Good day and thank you for standing by. Welcome to the FTC Solar Fourth Quarter and Full-Year 2021 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. [Operator Instructions]. Please be advised that today's conference maybe recorded. [Operator Instructions]. I would now like to hand the conference over to your host today, Bill Michalek, Vice President, Investor Relations. Please go ahead.

Thank you and welcome everyone to FTC Solar's fourth quarter and full-year 2021 earnings conference call. Prior to today's call, you have likely had opportunity to review our earnings release, supplemental financial information and slide presentation which were posted earlier today. If you've not reviewed these documents, they are available on the Investor Relations section of our website at ftcsolar.com. I am joined today by Sean Hunkler, FTC Solar's President and Chief Executive Officer; and Patrick Cook, the company's Chief Financial Officer. 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 speak 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, we will be discussing 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. In addition, we'll discuss our executed contracts and awarded orders, and our definition for this metric is also included in our press release. With that, I'll turn the call over to Sean.

Thanks, Bill, and good morning everyone. We covered a lot of ground in our Business Update call in January. So we'll keep our prepared remarks today relatively brief. I'll start with a few fourth quarter and other recent business highlights. First, our fourth quarter revenue grew approximately 92% sequentially, and 130% year-over-year. This was significantly ahead of the top end of our guidance range, as we had some pull forward of revenue previously expected in Q1. Even though revenue was above the range and gross margin saw strong improvement, we recorded a $3 million reduction to revenue and margin related to a reserve for a potential customer credit. This caused our adjusted EBITDA to come in at the lower end of the range. Well once we normalize for this reserve, and the incremental impact from logistics of about $1.8 million, our non-GAAP gross margin in the quarter would have been in the negative 2.5% range, which puts our performance on target to achieve our profitability goals in 2022. Regarding SunPath, we have added three more contracts since our last earnings call, bringing our total to seven. We also recently launched a new turnkey DG offering targeted at the profitable sub 20 megawatt segment of the market. This is a growing market with favorable pricing and margin, with average PPA prices that are two times that of larger systems. Based on a significant amount of customer feedback, we listened and acted and have worked over recent months to develop an offering that will address market needs and specific customer pain points, while maintaining all the benefits of an FTC Solar system. We have an EPC partner lined up and have already won our first two projects. We believe this business can achieve higher than our average target margin profile, and can…

Thanks, Sean, and good morning, everyone. Let me just add that I am pleased to be taking on this new role, and to have the opportunity to continue serving FTC Solar and its shareholder in new ways. I will continue to be very closely aligned with the finance team as well as the investor community and then committed to ensure that we have a smooth transition. While this means there will be changes to my scope of responsibility, there'll be no change in my effort and dedication to assist Sean and the executive leadership team to meet our near-term and long-term objectives. I'm also excited to welcome Phelps to the team. I've had the opportunity to work with him in the past and believe he'll make a great addition to FTC Solar. So with that, let's dive in to my prepared remarks, which will cover additional detail regarding our fourth quarter and full-year performance and our outlook. And as a reminder, our year-over-year comparisons reflect the significant amount of growth in our personnel and corporate infrastructure ahead of becoming a public company, which occurred in the second quarter of last year. These items make the year-over-year comparisons a bit less meaningful. Beginning with the results for the fourth quarter, total revenue was $101.7 million, which was above our target range due to accelerated production and product delivery, pulling forward revenue we had initially anticipated in Q1. This revenue level represents an increase of 92% compared to the prior quarter, driven by higher product volume and an increase of 130% year-over-year on higher volume in ASP. GAAP gross loss was $8.6 million, or 8.4% of sales compared to $8 million, or 15.2% of sales in the prior quarter. This strong improvement in margin quarter-over-quarter and was actually muted by the reserve…

Thank you. [Operator Instructions]. And our first question comes from the line of Donovan Schafer with Colliers Securities. Your line is open. Please go ahead.

