Q2 2023 Shoals Technologies Group Inc Earnings Call
Good afternoon, and welcome to Shell's Technologies Group second quarter 2023 earnings Conference call. Today's call is being recorded and we have allocated one hour for prepared remarks and Q&A.
At this time I would like to turn the conference over to Megan Baetz Chief legal counsel for shows technology script. Thank you.
You may begin.
Thank you operator, and thank you everyone for joining us today hosting the call with me are CEO Brandon.
President Jeff Palmer do you have that autonomy part of N V. P of Investor Relations double could help on.
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 results.
Actual results could differ materially from our forward looking statements if any of our assumptions are incorrect or because of other factors.
Factors include among other things the risk factors described in our filings with the Securities and Exchange Commission as well as economic and market circumstances decreased demand for our products policy and regulatory changes industry condition.
Crow economic events defects or performance problems at air products for their parts, including those manufactured by third parties and related warranty and product liability claims supply chain disruptions and availability and price of our components and materials.
Though we may indicate and believes 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 statements included in this discussion is made as of the date of this discussion and 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 Companys second quarter 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 show New CEO Brendan.
Thank you very much and good afternoon, everyone.
I'm excited to join you. This afternoon, my first earnings call as sole CEO .
I want to thank everyone on the team for being so welcoming helpful and open.
Prior to taking the position here I was most recently at South Wire company, South Florida as many of you May know is a global leader in the wire and cable space.
Last position there was president of tools components and assemble solutions business.
During my tenure, we built an adjacent product strategy, it's a large business supporting three product platforms with domestic and international manufacturers as well as the global supply chain.
I've always admired shows for its innovative and entrepreneurial approach to creating simple solutions and a terrific value proposition.
Over the past few weeks here I have become even more impressed with the company as I've met with the team I. Appreciate it's a mission driven culture at Shoals.
Our employees have immense dedication to each other the company community and to enabling the green energy transition.
Thank you will recognize this and our recently released 2022 ESG report.
Before we move onto day I want to take a moment to recognize just hold off and has helped guide the organization by serving as interim CEO since March I look forward to working with Jeff and his role as president.
The shows moved to its next chapter I'm honored to lead the company and partner with the extraordinary team, whose hard work has delivered fantastic growth.
And with that I'll turn it over to Josh.
Thanks Brandon.
We're very excited to have you on board.
She also had another outstanding quarter and I'd like to thank our employees partners and customers for their support and contributions to our success I'm.
I'm, especially grateful to the show's team for supporting me over the last several months in my role as interim CEO .
I'm now excited to turn the reins over to Brandon.
No we will do a great job, leading the company in its next phase of growth.
I'll start with some key highlights from our second quarter results, followed by an update on new product introductions and other growth initiatives and an overview of the blattner Master supply agreement.
Then review current solar market conditions before turning it over to Dominic will discuss our financial results in more detail for the second quarter.
Shall set new records for revenue adjusted EBITDA and adjusted net income in the second quarter.
Compared to the prior year period second quarter revenue grew 62% driven by increased demand for domestic solar E bus generally and our combined as you go system solutions, specifically <unk>.
Second quarter gross margin grew 350 basis points to 42, 4% and adjusted EBITA margin expanded 550 basis points to 32.4%.
The margin growth, we achieved in the second quarter was driven by a higher mix of system solutions revenue continued leverage on fixed cost and enhanced operating efficiency, resulting from the operational initiatives implemented earlier this year.
Demand for <unk> products remains very strong and we ended the quarter with record backlog and a watered orders of $546 $1 million, an increase of 67% year over year.
<unk> solutions revenue grew 80% compared to a year ago, reflecting strong growth in U S utility scale solar demand and continued share gains by our products.
During the quarter, we converted one additional customer to our combined as you go system, bringing the total number of <unk> customers to 43 with an additional 14 in transition.
We are progressing as planned with new product introductions for 2023 in the second quarter, we began shipping our BLA plus system solution and recorded first revenues on schedule.
Close for our BLA plus system continues to grow after our global commercial launch earlier this year.
