Strong Start For Shoals In 2025, Despite Lower Profits

US-based electrical balance of system (EBOS) and battery energy storage (BESS) solutions provider Shoals Technologies Group kicked off 2025 with revenue and backlog momentum, even as profits declined in the first quarter.

Revenues for Q1 2025 fell 11.5% to $80.4 million from $90.8 million a year ago, mainly due to pricing strategies, volume discounts, and product mix. Gross profit dropped to $28.1 million from $36.5 million, while gross profit margin narrowed to 35.0% from 40.2%. The company reported a net loss of $0.3 million compared to a $4.8 million profit in Q1 2024.

Nevertheless, Shoals maintained its guidance for 2025, projecting revenues of $430 million and adjusted EBITDA of $108 million for the year.

Analysts at ROTH praised Shoals' execution despite ongoing macroeconomic and policy uncertainties. “Shoals delivered a better-than-expected Q1'25, healthy Q2 guide, and reiterated its 2025 outlook. The company is seeing strong quoting/bookings activity, and customers are not indicating projects slowing in 2025. New products are a source of strength with the company winning a large hyperscaler project for its BESS solution. Management believes this guide accounts for the current, heightened market volatility/uncertainty, implying upside to H2'25 if there is tariff/policy certainty,” they added.

Looking ahead, Shoals guides for Q2 2025 revenues of approximately $105 million, about 10% higher than consensus forecasts. The company also reaffirmed its focus on expanding internationally, noting that international markets now account for over 13.4% of its backlog.

Speaking about the company’s performance, CEO of Shoals Brandon Moss said, “While volatility and uncertainty may dominate today’s headlines, the markets that we operate within are showing continued strength. Our value proposition of delivering high-quality, innovative products combined with exceptional engineering and design support is resonating with new and existing customers. The underlying fundamentals of both our industry and business opportunities remain very positive.”