Greetings. Welcome to Array Technologies’ first quarter 2025 earnings call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Julia Ward, Investor Relations at Array. Please go ahead.

Thank you. I would like to welcome everyone to Array Technologies' first quarter 2025 earnings conference call. I am joined on this call by Kevin Hostetler, our CEO, Keith Jennings, our CFO, and Neil Manning, our President and COO. Today's call is being webcast via our investor relations website at IR.Arraytechinc.com, including audio and Slides. In addition, the press release and the presentation detailing our quarterly results have been posted on the website. Today's discussion of financial results includes non-GAAP measures. A reconciliation of GAAP to non-GAAP financial measures can be found in the accompanying presentation and on our website. We encourage you to visit our website at Arraytechinc.com for the most current information on our company. As a reminder, the matters we are discussing today include forward-looking statements regarding market demand and supply, our expected results, and other matters. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from statements made on this call. We refer you to the documents we file with the SEC, including our most recent Form 10-K, for a discussion of risks that may affect our future results. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee the future results, levels of activity, performance, or achievements. We are under no duty to update any of the forward-looking statements to conform these statements to actual results except as required by law. I'll now turn the call over to Kevin.

Thank you, Julia. Good morning, everyone, and thank you for joining us today. I'll begin with a brief business and market update, then Neil Manning, our President and Chief Operating Officer, will provide some updates on market strategy, supply chain, product, and commercial execution for the quarter. Keith Jennings, our Chief Financial Officer, will provide our first quarter 2025 financial highlights and comments on our full-year 2025 financial guidance. Then we'll open up the line for your questions. Starting on Slide 4, I'll begin with the summary and key highlights of the quarter, followed by a discussion on the latest near-term market dynamics and the industry environment. In today's rapidly evolving policy environment, including ongoing tariff negotiations and potential shifts in the Inflation Reduction Act, we remain focused on what we can control, executing our strategy with discipline, maintaining operational agility, and delivering long-term value for our shareholders. While near-term volatility is a reality, we are confident in the strength of our fundamentals and the resilience of our company. Integrity and transparency remain at the core of how our team operates. Through this complex and dynamic environment, we believe staying the course on our mission will continue to earn the trust of our customers and shareholders alike. As shown on Slide 5, we had a strong first quarter, driven by focused execution, coupled with robust demand for our offerings, which accelerated volume growth to 143% over the prior year first quarter, achieving the second largest quarter of volume shipped since Q2 of 2023. This strong momentum is reflected in achieving $302 million of revenue in the first quarter, a 97% increase over the prior year first quarter, and a 10% increase sequentially over the fourth quarter of 2024. First quarter adjusted gross margin came in at 26.5%, indicative of the…

Thanks, Kevin. Moving to Slide 9, given the worldwide focus on tariffs, I want to share some additional details on a raised tariff response and our supply chain to help you understand our basis for confidence in navigating current events. As the original provider of high domestic content trackers, Array was already well positioned prior to the changes in the global trade landscape that emerged this year. Our commercial and supply chain teams have been working around the clock to respond to the near-term tariff uncertainty. On the commercial front, we conducted a comprehensive backlog and pipeline review to identify tariff provisions within our contracts and reconfirm delivery dates with our customers. Over 75% of contracted projects allows us to pass 100% of the tariffs onto the customer. As Kevin mentioned earlier, we also confirmed that at least 75% of our remaining 2025 domestic deliveries are of projects that either have US-made panels or panels already in the United States. Supply chain impacts are often unpredictable, which is why preparedness matters. At Array, we've been investing in talent, technology and commodity-buying strategies for the past several years, which has paid off in recent months. For example, our CPQ program, which stands for Configure Price Quote, utilizes advanced algorithms to evaluate a range of supply and logistics routing options for a project, with real-time costing, inclusive of raw materials, logistics costs, and tariffs. This agility, in conjunction with proactive steel purchases from our long-term domestic steel partners, are just a few of the longer-term investments that are now yielding positive outcomes. Keith will speak to the remaining points on our actions related to near-term uncertainty in a few moments. Moving to Slide 10. From the supply chain perspective, as you'll see here, Array has built a network of over 50 suppliers…

