FTC Solar, Inc.

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the FTC Solar second quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question at that time, please press star 1-1 on your telephone keypad. At this time, I would like to turn the conference over to Mr. Bill Michalik, Vice President, Investor Relations. Sir, please begin.

Thank you, and welcome, everyone, to FTC Solar's second quarter 2023 earnings conference call. Before today's call, you may have reviewed our earnings release, supplemental financial information, and slide presentation, which are posted earlier today. If you've not reviewed these documents, they're available on the investor relations section of our website at ftcsolar.com. I'm joined today by Sean Hunkler, FTC Solar's President and Chief Executive Officer, Phelps Morris, the company's Chief Financial Officer, and Patrick Cook, the company's Chief Commercial Officer. Before we begin, I remind everyone that today's discussion contains forward-looking statements based on our assumptions and beliefs in the current environment and speaks only as of the current date. As such, these forward-looking statements include risks and uncertainties, and actual results and events could differ materially from our current expectations. Please refer to our press release and other SEC filings for more information on the specific risk factors. We assume no obligation to update such information except required by law. As you'd expect, we'll discuss both GAAP and non-GAAP financial measures today. Please note that earnings release issued this morning includes a full reconciliation of each non-GAAP financial measure to the nearest applicable GAAP measure. In addition, we'll discuss our backlog, and our definition of this metric is also included in our press release. With that, I'll turn the call over to Sean.

