ARRY 10-K & 10-Q changes, risk factors and insider trading
Array Technologies, Inc. · Nasdaq · Semiconductors & Related Devices · CIK 1820721 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Risks Related to the APA Acquisition”
New heading “We may be unable to successfully integrate APA’s business into our business or achieve the anticipated benefits or synergies of the APA Acquisition.”
New heading “We will incur significant transaction costs in connection with the integration of APA’s business into our business.”
New heading “We and APA will be subject to business uncertainties following the APA Acquisition, which could adversely affect our business.”
New heading “We may not be able to implement effective internal controls over financial reporting for the APA business in a timely manner or once implemented, such controls may not operate effectively.”
New heading “The use of artificial intelligence presents risks and challenges that could adversely impact our business, financial condition, and results of operations.”
New heading “We are subject to a variety of litigation and other legal and regulatory proceedings in the course of our business that may adversely affect our business and financial results.”
Removed heading “Internal control deficiencies have been identified that constituted material weaknesses in our internal control over financial reporting.”
Largest changes
“A cybersecurity incident relating to our information or systems or that of our third-party business partners, or any failure by us or our third-party business partners to effectively address, enforce and maintain our information technology infrastructure and cybersecurity requirements may result in substantial harm to our business, financial condition, results of operations and prospects, including major disruptions to business operations, loss of intellectual property, release of confidential information, alteration or corruption of data or systems, costs related to remediation or the …”see in full comparison
“Internal control deficiencies have been identified that constituted material weaknesses in our internal control over financial reporting.”see in full comparison
“In addition, as the regulatory environment relating to retailers and other companies’ obligation to protect such sensitive data becomes increasingly rigorous, with new and constantly changing requirements applicable to our business, compliance with those requirements could result in additional costs, and a material failure on our part to comply could potentially subject us to fines or other regulatory sanctions and lawsuits. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects.”see in full comparison
“Ensuring that we have adequate internal financial and accounting controls and procedures in place so that we can produce accurate financial statements on a timely basis is a costly and time-consuming effort that will need to be evaluated frequently. Section 404 of the Sarbanes-Oxley Act requires public companies to conduct an annual review and evaluation of their internal controls and requires attestations of the effectiveness of internal controls by independent auditors. We have identified several material weaknesses in the past, all of which had been remediated as of December 31, 2024. …”see in full comparison
“Our management is responsible for establishing and maintaining adequate internal controls over financial reporting, as defined in Rule 13a-15(f) under the Exchange Act. Prior to our acquisition thereof, APA, as a privately-held company, had not been required to implement or maintain disclosure controls and procedures or internal controls over financial reporting that a public company is required to have, implement and maintain. …”see in full comparison
“Ensuring that we have adequate internal financial and accounting controls and procedures in place so that we can produce accurate financial statements on a timely basis is a costly and time-consuming effort that will need to be evaluated frequently. Section 404 of the Sarbanes-Oxley Act of 2002, as amended, requires public companies to conduct an annual review and evaluation of their internal controls and requires attestations of the effectiveness of internal controls by independent auditors. …”see in full comparison
Full comparison: every changed paragraph (114)
Risks Related to the APA Acquisition
We may be unable to successfully integrate APA’s business into our business or achieve the anticipated benefits or synergies of the APA Acquisition.
Our ability to achieve the anticipated benefits or synergies of the APA Acquisition will depend in part upon whether we can integrate APA’s business into our existing business in an efficient and effective manner. We may not be able to accomplish this integration process successfully. The successful integration of APA’s business requires an assessment and implementation of several factors, including:
•the ability to successfully combine our respective businesses in a manner that permits us to achieve the cost savings, synergies and other anticipated benefits from the APA Acquisition;
•integrating complex systems, operating procedures, compliance programs, technology, networks and other assets while carrying on our ongoing business in a manner that reduces any adverse impact on customers, suppliers, employees and other constituencies; and
•managing the expanded operations of a larger and more complex company.
In addition, any potential unknown liabilities, liabilities that are significantly larger than we currently anticipate, and unforeseen increased expenses or delays associated with the APA Acquisition, including cash costs of integration, may exceed what we currently anticipate. Any one of these factors could result in increased costs, decreased benefits and diversion of management’s attention, which could materially impact our business, financial condition and results of operations. In addition, even following successful integration, the anticipated benefits or synergies of the APA Acquisition may not be realized fully, or at all, or may take longer to realize than expected.
We will incur significant transaction costs in connection with the integration of APA’s business into our business.
We have incurred and are expected to continue to incur a number of non-recurring costs associated with the integration of APA’s business into our business, combining the operations of APA with ours and achieving desired synergies. These costs have been, and will continue to be, significant. A substantial majority of non-recurring expenses will consist of transaction costs and may include, among others, fees paid to financial, legal, accounting and other advisors and employee retention, severance, and benefit costs. We will also incur costs related to formulating and implementing integration plans. Although we expect that the elimination of duplicative costs, as well as the realization of synergies and efficiencies related to the integration of APA’s business, should allow us to offset these transaction costs over time, this net benefit may not be achieved in the near term or at all.
We and APA will be subject to business uncertainties following the APA Acquisition, which could adversely affect our business.
In connection with the APA Acquisition, it is possible that certain persons with whom we or APA have a business relationship may delay or defer certain business decisions or might decide to seek to terminate, change or renegotiate their relationships with us or APA, as the case may be, as a result of the APA Acquisition, which could negatively affect our revenues, earnings and cash flows as well as the market price of our common stock. In addition, our and APA’s ability to attract, retain and motivate employees may be impaired for a period of time following the APA Acquisition, as current and prospective employees may experience uncertainty about their roles within the Company following the APA Acquisition.
We may not be able to implement effective internal controls over financial reporting for the APA business in a timely manner or once implemented, such controls may not operate effectively.
Our management is responsible for establishing and maintaining adequate internal controls over financial reporting, as defined in Rule 13a-15(f) under the Exchange Act. Prior to our acquisition thereof, APA, as a privately-held company, had not been required to implement or maintain disclosure controls and procedures or internal controls over financial reporting that a public company is required to have, implement and maintain. Under SEC rules, we have one year from the date of the APA Acquisition to implement such disclosure controls and procedures and internal controls over financial reporting at APA. Although we are developing a plan designed to implement effective disclosure controls and procedures and internal controls over financial reporting at APA, we cannot assure you that such plans will be fully implemented in a timely manner or that we will be able to successfully implement and maintain the effectiveness of such plans by the time management assesses the effectiveness of our internal controls, including APA, for fiscal year 2026. In addition, during the continuation of our integration efforts, we may identify deficiencies in APA’s controls. Any failure to timely implement effective internal controls could result in, among other things, a decline in the market price of our stock, restatement of our consolidated financial statements, or reputational harm.
The viability and demand for solar energy and the demand for our products are impacted by many factors outside of our control, including but not limited to, the retailcost priceand availability of electricity,necessary availabilityraw materials like steel and of in-demand components like high voltagehigh-voltage breakers, various policies related to the permitting and interconnection costs of solar plants, and the availability of incentives for solar energy and products, which makes it difficult to predict our future prospects.
The viability and demand for solar energy, and in turn, our products, may be affected by many factors outside of our control. While we have been in existence since 1989, we have grown and expanded significantly.significantly since then. Our significant growth and expansion, combined with the rapidly evolving and competitive nature of our industry, makes it difficult to predict our future prospects. We have limited insight into emerging trends that may adversely affect our business, financial condition, results of operations and prospects. We have encountered and will continue to encounter risks and difficulties frequently experienced by growing companies in rapidly changing industries, including unpredictable and volatile revenues and increased expenses as we continue to grow our business. Some of the factors outside of our control which may impact the viability and demand for solar energy include:
•the cost and availability of raw materials necessary to produce solar energy, including steel and polysilicon, and in-demand components like high voltagehigh-voltage breakers; and
•regional, national or global macroeconomic trends, which could affect the demand for new energy resources and customers’ ability to finance new projects.projects; and
•shifts in electricity demand, including those associated with the rapid expansion of data centers and other energy-intensive facilities, which may affect the timing, scale or economics of solar development or the competitiveness of solar energy relative to other generation technologies.
If we are not able to mitigate these risks and overcome these difficulties successfully, our business and prospects willmay be materially and adversely affected.
Competitive pressures within our industry may harm our business, resultresults of operations, financial condition and prospects.
Some of our competitors are developing or are currently manufacturing products based on different solar power technologies that may ultimately have costs similar to or lower than our projected costs. Any failure by us to adopt new or enhanced technologies or processes, or to react to changes in existing technologies, could result in product obsolescence, the loss of competitiveness of our products, decreased revenue and a loss of market share to competitors. In addition, some of our competitors have longer operating histories, lower costs of goods sold, lower operating costs, greater name and brand recognition in specific markets in which we compete or intend to sell our products, greater market shares, access to larger customer bases, greater resources and significantly greater economies of scale than we do. Additionally, new competitors may decide to enter our market as a result of, among other factors, lower barriers to entry and lower R&D costs in comparison with the average costs in R&D in other energy industries. We may also face adverse effects from increased competition in the solar EPC market by EPCs subjecting their subcontractors, such as us, to flow-down contractual clauses which provide that a subcontractor’s obligations to an EPC are identical to the obligations the EPC has to the EPC’s end customer. This may result in higher contractual risk to us, such as “pay if paid” clauses that require EPCs to pay us only when the end customer pays the EPC, higher liquidated damages amounts, increased contractual liabilities above 100% of the contract value and more limited force majeure clauses, among others. As the solar energy market continues to grow, EPCs are also expected to increasingly seek second sources for their suppliers. Any of these factors may materially and adversely affect our business, resultresults of operations, financial condition and prospects.
We face competition from conventional and other renewable energy sources.
We face significant competition from providers of conventional and other renewable energy alternatives such as coal, nuclear, natural gas and wind. We compete with conventional energy sources primarily based on price, predictability of price and energy availability and the ease with which customers can use electricity generated by solar energy projects. If solar energy systems cannot offer a compelling value to customers based on these factors, then our business growth may be impaired.
We are dependent on a relatively small number of customers for our sales. A loss of one or more of our significant customers, their inability to perform under their contracts, or their default in payment,payment could harm our business and negatively impact revenue, results of operations, and cash flow.
A drop in the price of electricity sold may harm our business, financial condition, results of operations andor prospects.
•construction of a significant number of new, lower-cost power generation plants, including plants utilizing natural gas, other renewable energy or other generation technologies;
If the cost of electricity generated by solar energy installations incorporating our systems is high relative to the cost of electricity from other sources, then our business, financial condition andcondition, results of operations or prospects may be harmed.
We have experienced seasonal and quarterly fluctuations in the past as a result of seasonal fluctuations in our customers’ business. Our end-users’ ability to install solar energy systems is affected by weather, as for exampleexample, during the winter months in parts of Europe and in the northeastern U.S. Such installation delays can impact the timing of orders for our products. Inclement weather may also affect our logistics and operations by causing delays in the shipping and delivery of our materials, components and products which may, in turn, cause delays in our customers’ solar projects.
Existing electric utility industry policies and regulations, and any subsequent changes or new related policies and regulations,regulations may present technical, regulatory and economic barriers to the purchase and use of solar energy systems that may significantly reduce or delay demand for our products or harm our ability to compete.
Federal, state, local and foreign government regulations and policies concerning the broader electric utility industry, as well as internal policies and regulations promulgated by electric utilities and organized electric markets with respect to fees, practices, and rate design,design heavily influence the market for electricity generation products and services. These regulations and policies often affect electricity pricing and the interconnection of generation facilities, and can be subject to frequent modifications by governments, regulatory bodies, utilities and market operators. For example, changes in fee structures, electricity pricing structures, regional market rules and system permitting, interconnection and operating requirements can deter purchases of renewable energy products, including solar energy systems, by reducing anticipated revenues or increasing costs or regulatory burdens for would-be system purchasers. The resulting reductions in demand for solar energy systems could harm our business, prospects, financial condition and results of operations.
A significant development in renewable-energy pricing policies in the U.S. occurred when the Federal Energy Regulatory Commission (“FERC”) issued a final rule amending regulations that implement a section of the Public Utility Regulatory Policies Act of 1978 (“PURPA”) on July 16, 2020, which FERC upheld on rehearing on November 19, 2020. The United States Court of Appeals for the Ninth Circuit denied petitions for review of the regulations on November 5, 2023. Among other requirements, PURPA mandates that electric utilities buy the output of certain renewable generators, including qualifying solar energy facilities, below established capacity thresholds. PURPA also requires that such sales occur at a utility’s “avoided cost” rate. FERC’s reforms to its PURPA regulations include modifications: (1i) to how regulators and electric utilities may establish avoided cost rates for new contracts,contracts; (2ii) that reduce from 20 MW to 5 MW the capacity threshold above which a renewable-energy qualifying facility is rebuttably presumed to have non-discriminatory market access, thereby removing the requirement for certain utilities to purchase its output,output; (3iii) that require regulators to establish criteria for determining when an electric utility incurs a legally enforceable obligation to purchase from a PURPA qualifying facility,facility; and (4iv) that reduce barriers for third parties to challenge a renewable facility’s PURPA eligibility. These regulations took effect on February 16, 2021, but the net effect of these changes is uncertain, as some changes will not become fully effective until states and other jurisdictions implement the new authorities provided by FERC. In general, however, FERC’s PURPA reforms have the potential to reduce prices for the output from certain new renewable generation projects while also narrowing the scope of PURPA eligibility for new projects. These effects could reduce opportunities and demand for PURPA-eligible solar energy systems and could harm our business, prospects, financial condition and results of operations.
