Good afternoon, everyone, and welcome to First Solar's First Quarter 2024 Earnings Call. This call is being webcast live on the Investors section of First Solar's website at investor.firstsolar.com. As a reminder, today's call is being recorded.

Good afternoon and thank you for joining us. Today, the company issued a press release announcing its first quarter 2024 financial results. A copy of the press release and associated presentation are available on our 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 and policy updates. Alex will discuss our bookings, pipeline, quarterly financial results and provide updated guidance. Following their remarks, we will open the call for questions. Please note, this call will include forward-looking statements that include 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 a more complete description. It is now my pleasure to introduce Mark Widmar, Chief Executive Officer.

Good afternoon and thank you for joining us today. We are pleased with our start to 2024, with good operating performance, selective year-to-date bookings of 2.7 gigawatts with an ASP over $0.31 per watt excluding adjusters or $0.327 per watt assuming the realization of technology adjusters and solid financial performance. We're also pleased with the developing foundations to enable our long-term goal of exiting this decade in a stronger position than we entered it, from increasing production of our most advantaged Series 7 module to expanding our manufacturing footprint, to the building of an R&D innovation center and perovskite development line that is expected to enable development of the next generation of disruptive solar technology. We are focused on the future of differentiation and sustainable growth. But while we continue to play the long game, we must acknowledge the current environment in the solar manufacturing industry, which remains in a state of heightened volatility driven by intentional structural overcapacity in China. As we previously said, our ability to play this long game is a direct result of our differentiated technology and business model. From a technological perspective, the contrast is clear between our unique proprietary cadmium telluride semiconductor technology and highly commoditized crystalline silicon modules. This difference has become increasingly apparent in light of the recently announced disputes concerning alleged infringement of TOPCon cell technology and intellectual property rights, which cast doubt on numerous crystalline silicon producers having the freedom to legally manufacture and sell this technology. From a business model and growth perspective, we are once again reminded of the value of our balanced approach to growth, liquidity and profitability. According to reports, large Chinese solar companies have warned of potential quality and reliability issues as manufacturers cut corners and the impact of the current oversupply environment and associated financial stress on R&D and innovation. By contrast, we continue to invest. We are on track to commission our R&D innovation center and a perovskite development line in Ohio in the second half of this year, representing a combined investment of nearly $0.5 billion. And we continue to optimize our products for energy efficiency and cost. In the face of overcapacity, the average large Chinese solar manufacturing facility reportedly had a record-low capacity utilization rate of 23% in February of this year. In contrast, supported by our large contracted backlog, our facilities were operating near nameplate capacity in the first quarter of this year. The Chinese solar industry has engaged in a race to the bottom with irrationally low market-distorting pricing that has caused even Chinese companies to call for intervention by the Chinese government to manage the pricing environment and end the financial hardship this is causing them. By contrast, we remain focused on a highly selective approach to forward contracting that provides optionality and healthy ASPs. We are not immune to the broader ramifications of the Chinese solar business model. However, we continue to focus on our points of differentiation, which aim to provide some resiliency in light of current industry challenges. We're also focused on policy and trade drivers that can counter anticompetitive and abusive market behaviors. There should be no doubt, we invite competition and free trade. All we continue to seek is that the competition and trade are practiced on a fair and level playing field. We believe this approach will help us to drive growth, navigate industry volatility and deliver enduring shareholder value. On Slide 3, I will share some highlights from the first quarter. From a commercial perspective, we continued our selective approach to building backlog underpinned by our cumulatively oversold position through 2026. Since our last earnings call approximately 9 weeks ago, we have booked 854 megawatts with an ASP of $0.301 per watt excluding adjusters where applicable. This brings our year-to-date net bookings to 2.7 gigawatts with an average ASP of $0.313 per watt excluding adjusters or $0.327 per watt assuming the realization of technology adjusters. Our total contracted backlog now stands at 78.3 gigawatts with orders stretching through 2030. From a manufacturing perspective, we are pleased with our solid Q1 performance, including producing a record 3.6 gigawatts of modules as a result of our relentless focus on manufacturing excellence. From a technology perspective, we are pleased with our CuRe module field test and have completed the UL and IEC certification process. We continue to anticipate launching CuRe at our lead line factory in Ohio in Q4 of this year. In parallel to preparing for launch, we continue to make progress on technical solutions that could enable accelerating CuRe's replication across our factories at a lower CapEx than assumed at our recent Analyst Day. Now Alex will provide a comprehensive overview of our first quarter 2024 financial results. I would like to highlight our ability to deliver strong performance in a market challenged by Chinese oversupply, which, in our view, validates our approach to long-term forward contracting.

