Greetings, welcome to Array Technologies' first quarter 2023 earnings call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Cody Mueller, Investor Relations at Array. Please go ahead. Good evening, thank you for joining us on today's conference call to discuss Array Technologies' first quarter 2023 results. Slides for today's presentation are available on the investor relations section of our website, arraytechinc.com. During this conference call, management will make forward-looking statements based on current expectations and assumptions, which are subject to risks and uncertainties. Actual results could differ materially from our forward-looking statements if any of our key assumptions are incorrect. We identify the principal risks and uncertainties that may affect our performance in our reports and filings with the Securities and Exchange Commission, which can also be found on our investor relations website. We do not undertake any duty to update any forward-looking statements. Today's presentation also includes references to non-GAAP financial measures. You should refer to the information contained in the company's first quarter press release for definitional information and reconciliations to historical non-GAAP measures to the comparable GAAP financial measures. With that, let me turn the call over to Kevin Hostetler, Array Technologies' Chief Executive Officer. Thanks, Cody. Welcome everyone. In addition to Cody, I'm also joined by Nipul Patel, our Chief Financial Officer. Let's begin with slide 3, where I'll provide some highlights of our first quarter results. The first quarter was an incredibly strong one for Array. Revenue, profitability, and free cash flow were all better than expected as the maturity in our operating system allowed us to take advantage of the opportunities that arose in the quarter. On the revenue side, we benefited from a minimal number of weather delays during the period, which, coupled with a more dynamic demand and logistics planning process, allowed us to overdrive revenue to $377 million, representing a 25% growth year-over-year. This revenue performance was at a gross margin of 26.9%, which is a striking 1,810 basis points better than the first quarter of 2022. Nipul will discuss in more detail the breakdown of the margin performance this quarter a little later. This provides another important proof point of the maturation of Array's operating system. It is also important to note that our results this quarter do not include any increased pricing for domestic content or lower input costs from the 45X manufacturing credits. These remain a potential upside once more fully defined. The improved gross margin and volume increase led to an impressive $67 million in adjusted EBITDA, which is up from $700,000 in the first quarter of 2022. Finally, we delivered $42 million of free cash flow in the first quarter as we saw our cash conversion cycle improve 38 days from the first quarter of 2022. This performance leaves us with $148 million of cash on hand and an undrawn revolving credit facility. Moving to the next slide, as I normally do, I want to take some time to walk through the current demand environment as it is constantly evolving, given the dynamics around IRA. This quarter, I will also couple that conversation with how we anticipate these market dynamics to evolve as we move into 2024 and beyond. I believe it is key to draw this distinction because of much of what we are seeing right now is transitory as we shift from a pre-IRA world into the post-IRA environment. We have covered much of this for a number of quarters, so it shouldn't come as a surprise. 2023 is a year where the industry is setting the foundation for the application of the IRA benefits, as the value of the benefits and incentives included in the bill are substantial. This is going to lead to a boom in solar installations over the next 5 to 10 years, and we are already seeing the beginnings of that pipeline strength. We have seen discussions move from individual product awards to portfolio awards, from 12-month discussions of project pipelines to multi-year, multi-gigawatt pipeline discussions. To be clear, the overall demand landscape is incredibly strong. However, while the size of the benefits is undoubtedly a good thing, it does create an understandable incentive for our customers to wait for clarity before establishing their supply chains in a manner that would maximize the IRA incentives. This has affected our 2023 in two specific ways. First, we have seen a slowdown in the conversion of pipeline orders, which is the driving factor behind the reduction in the order book of approximately $300 million from the prior quarter. As a reminder, we do not include an order in our order book until the specific project is awarded to Array and a start date is identified. Second, we have seen some projects get pushed out to the right as customers are giving themselves more time to evaluate the IRA provisions. As a specific example, one of our largest projects slated for 2023 has been delayed by over a quarter so that the financier and developer could better evaluate how to maximize the return with all of the various IRA provisions.This project will get built and will use an Array tracker, we will now report less revenue in 2023 than previously forecasted. Expectedly, these two dynamics limit the upside potential in our previously communicated revenue range, as that would have required an improvement in the project timing cadence here in the United States. It's important to note, as we look outside of the U.S., we are pleased with the progress of our business. Our international markets are progressing as expected, we remain excited about both the near and longer-term growth potential. Despite these near-term volume headwinds, we will remain disciplined in our product technology and pricing strategies. We will continue to sell our value on projects that are a good fit for our product and service offerings and align well with our desired contracting terms. We won't chase projects that don't meet our profitability criteria just for revenue's sake. We believe this is the prudent approach, because we don't want to be reactive to short-term disruptions when our current path has us incredibly well positioned for how we believe the market will develop. Once there is IRA clarity, we will see the top-of-the-funnel projects accelerate through