Hi, guys. Congratulations on the results. With the pull forward from 2022 into Q1, this fourth quarter, I'm just curious, is there anything specific that was sort of driving that in terms of maybe modules being released earlier than expected or what changed in terms of your prior expectations to what really unfolded in the fourth quarter that allowed or enabled that significant pull forward in revenues?

So, thanks for the question, Donovan. It really I guess, I would say several factors. One is working with the suppliers and some customers requesting additional progress on certain projects. And so we were able to support that with capacity that was readily available. It's -- the capacity itself is a bit of a sign of what's going on in the market that in some areas, the steel demand is softening, they seem to be building only as many automobiles as they can get semiconductor components, it seems like in some markets, like in the China real estate market for second and third homes, things are slowing a little bit. So there was definitely more capacity available in working with our suppliers. And then again, some customers that wanted some additional progress on projects that we were able to support.

Okay. Actually I'm curious, because I know with module imports, there's some challenge there, kind of knowing what type of modules you might be able to get with sort of EPC developers, EPC sometimes scrambling in some cases, or just reworking things to see what, working with what's available in terms of versus necessarily what they were originally planning for. So has that been a factor at all, in terms of maybe a project that originally was going to use one type of tracker, maybe switches to your tracker, just because the modules that happens to arrive are better suited to your tracker design, is there anything like that kind of a factor, or even on the steel side changing the steel prices, switching things up?

So it's been interesting. As we talked about in the update in January, there's a bit of choppiness in the market regarding module supply. And as you know, the big factor behind that is the WRO, and then more recently, the new version of AD/CVD. And we've seen some interesting things. We've seen requests for bids, where they're using multiple modules on a project. Typically in the past, you'd see a single module for any particular project. We have seen the modules change from what was originally requested, and we've seen a change order to change the modules to redesign for a different module. Of course, our tracker as you know is module agnostic, and so we can accommodate any module. I haven't seen anyone make a change in the tracker choice. Typically when they contract they've kind of worked through all that already. But the module choppiness continues until WRO is fully resolved. That being said, there are some positive signs of additional module flow opening up. But frankly we just, we're looking in anticipation of WRO getting completely resolved. And until then, it'll be I think they'll just continue to be some choppiness in module supply.

Okay. And then just one last question and I'll get back in the queue. With the reserve for the credit for the customer, that you talked about I know something I've really kind of honed into and take an interest in is these, as you guys very unique approach to damping. You had the white paper that you put out last week. And I was pleased to see that in terms of just my own sort of interest. But the -- I also know that because of the kind of unique and novel approach, I think it was back in 2019 or 2020, you guys had, you did sort of a customer credit, or a retrofit of some kind, because the uniqueness of your damping approach put an unusual amount of strain on the damper bracket. And so some of those brackets were had broken and you had to go back and kind of retrofit them. So is the $3 million credit related to something along those lines, where there's sort of some bit of a learning curve around this kind of unique and novel approach, or is that -- is there something different there, just any kind of elaboration would be great?

Hey, well, Donovan, thanks for noticing the white paper, we're really proud of the IP that we have and the unique damper system we have that provides us with great performance in high wind environments. And so we, being excited about that and excited we're [Technical Difficulty]. The $3 million that we referenced, yes, that's simply a small matter of payment discussion between us and a customer so no -- it's no relation whatsoever to the technology or any kind of a warranty issue or anything like that. It's just a small payment issue that we're working through with the customer.

Okay, that's great, fantastic. Well congratulations again on the quarter. And I'll jump back in the queue. Thank you, guys.

Thank you. Thank you.

Thank you. And our next question comes from the line of Kashy Harrison with Piper Sandler. Your line is open. Please go ahead.

Good morning, all. Congrats on the revenue pool. And then, thanks for taking the question. So my first question is on the HX acquisition. I was just wondering if you could talk about Slide 6 specifically, what drives your confidence in going from $10 million of revenues in 2022 to $59 million of revenues in 2023, is that -- what's driving that confidence?