Thanks, Mark. Moving on to Slide 5. As of December 31, 2023, our contracted backlog totaled 78.3 gigawatts with an aggregate value of $23.3 billion. Through March 31, 2024, we entered into an additional 2.7 gigawatts of contracts and recognized 2.7 gigawatts of volumes sold, resulting in a total backlog of 78.3 gigawatts with an aggregate value of $23.4 billion, which implies an ASP of approximately $0.299 per watt excluding adjusters. As we previously stated, given our diminished available supply, the long-dated time frame into which we're now selling, the need to align customer project visibility with our balanced approach to ASPs, payment security and other key contractual terms and uncertainty related to the policy environment and the upcoming U.S. election cycle, we expect to take advantage of our position of strength in our contracted backlog and be highly selective in our approach to new bookings this year. We will continue to forward contract with customers who prioritize long-term relationships and appropriately value our point of differentiation. The substantial portion of our overall backlog includes the opportunity to increase the base ASP through the application of adjusters if we are able to realize achievements within our current technology roadmap as to the expected timing of delivery for the product. At the end of the first quarter, we had approximately 40.2 gigawatts of contracted volume with these adjusters, which, if fully realized, could result in additional revenue of up to approximately $0.5 billion or approximately $0.01 per watt, the majority of which will be recognized between 2025 and 2027. This amount does not include potential adjustments, which are generally applicable to the total contracted backlog, both the ultimate module being delivered to the customer, which may adjust the ASP under the sales contract upward or downwards, and for increases in sales rate or applicable aluminum or steel commodity price changes. As reflected on Slide 6, our total pipeline of potential bookings remained strong with bookings opportunities of 72.8 gigawatts, an increase of approximately 6.3 gigawatts in the previous quarter. Our mid- to late-stage bookings opportunity decreased by approximately 2.6 gigawatts to 29.4 gigawatts and now includes 25.8 gigawatts in North America and 3.3 gigawatts in India. Included within our mid- to late-stage pipeline are 3.7 gigawatts of opportunities that are contracted subject to conditions precedent, which includes 1 gigawatt in India. As a reminder, signed contracts in India will not be recognized as bookings until we have received full security against the offtake. We're seeing meaningful increases in demand expectations driven in part by data center load growth. According to McKinsey, U.S. data center power consumption is expected to reach 35 gigawatts annually by 2030, and much of this growth is supplied by renewable energy given that hyperscalers like Apple, Google, Meta and Microsoft are committed to 24/7 use of carbon-free energy. We believe that First Solar is strongly positioned to supply this emerging sector given our advantaged technology and more sustainable product. Slide 7, I'll cover our financial results for the first quarter. Net sales in the first quarter were $794 million, a decrease of $365 million compared to the fourth quarter. The decrease in net sales was driven by an expected historical seasonal reduction in the Q1 volume of modules sold. Gross margin was 44% in the first quarter compared to 43% in the fourth quarter of 2023. This increase was primarily driven by a higher mix of modules sold from our U.S. factories, which qualify for Section 45X tax credits, partially offset by higher warehousing and logistics costs in India and the U.S. SG&A, R&D and production start-up expenses totaled $104 million in the first quarter, a decrease of approximately $7 million compared to the prior quarter. This decrease was primarily due to lower professional fees as we incurred certain costs to facilitate the sale of our 2023 Section 45X credits during the prior quarter, lower incentive compensation and the receipt of an R&D grant at our factories in Ohio. These reductions were partially offset by higher production start-up expenses for our Alabama factory and Ohio manufacturing footprint expansions as well as the reversal of certain credit losses in the prior quarter due to improved collections for our accounts receivables. Our first quarter operating income was $243 million, which included depreciation, amortization and accretion of $91 million, ramp costs of $12 million, production start-up expense of $15 million and share-based compensation expense of $7 million. The increase in other income and expense was primarily driven by the prior quarter impairment of our strategic investment in CubicPV. We recorded tax expense of $19 million in the first quarter compared