Q1 2024 Array Technologies Inc Earnings Call

Operator: Greetings, and welcome to Array Technology's first quarter 2024 earnings score. At this time, all participants are in listen-only mode.

Greetings and welcome to <unk> Technologies' first quarter of 'twenty 'twenty four earnings call.

Operator: At this time, all participants are in listen only mode.

Operator: A question and answer session will follow the formal presentation.

Operator: As a reminder, this conference is being recorded.

Operator: The 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, Sarah Shepard, Investor Relations at Array. Please go ahead.

Operator: It is now my pleasure to introduce your host Sara Sheppard Investor Relations Asbury. He's go ahead.

Sarah Shepard: Thank you, and welcome to Array Technology's first quarter 2024 financial conference call. On the call with me today are Kevin Hostetler, our CEO, and Kurt Wood, our CFO. Today's call is being webcast from our investor relations site at ir.arraytechinc.com, including audio and slides. In addition, the press release detailing our quarterly results has been posted on the website. Today's discussion of financial results is presented on a non-GAAP financial basis unless otherwise specified. A reconciliation of GAAP to non-GAAP financial measures can be found on our website.

Sarah Shepard: Thank you and welcome to array technologies first quarter 'twenty 'twenty, four and financial conference call on the call with me today are Kevin Hostettler, our CEO and Kurt was our CFO.

Sarah Shepard: Today's call is being webcast from our Investor Relations site, IR Dot, Rachel H dot com, including audio and slides.

Sarah Shepard: In addition, the press release detailing our quarterly results have been posted on the website.

Sarah Shepard: Today's discussion of financial results as presented on a non-GAAP financial basis, unless otherwise specified.

Sarah Shepard: A reconciliation of GAAP to non-GAAP financial measures can be found on our website.

Sarah Shepard: We encourage you to visit our website at ArrayTechInc.com throughout the quarter for the most current information on the company, including information on financial conferences that we may be attending. 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 those made today. We refer you to the documents we filed with the FTC, including our most recent Form 10-K, for a discussion of risks that may affect our future results.

Sarah Shepard: Hershey depends on our web site at a Rage, Inc. Dot com throughout the quarter for the most current information on the company, including information on financial Congresses, I mean, maybe a penny.

Sarah Shepard: As a reminder, that we'd be we're discussing today include forward looking statements regarding market demand and supply are expected results and other matters.

Sarah Shepard: These forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially from famous break today.

Sarah Shepard: We refer you to the documents, we filed with the FTC, but her most recent Form 10-K for a discussion of risks that may affect our future results.

Sarah Shepard: Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievement. Furthermore, we are under no duty to update any of the forms of these statements to conform these statements to actual results.

Sarah Shepard: Although we believe that the expectations reflected the forward looking statements are reasonable we cannot guarantee future results.

Sarah Shepard: Have any performance or she minutes.

Sarah Shepard: We are under no duty to update any of the forward looking statements you can form your statements to actual results and.

Operator: And now I'll turn the call over to Kevin. Thank you, Sarah. Good afternoon, everyone.

Sarah Shepard: Now I'll turn the call over to Kevin.

Kevin: Thank you Sarah good afternoon, everyone.

Operator: We started 2024 off with the momentum we experienced in the fourth quarter of 2023, continuing into the new year. Beginning on slide three, I'll start with key highlights from our first quarter and some company-specific updates around our operational capabilities and product portfolio. We generated $153 million in revenue, slightly above the high end of the range we provided on our February earnings call.

Kevin: We started 2024 off with the momentum we experienced in the fourth quarter of 2023, continuing into the new year.

Operator: Beginning on slide three I'll start with key highlights from our first quarter.

Operator: Company specific updates around our operational capabilities and product portfolio.

Operator: We generated $153 million of revenue slightly above the high end, but.

Operator: The range, we provided on our February earnings call.

Operator: Adjusted gross margin came in at 38.3%, inclusive of a one-time $4 million benefit stemming from a successful resolution of a supplier quality adjustment. Excluding this one-time item, our adjusted gross margin was 35.7%, which was up 10 percentage points sequentially from the prior quarter and up nearly 9 percentage points from the first quarter of 2023. As a reminder, starting this quarter, we are reporting gross margins inclusive of the benefits derived from 45X, which to date only reflect the contribution from domestic content related to our business.

Operator: Adjusted gross margin came in at 38, 3% inclusive of a one time $4 million benefit stemming from the successful resolution of a supplier quality issue.

Operator: Excluding this one time item our adjusted gross margin was 35, 7%, which was up 10 percentage points sequentially from the prior quarter and up.

Operator: Nearly nine percentage points from the first quarter of 2023.

Operator: As a reminder, starting this quarter, we're reporting gross margins inclusive of the benefits derived from 45 deaths, which today only reflects the contribution from domestic content related to our tortured.

Operator: Having said that, our core adjusted gross margin, excluding 45x benefits, would have been in the mid-20s range for the quarter, which is consistent with our underlying long-term target. We delivered $26.2 million of adjusted EBITDA, representing 17.1% of revenue, inclusive of the $4 million benefit mentioned earlier. And we generated $45.1 million of free cash flow to end the quarter with a cash balance of $288 million. Total available liquidity was approximately $465 million, when including the capacity on our undrawn revolving credit facility.

Operator: Having said that our core adjusted gross margin, excluding 40 buybacks benefits would have been in the mid twenties range for the quarter, which is consistent with our underlying long term target.

Operator: We delivered $26 $2 million and adjusted EBITDA, representing 17, 1% of revenue inclusive of the $4 million benefit mentioned earlier, and we generated $45 $1 billion of free cash flow to end the quarter with a cash balance of 288 million.

Operator: Yeah.

Operator: Available liquidity was approximately $465 million when including the capacity on our undrawn revolving credit facility.

Operator: Moving to slide four, we continue to see broad demand across all market segments and customers. This includes EPCs, developers, independent power producers, and utilities across utility scale and distributed generation projects, both domestically and internationally. In Q1, we booked approximately $400 million of new business and experienced a book-to-bill ratio greater than 2.5 times to end the quarter with an order book of $2.1 billion. With this print, we have won $1.8 billion in new bookings cumulatively over the last four quarters.

Operator: Moving to slide four.

Operator: We continued to see broad demand across all market segments and customer types.

Operator: This includes D C developers independent power producers.

Operator: Chile across utility scale and distributed generation projects.

Operator: And international.

Operator: In Q1, we booked approximately $400 million of new business and experienced a book to bill ratio greater than two five times to end the quarter with an order book up to $1 billion.

Operator: With this we had $118 billion of new bookings cumulatively over the last four quarters.

Operator: The quality of our new bookings remains consistent with our historical profile and approximately 80% of our Q1 activity came from what we classify as tier one customers.

Operator: The quality of our new bookings remains consistent with our historical profile, and approximately 80% of our Q1 activity came from what we classify as Tier 1 customers. We have also seen success in gaining share of wallet from certain accounts that we strategically targeted over the last year. New orders received in the quarter were strong in both North America and the rest of the world, which highlights continued strong global demand for Array products and services, including our energy optimization software and severe weather mitigating solutions.

Operator: We have also seen success in gaining share of wallet from certain accounts, but we strategically targeted over the last year.

Operator: New orders received in the quarter were strong in both North America, and the rest of World, which highlights continued strong global demand for array products and services, including our energy optimization software and severe weather mitigated solutions.

Operator: As was the case in the second half of last year and discussed on our year-end call, customers continue to place orders for projects with more elongated timeframes for first deliveries than has historically been the case. As a result, our 12-month conversion rate of order book to revenue will be lower in 2024 than what we have experienced in prior years.

Operator: As was the case in the second half of last year and discussed on our year end call.

Operator: Customers continue to place orders for projects with more elongated timeframes for first deliveries.

Operator: Has historically been the case.

Operator: As a result, our 12 month conversion rate of order book to revenue will be lower in 2024, and what we have experienced in prior years.

Operator: This dynamic remains unchanged and is consistent with the commentary and guidance we provided on our year-end call. From an overall pipeline perspective, our pipeline of high-quality, high-probability opportunities has continued to grow. This highlights the demand for our portfolio of products and aligns with our expectation of robust, industry-wide growth for utility-scale solar. Solar continues to be one of the lowest cost options for satisfying the growing need for new energy generation capacity and replacement of aging energy generating assets.

Operator: This dynamic remains unchanged and is consistent with the commentary and guidance, we provided on our year end call.

Operator: Paul.

Operator: From an overall funnel perspective, our pipeline of high quality high probability opportunities has continued to grow.

Operator: This highlights the demand for our portfolio products and aligns with our expectation of a robust industry wide growth.

Operator: <unk> scaled solar.

Operator: Solar continues to be one of the lowest cost options for satisfying the growing need for new energy generation capacity and replacement of aging energy generating assets.

Operator: This growth is also, in part, attributable to the trend I mentioned earlier, where customers are developing and contracting projects further out in time than they may have in the past. During the quarter, we continued to have focused dialogue with our customers, and in many cases, asset owners, to ensure we have the appropriate voice of the customer represented across all aspects of our business. Throughout these conversations, customers reiterated that they are positive about both the trajectory of the industry and their individual business outlook.

Operator: This growth is also in part attributable to the trends I mentioned earlier, where customers are developing in contracting projects further out in time than they may have in the past.

Operator: During the quarter, we continued to have focus dialogue with our customers and in many cases the asset owners to ensure we have the appropriate voice of customer represented across all aspects of our business.

Operator: Throughout these conversations customers reiterated that they are positive on both the trajectory of the industry and their individual business outlooks.

Operator: By and large, customers continue to communicate they are seeing a softer first half of 2024 before seeing growth in the second half of the year. This is consistent with their prior communication and what we messaged and guided on our last call. The most common issues cited remain around permitting and interconnection, supply chain delays on long-lead-time equipment, and the timing of financing.

Operator: By and large customers continuing to communicate they are seeing a softer first half of 'twenty 'twenty four before seeing growth in the second half of the year.

Operator: This is consistent with their prior communication and what we got some interesting guided on our last call.

Operator: The most common issue side it remains around permitting and interconnection.

Operator: Supply chain delays on long lead time equipment and the timing of financing.

Operator: These issues continue to be broad-based across all segments and customer profiles, as we have discussed in the past. However, there are a handful of customers who are not seeing as much of an impact, and projects are moving ahead in a normalized manner. We are also closely monitoring recent developments related to the ADCBD petitions filed a few weeks ago. As you may have read in numerous media outlets, it is our stance that more duties will cause uncertainty and unnecessary project delays, holding the U.S. back in meeting our clean energy deployment and manufacturing goals.

Operator: These issues continued to be broad based across all segments and customer profile as we have discussed in the past.

Operator: But there are a handful of customers, we're not seeing as much of an impact and projects are moving ahead in a normalized manner.

Operator: We are also closely monitoring recent developments related to the a b C. D E petitions filed a few weeks ago.

Operator: As you may have read in numerous media outlets. It is our stance, but more duties will cause uncertainty.

Operator: Necessary project delays holding the U S back in meeting, our clean energy deployment and manufacturing goals.

Operator: One advantage of Array's offerings in this uncertain regulatory environment is the flexibility of our patented clamping solutions, which can be adapted to fit virtually any module type or manufacturer at any point in the design and or construction phase with minimal design change. This removes the need to complete expensive and time-consuming drilling or modification of the torque tube, providing the EPC and asset owners an immense amount of optionality.

Operator: One advantage of arrays offerings in this uncertain regulatory environment is the flexibility of our patented clamping solutions, which can be adapted to virtually any module type or manufacturer at any point in the design and work construction phase with minimal design changes.

Operator: This removes the need to complete expensive and time consuming drilling or modification of the tour to providing the EPC and asset owners.

Operator: Mens amount of Optionality.

Operator: This becomes even more beneficial during times of uncertainty around module selection or module availability. We will continue to support and work with our customers like we have for many years as they assess and work to minimize any potential impact to their business from the recently filed AD-CBD petition. In addition to our typical ongoing customer dialogue, we held a very productive customer summit at our office in Arizona earlier this year. This was part of a periodic program where we host diverse groups of industry participants at our offices around the globe.

Operator: This becomes even more beneficial during times of uncertainty around module selection or module availability.

Operator: We will continue to support and work with our customers like we have for many years as they assess it and work to minimize any potential impact to their business from the recently filed a b C. D D petitions.

Operator: In addition to our typical ongoing customer dialogue, we held a very productive customer summit at our office in Arizona earlier this year.

Operator: This was part of a periodic program memory hosts diverse groups of industry participants at our offices around the globe.

Operator: The summits cover a variety of topics, including a showcase of our technology, software, and LCOE benefits, discussions of current market dynamics, and candid feedback sessions on our products and services. The feedback received from our Q1 forum was overwhelmingly positive, and the event was a success across the board. Finally, I'd be remiss if I didn't take a few minutes to highlight some of the success we are seeing in Brazil. According to independent third-party data from ePowerBay, 7 of the top 10 and 13 of the top 20 most efficient solar power plants for 2023 in Brazil utilize array tracking technology.

