FTC Solar, Inc. Q3 FY2023 Earnings Call

Hello and welcome to FTC Solar's Third Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the presentation, there will be a question-and-answer session. I would now like to hand the conference over to Bill Michalek, Vice President of Investor Relations. You may begin.

Thank you, and welcome, everyone, to FTC Solar's Third Quarter 2023 Earnings Conference Call. Before the call, you may have reviewed our earnings release and supplemental financial information, which were posted earlier today. If you've not yet reviewed these documents, they are available on the Investor Relations section of our website at ftcsolar.com. I'm joined today by Shaker Sadasivam, Chairman of the Board; and Patrick Cook, the company's Chief Commercial Officer; and Cathy Behnen, the company's Chief Financial Officer. Before we begin, I remind everyone that today's discussion contains forward-looking statements based on our assumptions and beliefs in the current environment and speaks only as of the current date. As such, these forward-looking statements include risks and uncertainties and actual results and events may differ materially from our current expectations. Please refer to our press release and other SEC filings for more information on the specific risk factors. We assume no obligation to update such information except as required by law. As you expect, we'll discuss both GAAP and non-GAAP financial measures today. Please note that the earnings release issued this morning includes a full reconciliation of each non-GAAP financial measure to the nearest applicable GAAP measure. In addition, we'll discuss our backlog and our definition of this metric is also included in our press release. With that, I'll turn the call over to Shaker.

Thank you, Bill, and good morning, everyone. I felt it was important to speak with you directly on behalf of the Board of Directors about the leadership transition we have announced today. FTC Solar is a company with a great team of employees and innovative and compelling technology and services that customers enjoy. With the start of AD/CVD and supply chain disruptions, a growth trajectory was interrupted, and much of the last two years has been about repositioning the company to be in the right markets with the right technology and cost structure. We have made progress on that front and improved our positioning. The tracker market is healthy and profitable and FTC Solar now needs to accelerate our progress and achieve and enjoy healthy, profitable growth. At the Board level, as we evaluated our opportunities and growth plans ahead, the Board agreed that now is the right time to bring new leadership to FTC Solar as we enter our next phase of growth and execution. As you saw from the press release this morning, Cathy Behnen, who has served as the company's Chief Accounting Officer since 2020, has been named our Chief Financial Officer on an interim basis. Cathy has more than 20 years of financial leadership experience, including CFO and accounting partner roles, and has made significant contributions to the company as Chief Accounting Officer and a member of the executive team. We are excited to have Cathy take on this expanded responsibility. The combination of Cathy and her fellow executive leadership members, Patrick Cook, our Chief Commercial Officer, and Sasan Aminpour, our Chief Operating Officer, will provide steady leadership for the day-to-day management of the company. To further ensure a smooth transition for the company and its employees and customers, during this transition, the board will provide increased oversight of those leaders and be engaged on a regular basis. In particular, Ahmad Chatila will regularly assist in facilitating communication between management and the board to monitor key activities and initiatives in order to accelerate profitable growth. We are confident that this team and structure has the capability, along with the right blend of organizational history and new perspectives to ensure that not only do we not miss a beat, but that we accelerate toward our long-term goals. While today's news represents a change, it also represents a tremendous opportunity for us to accelerate our momentum. With that update, I thank you for your time, and I'll turn it over to Patrick to discuss the highlights from Q3 and the progress we have made.

