10-K: Array Technologies Reports Mixed 2025 Results Amid Acquisitions, Tariffs

Array Technologies reported a 40% revenue increase in 2025, driven by Array Legacy Operations and the APA acquisition, despite a significant net loss and goodwill impairment in its STI Operations segment.

Summary

• Consolidated revenue increased by 40% to $1,284.1 million for the year ended December 31, 2025, compared to $915.8 million in 2024.
• Net loss was $52.2 million in 2025, a significant improvement from a net loss of $240.4 million in 2024.
• Gross profit increased slightly by 0.3% to $298.6 million in 2025, but the consolidated gross margin decreased to 23% from 33% in the prior year.
• Array Legacy Operations revenue, including contributions from APA, increased by 62%, while STI Operations revenue decreased by 16%.
• The company completed the acquisition of APA Solar, LLC on August 14, 2025, for approximately $185.4 million, expanding its product portfolio to include solar racking, mounting, and foundation systems.
• A goodwill impairment charge of $102.6 million was recorded in 2025, primarily related to the STI Operations reporting unit, following a $236.0 million impairment in 2024.
• An inventory valuation charge of $29.5 million was incurred in 2025 due to the decision to phase out a non-SmarTrack compatible version of the H250 product.
• The company issued $345 million in 2.875% Convertible Senior Notes due 2031, using the net proceeds to repay its Term Loan Facility and repurchase $100.0 million of its 2028 Convertible Notes.
• The revolving credit facility commitments were increased from $166 million to $370 million, and its maturity date was extended to February 18, 2031, through an amendment on February 18, 2026.
• Research and Development (R&D) costs increased to $9.9 million in 2025 from $6.7 million in 2024.
• Net cash provided by operating activities was $101.8 million in 2025, a decrease from $154.0 million in 2024.
• As of December 31, 2025, the company had approximately 1,200 full-time employees globally.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this as a challenging period for Array Technologies, marked by significant operational headwinds in its international segment (STI) and ongoing market uncertainties, despite strong revenue growth in its core U.S. business and strategic acquisitions.

Positives

• Consolidated revenue increased by a robust 40% year-over-year, reaching $1,284.1 million.
• Array Legacy Operations, including the APA acquisition, showed strong growth with a 62% increase in revenue.
• The net loss significantly narrowed to $52.2 million in 2025 from $240.4 million in 2024, indicating an improvement in overall financial performance.
• The strategic acquisition of APA Solar, LLC expands the company's product portfolio into solar racking, mounting, and foundation systems, enhancing its comprehensive solution offerings.
• Successful negotiation of agreements with key suppliers for sharing Section 45X advanced manufacturing production tax credits, and qualification of certain internally manufactured parts for these credits, provides economic benefits.
• Certain tax provisions of the OBBB, including 100% bonus depreciation and immediate expensing of U.S.-based R&D activities, are expected to reduce 2025 taxable income and improve near-term operating cash flows.
• Debt refinancing with lower interest rates and the extension of the revolving credit facility's maturity provide enhanced financial flexibility and liquidity.
• The D.C. Circuit's re-affirmation of FERC's approach to calculating capacity for PURPA eligibility provides regulatory certainty for solar project developers.
• The company maintained effective internal control over financial reporting as of December 31, 2025, having remediated previously identified material weaknesses.

Negatives

• STI Operations experienced a 16% decrease in revenue and reported a negative gross profit of (1)% for the year ended December 31, 2025.
• Consolidated gross margin significantly decreased to 23% in 2025 from 33% in 2024, primarily due to higher tariffs, reduced 45X amortization, and inflationary cost pressures.
• A substantial goodwill impairment charge of $102.6 million was recorded in 2025, specifically impacting the STI Operations reporting unit.
• An inventory valuation charge of $29.5 million was recognized in 2025 due to the phase-out of a non-SmarTrack compatible H250 product version.
• Cash provided by operating activities decreased to $101.8 million in 2025 from $154.0 million in 2024.
• The termination of the solar Investment Tax Credit (ITC) for facilities placed in service after December 31, 2027 (unless construction begins before July 4, 2026) under the OBBB introduces future market uncertainty.
• New foreign entity of concern limitations imposed by the OBBB could impact the ability of solar facilities to claim ITC and Section 45X credits.
• Uncertainties and delays persist due to domestic content guidance and Anti-Dumping/Countervailing Duty (AD/CVD) orders on solar components, impacting project timelines and order books.
• The rapid depreciation of the Brazilian real and existing pricing pressures in the Brazilian market have negatively impacted project economics and caused customer delays.
• The company is subject to ongoing litigation, including a class action and derivative complaints, which could result in significant costs and divert management attention.

