Good afternoon, and welcome to Shoals Technologies Group Q3 2023 Earnings Conference Call. Today's call is being recorded, and we have allocated 1 hour for prepared remarks and Q&A. At this time, I would like to turn the conference over to Mehgan Peetz, Chief Legal Officer for Shoals Technologies Group. Please go ahead. Thank you, operator, and thank you everyone for joining us today. Hosting the call with me are CEO, Brandon Moss, and CFO, Dominic Bardos. On this call, management will be making projections or other forward-looking statements based on current expectations and assumptions, which are subject to risks and uncertainties. As you listen and consider these comments, you should understand that these statements, including the guidance regarding full year 2023, are not guarantees of performance or results. Actual results could differ materially from our forward-looking statements if any of our assumptions are incorrect or because of other factors. These factors include, among other things, the risk factors described in our filings with the Securities and Exchange Commission, including economic, market, and industry conditions, defects or performance problems in our products or their parts, including those wire insulation shrinkback matter, failure to accurately estimate the potential losses related to such matter, and failure to recover those losses from the manufacturer. Decreased demand for our products, policy and regulatory changes, supply chain disruptions, and availability and price of our components and materials. Although we may indicate and believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate or incorrect, and therefore, there can be no assurance that the results contemplated in the forward-looking statements will be realized. We caution that any forward-looking statement included in this discussion made as of the date of this discussion, and we do not undertake any duty to update any forward-looking statements. Today's presentation also includes references to non-GAAP financial measures. You should refer to the information contained in the company's Q3 press release for definitional information and reconciliations of historical non-GAAP measures to the comparable financial measures. With that, let me turn the call over to Shoals' CEO, Brandon Moss. Thank you very much, Mehgan, and good afternoon, everyone. I'll start today's call with some key highlights from the Q3. I'll follow with an overview of business conditions, our investment and production capacity, and a wire insulation shrinkback warranty investigation and remediation. I'll wrap up with some of my initial takeaways, one quarter into the job before I turn it over to Dominic, who will provide more detail on our financial results. Shoals had another great quarter, delivering record revenue, Adjusted EBITDA, and Adjusted Net Income. I'd like to thank the management team and associates for their strong execution in delivering these record results. Compared to the prior year, Q3 revenue grew 48% to $134.2 million. Revenue was slightly impacted by lower production yields early in the quarter as we ramped up our third Tennessee facility, which has already added 15 gigawatts of new capacity to our 2022 base of 20 gigawatts, bringing total capacity to approximately 35 gigawatts. I also want to thank our commercial team for delivering yet another record for backlog and awarded orders. Backlog and awarded orders were up 34% year-over-year and 16% sequentially to $633.3 million. We added over $220 million in orders during the quarter. We are also pleased to see emerging strength in our international business, which now represents more than 10% of our backlog and awarded orders. Moving now to the solar market landscape. The domestic utility-scale solar market is currently experiencing slower growth as a result of higher interest rates, lingering uncertainty about the IRA, supply chain constraints, and interconnection complications. Though we expect Shoals' growth rate to decline from the extremely high levels of the last few years, we believe that our domestic utility-scale business will continue growing at an attractive rate. We still see potential to partner with large EPCs, converting them to the Shoals solution and growing our penetration of current customers. Shoals has historically targeted large utility-scale projects that are approximately 75 MW and up, but we see an attractive opportunity to apply our industry-leading value proposition to smaller projects. Additionally, we're in the early stages of penetrating adjacent product markets to grow wallet share in the solar space. Turning now to international. We are targeting specific higher growth markets within Europe, Africa, Latin America, and Australia. These markets combined are more than double the U.S. market, and according to industry data, are growing at a 9% CAGR through 2026. In recent quarters, we announced major project wins in Australia, Latin America, and we expect growth to continue as international EPCs understand the value proposition of our entire product suite. As I mentioned earlier, more than 10% of our backlog in awarded orders is now attributable to our international business. In our EV charging business, we announced at the end of October that we will deploy our Fuel by Shoals eMobility solution for the U.S. Department of the Air Force, supporting an EV Charging as a Service pilot project to be provided by Leidos, a Fortune 500 science and technology leader. This project will support the Air Force's Climate Action Plan to achieve 100% carbon-free electricity by 2030 and net zero emissions at Air Force facilities by 2046. Shoals is proud to partner with the Air Force as they work towards reaching their emissions targets... Although it's early days in our e-mobility business, we're excited about our innovative above-ground EV charging infrastructure solution, which minimizes construction costs and accelerates EV charging deployments. Turning now to an update on production capacity. Shoals has a strong operational team that continues to execute and support our commercial growth. The team has been focused on increasing capacity in 2023 to meet our strong demand. Since January, we've installed almost 100 new machines, hired over 200 operators, and added 225,000 sq ft to our manufacturing footprint. As I mentioned at the start of the call, we completed