TOYO 2026财年第二季度业绩电话会：营收增长35%，美国业务扩张稳步推进

核心要点

• 2026财年第二季度营收同比增长35.0%至1.182亿美元，同时净利润从620万美元增至1740万美元。
• 上半年营收增长87.6%至2.610亿美元。在产能扩大、生产效率提升以及平均售价较高的美国市场销售占比增加的支撑下，毛利率由16.6%扩大至32.5%。
• 上半年净利润达4580万美元，上年同期为250万美元。Non-GAAP调整后EBITDA从2280万美元增至8230万美元。
• 由于美国海关与边境保护局（CBP）审查解决的时间以及根据《232条款》与商务部谈判的不确定性，TOYO未重申其此前的2026财年业绩指引。
• 该公司正推进其位于德克萨斯州谦逊城（Humble）价值约3.57亿美元的HJT太阳能电池工厂建设。规划初始年产能约为1.5 GW，试生产目标定于2027年第四季度或2028年第一季度。
• 管理层认为《232条款》框架支持TOYO的美国制造战略，但表示其财务影响取决于商务部的批准、符合条件的进口量、抵扣期限、市场状况及客户合同。

关键财务业绩

截至2026年6月30日，TOYO持有1.234亿美元的现金及受限现金，高于2025年12月31日的8590万美元。营运资金从赤字1.239亿美元转正至2980万美元。上半年经营活动现金流为5140万美元，而资本支出总计为2780万美元。

业务与运营表现

上半年的增长受到太阳能电池及组件销量增加以及代工服务收入启动的推动。来自美国终端客户的收入增长153.9%，占上半年总收入的80.7%。

第二季度，组件销量增加和代工服务收入增长被太阳能电池销量的下滑部分抵消。管理层表示，贸易政策的不确定性影响了从埃塞俄比亚发货的部分出货时间，但同时强调底层客户需求并未改变。

TOYO位于休斯敦的组件工厂仍按计划将于2026年9月达到约2 GW的年产能。规划中的Humble HJT工厂预计将增加约1.5 GW的年电池产能，并在满负荷运营时提供约400个直接就业岗位。公司已锁定主要设备，并正在推进许可办理、工程设计及承包商选择。

TOYO目前在埃塞俄比亚生产中使用的多晶硅约有70%采购自一家美国生产商，30%采购自马来西亚的OCI。管理层正致力于在2026年第四季度前，使埃塞俄比亚工厂使用的多晶硅100%源自美国。公司还表示，其2026年的硅片供应来自非中国产能，包括一家指定的印度尼西亚工厂。

管理层展望

TOYO未重申其此前发布的2026全财年业绩指引。管理层表示，需要进一步明确两个近期问题：CBP审查解决的时间，以及与美国商务部可能达成的针对该公司的《232条款》协议条款。

《232条款》措施计划于2026年12月4日生效。TOYO打算推行一项与投资挂钩的本土化回流计划，最初以价值3.57亿美元的Humble工厂为核心。如果获得批准，关税抵扣可降低符合条件的进口成本、保留营运资金，并有助于资助美国制造业务的扩张。

管理层表示，现在对2026财年下半年或全年的业绩影响进行量化还为时过早。TOYO还预计，只有在完成相关的税务、法律和会计工作后，才会评估潜在的第45条（Section 45）先进制造生产税收抵免。

风险与关注领域

• CBP的文件证明和入境资格审查推迟了部分货物的出货，不过管理层表示进口并未完全中断。
• 被扣留货物的放行时间仍不确定。管理层对2026年第三季度期间放行表示乐观。
• 美国商务部已对含有中国产零部件的某些埃塞俄比亚太阳能电池和组件发起了全国性反规避调查。TOYO正在参与该项审查。
• 《232条款》本土化计划的优惠权益仍需获得商务部批准，包括符合条件的产品、进口量、时间安排和条件。
• 较高的运营费用反映了休斯敦工厂规模扩大及员工人数增加。上半年一般与行政费用升至2230万美元。

分析师问答要点

管理层表示，CBP正在审查TOYO从最初的多晶硅和石英岩原料来源到硅片加工、电池生产以及进入美国的整个供应链文件。公司预计在CBP完成多项评估并熟悉其供应商和可追溯性控制措施后，审查流程将会加速。

