Equity-Based Compensation and Other Benefit Plans

12 Months Ended

Dec. 31, 2025

Share-Based Payment Arrangement [Abstract]

Equity-Based Compensation and Other Benefit Plans

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 restricted stock units (“RSUs”) to employees and board of director members. The fair value of the RSUs is determined using the market value of common stock on the grant date.

RSU activity under the 2020 Plan was as follows:


	Number of Shares	Weighted Average Grant Date Fair Value
Outstanding non-vested, December 31, 2024	2,648,161	$	10.97
Shares granted	3,049,243	$	6.36
Shares vested	(816,680)	$	12.73
Shares forfeited	(558,347)	$	9.47
Outstanding non-vested, December 31, 2025	4,322,377	$	7.58

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 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 assumptions were used in the Monte Carlo simulation for computing the grant date fair value of the PSUs issued during the years ended December 31, 2025 and 2024:


	2025		2024
Volatility	82	%	79	%
Risk-free interest rate	3.44	%	4.62	%
Dividend yield	—	%	—	%

PSU activity under the 2020 Plan was as follows:


	Number of Shares	Weighted Average Grant Date Fair Value
PSUs
Outstanding non-vested, December 31, 2024	924,241	$	12.76
Shares granted (1)	659,773	$	9.53
Shares vested	—	$	—
Shares forfeited	(73,166)	$	12.10
Outstanding non-vested, December 31, 2025	1,510,848	$	11.22

(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.

The aggregate fair value of RSUs and PSUs that vested during the years ended December 31, 2025, 2024 and 2023 was $5.4 million, $9.5 million and $15.9 million, respectively, which represented the market value of our common stock on the date that the RSUs or PSUs vested.

For the years ended December 31, 2025, 2024 and 2023, the Company recognized $15.6 million, $10.3 million and $14.6 million, respectively, in equity-based compensation, which is included in General and administrative expense in the consolidated statements of operations. These amounts include equity-based compensation related to RSUs, PSUs, and the Company’s Employee Stock Purchase Plan.

At December 31, 2025, the Company had $27.6 million of unrecognized compensation costs related to RSUs and PSUs, which are expected to be recognized over a weighted average of 1.9 years and 2.2 years, respectively.

Employee Stock Purchase Plan

The Company’s Compensation Committee approved the Employee Stock Purchase Plan (“ESPP”) in December 2021. The Plan allows employees to purchase shares at a 15% discount off the lower of the stock price at the beginning or ending of the six months window through payroll deductions. The plan is considered compensatory in nature and the Company recorded equity-based compensation expense on the plan beginning in 2022. During the years ended December 31, 2025, 2024 and 2023, the Company recorded $0.2 million, $0.2 million, and $0.1 million, respectively, in equity-based compensation related to the Employee Stock Purchase Plan.

Deferred Compensation Plan

On May 21, 2024, the Human Capital Committee (the “Committee”) of the Board of Directors (the “Board”) of Array Technologies, Inc. adopted the Array Tech, Inc. Deferred Compensation Plan (the “Plan”). The Plan is a non-qualified deferred compensation plan intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”). Participation in the Plan is voluntary and is currently available to U.S. employees of the Company and its subsidiaries at the level of Vice President and above. Deferred compensation plan liabilities at December 31, 2025 were immaterial.

401(k) Plan

We have a defined contribution plan (“401(k) Plan”) which allows eligible employees to contribute up to 75% of their compensation up to the Internal Revenue Service maximum. We match each employee’s deferrals (contributions) at 100% for the first 3% and 50% of the fourth and fifth percentages of compensation and may make additional contributions at our discretion. Employees are immediately vested in the contributions made by us. Our contributions to the 401(k) Plan were $2.1 million, $2.0 million, and $1.9 million for the years ended December 31, 2025, 2024 and 2023, respectively, and are recorded in cost of revenue and general and administrative expense. We have made no discretionary contributions to the 401(k) Plan to date.