Array Technologies Charts Growth Amid Margin Pressures

Array Technologies Inc ((ARRY)) has held its Q4 earnings call. Read on for the main highlights of the call.

Array Technologies’ latest earnings call struck an upbeat tone, with management emphasizing powerful revenue growth, record bookings and a stronger balance sheet. While margins compressed and GAAP results were hurt by non‑cash charges, executives framed these as largely accounting and cyclical issues, arguing that the company’s operational momentum and product roadmap leave it well positioned for the next phase of growth.

Record Revenue and Strong Volume Growth

Array closed 2025 with nearly $1.3 billion in revenue, a robust 40% increase from the prior year that underscores accelerating demand for its solar tracker solutions. Management highlighted a 35% rise in tracker volumes as the primary driver, signaling market share gains and solid execution in a tougher macro and pricing environment.

Record Order Book and Booking Momentum

The company ended 2025 with a record $2.2 billion order book, backed by roughly 2x book‑to‑bill ratios at both Array and APA. Management noted that quarterly new bookings reached their highest level since 2023, with APA adding about $100 million, providing strong visibility into future revenue despite near‑term market noise.

APA Acquisition Integration and Contribution

Array reported that the APA acquisition is fully integrated and already contributing meaningfully to growth and profitability. APA delivered $50 million of 2025 revenue, including $33 million in Q4, and was immediately accretive to EBITDA while broadening the portfolio into foundations and fixed‑tilt systems.

Profitability on an Adjusted Basis

On an adjusted basis, the company posted gross profit of $347 million at a 27% margin, alongside adjusted EBITDA of $188 million for a 15% margin. Adjusted net income rose 13% to $103 million and adjusted EPS climbed 12% to $0.67, illustrating underlying earnings strength even as reported margins faced year‑over‑year pressure.

Improved Liquidity and Capital Structure

Liquidity improved notably, with more than $380 million available at year‑end and net leverage of 2.3x trailing adjusted EBITDA. Following the February upsizing of its revolver to $370 million, Array’s pro forma available liquidity nears $600 million, giving the company ample financial flexibility to fund growth and manage volatility.

Product and Technology Development

Management spotlighted an active innovation pipeline, including the global rollout of DuraTrack and a next‑generation terrain‑following capability for OmniTrack. A new U.S. tracker version, a planned integrated tracker‑plus‑foundation product for the second half of 2026 and growing SmartTrack software subscriptions and retrofit deals are all expected to deepen customer stickiness.

Commercial and Customer Quality Improvements

The order book is increasingly anchored in higher‑quality, domestic demand, with about 95% of it in the U.S. and more than half sold directly to Tier 1 customers. Early‑stage bidding for domestic projects rose over 20%, and Array secured 4 GW of orders from new customers in 2025, pointing to continued market share expansion.

Operational Progress and Cost Discipline

Array continued to tighten its cost structure, cutting adjusted SG&A to $163 million, or 12.7% of revenue, versus 15.4% a year earlier and moving closer to its 10% target. Investments in an Asia supply‑chain center of excellence and a new Albuquerque facility are aimed at supporting manufacturing efficiency and optimizing incentives.

GAAP Net Loss and One-Time Charges

Despite adjusted profit growth, Array reported a GAAP net loss attributable to common shareholders of $112 million for 2025. This was driven primarily by a non‑cash $103 million goodwill impairment and a $30 million one‑time inventory valuation charge related to the earlier STI acquisition.

Adjusted Margin Compression vs. Prior Year

Adjusted gross and EBITDA margins declined versus 2024, largely because a sizable 45X amortization benefit that lifted prior‑year results rolled off. Management also cited about 80 basis points of pressure from tariffs and pricing, with adjusted EBITDA margin slipping to 15% from 19%, even as revenue surged.

Free Cash Flow and Conversion Pressure

Free cash flow dropped to $80 million in 2025, well below historical conversion levels, with adjusted EBITDA‑to‑free‑cash conversion around 43%. Executives cautioned that 2026 conversion is likely to stay near that level rather than the 70%–80% range seen in earlier years, as working‑capital needs remain elevated.

Inventory Valuation and Product Transition Charge

The company recorded a one‑time inventory valuation charge in the fourth quarter tied to its product transition strategy. Array is phasing out older H250 configurations that do not support SmartTrack and consolidating onto a unified global platform, a move expected to simplify operations and better align inventory with future demand.

Margin and Pricing Headwinds

Rising commodity costs and aggressive pricing across the solar supply chain continue to weigh on margins. Management added that APA, while EBITDA‑accretive, was slightly dilutive to adjusted gross margins in 2025, underscoring the balancing act between growth, mix and profitability.

Seasonality and Near-Term Revenue Split

Regulatory uncertainty and a temporary market pause in 2025 distorted typical seasonality and pushed some activity into later periods. For 2026, Array expects about 40% of revenue in the first half and 60% in the back half, with Q1 revenue around $200 million and a sequential dip in EBITDA from Q4 levels.

International Market Headwinds

Array is facing tougher conditions in several international markets, particularly Brazil and Spain, where macro and policy uncertainty have slowed project activity. The company has been selectively holding back on some awards in those regions, choosing to prioritize more attractive and stable opportunities elsewhere.

2026 Guidance and Forward-Looking Outlook

For 2026, management guided to revenue of $1.4–$1.5 billion, adjusted gross margin of 26%–27% and adjusted EBITDA of $200–$230 million, implying flat underlying margins once prior tax benefits are normalized. Adjusted EPS is projected at $0.65–$0.75, with free‑cash conversion similar to 2025 and growth underpinned by the record order book and reinforced liquidity.

Array’s earnings call painted a picture of a company balancing rapid top‑line expansion with temporary margin and cash‑flow friction. With APA integrated, a rich product roadmap, higher‑quality domestic demand and a fortified balance sheet, management argued that the strategic foundation is in place, leaving investors focused on execution, margin stabilization and conversion as the next phase unfolds.