Thank you, Neil. Good morning. My commentary begins on Slide 13. First, like Neil and Kevin, I must commend the Array team for the focused execution across the quarter to start 2025. My comments will focus on key financial highlights of the first quarter 2025 results, and sharing some thoughts on the strength of our liquidity position and capital structure. Revenue in the first quarter was $302.4 million, growth of 97% from the prior year, largely due to the substantial increase in volume shipped in the quarter, indicating market share recovery from our customer initiatives and delivering on approximately $60 million of projects that were previously on hold from 2024. When compared to the prior quarter, revenue accelerated by 10%. Delivered volume, measured in megawatts of generation capacity for the quarter, was up 143% over the prior year, achieving the second largest quarter of volume shipped since 2023, and up 7% over the prior quarter. Year-over-year, we continue to experience moderate commodity-related ASP declines in Array legacy operations and slightly higher ASP declines internationally. When compared with the prior quarter, ASP increased slightly. Sales in North America represented approximately 65% of our revenue in the quarter. This lower-than-average amount of US proportion of revenues was primarily from two large ATI international projects in the quarter. This mix shift impacted our gross margins in the quarter. However, we do not anticipate this having a meaningful impact on our full-year margins. In the first quarter, adjusted gross margin was 26.5%. When compared to the prior year, gross margin declined due to the roll off of prior year 45X benefits, the non-recurring benefit from a one-time legal settlement in the first quarter of 2024, and the commodity-driven compression of ASPs. Sequentially, adjusted gross margin declined by 330 basis points, primarily due to the…

Thank you, Keith. I'll wrap up with Slide 17. As you have heard today, we believe we are well positioned to weather this storm of uncertainty. We have the people and capabilities in place to continue capturing new opportunities given the demand growth momentum of the utility scale solar industry, and we remain optimistic about our ability to deliver value to our shareholders. Looking ahead, with the volume growth we experienced in the first quarter, at the midpoint of our forecast, we expect approximately 30% volume growth in 2025, and 9.5% of adjusted EBITDA growth in 2025. This translates to 8.5% adjusted net income per share growth in 2025. As Neil mentioned, momentum remains strong with our new product and innovation pipeline. As a proof point, we are seeing great traction with our OmniTrack product and expect this to represent approximately 30% of our deliveries in 2025. We are laser focused on what we can control, prioritizing business growth, customer relationships, product innovation, and operational efficiency. With that, we will now open the call up for questions. Operator?

[Operator Instructions] Our first question is from Mark Strouse with J.P. Morgan. Please proceed.

Good morning. Thank you very much for taking our questions. Are you able to provide any more color on the commentary that you mentioned in the press release about kind of the growing interest in VCAs? Any color on kind of timelines that type those might cover potential kind of safe harbor orders? And to the extent that this plays out, are you thinking about kind of providing us new metrics that can kind of help show investors kind of the increased level of visibility that you have? And then I have a quick follow up. Thank you.

Yes, let me take that one, Mark. So, we’re in active discussions with several customers now who are approaching us to go back into the mode of longer-term commitments between the customer and Array. I think depending upon the size and relativity of those, we'll do some announcements on those VCAs as we ink them. I don't think we're contemplating any new metrics that we would provide. What we want to do is maintain the integrity of our order book number and the ability to translate that to revenues over the coming periods. So, we don't want to just state that we have this huge backlog full of VCAs without very defined projects to be delivered in the defined time period. So, we'll work our way through that as we look to ink some of those VCAs in the coming months.

Okay, thank you. And then Keith, a quick follow up. I'm sorry if I missed this, but did you provide any commentary on 2Q, how to think about revenue and the low margin legacy VCA deal that you had, that you called out on the last quarter? Did you wrap that up in 1Q or is there any kind of lingering deliveries in 2Q as well? Thank you.

