Array Technologies raises 2025 revenue guidance to $1.25B-$1.28B as order book climbs to $1.9B, driven by new products and APA integration

Earnings Call Insights: Array Technologies (ARRY) Q3 2025

MANAGEMENT VIEW

* CEO Kevin Hostetler introduced the quarter as "another exceptional quarter of commercial, operational and financial performance," with revenue reaching $393 million, a 70% year-over-year increase, and volume up 56%. Hostetler noted "the completion of the APA acquisition midway through the quarter contributed approximately $17 million in revenues" and highlighted surpassing $1 billion in year-to-date revenue, exceeding 2024's annual total. He emphasized "sequential adjusted gross margin improvement quarter-over-quarter, driven by outperformance in our ATI business" and a book-to-bill ratio of greater than 1, with order book growth and strong demand for new products. Hostetler added "OmniTrack, Skylink and Hail XP...already account for nearly 40% of our order book." The order book stood at $1.9 billion, not including APA’s backlog, with over 95% from domestic business. He reported strong integration progress with APA and a unified sales strategy: "APA is already benefiting from Array support with notable momentum in larger utility-scale project opportunities across both engineered foundations and fixed tilt systems." Product co-development is underway with new solutions expected in the second half of 2026. Hostetler also mentioned a multiyear, multi-gigawatt portfolio win with an independent power producer in Q4.
* President and COO Neil Manning described the supply chain strategy as "proactively executed," focusing on cost optimization and flexibility amid dynamic global tariffs, with over 50 domestic and 100 international suppliers supporting agility. Manning explained, "tariffs have significantly increased costs for imported steel and aluminum products...Our team has responded by negotiating tariff relief with the suppliers, leveraging domestic sourcing and utilizing USMCA derivative rules to minimize exposure." He reported a reduction in tariff exposure to less than 14% of bill of materials by year-end.
* CFO Keith Jennings stated, "Revenue was $393 million, representing growth of 70% 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." Jennings further highlighted adjusted gross margin at 28.1%, adjusted EBITDA of $72 million with an 18.3% margin, and net income attributable to common stockholders at $18 million. He said, "Adjusted diluted net income per share was $0.30 compared to $0.17 in the prior year and $0.25 in the second quarter." Jennings announced updated 2025 guidance, raising revenue expectations to $1.25-$1.28 billion, with adjusted gross margin at 27%-28% and adjusted EBITDA at $185-$195 million.

OUTLOOK

* Management raised full-year 2025 revenue guidance to a range of $1.25 billion to $1.28 billion, increasing the midpoint by over $60 million and including approximately $50 million from APA. Adjusted gross margin guidance is now 27% to 28%, reflecting tariff pass-through, APA impact, delayed international projects, and inflationary pressures. Adjusted G&A is projected at $160-$165 million, adjusted EBITDA at $185-$195 million, and adjusted diluted EPS at $0.64-$0.70. Free cash flow is forecast at about $100 million for 2025, with capital expenditures expected to be $20 million.
* Hostetler indicated optimism for 2026, expecting both organic growth and APA integration to support performance, noting "our ongoing commitment to customer engagement continues to enhance both the quality and mix of our order book."

FINANCIAL RESULTS

* Revenue for Q3 2025 was $393 million. Adjusted gross profit was $111 million, with an adjusted gross margin of 28.1%. Adjusted SG&A was $39 million, just under 10% of revenues. Adjusted EBITDA was $72 million, with an adjusted EBITDA margin of 18.3%. GAAP net income attributable to common stockholders was $18 million. Adjusted net income was $46 million. Adjusted diluted net income per share was $0.30. Net cash generated by operating activities was $27 million. Net cash used for investing activities was $170 million, primarily for the APA acquisition and Albuquerque facility. Free cash flow for the period was $22 million, year-to-date total $44 million. Array ended the quarter with $222 million in cash, total liquidity over $365 million, and a net debt leverage ratio of 2.1x trailing 12 months adjusted EBITDA.

