T1 Energy Q3 2026 Earnings Call Transcript

T1 Energy (NYSE:TE) reported third-quarter financial results on Thursday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

T1 Energy is focused on securing debt-based financing for its G2 Austin Phase 1 project, which is its top priority to improve its stock performance and financial positioning.

The company has signed 1.6 gigawatts of new offtake contracts, bringing total contracted 2027 capacity to more than 3.5 gigawatts, showcasing strong demand for its American-made solar modules.

T1 Energy received a waiver from the Commerce Department for solar cell imports, supporting its manufacturing operations and enhancing its competitive positioning in the U.S. solar market post-Section 232 proclamation.

Construction at G2 Austin is progressing with the completion of the steel structure and the arrival of all Phase 1 equipment in the U.S., aiming to begin operations by mid-2027.

Financial performance was impacted by an inventory build ahead of new contract deliveries, resulting in lower Q3 revenues and higher SG&A expenses due to strategic investments.

Despite near-term financial challenges, the company remains optimistic about future profitability driven by higher pricing and increased demand from U.S. utility-scale customers.

T1 Energy is engaging in discussions to monetize its 45X tax credits and has entered a non-binding LOI to redevelop its Nordic Giga asset as a data center to generate additional liquidity.

Management believes that the fundamentals of the U.S. solar market, along with T1 Energy’s strategic positioning, will drive long-term growth and profitability.

Full Transcript

OPERATOR

Thank you for standing by. Welcome to T1 Energy third quarter 2026 earnings call. At this time all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. To ask a question during the session, you’ll need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today’s conference is being recorded.

I would now like to hand the conference over to your first speaker today, Jeff Spittel. Please go ahead.

Jeff Spittel (Investor Relations)

Good morning and welcome to T1 Energy’s third quarter 2026 earnings conference call. Before we get started, please turn to slide two 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 is 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 Chief Executive Officer, Evan Calio, our Chief Financial Officer, David Siegler, our SVP Special Projects and Operations, and joining us for Q&A are Andy Munro, Chief Legal and Policy Officer, and Ryan Consinon, SVP Strategic Engineering and Advanced Manufacturing. I’ll now turn the call over to Dan to get us started.

Daniel Barcelo (Chief Executive Officer)

Thanks, Jeff, and welcome everyone to our third quarter 2026 earnings call. Our theme for today’s call is Actions Speak the Loudest. I want to begin by addressing something directly. Our stock has faced meaningful pressure in recent months, and we recognize and share in our investors’ frustrations. We had every intention, and mobilized resources at our disposal, to announce a comprehensive debt-based funding solution for G2 months ago. That didn’t happen, and our current stock price in part reflects that disappointment.

Our focus is on what we can control, which is T1 Energy’s path forward, and we are resolute in our belief that the fundamentals of the U.S. solar industry and T1 Energy’s unique competitive position are superior today than at any time since we’ve owned the business. The discussions we have as a management team and board with potential investors, offtake customers, and strategic partners continue to provide a clear signal about our path forward: keep building while you weather the storm in the capital markets.

On financing, which I know is top of mind, we are in negotiations with certain institutional investors under exclusivity, with certain exceptions, to pursue a comprehensive, primarily debt-based financing solution for G2 Austin Phase 1. We are not going to get ahead of a process that is active, but I want to be clear: closing this financing is T1 Energy’s number one priority, and we believe the combination of our organizational progress, the substantial equity we have invested in G2 Austin Phase 1, our commercial momentum, and the tailwinds from Section 232 have materially improved the attractiveness of T1 Energy as a financing counterparty.

So we are mindful of the stock price, and we will manage our growth and capital prudently while we continue to build commercial momentum and our domestic PV supply chain. But we haven’t lost sight of how important it is to invest in T1 Energy’s future. In the third quarter, we made the decision to build module inventory at G1 to accommodate newly signed contracts in 2027 with superior economics from what we’ve previously booked, and we are investing in our people.

Our third quarter SG&A run rate is a function of attracting and hiring the best technical and operational personnel from the growing Austin energy and technology ecosystem. These investments dampen near-term financial performance, but we believe they are critical to realizing the full earnings power of the business in its future state. With G1 and G2 Phase 1 up and running, what I want to do today is walk you through what is happening at T1 Energy. This isn’t an external narrative. I want to discuss specific actions because the third quarter of 2026 and the weeks following have generated a series of concrete, verifiable milestones that demonstrate this company is executing its strategy. We are making tangible strides to strengthen T1 Energy over the long term by investing in G2 and our people.

And the fundamentals of the U.S. utility-scale solar market are improving despite the malaise in the capital markets. Let me start with the intersection of public policy and the polysilicon sector. In October we received a 232 waiver from the Commerce Department for up to 1.725 gigawatts of solar cell imports to support uninterrupted manufacturing at G1 Dallas. This is an important near-term bridge that protects our ability to deliver against our customer contracts while G2 Austin continues toward first cell production. The Commerce Department Section 232 proclamation in support of the domestic polysilicon industry has fundamentally changed the dynamics of the U.S. solar market.

Pricing for solar modules has moved materially higher, with leading-edge quotes well above what we’ve seen since we acquired the business. T1 Energy’s value proposition—American-made, high-efficiency TOPCon modules from G1 Dallas with a clear path to domestic cell production from G2 Austin—has never been more differentiated or more in demand. We proved that this quarter with actions, not words. We announced nearly 1.6 gigawatts of new offtake contracts in October, bringing our total contracted 2027 capacity to more than 3.5 gigawatts. Since this time last year, we have directly negotiated and signed several established U.S. customers to new deals—Avantis, Clearway, Treaty Oak—in addition to new merchant customers. These offtake contracts are meaningful commitments that are signed after our customers conduct months of rigorous diligence across T1 Energy’s strategy, operations, policy, roadmap, financial condition, products, and people.

