Greetings. Welcome to Array Technologies' third quarter 2025 Arnings Call. At this time, all participants are in lesson-only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Sarah Shepard, Investor Relations at Array. Please go ahead.

Thank you. I would like to welcome everyone to Array Technologies' third quarter 2025 earnings conference call. I am joined on this call by Kevin Hostetler, our CEO, Keith Jennings, our CFO, and Neil Manning, our President and COO. Today's call is being webcast via our investor relations site at ir.arraytechinc.com, where the related presentation and press release are also available. In addition, the press release and the presentation detailing our quarterly results have been posted on the website. Today's discussion of financial results includes non-GAAP measures. The reconciliation of GAAP to non-GAAP financial measures can be found in the related presentation and on our website. We encourage you to visit our website at ArrayTechInc.com for the most current information on our company. As a reminder, the matters we are discussing today include forward-looking statements regarding market demand and supply, our expected results, and other matters. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from statements made on this call. We refer you to the documents we file with the SEC, including our most recent Form 10-K, for a discussion of risks that may affect our future results. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. We are under no duty to update any of the forward-looking statements to conform these statements to actual results, except as required by law. I'll now turn the call over to Kevin.

Thank you, Sarah.

Good afternoon, everyone, and thank you for joining us. I'll begin with some highlights on the quarter and updates on on our APA acquisition and our commercial momentum. Then Neil Manning, our President and Chief Operating Officer, will provide some supply chain and operational updates for the quarter. Keith Jennings, our Chief Financial Officer, will then provide detailed commentary on our third quarter 2025 financial performance and updates on our full year 2025 financial guidance. Then we'll open the lineup for your questions. I'll begin on slide five. We are thrilled to announce another exceptional quarter of commercial, operational, and financial performance. Our revenue reached $393 million, marking an impressive 70% year-over-year revenue growth driven by a 56% increase in volume in the quarter. The completion of the APA acquisition midway through the quarter contributed approximately $17 million in revenues to our results. When we assess our performance from a year-to-date standpoint, we have already generated over $1 billion of revenue, surpassing our total annual revenue from 2024, and we have grown volume an impressive 74% year-over-year. This outcome highlights our team's steadfast dedication and resilience, effectively navigating the uncertain regulatory environment in fluctuating market conditions. We saw sequential adjusted gross margin improvement quarter over quarter, driven by outperformance in our ATI business. Our bottom line performance remains outstanding with significant net income improvement year over year and an adjusted EBITDA result of $72 million. This achievement, driven by strong execution and substantial volume growth, marks our second highest quarter of adjusted EBITDA on record. Finally, our commercial momentum continued this quarter as we posted sequential order book growth and a book-to-bill ratio of greater than one. Our diverse portfolio of products, services, and software offerings continues to win, and our robust bookings are a testament to the time and effort invested in our relationships with critical Tier 1 customers. We are particularly pleased with the market's adoption of our latest new product offerings, Omnitrack, Skylink, and Hale XP. And we note that these three recently launched products already account for nearly 40 percent of our order book it's important to note that this quarter's order book result of 1.9 billion dollars does not yet include apa's backlog as we continue to align and harmonize our commercial policies we expect to add their customer orders to our metric by year end further we should note that as we've taken a more conservative approach to the addition of international orders to our order book. Our quarter-ending order book represents over 95% domestic business. Turning to slide 6, I want to briefly touch on our integration of APA and provide some exciting product and commercial updates. Although we are in the early stages of our APA integration, we are very pleased with their recent commercial progress and pipeline growth. Although only a couple of months in, we remain on schedule with our internal objectives and are seeing strong collaboration across our teams. Our priority is to maintain seamless business operations as we align processes and systematically realize synergies. As you would expect, we have taken meaningful steps to achieve our targeted procurement efficiencies by utilizing Array's scale and established supplier partnerships to drive these future benefits. We also recently introduced a unified sales strategy for customer engagement and quoting, empowering both the Array and APA teams to seamlessly offer the full Array and APA product portfolios. This collaboration will deliver greater optionality and value to our customers and unlock significant growth in our share of wallet and total addressable market. APA is already benefiting from Array support with notable momentum in larger utility scale project opportunities across both engineered foundations and fixed tilt systems. Array's strong market credibility and bankability are unlocking new growth channels for APA and we are actively pursuing those prospects. We are also laser-focused on enhancing our competitive advantage and accelerating our strategic product roadmap. Our co-development of a suite of integrated tracker and foundation solutions is well underway, and we expect these innovative solutions for customers to be available in the second half of 2026. Finally, APA's innovation pipeline in engineered foundations and fixed tilt mounting systems remains robust and continues to position APA for sustained growth across its product categories. We look forward to sharing more color about APA's exciting strategic initiatives when we provide our 2026 guidance. Turning to slide seven, I'll focus a bit more on our recent commercial momentum and how that is translating to our expected future growth. Although some regulatory uncertainty persists this year, we continue to observe strong fundamental demand as we stay in close contact with our customers and assess their project pipelines. One indication of that underlying demand, our early stage project pipeline, has impressively achieved double-digit expansion year to date. We remain committed to providing flexibility, helping our customers adapt to changing market conditions by offering a wide range of sourcing options and a broad product portfolio catered to customer feedback. We view this expansion of our funnel as a good indication of our momentum as we close out the year and head into 2026. Our ongoing commitment to customer engagement continues to enhance both the quality and mix of our order book. This year, we have connected with over 300 customers and industry partners through array days and insurance forms, and we continue to receive outstanding feedback on our enhanced customer engagement. As we strengthen our partnerships with major Tier 1 customers, we're increasingly engaging in conversations around larger volume commitment agreements, fueling our optimism for 2026 and beyond. A recent proof point is our Q4 award of a multi-year, multi-gigawatt portfolio with an independent power producer underscoring the momentum behind our growth strategy. By clearly communicating the value proposition of our product portfolio, we have deepened customer understanding of the advantages that our unique and patented technology delivers, particularly in reducing LCOE and mitigating severe weather risks the strong demand for our latest products is evident with these offerings now representing 40% of our total order book this quarter as previously noted alongside this rapid new product adoption our smart track software deployments have accelerated significantly in fact the number of active installations for hail alert response and backtracking and diffuse use, underway, now exceeds our entire historical installed base, and we expect this traction to continue. Looking ahead to 2026 and beyond, we remain highly optimistic about the demand environment. For next year, we anticipate delivering both organic growth within our core array business and inorganic growth with the integration of APA. This outlook is underpinned by a robust order book and are improving book-to-bill momentum. While it is still early in the fourth quarter, we expect to finish the year with strong bookings and further order book expansion. Notably, our current order book is predominantly comprised of domestic projects reflecting verbal awards and contracts with high-quality customers. Internationally, we are making steady commercial progress in our selected targeted regions. Importantly, as noted earlier, we have taken a conscious approach regarding the inclusion of international verbal awards in our order book to mitigate any potential risk of de-bookings. We look forward to providing updates on these pivotal projects when we give a more fulsome update on our 2026 guidance. Overall, the progress achieved this year reinforces our confidence as our commercial engine is operating at full strength, our new products, which originated from direct customer engagement, are delivering, and our supply chain organization is providing the ultimate flexibility for our customers in a time of uncertainty. These factors are producing strong year-over-year growth in revenues and volumes. I'll now turn it over to Neil to discuss some important supply chain updates.