We recently announced the commercial launch of snapshot IV, formerly known as IV curb trace.
Snapshot I V as an ecosystem of products that integrate seamlessly into solar asset management systems. The solution remotely monitors the health and performance of PV modules at a very granular level over the life of the system.
I'm very excited about snapshot I E. The technology has applications in existing solar fields. In addition to our typical market of new deployments.
Moving on to other products.
We remain on track to commercially launch high capacity plug and play harnesses connectors in the second half of 2023.
In battery energy storage, we continued to ship and fulfill the one gigawatt DC best project.
<unk> solutions is gaining further traction in the market with some very exciting projects deployed others awarded and a continued launch of new products to build out the portfolio.
I'm excited to say that our international revenue backlog in the water daughters continues to grow.
To fulfill our international demand, we're exploring international production options now.
Now I would like to discuss the landmark 10 gigawatt MSA signed with Blattner company, which we announced in the second quarter.
We're very excited about the agreement, which ensures mutual needs are met.
<unk> so the MSA further strengthens project visibility, enabling us to optimize capital allocation and the best to best support our customers and their needs at.
At the same time blattner benefits from surety of supply, which allows better project planning to ensure timelines are met.
I want to clarify that the majority of the agreement was already reflected in backlog and awarded orders at the time of the announcement.
Digital projects were added in the second quarter and the balance will be added as projects are won by the customer.
The most compelling reward of disagreement reflects a strengthening of our relationship with this very important customer.
Turning to the solar market backdrop.
<unk> remained favorable for the industry as a whole and for <unk> specifically <unk>.
Project visibility continues to be strong supported by quote activity and order flow.
Now I'll take a moment to provide a brief update on the patent infringement complaints filed by shows in May with the U S International Trade Commission or ITC.
The ITC accepted our initial complaints in June and we most recently announced the issuance of a third key patent within our group have already filed claims.
I would like to take a moment to say it was an honor to serve as interim CEO , while the board search for the ideal candidate to lead shows in its next phase of growth.
Having worked alongside branded for the last few weeks I can say he is that person and I'm excited about what we can achieve under his leadership in the coming years.
Now I'll turn it over to Dominic who will discuss second quarter 2023 financial results.
Thanks, Jeff and good afternoon to everyone on the call.
Second quarter revenue grew 62% versus the prior year period to $119 $2 million.
Similar to prior quarters, our higher sales volume was primarily driven by strong demand for our combined as you go he boss system solutions, which comprised 86% of our revenue versus 77% in the prior year period.
Gross profit increased 77% to $55 million compared to $28 $6 million in the prior year period.
Gross profit as a percentage of net revenue grew 350 basis points to 42, 4% compared to 38, 9% in the prior year period.
The increase was driven primarily by higher proportion of revenue from the companies combine as you go system solutions, which carry a higher margin than our other products slightly lower raw materials input costs.
Increased leverage on fixed costs and efficiencies gained in operations.
These gains were partially offset by a $9 4 million dollar charge for a warranty expense predominantly due to a previously disclosed wire issue with the supplier.
We recorded a noncash charge in the quarter to remediate known issues, we have not booked any offsetting recovery from the supplier.
Second quarter General and administrative expenses were $16 $7 million compared to $13 $3 million during the same period in the prior year.
The year over year increase in general and administrative expenses was primarily related to increased wages and related taxes due to increased employee head count to support our growth initiatives and requirements for being a public company.
Net income was $18 $9 million in the second quarter compared to $7 $3 million in the prior year period.
Adjusted EBITDA increased 96% to $38 $7 million compared to $19 $8 million in the prior year period.
Adjusted EBITDA margin increased 550 basis points year over year to 32, 4%, reflecting the impact of higher gross margins and leverage on G&A expense.
Adjusted net income grew 105% to $24.0 million in the second quarter compared to $11 $8 million in the prior year period.
During the quarter, we generated cash from operations of nearly $27 $9 million in the quarter, we used excess cash to pay down $25.0 million of the revolver.
We will continue to prioritize growing the business and driving shareholder value.