Morning, Mark. So, the first question is second quarter guidance, we have not given specific guidance for the second quarter. We maintain the general guidance that we gave last quarter, which says that the first half will be about 55% of the revenue split. And so, we think that that holds. On the second question regarding the legacy low price VCA, the customer still has the ability to call off on that contract, but we do not believe that there will be another call off in 2025. We have none scheduled in our delivery portfolio for 2025. And so, we think that that impact on our margins is behind us for 2025.

Our next question is from Colin Rusch with Oppenheimer & Company. Please proceed.

Thanks so much. Can you talk a little bit about the size of orders that you're starting to see and lead times? Just curious about any sort of shifts either up or down, both in terms of project size and if folks are trying to accelerate projects or seeing lead times extend out.

Yes, I would say our lead times, we still have industry-leading lead times of 14 weeks, and obviously we have customers pressure-testing that and saying, if we were, can you do it in 12 and things? So, we're certainly in a lot of dynamic discussions about that. We have yet to have a meaningful amount of influx of safe harbor or early pull-ins into 2025, although those conversations continue to go on. Relative to what we're seeing more broadly, while we saw good book-to-bill domestically, as Keith mentioned in his prepared remarks, I think that the domestic business from an inbound order, look, it's going to be a little bit challenging here in terms of our customers’ ability to price PPAs effectively, given the level of uncertainty, and therefore then to press orders on it. So, what we're focused on is looking at their backlogs, looking at which portions of their backlogs really fit Array, and being ready to serve them when that clarity comes, that's the type of discussions we're having with our customers. Their backlogs and their volume of business is as big as it's ever been. So, right now it's really about getting clarity on the tariff and IRA elements that will allow them to appropriately price PPAs and have those orders flow down to Array. But we're certainly working with our customers on what those projects look like at this point.

Thanks so much. And then from a product perspective, can you talk a little bit about the areas of focus where you are seeing some opportunity for incremental competitive advantage and opportunity to simplify installation or get some incremental performance? Just curious about that product relative to other folks and where there's some evolution.

Yes. Hey, it's Neil. I'll take that one. So, we've talked quite a bit about our focus on extreme weather, and when you look at our prepared remarks and some of what we've been talking about over prior quarters, we really believe that Array provides a differentiating capability in this area, particularly with our architecture with passive stow, along with what we've announced as the highest stow angle in the industry at 77 degrees for hail, along with the other software capabilities we've brought to market in recent quarters, we feel that that brings a really advantageous avenue for Array in the market, and our customers have really indicated a lot of interest with us for that. And so, separately to that, then when we talk about SkyLink and simplified installation, SkyLink offers stability for wireless connectivity that minimizes trenching in difficult soil environments. So, when you look at where we really stake the ground, it's around either ease of installation for our EPC partners or helping our overall clients mitigate really challenging weather environments, which are happening more and more frequently, particularly in kind of the southern part of the United States. So, we feel really happy with how our technology and innovation pipeline is continuing to proceed. You'll expect us to continue to focus on that area, and we feel really good about the progress we've made on that front.

I think the one thing I'll add to that is the OmniTrack. It's significant and we’ve put it in our prepared remarks, but the fact that we launched a product just under two years ago now, and it's already accounting for 30% of our revenues in the year 2025, is quite significant, and really indicative of a really rapid level of adoption for that product line. We're seeing a lot of great success in that, not only domestically, but we began installing that this year internationally as well. So, we're really excited about the OmniTrack product in our portfolio at this point.

Thanks so much, guys.

[Operator instructions]. Our next question is from Maheep Mandloi with Mizuho Securities. Please proceed.

Hi, this is David Benjamin in for Maheep. Can you talk about your cash use plan and especially any plan to delever your term loans?

So, we've just successfully amended and extended the revolving credit facility. So, short of our liquidity, we're looking at all options. We have the converts that are trading in a discount, which represent a good return for shareholders. If we address a portion of those, we are looking at how to manage the term loan. However, as you can imagine, the debt markets today are not as open for renewable companies as they once were. So, we're thinking carefully about how we do that. And of course, we're looking at strategic opportunities to grow our business inorganically. So, we are pleased with where we are in terms of the on-balance sheet liquidity, off-balance sheet liquidity and the revolver. We're pleased with our cashflow generation. And so, we’re taking our time and looking at all our options.

