FTC Solar (FTCI) 10 May 242024 Q1 Earnings call transcript

Good day, and thank you for standing by. Welcome to the FTC Solar First Quarter 2024 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Bill Michalek, Vice President, Investor Relations. ahead. go Please

welcome, Earnings and FTC First Solar's Thank Call. everyone, XXXX Conference Quarter you, to

Before may earlier call, financial today's you information, and earnings which supplemental release are posted today. have reviewed our

company's company's documents, Patrick and If you've Relations Commercial of Cathy the Chief of Ahmad company website our the are Cook, by the on ftcsolar.com. I'm today a the founder; section joined they Chief at Chatila, not and Investor available Board the Financial these Officer; reviewed member Officer. of Behnen, Directors

Before I statements and current begin, the and remind we the discussion everyone environment contains based beliefs that forward-looking speaks current assumptions of today's only as on our date. in

from risks uncertainties on refer statements as such, Please assume required by results and our to such forward-looking our As to press materially risk except SEC specific and no information current and more these obligation filings for update release expectations. and include We actual factors. other the differ events law. could information

As this GAAP you'd note release the financial applicable GAAP to earnings and that full the we today. issued both financial measure measures non-GAAP includes of each Please a nearest reconciliation non-GAAP will measure. morning expect, discuss

our definition included addition, we'll discuss this our backlog our metric is In also press of and in release.

I'll turn Ahmad. over that, the With to call

call. and Bill, last short good our Thanks, morning, since everyone. relatively It's a time been

One, in on fourth profitability be first continue will today to remarks two, with will on an continues brief. and perspective quarter. provided; and fairly crossing the results quarter to breakeven targets into financial being focus three, The the from that and were quarter growth are: we company our the So we future support takeaways initiatives the third key key adjusted EBITDA my advancing in-line basis in target profitability;

progress note we has briefly additional and progress. those some the made and review has issues some of recently, been that the Last the company that quarter, reviewed I'll faced

month an seen XX to or $XX company from early the been purchase how orders has discussed acceleration XXXX past has what million for signed per projects XXXX of we the months. First, in million and contracted month $X per about about

remain will revenue the sustained of the in we've second foundation that the and recovery bookings booking seen lays start for year. half the Our healthy success

laser-focused remain spending with of on them support the possible engagement robust time best effort customers a as to We cross-functional customer much as a roadmap. needs and range product full with in improve

our purchase enhance our recently for We and product Pioneer XP first our a awarded to also version wind continue order we tracker. of portfolio, high

awarded contracted to by and increased $XXX billion, million total $XX $X.X approximately with million contracted the Our projects of representing total.

normalized market more XP has we With with the for XP optimize XP a and strong customers. portfolio site it have and good technology-agnostic for we most date. was, truly activity. With where our we've along comprehensive to solutions, and each and project seen our the benefits XP module improved, availability with maximize Second, product be from for software, pipeline can improved tracker strongest individual to market

now we have examples technologies that in XP XP While combine several and pipeline. new XP, more our project of the are of most awards awards with

And the Customer and enhance Third, Score elevated our roll and needs cross-functional customer out future had we system on drive to satisfaction. Net remain with which and to business us feedback we measure roadmap and a to tenfold visits, Promoter continue product improve engagement increased help approach continue broad quality, to accelerate overall better processes. experience. loop

and expect those design costs and optimize to leading line to design further initiatives over bring further and the in in improve roadmap improvements ] Fourth, XX next continue to steel with continue of months. gross long-term sustainable enable to cost great our to strides reducing value cost higher margins. competitors, making our manufacturing our we After we continue to manufacturing [ content

the are scales. that enable greater margin new average in our than will level improvements XX% as project and strength the of these revenue future We our confident gross margin

our higher on has countries. direct by including greatly breakeven well labor as keen in and an overhead a driven and reduction as cost OpEx finally, adding incremental margins improved, focus costs, low-cost And

not Our to breakeven that how $XX Last per million a depending $XX been revenue now we we approximately million has well brought level historically over bonus. whether million to discussed have on quarter, down quarter. $XXX or pay we

million. adjusted on $XX very bookings, new have and are which breakeven us than U.S. margins been EBITDA achieve higher international Our enable to below healthy may

