Phelps Morris: Hey, Donovan, it Phelps. Yeah. So as, as Sean talked about when we talked about guidance in terms of q1, it is a relatively narrow range, we’re feeling very good about the bookings we’ve had in q4, obviously to your point where a project based business we’re supporting projects if there’s a delay of time in any individual products that can delay for revenue recognition. The other thing, that we’re really excited about for this quarter is, is the guide in terms of the gross margin range it’s two to 8% in the positive territory. Which, what you’re seeing here is really a lot of the work and the legacy products that we had last year have rolled off and we’re starting to see the new products take advantage of the DTV initiatives, et cetera.
And so that we think is a very important thing for us on the margin side. But you’re exactly correct. I mean, the ramp of the revenue on a, for on a quarter-over-quarter basis will be continued upon projects. And really the, the people that we’ve had in our backlog, how quickly they can get modules, it’s going to be the really the pivot point for us to recognize revenue as quickly as possible. And maybe Patrick, you want to add on to that?
Patrick Cook: Yeah, I think the one thing too Donovan to focus on is just the growth kind of sequentially, the last two earnings calls of the, the, our backlog, that’s not subject to UFLPA review. we talked about what we were able to achieve in, in kind of the, in our Q3 earnings call. Obviously we, we grew backlog by another $240 million in, you know the vast majority of that is not subject to UFLPA review. And so what we’ve talked about is those have a shorter cycle time to, to revenue. So we’ve grown our backlog to, kind of historical highs or, record highs. But the vast, or we’re getting a majority of the last two quarters of that have come from non UFLPA related zones. And so that time and cycle the revenue is ultimately faster cause you’re not subject to when or the availability of modules, right?
Phelps Morris: So if you look at the, the total backlog and aggregate it, one third of it is now nons subject to UFLPA, right? And so that’s, as Patrick alluded to, that’s a very big pivot for us. And that’s where the focus of the sales team is. And they’ve done a phenomenal job of, billing backlog with international projects for solar projects or, certain developers are getting crystal and modules and availability in the us and that’s going to represent that as well.
Operator: Thank you. One moment while we prepare for the next question, and the next question will be coming from Jeff Osborne of Cowen and your line is open.
Jeff Osborne: Hey, good morning. Just a couple questions, I had one clarification for a comment that Patrick made a, you made a, a reference to two years from a international presence to revenue. Was that from a sales perspective or were you trying to say once something’s added to backlog, it takes two years to record revenue on that?
Patrick Cook: No, sorry, sorry, Jeff. So appreciate the, the clarifying question. That’s when I say two years, really when you put the boots on the ground and enter a new geography from time to ultimately revenue because it takes time to, to build the relationships, get certified, build, everything around kind of the, the product portfolio and backlog. So we’ve been in these geographies for, for two plus years now, and we’re seeing the benefits of that once we get the PO, it’s really, pretty quick to, to, to revenue.So no, it’s not
Jeff Osborne: Nine months from PO to revenue for these international
Patrick Cook: In some of the international locations. It’s going to be shorter than that.
Jeff Osborne: Okay, good to hear
Patrick Cook: And then the ones where, ones where we’ve got a footprint already, right? So if you look at Australia, for example, where we’ve done 25 projects, you get a purchase order, you’re recognizing revenue in accordance with kind of our, our lead times Here’re talking about a, a period of, of, of, of weeks to, to a few months.
Jeff Osborne: Got it. That’s helpful. And then with the JV, how, how do we think about CapEx for, for 2023? Is there any capital that you’re committing to that, or is that all through your third party in the Houston scenario?
Patrick Cook: So in the, in the partnership, we are making a what I’ve been characterized as a modest contribution as is the partner. And and then we expect to, to start and ramp up the facility beginning in the back half of this year.
Sean Hunkler: Yeah, Jeff, in terms of context, I just think mid to low, millions of dollars. It’s not a massive capital investment that will go into an existing facility. And, we’re, we’re going to take 45% of the JV as we disclosed previously.
Jeff Osborne: Got it. And is that all for the Texas area? Would you need one in the Midwest as well?
Sean Hunkler: No, we, we can, we can source out of the Texas facility for all of our needs at the current time, and then we’d have the ability in future phases if we wanted to, that we could add additional capacity at the existing location.
Jeff Osborne: Got it. And then the last one I had is just if you could give us a context with the, the nice backlog growth, what, why you feel you’re winning. Obviously you’ve had design to value, it’s great to see the margin guidance, but is it, something around labor rates and, and install time, or is it price, is it availability? Just any context would be helpful?
Patrick Cook: Yeah, so we, we be, we continue to see very positive feedback on the constructability aspect. And we really do feel like we have the, the, the best 2P tracker product out there, and we continue to hear from our customers. And, and there’s a lot of excitement as well, given the availability of First Solar modules that we now have a first solar solution. People also are excited about the expansion of our product portfolio to include now a, 1P product as well.
Phelps Morris: I’m sorry, Patrick, I didn’t mean to interrupt. I think Sean’s exactly right. I mean, I think if you could break it down, I think one is the constructability advantage, and especially in kind of inflationary environments, high labor cost rates and shortage of labor. that, value gets exacerbated. And customers really look at ways to shape cost and, shape labor. And certainly, the construction times with our, with our two piece solution ultimately does that, the other part that we hear a lot is customer service. If you look at kind of our, legacy team we, we do have the mindset of a developer and our ability to engage with our developers and EPCs and kind of bring that mindset to the, to the tracker. We’re viewed as more than just kind of a rafting partner.
We’re really viewed as a strategic partner and someone who helps bring solutions to the table. And if I hear, more often than not why we win projects, it’s really kind of centered around customer service. And obviously you gotota have a competitive, competitive price. And, and we’re able to compete against all of our competitors. And obviously with our gross margin guide you can see that we’re, we’re able to do that profitably as well.
Operator: Thank you. One moment while we prepare for the next question. Our next question is coming from Pavel Molchanov of Raymond James. Your is open.
Pavel Molchanov: Thanks for taking the question on the Alpha Steel joint venture. Just to clarify, will this be contributing to revenue or is it purely going to reduce your cost of goods? Well, how, how does the accounting work on that?
