Array Technologies, Inc. (ARRY) Earnings

Management highlights

### M&A and Integration Progress - The APA acquisition, completed one year prior, has met initial expectations: APA has gained access to larger utility-scale solar projects that were unavailable to it as a standalone business, leveraging Array's scale, credibility and supplier relationships to drive revenue growth and margin expansion. - The first integrated Array APA product, the Array Atlas suite of foundation and tracker products, has launched, reducing component counts, improving installation efficiency, expanding addressable market and increasing share of wallet on projects. - Array announced the pending acquisition of AWM, a leading profitable cable management provider for solar, battery storage and data centers, expected to close in Q3 2026. The acquisition fits Array's strategy of adding category-leading, differentiated adjacent products to its balance of systems platform, with AWM's existing leadership remaining in place to run the business using the proven APA integration playbook. ### Product Innovation and Launches - 2026 is Array's largest product launch year ever, with five major new product launches. Products launched since 2023 (Omnitrack, SkyLink, SmartTrack, PaleXP, APA) account for roughly 50% of Array's $2.5 billion record order book, and will contribute nearly half of 2026 revenue (up from one third in 2025). Software revenue has doubled year-to-date. - Recent launches include: Duratrack D2S, a regionally optimized international tracker with strong early customer reception; Omnitrack 2.0, a next-generation terrain-following tracker that reduces site grading and costs by up to 25% of tracker system cost and expands available buildable land; the DoorTrack 6-degree hail-resilient variant, a cost-effective resilience solution for moderate hail regions expected to open for ordering in late 2026 with deliveries starting mid-2027; and the Array Atlas suite, the integrated APA foundation platform that serves the entire $1 billion traditional foundation market, improves installation efficiency and supports interoperability with AWM products. ### Operational and Organizational Investment - The Array Innovation Center (AIC) opened in Chandler, Arizona in 2025, co-locating engineering, product management and testing resources, partnering with Arizona State University for talent pipeline development, and hosting customer and industry events. The AIC has shortened product development cycles and enabled consistent quarterly execution of new product launches. - Cash and liquidity performance was strong in Q2 2026: cash on hand grew over $100 million sequentially to $307 million, operating cash flow was $114 million, capital expenditure totaled $8 million, and total available liquidity reached over $640 million, with trailing 12-month net debt leverage falling to 2.1x, within the company's target range. The AWM acquisition is expected to be fully funded with existing cash on hand.

Guidance

- Full-year 2026 revenue guidance is maintained at $1.4 to $1.5 billion. Near-term permitting and site readiness delays may push recognized revenue below the midpoint of the range, but this represents timing shifts to 2027 rather than lost business. The expected revenue shift from Q3 to Q4 will also push related cash collections into Q1 2027. - Full-year 2026 consolidated adjusted gross margin guidance is raised to 27% to 28%, an increase of 100 basis points from the prior guidance range, driven by stronger than expected first-half execution and cost-out progress, offset partially by the absence of first-half one-time benefits and higher international mix in the second half. - Full-year adjusted EBITDA guidance is revised to $210 to $230 million, and adjusted EPS guidance is revised to 68 to 75 cents, with the lower end of both ranges increased from prior guidance, driven by gross margin expansion and ongoing cost discipline. No contribution from the pending AWM acquisition is included in the 2026 guidance. - 2026 full-year free cash flow conversion is now expected to be 20% to 25% of adjusted EBITDA, roughly half of the initial expectation at the start of the year, due solely to the Q4-heavy revenue cadence shifting collections into 2027.