So initiatives. that's profitability on our the key latest

search, to disrupt As to and progress deliberate finding CEO initiatives. on the to approach our it in candidate relates not key wanting very the we been have right

focus an announcement on or with a have call earnings industry continue we significant expect on in to in next make knowledge, We interest. candidates I be we strong seen August. position and could our to before

good recovery. healthy in company the make progress summary, for in continue So positioning to we a

priority, expanding in portfolio and is strong the well to a engagement top portfolios. have industry customers' regarded continue we is healthy product see our optimize and can the and We Customer that project bookings.

and The improving and including our improving, board, trackers across processes XP we market pricing. systems are the for is

company cost product structure has in profitability reduced quarterly which long-term to XXXX. a have margins to We structure, enable cost enable gross XX%-plus been and

can the show the business improve, cash and profitability revenue potential As of levels through. flow

turn With over that, Cathy. to it I'll

both Beginning good prior to a XX.X% quarter compared and first at million, quarter, midpoint which of the in last XX.X% and the year revenue volumes. discussion logistics level of lower This our target everyone. our performance compared first decrease came at I'll outlook. our Ahmad, on product the range. was quarter and decrease provide of some the a additional represents $XX.X revenue quarter morning, of with on and to a Thanks, color

to end million or basis, $X.X positive prior $X.X of was in On gross X.X% loss quarter. of better a compared was or or quarter. profit of in prior or gross the gross GAAP revenue of million a of million our range. revenue a profit million X% XX.X% XX.X% to the non-GAAP $X.X compares higher target or $X.X towards This of gross revenue loss

much costs our revenue costs. as of enough not in remain are was X high indirect While and to level the our by quarter quarters improved, project margins the absorb the margin, positive first consecutive our represented healthy last

we margin to believe our upside level that continue have revenue when significant We recovers.

a Our credit our basis, that GAAP million operating were and expenses customer $XX.X On was provision excluding expenses other compensation a a not relating which operating stock-based included includes $X.X million. guidance account costs, non-GAAP million, $X.X certain ranges. to in specific loss were

found a growth. continuing to representing guidance operating the efficiencies million X $X.X $X.X invest in Excluding $X.X compared and across to been to of the quarter prior would this expenses end range support the $XX.X lowest at in than levels would some quarter. in as the million we have and million normalized normalized have the million our years ago better company more non-GAAP of charge, while our year That

an including GAAP $X.X share million a was quarter. midpoint was EBITDA or charge, $XX.X per million of the million from net million, $X.XX Adjusted loss quarter. $X.XX net and previously in other guidance prior our excludes the $XX.X the net in to the or on loss a loss quarter noncash losses $X.X Even was ago year $XX.X million an loss, $X.X of loss to adjusted stock-based compared and approximate in $X.XX range. or which expense items in per year the sold of compared prior benefit earn-out EBITDA compensation ago than better $XX.X million share per investment share million a $X.X million and less of quarter the

on the regarding Finally, we million ended liquidity, and sheet. restricted balance quarter with $XX the in cash cash

Our receivables $XX previously and the with second of we by We that million expect in cash. the million to we were quarter at $XX ended expecting end subsequent the quarter received the outstanding end X.Xx our on quarter, first the to about payment receivables in $X payables million the about end quarter. to currently of

We hold quarter. the million end ATM the debt to the and under the program remaining about of continue on at have $XX balance sheet no

don't QX in deposits to call, of With and not we the As plan previewed last it in utilize supplier on the those ATM QX, customer QX. managing actively did we payments. we or are similarly and utilize factors, all

portion $X.X Ahmad contracted billion, is backlog that $XXX and as million. Our mentioned, the is of

let outlook. our turn us the that, focus to With

between sequential growth slight XX.X% the expect call with for the quarter targets $XX.X of represent non-GAAP $X.X were X.X% million and Along between the we this quarter. second negative and million or million, would Revenue first $XX.X between revenue. gross following: million Our from $X.X the midpoint at level, and loss revenue which

million. As you might million adjusted million the and Non-GAAP levels. finally, varied operating $X.X lower and expenses these revenue greatly million $XX.X EBITDA $X.X percentage between $X.X ranges between loss and at expect,

quarter the with weighted continue expect the basis be to before We profitable EBITDA breakeven of the the year in being in adjusted on moving toward half quarter. fourth to second third squarely the approximately revenue an company

our I we operator conclude With prepared and the it over for questions. Operator? that, any to will remarks, turn