Risks

• Inability to successfully integrate APA's business or achieve the anticipated benefits or synergies from the APA Acquisition.
• Failure to implement effective internal controls over financial reporting for the APA business in a timely manner.
• Demand for solar energy projects may not continue to grow or may grow at a slower rate than anticipated.
• The viability and demand for solar energy are impacted by many factors outside of the company's control, including raw material costs, permitting, and government incentives.
• Intense competitive pressures within the industry from other solar tracker manufacturers and conventional/renewable energy sources.
• Dependence on a relatively small number of customers for sales, with the loss or default of a significant customer potentially harming the business.
• A drop in the price of electricity sold could negatively impact the economics of solar projects and reduce demand for products.
• Fluctuations in results of operations across fiscal periods due to project timing, weather, interest rates, equipment availability, macroeconomic factors, and local permitting.
• Existing electric utility industry policies and regulations, or changes thereto, may present technical, regulatory, and economic barriers to solar energy adoption.
• Interruption of the flow of components and materials from international vendors, including due to tariffs, geopolitical events, inflation, and shipping disruptions (e.g., Red Sea attacks).
• Inability to convert orders in backlog into revenue, leading to potential adverse effects on future revenue and gross margins.
• Reduction, elimination, or expiration of government incentives for renewable energy, or failure to optimize the benefits of such incentives.
• Failure to obtain, maintain, protect, defend, or enforce intellectual property and other proprietary rights.
• Inability to protect the confidentiality of trade secrets.
• Dependence on a number of outside vendors, with potential disruptions if problems arise.
• Delays in construction projects and any failure to manage inventory could have a material adverse effect.
• Significant changes in the cost of raw materials, such as steel and aluminum, could adversely affect financial performance.
• Disruptions to transportation and logistics providers, including increases in shipping costs.
• Defects or performance problems in products, potentially leading to loss of customers, reputational damage, decreased revenue, and significant warranty claims.
• Failure by vendors or suppliers to use ethical business practices and comply with applicable laws and regulations.
• Failure to retain key personnel or attract additional qualified personnel.
• Additional business, financial, regulatory, and competitive risks due to continued planned expansion into new international markets.
• Exposure to risks from currency exchange rate fluctuations between the U.S. dollar and foreign currencies.
• Inadequacy of insurance coverage could have a material adverse effect.
• Failure to effectively utilize information technology systems or implement new technologies could disrupt business.
• Cybersecurity or other data incidents, including unauthorized disclosure of personal or sensitive data or theft of confidential information.
• Failure to comply with current or future federal, state, and foreign laws and regulations and industry standards relating to privacy, data protection, cybersecurity, and advertising.
• Risks and challenges presented by the use of artificial intelligence, including disruption, increased competition, intellectual property issues, data privacy, and regulatory uncertainty.
• Past material weaknesses in internal control over financial reporting, with a risk of future failures.
• Operating results could fall below expectations if estimates or judgments relating to critical accounting policies are based on incorrect assumptions.
• Substantial indebtedness could adversely affect financial flexibility and competitive position.
• Servicing debt requires a significant amount of cash, and there may not be sufficient cash flow from business to service substantial debt.
• Inability to raise additional capital to execute business strategies on favorable terms, if at all, or without dilution to stockholders.
• Issuance of preferred stock whose terms could adversely affect the voting power or value of common stock.
• Provisions in the certificate of incorporation and bylaws may delay or prevent a change of control or changes in management.
• Changes in laws and regulations, including tax laws (e.g., OECD Pillar Two, OBBB), that are applied adversely to the company or its customers.
• Economic, political, and market conditions (e.g., Russia-Ukraine war, Middle East conflict, inflation) could adversely affect business.
• Risks of severe weather events, natural disasters, and other catastrophic events impacting supply chain, project installations, and product damage.
• Severity and duration of public health threats (pandemics) could materially impact business.
• A variety of litigation and other legal and regulatory proceedings in the course of business that may adversely affect business and financial results.