the ramp-up of our third Tennessee facility in Q3. This facility increases our capacity by 15 gigawatts or 75% year-over-year. This brings Shoals' total capacity to 35 gigawatts, with the ability to scale to 42 gigawatts. With this added capacity, we estimate Shoals can serve growing demand well into 2025, further enhance production efficiency, and maintain our attractive margins. I'd like to take some time now to discuss where we stand on our investigation and wire insulation shrinkback warranty issue. on October 31, we filed a complaint to recover for damages caused by defective wire that Prysmian Cable Systems USA, LLC, sold to Shoals between 2020 and approximately 2022. Shoals has already expended millions of dollars in identification, repair, and replacement of defective wire, and is seeking full recovery from Prysmian for those, as well as future expenses related to the issue. Because of the pending litigation, we're limited to what we can discuss publicly. Based on our continuing analysis of information available as of today, the updated estimated range for potential loss related to wire exhibiting insulation shrink back is $59.7 million at the low end and $184.9 million at the high end. Dominic will provide more granularity on the breakdown when he reviews our financial results. Based on our own investigation and third-party testing, we determined that unacceptable amounts of insulation shrink back were occurring on Prysmian wire purchased from 2020 through 2022. The range of damages we are seeking reflects potential costs of remedial measures, including wire and labor, at the approximately 300 sites that include at least one harness made with defective Prysmian wire sold during this period. This represents about 30% of the total amount of Shoals harnesses manufactured in the same time frame. Shoals is committed to quality. Based on the information we have gathered to date, it is apparent that this insulation shrink back issue is unique to the defective Prysmian wire and not from any other wire suppliers. As we work to remedy the Prysmian defective wire issue, our top priority is taking care of our customers, which we are doing by leveraging our strongest assets, our people and our technology. Identifying the defective wire is time-consuming because of the size of solar fields, which can be as large as 4 sq mi, but we're focused on working as efficiently as possible. We want to emphasize that our underlying business remains very strong, and we expect it to continue to flourish through the resolution of this issue. Now, I'll take a moment to provide a brief update on the patent infringement complaints filed by Shoals with the ITC in May of this year. The evidentiary hearing is scheduled for March of 2024, and as we've emphasized in prior quarters, we'll continue to vigorously defend and protect our intellectual property. I'll now wrap by highlighting some of my initial takeaways and why I'm so excited about Shoals. In the Q1 of my tenure as CEO, I've focused on refining our company strategy, continuing to build our organizational capacity, and implementing a more robust operating model to sustain our strong execution. Shoals solutions continue to have an industry-leading value proposition, particularly in the current environment where there's a shortage of licensed electricians. A recent third-party study stated that utility-scale solar installation workforce decreased by 18% from 2021 to 2022. Conventional EBOS systems are expensive and time-consuming to install, and most of the work must be done by licensed electricians who continue to be in short supply. Our system reduces both material and labor costs. Additionally, our products are constructed in a quality-controlled manufacturing environment and are built to last, providing value to owners and power providers, versus traditional methods that have a high failure rate, such as field assembly and the use of devices like insulation piercing connectors. We believe we have ample room to grow in our core domestic solar market with large EPC partners and with a new focus on smaller projects. I'm also confident in our ability to accelerate growth in adjacent product markets and internationally. Shoals is an innovation leader with strong product development capability. We've been successful in growing share due to our ability to innovate better solutions. With our domestic manufacturing footprint in the U.S., we are well positioned to capitalize on the U.S. federal legislation that provides tax and other incentives for onshore manufacturing. Shoals will focus on markets that support global electrification, that are impacted by skilled labor needs and supply chain constraints. Our core competency of engineering quality, prefabricated plug-and-play solutions at scale aligns well with market needs.... By delivering these prefabricated solutions, we expect to continue to generate strong margins, and we are moving up our gross margin target, which Dominic will cover in greater detail. I'll now turn it over to Dominic, who will discuss Q3 2023 financial results. Thanks, Brandon, and good afternoon to everyone on the call. Q3 revenues grew 48% to $134.2 million, driven by higher production volumes as a result of increased domestic demand for solar EBOS. Gross profit was $14.2 million, compared to $36.0 million in the prior year period. Gross profit as a percentage of net revenue decreased to 10.5% from 39.7% in the prior year period, driven by wire insulation shrinkback warranty expense recorded in the period. The significant warranty expense was partially offset by improved pricing, slightly lower raw materials input costs, increased leverage on fixed costs, and efficiencies gained in operations. We have not booked any offsetting recovery from Prysmian. The liability and related expenses for addressing Prysmian's defective wire is based on our continued analysis of information available as of today. Based on this analysis, as Brandon noted earlier, we have an updated range of the potential loss related to the defective Prysmian wire, which is $59.7 million-$184.9 million. As no amount within the range of loss is more likely than any other, as of September thirtieth, 2023, our liability balance, broken down between current and long-term liabilities on the face of our balance sheet, remains $56.6 million. As Brandon noted, the range of potential loss reflects