Shoals Technologies (SHLS) 12 Nov 242024 Q3 Earnings call transcript

Hello, and welcome to the Shoals Technologies Group, Inc.

Third Quarter 2024 Earnings Call. My name is Alex, and I'll be coordinating the call today. [Operator Instructions] I'll now hand over to our host, Matt Tractenberg, to begin. Please go ahead.

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

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

pleased our and is growth I'm on review Dominic many outlook the quarter with some the provide we're and progress our good election time then financial operate customers, the thoughts of we're all behind then of you, remainder and us. results spend that we the some and I'll some provide making in. on Like uncertainty on markets you, by events for the XXXX. morning, begin new everyone. will color I'll Matt, that sharing discussing products opportunities. navigating current Thank

utility-scale seen bright. volatility we equities, U.S. solar remains in outlook for we've While recent solar believe the

While harm solar industry, some are both are is states that new parties. storage. million concern red to tied will Those administration solar remember important domestic there jobs and policies to support that expressed in jobs it and the almost and from have enact have blue X.X the both

had districts Xx almost Democratic advanced fact, the districts national X energy of most by In enacted. clean lawmakers. but energy, the clean has impact are that the clean attracted the occurred not energy than districts IRA since led meaningful congressional local Republican investment top on only XX political Republican investments, in more IRA Of and congressional affiliation. was The has regardless economy have in

the elements will we X While does well. that of solar energy Shoals U.S. the employs X,XXX tax Recall we may believe clean see people over in XXX years, coming across different receive not any look credits and some the fare credits

important solar and our globally. of As bipartisan now the Industries In clean a need than more transition energy we've the Solar member for to the in meeting done Association, before in of America. crucial both the we're the the to advance opinion, proud more is is ever and power, U.S. increasing Energy industry work

extended most recent The belief in time While efficient our position needs, reinforce immediate nuclear telling. with needs. in power play FERC energy costs the ruling and rejecting the Talent addressing will role agreement for power near-term future associated projects solution a the and is nuclear solar's Amazon lines as

the in celebrate. are has when developers a lengthening. and by with customers and headwinds as form creating know. much standing, the a to and always project deliver as remain term, we near the the solar positioned panel term. year, current you Delays our size, is of EPC it for And that we we geography be all over turn, this from we've will possible. shared quickly across been to I'm need tracker. as by In on us us projects some we of continue deploy shareholders today, lot to to the macro focused believe the our help and efficiently But and are are EPC of timing seen will We power customers value choice there's to awarded to and long navigate, and or for reality where There others

and renegotiating at to with these In fueled EPC. continue and here neither depth financing required remain addition, weather. our scope the unique interconnection some permitting of the in in point. and have queue one is projects has they The planned. ever-shifting review needs costs turn others, color charts, onshoring of In rapidly to close longer projects. is than taken distant power given the We construction too financial the relationship with the the agreements adjustment canceled another not and PPA our or in are the yet and that a our remains placed In the are off to the labor without customers increasing developer AI, you. is to are project's economics. projects offered related industry others, our hand, cases, independent volatile These customers, by assumptions On and of some,

actively more the seeking deploy, more is and now the generation last U.S. increased plant and total regulatory solar by It's quickest of time decade interconnection. capacity installed eightfold On gigawatts is currently issues. chain grid X,XXX lowest existing to twice in than and the capacity the supply than fleet. storage and of power is challenged There the but other among LCOE hand, are

a not same will continue time scale in last year flexible believe July the to XX% close are ease do of issues than bottleneck, XXXX. schedule. XX long XX% solar queue term, data and accounted capacity of put, projects this EIA percentage clear Simply it's delays are the of the remain I'm we the for higher XX% year, at That active percentage Solar, and confident of these been is our on the the and utility in stay battery in customers. on these as so but Based of wind double XXXX. end of We and delayed. only points time. storage will

step protecting very Revenue team's determination range by December for came within execution. review XXXX. The potential Voltage. for $XXX.X the ITC In in this This for We intellectual extremely presidential August, and property. date our following from victory of ITC solid an completion initial infringement investigation as a the guided is important late million, February in us. scheduled resolution was driven view received target quarter final our favorable busy at in patent our our Shoals regarding case against a

stated, case. damages we previously on pending As our plan in pursuing district court

of new our In strategy also team our September, product objectives. our Day, are ensuring road We held to a which growth faces is We lots and leadership financial map, for of available a we opportunities, presented X-year same first level and committed website. BLA shared our introduced comprehensive receives the key Investor portfolio replay our patent protection. on on expanded new

value. We and our believe shareholder will continue win operational marketplace is drive to strategy in increased sound, will we improvements and the

