Array Technologies, Inc. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures We maintain “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2024. Based upon the evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at a reasonable assurance level. Management’s Report on Internal Control Over Financial Reporting. The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f). The Company’s management, including the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting based on the Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on the results of this evaluation, the Company’s management concluded that internal control over financial reporting was effective as of December 31, 2024. Our independent registered public accounting firm, Deloitte & Touche LLP, has audited the effectiveness of our internal control over financial reporting as of December 31, 2024, as stated in their report, which appears herein. Remediation of Previously Identified Material Weaknesses The following entity level material weakness was previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023: We have identified a material weakness due to a deficiency in one of the principles associated with the Control Environment component of the COSO framework, specifically relating to a lack of a sufficient complement of qualified personnel at the appropriate levels to perform control activities in support of preparing the financial statements in accordance with U.S. GAAP. 57 Since the fourth quarter of 2023, management has been executing plans to remediate the above material weakness by hiring a robust team of experienced personnel at the appropriate levels. These personnel have been hired at our international and domestic locations, and have prior public accounting and public company experience, technical accounting experience, and financial reporting experience. In connection with these remediation efforts, we have also realigned the accounting functions to strengthen the performance of controls, and enhanced monitoring activities. Considering the fact these individuals have been in their respective roles and were able to effectively perform control activities as part of the financial reporting process beginning with the first quarter of 2024, management concluded sufficient evidence has been obtained to demonstrate the previously identified material weakness has been remediated as of December 31, 2024. The following material weakness was previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023: Control Activities – STI. We did not design, implement, and monitor general information technology controls in the areas of program change management, user access, and segregation of duties for systems supporting substantially all of STI’s internal control processes and we did not design and implement formal accounting policies, procedures, and controls across substantially all of the STI’s business processes to achieve timely, complete, accurate financial accounting, reporting, and disclosures. During the second quarter of 2024, we implemented an Enterprise Resource Planning system (“ERP”) for our operations in Brazil, which resulted in our ability to implement automated controls and General Information Technology Controls, allowing for less reliance on manual controls. In addition, with respect to STI, we designed and implemented formal accounting policies, procedures and controls across STI’s relevant business processes to achieve timely, complete and accurate financial accounting, reporting, and disclosures. Management has determined that the forgoing actions, coupled with the deployment and testing of the relevant controls activities across STI, have resulted in the remediation of the previously identified material weakness. Changes in Internal Control over Financial Reporting During the year ended December 31, 2024, except for the changes discussed above, there have been no other changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. Item 9B. Other Information None . We maintain a website at www.arraytechinc.com. The contents of our website are not incorporated in, or otherwise to be regarded as part of, this Annual Report on Form 10-K. We make available, free of charge on our website, access to our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we file or furnish them electronically with the SEC. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections From time to time, our directors and officers may adopt plans for the purchase or sale of our securities. Such plans may be designed to satisfy the affirmative defense conditions of Rule 10b5-1 under the Exchange Act or may constitute non-Rule 10b5-1 trading arrangements (as defined in Item 408(c) of Regulation S-K). During 58 the three months ended December 31, 2024, none of our directors or officers adopted, amended or terminated any such plan or trading arrangement. PART III Item 10. Directors, Executive Officers and Corporate Governance The information required by this item and not set forth below will be contained in our definitive proxy statement to be filed with the SEC in connection with our 2025 Annual Meeting of Stockholders, or the Proxy Statement, which is expected to be filed not later than 120 days after the end of our fiscal year ended December 31, 2024, and is incorporated herein by reference. Insider Trading Policy We have adopted an Insider Trading Policy governing the purchase, sale and/or other dispositions of our securities by the Company, our directors, officers and employees of the Company and its subsidiaries. A copy of this policy is filed as an exhibit to this Annual Report on Form 10-K. Our insider trading policy prohibits our directors, officers and employees from holding our common stock in a margin account or entering into hedging transactions, including through the use of financial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds, because such transactions may permit a director, officer or employee to continue to own securities obtained through our employee benefit plans or otherwise, but without the full risks and rewards of ownership. When that occurs, the individual may no longer have the same objectives as our other stockholders. Code of Conduct We have adopted a written Code of Business Conduct that applies to all officers, directors and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The Code of Business Conduct is available on our website at www.arraytechinc.com. If we make any substantive amendments to the Code of Business Conduct or grant any waiver from a provision of the Code of Business Conduct to any executive officer or director, we will promptly disclose the nature of the amendment or waiver on our website or in a Current Report on Form 8-K. Item 11. Executive Compensation The information required by this item will be set forth in the Proxy Statement and is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by this item will be set forth in the Proxy Statement and is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by this item will be set forth in the Proxy Statement and is incorporated herein by reference. Item 14. Principal Accountant Fees and Services 59 The information required by this item will be set forth in the Proxy Statement and is incorporated herein by reference. Auditor Firm Id: 34 Auditor Name: Deloitte & Touche LLP Auditor Location: Tempe, AZ, United States PART IV Item 15. Exhibit and Financial Statement Schedules (a)(1) Financial Statements. The financial statements and supplementary data required by this item are included after the Signature page of this Annual Report on Form 10-K beginning on page F-1. (a)(2) Financial Statement Schedules. All schedules have been omitted because they are not required or because the required information is given in the Financial Statements or Notes thereto. (a)(3) Exhibits. The exhibits listed in the Exhibit Index below are filed or incorporated by reference as part of this Annual Report. Exhibit Index Number Description of Document Form Date No. 3.1 Amended and Restated Certificate of Incorporation of Array Technologies, Inc., dated October 19, 2020 8-K 10/19/2020 3.1 3.2 Amended and Restated Bylaws of Array Technologies, Inc., dated October 19, 2020 8-K 10/19/2020 3.2 3.3 Certificate of Designations of Series A Perpetual Preferred Stock 8-K 08/11/2021 3.1 4.1 Description of securities registered under Section 12 of the Exchange Act 10-K 03/10/2021 4.1 4.2 Indenture, dated December 3, 2021, among Array Technologies, Inc. and U.S. Bank National Association 8-K 12/07/2021 4.1 4.3 Form of 1.00% Convertible Senior Note due 2028 8-K 12/07/2021 4.1 10.1 Registration Rights Agreement, dated August 10, 2021, by and between Array Technologies, Inc. and BCP Helios Aggregator L.P. 8-K 08/11/2021 10.2 10.2 Registration Rights Agreement, dated January 11, 2022, by and among Array Technologies, Inc. and the holders identified therein 8-K 01/11/2022 10.1 10.3 Credit Agreement, dated October 14, 2020, by and among Array Tech, Inc. (f/k/a Array Technologies, Inc.), as borrower, ATI Investment Sub, Inc., as guarantor, Goldman Sachs Bank USA, as administrative agent and collateral agent, and the Lenders (as defined therein) from time to time party thereto 8-K 10/19/2020 10.2 60 Number Description of Document Form Date No. 10.4 Amended and Restated ABL Credit and Guarantee Agreement, dated March 23, 2020, by and among ATI Investment Holdings, Inc., Wells Fargo Bank, National Association, as administrative agent, and the lenders from time to time party thereto S-1/A 10/14/2020 10.1 10.5 Tax Receivable Agreement, dated July 8, 2016, between Array Tech, Inc. (f/k/a Array Technologies, Inc.) and Ron P. Corio S-1/A 10/14/2020 10.3 10.6 Form of Array Technologies, Inc. 2020 Long-Term Incentive Plan S-1/A 10/7/2020 10.4 10.7* A mended and Restated Form of Array Technologies, Inc. 2020 Long -Term Incentive Plan 10.8 A rray Technologies, Inc. 2021 Employee Stock Purchase Plan S-8 6/29/2022 10.1 10.9 F orm of RSU Grant Notice and Award Agreement (Employees) S-8 10/19/2020 10.2 10.10 F orm of R SU Grant Notice and Award Agreement (Directors) S-8 10/19/2020 10.3 10.11* F orm of PSU Grant Notice and Award Agreement 10.12 Offer Letter of Employment, dated April 3, 2022, between Array Tech, Inc. and Kevin Hostetler 8-K 4/5/2022 10.1 10.13 Offer Letter of Employment, dated November 28, 2022, between Array Tech, Inc. and Neil Manning 10-K 2/28/2024 10.13 10.14 Employment Offer Letter, dated July 25, 2022, between Array Tech, Inc. and Terrance Collins 10-K 2/28/2024 10.11 10.15 Offer Letter of Employment, dated December 1, 2024, between Array Tech, Inc. and H. Keith Jennings 8-K 12/03/2024 10.1 10.16* Offer Letter of Employment, dated November 18 , 202 3 , between Array Tech, Inc. and James Zhu 10.17* Amended and Restated A rray Technologies, Inc. Executive Severance and Change in Control Plan 10.18 Transition and Separation Agreement, dated June 5, 2024, by and between Array Technologies, Inc. and Kurt Wood 8-K 08/08/2024 10.2 10.19 Form of Director and Officer Indemnification Agreement S-1/A 10/14/2020 10.11 10.20 Employment Agreement Terms 10-K 03/10/2021 10.13 10.21 Amendment No. 1, dated February 23, 2021, to the credit agreement by and among Array Tech, Inc. (f/k/a Array Technologies, Inc.), as borrower, ATI Investment Sub, Inc., as guarantor, Goldman Sachs Bank USA, as administrative agent and collateral agent, and the lenders from time to time party thereto 10-K 03/10/2021 10.14 10.22 Amendment No. 2, dated February 26, 2021, to the credit agreement by and among Array Tech, Inc. (f/k/a Array Technologies, Inc.), as borrower, ATI Investment Sub, Inc., as guarantor, Goldman Sachs Bank USA, as administrative agent and collateral agent, and the lenders from time to time party thereto 8-K 03/02/2021 10.1 10.23 Form of Capped Call Confirmation 8-K 12/07/21 10.1 10.24 Form of Capped Call Side Letter 10-K 2/28/2024 10.22 61 Number Description of Document Form Date No. 10.25 Array Technologies, Inc. Deferred Compensation Plan 8-K 5/24/2024 10.1 10.26* Industrial Triple Net Lease, dated Ma y 31, 2024, by and between GDC Sunshine, LLC and Array Tech , Inc. 19.1* I nsider Trading Policy of Registrant 21.1* List of Subsidiaries of the Registrant 23.1* Consent of Independent Registered Public Accounting Firm 23.2* Consent of Independent Registered Public Accounting Firm 31.1* Certification of the Chief Executive Officer, as required by Section 302 of the Sarbanes- Oxley Act of 2002 (18 U.S.C. 1350) 31.2* Certification of the Chief Financial Officer, as required by Section 302 of the Sarbanes- Oxley Act of 2002 (18 U.S.C. 1350) 32.1** Certification of the Chief Executive Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) 32.2** Certification of the Chief Financial Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) 97* Array Technologies, Inc. Clawback Policy 101* Interactive Data Files 104* Cover Page Interactive Data Files * Filed herewith ** Furnished herewith + Exhibits and schedules have been omitted pursuant to Regulation S-K Item 601(a)(5) and will be furnished on a supplemental basis to the SEC upon request. Item 16. Form 10–K Summary None. 62 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on February 28, 2025. Array Technologies, Inc. By: /s/ Kevin Hostetler Kevin Hostetler Chief Executive Officer (Principal Executive Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacity and on the dates indicated. Signature Title Date /s/ Kevin Hostetler Chief Executive Officer February 28, 2025 Kevin Hostetler (Principal Executive Officer) /s/ H. Keith Jennings Chief Financial Officer February 28, 2025 H. Keith Jennings (Principal Financial Officer) /s/ James Zhu Chief Accounting Officer February 28, 2025 James Zhu (Principal Accounting Officer) /s/ Brad Forth Chairman of the Board of Directors February 28, 2025 Brad Forth /s/ Paulo Almirante Member of the Board of Directors February 28, 2025 Paulo Almirante /s/ Troy Alstead Member of the Board of Directors February 28, 2025 Troy Alstead /s/ Orlando D. Ashford Member of the Board of Directors February 28, 2025 Orlando D. Ashford /s/ Jayanthi Iyengar Member of the Board of Directors February 28, 2025 Jayanthi Iyengar /s/ Bilal Khan Member of the Board of Directors February 28, 2025 Bilal Khan 63 Signature Title Date /s/ Tracy Jokinen Member of the Board of Directors February 28, 2025 Tracy Jokinen /s/ Gerrard Schmid Member of the Board of Directors February 28, 2025 Gerrard Schmid 64 INDEX TO FINANCIAL STATEMENTS Array Technologies, Inc. and Subsidiaries Reports of Independent Registered Public Accounting Firms F-2 Consolidated Balance Sheets F- 8 Consolidated Statements of Operations F- 10 C onsolidated St atements of Comprehensive In come (Loss) F -8 Consolidated Statements of Changes in Redeemable Perpetual Preferred Stock and Stockholders' Equity (Deficit) F- 12 Consolidated Statements of Cash Flows F- 14 Notes to Consolidated Financial Statements F- 16 F-1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of Array Technologies, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Array Technologies, Inc. (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), changes in redeemable perpetual preferred stock and stockholders’ equity (deficit), and cash flows, for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 28, 2025, expressed an unqualified opinion on the Company’s internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. F-2 Goodwill and Long-Lived Assets– STI Operations– Refer to Note 2 and 7 to the financial statements Critical Audit Matter Description The Company’s goodwill for its STI Operations reporting unit (“STI”) is tested annually for impairment during the fourth quarter of each year, and more frequently if events and circumstances indicate that the assets might be impaired. The Company’s evaluation of STI’s goodwill for impairment involves the comparison of the fair value of the reporting unit to its carrying value. The Company used a quantitative approach for goodwill to determine the fair value of STI based upon the discounted cash flow method, which was compared to an indication of value using the guideline publicly traded companies method. The fair value determination using the discounted cash flow method requires management to make significant estimates and assumptions related to forecasts of future revenue growth rates, earnings before interest, taxes, depreciation, and amortization (“EBITDA”) margins, and the discount rate. The comparison of the fair value of the reporting unit to the marketplace multiples determined under the guideline publicly traded companies method requires management to make assumptions related to the selection EBITDA multiples. As of the September 30, 2024 and December 31, 2024 testing dates, the carrying value of STI exceeded its estimated fair value as of each testing date, and as a result, the Company recorded impairments totaling $236.0 million during the year ended December 31, 2024. The Company’s long-lived assets for STI are tested for impairment when events, circumstances or operating results indicate that the carrying values of the long-lived assets might not be recoverable through future operations. The evaluation of STI’s long-lived assets for impairment involves preparing projections of the undiscounted future cash flows expected to be generated from each asset group and the cash flows resulting from the asset grouping’s eventual disposition. If the projections indicate that the underlying asset group is not expected to be recoverable, the asset group is reduced to its estimated fair value through the impairment of its long-lived assets. As of the December 31, 2024 testing date, the sum of the undiscounted cash flows was less than the carrying balance for one of STI’s asset groups. The Company then determined the estimated fair value of the STI asset group based upon the discounted cash flow method, which was then compared to an indication of value using the guideline publicly traded companies method. The significant assumptions used in determining the fair value of the asset group are similar to the significant assumptions used in determining the fair value of the STI reporting unit. The estimated fair value of the asset group was less than the carrying balance of the asset group, and as a result, the Company recorded an impairment loss on the long-lived asset group of $91.9 million. Given the significant judgments made by management to estimate the fair value of STI and one of STI’s asset groups, performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to forecasts of future revenue growth rates and EBITDA margins, as well as the selection of the discount rates and the comparison of the fair value to marketplace multiples, required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the forecasts of future revenue growth rates and EBITDA margins ("forecasts"), the selection of the discount rate and the comparison of the marketplace multiples for STI and one of the STI’s asset groups included the following, among others: • We tested the effectiveness of controls over management's determination of the estimated fair value of STI and one of the STI’s asset groups, such as controls related to F-3 management's forecasts and the selection of the discount rate and market multiples used. • We evaluated the reasonableness of management's forecasts by comparing the forecasts to (1) historical results, (2) internal communications, (3) inquiry with non-accounting personnel and (4) forecasted information included in industry reports that STI operates within. • With the assistance of our fair value specialists, we evaluated (1) the valuation methodologies used, (2) the marketplace multiples used by management to compare to the discounted cash flow fair value, and (3) the discount rates used in determining the present value of the expected cash flows by developing independent estimates and comparing those to the rate selected by management. • We considered the impact of (1) changes in the industry and (2) current macroeconomic factors on management's forecasts by analyzing key inputs of the forecast and evaluating the reasonableness and trends of the key inputs as a comparison to changes in the industry and current macroeconomic factors. /s/ Deloitte & Touche LLP Tempe, Arizona February 28, 2025 We have served as the Company's auditor since 2023. F-4 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of Array Technologies, Inc. Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of Array Technologies, Inc. (the “Company”) as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2024, of the Company and our report dated February 28, 2025, expressed an unqualified opinion on those financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. F-5 Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Deloitte & Touche LLP Tempe, Arizona February 28, 2025 F-6 Report of Independent Registered Public Accounting Firm Stockholders and Board of Directors Array Technologies, Inc. Albuquerque, New Mexico Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated statements of operations, comprehensive income (loss), changes in redeemable perpetual preferred stock and stockholders’ equity (deficit), and cash flows of Array Technologies, Inc. (the “Company”) for the year ended December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the Company’s results of operations and its cash flows for the year ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion. /s/ BDO USA, LLP We served as the Company's auditor from 2016 to 2023 Austin, Texas March 22, 2023 F-7 Table of Contents Array Technologies, Inc. Consolidated Balance Sheets (in thousands, except per share and share amounts) December 31, 2024 2023 ASSETS Current assets Cash and cash equivalents $ 362,992 $ 249,080 Restricted cash 1,149 — Accounts receivable, net 275,838 332,152 Inventories 200,818 161,964 Prepaid expenses and other 157,927 89,085 Total current assets 998,724 832,281 Property, plant and equipment, net 26,222 27,893 Goodwill 160,189 435,591 Other intangible assets, net 181,409 354,389 Deferred income tax assets 17,754 15,870 Other assets 41,701 40,717 Total assets $ 1,425,999 $ 1,706,741 LIABILITIES, REDEEMABLE PERPETUAL PREFERRED STOCK AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 172,368 $ 119,498 Accrued expenses and other 91,183 70,211 Accrued warranty reserve 2,063 2,790 Income tax payable 5,227 5,754 Deferred revenue 119,775 66,488 Current portion of contingent consideration 1,193 1,427 Current portion of debt 30,714 21,472 Other current liabilities 15,291 48,051 Total current liabilities 437,814 335,691 Deferred income tax liabilities 21,398 66,858 Contingent consideration, net of current portion 7,868 8,936 Other long-term liabilities 18,684 20,428 Long-term warranty 4,830 3,372 Long-term debt, net of current portion 646,570 660,948 Total liabilities 1,137,164 1,096,233 Commitments and contingencies (Note 16) Series A Redeemable Perpetual Preferred Stock: $ 0.001 par value; 500,000 shares authorized; 460,920 and 432,759 issued, respectively; liquidation preference of $ 493.1 million at both dates 406,931 351,260 F-8 Table of Contents Array Technologies, Inc. Consolidated Balance Sheets (continued) (in thousands, except shares and par value) December 31, 2024 2023 Stockholders’ equity Preferred stock $ 0.001 par value - 4,500,000 shares authorized; none issued at respective dates — — Common stock $ 0.001 par value - 1,000,000,000 shares authorized; 151,951,652 and 151,242,120 shares issued at respective dates 151 151 Additional paid-in capital 297,780 344,517 Accumulated deficit ( 370,624 ) ( 130,230 ) Accumulated other comprehensive income (loss) ( 45,403 ) 44,810 Total stockholders’ equity ( 118,096 ) 259,248 Total liabilities, redeemable perpetual preferred stock and stockholders’ equity $ 1,425,999 $ 1,706,741 See accompanying Notes to Consolidated Financial Statements. F-9 Table of Contents Array Technologies, Inc. Consolidated Statements of Operations (in thousands) Year Ended December 31, 2024 2023 2022 Revenue $ 915,807 $ 1,576,551 $ 1,637,546 Cost of revenue: Cost of product and service revenue 603,572 1,146,442 1,410,270 Amortization of developed technology 14,558 14,558 14,558 Total cost of revenue 618,130 1,161,000 1,424,828 Gross profit 297,677 415,551 212,718 Operating expenses: General and administrative 160,567 159,535 150,777 Change in fair value of contingent consideration 125 2,964 ( 4,507 ) Depreciation and amortization 36,086 38,928 84,581 Long-lived assets impairment 91,904 — — Goodwill impairment 236,000 — — Total operating expenses 524,682 201,427 230,851 (Loss) income from operations ( 227,005 ) 214,124 ( 18,133 ) Other (expense) income, net ( 1,008 ) ( 1,015 ) 2,789 Interest income 16,777 8,330 3,181 Legal settlement — — 42,750 Foreign currency (loss) gain, net ( 4,515 ) ( 53 ) 1,155 Interest expense ( 34,825 ) ( 44,229 ) ( 36,694 ) Total other (expense) income ( 23,571 ) ( 36,967 ) 13,181 (Loss) income before income tax expense (benefit) ( 250,576 ) 177,157 ( 4,952 ) Income tax (benefit) expense ( 10,182 ) 39,917 ( 9,384 ) Net (loss) income ( 240,394 ) 137,240 4,432 Preferred dividends and accretion 55,670 51,691 48,054 Net (loss) income to common shareholders $ ( 296,064 ) $ 85,549 $ ( 43,622 ) (Loss) income per common share Basic $ ( 1.95 ) $ 0.57 $ ( 0.29 ) Diluted $ ( 1.95 ) $ 0.56 $ ( 0.29 ) Weighted average common shares outstanding Basic 151,754 150,942 149,819 Diluted 151,754 152,022 149,819 See accompanying Notes to Consolidated Financial Statements. F-10 Table of Contents Array Technologies, Inc. Consolidated Statements of Comprehensive Income (Loss) (in thousands) Year Ended December 31, 2024 2023 2022 Net (loss) income $ ( 240,394 ) $ 137,240 $ 4,432 Foreign currency translation (1) ( 90,213 ) 36,385 8,425 Comprehensive (loss) income $ ( 330,607 ) $ 173,625 $ 12,857 (1) There are no tax effects on foreign currency adjustments. See accompanying Notes to Consolidated Financial Statements. F-11 Table of Contents Array Technologies, Inc. Consolidated Statements of Changes in Redeemable Perpetual Preferred Stock and Stockholders’ Equity (Deficit) (in thousands) Temporary Equity Permanent Equity Series A Redeemable Perpetual Preferred Stock Preferred Stock Common Stock Shares Amount Shares Amount Shares Amount Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholders’ Equity (Deficit) Balance, December 31, 2021 350 $ 237,462 — $ — 135,027 $ 135 $ 202,562 $ ( 271,902 ) $ — $ ( 69,205 ) Equity-based compensation — — — — 339 — 14,543 — — 14,543 Issuance of Series A Redeemable Perpetual Preferred Stock, net of fees 50 32,724 — — — — ( 1,938 ) — — ( 1,938 ) Issuance of common stock, net — — — — 15,147 15 216,063 — — 216,078 Preferred cumulative dividends plus accretion and commitment fees 19 48,054 — — — — ( 48,054 ) — — ( 48,054 ) Dividends paid ( 13 ) ( 18,670 ) — — — — — — — — Net income — — — — — — — 4,432 — 4,432 Foreign currency translation — — — — — — — 8,425 8,425 Balance, December 31, 2022 406 299,570 — — 150,513 150 383,176 ( 267,470 ) 8,425 124,281 Equity-based compensation — — — — 729 1 14,540 — — 14,541 Preferred cumulative dividends plus accretion and commitment fees 26 51,690 — — — — ( 53,199 ) — — ( 53,199 ) Net income — — — — — — — 137,240 — 137,240 Foreign currency translation — — — — — — — — 36,385 36,385 Balance, December 31, 2023 432 351,260 — — 151,242 151 344,517 ( 130,230 ) 44,810 259,248 F-12 Table of Contents Array Technologies, Inc. Consolidated Statements of Changes in Redeemable Perpetual Preferred Stock and Stockholders’ Equity (Deficit) (in thousands) Temporary Equity Permanent Equity Series A Redeemable Perpetual Preferred Stock Preferred Stock Common Stock Shares Amount Shares Amount Shares Amount Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholders’ Equity (Deficit) Equity-based compensation — — — — 710 — 10,686 — — 10,686 Tax withholding related to vesting of equity-based compensation — — — — — — ( 1,752 ) — — ( 1,752 ) Preferred cumulative dividends plus accretion 28 55,671 — — — — ( 55,671 ) — — ( 55,671 ) Net loss — — — — — — — ( 240,394 ) — ( 240,394 ) Foreign currency translation — — — — — — — — ( 90,213 ) ( 90,213 ) Balance, December 31, 2024 460 $ 406,931 — $ — 151,952 $ 151 $ 297,780 $ ( 370,624 ) $ ( 45,403 ) $ ( 118,096 ) See accompanying Notes to Consolidated Financial Statements. F-13 Table of Contents Array Technologies, Inc. Consolidated Statements of Cash Flows (in thousands) Year Ended December 31, 2024 2023 2022 Operating activities: Net (loss) income $ ( 240,394 ) $ 137,240 $ 4,432 Adjustments to net income (loss): Goodwill impairment 236,000 — — Impairment of long-lived assets 91,904 — — Allowance for credit losses 2,058 2,527 2,599 Deferred tax benefit ( 37,650 ) ( 8,862 ) ( 31,565 ) Depreciation and amortization 38,221 40,268 86,501 Amortization of developed technology 14,558 14,558 14,558 Amortization of debt discount and issuance costs 6,087 10,570 6,857 Gain on debt refinancing — ( 457 ) — Equity-based compensation 10,349 14,540 14,982 Change in fair value of contingent consideration 125 2,964 ( 4,507 ) Warranty provision 3,163 4,666 4,152 Write-down of inventories 2,923 6,431 ( 859 ) Changes in operating assets and liabilities, net of business acquisition: Accounts receivable 41,423 92,800 ( 76,984 ) Inventories ( 44,787 ) 66,743 20,870 Income tax receivables ( 4,112 ) 9 5,611 Prepaid expenses and other ( 69,708 ) ( 10,840 ) 19,124 Accounts payable 58,180 ( 37,654 ) 12,667 Accrued expenses and other ( 436 ) 5,325 1,024 Income tax payable ( 863 ) 1,936 ( 755 ) Lease liabilities ( 8,624 ) 1,177 3,784 Deferred revenue 55,563 ( 111,986 ) 59,002 Net cash provided by operating activities 153,980 231,955 141,493 Investing activities: Purchase of property, plant and equipment ( 7,305 ) ( 16,989 ) ( 10,619 ) Retirement/disposal of property, plant and equipment 34 168 — Cash payments for the acquisition of right-of-use assets ( 11,276 ) — — Acquisition of STI, net of cash acquired — — ( 373,818 ) SAFE Investment ( 3,000 ) — — Sale of equity investment 11,975 — — Net cash used in investing activities ( 9,572 ) ( 16,821 ) ( 384,437 ) Financing activities: F-14 Table of Contents Array Technologies, Inc. Consolidated Statements of Cash Flows (continued) (in thousands) Year Ended December 31, 2024 2023 2022 Proceeds from Series A issuance — — 33,098 Proceeds from common stock issuance — — 15,885 Series A equity issuance costs — ( 1,509 ) ( 1,893 ) Tax withholding related to vesting of equity-based compensation ( 1,752 ) — — Common stock issuance costs — — ( 450 ) Dividends paid on Series A Preferred — — ( 18,670 ) Payments on revolving credit facility — — ( 116,000 ) Proceeds from revolving credit facility — — 116,000 Proceeds from issuance of other debt 93,059 63,311 20,188 Principal payments on term loan facility ( 4,300 ) ( 74,300 ) ( 14,300 ) Principal payments on other debt ( 97,424 ) ( 88,063 ) ( 23,935 ) Contingent consideration payments ( 1,427 ) ( 1,200 ) ( 1,483 ) Net cash (used in) provided by financing activities ( 11,844 ) ( 101,761 ) 8,440 Effect of exchange rate changes on cash and cash equivalent balances ( 17,503 ) 1,806 735 Net change in cash and cash equivalents 115,061 115,179 ( 233,769 ) Cash and cash equivalents and restricted cash, beginning of period 249,080 133,901 367,670 Cash and cash equivalents and restricted cash, end of period $ 364,141 $ 249,080 $ 133,901 Supplemental Cash Flow Information Cash paid for interest $ 38,655 $ 43,949 $ 23,118 Cash paid for income taxes $ 27,966 $ 45,942 $ 10,739 Non-cash Investing and Financing Activities Dividends accrued on Series A Preferred $ 28,160 $ 26,370 $ 6,389 Stock consideration paid for acquisition of STI $ — $ — $ 200,224 See accompanying Notes to Consolidated Financial Statements. F-15 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements 1. Organization and Business Array Technologies, Inc. (the “Company”), formerly ATI Intermediate Holdings, LLC, is a Delaware corporation formed in December 2018 as a wholly owned subsidiary of ATI Investment Parent, LLC (“Former Parent”). On October 14, 2020, the Company converted from a Delaware limited liability company to a Delaware corporation and changed the Company’s name to Array Technologies, Inc. On January 11, 2022, the Company acquired 100 % of the share capital of Soluciones Técnicas Integrales Norland, S.L.U., a Spanish private limited liability Company, and its subsidiaries (collectively, “STI”) with cash and common stock of the Company (the “STI Acquisition”). The STI Acquisition was accounted for as a business combination. Upon completion of the STI Acquisition, the Company began operating as two reportable operating segments: the Array Legacy operating segment (“Array Legacy Operations”) and the newly acquired operating segment (“STI Operations”) pertaining to STI. Headquartered in Albuquerque, New Mexico, the Company is a leading global provider of solar tracking technology to utility-scale and distributed generation customers, who construct, develop and operate solar PV sites. 2. Summary of Significant Accounting Policies Basis of Accounting and Presentation The accompanying consolidated financial statements were prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). Reclassifications Software Implementation Costs During the first quarter of 2024, the Company reclassified capitalized software costs recorded as Property, plant and equipment, net to Intangible assets, net on the condensed consolidated balance sheets. The reclassification was recorded retrospectively and resulted in a $ 4.0 million increase to Intangible assets, net at December 31, 2023, with a corresponding decrease in the same amount to Property, plant and equipment, net. These reclassifications did not impact the Company’s operating income (loss), net income (loss), earnings (loss) per share, or statements of cash flows for any current or historical periods. Brazil Value-Added Tax Benefit Revenue in 2024 and 2023, excludes a Brazil value-added tax benefit, Imposto sobre Circulação de Mercadorias e Servicos (“ICMS”), of $ 11.8 million and $ 23.2 million, respectively that has been included in cost of product and service revenue for these periods. For the year ended December 31, 2022, an ICMS benefit of $ 12.3 million was included in revenues. F-16 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements This reclassification had no impact on the Company’s gross profit, income (loss) from operations, net income or income (loss) per common share in the current period. This reclassification also did not impact the condensed consolidated balance sheets or condensed consolidated statements of cash flows. Principles of Consolidation The consolidated financial statements include the accounts of Array Technologies, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated upon consolidation. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Although management believes its estimates are reasonable, actual results could differ from those estimates. Foreign Currency Translation The Company’s foreign subsidiaries have functional currencies that are different than our reporting currency. When translating balances from the functional currency to the reporting currency, assets and liabilities are translated into U.S. dollars at period end exchange rates, retained earnings is translated at historical rates, and income, expenses, and cash flow items are translated at average exchange rates prevailing during the period. Translation adjustments for these subsidiaries are accumulated within accumulated other comprehensive income. In situations when a foreign subsidiary has a local currency that is different than the functional currency, monetary assets and liabilities are translated into the functional currency at the period end exchange rates, and non-monetary assets and the related income statement effects are translated into the functional currency using historical rates. Gains and losses that result from remeasurement from a local currency to the functional currency are included in earnings. Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. We regularly maintain cash balances that exceed insured amounts, but we have experienced no losses associated with these amounts to date. At December 31, 2024, restricted cash represents cash deposited with a financial institution by one of our foreign subsidiaries that was restricted for the issuance of certain surety bonds. Accounts Receivable The Company’s accounts receivable are due primarily from solar contractors across the U.S. and internationally. Credit is extended in the normal course of business based on evaluation of a customer’s financial condition and, generally, collateral is not required. Trade receivables consist of uncollateralized customer obligations due under normal trade terms requiring payment within 30 to 60 days of the invoice date. Management regularly reviews outstanding accounts receivable and provides for estimated credit losses through an estimate of expected credit losses valuation account. The allowance for credit losses is a valuation account that is deducted from a financial asset’s amortized cost to present the net amount we expect to collect from the asset. We estimate allowances for credit losses using relevant available information from both internal and external sources. We monitor the estimated credit losses associated with our trade accounts receivable and unbilled accounts receivable based primarily on our F-17 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements collection history and the delinquency status of amounts owed to us, which we determine based on the aging of such receivables. In evaluating the level of established reserves, management makes judgments regarding the customers’ ability to make required payments, economic events, and other factors. As the financial conditions of these customers change, circumstances develop, or additional information becomes available, adjustments to the valuation account may be required. When deemed uncollectible, the receivable is charged against the valuation account for credit losses or directly written off. Unbilled receivables represent temporary timing differences between shipments made and billing milestones achieved and are recorded in the accounts receivable balances. Such amounts have not been billed due to pending commercial criteria such as billing on a specified date of the month or upon completion of mega-watt deliveries. Unbilled receivables are invoiced once the underlying commercial criteria have been met and we expect payment within 30 to 60 days. Inventories Inventories consist of raw materials and finished goods and are stated at the lower of cost or estimated net realizable value using primarily the moving average cost method that approximates the FIFO method. Provisions are made to reduce excess or obsolete inventories to their estimated net realizable values. Property, Plant and Equipment Property, plant and equipment are recorded at cost, net of accumulated depreciation and amortization. Improvements, betterments and replacements which extend the life of an asset are capitalized. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the respective assets. Repair and maintenance costs are expensed as incurred. A gain or loss on the sale of property, plant and equipment is calculated as the difference between the cost of the asset disposed of, net of depreciation, and net sales proceeds received. A gain or loss on an asset disposal is recognized in the period that the sale occurs. SAFE Investment On November 6, 2024, Array invested $ 3.0 million through a Simple Agreement of Future Equity (“SAFE”) with a technology company. At the next equity financing round of the technology company, the SAFE investment will convert into preferred shares of the company, subject to certain conditions. Array will invest up to $ 2.0 million in future SAFEs contingent upon the achievement of defined milestones by the technology company. The initial investment of $ 3.0 million was recorded at cost and is included within “Other assets” on the consolidated balance sheet. The investment will be carried at cost and remeasured to fair value if impaired or if there are observable transaction prices. Leases Operating lease arrangements are comprised primarily of real estate and equipment agreements. The Company determines if an arrangement contains a lease at inception based on whether it conveys the right to control the use of an identified asset in exchange for consideration. Lease right-of-use assets (“ROU assets”) and associated lease liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Certain F-18 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements lease agreements may include one or more options to extend or terminate a lease. Lease terms are inclusive of these options if it is reasonably certain that the Company will exercise such options. ROU assets also include any initial direct costs and prepayments less lease incentives. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. Lease expense is recognized on a straight-line basis over the lease term. ROU assets and the corresponding operating lease liabilities are included in other assets and other liabilities in our consolidated balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in our consolidated balance sheets. Long-Lived Assets In testing long-lived assets and goodwill for impairment, the Company first tests its long-lived assets for impairment, and then tests the goodwill of a reporting unit that includes the long-lived assets covered under the long-lived asset test for impairment. If an asset group includes only a portion of a reporting unit, the carrying amount of goodwill is not included in the asset group. The carrying values are adjusted, if necessary, for the result of each impairment test prior to performing the next test. When events, circumstances or operating results indicate that the carrying values of long-lived assets might not be recoverable through future operations, the Company prepares projections of the undiscounted future cash flows expected to be generated from the underlying asset group and the cash flows resulting from the asset groupings eventual disposition. If the projections indicate that the underlying asset grouping is not expected to be recoverable, the estimated fair value of the asset group is determined. An impairment loss is recognized based on the difference between the carrying value of the asset group and its estimated fair value. The loss is allocated to the long-lived assets of the group on pro rata basis using the relative carrying amounts of the asset groups long-lived assets. During the year ended December 31, 2024, the Company identified certain indicators of impairment related to its long-lived assets, and as a result, tested certain asset groups for impairment, which resulted in an impairment of long-lived assets of $ 91.9 million. See Note 7 – Goodwill, Long-Lived Assets, and Other Intangible Assets for additional information. There was no impairment of long-lived assets for the years ended December 31, 2023 and 2022. Goodwill and Indefinite-Lived Intangible Asset Goodwill represents the excess of the consideration transferred over the estimated fair value of assets acquired and liabilities assumed in a business combination. Intangible assets are measured at their respective fair values as of the acquisition date and may be subject to adjustment within the measurement period, which may be up to one year from the acquisition date. The Company does not amortize goodwill but instead tests goodwill for impairment annually, or more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. Such triggering events potentially warranting an annual or interim goodwill impairment assessment include, among other factors, declines in historical or projected revenue, operating income or cash flows, and sustained decreases in the Company’s stock price or market capitalization. F-19 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements Goodwill is assessed for impairment using either a qualitative assessment or quantitative approach to determine whether it is more likely than not that the fair value of the reporting unit is less than the carrying amount. The qualitative assessment evaluates factors including macroeconomic conditions, industry-specific and company-specific considerations, legal and regulatory environments, and historical performance. If the Company cannot determine if it is more likely than not that the fair value of a reporting unit is greater than its carrying value, a quantitative assessment is performed. The quantitative approach compares the estimated fair value of the reporting unit to its carrying amount, including goodwill. Impairment is indicated if the estimated fair value or the reporting unit is less than the carrying amount of the reporting unit, and an impairment charge is recognized for the differential. When determining the fair value of a reporting unit using the quantitative approach, we determine the fair value of the reporting unit using an income approach based on discounted cash flows. The fair value determined under the income approach is then compared to guideline publicly-traded companies (“GPC”) market place EBITDA multiples to corroborate the fair value of the reporting unit determined under the income approach. During the year ended December 31, 2024, the Company identified certain indicators of impairment on various dates, and as a result, performed goodwill impairment tests, which resulted in impairments of goodwill totaling $ 236.0 million. See Note 7 – Goodwill, Long-Lived Assets, and Other Intangible Assets for additional information. There was no impairment of goodwill for the years ended December 31, 2023 and 2022. The Company has one indefinite-lived intangible asset for a Trade name it acquired as part of a past acquisition associated with Legacy Array. The Company performs an annual impairment test on its Trade name indefinite-lived intangible asset, utilizing a qualitative or quantitative impairment analysis during the fourth quarter of each year. There were no indicators of impairment associated with this Trade name, Divestiture of Investment in Equity Securities In June 2024, we divested 100 % of our equity investment in preferred stock of a private company we purchased in 2021. We received $ 12.0 million in proceeds for the divestiture in July 2024. No gain or loss resulted from this transaction. Amortizable and Other Intangible Assets The Company amortizes identifiable finite lived intangible assets consisting of developed technology, customer relationships, contractual backlog and the STI trade name on a straight-line basis over the assets’ estimated useful lives. The basis of amortization approximates the pattern in which the assets are utilized, over their estimated useful lives. The Array Technologies trade name has been determined to have an indefinite life and, therefore, is not amortized but is subject to an annual impairment test or at any other time when impairment indicators exist. The Company did no t recognize any impairment charges for this asset during the years ended December 31, 2024, 2023 and 2022. Debt Discount and Issuance Costs Debt discount and issuance costs incurred to issue debt are deferred and amortized using the effective interest method as a component of interest expense over the life of the related debt agreement. Amortization expense of debt discount and deferred issuance costs was $ 6.1 million, $ 10.6 million and $ 6.9 million for the years ended December 31, 2024, 2023 and 2022, respectively. F-20 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements Revenue Recognition In accordance with ASC 606, the Company recognizes revenues from the sale of solar tracking systems, parts, installation services, extended warranties on solar tracker system components and software licenses along with associated maintenance and support. The Company determines its revenue recognition through the following steps (i) identification of the contract or contracts with a customer, (ii) identification of the performance obligations within the contract, (iii) determination of the transaction price, (iv) allocation of the transaction price to the performance obligations within the contract, and (v) recognition of revenue when, or as the performance obligation has been satisfied. In assessing the recognition of revenue, the Company also evaluates whether two or more contracts should be combined and accounted for as one contract and if the combined or single contract should be accounted for as multiple performance obligations which could change the amount of revenue and profit (loss) recorded in a period. Further, the Company assesses whether control of the product or services promised under the contract is transferred to the customer at a point in time or over time. Performance Obligations The Company’s contracts for specific solar tracker system projects with customers are predominantly accounted for as a single performance obligation, because the Company is integrating the solar tracking system components and related services as part of a single project. The Company’s performance creates and enhances an asset that the customer controls as the Company performs under the contract, which is principally as tracker system components are delivered to the designated project site. The Company sources the component parts from third party manufacturers, it obtains control and receives title of such parts before transferring them to the customer because the Company is responsible for fulfillment to its customer. The Company’s engineering services and professional services are interdependent with the component parts whereby the parts form an input into a combined output for which it is the principal, and the Company could redirect the parts before they are transferred to the customer if needed. The customer owns the work-in-process over the course of the project and the Company’s performance enhances a customer-controlled asset, resulting in the recognition of the performance obligation over time. In contracts with a single performance obligation, the Company’s obligation is satisfied over-time as control is transferred to the customer by measuring the progress toward complete satisfaction of the performance obligation using an input (i.e., the “cost-to-cost”) method. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. The costs of materials and hardware components are recognized as incurred, which is typically upon delivery to the customer site or upon transfer of control while in transit. For contracts with customers that result in multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using its best estimate of the standalone selling price of each distinct good or service in the contract. These contracts include contracts for the sale of components, contracts with installation services, solar tracker systems sold with an extended warranty, and contracts that include the sale of software and maintenance. For all years presented, the transaction price associated with extended warranties and the sale of software and maintenance was not material. The Company generally uses the expected cost-plus margin approach to estimate the standalone selling price of each performance obligation. F-21 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements For contracts related to the sale of components as opposed to contracts to provide an integrated solar tracker project, the Company’s obligation to the customer is to deliver components that are used by the customer to create a tracker system and does not include engineering or other professional services or the obligation to provide such services in the future. Under these arrangements, each component is a distinct performance obligation, and often the components are delivered in batches at different points in time. The Company estimates the standalone selling price (“SSP”) of each component performance obligation based on a cost-plus margin approach. Revenue allocated to a component is recognized at the point in time that control of the component transfers to the customer, which is usually upon delivery to the customer’s site. Contracts are often modified through change orders to account for changes in specifications or design, manner of performance, equipment, materials, scope of work, and/or the period of completion of the project. Although the Company evaluates each change order to determine whether such modification creates a separate performance obligation, the majority of change orders are for goods or services that are not distinct within the context of the original contract and, therefore, not treated as separate performance obligations but rather as a modification of the existing contract and performance obligation. Bill and Hold Arrangements In certain situations, the Company recognizes revenue under bill-and-hold arrangements with its customers. In all bill-and-hold arrangements, because the customers lack sufficient storage capacity to accept a large amount of material prior to the start of construction, they request that the Company keep the product in our custody. The material is bundled or palletized in the Company’s warehouses, identified separately as belonging to the respective customer and is ready for immediate transport to the customer project upon customer request. Additionally, title and risk of loss has passed to the customer and the Company does not have the ability to use the product or direct it to another customer. Contract Estimates A majority of our revenue is recognized over time as work progresses, and for single performance obligations, we use an input measure, the cost-to-cost method, to determine progress. We review and update the contract related estimates on an ongoing basis and recognize adjustments for any project specific facts and circumstances that could impact the measurement of the extent of progress such as the total costs to complete the contracts, under the cumulative catch-up method. Due to the relatively short duration of our outstanding performance obligations, and our ability to estimate the remaining costs to be incurred, which are substantially all material costs covered under our material supply agreements with our suppliers, we have not recorded any material catch-up adjustments for the periods presented that would have impacted revenues or EPS related to revisions in our measurement of remaining progress of our performance obligations. Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled accounts receivable for goods or services delivered but not invoiced, and deferred revenue (contract liabilities) on the consolidated balance sheets. The majority of the Company’s contract amounts are billed as work progresses in accordance with agreed-upon contractual terms, which generally coincide with the shipment of one or more phases of the project. Billing sometimes occurs subsequent to revenue recognition, resulting in unbilled accounts receivable. The changes in unbilled accounts receivable and the corresponding amounts recorded in revenue relate to fluctuations in the timing and volume of billings for the Company’s revenue recognized over-time. F-22 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements Practical Expedients and Exemptions The Company has elected to adopt certain practical expedients and exemptions as allowed under ASC 606, such as (i) recording sales commissions as incurred because the amortization period is less than one year, (ii) not adjusting for the effects of significant financing components when the contract term is less than one year, (iii) excluding collected sales tax amounts from the calculation of revenue and (iv) accounting for the costs of shipping and handling activities that are incurred after the customer obtains control of the product as fulfillment costs rather than a separate service provided to the customer for which consideration would need to be allocated. Research and Development The Company incurs research and development costs during its process of researching and developing new products and significant enhancements to existing products. Research and development costs consist primarily of personnel-related costs associated with our team of internal engineers, third-party consultants, materials and overhead. The Company expenses these costs as incurred prior to a respective product being ready for commercial production. Research and development expense was $ 6.7 million, $ 8.5 million and $ 4.2 million during the years ended December 31, 2024, 2023 and 2022, respectively. Inflation Reduction Act Vendor Rebates On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was enacted into law, which includes numerous green energy credits. The 45X advanced manufacturing production tax credit (“45X Credit”) was established as part of the IRA. The section 45X Credit is a per-unit tax credit that is earned over time for each clean energy component domestically produced and sold by a manufacturer. The Company has, and will continue to enter into, arrangements with manufacturing vendors that produce section 45X Credit eligible parts, in which the vendors agree to share a portion of the benefit received related to Array purchases, in the form of “Vendor Rebates.” The Company accounts for these Vendor Rebates as a reduction of the purchase prices of the vendors’ products and therefore a reduction in the cost of inventory until the inventory is sold, at which time the Company recognizes such rebates as a reduction of cost of product and service on the consolidated statements of operations. For vendor rebates related to past purchases that are owed to the Company upon execution of the agreement, the Company defers recognition of this portion of the rebate and recognizes the amounts as a reduction to cost of product and service revenue as future purchases occur. At December 31, 2024, the company had deferred $ 8.0 million of vendor rebates related to rebates due at contract signing for past purchases, which are included in Other current liabilities on the consolidated balance sheet. During the fiscal year ended December 31, 2024, the Company recorded a reduction to cost of product and service revenue on the consolidated statements of operations in the amount of approximately $ 133.3 million, of which approximately $ 38.6 million related to the recognition of deferred rebates that were deferred upon contract signing at December 31, 2023. During the year ended December 31, 2023, the Company recorded a