As of June 30th 'twenty, 'twenty, three we had $546 $1 million in backlog and awarded orders an increase of 67% year over year, reflecting continued robust demand for our products.
Turning now to our full year outlook based on current market conditions and input from our customers. We continue to expect revenues to be in the range of $480 million to $510 million.
Adjusted EBITDA to be in the range of $145 million to $160 million.
Adjusted net income to be in the range of $92 million to a $102 million.
Interest expense to be in the range of $22 million to $26 million.
And capital expenditures for the full year in the range of $8 million to $12 million.
Now back to Brendan for closing remarks.
Thanks, Dominic I'd like to close by thanking all of our customers for their confidence and shows our employees for enabling us to effectively serve our customers.
And our shareholders for their continuous support.
And with that thank you everyone. I. Appreciate your time today, we will now open the line for questions.
We will now begin the question and answer session to join the question queue. You May Press Star then one on your telephone keypad, you will hear a tone acknowledging your request.
We ask that you limit yourself to one question with a single follow up if youre using a speakerphone. Please pick up your handset before pressing any Keith.
To withdraw your question. Please press Star then two.
The first question comes from Philip Shen with Roth M. D M. Please.
Please go ahead.
Hi, everyone. Thanks for taking my questions in our recent utility scale Solar survey we conducted.
A number of your customers said that you might be a little bit expensive just wanted to hear you talk about your thoughts on that how do you deal with that as you're winning business and and do you expect to lower price anytime soon thanks.
Hey, Joe how are you.
Sure.
We get pushback from procurement officers all the time its normal status quo business for us.
But I would say that we continue to focus on our value proposition, which is driven by total cost of deployment and ownership over time. So that's the initial capital the labor to deploy ongoing maintenance.
We're going to continue to look at our product offerings will continue to look at the market and our customers.
And one of the things that we're doing more strategically is aligning.
Our our view of the future with the customers' view of the future towards signing Msas you saw that with blattner that gives them certainty and shows certainty and we expect to continue to do that with others.
That's great was wondering if you might be able to talk through those msas, specifically do you expect to announce something near term or do you think it might be you know more.
In 2024.
Sounds like with the bladder.
Announcement that puts some other E P. CS I noticed in terms of needing to lock up supply. Thanks.
Yeah, I think that's fair.
We're reaching out to all of our EPC.
<unk> and developer customers and partners and exploring their desires and needs for MSA is going forward.
We're actively discussing with many and we're hopeful to be announcing more more in the near and long term.
Yeah.
The next question comes from Mark Strouse with JP Morgan. Please go ahead.
Hi, Yes. This is drew on for Mark.
Congrats on the strong quarter first question just on the solid mix here again and system solutions I mean, it looks like that's a you know the third quarter in a row in the mid eighties. I mean is that does that kind of a new run rate to think about and then how do we think about that corresponding to the higher level of gross margin.
Yeah, Mark actually Jonathan Thank you so much as Dominic yeah. The mix as we kind of talked about last quarter a lot of our growth is coming from or a full system solutions and so we expect I would say that as we've talked about it on the component business. While it's still important to us may not have experienced the same level of growth is there.
Rest of the business. So there's high mix is something that we do consider valuable going forward is likely to be the right level for us in terms of its impact on margin, we'll start lapping that our level of mix again. These are the same types of margins that we ran back a couple of years ago as you recall in 2022, we do.
Have some input cost challenges that we've now overcome the first half of the year and as we lap that we should continue to see a very high mix of the system solutions going forward.
Yeah.
Got it. Thank you and then just a unrelated follow up here are very exciting to hear about the the snapshot products there on the monitoring capabilities.
Jeff I believe you hinted at in the in your prepared remarks, there that there's an ability to go back and up sell to.
The prior sales there or can you just talk a little bit about what that opportunity looks like and how you see that going forward. Thank you.
Yeah, that's correct, yes, you're spot on the the probably what I'm excited really excited about the product.
Two things it it gives the developer deeper insight into their solar field performance.
And we believe they have today.
