FTCI - Earnings call transcript Q2 2022

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Operator

Good day, and welcome to the FTC Solar Second Quarter 2022 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please note this event is being recorded. At this time, I would now like to turn the conference to Vice President of Investor Relations, Mr. Michalek. Bill ahead. go Please

Bill Michalek

financial welcome, call. FTC you'd Prior to release, an and were presentation, XXXX earlier posted likely second earnings opportunity today. supplemental earnings our conference to review and everyone, you, slide Solar's which to quarter had information Thank today's call,

Morris, on FTC Executive at not joined ftcsolar.com. yet available today documents, company's Solar's section Chief Relations the by they these you've Investor Officer; Phelps Commercial of Cook, Hunkler, President Financial I'm Officer; and company's If the are Officer. Sean and reviewed the Chief our website Patrick Chief

Before we and forward-looking beliefs everyone the speak today's assumptions statements current the discussion of environment and begin, contains I remind in only our based date. on as that current

statements and obligation assume risks actual information for our as required forward-looking and on press by to from materially filings specific include events We such differ expectations. and risk uncertainties results no Please current refer more to law. except the release update our and As information, such, SEC could other these factors.

the each measure. financial financial we includes As non-GAAP GAAP a and this that today. reconciliation release Please discussing note full of both expect, will the to morning GAAP be measure earnings you'd nearest measures applicable issued non-GAAP

that, addition, With that I'll and executed now metric over In we'll the Sean. our contract for release. our turn orders our is in definition discuss and awarded press also to included call

Sean Hunkler

going good activity. a to of on quarter I'm fair again been morning, market an and there's the everyone. Thanks, as Bill, update start with environment this amount

concerns, countervailing along the update their essentially solar was duties factories. halted module significant imports last most modules biggest of its retroactive far import and in antidumping That tariffs, U.S. had had WRO with recall, investigation the the concern risk makers As at with you lingering related may idled time May, of our of some the or by industry. AD/CVD, in

related that the seen projects is to module bit the new time, At with recovery. XX and Uyghur and and since get uncertainty reviews compliance decisions by the market There substantial Once effective executive Since credit. incentives essentially the customs activity mapping this Inflation is news the construction which Prevention around achieving months. of Forced sight is projects risk same became there materials of were other includes in or line full patrol. on UFLPA, border other to that whether importers proposed U.S. of we issued removes right. order. the and the see still time solar June on in table customers the As a module additional cheered change lines market Act, and sufficient then, or project of Labor a around and the potential a Reduction tariff the in a this pushed clarity is AD/CVD an and in result, an One and market tax President June, have extension to believe investment customer however, executive will deliveries, discussion in swift the The rules order factors. UFLPA, new marked increase we resulting for around for Act,

are sufficient demand the to that amount availability a some funnel market of discussions, both is to meet such materials recent about are delayed channel of the underlying that early anticipating labor projects in pent-up on EPCs already our we many and on we module within and and in this are supply many a hearing the projects Based of further new September significant frame. demand. worried late XXXX of time strong There demand. solar would bill growth are developers future industry, there and believe While customers the extend with August, serve checks a drivers customer and clarity bolster XXXX

building focus R&D. even once customer international position emerge the out we efficiency cuts has start across tracker And initiative, business, at best we both on demand, to key when our finally, ourselves of Our growth. during operational margins, and strategic significant that one enhanced capture is flowing margins design-to-value to modules and to continue systems, future FTC through again downturn Solar focused with To than that which and be costs, to take higher building our than projects grow higher regulatory-driven relationships, margin costs stronger enabling market our faster accelerating improving been end, to profitability. strengthening things: this simply a again have DG that has growth profitability improvement, historical, controlling at our few and to gross

We have incredible team. R&D an

to our in of continued in excited area We about future talk new invest and about We'll products. are pipeline R&D this more this have calls.

utility $XXX quarter. our new top and a award of customer added bookings Kenya, environment So of those South project now in our have international first million. And Thailand, the We the we areas. slowdown, and expansion total and XX are despite a includes contracted strategic includes million customer the EPC for Africa recent a $XXX from This last an since update, significant awarded progress focus customer. and bringing additions Malaysia and and new to the quarter. have continuing addition industry several highlights good to following our made last our It also

awarded last historical taken out margin of have quarter, As about improved forward significantly the we at systems. vast be we projects our majority profile relative a of cost our talked moving will as to contracted and

