Shoals Technologies, a provider of electrical balance of system (BOS) solutions, has reported impressive financial results for the first quarter of 2023. The company's adjusted EBITDA grew by an impressive 119% to $36.1 million, while adjusted net income grew by 163% to $23.8 million, both compared to the same period in 2022.
Revenue for the quarter also increased by 55% to $105.1 million, driven by higher sales volumes as a result of increased demand for electrical balance of systems and the company's combine-as-you-go system solutions. System solutions revenue increased by 95% compared to the prior-year period, and represented 87% of revenue versus 69% in the prior-year period.
Jeff Tolnar, President and interim CEO of Shoals Technologies, highlighted the company's impressive performance, stating, “We grew revenue by 55% year-over-year, with system solutions revenue increasing by 95% compared to the year-ago period, which contributed to significantly higher gross margin.”
The company's backlog and awarded orders as of 31 March 2023 were $527.5 million, representing a 75% increase versus the same time last year and a 23% sequential increase from 31 December 2022. The company added that the increase in backlog and awarded orders reflected continued demand for its solar products, including the recently introduced BLA+.
“Demand for our combine-as-you-go solution was particularly strong, with six new customers converting to our system during the quarter, bringing the total number of Big Lead Assembly (BLA) customers to 42,” added Tolnar.
Looking ahead, Shoals Technologies expects adjusted EBITDA for 2023 to be in the range of $145 million to $160 million, while revenue will be from $480 million to $510 million. The company plans to spend between $8 million to $12 million on capital expenditures based on current business conditions and other factors.
Shoals Technologies had an impressive year in 2022, with revenue and EBITDA increasing by around 50% year-on-year. The company's adjusted EBITDA in 2022 was about $93 million, increasing from $62.9 million, or by 47.8% year-on-year. In Q4 2022, its adjusted EBITDA was $30.1 million, increasing by 167.2% compared to $11.3 million for the prior-year period.
The surge in Q4 was driven by a $110.9 million one-time gain on the termination of a tax receivable agreement and higher income from operations, offset by higher interest expense. The company's strong performance is a testament to its commitment to innovation and the quality of its products and services.
