FTC Solar , Inc. (NASDAQ: FTCI), a leading provider of solar tracking solutions, conducted its Third Quarter 2024 Earnings Conference Call on October 25, 2024, with CEO Yann Brandt and CFO Cathy Behnen delivering key insights into the company's performance and strategic direction.
Despite a decline in Q3 revenue and a GAAP net loss, FTC Solar showcased a series of strategic agreements and a solid cash position, setting the stage for anticipated profitability by 2025. The company's focus on expanding its product offerings and geographic reach, particularly in the U.S., underscores its potential for growth in the solar tracker market.
Key Takeaways
- FTC Solar experienced a decline in Q3 revenue to $10.1 million, with a GAAP net loss of $15.4 million.
- A strong cash position was reported, with $8.3 million on hand and a $15 million note placement expected to close by November 30.
- The company has secured significant supply agreements, including with Strata Clean Energy and Dunlieh Energy.
- FTC Solar's product bookings have shifted towards 1P products, now comprising over 70% of total bookings.
- Quarterly profitability is targeted by 2025, with a breakeven revenue range of $50 million to $60 million.
- The U.S. solar market is growing, with FTC Solar noting an almost 100% increase in solar capacity from 2017 to 2020.
Company Outlook
- The company is optimistic about achieving quarterly profitability by 2025.
- Revenue for Q4 is projected between $10 million and $14 million.
- FTC Solar anticipates adjusted EBITDA breakeven in 2025.
- About 60% of the signed backlog is expected to contribute to revenue in 2025.
Bearish Highlights
- Q3 revenue saw a decrease of 11.3% from the previous quarter and 66.8% year-over-year.
- The company reported a non-GAAP gross loss projection for Q4 of $4.2 million to $1.5 million.
Bullish Highlights
- The company has entered into a multi-year supply agreement with Strata Clean Energy for at least 500 megawatts of 2P trackers.
- A 1 gigawatt supply agreement with Dunlieh Energy and expansions with Sandhills Energy have been secured.
- FTC Solar is confident in its strong product cost structure and healthy margin outlook.
Misses
- There was a notable net loss in Q3, with a GAAP figure of $15.4 million.
Q&A Highlights
- No further questions were asked during the call, indicating that the executives covered the pertinent information.
FTC Solar's recent earnings call painted a mixed picture of current challenges and future opportunities. The company's pivot towards 1P product offerings and the securing of new supply agreements demonstrate a strategic response to market demands. With a focus on the U.S. market and the political stability supporting solar growth, FTC Solar is positioning itself to capture a larger share of the industry. The company's leadership remains confident in their strategies, aiming to reach profitability within the next year and capitalize on the burgeoning demand for renewable energy solutions.
InvestingPro Insights
FTC Solar's recent earnings call reflects a company navigating through challenging times while positioning itself for future growth. InvestingPro data provides additional context to the company's financial situation and market performance.
As of the latest data, FTC Solar's market capitalization stands at $58.11 million, reflecting its current position in the solar tracking solutions market. The company's revenue for the last twelve months as of Q2 2024 was $77.77 million, with a significant revenue decline of 32.99% over the same period. This aligns with the company's reported decrease in Q3 revenue and underscores the challenges faced in the current market environment.
InvestingPro Tips highlight both concerns and potential upsides for investors. One tip notes that FTC Solar is "quickly burning through cash," which correlates with the company's reported GAAP net loss and the need for additional financing through the $15 million note placement. However, another tip points out that the company "holds more cash than debt on its balance sheet," suggesting a degree of financial stability despite current losses.
The stock's performance has been volatile, with InvestingPro data showing a strong return of 147.25% over the last three months, contrasting with a 10.14% decline in the past week. This volatility is consistent with the InvestingPro Tip indicating that the "stock generally trades with high price volatility."
Investors should note that analysts anticipate a sales decline in the current year, which aligns with the company's own projections for Q4 revenue. Additionally, the InvestingPro Tip stating that analysts do not anticipate profitability this year supports FTC Solar's timeline for reaching quarterly profitability by 2025.
For those interested in a more comprehensive analysis, InvestingPro offers 15 additional tips for FTC Solar, providing a deeper understanding of the company's financial health and market position.
