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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

(Mark one)

☒    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2024
or
☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Commission file number: 001-33156
FSLR_Logo_2021.jpg
First Solar, Inc.
(Exact name of registrant as specified in its charter)
Delaware20-4623678
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)

350 West Washington Street, Suite 600
Tempe, Arizona 85288
(Address of principal executive offices, including zip code)

(602) 414-9300
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common stock, $0.001 par valueFSLRThe NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒Accelerated filer☐Non-accelerated filer☐
Smaller reporting company☐Emerging growth company☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 25, 2024, 107,057,732 shares of the registrant’s common stock, $0.001 par value per share, were outstanding.



FIRST SOLAR, INC.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024

TABLE OF CONTENTS
  Page

Throughout this Quarterly Report on Form 10-Q, we refer to First Solar, Inc. and its consolidated subsidiaries as “First Solar,” “the Company,” “we,” “us,” and “our.” Units of electricity are typically stated in gigawatts (“GW”).


PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (Unaudited)

FIRST SOLAR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Net sales$887,668 $801,090 $2,692,258 $2,160,049 
Cost of sales442,357 424,915 1,402,055 1,361,403 
Gross profit445,311 376,175 1,290,203 798,646 
Operating expenses:
Selling, general and administrative46,293 50,172 138,680 140,528 
Research and development50,197 41,190 144,876 108,445 
Production start-up26,822 12,059 69,681 54,930 
Litigation loss— — 430 35,590 
Total operating expenses123,312 103,421 353,667 339,493 
Gain on sales of businesses, net— 211 1,115 329 
Operating income321,999 272,965 937,651 459,482 
Foreign currency loss, net(5,158)(987)(17,665)(11,586)
Interest income22,580 23,254 74,424 74,102 
Interest expense, net(9,008)(3,734)(27,983)(5,897)
Other expense, net(3,071)(1,033)(6,435)(1,492)
Income before taxes327,342 290,465 959,992 514,609 
Income tax expense(14,386)(22,067)(61,064)(33,071)
Net income$312,956 $268,398 $898,928 $481,538 
Net income per share:
Basic$2.92 $2.51 $8.40 $4.51 
Diluted$2.91 $2.50 $8.36 $4.49 
Weighted-average number of shares used in per share calculations:
Basic107,049 106,834 107,015 106,795 
Diluted107,562 107,498 107,514 107,326 

See accompanying notes to these condensed consolidated financial statements.
1
FIRST SOLAR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Net income$312,956 $268,398 $898,928 $481,538 
Other comprehensive income (loss):
Foreign currency translation adjustments
9,775 (4,942)(1,702)(7,635)
Unrealized gain (loss) on marketable securities and restricted marketable securities, net of tax of $(464), $340, $(321) and $23
9,683 (8,696)6,483 (3,045)
Unrealized (loss) gain on derivative instruments, net of tax of $0, $(214), $(131) and $(1,087)
(1)719 490 3,527 
Other comprehensive income (loss)19,457 (12,919)5,271 (7,153)
Comprehensive income$332,413 $255,479 $904,199 $474,385 

See accompanying notes to these condensed consolidated financial statements.

2
FIRST SOLAR, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
 
 
September 30,
2024		December 31,
2023
ASSETS
Current assets: 
Cash and cash equivalents$1,005,130 $1,946,994 
Marketable securities264,691 155,495 
Accounts receivable trade, net762,138 660,776 
Government grants receivable, net6,659 659,745 
Inventories1,250,629 819,899 
Other current assets528,856 391,900 
Total current assets3,818,103 4,634,809 
Property, plant and equipment, net5,326,121 4,397,285 
Deferred tax assets, net237,868 142,819 
Restricted marketable securities211,130 198,310 
Government grants receivable871,745 152,208 
Goodwill29,585 29,687 
Intangible assets, net56,645 64,511 
Inventories269,675 266,899 
Other assets615,766 478,604 
Total assets$11,436,638 $10,365,132 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:  
Accounts payable$265,320 $207,178 
Income taxes payable98,446 22,134 
Accrued expenses520,835 524,829 
Current portion of debt208,261 96,238 
Deferred revenue645,050 413,579 
Other current liabilities44,253 42,200 
Total current liabilities1,782,165 1,306,158 
Accrued solar module collection and recycling liability139,035 135,123 
Long-term debt373,321 464,068 
Deferred revenue1,320,331 1,591,604 
Other liabilities228,138 180,710 
Total liabilities3,842,990 3,677,663 
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value per share; 500,000,000 shares authorized; 107,057,732 and 106,847,475 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively107 107 
Additional paid-in capital2,892,407 2,890,427 
Accumulated earnings4,869,994 3,971,066 
Accumulated other comprehensive loss(168,860)(174,131)
Total stockholders’ equity7,593,648 6,687,469 
Total liabilities and stockholders’ equity$11,436,638 $10,365,132 

See accompanying notes to these condensed consolidated financial statements.

