FTC Solar, Inc. (FTCI) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the FTC Solar Business Insights Call. [Operator Instructions] Please be advised today's conference may be recorded. [Operator Instructions] I'd now like to hand the conference over to Bill Michalek, Vice President, Investor Relations.

Thank you, and welcome, everyone, to FTC Solar's Business Insights Call. A replay of this call as well as the slide presentation will be available in the Investor Relations section of our website at ftcsolar.com. I'm joined today by FTC Solar's President and Chief Executive Officer, Sean Hunkler, and Patrick Cook, the company's Chief Financial Officer. Before we begin, let me remind everyone that today's discussion contains forward-looking statements based on our assumptions and beliefs in the current environment and speak only as of the current date. As such, these forward-looking statements include risks and uncertainties, and actual results and events could differ materially from our current expectations. Please refer to our SEC filings, including our 10-Q for more information on the specific risk factors. We assume no obligation to update such information, except as required by law. With that, I'll turn it over to Sean.

Thanks, Bill, and good morning, everyone. I appreciate all of you taking the time to join us today. The purpose of this call is to follow up on a commitment I made when I joined the company to provide an update around the 100-day mark of my tenure. I'll provide some information on the market, an update on our growth drivers as well as a financial update and outlook, and I'll leave plenty of time for Q&A. A few highlights I'll cover. The long-term market outlook remains strong despite continued near-term module uncertainty. I believe FTC Solar is uniquely positioned for growth in the U.S. and gaining traction internationally. While 2021 represented the perfect storm on cost headwinds, we're taking significant actions, controlling what we can control and are making significant improvements. We have a tracker solution that is differentiated in the market with that differentiation being increasingly recognized by customers, and we have new higher-margin products that we've launched. And we're on the cusp of profitability as we enter 2022, and what I believe to be significant growth and margin opportunity and improvements ahead. Starting first with the market. The solar industry has seen strong long-term growth and is expected to continue to grow substantially for the next 30 years, driven by all the factors you're well aware of, the cost competitiveness with fossil fuels, government policies and regulations supporting renewables, corporate procurement of renewable energy and increased capital available for green investments. Within solar, the tracker market is growing faster than fixed tilt driven by the increased energy output and lower LCOE that trackers afford. And tracker penetration still has a significant amount of opportunity, particularly internationally, where tracker penetration is up to the 30% range compared to 80% in the U.S. The chart on the left is showing the tracker market in the U.S. and internationally, showing a significant growth rate faster than the overall market as the market continues to transition. On the right side of the page, you see that the level of investment in renewables is very significant, expected to be in the $16 trillion range over the next decade according to the Department of Energy. In order to hit the DOE stated solar targets by 2035, solar would have to grow by 54% a year. So the money is there, the interest is there. And when you look at the amount of pipeline and development in the U.S. in 2021 based on private capital transactions, the figures hit 180 gigawatts based on third-party data, which is a staggering number compared to the average over the prior 3 years of less than 30. That is a massive uptick in development in the U.S. The market will be very strong even without additional support from the Build Back Better provisions. The bottom line is that there is no shortage of interest, money or demand behind the long-term growth of this market. On the regulatory front, on our earnings call in November, I noted that there was a little bit of chaos in the market as developers and suppliers work to navigate things like AD/CVD, WRO, polysilicon pricing, commodity pricing and logistics challenges. That these items were causing some [ TAB ] uncertainty and push out project time lines and that we hope to see some of the disruption settle as we enter the new year. Since that call, AD/CVD has been resolved with the Department of Commerce deciding not to investigate. That removed one large overhang from the market as the fear of potential retroactive tariffs was causing concern and difficulties in module sourcing and limiting module imports. That decision was followed by the restoration of the bifacial module tariff exemption that is also incrementally positive for the industry, although there are whispers that it could be withdrawn again. So we'll see what happens there. That leaves the last significant regulatory impediment being the WRO, which also has the effect of significantly limiting imports of modules as producers limit shipments and idle production as they work to provide sufficient documentation to have materials released and avoid further module detentions. Just to add a bit more color here, the amount of documentation required as evidence on a single bill of lading, we're told, can be in the thousands of pages, and it can