Shoals Technologies (SHLS) 6 Aug 242024 Q2 Earnings call transcript

Good afternoon, and welcome to the Shoals Technologies Group Second Quarter 2024 Earnings Conference Call. Today's call is being recorded and we have allocated one hour for prepared remarks and Q&A. At this time, I would like to turn the conference over to Matt Tractenberg, Vice President of Finance and Investor Relations for Shoals Technologies Group. Thank you.

You may begin.

Thank you, operator, and thank you everyone for joining us today. based me Bardos. On CEO, be to this or forward-looking with our Moss; making risks call and of other Dominic expectations performance should CFO, call, statements considered and the uncertainties is are not Brandon our and projections assumptions, which Hosting which current be subject guarantees on management results. will or Exchange things, our Commission, those industry delays, differ parts, recover could products the our factors statements. Risk to shrinkback decreased to results the the and non-GAAP forward-looking matter, accurately Securities components economic, those financial wire or measures. and policy related to products, materially includes with potential including from from and in estimate presentation market such our conditions, of described to defects the among availability regulatory problems Actual and disruptions our demand or and related materials. Today's their chain manufacturer, also changes, filings other in failure insulation those price include, project including performance supply for failure losses losses and to matter and references our

of Please refer of non-GAAP comparable you contained website to the reconciliations company's to our section available the the quarter measures see release note at for measures. that should are for the information GAAP Relations here and in financial press the definitional investors.shoals.com. from Investor You second information historical slides download

Shoals audience research Before Tennessee. September be we in analysts on begin, investors that its will institutional X first I our remind Day and to hosting Analyst for want Nashville,

investment our drivers thesis. team management present will and extended growth Our strategy,

tour factory by Formal presentations be followed and evening will reception. a

the available out be over joining directly to us me live investors@shoals.com. those me virtually. With to Brandon. If you're join made wishing webcast turn at let to that, will in please call A in-person, reach also for interested

our cover the Matt, updated quarter at trends team's market followed then you, litigation. discuss outlook. update provide an ongoing and and an our then ITC everyone. second I'll with on Intersolar highlights, intellectual and good begin overview I'll and afternoon, property remediation Thank by of progress warranty

revenue discussing Finally, will was pleased but adjusted before of review and basis by year revenue labor for period, period prior revenue results sales EBITDA. sequentially. quarter. largely market results review adjusted in highlights awarded XX.X% customer report I'll QX and Adjusted to outlook. I'm both We the as exceeded million million a driven volumes points XXXX second year-over-year year the gross prior higher from a and from XX.X% of The we this Dominic, moment. Gross second financial down result declined $XX.X of the who to margins which and expectations, end for $XX.X of decline quarter result backlog the and year and expanded X.X% year I'll XX lower $XXX from added basis XXX wrap margin. the $XX.X have up a record and disruptions orders points but declined call lower EBITDA million a the was for been the costs, prior $XXX.X million with to others sequentially. period, million by increased the over quarter at of period, some broader our handing on

are Information now months. lowest experiencing installs gigawatts June delays gigawatts any up Administration XX provide we installations gigawatts outlook, utility U.S. positive many experiencing U.S. While of from planned solar of XXXX, year at installations in duration. Total of on-time are and delay any prior context, the are to scale we're months increasingly more. XX% X on of XX, Almost and period. are some level challenges XX% And within delays totals long-term are of experiencing To their as experiencing immune Form-XXXM near-term XX% or in not market. Energy

occurred inability into of timely a million continue in labor from high the cancellations of current delays, experience for revenue and obtain additional second approximately year the period. The in switchgear As No reasons moving we $XX the to the interconnection pushouts delay to persistently a quarter, incremental manner, result XXXX. resulting during in and shortages transformers and lengthy remain financing include consistent permitting, costs. queues, these

no delays us indication in We in share have time. as are that feedback unique expectations been Shoals to have with real and their candid these customers market

beginning In to today, that many of strategic promise. focus and of we fact, believe hear show you'll as the initiatives signs are

further is outlook. and and account challenged for this half supply expectations. We achievable year expect critical ongoing book and believe market period full of utility-scale would strong of rate impacting the realistic reduce continued commitments of take you cuts, trust That disruptions, underlying setting business cycle U.S. around while in we experiencing, prudent AD/CVD, of chain well, a retaining was our persists. To very as XXXX timing project election uncertainty shareholders. it's and said, the As term our remains our compelling, goals presidential the second a fundamentals to many timing to our and solar volatility believe are risk seriously

project revised remainder year. book-and-bill and Our continued minimal the for delays assumes of accounts outlook the business for

