Financial Data and Key Metrics Changes - The company reported record revenue of $135.8 million for Q3 2025, representing a 32.9% increase year-over-year and a 22.5% sequential increase from Q2 2025 [3][5] - Adjusted gross profit was $50.3 million, with a gross profit margin of 37%, compared to 24.8% in the prior year [5][15] - Adjusted EBITDA was $32 million, or 23.5% of revenue, showing a 30% growth from the previous year [6][15] - Net income was $11.9 million, compared to a net loss of $300,000 in the prior year [15] Business Line Data and Key Metrics Changes - The core utility-scale solar market continued to show strong growth, with a quote volume exceeding $900 million in Q3, a sequential increase of over 20% [8][9] - The company added approximately $185.4 million in new orders, resulting in a backlog of $720.9 million, a 21% year-over-year increase [4][18] - The community commercial and industrial (CC&I) business grew by 36% year-over-year, while the OEM business is tracking ahead of expectations [33][10] Market Data and Key Metrics Changes - The U.S. market for solar energy remains robust, with developers maintaining project calendars through 2030 despite political volatility [7][8] - The company is expanding its international market presence, with a pipeline exceeding 20 gigawatts in regions like Latin America, EMEA, and Asia-Pacific [9][10] - The Australian market is particularly attractive, with a government mandate for 40 gigawatts of new capacity by 2027 [10][53] Company Strategy and Development Direction - The company is focused on diversifying its market presence and product offerings, including battery energy storage solutions (BESS) and international expansion [9][10] - Strategic growth initiatives are being implemented to improve customer relationships and operational efficiencies [5][20] - The company aims to transform from a narrow customer mix to a diversified multinational energy solutions provider [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand environment, noting that 2025 is shaping up better than anticipated [20] - The company expects continued strong growth in 2026, supported by a healthy backlog and awarded orders [4][19] - Management highlighted the importance of innovative product solutions and improving customer experience as key drivers for future growth [20] Other Important Information - The company maintained excellent liquidity and positive free cash flow despite increased capital expenditures [5][17] - Legal expenses increased due to ongoing litigation, impacting general and administrative costs [15][16] - The company is consolidating operations into a new facility, which is expected to enhance operational efficiency [17][35] Q&A Session Summary Question: Data center opportunity and MSAs - Management discussed the potential for data center opportunities to materialize through partnerships with system integrators and emphasized the confidentiality of specific MSAs [22][23] Question: Gross margins and tariffs - Management clarified that gross margins were stable and within expected ranges, with tariffs impacting material costs and potential margin improvements [25][27] Question: Long-term growth metrics and backlog - Management indicated that growth metrics are exceeding expectations, with a strong backlog and awarded orders supporting future revenue growth [29][32] Question: BESS opportunity and market sizing - Management provided insights into the BESS market, noting a total addressable market of approximately $360 million, with potential for significant revenue from data centers [44][45] Question: International business progress - Management highlighted the growth of the international business, particularly in Australia and Latin America, and the expected margin profiles for different market segments [51][53]

Financial Performance - Revenue for Q3 2025 reached $135.8 million[9], a 32.9% increase compared to $102.165 million in Q3 2024[31] - Adjusted EBITDA for Q3 2025 was $32.0 million[9], within the guidance range[9], and a 30.3% increase from $24.533 million in Q3 2024[31] - Adjusted diluted EPS for Q3 2025 increased 49.5% year-over-year to $0.12[32] from $0.08 in Q3 2024[31] - The company's backlog and awarded orders reached a record $720.9 million[9], with $574.8 million[39] scheduled for delivery in the next four quarters[9] Market and Growth Opportunities - The company's quote volume exceeded $900 million during Q3 2025[15] - The company's international pipeline exceeds 20GW, including projects in Latin America, EMEA, and Asia Pacific[20] - The domestic market opportunity for Battery Energy Storage Systems (BESS) is substantially larger than traditional Solar & Storage[27] Financial Outlook - The company anticipates Q4 2025 revenue to be between $140 million and $150 million[40] - The company projects Q4 2025 adjusted EBITDA to be between $35 million and $40 million[40]

