end of the second quarter.

Alex Bradley: From a technology perspective, we've established a new world record cat cell research cell, commissioned our new R&D facility in Ohio, expects our curely line launch in Q4 of this year, announced the ownership of certain issues and pending patents related to the manufacturing of top-conference until it themselves.

Speaker Change: From a technology perspective, we've established a new world record Cattell research cell, commissioned our new R&D facility in Ohio, expect our Cure lead line launch in Q4 of this year, announced the ownership of certain issued and pending patents related to the manufacturing of Topcon crystalline silicon cells.

Alex Bradley: Financially, we earned $3.25 per diluted share, and we ended the course of the gross cash balance of 1.8 billion or 1.2 billion net debt, maintaining our full year 2024 guidance, including forecasted full year earnings per diluted share of $13 to $14. And with that, we conclude our further remarks and open the course first.

Speaker Change: Financially, we earned $3.25 per diluted share, and we ended the quarter with a gross cash balance of $1.8 billion, or $1.2 billion net of debt.

Unknown Executive: They're maintaining our full year 2024 guidance, including forecasted full year earnings diluted share of $13 to $14. And with that, we conclude our prepared remarks and open the floor to questions. Operator.

Speaker Change: We're maintaining our full-year 2024 guidance, including forecasted full-year earnings per

Philip Shen: I'll write them. And your first question comes in the line of Philipsion with Roth Capital Partners; your line is open. Hey guys, thanks for taking my questions. The slides say you guys booked 1.3 gigs in July, and then the press release says 900 megawatts were booked since last call. The 31.6 cents per watt disclosed was on the 900 megawatts, but that seems to include the cancellation of the EU customer.

Unknown Executive: And your first question comes from Philip Shen with Roth Capital Partners. Your line is open. Hey guys, thanks for taking my questions. The slides say you guys booked 1.3 gigs in July. And then the press release says 900 megawatts were booked since the last call. The 31.6 cents per watt disclosed was for 900 megawatts, but that seemed to include the cancellation of the EU customer.

Speaker Change: And with that we conclude our prepared remarks and open the course for questions.

Speaker Change: And your first question comes from the line of Philip Shen with Roth Capital Partners. Your line is open.

Philip Shen: What was the ASP on the full 1.3 gigawatts? The second question is around the bookings outlook ahead. Can you provide some additional detail on that 4.1 gigawatts of opportunities confirmed but not yet booked on slide 7? When could these translate to bookings? We're in this policy environment that's uncertain. When do you think bookings accelerate and start to reflect this higher tariff, higher price environment? Thanks, guys. It is still on the ASP.

Philip Shen: Hey guys, thanks for taking my questions.

Philip Shen: The slides say you guys booked 1.3 gigs in July , and then the press release says 900 megawatts were booked since the last call.

Speaker Change: The $0.31 per watt disclosed was on the 900 megawatts, but that seemed to include the cancellation of the EU customer. What was the ASP on the full 1.3 gigs?

Philip Shen: What was the ASP on the full 1.3 gigs for gigawatts, gross bookings in July, assuming that's the correct number? So that's the first question.

Speaker Change: 4 gigawatts gross bookings in July , assuming that's the correct number. So that's the first question. Second question is around the bookings outlook ahead. Can you provide some additional detail on that 4.1 gigawatts of opportunities confirmed?

Philip Shen: Second question is around the bookings outlook ahead. Can you provide some additional detail on that 4.1 gigawatts of opportunities confirmed, but not yet booked on slide 7? When could these translate to bookings? You know, we're in this policy environment that's uncertain. When do you think bookings accelerate and start to reflect this kind of higher, higher price environment? Thanks, guys.

Speaker Change: but not yet booked on slide 7.

Speaker Change: When could these translate to bookings? We're in this policy environment that's uncertain. When do you think bookings accelerate and start to reflect this kind of higher tariff, higher price environment? Thanks, guys.

Mark R. Widmar: Yes, so we did have a cancellation during the quarter that we referenced, which is the 0.4. So that is the delta. The ASPs that we reported net of the cancellation are in line with where the gross ASPs would be as well. The actual cancellation was slightly lower, but don't take it as a material delta.

Alex Bradley: Yes, Phil on the ASP. Yes, so we did have a cancellation. They're in the quarter, which we referenced, which is the point 4. So that is the Delta. The ASPs that we reported net of the cancellation is in line with where the gross ASPs would be as well. The actual cancellation was slightly lower, but don't take it as a material delta. The numbers are in line with the net numbers that have been reported from that standpoint.

Speaker Change: Phil, on the ASPs, yes, so we did have a cancellation.

Speaker Change: During the quarter, which we referenced, which is the 0.4, so that is the delta. The ASPs that we reported net of the

Speaker Change: Cancellation is in line with where the gross ASPs would be as well. The actual cancellation was slightly lower but don't take it as a material delta. The numbers are in line with the net numbers that have been reported from that standpoint. Bookings, from a standpoint of momentum, look there's what we've our strategy has been let's be patient and let's let's make sure the market has an opportunity to continue to digest all the information that's coming about right and

Mark R. Widmar: The numbers are in line with the net numbers that have been reported from that standpoint. Bookings, from a standpoint of momentum, look, there's what we've, our strategy has been, let's be patient. And let's make sure the market has an opportunity to continue to digest all the information that's coming about, right. And, and we believe there's still even more to come. And we kind of alluded to a few.

Alex Bradley: Bookings from a standpoint of momentum. Look, what we've, our strategy has been, let's be patient, and let's make sure the market has an opportunity to continue to digest all the information that's coming about. And we believe there's still even more to come, and we kind of alluded to a few. One is the potential announcement of critical circumstances. We think that there is a momentum potentially for addressing the foreign entity of concern and the potential use of taxpayer dollars to go to adversarial countries. We think there are other initiatives that could be focused on examining the India imports coming into the U.S.

Mark R. Widmar: One is the potential announcement of critical circumstances. You know, we think that there is, potentially, momentum for addressing the foreign entity of concern and the potential use of taxpayer dollars to go to adversarial countries. We think there are other initiatives that could be focused on examining the imports of Indian products coming into the U.S. and the potential use of Chinese cells in the manufacture of those products and their introduction into the U.S. market.

Speaker Change: And we believe there's still even more to come, and we kind of alluded to a few. One is the potential announcement of critical circumstances.

Speaker Change: You know, we think that there's there is a momentum potentially.

Speaker Change: for addressing the foreign entity of concern and the potential use of taxpayer dollars to go to adversarial countries.

Speaker Change: We think there are other initiatives that could be focused on examining the India imports coming into the U.S.

Alex Bradley: and the potential use of Chinese cells in the manufacture of those products and bought into the U.S. market. And we also believe that they're still, as previously indicated in the domestic content guidance that was uncommunicated in May, that the current administration is evaluating the potential use or integration, I should say, of a wafer to qualify for domestic content. So we're just going to try to be as patient as possible, and then you're throwing the mix or recently announced top-down IP. We're going to be patient as possible to let all that information to be digested with the market.

Mark R. Widmar: And we also believe that there's still, as previously indicated in the domestic content guidance that was communicated in May, that the current administration is evaluating the potential use or integration, I should say, of a wafer to qualify for domestic content. So we're just going to try to be as patient as possible. And then you throw in the mix our recently announced, you know, TopCon IP.