These contracts are a testament to the fact that T1 Energy is building a roster of respected American utility-scale customers for solar modules using high-efficiency polysilicon-based technology. At G2 Austin, construction is progressing as we fund our growth in real time. The G2 external steel structure is complete. All Phase 1 equipment has arrived at U.S. ports. Mechanical, electrical, and plumbing installation has begun. This morning we’ll be introducing you to David Siegler, our SVP, Special Projects and Operations, for more detail. David leads a world-class team of T1 Energy employees, vendors, and contractors to execute the construction of this landmark U.S. solar cell fab, which we believe will be T1 Energy’s cash flow and profit engine.

David’s credentials include building gigafactories, semiconductor fabs, data centers, and dozens of other complex projects. He is one of the many exceptional people who have joined T1 Energy this year, and we are excited for you to hear from him. I am confident in what we are building, in the team that is building it, and in the demand for what T1 Energy will produce. Let’s now go through the details. Please turn to slide 5. I want to take a moment to explain why we believe T1 Energy is so well positioned in the post–Section 232 landscape. T1 Energy intends to be the first American solar company to offer customers an integrated domestic polysilicon stack—modules that can be made with U.S. polysilicon from Hemlock and wafers from Corning, all assembled at our world-class 5-gigawatt G1 Dallas facility. G2 Austin is the final major piece in that equation.

With Phase 1 online, we expect to manufacture domestic TOPCon solar cells using technology and IP that we now own outright. We believe that our strong competitive position and plan will matter enormously in this new public policy environment. The 232 proclamation has introduced minimum import prices, additional tariffs, and potential relief programs that are designed to reward companies like T1 Energy and our partners for investing in the upstream domestic polysilicon supply chain.

T1 Energy’s domestic supply chain commitments through our partnerships with Hemlock and Corning, and approximately $250 million already invested in G2 Austin, position us on the right side of that equation. Beyond the supply chain, our ownership of TOPCon intellectual property is a unique asset that we believe no other American silicon-based solar manufacturer holds. T1 Energy now owns what we believe is one of the world’s leading commercially validated solar cell technologies.

This is about offering customers high-efficiency, high–domestic content modules that meet the increasingly demanded standards for Section 48E investment tax credit bonuses over a longer-term horizon. Owning the IP also presents us with potential avenues to advance TOPCon through R&D channels and licensing opportunities. We are grateful to receive the Commerce Department’s support with our recent waiver, and importantly, we’re engaging with Commerce to access the 232 onshoring relief program, which is designed to support companies that are investing in domestic manufacturing capacity using American polysilicon. We believe that T1 Energy’s current and planned capital investment at G2 Austin makes us one of the compelling candidates for that program.

Please turn to slide 6. The U.S. solar market has changed significantly since the beginning of this year. I want to give you a clear picture of where module pricing is today and what it means for T1 Energy. The Section 232 proclamation has precipitated a meaningful increase in inbound customer demand and module pricing. Other factors were already contributing to robust pricing for polysilicon modules with domestic cells, which scarcely exist today.

We are seeing leading-edge pricing quotes for modules with imported cells in the mid–30 cent per watt range, well above where merchant pricing was in 2025, and for modules with domestically produced cells, the mid–40s. That spread reflects the premium the market is placing on domestic content, and T1 Energy is advancing its strategy to serve both markets. The customer response to our 232 waiver has been very positive. We believe that a growing universe of customers see T1 Energy as a credible, reliable supplier that is investing in America’s solar supply chain, and they want to lock in access to our capacity, particularly for our 2027 and 2028 volumes at G1 Dallas. Based on the ongoing conversations we are having with tier-one customers and the contracts we have already signed, we believe T1 Energy may sell out its 5-gigawatt G1 Dallas capacity for 2027. That would represent a step change in T1 Energy’s revenue and earnings trajectory, and we are working hard to convert the pipeline of our discussions into executed contracts.

Please turn to slide 7. I want to provide some additional context to our commercial progress because I think it reflects something important about how T1 Energy is being perceived in the U.S. utility-scale market. When we started this journey as a U.S. module manufacturer, we acquired existing customer contracts that were executed by Trina Solar’s established U.S. distribution network prior to T1 Energy’s involvement. Today we have a direct sales organization that is executing its own contracts with some of the largest utilities, IPPs, and developers in the United States, including companies like Avantis, Clearway, and Treaty Oak.

These are marquee counterparties, and they are choosing T1 Energy. Our 2027 through 2029 contract backlog and pipeline now exceeds 22.8 gigawatts, more than four times G1 Dallas’ annual production capacity. The funnel reflects not just interest, but signed contracts and advanced negotiations at pricing levels that reflect the new post-232 world, and the feedback we are hearing consistently is that customers value T1 Energy’s domestic content story, our TOPCon technology, our product quality, and our commitment to customer service.