to $27 million in the fourth quarter. The decrease in tax expense was largely driven by excess tax benefits associated with share-based compensation awards and lower pretax income. Combination of the aforementioned items led to first quarter earnings per diluted share of $2.20. Next, turn to Slide 8 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 $2 billion compared to $2.1 billion at the end of the prior quarter. This decrease was primarily attributable to capital expenditures associated with our new U.S. factories in Alabama and Louisiana and our Ohio capacity expansion, partially offset by operating cash flows from our module segment. Total debt at the end of the first quarter was $620 million, an increase of $60 million from the fourth quarter as a result of additional working capital facilities to support the ramp of our new India plant. Our net cash position decreased by approximately $0.2 billion to $1.4 billion as a result of the aforementioned factors. Cash flows from operations were $268 million in the first quarter, and capital expenditures were $413 million during the period. Continuing on Slide 9. Our full year 2024 volumes sold and P&L guidance is unchanged from our previous earnings and guidance call in late February. We're increasing our capital expenditures forecast by $0.1 billion with the intention of accelerating the CuRe conversion at our Vietnam facilities as well as at our third Perrysburg facility and with a view to advancing global fleet replication by more than 1 year from our assumptions at our recent Analyst Day, which could drive incremental upside to the current estimate of additional revenue realizable through technology adjusters referenced earlier in the call. Our year-end 2024 net cash balance guidance range has been revised due to 4 factors: our selective accommodation of customer schedule shift requests, potential sale by a customer of a U.S. project development portfolio, our strategic approach to new bookings and higher CapEx. Firstly, as noted on our previous call, we have seen some requests from customers to shift delivery volume timing out as a function of project development delays. We continue to work with our customers to optimize delivery schedules for their contracted volumes to the extent we are able to accommodate. Secondly, consistent with the reports that some energy project developers are coming under investor pressure to pursue returns commensurate with those currently prevalent in fossil project development, they may therefore be examining their renewable procurement positions. We have indications that a customer is expecting to sell their U.S. solar development portfolio, and we understand that the potential buyer of these assets is a First Solar customer with an existing module framework agreement. We expect that the development timelines for the projects within this portfolio will be delayed, including as a result of the sales process, pushing construction schedules out of 2024. Because the potential sale of these assets involves an existing customer with a framework agreement covering the revised construction schedules and a portion of our backlog, the selling customer is among unlimited contracts with termination for convenience rights, and we expect that this right will be exercised in connection with this portfolio sale. As discussed on previous earnings calls, if this termination for convenience right is exercised, we will be owed a termination payment. We'd look to reallocate or resell these modules. Between selectively accommodating customer timing optimization requests and the expected termination for convenience by the aforementioned portfolio selling developer customer, we now expect a greater concentration of the shipments and sold volume in the second half of the year to be in Q4 versus Q3. As a result of this back ending of deliveries, we expect the timing of some cash collections previously assumed in Q4 2024 to now occur in Q1 of 2025. Thirdly, relating to the revision of our year-end 2024 net cash balance guidance range, as a function of our highly selective approach to bookings, we're forecasting a reduction in assumed cash deposits associated with new bookings in 2024. And fourthly, as previously mentioned, we're forecasting higher CapEx associated with our intention to accelerate CuRe conversion at our Vietnam and our third Perrysburg facilities. So taken together, the combination of higher year-end accounts receivable balance due to accommodating customer timing optimization requests, the expanded termination for convenience by the aforementioned portfolio selling developer customer and reduced deposits from new bookings due to our highly selective approach to bookings as well as the increased CapEx due to the CuRe conversion in Vietnam and Perrysburg results in an updated year-end 2024 net cash balance guidance of $600 million to $900 million.

