Shoals Technologies Group, Inc. (SHLS): ANSOFF MATRIX [Dec-2025 Updated]

You're looking for clear growth paths for Shoals Technologies Group, Inc., and honestly, the strategy to hit that $467.0 million to $477.0 million revenue guidance for 2025 is laid out right here in four precise steps. This isn't just abstract planning; it shows exactly how they plan to lean into US manufacturing for Inflation Reduction Act (IRA) tax credits, aggressively expand into South America and the Asia-Pacific, accelerate the launch of that redesigned Battery Energy Storage System (BESS), and even jump into the defintely high-growth data center power market. It's a sharp, actionable roadmap balancing near-term execution with smart expansion, so read on below to see the concrete moves planned for each quadrant.

Shoals Technologies Group, Inc. (SHLS) - Ansoff Matrix: Market Penetration

You're looking at how Shoals Technologies Group, Inc. can drive more sales from its existing US utility-scale solar market-that's pure market penetration. It's about selling more of what you already make to the customers you already know. Here's the quick math on the key levers you're pulling right now.

Target a 37.0% Gross Margin Floor

You need to keep pricing sharp in the US utility-scale solar market to win share, but you can't sacrifice profitability. Honestly, your Q3 2025 gross margin hit 37.0%, which is right where you want to be, especially compared to Q2 2025's 37.2%. That Q1 2025 reading of 35% shows the pressure points, but management's guidance for mid-to-high 30% margins for the rest of 2025 suggests this floor is achievable. Keeping that margin floor firm helps you price aggressively against competitors while protecting the bottom line.

Here are the recent margin snapshots:

Leverage US Domestic Manufacturing for IRA Tax Credit-Driven Projects

The Inflation Reduction Act (IRA) incentives are a massive tailwind for domestic content, and Shoals Technologies Group, Inc. is positioned to capture that. You announced an $80 million expansion of your Tennessee manufacturing operations last year to capitalize on this. The domestic content bonus credit under the IRA can be worth 2% or 10% for qualifying projects, which developers will definitely prioritize. This focus on U.S.-made components helps you align with the IRA's goal of building a sustainable domestic supply chain.

The growth in U.S. solar manufacturing capacity is significant; it has increased fourfold since 2022, pushing national capacity beyond 31 GW. This environment means your domestic production is a key selling point.

Increase Sales Force Incentives to Convert the $720.9 Million Backlog

You've built up a significant pipeline of committed work, so the next step is accelerating the conversion of that backlog into recognized revenue. As of September 30, 2025, your record backlog and awarded orders stood at $720.9 million. That's a 21.0% increase year-over-year, which is fantastic demand capture. To move that $720.9 million faster, you need to make sure your sales team is highly motivated to close the final documentation and push those projects into the near-term delivery window. Remember, the Q1 2025 report noted that about $500 million of the backlog at that time was scheduled for the next four quarters.

Here's how that backlog has stacked up:

• Backlog as of September 30, 2025: $720.9 million
• Backlog as of June 30, 2025 (Q2): $671.3 million
• Backlog as of December 31, 2024: $634.7 million

Offer Bundled EBOS Solutions with Extended Warranties

EPC firms are managing risk on massive projects, and your Electrical Balance of Systems (EBOS) solutions are mission-critical components. You already lead with plug-n-play systems that reduce onsite labor, which is a form of risk reduction. To further penetrate this market, bundling your EBOS solutions-which include cable assemblies, combiners, and disconnects-with extended warranties directly addresses the EPC's concern over long-term operational risk. While I don't have the specific warranty cost or risk reduction percentages you are offering, the value proposition is clear: fewer failure points mean lower Operations & Maintenance (O&M) costs down the line. You are a recognized leader whose solutions are deployed on over 62 GW of solar systems globally. That scale gives you credibility when offering extended terms.

Your full-year 2025 revenue guidance is between $467.0 million and $477.0 million, so converting that backlog is defintely key to hitting the top end of that range.

Shoals Technologies Group, Inc. (SHLS) - Ansoff Matrix: Market Development

Aggressively pursue new contracts in South America, following the 110 MW Chile project win.

Shoals Technologies Group, Inc. secured a contract with CJR Renewables to supply its Big Lead Assembly (BLA) system for the 110 MW Alcones solar project in Chile, marking entry into the South American market. Once operational, the Alcones project is expected to generate electricity for over 86,000 households.

Grow international awarded orders beyond the current 13.4% by establishing regional sales hubs in the Asia-Pacific.

The international markets comprised more than 13.4% of backlog and awarded orders as of March 31, 2025. As of September 30, 2025, international markets comprised more than 11.5% of backlog and awarded orders. The total backlog and awarded orders reached a record of $720.9 million as of September 30, 2025.

The trend in the international portion of the backlog and awarded orders is detailed below:

Tailor the Big Lead Assembly (BLA) system for the smaller-scale Community, Commercial and Industrial (CC&I) solar market.

