TOYO Co., Ltd. (NASDAQ:TOYO) Q4 2025 Earnings Call Transcript

TOYO Co., Ltd. (NASDAQ:TOYO) Q4 2025 Earnings Call Transcript March 31, 2026

Operator: Ladies and gentlemen, thank you for standing by. My name is Christa, and I will be your conference operator today. At this time, I would like to welcome you to the TOYO Co Limited Second Half and Full Year Results Financial Results Conference Call. [Operator Instructions]. I would now like to turn the conference over to Crocker Coulson, Investor Relations. Please go ahead.

Crocker Coulson: Thank you, Christa. Hello, everyone. Thank you for joining us to review TOYO’s 2025 second half and fiscal year results. This morning, TOYO posted both the earnings release and a related investor presentation to our website and you can find it in the Investor Relations section, investors.toyo-solar.com. With us on the call today are Mr. Onozuka, TOYO’s Chief Executive Officer; Raymond Chung, the company’s Chief Financial Officer; and Rhone Resch, TOYO’s Chief Strategy Officer, whose appointment was announced just this morning. We also have Simon Shi, who will be available during the Q&A portion. After the prepared remarks are concluded, we’d like to open this call up for your questions. But before we begin, I want to make you aware that some statements in this teleconference are forward-looking within the meaning of federal securities laws.

Although we believe the statements are reasonable, we can provide no assurance that they will prove to be accurate because they are perspective in nature. During this call, we’ll also discuss certain non-GAAP financial measures, such as adjusted net income and adjusted EBITDA. We believe these measures provide meaningful supplemental information regarding our operational performance, by excluding noncash items and onetime charges that may not be indicative of our core business. Please refer to the reconciliation tables in our press release and SEC filings for the most directly comparable GAAP measures. Actual results could differ materially from those we discuss today and therefore, we encourage you to carefully review the most recent report on Form 20-F and other SEC filings for risk factors that could materially impact our results.

As I mentioned, the earnings release is available today on our website at investors.toyo-solar.com. With those formalities now out of the way, it’s my great pleasure to turn this call over to Onozuka-san, our Chief Executive Officer. Onozuka-san, please go ahead.

Takahiko Onozuka: Thank you, Crocker. 2025 was the year of decisive action for TOYO. We doubled our operational scale while navigating one of the most volatile trade environment in decent memory. By strengthening our position as a particularly integrated solution provider, we have built a resilient foundation capable of navigating persistent market headwinds and rapidly shifting regulatory landscape. Our record-breaking revenue of over $427 million, a 142% increase over 2024 is a clear validation of our strategic pivot toward high demand and compliant manufacturing hubs. The primary engine of this growth was the rapid ramp-up of our 4 gigawatt Ethiopia facility, which was completed in October 2025 and is now running at full nameplate capacity.

During fiscal year 2025, we successfully shipped 2.3 gigawatts from Ethiopia to our U.S. end customers while an additional 1.9 gigawatts of solar cells were dispatched from our Vietnam facility to international markets. As we entered 2026, Ethiopia has provided our U.S. utility scale customers with high efficiency, policy-compliant solar cell technology and we are on track to deliver 4 gigawatts of solar cell from this facility in the coming year. In the fourth quarter of 2025, we launched commercial operation at our new 1 gigawatt module facility in Houston. Last year, we delivered 249 megawatts of module, inclusive of American-made module and those supplied by our OEM facility overseas. By scaling our domestic module production, while maintaining our global reach, we ensure that TOYO can provide the right mix of products our customers require from the right location with 0 lead time friction.

Our intent is to scale up production continuously in 2026 and invest to expand capacity in Houston to 2 gigawatts by 2026. In September 2025, we acquired the well-established VSUN brand from our sister company, a strategic move to streamline and unified TOYO operation by bringing the VSUN plans fully under our umbrella. We have successfully migrated the VSUN sales and marketing team, IP, brand and the certification to TOYO, and we are now innovating all existing customers to become direct customers of TOYO as we complete clarification. Acquiring the VSUN brand has allowed us to accelerate TOYO growth and gives our clients flexibility to choose the sourcing that best fits their individual needs. This acquisition was made without any dilution to TOYO shareholders, while the production assets being with VSUN.

Looking ahead, we will continue to work closely with our industry partners to migrate the sourcing of key components to the U.S. wherever possible, further strengthening our supply chain and laying forth our commitment to American manufacturing. I will now turn the call over to our CFO, Rhone Resch, to review our strategy for 2026.