3
FIRST SOLAR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands)
(Unaudited)
Three Months Ended September 30, 2024
 Common StockAdditional
Paid-In
Capital		Accumulated EarningsAccumulated
Other
Comprehensive Loss		Total
Stockholders' Equity
 SharesAmount
Balance at June 30, 2024107,046 $107 $2,886,569 $4,557,038 $(188,317)$7,255,397 
Net income— — — 312,956 — 312,956 
Other comprehensive income— — — — 19,457 19,457 
Common stock issued for share-based compensation
16 — — — — — 
Tax withholding related to vesting of restricted stock
(4)— (996)— — (996)
Share-based compensation expense
— — 6,834 — — 6,834 
Balance at September 30, 2024107,058 $107 $2,892,407 $4,869,994 $(168,860)$7,593,648 
Three Months Ended September 30, 2023
 Common StockAdditional
Paid-In
Capital		Accumulated EarningsAccumulated
Other
Comprehensive Loss		Total
Stockholders' Equity
 SharesAmount
Balance at June 30, 2023106,831 $107 $2,872,153 $3,353,429 $(186,051)$6,039,638 
Net income— — — 268,398 — 268,398 
Other comprehensive loss— — — — (12,919)(12,919)
Common stock issued for share-based compensation
18 — — — — — 
Tax withholding related to vesting of restricted stock
(5)— (853)— — (853)
Share-based compensation expense
— — 8,112 — — 8,112 
Balance at September 30, 2023106,844 $107 $2,879,412 $3,621,827 $(198,970)$6,302,376 

See accompanying notes to these condensed consolidated financial statements.
4
FIRST SOLAR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands)
(Unaudited)
Nine Months Ended September 30, 2024
 Common StockAdditional
Paid-In
Capital		Accumulated EarningsAccumulated
Other
Comprehensive Loss		Total
Stockholders' Equity
 SharesAmount
Balance at December 31, 2023106,847 $107 $2,890,427 $3,971,066 $(174,131)$6,687,469 
Net income— — — 898,928 — 898,928 
Other comprehensive income— — — — 5,271 5,271 
Common stock issued for share-based compensation
338 — — — — — 
Tax withholding related to vesting of restricted stock
(127)— (20,144)— — (20,144)
Share-based compensation expense
— — 22,124 — — 22,124 
Balance at September 30, 2024107,058 $107 $2,892,407 $4,869,994 $(168,860)$7,593,648 
Nine Months Ended September 30, 2023
 Common StockAdditional
Paid-In
Capital		Accumulated EarningsAccumulated
Other
Comprehensive Loss		Total
Stockholders' Equity
 SharesAmount
Balance at December 31, 2022106,609 $107 $2,887,476 $3,140,289 $(191,817)$5,836,055 
Net income— — — 481,538 — 481,538 
Other comprehensive loss— — — — (7,153)(7,153)
Common stock issued for share-based compensation389 — — — — — 
Tax withholding related to vesting of restricted stock(154)— (31,100)— — (31,100)
Share-based compensation expense— — 23,036 — — 23,036 
Balance at September 30, 2023106,844 $107 $2,879,412 $3,621,827 $(198,970)$6,302,376 

See accompanying notes to these condensed consolidated financial statements.
5
FIRST SOLAR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 Nine Months Ended
September 30,
20242023
Cash flows from operating activities:  
Net income$898,928 $481,538 
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation, amortization and accretion299,079 218,303 
Share-based compensation21,987 23,209 
Deferred income taxes(85,343)(46,053)
Gain on sales of businesses, net(1,115)(329)
Other, net3,238 393 
Changes in operating assets and liabilities:
Accounts receivable, trade
(68,823)(385,046)
Inventories(434,375)(262,665)
Government grants receivable(59,181)(429,744)
Other assets(183,127)(126,073)
Income tax receivable and payable35,708 (16,809)
Accounts payable and accrued expenses(8,953)121,382 
Deferred revenue(13,159)472,934 
Other liabilities2,139 (9,889)
Net cash provided by operating activities
407,003 41,151 
Cash flows from investing activities:
Purchases of property, plant and equipment(1,212,537)(1,039,863)
Purchases of marketable securities and restricted marketable securities(2,014,764)(3,220,467)
Proceeds from sales and maturities of marketable securities
1,897,997 3,996,439 
Acquisitions, net of cash acquired— (35,739)
Other investing activities(12,617)— 
Net cash used in investing activities
(1,341,921)(299,630)
Cash flows from financing activities:
Proceeds from borrowings under debt arrangements, net of issuance costs227,654 307,214 
Repayment of debt(205,821)— 
Payments of tax withholdings for restricted shares(20,144)(31,100)
Contingent consideration payment and other financing activities
(7,568)— 
Net cash (used in) provided by financing activities
(5,879)276,114 
Effect of exchange rate changes on cash, cash equivalents, restricted cash, and restricted cash equivalents(2,805)(855)
Net (decrease) increase in cash, cash equivalents, restricted cash, and restricted cash equivalents
(943,602)16,780 
Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of the period1,965,069 1,493,462 
Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of the period$1,021,467 $1,510,242 
Supplemental disclosure of noncash investing and financing activities:  
Property, plant and equipment acquisitions funded by liabilities$264,480 $185,064 
Proceeds to be received from asset-based government grants
$159,490 $152,458 
Acquisitions funded by contingent consideration
$11,000 $18,500 

