• Revenue growth of 58% q/q, significant gross margin improvement
  
• Project backlog crosses billion-dollar mark for first time at $1.2B, with $240 million added
• Total project pipeline¹ reaches new record high of 110GW
• Announced U.S. manufacturing joint venture utilizing domestic steel

AUSTIN, Texas, Feb. 28, 2023 (GLOBE NEWSWIRE) -- FTC Solar, Inc. (Nasdaq: FTCI), a leading provider of solar tracker systems, software and engineering services, today announced financial results for the fourth quarter ended December 31, 2022.

“I’m pleased to report that fourth quarter results came in above the mid-point of our guidance on all metrics,” said Sean Hunkler, FTC Solar President and Chief Executive Officer. “While the U.S. market continues to be impacted by a UFLPA-related module shortage, we were able to finish the year on an improving trajectory, demonstrating 58% revenue growth over the third-quarter lows, along with significantly improved gross margin, as our cost-reduction initiatives are just beginning to show up in our results.

“As I reflect on my first full calendar year as CEO in 2022, I am proud of how the team navigated many external challenges. The year began with historically high logistics and steel costs, followed by a rather challenging regulatory environment in the U.S. The team responded well to the challenges, utilizing the downturn to focus on what we can control and significantly improving our competitive positioning across nearly all aspects of our business.

“We now have a materially lower product cost structure on current and future projects, which puts us on track for additional improvement in gross margin as our revenue grows. We have a more comprehensive product line that expands our addressable market in the U.S. and internationally. We are growing and diversifying in new markets and are positioned with a strengthened supply chain, including our recently announced U.S. manufacturing joint venture, which will bolster our ability to support customers with domestic content to capture monetary benefits from the Inflation Reduction Act. We also have a record backlog and pipeline that demonstrates increasing customer interest and global adoption. Looking ahead, we believe the solar market is not only poised to recover but is poised to recover with powerful and increasing, long-term growth tailwinds."

Contracted and awarded orders² as of February 28, 2023, were $1.2 billion, and our pipeline has grown to a record high of 110GW. Since our last update on November 9, 2022, the company has added $240 million of backlog. Importantly, the vast majority of the additions this period are not impacted by UFLPA. In aggregate, our backlog now includes approximately $400 million of non-UFLPA impacted projects as we continue to diversify our sales efforts.

Summary Financial Performance: Q4 2022 compared to Q4 2021

Total fourth quarter revenue was $26.2 million, in line with our prior guidance range. This revenue level reflects the lower demand environment in the U.S., as customers struggle to navigate the regulatory environment and get line of sight to solar modules. This revenue level represents an increase of 58.2% compared to the prior quarter and a decrease of 74.2% year-over-year, driven primarily by lower volume.

GAAP gross loss was $1.9 million, or 7.3% of revenue, compared to $9.5 million, or 57.4% of revenue in the prior quarter. Non-GAAP gross loss was $0.9 million or 3.4% of revenue. The result for this quarter compares to a non-GAAP gross loss of $7.4 million in the prior-year period, with the difference driven primarily by lower product revenue, partially offset by improved logistics margin.

GAAP operating expenses were $17.9 million. On a non-GAAP basis, excluding stock-based compensation and certain other expenses, operating expenses were $10.0 million, compared to $9.0 million in the year-ago quarter. The year-over-year increase was driven primarily by higher spending on research and development as well as the absence of credits recorded in the year-ago quarter.

GAAP net loss was $20.5 million or $0.20 per share, compared to a loss of $25.6 million or $0.25 per share in the prior quarter and compared to a net loss of $23.9 million or $0.25 per share in the year-ago quarter. Adjusted EBITDA loss, which excludes approximately $9.5 million, including stock-based compensation expense, certain consulting and legal fees, severance and other non-cash items, was $11.0 million. This result compares to an Adjusted EBITDA loss of $17.7 million in the prior quarter and $16.4 million in the year-ago quarter.

Outlook
For the first quarter of 2023, we are targeting continued sequential growth in revenue of approximately 37%-53%. Along with this growth, we anticipate additional improvement in gross margin into positive territory as the benefits of our cost-reduction initiatives continue to show through.