In addition, there is an ongoing dispute regarding how to calculate the 80MW maximum “power production capacity” for small power qualifying facilities under PURPA.PURPA was recently resolved. In 2021, FERC certified such a facility based on its net output, rather than total nameplate capability of a facility for purposes of PURPA eligibility. In February 2023, the U.S. Court of Appeals for the D.C. Circuit upheld FERC’s approach to calculating capacity for PURPA eligibility, relying on Chevron deference, whereby courts may defer to an administrative agency’s reasonable statutory interpretation. In June 2024, the U.S. Supreme Court overturned the Chevron deference doctrine and found that courts should instead rely on their own independent statutory interpretations. The Supreme Court later directed the D.C. Circuit to reconsider its ruling on FERC’s approach to calculating capacity for PURPA eligibility. IfIn September 2025, the D.C. Circuit requiresre-affirmed FERC’s approach to certifying a differentfacility methodologybased on its net output for purposes of PURPA eligibility. This decision provides regulatory certainty to be used for determining qualifying facility eligibility under PURPA or whether qualifying facilities are eligible for certain exemptions under the Federal Power Act, facilities that are currently eligible for qualifying facility status or such exemptions could lose their status or exemptions. This change could also reduce demand for PURPA-eligible products and could harm our business, prospects, financial condition, and resultsdevelopers of operations.solar projects.
FERC is also taking steps to encourage the integration of new forms of generation into the electric grid and remove barriers to grid access, which could have positive impacts on the solar energy industry. For example, on July 28, 2023, FERC issued a final rule, designated as Order No. 2023,2023 and modified in part in March 2024, to reform procedures and agreements that electric transmission providers use to interconnect new generating facilities to the existing transmission system. And inIn June 2024, FERC issued a final rule, designated as Order No. 1920, which it modified slightlyin part in November 2024,2024 and again in April 2025, to reform the procedures electric transmission providers must use for long-term planning of expansions to the transmission system and the allocation of the resulting costs to transmission customers, including electric generating facilities. Transmission providers’ implementation of Order Nos. 2023 and 1920 is still in process. If these final rules do not have their intended effect or if they are overturned on an appeal, this could negatively impact our business, prospects, and results of operations.
Changes in other current laws or regulations applicable to us or the imposition of new laws, regulations or policies in the U.S., Europe or other jurisdictions in which we do business could have a material adverse effect on our business, financial condition and results of operations. Any changes to government, utility or electric market regulations or policies that favor electric utilities, non-solar generation, or other market participants, or that make construction or operation of new solar generation facilities more expensive or difficult, could reduce the competitiveness of solar energy systems and cause a significant reduction in demand for our products and services and adversely impact our growth. In addition, changes in our products or changes in export and import laws, including new or additional tariffs, and implementing regulations may create delays in the introduction of new products in international markets, prevent our customers from deploying our products internationally or, in some cases, prevent the export or import of our products to certain countries altogether. Any such event could have a material adverse effect on our business, financial condition and results of operations.
OurIn recent years, our ability to deliver our products in a cost-efficient manner havehas in recent yearsbeen, and could continue to bebe, adversely impacted by other factors not within our control, including, but not limited to, shortages in available cargo capacity, changes by carriers and transportation companies in policies and practices such as scheduling, pricing, payment terms and frequency of service, increases in the cost of fuel, sanctions and labor availability and cost.
Escalating trade tensions, particularlyincluding between the U.S. and China, have led to increased tariffs and trade restrictions, including tariffs applicable to certain materials and components for our products or for products used in solar energy projects more broadly, such as module supply and availability. More specifically, in March 2018, the U.S. imposed a 25% tariff on steel imports and a 10% tariff on aluminum imports pursuant to Section 232 of the Trade Expansion Act of 1962 and extended these tariffs to cover imports of derivative steel and aluminum articles on February 2020 under the same legal authority. These tariffs were increased on February 10, 2025, pursuant to two proclamations from President Trump (the “February 2025 Proclamations”), resulting in across-the-board 25% duties on steel and aluminum imports. Additionally, all previous alternative arrangements, such as complete exemptions, hard quotas, or tariff rate quotas (TRQs),quotas, with trading partners on imports of steel and aluminum products, willhave bebeen eliminated as of March 12, 2025.eliminated. The February 2025 proclamationsProclamations also eliminateeliminated the system for exclusions, under which thousands of products were allowed to enter the U.S. free of these additional duties and createcreated a process by which additional “derivative” products cancould be added to the scope of the tariffs by request of the domestic producer. To the extent we continue to use overseas suppliers of steel and aluminum, these tariffs could result in interruptions in the supply chain and impact costs and our gross margins. In addition, the threat of potential tariffs can create uncertainty among our customers and slow down the rate of existing projects and projects in our orderbook.
Additionally, in January 2018, the U.S. adopted a tariff on imported solar modules and cells pursuant to Section 201 of the Trade Act of 1974. The tariff was initially set at 30%, with a gradual reduction over four years to 15%. While this tariff does not apply directly to the components we import, it may indirectly affect us by impacting the financial viability of solar energy projects, which could in turn reduce demand for our products. On February 4, 2022, former President Biden extended the safeguard tariff for an additional four years, starting at a rate of 14.75% and reducing that rate each year to 14% in 2026, and directed the U.S. Trade Representative to conclude agreements with Canada and Mexico on trade in solar products. On July 7, 2022, the U.S. and Canada entered into a non-binding memorandum of understanding in which the U.S. agreed to suspend application of the safeguard tariff to Canadian crystalline silicon photovoltaic cells imported as of February 1, 2022. While this tariff does not apply directly to the components we import, it may indirectly affect us by impacting the financial viability of solar energy projects, which could in turn reduce demand for our products.
Furthermore, starting in July 2018, the U.S. adopted four lists of tariffs (Lists 1,2,3, and 4A) on $550 billion worth of Chinese imports, including, inverters and power optimizers. Products on Lists 1, 2, and 3 are subject to 25% tariffs, while products on List 4A are subject to 7.5% tariffs. On December 16, 2024, the U.S. Trade Representative (“USTR”) announced that it would increase Section 301 tariffs on polysilicon and wafers to 50% in 2025. At the same time, the USTR implemented 14 tariff exclusions for listed solar cell and wafer manufacturing equipment. While these tariffs are not directly applicable to our products, they could impact the solar energy projects in which our products are used, which could lead to decreased demand for our products.
On August 18, 2023, the U.S. Department of Commerce (“USDOC”) issued final affirmative determinations of circumvention with respect to certain crystalline solar photovoltaic (“CSPV”) cells and modules produced in Cambodia, Malaysia, Thailand and Vietnam using parts and components from China. As a result, certain CSPV cells and modules from Cambodia, Malaysia, Thailand and Vietnam are now subject to antidumping and countervailing duty (“AD/CVD”) orders on CSPV cells and modules from China that have been in place since 2012. Subject to certain certification and utilization conditions, imports of CSPV cells and modules covered by the circumvention determinations that entered the U.S. during the two-year period prior to June 6, 2024 – which had been authorized by the former President Biden on June 2022 – were not subject to AD/CVD cash deposit or duty requirements. Imports of CSPV cells and modules from the four Southeast Asian countries covered by the circumvention determination that entered the U.S. on or after June 6, 2024 are subject to AD/CVD cash deposit requirements of the China AD/CVD orders and, possibly, final AD/CVD duty liability. Cash deposit rates for CSPV modules covered by the China AD/CVD orders vary significantly depending on the producer and exporter of the modules and may amount to over 250% of the entered value of the imported merchandise.
Additionally, in October 2023, a coalition of U.S. aluminum extruders and a labor union filed AD/CVD cases on aluminum extrusions from fifteen countries. The USDOC has initiated investigations based on the petitions. Certain components in our trackers, including certain clamps, U-joints, and bearing housings are made using extruded aluminum. In September 2024, the USDOC released its final determination from their investigations against aluminum extrusions from multiple countries. On October 30, 2024, the USITC voted to find no injury in its pending AD/CVD investigation, meaning that the USDOC’s AD/CVD orders will not go into effect. The coalition of petitioners may still appeal the USITC’s decision, and we will continue to monitor developments in the appeal process. If the USITC’s decision is overturned on appeal, the imposition of AD/CVD orders could negatively impact our business, financial condition, and results of operations.
On April 24, 2024, the American Alliance for Solar Manufacturing Trade Committee, an ad hoc coalition of domestic producers of CSPV cells and modules, filed a petition with the USDOC and the U.S. International Trade Commission (“USITC”) seeking the imposition of AD/CVD tariffs on imports of CSPV cells and modules from Cambodia, Malaysia, Thailand and Vietnam. The USITC made a preliminary affirmative determination on June 7, 2024, and the USDOC made its preliminary affirmative determination on October 1, 2024. The preliminary tariff rates vary from below 1% to almost 300%, depending on the relevant company.
While we do not sell solar modules, the degree of our exposure is dependent on, among other things, the impact of the investigation on the projects that are also intended to use our products, with such impact being largely out of our control. We have seen a number of projects in our order book delayed as a result of the USDOC investigation. The repeal of the 24-month exemption, and any affirmative determinations made once the exemption expires in any event, would have an adverse effect on our business, financial condition, and results of operations.
On February 1, 2025, President Trump issued three executive orders directing the U.S. to impose new tariffs on imports from Canada, Mexico, and China, to take effect on February 4, 2025. On February 3, 2025, President Trump announced his intention to pause these tariffs on Canada and Mexico for thea next30-day month.period. The tariffs impose an additional 25% ad valorem rate of duty on all imports from Canada and Mexico (other than imports of Canadian energy resources exports,resources, which are subject to a 10% ad valorem rate of duty) and an additional 10% ad valorem rate of duty on all imports from China. WeOn March 4, 2025, the previously announced 25% tariff on Canadian and Mexican goods took effect and the tariff on Chinese goods was doubled to 20%. On June 4, 2025 tariffs on steel and aluminum increased from 25% to 50% on all steel and aluminum coming from Canada. Further, on July 31, 2025, President Trump issued an executive order increasing the ad valorem rate on imports from Canada to 35%. President Trump also has threatened a 30% ad valorem rate on imports from Mexico, though those are currently evaluating the potential impact of the imposition of the announced tariffs to our business and financial condition. While we do not believe that the tariffs announced by the U.S. on February 1, 2025 will have a material adverse effect upon our results of operations, financial condition, or liquidity, the actual impact of the new tariffs is subject to a number of factors including the effective date and duration of such tariffs, changescurrently in the amount, scope and nature of the tariffs in the future, any countermeasures that the target countries may take and any mitigating actions that may become available.effect.
On April 2, 2025, President Trump introduced a baseline tariff rate of 10% on most countries and individualized rates on some countries of up to 50% (the “reciprocal tariffs”). On April 9, 2025, President Trump increased tariffs for Chinese goods to 125% (making the tariff rate for certain products up to 145% due to the “stacking” nature of the relevant tariffs), while also issuing an executive order that the reciprocal tariffs that had been announced on April 2, 2025 for other countries would be reduced to a baseline rate of 10% for a period of 90 days starting on April 10, 2025. On July 7, 2025, President Trump extended the initial 90-day pause on the reciprocal tariffs (except for those relating to China) and maintained the 10% baseline rate until August 1, 2025. On July 31, 2025, President Trump announced via an executive order reciprocal tariffs above the 10% baseline rate for a number of countries; these rates became effective as of August 7, 2025. In November 2025, the Supreme Court heard arguments in a case challenging tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”). In February 2026, the Supreme Court issued a ruling that IEEPA does not authorize the imposition of tariffs. Although the ruling has been issued, its implications for trade policy and related administrative actions remain uncertain. The Company is reviewing the decision and will evaluate its potential impact, including with respect to any potential refunds, as further information becomes available.
President Trump also launched a new Section 301 investigation into Brazil’s alleged unreasonable or discriminatory trade practices; initiated a new Section 232 investigation into imports of polysilicon and its derivatives and a new Section 232 investigation into imports of unmanned aircraft systems and their parts and components, among other Section 232 investigations; and announced a 50% tariff on imports of copper following the conclusion of a Section 232 investigation, effective August 1, 2025.
We are continuing to evaluate the potential impact of the imposition of the announced tariffs, the effect of the Supreme Court decision on tariffs described above, and any additional or retaliatory tariffs, to our business and financial condition. While we do not believe that the tariffs announced by the U.S. in 2025 and through the date of filing this Form 10-K in 2026 will have a material adverse effect upon our results of operations, financial condition, or liquidity, the actual impact of new tariffs is subject to a number of factors including the effective date and duration of such tariffs, changes in the amount, scope and nature of the tariffs in the future, any countermeasures that the target countries may take and any mitigating actions that may become available.
More broadly, President Trump has directed the USDOC,U.S. USTR,Department of Commerce (the “USDOC”), the U.S. Trade Representative (the “USTR”), and other agencies, to review and identify unfair trade practices by other countries and recommend appropriate actions, as well as recommend modifications of antidumping and countervailing duty (“AD/CVD”) laws to further induce compliance by foreign respondents and governments involved in those proceedings. These directives have been issued under the America First Trade Policy and the Reciprocal Trade and Tariffs memoranda,Presidential andMemoranda themay have far-reaching effects on the global trading system can be far-reaching.system.
In January 2018, the U.S. adopted a tariff on imported solar modules and cells pursuant to Section 201 of the Trade Act of 1974. The tariff was initially set at 30%, with a gradual reduction over four years to 15%. While this tariff does not apply directly to the components we import, it may indirectly affect Array by impacting the financial viability of solar energy projects, which could in turn reduce demand for our products. On February 4, 2022, former President Biden extended the safeguard tariff for an additional four years, starting at a rate of 14.75% and reducing that rate each year to 14% in 2026, and directed the USTR to conclude agreements with Canada and Mexico on trade in solar products. On July 7, 2022, the U.S. and Canada entered into a non-binding memorandum of understanding in which the U.S. agreed to suspend application of the safeguard tariff to Canadian crystalline silicon PV cells imported as of February 1, 2022. While this tariff does not apply directly to the components we import, it may indirectly affect us by impacting the financial viability of solar energy projects, which could in turn reduce demand for our products.