costs of remediation, including Shoals' manufacturing expenses and field installation labor. Because the complaint was filed on October 31st, before our Q3 10-Q, we used the amount of damages that had been accrued and was publicly available at the time of the filing of the amount of damages being sought as management, as well as our board, continued assessing and refining the updated range of losses to be accrued for the Q3. That accrued amount, as of our Q2, was not less than $9.3 million. The amount of damages we are seeking may be amended from time to time as the litigation proceeds and additional or different information becomes known. In the ordinary course of litigation, we will be required to make initial disclosures, in which we will include the most current, higher estimate of damages. To provide additional insight into our recurring gross margin performance, we have introduced additional non-GAAP metrics this quarter. Adjusted gross profit and adjusted gross profit percentage are non-GAAP metrics exclude wire insulation shrinkback expenses from our GAAP cost of goods sold. Reconciliations of adjusted gross profit and adjusted gross profit percentage are provided in our press release and 10-Q filing. Our adjusted gross profit for the quarter was $64.4 million, reflecting a 48.0% adjusted gross profit percentage. Year to date, our adjusted gross profit percentage of 48.7% excludes the cost of our expenses of remediation of Prysmian’s defective wire in both the second and Q3. For clarity, our normal non-GAAP metrics of Adjusted EBITDA and adjusted net income also exclude wire insulation shrinkback expenses from our cost of goods sold, as wire insulation shrinkback litigation expenses are excluded from the SG&A section of the income statement. Once again, reconciliations may be found in our press release and 10-Q filing. Q3 general and administrative expenses were $22.6 million, compared to $13.9 million during the same period in the prior year. The year-over-year increase in general and administrative expenses was primarily related to higher non-cash stock-based compensation, legal fees related to the patent infringement and Prysmian defective wire complaints, and planned increases in payroll expense due to higher head count supporting growth. Net loss was $9.8 million in the Q3, compared to net income of $12.8 million in the prior year period. Adjusted EBITDA increased 81% to $48.0 million, compared to $26.6 million in the prior year period. Adjusted EBITDA margin increased 649 basis points year-over-year to 35.8%, reflecting the impact of higher adjusted gross profit achieved this quarter. Adjusted net income grew 101% to $33.4 million in the Q3, compared to $16.6 million in the prior year period. Once again, both Adjusted EBITDA and adjusted net income add back the defective wire warranty expenses. During the quarter, we generated cash from operations of $27.7 million. In the quarter, we used excess cash to fully pay down the revolver. As I have stated on multiple calls, we will continue to prioritize investment in the business and driving shareholder value. As of September 30, 2023, we had $633.3 million in backlog and awarded orders, an increase of 34% year-over-year, as the company added over $220 million of orders in the period. It is important to note that some international orders have longer lead times than domestic orders, and we are booking jobs that extend beyond our historical revenue cycle of 9-13 months to realize revenue from awarded orders.... approximately 15% of our backlog and awarded orders have delivery dates beyond 2024. Turning now to our full year outlook. Based on current market conditions and visibility into anticipated Q4 production, we are narrowing our outlook for revenue and raising our outlook for Adjusted EBITDA and adjusted net income. Our outlook for interest expense and capital expenditures remain unchanged. For the year ending December 31, 2023, we expect revenues to be in the range of $485 million-$495 million. Adjusted EBITDA to be in the range of $165 million-$175 million. Adjusted Net Income to be in the range of $110 million-$120 million. Interest expense to be in the range of $22 million-$26 million, and capital expenditures for the full year in the range of $8 million-$12 million. Before I turn it back over to Brandon for closing remarks, I want to note that our long-term target for Adjusted Gross Profit percentage is in the range of 40%-45%, which we believe we can sustain going forward by managing price, operational efficiencies, and operating leverage. With that, I'll now turn it back over to Brandon for closing remarks. Thanks, Dominic. I would like to close by thanking all of our customers for their confidence in Shoals, our employees for enabling us to effectively serve our customers, and our shareholders for their continuous support. I'm incredibly excited about the opportunities Shoals has ahead. Shoals continues to have an industry-leading value proposition in the EBOS space, with great opportunity for continued growth in the domestic solar market. Our strategic focus on international expansion positions us to capitalize on higher growth international markets that will enable sustained growth in the coming years. Additionally, our world-class team, with its strong product development capability, will allow Shoals to keep building on its leading position by developing innovative products in both core and adjacent markets. With our asset-light business model that has industry-leading margins and significant cash flow generation, I am incredibly optimistic about what we can achieve in the coming quarters and could not be more excited about the opportunity ahead. With that, thank you, everyone. I appreciate your time today, and we will now open the line for questions. Thank you. Ladies and gentlemen, if you'd like to ask a question, please press the star followed by the one on your touch-tone phone. If you'd like to withdraw your question, please press the star followed by the two. If you're using a speakerphone, please lift the handset before pressing any keys. One moment please, for your first question. Your first question comes from Brian Lee from Goldman Sachs. Please go ahead. Hey, guys. Good afternoon. Thanks for taking the questions. Thanks for some of the additional disclosure here on some of the hot topics as well. I had a couple