US solar tracker supplier Array Technologies has bounced back from a difficult 2021 by posting strong Q2 2022 financial results mainly due to its acquisition of STI Norland, while upcoming tailwinds could buoy its performance further still moving through the year.
In Q2, Array executed US$1.9 billion of contracts and awarded orders in the second quarter of this year, up 110% on the same period last year, according to its Q2 2022 financial results.
A total of US$1.5 billion of this amount were from its Array Legacy Operations segment while US$0.4 billion came from STI Norland, which it acquired in January this year to help international expansion plans.
Array’s revenue increased to US$429 million in Q2, up 116% on US$196.5 million for the prior-year period, primarily driven by the acquisition of STI Norland which contributed revenue of US$72.7 million. The rest of the revenue jump was driven by an increase in both the total number of megawatts shipped and an increase in average selling prices (ASP).
“This substantial [revenue] growth is a testament to not only Array’s product and service offerings, but also our ability to provide flexible solutions for our customers in a shifting demand landscape while also maintaining a relentless focus on operational execution,” said Kevin Hostetler, Array Technologies CEO.
Indeed, the results demonstrate the bouncing back that Array expected after a 2021 beset by supply chain challenges and project delays. “This continued progress demonstrates we are on the path to restoring our historical margins as our mix of new, higher priced, contracts continue to improve,” Hostetler added.
Meanwhile, Hostetler expressed reassurance with president Biden’s recent executive order to waive tariffs on solar imports from Southeast Asia for two years and to accelerate the production of clean energy technologies, including PV modules and module components. He said it would help around US$240 million of projects that were designated as at risk, to make forward progress.
Furthermore, if passed, the Inflation Reduction Act (IRA), which includes US$369 billion in energy security and climate change programmes over the next 10 years would also provide clarity on the long-term incentive structure for the solar industry, said Hostetler.
The company’s gross profit increased 131% to US$47.4 million, compared to US$20.5 million in the prior year period, while its gross margin increased to 11.1% from 10.4%, driven by a larger portion of higher priced contracts and the STI acquisition.
“In addition to our top line growth, in the second quarter we also delivered gross margin of 11.1%, which was our third consecutive quarter of improvement,” Hostetler noted.
Adjusted EBITDA increased to US$25.9 million, compared to US$9.9 million for the prior-year period.
Net loss to common stockholders was US$15 million compared to a net loss of US$5.5 million during the same period in the prior year, and basic and diluted loss per share was US$0.10 compared to basic and diluted loss per share of US$0.04 during the same period in the prior year.
Adjusted net income was US$14.2 million compared to adjusted net income of US$3 million during the same period in the prior year.