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FTC Solar Announces First Quarter 2024 Financial Results

FTC Solar, Inc
FTC Solar, Inc

First Quarter Highlights and Recent Developments

  • First quarter revenue of $12.6 million

  • Company remains focused on purchase orders, operational efficiencies, quality and customer service

  • Total backlog now stands at $1.8 billion

  • Continue to expect to achieve quarterly profitability in 2024

AUSTIN, Texas, May 10, 2024 (GLOBE NEWSWIRE) -- FTC Solar, Inc. (Nasdaq: FTCI), a leading provider of solar tracker systems, software and engineering services, today announced financial results for the first quarter ended March 31, 2024.

First Quarter Results
“The company's first-quarter results were in line with our targets,” said Shaker Sadasivam, Chairman of the Board of FTC Solar. "During the quarter, the company remained focused on advancing key initiatives that will support future growth and profitability including improving gross margin potential, lowering the breakeven revenue level, improving business processes and driving customer engagement and purchase orders.”

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Total backlog now stands at approximately $1.8 billion.

Summary Financial Performance: Q1 2024 compared to Q1 2023

 

 

U.S. GAAP

 

 

Non-GAAP

 

 

 

Three months ended March 31,

 

(in thousands, except per share data)

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Revenue

 

$

12,587

 

 

$

40,894

 

 

$

12,587

 

 

$

40,894

 

Gross margin percentage

 

 

(16.7

%)

 

 

5.0

%

 

 

(13.7

%)

 

 

7.3

%

Total operating expenses

 

$

10,394

 

 

$

14,432

 

 

$

8,702

 

 

$

10,053

 

Loss from operations(a)

 

$

(12,502

)

 

$

(12,397

)

 

$

(10,655

)

 

$

(7,152

)

Net loss

 

$

(8,771

)

 

$

(11,762

)

 

$

(10,873

)

 

$

(7,358

)

Diluted loss per share

 

$

(0.07

)

 

$

(0.11

)

 

$

(0.09

)

 

$

(0.07

)

 

(a) Adjusted EBITDA for Non-GAAP

 

Total first-quarter revenue was $12.6 million, coming in at the mid-point of our target range. This revenue level represents a decrease of 45.7% compared to the prior quarter and a decrease of 69.2% compared to the year-earlier quarter, on both lower product and logistics volumes.

GAAP gross loss was $2.1 million, or 16.7% of revenue, compared to gross profit of $0.7 million, or 3.0% of revenue, in the prior quarter. Non-GAAP gross loss was $1.7 million or 13.7% of revenue. The result for this quarter compares to non-GAAP gross profit of $3.0 million in the prior-year period, with the difference driven primarily by the impact of lower current quarter revenues which were not sufficient to cover certain relatively fixed indirect costs.

GAAP operating expenses were $10.4 million. On a non-GAAP basis, operating expenses were $8.7 million, which included a credit loss provision of $0.7 million, primarily related to a specific customer. This result compares to non-GAAP operating expenses of $10.1 million in the year-ago quarter.

GAAP net loss was $8.8 million or $0.07 per share, compared to a loss of $11.2 million or $0.09 per share in the prior quarter and a net loss of $11.8 million or $0.11 per share in the year-ago quarter. Adjusted EBITDA loss, which excludes an approximate $1.9 million net benefit from an earn out on a previously sold investment, less stock-based compensation expense and other non-cash items, was $10.7 million, compared to losses of $10.1 million in the prior quarter and $7.2 million in the year-ago quarter.

Outlook
We expect second quarter 2024 revenue at the mid-point to be slightly up from the first quarter. We continue to expect revenue to be weighted toward the second half of the year, and that the company will approximate breakeven on an Adjusted EBITDA basis in the third quarter and be profitable on that basis in the fourth quarter.

(in millions)

 

1Q'24
Guidance

 

1Q'24
Actual

 

2Q'24
Guidance

Revenue

 

$10.0 – $15.0

 

$12.6

 

$10.5 – $15.5

Non-GAAP Gross Profit

 

$(3.8) – $(1.8)

 

$(1.7)

 

$(3.1) – $(1.1)

Non-GAAP Gross Margin

 

(38%) – (12%)

 

(13.7%)

 

(29.5%) – (7.1%)

Non-GAAP operating expenses

 

$8.0 – $8.9

 

$8.7

 

$8.6 – $9.2

Non-GAAP adjusted EBITDA

 

$(12.6) – $(9.8)

 

$(10.7)

 

$(12.6) – $(9.8)

 

 

 

 

 

 

 

First Quarter 2024 Earnings Conference Call
FTC Solar’s senior management will host a conference call for members of the investment community at 8:30 a.m. E.T. today, during which the company will discuss its first quarter results, its outlook and other business items. This call will be webcast and can be accessed within the Investor Relations section of FTC Solar's website at https://investor.ftcsolar.com. A replay of the conference call will also be available on the website for 30 days following the webcast.

