Array Technologies: Scaling to Capture a $23 Billion Solar Tracker Market

The stage is set for a massive expansion in solar energy, and Array Technologies is positioned to capture a significant share. The global market for solar trackers-the systems that follow the sun to maximize panel output-is projected to more than double, growing from about $10.3 billion in 2024 to $22.9 billion by 2029 at a robust compound annual rate. This represents a clear, multi-year tailwind for the company's core business.

Array is a major player in this race, recognized as the second-largest solar tracking company globally and the third-largest in the United States. Its competitive edge is underscored by a record orderbook of $2.2 billion, providing a strong foundation for future revenue. This backlog signals immediate demand and validates the company's technology and market reach.

The near-term catalyst is particularly powerful. The U.S. utility-scale solar sector is on a tear, with developers planning to add 43.4 gigawatts of new capacity in 2026. That figure represents a 60% increase over last year's record. This surge, part of a broader 86-gigawatt expansion of U.S. utility-scale generating capacity, creates a massive, immediate demand tailwind for trackers. For Array, this isn't just a growing market; it's a market that is accelerating right now, offering a prime opportunity to scale its operations and solidify its position.

Scalability of the Business Model and Technological Edge

Array's ability to scale profitably is now under the microscope. The company demonstrated remarkable top-line growth in 2025, with revenue surging 40% year-over-year to nearly $1.3 billion. This acceleration, which outpaced the broader industry's 35% volume growth, is backed by a record $2.2 billion orderbook.

The setup for 2026 is clear: management has guided revenue to a range of $1.4 to $1.5 billion, implying continued high growth. The challenge is to achieve this while navigating cost pressures and maintaining margins.

The scalability of the model hinges on technological differentiation. Array's core product, the DuraTrack® system, features a patented wind-stow function that automatically repositions trackers during high winds. This isn't just a convenience; it directly addresses a critical industry vulnerability. A recent report found that the average power loss across U.S. solar assets is 5.08%, a figure that has more than doubled in five years. For a utility-scale site, this loss can cost up to $5,070 per MW annually. By minimizing downtime and physical damage, Array's technology offers a quantifiable yield advantage, which is a powerful selling point as developers seek to maximize returns from their projects.

Financially, the path to scaling profitably involves a trade-off. While revenue is accelerating, gross margins have faced headwinds. The company's adjusted gross margin for 2025 was 27%, but this reflects a decline from prior benefits. Management's guidance for 2026 calls for margins to hold in a range of 26% to 27%, indicating that cost management will be paramount. The company is also operating in a competitive environment with rising commodity costs and tariff impacts. The recent integration of the APA acquisition has expanded its product portfolio and contributed to the orderbook, but it also adds complexity to the execution challenge.

The bottom line is that Array has the demand and the technology to scale. The real test is operational discipline. The company must leverage its record orderbook to drive volume while simultaneously controlling input costs and manufacturing efficiency to protect its margin trajectory. Success here will determine whether the company can convert its massive market opportunity into sustained, high-quality profit growth.

Forward-Looking Catalysts and Risks

The path to sustained dominance now hinges on execution. The primary catalyst is clear: converting the record $2.2 billion orderbook into revenue while navigating the 2026 guidance. Management has set a target of $1.4 to $1.5 billion in revenue for the year, which implies continued high growth. The real test is the margin. The company has guided adjusted gross margin to hold in a range of 26% to 27% for 2026. This is a critical benchmark. It must be maintained even as the company scales production to fulfill its backlog, a task complicated by the integration of the APA acquisition and a competitive landscape with rising input costs.

The major risk is the cost and competitive environment. While the orderbook is a vote of confidence, the path to profit is fraught with pressure. The company's adjusted gross margin for 2025 was 27%, but that figure already reflects a decline from prior benefits. The guidance for 2026 suggests the company expects to hold the line, which will require exceptional operational discipline. The recent integration of APA has expanded the product portfolio, but it also adds complexity. More broadly, the company operates in a sector where rising commodity costs are a persistent headwind, directly impacting gross margins and the company's ability to maintain pricing power.

For investors, the key signals to watch are quarterly. The book-to-bill ratio will be a leading indicator of demand strength and sales execution. A ratio consistently above 1.0 would confirm the orderbook is being replenished, a positive sign for future revenue visibility. More importantly, any deviation from the 26% to 27% adjusted gross margin guidance will be a major red flag. It would signal that cost pressures are overwhelming the company's ability to control its bottom line, threatening the quality of its growth. The company has guided for a roughly 40:60 revenue split between the first and second half of 2026, which introduces seasonal variability. Any update to this split or the full-year guidance, especially on the margin front, will be a direct read on operational efficiency and market conditions.