questions, I guess, regarding that. Maybe first off, on the warranty, you know, if I look at the cash flow statement, it looks like all of these, you know, close to $60 million you've represented are non-cash as of today. Can you give us a sense of, you know, how that potentially, you know, turns into more of a cash impact as you continuously remediate? You know, how many quarters it might show up over, and then, you know, whether it's OpEx or COGS? Just any sense of, you know, I know you're booking this as a liability, but sort of what is the ultimate potential cash impact you're anticipating, and over what timeframe, based on the fact that you're already kind of into the remediation process? Maybe you have an early look into that, and then I have a follow-up. Sure, Brian. Hey, this is Dominic. Thanks for the questions. Yeah, let me start by saying on the face of our balance sheet, in our liabilities and stockholders' equity section, we've tried our breakdown and estimated the warranty liability between current portion, which would be within the next 12 months, and the long-term portion of the warranty expense, which would be greater than 12 months out. We do believe the remediation will take multiple quarters, and therefore, we've just tried to estimate that. In our balance sheet, we've currently got $17 million of current liability expense. As you noted, most of it was a non-cash charge this quarter. $17 million that we have on the balance sheet is the current portion, with $39 million as the long-term portion of the warranty expense. And as you can imagine, the vast majority of that expense is gonna be related to COGS. It's really the manufacturing, it's the remediation, it's the labor to install these things in the field. So that's where the warranty expenses manifest. And there will be some expenses associated with litigation, that clearly would happen during this timeframe as well. That's the clarification I can provide. It's on the face of the balance sheet. It's in our press release and our Q as well. Okay, fair enough. Yeah, that, that's helpful. And then I guess on the demand backdrop, you know, you guys noted there's a little bit of a slowdown you're seeing, U.S. domestic, if I heard you correctly. But this, you know, $220 million plus of bookings, you printed in the quarter, it's one of your best quarterly bookings, metrics you've posted. So just trying to reconcile your commentary with kind of the results here. Is there sort of a, you know, precursor to bookings starting to slow as we move into year-end Q4? Or are you just, kind of throwing caution to the wind, but you're offsetting some of that through either market share gain or international and non-solar expansion, or both? Just trying to understand kind of where Shoals fits into that. ... dynamic of, you know, the high-level commentary around U.S. domestic maybe slowing a bit. Thank you, guys. Hey, Brian, it's Brandon. I'll jump in on that one. I appreciate the question. Yeah, look, you pointed it out. First and foremost, we're excited about the quarter, in terms of the bookings we've seen. Our quote volume is up 69%, and as you noted, $220 million of bookings in the quarter gave us a record at 633.3 of total backlog and awarded orders. I think really the thing to point out, 10% of our backlog and awarded orders is international business. Some of that international business is pushed out into 2025. Our total backlog and awarded orders that is for 2025 delivery is about 15%. So look, we're seeing the same choppiness that everybody's seeing in the marketplace that I indicated in my prepared remarks. There's some fear about interest rates, obviously, interconnections, complexities, still some lingering supply chain issues. We are not seeing overwhelmingly big changes in product push-outs. I mean, as you know, in this business, things move quarter to quarter, but there's nothing we're really seeing of significance there. I think the major thing is the forward-looking bookings into 2025. And then, look, this business has executed great the last couple of years. We've grown at a 50%+ CAGR since the IPO. You know, it's impossible for a company to do that on into perpetuity. We continue to feel very good about the marketplace and our ability to compete, and our goal is to outpace the market growth, and we'll continue to do that as a company. So, it's a great question. Thank you. All right. Thanks, guys. I'll pass it on. Appreciate it. Your next question comes from Philip Shen, from Roth MKM. Please go ahead. Hi, everyone. Thanks for the questions. Wanted to follow up on some of the warranty questions. Specifically, how confident are you that the $185 million could be the high end of the range? Is there potential that it could go beyond that? Are you still buying the Prysmian wire? And then, from... I think you were alluding to most of this would be a cash expense over time. It's not in cash now, but over time, does it become more cash? And then maybe what the mix of cash is there, and ultimately, how do you expect to pay for it? My guess is it comes out of your cash flow in the coming quarters. Just, just curious if you could give a little bit more color in terms of the source of how you pay for it as well. Thanks. Thanks, Philip. This is Mehgan. Nice to talk to you on this. So the first questions that I can answer are that we are no longer buying that Prysmian wire. That is in our complaint that has been filed. So feel free to check there for some additional details. And then as far as the further financial questions, I'll, I'll hand it over to Dominic. Yeah, Phil, there's a few things that we just have to be cautious. As Brandon mentioned, you know, this is active litigation. We do need to be careful about what we say. But in terms of how this plays out, as I mentioned earlier with Brian's question, we do believe that there will be, this will take multiple quarters to resolve. We hope to be very, you know, very forthcoming as solutions come forward from Prysmian, if there's something that comes forward there. As I mentioned, as we mentioned before, that there was no offsetting recovery booked in our financials at this point in time. So in terms of how we pay for it, we have cash from operations. I've got the full revolver, as we noted, we paid down the revolver in full. There's $150 million of liquidity available to us there. We continue to