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- **Revenue Record**: Q3 $135.8M (+32.9% YoY), full year guidance raised to $467-477M (17-20% growth).
- **Backlog Boom**: BLAO hits $720.9M (21% YoY), with $575M scheduled for next 4 quarters.
- **BESS Breakthrough**: $18M BESS backlog from 2 MSAs, 15% of new facility dedicated to BESS.
- **Margin Resilience**: 37% gross margin despite tariff headwinds, 30% EBITDA growth.
- **International Expansion**: 13% of BLAO in international markets, Australia pipeline exceeds 20GW.
- **Factory Efficiency**: Consolidation underway, $9M free cash flow despite $11.9M remediation costs.

**【CEO Summary Section】**
- **Record Revenue Growth**: Q3 revenue of $135.8 million, up 32.9% YoY and 22.5% sequentially, driven by domestic project volume and strategic growth channels (international, CC&amp;I, OEM). 
- **Backlog Expansion**: BLAO (backlog and awarded orders) reached $720.9 million (21% YoY), with $575 million scheduled for delivery over the next 4 quarters.
- **Strategic Wins**: 
  - $18 million in BESS backlog from 2 new MSAs for grid firming and data centers.
  - $6 million in international revenue from 3 projects in LatAm and Australia.
  - 36% YoY growth in CC&amp;I business.
- **Operational Milestones**: 
  - New Portland, TN facility nearing full consolidation.
  - 15% of floor space dedicated to BESS production.
  - Record quote volume of $900 million for 2026-2027 projects.

**【CFO Financial Commentary】**
- **Topline Performance**: 
  - Q3 GAAP revenue $135.8M, Non-GAAP gross profit $50.3M (37% margin).
  - Full year 2025 revenue guidance raised to $467-477M (17-20% YoY growth).
- **Cost Management**: 
  - Adjusted EBITDA $32M (23.5% of revenue), up 30% YoY.
  - Free cash flow $9M, despite $11.9M in warranty remediation.
  - Legal expenses $5.7M (including $6.8M for shrinkback litigation).
- **Balance Sheet**: 
  - Cash $8.6M, net debt $118.2M (1.2x net debt/EBITDA).
  - Capital expenditures $30-40M for 2025.

**【Q&A Highlights】**
- **BESS Growth**: 
  - $18M Q3 BESS backlog to begin monetizing in Q2 2026.
  - 15%+ of new facility dedicated to BESS production.
  - Targeting data centers and grid firming use cases with 2 MSAs signed.
- **Margin Dynamics**: 
  - 37% gross margin (mid-30s target range) impacted by long-tail BLA mix and tariffs.
  - 100-200bps margin improvement delayed due to Section 232 aluminum tariffs.
- **International Expansion**: 
  - 13% of BLAO tied to international projects (LatAm, Australia).
  - Australia pipeline exceeds 20GW with government mandate for 40GW new solar by 2030.
- **Factory Consolidation**: 
  - Full consolidation expected by mid-2026.
  - Q3 spent $11.9M on warranty remediation, $4.2M remaining liability.


Shoals Technologies Group, Inc. (SHLS) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

SHLS

SHLS fundamentals

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