First Solar, Inc. (NASDAQ:FSLR) Q4 2022 Earnings Call Transcript

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It wasn’t a significant amount of the few 100 megawatts. But the ASP uplift that we’re getting there is still in that range of around $0.03 to $0.04. So we are seeing good momentum there. And we’re out aggressively talking 2024 and 2025 right now with customers to get incremental ASP uplift for domestic production that we would provide our customers. So that’s an ongoing activity from that standpoint. And Alex may have the actual gigawatts from a revenue standpoint.

Alex Bradley: Yes. So Q4 we shipped 2.3, but from a solar volume it was 3.2. So that takes full year numbers. So 2022, we ended up shipping about 9.2 from a perspective, 8.9, yes.

Operator: And our next question will come from Brian Lee of Goldman Sachs.

Brian Lee: Hey guys. Good afternoon. Kudos on the quarter and the strong guidance for the year. I guess, one question we’ve been getting a lot from investors lately is just given your business is shifting to more of these long-term, multi-year contracts versus spot. Can you kind of remind us how your deposits work on those contracts? And then what sort of recourse, you are setting up €“ when you set up these multi-year deals? And then I guess what impact, if any €“ are you seeing in discussions or pricing from expectations that crystal silicon panel pricing and poly will continue to fall here in the medium term. And then just maybe as I squeeze in a follow up, any thoughts around to Phil’s question around the pricing, anything you are seeing or hearing or discussing with customers and partners around domestic content requirements and your ability to get that in your price? Thanks guys.

Mark Widmar: Yes, so Brian, on the deposits, we typically take somewhere up to 20% in deposit. We don’t necessarily take all of that in cash, but we do ask some cash. We’re also depending on the credit worthiness of the counterparty and the size of the deal, willing to take some of that in other liquid security healthy surety bond, potentially impairing guarantees. If it gets to be very large deals and multi-year deals, and that number would get very large. We sometimes take security and then roll that through the deal. So it continues to stay with us until we get towards the end of that deal. If you look on the balance sheet as of year end, you’re going to see something, a region of $1.2 billion of customer deposits in terms of future bookings on the balance sheet side of today.

And we would expect that to rise as we go through the year. There will be some of that recognized as revenue. So it’ll come off being deferred revenue, but given the bookings trajectory and the timing of deposits placed from some of the deals that we’ve already signed in the last year, we would expect that number to rise through the year.

Alex Bradley: Yes. Brian, as it relates to the concerns around customer’s views around where silicon pricing will go, I mean, I think you’re going to have €“ you have some customers which are largely ones that we’re not obviously negotiating and closing deals with that will kind of take their leading indicators from what they’re seeing with Chinese excess capacity that’s being added and poly prices which have kind of lift sort of around. I think they dropped pretty significantly, then they kind of stepped up back to, I think they’re somewhere in the $30 or something like that per kilogram, which is down slightly from year end. But I think they were trending down to in the 20s, low 20s, and they bounced back from there. So some customers are taking their clues from there.

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