driving remains near-term sources. quicker reasons. the power data current in center expect committed energy key have the the electrification These time, modes. We strengthen, powering U.S. transportation and manufacturing sustainable to remain for facilities companies these solar's tech solar growth And vital more strong Utility-scale capacity energy. positive tailwinds economical outlook our we to to deploy AI generation expected conventional factors will and in support for with despite major X uncertainties. by than long-term new growth driven in growth the are challenges of renaissance role of resolve While load confident AI, and

remain volatility efforts believe marketplace. what positioned time. the will in uniquely for us, realized and is we building are short-term for long focused of impact business. continue all we in that challenging consistent on we win And today's While we a resilient, term, be more to The to of the are diversified

new portfolio and increasing domestic on attractive geographies previously market into focus share of outside to products our wallet segments, our into expanding continue EPCs will North America. to We moving of adding unserved

in international; offerings. at product you Intersolar solutions new to launching meetings, to in in rows, more many we suite than date, international with for configurations of XXX North-South our our complementing met agri-solar Germany June. East-West comprehensive Moving unveiled unobstructed addition There, most to and customer we

new like of Our certified Mini our plug-and-play and need of piercing features solutions to eliminate Shoals' and BLA costs the globally simplify durability prefabricated The for customers, project on designed their product goals. unique ensure and Trenched with customers portfolio, cut the meet accelerate conditions insulation and investment Smart extreme helping line-up timelines products which, XX% BLA, based versions in capabilities needs. U.S. innovations SuperJumper, with are helping address while long-term Combiner. These solutions connectors, protecting approximately our These sustainability reduce design, now conversations significantly expand international risk, developers. of products

XXXX, an continue East of in to Latin Australia, updating Europe, the collective expectations. XX on than We our target to U.S. America, gigawatts progress. with you estimated the forward We market and opportunity double Southern Middle more Africa look

remediation last sites aware efforts shrinkback potential potentially range a to from displaying related our to changed have on of has quarter. we Prysmian, purchased wire of Since X become former this not update, additional Turning our exposure shrinkback. vendor, our

customers understanding opportunities. challenges to our of to known and further remediate remediation continue work We issues with and our

property the to court's depositions regards early to to but ruling we the intellectual next need on proceedings additional process time. based XX for be against expected and was the of In year. With terms discovery Prysmian, on was to completed ITC our litigation, and originally July are written delayed by working XX, initial legal court's expect August

strong case presented and we a continue our in believe We to property intellectual protection initial of the ruling. the await

customer the on developments exciting front. some to now Moving

market First, and the and I'm the is look proud orders supply half partnership. Wins I'm the of when June in to of visible relationship first a is great existing testament very additional of we've on more look remaining industry who expansion with we've strong long will pleased of MSA. today. into relationship examples on previously also believe saw we encouraged. to see. Blattner, encouraged partners XXXX EPCs an through wallet traction. I'm leader. begin are of add built one see XXXX, the announce this a agreement XX most We we appear productive off our The first this We But This forward to from. top with amount traction gigawatts to is new existing with I'm in with our agreement an of of by even Through the list, the start decline and the the signed shares from deeper largest customer we the the agreement to seen EPC customers we significant traction expansion the master a a with early quarter.

XX June In than orders from $XXX this subset of awarded of more customers. and our of fact, backlog is now million as

they the met We had with I've candid And months, of from to want very customers us. need many corner about with Over conversations of the X turning we're myself. last what them. many we've these believe

We customers the within our wallet all volume their labor with value portion our than of are of ago. our and more trust remains to on In beyond with particularly appreciate quote a the activity share year, customers to compared in is first significant accounts half these Shoals project an XX% increased their exceeding levels XX the a and expectations. Quoting utility solar as by and customers. of just market has intend the at across we U.S. and environment quoting amount top proposition be year support of Notably, record gaining continues compelling, material rising cost. scale is

the about quality We book. our the book-to-bill in X.X while encouraged are the period, of diversification of pleased with positive approximately I'm more the summary, order very by I'm and opportunity ahead. In

