Q3 2025 T1 Energy Inc Earnings Call
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Operator: Good day, thank you for standing by. Welcome to the T1 Energy Q3 2025 Earnings Conference Call. At this time, all participants are on 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 will need to press star one one on your telephone. You will hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Jeffrey Spittel, Executive Vice President, Investor Relations and Corporate Development. Please go ahead.
Good day, and thank you for standby and welcome to the T. One energy third quarter 2025 earnings Conference 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.
Ask a question during the session you will need to press star one one of your telephone.
Her an automated message advising your hand is raised to withdraw your question. Please press star. One again, please be advised that today's conference is being recorded I would now.
I'd like to hand, the conference over to your Speaker today Jefferies Patel Executive Vice President Investor Relations and corporate development. Please go ahead.
Jeffrey Spittel: Good morning, and welcome to T1 Energy's Q3 2025 earnings conference call. With me today on the call are Daniel Barcelo, our Chief Executive Officer and Chairman of the Board, Evan Calio, our Chief Financial Officer, Jan Arve Haugan, our Chief Operating Officer, and Otto Bergesen, our SVP of Project Development. 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.
Good morning, and welcome to <unk> Energy's third quarter 2025 earnings Conference call.
With me today on the call are Dan Barcelo, our Chief Executive Officer, and Chairman of the Board, Kevin Kelly, Our Chief Financial Officer.
Wally our chief operating officer.
Auto our Easter Bergesen, our SVP of project development.
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 <unk> 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 Exchange Commission.
And our other filings made with the SEC all of which are available on the Investor Relations section of our website with that I'll turn the call over to Dan.
Jeffrey Spittel: With that, I'll turn the call over to Dan.
Daniel Barcelo: Thanks, Jeff. Welcome everyone to our Q3 earnings call. Let's turn to slide 4, please. Many of you may be new to the T1 story this quarter. We'll begin today with a brief look at our current position in the US solar market. With 5 GW of annual capacity at G1 Dallas, T1 is the largest American manufacturer of silicon-based solar modules. We are the second largest American-owned solar module producer in the US. We're just getting started. As we'll discuss on today's call, we are advancing our plan to start construction of the first 2.1 GW phase of our US solar cells fab, G2 Austin, before year-end.
Thanks, Jeff and welcome everyone to our third quarter earnings call, let's turn to slide four please.
Many of you may be new to the tier one story this quarter. So I will begin today with a brief look at our current position in the U S solar market with five Gigawatts of annual capacity at <unk> Dallas T. One is the largest American manufacturer of Silicon based solar modules and we are the second largest American on solar module producer in the U S.
But we're just getting started.
As we'll discuss on today's call. We are advancing our plan to start construction of the first two one gigawatt phase of our U S solar cell fab G to Austin before year end.
Daniel Barcelo: G2 is the centerpiece of our strategy to build the first end-to-end domestic polysilicon solar supply chain in the US. This strategy is intended to competitively differentiate T1 and to align the company with the growth dynamics in US power markets. Let's move to slide 5 for a closer look at the big picture developments which underpin our strategy. Today's theme is Powering America. With US electricity demand growing faster than it has in decades, we are positioning T1 as a homegrown enabler of 3 increasingly evident macro trends: accelerating US AI development, onshoring of advanced American manufacturing, and strengthening American energy security. These 3 trends are the thematic pillars of T1's investor's case. Energy is key to unlocking the future of AI. New data centers now routinely require gigawatts of electricity, and they are growing exponentially more compute and energy-intensive.
<unk> is the centerpiece of our strategy to build the first end to end domestic polysilicon solar supply chain in the U S. This strategy is intended to competitively differentiate two one and to align the company with the growth dynamics in U S power markets.
Now, let's move to slide five for a closer look at the big picture developments, which underpinned our strategy.
Today's team is powering America with U S electricity demand growing faster than it has in decades, we are positioning <unk> as a homegrown enabler of three increasingly evident macro trends.
Accelerating USAA development.
Onshoring of advanced American manufacturing and strengthening American energy security. These three trends are the thematic pillars of tier ones investors case.
Energy is key to unlocking the future of AI, new data centers now routinely required gigawatts of electricity and they are growing exponentially more compute and energy intensive energy has emerged as the leading checkpoint for AI growth. The U S has the natural resources and talent to Debottleneck, the equation and tier one clients to contribute by bringing the capability.
Daniel Barcelo: Energy has emerged as the leading checkpoint for AI growth. The US has the natural resources and talent to debottleneck the AI equation, and T1 Energy Inc. plans to contribute by bringing the capability to produce leading-edge solar technology at scale domestically. T1 Energy Inc. intends to power American AI by investing in American advanced manufacturing. The reshoring of manufacturing is another trend that is driving electricity demand growth and presenting T1 Energy Inc. with the opportunity to strengthen critical US energy supply chains. We have ramped up domestic PV module production at G1 Dallas. We are advancing towards the expected start of construction at G2 Austin, our US solar cell fab, and we are expanding our US supply chain through our recently announced partnerships with Hemlock Semiconductor, Corning Inc., Nextpower, and Talon PV. We have entered an era when control of digital intelligence and AI infrastructure will determine the fate of nations.
To produce leading edge solar technology at scale domestically.
<unk> intends to power American AI by investing in American advanced manufacturing the re shoring of manufacturing is another trend that is driving a true city demand growth and presenting T. One with the opportunity to strengthen critical U S energy supply chains, we have ramped up domestic PV module production in Q1, Dallas, we are advancing towards the expected.
Start of construction in Q2, Austin, our U S solar cell fab and we're expanding our U S supply chain through our recently announced partnerships with Hemlocks Corning.
Next power and talent television.
We have entered an era when control of digital intelligence and AI infrastructure will determine the fate of nations. This underscores the strategic value of domestic energy capacity and we believe <unk> plan to build a domestic TV solar supply chain will contribute to U S energy security and.
Daniel Barcelo: This underscores the strategic value of domestic energy capacity, and we believe T1's plan to build a domestic PV solar supply chain will contribute to US energy security. In addition, standing up a domestic end-to-end polysilicon supply chain should strengthen our national ability to produce semiconductors, advanced materials, and grid and space technologies, all of which involve common inputs and production processes. Turning to slide six, let's drill down into the AI power theme. If the US is to maintain its lead in AI, we need more electrons, and we need them now. Leaders from the technology industry have suggested the US must double the 2024 pace of electricity additions to 100 GW per year to close the widening electron chasm between AI-driven demand and power availability.
In addition, standing up the domestic end to end polysilicon supply chain should strengthen our national ability to produce semiconductors advanced materials and grid space technologies, all of which involve common inputs and production processes.
Turning to slide six let's drill down into the AI powered theme if the U S is to maintain its leading AI, we need more electrons and we need them now leaders from the technology industry has suggested the U S with double the 2020 for pace of electricity additions to 100 gigawatts per year to close the widening electron Chatham between AI driven.
And power availability.
Daniel Barcelo: At T1, we are proponents of a US energy abundance, and we endorse the strategic merits of adding new natural gas and nuclear power capacity to our grid. Those technologies can only play a limited role in the near term due to swollen order backlogs, permitting red tape, and construction cycle times for new generation facilities. Solar, coupled with battery storage, is the obvious choice to bridge this gap as a rapidly deployable resource at scale. The dawn of the AI age is a company-making opportunity for T1. We have available capacity at G1 Dallas, where we recently eclipsed the daily production record equating to an annualized rate of 5.2GW.
At <unk>, we are proponents of U S energy abundance, and we endorsed the strategic merits of adding new natural gas and nuclear power capacity to our grid, but those technologies can only play a limited role in the near term due to small and order backlogs permitting red tape and construction cycle times for new generation facilities.