Thanks. And then I have a separate question. You mentioned talking to customers. Are you noticing the same kind of comments, regardless if it's an EPC or developer in terms of project schedules, or is there any daylight between the two?

In my conversations, I think the conversations and tone have been very similar in terms of the commitments to their 2025 outlook. I think what I have learned in this journey of speaking to the customers is what are the differences that affect the project near-term versus what affects a project long-term? And so, we focused on what are the things that would affect the projects near-term, and those things all seem to be really aligned. So, like the PPA agreements and so forth and looking at equipment timelines and so forth, that would affect things long-term. So, both the EPC, both the developers all seem aligned that the interconnections and the PPAs are in line and that the 2025 schedule looks like it'll hold at this point in time.

Thanks very much.

Our next question is from Kashy Harrison with Piper Sandler. Please proceed.

Hey, this is Luke on for Kashy. Good morning. I want to circle back to your comments on how the domestic bookings environment might be challenged with all the uncertainty, which makes sense. Do you think that the uncertainty is driven by the IRA, or is it primarily being driven by tariffs?

Luke, it's both. So, as Keith mentioned, we've had conversations with handfuls of both EPCs and developers, and they're challenging in the near-term and the real - I mean, it couldn't quote it any other way, but look, how do I really understand what my costs are going to be? And it's not - to be clear, this isn't a 2025, it's probably not even as much a first half 2026, but it's really back half 2026, 2027 projects that we're focused on now that they'll be filling in the order book. And they are really struggling with understanding not the tracker portion of the cost, right? That's 10% of the project costs, but you have lots of other components that they're struggling with understanding the full price, be they the inverters, the modules, the transformers, some of those other things, but still it's not settled on what the full tariff impact of some of those imported components will be yet. Secondarily, the understanding of the timing and what changes would happen to the IRA. So, I think their view is, look, as long as you will be able to respond to us quickly when we get that clarity, it may be a quarter or two away before we get that full clarity, but Array, we're going to need you guys to respond quickly when we have it because things are going to move fast. And we're like, absolutely. Let's have a peek into what types of projects and scale of projects you're thinking of so we'll be ready for you. That's the type of conversations we're having at this point.

Okay, that makes sense. And then just as a follow up, can you remind us when the preferred stock distributions have to be paid in cash versus picked?

I think it is in the summer of 2026.

Okay, thank you.

Our next question is from Phillip Shen with ROTH MKM. Please.

Hey guys. So, thanks for taking my questions. Wanted to check in on the exposure you guys might have to projects starting construction or being delivered in 2025 or early 2026 that may be exposed to the battery cell pack challenges, where the 145% China tariff is limiting supply of cells into the country. And so, I know some solar and storage projects, the solar and storage can COD separately, independently, but there are some projects where they need to develop together. And so, I was wondering what kind of risk there might be with that kind of exposure. Thanks.

So, Phil, what we focused on as a team was going project by project through the balance of 2025. And certainly, we looked a little bit forward into 2026, but we felt what we were really trying to do is shore up our guidance here in 2025. And for those projects that are solar and solar and storage in 2025, our customers are still saying that the projects that we have in pipeline are still going forward as planned, because most of what they needed for those projects were already in-country from a component standpoint.

That's good to hear. Thanks Kevin.

Yes, that’s what we felt, as we do - go ahead.

Yes, so that's great. Really sorry for cutting you off there. If we get the reciprocal tariffs back at the end of the 90 days, how could that impact back half commitments and revenue? Thanks.

Yes, so we don't think it impacts our back half of this year because again, most of the components that our customers are looking for, look, I think we put a stat in the presentation that about 87% of stuff is already in motion. We're already beginning to deliver to those sites. Our portion of the components, that comes pretty early in the cycle, and most of that's already beginning to get in motion. Our customers have even indicated on these calls that Keith and I had that in many cases, it would cause more heartache to try to slow down than it would to speed up because so much is in motion vis-à-vis their labor for the field and everything scheduled out for this year. So, the view of most of the EPCs and developers that we spoke to were that 2025 looks fairly solid at this point in terms of continuing the projects on pace to the schedule that they previously provided us. So, that's as far as we're willing to go at this point is 2025 seems fairly solid at this point.

