Array Technologies (ARRY) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $255.8 million, down 50% year-over-year but slightly above guidance, with strong gross margin performance and continued demand in utility-scale solar.

• Adjusted gross margin improved to 35%, aided by 45X tax credit benefits and cost initiatives.

• Adjusted EBITDA was $55.4 million (21.7% margin), and adjusted net income was $30.6 million; net income to common shareholders was $12.0 million.

• Free cash flow for Q2 was $1.8 million, with cash and cash equivalents at $282.3 million as of June 30, 2024.

• Material weakness in financial controls was remediated, with further improvements and ERP implementation underway.

Financial highlights

• Revenue: $255.8 million, down 50% year-over-year; adjusted gross margin: 35.0% (up from 29.6% in Q2 2023).

• Adjusted EBITDA: $55.4 million (Q2 2024) vs $115.6 million (Q2 2023); adjusted EPS: $0.20 (Q2 2024) vs $0.49 (Q2 2023).

• Net income to common shareholders: $12.0 million (Q2 2024) vs $52.4 million (Q2 2023); diluted EPS: $0.08 (Q2 2024) vs $0.34 (Q2 2023).

• Free cash flow: $1.8 million (Q2 2024) vs $15.0 million (Q2 2023); cash balance: $282.3 million at quarter-end.

• Operating expenses: $46.4 million, down 8% year-over-year.

Outlook and guidance

• 2024 revenue guidance lowered to $900 million–$1 billion due to project delays and market volatility.

• Adjusted EBITDA guidance: $185 million–$210 million; adjusted EPS: $0.64–$0.74.

• Free cash flow guidance: $60 million–$100 million; capex: ~$25 million, mainly for new Albuquerque facility.

• Q3 2024 revenue expected between $220 million–$235 million; adjusted gross margin in low-to-mid 30s.

• All $333.9 million in remaining performance obligations as of June 30, 2024, expected to be recognized as revenue within twelve months.