Solar panel manufacturer First Solar (NASDAQ: FSLR) fell short of the market’s revenue expectations in Q3 2026, with revenue falling 22.8% year on year to $1.23 billion. The company’s full-year revenue guidance of $4.75 billion at the midpoint came in 5.7% below analysts’ consensus estimates. Its GAAP profit of $5.30 per share was 14.3% above analysts’ consensus estimates.
For more on First Solar, read our full research report, available free.
First Solar (FSLR) Q3 2026 highlights:
- Revenue $1.23 billion vs S&P analysts’ consensus estimates of $1.31 billion (22.8% year-on-year decline, 6.2% miss)
- EPS (GAAP) $5.30 vs analysts’ consensus estimates of $4.64 (14.3% beat)
- Adjusted EBITDA $744 million vs analysts’ consensus estimates of $713.2 million (60.4% margin, 4.3% beat)
- Revenue guidance The company lowered its revenue guidance for the full year to $4.75 billion at the midpoint from $5.05 billion, a 5.9% decrease
- EBITDA guidance $2.65 billion at the midpoint for the full year, in line with analysts’ consensus estimates
- Operating margin 44.4%, up from 29.2% in the same quarter last year
- Free cash flow -$531.2 million, down from $1.07 billion in the same quarter last year
- Market capitalization $18.95 billion
Revenue growth
A company’s long-term revenue performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years. First Solar’s 13.8% annualized revenue growth over the last five years was strong. Its growth surpassed the average industrials company and shows its offerings resonate with customers.
Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. First Solar’s annualized revenue growth of 14.1% over the last two years aligns with its five-year trend, suggesting its demand was predictably strong. 
This quarter, First Solar missed Wall Street’s consensus estimates and reported a rather uninspiring 22.8% year-on-year revenue decline, generating $1.23 billion of revenue.
Looking ahead, sell-side analysts expect revenue to grow 16.4% over the next 12 months, according to S&P, an improvement versus the last two years. This strong projection suggests its newer products and services will drive better revenue performance.
Operating margin
First Solar has performed well over the last five years. It demonstrated high profitability for an industrials business, with an average operating margin of 27.2%. That result is unsurprising given its favorable high gross margin baseline.
Looking at the trend in its profitability, First Solar’s operating margin rose by 30.2 percentage points over the last five years, as its revenue growth provided operating leverage.
In Q3, First Solar generated an operating margin of 44.4%, up 15.1 percentage points year on year. The increase was driven by stronger leverage on its cost of sales (not higher efficiency with its operating expenses), as indicated by its larger rise in gross margin.
Earnings per share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth. For example, a company could inflate its revenue through excessive spending on advertising and promotions.
First Solar’s EPS grew at a 32.5% compounded annual growth rate over the last five years, higher than its 13.8% annualized revenue growth. This indicates the company became more profitable on a per-share basis as it expanded.
A closer look at First Solar’s earnings helps explain the drivers of its performance. As noted earlier, First Solar’s operating margin expanded by 30.2 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 more recent period because it can provide insight into an emerging theme or development for the business.
For First Solar, its two-year annual EPS growth of 22% was lower than its five-year trend. Growth was still solid, but an acceleration would be welcome.
In Q3, First Solar reported EPS of $5.30, up from $4.24 in the same quarter last year. This comfortably cleared analysts’ consensus estimates, a positive result for shareholders. Over the next 12 months, Wall Street expects First Solar’s full-year EPS to grow 29.9% from $17.28 to $22.44, according to S&P.
Key takeaways from First Solar’s Q3 results
First Solar’s revenue fell short of Wall Street’s consensus estimates, and its full-year revenue guidance also missed expectations, making this a weaker quarter overall. EBITDA and EPS did beat consensus estimates, but those positives did not change the overall assessment. Shares fell 4% to $168.73 immediately after the results.
First Solar underperformed this quarter, but does that create an investment opportunity at the current price? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation when deciding whether to invest in this stock. For more on First Solar, read our full research report here (it’s free).
