To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh. ...

FTC Solar (NasdaqCM:FTCI) Q3 2025 Earnings Call November 12, 2025 08:30 AM ET Speaker4Hello, and thank you for standing by. Welcome to FTC Solar's 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. To ask a question during the session, you will need to press Star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question ...

Financial Performance - Total revenue for the three months ended September 30, 2025, was $26,030,000, representing a 156.8% increase from $10,136,000 in the same period of 2024[198]. - Product revenue increased by 170.7% to $20,061,000, while service revenue rose by 119.0% to $5,969,000 compared to the prior year[198]. - The gross profit for the three months ended September 30, 2025, was $1,594,000, a significant improvement from a gross loss of $4,306,000 in the same period of 2024, resulting in a gross margin of 6.1%[196][205]. - Total revenue for the nine months ended September 30, 2025, was $66,826,000, representing a 95.7% increase from $34,153,000 in 2024[222]. - Product revenue increased by 99.8% to $54,130,000 for the nine months ended September 30, 2025, driven by a 185% increase in MW produced[223]. - Service revenue rose by 79.8% to $12,696,000, attributed to a 71% increase in logistics activity levels and higher engineering consulting revenue[224]. - The gross loss for the nine months ended September 30, 2025, was $5,772,000, improving from a gross loss of $8,757,000 in 2024, with a gross margin percentage of -8.6%[226]. - The net loss for the three months ended September 30, 2025, was $23,938,000, compared to a net loss of $15,359,000 in the same period of 2024[196]. - The company incurred a net loss of $(43,187) thousand for the nine months ended September 30, 2025[307]. Revenue Recognition and Accounting - FTC Solar's revenue is recognized over time based on project progress, with individual parts recognized at the point of control transfer, reflecting a comprehensive approach to revenue recognition[186]. - The company utilized Adjusted EBITDA, Adjusted Net Loss, and Adjusted EPS as supplemental measures of performance to assist investors in comparing performance across reporting periods[298]. - The company elected to use the extended transition period for adopting new or revised accounting standards under the JOBS Act[294]. Cost and Expenses - The cost of revenue increased by 69.2% to $24,436,000, driven by a 320% increase in MW produced and an 82% rise in logistics activity levels[204]. - Research and development expenses decreased by 16.3% to $1,228,000, representing 4.7% of total revenue, down from 14.5% in the prior year[208][210]. - Selling and marketing expenses decreased by 30.5% to $1,672,000, accounting for 6.4% of total revenue, compared to 23.7% in the same period of 2024[212]. - General and administrative expenses were $6,399,000, down 5.9% from $6,797,000, with a percentage of revenue decreasing from 67.1% to 24.6%[214]. - Research and development expenses decreased by 26.1% to $3,281,000 for the nine months ended September 30, 2025, compared to $4,441,000 in 2024[228]. - General and administrative expenses decreased by 14.3% to $16,612,000 for the nine months ended September 30, 2025, from $19,374,000 in 2024[230]. Market and Operational Challenges - The company has faced challenges due to government regulations, including tariffs exceeding 200% on certain solar products linked to China, impacting profitability and project timelines[171]. - The average selling price (ASP) and cost per watt metrics are critical for evaluating sales performance, with competitive pricing pressures affecting profitability[177]. - The company is focused on mitigating climate-related risks by diversifying suppliers and designing equipment for high-slope tolerance and wind mitigation[182]. - FTC Solar's operational performance is influenced by project timing, with delays in customer project development significantly impacting revenue[168]. - The company is exposed to market risk primarily due to customer concentrations and fluctuations in steel, aluminum, and logistics/transportation prices[314]. - The company relies on a small number of customers that account for a significant portion of revenue and outstanding receivables, exposing it to industry credit risks[321]. - Significant price increases in raw materials could harm the company's business and financial condition if costs cannot be recovered from customers[323]. Investments and Growth Strategies - Investments in technology and personnel are ongoing to enhance product capabilities and expand the patent portfolio, supporting future growth[179]. - The company continues to focus on expanding its market share and developing innovative products to meet changing technology requirements[189]. Financial Position and Liquidity - As of September 30, 2025, the company had a stockholders' deficit of $13.7 million and working capital of $38.5 million[242]. - The company incurred cumulative losses of $25.4 million in cash utilized in operating activities during the nine months ended September 30, 2025, with cash on hand of $24.4 million[242]. - The Credit Agreement provides for a senior secured term facility of up to $75 million, with $14.3 million funded as Initial Term Loans and $23.2 million as First Delayed Draw Term Loans[245]. - The company is required to meet a minimum unrestricted cash covenant of $20.0 million as of December 31, 2025, and has set quarterly revenue targets starting at $30.0 million for Q4 2025[255]. - The company has substantial doubt regarding its ability to continue as a going concern within the next year due to recent operating losses and financial performance[247]. - The company had outstanding Term Loans with principal and accrued paid-in-kind interest totaling $54.2 million as of September 30, 2025[318]. - The company received a $3.2 million contingent earnout payment related to the sale of its equity interest in Dimension during the nine months ended September 30, 2025[267]. Debt and Interest Expenses - Interest expense for the three months ended September 30, 2025, was $1,988,000, a significant increase of 14,100.0% compared to $14,000 in 2024[215]. - Interest expense for the nine months ended September 30, 2025, was $448,000, a significant increase of $2,982,000 or 665.6% compared to $3,430,000 in 2024[232]. - The A&R Promissory Note, dated July 2, 2025, reduced the interest rate on the Senior Notes to 5% per annum paid in cash and 7% per annum paid in kind[260]. Gains and Losses - The company reported a gain on the sale of the Atlas software platform of $90,000 in 2024, with no gain recognized in 2025[216]. - The company recognized a gain of $140,000 from the sale of its Atlas web-based software platform, with potential future earnout payments based on annual license renewals during 2025[233]. - The gain from the disposal of investment in the unconsolidated subsidiary decreased to $3,204,000 in 2025 from $4,085,000 in 2024, reflecting a decline of $881,000 or 21.6%[234]. - Loss from the change in fair value of warrant liability was $16,066,000 for the three months ended September 30, 2025, reflecting an increase in the fair value of New Warrants from approximately $32.1 million to over $48.1 million[218]. - Loss from the change in fair value of warrant liability amounted to $14,298,000 for the nine months ended September 30, 2025, with no comparable figure for 2024[237].

