Q2 2025 FTC Solar Inc Earnings Call

Bill Michalek: Good day, and thank you for standing by. Welcome to the FTC Solar Second Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star one one on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Bill Michalek, VP of Investor Relations. Please go ahead.

Good day and thank you for standing by. Welcome to the FTC solar second quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session to ask a question during the session. You will need to press star 1, 1 on your telephone. You will then hear an automated message. Advising that your hand is raised to withdraw your question. Please press star 1 1 again, please be advised. That today's conference is being recorded, I would now like to hand the conference over to your first Speaker today. Bill maleik, VP of investor relations. Please go ahead.

Bill Michalek: Thank you and welcome everyone to FTC Solar's Second Quarter 2025 Earnings Conference Call. Before today's call, you may have reviewed our earnings release and supplemental financial information, which were posted earlier today. If you have not reviewed these documents, they are available on the Investor Relations section of our website at ftcsolar.com. I am joined today by Yann Brandt, the company's President and Chief Executive Officer; Cathy Behnen, the company's Chief Financial Officer; and Patrick Cook, the company's Head of Capital Markets and Vice President. Before we begin, I remind everyone that today's discussion contains forward-looking statements based on our assumptions and beliefs in the current environment and speaks only as of the current date. As such, these forward-looking statements include risks and uncertainties, and actual results and events could differ materially from our current expectations.

Thank you and welcome everyone to FTC solar's. Second quarter 2025 earnings conference call.

for today's call, you may review your earnings release and supplemental financial information which were posted earlier today,

If you've not reviewed these documents are available on the investor relations section of our website at FTC solar.com.

I'm joined today by Yann Brandt, the company's president and chief executive officer, Kathy bainan, the company's Chief Financial Officer and Patrick cook the company's head of capital markets and Biddy.

Bill Michalek: Please refer to our press release and other SEC filings for more information on the specific risk factors. We assume no obligation to update such information except as required by law. As you would expect, we will discuss both GAAP and non-GAAP financial measures today. Please note that the earnings release issued this morning includes a full reconciliation of each non-GAAP financial measure to the nearest applicable GAAP measure. With that, I will turn the call over to Yann.

Before we begin, I remind everyone that today's discussion today is for looking statements based on our assumptions and beliefs in the current environment and speaks only. As of the current date. As such these 4 looking statements include risks and uncertainties and actual results. And events could differ materially from our current expectations,

Please refer to our press, release and other SEC filings. For more information. On the specific risks factors, we assume no obligation to update such information, except as required, by law,

Yann Brandt: Thanks, Bill, and good morning, everyone. It is great to be with you again and give you an update on the continued progress that FTC Solar is making to position the company as one of the leading single-axis tracker providers in the market. As I approach my one-year anniversary with FTC Solar, I can tell you that this has been one of the most dynamic and incredible of my nearly 20 years in the solar industry. My optimism about the company and its future is that in this moment of needing to build solar faster and more efficiently, we believe our tracker installs in less time with less people than any of our peers, and we do not think it is even close. The constructability is in our DNA. Fewer parts and better features enable a reimagined solar tracker installation experience.

As you would expect, we will discuss both gaap and non-gaap financial measures today. Please note that the earnings release issued this morning includes a full reconciliation of each non-gaap Financial measure to the nearest public vgap measure with that. I'll turn the call over to you on.

Thanks Bill, and good morning, everyone. It's great to be with you again. And give you an update on the continued progress that FTC solar is making to position the company as 1 of the leading single axis tracker providers in the market.

As I approach my 1 year anniversary with FTC solar I can tell you that this has been 1 of the most dynamic and incredible of my nearly 20 years. In the Solar industry, my optimism about the company and its future is that in this moment of needing to build solar faster and more efficiently, we believe our tracker installs in less time with less people than any of our peers and we don't think it's even close.

Yann Brandt: I urge you to view the videos of our installations that we have posted to see how tasks that may require six or seven people and special tools with competing products are replaced with two people and no specialty tools or drills. Our clients are finding that new installation crews can be trained and operate at full speed within minutes of the start of the day. It is just that simple to install. This constructability is protected by IP and inherent in the design that is the latest innovation to the tracker market. While it takes time to educate and advance the conversation with EPCs that have been doing it one way for years, this is exactly the progress we are making every single day. FTC is on more approved vendor lists today than ever in our history, and we are just getting started.

The constructibility is in our DNA if you are parts and better features enable enable and reimagine solar tracker installation experience. I urge you to view the videos of our insulation that we've posted to see how tasks are may require 6 or 7 people in special tools with competing products are replaced with 2 people and no specialty tools or drills.

Our clients are finding that new installation Crews, can be trained and operating full speed within minutes of the start of the day. It's just that simple to install.

That I've been doing it 1 way for years. This is exactly the progress. We're making every single day.

Yann Brandt: FTC continues to grow the sales team with EPC experts to help drive understanding of our constructability with our customers. These installation benefits can enable EPCs to offer lower CapEx prices to customers when using FTC rather than with competitor options. Our message to the market is clear. We believe that FTC’s tracker installs significantly faster than any other tracker in the market, and that message continues to be our focus every day. Now, let me say a few things on the market and our positioning, and then I will turn it over to Cathy to provide an update on our Q2 results.

FTC is on more approved, vendor list today than ever in our history, and we're just getting started.

FTC continues to grow the sales team with EPC experts to help Drive understanding of our constructibility. With our customers. These installation benefits can enable epcs to offer lower capex prices to customers when using FTC rather than would competitor options.

A message for the market is clear. We believe that ftc's tracker installs, significantly, faster than any other tracker in the market and that message continues to be our Focus every day.

