Financial Data and Key Metrics Changes - The company reported Q4 2024 revenue of $107 million, an 18% decline year-over-year but a 4.7% increase sequentially from the prior quarter [40] - Full year revenue totaled $399 million, an 18.4% decline from 2023, attributed to widespread project delays [21] - Adjusted gross profit percentage for Q4 was 37.6%, down from 42.5% in the prior year, while adjusted EBITDA was $26.4 million, or 24.7% of revenue [12][40] Business Line Data and Key Metrics Changes - The company quoted over $2.5 billion of projects in 2024, with more than 10% of 2024 revenue coming from new customers who purchased less than $1 million in 2023 [28] - The Commercial, Community, and Industrial (CC&I) segment quoted almost $40 million of projects in 2024 and recognized nearly $10 million in revenue [30] - The Battery Energy Storage Systems (BESS) market saw over $30 million in quoted projects during the year, with a new standardized product offering introduced [32] Market Data and Key Metrics Changes - The backlog and awarded orders (BLAO) ended Q4 at $635 million, with approximately $440 million expected to ship in the upcoming four quarters [9][47] - International projects won in Q4 included over $8 million in new contracts in Australia and Chile, with an international backlog of approximately $86 million [29] - The company expects a more normalized project timeline in 2025 compared to 2024, driven by improved customer engagement and market dynamics [23][70] Company Strategy and Development Direction - The strategic framework focuses on U.S. utility-scale solar market penetration, international market development, product innovation, and diversification into high-growth markets like BESS and data centers [26][27] - The company is consolidating small factories into a state-of-the-art facility in Tennessee to enhance productivity [16] - New product innovations are aimed at addressing customer challenges, with over a dozen new products introduced in 2024 [14][17] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for 2025, citing improved market dynamics and customer feedback [58] - The company is focused on maintaining strong relationships with customers and adapting to regulatory changes and labor availability challenges [13][24] - Management highlighted the importance of understanding project timelines and customer needs to navigate potential delays [50][120] Other Important Information - The company is actively pursuing litigation related to intellectual property, with a new case filed in January 2025 [35] - Cash flow from operations in Q4 was $14 million, with capital expenditures of $1.5 million [45] - The company ended Q4 with cash and equivalents of $23.5 million and a net debt to adjusted EBITDA ratio of 1.2x [45] Q&A Session Summary Question: Pricing dynamics and competition - Management noted that pricing pressure is influenced by market dynamics and customer engagement strategies, with a focus on securing long-term agreements [62][64] Question: Visibility into project delivery schedules - Management emphasized improved customer communication and CRM tools to gain better insights into project timelines, leading to cautious optimism for 2025 [68][70] Question: Bidding activity post-ITC reversal - Management reported strong order book activity in Q4, with ongoing efforts to attract new customers and diversify the portfolio [74][76] Question: Cash from operations guidance - Management confirmed that cash flow timing is impacted by a back-end loaded revenue recognition pattern for 2025 [78][80] Question: Margin expectations for 2025 - Management indicated that margins are expected to improve throughout the year, with a focus on product mix and operational efficiencies [86][88] Question: Labor dynamics affecting project execution - Management acknowledged ongoing labor challenges for EPC customers, with strategic project planning becoming increasingly important [114][116] Question: Impact of tariffs on operations - Management stated that the company primarily uses domestic supply chains, which mitigates tariff exposure [132] Question: Sensitivity of project pushouts on guidance - Management indicated that if project delays are similar to 2024, results would trend towards the lower end of guidance [136]

Company Performance - Shoals Technologies Group reported quarterly earnings of $0.08 per share, missing the Zacks Consensus Estimate of $0.09 per share, and down from $0.12 per share a year ago, representing an earnings surprise of -11.11% [1] - The company posted revenues of $106.99 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 5.84%, but down from $130.44 million year-over-year [2] - Over the last four quarters, Shoals Technologies has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Performance - Shoals Technologies shares have lost about 19% since the beginning of the year, while the S&P 500 has gained 1.7% [3] - The current consensus EPS estimate for the coming quarter is $0.10 on revenues of $98.59 million, and for the current fiscal year, it is $0.43 on revenues of $446.12 million [7] Industry Outlook - The solar industry, to which Shoals Technologies belongs, is currently in the top 30% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that industry performance can significantly impact stock performance [5][8]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission File Number: 001-39942 Shoals Technologies Group, Inc. (Exact name of registrant as specified in its charter) | Delaware 8 ...