We are also making real progress in bankability, establishing a T1 Energy–branded warranty and advancing the rating processes that give project finance lenders confidence in our modules. This is a critical infrastructure for long-term commercial success, and we are investing in it. While we move to slide 8, I’d like to introduce David Siegler, SVP, Special Projects and Operations. David joined T1 Energy this year to lead the construction delivery of G2 Austin, and he brings extraordinary experience building large-scale, complex industrial facilities. David

David Siegler (SVP, Special Projects and Operations)

Thanks, Dan. I’ll start briefly with my personal background. Over the last 30 years I’ve executed dozens of major construction projects, many of which were far more complex than what we’re building in Rockdale. I want to leave you today with one clear takeaway from my remarks. This isn’t a hobby. Not for me, not for my team, and not for our contractors or subcontractors, many of whom I’ve had the honor of working with for years. We know how to execute this project. We’ve already identified ways we can enhance design, performance and efficiency when we have the opportunity to build G2 phase 2. I spent most of my career building cool things with smart, ambitious people who think unconventionally. After spending time with Dan, I knew he was one of those people.

His vision for Team One is inspiring and I knew I wanted to be part of that team that he’s building. My initial task at T1 is to build phase one of G2 Austin. This project in Rockdale, Texas is right down the road from a project that me and a lot of my team members have recently worked on. That’s the Samsung Semiconductor fab. So we’re working in a familiar setting with many of the same contractors we’ve had on that project and many others over the years.

Here’s where we stand today. We’ve completed the steel structure of the building. All the essential production line equipment for phase one is already in the U.S. We’re installing the mechanical, electrical and plumbing equipment. Earlier last week, we began to close a portion of the structure ahead of planned clean room preparations. As Dan mentioned, he and Evan have been managing our capital spending prudently at T1 Energy with Bridge Capital as they work on the comprehensive financing package.

This isn’t the first time I’ve been tasked with advancing a construction project with incremental funding. We have tools at our disposal in terms of sequencing and execution to make progress while the team sources additional capital and we continue to employ them at G2 to match the expected timeline of the larger financing. In the interim, please rest assured that my team and I are dedicated, experienced and excited to deliver a world class solar cell fab at G2. And now Dan, I’ll hand the call back to you.

Daniel Barcelo (Chief Executive Officer)

Thanks, David. Now please turn to slide 9. At G1 Dallas, the team delivered another strong quarter of production. We produced 1,056 megawatts of solar modules in Q3 2026 and, importantly, we made a decision to build 326 megawatts of module inventory during the quarter. This was a deliberate choice to position T1 to begin deliveries against our new offtake contracts as they come online in 2027. We want to be direct about what this means for Q3 numbers.

Building inventory has the effect of incurring costs of production ahead of revenue recognition. It is not a reflection of demand. Quite the opposite. We are building inventory because we have contracts to fulfill and we want to be ready to serve our customers. And those deliveries begin in Q4 and ramp through 2027. We expect that inventory build will convert to revenue and EBITDA. On the commercial side, our Q3 net sales were 197 million. And as I mentioned earlier, the new contracts we signed in October for 1.6 gigawatts of 2027 to 2028 deliveries bring our total contracted 2027 capacity to more than 3.5 gigawatts. The commercial machine at G1 is operating well and we are excited about what Q4 and 2027 will look like as the new contract delivery schedules kick in. For full year 2026, we are narrowing our guidance. T1 expects full year G1 Dallas module production of 4 to 4.2 gigawatts, near the high end of our prior guidance range of 3.1 to 4.2 gigawatts.

Looking ahead to 2027, with more than 3.5 gigawatts of G1 Dallas capacity already contracted and a customer offtake pipeline well in excess of what we have available, our initial plan is to produce 5.3 gigawatts, which would be consistent with the sold out status for G1 for the full year. We are looking forward to the financial performance that we believe G1 can generate with higher average pricing and superior contract coverage relative to 25 and 26. And with that I’ll turn the call over to Evan for a review of our financials and capital formation updates.

Evan Calio (Chief Financial Officer)

Thanks, Dan. Please turn to slide 10. Let me walk through the third quarter results and then spend some time on our capital formation progress, which I know is a topic of investor interest. On production, as Dan noted, we produced 1,056 megawatts of solar modules in Q3, a strong quarter for manufacturing output. The decision to build 326 megawatts of module inventory in advance of new contract deliveries means that our Q3 outbound volumes and revenues were lower than production, which impacted our Q3 adjusted EBITDA. We also had higher SG&A expense in the quarter, primarily related to external legal transaction fees associated with our financing, commercial negotiations and growth in T1’s organization.

As we execute construction of and preparation to operate G2, I want to be transparent about the factors that have been weighing against T1’s near term profitability and liquidity as we approach 2027, which has the potential to be a much stronger year based on higher pricing environment and offtake contract mix. First, we monetize our 45X tax credits through sales to third parties in the tax equity markets. That market has been slow to develop this year, particularly for non investment grade companies. As we noted in this morning’s press release, we are in discussions with multiple parties to execute potential sales, but until we do, there is a timing mismatch between tax credit accruals and cash flow realization.

Second, our SG&A reflects the cost of building a company, not just running one. We have big ambitions for T1 and two years into our corporate rebirth, we’re making investments that are intended to benefit our shareholders, customers and partners. Over the long term, the legal, advisory, organizational and capital investments we are making today are required to finance, construct, operate G2, sign offtake contracts, deepen our talent pool, navigate policy dynamics and manage commercial operations that are rapidly growing.