Furthermore, starting in July 2018, the U.S. adopted four lists of tariffs (Lists 1,2,3, and 4A) on $550 billion worth of Chinese imports, including, inverters and power optimizers. Products on Lists 1, 2, and 3 are subject to 25% tariffs, while products on List 4A are subject to 7.5% tariffs. On December 16, 2024, the USTR announced that it would increase Section 301 tariffs on polysilicon and wafers to 50% in 2025. At the same time, the USTR implemented 14 tariff exclusions for listed solar cell and wafer manufacturing equipment. While these tariffs are not directly applicable to our products, they could impact the solar energy projects in which our products are used, which could lead to decreased demand for our products.
On August 18, 2023, the USDOC issued final affirmative determinations of circumvention with respect to certain crystalline solar photovoltaic (“CSPV”) cells and modules produced in Cambodia, Malaysia, Thailand and Vietnam using parts and components from China. As a result, certain CSPV cells and modules from Cambodia, Malaysia, Thailand and Vietnam are now subject to AD/CVD orders on CSPV cells and modules from China that have been in place since 2012. Subject to certain certification and utilization conditions, imports of CSPV cells and modules covered by the circumvention determinations that entered the U.S. during the two-year period prior to June 6, 2024 which had been authorized by the former President Biden on June 2022 were not subject to AD/CVD cash deposit or duty requirements. Imports of CSPV cells and modules from the four Southeast Asian countries covered by the circumvention determination that entered the U.S. on or after June 6, 2024 are subject to AD/CVD cash deposit requirements of the China AD/CVD orders and, possibly, final AD/CVD duty liability. Cash deposit rates for CSPV modules covered by the China AD/CVD orders vary significantly depending on the producer and exporter of the modules and may amount to over 250% of the entered value of the imported merchandise.
Additionally, in October 2023, a coalition of U.S. aluminum extruders and a labor union filed AD/CVD cases on aluminum extrusions from fifteen countries. The USDOC has initiated investigations based on the petitions. Certain components in our trackers, including certain clamps, U-joints, and bearing housings are made using extruded aluminum. In September 2024, the USDOC released its final determination from their investigations against aluminum extrusions from multiple countries. On October 30, 2024, the U.S. International Trade Commission (“USITC”) voted to find no injury in its pending AD/CVD investigation, meaning that the USDOC’s AD/CVD orders will not go into effect. The coalition of petitioners may still appeal the USITC’s decision, and we will continue to monitor developments in the appeal process. If the USITC’s decision is overturned on appeal, the imposition of AD/CVD orders could negatively impact our business, financial condition, and results of operations.
On April 24, 2024, the American Alliance for Solar Manufacturing Trade Committee, an ad hoc coalition of domestic producers of CSPV cells and modules, filed a petition with the USDOC and the USITC seeking the imposition of AD/CVD tariffs on imports of CSPV cells and modules from Cambodia, Malaysia, Thailand and Vietnam. On May 20, 2025, the USITC made a final determination that U.S. industry had been materially injured by imports of CSPV cells, whether or not assembled into modules, from Malaysia and Vietnam and threatened with material injury by such imports from Cambodia and Thailand. On June 24, 2025, the USDOC issued AD/CVD orders that took effect on June 24, 2025. The rates under the AD/CVD orders vary from below 1% to more than 3,400%, depending on the relevant company.
On July 17, 2025, the Alliance for American Solar Manufacturing and Trade, a coalition of U.S.-based solar manufacturers, filed a petition with the USDOC and USITC seeking the imposition of AD/CVD tariffs on imports of CSPV cells and modules from India, Indonesia, and Laos. The petition alleges dumping margins of 213.96% for India, 89.65% for Indonesia, and 245.79% to 249.09% for Laos. The final determinations by the USDOC are expected sometime in the summer of 2026.
While we do not sell solar modules, the degree of our exposure is dependent on, among other things, the impact of the AD/CVD orders on the projects that are also intended to use our products, with such impact being largely out of our control. We have seen a number of projects in our order book delayed as a result of the USDOC investigations, and effective enforcement of the AD/CVD orders could negatively impact our results of operations.
Backlog can be subject to large variations from quarter to quarter and comparisons of backlog from period to period are not necessarily indicative of future revenue. The contracts comprising our backlog may not result in actual revenue in any particular period or at all, and the actual revenue from such contracts may differ from our backlog estimates. The timing of receipt of revenue, if any, on projects included in backlog could change because many factors affect the scheduling of projects. Cancellation of or adjustments to contracts may occur. The failure to realize all amounts in our backlog could adversely affect our future revenue and gross margins. As a result, our backlog as of any particular date may not be an accurate indicator of our future financial performance.
The failure to realize all amounts in our backlog could adversely affect our future revenue and gross margins. As a result, our backlog as of any particular date may not be an accurate indicator of our future financial performance.
Solar panel imports to the U.S. have also been, and may continue to be, impacted by the Uyghur Forced Labor Prevention Act (“UFLPA”) that was signed into law by former President Biden on December 23, 2021. According to U.S. Customs and Border Protection,Protection (“CBP”), “it[the UFLPA] establishes a rebuttable presumption that the importation of any goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in the Xinjiang Uyghur Autonomous Region of the People’s Republic of China, or produced by certain entities, is prohibited by Section 307 of the Tariff Act of 1930 and that such goods, wares, articles, and merchandise are not entitled to entry to the United States.” U.S. TheCustoms and Border Protection stated that “[t]he presumption applies unless the Commissioner of U.S. Customs and Border ProtectionCBP determines thatthere theis importeran ofexception record has complied with specified conditions and, bythrough clear and convincing evidence, that the goods, wares, articles, or merchandise were not produced using forced labor.labor or that UFLPA does not apply.” There continues to be uncertainty in the market around achieving full compliance with the UFLPA, whether related to sufficient traceability of materials or other factors. This has created a significant compliance burden and constrained solar panel imports. We cannot currently predict what, if any, impact the UFLPA will have on the overall future supply of solar panels into the U.S. and the related timing and cost of our clients’ solar project, development and construction activities. While we do not import or sell solar panels, project delays caused by solar panel constraints may negatively impact our product delivery schedules and future sales, and therefore our business, financial condition, and results of operations.
Our customers typically use our systems for grid-connected applications wherein solar power is sold under a power purchase agreement or into an organized electric market. This segment of the solar industry has historically depended in large part on the availability and size of government incentives supporting the use of renewable energy. See Item 1 - Business - Government Regulation - Government Incentives for a discussion of U.S. incentives. Consequently, the reduction, elimination or expiration of government incentives for grid-connected solar electricity may negatively affect the competitiveness of solar electricity relative to conventional and non-solar renewable sources of electricity and could harm or halt the growth of the solar electricity industry and our business. These subsidies and incentives may expire on a particular date, end when the allocated funding is exhausted, or be reduced or terminated as renewable energy adoption rates increase or as a result of legal challenges, the adoption of new statusesstatutes or regulations or changes to existing regulations, or the passage of time. These reductions, eliminations or expirations could occur without warning. There is no guarantee that such policies and incentives will continue to exist in the current form, if at all. The reduction, elimination or expiration of such incentives could reduce customer demand for our offerings, lead to a loss of customers and potential customer projects, and could harm our business, operating results and cash flows.
While government incentives are intended to encourage investments in new solar projects, the impact the tax credit regime applicable to solar facilities in the U.S. will have on our results of operations is unclear. As discussed in the section in Item 1. Business captioned “Government Regulation—Government Incentives,” the OBBB included changes to the energy tax credits, specifically that the solar ITC now terminates for facilities that are placed in service after December 31, 2027, but that termination does not apply if the taxpayer begins construction on the facility before July 4, 2026. This could act as an incentive for taxpayers to construct facilities before a certain date. On August 15, 2025, Treasury and the IRS issued Notice 2025-42, which eliminates the 5% safe harbor for utility-scale solar projects and only allows the physical work test to determine when a project begins construction. Changes or reductions to these and other government incentives could have a material adverse impact on our business, financial condition and results of operations.
While government incentives are intended to encourage investments in new solar projects, the impact the tax credit regime applicable to solar facilities in the U.S. will have on our results of operations is unclear. In particular, the tax credit regime in place prior to the IRA’s enactment provided annual reductions in the applicable credit amount at the beginning of 2023 and 2024 and therefore encouraged customers to acquire our products prior to calendar year-end dates in order to qualify for a higher tax credit available for projects that commenced construction (within the meaning of IRS guidance) prior to those dates. As a result of the changes made by the IRA, while there may continue to be an incentive for taxpayers to commence construction on facilities before certain dates, the tax credits will not experience annual reductions similar to those that would have occurred at the end of 2022 and 2023 for at least ten years and therefore customer sales may not be as high as they otherwise would have been through 2023 with the prior ITC step-down schedule. This change could have an adverse impact on our results of operations in the near term, as we anticipated an increase in demand for our products in fiscal years 2022 and 2023) related to the prior ITC step-down schedule. Additionally, the Trump Administration has issued numerous Executive Orders (“EOs”), including the Unleashing American Energy Executive Order on January 20, 2025, which requires an immediate pause in the disbursement of funds appropriated through the IRA during a 90-day review period. We are currently evaluating these EOs and other related memoranda to determine what, if any, impact they might have on awards selected or received from the DOE. This pause, or a similar pause, particularly if extended, could delay the timing of projects, and could have a material adverse impact on our business, financial condition and results of operations.
Management's Discussion & Analysis (MD&A)
New heading “2.875% Convertible Senior Notes due 2031”
New heading “Year Ended December 31, 2025 Compared to Year Ended December 31, 2024”
New heading “Foreign Currency (Gain) Loss”
New heading “Senior Secured Credit Facility”
New heading “APA Acquisition Earnout Consideration and Deferred Consideration”
New heading “Deferred Consideration”
Removed heading “Legal Settlement”
Removed heading “Foreign Currency Loss”
Removed heading “Year Ended December 31, 2023 Compared to Year Ended December 31, 2022”
Removed heading “Contractual Obligations and Commitments”
Largest changes
“An impairment charge of $102.6 million in 2025 for goodwill was reversed for tax purposes resulting in positive taxable income. The impairment reversal resulted in additional tax expense of approximately $22.3 million. A $10.2 million valuation allowance related to the inventory valuation charge and debt restructuring charge was accrued for Brazil. The APA acquisition added new state tax filing requirements and increased the Company’s apportioned income in existing states. Other book-tax basis differences attributed to the increased tax expense as well.”see in full comparison
“During the fourth quarter of 2025, the Company updated the long-term projections for its reporting units as part of its annual goodwill impairment testing process. These projections reflect local market conditions, expected market share, strategic changes, and other key assumptions. For STI Operations, the updated projections incorporated the Company’s fourth-quarter 2025 decision to phase out a version of the H250 product that was not compatible with SmarTrack® and to focus instead on the SmarTrack®-compatible version introduced in 2024. …”see in full comparison
On February 1, 2025,see in full comparisonthePresident Trump issuedthreeexecutive orders directing the U.S. to impose new tariffs on imports from Canada, Mexico, and China, to take effect on February 4,2025,2025.and onOn February 3, 2025, President Trump announced his intention to pause these tariffs on Canada and Mexico for aone-month30-day period. The tariffs impose an additional 25% ad valorem rate of duty on all imports from Canada and Mexico (other than imports of Canadian energyresources exports,resources, which are subject to a 10% ad valorem rate of duty) and an additional 10% ad valorem rate of duty on all imports from China.WeOn March 4, 2025, the previously announced 25% tariff on Canadian and Mexican goods took effect and the tariff on Chinese goods was doubled to 20%. On June 4, 2025 tariffs on steel and aluminum increased from 25% to 50% on all steel and aluminum coming from Canada. Further, on July 31, 2025, President Trump issued an executive order increasing the ad valorem rate on imports from Canada to 35%. President Trump also has threatened a 30% ad valorem rate on imports from Mexico, though those arecurrently evaluating the potential impact of the imposition of the announced tariffs to our business and financial condition. While we donotbelieve that the tariffs announced by the U.S. on February 1, 2025 will have a material adverse effect upon our results of operations, financial condition, or liquidity, the actual impact of the new tariffs is subject to a number of factors including the effective date and duration of such tariffs, changescurrently inthe amount, scope and nature of the tariffs in the future, any countermeasures that the target countries may take and any mitigating actions that may become available.effect.
“The estimated fair value of the Array Legacy Operations reporting unit was significantly higher than the carrying balance of the reporting unit as of each of the testing dates. The fair value of the Array Legacy Operations and STI Operations reporting units were determined using the income approach and then compared to the GPC marketplace EBITDA multiples to corroborate the fair value of the reporting unit. …”see in full comparison
“We are continuing to evaluate the potential impact of the imposition of the announced tariffs, the effect of the Supreme Court decision on tariffs described above, and any additional or retaliatory tariffs, to our business and financial condition. While we do not believe that the tariffs announced by the U.S. …”see in full comparison
During the quarters ended September 30, 2024 and December 31, 2024, the Company experienced a sustained decline in its stock price, which hit a 52-week low during the third quarter of 2024 and again during the fourth quarter of 2024, resulting in a decrease in market capitalization. In addition, the Company updated its long-term projections for the Company’s reporting units as of September 30, 2024 and December 31, 2024 and evaluated the execution risk associated with the Company’s projections and market conditions. As a result, the Company identified indicators of impairment related to the Company’s reporting units during the third and fourth quarters of 2024. Management, with the assistance of a third-party valuation specialist, performed quantitative goodwill impairment tests of the Array Legacysee in full comparisonArrayOperations and STI Operations reporting units as of September 30, 2024 and December 31, 2024.As a result of these tests, the Company recorded impairments of STI Operation’s goodwill totaling $236.0 million during the year ended December 31, 2024. The estimated fair value of the Array Legacy Operations reporting unit was significantly higher than the carrying balance of the reporting unit as of each of the testing dates. Subsequent to recording the impairment of goodwill, the Company reconciled the overall market capitalization of the Company, within a reasonable range, to the sum of the estimated fair values of both of the Company’s reporting units.