Our improving of it customers quarter, recognition in capacity. things engagement each the the raised to expanding result put level of last enabling outreach the deeper over a subject and revenue underserved of industry our of as our including within account. Last direct year, customer is many we mix to pertains and we've place is a

first think shareholders, the transparency education there growing that clear from to the spirit it for X some we engineering have we of and was recognize outreach valuable a analysts because ongoing years. project. We about into going reminding you believe sales and provide are opportunities we've and often market our production, this cycle worth COD years. sales revenue in done that expand through is iterations to of lag cycle, What we also to and picture. While a share to in great our in there multiple analysis installation which it significant believe visibility job you I our when And from the paints may forward. over a cases, excess in it's is, delivery is our

early was COD XXXX recognized projects XXXX For XXXX as Shoals went example, XX% as as in in XXXX. were and as of XX% at XXXX. that revenue the revenue XX% in in live recognized some XXXX, Approximately

it's years a occurring Said angle, in in revenues also associated XX% expansion of with as lengthening, another from also our market today. The will to months, another and growth XXXX projects category of some which with consistent the interconnection us but projects, and not data from tend are customer XX% we associated years function to analysis shared to with Changes prepare revenue that Shoals. of put you on terms, see permitting consistent XXXX to navigate is solutions. What we brought is foundational with activity past the all the for driving. Shoals here Looking observations. what revenue commercial and reported function our complexity, lead EBOS be XXXX. gone have a live see go the our live not after first gained and implementing of engagement in ahead engineering changes XXXX are short reported of the in in the being you to revenues at is we come. That the seen of average way, year, past. recognition this sales time more time in the we've COD, from the market cycle from place to installing quoting projects the the much size than but those at today we X of XX But we a not COD with this been some in cases, in has

in shouldn't of you have is that leading we've surprising we either So XX%, a market, XX% be might it subset that to or were market that served expansion approximately to share. of smaller be X in customers could size. That years excess achieved that did we industry gigawatts the of our fact. to according that What while the with business XX market surprise only do estimates. in capacity belong That addressable addressing of next opportunity, in not projects alone,

designed successful the we've need In already the that. our are a the offering marketing formal products all and is and we function to years. We've going more a experienced that forward and engineers do the in have just launched last customers be staffed to opportunities. capturing and previous structure, future products with to needs Our goal electrical product improved we've voice, X efforts service ensuring marketing new made is marketplace. they meet customer changes to built ensure who sales product have is with The development refined market aligned function than in the their year,

signed sales strategy new led commercial initiatives these process a Our to of business new the composition Shoals. Early awarded by order bring business with pod conversations executing we've it leaders while with we're are is see other and on customers our the go-to-market I've our book touch today year points. this making passionate of year. and experience, and our commercial these proven MSA Blattner's already expansions agreements are scale can like new a customers strategy that We and having improving leverages this who playbook new the been indication wealth of critical difference. Each a in to functions,

improving our of into the today up expanding I'll like while Dominic? will offering for results doing We we're with in are who the our to entering and and we it new quarter existing what what are to customers. With CCNI, outlook for the discuss But EPCs. battery years storage will geographies success service segments centers market year. do data new that us and we financial set so over accounts remainder believe seeing our come. second We to customer like Dominic, our and already turn new that,

Thanks, Brandon, to and everyone call. on good afternoon the

of operations insulation shrinkback compared was compared period matters expense wire the Adjusted $XX.X EBITDA XX.X% The period, to million to $XX.X Adjusted related prior of the XX.X% year income lower prior products the higher fees period was strength working EBITDA million prior but projects. Gross resulted a our in flow patent same administrative administrative year was receivables. and litigation. Net period. million primarily capital wire expenditures margin was in from pushouts, planned by compared Gross was increased solar financial $XX.X from in revenue profit the utility-scale lower was prior increases due compared primarily during cash million lower a to expenses an $X.X million the were Turning in improvement The net same driven to $XX.X income driven year related to period. Cash prior decline and ago, shrinkback in Adjusted in net $XX.X million was was profit revenue in million compared million for to $XX.X to XX.X% while in more payroll $XX.X to declined during XX.X% expense. $XX.X was prior million. flow general the cost by the The year. the increase net were period. largely Approximately adjusted a $XX.X million insulation our in absorption. General results, infringement in sequentially. year-over-year, expenses year-over-year the million for to driven operations in project costs to $XX.X second margin. by and X.X% in $X.X and $XX.X as $XX.X quarter was reduction revenue decreased in demand capital, G&A sales in million specifically and year gross fixed net domestic which the to year. and year-over-year compared million to million, percentage specifically labor legal compared XX.X% year to

XX, This up Board which June share repurchase you in million launched announcement first of to read program our a which to the shareholders. authorization week million through that our third an price completed million shares likely XXXX. quarter. initial funded an for in an last repurchase long-term under was we of per In hand to $XXX cash total, $XX return towards included repurchase, accelerated allowed we believe capital As an with December X.X provides share our using June, approved June, just share. We in and opportunity $X.XX retired us on approximately attractive allocate average the ASR quickly in at just

As on price reflects last call, creating. believe we we are current value not the we earnings do quarter's said long-term share the

expect so time. And authorization be over we this opportunistically may used

to continue the flow evaluate M&A. deploy but to which free investment and ahead, we opportunities first will foremost, our cash include includes We core business, strong also see growing may

