Array Technologies, Inc.

2026 and 2027 projects associated with our sole remaining legacy fixed-priced VCA. This effort resulted in an improved higher margin order book with a more diverse product mix. Excluding the legacy VCA project reconfiguring noted, our gross new bookings were approximately one times booked to bill and our customer mix continues to improve. Our direct engagement with utilities, developers, and independent power producers or IPPs pay dividends as the amount of our business with these tier one customers has accelerated. We continue to add new customers to our order book as well, and we remain committed to deepening our collaboration and relationships with the critical decision makers on solar projects. As of quarter end, roughly half of our order book now represents business directly with utilities, IPPs, and developers, several of which are new customers to array. A clear reflection of our strengthening the front end of our business and our commitment to deepening the collaboration and relationships with these critical decision makers. On the product mix front, we are excited by the accelerated market adoption of our new products, and as of today, our Omnitrack and Skylink new products now constitute more than 35% of our order book. We expect the traction of these products to continue as customers look to build solar sites on increasingly difficult terrains. Additionally, our team achieved a significant milestone through the booking of our first project for our Hale XP platform, our most advanced tracker designed for extreme weather events. We're pleased with the initial customer reception for this groundbreaking offering following its launch in May, and Neil will discuss more on its value and relevant use cases later in the call. Turning to slide six, I want to reiterate the strategic rationale and value we expect from our acquisition of APA solar. Upon consummation, this deal will mark our first step in expanding our product portfolio beyond the core tracker components and positions array to unlock significant value for our customers and shareholders. We believe engineered foundation solutions will continue to grow in importance for utility scale solar projects. APA's ability to build projects in all regions and within all types of soil conditions, and to do so with traditional and readily available construction equipment, paired with arrays existing suite of products designed to address various terrains, irregular site boundaries, and harsh weather conditions makes us uniquely positioned as a best in class partner to address our customers evolving project needs. This acquisition also allows for additional diversification into fixed tilt systems, which will increase our total addressable market and further differentiates our portfolio. Hybrid utility scale projects or projects utilizing both tracking and fixed tilt infrastructure are becoming more commonplace, and fixed tilt is also uniquely positioned to support both data center growth and manufacturing on-shoring trends. Finally, the benefits of this deal will be notable. The attractive valuation, expectation of being EPS accretive in its first year, inherent tax advantages, and significant opportunity for bilateral commercial synergies leaves us confident this acquisition will deliver great value for our stakeholders. Turning to slide seven, I want to highlight a few of the near-term challenges our customers and the industry are facing and what we are doing as an organization to position ourselves for success. On July 4th, the One Big Beautiful bill was officially signed into law and with its passage brought some significant changes for utility scale solar tax credits. Instead of a phase down of the investment in production tax credits, solar projects now must either commence construction on or before July 4th, 2026, or be placed in service on or before December 31, 2027 to be eligible. Additionally, the Foreign Entity of Concern, or FIAC, restrictions apply for projects beginning construction in 2026, but additional clarifications from the Treasury Department are still required. These two meaningful changes are presenting a more challenging environment for our customers to navigate as they reevaluate their project pipelines and associated timelines and returns. To address some of these new regulatory challenges, ARRAY will continue to drive enhanced customer engagement, operational excellence and resiliency, and continued expansion of our domestic supply chain. Another near-term headwind relates to the executive order issued regarding adjusting safe harbor criteria. This order initiated a process for potential changes in safe harbor rules by mid-August, which creates additional uncertainty for customers until further guidance is issued. While the industry awaits such guidance on safe harbor criteria, ARRAY has sharpened its focus on compliance, efficiency and customer needs to ensure that we are ready to support a potential acceleration of safe harbor tracker sales. We proactively launched a dedicated cross-functional team that has refined our commercial safe harbor offerings and streamlined the proposal process so that we are ready to address a potential uplift in demand. In addition to our domestic content advantage, ARRAY's differentiated architecture also lends itself well to safe harbor strategies, as it does not require pre-drilling into the torque tube for specific module selections. Our IP-protected design allows us to readily shift between module brands, versions and dimensions with our highly adaptable and -to-install clamp offerings. Optionality is key in this regulatory environment and our innovative suite of product offerings are well-suited to support our customer needs. Tariffs and commodity pressures are also impacting tracker input costs. We've taken proactive steps to mitigate these effects, including further increasing our domestic supply base, placing strategic forward buys of steel and ensuring our commercial contract structures allow for tariff cost recovery where possible. Finally, with the changes to the regulatory environment the industry is now facing, we expect further industry consolidation will start to take place. Developers and EPCs are increasingly looking for integrated solutions that reduce complexity, mitigate risk and improve project timelines. Through our pending acquisition of APA and other internal product updates, our goal is to enhance our ability to deliver integrated, high-value solutions to our customers that produce significant value over the life of a solar project. I'll now turn it over to Neil to discuss some important products, supply chain and commercial milestones.