Thank you, Kevin. Let's turn to slide eight. I'd like to provide an update on our supply chain performance and how we're navigating the evolving tariff landscape to deliver strong results for our customers and shareholders. Our team has proactively executed a flexible supply chain strategy that's focused on optimizing costs and maintaining high service levels for our customers. As you know, the global tariff environment remains highly uncertain and dynamic with new regulations and rate changes emerging across multiple regions on almost a weekly basis our approach centers on resiliency and adaptability resource from over 50 domestic and 100 international suppliers giving us the agility to optimize our bill of materials between domestic and imported components to meet the specific needs of our customers this flexibility allows us to offer our 100 domestic content tracker for treasury guidance leveraging over 40 gigawatts of u.s supplier capacity this also allows us to optimize incentives and routings drive the lowest landed cost and best outcome for our customers for example when customers don't require domestic content in some cases it remains optimal to import a particular component and pay the tariff to attain the lowest landed cost for a project with the opening of our new and expanded albuquerque facility and the addition of apa's ohio manufacturing which we also intend to expand our domestic capabilities continue to strengthen. We're exploring optionality for enhanced manufacturing geographies to offer greater flexibility to our customers between our domestic locations. A key factor shaping our supply chain strategy this year has been the Section 232 tariffs on steel and aluminum. These tariffs have significantly increased costs for imported steel and aluminum products, sometimes doubling the tariff rate on certain goods. Further, the imported steel and aluminum tariffs created headroom for domestic steel and aluminum suppliers to raise their pricing numerous times throughout 2025. For example, steel peaked at more than 35 percent higher since January 20th, Inauguration Day, and now sits roughly 17 percent higher. Our team has responded by negotiating tariff relief for the suppliers, leveraging domestic sourcing and utilizing USMCA derivative rules to minimize exposure. As part of our longstanding US-centric supply chain strategy, we've historically supplied the majority of our torque tubes domestically, with some exceptions for West Coast projects. However, now, just about all of our torque tubes and stampings have transitioned to US suppliers, and we're on track to onshore dampers by the end of the year. These actions have resulted in cost avoidance, risk mitigation, and further limited our exposure to tariff impacts. Additionally, many onshore components qualify for 45X IRA credits that further enables our domestic manufacturing and supply chain. When it comes to tariffs overall, our strategy is both active and forward-looking. We've maximized our scale to drive cost and lead time optimization, and we've negotiated tariff pass-through agreements with certain suppliers to streamline recovery processes. Tariffs are now incorporated into our upfront quotes, ensuring transparency and predictability for our customers. Through these efforts, we've continuously reduced our tariff exposure, now expecting, by the end of the year, less than 14 percent of the typical bill of materials to expose to tariff impacts. For example, our on-shoring initiatives are expected to reduce our exposure to India by roughly 50 percent by year-end. Additionally, we have achieved significant cost avoidance through supplier negotiations in Mexico and Thailand, allowing us to continue to flex between U.S. and international sources to ensure the lowest land of cost for our customers. Our supply chain team has demonstrated exceptional agility in responding to tariff changes, negotiating relief, and capturing value for a RAG. Proactive supply chain strategies and robust tariff management have enabled us to navigate a complex market environment limit the impact of tariffs and deliver on our commitments to customers with that i'll now turn over to keith to provide more details on our third quarter results keith thank you neil good afternoon i will begin on slide 10. we had an exceptional third quarter revenue was 393 million dollars representing growth of 70 percent above the prior year quarter and 9% sequentially.