And.
It can also be sold to net incremental customers and net incremental projects, but also any deployed solar field. We believe is an opportunity for us to sell that product into.
So very excited about the offering and we feel that it has broad applicability or improving maintenance and field performance.
The next question comes from Jordan Levy with <unk> Securities. Please go ahead.
Good afternoon on thanks for taking my question, just maybe to start out wanted to see if I could get your updated thoughts on sort of the outlook on the international front and the progress we've made there.
Yeah, Hi, Jordan, where.
I think I mentioned in the prepared remarks, what we're really excited about where the backlog awarded orders and quoting activity is going with international.
We're staying on track with our targeted markets that we've announced in prior quarters straight.
Australia.
Countries in Europe , and Latin America are the primary focus areas. We're looking at more regionalization of production so that we can.
Improved deliver deliverable timeframes and also cost to those customer sets. So overall, we're at a point, where we're very we're very very excited about the growth and prospects of the international markets and we're going to continue to look more deeply.
And you all might have talked to this before but just on that same line of thought.
Are the dynamics internationally sort of.
Claim that they are in the U S and that is true.
Because the customers the value proposition and that sort of thing or there are more dynamics that we need to think about there.
But that's a part of it Jordan for sure it's a market education.
I'd say in the end I E.
If you look at each of those regions specifically.
Europe tends to have smaller fields.
That have a fewer and smaller block sizes.
Which lends better to a component type solution, which shows has in shoals and enjoys.
Whereas Australia has a very large landmass and has.
Growing in more substantial sized solar fields with larger blocks, which plays very well into our BLA solution in Latin America. It tends to be a mix based on country and based on location. The best thing I would say is that we believe <unk> has the products to cover all of those markets and we feel that we can compete very very well in each of those segments.
The next question comes from Joseph Osha with Guggenheim. Please go ahead.
Hello, This is actually how they fit together.
So we could first touch on the EV charging and just kind of how that.
Im going relative.
Patients any color there would be great.
Yeah, Hi, how are you.
We're still really excited about the market.
We feel that the products that we've launched have differentiation and the solution is resonating with our customers are the focus areas that we've mentioned in the past of fleet School bus electrification and and now.
Workplace multi unit dwelling those are still resonating.
We've got a fantastic list of customer prospects, and where we're hoping to announce something soon.
And like I said, we remain very very excited about the EV EV application and E mobility market.
And I feel we've got the right product at the right time to help that market expand.
Okay, Great and then just following up on the earlier question around gross margin.
My understanding.
Pulling up that Oh, Rob I was wondering if you could just kind of because some of these other things there's been a lot of things kind of coming up and just any detail on the margin.
Anything that'd be helpful. Thank you.
Sure. So from a margin perspective, what we've talked about is that we really have a 40% target for.
For all the products, where we can truly drive value for our customers and the margins that we've seen and delivered and E. Mobility International have met that corporate standards. So we we'd like to say it is just on par with our corporate averages and we continue to look for products that can drive that so that's really the most we can say we're not breaking up.
Segments, yet as you know.
The next question comes from Brian Lee with Goldman Sachs. Please go ahead.
Hey, guys. Good afternoon, thanks for taking the questions.
Maybe just as a follow up to that one Dominic I think last quarter.
You had sort of telegraph that are we should we should maybe not get too out over our skis in terms of gross margin cadence. After the really strong result, then in Q1, let me Q2 still still pretty strong here in the 40 twos do we do we hang out here at this level for the rest of the year or is there incremental.
Smith that you've called out you know early in the year that still hasn't played through in the numbers and.
Maybe you expect to go further excuse me moderation from here and and then I had a follow up.
Sure Brian So a couple of things one is as you know we don't really provide specific quarterly guidance, but we have talked about investments that were being made mid year, and we haven't announced anything from any new facilities, which are new rent. For example was one of the things I was talking about that may impact gross margin in the back half of the year.
And this quarter, we did have to take that other charge. So in terms of where the margins are we do expect to be you know this this target where we are now is very good for us we have an implied EBITDA guide that's still very strong for the overall margin for the year and our guidance really contemplates all of the investments that we've talked about so I don't see you know what.