reduction to cost of product and service revenue on the consolidated statements of operations in the amount of $ 9.3 million. As of December 31, 2024 and 2023, the Company had an outstanding Vendor Rebate receivable of $ 115.5 million and $ 48.4 million, respectively, included in Prepaid expenses and other. F-23 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements Inflation Reduction Act 45X Credits The Company accounts for the 45X Advanced Manufacturing Production Credit established by the IRA, under IAS 20 - Accounting for Government Grants and Disclosure of Government Assistance (“IAS 20”), as a reduction to production costs. The tax credit is included as an offset in Income tax payable on the condensed consolidated balance sheet dated December 31, 2024. During the fiscal year ended December 31, 2024, the company earned 45X Advanced Manufacturing Production Credits for the manufacturing of certain components, which were sold and resulted in a $ 4.4 million reduction to cost of product and service revenue on the consolidated statement of operations. Warranty Obligations The Company offers a multi-year assurance type warranty for its products against manufacturer defects and does not contain service elements. For these assurance type warranties, a provision for estimated future costs related to warranty expense is recorded when they are probable and reasonably estimable, which is typically when products are delivered. This provision is based on historical information on the nature, frequency and average cost of claims for each product line. When little or no experience exists for an immature product line, the estimate is based on comparable product lines. These estimates are re-evaluated on an ongoing basis using best-available information and revisions to estimates are made as necessary. Claims estimated to be payable in the following year are classified as current liabilities and those payable beyond one year are classified as long-term liabilities. Advertising Expenses The cost of advertising, marketing and media is expensed as incurred. For the years ended December 31, 2024, 2023 and 2022 advertising expenses totaled $ 3.3 million, $ 2.7 million and $ 2.6 million, respectively. Income Taxes The Company provides for income taxes based on the provisions of ASC Topic 740 I ncome Taxes (“ASC 740”), which, among other things, requires that recognition of deferred income taxes be measured by the provisions of enacted tax rates in effect at the date of the consolidated financial statements. A valuation allowance is provided to reduce deferred income tax assets if it is more likely than not that all, or some portion, of such deferred tax assets will not be recognized. Provision for estimated income taxes is based upon elements of income and expense reported in the consolidated statements of operations. The Company also files certain corporate state income tax returns. Generally, the Company is subject to examination by U.S. federal, state and non-U.S. income tax authorities. The current provision for income taxes represents actual or estimated amounts payable on tax return filings each year. Deferred tax assets and liabilities are recorded for the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts reported in the accompanying consolidated balance sheets, and for operating loss and tax credit carryforwards. The change in deferred tax assets and liabilities for the period measures the deferred tax provision or benefit for the period. Effects of changes in enacted tax laws on deferred tax assets and liabilities are reflected as adjustments to the tax provision or benefit in the period of enactment. The Company determines whether uncertain tax positions are more likely than not to be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. F-24 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements The Company recognizes interest and penalties related to unrecognized tax benefits within interest expense and other expenses, respectively, in the consolidated statements of operations. The Company's liabilities for unrecognized tax benefits are reflected in Other long-term liabilities on the condensed consolidated balance sheet. Equity-Based Compensation The Company recognizes equity-based compensation expense based on the equity award’s grant date fair value. The determination of the fair value of equity awards issued to employees of the Company is based upon the underlying share price and a number of assumptions, including volatility, performance period, risk-free interest rate and expected dividends. The Company values equity awards with a market condition using a Monte Carlo simulation model. The Company accounts for forfeitures as they occur. The grant date fair value of each unit is amortized on a straight-line basis over the requisite service period. Temporary Equity Equity instruments that are redeemable for cash or other assets are classified as temporary equity if the instrument is redeemable, at the option of the holder, at a fixed or determinable price on a fixed or determinable date or upon the occurrence of an event that is not solely within the control of the issuer. Redeemable equity instruments are initially carried at the fair value of the equity instrument at the issuance date, which is subsequently adjusted at each balance sheet date if the instrument is currently redeemable, or probable of becoming redeemable. The Series A Redeemable Perpetual Preferred Stock of the Company, par value $ 0.001 per share (the “Series A Shares”) issued in connection with the Series A Purchase Agreement, as described in Note 12 – Redeemable Perpetual Preferred Stock , are classified as temporary equity in the accompanying consolidated financial statements. The Company elected the accreted redemption value method under which it accretes changes in redemption value over the period from the date of issuance of the Series A Shares to the earliest costless redemption date (the fifth anniversary) using the effective interest method. Such adjustments are included in preferred undeclared dividends and accretion on Series A Shares on the Company’s consolidated statements of changes in redeemable perpetual preferred stock and stockholders’ equity (deficit) and treated similarly to a dividend on preferred stock in accordance with U.S. GAAP. Earnings per Share Basic earnings per share (“EPS”), is computed by dividing net income available to common shareholders by the weighted average shares outstanding during the period. Diluted EPS takes into account the potential dilution that could occur if securities or other contracts to issue shares, such as stock options, unvested restricted stock, or convertible debt, were exercised and converted into shares. The convertible debt is not currently convertible. Diluted EPS is computed by dividing net income available to common shareholders by the weighted average shares outstanding during the period, increased by the number of additional shares that would have been outstanding if the potential shares had been issued and were dilutive. Credit Concentration Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and accounts receivable. The Company has no significant off balance sheet concentrations of credit risk. The Company maintains its cash with financial institutions that are believed to be of high credit quality and has not experienced any material losses relating to cash balances. F-25 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements Our customer base consists primarily of large solar developers, independent power producers, utilities and EPCs. We do not require collateral on our accounts receivable. At December 31, 2024, the Company’s largest customer and five largest customers accounted for 9.0 % and 31.0 %, respectively, of total accounts receivable. At December 31, 2023, the Company’s largest and five largest customers constituted 2.7 % and 29.6 % of trade accounts receivable, respectively. During the year ended December 31, 2024, two customers accounted for 15.6 % and 11.9 %, respectively, of total revenue. During the year ended December 31, 2023, one customer accounted for 13.4 %, of total revenue. During the year ended December 31, 2022, two customers accounted for 11.8 % and 10.6 %, respectively, of total revenue. Further, our accounts receivable are from companies within the solar industry and, as such, we are exposed to normal industry credit risk. We continually evaluate our reserves for potential credit losses and establish reserves for such losses. Fair Value Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company follows a fair value hierarchy which requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Three levels of inputs may be used to measure fair value, as follows: • Level 1 - Quoted prices in active markets for identical assets or liabilities. • Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 - Unobservable inputs that are supported by little or no market activity that are significant to the fair value of the assets or liabilities. The fair values of the Company’s cash, accounts receivable, and accounts payable approximate their carrying values due to their short maturities. The carrying value of the Company’s notes payable approximate their fair values, as they are based on current market rates at which the Company could borrow funds with similar terms. The Company follows the provisions of ASC 820 Fair Value Measurement for nonfinancial assets and liabilities measured at fair value on a non-recurring basis. As it relates to the Company, this applies to certain nonfinancial assets and liabilities acquired in business combinations and measurement of goodwill impairment and non-amortizable intangibles and is thereby measured at fair value, which was determined by the Company with the assistance of third-party valuation specialists. Recently Issued Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (the “FASB”) issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, F-26 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements and modifies other income tax-related disclosures. The standard will become effective for the Company’s fiscal year ended December 31, 2025, with early adoption permitted. The Company did not adopt this reporting standard early for 2024 and expects no material impacts upon adoption. In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), which requires public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 31, 2026, and for interim periods beginning after December 31, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03. Recently Adopted Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this ASU will require public entities to disclose significant segment expenses and other segment items and to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Public entities with a single reportable segment will also be required to provide the new disclosures and all the disclosures required under ASC 280. The Company adopted ASU 2023-07 during the year ended December 31, 2024. See Note 20 – Segment and Geographic Information in the accompanying notes to the consolidated financial statements for further detail. 3. Acquisition of STI On January 11, 2022, the Company completed the STI Acquisition pursuant to the purchase agreement, dated November 10, 2021, by and among Amixa Capital, S.L. and Aurica Trackers, S.L., each a company duly organized under the laws of the Kingdom of Spain (together, the “Sellers”) and Mr. Javier Reclusa Etayo (the “STI Purchase Agreement”). The STI Acquisition was funded primarily with borrowings from the Convertible Notes (as defined below) and the issuance of the Series A Shares. The STI Acquisition provided the Company with an immediate presence in Spain, Western Europe, Brazil and South Africa. Transaction expenses incurred in connection with the acquisition are $ 5.6 million recorded in the general and administrative line item on the consolidated statement of operations for the year ended December 31, 2022. In accordance with the Purchase Agreement, the Company paid closing consideration to the Sellers consisting of $ 410.5 million in cash and ( 13,894,800 shares) of the Company’s common stock with an estimated fair value of $ 200.2 million based on the closing share price on the date of acquisition. The fair value of the purchase consideration was $ 610.8 million and resulted in the Company owning 100 % of the interests in STI. The Company has performed a valuation of the acquisition assets and liabilities and determined the related accounting impact. The consideration paid to acquire STI consisted of the following (in thousands): Cash consideration for STI $ 409,647 Cash consideration for transaction expenses of STI 896 Total cash consideration 410,543 Non-cash equity consideration 200,224 Total consideration transferred 610,767 Total purchase price consideration $ 610,767 F-27 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements The STI Acquisition was accounted for as a business combination in accordance with ASC 805 Business Combinations . The equity consideration transferred consisted of the Company’s common stock and was measured at fair value based on the closing stock price on the Acquisition Date. The purchase price was allocated to the assets acquired and liabilities assumed based on management’s estimate of the respective fair values at the Acquisition Date. Goodwill was calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The factors contributing to the recognition of goodwill were the expected synergies of the combined entities that are expected to be realized from the STI Acquisition. None of the goodwill is deductible for income tax purposes. The following table summarizes the fair values of the assets acquired and liabilities assumed as of the Acquisition Date (in thousands): Fair Value of Net Assets Acquired and Liabilities Assumed: Acquisition Date Measurement Adjustment Remeasured Acquisition Date Cash and cash equivalents $ 36,725 $ — $ 36,725 Accounts receivable 110,789 — 110,789 Inventories 47,517 — 47,517 Prepaid expenses and other 23,399 — 23,399 Property, plant and equipment 4,434 — 4,434 Other intangible assets 304,431 — 304,431 Other assets 325 2,655 2,980 Total assets acquired $ 527,620 $ 2,655 $ 530,275 Accounts payable 65,761 — 65,761 Deferred revenue 20,345 — 20,345 Short-term debt 44,338 — 44,338 Other liabilities 10,115 2,655 12,770 Income tax payable 7,576 — 7,576 Deferred tax liability 95,510 — 95,510 Other long-term liabilities 4,524 — 4,524 Long-term debt 12,053 — 12,053 Total liabilities assumed $ 260,222 $ 2,655 $ 262,877 Fair value of net assets acquired 267,398 267,398 Allocation to goodwill $ 343,369 $ 343,369 F-28 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements The purchase price allocation was based upon Management’s estimates with the assistance of a third party valuation specialist. The estimates of the fair values of the assets acquired and liabilities assumed were estimated to approximate carrying values since they are short term in nature, and they are receivable or payable on demand. These assets and liabilities were cash and cash equivalents, accounts receivable, inventories, prepaid expenses and other, accounts payable, other liabilities, and deferred revenue. The deferred tax liability was determined utilizing statutory rates in effect at the time of the acquisition, as applied to the respective intangible assets by jurisdiction. For assets and liabilities excluded from the scope of the intangible assets and property, plant and equipment valuation, the Company considered net book value to be a reasonable proxy as of the Acquisition Date. The purchase price allocation includes $ 304.4 million of acquired identifiable intangible assets. (in thousands, except useful lives) Estimated Fair Value Estimated Weighted Average Useful Life in Years Backlog $ 50,000 1 Customer relationships 228,408 10 Trade name 26,023 20 Total $ 304,431 The fair value of the identifiable intangible assets has been estimated using the Excess Earnings Method (customer relationships and backlog) and Relief from Royalty Method (trade name). Significant inputs using the Excess Earnings Method and Level 3 inputs in the fair value hierarchy include economic life, estimated revenue, expenses based on historical results and forecasts, and a discount rate based on a weighted average cost of capital for customer relationships of 15 % for Spain, 16.5 % for Brazil and 14.0 % for Spain foreign sourced projects and for order backlog of 8.5 % for Spain, 9.5 % for Brazil and 7.5 % for Spain foreign sourced projects. Significant inputs to the Relief from Royalty method model include estimates of future revenue, economic life, estimated royalty rate of 1.25 %, and a discount rate based on a weighted average cost of capital 15.2 %. The weighted average cost of capital was determined based on the Company’s capital structure, cost of capital, inherent business risk profile and long-term growth expectations. The intangible assets are being amortized over their estimated useful lives on a straight-line basis that reflects the economic benefit of the asset. The determination of the useful lives is based upon various industry studies, historical acquisition experience, economic factors, and future forecasted cash flows of the Company following the STI Acquisition. The amounts of revenue and net income of STI included in the Company’s consolidated statement of operations from the Acquisition Date through December 31, 2022 were $ 369.7 million and $( 21.5 ) million, respectively. Pro Forma Financial Information (Unaudited) The following unaudited pro forma financial information presents the combined results of operations of the Company and STI as if the acquisition had occurred on January 1, 2021, after giving effect to certain unaudited pro forma adjustments. The unaudited pro forma adjustments reflected herein include only those adjustments that are directly attributable to the STI Acquisition including amortization of intangibles, debt financing expenses and tax benefits. The unaudited pro forma financial information does not reflect any adjustments for anticipated expense savings resulting from the STI Acquisition and is not necessarily indicative of the operating F-29 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements results that would have actually occurred had the STI Acquisition been consummated on January 1, 2021, (in thousands): Year Ended December 31, 2022 2021 Revenue $ 1,645,962 $ 1,118,903 Net income (loss) $ 36,285 $ ( 74,215 ) 4. Accounts Receivable Accounts receivable consists of the following (in thousands): December 31, 2024 2023 2022 Accounts receivable $ 280,686 $ 335,976 $ 423,071 Less: allowance for credit losses ( 4,848 ) ( 3,824 ) ( 1,888 ) Accounts receivable, net $ 275,838 $ 332,152 $ 421,183 Included in accounts receivable are amounts retained by project owners that represent funds withheld by our customers until the products are installed by a third-party, arranged by the customer, and the project is declared operational. Such retention amounts were $ 17.4 million, $ 24.0 million, and $ 47.4 million as of December 31, 2024, 2023, and 2022, respectively. All retention amounts outstanding as of December 31, 2024, are collectible within the next 12 months. The following is the activity of the allowance for credit losses on accounts receivable which includes trade accounts receivable and unbilled accounts receivable (in thousands): December 31, 2024 2023 2022 Beginning balance $ ( 3,824 ) $ ( 1,888 ) $ ( 140 ) Provision for credit losses ( 1,855 ) ( 2,871 ) ( 2,599 ) Collected 92 916 731 Written-off 739 19 120 Ending balance $ ( 4,848 ) $ ( 3,824 ) $ ( 1,888 ) F-30 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements 5. Inventories Inventories consist of the following (in thousands): December 31, 2024 2023 Raw materials $ 60,588 $ 86,614 Finished goods 140,230 75,350 Total $ 200,818 $ 161,964 The Company values a portion of its inventory using the moving average cost method that approximates the First In, First Out method (“FIFO”). As of December 31, 2024, inventory valued using moving average cost and FIFO was $ 154.4 million and $ 46.4 million, respectively. As of December 31, 2023, inventory valued using moving average cost and FIFO, was $ 129.5 million and $ 32.5 million, respectively. 