Operator: So let's cover a variety of topics, including a showcase of our technology software and <unk> benefits.

Operator: Discussions on current market dynamics, and candid feedback sessions on our products and service levels. The feedback received from our Q1 form was overwhelmingly positive and the event was a success across the board.

Operator: Finally, I'd be remiss, if I didnt take a few minutes to highlight some of the success we are seeing in Brazil.

Operator: According to independent third party data from E power bag.

Operator: The top 10, and 13 of the top 20, most efficient solar power plants for 2023 in Brazil.

Operator: Array tracking technology.

Operator: The report cited the efficiency of projects using array trackers was as much as 2% higher than other projects using different tracker offerings. And, of course, the greater the energy production, the lower the levelized cost of energy, and the better the return on investment. We're very proud of this accomplishment, as it is truly a testament to the value of our technology, the breadth of our product and services portfolio, and, of course, our highly talented team in the region.

Operator: The report cited the efficiency of projects using a rate trackers sports as much as 2% higher than other projects using different tracker offerings.

Operator: Of course, the greater energy production, the lower the level of <unk> cost of energy and a better return on investment.

Operator: We're very proud of this accomplishment as it is truly a testament to the value of our technology.

Operator: Breath of our product and services portfolio and of course, our highly talented team in the region.

Operator: We're excited to continue our part in Brazil's clean energy movement, and we feel well-positioned with the latest version of our H-250 product, which incorporates valuable elements from our flagship Duratrax offering, including our patented articulated drive line. Our $2.1 billion order book already includes several bookings for this latest version of the H-250 in both Brazil and Europe, and we look forward to driving further value to our customers through our enhanced product features and capabilities. Turning to slide 5, we recently hosted U.S. Secretary of Energy Jennifer Granholm, Senators Heindrick, and Lujan.

Operator: We're excited to continue our part in Brazil's clean energy blueprint.

Operator: Well positioned with the latest version of our H 250 product, which incorporates valuable elements from our flagship <unk> offering, including our patented articulated driveline.

Operator: Our $2 $1 billion order book already includes several bookings for this latest version of the H 250 in both Brazil, and Europe, and we look forward to driving further value to our customers through our enhanced product features and capabilities.

Operator: Turning to slide five we recently hosted U S Secretary of energy, Jennifer Granholm Senators Heinrich and move on.

Operator: CEO-President Abby Hopper and many of our customers' employees at the groundbreaking of our new state-of-the-art manufacturing facility in Albuquerque. This facility will create good-paying New Mexico jobs, strengthen our low-carbon domestic supply chain, and boost American energy independence. We expect this facility to come online in the early 2026 time frame, although this facility is not required as part of our 45X strategy. It is part of our broader supply chain approach to reduce costs and lower enterprise risk around continuity of supply for certain key components.

Operator: Your president Abbvie Hopper and many of our customers employees and the groundbreaking of our new state of the art manufacturing facility in Albuquerque.

Operator: This facility will create good paying new Mexico jobs.

Operator: Strengthen our low carbon domestic supply chain and boost American energy independence.

Operator: We expect this facility to come online in the early 2026 timeframe.

Operator: While this facility is not required as part of our 45 X strategy. It is part of our broader supply chain approach to reduce costs and lower enterprise risk around continuity of supply for certain key components.

Operator: Moving on to slide six, we've introduced a few exciting hardware and software offerings this quarter. First, we officially launched our patented HALE Alert Response, which is a groundbreaking set of software features designed to autonomously protect solar assets from hail damage and is currently available and backward compatible for use on our Duratrac and Omnitrac systems. The Hail Alert Response System leverages advanced weather prediction algorithms to preemptively stow solar trackers before an anticipated hail event.

Operator: Moving on to slide six.

Operator: We've introduced a few exciting hardware and software offerings. This quarter first we officially launched our patented Halo alert response, which is a groundbreaking set of software features designed to appropriately protect solar assets from hail damage and is currently available and backward compatible for use on our dura attract and all.

Operator: Detract systems.

Operator: The Halo that response system Leverages advanced weather prediction algorithms to preemptively stove solar trackers before anticipated hail events.

Operator: This approach ensures that solar assets are safeguarded against potential damage, enhancing the longevity and durability of the investment. Some of these capabilities were unfortunately put to the test in a recent hailstorm that hit Fort Bend County in Texas, which resulted in some sites being subjected to three to four inch side pails. There were 8 sites with array trackers in the Fort Bend area, with 4 of these sites located within a 10-mile radius of the worst impact of the storm.

Operator: This approach ensures that solar assets are safeguarded against potential damage. It had seen the longevity and durability of the investments.

Operator: Some of these capabilities were unfortunately put to the test in a recent hailstorm that hit Fort Bend County in Texas.

Operator: Which resulted in some sites being subject to three to four inch size hail.

Operator: There were eight sites with a rate trackers and the fourth area with four of these sites located within a 10 mile radius of the worst impact at the store.

Operator: We confirmed that operators of those four sites successfully utilized our hail response capabilities to stow commissioned solar panels at the optimal 52-degree angle in advance of the storm reaching the site. We are happy to report our stowing solution worked as designed and was very effective across the board. According to our customers and evaluations performed by our customer support teams, the solar facilities with Array Trackers experienced insignificant damage.

Operator: We confirm the operators of those four sites successfully utilized our Haile response capabilities to store Commission solar panels at the optimal 52 degree angle in advance of the storm, reaching those sites.

Operator: We are happy to report our stomach solution worked as designed it was very effective across the board.

Operator: According to our customers and evaluations performed by our customer support teams the solar facilities.

Operator: With the rate trackers experienced insignificant damage.

Operator: This is obviously a strong proof point of the robustness of our severe weather mitigation capabilities, including the effectiveness of our hailstone angle, and it's another example of how we provide an attractive ROI for the asset owner and help mitigate risk. Turning to slide 7, we wanted to highlight the recent work we've completed to educate and promote market participants around the benefits of our patented passive windstoke technology. This work stems out of a dialogue we had with a customer.

Operator: There's obviously a strong proof point of the robustness of our severe weather mitigation capabilities, including the effectiveness of our hailstone angle and it's another example of how we provide an attractive ROI for the asset owner and helped mitigate risks.

Operator: Turning to slide seven we wanted to highlight the recent work we've completed to educate and promote market participants around the benefits of our patented passive Wednesday with technology.

Operator: During that discussion, the customer noted they had two similar sites in close proximity to one another. One site utilized an array tracker with our patented passive stone capabilities, and the other site utilized a competing tracker technology with active stone technology. Over time, the customer noted that the Array project consistently experienced better energy production, and the customer asked for our help in articulating why. Our engineering team developed an innovative solution to model and simulate passive and active wind stow algorithms to determine the resulting energy losses from stow events using high-resolution actual wind data. This model, which was verified by an independent report by DNB, We proved that passive stoke can have more energy generation compared to active stoke in medium to high wind regions.

Operator: This war extend out of the dialogue, we had with a customer.

Operator: During that discussion the customer noted they had two similar sites in close proximity of one another.

Operator: One site utilized in a rate tracker with our patented passive stone capabilities and the other site utilized a competing tracker technology with active stylus technology.

Operator: Over time, the customer noted that the array project consistently experienced better energy production and the customer asked for our help in articulating why.

Operator: Our engineering team developed an innovative solution to model and simulate passive and active wheatstone algorithms to determine the resulting energy losses from spell events using high resolution actual wind data.

Operator: With this model, which was verified by independent report by Dnb.

Operator: We approved a passive Stoke and have more energy generation compared to active stove in medium to high with regions.

Operator: Specifically, the study showed that the energy enhancement can be as much as 4.3% annually, depending upon location and wind base. This is a very significant data point. Let me articulate what this means to the overall economics using a hypothetical 200 megawatt site. Incremental energy production from our patented passive stoke facility operating in a high-wind zone would create a net present value as high as $10 million over a 30-year period. That is about half the entire cost of the tracker, or $0.05 per watt, and is a tremendous ROI benefit to the asset owner. On top of the enhanced energy yield, passive stow technology is a mechanical solution, meaning it is simple and fail-safe by design. ActiveScope systems, on the contrary, rely on software algorithms and external wind sensors.

Operator: Specifically the study showed that the energy enhancement can be as much as four 3% annually, depending up on location and win bigger.

Operator: This is a very significant data point.

Operator: Let me articulate what this means to the overall economics using a hypothetical 200 megawatt site.

Operator: The incremental energy production from our patented passive stope facility operating in a heightened zone with Curry, a net present value as high as $10 million over 30 year period.

Operator: It's about half the entire cost of a tracker or five cents per watt and that's it.

Operator: Tremendous ROI benefits to the acetone.

Operator: On top of the enhanced energy yield constant Stow technology, it's a mechanical solution, meaning it is simple and sales saved by design.

Operator: <unk> systems on the contrary rely on software algorithms and external incentives. This technology is easily trigger unnecessary stowing or potentially fail just throw it all in starting increased complexity and unnecessary risk for the assay.

Operator: This technology can easily trigger unnecessary stowing or potentially fail to stow at all, thus introducing increased complexity and unnecessary risk for the asset owner. We will continue to educate our customers, banking participants, and solar insurers on the inherent advantages and differentiation of our passive windstone technology. We have made a summary of this report publicly available and encourage you to go to the product features page within the products and services section of our website at ArrayTechInc.com to access it. Kurt will now provide additional color on the Q1-24 results and our 2024 outline. I'll then give some concluding remarks before opening the line for questions. Thank you, Kevin.

Operator: We will continue to educate our customers banking participants and solar insurers on the inherent advantages and differentiation of our passive winstar technology.

Operator: We have made a summary of this report publicly available and encourage you to go to the product features page within the products and services section of our website at array Tech Inc. Dot com to access.

Kurt: Kirk will now provide additional color on the Q1 'twenty results and our 2020 for outlook.

Kurt: I'll, then give some concluding remarks before opening the line for questions.

Kurt R. Wood: I would like to start off by providing some additional details around the first quarter results and ask that you turn your attention to slide 9. As Kevin mentioned, revenue came in slightly above the high end of our guidance range at $153 million, which was down 59% from Q1'23 and down 55% sequentially from the fourth quarter of 2023. Overall, we experienced declining volume in ASPs year over year in line with what we had communicated on our last call. Sales in North America represented 70% of our revenue for the quarter, with the remainder of our revenue coming from international locations.

Kurt: Thank you, Kevin I would like to start off by providing some additional details around our first quarter results and ask that you turn your attention to slide nine.

Kurt R. Wood: Kevin mentioned revenue came in slightly above the high end of our guidance range at $153 million, which was down 59% from Q1, 'twenty three and down 55% sequentially from the fourth quarter of 2023.

Kurt R. Wood: Overall, we experienced declining volume in asp's year over year in line with what we had communicated on our last call.

Kurt R. Wood: Sales in North America represented 70% of our revenue for the quarter with the remainder of our revenue coming from international locations.

Kurt R. Wood: Before moving to gross margin, I'd like to briefly speak to the deferred revenue on our balance sheet and note we saw the balance increase by $20 million in the quarter as customers made contractual deposits ahead of project deliveries scheduled for later this year. We expect our deferred revenue to increase again in the second quarter as additional deposits come due in advance of our second half ramp in revenue. We achieved first quarter adjusted growth margins of 38.3%, an expansion of over 11 percentage points year over year, which was inclusive of the $4 million one-time benefit to cost of goods sold Kevin mentioned earlier.

Speaker Change: Before moving to gross margin I'd like to briefly speak to the deferred revenue on our balance sheet and no. We saw the balance increased by $20 million in the quarter as customers made contractual deposits ahead of project deliveries scheduled for later this year.

Kurt R. Wood: We expect deferred revenue to increase again in the second quarter as additional deposits come do you advance of our second half ramp in revenues.

Kurt R. Wood: We achieved first quarter adjusted gross margin of 38, 3% an expansion of over 11 percentage points year over year, which was inclusive of a $4 million one time benefit to cost of goods sold Kevin mentioned earlier.

Kurt R. Wood: Excluding that one-time benefit, we saw first quarter adjusted growth margins expand by 880 basis points on a year-over-year basis to 35.7%, and by 10 percentage points sequentially versus Q4 of last year, inclusive of 45x benefits associated with our Quarter 2. Our ability to expand margins on lower volume is a testament to the considerable operational improvements we have made within the business. Operating expenses of $46.7 million were down approximately 7% from $50.1 million during the same period of the previous year and down 14%, or $7.3 million, from the fourth quarter of 2023.

Kurt R. Wood: Excluding that one time benefit it's all first quarter adjusted gross margins expand by 880 basis points on a year over year basis to 35, 7% and by 10 percentage points sequentially versus Q4 of last year.

Kurt R. Wood: Uses of 45 X benefits associated with our CT tube.

Kurt R. Wood: Our ability to expand margins on lower volume is a testament to the considerable operational improvements we have made within the business.

