Okay, I think we'll get started here. Thank you, everyone, for joining this fireside chat with Shoals Technologies Group. My name is Christine Cho. I am the CleanTech Analyst here at Barclays, and with me today I have Brandon Moss, CEO of Shoals. Thank you, Christine. Thank you for having me. Good morning, everybody. Happy Labor Day. I thought our conference is pretty timely with all the changes that have gone on over the last several weeks. I thought we would start with, now that the final Treasury guide is out, which eliminated the 5% rule for utility solar, can you just give us an update on what the current demand environment is like? If you can give us maybe some sort of comparisons, if applicable, about how the customer conversations are different pre-IRA versus post? Yeah, I think, Christine, to start, maybe just what's driving the demand environment? Bill or no bill has not changed, right? I mean, there is an unbelievable need for load growth, and in the near term, still, solar is probably, by and large, the best opportunity to fill that near-term need. So the demand environment before and after has been strong, and I would say consistent the whole year. It's been very robust. And so, look, if there's any change in anything related post-bill, I think it's certainly further out into the decade about a continued strong demand environment. Our customers who are EPCs, for the most part, we're dealing directly with EPCs. They have had packed construction calendars from the beginning of the year and even exiting last year. So not much has changed. We've got a great order book for the remainder of this year going into 2026 as to our customers. Do you expect sort of any changes to how the utility- scale market is going to operate or procure business or how they've been doing things as a result of the bill? Look, there's been a lot of people talking about a pull forward of business. And again, from where we sit, we're later stage in the construction cycle. I think that the larger EPCs that we deal with directly are tremendously busy. Construction calendars are full. If there is a rush to do more business sooner, your bottleneck is going to continue to be around labor. And I think that's ultimately a beneficial thing for companies like Shoals that offer labor-saving and productivity enhancements. So I think the only change in business from EPCs will be how do we deploy faster. How do we cut timelines. More recently, you've been talking about the four pillars of growth. If you can just go through those four briefly and maybe talk about the one or two that excite you the most? Sure. Yeah. Starting back when I joined the company now two years ago, we relaunched a corporate strategy, and the thrust of that was around diversification. Not only to diversify in markets and products, but also in our core business to continue diversification around the customer set that we were doing business with, and that has materialized over the last 24 months, so one of the things that we did when I joined the company is we exited the EV business. I don't know if you remember, we had an EV business at one time, and put a big focus on four growth pillars, and these growth pillars are near to our core. They're not a total diversification play yet. We believe that they were achievable with the talent and resources that we had at the time, and those are starting to take shape for us. So those four pillars for us, the first is our OEM business, which is actually the business that Shoals really was founded on, making junction boxes for solar modules. That business is doing quite well, as you can imagine, as module manufacturers are reshoring their capacity. So that business, from a velocity standpoint, has outgrown our other businesses over the course of the last 12-18 months. We also stood up a commercial and industrial business. Shoals historically had turned down projects that were smaller than 75 megawatts. We used the same engineering competency, the same production equipment on smaller jobs and larger jobs. And so we focused and got a group that is focused on that commercial industrial segment, and that business is growing quite well. Our international business is a big focus for us. Shoals had been successful in some areas internationally, but we really refined our strategy to focus on specific geographies, so exciting developments there for the company. You asked where I'm most excited. We have launched a battery energy storage business segment that is focused really on combining electrical sources. We make a product suite of combiners and recombiners, and that business, I think, has the most potential to change our company. If I think about five years in the future, what would I like Shoals to look like as an organization? It's a company that's enabling electrification. It is not wholly solar-focused like we have historically been, and this battery energy storage segment has the ability to get us there. Specifically in that business, we're focused not only on our traditional EPCs that we work with every day, but IPPs related to battery energy storage. We're now dealing directly with hyperscalers. A large segment of that business is data center-focused and has the ability to really scale for us in the near future. Can you actually go into that segment a little in more detail? Just sort of what are they? You mentioned hyperscaler data centers, but are they the only ones who are inquiring about this offering? And how should we expect timeline of when we could expect further updates, i.e., shows up in backlog? Yeah, sure. We are in the early stages of this business, and I think it's important to understand the sales cycle and how this product development will flow. Hyperscalers, IPPs are not the only folks that are interested in this product. We're dealing with DG EPCs. Those products and that sales cycle might be quicker-term business, and there is revenue being generated, and there are items in our backlog for smaller customers like those, so that is happening today, and projects are flowing. That said, for the IPPs and the larger battery integrators, where we have a more traditional OEM approach where we're selling a component to them, those sales cycles are longer. The engineering that we're doing with these