Speaker Change: and the potential use of Chinese cells in the manufacture of those products brought into the U.S. market.

Speaker Change: And we also believe that there's still, as previously indicated in the domestic content guidance, that was communicated in May.

Speaker Change: that the current administration is evaluating the potential use or integration, I should say, of a wafer to qualify for domestic content. So we're just going to try to be as patient as possible. Then you throw in the mix our recently announced, you know, TopCon IP.

Mark R. Widmar: We're going to be patient as possible to let all that information be digested by the market to the extent that we can see ASPs that are attracted to us and the windows that we're trying to book out into. And I still want to continue to remind people that these are windows; their bookings are going out into 27 and 28. You know, when we look at the bookings last quarter and you include the tech adders, which pushes north of 33 cents, I think we're moving in the right direction and we feel comfortable with where pricing will be.

Speaker Change: We're going to be as patient as possible to let all that information to be digested with the market.

Alex Bradley: To the extent we can see ASPs that are attracted to us and the windows that we're trying to book out into, and I still want to continue to remind people that these are windows, their bookings are going out into 27 and 28. When we look at the bookings last quarter and you include the tech adders which push us north of 33 cents, I think we're moving in the right direction and where we feel comfortable where pricing will be. So I think there's momentum there. I think I want the market still to digest all the uncertainty.

Speaker Change: To the extent we can see ASPs that are attracted to us and the windows that we're trying to book out into, and I still want to continue to remind people that these are windows that bookings are going out into 27 and 28.

Speaker Change: When we look at the bookings last quarter, and you include the tech adders, which push us north of 33 cents, I think we're moving in the right direction, and where we feel comfortable where pricing will be.

Mark R. Widmar: So, you know, I think there's momentum there. I think I want the market to still digest all the uncertainty. And once that gets better understood in the marketplace, I think you'll see more momentum in our bookings as we close out the year. Having said that, there's still an election in front of us that I still think a lot of people are going to be very, Reluctant is potentially a good word to use for booking into 27 and 28 with less certainty on the policy environment. So that momentum may impact this as well.

Speaker Change: So, you know, I think there's momentum there. I think I want the market still to digest all the uncertainty. And once that gets better understood into the marketplace, I think you'll see more momentum or bookings as we close out the year. Having said that, there's still an election in front of us that I still think a lot of people are going to be very

Alex Bradley: And once that gets better understood into the marketplace, I think you'll see more momentum in our bookings as we close out the air.

Alex Bradley: Having said that, there's still an election in front of us that I still think a lot of people are going to be very... You know, locked into potentially a good use, a good word to use for booking into 27 and 28 with less certain child policy environment. So that momentum may impact this as well, but I do think there's, you know, opportunity here to see a little more momentum as a lot of this information is digested, and we'll see how we progress through the balance of the year.

Speaker Change: Reluctant potentially is a good word to use for booking into 27 and 28 with less certainty on policy environment. So that momentum may impact this as well. But I do think there's an opportunity here to see a little bit more momentum as a lot of this information is digested, and we'll see how we progress through the balance of the year.

Unknown Executive: But I do think there's an opportunity here to see a little bit more momentum as a lot of this information is digested, and we'll see how we progress through the balance of the year. And your next question comes from the line of John Wyndham with UBS. Your line is open. Hi, perfect.

John Windham: And your next question comes from the line of John Windham, with UBS; your line is open. Hi, perfect. Thanks for taking the questions. I guess, as you've moved forward on Alabama, the focus will turn to Louisiana, and just, I guess, a couple of questions on the same topic. Any key milestones that you would point us to over the next six or nine months to keep track of that project. And then at what point do you think we'll get a little bit more specific visibility on Windham ramps beyond just saying the second half of 2025. Thanks again, a great result.

Speaker Change: And your next question comes from the line of John Wyndham with UBS. Your line is open.

John Wyndham: Thanks for taking the questions. I guess as you've moved forward on Alabama, the focus will turn to Louisiana, and just, I guess, a couple of questions on the same topic. Any key milestones that you would point us to over the next six or nine months to keep track of that project? And then at what point do you think we'll get a little bit more specific visibility on when that ramps beyond just saying the second half of 2025? Thanks again; a great result.

John Wyndham: Hi, perfect. Thanks for taking the questions. I guess as you've moved forward,

Speaker Change: On Alabama, the focus will turn to...

John Wyndham: Louisiana, and just I guess a couple questions on the same topic. Any key milestones that you would point us to over the next six or nine months to keep track of that project?

John Wyndham: And then at what point do you think we'll get a little bit more specific visibility on when that ramps beyond just saying the second half of 2025? Thanks again and great result.

John Windham: Yeah, so look, I think, you know, first milestone which you expect to start seeing as we exit this year into next year will just be completion of the construction of the building. And you can see that a lot of the exterior construction for the building has been completed, but there's still quite a bit of work that needs to be done on the interior. And then it'll be tool move in. So, you know, our current plan will be Q1, beginning of Q2, we'll be the tool move in for Louisiana for that factory. Then there's the energization process.

Mark R. Widmar: Yeah, so look, I think, you know, the First Milestone, which you expect to start seeing as we exit this year into next year, will just be the completion of the construction of the building. And you can see that a lot of the exterior construction for the building has been completed, but there's still quite a bit of work that needs to be done on the interior. And then it'll be a tool move-in. So, you know, our current plan will be Q1, beginning of Q2, will be the tool move-in for Louisiana for that factory. Then there's the energization process.

Speaker Change: Yeah, so, look, I think, you know...

Speaker Change: First Milestone, which you'd expect to start.

Speaker Change: Seeing as we exit this year into next year will just be completion of the construction of the building and you can see that a lot of the exterior Construction for the building has been completed, but there's still quite a bit of work that needs to be done on the interior

Speaker Change: And then it'll be tool move-in. So, you know, our current plan will be Q1, beginning of Q2, will be the tool move-in for Louisiana, for that factory.

Mark R. Widmar: And then, you know, large is going to line up to an integrated run, very similar to, you know, we just started our integrated run this year for Alabama. If you roll the clock forward to July of next year, you know, we should be looking towards an integrated run at that point in time. It'd be early Q3. So, you know, we're moving, we're making real good progress, happy with what we're seeing right now.

John Windham: And then, you know, with large, it's going to line up to an integrator run very similar to, you know, we just started our integrator run initiative for Alabama. You roll the plot forward to July of next year. You know, we should be looking towards an integrator run at that point time and be early Q3. So, you know, we're making real good progress. Happy with what we're seeing right now. Hopefully, we have confidence in, you know, what we've been able to do.

Speaker Change: Then there's the energization process and then, you know, largely it's going to line up to...

Speaker Change: An integrated run, very similar to, you know, we just started our integrated run this year for Alabama. You roll the clock forward.

Speaker Change: To July of next year, you know, we should be looking towards an integrated run at that point in time. It would be early Q3.

Speaker Change: So, you know, we're moving, we're making real good progress, happy with what we're seeing right now. Hopefully, we have confidence in what we've been able to do. This is our last factory in a journey to get over north of 25 gigawatts capacity.

Mark R. Widmar: Look, hopefully, we have confidence in, you know, what we've been able to do. You know, this is our last factory on a journey to get over north of 25 gigawatts of capacity. You know, we started not too long ago at 6 gigawatts, and so we've been able to, in a relatively short period of time, meaningfully increase our manufacturing capacity. And, you know, the team's done an excellent job of delivering. And your next question comes from the line of Andrew Percoco of Morgan Stanley. Your line is open. Good afternoon.