关于《232条款》，管理层预计与商务部针对具体公司的谈判将持续至2026年秋季。管理层表示，价格影响因制造商而异，且很大程度上取决于获批的关税抵扣。管理层将0.38美元描述为可能的组件最低进口价格下限，但警告称商务部可能会在实施前调整该框架。

当被问及《232条款》是否会改变资本支出时，管理层表示TOYO正在推进Humble HJT项目，并认为该政策可能会鼓励公司考虑更快或更广泛地扩展美国上游业务。

针对第二季度营收环比下降，管理层指出，尽管总营收继续保持同比增长，但太阳能电池销量下降以及销售结构转变是主要原因。

业绩电话会议完整文字记录

完整财报电话会议逐字稿

管理层陈述

Operator

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., Ltd. Second Quarter 2026 Earnings Conference Call. [Operator Instructions]

I would now like to turn the call over to Crocker Coulson, Investor Relations for TOYO. Mr. Coulson, please go ahead.

Crocker Coulson

Thank you, Carli. 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 Onozuka, TOYO's Chairman and Chief Executive Officer; we have Rhone Resch, the company's Chief Strategy Officer; and we also have Mr. Yasunari Harada TOYO's Chief Financial Officer. After their prepared remarks are concluded, we're going to open up the floor for any questions that you have today. But before we begin, I'd like to point out the financial results discussed on this call for the second quarter 2026 and first half of 2026 and the corresponding periods in 2025 are unaudited. and some of the statements in this teleconference are forward-looking within the meaning of federal securities laws.

Although we believe these statements are reasonable, we can provide no assurance that they will prove to be accurate because they are prospective in nature. During this call, we're also going to discuss certain non-GAAP financial measures such as EBITDA, adjusted EBITDA and adjusted net income. 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 performance. Actual results could differ materially from those we discuss today. We, therefore, encourage you to review our most recent annual report on Form 20-F, 6-K and other SEC filings for risk factors that could materially impact our results.

With those formalities now out of the way, it's my great pleasure to turn this call over to Onozuka-san, TOYO's Chairman and CEO. Onozuka-san, please take it away.

Takahiko Onozuka

Thank you, [indiscernible]. We have increased with our first half 2026 results, which reflects the continued strength in our global manufacturing platform and the growing demand we are seeing across markets. Let me walk you through the headline numbers at high level. Revenue for the first half of 2026 was approximately $361.7 million an increase of 87.6% year-over-year from $139.1 million in the first half of 2025. The increase was primarily driven by higher solar cells and high solar module sales together with the commencement OEM services.

Revenue from end customers in the United States increased 153.9% to approve 310.5 billion. and represented 80.7% of first half revenue. Gross margin for the first half of 2026 expanded to 32.5% up from 16.6% in the prior year period, reflecting expanded production capacity, improve the production resistancy and the greater mix of higher average selling price U.S. sales.

Net income for the first half of 2026 with approximately 45.8 million compared to $2.5 billion in the first half of 2025. [indiscernible] per share, basic and diluted of $1.21 and [indiscernible] respectively compared to $0.8 billion in the first half of 2025. For the second quarter 2026 revenue was extra $118.2 million, up 35% year-over-year, with net income for the second quarter of 2026 effects of apximately USD 17.4 million compared to $6.2 million in the second quarter of last year.

The recent Session 232 determination by the Trump administration on scan and its derivatives is on balance, a positive development for TOYO and therefore, U.S. solar manufacturing in the U.S. market. We expected to support strong motor pricing, and we anticipate that solar cell produced our [indiscernible] facility will be sale for the ready and the framework now taking shape.

We are engaged with the department of commerce as to terms are finalized. So why we are optimistic about the net effect on our second half and year-end 2026 results, we are not yet in a position to quantify it. We will go by further updates on a more credit and logic. As you see in our results, trade policy uncertainty also affected the pace of some segment from our [indiscernible] facility during the quarter. Lon will speak to that in a moment, but I want to be clear from that. This rebrick the timing issue tied to an active regulatory process. and not the change in underlying customer demand.

