Shoals Technologies Group, Inc. (SHLS): Business Model Canvas [Dec-2025 Updated]

You're digging into Shoals Technologies Group, Inc. to see what's really driving their growth, and frankly, the answer isn't just 'solar'-it's proprietary engineering that saves serious cash on the ground. Honestly, their business model is defintely laser-focused on patented electrical balance of system (EBOS) solutions that slash PV wiring labor by up to 43%, which clearly resonates with the market given their backlog hit $720.9 million as of Q3 2025. I've broken down their entire strategic engine-from key partnerships securing supply to the precise revenue streams-so you can see exactly how they are positioning for the next decade of energy buildout. Keep reading to see the full, precise Business Model Canvas.

Shoals Technologies Group, Inc. (SHLS) - Canvas Business Model: Key Partnerships

You're looking at the core relationships Shoals Technologies Group, Inc. relies on to deploy its Electrical Balance of System (EBOS) solutions across utility-scale solar and storage projects globally. These aren't just vendor agreements; they are strategic alignments driving market penetration and product optimization.

The company's commitment to domestic manufacturing is cemented through its relationship with First Solar, Inc. This partnership directly supports the reshoring of the U.S. solar supply chain. First Solar's investment in a new Alabama facility totaled $1.1 billion, which created over 800 direct manufacturing jobs in the state. Shoals Technologies Group supplies custom junction boxes from its Alabama operations, which in turn supports First Solar's additional 3.5 GW solar manufacturing facility capacity. This alignment is critical for fueling domestic electricity demand growth.

Collaboration with Engineering, Procurement, and Construction (EPC) firms is essential for executing large projects. For instance, Shoals Technologies Group partnered with PCL Construction and Gentari on the Maryvale Solar and Energy Storage Project in Australia. This project is set to deliver approximately 243 MW of solar generation capacity, paired with 172 MW of battery storage. This execution in a key international market aligns with Shoals Technologies Group's reported international backlog share of more than 13.2% as of June 30, 2025.

Innovation in product integration is driven by relationships with tracker manufacturers. Shoals Technologies Group and Nextracker LLC unveiled a new North-South Big Lead Assembly (BLA) trunk bus product, specifically optimized for Nextracker's NX HorizonTM tracker rows. This joint development yields quantifiable efficiency gains over conventional wiring methods:

• 43% savings in PV wiring installation labor.
• 60% savings in DC wiring Operations & Maintenance (O&M).
• 0.25% increase in energy yield due to reduced voltage drop.

Expanding into new international territories is often achieved through local or specialized partners. Shoals Technologies Group signed a Memorandum of Understanding (MOU) with UGT Renewables to collaborate on up to 12 GW of solar projects from UGT Renewables' development pipeline. The initial deployment phase involves two landmark projects in Angola with UGT Renewables' sister company, Sun Africa, totaling 600 MW of Solar PV, financed by the U.S. Export-Import Bank (EXIM Bank). These initial projects are expected to break ground in 2025 and aim to electrify 60% of Angola's population, providing clean water access to over 1.1 million people.

Furthermore, the partnership with CJR Renewables marks a strategic entry into South America via the 110 MW Alcones solar project in Chile. CJR Renewables has a global installation track record of 1.6 GW of solar. Once operational, the Alcones project utilizing Shoals' BLA system will power over 86,000 households and avoid more than 62,000 tons of CO₂ emissions annually.

Here is a snapshot of the quantitative impact of these key collaborations:

These partnerships directly feed into Shoals Technologies Group's overall financial health. The company's backlog and awarded orders stood at a record level of $671.3 million as of June 30, 2025. For the full fiscal year 2025, Shoals Technologies Group provided revenue guidance in the range of $450.0 million to $470.0 million, with a forecast for full-year Earnings Per Share (EPS) of 0.29.

Shoals Technologies Group, Inc. (SHLS) - Canvas Business Model: Key Activities

You're looking at the core engine driving Shoals Technologies Group, Inc.'s current performance, which is heavily weighted toward manufacturing and securing future work. The operational focus right now is translating massive demand into delivered product.