take weeks of review after submission. Some of these module manufacturers have hundreds of people working on paperwork. Even when released, you have the backup at the ports. We also recognize it will take time to backfill the supply chain once things get sorted out. That said, we are starting to hear some incrementally positive anecdotes that progress is being made on the WRO front, but they'll likely be recovering from backlog issues for some time. Overall, we believe we'll start to see improvement in Q2, and we're hopeful for a full resolution this year. So with that backdrop of the market and regulatory environment, I'd like to turn now to an update on our growth drivers, starting first with customer penetration. If you've been following FTC for any amount of time, you've likely seen this chart, which shows our contracted and awarded orders entering each year as well as what we ended up reporting in that year. A few key takeaways from my perspective include that we had our first tracker sales in mid-2019. We tripled our revenue the following year, we more than doubled again in 2021 based on our guidance, and we are poised to significantly outgrow the market again in 2022. Also, 2022 is the first time we've entered a new year with backlog that extends into future years. On top of our above-market growth rates, that helps to derisk 2023 and 2024. Looking at the bottom of the page, you can see our penetration of the top 15 EPCs and developers going from 40% in 2020 to 47% and 60%, respectively, in 2021. The last column for 2022 shows the percentage of these groups with which we are in active discussions for potential future projects as we enter 2022. So we are adding more customers seeing a very high amount of repeat customers and engaging with more and more prospects and we still have a lot of room to run on U.S. customer penetration. On the international front, we have seen incredibly strong growth in our pipeline, in fact, more than tripling over the past year to more than 26 gigawatts. Similar to the U.S., it is a long cycle internationally between when you have first boots on the ground to initial orders, typically 12 to 18 months. We put salespeople in place in multiple regions in 2020, including Australia, Southeast Asia, Middle East, North Africa, EU, Latin America and South Africa. We said at the time of the IPO that we hope to have initial international orders by the end of 2021, and we did, in fact, see those initial orders come in on schedule. While we had a number of small projects in Australia, we recently had our first 2 larger projects there as well as our first 2 in Africa. We hope and expect to have a number of additional wins to share as we progress through 2022 including in more new countries. So we absolutely have the pipeline are starting to get traction on conversion and have a very long runway on potential growth internationally. Turning to cost management. 2021 represented the perfect storm in terms of cost, but we are making significant improvements that we expect will soon be very evident. So what led to the perfect storm? First is the increase in the share of large-format modules in the industry, which increases tracker steel content to support the significantly larger modules. Large-format modules are expected to be about 70% of the market in 2022, up from single digits in 2020. At the same time, steel prices were roughly doubled from late 2020, and we were doing a lot of business on the spot market, just coming up to scale. And logistics pricing was up about 6x in that same time frame, and even more if you go back a few months. Here, you can see the price of steel, which highlights the dramatic change in the market. So what are we doing about it? In addition to continuing to contract our steel at the time of customer contract, we've broadened and deepened our supply base, adding about 10 new vendors. And we've established a commodity center of excellence and brought in additional expertise into the company. We're striving to ensure we have incredibly strong relationships with suppliers like we do with customers that lead to better pricing. Other items in progress include our ongoing design-to-value or DTV efforts, implementing MSAs in certain instances for key items as well as should cost modeling capability that we're developing with the team. On Slide 14, we've indexed our 2Q '21 cost for a particular project and shown the amount of steel that is coming out of each quarter for a similar project. As you know, each of our tracker systems is custom design based on a particular site, but this is a good representation. The timing here represents when the components are available to order. So for example, a project that was ordered in the fourth quarter of last year would have 20% less steel than a system that was ordered 2 quarters earlier. And through the end of this chart, showing a 22% reduction, which is very significant. We now have 10 initiatives completed in 2021 with more than 20 more scheduled for completion in 2022. We aim to be industry-leading on steel content by 2024. We have a road map to get there and are making progress. It's a similar story in logistics. You can see the chart of logistics pricing during this period, and it's even more dramatic if you go back a few more months. On this front, we've introduced new modes of transportation, including break-bulk shipping on charter vessels, which started on a portion of our volume in Q4 and gives us lower pricing as well as certainty of pricing, and we have found ways to be even more efficient on future