See accompanying notes to these condensed consolidated financial statements.
6
FIRST SOLAR, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of First Solar, Inc. and its subsidiaries in this Quarterly Report have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). Accordingly, these interim financial statements do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. In the opinion of First Solar management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement have been included. Certain prior period balances have been reclassified to conform to the current period presentation.

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Despite our intention to establish accurate estimates and reasonable assumptions, actual results could differ materially from such estimates and assumptions. Operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024 or for any other period. The condensed consolidated balance sheet at December 31, 2023 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These interim financial statements and notes should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2023 included in our Annual Report on Form 10-K, which has been filed with the SEC.

Unless expressly stated or the context otherwise requires, the terms “the Company,” “we,” “us,” “our,” and “First Solar” refer to First Solar, Inc. and its consolidated subsidiaries, and the term “condensed consolidated financial statements” refers to the accompanying unaudited condensed consolidated financial statements contained in this Quarterly Report.

2. Cash, Cash Equivalents, and Marketable Securities

Cash, cash equivalents, and marketable securities consisted of the following at September 30, 2024 and December 31, 2023 (in thousands):
September 30,
2024		December 31,
2023
Cash and cash equivalents:
Cash$602,749 $841,310 
Money market funds402,381 1,105,684 
Total cash and cash equivalents1,005,130 1,946,994 
Marketable securities:
Foreign debt— 34,895 
U.S. debt8,822 44,089 
Time deposits255,869 76,511 
Total marketable securities264,691 155,495 
Total cash, cash equivalents, and marketable securities$1,269,821 $2,102,489 

7
The following table provides a reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents reported within our condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023 to the total of such amounts as presented in the condensed consolidated statements of cash flows (in thousands):
Balance Sheet Line ItemSeptember 30,
2024		December 31,
2023
Cash and cash equivalentsCash and cash equivalents$1,005,130 $1,946,994 
Restricted cash – current
Other current assets8,262 8,262 
Restricted cash – noncurrent
Other assets3,612 3,621 
Restricted cash equivalents – noncurrentOther assets4,463 6,192 
Total cash, cash equivalents, restricted cash, and restricted cash equivalents$1,021,467 $1,965,069 

During the nine months ended September 30, 2024, we sold marketable securities for proceeds of $67.5 million and realized a gain of less than $0.1 million on such sales. During the nine months ended September 30, 2023, we sold marketable securities for proceeds of $34.9 million and realized a loss of less than $0.1 million on such sales. See Note 8. “Fair Value Measurements” to our condensed consolidated financial statements for information about the fair value of our marketable securities.

The following tables summarize the unrealized gains and losses related to our available-for-sale marketable securities, by major security type, as of September 30, 2024 and December 31, 2023 (in thousands):
 As of September 30, 2024
Amortized
Cost		Unrealized
Gains		Unrealized
Losses		Allowance for Credit LossesFair
Value
U.S. debt$10,000 $— $1,178 $— $8,822 
Time deposits255,869 — — — 255,869 
Total$265,869 $— $1,178 $— $264,691 
 As of December 31, 2023
Amortized
Cost		Unrealized
Gains		Unrealized
Losses		Allowance for Credit LossesFair
Value
Foreign debt$35,000 $— $91 $14 $34,895 
U.S. debt45,625 88 1,614 10 44,089 
Time deposits76,533 — — 22 76,511 
Total$157,158 $88 $1,705 $46 $155,495 

The contractual maturities of our marketable securities as of September 30, 2024 were as follows (in thousands):
Fair
Value
Within one year
$255,869 
After one year through five years
4,731 
After five years through ten years
4,091 
Total$264,691 

8
3. Restricted Marketable Securities

Restricted marketable securities consisted of the following as of September 30, 2024 and December 31, 2023 (in thousands):
 