Thanks, Bill, and good morning, everyone. Our earnings announcement today includes a mix of near-term disappointment with project delays impacting revenue, as well as some very positive developments, including a number of significant project wins here in the past few weeks, which will boost our performance as we head into 2024. Getting right into it, our revenue for the second quarter came in at 32.4 million, which was below our guidance range of 42.5 to 52.5 million. For the third quarter, we now expect to see revenue in the 24 to 34 million range, which, While we didn't have a public guidance number out there, I can tell you significantly below our prior internal expectations. The second quarter shortfall is largely related to contracted revenue being pushed between quarters. Specifically, projects from one customer were delayed to allow for additional planning and review around domestic content, as these projects are looking to take advantage of those incentives in the Inflation Reduction Act, or IRA. The review has now been completed and the approach finalized, but it had the effect of pushing revenue from Q2 to Q4. As it relates to our third quarter expectations, our bidding activity remains very high, and we have won a fair amount of new business. But the timing of many projects going to purchase order has been slower or pushed out by customers, whether due to domestic content clarity, module availability or delays in permitting, interconnection, or other issues. Unfortunately, given our current revenue run rate, a small handful of projects can have an outsized impact on our results. That will improve as we get back to scale, but it's a problem we need to manage now. The good news is that we have seen a significant uptick in project activity and wins in the last few weeks, including several notable projects which should position us for a meaningful improvement as we head into 2024. As a result of visibility around these projects, we now expect that we'll return to revenue growth in the fourth quarter and be on an accelerating path as we enter the new year. We expect the fourth quarter will be our highest revenue quarter in 2023. While the cadence of our revenue growth is different than we may have hoped a quarter ago, we have a number of bright spots in our business that give us a great deal of confidence in our future. One, we believe our manufacturing cost is now in line with our leading competitors. We are more competitive than ever and we will get better with scale. Two, our average new project margins puts us on track to achieve the gross margin targets we provided in the past. This includes our target of achieving a gross margin of 12 to 18% at the $150 million quarterly run rate and a 20 plus percent margin over the longer term. Even with lower revenue in the second quarter, we saw gross margin expand another 90 basis points. We're set up for a strong margin expansion as revenue grows. We're confident in our cost structure, and we have a lot of margin leverage. But obviously, the level of revenue which drives cost absorption is a key driver of the actual performance. Three, we are now actively in the market with our 1P solution. We believe the 1P market has done better in this time of restricted module availability, and we didn't have a solution until more recently. We now have a solution and a growing 1P pipeline. And with a recently received UL certification, we're focused on converting that pipeline to awards. In fact, we just won our largest 1P award to date at 140 plus megawatts. So we are on our way. And by the way, that 140 megawatts is part of an overall one gigawatt award that we received in the last few weeks, which includes supplying a large multi-technology renewables project in the Pacific Northwest. Four, we continue to grow our international business and are gaining traction in new regions. A couple of examples over the past few weeks include a new 120 megawatt award in South Africa. We also won a new 300 megawatt award for multiple projects in Italy and Spain, including utility scale agrivoltaic projects. These will be our first projects in these countries as we continue to expand in Europe and expand our served markets. We have now been awarded projects in a dozen countries outside the US. And with the recent addition of our 1P Pioneer solution, we believe we'll be even better positioned to continue to grow our international business as well as our business overall. Five, our backlog has now grown to 1.6 billion with 259 million added since May 10. The recent project awards I've mentioned, among others, have helped us grow backlog to this new level. Most of these new multi-project awards include projects that we expect will have near-term purchase order dates, and in some cases beginning initial production on the first projects during the fourth quarter of this year, with final projects expected to run through the end of 2025. The majority of the remainder of our backlog is 2P, which we expect will be increasingly constructed as module availability improves. The continued growth of our backlog and the recent additions of certain projects that we expect will include more near-term start dates allows us to continue to be cautiously optimistic about 2024 and gives us a nice foundation for future growth. And then sixth and finally, we continue to control our operating expenses. You'll notice that our Q2 OPEX came in better than we had guided. and that, along with the improved margins, allowed us to keep adjusted EBITDA flat quarter over quarter despite the lower revenue. We'll continue to control costs and look for efficiencies in many places. However, we will invest more in sales and engineering to support growth and the pipeline conversion. So in summary, while our cadence of revenue recovery is slower than we would have hoped a quarter ago, we have seen an exceptional spate of wins in the past few weeks which gives us confidence in a return to growth in the fourth quarter and into 2024. Our international expansion continues, and our newly certified 1P offering will only enhance that growth over time. We are positioned with a product cost structure that will enable our run of gross margin expansion to resume and reach new highs, along with that revenue growth. And we will keep a cap on operating expenses while investing for future growth. With that, I'll turn it over to Phelps. Thanks, Sean, and good morning, everyone. I'll provide some additional color on our second quarter performance and our outlook. So let's begin with the second quarter. As Sean mentioned, product delays in the quarter resulted in revenue coming in below our guidance range of $32.4 million. This level represents a decline of 20.9% relative to the last quarter and an increase of 5.3% relative to the year-ago quarter. As we move on to gross profit, as you would expect, the delay in revenue also slowed down and caused margin to come in below our expectations. However, with project margins continuing to improve, we were still able to expand our gross margin percentage relative to the last quarter, even on lower revenue. Specifically, our GAAP gross profit was $2.2 million, or 6.8% of revenue, compared to $2 million, or 5% of revenue, in the prior quarter. On a non-GAAP basis, gross profit was $2.6 million, or 8.2% of revenue, compared to a non-GAAP gross profit of $3 million, or 7.3% in the prior quarter. This represents a 90 basis point improvement quarter over quarter on the non-GAAP gross margin, our second quarter of positive margin since our IPO, and a 58 percentage point improvement over the past three quarters. On a year-over-year basis, we delivered improvement to the non-GAAP gross profit of $8 million on less than $2 million increase in revenue. The improvements were driven primarily by improved tracker direct margins, helped by our product cost reduction efforts. Moving to OpEx, our GAAP operating expenses was $12.6 million. On a non-GAAP basis, excluding stock-based compensation and certain other expenses, our operating expense was $9.7 million compared to $12.4 million in the year-ago quarter. This was below or better than our guidance range. The year-over-year improvement was driven primarily by lower R&D and personnel-related expenses. Next, GAAP net loss is $10.4 million, or 9 cents per share, compared to the loss of $11.8 million, or 11 cents per share, in the prior quarter, and compared to a net loss of $25.7 million in the year-ago quarter. Our adjusted EBITDA loss, which excludes approximately $3.2 million, including stock-based compensation expense and certain other non-cash items with $7.2 million, which was just above the low end of our guidance range. The result was approximately flat versus the prior quarter and represented an improvement of $10.5 million compared to an adjusted EBITDA loss of $17.7 million in the year-ago quarter. Finally, regarding liquidity, we had an operational use of cash for the quarter, offset by usage of the ATM facility for which we received $15.2 million of cash within the quarter. In aggregate, we ended the quarter with $33.8 million of cash on the balance sheet. We continue to hold no debt on the balance sheet. We have an undrawn credit revolver, as well as $76 million remaining under the ATM program at quarter end. So with that, let's turn our focus to the outlook. Based upon our current view, which includes the project delay Sean's mentioned, we expect the third quarter revenue to be flattest to down relative to the second quarter. Our gross margin performance will be based on how revenue comes in. If the revenue is down, the lower cost absorption will lead to margins coming in lower sequentially. However, if revenue is flat or slightly up, then we could see margins come in higher than the second quarter. We expect this to be followed in the fourth quarter by a resumption in revenue growth and margin expansion as the recent project wins are expected to begin production. Specifically, our targets for the third quarter call for the following. First, revenue between $24 and $34 million. Next, non-GAAP gross margins between $0.7 million and $3.1 million, or between 3% and 9% of revenue. Next, non-GAAP operating expenses between $10 and $11 million. And finally, adjusted EBITDA loss between $10.3 million and $6.9 million. Looking forward, the recent uptick in project wins give us increased confidence that the revenue ramp expected in the fourth quarter should continue into 2024. So in closing, the actions we've taken to strengthen the company, broadening our product offerings, refocusing our sales efforts, and improving our cost structure will benefit GreatLit moving forward. These efforts, coupled with $1.6 billion in backlog, have positioned us to not only grow, but to grow profitably. With that, we conclude our prepared remarks, and I'll turn it over to the operator for any questions. Operator?