Thanks, Kevin. Let's turn to slide eight. We launched our most advanced tracker, Hail XP in May. In recent years, damaging hail storms have increased in frequency, driving more and more insurance claims and higher costs for solar developers. Ray has been a leader in addressing these challenges with solutions such as our patented Hail Alert response capability and hosting the first several industry-focused insurance forums. To continue bringing innovative solutions to the market to address extreme weather impacts, the Ray product and engineering teams conducted deep research in collaboration with our customers to identify the most beneficial stow angle, optimizing the intersection between protecting modules and infrastructure costs. The result of that research is Hail XP with a stow angle of 77 degrees, what we believe is the optimal stow angle in the market. Hail XP is engineered upon the proven reliability of a Ray's DuraTrac platform and doesn't just protect from extreme weather risks, but is built to perform when it matters most. With direct input from our customers, industry insurers, engineering design and test partners, and purpose built to meet today's toughest climate challenges, Hail XP features include seamless integration with a Ray's patented SmartTrack automated Hail Alert response and passive windstow technologies. Ray's 77 degree stow capability with Hail XP moves modules to the optimal tilt position in either direction, regardless of wind conditions, to mitigate hail impact. Since our launch of Hail XP, market response has been fantastic. We provided numerous quotes to customers and booked our first Hail XP project in the Texas Hail Belt in the second quarter, with shipments planned in early 2026. The high costs related to extreme weather events continue to be a key factor in the economic modeling for projects, and Ray intends to remain at the forefront in this critical space. On to slide nine. I'm particularly proud to report that Ray has completed the supply chain and certification efforts to deliver a 100% domestic content tracker per table one of the IRA bill. To deliver this capability, Ray worked with key supply chain partners to establish new domestic production lines for certain components applicable to our door track and obitrack product platforms. As we announced earlier this week, we will be delivering a 200 megawatt AC, 100% domestic content tracker solution to NG for the Emerald Green Solar Project in Indiana starting in the third quarter of this year. Ray's longstanding domestic supply chain continues to be a source of reliability and continuity for our customers. I'd like to thank all the IRA team members involved for their contributions, reaching this important milestone. We're proud to continue expanding our domestic footprint and working with high quality suppliers across the United States. Onshore production, creating meaningful employment, investing in solar manufacturing capabilities is critical for the future of our industry and our national security, and Ray is proud to be a longstanding leader in this effort. You've heard us share numerous updates on our continued commercial engagement activities and happy to share news on our most recent event in Chicago during July. Our Ray Days program first started in early 2024, continues to be extremely popular with developers, EPCs, and other industry stakeholders. It gives us the forum to share comprehensive updates on the Ray's development roadmap and solicit interactive feedback on areas of opportunity and improvement. Actioning prior feedback, we decided to target a highly technical audience for our most recent event and the response was tremendous. We had over 70 engineers attend from all portions of the solar value chain for our largest Ray Days event to date. We firmly believe that customer engagement, input, and feedback is an essential part of our success. And Ray is pleased to present innovative formats and knowledge sharing mediums to industry stakeholders, driving collective industry improvement. With that, I'll now turn it over to Keith to provide more details on our second quarter results. Keith? Thank

you, Neil. Good afternoon. My commentary on our second quarter financial results begin on slide 11. We had a strong quarter. Revenue was $362 million, representing growth of 42% from the prior year and 20% sequentially. Our growth drivers were similar for both comparative periods, increased volume shift, and business mix improvement towards legacy API. Sequentially, consolidated ASPs were higher, driven by higher international ASPs in our STI segment. Delivered volume, measured in megawatts of generation capacity, with a quarter increase by 52% over the prior year and up 13% sequentially, surpassing last quarter's achievement as the second largest quarter of volume shift since 2023. Year to date, -over-year volume growth was an

