Shoals' Q3 2024 revenue falls 23.9% due to project delays, supply chain

15 Nov 2024 CW Team

The company posted a net loss of $300,000, a significant improvement compared to the $9.8 million net loss in Q3 2023. Adjusted net income was reported at $13.9 million, reflecting a 58.2% YoY decrease. Adjusted EBITDA stood at $24.5 million, a 48.9% decrease from the previous year, with a margin of 24%, down from 35.8% in Q3 2023.

As of September 30, 2024, Shoals' backlog and awarded orders totaled $596.6 million, showing a 5.8% YoY decrease. The company expects to fulfill approximately $455.2 million worth of orders in the next four quarters.

Earnings per share (EPS) were reported at $0.08, falling short of expectations by $0.02. General and administrative expenses decreased by 17% YoY to $18.7 million, primarily due to reduced stock-based and incentive compensation expenses.

Shoals’ cash flow from operations for the first nine months of 2024 increased to $66.4 million, a 1.4% rise from $65.5 million in 2023.

Regarding the market landscape, CEO Brandon Moss acknowledged the difficulties posed by the current market conditions but expressed optimism about the long-term outlook for utility-scale solar. He also highlighted that Shoals employs over 1,000 people across the U.S. and does not benefit from any 45X tax credits. The company noted that project timelines had been extended as developers were taking longer to award projects to EPCs, who then involve Shoals in the process.

The delays were attributed to multiple factors, including developers renegotiating Power Purchase Agreements (PPAs) in response to changing financial conditions, longer permitting processes, some projects being delayed in the interconnection queue, and increased labor costs leading to economic reassessments.

To navigate these challenges, Shoals has focused on improving relationships with existing customers and forging new ones, while also emphasizing product innovation, such as the introduction of 2 kV systems, and expanding into new markets like commercial, community, and industrial solar, as well as battery energy storage solutions.

Shoals Technologies Group, a U.S.-headquartered manufacturer of electrical balance of systems (EBOS) for solar, energy storage, and e-mobility, reported a 23.9% year-over-year (YoY) decline in revenue, which dropped to $102.2 million in the third quarter (Q3) of 2024. This decline was mainly attributed to project delays and supply chain disruptions. The company posted a net loss of $300,000, a significant improvement compared to the $9.8 million net loss in Q3 2023. Adjusted net income was reported at $13.9 million, reflecting a 58.2% YoY decrease. Adjusted EBITDA stood at $24.5 million, a 48.9% decrease from the previous year, with a margin of 24%, down from 35.8% in Q3 2023. As of September 30, 2024, Shoals' backlog and awarded orders totaled $596.6 million, showing a 5.8% YoY decrease. The company expects to fulfill approximately $455.2 million worth of orders in the next four quarters. Earnings per share (EPS) were reported at $0.08, falling short of expectations by $0.02. General and administrative expenses decreased by 17% YoY to $18.7 million, primarily due to reduced stock-based and incentive compensation expenses. Shoals’ cash flow from operations for the first nine months of 2024 increased to $66.4 million, a 1.4% rise from $65.5 million in 2023. Regarding the market landscape, CEO Brandon Moss acknowledged the difficulties posed by the current market conditions but expressed optimism about the long-term outlook for utility-scale solar. He also highlighted that Shoals employs over 1,000 people across the U.S. and does not benefit from any 45X tax credits. The company noted that project timelines had been extended as developers were taking longer to award projects to EPCs, who then involve Shoals in the process. The delays were attributed to multiple factors, including developers renegotiating Power Purchase Agreements (PPAs) in response to changing financial conditions, longer permitting processes, some projects being delayed in the interconnection queue, and increased labor costs leading to economic reassessments. To navigate these challenges, Shoals has focused on improving relationships with existing customers and forging new ones, while also emphasizing product innovation, such as the introduction of 2 kV systems, and expanding into new markets like commercial, community, and industrial solar, as well as battery energy storage solutions.

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