Shoals Technologies Group (NasdaqGM:SHLS) Q4 2025 Earnings call February 24, 2026 08:00 AM ET Company ParticipantsBrandon Moss - CEODominic Bardos - CFOJulien Dumoulin-Smith - Managing DirectorMatt Tractenberg - VP, Finance and Investor RelationsConference Call ParticipantsBrian Lee - AnalystChris Dendrinos - Clean Energy AnalystColin Rusch - Managing Director and Senior Research AnalystDavid Arcaro - Executive Director and Senior Equity Research AnalystMark Strouse - AnalystPhilip Shen - Managing Director ...

Core Insights - Prysmian will showcase its latest innovations in mining technology at the PDAC Convention and Exhibition in Toronto from March 1-4, 2026, emphasizing its role as a leader in product solutions for the mining industry [1][2]. Company Overview - Prysmian North America, based in Highland Heights, Kentucky, is a significant player in the energy transition and digital transformation, with a strategy focused on developing resilient, high-performing, sustainable, and innovative cable systems [4]. - The company operates 29 plant locations in North America and employs nearly 8,000 associates, generating net sales of $8 billion [4]. - Globally, Prysmian is the largest cable solutions provider, with over 33,000 employees, 107 plants, and 27 R&D centers across more than 50 countries, achieving global sales exceeding €17 billion in 2024 [5]. Product Offerings - Prysmian will present a range of mining solutions at PDAC, including: - Anaconada® Mining Cables, known for toughness and flexibility, recognized as the leading extra-heavy-duty mining-grade cable [7]. - AIRGUARD® Mine Power Feeder and XP Fiber Optic Cables, offering mechanical and chemical protection [7]. - BostrigTM Type P Power Cables, designed for various applications with excellent resistance to harsh conditions [7]. - ezLINK™ Mining Cables, engineered for high tensile strength and crush resistance [7]. - Protolon and Protomont LV + MV cables for semi-flexible use in mining and tunneling [7]. - TECK and VertiTECK® Armored and Control Cables, tested for safety in hazardous locations [7]. Industry Engagement - Prysmian aims to partner with OEMs, contractors, installers, and mining companies to address their challenges and foster growth through innovative solutions [2].

Summary of Key Points from the Conference Call Industry Overview - **Sector**: Global Alternative Energy - **Outlook**: Improved investor sentiment driven by increased policy certainty in the US and global electricity load growth [2][7] Core Insights - **Load Growth**: - Load growth has been stagnant at approximately 0.5% annually over the past decade, but estimates have recently risen to around 2% or higher for the next five years due to AI-driven data center demand and broader electrification trends [5][6] - This growth is expected to exert upward pressure on power pricing, benefiting baseload power sources such as gas turbines, nuclear, and renewables paired with battery energy storage systems (BESS) [5][6] - **Policy Environment**: - Increased clarity in US renewable energy policy through the passage of significant legislation, though risks remain, including potential investigations and tariff decisions that could impact solar costs [5][6] - The Department of Commerce's investigations and permitting issues for solar and wind projects on federal land present uncertainties [6] Investment Preferences - **Top Picks in Clean Energy**: - **US**: GE Vernova (GEV), Brookfield Renewable (BEP/BEPC), NextPower (NXT), and EVgo (EVGO) [2][12][19] - **Europe**: Siemens Energy (ENR), Vestas (VWS), and Prysmian (PRY) [2][15][17] - **Asia**: Orient Cables (603606 CH), Daqo (DQ), GCL Tech (3800 HK), Arctech (688408 CH), and Sungrow (300274 CH) [2] Market Dynamics - **Solar Market**: - Preference for utility-scale solar over residential due to better positioning regarding policy and economic factors [7] - In China, polysilicon prices have recovered by approximately 50% due to policy interventions, with Daqo and GCL Tech highlighted as strong picks [20] - **Wind Market**: - BNEF forecasts significant growth in global wind installations, with a projected 16% growth in 2026 [17] - Vestas is expected to outperform the European Capital Goods sector due to stable input prices and lower interest rates [17] - **Energy Storage**: - Global energy storage demand exceeded expectations in 2025, with a forecasted 57% increase in battery shipments for 2025 [7] - The forecast for 2026 global ESS installations has been raised by approximately 30% [7] - **Electric Vehicle Charging**: - Sentiment around EV charging remains cautious, with anticipated declines in US EV sales [7] - EVgo is preferred due to its growing customer base and network throughput potential [19] Additional Insights - **Nuclear Fuel Cycle**: - Global nuclear generation is expected to reach record highs, increasing demand for enriched uranium [8] - Centrus Energy (LEU) is noted as a key player, though it faces execution risks [8] - **US Clean Energy Outlook**: - BNEF anticipates a decline in US clean energy build from 2026 to 2028 before returning to modest growth through 2035 [62] - The market is expected to consolidate as larger projects become more complex, favoring tier-1 developers [63] - **Residential Solar Market**: - A projected decline of 15-20% in US residential solar installations in 2026 due to the expiration of certain tax credits [64] - RUN is highlighted as a preferred pick in the residential space due to its visibility in solar lease/PPA qualifications [65] Conclusion - The global alternative energy sector is poised for growth driven by load demand and supportive policies, though challenges remain in the form of regulatory uncertainties and market dynamics. Key investment opportunities exist in diversified companies with strong balance sheets and exposure to emerging technologies.

