FTC Solar, the underdog of the solar tracker market, has been facing some tough times. Their stock price has been struggling, revenue has dipped, and they're still searching for a new CEO. But beneath the surface, a subtle yet significant shift is taking place, one that most analysts seem to have missed: a dramatic surge in contracted projects.

While everyone is fixated on the headline-grabbing $1.8 billion backlog, the real story lies within the fine print. As revealed in their recent earnings call, FTC Solar has witnessed a meteoric rise in the rate of signed purchase orders – hitting a consistent pace of $50 million per month for the past eight months. This signifies a critical change in momentum, a tangible sign that customers are not only interested, but are ready to commit.

For a company that endured an 18-month period of sluggish purchase orders, this resurgence is nothing short of remarkable. It indicates a renewed confidence in FTC Solar's offerings, a testament to their efforts in refocusing on customer needs, streamlining processes, and expanding their product portfolio.

This $50 million monthly influx might seem small compared to the massive backlog, but it's the lifeblood of FTC Solar's turnaround. It represents a steady stream of confirmed revenue, a vital foundation for their projected return to profitability in the latter half of 2024.

The significance of this development goes beyond just numbers. It points to a potential shift in customer perception. Remember, FTC Solar has primarily been known for their 2P tracker technology, a market that saw a dramatic 80% decline during the recent module shortage. This forced them to rapidly develop and launch their 1P Pioneer Tracker in a bid to diversify their offerings.

And it's working. Now, FTC Solar is not just a 2P specialist, but a comprehensive solutions provider, capable of tailoring technology to specific project needs. This agility is attracting smaller developers who are driving the current wave of contracted projects.

Hypothesis:

If this $50 million monthly pace of contracted projects holds steady, FTC Solar is on track to generate approximately $600 million in confirmed revenue for 2024. This figure alone could propel them towards profitability, even before factoring in the potential conversion of awarded projects from their existing backlog.

Supporting Numbers:

$50 million monthly contracted projects x 12 months = $600 million projected annual revenue. FTC Solar's breakeven revenue level is estimated at $50-$60 million per quarter, implying a full-year breakeven point of $200-$240 million.

However, there are still challenges. Gaining traction with larger, Tier 1 accounts remains a hurdle, especially considering the lingering skepticism surrounding the company's past performance.

But the signs are promising. FTC Solar is aggressively pursuing cost reduction strategies, aiming to achieve a sustainable 20% gross margin as revenue scales. They are actively engaging with customers, even forming a customer advisory board to foster stronger relationships and address concerns.

Projected Revenue vs. Breakeven Point

The following chart illustrates FTC Solar's projected revenue based on the current pace of contracted projects, compared to their estimated breakeven revenue level.

Contracted vs. Awarded Projects

This table shows the breakdown of FTC Solar's backlog, highlighting the recent shift towards contracted projects. Data extracted from Seeking Alpha FTC Solar Transcripts.

"Fun Fact: FTC Solar was founded by three entrepreneurs with deep roots in the semiconductor industry. Their expertise in engineering and manufacturing precision equipment has been instrumental in developing their innovative tracker technology."

The coming months will be crucial for FTC Solar. If they can maintain this momentum of converting projects, rebuilding trust, and driving down costs, their $50 million secret weapon might just be the key to unlocking a truly remarkable comeback.