At the same time, we are excited to move forward with the expansion of junction or HT solar cell capacity in Hamburg Texas. Our project, we believe, will be crucial not just for TOYO, but for the broader push to build a scale competitive U.S. solar manufacturing base. I will now turn the call over to our CFO, Rhone Resch, to walk through that project in more detail along with the broader strategy and the environment policy environment.

Rhone Resch

Thank you very much, Onozuka-san and good morning, everyone. This morning, I'd like to address the Section 232 proclamation, which as you know, is less than 2 weeks old and specifically mention how it reinforces our U.S. strategy. I want to talk a little bit about our HJT expansion and our broader U.S. manufacturing platform and provide an update on CVP and the Ethiopia anticircumvention inquiry. On August 6, the President issued proclamation 11052, addressing imports of polysilicon and its derivatives.

Proclamation establishes minimum import prices for polysilicon and gets on wafers solar cells and modules together with an additional tariff on specified downstream products. These measures take effect on December 4 2026. We believe the proclamation validates the strategy TOYO has been pursuing that is increasing our use of U.S.-produced inputs, developing a transparent allied nation supply chain and investing directly in U.S. advanced manufacturing.

Importantly, the proclamation creates an investment-linked onshoring program that can effectively offset the new Section 232 duties for qualified companies. Under an improved company-specific plan, Commerce may authorize duty-free imports of necessary production equipment and covered products and volumes it determines are commensurate with the company's U.S. investment. The proclamation also recognizes the importance of U.S.-produced polysilicon Commerce may vary the benefits available under an approved onshoring plan based in part on the use of U.S.-produced polysilicon. That is particularly relevant to TOYO because approximately 70% of our polysilicon currently used for our Ethiopian production is supplied by a U.S. producer.

The remaining 30% is produced by OCI in Malaysia, and we are working towards 100% U.S. polysilicon at the Ethiopian facility by the fourth quarter of this year. We intend to pursue an onshoring plan initially centered on our announced $357 million HJT cell facility in Humble, Texas. Our strategy is to use the economic value created by approved duty offsets, including lower import costs and preserved working capital to help fund the construction and expansion of our U.S. manufacturing facilities. In the near term, eligible imports would support our operating U.S. business model. And over time, the resulting economic benefit would help accelerate domestic cell production and potential upstream manufacturing.

This structure creates a reinforced investment cycle. First, TOYO imports compliant cells made with U.S.-produced polysilicon to supply our American module operations. Second, if Commerce approves our onshoring plan, the resulting duty offsets would preserve capital that can help fund our U.S. factory expansions. And finally, as those factories come online, TOYO will progressively move more cell and upstream manufacturing into the United States. The minimum import prices established by the proclamation are above recent market benchmarks for cells and modules, and we believe this framework could support a stronger and more rational U.S. pricing environment.

TOYO may be particularly well positioned because an approved onshoring plan could offset Section 232 duties on eligible imports and commerce may provide greater benefits for products incorporating U.S. produced polysilicon. If approved and implemented as intended, this combination would allow TOYO to benefit from stronger market pricing while mitigating a significant portion of the associated import costs. That could improve our unit economics and support gross margins, while preserving additional capital to help fund the construction and expansion of our U.S. facilities.

The ultimate financial effect will depend on Commerce's approval, the volume and duration of any offsets market conditions, customer contracts and our cost structure. But we believe our significant U.S. investment, substantial use of U.S.-produced polysilicon and commitment to additional domestic manufacturing positions too well under the onshoring framework. Approval, eligible products, import volumes, timings and conditions will ultimately be determined by commerce, but the structure of the program is closely aligned with the strategy TOYO is already executing.

I now want to turn to our HJT project. They mentioned Toro plans to invest approximately $357 million in an advanced Heterojunction solar cell facility in Humble, Texas, which is just outside of Houston. The initial phase is designed for approximately 1.5 gigawatts of annual production capacity. We selected HJT technology because customers increasingly value its higher efficiency strong energy yield and performance across a range of operating conditions. HJT also provides Toyo with an advanced manufacturing platform that can support the future development and production of perovskite silicon tandem cells, positioning us to serve evolving customer needs and participate in the next generation of high-performance solar technology.

