Shoals’ first quarter results drew a significant positive response from the market, as management attributed the outperformance to strong bookings, the ramp-up of new products, and success in expanding its customer base. CEO Brandon Moss highlighted that "momentum continues with approximately $91 million in new orders," pointing to a healthy backlog and a book-to-bill ratio above 1.0. Despite a decline in revenue compared to the prior year, Shoals’ leadership credited the performance to ongoing commercial initiatives, increased engagement with both new and returning customers, and meaningful traction in its battery energy storage solutions segment.
Is now the time to buy SHLS? Find out in our full research report (it’s free).
Shoals (SHLS) Q1 CY2025 Highlights:
- Revenue: $80.36 million vs analyst estimates of $74.23 million (11.5% year-on-year decline, 8.3% beat)
- Adjusted EPS: $0.03 vs analyst estimates of $0.04 (in line)
- Adjusted EBITDA: $12.79 million vs analyst estimates of $12.16 million (15.9% margin, 5.2% beat)
- The company reconfirmed its revenue guidance for the full year of $430 million at the midpoint
- EBITDA guidance for the full year is $107.5 million at the midpoint, above analyst estimates of $103.8 million
- Operating Margin: 5.4%, down from 12.8% in the same quarter last year
- Backlog: $645.1 million at quarter end, up 4.9% year on year
- Market Capitalization: $814.1 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Shoals’s Q1 Earnings Call
- Michael Fairbanks (JPMorgan): asked about the evolving competitive landscape amidst tariffs. CEO Brandon Moss explained that while tariffs create some market shifts, most customer conversations focus on Shoals’ quality and service rather than just domestic sourcing.
- Brian Lee (Goldman Sachs): questioned the timeframe for margin recovery and the drivers behind returning to 40%+ gross margins. CFO Dominic Bardos detailed the mix of operational efficiency, new product contributions, and targeted commercial strategies that should support margin improvement.
- Colin Rusch (Oppenheimer): inquired about international expansion and supply chain cost savings. Moss highlighted longer development timelines abroad but emphasized the similarities in product requirements, and noted ongoing automation and process initiatives to improve efficiency.
- Philip Shen (ROTH Capital Partners): asked about bookings velocity and the impact of tariffs on battery storage projects. Moss reported strong bookings and minimal current impact from tariffs, with storage growth driven by both market expansion and Shoals’ low starting market share.
- Derek Soderberg (Cantor Fitzgerald): probed growth drivers in commercial and industrial (C&I) markets. Moss described increased quoting and bookings activity, driven by Shoals’ solutions for projects with labor and supply chain constraints.
Catalysts in Upcoming Quarters
Looking ahead, StockStory analysts will be watching (1) the pace of backlog conversion into revenue as project execution ramps up, (2) progress toward improved gross margins as operational initiatives take hold, and (3) traction in international and energy storage markets, particularly following new product launches and strategic partnerships. The impact of evolving trade policy and tariffs on Shoals’ competitive positioning will also be a key area to monitor.
Shoals currently trades at $4.89, up from $3.77 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
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