Q1 2021 FTC Solar Inc Earnings Call

[music].

Good day and thank you for standing by welcome to the FTC Solar first quarter 2021 earnings conference call at this time all participants in.

Listen only mode. After the speaker's presentation, there will be a question and answer session.

I ask a question during the session you will need to press star 1 on your telephone if you require any further assistance. Please press star zero.

I would now like to hand, the conference over to your speaker today Bill.

Michelle Investor Relations. Please.

Okay.

Thank you and welcome everyone to FTC solar his first quarterly earnings conference call as a public company. This being our first quarter of 2000.22021 report Pitre.

Today's call you've likely had the opportunity to review our earnings release and supplemental slide presentation. If you've not yet reviewed these documents are available on the Investor Relations section of our website at FTC solar Dot com.

I'm joined today by FTC solar as President and Chief Executive Officer, Tony at Myer, and Patrick Cooke, the company's Chief Financial Officer.

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

These forward looking statements include.

Risks and uncertainties and actual results and events could differ materially from our current expectations.

Refer to our press release, and our other SEC filings, including our registration statement on form S..1 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 GAAP non-GAAP financial measure to the nearest applicable GAAP measure. In addition, we will discuss our executed contract and awarded orders and our definitions for these metrics. This metric is also included in our S..1.

<unk> and press release.

Let me hand, it over to Tony.

Thanks, Bill good morning, everyone.

Thank you for joining our first conference call as a public company.

Becoming a publicly traded company is an important strategic milestone for FTC solar.

In the first quarter of 2021, we achieved $65.7 million in revenue.

Which was just more than double our performance in the first quarter of 2020.

Our differentiated product is compelling to our customers.

We're seeing that translate to continued growth in the business.

We secured our first sale of our Sun Pat software product.

After testing and validating the benefits of our software that client indicated they would consider adding some path to all of their projects with us.

We followed up that win with an additional project win in Q2.

Well, it's still very early in the launch this offering we are excited about its long term potential.

We believe the current market dynamics provide the opportunity to accelerate adoption of <unk>.

Is it directly improves project economics.

We were awarded 2 projects in Australia.

Kick starting what we expect will be additional international wins in 2021.

And finally, our executed contract and awarded orders have grown by 260% on a year to date basis through June <unk>.

With another 55 million added since our IPO.

Subtracting the amount included in reported first quarter revenue.

That brings our new balance to $326 million.

With $159 million remaining with expected delivery in 2021.

167 million currently expected to be delivered in 2022.

We're pleased with our IPO complete we've added $181 million to our balance sheet.

<unk> continue to be debt free.

This strong liquidity position allows us to pursue the many significant growth opportunities we see ahead.

And to continue our growth trajectory.

At the outset of this call let me make 1 thing very clear.

We fully intend to build a value creating business focused on maximizing long term shareholder returns.

Since this is our first earnings call.

As a brief overview of our company and why we believe we are positioned for long term growth.

FTC is a fast growing provider of tracker systems.

Software and engineering services to the solar industry.

As you know the solar industry continues to see significant growth.

As a part of multi decade fundamental transformation in the energy markets.

Solar is now 1 of the lowest if not the lowest cost source of new energy capacity.

This has led to a 49% annual growth in solar installations over the past decade.

With double digit growth forecasted to continue for the next 10 years.

And high single digit growth over the next 30 years.

It's a long runway.

On top of that the solar industry is also transitioning to trackers.

Solar trackers significantly increase the energy production at our solar installation and lower the level of <unk> cost of energy relative to the lower yielding fixed tilt alternatives.

As a result, an estimated 74% of new ground mounted solar energy projects in the U S. In 2020.

Elected to use trackers.

Internationally the transition to trackers is it even earlier growth stage.

Representing another significant opportunity for our company.

Our tracker solutions are a 2 module in portrait configuration.

That means 2 panels.

Portrait orientation on either side of his central <unk>.

We believe 2 in portrait trackers have several advantages versus wanting portrait.

Which has helped to grow at a faster relative rate within the tracker space.

These include higher design flexibility and panel density.

Better site sensibility.