So we did extensive due diligence. We've since the beginning, our company has had an M&A function, that's always out looking at potential opportunities. And so when this one came about, we gave it to the team to do some really extensive due diligence. So we looked into the pipeline, we had connections made to their customer base. And the Founders of this particular company are folks that we trust, because many of the folks in our company have worked with them in the past. And so through the due diligence and review of the pipeline, we believe this is a very credible plan that they put forth, and that with the support of the strong balance sheet of FTC we can achieve. I don't know, Patrick, do you have any further comment on that?

Yes, no, I mean, I think from our perspective, just the level of kind of granularity and transparency that the HX team allowed through kind of the due diligence process and engaging with their customer base and their supply base gave us kind of an inside view on what their overall pipeline and their deep relationships with the customers and partnerships were. And then also with the ability to kind of scale within FTC allows them to go meet these production targets for the customer. So it's really just a combination of those items, and really kind of centered around the transparency and with regard to the due diligence process.

Got it. And then maybe switching gears to the base business, on the contracted and awarded $606 million, it was lower than the $692 million disclosed last time, what's driving that decline and then how much of the -- what portion of that $606 million is aimed for 2022?

I'm sorry you broke up there at the end. Do you mind repeating that the last piece of your question, Kashy?

Oh, apologies. I said, what piece of the $606 million is for delivery in 2022? I think last time you indicated it was $350 million. So I wanted to get an update on that number?

Yes. So we, since we guided to 2022, and we continue to reaffirm the guidance, basically the $415 million to $460 million. So, essentially, since we're providing the guidance we're really just focused on that particular revenue number for the year.

Got it. And the driver of the decline from -- from $692 million to $606 million what's the driver there?

Yes, I mean, I think it's really kind of relates to what we're seeing is project kind of push-outs in terms of PO execution as relates to just overall module availability. I mean, I think the good news, what we're seeing no cancellations, and we're not seeing that FTC's are losing projects, just decisions aren't getting made in the overall macro environment. And we're seeing a lot of momentum in terms of our overall pipeline. Our sales engineering teams really working overtime with our customers, bidding two or three different module suppliers in order to once the module supply gets turned back on to be effectively turn the purchase order and start ultimately executing. So that's really kind of the driver, but our bidding activity remains high. And we aren't seeing FTC losing projects in the first quarter. It's really just tied to project decision push-out.

It's just a little bit of the ongoing the choppiness in the module supply caused by primarily WRO. And as I mentioned, we are seeing some positive signs, in terms of certain flows being approved and modules from certain suppliers coming back in. But still until it's completely resolved, I think you'll see this level of choppiness.

Got it. And then maybe just a last one for me. Following the invasion of Ukraine, we've seen U.S. steel prices or at least the forward-curve move up here. Just what -- and it's a bit, but they're still below last year. And so I'm just curious how current or recent steel prices are tracking relative to your expectations that were incorporated in the full-year 2022 guidance? Thank you.

So we are, okay, at this point with our steel pricing. Remember, most of our steel is sourced internationally, though we are prepared in the event that some version of build back better comes about that requires U.S. content, we'll be able to support that as well. But we see the international pricing is still in line with our expectations with the plan for the year. The other thing is that we've really added to some expertise to the team, and particularly in the areas of steel and logistics, and that's helping us as well, in terms of managing with our steel suppliers. And finally, the fact that we have, enough scale and volume now to really matter to those suppliers is helping as well. But we're still aligned with expectations.

And Kashy, the one thing I think it's important to note is how we bid our projects. We're refreshing our project bids inside of every two weeks and not take the steel exposure on ourselves and really working to pass that off to the customer. So that allows us in these kind of commodity fluctuation pricing to make sure that we're able to kind of ultimately maintain the margin by having that transparent relationship with our customers.