issues September forecasts be and conversations We the also from is industry transitory prove can industry growth customer conservative. that agree alleviated, of Most again the that came at for increasingly RE+ current in optimistic. could some poised if away

near Our organization prior our by commercial results high is deliver compelling are as updated beginning investment evidenced guidance, to value end proposition, new our which of innovative revenue outlook. products the in and our

we not and We in watch incremental proof encouraging on the are alone. our with We've hear we've exceptional billion but and of that the even improving The projects It's more are We've and agility to customers in this products. now establishing how addressed, the only purely care is in customers, with that deliver feedback. to relationships strong appear taking our and almost year points built relationships of experienced existing exciting new of increasing flexibility market XX% the customers. pursuing. quoted a $X XX% the we team worth traditionally focused

orders. $X XXXX, revenue there XX record Following Those revenue of in the million EPC customers ITC X X of in of $XX large Shoals. our initial contributed awarded we our than new have with the than less up that very EPC earlier year were X million driven be going signed to revenue we this shipped new and first one In this so largest a MSA U.S. more customers. to project year, the have combined an gigawatts top forward. combined to a far EPCs signed and we've And potential year. backlog customers ruling, same have They X

proud very Wallet made and in of portion of It's the diversity of backlog. that we've The signed very order remain book. our that amongst results, XX-gigawatt no progress plan MSA customers and the that our is evidenced are by We steady commercial our I'm yielding pleased our worth this summer. we've noting the as made. we XX-gigawatt largest share MSA in quality are investments with

have we the the cost This of an solar game to to a on sustainability in for are change. commercial great energy installations. Some cost by transition higher impact. have watt is reduced volts, dramatically solar expect XKV of changer, advanced been seeing example. this the the front product renewed efficiency, system the to voltage projects utility solar a of drive electrical especially to a production, Shoals is to effectiveness Previous commitment is is we scale the innovation. increase and designed X,XXX success improving driven and a they've uniquely transitions per because to positioned voltage to XkV similar

GE looking XkV their We showing have with industry an leaders business. customers and exciting forward we're can Vernova, change to pilot plan how like

our market U.S. pace. of XX% One approximately of at This we attractive of Investor in was is an the solar September growing presented initiatives the but at Day growth CC&I. size in the utility-scale

current our capabilities. many expertise manufacturing products and Additionally, strengths of our we application it believe leverages utilizes and and current

Our natural value so well, believe proposition a fit. as to these we it's customers is compelling

coming the on wins where today, than to products different. right value We expected the recombiners product Battery core heavily. veteran proposition opportunity largest disruptions and market. by team to project an our introduced summary, gas. builds one on another at I In in and come far no very market understand the excited signed efforts XXXX. compelling. experienced we made feedback already unit, are customers We've is sound exciting quickly, size an also sector the In today new state will opportunity We always is within in years to we and been forward and disconnects. there to have so numerous distributors strategy through configurations the have and in stepping solutions sharing quoted more is market and XXXX. and conflicting bring. going business industry and And shipping focus have on projects built investments views space. the focus, to of issues RE+. growth momentum business we're be is We product. market, of the an the fit often what address experienced proud as this marketing We specifically commercial summary, In this we've are XXXX XXXX market storage energy begun on believe the increased we to on heard in XX positive our one believe investing with macro and look recognize our this Our experience CC&I significant navigate, I'm there or from in about to development we've hired standardized to in how We've far, more the lead more while double we're we we're XXXX the is our that agreement The of significant. economy. even so and the

we're I'll confident where Dominic, discuss financial that, and those the list However, attractive with Shoals in a team. turn to over leading of of now high-quality our the company underappreciate and direction the our markets experienced challenges. the year. are an it market macro companies I'm in we Dominic? have results share remainder on marquee quarter markets with third in who is of outlook a navigate customer historically abilities to the good impact for disruptions will very downside overestimated With headed. and the

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

Turning our financial to results.

discussing a million X.X% increased year-over-year and increased to million extent, installation period. warranty This in in million percentage prior recorded back but Third all that XX.X% revenue in year moment. net to quarter some to The discounts largely of detail was lower shrink excludes and charges, gross $XXX.X profit to a driven GAAP been decline period. was project higher a gross revenue by year-over-year, the which Adjusted operational degree, we've absorption. lesser to delays, XX.X% net dynamics, We percentage, profit XX.X% declined lesser this $XX.X sequentially. costs, the I'll competitive remediation in by related year charge, profit labor in XX.X%, effect the of customer current million discounts charge to resulted on fixed cost in largely compared provide the $XX.X Gross volume a mix. period. driven compared and more $XX.X year the prior wire which volume to nonrecurring