vessels. We've also broadened our vendor base, allowing us to better minimize our cost per route and we expect continued cost savings as we move through 2022. Items in progress include optimizing logistics execution, including packing of equipment as well as local supply where possible. Logistics has been the largest headwind to our margin performance over the past year as we have absorbed millions in incremental costs. We're now better positioned to manage and minimize that headwind. Let's turn now to our differentiated solution, which is now well recognized in the industry. On the left side of Slide 17, you see a summary of some of the constructability benefits of our tracker solutions. For example, we've talked about our man hours per megawatt installation time being about half of that of competing solutions. We actually expect to have new third-party analysis updated for 2022 available to share very shortly and we believe it will show another material improvement. Overall, the constructability advantage can lead to significant savings for our customers. That value is being increasingly recognized by our customers as they give us more business and as they give us credit for that savings in terms of pricing. On top of that, tracker constructability advantage, we are adding 2 higher-margin offerings, including our SunPath performance software and a new small systems or DG offering which has just launched. I'll touch on each briefly, starting with SunPath. As a reminder, we launched SunPath around the beginning of last year. It is a performance software add-on to the tracker that through terrain based backtracking and diffuse light capture can offer customers up to a 6% increase in energy yield. This results in essentially additional risk-free revenue for the customer and a higher-margin offering for us. It's patented. We have 2 more modules in testing right now, and it's custom tailored to the individual site rather than a one-size-fits-all solution. We're targeting a greater than 50% attach rate on the software over time. We received great feedback from our initial customers and have now signed 7 contracts, including 3 more since our earnings call in November. Overall, I'm excited about this offering. While the revenue contribution is expected to be small relative to our tracker business, it's a high-margin contributor. Turning to Page 19. I'm excited to tell you about a new offering that we've launched targeted at the profitable sub-20-megawatt segment of the market. This is a growing market with favorable pricing average PPA prices are 2x that of larger systems. As we have continued to grow and work more and more closely with our customers, they want us to support more and more of their fleet. Based on feedback we've received over several months, we've worked to develop an offering that will address the market needs and specific customer pain points with all the benefits of an FTC system. We have recently launched the offering. We have an EPC partner lined up, and we just won our first 2 projects within the last 2 weeks. We believe this business can achieve higher than our average target margin profile and can represent a meaningful portion of our overall portfolio by 2024. So now we've talked about the long-term market factors as well as how we're executing on those things that are under our control, including how we're addressing the commodity and logistics environment and poised to minimize that headwind. How we're taking significant costs out of our business and how we're progressing on our effort to expand our value per unit. Overlaying this, with the remaining uncertainty in the market around WRO and customers' ability to get modules, how does this shake out in our near-term financials. Overall, we believe we can grow significantly faster than the market, and we have a significant amount of runway to take cost out of our business to add higher-margin business. We are providing preliminary 2022 targets today, which include revenue of $415 million to $460 million which at the midpoint would represent 80% annual growth over our 2021 guidance, and we expect that will be much faster than the overall market. Along with this revenue, we are targeting 11% to 14% gross margin, operating expenses between $49 million and $54 million and adjusted EBITDA between negative $4 million and positive $11 million. The table on the right gives an indicative quarterly progression of what the year might look like. You can see a significant improvement in revenue in the second half, but we expect that growth is also impacted by WRO. In addition to the faster than market growth, other highlights include targeting gross margin breakeven in Q1, a significant ramp in margin throughout the year, achieving adjusted EBITDA breakeven by Q3 and transitioning into profitability. So that's the update for today. The long-term market outlook remains strong. I believe FTC Solar is uniquely positioned to continue to outpace the market in the U.S., and we'll continue to see increasing traction internationally. While 2021 was the perfect storm on cost, we're taking significant actions controlling what we can control and are making significant cost and margin improvements. We have a solution that is differentiated in the market and increasingly recognized by customers along with new higher-margin offerings launched and we're on the cusp of profitability with significant growth and margin improvements ahead. With that, I will turn the call over to the operator, and we are happy to take any questions you may have. Operator?