We are targeting pilot production in the first -- the last quarter of 2027 or the first quarter of 2028 and expect the facility to support approximately 400 direct jobs at full operation. We have secured the principal equipment and our advancing permitting, contractor selection, engineering and other development work. This facility is intended to bring next-generation cell manufacturing and R&D to the same U.S. campus as our module operations. Our Houston module facility remains on track to reach approximately 2 gigawatts of annual capacity in September of this year, building on the capacity already operating today.

Together, these investments are building an increasingly integrated U.S. platform. We are using U.S. polysilicon today, expanding domestic module capacity to approximately 2 gigawatts and developing advanced HJT cell manufacturing and R&D capabilities and building a foundation for future paroskyte silicon tandem cell production. This represents a long-term commitment to American solar manufacturing market. Based on a third-party analysis announced on July 21, TOYO Solar, Texas expects to qualify for Section 45 advanced manufacturing and production credits for tax year 2025, and we are in the process of obtaining a similar third-party tax compliance report covering our 2026 tax credits.

We will quantify that potential benefit only after the relevant tax, legal and accounting work is complete. As Onazuka-san mentioned during the quarter by CBP reviews, these documentation and admissibility reviews are part of the trade compliance environment for all solar products entering the United States. We are working closely with CBP and have provided the information requested to verify our supply chain. TOYO maintained detailed records designed to trace materials from the original polysilicon source through wafer conversion, cell production and the applicable U.S. entry.

Based on the strength of our sourcing controls and documentations, we remain confident in our compliance approach. Separately, Commerce has initiated a countrywide anticircumvention inquiry concerning certain solar cells and modules completed in Ethiopia using parts for components manufactured in China. TOYO is participating fully and will provide commerce with the relevant information concerning our sourcing, investment, manufacturing operations and value-added in Ethiopia.

I want to be clear about our current production though. TOYO does not use Chinese origin wafers in its Ethiopian cell manufacturing. Our 2026 wafer supply comes from non-China production, including a designated facility in Indonesia. In addition, 100% of the polysilicon for this production is sourced outside of China, as I mentioned before, with approximately 70% currently coming from U.S. producer and approximately 30% from OCI's Malaysian production. Our Ethiopia facility is a substantial manufacturing platform and employs approximately 1,800 people and performs the full wafer to cell production process.

We believe these facts position TOYO well while recognizing that Commerce's review remains ongoing. We will continue to cooperate and we'll update investors when appropriate. Our objective is to become a trusted U.S. manufacturer built around advanced Japanese technology, verifiable non-China sourcing and increasing the use of American inputs and expanding production in the United States, engineered in Japan built in America.

I will now turn the call over to our CFO, Harada Yasunari to review our financial results in more detail. Harada Yasunari?

Harada Yasunari

Yes. Thank you, Ron. Before I begin, I'd like to say that I'm very aggressive joining today's call. This is my first earnings call since joining Toyo as CFO on dry first. And I look forward to getting to know many of you on the line. Let me start with the second quarter of 2026. Revenue for Q2 2026 was approximately $118.2 million, representing year-over-year growth of 35.0% from $87.6 million in Q2 2025. The increase was primarily driven by increased solar module sales and OEM service levies. -- partially offset by lower solar sales during the quarter. Coastal revenue was approximately $1.2 million in Q2 2026 compared to $169.3 million in Q2 2025. The -- gross profit was approximately 37.0 million, an increase of 102.2% from $18.3 million in Q2 2025.

Gross margin includes to 31.3% in Q2 2026 from 20.9% in Q2 2025. Total operating expenses -- for Q2 2026 were approximately $14.4 million compared to $7.3 million in Q2 2025, including $1.6 million in selling and marketing expenses for Q2 2026 compared to $2.1 million for Q2 2025 and $12.8 million in general and administrative expenses for Q2 2026 compared to $5.3 million for Q2 2025. Net income for Q2 2026 was approximately $17.4 million compared to $6.2 million in Q2 2025.

Earnings per share basic and diluted. For Q2 2026 was $0.46 and $0.46 and $0.45 respectively, compared to 0.16 for both basic and diluted in Q2 2025. Coming to the first half of 2026. Revenue was approximately $261.0 million for the first half of 2026, representing year-over-year growth of 87.6% from $139 million in the first half of 2025. The increase was primarily driven by higher solar sales cars, to Rambus tires and OEM service living. Cost on revenue was approximately 176.2 million for the first half of 2026 compared to $116.0 million in the first half of 2025.

Gross profit was approximately $84.7 million for the first half of 2026, an increase of 267% from $23.1 million in the first half of 2025. Gross margin nearly doubled to 32.5% for the first half of 2026 from 16.6% for the first half of 2025. Total operating expenses for the first half of 2026 was approximately $25.9 million compared to $13.4 million for the first half of 2025. including $3.6 million in selling and marketing expenses and $22.3 million in general and administrative expenses.

The increase in general and administrative expenses primarily reflect the scale up of operations at our Houston, Texas [indiscernible] facility. An increase in head count to support growth. Non-GAAP EBITDA for the first half of 2026 was $82.1 million, compared to $21.5 million in the first half of 2025. The improvement was driven by our revenue scale, the gross margin led from 16.6% to 32.5%. Non-GAAP adjusted EBITDA for the first half of 2026 was 82.3 million compared to $22.8 million for the first half of 2025. Net income for the first half of 2026 was approximately $45.8 million compared to $2.5 million in the first half of 2025.

And net income attributable to TOYO shareholders was $45.8 million for the first half of 2026, compared to $3.5 million in the first half of 2025. Non-GAAP adjusted net income for the first half of 2026 was $46 million. compared to $3.9 million in the first half of 2025. Earnings per share, basic and diluted for the first half of the year 2026 was 1.21 and $1.20, respectively, compared to $0.08 in the first half of 2025. As of June 30, 2026, the company held $123.4 million in cash and restricted cash, including noncurrent restricted cash, this compares to $85.9 million as of December 31, 2025.

Our working capital turned positive at $29.8 million compared with the deficit of $123.9 million at December 31, 2025, primarily reflecting our loan expansion agree with a related party in Germany. We generated cash from operations of $51.4 million and incurred capital expenditure of $27.8 million. for the past half of 2026. During the first half of 2026, we raised approximately $53.6 million in net proceeds. $47.1 million from registered direct offering debt crossed on June 25 and approximately $5.5 million from at the market offering.

Separately, through the June 2026, last year indexed the constitution TOYO was added to the bulk later 3000 index and the last MicroCap Index, which we view on the meaningful respect powering broad institutional visibility. That concludes our financial rate.

Unknown Executive

Great. Thank you, Hirata-san. So operator, I think we're now ready for Q&A. So if you could provide listeners with instructions as how they can answer your questions, and we'll be happy to address any questions.

Operator

[Operator Instructions] Your first question is from Philip Shen with ROTH Capital Partners.

分析师问答

Philip Shen

I wanted to get some additional color on the CBP situation. I just wanted to see like when do the retention starts -- how long do you expect them to continue? And then what could the impact be for Q3 and Q4 were 2/3 or halfway through the third quarter at this point. And so I was wondering, should we expect similar type levels of revenue and shipments for Q3? Or do you think they could be meaningfully lower -- and if you can put this all in the context of your previously issued full year '26 guide?

Unknown Executive

Ron, do you want to take the first part of that with respect to the status on the CBP.

Rhone Resch

Yes, absolutely. This is fairly straightforward. As you know, CDP monitors leader force labor protection compliance for all module manufacturers. We'll go through this there's kind of a natural process of them getting to know Too and our supply chain. So they started earlier this year in with the first detention. The total amount is not all that significant, but regardless, our approach as a company is to make sure that we work closely with CBP. A and that we provide them with all the information requested. And so as we go through the process, they want to know, obviously, where our polysilicon comes from, as I mentioned, it's 70% U.S., it's 30% OCI, but they want to know all the way up to where the court site was mined.

And so providing that information to them is something that we're able to do, and we've done and then going through the process of getting comfortable kind of with our full supply chain. What happens over time is CBP develops a relationship, not just with us, but also with obviously our suppliers so that they feel comfortable that, okay, you're using a U.S. polysilicon provider, and it's coming out of these mines. We're familiar with those mines. Those are acceptable and you get to an expedited path, which takes place after about 4 reviews or so. And so we're going through that process, and we've had, again, a very open constructive conversation and dialogue with CBP and we're optimistic that we will see the detentions be released in this quarter. but the exact timing is a little bit unclear.