John Windham: You know, this is our last factory in a journey to get over north of 25 gigawatts capacity. You know, we started with not too long ago at six gigawatts. And so, you know, we've been able to, in a relatively short period of time, to meaningfully increase our manufacturing capacity.

Speaker Change: You know, we started not too long ago at 6 gigawatts, and so, you know, we've been able to, in a relatively short period of time, to meaningfully increase our manufacturing capacity, and, you know, the team's done an excellent job in delivering.

John Windham: And you know, the team's done an excellent job in delivering.

Andrew Percoco: And your next question comes from the line of Andrew Perkoko with Morgan Family. Your line is open. Good afternoon. Thanks for taking the question. I do just want to kind of come back to the election point that you made earlier, Mark. You know, I'm just trying to clarify. Do you think this is going to slow momentum because developers are on pause, or do you think this could actually accelerate momentum, just giving your domestic footprint, just on the view that a potential Republican president would likely have a much more protectionist policy view. I'm just trying to get a better sense of whether this is a pre or post-election bookings and pricing acceleration.

Speaker Change: And your next question comes from the line of Andrew Percoco with Morgan Stanley . Your line is open.

Andrew Salvatore Percoco: Thanks for taking the question. I do just want to kind of come back to the election point that you made earlier, Mark. You know, I'm just trying to clarify: do you think this is going to slow momentum because developers are on pause? Or do you think this could actually accelerate momentum, just given your domestic footprint, just on the view that a potential Republican president would likely have a much more protectionist policy view? I'm just trying to get a better sense of whether this is a pre or post election bookings and pricing acceleration. Yeah, look, I think the answer is both.

Andrew Salvatore Percoco: Good afternoon. Thanks for taking the question. I do just want to kind of come back to the election point that you made earlier, Mark.

Andrew Salvatore Percoco: I'm just trying to clarify, do you think this is going to slow momentum because developers are on pause, or do you think this could actually accelerate momentum, just given your domestic footprint, just on the view that a potential Republican president?

Speaker Change: would likely have a much more protectionist policy view. I'm just trying to get a better sense of whether this is a pre or post-election bookings and pricing acceleration.

Andrew Percoco: Yeah, look, I think the answer is both, unfortunately. I think initially there'll be, there will be some pause with trying to understand exactly the policy environment and what potential implications there will be if there is a new administration and Republican control. But I think, as you see through that dust, it's going to be very clear that, you know, in my discussions in DC, clearly, you know, geopolitical tensions with China are getting any easier when you go to the Republican side of the conversation. There are going to be tariffs that are going to be imposed, which are going to better advantage for solar and our domestic footprint, for sure.

Mark R. Widmar: Unfortunately, I think initially there'll be some as there'll be some pause with trying to understand exactly the policy environment and what potential implications there will be if there is a new administration and Republican control. But I think as you see through that dust, it's going to be very clear that, in my discussions in D.C., clearly, geopolitical tensions with China aren't getting any easier when you go to the Republican side of the conversation.

Speaker Change: Yeah, look, I think it's the answer is both. Unfortunately, I think I think initially there'll be there as there'll be some pause with trying to understand exactly the

Speaker Change: The Policy Environment and What Potential Implications There Will Be If There Is A New Administration and Republican Control.

Speaker Change: But I think as you see through that dust, it's going to be very clear that you know

Speaker Change: In my discussions in D.C., clearly geopolitical tensions with China aren't getting any easier when you go to the Republican side of the conversation.

Mark R. Widmar: There are going to be tariffs that are going to be imposed, which are going to better advantage First Solar in our domestic footprint for sure. And there's a real reluctance to using U.S. taxpayer dollars to advantage Chinese owned and controlled companies. So all that, I think, plays to our strength, but at the same time, I think everyone's going to want to understand the kind of the environment. So there could be an initial pause. And then, I think once that happens, you could see further acceleration.

Speaker Change: There are going to be tariffs that are going to be imposed, which are going to be a better advantage for solar in our domestic footprint for sure.

Andrew Percoco: And there's a real reluctance of using US taxpayer dollars to advantage Chinese-owned and controlled companies. So all that I think plays to our strength. But at the same time, I think everyone's going to want to understand kind of the environment, so there could be an initial pause. And then I think once that happens, you could see further acceleration. And in some cases, you may even see a pull forward of projects from 26 into 25. If there's a view that, you know, that there's a legislative process, potentially, that could change certain provisions within IRA. There may be an acceleration of everybody trying to monetize as much as they can in 25 before budget reconciliation process could potentially impact the legislation and call that maybe like you three of 25 kind of view of the world.

Speaker Change: And there's a real reluctancy of using U.S. taxpayer dollars to advantage Chinese-owned and controlled companies. So, all that, I think, plays to our strength, but at the same time, I think everyone's going to want to understand.

Speaker Change: kind of the environment. So there could be an initial pause. And then I think once that happens, you could see further acceleration. And in some cases, you may even see a pull forward of projects from 26 into 25. If there's a view that

Mark R. Widmar: And in some cases, you may even see a pull-forward of projects from 26 into 25, if there's a view that, you know, that there's a legislative process potentially that could change certain provisions within the IRA, there may be an acceleration of everybody trying to monetize as much as they can in 25 before a budget reconciliation process could potentially impact the legislation and call that maybe late Q3 of 25 kind of view of the world. So I think we're going to see a little bit of both, maybe some pause just to assess.

Speaker Change: You know, that there's a legislative process potentially that could change certain provisions within the IRA, there may be an acceleration of everybody trying to monetize as much as they can in 25 before a budget reconciliation process could potentially impact the legislation and call that.

Andrew Percoco: So I think we're going to see a little bit about maybe some pause just to assess.

Speaker Change: maybe late Q3 of 25 kind of view of the world. So I think we're going to see a little bit of both, maybe some pause just to assess, but then I think...

Andrew Percoco: But then I think, you know, what likely plays out with the Republican controlled DC would be a very terrible outcome for First Solar and domestic manufacturing. Andrew, Mark is talking about it from a customer perspective. The same is also true from us. We talked before about how there's potentially some customer timing question around when they would want to make booking. The same is true for us as to when we want to take a booking. And you see that in the very judicious approach we've been taking. And, you know, what looks historically like relatively low bookings, and of course, it has to deliver an outcome for us.

Mark R. Widmar: But then I think, you know, what likely plays out with a Republican-controlled D.C. would be a favorable outcome for First Solar's domestic manufacturing. Andrew, Mark's talking about it from a customer perspective. The same is also true from ours.

Speaker Change: You know, what likely plays out with a Republican-controlled D.C. would be a very favorable outcome for first solar domestic manufacturing.

Alexander R. Bradley: We talked before about how there's potentially some customer time in question around when they would want to make bookings. The same is true for us as to when we want to take a booking. And you see that in the very judicious approach we've been taking and, you know, what looks historically like relatively low bookings in this course. That's a deliberate outcome for us.

Andrew Salvatore Percoco: Andrew, Mark's talking about it from a customer perspective. The same is also true from ours. We talked before about how there's potentially some customer time in question around when they would want to make bookings. The same is true for us as to when we want to take a booking.