Financial Performance - Revenue for the three months ended September 30, 2025, was $135.8 million, a 33% increase from $102.2 million in the same period of 2024[16] - Gross profit for the three months ended September 30, 2025, was $50.3 million, compared to $25.4 million in the same period of 2024, representing a 97% increase[16] - Net income for the three months ended September 30, 2025, was $11.9 million, compared to a net loss of $0.3 million in the same period of 2024[16] - For the nine months ended September 30, 2025, net income was $25,452,000, compared to $16,309,000 for the same period in 2024, representing a year-over-year increase of 56.5%[20] - Total stockholders' equity as of September 30, 2025, was $589,640,000, up from $545,196,000 as of September 30, 2024, indicating a growth of 8.1%[19] - The company reported a basic earnings per share of $0.07 for the three months ended September 30, 2025, compared to a loss per share of $0.00 in the same period of 2024[16] - Income from operations for Q3 2025 was $18.671 million, significantly higher than $4.524 million in Q3 2024[115] - Net income for the nine months ended September 30, 2025, was $25.452 million, compared to $16.309 million for the same period in 2024, reflecting a 56% increase[115] Assets and Liabilities - Total current assets increased to $201.2 million as of September 30, 2025, from $188.4 million as of December 31, 2024[15] - Total assets reached $851.8 million as of September 30, 2025, up from $793.1 million as of December 31, 2024[15] - Total liabilities increased to $262.2 million as of September 30, 2025, compared to $236.3 million as of December 31, 2024[15] - Retained earnings rose to $124.0 million as of September 30, 2025, from $98.6 million as of December 31, 2024[15] - The balance of retained earnings as of September 30, 2025, was $124,031,000, an increase from $90,761,000 as of September 30, 2024[19] - Long-term debt, net of current portion, was $126.8 million as of September 30, 2025, compared to $141.8 million as of December 31, 2024, reflecting a decrease in debt levels[57] Operating Expenses - Operating expenses for the three months ended September 30, 2025, were $31.6 million, up from $20.9 million in the same period of 2024[16] - Total operating expenses for Q3 2025 were $31.581 million, a 51% increase from $20.852 million in Q3 2024[115] - General and administrative expenses for Q3 2025 were $29.423 million, up from $18.743 million in Q3 2024, marking a 57% increase[115] Cash Flow and Investments - Cash flows from operating activities for the nine months ended September 30, 2025, were $21,154,000, a significant decrease from $66,400,000 in the same period of 2024[20] - The company reported a net cash used in investing activities of $20,791,000 for the nine months ended September 30, 2025, compared to $6,862,000 in 2024[20] - As of September 30, 2025, the company had cash and cash equivalents of $8,589,000, down from $11,106,000 at the end of September 2024[21] Inventory and Receivables - Accounts receivable increased to $117.96 million as of September 30, 2025, up from $78.68 million as of December 31, 2024, representing a 50% increase[40] - Inventory, net as of September 30, 2025, was $60.35 million, compared to $55.98 million as of December 31, 2024, reflecting a 7.5% increase[41] - Billed accounts receivable as of September 30, 2025, amounted to $108.2 million, up from $70.9 million at the end of 2024, indicating a significant increase in receivables[107] Warranty and Legal Matters - The company incurred a warranty expense provision of $256,000 for the nine months ended September 30, 2025, a decrease from $15,203,000 in the same period of 2024[20] - As of September 30, 2025, the company had a warranty liability of $7.6 million, down from $54.7 million at the beginning of the period, indicating a reduction in warranty claims[56] - The warranty liability related to wire insulation shrinkback was recorded at $73.0 million as of September 30, 2025, with a potential high-end loss estimate of $160.0 million[52] - The Company filed a patent infringement complaint against Voltage on January 9, 2025, citing two new patents related to BLA solutions[87] - The Company is pursuing litigation against Prysmian for damages related to defective wire sold from 2019 to 2022, with court-ordered mediation scheduled for late 2025[89] Revenue Recognition - Revenue from system solutions for the nine months ended September 30, 2025, was $252.2 million, compared to $222.9 million for the same period in 2024, reflecting a growth of 13%[105] - Deferred revenue increased to $26.1 million as of September 30, 2025, compared to $18.7 million at the end of 2024, showing a rise of 39%[107] - The Company recorded $1.2 million and $13.3 million of deferred revenue recognized in revenue during the three and nine months ended September 30, 2025, respectively[110] Share Repurchase and Compensation - The company announced a share repurchase program authorizing the repurchase of up to $150.0 million of Class A common stock, with an estimated completion date of December 31, 2025[77] - The company granted 2,032,169 restricted stock units (RSUs) during the nine months ended September 30, 2025, with grant date fair values ranging from $3.26 to $6.05 per unit[72] - The company recognized equity-based compensation of $2.4 million for the three months ended September 30, 2025, compared to $1.3 million for the same period in 2024[75] Market and Risk Factors - The company faces risks related to supply chain disruptions and competition in the solar energy market, which could adversely impact financial results[12] - There were no material changes in market risk exposure during the nine months ended September 30, 2025[198] - The company’s long-lived tangible assets are located within the United States[115] - The Chief Operating Decision Maker reviews financial performance at a consolidated entity level for resource allocation decisions[114]