impressive 84%. In the second quarter, adjusted gross profit increased

12% -over-year to $101 million, an adjusted gross margin of 27.8%. When compared to the prior year, gross margins declined due to short-term commodity-driven pricing pressures, logistics-related costs, as we worked to optimally position inventory for our customers and approximately 100 basis points of time being related to DRAD from tariffs and other costs. As we transition to an environment with increased rates and breadth of tariffs, whether the tariff is recovered through an invoiced surcharge or included in the selling price, the net result for the portion of tariffs that are contractually recoverable will often be increased revenue paired with a corresponding increase in cost of goods sold. While the net result of recoverable tariffs can be neutral from a dollar perspective, we estimate the DRAG of the denominator math will burden our 2025 gross margins by over 50 basis points. Sequentially, adjusted gross margin improved by 130 basis points overcoming the DRAG from tariffs primarily due to a higher mix of domestic projects, a volume increase, volume-driven benefits from 45X, and no shipments in the quarter under our lower-margin legacy BCA. Total operating expenses of $51 million increased approximately $4 million from $46 million in the same period last year, partially driven by some one-time costs associated with the APA transaction. Adjusted SG&A was $38 million at .4% of revenues. This is an improvement of approximately 300 basis points in volume-driven operating leverage from the prior year. Adjusted EBITDA was $64 million representing an adjusted EBITDA margin of 17.5%. This compares to adjusted EBITDA of $55 million and adjusted EBITDA margin of .7% in the second quarter of 2024. Sequentially, adjusted EBITDA was $23 million higher with adjusted EBITDA margins improving approximately 410 basis points driven by the volume increase and the mix shift towards higher ASB domestic sales. Gap net income attributable to common stockholders in the second quarter was $28 million, up 138% compared to $12 million in the prior period. Additionally, net income in the second quarter increased $26 million sequentially from the first quarter of 2025. Our gap net income includes the benefit of the net gain on debt refinancing transactions executed in the quarter. Diluted income per share was $0.19 compared to the diluted income per share of $0.08 in the prior year. This improvement was partially driven by the approximately 20% discount capture gain we achieved on the repurchase of $100 million of our 2028 convertible notes. Adjusted net income was $39 million, up from $31 million in the second quarter of 2024. Adjusted diluted net income per share was $0.25 compared to $0.20 in the prior year and $0.13 in the first quarter. Net cash used for investing activities in the quarter was $7 million, primarily driven by the ongoing investment in our new Albuquerque manufacturing facility. Free cash flow for the period was $37 million compared to $2 million generated for the same period last year driven by working capital improvements. Slide 13 summarizes our leverage and liquidity position following the financing transactions completed this year. We ended the quarter with $377 million in total cash on hand and total liquidity about $500 million including availability under our undrawn revolver. In the quarter, we successfully executed debt capital market transactions that centered on refinancing near-term maturities. Net cash used in financing activities was $11 million, which included, among other items, the $345 million new convertible notes issued, $233 million to repay the term loan, and $78 million used to repurchase $100 million of face value of the existing 2028 convertible notes. We ended the quarter with net debt leverage ratio of 1.7 times and after the repayment of the term loan, we had no outstanding senior secured debt. Slide 14 is a brief recap of the updates to our capital structure. As I shared during my comments in the Q4 2024 earnings call in February, one of my initial priorities upon joining the array team was to assess our capital structure and allocation strategies. The objectives were to create operating runway and provide balance sheet flexibility with optionality to support strategic growth choices. Since then, we shared on the call last quarter that we successfully amended and extended our revolving credit facility in early May. During the quarter, we continued our capital structure focus, further optimizing the balance sheet and positioning ourselves with optionality for long-term value creation. We issued $345 million of new .875% convertible senior notes maturing in 2031. With the proceeds, we repaid the remaining $233 million of the outstanding balance of our terminal, which unlocked the full maturity extension of our revolving credit facility from mid-2027 to October 2028. We used $78 million to repurchase at a discount $100 million of principal of the 1% convertible senior notes due in 2028 generating meaningful shareholder value. Together, these financing activities extended our average debt maturity by approximately two years and improved the balance and profile of the maturities due in 2028 and 2031. Additionally, this reduced our annualized cash interest expense by $9 million. We also used $35 million from the proceeds to acquire cap calls on the new convertible notes, effectively elevating the conversion price of the new notes from $8.12 to $12.74 per share, providing important protection against dilution and aligning with our focus on prudent financial management. Overall, we have strengthened our capital structure, created flexibility for strategic options such as the APA solar acquisition. We expect to continue to generate strong and consistent cash flow driven by positive earnings. To sum up, we are more confident in our ability to remain agile with ample balance sheet flexibility to respond to both risks and opportunities. Let's shift our attention to slide 15 for our updated 2025 guidance, which does not include any benefit from the acquisition of APA, which is yet to close and remains subject to the satisfaction of various closing conditions. Given our strong performance for the first half and the high level of contracted deliveries for the remainder of 2025, we are raising our revenue outlook for the full year and increasing the midpoints of our profitability guidance. We expect continued booking momentum through the second half of 2025. After very positive actions taken on existing orders, our order book is currently $1.8 billion, which includes $645 million of remaining performance obligations. We now expect full year 2025 revenue within the range of $1.18 to $1.215 billion, increasing the midpoint of our range by nearly $100 million or 9%. Additionally, in the second half of the year, we expect a roughly $60-40 split in revenues between Q3 and Q4, reflecting our typical seasonality. We expect adjusted gross margin to be between 28% and 29%. This includes the negative impact of accounting for tariff pass-through and elevated inventory and product delivery costs. For adjusted GNA, we now expect a range of -$155 million primarily due to incremental investment in sales, customer excellence channels, and additional staffing to support 2026 growth initiatives. Adjusted EBITDA is expected to range between $185 and $200 million. Adjusted diluted earnings per share is forecasted to be in the range of $0.70. Free cash flow remains between $115 and $130 million in 2025 after capital expenditures, which is forecasted to remain in the range of -$35 million and primarily driven by project timing at our new Albuquerque facility. Our results and guidance reflect the strength of our strategy, our team, and our ability to perform in dynamic market conditions. Thank you for your time today. Now back to Kevin for