the order process and project delivery timing will return to a more normalized cadence. This will lead to increased orders. It will be easier to predict project timing. As we discussed last quarter, this will also mean an expansion of the geographical sites and weather conditions that trackers will be asked to account for. This is why our full launch of the OmniTrack and the STI H250 trackers to complement the DuraTrack, coupled with our expanding SmarTrack software offerings, will be such key growth enablers for us. Finally, we expect all of this to be met with increased profitability as we finally gain an understanding of the value, timing, and P&L location of the various IRA benefits. While we obviously are disappointed in the amount of time it is taking to get clarity, we will continue to execute on the things we can control to ensure we remain incredibly well positioned for the next phase of solar adoption, which is a theme that I will dive a little deeper on as we move to slide 5. As I mentioned before, the performance this quarter was not by accident. Array has undergone a long path of improving all aspects of the way it does business. The numerous incremental improvements the company has made add up and allow us to not only minimize risk, but also to capitalize on opportunities as they arise. I wanted to point out some of the key areas where we have made these incremental improvements and also, now that I'm just past my one-year anniversary, provide an update on what some of our new focus areas will be as we look forward. This quarter marks our sixth consecutive quarter of gross margin expansion. This continued expansion was anchored by the change to our contracting framework, where we minimized the risk of fluctuating commodity prices. Since the initial rollout of this process, we have continued to improve upon it. We have added more strategic suppliers, increased our visibility to longer-term cost inputs, and have created opportunities to find additional cost productivity in places like logistics and indirect spending. We will continue to find ways to improve this process, but we believe, as constructed now, it offers us a competitive advantage. This quarter, we also saw the margin of STI improve by over 1,900 basis points from the same quarter last year. If you remember, last year at this time, we outlined the issues that we needed to address to return the margins to historical norms in that business. They included improving their purchasing and logistics processes, simplifying their product portfolio, and rationalizing their offerings related to construction services. A year later, I'm happy to report that we have made significant improvements in each of these areas. The purchasing and logistics processes at STI have been aligned with legacy Array and now allow for better predictability, reduced working capital needs, and cost improvements. As previously noted, we have also significantly reduced the amount of construction work that we do in this business. We now are only performing this activity where we have proven experience and a clear ability to do so, and where it is strategically critical for our customers. While we were met with some unexpected challenges early in our integration, in mid-year 2022, we brought on board additional resources and experience in acquisition integration, and now I couldn't be more pleased with where we are today. We have also driven functional excellence through people, process, and tools. Every functional area has their proof points, but a key example is the 400 basis point improvement we have seen in our past due percentage year-over-year that was driven by improved demand and logistics planning, as well as better operational execution within our own manufacturing facilities. This reduction in past due is important, because it affords us the opportunity to accelerate shipments at the end of the quarter to meet customer pulling requests. We have also focused intently on delivering product offerings that meet our customer needs. I spoke to this in more detail last quarter, but it's worth re-emphasizing that the introduction of the OmniTrack and the STI H250 in the U.S., combined with an expanded SmarTrack offering, greatly expands the solutions we can offer our customers.As I mentioned when I first came to Array, it was critical for us to focus on our working capital efficiency to return the company to a position where it is consistently producing free cash flow. In the last 12 months, we have driven numerous initiatives that have had meaningful impact. First, we have introduced an inventory optimizer tool, which uses data and analytics to ensure that we have the right amount of inventory on hand, which has greatly minimized the need to carry unnecessary safety stock. The just in case high levels of safety stock were a key reason for our high cash conversion cycle during much of 2021 and early 2022. We have partnered with our suppliers to introduce more standardized contractual terms. These terms not only include flow downs of key ESG requirements, but also offer more consistent payment term provisions, which provide for better predictability of our cash outflows. Lastly, we have made some simple but impactful changes to our AR processes. These include simplifying contractual billing terms to eliminate confusion with our customers over billing milestones. We have also done a better job of integrating our collection processes with our other customer-facing organizations, eliminating the collection silos that has led to improved customer engagement and collection timing. All told, the focus we have placed on these areas has led to a 38 day improvement in our cash conversion cycle and approximately $300 million of immediate liquidity between our cash on hand and revolver availability. With all the work we have done, we certainly know that the job is far from finished. As we move into the next phase of our growth, I have listed some of the new focus areas that we'll be driving in the quarters to come. First, we have invested in digital transformation and process improvements. We recognize that this has led to a temporary increase in the amount of SG&A that we are spending, but we very much view these as investments to drive efficiencies and improve scalability in the future. As we move forward, we will focus on executing on this operational leverage and reducing our spending as a% of