Shoals Technologies Group, a manufacturer of electrical balance of systems for solar, energy storage, and e-mobility, reported its first quarter (Q1) 2025 earnings, revealing a revenue of $80.4 million, surpassing the forecasted $74.76 million. This represents an 11.5% year-over-year (YoY) decrease from $90.8 million.

The company recorded a net loss of $0.3 million for Q1 FY 2025, compared to a loss of $4.8 million in the same period of 2024. The decrease in revenue, coupled with the factors affecting gross margin and operating expenses, contributed to the company’s net loss.

Gross profit margin dropped from 40.2% to 35%, primarily due to strategic pricing actions, volume discounts, and reduced fixed cost absorption caused by lower revenues.

The company’s earnings per share (EPS) came in at $0.00 on a basic and diluted basis for Q1 2025 compared to $0.03 in the same quarter of the previous year.

The earnings before interest, taxes, depreciation, and amortization (EBITDA) was $12.8 million, decreasing 60% YoY from $20.5 million.

Brandon Moss, CEO, Shoals Technologies Group, acknowledged the near-term uncertainty in the utility-scale solar market, leading to shifting order patterns. He said, “We are excited by the progress we have made and the strength of the underlying markets we participate in. The strategic initiatives that are driving increased market penetration and diversification are progressing very well, with commercial success in international, CC&I, battery energy storage systems, and original equipment manufacturer markets.”

A more diverse and robust customer base also contributed, with recent filings revealing the addition of two new major customers, each accounting for over 10% of the Shoals Technologies Group’s total business.

Moss added, “We are also aware of today’s headlines, which are dominated by tariffs and domestic energy policy. We continue to evaluate how these shifts in policy may or may not impact our business and industry. That said, given what we know today, we believe Shoals has limited direct exposure to many of these risks in the near-term. You may recall that we do not participate in 45X credits, and we have a robust supply chain with strong domestic partners.”

The company has begun seeing tangible results from its recent investments in commercial and product management functions, as reflected in the growth and enhanced quality of its order book. Notably, over 15% of the company’s booked and late-stage opportunities now includes projects featuring at least one new product introduced within the past four quarters.

The company said these newly launched products have considerably helped it secure new business, particularly within the 30% segment of the market where the company previously had no presence. Many customers purchasing these new products are either new to Shoals Technologies Group or have recently resumed business with the company.

The company’s backlog and awarded orders, as of March 31, 2025, stood at $645.1 million, a 4.9% increase from the previous year and a 1.6% increase from the end of 2024. The backlog includes approximately $500 million scheduled for the coming four quarters.

Moss emphasized that product innovation played a crucial role, with over 15% of the current backlog and awarded orders tied to products launched in the past year, many of which enable Shoals to enter previously untapped market segments. “The company’s ability to convert 78% of its backlog and awarded orders into revenue within the next 12 months, up from the previous quarter, demonstrates improved project execution and fewer delays,” he noted.

Moss also said that the company remains flexible and will work to identify further opportunities to protect its customers from potential tariff impact.

Outlook

For Q2 2025, the company anticipates revenue from $100 million to $110 million and an adjusted EBITDA of $20 million to $25 million.

For the full year 2025, it expects revenue ranging from $410 million to $450 million, an adjusted EBITDA of $100 million to $115 million, and cash flow from operations of $30 million to $45 million. The capital expenditure is expected to be between $25 million to $35 million and the interest expense of $8 million to $12 million.

Recently, Shoals 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.

In November 2024, Shoals reported a 23.9% YoY dip in revenue to $102.2 million during Q3 of 2024, primarily due to project delays and supply chain issues.