Hello, 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 speakers' presentation, there will be a question and answer session. To ask a question during the session, you would need to press 11 on your telephone. You would then hear an automated message advising your hand is raised. To withdraw your question, please press 11 again. I would now like to hand the conference over to Bill Michalek, Vice President of Investor Relations. Sir, you may begin.

Thank you, and welcome to FTC Solar's Third Quarter 2025 Earnings Conference Call. Before today's call, you may have reviewed our earnings release and supplemental financial information, which were posted earlier today. If you have not reviewed these documents, they are available in the Investor Relations section of our website at ftcsolar.com. I am joined today by Yann Brandt, the company's President and Chief Executive Officer, Cathy Behnen, the company's Chief Financial Officer, and Patrick Cook, the company's Head of Capital Markets. Before we begin, I remind everyone that today's discussion contains forward-looking statements based on our assumptions and beliefs in the current environment and speaks only as of the current date. As such, these forward-looking statements include risks and uncertainties, and actual results and events could differ materially from our current expectations. Please refer to our press release and other SEC filings for more information on the specific risk factors. We assume no obligation to update such information except as required by law. As you would expect, we will discuss both GAAP and non-GAAP financial measures today. Please note that the earnings release issued this morning includes a full reconciliation of each non-GAAP financial measure to the nearest applicable GAAP measure. With that, I'll turn the call over to Yann.

Thanks, Bill, and good morning, everyone. I'm glad to be with you again to share the continued and exciting progress that FTC Solar is making to position the company as a leading single-axis tracker provider in the market. A path that continues to be clearer every day for us through the technology we bring to the market that is looking for additional competition. It was one year ago that I joined you for my first earnings call as CEO of FTC Solar. I'm pleased to say that over that year, the company has been on a recovery and growth trajectory, and our third quarter results represent a great mark of traction and continuation of that progress. Third quarter revenue and adjusted EBITDA both came in above the high end of our guidance ranges. Adjusted EBITDA was at the highest levels in five years and one of the best in company history. Compared to a year ago, third quarter revenue was up 160% and represents our highest quarterly revenue level in eight quarters. More importantly, we are continuing to improve our positioning, strengthen our balance sheet, improve our daily execution, and enhance our product innovation, resulting in faster speeds of installation for our customers. All of this while gaining traction with existing and key new customers. We remain on an impressive growth trajectory. 2026 is setting up nicely, and I see our long-term upside as even greater than I did a year ago or even just three months ago, especially as we continue to execute. On execution, we have been working to enhance all aspects of our daily operations, working to make the business better, stronger, and more resilient each day. We're continuing to optimize our global supply chain, including for geographic capability, flexibility around tariffs, and reducing landed costs. We're…

Thanks, Yann, and good morning, everyone. I'll provide some additional color on our third quarter performance and our outlook. Beginning with a discussion of the third quarter, revenue came in at $26 million, which is above the top end of our guidance range of $18 million to $24 million. The outperformance versus our expectation was largely driven by a pull forward of material production to meet customer demand that was originally expected in Q4. The quarterly revenue level represents an increase of 30% compared to the prior quarter and an increase of 157% compared to the year-earlier quarter, fueled by higher product volumes. GAAP gross profit was $1.6 million or 6.1% of revenue, compared to a gross loss of $3.9 million or 19.6% of revenue in the prior quarter. Non-GAAP gross profit was $2 million or 7.7% of revenue, marking the company's return to positive gross margin for the first time since late 2023. This turnaround was driven by the additional revenue I mentioned, which was at a higher margin. This quarter's results compared to a non-GAAP gross loss of $3.5 million in the prior quarter and $3.9 million in the year-ago quarter. GAAP operating expenses were $9.3 million. On a non-GAAP basis, operating expenses were $8 million. This compares to non-GAAP operating expenses of $8.1 million in the year-ago quarter and $500,000 in the prior quarter. Moving to GAAP net loss, as you may know, the warrants which were issued as part of our recent capital raise are subject to liability rather than equity accounting and therefore require us to reflect changes in the warrant fair value each quarter in our GAAP financials. Essentially, if our share price goes up during the quarter, it will show as a non-cash loss, and conversely, a share price decline would show as…

Thank you. Then wait for your name to be announced. To withdraw your question, please press 11 again. Our first question comes from the line of Philip Shen with ROTH Capital Partners. Your line is open. Philip, check to see if you're on mute.