6. Property, Plant and Equipment Property, plant and equipment consisted of the following (in thousands, except for useful lives): December 31, Estimated Useful Life (Years) 2024 2023 Land N/A $ 1,585 $ 1,634 Buildings and land improvements 15 - 39 9,108 9,344 Manufacturing equipment 7 27,853 22,962 Furniture, fixtures and equipment 5 - 7 4,287 4,770 Vehicles 5 603 688 Hardware 3 - 5 3,603 3,114 Construction in progress N/A 3,948 6,199 Total 50,987 48,711 Less: accumulated depreciation ( 24,765 ) ( 20,818 ) Property, plant and equipment, net $ 26,222 $ 27,893 Depreciation expense was $ 4.4 million, $ 2.6 million and $ 2.4 million for the years ended December 31, 2024, 2023 and 2022, respectively, of which $ 2.1 million, $ 1.3 million and $ 1.6 million, respectively, was included in cost of revenues and $ 2.3 million, $ 1.3 million and $ 0.8 million, respectively, was included in depreciation and amortization in the accompanying consolidated statements of operations for the years ended December 31, 2024, 2023 and 2022. F-31 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements 7. Goodwill, Long-Lived Assets, and Other Intangible Assets Goodwill Changes in the carrying amount of goodwill by reporting unit during the year ended December 31, 2024, consisted of the following (in thousands): Array Legacy Operations (1) STI Operations Total Beginning balance $ 69,727 $ 365,864 $ 435,591 Foreign currency translation — ( 39,402 ) ( 39,402 ) Impairment charge — ( 236,000 ) ( 236,000 ) Ending balance $ 69,727 $ 90,462 $ 160,189 (1) Goodwill attributable to Array Legacy Operations is net of impairment charges of $ 51.9 million. Prior to 2024, no impairment charges have been recorded for STI Operations. The Company performs it’s annual goodwill impairment test, utilizing a qualitative or quantitative impairment analysis during the fourth quarter of each year, and between annual tests if an event occurs or circumstances change that would indicate that it is more likely than not that the carrying amount may be impaired. During the third and fourth quarters of 2024, the Company experienced a sustained decline in its stock price, which hit a 52-week low during the third quarter of 2024 and again during the fourth quarter of 2024, resulting in a decrease in market capitalization. In addition, the Company updated its long-term projections for the Company’s reporting units during the third and fourth quarter of 2024, and evaluated the execution risk associated with the Company’s projections and the local market conditions. As a result, the Company identified indicators of impairment related to the Company’s reporting units as of September 30, 2024 and December 31, 2024, respectively. Management, with the assistance of a third-party valuation specialist, performed quantitative goodwill impairment tests of the Legacy Array Operations and STI Operations reporting units as of September 30, 2024 and December 31, 2024. The fair value of the Array Legacy Operations and STI Operations reporting units were determined using the income approach and then compared to the Guideline publicly traded companies (“GPC”) marketplace EBITDA multiples to corroborate the fair value of the reporting unit. As a result of these tests, the Company recorded impairments to goodwill totaling $ 236.0 million during 2024, related to STI Operations reporting unit. The estimated fair value of the STI Operations reporting unit was estimated to be $ 251.2 million as of December 31, 2024. Subsequent to recording the impairments of goodwill, the Company reconciled the overall market capitalization of the Company, within a reasonable range, to the sum of the estimated fair values of both of the Company’s reporting units. The estimated fair value of the Array Legacy Operations reporting unit was significantly higher than the carrying balance of the reporting unit at each testing date. The significant assumptions used in determining the fair value of the STI Operations reporting unit primarily relate to the revenue growth rate, the forecasted EBITDA margin, and the selected discount rate used in the discounted cash flow model under the income approach. Under the GPC method, the selection of EBITDA multiple to be used requires significant judgement. To the extent that the discount rate used in determining the present value of our cash flows increases, if we do not meet the cash flow projections for the reporting unit, or GPC multiples in the future decrease, additional impairment charges may be recorded in the future. In addition, F-32 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements a further decrease in the Company’s common stock share price and market capitalization could be an indication that there has been a further decrease in the fair value of the Company’s reporting units. Long-Lived Assets As discussed above, there were indicators of impairment that required an interim impairment test for the Legacy Array and STI Operations reporting units. Management considered these events to be a triggering event requiring the long-lived assets associated with the STI Operations asset groups be tested for impairment (which includes the amortizable intangible assets) as of the same dates that the goodwill was tested for impairment. The sum of the future undiscounted cash flows for one of the STI Operations asset groups indicated that the carrying amount of the asset groups was not recoverable as of December 31, 2024. As a result, with the assistance of a third-party valuation specialist, management estimated the fair value of the asset group, which was less than the carrying value of the asset group. The fair value of the asset group was determined using the income approach and then compared to GPC marketplace EBITDA multiples to corroborate the fair value of the reporting unit. An impairment loss of $ 91.9 million was recognized based on the difference between the carrying value of the asset group and its estimated fair value. The Company impaired $ 83.0 million of customer relationships, $ 7.3 million of trade names, and $ 1.6 million of plant and equipment. The loss was allocated to the long-lived assets of the group on a pro rata basis using the relative carrying amounts of those assets. In determining the fair value of the asset group, the Company performed a DCF analysis using the income approach. The significant assumptions used in determining the fair value of the asset group are similar to the significant assumptions used in determining the fair value the Company’s reporting units. As of December 31, 2024 and 2023, no events or circumstances were noted that would indicate the carrying amount of any of Legacy Array’s asset groups may not be recoverable. F-33 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements Other Intangible Assets Other intangible assets consisted of the following (in thousands, except for useful lives): December 31, Estimated Useful Life (Years) 2024 2023 Amortizable: Developed technology 14 $ 203,800 $ 203,800 Computer software 3 15,826 5,267 Customer relationships 10 179,166 336,134 Backlog 1 16,877 54,438 Trade name 20 15,117 27,061 Total amortizable intangibles 430,786 626,700 Accumulated amortization: Developed technology 123,462 108,905 Computer software 14,552 1,274 Customer relationships 102,541 115,444 Backlog 16,877 54,322 Trade name 2,245 2,666 Total accumulated amortization 259,677 282,611 Total amortizable intangibles, net 171,109 344,089 Non-amortizable: Trade name 10,300 10,300 Total other intangible assets, net $ 181,409 $ 354,389 Amortization expense related to intangible assets was $ 48.4 million, $ 52.2 million and $ 98.4 million for the years ended December 31, 2024, 2023 and 2022, respectively, of which $ 14.6 million was included in amortization of developed technology, a component of cost of revenue, in all three periods. The remaining amortization expense of $ 33.8 million, $ 37.6 million and $ 83.8 million, respectively, was included in depreciation and amortization, on the accompanying consolidated statements of operations. The following table presents estimated future annual amortization expense (in thousands): Amount 2025 $ 34,844 2026 30,370 2027 25,350 2028 25,232 2029 25,232 Thereafter 30,081 $ 171,109 F-34 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements 8. Income Taxes The components of the Company’s income (loss) before provision for income taxes are as follows (in thousands): Year Ended December 31, 2024 2023 2022 U.S. $ 113,045 $ 136,498 $ 34,344 Foreign ( 363,621 ) 40,659 ( 39,296 ) Income (loss) before provision for income taxes $ ( 250,576 ) $ 177,157 $ ( 4,952 ) The provision for income taxes charged to operations consists of the following (in thousands): Year Ended December 31, 2024 2023 2022 Current expense (benefit): Federal $ 21,686 $ 26,592 $ 12,826 State 2,707 5,678 1,630 Foreign 3,075 16,509 7,725 27,468 48,779 22,181 Deferred expense (benefit): Federal ( 1,361 ) 942 ( 6,160 ) State ( 406 ) ( 327 ) ( 960 ) Foreign ( 35,883 ) ( 9,477 ) ( 24,445 ) ( 37,650 ) ( 8,862 ) ( 31,565 ) Total income tax expense (benefit) $ ( 10,182 ) $ 39,917 $ ( 9,384 ) F-35 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements Significant components of the Company’s deferred tax assets and liabilities were as follows (in thousands): December 31, 2024 2023 Deferred tax assets: Bad debts $ 143 $ 164 Inventories 5,439 3,528 Accrued warranties 4,753 4,336 Accrued compensation 496 569 Net operating loss 4,247 2,181 Equity-based compensation 2,769 3,222 Lease liabilities 4,982 5,794 Premium on capped call 7,777 9,376 Interest expense carryforward 80 3,411 Capitalized research and development expenses 6,405 2,000 Other 5,164 4,580 Deferred tax assets 42,255 39,161 Valuation allowance ( 11,181 ) ( 2,360 ) Deferred tax assets, net 31,074 36,801 Deferred tax liabilities: Property, plant, and equipment ( 2,349 ) ( 2,825 ) Intangible assets ( 28,450 ) ( 79,913 ) ROU assets ( 3,919 ) ( 5,051 ) Deferred tax liabilities ( 34,718 ) ( 87,789 ) Deferred tax asset (liability), net $ ( 3,644 ) $ ( 50,988 ) F-36 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements A reconciliation of income tax expense computed at the federal statutory rate of 21% to actual income tax expense at the Company’s effective rate is as follows (in thousands): Year Ended December 31, 2024 2023 2022 Income tax rate reconciliation Income tax expense (benefit) at U.S. statutory rate $ ( 52,621 ) $ 37,204 $ ( 1,040 ) State income taxes 1,732 4,150 530 Officer’s compensation 350 518 740 Equity-based compensation 595 ( 932 ) 712 Contingent consideration 26 622 ( 947 ) Tax credits ( 4,554 ) ( 407 ) ( 421 ) Non-U.S. income taxed at different rate than U.S. statutory rate ( 15,135 ) 2,658 ( 4,274 ) Non-U.S. indirect tax incentives 975 ( 5,035 ) ( 4,183 ) Foreign derived intangible income benefit — ( 403 ) ( 1,668 ) Transaction costs — — 1,628 Non-deductible Goodwill Impairment 49,560 — — Change in valuation allowance 7,760 911 ( 534 ) Uncertain tax benefits 714 — — Nondeductible expenses 481 299 10 Other ( 65 ) 332 63 Total income tax expense (benefit) $ ( 10,182 ) $ 39,917 $ ( 9,384 ) During 2023 and 2022, the Company received a non-U.S. indirect tax incentive which was excluded from the local income tax base, resulting in a reduction of the overall effective tax rate of the Company. The income tax benefits from the non-U.S. indirect tax incentive was $ 5.0 million and $ 4.2 million for 2023 and 2022, respectively. Due to recent legislation, effective in 2024 these non-U.S. indirect tax incentives are no longer excluded from the local income tax base. In addition, in 2024, the Company reached a settlement under an amnesty program relating to treatment of the pre-acquisition of such non-US indirect tax incentives for years ended 2017 and 2018. Under the settlement, there was a repayment of the non-US indirect tax incentives from 2017 and 2018 along with penalties of $ 3.3 million, which were not deductible. During the year ended December 31, 2024, the Company recorded impairment charges of $ 236.0 million related to goodwill and $ 91.9 million related to intangibles and PP&E. The goodwill impairment charge is non-deductible for income tax purposes, while a deferred tax benefit of $ 31.2 million offset by a valuation allowance against deferred tax assets of $ 7.2 million was recognized for the intangible and PP&E impairment. See Note 7 – Goodwill, Long-Lived Assets, and Other Intangible Assets for additional information. As of December 31, 2024, the Company has federal income tax net operating loss (“NOL”) carryforwards of approximately $ 6.8 million that do not expire, state income tax NOL carryforwards of approximately $ 0.5 million that will expire in future years beginning in 2029, state tax credits of approximately $ 1.1 million that will expire in future years beginning in 2033, and certain foreign NOLs that are immaterial. As of December 31, 2023, the Company has federal income tax NOL carryforwards of approximately $ 6.8 million that do not expire, state income tax NOL carryforwards of approximately $ 2.3 million that will expire in future years beginning in 2029, F-37 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements state tax credits of approximately $ 0.3 million that will expire in future years beginning in 2033, and certain foreign NOLs that are immaterial. Realization of deferred tax assets is dependent upon generating sufficient taxable income of the appropriate type and in the appropriate jurisdictions. In assessing the ability to realize a portion of the deferred tax assets, management considers whether it is more likely than not that some portion or all the deferred tax assets will not be realized. It is not more likely than not that deferred tax assets from certain U.S. Federal, state and foreign net operating loss would be realized due to type and location of future earnings. As a result, the Company has a valuation allowance of $ 11.2 million and $ 2.4 million for the years ended December 31, 2024 and 2023. ASC 740 addresses the determination of how tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. In accordance with ASC 740, the Company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The Company’s assessments of its tax positions in accordance with ASC 740 did not result in changes that had a material impact on results of operations, financial condition or liquidity. As of December 31, 2024, 2023 and 2022, the Company had unrecognized income tax benefits of $ 0.7 million, zero and zero , respectively, of which the entirety would reduce our income tax provision, if recognized within the next twelve months. The Company does not expect any significant changes to the unrecognized tax benefits within the next twelve months. A reconciliation of the unrecognized tax benefits included within Other long-term liabilities on the consolidated statement of operations is as follows (in thousands): Year Ended December 31, 2024 2023 2022 Unrecognized tax benefits – January 1 $ — $ — $ — Gross increases – tax positions in prior period 533 — — Gross decreases – tax positions in prior period — — — Gross increases – tax positions in current period 181 — — Settlement — — — Lapse of statute of limitations — — — Unrecognized tax benefits – December 31 $ 714 $ — $ — The Company files income tax returns in the U.S. federal jurisdiction, in multiple U.S. states, as well as in non-U.S. jurisdictions. Through global expansion and the acquisition of STI, the Company has a significant presence in Spain and Brazil. The Company and its subsidiaries are routinely examined by various U.S. and non-U.S. taxing authorities. The Company is not subject to U.S. federal, state and non-U.S. income tax examinations by tax authorities for years before 2020. There are currently no income tax audits in any material jurisdictions. The cash held by foreign subsidiaries for permanent reinvestment is generally used to finance the subsidiaries' operational activities and future foreign investments. Repatriation of funds could result in an adjustment to the tax liability for foreign withholding taxes, foreign and/or state income taxes and the impact of foreign currency movements. At December 31, 2024, management believed that sufficient liquidity was available in the U.S. The Company may consider repatriating certain funds from its non-U.S. subsidiaries that are not needed to finance F-38 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements local operations; however, any repatriation activities are not expected to result in a significant incremental tax liability to the Company. The Organization for Economic Co-operation and Development (OECD) has a framework to implement a global minimum corporate tax of 15% for companies with global revenues and profits above certain thresholds (referred to as Pillar Two), with certain aspects of Pillar Two effective January 1, 2024 and other aspects effective January 1, 2025. Certain countries in which we operate have adopted legislation, and other countries are in the process of introducing legislation to implement Pillar Two. Due to the effective tax rates in which the Company operates, the Company meets certain safe harbor tests. As a result, there was no tax impact of Pillar Two for the year ended December 31, 2024. The Company accounts for the 45X Credit under IAS 20, Accounting for Government Grants and Disclosure of Government Assistance, for certain parts for which it is the manufacturer as a reduction to production costs with a corresponding reduction to Income Tax Payable. The reduction to production costs of $ 4.4 million for the year ended December 31, 2024, from the 45X Credit related to parts manufactured by the company, is excluded from Federal and state income taxes. 