closing remarks. Thank you, Keith. To sum up, Q2 is a quarter of strong execution both commercially and operationally, exceeding expectations for both revenue and earnings performance. ARRAY is executing with discipline, scaling with purpose, and investing in the right areas to capture the opportunity ahead. We remain confident in our strategy, our team, and our ability to deliver long-term value for our shareholders. Thank you for your continued support, and we look forward to updating you again next quarter. With that, we will now open the call up for your questions. Operator?

Thank you. The floor is now open for questions. If you do have a question, please press star 1 on your telephone keypad at this time. If your question has been answered, you can remove yourself from the queue by pressing 1. So it's star 1 to ask a question. Please hold while we poll. And our first question comes from Mark Strath from JPMorgan. Go ahead, Mark.

Yes, good afternoon. Thank you very much for taking our questions. Kevin, I wanted to go back to slide 7. You call out some of the headwinds or kind of uncertainties, I guess, that your customers are facing at the moment. I know Keith mentioned that you are seeing kind of continued booking momentum in the second half of this year, but just kind of curious how we should think about kind of varying your term with everything that's going on. You know, obviously a lot of uncertainty in two queue as well. And in my opinion, you put up a good bookings number in two queues. So I'm just kind of curious if you can help us parse out kind of three queue bookings in particular, or if you're looking more kind of a rebound later this year when hopefully some of these headwinds are out of the way. Thank you.

Yeah, thanks for the question, Mark. So let me start by describing kind of how Q2 unfolded. As we expected, Q2 was fairly muted until the very last few weeks of the quarter where we saw a really good amount of acceleration in terms of bookings. And this is really about customers trying to get capacity locked in and get their programs locked in. I think what we're expecting as you go forward, based on what we have, is we have a lot of quotes and a lot of interest and less awards. So separate those two buckets in terms of people really converting the quotes and interest and even if we're told we're the likely winner of that project, holding back, giving the final award until there's real clarity moving forward under the rules and the new definition. So I think that's what we're going to expect to see. Lots of activity. Our customers are telling us their pipelines are as good as ever. And we're just really, really active. So it's just a matter of how much clarity can we receive in the next near tranche of clarity expected mid-August and then again some by the end of August and whether that clarity will be enough for customers to move forward in a full fashion and load. I think as it relates to safe harboring is a great example. I expect that question to come up relative to this. We are really, really active in customer dialogues relative to safe harboring. Internally, we formed a really outstanding team meeting daily. We've refined those materials for safe harboring for our customers. We've completed a tour of our major suppliers in North America to ensure they have a burst capacity if needed for safe harboring. But I think given still that we have the lack of clarity around the rules of safe harboring, I expect that to be more order flow in Q4 for delivery in H1 than it will be for delivery yet in Q4. So I think that's how we're seeing the order flow moving forward. We still continue to see orders flow in, but there's this pent up demand of orders waiting for this clarity before we see that whole wave flow through. But we feel pretty good about the ones we're in communication with at this point.

Okay, thank you, Kevin. And

then just a quick follow up.

Regarding the legacy fixed price VCA, can you just give us a bit more color on what the decoping and reconfiguring exactly means and how to think about the financial impact of that over the next couple of years?

Yeah, so I think first let's start with the financial impact over the next couple of years. It's very positive for us. So what you have is you have a legacy VCA, as you know, that was fixed price contract on very old, very, very low steel pricing that we really had no way to get out of despite evaluating it with external law firms and what have you. So we were fixed at incredibly low margin business and in many cases, business that we did not make a profit on. The challenge is this customer in particular had some projects slip. A few of them slipped out of the timeline that the fixed price VCA. Remember, we've talked openly about that expiring at the end of 26. So as some of these projects slipped from 26 to 27, they fell out of that very favorable pricing position and as such got repriced and became no longer really viable for this customer to move forward with. Secondarily, in working with this customer, we found that in order to optimize their programs going forward, they needed some additional say component trees and things that were also not covered under the previous negotiated VCA. As we modeled the new bills of materials, the margins went up substantially. So you have a positive margin impact in our backlog from two things. One, the cancellation of projects that were no longer viable at those low price points that would have been a 2027 impact and two repricing at kind of think of it as current market pricing. Some of the existing bills of materials that are needed to go forward at 2026. Look, the net of that is a reduction in backlog, but an increase in the backlog margin percentage and margin dollars. So we're actually very pleased with the fact that we work with this customer to get more predictable in terms of what they really will build. And obviously to get the pricing right

for what will build remaining in that order. Very much.

