Shoals Technologies' Q2 2025 Earnings Call: Key Contradictions on Revenue Growth, Market Conditions, and Gross Margins

International revenue contribution and growth, the impact of tariffs on market position, market conditions and customer behavior, revenue growth and market execution, and gross margin expectations are the key contradictions discussed in Shoals Technologies Group, Inc.'s latest 2025Q2 earnings call.



Revenue Growth and Market Demand:
- Shoals Technologies Group reported revenue of $110.8 million for Q2 2025, above the high-end of the expected range, representing a 11.7% year-over-year increase and a 37.9% sequential increase.
- The growth was driven by strong demand for U.S. utility-scale solar, increased bookings leading to a record backlog and awarded orders, and strategic pricing initiatives.

Backlog and Book-to-Bill Ratio:
- The company's backlog and awarded orders (BLAO) reached a record $671.3 million, with a strong book-to-bill ratio of 1.2.
- This significant backlog is supported by upcoming project deliveries in the next four quarters, indicating optimism for future growth and market confidence.

International Market Expansion:
- Shoals's international pipeline exceeds 20 gigawatts, with projects in LatAm, EMEA, and Asia-Pacific, contributing to over 12% of the company's backlog.
- This expansion is driven by partnerships with global developers and the U.S. Export-Import Bank, expected to yield multiple international project wins this year and accelerate in 2026.

Battery Energy Storage Solutions (BESS) and Data Center Opportunities:
- Shoals is expanding into BESS, targeting the growth in data center and AI power demand, with a focus on recombiner products.
- The market opportunity is driven by significant data center investment, including a 100x increase in quoting activity, with a focus on providing comprehensive wiring solutions to address energy fluctuations and demand spikes.