9. Accrued Expenses and Other Accrued expenses and other consisted of the following (in thousands): December 31, 2024 2023 Unvouchered payables $ 46,043 $ 21,548 Accrued payroll expenses 13,068 15,778 Accrued interest 692 4,723 Non-income taxes payable 4,019 5,560 Other 27,361 22,602 Accrued expenses and other $ 91,183 $ 70,211 10. Accrued Warranty Reserve The following table presents changes in the accrued warranty reserve balances (in thousands): December 31, 2024 2023 2022 Beginning balance $ 6,162 $ 5,476 $ 3,192 Provision for warranties issued 4,270 6,328 5,289 Payments ( 2,432 ) ( 3,980 ) ( 1,868 ) Warranty expirations ( 1,107 ) ( 1,662 ) ( 1,137 ) Ending balance $ 6,893 $ 6,162 $ 5,476 F-39 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements 11. Debt The following table summarizes the Company’s total debt (in thousands): December 31, 2024 2023 Senior Secured Credit Facility: Term loan facility $ 233,875 $ 238,175 Revolving credit facility — — Total secured credit facility 233,875 238,175 Convertible notes 425,000 425,000 Other debt 34,042 39,889 Total principal 692,917 703,064 Unamortized discount and issuance costs, total ( 15,633 ) ( 20,644 ) Current portion of debt ( 30,714 ) ( 21,472 ) Total long-term debt, net of current portion $ 646,570 $ 660,948 Senior Secured Credit Facility On October 14, 2020, the Company entered into a credit agreement (as amended, the “Credit Agreement”) governing the Company’s senior secured credit facility, consisting of (i) a $ 575 million senior secured 7-year term loan facility (the “Term Loan Facility”) and (ii) a $ 200 million senior secured 5-year revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loan Facility, the “Senior Secured Credit Facility”). The Credit Agreement was amended on February 23, 2021 (the “First Amendment”), on February 26, 2021 (the “Second Amendment”) and again on March 2, 2023 (the “Third Amendment”). The First Amendment, in the case of Eurocurrency borrowings, lowered the London interbank offered rate floor to 50 basis points from 100 basis points and lowered the applicable margin to 325 basis points from 400 basis points per annum. The Second Amendment increased the borrowing capacity of the Revolving Credit Facility from $ 150 million to $ 200 million. The Third Amendment replaced the former discontinued Senior Secured Credit Facility reference rate of LIBOR, with the comparable active reference rate, SOFR. The outstanding balance on the Term Loan Facility was $ 233.9 million and $ 238.2 million as of December 31, 2024 and 2023, respectively. The Term Loan Facility is presented in the accompanying consolidated balance sheets, net of debt discount and issuance costs of $ 7.9 million and $ 11.3 million at December 31, 2024 and 2023, respectively. The Company had no outstanding balance under the revolving credit facility as of both December 31, 2024 and 2023, $ 28.0 million and $ 24.8 million in standby letters of credit as of December 31, 2024 and 2023, respectively, and availability of $ 172.0 million and $ 175.2 million as of December 31, 2024 and 2023, respectively. F-40 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements Terms and Conditions of the Senior Secured Credit Facility Interest Rates The interest rates applicable to the loans under the Term Loan Facility equal, at the Company’s election, to either, (x) for SOFR Loans at Adjusted Term SOFR (subject to a floor of 0.50 %) plus 3.25 % or (y) for Base Rate Loans at the higher of the Prime Rate, one half of 1.00 % above the Federal Funds Rate or the Adjusted Term SOFR for one-month interest period, after giving effect to any floor plus 1.00 %, plus 2.25 %. Applicable interest rate at December 31, 2024 and 2023, were 9.55 % and 10.15 %, respectively. For the years ended December 31, 2024 and 2023, interest expense related to the Term Loan Facility was $ 24.2 million and $ 32.4 million, respectively, of which, $ 20.6 million and $ 24.5 million, respectively, was contractual interest and $ 3.6 million and $ 7.9 million, respectively, was amortization of debt discount and issuance costs. The discount and issuance costs are amortized over the life of the debt using the effective interest rate method. Prepayments and Amortization The Term Loan Facility amortizes in equal quarterly installments in aggregate annual amounts equal to 1.00 % per annum of the original principal amount of the loans funded thereunder and is due in October 2027. There is no scheduled amortization under the Revolving Credit Facility. Loans under the Revolving Credit Facility may be voluntarily prepaid in whole, or in part, in each case without premium or penalty. Loans under the Term Loan Facility may be voluntarily prepaid in whole, or in part, in each case without premium or penalty (other than a 1 % premium with respect to prepayments on account of certain “repricing events,” subject to exceptions, occurring within 12 months of the closing date of the Senior Secured Credit Facility). Additionally, the Term Loan Facility requires an annual excess cash flow calculation, for which the prescribed formula did not result in requiring the Company to make an advance principal payment for the year ended December 31, 2024. Restrictive Covenants and Other Matters The Revolving Credit Facility includes a springing financial maintenance covenant that is tested on the last day of each fiscal quarter if the outstanding loans and certain other credit extensions under the Revolving Credit Facility exceed 35 % of the aggregate amount of commitments thereunder, subject to customary exclusions and conditions. If the financial maintenance covenant is triggered, the first lien net leverage ratio will be tested for compliance not to exceed 7.10 to 1.00. As of December 31, 2024, the Company was in compliance with all the required covenants. The Senior Secured Credit Facility also contains affirmative and negative covenants customary for financings of this type, including covenants that restrict our incurrence of indebtedness and liens, dispositions, investments, acquisitions, restricted payments, and transactions with affiliates. The Senior Secured Credit Facility also includes customary events of default, including the occurrence of a change of control. In addition, the Senior Secured Credit Facility generally restricts the cash payment of dividends on the Company’s capital stock, subject to certain exceptions such as payment of dividends on designated preferred stock issued after the closing date. F-41 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements Guarantees and Security The obligations under the Senior Secured Credit Facility are guaranteed by ATI Investment Sub, Inc., a wholly owned subsidiary of the Company, and its wholly owned domestic subsidiaries other than certain immaterial subsidiaries and other excluded subsidiaries. The obligations under the Senior Secured Credit Facility are secured by a first priority security interest in substantially all of the future property and assets of the guarantor and the borrower, Array Tech, Inc. (f/k/a Array Technologies, Inc.), including accounts receivable, inventory, equipment, general intangibles, intellectual property, investment property, other personal property, material owned real property, cash and proceeds of the foregoing. Convertible Debt On December 3, 2021 and December 9, 2021, the Company completed a $ 425 million private offering ($ 375 million and $ 50 million, respectively), of its 1.00 % Convertible Senior Notes due 2028 (the “Convertible Notes”), resulting in proceeds of $ 413.3 million ($ 364.7 million and $ 48.6 million, respectively), after deducting the original issue discount of 2.75 %. The Convertible Notes were issued pursuant to an indenture, dated December 3, 2021, between the Company and U.S. Bank National Association, as trustee (the “Indenture”). For each of the years ended December 31, 2024 and 2023, interest expense related to the Convertible Notes was $ 6.1 million, of which, $ 4.2 million was contractual interest and $ 1.9 million was amortization of debt discount and issuance costs. The discount and issuance costs will be amortized over the life of the debt using the effective interest rate of 1.5 %. The Convertible Notes are senior unsecured obligations of the Company and will mature on December 1, 2028, unless earlier converted, redeemed, or repurchased. The Convertible Notes bear interest at a rate of 1.00 % per year, payable semiannually in arrears on June 1 and December 1 of each year, beginning on June 1, 2022. As of December 31, 2024 and 2023, the principal balance of the Convertible Notes was $ 425.0 million with unamortized discount and issuance costs of $ 7.5 million and $ 9.4 million, respectively, for a net carrying amount of $ 417.5 million and $ 415.6 million, respectively. The Convertible Notes were not convertible during the year ended December 31, 2024, and none have been converted to date. As the average market price of the Company’s common stock has not exceeded the exercise price since inception, there was no dilutive impact to earnings per share for the year ended December 31, 2024. Redemption At any time prior to the close of business on the business day immediately preceding June 1, 2028, the Convertible Notes are convertible at the option of the holders only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on March 31, 2022 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the conversion price then in effect on each applicable trading day; (2) during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price per $ 1,000 principal amount of Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of the Company’s common stock and the conversion rate for the Convertible Notes on each such trading day; (3) if the Company calls such Convertible Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date, but only with respect to the F-42 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements Convertible Notes called (or deemed called) for redemption; or (4) upon the occurrence of specified corporate events as described in the Indenture. On or after June 1, 2028, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders of the Convertible Notes may convert all or any portion of their Convertible Notes at any time regardless of the foregoing circumstances. Upon conversion of the Convertible Notes, the Company will pay cash up to the aggregate principal amount of the Convertible Notes to be converted and pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election, in respect of the remainder, if any, of the Company’s conversion obligation in excess of the aggregate principal amount of the Convertible Notes being converted. The Company may redeem (an “Optional Redemption”) for cash all or any portion of the Convertible Notes, at its option, on or after December 6, 2025, if the last reported sale price of the Company’s common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100 % of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. If the Company redeems less than all the outstanding Convertible Notes, at least $ 100 million aggregate principal amount of Convertible Notes must be outstanding and not subject to redemption as of the date of the relevant notice of redemption. No sinking fund is provided for the Convertible Notes. The conversion rate for the Convertible Notes was initially, and remains currently, 41.9054 shares of the Company’s common stock per $ 1,000 principal amount of the Convertible Notes, which is equivalent to a conversion price of approximately $ 23.86 per share of common stock or 10.1 million shares. The conversion price of the Convertible Notes represents a premium of approximately 32.5 % to the last reported sale price of the Company’s common stock on the Nasdaq Global Market on November 30, 2021. The conversion rate for the Convertible Notes is subject to adjustment under certain circumstances in accordance with the terms of the Indenture. In addition, following certain corporate events that occur prior to the maturity date of the Convertible Notes or if the Company delivers a notice of redemption in respect of the Convertible Notes, the Company will, under certain circumstances, increase the conversion rate of the Convertible Notes for a holder who elects to convert its Convertible Notes (or any portion thereof) in connection with such a corporate event or convert its Convertible Notes called (or deemed called) for redemption during the related Redemption Period (as defined in the Indenture), as the case may be. If the Company undergoes a Fundamental Change (as defined in the Indenture), holders may require, subject to certain conditions and exceptions, the Company to repurchase for cash all or any portion of their Convertible Notes at a Fundamental Change Repurchase Price (as defined in the Indenture) equal to 100 % of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest, to, but excluding, the Fundamental Change Repurchase Date (as defined in the Indenture). The Indenture includes customary covenants and sets forth certain events of default after which the Convertible Notes may be declared immediately due and payable and sets forth certain types of bankruptcy or insolvency events of default involving the Company or certain of its subsidiaries after which the Convertible Notes become automatically due and payable. F-43 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements Capped Calls In connection with the issuances of the Convertible Notes, the Company paid $ 52.9 million, in aggregate, to enter into capped call option agreements to reduce the potential dilution to holders of the Company’s common stock after a conversion of the Convertible Notes. Specifically, upon the exercise of the capped call instruments issued pursuant to the agreements (the “Capped Calls”), the Company would receive shares of its common stock equal to approximately 17.8 million shares (a) multiplied by (i) the lower of $ 36.0200 or the then-current market price of its common stock, less (ii) the applicable exercise price, $ 23.86 , and (b) divided by the then-current market price of its common stock. The results of this formula are that the Company would receive more shares as the market price of its common stock exceeds the exercise price and approaches the cap, which was initially, and remains currently, $ 36.02 per share. Consequently, if the Convertible Notes are converted, then the number of shares to be issued by the Company would be effectively partially offset by the shares of common stock received by the Company under the Capped Calls as they are exercised. The formula above would be adjusted in the event of certain specified extraordinary events affecting the Company, including a merger; a tender offer; nationalization, insolvency or delisting of the Company’s common stock; changes in law; failure to deliver; insolvency filing; stock splits, combinations, dividends, repurchases or similar events; or an announcement of certain of the preceding actions. The Company can also elect to receive the equivalent value of cash in lieu of shares of common stock upon settlement, except in certain circumstances. The Capped Calls expire on December 1, 2028 and terminate upon the occurrence of certain extraordinary events such as a merger, tender offer, nationalization, insolvency, delisting, event of default, a change in law, failure to deliver, an announcement of certain of these events, or an early conversion of the Convertible Notes. Although intended to reduce the net number of shares of common stock issued after a conversion of the Convertible Notes, the Capped Calls were separately negotiated transactions, are not a part of the terms of the Convertible Notes, and do not affect the rights of the holders of the Convertible Notes. The Company made a tax election to integrate the Convertible Notes and the Capped Calls. The accounting impact of this tax election makes the Capped Calls deductible as original issue discount interest for tax purposes over the term of the note, and as a result, established as deferred income tax asset of $ 10.8 million at inception, with an offsetting adjustment to additional paid-in capital on the consolidated balance sheets as of December 31, 2022. At issuance the Company concluded that the Capped Calls met the criteria for equity classification because they are indexed to the Company’s common stock and the Company has discretion to settle the Capped Calls in shares or cash. As a result, the amount paid for the Capped Calls was recorded as a reduction to additional paid-in capital. Other Debt Other debt consists of the debt obligations of STI Operations (“Other Debt”). Interest rates on Other debt range from 3.13 % to 6.10 % annually. Of the $ 33.8 million carrying value of the Other debt balance as of December 31, 2024, $ 14.9 million is denominated in Euros and $ 18.9 million is denominated in U.S. dollar. These debt obligations mature by 2027. F-44 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements At December 31, 2024, STI Operations had three notes payable with a carrying value of $ 18.9 million outstanding, which resulted from a reverse factoring arrangements with a bank. The notes payable mature within a year from issuance and are included in the carrying value of Other debt of $ 33.8 million. Aggregate Debt Maturities Aggregate future debt maturities are as follows (in thousands): Amount 2025 $ 30,959 2026 9,925 2027 227,033 2028 425,000 2029 — $ 692,917 12. Redeemable Perpetual Preferred Stock Series A Redeemable Perpetual Preferred Stock The Company entered into a Securities Purchase Agreement (the “Series A Purchase Agreement”) with certain investors (the “Series A Investor”) pursuant to which, on August 11, 2021, the Company issued 350,000 shares of its newly designated Series A Shares and 7,098,765 shares of the Company’s common stock for an aggregate purchase price of $ 346.0 million (the “Initial Closing”). Further, pursuant to the Series A Purchase Agreement, on September 27, 2021, the Company issued and sold to the Series A Investor 776,235 shares of common stock for an aggregate purchase price of $ 776 (the “Prepaid Forward Contract”). The Company used the net proceeds from the Initial Closing to repay the $ 102.0 million outstanding balance under its existing Revolving Credit Facility and prepay $ 100.0 million of the Company’s Term Loan Facility. The Series A Shares have no maturity date. The Series A Purchase Agreement required the Series A investor to purchase up to an additional 150,000 shares of Series A Shares and up to 3,375,000 shares of common stock (or up to 6,100,000 shares of common stock in the event of certain price-related adjustments) until June 30, 2023, subject to certain equitable adjustments pursuant to any stock dividend, stock split, stock combination, reclassification or similar transaction, for an aggregate purchase price up to $ 148.0 million (the “Put Option”). The Put Option expired effective June 30, 2023. On January 7, 2022, pursuant to the Put Option, the Company issued and sold to the Series A Investor 50,000 shares of Series A Shares and 1,125,000 shares of the Company’s common stock in an additional closing for an aggregate purchase price of $ 49.4 million (the “Additional Closing”). The Company evaluated the accounting for the instruments issued pursuant to the Series A Purchase Agreement and determined the Series A Shares and common stock issued in the Initial Closing, as well as the Prepaid Forward Contract and the Put Option are freestanding instruments accounted for in equity. The Series A Shares are recorded in temporary equity on the consolidated balance sheets as they have redemption features upon certain triggering events that are outside the Company’s control, such as a fundamental change. F-45 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements The proceeds of the Series A Shares, net of transaction costs and discount of $ 334.6 million have been allocated to each instrument based on its relative fair value. At the Initial Closing date, $ 229.8 million was allocated to the Series A Shares, $ 105.4 million to common stock, $ 12.4 million to the Put Option, which was recorded as a debit to additional paid-in-capital, and $ 11.7 million to the Prepaid Forward Contract. Direct costs associated with the issuance of the Securities were $ 11.1 million, which along with the $ 4.4 million discount, have been accounted for as a reduction in the proceeds of the Securities. The net proceeds of $ 334.6 million