Kurt R. Wood: Operating expenses of $46 $7 million were down approximately 7% from $50 $1 million. During the same period of the previous year and down 14% or $7 $3 million from the fourth quarter of 2023.

Kurt R. Wood: This decline was driven by a year-over-year improvement in amortization expense relating to certain intangible assets from the STI acquisition and the non-recurring nature of several one-time items negatively impacting prior quarters. Adjusted EBITDA was $26.2 million when including the one-time $4 million benefit compared to adjusted EBITDA of $67 million during the first quarter of 2023. The gap net loss attributable to common shareholders was $11.3 million compared to a gap net income of $17.2 million during the same period in the prior year.

Kurt R. Wood: This decline was driven by a year over year improvement in amortization expense related to certain intangible assets from the STI acquisition and the nonrecurring nature of several onetime items negatively impact in prior quarters.

Kurt R. Wood: Adjusted EBITDA was $26 $2 million, when including the one time $4 million benefit compared to adjusted EBITDA of $67 million during the first quarter of 2023.

Kurt R. Wood: GAAP net loss attributable to common shareholders was $11 $23 million compared to a GAAP net income of $17 2 million during the same period in the prior year.

Kurt R. Wood: And basic and diluted loss per share was $0.07 compared to basic and diluted income per share of $0.11 during the same period in the prior year. Adjusted Net Income was $9 million compared to Adjusted Net Income of $39.6 million during the first quarter of 2023, and Adjusted Basic and Diluted Net Income per share was $0.06 compared to Adjusted Basic and Diluted Net Income per share of $0.26 during the prior year Finally, our free cash flow for the period was $45.1 million versus $41.9 million for the same period in the prior year, demonstrating our continued focus on cash generation.

Kurt R. Wood: Basic and diluted loss per share was <unk> seven.

Kurt R. Wood: The basic and diluted income per share of <unk> 11 during the same period in the prior year.

Kurt R. Wood: Adjusted net income was $9 million compared to adjusted net income of $39 $6 million during the first quarter 2023, and adjusted basic and diluted net income per share was six <unk>.

Kurt R. Wood: Compared to the adjusted and diluted net income per share of 26 cents during the prior year period.

Kurt R. Wood: Finally, our free cash flow for the period was $45 $1 million versus $41 9 million for the same period in the prior year.

Kurt R. Wood: Demonstrating our continued focus on cash generation.

Kurt R. Wood: Now we'd like to go to slide 10 and conclude by affirming no changes to our prior guidance for the full year 2024 at this time. As a recap, we previously guided full year revenue of $1.25 billion to $1.4 billion, adjusted gross margin in the low 30s percentage range, adjusted EBITDA of $285 billion to $315 billion, and adjusted EPS of $1 to $1.15. As communicated when we issued our 2024 guidance on the February call, our revenue profile is back half way.

Kurt R. Wood: Now we'd like to go to slide 10, and conclude by confirming no changes to our prior guidance for the full year 2024 at this time.

Kurt R. Wood: As a recap we previously guided full year revenue of one point to $5 billion to $1 $4 billion adjusted.

Kurt R. Wood: Adjusted gross margin in the low 30 percentage range and adjusted EBITDA of $285 billion to $315 million and adjusted EPS of $1 to $1 15.

Kurt R. Wood: As communicated when we issued our 2024 guidance on February call. Our revenue profile is back half loaded.

Kurt R. Wood: We expect Q2 revenues to grow sequentially from Q1 in the range of $225 million to $235 million and continue to expect sequential growth in both the third and fourth quarters, with the fourth quarter being the peak revenue for 2024. In regard to the recent AV-CBD petition that Kevin touched upon earlier, this does inject some uncertainty into the year. While customers are digesting the news and awaiting further details, we are hearing that some are starting to plan scenarios that could mitigate, in part or in whole, potential short-term risks to their business imposed by any new tariff. Part of those mitigation plans may include prioritizing projects designed with modules sourced from manufacturers that would potentially be subject to new tariffs ahead of other projects prior to any tariff going into effect.

Kurt R. Wood: We expect Q2 revenues to grow sequentially from Q1 to the range of 225 million to $235 million.

Kurt R. Wood: You need to expect sequential growth in both the third and fourth quarters with the fourth quarter being the peak revenue for 2024.

Kurt R. Wood: In regard to the recent ECB deep edition, thank Kevin touched upon earlier this does inject some uncertainty into the year.

Kurt R. Wood: While customers are digesting the news and awaiting further details we are hearing of some starting the planning scenarios that could mitigate in part or in whole potential short term risks in their business and close by any new tariffs.

Kurt R. Wood: Those mitigation plans may include prioritizing projects designed with modules sourced from manufacturers that could potentially be subject to new tariffs ahead of other projects prior to any tariffs going into effect.

Kurt R. Wood: Whether these plans get put into effect remains to be seen and is dependent on how the petitions around AD-CBD play out over the next few months. Given how recent this news is and the many unanswered questions around how the petition will ultimately play out, we are not in a position at the time of this call to quantify any impact on our full year of guidance, whether that be a potential risk or a net opportunity.

Kurt R. Wood: What are these plans get put into effect remains to be seen and it's dependent on how the petition around a D. C. B D play out over the next few months.

Kurt R. Wood: Given how recent just uses and there are many unanswered questions around how the petition will ultimately play out we are not in a position at the time of this call to quantify any impact to our full year guidance, whether that be a potential risk or in that opportunity. We will provide further updates on future earnings call. When we have clarity and if there was any material impact.

Kurt R. Wood: We will provide further updates on a future earnings call when we have clarity and if there is any material impact on our full year expectation. Now, I'll turn the call back over to Kevin for some closing remarks. Thank you, Kurt.

Kevin: For our full year expectations.

Kurt R. Wood: Now I'll turn the call back over to Kevin for some closing remarks.

Operator: We are very excited about the continued positive momentum in the business. During the quarter, we officially launched new features to our severe weather mitigation offering, including hail alert response, and we successfully rolled out the next generation of our H-250 product. We continue to see our portfolio of products well-received by our customers, as evidenced by approximately $400 million of new bookings in the quarter. And with a very healthy order book at $2.1 billion at the end of the quarter, which includes a meaningful amount of orders for 2025.

Kevin: Thank you Kurt.

Kevin: We're very excited about the continued positive momentum in the business during the quarter. We officially launched new features to our severe weather mitigation offering, including hail alert response, and we successfully rolled out the next generation of our H $2 50 product where you can.

Operator: Continue to see our portfolio of products well received by our customers as evidenced by approximately $400 million of new bookings in the quarter.

Operator: With a very healthy order book of $2 1 billion at the end of the quarter, which includes a meaningful amount of orders for 2025.

Operator: This gives us greater visibility into the next year than historically would be the case at this time of the year.

Operator: This gives us greater visibility into the next year than would be the case at this time of the year. We remain very excited about solar in general, and more importantly, for Array to capitalize on the industry growth with our diverse product and service portfolio. We will now open the call up for questions. Operator?

Operator: We remain very excited for solar in general and more importantly for array to capitalize on the industry growth with our diverse product and service portfolio.

Speaker Change: We will now open the call up for questions operator.

Operator: Thank you Sam.

Operator: Thank you, Sam. We will be conducting a question and answer session. If you would like to ask a question, please press star and then 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star and then 2 if you would like to remove your question from the queue.

Speaker Change: At this time, we will be conducting a question and answer session. If you would like to ask a question. Please press star and then one on your telephone keypad.

Operator: Confirmation tone will indicate your line is in the question queue.

Operator: You May press Star and then two if you would like to move your question from the queue.

Operator: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start button. Again, if you would like to ask a question, please press star and then 1. Please note that participants are limited to one question. The first question that we have comes from Mark Strouse of J.P. Morgan. Please go ahead. Great. Thank you very much for taking our questions. I wanted to start with your pricing strategy because I think there's been some concern with investors that you're lowering your pricing, and that might be kind of sacrificing margins.

Operator: Participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Operator: Again, if you'd like to ask a question. Please press star and then one now please.

Operator: Please note that participants on limited to one question.

Operator: The first question we have comes from Mark Strouse of Jpmorgan. Please go ahead.

Mark Wesley Strouse: Great. Thank you very much for taking our questions.

Operator: I wanted to start with your pricing strategy for.

Operator: Hum.

Operator: I think theres been some concern with investors that are you lowering your pricing that might be kind of sacrificing margins.

Operator: Obviously, you're reiterating your guidance for the year, but just kind of curious about your bookings for delivery in 2025 and beyond, are you still confirming kind of that mid to high 20s gross margin for the non 45X gross margin? Hi Mark. It's Kevin.

Mark Wesley Strouse: Obviously, you're reiterating your guidance for the year, but just kind of curious for for your bookings for delivery in 2025 and beyond.

Operator: Are you still confirming kind of that mid to high <unk> gross margin for the the the non 45 X gross margins.

Operator: Thanks for the question. Look, we're not ready to give 2025 guidance relative to margin at this point. I'll just reiterate that we've been very consistent in our messaging around our margins and our ability to hit those mid-20s margins over time. And we've done that not by... Our price reductions weren't as a result of sacrificing margin, which is really quite evident here in Q1.

Operator: Hi, Mark its Kevin. Thanks for the question look we're not ready to give 2025 guidance relative to margin at this point I'll just reiterate that we've been very consistent.

Operator: And our messaging around our margins and our ability to hit those mid twenty's margins overtime.

Operator: And we've done that not by.

Operator: Our price reductions as a result of sacrificing margin, which is really quite evident here in Q1.

Operator:

Operator: It's really about those structural cost reductions that we're keeping a piece of and passing a piece on to our customers. That's really what drove the increase and the momentum in market share recovery, as well as continued margins at the rate that we thought we would in the mid-20s. So we remain confident in our ability to do that as we go forward. However, we have yet to see how the market plays out relative to passing on 45x benefits. I think that's something we'll just have to wait for a few quarters to see how that transpires.

Operator: It was really about those structural cost reductions, but we're keeping a decent passing a piece onto our customers that's really what drove.

Operator: The increase in the momentum and market share recovery as well as continued margins at the rate that we thought we would at the mid 'twenty. So we remain confident in our ability to do that as we go forward, we have yet to see how the market plays out relative to passing on 45 X benefits.

Operator: I think that's something we'll just have to wait a few quarters to see how that transpires, but as far as this year, we reaffirmed our guidance in the low thirties overall gross margin inclusive of 45 X benefits and thus far we're continuing to see those mid twenty's margins without before buybacks benefits and we felt very comfortable in our strategy playing out.

Operator: But as far as this year, we've reaffirmed our guidance for the low 30s overall gross margin inclusive of 45x benefits. And thus far, we're continuing to see those mid-20s margins without the 45x benefits. So we feel very comfortable in our strategy playing out. And then this question might be somewhat difficult to answer. Maybe we could follow up offline, but, you know, just with the upside and downside of ADHDVD.

Speaker Change: Okay and then this this question might be somewhat difficult to answer.

Speaker Change: Maybe we could follow up offline.

Operator: You know just with the upside and downside with 80 CVD.

Operator: I know there's a lot of moving parts, but maybe can you talk about kind of what you saw two years ago with the early 2022 ADCBD investigation kind of puts and takes that you saw with your market share and how much of that do you think was driven by that ADCBD case? I think we were, look, we were a net benefit of ADCBD back in 2022. As you recall, we gained several points of market share that were really a result of our structure in the, as many of you on the call know, that with our torque tubes and our clamp solution, we do not pre-drill into the torque tube for spacing.

Operator: I I I know Theres, a lot of moving parts, but maybe can you talk about kind of what you saw two years ago with the early 2020 to 80 CVD investigation kind of.

Operator: Puts and takes that you saw with your market share and how much of that do you think was driven by that 80 CVD case.

Operator: I think we were look we were a net benefit of <unk> back in 2022 as you recall we gained.

Operator: Several points of market share, but we're really as a result of our structure.

Operator: As many of you on the call know that with our torque tubes, and our client solution, we do not pre drill into the torque tube for spacing. We have a very flexible system that allows us to withstand changes in modules are much later in the game all the way up into time of installation and I think that benefited us greatly last time.

Operator: We have a very flexible system that allows us to withstand changes in modules much later in the game, all the way up to the time of installation. And I think that benefited us greatly last time as our customers were changing modules, and frankly, throughout UFLPA, as our customers were changing modules readily just prior to installation. And our particular product configuration really allowed that and was very supportive of that. As it relates to this filing, we really just don't have a lot to say about it being too new.

Operator: As our customers, we're changing modules into <unk> throughout <unk> as our customers, we're changing modules readily.

Operator: Just prior to installation and our.

Operator: Our particular product configuration really allowed that and was very supportive of that as it relates to this filing look we really just don't have a lot to say that it's too new.

Operator: The filing hasn't been fully taken up yet, and we don't know what those results are, and we're certainly not in a position to understand in the first three weeks the impact on this year. So we're going to remain silent on that until you get further down the understanding of how this is going to be received by the federal government and what their approach to continuing either to continue the investigation or not, and then what ideas they have for potential tariffs and the impact of that market.

