First Solar, Inc.

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. With me today are 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. 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 presentation for more complete description. It is now my pleasure to introduce Mark Widmer, 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 our 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 to a hyperscaler. An investment in technology, R&D infrastructure, and manufacturing expansions, we continue to solidify our market position through strong execution. 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. Beginning on slide three, I will share some key highlights for the second quarter. From a commercial perspective, we continued our disciplined approach to bookings. Since our last earnings call, we have secured a net 0.9 gigawatts of bookings with an ASP of 31.6 cents per watt, excluding adjusters where applicable, or 33.4 cents per watt, assuming the realization of adjusters where applicable, and in each case, excluding India domestic sales. This includes a 0.4 gigawatt debooking related to a termination for convenience exercise by one of our European power and utilities customers who is selling a portfolio of U.S. development assets as referenced 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 order stretching through 2030. From a technology perspective, since our Q1 earnings call, we have established a new world record Cattell 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 cure program is expected to increase energy production in real-world conditions through improved module temperature coefficient, bifaciality, and degradation rate. Additionally, we have announced the ownership of certain issued and pending patents related to the manufacturing of Topcon crystalline silicon solar cells. 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 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 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. The completion of this phase expands our manufacturing capacity in this 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 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, achieving this in approximately 24 months from the investment decision. 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 and a manufacturing sandbox, freeing up our commercial production lines. 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. 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, We continue to progress our technology roadmap and during the quarter established a new world record Cattell 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 pull-in 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. Additionally, we announced the ownership of issued impending patents related to the manufacturing of Topcon crystalline 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. This portfolio, which includes issued patents across various jurisdictions, including the US, and pending patents in the EU and Japan, has validity extending to 2030. We are mindful that there have recently been a number of top 10 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 crystalline silicon sole manufacturers for potential infringement. If infringement is discovered, we intend to challenge the ability to manufacture, assemble, and sell infringing Topcon 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. Leading on slide six, as of December 31st, 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. 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 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. 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 were approximately two cents per watt, the majority of which would be recognized between 2025 and 2028. 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 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 under the sales contract upwards or downwards, and for increases in sales rate or applicable aluminum or steel commodity price changes. 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 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 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 noted earlier. As a reminder, signed contracts in India will not be recognized as bookings until we've received full security against the offtake. Note that we anticipate reducing our opportunities that are 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 who is in the process of selling this business. 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. And given the uncertainty related to the policy environment due to the upcoming U.S. 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. 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, increase of $0.2 billion compared to the first quarter. 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, and this increase was primarily due to a high mix of modules sold from our U.S. factories, which led to $255 million in Section 45X tax credits in the second quarter, the aforementioned contract termination payment obligation, reduction of warehousing and logistics costs, and continued reductions in production costs. 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. This increase was 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. Our second quarter operating income was $373 million, which included depreciation, amortization, and accretion of $97 million, RAM costs of $6 million, production startup expense of $27 million, and share-based compensation expense of $8 million. Second quarter other income was $5 million. Tax expense for 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 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. A combination of the aforementioned items led to second quarter earnings per diluted share of $3.25. Next, turn to slide 9 to discuss select balance sheet items and summary cash flow information. 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 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 helped support the ramp for our new plant in the region. 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 expenditures were $365 million during the period. Continuing on 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 range. 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. 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 diluted share profile of approximately 40% in the third quarter and 60% in the fourth quarter. 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. First of all, 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 our full year 2024 guidance. I'll now hand the call back to Mark to continue the business update.