FTC Solar(US:FTCI)2021-08-10 16:00Revenue and Sales Performance - For the six months ended June 30, 2021, 80% of total revenue was derived from tracker system sales, primarily to customers in the United States [106]. - The company recorded revenue from the first order of its SunPath performance-enhancing software, which is estimated to increase energy yield by up to 6% at solar installations [106]. - Total revenue for the six months ended June 30, 2021 was $115.8 million, an increase of $32.3 million or 39% compared to the same period in 2020 [131]. - Product revenue for Q2 2021 was $35.8 million, a decrease of $7.0 million or 16% compared to Q2 2020, primarily due to a 14% decrease in MW shipped [133]. - Service revenue for Q2 2021 was $14.4 million, an increase of $6.1 million or 73% compared to Q2 2020, driven by increased shipping and logistics revenue [135]. Expenses and Financial Performance - Gross profit for Q2 2021 was negative $16.1 million, a decrease of $14.7 million compared to Q2 2020, primarily due to increased shipping and logistics costs [140]. - Research and development expenses for Q2 2021 were $5.6 million, an increase of $4.1 million compared to Q2 2020, largely due to stock-based compensation related to the IPO [142]. - General and administrative expenses for Q2 2021 were $51.1 million, an increase of $48.9 million compared to Q2 2020, primarily due to stock-based compensation triggered by the IPO [146]. - Selling and marketing expenses for Q2 2021 were $3.2 million, an increase of $2.4 million compared to Q2 2020, driven by stock-based compensation related to the IPO [144]. - The company experienced a net loss of $55.8 million for Q2 2021, compared to a net loss of $6.8 million for Q2 2020 [131]. - The company recognized a net loss of $63.3 million for the six months ended June 30, 2021, compared to a net loss of $3.4 million for the same period in 2020 [155]. - The adjusted Non-GAAP net loss for the six months ended June 30, 2021, was $23,647,000, compared to $2,193,000 for the same period in 2020, reflecting a worsening financial performance [171]. Cash Flow and Financing - For the six months ended June 30, 2021, the net cash used in operating activities was $84.3 million, primarily due to a net loss of $63.3 million [155]. - Net cash provided by investing activities for the six months ended June 30, 2021, was $21.8 million, attributable to proceeds from the disposal of the equity method investment [156]. - Net cash provided by financing activities for the six months ended June 30, 2021, was $178.8 million, primarily from the sale of common stock during the IPO [158]. - The company had an increase in cash and restricted cash of $116.3 million for the six months ended June 30, 2021 [153]. - The company entered into a $100 million senior secured revolving credit facility in April 2021, which has not been drawn upon as of June 30, 2021 [161]. Supply Chain and Market Conditions - The company has reduced its reliance on China for its supply chain from 90% in 2019 to qualifying suppliers outside of China for all commodities as of June 30, 2021 [109]. - The impact of the COVID-19 pandemic has caused significant supply chain disruptions, leading to delays in product deliveries and increased logistics costs [110]. - The company has entered into contracts to secure necessary capacity and price certainty for a substantial portion of steel commodities required for anticipated production in the second half of the year [117]. - Cost per MW increased 23% year over year due to rising steel prices and shipping costs [139]. - Significant price increases in commodity raw materials could harm the company's financial condition and results of operations if costs cannot be recovered from customers [181]. Growth and Market Expansion - The company has experienced significant growth in contracted and awarded projects since the last earnings report, indicating a positive trend in market acceptance [106]. - The company has expanded its sales presence in multiple regions, including Australia, India, the Middle East, China, Europe, South Africa, and South-East Asia as of June 30, 2021 [124]. - The average selling price (ASP) of solar tracker systems is tracked to evaluate sales performance, with metrics related to price and cost of goods sold per megawatt (MW) being critical [108]. Compliance and Risk Management - As of June 30, 2021, the company was in full compliance with its financial condition covenants related to the credit agreement [162]. - The company has no off-balance sheet financing arrangements or liabilities, ensuring a straightforward financial position without hidden risks [175]. - The company is exposed to market risks primarily due to customer concentrations and fluctuations in prices of steel and aluminum, which could impact operating margins [180]. - The company has identified critical accounting policies related to revenue recognition and equity method investments, which require significant management judgment [177]. - There were no significant changes in critical accounting policies or estimates during the six months ended June 30, 2021, compared to the previous fiscal year [179].