FTC Solar, Inc. (NASDAQ:FTCI) is a global provider of solar tracker systems, supported by proprietary software and value-added engineering services. The company has faced a challenging operating environment in recent years, but is taking steps to position itself for a return to profitability.
FTC Solar was founded in 2017 and went public in April 2021, listing its shares on the Nasdaq Global Market. The company's primary offerings include its Voyager and Pioneer solar tracker systems, which move solar panels throughout the day to maintain optimal orientation relative to the sun. FTC Solar also provides software solutions, including SUNPATH for optimizing solar tracking, SUNOPS for real-time operations management, and ATLAS for portfolio management. Additionally, the company offers engineering services to assist clients with site layout, structural design, and other project needs.
FTC Solar operates globally, with a presence in the United States, Australia, China, India, South Africa, and Spain. The company's customer base is primarily comprised of project developers, solar asset owners, and engineering, procurement, and construction (EPC) contractors.
Financials
FTC Solar has struggled with profitability in recent years, reporting an annual net loss of $50.29 million on revenue of $127.00 million in 2023. The company's annual operating cash flow was -$52.66 million, while free cash flow was -$53.47 million. These results reflect the challenges the company has faced, including supply chain disruptions, tariffs, and project delays.In the first quarter of 2024, FTC Solar reported revenue of $12.6 million, a 69.2% decrease compared to the same period in 2023. The company's GAAP gross loss was $2.1 million, or -16.7% of revenue, while its non-GAAP gross loss was $1.7 million, or -13.7% of revenue. FTC Solar's GAAP net loss for the quarter was $8.8 million, or $0.07 per share, and its adjusted EBITDA loss was $10.7 million.
Outlook
For the second quarter of 2024, FTC Solar is targeting revenue between $10.5 million and $15.5 million, with a non-GAAP gross loss between $3.1 million and $1.1 million. The company expects non-GAAP operating expenses between $8.6 million and $9.2 million, and an adjusted EBITDA loss between $12.6 million and $9.8 million.Looking ahead, FTC Solar is aiming to achieve adjusted EBITDA breakeven in the third quarter of 2024 and move into profitability in the fourth quarter. The company believes it can achieve gross margins above 20% in the future as revenue levels scale, driven by cost reduction initiatives and improvements in its product portfolio and customer engagement.
Geographic and Product Diversification
While the majority of FTC Solar's revenue has historically been generated in the United States, the company is working to expand its international presence. In the first quarter of 2024, the company saw growing activity in markets such as Australia, South Africa, and Europe, though it did not provide specific revenue breakdowns.In terms of product mix, FTC Solar's portfolio includes both its two-panel in-portrait Voyager system and its one-module-in-portrait Pioneer system. The company has seen increased demand for its 1P Pioneer solution, though it continues to maintain a presence in the 2P tracker market as well.
Liquidity
As of March 31, 2024, FTC Solar had $60 million in cash and restricted cash on its balance sheet, with no outstanding debt. The company has approximately $65 million remaining under its at-the-market (ATM) equity offering program, which it has not utilized in recent quarters.Risks and Challenges
FTC Solar faces a number of risks and challenges that could impact its future performance. These include:1. Regulatory and trade policy changes: The company is exposed to the risk of tariffs, antidumping and countervailing duties, and other trade barriers that could affect the cost and availability of its products.
2. Supply chain disruptions: FTC Solar relies on a global supply chain for its components and materials, which could be impacted by factors such as the COVID-19 pandemic, geopolitical tensions, and transportation issues.
3. Customer concentration: The company currently relies on a small number of large customers, which could make it vulnerable to changes in their project plans or financial health.
4. Technological innovation: The solar industry is rapidly evolving, and FTC Solar must continue to innovate and develop new products to maintain its competitive edge.
5. Liquidity and capital requirements: While the company currently has a strong cash position, it may need to raise additional capital in the future to fund its growth and operations.