Solar tracker supplier FTC Solar, Inc exited Q1/2023 with the addition of $235 million to its project backlog that increased to $1.4 billion as GAAP revenues increased 56% QoQ due to higher product volume, but dropped 17.5% YoY to $40.9 million due to lower logistics volume, partially offset by higher product ASP.
It narrowed net loss to -$11.76 million from -$27.79 million a year back during the reporting quarter. After a loss of -$1.9 million, GAAP gross profit was $2.0 million representing 5.0% of the total revenue thanks to improved product and logistics direct margins, partially offset by lower volumes.
Management said this is its 1st positive gross margin since its initial public offering (IPO) in 2021 with 5.0% in this quarter, for which it attributed improved cost structure.
Eliminating 'more than a fifth of the steel' from its products and launching a higher-margin distributed generation (DG) business, and expanding its product range with a thin-film solution to 2P Voyager tracker along with a new 1P tracker also helped the company improve its costs and margin, stated FTC President and CEO Sean Hunkler.
The company touts an overall pipeline of 134 GW which it says represents uncontracted projects to which it has visibility to make possible sales. Backlog worth $1.4 billion comprises executed contracts and awarded orders. Philip Shen of Roth MKM says incremental backlog includes several multiyear, multi-project orders and that there are no long-term fixed price or cost agreements and no pushouts or major cancellations during the period.
Hunkler added, "On the market front, while our US customers' ability to obtain solar modules has been a headwind for the past year, the constraints seem to be easing to some degree. We're seeing increasingly more project opportunities appear in our funnel that have visibility to solar modules. This is a great sign as we look ahead with customers to the back half of 2023 and into 2024."
Guidance
For Q2/2023, the company guides for revenues within $42.5 million to $52.5 million, and non-GAAP adjusted EBITDA in the negative between -$7.0 million to -$3.5 million.
Management said it targets continued revenue growth and margin expansion in the next quarter.
"Looking beyond the second quarter, the increase in project opportunities we are seeing today with visibility to modules gives us increasing confidence in the potential for a strong revenue ramp in the second half of the year and into 2024," stated FTC.