Speaker Change: And you see that in the very judicious approach we've been taking and, you know, what looks historically like relatively low bookings in this quarter, that's a deliberate outcome for us. And so as we think through the risk profile of taking a booking today, the risk profile around the election, most scenarios would tell us that it makes sense for us to wait.

Andrew Percoco: And so, as we think through the risk profile of taking a booking today and the risk profile around the election, most scenarios would tell us that it makes sense for us to wait, especially given that one of the things the First Solar Prize itself on is we honor our contracts. And so, if we set a price today and things change around the election that could otherwise lead to different outcomes, we will honor the contract that we sign and the same way we expect our customers to honor the contracts they have signed.

Alexander R. Bradley: And so as we think through the risk profile of taking a booking today, the risk profile around the election, most scenarios would tell us that it makes sense for us to wait, especially given that. You know, one of the things that First Solar prides itself on is that we honor our contracts. And so if we set a price today and things change around the election that could otherwise lead to a different outcome, we will honor the contract that we signed in the same way we expect our customers to honor the contracts they've signed.

Speaker Change: Especially given that, one of the things that First Solar prides itself on is we honor our contracts. And so if we set a price today, and things change around the election, that could otherwise lead to different outcome, we will honor the contract that we signed in the same way we expect our customers to honor the contracts they've signed. So there's a lot of things here that lead.

Andrew Percoco: So there's a lot of things here that lead us to wait, as well as a customer.

Speaker Change: Lead us to wait as well as a customer.

Mark Strouse: And your next question comes from the line of Mark Strouse with JP Morgan; your line is open. Yes, good afternoon. Thank you very much for taking our question. And when to follow up on Phil's question earlier, just comparing contrasting the ASTs of the bookings in July versus what you put up on the last earnings call, up a bit kind of despite all of the news that's come out into a quarter. You mentioned kind of customers or kind of digesting all of the news flow. Is there any other color that you would call out as far as timing of those deliveries, you know, 2027 versus 2030, that also might be a factor in that.

Alexander R. Bradley: So there are a lot of things here that lead us to wait as well as the customers. And your next question comes from the line of Mark Strouse with J.P. Morgan. Your line is open. Yes, good afternoon.

Speaker Change: And your next question comes from the line of Mark Strouse with J.P. Morgan. Your line is open.

Mark Wesley Strouse: Thank you very much for taking our question. I wanted to follow up on Phil's question earlier. Just comparing and contrasting the ASPs of the bookings in July versus what you put up on the last earnings call, up a bit, kind of despite all of the news that's come out intra-quarter. You mentioned customers are kind of digesting all of the news flow. Is there any other color that you would call out as far as timing of those deliveries, you know, 2027 versus 2030, that also might be a factor in that?

Mark Strauss: Yes, good afternoon. Thank you very much for taking our question. I wanted to follow up on Phil's question earlier.

Mark Wesley Strouse: Just comparing and contrasting the ASPs of the bookings in July versus what you put up on the last earnings call, up a bit, kind of despite all of the

Mark Wesley Strouse: All of the news that's come out intra quarter. You mentioned kind of customers are kind of digesting all of the

Speaker Change: The news flow. Is there any other color that you would call out as far as

Speaker Change: Timing of those deliveries, you know, 2027 versus 2030.

Mark Strouse: And just a quick follow-up, do you have a customer in mind to backfill for the 400 megawatt cancellation? Should we just simply add that to our 2025 numbers? Is there any chance that that could potentially come back into 2024? Thank you. Yeah, on the last question, I guess first I'll hit on that. Is, but there is a chance. We're actually engaged right now with negotiations on a portion of that volume. But at the same time, which time to be balanced in our views, we only have five months left in the year. You know, the timing of the requirement for those models and what project, you know, it has to be something that is not too far along in the design phase because if it's already been designed to a different product and then to switch to the engineering drawings and everything else, and potentially even the supply chain balance system that they would they're currently procuring could have to be modified as well.

Mark Wesley Strouse: And then, just a quick follow-up, do you have a customer in mind to backfill for the 400-megawatt cancellation? Should we just simply add that to our 2025 numbers? Is there any chance that that could potentially come back into 2024? Thank you.

Speaker Change: that also might be a factor in that. And then just a quick follow up. Do you have a customer in mind?

Speaker Change: to backfill for the 400 megawatt cancellation. Should we just simply add that to our 2025 numbers? Is there any chance that that could potentially come back into 2024? Thank you.

Mark R. Widmar: Yeah. Look, on the last question, I guess the first thing I'll hit on that is that there is a chance. We're actively engaged right now in negotiations on a portion of that volume. But at the same time, we're just trying to be balanced in our views. We only have five months left in the year.

Speaker Change: Yeah, um.

Speaker Change: And on the last question, I guess, first I'll hit on that is that there is a chance, you know, we're actively engaged right now.

Speaker Change: with negotiations on a portion of that volume.

Speaker Change: But at the same time, we're just trying to be balanced in our views. You know, we only have, you know, five months left in the year. You know, the timing of the requirement for those models and what project, you know, it has to be something that is

Mark R. Widmar: The timing of the requirement for those models and what project it is has to be something that is not too far along in the design phase, because if it's already been designed for a different product, and then to switch to the engineering drawings and everything else, and potentially even the supply chain balance of the system that they are currently procuring could have to be modified as well. So I think it's best just to assume that it will not happen this year.

Speaker Change: Not too far along in the design phase, because if it's already been designed to a different product, and then to switch to the engineering drawings and everything else, and potentially even the supply chain.

Mark Strouse: So, you know, I think it's best just to assume that it does not happen this year. But, you know, clearly, we're going to want to sell through that volume as quickly as we can. You know, as it relates to the bookings, yeah, there is, to me, there's really four large bookings. You know, there was in the current quarter, forget about the the deep booking in the current quarter, there was four large ones. And I'm also including the one booking that is subject to CP contract, subject to CP, right, which is a 600 megawatt project. So, you include that in there.

Speaker Change: Bonsai Services, So you know, I think it's best just to assume that it does not happen this year. But you know, clearly, we're going to want to sell sell through that volume as quickly as we can.

Mark R. Widmar: But clearly, we're going to want to sell through that volume as quickly as we can. As it relates to the bookings, yeah, there are, to me, there are really four large bookings. In the current quarter, forget about the debooking; in the current quarter, there were four large ones. And I'm also including the one booking that's subject to CP, a contract subject to CP, right, which is a 600 megawatt project, so you include that in there. That deal is completely finalized, all terms and conditions and ASPs and all that stuff is finalized, and it's subject to a developer getting actual finalizing control of the site on their end.

Speaker Change: As it relates to the bookings, yeah, to me there's really four large bookings. In the current quarter, forget about the debooking, in the current quarter there was four large ones.

Speaker Change: And I'm also including the one booking that's subject to CP, a contract subject to CP, right, which is 600 megawatt.

Mark Strouse: That that deal is completely and it's finalized. All terms of conditions and ASP and all that stuff is finalized. And it's subject to a developer getting actual finalizing control of the site on their end. And we hopefully will see that close out this up in the quarter. So, I look at it, there's, you know, four large bookings for the quarter or three bookings, plus a contract. Which aggregates up to about 128 gigawatts when you look at it from that perspective. And most of that volume is kind of 26, 27, and 28. So, it is out into a longer dated window.