individuals is jointly done, so they're coming to us with requirements. We're engineering, trying to meet those requirements and passing things back and forth. Those particular opportunities for us will require typically us to send an initial trial unit. That unit is evaluated with their system, and then after that, agreements are signed, forecasts are made, and we would go to a more traditional build-out and release. So early days still, signs are very good. We've got a lot of interest, and we are actually starting to ship some of these first units to be inspected by the larger IPPs and OEM opportunities that we have. So more to come probably in the next quarter or two. The business will be lumpy at first, like most immature businesses are. So I would expect maybe some quarters with larger bookings followed by some quarters with smaller bookings. The one thing to point out is the revenue for these larger opportunities is likely to be balanced and released over time. It will be some booking spikiness to start with. But we're very excited about the opportunity and the ability to get a product. Our traditional core products are influenced by the energy needs of data centers, right? These products actually have the opportunity to live on-site at a data center. Can you talk about the competitive environment specifically in this space? What are you offering, and who are you actually competing with? Yeah, it's a great question. If you think about the Shoals core competency at its core, we have built a business around manufacturing complexity and customization at scale. And so I think about this opportunity related to battery energy storage. It's simply that we are able to custom design and engineer solutions for companies at scale. And I think we fit a sweet spot in the marketplace. We are not an enormous electrical conglomerate that may be uninterested in some of the volumes that we see and having to do some of the customization that we have to do. And we're also not a smaller organization that these IPPs or larger battery integrators may be uncomfortable doing business with. So we can compete on flexibility, customization, and speed. And I think we found a nice little niche in the marketplace. Okay. Maybe just to touch upon international for a second, what are your growth opportunities here? What kind of demand are you seeing here? And when I think about Shoals in the U.S. market, the value proposition has always been you're replacing the need for high-cost labor, right? Is that also the value proposition that you're offering outside the U.S., or is it because there is no skilled labor? Just sort of how you think about it, Shoals? Yeah, it's probably the latter as it relates to labor. But I think as far as our international business goes, I think thinking about strategy, a lot of times it's maybe more important to figure out what you're not going to do than what you are going to do. I think historically, Shoals had an international business, but it was not focused around geographic markets specifically where the value proposition would resonate the most. We've narrowed our focus down around international in the last year, year and a half. For us, finding markets where a solution makes sense, and those are markets that are maybe less price-sensitive. There are also markets that use centralized inverters versus string inverters because a larger EBOS system does not pair well with string inverters. So that really leads us to focus on geographies like Australia, like South America, obviously two different markets in terms of labor costs, one being high-cost labor and maybe one being less so skilled labor. And we are seeing our solutions really resonate in those two particular markets. Australia is an interesting one for us. Currently, the political climate has changed in Australia here in the last six months or so. 80-plus% of their power generation is slated to be renewable energy by 2030. So you're going to see a lot of solar growth, continued solar growth in that particular region. Australia is also fairly advanced in the battery energy storage market, maybe ahead of where we are in the States. So I think it represents a great opportunity for us there as well. The other thing specific to Australia is the mining industry. The mining industry is looking to change their generation sources, and so there's some pretty large behind-the-meter opportunities. We've done some work there in the past, so you'll see us focus a lot on that particular region. We just hired a new country leader, a region leader for the Asia-Pacific market, and we expect to do some big things in Australia. Okay. That's new. I know we talked about the competitive landscape for BESS, but if we can talk about the competitive landscape for EBOS in the U.S., we've got the IRA. We've got this tariff environment that makes it hard for your Chinese competition. We've also seen some of your competition get acquired. Does this belong? Does an EBOS business belong inside someone bigger? Just sort of how you're navigating and thinking about the competitive environment, not just now, but going forward? Yeah. I think Shoals is in as good of a position from a competitive standpoint as ever before. We have really focused the last couple of years on almost a maniacal focus on the customer. We have got product innovation back in a spot probably as good as it's ever been within the company. And we're seeing that now pay off with the diversification of our order book and the engagement with EPCs that we have not either done business with or hadn't done business with in years. So I love where we sit today, and I love the engagement that we have with our customers through our engineering prowess, our customer care aspect, and obviously our product delivery. We have built a fantastic new factory that we're in the process of moving into that's got ample capacity now to really enable us to capitalize on the market we're seeing today, and I think will be a competitive weapon for us in the future. Whether an EBOS business belongs with another business, maybe not. I think we're comfortable with where we sit today. I think there's opportunity for us in the near to midterm to look at M&A potential as well, and we've evaluated some things there, but I'm