QX, improvement that shortly. and margins, we As our QX very talk become QX projects and in apparent will more old off about this Phelps begin in roll to projects new expect in

time, pipeline make total high gigawatts. first the believe been gross at toward positioned now, has margins when stands we're long-term We the our than plus a stated continue grown We've half pipeline. activity than to more target new significant our The range more international and our to progress that record to at well in XX normalizes. exceptional, XX% for growth project of

HX technology capabilities. progress our will quarter believe our the EPC closed And we it AUI our and accelerating in during and just also DG, many strengthening on be providing transaction provide announced continued yesterday, including partner. we've our and benefits, We will complementary that Partners further expansion, international the XP

Our sites is our The profile this We're systems tracker services software weeks. demand. to delivery under XX good on through providing the as with and off quotes are in business DG about times business a differentiated of rapid includes of for margin all of terms megawatts. design benefits installation as fast offering short excited focused eight and the and lead start

the is incredibly volumes depressed demand large. in summary, moment in environment, this the are at So but module constrained pent-up

improved off countries. Our We're and we during customers, now QX actions building put, flow we believe industry start do significantly slowdown us outpace provide our a growth I'll and call have pipeline, so cost in detail. With new have structure positioned projects after to turn and to with roll to as more this including normally we when Simply Phelps new legacy backlog adding over the strong again to move forward. that, market modules profitability. once to

Phelps Morris

good and everyone. Sean, Thanks, morning,

additional Beginning lower ahead generally range, EBITDA second and at adjusted end. the results with on comments, quarter, As our in while revenue the the coming the in margins I'd a outlook. were with follow-up our to like to our guidance second color results and gross our quarter was with performance of provide line midpoint Sean's expectations some of

lower million than small than operating amount million The million of higher represents included range and $XX.X a $XX.X in a was a or revenue year. of tracker and talked the million the in guidance demand Sean and or our in end other our levels. primarily in a UFLPA, of per second excludes reflects a doubtful that of Specifically, which adjusted regulatory costs backdrop makes lower certain volumes stock-based EBITDA revenue XX% at the revenue prior well This a growth of in $X.X public of which necessary the about. and XX.X% severance to the related year as higher $X.XX ago quarter decrease the quarter. loss loss our approximately lower was compared environment million year-over-year, of and ASPs. share GAAP of compensation partially driven million, and on quarter. margin U.S. $X.XX last WRO, compared loss $X.X and This the million offset million This the by and guidance. $XX.X consulting was were the was to better operating quarter. million. year range per ATX guidance lower due quarter sequential AD/CVD, expenses non-cash midpoint of the net revenue loss, were decrease ago or were in is share GAAP non-GAAP net overhead prior range and loss increase and accounts $X.X the legal gross or and our to a year-over-year million the $XX.X XX.X% was million $XX.X was prior of in was a becoming in million was compared than to approximately or by company allowance results as $X.X or compared revenue $X.X some XX% Non-GAAP expense improved as same the operating million share logistics by revenue compared expenses, other reduced of not a driven offset EBITDA per million margin On the that margins expenses quarters the for margin loss compensation guidance product On guidance stock-based of between prior an $XX.X quarter. lower excluding flat cost of our direct items expenses, and to GAAP ago as The million. into such basis, to the bit certain staffing range was non-GAAP absorption $X.X quarter logistics to $XX.X a percentage other the items $X.XX $XX $XX.X loss QX. and as gross compared year Adjusted quarter fees, basis, by a of was better with percentage XX.X% was shifted expense, revenue.

we liquidity, ended $XX QX $XX cash balance in of quarter a and million. positive cash of Regarding with generated million the flow

quarter, In for turn enhanced million other facility $XX With our to from modifications outlook. million to addition, we covenant that, $XXX let's reduced during XXXX, made amended credit liquidity our company. providing the for among revolving liquidity QX which the

We in quarter revenue watermark margins. low a expect represents of third and terms the