Financial Performance - Record quarterly revenue of $135.8 million, an increase of 32.9% year over year[1] - Gross margin of 37.0%, up from 24.8% in the prior-year period[7] - Operating profit of $18.7 million, compared to $4.5 million in the prior-year period[9] - Adjusted EBITDA of $32.0 million, compared to $24.5 million in the prior-year period[9] - For the three months ended September 30, 2025, revenue was $135,804 thousand, a 33% increase from $102,165 thousand in the same period of 2024[33] - Adjusted EBITDA for the three months ended September 30, 2025, was $31,974 thousand, an increase from $24,533 thousand in 2024, representing a growth of approximately 30%[37] - For the nine months ended September 30, 2025, Adjusted EBITDA was $69,244 thousand, slightly down from $72,677 thousand in 2024[37] Revenue Outlook - Fourth quarter revenue outlook in the range of $140.0 million to $150.0 million[16] - Full year 2025 revenue outlook in the range of $467.0 million to $477.0 million[16] Backlog and Orders - Record backlog and awarded orders of $720.9 million, a 21.0% increase year over year[10] Expenses - Significant increase in general and administrative expenses to $29.4 million, primarily due to legal expenses[8] - Operating expenses for the three months ended September 30, 2025, were $31,581 thousand, compared to $20,852 thousand in the same period of 2024, reflecting a 51% increase[33] - The company incurred $6,831 thousand in wire insulation shrinkback litigation expenses for the three months ended September 30, 2025, compared to $2,278 thousand in 2024[39] - Total interest expense for the three months ended September 30, 2025, was $2,832 thousand, down from $3,173 thousand in 2024[37] - The company reported depreciation expense of $1,466 thousand for the three months ended September 30, 2025, compared to $1,254 thousand in 2024, reflecting an increase of approximately 17%[37] Net Income - Net income for the nine months ended September 30, 2025, was $25,452 thousand, up from $16,309 thousand in 2024, representing a 56% increase[35] - For the three months ended September 30, 2025, the net income was $11,879 thousand, compared to a net loss of $267 thousand for the same period in 2024[37] - Adjusted Net Income for the three months ended September 30, 2025, was $20,999 thousand, compared to $13,935 thousand in 2024, reflecting a year-over-year increase of about 51%[39] Assets and Liabilities - Total assets as of September 30, 2025, were $851,791 thousand, an increase from $793,080 thousand as of December 31, 2024[31] - Total liabilities increased to $262,151 thousand as of September 30, 2025, compared to $236,280 thousand at the end of 2024[31] - Cash and cash equivalents decreased to $8,589 thousand at the end of the period from $23,511 thousand at the beginning of the period[35] - The company’s inventory increased to $60,350 thousand as of September 30, 2025, compared to $55,977 thousand at the end of 2024[31] Tax and Earnings Per Share - The effective income tax rate for Adjusted Net Income was 24.0% for the three months ended September 30, 2025, down from 24.9% in 2024[41] - Adjusted Diluted EPS for the three months ended September 30, 2025, was $0.12, up from $0.08 in 2024, indicating a 50% increase[41] Company Strategy - Strong customer reception of new products and capabilities, contributing to market share growth[2] - The company plans to exclude expenses related to discrete liability events from its non-GAAP measures to provide a clearer view of operating performance[40]

Core Insights - Shoals Technologies Group, Inc. reported record quarterly revenue of $135.8 million, marking a 32.9% increase year over year [1][4] - The company achieved a gross margin of 37.0% and an operating profit of $18.7 million [1][7] - Adjusted EBITDA for the quarter was $32.0 million, up from $24.5 million in the prior year [1][7] - The backlog and awarded orders reached a record $720.9 million, reflecting a 21.0% increase compared to the previous year [1][10] Financial Performance - Revenue increased to $135.8 million from $102.2 million in the prior-year period, driven by strong demand and market share initiatives [4] - Gross profit rose to $50.3 million, with a gross profit percentage of 37.0%, compared to 24.8% in the prior-year period [5][33] - General and administrative expenses increased to $29.4 million, primarily due to legal expenses and incentive compensation [6] - Net income was reported at $11.9 million, compared to a loss of $0.3 million in the prior-year period, with earnings per share of $0.07 [7][29] Backlog and Orders - The backlog and awarded orders as of September 30, 2025, were $720.9 million, indicating a 21.0% year-over-year increase and a 7.4% sequential increase from June 30, 2025 [9][10] - International markets contributed over 11.5% to the backlog and awarded orders, showcasing growth in these areas [10] Outlook - The company provided a revenue outlook for the fourth quarter of 2025, expecting revenue in the range of $140.0 million to $150.0 million and adjusted EBITDA between $35.0 million and $40.0 million [16] - For the full year 2025, revenue is expected to be between $467.0 million and $477.0 million, with adjusted EBITDA projected at $105.0 million to $110.0 million [16]