Our recently closed acquisition of APA contributed $17 million and we had approximately $30 million of pull-ins from the fourth quarter into this quarter. As Kevin noted, our 2025 year-to-date revenue of over $1 billion has surpassed the full-year 2024 revenues of $960 million staying on track to post an outstanding year. Our continued sustainable growth will be supported by the ability to drive volume, optimize geographic focus, and our business mix along with contributions from the acquisition of APA. Sequentially, ASPs were higher in both our ATI and SDI segments, aligned with the forecasted effect of rising commodity prices experienced earlier in the year. Delivered volume measured in megawatts of generation capacity for the quarter increased by 56% over the prior year quarter, continuing our strong momentum with year-to-date volume of an impressive 74% over the prior year. In the third quarter, adjusted gross profit increased 35% year-over-year to $111 million, representing an adjusted gross margin of 28.1%. The net effect of the revenue pull-in from the fourth quarter was about $9 million of adjusted gross profit and $0.04 of EPS pulled forward. When compared to the prior year, gross margins declined primarily due to the fall-off of the prior year 45X amortization benefit, commodities inflation relative to ASB increases, and approximately 110 basis points of tariff drag in the quarter. Sequentially, adjusted gross margin improved by 30 basis points, primarily due to a higher mix of domestic projects and ASB improvements through product mix with an offset from lower international shipments, primarily in Brazil. APA also had a slight diluted impact on overall adjusted gross margin in the quarter of about 20 basis points. Anticipated 45x benefits and the outcomes of our supply chain synergy initiatives are expected to provide ample opportunity to transition this to an accretive impact in the near future. Adjusted SG&A was $39 million, just under 10% of revenues. This rate compares favorably to the adjusted SG&A of $36 million in the third quarter of 2024, which was 15.5% of revenue. We continue to achieve operating leverage from top-line growth through our relentless focus on operational efficiency and process improvement while making meaningful investments in the customer-facing touchpoints. Adjusted EBITDA was $72 million, with an adjusted EBITDA margin of 18.3%. This represents 55% earnings growth when compared to adjusted EBITDA of $47 million and adjusted EBITDA margin of 20% in the third quarter of 2024. Sequentially, adjusted EBITDA earnings grew 14% with adjusted EBITDA margin improving 80 basis points driven by the next shift towards higher ASB domestic sales. Gap net income attributable to common stockholders in the third quarter was $18 million compared to a net loss of $155 million in the prior year. Sequentially, net income declined $10 million from the second quarter of 2025, which included the additional gain from repurchasing a portion of our 2028 convertible notes at a discount last quarter. Diluted income per share was $0.12 compared to the diluted loss per share of $1.02 in the prior year, which was primarily driven by the goodwill impairment taken in the quarter. Adjusted net income was $46 million, 73% growth above the $26 million in the third quarter of 2024. Adjusted diluted net income per share was $0.30 compared to $0.17 in the prior year and $0.25 in the second quarter. During the quarter, net cash generated by operating activities was $27 million. Net cash used for investing activities in the quarter was $170 million primarily driven by the acquisition of APA and the ongoing investment in our new Albuquerque manufacturing facility. Free cash flow for the period was $22 million, bringing the year-to-date total to $44 million and generally in line with our seasonal expectations. Slide 12 provides an update on our leverage and liquidity position following the completion of the APA solar acquisition in the quarter. We ended the quarter with $222 million in total cash on hand and total liquidity of over $365 million, including availability under our undrawn revolver. We ended the quarter with a net debt leverage ratio of 2.1 times trailing 12 months adjusted EBITDA. Our exceptional agility and strong balance sheet position us well to capitalize on emerging opportunities and drive sustained growth, giving us greater confidence in our future performance. Finally, on slide 13, we have updated our full year 2025 guidance. Given our strong performance and the inclusion of APA, we are raising our full year revenue guidance and updating midpoints on several key indicators. We expect full-year 2025 revenue within the range of $1.25 to $1.28 billion, increasing the midpoint of our range by over $60 million, inclusive of approximately $50 million of revenue from APA. We expect adjusted gross margin within the range of 27 to 28%. This includes a negative impact of accounting for tariff pass-through, the gross margin dilution from APA, delayed international project commissioning pushing on high margin software revenues, and inflationary pressures impacting both inventory and logistics costs. Adjusted G&A is expected to range between $160 to $165 million, primarily due to the inclusion of the APA business and our incremental investments ahead of the anticipated growth in 2026. Adjusted EBITDA is expected to range between $185 and $195 million, with adjusted diluted earnings per share forecasted to be in the range of $0.64 to $0.70. Pre-cash flow is expected to come in at approximately $100 million for 2025, slightly lower than previously expected, primarily due to acquisition-related expenses and timing of some 45X collections and customer deposits shifting into 2026. Capital expenditures are now expected to be approximately $20 million and primarily driven by project timing at our new Albuquerque facility. Looking ahead, we are exceptionally well positioned with approximately $1.9 billion of backlog, added capabilities to seize new opportunities, deliver industry-leading growth, and create lasting value for our shareholders. Thank you for your time today. Now back to Kevin for closing remarks.