Full transcript - FTC Solar Inc (NASDAQ:FTCI) Q3 2024:
Operator: Thank you for standing by. My name is Louella, and I will be your conference operator today. At this time, I would like to welcome everyone to the FTC Solar Third Quarter 2024 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to turn the call over to Bill Michalek, Vice President of Investor Relations. Please go ahead.
Bill Michalek: Thank you, and welcome, everyone, to FTC Solar's third quarter 2024 earnings conference call. Before today's call, you may have reviewed our earnings release and supplemental financial information, which were posted earlier today. If you've not yet reviewed these documents are available on the Investor Relations section of our website at ftcsolar.com. I'm joined today by Yann Brandt, the company's President and Chief Executive Officer; Cathy Behnen, the company's Chief Financial Officer; and Patrick Cook, the company's Head of Capital Markets and Business Development. Before we begin, I remind everyone that today's discussion contains forward-looking statements based on our assumptions and beliefs in the current environment and speaks 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 press release and other SEC filings for more information on the specific risk factors. We assume no obligation to update such information, except as required by law. As we expect, we'll discuss both GAAP and non-GAAP financial measures today. Please note that the earnings release issued this morning includes a full reconciliation of each non-GAAP financial measures to the nearest applicable GAAP measure. With that, I'll turn the call over to Yann.
Yann Brandt: Thank you, Bill, and good morning, everyone. I'm pleased to speak with you all today on my first official earnings call as CEO. I'll focus my comments on the state of FTC Solar and my observations overall as well as a few updates and then turn it over to Cathy to review the financials. Throughout my career, which is taking me across the solar and storage industry, people seem to primarily only remember how things end up and the successes we realized, not necessarily how they started. In the case of FTC Solar, I see my tenure starting with a company with a solid foundation made up of a great team and complete portfolio of tracker products and the potential to be enormously successful. While revenue is at an inflection point with gaps to be filled in with customer additions, both individual and portfolio projects, I believe the company is in an enviable position in many respects. This includes having a product set with features that customers love, a business they enjoy working with and a cost structure poised to enable strong margin growth and profitability. In addition, the company now has a compelling and expanded product set in the 1P or 1 Panel and Portrait market that opens up the vast majority of the market that wasn't available to the company in the past. In aggregate, I believe the company is in a strong position as it relates to some of the most critical aspects of the business, and has had some recent business successes. Here at about the 90-day mark of my tenure at FTC Solar, I've met with dozens of customers, prospective investors and of course, employees. I want to thank all of those constituencies as well as the Board of Directors for the fantastic welcome and the candid feedback and advice I have received which I can tell you has been heard and very much appreciated. All of those conversations and my work before and during my time here have led to a few observations. But before I share these observations, I want to share an exciting update, which is that FTC has entered into a binding agreement to add additional liquidity to our balance sheet. This capital will be valuable improvement to our capital structure that was a missing link to some commercial opportunities in the past. This capital, in addition to the ability to convert inventory into cash strengthens FTC and provides additional comfort that we're tracker supplier that our customers can continue to rely on. Now turning to the observations. First, I believe FTC is now at an inflection point, thanks to the enormous traction in our 1P positioning and sales efforts. Over 70% of our bookings are now 1P Pioneer product. That compares to 1P revenues of only 16% and 30%, respectively, in Q2 and Q3. It's well documented by now that the company has been out of position in the marketplace by not having a complete product portfolio, inclusive of a single row 1P tracker available to the market, underscoring the importance of having innovative product market fit. While it has taken some time for the company to bring a compelling 1P solution to the market, introduce it to customers, get several projects in the ground, expand the offering and build a pipeline, the company has now done just that and is poised to prosper and expand in 2025. In fact, we now have our most complete 1P product portfolio, which is quite robust. Since our initial launch of the 1P, we have introduced high wind offerings that now extend up to 150 miles per hour, compatibility for all module types, including ultra large format M Series 7 with the ability for their contractor and asset owner to make changes to model specifications late in the design process and multiple features to reduce cut and fill which would fall into the train following category, including a dual row option to name a few. We have spent most of this year working with customers to ensure we can support diverse sets of type conditions, including the various wind, module and terrain conditions customers may need. I believe we can now address the vast majority of the 1P market and, importantly, address all of those projects that asset owners are looking to invest in. We have transitioned from a 2P only company to 1 that is balanced with compelling 1P and 2P solution and can provide the optimal solution for each customer site, significantly increasing our total addressable market in the U.S. and key global solar markets. Think about it, we essentially opened up roughly 85% of the market by aggressively expanding into 1P. I believe the company's 2P product has always been top tier, and we're the clear market leader in that segment now more than ever. In fact, 