From an earnings cadence perspective, we expect our net sales and cost of sales profile, excluding the benefit of Section 45X tax credit, to be approximately 35% to 40% in the first half of the year and 60% to 65% in the second half of the year. We forecast Section 45X tax credits of approximately $400 million in the first half of the year, approximately $620 million in the second half of the year and then operating expense profile roughly evenly split across the year. This results in a forecasted earnings per diluted share profile of approximately 35% to 40% in the first half of the year and 60% to 65% in the second half of the year. Now I hand the call back to Mark to provide an update on policy. Turning to Slide 10. As we stated in the past, we believe the Inflation Reduction Act represents America's first durable solar industrial strategy. And if implemented with the whole-of-government commitment to onshoring, together with strong and consistent enforcement of trade laws, it also has the potential to dismantle China's dominating influence over solar manufacturing value chains. Quite simply, the IRA paves a viable pathway for the U.S. to secure supply of critical clean energy technologies, enabling America's energy independence while capturing the value of our economy and creating well-paying, enduring jobs. At the same time and also as previously stated, while we are not the only American solar manufacturer to come into existence at the end of the last century, the grim reality is that as a consequence of China's strategic objective to dominate the solar industry, we're the only one at scale to remain today. For the IRA to achieve one of its intended purposes, which is to spur U.S. manufacturing to the scale required to support the country's energy independence and climate goals, we must ensure that more companies that are aligned with the U.S. ambitions and are committed to fair competition and innovation can scale, compete and prosper. The purpose of the IRA will not be achieved under current unsustainable market conditions. The relentlessness of the Chinese subsidization and dumping strategy has caused a significant collapse in cell and module pricing and threatens the viability of many manufacturers who may never be able to get off the ground or have the ability to finance and start up the growth of their operations. Given this unfortunate reality, together with our role as a market leader and the Western Hemisphere's largest solar module manufacturer, we have joined an alliance of 7 solar manufacturing companies comprising the American Alliance for Solar Manufacturing Trade Committee, which last week filed a set of antidumping and countervailing petitions with the U.S. International Trade Commission and the U.S. Department of Commerce to investigate unfair trade practices from factories in 4 Belt and Road Initiative countries in Southeast Asia, Cambodia, Malaysia, Thailand and Vietnam, that are injuring the U.S. solar industry. This action takes place against the backdrop of growing momentum on the part of the current U.S. administration to broadly address structural overcapacity across a range of industries in China. The administration's leadership in tackling this wide-ranging issue is remarkable. And in the past few weeks, we have heard senior members of the administration, including Treasury Secretary Janet Yellen and White House Climate Adviser John Podesta, state in no uncertain terms that the President intends to act to level the playing field for American manufacturing. We welcome the actions focused on solar supply chains, including the reported potential withdrawal of the Section 201 bifacial exemption and the pending expiration on the moratorium on tariffs related to anti-circumvention findings. These are clear actions that deliver on the President's intent. The context of our decision to support the petition starts with China's role in the global solar market. That country's long history of egregious subsidies, dumping of modules at prices believed to be below their cost, creation of structural overcapacity, engagement and circumvention of measures designed to address these factors and other unfair trade practices have intentionally distorted markets around the globe, causing a significant decline in solar prices and denying international competitors access to a level playing field. As Secretary Yellen herself has recently said, "China's overcapacity distorts global prices and production patterns and hurts American firms and workers." China ended 2023 with more than twice the solar manufacturing capacity that was deployed worldwide last year, had record-low factory capacity utilization rates in the first quarter of 2024 and, despite these market-distorting factors, is still expected to add 500 to 600 gigawatts of new capacity this year. With China expected to exit 2024 with sufficient capacity to meet global demand through 2032, it appears that the overcapacity is not a miscalculation but an intentional feature of the Chinese government strategy to dominate clean energy supply chains. Notably, the 4 Southeast Asian countries in question account for 75% of U.S. solar imports in 2023 and were responsible for an approximately 140% increase in exports to the U.S. in the 18 months following the passage of the IRA compared to the 18 months preceding August of 2022. While the current environment, if allowed to persist, will provide a short-term pricing benefit to developers, allowing these practices to continue denies non-Chinese solar manufacturers the opportunities to scale and compete on a level playing field while multiplying installers and developers' exposure to the risk of over-concentrated supply chains. A word about the impact of potential tariffs resulting from this case on module pricing. While some may choose to reference triple-figure tariff rates and claim that these types of rates will cause severe disruption in achieving our deployment goals, the reality is far different. Currently, Chinese AD and CVD rates range from 15% to 50% for most cooperating companies. Secondly, projects should not be affected as historical module pricing has already been baked into those project economics. Finally, from a supply standpoint, there is, contrary to the views expressed by some industry participants, more than sufficient product available to service current and anticipated U.S. demand through the combination of currently warehoused modules, fairly traded imports and the capacity of Western manufacturers such as First Solar. As noted earlier, we expect to exit 2024 with over 21 gigawatts and 2026 with over 25 gigawatts of global nameplate capacity, all of which is available to serve the U.S. market. Time and again, we have heard about the detrimental effects of enforcing trade laws on the books of deployment. And yet time and again, we see annual records set for solar deployment in this country. In our view, the real risk for U.S. solar deployment comes from the long-term detrimental effects