Ladies and gentlemen, if you have a question or comment at this time, please press star 1 1 on your telephone keypad. If your question has been answered or you wish to remove yourself from the queue, please press star 1 1 again. Again, if you have a question or comment at this time, please press star 1-1. Our first question or comment comes from the line of Donald Schaefer from Northern Capital Markets. Mr. Schaefer, your line is open. Hi, guys.

Thanks for taking the questions. So I first want to ask about the backlog. Every time we meet, it seems like you guys have either you know, just come from meeting with customers or right after you're rushing out the door to go meet with some more. So it's pretty clear to me that, you know, you're hustling and really kind of doing everything you can to generate sales. And we see this in the growing backlog. But, you know, if we look at the backlog you have versus the backlog of some of your peers, you know, it's comparably large in size, but it hasn't really flowed through or hit the financials yet. So I'm wondering if, and you know, you've given appropriate kind of reasons and explanations for all of that, but is there anything additional color you can give us in the backlog that, given that we haven't seen it in the financials yet, can give us additional kind of assurances around things like, can you talk about the extent to which it has VCAs that some peers have been using? um the how prevalent deposits are or the significance of the size really just anything to give us a better sense of kind of having teeth to uh or or staying power to this backlog that would be great yeah hey hey donovan this is sean thanks for the question

um yeah let me let me comment a little bit on the backlog so if you if you think about you know our results obviously you know we're disappointed by our short-term results but we remain optimistic and excited about the future and one of the reasons is our backlog and the team has done a great job continuing to grow the backlog we talked a little bit about you know 2p versus 1p you know the majority of majority of our backlog is 2p but we continue to add to it we added you know we talked about our our 1P edition, the new project at 140 megawatts, part of an overall one gigawatt project that we're super excited about. As we look forward, one of the reasons we're excited is we feel there's momentum and that our expectation is that we'll see backlog conversion really in 2024 with all the momentum we're seeing looking forward to 2024. Let me ask Patrick to comment as well.

Yeah, Donovan, thanks for the question. I mean, I think I'll break it up in two parts. If you look at the $259 million that we booked this quarter, a lot of that is you know, set to start kind of production in the back half of this year and into 2024. So these are projects that with near term that will carry over multiple quarters. So that conversion time of the backlog is going to be relatively short in comparison to some of the projects that we, you know, ultimately booked in the past. But, you know, as Sean said, you know, as we started, modules have started to get released. You've seen more projects ultimately go through. You know, our 2P backlog, you know, when we're talking with our customers, is expecting to be unlocked in 2024 as we kind of set the stage PCs and developers that we've been working with. So seeing progress and really working on those projects now that have been sitting in our backlog for quite some time, and we're excited to convert that.

Does that answer your question, Donovan?

Yes, that answers my question. Thank you. As a follow-up, for guidance, you know, you guys are still kind of relatively new, you know, growing company. And, you know, Sean, you've been at the helm for, you know, not the whole kind of duration of the company. So with that in mind, I'm curious if you – are the guidance process that you go through sort of internally when you decide then what guidance you're going to kind of put out externally. Has that been evolving or changing? I'm asking because there's kind of a learning curve and figuring things out. And the miss on Q2 guidance coming in lower than what you had guided, obviously there's a lot going on in the market right now. But when something like that happens, do you then kind of sharpen your pencil and say, is there something we can do from a process standpoint or procedure standpoint to get better at putting out our guidance? Like, is it the same process you went through for your third quarter guidance as the process you went to to come to second quarter guidance? Or are you kind of trying to figure out better ways to pin that down?