revenue. As our profitability and cash flow have improved greatly, we need to evaluate and update the market on our capital allocation strategy. We will provide a more detailed plan in the quarters to come, but for the time being, we will focus on improving our financial metrics and identifying opportunities for strategically paying down our debt. We are intensely focused on ensuring a flawless rollout of our new product offerings. In the last year, we have created a robust product management organization, and under their guidance, we will ensure that once we fully launch into the market, we are prepared to deliver at scale. Finally, we have all hands on deck to ensure we strengthen our internal controls environment. We've already made key changes in third-party partners and have added significant resources and tools throughout the organization to drive improvements. This is very much a company-wide effort, and we are committed to driving excellence in this area. With that, I will turn the call over to Nipul for a more detailed discussion of our financial results and an update to our 2023 guidance. Thanks, Kevin. Please turn to slide 7. Revenues for the first quarter grew 25% to $376.8 million compared to $300.6 million for the prior year period, driven by both an increase in the total number of megawatts shipped by 10% from 3 gigawatts to 3.3 gigawatts, and an increase in ASP of 14% from $0.099 per watt to $0.114 per watt, resulting from improved passthrough pricing to our customers. The $377 million in revenue reflects $305 million from the legacy Array segment and $72 million from the STI segment. Gross profit increased to $101.2 million from $26.6 million in the prior year period due to a combination of higher volume and improved gross margin. Gross margin increased to 26.9% from 8.8%. Gross margin for the legacy Array business was 27.4%, and the STI business had gross margin of 24.9% in the quarter. The margin of 26.9% exceeded our expectations as we benefited from the favorable project mix and some one-time benefits from lower than expected logistics costs. On the project mix side, we have discussed previously that we manage a portfolio of projects. Projects can range in margin depending on a number of characteristics, and we are constantly balancing projects on the upper and lower end of this spectrum. In the first quarter, we happened to deliver on a number of projects that were on the higher end of our portfolio from a margin perspective. As you would imagine with any portfolio, we do not necessarily anticipate this favorable mix to continue throughout the year, as we will see this mix revert back to the mean. We had a gross margin lift from one-time logistics benefits as ocean and domestic transport rates dropped faster than expected. We do expect this dynamic to normalize in future quarters as we have reduced our cost assumption in our customer quotes to match the new rate environment. Operating expenses decreased to $53.7 million from $64.9 million during the same period in the prior year. The decrease is primarily due to lower STI acquisition-related amortization expense in addition to STI integration costs in the first quarter of 2022 that do not repeat in the first quarter of 2023. Net income attributable to common shareholders was $13.6 million, compared to a net loss of $37.5 million during the same period in the prior year, and basic and diluted income per share was $0.09 compared to basic and diluted loss per share of $0.25 during the same period in the prior year. Adjusted EBITDA increased to $67 million, compared to approximately $700,000 for the prior year period. Adjusted net income increased to $37.3 million compared to adjusted net income of approximately $500,000 during the same period in the prior year, and adjusted basic and diluted net income per share was $0.25 compared to adjusted diluted net income per share of less than $0.01 during the same period in the prior year. Our free cash flow for the period was $41.9 million versus a use of cash of $52.5 million for the same period in the prior year. The increase was driven by both improved profitability and the improvement in our cash conversion cycle of 38 days that Kevin previously mentioned. I'd like to go to slide 8, where I will discuss our updated outlook for 2023. For the full year of 2023, we now expect revenue to be in the range of $1.8 billion-$1.9 billion, a reduction of $50 million from the top end of our original guidance. Kevin mentioned this is merely a reflection of the ongoing delays in the IRA guidance, which have caused projects to push out of 2023 and into 2024, and a temporary slowdown in orders. Despite the reduction to the top end of our revenue guidance, given the first quarter tailwind and the strength of our margins in our order book, we are still holding our original adjusted EBITDA and adjusted EPS guidance. The remainder of the planning assumptions we previously provided remain intact. Although with the reduction in our revenue expectations, we will obviously look to moderate our SG&A spend on the lower end of the range that was previously provided. Finally, looking forward to the second quarter, we expect a revenue increase between 15%-20% as we hit a seasonally higher delivery quarter. We do expect consolidated gross margins to average in the low twenties for the year as we normalize our project mix and do not have the benefit of the one-time logistics increases. Now I'll turn it back over to Kevin for some closing remarks. Thank you, Nipul. While the delays in the IRA guidance have obviously caused some short-term disruption, we are encouraged by the engagement we have seen from legislators and administrative officials as they work to find the right language. Taken as a whole, we will take nine and a half years of a well-written set of regulations as opposed to 10 years poorly written. We are not losing sight of the bigger picture and continuing to position ourselves in the best possible way to take advantage of the growth to come. We look forward to updating everyone as we all learn more in the coming months. With that, operator, please open the line for questions. Thank you. Ladies and gentlemen, at this time, we will be conducting a question and answer session. If you'd like to ask a question, you may press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. In the interest of time, please limit yourself to one question