[Operator Instructions]

first our the to with from question going And of Philip line come is ROTH MKM. Shen

is back half. the one First on

breakeven profitability QX then about in hitting and QX. You talked in

to Asia relates projects risk tariffs? they you the degree get from by from hit a is new and might X it those there As need Southeast to that QX could AD/CVD that come that that. delayed the what challenges in and the To

you AD/CVD? you, give we on Patrick, see what the on a market can Thank color Phil. in

are to of Yes. doing and assessing the some playing. it's I assess impacts. early mean I think think potential holistically, Customers I too some scenario

fully around So projects focused working the been and But up sight the will modules, have better security clarity of modules. taken on say got been half the year and line I the and of they've of the have that hasn't getting we've them, we their really been it kind on with back or yet. in

no we those impact little for that so hope projects. And to

Great.

I you had bookings, $XXX saw -- bookings -- imagine, debookings of I to the Array Shoals of Can think about debooked, got million your about I terms I or bookings. $XX well million yesterday, number. million cancellations. a net U.S. Is In bookings getting of talked as it's think some $XXX

debooked had So high-voltage if lead some and in with I and the projects similar so interconnection forth. given equipment challenges queues AD/CVD, you've of time a out but beyond also way, was curious long any there

you some don't Thank you question color? why again. for give Cathy, this

significant we net are But out. -- not So don't are yes, pulled any really we had out. never so numbers, break that we but have we are giving booking -- contracts we

any done our not Sometimes we've drop small significant but out backlog. ones, of

question with will Our line of the Raymond come next Molchanov James. Pavel from

approaching of gross Let's assume? when you zoom kind QX what that does anticipate in on EBITDA margin breakeven,

is this Pavel, Ahmad.

It XX%, going Pavel. like to We think dig up be later, know think range. that around will I -- it's for but you me be that through. it let range, that Let that you and in can would be in XX%, something

with for EBITDA. QX of XX% Is that going kind that thing the have same you be And positive to number targeted?

will be it XX%. bit. It it think but will lower XX%, I be touch lower by I -- think a cannot I little might than

Okay. roadmap Geographic some protectionism. in mix, footprint you of the the to expand in terms the for continuing just of in your talked and risks America? Australia Latin about U.S. What's

I get Yes. Patrick that. answer will to

No. Yes.

So and seen thanks in we we South Africa, and -- of areas as for half back half of and question, for the are contribute we has but in America, and our Latin to the predominantly the that the expect the year. continue well business in the Europe overall year Australia, backlog grow the revenue pipeline Obviously, to been to back grow such our Pavel. U.S., as have and

And how international? backlog, of total billion much $X.X is the

Patrick?

the pipeline backlog, and flags a future portion domestic our out there, our haven't well. international. the majority and but grow backlog and footprint out we it in as as grown expect to the U.S., we versus the are we've growing of piece the broken planted Pavel, Obviously, Yes, in seeing team we been of is international that's the

with our next from going of to Joshi Sameer come is H.C. question Wainwright. And line the

XP a Just do are geographic not I XP there? on the know but have breakdown backlog. breakdown, versus the bit you giving little you

you of color. why don't backlog? the give little show we numbers well color don't Patrick, geographic, XP Give XP, exact as bit although some on a in

Yes.

expand of breakdown, we've Europe, say, was look of at and South recent to also U.S. then if the the what entered or it that if is are you as the backlog we've that in Australia, portions, geographic and you our kind we've sub look -- most And then able there. So I'd country have at majority -- continent pipeline and the that Africa the been

breakdown, As XP to of longer. XP we've kind X and had it relates the the

in as some lot of And our his going naturally, had ] it a they've and contracting Ahmad skew XP. bookings recovery But the So XP to excitement market. seeing we're tied seen around is that XP in the X we've to and constructability our award a of overall recently that the are our the just [ opening in said important towards remarks, market.

system. been So our more signed projects XP up the of with new have

On fixed quarters the XP, driven trying mix, gross several or produced are improving or control on is Understood. more the costs? of the some unit going geographic last your margins is being focus of you Or margin the forward, contribution towards path either and by over to kind each also lowering the a gross margin additional XP?

Yes.

me Ahmad. Thank This Let one. you, is this I'll take -- Sameer.

