TOYO Co., Ltd. Q1 FY2026 earnings call

Core Financial Performance

• TOYO delivered record revenue, gross profit, and net income in Q1 2026, which management identifies as an inflection point in the company's trajectory.
• The swing to profitability was driven by scaled production, expanded manufacturing capacity that came fully online, and structural improvements to the company's business model.
• Strong demand for TOYO's high-efficiency solar solutions in the U.S. is fueled by the accelerating energy transition and growing AI-driven power demand, with solar paired with energy storage positioned as the most cost-effective grid expansion solution.
• The company generated solid operating cash flow in Q1 2026, ending the quarter with $72.2 million in cash and restricted cash, up from $58.9 million at the end of 2025.

U.S. Manufacturing Expansion Strategy

• First priority: Expansion of the existing Houston, Texas U.S. module facility, currently with 1 gigawatt of annual production capacity. The expansion to 2 gigawatts of annual capacity remains on track to be completed by Q3 2026, with capacity coming online in phases over the coming months. This expansion will meet accelerating demand for domestically manufactured, FIAC-compliant solar modules.
• Second initiative: Establish 1.5 gigawatts of annual domestic solar cell manufacturing capacity, also located at the existing Houston 567,000 square foot facility. Planning is in the final stages, with execution expected to begin in H2 2026. Management is proceeding deliberately to address permitting, environmental requirements, capital planning, equipment sourcing, and supply chain logistics, leveraging the company's track record of on-time manufacturing ramp-ups.
• Once completed, TOYO will hold 2 gigawatts of module capacity and 1.5 gigawatts of cell capacity in the U.S., making it one of the most vertically integrated domestic solar producers in the country.

Long-Term Strategic Priorities

• The company plans to launch a U.S.-based R&D center focused on solar cell engineering and manufacturing excellence to support U.S. energy independence and security objectives.
• Domestic vertical integration gives TOYO greater control over supply chain reliability, manufacturing quality, and long-term execution, while aligning with U.S. onshoring policy goals.

TOYOCO LTD operates two core solar product segments: solar cells and solar modules. Aggregate total company revenue for Q1 2026 was $142.8 million, a 177% year-over-year increase from $51.5 million in Q1 2025. Aggregate gross profit for the quarter was $47.8 million, an 894.8% year-over-year increase from $4.8 million in Q1 2025, with gross margin expanding to 33.5% from 9.3% in the prior year quarter. Aggregate net income for Q1 2026 was $28.4 million, compared to a net loss of $3.7 million in Q1 2025. Non-GAAP adjusted EBITDA for Q1 2026 was $48.3 million, up from $2.8 million in Q1 2025. For full year 2026, management guidance targets 5.5-5.8 gigawatts of solar cell shipments and 1.0-1.3 gigawatts of solar module shipments. Geographic revenue contribution for 2026 is expected to be at least 75% of volume from U.S. customers, with non-U.S. solar cell production serving other global markets.

Management reaffirmed all full year 2026 guidance, with no upward or downward revisions from prior targets:

• Solar cell shipment volume guidance is maintained at 5.5 to 5.8 gigawatts
• Solar module shipment volume guidance is maintained at 1.0 to 1.3 gigawatts
• Full year 2026 adjusted net income guidance is maintained at a range of $19 million to $100 million
• The 45X clean energy production tax credits are not included in the 2026 net income guidance, and represent potential upside to the current target

Forward-looking statements are inherently uncertain, and actual results may differ materially from projections. Key risks noted include potential delays to permitting and project execution for new domestic manufacturing capacity, and uncertainty around the timing and eligibility for 45X tax credits, which require rigorous compliance auditing that can extend timelines for recognition. Additional risks are disclosed in TOYO's Form 20-F and other SEC filings. No material operational failures or unexpected cost overruns were discussed on the call.

Q: Amit Dial asked if 45X production tax credits are included in 2026 net income guidance, and if they represent potential upside. / A: Management confirmed 45X credits are not included in the current guidance, and do represent upside. The company is currently auditing 2025 Houston production to confirm full 45X compliance, a process that takes time, so management took a conservative approach by excluding expected credits from guidance.

Q: Dial asked for the magnitude and timing of capital expenditures for U.S. expansion plans. / A: 2026 capex includes final payments for existing projects and $30 million for the Houston module expansion, which can be fully funded by operating cash flow. Some limited cell facility capex will be spent in 2026, but the majority of cell facility capex will occur in 2027, and full details are not yet ready for public announcement.

Q: Dial asked what share of 2026 revenue will come from U.S. customers. / A: Management confirmed the majority of 2026 revenue will come from U.S. customers, with at least three-quarters of shipment volume expected to come from the U.S. market. Non-U.S. production at the company's Vietnam cell facility serves other global markets and does not enter the U.S.

Q: Colin Rush asked if there have been any material equipment delivery delays or unexpected expediting fees for the Houston expansion projects. / A: Management stated that as of the call, neither the module expansion nor the planned cell facility have experienced any material delivery delays or impact to project timelines.