Solar coupled with battery storage is the obvious choice to bridge this gap as a rapidly deployable resources scale.
The dawn of the AI age as a company, making opportunity for Q1, we have available capacity in <unk>, Dallas, where we recently eclipsed the daily production Bradford equating to an annualized rate of five two gigawatts as you look to 2026 and beyond our plans to integrate upstream of <unk> will position <unk> as the first company that can offer hyperscale as a partner.
Daniel Barcelo: As we look to 2026 and beyond, our plans to integrate upstream of G1 will position T1 as the first company that can offer hyperscalers and their partners a high domestic content, polysilicon-based TOPCon solar module. Let's move to slide 7 for an update on T1's business. Shortly after we announced our preliminary Q3 results in October, we closed two successful equity capital markets transactions. T1 raised $72 million in gross proceeds from a registered direct common equity offering with high-quality new and existing institutional equity investors. As previously disclosed, T1 entered a $100 million commitment for the issuance of preferred and common stock to certain funds and accounts managed by Encompass Capital Advisors, LLC, in connection with T1's acquisition of Trina Solar's US manufacturing assets.
Our high domestic content poly silicon based top Consoler module.
Now, let's move to slide seven for an update on <unk> business.
Shortly after we announced our preliminary third quarter results in October we closed two successful equity capital markets transactions <unk> raised $72 million in gross proceeds from a registered direct common equity offering with high quality, new and existing institutional equity investors and as previously.
Disclose to you want to enter the $100 million commitment for the issuance of preferred and common stock to certain funds and accounts managed by encompass capital advisors LLC in connection with <unk> acquisition of Trina Solar is U S manufacturing assets.
Daniel Barcelo: Last month, T1 elected to make the second and final draw of $50 million pursuant to this $100 million commitment. This infusion of equity capital positions T1 to begin the first phase of construction at G2 Austin during Q4 2025. Although we initially intended to focus on raising debt prior to an equity tranche to partially fund the first phase of construction at G2 Austin, these two transactions enable us to raise capital at attractive terms while we engage with prospective debt investors and advance the traditional project financing. The additional trading liquidity from a higher share count and market capitalization also provides opportunities for us to add new shareholders who were previously unable to trade in our stock. At T1, we are focused on shareholder value, and as equity owners ourselves, we are highly sensitive to dilution.
Last month <unk> elected to make the second and final draw of $15 million pursuant to this $100 million commitment.
This infusion of equity capital positions <unk> to begin the first phase of construction at G to Austin during the fourth quarter of 2025.
Although we initially intended to focus on raising debt prior to an equity tranche to partially fund the first phase of construction at G to Austin. These two transactions enabled us to raise capital at attractive terms, while we engage with prospective debt investors in advance of traditional project financing.
The additional trading liquidity from a higher share count and market capitalization also provides opportunities for us to add new shareholders, who were previously unable to trade in our stock.
At <unk>, one we are focused on shareholder value and as equity owners ourselves. We are highly sensitive to dilution. So we continue to use equity judiciously to fund growth Capex, while we optimize our capital stack.
Daniel Barcelo: We continue to use equity judiciously to fund growth CapEx while we optimize our capital stack. Our capital formation progress positions us to add G2 to our expanding domestic polysilicon solar supply chain, which now encompasses a growing network of American partners. In August, we announced an expanded polysilicon supply agreement to include production of American-made solar wafers with Hemlock Corning. In October, we signed a framework agreement with Nextpower for the provision of domestic steel frames. We made a strategic minority equity investment in Talon PV LLC, which is building a US solar cell fab in Texas. These partnerships are foundational to T1's mission to build the first integrated American polysilicon solar supply chain. Our expanding partnership network and the domestication of our supply chain are also key elements of T1's policy playbook.
Our capital formation progress positions us to add <unk> to our expanding domestic polysilicon solar supply chain, which now encompasses a growing network of American partners and.
In August we announced an expanded polysilicon supply agreement to include production of American made solar wafers with hemlock Corning.
October we signed a framework agreement with Nex power for the provision of domestic steel frames and we made a strategic minority equity investment in talent PV LLC, which is building a U S solar cell fab in Texas.
These partnerships are foundational <unk> mission to build the first integrated American polysilicon solar supply chain.
Our expanding partnership network and the domestication of our supply chain are also key elements of tier ones policy playbook as we highlighted on our second quarter call. Our team continues to advance the defiance and process to maintain tier ones eligibility for section 40, <unk> tax credits in 2026 and beyond due to <unk>.
Daniel Barcelo: As we highlighted on the Q2 call, our team continues to advance the de-FIOCing process to maintain T1's eligibility for Section 45X tax credits in 2026 and beyond due to requirements in the OBBBA. Our commitment to invest in advanced American manufacturing and critical domestic energy supply chains are consistent with some of the administration's top priorities. Turning to our operations, we continue to ramp production sales during Q3 at T1 Dallas, our state-of-the-art solar module facility. During Q4, we expect to generate significantly higher sales and EBITDA as we ship modules under previously booked merchant sales agreements and as we sell down inventory to customers who are clearing out 45X eligible modules before year-end. As a result, our 2025 EBITDA guidance of $25 to 50 million is unchanged.
Acquirements and the <unk>.
Moreover, our commitment to invest in advanced American manufacturing and critical domestic energy supply chains are consistent with some of the administration's top priorities.
Turning to operations, we continue to ramp production sales during the third quarter two one Dallas our state of the art solar module facility during the fourth quarter, we expect to generate significantly higher sales and EBITDA as we ship modules under previously booked merchant sales agreements and as we sell down inventory to customers, who are clearing out 45 X eligible modules before.
Our year end as a result, our 2025 EBITDA guidance of $25 million to $50 million is unchanged.
Daniel Barcelo: While we build our business in the US, we continue to advance our goal to generate value from our legacy European assets, which are attracting interest for repurposed data center applications. We look forward to providing updates on this initiative as warranted by our progress. As we do on each quarterly earnings call, we have a rotating guest speaker from T1's management team to expand on an important topic. Since this quarter's theme is Powering America, I'd like to introduce our SVP of Project Development, Otto Bergesen, to provide an update on G2 Austin, which will be the centerpiece of T1's domestic supply chain and where we are approaching the start of construction. Otto.
While we build our business in the U S. We continued events our goal to generate value from our legacy European assets, which are attracting interest for repurposed datacenter applications, we look forward.
To providing updates on this initiative as warranted by our progress.
As we do on each quarterly earnings call, we have a rotating guest speaker from tier ones management team to expand on an important topic. Since this quarter's theme is towering America I'd like to introduce our SVP of project development auto or Bergesen to provide an update on G to Austin, which will be the centerpiece of <unk> domestic supply chain and where we are approaching the start.
With construction.
Auto.
Otto Bergesen: Thank you, Dan. Let's turn to slide 8. After months of work, we have a great design developed and tier 1 partners contracted to help us move ahead with G2 Austin. We are ready to enter full execution shortly. We're pursuing a 2-phase approach to reach more than 5 gigawatts of capacity of solar cell manufacturing. Phase 1 will be a 2.1 gigawatt fab, which we plan to follow with a 3.2 gigawatt phase 2. If offtake level permits, we can expand the second phase. The basis of design is Trina Solar's more than 100 gigawatts of solar cell fabs in general, and their 5 gigawatts state-of-the-art Huai'an fab in particular. We have customized this design together with JFE Engineering in China and later with SSOE as our US engineering firm.
Thank you, Dan, let's turn to slide eight.
After months of work, we have a great designed developed and tier one partners contracted to help US move ahead with you too often we are ready to enter full execution shortly.
We're pursuing a two phased approach to reach more than five gigawatts of capacity of solar cell manufacturing phase one will be a two one gigawatt.
We plan to follow up with a three two gigawatt phase III.