70% of our current purchase orders are now 1P and more than 80% of our outgoing proposals are 1P. I'm convinced that this compelling product line will enable us to gain real market share in several of the market segments and geographies in relatively short order. The second observation is that many customers find us amongst the easiest with which to do business. They value the relationships and experience working with our team. These relationships rooted in collaboration and decades of experience in the solar industry aligned with a deep understanding of what it takes to get a solar project built and operate for the long-term. Customers do not want a duopoly. They want a healthy, robust and competitive tracker module, which supports competitive pricing, improved customer service experience and continued innovation gives them more options. Several customers have shared examples with me where the FTC team has gone above and beyond in one way or another, engaging with customers in ways that our competitors either can't, don't or perhaps no longer do. Lead times and support times matter, but it's more than that, FTC is a brand reputation much bigger than its current footprint and well-regarded products and service. In my opinion, there is nothing stopping us from being one of the clear leaders in this industry. Third, our current quarterly revenue levels are also at an inflection point. While the company has had a good amount of contracted business overall and is winning new business, the near-term revenue run rate has been low. Even though we are poised to grow much faster than the market, getting from purchase order to the start of deliveries is a process that takes time. We are beginning to see 1P revenue make its way into our financial performance, but it is the start of the turn from this inflection point. We have many projects in flight and are working to increase our contracted backlog actively to enhance the volume of throughput. This low run rate means we are also currently not absorbing our fixed costs. We must give our team more overall volume to work with. Our cost structure is good and the breakeven revenue level is relatively low. So there's not a large ramp needed to get to profitability, but we're not there yet. As for capital, being new to the business, I've had a wide aperture as it relates to what option to consider. From traditional fundraising to perhaps something more strategic, as I mentioned, today, we announced we have entered into a binding term sheet with an investor group for the company to issue a five-year promissory note in the principal amount of $15 million. This transaction is expected to close by the end of this month. As Cathy will discuss, we also received an additional $4.7 million in cash after the end of the quarter from an earn-out on a prior investment. These items, along with the cash on the balance sheet, inventory and $65 million remaining on the ATM, puts FTC in an improved capital position going forward, providing the bankability that our customers want to see from us. Fourth, our solutions are widely viewed as easier, safer and faster to install, driven by significant innovation from key product features. Many of you may have seen our customer comments recently in press releases or social media referencing us having one of the fastest and easiest trackers to install. These are comments I continue to hear from our customers and prospects. For some, it’s a matter of cost and labor efficiency. For example, a leading EPC shared that the mechanical installation of our tracker, in their view is much faster than our competitors and results in significant savings. Safety is a significant factor of importance for all of our partners. Our features focus on safety by minimizing activities that can cause injuries and removing dangerous pinch points throughout the system. I’m sure many of you may have seen our videos on the LinkedIn page or YouTube showing how quickly and easily one can hang modules on our tracker. The crew just lays that panel down, draping them like a picture frame. This is our slide and glide technology. Folks on the other side are quickly securing them with a rubber mallet made possible by our cinch clip as opposed to having people hold the modules and threading and securing bolts. When taken in aggregate, the ease of module hanging, less work at height, fewer connection points, no specialty tools and less torquing for example, are found by customers to be easier, faster, and safer for their crews. This can result in less time training new employees, more projects that can be completed in a year, doing our part as a key vendor to improve safety and worker injuries on solar projects. Easier, faster, and safer impacts the entire lifecycle from training to project completion and safe costs throughout, making projects more profitable and possibly higher cost projects economical. One final observation I wanted to share is that we are poised to achieve quarterly profitability in 2025. We have an excellent product cost structure that enables strong margins. I know the company has discussed in the past all the work that is done as part of the design to value and design manufacturing process, so I won’t rehash that. But the work is now paying dividends to set the company up very well for the future. The direct margins on projects are healthy and will enable strong gross margin improvement at the top line scales driven by recognizing our already signed bookings as well as new [Audio Dip] we will continue to add. We also have an efficient OpEx structure that doesn’t sacrifice service to customers. The timing of the profitability depends on our growth in 1P and customer project timing. I’m going to resist putting out specific timing for the moment and I’ll avoid throwing out aggressive targets, but I’m confident in our positioning and that we can see strong improvement in our results as we move forward. Before I turn it over to Cathy, I want to highlight some of our recent successes and momentum. First, toward the end of the quarter we signed a multi-year supply agreement with Strata Clean Energy, a development EPC and O&M leader in the solar industry. The agreement is for at least 500 megawatts of 2P trackers and could expand to more than 1 gigawatt. They