Yeah, you know, Donovan, we like to think of ourselves as a learning company. And like you said, you know, we're a relatively new company, but we spend a lot of time, you know, looking at processes and procedures from top to bottom in the company. And we always, you know, we look at anytime there's a defect as an opportunity to improve further. But we take the guidance quite seriously, and we do spend a lot of time internally as we think through the guidance. As we look at Q2, as we talked about, we saw some projects shift. And unfortunately, as we continue to build, our base isn't quite yet to the point where it can – it's very impactful when we see a few projects shift out just because our base is still growing. But for all the things that we talked about in the earnings just a few moments ago, we remain very, very optimistic about the future and the opportunities that we have.

Yeah, the other thing I'd add, Donovan, you know, as it relates to the Q2 guidance, obviously, you know, disappointing, but these were projects that we had, you know, ultimately purchased orders for, but given kind of the IRA ambiguity, the customer ultimately elected to push those out into Q4. And so, you know, these were projects that, you know, have orders in hand, but the ultimate delivery and revenue recognition because of IRAs move those out two quarters just to make sure that they could take advantage of the added incentive.

Okay, thank you. That's very helpful. I'll take the rest of my questions offline.

Thanks. Operator?

Sorry, I was on mute. Our next question or comment comes from the line of Phil Shin from Roth MKM. Mr. Shin, your line is open.

Hi, everyone. Thanks for taking the questions. I wanted to dig into the outlook a little bit more. I was wondering if you could talk through some of the Q4 math on revenue. You talked about shipments being pushed out from Q2 to Q4. Can you quantify the pushouts from Q3 as well, and how much of that might also be in Q4? Should we be thinking about Q4 kind of being well above 100 million? I know you haven't put out exact guidance, but was wondering if you could kind of bracket it for us in some way. Thanks.

Yeah, I mean, I think, you know, as it relates to the push-outs from Q2 to Q4, you know, a lot of the customers are trying to get, you know, reach a certain kind of completion milestone by the end of the year. So, you know, we're not really anticipating any project push-outs from Q4 to Q1 ultimately at this time because a lot of these projects ultimately need to, you know, take the incentive in 2023. And so, you know, from the perspective of Q2 to Q4, you know, the partner that we were working with had the additional time to, you know, optimize their, you know, kind of incentive structure and still make it under the 1231 deadline.

Thanks, Phelps. Can you talk about how much you saw maybe from Q3 to Q4 or maybe into later quarters?

Yeah, I mean, I think overall, Bill, you know, in terms of, you know, push-ups, we're very comfortable with the 2024 build-up. When you look at Q3 to Q2, there is also some additional delays. I mean, I think you look at, you know, kind of where we bracketed, you know, I think we said qualitatively, since we're not providing Q4 guidance at this point, that, you know, it will be the highest quarter that we've delivered to date within the year as our expectations for the quarter. There is potential upside there. you know, basically it's predicated upon how much manufacturing production we can get within the quarter. So it'll be some, depending on the time of the PO that we receive in Q3, that will drive the actual high end of the Q4 revenue, Phil.

And the other part, Phil, if you look at the contract or the awards that we got, you know, kind of articulated, you know, between South Africa, what we've got in the U.S. and then Europe and Spain, I mean, these are projects that, you know, have this either large single projects or projects that have defined start dates that we're going to start recognizing revenue in the back half of this year and kind of carries in multiple quarters into 2024.

Great. Okay. Thanks, Patrick and Phelps. In terms of the backlog, $1.6 billion, it's a big number. It's much higher than what your quarterly revenue run rate would suggest. You talked about, in your prepared remarks, meaningful growth in 2024. Consensus revenue has you close to $500 million of revenue in 2024. Can you share what part of your backlog is designated for 2024? Thanks.

You know, I don't think – you know, we're not sharing how much of our backlog is, you know – broken out into 2024, I guess I'd leave kind of with two points. One, you know, as we looked at, you know, kind of the historical backlog and the continued pushouts with lack of module availability, you know, we're now working with those developers for kind of anticipated start dates in 2024, you know, in terms of, you know, kind of the 2024 and consensus numbers, you know, really not looking to reset expectations at this time at all.