and one follow-up. Thank you. Our first question comes from the line of Brian Lee with Goldman Sachs. Please proceed with your question. Hey, guys. Good afternoon. Thanks for taking the questions. you know, maybe just starting with the, you know, the project delays. I appreciate all the additional clarity there. one quick question on that. It sounded like it was predominantly driven by one project. Is that fair, or was it multiple projects? Then maybe, you know, just more of a forward-looking question, the funnel. A lot of focus around that obviously. Is there a way to maybe quantify, Kevin, Nipul, the bookings opportunity that's, you know, being held up waiting for IRA clarity? I feel like we ask this every quarter, but is there enough lead time, maybe level set us as to if you see bookings, you know, in May and June and July, sort of what's the timeframe you might be able to actually see an impact in 2023 if you start to see that funnel move forward, as it's being kind of, you know, held up or, you know, pent up demand at the moment? Yeah. Hey, Brian, it's Nipul. You know, it primarily was the one large project that shifted that reduced the volume. As far as we look out, you know, we continue to have conversations with customers on pipelines and available gigawatts. It's just a matter of clarity. As, as Kevin said in his prepared remarks, you know, it's really beneficial as we get close what we believe to be close on the guidance from Treasury that some of these customers hold off on actually, you know, penciling the order. You know, lots of conversations happening. We feel good about the activity that's happening. It's just, you know, just we're pending a few things to get over get over the line here before these things come through the funnel. I mean, certainly as we're with our customers, they're talking about obviously increasing volumes of business that are quite substantial. We're just, again, in that holding pattern to get them to translate into orders received by us. All right, fair enough. Then I guess, again, on the IRA benefits, you mentioned, Kevin, during your prepared remarks, you're expecting increased profitability, you know, going forward as you, as you get some of these credits, that are embedded in the legislation. I know it's still early, but any sort of range of expectations around how much uplift you could see based on, you know, your current understanding of the IRA credits and also, you know, conversations you're having with your suppliers, and then maybe also an update on how you think specifically your clamp product will be treated in the context of those credits? Thanks, guys. I think it's still premature for us to comment publicly, right, to be honest. We've said that we'll continue to hold back on commenting and quantifying until we have that level of clarity, and I think we're still in that mode, honestly, to just wait until we have that level of clarity. There's still the main buckets that we're still focused on is obviously the definition of made in USA and what that translates to in terms of additional pricing power or ability to increase our bill of material content. We've talked about the steel and the portion that that is to steel, and I would say historically, we've been pretty open on the call and say we expect to get at least a third of that. I would only say in more recent conversations, I think it'll get better than that. I think lastly, relative to the clamp, you know, we're certainly focused on working with the legislators to ensure that the definitions are correct and inclusive of all those fastening systems that we would want. We're hopeful of that. Again, until that clarity is done and inked and available, we're just not gonna be able to quantify that for you just yet. Look, we all know it's substantial, it's healthy. We're working on it. We're focusing on everything we need to do operationally to maximize, but we just need that clarity and definitions first. Our next question comes from the line of Mark Strouse with JP Morgan. Please proceed with your question. Great. Good afternoon. Thanks for taking our questions. Maybe I'll take the other side of Brian's question there. You know, if we go, you know, a few more quarters here with no IRA guidance, can you just talk about the ability to hit the low end of the revenue range this year? I'm just trying to figure out how de-risked that might be. I think we feel pretty good about that because we used the similar process we've done in the past, where we've gone order by order, communicated with our customers, understood potential for delay, understood modules, all of the above. I think we feel fairly good, as good as we can sitting here today, that that low end of the range is an accurate low end of the range. Okay. Thanks. You spent some time talking about the operational improvements and the impact on gross margins. I understand what you're saying about the logistics costs being kind of more of a timing issue, a one-time issue, and that you're reiterating this low twenties, kind of somewhat vague guidance. Can we read your commentary though about the operational improvements to be that you're seeing kind of slight improvements in what you were talking about a couple of months ago on the last call? Yes. Absolutely. Perfect. Okay. Thank you. Our next question comes from the line of Julien Dumoulin-Smith with Bank of America. Please proceed with your question. Good afternoon, team. Let me try and frame this a little bit differently and ask more about the timeline for orders to move forward. How much of a knock-on effect if we get domestic contents in a few months, will we get in terms of, A, it true up, or B, do we actually get more of these projects kicked out to 2024? I.E., said differently, how much work will need to be ready to get going pending that clarity at that point? I just wanna understand how much of a needle mover there would be still at this point on 2023 and/or 2024 to the extent to which we get clarity, or is it really firmly out? Yeah, I... You know, look, Julien, I guess the only point of reference of fact that I have is the conversations I'm having with my top customers, my sales team. I was with one of our largest customers just yesterday, in fact, and their order books are bigger than they've ever been. What they're working, what they're designing, what they're engineering to right now are bigger than they've ever