TOYO Q1 Earnings Call Highlights

TOYO (NASDAQ:TOYO) reported a sharply improved first quarter for fiscal 2026, with management describing the period as an “inflection point” as higher solar cell and module shipments drove record revenue, gross profit and net income.

Chairman and Chief Executive Officer Takahiko Onozuka said revenue for the quarter was approximately $142.8 million, up 177% from $51.5 million in the first quarter of 2025. Gross margin rose to 33.5% from 9.3% a year earlier, while net income was approximately $28.4 million, compared with a net loss of $3.7 million in the prior-year period. Diluted earnings per share were $0.75, versus a loss of $0.10 per share in the first quarter of 2025.

Onozuka attributed the results to years of investment in technology, manufacturing and personnel, along with significantly higher shipment volumes as expanded manufacturing capacity came online. He said demand for the company’s high-efficiency solar solutions in the U.S. remains strong, supported by the broader energy transition and rising power demand.

Company Reaffirms 2026 Outlook

Based on first-quarter performance and visibility for the rest of the year, TOYO reaffirmed its full-year 2026 guidance. The company expects solar cell shipments of 5.5 gigawatts to 5.8 gigawatts and solar module shipments of 1.0 gigawatt to 1.3 gigawatts. It also maintained its adjusted net income forecast of $90 million to $100 million.

Onozuka said management is confident in those targets. He also said solar paired with battery energy storage is increasingly being recognized as a fast and cost-effective way to add new power to the grid, including to meet demand tied to artificial intelligence.

Houston Expansion Remains on Track

Chief Strategy Officer Rhone Resch said TOYO’s top near-term priority is expanding its U.S. module facility in Houston, Texas. The company currently operates about 1 gigawatt of annual module production capacity and remains on track to increase that to 2 gigawatts by the third quarter of 2026.

Resch said additional production capacity is expected to come online in phases over the next several months. He said demand for domestically manufactured, FEOC-compliant modules continues to accelerate, and the expansion positions TOYO to serve that market at larger scale.

The company is also planning a U.S. solar cell manufacturing facility designed for approximately 1.5 gigawatts of annual production. Resch said the cell capacity would also be located at the Houston site, a 567,000-square-foot facility where TOYO already manufactures modules. He said the company is in the final stages of planning and expects to move from development and site preparation into execution during the second half of 2026.

Resch said TOYO is working with local officials on permitting and environmental matters while evaluating sites, capital requirements, equipment sourcing and supply chain considerations. Once both initiatives are complete, he said TOYO would have 2 gigawatts of module capacity and 1.5 gigawatts of cell capacity in the U.S., creating what he described as a differentiated domestic manufacturing footprint.

Resch also said TOYO plans to establish a U.S.-based research and development center focused on solar cell engineering and manufacturing excellence.

Margins Improve as Production Scales

Chief Financial Officer Raymond Chung said first-quarter growth was primarily driven by significantly higher solar cell and module sales volume, supported by the full ramp-up of expanded manufacturing capacity. Cost of revenue for the latest quarter was approximately $95 million, compared with $46.7 million in the first quarter of 2025.

Gross profit increased to approximately $47.8 million from $4.8 million a year earlier. Total operating expenses were approximately $11.5 million, up 89.4% from $6.1 million in the prior-year period. Selling and marketing expenses rose to $2 million from about $500,000, reflecting higher sales commissions tied to revenue growth, as well as testing, advertising and headcount. General and administrative expenses increased 69.1% to $9.5 million, which Chung said reflected the broader operating scale following the commissioning of a new 4-gigawatt cell line and the Houston module facility during 2025.

Non-GAAP EBITDA was $48.1 million, compared with $2.4 million in the first quarter of 2025. Non-GAAP adjusted EBITDA was $48.3 million, compared with $2.8 million a year earlier. Chung said the improvement was driven by revenue scale, higher gross margins, production efficiencies and disciplined operating cost management.

As of March 31, 2026, TOYO held $72.2 million in cash and restricted cash, including non-current restricted cash, up from $58.9 million at Dec. 31, 2025.

Management Addresses Credits, CapEx and Demand

During the question-and-answer portion of the call, Amit Dayal of H.C. Wainwright asked whether Section 45X credits were included in TOYO’s 2026 net income guidance. Resch said they were not included and could provide upside, but added that the company is taking a conservative approach while reviewing 2025 production from the Houston facility and ensuring compliance.

On capital spending, Resch said this year’s CapEx covers final payments related to Ethiopia and the build-out of the second gigawatt of module production in Houston. Investor relations representative Crocker Coulson said the module expansion is expected to require about $30 million in CapEx this year and can be funded through operating cash flow. Resch said the U.S. cell facility will involve some spending this year, but the majority is expected in 2027.

Asked about the geographic mix of 2026 revenue, Resch said the majority of TOYO’s customers are in the United States. Senior board advisor Simon Shi said that, by volume, the company expects at least three-quarters of its business to be from U.S. customers or U.S.-oriented businesses, depending on pricing movements. Coulson added that product from TOYO’s Vietnam cell plant does not come to the U.S. and serves other markets.

In response to a question from Colin Rusch of Oppenheimer about equipment deliveries into Texas, Shi said TOYO is not seeing any material impact on equipment delivery for either the module expansion or the potential cell production implementation in Houston.

Shi also said the company is seeing strong demand and interest from existing customers for domestic products over the next two years, and he expects robust U.S. demand from both current and potential new customers.

About TOYO (NASDAQ:TOYO)

TOYO Co Ltd. engages in the design, manufacture, and sale of solar cells and modules. It is involved in integrating the upstream production of wafer and silicon, midstream production of solar cell, downstream production of photovoltaic (PV) modules, and potentially other stages of the solar power supply chain. The company was founded on November 8, 2022 and is headquartered in Tokyo, Japan.

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