I'll state level permits we can expand the second phase.
The basis of design that Trina solar has more than 100 gigawatt of solar cell types in general and there are five gigawatt state of the art <unk> in particular.
We have customized this designed together with JMP engineering in China, and later with SSO as our U S engineering firm.
Otto Bergesen: We have been working very closely with Trina, JFE, SSOE Group, and other companies over the past 10 months to leverage their project and operational experience while securing US compliance and tailoring to US conditions. Yates Construction has been selected as our general contractor. We have worked with Yates since May to provide pre-construction services, focusing on constructability and engagement of global and local subcontractors. Laplace has been selected as our EPC turnkey partner for the production line equipment. In August, we began working with Laplace on detailed design and preparations for equipment manufacturing. Laplace was a first mover on TOPCon and has extensive experience in the TOPCon space. They have been part of solar cell fabs for more than 400 GW of capacity. T1 has great confidence in their ability to deliver top quality and to achieve according to their performance guarantee under the contract.
We have been working very closely with Trina JSC SSO, we and other companies over the past 10 months and leverage their project and operational experience, while securing U S compliance and tailoring to use conditions.
Yes, construction has been selected as our general contractor we.
I've worked with <unk> since may to provide preconstruction services, focusing on infrastructure ability and engagement of global and local subcontractors.
<unk> has been selected as our EPC turnkey partner for the production line equipment.
In August we began working with Laplace on detailed design, our preparations for equipment manufacturing.
<unk> with a first mover on top and has extensive experience in the telecom space.
They have been part of solar cell fab for more than 400 gigawatts of capacity.
One of the great confidence in their ability to deliver top quality and to achieve according to their performance guarantee under the contract.
Otto Bergesen: The past few months, we've been working closely with Laplace and Yates to engage critical subcontractors to identify and address long lead items. We are pleased to report that the project has been very well-received in the market and that we are currently contracting with subs to support the project schedule. For example, we have secured a very beneficial mill roll contract that enabled us to start directing steel in March 2026. We have also secured favorable terms on long lead electrical equipment like switchgears, generators, and transformers. Finally, we have built a strong team, combining tier 1 partners with a solid in-house project management and engineering team.
The past few months, we've been working closely with <unk> and Yates to engage critical sub contractors to identify and address long lead items were.
We are pleased to report that the project has been very well received in the market and thus we are currently contracting with substance to support the project schedule.
For example, we have secured a very beneficial mill roll contract that enabled us to start the reference deal in March 2026.
We have also secured favorable terms on long lead electrical equipment, let's switch gears generators and transformers.
Finally.
We have built a strong team.
Combining tier one partners with a solid in house project management and engineering team. If you take one thing from a portion of todays presentation I wanted to be that we have a world class team with the experience and technical expertise execute the <unk> Austin project successfully and we look forward to breaking ground before year end.
Otto Bergesen: If you take one thing from our portion of today's presentation, I want it to be that we have a world-class team with the experience and technical expertise to execute the G2 Austin project successfully, and we look forward to breaking ground before year-end. With that, I'll turn it back over to Daniel.
With that I'll turn it back over to Don.
Daniel Barcelo: Thanks, Otto. Let's turn to slide 9. While we move towards the expected start of construction at G2, production and sales continue to ramp at G1, our state-of-the-art US module facility. We have produced more than 2.2GW of modules year to date, and we are on track to meet our unchanged 2025 production plan of 2.6 to 3GW. In October, we achieved a daily production record of 14.4MW, which equates to an annualized run rate of 5.2GW. In less than 1 year, the T1 operations team has brought G1 from the start of production to a daily run rate that exceeds nameplate capacity, which speaks to the talent and dedication of our people.
Thanks, Aldo, let's turn to slide nine while we move towards the expected start of construction in <unk> production and sales continue to ramp in Q1, our state of the art U S module facility. We have produced more than two two gigawatts of modules year to date and we are on track to meet our unchanged 2025 production plan of two six to three gigawatts.
And in October we achieved a daily production record of 14, four megawatts, which equates to an annualized run rate of five two gigawatts and less than one year. The tier one operations team has brought <unk> from the start of production to a daily run rate that exceeded nameplate capacity, which speaks to the talent and dedication of our people.
Daniel Barcelo: During Q3, T1 generated record net sales of about $210 million. We expect sales to continue growing meaningfully in Q4 as we start deliveries of previously booked merchant sales and we liquidate finished goods inventory that is eligible for 45X credits before year-end. This near-term sales pipeline and our continued operational progress underpin our unchanged 2025 EBITDA guidance of $25 to 50 million. We look forward to 2026. Our supply chain team is focused on sourcing non-FIOC cells to feed G1 during the bridge year to the anticipated start of production at G2 in Q4 2026. We have already identified a meaningful supply of these cells for next year, which will be the primary driver of G1 production and sales before G2 is up and running.
During the third quarter, two one generated record net sales of about $210 million and we expect sales to continue growing meaningfully in the fourth quarter as we start deliveries of previously booked merchant sales and we liquidate the finished goods inventory that is eligible for 45 X credits before year end.
Near term sales pipeline and our continued operational progress underpin our unchanged 2025, EBITDA guidance of $25 million to $50 million.
As we look forward to 2026, our supply chain team is focused on sourcing non field sales for <unk>. During the bridge here to the anticipated start of production at <unk> in Q4 2026.
We have already identified a meaningful supply of these cells for next year, which would be the primary driver of Q1 production and sales before <unk> is up and running.
Daniel Barcelo: Now I'll turn the call over to Evan to walk you through the financials.
And now I'll turn the call over to Evan to walk you through the financials.
Evan Calio: Thank you, Dan. Let's move to slide 10 for a summary of our unchanged guidance. As detailed in this morning's release, our 2025 EBITDA guidance of $25 to 50 million based on a 2025 production of 2.6 to 3 GW is unchanged. In Q4, we anticipate a significant ramp in production and sales related to higher production levels, delivery of previously booked merchant sales, as well as some liquidation of finished good inventory before year-end. We expect Q4 production and module sales to exceed combined production sales in the first 3 quarters of 2025, as we've now ramped the facility to average 4.5 GW run rate in Q4.
Thank you Dan let's move to slide 10 for summary of our unchanged guidance as detailed in this morning's release, our 2025 EBITDA guidance of $25 million to $50 million based on 2025 production of two six to three gigawatts is unchanged.
In the fourth quarter, we anticipate a significant ramp in production sales related to higher production levels delivery of previously booked merchant sales as well as some liquidation of finished good inventory before year end.
We expect fourth quarter production in module sales to exceed combined production and sales in the first three quarters of 2025 as we've now ramped the facility to average four five gigawatt run rate in the fourth quarter.
Evan Calio: In our October release of preliminary third quarter results, we also introduced annual run rate EBITDA guidance of $375 to $450 million for an integrated production of G1 Dallas with the first 2.1 GW phase G2 Austin. The guidance is based upon G2 Austin achieving full run rate production sales of 2.1 GW and an annualized G1 Dallas run rate production sales of 5 GW, supplied by 2.1 GW of G2 cell and the remainder through a combination of non-FIOC foreign cells. Any US cells procured potentially through Talon represents upside. Let's turn to slide 11 for a summary of T1's financial condition. Bringing the first phase of G2 Austin online should deliver a step change in T1's profitability and cash flow generation. The recent capital markets transactions Dan highlighted have advanced that future.
And on October release of preliminary third quarter results. We also introduced annual run rate EBITDA guidance of $375 million to $450 million for integrated production of G. One Dallas with the first two one gigawatt phase G to Austin the guidance is based upon GTO Austin achieving full.
Run rate production and sales of $2, one gigawatt and an annualized G. One Dallas run rate production sales of five gigawatt supplied by two one gigawatts of G T cell and the remainder through a combination of non Fiat foreign sales.
U S sales procured potentially through talent represents upside.
Now, let's turn to slide 11 for a summary of <unk> financial condition.
Bringing the first phase of <unk> Austin online should deliver a step change in <unk> profitability and cash flow generation. The recent capital markets transaction as Dan highlighted at <unk>.
Advanced that future.
Evan Calio: Even prior to the equity transactions, our cash position built significantly as we anticipated in Q3. We ended Q3 with cash equivalents, and restricted cash of $87 million, $34 million of which was unrestricted. We added $118 million of cash in October. In addition, we accrued $93 million in Section 45X production tax credits through Q3, and we expect to monetize those credits in Q4. We are currently exchanging term sheets. Aligned with our Q4 production and sales ramp, we expect to generate a similar amount of 45X credits in Q4 that we expect to monetize in Q1 2026. On capital formation, we're building on the momentum of the recent equity transaction with potential G2 offtake contracts and debt investors. We also expect the recent equity raises will yield additional benefits for T1 shareholders.
Even prior to the equity transactions, our cash position built significantly as we anticipated in the third quarter.
We ended <unk> with cash cash equivalents and restricted cash of $87 million $34 million of which was unrestricted we added $118 million of cash in October.
In addition, we accrued $93 million of section 45 X production tax credits through <unk>, and we expect to monetize those credits in the fourth quarter.
We are currently exchanging term sheets.
Aligned with our <unk> production and sales ramp we expect to generate a similar amount of 45 X credits in the fourth quarter that we expect to monetize and <unk> 26.
On capital formation, we're building on the momentum with the recent equity transaction with potential G to offtake contracts and debt investors.
We also expect the recent equity raises will yield additional benefits for tier one shareholders our improvement in our capital our market capitalization and daily trading volumes should further expand <unk> eligibility for inclusion and passively managed index funds and we're receiving a noticeable increase in inbound inquiries from ACA.
Evan Calio: Our improvement in our capital, our market capitalization, and daily trading volume should further expand T1's eligibility for inclusion in passively managed index funds. We are receiving a noticeable increase in inbound inquiries from active managed institutional funds who were previously unable to invest due to our trading and liquidity constraints. Now I'll turn the call back to Daniel Barcelo for closing remarks.
<unk> managed institutional funds, who were previously unable to invest due to our trading liquidity constraints.
Now I'll turn the call back to Dan for closing remarks.
Daniel Barcelo: Thanks, Evan. Turning to slide 12, let's conclude with an overview of T1's top priorities. In the near term, our focus is on preserving T1's eligibility for Section 45X credits by completing the de-FIOCing process, as well as raising the capital required to complete the first phase of G2 Austin through a combination of debt and cash deposits tied to anticipated customer offtake contracts. While we advance our capital formation and countdown to compliance initiatives, we're also executing our plan for 2026, which we view as the bridge year to establish an end-to-end US PV solar supply chain. Our top operational priority for the next year is to source a meaningful supply of non-FIOC solar cells to feed module production at G1 prior to the expected start of operations at G2 in Q4 2026.
Thanks, Kevin.
Turning to slide 12, let's conclude with an overview of <unk> top priorities.
In the near term our focus is on preserving <unk> eligibility for section 45 X credits by completing the <unk> process as well as raising the capital required to complete the first phase of <unk> Austin through a combination of debt and cash deposits tied to anticipated customer offtake contracts.
While we advance our capital formation account down to compliance initiatives. We're also executing our plan for 2026, which we view as the bridge year to establish an end to end U S PV solar supply chain.
Our top operational priority for the next year is to source a meaningful supply of non <unk> solar cells to feed module production in Q1 prior to the expected start of operations at <unk> in Q4, 2026 concurrently as we build the G to Austin Offtake portfolio, we intend to initiate and complete the capital formation initiatives.
Daniel Barcelo: Concurrently, as we build the G2 Austin offtake portfolio, we intend to initiate and complete the capital formation initiatives required to fund and trigger the start of construction for the planned second phase at G2 sometime in 2026. In 2027 and beyond, we will be focusing on bringing T1's integrated US supply chain online and completing the second phase of G2. We plan to achieve 5 gigawatts of integrated production between G1 and G2. By virtue of our supply agreements with Hemlock, Corning, and Nextpower, we should be producing modules of domestic content that comfortably qualifies our offtake customers for ITC stacking bonuses. Our ultimate objective at T1 is to generate shareholder value by establishing a differentiated competitive position as the first fully integrated US polysilicon-based solar module producer.
Wired to fund and triggered the startup construction for the planned second phase at <unk> sometime in 2026.
In 2027, and beyond we will be focusing on bringing <unk> integrated U S supply chain online and completing the second phase of <unk>, we plan to achieve five gigawatts of integrated production between <unk> and by virtue of our supplier agreements with hemlock Corning and next power, we should be producing module is the domestic content that <unk>.
<unk> qualifies our offtake customers for ITC stacking bonuses.
Our ultimate objective at tier one has to generate shareholder value by establishing a differentiated competitive position as the first fully integrated U S. Poly silicon based solar module producer as we grow our operations and commercial enterprise, we will work to maximize returns on capital sustainably reduce unit cost of production through software and automation upgrades.
Daniel Barcelo: As we grow our operations and commercial enterprise, we will work to maximize returns on capital, sustainably reduce unit cost of production through software and automation upgrades, and optimize T1's balance sheet. This is an exciting time for T1, our investors, employees, customers, and partners. We are building something that doesn't exist in the US today, an integrated, secure, traceable polysilicon-based supply chain based on advanced solar technology. On behalf of T1's board of directors, thank you for your continued support on this journey as we position T1 to power America. With that, I'll turn it back to Jeff to coordinate Q&A.
And optimize <unk> balance sheet.
This is an exciting time for tier one our investors employees customers and partners. We're building something that doesn't exist in the U S. Today and integrated secure traceable polysilicon based supply chain based on advanced solar technology.
Behalf of <unk> Board of directors. Thank you for your continued support in this journey as we positioned <unk> to power America.
And with that I'll turn it back to Jeff to coordinate Q&A.
Jeffrey Spittel: Thanks, Dan. Shannon, I think we're ready to open the line for questions.
Thanks, Dan Shannon I think were ready to open the line for questions.
Operator: Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Philip Shen with Roth Capital Partners. Your line is now open.
Thank you as a reminder to ask a question. Please press star one one of your telephone or wait for your name to be announced to withdraw. Your question. Please press star one again, please standby, while we compile the Q&A roster.
Our first question comes from the line of Philip Shen with Roth Capital Partners. Your line is now open.
Philip Shen: Hey, guys. Thanks for taking the questions. Congrats on all the progress you're making.
Hey, guys. Thanks for taking my questions. Congrats on all the progress Youre, making.
Daniel Barcelo: Thanks, Phillip.
Philip Shen: I wanted to check in with you guys on your de-FIOCing process to see if you guys could give us more color on the progress you've made and the main next steps that you guys have to take that we can follow to monitor that progress. Thanks.
I wanted to.
Yes, I wanted to check in with you guys on your D. E auction process to see if you guys could give us more color on the.
The progress you've made.
In.
The main next steps that you guys have to take that.
We can follow that.
Monitor that progress thanks.
Daniel Barcelo: Thanks, Phil, for that. We actually have Andy Munro, who's our Chief Legal and Policy Officer, on the line. Andy, why don't you take that question?
Thanks, Bill for that we actually have Andy Monroe, who is our chief legal and policy Officer online Andy why don't you take that question.
Andy Munro: Sure. Thanks, Dan and Philip. We're well-positioned for compliance with our domestic and non-FIOC supply chain plans. We have a solid compliance plan developed with the assistance of world-class legal and compliance experts. We're making real progress on executing that plan. We're confident. We're not sharing full details on the compliance for competitive reasons at this point, but we are confident that with those factors in play, that we will be compliant.