Thank you. And our next question comes from the line of Pavel Molchanov with Raymond James. Your line is open. Please go ahead.

Yes, thanks for taking the question. The revenue that you expect to get from the new acquisition, what's the geographic mix of that? So I imagine it's much more international versus your legacy business; is that correct?

Yes, that's exactly right, Pavel. So as you know, our international expansion has been driven by the boots on the ground strategy. And so as this opportunity came about and we looked at it, we felt that, while our organic approach has yielded results, we thought this approach would help us to accelerate in international markets. And so, we talked in the announcement about the opportunity in Middle East, in China, in Africa. One of the good things about this acquisition is the relationship that the Founders have with some of the large Chinese EPCs. And as you know, a lot of the business outside China in certain markets like Africa, like Middle East are driven by those EPCs. So, we're really excited about not only opportunity in China, but the opportunity outside China. And this is all pretty much international business for us.

Yes. In that context, I cannot help by ask kind of the obvious political dynamic here, since this will now be owned by an American company. Would Chinese project developers be comfortable purchasing from effectively a U.S. equipment supplier?

So we as a consequence of this transaction, we'll have people in China dealing with the Chinese EPCs. And we've done some due diligence in that area. And we feel very comfortable that in fact, the association with us is going to be a positive. It'll help enhance the quality reputation, for example, the engineering reputation, et cetera, which are all really important factors. And frankly, on the ground, it's still a U.S. company it's not necessarily a negative in the China business environment.

Thank you. And our next question comes from the line of Maheep Mandloi with Credit Suisse. Your line is open. Please go ahead.

Hey, good morning. Thanks for taking the questions. Can you just talk more about the HX tracker acquisition? How much of the business you're kind of expecting in 2023/2024 comes from the Chinese markets versus other markets. And should we consider this as a similar EBITDA margin business, like the core business? Thanks.

It should definitely be considered a similar EBITDA performing business and as the current business and the expectations that we have for the current business. It's a mix in terms of the pipeline. So they have a pretty well distributed pipeline that includes China that includes Africa that includes the Middle East. And so we're expecting a fairly robust mix across those markets. And so that's what we've included in the guidance that we're providing in terms of both the revenue contribution and the EBITDA contribution. We expect it to continue to grow over time.

Got it. Well does it make more than half is China versus rest of China?

Yes, I think that's a fair assumption roughly half and half.

Got you. That's helpful. I mean does this product help the DG market push also or does DG product is going to be the 2P product for you?

So our focus today in the DG market is with our Voyager 2P product. So let's -- we'll continue to -- with the focus that we announced in January in terms of the DG market with our Voyager 2P product. In the long run it's exciting that we'll have this portfolio of multiple products. But for now we'll keep the focus, we'll focus our Voyager 2P product in terms of our plans for DG.

Got you. That's helpful. And then just quick one last one for me just more on the macro side, solar macro rather. Since the last two months as you fancied, when you first spoke about WRO issue as kind of in the industry. Have those issues or challenges changed? And are you expecting any accelerated resolution for the WRO issues in the industry. And on top of that are you guys seeing -- kind of seeing any worries around the anti-circumvention investigation against the Southeast Asian module manufacturers.

So we see progress on WRO. But frankly, we need to see complete resolution for the module supply to get back to normal. Because even with some of the module flows release and module flowing back into the country for the module manufacturers that have confidence to start up factories again, I think, you'll need to see a more open environment in terms of the flow. So, we're optimistic that these issues with WRO will get resolved. The timing, of course is not clear to us, or it's no clear to us than it is to anyone else. But we've seen some positive signs lately. And that's the good news. On AD/CVD, the fact that Commerce asked for some more time on this latest version of AD/CVD. We'll have to see, in the short-term, we'll all hear whether they're going to do the investigation or not. And we've heard opinions that run the gamut from they will not investigate because of the additional uncertainty will cause in the module supply, particularly in the current market, where there's still this WRO overhang and then we've heard on the other hand, that there's -- there are reasons for the investigation that will continue. So we're watching it very, very closely and hope to see it resolved positively over the next couple of weeks. Thank you.