generate strong cash flows. And so from what we show on our balance sheet, from a current portion of the liability, we feel confident in our ability to handle all that through operations. Great. Thanks, guys. Shifting over to capacity, I think this is maybe the first time you talked about capacity in megawatts. Sorry if I missed that earlier. It seems like you're going from 20 gigawatts to, you know, call it 35, and was wondering what you thought the utilization on that 35 might be through 2024. Do you expect to be at a high utilization rate? What might dictate and be the catalyst to expand beyond the 35 to the overall 42? Thanks. Phil, it's Brandon. I'll take that, and great question. We won't guide on 2024 specifically. We're excited that we've added 15 gigawatts in 2023, and as I mentioned in the prepared remarks, we can scale that up to 42 in our current footprint. You know, what is probably most exciting for me is we're not only adding capacity, we're becoming more efficient. The conference room I'm sitting in right now, I'm looking out on our plant floor, and each and every day, we're getting more efficient in our ability to produce our harnesses, our BLA product, and the facility is getting safer and safer each day. So I'm excited about how the operations team is executing. We continue to invest in this business, and we'll continue to do that in years to come. But we are set for capacity probably through 2025, as I noted in my remarks. Thanks, Phil. Great. Thanks, Brandon. I'll pass it on. ... Your next question comes from Jordan Levy, from Truist Securities. Please go ahead. Hey, thanks. This is actually Mo on for Jordan. Thanks for taking my questions. So, could you please maybe talk about the initial reception to your SnapShot product offering, and what this means, you know, for future product extensions into your Gateway family of products? And I have a follow-up. Sure. I'll, I'll take that. Look, SnapShot, it's, it's very early days for, for, for that product, really launched at RE+ this year. The feedback that we got at RE+ for that particular product was amazing. And we have been out since RE+ taking that product to investors and owners, and the feedback that we've gotten from them has been very, very strong. Again, you know, it is early days. It's a new product for us. It gets us into the monitoring space. I think most exciting about the product is, is it opens up market opportunity for us to sell something into a, into a solar plant that has already been constructed, and we've never had a product like that before. So, this opens some windows for us. It opens windows to the monitoring world, and I think we can continue to expand off of that as a product suite. So early days again, but very excited. Great, thanks. Second question, really quick. So on our capital allocation, I mean, you paid down the revolver this quarter. So now, how are you thinking about your M&A strategy in the current market? And are there any, like, natural extensions to EBOS Gateway products that make sense, like, conceptually? Thanks. Sure. Great question. This is Dominic here. Yeah, as we've said before, we are very interested in driving growth, organically, as well as looking at inorganic growth. You know, with the cash flow characteristics that we have as an organization, the base business, we feel very confident in our ability to continue to drive strong cash flow margins. In terms of how we look at that, you know, strategically, we are always evaluating opportunities. When we're ready to make those announcements for you, we absolutely will. But, at this point in time, we're focusing on our organic growth as we've kind of laid out. And then think in the Q1, when Brandon's ready to talk about, you know, strategy update and an analyst day sort of thing, then that's when we'll start talking about what might be out on the horizon. But thank you for that. Thank you so much. Your next question comes from Susan from DNB. Please go ahead. Hi, thanks for taking my question. Just following up on the backlog questions, rising quite, quite nicely, there's that international portion. Any ability to share Book- to- Bill for U.S. EBOS specifically? And is there any material EV charging bookings in there? Yeah, we haven't broken down the exact book-to-bill between domestic and international. That's something that, as we said, 10% of the backlog and awarded orders is currently at that point. I imagine that percentage will climb if the lead times of those international projects are longer, and that's why I alluded to in my prepared remarks. Because I wanted everyone to understand that the kind of the revenue cycle that we've talked about historically may be lengthening and shifting as we continue to build that international business. But as Brandon mentioned, I echo the enthusiasm for the strong strength of our pipeline, the quoting activity both domestic and international. And I'm glad to see international taking a larger piece. We just haven't broken it down specifically, but we'll keep that in mind for next year. Great. Where is market share today on BLA? Sort of a metric that was quoted in the past. Just curious if you have a view. You know, as far as BLA goes, you know, we have had fantastic penetration of that product. I mean, since IPO, we've 10x our share of EPCs that are using that solution. You know, at this time, we're not going to speak specifically to market share or market share of a particular product. But we are excited about that product, and I think there's still room for it to grow. There's still new EPCs that we can target, and there's also deeper penetration within the current EPCs that we're doing business with. As far as market share goes, as we've talked about in the past, there's you know, historical volatility in those market share estimates that's caused by really some definitional issues across industry data providers. So, not gonna speak to market share specifically at this time, but again, reiterate that our plan is to grow faster than the marketplace. Very helpful. And I guess just one more quickly on the manufacturing capacity of 35 gigawatts. Just to clarify, is that to produce BLA+, or is that a blend across BLA and the traditional home run? That would be our ability to produce both products. So that is across our product suite. Your next question comes from Colin Rusch, from Oppenheimer. Please