The manufacturing and assembly of pre-wired Electrical Balance of System (EBOS) solutions, like the Big Lead Assembly (BLA) and SuperJumpers, is central. This activity is supported by recent investments, including a new state-of-the-art production facility, designed to meet the strong customer demand seen in late 2025.

Here's a snapshot of the commercial momentum that fuels that manufacturing activity:

• Record Backlog and Awarded Orders (BLAO) as of September 30, 2025: $720.9 million.
• New orders added in Q3 2025: approximately $185.4 million.
• Book-to-bill ratio for Q3 2025: 1.4.
• Amount of BLAO scheduled for shipment in the next four quarters: $575 million.

This backlog figure represents a 21.0% increase year-over-year and a 7.4% sequential increase from June 30, 2025. It's a solid indicator of future revenue visibility.

Research and development (R&D) is a necessary activity to maintain that market position and diversify. Shoals Technologies Group is actively expanding its offering beyond core solar EBOS components. You see this in the traction with Battery Energy Storage Solutions (BESS) and the focus on next-generation products.

The BESS segment is showing concrete progress, with approximately $18 million of BESS included in the Q3 2025 BLAO, and initial shipments expected to start in Q2 2026. This shows R&D translating into future revenue streams.

Protecting intellectual property (IP) is a key activity, especially given the competitive nature of the EBOS space. Shoals Technologies Group maintains a commitment to this, evidenced by ongoing legal actions and new patent grants.

For example, in early 2025, Shoals Technologies Group filed a new patent infringement complaint with the U.S. International Trade Commission (ITC) against Voltage, LLC. This action cited two new patents, the '375 and '376 Patents, which cover their Big Lead Assembly (BLA) solutions, in addition to the pending '153 Patent infringement complaint. Also, a new U.S. patent for the BLA system was issued, strengthening their hold in the solar sector.

These IP activities directly support the core manufacturing of BLA solutions by protecting the technology that drives installation efficiency and cost reduction for customers.

Finance: draft 13-week cash view by Friday.

Shoals Technologies Group, Inc. (SHLS) - Canvas Business Model: Key Resources

You're building a business model for Shoals Technologies Group, Inc. (SHLS) and need to nail down the core assets that drive its value proposition in the energy transition space. These aren't just assets; they are the moat protecting its market position, especially given the competitive landscape and the focus on domestic supply chains.

Patented Big Lead Assembly (BLA) and e-BOS Technology

The proprietary technology is central here. The Big Lead Assembly (BLA) solutions are factory-fabricated, plug-and-play cable and cabinet systems designed to simplify and speed up solar installation by eliminating field connections, which is a huge labor saver on site. Shoals Technologies Group actively defends this core technology; for instance, in January 2025, the company filed a patent infringement complaint with the U.S. International Trade Commission protecting its BLA solutions using two newly issued patents, the '375 and '376 Patents. The electrical balance of system (EBOS) solutions, which encompass all components needed to carry current from panels to the inverter, are mission-critical products where customers prioritize reliability and safety over just price.

Intellectual Property Portfolio

The intellectual property portfolio is a tangible barrier to entry. While the prompt suggests 17+ active patents, the year-end 2024 filing provided a more granular look at the scope of their IP protection, which has since been augmented by the 2025 BLA patents.

The majority of the U.S. issued patents aren't set to expire until 2035 or later. The portfolio is heavily focused on inventions related to solar, followed by climate change and emissions reduction.

Domestic Manufacturing Capacity in the U.S.

A significant key resource is the commitment to and capacity of U.S. manufacturing, which aligns with reshoring supply chains. Shoals Technologies Group operates facilities in Tennessee and Muscle Shoals, Alabama. The expansion into a new, larger Tennessee facility, a 638,000 sq. ft. plant, signals a major investment in this capacity.

Here's a look at the stated capacity levels:

The company stated that at its then-current capacities, Shoals Technologies Group could serve demand well into 2025. The Alabama facility is specifically noted as supporting First Solar, Inc.'s domestic manufacturing expansion with custom junction boxes.