Rhone Resch: Thank you, Onozuka-san. It’s a great honor to be joining TOYO, and I look forward to meeting our shareholders over the coming months and quarters. As you know, this was a challenging year for many solar companies. To be able to more than double our revenue while dramatically increasing gross margins, EBITDA and adjusted net income validates that TOYO has the right strategy in place, combined with exceptional execution capability. Turning to our strategic road map for 2026. TOYO is entering a phase of significant operational scaling designed to meet the accelerating demand in the U.S. solar market. For the full year 2026, we are initiating shipment guidance of between 5.5 and 5.8 gigawatts for solar cells and 1 to 1.3 gigawatts for solar modules.

This growth is supported by a robust order book and a favorable domestic policy environment that continues to prioritize high-efficiency traceable technology. Our primary operational focus for 2026 is maximizing our existing infrastructure. Our Ethiopia cell facility is now positioned to run at full nameplate capacity, providing the high-efficiency solar cells that are the backbone of our utility scale offerings. Simultaneously, our Houston module facility is aggressively ramping up its initial 1 gigawatt of module capacity to meet localized demand. To further solidify our domestic footprint, we plan to add an additional 1 gigawatt of module capacity in Houston during 2026, which will bring our total U.S. module capacity to 2 gigawatts. The next phase of our U.S. expansion involves building out a domestic cell production.

We are currently in the final stages of the planning process and anticipate disclosing further details regarding our operational road map in the near future. Financially, we are targeting a 2026 adjusted net income of approximately $90 million to $100 million despite increasing very substantial investments in R&D and technology this year. These costs are a deliberate choice. They align directly with our core commitment to establish a robust technology leadership position within the United States. We aren’t just building capacity we are building the IP foundation that will define the next generation of American solar energy. TOYO is now uniquely positioned with the domestic capacity, the traceable supply chain and the technical IP to lead this transition profitably.

I will now turn the call over to our CFO, Raymond Chung, to review our financial results. Raymond?

Taewoo Chung: Thank you, Rhone. So for full year 2025, revenues were $427 million, representing 142% year-over-year increase from the prior year. This growth was primarily driven by $241 million increase in solar sales and a $7.6 million increase in module sales. For the full year 2025, cost of revenue was $331 million, a 113% increase from $155 million in the prior year. Cost of revenue grew at a slower pace than revenue, driven by a higher mix of sales to U.S. end customers with stronger average selling prices. Gross profit increased by 340% to $96.3 million in 2025, up from $21.9 million in 2024. Gross profit margin expanded to 22.5% from 12.4% in 2024. Margin expansion was driven by a higher proportion of sales to U.S. end customers with stronger pricing.

For full year 2025, operating expenses were $37.3 million compared to $30 million in the prior year, representing an increase of 186% year-over-year. Selling and marketing expenses were $5.9 million compared to $1.6 million in 2024. The increase was primarily driven by higher sales commissions in line with revenue growth. General and administrative expenses were $31.4 million an increase from $11.4 million in 2024. The increase was primarily due to $13.7 million in noncash share-based compensation issued to management, directors and consultants. Administrative costs also rose as the company scaled its workforce and infrastructure to support the full activation of our Ethiopia and Texas manufacturing plants. EBITDA was $95.8 million in 2025, representing a 40% increase from $68.2 million in the prior year.

This was driven by record shipment volume and enhanced operational scale across our global facilities. Non-GAAP adjusted EBITDA, excluding share-based compensation and changes in fair value of contingent consideration payable to earnout shares was under $110.8 million for 2025, up by 228% compared to $33.8 million for the same period in the prior year. Net income was $37.2 million for 2025 compared to a net income of $40.5 million for the same period last year. Adjusted net income, excluding share-based compensation in 2025 and changes in fair value of contingent consideration payable related to earnout shares in 2024 was $52.2 million compared to $6 million in 2024. Earnings per share basic and diluted was $0.98 compared to earnings per share, basic and diluted of $1.09 in the prior year.