go ahead. Thanks so much, guys. Can you talk a little bit about your ability to move some of the stationary storage and charging projects through the Q in your pipeline, and give us a sense of, you know, kind of an order of magnitude in the backlog, how much of that backlog is not solar? Yeah, we haven't broken that down. I appreciate that question, but we are not providing that level of detail. The Backlog and Awarded Orders does include all product types, but we haven't reached that. What we did want to show was the strength of the international, because that hit a level of significance for us this time around, that we felt it was appropriate that you have that for your models, that you see that the strength of the quoting activity and the awarded orders in the international space is now 10% of our Backlog and Awarded Orders combined. But that's more important to us at this point in time that you see that. The rest, we haven't broken down. Okay. I'll take it offline with the rest of that. And then on working capital, you guys have done a nice job of shrinking the working capital consumption here, and limited inventories are actually getting pretty lean. Can you talk about how we should be thinking about that trending through the balance of this year and the next year, you know, as you grow and start working on multiple continents, presumably? How should we be thinking about those inventory levels growing and overall working capital usage? Yeah. So, as I've said, and I think now this is probably 4 or 5 earnings calls in a row where I've said this, that I believe there's still more room for inventory optimization. We intend to be as efficient as possible. That said, there are some growth pillars that we're examining from our strategic plan that might cause investments in inventory, but we'll be able to signal that. So I do think inventory, we still have some more room to optimize, and then it'll get to a point where it will just naturally have to grow with our growing business volumes. Our receivables are higher than I want them to be right now. If you look at our balance sheet, you know, the receivables, it's a factor of growth, absolutely. But there are things that we can always do to be more efficient in our invoicing process and make sure that we hit cutoffs and work with our customers to get those payments in a more timely fashion. So that's going to be an area of focus for me. But you did see the improvements in the accounts payables and inventory, as you've noted. So yeah, working capital is as important to me as driving the cash and the efficiencies out for everybody as anything on the income statement. So I appreciate that line of questioning. Thanks so much, guys. Ladies and gentlemen, as a reminder, please limit yourself to one question and one follow-up question. Your next question comes from Mark Strouse from JP Morgan. Please go ahead. Hi, this is Michael on from Mark. I just have one question. I was wondering if you guys could talk about the new focus on smaller projects and just how you're looking to attack that market and how small those project sizes could get. Thank you. Yeah, Brandon is going to handle that one. This is Dominic. I just want to give you one bit of notice on that. You know, when we look at data, as many of you probably do as well for, like, Wood Mackenzie, many of those smaller projects are included in utility-scale solar. So in the total utility-scale space, those smaller projects have always been included. As we've mentioned before, our focus has predominantly been the 75 megawatts and up, and I'll hand it over to Brandon. Yeah, thanks, Dominic. Yeah, look, the smaller product, the smaller projects, I think that our product suite is applicable to those, right? The same value proposition we have on larger products, many of those can be applied to smaller projects. The way that we think about this market opportunity is about a 10% growth to our total available market. So, that will be the focus for us. You know, specifically going into 2024, we will gear up commercially around that and begin focusing on those smaller markets that we may have ignored in the past. We've got the capacity to attack those markets now, and I think with our production of efficiencies, we can be very competitive in that space. Your next question comes from Andrew Percoco from Morgan Stanley. Please go ahead. Good evening. Thanks so much for, for taking the questions. Maybe just to, to come back to the wire shrink back issue, could you maybe just discuss any customer impacts? Have there been any projects that have tripped offline from this, or has this been kind of a proactive warranty campaign? This feels like that could be a pretty important kind of swing factor in terms of the remediation timeline, and cash impacts of, of this warranty issue. Mehgan, maybe I'll kick that to you- Thank you. and then I can talk specifically about the customers. Yeah, absolutely. Thanks, Andrew, for asking. I think our top priority is always our customers, so those relationships are important to us, and we will continue to take care of them through this process. So as we started to investigate the matter, we did notify our customers, and we had a process for doing that, and we have been working with them to identify, remediate, and as necessary, replace any issues that they've had. Megan, maybe just to add to that, you know, we, as Megan said, we're proactively reaching out to our customers. We have not seen any project movement specific to the warranty issue. I think the customers understand that this is a supplier issue, and as Megan said, taking care of them is our top priority. So, I think everybody's appreciative of how we're communicating and working in the marketplace around this issue. Understood. Thank you for that, for that color. And maybe just as a follow-up on, on the macro environment and the growth outlook for utility-scale solar, are there any specific ISOs or geographies where you're seeing more of an outsized impact from, from project delays, whether it be permitting, financing, IRA uncertainty, IRA uncertainty? Just wondering if there's specific geographies that we should be focusing in on in terms of, of where the delays are occurring. Thank you. Nothing specific I don't think that we could point out in terms of geographies. And again, the movement that we're seeing, you know, quarter to quarter, month to month in terms of project delays has been quite typical of what we see, I think we've seen historically in the business. You know, look, we manage our funnel very closely. We understand, ... you know, where projects are falling almost on a daily basis. And again, no significant movement due to the things that you're reading about these days. So, we're pretty pleased with where the business sits today, and again, no significant pushouts. Great. Thanks so much. Your next question comes from Christine Cho from Barclays. Please go ahead. Thank you for taking my question. I just wanted to, you know, I appreciate the color about the longer lead times for international projects, but would it be fair to say that, you know, a big chunk of the international bookings were seen this quarter? And I just also wanted to confirm that, you know, the bulk of that is actually, you know, solar. And then would it be correct to think that similar to the U.S., the customers start off using some of the components before, you know, upgrading and going to systems? Christine, that's a great question. I guess, you know, one piece at a time here. I would say that, yes, the international bookings that we are seeing are solar projects. I don't think that they specifically came in this quarter. I think it's been probably a build over the last couple quarters. We've got a big focus on growing our international business. Since I've joined, we continue to refine our strategy. We're adding resources to help build that strategy, and it'll be a big focus for investment for us going into 2024. So, pleased with the direction of the international business. And again, I think it's gonna be a great spot for growth for us in the future. I think I hit all the... if I answered all of them, or did you have one more? Component to- Oh, the component piece. Yeah. Yeah. Great, great question. Look, I think a great opportunity for Shoals, whether it be domestic or international, to bring somebody into our solution. We typically look at our components business as components and don't call them solutions. But as you know, virtually everything that we make here at Shoals is an engineered-to-order product. It is a specific product for a specific site or customer. And so, you know, for us to get somebody in the door and working with us on a components business, and then our salespeople and marketing folks do what they're supposed to do and convert them to a BLA system is exactly how it's supposed to work. So yeah, I would see us approaching the international market just as we have the domestic market. Okay. And then, my follow-up. I'm sorry if I missed this in the prepared remarks, but could you talk about, like, what specifically drove the revenue being narrowed towards the lower end of the range? Are your customers seeing delays? And then also systems, you know, like, over the past several quarters, was a larger percentage of total revenue. It was pretty strong, but I saw that it, it kinda declined this quarter. So just curious as to what drove that. Well, yeah, Christine. So first of all, yeah, I'm very pleased that we're able to peg the revenue range at the beginning of the year and come in right and refine that, as you noted. So that's really. We're really pleased to be able to do that. Yeah, I think there's a couple of things. We talked about the capacity that actually slowed down our Q3. So I wouldn't characterize the Q4 issue as why we narrowed it where we did. I think internally, we probably would have liked to have had a little bit more. We have the capacity to do more revenue. We've narrowed the range based on the visibility of what we have. There's nothing abnormal about project give and take within a quarter, moving from period to period. Sometimes the mix is a little bit different. I think if you look in our Q, you'll see that, it's in the Q, where you see our components business was a slightly higher percentage this time. And so there's just a little bit of a difference in product mix. But, you know, we called the revenue shot at the beginning of the year, and we're very pleased to come in that range. Your next question comes from Vikram Bagri, from Citi. Please go ahead. Hi there, it's Ted on for Vik. I wanted to touch on 4Q gross margin implied by the guide. It still looks pretty healthy. Just curious, is there anything to call out in terms of product mix or on the project side there? Just trying to think about how to square that with the new 40%-45% gross margin target that you laid out. Just curious if you can kinda give us directionally any indication on where we should expect gross margins to be. Yeah. So, one of the things, you know, we did raise—we, we've always said that we had a 40% kind of target for gross margin, and we've—actually, we believe that 40%-45% is still very attainable. There were some investments that we'd still anticipate making in the, in the gross margin area as we look, you know, to our capacity, looking to the facilities, how can we drive even greater efficiencies down the road? Product mix, as I just mentioned, some of the inroads that we're making with some EPCs does happen to be in the component space, as we've talked about. And so the mix this time is actually a lower percentage of system solutions as opposed to what we've had in the past couple of quarters. So in the guide, you know, you see a kind of a general pullback, I would say, from the record high gross margin that we've been achieving. But there's only so much margin that we can take. You know, being a public company, we are constantly looking over the shoulder at competition and making sure that we're providing that competitive value for our customers. So I think over time, you know, bringing that gross margin back down into the 40%-45% range is desirable for all parties, and that's gonna be our longer-term target. ... I see. Thank you. And I have just one follow-up. On the capital allocation side, you paid down the revolver this quarter. Just curious if you have any thoughts around potential pay down of the term loan. I think the prepayment penalty expires this year, so just curious on your thoughts there. Excellent memory, Ted. That's fantastic. Yes, the prepayment expires this month. The penalty does go away. We are exploring alternatives for that all the time. Even if we look at, you know, just playing interest rate arbitrage, the revolver does carry a smaller or I would say, a lesser interest rate charge than the term loan does. So we are looking at that. We're talking to lenders all the time, and until we announce, we won't. But, yeah, yes, so I appreciate the question. Ladies and gentlemen, as a reminder, should you have a question, please press the star followed by the one. Your next question comes from Donovan Schafer from Northland Capital Markets. Please go ahead. Hey, guys, thanks for taking the question. I wanna talk about the international market. So it looks like you guys shared some good details there, and it's nice to see that as kind of part of the backlog. I am curious, you know, talking to you know, developers and EPCs, it seems like there's still, like, maybe a bias or a tendency in a lot of international markets to stick with trenching cables underground in a way that, you know, would limit some of the value add in the BLA. And so my question is, you know, is that true in your experience? And then is it just a matter of kind of, you know, education to overcome that so that you can convince and show them, you know, they can run something like that above ground? Or is it like a regulatory or code-driven thing where, you know, it would take a while, or you'd have to, you know, push from a regulatory angle or something like that? Donovan, good to hear from you, and thanks for the question. Look, you know, part of what we're working right now is to refine that international strategy and, you know, find specific markets where our value proposition probably most resonates. In some situations, that may be areas that are more open to above-ground applications than trenching. And as you mentioned in other scenarios, I think it's an education process, right? You know, Shoals had to teach the domestic industry a better way to handle electrical balance of systems, and there's probably some areas where we're going to have to do that internationally. So, you know, big, big focus on that for us right now, specifically understanding what markets make most sense for us to play in and really where to put some chips on the table. So, more to come on the international piece. Just know it's a big area of focus for us at the moment. Okay. And then, for my follow-up, one of the things, you know, in talking, to, to customers, they really, really value all the kind of support. And I think in some cases, for developers, having any of that overhead altogether, someone internal that can review the wiring designs and so forth. So, you know, that's a big... That's been a significant advantage for you guys, and, you know, execution, you know, reliability, some other things. So, just outside of the technology piece, are you guys working on any other-- are there any initiatives, you're working on to help keep the lead in that kind of support or service versus competitors? I do know, you know, some competitors are starting to, to try and do more of this kind of engineering. And then also the role of that internationally. You know, do you need more folks in design engineering support teams to help do some of that work for international projects? Yeah, Dominic, or sorry, Donovan, you're cutting in and out a little bit there, but I think I got the gist of the question. Look, one of our competitive advantages is our ability and our call it institutional knowledge of designing you know utility-scale solar fields. So I think you know we continue to get better and better in that function, and people do understand the value of that. I think we've got the ability to lower their total cost of ownership. You know that is a competitive advantage for Shoals along with our you know our patent-protected products. So both are very important to us. As it relates to international you know fantastic point. I think as we grow internationally, we'll have to put that engineering capability on the ground in the region wherever we operate, so we can get closer to the customer. We're operating on the same time zones, so forth and so on. Additionally, as we've mentioned on prior calls, we are going to invest likely in manufacturing and supply chain in those regions where we operate. So, I would think of our international footprint in the future state as being, you know, more of a full business offering, similar to what you would see here in the United States. Okay, thank you. I think I answered your question there. Thanks, Donovan. Your next question comes from Derek Soderberg from Cantor Fitzgerald. Please go ahead. ... Yeah. Hey, thanks for taking. I just have one line of questioning here, just around international growth. I'm curious, what specific criteria for inorganic growth opportunities are you targeting? You know, is it really to pursue you know, local manufacturing to get scale? Is it to expand into new products? You know, it's a pretty significant TAM there. I'm just curious, what's sort of the best way to go about accelerating that growth internationally? Thanks. Yeah, fantastic question. Look, we're evaluating international markets in a pretty comprehensive way. I mean, obviously, we want to pick an area that has fantastic scale and forward-looking market growth. We are also looking for areas that are maybe easier to operate in than other areas. So, you know, political and economic climate obviously plays a part into that. And then again, how well our value proposition may or may not resonate in that market. So, look, as I mentioned, we're working hard to refine that strategy now. You know, maybe get more granular than we have in the past, quite honestly. So I think organic growth on the table, potentially inorganic growth on the table. And, you know, we're specifically in that market looking at solar applications right now. So it would not be, you know, an area outside of solar at the moment. We want to stick to that solar space and where we can drive our brand and value proposition. The good news for us is a lot of these larger EPCs or global EPCs; they learn about the Shoals name. You're working domestically, and they take us to other areas around the globe. So we think, you know, we think we've got a fantastic opportunity, and we'll continue to invest in that space. There are no further questions for today. Ladies and gentlemen, this concludes your conference call for today. We thank you for joining, and you may now disconnect your lines. Thank you.