Yes. Sorry, I was on mute. Congrats on the strong quarter. Congrats on the bookings as well. I was wondering if you could share a little bit more about the booking with Livona in terms of, and I know you gave a lot of detail already, but how much more could there be beyond even what you guys have shared? And then talk to us about the international bookings that might be coming and the other activity you're having with customers? Thanks.

Thanks, Phil. Appreciate the comment there. Look, I think Livona is indicative of a little bit of the type of clientele that we've been working hard on. You know, working on developments in the early stages and especially projects like this where it's a developer that has a tremendous track record in previous endeavors and now has several projects that we ultimately wrapped into this gigawatt MSA. You know? And I think just from a standpoint of the team at FTC Solar, and something that's akin to what we're working on with many developers is helping them maneuver the process. Right? You know, we have obviously, experience in project finance. You know, our core expertise in supply chain, and helping those projects get to close. So that's where we've been hard at work there. Obviously, there's a tremendous appetite for energy and generation coming from these solar developments. So sometimes it's just as you know, straightforward as getting the projects to the point of construction. And we have been investing in supporting folks like Lavona in early stages of design, where many of our peers won't. Right? They will wait for the project to get to RFP. But we'll spend time in design and helping them get the project to this standpoint, and that's borne good fruit. On the international front, we're, you know, I think we're quite optimistic. A couple quarters ago, obviously, we announced a 100-plus megawatt project in Australia that we've been working on. And we think that's a strong market. Australia in particular because of the labor constraints and the labor costs, an FTC Solar solution in that one case ended up being millions of dollars cheaper to install. And, you know, we're continuing that notion. Looking at additional markets where we might have a product solution, but always making sure that we have a value proposition. But, you know, ultimately, the tracker market really has a lot of customers that have this global portfolio. Right? It is not uncommon for me to spend time with a customer internationally that's working on a project in the US. Or a US customer that's acquiring a project internationally. So it is becoming quite a bit of a global supply chain. You know, both global on the procurement part, but also on the customer support portion of it.

Great. Thanks, Yann. And great job to you and the team for getting to gross margin positive and looking strong. So you've given a Q4 guide, but I was wondering to what degree could you give us some commentary on how you expect things to either margins or revenues to trend through '26 or through '26. I know you don't have an official guide, but insofar as you can give us some qualitative commentary or even quantitative, that would be fantastic. Thanks.

Yeah. No. I think, look. As I said in my prepared remarks, I'm very optimistic about where we're heading. Right? We're looking to take share of the overall 1P tracker market, obviously, coming into the space as the latest entrants focus, you know, with built on innovation and having a little bit of a different mousetrap for EPCs and IPPs to consider, especially EPCs that are looking at labor savings and schedule constraints. You know? So while quantitatively not much to give you on 2026, you know, I think it's fair to say at this point that we expect to be adjusted EBITDA positive for the full year in 2026. You know, I'm optimistic about where we'll be on both margins and revenues. You know, our focus has been on just execution day after day, I think the third quarter results speak to that. We hope to continue that trend. And when we have, you know, more guidance to give, we certainly will.

Okay. Thanks. Just to put a little bit here, Yann. Do you think you guys remain gross margin positive through Q1 and Q2?

Yeah. I don't think I'm going to leave it at where I think we'll be for the year. You know, thinking that it's fair to say that we'll be adjusted positive for the full year. As soon as we have definitive numbers to give for, you know, any period of time, Q1, Q2, we certainly will.

Okay. Great. Thanks, Yann, and I look forward to more good news ahead. Thanks.