An improved energy yield on bifacial panels.

These advantages are significant as the industry quickly transitioned to bi facial panels.

Due to their low incremental cost relative to benefit.

And it's difficult terrain and constrained for non standard sites.

Some more prevalent.

We believe our trackers offer additional unique advantages relative to competing offerings.

Including having fewer component parts to assemble.

Lower average steel content.

Less required wiring and 1 of the highest standard tolerances in the industry for difficult terrain.

And of note industry, leading installation speeds.

Which lead to lower labor costs.

Together with EPC savings on materials do our design methodologies.

Can result in 1 and a half to 2 cents per watt cost savings for customers.

On top of these hardware benefit.

The recently released Sunpass software product I highlighted earlier.

Optimizes energy production and what we believe is a differentiated and more effective way.

Enables customers to achieve up to a 6% increase in energy yield and a solar installation.

This can lead to millions of dollars in net incremental revenue for the customer.

Well I want us to participate in the incremental value as well.

High margin software product.

This unique value proposition of our products has led to rapid customer adoption.

And an annual revenue growth of 250% in 2020.

Making us we believe the leading to an portrait tracker provider in the United States.

On top of the newly strengthened balance sheet significant industry tailwind and a <unk>.

<unk> offering.

We believe we benefit from multiple drivers of future growth.

Including continued growth in the U S to increase wallet share with current customers.

As well as adding new customers.

International expansion.

Increasing our value per unit through software and new products.

As well as increasing our operating leverage from scale.

We believe we are well positioned for long term growth.

I'll now shift to the current environment.

As you've likely seen global increases in the cost of logistics and commodities, including key inputs to trackers and solar arrays have been significant and in some cases continued to accelerate.

This includes steel in solar module as well as shipping costs.

You've increased dramatically due to COVID-19 related disruption in the international supply chain.

Including port congestion.

Diminished container in vessel capacity.

Labor shortages and.

In other stresses on cargo infrastructure, each of which were exacerbated in Q1 and Q2, but the Suez Canal blockage.

Since our IPO steel pricing and increased 19%.

Standard freight indexes are up 18%.

Not including the premium freight charges that are <unk>.

Prevalent in the market today.

And solar modules are large input cost to our customers are also up 18%.

These factors are causing solar developers to take a closer look at unconstructed projects and to reevaluate their construction timelines and project economics.

Currently we have seen certain developers push out project timelines by a quarter or 2.

And we expect developers to continue this process of reevaluation as the environment evolves.

It's important to note the actions we're taking in this environment.

First regarding steel.

On pricing, we fix our steel input prices.

The entire project prior to.

Concurrent with or as soon as possible after signing a purchase order.

And we do not currently have any project contracts.

The steel is not also contracting.

And we're increasing pricing to our customers on new contracts to reflect the higher input costs.

On supply, we've recently expanded our supply chain.

<unk> contracted for the majority of our anticipated second half steel needs.

Regarding logistics.

She has been in some ways, an even greater challenge.

We've implemented innovative ways to reduce project logistics costs.

Third we continue to make progress implementing our cost reduction roadmap.

It is expected to yield results in the second half of this year.

This roadmap.

To procurement and volume manufacturing initiatives includes our design to value initiatives.

Identifies opportunities either reduce the materials needed to procure tracker systems or optimize the design to reduce manufacturing costs.

And fourth we have established a strong balance sheet.

In addition to having a debt free business.

We added an approximate $180 million as part of the IPO.

A significant ability to withstand market dislocation.

Finally, we see opportunity for revenue acceleration of our Sunpass software product as increased site production is even more important to project economics in today's environment.

This software it can significantly increase overall project profitability and.

And mitigate upfront cost increases helping us.

And our customers improve margin.

While commodities and logistics units are in the midst of a near term dislocation.

The tracker industry will continue to grow.

The need for higher yield who solar energy projects is more important than ever.

And the long term trends in solar are still firmly in place.

With many powerful growth drivers.

It's clear the trackers are the best mounting solution for the vast majority of projects.

And we're seeing no evidence of that changing.

In fact.

While we've seen some movement of unconstructed projects pushing out as mentioned.

