Array Technologies, Inc.

12. Commitments and Contingencies

Legal Proceedings

The Company, in the normal course of business, is subject to claims and litigation. The Company reviews the status of each matter and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, the Company would accrue a liability for the estimated loss.

Plymouth Class Action

On May 14, 2021, a putative class action (the “Plymouth Action”) was filed in the U.S. District Court for the Southern District of New York (the “District Court”) against the Company and certain officers and directors alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 10b-5, promulgated thereunder, and Sections 11, 12(a)(2) and 15 of the Securities Act of 1933, as amended (the “Securities Act”). On June 30, 2021, a substantially similar second putative class action was filed in the Southern District of New York against the Company and certain officers and directors alleging violations of Sections 10(b) and 20(a) of the Exchange Act, and Rule 10b-5, promulgated thereunder, and Sections 11 and 15 of the Securities Act, which was consolidated with the Plymouth Action. A consolidated amended class action complaint was filed on December 7, 2021.

All defendants in the Plymouth Action, including the Company, moved to dismiss the consolidated amended complaint. On May 19, 2023, the court granted the Company’s motion to dismiss and, on July 5, 2023, denied a request from the Plymouth Action plaintiffs for leave to amend the consolidated amended complaint and dismissed the Plymouth Action in its entirety with prejudice. On August 4, 2023, the lead plaintiffs filed a notice of appeal of the court’s dismissal of the consolidated amended complaint to the U.S. Court of Appeals for the Second Circuit. After full briefing, the court of appeals heard oral argument on June 26, 2024. On March 24, 2026, the Second Circuit issued a summary order affirming the District Court's dismissal of the Plymouth Action with prejudice.

Derivative Complaints

Southern District of New York

On July 16, 2021, a verified derivative complaint was filed in the Southern District of New York against certain officers and directors of the Company. The complaint alleged: (i) violations of Section 14(a) of the Exchange Act for misleading proxy statements; (ii) breach of fiduciary duty; (iii) unjust enrichment; (iv) abuse of control; (v) gross mismanagement; (vi) corporate waste; (vii) aiding and abetting breach of fiduciary duty; and (viii) contribution under Sections 10(b) and 21D of the Exchange Act.

On July 30, 2021, a second verified derivative complaint was filed in the Southern District of New York against certain officers and directors of the Company. The complaint alleged: (i) violations of Section 14(a) of the Exchange Act for causing the issuance of a false/misleading proxy statement; (ii) breach of fiduciary duty; and (iii) aiding and abetting breaches of fiduciary duty.

On August 24, 2021, the Southern District of New York derivative actions were consolidated, and the court appointed co-lead counsel. On April 28, 2026, the District Court entered a stipulation and order submitted by the parties voluntarily dismissing the New York derivative action in light of the Second Circuit Court of Appeals’ affirmance of the dismissal of the Plymouth Action with prejudice.

Delaware Court of Chancery

On August 3, 2022, a verified derivative complaint was filed in the Court of Chancery of the State of Delaware against certain officers and directors of the Company, asserting claims for: (i) breach of fiduciary duty; and (ii) unjust enrichment. The derivative plaintiff in this action seeks: an award of compensatory damages in favor of the Company; restitution from the defendants and disgorgement of profits, benefits, and other compensation obtained by the defendants; an order directing the Company to reform its corporate governance and internal procedures; equitable or injunctive relief as permitted by law and equity; and the costs and disbursements of the action, including attorneys’ fees.

On August 11, 2022, a second verified derivative complaint was filed with the Court of Chancery against certain officers and directors of the Company, asserting claims for: (i) breach of fiduciary duty; (ii) aiding and abetting breaches of fiduciary duty; (iii) waste of corporate assets; (iv) unjust enrichment; (v) insider selling; and (vi) aiding and abetting insider selling. The derivative plaintiff in this action seeks: declaratory relief; an award of compensatory damages in favor of the Company; disgorgement of profits obtained from certain sales of Company stock by certain of the defendants; establishment of a constructive trust over certain amounts obtained by certain of the defendants; and the costs and disbursements of the action, including attorneys’ fees.

On September 2, 2022, the derivative cases with the Court of Chancery were consolidated and the court appointed co-lead counsel. The consolidated cases remain stayed pending the outcome of the appeal of the Plymouth Action.

Sterling and Wilson Solar Solutions, Inc. (“SWSS”) vs. Array Technologies, Inc.

On September 16, 2025, Sterling & Wilson Solar Solutions Inc. (“SWSS”) served an arbitration demand (the “Demand”) on the Company asserting contractual and negligence claims purportedly arising out of the Company’s provision of goods for use in a solar project in Bickleton, Washington. The Company filed its Answer on October 30, 2025, and asserted defenses, including that (i) SWSS’s claims are barred by applicable contractual limitations provisions and statutes of limitations, and (ii) are otherwise unsupported. In February 2026, SWSS filed a statement of claims and damages, specifying that it is seeking contractual damages from the Company, and further adding a claim seeking indemnification by the Company for any damages incurred by SWSS relating to counterclaims brought against SWSS in another litigation concerning the same solar project. The Company is not a party to that litigation. The amount of potential damages to SWSS, if any, is unknown because the Company understands the underlying litigation to be in its early and preliminary stages. On March 5, 2026, the Company sought leave to file a dispositive motion concerning all of SWSS’ claims. On March 24, 2026, that request was denied, but the arbitration panel noted that it would consider additional requests at a later date. On April 29, 2026, the parties requested that the panel stay the arbitration pending the resolution of the underlying litigation. The Company is vigorously defending the arbitration.

