Solar tracking systems manufacturer Array NASDAQ:ARRY reported Q2 CY2026 results topping the market’s revenue expectations, but sales fell by 5.6% year on year to $342.1 million. On the other hand, next quarter’s revenue guidance of $320 million was less impressive, coming in 32% below analysts’ estimates. Its non-GAAP profit of $0.24 per share was significantly above analysts’ consensus estimates.
Array (ARRY) Q2 CY2026 Highlights:
- Revenue: $342.1 million vs analyst estimates of $313.8 million (5.6% year-on-year decline, 9% beat)
- Adjusted EPS: $0.24 vs analyst estimates of $0.12 (significant beat)
- Adjusted EBITDA: $63.26 million vs analyst estimates of $44.49 million (18.5% margin, 42.2% beat)
- The company reconfirmed its revenue guidance for the full year of $1.45 billion at the midpoint
- Management raised its full-year Adjusted EPS guidance to $0.72 at the midpoint, a 2.1% increase
- EBITDA guidance for the full year is $220 million at the midpoint, below analyst estimates of $221.8 million
- Operating Margin: 10.2%, down from 12.8% in the same quarter last year
- Free Cash Flow Margin: 33.2%, up from 12.1% in the same quarter last year
- Market Capitalization: $924.5 million
“ARRAY delivered a strong second quarter while achieving a significant company milestone, surpassing 100 gigawatts of cumulative tracker product shipments since our founding. For the third consecutive quarter, we achieved a record orderbook of $2.5 billion, reflecting continued share gains and strong execution. During the quarter, we advanced our innovation strategy with the formal launch of DuraTrack D2S and our next-generation OmniTrack product offerings. We continued to build on that momentum in July with the announcement of our new 60° tracker capabilities and the launch of the ARRAY Atlas™ suite of foundation-to-tracker solutions. Our pending acquisition of Affordable Wire Management (AWM)(2), will further advance our balance of system strategy by adding high-margin cable management and safety products. We remain focused on expanding our ability to provide a more integrated, technically interoperable solution set for utility-scale solar customers,” said Chief Executive Officer, Kevin G. Hostetler.
Company Overview
Going public in October 2020, Array NASDAQ:ARRY is a global manufacturer of ground-mounting tracking systems for utility and distributed generation solar energy projects.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, Array grew its sales at a solid 9.2% compounded annual growth rate. Its growth beat the average industrials company and shows its offerings resonate with customers.
Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Array’s recent performance shows its demand has slowed as its annualized revenue growth of 3.7% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs.
This quarter, Array’s revenue fell by 5.6% year on year to $342.1 million but beat Wall Street’s estimates by 9%. Company management is currently guiding for a 18.7% year-on-year decline in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 32.4% over the next 12 months, an improvement versus the last two years. This projection is eye-popping and suggests its newer products and services will spur better top-line performance.
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Operating Margin
Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after procuring and manufacturing its products, marketing and selling those products, and most importantly, keeping them relevant through research and development.
Array was roughly breakeven when averaging the last five years of quarterly operating profits, one of the worst outcomes in the industrials sector. This result isn’t too surprising given its low gross margin as a starting point.
On the plus side, Array’s operating margin rose by 1.8 percentage points over the last five years, as its sales growth gave it operating leverage.
This quarter, Array generated an operating margin profit margin of 10.2%, down 2.6 percentage points year on year. Conversely, its gross margin actually rose, so we can assume its recent inefficiencies were driven by increased operating expenses like marketing, R&D, and administrative overhead.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Sadly for Array, its EPS declined by 3.1% annually over the last five years while its revenue grew by 9.2%. However, its operating margin actually improved during this time, telling us that non-fundamental factors such as interest expenses and taxes affected its ultimate earnings.
We can take a deeper look into Array’s earnings to better understand the drivers of its performance. A five-year view shows Array has diluted its shareholders, growing its share count by 22.6%. This dilution overshadowed its increased operational efficiency and has led to lower per share earnings. Taxes and interest expenses can also affect EPS but don’t tell us as much about a company’s fundamentals.
Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.
For Array, its two-year annual EPS declines of 6.9% show it’s continued to underperform. These results were bad no matter how you slice the data.
In Q2, Array reported adjusted EPS of $0.24, down from $0.25 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. Over the next 12 months, Wall Street expects Array’s full-year EPS to grow 41.5% from $0.59 to $0.84.
Key Takeaways from Array’s Q2 Results
It was good to see Array beat analysts’ EPS expectations this quarter. We were also excited its EBITDA outperformed Wall Street’s estimates by a wide margin. On the other hand, its revenue guidance for next quarter missed and its full-year revenue guidance fell slightly short of Wall Street’s estimates. Overall, this print was mixed. The stock remained flat at $5.65 immediately after reporting.
So should you invest in Array right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. .