Our overall project pipeline of FTC or the total amount of uncontrolled projects in.

<unk> energy market to which we have visibility at the potential sale opportunity has continued to grow.

That's reflective of the strong underlying trends related to solar energy and trackers.

As well as the development of our sales and support network in order to identify these opportunities.

So in summary.

Despite near term commodities and logistics disruptions I.

I believe we remain incredibly well positioned for long term growth.

We have unique and differentiated solutions, which are leading to rapid customer adoption.

We are well positioned.

A large and growing market with multiple growth drivers.

An asset light model.

And our newly strengthened balance sheet.

And we're seeing increased adoption of our Voyager tracker.

And software year.

Year over year.

With that I'll turn.

Turn it over to Patrick.

Thank you Tony and good morning, everyone.

Before turning to your questions I'll take a moment to provide some additional insights to our first quarter results as well as some color regarding our outlook for the remainder of the year.

First I should point out that our year over year comparison for the first quarter reflect a significant amount of growth in our personnel and corporate infrastructure that has taken place over the last year to support our growth trajectory as well as operational costs that were necessary in anticipation of becoming a public company.

And while we are confident that this investment was necessary and it sets us up well for future period. It does not make for a meeting particular meaningful comparisons.

Now now for first quarter 2021.

Total revenue was $65.7 million, which represents growth in excess of 100% versus the first quarter of 2020.

This includes a push of $800000 of revenue from the first quarter to the second as a result of Covid related supplier production delays.

Our gross gross GAAP profit came in at 119000, which was down approximately $7 million from the year ago quarter SUS year over year decline was primarily driven by strong ramp in head count and other overhead expense to support our growth that hits, our gross margin line.

In the year ago quarter. We also had some higher margin safe Harbor related sale that did not occur in the first quarter of this year.

This number was lower than our internal plans due to additional shipping and logistics costs that we were unable to be passed on to customers, which we discussed in our may 17th press release as well as some product enhancement related expenses that carried over from 2020.

The other thing I will note here is stock compensation expense GAAP gross profit includes approximately 66000 and stock compensation expense.

That expense has been excluded from our non-GAAP figures.

Operating expenses increased to $8.1 million compared to $4.1 million the year ago quarter also primarily reflecting growth in personnel and staffing and other public company preparations.

GAAP net loss non-GAAP net loss, which excludes a loss from a unconsolidated subsidiary as well as the impact of stock based compensation IPO related expenses consulting fees and other noncash items was $6.7 million. The unconsolidated subsidiary is a company called dimension energy.

Which is a community solar developer based in Atlanta, we.

We made an investment of approximately $4 million in 2018 and have so far received dividends of $2.1 million.

We record a share of their profitability proportionate with our ownership stake to our P&L.

Given us non coordinator door business and our inability to forecast its profits we back this out from our non-GAAP net income we do not expect to maintain this ownership over the long term.

GAAP net loss was $7.4 million, which included an approximately $800000 gain on the extinguishment of debt related to the PPP loan forgiveness.

Subsequent to the end of the quarter, we completed our initial public offering.

Proceeds to the company net of fees and expenses and after completion of the stock repurchase as described in our S..1 were approximately $181 million.

We believe that this strong net liquidity position and additional access to capital differentiates us in the marketplace gives customers and other stakeholders incremental confidence in our ability to invest in our growth and positions us to weather any short term uncertainties.

With that let's turn to outlook.

We continue to believe the second quarter will be the low point for the year from which we will grow.

As mentioned earlier, we are seeing developers push out projects, which will result in lower revenues and deliveries during the second quarter and much of this is already reflected in external expectations.

And in addition in order to mitigate the impact of shipping surcharges, 1 of our customers opted to receive materials in the third quarter instead of the second.

While we have reflected steel cost increases in our bids we have seen additional premium logistics costs be required to secure space on vessels and meet project timelines.

We're working with our customers to address these additional cost depending on the outcome of these discussions this could have a negative impact on our second quarter profitability.

Based on what we see today and accounting for that uncertainty in the second quarter. We currently expect revenue between 41 and $46 million non-GAAP operating expenses between $9.5 million and $10.5 million and non-GAAP net loss between 17, 3%.