Yeah, thank you. And our next question comes from John Windham from go ahead, John.

Hey, perfect. Thanks for taking the questions. I was hoping if you could talk a little bit about, I know it's been a lot of focus on the US and policy, but any highlights you have on progress internationally. Appreciate it.

So, hey, John, it's Neil. I'll take that one. So, as we talked about in the prepared remarks, we had a really strong first half and international. So we feel good about that. Now, what we are seeing in certain markets also is some unevenness quarter to quarter on bookings. So we'll have a strong quarter followed by a softer quarter. So, you know, that's kind of the dynamic we're seeing, particularly as you look at one of our strong legacy markets in Brazil, where interest rates have now hit 15%, which is the highest since 2008. 2006 and that's not really causing projects to cancel, but they are pushing to the right from proceeding. So that macro environment economically, along with what had been a rainy season earlier in a year driving lower rates to the hydroelectric power coming onto the grid. Is this causing continues uncertainty in Brazil? And then in Europe, we're seeing you some of that unevenness I talked about. So now what we're doing about that obviously is continue to diversify our footprint with additional sales and applications, your resources in South America and other areas in Europe where we feel that the rate value proposition is particularly well received. So really focus on the markets where we think our product portfolio is best suited and where customers will appreciate the value that we bring to the table. So, you know, we're optimistic overall and international diversification efforts. And we'll see as some of our other markets recover over time. We're very bullish on how our diversification efforts will play out in the coming quarters.

Maybe if it's okay, I can sneak in a follow up question. Thanks for going through. I'm talking to slide 14 right now. You know, the obstacles coming into 2025 and how you've addressed them just on the capital structure. Any key sort of items on the to do list that you want people to be aware of.

Thank you for the question. Really good question. At the moment, we are very happy with the outcome of our capital structure and the work that we have done. We view the end result here as an opportunity to operate the business and execute our strategy over the next few years. The missing piece from this page in the capital structure is of course the preferred equity tranche. We continue to view that as reasonably priced long term capital in this interest rate environment. If the interest rate environment changes, then we can start to look at that differently because we're always trying to create more value for our shareholders. At the moment, with the first real maturity being in 2027, in 2028 now at this time, we're focused on executing over the next three years, rebuilding this business going forward and position ourselves as a strong player in the utility scale solar market.

Perfect. Thanks for taking the question.

Thank you. Our next question comes from Joseph Osha from Guggenheim Partners. Go ahead, Joseph.

Hi there. Thanks for taking the question. I just want to double check some math here. You did mention the book to bill of one. I know there are lots of puts and takes, but are you saying, leaving aside some of the adjustments to the backlog that you had, $360 million in new bookings this quarter? I just want to make sure I'm getting that right.

Yes, approximately.

Okay. Thank you. Setting that aside, we had a book bill that approximates one. Okay. Just checking to make sure I was putting those pieces together right. Which was pretty tall to be clear. I'm sorry? Given the backdrop or operator. Yes. Pretty good. Just following on that, Keith, in the past you said that you guys do some work looking at what's out there and assessing your competitive position. You were kind enough to share, when I was down there, some thoughts about what you think your market share is. Might you be willing to share some updated thoughts based on how the bookings are trending?

Look, because of the nature of this industry and the project nature of how things ship, everyone has puts and takes each quarter. But when you look at our business delivering 84% volume growth year to day, year over year, even if someone was to be very precise and ask us to remove whatever volume we thought pushed out in 2024, I think we would still be delivering very strong volume growth ahead of what the industry is deploying in terms of utility to scales. So, are being attached to the grid. So we are very comfortable with our win rate. We're very comfortable with our position and we continue to believe that when you measure across the cycle, we are doing far better than whatever the point in time measures were for 2024. And

I think what you have to just adding to that, if you look at the multiple quarter sequential growth, that's pretty significant at this point. We're continuing sequential growth quarter over quarter. Again, indicative of the market share recovery that we saw coming in our order book prior. So remember for multiple quarters now, we've been communicating to the market that on a true project by project basis, when we look at an order by order project by project in our order book, our win rate has been equal to or higher than our historical average market share. That still holds true. So hopefully that's helpful for you.

It is. Yeah. Thanks. Thanks very much for the details. Answer. Thank you. You're welcome.

Thank you. And our next question comes from Brian Lee from Goldman Sachs. Go ahead, Brian.