Sure. Thanks, Dan.
We are well positioned for compliance with our domestic and not be up supply chain plans.
We have a solid compliance plan.
With the assistance of World class legal and compliance experts.
And we're making real progress on executing that plan.
So we're confident we're not sharing the details on the compliance for competitive reasons at this point, but we are confident that with those factors in play that we will be compliant.
Philip Shen: Okay. Thanks, Andy. As it relates to the Q3 contract dispute, could you give us a little bit more context there? Could that dispute extend longer? What kind of impacts could that be? How big of a contract was it? It seemed like with the impairment of $50-ish plus million, it was quite meaningful. Thanks.
Okay. Thanks, Andy and then.
Uh huh.
As it relates to the Q3 contract dispute.
Could you give us a little bit more context there.
Could that dispute extend longer what kind of impact could that be and then how big of a contract was it seemed like with the impairment.
<unk> plus million.
It was quite meaningful.
Daniel Barcelo: Yeah. Thanks, Phil. Evan, why don't you take that. As it relates to the size of the contract, we are limited to certain confidentiality on the contract. As you can appreciate, if we are in negotiations or as we are in negotiations there, we have to be sensitive to the confidentiality required in the contract. Evan, would you like to add other parts?
Yes, Thanks, Phil Evan why don't you take that and as it relates to the size of the contract where we are limited some confidentiality on the contract.
And as you can appreciate if we are in negotiations, whereas we are in negotiations there we'd have to be sensitive to the confidentiality are required in the contract Evan would you like to add to the park.
Evan Calio: Yeah, I mean, I would say that we had already calculated that in our guidance, so there isn't necessarily a guidance change as it relates to this contract, and we are continuing to execute other contracts. In terms of the financial effect, it's been in our guidance for 2 quarters now. There was goodwill because it relates to a contract that was executed when we made the acquisition. That's why there's a recording of goodwill, which we made a conservative interpretation to write off that goodwill. As Dan mentioned, we, you know, remain in discussions with the contract party. We continue to assess all options, and we'll choose a path that optimizes the value to shareholders. I hope that's helpful.
Yes.
I would say that we have.
Had already calculated that in our guidance. So there isn't necessarily a guidance change as it relates to this contract and we are.
Continuing to execute other contracts so in terms of the financial effect, it's been in our guidance for.
For two.
For two quarters now.
<unk>.
There was goodwill because it relates to.
Contract that was executed when we made the acquisition Thats why Theres, a recording a goodwill, which we made a conservative.
Interpretation to write off that goodwill.
But as Dan mentioned, we.
Remain in discussions with the.
Contract Party, we continue to assess all options and we'll choose to pass that on.
Optimizes the value to shareholders.
Philip Shen: Got it. Okay. Thank you. One more here. Well, you guys have made some interesting investments and, like, partnerships with Nextpower and Talon here. I was wondering if you might be able to describe more the integration of all these companies and relationships. Specifically Nextpower, you know, what's the volume timing? When could initial modules with US frames come off your line? As with Talon, would you expect to source cells from them to support your G1 facility? Finally, if there's an update with Corning and Hemlock, that'd be great as well. Thanks.
That's helpful got it.
Okay. Thank you and then one more.
Here you guys have made some.
Interesting.
Useful interesting acquisition.
Investments and partnerships with <unk>.
Next power.
In town here.
So I was wondering if you might be able to describe more the integration of all of these.
Companies and relationships. So specifically next track our next power.
What's the volume timing.
When could initial.
Modules with U S frames come off your line.
And then as it relates to talent would you expect to source cells from them to support your.
<unk> G. One facility and then finally, if theres, an update with Corning and hemlock.
It would be great as well thanks.
Daniel Barcelo: Thanks, Phil. We are very committed to both an integrated, a vertically integrated supply chain and solar industry. A lot of these projects are related to that. The second part of this is that domestic content. Frames are an increasingly large part, and as we go into the future, there'll be a higher requirement for domestic content. A lot of the strategy around Nextpower was meeting that domestic content. As you know, beyond cells, we're basically looking at glass, at frames, at glues, at J-boxes, et cetera. This to us was a very strategic step to partner with a great company like Nextpower. I think also the Nextpower aspect was about scaling.
Thanks Bill.
We are very committed to both integrated vertically integrated supply chain and so this industry. So a lot of these projects are related to that the second part of this is it.
Domestic content frames are an increasingly large part and as we go into the future there'll be a higher requirement for domestic content a lot of the strategy around next power was meeting that domestic content.
As you know.
<unk> sales were basically looking at glass and framing that glues that Jay boxes et cetera. So this to US was a very strategic step to partner with a great company like next power I think also the next power.
Daniel Barcelo: NextPower is a very confident partner in their products and how they scale, and we felt that having a partnership with NextPower for these steel frames allows for the expression of that scaling from NextPower that we could benefit through having a better customer experience from our modules. That was another dimension of this beyond just the quality of that. In terms of volumes and timings of that, we'd expect to use that increasingly over into, if not 2026, into 2027. We haven't disclosed the volumes there. Those are confidential under the contract. We'd defer to. We'll make future disclosures onto the volumes we're doing for NextPower.
Aspect was about scaling.
Next power is a very constant partner in their products and how they scale.
And we felt that having a partnership with <unk> with the next tower for the steel frame or.
Allows for the expression of that scaling from next power that we could benefit from having a better customer experience from our modules. So that was another dimension of this beyond just the quality of that in terms of volumes and timing for that we'd expect to use that increasingly over into if not 26% to 2007, but we haven't disclosed the volumes there those are confidential under the <unk>.
Track.
So we preferred to.
It will make future disclosures on the volumes we are doing for the next power.
Daniel Barcelo: As it relates to Talon was an opportunity to invest a small quantum, not disclosed, in a minority position, where it would allow us to begin to talk to and look at and work with Talon in more detail. Talon is looking to build TOPCon cells. Yes, there is a way for us to procure those cells in the future. To the degree, you know, we have mixtures of different options in terms of cell supply. We could sell the cells to third parties also. Many different options. We're trying to reinforce and build around us a domestic chain that we really believe in. Last part on Hemlock and Corning, that as we've disclosed, we have optionality to convert our polysilicon to wafers.
As it relates to Cowen town was an opportunity to invest a small quantum dot disclosed in a minority position, where it would allow us to begin to talk to and look at and work with the talent and more detailed talent is looking to build top com.
And yes, there is a way for us to procure those cells in the future and to the degree we have mixtures of different options in terms of cell supply we could sell the sales to third parties also many different options, but we are trying to reinforce and build around us the domestic China that we really believe in.
Last part on tablets and Corning that as we've disclosed we have optionality to convert our polysilicon to wafers.
Daniel Barcelo: We're excited about those wafers to come from Michigan right into our G2 facility. I would comment too that our G2 Austin facility is discreet from Talon. These are two different projects. We're excited about our project, and we're excited about our minority investment in Talon.
We're excited about those wafers to come from Michigan right into our <unk> facility I would comment too that our G to Austin facility is discreet from talent. These are two different projects. We're excited about our project and were excited about our minority investment in talent.
Philip Shen: Great, Dan. Looking forward to seeing the full results of your integrated supply chain.
Great looking forward to seeing the full results of your integrated supply chain.
Daniel Barcelo: Thanks very much.
Philip Shen: One more, if I may. This is from an investor. He's asking: How is T1 claiming or planning to claim the 45X credits in terms of stacking when they produce cells in one site and modules at another site, when the OBBBA says they have to be at the same facility? Thanks.
Thanks, one more if I may add.