$10.4 million.

As we look as we look to the remainder of the year, we feel good about the many factors under our control, including our cost reduction roadmap.

While the current environment with solar developers reviewing unconstructed project warrant some caution in terms of revenue timing between quarters and between 2021 and 2022.

Based on what we see today, we believe the third quarter revenue will grow meaningfully over the second and we will make progress towards profitability on a non-GAAP net income basis.

Fourth quarter revenue will continue to grow in a healthy manner with the expectation that we will achieve profitability on a non-GAAP net income basis.

As you would expect given our size the fast pace of our growth in the large size of several projects in our pipeline potential revenue moving between periods can have a considerable impact on a given period.

However, we continue to expect to grow faster than the market and remain excited about our positioning and encouraged by the continued progress expanding our pipeline and executed contracts and awarded orders.

With that brief review of financial matters that concludes our prepared remarks, and we will now turn the call over to the operator for Q&A operator.

Thank you as a reminder to ask a question you will need to press star 1 on your telephone so let's try question custom home key please standby, while we compile the Q&A roster.

Our first question comes from Michael Weinstein with Credit Suisse. Your line is now open.

Okay.

Okay.

Yeah.

If your line is muted please send me Mr Weinstein.

I'm, sorry about that so on mute got it hey.

Thanks for the question.

Hey, with the with second second quarter freight and shipping costs expected to be higher.

Or at least with a push out in that quarter excellence from at least 1 large customer in order to avoid.

With those types of costs.

What gives you confidence that this is still contained to this year in other words that you know you're not going to see continued push outs into next year.

Where that.

Freight costs will normalize.

Throughout 2 by the end of this year.

Thank you Michael I. Appreciate the question. This is Tony so as I mentioned in some of the actions that we're taking relative to the current market environment around logistics, what we've done is implement some.

Different shipping methodology for.

For which we have greater visibility and control.

Over the course of the second half of the year.

So.

That is that as in alternate shipping methods not relying on <unk>.

Container freight where we would could be surprised by those.

Those kinds of surcharges.

Got you.

And in terms of the developers that you're working with are they how.

How are they feeling about projects and project delays.

Due to the.

The current cost environment, 1 thing we've heard from larger large developers.

We talked to you at our conference a few weeks ago is that they are not delaying projects, but evidently.

Evidently you know at least there is a certain number of them obviously that are.

Just wondering what youre hearing.

Across across all your customers as you speak to them.

Sure.

Certainly can't speak for the entire developer community I can only speak to our experience and the discussions that we're having.

What we see is for our contracted and awarded projects, we're seeing those hold.

However, we have had conversations with certain developers and certainly not the breadth of the market, but certain developers who are electing where they have.

The ability to.

Mitigate.

D requirements and timelines, so hope projects a quarter or so and so I think it's the.

The way I'd characterize it is it's it is not a 100%.

Decision across the developer community is.

Specific projects, which may have specific financial challenges.

Those elections remain but as I said, our contracted and awarded portion remains.

Pretty consistent.

But it's basically just a quarter or 2 as to kind of thinking that youre seeing out there or not not longer than that so far.

That's correct.

Okay and just 1 last question how do you think about the Opex run rate as you go into the second half do you still expect higher costs for new products.

Such as higher high wind resistant trackers, when do you expect to reap benefits in that area.

So with respect to our cost roadmap, which is the main driver for the cost structure of the product.

As Patrick noted, we believe we're making good progress there we're confident in our ability to go drive that cost structure.

And the remarks, Patrick made around the third and fourth quarter are reflective of that that.

That structure benefit.

With respect to Opex costs alternates Patrick yeah, as it relates to Opex.

As we look to continue to build out our infrastructure, it's really going to follow the growth as.

As we've talked about we have a largely built out corporate infrastructure here in the U S and abroad as we continue to grow and expand.

We will look to lever leverage low cost countries.

In order to expand our employee base in order to keep opex down while continuing to support our customers and their growing needs.

Alright, so its really tied to growth gross and as long as you can manage the growth.