happy with where we sit. Fair enough. Moving toward your customer concentration. In the last year or so, there was a high level of concentration, but it seems like that has been coming down in recent quarters. Can you talk about what is driving this, and should we expect it to continue to come down? Just sort of talking about the diversity of your order book going forward? Yeah. The diversity of the order book is fantastic now. As I mentioned, as we started, we needed to diversify our core business as well, our domestic EPC solar business, and we've done that. It's not something that was done overnight. I think the journey we've been on as a company the last couple of years, we don't maybe talk enough about. I mean, we have stood up virtually an entirely new sales team. We've stood up a marketing department. We did not necessarily have one of those when I joined the company. I just touched on the product innovation, but our product and engineering team, virtually in the last two years, we have done a complete overhaul on that and stood up a really good customer care team. We did that somewhat out of necessity around our wire insulation shrink back remediation issues. We've been able to take that function and really turn a negative situation into a positive. We are engaged with customers like never before. You'll see us continue that diversity of our order book. I mentioned in a meeting earlier today, looking back at some of our revenue statistics and customer profiles, we had six EPC customers that we would call the top 15 EPCs. That, in 2023, we did just under $50 million of revenue. Roughly 10% of our total business with those six customers. Today, if you look at our order book, our backlog, and awarded orders, we've got over $250 million that are in either backlog or awarded orders from those customers. I'm excited about, again, our competitiveness in the marketplace. I think it's as strong as ever, and the results are starting to show in the order book. Okay. Maybe moving over to the financial outlook for a second. You guys were very well known for your 40-plus% gross margins, which is an anomaly in the utility scale space. It's come down, still very nice at, let's call it the mid to high 30% range. But can you talk about what drove that and how you sort of balance that against top-line growth and then, let's call it EBITDA margins? Sure. Yeah. I think maybe most importantly is gross margin percentage, and you saved that question for later in the discussion, so thank you. That's been a question recently for us. Gross margin percentage is a metric. It is not our most important metric. It's not something that I wake up every morning and I'm thinking about. I am more concerned with growing this business profitably and diversifying the business and generating really strong cash flow for the business, which historically we've been able to do. And so while our gross margin percentage has come off of that 40% mark, and maybe to remind everybody, our margins are not impacted by 45X or any other tax benefit. Those margins are free and clear, essentially. We will continue to have and drive really strong margins. I think this strong demand environment will certainly help that in the coming years. Our new products and product mix will help that in coming years. So where 40% can be a bit of a North Star for us or an aspirational goal, I think in the near term, we'll continue to operate in that 35% to higher 30s number. We have got a big focus on operational efficiency. This new facility, as we move into it this year and into 2026, I think will pay dividends for us there. So we're not taking our eye off the ball of that 40%. It's just not the most important metric we're concerned with right now. And then last question for me. As we sort of think about free cash flow, you have been free cash flow positive for years. But in recent years, some of that has gotten eaten up by warranty issues, right? You're building out new manufacturing. The manufacturing, I think, comes to an end over the next couple of quarters, right? So the manufacturing build-out. So are there any other things that we should think about that might potentially eat into your free cash? And it's not you talked about M&A. Just sort of can you give us priorities on capital options? Sure. Yeah. I think changes to cash flow in the coming years. I mean, there's been really three things that have impacted our cash flow this year and last year. Warranty has been one of those. Probably this year and then last year, somewhere around the $30 million a year probably number has been consumed by warranty expense. We've had elevated legal costs as a result of the warranty issue and other issues that I would assume will peel off in the coming years, and you mentioned the new facility. We are probably in 2026, two and a half times our typical CapEx spend, and that will taper off. That will taper off next year, so you will see cash flow swing positive in 2026. We will have some working capital needs as the business scales, obviously, and that's a good thing. But you will see us swing back to positive cash flow in 2026 in a pretty big way. I look forward to all of these developments. It sounds like you guys are at an interesting point, crossroads, let's call it, with different lines of new businesses, free cash flow increasing. Yeah. I think, look, we've done a lot of hard work on the strategy side of things. We have done a lot of hard work on recruiting and retaining top talent. My team looks very different. My direct reports, if you think about our VP and director level subset of the organization, probably 50% of that talent is new since I've joined the company. So we've got the right team in place. I think we've got a really strong strategy, and we are executing that now, and you're starting to see the results of that. So I think a couple of years down the road, the Shoals that probably all of you knew and were used to is not going to be the Shoals that you see in the future. It's going to be a different organization. We're going to be playing in new markets with new products, and I'm very excited about that. Brandon, thank you so much for your time today. Thank you, Christine. Thank you, everyone, for joining us. Thanks, all. That's great. Thank you.