Shoals Technologies Group Inc. (SHLS) witnessed a sharp decline of 5.04% in its stock price on Wednesday, February 26, 2025, as the company reported weaker financial results for the full year 2024 and provided a cautious outlook for 2025, reflecting the ongoing challenges in the solar industry.

The company, which supplies products and services for solar energy projects, reported a 18% year-over-year decline in revenue to $399.2 million for 2024. Net income fell by 40% to $24.1 million, and adjusted EBITDA margin contracted to 24.7% from 30.0% in 2023. The results were impacted by project delays caused by regulatory uncertainties, labor shortages, and supply chain disruptions.

In the earnings conference call, CEO Brandon Moss acknowledged the challenging environment faced by the company in 2024, stating, "A rapidly shifting political stage, labor and equipment availability, and regulatory and permitting delays all contributed to that challenging backdrop." However, he expressed optimism for 2025, citing improved market conditions and a strong order book.

For 2025, Shoals Technologies provided revenue guidance in the range of $410 million to $450 million, representing modest growth compared to 2024. The company expects adjusted EBITDA to range between $100 million and $115 million. Management attributed the lighter first half of 2025 to project timelines and anticipated a stronger second half.

Dominic Bardos, CFO of Shoals Technologies, highlighted the ongoing pricing pressure and competitive environment as factors impacting the company's margins. However, he expressed confidence in the company's ability to improve margins through productivity initiatives and product mix optimization.

Investors also closely watched the updates on the company's ongoing legal battle with Voltage over patent infringement claims. While the initial ruling went against Shoals Technologies, the company has filed new cases and appealed the decision, vowing to protect its intellectual property.