Operator: The filing hasn't been fully taken up yet and we don't know what those results are and we're not certainly not in a position yet to understand in the first three weeks the impact on this year. So we're going to remain silent on that until we get further down the understanding of how this is going to be received by the federal government and what their approach.

Operator: Two continuing either to continue the investigation or not and then what ideas they have for potential tariffs and the impact of that market. We're certainly in touch with our customers.

Operator: We're certainly in touch with our customers on that on a daily basis, just coming back from the ACP conference after several days, but again, there's not a clear understanding of the full impact of that on our marketplace, and I'd be remiss if I tried to get that. Fair enough. Thanks, Kevin.

Speaker Change: That day.

Operator: Daily basis, just coming back from the ACP conference after several days.

Operator: But again, there's not a set understanding of the full impact of that to our marketplace and I'd be remiss, if I'm trying to guess at this point.

Speaker Change: Fair enough thanks, Kevin.

Mark: This is mark.

Operator: Thank you. The next question we have is from Christian Cho of Barclays. Please go ahead.

Operator: Thank you. The next question we have is from Christine Cho of Barclays. Please go ahead.

Operator: Thank you for taking my call and my question. So just on the gross margin point, you know, if we back out this four million supplier settlement, gross margins were still thirty-five percent. You're guiding to the low 30s.

Christine Cho: Thank you for taking my call. My question. So just on the gross margin point you know if if we back out this 4 million supplier settlement on gross margins is still 35% you're guiding to low thirty's. So just as it pertains to <unk> was there anything else notable trying trading desk.

Kurt R. Wood: So just as it pertains to 1Q, was there anything else notable driving this quarter higher, like any sort of catch-up from 2023? And then with respect to the cadence of gross margins, should we think that it should be pretty consistent, you know, in the low 30 range for the remainder of the year? Or, you know, should we think that maybe it kind of slowly decreases from like one cue? Hey Christine, this is Kurt.

Kurt: Quarter higher like any sort of like catch up from 2023.

Kurt: And then with respect to the cadence of gross margins should we think that it should be pretty consistent you know in the low 30 range for the remainder of the year or you know should we think that maybe it is.

Kurt: Kind of decrease slightly decreases from like one Q.

Kurt R. Wood: Appreciate the question. You know, I think you clocked it right with the one-time benefit of the $4 million. That was about 2.6 percentage points of margin in the quarter. That was clearly a one-time item related to that settlement.

Kurt R. Wood: Hey, Christine this is Kurt and I. Appreciate the question I think you clocked it right with the onetime benefit of $4 million that was about two six percentage points of margin in the quarter that was clearly a one time item related to that settlement. So we didn't see your gross.

Kurt R. Wood: You know, we did see gross margins, obviously, each project will have a slightly different margin profile. But we did see a little bit more that benefited from 45X in this quarter. So, you know, that 35 and a half-ish that you referenced, that's about where we came in, but it did benefit a little bit more from a heavier weighting of 45X. We do think that, as we look through the remainder of the year, it'll be closer to the low 30s that we talked about.

Kurt R. Wood: Gross margins, obviously, each project will have a slightly different margin profile, we did see a little bit more of that benefited from 45 X in this quarter.

Kurt R. Wood: That 35, and a half ish that you you referenced that's about where we came in but it did benefit a little bit more on the heavier weighting of 45 X. We do think that as we look through the remainder of the yearly closer to the mid to low 30, that'd be talked about and we did mentioned on the last call that there is a certain amount of 45 X.

Kurt R. Wood: And we did mention on the last call that there is a certain amount of 45X call-up powder that we left in case there were some givebacks that we had to do. We won't be the first movers in that type of advantage, and that would obviously mean that we're assuming a little bit lower gross margin. You know, you're talking, you know, a couple hundred basis points in any direction in the quarter, you know, in the back half than what you're seeing in the first. I hope that answers your question. Yes, that was very helpful.

Kurt R. Wood: Call. It powder that we left in case there was some give backs that we had to do and we won't be the first movers in that type of an advantaged and that would obviously mean that we're assuming a little bit lower gross margin you're talking you know a couple of hundred basis points in any direction in the quarter.

Speaker Change: In the back half and what Youre seeing in the first half year I Hope I answered. Your question, Yes that was helpful and just my follow up you mentioned in your prepared remarks that deposits was positive this quarter and it you know it's positive for the first time in awhile has anything changed contractually on how you collect fees or is it just a function of your booking.

Kurt R. Wood: And just my follow-up, you mentioned in your prepared remarks that deposits were positive this quarter, and it, you know, is positive for the first time in a while. Has anything changed contractually on how you collect deposits, or is it just a function of your bookings this quarter being a lot larger than what exited your backlog versus last year? Not necessarily.

Kurt R. Wood: This quarter being a lot larger than what exited your backlog versus last year that necessarily.

Kurt R. Wood: Kevin mentioned in his prepared remarks that, and we mentioned this even in the call last time, that we are seeing a little bit more of a long, elongated timeframe from, you know, when we get the bookings to when the project will actually be shovel-ready. Obviously, from a developer standpoint or an EPC, they don't want to put cash down on a longer timeframe. That'll hurt their IRR.

Speaker Change: Kevin mentioned in his prepared remarks that and we've mentioned this even in our call last time that we are seeing a little bit more of a long long dated timeframe from when we get the bookings the London project will actually be shovel ready.

Kurt R. Wood: Obviously from a developer standpoint, or an E. P C.

Kurt R. Wood: They don't want to put cash down and no longer timeframe that will hurt their IRR. So what we're saying is we get bookings. The cash is really meant to be to compensate us for any at risk capital, we put to work to buy the inventory. So what we do expect is that there will be a little bit of a time lag between the booking itself.

Kurt R. Wood: So, what we're seeing as we get bookings, the cash is really meant to be to compensate us for any at-risk capital we put to work, you know, to buy the inventory. So, what we do expect is that there will be a little bit of a time lag between the booking itself and when the contract is signed, and ultimately when we get the deposit. What we typically try to do is align that deposit to when we get the actual inventory exposure on our end to mitigate that. Now, obviously, there are some cancellation penalties in there, but that doesn't require them to put any cash up front for us.

Kurt R. Wood: When the contract is signed to ultimately when we get the deposit we typically try to do is align that deposit so when we get the actual inventory exposure on our end to mitigate that no. Obviously, there's some cancellation penalties in there but that doesn't require them to put any cash upfront for us so that dynamic has changed.

Kurt R. Wood: So, that dynamic has changed a little bit over the last year as these timeframes have gotten elongated. But, you know, I think that's pretty consistent, which you'll see throughout the year. Thank you so much.

Kurt R. Wood: A little bit over the last year. These timeframes that got elongated.

Kurt R. Wood: But you know I think that's pretty consistent what you'll see throughout the industry.

Kurt R. Wood: Yeah.

Speaker Change: Thank you so.

Operator: Ladies and gentlemen, just a reminder, please note participants are limited to one question at a time. The next question we have comes from Brian Lee of Goldman Sachs. Please go ahead.

Speaker Change: Ladies and gentlemen, just a reminder, please note participants on limited to one question at any time.

Operator: The next question we have comes from Brian Lee of Goldman Sachs. Please go ahead.

Operator: Hey guys, good afternoon. Thanks for taking the time to answer the question. I'll try to keep it to one here. You know, Kevin, you mentioned in the guidance that you're reiterating the range for revenue. It's flat volume, which, you know, when you back into it, would imply that pricing is down somewhere between 10 to 20% year-on-year based on, you know, the guidance low-high. I know you don't want to get into 25 margins, but you have some bookings and a decent amount of backlog here now that you said gives you better visibility into the next year than you normally would have.

Brian K. Lee: Hey, guys. Good afternoon, thanks for taking the question.

Operator: I'll try to keep it to one here.

Operator: Yeah.

Operator: You know Kevin you mentioned on the guidance, you're reiterating the range for revenue.

Operator: It's flat volume, which you know when you back into it would imply like pricing is down somewhere between.

Operator: 20% year on year based on the guidance a little high.

Operator: I know you don't want get into 25 margins, but you have you know some boats.

Operator: Citizenship part of backlog here now that you said gives you better visibility into the next year than you normally would have so presumably.

Operator: So presumably... You know, you have a view on pricing. I think that 25 relative to the down 10 to 20 you're implying for 2024 is about an equal price decline year, better, worse, just trying to get a sense for what you're seeing in terms of price trends based on the early part of the year for bookings and backlog that you have right now. I think, Brian, it's really hard to impact that because, again, we're in a hyper-deflationary steel environment here in the very near term.

Operator: You have a view on pricing would you think that 25 relative to the down 10% to 20, you're implying for 2024.

Operator: About it oil price decline year, better or worse, just trying to get a sense for what youre seeing in terms of the pricing trends based on the early part of the year for bookings and backlog that you have right now.

Operator: Thank God I think Brian it's really hard to impact that because again, we're in a hyper deflationary steel environment here in the very near term. So when you think about that from us.

Operator: So when you think about that in terms of steel pricing, just even year-to-date steel prices, you know, down from the spot price of last week. The last time I looked, it was down circa 36%, so very significant. So it's really hard to translate that.

Operator: Steel pricing just even.

Operator: Year to date steels.

Operator: From the spot price of last week. The last time I looked was down circa 36%. So very significant so it's really hard to translate that and I don't think I'm ready to translate that into a margin view for you just yet.

Operator: And I don't think I'm ready to translate that into a margin view for you just yet. It'd be too premature to do that. So remember what we said in our last call, that of that pricing decline, and I certainly have an issue with your high end at 20%, it's not nearly that. Of the pricing decline, of what we're seeing now and what we're booking now. The disproportionate amount of that pricing decline is purely related to commodities.

Operator: Be too premature to do that so remember what we said on our last call that up that pricing decline and I certainly have issue with your high end at 20%, it's not nearly that of the pricing decline.

Operator: Of what we're seeing now and what we're booking now the disproportionate amount of that pricing decline is purely related to commodities.

Operator: And then there is a portion that is in the, you know, I would say low to mid-single digits that is our passing on of some of our cost savings to our customers, but the far disproportionate amount of ASP decline on a period over period is related purely to commodities, which again, our customers are very savvy and expect us to pass on those costs very effectively. I hope that helps. Yes, no, that's helpful. I'll take the rest offline.

Operator: Right.

Operator: And then there is a portion that is in the you know I would say low to mid single digits that is are passing on some of our cost savings to our customers, but the far disproportionate amount of ASP decline on a period over period is related purely to commodities, which again our customers are our various.

Speaker Change: Savi and expect us to pass on those costs very effectively so.

Speaker Change: Hopefully that helps.

Speaker Change: Yeah, No that's helpful I'll take the rest offline I appreciate it.

Speaker Change: Thanks, Brian.

Operator: I appreciate it. Thanks, Brian. Thank you. The next question we have comes from Joe Osha of Guggenheim Partners. Please go ahead. I thank you for taking my question. I'm wondering if we can have an update on the status of your clamps, the panel clamps in the 45X Saga. Has that ship sailed, or is there still a chance that we might see those be able to qualify? I think it's too early to tell.

Operator: Thank you. The next question we have comes from Joe Osha of Guggenheim Partners. Please go ahead.

Operator: We don't have the final information on that, but we continue to lobby for claims. And remember, we've been... consistent in saying that there are two different areas that clamps may fall under. One is under the structural fastener definition; that one certainly has a higher value under that. I think it's $2.28 per kilogram. The other one is structural fasteners under the definition of the structural steel element that they can be considered part of that torque tube and structure, which has a lower dollar amount but certainly can fit into that definition.

Joseph Amil Osha: Thank you for taking my question I'm wondering if we could have an update on the status of your clamps on the panel clamps in the 45 X Dogger has that ship sailed or is there still a chance that we might see those be able to qualify it. Thank you.

Operator: I think it's too early to tell.

Operator: We don't have the final information on that we continue to lobby for clients and remember we've been.

Operator: Consistent in saying that Theres two different areas that clamps may fall under one is under the structural faster definition that one.

Operator: Certainly a higher value to it under that I think it was $2 28 per kilogram and the other one is structural fasteners under our definition.

Operator: The structural steel element that it can be considered part of that towards proven structure, which has a lower dollar amount.

Operator: But certainly I can fit into that definition, we're still doing our part to continue to lobby.

Operator: We're still doing our part to continue to lobby and provide our backup for why we think clamps are a structural fastener. If they're not, we feel pretty comfortable that they'll at least be part of the other but less valuable piece of the thing. And look, we're still... You asked me when we think we're going to have clarity. I wish I knew.

Operator: And to provide our backup for why we think clamps or structural fasteners.

Operator: If they're not we felt pretty comfortable that they'll at least be part of the other less valuable piece.

Operator: And look we're still.

Operator: You asked me when do you think we're going to have clarity I wish I knew this is something that we continue to see get kicked the can down the road. We are expecting some form of additional domestic content guidance here in the next few weeks.