Segment performance

Only consolidated financial performance is provided in this call transcript. For the second quarter of 2026: total consolidated revenue was $342 million, 53% higher sequentially compared to Q1 2026 and above the prior guidance range of $300 to $320 million. Adjusted gross profit was $105 million, up 53% sequentially, with an adjusted gross margin of 30.8% (300 basis points higher year-over-year, 10 basis points higher sequentially). Adjusted SG&A was $44 million, equal to just under 13% of revenue, a 570 basis point improvement from Q1. Adjusted EBITDA was $63 million, up 119% sequentially, with an adjusted EBITDA margin of 18.5% (a 560 basis point improvement from Q1). GAAP net income to common shareholders was $8 million, a substantial improvement over Q1. Diluted EPS was 5 cents, while adjusted EPS was 24 cents, up from 6 cents adjusted EPS in Q1. The acquired APA segment delivered first-half 2026 revenue 17% above 2025 levels, with year-to-date book-to-bill over 1.5x and average pipeline project size more than doubling post-acquisition, and is on track to hit 2026 targets of double-digit revenue growth and margin expansion. The pending AWM acquisition has ~$60 million in trailing 12-month revenue.

Risks & headwinds

- Near-term project revenue recognition is subject to external risks including permitting delays, interconnection delays, weather events, and customer site readiness issues that can shift delivery and revenue recognition timelines, even if no business is ultimately lost. - Second-half 2026 gross margins face pressure from higher expected international revenue mix, increased macro-driven commodity (metals) and logistics input costs, and the absence of one-time tariff recovery and 45x tax credit catch-up benefits that boosted first-half margins. - The pending AWM acquisition remains subject to regulatory approval and satisfaction of customary closing conditions, with no guarantee of closing on the expected timeline. - The impact of proposed Section 232 trade restrictions remains uncertain pending publication of final rule language, with unclear effects on Array and the broader solar industry.

Analyst Q&A

• Q: Why can't second-half 2026 gross margins maintain the first-half 30%+ run rate, despite higher expected volumes? /

  A: First-half margins included ~200 basis points of one-time benefits that will not repeat in the second half, leaving a normalized H1 margin of ~28.8%. Second-half margins will also see a step-up in international revenue mix (from 5% in H1 to a much higher share), and face increased macro metals and logistics input costs. Productivity improvements are expected to partially offset these headwinds.

• Q: What is the current status of bookings cadence, and what is the growth outlook for future quarterly bookings? /

  A: The quarter saw just over $500 million in gross bookings with no significant cancellations, bringing the total order book to $2.5 billion, 37% higher year-over-year. Array has recorded over $1.8 billion in net new bookings over the past four quarters, with 95% of the order book domestic, half driven by end-customer specifications from developers, IPPs and utilities, and a domestic book-to-bill well over 1.4x, indicating strong sustained commercial momentum.

• Q: What is AWM's market position and what are the near-term integration priorities for the acquisition? /

  A: AWM is a five-year-old domestic market leader in cable management, in an oligopolistic market with one other major competitor. It has grown quickly via strong engineering innovation in a historically stagnant market. Near-term priorities are front-end cross-selling commercial synergies with Array's existing large customer base, and back-end supply chain, logistics and warehousing synergies. International expansion is a long-term growth opportunity but will not be prioritized for the first 6-9 months post-close.

• Q: What is the expectation for cross-selling synergies between Array, APA and future AWM, and how fast will these synergies materialize? /

  A: Joint Array-APA orders are just beginning to close, with a strong pipeline of opportunities, and the company is focused on making it easy for customers to source both products rather than forcing bundled discounts. Cross-selling synergies with AWM are expected to begin near-immediately, as many of AWM's target customers are already Array's largest customers. All new integrated products are designed for interoperability to maximize cross-selling value.

• Q: Why does Array maintain the full-year revenue guidance range despite expecting potential below-midpoint results, and what is the free cash flow outlook? /

  A: The full $1.4 to $1.5 billion revenue range is supported by existing customer delivery schedules and order book visibility. All internal preparations (inventory, logistics, crew readiness) have been completed to hit the top end of the range if external conditions hold, so the full range is maintained. Free cash flow conversion is now expected to be 20-25% of 2026 EBITDA (half of the initial guidance) due to the Q4-heavy revenue cadence shifting collections into 2027.