Array Technologies, Inc. (ARRY): SWOT Analysis [Nov-2025 Updated]

Array Technologies, Inc. (ARRY) is at a critical inflection point, showing a powerful operational rebound with a record order book nearing $1.9 billion as of Q3 2025, a clear sign the management turnaround is working. But for investors, the question isn't just about the 70% year-over-year revenue growth; it's about the tightrope walk between that momentum and the substantial financial burden of high long-term debt, plus the constant threat of USITC tariff decisions. You need to understand how the full-year 2025 revenue guidance of $1.25 billion to $1.28 billion maps against the real risks in their balance sheet and the volatility of their project pipeline. Let's break down the Strengths, Weaknesses, Opportunities, and Threats (SWOT) to give you a clear action plan.

Array Technologies, Inc. (ARRY) - SWOT Analysis: Strengths

You're looking for a clear picture of Array Technologies' competitive edge, and the numbers from the third quarter of fiscal year 2025 paint a very strong one. The company isn't just surviving; it's accelerating its growth and fundamentally improving its business quality. The core strength is a massive, high-quality order book, plus a successful strategy of integrating new products and a key acquisition that diversifies their offering.

Record Order Book of Nearly $1.9 Billion as of Q3 2025

Array Technologies closed Q3 2025 with an executed contracts and awarded orders balance-what we call the order book-of nearly $1.9 billion. This figure is a huge vote of confidence from the market, and it's a strong indicator of predictable, future revenue. To be defintely clear, this $1.9 billion figure excludes the backlog from the recently acquired APA Solar, so the true forward visibility is even higher. This backlog is also high-quality, with over 95% of it tied to the domestic U.S. market, which benefits from the Inflation Reduction Act (IRA) incentives.

Strong Revenue Growth, Up 70% Year-over-Year in Q3 2025

The company translated that strong demand into exceptional financial performance. Array Technologies reported Q3 2025 revenue of $393.5 million, which represents a massive 70% increase year-over-year. This isn't just a volume story, either; the adjusted gross margin for the quarter was a healthy 28.1%, a 30 basis point improvement over the prior quarter, showing better pricing power and cost management. Year-to-date revenue for 2025 has already surpassed $1 billion, exceeding the company's full-year 2024 revenue of $915.8 million.

New Product Innovation (OmniTrack, SkyLink) Constitutes 40% of the Backlog

The success isn't built on old tech; it's driven by new, innovative offerings. Products launched recently, specifically the OmniTrack, SkyLink, and Hail XP solutions, now account for nearly 40% of the total order book. This high percentage confirms that the market is rapidly adopting their next-generation solar trackers, which often feature better domestic content qualification and advanced technology like wireless communication. This is a great sign that their R&D spend is paying off and creating a defensible competitive moat.

New product momentum highlights:

• OmniTrack, SkyLink, and Hail XP make up 40% of the backlog.
• SkyLink is a solar-powered wireless tracker system, simplifying installation.
• OmniTrack offers a path to 100% domestic content, qualifying for IRA credits.

Strategic Acquisition of APA Solar Expands Offering to Fixed-Tilt and Foundation Solutions

The acquisition of APA Solar, which closed in August 2025, is a game-changer for portfolio diversification. APA Solar is a premier provider of engineered foundation systems and fixed-tilt racking systems, which Array did not previously offer. This strategic move allows Array Technologies to offer an integrated tracker-plus-foundation solution, which is crucial for projects on challenging soil conditions. APA contributed $16.9 million to Q3 2025 revenue, and the company expects it to add approximately $50 million to the full-year 2025 revenue. The deal immediately expanded their total addressable market and creates significant opportunities for commercial synergies by cross-selling the new Foundation Solutions Business to Array's large utility-scale customer base.

Array Technologies, Inc. (ARRY) - SWOT Analysis: Weaknesses

Significant customer concentration risk remains.

You need to be defintely aware of Array Technologies, Inc.'s customer concentration, which is a classic weakness in the utility-scale solar industry. It's a double-edged sword: landing a huge contract is great, but losing one is devastating. Right now, the company has a material reliance on a handful of buyers, with just two clients accounting for more than a quarter of total sales.

This kind of revenue concentration means that a change in a single customer's capital expenditure plans-say, a project cancellation or a shift to a competitor like Nextracker-can immediately and significantly impact Array Technologies' top line. It also gives those key customers substantial negotiating leverage on pricing and terms. Diversifying the customer base, especially internationally, is a critical action item for management to mitigate this risk.

High long-term debt imposes a substantial financial burden.

The company carries a considerable debt load, which creates a drag on its financial flexibility. As of June 2025, Array Technologies' total debt stood at approximately $0.69 billion USD. More specifically, the long-term debt, net of the current portion, was $646.6 million at the end of the 2024 fiscal year.