Operator: This is something that we continue to see get kicked down the road. We are expecting some form of additional domestic content guidance in the next few weeks, but we are left unsure of what all will be covered in that release. Thank you. And again, I'll take this opportunity, Joe, to remind everyone on the call that we have yet to put the value of structural fasteners into our guidance. Thank you. The next question we have comes from Jordan Everly of TRO Securities. Please go ahead. Afternoon, all.

Jordan Alexander Levy: But we are unsure.

Jordan Alexander Levy: Unsure of what all will be covered in that release.

Jordan Alexander Levy: Thank you.

Jordan Alexander Levy: And again.

Operator: I'll take this opportunity Joe to remind everyone on the call that we have yet to put the value of structural fasteners into our guidance for this year.

Operator: Yeah.

Jordan Alexander Levy: Thank you. The next question we have comes from Jordan heavily off trade Securities. Please go ahead.

Operator: Maybe you just want to see if you could provide us with an update after a nice bookings quarter again, how customers are reacting. Yeah, sure. So, let me let me unpack them a little bit differently.

Jordan Alexander Levy: Good afternoon Al maybe just wanted to see if you could provide us an update after a nice bookings quarter again, and how customers are reacting to kind of the price decreases to retract versus the rollout of agency <unk> as well as omni channel just the dynamics you're seeing there.

Operator: OmniTrack is starting to really gain traction, for no pun intended there. We're starting to see acceleration, and as we've discussed in the past, the large quantity of quotes, we're starting to see those now turn into orders, and we're very happy with the trend on that. What we're seeing in the Duratrac versus the F-250, at least internationally, the new version of the H-250 is doing really, really well and will very quickly become the dominant platform for international business, certainly in Spain and in Brazil, at least in those two regions.

Jordan Alexander Levy: Yes, sure. So let me, let me unpack that a little bit different the omni track is starting to really gain.

Operator: Traction for no pun intended there.

Operator: We're starting to see acceleration and as we've.

Operator: Discussed in the past, but the large quantity of quotes.

Operator: Turning to see those now turn into orders.

Operator: We're very happy with the trend on that what we're seeing in the dirt track versus the F 250 at least internationally.

Operator: Version of the H $2 50 is doing really really well and we're very quickly become the dominant platform for our international business, certainly in Spain and in Brazil at least in those two regions and then relative to the H 250 in the U S.

Operator: And then, relative to the H-250 in the U.S., look, it's not gaining any traction as the reduced price on Duratrac is just winning. What we look at is our win rate internally, and I can just say that we've been very pleased with, certainly, in the last, say, six months, our win rate just continuing to uptick with our revised pricing, and we think we've hit a really sweet spot of the value proposition of DuraTrac for our customers. And our win rate versus those lower-priced other offerings in the market, we're just really pleased at this point. This is Kurt.

Kurt: It's not getting any traction as the reduced price on dirt track is just.

Operator: Winning.

Kurt: What we look at is our win rate internally and I can just say that our win rate.

Operator: We've been very pleased in certainly in the last say six months of our win rates are continuing to uptick with our revised pricing and we think we've hit a really sweet spot of the value proposition of dirt track for our customers and our win rate versus those lower priced.

Kurt: Other offerings in the market. We're just really pleased at this point so.

Kurt R. Wood: The only thing I would add on the Omni track is that we've got multiple orders in our order book from that in all regions that we play in. So that's being well received, and as Kevin mentioned, right now, the Dura track is winning here in the States, and given the choice between an H250 or a Dura track, people will go for the higher quality product or the higher featured product, I should say, which is the Dura track. Totally makes sense; thank you.

Operator: Yeah, I think that's going to continue this is Craig the only thing I would add on the omni track is we've got multiple orders in the order book from that in all regions of our that we play it. So it is being well received and as Kevin mentioned right now the <unk> is winning here in the states and given the choice between and <unk>.

Speaker Change: We will go for.

Kurt R. Wood: The higher quality product or higher featured product I should say, it which is the jury trial.

Kurt R. Wood: Totally makes sense. Thank you.

Speaker Change: Thank you.

Operator: Thank you. The next question we have comes from Kashi Harrison of Piper Sandler. Please go ahead. Good afternoon.

Kurt R. Wood: The next question we have comes from Kashi Harrison of Piper Sandler. Please go ahead.

Operator: Thanks for taking the questions and congrats on Q1. Kevin, on slide four and in your prepared remarks, you mentioned that I think more than 80% of your customers are Tier 1 in nature. Can you also give us a sense of what proportion of your backlog has, you know, essentially fully de-risked the critical equipment permitting and interconnection? I understand that the backlog is over multiple years, but I'm just trying to get a sense of how, you know, de-risked the volumes that land in 25 or even 26.

Kasope Oladipo Harrison: Good afternoon, Thanks for taking the question and congrats on the Q1.

Operator: Kevin on slide four in your prepared remarks, you talked to you you mentioned that I think more than 80% of your customers are tier one in nature can you also give us a sense of what proportion of your your backlog has essentially fully be risks be critical equipment permitting and interconnection.

Operator: I understand that the backlog is over multiple years, but I'm just trying to get a sense of how you know.

Operator: Derisk B.

Operator: The volume of Atlanta, and 25 are already 26. Thank you.

Operator: Yeah, I think, Kashi, when we're putting something into our backlog, first of all, we have to be confident that we have a high confidence level, we have a start date, we've been awarded the order, and we have, over the last, say, 12 to 18 months, added several other criteria to that to get our confidence in this project going forward. So, we do look at the level of comfort in the financing, we look at the interconnection permit, and we recently, about maybe six months ago, started adding the surety of supply of the high-voltage components, you know, the breakers and things of that nature, so I don't know that I have data for you in terms of what percentage of that. I appreciate it.

Kevin: Yeah, I think Kashi when were putting something into our backlog.

Operator: First of all we have to be we are.

Operator: Have a high confidence level, we Havent started day, we've been awarded the order and we have over the last say 12 months.

Operator: 18 months added several other criteria in that.

Operator: To get to our confidence in this project going forward. So we do look at the level of comfort in the financing we look at interconnection permit and we've recently about maybe six months ago started adding.

Operator: Surety of supply of the high voltage components, the breakers and things of that nature.

Operator: I don't know that I have data for you in terms of what percentage of that I can only say, it's better today than it would've been six months ago, because we've added several other filters for it to get into our backlog.

Speaker Change: I appreciate it thank you.

Operator: Okay.

Operator: Thank you. Thank you. The next question we have is from Vikram Bagri of SETI. Please go ahead. Good afternoon, everyone.

Operator: Thank you. The next question we have is from Vic and battery of Citi. Please go ahead.

Operator: Kevin, in your prepared remarks, you mentioned that Array is strategically gaining share from or wallet share from some clients. I was wondering, like, what do you do differently with these clients, Juan? And besides these selected customers, do you believe you're gaining share overall in the market? And then, on a related note, I wanted to ask about pricing differently. Has there been any more pricing action on your part beyond what you did earlier in the year, either with the selected clients or overall? Thank you. So there is a lot to unpack there, Vikram.

Vikram Bagri: Good afternoon, everyone. Kevin in your prepared remarks, you mentioned that <unk> strategically getting share from our wallet share from them.

Operator: With some clients I was wondering like what do you do differently with these clients who won and beside the selected customers do you believe you're gaining share overall in the market.

Operator: And then on a related note I wanted to ask about pricing differently.

Operator: <unk> pricing action on your part beyond what you did earlier in the year either would be selected clients of the world. Thank you.

Operator: Yeah.

Vikram: So a lot to unpack there, but let me just say that what we're doing to gain share is first of all taking the analytical approach to our value proposition and ensuring that we've got the right product priced effectively for the market and then ensuring that our organization has been aligned to drive cost savings on a continual basis.

Operator: Let me just say that what we're doing to gain shares is, first of all, taking the analytical approach to our value proposition and ensuring that we've got the right product priced effectively for the market, and then ensuring that our organization has been aligned to drive cost savings on a continual basis that we can pass on to our customers. So that's really what's changed. It's been the clarity of the value proposition. And then the other thing has certainly been increasing my personal engagement in the marketplace.

Operator: So we could pass onto our customers. So that's really what's changed it's been clarity of value proposition and then the other thing it's been certainly increasing my personal engagement in the marketplace.

Operator: That's something that we've been doing a great deal of an engaging customers personally and sharing the value propositions with the customers and giving them a sense of the amount of innovation and new product that we have coming this year. We've done all of the above and I think the customers are responding quite well.

Operator: That's something that we've been doing a great deal of and engaging customers personally and sharing the value propositions with them and giving them a sense of the amount of innovation and new products that we have coming this year. We've done all of the above, and I think the customers are responding quite well.

Operator: We've engaged in activities such as having a customer forum here, 45 days ago, where we brought many customers in for a several-day event to give them a sense of that new product development funnel, the value proposition, the software improvements, all of those things. And I think the customers are paying attention to those things, and it's making a difference. The things such as the two that we highlighted here on the call about the automated hail response and the wind stove study are incredibly significant.

Operator: As we've engaged some such as having a customer forum here.

Operator: 45 days ago, what we brought many customers in for a several day event to give them a sense of that new product development funnel the value proposition the software improvements all of those things and I think the customers are paying attention to.

Operator: To those things and it's making a difference for things such as the two that we highlighted on the call of the automated Haile response and the wins dose study are incredibly significant when we could empirically show our customers in mid and high wind sites that we generate to three 4% more energy.

Operator: When we can empirically show our customers in mid and high wind sites that we generate 2%, 3%, 4% more energy every year for the life of that asset at 30 years, it's incredibly significant, and I think our customers are responding really well to it. We're not getting into a pricing war; that's certainly not happening at this point in the market. We're just being smarter and selective about those orders that we really want to win and pursue.

Operator: Every year for that life of that asset at 30 years, it's incredibly significant and I think our customers are responding really well to those space, we're not getting into a pricing war, that's certainly not happening.

Operator: At this point in the market, we're just being smarter and selective about those orders that we really want to women pursue.

Speaker Change: Thank you.

Operator: Okay.

Operator: Thank you. The next question we have comes from Jashod Elani of Jefferies. Please go ahead.

Operator: The next question we have comes from just Shonda <unk> from Jefferies. Please go ahead.

Operator: Alright, thank you for taking my question. I just had one on... DLM has talked about updating its western solar plant by 22 million acres. How do you see yourself positioned for that and any timing on that? I'm sorry, I couldn't hear. We have a bad connection. Can you repeat the question? Sure, can you hear me now?

Jashod Elani: Oh Hi, Thank you for taking my question I just had one on <unk>.

Operator: Oh.

Operator: PNM has talked about updating us less than some of the planned by 'twenty two moment acres, how do you see yourselves positioned for that and any timing on that as well.

Speaker Change: I'm, sorry, I couldn't hear you have a bad connection can you repeat the question.

Operator: Sure can you hear me now.

Operator: Yeah.

Operator: The question was, DLM has basically talked about updating its western solar plan by 22 million acres in the western states. Do you know, can you speak on the timing of that and how you see yourself positioning for that? Well, certainly, it'll really be up to our customers, those developers that will be out there positioning for that business, and then we'll certainly work with the IPPs, developers, and VPCs to take our fair share of that business. We're excited about it.

Speaker Change: And our next question was yeah. The question was the BLM is basically talked about updating its western solar plan by 22 million acres on the Western you know for the Western States do you know.

Operator: Oh I can speak on the timing of that and how you see yourself positioning for that.

Operator: Well, certainly it'll really be up to our customers. Both those developers that will be out there positioning for that business and that will certainly work with the ipp's developers.

Operator: Pcs to take our fair share of that we're excited about it I think it's a it's a very good move.

Operator: I think it's a very good move, and certainly we'll participate. But we'll do that through our customers, not directly. OK. Thank you. The next question we have comes from Philip Shen of Roth MKM. Please go ahead.

Philip Shen: And certainly we'll participate.

Philip Shen: So we will do that through our customers not directly.

Operator: Okay.

Philip Shen: Thank you.

Operator: The next question we have comes from Philip Shen of Roth Capital. Please go ahead.

Philip Shen: Hey, Kevin Kurt Thanks for taking my questions.

Operator: Thank you, Kevin, and Kurt. Thanks for taking my call. How do you expect Q2 and Q3 bookings to trend? pause or be impacted given the uncertainty around the world. CVD tariffs, and then separately, from a housekeeping standpoint, can you share what, International?

Philip Shen: How do you expect Q2, and Q3 bookings to trend have you seen activity took a pause or be impacted given the uncertainty around the new 80, CVD tariffs and then separately.

Philip Shen: From a housekeeping standpoint can you <unk>.

Philip Shen: Sure what the international versus U S mix was in the Q1 bookings. Thanks.

Operator: Yeah, Kevin, do you want to take the first part about the booking trend and then I'll take the... Yeah, I mean, we don't get quarterly booking trends, and I think it's... We've stayed away from that. We're comfortable with the current momentum in our business. And that's as far as I'll go with Q2 or Q3 bookings.

