Earnings call transcript: FTC Solar Q2 2025 sees stock dive amid losses

FTC Solar Inc. (FTCI) reported its second-quarter 2025 earnings on August 5, revealing a significant year-over-year revenue increase but also substantial losses, leading to a sharp decline in its stock price. Despite innovative product updates and operational improvements, the company’s financial struggles and market uncertainties weighed heavily on investor sentiment. According to InvestingPro data, the company’s market capitalization stands at $83.43 million, with analysis suggesting the stock is currently trading near its Fair Value.

Key Takeaways

• FTC Solar reported a 75% year-over-year increase in Q2 revenue to $20 million.
• The company faced a GAAP net loss of $15.4 million, or $1.18 per diluted share.
• Stock prices fell dramatically, with a 14.52% drop to $5 in premarket trading.
• FTC Solar introduced new tracker innovations, emphasizing installation speed.
• The company anticipates a pivotal year in 2026, with potential market expansion.

Company Performance

FTC Solar demonstrated strong revenue growth in Q2 2025, achieving a 75% increase compared to the same period last year. However, the company continues to face financial challenges, reporting a net loss of $15.4 million. InvestingPro analysis reveals concerning metrics, including weak gross profit margins and rapid cash burn. The company maintains a current ratio of 1.4 and operates with a moderate debt level. Despite these losses, FTC Solar has made strides in operational efficiency, reducing operating expenses for the seventh consecutive quarter to their lowest level since 2020.

Financial Highlights

• Revenue: $20 million, a 75% increase year-over-year
• GAAP Net Loss: $15.4 million, or $1.18 per diluted share
• Adjusted EBITDA Loss: $10.4 million
• Operating Expenses: Lowest level since 2020

Market Reaction

FTC Solar’s stock experienced a substantial decline in premarket trading, dropping 14.52% to $5. This movement reflects investor concerns over the company’s financial losses and the broader regulatory uncertainties affecting the solar market. The stock has fluctuated within a 52-week range of $1.758 to $7.4, indicating heightened volatility.

Outlook & Guidance

Looking ahead, FTC Solar projects Q3 revenue between $18 million and $24 million, with expectations of significant revenue growth in Q4. The company views 2026 as a pivotal year, anticipating a surge in bookings and market expansion. However, InvestingPro data shows three analysts have recently revised their earnings estimates downward for the upcoming period, and the company is not expected to be profitable this year. FTC Solar aims to leverage its innovative products and strengthened sales team to capitalize on emerging opportunities.

Executive Commentary

CEO Jan Brandt emphasized the company’s competitive edge, stating, "We believe that FTC’s tracker installs significantly faster than any other tracker in the market." Brandt also highlighted the company’s strategic positioning for future growth, noting, "2026 is shaping to be the pivotal year for FTC."

Risks and Challenges

• Regulatory Uncertainty: Ongoing uncertainties in solar market regulations could delay project planning and execution.
• Financial Losses: Persistent net losses may impact investor confidence and limit growth opportunities.
• Market Competition: Intense competition in the solar industry could pressure margins and market share.
• Labor Market Tightness: A tight labor market may challenge the company’s ability to scale efficiently.
• Supply Chain Disruptions: Potential disruptions could affect production timelines and costs.

FTC Solar’s Q2 2025 earnings reflect a company navigating significant challenges while positioning itself for future growth. Despite financial setbacks, the company’s focus on innovation and operational efficiency may provide a foundation for long-term success.

Full transcript - FTC Solar Inc (FTCI) Q2 2025:

Conference Operator: Good day, and thank you for standing by. Welcome to the FTC Solar’s second quarter twenty twenty five earnings conference call. At this time, all participants are in a listen only mode. After the speakers’ presentation, there will be a question and answer session. To ask a question during this session, you will need to press 11 on your telephone.

You will then hear an automated message advising that your hand is raised. To withdraw your question, please press 11 again. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your first speaker today, Bill Michalik, VP of Investor Relations. Please go ahead.