We will the strategy. our profile prioritize that those most opportunities with with attractive aligns return

assumptions, the at Brandon knowledge shrinkback, at range insulation and as current to remains and million $XXX.X on remediation our $XX.X low high Moving on wire based million the end. the end mentioned,

efforts million as warranty sheet the remaining in remediation balance million. $XX.X of $XX.X the $X.X to for our the liability had cash of During remaining quarter, now spent portion is million shrinkback we current June XX. The a related on of and liability second matter

represents As consume quarters reserves This as remediation by our X change. we than a our will more and free knowledge assumptions cash cash or from flow amount increased facts any reminder, of next the reflect if we Prysmian potential this efforts is estimate we recovery or expected period. covered not does over continue during same figure the of the

of from debt and we quarter costs sheet they seize significant our a balance we our managing year strong. growth. liabilities, new and Our of flexibility adjusted the to remains to position which arise. X.Xx crucial use and is efficient X.Xx, very EBITDA ensure reduce XXXX. Optimizing financial sheet as the opportunities and X.Xx down assets maximizing can balance company improvement carefully is long-term of By with as ago And net from a ended to QX capital,

and Turning backlog awarded orders. to

orders, as and awarded awarded the increase and million $XXX had million an during June year-over-year of As orders company added XX% backlog backlog period. the XX, we XXXX, to $XXX.X in of

lead-times and winning historical revenue realize months orders to orders domestic been XX of some have revenue beyond from are previously of longer our X As discussed, that extend we have international or orders. have than domestic jobs our we delayed also to cycle awarded

$XXX June $XXX in of of dates the approximately with As that. our delivery quarters, the coming remaining projects million backlog million planned awarded XX, order have and X beyond

We for are XXXX we through sit halfway where comfortable and next year. currently are

Our reasonable and level to XXXX customer into by a projects awarded for orders of continue at is our team engagement encouraged pace. sales come the

of through As in period clarity coming more as intention of our market way you takes gives you we to there uncertainty, half the a is would in will year. make be give second quarter. But expect the and our the

result the macroeconomic and other industry uncertainty, business company Turning the factors, to now quarter to to now for of remainder provide we expects conditions, trends outlook; be business as a third range guidance million. $XXX quarterly in $XX million current the year. the of on continue and current will Based the to of the revenue

range figures in range be $XX for million EBITDA of $XX to $XXX of of to The full experiencing. EBITDA reflective adjusted be adjusted be quarter the million be to XXXX. for adjusted lost to net in to quarter Third want of million to in we $XXX the incremental operations these $XX range to now the million turn million. in the be the $XX expected I'll income million in fourth closing the $XX million. in $XXX the million to reflect and expense of EBITDA $XX million revenue $XX to of industry range year that, changes $XX in that in the over Capital million. With quarter million, revenue Brandon is range $XX range range I million, to it This the be interest of that of $XX cash we're to $XX to flow $XXX fourth $XX company revenues in to stress back million to million million the remarks. expenditures and to be to timing million expects imply projects. Adjusted $XX be $XX million. These believe and of range of to of to million the delays to from not change be to range is the

markets an color and why the you, by is close so is meeting is problem. AI not center power. in providing like what to at are on Thank are going AI operate not is struggling net-zero much enormous to center additional production we Shoals. is race not Dominic. remain yet of the solve seeing which meet positive clear. And we goals. transformation arms What data requires an And would done some on I demand. clear Energy the we just to operators. amount to operators that the believe their That be you're it's who in data

Hurricane better. X.X robust people Texas following power last days You A is month. without more might not Beryl getting in grid million among critical. be It's the worse for

can that vehicles haven't electrification require rate not into We on more where trends anyone it's of it the is see And while transportation argue and up we grid. less. road the matter electric we of of power, All will today. believe us more the No inevitable the are strain the arguing right. adoption, the we embracing seen look you

and decade category stand to the up need often certainly coal scale compared We given estimates know market clean, economics. navigate. We power utility nuclear, or the more U.S. a brought hurdles as solar. for more you accessible could to also Shoals which It's most provides bring online, to regulatory EBOS certainly take the than fastest know and solar to the compelling say that to

our an served readily portions the many The the and available, provide Those we history solutions Shoals. have many large in of know are And utility there experienced by need the is are generation U.S. are rest already of that is and those while not have of begun. We and not. EPCs distributed EPC market for been have discussions here. of issues high-quality engineered cheap today of of same that solutions same labor exceptional customers. the world navigating engineers We electricians custom are we

new to us market introducing international opportunities from hard opportunity look We trust future. our we efficiency And successful up the strong customers paired capabilities including at know talent capabilities, have why the and and for are and productivity shareholders those forward the us. have to know of mind. These work. Operator, products Shoals we is a business operational the that how excellence, well set team with introducing also market hear their is when foundation and we I and you for partner We optimization top is meaningful questions. we customers are discussing for to want now members, directly with. ready Day take Investor letting chosen and our our those employees thank to our do they their now for

