Adjusted Gross Profit, Adjusted EBITDA, Adjusted Net Income, General and Administrative Expense and Free Cash Flow Reconciliation (unaudited)(in thousands, except per share amounts)The following table reconciles net income (loss) to Adjusted net income: Three Months Ended March 31, 2025 2024 Net income$16,746 $2,165 Preferred dividends and accretion 14,443 13,502 Net income (loss) to common shareholders$2,303 $(11,337)Amortization of Intangibles 4,889 9,254 Amortization of developed technology 3,639 3,639 Amortization of debt discount and issuance costs 1,393 1,552 Series A Pref stock accretion 7,241 6,665 Equity based compensation 2,798 4,020 Change in fair value of contingent consideration (150) (735)Certain legal expenses (a) 1,083 730 Other costs(b) — 42 Income tax expense of adjustments(c) (3,474) (4,852)Adjusted net income$19,722 $8,978 Income (loss) per common share Basic$0.02 $(0.07)Diluted$0.02 $(0.07)Weighted average number of common shares outstanding Basic 152,076 151,351 Diluted 152,783 151,351 Adjusted net income per common share Basic$0.13 $0.06 Diluted$0.13 $0.06 Weighted average number of common shares outstanding Basic 152,076 151,351 Diluted 152,783 152,243 (a) Represents certain legal fees and other related costs associated with (i) actions filed against the company and certain officers and directors alleging violations of the Securities Act of 1933 and the Securities Exchange Act of 1934, which litigation was dismissed with prejudice by the Court on May 19, 2023 and subsequently appealed.
Adjusted Gross Profit, Adjusted EBITDA, Adjusted Net Income, General and Administrative Expense and Free Cash Flow Reconciliation (unaudited)(in thousands, except per share amounts)The following table reconciles Gross profit to Adjusted gross profit: Three Months Ended March 31, 2025 2024Revenue302,363 153,403 Cost of revenue225,935 98,313 Gross profit76,428 55,090 Gross margin25.3% 35.9% Amortization of developed technology3,639 3,639 Adjusted gross profit80,067 58,729 Adjusted gross margin26.5% 38.3% The following table reconciles net income (loss) to Adjusted EBITDA: Three Months Ended March 31, 2025 2024 Net income$16,746 $2,165 Preferred dividends and accretion 14,443 13,502 Net income (loss) to common shareholders$2,303 $(11,337)Other expense, net (3,342) (4,494)Foreign currency gain (loss), net (689) 499 Preferred dividends and accretion 14,443 13,502 Interest expense 8,035 8,940 Income tax expense (benefit) 6,534 1,304 Depreciation expense 1,043 883 Amortization of intangibles 4,889 9,254 Amortization of developed technology 3,639 3,639 Equity-based compensation 2,798 4,020 Change in fair value of contingent consideration (150) (735)Certain legal expenses(a) 1,083 730 Other costs(b) — 42 Adjusted EBITDA$40,586 $26,247 (a) Represents certain legal fees and other related costs associated with (i) actions filed against the company and certain officers and directors alleging violations of the Securities Act of 1933 and the Securities Exchange Act of 1934, which litigation was dismissed with prejudice by the Court on May 19, 2023 and subsequently appealed.
Condensed Consolidated Statements of Operations (unaudited) (in thousands, except per share amounts) Three Months Ended March 31, 2025 2024 Revenue$302,363 $153,403 Cost of revenue Cost of product and service revenue 222,296 94,674 Amortization of developed technology 3,639 3,639 Total cost of revenue 225,935 98,313 Gross profit 76,428 55,090 Operating expenses General and administrative 43,945 37,784 Change in fair value of contingent consideration (150) (735)Depreciation and amortization 5,349 9,627 Total operating expenses 49,144 46,676 Income from operations 27,284 8,414 Other expense, net 23 814 Interest income 3,319 3,680 Foreign currency gain (loss), net 689 (499)Interest expense (8,035) (8,940)Total other expense, net (4,004) (4,945) Income before income tax expense 23,280 3,469 Income tax expense 6,534 1,304 Net income 16,746 2,165 Preferred dividends and accretion 14,443 13,502 Net income (loss) to common shareholders$2,303 $(11,337) Income (loss) per common share Basic$0.02 $(0.07)Diluted$0.02 $(0.07)Weighted average number of common shares outstanding Basic 152,076 151,351 Diluted 152,783 151,351 Array Technologies, Inc.and Subsidiaries Consolidated Statements of Cash Flows (unaudited)(in thousands) Three Months Ended March 31, 2025 2024 Operating activities Net income$16,746 $2,165 Adjustments to reconcile net income to cash provided by operating activities: Provision for bad debts 1,671 896 Deferred tax expense (benefit) 1,024 (13)Depreciation and amortization 5,932 10,125 Amortization of developed technology 3,639 3,639 Amortization of debt discount and issuance costs 1,506 1,553 Equity-based compensation 2,798 3,926 Change in fair value of contingent consideration (150) (735)Warranty provision 1,720 (1,138)Inventory reserve 839 600 Changes in working capital, net (48,784) 26,484 Net cash provided by (used in) operating activities (13,059) 47,502 Investing activities Purchase of property, plant and equipment (2,352) (2,396)Retirement/disposal of property, plant and equipment — 10 Net cash used in investing activities (2,352) (2,386)Financing activities Proceeds from issuance of other debt 7,862 2,283 Principal payments on other debt (7,294) (3,781)Principal payments on term loan facility (1,075) (1,070)Contingent consideration payments (1,204) (1,427)Other financing (14) (580)Net cash used in financing activities (1,725) (4,575)Effect of exchange rate changes on cash and cash equivalent balances 2,488 (2,001)Net change in cash and cash equivalents and restricted cash (14,648) 38,540 Cash and cash equivalents, and restricted cash beginning of period 364,141 249,080 Cash and cash equivalents and restricted cash, end of period$349,493 $287,620 Array Technologies, Inc.
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