Can't give you specifics in terms of are we are north of 42 or or slightly below that but we do expect our guidance range to fully allow us to get the EBITDA targets that we've laid out.
Okay Fair enough and then with respect to the guidance range you know, there's clearly been a lot of focus.
From investors around kind of the topline view and you've had solid bookings for two straight quarters. Good backlog coverage seemingly here. So you know curious what would be the gating factor to maybe have a more bullish view on revenue for the year and then you know maybe what you're anticipating for bookings and backlog growth in the next few quarters any reason to.
Not expect better bookings in the second half versus first half given typical utility scale seasonality in the U S. Thank you.
Yeah. So the first part of the guidance about the top side is one thing has been very consistent for us and we really do look at our internal bottoms up view as we build our guidance for the revenue side. We are looking at our backlog and awarded orders and we know generally the timelines early in the year as to when things should be expected to be delivered.
So in terms of where we are now you know we're sitting here on August 1st talking about our Q2 results I would say that from a revenue perspective, we really feel comfortable in the guidance range that we would that we provided we still have good visibility now there's always uncertainty in the market you may have heard that from others about what's going on and things may she.
A quarter or a project might move in or out, but we feel very comfortable with that the revenue range that we've given at this point in time.
The next question comes from Colin Rusch with Oppenheimer. Please go ahead.
Thanks, So much guys can you talk a little bit about the why ratio what the nature of the technical problem was then and how expensive. It was in terms of the number of customers number of shipments.
And how much time it was spread over.
So a couple of things let me, let me take that one first calling them. So this is an open investigation, we've communicated pretty much everything we can in our Q, you'll see information about the wire issue that was limited to one of our suppliers and the subset of our products.
The charge that we booked in the quarter, we believe is adequate and to do the remediation required that's why we booked it and we continue to explore this issue further it is ongoing.
Open item for us and we will continue to work with the supplier and we really can't disclose much about that we certainly want to be very respectful of the supplier and we were really taking a customer care first and foremost at heart, where youre going to stand behind these products first take care of our customers first and we'll deal with a supplier or after that.
Okay, and then you know.
Let me think about Brandon.
You get into the seat and look at the opportunity to expand geographically can you talk about some of the key levers you're you're seen as available to the company to start driving accelerated sales into both Europe and Latin America.
Yes, Colin I appreciate the question and great to meet you.
Look we're day 12 with me in the job here, so admittedly probably a little early to provide some comments.
Round strategy at this point.
Look what I would say number one I'm excited to be here, it's a fantastic opportunity.
Shows as you know has a tremendous reputation in the market, we've got a tier one customer base.
What I'm seeing here is the incredible culture, and I think there's a lot of opportunity ahead of us.
Again, as you've seen with the numbers this quarter. The team has delivered again a tremendous results.
So you know I would ask maybe check check back with me next quarter.
And I think I'll be able to give some more specifics around strategy.
The next question comes from Kashi Harris with Piper Sandler. Please go ahead.
Hey, this is Luke tokens on for Kashi I understand you're in and see for 12 days, Brandon and congrats on the new role I guess kind of bigger picture what are your kind of objectives for the first six months in the seat and things you're looking to learn about and accomplish.
Yeah look thanks for the question great to meet you as well.
Look.
Again my goal here initially is to listen and learn before act.
Learning a lot about the solar market learning a lot about.
The company in general.
I've admired this business.
The company has been able to really create.
Tremendous innovative approaches great simple solutions.
For our customers and.
Or to continue to.
It would really drive the business that way.
Initially.
You know I'll bring experience to the job and rapidly.
Growing our business platform.
Did that itself why our company and our tools components into somewhat solutions business.
Stood up.
A few product platforms, and an international manufacturing and global supply chain.
So really it's that simple look forward to leveraging that experience and continue to help our scaled the shoulder business.
The $1 billion plus of organization and whats vitally important to me is too.
Really continue what has made this company, especially at this point and its culture.
