Array Technologies, Inc. (ARRY) | The Buildout — AI Infrastructure
The Verdict
Array Technologies sells the equipment that holds and moves solar panels at utility-scale solar farms: trackers, fixed-tilt systems, engineered foundations, control software and, most recently, cable management. Its customers are the developers, independent power producers, utilities and EPC firms that build those farms. The AI connection is indirect — data centers need electricity, and that demand pulls through new solar and storage development. Array does not sell to hyperscalers directly and reports no AI-specific revenue. Management points to its APA foundation business as the clearest place data-center demand shows up, where pipeline discussions have moved from megawatts to gigawatts.
| Market Cap | — |
| Revenue (TTM) | $1.2B |
| Revenue Growth | +1.2% |
| EBITDA Margin (TTM) | 8.3% |
| Net Debt | $446M |
| Earnings Beats | 5 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Order book reached $2.5B at June 30, 2026 — a third consecutive record, up 37% year over year, on more than $500M of new Q2 bookings and a 1.5x trailing-12-month book-to-bill.
- Management says roughly 80% of the backlog should convert over the next six quarters, into about Q3 2027 — a metric reaffirmed across two calls.
- APA, acquired around August 2025, grew first-half 2026 revenue 17% ahead of 2025, with year-to-date book-to-bill above 1.5x and average pipeline project size more than doubled since the deal.
- Products launched since 2023 — OmniTrack, SkyLink, SmarTrack, Hail XP and APA — account for roughly 50% of the order book and nearly half of 2026 revenue, versus 1/3 in 2025; software revenue doubled year to date.
- The balance sheet holds $307M of cash and more than $640M of total liquidity, including a fully undrawn $370M revolver, with net debt leverage down to 2.1x trailing EBITDA from 2.7x at the end of Q1.
What We’re Watching
- Full-year revenue may land below the guidance midpoint: management cites near-term project timing tied to interconnection and site readiness, and says the shifted revenue moves to 2027.
- A second-half gross margin step-down is expected: the full-year adjusted gross margin guide of 27%-28% sits below first-half reported 30.8%, because H2 loses one-time tariff recovery and 45X catch-up and carries higher international mix plus higher metals and logistics costs.
- Free cash flow conversion was cut to 20%-25% of EBITDA — management describes that as roughly half of what it expected at the start of the year — as the Q4 revenue peak pushes collections into 2027.
- Section 232 policy is unresolved: management reserved comment until the tariff language was released, and the 10-Q flags the risk of new or additional duties and tariffs on imports and exports, alongside the One Big Beautiful Bill Act's potential to reduce demand.
The commercial thesis looks intact and arguably strengthening — the order book has set records for three straight quarters, trailing book-to-bill is 1.5x, and the APA and AWM additions are building a balance-of-systems platform around the tracker core. The financial picture is more mixed: profitability guidance was raised while free cash flow conversion was cut roughly in half, and management opened an explicit risk that revenue lands below the full-year midpoint. The open question is whether the Q4-weighted revenue cadence converts as planned, and whether the roughly 28.8% normalized first-half gross margin proves to be a floor rather than a peak.
Earnings Beat
Q2 FY2026 revenue was $342.1M, up 53% sequentially and above the $300M-$320M guide, driven by 38% sequential tracker volume growth plus APA momentum. GAAP gross margin was 29.1%; adjusted gross margin was 30.8%, up 300 basis points year over year with less than 50 basis points of one-time items. The standout was the order book: a third consecutive record at June 30, 2026. Adjusted EBITDA was $63M, up 119% sequentially at an 18.5% margin.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $342M | $223M | $362M | −5.5% |
| Gross margin | 29.1% | 28.2% | 26.8% | +230bps |
| EBITDA | $50M | $20M | $56M | −10.5% |
| EPS | $0.16 | $0.01 | $0.28 | −44.8% |
| Order book | $2.5B | $2.4B | n/a | +37% YoY |
| Trailing 12-month book-to-bill | 1.5x | 1.3x | n/a | — |
Q2 was a quarter of exceptional momentum across every key metric on the page.— Kevin Hostetler, CEO, 2026-08-05
Management tone: Between the Q1 and Q2 2026 calls management held its demand language but shifted on timing and cash. In Q1 it reaffirmed full-year guidance across all key metrics; in Q2 it reaffirmed revenue while flagging that interconnection and site readiness may push the year below the midpoint. On the same call it raised the adjusted gross margin guide, detailed the expected second-half margin step-down, and cut free cash flow conversion to 20%-25% of EBITDA. Management declined to comment on Section 232 specifics and on the size of international orders it holds out of the order book, and consistent with the prior call it did not forecast bookings.