Thank you, Shaker, and good morning, everyone. As Cathy will discuss, our third quarter results largely came in as expected, net of benefits to gross margin and charged operating expense that were not in our guidance. As we look to the fourth quarter, our slate of projects in aggregate is getting a later start than we previously anticipated as customers continue to experience various project delays. As a result, the guidance we are providing for the fourth quarter is down from Q3. We expect this to be followed by a much more significant revenue growth in the first quarter of 2024 as the delayed projects ramp. We continue to feel good about our future and overall long-term growth prospects. Our confidence is based on our improved competitive positioning and supported by our large and growing backlog. I'll briefly review the positioning improvements that we discussed last quarter. First, we believe our manufacturing cost is now in line with our leading competitors. We're more competitive than we've ever been on that front and will continue to prove with scale. Second, our average new project margins put us on track to meet or exceed the targets we provided in the past. As you may recall, we have previously targeted getting to the 10% to 15% gross margin range on $100 million in quarterly revenue. The fact that we were able to approach the low end of that range or about 9.5% on a normalized basis on only $30 million in revenue in Q3 is an additional proof point that the cost reduction actions we've taken have borne fruit and position us to achieve profitability as we grow revenue and see additional cost absorption. Third, we are now in the market with our 1P solution, Pioneer. We believe the 1P market has done better in this time of restricted module availability and we didn't have a solution until recently. We have had great customer response to Pioneer and our 1P backlog is growing very nicely, including quite a few project additions following the RE+ trade show in September. Fourth, we continue to grow our international business. We're gaining traction in new regions, most recently adding awards in Spain and Italy. We've also seen larger awards in existing regions like South Africa and now have awards in a dozen countries outside of the US. Our 1P solution will only enhance our prospects internationally. And fifth and lastly, our backlog has now grown to approximately $1.6 billion, with approximately $60 million added since August 9th. On our last call, we outlined a number of projects that were added which include deliveries in 2024, including in Spain, Italy, and South Africa. We also announced the award of a 1 gigawatt project in Idaho. One project we didn't mention at the time, but was added to our backlog last quarter was another 600 plus megawatt project in the US. Revenue on this project will ramp here in the fourth quarter and continue into next year. The continued growth of our backlog, including the recent additions, allows us to continue to be optimistic about our growth prospects and our goal is now to ensure we're adding more business and converting to purchase orders to support future growth. So in summary, we were pleased to do well relative to our third quarter targets and demonstrate continuous gross margin improvement. Some fourth quarter projects are starting later than anticipated, but we expect to improve revenue performance in the first quarter, along with margin improvement. We're positioned with a product cost structure that will enable our gross margin expansion to continue and reach new highs as revenue grows. We'll keep a tap on operating expenses while investing for future growth, and we expect to cross profitability in 2024. With that, I'll turn it over to Cathy.

Thanks, Patrick, and good morning, everyone. I'll provide some additional color on our third quarter performance and our outlook. Beginning with a discussion of the third quarter, revenue came in at $30.5 million. This revenue level represents a slight decline of 5.6% relative to last quarter and an increase of 84.3% relative to the year-ago quarter. Growth profits benefited from higher project margins, a better mix of materials versus logistics, and a couple of non-recurring benefits. Specifically, our GAAP gross profit was $3.4 million, or 11.1% of revenue, compared to $2.2 million, or 6.8% of revenue in the prior quarter. On a non-GAAP basis, gross profit was $3.9 million or 12.8% of revenue. That does include a couple of non-recurring benefits totaling $1 million that were not contemplated in our guidance and related to better than expected margins on a closed project and lower than expected inventory costs that we don't expect will recur in future periods. If those benefits were excluded or on the same basis as our guidance, non-GAAP gross margin would have been 9.5%, still above our guidance range of 3% to 9%, supported by mix and improved cost structure. This represents our fourth consecutive quarter of gross margin improvement and our third quarter of positive margin since our IPO. These figures compare to a non-GAAP gross profit of $2.6 million or 8.2% in the prior quarter and a non-GAAP gross loss of $8.2 million in the year-ago quarter with the difference driven primarily by significant improved product direct margin and lower warranty and other indirect costs. Our GAAP operating expenses were $19.7 million on a non-GAAP basis, excluding stock-based compensation and certain other costs, operating expenses were $13.2 million compared to $9.1 million in the year-ago quarter. The operating expenses this quarter included an approximate $4 million credit loss relating to a specific customer account. Excluding this charge, our non-GAAP operating expenses would have been $9.2 million, which would be below or better than our guidance range and at the low end of what we've seen over the last two years as we continue to look for efficiencies across the company while continuing to invest strategically in areas that support our growth. Next, GAAP net loss of $16.9 million or $0.14 per share, compared to a $10.4 million or $0.09 per share in the prior quarter and had a net loss of $25.6 million or $0.25 per share in the year-ago quarter. Adjusted EBITDA loss, which excludes approximately $7.2 million, including stock-based compensation expense and other non-cash items was $9.7 million, compared to losses of $7.2 million in the prior quarter and $17.7 million in the year-ago quarter. Excluding the $4 million charge as well as the gross margin benefits, adjusted EBITDA would have been at the high end of our guidance range. Finally, regarding liquidity, we had an operational use of cash in the quarter offset by usage of the ATM facility for which we received $13.4 million of cash in the quarter and we ended the quarter with $31.5 million cash on the balance sheet. We continue to hold no debt on the balance sheet, have a largely available credit revolver, as well as $65 million remaining under the ATM program at the end of the quarter. With that, let us turn our focus to the outlook. Based on our current view and including the project delays that Patrick mentioned, we expect fourth quarter revenue to be down sequentially with margin reflecting the lower absorption. We expect this to be followed in the first quarter by a fairly substantial revenue recovery as projects ramp. As Patrick mentioned, we have a great deal of gross margin runway ahead of us, and we expect the trend, particularly as revenue grows to largely be up. Specifically, our targets for the fourth quarter call for the following: Revenue between $18 million and $28 million; Non-GAAP gross margins between negative $1.3 million and positive $2 million or between negative 7% and positive 7% of revenue; Non-GAAP operating expenses between $10 million and $11 million; and finally, adjusted EBITDA loss between $13 million and $2.5 million. For the first quarter of 2024, we expect to see about a 96% sequential revenue growth at the midpoint, with improvements in all categories. Specifically, revenue between $40 million and $50 million; non-GAAP gross margin between $3.2 million and $6.3 million or between 8% and 13% of revenue; non-GAAP operating expenses between $9 million and $10 million; and finally, adjusted EBITDA loss between $7.3 million and $3 million. Looking forward, we continue to feel good about the opportunity for a strong revenue recovery in 2024 and achieving profitability. With that, we conclude our prepared remarks and I will turn it over to the operator for any questions.