Future Outlook

The company expects less pronounced seasonal variations as its business grows in markets in the southern hemisphere. It anticipates forthcoming Treasury proposed rules will further clarify the potential impact of foreign entity of concern limitations for Section 45X credits in 2026 and future years. The company expects certain tax provisions of the OBBB, including 100% bonus depreciation and immediate expensing of U.S.-based R&D activities, to reduce its 2025 taxable income, lowering current-year cash taxes and improving near-term operating cash flows, though cash taxes are expected to increase in future periods as these benefits normalize. Final determinations by the USDOC for AD/CVD tariffs on CSPV imports from India, Indonesia, and Laos are expected in the summer of 2026. The company expects to finalize customary post-closing adjustments for the APA Acquisition by June 2026 and commence production at its new Bernalillo County manufacturing facility in the first half of 2026. Management believes that operating cash flows and available borrowing capacity will be sufficient to meet liquidity needs in the next 12 months and beyond.

Management Comments

• "We believe our products have greater reliability, lower installation costs, reduced maintenance requirements and competitive manufacturing costs." (Regarding patented DuraTrack design)
• "Integrating such systems into our business model through the acquisition of APA expands our product portfolio to better serve the evolving needs of the solar industry and our customers." (Regarding APA Acquisition)
• "We believe this is the right way to manage a high-quality portfolio and drive consistent margins over time." (Regarding structured cost management and declining certain fixed-price contracts)
• "We continue to monitor the situation and evaluate our procurement strategy and supply chain to reduce any negative impact on our business, financial condition, and results of operations." (Regarding Russia-Ukraine war and Red Sea disruptions)
• "To address the persisting challenges arising from prolonged transit times, we have increased our local sourcing efforts where feasible within certain regions. These measures aim to reduce delays to get the product to project sites on time." (Regarding Red Sea disruptions)
• "To mitigate these pressures on our business, and the volatility in steel and aluminum prices, we have continued to accelerate our productivity initiatives, expand our supplier base, and execute on our overhead cost-containment practices." (Regarding inflation)
• "We believe our success depends on our ability to attract and retain outstanding employees at all levels of our business."
• "We consider relations with our employees to be good."
• "We have a team-oriented culture, which we believe helps us to succeed and drive operational excellence."
• "We are also committed to diversity and inclusion because we believe that it leads to better outcomes for our business and enables us to better meet the needs of our customers."
• "Management believes that our ability to generate operating cash flows in the future and available borrowing capacity under our Senior Secured Credit Facility will be sufficient to meet our future short-term liquidity needs."
• "The Company continues to believe the claims alleged in the actions are without merit and intends to continue to vigorously defend its position in these matters." (Regarding legal proceedings)

Industry Context

StockSavvy.ai notes that the solar energy sector continues to be a high-growth area, driven by electrification and increasing demand from digital infrastructure and AI data centers. Array Technologies' strategic acquisition of APA Solar and its focus on diverse tracker and foundation solutions positions it to capture a broader market share. However, the industry faces significant regulatory uncertainty, particularly with evolving U.S. trade policies, domestic content requirements, and the termination of the solar ITC under the OBBB, which could impact project viability and demand. Geopolitical conflicts and supply chain disruptions also present ongoing challenges for the global solar market.

Comparison to Industry Standards

• Array's flagship DuraTrack HZ v3 uses a patented single-motor, linked-row design, which it believes is inherently more efficient and reliable than competitors' designs requiring one motor per row, such as those from Nextpower Inc. (f/k/a Nextracker, Inc.).
• The Array STI H250 dual-row tracker is ideally suited for sites with irregular boundaries, offering a differentiated solution compared to standard single-axis trackers.
• OmniTrack's flexible design allows for installation on unlevel site terrain, accommodating greater slope and requiring significantly less grading and civil works, which reduces project costs and improves installation timelines for customers.
• SkyLink's PV-powered control system and passive wind stow technology provide unique resilience against extreme weather, protecting solar installations without relying on battery power in low temperatures, differentiating it from systems that might require external power or batteries for stowing.
• The APA acquisition expands Array's offerings to include advanced foundation technologies such as ground screws for rocky soils, helicals for soft soils, c-piles for ideal soils, and ballast for impenetrable soils, providing a comprehensive suite that competes with specialized foundation providers like UNIRAC, Inc. and Terrasmart (f/k/a RBI Solar Inc.).