Core Viewpoint - Halper Sadeh LLC is investigating potential breaches of fiduciary duties by certain officers and directors of Shoals Technologies Group Inc. [1] Company Investigation - The investigation focuses on whether the actions of Shoals Technologies Group's leadership have harmed shareholder interests [1] - Long-term shareholders may have the opportunity to pursue corporate governance reforms and seek financial restitution [1] Potential Outcomes - Shareholders could potentially receive court-approved financial incentive awards or other forms of relief and benefits [1]

Core Viewpoint - Shoals Technologies Group, Inc. will release its third quarter 2025 results on November 4, 2025, before market open, followed by a conference call at 8:00 a.m. Eastern Time [1] Company Overview - Shoals Technologies Group is a leading provider of electrical balance of systems (EBOS) solutions for the energy transition market, founded in 1996 [3] - The company has introduced innovative technologies and systems solutions that enhance installation efficiency and safety while improving system performance and reliability [3] - Shoals Technologies Group is recognized as a leader in the renewable energy industry [3]

Core Insights - Shoals Technologies Group, Inc. (NASDAQ: SHLS) faced market challenges over a year ago, but the outlook is expected to improve in the long term [1] Company Overview - The company operates in the technology sector, focusing on solutions for the renewable energy market, particularly solar energy [1] Analyst Background - The analysis is conducted by an experienced equity analyst with over 10 years in the investment industry, specializing in small-cap stocks often overlooked by Wall Street [1]

Company Overview - Shoals Technologies Group (SHLS) is a leading provider of electrical balance of systems solutions in the energy transition space, focusing on innovative technologies and system designs that enhance installation efficiency, safety, and overall system performance [2]. Recent Performance - SHLS shares increased by 12.4% in the last trading session, closing at $8.91, with notable trading volume, and have gained 17% over the past four weeks [1]. Patent Portfolio - The company has a strong patent portfolio, including the Big Lead Assembly technology, which enhances its competitive edge and revenue generation. Recently, it secured an additional patent that reduces installation time and labor costs while ensuring long-term performance in solar projects [3]. Earnings Expectations - Shoals Technologies is expected to report quarterly earnings of $0.12 per share, reflecting a year-over-year increase of 50%. Revenues are projected to be $130.12 million, up 27.4% from the same quarter last year [4]. Earnings Estimate Revisions - The consensus EPS estimate for the upcoming quarter has been revised 1.6% lower over the last 30 days, indicating a negative trend in earnings estimate revisions, which typically does not lead to price appreciation [5]. Industry Context - Shoals Technologies belongs to the Zacks Solar industry, where another company, Tigo Energy, Inc. (TYGO), has seen a significant return of 68.8% over the past month, closing at $2.45 [5].

Core Viewpoint - Premarket trading is showing notable activity with significant price movements indicating potential investment opportunities before the market opens [1] Premarket Gainers - Concorde International Group Ltd. (CIGL) increased by 53% to $3.94 [3] - Fermi Inc. Common Stock (FRMI) rose by 13% to $36.99 [3] - Kodiak AI, Inc. (KDK) also saw a 13% increase, reaching $6.76 [3] - AngioDynamics, Inc. (ANGO) gained 12%, trading at $12.45 [3] - Angel Studios, Inc. (ANGX) was up 11% at $8.51 [3] - Spruce Biosciences, Inc. (SPRB) increased by 9% to $9.75 [3] - K Wave Media Ltd. (KWM) rose by 9% to $2.66 [3] - Shoals Technologies Group, Inc. (SHLS) saw an 8% increase, trading at $8.59 [3] - StableX Technologies, Inc. (SBLX) was up 7% at $5.65 [3] Premarket Losers - Uni-Fuels Holdings Limited (UFG) decreased by 51% to $2.42 [4] - Akanda Corp. (AKAN) fell by 13% to $2.91 [4] - Equifax Inc. (EFX) dropped 11%, trading at $224.57 [4] - TransUnion (TRU) also saw an 11% decline, reaching $73.24 [4] - Bolt Biotherapeutics, Inc. (BOLT) decreased by 11% to $4.99 [4] - Dogwood Therapeutics, Inc. (DWTX) fell by 8% to $6.50 [4] - Galaxy Payroll Group Limited (GLXG) decreased by 8% to $4.52 [4] - Old Market Capital Corporation (OMCC) dropped 7% to $5.08 [4] - Entero Therapeutics, Inc. (ENTO) fell by 7% to $3.96 [4] - Flux Power Holdings, Inc. (FLUX) decreased by 7% to $3.74 [4]