Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- FTC Solar Inc (FTCI, Financial) announced the appointment of Yann Brandt as the new CEO, bringing extensive experience in the solar industry.
- The company has secured a strong position in the market with its 2P offering and is expanding into the 1P segment.
- FTC Solar Inc (FTCI) has a contracted backlog of $505 million, indicating a solid foundation for future revenue.
- The company has improved its breakeven revenue level to $50 million to $60 million per quarter, enhancing its path to profitability.
- FTC Solar Inc (FTCI) has a broad and comprehensive product portfolio, allowing it to be technology agnostic and optimize customer projects.
Negative Points
- FTC Solar Inc (FTCI) experienced a 64.7% decrease in revenue compared to the year-ago quarter, reflecting significant challenges.
- The company is facing project delays due to interconnection and financing issues, impacting revenue expectations for the second half of the year.
- FTC Solar Inc (FTCI) reported a GAAP gross loss of $2.3 million, indicating ongoing financial struggles.
- The company has a low cash balance of $10.8 million, raising concerns about liquidity and the need for fresh capital.
- FTC Solar Inc (FTCI) is currently subscale in revenue, making it more vulnerable to customer project delays.
Q & A Highlights
Q: For the contracted portion of the backlog of $505 million, how much of that can be recognized in the next 12 months? And what are the catalysts needed to release more of the backlog sooner? How do you expect bookings to trend over the next few quarters?
A: Cathy Behnen, CFO: The $500 million in contracted purchase orders are lined up and ready, with execution dependent on customer actions. We expect continued acceleration of bookings due to the addition of strong sales leaders and the new CEO's industry relationships.
Q: Have you seen any impact from the new Southeast Asia AD/CVD causing module availability constraints?
A: Ahmad Chatila, Director: While there are industry-wide issues, we have not seen specific impacts on our projects from the Southeast Asia AD/CVD.
Q: What revenue and gross margin run rate is needed for EBITDA to turn positive in 2025?
A: Ahmad Chatila, Director: We need revenue between $50 million and $60 million per quarter. Our current expenses are around $14 million without bonuses and $16-$17 million with bonuses. At $50 million, we break even without bonuses, and at $60 million, we break even with bonuses.
Q: Do you expect gross margin to be positive in Q4 of this year?
A: Cathy Behnen, CFO: While we aren't providing specific guidance, as revenue grows, you will see improvements in our gross margin due to strong project margins.
Q: With cash at $10.8 million and negative EBITDA, do you need to bring in fresh capital this quarter?
A: Cathy Behnen, CFO: Based on our forecast and timing of deposits and collections, we don't need to fund projects through the balance sheet. We anticipate more cash inflows from working capital in the second half of the year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