Q&A

* Mark W. Strouse, JPMorgan: Asked about post-Safe Harbor demand normalization and outlook for the order book. CEO Hostetler replied the business is "returning to a period of more normalized flow of business," indicating no "big windfall of safe harbor" expected and that "orders we're receiving now are much more normalized demand for the next couple of years."
* Strouse, JPMorgan: Queried about 4Q EBITDA margins and 2026 cadence. CFO Jennings replied, "4Q is, I would call it, a trough quarter. It is affected primarily by lower revenue volumes than anything else." He expressed confidence in maintaining margin profile barring "massive inflation and tariffs."
* Joseph Osha, Guggenheim: Clarified non-APA revenue guidance and Q4 revenue pull-ins. Jennings confirmed both. Osha asked about order book visibility into 2026. Jennings said internal expectations are for further backlog build, and CEO Hostetler emphasized higher order book quality due to a greater share of Tier 1 customers and more domestic content.
* Julien Dumoulin-Smith, Jefferies: Inquired about business scope expansion post-APA. Jennings said Array will "continue to look at how we increase the share of our customers' wallet...focusing under the panel." Hostetler discussed minimal investment required for integrated foundation solutions and strong early traction.
* Jonathan Windham, UBS: Asked about international business and domestic export opportunities. Manning described year-to-date progress in STI segment and Australia, with strong pipeline for new products in targeted regions. Supply chain for international projects is determined per project for lowest landed cost.
* Brian Lee, Goldman Sachs: Questioned gross margin puts/takes for 2026. Jennings said "we also are committing that we're going to strive to maintain our gross margins in the range that we're currently operating."
* Ben Kallo, Baird: Asked about market share gains and value proposition. Hostetler pointed to "flight to quality" and technical sales differentiators, noting higher ASPs this quarter tied to commodity input prices.
* Philip Shen, ROTH: Asked about potential Brazil/LatAm upside and APA revenue mix. Manning discussed awarded business not yet in the order book; Jennings indicated APA 2025 revenue will see slight growth, with strong outlook as APA is introduced to more utility scale clients.
* Dimple Gosai, BofA: Inquired about cost pass-through discipline amid steel and tariff changes. Jennings and Manning both emphasized ability to pass through most steel and tariff costs, with 70%-75% of contracts allowing direct tariff pass-through.
* Colin Rusch, Oppenheimer: Asked about labor efficiency and installation innovation. Manning highlighted recent product innovations focusing on ease of installation, fewer components, and time-saving features.

SENTIMENT ANALYSIS

* Analysts displayed a generally positive but probing tone, with focus on sustainability of margin improvements, order book quality, and clarity on APA’s integration and international business. Questions frequently sought confirmation on guidance sustainability and competitive positioning.
* Management maintained a confident, measured tone throughout, using phrases such as "we feel really good about what we're seeing" and "we remain highly optimistic," but also flagged inflation and tariffs as key risks. During Q&A, management provided detailed explanations and reinforced confidence, occasionally noting, "we are very happy with how the year is shaping up."
* Compared to the previous quarter, both analysts and management appeared more optimistic, with fewer concerns raised about regulatory headwinds or project debookings. Management’s tone shifted from explaining risk mitigation to emphasizing growth and integration.

QUARTER-OVER-QUARTER COMPARISON

* The current quarter saw a significant revenue and volume jump, with the APA acquisition completed and $17 million in contribution. The order book grew to $1.9 billion, not including APA’s backlog, compared to $1.8 billion in the prior quarter.
* Guidance was raised, versus the prior quarter’s guidance, which did not include APA. Margin guidance narrowed slightly and incorporated APA’s initial dilutive effect.
* Management’s tone was more assured, focusing on growth from Tier 1 customers and new product adoption, and less on regulatory headwinds or project delays. Analysts shifted away from concerns over debookings and regulatory uncertainty toward questions about growth, market share, and integration.

RISKS AND CONCERNS

* Management cited inflation and tariffs, especially on steel and aluminum, as prominent risks, with ongoing strategies to negotiate relief and optimize sourcing. Jennings warned that "massive inflation and tariffs" could impact margin trajectory.
* Internationally, Brazil remains a challenge due to macroeconomic volatility. Manning acknowledged "the Brazil business and macroeconomic climate has been a challenge over the last quarters."
* APA acquisition introduces integration and synergy realization risks, though management described progress as on track.
* Analysts raised questions about backlog quality, market share stability, and cost pass-through capability, reflecting ongoing industry competitiveness and input cost volatility.

FINAL TAKEAWAY

This quarter, Array Technologies delivered robust revenue and volume growth, supported by the successful integration of APA and strong momentum in new product adoption. Management raised full-year revenue guidance, citing a record order book and expanding relationships with Tier 1 customers. Despite ongoing risks from tariffs and inflation, the company points to operational flexibility, supply chain resilience, and an innovation-focused product mix as key drivers for sustained value creation into 2026 and beyond.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/arry/earnings/transcripts]

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