Yann Brandt: At a high level, the Q2 came in as expected from a financial perspective, with results within our ranges and tight OpEx allowing adjusted EBITDA to come in at the high end, even with some of the most volatile macro environment I have seen during my solar career. The exciting news since our last call was the $75 million financing facility we entered into in July and is already opening doors to new business for us. Having the appropriate balance sheet is key to growing through an inflection point, and this capital supports our growth and an expected acceleration of backlog. We have made excellent progress enhancing our product offering, checking all of the boxes, and leading on creating new innovations that are receiving positive feedback from customers. We remain the fastest installed tracker in the market and continue to push speed while also making it easier.

Now let me say a few things on the market in our positioning and then I'll turn it over to Kathy to provide an update on our second quarter, results at a high level. The second quarter came in as expected from a financial perspective with results within our ranges and tight Opex allowing adjusted, EBA to come in at the high end, even with some of the most volatile macro environment, I have seen and during my solar career.

The exciting news since our last call, was the 75 million financing facility. We entered into in July and has already opening doors to new business for us.

Having the appropriate balance sheet is key to Growing through an inflection point. And this Capital supports our growth and an expected acceleration of backlog.

Yann Brandt: Overall market clarity is one area where we are hopeful for some incremental positive development, so let me start there. When we spoke a quarter ago, I mentioned that there was a fair amount of dynamic motion in the marketplace as it relates to things like tariffs, trade deals, and legislation around the one big beautiful bill. Amid that backdrop, while projects continue to progress through stages of the pipeline, there was slow decision-making as customers looked to ensure that they fully understood the market goals that would impact their project and had fully incorporated all costs and other variables into their project models. At the same time, the earlier phase-out of the ITC from the budget bill has spurred multiple gigawatts of new inquiries from customers about potential safe harboring of equipment as part of a plan to secure the full ITC.

We've made excellent progress. Enhancing our product offering checking all of the boxes and leading on creating new innovations that are receiving positive feedback from customers. We Remain the fastest installed tracker in the market and continue to push speed while. Also making it easier. Overall Market Clarity is 1 area where we're hopeful for some incremental positive developments. So let me start there.

When we spoke a quarter ago and mentioned that there was a fair amount of dynamic Motion in the marketplace, as it relates to things like tariffs, trade deals and legislation around the 1, big beautiful bill.

Amid that backdrop while projects continue to progress through stages of the pipeline. There was a slow decision-making as customers. Look to ensure that they fully understood the market rules that they that would impact their projects and it's fully Incorporated all costs and other variables into their project models.

Yann Brandt: So whether we see a rush to build solar as we move into 2026 or something more modest, we will not know until the rules on safe harbor come out from Treasury. The good news is that the end of the 45-day review period is scheduled to be coming to an end, so we hope to have additional clarity soon. While the legislation was not ideal for the solar market, the solar industry has shown its abilities to educate and advocate for important aspects of the law that allowed a path forward. With some additional clarity, I expect full speed ahead on project decisions and continued deployment of solar as the cheapest, cleanest, and fastest generation to connect to the grid. On recent calls, I have shared with you all the great progress we have made expanding our product offering. We have the world's most easily constructed tracker.

At the same time, the earlier phase out of the ITC, from the budget bill has spurred multiple gigawatts of new inquiries from customers about potential, safe harboring of equipment, as part of a plan to secure the full ITC.

So whether we see a rush to build solar as we move into 2026 or something, more modest, we won't know until the rules on Safe Harbor. Come out from Treasury.

The good news is that the end of the 45-day review period is scheduled to be coming to an end. So we hope to have additional Clarity soon.

While the legislation was not ideal for the solar Market, the solar industry is showed its abilities to educate, and advocate for important aspects of the law that allowed a path forward with some additional Clarity. I expect Full Speed Ahead on Project decisions, and continue to deployment of solar as the cheapest cleanest and fastest generation to connect to the grid.

Yann Brandt: We leverage that platform to add features every quarter that allow for the tracker to fit the site and increase the value proposition that we enable for our EPC and IPP clients. This has included adding solutions for high wind zones up to 150 miles per hour, compatibility across module types, and with innovative Python clips and universal port tubes, the ability to make module changes late into the design cycle. Incidentally, the last two factors make FTC an ideal tracker solution for those looking to safe harbor for purposes of the ITC, which we outlined in a white paper that we released last week. A key advancement in our 1P lineup includes introducing the widest range of stow in the industry. We are releasing the most advanced hail solution in the market, capable of an 80-degree stow angle.

On recent calls I've shared with you all the great progress we've made expanding our product offering we have the world's most easily constructed tracker. We leverage that platform to add features every quarter that allow for the tracker to fit the site, and increase the value proposition that we enable for our EPC and IPP clients.

This is included, adding solutions for high wind zones up to 150 mph compatibility across module types. And with Innovative Python clips at Universal torque tubes, the ability to make modules changes late into the design cycle,

Incidentally, the last 2 factors make FTC an ideal tracker solution for those looking to Safe Harbor for purposes of the ITC, which we outline in the white paper that we released last week.

Yann Brandt: Hail can be a key driver of insurance premiums, so having a steeper stow capability can give owners and operators additional flexibility in meeting the unique requirements of their project. This high stow angle is combined with the SunOps performance platform, which has integrated weather forecast services and allows the user to fully customize their site and set thresholds on hail probability, size, and the radius of how close an event may be to the site. Most importantly and unique to FTC, our hail stow capability performs in both directions, ensuring that the tracker goes to the nearest hail stow angle available, saving valuable time. Everything is automated, and if you want to adjust the configuration or trigger immediate stow across the site, just click a button from wherever you are, and the software will take care of it.

A key advancement in our 1p lineup. Includes introducing the widest range of? So in the industry, we are releasing the most advanced hail solution in the market capable of an 80° Stow angle.

Hail can be a key driver of insurance premium. So having a steeper, Stow capability, can give owners and operators additional flexibility. In meeting the unique requirements of their project.