[Operator Instructions] Our first question comes from Julien Dumoulin-Smith with Bank of America.

Nicely laid out here this morning. Just coming back, I wanted to hear a little bit more on how you think about cost, right? I know you talked about this 20% number here. How do you think about achieving that or better? I know we talked a little bit a little bit better earlier. Can you elaborate a little bit more on the efforts underway and the cadence of that through the year as well?

Sure. Thanks for your question, Julien. So we have quite a few efforts focused very specifically on cost. For example, the DTV or design-to-value effort has been working diligently to get steel content out, and the team's made a lot of progress. And unfortunately, as we've discussed in the past, some of the headwinds have still been there. But as you can see in the charts, we're seeing some movement in cost, in terms of steel, in terms of logistics, but the team is really working to optimize our performance. So while in the beginning of my first 100 days, most of my time was spent with customers, now I'm spending a lot of time with our suppliers, because we've got the scale now to put agreements in place that are valued to us and the supplier, we're getting a lot more attention from the supplier community. In addition, we're expanding the supplier community to work with suppliers that some of the experts we brought into the company have worked with in the past. So we're seeing some good progress there. And in logistics, again, we've done some work with break-bulk shipping. We're working with additional suppliers and driving improvements that way. So I would describe it, Julien, as an absolutely multipronged approach. It is the highest priority in our company today to drive gross margin improvement. And so it has visibility throughout the company, and we have a regular review of all the details behind the program.

Got it. And just while we're on the subject, just steel, where do you stand for '22? I know we've talked about this a lot in the past.

Say again, Julien, I'm sorry.

Sorry. Just your metals procurement for '22 here at this point, just the strategy this year and how much sensitivity there is?

So we are focused on supply from numerous countries. So we have supply in Thailand, in India, in China. And of course, we're also focused a bit on the U.S. Turkey is another big supplier. And so we've basically are putting in place agreements with the critical suppliers to make sure that we get pricing that is justified by the volume of our material. And so we're -- in my view, we're in pretty good shape in terms of focusing on steel, a lot of the efforts that we put in place before and continue to put in place that our suppliers are starting to yield results.

Excellent. And if I can coming back to the sales focus here, it sounds and again, I'm just trying to read between the lines on what you're focused on in the remarks. It sounds like international is a renewed focus, if I hear you right. And then you also talked about the smaller end of the market as well, the sub-20. Can you talk about, for instance, as a percentage of your sales this year or next year, how much this would account for? How are you thinking about commitments if -- again, if we're ready on each of those end markets?

So in terms of international, you've heard us talk before and today as well about our boots on the ground strategy. So we've had folks on the ground, for example, in Australia for 12 to 18 months and now are seeing what used to be only small projects turning into large projects. We've announced projects now in Africa. And in particular, we're excited about some of the progress we're making as well with potential customers in the Middle East. And so we expect international to definitely grow as a portion of our overall business and to be a significant portion of our business out in the 2024 time frame. In terms of small systems, that's an area of increasing margin or margin opportunity, I should say. And we're absolutely ready to move forward with that business. We've had our first 2 projects now with that business. We also have an EPC partner, and we'll name that partner in the coming weeks. With the teams put together basically what are standard configurations and is working actively with the base of customers and potential customers for that as well.