been. Their conversion of that pipeline into actual orders placed upon us is what's delayed, right? Because you have both the financiers, developers, all looking at how do you put a package together to maximize every bit of that return under the IRA. I think it's our belief that once there's clarity, that conversion is gonna move fairly quickly. I mean, it's not gonna take... I don't think it's gonna take months and months to convert. I think it's gonna convert very quickly, i.e., you know, quarter, that those things will start getting cut loose once there's clarity. I think I feel pretty good about it. Yeah. Go ahead. Related then, I mean, thinking about this being effectively a delay and transposing into 2024, I mean, how much could we be looking at in terms of, A, record order books, and B, some of that true up from 2023 to 2024 now, I mean, how are you thinking about that dynamic here? I mean, we're thinking that as it stands now, we're hopeful of getting that level of clarity within the quarter, second quarter. Maybe it spills over a little bit into the third quarter. Even then, that allows us to convert it early in 2024, given our current lead times and cycles, right? Look, I'm hopeful we don't have to wait till the end of Q4. We think it's gonna come a little bit sooner. We think we're gonna be able to capitalize on it. Our supply chain's ready for the volume. We're ready for the volume. Hopefully it converts and can show up in revenues fairly quickly. Right. Kevin, it sounds like you're assuming kind of end of 2 Q, 3 Q resolution as part of your baseline for the guidance to summarize. That's correct. Yep. That's right. Excellent, guys. Thank you. Perfect. Our next question comes from the line of Christine Cho with Barclays. Please proceed with your question. Hi. Thank you for taking my question. Maybe if I could just start with the IRA. For customers who are looking to hit the 40% threshold for domestic content, I'm sure they'll come to you and want as much of the product domestically sourced as possible. I generally think the expectation at this time is that customers get their domestic adder, you get your 45X credit, and there isn't really any sharing. Each side, you know, has their own credit. Who knows how Treasury will come out, but in the event that the bar is set high for modules, how do we think about what you would do if the customer isn't requiring a tracker that is requiring steel from the U.S. because they don't think that they can get the 40% anyway? Does it generally make sense for you to still domestically source as much as possible and get the 45X credit? If so, should we think that the customer is gonna wanna share in that credit? Yeah. I think what we're seeing, Christine, is where customers say they have a certain volume of supply of domestic panels, right? We all understand who that is, they're sold out for many years to come here, right? Then they have an ability to get certain elements. So if they pay, you know, the prevailing wage with an apprenticeship program, then the labor contracted on the site, the engineering services contracted on the site, which means that they could easily get to that 15%-20% through those buckets with a tracker, maybe another 7-9 points. Then it allows them to, for lack of a better word, share their domestic panels between multiple sites. What we're talking to customers about is that they won't use a First Solar panel 100% exclusively on a site. They'll use the amount they need to hit that 40% threshold, then spread those to multiple sites to get to 40%. That's why the domestic tracker becomes so important. It's not as binary as, "Look, if I can't get a domestic panel, I can't hit it." There will be an ability to hit it by spreading out your domestic panel allotment between multiple sites. Okay. Mixing and matching, essentially. Right. Again, that's where the Array has a great advantage in the flexibility of our system. Okay. Then just on your STI, your backlog went from 500 to 300 when only $72 million was shipped. I think it would imply that your bookings was negative for the quarter. Was there a project that was canceled here? No, that's just, Hey Christine, it's Nipul Patel. That's just a rounding issue 'cause we give the number in hundreds of millions, right? It essentially was flat for STI and mainly due to timing. We still feel good about the overall STI forecast. As you see, we have not updated that. We didn't bring anything down from the STI revenue forecast. Timing of bookings just led to Q2 not being a large bookings quarter. Okay. Q1, sorry. Our next question comes from the line of Philip Shen with ROTH Capital. Please proceed with your question. Hey, guys. Thanks for taking my questions. Just wanted to talk through bookings a little bit more here. As it relates to the 2023 guide, I know you touched on this a little bit, but to what degree does that assume new bookings in order to hit the low end of the guidance? Do you need? How much do you need in order to get there? Or do you have all the orders in hand to hit that low end? Thanks. Phil, it would be very little, put it that way. Most of that, $1.8 guide is in hand. A disproportionate amount of it is in hand at this point. Great. Can you talk through your multi-year framework deals? Are those discussions happening actively? Are you close to getting some of those done or more of those done? Do you think... Once we get the guidance from Treasury, can you talk about what kind of acceleration of bookings we could see? You know, can you quantify in any way relative to either current levels or even prior levels of your historical $400 million-$500 million a quarter? Could we see a multiple on top of that? Thanks. As far as that first part of the question, we're, you know, we're in discussions with several customers on multi-year and, you know, multi-gigawatt pipelines, and those continue to, as Kevin mentioned, in the prepared remarks, those are strong conversations, you know, top of the funnel type of discussions. As soon as that guidance comes out, we think those will also move and accelerate. As far as bookings, you know, it's hard to say right now what that pace will be once we get clarity from Treasury. However, we do, you know, do feel that it will accelerate when we do get clarity on the domestic content. It's just hard right now to say how much that would be. You know, guys, what you have to remember is