FTC Solar, Inc. (NASDAQ:FTCI) Q3 2024 Earnings Conference Call November 12, 2024 8:30 AM ET Company Participants Bill Michalek – Vice President-Investor Relations Yann Brandt – President and Chief Executive Officer Cathy Behnen – Chief Financial Officer Conference Call Participants Sameer Joshi – H.C. Wainwright Graham Price – Raymond James Operator Thank you for standing by. My name is Louella, and I will be your conference operator today. At this time, I would like to welcome everyone to the FTC Solar Thi ...

Company Positioning and Strategy - FTC Solar is at an inflection point due to its positioning and traction in 1P, with over 70% of bookings now in 1P compared to 16% of revenues in Q2 and 30% in Q3[4] - The company's transition from 2P-only to a broad offering across 1P and 2P opens up approximately 85% of the market, positioning FTC for potential share gains[4] - FTC Solar aims to achieve quarterly profitability in 2025, driven by a product cost structure that enables strong margin growth as the top line scales and an efficient operating cost structure[5] Recent Wins and Agreements - Strata Clean Energy has a multi-year agreement for 500MW of 2P trackers, expandable to over 1GW[6] - Dunlieh Energy, a new customer, has a 1GW agreement, with the first project being 500MW in Nebraska[6] - Sandhills Energy Agreement includes three projects totaling 225MW, 320MW, and 448MW[6] Q3 Financial Performance - Q3 revenue was $30548 thousand, compared to $10136 thousand in Q3 2023[7] - Gross margin percentage was (42.5%) compared to 11.1% in Q3 2023[7] - Net loss was $(15359) thousand, compared to $(16937) thousand in Q3 2023[7] Q4 Outlook - Q4 2024 revenue is projected to be between $10 million and $14 million[9] - Non-GAAP gross margin for Q4 2024 is expected to be between (42.2%) and (10.7%)[9] - Adjusted EBITDA for Q4 2024 is forecasted to be between $(13.7) million and $(9.9) million[9]

Core Viewpoint - FTC Solar reported a quarterly loss of $0.10 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.08, marking a 25% earnings surprise [1] - The company generated revenues of $10.14 million for the quarter ended September 2024, exceeding the Zacks Consensus Estimate by 2.66%, but down from $30.55 million year-over-year [2] Company Performance - Over the last four quarters, FTC Solar has consistently failed to meet consensus EPS estimates [2] - The stock has declined approximately 24.8% year-to-date, contrasting with the S&P 500's gain of 25.8% [3] Future Outlook - The company's earnings outlook is critical for investors, with current consensus EPS estimates at -$0.06 for the upcoming quarter and -$0.33 for the current fiscal year [7] - The estimate revisions trend for FTC Solar is currently unfavorable, resulting in a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6] Industry Context - The solar industry is currently ranked in the bottom 26% of over 250 Zacks industries, suggesting a challenging environment for stocks in this sector [8] - Canadian Solar, a peer in the industry, is expected to report a quarterly loss of $0.44 per share, reflecting a significant year-over-year decline of 237.5% [9]