Bill Michalik, VP of Investor Relations, FTC Solar: Thank you and welcome everyone to SDC Solar’s second quarter twenty twenty five earnings conference call. Before today’s call, you may have reviewed our earnings release and supplemental financial information, which were posted earlier today. If you’ve not reviewed these documents, they’re available on the Investor Relations section of our website at fdcsolar.com. I’m joined today by Jan Brandt, the company’s President and Chief Executive Officer Kathy Bainen, the company’s Chief Financial Officer and Patrick Cook, the company’s Head of Capital Markets and BD. 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 as required by law. As you would expect, will discuss both GAAP and non GAAP financial measures today. Please note that the earnings release issued this morning includes a full reconciliation of each non GAAP financial measure to the nearest applicable GAAP measure.

With that, I’ll turn the call over to Jan.

Jan Brandt, President and Chief Executive Officer, FTC Solar: Thanks, Bill, and good morning, everyone. It’s great to be with you again and give you an update on the continued progress that FTC Solar is making to position the company as one of the leading single access tracker providers in the market. As I approach my one year anniversary with FTC Solar, I can tell you that this has been one of the most dynamic and incredible of my nearly twenty years in the solar industry. My optimism about the company and its future is that in this moment of needing to build solar faster and more efficiently, we believe our tracker installs in less time with less people than any of our peers, and we don’t think it’s even close. The constructability is in our DNA.

Fewer parts and better features enable a reimagined solar tracker installation experience. I urge you to view the videos of our installations that we’ve posted to see how tasks that may require six or seven people and special tools with competing products are replaced with two people and no specialty tools or drills. Our clients are finding that new installation crews can be trained and operating full speed within minutes of the start of the day. It’s just that simple to install. This constructability is protected by IP and inherent in the design that is the latest innovation to the tracker market.

While it takes time to educate and advance the conversation with EPCs that have been doing it one way for years, this is exactly the progress we’re making every single day. FTC is on more approved vendor lists today than ever in our history, and we’re just getting started. FTC continues to grow the sales team with EPC experts to help drive understanding of our constructability with our customers. These installation benefits can enable EPCs to offer lower CapEx prices to customers when using FTC rather than with competitor options. Our message to the market is clear.

We believe that FTC’s tracker installs significantly faster than any other tracker in the market, and that message continues to be our focus every day. Now let me say a few things on the market and our positioning, and then I’ll turn it over to Kathy to provide an update on our second quarter results. At a high level, the second quarter came in as expected from a financial perspective, with results within our ranges and tight OpEx allowing adjusted EBITDA to come in at the high end. Even with some of the most volatile macro environment I have seen during my solar career. The exciting news since our last call was the $75,000,000 financing facility we entered into in July and is already opening doors to new business for us.

Having the appropriate balance sheet is key to growing through an inflection point, and this capital supports our growth and an expected acceleration of backlog. We’ve made excellent progress enhancing our product offering, checking all of the boxes and leading on creating new innovations that are receiving positive feedback from customers. We remain the fastest installed tracker in the market and continue to push speed while also making it easier. Overall market clarity is one area where we’re hopeful for some incremental positive developments. So let me start there.

When we spoke a quarter ago, I mentioned that there was a fair amount of dynamic motion in the marketplace as it relates to things like tariffs, trade deals, and legislation around the One Big Beautiful Bill. Amid that backdrop, while projects continue to progress through stages of pipeline, there was a slow decision making as customers looked to ensure that they fully understood the market rules that would impact their projects and have fully incorporated all costs and other variables into their project models. At the same time, the earlier phase out of the ITC from the budget bill has spurred multiple gigawatts of new inquiries from customers about potential safe harboring of equipment as part of a plan to secure the full ITC. So whether we see a rush to build solar as we move into 2026 or something more modest, we won’t know until the rules on safe harbor come out from Treasury. The good news is that the end of the forty five day review period scheduled to be coming to an end, so we hope to have additional clarity soon.