driven the related $X.X litigation. stock-based The We profit margin million longer the Adjusted compared million continue Net and gross Approximately XX.X% to G&A to $XX.X percentage compared term. to was EBITDA $X.X year-over-year $X.X compared adjusted during and period. wire XX.X% prior million primarily loss year incentive largely insulation was EBITDA million in related the prior to Adjusted million income General period. $XX.X shrink year year over XX% during Adjusted the back profit to and decrease adjusted year million of specifically a was $XX.X target expenses million compensation. was million in the expense $XX.X compared G&A prior lower were of was lower percentage. million prior ago, by to ongoing administrative expense the gross year sales period. loss period. to net net $XX.X to in $XX.X was compared

together sites or other As status the identifying resources, required variables, And remediate on expense continue earlier, to gained time the operating to back some like to harnesses spoken the provide disruption the to while performance range. remediating additional a the of the hard and the Prysmian about. sites inspection while and of wire we to understanding minimizing the field, problem these on I'd it the field. feel requesting with we've providing you have a shrink been quarter, new of in better variability our of per fallen Due We've to I remediation. prudent has warranty these mentioned wire pace color Prysmian working X we X in to of

that we are to tighten the the We on we been is while site this higher not. process, to completing to estimated we've low this the is the low increase noted end efforts. sites of that on potential the obtained of low note As sites point high believe of some At back end exhibit in anticipate a end of range. a remediation shrink identified in information and to the quarter, range quantity inspections sites. additional continue in on It occur, not with of track this function the others end, to do pleased important known that are higher the based now remediation, range million able of supportive outcomes. a to plans the quarter per us $XXX likely We time million $XX the required at is mid-XXXX. our have and Customers our cost in

September current warranty that During remaining as related shrink spent $XX.X XX. $XX.X balance to we back for shrink remaining the on of The now is quarter, portion in had million. million million back $X.X of of sheet our liability cash remediation the a liability and

this This consume next as of continue if or X knowledge we reminder, facts a recovery will remediation not our potential change. of or reflect we quarters during cash does the increased assumptions Prysmian any amount from the we efforts. As reserves estimate represents

flow this more be by period. figure expect our than projected cash will same the free over We covered

Cash fourth we and of $X year. change expect that XXXX. written This will our will in was spending progressing now in the our the depositions legal capital by in timing new $X.X reflected around planned, timing of we case from consolidated to while guidance quarter Approximately a million provide as move CapEx in anticipated call in be today next function planned will the Prysmian in revised our $XX.X against provide we occur February. factory I'll to purely third were million. flow is CapEx million, expenditures and be completed Our mid-XXXX. operations discovery guidance XXXX is This XXXX and quarter XXXX on

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

is third million repurchase authorization. the normal to initial the program. were in XX% as Turning with under in shares QX. funded XX% million X.X the million was our repurchase of second or share ASR. The practice of quarter an were currently repurchase $XX share the this remaining shares year. approximately total $XXX X.X during accelerated There The share quarter delivered repurchased approximately million or is remaining delivered

We cash yield shareholders. believe we that opportunities for highest will return deployment continue the to evaluate the

are While the $XXX.X flexibility that intrinsic our to to million, million, we awarded sequential continue at Backlog trading of market largely function value value, a third below believe current we given the our of awarded liquidity of the timing a provides. $XX their uncertainties, the shares and customers. decline projects ended current quarter orders

seen we've million awarded However, quarter in to of last of so fourth notable as strength almost projects week. the adding $XX new orders far,

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

of ahead optimistic We cautiously as look the and XXXX are to up coming we on are XXXX. end

of cannot a they to products timely the costs work control we the to our complete ensure While in solar equipment and manage we availability manner needed or from responsibly. quality get electrical customers regulatory environment need the fields, can Shoals to

year of range million, be range quarter to in EBITDA other our in for the revenue XXXX, fourth to million. be in $XXX Turning to million. $XX million $XXX imply million the range to business quarter now full $XX that the expects to for of company of be be the in revenue $XX December XXXX, outlook. $XXX business to company and adjusted trends $XXX adjusted million the factors, figures expects million to $XX the the XX, conditions, and EBITDA now Those to of the Based to million on range ending current

for range million, to range the $XX expenditures back to million to capital net interest $XX to million, be the closing be of in million. to adjusted $XX million operations be addition, the be remarks. $XX With turn cash income and million to to to of Brandon? $XX in in In of million I'll range it the that, to expense of $XX Brandon $XX million $X over from range in flow