Hey, guys. Good afternoon. Thanks for taking the questions. I guess first one, just on the update, updated revenue outlook, is that all volume driven, you know, project timelines firming up here or is there any price embedded in there as well? I know you talked about price capture potentially in the second half. Wondering if you can update us on, you know, whether price has been a tailwind or is expected to be so, you know, maybe into 2026, if not, you know, showing up in the second half and then I'd follow up.

Hi, Brian. Thank you for the question in terms of the, the revenue guide upwards of moving the midpoint by 9%. I would say most of that is volume. So if I was to do a quick, you know, I would say 8020 of that is volume versus price. I think that we're seeing much more volume movement, project execution, scope increases than we're seeing price in 2025.

Okay, that's helpful. But there's some, some amount of price in there and I guess based on the book.

Some amount in there, given that, you know, the commodity steel and aluminum commodities have both moved up in the first part of 2025. We priced off those. So some Q4 deliveries will see that benefit. But I would say that most of what we're seeing that's driving the revenue outperformance is volume and engineered selling and scope increases.

That makes sense. That's helpful. Second question, just on the gross margins, you know, if we back into what's implied for the second half, it's sort of like a 30% plus or minus gross margin. And you guys were doing, you know, much more so in the mid twenties through the first half. I know even the 30% implied for the second half has some tariff embedded in there and then other things. So how should we think about kind of the run rate? I know there was some legacy stuff and mix related issues in the first half of the year. Is that all kind of behind you now with some of the de-scoping you mentioned earlier on the legacy VCA where this run rate in the second half is indicative of kind of, you know, the gross margin trend line we should be thinking you're going to be on heading into 2026. Just trying to parse out whether there's anything in the first half of this year that's repeating or that's all kind of behind you at this point. Thanks guys.

Question Brian. Look, we don't have any further shipments under the legacy VCA contract for the remainder of 2025. And as Kevin articulated earlier, we have had a very productive conversation with the customer where we've gone through and we've been able to improve the gross margins in that product, in that project portfolio. But that will hit more so in 2026 and 2027. So in terms of the run rate for implied by the guidance in terms of 29 to 30% for second half of 2025, I think we can model that going forward as the run rate for maybe the first half of next year until we get a chance to come back with a full guide on 2026. But we're comfortable that the guide we've given for the full year is within reach and we have a path to it. And also we're looking forward to the addition of APA a successful close and then we'll update the overall guidance at that point in time for the year.

I think if I could help just with one, one of the commentary on the gross margin is really about the tariffs that we talked about. And what you really saw in the tariffs is they kicked in more meaningfully after June 1st. So as we were obligated to pay those tariffs, there's a lag in time that that we take and we have to take. We've paid those tariffs. Now we have to look at those tariffs and those specific bills of materials that they apply to. Then we have to go back and build those customers. So part of what you saw there that we used in our commentary, the word transitory tariffs. There is a portion of those tariffs that we fully expect to recover as we get through the process of assigning the proportion of those inbound tariffs by bills of materials to our customers and then begin passing those through. But again, we were clear in our commentary about there's also a portion of the tariffs and Keith introduced us to that term today, denominator math on the call that when you pass through a tariff, we don't get to mark up the tariff at our standard gross margin. So there is this natural weight as you pass through tariffs on that gross margin. So we address that on the call as well. Because

you're passing through something at zero margins, right? But look, the reason I didn't touch tariffs today, because I'm reading on my phone here and India, I think today has been awarded the gift of another 25 percent tariffs. And so we have a fair bit of things that we source out of India. So now we have to change our modeling for that. And so it's a very dynamic environment. So what we believe when we publish this at this point in time is that the 28 to 29 percent is doable. Most of that pull down from the prior diet of 29 to 30 really is just denominator math. And so we do have some higher costs for logistics and positioning of inventory in warehousing, but the denominator math is a drag. And so we'll have to try to figure that out as we go forward.

Thank you. And our next question comes from Jim Pogathe from Bank of America. Go ahead. Your line is open.

Thank you for taking my question here. Mine is more focused on big picture. Kevin, can you talk a little bit about the project lead time that you're seeing today and any impact from the Department of Interior permitting use or is that too soon to see anything as yet?

Yeah, we haven't seen anything as of yet. Obviously, it's discussion point with our customers, but we've not had any impacts or impacts either positively or negatively yet. I think everyone's still waiting for the for the additional guidance and clarity.

Thank you.

And I should also note that a big part of the Department of Interior notification applies to federal lands. And it's clear that less than five percent of solar projects have anything to do with federal lands. That's very different if we were on the wind side of the business that has a much higher percentage that's on federal land. Solar does not utilize federal lands a whole lot. So just know that.

Thank you. And our next question comes from Philip Sign from Ross Capital Partner. Go ahead. Philip, your line is open.