Thank you. Our first question comes from Philip Shen with ROTH. Your line is open.

Yeah, thanks for taking my questions. First one here is on the guidance for Q4 and Q1. I think it came in lighter than what the street was looking for in a meaningful way. You talked about in your prepared remarks that you'll see a ramp up and it's been impacted by module delays. Is it fair to say that you guys have been more exposed to the LONGi detentions as opposed to Jinko, because Jinko has been flowing pretty smoothly for some time now? And then recently only LONGi was able to get their OCI poly module release. And so as that starts to ramp, would you expect much better kind of expectations ahead as a result of that detention release from LONGi. Thanks.

Hey, Phil, so I'll start and then let Patrick continue. So historically in our backlog we did have a fair amount of modules from that supplier that were associated with our projects. Many of those have, during the AD/CVD process, found different modules to move forward with. So it's fair historically, but I think that's been changing. Patrick, I don't know if you'd add anything there.

Yeah. And Phil, I'd say the other thing, too, when you think about kind of Q4, Q1, we've had some projects kind of move to the right in terms of the overall revenue ramp. The 1 gigawatt project that we'll be delivering here and then the 700 megawatt project that we signed last quarter and are in process of delivering. So you're going to see a lot of that base load revenue get shifted into 2024, which is why we're so optimistic about kind of the future prospects, is because we've got that 1.7 gigawatts plus already kind of in the hopper and delivering. So we're very excited about that.

Great. So we've made a fair amount recently about the challenges with some project delays as a result of, you know, elevated rates for a long period of time and so forth. Can you walk through the rationale for each of those project pushouts? If you touched on it earlier, sorry if I missed it, but just curious if you can give a little more color as to why the gigawatt and the 700 megawatt projects were pushed to the right.

I think from just an overarching perspective, what we're seeing is a rise in financing costs obviously is creating a little bit longer duration as projects reach kind of FNTP or LNTP. And you're seeing, you know, those types of projects move. Interconnection has also been a little bit of a challenge. You're seeing kind of a little bit of grid issues, grid congestion, and that's having those projects ultimately pushed to the right more than what we've traditionally seen in the past. Obviously module availability is getting better, but we're seeing increased rates in financing and interconnection is kind of the current challenges in the market.

Okay. Great. Thanks, Patrick. One last one from me and I'll pass it on. As it relates to working capital, you know, you have a healthy amount of cash, 30 million, but you have a bunch of cash tied up in accounts receivable at 71 million and a pretty high data account. Just wondering if you can talk us through balance sheets, working capital, how you expect to manage through. Thanks.

Yeah, so this is Cathy. We feel very confident. Our cash position will be flat to a little improved by the end of Q4. We have some chunky receivables we expect to be coming in Q4. And with the ramp that we're seeing and the move to profitability, we're confident in kind of where that stands on our balance sheet.

Great. Thanks, Cathy. And then in terms of why are the receivables so chunky at this point? I mean, or why are they so high? Are there some other kind of reflection of what's going on in the market where some of your customers might be trying to preserve cash?