Philip Shen: Yeah, Kevin do you want to take the first part industrial looking trend and then I'll take the yeah. I mean, so we don't give quarterly booking trends and I think it's we've stayed away from that we're comfortable with the current momentum in our business.

Operator: And that's as far as I'll go with Q2 or Q3 bookings.

Operator: We've really tried to get the market off of a quarterly booking strategy to think about the long term of the year just due to the cyclicality, seasonality of the bookings, and the fits and stops that we've seen in this industry over the last several years. So from that standpoint, I'm going to stay away from predicting Q2 and Q3 bookings. I'll just say that the underlying momentum in our business is something we're pleased with to date. We haven't seen any significant change in that in the near term, but I will predict what may or may not happen quarters out. I'll let Kurt talk about the second part.

Kevin: We've really we've really tried to get the market off over quarterly bookings trend as you think about the long term of the year, just due to the cyclicality and seasonality of the bookings and the fits and starts that we've seen in this industry over the last several years, so from that standpoint, I'm going to stay away from predicting Q2, and Q3 bookings I'll just say that the <unk>.

Kurt: You're lying momentum in our business. We're pleased with to date, we haven't seen any significant change in that in the near term, but I will predict what may or may not happen quarters out I'll, let her talk about the second part, yes, and I'll just add to that.

Kurt R. Wood: Yeah, and I'll just add to that, Phil, as we go in and look at the booking trends, we've had historically where you have a low quarter and then you immediately go back with a high quarter, like we saw in Q4 with $600 million. That's why we try and shift away because what we're not going to do is make any type of price concession or anything just to hit a booking number by the end of the quarter. That's just not what we price here.

Kurt: So as we go in and look at the bookings trends. We've had historically, we had a low quarter than you immediately go back with them with a high quarter like we saw in Q4 with 600 million. That's why we try and shift away because what we're not going to do is do any type of price concession or anything just to get a booking number by the end of the quarter. That's just not what we would be price here from an international.

Kurt R. Wood: From an international standpoint, we haven't seen any kind of change from our historical revenue mix. It's pretty consistent with what it is. You know, I think, you know, from when we look at it, and our Q should be out right now that you get, that we'll look at from a competitive standpoint. We have seen in Brazil that it's a little bit more competitive than what we've seen in the past there. But we're still winning our share.

Kurt R. Wood: Standpoint, we haven't seen any kind of change from our historical revenue mix is pretty consistent with what that is I think from when we look at it and our Qs should be out right. Now that you get that you will look at from a competitive standpoint, we are seeing in Brazil, with a little bit more competitive than what we saw.

Kurt R. Wood: And in the past there.

Kurt R. Wood: But we're still winning our share our mix is the same as Kevin alluded to in his prepared remarks, our ability to perform and the track record that we have with the right technology and the energy yield from those fields have been phenomenal and that's certainly helping us in those markets those proof points.

Kurt R. Wood: Our mix is the same, and as Kevin alluded to in his prepared remarks, you know, our ability to perform and the track record that we have with the rate technology and the energy yield from those fields has been phenomenal, and that's certainly helping us in those markets. For example, I know we referenced in my remarks the full year results, but it's just getting better. In December, we had 16 of the top 20 solar sites in Brazil were erased.

Kurt R. Wood: Great. The first for example, I know we referenced in my remarks, the full year results, but it's just getting better in December we had 16 of the top 20 solar sites in Brazil, where our re sites and.

Kurt R. Wood: And that's significant and when you think about that data.

Kurt R. Wood: And you unpack it the difference in the top five and say numbers 16 through 20 is several percentage points worth of efficiency. So this is this is where we talk routinely about results, beating rhetoric and we loved that are third parties out there capturing those results and putting them out there for everyone to see it.

Kurt R. Wood: [inaudible] So this is where we've talked routinely about results beating rhetoric. And we love that a third party is out there capturing those results and putting them out there for everyone to see. It's really helping us win additional business down in that marketplace because it's actual results and statistically very significantly better than the competitors that we compete against in those markets. Thank you so much. The next question we have comes from Mahib Mandoli of Mizu Capital, in Mizu. Please go ahead. Hey, thank you. Yeah, Maheep Manlo here.

Maheep Mandloi: It's really helping us win additional business down in that marketplace cause its actual results and statistically very significantly better than the competitors that we have.

Maheep Mandloi: Compete against in those markets.

Maheep Mandloi: Thank you so.

Maheep Mandloi: The next question, we have comes from <unk> <unk> of Mizuho catheter.

Maheep Mandloi: Of Mizuho. Please go ahead.

Operator: Just a question on the international mix also. It looks like it's 75-25 U.S. to international. Should we expect something similar for the rest of the year? Just trying to get an understanding of the rest of your revenues, which might be exposed to ADCVD here. And secondly, on the margins on international trade, you talked about being competitive, looks like around 15% for the 10Q. Should we expect something similar going forward here, or any expectations of improvements? Yeah, a couple of things there. Regarding the mix, I think it's going to be fairly consistent.

Maheep Mandloi: Hey, Thank you Yeah Mohit Butler here are just a question on the international mix also it looks like it's 70 525 U S International.

Operator: Should we expect something similar for the rest of the just trying to get an understanding of.

Operator: The Uh huh.

Operator: The rest of your revenues, which might be exposed to a D. C. V. D. Here then on second part on the margins on international you talked about being comfortable it looks like around 15% for the 10-Q.

Operator: Do you expect something similar going forward here or any expressions of improvements there. Thanks.

Operator: Yeah, a couple of things there regarding the mix I think it is going to be fairly consistent and obviously can move around in any quarter, but we see that fairly consistent with what we're doing in the book, obviously in Brazil, and Spain are a little more bookings.

Kurt R. Wood: You know, it obviously can move around in any quarter, but we see that fairly consistent with what we're doing. In the book, obviously, in Brazil and Spain, there's a little more book and ship in that same quarter, because those markets work. As far as margins are concerned, you know, we mentioned a little bit earlier in the Q&A that there was a little bit more locally sourced supply coming into Brazil and Spain, in particular versus some of the lower cost regions where we can source supply.

Kurt R. Wood: Book and ship in that same quarter, how those markets work.

Kurt R. Wood: Far as margins.

Kurt R. Wood: We mentioned a little bit earlier in the Q&A, if there was a little bit more locally sourced supply coming into <unk>.

Kurt R. Wood: Brazil, and Spain in particular versus some of the lower cost regions, where we can source supply we did that to accelerate some time scheduled with some customers we think.

Kurt R. Wood: We did that to accelerate some time schedules with some customers. We think, you know, margins will improve in the second half here in those regions with what we've already kind of sourced and have coming in. But as you know, we've got to burn through the inventory that we have burned and secured for those projects. So I think you can see, you know, the Q2 kind of similar range. And then you'll see that starting to lift in the second half. Thank you all. Take the rest off.

Kurt R. Wood: The margins will improve in the second half year.

Kurt R. Wood: Regions with what we've already kind of source and have coming in but as you know we got to burn through the inventory that we burn and secured for those projects. So I think you can see that the Q2 guide that similar range and then you'll see that starting to lift in the second half.

Speaker Change: All right. Thank you I'll take the rest offline.

Speaker Change: Thank you.

Kurt R. Wood: Okay.

Kurt R. Wood: Okay.

Operator: Thank you. The next question we have comes from Donovan Schafer of Northland Capital Markets, please go ahead. Hey guys, thanks for taking the questions. So, first I want to ask, someone else earlier in the Q&A asked about, you know, the H250 tracker, and Kevin, I think you commented that actually the new design, it seems to be, you seem to be suggesting, you know, it's not that it's doing so great in the U.S. because Duratrac is doing so well with the cost down structure, but that the new, but that the redesign on the H250 that was actually done with the intention of making it more attractive in the U.S. market, that that is driving incremental interest internationally, that there's more, now that you've got the driveline between the two rows, it's kind of this rotating shaft instead of the pendulum swing thing that causes. Is that correct? Am I understanding that correctly? Okay. Yeah, that's correct. The enhancements that we made initially targeting in the US market, we frankly weren't going to launch internationally for a much longer period of time.

Kurt R. Wood: The next question, we have comes from Donovan Schafer of Northland Capital markets. Please go ahead.

Speaker Change: Hey, guys. Thanks for taking the questions. So first I want to ask someone else earlier in the Q&A asked about you know the H 250 tracker and.

Operator: Kevin I think you commented that that actually the new design.

Operator: Hum.

Donovan Due Schafer: Seems to be you seem to be suggesting that you know, it's it's not but it's doing so great in the U S. Because eurotrack is doing so well with the cost down structure.

Operator: But is that the new but that the redesign on the institutions do that was actually done with the intention of making a more attractive in this market that is driving incremental interest internationally that theres more now.

Operator: Now that you've got the the the driveline between two rows is kind of just wrote it rotating shafts instead of the pendulum swing thing that caused you know is that correct am I understanding that correctly.

Operator: Yeah, that's correct and the enhancements that we've made initially targeting in the U S market, we frankly weren't going to launch internationally for a much longer period of time.

Operator: Then, not only did we do product enhancements, but it was much more cost effective in the redesign. And this was about getting the FTI engineers working closely with the Array engineers and coming up with kind of some hybrid ideas for improving that product and reducing its cost. While that was originally targeted at a lower price point here in the U.S., you're absolutely right; the U.S. has still just migrated to increasing the purchases of Duratrac.

Operator: Not only did we do product enhancements, but it was much more cost effective in the redesign and this was about getting the FTAA engineers working closely with the array of engineers and coming up with kind of some hybrid ideas for improving that product and reducing its cost while that was originally targeted.

Operator: At a lower price point here in the U S. You're absolutely right. The U S is still just migrated to accelerating the purchases of <unk> and then what we saw happened very quickly as our international customers really wanted access to that product line. So we had to accelerate the international versions of that and I would say that's by and large the disproportion.

Operator: And then what we saw happen very quickly was our international customers really wanted access to that product line, so we had to accelerate the international versions of that. And I would say that's by and large a disproportionate amount of what we're booking now in our international business. Now, again, that'll be for delivery several quarters out, is really predicated on that new platform, both in Spain and Brazil. So that platform is being well received. Okay, and then that's interesting.

Operator: That amount of what we're booking now.

Operator: Our international business now again that will be for delivery several quarters out.

Operator: Its really predicated on that new platform, both in Spain and Brazil.

Operator: So that platform is being well received.

Operator: And then following up, for kind of still sticking with international, you know, there was the press release, the announcement, kind of a partnership with a Saudi Arabian company, I think it's called, I think the name is an aluminum company, but it's, I believe it's their steel fabrication sort of subsidiary. And so that, you know, to go after that market and be able to bring in, you know, have them sold locally, and so forth. Saudi Arabia and significant portions, I think, of North Africa and maybe other parts of the Middle East can have such harsh weather conditions.

Operator: Okay and then.

Operator: That's interesting.

Operator: And then following up for kind of still sticking with international Yeah. There was the press release, the announcement kind of a partnership with a Saudi Arabian I think it's kind of like I think the name is an aluminum company, but it's a I believe it's their steel.

Operator: Fabrication sort of subsidiary.

Operator: And so that you know to go after that market and be able to bring in you have local locally sourcing and so forth.

Operator: Saudi Arabia and in significant portions I think of like North Africa than maybe other parts of the middle East.

Operator: Can have such harsh weather conditions.

Operator: And, you know, I remember someone once describing the Dura track as being built like a. So I'm curious. Does your, does that still, is that still the sense among market participants, does that give you an edge in places like that? Is there still a reputation or perception? I mean, you've taken costs out, so I don't know, maybe hypothetically, yeah, I can tell you made it not as strong.

Operator: And you know I remember someone once describing the at least the dirt track is being built like a tank.

Operator: So I'm curious.

Operator: Does your does that still is that still that sense. Among market participants does that give you an edge in places like that.

Operator: Is there still a.

Operator: Reputation or perception I mean, you've taken costs out. So I don't know you know maybe hypothetically I can tell you made it not as strong [laughter].

Operator: Great question. I just came back from a week in Dubai and Abu Dhabi meeting with several end-use customers as well as supply chain partners, and I'll give you a sense of what we're focused on there. So look, this is going to be a very quickly developing market, albeit a market at a slightly lower price point than we would enjoy here domestically, but both in Africa more broadly as well as the Middle East. I think it's going to be a huge market.

Speaker Change: Yeah, Great question I, just came back from a week over in Dubai and <unk>.

Operator: Darby meeting with several end use customers.

Operator: As well as our supply chain partners and I'll give you a sense of what we're focused on there. So look this is gonna be a a very quickly developing market.

Operator: Albeit the market at a slightly lower price point that we would enjoy here domestically, but both in.

Operator: More broadly in Africa, as well as the Middle East I think it's going to be a huge market. So a few takeaways from my visit so first our approach has consistently been to partner with suppliers in region for example in Saudi.

Operator: So, a few takeaways from my visit. So first, our approach has consistently been to partner with suppliers in the region, for example, in Saudi Arabia, that will allow us to be able to get beneficial pricing because of the amount of domestic content we'll have in those regions, and I think our supply chain team and our Middle Eastern team have done a great job lining that up and putting us in a position Where we met with several of the EPCs and developers, I would say my biggest takeaway And how welcome we are into the market. Look, the tone, quite honestly, was not only what took you so long, but thank God you're here. How do we get going together?