Financial Performance Highlights - Third quarter revenue reached $26.031 million, exceeding guidance and marking a 157% increase year-over-year, the highest level in 8 quarters[7] - Non-GAAP Gross Margin was 7.7%, surpassing guidance and representing the best level in 5 years[7] - Adjusted EBITDA was $(4.0) million, also exceeding guidance[7] - The company secured a $75 million facility and closed on $37.5 million, strengthening the balance sheet[7] Financial Metrics Improvement - Revenue increased by 30% quarter-over-quarter[17] - Non-GAAP Gross Margin increased by 2510 basis points quarter-over-quarter and 4600 basis points year-over-year[17] - U S GAAP gross margin improved from (42.5%) in Q3 2024 to 6.1% in Q3 2025[18] - Non-GAAP gross margin improved from (38.3%) in Q3 2024 to 7.7% in Q3 2025[18] Outlook - The company projects fourth quarter revenue between $30.0 million and $35.0 million[19] - The company projects Non-GAAP Gross Margin between 12.7% and 23.4% for the fourth quarter[19]

Revenue Performance - Third quarter revenue reached $26.0 million, representing a year-over-year increase of 156.8% and exceeding guidance [4] - Total revenue for the three months ended September 30, 2025, was $26,030,000, a 157.5% increase from $10,136,000 in the same period of 2024 [25] - U.S. GAAP revenue for Q3 2025 was $26,030,000, a significant increase from $10,136,000 in Q3 2024, representing a year-over-year growth of 157% [34] - The company plans for fourth quarter revenue to be approximately 25% higher than the third quarter [14] Profitability and Loss - Gross margin improved significantly, with GAAP gross profit at $1.6 million (6.1% of revenue) compared to a gross loss of $3.9 million in the prior quarter [5] - Non-GAAP gross profit for Q3 2025 was $1,992,000, compared to a loss of $3,880,000 in Q3 2024, indicating a substantial improvement in profitability [34] - Non-GAAP gross margin percentage improved to 7.7% in Q3 2025 from a negative 38.3% in Q3 2024 [34] - The company reported its lowest loss from operations and best Adjusted EBITDA since 2020, with an Adjusted EBITDA loss of $4.0 million [9] - Adjusted EBITDA for Q3 2025 was a loss of $3,962,000, an improvement from a loss of $12,174,000 in Q3 2024 [36] - The net loss for the third quarter was $23.9 million, or $1.61 per diluted share, compared to a loss of $15.4 million in the prior quarter [9] - The net loss per U.S. GAAP for Q3 2025 was $23,938,000, compared to a net loss of $15,359,000 in Q3 2024 [36] - The company reported a significant loss from operations of $7,705,000 in Q3 2025, an improvement from a loss of $14,976,000 in Q3 2024 [35] Operating Expenses - Operating expenses on a Non-GAAP basis were $8.0 million, slightly down from $8.1 million in the same quarter last year [6] - Operating expenses for the three months ended September 30, 2025, were $9,299,000, down from $10,670,000 in the same period of 2024, reflecting a 12.9% reduction [25] - U.S. GAAP operating expenses decreased to $9,299,000 in Q3 2025 from $10,670,000 in Q3 2024, a reduction of approximately 13% [35] - Stock-based compensation for Q3 2025 was $1,127,000, slightly lower than $1,319,000 in Q3 2024 [36] Financial Position - Cash and cash equivalents increased to $24,369,000 as of September 30, 2025, from $11,247,000 at the end of 2024, showing a significant improvement in liquidity [28] - Total assets grew to $111,525,000 as of September 30, 2025, compared to $89,928,000 at the end of 2024, indicating a 24% increase [28] - Long-term debt increased to $16,648,000 as of September 30, 2025, from $9,466,000 at the end of 