have said great things about our trackers and service and we are honored to have their endorsement and continued business. Second, after the end of the quarter we signed a 1 gigawatt supply agreement with Dunlieh Energy. The first project under that agreement is a 500 megawatt project under development in Nebraska with tracker deliveries expected to begin in the second half of 2025. Dunlieh Energy is a new customer and we are excited to work with them. Third, we were recently able to share additional project details on the existing 1 gigawatt agreement with Sandhills Energy. We have previously announced a 225 megawatt project in Butler County, Nebraska, and we’re able to share that we’ll also be supplying nearby projects of 320 megawatts and 448 megawatts, respectively. Tracker delivery on those projects is expected to begin in the second half of 2025. And finally, after the end of the quarter, we entered into a binding term sheet for the $15 million note placement I mentioned, and we received $4.7 million cash earnout from our previous investment in Dimension Energy. Dimension is a community solar developer in which the company invested $4 million in 2018. FTC subsequently sold its stake in 2021 for $22 million and has received earnouts of an additional $9 million since then, including the $4.7 million received in October. So not a bad result so far, earning $31 million on a $4 million investment. And we’re eligible to receive up to another $5 million based on their performance through the end of this year, which would be paid out in Q1. So in summary, as I take stock of our position as a company, I believe that we’re in an incredibly fortunate situation in many respects and in one of the most critical aspects of the business. So yes, our revenue is at an inflection point and we need to fill gaps in project timing. But I also see us having an enviable position as it relates to having products that customers love, a business they love to work with, a cost structure that will enable strong margin growth and profitability, and now a complete 1P product set that opens up essentially 85% of the market that wasn’t available to us before. That’s a pretty awesome position. Our stock price isn’t yet reflecting this position or our potential, but as I said at the outset, people often forget where we start and only remember the successes we have from here. We’ll see how it plays out this time around, but I’m optimistic about our future. With that, I’ll turn it over to Cathy.
Cathy Behnen: Thanks, Yann and good morning everyone. I’ll provide some additional color on our third quarter performance and our outlook. Beginning with a discussion of the third quarter, revenue came in at $10.1 million, which was just above the midpoint of our target range. This revenue level represents a decrease of 11.3% compared to the prior quarter and a decrease of 66.8% compared to the year earlier quarter due to lower product volumes. GAAP gross loss was $4.3 million, or 42.5% of revenue, compared to gross loss of $2.3 million, or 20.5% of revenue in the prior quarter. Non-GAAP gross loss was $3.9 million or 38.3% of revenue, which was within our target range, although a bit below the midpoint in part due to a product and service mix. The result for this quarter compared to a non-GAAP gross loss of $1.9 million in the prior quarter. GAAP operating expenses were $10.7 million on a non-GAAP basis, excluding stock-based compensation and certain other costs, operating expenses were $8.1 million down from $13.2 million in the same quarter last year. This represents the lowest level in more than three years as we have found efficiencies across the company, while continuing to invest to support growth. This result compares to non-GAAP operating expenses of $8.3 million in the prior quarter. GAAP net loss was $15.4 million or $0.12 per diluted share compared to a loss of $12.2 million or $0.10 per diluted share in the prior quarter and a net loss of $16.9 million or $0.14 per diluted share in the year ago quarter. Adjusted EBITDA loss, which excludes an approximate $3.2 million net loss from stock-based compensation expenses and other non-cash items was $12.2 million, which was better than the midpoint of our guidance range. This compared to losses of $10.5 million in the prior quarter and $9.7 million in the year ago quarter. Finally, regarding liquidity, we ended the quarter with $8.3 million in cash on the balance sheet. Subsequent to quarter end we received $4.7 million cash earnout relating to our investment in Dimension Energy. And as Yann mentioned, we entered into a binding term sheet for the company to issue a five year interest bearing promissory note in the principal amount of $15 million. The note bears interest at a rate of 11% per annum payable semi-annually is paid in cash or at our option a rate of 13% per annum is paid-in-kind. In connection with the agreement, the company intends to issue warrants with a 10 year term to purchase 17.5 million shares of common stock. The transaction is expected to close by November 30, subject to customary closing conditions and the preparation of definitive documents. So we reduced our cash burn in the quarter and with these items expect to end Q4 with higher cash levels. We also continue to have about $65 million remaining under the ATM program at the end of the quarter. With that, let us turn our focus to the outlook. Our targets for the fourth quarter call for the following: Revenue between $10 million and $14 million, which would be approximately flat to up nearly 40% relative to the third quarter; along with this revenue level, we expect non-GAAP gross loss between $4.2 million and $1.5 million, or between negative 42.2% and 10.7% of revenue. As you might expect, the percentage ranges vary more greatly at these lower revenue levels; non-GAAP operating expenses between $8.2 million and $9 million; and finally adjusted EBITDA loss between $13.7 million and $9.9 million. For the first quarter, we expect continued improvement in revenue, margin, and adjusted EBITDA, and we continue to expect to achieve adjusted EBITDA breakeven on a quarterly basis in 2025. With that, we conclude our prepared remarks. And I will turn it over to the operator for any questions. Operator?