Thank Dominic. close by on within navigating to place Shoals. believe we a some and the want at cusp you, environment of we're at sector. I offering taking the color additional meaningful the cycle the We clean energy transformation investment are

we've Our Mackenzie over customers, and segments, to we At market incredible the multiple financial cannot our and We've utility same processes, share the and EPCs wallet will existing geographies shortfall and diversify strengths decade is long-term the portfolio. at identified model to we back that seen others. signed growth attractive Wood strategies MSAs deployed that marketplace. U.S. ensure winning address detailed favorable with the with in capabilities We've we continue new are the recognize the us energy to will traction We've with fail the conservative and the enable win realistic leverage it. help is new potential to length incorporates market, our products of believe solar expect position or in achievable. solar time, next which outlook ignore scale we in

and all exciting on we are running releasing is cylinders, new engine innovation products. product Our

will noticing. are We The been to footprint lean facility of that in agile. leaders a us in and new beginning ways to others a XXXX become you transformation industry. feel are are was and is to customers, our and in and challenging closing, operations Shoals seasoned team change building world-class business optimize talking a we've look with the In Shoals employees and allow for streamlining that year investors the about of

take dedication. in supported their for work thank want upcoming Operator, orders, our all to by now questions. However, employees are to and shareholders we and ready to year. I for the awarded believe their return momentum customers we'll of and given and and our hard continued we our growth backlog trust our

from Goldman Instructions] First Lee today of question Brian [Operator for comes Sachs.

week, that My no decision. a I to review, initial and ITC heard if And one a no the that was a have going the also deadline and be maybe had was right? or mean kind on which I that for just guess the timing I there? ruling? representative largely the a follow-up. there there be of is housekeeping clarification I does you bit had maybe are ruling And will final today. understanding this little question. walk any Have there Maybe updates, of effectively of through review updates if bit is us a

thank for call. Brian, you the

think that, -- should the would on time. right turn I today on for up tomorrow, It's there's from on timing. issues that I these cases, if you're either Look, come or that time from out. the correctly, don't think there's I lead review assumptions the in deadline recall to think any how case review. I to

that something we're we look, of outcome is for And point. Having the And a it not for importantly, pursue there of we probably end looking all as BLA Shoals. comes initial heard our the It determination said final about potential occurrence. last as we I And a to review, the is protect if common District in anything win have Court about have your the to question, up new is final patent at December. this the following was So we for think we'll we that excited portfolio look, ITC. determination. items remain at case that, this reviewed, continue one. is that still to the did What plan

some the sense us would to QX, election the of in and that early It the you based what activity talking strength relative run around opportunities a quarter. this about way the out just third about, at the you then strength on of some were comp Dominic, I indicating in here of And can helpful. on then But quarter? made the give but where appreciate to bookings. you of lumpy, but it's start of bookings quarter, start sustained rate the were Can you question quarter? this bookings you I of bit seeing just competitive bookings could -- like you're where point any softer A those QX That's of commentary better landscape, and this a know seem during the last you're should maybe the headwinds customers see and these be maybe some momentum the how to way. And meaningful that. you sense out think with you new a at you're comments

We've seen processing. some some quarter. I there the good order as folks the as think we some some strength There mentioned, the holding as we think remarks, was on started timing. in just of mentioned And I were you out,

quoting have very, had healthy activity record We've We very levels. hit a pipeline.

of award represented XXXX are the projects XXXX. are in from are online through for that standpoint and coming some the back coming and both already Some now revenue

seen haven't where this. the we just wanted time the to going So guided say, quarter we've this first isn't to to is land. We

issues engagement on. dip, year think had, we've we commercial of a we that we're that ago, with had, gains very going some new had. had customer the timing since some the ITC the initial determination a said, the that I we've customers But and there's hey, we've pleased

where with with pleased very we very, stand our I'm now right So bookings.

Mark comes question next Strouse of from Our JPMorgan.

below your XQ one came Dominic, margins range The in in XX% question to gross just XX%. slightly target of for me.

a You things. few mentioned

on and what about things. other think think were us you give I more been Can said you how to color bit those margin have a items. gross some There just going Just exactly operational forward? some nonrecurring might

absolutely. Sure,

know, how about run some volatile of you we've labor period. labor. to revenue challenges labor trying and We when elevated as we've some the did managed So the in a in plan have out talked coming and you're

in that the our because some period, had materials supply the expedited in has with the had supply there sure to right that time. items just chain it And heavy we freight some period. impact make within an chain air your was some floor. when coming also impacted We factors the some things, materials more had We some on hit at a unusual issues, snafu freight efficiency

going there against I seemed and to in the So few a think in just not coming us as were that QX. of issues. like things. operational in itself, It margin had always characterize long-term we them are all I do be