Okay, great. Thanks, guys. I'll pass it on.

Thanks, Phil. Thank you. Our next question or comment comes from the line of Kashi Harrison from Piper Sandler.

Your line is now open. Question.

Just one for me as my other questions were asked. So, you know, you guys use north of $20 million of cash in 2Q organically, which, as you indicated, was funded with the ATM. I was just wondering if you could speak to your expectations surrounding cash flow from ops in the second half of the year, and then working capital as well, just trying to get a sense of cash needs in 2H2023. And that's it for me.

Hey, gosh, thanks for the question. I think if you look at Q3, the guide is a an EBITDA burn for the quarter. But what we see as a potential offset is we anticipate the current forecast to deleverage some of the AR this quarter with some chunky collections that we're anticipating to come in that will offset some of that. And then in addition, as these new projects hit within the quarter, you're going to get some additional deposits and down payments that would offset some of that potential operational burn as you build up the revenue base.

Got it. Thank you.

Thanks for the question. Thank you. Our next question or comment comes from the line of Jeff Osborne from TD Cowan. Mr. Osborne, your line is now open.

Hi, Jeff. Beating that to a dead horse, but can we just talk about the linearity in the quarter? Was this, you know, problems that came up late in the quarter would be, you know, part A of the question and B, He has sort of a laundry list of issues between module availability, interconnections, permits, et cetera. Is there a way of rank ordering those?

Jeff, this is Sean. I would say, as we mentioned in the remarks, our biggest single issue was the shift of projects related to the domestic content, the customer basically finalizing their strategy. So that accounted for the lion's share of the miss.

And was that something that developed late in the quarter versus expectations?

Yes, it was. So, as Patrick mentioned earlier, Jeff, we had the POs. They made a shift in terms of their strategy mid-quarter to once some of the IRA information came out as a consequence, that's where it pushed out to the later quarters.

Got it. My last question is just you made the comments on the margins, which are helpful at different revenue rates. Can you just talk about the overall pricing environment, both domestically and internationally?

I mean, I think from a pricing perspective, you know, with our cost structure that we have, we're able to, you know, really price these projects appropriately. We're not seeing kind of a race to the bottom in the geographies which we're currently engaging with. In terms of pricing and margins, the U.S. continues to be a really good sector for us and continues to expand our margins. We're really excited about the 300 megawatts that we're going to be doing with 5E across the you know, 11 different projects, two large-scale utility projects, and some distributed generation that, you know, all at very, very good and healthy margins. So we're not seeing a lot of pricing pressure. We're seeing the ability for us to compete with our cost structure and deliver, you know, continue to grow our margin base.

Thank you. That's all I had.

Thanks. Thank you. Stand by. Our next question or comment comes from the line of Julian Dumoulin-Smith from Bank of America. Your line is open.

Hi, this is actually Morgan Reed for Julian here. Thanks for the comments this quarter. I guess if you could kind of elaborate on the gross margin inflection that you're expecting in the fourth quarter, that would be helpful given that this is going to be kind of the record revenue base. Understand that like the previous guidance, For 2Q, that wasn't hit given the revenue issue. I guess, should we expect gross margins maybe in excess of that sort of 2Q type level given the sort of confidence that you have around the 4Q guidance on a volume and revenue base?

Yeah. Hey, Morgan. Thanks for the question. So, you know, I think, you know, the expectations for Q4, as we said earlier, it's going to be the highest for the year in terms of expectations. In terms of getting operating leverage on the business, obviously, as you grow the top line revenue, your overhead gets some leverage on top of that. We're continuing to see the project margins be very strong individually. What you're seeing in Q2 and Q3 is From Q1 to Q2, despite the fact that the revenue came backwards a little bit in Q2, we were still able to grow the gross margins by 90 basis points, which I think is a good proof point to everybody of the individual product margins. If you look at the variability in the guidance frame for Q3, that's really just driven by the overhead that is basically the floor of the overhead that's not going to branch it up one way or the other. In terms of margins for Q4, again, we haven't guided to that. But again, as you can anticipate, if you look back kind of to the Q2 guidance range at those type of revenue levels, that's where we'd anticipate margins to be at this point based upon getting the operating leverage on the overhead as well as the project margins that we're seeing in the pipeline.

Got it. That's helpful.