Management Changes

Corporate Governance

Legal Proceedings

• **Plymouth Class Action**: A putative class action filed on May 14, 2021, alleging violations of Sections 10(b), 20(a) of the Exchange Act, Rule 10b-5, and Sections 11, 12(a)(2), and 15 of the Securities Act, related to alleged misstatements/omissions in registration statements, prospectuses, annual report, and earnings calls. The court granted the company's motion to dismiss on May 19, 2023, and dismissed the action with prejudice on July 5, 2023. Lead plaintiffs filed a notice of appeal on August 4, 2023, and the case is pending decision by the U.S. Court of Appeals for the Second Circuit.
• **Derivative Complaints (Southern District of New York)**: Two verified derivative complaints filed on July 16, 2021, and July 30, 2021, consolidated on August 24, 2021, alleging violations of Section 14(a) of the Exchange Act, breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, corporate waste, aiding and abetting breach of fiduciary duty, and contribution under Sections 10(b) and 21D of the Exchange Act. These cases remain stayed pending the outcome of the appeal of the Plymouth Action.
• **Derivative Complaints (Delaware Court of Chancery)**: Two verified derivative complaints filed on August 3, 2022, and August 11, 2022, consolidated on September 2, 2022, asserting claims for breach of fiduciary duty, unjust enrichment, waste of corporate assets, insider selling, and aiding and abetting. These cases also remain stayed pending the outcome of the appeal of the Plymouth Action.

Related Party Transactions

• The company has five lease agreements for offices, manufacturing facilities, and warehouses in Ohio and Connecticut with related parties owned by certain members of APA's management team. Total costs related to these operating lease agreements were $1.2 million for the year ended December 31, 2025.

Stakeholder Impact

• **Shareholders**: Face potential dilution from future equity issuances and convertible notes. The stock price may experience volatility due to financial results, market conditions, and ongoing litigation. No cash dividends are expected in the foreseeable future, meaning returns are primarily dependent on capital appreciation.
• **Employees**: The company's success relies on attracting and retaining key personnel, supported by a team-oriented culture, competitive compensation, and development opportunities. Severance expenses of $1.2 million in 2025 indicate workforce adjustments in international operations.
• **Customers**: Experience project delays due to macroeconomic factors, interest rates, equipment shortages, and permitting issues. However, they benefit from an expanded product portfolio (APA acquisition), new tracker technologies (OmniTrack, SkyLink, SmarTrack), and comprehensive engineering and technical support.
• **Suppliers**: The company depends on outside vendors for critical components, making them vulnerable to supply chain disruptions and cost fluctuations. Section 45X credit sharing agreements with key suppliers aim to create mutually beneficial economic arrangements.
• **Creditors**: Are impacted by the company's substantial indebtedness and adherence to restrictive covenants in debt agreements. The ability to service debt depends on future cash flow generation, which management believes will be sufficient.

Next Steps

• Finalize customary post-closing adjustments for the APA Acquisition by June 2026.
• Commence production at the new Bernalillo County manufacturing facility in the first half of 2026.
• Complete the reorganization of international operations, expected to be substantially complete in 2026.
• Continue to evaluate additional guidance expected to be issued by Treasury related to the OBBB.
• Monitor developments in the appeal process for the USITC's decision on the aluminum extrusions AD/CVD investigation.
• Anticipate forthcoming Treasury proposed rule to further clarify the potential impact of foreign entity of concern limitations for Section 45X credits.
• Await final determinations by the USDOC, expected in the summer of 2026, for AD/CVD tariffs on CSPV imports from India, Indonesia, and Laos.
• Expects to execute an additional Simple Agreement of Future Equity (SAFE) governing the terms and conditions of an incremental $1.0 million investment in a technology company in the first quarter of 2026.

Key Dates

Recommendation

While Array Technologies demonstrated strong revenue growth in its core U.S. operations and made a strategic acquisition with APA Solar, the significant net loss, substantial goodwill impairment in STI Operations, and a notable inventory valuation charge indicate underlying operational challenges and profitability concerns. The company is navigating complex regulatory and trade environments, which introduce uncertainty. The ongoing litigation also presents a potential overhang. The debt refinancing and expanded credit facility provide some financial flexibility, but the overall picture suggests a need for the company to demonstrate sustained profitability and successful integration of its acquisitions before a more bullish stance is warranted. Investors should hold to observe the effectiveness of management's mitigation strategies and the realization of anticipated synergies.

Keywords

Solar Trackers, Renewable Energy, Utility-Scale Solar, SEC Filing, 10-K, Array Technologies, ARRY, Solar Racking, Solar Mounting, Foundation Systems, APA Acquisition, Inflation Reduction Act, IRA, Section 45X Credit, Domestic Content, Tariffs, Supply Chain, Goodwill Impairment, Convertible Notes, Corporate Governance, Cybersecurity, Financial Performance, Solar PV, LCOE, DuraTrack, STI H250, OmniTrack, SkyLink, SmarTrack