Shoals Technologies Group, a manufacturer of electrical balance of systems (EBOS) for solar, energy storage, and eMobility reported a net income of $16.6 million during the fourth quarter (Q4) of 2023, contrasting with the $118.3 million reported in the corresponding period in 2022.

The company stated that the previous year’s timeframe experienced a positive impact, deriving a gain of $110.9 million from concluding the tax receivable agreement.

Revenue experienced a 38% YoY growth, reaching $130.4 million, compared to $94.7 million. This surge was driven by increased domestic demand for solar EBOS, leading to higher sales volumes.

Income from operations reached $31.9 million, an increase of 36.3%, up from $23.4 million.

Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) in Q4 2023 saw an increase of $9 million, reaching $39.1 million, marking a 29.9%YoY increase compared to $30.1 million.

“Shoals continued its strong growth trajectory in the fourth quarter, with revenue growing 38% year-over-year, reflecting the exceptional dedication and execution of the management team and associates,” said Brandon Moss, CEO of Shoals.

Moss added, “Demand for our products remains robust, with backlog and awarded orders increasing 47% year-over-year, as the Company added over $128 million in new orders in the quarter. International markets continue to develop as a growth driver, representing more than 13% of our backlog and awarded orders. Domestically, we further strengthened our leadership position after engaging a new top solar EPC in a master supply agreement subsequent to the quarter end.”

Full Year 2023

The net income for the full year amounted to $42.7 million, a decrease of 70% YoY from the net income of $143 million.

The prior-year period included a $110.9 million gain on the termination of the tax receivable agreement, partially offset by a $6.7 million payable pursuant to the tax receivable agreement adjustment.

Revenue experienced substantial growth, increasing by 50% to $488.9 million, compared to $326.9 million. This surge was attributed to higher sales volumes driven by increased domestic demand for solar EBOS.

Adjusted EBITDA witnessed an 86%YoY increase, reaching $173.4 million, compared to $93 million for the prior-year period.

Income from operations amounted to $79 million, marking an increase of 19.1% YoY, up from $66.3 million in the prior year.

In October 2023, the company filed a complaint against Prysmian Cables and Systems USA, the wire supplier exhibiting shrinkback, seeking compensatory and punitive damages. The outcome of this litigation and its impact on the business and financial results remains uncertain.

The company recorded a net income of $18.92 million during the second quarter of 2023, a YoY increase of 159% from $7.3 million.

The company’s net income jumped over five-fold YoY to $14.3 million in Q1 2023 due to increased demand for solar EBOS generally and the company’s system solutions specifically.