Array Technologies, Inc. (ARRY): Business Model Canvas [11-2024 Updated]

Understanding the business model of Array Technologies, Inc. (ARRY) reveals how this innovative company is transforming the solar energy landscape. By focusing on key elements such as partnerships, activities, and value propositions, Array Technologies effectively positions itself in the rapidly growing renewable energy sector. Explore the intricacies of their Business Model Canvas to see how they deliver high-efficiency solar tracking systems and drive sustainable energy solutions.

Array Technologies, Inc. (ARRY) - Business Model: Key Partnerships

Collaborations with EPC firms for solar projects

Array Technologies partners with engineering, procurement, and construction (EPC) firms to facilitate the construction of solar energy projects. During the nine months ended September 30, 2024, approximately 70% of Array's revenues were derived from customers in the U.S., highlighting the importance of these collaborations in a market that is rapidly expanding due to increased demand for renewable energy solutions.

Agreements with suppliers for raw materials and components

Array Technologies maintains strategic agreements with suppliers to secure essential raw materials and components required for its solar tracker systems. The company focuses on controlling costs by leveraging its supply chain, which has been crucial in a period marked by fluctuating material prices. In the nine months ended September 30, 2024, Array's total revenue was $640.6 million, down 48% compared to the previous year, largely impacted by a decrease in volume and average selling prices.

Supplier Type	Material/Component	Revenue Impact (2024)
Raw Materials	Steel, Aluminum	Revenue decreased by $119 million or 34%
Components	Electric Motors, Gearboxes	Average selling prices down by 12%

Partnerships with utilities and independent power producers

Array engages with utilities and independent power producers (IPPs) to enhance its reach in the solar market. These partnerships are vital for securing long-term contracts and stable revenue streams. As of September 30, 2024, Array had shipped approximately 79.9 gigawatts of trackers globally, indicating strong demand facilitated by these partnerships.

Engagements with manufacturers for tax credit benefits

Array Technologies collaborates with various manufacturers to optimize tax credit benefits which can enhance project viability and profitability. In 2024, the company entered into a NNN term lease for a new manufacturing facility, which includes provisions for significant tax abatements, effectively eliminating 75% of real property taxes and 100% of personal property taxes during the lease term.

Engagement Type	Tax Benefit	Details
Manufacturing Partnerships	Tax Abatement	75% reduction on real property taxes
Machinery Purchases	Sales Tax Exemption	100% exemption on sales and use taxes

Array Technologies, Inc. (ARRY) - Business Model: Key Activities

Manufacturing solar tracking systems and components

Array Technologies, Inc. specializes in the design and manufacture of utility-scale solar tracking systems. As of September 30, 2024, the company had shipped approximately 79.9 gigawatts of trackers globally. The manufacturing costs for the nine months ended September 30, 2024, included:

Cost Component	Amount (in thousands)
Cost of product and service revenue	$410,299
Amortization of developed technology	$10,918
Total cost of revenue	$421,217

Research and development for product enhancements

Research and development (R&D) is crucial for Array Technologies to maintain its competitive edge. The company reported R&D expenses for the nine months ended September 30, 2024, as follows:

Period	R&D Expense (in thousands)
Three months ended September 30, 2024	$1,600
Three months ended September 30, 2023	$2,000
Nine months ended September 30, 2024	$5,300
Nine months ended September 30, 2023	$6,400

Project management for installation and deployment

Project management is integral to the successful installation and deployment of solar tracking systems. The company focuses on maintaining project timelines and budgets. During the nine months ended September 30, 2024, Array's revenue from its operations was segmented as follows:

Segment	Revenue (in thousands)
Array Legacy Operations	$459,807
STI Operations	$180,768
Total Revenue	$640,575

Customer support and maintenance services

Array Technologies also provides customer support and maintenance services to ensure the optimal performance of its solar tracking systems. For the nine months ended September 30, 2024, the company had:

• Deferred revenue of $112,618 thousand, indicating customer prepayments for future services.
• Warranty provisions amounting to $1,503 thousand, reflecting the company's commitment to post-sale support.

Array Technologies, Inc. (ARRY) - Business Model: Key Resources

Patented technology for solar tracking systems

Array Technologies holds several patents related to its innovative solar tracking systems. This technology is crucial for enhancing the efficiency of solar energy generation by allowing solar panels to follow the sun's trajectory throughout the day. The proprietary technology provides a competitive edge in the renewable energy market, ensuring Array's products remain at the forefront of solar tracking solutions.