 
September 30,
2024		December 31,
2023
Foreign government obligations$52,368 $51,229 
Supranational debt23,350 15,339 
U.S. debt116,157 113,326 
U.S. government obligations19,255 18,416 
Total restricted marketable securities$211,130 $198,310 

Our restricted marketable securities represent long-term investments to fund the estimated future cost of collecting and recycling modules covered under our solar module collection and recycling program. We have established a trust under which funds are put into custodial accounts with an established and reputable bank, for which First Solar, Inc.; First Solar Malaysia Sdn. Bhd.; and First Solar Manufacturing GmbH are grantors. As of September 30, 2024 and December 31, 2023, such custodial accounts also included noncurrent restricted cash and cash equivalents balances of $4.5 million and $6.2 million, respectively, which were reported within “Other assets.” Trust funds may be disbursed for qualified module collection and recycling costs (including capital and facility related recycling costs), payments to customers for assuming collection and recycling obligations, and reimbursements of any overfunded amounts. Investments in the trust must meet certain investment quality criteria comparable to highly rated government or agency bonds. As necessary, we fund any incremental amounts for our estimated collection and recycling obligations on an annual basis based on the estimated costs of collecting and recycling covered modules, estimated rates of return on our restricted marketable securities, and an estimated solar module life of 25 years, less amounts already funded in prior years. During the nine months ended September 30, 2024, we purchased $7.9 million of restricted marketable securities as part of our ongoing management of the custodial accounts.

See Note 8. “Fair Value Measurements” to our condensed consolidated financial statements for information about the fair value of our restricted marketable securities. The following tables summarize the unrealized gains and losses related to our restricted marketable securities, by major security type, as of September 30, 2024 and December 31, 2023 (in thousands):
 As of September 30, 2024
Amortized
Cost		Unrealized
Gains		Unrealized
Losses		Allowance for Credit LossesFair
Value
Foreign government obligations$65,336 $— $12,968 $— $52,368 
Supranational debt25,405 3 2,058 — 23,350 
U.S. debt145,113 — 28,956 — 116,157 
U.S. government obligations24,391 — 5,136 — 19,255 
Total$260,245 $3 $49,118 $— $211,130 
 As of December 31, 2023
Amortized
Cost		Unrealized
Gains		Unrealized
Losses		Allowance for Credit LossesFair
Value
Foreign government obligations$65,202 $— $13,963 $10 $51,229 
Supranational debt17,688 — 2,349 — 15,339 
U.S. debt146,484 — 33,129 29 113,326 
U.S. government obligations24,460 — 6,039 5 18,416 
Total$253,834 $— $55,480 $44 $198,310 

As of September 30, 2024, the contractual maturities of these securities were between 6 years and 15 years.
9
4. Consolidated Balance Sheet Details

Accounts receivable trade, net

Accounts receivable trade, net consisted of the following at September 30, 2024 and December 31, 2023 (in thousands):
 September 30,
2024		December 31,
2023
Accounts receivable trade, gross$762,746 $662,390 
Allowance for credit losses(608)(1,614)
Accounts receivable trade, net$762,138 $660,776 

Inventories

Inventories consisted of the following at September 30, 2024 and December 31, 2023 (in thousands):
 September 30,
2024		December 31,
2023
Raw materials$486,156 $478,138 
Work in process120,050 78,463 
Finished goods914,098 530,197 
Inventories$1,520,304 $1,086,798 
Inventories – current$1,250,629 $819,899 
Inventories – noncurrent$269,675 $266,899 

Other current assets

Other current assets consisted of the following at September 30, 2024 and December 31, 2023 (in thousands):
 September 30,
2024		December 31,
2023
Spare maintenance materials and parts$201,626 $148,218 
Indirect tax receivables113,463 65,301 
Prepaid expenses74,986 62,480 
Operating supplies50,636 43,995 
Prepaid income taxes25,077 7,064 
Insurance receivable for accrued litigation (1)21,800 21,800 
Restricted cash8,262 8,262 
Derivative instruments (2)2,228 1,778 
Other30,778 33,002 
Other current assets$528,856 $391,900 
——————————
(1)See Note 10. “Commitments and Contingencies” to our condensed consolidated financial statements for discussion of our legal proceedings.

(2)See Note 6. “Derivative Financial Instruments” to our condensed consolidated financial statements for discussion of our derivative instruments.

10
Property, plant and equipment, net

Property, plant and equipment, net consisted of the following at September 30, 2024 and December 31, 2023 (in thousands):
 September 30,
2024		December 31,
2023
Land$39,054 $35,364 
Buildings and improvements 1,581,512 1,037,421 
Machinery and equipment 4,438,782 3,593,347 
Office equipment and furniture179,766 161,187 
Leasehold improvements40,330 40,084 
Construction in progress1,022,891 1,223,998 
Property, plant and equipment, gross7,302,335 6,091,401 
Accumulated depreciation(1,976,214)(1,694,116)
Property, plant and equipment, net$5,326,121 $4,397,285 

Depreciation of property, plant and equipment was $107.1 million and $287.2 million for the three and nine months ended September 30, 2024, respectively, and $80.7 million and $223.5 million for the three and nine months ended September 30, 2023, respectively.

