FTC Solar Announces Third Quarter 2024 Financial Results
Third Quarter Highlights and Recent Developments
Third quarter revenue of $10.1 million, in-line with prior target
Industry veteran Yann Brandt joined as CEO
Announced 1GW tracker supply agreement with Dunlieh Energy
Announced multi-year agreement with Strata Clean Energy for 500mw, expandable to 1GW+
Provided incremental project detail on 1GW of projects with Sandhills Energy
Post quarter-end, received $4.7 million earn-out on prior investment
Entered into binding term sheet for $15 million promissory note to strengthen balance sheet
AUSTIN, Texas, Nov. 12, 2024 (GLOBE NEWSWIRE) -- FTC Solar, Inc. (NASDAQ:FTCI), a leading provider of solar tracker systems, today announced financial results for the third quarter ending September 30, 2024, which were in line with the company's prior targets.
"I'm excited to have begun my tenure as CEO during the third quarter," said Yann Brandt, President and Chief Executive Officer of FTC Solar. "As I take stock of our positioning at the 90-day mark, I believe the company is in an enviable position in many respects. This includes having a product portfolio that customers love, a business they appreciate working with, and a cost structure poised to enable strong margin growth and profitability. In addition, the company now has a compelling and expanded 1P product set that opens up the vast majority of the market that wasn't available to the company in the past. The company is in a strong position as it relates to some of the most critical aspects of the business, and I can't wait to work alongside our team to scale our market share."
"With a solid underlying foundation, we have also been pleased to announce some recent business wins, including a 500-megawatt, scalable supply agreement with industry leader Strata Clean Energy, a one-gigawatt plus agreement with new customer Dunlieh Energy, additional project detail on one-gigawatt worth of projects with Sandhills Energy, as well as new announcements today of a $15 million note placement and a $4.7 million earn out on a prior investment, both of which add incremental strength to our balance sheet."
The company added $18 million in new purchase orders since August 8, 2024. The contracted portion of the company's backlog1 now stands at $513 million.
Summary Financial Performance: Q3 2024 compared to Q3 2023
U.S. GAAP
Non-GAAP(b)
Three months ended September 30,
(in thousands, except per share data)
2024
2023
2024
2023
Revenue
$
10,136
$
30,548
$
10,136
$
30,548
Gross margin percentage
(42.5
%)
11.1
%
(38.3
%)
12.8
%
Total operating expenses
$
10,670
$
19,656
$
8,131
$
13,222
Loss from operations(a)
$
(14,976
)
$
(16,277
)
$
(12,174
)
$
(9,706
)
Net loss
$
(15,359
)
$
(16,937
)
$
(12,678
)
$
(10,008
)
Diluted loss per share
$
(0.12
)
$
(0.14
)
$
(0.10
)
$
(0.08
)
(a) Adjusted EBITDA for Non-GAAP(b) See below for reconciliation of Non-GAAP financial measures to the nearest comparable GAAP measures
Third Quarter ResultsTotal third-quarter revenue was $10.1 million, within our target range. This revenue level represents a decrease of 11.3% compared to the prior quarter and a decrease of 66.8% compared to the year-earlier quarter due to lower product volumes.
GAAP gross loss was $4.3 million, or 42.5% of revenue, compared to gross loss of $2.3 million, or 20.5% of revenue, in the prior quarter. Non-GAAP gross loss was $3.9 million or 38.3% of revenue. The result for this quarter compares to non-GAAP gross profit of $3.9 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 fixed indirect costs.
GAAP operating expenses were $10.7 million. On a non-GAAP basis, operating expenses were $8.1 million. This result compares to non-GAAP operating expenses of $13.2 million in the year-ago quarter.
GAAP net loss was $15.4 million or $0.12 per diluted share, compared to a loss of $12.2 million or $0.10 per diluted share in the prior quarter and a net loss of $16.9 million or $0.14 per diluted share in the year-ago quarter. Adjusted EBITDA loss, which excludes an approximate $3.2 million net loss from stock-based compensation expense and other non-cash items, was $12.2 million, compared to losses of $10.5 million(2) in the prior quarter and $9.7 million in the year-ago quarter.
Subsequent EventsSubsequent to the end of the third quarter, the company received a $4.7 million cash earn-out relating to the company's prior investment in Dimension Energy, a community solar developer in which the company invested $4 million in 2018. FTC Solar sold its stake in 2021 for $22 million and remained eligible to receive earn-out payments based on Dimension achieving certain performance milestones. To-date, FTC has received more than $9 million in earn-out payments and is eligible to receive up to an additional $5 million based on performance through the end of 2024.
The company also announced today that on November 8, 2024, the company entered into a binding term sheet with an institutional investor (the "Investor") to issue to the Investor, in a private placement, senior secured promissory notes (the "Notes") in an aggregate principal amount of fifteen million dollars ($15,000,000) and common stock purchase warrants (the "Warrants") to purchase 17,500,000 shares of our common stock.