Manufacturing facilities and equipment

As of September 30, 2024, Array Technologies has a total property, plant, and equipment value of approximately $51.6 million, with a net value of $27.6 million after depreciation. The company has entered into a triple net lease agreement for a new manufacturing facility in Bernalillo County, New Mexico, which will cover approximately 216,000 square feet. This facility is expected to enhance production capacity and operational efficiency, allowing for increased output of solar tracking systems. The investment in manufacturing equipment plays a pivotal role in maintaining product quality and meeting growing demand in the renewable energy sector.

Skilled workforce and engineering teams

Array Technologies employs a highly skilled workforce, including engineers and technicians specialized in solar technology and manufacturing processes. The company's ability to innovate and maintain high product standards relies heavily on the expertise and proficiency of its workforce. The investment in training and development ensures that employees are well-equipped to handle advancements in technology and manufacturing techniques.

Strategic supplier relationships for components

Array Technologies has established strategic relationships with key suppliers to secure essential components for its solar tracking systems. These relationships enhance supply chain reliability and cost-effectiveness, crucial for maintaining competitive pricing. As of September 30, 2024, the company's inventory levels included $47.4 million in raw materials and $148.3 million in finished goods, indicating a robust supply chain that supports production and distribution needs.

Key Resource	Details	Value/Statistics
Patented Technology	Solar tracking systems	Various patents held
Manufacturing Facilities	New facility in New Mexico	216,000 sq ft, $51.6 million in total property
Skilled Workforce	Engineers and technicians	Investment in training and development
Supplier Relationships	Strategic partnerships for components	$195.7 million in total inventory (as of Sept 30, 2024)

Array Technologies, Inc. (ARRY) - Business Model: Value Propositions

High-efficiency solar tracking systems

Array Technologies specializes in high-efficiency solar tracking systems that optimize solar energy production. The company’s flagship product, the DuraTrack HZ v3, features a patented design that increases energy yield by up to 25% compared to fixed-tilt systems. This advanced technology enables solar plants to capture more sunlight throughout the day, enhancing overall energy output.

Cost-effective solutions for utility-scale solar projects

Array Technologies offers competitive pricing structures aimed at utility-scale solar projects. The company's solutions are designed to reduce the total cost of ownership over the lifecycle of the project. For instance, the company reported a gross profit margin of 34% for the three months ended September 30, 2024, reflecting its focus on cost efficiency.

Enhanced energy production through innovative designs

The innovative designs of Array's solar tracking systems not only improve energy production but also reduce land use. The systems are modular, allowing for quicker installation and scalability. The company’s revenue from contracts recognized over time amounted to $508.1 million for the nine months ended September 30, 2024, showcasing strong market demand for its advanced solutions.

Strong customer service and technical support

Array Technologies emphasizes customer satisfaction through robust customer service and technical support. The company provides ongoing support throughout the project lifecycle, ensuring optimal performance and maintenance of its solar tracking systems. As of September 30, 2024, Array maintained a solid cash balance of $332.4 million, which enables investment in customer service enhancements.

Value Proposition	Description	Financial Impact
High-efficiency solar tracking systems	Optimizes energy yield by up to 25% over fixed-tilt systems.	Gross profit margin of 34% for Q3 2024.
Cost-effective solutions	Designed to lower total cost of ownership for utility-scale projects.	Revenue of $640.6 million for nine months ended September 30, 2024.
Innovative designs	Modular systems allow quick installation and scalability.	Revenue from contracts recognized over time was $508.1 million for nine months ended September 30, 2024.
Strong customer service	Ongoing support throughout project lifecycle.	Cash balance of $332.4 million as of September 30, 2024.

Array Technologies, Inc. (ARRY) - Business Model: Customer Relationships

Long-term contracts with utilities and developers

Array Technologies, Inc. engages in long-term contracts primarily with utility companies and developers in the renewable energy sector. As of September 30, 2024, the company reported total revenue of $640.6 million, a significant decrease of 48% compared to $1.2 billion for the same period in 2023. The revenue from Array Legacy Operations was $459.8 million, down 49% from the prior year, reflecting a decrease in volume and average selling prices.

Direct engagement with customers for feedback and support

Array Technologies maintains direct engagement with its customers to gather feedback and provide support. The company utilizes customer relationship management (CRM) strategies to enhance customer interaction and satisfaction. As of September 30, 2024, Array reported a significant drop in net income, with a net loss of $113.5 million compared to net income of $117.9 million in 2023. This loss underscores the importance of customer feedback as the company navigates operational challenges and strives for recovery.