QX beyond to largely delayed projects issues. Third quarter in-flight supply new primarily revenue projects module consists the due legacy of being with

of EBITDA, across reduction implemented a Collectively, in uncertainty gross have delivered, revenue, to initiatives expectations Our to adjusted well degree as spread offset marketplace. which we module base. flow factors light legacy lower logistics revenue a relatively to low-margin overhead down with in these the a margins lower reflect being margin as the come being of higher by absorption projects percentage revenue compared expense cost the materials these

and million or $XX.X our million, loss to lower Specifically, between to you $XX third more the for targets XX%. $X.X quarter call at million negative gains million these vary the revenue $X.X non-GAAP levels. may for expect, XX% greatly as gross revenue of percentage And

expected are EBITDA expenses operating million. million to be non-GAAP loss and million between adjusted Our million between $XX the and $XX $XX and $XX

looking to sequential starting light the ahead we're see tunnel. upon strong end the to what fourth production, the we anticipate of today, wins quarter, some new Based drive Finally, revenue we growth. to at begin helping see

coupled expect margin Importantly, us. territory DTV the our be margin lower in positive initiatives, QX, behind to products significant legacy new moving with products we these will as gross delivered incorporate into improvements latest having

new our significant expected rebound between $XX with and $XX Gross begin and and fourth production. conclude or EBITDA plus we'll for project margins anticipated revenue for XX%, of from our our $X finally, to new X% adjusted to the million. targets minus questions. are a that, between relative our as again remarks, Operator? the our quarter million, I'll for norms, an million QX call and projects represented Specifically, margins turn wins enhanced over it range delivering prepared historical With operator

Operator

you. Thank

the begin session. question Harrison go question-and-answer first ahead. now Please Instructions] Sandler. [Operator comes of Our from will We Kashy Piper

Kashy Harrison

thank you morning, Hi. my taking Good for everybody and questions.

half Can us the from side you came in So through you capital year? managed It capital just changes bit. looks thinking down I the cash you're well on of the start wanted this like about working maybe as AR walk the think about of equation. ops you second cash quarter. and management to how working the a flow

Sean Hunkler

for Kashy. is Sean. This question. Hey, Thanks Yeah. the

by we're quarter. progress and in the of focus. in company's saw cash really So level We performance management good of a happy really terms a team great the the with

revolver as In addition, we were the able renegotiate to well.

And position company about so forward. the moving good we feel the of

a So it why to I Phelps don't color? give more turn over to little you bit

Phelps Morris

Yes. Thanks.

the did working job we terms So great quarter. a of capital in during

the burn but to bring not for we're future, of the and on I to way think a guidance kind continue down the couple going the from an you provide ways. being prior it at one, terms going there of we'll look focus cash accounts offsets on deposits sales forward. you but the for to Number about at, think obviously, in and new receivables. As we'll cash some collections guidance need look perspective some you is QX, When sales, made new customers there's potential EBITDA as it on of

continued So a focus. big

we other PwC one removed happy really, I of that last of based is place. in things think we're date was put the the the really substantial upon placed about activities that language quarter all

Kashy Harrison

million second That's quarter. hear half your That's My million. language. $XXX to And $XXX on the indicated is and about you doing about quick of concern revenue $XXX from said second just the good is you your bookings math last million. going question, guidance here, backlog up what

million 'XX and is of backlog that opposed million Can 'XX maybe scheduled $XXX how $XXX beyond? for us us less gives you 'XX through for million and of $XXX as beyond. walk So $XXX much million to

Phelps Morris

there's So in be prepared the anticipating we're We've entire remarks the a the as on 'XX. to 'XX. seen, be want backlog. customer we in the see some capacity, about seems progress materials really we about very able And do base in frankly as to strong people continued manpower mentioned, to happen speaking, said well, fact, capacity, what being excited cetera, et there enough to capacity, as concern

growth be excited very, 'XX we backlog very year. of very a and think to strong continued So going we're is about the the

Kashy Harrison

it the assume little supply? Okay. Fair it sink about Are that one then How assuming it Thank that or I to That's effectively maybe of effectively you a sort XXXX for final thinking that enough. for still sort bit out? it are XQ one, could And in. guidance? revenue the for towards takes just you longer you are module market what assuming if risk figured does you. has itself out me. Specifically, UFLPA

Phelps Morris

Yes.