Full comparison: every changed paragraph (141)
This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our financial statements and the related notes and other financial information included in this Annual Report on Form 10-K. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under the sections of this Annual Report on Form 10-K captioned “Forward-Looking Statements” and “Risk Factors.”
We are a leading global provider of solar tracking technology and fixed-tilt systems to utility-scale and distributed generation customers,customers who construct, developdevelop, and operate solar PV sites. With solutions engineered to withstand the harshestharsh weather conditions, ARRAY’sArray’s high-quality solar trackers, fixed-tilt systems, software platformsplatforms, foundation solutions, and field services combine to maximizeoptimize energy production and deliver value to our customers for the entire lifecycle of a project.
Trackers move solar panels throughout the day to maintain an optimal orientation to the sun, which significantly increases their energy production. Solar energy projects that use trackers typically generate more energy and deliver a lower LCOE than projects that use “fixed tilt” mounting systems, which do not move. Hybrid sites utilizing trackers and fixed-tilt can be utilized to optimize productivity based on the topography, geography, and environment. The vast majority of ground mounted solar systems in the U.S. use trackers.
Our flagship trackertracker, DuraTrack®, uses a patented design that allows one motor to drive multiple rows of solar panels through articulated driveline joints. To avoid infringing on our U.S. patent, our competitors must use designs that we believe are inherently less efficient and reliable. For example, our largest competitor’s design requires one motor for each row of solar panels. As a result, we believe our products have greater reliability, lower installation costs, reduced maintenance requirements and competitive manufacturing costs. Our core U.S. patent is on a linked-row, single-driving apparatus that rotates a plurality ofmultiple tracker rows connected by an articulating drive shaft. This patent does not expire until February 5, 2030.
With our acquisition of STI in January 2022, we added a dual-row tracker design to our product portfolio.portfolio, the Array STI H250. This tracker uses one motor to drive two connected rows and is ideally suited for sites with irregular and highly angled boundaries or fragmented project areas. To offer a comprehensive set of solutions to the growing market, in September of 2022, we also introduced a third tracker product, OmniTrack, which requires significantly less grading and civil works permitting prior to installation in addition to accommodating uneven terrain. This suite of products extends our target applications and ability to deliver the best utility-scale solar tracker solutions to the market.
Our third tracker product, OmniTrack, which was introduced in September 2022, requires significantly less grading and civil works permitting prior to installation in addition to accommodating uneven terrain.
With the APA Acquisition in August 2025, we added a portfolio of fixed-tilt and foundation solutions, including the APA Titan and APA Titan Duo™ racking systems and the APA A-Frame™ Interface foundation. These products deliver adaptable designs for utility-scale projects, offering flexibility for challenging terrain, high snow loads, and large-format modules while streamlining installation and reducing material costs.
We sell our products to solar developers, independent power producers, utilities, and EPCs that build solar energy projects and to large solar developers, independent power producers and utilities,projects, often under master supply agreements or multi-year procurement contracts. During the year ended December 31, 2024,2025, we derived 70%81% and 30%19% of our revenues from customers in the U.S. and the rest of the world, respectively. AsFrom the founding of Array through December 31, 2024,2025, we had shipped approximately 8396 gigawatts of trackers to customers worldwide.
Acquisition of STIAPA NorlandSolar
On the Closing Date, our wholly owned subsidiary STINorland USA, Inc., a California corporation, the Buyer, completed the APA Acquisition, pursuant to the terms of the Purchase Agreement. The cash paid as of the Closing Date was $159.9 million, net of $10.1 million in preliminary and customary purchase price adjustments, which includes $6.2 million to retire debt. For U.S. GAAP purposes, the aggregate cash consideration paid was approximately $166.1 million, subject to final post-closing adjustment. We expect to finalize customary post-closing adjustments by June 2026. The Purchase Agreement also includes an earnout provision estimated to have a fair value of approximately $19.3 million as of the Closing Date (the “Earnout Consideration”), which is included in the purchase consideration, under which the Seller may receive shares of Company common stock, or equivalent cash value at the Buyer’s discretion, based upon APA’s achievement of certain financial performance targets during the three-year period ending on September 30, 2028. As a result, the purchase consideration for the APA Acquisition totaled approximately $185.4 million. Subject to the terms and conditions set forth in the Purchase Agreement, the Company has also agreed to pay aggregate deferred consideration of approximately $40.0 million payable in three installments over a two-year period based on service within five business days after the first and second anniversaries from the Closing Date and as set forth in Note 3 - Acquisition (the “Deferred Consideration”). For further discussion of the Earnout Consideration and Deferred Consideration, see “—APA Acquisition Earnout Consideration and Deferred Consideration” below.
The amounts recorded as of December 31, 2025 are preliminary, as the Company is finalizing working capital, post-closing, and other customary adjustments. These preliminary estimates are subject to change within the measurement period (defined as the twelve months following the Closing Date) and related accounting adjustments may be materially different, as the Company obtains additional information on these matters and as additional information is made known during the post-acquisition measurement period. As a result of further refining its estimates and assumptions since the date of the acquisition, the Company recorded measurement period adjustments to the initial opening balance sheet. There were no measurement period adjustments materially impacting earnings that would have been recorded in previous reporting periods if the adjustments had been recognized as of the acquisition date.
In connection with the APA Acquisition, the Company has lease agreements for offices, manufacturing facilities and warehouses located in Ohio and Connecticut. Of these lease agreements, five are with related parties owned by certain members of APA's management team.
Expenses related to these operating lease agreements are allocated based on usage to Cost of product and service revenue or General and administrative expenses in the consolidated statements of operations. Total costs related to these operating lease agreements were $1.2 million for the year ended December 31, 2025.
APA designs, engineers, and manufactures solar racking, mounting and foundation systems. Integrating such systems into our business model through the acquisition of APA expands our product portfolio to better serve the evolving needs of the solar industry and our customers.
2.875% Convertible Senior Notes due 2031
On June 27, 2025, we completed a private placement of $345 million in aggregate principal amount of the 2031 Convertible Notes, resulting in net proceeds of $334.6 million after deducting initial purchasers’ discounts and offering expenses. The 2031 Convertible Notes were issued pursuant to an indenture, dated June 27, 2025, between the Company and U.S. Bank Trust Company, National Association, as trustee.
The 2031 Convertible Notes are senior unsecured obligations of the Company and will mature on July 1, 2031, unless earlier converted redeemed or repurchased. Interest is payable semiannually in arrears at a rate of 2.875% per year on January 1 and July 1 of each year, beginning on January 1, 2026.
R&D costs are included within General and administrative expenses in the accompanying consolidated statements of operations. We incur R&D costs during the process of researching and developing new products and significant enhancements to existing products. R&D costs are a subset of our total engineering spend and consist primarily of personnel-related costs associated with our team of internal engineers, third-party consultants, materials and overhead. We expense these costs as incurred. Total engineering expense was $18.7 million, $17.0 million and $16.7 million during the years ended December 31, 2025, 2024 and 2023, respectively, of which $9.9 million, $6.7 million and $8.5 million were related to R&D activities we performed during the same period, respectively.
On January 11, 2022, we completed our acquisition of STI, which resulted in the Company owning 100% of the equity interests in STI.
Similar to Array Legacy Operations, the STI Operations generate revenue through the design, manufacture and sale of utility-scale solar tracker systems to customers in global markets that include Spain, Brazil, the U.S. and South Africa. The integration of STI has allowed us to accelerate our international expansion and better address rising global demand for utility-scale solar projects, particularly in developing countries in Latin America and Africa.
•The U.S. interest rate environment. We have had customers delay planned installations or look to renegotiate power purchase agreements (“PPAs”) to improve project returns based on various rate environments. For example, in anticipation of interest rate reductions and more favorable project financing conditions later in 2024, some customers delayed installations. While the Federal Reserve began lowering interest rates in the second half of 2024, the timing and impact of subsequent rate adjustments during 2025 continued to create additional considerations for our customers, and there are varying outlooks on whether additional rate cuts may occur. Customers must weigh this uncertainty in conjunction with other macroeconomic factors when assessing the returns and timing for relevant projects.
•The interest rate environment. As interest rates rose in 2022 and 2023, we saw customers looking to renegotiate power purchase agreements to improve project returns. Any unexpected or protracted negotiation can cause installation delays and delay our ability to recognize revenue relating to the relevant projects. In addition, we had customers delay planned installations in anticipation of interest reductions and more favorable project financing conditions later in 2024. While the Federal Reserve made the decision to lower the target interest rate by 0.5% in October 2024 the timing of any positive impact the lower rate may have on project timing remains uncertain, particularly in light of the Federal Reserve’s decision not to lower the target interest rate further in January 2025.
•Availability of necessary equipment. We have a broad portfolio of customer relationships including presence with most Tier 1 utilities in the U.S. Each utility has unique specifications for access to its grid, which isare generally not consistent across the industry. As the supply of renewables projects has increased, severe shortages and long lead-times in the supply of switches, transformers and high-voltage breakers used in the interconnection of utility scale solar power plants to the grid, has historically affected the timing and completion of these projects, including for some of our customers.
•Macroeconomic factors. There has been a rapid depreciation of the Brazilian Realreal in conjunction with existing pricing pressures on energy in the Brazilian market. Due to these dynamics, the economic cases for the power purchase agreements, or PPAs, for many solar projects have become less attractive for our customers. Many of the developers in Brazil of these projects arecontinue continuingto signalingsignal delays as they renegotiate the pricing of these PPAs. In addition, our results will also be impacted by tax incentives we can recognize, for example the Brazil value-added tax benefit, Imposto sobre Circulação de Mercadorias e Servicos (“ICMS”), which will discontinuebe fully phased out in 2033. As a result, we are focused on reducing costs and better aligning our organization, including the size thereof, in Brazil with the current market conditions.
It is uncertain what impact new or existing tariffs, trade restrictions or retaliatory actions may have on us, the solar industry and our customers. An escalation in trade tensions or the implementation of broader tariffs, trade restrictions or retaliatory measures on our products or components originating from countries outside the U.S. could adversely impact our ability to source necessary components, manufacture products at competitive cost, or sell our products at prices customers are willing to pay. Any such developments could materially and adversely affect our business operations, results of operations and cash flows.
We incur R&D costs during the process of researching and developing new products and significant enhancements to existing products. R&D costs are a subset of our total engineering spend and consist primarily of personnel-related costs associated with our team of internal engineers, third-party consultants, materials and overhead. We expense these costs as incurred prior to a respective product being ready for commercial production. Total engineering expense was $17.0 million, $16.7 million and $11.8 million during the years ended December 31, 2024, 2023 and 2022, respectively, of which $6.7 million, $8.5 million and $4.2 million were related to R&D activities we performed during the same period, respectively.
Impact of IRAOBBB
While solar power is cost-competitive with conventional forms of generation in many U.S. states even without the ITC, we believe previous step-downs in the ITC in past years have influenced the timing and quantity of some customers’ orders. On July 4, 2025, President Trump signed into law the OBBB, which included changes to the energy tax credits. Specifically, the solar ITC now terminates for facilities that are placed in service after December 31, 2027, but that termination does not apply if the taxpayer begins construction on the facility before July 4, 2026. In addition, the OBBB imposes new foreign entity of concern limitations on the ITC before it expires, which could impact the ability of solar facilities to claim the ITC. Specifically, taxpayers cannot claim the credit in taxable years beginning after enactment of the OBBB if they are prohibited foreign entities (which are generally entities that are formed in or controlled by covered nations, including China, Russia, Iran, and North Korea, as well as entities determined to be under effective control as a result of contracts entered into with such entities). The credit is also disallowed for solar facilities that begin construction after December 31, 2025 that receive material assistance from a prohibited foreign entity. On February 13, 2026, Treasury guidance was released clarifying methods for calculating material assistance from a prohibited foreign entity and requesting comments.
On July 7, 2025, President Trump issued an executive order instructing Treasury to issue updated guidance, including on commencement of construction, within 45 days. On August 15, 2025, Treasury and the IRS issued Notice 2025-42 consistent with the executive order, which eliminates the 5% safe harbor for utility-scale solar projects and only allows the physical work test to determine when a project begins construction. If solar developers are unable to satisfy the physical work test, our business, financial condition, and results of operations could be adversely affected.
The Company expects certain tax provisions of the OBBB, including the reinstatement of 100% bonus depreciation for qualified property and the immediate expensing of U.S.-based R&D activities, to reduce our 2025 taxable income. These accelerated deductions are expected to lower current‑year cash taxes and improve near-term operating cash flows. The favorable impact primarily represents a timing difference. As assets subject to bonus depreciation become fully depreciated and as expensed R&D activities normalize, we expect cash taxes to increase in future periods. The Company continues to evaluate additional guidance expected to be issued by Treasury related to the OBBB.
While solar power is cost-competitive with conventional forms of generation in many U.S. states even without the ITC, we believe step-downs in the ITC have influenced the timing and quantity of some customers’ orders. With the passage of the IRA in August 2022, the ITC was raised to 30% with no step downs before 2032. Accordingly, we do not anticipate the ITC rate to impact our seasonality during that timeframe.
AfterThe section 45X advanced manufacturing production tax credit was established as part of the IRA. The section 45X credit is a periodper-unit oftax uncertainty,credit onthat Octoberis 24,earned 2024,over U.S.time Departmentfor ofeach Treasuryclean energy component domestically produced and thesold IRSby issueda finalmanufacturer. regulations on theThe section 45X manufacturing production tax credit thatapplies largelyto adoptedeligible thecomponents, statutory definitions ofincluding torque tube and structural fasteners, which we have determined apply to our components.fasteners. Beginning in late 2023 and continuing through 2024 and into 2025, we have successfully negotiated, and we continue to successfully negotiate, agreements with key suppliers around sharing the economic benefits of section 45X credits associated with torque tube and structural fasteners. We continue to pursue additional agreements for splitting the economic benefits of section 45X with suppliers for parts we do not manufacture internally. In addition, during the second quarter of 2024, we concluded that certain parts manufactured by the Company qualify for the section 45X advanced production credits. Refer to Note 2 – Summary of Significant Accounting Policies in the accompanying notes to our consolidated financial statements included in this Annual Report on Form 10-K for a discussion on how we account for these incentives and amounts recognized for the periods presented.
