Austin, Texas-based FTC Solar, a global provider of solar tracker systems, posted its fourth-quarter 2021 earnings results, and showed year over year growth of 130%. Fourth quarter revenues of $101.7 million represented a 92% increase over the previous year’s results. The company issued strong guidance for the year, estimating 62% revenue growth for 2022, which the company said would outpace the market.
Fourth quarter results came in above the high-end of FTC’s guidance range, and operational expenses met expectations, said president and CEO Sean Hunkler on the earnings call. The completed its initial public offering in 2021 and is listed on the New York Stock Exchange as “FTCI”.
“With the recording of a reserve for a potential customer credit impacting revenue and margin by $3 million, Adjusted EBITDA was at the low end of our guidance range. Absent that charge, the sequential gross margin improvement would have been even greater and Adjusted EBITDA above the midpoint of the range,” said Hunkler.
In the fourth quarter, the company inked deals in new international countries, tripled its international pipeline, and launched higher margin products. It also reported increasing steel efficiency by 20%.
“FTC Solar offers a solution that is differentiated in the marketplace and is increasingly recognized by customers as a preferred choice. And we believe we’re on the cusp of profitability with significant growth and margin improvement ahead,” said Hunkler.
In the fourth quarter, GAAP gross loss was $8.6 million, or 8.4% of revenue compared to $8.0 million, or 15.2% of revenue in the prior quarter. Non-GAAP gross loss was $7.4 million, or 7.3% of revenue. GAAP operating expenses were $15.0 million. On a non-GAAP basis, excluding stock-based compensation and certain other expenses, operating expenses were $9.0 million, which compares to $6.2 million in the year-ago quarter. FTC attributed the increase to staffing growth expenses and other in-company costs.
The company said it has a contract and award pipeline of $606 million with expected delivery dates in 2022 and beyond.
Acquisition
FTC announced the acquisition of emergent competitor HX Tracker. The China-based supplier of 1P trackers was established in 2019. It said HX Tracker’s low-steel architecture is well suited for large-format modules.
The acquisition is expected to bring growth in China, the Middle East, and Africa said FTC Solar. The company was purchased for $4.3 million in cash and about 1.4 million shares. HX Tracker will also be eligible for an earn-out of approximately 1.6 million shares based on meeting certain performance metrics. Overall, FTC said it estimates the transaction can generate $4 million of EBITDA accretion in 2023, and $7 million in 2024.
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