Other assets

Other assets consisted of the following at September 30, 2024 and December 31, 2023 (in thousands):
 September 30,
2024		December 31,
2023
Advance payments for raw materials$257,171 $204,370 
Lease assets (1)147,669 101,468 
Income tax receivables87,025 68,591 
Prepaid expenses36,076 23,954 
Project assets28,252 28,430 
Restricted cash equivalents4,463 6,192 
Restricted cash3,612 3,621 
Other (2)51,498 41,978 
Other assets$615,766 $478,604 
——————————
(1)See Note 7. “Leases” to our condensed consolidated financial statements for discussion of our lease arrangements.

(2)In November 2023, First Solar entered into a power purchase agreement with Cleantech Solar (“Cleantech”), a leading provider of renewable energy solutions in India and Southeast Asia. Under the agreement, Cleantech plans to construct certain photovoltaic (“PV”) solar and wind generating assets, which are expected to supply electricity to our manufacturing facility in India.

During 2024, we purchased ownership interests in two subsidiaries of Cleantech for $7.9 million. These subsidiaries own certain of the generation assets that are expected to supply our facility, and we account for our investments in these subsidiaries using the equity method. During the nine months ended September 30, 2024, we recognized $27.3 million of revenue from module sales of 108 megawatts to these subsidiaries. As of September 30, 2024, we had also received advance payments of $1.1 million from one of these subsidiaries for future module sales.

11
Accrued expenses

Accrued expenses consisted of the following at September 30, 2024 and December 31, 2023 (in thousands):
 September 30,
2024		December 31,
2023
Accrued property, plant and equipment$215,984 $210,233 
Accrued freight91,995 58,494 
Product warranty liability (1)54,245 5,920 
Accrued inventory 48,008 101,161 
Accrued compensation and benefits29,618 55,960 
Accrued other taxes28,722 26,781 
Accrued interest3,811 11,011 
Other48,452 55,269 
Accrued expenses$520,835 $524,829 
——————————
(1)See Note 10. “Commitments and Contingencies” to our condensed consolidated financial statements for discussion of our “Product Warranties.”

Other current liabilities

Other current liabilities consisted of the following at September 30, 2024 and December 31, 2023 (in thousands):
 September 30,
2024		December 31,
2023
Accrued litigation (1)$21,800 $21,800 
Lease liabilities (2)13,313 10,358 
Derivative instruments (3)3,071 1,744 
Contingent consideration (4)— 7,500 
Other6,069 798 
Other current liabilities$44,253 $42,200 
——————————
(1)See Note 10. “Commitments and Contingencies” to our condensed consolidated financial statements for discussion of our legal proceedings.

(2)See Note 7. “Leases” to our condensed consolidated financial statements for discussion of our lease arrangements.

(3)See Note 6. “Derivative Financial Instruments” to our condensed consolidated financial statements for discussion of our derivative instruments.

(4)See Note 10. “Commitments and Contingencies” to our condensed consolidated financial statements for discussion of our contingent consideration arrangements.

12
Other liabilities

Other liabilities consisted of the following at September 30, 2024 and December 31, 2023 (in thousands):
 September 30,
2024		December 31,
2023
Lease liabilities (1)$99,248 $53,725 
Deferred tax liabilities, net52,937 42,771 
Other taxes payable35,175 39,431 
Product warranty liability (2)16,440 19,571 
Contingent consideration (3)11,000 11,000 
Other13,338 14,212 
Other liabilities$228,138 $180,710 
——————————
(1)See Note 7. “Leases” to our condensed consolidated financial statements for discussion of our lease arrangements.

(2)See Note 10. “Commitments and Contingencies” to our condensed consolidated financial statements for discussion of our “Product Warranties.”

(3)See Note 10. “Commitments and Contingencies” to our condensed consolidated financial statements for discussion of our contingent consideration arrangements.

5. Government Grants

Government grants represent benefits provided by federal, state, or local governments that are not subject to the scope of Accounting Standards Codification (“ASC”) 740. We recognize a grant when we have reasonable assurance that we will comply with the grant’s conditions and that the grant will be received. Government grants whose primary condition is the purchase, construction, or acquisition of a long-lived asset are considered asset-based grants and are recognized as a reduction to such asset’s cost basis, which reduces future depreciation. Other government grants not related to long-lived assets are considered income-based grants, which are recognized as a reduction to the related cost of activities that generated the benefit.

