Array Technologies (ARRY) Q3 2025: Order Book Climbs to $1.9B as New Products Drive 40% of Backlog
Array Technologies delivered a standout Q3, propelled by robust volume expansion, a $1.9 billion order book, and surging adoption of its latest tracker and software offerings. The APA acquisition is already contributing to revenue and commercial pipeline, while proactive supply chain moves are limiting tariff impacts and supporting margin resilience. Management’s forward commentary and backlog quality signal a normalization of demand and sustained growth as the business heads into 2026.
Summary
- Backlog Quality: Order book strength is underpinned by Tier 1 customer wins and new product traction.
- APA Integration: Acquisition is accelerating commercial momentum and expanding the addressable market.
- Margin Management: Proactive supply chain actions are containing tariff and inflationary pressure, supporting profitability into 2026.
Performance Analysis
Array posted a 70% year-over-year revenue increase in Q3, driven by a 56% jump in delivered volume and initial APA acquisition contributions. The business surpassed its entire 2024 annual revenue in just nine months, reflecting strong execution amid regulatory and market uncertainty. Adjusted gross margin of 28.1% improved sequentially, with higher domestic mix and product ASP (average selling price, or price per unit sold) offsetting commodity inflation and tariff drag. APA’s addition diluted margins by about 20 basis points, but synergy and supply chain efforts are expected to reverse this trend over time.
Adjusted EBITDA grew 55% year over year, achieving the company’s second-highest quarterly result, while operating leverage improved as SG&A held under 10% of revenue. Free cash flow was $22 million for the quarter, with year-to-date cash generation in line with seasonal patterns. The $1.9 billion order book—over 95% domestic and not yet including APA backlog—signals strong forward visibility, especially as new products like Omnitrack, Skylink, and Hail XP now account for nearly 40% of orders.
- Volume Expansion: 56% YoY increase in delivered megawatts, with 74% YTD volume growth, anchored by robust demand and execution.
- Order Mix Shift: New products rapidly scaling, now 40% of backlog, indicating successful innovation and customer adoption.
- SG&A Leverage: Operating efficiency gains kept SG&A below 10% of revenue, even with incremental APA integration costs.
Management’s commentary and the Q&A confirmed that the order book is higher quality than prior years, with more direct utility and IPP (independent power producer, a non-utility energy generator) customers, reducing the risk of project delays and de-bookings. The sequential order book build and book-to-bill above one reinforce Array’s commercial momentum as the business enters its seasonal Q4 trough and prepares for a renewed build cycle in 2026.
Executive Commentary
"Our diverse portfolio of products, services, and software offerings continues to win, and our robust bookings are a testament to the time and effort invested in our relationships with critical Tier 1 customers. We are particularly pleased with the market's adoption of our latest new product offerings, Omnitrack, Skylink, and Hail XP. And we note that these three recently launched products already account for nearly 40 percent of our order book."
Kevin Hostetler, Chief Executive Officer
"Adjusted gross margin improved by 30 basis points, primarily due to a higher mix of domestic projects and ASB improvements to product mix with an offset from lower international shipments primarily in Brazil. APA also had a slight diluted impact on overall adjusted gross margin in the quarter of about 20 basis points. Anticipated 45x benefits and the outcomes of our supply chain synergy initiatives are expected to provide ample opportunity to transition this to an accretive impact in the near future."
Keith Jennings, Chief Financial Officer
Strategic Positioning
1. Order Book and Customer Quality
Array’s $1.9 billion order book is not only larger but also higher quality, with over 50% sourced from Tier 1 customers such as utilities and IPPs. This shift reduces project risk, as these customers have already secured safe harbor strategies and are less prone to delays or cancellations. Management emphasized that the current backlog composition is structurally more resilient than in past cycles.
2. Product Innovation and Adoption
Rapid adoption of new products—Omnitrack, Skylink, and Hail XP—signals that Array’s innovation pipeline is hitting the market sweet spot. These offerings, which focus on reducing LCOE (levelized cost of energy, a key metric for solar project economics) and mitigating severe weather risk, now represent 40% of the order book. The SmartTrack software platform is also seeing accelerated deployments, with active installations surpassing the entire historical base, supporting differentiated value for customers.
