Array Technologies (ARRY) Q1 2025: 143% Volume Surge Anchors $2B Order Book Amid Tariff Turbulence
Array Technologies delivered a sharp 143% YoY increase in shipped volume, signaling regained market share and robust execution despite regulatory and tariff-driven uncertainty. The $2 billion order book held steady, with domestic demand and new product traction offsetting international headwinds. Management reaffirmed full-year guidance, emphasizing operational agility and innovation as key levers to navigate policy volatility and shifting customer timelines.
Summary
- Volume Recovery Outpaces Market: Array’s rapid shipment growth reflects effective customer engagement and market share regain.
- Order Book Stability Amid Policy Flux: The $2 billion backlog endures, with domestic bookings resilient despite tariff and IRA uncertainty.
- Product Innovation Gains Traction: New platforms like Omnitrack and Skylink are driving bookings and future delivery mix.
Performance Analysis
Q1 2025 marked a decisive rebound in operational throughput, with shipped megawatts up 143% year over year and revenue up 97% versus the prior year, as Array executed on previously delayed projects and captured new demand. The company’s North America segment contributed about 65% of quarterly revenue, a modest dip attributed to a temporary mix shift from two large international projects. This shift, while dilutive to gross margin, is not expected to persist through the year.
Gross margin compressed to 26.5%, reflecting anticipated headwinds from legacy volume commitment agreements and a higher share of lower-margin international contracts. Adjusted EBITDA margin landed at 13.4%, above guidance, but down sequentially due to regional mix and non-recurring prior-year benefits. Despite these margin pressures, Array exited the quarter with $348 million in cash and total liquidity of $510 million, supporting flexibility amid ongoing volatility.
- Revenue Acceleration: Sequential revenue growth of 10% signals momentum despite policy headwinds.
- Margin Impact from Mix: International projects and legacy agreements compressed margins but are not expected to recur in future quarters.
- Liquidity Strength: Solid cash position and renewed credit facility ensure ample flexibility for capital allocation and risk management.
Array’s ability to maintain its order book and deliver on project schedules, even as customers navigate PPA pricing and tariff uncertainty, underpins management’s confidence in reaffirmed full-year guidance.
Executive Commentary
"While near-term volatility is a reality, we are confident in the strength of our fundamentals and the resilience of our company. Integrity and transparency remain at the core of how our team operates."
Kevin Hostetler, CEO
"We have strong, consistent cash flow generation driven by positive earnings, which will continue to support our strategic priorities. We have a healthy cash balance with full access to our revolving credit facility, which we successfully renewed in this difficult macro and credit environment."
Keith Jennings, CFO
Strategic Positioning
1. Domestic Supply Chain Resilience
Array’s domestic content strategy, with 93% of U.S. materials sourced domestically and over 50 U.S. suppliers, has insulated the company from tariff shocks. The company now quotes 100% domestic-content trackers under IRA Table One for customers needing compliance, and most 2025 domestic deliveries are tied to projects with U.S.-made or U.S.-located panels. This foundation supports both margin protection and customer confidence as trade policy evolves.
2. Product and Software Differentiation
Omnitrack, adaptive tracker platform, and Skylink, wireless connectivity solution, are reshaping Array’s product mix. Omnitrack is projected to represent 30% of 2025 deliveries, while Skylink and related innovations accounted for 15% of Q1 revenue and 30% of new bookings. The company’s SmartTrack software, with advanced weather response and deployment on over 5 gigawatts, further differentiates Array in a market increasingly sensitive to extreme weather and operational efficiency.
3. Order Book Visibility and Customer Alignment
Despite policy-driven uncertainty, Array’s $2 billion order book, with over 40% scheduled for delivery in the remainder of 2025, provides forward visibility. The company is actively working with customers to review backlogs, clarify tariff pass-through provisions (75% of contracted projects allow full tariff pass-through), and ensure readiness to accelerate or pivot as regulatory clarity emerges. Discussions around new volume commitment agreements (VCAs) signal a shift toward longer-term contracting in response to market volatility.
