FTC Solar on ‘cusp of profitability’ as revenue exceeds expectations, announces acquisition of HX Tracker

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FTC Solar said the acquisition of HX Tracker will help it access more business in international markets. Image: FTC Solar

US-headquartered solar tracker manufacturer FTC Solar said it was “on the cusp of profitability” after its revenue for Q4 2021 came in above the high end of its recently downgraded guidance. It also announced it had entered an agreement to acquire Chinese tracker company HX Tracker.

Its Q4 and full year financial results released today showed FTC Solar brought in US$101.7 million in Q4, up 92% on Q3 and at the high end of its guidance, although this was downgraded in November amidst PV project pushbacks in the US.

FTC Solar said the higher end guidance was surpassed because of accelerated production and product delivery, which pulled forward revenue it had anticipated in Q1 this year.

Its CEO and president Sean Hunkler put the growth down to increased customer penetration, the winning of international contracts, the launch of higher margin products and an increased steel efficiency of 20% as well as its initial public offering (IPO).

The company recorded a net loss of US$23.9 million in Q4, with this rising to US$106.6 million for the year ending 31 December, the results showed. This capped a difficult year for FTC Solar which in August confirmed that it had made a non-GAAP loss of US$16.97 million in the three months ended 30 June 2021.

Hunkler said that 2021 was a “perfect storm” of cost pressures but that the company had taken “significant actions” to control losses and advance margin improvement.

“We believe we’re on the cusp of profitability with significant growth and margin improvement ahead,” he added.

Meanwhile, the Texas-based company announced that it had entered into an agreement to acquire Chinese tracker supplier HX Tracker for US$4.3 million and 1.4 million shares. HX Tracker has roughly 20GW of pipeline opportunities, according to FTC Solar.

The acquisition – expected to close in Q2 – will help accelerate the FTC’s international expansion through HX Tracker’s international presence in China, the Middle East, Africa and other international markets, the company said.  

Formed in 2019, HX Tracker supplies 1P tracker systems that have been designed with a lower steel content and which are “optimised for low-labour cost international markets”, FTC Solar said.

“This is a strong complement to FTC Solar’s 2P tracker that is designed to be truly differentiated based on its ease of construction and reduced labour hours, which is most advantageous in higher labour cost markets.”

“Overall, we estimate the transaction can generate US$4 million of EBITDA accretion in 2023, and US$7 million in 2024,” said FTC Solar.

FTC Solar’s outlook remains unchanged for 2022 as it retains its mid-point target of a 62% growth in revenue, which the company said would “outpace the overall growth of the market”.

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