Adjusted earnings per share, excluding share-based compensation in 2025 and changes in fair value of contingent consideration payable related to earn-out shares in 2024 was $1.48 per share in 2025 as compared to $0.20 per share in 2024. Turning to our balance sheet. As of December 31, 2025, the company had a $58.9 million in cash and restricted cash in total, compared to $17.2 million as of December 31, 2024. In 2025, TOYO generated cash flow from operations of $133 million with $92 million of CapEx invested across our Ethiopia cell facility and U.S. module operations. This level of cash generation provides us with a strong financial flexibility to invest in continuing to expand our fully integrated production platform in the U.S. as we expand our Made in America for American strategy.

For 2026, we expect adjusted net income to reach approximately $90 million to $100 million. With that, we will be happy to address your questions.

Q&A Session

Operator: [Operator Instructions]. Your first question comes from Amit Dayal with H.C. Wainwright.

Amit Dayal: Perhaps a fairly strong performance of ’25 and a positive outlook for 2026. Just in the context of gross margins, can you provide any color on how we should think about gross margins now that a share of revenues could potentially come from the U.S. market?

Crocker Coulson: [ Saska ], you want to translate that? And then I don’t know if Simon or Raymond wants to take that question.

Unknown Attendee: [Foreign Language]

Takahiko Onozuka: [Interpreted] Right. So we are not currently providing our gross margins hold for the year. But as the Ethiopia facility has come to operate at full capacity and our U.S. factory has come online. We believe that we will be able to continue to achieve very competitive margins in the market.

Crocker Coulson: Simon, any color you want to provide on that?

Simon Shi: Sure. Thanks, Amit, for the question. I think for 2025, we achieved a cross-border average gross margin around 25%, and we — we do hope to at least maintain these gross margin across group gross margin level going forward. And also just a remark to our — like our CEO just mentioned, we don’t really provide a breakdown of our gross margin for different markets. But we think our gross margin — our gross margin level is higher than the overall industry number. And also the numbers we have indicated through our — either historical number — historical financials and in the 2026 guidance, they are pre — they are pre the 45x, meaning the $0.07, 45x supposed to receive from — for our manufacturing are actually not taken into account in the guidance or in the historical financials.

Amit Dayal: Yes, that was I was going to ask about the credits in the U.S. market. So for 2026, will you potentially be receiving credits for the at capacity or potentially 2 gigawatts capacity? Just any color on that would be helpful.

Simon Shi: Sure. Actually, we are running cautious on giving out the guidance for our Houston production. As mentioned, we are currently running — sorry, 1 gigawatt capacity over there. And we are hoping to achieve at least 60% to 70% utilization of the capacity in Houston based on the current nameplate capacity. And the additional 1 gigawatt, as mentioned by our CEO, this is a new investment plan that’s happening in progress in our Houston facility. Now we are hoping to see a pilot production for the extra 1 gigawatt from third quarter or latest the fourth quarter of this year. So that could be an actual contribution to the delivery from Houston. However, we are not taking that into account for our guidance for the moment.

Amit Dayal: Okay. Understood. And just maybe last one for me. Will you be sort of hosting quarterly earnings call going forward? Or will this be sort of every 6 months? How should investors think about sort of reporting and just engagement with the investor community going forward now that the business is most sums in place to provide a little bit more comment to investors more frequently, I guess?

Simon Shi: Yes, sure. Thanks. That’s very helpful. Yes, Amit, the short answer is, yes, we are planning to report quarterly from this year. So hopefully, we can get our first quarter number released May of this year. And on a going forward basis, where we will continue to report quarterly starting from this year.

Operator: We have no further questions at this time. Crocker, I’d like to turn the conference back over to you.

Crocker Coulson: Yes. Let’s just give one more chance for people to ask questions, operator. And then if we don’t have further, I’ll wrap it up.

Operator: Absolutely. [Operator Instructions]. We have no questions — and we have no questions.

Crocker Coulson: Great. Thanks, Christa. So we appreciate everyone taking the time to join us on the call today. As you can tell, the whole team is very excited about what’s ahead for TOYO in 2026 and in the years beyond. We’re also thrilled to have a strengthened management team going into this year with Rhone Resch joining us, and he’ll be based primarily in the U.S. So we will be more available to meet with investors going forward. If you have questions you’d like to ask that you didn’t have a chance to get to on this call, please reach out to me, and I’m happy to either respond or arrange a follow-up call with management or a visit next time that we have a future trip to the U.S. Thank you, everyone, and have a fantastic day.

Operator: Ladies and gentlemen, this does conclude today’s call. Thank you for joining, and you may now disconnect.