The high Stow angle is combined with the sun UPS performance platform, which has integrated weather forecast services and allows the user to fully customize their site and set thresholds on hail probability size and the radius of how close an event may be to the site.

Most importantly and unique to FTC our Healthcare capability. Performs in both directions. Ensuring that the tracker goes to the nearest, hail Stow angle available saving valuable time.

Yann Brandt: One other innovation I'm announcing today is an extra-long tracker built specifically for 2000-volt systems. The industry is currently at 1500 volts, but is expected to begin to transition to 2000 in the next couple of years. You're already seeing this shift in the inverter market. At 2000 volts, the system can have fewer but longer tracker string lengths, which can reduce EBOS and O&M costs while increasing power capacity by 33%. When customers are ready to make that transition, we are ready to support them from a leadership rather than a follower position. I've alluded to multiple terrain following features we've added to reduce or eliminate the need for land grading. This can be an important factor in enabling permits, lowering project costs, or significantly speeding a construction timeline.

Everything is automated. And if you want to adjust the configuration or trigger immediate Stow across the site, just click a button from wherever you are and the software software will take care of it.

1 other Innovation. I'm announcing today is an extra long tracker built specifically for 2,000 volt systems.

Shift in the inverter Market.

At 2,000 volts. A system can have fewer but longer tracker string length.

Which can reduce eboss, and on andm costs while increasing power capacity by 33%. When customers are ready to make that transition, we are ready to support them from a leadership rather than a follow-up position.

Yann Brandt: FTC Solar has multiple options to support customers to reduce and avoid civil construction work, including articulation at the slew drive to allow for a change in the north-south slope at the drive pile, articulation at the line post to allow for variance in the line post elevation, and variable pile or reveal height capability to accommodate variation in slope. If used in combination, these could eliminate cut and fill altogether with all of these options available now. We continue to make advances across our entire software platform, adding options and capabilities to make things easier and more efficient for our customers. SunOps is a key part of that. I haven't talked much in this venue about SunPath, which is our tracker optimization software for backtracking and diffuse light, but I believe it will become an increasingly important offering as we move forward.

I've alluded to multiple terrain following features, we've added to reduce or eliminate the need for land grading. This can be an important factor in enabling permits lowering project costs or significantly speeding a construction timeline. FTC solar has multiple options to support customers to reduce and avoid civil construction work, including articulation at the slew drive to allow for the change in the north south slope at the drive pile articulation. At the line post to allow for variance in the line, post of elevation and variable pile or reveal height capability to accommodate the variation and slope.

Which if used in combination, could eliminate cut, and fill altogether with all of these options available now.

We continue to make advances across our entire software platforming adding options and capabilities to make things easier and more efficient for our customers.

Startups is a key part of that.

Yann Brandt: I actually posted a picture on my LinkedIn yesterday, which a team member sent me. It shows an example of row-to-row shading on the site caused by natural undulation of the ground. The picture makes it super easy to see the production loss from shading, but that's the kind of thing that SunPath can easily fix when using FTC trackers where each row operates and can be customized individually. I often hear people talk about how truly flat solar sites are gone. Our team recently analyzed the last 250 sites that we have bid on, and it turns out that 90% of them contain slopes of 3 degrees or greater. This is important because at an average slope of 5 degrees, for example, SunPath on an FTC tracker would give you an additional 2% energy production gain every year over a linked row system.

I haven't talked much in this venue about sunpath which is our tracker optimization software for backtracking and diffused light, but I believe it will become an increasingly important offering as we move forward.

I actually posted a picture on my LinkedIn yesterday, which a team member sent me. It shows an example of row to row shading on the site caused by natural undulation of the ground.

The picture makes it super easy to see the production loss from shading, but that's the kind of thing that some path can easily fix when using FTC trackers where each row operates and can be customized individually.

I often hear people talk about how truly flat solar sites are gone.

Our team recently analyzed the last 250 sites that we have bid on and it turns out the 90% of them contains slopes of 3 degrees or greater

Yann Brandt: That's like adding extra months of production to your deployment. As I said at the start, we have a very wide 1P product offering that is fast, safe, and easy to install, underpinned by our highly constructable design. The more customers and prospects that see how easy our 1P is to build, the more they will like it, particularly the estimators. A significant amount of labor costs on a site relate to mechanical installation of tracker and modules. When you see each module on an FTC tracker simply glide into place and be secured in seconds, you can start to estimate how much faster you can build each row and site and how that compounds to material labor savings.

This is important because at an average slope of 5 degrees. For example, some path on an FTC tracker would give you an additional 2% energy production gain every year, over a linked row system,

That's like adding extra months of production to your deployment.

As I said at the start, we have a very wide 1p product offering that is fast safe, and easy to install, underpinned by our, highly constructible design.

Yann Brandt: This can result in significant savings for EPCs in any environment, but if there is a rush to build solar even faster, the speed with which you can train workers and install faster is critical to maximizing the available labor force in a tightening market. In addition to improving our position on the product side, as I mentioned, we added significant strength to our balance sheet with the $75 million financing commitment announced last month. In addition to giving us ample runway to achieve profitability, it gives incremental comfort to customers that we will be supporting them long into the future.

The more customers and Prospects that. See how easy our 1 p is to build the more. They will like it particularly the estimators, the significant amount of labor costs on a site, relate to a mechanical installation of tracker and modules. So when you see each module on an FTC tracker, simply glide into place and be secured in seconds. You can start to estimate how much faster you can build each row and site and how that compounds the material labor savings. This can result in significant savings for epcs and in any environment. But if there's a rush to build solar even faster, the speed with which you can train workers, and install faster, is critical to maximizing the available labor force in a tightening Market.