Operator: That will allow us to be able to get beneficial pricing because of the amount of domestic content. We will have in those regions and I think our supply chain team and our middle Eastern team have done a great job lining that up and putting us in a great position.

Operator: When we met with several of the EPC and developers I would say my biggest takeaway was how well known our brand was.

Operator: And how welcome we are into the market the tullow.

Operator: Quite honestly was not.

Operator: Not only what took you so long, but thank god, you're here, how do we get going together, so incredibly positive tone in that market.

Operator: So an incredibly positive tone in that market, and we're taking it very seriously. We're actively hiring resources in the region, and we are actively bidding on a lot of work in that region at this point. So it is gonna be a growth market. We'll talk more about it once we start really converting some of those inquiries into orders. A little premature now, but we're really excited about the market, and I'm spending some of my personal time there with some of the members of the senior leadership. All right, I'll take the rest of my questions offline, thanks. Got it. Thanks, Donovan.

Operator: And we're taking it very seriously we're actively hiring resources in region.

Operator: And we are actively bidding on a lot of work in that region. At this point. So it's gonna be a growth market, we'll talk more about it.

Operator: Once we start really converting some of those inquiries into orders a little premature now, but we're really excited about the market and some spending some of my personal time, there with some of the members of the senior leadership team.

Speaker Change: Alright, I'll take the rest of my questions offline. Thanks.

Tom: Got it thanks Tom.

Operator: The next question we have comes from Tom Curran, Offseaport Global Securities. Please go ahead. Hey guys, thanks for squeezing in here before the last call. Kevin or Kurt, could you give us an idea of, maybe just directionally, how total non-tracker revenue did sequentially in 1Q and then are the two of you working on a plan to eventually break out non-tracker revenue or maybe just provide some more disclosures related to it and, if so, is that something we could expect to see this year, 2024? I don't think you'll see it this year.

Operator: The next question we have comes from Tom Curran of Seaport Global Securities. Please go ahead.

Thomas Patrick Curran: Hey, guys. Thanks for squeezing me in here before last call Ken.

Operator: Kevin or Curt could you give us an idea of.

Operator: Maybe just just directionally, how total non tracker revenue did sequentially in <unk> and then.

Operator: Are the two of you working on a plan to eventually break out non tracker revenue or maybe just provide some more disclosures related to it and if so is that something we could expect.

Operator: To see in this year 2024.

Kurt R. Wood: We'll break it out when it becomes material enough to do that. We obviously saw some this quarter coming in, not material enough to disclose as part of our active strategy, and we will break it out when it's material, but it won't be in 2024. Got it. Thanks for taking my question. You got the top.

Operator: I don't think you'll see it this year, we'll break it out when it becomes material enough to do that we obviously saw some this quarter coming in.

Kurt R. Wood: It's not material enough to disclose as part of our active strategy.

Kurt R. Wood: We won't break it out when it's material, but it won't be in 2024.

Speaker Change: Got it thanks for taking my question.

Speaker Change: You got to stop the next question.

Operator: The next question... The next question we have comes from Colin Rusch of Oppenheimer. Please go ahead. Thanks so much. You know, guys, you talked about the CLIP solution, and I know you've worked on different footing solutions. Can you give us a sense of how much efficiency you can get or give your customers from a labor perspective or a time to installation perspective?

Kurt R. Wood: The next question we have comes from Colin Rusch of Oppenheimer. Please go ahead.

Colin William Rusch: Thanks, So much guys you talked about the clip solution you know and I know you've worked on different putting solutions can you give us a sense of how much efficiency get or you can do with your customers on our labor.

Colin William Rusch: For perspective, or a timed installation perspective.

Colin William Rusch: With some of those solutions.

Operator: Okay.

Operator: Are you talking relative to our new clip on the first Solar Series 7 in particular? I'm talking about just in general; it seems like an area of competitive advantage and opportunity for you guys. [inaudible] So from that, we started several new product development initiatives in order to focus on speed of installation, ease of installation, several of them being better new enhanced clip design. Several of them have launched over the last six months, and several more that will be launching over the next six months.

Colin William Rusch: Are you you're talking relative to our new clip on the first solar series seven in particular.

Operator: Is that what I'm talking about just in general it seems like an area of competitive advantage and an opportunity for you guys to.

Operator: Pick up some market share and drive some value for how do you think we'll quantify it here, but suffice to say when when we came in and working with.

Operator: Terry who is our head of engineering.

Operator: Look it was one of those avenues one of our six pillars, we decided to focus on was ease of installation and speed of installation to reduce the overall installation costs of our customers. So from that we started several new product development initiatives in order to focus on speed of installation ease of installation several of that being.

Operator: Our new enhanced quip designs several of them launched over the last six months and several more that we'll be launching over the next six months.

Operator: So I can't quantify it other than telling you it's a huge focus of ours, and we've been working with several of our customers in validating those time studies of ease of installation, and I can just say that that's it's being well-received. I guess I would leave it at that. It's meaningful. Thanks so much.

Operator: So I can't quantify it other than telling you. It's a huge focus of ours and we've been working with several of our customers and validating those time studies, a decent ease of installation and I can just say that that's.

Operator: It's being well received I guess I would leave it at that it's meaningful.

Speaker Change: Thanks, so much guys.

Operator: Yeah.

Operator: Thank you. The next question we have comes from Andrew Percoco of Morgan Stanley. Please go ahead.

Speaker Change: Thank you.

Speaker Change: Next question, we have comes from Andrew Pet Cocoa of Morgan Stanley. Please go ahead.

Operator: Great, thanks so much for taking the time to answer the question. So I guess, and apologies if I'm belaboring something that's already been answered multiple times here, but my first question would just be on the pricing environment and what you're seeing from competitors, understanding that you've already dropped your price or planning to drop your price this year, and it's already embedded in your guidance, and you're not sacrificing margin at this point, but what are you seeing from your competitors in response to Is it a rational market, or is it an environment where pricing continues to get more fierce? So, look, this is an industry where price really matters. We've said that many times.

Andrew Salvatore Percoco: Alright. Thanks, so much for taking my question, So I guess and I apologize if I'm belaboring, something that's already been answered multiple times here, but my first question would just be on on the pricing environment and what you're seeing from competitors understanding that you already.

Operator: And between, certainly, the top few of us in the market, we can use price to take an order off each other on a routine basis if you choose to. So what you're seeing is still somewhat rational behavior, but I will tell you about our larger competitors, certainly some targeted price reductions that they're probably putting in place in order to either regain market share or to preserve one or two key orders that they had hoped to win historically. And that's really just nothing new. So I wouldn't say it's a changed behavior. It's more acute these days.

Operator: Dropped your price your planning is dropping your price this year and that's already embedded in your guidance and you're not sacrificing margin at this point, but what are you seeing from from your competitors and in response to what Youre getting on price are a rational market or is it an environment where pricing continues to get more here.

Operator: Yeah.

Operator: So look this is an industry that price really matters, we've said that many times.

Operator: And between certainly the top few of us in the market, we can use price to take an order off each other.

Operator: On a routine basis, if you choose to so what youre, saying is still somewhat rational behavior, but I will tell you of our larger competitors.

Operator: Certainly some targeted price reductions, but maybe that they're putting in place in order to either regain market share or to preserve one or two key orders a day and hope to win historically and that's really just nothing new so I wouldn't say it's changed behavior. It's more acute these days, but we feel that we.

Operator: But we feel that we... We feel that our current pricing strategy and our win rate is really sustainable. We feel good about it. And as Kurt said a couple of times now, the fact is, in our guide, we've left some room for the back half to use some of our 45x savings to pursue additional programs should we need to use price to do that. Got it. Okay, and then my follow-up question is just on the kind of capital allocation priorities as you continue to generate pretty healthy free cash flow.

Operator: So we feel that our current pricing strategy and our win rate is is really sustainable we feel good about it.

Operator: And.

Operator: And as Curt said, a couple of times now. The fact is in our guide we've left some room for the back half to use some of our 45 <unk> savings to pursue additional program should we need to use price to do that.

Operator: Got it understood. Okay and then my follow up question is just on kind of capital allocation priorities as you continue to generate pretty healthy free cash flow. What's the top priorities that you know continued deleveraging or is there any other internal investments that youre looking at whether it be inorganic organic I just love your thoughts on.

Operator: What's the top priority? Is it, you know, continued deleveraging, or is there any other internal investment that you're looking at, whether it be inorganic or organic? I'd just love your thoughts on that. Thank you. I'll take that one. This is Kurt.

Kurt: Matt Thank you.

Kurt R. Wood: You know, our, you know, we have priorities, obviously, to continue to deleverage. That's the focus of ours. We mentioned on the last call, I believe, or maybe it was on some callbacks, that we wanted to get through the first half. And there's going to be a little bit of an inventory ramp as we get ready for the second half growth. We don't want to dip into the revolver, you know, unless we have to.

Operator: Yeah I'll take that one this is kurt.

Kurt R. Wood: Our priority is obviously to continue to deleverage that's a focus of ours. We mentioned on the last call I believe or maybe give them. Some call backs that we wanted to get through the first half and it's going to be a little bit of an inventory ramp as we get ready for the second half growth.

Kurt R. Wood: We don't want to dip into the revolver you know unless they have to is there for that but it's more of an insurance policy, but our intent is to continue to delever.

Kurt R. Wood: Aggressive pace you call last year, we did about 84 million and 77 of which was due on the term loan b. So we'll continue to take out.

Kurt R. Wood: It's there for that, but it's more of an insurance policy. But our intent is to continue to delever at an aggressive pace. You know, you recall last year, we did about $84,077,000, of which was on the term loan B. So we'll continue to take out, you know, even though we don't have any maturities during the next two years, you know, we got some. Term loan B would be the next, and it's got our highest rate. So that's going to continue to be what we look to take out unless we can negotiate something else in a very favorable way. I understand. Thanks so much.

Kurt R. Wood: Even though we don't have any maturities due in the next two years you know we got some of that.

Kurt R. Wood: Term loan B would be the next and it's got our highest rates. So that's going to continue to be what we love to take out.

Kurt R. Wood: Unless we can negotiate something else in a very favorable way.

Speaker Change: Understood. Thanks, so much.

Kurt R. Wood: Yeah.

Operator: Thank you. Ladies and gentlemen, just a reminder, participants are limited to one question at a time. The next question that we have comes from Sophia Kopp of KeyBank Capital Markets. Please go ahead. Hi. Good afternoon.

Speaker Change: Thank you ladies and gentlemen, just a reminder, participants are limited to one question at a time.

Sophie Ksenia Karp: Next question, we have comes from Sofia Com of Keybanc capital markets. Please go ahead.

Operator: Okay.

Sophie Ksenia Karp: Hi, good afternoon, and thank you for taking my question.

Operator: Thank you for taking my question. I was wondering if you could get a little bit more granular on the delivery pushouts, I guess, that you guys are talking about into the second half of this year and, like, what are the predominant causes of that? I know there's a variety of factors you've listed, but just kind of trying to understand if there's a predominant trend that we should be following here, and what is your degree of confidence that, you know, these, you know, the pushouts are going to be, like, you know, to the end of the year, but not beyond that?

Sophie Ksenia Karp: I was wondering if you could get a little bit more granular on the a.

Operator: Delivery push outs I guess that you guys are talking about into the second half of this year and like what were the predominant clauses of anything nowadays a variety of factors you listed but just kind of trying to understand if there's a predominant trends that we should be a follower in here and what is your degree of confidence.

Speaker Change: You know that's a push.

Operator: Push outs are going to be making up to the end of the year, but not beyond that maybe.

Operator: Thank you. I want to reiterate, we're not seeing any pushouts in the first half. If you recall, when we gave our guidance, we said we'd taken all that into consideration, and I believe at the time we gave the call, we said it would be just under 30% of our full-year revenue coming in the first half. That hasn't changed from that standpoint.

Speaker Change: I Wonder where you're hearing we're not seeing any push outs in the first half you recall when we gave our guidance. We said we've taken all that into consideration and you know I believe at the time, we gave the call we said no.

Operator: It would be just under 30% of our full year revenue coming in the first half that hasn't changed from that standpoint, what.

Operator: What we see in the it's early into the year. So I know it's made but it's still early from what we have there are we did see a project or two moved from Q3 to Q4 still within the realm.

Kurt R. Wood: What we see in the, it's early into the year still, I know it's May, but it's still early for what we have. We did see a project or two move from Q3 to Q4, still within the realm here, and as we talked about before, we took, when we gave guidance, we looked very carefully at projects that were late in December, and we just artificially, in our own mindset, even when customers were signaling they'd put them in this year, we put them in next year from that aspect.

Kurt R. Wood: The realm here and as we talked about before we took when we did guidance, we look very carefully around.

