Shoals posts 48% year-over-year growth in record quarter


Shoals Technologies Group, a provider of electrical balance of system (EBOS) solutions, announced its Q3 2023 earnings, posting a record quarter with $132.2 million in revenue. This represents a year-over-year growth of 48% for Q3. The revenue total came in slightly below Wall Street expectations.

Backlog and newly awarded orders reached $633.3 million, growing 34% year-over-year. Adjusted EBITDA grew 81% year-over-year to $48 million. Shoals said its growth was primarily driven by domestic demand for solar EBOS.

Shoals provides big lead assemblies, interconnection components, combiner boxes, transition boxes, service and design and more for solar projects.

Despite the record quarter, wire insulation shrinkback expenses led to lowered gross margins and a net loss of $9.8 million. Its stock share price is down roughly 15% in trading sessions following the report.

“While the domestic utility scale solar market is currently experiencing slower growth, we believe our strong value proposition and the emerging strength from our international business will continue to drive order growth,” said Brandon Moss, chief executive officer, Shoals. “We are pleased that international now represents more than 10% of our backlog and awarded orders.”

Shoal’s balance sheet showed total assets of $840.1 million, with current assets at $214.2 million. The company’s total liabilities totaled $315.5 million, while stockholders’ equity was $524.6 million.

The company noted the complete ramp-up of its third Tennessee manufacturing facility. The Tennessee facilities have added 15 GW of manufacturing capacity to its 2022 year-end total of 20 GW. Shoals said its total manufacturing capacity is now 35 GW, with the ability to expand to 42 GW at existing sites. At current capacities, Shoals can serve demand well into 2025, said the company.

The company had $50.2 million in wire insulation shrinkback expenses. Shoals said it was able to offset some of the cost impact with lower raw materials costs, increased leverage on fixed costs, and operational efficiencies.

In-quarter, Shoals filed a lawsuit against Prysmian Cables and Systems USA, seeking damages for the wire shrinkback issue.

Shoals is seeking compensatory and punitive damages, recovery of all costs and expenses incurred by the Company in connection with the identification, repair and replacement of the defective wire, and other legal and equitable relief. The outcome of this case and potential impact on financial results remains uncertain.

For full-year 2023, Shoals Technologies Group posted the following guidance:

  • Revenue to be in the range of $485 million to $495 million
  • Adjusted EBITDA to be in the range of $165 million to $175 million
  • Adjusted net income to be in the range of $110 million to $120 million
  • Interest expense to be in the range of $22 million to $26 million
  • Capital expenditures to be in the range of $8 million to $12 million

Read more pv magazine USA coverage of Shoals Technologies Group here.

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