Thank you, Keith. To sum up, this quarter's results reflect our team's disciplined execution and our ability to adapt and lead in a dynamic market. With our strong financial position, robust and increasing order book, and ongoing innovation, we remain confident in our strategy and our capacity to deliver sustained value going forward. Thank you for your continued support.

And with that, I'll now open the call for your questions.

Thank you sir.

We will now be conducting a question and answer session. If you would like to ask a question, please press star then one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star and then two if you would like to remove your question from the queue. Please note participants are limited to one question at a time. The first question that we have today comes comes from Mark Strauss of JPMorgan Chase & Co. Please go ahead.

Yes, good afternoon.

Thank you very much for taking our questions.

The first one, Kevin, I appreciate your comments about continued growth in 2026, but just with another couple of months under your belt since RE Plus, I'm just curious if you can kind of paint a picture for us how you're thinking about the next several years now with uh safe harbor out of the way thank you yeah i think mark we're returning to a period of more normalized flow of business at this point um as i made many comments that are plus about me not expecting this big windfall of safe harbor we really didn't expect that as our order book has changed over the last couple of years to have

many many more tier one customers we made the comment last quarter that over 50 of the order book is what we would call tier one. And at that point, these tier one customers have already safe harbored through 29 and 30. So we didn't expect this influx of safe harbor. So the orders we're receiving now are much more normalized demand for the next couple of years. And we feel that's a much better position to be in. We feel that's back to kind of a historical norm rather than have any, you know, any artificial pull in or pull forward driven by regulatory issues. So we feel really good about what we're seeing we feel really good about our win rate you know the the commentary I made about the multi gig of what multi year piece and there's a great example that to be clear that's not in the backlog or order book at this point for the numbers we've reflected that 1.9 billion was as of the end of Q3 and while we endeavored to get have that land in Q3 we certainly didn't want to push the customer too hard we're able to get that landed here in Q4 so we feel really good about that type of momentum and the fact that we're winning larger orders and more bundles of orders at this point okay

I might follow up with on that one offline Keith the the implied 4Q guide for for EBITDA margins a bit lower than history you thought you talked about some of the the factors that are influencing that i'm just i'm curious i know you're not going to give formal 2026 guidance yet but kind of looking a bit further beyond 4q of 2025 how should we think about the the cadence of EBITDA margin thank you thank you for the questions um 4q is i would call drop quarter it is affected primarily by lower revenue volumes than anything else

and so you know with that we are losing a bit of P&L leverage in the quarter I would at this point you know say that we are very happy with how the year is shaping up and how the full year guidance is holding from where we've guided it in Q3 and earlier and then added APA. In terms of how we are looking forward, I would say that aligned with Kevin's comments about our confidence in the order book, when I look at it, I looked at it this morning and I was surprised not surprised but it was a confirmatory view that greater than 50 percent of the order book is now not EPCs so which means that our expansion into different customer base IPPs utilities and developers are taking hold and so I think that when I think about the margin profile going into 2026 I I think where we will close this year is something that we will try to find good opportunities to hold. So we are guided towards 27 to 28 on the full year. I can't think of any reason other than massive inflation and tariffs that could pull us off that trajectory right now.

I think, Mark, one of the things I'll add to that, just to explain the cyclicality, if you go back historically, you know, Array, when you have a disproportionate focus on North America, you have your build season as Q2 and Q3 when we're shipping. Those are typically the highest quarters. And then you slow down going into winter. What is different in the last couple of years is we had STI Brazil, which was our second largest operating segment. And when you think about that, their construction is counter cyclical to North America, right? So that always added to our Q4 and Q1 as Brazil is is not operating on full cylinders due to all the issues we've talked about on previous calls you don't have that additional layer to bowie up Q4 and Q1 so then you're really focusing on disproportionate North American business in Q4 and Q1 which has that cyclicality before the big build in Q2 and Q3 which again you've known our business for several years that's much more akin to the historical flow of the business and to the North America construction season.

Thank you.

Thank you. The next question we have comes from Joseph Osha of Guggenheim Securities. Please go ahead.

Thank you and congratulations on the solid quarter. Two questions. First, am I doing my math right in understanding that, you know, Essentially, adjusting for APA, you've added about $10 million in non-APA revenue to your guide for the year. Am I getting that right?

Hi, Joe. Yes, you're getting that right.

And did I also hear that you had about $30 million in tracker revenue come from what you'd expected from Q4 into Q3?

Yes.

Okay. So that kind of puts more pressure on Q4 in terms of margins. Just getting my puts and takes right. Other question, I don't imagine you want to give a number, but doing some math and thinking about this multi-gigawatt award that you just talked about, can we fairly say that we can perhaps expect this $1.9 billion visibility number to be up again as we enter 2026?

That is our expectations internally thus far.

Well, now it's external too. Thank you very much.

You're welcome. And Joe, you should also adjust for the fact that we don't have APA in the $1.9 billion at this time.

So as we conform policies, that should also add to the backlog by the end of the year. you know let me just make yeah and let me just while we have the questions on order book I just want to make a couple of points perfectly clear so as Keith talked about the quality of our order book has really improved so that that 1.9 is not the same as a 1.9 a year ago for a few factors the first is the higher percentage of tier one customers as Keith alluded to we won't give the exact percentage, but it's continuing at greater than 50% now. And those customers already have strong safe harbor strategies. So the likelihood of pushouts and delays or interconnect issues goes down the more we're going direct to utilities, direct to IPPs, et cetera. The second thing is we've noted it, and I want to make sure we recognize it, is the higher concentration of domestic content. You know, we experienced in Q1 and Q2 this year some of those. We had to introduce a term of net bookings because of de-bookings as projects got delayed, and we held to our rules of what would go into the order book, in particular in Brazil. So we took the approach of keeping those orders on the sideline and treating them much more like book-and-turn business. What I mean by that is as we really see that that is about to ship and go, we'll will treat it as book in turn and as such it's a higher quality order book because the likelihood of deep bookings is is very much diminished at that point we just talked about the fact that APA is not yet included but will be in Q4 and again Joe we've we've given you that that strong signal that we do expect additional backlog to build in Q4 so all in all we feel very pleased with our order book results here in the quarter and what we expect between now and year excellent thank you thank you ladies and gentlemen just a reminder if you would

like to ask a question please press star and then one now please note participants are limited to one question at a time the next question we have comes from Julian Dumoulin Smith of Jefferies please go ahead hey team how you guys doing we're doing good doing good Julian excellent thanks so much for the time I I appreciate it.

Look, I just wanted to follow up a little bit. Let's start with a little bit of macro and then we'll do micro. Look, your peer is talking about doing some diversification. Your peer in e-boss is talking about expanding the scope of their business. How do you think about your venture or journey into expanding the scope of your business? Obviously, you guys do this APA. You're talking about foundation here. But any venture to kind of expand the scope here or for the time being, let's get this core product right and sell it even more appropriately?

Yeah, I think when we – let me address the let's get this core product right. I think we've done that over the last couple of years with our new product. And look, to give you the signal and show you the chart of how much our new products are hitting the sweet spot of the market is pretty significant. If you would have told me when we launched them two years ago that within two years we'd be at over 40% of our backlog be those new products, that would be deemed an incredible success. So we're really pleased with that. We will continue to look at how we increase the share of our customers' wallet, in particular focusing under the panel, and what I mean by that is not the panel. But there's a larger ecosystem there that we can do, that we can work with, both in terms of partnering, venturing together, as well as either acquiring or internally developing other components that would be utilized under the panel to increase the share of wallet. That's been a consistent strategy here for two years.

We are going to continue to execute on that.

Excellent.

And can I really go back to the question about this integrated foundation solution? Can you talk a little bit about early client interest and potential bookings? But more importantly, can you talk about what it costs to get there and the margins potential on this product, if you can elaborate?

Again, I know it might be a little sensitive, but to the extent possible, the capex or dollars required to get there as well as kind of the margin profile as best you can do when you need it. so minimal in terms of additional investment to get there and to be clear how we got to the APA from an acquisition standpoint was that we were engaged in co-development of this product prior to completing the acquisition so this is something we started well over a year ago I think it's fair to say the designs are done we're in in tooling at this point to be able to put soft launch in the first half of next year and hard launch in the second half so we're fairly far along and to be clear on what we're doing is when when you have the a-frame right now you have a very large heavy chunk of steel which is an interface required to interface with ours every one of our competitors tracker systems requires an interface as well and what we're doing is adapting the a-frame so that the top of that A-frame instead of requiring a very large heavy expensive steel interface just becomes the base for our tracker torque tube I think it's a it's a very strong play it creates an incredible set of economics for our customers and that it begins to bring the engineered foundations from a cost point down to be incredibly competitive with standard piles at that point so So you're able to then be able to achieve an engineered foundation solution for non-engineered foundation pricing, if you will. It will have a degree of interoperability that I think is superior, take weight out of the product, take steel, costs, all of the above. So we're really excited about it. I think it's fair to say we're fairly far along in that journey, and we expect to be able to put some of that into the ground in the first half a year. We have some test sites identified, and then we'll go forward from there and open it up for sale in the second half.

And then just a couple of comments on the traction.

Look, one of the biggest things we need to add in SG&A in Q4 is additional, you know, good news is additional sales resources within the APA business. we we currently have seven open recs for sales design engineers just to handle the influx of inbound orders we're receiving now inbound quotation requests for the combined solution between APA and array so it's getting quite exciting for us thank you guys appreciate it thank you the next question we have comes from John Wyndham of UBS please go ahead hey great

uh congratulations on the quarter thanks for taking the questions um i just wanted to just get some more um thoughts or commentary around the international business and if there's any opportunity to manufacture domestically in the u.s for export thanks appreciate it yes i'll think international so we're we're pleased with our year-to-date progress you look at brazil despite the challenges that kevin referenced there ladies and gentlemen we have been rejoined by the speakers.

We have a question from John Wyndham of UBS. Please go ahead, sir.

All right. We'll be back. Thanks for taking the question. I was just asking about outlook for the international business and whether there's an opportunity, at least within North America, to manufacture in the United States, capture tax credits through the export market. Thanks.

Hey, John, it's Neil. Let me take the international question. I'm not sure where we cut out previously. So, you know, we're really pleased with how we perform year-to-date from an international perspective despite the Brazil challenges. So you look at our STI segment on a year-over-year basis, we're up over 10%, despite what's going on in Brazil. And then on top of that, we look at Australia as a separate entity, and we're up nicely year-over-year there as well. So we're pleased year-to-date how the international business has progressed. That's really a testament to our diversification strategy that we've been deploying. So in both Europe and Latin America, it's been primarily an H-250 platform that we've been and selling under the old STI business. And we've introduced DuraTrack and OmniTrack in both of those regions. And we're really seeing a nice progression of the pipeline and interest and attraction for that product line in those markets that appreciate what DuraTrack brings from the applicability in higher wind and difficult soil conditions. It's really a differentiating product for us in those additional markets and brings with it enhanced margin opportunity for that differentiating features as well. So we feel good about the progress in that front. Separate to that, when it comes to export from the U.S., one of the things we look at is what is the most appropriate supply chain for a particular project based on its locality. In the U.S., primarily it's a domestic production for domestic consumption. On the international business, we look at an international supply chain that's targeted at the most beneficial and lowest landed cost for a particular project and so for Europe and South America and elsewhere we'll do an analysis on a per project basis but what components come from what supplier at the right mix with the right logistics cost to get you to that lowest landed cost and obviously where it makes sense to import from different countries including the US we obviously take a look at that and analyze that and do that on a project specific basis thank really appreciate it thank you the next question we have comes from Brian Lee of

Goldman Sachs please go ahead you got me Nick Cash on here for Brian Lee just trying to think across again you know there seems to be a decent bit of moving parts here you know heading into next year and not looking for guidance or anything but you know you've increasing steel prices Omnitrack Skylink Hale XP becoming a larger portion of the backlog accretion from APA potential 45x from APA and reduction of tariff exposed below material could you just help us frame us you know what our frame for us what could be creative to gross margins accretive to gross margin dollars and just some of the puts and takes heading into next year hey make this is key 2026 for us right now is tail on the drawing

board I know we've given some earlier comments you know well that we expect growth in terms of revenues given the strength of the order book the addition of APA and the outlook for the innovative products that we have been adding we also you know are committing that we're going to strive to maintain our gross margins in the range that we're currently operating but beyond that I think we'll be too soon to say much more about 26 okay no worries and just I guess you know one more you know that nine million of acquisition related expenses realize this queue or there you know any more cleanups expected or I

guess you know any more expenses that could be a headwind to EBITDA over the coming quarters or is it just one time most of the acquisition related expenses were adjusted out so you know other than being a impact on the gap TNL, I think we shouldn't expect any impact from the M&A other than just accretive, even a margins.

Thank you. The next question we have comes from Ben Callow of Baird. Please go ahead.

Good evening. Thanks for having me on. My first question was just on if you're seeing a kind of flight to quality, just between between you and NextTracker from other trackers or racking companies in the U.S., so maybe the easy way is market share gains, if you could talk about that. And then on the independent power producer and the multi-gigawatt deal, could you just talk maybe about, you know, what their solution was, if this is diversification, if they're or moving away from someone else or a completely new business. Any call you can give on that would be helpful. Thank you, guys.

Yeah, I think the answer is actually common for both questions. So, look, we do think there's a flight to quality, but a lot of that is really being driven by our strengthened front end of the business. A few things that we've done year to date, not only have we revamped our sales team and our sales team leadership, But we've also added an entire group of individuals that we call our technical sales team. These are engineers selling to engineers and ensuring that we revamp our value propositions and get very clear on our value propositions to each individual channel we sell to. And the reality is our ability to generate more energy with our passive stow system, to have an improved ground coverage ratio relative to some of the peer companies, it's really helpful when we're doing a very highly technical sale to the engineers who then instruct purchasing that this is because of the improved LCOE this is the tracker of choice that's what's really happening for us out there and that to be absolutely clear we were not the lowest price tracker presented in this multi gigawatt we were the best value selected by the customer. Not at all the lowest price but we were able to generate value for that price for the customer utilizing some of the very technical subsets of issues we just talked about. The passive stow, hail mitigation, severe weather and ground coverage ratio were all critical elements that this customer valued and put into their return matrix that all yielded that order in our direction despite being higher priced if I could just quickly follow on with electricity prices increasing in the LCOE proposition are you getting better pricing as electricity prices increase or does it not work like that it doesn't work that way our pricing typically flows more relative to commodities and then your win rate goes up with your improved LCOE but it doesn't look at there's narrow ranges of the above but what you saw and should not go unnoticed but our ASPs increased for the first time in six quarters as we as we predicted earlier in the year that as the steel prices rose over time that would be reflected in ASPs and we did see that this quarter so you had an increase in ASPs this quarter but ASPs for us is more a function of the commodity inputs. And then win rate is more of a function of our ability to communicate our strong value proposition to the market.

Thanks, guys. Good quarter. Thank you.

Thank you. The next question we have comes from Philip Shen of Roth Capital Partners. Please go ahead.

Hey, guys. Congrats on the strong bookings and quarter. Wanted to check in with you on the international side of the business. We'd love to understand if there's any potential upside from Brazil or LATAM in the Q4 guide. And given the removal from the backlog, perhaps there can be some business there near term that might be an upside surprise. Thanks.

So, hey, Bill, it's Neil. So, let me explain it this way. So, certainly, you know, the Brazil business and background economic climate has been a challenge over the last quarters that we've talked about quite often, and we've been diversifying in that market. Now, one of the interesting things we've seen, and Kevin articulated earlier about our order book rules around having a defined project with a start date with a PPA in place, and those rules apply really well for the domestic market here in the U.S. Now, what we've seen elsewhere in other markets, those sometimes get a little bit out of sequence. So we may see an awarded order that then our customer takes the contract with us that then they take into their PPA finalization. So what that really means is that we have awarded business that is not shown in the order book that will convert in future periods. And we're seeing that more and more, particularly in South America. So I guess to get to your point that in that $1.9 billion order book, there is business that we do expect to see on top of that that will turn over the next couple quarters.

Got it. Okay, thanks. And then shifting to APA again, is it fair to conclude that the APA revenue in 2025 will be roughly flat year over year? And then what kind of growth should we expect from APA in 2026? I know you haven't given guidance yet, but insofar as you can give a little bit of color, that would be fantastic. And then if you can, and I know a lot of people were asking about this at REIT Plus when you announced the acquisition, But what is the APA revenue mix by tracker? If you can give a rough sense, assuming a baseline of about $130 million of revenue, like how much of it historically or is now with your tracker versus, you know, one of your peers, like a game changer, next tracker. And so just trying to get a feel for what kind of exposure you might have to other trackers and then how quickly you might need to make up for some of that lost revenue if one of those trackers steps away from wanting to use APA.

Hi, Phil. This is Keith Jennings. Let me start with just the math. So, yes, APA 2025, based on our guide, will have slight growth, I think, just over 1%, given what we have to disclose in terms of pro formas in our 10Q.

I think that was an understandable performance given the distraction in the market with 1BB and particularly even the outcome of 1BB which I think hit mostly the residential and community solar market more than the utility scale markets. And so as they've come in-house we feel fairly strongly about the outlook for APA with Array as a partnership, particularly as we introduce them to more utility scale customers and clients that find them more attractive now that they have a bankable partner. And so our outlook for them is really strong.

We're still very excited about the acquisition that we just executed.

In terms of the breakout between the various partners that they have been supporting, we're not prepared to disclose that. And I think that we remain committed to the customers of APA, regardless of which tracker company they choose to go with. We believe that APA and its engineered foundation is the best technical solution in the market. All customers should be able to benefit from that.

With that, Kevin, anything to add?

Yeah, look, so to be clear, Phil, there's not been any of APA's customers that have said, hey, we're going to pull business away. There's only one meaningful competitor that has any backlog with APA, and they have backlog with APA because their existing solution doesn't solve what APA solves, right? They have their own foundation solution, and if they can solve it with their own, I promise you they would. That's the case. So what we focus on is allowing APA to continue to serve their customers, continue to work on new product development with peer tracker companies. We're going to continue to allow that level of support. I have personally engaged in senior management discussions with each of those competing tracker companies and giving them my personal assurance that we will continue to behave accordingly. We have created separate firewalls in the company to allow them to conduct that business with our competitors such that Array cannot see their engineering, their pricing, any of the above. So, we've taken a very high road approach to ensure that we allow them to maintain those relationships and, in fact, continue to do aggressive new product development with those customers that on a tracker may be a competitor of ours. So I think we're taking a very good approach there. We feel really good about that as we move forward. I would say the influx of opportunities on the utility scale segment, when you think about moving from CNI to utility scale, it only takes a handful of utility scale projects in a given year for APA to win to totally and very dramatically change the scale of that business. I'm very pleased with the amount of traction we're getting in that at this point, in the amount of, quote, opportunities we are now getting in the business on utility scale foundation solutions.

So we're quite excited about the trajectory of that business.

Thank you.

The next question we have comes from Tom Curran of Seaport Research Partners. Please go ahead.

Kevin or Keith, does Array currently have any contracts with BP in the order book via LightSource or any other BP affiliates? And if so, could you give us an indication of what that total BP exposure represents as a portion of the backlog?

We don't give specific backlog or business numbers with any customer, but BP has historically been a good customer of Array, but we don't break that out.

Understood.

Maybe I'll just try a different angle. So have you, you know, been given any reasons to believe or seeing any signals that there could be any issues with upcoming expected deliveries to BP-affiliated projects?

Not been made aware of any that I can think of.

Okay, great. Thanks for taking my questions.

Thank you. The next question we have comes from Dimple Gosai of Bank of America. Please go ahead.

Thank you so much for taking my question here, Thien. You know, with domestic steel pricing moving around and tariffs tightening, can you maybe help us quantify the degree of cost posture you're achieving today? How much price discipline is holding in bids as the market normalizes around domestic content? Thank you.

So I think a few things. we tend to be able to price our products in line with expected delivery dates and steel prices at the time of contracting. And that is some level of locking on most of our materials. We do have some materials that may float, but for the most part we're able to hold our margins. If you think about where spot market for steel is today at around $847 a metric ton, that was roughly 13% lower in 2024. And when we spoke earlier in the year and we saw these forward prices then, we talked about expecting ASPs to go up, and you've seen that now. So sitting here today, when I look forward to 2025 and look at the forward curve, I see an average for 2025 at 849, which is in line with where we are. I see 2026 at, you know, 874, which is marginally up. So, you know, we are, I'm sure our customers are seeing all these things. So when we have conversations, we are all having informed conversations about where pricing should be so that we can all have healthy margins and continue to do business.

Yeah, let me just add on to that as far as passing through both from a steel pricing from a tariff standpoint. With steel up 22% year-to-date, we also saw, as Kevin mentioned earlier, a sequential increase in ASPs. It's demonstrating that that steel pricing is flowing through into ASPs, which, as we've talked about previously, flows through from a gross profit dollar perspective, which is helpful from, obviously, a P&L standpoint. Separate to that on tariffs, as we've also communicated previously, 70%, 75% of our contracts allow us to pass through those tariffs directly to customers. There are times where we'll negotiate with customers on a commercial basis for the best overall outcome of their project for it to go forward. So we may negotiate on a project basis, you know, that pass-through. But ultimately, as tariffs normalize, we then bake it into ASPs. So overall, we feel quite good that steel pricing is certainly flowing through, and obviously the vast majority of tariffs are as well.

Don't forget that the tariffs create a drive on the margin rate. because we don't get a lot of markup on tires even when they flow through prices.

Thank you.

The final question... And I would say just one more...

Sorry, operator. Just one more clarifying point on the other side of that equation would be pricing, and we continue to see rational pricing behaviors in the market.

I want to make sure that's clear.

Thank you, sir.

The final question we have comes from Colin Rush of Oppenheimer. Please go ahead.

Thanks so much for sneaking me in, guys. You know, given the concern around timeline for a lot of these projects, can you talk a little bit about your opportunity for driving incremental labor efficiency within the existing designs and if you're working on any, you know, updated designs that could drive incremental, you know, or shorter timeframes out in the field?

Yes, this is Neil. I'll take that one, Colin. So, yeah, so when you look at our innovations we've brought to market over the last couple of years, we've talked, it has really manifested itself really well into the pipeline at this point with Omnitrack and Skylink and others. One of the key factors there is around ease of installation and making things easier for our customers. So, you look at Skylink, for example, with wireless connectivity, minimizing the need to trench on a site, that certainly brings with it installation efficiencies that our customers certainly appreciate on certain parcels where they're deploying, where they have difficult soil conditions, where trenching is problematic. Separate to that, when you look at DoraTrack and Omnitrack, from a sheer number of parts perspective, we're several-fold smaller, fewer quantity in components than competitors, which also bring with it an installation efficiency that our EPC customers in particular appreciate. So they're oftentimes put in a factor that gives us a credit for the overall cost of our solution because of the ease of installation. And we continue to hear that time and time again from EPCs as recently as I had when I was down in Australia last week at a number of meetings. So when you think about what our innovations going forward look like, they're on a couple fronts, It's to continue to drive effectiveness and ease of installation for our customers, along with protecting their assets. When you look at extreme weather with hail alert response, hail XP, and other factors, those are the things that we're driving towards. Ease of customer more value for installation and more value for the long-term asset over the lifetime of the installation.

Thanks, guys.

Thank you.

Ladies and gentlemen, we have reached the end of our question and answer session and the end of our conference. Thank you for joining us.