T1 Energy Inc (TE) Q1 2026 Earnings Report, Transcript and Summary

Good day, and thank you for standing by. Welcome to T1 Energy's First Quarter 2026 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker for today. Jeff, please go ahead.

Good morning, and welcome to T1 Energy's First Quarter 2026 Earnings Conference Call. Before we get started, please turn to Slide 2 for our forward-looking statements disclaimer. During today's call, management may make forward-looking statements about our business. These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from expectations. Most of these factors are outside T1's control and are difficult to predict. Additional information about risk factors that could materially affect our business are available in our annual report on Form 10-K filed with the Securities and Exchange Commission and our other filings made with the SEC, all of which are available on the Investor Relations section of our website. Turning to Slide 3. With me today on the call are Dan Barcelo, our Chairman and CEO; Evan Calio, our Chief Financial Officer; Jaime Gualy, our Chief Operating Officer; and Andy Munro, our Chief Legal and Policy Officer. I'll now turn the call over to Dan to get us started.

Thanks, Jeff, and welcome, everyone, to our first quarter 2026 earnings call. Our theme for today's call is taking care of business. From the beginning of our journey at T1, building our G2_Austin U.S. solar cell fab has been the bedrock of our strategy to establish T1 as a homegrown integrated domestic solar leader. Today, I'm happy to report that construction of the 2.1 gigawatt Phase 1 of G2_Austin is progressing according to schedule. Following the start of construction, we began ordering long lead items in Q4 2025 with the production line equipment, followed by the steel package order in Q1 2026. In recent weeks with engineering and design work approaching completion, the pace of construction activity on site has picked up noticeably, and we remain on schedule to achieve first cell production in Q4 2026. In April, we commenced concrete works for G2's foundation. In May, the team completed the design process by finalizing the full issue for construction package, and we expect to begin erecting the first steel later in May. With one foundational offtake commitment for G2 in hand, we have been pursuing a second contract. And while we have been financing construction of G2 Phase 1 with cash from our balance sheet and the support of our institutional investors, we are also working to agree to a comprehensive financing package for the remaining CapEx of approximately $225 million. These pursuits are T1's highest priorities, and we continue to target the announcement of the G2 financing in the second quarter. While we've been advancing our growth plans, our operations team has been focused on efficiency and profitability. At G1_Dallas, our state-of-the-art 5 gigawatt solar module facility, we closed the first quarter of 2026 with much improved financial performance and a record quarterly adjusted EBITDA of $9.1 million. And finally, with the potential outcome of the Commerce Department's Section 232 investigation in foreign polysilicon expected in the coming months, we are comfortable with T1's strong competitive position as a large offtaker of American-made polysilicon through our supply contract with Hemlock Semiconductor. T1 is deeply committed to standing up domestic polysilicon-based solar supply chain, which is a prerequisite to American energy dominance and the eventual development of a robust U.S. semiconductor supply chain. Now let's move to Slide 5 for an overview of our progress at G2_Austin. Our focus when we began developing G2 in Q4 2025 was to order the long lead items highlighted by the production line equipment and to advance project engineering design while we commenced the groundworks on site. With those tasks largely complete, construction activity at the G2 site is picking up, and we are now progressing through some major milestones. As you may have noticed from the photos in this presentation and from our recent post on social media, concrete works got underway in April, and we are eagerly awaiting deliveries of the first structural steel, and we expect to start erecting the structure of what will be G2 in May. Weather this time of year in Central Texas can be volatile, and the team has been contending with a pattern of wet and stormy conditions in recent weeks. The National Weather Service rain gauge in nearby Taylor, Texas recorded 10.3 inches of rain in April, which is more than 3x normal. Despite these challenges, our talented and hard-working team, along with our contractors and vendors, have kept construction on schedule. Looking ahead to the summer, there are some exciting milestones looming, the most important of which pertain to the shipments and deliveries of the production line equipment from LaPlace. We have been working closely with LaPlace on G2 development for roughly a year already and the efficiency with which they are executing has us positioned to deliver this project according to plan with first cell production targeted in the fourth quarter of 2026. As our progress at G2 continues, keep an eye on T1 social media channels for real-time updates and footage from Rockdale. And with that, I'll turn the call over to our COO, Jaime Gualy, who will provide you with an update from G1_Dallas.