The Notes will bear interest at a rate of 11% per annum if payable in cash or, at our option, 13% per annum if paid-in-kind and will mature five (5) years from the date of issuance. The Warrants are immediately exercisable at an exercise price of $0.01 per share, subject to certain customary adjustments to be set forth in the definitive documentation, and will expire ten (10) years from the date of issuance. We have also agreed that the Investor shall be entitled to nominate one (1) person for election to our board of directors at our annual stockholder meeting. The issuance of the Notes and Warrants will be subject to customary closing conditions and the preparation and negotiation of definitive documents. We currently expect that the issuance of the Notes and Warrants will occur on or prior to November 30, 2024.
OutlookFor the fourth quarter, we expect revenue to be approximately flat to up 39% relative to the third quarter.
(in millions)
3Q'24Guidance
3Q'24Actual
4Q'24Guidance(3)
Revenue
$9.0, $11.0
$10.1
$10.0, $14.0
Non-GAAP Gross Profit (Loss)
$(4.3), $(1.5)
$(3.9)
$(4.2), $(1.5)
Non-GAAP Gross Margin
(47.8%), (13.5%)
(38.3%)
(42.2%), (10.7%)
Non-GAAP operating expenses
$9.3, $10.0
$8.1
$8.2, $9.0
Non-GAAP adjusted EBITDA
$(14.7), $(11.0)
$(12.2)
$(13.7), $(9.9)
Looking ahead to 2025, for the first quarter we expect continued improvement in revenue, margin and adjusted EBITDA. We remain confident we will achieve adjusted EBITDA breakeven on a quarterly basis in 2025.
Third Quarter 2024 Earnings Conference CallFTC 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 third 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.
Footnotes1. The term ‘backlog' or ‘contracted and awarded' refers to the combination of our executed contracts (contracted) and awarded orders (awarded), 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.2. A reconciliation of prior quarter Non-GAAP financial measures to the nearest comparable GAAP measures may be found in Exhibit 99.1 of our Form 8-K filed on August 8, 2024.3. We do not provide a quantitative reconciliation of our forward-looking non-GAAP guidance measures to the most directly comparable GAAP financial measures because certain information needed to reconcile those measures is not available without unreasonable efforts due to the inherent difficulty in forecasting and quantifying these measures as a result of changes in project schedules by our customers that may occur, which are outside of our control, and the impact, if any, of credit loss provisions, asset impairment charges, restructuring or changes in the timing and level of indirect or overhead spending, as well as other matters, that could occur which could significantly impact the related GAAP financial measures.
Forward-Looking StatementsThis 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 SolarT: (737) 241-8618 E:
FTC Solar, Inc.Condensed Consolidated Statements of Comprehensive Loss(unaudited)
Three months ended September 30,
Nine months ended September 30,
(in thousands, except shares and per share data)
2024
2023
2024
2023
Revenue:
Product
$
7,411
$
27,274
$
27,092
$
80,927
Service
2,725
3,274
7,061
22,874
Total revenue
10,136
30,548
34,153
103,801
Cost of revenue:
Product
11,798
22,775
34,632
73,694
Service
2,644
4,394
8,278
22,492
Total cost of revenue
14,442
27,169
42,910
96,186
Gross profit (loss)
(4,306
)
3,379
(8,757
)
7,615
Operating expenses
Research and development
1,467
1,921
4,441
5,716
Selling and marketing
2,406
6,324
6,830
9,887
General and administrative
6,797
11,411
19,374
31,053
Total operating expenses
10,670
19,656
30,645
46,656
Loss from operations
(14,976
)
(16,277
)
(39,402
)
(39,041
)
Interest income (expense), net
24
(108
)
(111
)
(194
)
Gain from disposal of investment in unconsolidated subsidiary
—
—
4,085
898
Other income (expense), net
93
(50
)
122
(265
)
Loss from unconsolidated subsidiary
(256
)
(336
)
(767
)
(336
)
Loss before income taxes
(15,115
)
(16,771
)
(36,073
)
(38,938
)
Provision for income taxes
(244
)
(166
)
(298
)
(175
)
Net loss
(15,359
)
(16,937
)
(36,371
)
(39,113
)
Other comprehensive income (loss):
Foreign currency translation adjustments
207
(38
)
62
(451
)
Comprehensive loss
$
(15,152
)
$
(16,975
)
$
(36,309
)
$
(39,564
)
Net loss per share:
Basic and diluted
$
(0.12
)
$
(0.14
)
$
(0.29
)
$
(0.35
)
Weighted-average common shares outstanding:
Basic and diluted
127,380,292
119,793,821
126,234,997
112,794,562
FTC Solar, Inc.Condensed Consolidated Balance Sheets(unaudited)
(in thousands, except shares and per share data)
September 30,2024
December 31,2023
ASSETS
Current assets
Cash and cash equivalents
$
8,255
$
25,235
Accounts receivable, net
37,345
65,279
Inventories
15,124
3,905
Prepaid and other current assets
15,502
14,089
Total current assets
76,226
108,508
Operating lease right-of-use assets
1,720
1,819
Property and equipment, net
2,409
1,823
Intangible assets, net
137
542
Goodwill
7,421
7,353
Equity method investment
1,273
240
Other assets
2,507
2,785
Total assets
$
91,693
$
123,070
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable
$
18,742
$
7,979
Accrued expenses
23,965
