Business Context and Reporting Period
Company: TOYO Co., Ltd (TOYO)
Filing Type: Form 20-F (Annual Report)
Reporting Period: Fiscal year ended December 31, 2025
Business Overview: TOYO is an early-stage solar energy company incorporated in the Cayman Islands with operations in Vietnam, Ethiopia, and the United States. The company manufactures solar cells and modules, utilizing TOPCon technology. It operates as a subsidiary of a larger group involving VSUN and Fuji Solar. Key milestones in 2025 included the commencement of commercial production at a 1GW solar module plant in Texas (October 2025) and the expansion of solar cell capacity in Ethiopia to 4GW.
Key Financial Metrics
| Metric | 2025 | 2024 | 2023 |
|---|---|---|---|
| Total Revenue | $427.4 million | $177.0 million | $62.4 million |
| Gross Profit | $96.3 million | $21.9 million | $16.6 million |
| Gross Margin | 22.5% | 12.4% | 26.7% |
| Net Income | $37.2 million | $40.5 million | $9.9 million |
| Operating Cash Flow | $133.0 million | $46.5 million | ($12.5 million) |
| Working Capital | ($123.9 million) Deficit | ($69.6 million) Deficit | ($86.4 million) Deficit |
| Cash and Restricted Cash | $58.9 million | $17.1 million | $19.0 million |
Note: 2024 Net Income included a $35.1 million non-cash gain from the decrease in fair value of contingent consideration. 2025 Net Income included $13.7 million in share-based compensation expenses.
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 142% year-over-year to $427.4 million, driven by a $241.6 million increase in solar cell sales and the initiation of solar module sales ($7.6 million) in the U.S. market.
- Margin Expansion: Gross margin improved from 12.4% in 2024 to 22.5% in 2025, attributed to higher average selling prices for U.S. end customers supplied by the new Ethiopia plant.
- Capacity Expansion: Ethiopia solar cell capacity reached 4GW (up from 2GW in 2024), and the Texas module plant began commercial production at 1GW capacity.
- Customer Concentration: Reliance on the affiliate VSUN decreased from 66% of revenue in 2024 to 36% in 2025, as third-party sales grew significantly.
- Legal Resolution: Patent infringement lawsuits filed by JINKO in 2024 were settled and dismissed in early 2026.
Guidance, Outlook, Risks, and Contingencies
Going Concern Warning
The independent auditor has expressed substantial doubt about the company's ability to continue as a going concern. This is due to a significant working capital deficit of $123.9 million. Management's ability to continue operations depends on generating positive operating cash flows and securing additional financing.
Outlook and Strategy
- U.S. Expansion: Plans to expand the Texas module plant to 2GW by the end of 2026 and potentially build a solar cell plant in the U.S.
- Brand Strategy: Acquired the "VSUN" brand in September 2025 to leverage its Tier 1 status for U.S. module sales.
- Technology: Investing in R&D for HJT and Perovskite tandem solar cell technologies.
Key Risks
- Regulatory & Trade: Exposure to U.S. trade tariffs, AD/CVD duties (Vietnam rates assigned at 271.28% AD / 124.57% CVD in 2025), and the Uyghur Forced Labor Prevention Act (UFLPA).
- Legal Proceedings: A new Section 337 investigation was instituted by the USITC in March 2026 by First Solar alleging patent infringement regarding TOPCon products.
- Internal Controls: The company identified material weaknesses in internal controls over financial reporting, including lack of sufficient accounting personnel and IT policies.
- Supply Chain: Dependence on a single related-party supplier for monocrystalline silicon wafers (29.2% of purchases in 2025).
Investor Verification Checklist
- Liquidity Status: Verify the company's ability to fund operations given the $123.9 million working capital deficit and the auditor's going concern qualification.
- Related Party Transactions: Assess the sustainability of revenue and supply chains heavily tied to affiliate VSUN (36% of revenue; 29.2% of raw material purchases).
- Legal Exposure: Monitor the outcome of the new USITC Section 337 investigation filed by First Solar regarding TOPCon patents.
- Internal Controls: Review the remediation plan for identified material weaknesses in financial reporting and IT controls.
- Trade Policy Impact: Evaluate the financial impact of potential U.S. tariff changes and AD/CVD duties on the Vietnam and Ethiopia manufacturing bases.