And see Kashy, market, as today, So WRO us and we we've able as really issue industry. been obviously, supply. an module the single a it's to put behind that's

that same environment, modules executive what now, ceased. seems in With WRO through UFLPA. U.S. AD/CVD we've make are their and the industry exactly It able of us through UFLPA put work working way the that people was some that to is the behind terms had and required, issues so the has order, and just the be out figuring can regulatory of into not

And that is, so to our talking supply view worked in itself coming the get module going the the is, here months. to customer is in out base

And so point. that's be what inflection will enable QX our to

assumption getting module And customers. so our out again QX is revenue on the situation by based worked our on

Patrick Cook

market expansion talked other we've continued thing the to, international Patrick, And about, this as and growth you is the in the as talk well.

last saw to XXX-plus expect international you out went booked that So quarter, we sales, and continue we well. megawatts as of

to QX that contribute see that of front affected going us. is in And that not the UFLPA to we so is there's international component an by strong

Kashy Harrison

you. Thank

Operator

Schafer from Please Capital. question of next ahead. our Northland comes go Don And

Donovan Schafer

guys. Hey,

have Following module really up kind looking demonstration I see understand I'm question that in where module your have QX, people you kind all site know of thinking, is I going to specifications, of to and it's from of the exactly punch it it, or even rail. are pleasure and piece the the different what can piles call tweaks you wait kind to about kind sicknesses rail final Aurora, kind got be tracker what and rest the Voyager on size one required. be, away or to it's of are to Colorado, does there. the have or of of going at the Pearland holes until parts your But the there's the the as that, at of in knowing you the coming the be, long rail And like such components what little how Kashy's some

ahead that of all know time. of kind can You of

chain be finalize you're of So knowing had orders what of and you go in the waiting kind would those than kind also kind and Pearland's position position it deliveries final a place that but just you're this where dynamic have for the in environment of a in of where you with kind because that you're rest you to constrained QX, we've in is of sourcing supply spec so so everything on in ready in looking is just are the you materials, a know QX, can course, or is at terms that? the a of more

Sean Hunkler

Donovan, So for question. the thanks

effectively, do Voyager can everything very feel if said, you on but the And that we is resolved, We to is as view the in on accommodate module our we today. to module. So there like is module. tracker any supply the rail once is you sound adjustment the agnostic some system, of said, our good so, about, know itself order QX based

it's speaking, constraints. the module a frankly the of supply terms resolved just matter in itself getting issue chain of So

asset-light As we you an model. use know,

we multiple in the including So U.S. around suppliers have the suppliers world,

And so of gives chain. that the of issues our multiple have appear design have suppliers yes, with multiple the resolvable chain, that flexibility multiple confidence supply it that that qualifications, by we any suppliers flexible because supply and us that fact are having simply absolutely might

Phelps Morris

talking one contracts in to lot say narrowing this got call, with on different we've the three that in or manufacturers. -- the of the or that informed check or order by I'd other to earnings two kind thing on the really of we're And a module so two and customers increased

of you've good factor be sense those. to going what so with the a form is got And

able of into when we're the going going really who rails, and to of from. versus the we that to come to are your narrow to lot But So or down clarity, come modules or able two the they're with of additional module know to awards. we've been one point, narrow kind on these Don, don't Pearland's the kind a

Donovan Schafer

I then back had about Okay. And ask It some XXXX, it in helpful Vietnam. caught Great. you could was my think I know Thailand. sales if also That’s in that the attention because project I XXXX, in

all I that I me or think disclose kind we get you size of to have or make HX does I of was necessarily Maybe that's into APXX into at it of visitor And there's to HXXP gone may could that that, need if Peninsula, advocacy in services, in FTCI that of that that or racker. may can it or (ph) versus talk other sort could have soils that kind kind if the some then something the if would that? good get the Asian something kind of do Is Asia, Thailand, don't Vietnam? the are territory? Cambodia, kind project? with? if have Was tracker of of kind to trackers to some site of of been sort kind caused that you of that Voyager can't was presence it Southeast since of And of tracker win be thought willing a of specific other Do sales a tracker part an remember but there The tracker. the behind curious. engineering you it more starting have presence Thailand, with conditions what like be, if or

