Q1 2024 Earnings Summary
- Shoals is experiencing record quote volumes, both in the number of quotes and total dollar amounts, indicating strong inbound demand despite temporary project delays.
- Shoals is expanding internationally, with approximately $78 million of orders to ship internationally, aiming to capture part of the 63 gigawatts available market opportunity through 2025.
- Shoals has consistently outpaced market growth by 2x, achieving 50% growth last year compared to an expected 26% market growth, demonstrating strong market share gains and the potential to continue outperforming the market.
- SHLS is experiencing significant project delays, with 37% of projects shifted by at least a month and approximately $50 million worth of projects pushed into 2025, negatively impacting the current year's revenue. ,
- The company had project cancellations and projects moving back into the sales funnel, amounting to around $60 million, resulting in lighter bookings in the first quarter compared to previous periods.
- Market forecasts for 2025 and 2026 are less favorable, as acknowledged by the CEO referencing that the base case is "probably not as exciting as we've seen in prior years" for the solar market, potentially affecting SHLS's growth outlook.
-
Project Delays Impacting Guidance
Q: How are project delays affecting your 2024 guidance?
A: We have seen $50 million worth of projects pushed from 2024 into 2025, with 37% of our projects delayed by at least one month. These delays are impacting our revenue expectations for this year. -
Bookings Appearing Light
Q: Why were Q1 bookings lower compared to prior quarters?
A: Although project awards were consistent, we had about $60 million of projects canceled or pushed back into the sales funnel, making bookings appear light. If we add this back, our net new bookings would be normalized. -
Impact of AD/CVD Case on Bookings
Q: Will the AD/CVD case affect bookings in Q2 and Q3?
A: We are not seeing module pricing or availability concerns from customers, and we do not anticipate significant impact on bookings from the AD/CVD case at this point. -
Revenue Guidance and Backlog
Q: Is all of your 2024 revenue guidance covered by backlog?
A: With recent project pushes, including an additional $50 million in April, some projects have shifted out of 2024. We are providing a realistic guidance range that we believe is achievable. -
Market Share and Growth
Q: Has your market share increased or decreased since IPO?
A: We have outpaced the market by 2x, growing 50% last year compared to the market's 26% growth. We continue to focus on growing market share and wallet share with existing customers. -
International and C&I Opportunities
Q: What are your growth plans in international and C&I markets?
A: We are excited about international opportunities, with $78 million of orders to ship internationally. In the C&I segment, we expect meaningful progress in 2025, with some traction at the end of 2024. -
Load Growth Driving Demand
Q: How does U.S. load growth impact your outlook?
A: We are entering a period of projected 4.7% load growth in the U.S., driven by data centers and AI, which we believe will drive demand for our solutions. -
Competitive Environment
Q: Any changes in the competitive landscape on the eBOS side?
A: There are no significant changes; we believe we have the best solution and continue to focus on replacing traditional install methods. -
Project Cancellations
Q: Why were some projects canceled or pushed back into the funnel?
A: This is unprecedented for us; in one case, a project was canceled, and others shifted due to uncertainties, but our inbound order flow remains strong. -
Project Delays Lengthening
Q: Are project delays leading to early product deliveries?
A: No, customers are not taking product early. Project delays are real, and the time from quote to revenue recognition has increased over the past six months by about a full quarter.