Shoals Technologies Group, Inc. Q4 FY2025 earnings call

• Fourth quarter was strong growth in core utility-scale solar market, quote volume >$700 million of unique projects. - Completed remediation for defective Prysmian wire. - Moved into consolidated state-of-the-art manufacturing facility for improved productivity and scalability. - Introduced multiple new products in 2025, diversified customer list. - U.S. utility-scale solar grew 11% full year, international revenue expanded, CC&I and OEM exceeded expectations, BESS poised for growth. - Partnership with ON Energy to address AI data center backup power need.

Fourth quarter revenue was approximately $148 million, up 38.6% over prior-year period. Commercial team added ~$175 million in new orders, resulting in record backlog and awarded orders (BLAO) of ~$748 million, 18% year-over-year increase. Fourth quarter adjusted EBITDA ~$30 million, up 15% year over year, representing 20.4% of revenue. U.S. utility-scale solar business grew ~11% full year, international revenue expanded from <$1 million in 2024 to ~$13 million in 2025. CC&I and OEM businesses exceeded expectations. BESS had $67 million in BLAO as of year end with over half expected to be recognized as revenue in 2026.

Q1 2026 revenue expected $125M - $135M, adjusted EBITDA $16M - $21M. Full year 2026 revenue $560M - $600M, adjusted EBITDA $110M - $130M. Cash flow from operations $65M - $85M, capital expenditures $20M - $30M, interest expense $8M - $12M. New facility move expected to be fully operational by middle of year.

• Tariffs impact on gross profit, uncertain and rapidly evolving. - Elevated legal expenses related to ongoing litigations. - Transition to new manufacturing facility has initial inefficiencies. - Volatility in project delivery schedules and market uncertainties affecting revenue recognition.

Q: Julien Dumoulin-Smith asked about book and bill, seasonality, and BESS backlog.

A: Brandon Moss said book-and-turn business historically ~$50M - $70M, cautious guidance due to new customers and product diversification. BESS bookings lumpy but revenue recognition to stabilize with new production line.

Q: Philip Shen asked on margin outlook and customer order patterns.

A: Dominic Bardos said low to mid thirties margin in 2026 due to tariffs, new facility transition, and product mix, with margin expected to improve in 2027. Brandon Moss said market strong, revenue cadence likely 45% first half, 55% second half.

Q: Brian K. Lee asked on top-line guidance components.

A: Brandon Moss said addressed ~two-thirds of unaddressed market at Investor Day 2024, solar business grew 11% full year, international and C&I growing.

Q: Mark Strouse asked on ON Energy partnership and new facility move.

A: Brandon Moss said ON partnership has backlog, new facility expected fully operational by middle of year.

Q: Praneeth Satish asked on data center product and BESS production line.

A: Brandon Moss said data center product on track but not material in 2026, BESS production line has headroom, CapEx to normalize.

Q: Colin Rusch asked on Project Honey and energy storage product.

A: Brandon Moss said limited FEOC impact, energy storage product dexterous.

Q: Chris Dendrinos asked on backlog composition.

A: Brandon Moss said CC&I small, long-tail BLA adoption strong.

Q: David Arcaro asked on competitive environment.

A: Dominic Bardos said pricing incentives behind us, competitive product set exists but developers inclined to avoid IPCs, Brandon Moss said strong preference for Shoals solutions