TOYO (NASDAQ:TOYO) reported higher revenue, profitability and cash generation for the first half of 2026, while management said trade-policy developments and U.S. Customs and Border Protection reviews have created uncertainty around the company’s second-half outlook.
For the first six months of 2026, the solar manufacturer reported revenue of approximately $261.0 million, up 87.6% from $139.0 million in the prior-year period. Net income rose to approximately $45.8 million from $2.5 million a year earlier, while basic and diluted earnings per share were $1.21 and $1.20, respectively, compared with $0.08 in the first half of 2025.
Margins Expand as Revenue Scales
Chief Financial Officer Yasunari Harada said first-half gross profit increased 267% to approximately $84.7 million, compared with $23.1 million in the year-earlier period. Gross margin expanded to 32.5% from 16.6%, which management attributed to higher sales of solar cells and modules, OEM service revenue, expanded capacity, improved production consistency and a greater mix of higher-average-selling-price U.S. sales.
Second-quarter revenue totaled approximately $118.2 million, an increase of 35.0% from $87.6 million in the second quarter of 2025. Gross profit more than doubled to approximately $37.0 million, and gross margin improved to 31.3% from 20.9%.
Second-quarter net income was approximately $17.4 million, compared with $6.2 million a year earlier. Basic and diluted EPS were $0.46 and $0.45, respectively, compared with $0.16 for both measures in the prior-year quarter.
Harada said general and administrative expenses increased as the company scaled operations at its Houston solar-module facility and added headcount. First-half non-GAAP EBITDA was $82.1 million, compared with $21.5 million a year earlier, while adjusted EBITDA was $82.3 million, up from $22.8 million.
As of June 30, TOYO held $123.4 million in cash and restricted cash, compared with $85.9 million at year-end 2025. Working capital turned positive at $29.8 million, from a deficit of $123.9 million at Dec. 31, primarily due to a loan extension agreed with a related party in June. The company generated $61.4 million in operating cash flow and spent $27.8 million on capital expenditures during the first half.
TOYO also raised approximately $52.6 million in net proceeds during the first half, including $47.1 million through a registered direct offering that closed June 25 and approximately $5.5 million through its at-the-market program.
Section 232 Policy Could Support U.S. Strategy
Chief Strategy Officer Rhone Resch discussed President Donald Trump’s Aug. 6 Proclamation 11052, which addresses imports of polysilicon and derivatives. The proclamation establishes minimum import prices for polysilicon, ingots and wafers, solar cells and modules, as well as an additional tariff on certain downstream products. The measures are scheduled to take effect Dec. 4, 2026.
Resch said TOYO believes the policy aligns with its strategy of using U.S.-produced inputs, developing a non-China supply chain and investing in U.S. manufacturing. The company intends to pursue an investment-linked onshoring plan with the Commerce Department that could authorize duty-free imports of eligible equipment and covered products in volumes tied to a company’s domestic investment.
According to Resch, approximately 70% of the polysilicon used in TOYO’s Ethiopian production currently comes from a U.S. supplier, with the remainder sourced from OCI production in Malaysia. The company is working toward using 100% U.S.-produced polysilicon at its Ethiopian facility by the fourth quarter.
Management said the financial impact of the Section 232 framework will depend on Commerce approval, eligible volumes and duration of duty offsets, market conditions, customer contracts and the company’s cost structure. TOYO did not quantify the potential impact or provide a timeline for approval of an onshoring plan.
Texas Cell Facility Advances
TOYO is proceeding with plans to invest approximately $357 million in a heterojunction, or HJT, solar-cell facility in Humble, Texas, outside Houston. The initial phase is designed for approximately 1.5 gigawatts of annual production capacity.
The company is targeting pilot production in the fourth quarter of 2027 or first quarter of 2028. At full operation, the plant is expected to support approximately 400 direct jobs. Resch said TOYO has secured principal equipment and is advancing permitting, contractor selection, engineering and other development work.
TOYO’s Houston module facility remains on track to reach approximately 2 gigawatts of annual capacity in September, management said. The company also said a third-party analysis indicated that Toyo Solar Texas expects to qualify for Section 45X advanced manufacturing production credits for tax year 2025, though it will quantify the benefit only after tax, legal and accounting work is completed.
CBP Reviews and Guidance Remain Uncertain
Management said the timing of some shipments from Ethiopia was affected during the quarter by CBP documentation and admissibility reviews related to Uyghur Forced Labor Prevention Act compliance. Resch said the first detention occurred in the second quarter and described the total amount detained as not significant.
He said TOYO has provided supply-chain documentation tracing materials from polysilicon sourcing through wafer conversion, cell production and U.S. entry. Resch said the company does not use Chinese-origin wafers in Ethiopian cell production and sources all polysilicon for that production outside China.
Commerce has also initiated a countrywide anti-circumvention inquiry related to certain solar cells and modules completed in Ethiopia using Chinese-made components. TOYO said it is participating in the inquiry and will provide information on its sourcing, investment, manufacturing operations and Ethiopian value-added activity.
When asked about the company’s previously issued full-year outlook, management said it had not reaffirmed the guidance. The company said it would provide updates after gaining more clarity on the CBP reviews and its Section 232 discussions with Commerce.
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.