Here's the quick math on the leverage: The net debt leverage ratio was 2.1x its trailing 12 months adjusted EBITDA as of the third quarter of 2025. That's manageable, but it's not low, and it means a significant portion of operating cash flow must be dedicated to servicing this debt rather than being reinvested into core R&D or further acquisitions. It's a structural constraint on growth, especially if interest rates remain elevated.

Adjusted gross margin is under pressure from tariff pass-through and APA integration.

Profitability is facing a squeeze from two sides: external policy and internal integration. Array Technologies is battling significant margin pressure, evidenced by the revised full-year 2025 adjusted gross margin guidance of 27% to 28%. This is down from earlier, higher expectations.

The pressure points are clear and concrete:

• Tariff Pass-Through: New tariffs, like the potential 25% costs on components from Mexico and India, are compounding the strain. Although Array is passing along about three-quarters of these costs to customers, the company absorbs the remainder, which eats into the margin.
• APA Integration: The integration of the APA Solar acquisition, while strategic, is causing near-term margin dilution.
• Inflationary Pressures: Broader inflation and delayed international projects are also cited as factors depressing the margin.

Analysts are already forecasting that the company's structural margins could settle closer to 27% through 2027, which is a tough reality to face in a competitive market.

Free cash flow for 2025 is expected lower, approximately $100 million, due to acquisition costs.

While the company is growing revenue, its ability to generate discretionary cash flow is temporarily impaired by strategic spending. For the full year 2025, Array Technologies' Free Cash Flow (FCF) is forecast at approximately $100 million. This is a noticeable step down from the $135.4 million in FCF the company generated in the 2024 fiscal year.

The primary culprit is the investment in inorganic growth. The APA acquisition and the Albuquerque facility expansion required significant capital outlay, with net cash used for investing activities totaling $170 million in the third quarter of 2025 alone.

Here is a comparison of the cash flow metrics:

The FCF drop tells you that even with a strong revenue increase, the cash generation efficiency is lower in the near term. This is cash that can't be used for debt reduction or share buybacks. The company is trading near-term cash flow for long-term strategic positioning, but it still makes the balance sheet look tighter right now.

Array Technologies, Inc. (ARRY) - SWOT Analysis: Opportunities

The opportunities for Array Technologies are centered on capitalizing on strong domestic policy tailwinds and strategically expanding the scope of its product offering to capture a larger share of the utility-scale solar market. The company is actively moving beyond being just a tracker supplier to becoming a more comprehensive solar project platform provider, which should defintely expand its total addressable market (TAM).

Full-year 2025 revenue guidance raised to $1.25 billion to $1.28 billion

Array Technologies' financial outlook for 2025 is robust, reflecting strong demand and successful execution. Management raised the full-year 2025 revenue guidance to a range of $1.25 billion to $1.28 billion, which is an increase of over $60 million at the midpoint compared to prior guidance. This optimism is grounded in a substantial order book that stood at approximately $1.9 billion as of November 2025, with over 95% of that business coming from the domestic U.S. market. That's a huge backlog, and it gives you clear visibility into near-term performance.

The company's strong Q3 2025 performance, with revenue reaching $393.5 million and adjusted diluted earnings per share (EPS) hitting $0.30, supports this raised outlook. This sequential improvement shows operational momentum is building, not slowing down.

Benefits from the Inflation Reduction Act (IRA) Section 45X manufacturing tax credits

The Inflation Reduction Act (IRA) is a significant financial tailwind, particularly through the Section 45X Advanced Manufacturing Production Credit. Array Technologies is well-positioned because it produces key components like torque tubes and structural fasteners domestically. This domestic manufacturing focus directly translates into lower costs and higher margins for the company.

Here's the quick math: the 45X credits drove Array Technologies' gross margin in Q3 2024 up to 35.4%, a substantial jump from 26% in the prior-year period. This competitive advantage is hard for rivals reliant on imported components to match. Plus, their ability to provide 100% domestic content trackers helps customers qualify for maximum IRA incentives, like the 10% domestic content bonus.

• Capture maximum IRA incentives via domestic content.
• Boost gross margin with Section 45X tax credits.
• Mitigate supply chain risk through U.S. manufacturing.

Expanding total addressable market (TAM) by transforming into a full solar project platform provider

The strategic acquisition of APA Solar, completed in August 2025 for an enterprise value of $179 million, is a game-changer for expanding the total addressable market (TAM). This move transforms Array Technologies from a solar tracker specialist into a more comprehensive solar project platform provider.

APA Solar brings engineered foundation systems and fixed-tilt racking solutions into the portfolio. This means Array Technologies can now offer a single, integrated solution that includes both the solar tracker and the foundation system, which is critical for projects on challenging terrain like hard, mixed, or frost heave soils. This integrated offering simplifies procurement and installation for customers, which is a powerful sales lever.

Favorable valuation (Forward P/E 8.88) compared to key competitors

From an investment perspective, Array Technologies presents a compelling valuation story, especially when compared to its primary competitor, Nextracker Inc. (NXT). The market is pricing Array Technologies' future earnings at a significant discount, which suggests a potential value opportunity as the company executes on its turnaround and growth strategy.