We have grown into a cost base for a larger multi asset company that we do not intend to scale linearly with revenue. Essentially, we have pre baked operating leverage into the business while we’re building G2, which we expect to catalyze a step change in T1’s profitability. Third, G1 Dallas is not yet generating the margins that we believe are achievable with improved module pricing and contract visibility. With the uplift in pricing for G1 modules produced with imported cells, our newest contracts should enable us to generate higher positive margins prior to accounting for 45X realizations. As Dan mentioned earlier, we’re planning for G1 to be sold out for the full year 2027, which should drive much better cost absorption at the asset level.

In our view, none of these factors are permanent. They are characteristics of a rapidly growing public company that is investing to deliver a step change in earnings power. On the balance sheet, as of September 30, we had total cash, cash equivalents and restricted cash of 137 million, of which 59.5 million was unrestricted. This reflects ongoing capital development into G2 Austin construction as well as inventory build at G1. On production guidance, we are tightening the full year 2026 range to 4.0 to 4.2 gigawatts, which is the high end of our previous 3.0 to 4.2 gigawatts. We expect to build some inventory again in the fourth quarter to accommodate recently signed 2027 contracts, but we also believe G1 should be positioned to potentially generate the best overall financial performance of the year in 4Q.

Looking ahead to 2027, our initial plan is to produce 5.3 gigawatts. Given our improved contract visibility, inbound customer demand in excess of our available capacity, and an opportunity to capture higher U.S. module pricing, when we have a more precise forecast of the G2 ramp up, we intend to refine our mix of G1 module production between imported and domestic cells. Section 232 onshoring plan clarity will complete the picture and allow us to contract the balance of available capacity in 2027 at attractive pricing.

Turning to capital formation, which is our top priority, in September we executed a 50 million private placement of convertible notes due 2031 with an existing qualified institutional investor. This transaction served as a bridge to our targeted comprehensive financing solution. As has been the case since G2 construction began, the equity and convertible debt markets have underwritten the initial stages of the project, while we’ve pursued multiple potential debt based financing paths.

I am pleased to report that we’re now in negotiations with certain institutional investors under exclusivity with certain exceptions to pursue a comprehensive debt financing solution. We are not in a position to disclose the counterparty or the specific terms while negotiations are ongoing, but I want to emphasize that this is an active process and closing it remains our singular focus. We believe that T1 brings several attractive attributes as a potential financing counterparty.

This financing is intended to complete the first integrated American polysilicon solar supply chain. The economics for G1 and G2 are improving with module pricing. T1 is well positioned for a post 232 environment. We have significant collateral at G1 and G2 and we have invested significant equity into our business. We will update investors as this process advances and look forward to being able to share the outcome. In parallel, we’re advancing other initiatives to generate value and harvest additional liquidity. I’ve already referenced our ongoing discussions to monetize 45X credits, which is a key priority. In addition, this morning we announced that T1 has entered into a non binding LOI to redevelop our Nordic Giga asset as a data center. Under the terms of the LOI, T1 would contribute the assets, power allowance and queue position for additional power, while the partner would be responsible for the financing capital expenditures in addition to identifying and securing tenant and/or compute offtaker.

No T1 equity contribution is a key element of the structure. Although this is an initial tangible step to form a potential joint venture, we are excited about the progress we’re making in Norway to harvest value and will keep the market informed as things develop. I’ll close with the reiteration of our Integrated Production Guidance targets, which remain our strategic focus. There are no changes to our run rate Integrated Production Adjusted EBITDA targets. We continue to project 375 to 450 million in annualized adjusted EBITDA run rate post completion of phase one G2 Austin and integration with G1 Dallas, and 650 to 750 million full 5 gigawatt G1, 5 gigawatt G2 integrated production. These numbers are underpinned by customer contracts and pricing environment we are seeing in the market today, which has only strengthened since 232.

And now I’ll turn the call back to Dan for closing remarks.

Daniel Barcelo (Chief Executive Officer)

Thanks, Evan. Please turn to Slide 11. I want to close today by putting the T1 story in a year-over-year context because I think it illustrates just how much this company has accomplished in a very short period of time and why I remain deeply convinced in our investment thesis. A year ago in November 2025, we were on the cusp of starting construction at G2 Austin with almost no financing in place. We had initial conversations underway for a G2 cell offtake agreement, but nothing signed.

Section 232 was just an open investigation with an uncertain outcome. The OEBBA required that we accelerate planned adjustments to important elements of our business, and we had just raised our first tranche of equity to begin G2 construction. Today, the picture is fundamentally different. We have signed more than 3 gigawatts of directly negotiated offtake contracts with major U.S. customers Avantis, Clearway, Treaty, Oak, and others. And we have more than three and a half gigawatts of 2027 capacity under contract. Section 232 is now enforced with minimum import prices and tariffs that are reshaping the competitive landscape in T1 Energy’s favor. G2 Austin is under construction with its steel structure complete, all equipment in the U.S., and MEP installation underway.

Our institutional equity and convertible debt investors have been remarkably supportive. We are in negotiations with certain institutional investors, under exclusivity with certain exceptions, to pursue a comprehensive, primarily debt-based financing solution for G2 Austin Phase One. What hasn’t changed is the North Star: building the first vertically integrated American silicon-based solar company on domestic polysilicon and wafers from Hemlock and Corning, domestic cells from G2 Austin, domestic modules from G1 Dallas, and technology we now own outright. That vision is intact. The demand for what we’re building is as strong as it has ever been, and we believe we are closer than ever to delivering it. What I can tell you is that every member of this team, from the floor of G1 Dallas to the construction site at G2 Austin to our headquarters in Austin, is working with urgency, purpose, and conviction.