of allowing China's unfair trade practices to continue, which could result in a decimated domestic solar manufacturing base, ceding all pricing power and complete control of supply chain distribution to a highly adversarial nation. This represents a strategic risk to developers of solar assets, clean energy transition and U.S. energy independence and economic prosperity. The U.S. energy independence isn't just about producing electricity at home. It's about having the supply chain and R&D for future advancements at our nation's disposal as well. Historic once-in-a-lifetime policies like the IRA, while transformative of our country's energy transition and our industry, are not enough to deliver independence due to China's unfair trade practices. We believe the IRA must work in conjunction with strong and effective trade measures that level the playing field for the investments it catalyzes. We must think of government policy in terms of a three-legged stool. The first leg is industrial policy such as a 45X advanced manufacturing tax credit, which incentivizes investment in American manufacturing. This provides solar, wind and battery storage and other manufacturers momentum needed to scale domestically, drive down costs and spur cycles of innovation to maintain America's technology leadership. The second leg is demand and demand-side drivers. In the U.S., demand continues to grow. But the domestic content bonus enhances this growth by creating a crucial parallel demand-side driver to incentivize purchasing the output of these American factories through the introduction of a bonus to the investment or production tax credit accessed by solar generation asset owners if projects procure domestically made content, including solar panels. The third leg is a level playing field that addresses anticompetitive market-distorting behavior such as dumping and circumvention. While industrial policies such as the IRA have the power to incentivize domestic investment and significantly grow this industry, the ability of those investments to endure is enabled by a corresponding trade policy. This level playing field ensures that domestic manufacturing investments incentivized by American taxpayer dollars are incubated as they scale. Take away any one of the legs and you render the whole apparatus unusable. Look no further than Europe as one example of an unsustainable environment for clean energy manufacturing, not just in solar but wind as well, due to the lack of effective trade measures to support policies that seek to incentivize the growth of the domestic supply chain production base. There can be no doubt that trade policy is intrinsic to the efforts to build a resilient American solar value chain, and we believe this view has bipartisan support. This dynamic goes well beyond being just a risk to our company. It threatens the viability of all aspiring U.S.-based manufacturers who may never be able to finance the start-up and growth of their operations. Our support for the petition is founded on the thesis that we believe a level playing field, one that allows manufacturers to compete on the basis of their own merits, is essential for driving American innovation and competitiveness, promoting quality and enabling technology diversification that enhances developer choices. We also believe that everyone benefits from a thriving and resilient domestic manufacturing industry enabled by a level playing field and free of dependency on China. Apart from the positive impact on domestic investment, job creation and economic value, which is reflected in the economic impact study commissioned by us and conducted by the University of Louisiana Lafayette that was released in February, domestic manufacturing also insulates developers and their pipelines against the risk of disruption resulting from global supply chain issues or potential geopolitical crises. As validated by our customers and our order book, domestic manufacturing supply chain builds resiliency into development pipelines, providing certainty of pricing and supply and ensuring continuity even in the face of widespread international supply chain disruption. Again, I want to be clear. We invite competition and free trade. All we seek is that the competition and trade is fair, enabled by a level playing field where all companies can compete on the basis of their own merits. This petition is about enforcing the rule of law and holding rule-breakers to account, enabling a level playing field for domestic manufacturing and supporting the efforts to scale American solar value chains. Importers of solar panels from manufacturers playing by the rules and operating in compliance with U.S. trade laws have little to fear from this petition and any potential investigation. Internationally, oversupply and dumping of modules at prices below cost also adversely impacts the Indian and European markets, both of which are seeking record levels of imports and low pricing. Referring to my earlier comments about thinking of policy as a three-legged stool, the principle also applies to India, which offers supply-side drivers in the form of production-linked incentive programs, deployment targets that offer demand drivers and nontariff barriers such as the Approved List of Module and Manufacturers. We are pleased that the government has decided to revive the mandate of its ALMM program, and First Solar was added to this list on April 29. We believe that enforcing this vital nontariff barrier will support the effort to level the playing field for domestic manufacturers, especially if combined with a similar program focused on cell manufacturers that could materialize as more domestic cell capacity comes online in the country. However, we remain concerned about the level of dumping in India and its potential to undermine the country's manufacturing ambitions. While ALMM applies to fully assembled modules, it does not safeguard the market against the dumping of solar cells or other upstream components, which undermine efforts to scale vertically integrated domestic manufacturing in the country. With this in mind, we are seeking an investigation into the dumping of solar cells in the India market. We believe that investigation is necessary to address unfair market-distorting behavior that denies domestic manufacturers in India a level playing field on which to compete as the industry scales. Finally, moving to Europe, which lags the U.S. and India in its response to dumping and consequently continues to deepen its near total dependency on Chinese-made solar panels. While Europe currently appears to not have the political will to consider trade barriers that could address dumping, we are encouraged by decisions in the EU's foreign subsidies regulations to investigate potentially illegal subsidies to Chinese solar and wind manufacturers. We continue to monitor developments in Europe and engage with stakeholders there as we seek out opportunities to advocate for a level playing field in that market.

To conclude, demand continues to be robust with 2.7 gigawatts of net bookings year-to-date with an ASP of $0.313 per watt before adjusters, leading to a resilient contracted backlog of 78.3 gigawatts. Our continued focus on manufacturing technology excellence resulted in a record quarterly production of 3.6 gigawatts, and our Alabama and Louisiana factories and our R&D innovation center and perovskite development line remain on schedule. We continue to anticipate launching CuRe at our lead line factory in Ohio in Q4 of this year. In addition, we're increasing CapEx by $0.1 billion this year to accelerate CuRe conversion at our Vietnam facilities as well as at our third Perrysburg facility with a view to advancing global fleet replication by more than 1 year from our assumptions at our recent Analyst Day. Financially, we earned $2.20 per diluted share, and we ended the quarter with a gross cash balance of $2 billion or $1.4 billion net of debt, maintaining our full year 2024 volumes sold and P&L guidance, including forecasted full year earnings per diluted share of $13 to $14. And with this, we conclude our prepared remarks and open the call for questions.

We'll go first to Mark Strouse, JPMorgan.

Appreciate all the color. Obviously, a lot going on right now. Mark, I wanted to start with your comments on India. So good to see you're added to the ALMM list. I know it's still somewhat early, but can you just talk about what you're seeing as far as pricing in that market since the ALMM went back into effect? And how are you weighing shipments to that market versus potentially shipping back to the U.S.?

Yes. All right. Thanks, Mark. Look, since the ALMM has gone back into place, we are seeing pricing move up in the market. Again, ASPs, generally in India, are much lower than what we see here in the U.S. But they have moved up 5% or 10% from where we saw them before the ALMM, so moving in the right direction in that regard. I do think that with some of the other initiatives that we have in place and especially as we move forward towards the latter half of this year, I think we could see even firm pricing as we exit this year going into next year, which is encouraging. In the interim, we are shipping a lot of product into the U.S. So this year, we'll produce about 2.6 gigawatts of product in India. And we'll be shipping about 1 gigawatt, maybe slightly more than that, into the U.S. market. And really most of the first half shipments that we'll see, really into Q3 even, are going to be from India into the U.S. market at this point in time.

The next question is Andrew Percoco, Morgan Stanley.

So I guess, I mean, over the last few quarters, you guys have been highlighting that you expect bookings growth to slow. But I guess I'm just curious now that you've got some headlines around the potential removal of the bifacial exemption, the new AD/CVD petition and Yellen's commentary on China, I mean, shouldn't that be an accelerant for bookings? I get that you guys want to be selective because of your capacity position. But just curious on your updated thoughts on what you're seeing and expecting for bookings for the remainder of the year now that policy seems to be moving in your favor, and you've also got growing demand for clean energy in some of the AI data center markets that you guys had alluded to earlier in the call.

Yes. So what I would say right now just in conversations with our commercial team and our Chief Commercial Officer, clearly, pricing in the market has changed. As soon as there was an indication, really, it's starting to increase $0.03, $0.04 since the beginning of April. And then we continue to see a little bit more momentum now that the petition has been announced and some of the other statements that have been made by the current administration, which are all very, very supportive and constructive. So we are seeing more activity, more engagement. We're encouraged. We have taken our assumption around bookings down a little bit. We did that largely with a lens of being conservative, waiting to see exactly what we're starting to see, and the momentum is starting to pivot back in a more constructive way. And we'll see how that pans out. But a lot of engagement, a lot of customer meetings. I will be actually meeting with a number of customers next week as well with our commercial team, and we'll get a better pulse at that point in time. But I'd say that the sentiment clearly has changed over the last 3, 4 weeks.

And up next is Philip Shen, ROTH MKM.

Can you discuss how much of a buffer you might have to meet your guidance if all the termination for convenience clauses in 2024 and 2025 are exercised? Additionally, regarding pricing for future bookings, have you started seeing benefits from the recently filed Southeast Asia AD/CVD petitions? It seems like pricing may have begun to shift; did you notice that in some of the previously announced bookings? Lastly, concerning technology, we recently reported on a Japanese start-up that achieved record lab efficiency for perovskite and CIGS close to 27%. Could you provide an update on your tandem technology research? Specifically, when do you expect to make a definitive decision on the next-generation technology, allowing for a commercialization path? Our understanding is that it could take three full years, so it seems important to lock this in now to enable commercialization within that timeframe.

Yes. I'll address the termination for convenience and pass it to Mark. We haven't provided a specific number for this year, but our guidance maintains a volume sold estimate of 15.6 to 16.3 gigawatts. We're assuming that if this volume were to be terminated, which hasn’t occurred yet, discussions with a customer indicate that due to a potential sale of their portfolio and a prospective buyer already having volume from us, along with the timing of these deals being delayed, they are likely to exercise that termination for convenience. This particular customer has a larger order with us, having received over 50% of the volume already, and will continue to accept the remainder of it, which is slightly under 50%. However, if all these scenarios unfold, they may terminate a portion of that backlog. We plan to reallocate or resell that volume, but this is part of the reason for a slight decrease in the cash guidance. Since we are already in Q2, if we reallocat or resell now, it probably won't be until late Q3 or early Q4 at the earliest before we can move that volume to another buyer.

Yes, regarding pricing, we've observed a clear benefit as market prices have strengthened and are rising. In our last quarter, we booked $0.30 before any adjustments. As shown in the presentation graph, this increase didn't occur in April; all bookings were made in the first quarter before indications of this case appeared in the market. Therefore, Q1 bookings were not affected by this. We're witnessing movement in the market with firmer pricing, prompting customers to act more swiftly due to various uncertainties and the implications of their development pipeline and future projects. Additionally, the order book with First Solar remains tight, and we face supply constraints overall. As for tandem technology, we're making progress through different avenues, including our thin-film CIGS tandem product, thin-film crystalline technology, and advancements in perovskite. This aligns with our focus on next-generation innovative technologies, and we're set to launch our R&D innovation center by the end of this quarter or early next quarter. Our perovskite pilot line represents an investment of nearly $0.5 million since we made those decisions over a year ago. What I'd like to discuss now is that the investments we are making and getting them operational will clearly enhance our understanding of our technology as we produce full-size modules and validate their reliability. While it's one thing to create a record cell or module, it's another to assess how well it performs under real-world conditions with regards to reliability. We've seen reports over the past six months regarding TOPCon technology. The field performance and reliability of TOPCon are currently facing significant challenges, and it is not meeting performance standards that are acceptable in the market, nor is it close to previous technology metrics. Therefore, we need to be cautious and attentive. It's not just about working in the lab; we must also produce at scale and then test in the field to ensure long-term reliability and viability. I cannot provide a specific timeline, but I can say we are making good progress. I believe that the R&D innovation center and the perovskite pipeline we are working on will provide us with much better insights into our commercialization efforts and time to market as we conclude this year.

The next question is Brian Lee, Goldman Sachs.

I understand there's a lot of interest in the pricing commentary, Mark. So I want to ask another question about that. You mentioned a range of $0.03 to $0.04. You've been receiving that feedback since April, and this doesn't even account for the latest AD/CVD information. When we look at the bookings this quarter at $0.31, which doesn't reflect any of that, it suggests you are having real-time discussions about possibly moving toward the mid-$0.30 per watt range, or even higher. Is it reasonable to expect that pricing level over the next few quarters as you consider booking future volumes in the mid to high 30s? Can we anticipate seeing that increase in the next couple of quarters? Additionally, Alex, you briefly mentioned the rising demand for electricity in data centers. This is clearly attracting a lot of attention. Historically, you've had significant indirect exposure to corporate clients developing that infrastructure. Can you provide an estimate of what percentage of your U.S. demand comes from those types of customers, particularly data center-driven corporations, and how you foresee that evolving as a potential new growth area?

Regarding pricing, I'm satisfied with what we're currently experiencing. I don't want to commit to an average selling price in the mid-30s at this moment. What I mean to convey is that we've observed changes in market pricing, and there is a distinction between international and domestic pricing. The domestic product will carry an additional cost of $0.03 to $0.05. Therefore, the volume will be priced at a higher average selling price. However, I want to emphasize that we're optimistic, and our approach this year is to remain patient while continuing to secure bookings at appealing average selling prices. As we've mentioned previously, this business model still relies on growth and contribution margin. If we can achieve a stable average selling price environment over the coming years and expand our production capacity while further reducing costs by utilizing our fixed expenses effectively, there is significant potential for operating margin growth if we execute this well.

Yes, so I don't know if I have a good number for you. I would say if you look at the companies that we talked about on the call, the ones that we're going to be adding to data center demand significantly, Apple, Google, Microsoft, Meta, they value certainty even more than the utility. So if you think about utility potentially contracting multiple projects, and they can deal with a level of failure or delay in a way that these guys can't if they have a commitment to renewable targets at certain times. So they value certainty, and they certainly value the reliability of where the product is coming from and the concerns around labor practices. So we tend to be the first port of call for many of these companies or the developers who are doing the work for them. And so in many cases, developers will come to us saying that they have had discussions with these people and that they have a preference to buy or work with the solar products, especially for U.S.-based demand. So I don't think I have a percentage I can give you, but I would say that generally, we're going to be the favored supplier to the projects that are going to be supplying power to these data centers or these kinds of asset owners.

And Moses Sutton from BNP Paribas has the next question.