About FTC Solar Inc.
Founded in 2017 by a group of renewable energy industry veterans, FTC Solar is a global provider of solar tracker systems, technology, software, and engineering services. Solar trackers significantly increase energy production at solar power installations by dynamically optimizing solar panel orientation to the sun. FTC Solar’s innovative tracker designs provide compelling performance and reliability, with an industry-leading installation cost-per-watt advantage.

Footnotes

1. The term ‘backlog’ or ‘contracted and awarded’ refers to the combination of our executed contracts and awarded orders, which are orders that have been documented and signed through a contract, where we are in the process of documenting a contract but for which a contract has not yet been signed, or that have been awarded in writing or verbally with a mutual understanding that the order will be contracted in the future. In the case of certain projects, including those that are scheduled for delivery on later dates, we have not locked in binding pricing with customers, and we instead use estimated average selling price to calculate the revenue included in our contracted and awarded orders for such projects. Actual revenue for these projects could differ once contracts with binding pricing are executed, and there is also a risk that a contract may never be executed for an awarded but uncontracted project, or that a contract may be executed for an awarded but uncontracted project at a date that is later than anticipated, or that a contract once executed may be subsequently amended, supplemented, rescinded, cancelled or breached, including in a manner that impacts the timing and amounts of payments due thereunder, thus reducing anticipated revenues. Please refer to our SEC filings, including our Form 10-K, for more information on our contracted and awarded orders, including risk factors.

 

Forward-Looking Statements
This press release contains forward looking statements. These statements are not historical facts but rather are based on our current expectations and projections regarding our business, operations and other factors relating thereto. Words such as “may,” “will,” “could,” “would,” “should,” “anticipate,” “predict,” “potential,” “continue,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates” and similar expressions are used to identify these forward-looking statements. These statements are only predictions and as such are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. You should not rely on our forward-looking statements as predictions of future events, as actual results may differ materially from those in the forward-looking statements because of several factors, including those described in more detail above and in our filings with the U.S. Securities and Exchange Commission, including the section entitled “Risk Factors” contained therein. FTC Solar undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events or changes in its expectations, except as required by law.

FTC Solar Investor Contact:
Bill Michalek
Vice President, Investor Relations
FTC Solar
T: (737) 241-8618
E: IR@FTCSolar.com


FTC Solar, Inc.
Condensed Consolidated Statements of Comprehensive Loss
(unaudited)

 

 

Three months ended March 31,

 

(in thousands, except shares and per share data)

 

2024

 

 

2023

 

Revenue:

 

 

 

 

 

 

Product

 

$

10,905

 

 

$

32,579

 

Service

 

 

1,682

 

 

 

8,315

 

Total revenue

 

 

12,587

 

 

 

40,894

 

Cost of revenue:

 

 

 

 

 

 

Product

 

 

12,367

 

 

 

31,767

 

Service

 

 

2,328

 

 

 

7,092

 

Total cost of revenue

 

 

14,695

 

 

 

38,859

 

Gross profit (loss)

 

 

(2,108

)

 

 

2,035

 

Operating expenses

 

 

 

 

 

 

Research and development

 

 

1,439

 

 

 

1,922

 

Selling and marketing

 

 

2,388

 

 

 

1,711

 

General and administrative

 

 

6,567

 

 

 

10,799

 

Total operating expenses

 

 

10,394

 

 

 

14,432

 

Loss from operations

 

 

(12,502

)

 

 

(12,397

)

Interest expense, net

 

 

(136

)

 

 

(58

)

Gain from disposal of investment in unconsolidated subsidiary

 

 

4,085

 

 

 

898

 

Other income (expense), net

 

 

36

 

 

 

(74

)

Loss from unconsolidated subsidiary

 

 

(265

)

 

 

 

Loss before income taxes

 

 

(8,782

)

 