Education and training for effective product use

To ensure effective product use, Array Technologies invests in education and training programs for its customers. These initiatives are crucial for maximizing the performance of their solar tracking systems. In 2024, the company recognized revenue from over-time contracts amounting to $508.1 million, indicating the importance of ongoing customer education. Additionally, Array's commitment to customer training is reflected in its operational strategies, aiming to improve product utilization in the field.

Community engagement initiatives for brand loyalty

Array Technologies actively engages in community initiatives to foster brand loyalty. The company has committed to several community engagement projects, aligning its corporate social responsibility (CSR) efforts with customer values. As of September 30, 2024, the company posted approximately $198.2 million in surety bonds to guarantee performance in various community-related contracts. This financial commitment demonstrates Array’s dedication to building trust and loyalty within the communities it serves.

Aspect	Details
Long-term Contracts	Total revenue (2024): $640.6 million Array Legacy Operations revenue: $459.8 million (49% decrease)
Customer Engagement	Net loss (2024): $113.5 million (compared to $117.9 million net income in 2023)
Education & Training	Revenue from over-time contracts: $508.1 million
Community Engagement	Surety bonds posted: $198.2 million

Array Technologies, Inc. (ARRY) - Business Model: Channels

Direct sales to EPCs and utility companies

Array Technologies, Inc. primarily generates revenue through direct sales to engineering, procurement, and construction (EPC) companies and utility firms. For the three months ended September 30, 2024, the company reported total revenue of $231.4 million, a decrease of 34% compared to the same period in 2023. This decline was attributed to a significant drop in both volume and average selling prices across its Array Legacy Operations and STI Operations segments. Specifically, the Array Legacy Operations generated $160.3 million in revenue, down 35% year-over-year, while STI Operations contributed $71.1 million, down 33%.

Online platforms for product information and inquiries

Array Technologies utilizes its online platforms to provide comprehensive product information and facilitate inquiries. The company's website serves as a hub for potential customers, offering details on solar tracking systems, parts, and services. This digital outreach is crucial for engaging with EPCs and utility companies, allowing them to access essential information and support directly. The company's ongoing investment in digital marketing and customer engagement strategies enhances its visibility in a competitive market.

Trade shows and industry conferences for networking

Participation in trade shows and industry conferences is a vital channel for Array Technologies to network with potential clients and partners. These events provide opportunities for showcasing their solar tracking systems and innovations, which is essential for establishing brand presence in the solar energy sector. In 2024, Array Technologies plans to attend several key industry events, which will allow them to connect directly with EPCs and utility companies, fostering relationships that can lead to future contracts.

Partnerships with distributors for broader reach

Array Technologies has established partnerships with various distributors to extend its market reach. These partnerships enable the company to penetrate diverse geographical markets and cater to a wider array of customers. The collaboration with distributors allows Array to leverage their networks and expertise, facilitating sales to EPCs and utilities that might be less accessible through direct sales alone. The company reported a significant reliance on these partnerships as part of its growth strategy, especially in regions where it seeks to enhance its footprint.

Channel	Revenue (Q3 2024)	Year-over-Year Change	Key Activities
Direct Sales to EPCs and Utilities	$231.4 million	-34%	Sales of solar tracking systems
Online Platforms	N/A	N/A	Product information and customer inquiries
Trade Shows and Conferences	N/A	N/A	Networking and showcasing products
Partnerships with Distributors	N/A	N/A	Expanding market reach and accessibility

Array Technologies, Inc. (ARRY) - Business Model: Customer Segments

Utility companies in the renewable energy sector

Array Technologies serves various utility companies involved in renewable energy projects. In 2024, the company reported significant revenue contributions from utility clients, aligning with the growing demand for solar energy solutions. As of September 30, 2024, revenue from Array's utility sector clients was approximately $160 million, a decrease of 35% compared to the same period in 2023, which recorded $245 million.

Engineering, procurement, and construction firms

Engineering, procurement, and construction (EPC) firms represent a critical customer segment for Array Technologies. These firms often rely on Array's solar tracking systems to enhance the efficiency of solar installations. In 2024, Array's revenue from EPC clients was approximately $71 million, down 33% from $106 million in 2023. The decline reflects broader market challenges, including reduced project volumes and pricing pressures.