Core Insights - Nvidia is leading a significant shift in data center power architecture by transitioning from traditional AC power to 800V DC power, preparing for ultra-high-density computing environments with a power density of 1 megawatt (MW) per rack [1] - This transition is driven by the increasing power density demands of modern AI workloads, which are expected to exceed the capabilities of existing power systems [2] - The shift to 800V DC is anticipated to reduce total cost of ownership (TCO) by 30% in the long term, although it presents a substantial capital expenditure challenge in the short term [1][6] Group 1: Technological Transition - The 800V DC architecture allows for over 150% more power transmission on the same copper conductors compared to traditional systems, significantly enhancing energy efficiency [2] - Nvidia's new Vera Rubin NVL144 rack design incorporates liquid cooling technology and increased energy storage capacity to manage the extreme power density [2] - The transition will eliminate the need for traditional AC power distribution units (PDUs) and uninterruptible power supply (UPS) systems, reducing the demand for AC PDUs by up to 75% [3] Group 2: Market Impact - The shift to higher voltage systems is expected to increase revenue potential per megawatt from €2 million to €3 million in traditional data centers [4] - The industry anticipates that 80-90% of new data centers will adopt the 800V DC architecture in the future, despite currently only one-third of racks operating below 10kW [5] - Key suppliers in the semiconductor space, such as Analog Devices and Infineon, are positioning themselves to meet the demand for advanced chips required for 800V DC systems [5] Group 3: Infrastructure and Supply Chain - The transition will necessitate a comprehensive upgrade of the entire supply chain, including transformers, circuit breakers, and cooling systems [1] - Companies like Schneider Electric are targeting the market for racks capable of handling up to 1.2MW, while also developing solutions for liquid cooling systems [3] - Solid-state protection devices are replacing mechanical circuit breakers, with ABB leading in the development of solid-state breakers designed for DC distribution [5] Group 4: Timeline and Financial Considerations - The full commercial transition to 800V DC data centers is expected to align with the deployment of Nvidia's Kyber architecture by 2027, with significant scale effects anticipated around 2028 [6] - Data center operators will face substantial investment requirements over the next five years, in addition to addressing a $5 trillion AI funding gap [6]

Core Viewpoint - Prysmian (PRYMF, PRYMY) has shown strong year-to-date performance, and there is an expectation of further upside potential in the stock [1]. Group 1 - The company has been discussed in previous notes highlighting its strong momentum and potential for growth [1]. - Analysts are conducting fundamental, income-oriented, long-term analysis across various sectors globally, particularly in developed markets [1].

Group 1: Core Themes and Investment Strategies - UBS emphasizes selective overweights in growth themes while balancing valuation protection and risk defense strategies amid moderate economic growth, persistent inflation, and geopolitical and technological changes [1] - The report identifies seven key themes for investment, focusing on technology stocks, artificial intelligence, electrification, European consumer potential, European and Japanese bank stocks, defensive stocks, and gold-related stocks [1][2][3][4] Group 2: Technology and AI Focus - UBS adopts a cautious stance on technology stocks, highlighting Microsoft, Amazon, TSMC, Tencent, and strategically SAP, while being cautious on Apple, Tesla, and ad-based business models [1] - The report underscores the importance of reasonably valued pure data center stocks and emphasizes application scenarios benefiting various sectors, including food retail and financial institutions [2] Group 3: Electrification and European Consumer Insights - UBS believes electrification is still in its early stages, with only 20% of global energy consumption coming from electricity, which needs to rise to 55%-70% by 2050 [2] - The report highlights potential surprises from European consumers in 2026, focusing on banks, retail, and consumer-centric companies like Ryanair and Accor [2][3] Group 4: Banking Sector Outlook - UBS remains optimistic about European and Japanese bank stocks for the third consecutive year, citing strong macroeconomic fundamentals and valuation support [3] - The report suggests that bank stock valuations should adjust to reflect their superior fundamentals and potential earnings compared to historical averages [3] Group 5: Defensive Stock Recommendations - UBS recommends buying undervalued defensive stocks, including household products, medical devices, and food retail, due to concerns over high valuations in cyclical stocks [4] - The report highlights a preference for gold mining equipment companies over gold equities as a hedge against currency devaluation and sovereign credit rating risks [4] Group 6: Investment Style Preferences - UBS continues to overweight low PEG, low leverage, and upward earnings revision factors, while also favoring quality stocks with reasonable valuations [4] - The report suggests a slight overweight in small-cap stocks relative to large-cap stocks in Europe and the UK due to their lower valuations [4]