2024, reflecting a 76.8% rise [28] Strategic Initiatives - A strategic financing facility of $75 million was secured, with $37.5 million closed during the quarter [8] - The contracted backlog, excluding the Levona agreement, stands at approximately $462 million [11] - A one-gigawatt tracker supply agreement was announced with Levona Renewables, with the first project expected to start construction in early 2026 [10] - FTC Solar will acquire a 55% interest in Alpha Steel, LLC for approximately $2.7 million, enhancing its domestic manufacturing capabilities [13] Cash Flow - The company experienced a net cash used in operations of $25,416,000 for the nine months ended September 30, 2025, compared to $18,008,000 for the same period in 2024, indicating increased cash outflow [30] - The company reported a loss from operations of $29,764,000 for the nine months ended September 30, 2025, compared to a loss of $39,402,000 for the same period in 2024, indicating a 24.6% improvement [25] - Net loss for the nine months ended September 30, 2025, was $43,187,000, compared to a net loss of $36,371,000 for the same period in 2024, representing a 18.5% increase in losses [30] Other Financial Metrics - Adjusted EBITDA and other non-GAAP measures are utilized to provide a clearer picture of the company's operational performance, excluding non-recurring items [31] - The weighted-average common shares outstanding increased to 14,899,638 in Q3 2025 from 12,738,030 in Q3 2024 [36] - The company incurred severance costs of $34,000 in the nine months ended September 30, 2025, compared to no severance costs in the same period of 2024 [34]

Core Insights - FTC Solar reported strong financial results for Q3 2025, with revenue increasing nearly 160% year-over-year, reaching $26.0 million, the highest level in eight quarters [2][3][7] - The company achieved a gross profit of $1.6 million, marking a significant improvement from a gross loss of $3.9 million in the previous quarter [4][6] - Operating expenses were reduced to $9.3 million, down from $10.7 million in the prior quarter, indicating improved cost management [5][6] Financial Performance - Total revenue for Q3 2025 was $26.0 million, representing a 30.2% increase from the previous quarter and a 156.8% increase from Q3 2024 [3][6] - GAAP gross margin improved to 6.1%, compared to a gross margin loss of 19.6% in the prior quarter [4][6] - Non-GAAP gross profit was $2.0 million, or 7.7% of revenue, a return to positive gross margin for the first time since late 2023 [4][6] Operating Metrics - The company reported a net loss of $23.9 million, or $1.61 per diluted share, compared to a loss of $15.4 million, or $1.21 per diluted share, in the prior quarter [6][7] - Adjusted EBITDA loss was $4.0 million, an improvement from losses of $10.4 million in the previous quarter and $12.2 million in the year-ago quarter [6][7] - The contracted backlog, excluding the Levona agreement, stands at approximately $462 million [9] Strategic Developments - FTC Solar secured a $75 million strategic financing facility, with $37.5 million already closed, to support its growth initiatives [10][11] - The company announced a one-gigawatt tracker supply agreement with Levona Renewables, with the first project expected to start construction in early 2026 [8][9] - FTC Solar plans to acquire a 55% interest in Alpha Steel, LLC for approximately $2.7 million, enhancing its manufacturing capabilities [11] Outlook - For Q4 2025, the company expects revenue to increase by approximately 25% compared to Q3 2025, with guidance set between $30.0 million and $35.0 million [12][13]