Within expectations.

You'll meet your targets for second half.

Yes.

Yes, that's fair.

Alright, Thank you very much I'll pass it along.

Thanks, Michael.

Thank you. Our next question comes from Mark announced with Raymond James Your line is now open.

Yeah.

Thanks for taking the question.

Part of the backend weighted for revenue ramp in the.

Current year was always the international dimension.

Of your sales mix.

Can you just give an update on the weighting of non U S. In your current revenue.

And what Youre anticipating in your kind of directional guidance for the second half of the year.

Thanks for that I appreciate the question.

Yes, you know as I noted in the in the first quarter, we did secure our first.

National projects those 2 projects in Australia.

And we're continuing to see pipeline improvements internationally.

In the growth.

And we expect to see some conversion of international projects in 2021.

With respect to that.

Final percentages.

Don't think we've had much change since that since the IPO on that outlook.

Patrick if you have any comments to make there no I mean, I think the way we look at kind of the international and U S markets.

Predominantly in 2021, the vast majority of our revenue.

It's going to come from the U S.

<unk>.

<unk> is an expected increased revenue towards the back half of the year and that that outlook has remained unchanged.

That's helpful. In addition to the cost escalation 1 of the other dynamics we've watched in the last.

60 days is 1 after another Asian countries in Indy.

Most notably, but Malaysia, and others as well are going back into lockdown to point now in some cases manufacturing is among the sectors that are disrupted.

And given your geographically diverse supply chain have you had any.

Component shortages or temporary dislocation because of.

Covid related restrictions in Asia Pacific.

As Patrick noted we did have in the first quarter.

A small shift in supplier output, which we.

Which would move some material deliveries out.

I think your point on the diversity of the supply chain is an important 1.

We've taken steps to make sure that we are regionally diverse and that each of those regions has sufficient.

<unk> second and third sources in it for us to be flexible.

And as you know in the steel Contra.

Contracting I discussed that also was done regionally to make sure that we have that diversity of supply going forward. So certainly we have a large scheme in India and our team is.

Is having to deal with the large second wave.

And as.

As our some of our suppliers in those regions.

A benefit of having that flexible supply chain is our ability to to manage that and to date, we haven't had and haven't had any significant issues to deal with with respect to supply right.

Right.

Thank you very much guys.

Thank you Bob.

Thank you. Our next question comes from Philip Shen with Roth Capital Partners. Your line is now open.

Hi, everyone and thank you for taking my questions.

The first 1 is on the outlook for these delays I know you already addressed it a bit but some of our checks with large developers suggest that it's not really.

About projects in 'twenty, 1 being delayed into 'twenty, 2 but rather.

Because the large projects are being contracted for today in 2014.

2022, C or D. There's risk for 2022 being pushed into 2023.

Are you seeing any of that at all in your conversations with.

Customers, where they're potentially pushing out some of the volume.

From 'twenty 2 into 'twenty 3.

Thanks for the question Phil appreciate it good talk to you again.

Yeah, I think as we noted it.

We're kind of seeing potential shifts of individual projects in that.

1 to 2 quarter range, which in our experience could push projects from 'twenty, 1 to 'twenty, 2 and 'twenty to 'twenty 3.

Given the tracker dynamic from a procurement standpoint.

We most of our focus now is in late stage 'twenty, 1 and 'twenty 2 projects in those conversations.

So.

We engage with customers will continue to to work with them on those timelines.

Thanks, Tony.

You talked about the.

The increased opex due to additional wind tunnel testing to expand your product offering.

Can you give us some insight into what those new products might be.

Sure Yeah. Thanks for the question.

Our base Voyager product.

Has nodes at 105 miles an hour or 120 miles an hour and 135 miles an hour the Voyager plus product, which we released and are installing now.

At a large site in the U S for large format modules also has those notes.

At 100, 520, and 135 and so that wind tunnel testing is all about the validation of that large format module project product.

All of those wind speeds.

And we are continuing to work on those higher wind regions.

To complement that portfolio.

Great. Thanks, and then in terms of the Australian projects awarded can you share the size of those projects how meaningful were they and then also as it relates to the awarded and executed projects. I think you had an incremental $280 million to your orders.