Experienced Engineering and Direct Sales Teams

The human capital, comprising engineering and direct sales talent, is critical for developing and selling these complex EBOS systems directly to Engineering, Procurement, and Construction (EPC) firms. As of September 30, 2025, Shoals Technologies Group reported a total headcount of 1,290 employees. The CEO, Brandon Moss, has emphasized the company's commitment to protecting its innovations and supporting American jobs through domestic manufacturing, which speaks to the value placed on the operational teams driving this strategy. The company's strong backlog, reaching a record $720.9 million as of September 30, 2025, reflects the effectiveness of these teams in securing future work.

• Total Employees (as of Sep 2025): 1,290.
• Record Backlog and Awarded Orders (Q3 2025): $720.9 million.
• Book to Bill Ratio (Q3 2025): 1.4.

Shoals Technologies Group, Inc. (SHLS) - Canvas Business Model: Value Propositions

You're looking at the core reasons why a utility-scale developer chooses Shoals Technologies Group, Inc. over other electrical balance of system (EBOS) providers. It boils down to de-risking the project timeline and lowering the total cost of energy (LCOE) through superior engineering. These value propositions are what keep their backlog robust, which stood at a record $720.9 million as of September 30, 2025.

Installation Efficiency and Labor Savings

The primary driver of value is the factory-built nature of the Big Lead Assembly (BLA) system. This design directly attacks the high cost and scarcity of skilled labor on-site. Specifically, when comparing the North-South BLA to conventional in-field North-South wiring methods, Shoals Technologies Group estimates a 43% savings in PV wiring installation labor. This translates directly into faster project commissioning, which is critical when the market is seeing project delays persist into 2025.

The overall impact on project economics is significant, as demonstrated by historical data from their 2022 ESG report, where customers reported, on average:

• 43% lower installation costs.
• 20% lower material costs due to reduced wiring and eliminating trenching.

System Cost Reduction and Long-Term Reliability

By integrating multiple components, Shoals Technologies Group lowers the total installed system cost while simultaneously boosting long-term reliability. The BLA system combines the functionality of cable assemblies, combiner boxes, and fusing into one unit. This factory-built approach provides long-term reliability through its molded joints, eliminating the need for installing on-site insulation piercing connectors. The BLA system is designed to enhance long-term system reliability.

Simplified Installation

The plug-and-play nature of the system is a key differentiator that simplifies the construction process. The BLA system does away with traditional combiner boxes, which are a major point of field connection and potential failure. This simplification accelerates timelines, a benefit that is particularly valuable in emerging markets like Chile, where the company recently secured its first BLA implementation for the 110 MW Alcones solar project.

Secure, Domestic Supply Chain

As a domestic manufacturer, Shoals Technologies Group offers a value proposition centered on supply chain security, which is increasingly important amid tariff uncertainty. The company has actively invested in its domestic footprint, including an announced $80 million expansion of its Tennessee manufacturing operations last year. Management has stated that its supply chain is integrated with domestic partners, leading to "limited direct exposure" to tariff impacts. This aligns with broader policy support for American manufacturing.

Enhanced Energy Yield

The engineering of the BLA system is also designed to maximize the energy output of the solar farm. For the North-South BLA configuration, Shoals estimates a 0.25% increase in energy yield compared to conventional methods, which is attributed to less DC wiring voltage drop. This small percentage gain, when scaled across a utility-scale project, contributes meaningfully to the project's overall financial performance and LCOE.

The tangible benefits of the BLA system can be summarized:

Shoals Technologies Group, Inc. (SHLS) - Canvas Business Model: Customer Relationships

You're hiring before product-market fit... well, Shoals Technologies Group, Inc. is past that, but their customer relationships are clearly driving massive order flow right now, which is what we need to focus on for this block.

Direct sales and dedicated engineering support to EPCs and developers.