That's really helpful. Sorry, go ahead. That's all from my side. Thanks for the question. I'm done.

Yes, thank you. Thank you.

Thank you. And our next question comes from the line of Philip Shen with ROTH Capital Partners. Your line is open. Please go ahead.

Hi, everyone. Thanks for taking my questions. I was wondering if we could dig into the HX acquisition just a bit more. How long did the process take, who else did you consider in your M&A process and how are you thinking about the risks of diving deeper into China while the world is decoupling and you expect the someday offer an a 1P tracker in the U.S.? Thanks.

Yes. So we looked at multiple different opportunities. Obviously, I can't name the names. But our M&A activity has been active since the beginning. And we've all -- we're always open to looking at opportunities obviously, it's got to fit within the culture of our company, and the criteria that we set for such activities. And HX, frankly speaking is a fantastic fit for us. And in particular, the fact that the Founders are people that we have experience with and frankly, have a pretty deep trust and has really been helpful to us. And so it was something that we did over a period of months in terms of doing the due diligence, and now we've been able to sign the definitive agreement. We're really excited about that. And as we mentioned, we hope to close the transaction in Q2. In terms of the 1P tracker, so today it's our intention to continue the focus that we have of our Voyager 2P product in the North American market. And for the 1P tracker that's coming with HX to be focused on those markets that HX has good contacts that are helping us by expanding our international presence. Will we one day market a 1P in the U.S.? Well, that's that I would say, determined. We'll just have to look at the opportunity and as we learn more about the HX 1P tracker, that situation is certain to evolve. But for now, we're going to very much remain focused on those international markets for the HX 1P tracker and the North American as well as some of the international markets where you've seen our focus in the past for the Voyager 2P.

Thanks, Sean. Our check suggests a substantial amount of megawatts or gigawatts are being installed without modules, what percentage of your deliveries do you think this year are going to be for projects that don't have the modules yet, how do you expect that to trend by quarter and what do you see their ahead? Thanks.

Yes. So there are some unique things going on in the current market given people's uncertainty. We've seen, we mentioned we've seen projects now with multiple modules, we've seen projects where the modules change. And then you're right we've seen people who are doing projects that maybe don't have the module with 100% certainty, which is unique from the past. But I would say that's still a bit the minority of things that most projects, the customers have a sense of which module they're going to use.

Right. And are you delivering trackers to projects without modules at all, where they expect to take delivery of the modules in some future period, that may be still uncertain?

Yes, Phil, this is Patrick. From that perspective, if there are developers that have line of sight to modules, but it's out in the call a distant future, they do feel comfort around placing the order for the tracker at that point. So the answer is yes to your question.

Okay. Thanks, Patrick. And then as it relates to your quarterly guidance, thanks for all that detail, it's super helpful. The transition from Q1 to Q2, we're seeing a jump in margins. Can you talk about the risks around going from call it the midpoint 0% margin in Q1 to the 12% midpoint in Q2 and how conservative that that look is? Thanks.

So we're just as we mentioned before, we reaffirmed the guidance for 2022, and are providing the quarterly guidance for the first quarter. So the -- we're not refreshing the indicative numbers that we had given previously. Though, like I said, we've reaffirmed the guidance, the annual guidance. And so as I think about it, we've talked before Phil about the top to bottom program we have in the company to drive gross margin improvement. And so we have all aspects of gross margin are being focused on value pricing, reducing the steel content, reducing the steel cost, reducing the logistics costs, optimizing the logistics costs. So there's a huge effort across the company with multiple elements to drive the improved gross margin performance. And so I would say, risks come with each of those, right. In terms of the engineering work we're doing to reduce steel content, the negotiations we're doing to establish MSAs with steel providers, the work that's going on in terms of logistics. The risks are also, the externality so one risk is that WRO persists and does not get resolved. Another risk would be the AD/CVD becomes a substantial issue in terms of driving uncertainty. Of course, there's, we're also dealing with the tragedy of a war right now, too. And so all these, there are all these external factors as well that bring risks to our plan. But we're absolutely, absolutely laser-focused on all the things we can control. And that's the engineering work, the procurement work, the logistics work; we are just absolutely laser-focused on achieving the objectives for our plan.