Revenue Performance - Revenue for Q4 2024 was $107 million, a decrease of 18% compared to $130.4 million in Q4 2023[6] - Full year 2024 revenue decreased 18% to $399.2 million from $488.9 million in 2023[11] - Revenue for the year ended December 31, 2024, was $399,208 thousand, a decrease of 18.4% compared to $488,939 thousand in 2023[33] - For Q1 2025, the company expects revenue in the range of $70 million to $80 million[20] - For the full year 2025, revenue is projected to be between $410 million and $450 million[20] - For the three months ended December 31, 2024, revenue was $106.987 million, a decrease from $130.436 million in the same period of 2023, representing a decline of approximately 18%[41] Profitability Metrics - Adjusted gross profit percentage for Q4 2024 was 37.6%, down from 42.5% in the prior-year period[7] - Adjusted EBITDA for Q4 2024 was $26.4 million, down from $39.1 million in the prior-year period[10] - Net income for Q4 2024 was $7.8 million, compared to $16.6 million in Q4 2023, with diluted earnings per share of $0.05 versus $0.10[9] - Adjusted gross profit for the year ended December 31, 2024, was $155.781 million, down from $230.009 million in 2023, indicating a decrease of about 32%[41] - The adjusted gross profit percentage for the year ended December 31, 2024, was 39.0%, compared to 47.0% in 2023, reflecting a decline of 8 percentage points[41] - Adjusted EBITDA for the year ended December 31, 2024, was $99.084 million, down from $173.391 million in 2023, a decrease of approximately 43%[41] - Net income attributable to Shoals Technologies Group, Inc. for the year ended December 31, 2024, was $24.127 million, compared to $39.974 million in 2023, representing a decline of about 40%[43] - Adjusted diluted EPS for the year ended December 31, 2024, was $0.35, down from $0.65 in 2023, indicating a decrease of approximately 46%[45] Expenses and Liabilities - General and administrative expenses for the full year 2024 were $82.3 million, an increase from $80.7 million in 2023[13] - The company incurred interest expense of $13,827 thousand for the year ended December 31, 2024, compared to $24,100 thousand in 2023, a decrease of 42.5%[33] - The company’s operating expenses totaled $90,845 thousand for the year ended December 31, 2024, slightly up from $89,269 thousand in 2023, reflecting a marginal increase of 1.8%[33] Asset and Equity Changes - Total current assets decreased to $188,352 thousand in 2024 from $227,186 thousand in 2023, a decline of 17.1%[31] - Total liabilities decreased to $236,280 thousand in 2024 from $298,997 thousand in 2023, a reduction of 21.0%[31] - Cash and cash equivalents increased to $23,511 thousand at the end of 2024 from $22,707 thousand at the end of 2023, a rise of 3.5%[35] - The company’s total stockholders' equity increased to $556,800 thousand in 2024 from $544,996 thousand in 2023, an increase of 2.1%[31] Future Outlook and Strategic Focus - The company is focusing on improving productivity measures to mitigate short-term pressures on gross profit margins[4] - The company plans to continue excluding certain discrete liability events from non-GAAP measures to provide a clearer view of operating performance[44] - For Q1 2025, the company expects adjusted EBITDA between $10 million and $15 million[20] - For the full year 2025, adjusted EBITDA is expected to range from $100 million to $115 million[20] Tax and Shareholder Information - The effective income tax rate for adjusted net income was 25.2% for the year ended December 31, 2024, compared to 26.2% in 2023[45] - The diluted weighted average shares outstanding for the year ended December 31, 2024, was 168.725 million, slightly up from 164.504 million in 2023[45] Special Expenses - Wire insulation shrinkback expenses for the year ended December 31, 2024, amounted to $13.3 million, significantly lower than $59.1 million in 2023, a reduction of approximately 77%[44]