Yann Brandt: It was perhaps not the most conducive market environment to raise capital, so I think it says a lot that CleanHill reached out to us, was getting great feedback from the market, and wanted to make it clear with a large commitment that they are big believers in our prospects. The feedback from customers has been overwhelmingly positive, and the announcement has already opened doors to new business for us. I believe we are increasingly well positioned in the marketplace with a robust and rather comprehensive product line that offers significant benefits to projects across developer and EPC portfolios. Our engineering and R&D teams have a full portfolio of incremental initiatives in progress to provide additional customer benefits. We are adding multiple gigawatts of new business to our pipeline, which should only be enhanced by the strengthening of our balance sheet.

In addition to improving our position on the product side. As I mentioned, we added significant strength to our balance sheet with the 75 million. Financing commitment announced last month. In addition to giving us ample Runway to achieve profitability. It gives incremental Comfort to customers that will be supporting them long into the future.

It was perhaps not the most conducive Market environment to raise Capital. So I think it says a lot that clean Hill reach out to us, was getting great feedback from the market and wanted to make it clear where the large commitment that they are big Believers in our prospects.

The feedback from customers has been overwhelmingly positive and the announcement has already opened doors to new business for us.

So I believe we're increasingly well positioned in the marketplace with a robust and rather comprehensive product line that offers significant benefits to projects across developer and EPC portfolios. And our engineering and R&D teams have a full portfolio of incremental initiatives in progress to provide additional customer benefits.

Yann Brandt: Overall, we remain increasingly well positioned to support our customers and their growth. With that, I will turn it over to Cathy.

Cathy Behnen: Thanks, Yann, and good morning, everyone. I will provide some additional color on our Q2 performance and our outlook. Beginning with a discussion of the Q2, revenue came in at $20 million, which was within our guidance range of $19 million to $24 million. This revenue level represents a decrease of 4% compared to the prior quarter and an increase of 75% compared to the year earlier quarter due to higher product volume. GAAP gross loss was $3.9 million, or 19.6% of revenue, compared to a gross loss of $3.4 million, or 16.6% of revenue in the prior quarter. Non-GAAP gross loss was $3.5 million, or 17.4% of revenue, also within our guidance range. The results for this quarter compare to non-GAAP gross loss of $3 million, or 14.4% of revenue in the prior quarter.

We're adding multiple gigawatts of new business to our pipeline, which should only be enhanced by the strengthening of our balance sheet overall. We remain increasingly well positioned to support our customers and their growth with that. I'll turn it over to Kathy.

Thanks Jan, and good morning everyone. I'll provide some additional color on our second quarter performance and our Outlook beginning with a discussion of the second quarter Revenue. Came in at 20 million dollars which was within our guidance range of 19 to 24 million. This Revenue level represents a decrease of 4% compared to the prior quarter and an increase of 75% compared to the year earlier quarter due to higher product volume.

And the prior quarter, non-gaap growth loss was 3.5 million or 17.4% of Revenue also within our guidance range.

Cathy Behnen: This quarter's result included a $4 million accrual related to our joint venture facility that was not contemplated in our guidance ranges. Excluding this charge, we would have returned to being non-GAAP gross profit positive for the first time since late 2023 at a positive half a million dollars. GAAP operating expenses were $7.6 million. On a non-GAAP basis, excluding stock-based compensation and certain other costs, operating expenses were $6.5 million, down from $8.3 million in the same quarter last year and $6.6 million in the prior quarter. This now represents the seventh consecutive quarter of OpEx reductions and our lowest OpEx level since 2020 as we continue to control costs.

The results for this quarter compare the non-GAAP growth loss of $3 million, or 14.4% of revenue, in the prior quarter.

This quarter's result included a $0 acral related to our joint venture facility that was not contemplated in our guidance ranges, excluding this charge, we would have returned to being non-gaap growth profit, positive for the first time since late 2023 at a positive half a million dollars.

Cathy Behnen: GAAP net loss was $15.4 million, or $1.18 per diluted share, compared to a loss of $3.8 million, or $0.58 per diluted share in the prior quarter, and a net loss of $12.2 million, or $0.97 per diluted share post-split in the year ago quarter. Adjusted EBITDA loss, which excludes approximately $5.1 million for a loss from the change in fair value of the warrant liability, certain transition costs, and other non-cash items, was $10.4 million. This was at the top or better end of our guidance range, driven by the lower operating expense and compares to adjusted EBITDA losses of $9.8 million in the prior quarter and $10.5 million in the year ago quarter. Excluding the accrual I referenced earlier, adjusted EBITDA loss would have come in at $6.4 million and represented our smallest adjusted EBITDA loss since becoming a public company.

Gap. Operating expenses were 7.6 million on a non-gaap basis. Excluding stock-based compensation, and certain other costs. Operating expenses were 6.5 million down from 8.3 million in the same quarter last year and 6.6 million in the prior quarter. This now represents the seventh consecutive quarter of Opex, reductions and our lowest Opex level. Since 2020, as we continue to control costs,

Gaap, net loss was 15.4 million or 1.18 cents per diluted share compared to a loss of 3.8 million or 58 cents per diluted share in the prior quarter and a net loss of 12.2 million or 97 cents per diluted share post split in the year ago quarter.

Adjusted IBA loss which excludes approximately 5.1 million dollars for a loss from the change. In fair value of the warrant liability certain transition costs and other non-cash items was 10.4 million.

This was at the top or better end of our guidance range driven by the lower operating expense and compares to adjusted IBA losses of 9.8 million in the prior quarter and 10.5 million dollars in a year ago quarter.

Cathy Behnen: Overall, from a financial perspective, we have continued to optimize our cost structure and remain well positioned to see considerable margin leverage as revenue levels grow. Regarding the balance sheet, as Yann Brandt mentioned, subsequent to quarter end, we announced a new $75 million strategic financing facility with CleanHill Partners and other investors. The facility provides for an initial term loan financing of up to $37.5 million. Of this amount, $14.3 million closed and funded on July 2nd. The balance of $23.2 million of the initial financing is expected to close in the current quarter, subject to shareholder approval on the issuance of associated warrants. The facility also provides for up to an additional $37.5 million in funding to be available to the company as may be needed in the future upon mutual agreement between the company and the investors for a total potential financing of $75 million.