Thanks, Dan. Let's move to Slide 6. Our mission for 2025 at G1_Dallas was to successfully complete the ramp-up of the factory to produce at capacity, which we have achieved in the fourth quarter. For 2026, our focus is on driving profitability and EBITDA from our world-class operating asset. This morning, I'm pleased to report that 2026 is off to a solid start as we achieved record quarterly adjusted EBITDA of $9.1 million in Q1. Production sales were lower sequentially in the first quarter as we expected. Following the frenetic pace of spot market module purchases in fourth quarter before the new FEOC restrictions went into effect on January 1, customers have been working down module inventory by deploying equipment into their projects ahead of the safe harboring deadline in July on the 1-year anniversary of the OBBBA. As a result of these market dynamics, we expect that the second half of 2026 will be meaningfully busier both at G1 and in terms of outbound module shipments to our customers. Nonetheless, our financial performance during the first quarter was markedly improved because of a favorable shift to shipments under our combined 3 gigawatt of cost-plus and fixed margin contracts for 2026. All things considered, we are pleased with the improvement in the bottom line and the team at the factory continues to deliver outstanding operational performance. And with that, I'll turn the call over to Evan for a review of our financials and an update on our capital formation initiatives.

Thanks, Jaime. Please turn to Slide 7. T1 is in strong financial position as we continue to advance diligence with the goal of announcing comprehensive financing package for G2_Austin in 2Q '26. In the first quarter, we achieved our highest quarterly adjusted EBITDA to date of $9.1 million, and our gross margins expanded by roughly 10% from the fourth quarter run rate to 17% in 1Q, and that's on lower throughput of 683 megawatts or a 2.7 gigawatt run rate. The improvement in our margin was primarily due to the favorable mix shift to volumes under cost plus in the 2026 fixed margin offtake contract compared to a heavy weighting of merchant sales in a challenging price environment in the fourth quarter. The improved performance on our P&L was augmented by the support we received from institutional investors, highlighted by the upsized public convertible senior notes offering we priced in April, which generated $176 million of net proceeds. This infusion of capital enables us to continue advancing G2 construction on schedule while we continue to pursue a comprehensive primarily debt-based financing solution to G2 Phase 1. We have a management team with decades of seasoning in the capital markets, and we've applied our experience and creativity to fund G2 Phase 1. Earlier in the capital formation process, we concluded that the equity markets were offering comparatively more attractive pricing than the terms of debt-based sources of capital and allow us to pursue more profitable contract strategy. So we sequenced our funding sources of construction to date primarily through equity-linked investments while evaluating the most attractive pools of debt and offtake contract available. As we indicated when we priced the convertible offering in April, we now have identified and are pursuing what we believe to be our best debt-based option to close the remaining funding needed for Phase 1. We are engaged in diligence with a potential financing counterparty, which is our preferred solution because we believe it offers the most attractive combination of cost, structure, and quantum. As we indicated previously, we are tracking against our target to announce a commitment in 2Q '26. And to be clear, the quantum we expect to raise from this financing will be more than sufficient to fund the remaining CapEx of approximately $225 million for Phase 1 of G2_Austin. Now let's turn to Slide 8 to discuss our 2026 outlook and guidance. After a solid start in 2026 in the first quarter, T1 remains well positioned as we bridge the start of production at G2. Our international cell procurement program has been progressing well, and we now have 4 vendors for which we've completed non-FEOC diligence to supply G1 and expect that number to rise. As we grow the vendor network, we're becoming increasingly comfortable with our ability from a cell procurement perspective to supply near the high end of our unchanged 2026 G1 production guidance range of 3.1 to 4.2 gigawatts. The conversion of production to sales and adjusted EBITDA for 2026 still hinges primarily on 3 factors. #1, customer demand and price of merchant volumes for the second half of the year after the July safe harbor deadline. Two, potential impact of widely anticipated Commerce Department Section 232 investigation into the use of foreign source polysilicon and its derivatives. And three, the net outcome of our IEEPA tax refund. Given T1's significant commitment to buying U.S. polysilicon from our partners at Hemlock, we believe the pricing implications of a potential 232 ruling represent a favorable one-way option for T1's 2026 and beyond sales and margins. We intend to issue more detailed 2026 guidance once we have better clarity on these factors. In the interim, we have robust mid- to late-stage pipeline for both merchant and contract sales opportunity for '26 and '27 for both the domestic cell and a non-FEOC cell module. Accordingly, there are no changes to our annual adjusted EBITDA run rate guidance targets for G1, G2. And now I'll turn the call back over to Dan for concluding remarks.