Sean Hunkler

Thanks, Donovan.

in it as the following excited and we in can business well, ground in that country. megawatts. the other small. in in that in Africa, see and the that we've seen get countries But to is on leads about basically concept additional we've Australia, really proof X that that a South I'm project of country because we've come really, in that the of people relatively path Thailand business where growth seen the we're It's seen So Thailand

So I'm absolutely confident.

Southeast And Thailand We team five Asia on making good of have they've people other been well. in really countries and who a call as progress.

project product As excited now have other road is top as you product thing we in the XP well. I'm tracker our with the And in is I it's HX, that, And as about then the map know, acquisition question. sell first think to to of the that for this recently able Voyager announced other so of we Helios on But tracker. Thanks our Malaysia as other countries. in lead Thailand and in we're has XP particular well. as there it to the going that opportunities sale well

Donovan Schafer

kind about, in squeeze then And Okay. Well, maybe just piles XP that in. the or the like have? certain lots actually, odd the there made redesign track site things were shape or the that plays I of if could question on you Thailand anything so fewer other that,

Phelps Morris

Yeah. land is, of view taken XP is shaped additional it I for geographies, mean what ultimate and other well. oddly a undulation. that that really solution And think seen this in our has expect challenging with long-term for FTC this there very solution parcel fits I some a on kind project XP a wins well augment developer is we've we

And of is so kind the with a project to start really tie-in that's X-megawatt this future business.

Donovan Schafer

then with just And the question, are at with Ukraine. Russia's because concerns security looking energy Europe invasion last my of people

about in where solar are just uptick kind my XP of legacy acreage. doing trackers Germany seen maybe the companies? demonstration like U.S. looking you're that just Spain if has at lot had an of historically projects amount can like a you has a with a so there's are maybe available any as fewer talk they're whether you've of situation question, some So in if of last interest, there, large penetration, Spanish had block the decent sites if

lot might have shapes. odd You more

of if you're European the in area? seeing curious kind developments any So

Phelps Morris

in kind bidding several out question, be the activities Europe policy internally big look Yes. Europe of just energy uptick No, months. uptick last XXXX have activity, a obviously, But in going the to we seen the an here you quarters. has of of amount independence going beyond. and rolled in great I several in over changes of over certainly, And be mean that are been Don. to some in out into next kind there's focus terms

the is the there engaged sense where confident that feel with had developers good for pulse have in it's And be team EPCs a a market to region and on so about market and ultimately going. able capture policy changes. XX focus that for and we'll the these point And with a very months us ground we've that

Sean Hunkler

Yeah. Thanks, Donovan.

Donovan Schafer

Yeah. Thank rest the take you, guys. of I’ll line.

Operator

of Pavel Please comes Our from question ahead. James. next Raymond Molchanov go

Pavel Molchanov

taking you manufacturing the for question. kind it's what to references credit trackers advanced of is? relation there the Thanks the in in to Act, that a are at clarify, on you amount already? Can Reduction Inflation of confusing the solar subsidy but Have looked bit

Sean Hunkler

is Hey, Sean. Pavel. This

we've studying and So waiting time this some been for for the bill to pass.

think, much in is you general, positive. we the studying But So this we're very said, a as net bill.

share well some folks externally But folks it. So so advantage have study to supply our and to our how understand that studying we absolutely we we a internally net calls some as continue But of future industry. we'll take again, chain approach as the the is. it our see bill with positive bill what more for on the details in we as best

Pavel Molchanov

Okay.

of October. steel. with Spot futures of just ask much down XX% your its reflected directly? is of last happening being steel benchmark in cost peak goods of is what's me How price from about Let that

Sean Hunkler

improvement steel as costs well about as excited we're So the in logistics.

and but both definitely we is forward. moving see a positive above they're historical net the While that are down it as highs trend still way,

Pavel Molchanov

expect a revenue then this question. kind of quick What non-U.S? Got you do it. And just be year's statistical percentage to of

Sean Hunkler

of likely about the XX%, revenue, of the in and in so In range. But terms XX% the we've now pipeline pipeline about terms revenue, talked is XX-XX.