Excluding the Acura I referenced earlier adjusted Eva, loss would have come in at 6.4 million and represented our smallest adjusted. Eva loss since becoming a public company.

Overall from a financial perspective, we have continued to optimize our cost structure and remain. Well positioned to see considerable margin. Leverage as Revenue levels grow

Regarding the balance sheet. As Jan mentioned subsequent to quarter end. We announced new 75 million strategic financing facility with clean Hill partners and other investors.

The facility provides for an initial term loan financing of up to 37.5 million.

Of this amount 14.3 million closed and funded on July 2nd.

The balance of 23.2 million of the initial. Financing is expected to close in the current quarter subject, to shareholder approval, on the issuance of associated warrants.

Cathy Behnen: With that, let us turn our focus to the outlook. Our targets for the third quarter call for the following: revenue between $18 million and $24 million. At the high end, it would represent 20% growth sequentially. However, we have set the midpoint at up 5% with the second quarter, reflecting the impact of market uncertainty on our customers' projects. Non-GAAP gross profit between negative $2.4 million and positive $600,000 are between negative 13.4% and positive 2.5% of revenue. Non-GAAP operating expenses between $7.2 million and $7.9 million, and finally, adjusted EBITDA loss between $10.8 million and $6.8 million. We continue to expect to see a significant ramp in revenue in the fourth quarter. With that, we conclude our prepared remarks, and I'll turn it over to the operator for any questions. Operator?

The facility also provides for up to an additional 37.5 million in funding, to be available to the company, as may be needed in the future upon mutual agreement between the company and the investors for a total potential financing of 75 million.

With that. Let us turn our Focus to the Outlook.

our targets for the third quarter, call for the following,

Revenue between 18 million and 24 million. At the high end. It would represent 20% growth sequentially. However, we have set the midpoint at up 5% with the second quarter reflecting the impact of Market uncertainty on our customers projects.

Non-gaap growth, profit between -2.4 million and positive 600,000, or between -3.4 and positive 2.5% of Revenue.

Non-gaap operating expenses between 7.2 million and 7.9 million, and finally adjusted IA loss between 10.8 million and 6.8 million.

We continue to expect to see a significant ramp in Revenue in the fourth quarter.

With that, we conclude our prepared remarks and I'll turn it over to the operator for any questions operators.

Bill Michalek: Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from Philip Shen from ROTH Capital Partners. The floor is yours.

Thank you. At this time. We will conduct a question and answer session as a reminder, to ask a question, you will need to press star 1 1 1 on your telephone, and wait, for your name to be announced.

To draw your question. Please, press star 1 1. Again, please stand by. When we compile the Q&A roster.

Our first question comes from Philip, Shin from Roth Capital Partners. The floor is yours.

Philip Shen: Hey, guys. Thanks for taking the questions. First one is on the outlook for bookings. I think you guys said that the regulatory uncertainty has slowed some customer project planning. That said, we are just on the Shoals call, and their bookings are accelerating. I think they are at a 1.2 book-to-bill, and I performed on their bookings, and we have seen some of the other players do the same. I wanted to help see if you could help us understand perhaps the difference with your outlook versus what they are delivering. Is it an exposure to a different set of customers, or what might be different or the same as well? Thanks.

Hey guys, thanks for taking the questions. Uh, first ones on the, um, outlook for bookings. Uh, I think you guys said, um,

That uh, you know, the regulatory uncertainty has slowed, some customer project planning um that said, you know we're just on the shores call and um you know, they're bookings, are accelerating. I think that at a 1.2 uh, book to bill um

And I performed on on their bookings, and and we've seen some of the other players, uh, do the same. And so wanted to help. If you see, if you could help us understand

Yann Brandt: Yeah, no, great question, Phil. Appreciate that. Yeah, I mean, look, I think ultimately we're transitioning into a marketplace of 1P. I can't speak to the rest of the market peers, but certainly some of them are a lot more established with existing players and more tier one EPCs and IPPs. That's obviously what the setup is for FTC Solar in terms of getting to the bookings. As we roll out the 1P, we have to really position the company for success, which I think we're making a lot of traction to do, including the $75 million raise, putting the sales team in place, and then obviously getting our roadmap finalized with the product. Now the bookings are expected to come in in order to get additional growth in this 1P inflection that we're transitioning into.

Um, uh Outlook versus. Uh, what? What they're delivering, uh, is it a exposure to different set of customers or uh, what, what might be different, uh, or, or the same as well? Thanks.

Yeah no great question, Phil appreciate that. Um yeah I mean look, I think ultimately uh we're transitioning into a and Marketplace of 1 p and I I can't speak to, you know, the rest of the, the market peers but certainly some of them are a lot more established with uh existing players and and more Tier 1 epcs and ipps. Um and that's obviously what the setup is for. Uh, FTC in terms of getting to the bookings. As we roll out the 1 P, we have to really position the company, uh, for Success. Which I think we're making a lot of traction to do, including the 75 million arrays, putting the sales team in place and then obviously getting our road map finalized with with the product. Um, and now the bookings, uh, you know, are expected to, to come in in order to get, uh, you know, additional additional growth in this 1 P inflection that we're uh, transitioning into

Philip Shen: Okay. Thanks, Yann. Appreciate that. As we look ahead, when do you think we could see an acceleration of bookings? Should we think about it for this quarter, or do we need to get past the executive order? I guess that's coming around soon, so do we see acceleration Q3, Q4, or should we look at it more in 2026? Thanks.

Okay, thanks, Sean. Appreciate that. Uh and so as we look ahead, you know, when do you think we could see?