The following table presents the benefits recognized from asset-based government grants in our condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023 (in thousands):

Balance Sheet Line ItemSeptember 30,
2024		December 31,
2023
Property, plant and equipment, net$153,668 $146,348 
Other assets5,822 5,860 

In February 2021, the state government of Tamil Nadu, India granted First Solar certain incentives associated with the construction of our first manufacturing facility in the country. Among other things, such incentives provide a 24% subsidy for eligible capital investments, contingent upon meeting certain minimum investment and employment commitments. The capital subsidy funding application process begins in the fiscal year following the initial period of module production and is expected to be paid in six annual installments thereafter. The timing of cash receipts is subject to the completion of audit certifications, funding applications by First Solar, and review by state government authorities. Module production in India began during the year ended December 31, 2023. We expect to submit initial funding applications by the end of 2024. Such credit is reflected on our condensed consolidated balance sheets within “Government grants receivable.”

13
The following table presents the benefits recognized from income-based government grants in our condensed consolidated statements of operations for the three and nine months ended September 30, 2024 and 2023 (in thousands):
Three Months Ended
September 30,		Nine Months Ended
September 30,
Income Statement Line Item2024202320242023
Cost of sales$266,501 $204,623 $719,508 $429,744 
Research and development— — 4,000 — 
Production start-up
484 — 484 — 

In August 2022, the U.S. President signed into law the Inflation Reduction Act of 2022 (“IRA”). Among other things, the IRA offers a tax credit, pursuant to Section 45X of the Internal Revenue Code (“IRC”), for solar modules and solar module components manufactured in the United States and sold to third parties. Such credit may be refundable by the Internal Revenue Service (“IRS”) or transferable to a third party and is available from 2023 to 2032, subject to phase down beginning in 2030. For eligible components, the credit is equal to (i) $12 per square meter for a PV wafer, (ii) 4 cents multiplied by the capacity of a PV cell, and (iii) 7 cents multiplied by the capacity of a PV module. Based on the current form factor of our modules, we expect to qualify for a credit of approximately 17 cents per watt for each module produced in the United States and sold to a third party. We recognize such credit as a reduction to “Cost of sales” in the period the modules are sold to customers. Such credit is also reflected on our condensed consolidated balance sheets within “Government grants receivable.”

In December 2023, we entered into an agreement with Fiserv, Inc. (“Fiserv”) for the sale of $687.2 million of Section 45X tax credits we generated during 2023 for aggregate cash proceeds of $659.7 million. We received the full cash proceeds during the nine months ended September 30, 2024.

6. Derivative Financial Instruments

As a global company, we are exposed in the normal course of business to various risks, including foreign currency and commodity price risks, that could affect our financial position, results of operations, and cash flows. We may use derivative instruments to hedge against these risks and only hold such instruments for hedging purposes, not for speculative or trading purposes.

Depending on the terms of the specific derivative instruments and market conditions, some of our derivative instruments may be assets and others liabilities at any particular balance sheet date. We report all of our derivative instruments at fair value and account for changes in the fair value of derivative instruments within “Accumulated other comprehensive loss” if the derivative instruments qualify for hedge accounting. For those derivative instruments that do not qualify for hedge accounting (i.e., “economic hedges”), we record the changes in fair value directly to earnings. See Note 8. “Fair Value Measurements” to our condensed consolidated financial statements for information about the techniques we use to measure the fair value of our derivative instruments.

14
The following tables present the fair values of derivative instruments included in our condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023 (in thousands):
 September 30, 2024
Other Current AssetsOther Current Liabilities
Derivatives designated as hedging instruments:
Commodity swap contracts$— $469 
Total derivatives designated as hedging instruments$— $469 
Derivatives not designated as hedging instruments:
Foreign exchange forward contracts$2,228 $2,602 
Total derivatives not designated as hedging instruments$2,228 $2,602 
Total derivative instruments$2,228 $3,071 
 December 31, 2023
Other Current AssetsOther Current Liabilities
Derivatives designated as hedging instruments:
Commodity swap contracts$— $344 
Total derivatives designated as hedging instruments$— $344 
Derivatives not designated as hedging instruments:
Foreign exchange forward contracts$1,778 $1,400 
Total derivatives not designated as hedging instruments$1,778 $1,400 
Total derivative instruments$1,778 $1,744 

The following table presents the pretax amounts related to derivative instruments designated as cash flow hedges affecting accumulated other comprehensive income (loss) and our condensed consolidated statements of operations for the nine months ended September 30, 2024 and 2023 (in thousands):
Commodity Swap Contracts
Balance as of December 31, 2023$(1,493)
Amounts recognized in other comprehensive income (loss)(1,094)
Amount reclassified to cost of sales1,715 
Balance as of September 30, 2024$(872)
Balance as of December 31, 2022$(7,242)
Amounts recognized in other comprehensive income (loss)(962)
Amount reclassified to cost of sales5,576 
Balance as of September 30, 2023$(2,628)