The from is Instructions] [Operator Sachs. Goldman question Brian from Lee first

guess environment you X peers pronounced the again, one change I here incremental I out for I of straight first we have had what it underscoring to versus been I revised months, and the for the others. was guys there just biggest about that's past the is guess, the maybe guess, like is downward understand bit means fluid. But delays there's in on, more the over the has how numbers magnitude been talking a seems terms it outlook, your quarter. second what

know revised especially factor be that -- this X potentially I this going competitive for be to So case. you might why with landscape share specifically? And reconcile what's causing any on can then months the concerns update? that idiosyncratic the comments past just had just and What's because being incremental a trying follow-up. you the over I to around an there's changed And also maybe outlook

in us talked pushouts about for million project to $XX it's more thanks. question, Brian, Really, of same. tackle big I there. We picture the quarter-to-quarter the about of first guess million first. the to is a first quarter. this $XX Good unpack quarter. had We the one lot

volatility, the projects. short-term projects us. remind that know frustrating. frustrating these I'd Again, It's out These for right. are are the So not pushed everybody, I lost to it's are

or competitive $XXX the adding showed the feel quarter I and than As awarded a it our million record to of this book-to-bill X.X. ever ratio discussion orders landscape, around growth $XXX of We backlog million, and execution. and levels strong commercial relates awarded about better of to around the question backlog order

So we're I like executing. how

to our our the commercial we're diversity of which and agreement like new by order gigawatts, as is evidenced Blattner the is our execution about exciting exciting unbelievably think also our XX I of book. quality organization. What extension for customers executing this is extremely how

prior improve. That this you about and top backlog our If last was talked order awarded our number we've customers. related orders of in calls, customer year where book subset. think had QX, and awarded share a period is that made million orders handful of time, up to we about now we XX% our previous $XXX is backlog now lost XX%. I to XX wallet and needed about our of of customers

So really happy with commercial execution.

are with how on challenges think I we again, not challenges. happier we're customer be I the unique market-driven Shoals to or the And couldn't executing that side. face

you think I have a follow-up.

Do XXXX? sort deploy pushouts of that million 'XX? year? Or you've close No, asked your and Yes. QX have projects. not visibility QX, was the of $XXX of into will to given to progress pushouts, between you through that's your $XXX color. and ship in of the comments You this indications in the product super lost of first guess, I what's that actually part almost helpful it's that that million seen recapture from to customers going be

I've as most project look, past, probably and hear interconnection The the talked myriad so, of reasons, a is about pushouts we challenges. what permitting site -- in Yes. commonly

these projects, a So look on project-by-project we at everything basis.

have We into XXXX. pushing construction schedules our in And cases. these projects customers and see we many out

is delays are Now There a going past, challenge the half project those asked and question We year. the plus X X I for X back think the still for this into in of these persisting are challenges XXXX. us. equal been see I've to

continue So a to on monitor we Brian. do, projects project-by-project will those basis as always we

from Co. Strouse Chase is JPMorgan from & question next The Mark

of whether to can you of you're discuss booking previously. ASP that that trends and you've new in orders if the remaining Curious about kind range mid-XXs these gross that should your margins for talked we think low

of of headwinds, out, I've Just if those it your pricing as trying kind be follow-up And specific, power? or headwinds well. company these are impacting any if to feel industry then got a

our to Yes. of for the hear changes no from to to question. Good Yes, margin XX% XX%. guided Thanks you. Thanks, Mark.

forward moving this in numbers the So we environment about those still in future. feel and environments good

to agreement? much XX include to new And anything you're a And of original XQ are this able from how then follow-up MSA The the say just that does then Blattner able you if gigawatt bookings, outstanding? clarify. is Blattner to, with

Yes.

project. are So have because commitment substantial company backlog just when varies of to EPC engineering and set. a awarded and awarded And from think do the on Backlog how amount on. peer they it a customer, we I verbal we've orders, the work company of amongst a design point got that orders our won clarity the from we for calculate calculated have

case the this we backlog projects and the are won designing. nor in haven't be Blattner future started in yet agreement, would gigawatts because these our XX they of the in have awarded in orders included new in none of out which new So

got agreement in in although not place, So we've included backlog it and is awarded our orders. an

the as far can we'll specifics, as agreement, the halfway point. of think As maybe original at provide that you but