We are executing the plan, and we look forward to continuing to demonstrate that in corporate. Thank you all for joining us this morning. And with that, I’ll turn it back to Jeff to coordinate the Q&A session.

Jeff Spittel (Investor Relations)

Thanks, Dan. The operator will now open up the line for questions.

OPERATOR

Thank you. At this time we will conduct the question-and-answer session. As a reminder, to ask a question you’ll need to press Star-11 on your telephone and wait for your name to be announced. To withdraw your question, please press Star-11 again. Please stand by for our first question. Our first question comes from the line of Philip Shin of Roth Capital Partners. Your line is now open.

Philip Shin (Analyst at Roth Capital Partners)

Thanks for taking my questions. In terms of the debt-based financing solution, was wondering if you could give us a little bit of color on what’s driving the delay. Big picture, the polysilicon 232 is very helpful for you, but did the announcement in August actually delay your financing? For example, are the potential counterparties in your debt-based financing solution waiting for the approval for your 232 onshore program that allows you to offset 232 tariffs?

Daniel Barcelo (Chief Executive Officer)

Thanks, Phil. The lenders there are not waiting for those aspects of it. I’d leave it at we’ve been rigorous in trying to close these comprehensive solutions, and we still have confidence that we will do that. But we have been rigorous, and it is not related to 232. I would suggest that it’s more related to certain processes that parties have. We can’t really share too much detail regarding time or parties, but we’ve shifted. Now I think the important parts are that we have a very high-quality collateralized asset with about $100 million of senior debt, and we have a fully ramped and loaded module facility. We have a cell facility that’s undergone a lot of construction with zero leverage, and we have huge 232 tailwinds. So in order to finance those aspects, I think our starting point is very, very strong, both corporately and on our base asset of G1. Evan, would you like to touch a little bit more about the financing and progress we’re making there?

Evan Calio (Chief Financial Officer)

I mean, we’re just—it’s our singular focus. We’re focused on it. You know, kind of where we are relates to strategic decisions that we made that we think are in the best interest of the company. But, you know, we’re moving forward, and we’ll look forward to announcing it when it’s completed.

Philip Shin (Analyst at Roth Capital Partners)

Okay. All right, thanks. Next question here is on when G2 is expected to start operations. I think you guys had been signaling Q1. In today’s deck, looks like timing is now April. When do you have to secure the financing by in order to keep the current April ramp target intact? Is it within the next month, or do you have the ability to wait two or three months? Just give us a sense of that timing. Thanks.

Daniel Barcelo (Chief Executive Officer)

Yeah, I’d say the first thing is what we’ve done is we’ve been attempting to keep the schedule on track with the absence of closing that financing, as we had thought we would do earlier. Regarding the schedule, a lot’s been done. Process equipment, very, very, very importantly, is in the United States, is in warehouses. Our long-lead facility equipment and key materials were ordered early in the project development. They all have set delivery dates, and we’re tracking that to our key milestones.

Permitting is on track. Access to power and permanent water is on track. Solid progress is made on construction on site. What we’d say is that assuming we’re doing financial close by year-end, we would expect to finish construction, installation, commissioning, and ramping by about midyear. I would look at the slide of the first cell production from March towards April as reflective of delays in financing. But many, many components of this project are continuing full steam ahead. David, would you like to give a little bit more color on the ground of what’s happening to keep the project tracking well?

David Siegler (SVP, Special Projects and Operations)

Absolutely, Dan. I think you noted that the key thing is we’ve procured and have set delivery dates for all long-lead items. That’s not just our process equipment, but that’s all the building infrastructure needs. So that gets rid of a major choke point. You know, our steel is up, our concrete’s in, our decking’s down, we’re putting walls on the building. So the project itself is very well, and we’ve done a really good job of positioning ourselves not to get that choke point of long-lead equipment, which is what’s holding up most construction now.

So once we get full financing, we’re positioned to be able to really make up some good schedule time.

Daniel Barcelo (Chief Executive Officer)

Great. Anything you’d like to add? Good, good.

Evan Calio (Chief Financial Officer)

Okay. Yeah, sure. No, I mean, I’d only add, Dan, to your points and the schedule, is that the bridge that we’re crossing to the ramp-up for G2 is significantly improved. I mean, you’re looking at, year over year, not even at leading-edge pricing, a 5-cent-a-watt increase in a U.S. module with an imported cell. Right? So the period that the facility is ramping, we will be selling modules at better margin, which helps to increase the profitability through that ramp period.

Philip Shin (Analyst at Roth Capital Partners)

Okay, thanks. A couple more and then I’ll pass it on. As a follow-up to the last topic, do you guys own the equipment that has been imported into the U.S., or is it in the U.S. but owned by a vendor? And the second question is on module pricing. You guys talked about the imported cell with U.S.-assembled modules being in the mid-30s with the MIP at 38 cents with an ad valorem tariff of 15%. Do you see potential for being able to price higher than mid-30s for that imported cell product?

Or, if not, why not? And maybe give a little color as to why you’re in that mid-30s pricing level. Thanks.

Daniel Barcelo (Chief Executive Officer)

Yeah. First question: we own the equipment, fully, 100% unlevered other than corporate debt. So that’s all the equipment. And that goes for all of the assets that we’ve been purchasing to build G2. Regarding pricing, we do see very, very, very strong pricing. I think given the nature of the types of investors—we have large utility-scale customers that are some of the best pedigree names in the market—obviously those are strong customers. We’re seeking out long-term strategic relationships with them. We do not do C&I. We are not doing residential. So from the largest utility-scale, high-quality customers, we’re now seeing it in the mid to mid-30s for the imported cells going towards 40, and mid-40s for domestic cells.