15
The following table presents the effect of derivative instruments not designated as hedges on our condensed consolidated statements of operations for the three and nine months ended September 30, 2024 and 2023 (in thousands):
Amount of Gain (Loss) Recognized in Income Statement
Three Months Ended
September 30,		Nine Months Ended
September 30,
Income Statement Line Item2024202320242023
Foreign exchange forward contractsForeign currency loss, net$12,759 $4,533 $(3,049)$(9,568)

Foreign Currency Risk

Transaction Exposure and Economic Hedging

Many of our subsidiaries have assets and liabilities (primarily cash, receivables, deferred taxes, payables, accrued expenses, lease liabilities, debt, and solar module collection and recycling liabilities) that are denominated in currencies other than the subsidiaries’ functional currencies. Changes in the exchange rates between the functional currencies of our subsidiaries and the other currencies in which these assets and liabilities are denominated will create fluctuations in our reported condensed consolidated statements of operations. We may enter into foreign exchange forward contracts or other financial instruments to economically hedge assets and liabilities against the effects of currency exchange rate fluctuations. The gains and losses on such foreign exchange forward contracts will economically offset all or part of the transaction gains and losses that we recognize in earnings on the related foreign currency denominated assets and liabilities.

We also enter into foreign exchange forward contracts to economically hedge balance sheet and other exposures related to transactions between certain of our subsidiaries and transactions with third parties. Such contracts are considered economic hedges and do not qualify for hedge accounting. Accordingly, we recognize gains or losses from the fluctuations in foreign exchange rates and the fair value of these derivative contracts in “Foreign currency loss, net” on our condensed consolidated statements of operations.

As of September 30, 2024 and December 31, 2023, the notional values of our foreign exchange forward contracts that do not qualify for hedge accounting were as follows (notional amounts and U.S. dollar equivalents in millions):
September 30, 2024
TransactionCurrencyNotional AmountUSD Equivalent
SellCanadian dollarCAD 4.2$3.1
PurchaseEuro€155.5$173.6
SellEuro€8.6$9.6
PurchaseIndian rupeeINR 18,055.0$215.7
SellIndian rupeeINR 83,157.0$993.3
PurchaseJapanese yen¥1,464.0$10.3
SellJapanese yen¥563.6$4.0
PurchaseMalaysian ringgitMYR 193.0$46.8
SellMalaysian ringgitMYR 17.0$4.1
SellMexican pesoMXN 34.6$1.8
PurchaseSingapore dollarSGD 14.1$11.0
SellSingapore dollarSGD 19.7$15.4
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December 31, 2023
TransactionCurrencyNotional AmountUSD Equivalent
SellCanadian dollarCAD 4.2$3.2
SellChilean pesoCLP 1,372.6$1.6
PurchaseEuro€98.3$108.7
SellEuro€14.1$15.6
SellIndian rupeeINR 62,967.4$756.9
PurchaseJapanese yen¥1,053.6$7.5
SellJapanese yen¥705.2$5.0
PurchaseMalaysian ringgitMYR 160.7$35.0
SellMexican pesoMXN 34.6$2.0
PurchaseSingapore dollarSGD 6.5$4.9

Commodity Price Risk

From time to time, we use commodity swap contracts to mitigate our exposure to commodity price fluctuations for certain raw materials used in the production of our modules. During the year ended December 31, 2022, we entered into various commodity swap contracts to hedge a portion of our forecasted cash flows for purchases of aluminum frames between July 2022 and December 2023. Such swaps had an aggregate initial notional value based on metric tons of forecasted aluminum purchases, equivalent to $70.5 million, and entitled us to receive a three-month average London Metals Exchange price for aluminum while requiring us to pay certain fixed prices. The notional amount of the commodity swap contracts proportionately adjusted with forecasted purchases of aluminum frames.

During the nine months ended September 30, 2024, we entered into various commodity swap contracts to hedge a portion of our forecasted cash flows for purchases of steel between April 2024 and December 2024. Such swaps had an aggregate initial notional value based on short tons of forecasted steel purchases, equivalent to $7.6 million, and entitle us to receive the price based on the U.S. Midwest Hot-Rolled Coil Steel Index while requiring us to pay certain fixed prices. The notional amount of the commodity swap contracts proportionately adjusts with forecasted purchases of steel. As of September 30, 2024, the notional value associated with these contracts was $0.2 million.