Operator: [Operator Instructions] Your first question comes from the line of Sameer Joshi with H.C. Wainwright. Please go ahead.
Sameer Joshi: Yes, good morning. Thanks for taking my call, Yann, Cathy, Patrick. Just a quick question on the 1P revenues. What proportion of the backlog or the current backlog is coming from that? And then just in terms of feedback from customers, just like 2P, are you getting feedback about the ease and safety of insulation as well for 1P products?
Yann Brandt: Sure. Thanks for the question. This is Yann. About 70% of our signed purchase orders today are in the 1P category, so we’re going to start seeing revenues come in from the 1P category. As I mentioned in the prepared remarks, it’s part of the inflection point that we’re starting to see. About 16% and 18% in Q2 and Q3 came from the 1P category, and that’s going to continue to grow over time as those projects get to the start of construction. The feedback on the 1P has been excellent. As I mentioned, I’ve been visiting with a lot of EPCs, the contractors that have to install it, as well as the investors that are going to own the project. There are some key features that make the system easier and faster to install, as well as safer. It’s an advantage of being the last 1P product to the market is that our team was able to build innovations on top of the products that were in the market, working hand in hand with potential customers to drive those innovations. The category that’s interesting about FTC’s 1P product is that it’s not just a monolithic piece, I mentioned, we have the high wind solutions all the way up to 150 mile an hour. Especially with growth in solar in the Southeast and obviously the expansion of where hurricanes are hitting, we have some trade following features. So it’s not just the individual aspects of the product, but also how wide the product portfolio can span, which allows us to increase our share of wallet with customers regardless of where they’re investing.
Sameer Joshi: Thanks, Yann, for that. I was going to go there in terms of the geographic diversity you mentioned. Can you just like qualitatively describe how your projects and your new projects are distributed geographically?
Yann Brandt: Yes, our geography is pretty diverse. Obviously we have a strong focus on the U.S., but also in some international markets. But in the U.S., we’re seeing strong growth in the Northeast, which has its own challenges with terrain, the value of land. So density is really important. Less focus on wind and hail for example. But the strong markets continue to be the Southwest and Texas. But we’re seeing strong growth in the Northeast as well as now with a high wind product we see a good opportunity in the Southeast.
Sameer Joshi: Got it. And then just in terms of the macro environment, not the interest rate environment, but the political environment, do you expect to see any headwinds, any tailwinds based on what happened last week in the elections?
Yann Brandt: Yes. I mean, look, the – we don’t – solar is going to continue to be strong. Politically speaking, solar continues to thrive. And I want to remind everyone, from 2017 to 2020 solar had nearly 100% growth, right, growing from about 11 gigawatts up to 20 gigawatts in 2020. We’ve seen tariffs and ITC (NS:ITC) extensions, tax credit extensions when both parties were in power. So, solar has headwinds and tailwinds regardless of who’s in the White House and who has control of Congress. There’s obviously a lot of utilization of the solar tax credit as well as the storage tax credits that enable more projects to get done. 85% of the domestic manufacturing in the U.S. is in Republican Congressional districts. And now we have – SEIA put out numbers, about 45 gigawatts of domestic supply being built here in the U.S. So with the data center growth and what the utilities are saying, the base load growth rate is, the energy is going to have to come from somewhere. And solar is the easiest, fastest, cheapest choice as well as being the cleanest and has one of the largest development pipelines out there.