Yeah, I think that's exactly what we've seen. Some financing changes on our customer side have pushed out some of the receivables. We have a large receivable that we're expecting to see come in Q4.

The receivable that we mentioned a lot that we expected to come in last quarter. It actually looks like it's going to come in now this quarter, so that's the bigger chunk of it.

It moved to the right.

Got it. And do you have a credit facility? And can you talk about the capacity available?

We currently have a revolving credit facility of $100 million, with about one and a half to two million utilized, which is a relatively small amount. This facility is typically used for letters of credit to support projects. As we've gained more credibility in the market, we haven't needed to access it, so it remains undrawn. This means we have over $95 million available under the line.

But as of quarter end.

Great. Thanks, guys. I'll pass it on.

Thanks, Phil.

Thank you. Please stand by for our next question. Our next question comes from the line of Donovan Schafer with Northland Capital Markets. Your line is open.

Hey, guys. So thanks for taking the questions. I first want to ask, you know, with the transition of the CEO and the CFO kind of wondering Shaker is still on, maybe we can get a response from him on this. But if the issue here is kind of the way everything, the way you guys are describing it and all these dynamics that are out of your control, it seems, or at least being framed that way, but also lined up for acceleration. I think the word acceleration was used a lot in the prepared remarks. If all that is lined up that way and unfolding as best as possible within what you can control, then why replace the CEO and CFO? Or otherwise, more candidly, what is the board's view of what's going on here? And tied to that, why should we continue to put faith in, you know, Q1 guidance, you know, the Q1 guidance, Q4 guidance, and even the backlog at this point? You know, has all that been, you know, reviewed and re-reviewed by the board? Any clarification would be helpful.

In terms of the guidance, I will let Cathy address this, but the perspective is to mitigate risk in the guidance, which is why you saw some lower figures. The company is confident in what we are projecting for Q4 and Q1. Cathy, would you like to add anything?

Yes, the answer is yes, we've gone through it project by project. And my goal is to provide guidance that I can be confident in, and that's what we've done. And we have a very clear view into the ramp in Q1. So very confident with that.

Okay. Did anyone else want to comment on that question? As a follow-up, regarding whether module imports have improved, we discussed earlier how that has been a challenge and how the backlog has been skewed towards two-phase projects, which are typically more complex and therefore push back others in the queue. Since module supply has improved significantly, it seems those waiting to move forward should be able to start making progress. If not, it appears that the situation has changed. Is there a reason why you might be more affected by the issues around interconnect and financing? While some peers have experienced impacts, it seems you are facing a greater challenge. If the modules are no longer the issue, what is causing the pronounced effect on financing and interconnects for your team?

So I'll talk to the module piece. We are seeing modules ultimately come in. And Donovan, you're right, 2P sites are inherently ultimately more complex. But if you think about developers and how they engage with the EPCs, they're building out their kind of construction schedule. So a lot of the 1P sites are still continuing to get done and some of the 2P sites, just based on EPC availability are still kind of forecasted to go mid to late 2024 and into 2025. And those schedules are being set in Q3 and Q4, ultimately, of 2023 as they build some of these 150 to 200 megawatt sites.

And to that, in general, we've seen some of the same things that industry have seen around financing, panels, labor, permitting, renegotiating PPAs. I mean those sides of things we have talked about last quarter are seeing a general pushout in backlog. Around the 2P, we have a number of projects that if they were scheduled to move forward with the project, but they didn't have modules. They've renegotiated from now. So a project that would have been scheduled to go six months ago, maybe it's now going to go in late '24 and '25. And so that's the new schedule for that particular project. But that's the only other thing I'd add there.

Bill and Donovan, this is Shaker. I apologize for the audio issues I was having. Regarding the leadership change, Donovan, thank you for your question. In our prepared remarks, we discussed the efforts we’ve made over the last two years to reposition the business. Much of this work has enhanced our cost structure and competitive standing. The organization is also more streamlined, and we have addressed gaps in our product portfolio. In the April-May timeframe, we were quite optimistic about the business outlook. However, we faced challenges in receiving purchase orders. Consequently, the Board began to delve deeper into the details and identified significant opportunities for improvement in fundamental execution and operational issues. In particular, we recognized areas where we could speed up decision-making and improve coordination across the organization, close product portfolio gaps more quickly, and enhance customer engagement, leading to a better connection between revenue forecasts and purchase order fulfillment. This is the reason for the change, and I hope that clarifies your question.