The engagement with Engineering, Procurement, and Construction (EPC) firms and developers is clearly deep, evidenced by the record pipeline activity. Shoals Technologies Group, Inc. is actively working with developers to show the long-term benefits of their solutions over older connection methods, like insulation piercing connectors. This consultative approach is validated by securing significant international contracts, such as the one with CJR Renewables for the 110 MW Alcones project in Chile, which is the first to use their Big Lead Assembly (BLA) system in that country. You see this commitment in their strategic focus on expanding into new end markets and applications, which requires close collaboration with customers to tailor offerings. The company remains encouraged by the strong customer reception of new products and capabilities, which helps them grow share. Record quoting activity also signals high levels of pre-contract engagement with potential customers.

The success in securing a robust order book reflects this direct engagement:

• Backlog and awarded orders hit a record of $720.9 million as of September 30, 2025.
• This backlog represented a 21.0% increase compared to the prior-year period.
• International markets now comprise more than 11.5% of that record backlog.

Strategic pricing and volume discounts for securing long-term agreements.

Negotiations with major customers definitely involve pricing levers. We've seen evidence that strategic pricing actions and volume discounts are used as tools in securing business, though they can impact near-term margins. For instance, the gross profit as a percentage of revenue in Q1 2025 was 35.0%, down from 40.2% the prior year, with management citing strategic pricing actions and volume discounts as drivers for the revenue change in that quarter. Similarly, the gross margin in Q2 2025 was 37.2%, down from 40.3% the prior year, also attributed to strategic pricing actions and volume discounts. On the flip side, securing long-term predictability is key, as shown by the Master Supply Agreements Shoals Technologies Group, Inc. established with key players like Blattner and UGT.

High-touch relationship with a focus on product quality measured in decades.

The value proposition centers on reliability that lasts for decades, which is critical for utility-scale infrastructure. Shoals Technologies Group, Inc.'s solutions are deployed on over 70 GW of solar systems globally, demonstrating a long-standing track record. The emphasis on quality is tied directly to the product design, such as the BLA system, which is specifically noted for enhancing long-term system reliability. This focus on longevity helps justify the initial investment for EPCs and developers, moving the conversation away from just the initial component cost.

Active conversion of customers from traditional wiring to BLA solutions.

The Big Lead Assembly (BLA) system is a core focus for converting customers to a more efficient solution. The BLA system is factory fabricated, meaning it only needs to be plugged in, which simplifies installation and reduces the need for skilled labor on site. This technological shift is a major relationship driver, as it directly addresses customer pain points like installation efficiency and labor constraints, especially in emerging markets. The 110 MW Alcones project in Chile, utilizing BLA, serves as a reference installation to showcase these benefits in the South American context, pushing adoption beyond the core domestic utility-scale solar market.

Here's a look at the order book quality reflecting customer commitment:

Shoals Technologies Group, Inc. (SHLS) - Canvas Business Model: Channels

You're looking at how Shoals Technologies Group, Inc. (SHLS) gets its Electrical Balance of System (EBOS) solutions into the hands of energy transition players as of late 2025. The channels are a mix of direct engagement and leveraging established partners to move product.

Direct sales channel to EPCs and solar project developers remains the core engine. This segment drives the bulk of the business, as Shoals Technologies Group guides project owners and Engineering, Procurement, and Construction (EPC) contractors toward their factory-fabricated, plug-and-play solutions. The overall health of this channel is reflected in the total order book; as of September 30, 2025, the backlog and awarded orders stood at \$720.9 million, a 21.0% increase year-over-year. The full-year 2025 revenue guidance is set between \$467.0 million and \$477.0 million. This channel also fuels international growth, with international markets comprising more than 11.5% of that total backlog.

The OEM channel for providers of skid-based and containerized solutions is explicitly called out as a strategic growth channel. This path allows Shoals Technologies Group to embed its components within pre-packaged systems sold by Original Equipment Manufacturers (OEMs). While specific revenue attribution isn't broken out for this channel in the latest reports, its inclusion alongside other growth pillars signals management's focus on expanding beyond pure utility-scale direct sales. This is a key area for leveraging their patented solutions into new form factors.

For the direct channel to large data center hyperscaler customers, Shoals Technologies Group has successfully secured contracts. This represents a direct push into a high-growth application sector, driven by surging demand for clean energy to power massive computing infrastructure. The company has noted wins across BESS (Battery Energy Storage Systems) which includes a specific hyperscaler project win. This diversification helps balance the cyclical nature of pure utility-scale solar development.