Sameer Joshi: Yes. No, Yann, makes sense. We agree. One last question on the outlook for 4Q. It seems based on the outlook for the non-GAAP gross profit number relative to the revenue outlook, the margin seems to be pretty healthy. Is it because of product mix or some other like pricing or something is at play here?
Yann Brandt: Yes, let me have Cathy chime in here.
Cathy Behnen: Yes, thanks Sameer. This is Cathy. Yes, it's really driven by the product mix that we have in Q4.
Sameer Joshi: Okay. Thanks. I'll take my other questions offline. Thanks.
Cathy Behnen: Thank you.
Operator: [Operator Instructions] Your next question comes from the line of Graham Price with Raymond (NS:RYMD) James. Please go ahead.
Graham Price: Hi, good morning, thanks for taking my question. I guess first one for me. In the past, talked about have a breakeven revenue range of around $50 million to $60 million and you brought up kind of a breakeven point briefly in the comments, I was just wondering if that's still a decent rule of thumb and how that might have changed with the heightened shift towards 1P.
Yann Brandt: Sure, Cathy?
Cathy Behnen: Sorry, Graham, could you repeat your question? I was getting a breakup?
Graham Price: No problem. I was just asking in the past, you've discussed a breakeven revenue range of around $50 million to $60 million. We're just wondering if that's still holds, especially given the shift to 1P?
Cathy Behnen: Okay, thanks Graham. Yes, that still holds. We are still looking at $50 million to $60 million is our breakeven point. We experienced really pretty similar margins on 1P and 2P, and it really has more to do the – with product mix in terms of timing of the projects throughout the quarter. But yes, $50 million to $60 million is still our breakeven point.
Graham Price: Got it. Perfect. And then maybe one quick one on the guidance. I understand you are not providing 2025 revenue guidance here, but just wanted to get a general sense of the cadence? I assume it's likely be more back-end loaded than this year.
Yann Brandt: Yes. Graham, good question. I mean look, we have pretty strong time purchase order backlog that we're walking into 2025 and in addition to the commercial traction that we're seeing that we'll add to it. Our expectation is about 60% of the signed backlog is going to start recognizing revenue in 2025. And even though we're in the middle of the annual operating plan process, we do see strong growth potential in 2025, not just on that time backlog, but the expansion of that and the commercial opportunities we're seeing with our existing customers and new ones that we're adding to the roster.
Graham Price: Got it. Thanks. And then last one from my end. Just wanted to check on the Strata supply agreement, I wanted to verify that those are only 2P delivery. I'm just wondering if there could be any future opportunity for 1P on that project? And then maybe more broadly, just your thoughts on opportunities to cross-sell between 1P and 2P.
Yann Brandt: Yes, absolutely. So the MSA currently is on 2P Strata has been a longtime user and a big fan of the feature set. And a lot of that is driven by the fact that the FTC didn't have a 1P product available to the market until recently, particularly with the same feature set that makes it easier and faster and safer to install. So I think we're going to have more and more opportunities as people look at their product mix and their supplier base for their projects, especially the larger EPCs, they plan out more than three, four quarters at a time. We're having opportunities to bid many of these projects just to give you a sense, in Q3 of this year, our average proposal, 80% of which was 1P, the average project size was 160 megawatts. So we're seeing the inclusion of FTC in that product mix, I think it makes us an obvious top four player here in the U.S. tracker landscape, especially with having access to domestic content, et cetera. So we have strong 2P customers. It's still the majority of our revenue today, but the inflection point is driving clear signal that 1P is gaining adoption, not just we're definitely working on Strata, but many others as well. And 1P and 2P are really product solutions for different project types, right. So the more expensive land cost and density becomes an important factor for consideration. 2P is a really good choice. We're a very clear market leader in the 2P category, not a lot of our peers have a 2P solution. And we obviously have one of the largest track records in the market with our with 2P, you add that to the 1P catalog, provides a technical solution for almost every project in an investor's portfolio.
Graham Price: Understood. Thank you very much. I’ll get back in the queue.
Yann Brandt: You bet.
Operator: [Operator Instructions] Ladies and gentlemen, seeing as there are no further questions. That concludes today's call. Thank you all for joining. You may now disconnect.
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