One So -- the logistics. from overhead overhead is majority cost But we in expand but unit that how so reduce control reduction services and field costs, the materials, manufacturing improvement of and and X comes costs, there's that the And vast forth. bill of to as like control it, margin expand ways. so like on to it. of gross value-added not the be careful volumes

And Great. us is? In of last a gain million disposal give question. $X.X one is it tell income us investment. then the you from just there Great. Can what statement, --

Cathy?

earned, had we We that at subsidiary point that. earnout previously as investment XXXX. in had in time. gets recognize that and And Yes. we an revenue earnout the of on a in an And that we disposed back

the from TD of comes Osborne with question Cowen. next Jeff line Our

was Just larger assume it's would half. the a ones. would wondering growth the developers? Any you smaller I helpful. couple that say with U.S., in or I you context of Ahmad, be those categorize the in could either second . developers, Patrick quick if

Jeff. you, Thank Ahmad. is This

growth. change give breakeven to color, color penetrating in X QX as some not And stock is, our developers. successful that's Tier the the in is being are think in price I just QX where it it will it with become the mean, you and as so that that's is smaller So something we yet on U.S. profitable we accounts. I in

That's helpful.

update Idaho overly bit think and Cat project Just maybe some going Creek back Patrick team reference X ago, but and specific, a the Italy was in months X, the some then I agri shut in photovoltaics like there were to and those just projects as a the I in in us agri on government you to is sector stand. was looking down I Spain. could PV specifically the Italy, potential wondering if And then think whole. where possibly

And there's that notable so that if a just was vertical, in the given sure I wasn't that, any backlog of prior... focus

can and material color you potential on business Creek. Europe, interesting that Cat give talk with Look, Spain is then I especially will expanding senior say I for and executives. Patrick Italian company. to would become about Jeff, going international, the So our not to adding the team very is us and

going So Cat we're don't nice you XX why in progress see And months. Patrick, color to Creek? give some on next the

Yes.

back here back into in of XXXX. the half with and kind seen, we of to on we're just relates some carry as and to start kind one yet term project, lot and Creek a really Cat going been there's it's it a other are that about that As that project. excited obviously, delays projects year it have into the the -- of of expect But small inherent short really the

Great. fire hour? miles do wind? you And rapid define ones. then or Is high other it just Ahmad, how XXX XXX an X

define as and XXX. I it XXX

is Got helpful. it. bias QX bonuses period? or And either That's accrued QX? pay for you a there to Or in have then

I'll get Cathy answer that. to

be would at bonuses not that either period time, QX. we have accrued but in do an we there anticipate No, pay to this point for in opportunity

the line Kashy of Sandler. Our next question comes from Piper with Harrison

give financing, is can permitting this high-voltage, remind definition panels. sense of critical fully So you on would then Could from what derisked a the you first backlog? proportion of a for equipment of just the you, perspective, backlog, say, a ones few me. contracted off, interconnection, us also And us

customers to they Just make the move that to with forward have these sure projects. what need trying

Patrick, right. All you why don't answer question? this

Yes.

the relates our IPO. as contracted changed since our awarded, to So backlog, and it haven't the we definition

. it filings as signed think and and well our we So as as LOIs encompasses in awards, out orders, well. purchase verbal that spelled I

As million financing today. But along out. of got sign laid who's order, -- But guiding that time the purchase it that with billion $X.X a that projects accordance sits project inverters. of relates out the are basis, worth in to have derisking, they've individual you signed $XXX get an moving kind of once on there we're not POs we to in

Jeff give -- And let a you color Kashy, sorry, Yes. well. me as

least And about want modules. the high chatter extent, being there's the in who someone an all a or back from and lead on them to with we large procured or to of voltage the yet not industry to times with already them a went able circle have on While through I we seen customers, And specifically, of talked and inventory either ship. that. a second lot equipment any with to projects impacted question. We to the First to prior those, module, half have have be projects. they at our is They going Solar have our

the second of So half the year. that's

you cannot impact from XXXX heard equipment. we the at But from not our time, the of second AD/CVD I in high-voltage year, and half the tell the anything moment what's or customers. now right about have of this

I'm and or And no hand showing like it any management further further to remarks. questions, for closing back I'd to

Bill?

look everyone, forward joining. thanks, quarter today. joining update for you and Well, to thanks an next giving Great. for We

conference concludes participating. you today's for call. This Thank

You now may disconnect.