• Fourth Quarter Revenue: $275 million.
• Full Year 2024 Revenue: $916 million.
• Fourth Quarter Adjusted Gross Margin: 29.8%, an improvement of 410 basis points year over year.
• Full Year 2024 Adjusted Gross Margin: 34.1%, an improvement of 680 basis points compared to 2023.
• Fourth Quarter Adjusted EBITDA: $45.2 million.
• Full Year 2024 Adjusted EBITDA: $173.6 million.
• Full Year Free Cash Flow: $135 million.
• Cash Balance at Year-End: $364 million.
• Order Book at Year-End: $2 billion, up 10% compared to 2023.
• Fourth Quarter Net Loss: $141.2 million.
• Fourth Quarter Adjusted Net Income: $25.1 million.
• Full Year 2024 Net Loss: $296.1 million.
• Full Year 2024 Adjusted Net Income: $91.2 million.
• 2025 Revenue Guidance: $1.05 to $1.15 billion.
• 2025 Adjusted EBITDA Guidance: $180 to $200 million.
• 2025 Free Cash Flow Guidance: $115 to $130 million.

• Warning! GuruFocus has detected 3 Warning Signs with ARRY.

Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Array Technologies Inc (NASDAQ:ARRY) reported strong financial results for the fourth quarter and full year 2024, with revenue exceeding the midpoint of their guidance range.
• The company achieved a significant improvement in adjusted gross margin, reaching 29.8% in Q4 and 34.1% for the full year, reflecting a year-over-year increase.
• Array Technologies Inc (NASDAQ:ARRY) ended 2024 with a robust order book of $2 billion, marking a 10% increase compared to the previous year.
• The company made strategic investments in innovation, including a new manufacturing facility in Albuquerque and a significant investment in Swap Robotics, enhancing their product and service offerings.
• Array Technologies Inc (NASDAQ:ARRY) demonstrated strong cash flow generation, ending the year with $364 million in cash, an increase of $115 million from the previous year.

Negative Points

• Array Technologies Inc (NASDAQ:ARRY) experienced a 42% decline in revenue for the full year 2024 compared to 2023, attributed to decreased volume and ASPs.
• The company reported a net loss attributable to common shareholders of $296.1 million for 2024, compared to a net income of $85.5 million in the prior year.
• Array Technologies Inc (NASDAQ:ARRY) faced challenges in Brazil due to the devaluation of the Brazilian real, volatile interest rates, and newly introduced tariffs, impacting market growth.
• The company incurred a $236 million non-cash goodwill impairment charge and a $91.9 million non-cash long-lived intangible asset write-down related to the 2022 STI acquisition.
• Array Technologies Inc (NASDAQ:ARRY) noted ongoing industry headwinds, including project timeline pushouts and pricing pressures from commodity price declines.

Q & A Highlights

Q: Can you explain why the EBITDA margin is lower in Q1 compared to the rest of the year? A: Keith Jennings, CFO: The lower EBITDA margin in Q1 is due to the continuation of a large shipment from Q4 2024 and the roll-off of some 45X amortization that won't be seen in the quarter. These factors primarily contribute to the lower margin forecast for Q1.

Q: Are there any safe harbor orders in your current order book? A: Kevin Hostetler, CEO: Less than 10% of our order book consists of safe harbor orders, which are mostly legacy programs. We are in discussions with customers evaluating new safe harbor opportunities, but nothing new is currently in the order book.

Q: Why does the order backlog lag behind the pipeline growth, and what initiatives are being taken to grow the backlog? A: Kevin Hostetler, CEO: While our win rate for new orders is strong, the backlog is affected by de-bookings in Brazil due to undefined start dates. We maintain a policy of removing orders without defined start dates from the backlog. However, these orders are not canceled and are expected to return once new dates are set.

Q: What pricing dynamics are you seeing for 2025, especially concerning ASP declines? A: Kevin Hostetler, CEO: ASP declines are primarily due to commodity price reductions, particularly steel, which has decreased by over 30% in the past two years. The market remains disciplined, and we are not seeing significant price wars. The recent increase in steel prices could positively impact ASPs.

Q: How does the 45X credit sharing affect your margins, and do you expect any changes in 2025? A: Keith Jennings, CFO: We have no explicit arrangements to share 45X credits with customers. Our guidance reflects a gross profit margin of 29-30%, and we are comfortable with current pricing and the potential for margin expansion due to rising steel prices. Any sharing of 45X benefits is not explicitly planned.

Q: Has the competitive environment changed following Soltech's exit in Europe? A: Kevin Hostetler, CEO: In Brazil, we've gained projects due to Soltech's exit. However, in Spain, legal restrictions prevent us from immediately taking over Soltech's projects. We are seeing some market share gains but are limited by legal constraints in Spain.

Q: Are there any plans to sell 45X credits for immediate cash flow? A: Kevin Hostetler, CEO: Currently, most 45X credits are filed by our vendors, and we have varying agreements with them. We may consider selling excess credits in the future, but for now, we are still a cash taxpayer and have no immediate plans to sell credits.

Q: What are the key areas of focus for R&D to improve the existing product portfolio? A: Neil Manning, COO: Our R&D efforts focus on enhancing deployment efficiency and reducing costs for customers. This includes innovations like Skylink for wireless capability and automated panel installation to optimize field operations and lower overall deployment costs.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.