So on pricing, I think that the MIP and the duties have been quite a night-and-day scenario for the post-232 world, and those very large customers are responding to that pricing. As you know, we had a Commerce Department waiver on our duties for 1.7 gigawatts. We have had discussions with Congress regarding an onshoring plan, and awaiting guidance there we will be pursuing a robust onshoring plan to ensure that while we’re building and creating American jobs—using Hemlock polysilicon or Corning wafers in our products—we’ll get as much credit as possible on an onshore plan. I think those two components really give us a really interesting ability to serve these customers with a much better advantage price relative to competitors that don’t have that.

On pricing, Evan, do you want to talk a little bit more about leading-edge contracts and about the 22-gigawatt pipeline we have?

Evan Calio (Chief Financial Officer)

Yeah, I mean, they have been moving up incrementally, and those prices in mid-40s, mid-30s are where they are today. I think your question was—and so when we lock in contracts like that, we’re using the import waiver, so we’re locking in our cell costs. So we know what our cost of sales are when we lock in a margin. Now, could it go higher? Certainly. I mean, there’s been conversations—I know you’ve mentioned it—on potential MIPs going higher. If they go higher, that price goes higher. And then the second-largest variable is, you know, how is the onshoring plan going to be scored? You know, the people—the players—that are setting price should be at a higher level because they should be subject to the MIP generally. Right? If you just look at the composition of the market, we think we’ll have a relative advantage.

We don’t know yet, the reason being we have over $1.3 billion to 2030 commitment for U.S. polysilicon and wafer. I mean, that is significant. That is unique relative to peers. And at least on Phase One, it’s, you know, $510 million of new capital investment in the polysilicon supply chain, and it’s going to be more than double that if you get to Phase Two over this kind of three-year period. So significant elements of both of the primary considerations that we think they’ll be using to evaluate onshoring plan—and onshoring plan should be—are you going to get relief from the MIP and/or the ad valorem tariff.

So did that help answer your question, Phil?

Philip Shin (Analyst at Roth Capital Partners)

Yeah. Thank you. And one more actually here. In terms of the timing of the onshore program and whether or not you’re approved, could we see that near term, sometime maybe in December, or do you think it could be delayed, especially with the drama that’s happening around Nvidia? Thanks.

Daniel Barcelo (Chief Executive Officer)

Yeah. Hey, let me have Andy Munro, our Chief Legal and Policy Officer, on the line—he drives a lot of our policy and works closely on trade. Andy, do you want to talk about as much as we can about discussions with Commerce?

Andy Munro (Chief Legal and Policy Officer)

Sure. We’ve been engaged in very productive discussions with Commerce as evidenced by the waiver that we obtained. We’re in close contact with them and expect to be meeting with them again very soon. As Dan has said, we think we’re very well positioned to get a very favorable onshoring deal. It’s possible that things could be delayed a bit, but we’re certainly working productively with Commerce now. So we can’t guarantee any date, but certainly Commerce is working on this and focused on doing onshoring deals in the near future.

OPERATOR

Thank you. Our next question comes from the line of Greg Lewis of BTIG. Your line is now open.

Greg Lewis (Analyst at BTIG)

Yeah, hi. Thank you and good morning and thanks for taking my questions. Obviously a lot was just asked, but I guess I had a question around. You know, clearly the pricing outlook has improved. You’ve been successful in onboarding or signing new supply deals. I guess as we think about the potential financing has there been thought as we look to secure new offtake customers about potential prepayments on any of that potential orders just to kind of maybe alleviate the total capital that might need to be raised here?

Daniel Barcelo (Chief Executive Officer)

Thanks, Greg. We’ve explored multiple options, multiple directions, trying to optimize for both the tenor, the price and the cost of what we do. We’ve been quite active in terms of working with our suppliers to structure and time out payments for vendors and key vendors, both in Texas, vendors and equipment vendors. As I mentioned before, we outright own all of the equipment. There’s a lot of arrows in our quiver in terms of how we do different things.

I don’t really want to get into the details of what we can pull or what we can’t pull, but we do right now have exclusivity with certain exemptions, with certain institutional investors and those negotiations are ongoing and that’s towards that full comprehensive solution which would be primarily debt based. Ivan, would you like to touch on financing or other aspects or bridges towards that?

Ivan

Yeah, no, look, we have had prepayments to be clear. You can see them on our balance sheet. You know, I think there’s a, there’s this tension of a lot of different factors in terms of know what you’re trying to optimize. I mean we kind of started out initially in a kind of cost plus environment, multi year that wasn’t kind of really optimized over time in our conversations. And we’re now, you know, really pushing more, you know, towards price and more limited duration.

Right. That’s the kind of better trade for the newer contracts that we’re negotiating. Deposits are an element. Deposits also kind of choose some credit 100%. Realize that as a tool. We also can use that here near term because the deal 232 also really kind of accelerated the typical capital structure to build a module because you had to get cells in the country very quickly in a different way than you normally would. So it kind of change the typical working capital cadence on a contract.

Right. So you know, so those contracts, you know, that, that would make sense but you’re using the capital, you know, there versus you know, using it for, for construction. But yeah, appreciate it. And that’s a, that’s a good question.