 

(11,631

)

(Provision for) benefit from income taxes

 

 

11

 

 

 

(131

)

Net loss

 

 

(8,771

)

 

 

(11,762

)

Other comprehensive loss:

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(181

)

 

 

(5

)

Comprehensive loss

 

$

(8,952

)

 

$

(11,767

)

Net loss per share:

 

 

 

 

 

 

Basic and diluted

 

$

(0.07

)

 

$

(0.11

)

Weighted-average common shares outstanding:

 

 

 

 

 

 

Basic and diluted

 

 

125,569,375

 

 

 

106,791,198

 


FTC Solar, Inc.
Condensed Consolidated Balance Sheets
(unaudited)

(in thousands, except shares and per share data)

 

March 31,
2024

 

 

December 31,
2023

 

ASSETS

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

14,041

 

 

$

25,235

 

Restricted cash

 

 

1,896

 

 

 

 

Accounts receivable, net

 

 

66,379

 

 

 

65,279

 

Inventories

 

 

3,844

 

 

 

3,905

 

Prepaid and other current assets

 

 

14,069

 

 

 

14,089

 

Total current assets

 

 

100,229

 

 

 

108,508

 

Operating lease right-of-use assets

 

 

1,637

 

 

 

1,819

 

Property and equipment, net

 

 

1,994

 

 

 

1,823

 

Intangible assets, net

 

 

399

 

 

 

542

 

Goodwill

 

 

7,213

 

 

 

7,353

 

Equity method investment

 

 

1,010

 

 

 

240

 

Other assets

 

 

2,548

 

 

 

2,785

 

Total assets

 

$

115,030

 

 

$

123,070

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

12,059

 

 

$

7,979

 

Accrued expenses

 

 

29,690

 

 

 

34,848

 

Income taxes payable

 

 

27

 

 

 

88

 

Deferred revenue

 

 

4,897

 

 

 

3,612

 

Other current liabilities

 

 

7,859

 

 

 

8,138

 

Total current liabilities

 

 

54,532

 

 

 

54,665

 

Operating lease liability, net of current portion

 

 

934

 

 

 

1,124

 

Other non-current liabilities

 

 

4,406

 

 

 

4,810

 

Total liabilities

 

 

59,872

 

 

 

60,599

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

Preferred stock par value of $0.0001 per share, 10,000,000 shares authorized; none issued as of March 31, 2024 and December 31, 2023

 

 

 

 

 

 

Common stock par value of $0.0001 per share, 850,000,000 shares authorized; 125,952,253 and 125,445,325 shares issued and outstanding as of March 31, 2024 and December 31, 2023

 

 

13

 

 

 

13

 

Treasury stock, at cost; 10,762,566 shares as of March 31, 2024 and December 31, 2023

 

 

 

 

 

 

Additional paid-in capital

 

 

363,525

 

 

 

361,886

 

Accumulated other comprehensive loss

 

 

(474

)

 

 

(293

)

Accumulated deficit

 

 

(307,906

)

 

 

(299,135

)

Total stockholders’ equity

 

 

55,158

 

 

 

62,471

 

Total liabilities and stockholders’ equity

 

$

115,030

 

 

$

123,070

 


FTC Solar, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)

 

 

Three months ended March 31,

 

(in thousands)

 

2024

 

 

2023

 

Cash flows from operating activities

 

 

 

 

 

 

Net loss

 

$

(8,771

)

 

$

(11,762

)

Adjustments to reconcile net loss to cash used in operating activities:

 

 

 

 

 

 

Stock-based compensation

 

 

1,639

 

 

 

4,890

 

Depreciation and amortization

 

 

404

 

 

 

334

 

Amortization of debt issue costs

 

 

177

 

 

 

177

 

Provision for obsolete and slow-moving inventory

 

 

177

 

 

 

1,261

 

Loss from unconsolidated subsidiary

 

 

265

 

 

 

 

Gain from disposal of investment in unconsolidated subsidiary

 

 

(4,085

)

 

 

(898

)

Warranty and remediation provisions

 

 

838

 

 

 

1,543

 

Warranty recoverable from manufacturer

 

 

98

 

 

 

(54

)

Credit losses and bad debt expense (credits)

 

 

670

 

 

 

 

Deferred income taxes

 

 

225

 

 

 

216

 

Lease expense and other

 

 

309

 

 

 

229

 