Thanks, Evan. Let's turn to Slide 9, please. T1's mission is to power America with scalable, reliable, low-cost energy, and we are deeply committed to contributing to U.S. energy and AI dominance. This isn't just rhetoric and it isn't promotional. At T1, we're putting our money where our mouth is. We invested more than $600 million in G1_Dallas, our world-class 5-gigawatt module facility in Texas, where we have a workforce of more than 1,200 people to power safe, highly efficient 24/7 operation. T1 is doubling down on American advanced manufacturing in Texas with G2_Austin Phase 1, where construction continues on schedule with a planned capital investment of $425 million. A potential second phase of G2_Austin to more than 5 gigawatts of U.S. cell fab capacity would support up to an additional 1,800 jobs in Texas. T1's plan to be part of an end-to-end U.S. polysilicon solar supply chain is critical to the long-term health of both the domestic solar and semiconductor industries. Polysilicon is the common raw material for both solar modules and chips. There may not be a robust U.S. semiconductor industry without a vibrant domestic polysilicon supply chain to accompany it. As one of the largest buyers of U.S. polysilicon, T1 is doing its part to support the growing U.S. polysilicon sector. We are positioned at the nexus of U.S. policies that support our commitments to American advanced manufacturing and the domestic polysilicon industry. A potential Section 232 ruling could generate a pricing uplift for T1's modules made with domestic polysilicon and/or wafers through our supply partnerships with Hemlock and Corning. And our north star is to be part of an integrated U.S. silicon-based supply chain that enables production of high domestic content modules that qualify T1 for Section 45X tax credit and our customers for Section 48E domestic content stacking bonuses. Let's move to Slide 10 to conclude with a review of T1's strategic priorities. Our first key objective this year is to fund and build G2. As Evan detailed earlier, we are focused on advancing diligence to announce a comprehensive financing package for G2 Phase 1 in the second quarter. We believe that G2 will trigger a step change in T1's earnings power and cash flows by enabling production of high domestic content TOPCon modules, which are not available at scale in the U.S. today. Our second priority is to improve T1's profitability as we navigate the bridge to G2 by efficiently operating our world-class asset at G1_Dallas, expanding our commercial presence and enhancing cost efficiencies across our organization. We believe that the improvement in T1's first quarter financial performance is an important step in the right direction that we intend to build upon in 2026 and 2027. Our third key priority dovetails with the first 2. Operations and policy were major areas to address in our first year's T1. And in 2026, we're adding supply chain, sales, and engineering expertise to our organization. Satisfying these objectives are expected to create a world-class organization with the capability to safely and profitably operate state-of-the-art assets, consistently generate cash flow and catapult T1 into a leadership position as a critical U.S. energy supplier. And with that, I'll turn it back to Jeff to coordinate the Q&A session.

Thanks, Dan. Operator, we're ready to open the line for questions.

[Operator Instructions] The first question of the day will be coming from Greg Lewis of BTIG.

Evan or Dan, I was hoping you could unpack a little bit more on the margins. I mean gross margins look great. I think you called out in the deck that that kind of is indicative of the backlog. So really, as we think about realizing we're not giving full year guidance, but is there any way to kind of think about if we wanted to layer in like what merchant power sales could look like? How maybe that's going to impact margins maybe in the back half of the year? Is that kind of the right way to think about it?

Yes. Thanks, Greg. Evan, why don't you turn to that?

