Shoals Technologies Group, a manufacturer of electrical balance of systems for solar, energy storage, and e-mobility reported a net income of $7.8 million during the fourth quarter (Q4) of 2024, down from $16.6 million in the corresponding period in 2023.

Revenue experienced an 18% year-over-year (YoY) decrease, from $130.4 million to $107 million. At the end of the quarter, income from operations stood at $16.5 million from $31.9 million, a 48% YoY decrease.

The decrease in the net income and revenue was primarily due to a rapidly shifting political environment, challenges in labor and equipment availability, and regulatory and permit delays during the quarter.

Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) fell to $26.4 million from $39.1 million, a 32.4% decline.

Brandon Moss, CEO, Shoals said, “2024 proved to be an unpredictable year for the U.S. utility scale solar industry. A rapidly shifting political landscape, supply chain and regulatory bottlenecks, and persistently high interest rates, drove unprecedented disruption within our markets. However, 2024 was also a year of exciting operational and commercial process improvements that are beginning to yield results.”

Full Year 2024

The company’s revenue stood at $399.2 million, an 18% YoY decrease from $488.9 million last year.

This decline is due to reducing sales volumes caused by lower demand linked to solar project delays that have postponed initiatives from 2024. Competitive factors, volume discounts, and customer mix in key markets also played a role.

The net income for the full year was $24.1 million compared to $42.7 million, a 43% YoY decrease. Income from operations stood at $51.2 million, compared to $79.0 million in 2023.

Shoals’ adjusted EBITDA for 2024 reduced to $99.1 million from $173.4 million last year.

Asked at the earnings call conference about the imposition of 10% import tariffs on China and a potential 25% for Mexico and Canada, Moss said his company will directly benefit. “We do have competitors and some primary competitors in China and in Mexico. So, we would certainly benefit us directly if those were imposed,” he said.

Outlook

Shoals is expecting its revenue for 2025 to reach between $410 million and $450 million, given the current market trends and business conditions. The company expects its adjusted EBITDA to range from $100 million to $115 million.

To further penetrate the U.S. utility-scale solar market, the company is deploying a new, highly engaged sales model to portions of the market that have historically not been pursued.

It will offer localized products to meet customer needs in targeted geographies. The company also plans to accelerate product development, enabling expansion into adjacent markets that can benefit from its capabilities and scale, including consumer and industrial and original equipment manufacturer applications.

Shoals reported a 23.9% YoY dip in revenue to $102.2 million during Q3, primarily due to project delays and supply chain issues. In Q2 2024, the company reported a revenue of $99.2 million, down 17% YoY from $119 million.