The Truist. is Jordan next from question Levy from

on It's for Jordan. I questions here. Mo have X

on First one, guidance being activity? have next. know year about in And still I process in XXXX. But mentioned the based give the made a commercial are follow-up. press and you are there thinking planning for early it's for current I activity your too levels this release changes you to how

Yes. Sure.

at we a during question, our have remains mentioned, backlog Brian's commercial record love orders high. that We're still an with very ratio. reached I book-to-bill execution. levels X.X our Quoting awarded pleased all-time we're As and and excited

We've we're some doing got strategies, strongly So teammates. new commercial area. we're And that about in well we quite how think new I feel executing. very

XXXX. call with XXXX it's these and As the given on the goes, too just far the of projects around relative as uncertainty volatility early delays, to level ball

have So I'm to you that. Do follow-up? going not do a

and continue Yes, great ramp international of as to to a backlog. increased it's see percentage mean, I

are like you markets? mean, that Latin Africa, America, So seeing the mentioned? slowdowns? I East, how differ what U.S. you in project does Middle what dynamics those of from just seeing terms And you're in in

booked I Yes. large projects, longer mean that cycles. business we've the say I for would international got sales today,

the just not projects As as of are you a be here easy can at is in all in construction might imagine, as these state it U.S. core its

mentioned, I market leader about excited international remarks, of in a biggest project probably to as got that longer So XX We've cycles prepared business. is for the gigawatts opportunities. out. Look, the new point thing our we're opportunity

from ever the launched and feedback been has June just our of gotten in products one solar time have in largest We fantastic. we've suite we've the launched customers here

focused So I great come our markets, so being more developing chances to growth international, made. in organic but our in like progress on local

from next question is UBS. Windham from The Jon

I was gap of bridge hoping you had could the I pushed just out XXXX. $XX mentioned XXXX help million think to on you

could help more just million. that, However, Is really it. the to $XX I total get to appreciate I $XX Just business going revenue if that was not bridge million that's now? happen count you go like think

typical into and Thanks, in Yes, million close within XXXX. exactly so Jon. business marketplace book look, $XX And out us it to made Yes. pushed the turn has for the difficult this volatility year.

us. to nail projects good that's out head. you again, I those hit the pointing the pushed for just And mentioned, volatile what on on a project you the So business are gets mean still that that the you numbers out, market. But challenging had

in the canceled right. projects no to reiterate, the to out quarter, just Just pushed

next of The Colin is Rusch from Oppenheimer. question

you historically? what been where quotation that quarter? your rate to was talk And compares during Can you've activity the how versus win about

now not U.S. are Yes. have going have one XX% to we Shoals underserved we've past, was specific the available the win that solar market group the and scale do utility with will underserved. not say, either aligned that a by basically we have aligned total I of about customers though, not that we was rate you. being we not customer our from with, gone today. of Colin, That going due What to past. good in of hear us just whom talked in identified -- is to One, approximately disclosed

rate had XX My that jobs. think hopefully win and maintaining is for over I years strong will rate a approximately of opportunity now X that win applying Look, Shoals segment on has this gigawatts market, of focus of historically period the XX% us. to a So it represent new

those out baseball look average the plans there. plate for batting So I but appearances increase the for also stay to to strong,

excited our again, we're So execution. about commercial

And you customers hunt a incremental whether gate Are products adding gained you're products. actually of new start over talk finally obviously, customers the you're nice projects here? new then Can Europe, with of your in product them or because on these within just it's where about configurations. the the existing

in and new to develop with customers, have push we of The just for add portfolio, the allow goal U.S.-based point of new our Colin, sales offering for aggressive opportunity the been products product right? for the markets. international which to is us, really this Yes. product many marketplace. didn't That's lack in localizing Historically, attacking call it, terms, better much a

And is success drive I with focus And then us but our countries, for our serve customers, new regions production, some great had trying continue making localize there. to we've in focus our cases, export our so new launch and in which assortment. that organic localized done we're opportunity our product good rather. again, growth the to to product with, also we've headway think So

from The Capital next question ROTH from Philip is Shen Partners.