Okay. Thank you for the color and detail, Kevin. I'll pass it on.

Our next question is from Brian Lee with Goldman Sachs. Please proceed.

Hey guys, good morning. Thanks for taking my questions. It's been a busy morning, so I was unfortunately hopping on late. I apologize if some of these things were covered. But I had two questions. On steel pricing, maybe the pricing capture potential, you're now into May. Kevin, how are you thinking about the impact in 3Q and 4Q on your business? Have you seen this sort of 9% to 11% price increase you kind of alluded to in the last call? Is that playing into bookings already? And then what sort of impact on gross margins could that have? And I had a follow up.

Yes. So, remember, the steel prices that we're purchasing steel in the US largely for our domestic business. And what you've seen year-to-date is still a pretty substantial increase in steel prices on a year-to-date basis. While it's back down slightly in the last couple of weeks, it's still predicted on a full-year basis to be up circa 25% to 28%. So, that does translate into some ASP increases. So, for the projects that we would be booking now, you'll see those at a higher ASP than you would've prior. And you even saw that in Q1 had a sequential, very slight, but beginning the uptick of ASPs as you started to see that. So, but as you know with our cycles, you won't see that for a couple of quarters before it starts rolling through the real P&L because a lot of the stuff we're booking now with those higher steel things are going to be set for 2026. There may be some that'll be shipping in say, Q4 of 2025 as well, but we are seeing in the orders that the ASPs are beginning to increase slightly.

Awesome to hear how things are starting to play out. That's good to hear. And then, again, my second question was around the bookings here. They were pretty solid. I think there was some concern coming into the year that uncertainty levels across the industry, tariffs, et cetera, just it's a tougher backdrop than what you had the past few quarters. And yet bookings seem to be slightly modestly moving back up. So, should we expect further momentum here just off of these levels, even off what, again, we were kind of thinking might be a seasonally softer Q1 period. I think you, you exceeded expectations at least what seemed to be pretty low expectations going in. What’s sort of the forward momentum off these levels that we should maybe be anticipating? Thanks, guys.

I think the honest answer is it's too early to tell. As I said, as we're talking to our customers and our partners, the amount of quotes is still really high. So, the activity level is really high. But again, whether or not, and remember that the tracker being 10% of the overall site cost, and we can be pretty definitive because as we put in our prepared remarks, the fact that 93% of our basic build material is already domestic-sourced, that that tariff impact is fairly minimal on an - even on an unmitigated basis. So, our view is that we are not the issue that's going to hold up our customers being able to price their projects effectively. It's a lot of the other components, again, the modules that are 30% of the cost of a site, it's the transformers, it's the inverters, those other components. And as Phil indicated earlier on his question, the batteries are probably one of the biggest question marks out there in terms of how do you price these projects going forward, knowing that somewhere between 40% and 50% of these solar sites are now combined with battery storage, or at least planned currently to be combined with battery storage. So, I think it's too early to tell what that bookings momentum. I can tell you that the underlying demand momentum is still very, very strong. It's whether or not customers can convert them, for example this quarter, given the uncertainty around IRA and given the uncertainty around tariffs, or are we going to have this period of a lull in bookings followed by hyper acceleration when we get a level of clarity there. That's what we're not sure. We're talking to our customers every day. They're certainly focused on now that pivot towards a few more - talking to us about longer-term VCAs to preserve capacity. That's kind of the discussions we're currently having with our partners.

Okay. Appreciate all that color. Thanks a lot, guys.

With no further questions, I would like to turn the conference back over to management for closing comments.

Thank you. Once again, I just want to thank the Array team globally for delivering such a strong quarter, and I look forward to talking to you guys again at the end of Q2. Thanks, everyone.

Thank you. This will conclude today’s conference. You may disconnect your lines at this time, and thank you for your participation.