It's an administrative process with a government agency and sometimes it takes a little bit longer than we would like. But certainly, we're able to provide them with all the information they are looking for. So we're optimistic that it will alleviate itself soon.

Unknown Executive

And cracker, I'll let you or Paradiso answered the other question.

Unknown Executive

So maybe, Sacha, do you want to translate the question just so we're clear on the impact on anticipated impact on Q3 and Q4 results and maybe why the company has not explicitly reaffirmed guidance on this call.

Unknown Analyst

[Foreign Language]

Unknown Executive

Thank you for your question. Given the near-term uncertainty of the situation, we believe the outlook remains uncertain, and we have not reached the point of the appropriate timing to change your guidance.

Unknown Analyst

[Foreign Language]

Unknown Executive

and so again, although we cannot say that what the effect of the situation will be on our guidance currently. We will provide updates as we know more and it's appropriate to do so.

Unknown Executive

So I think in summary, we have a couple near-term events. One is the resolving strain with CBP. And then the other is the potentially positive negotiations with respect to 3 and the company wants to get through these issues before providing more clarity on the second half of the year.

Unknown Analyst

Okay. Is it fair to say that the previously issued 2026 guidance?

Unknown Executive

Sorry, can you repeat the last word? I couldn't hear you.

Unknown Analyst

It is off the table. So is the previously issued guidance no longer relevant?

Unknown Executive

Well, I'd say we have not reaffirmed it on the call today, and we're waiting for some clarity before we come back with updates to investors.

Unknown Analyst

Okay. Got it. Moving on to the 232. I wanted to get a feel for when commerce might approve your ability to access the tariff rebate program based on your anticipated CapEx in Humble, Texas?

Unknown Executive

Ron, why don't you take that 1 kind of without making any promises for the administration, say what you can about where we are in that product.

Rhone Resch

Yes. Sure, Phil. As you know, the 232 was released, what, less than 2 weeks ago. And so commerce is still, let's call it, putting together the process by which they are meeting with companies and evaluating kind of our plans -- this is a program that they have in place kind of in perpetuity. And they said very clearly and the proclamation that projects need to begin construction by January 20 of 2029. So with respect to TOYO we clearly met with Commerce multiple times through this whole process. We -- they're very familiar with the company, what our initial plans are we will have preliminary meetings and conversations with them in the next week. And then we expect to be sitting down with them after kind of the Labor Day time frame. -- and working with them on kind of an individual company-specific plan. Again, this doesn't kick in until December 4 or so.

So I would expect companies to be negotiating through this time period, basically the rest of the fall with commerce to come up with their own individual programs. I think the key is not that it's a rush to get that plan in place. It will be put in place. but let's make sure we do it right, right? And we have that the vision in place of what we're planning to do out through at least January 2029, as we sit down with commerce.

So I think the way to think about it is companies need to go to the table with commerce in a way that presents kind of their whole vision of what the company plans to do within that time period.

Unknown Analyst

Great. Okay. And then 1 more for me. As it relates to customer conversations following the 232 signing a couple of weeks to -- can you give us some sense of how those conversations are going, what the dynamics look like? Are customers going to sign agreements today? Or do they want more clarity on how things will be implemented. And have you seen pricing move higher for modules and cells and so by water math?

Unknown Executive

Yes. As I mentioned, Phil, the 232 doesn't take effect until December 4. So there's no kind of direct duties that are being imposed immediately. Clearly, any contracts that were signed before the proclamation was put in place will be retained. But there's a lot of adjustments that are going to be made based on our company-specific discussions with Commerce with respect to the contracts that we have in place with customers with respect to the timing -- so there's still, I think, a lot of work to be done to make sure that everybody has the chance to both digest what the 232 means to them individually and then to make sure that we are kind of providing a solution for our customers that fits kind of their need.

So it's a little bit too early right now to talk about, I think, the pricing structure of what we're going to see out of the 232 is going to be company dependent. But as you and I have talked about before, a minimum price for modules at $0.38 is probably the floor. But again, we'll have to see as we get closer in each company, meaning manufacturer as well as customer, I think we'll have a different take and a different perspective on how the 232 will affect their customers. So a little too early, but we'll certainly come back with any material information as it develops in the next couple of weeks or months.