While the legislation was not ideal for the solar market, the solar industry has showed its abilities to educate and advocate for important aspects of the law that allowed a path forward. With some additional clarity, I expect full speed ahead on project decisions and continued deployment of solar as the cheapest, cleanest, and fastest generation to connect to the grid. On recent calls, I’ve shared with you all the great progress we’ve made expanding our product offering. We have the world’s most easily constructed tracker. We leverage that platform to add features every quarter that allow for the tracker to fit the site and increase the value proposition that we enable for EPC and IPP clients.

This has included adding solutions for high wind zones up to 150 miles per hour, compatibility across module types, and with innovative Python clips and universal torque tubes, the ability to make module changes late into the design cycle. Incidentally, the last two factors make FTC an ideal tracker solution for those looking to safe harbor for purposes of the ITC, which we outlined in the white paper that we released last week. A key advancement in our 1P lineup includes introducing the widest range of stow in the industry. We are releasing the most advanced hail solution in the market capable of an 80 degree stow angle. Hail can be a key driver of insurance premium, so having a steeper stow capability can give owners and operators additional flexibility in meeting the unique requirements of their project.

This high STOW angle is combined with the SunOPS performance platform, which has integrated weather forecast services and allows the user to fully customize their site and set thresholds on hail probability, size, and the radius of how close an event may be to the site. Most importantly and unique to FTC, our hailstow capability performs in both directions, ensuring that the tracker goes to the nearest hailstow angle available, saving valuable time. Everything is automated, and if you want to adjust the configuration or trigger immediate stow across the site, just click a button from wherever you are and the software will take care of it. One other innovation I’m announcing today is an extra long tracker built specifically for 2,000 volt systems. The industry is currently at 1,500 volt, but is expected to begin to transition to 2,000 in the next couple of years.

You’re already seeing this shift in the inverter market. At 2,000 volts, a system can have fewer but longer tracker string length, which can reduce EVOS and O and M costs while increasing power capacity by 33%. When customers are ready to make that transition, we are ready to support them from a leadership rather than a follow-up position. I’ve alluded to multiple terrain following features we’ve added to reduce or eliminate the need for land grading. This can be an important factor in enabling permits, lowering project costs, or significantly speeding a construction timeline.

FTC Solar has multiple options to support customers to reduce and avoid civil construction work, including articulation at the slough drive to allow for a change in the North South slope at the drive pile, articulation at the line post to allow for variance in the line post elevation, and variable pile or reveal height capability to accommodate variation in slope, which, if used in combination, could eliminate cut and fill altogether with all of these options available now. We continue to make advances across our entire software platforming, adding options and capabilities to make things easier and more efficient for our customers. SunOPS is a key part of that. I haven’t talked much in this venue about SunPath, which is our tracker optimization software for backtracking and diffuse light, but I believe it will become an increasingly important offering as we move forward. I actually posted a picture on my LinkedIn yesterday, which a team member sent me.

It shows an example of row to row shading on the site caused by natural undulation of the ground. The picture makes it super easy to see the production loss from shading, but that’s the kind of thing that SunPath can easily fix when using FTC trackers where each row operates and can be customized individually. I often hear people talk about how truly flat solar sites are gone. Our team recently analyzed the last two fifty sites that we have bid on, and it turns out that 90% of them contain slopes of three degrees or greater. This is important because at an average slope of five degrees, for example, sun paths on an FTC tracker would give you an additional 2% energy production gain every year over a linked row system.

That’s like adding extra months of production to your deployment. As I said at the start, we have a very wide 1P product offering that is fast, safe, and easy to install, underpinned by our highly constructible design. The more customers and prospects that see how easy our 1P is to build, the more they will like it, particularly the estimators. A significant amount of labor costs on a site relates mechanical installation of tracker and modules. So when you see each module on an FTC tracker simply glide into place and be secured in seconds, you can start to estimate how much faster you can build each row and site and how that compounds the material labor savings.

