• Revenue: $107 million for Q4 2024, a decline of 18.0% year-over-year.
• Bookings: $145 million in new projects for Q4 2024.
• Total Backlog and Awarded Orders (BLAO): $635 million as of December 31, 2024.
• Adjusted Gross Profit Percentage: 37.6% for Q4 2024.
• Adjusted EBITDA: $26.4 million for Q4 2024, representing 24.7% of revenue.
• Net Income: $7.8 million for Q4 2024.
• Adjusted Net Income: $14.1 million for Q4 2024.
• Cash Flow from Operations: $14.0 million for Q4 2024.
• Capital Expenditures: $1.5 million for Q4 2024.
• Full Year Revenue: $399 million for 2024, an 18.4% decline from 2023.
• Full Year Adjusted Gross Profit Percentage: 39% for 2024.
• Guidance for Q1 2025 Revenue: $70 million to $80 million.
• Guidance for Full Year 2025 Revenue: $410 million to $450 million.
• Guidance for Full Year 2025 Adjusted EBITDA: $100 million to $115 million.
• Guidance for Full Year 2025 Cash Flow from Operations: $30 million to $45 million.
• Guidance for Full Year 2025 Capital Expenditures: $25 million to $35 million.

• Warning! GuruFocus has detected 5 Warning Sign with SHLS.

Release Date: February 25, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Shoals Technologies Group Inc (NASDAQ:SHLS) delivered strong fourth-quarter revenue of $107 million, at the high end of their expected range.
• The company reported robust bookings of $145 million in new projects, resulting in a total backlog and awarded orders of $635 million.
• Shoals Technologies Group Inc (NASDAQ:SHLS) introduced over a dozen new products in 2024, addressing real business problems faced by customers.
• The company is expanding into new market segments like CC&I and BESS, and winning projects in international markets.
• Shoals Technologies Group Inc (NASDAQ:SHLS) is consolidating small factories into a state-of-the-art facility in Tennessee, which is expected to drive increased productivity through automation.

Negative Points

• Adjusted gross profit percentage in the fourth quarter was softer than expected at 37.6%, due to a competitive environment and product mix.
• The company experienced an 18.4% decline in full-year revenue from 2023, driven by widespread project delays in the industry.
• Net income for the fourth quarter decreased to $7.8 million compared to $16.6 million in the prior year period.
• The ongoing litigation with Voltage and the ITC case has been a source of uncertainty, with the ITC not upholding the ALJ's initial determination.
• Shoals Technologies Group Inc (NASDAQ:SHLS) anticipates a lighter first half of 2025, with only 40% of revenue expected in the first half, requiring higher working capital investment.

Q & A Highlights

Q: Can you provide more context around the pricing dynamics and competition? Is the pricing pressure mainly due to a specific issue or is it more widespread? A: The pricing environment is influenced by market dynamics. We are trying to attract new customers by offering competitive pricing, which may involve some pricing adjustments. While we don't guide specifically on gross margin, we expect long-term performance in the 40% range. (Brandon Moss, CEO)

Q: How are you gaining greater visibility into project delivery schedules, and why do you expect fewer project pushouts in 2025 compared to 2024? A: We are engaging more deeply with customers and using a CRM tool to track project components and schedules. Conversations with customers and peers suggest improving market dynamics in 2025, giving us cautious optimism. (Brandon Moss, CEO)

Q: Can you discuss the overall bidding activity since the ITC reversal in January? Are new customers reversing course, or is pricing helping retain them? A: Our order book remains strong, and we are seeing greater quality and diversity. We continue to attract new customers and are excited about the progress in diversifying our order book. (Brandon Moss, CEO)

Q: Could you provide more color on the cash from operations guidance for 2025? Is the timing of receivables affecting cash flow? A: The timing of receivables is indeed affecting cash flow, with a lighter first half and a ramp-up in the second half. This will consume working capital, pushing cash collections into the latter part of the year. (Dominic Bardos, CFO)

Q: What are the implications of tariffs on your numbers, and how sensitive is your 2025 guidance to project pushouts? A: As a domestic manufacturer, we are well-positioned to handle tariffs. If project pushouts are similar to 2024, we would be at the lower end of our guidance. If fewer pushouts occur, we could be at the higher end. (Brandon Moss, CEO; Dominic Bardos, CFO)

For the complete transcript of the earnings call, please refer to the full earnings call transcript.