Unknown Analyst

Got it. Okay. So thank you. I know it's early and there's a lot to digest. But I was wondering how long do you think the market and the market needs to digest this? Is it past December 4? Or do you think things settle out in the next few weeks? Or does it take a few months.

Unknown Executive

I think it takes -- for manufacturers, it takes a few weeks to months. Again, a lot of it does depend upon the agreements that we developed with Commerce. As I mentioned, we're investing heavily in the United States. The offset program is designed to encourage investment in what Commerce has said, clearly, wafers, ingots and cells. And -- so from Toyos perspective, a lot of the pricing structure is going to be based upon ultimately what agreement we have with commerce. So what offsets can be achieved. -- if they're just a pure importer into the United States that minimum import price sticks and Commerce has been -- and CBP has been very clear that the value of that product that's being imported, they're going to look at very carefully.

And so the minimum import price for importers is probably going to be where the market settles at least for those companies that are importing modules purely. -- for companies like Toyo, who are manufacturing, there's a lot more flexibility and a lot more dynamic that will develop in the next couple of months. So I think you'll see a lot of forecast, a lot of analysts coming out with numbers but it's not going to be until December -- early December before we actually see what the pricing is going to be impacted by the 232. I think the other point to make here is that commerce can still adjust the minimum import price structure. They've been very clear about that. There's not been any adjustment yet, but I think there's a lot of comments coming into commerce with respect to what the MIPs are for modules and cells. And so you may see adjustments occur between now and December as well. So just again, a lot of moving parts, Bill, so it's almost impossible to tell. But each company will have their own structure, and I think it's worth asking them after they -- especially the manufacturers after they've had a chance to sit down with commerce.

Unknown Analyst

Brad, do you think it's fair to say that when we saw the proclamation that we were encouraged that the substance of our conversations had been reflected in some of the policies there.

Unknown Executive

Yes, absolutely. Crocker. I mean there's no doubt, again, we've worked closely with commerce process to help them understand what it takes to manufacture in the United States. -- and gets wafer cells in modules. And so the structure, we feel, is very much aligned with Pollo's manufacturing strategy, which is onshoring -- we do have the advantage of manufacturing cells right now that we can import into the United States. So we do have kind of a real product that we can offset Obviously, the equipment for expanded manufacturing can be offset as well.

And the fact that we use U.S. only silicon does put us in a different category for these discussions with commerce compared to other manufacturers. And that's -- I can't emphasize that enough because if you just step back a year and change the 232 is initiated by polysilicon manufacturers it's intended to support domestic polysilicon manufacturers. So that provision shouldn't be ignored. It should be should be recognized. And clearly, that is the intent of the overall transformation. -- support U.S. poly makers. So by us using U.S. poly, again, for 70% today in Ethiopia, going up to 100% later this year. It shows that we're very much aligned with what the administration's goals are out of the 232, and we look forward to working with Commerce.

Unknown Analyst

One last one, guys. As it relates to imports of your Ethiopian sells into the U.S. Is it fair to say that you are not importing any product now, meaning shipments are basically kind of on hold until you get through this review process.

Unknown Executive

Pno, no, I don't think so, Phil. We have had several detentions, but it's not a full stop of all of our products by any means. And so again, we're going through the process that we're providing CBP with all of the information all the way up to the courtside mining and everything in between. I mean I think the strength of our application or our response is the fact, again, we don't use Chinese poly. We don't use Chinese wafers we do a full processing of our cell in Ethiopia, and that's recognized by CBP. So the conversations we've had with them have been very productive. They understand what we're doing as a company. They understand the traceability that we use. So we -- again, it's hard to predict when it will be resolved, but the retentions that we do have are not -- we do think we'll move forward quickly and that we will be identified as a, let's call it, a good actor or preferred importer.

But again, we have to go through that process.

Unknown Analyst

Okay. Great. Thanks for everybody else. I'll pass it on.

Operator

Your next question comes from Amit Dayal with HC Wing.

Amit Dayal

Not much left, I guess, to ask on our side. The 232 decision, could this impact your CapEx plans and expansion plans for the U.S.? Or are you pressing ahead regardless?