Pavel Molchanov

Thank clear. you Very guys.

Sean Hunkler

Thank you.

Operator

ahead. Jeff from Cowen go Please comes question and of Company. Osborne next The

Jeffrey Osborne

morning. Yeah. Good

use end. for on couple a was Phelps, we my as a proxy EBITDA I loss wondering, the should cash. if Just

the Just that million. seems new breaking going to you'll covenants. It Kashy's back $XX question be to around pretty like close

bottom about just third we cash think how the the I to being the about So needs? think wanted quarter and

Phelps Morris

Yes.

way unused got about to liquidity you cash. the think covenant is one the on capacity So plus number revolver

you So liquidity to in. when that covenants, you think factor got about

borrowings the a So any rather dollars million of of couple on revolver than LCs. we don't have

next again, prior to We have goes of a any borrowings. questions burn on an to is quarter, earlier intentions And yes, cash there's EBITDA down what and from if I we'll really So borrow sales. talked offsets, continue for the the the there's consequence, as that. focus potential don't no so collect about

deposits cash the supplemented we In capacity capacity. received for quarter future addition, can or deposits that be during by the further

Jeffrey Osborne

Got Is or mention get it's is of trackers, on it. $XXX a heard every deal you upfront the of there bought deposits, I've those as, those. do if you first thumb And different? then X% you rule worth

Sean Hunkler

the down Yes. generally, upfront. at constraints also placed, as for XX% amounts. talk is forward you're even higher the within given just roughly next PO look time No, to year getting There's getting industry capacity the we

Jeffrey Osborne

actual it. that for U.S. other doubtful was an or for The allowance A was loans of that international of you. quick one’s you for or Got couple one was a the on accounts, made customer delivered? that and trackers that developments had

Sean Hunkler

This on is actually on tracker delivered U.S. project.

Jeffrey Osborne

U.S. think to given is pipeline your dollars FX in XX% Got now just markets? it. half those we do or about exposure all international And denominated in XX% how international. Are the deals lastly, going back question, to the Pavel's your

Sean Hunkler

in Yes. They're all USD.

Jeffrey Osborne

right. All had. Thank you. I deal. Great That’s all

Sean Hunkler

Thanks. Okay.

Operator

go comes ahead. Mandloi question of Our Maheep from next Suisse. Please Credit

Maheep Mandloi

modules about about the in commercial just UFLPA specifically getting Hey. XX%, on guidance much mean the QX of Thanks for taking international, so kind you most settled on UFLPA? talked the could of that of getting you dependent side, early for guidance QX? dependent is for talk on that how questions. XX% Maybe XX% I

Sean Hunkler

it to like that about about growth The way said, countries we've it we And bigger eventually and grow. other quarter as international used it countries, project, and of So the I there restrictions internationally. super in excited international projects. and added bigger is, continued would number as the we've really we're recently then start on you to quarter, last this small the think seen leads with aren't a

that the as the that And a in that with And we've a consequence. allow concern for we've that, indicating prepared to in which is is seen something they'll with customers are is low so many in. a our global so U.S. also pull situation it's with But a opportunities of deep that we've us heard that obviously, really been said of customers forward, get seen period is related move things to resolved modules. to customers and their remarks are and And market our U.S. progress module -- to at module we hear wanting to then assumption the talked the We market will in customers. we've dig multiple real one look of during that strong UFLPA. includes the opportunity people the things to from the the things as market being resolved, situation today, the year 'XX that such this

the it can module as an said today, seeing sooner we will QX. So for they that be better think we're inflection point issue resolved, for as the the us. get And I

Maheep Mandloi

Yeah. the more it's QX rollout? just weighted that based projects be equally going U.S. specifically upon international current between comment One and other our guidance, on to

Phelps Morris

Yes.

to XX% It was the was on on full So year aggregate. XXXX. the XX%

Maheep Mandloi

Yes.