4. International Market Adaptation
While U.S. demand remains robust, international markets are mixed: Brazil faces currency devaluation, rate volatility, and new tariffs, dampening growth for several quarters, while Europe delivers steady expansion and the Middle East emerges as a new target. Array’s global supply network of 75 partners provides optionality and cost control as it navigates these diverse environments.
Key Considerations
Array’s Q1 2025 results reflect a business balancing operational momentum with external unpredictability. The company’s ability to deliver on projects and secure new bookings, even as customers hesitate amid IRA and tariff ambiguity, will be critical for sustaining growth and margin expansion.
Key Considerations:
- Tariff Pass-Through Agility: 75% of domestic contracts allow full tariff cost pass-through, reducing direct margin risk from new trade actions.
- Customer PPA Uncertainty: Developers’ difficulty pricing power purchase agreements (PPAs) amid shifting costs could delay new bookings and compress near-term visibility.
- Product Mix Evolution: Rapid adoption of Omnitrack and Skylink is reshaping revenue streams and supporting differentiation in a crowded tracker market.
- Liquidity and Capital Flexibility: Renewed revolver and substantial cash reserves enable strategic investment, debt management, and opportunistic M&A.
Risks
Persistent policy uncertainty around tariffs and IRA tax credits remains the central risk, with potential to delay customer orders, squeeze project economics, or prompt abrupt shifts in demand timing. International exposure, especially in Brazil, adds FX and regulatory volatility. Margin pressure from mix shifts or commodity cost spikes could persist if market conditions deteriorate. Management’s guidance assumes no major adverse regulatory shocks or customer cancellations in the near term.
Forward Outlook
For Q2 2025, Array did not provide explicit quarterly guidance but reiterated that the first half should comprise about 55% of full-year revenue.
- Revenue expected between $1.05 and $1.15 billion for FY 2025
- Adjusted gross margin guided to 29% to 30% for FY 2025
- Adjusted EBITDA targeted at $180 to $200 million
- Adjusted diluted EPS of $0.60 to $0.70 (midpoint 8% YoY growth)
- Free cash flow forecasted at $115 to $130 million
Management cited confirmed project schedules, robust customer engagement, and a strong innovation pipeline as reasons for confidence in meeting full-year targets. They expect volume growth of about 30% and adjusted EBITDA growth of 9.5% at the forecast midpoint.
- Continued focus on margin recovery as mix normalizes
- Ongoing monitoring of policy and customer PPA environment
Takeaways
Array’s Q1 demonstrates regained operational momentum, but the external environment will dictate the pace and quality of future growth.
- Order Book and Liquidity Insulate Near-Term Results: The $2 billion backlog and ample cash reserves provide a buffer against regulatory shocks and customer delays.
- Product Innovation Drives Differentiation: Omnitrack and Skylink adoption, along with SmartTrack software, are strengthening Array’s competitive position and expanding addressable market.
- Policy and PPA Uncertainty Remain Central Watchpoints: Investors should track evolving tariff and IRA developments, and monitor customer order timing as PPA clarity emerges.
Conclusion
Array Technologies’ Q1 2025 results showcase a company executing strongly on volume and innovation, yet operating in a landscape marked by policy-driven unpredictability. With a fortified balance sheet, differentiated product suite, and resilient order book, Array is positioned to weather near-term volatility while pursuing long-term growth in utility-scale solar.
Industry Read-Through
Array’s experience this quarter highlights the solar sector’s acute sensitivity to regulatory and trade policy uncertainty. The company’s ability to pass through tariffs, leverage domestic supply, and adapt to customer hesitation provides a roadmap for peers facing similar headwinds. Rapid product innovation and operational agility will be critical differentiators as IRA and tariff negotiations play out. The muted near-term U.S. utility-scale solar outlook, counterbalanced by resilient order books and demand visibility, sets expectations for a potential surge in bookings once policy clarity returns. International volatility, especially in Brazil, reinforces the importance of geographic diversification and supply chain flexibility for all industry players.