Okay, that's helpful. I have one last question about the credit charge. Regarding the $4 million credit provision related to one customer, can you clarify whether you and the customer agree on the total amount owed for goods and services provided? Is the issue that they simply aren't paying, or is it actually a situation where they dispute your view and have reasons for withholding that $4 million?

Hi, Donovan, thanks for the question. No, there's no dispute. The customer understands the value of the receivable, it's strictly a collectibility and ability to pay issue.

Thank you. Good morning, everyone. Most of my questions have already been addressed. But I was just wondering if you had any projects that have been canceled? I know backlog is a little bit higher, but are there any project cancellations that are impacting near-term results and outlook?

No, we haven't seen any projects that have been canceled, just pushed to a later date.

Okay. Understood. And in non-UFLPA orders, I think you guys gave a number last quarter. I don't see it this time. Maybe I missed it. Could you tell us what that number looks like?

Yes. I mean in terms of the non-UFLPA for the awards that we signed up this quarter, all of those are not subject to UFLPA and all of the projects have panels.

Okay. Thank you for that. So given you have a pretty positive outlook for 2024, do you think you potentially could see sequential improvements through the year-end 2024 after the bounce back, say, relative to Q4 '23? Or do you not have any visibility at this point to kind of give us that kind of outlook?

We haven't provided guidance beyond the first quarter of 2024. However, we did mention in the last call that we expect the ramp-up to begin in the fourth quarter, and you can now see that ramp starting in the first quarter. The nearly 700-megawatt project that Patrick mentioned is expected to contribute in the fourth quarter and continue to ramp up into the following quarter. This illustrates our expectations for the projects we discussed last quarter to begin ramping up.

I think it's important to note that when you look at a gigawatt project alongside a nearly 700-megawatt project, once these projects begin generating revenue, they provide a steady stream of income without interruptions. This results in a consistent revenue growth that will unfold over several quarters. With some of these larger projects starting to deliver, we have a clearer understanding of the revenue we can anticipate in any specific quarter from these initiatives. Additionally, as we continue to take on new projects, we are transitioning from our current contracts and awards while identifying new opportunities alongside these significant projects and others that are expected to begin in the fourth quarter and into 2024.

Right. So we could potentially be in a situation where we see year-over-year improvements through all four quarters next year?

We definitely feel good about our growth prospects in 2024 and definitely revenue growth and margin improvement for sure.

Okay. Thank you. Just one last one, on the 1P offering, how much of the backlog or how much backlog for that product in the overall backlog number?

The majority of, I mean, if you look at the kind of contracting awards, the majority of the backlog is our two imports of tracker. And that really ties to the fact that the two imports of trackers have been around since 2017 and we brought it to market in 2019, and we didn't bring the 1P pioneer until late Q3. And so we haven't had the time to build that 1P backlog that we have with 2P. Now we are seeing a lot of being offered to bid on projects, a lot of activity around Pioneer and the constructability benefits of it. And we expect to start building out our backlog of our 1P as kind of get through Q4 and into the coming quarters.

Okay. Understood. Thank you, guys. That's all I have. Appreciate it.

Thank you. Please stand by for our next question. Our next question comes from the line of Pavel Molchanov with Raymond James & Associates. Your line is open.

Yeah, thanks for taking the question. Can we get an update on your manufacturing joint venture, which I think is now maybe a quarter or two since it started operating?

Yes, I'll start on that one. So all the equipment is installed and we've been doing qualification runs. We've got some revenue facility in the current quarter here in Q4 and get larger in 2024. And Patrick, I don't know if you have anything to add.

Are you expecting an increase in gross margin once the facility is fully operational?

At this point, we aren't seeing any benefits from 45x in our current guidance. Cathy, do you have anything else to add?

No, we do expect to see continued improvement in our margin, and that facility will support that as well.

Okay. I know you're not giving formal guidance yet beyond Q1. But as you sort of zoom out on 2024 as a whole, do you anticipate being a cash user or a cash generator?

We anticipate reaching profitability in 2024, so we expect to generate cash that year.

Thanks, Pavel.

Thank you. Please standby for our next question. Our next question comes from Jon Windham with UBS. Your line is open.

Hey, great. Thanks for taking the question. I guess the first one, just quickly. Any commentary from the Board on the status of a CEO and CFO permanent replacements and the parameters of which it internal versus external candidates? And what sort of time frame investors should expect on permanent replacements? Thanks.