Kurt R. Wood: Projects that relate in December and we just artificially in our own mind saving our customers are signaling they'll put it in this year, we put it into next year from that aspect, but obviously you know as the CFO will be sleeping with one eye open.

Kurt R. Wood: Obviously, as a CFO, I'll be sleeping with one eye open knowing that Q4, as we said on the call, is going to be the largest quarter for us from a revenue standpoint. As far as the reasons for the elongated timeframe, not necessarily pushouts, as we talked about the supply chain of critical components, particularly the transformer, we've also got people trying to refinance.

Kurt R. Wood: Knowing that Q4, as we said on the call it's going to be the largest largest quarter for us from a revenue standpoint.

Kurt R. Wood: As far as the reasons for the elongated timeframe not necessarily push outs as we talked about its supply chain of critical components, particularly the transformer. We've also got people trying to refinance obviously rates aren't going to come down as expected. Originally I thought as you know at the end of the year that people were thinking.

Kurt R. Wood: Obviously, rates aren't going to come down as expected originally as thought at the end of the year that people were thinking and all the other reasons that Kevin mentioned on the call. Again, I want to reiterate that what we're seeing in the first half was anticipated and signaled and included in our guidance in the last call. Thank you. The next question we have comes from Moses Sutton of BNP Paribas. Please go ahead. Hi, thanks for squeezing me in.

Moses Nathaniel Sutton: All of the other reasons that Kevin mentioned on the call, but just again want to reiterate that what we're seeing in the first half that was.

Moses Nathaniel Sutton: <unk> anticipated and signals and included in our guidance in the last call.

Moses Nathaniel Sutton: Thank you.

Kurt R. Wood: The next question we have comes from Moses Sutton with BNP Paribas. Please go ahead.

Moses Nathaniel Sutton: Hi, Thanks for squeezing me in.

Operator: For the 45x credits that were included, can you share the specific dollar value? I guess put differently, we thought that maybe the 41 million from 4Q would be recognized in 1Q. Just trying to understand the puts and takes of how you recognize 45x credits from the prior periods and then the new ones that are generated through COGS over time.

Moses Nathaniel Sutton: 45 X credits that were included.

Operator: Can you share like the specific dollar value I can put differently, we thought that maybe the 41 million from four Q would be recognized in <unk>.

Operator: Just trying to understand the puts and takes of how you recognize 45 X credits from the prior periods and then the new ones that are generated through Cogs overtime.

Kurt R. Wood: Again, I want to reiterate what we talked about in the last call was, you know, 45X, you know, we're going to just get one number going forward. But I would say, you know, as we look at it, we never said it was all going to be in Q1. We said it would be recognized over the remaining volume that we have with those contracts going through, and that wasn't all in Q1. But, you know, we're going to just get one number going forward for simplicity.

Speaker Change: Yeah, well again I want to reiterate what we talked about on the last call was 45 ex yeah. We're going to just give one number going forward I would say as we look at it we never said it was all going to be in Q1 and that we said it will be recognized over the remaining volume that we have with those contracts going through and that wasn't all in Q1.

Kurt R. Wood: It was in our guidance on that, and, you know, we'll leave it at that. I would just add to that, Kurt, just to make sure we're clear. There wasn't a disproportionate amount of that.

Kurt R. Wood: We're going to just give one number going forward for simplicity. It was in our guidance on that and we'll leave it at that.

Speaker Change: I would just add to that Kurt just to make sure. We're clear there wasn't a disproportionate amount of that.

Kurt R. Wood: $40 million was included in Q1. So, help. Got it. That's help. And I guess just shifting to bookings, 2.1 billion, how do you think of that on an annualized basis, just in general? So it used to be we would think of this as, at some point, that would be like a one-year reflection, maybe around IPO, that was how it was discussed, but lead times have extended. Is that something that is a proxy for 15 or 18 months? Is there any way to think about that, or is it just too fluid?

Kurt R. Wood: $40 million included in Q1 there.

Kurt R. Wood: There was not.

Kurt R. Wood: So <unk> got it that's helpful.

Kurt R. Wood: And I guess I guess, just shifting to the bookings to go 1 billion how.

Kurt R. Wood: How do you think of that on an annualized basis just in general. So you used to be we would think of this as you know at some point that would be like a one year reflection, maybe around IPO don't have discussed but lead times have extended is that something that as a proxy for 15 or 18 months is there any way to think about that or its just too fluid.

Operator: I would say it's too fluid in the near term right now. I would say that we feel good about the amount of visibility we're beginning to have into next year and certainly the first half of next year, but I do think it's too fluid for us to give you that range of conversion. We would typically wait a couple of quarters before we predict that for next year.

Speaker Change: I would say, it's too fluid in the near term right now I wouldn't say that we feel good about the amount of visibility. We are beginning to have into next year and certainly the first half of next year.

Operator: Great, thanks again. We've got to move to the next question. Thank you. The next question we have comes from Dylan Lozano of Wolf Research. Please go ahead.

Operator: I do think it's it's too fluid for us to give you that range of conversion.

Dylan Thomas Nassano: We would typically wait a couple of quarters before we predict that for next year.

Dylan Thomas Nassano: Great. Thanks again.

Operator: Yeah.

Dylan Thomas Nassano: Got it most the next question.

Dylan Thomas Nassano: Thank you. The next question we have comes from Dennis Maisano of both research. Please go ahead.

Operator: Yeah, hey, thanks for taking my question. I just want to go back to the conversation that we were having around ASP deflation and kind of the margin profile. So, I mean, I guess, you know, you spoke of being able to kind of, in the past, pass on cost savings to customers, and you have some 45X dry powder, but I'm just trying to figure out, do you have, is there any other flex that's kind of left in the actual operating cost structure? And when would it make sense to kind of look for those kinds of levers to pull versus, you know, looking at the 40?

Dylan Thomas Nassano: Yeah, Hey, Thanks for taking my question I just wanted to go back to the conversation that we're having around ASP deflation and kind of the margin profile.

Operator: I mean, I guess, you know you spoke to being able to kind of in the past pass on.

Operator: Cost savings to the customers and you have some 45 ex dry powder, but I'm just trying to figure out do you have is there any other flex that's kind of left in the actual operating cost structure.

Operator: And when would it make sense to kind of look for those kinds of levers to pull versus looking at the 45.

Operator: Yes.

Speaker Change: Yeah, I'm not I'm not quite sure I understand the question I can just say look we're going to continue to improve our business and drive for improved operational gearing. Obviously, you don't get the operational gearing when you have a $150 million quarter. So I think the margin performance that you've seen given.

Operator: Yeah, I'm not, I'm not quite sure I understand the question. I could just say, look, we're going to continue to improve our business and drive for improved operational gearing. Obviously, you don't get operational gearing when you have a $150 million quarter. So I think the margin performance that you've seen given the low volume is a signal that there's much more operational gearing to be had. As the business scales back up, we've worked really hard on improving the functions within the business.

Operator: The lower volume as a signal that there is much more operational gearing to be had as the business scales back up we've worked really hard on improving the functions within the business.

Operator: And being very mindful of costs, such that we feel this is a business that's going to have great operational leverage as we scale the business back up. And I would add to that, this is Kurt, that look, there's a couple ways you get that leverage.

Operator: And being very mindful of costs such that we feel this is a business that's going to have great operational leverage as we scale the business back up and I would add to that this is Curt that look there is a couple of ways you can get that leverage one is supplier negotiations and volume. The other is engineering cost as an example of that is what Kevin mentioned.

Kurt: More on the new HQ, 50, where that reduce cost and we rolled it out internationally and then you know maybe theres, a third which I think we put in the script, which was we announced the groundbreaking of our Albuquerque facility and that's not to get to 45 assets to meet you.

Operator: One is, you know, supplier negotiations and volume. The other is engineering, you know, costing it out. An example of that is what Kevin mentioned before, on the new H250, where that reduces costs, and we rolled it out internationally.

Kurt R. Wood: And then, you know, maybe there's a third thing that we put in the script, which was we enhanced the groundbreaking of our Albuquerque facility. And that's not to hit the 45X, it's to meet cost efficiency and other things that we have. Now, that's not a 2025 thing that'll start hitting in 2026.

Kurt R. Wood: Cost efficiency and other things that we have now that's not in 2025 thing that'll start hitting in 2026, but we look at as price comes down what can we do operationally from a design as well as the negotiation as well as just an overall supply chain infrastructure, including what we in source versus outsource.

Speaker Change: Okay, Yes, it makes total sense. Thank you.

Kurt R. Wood: Okay.

Kurt R. Wood: But, you know, we look at, as price comes down, what can we do operationally from a design, as well as negotiation, as well as just an overall supply chain infrastructure, including what we in-source versus outsource. Okay, yeah, it makes total sense. Thank you. Thank you. The last question we have comes from Jeff Osborne of TD COVID. Please go ahead. Thank you. Good evening.

Speaker Change: Thank you.

Kurt R. Wood: Last question, we have comes from Jeff Jeff Osborne of Cowen. Please go ahead.

Operator: Just maybe a follow-up on Moses's question. I was hoping you could help me interpret some numbers that are in the 10-Q. I think there's a reference to a vendor rebate of $57.1 million, of which $45.9 is in prepaid expenses, and that compares to $48.4 last quarter. So as those numbers move around, help us figure out how to interpret them as what was recognized in the quarter, and what we should be paying attention to with those numbers that you're now disclosing.

Jeffrey David Osborne: Yes. Thank you good evening, just maybe a follow up on that question is hoping you could help me interpret some numbers that are in the 10-Q.

Operator: I think there's a reference to a vendor rebate of $57 1 million of which $45 nine as in prepaid expenses and that compares to 44.

Operator: Last quarter, so as those numbers move around can you just.

Operator: Help us.

Operator: Figure out how to interpret them as what was recognized in the quarter, what we should be paying attention to with those members that you're now disclosing.

Operator: I'll have to get back to 40; I'm just trying to get it in my mind without getting into the details of the queue, that might be the 45x credits that we're talking about that come back in the form of a vendor remit. Can you walk us through that?

Speaker Change: I'll have to get back to 40.

Operator: I'm just trying to get in my mind that without getting into the details of the Q that might be the forced buybacks credits that we're talking about that comes back and again the vendor rebate.

Operator: With the 45.

Operator: Can you walk us remember that one.

Kurt R. Wood: Remember how the 45X works. You'll see, we will recognize it after the P&L, but there are a couple of different ways that that gets monetized. You know, some customers will kind of, you know, pay you immediately, some will pay you a quarter in arrears, and some customers will pay you as paid. And remember, this is monetized in a tax return. So what will happen at that standpoint is anything we earn in 2024 that's paid as paid will then not come back to us until they file their corporate tax returns for the 2024 fiscal year, which could be in the fourth quarter of 2025 when they file that.

Operator: Remember, how the 45, that's where you'll see.

Kurt R. Wood: We will recognize it out to the P&L, but theres a couple of different ways that that gets monetized. Some customers will kind of pay you immediately some will pay you a quarter in arrears and some customers will do paid is paid and remember this is monetize in a.

Kurt R. Wood: Tax returns so what will happen at that standpoint, as anything we earn in 2024 that the payments paid well than not come.

Kurt R. Wood: Come back to us until they file their corporate tax returns for the 2020 for fiscal year, which could be in the fourth quarter of 2025, when they file that so a variety of different things, but you will see that show up in that line for 40 buybacks.

Kurt R. Wood: So a variety of different things, but you will see that show up in that line for 45X. But Jeff, I just want to make sure we're clear on that, that that is not indicative of the total 45x benefit that we're receiving because of the multiple different types of contracts we've engaged in. That will be a portion only. I'd say it's the majority that would flow through that line item. I don't think we're going to achieve that level of clarity.

Kurt R. Wood: So Jeff I, just wanted to make sure we're clear on that but that is not indicative of the totaled 45 X benefit that we're receiving because of the multiple different types of contracts, we've engaged with our customers that will be a portion only.

Kurt R. Wood: Would you say is the majority.

Kurt R. Wood: That would flow through that line item or not.

Kurt R. Wood: I don't think we're going to get that level of clarity I think what we've what we've tried to provide you is the good guidance.

Kurt R. Wood: I think what we've tried to provide you is good guidance on our gross margin and the gross margin with and without 45x. I think that's probably the best and quickest way to do the math to get an estimate of the 45x in the quarter.

Kurt R. Wood: Our gross margin and the gross margin with and without forty-five back. So I think that's probably the.

Kurt R. Wood: Best and quickest way if you didn't do the math to get an estimate of the 45 X in the quarter.

Jeff: It makes sense I appreciate it thank you.

Kurt R. Wood: I appreciate it. You got it, Jeff. Thanks. Thank you, sir. Ladies and gentlemen, we have reached the end of our question-and-answer session. This concludes today's conference. Thank you for joining us. You may now disconnect your lines.

Jeff: Jeff Thanks.

Speaker Change: Thank you so.

Speaker Change: Ladies and gentlemen, we have reached the end of our question and answer session.

Kurt R. Wood: This concludes today's conference. Thank you for joining US you may now disconnect your lines.