This can result in significant savings for EPCs in any environment, but if there’s a rush to build solar even faster, the speed with which you can train workers and install faster is critical to maximizing the available labor force in a tightening market. In addition to improving our position on the product side, as I mentioned, we added significant strength to our balance sheet with the $75,000,000 financing commitment announced last month. In addition to giving us ample runway to achieve profitability, it gives incremental comfort to customers that we’ll be supporting them long into the future. It was perhaps not the most conducive market environment to raise capital, so I think it says a lot that Clean Hill reached out to us, was getting great feedback from the market, and wanted to make it clear with a large commitment that they are big believers in our prospects. The feedback from customers has been overwhelmingly positive, and the announcement has already opened doors to new business for us.

So I believe we are increasingly well positioned in the marketplace with a robust and rather comprehensive product line that offers significant benefits to projects across developer and EPC portfolios. And our engineering and R and D teams have a full portfolio of incremental initiatives in progress to provide additional customer benefits. We’re adding multiple gigawatts of new business to our pipeline, which should only be enhanced by the strengthening of our balance sheet. Overall, we remain increasingly well positioned to support our customers and their growth. With that, I’ll turn it over to Kathy.

Kathy Bainen, Chief Financial Officer, FTC Solar: Thanks, Jan, and good morning, everyone. I’ll provide some additional color on our second quarter performance and our outlook. Beginning with a discussion of the second quarter, revenue came in at $20,000,000 which was within our guidance range of 19,000,000 to $24,000,000 This revenue level represents a decrease of 4% compared to the prior quarter and an increase of 75% compared to the year earlier quarter due to higher product volume. GAAP gross loss was $3,900,000 or 19.6 percent of revenue compared to a gross loss of $3,400,000 or 16.6% of revenue in the prior quarter. Non GAAP gross loss was $3,500,000 or 17.4% of revenue, also within our guidance range.

The result for this quarter compares to non GAAP gross loss of $3,000,000 or 14.4% of revenue in the prior quarter. This quarter’s result included a $4,000,000 accrual related to our joint venture facility that was not contemplated in our guidance ranges. Excluding this charge, we would have returned to be non GAAP gross profit positive for the first time since late twenty twenty three at a positive half a million dollars. GAAP operating expenses were $7,600,000 On a non GAAP basis, excluding stock based compensation and certain other costs, operating expenses were $6,500,000 down from $8,300,000 in the same quarter last year and $6,600,000 in the prior quarter. This now represents the seventh consecutive quarter of OpEx reductions and our lowest OpEx level since 2020 as we continue to control costs.

GAAP net loss was $15,400,000 or $1.18 per diluted share compared to a loss of $3,800,000 or $0.58 per diluted share in the prior quarter and a net loss of $12,200,000 or $0.97 per diluted share post split in the year ago quarter. Adjusted EBITDA loss, which excludes approximately $5,100,000 for a loss from the change in fair value of the warrant liability, certain transition costs and other non cash items, was $10,400,000 This was at the top or better end of our guidance range, driven by the lower operating expense and compared to adjusted EBITDA losses of $9,800,000 in the prior quarter and $10,500,000 in the year ago quarter. Excluding the accrual I referenced earlier, adjusted EBITDA loss would have come in at $6,400,000 and represented our smallest adjusted EBITDA loss since becoming a public company. Overall, from a financial perspective, we have continued to optimize our cost structure and remain well positioned to see considerable margin leverage as revenue levels grow. Regarding the balance sheet, as Jan mentioned, subsequent to quarter end, we announced new $75,000,000 strategic financing facility with Clean Hill Partners and other investors.

The facility provides for an initial term loan financing of up to $37,500,000 Of this amount, 14,300,000.0 closed and funded on July 2. The balance of $23,200,000 of the initial financing is expected to close in the current quarter, subject to shareholder approval on the issuance of associated warrants. The facility also provides for up to an additional $37,500,000 in funding to be available to the company as may be needed in the future upon mutual agreement between the company and the investors for a total potential financing of $75,000,000 With that, let us turn our focus to the outlook. Our targets for the third quarter call for the following: revenue between $18,000,000 and $24,000,000 At the high end, it would represent 20% growth sequentially. However, we have set the midpoint at up 5% with the second quarter, reflecting the impact of market uncertainty on our customers’ projects.