Core Insights - Shoals Technologies Group reported a quarterly revenue of $107.0 million, a decrease of 18% compared to $130.4 million in the prior-year fourth quarter, primarily due to lower sales volumes from solar project delays [4][10] - The adjusted gross profit percentage for the fourth quarter was 37.6%, down from 42.5% in the prior-year period, attributed to competitive pressures and higher material costs [5][8] - The company ended the year with a backlog and awarded orders of $634.7 million, reflecting continued demand for its solar products [16] Financial Performance - Quarterly net income was $7.8 million, compared to $16.6 million in the prior-year period, with basic and diluted net income per share at $0.05, down from $0.10 [7][8] - Adjusted EBITDA for the fourth quarter decreased to $26.4 million from $39.1 million in the prior-year period [8][43] - For the full year 2024, revenue was $399.2 million, down from $488.9 million in 2023, with net income of $24.1 million compared to $42.7 million in the prior year [10][13] Operational Insights - The company experienced a book-to-bill ratio of 1.4, indicating healthy bookings during the period [3] - General and administrative expenses remained flat at $21.5 million compared to the same period last year, with increases in payroll and employee expenses offset by decreases in professional services [6][12] - The company is optimistic about customer momentum entering 2025, with a focus on improving productivity and mitigating short-term pressures on gross profit [3][4] Market Outlook - The company provided an outlook for the first quarter and full year 2025, anticipating revenue between $70 million to $80 million for Q1 and $410 million to $450 million for the full year [24][18] - The CEO noted the importance of remaining cautious due to uncertainties in the utility-scale solar market, including tariffs, interest rates, and subsidies [3][18] - The backlog and awarded orders as of December 31, 2024, were approximately flat year-over-year, indicating stable demand despite market challenges [16]

Core Viewpoint - The enforcement of intellectual property rights is crucial for the advancement of the US solar industry, as demonstrated by Shoals Technologies Group's legal actions against Voltage for patent infringement [1][2][3]. Group 1: Legal Actions and Patent Infringement - Shoals Technologies Group has filed a Petition for Review and Notice of Appeal to the United States Court of Appeals for the Federal Circuit, seeking to overturn the ITC's decision regarding Voltage's infringement of Shoals' '153 Patent [1][2]. - The appeal will be reviewed on a "de novo" basis, allowing the court to interpret the patent without deferring to the ITC's latest determination [2]. - The ITC has initiated a new investigation into Voltage's infringement of Shoals' newly issued '375 and '376 patents, which relate to trunk bus lead assemblies for solar energy projects [3]. Group 2: Company Commitment and Industry Position - The CEO of Shoals Technologies Group emphasized the company's commitment to enforcing intellectual property rights and preventing illegal imports that infringe on these rights [4]. - Shoals Technologies Group is recognized as a leader in the renewable energy industry, providing electrical balance of systems (EBOS) solutions that enhance installation efficiency and system performance [4].

Core Viewpoint - Shoals Technologies Group, Inc. is set to release its fourth quarter and full year 2024 financial results on February 25, 2025, followed by a conference call [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 that enhance installation efficiency, safety, system performance, and reliability [3]. - Shoals Technologies Group is recognized as a leader in the renewable energy industry [3]. Investor Information - Interested investors can access the live webcast of the conference call through the Investor Relations section of the company's website, with an archived replay available shortly after the event [2].

Core Viewpoint - Shoals Technologies Group is committed to protecting its intellectual property and American jobs by filing a new patent infringement complaint against Voltage, LLC and a related foreign entity, focusing on its patented Big Lead Assembly solutions [1][2][3] Company Overview - Shoals Technologies Group is a leader in electrical balance of system (EBOS) solutions for the energy transition market, founded in 1996, and recognized for innovative technologies that enhance installation efficiency and system performance [4] Patent Infringement Complaints - The new complaint cites two patents (375 and 376) related to an improved trunk bus lead assembly for solar panel arrays, aimed at preventing the illegal importation of infringing products [2] - The company previously filed a complaint regarding the 153 Patent in 2023, and the new patents are intended to protect against alternative designs that may infringe on the original patent [2] Commitment to Domestic Manufacturing - The CEO of Shoals emphasizes the company's dedication to American jobs and domestic manufacturing, asserting the need to remain vigilant against foreign entities to support the reshoring of clean energy manufacturing [3]

Group 1 - The stock of Shoals (NASDAQ: SHLS) has experienced a significant decline of approximately 65% since the last analysis [1] - The analysis emphasizes the importance of resilient management and lasting competitive advantages in technology sector investments [1] Group 2 - The investment analyst Oliver Rodzianko specializes in sectors such as AI, semiconductors, software, and renewable energy [1] - Rodzianko's insights are recognized and published across various platforms, indicating a trusted voice in financial analysis [1]

Core Insights - Shoals Technologies Group, Inc. (NASDAQ: SHLS) reported mixed Q3 earnings, indicating a further decline in topline revenue and a miss on earnings per share (EPS) due to delays experienced recently [1] Financial Performance - The company experienced a decline in topline revenue during Q3, which suggests challenges in maintaining growth [1] - The EPS miss indicates that the company's profitability was affected, likely due to operational delays [1]