have been allocated to Series A Shares of $ 229.8 million, common stock of $ 105.4 million and additional paid-in capital of $ 12.4 million for the committed financing put right. The Additional Closing proceeds, net of transaction costs and discount of $ 1.3 million, were allocated among the Series A Shares and common stock based on the proceeds of $ 33.1 million and $ 15.9 million, respectively. The Company has classified the Series A Shares as temporary equity and is accreting the carrying amount to its full redemption amount from the date of issuance to the earliest redemption date using the effective interest method. Such accretion totaled $ 27.5 million and $ 25.3 million for the years ended December 31, 2024 and 2023, respectively. At issuance, the Company evaluated the accounting for the instruments issued pursuant to the Series A Purchase Agreement and determined the Series A Shares and common stock issued in the Initial Closing, as well as the Prepaid Forward Contract and the Put Option, are freestanding instruments that are classified in equity. Dividends On or prior to the fifth anniversary of the Initial Closing, the Company may pay dividends on the Series A Shares either in (i) cash at the then-applicable Cash Regular Dividend Rate (as defined below), (ii) through accrual to the Liquidation Preference at the Accrued Regular Dividend Rate of 6.25 % (the “Permitted Accrued Dividends,”) or (iii) a combination thereof. Following the fifth anniversary of the Initial Closing, dividends are payable only in cash. To the extent the Company does not declare such dividends and pay in cash following the fifth anniversary of the Initial Closing, the dividends accrue to the Liquidation Preference (“Default Accrued Dividends”) at the then-applicable Cash Regular Dividend Rate plus 200 basis points. In the event there are Default Accrued Dividends outstanding for six consecutive quarters, the Company, at the option of the holders of the Series A Shares, will pay 100 % of the amount of Default Accrued Dividends by delivering to such holder a number of shares of the Company’s common stock equal to the quotient of (i) the amount of Default Accrued Dividends divided by (ii) 95 % of the 30-day VWAP of the Company’s common stock (“Non-Cash Dividend”). The “Cash Regular Dividend Rate” of the Series A Shares means (i) initially, 5.75 % per annum on the Liquidation Preference and (ii) increased by (a) 50 basis points on each of the fifth, sixth and seventh anniversaries of the Initial Closing and (b) 100 basis points on each of the eighth, ninth and tenth anniversaries of the Initial Closing. The “Accrued Regular Dividend Rate” on the Series A Shares means 6.25 % per annum on the Liquidation Preference. As used herein, “Liquidation Preference” means, with respect to the Series A Shares, the initial liquidation preference of $ 1,000 per share plus any accrued dividends of such share as the time of the determination. F-46 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements During the year ended December 31, 2024, the Company accrued dividends on the Series A Shares at the Accrued Regular Dividend rate of 6.25 % totaling $ 28.2 million. As of December 31, 2024 total accrued and unpaid dividends were $ 60.9 million. The Series A Shares have similar characteristics of an “Increasing Rate Security” as described by SEC Staff Accounting Bulletin Topic 5Q, Increasing Rate Preferred Stock . As a result, the discount on Series A Shares is considered an unstated dividend cost that is amortized over the period preceding commencement of the perpetual dividend using the effective interest method, by charging imputed dividend cost against retained earnings, or additional paid in capital in the absence of retained earnings, and increasing the carrying amount of the Series A Shares by a corresponding amount. Accordingly, the discount is amortized over five years using the effective yield method. Fees During the six months ended June 30, 2023, the Company paid the Series A Investor a per annum cash commitment fee totaling $ 1.5 million on the unpurchased portion of the Put Option. The Put Option expired effective June 30, 2023. Ranking and Liquidation Preference The Series A Shares rank senior to the Company’s common stock with respect to dividend rights and rights upon the voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company (a “Liquidation”). Upon a Liquidation, each of Series A Redeemable Share would be entitled to receive an amount per share (the “Liquidation, Redemption or Repurchase Amount”) equal to the greater of (i) the Liquidation Preference of such share, plus all accrued and unpaid dividends (including any Accrued Dividends) thereon and (ii) an amount in cash equal to the sum of (a) 130.0 % of the Initial Liquidation Preference (as defined below) of such share, minus (b) the cumulative amount of cash dividends paid in respect of such share prior to such payment. As used herein, “Liquidation Preference” means, with respect to any of the Series A Shares, the initial liquidation preference of $ 1,000 per share (the “Initial Liquidation Preference”) plus any Accrued Dividends of such share as of the time of determination. Redemption Rights The Company may redeem all or any portion of the Series A Shares (in increments of not less than $ 200 million, based on the Liquidation Preference of the Series A Shares to be redeemed at such time or such lesser amount to the extent the Company chooses to redeem all of the outstanding shares of Series A Shares) for an amount in cash equal to the Liquidation, Redemption or Repurchase Amount. Upon a “Fundamental Change” (involving a change of control, bankruptcy, insolvency or liquidation of the Company as further described in the Certificate of Designations), each Holder shall have the right to require the Company to redeem all or any part of the Holder’s Series A Shares for an amount in cash equal to the Liquidation, Redemption or Repurchase Amount. Voting Rights Each Holder of Series A Shares will have one vote per share on any matter on which Holders of Series A Shares are entitled to vote separately as a class (as described below), whether at a meeting or by written consent. The Holders of Series A Shares do not otherwise have any voting rights. F-47 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements 13. Common and Preferred Stock Common Stock Each holder of the Company’s common stock shall be entitled to one vote for each share of common stock held as of the applicable record date on any matter that is submitted to a vote or for the consent of the stockholders of the Company. The holders of the Company’s common stock shall be entitled to share equally, on a per share basis, in such dividends and other distributions of cash, property or shares of stock of the Company as may be declared by the Company’s board of directors, subject to the preferences applicable to holders of preferred stock. In the event of a voluntary or involuntary liquidation, dissolution, distribution of assets or winding up of the Company, all assets of the Corporation of whatever kind available for distribution to the holders of the Company’s common stock shall be divided among and paid ratably to the holders of common stock, subject to the preferences applicable to holders of preferred stock. Preferred Stock Preferred stock may be issued from time to time by the Company for such consideration as may be fixed by the Company’s board of directors. The board of directors is authorized to provide for one or more series of preferred stock and to fix the designation of such series, the voting rights, preferences and relative, participating, optional and other special rights, and the qualifications, limitations or restrictions thereof, of such series of preferred stock and the number of shares of such series, as may be permitted under the General Corporation Law of the State of Delaware. The powers, preferences and relative, participating, optional and other special rights of, and the qualifications, limitations or restrictions thereof, of each series of preferred stock, if any, may differ from those of any and all other series at any time outstanding. 14. Revenue The Company disaggregates its revenue from contracts with customers by sales recorded over time and sales recorded at a point in time. The following table presents the Company’s disaggregated revenues (in thousands): Year Ended December 31, 2024 2023 2022 Over-time revenue $ 744,346 $ 1,417,217 $ 1,155,848 Point in time revenue 171,461 159,334 481,698 Total revenue $ 915,807 $ 1,576,551 $ 1,637,546 Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (“contract assets”), and deferred revenue (“contract liabilities”) on the condensed consolidated balance sheets. The majority of the Company’s contract amounts are billed as work progresses, in accordance with agreed-upon contractual terms, which generally coincide with the shipment of one or more phases of the project. For certain customer contracts, billing can occur in advance of shipment, resulting in contract liabilities. Billing sometimes occurs subsequent to revenue recognition, resulting in contract assets. The changes in contract assets and the corresponding amounts recorded in revenue relate to fluctuations in the timing and volume of billings. F-48 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements Contract assets consisting of unbilled receivables are recorded within accounts receivable, net on the consolidated balance sheets on a contract-by-contract basis at the end of the reporting period and consisted of the following (in thousands): December 31, 2024 2023 2022 Unbilled receivables $ 94,045 $ 102,603 $ 101,513 The Company also receives advances or deposits from its customers, before revenue is recognized, resulting in contract liabilities. The changes in contract liabilities (i.e., deferred revenue) relate to advanced orders and payments received by the Company. Contract liabilities consisting of deferred revenue recorded on a contract-by-contract basis at the end of each reporting period were as follows (in thousands): December 31, 2024 2023 2022 Deferred revenue $ 119,775 $ 66,488 $ 178,922 During the years ended December 31, 2024 and 2023, the Company converted $ 42.4 million and $ 161.2 million deferred revenue to revenue, respectively, which represented 64 % and 90 % of the prior years’ deferred revenue balance, respectively. Bill-and-Hold Arrangements Revenue recognized for the Company’s federal investment tax credit (“ITC”) contracts and standalone system component sales is recorded at a point in time and recognized when obligations under the terms of the contract with the Company’s customer are satisfied. Generally, this occurs with the transfer of control of the asset, which is typically upon delivery to the customer in line with shipping terms. In certain situations, the Company recognizes revenue under a bill-and-hold arrangement with its customers. An example of such a situation is when customers purchase material prior to the start of construction of a solar project in order to meet the Five Percent Safe Harbor test to qualify for the ITC. Because the customers lack sufficient storage capacity to accept a large amount of material prior to the start of construction, they request that the Company keep the product in its custody. All bill-and-hold inventory is bundled or palletized in the Company’s warehouses, separately identified as not belonging to the Company and ready for immediate transport to the customer project upon request. Additionally, title and risk of loss has passed to the customer and the Company does not have the ability to use the product or direct it to another customer . F-49 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements During the year ended December 31, 2024, the Company recognized $ 1.9 million in revenue from one customer for the sale of goods and services that contained bill-and-hold obligations such as storage, handling and other custodial duties. During the year ended December 31, 2023 and 2022, the Company recognized $ 38.8 million, and $ 13.7 million, respectively, from three and one customer, respectively, that also contained bill-and-hold obligations. Remaining Performance Obligations As of December 31, 2024, the Company had $ 593.6 million of remaining performance obligations. The Company expects to recognize revenue on 97 % of these performance obligations in the next twelve months. 15. Earnings per Share The following table sets forth the computation of basic and diluted income (loss) per share (in thousands, except per share amounts): Year Ended December 31, 2024 2023 2022 Net income (loss) $ ( 240,394 ) $ 137,240 $ 4,432 Preferred dividends and accretion 55,670 51,691 48,054 Net income (loss) to common shareholders ( 296,064 ) 85,549 ( 43,622 ) Basic: Weighted average common shares outstanding 151,754 150,942 149,819 Earnings (loss) per share $ ( 1.95 ) $ 0.57 $ ( 0.29 ) Diluted: Weighted average common shares outstanding 151,754 150,942 149,819 Effect of Restricted Stock and Performance Awards — 1,080 — Weighted average dilutive shares 151,754 152,022 149,819 Income (loss) per share $ ( 1.95 ) $ 0.56 $ ( 0.29 ) Since the Company was in a loss position for the year ended December 31, 2024 and 2022, basic net loss per share to common shareholders is the same as diluted net loss per share to common stockholders, as the inclusion of all potential shares of common stock outstanding would have been anti-dilutive. At December 31, 2024 , 2023 and 2022, 3,572,402 , 2,362,982 , and 2,165,217 , respectively, of common stock equivalents were excluded from the calculation of diluted net loss per share to common stockholders, as they had an antidilutive effect. There were no potentially dilutive common shares issuable pursuant to the Convertible Notes for the years ended December 31, 2024, 2023 and 2022, as the average market price of the Company’s common stock has not exceeded the exercise price since their issuance. F-50 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements 16. Commitments and Contingencies Litigation The Company, in the normal course of business, is subject to claims and litigation. The Company reviews the status of each matter and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, the Company would accrue a liability for the estimated loss. On May 14, 2021, a putative class action was filed in the U.S. District Court for the Southern District of New York against the Company and certain officers and directors alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5, promulgated thereunder, and Sections 11, 12(a)(2) and 15 of the Securities Exchange Act of 1933 (“Plymouth Action”). The complaint alleges misstatements and/or omissions in the Company’s registration statements and prospectuses related to the Company’s October 2020 initial public offering (“IPO”), the Company’s December 2020 offering, and the Company’s March 2021 offering during the putative class period of October 14, 2020 through May 11, 2021. A consolidated amended class action complaint was filed on December 7, 2021 with additional allegations regarding misstatements and/or omissions in: (1) in the Company’s Annual Report on Form 10-K and associated press release announcing results for the fourth quarter and full fiscal year 2020; and (2) in the Company’s November 5, 2020 and March 9, 2021 earnings calls. On June 30, 2021, a substantially similar second putative class action was filed in the Southern District of New York against the Company and certain officers and directors alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5, promulgated thereunder, and Sections 11 and 15 of the Securities Exchange Act of 1933, which was consolidated with the Plymouth Action. All Defendants in the Plymouth Action, including the Company, moved to dismiss the consolidated amended complaint. On May 19, 2023, the court granted the Company’s motion to dismiss and, on July 5, 2023, denied a request from the Plymouth Action plaintiffs for leave to amend the consolidated amended complaint and dismissed the Plymouth Action in its entirety with prejudice. On August 4, 2023, the lead plaintiffs filed a notice of appeal of the court’s dismissal of the consolidated amended complaint to the U.S. Court of Appeals for the Second Circuit. After full briefing, the court of appeals heard oral argument on June 26, 2024 and the case is still pending decision by the court. On July 16, 2021, a verified derivative complaint was filed in the Southern District of New York against certain officers and directors of the Company. The complaint alleges: (1) violations of Section 14(a) of the Securities Exchange Act of 1934 for misleading proxy statements, (2) breach of fiduciary duty, (3) unjust enrichment, (4) abuse of control, (5) gross mismanagement, (6) corporate waste, (7) aiding and abetting breach of fiduciary duty, and (8) contribution under sections 10(b) and 21D of the Securities Exchange Act of 1934. On July 30, 2021, a second verified derivative complaint was filed in the Southern District of New York against certain officers and directors of the Company. The complaint alleges: (1) violations of Section 14(a) of the Securities Exchange Act of 1934 for causing the issuance of a false/misleading proxy statement, (2) breach of fiduciary duty, and (3) aiding and abetting breaches of fiduciary duty. F-51 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements On August 24, 2021, the Southern District of New York derivative actions were consolidated, and the court appointed co-lead counsel. The consolidated cases remain stayed pending the outcome of the appeal of the Plymouth Action. On August 3, 2022, a verified derivative complaint was filed in the Court of Chancery of the State of Delaware against certain officers and directors of the Company, asserting claims for: (1) breach of fiduciary duty and (2) unjust enrichment. On August 11, 2022, a second verified derivative complaint was filed with the Court of Chancery against certain officers and directors of the Company, asserting claims for: (1) breach of fiduciary duty; (2) aiding and abetting breaches of fiduciary duty; (3) waste of corporate assets; (4) unjust enrichment; (5) insider selling; and (6) aiding and abetting insider selling. On September 2, 2022, the derivative cases with the Court of Chancery were consolidated and the court appointed co-lead counsel. The consolidated cases remain stayed pending the outcome of the appeal of the Plymouth Action. 