And acceleration of bookings. Um, you know, should we think about it for

Yann Brandt: We are certainly optimistic around the bookings accelerating significantly. Obviously, we are coming from a Q1 base that is relatively low and breaking into a market that has strong peers. The executive order, I think, will determine what the pace and scale is of safe harbor, whereas the existing projects that we have been working on for quite a bit, those projects getting financial close and getting the financing in place to build. I think when we talk about the dynamic nature of the legislative environment, not every IPP and asset owner looks to hold the asset beyond development stage. It was really difficult for those kinds of clients, which tend to be a large portion of ours, from closing and ultimately getting into construction when they are uncertain around how tax equity, et cetera, will play.

this quarter or, or do we need to get past the executive order? And, um, I mean, I guess that's coming around soon. So maybe we, you know, so, do we see acceleration Q3 Q4 or, or should we look at it more in 26? Thanks.

Yeah, we're we're we're certainly optimistic around. Uh, the bookings accelerating. Um, significantly. Obviously, we're coming from a 1p base. That's, uh, relatively low, um, and breaking into a market. Uh, that has, uh, you know, strong peers, um, you know, the executive order I think will determine what the pace and scale is of, of Safe Harbor, uh, whereas the existing projects that, uh, we've been working on for, for quite a bit. Um, you know, those projects getting Financial closed and, and, and getting the, the financing in place to build, you know, I think when we talk about the dynamic nature of the legislative environment, um, you know, not every IP and asset owner looks to hold the asset Beyond, uh, development stage. And it was really difficult for, for those kinds of clients which uh tend to be uh, large portion of ours.

Yann Brandt: I think that portion being behind us, safe harbor will be some version or have some influence on timing of scale, but we think ultimately we are well situated for both. On safe harbor in particular, our ability to be agnostic on module with our torque tubes plays really well with asset owners being able to safe harbor something while not having all of their material supply figured out.

Philip Shen: Okay. Got it. Thanks. One last one from me. I know you do not have any guidance for 2026 and cannot guide there, but I was wondering if you could talk through how you expect the year to play out and maybe provide a bit of a margin kind of trajectory between now and a year in 2026, if you guys can, or if not, perhaps just a little bit of color on how to help us frame the situation. Thanks.

Um, from closing and, and ultimately getting into construction. Uh, when they, they're on certain around how tax Equity Etc will play. Um, I think that portion being behind us. Uh, Safe Harbor will be a, you know, some version or have some influence on timing of scale. But, uh, we think you know, ultimately, we're well situated, uh, for both and on Safe Harbor in particular, uh, you know, our ability to, to be agnostic on module for with our torque tubes, uh, plays, uh, really well with with asset owners being able to save Harbor. Something while not having all of their uh, their material supply figured out.

Okay, got it. Thanks 1. Last 1 for me. Um, I I know you don't have any guidance for 26 and can't guide there. But was wondering, if you could talk through, uh, how you expect

um,

the year to play out and and maybe provide a bit of a margin kind of

Yann Brandt: Yeah, I'll stay away from specifics, but let me frame it. 2026 is shaping to be the pivotal year for FTC Solar. Our roadmap is where we want it to be. Our sales force and sales team in the U.S. and globally have built these relationships that speak to the constructability. In a world where the labor market is super tight and there's so much solar to be built, saving a significant percentage on the installation speeds is what really puts FTC Solar's value proposition in the forefront, both for bookings, top line, and margin. We're really optimistic around where we stand. We'll have more to say in the coming quarters, but that's the path we're marching down and executing against. Now we have a lot of the base, the foundational pieces in place, including the balance sheet that we needed in order to be able to do that.

Trajectory between now and uh year in 26, if you guys can or or um if not you know perhaps just a little bit of color on how to help us frame uh, the situation. Thanks.

Yeah, I'll I'll stay away from from specifics, but let me frame it. You know, 2026 is, is shaping to be the pivotal year for for FTC. Um, you know, our road map is where we want it to be, uh, our sales force and sales team, uh, in the US and globally. Uh, have built these relationships that speak to the constructibility, you know, in a world where the the labor market is super tight, um, and there's so much solar to be built. Uh you know, saving significant percentage on the insulation uh speeds uh is what you know, really puts ftc's value proposition in the Forefront. Um both for bookings uh, Topline and margin uh, you know, well, we're we're, we're really optimistic around where we stand. Um, you know, we'll have more to say in the coming quarters but, you know, that's, that's the path. We're we're, we're marching down and, and executing against, and now we have a lot of the, the, the base the foundational pieces in place.

Philip Shen: Yep. Congrats on the $75 million deal, and I will pass it on. Thanks.

Yep. Um congrats on the uh 75 million uh deal and uh I'll pass it on. Thanks.

Bill Michalek: Thank you for your question. Our next question comes from Jeff Osborne at TD Cowen. The floor is yours.

Thank you for your question.

Philip Shen: Hey, thank you. Maybe just to follow up on Philip Shen's line of questioning, what is the sort of voice of the smaller IPPs and EPCs? Is it just solely waiting for clarity from the July 7th executive order, or is there challenges in getting financing and moving the projects forward? I am just trying to bridge the gap. My sense is that the third quarter guidance is probably less than you were anticipating maybe two, three months ago. What gives you the confidence that assuming it is that group of customers that have been a bit paused here, what gives you the confidence that they are going to move forward in the fourth quarter?

Our next question comes from Jeff Osborne. A TD Cowen. The floor is yours.

Hey, thank you. Uh, maybe just a follow up on Phil's line of questioning. Um, you know what, what is the sort of voice of the the smaller ipps and epcs? Is it just solely waiting for clarity from the July 7th.

Uh, executive order or is there challenges in getting financing and moving the projects forward? I'm just trying to bridge the gap. At my sense is that the third quarter guidance is probably less than you were anticipating, you know, maybe 2 3 months ago and then what gives you the confidence?

