Release Date: March 31, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- FTC Solar Inc (FTCI, Financial) has significantly increased its backlog, adding many multiples of its current annual revenue run rate.
- The company has signed long-term agreements with major players like Recurrent Energy, securing a five-year, five-gigawatt supply arrangement.
- FTC Solar Inc (FTCI) has strengthened its sales team with the appointment of industry veteran Ken James as Chief Commercial Officer for North America.
- The company has seen a significant increase in its bidding run rate, nearly doubling compared to the previous year.
- FTC Solar Inc (FTCI) is focusing on domestic content capabilities, expecting to have 100% domestic content available by Q3 of this year.
Negative Points
- FTC Solar Inc (FTCI) reported a GAAP gross loss of $3.8 million, representing 29.1% of revenue.
- The company's revenue decreased by 43.1% compared to the year-earlier quarter due to lower product volumes.
- FTC Solar Inc (FTCI) experienced a GAAP net loss of $12.2 million or $0.96 per diluted share.
- The company anticipates a non-GAAP gross loss between $4.8 million and $2.3 million for the first quarter.
- FTC Solar Inc (FTCI) expects the year to be back half-weighted, indicating potential challenges in achieving consistent growth throughout the year.
Q & A Highlights
Q: Can you provide details on the five gigawatt agreement with Recurrent Energy, including the mix of 1P versus 2P technology and the geographical focus?
A: Yann Brandt, President and CEO, explained that the agreement with Recurrent Energy involves both 1P and 2P technologies, with a geographical focus on the US, Europe, and Australia. The projects in the US and Europe are likely to commence first. The 1P technology will dominate, aligning with the current pipeline, which is 85-90% 1P. The decision to use 1P or 2P will depend on geographical and technical considerations.
Q: What is the revenue outlook for the upcoming quarters, and what factors could influence this trajectory?
A: Yann Brandt indicated that the year is expected to be back-half weighted, with significant growth anticipated in the second half. While Q1 is projected to see a 45% sequential increase, Q2 might be flat or slightly up, depending on project timelines. The focus remains on achieving EBITDA break-even by the year's end.
Q: Should we expect the momentum in bookings and agreements to continue in the first half of the year?
A: Yann Brandt confirmed that the company expects to maintain its momentum in securing agreements, aided by the recent appointment of Ken James as Chief Commercial Officer. The strategy involves focusing on value propositions for EPCs and partnering with IPPs for early-stage engineering, with a strong emphasis on converting early-stage agreements into actual projects.
Q: How does the 1P technology impact installation speed and cost, and what is the current pitch to partners?
A: Yann Brandt stated that the 1P technology offers a 30-40% faster installation process, which is crucial given that tracker installation accounts for over 60% of labor needs. The technology also allows for the use of lower-cost labor and enhances safety, making it attractive to EPCs. The company is focused on continuously improving installation efficiency and providing data to EPCs to optimize their processes.
Q: How should investors view FTC Solar's long-term gross margin potential, especially in light of recent agreements?
A: Yann Brandt noted that while FTC Solar's gross margins are currently competitive, they are expected to improve with increased volume. The company's differentiation lies in its Pioneer product, which offers automation-friendly features that could provide pricing leverage. Additionally, the SunPath software presents a significant opportunity to enhance margins by offering value to IPPs and EPCs.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