Yes, sure. Thanks, Greg. Yes, the gross margin in 1Q was 17%. I'd say that that's driven by -- and we produced in the quarter on a run rate basis, 2.7 gigawatts, right? And it's based upon 2 cost-plus or fixed margin contracts that we have throughout 2026, right? So like at least on the low end of the range, which is 3.1 gigawatts, a 17% would be a reasonable gross margin assumption given you have the same contracts throughout the year. Now if you move up in the guidance range, it would -- meaning we would raise production levels that would increase your adjusted EBITDA, yet the margin could either be higher or lower based upon the relative module price movement relative to cost. So it kind of depends upon your 2 assumptions on where price and costs are in the scenario in which we were exceeding the low end of the range with merchant volumes. Is that helpful?

That's super helpful. I mean, I guess just a quick follow-up on that. Like as we think about 232, like post -- when we finally get more clarity around 232, is that when we should start thinking at least the company will have better clarity and maybe what merchant power might look like in the back half of the year?

Yes. I mean I think that's one of the factors, Greg, for sure. I'd say coming into the year, we expected it to be more challenging to source non-FEOC cells. And so what Jaime and his team and Andy kind of on due diligence has found more cell availability, right? And so now we're assessing the demand. So it's going to be; one, driven by demand, but yes, two, also driven by 232 given we have a domestic poly supply contract with Hemlock, which should experience both -- not just in '26, but '26 and beyond, would most likely experience a benefit based upon what those final rules look like. And so once we have those, we'll likely provide better guidance on -- or guidance for 2026.

And then just one more for me. Dan, in the comments, you talked about indicative customer demand covering production. And realize we probably aren't too focused on finding demand for additional phases we haven't built yet. But maybe just kind of if you could talk to maybe provide some color around that comment. And as we think about potentially scaling up incremental capacity, how you're thinking about that over the next couple of years?

Look, if you break it down into pieces, the conversations we have with, again, most of our customers are all utility scale developer types that we have conversations with. They continue to see hyperscaler demand. That continues to remain the dominant, dominant theme. How do we get power now? Second point, second year running, everything is still tracking that solar and storage is adding most of the additions to the grid, and therefore, solar remains quite firm. When we look back at 2025 and look backwards and through what happened, there was a lot of, let's say, manic or bipolar kind of buying and selling ahead of certain rules changes ahead of year-end. We're hopeful that that can kind of steady out now and have a more consistent pattern of demand. I'd say the last thing that still seems to be a little bit of a bottleneck and not for us because we're not the ultimate user, but is utility interconnection still seems to be slow. There still seems to be a lot of work to be done, a lot of payments to be made for interconnects and that kind of gates projects. But again, looking through that point, demand is quite firm. If we have the right demand signals, and we get -- and if we get the right types of orders for offtake and the market demand signals are correct and we pencil out the right economics, we're keen to continue to be building capacity. We think that the U.S. market for solar has to grow. We think that we can be an important part of it, and we'd be excited to continue to expand. But we're trying to be very disciplined. Mission 1, 2, 3, 4, 5 is build G2, get to the comprehensive financial close and announce that on G2. That's our focus now. But all of the signals are that the markets remains very robust.

Our next question will be coming from the line of Martin Malloy of Johnson Rice & Company.

Congratulations on the strong quarter. I just wanted to make sure I understand the sequence of events here that we should be looking for. It sounds like from the 1Q call, there was a significant potential offtake contract. Should we be looking for announcement on the offtake side prior to the comprehensive financing solution being announced?

Thanks for the question. I wouldn't necessarily say that's the case. We announce material new contracts when those are executed. We don't announce heads of terms or term sheets or anything like that. We like to be really transparent in terms of those disclosures. So when that contract is final and executed, we'll announce that. Those are really independent paths for other solutions. So we intend to announce another comprehensive primarily debt-based financial solution in this quarter. And we're excited about the progress on that. But the offtake contracts in that are mutually exclusive. They may be inclusive, but they are not necessarily need to be inclusive.

And then just as a follow-up, on Slide 8, I was wondering if you could maybe provide some more color around the bullet point with the -- you talked about the preliminary indications for incremental G1, G2 domestic content underpinned by hyperscaler growth. Could you maybe provide a little more color on what you're referring to there?