Solar project developers and independent power producers

Solar project developers and independent power producers are key customers for Array Technologies, as they require advanced solar tracking systems for their projects. In the first nine months of 2024, Array generated about $180 million in revenue from this segment, a significant drop of 47% compared to $340 million in 2023. This reduction is attributed to a 31% decrease in project volumes and a 19% decline in average selling prices.

Government and regulatory bodies focusing on sustainability

Array Technologies also engages with government and regulatory bodies that emphasize sustainability initiatives. These partnerships often involve compliance with renewable energy targets and policies. The company has seen an increase in contracts tied to government incentives, with a notable uptick in interest due to the Inflation Reduction Act, which provides tax credits for solar projects. Although specific revenue figures from government contracts were not disclosed, the overall market environment remains favorable as governments push for greater adoption of renewable energy solutions.

Customer Segment	2023 Revenue (in millions)	2024 Revenue (in millions)	Percentage Change
Utility companies	$245	$160	-35%
EPC firms	$106	$71	-33%
Solar project developers	$340	$180	-47%
Government bodies	N/A	N/A	N/A

Array Technologies, Inc. (ARRY) - Business Model: Cost Structure

Raw material costs for manufacturing components

As of September 30, 2024, Array Technologies reported raw material costs amounting to $47.4 million for manufacturing components, reflecting a reduction compared to the previous year due to supply chain efficiencies and lower commodity prices.

Research and development expenditures

Array Technologies allocated approximately $10.9 million towards research and development (R&D) expenditures in the nine months ended September 30, 2024. This represents a focus on innovation and product development aimed at sustaining competitive advantage in the solar technology sector.

Labor costs for manufacturing and engineering teams

The labor costs associated with manufacturing and engineering teams were reported at $29.0 million for the three months ended September 30, 2024. This figure reflects a strategic investment in talent acquisition and retention to enhance operational efficiency.

Operational costs for facilities and logistics

Operational costs, including those for facilities and logistics, totaled $210.9 million for the nine months ended September 30, 2024. This figure encompasses lease payments for new manufacturing facilities and logistics expenses associated with distribution.

Cost Category	Amount (in millions)	Period
Raw Material Costs	$47.4	Q3 2024
R&D Expenditures	$10.9	9 Months Ended Sep 30, 2024
Labor Costs	$29.0	Q3 2024
Operational Costs	$210.9	9 Months Ended Sep 30, 2024

Array Technologies, Inc. (ARRY) - Business Model: Revenue Streams

Sales of solar tracking systems and components

Array Technologies generates significant revenue from the sale of solar tracking systems and components. For the nine months ended September 30, 2024, the total revenue from Array Legacy Operations was approximately $459.8 million, down from $895.3 million in the same period in 2023, marking a decrease of 49%.

Service contracts for installation and maintenance

In addition to product sales, Array Technologies also earns revenue through service contracts related to the installation and maintenance of their solar tracking systems. Revenue from service contracts is typically recognized over time as the services are performed. For the three months ended September 30, 2024, the company's total revenue was $231.4 million, which included service revenue as part of their overall operations.

Revenue from software solutions for energy management

Array Technologies offers software solutions aimed at optimizing energy management for solar installations. This segment is designed to enhance the performance of solar assets through data analytics and management tools. However, specific revenue figures for this segment are not disclosed separately in the financial reports. The overall trend indicates that software solutions play a growing role in their business model, contributing to customer retention and additional revenue streams.

Tax credit benefits from government incentives

Array Technologies benefits from various tax credits and incentives aimed at promoting renewable energy. The Inflation Reduction Act of 2022 introduced the 45X Advanced Manufacturing Production Tax Credit, which provides significant financial benefits to companies producing clean energy components domestically. As of September 30, 2024, the company recognized a Vendor Rebate receivable of $91.6 million, reflecting anticipated benefits from these tax credits.

Revenue Source	Q3 2024 Revenue (in millions)	Q3 2023 Revenue (in millions)	Change (%)
Sales of solar tracking systems and components	$160.3	$244.9	-35%
Service contracts for installation and maintenance	Part of overall revenue	Part of overall revenue	N/A
Software solutions for energy management	N/A	N/A	N/A
Tax credit benefits from government incentives	$91.6 (Vendor Rebates)	N/A	N/A

Updated on 16 Nov 2024

Resources:

1. Array Technologies, Inc. (ARRY) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Array Technologies, Inc. (ARRY)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Array Technologies, Inc. (ARRY)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.