Greg Lewis (Analyst at BTIG)

Okay. And then the other question I had was around, you know, I guess I don’t, I don’t remember the exact timing, but what I want to say, six to 12 months ago you made that investment in the Talon. Any kind of update on that? I believe those cells are scheduled to come online in 28. Do we have any sense if that’s still the case and how those fit into a 232 world?

Daniel Barcelo (Chief Executive Officer)

Yes, we did make an investment in Talon Energy, but I would defer questions towards Talon. The strategy behind that was being part of a robust ecosystem in Texas and having less capital intensive type agreements to have more access to cells. That still could remain a strategy for us. The demand for those domestic cell is night and day from when we even made that announcement. But I would really defer questions towards Adam and Brandon or Talon.

Greg Lewis (Analyst at BTIG)

All right guys, thank you.

Daniel Barcelo (Chief Executive Officer)

Thank you very much. Thanks, Greg.

OPERATOR

Thank you. Our next question comes from the line of Shawn Milligan of Needham. Your line is now open.

Shawn Milligan (Analyst at Needham & Company)

Hey, thanks for taking the questions today. I guess when you look at next year’s volume guidance, can you walk us through sort of how you’re thinking about cells? So what’s covered under the waiver that you just received? Maybe what you already have in inventory and then what you expect from the ramp up of G2 next year given the timing. I’m just trying to get a sense for kind of the cell outlook for next year for you.

David Siegler (SVP, Special Projects and Operations)

Sure, I’ll talk on schedule and let Evan give a little color on the ramp up on the other pieces. But on the schedule side, again, assuming if we’re going to do a financial close by year end, we’d expect to finish the installation commission ramping by about mid year as you’re doing commissioning and ramping cells are produced. Those cells are in many cases viable cells that can be included in terms of that. So we’ll be building that inventory as this equipment ramps.

There’ll be varying qualities of those cells. But that commissioning process and ramping process, I just want to be crystal clear, does produce functioning commercial cells. So as we get towards about mid year to get to full ramp, then we’ll be running operations at a higher volume. So for 2027 we expect to see and have a lot of volume for that. Evan, do you want to talk a little bit about the contracts and what phasing we have on those contracts?

Evan Calio (Chief Financial Officer)

Yeah, I mean look, the cells imported were for 2027, right? So that’s. We’re building modules. That’s why we’re carrying. We’re converting the cells into modules for delivery in 2027. Now that’s why we carried some inventory out of the quarter and we’ll be carrying some inventory out of the year. Less than the third quarter but still carrying inventory into. Into 2027 I would say, you know, look on G2 you know, Dan and David laid out the, the ramp up and the timing, but in terms of, from a commercial perspective, and the demand is incredible right there.

There is very limited product if you’re a seller of a G2 cell. And so that is an easy contract to enter into. We have entered into limited contractual capacity for 2027 right now. And some of the other 27s have moved into 28. And so we’re limiting our contractual exposure. You can appreciate contracts have LDs, other elements until the comprehensive financing is completed, until we have better visibility and we know that we can, that we can sell those cells at attractive margin, you know, relatively easily.

So the balance will be, you know, all imported cells and the imported cells, the additional contracts. Right. That could be signed today. But we need to wait to fully assess our onshoring plan or how our onshoring agreement is, is, is finalized to fully understand what my cost structure is for that imported cell. Because there is a wide band, it’s a 12 cent band between, you know, no credit and full credit on, on that cell. Right. And so where am I exactly on that spectrum?

That would then enable me to price the balance of, of merchant capacity. And we’ll have some, which we’re not going to disclose at this point that are allocated for G2, but we’re being conservative on contracting given those variables.

Daniel Barcelo (Chief Executive Officer)

I would just add that there’s a lot of noise around AI and the data centers and moratoriums. But what we get is again from very large utility scale developers focused on 27, 28, touching 29 for real projects with real hyperscalers, that demand is very, very real. Solar and storage is dominating most of that growth as the markets await for turbines and gas and other solutions. So solar and storage is still the dominant, dominant demanded aspect. And again from the 232 perspective, night and day from how we feel we’re positioned for that.

Shawn Milligan (Analyst at Needham & Company)

Thanks. And then on the cogs side, I know if you go back to last year, and then earlier this year, the cogs per watt were moving around a little bit. It seems like the last two quarters you’ve settled in, it’s been a little more consistent. I understand the sell side is dynamic here, but everything outside the cell. Are you seeing relatively consistent pricing now for you all from the COG side?

David Siegler (SVP, Special Projects and Operations)

Yeah, when there was the reciprocal tariffs that came out, there was a lot of volatility, particularly in glass frames and other BOM. I think we’ve seen a lot more stabilization in the supply chains there and a lot less volatility other than the cell. Cell pricing since the time you mentioned has come down more recently during the 120 day import window for 232. There’s been a tick up in that pricing. That’s just because of the amount of demand connected to even ourselves with the import waiver we have at 1.7 gigs.

But I’d say in general we’ve seen a much more stabilization on the rest of that supply chain. That’s from non cell.

Evan Calio (Chief Financial Officer)

Yeah, I’d only add that as we ramp our capacity and we move to 2027’s target, your conversion costs continue to compress. Right. So you know, as you scale, you know the conversion element which can save you a few pennies a lot depending on, you know, where you are and capacity is pressuring. And I’d say that you know, cell pricing, yes, stabilized, but it also did uptick as you had a lot of buyers looking to import cells inside of this window. And if you look on the other side of this window and cells that I could buy to be delivered for December 5th, they’re significantly lower than the price that they are today.

