FTC Solar, Inc. Common Stock 2026 Q2 Earnings Call

Please go ahead. Thank you.

Welcome everyone to FTC Solar's second quarter 2026 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 haven't reviewed these documents, they're available in the investor relations section of our website at ftcsolar.com. I'm joined today by Anthony Carroll, 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 BD. Before we begin, I remind everyone that today's discussion includes forward-looking statements based on our assumptions and beliefs in the current environment and speaks only as of the current date. These forward-looking statements include risks and uncertainties. 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 risk factors.

We assume no obligation to update such information except as required by law. As you'd expect, we'll 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'll turn the call over to Anthony.

Thanks, Bill. Good morning, everyone. I am pleased to speak with you all today following my first full quarter as CEO. Today, I'll share some thoughts on the state and positioning of the business and some recent highlights. Turn it over to Kathy to tell you about our second quarter revenue, which was at the high end of our range, as well as our continued outlook for a strong second half of the year. If you've been following FTC Solar's progress over the last couple of years, you know that it's about taking the company with a great technology and a 2P niche and opening up the vast majority of the market with a 1P platform.

This included developing a really compelling 1P tracker platform, getting qualified on all the modules, expanding the platform for customer needs across wind, snow, and terrain, and then systematically going through the customer qualification and AVL process to gain access to bid on projects. It's been an incredible amount of work by the team, and great work at that, to really put the company in a great position to grow and scale. During that timeline, I was brought in to lead the customer advisory board. Late last year, I joined the board of directors. At the time of my first conversation with you on the last quarter's earnings call, I was only about five days into my tenure as CEO. I now have another 90 days behind me, and by my wife's count, I have spent more than 80 of those days on the road.

During that time, I've met with countless customers, prospects, suppliers, employees, and others, and I believe we have continued good progress in the areas where we have momentum, and we have taken early actions in some areas where we have opportunities to improve. Today, I'm going to focus on five key areas. The first is the need to methodically expand our customer base with the top 10 EPCs and developers. We shared last quarter that we had achieved AVL approval from nine of the top 10 EPCs. This is meaningful, as EPCs don't just add vendors to their AVL for nothing. It's time-consuming and requires a lot of work on both sides. It truly puts us in a position to bid on a significant and increasing amount of business. The focus now is on converting these opportunities with this group.

A good recent proof point, just within the past two weeks, we received a new 400-megawatt PO from a top five EPC for a new 1P project that is also for a top five developer in the U.S. We have worked with this EPC on other projects recently, and we're excited to see a nice size follow-up on project. We hope to share more news about continuing growth with these customers. We also recently received a new 1P purchase order from a top developer that has been a 2P customer of ours. It's about a 100-megawatt project on the East Coast, but notable that it is our first 1P project with them and represents a continued strengthening of the relationship. Obviously, it's a project in the past would have gone to another top provider.

That's two new projects with top players, and I expect we will add more with the two new customers from the top 10 list by year-end. There are a couple of common themes that I hear repeatedly from customers and prospects that support our optimism for continued penetration. One is a desire for diversification in the tracker space. While there are good companies in the space The share is pretty concentrated, and I believe there is a strong interest in having better selection and diversification with another strong player in the mix. The other theme, which has been remarkably consistent, is that customers genuinely value our products and services. The CEO of a leading developer regularly tells me that our tracker technology is best in class, and that we should be a much larger company by now.

When our solution, which customers describe as easier and faster to install, enables a crew to finish an installation up to 40% faster and move on to the next project sooner, that translates directly into higher profitability for them. Another industry leader told me recently that IRR is the number one factor in selecting suppliers. Whether we add value for customers through a faster install or, as is also increasingly the case, through our engineering team enabling more power or less land grading through a more efficient design, that is real value. The second key focus area is to quickly make progress on bookings. We've done a great job getting on AVLs, actually since the last call, we were added to the AVLs of five more large EPCs and six more large developers.

We'll continue that work, I believe we have a critical mass with customers at this point, and we are in great shape with a significantly expanded opportunity set. Now that we're on the AVLs and getting access to bids, the quality of our pipeline is improving as more business is tied to larger players, we need to close on an increasing number of projects. To support this, we have been adding strong new talent to bolster our sales team, we'll continue to add strategically there and in other parts of the company. We've also been utilizing our software team and AI to help improve our bidding and other process throughput and quality, we are seeing material improvements. International markets also represent a significant opportunity for us. I'll talk more about this in future calls, to give a couple of updates.

We recently had a new win in Australia at about 90 megawatts that has deliveries happening in the second half of the year. We're also set to begin deliveries on a 330-plus-megawatt project in Australia in the second half. This is a project that we did first announce in March of 2025, the project timeline was revised, we just received notice to proceed in Q2. While it's not a new win, it's moving ahead, we're excited about that. I'm also pleased to announce that we recently entered the India market have already won multiple initial projects there, ranging from pilot size to 100-plus-megawatt projects with large and well-known customers. We will have more to share about our progress there in the coming weeks and months, I did want to share that news. Shipments in this region have been ongoing in 2026.

In aggregate, over the past three quarters now, we've been booking close to $60 million per quarter, we're looking to materially increase that. The third focus area is ramping revenue in the second half of this year and into 2027. We were able to grow revenue by 52% sequentially in the second quarter. We're guiding for Q3 growth at the midpoint of another 24%, we're reaffirming our full year growth outlook for 2026 of 40% for the year, implying an even stronger Q4. At this point, we have about 80% of our second half revenue needs already covered, with a number of additional project decisions expected in the coming weeks that have the potential to drive that above 100%, that's what we're aiming for.

More important to me than any particular quarterly growth rate is that we're continuing to execute systematically and layer in more and more projects and build that sustainable growth for the future, and we're on a good path. Fourth, our cost structure and break-even revenue level must improve. The company has made great strides over the past couple of years that will allow for margins to expand materially as revenue grows. I believe there is a lot more we can do here across engineering, supply chain, and sales to increase our near and longer-term margin capability and accelerate that improvement. For example, we have recently implemented targeted labor and non-labor cost-saving initiatives that will more than offset the strategic hiring we're doing. We have also increased our use of software and AI to automate routine workflows and are already seeing improving productivity and new savings opportunities.