FTC Solar(FTCI) - 2025 Q1 - Quarterly Report

Financial Performance - Total revenue for the three months ended March 31, 2025, was $20,803,000, representing a 65.3% increase from$ 12,587,000 in the same period of 2024[167]. - Product revenue increased by 66.9% to $18,202,000, while service revenue rose by 54.6% to$ 2,601,000 compared to the prior year[167]. - The company reported a net loss of $3,819,000 for the three months ended March 31, 2025, compared to a net loss of$ 8,771,000 in the same period of 2024[165]. - Adjusted EBITDA for the three months ended March 31, 2025, was $(9.75) million, while for the same period in 2024, it was$ (10.65) million[233]. - Adjusted net loss per share for the three months ended March 31, 2025, was $(0.84) on a diluted basis, compared to$ (0.87) for the same period in 2024[233]. Cost Structure and Expenses - The company experienced a gross loss of $3,447,000 for the three months ended March 31, 2025, with a gross margin percentage of negative 16.6%, relatively flat compared to negative 16.7% in 2024[172][173]. - Operating expenses decreased to$ 7,113,000, down 31.5% from $10,394,000 in the same period last year, primarily due to reductions in research and development, selling and marketing, and general and administrative expenses[165]. - Research and development expenses were$ 924,000, a decrease of 35.8% from $1,439,000 in 2024, representing 4.4% of total revenue compared to 11.4% in the prior year[176]. - Selling and marketing expenses dropped to$ 1,136,000, down 52.4% from $2,388,000 in 2024, accounting for 5.5% of total revenue compared to 19.0% previously[178]. - General and administrative expenses were$ 5,053,000, a decrease of 23.1% from $6,567,000 in 2024, representing 24.3% of total revenue compared to 52.2% in the prior year[180]. Supply Chain and Market Conditions - The company has diversified its supply chain, reducing reliance on China from 90% in 2019 to qualifying suppliers outside of China for certain commodities as of March 31, 2025[141]. - Disruptions in transportation and supply chain have affected costs, with international conflicts and inflation impacting material prices and logistics[144]. - The company continues to monitor logistics markets and adjust transportation methods to optimize costs amid evolving supply chain challenges[145]. - The average selling price (ASP) of solar tracker systems is influenced by supply and demand dynamics, competitive pricing pressures, and changes in product mix[159]. - The company is exposed to market risks primarily due to customer concentrations and fluctuations in steel and aluminum prices[238]. Product and Technology Development - FTC Solar reported a revenue increase driven by the sale of solar tracker systems and customized components, with contracts ranging from tens of thousands to tens of millions of dollars[155]. - The company introduced SUNOPS, a cloud-based solar asset monitoring solution, in August 2023, enhancing operational performance evaluation for solar deployments[148]. - The company has invested in technology and personnel to enhance product capabilities and expand its patent portfolio, aiming to attract and retain customers[149]. Regulatory and Economic Factors - The Inflation Reduction Act of 2022 provides a 30% Investment Tax Credit (ITC) for solar projects starting construction by the end of 2032, declining to 26% and 22% for projects starting in 2033 and 2034, respectively[143]. - The U.S. imposed a universal 10% tariff on most imports effective April 5, 2025, with a 145% tariff on goods from China, impacting the cost structure of tracker systems[142]. - Climate change is expected to increase solar generation in the U.S. by 34% in 2025 and 17% in 2026, driving demand for FTC Solar's products[150]. Cash Flow and Capital Management - Cash utilized in operating activities was$ 8.5 million for the three months ended March 31, 2025, compared to $11.9 million in the same period of 2024, indicating a reduction of 28.5%[188][195]. - Working capital decreased from$ 27.1 million at December 31, 2024, to $20.2 million at March 31, 2025, a decline of approximately 25.5%[198]. - The company had$ 5.9 million in cash on hand and $20.2 million in working capital as of March 31, 2025[188]. - The company anticipates proceeds of up to$ 10 million from an additional private placement of debt executed on March 4, 2025[194]. - The company incurred capital expenditures of approximately $0.1 million primarily for tooling during the three months ended March 31, 2025[199]. Investment and Financial Instruments - The company achieved a gain from the disposal of an investment in an unconsolidated subsidiary of$ 3,204,000, down 21.6% from $4,085,000 in the previous year[182]. - Earnout payments received from Dimension were$ 3.2 million for the three months ended March 31, 2025, compared to $4.1 million for the same period in 2024, reflecting a decrease of 22%[184]. - The fair value of warrants decreased from$ 9.5 million at December 31, 2024, to $4.9 million at March 31, 2025, resulting in a non-cash gain of$ 4.6 million[185]. - Loss from unconsolidated subsidiary Alpha Steel decreased by 57.7%, from $265,000 in Q1 2024 to$ 112,000 in Q1 2025[186]. - Senior Notes outstanding totaled $15.6 million in principal and accrued interest as of March 31, 2025[243].