Q2 2026 TOYO Co., Ltd Earnings Call Transcript
Key Points
- Revenue for the first half of 2026 surged 87.6% year-over-year to $261.0 million, driven by higher solar cell and module sales and new OEM services.
- Gross margin expanded significantly to 32.5% in H1 2026 from 16.6% in H1 2025, reflecting improved production efficiency and a higher mix of US sales.
- Net income for H1 2026 jumped to $45.8 million from $2.5 million in H1 2025, with EPS rising to $1.21 from $0.08.
- The Section 232 proclamation is viewed as a positive development, potentially supporting stronger module pricing and offering duty offsets through an onshoring plan that aligns with TOYO's US investment strategy.
- TOYO is expanding its US footprint with a $357 million HJT cell facility in Texas, targeting pilot production by late 2027/early 2028, and its Houston module plant is on track to reach 2 GW capacity by September 2026.
- The company uses approximately 70% US-produced polysilicon for its Ethiopian production, with plans to reach 100% by Q4 2026, positioning it favorably under the new trade framework.
- Trade policy uncertainty, including CBP detentions and a Commerce anti-circumvention inquiry, has slowed the pace of shipments from the Ethiopian facility, impacting Q2 revenue.
- Q2 2026 revenue declined sequentially from Q1, partly due to a shift in product mix toward modules and lower cell sales.
- The company has not reaffirmed its full-year 2026 guidance, citing near-term uncertainty from CBP reviews and the 232 implementation process.
- CBP detentions have caused some shipment delays, and the timing for resolution remains unclear, potentially affecting Q3 and Q4 results.
- The financial impact of the Section 232 onshoring plan is not yet quantifiable, and the company is still in negotiations with Commerce, creating uncertainty for investors.
- Operating expenses increased significantly in H1 2026 to $25.9 million from $13.4 million, driven by higher G&A costs from scaling up US operations.
Thank you for standing by. My name is Carly, and I will be your conference operator today. At this time, I would like to welcome everyone to the TOYO Co., Limited second-quarter 2026 earnings conference call. (Operator Instructions)
I would now like to turn the call over to Crocker Colson, Investor Relation for TOYO. Mr. Coulson, please go ahead.
Thank you, Carly. Hello, everyone. Thank you so much for joining us to review TOYO's second-quarter and first-half 2026 results. This morning, TOYO posted both the earnings release and a related investor presentation covering those results to our website, which you can find at investors.toyo-solar.com.
I'm pleased to say that with us on the call today, we have Mr. Takahiko Onizuka, TOYO's Chairman and Chief Executive Officer; we have Roan Resch, the Company's Chief Strategy Officer; and we also have Mr. Yasunate Harada, TOYO's Chief Financial Officer. After the prepared remarks are concluded, we're going to open up the floor for any questions that
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