The OBBB did not modify the phase-out of the section 45X credit or the definitions of eligible components relating to solar trackers; however, the OBBB did impose foreign entity of concern limitations on taxpayers claiming the section 45X credit. Specifically, taxpayers cannot claim the credit in taxable years beginning after enactment of the OBBB if they are prohibited foreign entities (which are generally entities that are formed in or controlled by covered nations, including China, Russia, Iran, and North Korea, as well as entities determined to be under effective control as a result of contracts entered into with such entities). The credit is also disallowed in taxable years beginning after enactment of the OBBB for eligible components that receive material assistance from a prohibited foreign entity. On February 13, 2026, Treasury guidance was released that further clarified methods for calculating material assistance and included a request for comments by March 30. We anticipate forthcoming Treasury proposed rule will further clarify the potential impact of the foreign entity of concern limitations may have for credits claimed in 2026 and future years.
The IRS issued Notice 2023-38 in May of 2023 setting forth guidance on the domestic content bonus tax credits under the IRA. Uncertainties still existexisted under this guidance, like whose costs would be used (the manufacturer’s cost, a vendor’s cost to acquire, etc.) and how to define manufactured product components associated with trackers. In May of 2024, the IRS issued Notice 2024-41 setting forth further guidance on the domestic content bonus tax credits, including a safe harbor method for calculating domestic content percentages. On January 16, 2025, the IRS released Notice 2025-08, modifyingwhich modified Notice 2023-38 and Notice 2024-412024-41, as well as introducingintroduced an updated elective safe harbor method for use in lieu of provisions of the adjusted percentage rule provided in Notice 2023-38 for calculating the domestic content bonus credit amounts applicable for certain qualified facilities and energy projects. Notice 2024-41 and Notice 2025-08 and the updated definitions described therein have clarified somecertain pre-existing uncertainty in the industry, but they have also introduced uncertaintiesnew of their own.uncertainties. These uncertainties have and could continue to cause our customers to delay projects as they navigate the existing guidance in qualifying for the tax credit and possibly wait for further clarity. If these financial benefits vary significantly from our assumptions, our business, financial condition, and results of operations could be adversely affected.
The OBBB increased the domestic content threshold for solar facilities that begin construction after June 16, 2025 to claim the domestic content bonus credit, however, the OBBB did not otherwise amend the requirements for claiming a domestic content bonus credit or the guidance previously issued by the government. As domestic content guidance is not a final rule, it could be further modified by the Trump Administration.
Impact of the Ongoing Russian-UkraineRussia-Ukraine War
The ongoing Russian-UkraineRussia-Ukraine war has reduced the availability of material that can be sourced in Europe and, as a result, increased logistics costs for the procurement of certain inputs and materials used in our products. We do not know the ultimate severity or duration of the conflict, but we continue to monitor the situation and evaluate our procurement strategy and supply chain as to reduce any negative impact on our business, financial condition, and results of operations.
Impact of Disruption of Key Shipping Lines, i.e. Attacks on Shipping in the Red SeaLanes
TheIn disruptionthe recent past, we have seen disruptions of container shipping traffic through the Red Sea has createdcreate port congestion, especially in Asia, and cause many shipping companies to pause shipments through the Suez Canal and the Red Sea as a result of attacks against commercial vessels in the area, affecting transit times, capacity, and shipping costs for routes connecting the rest of the world with Asia. Many shipping companies have paused shipments through the Suez Canal and the Red Sea causing rerouting of commercial vessels. To address the persisting challenges arising from prolonged transit times, we have increased our local sourcing efforts where feasible within certain regions. These measures aim to reduce delays to get the product to project sites on time. There is still uncertainty on how long these disruptions and the severity of their impact on our operations willmay last, but we continue to monitor thesuch situationsituations and evaluate our procurement and supply chain strategies, as to reduce any negative impact on our business, financial condition, and results of operations.
Inflationary pressure may continue to negatively impact our results of operations in the near-term. To mitigate the inflationarythese pressures on our business, despite our ASPs decreasing due toand the currentvolatility deflationaryin environmentsteel forand commoditiesaluminum like steel,prices, we have continued to accelerate our productivity initiatives, expandedexpand our supplier base, and continued to execute on our overhead cost containmentcost-containment practices.
On August 18, 2023, the U.S. Department of CommerceUSDOC issued final affirmative determinations of circumvention with respect to certain CSPV cells and modules produced in Cambodia, Malaysia, Thailand and Vietnam using parts and components from China. As a result, certain CSPV cells and modules from Cambodia, Malaysia, Thailand and Vietnam are now subject to AD/CVD orders on CSPV cells and modules from China that have been in place since 2012. Subject to certain certification and utilization conditions, imports of CSPV cells and modules covered by the circumvention determinations that entered the U.S. during the two-year period prior to June 6, 2024—which had been authorized by the former President Biden on June 2022—were not subject to AD/CVD cash deposit or duty requirements. Imports of CSPV cells and modules from the four Southeast Asian countries covered by the circumvention determination that entered the U.S. on or after June 6, 2024 are subject to AD/CVD cash deposit requirements of the China AD/CVD orders and, possibly, final AD/CVD duty liability. Cash deposit rates for CSPV modules covered by the China AD/CVD orders vary significantly depending on the producer and exporter of the modules and may amount to over 250% of the entered value of the imported merchandise.
Additionally, in October 2023, a coalition of U.S. aluminum extruders and a labor union filed AD/CVD cases on aluminum extrusions from fifteen countries. The USDOC has initiated investigations based on the petitions. Certain components in our trackers, including certain clamps, U-joints, and bearing housings are made using extruded aluminum. In September 2024, the USDOC released its final determination from their investigations against aluminum extrusions from multiple countries. On October 30, 2024, USITC voted to find no injury in its pending AD/CVD investigation, meaning that the USDOC’s AD/CVD orders will not go into effect. The coalition of petitioners may still appeal the USITC’s decision, and we will continue to monitor developments in the appeal process. If the USITC’s decision is overturned on appeal, the imposition of AD/CVD orders could negatively impact our business, financial condition, and results of operations.
On April 24, 2024, the American Alliance for Solar Manufacturing Trade Committee, an ad hoc coalition of domestic producers of CSPV cells and modules, filed a petition with the USDOC and the USITC seeking the imposition of AD/CVD tariffs on imports of CSPV cells and modules from Cambodia, Malaysia, Thailand and Vietnam. On May 20, 2025, the USITC made a final determination that U.S. industry had been materially injured by imports of CSPV cells, whether or not assembled into modules, from Malaysia and Vietnam and threatened with material injury by such imports from Cambodia and Thailand. On June 24, 2025, the USDOC issued AD/CVD orders that took effect on June 24, 2025. The rates under the AD/CVD orders vary from below 1% to more than 3,400%, depending on the relevant company.
On July 17, 2025, the Alliance for American Solar Manufacturing and Trade, a coalition of U.S.-based solar manufacturers, filed a petition with the USDOC and USITC seeking the imposition of AD/CVD tariffs on imports of CSPV cells and modules from India, Indonesia, and Laos. The petition alleges dumping margins of 213.96% for India, 89.65% for Indonesia, and 245.79% to 249.09% for Laos. The final determinations by the USDOC are expected sometime in the summer of 2026.
While we do not sell solar modules, the degree of our exposure is dependent on, among other things, the impact of the AD/CVD orders on the projects that are also intended to use our products, with such impact being largely out of our control. We have seen a number of projects in our order book delayed as a result of the USDOC investigation,investigations, and effective enforcement of the AD/CVD orders could negatively impact our results of operations.
On February 1, 2025, the President Trump issued three executive orders directing the U.S. to impose new tariffs on imports from Canada, Mexico, and China, to take effect on February 4, 2025,2025. and onOn February 3, 2025, President Trump announced his intention to pause these tariffs on Canada and Mexico for a one-month30-day period. The tariffs impose an additional 25% ad valorem rate of duty on all imports from Canada and Mexico (other than imports of Canadian energy resources exports,resources, which are subject to a 10% ad valorem rate of duty) and an additional 10% ad valorem rate of duty on all imports from China. WeOn March 4, 2025, the previously announced 25% tariff on Canadian and Mexican goods took effect and the tariff on Chinese goods was doubled to 20%. On June 4, 2025 tariffs on steel and aluminum increased from 25% to 50% on all steel and aluminum coming from Canada. Further, on July 31, 2025, President Trump issued an executive order increasing the ad valorem rate on imports from Canada to 35%. President Trump also has threatened a 30% ad valorem rate on imports from Mexico, though those are currently evaluating the potential impact of the imposition of the announced tariffs to our business and financial condition. While we do not believe that the tariffs announced by the U.S. on February 1, 2025 will have a material adverse effect upon our results of operations, financial condition, or liquidity, the actual impact of the new tariffs is subject to a number of factors including the effective date and duration of such tariffs, changescurrently in the amount, scope and nature of the tariffs in the future, any countermeasures that the target countries may take and any mitigating actions that may become available.effect.
On April 2, 2025, President Trump introduced a baseline reciprocal tariff rate of 10% on most countries and individualized rates on some countries of up to 50%. On April 9, 2025, President Trump increased tariffs for Chinese goods to 125% (making the tariff rate for certain products up to 145% due to the “stacking” nature of the relevant tariffs), while also issuing an executive order that the reciprocal tariffs that had been announced on April 2, 2025 for other countries would be reduced to a baseline rate of 10% for a period of 90 days starting on April 10, 2025. On July 7, 2025, President Trump extended the initial 90-day pause on the reciprocal tariffs (except for those relating to China) and maintained the 10% baseline rate until August 1, 2025. On July 31, 2025, President Trump announced via an executive order reciprocal tariffs above the 10% baseline rate for a number of countries; these rates became effective as of August 7, 2025. In November 2025, the Supreme Court heard arguments in a case challenging tariffs imposed under the IEEPA. In February 2026, the Supreme Court issued a ruling that IEEPA does not authorize the imposition of tariffs. Although the ruling has been issued, its implications for trade policy and related administrative actions remain uncertain. The Company is reviewing the decision and will evaluate its potential impact, including with respect to any potential refunds, as further information becomes available.
President Trump also launched a new Section 301 investigation into Brazil’s alleged unreasonable or discriminatory trade practices; initiated a new Section 232 investigation into imports of polysilicon and its derivatives and a new Section 232 investigation into imports of unmanned aircraft systems and their parts and components, among other Section 232 investigations; and announced a 50% tariff on imports of copper following the conclusion of a Section 232 investigation, effective August 1, 2025.
We are continuing to evaluate the potential impact of the imposition of the announced tariffs, the effect of the Supreme Court decision on tariffs described above, and any additional or retaliatory tariffs, to our business and financial condition. While we do not believe that the tariffs announced by the U.S. in 2025 and through the date of filing this Form 10-K in 2026 will have a material adverse effect upon our results of operations, financial condition, or liquidity, the actual impact of new tariffs is subject to a number of factors, including the effective date and duration of such tariffs, changes in the amount, scope and nature of the tariffs in the future, any countermeasures that the target countries may take and any mitigating actions that may become available.
For non-U.S. subsidiaries that operate in a local currency environment, assets and liabilities are translated into U.S. dollars at period endperiod-end exchange rates. Income, expense and cash flow items are translated at average exchange rates prevailing during the period. For non-U.S. subsidiaries that operate in a U.S. dollar functional currency, local currency inventories and property, plant and equipment are translated into U.S. dollars at rates prevailing when acquired, and all other assets and liabilities are translated at period-end exchange rates. Income and expense items are translated at average exchange rates prevailing during the period. Gains and losses which result from remeasurement are included in earnings.
Our customer base consists primarily of large solar developers, independent power producers, utilities and EPCs. We do not require collateral on our accounts receivable.
At December 31, 2024,2025, our largest customer and five largest customers accounted for 9.0%13.4% and 31.0%,29.8%, respectively, of total accounts receivable. At December 31, 2023,2024, our largest and five largest customers constituted 2.7%9.0% and 29.6%31.0%, respectively, of tradetotal accounts receivable, respectively.receivable.
During the year ended December 31, 2025, our two largest customers accounted for approximately 13.7% and 12.2%, respectively, of total revenue. During the year ended December 31, 2024, our two largest customers accounted for approximately 15.6% and 11.9%, respectively, of total revenue. During the year ended December 31, 2023, oneour largest customer accounted for approximately 13.4% of total revenue. During the year ended December 31, 2022, two customers accounted for 11.8% and 10.6%, respectively, of total revenue.
In managing our business and assessing financial performance, we supplement the information provided by the financial statements with other operating metrics. These operating metrics are utilized by our management to evaluate our business, measure our performance, identify trends affecting our business and formulate projections. The primary operating metric we use to evaluate our sales performance and to track market acceptance of our products is megawatts (“MWs”) shipped, and specifically the change in MWs shipped from period to period. MWs are measured for each individual project and are calculated based on the respective projects’ expected megawatt output once installed and fully operational.
MWs are measured for each individual project and are calculated based on the respective projects’ expected MW output once installed and fully operational.
We generate revenue from the sale of solar tracking and fixed-tilt systems, foundation solutions, parts, software and services. Our customers include EPCs, utilities, solar developers anddevelopers, independent power producers.producers, utilities, and EPCs. For each individual solar project, we enter into a contract with our customers covering the price, specifications, delivery dates and warranty for the products being purchased, among other things. Our contractual delivery period for the tracker systemsystem, fixed-tilt system, foundation solution, and parts can vary from days to several months. Contracts can range in value from hundreds of thousands to tens of millions of dollars.