Impact on cash from changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(1,770

)

 

 

(11,412

)

Inventories

 

 

(116

)

 

 

5,078

 

Prepaid and other current assets

 

 

45

 

 

 

817

 

Other assets

 

 

(226

)

 

 

(882

)

Accounts payable

 

 

3,989

 

 

 

7,882

 

Accruals and other current liabilities

 

 

(6,200

)

 

 

(616

)

Deferred revenue

 

 

1,285

 

 

 

(2,677

)

Other non-current liabilities

 

 

(523

)

 

 

(2,212

)

Lease payments and other, net

 

 

(287

)

 

 

(230

)

Net cash used in operations

 

 

(11,857

)

 

 

(8,316

)

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(432

)

 

 

(28

)

Equity method investment in Alpha Steel

 

 

(1,035

)

 

 

(900

)

Proceeds from disposal of investment in unconsolidated subsidiary

 

 

4,085

 

 

 

898

 

Net cash provided by (used in) investing activities

 

 

2,618

 

 

 

(30

)

Cash flows from financing activities:

 

 

 

 

 

 

Sale of common stock

 

 

 

 

 

5,450

 

Stock offering costs paid

 

 

 

 

 

(32

)

Proceeds from stock option exercises

 

 

 

 

 

51

 

Net cash provided by financing activities

 

 

 

 

 

5,469

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

 

(59

)

 

 

(15

)

Decrease in cash, cash equivalents and restricted cash

 

 

(9,298

)

 

 

(2,892

)

Cash and cash equivalents at beginning of period

 

 

25,235

 

 

 

44,385

 

Cash, cash equivalents and restricted cash at end of period

 

$

15,937

 

 

$

41,493

 

 

 

 

 

 

 

 

 

 

Notes to Reconciliations of Non-GAAP Financial Measures to Nearest Comparable GAAP Measures
We present Non-GAAP gross profit (loss), Non-GAAP operating expense, Adjusted EBITDA, Adjusted Net Loss and Adjusted EPS as supplemental measures of our performance. We define Adjusted EBITDA as net loss plus (i) provision for (benefit from) income taxes, (ii) interest expense, net (iii) depreciation expense, (iv) amortization of intangibles, (v) stock-based compensation, and (vi) non-routine legal fees, severance and certain other costs (credits). We also deduct the contingent gains from the disposal of our investment in an unconsolidated subsidiary from net loss in arriving at Adjusted EBITDA. We define Adjusted Net Loss as net loss plus (i) amortization of debt issue costs and intangibles, (ii) stock-based compensation, (iii) non-routine legal fees, severance and certain other costs (credits), and (iv) the income tax expense (benefit) of those adjustments, if any. We also deduct the contingent gains from the disposal of our investment in an unconsolidated subsidiary from net loss in arriving at Adjusted Net Loss. Adjusted EPS is defined as Adjusted Net Loss on a per share basis using our weighted average diluted shares outstanding.

Non-GAAP gross profit (loss), Non-GAAP operating expense, Adjusted EBITDA, Adjusted Net Loss and Adjusted EPS are intended as supplemental measures of performance that are neither required by, nor presented in accordance with, U.S. generally accepted accounting principles (“GAAP”). We present these non-GAAP measures, many of which are commonly used by investors and analysts, because we believe they assist those investors and analysts in comparing our performance across reporting periods on an ongoing basis by excluding items that we do not believe are indicative of our core operating performance. In addition, we use Adjusted EBITDA, Adjusted Net Loss and Adjusted EPS to evaluate the effectiveness of our business strategies.

Non-GAAP gross profit (loss), Non-GAAP operating expense, Adjusted EBITDA, Adjusted Net Loss and Adjusted EPS should not be considered in isolation or as substitutes for performance measures calculated in accordance with GAAP, and you should not rely on any single financial measure to evaluate our business. These Non-GAAP financial measures, when presented, are reconciled to the most closely applicable GAAP measure as disclosed below.