XX% Our solid. absolutely that the term We us. for for remains the XX% solid to range guide believe long is target

next Our Capital from comes Partners. of ROTH question Philip Shen

the wanted follow up I to on thread. bookings

with commercial see at success start the there. see potential I'll was election that? just I you you're I'll I'll with QX? if we or next -- -- Do having, X one. with book-to-bill pause in X:X sorry, wondering the for And take So the

Yes, to absolutely. like X. back quarter. We'd get where book-to-bill we the encouraged in over are I'm that

So that's absolutely our target.

the new just across maybe Phil, product to talked quotes year-over-year. about that new and lot to become to customers over through lot to a top the earlier worth is quoted management And neat We've still of with them and we X of few which talked our started the up dividends coming color in basically deployed, shipping which the talked give our organization. today. the our is ITC that since ruling marketing, made new sales, more gigawatts beginning we've our backlog $X those in project done we billion about to backlog our We We've of the us. couple have going We've combined customers. got course We've None things We've about that's with in for done it's in look, little it we've project with that's Dominic talking about We've commercial year-to-date our which in with is in of seen quarters, had a and A Look, gigs to bit market, million our did customers, and less X a wallet million and XXXX jump quarters on in we've We've is that than about Dom's and mentioned, see. bringing EPC now and being MSA top launched year that our and our last point XX really EPCs, share. $XX orders. $X we're bookings we historical new projects. in are great. commercial pay activity. us. And EPCs to awarded the a of the That's flexibility year. X XX% investment our this innovations talked EPCs, past due earlier results, right? about those as fantastic. large

feel and the are good on making of commercial side we So really progress the business, we're the moving. about we

So I bookings. strong expect

uncertainty The ITC. likely incentives in including around Shifting over. there, to results. election a result IRA the the and that election sweep, over could the is for in We're red the and

checks suggest changes potentially? a just a What's know of for early, it's of I these U.S. with you and the scale So yet have new the but we're activity in in those had risk solar really week this around kind customers? conversations out, could terms slowdowns in sense your pushouts positive headwind 'XX. our result in utility

about that's lean hear We will varying just Yes, Phil, Tennessee out. back still market. a question. in play needs has things on without saying. great love how I Probably on here. There the excited it. Portland, the power We're goes solar of been opinions degrees

its around XX Obviously, consumed to nuclear conversation centers that power XX% place grid. to understated terawatt probably source number. of the X% to lot than on has be over that. A consuming Specifically probably an last going more next X% That the X growth X,XXX roughly the years. hours in generation before. of with That's the U.S., data of load we're may that seeing the here, XX% so is be course days of

the things couple online worth generating. think plants of those we generation the probably it's And think for pointing Amazon with won't new X and there The in situation here out that be years. probably play I X weeks. to last out some Talent saw doesn't come I

So and nationwide, go got to being quickest LCOE, look, that we've is projects think solar ready lowest are to we still deploy, which exciting.

So going be administration think the supportive I new is to of that.

I to one has states. there's think red we've of lot know, investments, to have and seen in recognition we've Gen that a front, those, dominate investments. to got on do where substantial you A as I of AI that. in U.S. the Georgia, power live

with well industry Republican in X some been and got out strong of the red of being areas Congress top in XX also you've invested that So as governors have Congressman. supportive renewables states

or theories new excited manufacturing about true. pull administration, I a the So the in holds and and solar supporting I'm about hope acceleration an forward U.S.

question Piper next Harrison comes of Our Kasope Sandler. from

So within of seen scheduled months. some backlog QX that one XXXX? million statement, to all me, next talked Just in understand in are throughout to contracted the the of think, and parameters the you about $XXX XX, trying ship that XX that Slide, we've the the million. confidence given lower for delays on What backlog $XXX just underpin first I that

It's Dominic. Yes.

quarters the some million projects about that $XXX So earlier $XXX next takes which in we XXXX, million, had that year. the of few right us in through from of you're of quarters, X that talked the include delayed XXXX

So our year but for is based right I it's 'XX, book forecast healthier. our a which gotten now, not it calling the of necessarily on past shot our not We're has revenue. think necessarily business over of

think there delays. I were some

earlier quarters may told into think have back I you may projects pushed -- about the some fringe that we were have the pipeline. we on that

book quarters time lines on those and think I based customers, far. X remain are quarter We've closer our we the than thus business is So to good ever. project delivery customers dates momentum healthy. The by expected had this next of and

really that very of I of health So book business believe is our strong. the

my just follow-up So question.