Financial Performance - Third quarter revenue was $10.1 million, a decrease of 66.8% compared to the same quarter last year[4] - Gross margin percentage was -42.5%, compared to -20.5% in the prior quarter[5] - Total operating expenses were $10.7 million, down from $19.7 million in the prior year[6] - Net loss for the quarter was $15.4 million, or $0.12 per diluted share, compared to a net loss of $16.9 million, or $0.14 per diluted share in the same quarter last year[7] - Total revenue for the three months ended September 30, 2023, was $30,548,000, a decrease from $34,153,000 for the nine months ended September 30, 2024[16] - Gross profit for the three months ended September 30, 2023, was $3,379,000, compared to a gross loss of $8,757,000 for the nine months ended September 30, 2024[16] - Net loss for the three months ended September 30, 2023, was $16,937,000, which is an improvement from a net loss of $39,113,000 for the nine months ended September 30, 2024[16] - U.S. GAAP revenue for the nine months ended September 30, 2024, was $34,153,000, a decrease from $103,801,000 in the same period of 2023[22] - Non-GAAP gross profit for the nine months ended September 30, 2024, was $(7,524,000), compared to $9,519,000 in the same period of 2023, reflecting a significant decline[22] - Non-GAAP gross margin percentage for the nine months ended September 30, 2024, was (22.0%), down from 9.2% in the same period of 2023[22] - U.S. GAAP operating expenses for the nine months ended September 30, 2024, were $30,645,000, a decrease from $46,656,000 in the same period of 2023[23] - Adjusted EBITDA for the nine months ended September 30, 2024, was $(33,280,000), compared to $(24,097,000) in the same period of 2023[26] - The net loss per U.S. GAAP for the nine months ended September 30, 2024, was $(36,371,000), compared to $(39,113,000) in the same period of 2023[26] - Stock-based compensation for the nine months ended September 30, 2024, was $4,243,000, down from $9,044,000 in the same period of 2023[26] Cash and Assets - Cash and cash equivalents decreased to $8,255,000 as of September 30, 2024, down from $25,235,000 as of December 31, 2023[17] - Accounts receivable decreased to $37,345,000 as of September 30, 2024, compared to $65,279,000 as of December 31, 2023[17] - Total assets decreased to $91,693,000 as of September 30, 2024, from $123,070,000 as of December 31, 2023[17] - Total liabilities increased slightly to $61,285,000 as of September 30, 2024, compared to $60,599,000 as of December 31, 2023[17] - The company reported a net cash used in operations of $18,008,000 for the nine months ended September 30, 2024, compared to $46,383,000 for the same period in the previous year[18] - The company’s accumulated deficit increased to $335,506,000 as of September 30, 2024, from $299,135,000 as of December 31, 2023[17] Future Outlook - The company added $18 million in new purchase orders since August 8, 2024, bringing the contracted backlog to $513 million[2] - A binding term sheet was entered into for a $15 million promissory note to strengthen the balance sheet[9] - For Q4 2024, revenue is expected to be flat to up 39% relative to Q3 2024, with guidance of $9.0 million to $11.0 million[11] - The company anticipates achieving adjusted EBITDA breakeven on a quarterly basis in 2025[11] Agreements and Investments - A $4.7 million earn-out was received post quarter-end related to a prior investment in Dimension Energy[8] - The company has a new 1GW tracker supply agreement with Dunlieh Energy and a multi-year agreement with Strata Clean Energy for 500MW, expandable to 1GW+[1] Other Expenses - The company incurred one-time recruitment fees related to hiring a new CEO in August 2024, which will be expensed over the next two years[27] - Non-routine legal fees incurred in 2023 amounted to $181,000, reflecting specific legal matters not routine to the business operations[27] - The weighted-average common shares outstanding for the nine months ended September 30, 2024, were 126,234,997, compared to 112,794,562 in the same period of 2023[27]

Group 1 - Momentum investing contrasts with the traditional "buy low and sell high" strategy, focusing instead on "buying high and selling higher" to capitalize on fast-moving stocks [1] - Identifying the right entry point for momentum stocks can be challenging, as they may lose momentum if their valuations exceed future growth potential [1] - A safer investment strategy involves targeting bargain stocks that exhibit recent price momentum, utilizing tools like the Zacks Momentum Style Score [2] Group 2 - FTC Solar (FTCI) has shown significant price movement, with a 127.7% increase over the past four weeks, indicating strong investor interest [3] - The stock has also gained 14.2% over the past 12 weeks, demonstrating its ability to maintain momentum over a longer period [4] - FTCI has a high Momentum Score of A, suggesting it is an opportune time to invest in the stock for potential gains [5] Group 3 - The upward trend in earnings estimate revisions has contributed to FTCI's Zacks Rank 2 (Buy), indicating strong momentum among stocks with similar rankings [6] - FTCI is currently trading at a Price-to-Sales ratio of 0.79, suggesting it is undervalued, as investors pay only 79 cents for each dollar of sales [6] - The stock appears to have significant growth potential while maintaining a reasonable valuation [7]

On his appointment, Mr. Brandt commented, "I am thrilled to be selected to lead FTC Solar, a top brand in the tracking market. I have been familiar with FTC Solar since its inception and continue to be impressed with the reputation it has developed for innovation and ease of use. It is an exciting time to join FTC Solar and work with their customers and prospects, many of which I know well, and provide the best tracker solutions for their projects, while helping to take FTC's business to the next level. Tog ...