the I price follow wanted topic. up to on

you some price may to tune Some X% with your have of our customers lowered the to checks channel recently of XX%. of suggest maybe

affirm that way? fantastic. can then contracting or are raw here. is can you cost had exiting But material you've in would one-off know to that I pricing increases helping or then as mentioned you able margin, increases out so And might maintain copper through, it confirm some you such you're outs is the that board? all this it you it's way earlier, that? if you're that a the any have through something you passed be be if talk wondering And if because Just with across that is in the

commodities it pretty changes strategy hit in that And is, we sorry, booked. no fairly answer in the marketplace. the consistent, raw with I'll look, to procured you head, and pricing that Phil, our our our is huge has on through flowing have simply inventory I'm as Yes, are feel where inventories, pricing materials we're exposure project projects basically products the don't -- are commodities remained

hearing dynamics. strategy some the I but pricing appreciate checks. to yes, it our like marketplace, channel sounds and happy to change win your projects no in we say, you're I'm So

you we identified guys yes, have And bookings. continue to do with well

the that in. could 'XX. check showed like share it accelerate got as wanted us in seems And and could through back to to just win I You you we half bookings today.

the front-end bookings kind element. the of kind that's of So

down noticed But a an of specific we've the wasn't in reason. You main guide amalgamation since everything change has was kind that there the call talked market about QX Southeast the your that's XX% Asia and It happening. that of one earlier been with pulled the of owners, pushed think most AD/CVD. out And asset as the XX reasons that cited the Asia yours, Southeast XX of there XX% customers why. them and we of -- they of cited of them CODs when been I

that's maybe back of Asia coming availability. So not terms they're to Maybe Southeast in specifically. module you saying

give you color Asia a one could if a a as down? guide reason? be actually Southeast key as And the us result, of more curious module drivers. can little Is availability perhaps, the to AD/CVDs Just

that us. is Yes, Phil, I is driver. for It AD/CVD a driver not a think main

So as reasons we swap we being And a of pushed pushed modules a get the really why projects our out. redesign understand are also products. those out, to incorporates

is also right? So from is And heard ones on top I you interacting from with list. customer film, that it of to redesign not moving and are big every probably reason. bifacial we've get. day reasons but Sometimes the mean is that more minor our thin prevailing these recently if design those the and feedback permitting team the top were a reason interconnection. sometimes The is significant the that thing site redesign, projects. the a permitting that It customers and working say, site being the I a

is the it of not now. the a it factor, guide is but factor So

one. think some around for be? last pain persist time? permitting can the peak corner? mean, site do you Or have for a One quick is on Do and could I it interconnection sense when this you

I we're turbulent and think ends I soon, the times Yes. in permitting for Phil, I wish backlog interconnections, think the I with I foreseeable for do. mean future. of here right? Hopefully, it

a It's for for our customers. a challenge us. it's So challenge

The from Securities. next question Maheep Mizuho from is Mandloi

And projects or earlier. guidance push margin to understand just Or here; gross design for out just I But of the here? or function is in revenue as required wanted decline more half apologize work volumes some if sort -- a here? the over this second customers was of margin EBITDA the the addressed the any gross

operations for the question. expenses. Yes. some you'd SG&A side and it's Thanks, on to it that, mean mostly just Maheep, leverage our kick you over to leverage I color Dominic, like. maybe to I'll if on give the Maybe the

left we're of projects the for want second our called be to deliver of the production. quarter. have push, only less to some X And some difficult to ramp. lower careful the the would being these ramping we is workforce. with ramping production kind add thing delayed, Yes, capacity We're ready factors of that I desire. We fundamentally, than the don't the it's as when we trying we're that force efficient the to on in with customers. it's projects are out how numbers. We But workforce But those whipsaw for as between about we're labor

little are of we bit losing so a leverage. And

or any them going at buybacks how on And I'll the forward here. prices? on go just of those exercise thoughts kind would you or to And what

Dominic, do you want to take that?

Sure.

with And that's we authorized So We $XX believe we hand. expansions perhaps looking million $XXX that the shareholders did for been ways. term to our to a number to But fundamentally, in want on million. open things value M&A. cash just Board organic start markets we some better like up yes, at for and long growth, the you be as of our want recall, to very ASR much and a We have completed. international

can want to So a believe on the we dry from that value to repurchase. I long-term don't the drive. long continue disconnect Clearly, share the all that happening it's where we with a powder price is up is, it term use trading necessarily, we stock believe

something $XXX But announce at we if that we with has think this available don't million announced. I would announce the point, else repurchase, share publicly. been of So nothing

Sandler. Harrison next Piper is from from Kasope question The

market one, it's predictability that given first So all just deteriorating. commentary, the is my recent guidance clear the here revision,

forecast. And in could market some back us avoid the trying to give what November. so just internally when some color on I another are you underway call this here improve we're on maybe just I'm to you're guidance understand revision doing to was initiatives if internally your that wondering

labor, weekly market. right? the know from question, are this fair Dominic using, as these EPCs It's EPCs. much on monthly view information permitting, at question a proceed. summary they're using, the notice to and frustrating. experiencing extremely the us. as Kasope, a panels touching a what It's collecting challenge we're we to that's a process. for stuff for can, as touching a And Again, got including thanks projects, and we're yes, basis out. Look, a frustrating pointed what We're looking they're we trackers on basis. I We've plan volatile

is a collected weekly on So in that our data reviewed, as it's said, basis. CRM. And I