Yann Brandt: No, the confidence comes from we are working really closely with them. Obviously, a lot of our team has been in and around project finance for many years. I would say strategically, the main thing that has happened in capital raise for smaller project developers is putting capital in place not just for individual projects, but for the broader pipeline. Given the strategy on how to maximize the value of those assets sort of came to the forefront with less years on the ITC window. So the executive order is going to impact the size and scale of safe harbor and the strategy around maybe earlier stage projects in the pipeline. But our confidence comes from the fact that there is usually not just one term sheet from major players that want to buy these developed solar assets.

That assuming it's that group of customers that have been a bit paused here. What, what gives you the confidence that they're going to move forward in the fourth quarter?

Yeah, no. The the the conference comes from you know, we're we're working really closely with them. Obviously you know a lot of our team has been in and around project Finance for you know many years. Um the I would say strategically the main thing that's happened in in capital raised 4 uh smaller project developers is

Yann Brandt: We see those projects transacting and getting to close, and obviously that will then roll into being actionable revenue opportunities for FTC.

Putting capital in place, not just for individual projects. But for the the broader pipeline given the strategy, you know, on how to maximize the value of those assets, uh, sort of came to Forefront with with less years on the ITC window. So um, the executive order is going to impact the side and scale of of Safe Harbor. Um and the strategy around, you know, maybe earlier stage projects in the pipeline. Um but you know our confidence comes from the fact that there's usually not just 1 term sheet from major players that want to buy these. You know so developed solar assets um and you know so we see those projects transacting and getting to close uh and obviously that will then then roll into being uh, actionable Revenue opportunities for for FTC

Philip Shen: Got it. Maybe for you, Yann, or someone else, but if we could just flesh out the $4 million charge in the quarter, was that associated with the CELI facility and then the associated FEOC rules that were implemented? Or maybe just describe A, what the $4 million is related to, and then now that FEOC is out in the July 4th bill, what's the ownership structure of CELI relative to what's needed with the new rules?

Got it, um, maybe for you yawn or or someone else. But um, if we could just flesh out the, the 4 million, uh, charge in the quarter was, was that associated with the, the seaweed facility, and then the associated Fiat rules that were implemented, or maybe just described.

Yann Brandt: Yeah, let me have Cathy Behnen answer the $4 million. I will come back and answer the tail end of your question.

Cathy Behnen: Okay. Sure. Hi, Jeff. The $4 million was related to an agreement that we had in the JV on minimum purchase commitments with Alpha Steel, and we entered that before the facility ever opened. So that is what the $4 million accrual is related on. There is kind of a lot of different components to it, and we are still in discussions with the team, but $4 million is the maximum potential impact, and we have not made any payment at this point.

Hey with the 4 million is related to and then now the fiio is out in the July. 4th bill. You know how? How is the ceiling? What's the ownership structure of CEI relative to what's needed with the new rules? Yeah, let me have Kathy answer the the 4 million. I'll come back and answer this the tail end of your question.

Okay, sure. Hi. Jeff. Um, the $9 was uh, related to an agreement that we had in the jv on Min minimum, purchase commitments with Alpha steel and we entered that, you know, before the facility ever opened. Um so that's what the 4 million dollar Acura is related on. There's kind of a lot of different components to it and so we're still in discussions um with the team. But 4 million dollars is the maximum. Um, potential impact and we haven't made any payment at this point.

Yann Brandt: Yeah, so FEOC doesn't impact the $4 million accrual. There's obviously going to be a lot of motion across the landscape of manufacturing. So we're looking at the options for us. We have a great partner in that JV, so there's a few options. It's not a large facility, so from a material assistance perspective, it's really de minimis. So we're working through it, but we have a good partner and expect to be able to continue the work there.

Yeah. And, and so, so fiak doesn't impact the the 4L. Um, you know, it is uh, there's obviously going to be a lot of motion across the landscape of of manufacturing. Um, you know, so we're looking at, uh, we're looking at the options for us. Uh, we have a great partner, uh, in that in that JV. Um, so there's there's a few options, it's not a large facility. Uh, so from a material assistance perspective, it's really the Minimus. Um, but so we're working through it but we have a good partner and uh, you know, expect to be able to uh, you know, continue continue the work there.

Philip Shen: Got it. My last one was just on the capital raise. Great to see, but what was the logic or rationale of going that route with the warrant structure relative to, I think you had a $60 million ATM that had been untapped for quite some time. So what was the trade-off? Did you need the two tranches within short order and just the amount of time it would have taken to come up with the $37.5 million relative to using the ATM? Is less pressure on the stock? Was that the industrial logic, or what was the thought process?

Yann Brandt: Yeah, I think it was opportunistic. We have now a great partner in CleanHill. It really signifies the positioning that FTC Solar is in relative to the market and our peers and the differentiated technology. It is hard to be innovative in something like trackers, right? Especially the step change that we were looking to achieve in terms of the labor savings and constructability. The opportunity arose to do something larger with CleanHill. We looked at that versus the other options that are on the table.

Got it. My, my last 1 was just on the, the capital raised great to see. But just what, what was the sort of the, the logic, or rationale of going that route with the warrant structure relative to, I think you had a 60 million ATM that had been untapped for quite some time. So what was the trade-off to do need the the 2 tones within, you know, short order and just the amount of time it would have taken to come up with the 37 and a half relative to using the ATM. Is less pressure on the stock was at the industrial logic or what? What was the, the thought process?

Yann Brandt: Based on what our optimism says, and our customers have been really positive, like I said in the prepared remarks. It has opened doors just in the last couple of weeks of customers that were looking at watching FTC Solar's growth and sort of bring us back to the table and bidding work that we were hopeful to get but were not expecting to get this quickly. We anticipate that this balance sheet enhancement at that scale is going to get us to the point we want to get to a little bit faster.