Unknown Executive

Well, we're definitely go ahead. Yes, Ron, why don't you go ahead on where we are today on HT and maybe some other things that are under consideration, although early stage.

Rhone Resch

Yes, Amit, thanks for the question. I think that fully validate our manufacturing strategy in the United States and in fact, encourages us as a company to maybe think bigger and move forward faster. So our HJT plant is on schedule -- it's a 20-month build out. We will have a pilot operation either at the end of Q4 2027 at the beginning of 2028, which again, is quick, but in large part because we have the experience as a company of designing, building and ramping cell facilities around the world. We're unique in that capacity in the United States. There's very few companies who've done this before. And we've had great success in, again, building and ramping sell facilities. So the HJT plant is moving forward on schedule, on time. and is our primary announcement that we've made.

In our conversations with Commerce, they've been very clear. They view the full supply chain in the United States is critical. And again, the 232 is a national security initiative and the proclamation from the President does identify ingots, wafers and cells as key components of the supply chain. So I think what the takeaway is that the 232 encourages companies like Toyo to be thinking bigger, to be thinking upstream and to be bringing a, let's call it, a kind of a fully integrated manufacturing strategy to the table when discussing any types of offsets.

So I'll leave it at that unless you have anything to add, Crocker.

Crocker Coulson

Yes. I think for now we leave it at that. And of course, we encourage everyone to come to our Investor Day, October 6 in Humble, Texas and I think we'll provide a little bit more thoughts on our long-term road map there.

Unknown Analyst

Understood. And then with how everything is set up right now, the positioning relative to your available capacity, all of the, I guess, 232 related decision coming through -- do you think the second half could be better or similar to the first half? Like I know you're not providing guidance, but just trying to see what the setup looks like. And credits potentially come into play to support some cash flow improvements in the second half.

Unknown Executive

I think we're just going to have to follow back on what Hirata-san said earlier. -- which is we have 2 areas of uncertainty. One is how fast the issues with CBP get resolved. -- and then the timing to finalize the 232 agreement with Commerce. And I think those are there are 2 things that are kind of timing dependent. And for that reason, we will provide updates when we have a little bit more clarity on both those items.

Operator

Your next question is from Paul Sling Private Investor.

Unknown Attendee

Yes. Hello. Sorry, go ahead. Yes. So my question was the sequential decline in Q2 even after the Ethiopian facility was set to be sold out for the year. So why is the company lacking execution? And is it like a demand issue because the facility started 8 months ago and Q2 was very unexpected, to be honest.

Unknown Executive

So Ron, do you want to take that one? Or do you want me to take heroine.

Rhone Resch

Yes, why don't you have a radio on a.

Unknown Executive

So Tesco, can you translate for Harada-san? And the question is, what was the reason for the sequential even though we had strong year-over-year growth, what was the reason for sequential decline in Q2 and this year.

Unknown Analyst

[Foreign Language] ?

Unknown Executive

[Foreign Language] So the sequential decline in the first half, second half?

Unknown Executive

Yes. So there was a sequential decline in revenues from the Q1 of 2026 to Q2 of 2026. That's the investor wants to know the reason for that.

Unknown Executive

[Foreign Language] So this is Onozuka, CEO answering your question. In Q1, the revenues were more on the sell side. And in Q2, we had more module sales and cells and modules have different margins for overall margin shifts with the mix between them and the revenues as well.

Unknown Executive

I don't think that was exactly the question. The question was the reason for a decline in revenues in Q2 versus Q1. That's what the -- he wasn't asking about margins.

Unknown Analyst

[Foreign Language]?

Unknown Executive

So although sales increased compared to the previous period, sales decreased, which is what contributed to the sequential decline.

Unknown Executive

Okay. So operator, I think we've reached the end of the time for the call. So first of all, thank you to everyone for listening. Thank you for your questions. As you can tell, despite some term of uncertainties, the team is very excited about what's ahead for TOYO. Again, we encourage everyone who's interested to come to our Analyst Day, October 6 in Humble, Texas. And feel free to reach out to us with any questions from management that we couldn't cover on today's call. Thank you very much.

Operator

Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect.