Good afternoon, everyone, and welcome to First Solar's Fourth Quarter and Full-Year 2023 Earnings and 2024 Financial Guidance Call. This call is being webcast live on the Investors section of First Solar's Web site at investor.firstsolar.com. At this time, all participants are in a listen-only mode. As a reminder, today's call is being recorded. I would now like to turn the call over to Richard Romero from First Solar Investor Relations. Richard, you may begin.

Hi. Good afternoon and thank you for joining us. Today, the Company issued a press release announcing its fourth quarter and the full-year 2023 financial results, as well as its guidance for 2024. A copy of the press release and associated presentation are available on First Solar's Web site at investor.firstsolar.com. With me today are Mark Widmar, Chief Executive Officer; and Alex Bradley, Chief Financial Officer. Mark will provide a business update and outlook for 2024. Alex will discuss our financial results for the fourth quarter and full-year 2023, as well as our financial guidance for 2024. Following their remarks, we will open the call for 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 a more complete description. It is now my pleasure to introduce Mark Widmar, Chief Executive Officer.

Thank you, Richard. Good afternoon and thank you for joining us today. I would like to start by noting that this month marks the 25th anniversary of First Solar's founding, making us one of the oldest and most experienced solar module manufacturers in the world. This is a remarkable milestone in a journey that has positioned us as the western hemisphere's leading solar module technology and manufacturing company. While we're not the only American solar manufacturer to come into existence at the end of the last century, we're the only one of scale to remain today. However, this is not simply a story of survival, but one about the value of long-term strategic decision-making underpinned by a differentiated technology and business model, driving value creation for our shareholders and our partners. Ours is a story of innovation, values, competitiveness, and perseverance. And we are proud of our work towards leading the world's sustainable energy future. As our journey continues, few years have been as consequential to our long-term growth strategy as 2023. Over the past year, we expanded manufacturing capacity mobilized at our latest announced facility in Louisiana, produced and shipped a record volume of modules, expanded our contracted backlog to historic levels, and increased R&D investment and continue to evolve our technology and product roadmap. Let's review the key accomplishments in 2023, beginning with slide three. From a commercial perspective, 2023 continued momentum established in 2022, as long-term multiyear procurement continued to drive demand. We added 10 new customers, and secured 28.3 gigawatts of net bookings at a base ASP of over $0.30 per watt. Despite industry macro challenges such as global oversupply and pricing volatility, we continue to see strong mid to long-term demand, especially in the United States, as shown with 2.3 gigawatts of net bookings since…

Thanks, Mark. Starting on slide five, I'll cover our financial results for the fourth quarter and full-year 2023. Net sales in the fourth quarter were $1.2 billion, increase of $0.4 billion compared to the prior quarter. The increase in net sales was driven by higher volumes sold, including higher net sales of Series 7 modules as we continue to ramp production at our new facility in Ohio. For the full-year 2023, net sales were $3.3 billion compared to $2.6 billion in the prior year. This increase was driven by $0.9 billion of higher module net sales resulting from increases in both volumes sold and ASPs, which was partially offset by $0.2 billion of lower revenue from our residual business operations, primarily related to the sale of our Luz del Norte project in the prior year. Based on our vertically integrated differentiated manufacturing model, the current form factor of our modules, we expect to qualify for Section 45X tax credits of approximately $0.17 per watt for each module produced in the U.S. and sold to a third-party, which is recognized as a reduction to cost of sales and the period of sale. In December, we entered into an agreement with Pfizer, which resulted in the sale of approximately $687 million of the 2023 Section 45X tax credits, for expected aggregate cash proceeds of $659 million, received an initial $336 million of cash proceeds in January, with the remainder expected by the end of April 2024. In connection with this transaction, we recognize the valuation adjustment of $28 million within cost of sales during the fourth quarter to reduce the carrying value of the credits to the amount expected to be received from the transaction. For the fourth quarter and full-year 2023, we recognize $229 million and $659 million respectively for Section…

All right. Thank you, Alex. A word about overall market conditions and the policy environment, as we enter 2024, while we continue to operate from a position of strength, leveraging our point of differentiation and strong contracted backlog, the continuation of Chinese subsidization and dumping practices has caused a significant collapse in cell and module pricing. Last month, Meyer Burger, a European module and cell manufacturer announced that deteriorating market conditions in Europe resulting from such practices as forcing them to prepare for shuttering module assembly in Germany, exemplifying the challenges to the EU stated goal of creating a self-sustaining renewable manufacturing industry. In India, sudden and significant reduction in cell pricing in the non-domestic content market segment has blunted the efficacy of the country's measures to address Chinese supply chain imports, distorting market pricing in the country and disincentivizing the ability of local suppliers to help achieve India's ambition to create broad domestic manufacturing to serve its domestic market. And here in the U. S., notwithstanding the U.S. Department of Commerce's general determination of antidumping and countervailing duty circumvention by four Southeast Asia countries, the continued record level of cell and module imports from these regions poses a threat to the current administration's ambitions of scaling and securing a robust onshore solar manufacturing base. In light of the current and forecasted state of oversupply in these markets and the resulting headwinds to the ability of domestic manufacturers to scale, we call upon governments and policymakers to either reinforce the measures already enacted or move expeditiously to take action. For instance, here in the U.S., we have long taken the position that the Section 201 Safeguard Bifacial Exemption simply opened the door for a multi gigawatt scale crystalline silicon product to have unfettered access to the American solar market, threatening…

Thanks, Mark. Before discussing our financial guidance, I'd like to reiterate three themes from our recent Analyst Day related to our growth and investment thesis, our approach to our backlog and bookings and our expansion into India. Firstly, from a growth and investment thesis perspective, we continue to focus on differentiation and our guided line approach to our business model balances growth, profitability and liquidity. This decision-making framework informs our long-term strategic direction. It guided our strategy to exit the systems business at the end of the last decade and significantly expand our module manufacturing business, evidenced in a doubling of nameplate capacity from 2021 to 2023 and the forecasted increase in nameplate capacity of over 50% in 2023 to 2026. This scaling capacity is supported by optionality in our R&D road map across energy attributes including efficiency, degradation, temperature coefficient and bifaciality. We've gone from deploying prototypes of early bifacial CadTel modules at a test facility in 2021 to converting our lead line at the end of 2023 with commercial deployment across a significant portion of our fleet plan for 2024. Additionally, in the fourth quarter of 2024, we expect to be in production of our first commercial pure modules on our lead line in Ohio. As it relates to contracting this volume, we continue to prioritize certainty. Our reported backlog, which includes U.S. and Rest of World bookings with our typical contractual security provisions, but excludes contracts signed in India and less backed by 100% liquid security is made up of two types of contracts. Those relates to a specific asset or project and frameworks, which are typically larger, multi-year, and therefore often have less certainty over delivery timing. Common across these contracts is a fixed price structure, which may include adjusters for technology improvements, and which typically…

Thank you, sir. [Operator Instructions] We'll take the first question from Moses Sutton, BNP Paribas.

Hi, thanks for taking the question, and congrats on continued price momentum and its execution. At some point, should we see bookings, I want to say, near zero in a given quarter having -- simply can't book more till time passes naturally, and I think investors think of that? Or conversely, like to eventually lower that ASP into like $0.29 range? It went all the way to $0.32 which was great to see. So, just curious how that dynamic plays through the year? I know you could book some, but what should we expect more precisely?