And then last one for me, in terms of the project pipeline or the backlog that you've outlined, you talked about kind of a split between 1P and 2P, where 2P is currently the lion's share of the backlog. But it sounds like, based on your prepared remarks, that the 2P projects are kind of particularly delayed in terms of their ability to culture because of module availability concerns. I guess, what's the confidence that like the lion's share of that backlog then flows through, given that it sounds like most of those projects are tied to 2P projects, which are most acutely exposed to the module availability concerns that you've outlined.

Yeah, I mean, I think, thanks, Morgan. This is Patrick. I mean, I think from our perspective, you know, we've seen the module environment through kind of through the back half of the year, and we've seen the engagement level on these defined projects that are in our backlogs. really start to ramp up as we start going through, you know, final design, engineering, getting the site design finalized and ultimately ready to go. And so there's been an uptick in activity to get those projects ready to start construction in 2024. And previously, it's been more of a, you know, kind of wait and see as modules become available. And with the release of more and more modules, those projects are moving forward.

We're definitely seeing, you know, strong momentum as we look into 2024 for backlog conversion.

Got it. Thank you. I'll take the rest offline.

Thank you. Our next question or comment comes from the line of Graham Price from Raymond James. Mr. Price, your line is now open.

Hi. Good morning. Thanks for taking the question. Maybe just one more on the quarter-over-quarter margin improvement. You mentioned the number of items on the cost side. I was wondering if ASPs were up quarter-over-quarter and just kind of the relative contribution between, you know, that improvement from pricing versus the cost side.

So, I would, you know, I would look at a gram that really are a lot of it is coming from the cost improvements that we continue to drive. And so the team has been absolutely relentless in taking costs out of both our 2P product as well as our 1P product. And so that has been a major factor in contributing to the margin uplift.

Got it. Thanks. And then for my follow-up, great to see the expansion in Italy and Spain. Wondering, looking forward, how we should think about the uh, international versus us, uh, booking mix and how that's trending.

So we're, we're very excited about the progress we're making internationally. We talked about, you know, the, the, uh, new award in South Africa. And as you mentioned, you know, the projects in Spain and Italy, um, we, we see continued progress in, in markets like Australia as well. However, you know, our, still our, uh, We're still seeing strength, obviously, in the U.S. environment. And so I think over time, we'll see the international continue to strengthen as a percent of the total. But the U.S. market will still continue to be a very, very strong core market for us.

Got it. Thank you. That's it for me.

Thank you. Again, ladies and gentlemen, if you have a question or comment at this time, please press star 1-1 on your telephone keypad. Our next question or comment comes from the line of Samir Joshi from HC Wainwright. Joshi, your line is now open. Hey, guys.

Can you hear me?

Yes.

Thanks for taking my question. On the DNA front, it seems you have been able to control those costs fairly well. Was there any one-time benefit on a non-GAAP basis that might have been here, or is this the level we should expect going forward?

Yeah, so thanks for the question. No, I mean, that's an area that we've obviously been very focused on is the OPEX side. We'll continue to have a focus on OPEX. It's something that we continually review as a management team. But, no, that's the areas that we'll continue to keep that in check, control the things that we control, basically. There is lumpiness in the business with project starts and project push-ups, but this is the one area that we're going to control, and we'll continue to keep an eye on that.

Okay. And just one more. Of the 259 million new orders, what proportion of this was non-UFLPA?

All of it is non-UFLPA. So of what we've booked this quarter, it's either international or the projects have modules. Okay.

Thanks for that. And just maybe if I can, if I may, one of the projects announced today, Project WINS announced today includes floating solar installation. Can you let us know what your capabilities are on that front?

So, no, great question. So we will not be providing the floating solar, you know, for this particular project. You know, we are going to be providing one gigawatt worth of trackers. But this is part of a pretty groundbreaking, you know, just generally renewable energy project in the Pacific Northwest. And, you know, we're excited to be a part of it. But we are delivering our one and two P tracker in the mode of a gigawatt.

Thanks for that clarification and good luck. Thank you. Thank you.

Thank you. Thank you. I'm sure no additional questions in the queue at this time. I would like to turn the conference back over to management for any closing comments.

Hey, thanks very much everyone for joining us. We appreciate your time. And while we do have disappointment with our Q2 results, We are absolutely optimistic about the future and the opportunities out there. So thank you again for your time, and we look forward to our next interaction.

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day. Speakers, stand by.