What would be the biggest consideration in determining whether you add another factory? I know the pace of bookings, that they're naturally slow considering how far out you booked. But if the industry needs, let's say, 50 to 70 gigawatts per annum by late decade of ground mount in total and considering your market share position is further improving, could at least another factory be viable in locking interconnection bottlenecks, the poly-based competition unknowns as they ramp up in the U.S. or just waiting on developer visibility to get more confidence here for these out-years?

I believe our framework remains consistent with our past approach. We want to ensure that our efforts are driven by demand. As we move further into the second half of the year, we're gaining confidence in a strong and lasting demand that we expect to maintain throughout this decade. One significant factor driving this demand is the current activity in data centers. To start, I want to emphasize the importance of demand. Another critical aspect is maintaining a stable policy environment. I've previously communicated to my team that we need to be prepared and to assess our supply chain. We must have a clear strategy for sourcing materials, including glass and tellurium, and we should consider site selection and access to power so we can act quickly when we detect signs of increased demand. After the November election, if we have a stable policy environment, we will be in a better position to make informed decisions about expanding our capacity.

Up next is Vikram Bagri, Citi.

I realized that using a 5-in-1 question approach is the best way forward, so I will try that. Mark, you mentioned earlier that the excess panel inventory in the U.S. was around 30 to 40 gigawatts at the end of 2023. There seems to be a lot of discussion about the current status of that excess inventory. Could you provide some insights on where you believe it stands? The ongoing debate is fueled by the significant price increases that occurred once the petition was filed, suggesting some concern that the excess inventory may not be as substantial as believed. Additionally, Alex, you pointed out delays and potential cancellations from hydrogen customers previously. Is there a way to capitalize on the market's spot pricing? Lastly, we have seen a few press releases about bookings in the last couple of days. Were these contracts established in the first quarter, considering that the chart on Slide 5 shows no bookings since March? If these contracts were made after May 1st, could you share the pricing details for those bookings?

Please follow up with me on some of this because I want to ensure I understood the questions correctly. I'll begin with the last one. The bookings we reported were primarily completed from our earnings call around February 27 or 28 and through March 31. So, out of the 854 megawatts, very little occurred in April. What I was trying to convey earlier was that the potential situation regarding Southeast Asia wasn't affecting the market during the negotiations and closure of that booking volume. Therefore, all of the 854 megawatts, which is additional, took place mainly in March. The quarter-to-date figure is 2.7 gigawatts, which also happened before any substantial indication of policy changes or recent statements from the administration. Regarding your question about inventory levels in the U.S., I've seen speculation suggesting there could be 30 gigawatts or more due to the moratorium on circumvention. We've heard similar figures before, but I have no way to confirm that information. But I do believe that there has been, looking at the import records, an excessive amount of product that has been brought into the U.S. at a rate that's much higher than current demand, which all is going to have to be managed and worked through. And there's issues that are going to have to be dealt with how, once this moratorium is over, in theory, all that inventory has to be deployed and installed by the end of this year and to monitor and ensure that truly is happening. Uncertain to me how that would happen, to be honest with you. So some of that inventory may be subject to tariffs, if that were not to happen. But to be seen on that regard.

Then you asked me about the other issue, which you can repeat. There was a question regarding hydrogen, and I believe there was also a question about spot prices, unless Alex, you have either of those. I think just related to spot, I mean we talked before that there isn't a huge immediate spot market in the utility-scale solar in the same way that there is in residential. So when we talk spot, we're still talking for projects that are 2, 3 quarters ahead, maybe just not 8, 10, 12 quarters ahead. So when I think about the opportunity for us, as we have potential openings come up in the year, if we have some short-term gaps open up with things like termination of convenience, there's an opportunity, yes, for us to capture what I think you would call spot on a utility-scale basis, which is forward a few quarters. I don't think there's a lot of ability to sell meaningful volume on an immediate basis given the timelines for permitting and development of a utility-scale project. But certainly, if we have opportunities around any termination of convenience or if we have other customers that ask us to move product out, we'll certainly go out and see if there's an ability. If anyone else looks for products and wants to have product, we're willing to work with customers in that way. There could be some opportunity there. We also said we continue to be cumulatively oversold through 2026. So we continue to do an almost daily balancing of our supply-demand and work with our customers to see where things need to move both in and out.

And then maybe if you could repeat your question on hydrogen or clarification on any of the things we responded to maybe that didn't hit the spot.

You already answered, Mark. I was asking if you have a hydrogen customer who might not take delivery. If you could feed out those volumes in the spot market and benefit from higher prices. But Alex already answered.

And everyone, that does conclude our question-and-answer session. It does also conclude today's conference. We would like to thank you all for your participation today. You may now disconnect.