Shoals Technologies Group, Inc. reported commercial success in the CC&I market as of its Q1 2025 results. The BLA system consolidates electrical connections, eliminates the need for standard combiner boxes, and reduces on-site wiring complexity. The BLA system is configurable for up to (4) 8 AWG or (8) 10 AWG input leads per BLA mold drop.

Use the 243 MW Maryvale project in Australia as a reference for future Pacific region solar-storage bids.

The Maryvale Solar and Energy Storage Project in Australia involves Shoals Technologies Group supplying components for approximately 243 MW of solar generation capacity, paired with 172 MW of battery storage. The project integrates solar capacity with a 172 MW / 409 MWh battery energy storage system (BESS). The project is one of Australia's largest DC-coupled solar and battery energy storage systems.

The full-year 2025 revenue outlook for Shoals Technologies Group, Inc. is in the range of $467.0 million to $477.0 million.

Shoals Technologies Group, Inc. (SHLS) - Ansoff Matrix: Product Development

You're looking at how Shoals Technologies Group, Inc. plans to grow by introducing new offerings, which is the Product Development quadrant of the Ansoff Matrix. The company's strategy is clearly leaning into adjacent markets like Battery Energy Storage Systems (BESS) while enhancing its core Electrical Balance of System (EBOS) offerings.

The CEO expressed excitement about the battery energy storage program, noting they are starting to see proof points in that business, which is driving data center and grid-scale opportunities. This focus on BESS is strategic because the domestic market opportunity for BESS is substantially larger than traditional Solar & Storage, and Shoals Technologies Group, Inc. believes its existing products can meet those different end market needs. Also, the three international projects that started shipping in the third quarter of 2025 all incorporated new products, showing that product innovation is directly fueling global expansion.

The company's commitment to innovation is backed by its capital plan. For the full year 2025, Shoals Technologies Group, Inc. anticipates capital expenditures in the range of $30.0 million to $40.0 million. You should expect a portion of this budget to be directed toward the necessary R&D and tooling to bring these next-generation solutions to market.

Here's a quick look at the latest full-year 2025 financial outlook figures:

The current demand environment provides a strong foundation for these product-focused efforts. As of September 30, 2025, the backlog and awarded orders (BLAO) reached a record of $720.9 million, which is a 21.0% increase year-over-year. This substantial order book gives the company visibility and the financial cushion to invest in developing the next wave of products, like the new DC-coupled EBOS solutions designed for more efficient solar and BESS integration on US sites.

The push for new product variants is also evident in the international segment, which now comprises more than 11.5% of the total backlog. Developing products that accommodate diverse project sizes and challenging US terrain is critical for capturing market share both domestically and abroad, especially as the company ships new product designs into international markets.

The third quarter of 2025 performance showed strong execution on existing product demand, with revenue hitting $135.8 million, a 32.9% increase year-over-year. The gross profit margin improved to 37.0% in Q3 2025, up from 24.8% in Q3 2024, partly because a $13.3 million wire insulation shrinkback warranty expense from Q3 2024 did not recur. This improved margin profile helps fund the ongoing product development pipeline.

You can track the success of these product initiatives by watching the book-to-bill ratio, which stood at 1.4 in Q3 2025, indicating that new orders are outpacing current shipments, a good sign for future product adoption.

Finance: draft 13-week cash view by Friday.

Shoals Technologies Group, Inc. (SHLS) - Ansoff Matrix: Diversification

Finalize and launch the new data center power solutions product line, a defintely high-growth adjacent market.

Shoals Technologies Group is working on data center power solutions and battery energy storage systems solutions. The U.S. addressable market for these data center storage solutions is estimated to reach approximately $2 billion by 2030 and $4 billion by 2035. The global data center market is projected to grow from $162.79 billion in 2024 to $608.54 billion by 2030, reflecting a compound annual growth rate (CAGR) of 24.6%.

Target hyperscale data center construction projects in the US and Europe for the new power solutions.

The European data centre market is projected to add 937MW of new capacity in 2025, marking a 20% increase from the previous year. Frankfurt, Germany is noted as Europe's leading data center hub. International orders comprised more than 11.5% of backlog and awarded orders as of September 30, 2025.

• New combiner boxes will be built in Europe and in Australia.
• Targeting growth in data centers with established utility-scale solar relationships.

Explore strategic partnerships to enter the electric vehicle (EV) charging infrastructure EBOS market.

Shoals Technologies Group is a manufacturer of electrical balance of systems for solar, energy storage, and e-mobility. The company is exploring opportunities in battery energy storage systems (BESS) which are synergistic with EV infrastructure needs.

Allocate capital expenditures to domestic manufacturing for non-solar components, supporting the new product lines.

The company announced an $80 million expansion of its Tennessee manufacturing operations last year. The latest full-year 2025 capital expenditures guidance is in the range of $30.0 million to $40.0 million.

• Full Year 2025 Capital Expenditures Guidance Range: $30.0 million to $40.0 million.
• Prior Full Year 2025 CapEx Guidance Range: $25.0 million to $35.0 million.

Finance: draft 13-week cash view by Friday.