Is it possible to share what the mixes between awarded and executed.

Sure So from a Australia standpoint, those 2 projects were both single digit megawatt projects high single digit megawatt projects.

What's important for us in there is <unk>.

Getting our footprint in region in.

In each region is very important to have a proof point.

For us that's a very important.

<unk> points in in the Australia market.

And as it relates to our contracted and awarded projects, we're continuing to work with our customers for the ones that are not.

Not.

Award or not sign but awarded to.

To execute those contracts here in the very near term in accordance with the project delivery schedules and as Tony mentioned.

We see no delays in those projects towards the back half of the year.

Execution and contract will come commensurate with.

Customary project timelines.

Great. Okay. Thank you, both and I'll pass it on.

Thanks Bill.

Thank you. Our next question comes from jewelry Chileans.

Smith with <unk> Securities. Your line is now open.

Hey, good morning team thanks for the opportunity.

If I can follow up on the International Awards I think he meant I think you mentioned a couple of projects in Australia. Just can you elaborate a little bit more on on the additional wins that you alluded to in 'twenty, 1, but how do you think about the composition and just specific project awards potentially coming forward.

Think about the back half.

Sure. Thanks, Thanks for the question Julien So just to reiterate the award wins that we noted are predominantly United States.

Those first 2 wins in Australia represents.

The first international wins in 2021 for the business.

Those are clearly very important for us as a marker for growth.

And so as Patrick noted, we still expect in the second half the dominant portion of our revenue to be in the U S.

Wow continuing to make progress across a couple of regions internationally and I think the key point on that Julien as you know, we do have and deploy boots on the ground in Southeast Asia Sub Saharan Africa, Middle East North Africa, Australia, Latin America and Europe.

Are those the.

Sales leads have been on the ground for over a year now.

There's really been instrumental in helping us develop the pipeline over the last year and giving us the confidence in the conversion in the back half of the year for more international wins.

Got it alright fair enough and then if I can ask a little bit more of a higher level question on the cost cost roadmap as you see it I mean, how do you think about the inflationary pressures I mean, obviously the bulk of these are being passed through to customers, perhaps freight a little bit less transparently. So you've got some mitigating factors.

How do you think about the execution of the cost roadmap and that translating to sales as you start thinking about bidding in those.

Those those.

That cost roadmap into your back half in 'twenty 2 backlog. If you will should we start to see that acceleration take off in the back half of the year relative to your peers. If you think about it.

Yeah, Great Great question Julian So there we have a very rigorous cost roadmap process and so it's.

It's.

The aggregation of multiple individual projects with.

Detailed timelines resources and expectations for delivery of savings and so we're able to take that information and.

And before looking about.

About how that translates to the overall product cost.

Able to use that in our sales process.

As appropriate for for bidding.

I think that that structure is very important to to help us drive that visibility.

I think as we continue to.

Drive that cost roadmap, obviously it as.

Opportunity for margin improvement for our business as well as our.

<unk> ability to drive the value of the product in our sales strategy.

We believe that are the sale of the strategy of our product is not solely a ASP.

P driven.

Talked about the.

The additional construction cost reduction benefits of the product the yield enhancement benefits.

Sun, Pat and so we'll always look to present the product.

And its full value to the customer in the sales process and so.

Patrick noted, we expect to see sequential improvement in the second half from a revenue standpoint.

We believe that the aggregate of us continuing to gain traction in the business is continuing.

To demonstrate value to the customers.

Got it lastly, any further strategic thoughts are repositioning here I mean, you've got cash on the balance sheet et cetera.

Any elaboration.

I know it's a.

Recently, a crude here, but any initial thoughts.

Julian.

To speak of or share with you today I'd say, it's part of our ongoing process, we're always looking for.

<unk> to find ways to increase shareholder value through.

M&A or other other avenues.

We have a team in a rigorous process that we continue to look outward look and evaluate those opportunities as they come up.

However, as of today, we have no specific opportunities to speak up.

All right I'll leave it there. Thank you all best of luck.

Hey, Julien.