that our customers are trying to figure out how much they have to give Array under different definitions of domestic content. That's one of the big challenges, right? Under one extreme definition, we have to get a disproportionate amount of their business. On the other than we're fairly equal with our peers, right? We're no worse off, but in one, we're dramatically better. Those customers have to understand what that looks like. Again, there will be some... If the domestic content goes an extreme way, there's likely gonna be some additional cost to maximize from 76% up to over 90% domestic content. Whether or not they need that, how much they need to pay for that, we have to have those definitions before those orders get set in stone and launched, and that's part of what's driving this. It's not unexpected. This is where we said we'd be. We'd hope for clarity by now, but it's simply hasn't happened yet. Thanks, Kevin. Our next question comes from the line of Kashy Harrison with Piper Sandler. Please proceed with your question. Yeah, good afternoon, everybody, and thanks for taking the question. Kevin, Nipul, just wanna make sure we're all 100% on the same page. Is it just the domestic content that your customers are waiting for? Are there perhaps other definitions from Treasury may be around, you know, prevailing wages or apprenticeship hours or, you know, something else that your customers are waiting for? It's all of the above that adds up to that ability to get to the 40% domestic content, right? They're looking for clarity in every one of those buckets. Final clarity. For example, there had been some discussion earlier about whether or not there's a sliding scale under the prevailing wages over a couple of year period under the apprenticeship program, for example. You know, in year 1, if you demonstrate you're on the way to do it, year 2, you have. Those are the kind of definitions that they need to figure out so they stack up each of those elements to see how they get to the 40% and how important that tracker is going to be to get there. Got it. That's helpful. Thank you. As my follow-up, can you just speak to the broader demand trends you're seeing in Brazil, Spain for the STI business? Elections are behind us in Brazil. Spain is supposed to be quite strong this year. Just what are you seeing on the demand side? Maybe talk about market dynamics, market share, et cetera. Yeah, we feel really good about Brazil, and the demand we're seeing there is very strong. We feel good about our market share in Brazil, the backdrop, our ability to deliver. I think Brazil is gonna be a great success story for us this year. In Spain, we're still waiting for additional incentives to come through Europe. I mean, it's a good business. It's doing well, but the acceleration in Spain will nearly be as much as Brazil in the near term. It's really more about waiting for additional incentives throughout Europe. To be clear, the STI business- Thank you. The STI business in Spain is really focused outside Spain. We're focusing all throughout Eastern Europe, other regions where we know we've got a great play for that product line right now that are still very healthy. Thanks for that color there. If I could just sneak one more quick one in. Is there any way to quantify the magnitude of the one-time logistics benefit that you had this quarter? Yeah. Hey, Kashy, it's Nipul. That's about a couple of hundred basis points. That was an impact of the logistics and freight costs. Our next question comes from the line of Maheep Mandloi with Credit Suisse. Please proceed with your question. Hey, good evening. Thanks for taking the question. Just to clarify one of the previous comments, are you expecting a resolution or clarification from IRA end of Q2, early Q3, but that's not in the guidance, right? Does that seem right? Yeah. Yeah, Maheep, this is Nipul. Yes, what Kevin said is that's our current expectations end of Q2, sometime in Q3. You're correct, we have not updated the guidance for any impact of IRA. Gotcha. Once you get that clarification, how much more capacity do you have, to meet any, you know, incremental customer demands in Q4? We feel really good on an annual capacity and a quarterly capacity basis, Maheep. We've been building out our capacity for a good 18 months now and adding many more suppliers throughout the U.S., qualifying them, getting them up to speed. I think we feel really good about our domestic capacity to handle whatever volumes coming our way. Keep in mind that when that volume comes our way, they're not all going to rush for Q4 delivery, to be clear. These larger programs are getting larger and larger. The number of them are getting more and more, they'll be phased out throughout 2024. There may be some opportunistic programs that you get yet for delivery in Q4, but I think the vast majority of what we would expect to come in from IRA is gonna be a 2024 phenomenon. Got it. Thanks. Just maybe this one last one from me. You talked about customers pushing out projects because of IRA clarification. Are they ordering products or they do not need any domestic content? I'm sorry. We couldn't hear that. Maheep, can you repeat that again? Sorry. Yeah, no. Are the customers ordering products for which they don't need any clarification on domestic content, or are they going ahead with the rest of the projects and the modules and trackers and few other things? No, Maheep, to be clear, we've had customers say they're not worried about that 40%. They're just gonna continue to go and build. Some are doing that, and that's some of the orders that you do see us getting in and are executing on. Not everybody's waiting to maximize all elements under the IRA. Other customers and developers are saying, "We get it. We have a good enough return." As I said, one of the best quotes from one of the CEOs of a large customer, "We'll let the lawyers and accountants worry about going after those credits later. We're in build mode." Right? There's different behaviors, obviously, on different customers. Our next question comes from the line of Colin Rusch with Oppenheimer. Please proceed with your question. Thanks so much, guys. Can you just give us an update on the work that you've been able to do with any increments of the EPCs in terms of qualification, design-ins, particularly outside the U.S.? Can you repeat that again? Sorry, Colin. Yeah. Can you give us an