Array Technologies, Inc. Common Stock 2026 Q2 Earnings Call

I would like to welcome everyone to Array Technologies second quarter 2026 earnings conference call. I'm joined on this call by Kevin Hostetler, our CEO, Keith Jennings, our CFO, and Neil Manning, our President and COO. Today's call is being webcast via our investor relations site at ir.arraytechinc.com, where the related presentation and press release are also available. Today's discussion of financial results includes non-GAAP measures. A reconciliation of GAAP to non-GAAP financial measures can be found in the related presentation and on our website. We encourage you to visit our website at arraytechinc.com for the most current information on our company. 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 statements made on this call.

We refer you to the periodic reports we file with the SEC for a discussion of risks that may affect our future results. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. We are under no duty to update any of these forward-looking statements to conform these statements to actual results, except as required by law. I'll now turn the call over to Kevin.

Thank you, Sarah. Good afternoon, everyone, and thank you for joining us. I'll begin with second quarter highlights and recent business updates. I'll pass it to Neil and Keith to cover our innovation updates and financial performance. Let's begin on slide four with a brief discussion of our financial performance for the quarter. Q2 was a quarter of exceptional momentum across every key metric on the page. Revenue came in at $342 million, up 53% versus the first quarter, driven by 38% tracker volume growth and substantial sequential growth within our APA business as project activity accelerated. That top-line strength flowed through to profitability. Adjusted gross profit was $105 million, up 53% sequentially versus the first quarter, with an adjusted gross margin of 30.8%.

Our year to date figure also stands at an impressive 30.8%, reflecting strong first half execution. We also achieved adjusted EBITDA of $63 million, more than doubling the first quarter, with adjusted EBITDA margins also improving 560 basis points sequentially, coming in over 18%. On the bottom line, we delivered net income of $8 million and adjusted net income of $37 million, an increase of nearly $30 million versus the first quarter. Our traction on new products and our continued commercial supply chain and operational execution give us real confidence in our profitability trajectory for the balance of the year.

As a continuing proof point of our strong commercial momentum, I'm pleased to report we achieved a third consecutive record order book this quarter of $2.5 billion, up 37% versus the same period last year, with over $500 million of new bookings in the quarter, roughly half of which came from our tier 1 customers, including several projects greater than 500 megawatts. This brings our 12-month trailing book-to-bill ratio to an impressive 1.5 times with over $1.8 billion of new bookings. I'll now turn to slide five to discuss some of our recent business updates and how we continue to execute against our strategic priorities. Our focus remains anchored in our three strategic priorities, innovating our future, elevating our international business, and advancing a customer-first culture.

I want to begin by recognizing our cross-functional teams whose execution has enabled our most ambitious and prolific year of new product introductions in Array's history. We're listening to our customers, translating their feedback into differentiated solutions, and leading through innovation in utility scale solar. In the past few months, we formally launched DuraTrack D2S for international markets at Intersolar Munich, extending our differentiated flagship technology into important new growth geographies. During the second quarter, we also announced OmniTrack 2.0, our next generation terrain following tracker. In July, we announced the development of our DuraTrack 60 degree variant, which is engineered for greater resilience in extreme weather environments while optimizing CapEx and lowering insurance costs for our customers.

In partnership with APA, we also launched the ARRAY Atlas suite of foundation to tracker solutions that gives customers a more complete integrated offering engineered from the ground up bringing a real competitive solution to traditional piles. Neil will provide more details on each of these exciting innovations shortly. Touching on our M&A strategy. Our APA integration is progressing very well, and we signed a definitive agreement to acquire Affordable Wire Management, or AWM, which we expect to broaden our electrical balance of system offering, deepening the value we deliver to customers, while also extending our business into battery storage and data center applications. We expect to close this acquisition in the third quarter of 2026, subject to receipt of regulatory approvals and the satisfaction of other customary closing conditions.