Non GAAP gross profit between negative $2,400,000 and positive $600,000 or between negative 13.4% and positive 2.5% of revenue. Non GAAP operating expenses between 7,200,000 and $7,900,000 and finally, EBITDA loss between $10,800,000 and $6,800,000 We continue to expect to see a significant ramp in revenue in the fourth quarter. With that, we conclude our prepared remarks, and I’ll turn it over to the operator for any questions. Operator?

Conference Operator: Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you will need to press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. Please standby, while we compile the Q and A roster.

Our first question comes from Philip Shen from Roth Capital Partners. The floor is yours.

Philip Shen, Analyst, Roth Capital Partners: Hey, guys. Thanks for taking the questions. First one’s on the outlook for bookings. I think you guys said that the regulatory uncertainty has slowed some customer project planning. That said, we’re just on the Shoals call, and their bookings are accelerating.

I think they had a 1.2 book to bill And I performed on their bookings, we’ve seen some of the other players do the same. And so I wanted to see if you could help us understand perhaps the difference with your outlook versus what they’re delivering? Is it exposure to a different set of customers? Or what might be different or the same as well? Thanks.

Jan Brandt, President and Chief Executive Officer, FTC Solar: Yeah, great question Phil, I appreciate that. Yeah, mean, look, I think ultimately we’re transitioning into a marketplace of 1P and I can’t speak to the rest of the market peers, but certainly some of them are a lot more established with existing players and more tier one EPCs and IPPs. And that’s obviously what the setup is for FTC in terms of getting to the bookings. As we roll out the 1P, we have to really position the company for success, which I think we’re making a lot of traction to do, including the $75,000,000 raise, putting the sales team in place and then obviously getting our roadmap finalized with the product. And now the bookings are expected to come in in order to get additional growth in this 1P inflection that we’re transitioning into.

Philip Shen, Analyst, Roth Capital Partners: Okay. Thanks, John. Appreciate that. And so as we look ahead, when do you think we could see an acceleration of bookings? Should we think about it for this quarter, or do we need to get past the executive order?

And I guess that’s coming around soon, so maybe we so do we see acceleration in Q3, Q4, should we look at it more in 2026? Thanks.

Jan Brandt, President and Chief Executive Officer, FTC Solar: Yeah, we’re certainly optimistic around the bookings accelerating significantly. Obviously, we’re coming from a 1P base that’s relatively low and breaking into a market that has strong peers. The executive order, I think, will determine what the pace and scale is of safe harbor, whereas the existing projects that we’ve been working on for quite a bit, you know, those projects getting financial close and getting the financing in place to build. You know, I think when we talk about the dynamic nature of the legislative environment, you know, not every IPP and asset owner looks to hold the asset beyond development stage. And it was really difficult for those kinds of clients, which tend to be a large portion of ours from closing and ultimately getting into construction when they’re uncertain around how tax equity, etcetera, will play.

I think that portion being behind us, safe harbor will be some version or have some influence on timing of scale, but we think ultimately we’re well situated for both. And on safe harbor in particular, our ability to be agnostic on module with our torque tubes plays really well with asset owners being able to safe harbor something while not having all of their material supply figured out.

Philip Shen, Analyst, Roth Capital Partners: Okay, got it. Thanks. One last one for me. I know you don’t have any guidance for ’26 and can’t guide there, but I was wondering if you could talk through how you expect the year to play out and maybe provide a bit of a margin trajectory between now and year end ’twenty six, if you guys can? Or if not, perhaps just a little bit of color on how to help us frame the situation.

Thanks.

Jan Brandt, President and Chief Executive Officer, FTC Solar: Yeah, I’ll stay away from specifics, but let me frame it. 2026 is shaping to be the pivotal year for FTC. Our roadmap is where we want it to be. Our sales force and sales team in The US and globally have built these relationships that speak to the constructability. In a world where the labor market is super tight and there’s so much solar to be built, saving significant percentage on the installation speeds is what really puts FTC’s value proposition in the forefront, both for bookings, top line and margin.