update on qualification and design-ins with EPCs outside the U.S.? I'm just curious about the number of folks you're working with in Europe, how that's growing and trending, and in Australia. I think Australia is a unique animal under the VRET program, where we're certainly getting qualified as domestic content, leading to additional new volume for us there. I think the rest is. Look, you're hard-pressed to find an EPC around the world that we haven't done something with in our existing markets. It's not like we're needing to qualify ourselves with a lot of new EPCs. In the markets that we're currently participating in, we've done work before, and we have a steady, strong relationship with existing EPCs. Also, you know, with our strategy of just getting close with developers, they take us into various regions and markets that we form the relationship with the EPC. That continues as well as we expand into different regions. Okay. That's super helpful. Then just from a competitive standpoint, can you talk a little bit about how much price sensitivity there is right now with folks, and if there's any sort of meaningful change in the price competition and how that's working for you as you go through and bid on projects? Yeah. You know, as far as that, you know, we're seeing the normal competitive behaviors in the market. Obviously, our ASPs have held, you know, for the quarter. We feel good about that. Nothing unusual that we're seeing, Colin, in that regards. Colin, I'll tell you that most of the impact on an ASP on a sequential basis is just frankly related to the steel input costs that are changing, and we're mindful of that as we go throughout the year. We're still being predicted to decline here in Q3 and Q4. That's also part of why you'd bring your revenue down because you could expect that ASPs may decline slightly going into Q3 and Q4 for the same volume of business, right? We're mindful of that, but offsetting that aside, we haven't seen any demonstrated changing in pricing behavior of our top competitors. Perfect. Thanks so much, guys. Our next question comes from the line of Joseph Osha with Guggenheim. Please proceed with your question. Hey there. One thing we haven't talked about as much as we get into next year, a new thing to worry about, the tariff moratorium goes away in June. Panels have to be put in service by the end of next year to qualify. I've been talking to some folks who are talking about, you know, a real rush to kind of get all that done. I'm curious as to whether you're beginning to hear about what it's gonna be like managing that process and how it might impact your business as you get into the latter part of this year and the first part of 2024. We really haven't had any of our large customers come and talk to us about that being a big issue yet. We're reading the same things you are. We understand there may be that there is a potential for that to occur. We haven't had our customers rush to us and kind of, lack of a better word, lock down capacity in that near term. They're more focused on the IRA overall benefits than they are the tariffs under AD/CVD. Right. To clarify, it is true, right, that any panel that comes in under the tariff moratorium by June has got to be placed in service by the end of 2024. That's correct, yes? That's our understanding of it. Yes. As it stands today. Okay. Interesting. Your customers aren't talking about that, or they've got other stuff to worry about. Okay. Thank you. Thank you very much. Our next question comes from the line of Donovan Schafer with Northland Capital. Please proceed with your question. Hey, guys. Thanks for taking the questions. I wanna start off and just ask, you know, for the bookings being down quarter-over-quarter, when you report bookings, do you make an adjustment for changes to the cost that you're able to pass through to customers? I mean, with steel prices, logistics, all that stuff. You know, was there a reduced sort of ASP impact, you know, where sometimes you have the same megawatts, but now you say, "Well, when we do ship this, what we're gonna have to pass through that ends up as revenue is gonna be lower at this point." Is that a factor? No, because again, if you remember our contracting process, we're locking that in at that point in time, right? Okay. None of it sort of stays floating, like locking certain portions in and then a certain portion stays floating until, like, the shipment date. It doesn't work like that. No, we're doing it at the full price of the program. Mm-hmm. Okay, great. In terms of the one-off impact on gross margins, you may have said this and perhaps I just missed it, but was that primarily on the legacy Array side, or was that also a factor with the STI gross margins? It was primarily on the legacy Array side. Majority of that was on that. As mentioned in my prepared remarks, it was the freight and logistics cost, 200 basis points, and it was also project mix. Our next question comes from the line of Tristan Richardson with Scotiabank. Please proceed with your question. Hey, appreciate it guys. Just maybe on following on the STI question. The gross margin improvement there sounds like nothing necessarily one time there, but did that benefit necessarily from mix as well, or should we really think about the margins in Q1 as representative of the process improvements that you guys highlighted in your prepared comments? Yeah, that was primarily due to the mix of the product in locations on where that was sold, Tristan. Okay. Appreciate it. To be clear, though, that the project mix again, if you remember, when we talked about some of the lower margin U.S. projects that had us have some difficulties with their margin throughout last year, we didn't do a lot of that work, that closeout work in Q1. We benefited from a lack of that in Q1. We will have a portion of that in Q2 and Q3 that finishes. I think we're back fully to our historical margins in the STI business. We feel pretty good about what we've been able to do. Again, a lot of it's been about leveraging the supply chain provided by the Array team into STI, a lot of product rationalization, a lot of engineering work. There's just been a tremendous amount of work done on that business through the integration, and we feel pretty good about where we're headed with it. Makes sense, Kevin. Maybe just to your earlier comment on SG&A, sort of a temporary increase in