in almost like U.S. So you're it's international and XX% the QX, then? a saying

Sean Hunkler

Roughly U.S. international QX. in and Yeah. for

Maheep Mandloi

on just visibility previous resolved just And in the improving potential in becomes late QX on QX this late on or comment QX. in as either

in and want and like some is like you Is recognize to people from shipments just you in, site or on January it the demand pull come in delivery when do or So for, February? come in do they revenues? us whenever on you installing can these help trackers see just it waiting understand or just factories and December

Sean Hunkler

completed. get of speaking, generally have to they'll just needing us, the understand modules identified places with that So when the design the contract a someone because to

advance too getting a the situation seeing asking situations aren't for resolved. people we of module many where in tracker are So

area. And the terms that, module we recognition, follow is in rules. So of the situation Yes. then revenue standard we see the again, key

to process. to once revenue materials materials you then be to the is service be breakdown, through would the final and if revenue, manufacturing at on logistics specifically destination. So the recognized the tied look that's underlying really going that generally And that's the delivered

Maheep Mandloi

or Got talk That’s you And expecting how on back should you. the expecting something QX, OpEx Could side, of 'XX, obviously, we run think guidance term? and think OpEx drivers is and about implies from $X decline million that sharp And it's go to Thanks. of back just to the it you're expect almost a helpful. kind come steady the the QX. really OpEx we in I that? rate as the the sales about historical near you're to in in do

Sean Hunkler

Yes.

all OpEx, So the the been the given really near-term mindful challenges regulatory issues. within on we've marketplace, given the obviously,

organization So the at the cut overall spend. spend, a taken we've really look across out discretionary for

and towards not of curtailed of across at look OpEx industry As on we in the growth the point projects. XXXX, the taken OpEx to that you delivery significantly. near we would view with but again, But would some the to support online guidance term, this we've scale providing start expect we're really obviously, organization the just the projected that

Maheep Mandloi

taking Got Thanks. you. Appreciate questions. the

Sean Hunkler

Thank you.

Operator

of Instructions] Next ROTH question comes from Shen [Operator Partners. Capital Phil ahead. Please go

Philip Shen

one First a Act. follow-up is Inflation Reduction on the

incentive the So torque incentive per tubes. tube manufacture of torque My is in supplier. $X.XX the guys don't kilogram for your own for is you sense there

you So with I was how might Thanks. work? how wondering your and incentive might share those supplier that economics

Sean Hunkler

of back excited build the and super Reduction of the studying Inflation we're better back We've to time Phil, fully it. Act the passing. So it about been before prospect it

in you supply know, multiple as chain. partners so, we And have our

And absolutely been that future we'll plan this further we've studying and the industry take it. of. positive have in it's a advantage comments in but We've been to on something definitely for discussions. And we so the

Philip Shen

Sean. you, Thank

could I scrap be have might the over do like think And at U.S. to produced to look might in coal what U.S. relates blast that of, us? for the clearer become there? follow-up the requirements U.S. furnace. how mined example, the it terms time coking would Steel? in -- it in and be or you melted Thanks. so, How For you It U.S. steel if U.S. furnace the does here think in need a you to ore is and steel do be defined? iron it it seems As be

Sean Hunkler

the It So very at of to through latter. terms that in closely. interpreted definition appears be it very we're in we're terms to looking something and very working we'll for see closely the tend latter it U.S. Steel. closely again, it as that's But how we is but follow of

Philip Shen

through Sean. as it And of can between December? the through the you relates then deliveries talk Okay. to QX Thanks, guide, October skew

Sean Hunkler

broke I'm it Say sorry, again, Phil. up. that

Philip Shen

you by October... it's do evenly talk revenue more the back it is for the weighted for between or you recognition through weighted you in you month can as So the think Sorry, that QX quarter and get about example, quarter? expect

Sean Hunkler

about for by QX guidance point. I give don't month. performance, we definitely said Phil, an confident and I Typically, think as opportunity is But the our feel very before, I inflection

is solid module is that expectation situation assumption our a So about the the under very excited QX, QX. again, I'm very, resolved but prospect the of

Philip Shen

it I’ll Great. pass Thanks, Sean. on.

Sean Hunkler

Thanks, Phil.

