Ftc Solar, Inc. ((FTCI)) has held its Q4 earnings call. Read on for the main highlights of the call.
FTC Solar’s recent earnings call reflects a company on the cusp of significant growth, despite facing ongoing challenges. The sentiment expressed during the call was cautiously optimistic, highlighting substantial progress in expanding its backlog and securing new agreements. However, the company continues to grapple with a year-over-year revenue decline, persistent net losses, and negative gross margins. FTC Solar is committed to enhancing operational efficiencies and anticipates improved performance by 2025.
Significant Backlog and New Agreements
FTC Solar has made impressive strides in expanding its backlog, adding multiple times its current annual revenue run rate. The company has signed long-term agreements, including a notable five-year, five-gigawatt supply arrangement with Recurrent Energy. Additionally, new project awards from GPG and Rosendin totaling 613 megawatts further bolster its future prospects.
Revenue Growth and Positive Outlook
The company reported Q4 2024 revenue of $13.2 million, marking a 30.2% increase from the previous quarter. Looking ahead, FTC Solar expects revenue to grow to between $18 million and $20 million in Q1 2025, representing a 44% increase at the midpoint from Q4 2024. This positive outlook underscores the company’s potential for future growth.
Operational Efficiency Improvements
FTC Solar has achieved significant reductions in non-GAAP operating expenses, which fell to $7.4 million, the lowest level since early 2021. This decrease from $8.1 million in the prior quarter and $10.8 million in the same quarter last year highlights the company’s focus on improving operational efficiencies.
Strong Bookings Momentum
The company’s bidding run rate has nearly doubled compared to the second quarter of the previous year. FTC Solar is concentrating on increasing its domestic content capabilities and gaining international traction in regions such as Australia and Europe, which positions it well for future growth.
Decreased Year-Over-Year Revenue
Despite positive developments, FTC Solar experienced a 43.1% decrease in revenue compared to the year-ago quarter, attributed to lower product volumes. This decline underscores the challenges the company faces in maintaining consistent revenue growth.
Continued Net Loss
FTC Solar reported a GAAP net loss of $12.2 million for Q4 2024. While this is an improvement over the prior quarter, it remains a significant loss, highlighting the financial hurdles the company must overcome.
Negative Gross Margins
The company reported a GAAP gross loss of $3.8 million, or 29.1% of revenue, and a non-GAAP gross loss of $3.4 million, or 25.6% of revenue. These figures indicate ongoing challenges in achieving positive gross margins.
Forward-Looking Guidance
FTC Solar’s leadership provided optimistic guidance for 2025, emphasizing expectations for continued revenue growth. The company aims to achieve adjusted EBITDA breakeven on a quarterly basis and has set a Q1 2025 revenue target between $18 million and $20 million. With $67 million in new purchase order additions, the contracted backlog now stands at $502 million. Strategic initiatives, including a five-year supply agreement with Recurrent Energy and plans to introduce a 100% domestic content offering by Q3 2025, are designed to support sustainable growth and profitability.
In summary, FTC Solar’s earnings call painted a picture of a company with a promising future, backed by a strong backlog and new agreements. Despite facing challenges such as revenue decline and net losses, the company is focused on operational efficiencies and strategic initiatives to drive growth. Investors and market watchers will be keen to see how FTC Solar navigates these challenges and capitalizes on its growth opportunities in the coming years.