The electrical distributors for the Commercial and Industrial (CC&I) market represent another dedicated growth pillar. Shoals Technologies Group entered this smaller-scale solar market by releasing product variants allowing for greater diversity of project size. This channel saw tangible results, with CC&I revenue exceeding \$10 million year-to-date as of the second quarter of 2025. This shows the distribution network is effectively reaching smaller commercial and industrial customers.

Here's a quick look at the financial scale underpinning these channel activities through the third quarter of 2025:

The operational focus across these channels is supported by several key strategic actions:

• Factory Fabrication Focus: Moving assembly from the field to the factory to improve quality and reduce onsite labor requirements.
• Product Diversification: Releasing more product variants to serve different project sizes and terrains.
• International Expansion: Executing on a strategy that includes a 110 MW project in Chile and an MOU for up to 12 GW of international solar projects.
• Capacity Investment: Investing \$80 million in the Tennessee facility to increase production capacity.

Finance: draft 13-week cash view by Friday.

Shoals Technologies Group, Inc. (SHLS) - Canvas Business Model: Customer Segments

You're looking at how Shoals Technologies Group, Inc. (SHLS) structures its customer base as of late 2025, which is heavily concentrated but actively diversifying. The total backlog and awarded orders as of September 30, 2025, stood at a record $720.9 million. This gives you a clear view of near-term revenue visibility across these groups.

Utility-Scale Solar Developers and EPCs (core domestic market)

This remains the bedrock of Shoals Technologies Group, Inc.'s business. They are executing a strategic plan focused on accelerating growth within this core domestic utility-scale solar market. While specific revenue contribution isn't itemized against the total $720.9 million backlog, this segment represents the primary volume driver for Shoals Technologies Group, Inc.'s Electrical Balance of System (EBOS) solutions.

Battery Energy Storage System (BESS) Integrators (grid firming, data centers)

Shoals Technologies Group, Inc. is actively expanding its offering into high-growth applications, including Battery Energy Storage System (BESS) solutions. Management noted commercial success in the BESS market during the first quarter of 2025. The company is also working on data center power solutions, indicating a strategic push beyond traditional solar for this segment.

Commercial and Industrial (CC&I) solar project owners

This is flagged as a strong growth candidate. To be fair, in 2024, Shoals Technologies Group, Inc. only realized $10 million in CC&I revenue, even though smaller solar deployments represented about one-third of the total market that year. They quoted $40 million of CC&I projects in 2024, which was only 2% of their total quoted activity, showing significant room for future capture.

International solar developers (currently over 11.5% of backlog)

International expansion is a key diversification effort. As of the third quarter of 2025, international markets comprised more than 11.5% of the total backlog and awarded orders. This is a slight decrease from the more than 13.2% reported at the end of the second quarter of 2025 and more than 13.4% in the first quarter of 2025. In Q3 2025, international orders specifically amounted to $86 million, with major customers in Australia and Chile.

Here's a quick look at the quantitative data points related to these segments as of late 2025:

The strategic focus is clearly on maintaining the core utility-scale business while driving penetration in these newer areas. You can see the progress in the backlog growth, which was up 21.0% year-over-year as of September 30, 2025.

• Utility-Scale Developers: Core domestic revenue driver.
• BESS Integrators: Focus on grid firming and data center power.
• CC&I Owners: Growth initiative with $40 million quoted in 2024.
• International Developers: Representing more than 11.5% of the current order book.

Finance: draft 13-week cash view by Friday.

Shoals Technologies Group, Inc. (SHLS) - Canvas Business Model: Cost Structure

You're looking at the core expenses that drive the operations for Shoals Technologies Group, Inc. as of late 2025. Understanding where the money goes is key to seeing the margin pressure and investment priorities for the company.