This is from an investor is asking how is T. One, claiming we're planning to claim the 45 X credits in terms of stacking when they produce sales in one site and modules at another site.
When the <unk> BBA says they have to be at the same facility.
Daniel Barcelo: Andy Munro, do you wanna take that, please?
Andy do you want to take that please.
Okay.
Yes.
Andy Munro: Sure. Without getting to all the details, there are provisions in the act that allow for the election of unrelated party transactions, and those provisions have not been changed. That was in the original act and were not changed by the OBBBA.
Sure.
Without getting into all the details there are provisions.
In the act.
Allow for the election.
Unrelated party transaction and those provisions have not been changed.
That was the original act, we're not changed by the Ob.
Philip Shen: Okay, great. Thanks, guys. I'll pass it on.
Right.
Okay, great. Thanks, guys I'll pass it on thanks. Thank you.
Andy Munro: Thanks, Phil.
Daniel Barcelo: Thank you.
Operator: Our next question comes from the line of Gregory Lewis with BTIG. Your line is now open.
Our next question comes from the line of Greg Lewis with <unk>. Your line is now open.
Gregory Lewis: Yeah. Hi, thank you, and good morning, and thanks for taking my question. Guys, I was hoping to get an update on kind of how we should be thinking about the event path for G2. You know, any kind of hurdle rates we should be thinking about in the next 2 quarters. You know, just as we think about getting that facility up and running by the end of 2026 to really set the table for 2027 production.
Yes, hi, Thank you and good morning, and thanks for taking my question.
Guys I was hoping to get an update on kind of how we should be thinking about.
The event path for GTO.
Any kind of hurdle rates, we should be thinking about in the next couple of quarters.
Just as we think about getting that facility up and running in 2000.
And 26.
We set the table for 2007 production.
Daniel Barcelo: Thanks, Gregory Lewis. I'll have Otto Bergesen layer in here too. You know, we've been working very hard for the last year to design the right paths here. We have over 30% design done. We have work packages out that are live. As you know, we did raise capital earlier this last month, this month to unlock some capital in order to begin the first stages of the construction. We are still on track to go and start production, I'm sorry, start construction in Q4 of this year. The paths really go to the site, the equipment, the machines, the early earthworks, concrete and steels packages. Those are the biggest timelines in terms of risks to the timeline.
Thanks, Craig.
I'll have auto a layer in here too.
We've been working very hard for the last year to design the right paths here, we have over 30% design done we have work packages out of their lives.
As you know we did raise capital earlier. This last month. This month two to unlock some capital in order to begin the first stages of construction.
Still on track to go and start production start construction.
The fourth quarter of this year.
<unk> really go to the site equipment machines. The early earthworks are concrete and steel packages. The biggest timelines in terms of risks to the timeline as Adam mentioned in his remarks, the steel packages, particularly important and some of the switchgear was particularly important beyond that if we.
Daniel Barcelo: As Otto mentioned in his remarks, the steel package was particularly important and some of the switchgear was particularly important. Beyond that, if we look at the equipment, the equipment is not on a critical path, but we wanted to advance those work packages and get those equipment orders as fast as possible also. Otto, do you wanna talk about the cadence and how we're tracking toward the Q4 2026?
Look at the equipment the equipment is not on the critical path, but we wanted to advance those work packages and get those equipment orders as fast as possible also auto do you want to talk about the cadence and how we're how we're tracking toward the fourth quarter 2006.
Otto Bergesen: Sure, Dan. As you mentioned, really it's all about getting started now, getting started with earthworks, preparing to erect steel in March, and also securing the long lead items. Electrical equipment we've talked about. As well, there's air units, there's other utility systems like water and utility plants that needs to come in place. It's all about getting started and execute those contracts that we have lined up and are negotiating now as soon as possible. We're tracking towards our timeline.
Sure so.
Yes.
Mentioned really it's all about getting started now getting started with Earth works preparing direct steel in March.
And also securing the long lead items, so electrical equipment and we've talked about as well. There's there's air units. There is other utility systems like water and utility plants that needs to come in place. So it's all about getting started and execute those contracts that we have lined up.
And are negotiating now as soon as possible. So we're tracking towards our timeline.
Gregory Lewis: Okay, great. Then just I wanted to go back to slide 6, where you kind of outlined the, you know, clearly what's going on in power's, you know, power school again, right? So as we think about that and kind of the acceleration and the potential for solar, you know, if you go back and look, like, no one. I feel like no one's really, you know, you don't hear data centers talking about solar. I mean, last year we installed 50 gigs in the US. I think it was a few gigs of natural gas. Just so as we look at, you know, meeting this increasing demand for power gen in the US, are we getting the sense that, you know, we hear a lot about behind the meter.
Okay, Great and then just.
Wanted to go back to <unk>.
Slide six where you kind of outlined.
Clearly, what's going on in powers panelists call again.
And so as we think about that.
Kind of the acceleration and the potential for solar if you go back and look like.
I feel like no one's really.
You don't hear data centers talking about solar I mean last year, we installed 50 gigs in the U S. I think it was a few gigs of natural.
Natural gas and just so as we look at <unk>.
Meeting the increasing demand for power Gen in the U S.
Are we getting the sense that we hear a lot about behind the meter or hyperscale or pursuing this or other entities or do you think really the bulk of this solar growth that we're going to see in the U S. Over the next five to 10 years is that largely just going to still be with utilities.
Gregory Lewis: Are hyperscalers pursuing this or other entities, or do you think, you know, really the bulk of this solar growth that we're gonna see in the US over the next 5 to 10 years, is that largely just gonna still be with the utilities?
Daniel Barcelo: Yeah. I, we're seeing tremendous interest from developers and as a pass-through, basically, with data centers, AI companies. The utility scale levels and the quantum of power that's needed, it's really only the things that solar, which we do, and storage together are only things that's gonna deliver that until, basically, 2029, 2030 when natural gas gen hits or nuclear starts coming back. We fully believe in a combined industry that is supportive of multiple uses of energy and in all of the above strategy, but solar is the only thing that's scalable right now. When you look at China has over a terawatt of manufacturing capacity across ingots, wafers, cells, and modules. A terawatt of manufacturing capacity.
Yes.
We're seeing tremendous interest from developers.
Developers and it's a pass through basically data centers AI company.
The utility scale levels and the quantum of powered it's needed.
It's really only the things that solar which we do and storage together are only thing that's going to deliver that until until basically $2029 30, when natural gas junkets or nuclear starts coming back we fully believe in a combined industry that is supportive of multiple uses of energy in all of the above strategy, but solar is the only thing scalable right now.
When we when the U S looks when you look at China churn has over terawatt of manufacturing capacity.
Ross and gets wafer cells and modules are terawatt of manufacturing capacity first half of the year. China's put in 256 Gigawatts. So there is tremendous human intelligence and tremendous scope to really deploy it and we do think that the United States has those elements of capital at those elements of technology.
Daniel Barcelo: H1, China put in 256 GW. There is tremendous human intelligence and tremendous scope to really deploy it. We do think that the United States has those elements of capital, has those elements of technology to start building that, and we'd like to see more of that developed in the US. But solar is the answer right now. I do think we've reached a tipping point in terms of the costs, in terms of particularly the storage costs and the adjacency to solar, and I think those two things are delivering. I do think that building these projects and designing them with either natural gas in mind or their longer term grid access in mind is an important dimension.
<unk> to start building that and we'd like to see more effect developed in the U S.
But solar is the answer right now I do think we've reached a tipping point in terms of the cost in terms of particularly the storage costs and the adjacency to solar and I think those two things are delivering I do think that building these projects and designing them with either natural gas in mind are there longer term grid access and minus an important dimension and last part I'd say I think.