The following table reconciles Non-GAAP gross profit (loss) to the most closely related GAAP measure for the three months ended March 31, 2024 and 2023, respectively:

 

 

Three months ended March 31,

 

(in thousands, except percentages)

 

2024

 

 

2023

 

U.S. GAAP revenue

 

$

12,587

 

 

$

40,894

 

U.S. GAAP gross profit (loss)

 

$

(2,108

)

 

$

2,035

 

Depreciation expense

 

 

168

 

 

 

124

 

Stock-based compensation

 

 

216

 

 

 

816

 

Non-GAAP gross profit (loss)

 

$

(1,724

)

 

$

2,975

 

Non-GAAP gross margin percentage

 

 

(13.7

%)

 

 

7.3

%

 

 

 

 

 

 

 

 

 

The following table reconciles Non-GAAP operating expenses to the most closely related GAAP measure for the three months ended March 31, 2024 and 2023, respectively:

 

 

Three months ended March 31,

 

(in thousands)

 

2024

 

 

2023

 

U.S. GAAP operating expenses

 

$

10,394

 

 

$

14,432

 

Depreciation expense

 

 

(102

)

 

 

(70

)

Amortization expense

 

 

(134

)

 

 

(140

)

Stock-based compensation

 

 

(1,423

)

 

 

(4,074

)

Non-routine legal fees

 

 

(33

)

 

 

(108

)

Severance

 

 

 

 

 

13

 

Non-GAAP operating expenses

 

$

8,702

 

 

$

10,053

 

 

 

 

 

 

 

 

 

 

The following table reconciles Non-GAAP Adjusted EBITDA to the related GAAP measure of loss from operations for the three months ended March 31, 2024 and 2023, respectively:

 

 

Three months ended March 31,

 

(in thousands)

 

2024

 

 

2023

 

U.S. GAAP loss from operations

 

$

(12,502

)

 

$

(12,397

)

Depreciation expense

 

 

270

 

 

 

194

 

Amortization expense

 

 

134

 

 

 

140

 

Stock-based compensation

 

 

1,639

 

 

 

4,890

 

Non-routine legal fees

 

 

33

 

 

 

108

 

Severance

 

 

 

 

 

(13

)

Other income (expense), net

 

 

36

 

 

 

(74

)

Loss from unconsolidated subsidiary

 

 

(265

)

 

 

 

Adjusted EBITDA

 

$

(10,655

)

 

$

(7,152

)

 

 

 

 

 

 

 

 

 

The following table reconciles Non-GAAP Adjusted EBITDA and Adjusted Net Loss to the related GAAP measure of net loss for the three months ended March 31, 2024 and 2023, respectively:

 

 

Three months ended March 31,

 

 

 

2024

 

 

2023

 

(in thousands, except shares and per share data)

 

Adjusted
EBITDA

 

 

Adjusted
Net Loss

 

 

Adjusted
EBITDA

 

 

Adjusted
Net Loss

 

Net loss per U.S. GAAP

 

$

(8,771

)

 

$

(8,771

)

 

$

(11,762

)

 

$

(11,762

)

Reconciling items –

 

 

 

 

 

 

 

 

 

 

 

 

Provision for (benefit from) income taxes

 

 

(11

)

 

 

 

 

 

131

 

 

 

 

Interest expense, net

 

 

136

 

 

 

 

 

 

58

 

 

 

 

Amortization of debt issue costs in interest expense

 

 

 

 

 

177

 

 

 

 

 

 

177

 

Depreciation expense

 

 

270

 

 

 

 

 

 

194

 

 

 

 

Amortization of intangibles

 

 

134

 

 

 

134

 

 

 

140

 

 

 

140

 

Stock-based compensation

 

 

1,639

 

 

 

1,639

 

 

 

4,890

 

 

 

4,890

 

Gain from disposal of investment in unconsolidated subsidiary(a)

 

 

(4,085

)

 

 

(4,085

)

 

 

(898

)

 

 

(898

)

Non-routine legal fees(b)

 

 

33

 

 

 

33

 

 

 

108

 

 

 

108

 

Severance

 

 

 

 

 

 

 

 

(13

)

 

 

(13

)

Adjusted Non-GAAP amounts

 

$

(10,655

)

 

$

(10,873

)

 

$

(7,152

)

 

$

(7,358

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Non-GAAP net loss per share (Adjusted EPS):

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

N/A

 

 

$

(0.09

)

 

N/A

 

 

$

(0.07

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

N/A

 

 

 

125,569,375

 

 

N/A

 

 

 

106,791,198

 

 

(a) Our management excludes the gain from collections of contingent contractual amounts from the sale in 2021 of our investment in an unconsolidated subsidiary.

(b) Non-routine legal fees represent legal fees and other costs incurred for specific matters that were not ordinary or routine to the operations of the business.