You know, we’re really optimistic around where we stand. You know, we’ll have more to say in the coming quarters, but that’s the path we’re marching down and executing against. And now we have a lot of the base, the foundational pieces in place, including the balance sheet that we needed in order to be able to do that.

Philip Shen, Analyst, Roth Capital Partners: Yep. Congrats on the $75,000,000 deal and I’ll pass it on. Thanks.

Conference Operator: Thank you for your question. Our next question comes from Jeff Osborne at TD Cowen. The floor is yours.

Jeff Osborne, Analyst, TD Cowen: Hey, thank you. Maybe just a follow-up on Phil’s line of questioning. What is the sort of voice of the smaller IPPs and EPCs? Is it just solely waiting for clarity from the July 7 executive order? Or is there challenges in getting financing and moving the projects forward?

I’m just trying to bridge the gap. My sense is that the third quarter guidance is probably less than you were anticipating maybe two, three months ago. And then what gives you the confidence that assuming it’s that group of customers that have been a bit paused here, what gives you the confidence that they’re going to move forward in the fourth quarter?

Jan Brandt, President and Chief Executive Officer, FTC Solar: Yeah, no, the confidence comes from, we’re working really closely with them. Obviously, you know, a lot of our team has been in and around project finance for, you know, many years. I would say strategically, the main thing that’s happened in capital raise for smaller project developers is putting capital in place not just for individual projects, but for the broader pipeline, given the strategy, you know, on how to maximize the value of those assets sort of came to forefront with less years on the ITC window. So the executive order is going to impact the size and scale of safe harbor and the strategy around, you know, maybe earlier stage projects in the pipeline. But our confidence comes from the fact that there’s usually not just one term sheet from major players that want to buy these developed solar assets.

And you know, so we see those projects transacting and getting to close. And obviously that will then roll into being actionable revenue opportunities for FTC.

Jeff Osborne, Analyst, TD Cowen: Got it. Maybe for you, Jan, or someone else, but if we could just flush out the $4,000,000 charge in the quarter, was that associated with the COE facility and then the associated FEEOC rules that were implemented? Or maybe just describe, a, what the $4,000,000 is related to? And then now that FEEOC is out in the July 4 bill, how is the Sealy what’s the ownership structure of Sealy relative to what’s needed with the new rules?

Jan Brandt, President and Chief Executive Officer, FTC Solar: Yeah, let me have Kathy answer the $4,000,000 I’ll come back and answer the tail end of your question.

Kathy Bainen, Chief Financial Officer, FTC Solar: Okay, sure. Hi, Jeff. The $4,000,000 was related to an agreement that we had in the JV on minimum purchase commitments with Alpha Steel. And we entered that before the facility ever opened. So, that’s what the $4,000,000 accrual is related on.

There’s kind of a lot of different components to it, and so we’re still in discussions with the team, $4,000,000 is the maximum potential impact, and we haven’t made any payment at this point.

Jan Brandt, President and Chief Executive Officer, FTC Solar: Yeah, and so, Fiat doesn’t impact the $4,000,000 accrual. You know, it is there’s obviously going to be a lot of motion across the landscape of manufacturing. So we’re looking at the options for us. We have

Philip Shen, Analyst, Roth Capital Partners: a great

Jan Brandt, President and Chief Executive Officer, FTC Solar: partner in that JV, So there’s a few options. It’s not a large facility, so from a material assistance perspective, it’s really de minimis. So we’re working through it, but we have a good partner and expect to be able continue the work there.

Jeff Osborne, Analyst, TD Cowen: Got it. My last one was just on the capital raise. Great to see, but just what was the sort of the logic or rationale of going that route with the warrant structure relative to I think you had a $60,000,000 ATM that had been untapped for quite some time. So what was the trade off? Did you need the two tranches within short order and just the amount of time it would have taken to come up with the 37.5 relative to using the ATM is less pressure on the stock.

Was that the industrial logic or what was the thought process?