Yes, so, I'll take one, I guess. And in terms of -- as Alex included in his remarks, our plan is to be patient. The opportunities are there. You can see it, the pipeline of opportunities that we represent, both mid-to-late and obviously the early-stage pipeline. Separating U.S. from India, you're going to continue to see bookings in India, clearly. As we indicated, we've got a conversion that will happen of those contracted subject to CP. So, that's going to continue on a cadence that you would expect, call it hundreds of megawatts, maybe a gigawatt on any particular quarter to sell through that and to position for 2024. So, you'll see that momentum continuing. As it relates to the U.S., our strategy of being patient is largely how we're going to engage the market in conversations with our customers. I am very happy with the bookings that we showed up with this last quarter, great ASPs, good counterparties, technology adders associated with it. So, and feathered into a period of time that's very constructive for us, so a lot of that volume goes out into '27, '28, and '29, and touches '30 even. So, happy from that standpoint. We've got, right now, we got a short window between now and the next earnings call, so you could see maybe a period of softness there outside of the volume that we would expect to continue to recognize for India. But I've got ongoing commercial conversations right now for north of three gigawatts of bookings here for shipments into the U.S. that are in late-stage negotiations. And actually as this call was ongoing, I got a text that about 10% of that now has been booked, and will reflect in next earnings call. So, the momentum is there, it's available to…

We'll take the next question from Philip Shen, Roth Capital Partners.

Hey, guys, thanks for taking my questions. First one's on pricing. Great job on the recent bookings ASP at $0.32 almost. And can you talk through the dynamics influencing that pricing? You mentioned a bunch of the earlier, Mark, but I'd love to get a feel for how the customer conversations have inflected. Last year, it was very much an oversupply price decline environment. And recently, a lot of this policy activity has kind of swung back in your favour as it relates to greater UFLPA enforcement or the potential to do one bifacial exemption being removed. Can you just talk through that customer conversation, and how that may have inflected recently? And then also, do you expect that pricing momentum to remain steady through '24 or is there even potential that it could go higher or do you think there is risk that it could go lower? The second here is around module volume, that you talked about there's a customer that can't take delivery of 381 megawatts of product. Are checks on this suggests there could be as much as 1.5 gigawatts floating around. And so, how many megawatts do you expect the market to transact in the secondary market, if you will, in '24? So, I know it's not your risk ultimately, but you do have to manage it at some level, and your customers, ultimately, have to deal with it. But -- and yes, you should have protections, but it's something that can be an issue to understand better as well. So, thanks, Mark.

Yes, so let me -- I'll start with your second one, and then I'll go back to the first one. Look, this 380 megawatts was to -- think of it almost as a one-off transaction that I think we booked two, three years ago, can't remember the exact timeframe it was for. And we specifically stated in the prepared remarks, it was for a corporate customer who basically was going to use it for self-generation, self-consumption, right, and then -- and ultimately was looking potentially not just from -- to potentially that were just beyond just the raw form of the electricity generation that it would provide. That customer has gone into some financial challenges that they're having to deal with. And so those megawatts are an obligation to the customer, we won't force the rights on the contract. We will also work with the customer to re-contract that if we -- if that opportunity is available to us. If not, then there's an obligation for them to take delivery, and then to pay for that. That particular project, it is a project that is cited in a state of permitting and I believe has an interconnection. That project asset itself is being marketed right now. And we'll see how successful that is to the extent that that transaction does happen, then the modules will go along with it, they'll be an assignment with -- given our consent, and we'll support that type of consent, again with the spirit of honouring -- enforcing rights underneath our contract. So, that one is that issue. So, to the other question, because I know you've asked this a couple of times about markets -- product that's out in the secondary market. There are customers who are challenged right now from a development standpoint…

And so, you mentioned if what probably the pricing would stay steady, there's definitely some elasticity of demand related to pricing, which is why we want to be disciplined and why the position of strength that we put ourselves in is so important. We have no need to go out and chase deals. As I mentioned on the call, we could book nothing between now and the end of the year and still find ourselves two years forward sold out. If there is uncertainty in the market, we can afford to step back and therefore we can manage to some degree some of that price erosion. So, we'll continue to work with people that value the attributes that Mark brings, and therefore I think you'll see slower bookings, lower pace of bookings at pricing that we find accessible in the long-term. Clearly, if we wanted to sell a lot more and drop pricing, that would happen, but that's not the strategy.

Yes, and I think we just tether back to, look, if we can achieve a one-to-one book-to-bill this year, largely sell through our open position in 2027, I think that would be a great result and position the company very well as we exit 2024.

And everyone, that is all the time we have for questions today. This does conclude today's conference. We would like to thank you all for your participation. You may now disconnect.