your Brandon, now? give you XX quarter, sense orders. top I XX% that XX awarded mix think top represented Can last backlog of us what that your and you of a looks highlighted, right customers

the already that becoming it's made I of million think on all XX the Dominic I customer this that that that statement focused out see more with orders, I'd as that the top of Again, about talked way don't the year, awarded and customers. again, revenue Again, earlier we year healthier, and diverse. Great like to we would being EPCs as into I and gigawatts paid backlog our said, about thing backlog X have Yes. dividends only point, $XX it this we're to with, orders. specifics point At of assorted X really question. flowing lean through of want of of is, of backlog and are starting and share awarded is wallet amongst on get I details the

that. diversity our we're book, order quality So excited about of and

add is now There If just EDGAR delay at right a I thing. SEC. one site could with the

XX% XX%, But of year, to to in about months you. So customer has our not concentration the available now X is last A's reduced XX%. Q from running first year, the

So about I our well. revenue as was recognition in talking Brandon that think itself the diversity manifesting is

I There's So I just issue want and put just but edgar.gov our on accepted, X-Ks technically. an there. to Q point they're published that not end the that out filed to that on their want the out website have been just yet. and

of from Our Cho comes next Christine question Barclays.

have talked actually it's When follow-up delayed? I can of using about it's like you delayed, is long Or how you lines cancellations, guess, are a I and from much no point Or from be to like Just any of sort projects the there's they do discretion on -- customers deliveries. was to just actually of you thing another your -- to that like how of delayed? $XXX at are what's they firmer going do time about customer the that a backlog cancel? million how going ask, that standpoint, And delay? there -- but wanted what indefinitely be

go schedule. pacing potential top Yes, weekly Christine, sitting part first use Maybe in our Brandon. the It's or date. discretion our of on a out take awarded the actually how not construction and We their good orders down backlog do award I'll We're basis, the through question. we're with and that. we customers

the that they're to our of modules time from top that time many on pilings they're us that share schedule So with will putting trackers. customers the in putting

awarded that through CRM, backlog timing, and So our we've blow and numbers. those drives understanding which we dates these got a order and of great

been and we So you better not has second as maybe perfect, part good gone. rigorous that we've that? pretty while and information, getting the about more around and the hit Dominic, better totally year it feel to of want

to one. I'd What first the sorry. was prepared second to. I'm part, be the do Christine, was happy I

like indefinitely cancellation, actually cancellation postponing happen? Like versus

part. that. apologize first the focus I'll Yes, for Yes. I forgetting on

as have we in And have the actually we a backlog, when contract. So year. you know, cancellation we've past one had

with I one reapply not et cancellation fees, if we about our control, QX are things in them to that top yet. on was awarded was a that beyond worked cancellation was contract orders, some talked those think how could. With of the do cetera, we it with have customers and -- their we we actually

forward. some we're projects actually those just are say, be can delays, We control while. so European had delayed on the a our of And slate going that don't still to projects, they've award. I the for if for when We've projects should those or go international had

don't So hear to the consider would the with up think remove do that we We pipeline other we that. conflict, some not something don't rebid funding. because lost back EPC it EPCs. that control unless work move like a have we to did project they that we the has we If is able projects now into

orders, So that backlog. but does with happen occasionally with not awarded

losing different due construction than projects. with projects all up be this slower high The Christine, that did our that all due we've and scheduled of not could about to out. was we that we strongly to delay, guess renegotiating push to developer. EPCs about when back and QX, order heard you've book, just quality or it I these plethora I move And had believe, we about very the reiterate, just owner situations pipeline originally interest But again, of that. know Shoals the rates, is renegotiating costs talked PPAs year, talking feel to deploy I the the to even they it. They're

order So we forward. our moving about great book feel

Our of next question Securities. Truist Jordan Levy comes from

[indiscernible] at you one far complex high orders And how you here. the what kind environment, And be project there's But quick delivery? a out lot a do like booking typically year? normalized incremental said, dynamics XXXX still and level timing. projects just you could following on book of a for for of Just a point

sort Jordan, it. that of -- lost I part I've the think of first but we got question, you

we're into now. look, booking XXXX orders So out right

So where projects probably stretched talked as average used on we've to it now. XX out XX, a X year, has an XX about, months the to and project all cycle, to has closer elongated to standpoint be more

visibility things ultimately while term, a are elongating, thing us does that's the bad, it long is better for good give business. the So for which

can things usually probably and business, book we within, typical. our as book I'd turn XX and turn months far is X say, As to

some Yes. There's always of that.