Hi. Sorry about that. Thanks for taking the questions. You guys have had some of the bookings and one time VCA issues crop up over the recent quarters. I think Keith, you were just talking about you don't expect any more for the back half this year. I just want to ask a general question. To what degree are we fully past this? Do you expect, you know, not to have these issues beyond this year? And can we focus on net bookings and net book the bill ahead? Thanks.

I'm

not sure that

we can make a commitment that we will never have the bookings in this business as a project focused business. And so, you know, as important as delivering on projects are, you know, working and making the best of our order book and backlog is also part of the business. I think what we've done this quarter is really a net positive. So as a team, we inherited a large volume commitment agreement that maybe when it was signed, it was viewed very positively. But in the current commodity price environment, it was not. And whenever we shipped under it, we spent a lot of the earnings calls describing why the margins showed volatility or were down. So we decided that we should take a really good commercial look at it, look at the timetable, the window in which the contract runs, what projects can viable be executed and delivered in those contracts. And we had a very definitive conversation with a customer who recognized our positions. And we, yes, some things fell out, but that was simply a function of time. They could not execute within the time period. The things that they can execute, then we went through and reconfigured, updated the schematics, added products that weren't under the agreement, different margins and so forth. So in the net things, even though we were net down in terms of the gross dollars in the in the VCA, when we calculated the new margin, the whole book moved upwards. And I think we're in this with the margin dollars.

I think so a couple of things I'll add that outside of the proactive work that our team did to engage that customer and clean that up, we did not have any other debooking. Let me be clear on that. The second thing that we've taken a more conservative approach over the last several quarters of what we do add to the order book. So if we consider it risky or a higher likelihood of being debooked in the future, for example, some orders in Brazil that we may have been awarded the order, we may choose not to add that to the order book because internally we feel that's more risky. And until that firms up more on a broader basis, we're just simply not going to bring it into the order book in the first place. We'll keep it on the sidelines. So we've taken a much more conservative approach of what goes into the order book. And as you know, for many quarters now, we've been having much more diligent conversations with our customers to ensure that they have the required equipment, timeline, labor availability, all of the above. And we've been doing a lot of financing so that we diminish that debooking thing. So it's actually been much cleaner in the last several quarters. And this was one that I'm really thrilled that we proactively engage the customer. We are thrilled with the result. I think our investors will be thrilled with the result that the overall margin in our backlog just went up significantly.

Great. Very useful color. Thanks to both of that. Shifting to back to the EO, what do you guys expect to come from this based on your lawyers and so forth? Do you expect retroactivity to be off the table or is it a risk that you're closely following? And then depending on the different scenarios, what do you expect in terms of bookings following the EO August 18th? Maybe you touched on this a little bit earlier, but one. I just touched

on it a bit earlier, but I'm not going to fill. I'm not going to go and try to guess what's going to come out. Right. I think as you know, I'm very close to this executive committee of ACP getting briefed on this on a regular basis. But look, this is a really, really dynamic environment. Things are changing all the time. Lots of games, gamesmanship happening on the Hill. So I'm not going to put myself in the middle of that and try to guess at what's going to come out on the 18th. I think what we've been doing internally is focus on multiple different avenues and being prepared for any one of the scenarios that come out. We'll be able to be ready to support our customers needs. And that's been our focus is just continuing to control what we can as management and then be ready to react to any news that comes out in any avenue. And we've got multiple plans ready to do that. So

that's where I would leave that. Thanks, Kevin.

Thank you. And our next question comes from Colin Rush from Oppenheimer. Go ahead.

Hi there. This is Andre Adams on for Colin. Just to start, can you walk through how you're thinking about pricing opportunity given the new policy environment that we're in and appreciation and wholesale electricity prices?

Look, we don't pretend to be experts at PPA pricing. And, you know, we leave that up to the individual developers and IPPs. However, I will tell you that in our conversations with them, they seem fairly bullish on their abilities to pass through cost increases through higher PPA rates. They've continued to reiterate that to us over the past several months. So I'll leave that for them to opine on. And generally, when we feel in our business relative to pricing, obviously we have the pricing that we can drive through commodities. And one of the biggest levers we have for pricing is in new product development, where we're continuing to develop new products that are compelling and focused on our customers' economics and saving them money. More specifically, the OmniTrack, the Skylink, the Hail XP are all examples of where we're adding greater value to our customer. And that opens the availability for us to raise prices on those product lines versus the Duratrack, for example. So for us, getting a creative margin at a higher price is much more related to continually putting out new products that have a creative margin to the ones they're replacing. That's a big area

of focus for us.

Thank you. And our next question comes from Nadeed Madhuli from Mizzoulo. Go ahead. Thanks

for

taking the questions here. I just want to add on the OmniTrack and APA being the bigger mix going forward. How do we think about the margins

compared to the rest of the business here, specifically for the US?