Core Insights - Data centres are significantly driving global electricity demand, projected to consume 945 terawatt-hours by 2030, which is about 3% of global consumption [4] - The energy industry is adapting to meet the rising demand from data centres through various strategies, including co-locating data centres with power generation facilities and negotiating long-term power purchase agreements [2][3] - The relationship between data centres and energy sources is complex, with gas and coal expected to meet over 40% of data centre electricity demand until at least 2030, while renewables are anticipated to increase their share significantly [7][8] Group 1: Data Centre Demand and Energy Supply - Data centres are becoming a major driver of electricity demand, expected to use more power than all other energy-intensive industries combined in the US by 2030 [4] - The rapid growth of data centres is complicating the energy transition, potentially delaying the retirement of fossil fuel capacity due to increased reliance on gas [7] - Hyperscalers are major buyers of renewables and are investing in energy storage and advanced grid technologies to support their operations [8][9] Group 2: Energy Transition Challenges - The power industry is facing challenges in meeting the energy needs of data centres, as energy systems often take longer to develop than the centres themselves [3] - Gas-fired power is seen as a solution for grid stability, but the gas industry is struggling with supply issues, leading to delays in turbine deliveries and increased project costs [17] - The renewable energy supply chain is facing pressures from tariffs and trade policies, which could hinder deployment despite the growth in solar module production [19][20] Group 3: Nuclear Power and Future Projections - Nuclear power is emerging as a viable option for co-locating with data centres due to its stable load profile, with small modular reactors (SMRs) being particularly promising [11][14] - Policy support for SMR projects is increasing, making them more bankable and likely to be deployed for data centres in the coming years [13] - GlobalData forecasts that at least 3GW of additional data centre-linked SMR capacity will be commissioned in the next three years, with nuclear deployment peaking between 2031 and 2035 [14] Group 4: Grid Infrastructure and Storage Solutions - Despite investments in transmission and distribution (T&D) infrastructure, power grids are still struggling to keep pace with new capacity, leading to longer interconnection queues [25] - Grid reforms are being implemented to ease constraints, with various countries updating regulatory rules to streamline connection processes [26] - Energy storage, particularly battery technology, is becoming essential for modern power systems, with significant increases in capacity expected in the coming years [30]

Summary of Global Data Centre Equipment Market Conference Call Industry Overview - The report focuses on the **Global Data Centre Equipment** market, providing an updated outlook and analysis of key players across the value chain [2][3]. Market Growth Forecast - The **Data Centre equipment market** (including grey, white, and cooling segments) is projected to grow by **20-25% in 2026**, **15-20% in 2027**, and **10-15% annually from 2028 to 2030**. The estimated growth for 2025 is around **25-30%** [3][39]. - The **Cooling segment** is expected to grow at a **CAGR of approximately 20%** until 2030, with **Liquid Cooling** projected to grow by **45%** [3][39]. Pricing Dynamics - A **20% increase** in market **$/MW** is anticipated due to higher power density rack architectures, primarily driven by cooling and grey space [4][28]. - The **IT equipment $/MW** is expected to rise by **3-4 times**, which explains the rapid capital expenditure (capex) ramp by hyperscalers and reduces price sensitivity towards facility costs [4][28]. AI Adoption and Monetization - There is evidence of rapid adoption of **Generative AI (GenAI)**, with an annual recurring revenue (ARR) of **$17 billion**, representing **6-7%** of the current total SaaS market [5][26]. - Hyperscalers' **Capex/Sales** ratio is projected to more than double compared to 2023, reaching **25-30%**, raising questions about sustainability. However, even with 2026 estimates, capex is expected to represent **75%** of the industry's operating cash flow [5][26]. Key Players and Stock Recommendations - In **Europe**, preferred companies include **Schneider**, **Halma**, **Siemens**, **Prysmian**, and **Wartsila**. - In the **US**, favored companies are **Vertiv**, **Eaton**, **nVent**, **GE Vernova**, and **Comfort Systems**. - In **Asia**, **Delta Electronics** and **Envicool** are highlighted as key players [6][39]. Capacity and Demand Insights - The **Global Data Centre Capacity** is expected to grow significantly, with **24% year-over-year growth** in 2026 and a **21% CAGR from 2025 to 2029** [50][56]. - The **Tech 6** companies (Amazon, Microsoft, Google, Meta, Oracle, and Apple) are projected to account for **10%** of total US electricity demand by 2030, with their incremental demand surpassing the entire US utility-scale solar industry by 2028 [56][58]. Challenges and Risks - Potential risks include project delays, cancellations, and the need for stable grid connections, particularly in Europe where connections are quoted into the 2030s [57][58]. - The industry has faced equipment shortages, particularly in electrical equipment, but this has returned to normal as manufacturers ramped up capacity [57]. Conclusion - The **Global Data Centre Equipment** market is poised for significant growth driven by AI adoption, increased demand for cooling solutions, and substantial capital investments from hyperscalers. However, challenges related to infrastructure and supply chain must be monitored closely to ensure sustainable growth [5][56][57].