XXXX. of that give for end when will year the year. really still couple of in be back book times first the 'XX really February, half idea through generated, book happens That's that of things year and us business will have in because up lead with it's be the Now to but every we with really the part a the quarters of business we solid possible at guidance half of first would delivered the the turn

that push we time we year business on guidance, we last our did about additional as guided. fact, way. some have that In And anticipated we some play will, talked booking way in projects in the out quarterly the fact, out

So anticipated equation and year. this play out we we're both happening, it really sides seeing that of how that's

still half can 'XX. of the through say, So projects, I'd additional XXXX book first we

Also point now. talking out, right about important to [indiscernible] we're

see turn book about some We think I the to revenue, XX in quicker business, business. flow quicker and to And projects, accelerate CC&I great we've it's a our the XXXX, impactful talked through quoted generate and as got turn in For which will Jordan, follow-up? have you that that in confident and do overall revenue remarks, business. is a we've some Shoal's becomes XXXX. to we're I'm more starting ability

Yes.

of Just customers responding post BLA all a team Jumper I those how that get I Super one. products. the of appreciate and see on know get we thing. Gary color any have that new of of I quick the international side product if could on are trench wanted a and the rollout to and things. worked set you hard to of there, sort some and just

been cycle we sales seen substantial activity post us. which products, a has business. we've exciting in long for quoting have Jordan, when we're Yes. very those launched Intersolar Again,

wins I is quoting huge but front, as pretty it positive the on drastically report new to no which products international are So increasing would activity, the we seeing, say, yet us. a sign for relates to

more come the like strategy So direction going on international. and to there. I our we're

of comes Morgan Percoco question from next Our Stanley. Andrew

maybe In question. about bit discounts the the margin a been maybe approaching wallet you means answered, Obviously, go-forward my the a XXXX? of fourth little pricing just you top in and with into you're these that in one one with the of your but quick some mentioned the of quarter. Can slides, focused drivers just have discounts recovery gross and on how some have of margin as questions XXXX margin follow-up then more for basis lower volume-driven Most guys you what on discuss for EPCs. of quarter share volume-driven in the been regaining

Sure.

about, is in talked we volume had always pricing always business. we've and as agreements at I of So at our And reiterated historically, place. had these not supply master and the Day, a discussion, we think look we Investor

in been so of negotiating pricing while do. based that and volume differently now but arrangements for historically, they all, the EPC have we have And that some very MSAs may on place them, an have some provided, volume not we scripted

very can future And a will accounting guidance because now calculate. that so in increase it's that that more significant, the we case, as becomes we the for around in disclosures specific There's something that.

When I we very deal, top XX.X reflect as we with have sign clear So that that sure gigawatt customers. that certainly that to want at we do you to look make you want a to things, we're your make want sure those partnerships.

percentages associated And the be with some so those side. as significant become growth, top discount things that line more might to drive there on

that new So in that of us. thing. memorialized something been more will in It's a about MSAs, just unusual we not it's it disclose It's for 'XX. probably it's become nothing kind now will

just do some other things, Andrew, have I that XX.X%, quarter nonrecurring and a third we on being did margin in jump at outlined. reiterate there gross bit, to little as Dominic some our issues to want

you to drive margins, we but EBITDA it believe to reflect which, lead on margin, that does margins margin don't to guide some and I QX we're know higher side. the Our guidance, gross going would mean, I gross higher

margin QX or XX% a get the is or Haven't XX% have back guided us. for discussing all that range to XX.X% acceptable a confident year, can go-forward that think range. been it XX%, not the do we we we So and are to in

comes next Our Praneeth Satish Wells from of Fargo. question

from the XX% continue expect revenue back to I the next Maybe or looks the do you last XX convert actually guess just quarter then Slide think like macro QX? think going I improve to It could in we this steady which that just order of is And months, XX. when the up was book into driving you to given XX%. backdrop, hold improvement? current metric metric what's see to

Yes.

order everybody quarters the for a awarded kind projects in back we simply indefinitely in some So our of it's probably thought The XXXX a couple order the of pushed things on book, as were being the been of mentioned, shakeout we believe, that One, that. delayed out of few book. is in because were there healthiest industry. we some healthy, was

driving So a the couple have say, would we now lines. the year that. some that the improvements, good earlier of are I customers' that the we saw We things in that believe of time delays

when purchase good some the And and market, we had awards election that that us now those behind believe for that probably of materials. I will the when of be So those coming orders expectations and is PPAs have projects through on as us have to ITC, they come material. be books, were been customers victory such our need with already have have those those renegotiated renegotiated, that are projects to and at the the to following that

book very line feel we time So in confident right order of now. that our

maybe just staying this here And conversion cycles. concept helpful. on That's of revenue

see converts XX up next or could to the kind the order revenue that months? book that next amount the down few over based you verticals think entering? could Do percentage like cycles utility when of years market? verticals few look conversion you kind out these And traditional for As what the you look batteries, international domestic CC&I, to of next scale, compared the of that you in the overall, you're think your over you of each revenue utility the are do years on skew scale compare of

