Array Technologies, Inc. Q3 FY2025 earnings call

Key Highlights - Revenue was $393 million, 70% YOY growth, with 56% volume increase. APA acquisition contributed $17 million. Year-to-date revenue over $1 billion, surpassing 2024's total. - Adjusted gross margin improved QoQ, adjusted EBITDA $72 million, second highest on record. - Commercial momentum continued with sequential order book growth and book-to-bill ratio >1. New products account for nearly 40% of order book. - APA integration is in early stages, with strong commercial progress and pipeline growth. Focus on maintaining operations and realizing synergies. - Supply chain strategy focuses on resiliency and adaptability, sourcing from over 50 domestic and 100 international suppliers. Navigating tariff landscape, reducing tariff exposure to less than 14% by year-end. - Third quarter adjusted gross profit $111 million, adjusted gross margin 28.1%. Adjusted EBITDA $72 million, adjusted EBITDA margin 18.3%.

Revenue reached $393 million, marking a 70% year-over-year revenue growth, driven by a 56% increase in volume. The APA acquisition contributed approximately $17 million in revenues. Year-to-date revenue has exceeded $1 billion, surpassing 2024's total annual revenue, with volume up 74% year-over-year. Order book is $1.9 billion, over 95% domestic business. New products OmniTrack, Skylink and Hail XP account for nearly 40% of the order book. ATI business saw adjusted gross margin improvement quarter-over-quarter.

Full Year 2025 Guidance - Revenue expected in range of $1.25 billion to $1.28 billion, midpoint increased by over $60 million. - Adjusted gross margin in range of 27% to 28%. - Adjusted G&A expected to range between $160 million to $165 million. - Adjusted EBITDA expected to range between $185 million and $195 million. - Adjusted diluted earnings per share forecasted in range of $0.64 to $0.70. - Free cash flow expected at approximately $100 million. - Capital expenditures expected to be approximately $20 million.

Risks - Market demand and supply uncertainties. - Uncertain regulatory environment. - Fluctuating tariff landscape and its impact on costs.

Q: Mark Strouse asked about 2026 business flow and normalized demand.

A: Kevin Hostetler said orders are more normalized as Tier 1 customers have safe harbored through '29 and '30, not expecting artificial pull in/push forward.

Q: Joseph Osha asked about APA revenue and order book.

A: Keith Jennings said adjusting for APA, non-APA revenue added to guide, and expectations of order book increase in Q4.

Q: Julien Dumoulin-Smith asked about business expansion and integrated foundation solution.

A: Kevin Hostetler talked about co-development of integrated tracker and foundation solutions, near completion, with test sites and sales resources added.

Q: Jonathan Windham asked about international business and domestic manufacturing for export.

A: Neil Manning said pleased with international business progress, analyzing per project for optimal supply chain, and domestic production for international projects on a project-specific basis.

Q: Ben Kallo asked about flight to quality and multi-gigawatt deal.

A: Kevin Hostetler said flight to quality driven by value proposition, and the multi-gigawatt deal was based on best value despite higher price.

Q: Philip Shen asked about international business upside and APA revenue mix.

A: Neil Manning said awarded business in South America to convert in future periods, and Keith Jennings said APA 2025 has slight growth, with strong outlook for APA with Array, and no disclosure on APA revenue mix by tracker.

Q: Thomas Patrick Curran asked about BP contracts.

A: Kevin Hostetler said no specific backlog/business numbers with BP.

Q: Dimple Gosai asked about cost pass-through.

A: Keith Jennings and Neil Manning talked about steel pricing flowing through to ASPs, tariffs with pass-through agreements, and rational pricing behaviors.

Q: Colin Rusch asked about labor efficiency and updated designs.

A: Neil Manning said innovations like SkyLink and DuraTrack drive installation efficiencies, with focus on ease of installation and asset protection in future innovations.