Well, the demand for solar and storage in my prior comments remains quite strong. That demand is coming mainly from AI, from hyperscalers, from those large that goes through utility scale developers. So that was just an indication of our customers are seeing that demand and that pull-through there. So for us, we see that that market hasn't slowed down, and we have customer inquiries in large sizes about what type of solar can we deliver, when, how much of it would be domestic sale, how much of it would not. So that was a reference to our ongoing commercial discussions with those utility scale customers.

And our next question will be coming from the line of Philip Shen of Capital ROTH Partners. Our next question is coming from Sean Milligan of Needham & Company.

Great quarter here. Just if we kind of -- how should we think about the 45X credit monetization this year, the cadence of that? Will it be done semiannually? Or is there a certain kind of threshold that you're trying to get to from a dollar amount?

Evan, do you want to turn to that?

Yes, sure. Yes. Thanks for the question. I mean we -- I'd say that we expect here shortly to have monetized the balance of 2025, right? So I think that's in motion that we're expecting near term. I mean 2026, because it is a different process in the market, we've always been expecting it would be back half of the year before we found the tax equity partner. We remain active and in conversations, but it's slower than what it had been prior to OBBBA because there's additional steps as well as we're hearing from tax equity side still waiting for an additional tranche of treasury guidance. So we're expecting it into, right now, 3Q to the year-end. And there also exists, if needed, ways to kind of borrow against those future sales and there's other kind of financial products you can do that lower your net that we're aware of, so.

And then I just wanted to revisit that first set of questions around the gross margins that you printed this quarter and just kind of the mix as you move into the second half of the year. So if you -- I guess, if you move past the kind of 3 gigawatts that are on contract this year, how are -- like how does merchant price compare to that today, that 17% gross margin? Like would it be like if you were to strike additional merchant sales today without having Section 232 clarity, would it be above or below that margin? And then kind of what would you need to see from Section 232 to move that margin higher?

Yes. I mean it's a multi -- you have to make a lot of assumptions to answer that question. I mean I'd say it depends exactly where your price is at current. So if you're into a $0.30 price market in the back half of the year, likely kind of given where current cell pricing is, you're incremental, right? And so you can either get there through just market demand or you can get there through tariffs, right? I mean 232 outcomes -- expected outcomes have kind of a wide range of what they might look like. I think the more meaningful benefit to us from 232 is likely going to be when we're converting the contract to wafer, and we're delivering that wafer in '27 as we ramp G2. It'd be kind of a bigger lift in that year than it would be in '26.

And then it doesn't matter as much this year because the cost -- I guess, the cost plus structure, the fixed margin structures of the contracts. But just from a COGS standpoint, I know last year, there was kind of significant movement in some of the pieces, I think glass in particular. Just kind of curious what you're seeing to start this year and if you feel like you've locked in and out in the COGS side to start this year pretty well.

Sure. I can start, and Jaime can add as well since he's in procurement at G1 at the moment. Yes, I mean, yes, we're seeing some -- on the cell in particular, which is more than half or half your cost. We've seen compression year-over-year, right? It's like it's been more available and it's actually been kind of better price year-over-year. We're only carrying inventory for about a quarter plus. So you're not necessarily locking in your third or fourth quarter right now. So to your question about locking in and then maybe Jaime to add on what you're seeing in the kind of glass market or other parts of the BOM.

Hello, Sean, yes, we continue to work diligently on reducing our cost and procuring our bill of materials based on our planning for 2026. So overall, we continue to do that on all the pieces on glass, on frames, on j-boxes, et cetera. So overall, our goal is to continue to operate G1 efficiently and reduce our operating costs and our COGS throughout the year.

And our next question is coming from the line of Philip Shen of ROTH Capital Markets.

First one is back on the 232. There's this upcoming Trump-Xi meeting. I was wondering if you expect from your connections with D.C., anything to come out of that that might be relevant for solar and/or the 232? And then on the 232, what's your sense for the timing of when that could be released? We've been publishing it could be sometime in June. They're making some progress with a structure, right? The new structure format might be a minimum import price. So I was wondering if you've heard much about that kind of structure and what it might look like in general once we get it. In all likelihood, it's probably not a percentage form, but just curious what your latest take is in terms of the framework of the 232 and time?