Thank you for your question, Jon. We've been closely involved with the company's details over the last three months to understand the situation. At this time, we believe that the best team to move forward consists of Patrick, Sasan, and Cathy, with oversight from the Board. We want to be careful in our CEO succession process because we need to ensure we choose the right candidate, so we're taking our time. This approach will help us position the company well. The current team has significant operational experience, and they'll be supported by a Board with a strong operational background. Ahmad will facilitate this process, similar to his role between 2017 and 2020. We are confident in the current team and intend to take the necessary time to find the right CEO. Regarding the CFO position, Cathy is very qualified for the role, and we will determine whether to seek an internal or external replacement or to continue with Cathy in the upcoming months. I hope that addresses your question.

Yes, did. Appreciate it. And then on a completely separate topic. Obviously, there's, I think, a healthy amount of skepticism around the $1.6 billion backlog. It's essentially the same size as a competitor that has 13 times the annual revenue. Is there any thought about taking an opportunity to provide more transparency, specifically what's in the backlog, like specific projects? Is there anything that stops the company from disclosing specific projects? Again, I think just a little bit of comfortability with just a portion of the backlog would provide a lot of peace of mind for investors. Just your thoughts on that, and I really appreciate taking the questions. Thanks.

We have received that question recently and have done some work on it. We didn't present it this quarter due to the changes we announced, but it's something we can consider sharing in the next few months or mentioning in our next call. We are definitely looking to provide that information in some way.

Thank you. Please standby for our next question. Our next question comes from the line of Julien Dumoulin-Smith with Bank of America. Your line is open.

Hey, guys. It's Alex Vrabel on for Julien. Maybe just actually a follow-on to that question on sort of the makeup of the backlog and the opportunity, I'll frame it as, I guess, to provide a little bit more transparency. I know you guys obviously talked about UFLTA or I guess, non-UFLTA orders, but also international as sort of being a shorter cycle, faster ramp than some of the stuff you're seeing in the US. Just curious what's the status of that piece of being? Clearly, things still look a little bit challenged. And just curious, I mean, as far as the slippages, are you seeing the same thing internationally versus the US where obviously the rate environment is still high, but a little bit more muted depending on kind of where you exist? Thanks.

Thank you for the question. If you look at the regions where we operate, the US is the largest area where we've had a long-standing presence. While there are financing and interconnection challenges in new geographies, they are not as pronounced as those we've experienced in the US. This discrepancy is due to our relatively recent entry into those markets, where we've not been operating for four or five years like we have in the US. In countries such as Spain and Italy, we traditionally work on projects that are 500 to 700 megawatts, but most of those are under 100 megawatts, allowing them to move forward more quickly. Australia also faces interconnection issues, but the challenges are more severe in the US.

Understood. It seems clear that there is a potential for recovery in the first quarter at least. What stands out is how your company has evolved from being primarily focused on 2P to now encompassing both that and a wider commercial scope beyond the US. It appears that there is a distinction between certain EPCs and players in the industry, leading to a divide. As you aim to reposition the business for growth with a focus on higher margins, how do you plan to target that more effectively? Are you aiming to capture more 1P opportunities? Or do you find international markets to be more appealing than the US? How would you outline your strategy moving forward, particularly in relation to your existing backlog?

Yes, it’s a great question. We're very excited about the US market and the 1P pioneer we can offer. The top EPCs are securing the majority of the business, and we have established connections with those accounts. One advantage is our ability to collaborate with these top-tier EPCs and developers to design projects that can adapt between 1P and 2P, thereby optimizing the site based on their specific goals. This has set us apart. Our focus is on expanding in the US, winning more projects, while also growing our international presence. Our strategy in the US involves winning multiple projects that then expand, leading to a stable revenue base and a consistent track record. We’ve applied this approach in Australia as well, completing over two dozen projects and gaining significant penetration there. Recently, we secured awards in Spain and Italy, which we plan to execute in early 2024, strengthening our position in Europe and providing a foundation for future growth. Additionally, as Bill highlighted, we are focused on expanding into markets like South Africa where we have successfully delivered several large projects and plan to continue growing there. The common thread across these markets is that they support our value proposition of constructability and quality, which drives margin expansion. We are not interested in markets where we cannot achieve profitable growth, as echoed by Shaker in his opening remarks.

Got it. That makes sense guys. Appreciate the time.

Thank you. I'm showing no further questions in the queue. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone have a wonderful day.