Array Technologies, a utility-scale solar tracker company, reported a net profit of $19.34 million for the fourth quarter (Q4) of 2023, an improvement of 268% year-over-year (YoY) from a net loss of $5.25 million.

The company attributed the increase in profit for the quarter to structural changes around procurement, pricing, and value optimization of products.

Array reported revenue of $341.62 million in Q4, registering a 15% YoY decrease against $402.07 million. The decrease in revenue was attributed to a decline in average selling prices (ASP) due to lower input costs.

The adjusted gross margin saw an increase from 20.5% to 25.7%, propelled by better pricing and a rise in non-tracker sales.

The adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the current period was $48.2 million, a decrease from the prior year’s $51.7 million. This decline was driven by approximately $13.5 million in one-time charges during the quarter, but this impact was mostly mitigated by improved gross margin performance.

Array said structural enhancements throughout the year improved the margin profile, doubling the adjusted EBITDA to $288 million and generating $215 million in free cash flow.

The commitment to strengthen the balance sheet led to the repayment of $87 million in outstanding debt. The year concluded with a cash balance of $250 million and total liquidity of $424 million, including the undrawn revolving credit facility.

Kevin Hostetler, Chief Executive Officer, said, “We enter 2024 with strong momentum and meaningful additions to our U.S. pipeline, which has tripled since the second quarter of 2023. Our global order book has increased to $1.8 billion, fueled by $600 million in Q4 2023 bookings. This demonstrates the attractive ROI’s and levelized cost of energy (LCOE) enabled through our products, software and services.”

Full Year 2023

For the full year, the net profit was recorded at $137.24 million from the $4.43 million reported in 2022.

The company’s revenue stood at $1.58 billion, marking a minor decrease of 3.6% YoY compared to $1.64 billion.

The revenue decrease was influenced by lower ASPs resulting from reduced commodity cost inputs, along with relatively stagnant volume, and the impact of the $23.2 million Brazil ICMS reclassification (a VAT levied by the Brazilian states on the circulation of goods and the provision of interstate and inter-municipal transportation and communications services).

On the positive side, the adjusted EBITDA more than doubled, reaching $288.1 million, driven by enhanced gross margin performance.

The free cash flow amounted to $215.0 million, reflecting an improvement of $84.1 million from the previous year, attributable to increased profitability.

Excluding the one-time legal settlement proceeds of $42.8 million in 2022, the improvement in free cash flow was $126.9 million.

During the year, the company increased global capacity to nearly 50 GW, with more than 30 GW of U.S. capacity, capable of sourcing 85%+ domestic content at scale. The company also announced a new 215,000-square-foot manufacturing facility in Albuquerque.

In terms of product, software, and service highlights, the company launched comprehensive field services and customer training solutions to reduce operational downtime and increase productivity and quality in the field.

In May 2023, Array Technologies reported a profit of $13.6 million for the first quarter of this year, mainly due to higher shipment of its products at a higher average selling due to improved pass-through pricing.