Solar panel manufacturer First Solar (NASDAQ: FSLR) met Wall Streets revenue expectations in Q3 CY2025, with sales up 79.7% year on year to $1.59 billion. On the other hand, the company’s full-year revenue guidance of $5.08 billion at the midpoint came in 3.8% below analysts’ estimates. Its GAAP profit of $4.24 per share was 1.9% below analysts’ consensus estimates.

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Company Overview

Headquartered in Arizona, First Solar (NASDAQ: FSLR) specializes in manufacturing solar panels and providing photovoltaic solar energy solutions.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Luckily, First Solar’s sales grew at a decent 7.6% compounded annual growth rate over the last five years. Its growth was slightly above the average industrials company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. First Solar’s annualized revenue growth of 26.4% over the last two years is above its five-year trend, suggesting its demand recently accelerated. First Solar recent performance stands out, especially when considering many similar Renewable Energy businesses faced declining sales because of cyclical headwinds.

This quarter, First Solar’s year-on-year revenue growth of 79.7% was magnificent, and its $1.59 billion of revenue was in line with Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 21.7% over the next 12 months, a deceleration versus the last two years. Still, this projection is admirable and implies the market sees success for its products and services.

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Operating Margin

First Solar has been a well-oiled machine over the last five years. It demonstrated elite profitability for an industrials business, boasting an average operating margin of 22.8%.

Looking at the trend in its profitability, First Solar’s operating margin rose by 11.9 percentage points over the last five years, as its sales growth gave it immense operating leverage.

In Q3, First Solar generated an operating margin profit margin of 29.2%, down 7 percentage points year on year. Since First Solar’s gross margin decreased more than its operating margin, we can assume its recent inefficiencies were driven more by weaker leverage on its cost of sales rather than increased marketing, R&D, and administrative overhead expenses.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

First Solar’s EPS grew at an astounding 44.2% compounded annual growth rate over the last five years, higher than its 7.6% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Diving into First Solar’s quality of earnings can give us a better understanding of its performance. As we mentioned earlier, First Solar’s operating margin declined this quarter but expanded by 11.9 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For First Solar, its two-year annual EPS growth of 71.6% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base.

In Q3, First Solar reported EPS of $4.24, up from $2.91 in the same quarter last year. Despite growing year on year, this print slightly missed analysts’ estimates, but we care more about long-term EPS growth than short-term movements. Over the next 12 months, Wall Street expects First Solar’s full-year EPS of $13.02 to grow 71%.

Key Takeaways from First Solar’s Q3 Results

We struggled to find many positives in these results as its full-year revenue and EPS guidance fell short of Wall Street’s estimates. By looking at industry peer Enphase's results, one could infer that the lower guidance was driven by demand pull-forward as customers raced to buy solar panels before the expiration of residential solar tax credits. Overall, the outlook could have been better, but the stock traded up 2.4% to $238.60 immediately after reporting.

Big picture, is First Solar a buy here and now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.