For the second quarter of 2023, we expect to see continued operational improvements.

Overall, we continue to believe the ingredients are in place for a very strong industry recovery and long-term growth. The pace of the recovery in our largest market, the U.S., will largely be determined by the pace of improvement for the importation of modules into the U.S. Once improvement does occur at scale, we believe FTC Solar is increasingly well positioned competitively to capitalize on that growth, with a lowered cost-structure, innovative new products, a record pipeline and more than a billion dollars in backlog.

Fourth quarter 2022 Earnings Conference Call

FTC Solar’s senior management will host a conference call for members of the investment community at 8:30 a.m. E.T. today, during which the company will discuss its fourth quarter results, its outlook and other business items. This call will be webcast and can be accessed within the Investor Relations section of FTC Solar's website at investor.ftcsolar.com. A replay of the conference call will also be available on the website for 30 days following the webcast.

About FTC Solar Inc.
Founded in 2017 by a group of renewable energy industry veterans, FTC Solar is a leading provider of solar tracker systems, technology, software, and engineering services. Solar trackers significantly increase energy production at solar power installations by dynamically optimizing solar panel orientation to the sun. FTC Solar’s innovative tracker designs provide compelling performance and reliability, with an industry-leading installation cost-per-watt advantage.

Footnotes
1. The term ‘pipeline’ refers to the total amount of uncontracted projects in the solar energy market to which the company has visibility as a potential sale opportunity for its trackers. The size of our pipeline does not guarantee future sales results or revenues, which will depend on our ability to convert pipeline opportunities to binding sales orders.

2. The term ‘backlog’ refers to the combination of our executed contracts and awarded orders, which are orders that have been documented and signed through a contract, where we are in the process of documenting a contract but for which a contract has not yet been signed, or that have been awarded in writing or verbally with a mutual understanding that the order will be contracted in the future. In the case of certain projects, including those that are scheduled for delivery on later dates, we have not locked in binding pricing with customers, and we instead use estimated average selling price to calculate the revenue included in our contracted and awarded orders for such projects. Actual revenue for these projects could differ once contracts with binding pricing are executed, and there is also a risk that a contract may never be executed for an awarded but uncontracted project, or that a contract may be executed for an awarded but uncontracted project at a date that is later than anticipated, thus reducing anticipated revenues. Please refer to our SEC filings, including our Form 10-K, for more information on our contracted and awarded orders, including risk factors.

Forward-Looking Statements
This press release contains forward looking statements. These statements are not historical facts but rather are based on our current expectations and projections regarding our business, operations and other factors relating thereto. Words such as “may,” “will,” “could,” “would,” “should,” “anticipate,” “predict,” “potential,” “continue,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates” and similar expressions are used to identify these forward-looking statements. These statements are only predictions and as such are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. You should not rely on our forward-looking statements as predictions of future events, as actual results may differ materially from those in the forward-looking statements because of several factors, including those described in more detail above and in our filings with the U.S. Securities and Exchange Commission, including the section entitled “Risk Factors” contained therein. FTC Solar undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events or changes in its expectations, except as required by law.

FTC Solar Investor Contact:
Bill Michalek
Vice President, Investor Relations
FTC Solar
T: (737) 241-8618
E: This email address is being protected from spambots. You need JavaScript enabled to view it. 

FTC Solar, Inc.
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(unaudited)

FTC Solar, Inc.
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(unaudited)

FTC Solar, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)

Notes to Reconciliations of Non-GAAP Financial Measures to Nearest Comparable GAAP Measures