Our revenue growth is dependent on continued growth in the size and number of solar energy projects installed each year as well as our ability to grow or maintain market share in each geography in which we compete, expand our global footprint to new and evolving markets, grow our supply chain network and production capabilities to satisfy demand and continue to develop and introduce new and innovative products that integrate emerging technologies and meet the performance requirements of our customers.
A majority of our revenue is recognized over time as work progresses,progresses. and forFor single performance obligations, we use an input measure, the cost-to-cost method, to determine progress. We review and update the contract related estimates on an ongoing basis and recognize adjustments for any project specific facts and circumstances that could impact the measurement of the extent of progress, such as the total costs to complete the contracts, under the cumulative catch-up method. Due to the relatively short duration of our outstanding performance obligations, and our ability to estimate the remaining costs to be incurred, which are substantially all material costs covered under our material supply agreements with our suppliers, we have not recorded any material catch-up adjustments for the periods presented that would have impacted revenues or EPS related to revisions in our measurement of remaining progress of our performance obligations.
Cost of product and service revenue consists primarily of product costs, including raw materials, purchased components, net of any incentives or rebates earned from our suppliers, salaries, wages and benefits of manufacturing personnel, freight, tariffs, customer support, product warranty, amortization of developed technology, and depreciation of manufacturing and testing equipment. Our product costs are affected by: (i) the underlying cost of raw materials, including steel and aluminum,aluminum; (ii) component costs, including electric motors and gearboxes,gearboxes; (iii) technological innovation,innovation; and (iv) economies of scale and improvements in production processes and automation. We may experience disruptions to our supply chain and increased material and freight costs like those experienced in 2021 and 2022 during the COVID-19 pandemic.costs. When possible, we modify our production schedules and processes to mitigate the impact of these disruptions and cost increases on our margins. We do not currently hedge against changes in the price of our raw materials.
General and administrative expense consists primarily of salaries, benefits, and equity-based compensation related to our executive, sales, engineering,R&D costs, finance, human resources, information technology, and legal personnel, as well as travel, facility costs, marketing, badcredit debtloss provision, and professional fees. The majority of our sales in 2024, 2023, and 2022, were in the U.S.; however, in January 2022, we expanded our international operations with the STI Acquisition. We currently have a sales presence in the U.S., Spain, Brazil, South AfricaU.S. and Australia.across North America, Latin America, Europe, the Middle East, Asia and Australia, with the majority of our sales in the U.S. We intend to continue to expand our sales presence and marketing efforts to additional countries.
What changed in the latest 10-Q
Risk Factors
New heading “The AWM Transaction is subject to the receipt of regulatory clearance as well as the satisfaction of other closing conditions, some or all of which may not be satisfied or completed within the expected timeframe, if at all.”
New heading “We may be unable to successfully integrate AWM’s business into our business or achieve the anticipated benefits or synergies of the AWM Transaction, if completed.”
Largest changes
“On July 16, 2026, the Company and the AWM Buyer entered into the AWM Purchase Agreement with AWM, DS Equity Holdings LLC, a Delaware limited liability company, Scott R. Rand and Daniel R. Smith, pursuant to which the AWM Transaction would be completed. …”see in full comparison
“The AWM Transaction is subject to the receipt of regulatory clearance as well as the satisfaction of other closing conditions, some or all of which may not be satisfied or completed within the expected timeframe, if at all.”see in full comparison
“We may be unable to successfully integrate AWM’s business into our business or achieve the anticipated benefits or synergies of the AWM Transaction, if completed.”see in full comparison
“Each party’s obligation to consummate the AWM Transaction is also subject to the accuracy of the representations and warranties of the other party (subject to customary materiality qualifications) and compliance in all material respects with the covenants and agreements contained in the AWM Purchase Agreement as of the closing of the AWM Transaction.”see in full comparison
“In addition, any potential unknown liabilities, liabilities that are significantly larger than we currently anticipate, and unforeseen increased expenses or delays associated with AWM, including cash costs of integration, may exceed what we currently anticipate. Any one of these factors could result in increased costs, decreases in the amount of anticipated benefits and diversion of management’s attention, which could materially impact our business, financial condition and results of operations. …”see in full comparison
“Our ability to achieve the anticipated benefits or synergies of the AWM Transaction, if completed, will depend in part upon whether we can integrate AWM’s business into our existing business in an efficient and effective manner. We may not be able to accomplish this integration process successfully. The successful integration of AWM’s business requires an assessment and implementation of several factors, including:”see in full comparison
Full comparison: every changed paragraph (9)
The AWM Transaction is subject to the receipt of regulatory clearance as well as the satisfaction of other closing conditions, some or all of which may not be satisfied or completed within the expected timeframe, if at all.
On July 16, 2026, the Company and the AWM Buyer entered into the AWM Purchase Agreement with AWM, DS Equity Holdings LLC, a Delaware limited liability company, Scott R. Rand and Daniel R. Smith, pursuant to which the AWM Transaction would be completed. Completion of the AWM Transaction is subject to a number of closing conditions, including the expiration or termination of the waiting periods (and any extensions thereof) applicable to the consummation of the AWM Transaction under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder, and other customary conditions for a transaction of this type. We can provide no assurance that all required consents and approvals will be obtained or that all closing conditions will otherwise be satisfied (or waived, if applicable), and, even if all required consents and approvals can be obtained and all closing conditions are satisfied (or waived, if applicable), we can provide no assurance as to the terms, conditions and timing of such consents and approvals or the timing of the completion of the AWM Transaction. Some of the conditions to completion of the AWM Transaction are not within our control, and we cannot predict when or if these conditions will be satisfied (or waived, if applicable). In addition, certain regulatory agencies from which the approvals and clearances will be sought have broad discretion in administering the governing regulations. As a condition to their clearance of the AWM Transaction, agencies may impose requirements, limitations or costs or require divestitures or place restrictions on the conduct of the parties’ business. These requirements, limitations, costs, divestitures or restrictions could jeopardize or delay the consummation of the AWM Transaction. Any adverse consequence of the pending AWM Transaction could be exacerbated by any delays in completion of the AWM Transaction or termination of the AWM Purchase Agreement.
Each party’s obligation to consummate the AWM Transaction is also subject to the accuracy of the representations and warranties of the other party (subject to customary materiality qualifications) and compliance in all material respects with the covenants and agreements contained in the AWM Purchase Agreement as of the closing of the AWM Transaction.
We may be unable to successfully integrate AWM’s business into our business or achieve the anticipated benefits or synergies of the AWM Transaction, if completed.
Our ability to achieve the anticipated benefits or synergies of the AWM Transaction, if completed, will depend in part upon whether we can integrate AWM’s business into our existing business in an efficient and effective manner. We may not be able to accomplish this integration process successfully. The successful integration of AWM’s business requires an assessment and implementation of several factors, including:
•the ability to successfully combine our respective businesses in a manner that permits us to achieve the cost savings, synergies and other anticipated benefits from the AWM Transaction;
•integrating complex systems, operating procedures, compliance programs, technology, networks and other assets while carrying on our ongoing business in a manner that minimizes any adverse impact on customers, suppliers, employees and other constituencies; and
•managing the expanded operations of a larger and more complex company.
In addition, any potential unknown liabilities, liabilities that are significantly larger than we currently anticipate, and unforeseen increased expenses or delays associated with AWM, including cash costs of integration, may exceed what we currently anticipate. Any one of these factors could result in increased costs, decreases in the amount of anticipated benefits and diversion of management’s attention, which could materially impact our business, financial condition and results of operations. In addition, even following successful integration, the anticipated benefits or synergies of AWM may not be realized fully, or at all, or may take longer to realize than expected.
Management's Discussion & Analysis (MD&A)
New heading “2.875% Convertible Senior Notes due 2031”
New heading “Proposed Business Combination”
New heading “Section 232 Polysilicon Investigation”
Largest changes
“On February 20, 2026, the U.S. Supreme Court ruled in Learning Resources, Inc. v. Trump that the International Emergency Economic Powers Act ("IEEPA") does not authorize the President to impose tariffs, invalidating the "Reciprocal Tariffs" imposed on imports from most U.S. trading partners as well as the tariffs on imports from Canada, Mexico, and China related to fentanyl trafficking. Collection of all IEEPA-based tariffs ceased effective February 24, 2026. …”see in full comparison
“After the Supreme Court’s ruling, the Trump Administration implemented various tariffs, invoking other statutory authorities. On February 20, 2026, President Trump imposed a 10% ad valorem import surcharge under Section 122 of the Trade Act of 1974 that became effective on February 24, 2026. That tariff was limited by statute to 150 days and expired on July 24, 2026. After an accelerated investigation under Section 301 of the Trade Act of 1974, targeting forced labor practices across dozens of economies, the U.S. …”see in full comparison
“On February 20, 2026, the U.S. Supreme Court ruled in Learning Resources, Inc. v. Trump that the International Emergency Economic Powers Act ("IEEPA") does not authorize the President to impose tariffs. The Court only ruled on IEEPA tariffs and did not invalidate or address tariffs imposed under other statutory authorities. Following the ruling, the U.S. Court of International Trade issued an order directing U.S. Customs and Border Protection (“CBP”) to formalize a process for refunds. …”see in full comparison
“On July 1, 2025, USDOC initiated an investigation under Section 232 of the Trade Expansion Act of 1962 into the effects on national security of imports of polysilicon and its derivatives. USDOC's report has been transmitted to the President, and a determination as to whether to impose tariffs, quotas, or other import restrictions remains pending.”see in full comparison
Full comparison: every changed paragraph (88)
changes in the global trade environment, including the continuation or imposition of import tariffs or other import restrictions; geopolitical, macroeconomic and other market conditions unrelated to our operating performance including but not limited to a pandemic, the Russia-Ukraine war, attacks on shipping in the Red Sea,Sea and Strait of Hormuz, conflict in the Middle East (including, but not limited to, the war in Iran), changing trade policies, inflation and interest rates; our ability to convert our orders in backlog into revenue; the reduction, elimination or expiration, or our failure to optimize the benefits of government incentives for, or regulations mandating the use of, renewable energy and solar energy, particularly in relation to our competitors, which could reduce demand for solar energy systems; failure to, or incurrence of significant costs in order to, obtain, maintain, protect, defend or enforce, our intellectual property and other proprietary rights; delays in construction projects and any failure to manage our inventory; significant changes in the cost of raw materials; disruptions to transportation and logistics, including increases in shipping costs; defects or performance problems in our products, which could result in loss of customers, reputational damage and decreased revenue; delays, disruptions or quality control problems in our product development operations; the development, deployment and commercialization of new products, including DuraTrack D2STM, OmniTrack 2.0, the 60 degree variant of DuraTrack, and our ARRAY AtlasTM suite of foundation-to-tracker solutions; our ability to retain our key personnel or failure to attract additional qualified personnel; additional business, financial, regulatory and competitive risks due to our continued planned expansion into new markets; cybersecurity or other data incidents, including unauthorized disclosure of personal or sensitive data or theft of confidential information and the use of artificial intelligence by cyber threat actors; a failure to maintain an effective system of integrated internal controls over financial reporting, which may impair our ability to report our financial results accurately; our substantial indebtedness, risks related to actual or threatened public health epidemics, pandemics, outbreaks or crises; changes to laws and regulations, including changes to tax laws and regulations, that are applied adversely to us or our customers; our ability to complete the acquisition of Affordable Wire Management, LLC (“AWM”) on the anticipated terms and timetable, including the possibility that closing conditions may not be satisfied or waived; our ability to successfully integrate APA Solar, LLC (“APA”) and AWM into our existing operations andoperations, realize the anticipated benefits or synergies of the acquisitionacquisitions of APA and AWM and achieve strategic and other objectives relating to the acquisitions; risks related to any unforeseen liabilities of AWM; and other factors listed and described in more detail in the section captioned “Risk Factors” in this Quarterly Report, our 2025 Annual Report, and our other documents on file with the SEC.
Trackers move solar panels throughout the day to maintain an optimal orientation to the sun, which significantly increases energy production. Solar energy projects that use trackers typically generate more energy and deliver a lower levelized cost of energy than projects that use “fixed tilt” mounting systems, which do not move. Hybrid sites utilizing trackers and fixed-tilt can be utilized to optimize productivity based on the topography, geography, and environment. The vast majority of ground mounted solar systems in the U.S. use trackers.
Hybrid sites utilizing trackers and fixed-tilt can be utilized to optimize productivity based on the topography, geography, and environment. The vast majority of ground mounted solar systems in the U.S. use trackers.
In May 2026, we introduced DuraTrack D2S,D2S™, which is our next-generation dual-row tracker designed for key international markets, which combines patented passive wind stow technology, the terrain adaptability of OmniTrack®, and optimized control through SmarTrack® into a single flexible platform. In July 2026, we introduced Atlas™, a new suite of foundation-to-tracker solutions designed exclusively for ARRAY trackers and APA foundations to enhance their technical interoperability.
Our corporate headquarters are located in Albuquerque, New Mexico. We sell our products to solar developers, independent power producers, utilities, and engineering, procurement and construction companies (“EPCs”) that build solar energy projects, often under master supply agreements or multi-year procurement contracts. During the threesix months ended MarchJune 31,30, 2026, we derived 95%94% and 5%6% of our revenues from customers in the U.S. and the rest of the world, respectively. From the founding of Array through MarchJune 31,30, 2026, we have shipped approximately 99102 gigawatts of trackers to customers worldwide.