Yeah. Appreciate it. Thanks, Phil.

Our next question comes from the line of Sameer Joshi with H.C. Wainwright. Your line is open.

Yeah. Good morning. Thanks for taking my call. Congrats on all the great progress. Just a couple of questions from me. The $37.5 million that was drawn down and the or rather the remaining that is expected to be drawn down, are there any plans to do that now that you have almost $25 million cash on hand? Nearing positive adjusted EBITDA?

You know, right now, we're focused on the business. Thank you for the question. Right now, we're focused on the business. You know, I think, you know, it's nice to have the facility. It certainly is helpful with customers that are looking at FTC Solar's balance sheet, you know, so that it's been helpful in the conversations to advance our commercial efforts this quarter. I think right now, we're continuing to focus on the blocking and tackling of, you know, getting our bookings in, you know, continuing to work on our execution, you know, just sort of the story that third quarter results tell, that certainly the trend line, but it's I would characterize it as it's nice to have the facility and, you know, the additional cash that we've been able to bring in at the end at the beginning of the quarter and, you know, we'll see how the execution goes from here.

Understood. A couple of quarters ago, you had announced a five-gigawatt five-year, sort of a master agreement. Are you seeing a sort of pull forward from that and maybe it may be completed in less than five years by Recurrent Energy?

Let me give the framing of all of our MSAs, which now stand at over 7.5 gigawatts, you know, these are the investments that we've been making and helping developments get to the, you know, get to the start of construction or notice to proceed. You know? And we expect many of which and some MSAs have started to roll projects into our bookings and revenue. So that's certainly nice to see. And, you know, it's an important tool for us because it is a, you know, it is a relationship between two parties. And it's not just as I said in my comments, you know, for good PR. It takes a lot of the back and forth in terms of the actual procurement contract and brings it to the forefront. Right? We know where we sit in terms of the relationship contractually. And it allows us to contract more quickly. But, fundamentally, you know, all business, especially the solar business, is built around relationships. You know? It's not hard to see that there's, you know, in most MSAs, it's built around, you know, people trusting people and, you know, the relationships that we've all collectively had at FTC Solar over the past couple of decades with other solar professionals. So we do, you know, there's a lot of enthusiasm, especially from my spot, on, you know, sort of burning off and leveraging those MSAs and bringing those gigawatts through. But also increasing the number of MSAs that we possibly enter into with others, you know, both people that we're currently looking, you know, talking to about it. And those that already have signed MSAs. And I will say because, you know, it's sort of a sideline on my comments, you know, not all MSAs have gigawatts attached to it. Right? It's the relationship can be non-volumetric, especially with EPCs. Because it does set this, you know, preferred vendor type of relationship where we know and have reviewed collectively what the terms and conditions would be of a purchase order. So we, you know, spending more time with, you know, top-tier EPCs, including EPCs that are really growing quite nicely in the solar space. There's such a need for, you know, with all of the labor constraints, there's also quite a bit of, you know, new EPCs that are growing, you know, significant volumes that we're spending time with. Bringing to our demonstration facility, etcetera. So we're quite bullish on the use of the MSAs. And see the customers really appreciate those as well. In some cases, even, you know, bringing projects into exclusivity under those MSAs. So it's all progressing quite nicely. In building the, you know, the mid-funnel that will ultimately lead to more backlog and bookings.

Thanks for that color. That was really helpful. May I squeeze one last one on working cash management accounts receivables, are substantially elevated. Does that mean part of the answer is, the answer that you gave is that responsible for this high AR?

Yeah. I'll let Cathy give a little bit of color. But just, you know, obviously, you know, if you kind of compare where we were and where we are, you know, having run manufacturing businesses in the past, there's always going to be a little bit of a linear relationship between, you know, the growth on the top line and, you know, the rest of the balance sheet, but I'll let Cathy give a little bit of color.