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. The Company has not recorded any material loss contingency in the consolidated balance sheets as of December 31, 2024. Commercial Supplier Settlement During March 2024, the Company reached a settlement with one of its vendors, in which the Company received $ 4.0 million in the form of a one-time $ 2.6 million cash payment due immediately, and $ 1.4 million in credits with the vendor which can be applied by the Company to future orders from the respective vendor. If the Company does not utilize all of the credits by January 2026, it will receive a one-time cash payment from the vendor for the remaining unused credit balance. During the year ended December 31, 2024 the Company recognized a $ 4.0 million reduction to cost of revenue on the consolidated statements of operations from the settlement, and has a receivable of $ 0.4 million included in Prepaid and other expenses, net on the consolidated balance sheet. Subsequent to December 31, 2024, the Company has collected the remaining outstanding amount. The Company is party to various other legal proceedings, claims, governmental and/or regulatory inspections, inquiries and investigations arising out of the ordinary course of its business. The Company believes that, there are no other proceedings or claims pending against it, the ultimate resolution of which could have a material adverse effect on its financial condition or results of operations. In all cases, at each reporting period, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under ASC 450, Contingencies (ASC 450). Legal costs are expensed as incurred. It is possible that future results for any particular quarter or annual period may be materially affected by changes in our assumption or the effectiveness of the Company’s strategies relating to these proceedings. Contingent Consideration Tax Receivable Agreement Concurrent with the Former Parent’s acquisition of Array Technologies Patent Holdings Co., LLC on July 8, 2016, Array Tech, Inc. entered into a TRA with the former majority shareholder of the Company. The TRA is valued based on the future expected payments under the agreement. The TRA provides for the payment by F-52 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements Array Tech, Inc. to the former owners for certain federal, state, local and non-U.S. tax benefits deemed realized in post-closing taxable periods by the Company, from the use of certain deductions generated by the increase in the tax value of the developed technology. The TRA is accounted for as contingent consideration and changes in the fair value of the TRA are recognized in earnings. As of December 31, 2024 and 2023, the fair value of the TRA was $ 9.1 million and $ 10.4 million, respectively. Estimating the amount of payments that may be made under the TRA is by nature imprecise. The significant fair value inputs used to estimate the future expected TRA payments to the former owners include the timing of tax payments, a discount rate, book income projections, timing of expected adjustments to calculate taxable income and the projected rate of use for attributes defined in the TRA. Payments made under the TRA consider tax positions taken by the Company and are due within 125 days following the filing of the Company’s U.S. federal and state income tax returns under procedures described in the agreement. The current portion of the TRA liability is based on tax returns. The TRA will continue until all tax benefit payments have been made or the Company elects early termination under the terms described in the TRA. The following table summarizes the activity related to our estimated TRA obligation (in thousands): TRA Liability Balance, December 31, 2022 $ 8,587 IRS Settlement ( 1,200 ) Fair value adjustment 2,976 Balance, December 31, 2023 10,363 Payments ( 1,427 ) Fair value adjustment 125 Balance, December 31, 2024 $ 9,061 The TRA liability requires significant judgment and is classified as Level 3 in the fair value hierarchy. Surety Bond The Company is required to provide surety bonds to various parties as required for certain transactions initiated during the ordinary course of business to guarantee the Company’s performance in accordance with contractual or legal obligations. These off-balance sheet arrangements do not adversely impact the Company’s liquidity or capital resources. As of December 31, 2024, the Company had surety bonds outstanding in the amount of $ 270.9 million. Purchase Commitments The Company has entered into various purchase agreements, including inventory-related agreements with its suppliers to purchase raw materials or parts. The Company had non-cancellable purchase obligations of $ 78.2 million at December 31, 2024. F-53 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements 17. Fair Value of Financial Instruments The carrying values and the estimated fair values of debt financial instruments were as follows (in thousands): December 31, 2024 December 31, 2023 Carrying Value Fair Value Carrying Value Fair Value Convertible Notes $ 417,525 $ 311,525 $ 415,632 $ 416,500 The fair value of the Convertible Notes is estimated using Level 2 inputs, as they are not registered securities nor listed on any securities exchange but may be traded by qualified institutional buyers. The fair value of the Term Loans and Other debt is estimated using Level 2 inputs. The carrying values of the Term Loans outstanding under the Senior Secured Credit facility recorded in consolidated balance sheets approximate fair value due to the variable interest rate. Other debt totaling $ 33.8 million, consists of $ 14.9 million variable rate obligations and $ 18.9 million fixed rate obligations. Due to the relative short-term maturity of the fixed rate obligations, the Company believes the carrying value approximates fair value. The carrying value of the variable rate obligations approximate fair value due to the variable nature of the interest rates. 18. Equity-Based Compensation and Other Benefit Plans 2020 Equity Incentive Plan On October 14, 2020, the Company’s 2020 Equity Incentive Plan (the “2020 Plan”) became effective. The 2020 Plan authorized 6,683,919 new shares, subject to adjustments pursuant to the 2020 Plan. Restricted Stock Units Pursuant to the 2020 Plan, the Company grants restricted stock units (“RSUs”) to employees and board of director members. The fair value of the RSUs is determined using the market value of common stock on the grant date. F-54 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements RSU activity under the 2020 Plan was as follows: Number of Shares Weighted Average Grant Date Fair Value Outstanding non-vested, December 31, 2021 930,409 $ 22.39 Shares granted 1,484,782 $ 10.93 Shares vested ( 458,849 ) $ 20.00 Shares forfeited ( 255,518 ) $ 15.42 Outstanding non-vested, December 31, 2022 1,700,824 $ 13.81 Shares granted 904,075 $ 17.89 Shares vested ( 736,774 ) $ 14.43 Shares forfeited ( 197,616 ) $ 16.43 Outstanding non-vested, December 31, 2023 1,670,509 $ 15.44 Shares granted 2,184,402 $ 9.54 Shares vested ( 728,518 ) $ 15.35 Shares forfeited ( 478,232 ) $ 13.19 Outstanding non-vested, December 31, 2024 2,648,161 $ 10.97 Performance Stock Units The Company has granted performance stock units (“PSUs”) to certain executives. The PSUs cliff vest after three years and upon meeting certain revenue and adjusted EPS targets. The PSUs also contain a modifier based on the total stock return (“TSR”) compared to a certain index which modifies the number of PSUs that vest. The PSUs were valued using a Monte-Carlo simulation method on the date of grant based on the U.S. Treasury Constant Maturity rates. The following assumptions were used in the Monte Carlo simulation for computing the grant date fair value of the PSUs issued during the years ended December 31, 2024 and 2023: 2024 2023 Volatility 79 % 90 % Risk-free interest rate 4.62 % 3.74 % Dividend yield — % — % F-55 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements PSU activity under the 2020 Plan during the years ended December 31, 2024, 2023 and 2022, was as follows: Number of Shares Weighted Average Grant Date Fair Value PSUs Outstanding non-vested, December 31, 2021 147,687 $ 27.75 Shares granted (1) 466,916 $ 10.88 Shares vested — $ — Shares forfeited ( 150,210 ) $ 20.81 Outstanding non-vested, December 31, 2022 464,393 $ 11.96 Shares granted (1) 263,594 $ 19.22 Shares vested — $ — Shares forfeited ( 35,514 ) $ 15.47 Outstanding non-vested, December 31, 2023 692,473 $ 14.54 Shares granted (1) 586,316 $ 11.74 Shares vested — $ — Shares forfeited ( 354,548 ) $ 16.16 Outstanding non-vested, December 31, 2024 924,241 $ 12.76 (1) Number of PSUs granted is based on the attainment level of performance metric(s), by key executive officers and employees of the Company, estimated to be probable at the grant date. The actual number of shares to be issued will depend on the relative attainment of the performance metrics. The aggregate fair value of RSU and PSU that vested during the years ended December 31, 2024, 2023 and 2022 was $ 9.5 million, $ 15.9 million and $ 5.9 million, respectively, which represented the market value of our common stock on the date that the RSUs or PSUs vested. For the years ended December 31, 2024, 2023 and 2022, the Company recognized $ 10.3 million, $ 14.6 million and $ 14.8 million, respectively, in equity-based compensation, which is included in General and administrative expense on the consolidated statements of operations. At December 31, 2024, the Company had $ 19.6 million of unrecognized compensation costs related to RSUs and PSU, which are expected to be recognized over a weighted average of 2.1 years and 2.0 years, respectively. Employee Stock Purchase Plan The Company’s Compensation Committee approved the Employee Stock Purchase Plan in December 2021. The Plan allows employees to purchase shares at a 15 % discount off the lower of the stock price at the beginning or ending of the six months window through payroll deductions. The plan is considered compensatory in nature and the Company recorded equity-based compensation expense on the plan beginning in 2022. During the years ended December 31, 2024 and 2023, the Company recorded $ 0.2 million and $ 0.1 million, respectively, in equity-based compensation related to the Employee Stock Purchase Plan. F-56 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements Deferred Compensation Plan On May 21, 2024, the Human Capital Committee (the “Committee”) of the Board of Directors (the “Board”) of Array Technologies, Inc. adopted the Array Tech, Inc. Deferred Compensation Plan (the “Plan”). The Plan is a non-qualified deferred compensation plan intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”). Participation in the Plan is voluntary and is currently available to U.S. employees of the Company and its subsidiaries at the level of Vice President and above. Deferred compensation plan liabilities at December 31, 2024 were immaterial. 401(k) Plan We have a defined contribution plan (“401(k) Plan”) which allows eligible employees to contribute up to 75 % of their compensation up to the Internal Revenue Service maximum. We match each employee’s deferrals (contributions) at 100 % for the first 3 % and 50 % of the fourth and fifth percentages of compensation and may make additional contributions at our discretion. Employees are immediately vested in the contributions made by us. Our contributions to the 401(k) Plan were $ 2.0 million, $ 1.9 million, and $ 1.5 million for the years ended December 31, 2024, 2023 and 2022, respectively, and are recorded in cost of revenue and general and administrative expense. We have made no discretionary contributions to the 401(k) Plan to date. 19. Leases The Company accounts for its leases under ASC 842 Leases (“ASC 842”). The Company has elected to apply the short-term measurement and recognition exemption in which the right-of-use (“ROU”) assets and lease liabilities are not recognized for short-term leases. The following table summarizes the Company’s ROU assets and lease liabilities (in thousands): December 31, Location on the Consolidated Balance Sheets 2024 2023 ROU Assets Other assets $ 16,384 $ 22,085 Lease liabilities, current portion Other current liabilities 5,600 5,744 Lease liabilities, long-term portion Other long-term liabilities 15,128 19,475 Total lease liabilities $ 20,728 $ 25,219 The components of lease cost related to the Company’s operating leases were as follows (in thousands): Year Ended December 31, 2024 2023 2022 Operating lease expense $ 8,262 $ 8,188 $ 7,701 Variable lease expense 1,838 1,501 1,089 Short-term lease expense 48 86 327 Total lease expense $ 10,148 $ 9,775 $ 9,117 Future minimum operating lease payments as of December 31, 2024, are as follows (in thousands): F-57 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements Operating Leases 2025 $ 5,156 2026 3,035 2027 2,968 2028 2,983 2029 3,047 Thereafter 11,268 Total lease payments 28,457 Less: Imputed lease interest ( 7,729 ) Total lease liabilities $ 20,728 Other information pertaining to operating leases consists of the following: Year Ended December 31, 2024 2023 2022 Weighted average remaining lease-term 6.0 years 5.7 years 4.2 years Weighted average discount rate 8.3 % 7.9 % 5.4 % Supplemental cash flow and other information related to operating leases are as follows (in thousands): Year Ended December 31, 2024 2023 2022 Operating cash flows from operating leases $ 7,042 $ 7,911 $ 5,380 Non cash investing activities: Lease liabilities arising from obtaining right-of-use assets $ 849 $ 10,562 $ 12,558 In May 2024, the Company entered into a triple net lease (“NNN term lease”) with GDC Sunshine LLC (“Lessor”) for 13 1/2 years ( 162 full calendar months) for a new manufacturing and office facility in Bernaillo County, New Mexico. The NNN term lease agreement allows for an extension of one consecutive period of 10 years. The new facility that is mixed use and built for general purposes will be approximately 216,000 square feet when constructed. The NNN term lease commences upon the earliest of several events, including the Lessor’s completion of the construction of the building, which is currently expected to occur in the fourth quarter of 2025 and will be accounted for as a finance lease. Under the construction agreement with the Lessor, the Company contributed approximately $ 11.3 million to the construction costs of the facility during October 2024. Future minimum lease payments under the NNN term lease, assuming the Company executes the renewal option, are estimated to be $ 105.0 million at December 31, 2024, payable over the expected lease term beginning with the commencement date. In connection with this NNN term lease and the Company’s planned acquisition of machinery and equipment related to the new facility, the Lessor and the Company entered into a series of transactions with Bernalillo County (the “County”) related to a tax abatement plan. These transactions had no net impact to the F-58 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements consolidated financial statements of the Company. The tax abatement plan provides for the effective elimination of 75 % of the real property taxes and 100 % of the personal property taxes payable to the County by the Company and the Lessor during the term of the NNN term lease, and the abatement of 100 % of the sales and use taxes that would be incurred by the Company and the Lessor related to the purchase and use of machinery and equipment. 20 . Segment and Geographic Information ASC 280 Segment Reporting establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The CODM is the Chief Executive Officer of the Company. The Company works with engineering, procurement, and construction firms, to design a solar array to achieve the projects desired power output. The Company provides the solar tracking system components, which include standard and nonstandard parts. The Company delivers the fully functioning tracker systems for the project sites and provides commissioning services. Although the solar array may use different components and technology depending on the geography and type of system, the Company conducts its operations in the United States and internationally, primarily in Spain and Brazil and is expanding into other international markets through STI Operations. The Company has two separate operating segments, Legacy Array and STI Operations, which are also reportable segments. Legacy Array consists primarily of amounts earned from the design and delivery of solar array’s in the United States, and STI operations consists primarily of amounts earned from the design and delivery of solar array’s outside of the United States. The Company’s CODM assesses the performance of each operating segment by using gross profit. This measure is also predominantly used in the annual budget and forecasting process. The CODM primarily uses the annual operating plan and the monthly financial results for Legacy Array and STI Operations when making decisions about the allocation of operating and capital resources to each segment. The following tables summarize the financial results by segment during the periods presented (in thousands): F-59 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements Year Ended December 31, 2024 Array Legacy Operations STI Operations Consolidated Segment revenue $ 661,629 $ 254,178 $ 915,807 Less: Product cost (1) 353,034 225,517 578,551 Amortization of developed technology 14,558 — 14,558 Depreciation 2,045 90 2,135 Other costs (2) 21,961 925 22,886 Gross profit $ 270,031 $ 27,646 $ 297,677 Total operating expenses — — ( 524,682 ) Total other expense, net — — ( 23,571 ) Income (loss) before income taxes $ ( 250,576 ) Segment assets 1,018,487 407,512 1,425,999 Capital expenditures 6,423 882 7,305 Depreciation and amortization 27,303 25,476 52,779 Interest income 12,767 4,010 16,777 Interest expense 32,516 2,309 34,825 F-60 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements Year Ended December 31, 2023 Array Legacy Operations STI Operations Consolidated Segment revenue $ 1,172,827 $ 403,724 $ 1,576,551 Less: Product cost (1) 805,174 305,778 1,110,952 Amortization of developed technology 14,558 — 14,558 Depreciation (3) 1,348 — 1,348 Other costs (2) (3) 34,142 — 34,142 Gross profit $ 317,605 $ 97,946 $ 415,551 Total operating expenses — — ( 201,427 ) Total other expense, net — — ( 36,967 ) Income (loss) before income taxes $ 177,157 Segment assets 868,697 838,044 1,706,741 Capital expenditures 15,748 1,241 16,989 Depreciation and amortization 26,840 27,986 54,826 Interest income 3,985 4,345 8,330 Interest expense 40,982 3,247 44,229 F-61 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements Year Ended December 31, 2022 Array Legacy Operations STI Operations Consolidated Segment revenue $ 1,267,883 $ 369,663 $ 1,637,546 Less: Product cost 1,047,772 310,557 1,358,329 Amortization of developed technology 14,558 — 14,558 Depreciation (3) 1,620 — 1,620 Other costs (2) (3) 50,321 — 50,321 Gross profit $ 153,612 $ 59,106 $ 212,718 Total operating expenses — — ( 230,851 ) Total other expense, net — — 13,181 Income (loss) before income taxes $ ( 4,952 ) Segment assets 843,934 862,118 1,706,052 Capital expenditures 9,831 788 10,619 Depreciation and amortization 25,960 75,099 101,059 Interest income 504 2,677 3,181 Interest expense 34,272 2,422 36,694 (1) Includes 45X benefits realized in the amount of $ 137.8 million and $ 9.3 million for fiscal 2024 and 2023, respectively. (2) Other is primarily comprised of outbound freight and certain overhead costs. (3) Depreciation and Other for STI Operations for the years ended December 31, 2023 and 2022 is immaterial and included within the line item product cost. The following table presents revenues by geographic region, based on the customers project location (in thousands): Year Ended December 31, 2024 2023 2022 U.S. $ 643,481 $ 1,166,160 $ 1,286,064 Spain 83,742 99,160 129,292 Brazil 135,102 257,872 144,464 Australia 8,708 20,842 9,429 Remainder 44,774 32,517 68,297 Total revenue $ 915,807 $ 1,576,551 $ 1,637,546 F-62 Table of Contents Array Technologies, Inc. Notes to Consolidated Financial Statements The following table presents property, plant and equipment, net by geographic region at the end of the period (in thousands): December 31, 2024 2023 U.S. $ 20,058 $ 18,982 Spain 2,967 3,457 Brazil 13 3,305 Australia 471 554 Remainder 2,713 1,595 Total property, plant and equipment, net $ 26,222 $ 27,893 F-63