These commodity swap contracts qualify for accounting as cash flow hedges in accordance with ASC 815, and we designated them as such. We report unrealized gains or losses on such contracts in “Accumulated other comprehensive loss” and subsequently reclassify applicable amounts into earnings when the hedged transactions occur and impact earnings. We determined that these derivative financial instruments were highly effective as cash flow hedges as of September 30, 2024 and December 31, 2023. In the following 12 months, we expect to reclassify into earnings $0.9 million of net unrealized losses related to these commodity swap contracts that are included in “Accumulated other comprehensive loss” at September 30, 2024 as we realize the earnings effects of the related forecasted transactions.

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7. Leases

Our lease arrangements include our corporate and administrative offices, warehouses, land for our manufacturing facilities, and certain of our manufacturing equipment. Such leases primarily relate to assets located in the United States, Malaysia, India, and Vietnam.

The following table presents certain quantitative information related to our lease arrangements for the three and nine months ended September 30, 2024 and 2023, and as of September 30, 2024 and December 31, 2023 (in thousands):
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Finance lease cost:
Amortization of right-of-use assets$281$—$517$—
Interest on lease liabilities426—910—
Operating lease cost3,7492,98010,1988,931
Variable lease cost7765122,2082,528
Short-term lease cost208150686318
Total lease cost$5,440$3,642$14,519$11,777
Cash paid for amounts included in the measurement of:
Operating lease liabilities$10,074$8,513
Finance lease liabilities264—
Lease assets obtained in exchange for:
Operating lease liabilities$41,772$1,791
Finance lease liabilities13,243—
September 30, 2024December 31, 2023
Operating LeasesFinance
Leases		Operating LeasesFinance
Leases
Lease assets$117,909$29,760$84,419$17,049
Lease liabilities – current
12,1011,21210,30751
Lease liabilities – noncurrent
69,46529,78336,66217,063
Weighted-average remaining lease term9 years28 years5 years40 years
Weighted-average discount rate5.5 %6.6 %5.2 %5.4 %

As of September 30, 2024, the future payments associated with our lease liabilities were as follows (in thousands):
Operating LeasesFinance
Leases
Remainder of 2024$4,018 $419 
202515,640 1,929 
202614,000 2,798 
202711,342 2,842 
202811,083 2,895 
20299,389 2,976 
Thereafter41,542 55,418 
Total future payments107,014 69,277 
Less: interest(25,448)(38,282)
Total lease liabilities$81,566 $30,995 
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8. Fair Value Measurements

The following is a description of the valuation techniques that we use to measure the fair value of assets and liabilities that we measure and report at fair value on a recurring basis:

•Cash Equivalents and Restricted Cash Equivalents. At September 30, 2024 and December 31, 2023, our cash equivalents and restricted cash equivalents consisted of money market funds. We value our cash equivalents and restricted cash equivalents using observable inputs that reflect quoted prices for securities with identical characteristics and classify the valuation techniques that use these inputs as Level 1.

•Marketable Securities and Restricted Marketable Securities. At September 30, 2024 and December 31, 2023, our marketable securities consisted of foreign debt, U.S. debt, and time deposits, and our restricted marketable securities consisted of foreign and U.S. government obligations, supranational debt, and U.S. debt. We value our marketable securities and restricted marketable securities using observable inputs that reflect quoted prices for securities with identical characteristics or quoted prices for securities with similar characteristics and other observable inputs (such as interest rates that are observable at commonly quoted intervals). Accordingly, we classify the valuation techniques that use these inputs as either Level 1 or Level 2 depending on the inputs used. We also consider the effect of our counterparties’ credit standing in these fair value measurements.

•Derivative Assets and Liabilities. At September 30, 2024 and December 31, 2023, our derivative assets and liabilities consisted of foreign exchange forward contracts involving major currencies and commodity swap contracts involving major commodity prices. Since our derivative assets and liabilities are not traded on an exchange, we value them using standard industry valuation models. As applicable, these models project future cash flows and discount the amounts to a present value using market-based observable inputs, including credit risk, foreign exchange rates, forward and spot prices for currencies, and forward prices for commodities. These inputs are observable in active markets over the contract term of the derivative instruments we hold, and accordingly, we classify the valuation techniques as Level 2. In evaluating credit risk, we consider the effect of our counterparties’ and our own credit standing in the fair value measurements of our derivative assets and liabilities, respectively.

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At September 30, 2024 and December 31, 2023, the fair value measurements of our assets and liabilities measured on a recurring basis were as follows (in thousands):
  Fair Value Measurements at Reporting
Date Using
 
 
 
 
 
 		September 30,
2024		Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Assets:
Cash equivalents:
Money market funds$402,381 $402,381 $— $— 
Restricted cash equivalents:
Money market funds4,463 4,463 — — 
Marketable securities:
U.S. debt8,822 — 8,822 —