Great. Thanks for the color, Sean. I'll pass it on.

Thanks, Phil.

Thank you. And our next question comes from the line of Julien Dumoulin-Smith with Bank of America. Your line is open. Please go ahead.

Hey, guys, it's Alex on for Julien. Just two quick ones for me, given the significant cohort on revenue you guys had here in Q4, which looks to modestly reverse a little bit in Q1. I mean, should we expect any further spillover into Q2? And I guess, any sort of perspective challenges you might see on margin pressure there would be kind of the first question? And then I have a follow-up on that.

Yes. So I think obviously, we feel good about the guidance that we've provided for Q1. So I think we are -- it's absolutely our expectation will be in the range that we've just given for each of the parameters for Q1. So I don't think we're expecting a revenue surprise, so to speak, or any spillover. So does that address your concern or question?

I was really asking about, I guess, given that you have a sizable pull forward roughly like $25 million or so, I guess, versus your guide. Midpoint lowered a little bit into Q1, obviously, not to the same degree, though. I guess I really asked more about Q2, or I guess, prospectively, Q3 as well, if that makes any sense?

Yes. I don't -- at this point, no, I don't have any -- no, I don't have a concern that, that's going to happen in the out quarters.

Got it. Appreciate it. And then just one more, I know we've talked a lot about the acquisition here. I'm just glancing at HX tracker and kind of the projects that they've been involved in. I mean, it seems like there's sort of a decent base of exposure there at utility scale, ground mount and even some agrible takes it looks like. So kind of curious there, I mean as far as synergies and takeaways that you might have out of -- what they're doing in the styles of projects that they're doing, what do you think that you can take from sort of their technology and how they've applied things into, I guess, your legacy U.S. business, if you will? That's all from me. Thanks.

Yes, so we've done -- as part of the due diligence, we've done a deep dive on their engineering team, their IP portfolio and looked at projects either constructed or under construction. And so we've really been impressed by the quality of their engineering team and they seem to take a 1P approach similar to the approach we took with the Voyager 2P where a group of engineers got together who had a lot of developer experience as well and said, what is the -- how do we build the best 1P tracker that solves the customers' issues. And so we've really been impressed by the quality of engineering work. And we think that, that having that team of engineers added to our team of engineers that we can -- we'll see additional opportunities to both improve their 1P but also to improve the Voyager 2P working together as one company. So yes, the -- I would tell you that we're really jazzed about the quality of engineering that we've seen there and the quality of IP, and we think there's definitely opportunities for us to work very closely together.

Thank you. And we have a follow-up question from the line of Donovan Schafer with Collier Securities. Your line is open. Please go ahead.

Hi guys, thanks for let me get another follow-up in here. So the steel efficiency increase, you say that was a 20% increase in 2021 over the course of the year. I'm going to assume that sort of translates into a 20% -- taking 20% of the steel out of the design. Correct me if I'm wrong on that. But I'm curious because I did watch the webinar in September with PV Magazine kind of going through all the details on what you're doing again, with this kind of extreme dampening approach and how that allows you to take steel out of it. And it kind of gives a sense of where you're at in the process because there's the initial wind tunnel testing and then you've got workers actually out in the field standing on ladders, kind of like shaking the modules to collect some data points on stiffness, different parameters there. So you're in this kind of -- I almost want to call it like maybe a last phase or something where you're collecting all those nodes and all those data points of the mechanics of the structure. And then to say, based on that, how can we take out even more steel. So I'm curious, do you have -- is there like any kind of a rule of thumb or bracketing or something a sense of how much more realistically steel you could actually take out, of course, obviously, you couldn't take another 50% out or if there's diminishing returns, maybe even taking another 20% out could be challenging. So just kind of curious if there is any sort of sense of what's -- what are realistic expectations about getting more steel out?