We present Non-GAAP gross profit (loss), Non-GAAP operating expense, Adjusted EBITDA, Adjusted net loss and Adjusted EPS as supplemental measures of our performance. We define Adjusted EBITDA as net loss plus (i) income tax (benefit) or expense, (ii) interest expense, (iii) depreciation expense, (iv) amortization of intangibles, (v) amortization of debt issuance costs, (vi) stock-based compensation (vii) gain on extinguishment of debt, (viii) gain from disposal of our investment in an unconsolidated subsidiary, (ix) non-routine legal fees, (x) severance, (xi) other costs and (xii) loss from unconsolidated subsidiary. We define Adjusted net loss as net loss plus (i) amortization of intangibles, (ii) amortization of debt issuance costs (iii) stock-based compensation, (iv) gain on extinguishment of debt, (v) gain from disposal of our investment in an unconsolidated subsidiary, (vi) non-routine legal fees, (vii) severance, (viii) other costs, (ix) loss from unconsolidated subsidiary and (x) income tax expense of adjustments. Adjusted EPS is defined as Adjusted Non-GAAP net loss per share using our weighted average basic and diluted shares outstanding.

Non-GAAP gross profit (loss), Non-GAAP operating expense, Adjusted EBITDA, Adjusted net loss and Adjusted EPS are intended as supplemental measures of performance that are neither required by, nor presented in accordance with U.S. generally accepted accounting principles (“GAAP”). We present these non-GAAP measures, many of which are commonly used by investors and analysts, because we believe they assist those investors and analysts in comparing our performance across reporting periods and on an ongoing basis, as well as against other entities, by excluding items that we do not believe are indicative of our core operating performance. In addition, we use Adjusted EBITDA, Adjusted Non-GAAP net loss and Adjusted EPS to evaluate the effectiveness of our business strategies.

Non-GAAP gross profit (loss), Non-GAAP operating expense, Adjusted EBITDA, Adjusted net loss and Adjusted EPS should not be considered in isolation or as substitutes for performance measures calculated in accordance with GAAP and you should not rely on any single financial measure to evaluate our business. These Non-GAAP financial measures, when presented, are reconciled to the most closely applicable GAAP measure as disclosed below.

The following table reconciles Non-GAAP gross profit (loss) to the most closely related GAAP measure for the three and twelve months ended December 31, 2022 and 2021, respectively:

The following table reconciles Non-GAAP operating expenses to the most closely related GAAP measure for the three and twelve months ended December 31, 2022 and 2021, respectively:

The following table reconciles Non-GAAP Adjusted EBITDA to the related GAAP measure of loss from operations for the three and twelve months ended December 31, 2022 and 2021, respectively:

The following table reconciles Non-GAAP Adjusted EBITDA, Adjusted net loss and Adjusted EPS to the related GAAP measure of net loss for the three months ended December 31, 2022 and 2021, respectively:

(a) Non-routine legal fees represent legal fees and settlement costs incurred for matters that were not ordinary or routine to the operations of the business.
(b) Severance costs were incurred related to a 2022 workforce reduction and agreements with certain executives in 2021 due to restructuring changes.
(c) Other costs include a 2022 write-off of deferred costs relating to certain uncompleted transactions and taxes due in 2021 resulting from settlement of certain IPO related stock-based awards.

The following table reconciles Non-GAAP Adjusted EBITDA, Adjusted net loss and Adjusted EPS to the related GAAP measure of net loss for the twelve months ended December 31, 2022 and 2021, respectively:

(a) Our management excludes the gain from current year collections of contingent contractual amounts arising from the sale in 2021 of our investment in our unconsolidated subsidiary, as well as the gain from the 2021 sale, when evaluating our operating performance, along with the loss from operations of our unconsolidated subsidiary prior to the sale.
(b) Non-routine legal fees represent legal fees and other costs incurred for matters that were not ordinary or routine to the operations of the business.
(c) Severance costs were incurred related to agreements with certain executives in both years and a 2022 workforce reduction due to restructuring changes.
(d) Other 2022 costs include certain amounts related to our acquisition of HX Tracker, costs attributable to settlement of stock-based compensation awards in 2022 resulting from our IPO, shareholder follow-on registration costs and other items pursuant to our IPO, write-off of deferred costs relating to certain uncompleted transactions and installment payments relating to a 2021 CEO transition event. Other costs during 2021 include consulting fees in connection with operations and finance, costs associated with our IPO and a 2021 CEO transition.