Cost of Goods Sold (COGS) for Manufacturing and Materials

The largest component of the cost structure is the Cost of Goods Sold (COGS), which covers the direct costs associated with producing the electrical balance of system (EBOS) solutions. For the second quarter of 2025, revenue was $110.8 million, and the reported Gross Profit was $41.2 million. This means the COGS for that quarter was approximately $69.6 million ($110.8 million revenue minus $41.2 million gross profit). The Gross Profit Percentage for Q2 2025 settled at 37.2%, down from 40.3% in the prior-year period, largely due to strategic pricing actions and customer/product mix shifts. For context, the Adjusted Gross Profit Percentage for the full year 2024 was 39%, and it was 35% in Q1 2025.

Capital Expenditures Projected for 2025

Shoals Technologies Group, Inc. is planning significant investment back into its operational capacity. The capital expenditures projected for the full year 2025 are expected to fall between $30 million and $40 million. This spending supports domestic manufacturing investments and scaling operations to meet demand captured in the backlog.

General and Administrative (G&A) Expenses

General and administrative expenses reflect the overhead required to run the business outside of direct production. For the second quarter of 2025, G&A expenses were reported at $23.1 million, up from $19.2 million during the same period in the prior year. This increase is a key point to watch in the cost structure.

R&D and Legal Costs for Patent Defense and IP Protection

Protecting the intellectual property, especially the Big Lead Assembly (BLA) technology, is a distinct cost driver. In Q2 2025, the increase in G&A expenses included a $3.0 million increase in legal expenses specifically tied to ongoing matters related to intellectual property, wire insulation shrinkback, and shareholder litigation. Shoals Technologies Group has been actively defending its IP, including adding a newly issued '295 patent to its pending lawsuit against Voltage, LLC to protect against infringement.

Interest Expense Projected for 2025

Financing costs are a predictable part of the cost structure. The projected interest expense for the full year 2025 is anticipated to be in the range of $8 million and $12 million.

Here is a quick look at the key projected and reported 2025 figures:

The cost structure is heavily influenced by material and manufacturing costs, but the rising legal spend to defend patents is a notable, non-recurring-looking expense you need to track. The company's ability to manage its COGS while investing in CapEx will define its near-term profitability.

• Cost of Goods Sold (Q2 2025): Approximately $69.6 million
• Gross Margin (Q2 2025): 37.2% of revenue
• Full Year 2024 Adjusted Gross Margin: 39%

Shoals Technologies Group, Inc. (SHLS) - Canvas Business Model: Revenue Streams

You're looking at the engine room of Shoals Technologies Group, Inc., which is fundamentally about selling factory-fabricated electrical balance of system (EBOS) solutions, like the Big Lead Assembly (BLA), that drastically cut down on field wiring for utility-scale solar projects. This product-centric model captures value by delivering labor and material cost savings to Engineering, Procurement, and Construction (EPC) customers. The company is definitely on track for a strong year, projecting full-year 2025 revenue to land in the range of $467.0 million to $477.0 million. That's the top-line target we're watching. Revenue generation is all about volume and securing that next wave of projects; the book-to-bill ratio hit 1.4 in the third quarter, which is a solid indicator of future sales momentum.

For the third quarter ended September 30, 2025, Shoals Technologies Group reported record revenue of $135.8 million, which was a 32.9% increase year-over-year. Looking ahead to close out the year, management guided fourth quarter revenue to be between $140.0 million and $150.0 million. This performance is built on a foundation of strong customer engagement, evidenced by a record Backlog and Awarded Orders (BLAO) of $720.9 million as of the end of Q3 2025.

Here's a quick snapshot of the financial scale driving these revenue streams as of late 2025:

Beyond the core domestic utility solar business, revenue diversification is a key focus, with two specific growth channels showing concrete financial traction. You see this in the expansion into Battery Energy Storage Systems (BESS) and new international markets.

• Revenue from Battery Energy Storage Systems (BESS) components is emerging, with approximately $18 million of BESS in the backlog and awarded orders as of the end of Q3 2025, though initial revenue materialization is projected for the beginning of Q2 2026.
• International sales revenue is growing, with the company recognizing more than $6 million in revenue from international projects in Q3 2025 alone, supporting markets like Australia and Latin America.
• International markets currently comprise more than 11.5% of the total backlog and awarded orders, showing a clear shift in the revenue mix.