So Donovan, it's really an interesting area. There are a lot of people in the company like myself with a deep semiconductor background. And as you know, semiconductor is all about continuous improvement. And in the company, we actually have an R&D facility; we call Solar Tech that's outside or close to the Denver Airport as part of an overall R&D science part there. And so we're actively doing experiments looking at every component in the Voyager 2P system to look for opportunities to optimize and further reduce the steel content. We also have a lab here in Austin that we're able to do analysis on each individual component. So as we look at making improvements in the system, as we look at reducing the steel content, we can make certain that we're not doing anything that affects the overall quality of the system. And so it's this continuous improvement effort that we'll never cease that we'll continue to remove steel over time out of the Voyager 2P system. It's just a continuous engineering improvement effort. And then ultimately, you could see that we'd ultimately have a rev of the design, a new version of the product, so to speak, eventually over time. and basically have an overall product roadmap to look at improvements and then raving from one version to the next. But it's just an overall continuous improvement effort. I think if you also go back to the Investor Update we did in January, there's some materials there, too, that talk a little bit about the continuous improvement and reduction in the steel content. But it's an ongoing effort, and we'll always look to see where there's opportunities to improve the product, where there are opportunities to remove steel content. It's a really holistic approach.

Okay, great. Thank you. And I'll sneak in one. I'll be a little greedy here and sneak in one last question, if possible. In the U.S. 2P for a long time has really been seen as something that could do very well in the United States as we move to more constrained sites with sort of fewer piles, short of rows and being able to accommodate more uneven terrain. And so historically, that was kind of an important thing to say, why would anyone go to 2P, but I know you've also really wanted to be competitive even in sort of the big, flat, open sites. And there's the Samson project in Texas it's kind of a 1 to 0.2 where you had to win there. But in the current -- in your pipeline and your backlog and kind of where you're at now and going forward, do you see -- are you having the majority of your success in places where you're really playing to the strengths like the Carolinas or places where you have to drill rock or those challenging plays or soils or riverbed constraining sites or are you getting a lot of projects? Is it more or even more than maybe you would have expected in big flat land in Texas or California or elsewhere? Just curious what's going on there, if there's been changes surprises in one direction or another, if it's kind of in line with how it's been in the past a year or two?

Yes. So there are quite a few advantages to the Voyager 2P system and the basic constructability, meaning the reduction in component count versus competition, the reduction in DC cost with the four string architecture, the man hours per megawatt in terms of the constructability advantage. And those are all things that apply on all different sites. And that's why exactly like you said, there are flat, there are sites we do quite well. But then there are also -- there's a whole another set of advantages for the 2P system. For example, on slope sites, right, we can accommodate like a 17.5% grade. There's also the benefit on sites that are difficult terrain where we have a much lower foundation count, and that those apply as well. So we've seen success and continue to see success on both flat sites as well as sites with odd terrain or, I guess, I would say, more challenging terrain. And certainly, it seems like the percentage of sites with the more challenging terrain is increasing over time. Thanks.

Thank you. And I'm showing no further questions at this time. And I would like to turn the conference back over to management for any further remarks.

Thanks very much, operator, and thanks to all of you for participating on our earnings call today, and thanks for the questions. I remain extremely excited about the future of FTC Solar. And in particular, the acquisition of HX Tracker, I think it's really going to help to accelerate our international growth, and I'm super excited about that as well. So thank you again for your time, and thank you for your interest. Take care.

This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.