On August 14, 2025 (the “Closing Date”), the Company, through its indirect wholly owned subsidiary STINorland USA, Inc., a California corporation (“APA Buyer”), completed the acquisition of 100% of the issued and outstanding equity interests of APA (such acquisition, the “APA Acquisition”), pursuant to the terms of the equity purchase agreement, dated as of June 17, 2025, by and among the Company, APA Buyer, APA, SunHoldings, LLC, an Ohio limited liability company (“APA Seller”) and the guarantors party thereto (as amended, the “APA Purchase Agreement”). The cash paid as of the Closing Date was $159.9 million, net of $10.1 million in preliminary and customary purchase price adjustments, which includes $6.2 million to retire debt. For U.S. GAAP purposes, the aggregate cash consideration paid was approximately $166.1 million, subject to final post-closing adjustment. We expect to finalize customary post-closing adjustments by JuneAugust 2026. The APA Purchase Agreement also includes an earnout provision estimated to have a fair value of approximately $19.3 million as of the Closing Date (the “Earnout Consideration”), which is included in the purchase consideration, under which the APA Seller may receive shares of Company common stock, or equivalent cash value at the Buyer’sCompany’s discretion, based upon APA’s achievement of certain financial performance targets during the three-year period ending on September 30, 2028. As a result, the purchase consideration for the APA Acquisition totaled approximately $185.4 million. Subject to the terms and conditions set forth in the APA Purchase Agreement, the Company has also agreed to pay aggregate deferred purchase price consideration of approximately $40.0 million payable in three installments over a two-year period based on service within five business days after the first and second anniversaries from the Closing Date and as set forth in Note 3 - Acquisition (the “Deferred Consideration”). Each of the Earnout Consideration and Deferred Consideration are described in more detail below. The Company is currently finalizing the valuation of the acquired assets and liabilities and assessing the related accounting impacts.
Each of the Earnout Consideration and Deferred Consideration are described in more detail below. The Company is currently finalizing the valuation of the acquired assets and liabilities and assessing the related accounting impacts.
The amounts recorded as of MarchJune 31,30, 2026 are preliminary, as the Company is finalizing working capital, post-closing, and other customary adjustments. These preliminary estimates are subject to change within the measurement period (defined as the twelve months following the Closing Date) and related accounting adjustments may be materially different, as the Company obtains additional information on these matters and as additional information is made known during the post-acquisition measurement period. As a result of further refining its estimates and assumptions since the date of the acquisition, the Company recorded measurement period adjustments to the initial opening balance sheet. There were no measurement period adjustments materially impacting earnings that would have been recorded in previous reporting periods if the adjustments had been recognized as of the acquisition date.
Expenses related to these operating lease agreements are allocated based on usage to Cost of product and service revenue or General and administrative expenses in the consolidated statements of operations. Total costs related to these operating lease agreements were $0.7 million and $1.4 million for the three and six months ended MarchJune 31,30, 2026.2026, respectively.
2.875% Convertible Senior Notes due 2031
On June 27, 2025, we completed a private placement of $345 million in aggregate principal amount of 2.875% Convertible Senior Notes due 2031 (the “2031 Convertible Notes”), resulting in net proceeds of $334.6 million after deducting initial purchasers’ discounts and offering expenses. The 2031 Convertible Notes were issued pursuant to an indenture, dated June 27, 2025, between the Company and U.S. Bank Trust Company, National Association, as trustee.
The 2031 Convertible Notes are senior unsecured obligations of the Company and will mature on July 1, 2031, unless earlier converted redeemed or repurchased. Interest is payable semiannually in arrears at a rate of 2.875% per year on January 1 and July 1 of each year, beginning on January 1, 2026.
Proposed Business Combination
On July 16, 2026, the Company and STINorland USA, Inc., a California corporation and an indirect wholly-owned subsidiary of the Company (the “AWM Buyer”), entered into an equity purchase agreement (the “AWM Purchase Agreement”) with Affordable Wire Management, LLC, a Delaware limited liability company (“AWM”), DS Equity Holdings LLC, a Delaware limited liability company, Scott R. Rand and Daniel R. Smith, pursuant to which the AWM Buyer will acquire all of the issued and outstanding equity interests of AWM, a company that designs, manufactures, markets and sells wire management products for the utility scale photovoltaic or battery storage system industries (the “AWM Transaction”).
Under the terms of the AWM Purchase Agreement, the AWM Buyer has agreed to pay a base purchase price of $153.0 million, plus performance-based earn-out payments of up to $40.0 million and up to $10.0 million of deferred payments to Scott R. Rand and Daniel R. Smith contingent on their continued employment.
The AWM Transaction is expected to close in the third quarter of 2026, subject to receiving any required regulatory approvals and the satisfaction of other customary closing conditions.
We incur research and development (“R&D”) costs during our process of researching and developing new products and significant enhancements to existing products. R&D costs consist primarily of personnel-related costs associated with our internal engineers, third-party consultants, materials and overhead. We expense these costs as incurred prior to a respective product being ready for commercial production. R&D expense was $3.0$5.0 million and $2.4$2.5 million during the three months ended MarchJune 31,30, 2026 and 2025, respectivelyrespectively, and $8.0 million and $4.9 million during the six months ended June 30, 2026 and 2025, respectively.
•The U.S. interest rate environment. We have had customers delay planned installations or look to renegotiate power purchase agreements (“PPAs”) to improve project returns based on various rate environments. For example, in anticipation of interest rate reductions and more favorable project financing conditions later in 2024, some customers delayed installations. While the Federal Reserve began lowering interest rates in the second half of 2024, the timing and impact of subsequent rate adjustments during 2025 and 2026 continued to create additional considerations for our customers, and there are varying outlooks on whether additional rate cuts may occur. Customers must weigh this uncertainty in conjunction with other macroeconomic factors when assessing the returns and timing for relevant projects.
•Macroeconomic factors. There hashad been a rapid depreciation of the Brazilian Real in conjunctionprior withperiods; existing pricing pressures on energyhowever, in 2026 there has been significant appreciation of the Brazilian market.Real Duecompared to thesethe dynamics,U.S. Dollar. Exchange rate volatility can have a significant impact on the economic cases for the power purchase agreements, or PPAs,PPAs for many solar projects have become less attractive for our customers. Many of the developers in Brazil of these projects continue to signal delays as they renegotiate the pricing of these PPAs.projects. In addition, our results will also be impacted by tax incentives we can recognize, for example the Brazil value-added tax benefit, Imposto sobre Circulação de Mercadorias e Servicos (“ICMS”),Servicos, which will be fully phased out in 2033. As a result, we are focused on reducing costs and better aligning our organization, including the size thereof, in Brazil with the current market conditions.
•Local permitting. If our customers cannot receive permittingpermits for their projects, they are unable to begin and ultimately complete them in a timely manner. A dramatic increase in solar and battery storage sites has increased the average permitting time in many geographies in which our customers operate.
While solar power is cost-competitive with conventional forms of generation in many U.S. states even without the ITC,Federal Investment Tax Credit (“ITC”), we believe previous step-downs in the ITC in past years have influenced the timing and quantity of some customers’ orders. On July 4, 2025, President Trump signed into law the OBBB, which includes changes to the energy tax credits. Specifically, the solar ITC now terminates for facilities that are placed in service after December 31, 2027, but that termination does not apply if the taxpayer begins construction on the facility before July 4, 2026. In addition, the OBBB imposes new foreign entity of concern limitations on the ITC before it expires, which could impact the ability of solar facilities to claim the ITC. Specifically, taxpayers cannot claim the credit in taxable years beginning after enactment of the OBBB if they are prohibited foreign entities (which are generally entities that are formed in or controlled by covered nations, including China, Russia, Iran, and North Korea, as well as entities determined to be under effective control as a result of contracts entered into with such entities). The credit is also disallowed for solar facilities that begin construction after December 31, 2025 that receive material assistance from a prohibited foreign entity. On February 13, 2026, guidance from the U.S. Department of the Treasury guidance(“Treasury”) was released clarifying methods for calculating material assistance from a prohibited foreign entity and requesting comments.
On August 15, 2025, Treasury and the Internal Revenue Service (the “IRS”) issued Notice 2025-42 consistent with the executive order, which eliminates the 5% safe harbor for utility-scale solar projects and only allows the physical work test to determine when a project begins construction. If solar developers are unable to satisfy the physical work test, our business, financial condition, and results of operations could be adversely affected.
The OBBB did not modify the phase-out of the section 45X credit or the definitions of eligible components relating to solar trackers; however, the OBBB did impose foreign entity of concern limitations on taxpayers claiming the section 45X credit. Specifically, taxpayers cannot claim the credit in taxable years beginning after enactment of the OBBB if they are prohibited foreign entities (which are generally entities that are formed in or controlled by covered nations, including China, Russia, Iran, and North Korea, as well as entities determined to be under effective control as a result of contracts entered into with such entities). The credit is also disallowed in taxable years beginning after enactment of the OBBB for eligible components that receive material assistance from a prohibited foreign entity. On February 13, 2026, Treasury guidance was released that further clarified methods for calculating material assistance, and included a request for comments by March 30, 2026. We anticipate forthcoming Treasury proposed rulerules will further clarify the potential impact ofthat the foreign entity of concern limitations may have for credits claimed in 2026 and future years.
In March 2026, the U.S.United States and Israel initiated military actions against targets in Iran. In response, Iran retaliated with a series of attacks on key infrastructure in neighboring countries across the Middle East. Further, Iran has committed to utilizing military intervention to close the Strait of Hormuz, which impacts a significant portion of global oil and natural gas supply. An escalation by the U.S.,United States, Israel, Iran, or other countries, and any retaliatory measures by the U.S.,United States, Israel, Iran, or other countries, as applicable, in response, such as broader attacks on regional infrastructure, may impact costs, reduce our sales and earnings, or otherwise have an adverse effect on our operations. For example, the disruption of the global oil supply through the Strait of Hormuz and the conflict between the U.S.United States and Iran have driven up commodity prices and increased inflationary pressures, potentially affecting our transportation, manufacturing, distribution and other costs. Furthermore, these events may also cause shipping delays, rerouted freight, port congestion, or higher logistics and insurance costs, which could disrupt the movement of, limit the availability of, or increase the cost of sourcing raw materials. We do not know the ultimate severity or duration of the conflict, but we are monitoring developments with respect to the ongoing military conflict with Iran including the impact on global commodity prices and potential shipping and logistics disruptions.
At various times since 2023, weWe have seen disruptions of container shipping traffic through the Red Sea create port congestion, especially in Asia, and cause many shipping companies to pause shipments through the Suez Canal and the Red Sea as a result of attacks against commercial vessels in the area, affecting transit times, capacity, and shipping costs for routes connecting the rest of the world with Asia. To address the persisting challenges arising from prolonged transit times, we have increased our local sourcing efforts where feasible within certain regions. These measures aim to reduce delays to get the product to project sites on time. There is still uncertainty on how long disruptions and the severity of their impact on our operations may last, but we continue to monitor such situations and evaluate our procurement and supply chain strategies, to reduce any negative impact on our business, financial condition, and results of operations.
On July 17, 2025, the Alliance for American Solar Manufacturing and Trade, a coalition of U.S.-based solar manufacturers, filed a petition with the U.S. Department of Commerce (“USDOC”) and U.S. International Trade Commission (“USITC”) seeking the imposition of antidumping and countervailing duty (“AD/CVD”) tariffs on imports of crystalline solar photovoltaic (“CSPV”) cells and modules from India, Indonesia, and Laos. In February 2026, USDOC issued preliminary affirmative CVD determinations and in April 2026, USDOC announced preliminary AD determinations. When combined, total preliminary AD/CVD rates now stand at approximately 234% for India, 121% to 178% for Indonesia, and 103% for Laos. Final CommerceUSDOC determinations are expected in July and September 2026, with a final injury determination from the ITC scheduled for October 2026 and issuance of duty orders, if affirmed, expected by late October 2026.
On May 12, 2026, a group of U.S. solar manufacturers filed a petition with USDOC for an anti-circumvention investigation regarding cells and modules from Ethiopia. On June 18, 2026, a group of U.S. solar manufacturers filed a petition with USDOC for an anti-circumvention investigation regarding imports of CSPV cells from Korea.
While we do not sell solar modules, the degree of our exposure is dependent on, among other things, the impact of the AD/CVD orders on the projects that are also intended to use our products, with such impact being largely out of our control. Successive rounds of AD/CVD and anti-circumvention actions have the potential to constrain the supply of solar cells and modules available to U.S. project developers, contribute to rising module prices, and create an increasingly complex procurement environment for our customers. To the extent that trade actions lead to project delays, cancellations, or reductions in the pace of U.S. solar installations, demand for our tracker systems could be adversely impacted.
Section 232 Polysilicon Investigation
On July 1, 2025, USDOC initiated an investigation under Section 232 of the Trade Expansion Act of 1962 into the effects on national security of imports of polysilicon and its derivatives. USDOC's report has been transmitted to the President, and a determination as to whether to impose tariffs, quotas, or other import restrictions remains pending.
While we do not manufacture or sell polysilicon, wafers, cells, or modules, the scope of any action taken could affect the cost and availability of solar components used on projects that are also intended to use our products. Any such action would be layered on top of existing AD/CVD orders, Section 301 tariffs, and pending anti-circumvention proceedings, further increasing the cost and complexity of procurement for U.S. project developers. To the extent that these measures lead to project delays, cancellations, or reductions in the pace of U.S. solar installations, demand for our tracker systems could be adversely impacted.
On February 20, 2026, the U.S. Supreme Court ruled in Learning Resources, Inc. v. Trump that the International Emergency Economic Powers Act ("IEEPA") does not authorize the President to impose tariffs. The Court only ruled on IEEPA tariffs and did not invalidate or address tariffs imposed under other statutory authorities. Following the ruling, the U.S. Court of International Trade issued an order directing U.S. Customs and Border Protection (“CBP”) to formalize a process for refunds. On April 20, 2026, CBP launched an online portal (“CAPE”) that can be used to submit IEEPA tariff refund requests and began issuing refunds in mid-May. All requests will be reviewed by CBP to determine validity prior to the issuance of refunds. Although, CAPE is now available for most entries and refunds are issuing, CBP and the Department of Justice appealed the Court of International Trade’s order as applied to a subset of entries. That appeal is currently pending. As the situation continues to develop, we will continue to monitor developments regarding any remaining unrefunded entries.