Yes.

few things a So about that.

as we I think conversion revenue cycles the did not we about our over talk some of our in certainly factor all verticals XX% at and XX% grow And growth a to of same these time, the that. speed Investor target are at will Day, ramp.

recognize time relatively projects. out about line. build shorter can revenue has the CC&I can we Brandon a As mentioned, shorter can find a We conversion product, We cycle. in

we things scale our than take of to base. have proven Some internationally, longer the utility U.S.

goes have that worse have because some for the look project are scale we we don't U.S. in projects COD, factor than we've standpoint. a time even in in about believe of we front delays here at lead when orders awarded seen XX-month went had us we're a So from I averaging COD. When still that still utility getting things longer that

when they orders time customers and things. us. maximize build of efficiency how I construction to think cash the to they about their out now side, lines use really they know when place with these our in figured And

disconnects seeing quick worse We we're battery cabinets, that So I those turnarounds. And with relatively anything and are around storage, quickly. energy those turned get those relatively not in combiners think standpoint. can

any think so this really excited it on verticals, the the I cycles revenue vertical. point. We're getting but our growth are not And worse about all varies of at certainly

Our next question comes from Joseph of Osha Guggenheim Partners.

questions. Two

which outcomes that at the have expect excluded portfolio at with options your we And looking ITC, morning. product? First, competitive follow-up. product, addressing mentioned begin from other times I voltage you of redesigned this for look to was redesigned Might that voltage have all number your do a patent a the you

strongly patents new But line. about the feel hand our there. patent related we'll will said, like our tip to we We product totally protect very our continue Joe, we've BLA to portfolio. X

there. So more to come

separate ship in time timing, revenue and conversion, and bookings why this book have in how utility outlook and whatnot obviously, build the returning would it's Great. any make just way to out [indiscernible] looks business a your how XXXX given data? given sense to been this to given stretched And question, in it But just XXXX predict C&I hard is issue. and then lines the in conversion

I like to next plan would for Directors can present of come our Seriously, though, Board approved get Joe, a good to year. you so that's-

I'd to. be glad

know me. You

great at Seriously, have happening. are we time a what's as to work look starting been with And construction our question. on we do integration that's lines. We even customers, tighter

they that we've As master detailed EPCs, the about very with signed talked some we've supply very specs. agreements share large

we're that are they really be move the great back feel shot projects to of if should the going percentages to a on they at those that with of business hope like get. that we year. And winning we on count the know to they they able that. awarded can do half forward we order, look projects at have bidding and We get an so the in And

So yes, it's always risky.

As order this we book awarded below year that XX% where before, is and backlog started with. or I getting revenue year. the think be of is at target first what Usually, year going to we last year on it of the for the time the I another can our and the mentioned end the the top orders backlog was is lift something awarded that

to going that. look we're So at

confidence We those also confident them put dynamics have very facing to we back sensitive into relationships are would our very we're half with our they jobs the our customers, in but that to jobs. those win if

if squeeze question. last in one see let's Alex, can we

Oppenheimer. question final from Our today for Rusch comes of Colin

separate second about from what about that bit little alternate competitors or for environment to emerge and any customers competitive a your any the talk you're provide? thinking you voltage, needs from guys solutions sources start Can you seeing

in of to EBOS. our commercial great that. seen question. the -- working try between with efforts year, team some last to And hand-in-hand voice to been sort them customers. of deployments seeing and benefits We're guess, of, so a really the restart to engagements I we're we're We've see Colin, exciting here speak. our starting Yes, around really improve of customer There's

we on them customers. sure deliver product around us only additional and needs, not and new new next product we're dynamics result us. flexible line that. how us their kit customer the over see remarks. of on about adaptation of the the you'll some making on year, the a gotten So that to That's to packaging make for prepared competitive more XkV We side, but focused specific talked from we site probably by in value products some But really the course have of for product meeting much exciting unlocking we're products an our as more products the

focus. that's So our

always We to our that. I command but in In marketplace. now broader maintain we're always to and doing competition. our share. have competitive to a continue space nipping like the great We'll we're right terms of the the going heels, be on in People specifically grow understand what landscape, share

Relations a questions We're can on end That's have today. year. to at the that note the It we hour. the we of want the all have active be IR calendar I do that found Investor very website. through for top the time our of

please So those of us for one join events.

at further, love to team everybody, we'd help with great joining meet reach If you please If out investors@shoals.com any can, for you Investor questions. us a today. day. Thanks, we to you. with Have the can Relations

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