Yeah, but, he, we won't get into individual product margins, but suffice to say that as the OmniTrack hits its stride and we begin shipping and refining that, the bill of material as we continue to develop that. So start with saying we gave a huge signal on the call that OmniTrack and Skylink now combine already for 35% of our order book. That is significant traction, significant growth on two new products that were recently launched. So we're very, very excited about that. We'll continue to optimize the OmniTrack bill of material and ensure that it's an accretive product to the portfolio. So we feel very good about that for both products and our ability to price that because remember what we're saving is millions of dollars of grading for our customers. As it relates to the OmniTrack and its ability to combine with the APA, the APA foundations, they have a great amount of flexibility in terms of terrain following in themselves. And when you combine theirs with ours on OmniTrack, we will have by far a leading flexibility in the marketplace. I don't think there's any other product that's going to be able to touch the amount of flexibility in terrain, either if you want to design a site to be perfectly level on uneven terrain or to follow the terrain. We have the ability in combining both products to truly master that entire segment of terrain

following systems. Okay, thank you.

Thank you. And our next question comes from Dylan Nassanio from Wolf Research. Go ahead. Your line is open.

Hi. Thanks for taking my question. So just on kind of the two-queue revenue outperformance, it sounds like you were assuming some kind of regulatory-related project delays that didn't show up. Can you just kind of give us a sense on what's embedded in the assumptions for the annual guidance? Are you assuming other delays? And then I think previously on a previous call, you had said that there was no kind of additional go-get business embedded in guidance. Is that still the case?

Yeah, let me take the back end of that first. Yeah. So for multiple quarters, we've had no remaining go-get to get to the midpoint of guidance. Although we increased the midpoint of guidance, that statement is still true even now at the higher guidance level. We never intimated that we expected a bunch of push-outs out of Q2, and that was in our numbers. That was not the case. What you saw in the Q2 overdrive was simply our operational ability to accelerate for customers tied with customers' desire or willingness to accelerate projects. So they came to us and asked for acceleration. We were operationally in a position to do so, and we executed.

That's it. Okay. Thank you. Dylan, I think what you might have

heard was how we viewed the bookings environment in Q2. We thought it was going to be clouded by the regulatory environment, and that it may be softer than we saw. But in the end, as Kevin articulated, we were very happy with how it ended for us, despite the regulatory environment, despite the executive order that extended the period on the 1 dB related to solar out to August 16, that we were able to achieve close to a -to-one -to-bill ratio when adjusted for all the de-scoping.

Thank you. And our last question comes from Zikran Bagri from Citi. Go ahead.

Good evening, everyone. I wanted to ask the market share question slightly differently. I understand ascertaining market share quarter to quarter due to the nature of the business is somewhat difficult. But when you look at the bookings, are these bookings, all of them have happened because of the inability of the developer to execute on the project? Or have you seen in some of these new bookings that they've switched providers for any reason? If you can share any thoughts that you've seen, like all these projects getting canceled, or there have been some projects that have been buried or executed on with a different company. Thank you.

Go ahead. So, Vikram, I'll start and then I'll turn it over to Kevin. So I can say definitively that from 2024, when the company spoke about the push-outs, we didn't lose any orders to anyone or any other company or competitor. So if you look at the volume of what we've shipped being up 84% year over year, yes, some of that may actually does include things that pushed from 2024. But at the same time, we know that based on our win rate project by project, we are doing well. When it comes to the de-scoping with the reconfiguration exercise we went through with this particular customer, we know that the things that came out of our order book were simply things that came out of the contract window. And so we don't think it's going to another customer, sorry, competitor. We just believe that in full transparent dialogue with the customer, they're just not able to execute on that project because of one reason or another. So that's my view on it.

Kevin? Yeah, I could say sitting here and going through our backlog and pipelines personally with pretty much everyone around the table now. We do this on a regular basis every other week. We've not had any projects that I can recall that have been taken away from array given to a competitor. That's not what's happened at any of our de-booking or de-scoping. It's typically been a project canceled or in the case of the ones we're talking about today, it's projects that are no longer viable if they can't get that deep discounted earlier negotiated price point. That project is not viable for them, so they therefore will not move forward. But it's anything, as we've said multiple times, when we look at a project by project win rate that we do on a regular basis as a leadership team and we look, we know exactly who we lose a project to, why we lost it to, whether it be price specification, some esoteric geographical limit on ARDS versus someone else's. We look at all that stuff on a regular basis. We're not losing, our win rate, again, I'll repeat that, that our win rate has been higher than our historical market share, which is gaining. That's indicative of positive momentum. And you see that, again, don't lose sight of 84% volume growth, first half over first half in an industry that is single to high, high single digit growth. That's

pretty significant. That's great to hear. Thank you very much.

Thank you. This does conclude today's conference. We appreciate your participation. You may disconnect your lines at this time and have a wonderful day.