Thanks for the question. Yes. That is it really reflects kind of the increase in the active activity that we're seeing. And as our projects go through the production and execution phase, you'll see that, that timeline continues to grow with the growth in the revenue.

Understood. Thanks a lot, Cathy. Thanks for taking my questions.

You bet. Thanks, Sameer.

Thank you. Ladies and gentlemen, as a reminder to ask a question, our next question comes from the line of Jeff Osborne with TD. Thank you. Most of our questions have been asked, but just a couple of questions on the Alpha Steel joint venture. Did the historical ownership structure of that, Yann, impact any bookings? And potentially this now 100% owned by you, would that free up anything? Were any folks proactively or preventatively concerned about FIAC rules? Implementation?

Yeah. That's a good question, Jeff. It wasn't a, you know, over concern or question. You know, I think it was a good housekeeping for us. You know, it does create, you know, an additional lever for us in terms of operating of the site, especially, you know, as the company grows, you know, pushing the volume through Alpha Steel. But, you know, with the global supply chain, it's another tool for us. You know, obviously, we have a lot of contract manufacturing around the world for project-based both in the US and external. But certainly now, you know, it creates a 100% certainty for the market knowing that FTC Solar is the owner of Alpha Steel and, you know, sort of our domestic torque tube manufacturing, some of the ancillary parts and fasteners that we're looking to increase the capacity of Alpha Steel for, you know, will give us additional access to 45X credits, but, you know, also make it easier for folks around, you know, their project-level regulatory compliance, etcetera.

Got it. That's helpful. Maybe just two other quick ones. I might have missed it, but did you folks or Cathy disclose what the tariff impact is on the business, just given all that's going on with tariffs and then potential Supreme Court involvement there?

We did not. Most I think previously, we have talked about tariffs and contractually the pass-through to customers. You know? And I think the commentary I said on previous calls is, you know, tariffs do create pressure on project-level CapEx. Right? So if the cost increases back to the customer, you know, there needs to be some flexibility to the PPA. So we've certainly seen, you know, offtake agreements have to, you know, take a little bit longer to negotiate. You know, obviously, when the tariffs came into effect, we were a little bit smaller as the business in terms of volume. So we were able to maneuver pretty easily with our global supply chain. But, you know, so we've never disclosed the tariff number itself. You know, for the most part, really just a pass-through to the overall project supply chain.

Got it. And the last one I had is just, I think two of your three competitors have made significant M&A around piles, foundations, etcetera, trying to differentiate on different characteristics of terrain. Versus you folks are leaning into the installation time, 2,000 volts, etcetera. What's your thoughts as it relates to your competitiveness as it relates to difficult soils or frozen soils, rocky terrain, sloped terrain, etcetera?

Yeah. It's a great question. And, you know, just to kind of give a little bit of color, you know, obviously, you know, the tracker itself really comes into two parts, right, which is, you know, where we are, you know, as the tracker system itself and then the foundations as a separate. You know, for us, the thing where we're differentiated quite substantially is our top of pile loads are significantly less than all of our peers. And there's a couple of, you know, sort of structural reasons, but the way that our system is designed and built, you know, actually does come up at times where we are the better tracker for foundations that one of our peers may own. You know, for the most part, still available to, you know, still available to our customers. Most piles, the relationship between the foundation companies actually doesn't usually sit with the, you know, with the tracker vendor like ourselves. It sits with the end user themselves that are trying to find the right solutions. But there's, you know, there's quite a deep portfolio of foundation solutions in the market. You know, I certainly hope that our peers are, you know, recognize the advantages for their customers, you know, for that at times would want one of their solutions. And wouldn't, you know, sort of leverage that to their sole advantage. I think that would be bad for the way that customers would view their relationship overall. It really speaks to, you know? And I'm going a little bit off script here, but we need a healthy market dynamic. Right? And competition in the market is really inherently important. You know, I've always viewed the solar industry as such, and I made it in the comments is that the customers…

Perfect. Appreciate the detail.

You bet.

Thank you. I'm showing no further questions in the queue. Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect.