PV balance of system (BOS) solutions provider Shoals Technologies posted an increased adjusted EBITDA in the first quarter of 2023, while the company expected yearly revenue of up to US$510 million.
In its financial results for Q1 2023, the adjusted EBITDA increased by 119% to US$36.1 million compared to US$16.5 million for the prior-year period. The adjusted net income grew by 163% to US$23.8 million compared to US$9.04 million during the same period in 2022.
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In addition, revenue grew by 55% to US$105.1 million, compared to US$68 million for the prior-year period. The improved revenue was 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.
“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,” said Jeff Tolnar, president and interim CEO of Shoals.
Shoals Technologies’ backlog and awarded orders as of 31 March 2023 were US$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 Big Lead Assembly (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 BLA customers to 42,” added Tolnar.
Looking ahead, the company expected that the adjusted EBITDA for 2023 will be in the range of US$145 million to US$160 million, while the revenue will be from US$480 million to US$510 million. When it comes to capital expenditures, the company said it will be in the range of US$8 million to US$12 million based on current business conditions, business trends and other factors.
Previously, the company announced that it expects to continue its growth this year thanks to the increased demand for its new products, while its revenue and EBITDA in 2022 increased by around 50% year-on-year. The company’s adjusted EBITDA in 2022 was about US$93 million, increasing from US$62.9 million or by 47.8% year-on-year. In Q4 2022, its adjusted EBITDA was US$30.1 million, increasing by 167.2% compared to US$11.3 million for the prior-year period.
The increase in Q4 was largely due to a significant increase in net income attributable to shareholders in the quarter, as it reached US$112.6 million, compared to a net loss of US$1.84 million during the same period in the prior year.
The increase in Q4 was largely due to a significant increase in net income attributable to shareholders in the quarter, as it reached US$112.6 million, compared to a net loss of US$1.84 million during the same period in the prior year. This surge was driven by a US$110.9 million one-time gain on the termination of a tax receivable agreement and higher income from operations, offset by higher interest expense.