Speaker Change: Project. So you include that in there.

Speaker Change: That deal is completely, it's finalized, all terms and conditions and ASPs and all that stuff is finalized, and it's subject to a developer getting actual finalizing control of a site on their end.

Mark R. Widmar: And we hopefully will see that close out this upcoming quarter. So I look at it, there are, you know, four large bookings for the quarter, or three bookings plus a contract, which aggregates up to about 1.8 gigawatts when you look at it from that perspective. And most of that volume is kind of 26, 27, and 28, so it is out of date for a longer dated window. And it's still maintaining, you know, good ASPs.

Speaker Change: And we hopefully will see that close out this upcoming quarter. So I look at it, there's, you know, four large bookings for the quarter or three bookings plus a contract.

Speaker Change: which aggregates up to about 1.8 gigawatts when you look at it from that perspective and and most of that volume is kind of 26, 27, and 28.

Mark Strouse: And it's still maintaining, you know, good ASPs. And why we always want to make sure that we're highlighting the impact of those adders, as we indicated. We're starting our Carol lead line this quarter, and we'll be replicating across the fleet. So, by the time we actually deliver against those projects, you know, we'll be able to monetize the full value of those adders. So, I look at the kind of the ASP numbers as we should be most reflective on is the ASP with the adder. And so, good project, a good window, which we wanted to book with.

Mark R. Widmar: And why we always want to make sure that we're highlighting the impact of those adders. As we indicated, we're starting our Carol lead line this quarter, and we'll be replicating across the fleet. So by the time we actually deliver against those, for those projects, we'll be able to monetize the full value of those adders. So I look at the kind of ASP numbers that we should be most reflective upon is the ASP with the adder.

Speaker Change: So it is out into a longer dated window.

Speaker Change: And it's still maintaining, you know, good ASPs and why we always want to make sure that we're highlighting the impact of those.

Speaker Change: Those adders, as we indicated, we're starting our Carol lead line this quarter, and we'll be replicating across the fleet. So by the time we actually deliver against those...

Speaker Change: for those projects, you know, we'll be able to monetize the full value of those adders. So I look at the kind of the ASP numbers that we should be most reflect upon is the ASP with the adder.

Mark R. Widmar: And so good projects, a good window, which one to book with good counterparties, happy to continue to see more and more First Solar modules being associated with data centers and the expansion of data centers. So overall, pretty pleased with that.

Mark Strouse: Good counterparties. I'm happy to continue to see more and more first-seller models being associated with data centers and expansion of data centers. So, overall, pretty pleased with that. And we'll continue to see customers and willingness to move forward in the gauge. I do think, given the one is that we're booking out into, there will be some that are going to continue to sort of maybe evaluate and assess until there's better clarity exactly what's where the policy environment will land in DC. And no different than what we want to do the same thing as Alexan. Thank you.

Speaker Change: And so good projects, a good window of which one to book with, good counterparties.

Speaker Change: Happy to continue to see

Speaker Change: More and more First Solar modules being associated with data center and expansion of data centers.

Mark R. Widmar: And we'll continue to see customers and the willingness to move forward and engage. I do think given the windows that we're booking out into, there will be some that are going to continue to sort of maybe evaluate and assess until there's better clarity exactly where the policy environment will land in DC, and no different than what we want to do, the same thing as Alex indicated. And your next question comes from the line of Brian Lee with Goldman Sachs. Your line is open. Hey guys, good afternoon.

Speaker Change: So overall, pretty pleased with that. And we'll continue to see customers and willingness to move forward and engage. I do think given the windows that we're booking out into, there will be some that are going to continue to sort of maybe

Speaker Change: evaluate and assess until there's better clarity exactly with where the policy environment will land in D.C. and no different than what we want to do the same thing as Alex indicated.

Brian Lee: And your next question comes from the line of Brian Lee with Goldman Sachs; your line is open. Hey guys, good afternoon. Thanks for saying the questions.

Speaker Change: And your next question comes from the line of Brian Lee with Goldman Sachs. Your line is open.

Brian K. Lee: Thanks for taking the questions. Sorry to beat a dead horse, but on the bookings front, just had a pricing question. Were all the bookings from U.S. fabs in the quarter, or was there some from Asia in there as well?

Brian Lee: You know, started to be a dead horse, but on the bookings front just had a pricing question. Everything had moved maybe, you know, three to four cents per watt higher in recent times or into tariff uncertainty. Is that kind of still what you're seeing mid 30s level in the US specifically?

Brian K. Lee: Hey guys, good afternoon. Thanks for taking the questions. Sorry to beat a dead horse, but on the bookings front, just had a pricing question. Were all the bookings from U.S. fabs in the quarter or was there some from Asia in there as well? I'm just trying to, I guess, get a sense of like for like pricing, given your comments from the last call that U.S. pricing had moved maybe, you know, three to four cents per watt higher in recent times, owing to tariff uncertainty. Is that kind of still what you're seeing mid-30s level in the U.S. specifically? And then, you know, second question I had was just, you know, big picture thoughts on new CapEx and timing of any kind of next manufacturing capacity expansion, whether new technology, Tandem or Series 7, what are kind of major bottlenecks, decision criteria?

Mark R. Widmar: I'm just trying to, I guess, get a sense of like-for-like pricing given your comments from the last call that U.S. pricing had moved maybe $0.03 to $0.04 per watt higher in recent times owing to tariff uncertainty. Is that kind of still what you're seeing in the mid-30s levels in the U.S. specifically? And then, you know, the second question I had was just, you know, big picture thoughts on new CapEx and timing of any kind of next manufacturing capacity expansion, whether new technology, Tandem, or Series 7. What are the kind of major bottlenecks, decision criteria you're thinking about to potentially move forward on a decision there? Thanks, guys.

Brian Lee: And then, you know, second question I had was just, um, you know, big picture thoughts on new cat backs and timing of any kind of next manufacturing capacity expansion, whether new technology, tandem or series seven. What are kind of major bottlenecks, decision criteria, you're thinking about, you know, to potentially move forward on a decision there. Thanks, guys. Yeah, so we, um, you know, the bookings, there was some India domestic volume that was booked within the quarter, and we highlighted that and called that out. The average ASP wasn't a significant portion of the total volume, but it was it was a piece of it.

Speaker Change: you're thinking about, you know, to potentially move forward on a decision there. Thanks, guys.

Mark R. Widmar: Yeah, so we, you know, the bookings, there was some India domestic volume that was booked within the quarter. And we highlighted that and called that out of the average ASP. It wasn't a significant portion of the total volume, but it was, it was a piece of it.

Speaker Change: Yeah, so we um

Speaker Change: The bookings, there was some India domestic volume that was booked within the quarter and we highlighted that and called that out of the average ASP. It wasn't a significant portion of the total volume, but it was a piece of it. But there are shipments from India in particular that are being sold into the U.S. market that are included in that average ASP.

Brian Lee: But there are some shipments from India, in particular, that are being sold into the US market that are included in that average ASP. I wouldn't say all that similar from our normal mix of domestic versus international, but there is some India volume that would be sold into the US market that's captured in the bookings for the quarter.

Mark R. Widmar: But there are shipments from India in particular that are being sold into the US market that are included in that average ASP. I wouldn't say it's all that dissimilar from our normal mix of domestic versus international. But there is some Indian volume that would be sold into the US market that's captured in the bookings for the quarter.