Operator

ahead. next [Operator of from Dumoulin-Smith, Please Bank question Julien comes Instructions] Our go America.

Julien Dumoulin-Smith

guys time opportunity. Thanks the Could hear morning, Good you for team. me? Hey. and the

Sean Hunkler

Yeah.

Julien Dumoulin-Smith

Thank guys. Excellent. you,

know implied your implied we a up call you you talk the of a little much little 'XX? Can Just in bit. you you've on like following your here from today see in XQ uplift about this What about the cost bit here 'XX? relative this what structure XQ. if we've how otherwise think especially then about little follow-up. margin a for If gross can heading by got bit, I on you here, locked seen just to in about where pricing structural into of do gross what backlog talk as a talk margin inflection you And started a you Obviously, here?

Sean Hunkler

very we're spend, terms continued R&D, optimistic OpEx in our focus invest we've Despite on margin. and in gross team. the to So of

things phenomenal of has some team done at R&D in Our content. steel terms looking the pretty

You know about our DTV initiative.

our with strengthened our asset-light our model. further we addition, In in partnerships suppliers

time about gross feel talked we And in helped we as the good happen in the also frame. the costs. the so and that And that's we inflection IPO feel things those And about 'XX feel about really that during point. us have long-term of seeing why margins terms good reducing that we well

Julien Dumoulin-Smith

about, half ultimately, to the trend how And that might as versus relative alluded here, back again, into the the here that you you the can about talk today to, options here. related the just back And the that number to deposit want that come maturity? million I enough. talk dynamic what one? for the Q under minimum do to the think described to then have credit especially just how it? you considering Fair What and the is you that, definition, liquidity facility, about And just to extending then $XX you think have of the you you here Can brief about, Okay. relative X/XX/'XX conversation latitude the year?

Phelps Morris

works. Phelps, me Hey, Julien. let reconfirm It's the just covenant how

way the credit plus liquidity cash is unutilized facility. covenant today, So calculated, the

couple So the $XXX million above prior balance, the million $XXX which LCs, to have of million reducing credit revolver unused million, amendment, was effectively, million. covenant amendment of the $XX utilized $XXX entire liquidity minus greater. meant to $XX you needs the dollars million, to or you facility plus cash plus needed that of revolver of a cash By be your

versus was we effectively, end So $XXX your million. liquidity about quarter total million covenant the of $XX calculated liquidity new at that

a of of of You you capacity end. quarter million revolver total cash million had gives at $XX $XXX million liquidity $XX plus

you even that of the not to some So that cash that burn solve covenant. Does run going gives in liquidity that sense? a make of light lot you're runway significant to

Julien Dumoulin-Smith

how contribute come I here half ultimately, how No, to to the profile into know could which that the 'XX orders for you alluded this instance? I to and think that you your wanted into about you the how in, deposit pivot XXX%. at refinance back you to much about liquidity options here, asset dynamic to Absolutely. and this actually trending here? extent establish see then that and here think through

Phelps Morris

Yes.

obviously it's So outside.

EBITDA, at for efforts the you you they're cash cash upside on have for a down to quarter, job you’ve which as quarter, the the continue cash I cash done upside prior orders balances, is come however, in really ER think put providing usage for a If the sales. go-forward and talked on on for but in We've we'll about, we're secondarily, the willing an a cash the on potential look people capacity basis. at to not collection the overall good guidance that's the deposits, lock focus to look that. And as you the of deposits to then as try if XXXX, for

Sean Hunkler

willing we XX% contracts, maintain our at cash of projects. onset about customer from The through here a positive the life that seen customers cash and are capacity to then the is, is the kind down flow more larger structure of way as constrained payment as which these really get payments, we profile improve as our that awarded, we've Phil alluded down folks potentially uptick And put and and contract well. flow to in down with will

Julien Dumoulin-Smith

leave Fair guys. it. Got I’ll there. it you, Thank enough.

Phelps Morris

Thanks.

Sean Hunkler

Thanks, Julien.

Operator

our now concluded. The you concludes Thank conference presentation. has for question-and-answer session. This attending today's

now disconnect. You may

FTC Solar (FTCI) 13 Aug 222022 Q2 Earnings call transcript