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]

Financial Data and Key Metrics Changes - Third quarter net revenue declined 23.9% year-over-year to $102.2 million but increased 2.9% sequentially [35] - Gross profit increased to $25.4 million compared to $14.2 million in the prior year, with a GAAP gross profit percentage of 24.8% compared to 10.5% in the prior year [36] - Adjusted EBITDA was $24.5 million, down from $48.0 million in the prior year, with an adjusted EBITDA margin of 24.0% compared to 35.8% a year ago [38] - Net loss was $0.3 million compared to a net loss of $9.8 million in the prior year [40] - Adjusted net income was $13.9 million compared to $33.4 million in the prior year [40] Business Line Data and Key Metrics Changes - The company quoted almost $2 billion worth of projects this year, reflecting a 50% year-over-year increase [72] - The backlog and awarded orders ended the third quarter at $596.6 million, a sequential decline of $46 million [51] - Approximately $455.2 million of backlog and awarded orders have planned delivery dates in the coming four quarters [51] Market Data and Key Metrics Changes - The company noted that 60% of utility-scale solar projects are delayed, which is 10 percentage points higher than the same time last year [16] - The active capacity seeking grid interconnection has increased eightfold in the last decade, with solar, battery storage, and wind accounting for 95% of this capacity [15] Company Strategy and Development Direction - The company is focused on the clean energy transition, emphasizing solar as the most efficient near-term solution for power needs [10] - The company is investing heavily in Battery Energy Storage Solutions, anticipating significant market growth [33] - The company aims to improve relationships with existing customers and establish new ones, targeting both traditional and incremental markets [22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the clean energy sector despite current macro headwinds, citing strong power needs driven by AI and other factors [11] - The company expects to return to growth in 2025, supported by a healthy backlog and awarded orders [59] - Management highlighted the importance of navigating regulatory environments and ensuring timely delivery of quality products [52] Other Important Information - The company is pursuing damages in a patent infringement case against Voltage, with a target date for completion of the ITC investigation scheduled for late December [18] - The company has a strong balance sheet, ending the quarter with net debt to adjusted EBITDA of 1.2 times [48] - The company has $125 million remaining under the share repurchase authorization [50] Q&A Session Summary Question: Clarification on ITC decision and review deadline - Management confirmed the deadline for review is imminent and remains excited about the initial determination, viewing it as a win for the company [61][62] Question: Bookings strength and run rate - Management indicated strong bookings activity at the start of Q4, with a healthy pipeline and record quoting activity [64] Question: Gross margins and operational challenges - Management acknowledged that gross margins were impacted by elevated labor costs and supply chain issues but remains confident in achieving long-term targets [66][67] Question: Backlog and delivery timelines - Management clarified that they work closely with customers to understand project timelines and do not use discretion in pacing backlog [85] Question: Pricing strategy and volume-driven discounts - Management discussed the impact of master supply agreements on pricing and volume-driven discounts, indicating a focus on partnerships with top customers [97]

Company Performance - Shoals Technologies Group reported quarterly earnings of $0.08 per share, missing the Zacks Consensus Estimate of $0.10 per share, and down from $0.20 per share a year ago, representing an earnings surprise of -20% [1] - The company posted revenues of $102.17 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 3.70%, but down from $134.21 million year-over-year [2] - Over the last four quarters, Shoals Technologies has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Performance - Shoals Technologies shares have lost approximately 62.9% since the beginning of the year, contrasting with the S&P 500's gain of 25.8% [3] - The current consensus EPS estimate for the coming quarter is $0.09 on revenues of $94.63 million, and for the current fiscal year, it is $0.37 on revenues of $383.08 million [7] Industry Outlook - The solar industry, to which Shoals Technologies belongs, is currently ranked in the bottom 26% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Shoals Technologies' stock performance [5]