Speaker Change: I wouldn't say all that dissimilar from our normal mix of domestic versus international, but there is some in the India volume that would be sold into the U.S. market that's captured in the bookings for the quarter.

Brian Lee: Um, the, you know, one thing I want to make sure is that when we go back and talk about, you know, pricing environment, what I would say is, you know, what we saw going into last earnings call. We, um, we had earnings call and fab pricing got really soft in the month of March. Then we rolled through beginning of April, and there was, um, at that time it was an indication of the AD and CBD action against Southeast Asia, the new trade initiative that happened in early April, and then we started to see prices firm up.

Mark R. Widmar: You know, one thing I want to make sure is that when we go back and talk about the pricing environment, what I would say is, you know, what we saw going into the last earnings call. We had an earnings call in Feb. Pricing got really soft in the month of March. Then we rolled through the beginning of April, and there was, at that time, an indication of the... Ad and CVD action against Southeast Asia, the new trade initiative that happened in early April, and then we started to see prices firm up.

Speaker Change: The

Speaker Change: You know, one thing I want to make sure is that when we go back and talk about, you know, pricing environment, what I would say is, you know, what we saw going into the last earnings call, we had an earnings call in Feb,

Speaker Change: Pricing got really soft in the month of March.

Speaker Change: Then we rolled through the beginning of April and there was, at that time it was an indication of the

Speaker Change: AD and CBD action against Southeast Asia, the new new trade initiative that happened in early April and then we started to see prices firm up.

Mark R. Widmar: And then we ended up, you know, closing out on a reasonable amount of volume in that earnings call that we announced in May. But, my comment, which I even said last time, was that some of my point of the three to four cents was also from the weakness that we saw initially within the quarter that then firmed up. So I want to be clear, you know, with adjusters, we're at $0.33, $0.33, and change.

Brian Lee: And then we ended up, you know, closing out on a real amount of volume in that earnings call that we announced in May. But my comment that I even said last time was that some of that my point of the three to four cents was from also the weakness that we saw initially within the quarter that then firmed up. Um, so I, I want to be clear; I, you know, with adjusters were 33 cents, 33 and change. I don't think we should be, you know, looking at, you know, that, that number is going to go up into the above the mid 30 kind of range.

Speaker Change: And then we ended up, you know, closing out on a reasonable amount of volume in that earnings call that we announced in May. But...

Speaker Change: My comment that I even said last time was that that some of that my point of the three to four cents was from also the weakness that we saw initially within the quarter that then firmed up. So I want to be clear, you know, with adjusters, we're at 33 cents, 33 and change. I don't think we should be, you know, looking at

Mark R. Widmar: I don't think we should be, you know, looking at... you know, that number is going to go up into the above the mid-30s kind of range, right? So even to me, it's mid-30 as a cap and south of mid-30 and kind of where we ended up at 36, 33, six. I think that's kind of where we ought to be thinking about it.

Speaker Change: You know that that that number is going to go up.

Brian Lee: Right. So even, to me, it's, it's mid 30 as a cap and south with mid 30 and kind of where we ended up in 36, 33, 6. I think that's kind of where we ought to be thinking about it. And it's going to have in flow any particular quarter depending on what our mixes. What we're selling from, you know, domestic and international, because domestic prices are higher than international. But I also want to make sure that, you know, that we should not be thinking that we're going to, at least in our mind, if we can sell through an horizon that that's far out under the current policy construct.

Speaker Change: to above the mid-30s kind of range.

Speaker Change: All right, so even, to me, it's mid-30 as a cap and south of mid-30 and kind of where we ended up at 36, 33.6. I think that's kind of where we ought to be thinking about it, and it's going to ebb and flow any particular quarter, depending on what our mix is.

Mark R. Widmar: And it's going to ebb and flow in any particular quarter, depending on what our mix is, what we're selling from, you know, domestic and international because domestic prices are higher than international. But I also want to make sure that, you know, we should not be thinking that we're going to at in our minds. If we can sell through and horizon that that's far out under the current policy construct at those types of ASPs, we still find that to be extremely attractive.

Speaker Change: what we're selling from you know, domestic and international because domestic prices are higher than international. But I also want to make sure that we should not be thinking that we're going to — at least in our mind, if we can sell through and a horizon that that's far out under the current policy construct at those types of ASPs.

Brian Lee: That those types of ASPs, we still find that to be extremely attractive. Now in a higher tariff environment, which is why we're trying to be patient on our domestic product and what we're selling through that, then I think there's increased opportunity for higher ASPs domestically.

Mark R. Widmar: Now, in a higher tariff environment, which is why we're trying to be patient on our domestic product and what we're selling through at, then I think there's an increased opportunity for higher ASPs domestically. But that that is all triggered by a potential change in administration and overall change to strategy around the policy environment. So, but anyway, that's how we should think about ASP around new cap ex.

Speaker Change: We still find that to be extremely attractive. Now, in a higher tariff environment, which is why we're trying to be patient on our domestic product and what we're selling through at, then I think there's an increased opportunity for higher ASBs domestically. But that's that.

Brian Lee: But that is all triggered by potential change, administration, and overall change to strategy around policy environment. So, but, anyway, that's what we should think about ASP around New CapEx. To me, it's all tailored back to the same policy conversation.

Speaker Change: is all triggered by potential change in administration and overall change to strategy around policy environment. So, but anyway, that's how we should think about ASB around new CapEx.

Mark R. Widmar: To me, it's all tethered back to the same policy conversation. Once we have a view and understanding of what that policy environment is going to be like, then we can make a decision on how we want to proceed in that regard. And as I've indicated on prior calls, we're going to continue to do all the work we need to be ready. And once we're ready, we'll move forward.

Brian Lee: Once we have the view and understanding what that policy environment is going to be like, then we can make a decision on how we want to proceed in that regard. And, as I've indicated on prior calls, we're going to continue to do all the work we need to be ready. And once we're understanding of the policy environment, we'll know which scenario we should go down.

Speaker Change: To me, it's all tethered back to the same policy conversation. Once we have a view and understanding what that policy environment is going to be like, then we can make a decision on how we want to proceed in that regard. And as I've indicated on prior calls, we're going to continue to do all the work we need to, to be ready. And once we're

Vikram Bagri: Understanding the policy environment will know which scenario we should go down. And your next question comes from the line of Vikram Bagri with Citi. Your line is open. Hi, everyone. Good afternoon.

Speaker Change: The understanding of the policy environment will know which scenario we should go down.

Vikram Bagri: And your next question comes from the line of Vikram Bagri with City. Your line is open. Hi, everyone. Good afternoon. I apologize if I missed this mark. I wanted to understand your exposure to the uncertainties you highlighted: the capital allocation, the political, and so forth, and regulatory. Are you sort of like trying to indicate that the backlog is completely secure and these uncertainties only impact the forward booking outlook, or is there you're having discussions where there might be more calculations due to convenience? And then staying on that same topic, Mark. You know, the shopping boxing ruling has very widespread applications and a lot of the ideas interpretation by government agencies.

Speaker Change: And your next question comes from the line of Vikram Bagri with Citi. Your line is open.