Jan Brandt, President and Chief Executive Officer, FTC Solar: Yeah, think it was opportunistic. I mean, we have now a great partner in Clean Hill. It really signifies the positioning that FTC is in relative to the market and our peers and the differentiated technology. It’s hard to be innovative in something like trackers, right? And, you know, especially the step change that we were looking to achieve in terms of the labor savings and constructability.

So the opportunity arose to do something larger with Clean Hill, we looked at that versus the other options that are on the table. And sort of based on what our optimism says is ahead for us, we wanted to make sure that we had the right balance sheet in place. And our customers have been really positive, like I said in the prepared remarks. It’s opened doors just in the last couple of weeks of customers that we’re looking at watching FTC’s growth and sort of bring us back to the table and bidding work that we were hopeful to get, but weren’t expecting to get this quickly. So we anticipate that this balance sheet enhancement at that scale is going to get us to the point we want to get to a little bit faster.

Jeff Osborne, Analyst, TD Cowen: Perfect. That’s all I had. Thank you.

Jan Brandt, President and Chief Executive Officer, FTC Solar: Thanks, sir.

Conference Operator: Thank you for your question. At this time, as a reminder, to ask a question, you will need to press 11 on your telephone. One moment, please. Our next question comes from Sameer Joshi, H. C.

Wainwright. The floor is yours.

Sameer Joshi, Analyst, H.C. Wainwright: Good morning, and thanks for taking my questions. Just digging deeper into sort of the revenue mix between products and services, obviously, this quarter product revenues were lower, service were higher. Was that question one, was that just seasonality or should we read something more in that? And then part two, how do you see 3Q product mix or revenue mix?

Jan Brandt, President and Chief Executive Officer, FTC Solar: Yeah, Kathy, can I ask you the

Kathy Bainen, Chief Financial Officer, FTC Solar: Yes, absolutely? No, so on services, no, it’s just it’s really just a mix of project and project timing. So in services, we have all of our logistics and delivery services for all of our projects. So it’s the timing of production versus delivery. Plus, we do some engineering services contracts.

So, it’s kind of the timing. We had a pretty large engineering services contract during Q1. I think you’ll see in, I’m sorry, in Q2. I think you’ll see as we move into Q3, you’ll see a little bit more tilt towards the production side of it as you go into Q3.

Sameer Joshi, Analyst, H.C. Wainwright: Understood. And as a corollary to that, the guidance or rather the outlook for 3Q gross profit is higher than what you saw in 2Q. Is that, again, because of revenue mix, is that because of elimination of certain accrual charges you talked about?

Kathy Bainen, Chief Financial Officer, FTC Solar: Yeah, it is a combination. It’s a combination of revenue mix. It’s also a it’s the $4,000,000 impact of that $4,000,000 accrual in Q2.

Sameer Joshi, Analyst, H.C. Wainwright: Understood. Thanks for that. And then just following up on previous questions regarding the financing, do you expect this timing of the drawdown to be alongside your expected bookings? And also, can you just help us understand, relative to a project being installed and constructed, What is your revenue recognition timeline on that?

Jan Brandt, President and Chief Executive Officer, FTC Solar: I think your first question is the correlation between the second tranche of the capital drawdown. That doesn’t have relation to anything project related. It’s just a function of meeting the shareholder vote. Kathy, do you want to give some light on revenue guide, the revenue recognition to the extent that we share that?

Kathy Bainen, Chief Financial Officer, FTC Solar: Yeah. So Samira, our revenue recognition, I think, similar to all of our competitors, we’re recognizing revenue over time as a project progresses through the production lifecycle of the project. So, know, once execution begins and production begins, we recognize that it’s based on percentage of completion throughout the project.

Sameer Joshi, Analyst, H.C. Wainwright: Got it. Understood. Thanks for taking my question.

Conference Operator: You’re welcome. Thank you for your question. At this moment in time, I’m showing no further questions. So, I’d like to go ahead and conclude the call. Thank you for your participation in today’s conference.

This does conclude the program, and you may now disconnect.

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