3. APA Acquisition and Integration
APA’s integration is ahead of schedule, already contributing $17 million in Q3 revenue and expanding the commercial pipeline, especially in engineered foundations and fixed tilt systems. The teams are collaborating on a suite of integrated tracker and foundation solutions, expected to launch in 2026, which will broaden Array’s share of wallet and addressable market. Early signs point to APA’s innovation pipeline and cross-selling potential as meaningful medium-term growth drivers.
4. Supply Chain and Tariff Management
Array’s supply chain strategy is highly adaptive, leveraging over 50 domestic and 100 international suppliers to optimize cost, content, and lead times amid a volatile tariff environment. The company has onshored nearly all torque tubes and stampings, with dampers to follow by year-end, reducing tariff exposure to less than 14% of bill of materials. Tariffs are now embedded in upfront quotes, and pass-through agreements with suppliers mitigate risk and enhance transparency for customers.
5. Geographic and Segment Focus
Domestic business now dominates the order book, with international orders treated conservatively to avoid de-bookings. While Brazil and other markets remain important, the near-term focus is on U.S. utility-scale projects and deepening relationships with major developers and power producers. The APA acquisition also brings new manufacturing capacity in Ohio, with plans for further domestic expansion to support growth and flexibility.
Key Considerations
This quarter marked a step-change in Array’s commercial and operational profile, with multiple levers supporting both near-term execution and long-term growth. The strategic context is defined by:
Key Considerations:
- Order Book Visibility: The $1.9 billion backlog, not yet including APA, provides multi-quarter revenue visibility and supports normalized demand flows into 2026.
- Margin Levers: Supply chain optimization, onshoring, and tariff management are actively containing cost pressures and will support future margin accretion as APA synergies are realized.
- Product Mix Shift: New product adoption is accelerating, driving higher ASPs and deepening competitive moat via differentiated technology and software.
- Capital Allocation: Free cash flow is being balanced between integration investments, new manufacturing capacity, and maintaining a strong liquidity position with $222 million in cash and $365 million total liquidity.
Risks
Key risks include ongoing tariff and commodity price volatility, which could impact margins if inflation accelerates or if domestic suppliers raise prices further. International project delays, particularly in Brazil, could limit counter-seasonal revenue diversification. APA integration execution and realizing expected synergies remain critical, as does sustaining new product momentum against competitors seeking to expand their own tracker and foundation offerings.
Forward Outlook
For Q4 2025, Array guided to:
- Lower sequential revenue and margins, reflecting seasonal build cycle and Q3 pull-ins.
- Continued book-to-bill above one, with further order book expansion expected.
For full-year 2025, management raised guidance:
- Revenue: $1.25 to $1.28 billion (midpoint up $60 million, including $50 million from APA)
- Adjusted gross margin: 27% to 28%
- Adjusted EBITDA: $185 to $195 million
- Free cash flow: ~$100 million
Management highlighted several factors that will shape Q4 and 2026:
- APA backlog inclusion and new integrated product launches will expand addressable market.
- Normalized demand flow and higher-quality backlog reduce risk of de-bookings and support stable growth into 2026.
Takeaways
Array’s Q3 results confirm a decisive shift in business quality and forward visibility, with new products and APA integration strengthening its position in U.S. utility-scale solar.
- Backlog Upgrade: Higher Tier 1 customer concentration and new product mix support more resilient, predictable revenue and margin streams.
- Execution on Multiple Fronts: Array is balancing growth, margin management, and capital allocation, with proactive supply chain actions limiting tariff drag.
- 2026 Watchpoints: Investors should monitor APA synergy realization, integrated product launch traction, and the ability to sustain order book growth amid evolving tariff and regulatory environments.
Conclusion
Array Technologies exits Q3 with powerful momentum, a fortified order book, and a clear strategic path to deeper market penetration and operational leverage. While tariff and integration risks remain, the business model is demonstrating resilience and adaptability as it scales for 2026 and beyond.
Industry Read-Through
Array’s results and commentary reinforce several key solar sector themes: First, tracker and foundation innovation is rapidly becoming a competitive differentiator, with software and hardware integration driving share gains among top-tier customers. Second, supply chain flexibility and onshoring are now table stakes, as tariff volatility and domestic content requirements reshape cost structures and project economics. Finally, backlog quality and customer mix are increasingly important signals of future stability, as developers and utilities demand reliable partners amid regulatory uncertainty. Peers with concentrated international exposure or lagging product innovation may face greater risk, while those executing on integration and supply chain agility are positioned to capture the next wave of utility-scale solar growth.