Core Insights - Prysmian's Draka EHC has been awarded the title of Best Supplier for Ropes/Traveling Cables at the 2025 Elevator Industry (Ellie) Awards [1] - The company also secured the runner-up position for Best Supplier in Safety Products [1] - The Ellie Awards have been recognizing outstanding North American vertical-transportation businesses for the past eight years [1] Company Recognition - The awards were presented by Elevator World, highlighting the achievements of companies that excel in customer service, employee satisfaction, and community engagement [1] - Draka EHC's recognition reflects its commitment to quality and innovation in the elevator industry [1]

Summary of Key Points from the Conference Call on Europe's Energy Security Industry Overview - The report focuses on the energy sector in Europe, particularly in the context of the ongoing energy crisis and its implications for economic competitiveness and security in the age of AI [1][5][6]. Core Insights and Arguments 1. **End of Energy Crisis by 2027**: The energy crisis in Europe is expected to conclude by 2027 due to a significant increase in global LNG supply, which will reduce natural gas and power prices by nearly 50% to 17 EUR/MWh, aligning with pre-crisis levels [5][8]. 2. **Continued Import Dependence**: Despite the expected recovery, Europe will still import about 50% of its energy, making it vulnerable to supply shocks, especially as AI-driven demand for power increases [6][10]. 3. **Reshuffled Fossil Fuel Dependence**: Europe's reliance on fossil fuels will shift from Russian imports to those from the US and Qatar, creating a new concentration of supplier risk [12][13]. 4. **Vulnerability in Renewable Energy Supply Chains**: The renewable energy sector in Europe is heavily dependent on Chinese rare earths and magnets, with China controlling approximately 92% of global rare earth processing and 98% of magnet production [18][19]. 5. **Nuclear Energy Dependence**: Europe relies entirely on imports for uranium, with about 75% sourced from Canada, Kazakhstan, and Russia, raising concerns about supply chain disruptions [25][26][29]. 6. **Aging Power Grid**: The European power grid is outdated, averaging 50 years in age, and is susceptible to cyberattacks and blackouts, which could hinder the ability to meet rising AI power demands [30][31][32]. 7. **Impact of AI on Energy Demand**: The rise of AI is expected to increase pressure on the already strained power grid, with over 90% of data center operators citing power availability as their primary concern [32][36]. 8. **Decline in Energy-Intensive Production**: EU energy-intensive industrial production has decreased by 15% since early 2022, and is unlikely to recover due to competition from China and manufacturing capacity closures [37][40]. 9. **Investment Implications**: The vulnerabilities in energy supply highlight the potential benefits of commodities in European investment portfolios. Specific companies identified for potential growth include Ceres Power, Prysmian, Enel, SSE, and Umicore, which are positioned to benefit from data center growth and electrification [48][49]. Other Important Considerations - **Regulatory Environment**: European policymakers are aware of the vulnerabilities related to energy imports and the power grid, but actions to address issues in rare earths and data centers remain limited [44][45]. - **Future Power Price Dynamics**: While power prices may initially decrease due to falling gas prices, regulatory decisions on carbon pricing could become a significant factor influencing future power prices [43][44]. This summary encapsulates the critical aspects of Europe's energy security as discussed in the conference call, highlighting both the challenges and potential investment opportunities within the sector.