So to can. this call as we thing we're as trying accurately

challenge Shoals it's now. look, unique months. our XX the in And is it's we've seen installs to right customers' that for are not a think, lowest a us challenge predict On-time I delays. to

We So good now. yes, estimate the the for of again, a the feel back it's about give guidance us. I year. know it's frustrating our revised right half And best for we frustration, it's can

like explain the or there year-over-year? How quoted value for between was question, just my time follow-up the elections? other on just being down that a XX% Or you lag? Is but some explanation, up going being think, Is there? the year-over-year, What's do maybe And you indicated what's story gap up, there? think quotes that orders year-over-year. I quotes I

-- then to in time is couple a of purchase just order terms, been It last to takes environment. an identified a quarters, the and Yes. elongation it. Look, our we consistent it's order these project to project get That it about there order when of we've change we cycles, elongation backlog awarded the think the is for actual status an to that. awarded the right? about When much have talked has to here to or

a think least because is these think at period-to-period visibility, thing, to it We XX%. up projects, so are standpoint better backlog quote now. to longer the a volumes visibility from are somewhat volatile also, got that terrible up. And if about term; you again, not from visibility, year-over-year, have it's I conversion awarded just order right then revenue. Again, it's although we've our necessarily awarded orders; and long

Donovan is Capital question The Markets. Schafer from Northland next from

us, you've time But with could international know in I a to guys XX% tending that that the towards commentary like provided system know boxes I like. have first, look conversion sale. some I can is even remind longer anticipate that can just more backlog, with But the And or combiner boxes, you there. via before. So type? on trying what BLA is this combiner that you And towards it of think kind

would So is just is sale BLA, of more component the can combiner it that it unpack more the box like be And or you sale? a design more system or if variety that of great.

Yes. not Donovan, internationally I most to going less. of awarded are, orders We're than would give for our but specifics, sale classify they more backlog solution the solution a and sales. project is part, to project

And combiner are box? primarily sales the solution

probably solution So is They're those, part, sale, solution would when full And good component sites. they're this. not a engineered a a Yes. we for talk I to I say about the a way sale. this most case. include characterize mean custom in would BLA

about as a the many or it's win had didn't it customer like you something. wallet back? about we included were winning share still won we did it that, almost -- a then the you the actually share what it's so project, share. And particular if management when you curious of And sometimes can some component is well, describe maybe for gigawatt market and I'm solution lost But had much wire sort project. you say, we to you customers you wallet where you if you wallet project, Or you the that to follow-up, say of get about a case lost and where talked not say, a projects could could clarify talk but given of regaining a how as share,

Yes, great question.

would are the Your share, characterization wallet what of of you both I say, case. described

the You projects. asked about international

to solution, total goal the want that to our value selling time right? customer sell we're total move team's goal, solution. is the not Our continuum sales sell the and So up total solution, the any we

it. So part of one that is

each from EPC the whether that want XX% with We grow is we're or part XX%. projects more and to we make year. our XX%, spend customers, doing getting more of that's other XX%, sure The are amount them to

So in situations. it is both absolutely the case

done? that cross-functional I've think us Shoals relates probably anybody about folks terminology in it team is what pod that our have don't a It at of we that's this us sales to serve to previous I there. mentioned customers. to are structure. distinct adopting out think here having As new I calls a EPC

and we touch backlog is and points with is we've new attacking base. of can the up been the saw customers share $XXX past. And serving total points driving got that customers, on may we more fundamental orders and also We're market cold-calling awarded have business grow wallet they the new XX% where that that change our So have so with million customers think the account I touch broader in within decline. our what available executives, customer not growing freeing and frequent of

that So good I doubt. EPC I so no agreement progress with being seeing. there's we're like made fact second the with EPC in new And side like in an on signed which the that what seeing the we I'm orders supply great, announced the the quarter, first quarter. we was another commercial

Matt This would over to closing concludes floor to the question-and-answer back like the comments. Tractenberg turn session. for I

Sachi, our you thank joining today. you, Thank us today and audience for to

to on of webcast additional investors.shoals.com. can X. join Day out be accessed always reach is our day, any we're happy IR you. have finally, questions, Have our a Investor to at September website you to welcome our If investor@shoals.com, And That everyone. help on everyone great live

concludes today's teleconference. This

time. participation. disconnect for Thank you may lines your your this You at