Our next question comes from Philip Shen with ROTH Capital Partners.

First one is on your 2022 targets. Thanks for giving out so much detail there. Given the concentration of revenue in the back half and the outlook for WRO. And I know, Sean, you talked about how it's improving and we've noted that as well. But I wanted to see if you could talk through both the upside and downside risk to the guidance as it relates to WRO and anything else that you find that might be significant?

Sure. No problem, Phil. Thanks for the question. Yes, as I talked about in the remarks, WRO is the one big challenge that's causing choppiness today in the module supply. And so there's quite a bit of paperwork and other things that CBP is requiring from the module suppliers, but obviously, the U.S. market is too big to ignore for them, and they're all focused on doing whatever it takes to get WRO relief. And the good news is we're seeing some of that. We saw it reported recently. I think it first by your team of some shipments from Trina getting released. And so we see that as a very positive sign. And so as I look to the guidance we provided, obviously, if WRO is resolved in the current quarter, I feel like there could be some additional opportunity for the company. But if WRO continues and some of the more negative forecast for market growth end up being true, we still feel that the company, because of our size and our growth trajectory, we still have a lot of opportunity to gain share and grow faster than market. So even under a worst-case scenario, we definitely are putting plans in place to get more than our fair share of the market.

Great. As it relates to the international pipeline, can you talk about the margin profile of what's in the pipeline? Do you expect it to be in line with the U.S. or lower or potentially even on the side of the U.S., meaning higher?

So we look at the opportunity internationally is a huge one for us. To get your first project, sometimes you have to work very closely with the customer, and it may not be at the long-term margin expectation. But frankly speaking, once we're past the tipping point, once we've had the first big project on the ground, our expectations are that ultimately that the international margin profile will be very close to the U.S. margin profile.

Great. And one last one for me. As it relates to DG, can you talk about how you're going to market and provide a little bit more detail. I think you mentioned that you have an EPC partner there. Some of your peers partnered with a company like Russell Pacific, for example, as they address the DG market, what's your overall go-to-market strategy?

So I think we have a great plan in place. We've spent a lot of time finding the right partner and partners to help us in terms of our DG business and our approach. We see this as a huge market opportunity for us. And you'll hear more from us in the coming weeks in terms of who the partner is and what our go-to-market strategy is. But we're very excited. And even before our formal launch, we were able to capture 2 projects. And we think there's tons of opportunity here, and we're really looking forward to having it as a significant part of our business going forward.

Our next question comes from Maheep Mandloi with Credit Suisse.

Thanks for the detailed presentation here. One question just on the shipments or orders which were kind of delayed from '21 into '22. Can you just talk about how much of the growth is driven by those projects versus the backlog you have on hand? And also above that, just wanted to understand how should we think of like historically your end of year revenues were roughly 2 or 2.5x the backlog? And why is that different this time?

So we said during our earnings that we had some projects because of the various uncertainties that we discussed like AD/CVD and WRO, et cetera, that we did see some projects that shifted right not really canceling, which is great news. We're just simply shifting right. And so those projects are included in our contracted and awarded that you see for 2022, which is what we have said previously is north of $350 million. And so we're -- for the entire year in terms of the guidance we're providing today, we're trying to provide a -- what we consider a guidance that I personally am comfortable with for the year including the revenue figure. And so I think as we've said before, we have -- still have WRO that we're contending with. But hopefully, that comes to a nice resolution sooner rather than later, and we see additional market growth. But I would just say, we're taking all those factors into account. We're focused on the things that we can control, and that's why we're so maniacally focused on getting to breakeven gross margin in Q1 and getting to breakeven EBITDA in Q3. And the markets, none of us can predict exactly what's going to happen during the coming year. But again, we tried to put together a plan that we could share with the community. And again, that I'm comfortable with and the rest of the team is comfortable with.

