APPENDIX A
Non-GAAP Financial Measures
Adjusted EBITDA
We define Adjusted EBITDA as net income (loss) to common shareholders plus (i) other (income) expense, net, (ii) gain on extinguishment of debts, net, (iii) foreign currency (gain) loss, net, (iv) preferred dividends and accretion, (v) interest expense, (vi) income tax (benefit) expense, (vii) depreciation expense, (viii) amortization of intangibles, (ix) amortization of developed technology and backlog, (x) equity-based compensation, (xi) change in fair value of contingent consideration, (xii) impairment of long-lived assets, (xiii) goodwill impairment, (xiv) certain legal expenses, (xv) acquisition-related expenses, (xvi) inventory valuation charge, and (xvii) other costs. For purposes of our 2025 LIP, Adjusted EBITDA excludes APA.
The following table reconciles Net income to Adjusted EBITDA:
| Net (loss) income | $(52,235) |
| Preferred dividends and accretion | 59,797 |
| Net (loss) income to common shareholders | $(112,032) |
| Other income, net | (10,860) |
| Gain on extinguishment of debts, net | (14,207) |
| Foreign currency (loss) gain, net | (2,042) |
| Preferred dividends and accretion | 59,797 |
| Interest expense | 27,331 |
| Income tax (benefit) expense | 23,018 |
| Depreciation expense | 6,094 |
| Amortization of intangibles | 23,674 |
| Amortization of developed technology and backlog | 17,520 |
| Equity-based compensation | 15,571 |
| Change in fair value of contingent consideration | 177 |
| Impairment of long-lived assets | — |
| Goodwill impairment | 102,560 |
| Certain legal expenses(a) | 1,232 |
| Acquisition-related expenses(b) | 17,959 |
| Inventory valuation charges(c) | 29,516 |
| Other costs(d) | 2,267 |
| Adjusted EBITDA | $187,575 |
| Realized benefits not in original 2025 LIP design | (9,668) |
| Adjusted EBITDA for 2025 LIP | $177,907 |
| (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. The appeal has been fully briefed, argued, and the Company is awaiting a decision, (ii) legal and success fees related to a regional tax dispute for a period prior to the acquisition of STI, and (iii) other litigation and legal matters. We consider these costs not representative of legal costs that we will incur from time to time in the ordinary course of our business. |
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| (b) | Represents acquisition-related expenses and fair value adjustments to inventory. |
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| (c) | Represents inventory valuation charge related to phase-out of STI H250® inventory that is not SmarTrack® compatible. |
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| (d) | For the twelve months ended December 31, 2025, represents $1.2 million organization restructuring and $1.1 million resolution of STI legacy VAT matter. |
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| ARRAY TECHNOLOGIES | A-1 | 2026 PROXY STATEMENT |
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Adjusted Net (Loss) Income
We define Adjusted net (loss) income as net (loss) income to common shareholders plus (i) amortization of intangibles, (ii) amortization of developed technology and backlog, (iii) amortization of debt discount and issuance costs, (iv) gain on extinguishment of debts, net, (v) Series A preferred stock accretion, (vi) equity-based compensation, (vii) change in fair value of contingent consideration, (viii) impairment of long-lived assets, (ix) goodwill impairment, (x) certain legal expenses, (xi) acquisition-related expenses, (xii) inventory valuation charge, (xiii) other costs, and (xiv) income tax (benefit) expense adjustments.
The following table reconciles Net income to Adjusted net (loss) income:
| Net (loss) income | $(52,235) |
| Preferred dividends and accretion | 59,797 |
| Net (loss) income to common shareholders | $(112,032) |
| Amortization of intangibles | 23,674 |
| Amortization of developed technology and backlog | 17,520 |
| Amortization of debt discount and issuance costs | 5,216 |
| Gain on extinguishment of debts, net | (14,207) |
| Series A Preferred stock accretion | 29,889 |
| Equity based compensation | 15,571 |
| Change in fair value of contingent consideration | 177 |
| Impairment of long-lived assets | — |
| Goodwill impairment | 102,560 |
| Certain legal expenses(a) | 1,232 |
| Acquisition-related expenses(b) | 18,055 |
| Inventory valuation charge(c) | 29,516 |
| Other costs(d) | 2,267 |
| Income tax expense adjustments(e) | (16,522) |
| Adjusted net (loss) income | $102,916 |
| (Loss) income per common share |
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| Basic | $(0.73) |
| Diluted | $(0.73) |
| Weighted average number of common shares outstanding |
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| Basic | 152,537 |
| Diluted | 152,537 |
| Adjusted net (loss) income per common share |
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| Basic | $0.67 |
| Diluted | $0.67 |
| Weighted average number of common shares outstanding |
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| Basic | 152,537 |
| Diluted | 153,692 |
| (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. The appeal has been fully briefed, argued, and the Company is awaiting a decision, (ii) legal and success fees related to a regional tax dispute for a period prior to the acquisition of STI, and (iii) other litigation and legal matters. We consider these costs not representative of legal costs that we will incur from time to time in the ordinary course of our business. |
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| (b) | Represents acquisition-related expenses and fair value adjustments to Inventory and Property, plant and equipment. |
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| (c) | Represents inventory valuation charge related to phase-out of STI H250® inventory that is not SmarTrack® compatible. |
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| (d) | For the twelve months ended December 31, 2025, represents $1.2 million organization restructuring and $1.1 million resolution of STI legacy VAT matter. |
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| (e) | Represents the estimated tax impact of all Adjusted Net Income add-backs, excluding those which represent permanent differences between book versus tax. |
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| ARRAY TECHNOLOGIES | A-2 | 2026 PROXY STATEMENT |
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