Management Guidance
For FY2026, management reaffirmed revenue of $1.4B-$1.5B while saying project timing tied to interconnection and site readiness may push recognized revenue below the midpoint, with the shifted revenue moving to 2027 rather than disappearing. It raised the adjusted gross margin guide to 27%-28% from 26%-27%. Free cash flow conversion was cut to 20%-25% of EBITDA. The AWM acquisition is excluded from the updated guidance.
Trajectory
Revenue has swung sharply quarter to quarter. Q2 FY2025 was $362.2M, Q3 FY2025 $393.5M, then Q4 FY2025 fell to $226.0M — a quarter that included $103M of goodwill and $30M of inventory valuation charges — before Q1 FY2026 came in at $223.4M and Q2 FY2026 rebounded to $342.1M. On a trailing basis the computed signals show revenue decelerating, with gross margin expanding while operating and EBITDA margins compress. The rebound driver was volume: 38% sequential tracker growth, plus APA. STI Operations, the legacy international segment, fell to $6.0M in Q1 FY2026 from $89.1M a year earlier, at a (37.4)% gross margin; management says international was about 5% of first-half revenue and steps back up in the second half at lower margins.
The Model
The model's locked projections put FY+1 revenue at $1,430M with EBITDA of $194M, a 13.6% margin, and FY+2 revenue at $1,675M with EBITDA of $255M, a 15.2% margin. The near term is anchored by the order book — roughly 80% of it is expected to convert over the next six quarters — plus the newly issued Q3 revenue guide and full-year revenue guidance of $1.4B-$1.5B. FY+2 depends on how far the balance-of-systems build-out runs: the APA foundation business growing double digits, the newly closed AWM cable-management business contributing, and newer products such as the Atlas foundation suite holding their price uplift.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $1.3B | $1.4B | $1.7B |
| YoY Growth | — | +11.4% | +17.1% |
| EBITDA | $121M | $194M | $255M |
| EBITDA Margin | 9.4% | 13.6% | 15.2% |
Projections are the median of 5 independent model runs. The model’s revenue sits 6.0% above analyst consensus.
For FY2026, management reaffirmed revenue of $1.4B-$1.5B while saying project timing tied to interconnection and site readiness may push recognized revenue below the midpoint, with the shifted revenue moving to 2027 rather than disappearing. It raised the adjusted gross margin guide to 27%-28% from 26%-27%. Free cash flow conversion was cut to 20%-25% of EBITDA. The AWM acquisition is excluded from the updated guidance.
What Could Go Right — and Wrong
- Full-year revenue lands at or above the midpoint, confirming the backlog conversion narrative.
- Second-half adjusted gross margin holds near the raised 27%-28% guide despite the loss of one-time benefits, more international mix and higher metals and logistics costs.
- Held-out international orders enter the order book in the second half of 2026 as management expects, adding backlog without any change in underlying demand.
- APA keeps growing at double digits with margin expansion, AWM delivers high single-digit adjusted earnings accretion before synergies, and management pursues electrical balance-of-system wire next.
- Atlas generates measurable orders, opening the more than $1 billion traditional foundation market and adding $0.03-$0.04 per watt of average selling price on top of a tracker sale.
- The Q4 revenue peak misses: full-year revenue lands below the midpoint and the shifted projects move entirely into 2027.
- Second-half adjusted gross margin falls below the 27%-28% guide as international mix, metals and logistics costs overwhelm productivity gains.
- Free cash flow conversion disappoints again, with working capital consuming cash and collections sliding further into 2027.
- Section 232 lands unfavorably — higher steel costs or a supply chain disruption — or keeps customers on the sidelines longer.
- Competition bites: the tracker and fixed-tilt markets are concentrated — the 10-K names Nextpower, PV Hardware and GameChange Solar in trackers, and UNIRAC and Terrasmart in fixed-tilt and engineered foundations.
Looking Ahead
Over the next twelve months the tests are revenue conversion and margin quality. The order book covers roughly six quarters of conversion at the current pace, but the Q4 load is heavy and management has already flagged that interconnection and site readiness may push the year below its midpoint. The raised 27%-28% gross margin guide has to survive a second half with no one-time benefits, more international mix and higher metals and logistics costs. AWM integration — with international expansion deferred six to nine months after the August 2026 close — and the first Atlas orders are the new-platform milestones to watch.
