Shoals Technologies (SHLS) - 2025 Q3 - Quarterly Results

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]