AUSTIN, Texas, May 30, 2024 /PRNewswire/ -- FTC Solar, Inc. (Nasdaq: FTCI) a leading provider of innovative solar energy solutions, announces the launch of its Automated Hail Stow Solution, aimed at minimizing solar panel damage caused by hail storms. The solution integrates advanced technology with meteorological data to automatically adjust the positioning of solar panels, reducing the risk of hail-related damage. Hail storms pose a significant threat to solar panel installations, with insurance claims in ...

AUSTIN, Texas, May 15, 2024 (GLOBE NEWSWIRE) -- FTC Solar, Inc. (NASDAQ:FTCI), a leading provider of solar tracker systems, software, and engineering services, announced new leadership appointments and an expanded sales leadership team designed to enhance customer experience and success while supporting global sales and strategic growth. The leadership appointments include: Patrick Cook, to Senior Vice President, Capital Markets and Business Development. Cook most recently served as FTC Solar's Chief Commer ...

3 Three Key Takeaways 2. Continued focus on advancing key initiatives to support growth and profitability 4 Recent Progress Bookings & Product Enhancements • Bookings remain healthy, POs ~$50m/mo • Improved customer engagement & enhanced product portfolio, first order for high-wind Pioneer • Contracted portion of backlog ~$485m May 10, 2024 First Quarter 2024 Earnings Results 2 Forward-Looking Statements and Non-GAAP Financial Measures This presentation contains forward looking statements. These statements ...

Financial Performance - Total revenue for Q1 2024 was $12.6 million, a decrease of 69.2% compared to Q1 2023[4] - GAAP net loss for Q1 2024 was $8.8 million, or $0.07 per share, compared to a net loss of $11.8 million, or $0.11 per share in Q1 2023[8] - The company reported a net loss of $8,771,000 for the three months ended March 31, 2024, an improvement from a net loss of $11,762,000 in the same period of 2023, representing a 25.4% reduction in losses[22] - U.S. GAAP revenue decreased to $12,587,000 in Q1 2024, down 69.2% from $40,894,000 in Q1 2023[26] - Adjusted EBITDA loss for Q1 2024 was $10.7 million, compared to losses of $7.2 million in Q1 2023[8] - Adjusted EBITDA for Q1 2024 was a loss of $10,655,000, worsening from a loss of $7,152,000 in Q1 2023, reflecting increased operational challenges[27] - The company’s non-GAAP net loss per share for Q1 2024 was $(0.09), compared to $(0.07) in Q1 2023, indicating a worsening loss per share[27] Operational Metrics - Gross margin percentage for Q1 2024 was -16.7%, compared to 5.0% in the prior quarter[4] - Non-GAAP gross profit for Q1 2024 was a loss of $1,724,000, compared to a gross profit of $2,975,000 in Q1 2023, indicating a significant decline in profitability[26] - Non-GAAP operating expenses for Q1 2024 were $8.7 million, down from $10.1 million in the year-ago quarter[6] - Non-GAAP operating expenses decreased to $8,702,000 in Q1 2024 from $10,053,000 in Q1 2023, a reduction of 13.4%[26] - Stock-based compensation expenses were $1,639,000 in Q1 2024, down from $4,890,000 in Q1 2023, a decrease of 66.6%[26] Cash Flow and Assets - Cash and cash equivalents as of March 31, 2024, were $14.0 million, down from $25.2 million at the end of 2023[20] - Total assets decreased to $115.0 million as of March 31, 2024, from $123.1 million at the end of 2023[20] - Cash and cash equivalents at the end of the period were $15,937,000, down from $41,493,000 at the end of Q1 2023, a decrease of 61.7%[22] - The company experienced a net cash used in operations of $11,857,000 in Q1 2024, compared to $8,316,000 in Q1 2023, indicating increased cash outflow[22] Future Outlook - The company expects Q2 2024 revenue to be slightly up from Q1 2024, with a target of breakeven on an Adjusted EBITDA basis in Q3 2024[9] - The company aims to achieve quarterly profitability in 2024[7] - Total backlog now stands at approximately $1.8 billion[3] Investment Gains - The company recorded a gain from the disposal of an investment in an unconsolidated subsidiary amounting to $4,085,000 in Q1 2024, compared to a gain of $898,000 in Q1 2023[22]