After the Supreme Court’s ruling, the Trump Administration implemented various tariffs, invoking other statutory authorities. On February 20, 2026, President Trump imposed a 10% ad valorem import surcharge under Section 122 of the Trade Act of 1974 that became effective on February 24, 2026. That tariff was limited by statute to 150 days and expired on July 24, 2026. After an accelerated investigation under Section 301 of the Trade Act of 1974, targeting forced labor practices across dozens of economies, the U.S. Trade Representative (“USTR”) announced new Section 301 tariffs targeting forced labor practices of 10% or 12.5% on the majority of imports from 59 countries and the European Union, effective July 24, 2026. Other Section 301 investigations that could lead to further tariffs remain ongoing.
On February 20, 2026, the U.S. Supreme Court ruled in Learning Resources, Inc. v. Trump that the International Emergency Economic Powers Act ("IEEPA") does not authorize the President to impose tariffs, invalidating the "Reciprocal Tariffs" imposed on imports from most U.S. trading partners as well as the tariffs on imports from Canada, Mexico, and China related to fentanyl trafficking. Collection of all IEEPA-based tariffs ceased effective February 24, 2026. The Trump Administration subsequently imposed a temporary 10% ad valorem import surcharge under Section 122 of the Trade Act of 1974, which is limited by statute to 150 days and is set to expire on July 24, 2026 absent congressional extension. The legality of the Section 122 tariffs is the subject of pending litigation. Concurrently, the U.S. Trade Representative (“USTR”) initiated two accelerated investigations under Section 301 of the Trade Act of 1974 targeting excess manufacturing capacity and forced labor practices across dozens of economies. Trump Administration officials have indicated that Section 301 investigations are intended to establish a more durable statutory basis for tariffs before the Section 122 authority expires. The ultimate scope, rate, and duration of tariffs that may be imposed under Section 301 or other authorities remain uncertain.
We are continuing to evaluate the potential impact of the imposition of the announced tariffs, the new classification and duty treatment scheme, and any additional or retaliatory tariffs, to our business and financial condition. While we do not believe that the tariffs announced by the U.S.United States in 2025 and through the date of filing this Quarterly Report on Form 10-Q in 2026 will have a material adverse effect upon our results of operations, financial condition, or liquidity, the actual impact of new tariffs is subject to a number of factors, including the effective date and duration of such tariffs, changes in the amount, scope and nature of the tariffs in the future, any countermeasures that the target countries may take and any mitigating actions that may become available.
On March 25, 2026, the USITC instituted a Section 337 investigation following a complaint by First Solar, Inc. alleging that imports of tunnel oxide passivated contact ("TOPCon") solar cells, modules, and panels infringe a U.S. patent. The complainant has requested a general exclusion order, which, if granted, could direct U.S. Customs and Border Protection to block imports of any TOPCon products found to infringe the asserted patent. TheAn USITC has not yet made anyinitial determination ondate the merits oris set afor targetJuly completion15, date.2027.
A majority of our revenue is recognized over time as work progresses, and for single performance obligations, we use an input measure, the cost-to-cost method, to determine progress. We review and update the contract related estimates on an ongoing basis and recognize adjustments for any project specific facts and circumstances that could impact the measurement of the extent of progress, such as the total costs to complete the contracts, under the cumulative catch-up method. Due to the relatively short duration of our outstanding performance obligations, and our ability to estimate the remaining costs to be incurred, which are substantially all material costs covered under our material supply agreements with our suppliers, we have not recorded any material catch-up adjustments for the periods presented that would have impacted revenues or EPSearnings per share related to revisions in our measurement of remaining progress of our performance obligations.
Cost of product and service revenue consists primarily of product costs, including raw materials, purchased components, net of any incentives or rebates earned from our suppliers, salaries, wages and benefits of manufacturing personnel, freight, tariffs, customer support, product warranty, amortization of developed technology and backlog, and depreciation of manufacturing and testing equipment. Our product costs are affected by: (i) the underlying cost of raw materials, including steel and aluminum,aluminum; (ii) component costs, including electric motors and gearboxes,gearboxes; (iii) technological innovation,innovation; and (iv) economies of scale and improvements in production processes and automation. We may experience disruptions to our supply chain and increased material and freight costs. When possible, we modify our production schedules and processes to mitigate the impact of these disruptions and cost increases on our margins. We do not currently hedge against changes in the price of our raw materials.
General and administrative expense consists primarily of salaries, benefits, and equity-based compensation related to our executive, sales, engineering, finance, human resources, information technology, and legal personnel, as well as travel, facility costs, marketing, provision for credit losses, professional fees, and third partythird-party services. The majority of our sales during the threesix months ended MarchJune 31,30, 2026 and 2025, were in the U.S.United States; however, we also have a sales presence in Spain, Brazil, and Australia. We intend to continue to expand our sales presence and marketing efforts to additional countries.
Contingent consideration consists of the changes in fair value of the TRA entered into with a former indirect stockholder, concurrent with the acquisition of Array Technologies Patent Holdings Co., LLC by ATI Investment Parent, LLC, as well as the Earnout Consideration associated with the APA Purchase Agreement. The TRA liability and Earnout Consideration were recorded at fair value and subsequent changes in the fair values are recognized in earnings. See Note 12 – Commitments and Contingencies for discussion and analysis of the TRA and Earnout Consideration.
Gain on extinguishment of debts, net consists of the difference between the cash paid and the carrying value of repurchased 2028 Convertible Notes and the fully repaid Term Loan Facility. We repurchased $100 million aggregate principal amount of the 2028 Convertible Notes and repaid the Term Loan Facility during the second quarter of 2025.
Comparison of the three and six months ended MarchJune 31,30, 2026 and 2025
Consolidated revenue decreased $79.0by $20.2 million, or 26%,6%, for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025, primarily driven by decreased revenue from STI Operations of 69%, partially offset by increased revenue from Array Legacy Operations of 2% and decreased revenue from STI Operations of 93%.10%.
Revenue from Array Legacy Operations, inclusive of incremental contributions from APA, increased by $4.2$28.4 million, or 2%,10%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025, primarily driven by an increase of approximately 3%25% in ASPs, reflectingpartially priceoffset increasesby ata the12% timedecrease whenin revenue contracts were executed.volume.
Revenue from STI Operations decreased by $83.1$48.6 million, or 93%69% for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. The decrease was primarily driven by a decrease of approximately 96%60% in volume dueand toa macroeconomicdecrease issues.of approximately 26% in ASPs.
Consolidated revenue decreased $99.1 million, or 15%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily driven by decreased revenue from STI Operations of 83%, partially offset by increased revenue from Array Legacy Operations of 6%.
Revenue from Array Legacy Operations, inclusive of incremental contributions from APA, increased by $32.6 million, or 6%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily driven by an increase of approximately 15% in ASPs, partially offset by a 7% reduction in volume.
Revenue from STI Operations decreased by $131.7 million, or 83% for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease was primarily driven by a decrease of approximately 82% in volume, as well as an approximately 4% reduction in ASPs.
Consolidated cost of revenue decreased by $65.5$22.7 million, or 29%,9%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025, in line with lower volume.
Consolidated gross profit decreasedincreased by $13.4$2.5 million, or 18%,3%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. Gross margin increased to 28.2%29.1% for the three months ended MarchJune 31,30, 2026, as compared to 25.3%26.8% during the same period in the prior year.
Array Legacy Operations gross profit, inclusive of incremental contributions from APA, decreasedincreased by $0.4$14.5 million, or 1%,17%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025, while gross margin decreasedincreased to 30.0%30.7% from 30.8%28.8% for the three months ended MarchJune 31,30, 2026 and 2025, respectively. The decreaseincrease in gross margin was driven by a 4%25% increase in cost per watt,ASPs, partially offset by a 3%21% increase in average selling prices. The increase in cost per watt was attributable to 9% higher costs, partially offset by a 3% one-time incremental 45x benefit and 2% tariff relief.CPW.
STI Operations gross profit decreased by $13.0$12.0 million, or 121%,91%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. Gross margin for STI Operations decreased to (37.4)%5.1% from 12.1%18.6% for the three months ended MarchJune 31,30, 2026 and 2025, respectively, driven primarilyby a 26% decrease in ASPs, partially offset by ana increased11% costdecrease perin watt on lower volumes.CPW.
Consolidated cost of revenue decreased by $88.2 million, or 18%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, in line with lower volume.
Consolidated gross profit decreased by $10.9 million, or 6%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. Gross margin increased to 28.8% for the six months ended June 30, 2026, as compared to 26.1% during the same period in the prior year.
Array Legacy Operations gross profit, inclusive of incremental contributions from APA, increased by $14.1 million, or 9%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, while gross margin increased to 30.5% from 29.6% for the six months ended June 30, 2026 and 2025, respectively. The increase in gross margin was driven by a 15% increase in ASPs, partially offset by a 14% increase in CPW.
STI Operations gross profit decreased by $25.0 million, or 105%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. Gross margin for STI Operations decreased to (4.1)% from 15.0% for the six months ended June 30, 2026 and 2025, respectively, driven primarily by a 4% decrease in ASPs combined with a 20% increase in CPW.
Consolidated general and administrative expenses, inclusive of APA, increased by $6.5$9.4 million, or 15%,21%, and $15.8 million, or 18%, for the three and six months ended June 30, 2026, respectively, compared to the three and six months ended June 30, 2025, respectively. The increase during the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. The increase2025 was primarily due to increasesan increase of $2.7$9.3 million from personnel-related expenses. The increase during the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was due primarily to an increase of $16.9 million from personnel-related expenses and $5.0service-related millionexpenses inof acquisition-related$2.8 deferred compensation,million, partially offset by areductions decreaseprimarily related to bad debt expense of $1.3$1.9 million inand legal and professional services.expenses of $1.6 million.
Change in the fair value of contingent consideration, inclusive of APA, resulted in a loss of $2.3 million and a gain of $0.1 million for the three and six months ended June 30, 2026, respectively, compared to the three and six months ended June 30, 2025, respectively. The incremental loss recognized during the three months ended June 30, 2026 compared to the three months ended June 30, 2025 was primarily driven by an increase of $2.0 million in the fair value of the earnout liability, which impacts only the three months ended June 30, 2026 due to its recognition in the third quarter of 2025, along with fair value remeasurements of the TRA liability. The incremental gain during the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was driven by a decrease of $0.7 million in the fair value of the earnout liability during the six months ended June 30, 2026, along with fair value measurements of the TRA liability.
Change in the fair value of contingent consideration, inclusive of APA, resulted in a gain of $2.4 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily driven by a $0.3 million increase in the fair value of the TRA liability, which was more than offset by a $2.7 million decrease in the fair value of the Earnout Consideration.
Consolidated depreciation and amortization expense, inclusive of APA, increased by $2.7$2.4 million, or 51%,43%, and $5.2 million, or 47% for the three and six months ended MarchJune 31,30, 20262026, respectively, compared to the three and six months ended MarchJune 31,30, 2025.2025, respectively. The increase was primarily due to $2.4 million and $4.7 million of incremental depreciation and amortization contributed by APA for the three and six months ended MarchJune 31,30, 2026.2026, respectively.
ARRY insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-24 | Hostetler Kevin G. |
Option exercise | 213,070 | — | — |
| 2026-09-24 | Hostetler Kevin G. |
Shares withheld for tax | 89,170 | $3.93 | $350.4K |
| 2026-09-24 | Zhu James |
Option exercise | 23,385 | — | — |
| 2026-09-24 | Zhu James |
Shares withheld for tax | 6,279 | $3.93 | $24.7K |
| 2026-09-24 | Collins Terrance L |
Shares withheld for tax | 8,955 | $3.93 | $35.2K |
| 2026-09-24 | Collins Terrance L |
Option exercise | 32,739 | — | — |
| 2026-09-24 | Manning Neil |
Shares withheld for tax | 10,466 | $3.93 | $41.1K |
| 2026-09-24 | Manning Neil |
Option exercise | 38,976 | — | — |
| 2026-05-19 | Schmid Gerrard |
Option exercise | 22,164 | — | — |
| 2026-05-19 | Jokinen Tracy C |
Option exercise | 22,164 | — | — |
| 2026-05-19 | Iyengar Jayanthi |
Option exercise | 22,164 | — | — |
| 2026-05-19 | Forth John Bradford |
Option exercise | 22,164 | — | — |
| 2026-05-19 | Ashford Orlando D |
Option exercise | 22,164 | — | — |
| 2026-05-19 | Alstead Troy |
Option exercise | 22,164 | — | — |
Well-known investors holding ARRY (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| D. E. Shaw & Co. | 2026-06-30 | 0 | $40.9M | 0.03% | No change |
| Oaktree Capital Management (Howard Marks) | 2026-06-30 | 0 | $31.6M | 0.6% | No change |
| D. E. Shaw & Co. | 2026-06-30 | 0 | $14.2M | 0.01% | New position |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 0 | $11.2M | 0.02% | No change |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 912,850 | $6.6M | — | Sold out |
| Millennium Management (Israel Englander) | 2026-06-30 | 0 | $5.6M | 0.0% | No change |
| D. E. Shaw & Co. | 2026-06-30 | 424,092 | $3.1M | 0.0% | Added 37% |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 340,466 | $2.5M | 0.0% | Added 26% |
| PRIMECAP Management | 2026-06-30 | 313,300 | $2.3M | 0.0% | No change |
| Soros Fund Management | 2026-06-30 | 275,286 | $2.0M | — | Sold out |
| Two Sigma Investments | 2026-06-30 | 145,967 | $1.1M | 0.0% | Reduced 76% |
| Gotham Asset Management (Joel Greenblatt) | 2026-06-30 | 129,326 | $958.3K | 0.0% | No change |
| Millennium Management (Israel Englander) | 2026-06-30 | 0 | $746.7K | 0.0% | New position |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 87,511 | $648.5K | 0.0% | Reduced 65% |
| Millennium Management (Israel Englander) | 2026-06-30 | 40,390 | $299.3K | 0.0% | Reduced 88% |