As of October 2025, Array Technologies' Forward Price-to-Earnings (P/E) ratio stood at approximately 8.88. This is a notably low multiple for a company with strong revenue growth and a massive domestic order book. To be fair, the solar sector can be volatile, but this valuation is a clear signal.

Here is a quick look at how Array Technologies stacks up against its main competitor on a forward-looking basis:

The Forward P/E of 8.88 is less than half that of Nextracker's 17.99, and the Price/Earnings to Growth (PEG) ratio of 0.63 suggests the stock is significantly undervalued relative to its expected earnings growth. A PEG ratio under 1.0 is often seen as a strong buy signal, indicating you are paying less for future growth. The market is clearly not yet fully pricing in the company's projected 2025 revenue of up to $1.28 billion.

Array Technologies, Inc. (ARRY) - SWOT Analysis: Threats

Honestly, the jump in the quality and size of their order book-that $1.9 billion figure-is the single most important metric right now. But still, you can't ignore the debt and the regulatory cloud. That's the tightrope they're walking.

What this estimate hides is the true cost of integrating APA Solar; while it adds revenue (about $50 million to the 2025 guidance), the integration costs and margin dilution are real near-term headwinds. You defintely need to track their Q4 gross margin closely to see if they can stabilize it above the Q3 adjusted margin of 28.1%.

So, the clear action is to look past the top-line growth and focus on balance sheet health. Finance: Model a stress test on the debt covenants against a 15% drop in 2026 Adjusted EBITDA by the end of the month.

Policy and regulatory risk from potential USITC tariff decisions and IRA changes

The regulatory landscape is a constant headwind, not a tailwind. The most immediate threat is the US International Trade Commission (USITC) ruling on solar imports from Southeast Asia (Cambodia, Malaysia, Thailand, and Vietnam). While Array Technologies is a US-based tracker company, a major disruption or cost increase in the solar module supply chain-which relies heavily on these countries-can slow down the entire utility-scale solar market, directly impacting Array's project volume.

Also, the Inflation Reduction Act (IRA) incentives, while a massive opportunity, carry risk. Analysts are flagging that the economic benefits from the IRA's manufacturing tax credits (45X) are not being fully retained by suppliers like Array. Customers are successfully negotiating to retain a portion of these tax credits, which could pressure Array's structural margins closer to 27%, below the company's guidance range of 27% to 28% for the full year 2025.

• USITC ruling increases costs for solar modules, slowing project deployment.
• IRA benefit sharing dilutes 45X tax credit impact on margins.
• Potential congressional action could roll back tax credits or change IRA terms.

Order book volatility due to customer project delays, descoping, or cancellations

A large order book of $1.9 billion (as of Q3 2025) provides revenue visibility, but it is not guaranteed revenue. The solar industry is capital-intensive, and projects can be descoped (reduced in size), delayed, or canceled entirely due to issues outside of Array's control, such as interconnection queue backlogs, permitting issues, or financing difficulties.

To be fair, Array has been actively cleaning up its backlog. In Q2 2025, for example, about $200 million of lower-margin, legacy fixed-price Volume Commitment Agreement (VCA) projects were either pushed out or canceled. This improves margin quality but highlights the underlying risk of project instability, especially for older, fixed-price contracts that are more vulnerable to inflation and interest rate changes.

Exposure to major input cost fluctuations, particularly steel and aluminum

Steel and aluminum are the core components of solar trackers, and their prices are highly volatile. The US government increased tariffs on steel and aluminum imports from 25% to a significant 50% ad valorem, effective June 4, 2025. While Array has a proactive supply chain strategy and has reduced its tariff exposure to less than 14% of its bill of materials by year-end 2025, this 50% tariff hike is a major cost shock to the industry.

The threat here is two-fold: direct cost pressure and the inability to fully pass through costs. Array's ability to minimize exposure relies on domestic sourcing and USMCA derivative rules, but any failure in these complex logistics or a sustained price spike in domestically sourced materials will immediately hit the gross margin, which is already under analyst scrutiny.

Interest rate hikes could exacerbate the high debt load vulnerability

Array Technologies carries a substantial debt load, which becomes more expensive to service and refinance as interest rates climb. The company's long-term debt stood at approximately $658.4 million as of Q3 2025. While their net debt leverage ratio of 2.1x trailing 12 months Adjusted EBITDA is manageable, it is still a vulnerability in a rising rate environment.

The threat is a potential breach of debt covenants (lender-imposed financial conditions) if Adjusted EBITDA were to decline due to the combined impact of tariff costs, project delays, or margin pressure from IRA sharing. A 15% drop in the 2025 Adjusted EBITDA guidance midpoint of $190 million would reduce it to $161.5 million, pushing the leverage ratio higher and closer to covenant limits, restricting future growth investments.