Daniel Barcelo: The last part I'd say is, I think a lot of these other places are really gonna be about distributed energy resources, energy islands. The amount of power that AI needs and the ramp that AI wants, it's just too hard to do that at current grid and current connections. We're very confident on the future of how solar is gonna contribute into that energy.
A lot of these other places are really going to be about distributed energy resources and as the islands.
The amount of power that AI needs and the ramp that AI. Once it's just too hard to do that at current rate and current connections. So we're very confident on the future of how solar is going to contribute into that energy.
Gregory Lewis: All right. Super helpful. Thanks for the time.
Alright Super helpful. Thanks for the time.
Andy Munro: Thanks, Greg.
Daniel Barcelo: Thank you.
Thanks, Greg Thank you.
Operator: Our next question comes from the line of Sean Milligan with Needham & Company. Your line is now open.
Our next question comes from the line of Sean Milligan with Needham <unk> Company. Your line is now open.
Sean Milligan: Good morning, Dan. Good morning, Evan. Just quick question. It looks like, you know, you mentioned that you've ramped up G1 now to over 5 gigawatts. I'm curious about how you see that sustaining into 2026, and then what you're seeing for demand in 2026 there. Then just looking forward, you know, what you're seeing for demand in 2027 as G2 comes online. You know, kind of the third part of that question is another publicly traded company made some comments about pricing on their call. Is there any kind of like pricing guardrails you can give us for, you know, kind of non-FIOC cells in 2026, what you're looking at, and then also 2027 with G2 online?
Hey, good morning, Dan Good morning, Evan.
Just quick question it looks like.
You mentioned that you've ramped up G. One now to over five Gigawatts I am curious about how you see that sustaining into 2026, and then what youre seeing for demand in 2026, there and then just looking forward.
What youre seeing for demand in 2027 as <unk> comes online.
Kind of a third part of that question is another publicly traded company made some comments about pricing on their call. So is there any kind of like pricing guardrails, you can give us for.
Kind of <unk> 26, what Youre looking at and then also 2027 with GTA online.
Daniel Barcelo: Yeah. Yeah, thanks for that. The what we've seen in this year is that we've had a very, let's say, erratic market in solar with, you know, is the OBBBA going to kill the IRA? It did not. You have demand looking at this 232 coming. What is the thesis going to be? The industry has been dealing with inventory, a lot of sales uncertainty. This uncertainty has made for a very choppy 2026. I think that ties to a lot of how we have a back-end loaded volume into 2025. That really explains the landscape of what we've had today. As we look into 2026, which is a bridge year for us, we will not produce domestic cells.
Yes, yes, thanks for that.
What we've seen in this year is that we've had a very let's say erratic market in solar with.
<unk> going to kill the IRA did not you have demand looking at this 232 coming what its teeth, it's going to be so the industry has been dealing with the inventory a lot of sales.
And certainty. This uncertainty has made for a very choppy 2026, I think that ties to a lot of how we have a backend loaded volume into 2020 and in 2025. So that really explains the landscape of what we've had to date as we look into 2026, which is a bridge year for us.
We will not expect to produce and we will not produce domestic sales those expected to start coming on into the fourth quarter of 2026, so as those come out in the fourth 2026 that'll be towards.
Daniel Barcelo: Those are expected to start coming on into Q4 2026. As those come out in Q4 2026, that will only be part of it. For 2026, we have to source non-FIOC cells. We feel confident that we have the ability to source quantums, but we are not yet coming out with our guidance there in terms of what we'd like to express. On pricing, it's complicated also because the pricing of those non-FIOC cells is also a question. We'll be looking to come out with guidance for 2026 and give that pricing update and those volumes updates for 2026.
That will only be part of it but for 2006, we have to source non fee Upsells, we feel confident that we have the ability to source quantum's, but we are not yet coming out with our guidance there in terms of what you'd like to.
Spreads on pricing.
Complicated also because the pricing of those non <unk> cells is also question. So we'll be looking to come out with guidance for 2026 and give that pricing update and those volumes are fixed for 26. When I look at 27% is what we're very very focused on which is the domestic so that's where we are in active discussions.
Daniel Barcelo: When I look at 2027, which is what we're very focused on, which is the domestic cell, that's where we're in active discussions with large utilities, utility scale type investors. We do see demand. We do see strong interest there. There's strong interest in a domestic cell and domestic module, that's where our focus is. As we get those offtake discussions or contracts done, we will of course be disclosing those in full. The focus really is about how to start delivering in 2027.
With large utility Skype utility scale type investors.
And we do see demand, we do see strong interest there there is strong interest in the domestics on domestic module and Thats, what our focus is as we get those offtake discussions or contracts done we will of course be disclosing those in full but the focus really is about how to start delivering in 2007.
Sean Milligan: Thank you.
Daniel Barcelo: Evan Calio, would you like to add anything color to the pricing or to the volumes?
And anything color, yes pricing or to the volumes.
Evan Calio: No, no, like I think you covered it, Dan. I mean, look, demand is high, right, for 2026. It's going to break it up, right? You know, we're seeing early prices that are higher than current pricing, right? Several cents a watt higher than where we are currently in Q4. It's going to be cell availability that drives production levels more so than demand. You know, as Dan mentioned, we've begun, we have attractively priced non-FIOC cells in our inventory today. We are working aggressively to procure those for 2026, which is our bridge year. I think that's what's going to drive your value and we'll provide production range here shortly.
Like I think you covered it Dan I mean look demand is high right for 26% is going to break it up right and we're seeing early prices that are higher than current pricing right. So several cents a lot higher than where we are currently in the fourth quarter.
It's going to be cell availability to drives production levels more so than.
More so than demand.
As Dan mentioned we've.
We have begun we have.
Practically priced non VR sells in our <unk>.
Inventory today.
And we are working aggressively to to procure those for 2026, which is our bridge year.
But I think that's what's going to drive their value and.
We will provide.
Production range.
Here shortly.
Evan Calio: You know, for 2027, you know, that's where it, you know, at least for, you know, phase 1, right, phase 1 of G2, you are in a lot of conversations with parties that have a demand that far exceeds our 2.1 GW production, right? And those discussions are for multi-year offtake contracts that are very attractive, okay? You know, we expect to, over time, certainly by the time we're producing the facility, to have most, if not all of that volume contracted at 2.1 GW. It becomes a question of, you know, how quickly can we convert excess demand for G1 into Sorry, for G2 phase 1 into an underpinning for G2 phase 2, right?
For 2027.
We're at.
At least for phase one phase one of <unk>.
You are in a lot of conversations with parties that have demand that's far exceeds our two one gigawatt production right. So.
And those discussions are for multi year offtake contracts.
That are very attractive and so we expect to over time.
Certainly by the time, we're producing that facility.
Most if not all of that volume contracted the two one gigawatt and then it becomes a question of.
How quickly can we convert excess demand for G. One into.
Sorry for G. Two phase one into an underpinning for G. Two phase two right, which again, we think it's going to be driven by offtake demand, but we clearly see the potential for that formerly in some reasonable or short time period.
Evan Calio: Again, we think it's gonna be driven by offtake demand, but we clearly see the potential for that following in some reasonable or short time period from financing on G2 phase 1, right? The goal would be ultimately to put as many of the high margin in-demand cells into G1 as possible, as quickly as possible. I don't know if that's that, it gets to that question around that, yeah.
<unk> from.
<unk> financing on.
GE two phase one right the goal would be ultimately to <unk>.
As many of the high margin and demand cells in the G. One as possible as quickly as possible.
I don't know if thats.
Sean Milligan: Yeah, no, that's great. That's great. The other question was on the COGS side. This year, I know you've been doing a lot with your supply chain, next year you bring on non-FIOC cells. I'm just curious how you see, you know, COGS moving around this year and if that starts to normalize some next year, as you know, kind of get up to scale more.
That's great that's great.