The Company has not recorded any material loss contingency in the condensed consolidated balance sheets as of March 31, 2026.

The Company is party to various other legal proceedings, claims, governmental and/or regulatory inspections, inquiries and investigations arising out of the ordinary course of its business. The Company believes that there are no other proceedings or claims pending against it, the ultimate resolution of which could have a material adverse effect on its financial condition or results of operations. In all cases, at each reporting period, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under ASC 450, Contingencies (ASC 450). Legal costs are expensed as incurred. It is possible that future results for any particular quarter or annual period may be materially affected by changes in our assumption or the effectiveness of the Company’s strategies relating to these proceedings.

Contingent Consideration

Tax Receivable Agreement

Concurrent with the Former Parent’s acquisition of Array Technologies Patent Holdings Co., LLC on July 8, 2016, the Company’s operating subsidiary, Array Tech, Inc. (f/k/a Array Technologies, Inc.), entered into a tax receivable agreement (the “TRA”) with the former majority stockholder of Array Tech, Inc. The TRA is valued based on the future expected payments under the agreement. The TRA provides for the payment by Array Tech, Inc., to the former owners for certain federal, state, local and non-U.S. tax benefits deemed realized in post-closing taxable periods by Array Tech, Inc., from the use of certain deductions generated by the increase in the tax value of the developed technology. The TRA is accounted for as contingent consideration and subsequent changes in fair value of the contingent liability are recognized in contingent consideration on the condensed consolidated statements of operations. As of March 31, 2026 and December 31, 2025, the fair value of the TRA was $5.8 million and $8.3 million, respectively.

Estimating the amount of payments that may be made under the TRA is by nature imprecise. The significant fair value inputs used to estimate the future expected TRA payments to the former owners include the timing of tax payments, a discount rate, book income projections, timing of expected adjustments to calculate taxable income and the projected rate of use for attributes defined in the TRA.

Payments made under the TRA consider tax positions taken by the Company and are due within 125 days following the filing of the Company’s U.S. federal and state income tax returns under procedures described in the agreement. The current portion of the TRA liability is based on tax returns. The TRA will continue until all tax benefit payments have been made or the Company elects early termination under the terms described in the TRA.

The following table summarizes the activity related to the estimated TRA liability (in thousands):

The TRA liability requires significant judgment and is classified as Level 3 in the fair value hierarchy.

As discussed in Note 3 – Acquisition, the Purchase Agreement includes an earnout provision pursuant to which Seller may be granted shares of the Company’s common stock, or equivalent cash value at the Buyer’s discretion, based upon APA’s achievement of certain financial performance targets during thethree-year period ending September 30, 2028 (the “Earnout Consideration”). The maximum number of shares payable as Earnout Consideration is 4,686,530 shares of common stock, which was determined by dividing $40 million by the volume weighted average price of the Company’s common stock for the 10 trading days immediately following the Closing Date. The number of shares payable will be subject to reduction if the cumulative value of the Earnout Consideration earned (measured on each date such shares are issued) exceeds $90 million. The Purchase Agreement provides that, to the extent the issuance of any Earnout Consideration or Deferred

Consideration Shares would require stockholder approval under Nasdaq Listing Rule 5635(a), the Company will pay cash in lieu of issuing such shares, unless such stockholder approval has been obtained. The principal Seller continues to assume the managerial responsibilities of APA.

Upon the Closing Date, the Earnout Consideration was accounted for as contingent consideration, and the fair value is estimated each reporting period. As of March 31, 2026, the Earnout Consideration was estimated to have a fair value of approximately $16.4 million using a Monte-Carlo simulation method. Changes in fair value of the contingent liability are recognized in Change in fair value of contingent consideration in the condensed consolidated statements of operations. Estimating the amount of payments that may be made under the Earnout Consideration is by nature imprecise. The significant fair value inputs used to estimate the future expected Earnout Consideration payments to Seller include a discount rate, earnings forecasts, and actual and estimated future volatility in the Company’s stock price.

The following table summarizes the activity related to the estimated Earnout Consideration liability (in thousands):

The Earnout Consideration liability requires significant judgment and is classified as Level 3 in the fair value hierarchy.

Surety Bonds

The Company is required to provide surety bonds to various parties as required for certain transactions initiated during the ordinary course of business to guarantee the Company’s performance in accordance with contractual or legal obligations. These off-balance sheet arrangements do not adversely impact the Company’s liquidity or capital resources. As of March 31, 2026, the Company had surety bonds outstanding in the total amount of $230.8 million.