To do something larger with clean Hill. Um, you know, we we looked at at that versus the other options that are on the table um and you know, sort of based on what we uh, you know, our optimism said is is ahead for us. We wanted to make sure that we had the right balance sheet in place.

And our customers have been really positive. Like I said, in the prepared remarks, uh, it's opened, uh, doors just in the last couple of weeks, um, of, uh, customers that, you know, we're looking at, uh, watching ftc's growth and and sort of bring us back to the table and, uh, you know, bidding work that, you know, we were hopeful to get but weren't expecting to get this quickly. Um, so we, you know, we anticipate that this, uh, balance sheet enhancement, you know, at that scale is going to get us, uh, you know, to the point, we want to get to a little bit faster.

Philip Shen: Perfect. That's all I had. Thank you.

Yann Brandt: Thanks, Jeff.

Perfect. That's all I have. Thank you.

Bill Michalek: Thank you for your question. As a reminder, to ask a question, you will need to press star one one on your telephone. One moment, please. Our next question comes from Samir Joshi, H.C. Wainwright. The floor is yours.

Bet. Thanks sir.

Thank you for your question.

At this time. As a reminder to ask a question, you will need to press star 1 1 1 on your telephone,

1 moment, please.

Our next question comes from Samir Joi HC Wayne Wright. The floor is yours.

Samir Joshi: Good morning, thanks for taking my questions. Digging deeper into the revenue mix between product and services, obviously this quarter product revenues were lower, service were higher. Was that just seasonality, or should we read something more in that? How do you see Q3 product mix or revenue mix?

Yann Brandt: Yeah, Cathy, can I ask you?

Uh, good morning and thanks for taking my questions. Uh, just taking deeper into, uh, sort of the, uh, Revenue mix between products and services. Uh, obviously this quarter product revenues were lower uh, service where higher uh, was that uh, question 1 is was that just seasonality or, uh, should we read something more in that and then part 2, uh, how do you see 3 Q product, mix or Revenue? Mix.

Yeah, Cathy. Can I ask you the

Cathy Behnen: Yes, absolutely. On services, it is really just a mix of project and project timing. In services, we have all of our logistics and delivery services for all of our projects. It is a timing of production versus delivery. Plus, we do some engineering services contracts, so it is kind of the timing. We had a pretty large engineering services contract during Q1. I think you will see in Q2. I think you will see as we move into Q3, you will see a little bit more tilt towards the production side of it as you go into Q3.

Yes, absolutely.

um know, so on on services,

Samir Joshi: Understood. As a corollary to that, the guidance or rather the outlook for Q3 gross profit is higher than what you saw in Q2. Is that, again, because of revenue mix, or is that because of elimination of certain accrual charges you talked about?

And project timing. Um, so in Services, we have um, all of our, um, Logistics and delivery services for all of our projects. Uh, so at the timing of production versus, uh, delivery. Uh, plus we do, um, some Engineering Services contracts. So kind of the timing. We had a a pretty large Engineering Services contract during, uh, q1 and I think you'll see in. Um, I'm sorry in Q2, I think you'll see as we move into Q3, uh, you'll see a, a little bit more tilt towards the production, uh, side of it, as you as you go into Q3,

Cathy Behnen: Yeah, it is a combination. It is a combination of revenue mix. It is also the $4 million impact of that $4 million accrual in Q2.

Understood and and as a caller to that, uh, the guidance or rather the outlook for 3 Q. Uh, gross profit is higher than, uh, uh, uh, what you signed 2 Q is that again, because of Revenue mix or or, uh, is that because of elimination of certain, uh, the cruel charges, you talked about? Yeah, it is, it is a combination. It's a combination of Revenue mix. It's also a calm, it's the 00 million dollar impact of that, that $9 cruel, and Q2

Samir Joshi: Understood. Thanks for that. Regarding the financing, do you expect this timing of the drawdown to be alongside your expected bookings? Also, can you just help us understand relative to a project being installed and constructed, what is your revenue recognition timeline on that?

Um, thanks for that. Uh, and then, uh, just uh, following up on previous questions. Uh, regarding the financing. Uh, do you expect this, uh, timing of the draw down, uh, to be, uh, to be, uh, alongside your expected book, uh, bookings. Um, and also uh, can you just uh help us understand uh relative to a project? Uh being uh cons uh installed and constructed. Uh, What uh is your Revenue? Uh uh recognition timeline on that.

Yann Brandt: I think your first question is the correlation between the second tranche of the capital drawdown. That doesn't have relation to anything project-related. It's just a function of meeting the shareholder vote. Cathy, do you want to give some light on the revenue recognition to the extent that we share that?

Um I I think your first question is the the correlation between the the second tranche of uh the capital draw down. I that doesn't have relation to uh, anything project related is just a function of needing the shareholder vote. Um, and uh, but Kathy, do you want to give some

light on uh Revenue guy, the revenue recognition to the extent that we

share that.

Cathy Behnen: So, Samir, our revenue recognition, I think, you know, similar to all of our competitors, we are recognizing revenue over time as a project progresses through the production lifecycle of the project. So, once execution begins and production begins, we recognize it based on percentage of completion throughout the project.

Yeah, so Samira our Revenue record.

Samir Joshi: Got it. Understood. Thanks for taking my question.

To all of our competitors were recognizing Revenue over time as a project Progressive through the production life cycle of the of the project. So you know, once execution begins and production begins, uh we recognize that it's based on percentage of completion throughout the project

Got it understood. Uh, thanks for making me question.

Bill Michalek: are welcome. Thank you for your question. At this moment in time, I am showing no further questions. I would like to go ahead and conclude the call. Thank you for your participation in today's conference. This does conclude the program, and you may now.

You're welcome. Thank you for your question.

At this moment in time, I'm showing no further questions.

So I'd like to go ahead and conclude the call. Thank you for your participation. In today's conference, this does conclude the program and you may now disconnect