- Week of 2026-08-05Section 232 language — Management reserved comment until the tariff text was released.
- Q3 2026Q3 revenue result — Tests the below-midpoint revenue concern.
- Q3 2026Preferred shifts to cash pay — About $12M through 2026; refinancing alternatives under review.
- H2 2026International orders enter book — Held-out wins expected to begin appearing in the order book.
- Later 2026DuraTrack 60-degree quoting — The extreme-weather tracker variant becomes available to quote.
- Mid-2027DuraTrack 60-degree deliveries — First deliveries of the high-angle weather-resilience variant.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $916M | $1.3B | $1.2B | +40.2% |
| Gross Margin | 33.0% | 21.9% | 24.3% | 1,105bps |
| EBITDA | −$178M | $121M | $98M | +167.8% |
| EBITDA Margin | -19.5% | 9.4% | 8.3% | +2,891bps |
| Net Income | −$240M | −$52M | −$86M | +78.3% |
| Free Cash Flow | $135M | $80M | $135M | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)24.3%
- EBITDA Margin (TTM)8.3%
- Net Margin (TTM)-7.2%
- ROIC12.8%
- FCF Conversion137.1%
- SBC / Revenue1.5%
The Company
Array Technologies sells the steel-and-software systems that hold and move solar panels at utility-scale solar farms. Its portfolio includes the DuraTrack HZ v3 tracker, the OmniTrack terrain-following tracker, the SkyLink grid-independent control system, SmarTrack energy-optimization software and — through the APA acquisition — engineered foundation products such as APA Titan and the A-Frame Interface. The 10-K describes the company as a supplier of solar tracking technology and fixed-tilt systems to utility-scale and distributed generation customers who construct, develop and operate solar PV sites. Customers are the developers, independent power producers, utilities and EPC firms that build those sites; Array does not own power plants, sell electricity, or disclose any power-purchase agreements.
Manufacturing and engineering run across the United States, Spain and Brazil. The 10-K lists an approximately 283,000 square foot operating plant in Albuquerque, a Bernalillo County triple-net lease signed in May 2024 covering about 176,000 square feet of manufacturing plus 40,000 square feet of office and laboratory space, roughly 67,000 square feet in Spain and about 610,000 square feet in Brazil. A new Albuquerque facility reported at more than $50 million opened with a ribbon cutting on 2026-09-09. The company also runs an Array Innovation Center in Chandler, Arizona, opened in 2025, and an APA campus with a 30,000 square foot headquarters and a 5-acre solar validation site. The intel file flags that the Albuquerque-area sites are not fully reconciled within the source material.
Business Segments
Competitive Landscape
The tracker market has a concentrated set of large competitors, and ARRY's 10-K names them directly: Nextpower Inc. (formerly Nextracker), PV Hardware and GameChange Solar in trackers, and UNIRAC and Terrasmart (formerly RBI Solar, a Gibraltar Industries subsidiary) in fixed-tilt and engineered foundations. The wiring layer also lists FTC Solar, Canadian Solar, Arctech, TrinaSolar and Shoals as competitors in peer filings, with Shoals appearing as both a supplier and a competitor. Array's stated differentiation rests on product breadth, domestic content and 45X qualification, and third-party-validated installation and energy-yield claims.
- Nextpower Inc. (f/k/a Nextracker, Inc.)Named in the 10-K as a tracker competitor; not otherwise discussed in the filings.
- PV HardwareNamed in the 10-K as a tracker competitor; not otherwise discussed in the filings.
- GameChange SolarNamed in the 10-K as a tracker competitor; not otherwise discussed in the filings.
- UNIRAC, Inc.Named in the 10-K as a fixed-tilt and engineered-foundations competitor; not otherwise discussed in the filings.
- Terrasmart (f/k/a RBI Solar Inc.), a subsidiary of Gibraltar Industries, Inc.Named in the 10-K as a fixed-tilt and engineered-foundations competitor; not otherwise discussed in the filings.
Supply Chain
Array sits between steel, motor and electronics suppliers and the developers, utilities and EPCs that build utility-scale solar. The 10-K says its products are made from steel and that the business is significantly affected by the price of steel. No neighbor transcript names ARRY directly, though Primoris's product label lists DuraTrack HZ v3 solar trackers.
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