Got it. And I appreciate those thoughts. And just in terms of the exposure here, like could you just talk about like how much of the 450 to 460 is international versus U.S. for you this year?

I'm sorry, you broke up a little on my end. Could you repeat the question, please?

Yes, sure. No, I just want to understand the mix of international versus U.S. shipments in 2022.

Okay. I'm sorry. So we continue to have the boots on the ground strategy internationally. And as I mentioned before, we're getting some good traction in Australia, in the Middle East, in Africa, but frankly, this will be a growth year for us in international where the percent will be significant. But in terms of our overall revenue and plan for the year, it's mainly coming out of our North American project base. The customers that are such great repeat customers for us as well as some new customers that we're working with.

Got you. And then just one last one from me. In terms of kind of the target margin structure here beyond Q4 of 2022. How should we think about that? I think like some of the industry have been talking about north of 20% gross margin. So I just wanted to understand -- get your thoughts on that.

Yes. So my thoughts are consistent with what the company shared around the time of the IPO this past April. And so at that time, we talked about getting to 20% gross margins and then beyond 20% gross margins. So it's still our expectation that we will be able to achieve gross margins beyond 20% out in the 2023, '24 time frame.

Our next question comes from Donovan Schafer with Collier Securities.

I want to dig a little bit more into the smaller scale DG projects. I know there are already some questions on that. But I was at Intersolar last week and talking to some very small kind of completely under the radar other tracker companies, some of them were divisions of steel companies and such. So -- but just some interesting shop talk there. And they were saying that rewind 12, 18 months, and they were seeing you participate -- they were saying that as small -- these small divisions, they were seeing success in this sub-20-megawatt project size category. And that earlier on, they'd seen a lot more of FTC sort of in the bidding. But then that had kind of faded away a bit. And I know, obviously, you guys also bid on very large projects and windows like the [ Samson ] project in Texas. So I'm just curious with this announcement of sort of the new design, one, just if that sample size, talking about small players could have been misleading. So just to get your take on whether there's sort of a reality there if you scaled back a little bit in the DG side, over, say, the last 12 months, just maybe as you were going through this redesign. And then two, I'm curious how -- what you would do to change the current design to optimize for these DG projects? Because I kind of already think of you as being -- as being extra attractive there because of the shorter rows and because of some of the other features. So I'm curious what else there is -- you would design to improve in that.

So since the company started, we've spoken to various customers. The company clearly has put an emphasis on larger scale industrial projects and some of the same folks who are building those projects have a portfolio that's got some smaller projects in it as well. And so all along, we've heard feedback from some of our customer base that the constructability advantages, the row length, the things you've mentioned that are -- that make the FTC Solar tracker product, the Voyager Tracker superior product would also apply to small systems. And so in the beginning, I would say that FTC was looking at all the different opportunities. I don't think there was ever a conscious effort to get in or out, the conscious effort really has been to focus on the larger scale projects. And based on that customer feedback and the realization that all the great constructability and other advantages of the Voyager Tracker system will also apply to DG. And so we had some folks in the business who came forward with a proposal. And it really makes sense given our overall plans for gross margin improvement and the margin opportunity in the DG segment. So we have, as of late, in the past few months, made the decision to emphasize and have a DG business. As I mentioned before, we've chosen an EPC partner. We've defined what the standard configurations are and design them so that we can easily support a DG business. And because the DG business model, obviously, with standard configurations, you're going to want to have a little bit of inventory there to support customer needs. And I think we're extremely well positioned. And so far with the customers that we've spoken to about the business has gone quite well. And you'll hear more from us in the coming weeks, specifically about the partner. But yes, we're very, very excited about the business. So I would say this is a -- we've been focused previously on the large utility scale projects mainly, but this is a new focus for the company and not necessarily a back to the future or anything like that. But at the beginning of the company, the company looked at all different opportunities. But again, we focus on utility scale and as of late, decided that DG would be a fantastic addition to our portfolio and that all the advantages of the Voyager system apply to DG as well.