13. Fair Value of Financial Instruments

The carrying values and estimated fair values of the Company’s debt financial instruments were as follows (in thousands):

The fair value of the Convertible Notes is estimated using Level 2 inputs, as they are not registered securities nor listed on any securities exchange but may be traded by qualified institutional buyers.

Other Debt with an aggregate carrying value of $9.5 million, consists of variable and fixed rate obligations. The carrying value of these variable rate obligations approximates fair value due to the variable nature of the interest rates.

14. Equity-Based Compensation

2020 Equity Incentive Plan

On October 14, 2020, the Company’s 2020 Equity Incentive Plan (the “2020 Plan”) became effective. The 2020 Plan authorized 6,683,919 new shares, subject to adjustments pursuant to the 2020 Plan.

Restricted Stock Units

Pursuant to the 2020 Plan, the Company grants time-based restricted stock units (“RSUs”) to employees and members of the Company’s board of directors. The fair value of the RSUs is determined using the market value of the Company’s common stock on the grant date and is recognized on a straight-line basis over the vesting term of the awards.

RSU activity under the 2020 Plan was as follows:

Performance Stock Units

The Company has granted performance-based restricted stock units (“PSUs”) to certain employees. The PSUs generally cliff vest after three years and upon meeting certain revenue and adjusted EPS targets. The PSUs also contain a modifier based on the total stock return compared to a certain index which modifies the number of PSUs that vest. PSUs were valued using a Monte-Carlo simulation method on the date of grant based on the U.S. Treasury Constant Maturity rates, and the assigned fair value on grant date is recognized on a straight-line basis over the vesting term of the awards. The probability of the awards meeting the performance related vested conditions is not included in the grant date fair value, but rather is estimated quarterly and the expense recognition is trued-up accordingly upon any probability to vest revision.

PSU awards that were awarded during 2025 and 2026 do not yet have a grant date because not all of the performance criteria is known at inception. These awarded shares have been included in Shares granted in the table below. Until the grant date is established, these awards are remeasured at fair value each reporting period using a Monte Carlo simulation, and the associated expense is recognized and trued-up quarterly based on the updated fair value and estimated probability of vesting.

The following weighted-average assumptions were used in the Monte Carlo simulation for computing the fair value of the PSUs issued during the three months ended March 31, 2026 and 2025:

PSU activity under the 2020 Plan was as follows:

(1)Number of PSUs granted is based on the attainment level of performance metric(s), by key executive officers and employees of the Company, estimated to be probable at the grant date. The actual number of shares to be issued will depend on the relative attainment of the performance metrics.

For three months ended March 31, 2026 and 2025, the Company recognized $3.9 million and $2.8 million, respectively, in equity-based compensation costs, which is included in General and administrative expense in the condensed consolidated statements of operations. These amounts include equity-based compensation related to RSUs, PSUs, and the Company’s Employee Stock Purchase Plan.

At March 31, 2026, the Company had $37.3 million of unrecognized compensation costs related to RSUs and PSUs, which are expected to be recognized over 2.2 years and 2.5 years, respectively.

15. Supplemental Cash Flow Information

Supplemental cash flow information consists of the following (in thousands):

16. Segment Reporting

ASC Topic 280 Segment Reporting establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The CODM is the Chief Executive Officer of the Company.

The Company works with customers to design a solar array to achieve the project’s desired power output. The Company provides the solar tracking system components, which include standard and nonstandard parts. The Company delivers the fully functioning tracker systems for the project sites and provides commissioning services. Although the solar array may use different components and technology depending on the geography and type of system, the Company conducts its operations in the United States and internationally, primarily in Spain and Brazil and is expanding into other international markets through STI Operations.

The Company hastwo separate operating segments, Array Legacy Operations and STI Operations, which are also reportable segments. Array Legacy Operations consists primarily of amounts earned from the design and delivery of solar arrays in the United States, and STI Operations consists primarily of amounts earned from the design and delivery of solar arrays outside of the United States. APA is a component of the Array Legacy Operations reportable segment.

The Company’s CODM assesses the performance of each operating segment by using gross profit. This measure is also predominantly used in the annual budget and forecasting process. The CODM primarily uses the annual operating plan and the monthly financial results for Array Legacy Operations and STI Operations when making decisions about the allocation of operating and capital resources to each segment.

The following tables summarize the financial results by segment during the periods presented (in thousands):

(1)Includes 45X benefits realized.

(2)Other is primarily comprised of outbound freight and certain overhead costs. Outbound freight for the three months ended March 31, 2026 and 2025 for Array Legacy Operations was $9.5 million and $9.9 million, respectively.

17. Related Party Transactions

In connection with the acquisition of APA, the Company hasfour lease agreements with related parties owned by certain members of APA's management team.

Expenses related to these operating lease agreements are allocated based on usage to Cost of product and service revenue and General and administrative expenses in the consolidated statements of operations. Total costs related to these operating lease agreements were $0.7 million for the three months ended March 31, 2026.