Array’s second quarter results drew a negative market response, as investors focused on margin pressures and regulatory headwinds despite significant year-over-year revenue and volume growth. Management highlighted that improved execution and operational changes, particularly in the front end of the business and supply chain expansion, drove the sharp rise in sales volumes. CEO Kevin Hostetler noted, “We are reaping the benefits of the impactful work we’ve initiated to strengthen the front end of our business while also expanding and fortifying our supply chain network.” Margin contraction, however, was attributed to rising tariffs and commodity-driven input costs, alongside ongoing order book adjustments.
Is now the time to buy ARRY? Find out in our full research report (it’s free).
Array (ARRY) Q2 CY2025 Highlights:
- Revenue: $362.2 million vs analyst estimates of $291.5 million (41.6% year-on-year growth, 24.3% beat)
- Adjusted EPS: $0.25 vs analyst estimates of $0.20 (27.9% beat)
- Adjusted EBITDA: $38.2 million vs analyst estimates of $53.36 million (10.5% margin, 28.4% miss)
- The company lifted its revenue guidance for the full year to $1.20 billion at the midpoint from $1.1 billion, a 8.9% increase
- Management raised its full-year Adjusted EPS guidance to $0.67 at the midpoint, a 2.3% increase
- EBITDA guidance for the full year is $192.5 million at the midpoint, below analyst estimates of $194.1 million
- Operating Margin: 12.8%, down from 15.5% in the same quarter last year
- Sales Volumes rose 62.4% year on year (-49.2% in the same quarter last year)
- Market Capitalization: $916.3 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Array’s Q2 Earnings Call
- Mark Strouse (JPMorgan) asked about the impact of regulatory uncertainty on near-term bookings. CEO Kevin Hostetler explained that strong interest exists but many customers are deferring firm awards until more regulatory clarity is provided, likely pushing some orders into later quarters.
- Jonathan Mark Windham (UBS) inquired about Array’s international progress and capital structure priorities. President Neil Manning cited uneven international demand, especially in Brazil and Europe, while CFO Keith Jennings emphasized satisfaction with the current capital structure and flexibility for future growth.
- Brian K. Lee (Goldman Sachs) sought details on the drivers of the revenue outlook and margin run rate. Jennings noted that most guidance uplift is volume-driven, with some pricing benefit from commodities, and that margin improvement is expected as legacy contracts roll off.
- Philip Shen (ROTH Capital Partners) asked if legacy debookings and order book volatility are now behind the company. Hostetler and Jennings stated that proactive cleanup efforts have improved order book quality and reduced risk of further debookings, but some future volatility is inherent to project-based businesses.
- Andre Stillman Adams (Oppenheimer) questioned pricing opportunities in the current policy environment. Hostetler responded that pricing power is tied to new product launches and value-added features, rather than broader market price increases.
Catalysts in Upcoming Quarters
In the coming quarters, our team will be monitoring (1) the pace at which regulatory clarity emerges around tax credits and executive orders, (2) the continued adoption rate of new products like Hail XP and OmniTrack, and (3) the ability to maintain or grow margins amid tariff and input cost pressures. The integration and performance of the pending APA Solar acquisition will also be a critical signpost for long-term growth.
Array currently trades at $6.04, up from $5.85 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
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