Shoals Technologies: Q3 Earnings Snapshot

Shoals Technologies Group, Inc. (SHLS) recently reported its third-quarter 2024 earnings, providing valuable insights into the company's performance and market position. As an industry leader in electrical balance of system (EBOS) solutions for the energy transition market, Shoals' earnings serve as a bellwether for the broader solar and renewable energy sectors.
Revenue for the quarter decreased by 24% year-over-year (YoY) to $102.2 million, primarily driven by project delays. Gross profit, however, increased to $25.4 million, reflecting a 24.8% gross profit percentage and an adjusted gross profit percentage of 37.9%. Despite the revenue decline, Shoals' gross profit margin demonstrated resilience, indicating the company's ability to maintain profitability even in challenging market conditions.

Shoals' backlog and awarded orders stood at $596.6 million as of September 30, 2024, representing a 5.8% decrease compared to the prior-year period. This decrease was driven by the timing of orders received, as the company navigates shifting order patterns in the utility-scale solar market. International markets now comprise more than 13% of backlog and awarded orders, reflecting Shoals' growing global presence.
For the fourth quarter of 2024, Shoals expects revenue to be in the range of $97 to $107 million and adjusted EBITDA to be in the range of $23 to $28 million. The company has also raised the midpoint of its full-year revenue outlook, reflecting its confidence in the market and its competitive position.
Shoals' CEO, Brandon Moss, expressed optimism about the company's prospects, citing robust engagement with customers and strong interest from new customers. Despite challenges such as supply chain disruptions, labor availability issues, and persistently high interest rates, Shoals remains confident in its competitive position, particularly as labor costs rise and quality becomes increasingly important.
In conclusion, Shoals Technologies' Q3 earnings snapshot offers a mixed picture, with revenue declining due to project delays but gross profit margins remaining resilient. The company's outlook for the fourth quarter and full year reflects its confidence in the market and its ability to navigate challenges. As an industry leader in EBOS solutions, Shoals' performance serves as an important indicator of the broader renewable energy sector's health and prospects.