Donovan, the one thing I'd add is to kind of emphasize is a standard configuration point. Because of our shorter row length, it allows us to optimize the system. And we really took that kind of direct feedback from the customer. And because we're able to apply a standard configuration to it, it does allow us to achieve a higher margin profile, but also kind of a faster than market throughput to the customer, which -- both of which they enjoy. And so we really kind of took that market feedback from our customers that are doing large-scale utility projects, work with them to fill a need in the more smaller subset of the market. And this is kind of the output of that. We're very excited about it.

Okay. That's very helpful.

I appreciate the additional comments.

One follow-up, if I may. You commented on more steel needed for the larger format modules and large share shift in that direction for 2022. So I'm just curious, is that more -- just my interpretation, and then you kind of correct me if I'm wrong is, I'm thinking, is that still -- is it -- it's more still in absolute -- more steel on a per megawatt basis or when you go to large format modules, are you doing sort of less steel per megawatt, but since it's more still in absolute terms or in absolute terms, that does ultimately mean you have to do more steel procurement and that could mean more spot market purchases and stuff. Am I understanding and looking at that the right way?

So you're right. In terms of large format, it drives an overall higher volume and a greater amount of steel in the system. And so that's been one of the headwinds that we talked about and have been dealing with. And so yes, I would say you characterized it correctly.

Our next question comes from Pavel Molchanov with Raymond James.

In your international markets where there are no tariff complications and the trade war with China is also not an issue. Are there project delays, nonetheless, just because of cost inflation?

So we're still seeing a lot of opportunity in terms of the pipeline internationally. And frankly, we're actively bidding on projects in multiple different countries where we have boots on the ground. And so we haven't seen a pause or a cancellation in projects internationally. We see plenty of opportunity there in terms of our pipeline and the opportunities that our team uncovers there on the ground. So no, we see still a lot of opportunity internationally.

And in that context, is it fair to say that that's really back-end weighted top line ramp that you're guiding to. That's essentially a U.S. domestic growth story because of what you said, the international just has fewer of these headwinds right now.

Well, most of our business in 2022 plan is indeed in North America. We still -- we see international as a great growth opportunity for the future of the company, and it's definitely going to grow by a significant amount in the year. But in terms of the overall volume for 2022, it's primarily North America.

Our next question comes from Kashy Harrison with Piper Sandler.

Just 2 quick ones for me. First, apologies if I missed this, but what was the backlog at year-end 2021 for 2022? And then second, it seems like your revenue guidance implies that you're getting to north of 1 gigawatts when you get to 3Q and 4Q. Is there some seasonality there? Or do you think that, that's a good way to think about the business moving forward as a 1-plus gigawatt quarter company?

Hey Kashy...

Go ahead, Bill. Sorry.

I'm sorry, I was just going to say on the backlog, we haven't updated it yet for Q4 since we haven't reported yet. We'll plan to provide that update along with the Q4 results. Sorry, go ahead, Sean.

We'll provide that as part of our update in February.

And on the gigawatts, are you -- do you think of yourself as a 1 gigawatt company per quarter starting in the second half of the year and moving forward? Or is that just seasonality that's rolling through into second half of the year?

No, we absolutely see ourselves on a growth trajectory. We absolutely see the opportunity in North America. We talked about the pipeline. We talked about the long term. So absolutely, we see ourselves as being capable of more than 1 gigawatt per quarter.

That concludes today's question-and-answer session. I'd like to turn the call back to Sean Hunkler for closing remarks.

Thanks very much, operator, and thanks to all of you for joining the call. I'm really excited about FTC Solar and the opportunity, I really wanted to get back with everyone though at my approximate 100-day mark and share with you some of that excitement and as well as our outlook in terms of the guidance and some indicative quarterly progression related to that. I look forward to talking again with our earnings call in February. Thank you very much.

This concludes today's conference call. Thank you for participating. You may now disconnect.