Why R&D Spending Is Central to ARRY's Long-Term Profitability

Array Technologies ARRY places strong emphasis on research and development (R&D) as a fundamental pillar of its long-term growth and competitiveness. Being a leading global provider of solar tracking technology, continuous R&D makes its existence relevant.  A strong focus on technological innovation in both hardware and software provides Array Technologies with meaningful competitive differentiation. 

In the solar tracker industry, improvements in efficiency, cost, and reliability directly impact overall project economics. Ongoing R&D investment allows Array Technologies to enhance product performance through advances in tracker design, materials and mechanical architecture, thus boosting energy yield, durability and ease of installation. Even modest gains in energy capture can significantly improve a project’s return on investment. 

By continually refining platforms such as DuraTrack and OmniTrack, Array Technologies delivers higher output and a lower levelized cost of energy (LCOE). R&D also drives digital innovation, with optimization algorithms and intelligent controls improving performance in varying weather, shading and terrain conditions, thus extending value beyond hardware capabilities alone.

R&D costs are a subset of ARRY’s total engineering spend. Its R&D expenses were $6.7 million in 2024 and $7.2 million in the first nine months of 2025.

R&D is not discretionary for Array Technologies—it is a strategic necessity. It is the engine that enables cost efficiency, pricing power, product differentiation and margin expansion, and helps it capitalize on global solar growth, positioning it for sustained long-term value creation.

What About Peers?

R&D expense is critical to the long-term competitiveness and profitability of ARRY’s peers, Sunrun RUN and First Solar FSLR.

For Sunrun, continued investment in software platforms, storage integration and grid services enhances customer value, improves system performance and supports recurring revenue growth in a competitive residential solar market. 

For First Solar, sustained R&D advances thin-film module efficiency, expands manufacturing capabilities and lowers production costs, reinforcing its technological leadership. 

By prioritizing innovation, Sunrun and First Solar enhance pricing power, widen margins, and build durable competitive advantages. Both Sunrun and First Solar rely on disciplined R&D to stay ahead in the rapidly evolving clean energy industry.

ARRY’s Price Performance

Shares of Array Technologies have gained 95%  in the past six months, outperforming the industry.

ARRY’s Discounted Valuation

The stock is undervalued compared with its industry. It is currently trading at a price-to-earnings multiple of 12.17, lower than the industry average of 18.43.

Estimate Movement for ARRY

The Zacks Consensus Estimate for ARRY’s first-quarter 2026 EPS has moved 1 cent north in the past 30 days. The same for 2026 has moved 3 cents south in the same time frame.

The consensus estimates for ARRY’s 2026 revenues and EPS indicate year-over-year increases. 

ARRY stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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