Shoals Technologies Group, Inc. reported a revenue of $399.2 million for the fiscal year ending December 31, 2024, a decrease of 18% from the previous year's revenue of $488.9 million. The decline in revenue was attributed to lower sales volumes driven by delays in solar projects and competitive pricing pressures. The company's gross profit also fell to $142.0 million, down from $168.3 million in 2023, although the gross profit margin improved slightly to 35.6% from 34.4% due to reduced expenses related to wire insulation shrinkback issues.
In terms of operational changes, Shoals Technologies underwent a significant corporate restructuring in 2023, eliminating its Up-C structure and consolidating its subsidiaries. This reorganization aimed to streamline operations and enhance financial reporting. The company also announced a strategic shift to expand its market presence internationally and in battery energy storage solutions, data centers, and commercial markets, while maintaining its focus on domestic utility-scale solar projects. As of December 31, 2024, Shoals had a backlog of $634.7 million, indicating a slight increase from the previous year.
The company faced challenges related to warranty liabilities, particularly concerning wire insulation shrinkback, which has resulted in a recorded warranty liability of $39.9 million. This issue has led to ongoing litigation against the supplier, Prysmian Cables and Systems USA, LLC, as well as increased legal expenses. Shoals reported total warranty expenses of $15.2 million for the year, reflecting the costs associated with addressing the insulation issues.
As of the end of 2024, Shoals employed approximately 1,290 individuals, an increase from the previous year, reflecting its growth strategy. The company also initiated a share repurchase program, authorizing the buyback of up to $150 million of its Class A common stock, with $25 million already executed through an accelerated share repurchase agreement. Looking ahead, Shoals anticipates continued challenges in the solar market due to project delays and macroeconomic factors but remains optimistic about its long-term growth prospects in the renewable energy sector.
About Shoals Technologies Group, Inc.
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