And then the other question was on the Cogs side. So this year, you've been doing a obligation supply chain.
And then next year and you bring on non <unk> I'm just curious how you see Cogs moving around this year and if that starts to normalize some next year.
As you kind of get up to scale more.
Evan Calio: You know, look, that's a good observation. I think you'll see it in the Q4, right? Obviously, when you're at scale at a level that's averaging 4.5 gigawatt run rate in the Q4, your conversion costs come down significantly throughout the course of the year. We see a forward path to a facility in its 2nd year of operation to continue to make gains on those costs that we control. As it relates to procurement and pricing, again, we are seeing, your sell is most of your cost. Throughout the BOM, we continue to work to optimize that, and we expect to make improvements.
You are not.
That's a good observation I think youll see it in the fourth quarter right. Obviously when you are.
At scale at a level thats, averaging four five gigawatt run rate in the fourth quarter your conversion cost come down significantly throughout the course of the year and we see a forward path too.
A facility in its second year of operation to continue to make gains on those costs that we control.
As it relates to procurement and pricing.
Again, we are seeing.
Yourself.
As most of your costs, but throughout the week.
Continue to work to optimize that and we expect to make improvements again, we were ramping that facility into a period that had unusual tariff volatility. So it was like you were less able to kind of optimize timing of cost and you were in a period, where rising tariffs you were hit.
Evan Calio: Again, we were ramping a facility into a period that had unusual tariff volatility, so it was like you were less able to kind of optimize timing of costs, and you were in a period where rising tariffs, you were hit by some of those tariffs. We think a lot of those risks will be mitigated. You know, even in an environment where Section 232 impacts the market, given we have a differentiated and advantaged supply chain. We'll provide further quantification of like some of those improvements when we, you know, in near term put out our 2023 guidance, which we're, again, making traction on locking things in.
Some of those tariffs, we think all of those risks will be mitigated.
Even in a environment, where $2 32 impacts the market given we have a differentiated.
Vantage supply chain.
No.
We will provide further quantification of like some of those improvements when we.
In near term put out our 2023 guidance, which we're making traction on locking things in.
Daniel Barcelo: Yeah, I would just add, Sean Milligan, that he touched on the polysilicon side. You know, as you know, the cell is the bulk of the cost, and we work diligently to ensure very competitive cells. Our company, all of our polysilicon is from Hemlock Semiconductor. We take the polysilicon from Hemlock Semiconductor that's turned into wafers in Vietnam. We have control of the polysilicon side. The reason I mention this is with the anticipation of what may come out of Section 232, we feel that we're very protected on that cost element. Again, you know, we get the benefit of basically having a locked-in pricing on our polysilicon.
Yes.
That he touched on the polysilicon side.
As you know the cell is the bulk of the cost and we work diligently to ensure very competitive cells.
Our company all of our polysilicon is from hemlock.
We take the polysilicon program lock, that's turning to wafers in Vietnam, We have control of the polysilicon side and the reason I mentioned this is with the anticipation of what may come out of $2 32.
We feel that we're very protected on back cost element.
Again.
We get the benefit of basically having a locked in pricing on our poly silicon so to the degree $2 32 does come out and does add cost to other non non American polysilicon, our Chinese poly Silicon, we think that we're in a very advantaged state and that feeds through into the cell cost.
Daniel Barcelo: To the degree Section 232 does come out and does add cost to other non-American polysilicon or Chinese polysilicon, we think that we're in a very advantaged state as that feeds through into the cell costs.
Sean Milligan: Great. That's great, Dan. Thank you for that clarification. Then on Section 45X tax credits, I know this year you've built up a good amount on the balance sheet, and you said you're looking to monetize those. Currently, it's kind of like swapping term sheets. As we look forward, should we think about credit monetization being a more regular step in the process for you all, or is it gonna be kind of larger transactions single time, like once a year, or are we thinking multiyear type transactions there to help with liquidity?
Great.
Dan. Thank you for that clarification, and then an infection.
45 ex tax credits this year, you've built up a good amount on the balance sheet and you said you're looking to monetize those.
It sounds like swapping term sheets as we look forward should we think about credit monetization being a more regular.
Step in the process for you all or is it going to be kind of larger transactions single time like once a year or are we thinking multiyear type transactions there to help with liquidity.
Daniel Barcelo: I think you're spot on the cadence and the timing. I'll let Evan cover some of the details. We, you know, we started fully commissioning, full certificate of occupancy in H1. We did get audit of our H1 volumes in terms of what was produced, and then we've been out in the market doing that right into the face of OBBBA. There's a lot of uncertainty around the world about those aspects. I do expect on a go-forward basis, there'll be a much more normal cadence on how we'll monetize 45X.
I think you're spot on on the from a cadence standpoint, I'll, let him cover some of the details.
We can start with full commissioning full certificate of occupancy in the first half.
Did that all of our first half volumes in terms of what was produced and then we've been out in the market doing that right in the face of OTT. So there's a lot of uncertainty around the world about those aspects I do expect on a go forward basis, there will be a much more normal cadence on how we monetize 45 X and then on the other side of 45 X direct pay versus selling.
Daniel Barcelo: On the other side of 45X, direct pay versus selling through banks to third parties, that also is an element that we wanted to make sure we optimize in terms of the prices and the costs that we are trying to get there. Evan, do you wanna talk about the timing of when we'd expect to see 45X now?
Thanks to third parties.
It also has an element that we wanted to make sure we optimize in terms of the prices in the past that we are trying to get their <unk> talk about the timing of when we would expect to see 40 Fedex.
Evan Calio: Yeah, look, I mean, I think I said it in my comments, you know, we expect to execute third-party sales in this quarter for all or almost all of the 45X that we generated in 2025. I think on a go-forward basis, yes, we're looking to enter into a, you know, quarterly cash settle within some number of days after the quarter with one or several parties, you know, for our volumes. I think, you know, 2026 is, it's a year that has, you know, newer requirements that are different from the past. It, it might be a slower to develop year. I think they will be more midpoint of the year and on.
Yes look I mean, I think I said in my comments, we expect to execute third party sales in this quarter for all or almost all of the 45 X that we generated in 2025.
On a go forward basis, yes, we're looking to enter into a <unk>.
Quarterly cash settle within some number of days after the quarter with.
One or several parties.
For our volumes I think.
26 as.
It's a year that has newer.
<unk>.
That are different from the past so it might be a slower to develop years. So I think there will be more mid point of the year.
Evan Calio: You know, kind of going forward, I think it'd be more traditional of again, you know, quarterly cash settle on a third-party sale, right, versus, you know, direct pay.
But kind of going forward I think it would be more traditional av.
Again quarterly cash settle on a on a third party sale versus direct.
Sean Milligan: All right. Thank you. Congratulations on the continued move forward.
Alright. Thank you congratulations on the continued move forward. Thanks.
Evan Calio: Thanks, Sean.
Daniel Barcelo: Thank you.
Evan Calio: Thank you.
Thanks, John Thank you.
Operator: Thank you. This concludes the question and answer session. I would now like to turn the call back over to Jeffrey Spittel for closing remarks.
Thank you. Thank you. This concludes the question and answer session I would now like to turn the call back over to Jeffrey Patel for closing remarks.
Jeffrey Spittel: Thank you, Shannon. Thanks everybody for the interest. We will be back on the road at conferences in New York next week. Please feel free to reach out with additional questions, and thanks for the interest and participation today. This will conclude the call.
Thank you Shannon and thanks, everybody for the interest we will be back on the road.
Conferences in New York next week, please feel free to reach out with additional questions and thanks for the interest and participation today. This will conclude the call.
Operator: This concludes today's conference. Thank you for your participation. You may now disconnect.
This concludes today's conference. Thank you for your participation you may now disconnect.
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