Moving to slide six, I want to take the time to discuss our M&A updates in greater detail, beginning with APA's progress now that we are nearly one year post-close. When we acquired APA last August, the thesis was simple: take a strong, well-led, growing fixed-tilt racking and engineered foundations business, enable benefits from Array's scale and bankability, and then accelerate its growth by expanding its access to significantly larger utility-scale solar opportunities. One year in, our results say we did exactly that. APA's year-to-date book-to-bill is over 1.5 times, and pipeline quoting activity continues to grow substantially sequentially. This early momentum has resulted in a first-half revenue 17% ahead of 2025, and the business remains on track to hit our 2026 targets of significant double-digit revenue growth and margin expansion. APA's average pipeline project size has more than doubled since the acquisition.

What has enabled this progress? It starts with the market intimacy and foundation engineering expertise brought forward by the leadership of APA. This, when coupled with the credibility and bankability of Array, brings APA into utility scale conversations that simply weren't available to it on a standalone basis across both the fixed tilt and A-frame portions of their business. We are also putting Array's scale to work in procurement, warehousing, and logistics, leveraging our supplier relationships to drive margin expansion. The bigger story, though, is what this combination has unlocked for Array as a whole. We are pleased to introduce the Array Atlas suite of products, the first step of many into integrated innovation between Array and APA.

Our first integrated foundation to tracker products designed exclusively for multiple Array tracker platforms with APA engineered foundations. The Array Atlas products meaningfully reduce component count and are designed to dramatically improve installation efficiency in the field. Our engineered foundations now attach to tracker awards, expanding our share of wallet on projects and creating additional opportunities for margin accretion over time. Since closing, we have seen an ever-expanding pipeline of joint opportunities. And importantly, we have proven we can acquire, integrate, and scale. Our integration process serves as the template for expanding across the balance of systems. And it is exactly the playbook we are applying to AWM, which I will turn to next on slide seven. Affordable Wire Management is a leading provider of cable management and safety products, serving solar, battery storage, and data center customers with nearly $60 million in trailing 12-month revenue.

The pending acquisition reflects our disciplined M&A strategy, acquiring category-leading profitable businesses with differentiated technology that strengthen our integrated platform and create real customer value through a high degree of technical interoperability and ease of installation. The strategic rationale of the deal comes down to four points. First, we are executing our balance of systems strategy by acquiring a differentiated leader in an adjacent segment with a suite of proven and highly engineered products. While lower priced than trackers, these products are critical for installers and asset owners. Second, our global sales footprint combined with our operational scale. We are cross-selling to our existing global customers and leveraging our economies of scale across our manufacturing, sourcing, and logistics footprint creates very real revenue and cost synergy opportunities. Third, a disciplined financial approach.

AWM is a consistently profitable market leader, which we expect to be high single digit accretive to Array's adjusted EPS in year one before synergies. The base purchase price, combined with the anticipated benefit of stepping up the tax basis of AWM's assets, represents an attractive 6 times trailing 12-month EBITDA multiple, which, by design, improves further as the earn-out is achieved. Fourth, we believe the integration is de-risked. Like in the case of our acquisition of APA, AWM's founders and existing leadership team will continue to run the business, supported by the same integration process that helped drive APA's outstanding year-one results. With that, I'll turn it over to Neil to discuss our recent innovation updates.

Thank you, Kevin. 2026 is our largest launch year ever, with five significant product introductions, each developed through deep voice-of-customer engagement, each expanding our addressable market or potential share of wallet on every project. Innovation continues to be the driving force behind our record $2.5 billion order book. Products launched since 2023, OmniTrack, SkyLink, SmarTrack, Hail XP, and APA, account for roughly 50% of our order book and drive nearly half of our revenue in 2026, compared to a third in 2025. A powerful indicator that our focused innovation strategy is translating into customer adoption and real commercial success. Software revenue alone doubled year-to-date, demonstrating our customers' willingness to embrace our value-maximizing offerings. Feedback from the hundreds of customers and industry contacts we've consulted over the last two years has informed the next evolution of our portfolio. Let's walk through these exciting updates. Turning to slide 10. In the first half of 2026, we launched OmniTrack 2.0 and formally launched DuraTrack D2S.