Shoals Technologies Updates Q4 2024 Financial Performance
Shoals Technologies Reports Q4 2024 Financial Results
– Quarterly Revenue of $107.0 million –
– Adjusted Gross Profit Percentage of 37.6% –
– Quarterly Net Income of $7.8 million –
– Adjusted EBITDA of $26.4 million –
– Ending Backlog and Awarded Orders of $634.7 million –
Company Overview
Shoals Technologies Group, Inc. (Nasdaq: SHLS) is known for its strong position in electrical balance of system (EBOS) solutions and components. These include innovative battery energy storage solutions and OEM components, crucial for the global transition to renewable energy sources.
Financial Performance in Q4 2024
For the fourth quarter ended December 31, 2024, Shoals Technologies reported a revenue of $107 million. This represents an 18% decrease from the previous year’s revenue of $130.4 million, primarily due to lower demand impacted by delays in solar projects.
The company's gross profit fell to $40.2 million, translating to a gross profit margin of 37.6%, compared with 42.5% in the prior-year period. This decline is attributable to various competitive pressures, including increased material costs that slightly outweighed labor cost efficiencies.
Adjusted EBITDA for this quarter was reported at $26.4 million, showing a significant decrease from $39.1 million year-on-year.
Operational Insights
Brandon Moss, the CEO, stated that despite the challenges in 2024, productivity measures are positioned to stabilize financial performance. He highlighted customer demand's resilience with a book-to-bill ratio of 1.4, indicating healthy future reservations that provide a backlog of approximately $635 million, with $440 million designated for delivery in 2025.
"While we remain vigilant about potential external economic risks, we are optimistic about our customer traction coupled with our strong sales pipeline, which is reflected in our robust backlog," said Moss.
2024 Full-Year Summary
The total revenue for the full year 2024 declined to $399.2 million from $488.9 million in 2023. There was an increase in gross profit as a percentage of revenue to 35.6% due to effective management of wire insulation shrinkback expenses amidst rising labor costs.
Net income for the year was $24.1 million, significantly down from $42.7 million in 2023, showcasing the intense competitive environment faced throughout the operational year.
Future Outlook for 2025
Looking ahead, Shoals has shared its outlook for the first quarter of 2025, predicting revenue between $70 million and $80 million, alongside an adjusted EBITDA estimate in the range of $10 million to $15 million. The full-year outlook reflects expectations for revenue of $410 million to $450 million and an adjusted EBITDA forecast of $100 million to $115 million.
Conclusion
The update from Shoals Technologies Group highlights its adaptability amid industry challenges and internal progress aimed at stabilizing operations. The company's results and projections offer a perspective into its resilience and strategic positioning within the evolving energy market, critical as the demand for renewable energy solutions persistently rises.
Frequently Asked Questions
1. What were Shoals Technologies' fourth quarter revenue figures for 2024?
The revenue for Q4 2024 amounted to $107 million, a decrease from $130.4 million in Q4 2023.
2. How does the gross profit margin compare year-over-year?
The adjusted gross profit margin for the fourth quarter of 2024 was 37.6%, down from 42.5% in the previous year.
3. What is the outlook for Shoals in the first quarter of 2025?
Shoals forecasts revenue between $70 million and $80 million for the first quarter of 2025.
4. How was the overall performance in 2024 compared to 2023?
Overall revenue dropped to $399.2 million in 2024 from $488.9 million in 2023, with net income decreasing significantly as well.
5. What strategic measures is Shoals implementing for 2025?
The company is focusing on customer engagement and productivity improvement measures to enhance visibility and operational efficiency going into 2025.
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