dollars, but over time, operational leverage takes the% down. Just thinking about temporary, is that sort of a 2023 phenomenon or even just isolated? Yes ... to a couple of quarters? No, this is a 2023 phenomenon where we've agreed to invest literally millions of dollars in additional IT infrastructure that allow us to scale. If you think about it's in terms of having the ability to very quickly, rapidly design sites, at the scale up that we expect under the IRA, you can't just keep throwing bodies at the volume of business that's coming down, right? We had to invest in some of the IT infrastructure that would allow us to take that volume and scale very effectively. That's the investment you see this year, getting ready for that scale next year. We feel pretty good about it coming down next year. Our next question comes from the line of Jordan Levy with Truist. Please proceed with your question. Hey, this is Mo on for Jordan. Thanks for taking my question. It's great to hear that Brazil and Spain are still holding up nicely. Just one quick one piggybacking on Brazil. I'm just wondering, in terms of the mix, the utility scale versus distributed generation products, what have you seen so far, the mix change in Brazil market, and how are you positioned competitively in Brazil? Thanks. Yeah. I would say a lot of what we're seeing in the first six months of the year here is really utility scale. That really goes on through Q3. I think we're starting to see a lot of inbound activity on the distributed generation as well. You know, we're hopeful that that'll come in, and that's quicker turn and has an ability as it comes in to help us out here in Q3, Q4. Okay, great. Thanks. Our next question comes from the line of Alex Kania with Wolfe Research. Please proceed with your question. Great. Thanks. Good afternoon. I'm curious about how you're seeing the evolution of kind of product mix from the discussions you're having. Has there just been any trend towards, you know, if there's price sensitivity on for H250, or is there a lot of adoption and embracement of OmniTrack? I'm just kinda curious about how you're looking at that, you know, over the next, you know, 12 to 18 months. Yeah. I can tell you that both are really exciting for us. We've had a tremendous amount of inbound interest in OmniTrack. You know, if I were to guess as we go forward, it'll be a real large piece of the portfolio, meaning it's very, very helpful and our customers are very appreciative of it. I think since February alone, we've got over 3 gigawatts of OmniTrack projects in various stages of the quotation process. We feel really good about that. We began really launching the OmniTrack into what we call our alpha sites here in Q3. We just begin scaling them up in Q4 and into Q1 in terms of the size and complexity of the sites. We're just taking a very measured approach to launching that product. We feel really good about the traction it's getting and the demonstrated savings to our end customers. That feels really good. Again, probably the biggest part of that slow scale-up is really about some of the newer component pieces that it's taken some time to get the supply chain up and ready to do that at scale, right? We feel good about that. As it relates to the STIH-. Go ahead. Sorry. Oh, no. Go, go ahead. Sorry. Yeah. And as it relates to the STI H250 in the U.S., I'll remind you that, look, today we still can sell the Spanish version in the U.S., although we prefer not to yet, just to chase an order for price point. What we've really done is had our engineering teams from Array work very closely with the Spanish team, and we'll have a much better version of that product to launch in the U.S. There's just a great story of the integration between STI and Array and product management, engineering, field engineering, global sourcing, working at changing that product. You know, the first part was to ensure we could be at a price point that's very competitive with others in the market at that price point, and that we could win annually. We feel really good about that. We've simplified the product, made it easier to install. Simplified the driveline, reduced the SKUs in terms of the torque tube. We've resourced the torque tube in a size that's more available readily from U.S. steel suppliers to ensure we can get U.S. content up. We've done a tremendous amount of work on that product. As we launch it in quote in early Q3, we'll expect to begin shipping it in Q4. I think we're gonna have a really compelling product line to compete at a different price point. Great. Thanks. I guess just a question just on cash flows. I think Nipul, you mentioned that there was a, you know, thinking about capital allocation, maybe, you know, debt reduction, you know, obviously decent momentum on the cash flow front. I'm kinda curious about when you feel like you'd be in a position to give a little bit more detail on that capital allocation plan? Yeah. It'll be coming in the coming quarters as we, you know, continue to print the good free cash flow numbers. As we, you know, get through our high delivery quarters, upcoming year in Q2 and Q3, I think we'll be in a good position kinda near the end of the year to really lay that out. We have time for one last question. Our last question comes from the line of Derek Soderberg with Cantor Fitzgerald. Please proceed with your question. Yeah. Hey, guys, just one for me. I'm curious if you're seeing anything changing from a competitive standpoint. Sounds like demand is there, I would imagine. You know, others are ramping up capacity to get ready to scale. You know, are you seeing a growing number of competitors bidding on contracts, more competitive price bidding? You know, any change to what you've seen in the past? Any change this year on the competitive landscape? If you could provide some color on that'd be great. Look, we really haven't seen a substantial amount of changes from our, from our top competitors this year yet. There's been some dialogue about, you know, competitors getting more strict on the terms of business they'll accept. Obviously, when you're publicly traded, you'll have to do that, so we expect that to occur. Other than that's been the commentary from when I'm talking to our key customers. Got it. Thanks, guys. That concludes our question and answer session. This does conclude our teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.