Yes. Thanks, Phil. I would hesitate to be remiss if I were to comment on Trump-Xi's plans and negotiations. So I think there's a lot of things globally in macro that need to be sorted. So I won't really have a comment there. As it relates to 232, we've been very consistent that what T1 need and would like to see a levelized playing field where we feel that polysilicon pricing is the most significant disadvantage to us in terms of the solar supply chain -- silicon solar supply chain in the United States. So from that perspective, we remain very focused on that message. In our conversations, we've said that the percentages just don't seem to work well that looking at a cents per watt type level across the product slate is what would be -- would work. So without getting into what questions we've been asked by government parties, I'd say we -- the government and the parties understand the level playing field nature of it. They understand the cost disadvantages of our polysilicon versus others. And from that standpoint, we've made our position clear. Timing, I wouldn't have anything further than what you're hearing. It's similar types of timelines, but we've all been waiting for this for month after month after month.

Shifting over to your non-FEOC cell supply. I think Evan or somebody mentioned, maybe Jaime, that you guys have been able to find a fair amount of supply. So I was wondering if you could update us on how much -- as you kind of find the bridge between G1 and the full ramp-up of G2, certainly in Phase 1, how much in terms of gigawatts do you guys actually need in terms of cells that you don't produce? And then how much has been fulfilled, if that make sense? So like are you like 70% of the way there, 100% of the way there, or some other number?

Sure. And I'll let Jaime follow-up on the supply chain aspects for it. Math is fairly simple with us running at a 5-gigawatt and a 2-gigawatt cell plant coming in '27, we'll have a gap of certain need for non-FEOC cells even after our cell lines come up. For 2026, we don't produce cells. So therefore, we need to fill the whole gap, and it's going to be a circular reference back to what's our production. We are not looking to produce with FEOC cells at all. So we'd have to use non-FEOC cells in order to make our U.S.-made modules. Jaime, do you want to talk about quantums? I don't think we've given full guidance on it from a commercial standpoint. It is a competitive place where we're trying to get hands on these non-FEOC cells. But Jaime, do you want to take that and go into a little bit more detail without giving the exact guidance?

Yes, of course. Thanks, Dan. So as we're looking at procuring, as Dan said, our main focus is making sure that we're procuring non-FEOC cells and working very closely with legal on the right diligence for that. And really, when we look at cell procurement, it's really tied to our overall commercial sales and looking at our production planning for 2026. So as you know, we are between that, the 3.1 and 4.2 kind of gigawatt range. So that is where, from my team, our marketing team is working towards. We have enough suppliers. We've seen enough capacity in the market. And we're also starting to look for, as Dan mentioned, the filler for 2027 and where we are sourcing those non-domestic cells to fulfill our capacity at G1.

So suffice to say, you guys feel good about your '26 needs and then you're looking into '27 now. Is that right?

Absolutely.

One last question here. I know we've talked about offtake a bunch, but just curious like can you lock in or announce an offtake without the 232? Or do you think we need to see the 232 first and then that's kind of the -- certainly, that's a big driver for offtake, but is there a chance that we could see an offtake before a 232 is announced?

Look, we're trying to do -- we're trying to be a real counterparty to real developers in the United States like for a very long time. All of the developers are fully aware of the 232 noise and actions. And none of them are trying to play a got you with T1 nor is T1 trying to play a got you with them. So there are very robust discussions around that. And a lot of those utility-scale developers comments are about their interest in us because of our U.S. polysilicon supply. That's a lot of the starting point for the conversation. So the short answer is no. We don't need a 232 to sign contracts. And to add more color to that, the utility scale developers understand the benefit that would accrue to us versus them, and that doesn't seem to be an impediment to those discussions and advancing. As I mentioned before, when we announce, we'll be publicly announcing those contracts. They're complex. Some of them are multiple years. And we'd like to get -- we'd like to sell out some more while retaining some merchant exposure to a market.

And there are no more questions in the queue at this time. I would like to turn the call back to Jeff for closing remarks. Please go ahead.

Thanks, Lisa. Well, thank you, everyone, for your attention and interest today and participating in the call. We've got a plant tour starting at G1 tomorrow, and we'll be back out on the road this quarter, so we'll catch up with everybody soon. This will conclude the call.

Thank you all for participating. You may now disconnect.