Mark R. Widmar: I apologize if I missed this. Mark, I wanted to understand your exposure to the uncertainties you highlighted, the capital allocation, the political, and so forth and regulatory. Are you sort of trying to indicate that the backlog is completely secure and these uncertainties only impact the forward booking outlook, or are you having discussions where there might be more cancellations due to convenience? And then, Mark, you know, the Chevron blockchain ruling has very widespread implications and a lot of IRA interpretation by government agencies. Do you see any risks from challenges to those interpretations directly or indirectly affecting First Solar? Thank you.

Speaker Change: for joining us.

Vikram Bagri: Hi everyone, good afternoon. I apologize if I missed this. Mark, I wanted to understand your exposure to the uncertainties you highlighted, the capital allocation, political and so forth, and regulatory.

Speaker Change: Are you sort of like trying to indicate that the backlog is completely secure and these uncertainties only impact the forward booking outlook? Or there is, you're having discussions where there might be more cancellations due to convenience?

Speaker Change: And then staying on that same topic, Mark, you know, the Chevron doctrine ruling has very widespread implications, and a lot of the IRA's interpretation by government agencies, do you see any risks

Mark Widmar: Do you see any risks from challenges to those interpretations directly or indirectly to solar. Thank you. Yeah. Look, I think what we will be trying to highlight in the call is that there are externalities right now that, you know, crave some amount of uncertainty. And one is obviously the political environment. We spent a lot of time around that. The other is clearly the significant overcapacity that we continue to see unabated from China. And we're just trying to continue to highlight that and also emphasize why there's and so important for us to be very aggressive on trade policy standpoint, whether here in the US or in India or even actions and initiatives we're trying to do and in the EU.

Speaker Change: from challenges to those interpretations directly or indirectly to First Solar. Thank you.

Mark R. Widmar: Yeah, look, I think what we try to highlight in the call is that there are externalities right now that, you know, that create some amount of uncertainty. And one is obviously the political environment; we spent a lot of time around that. The other is clearly the significant overcapacity that we continue to see unabated from China. And we're just trying to continue to highlight that and also emphasize why it's so important for us to be very aggressive on a trade policy standpoint, whether here in the US or in India, or even actions and initiatives we're trying to do in the EU, right. So we think those are all important things that everyone needs to be mindful of.

Mark: Yeah, look, I think what we what we try to highlight in the call is that there's externalities right now that

Speaker Change: You know they create some amount of uncertainty and one is obviously the political environment. We spent a lot of time around that

Speaker Change: The other is clearly the significant overcapacity that we continue to see, unabated.

Speaker Change: I'm from China, and we're just trying to continue to highlight that and also emphasize why it's so important for us to be very aggressive on a trade policy standpoint, whether here in the U.S. or in India, or even actions and initiatives we're trying to do.

Mark Widmar: Right. So we think those are all important things that everyone needs to be mindful of.

Speaker Change: in the EU. So we think those are all important things that everyone needs to be mindful of. The one, as it relates to whether this calls into question our backlog, those two are not calling into question the risk of our backlog from a contractual standpoint.

Mark R. Widmar: The one, as it relates to whether this calls into question our backlog; those two are not calling into question the risk of our backlog from a contractual standpoint. Right now, if for some reason there's a new policy environment and the Republicans were to get into control, and they, you know, eliminated the tech neutral ITC or minimized it, reduced it, that could have an impact on the viability of our customers' projects and their associated returns. Clearly, that's going to have ramifications for solar because now project fundamentals have changed. There's no view of that per se happening.

Mark Widmar: The one as relates to whether this calls into question are backlog; those two are not calling into question the risk of our backlog from a contractual standpoint. Right. Now, if for some reason there's a new policy environment, the Republicans were to get into control and they, you know, eliminated the tech neutral ITC or minimized it. It reduced it that could have the impact on our viability of our customers' projects and their associated returns. And clearly that's going to have a ramification to for solar because now project fundamentals have modified. There's no view of that per se happening, but it's an indication of when we go through the political uncertainty of the election process that we're going to be going through.

Speaker Change: Right now, if for some reason there's a new policy environment the Republicans were to getting into control and they

Speaker Change: You know, eliminated the tech-neutral ITC.

Speaker Change: or minimized it, reduced it, that could have an impact on our viability of our customers' projects and their associated returns. I mean, clearly, that's going to have a ramification to First Solar because now project fundamentals have modified.

Mark R. Widmar: But it's an indication of when we go through the political uncertainty or the election process that we're going to be going through. And if there's Republican control, there's a number of things that could be addressed as part of the IRA that may or may not have any potential implications on us. We're just trying to highlight that as such. So no impact on the backlog from that standpoint, but for some dramatic pivot or change in the market. The one we are trying to highlight is that we had one. Look, this is not news.

Speaker Change: There's no view of that per se happening but it's an indication of when we go through the political

Mark Widmar: And if there's a Republican control, there's a number of things that could be addressed as part of the IRA that may or may not have any potential implications on us. We're just trying to highlight that, as such. So no impact on the backlog from that standpoint, but for some dramatic pivot or change into the market. The one we are trying to highlight is that we had. Look, this is not news. You can go and look at a lot of oil and gas majors, large oil and gas majors. And, you know, they are assessing viability of project returns and solar and deployment of capital and allocation of capital.

Speaker Change: Uncertainty or the election process that we're going to be going through and if there's a Republican control There's a number of things that could be addressed as part of the IRA that may or may not have any potential implications on us We're just trying to highlight that as such

Speaker Change: So no impact on the backlog from that standpoint, but for some dramatic pivot or changes to the market. The one we are trying to highlight is that we had

Mark R. Widmar: You can go and look at a lot of oil and gas majors, large oil and gas majors, and they are assessing the viability of project returns in solar and the deployment of capital and allocation of capital. We had a European power utility company that was on our books for over a gigawatt of volume. They ended up taking 600 megawatts or so of that volume and then ending up terminating about 400 megawatts of that volume because they had made a decision to exit the U.S. market. That happens.

Speaker Change: Look, this is not news. You can go and look at a lot of oil and gas majors, large oil and gas majors, and, you know, they are assessing viability of project returns in solar.

Mark Widmar: You know, we had a European power utility company that was on our books were over gigawatt of volume. They ended up taking 600 megawatts or so of that volume and then ended up terminating about 400 megawatts of that volume because they have made a decision to exit the US market. That happens. But, as we said in the last call, the good thing about that is, on the other side of that equation, is somebody requiring their development portfolio. Who happens to be a long term for solar customer who is 100% source to our technology. So it's a good thing; long term, it creates near term disruption.

Speaker Change: and deployment of capital and allocation of capital.

Speaker Change: That was on our books for over a gigawatt of volume, they end up taking...

Speaker Change: have about 600-megawatts or so of that volume, and they end up terminating at about 400-megawatts of that volume because they have made a decision to exit the U.S. market. That happens. But as we said in the last call, the good thing about that is on the other side of that equation is somebody acquiring their development portfolio who happens to be a long-term First Solar customer who is 100 percent sole source to our technology. So, it's a good thing long-term. It creates near-term disruption.

Mark R. Widmar: But as we said in the last call, the good thing about that is, on the other side of that equation, somebody acquiring their development portfolio who happens to be a long-term First Solar customer who is 100 percent sole source for our technology. So it's a good thing in the long run. It creates near-term disruption, but this customer already has a framework agreement with us. So near-term, they don't need incremental modules to build out that development pipeline which they are acquiring.

Mark Widmar: This customer already had the framework agreement with us. So near term, they don't need incremental modules to build out that development pipeline, which they're acquiring. But longer term, that just further establishes us with a higher penetration of market share. We also highlighted in India there was a large oil and gas major who was not a booking. It was a contract that we have that they're now selling the business. And as a result of that, there's a termination associated with it. They've got a 30-day period of which to cure it. If they don't, then they're going to pay a termination payment.

Mark R. Widmar: But longer-term, that just further establishes us with a higher penetration of the market share. We also highlighted in India that there was a large oil and gas major who, while it was not a booking, it was a contract that we have that they are now selling the business. And as a result of that, there is a termination associated with it. They have got a 30-day period in which to cure it.

Speaker Change: This customer already has a framework agreement with us, so near term they don't need incremental modules to build out that development pipeline which they're acquiring, but longer term that just further establishes us with a higher penetration of market share.

Speaker Change: The, you know, we also highlighted in India, there was a large oil and gas major who was not a booking, it was a contract that we have that they're now selling the business.

Mark R. Widmar: If they don't, then they are going to pay a termination payment. So there are things that are happening around us that we are just trying to make sure people understand that as these large multinational companies either invest in or further accelerate their investments or decide to decelerate, it could have an impact on us. And in the backdrop to all this other stuff happening, you know, we have others like the Brookfields of the world who are acquiring developers.

Speaker Change: And as a result of that, there's a termination associated with it. They've got a 30-day period in which to cure it. If they don't, then they're going to pay a termination payment.

Mark Widmar: So there's things that are happening that are around us that we're just trying to make sure people understand that as these large multinational companies either investor or further accelerate their investments or decide that to decelerate, it could have an impact on us. In the backdrop to all this other stuff happening, you know, we have others like the Brookfields of the world who are acquiring developers. So they're on the other side of the equation; they're making acquisitions here in the US, they're making acquisitions in India, and so on, and even in Europe, and we have a relationship with them as well.

Speaker Change: So there's...

Speaker Change: [inaudible]

Speaker Change: Things that are happening that are, you know, around us that we're just trying to make sure people understand that as these large multinational companies either investor or, you know, further accelerate their investments or decide to decelerate, it could have an impact on us.

Speaker Change: In the backdrop to all this other stuff happening, you know, we have others like the Brookfields of the world who are acquiring developers. So they're on the other side of the equation. They're making acquisitions here in the U.S., they're making acquisitions in India and so on, and even in Europe . And we have a relationship with them as well. So there's just this intermix of this stuff happening right now. We thought it was important that people understood. It shouldn't be a surprise, especially to large oil and gas majors. They've been highlighting this.

Mark R. Widmar: So they're on the other side of the equation. They're making acquisitions here in the U.S., they're making acquisitions in India and so on and even in Europe, and we have a relationship with them as well. So there's just this mix of this stuff happening right now.

Mark Widmar: So there's just this intermix of this stuff happening right now. We thought it was important that people understood this shouldn't be a surprise, especially as well, a large, long-ass majors. They've been highlighting this, CO changes, other things that have happened, and you know, the assessment of, you know, ultimate deployment of capital, and where solar fits in that strategy. So Chevron, the last one you highlighted, look, I don't think at least interpretations that I continue to get from my team is probably very little impact. A lot of the IRA and some of the guidance associated with the IRA were tax regs and tax rules generally, not really in the bullseye of where you would focus on from the Chevron deference.

Mark R. Widmar: We thought it was important that people understood. This shouldn't be a surprise, especially to large oil and gas majors. They've been highlighting this, CEO changes, other things that have happened, and, you know, the assessment of the ultimate deployment of capital and where solar fits in that strategy. So Chevron, the last one you highlighted, look, I don't think, at least the interpretations I continue to get from my team, are probably having very little impact.

Speaker Change: CEO changes, other things that have happened, and you know, assessment of, you know, ultimate deployment of capital and where solar fits in that strategy. So Chevron, the last one you highlighted.

Mark R. Widmar: A lot of the IRA and some of the guidance associated with the IRA were tax regs and tax rules generally not really in the bull's eye of where you would focus on from the Chevron deference. And so I don't think there's any significant exposure. We know there are some concerns maybe around hydrogen and some of the other interpretations that were provided.

Speaker Change: Look, I don't think, at least the interpretations I continue to get from my team, is probably very little impact. A lot of the IRA and some of the guidance associated with the IRA were tax regs and tax rules. Generally...

Speaker Change: Not really in the bullseye of where you would focus on from the Chevron deference.

Mark Widmar: And so I don't think there's any significant exposure. We know there's some concerns maybe around hydrogen and some of the other interpretations that were provided, but at least as it relates to, you know, domestic content or, you know, the manufacturing tax credit, those types of things. We don't see it really Chevron impacting that at this point of time.

Speaker Change: And so I don't think there's any.

Speaker Change: Significant exposure. We know there's some concerns maybe around hydrogen and some of the other interpretations that were provided.

Mark R. Widmar: But at least as it relates to, you know, domestic content or, you know, the manufacturing tax credit and those types of things, we don't see Chevron really impacting that at this point in time. Vikram, just on the backlog, we've said before we have fixed price agreements. What we're saying here is that those still stand.

Speaker Change: V.F.O. Itself. But at least as it relates to domestic content or, you know, the manufacturing tax credit and those types of things, we don't see a Chevron impacting that at this point in time. Vikram, just on the backlog, we've said before we have fixed price agreements.

Mark Widmar: If I could just on the backlog, so we've said before we have some fixed price agreements. What we're saying here is those still stand. If the event of a systemic shock to the system, I think some of the risk ultimately could fall on us. It's the significant defaults, and customers are in trouble. But generally, I would say we look to the strength of the contracts in the event that there's a determination for convenience option. Customers choose to utilize that. And we've said before that's on a very small part of our backlog, then we would collect determination payment.

Alexander R. Bradley: In the event of a systemic shock to the system, I think some of the risk could ultimately fall on us if there are significant defaults and customers are in trouble. But generally, I would say we look to the strength of the contracts. In the event that there's a termination for convenience option and customers choose to utilize that, and we've said before that's only a very small part of our backlog, then we would collect a termination payment.

Speaker Change: What we're saying here is those still stand. In the event of a systemic shock to the system, I think some of the risk ultimately could fall on us if there's significant defaults and customers are in trouble.

Speaker Change: But generally I would say we look to the strength of the contracts in the event that there's a termination for convenience option and customers choose to utilize that, and we've said before that's on a very small part of our backlog, then we would collect a termination payment. In the event that customers default, we've shown and I think it's fair to say that we believe our contracts are two-way agreements.

Mark Widmar: In the event that customers default, we've shown, and I think it's fair to say that we believe our contractor two-way agreements, customers have obligations as well as us, and we will go after the termination payments that are owed to us.

Alexander R. Bradley: In the event that customers default, we've shown, and I think it's fair to say that we believe our contracts are two-way agreements. Customers have obligations as well as us, and we will go after termination payments. And that does conclude today's conference call. You may now disconnect.

Speaker Change: Customers have obligations as well as us and we will go after termination payments that are owed to us.

Unknown Attendee: And that does conclude today's conference call. You may now disconnect.

Speaker Change: And that does conclude today's conference call. You may now disconnect.