And whether or not it’s attractive to purchase them is going to depend upon, you know, the outcome of your onshoring and how, you know the MIP ad valorem math works on your cost structure.

Shawn Milligan (Analyst at Needham & Company)

Thank you,

Daniel Barcelo (Chief Executive Officer)

Steven, I think we can go to the next question.

OPERATOR

Yes, our next question comes from Nick Lipinski of Vertical Research Partners. Your line is now open.

Nick Lipinski (Analyst at Vertical Research Partners)

Hey, good morning. I was wondering if you could provide any color on the imported domestic cell split on the recent 1.6 gigawatts of offtake agreements. You mentioned a blend and just wanted to see if you could put a finer point on that if there’s anything contractual or if you have some ability to flex that on the import duty. Obviously, just to be clear, you’re saying these are imported cells with the wafers foreign. So of that amount the full amount would have been imported, imported from non U.S.

Evan Calio (Chief Financial Officer)

He’s asking for the contract mix. He’s asking for the amount of contract. They’re significantly weighted towards an imported cell. As we’ve mentioned, you know, we, we have very, we’ve, we’ve limited strategically the blend on a G2 cell until everything’s locked. And, and, and given they’re also easier to sell. Right. Like we have contracts that we could execute that we’re holding. You know, until we understand the full onshoring plan. Right. And until we understand the exact timing date on financing which cascades through the schedule.

So we know we can, you know comfortably contract.

Daniel Barcelo (Chief Executive Officer)

But foundationally, that imported plan can connect and expand because a portion of that 1.6 gigawatts does touch into domestic cell either in connected relationships or through ongoing negotiations with those parties. We were very selective in who we allocated that 120 day window for. And those customers are in our minds part of our strategic customer base that we hope would also transition towards more domestic content. And embedded in your question is the right point.

A lot of customers are looking for blending to maximize the benefits of different tax incentives that may exist to minimize cost structure and also to ensure that they have a stronger and growing domestic content which a lot of customers are seeking. So we’ve used those waivers very, very strategically on the onshoring plan we would expect to do the same. And again, we don’t have the details from Commerce about what relief We’d get, but we do think we’re very well positioned for it. While we don’t have a domestic cell, obviously a lot more is going to be focused towards the imported cells and building as much G1 flow as we can and keeping those volumes high. We do expect to sell out 2027. We do see very good pricing at G1. And as we ramp up and get into our 2027 deliveries of domestic cells, we look to bridge a lot of those both 120-day customers and some of the on-screen customers into that domestic cell business.

Evan Calio (Chief Financial Officer)

Yeah, and I’d also add to Dan’s point is that, since we have the pre-232 Corning wafer supply contract, our domestic content percentage is higher for G2 than others and so it has more domestic content. That’s what they’re blending for domestic content largely. And so that’s a relative strength, at least, of our offering.

Daniel Barcelo (Chief Executive Officer)

Thanks very much. We’re not breaking out NRI separately yet. We’re in an integration phase. We’ll get back and get more color on that in due course. Just to re-anchor NRI for the benefit of others that don’t necessarily know the history like you do, I think there are three components to NRI that are very important. First of all, there’s a network operating center which has a long tail of O&M fees and revenues related to battery monitoring across the United States. The second, very important, is about controllers, for both BMSs and EMSs. More and more battery systems require American controllers.

We thought that that part of the business is a very, very important aspect for it. And then finally is a part of the business with BESS integration, and that is delivering to bespoke customers, both in the United States and international, solutions for it. We’re looking to expand on all three of those areas. On the BESS integration side, a lot of customers are looking for domestic LFP cells. Those are very hard to find across the board. As people scramble for those domestic BESS cells, they’re looking for better and better margin. So we are working in that market environment, as are most other of our competitors, to secure those cells because that’s what the customers want.

From a domestic content and from a non-FIAT perspective on the other two areas, we feel very confident and robust demand for the controller solutions. A lot of the customer mix for NRI is legacy relationships. Some of them smaller parts are government related, some of them are international, some of them are domestic long existing relationships. Our core strategy of incorporating NRI was to be additive around our solar customers. A lot of the solar customers’ projects all have, or increasingly will have, storage solutions attached to that. And we felt that having a stronger sales operation, sales engineering, and sales outreach that could afford many of our utility-scale customers a stronger engineering and sales outlook was an important offering of what we could deliver customers.

Thank you very much. Thank you.

OPERATOR

Thank you. This concludes the question and answer session. I would now like to turn it back to Jeff Spittel for closing remarks.

Daniel Barcelo (Chief Executive Officer)

Thanks. Before we go to Jeff, I would just like to close. Look, we are extraordinarily focused on financial close. We are continuing to advance G2 Austin and we will update investors as we get towards that. It’s really been night and day in terms of demand. Post-232, the waiver has been very powerful. The new contracts we announced are a strong indicator. Our pipeline’s robust, pricing’s good, and we’re really excited about advancing G2 Austin and getting these domestic cells online and helping to build American solar industry.

With that, Jeff, I’ll turn it back to you for closing comments.

Jeff Spittel (Investor Relations)

Thanks, Dan. Well, thank you, everybody, for participating today. We spent a lot of time talking about the market today, and we’ll be at RE+ next week. Please feel free to ping us and stop by and visit with us, but we look forward to seeing a bunch of you on the road next week. This will conclude today’s call.

OPERATOR

Thank you for your participation in today’s conference. This does conclude the program, and you may now disconnect.

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