Thank you as a reminder to ask a question you will need to press star 1 on your telephone.

Our next question comes from Moses Sutton with Barclays. Your line is now open.

Hi, Congrats on the first quarter as a public company.

Looking at the comments in the press release is there a specific steel index, youre using or looking at or or benchmarking against I'm just looking at Bloomberg composite steel pricing deck. Then it's flat from April 30th IPO till now it went up and then retraced just trying to bridge that with the more the release, where you know 19% or 18.

Descent increase in steel.

Since the IPO.

Yes, because.

Thanks for the question because we are a procure steel from multiple regions.

We look at.

Steel pricing from those 3 main regions from India from the U S.

And from China, which is a good proxy for for our South East.

Southeast Asia business and so what we're looking at is the hot rolled coil export costs in each of those individual regions, it's representing net growth.

Increase.

That's very helpful. And then with the project backlog to 326 split almost evenly 'twenty, 1 and 'twenty 2.

Can you explain the.

It seems almost kind of counterintuitive, but that much to be in 2022, how much is 1 big order or where the large projects. Some of the delays that you've already been referring to maybe you could provide some color there on the split.

Yes, most of that I can answer that so in terms of the projected kind of a split in 2022.

There are several projects that it really gets broken out in 2 camps.

A couple of large projects that are slated to start construction in Q4.

Part of the revenue revenue will be recognized in Q4 with a continuation into 2022 now.

Now we do have a couple of discrete projects in 2020 that better in 2022.

On a standalone basis.

Made up of.

Some relatively large large projects, but it's a little bit of a mix between carryover from 2021 and discrete projects in 2022. Most of the revenue is tied to carryover from 2021.

Okay, that's very helpful and of the 150.90 167.

Can you provide percentages or maybe just the total.

But our final project contracts versus.

They are still open orders that you need to go through the contracting process.

So most of that as we've talked about.

Where we are with some of these projects. We do have certain timelines are project timelines, we do have the contracted assets as.

As it relates to some of the ones that are in Q3 and Q4, we will and are in current negotiations to exit those contracts in accordance with those.

Those delivery schedules and so that is the documentation portion that we're working through in order to take those back half of the year projects that are <unk>.

Currently sitting in the awarded bucket.

Got it got it that's very helpful and increasing pricing to new on those new contracts.

Can you give any directional amount you've already been able to pass through even if it's in a few cases, maybe on a cents per watt basis or any metrics that you think would sort of give us help here just trying to think through I know you gave comments overall in the business.

Profitability by <unk>, but just trying to get a sense on how to bridge. This on a margin basis.

Even a little bit more.

So I think most of this what I pointed to a couple of different initiatives that we took that gave us clarity.

We went out as Tony mentioned in.

Went to a steel procured steel for the majority of the back half of 'twenty.

<unk> 'twenty 'twenty, 1 and so that gives us clarity on our overall cost structure of steel through the back half as well as logistics and so we came up with and implemented an alternate or alternative solution that allows us better visibility and better control on our overall cost structure through the back half of the year as well.

Well.

And Ah.

Uncertainty environment.

Got it and just last 1.

Maybe just to clarify the last question a little bit.

Yeah.

Can you give maybe a directional amount on the percent that you've increased your price.

Yeah.

Well you know I think we are.

It's a customer by customer communication and conversation based on.

The long term relationships and pipeline of those customers and so it's.

I think it would be unfair to give 1 number is that.

That would be it's not consistent from customer to customer, but I would just say.

If you reflect on the.

The price increases that we noted.

In the market.

We are we're looking to make sure that we are.

Passing those through to customers to make sure that we're continuing to drive the profitability of the business.

Great Great very helpful. Congrats again.

I think most I appreciate it.

Thank you I'm not showing any further questions at this time I would now like to turn the call back over to management for closing remarks.

Thank you very much and thank you to everyone for joining us today and for your interest in FTC solar.

I'd like to extend a special thanks to all of our employees across the company for.

Through their hard work dedication and determination to helping us get to this point.

Thank you for rising to meet every challenge every day as we support our customers.

Work as 1 team to create value for our shareholders. Thank you very much.

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

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