Core Insights - FTC Solar reported strong third-quarter results, with revenue increasing nearly 160% year-over-year, reaching $26.0 million, the highest level in eight quarters [2][3][7] - The company achieved a gross profit of $1.6 million, marking a significant recovery from a gross loss in the previous quarter, and returned to positive gross margins for the first time since late 2023 [4][6] - Operating expenses were managed effectively, resulting in the lowest loss from operations and best adjusted EBITDA since 2020 [6][7] Financial Performance - Total revenue for Q3 2025 was $26.0 million, a 30.2% increase from the prior quarter and a 156.8% increase from Q3 2024 [3][6] - GAAP gross profit was $1.6 million, representing 6.1% of revenue, compared to a gross loss of $3.9 million in the prior quarter [4][6] - Non-GAAP gross profit was $2.0 million, or 7.7% of revenue, indicating a significant improvement from a non-GAAP gross loss of $3.9 million in the same quarter last year [4][6] Operating Metrics - GAAP operating expenses were reported at $9.3 million, while non-GAAP operating expenses were $8.0 million, slightly lower than the previous year's $8.1 million [5][6] - The net loss for the quarter was $23.9 million, or $1.61 per diluted share, compared to a loss of $15.4 million or $1.21 per diluted share in the prior year [6][7] - Adjusted EBITDA loss was $4.0 million, an improvement from losses of $10.4 million in the prior quarter and $12.2 million in the year-ago quarter [6][7] Strategic Developments - The company secured a one-gigawatt tracker supply agreement with Levona Renewables, with the first project, CT Solar One, expected to start construction in early 2026 [7][8] - FTC Solar closed on a $75 million strategic financing facility, with $37.5 million already funded, providing additional financial flexibility [9] - The company announced plans to acquire a 55% interest in Alpha Steel, LLC, enhancing its manufacturing capabilities for solar components [10] Outlook - For Q4 2025, the company expects revenue to increase approximately 25% compared to Q3 2025, with guidance set between $30.0 million and $35.0 million [11][12]

Core Insights - FTC Solar, Inc. has released a white paper addressing the challenges in utility-scale solar deployment, emphasizing the need for acceleration in build rates to meet U.S. decarbonization goals, which require nearly double the recent levels of annual installations [1] - The paper highlights that the bottleneck in solar deployment has shifted from cost to execution, with labor shortages in skilled installation roles being a significant constraint [1] - Simplified tracker design, reduced labor intensity, and increased automation integration are proposed solutions to overcome these challenges [1] Company Overview - FTC Solar, founded in 2017, specializes in solar tracker systems, technology, software, and engineering services, significantly enhancing energy production by optimizing solar panel orientation [5] - The company’s innovative tracker designs offer a competitive advantage in installation cost-per-watt, positioning it as a leading provider in the renewable energy sector [5] Product Features - The 1P Pioneer tracker is designed for both robotic and human crews, featuring a construction-first design that aligns with robotics workflows, enhancing safety and throughput [2] - Key features of the Pioneer tracker include: - Discrete rail and module steps for preinstallation, preserving alignment and simplifying handoffs [6] - Python Clip for a friction-fit connection that reduces handling and cycle time while ensuring consistent clamping force [6] - Slide-and-glide module placement that minimizes overhead lifts, suitable for robotic operations [6] - Cinch Clips for quick module bonding without the need for torque tools or separate grounding wires [6] Industry Perspective - Industry leaders, such as James Emerick from Cosmic Robotics, emphasize that construction automation is essential for scaling solar energy to meet increasing demands [2] - The integration of AI-enabled robots for tracker system installation is already being tested in live project sites, indicating a shift towards more automated solutions in solar construction [4]

Core Insights - FTC Solar, Inc. will report its third quarter 2025 financial results on November 12, 2025, before market open [1] - A conference call for the investment community will take place at 8:30 a.m. E.T. on the same day to discuss the results and outlook [2] Company Overview - FTC Solar, Inc. was founded in 2017 by renewable energy industry veterans and specializes in solar tracker systems, technology, software, and engineering services [3] - The company's solar trackers enhance energy production by optimizing solar panel orientation, offering a competitive installation cost-per-watt advantage [3]

Group 1 - The core investment strategy focuses on long-only investment, evaluating companies from an operational and buy-and-hold perspective, rather than market-driven dynamics [1] - The articles emphasize understanding the long-term earnings power of companies and the competitive dynamics within their industries [1] - Most recommendations will be holds, indicating a cautious approach to investment, with only a small fraction of companies deemed suitable for buying at any given time [1] Group 2 - The articles aim to provide important information for future investors and introduce a healthy skepticism towards a generally bullish market [1]