It's a mission driven values around here, a little bit and really the cornerstone of this company's success.
So I'm excited to be part of the team here and.
Really the mission, but thus far is listening and learning.
Great. Thank you for that and then I've got a follow up question kind of on the discussion on the the new snapshot IV product.
I'm wondering what kind of the revenue strategy is with that it seems like it could possibly be more of a software recurring revenue model or you guys just thinking about this from a onetime hardware sale.
Yes.
I appreciate the question.
We are not getting into that amount of detail.
It is a product ecosystem.
And we expect to have this hasn't.
Our first of many within that ecosystem.
So more to come are extremely excited about it and what I would also add and emphasize is that the products that we've launched.
Provide immediate.
And tangible value to the operators, so very excited about that and the future that the snapshot IV ecosystem can provide.
The next question comes from Derek <unk> with Cantor Fitzgerald. Please go ahead.
Yeah, Hey, guys. Thanks for taking my questions.
I also wanted to ask about the snapchat or the snapshot wireless gateway if.
If I'm not mistaken that's the first gateway products that you guys have had.
Curious was there something that was developed at the request of the customer.
Can you kind of walk me through where this came from and maybe what's differentiated about the product on the hardware or software side.
Yeah I appreciate the question Derrick. Thank you. This was a shows innovation based on our <unk>.
Just looking into the solar fields and what what's needed.
As you as you know the Alberta provide a certain amount of data.
The other electronics and a solar field provide a certain amount of data, but what's lacking other than test tools that are manually carried into a field is string level data.
So this product can provide deeper penetration of visibility into solar fields than we believe is a bed is available today.
And we feel it provides a very nice differentiator for shoals, and it does take us into the gateway space.
And it does take us into the monitoring space.
We've not been traditionally so it is an adjacency for us which I'm also excited about.
Yeah got it that's helpful. And then just on the international growth I think in the prepared remarks, you mentioned I think Todd.
<unk> talked a bit about our manufacturing footprint internationally I was wondering if you can expand on that how.
How're you might acquire that to what that might look like.
Getting that footprint. Thanks.
Yeah, we're looking at each of the three markets on how we can best serve the customers that we have and those that are coming.
Looking at all options were doing economic evaluations where speech.
Speaking to the state and federal government equivalents in each of the markets and our goal is to make sure that we are as competitive as we can be and meeting and exceeding our customer requirements through our on time deliveries accelerated deliveries in a very cost competitive solution.
Yeah.
Not at a point, where I can talk about how we fulfill that and we've got ideas.
But it would be a bit too early to talk about on an earnings call.
The next question comes from Brett Castelli with Morningstar. Please go ahead.
Yeah, Hi, Thank you just wanted to come back to the backlog and order orders up I think 4% or so sequentially just curious.
Would you equate that to just more seasonality and sort of overall customer activity or any changes you're seeing in terms of close rates with customers. So it's like.
So Brad a couple of things I would point you to one is that we had a record revenue quarter $119 million that came directly out of backlog converted to revenue we were.
Replace that in backlog in the water to waters and also then grew sequentially over first quarter. So.
So we feel very good about our visibility that's being derived from that.
Backlog in water doors, and we also mentioned.
Our quoting activity I believe in the Q that continues at a very robust pace through through Q1 into Q2. So that's also in there.
More forward indicator.
The market strong and shelf position within it also was strong.
Thanks, Jeff and then just curious an update on on sort of a solar plus storage and what you're seeing in terms of storage quoting activity.
Relative to maybe recent history.
Yeah, a couple of things one is we're continuing to fulfill the projects that have been awarded we announced the big one last year, we're fulfilling that one Ed.
A and expected and fantastic pace from the customer's perspective, the quoting activity continues for.
For the attached storage market.
Also seeing an increase in our request for attached storage in EV charging deployments.
Which is a different footprint than utility based solar.
But it is a storage opportunity.
So we're looking at each of those but the market itself is in is still very very large.
And.
What we're working through right now is for them is finalizing value proposition.
We're working with those customers that are sending us close and we are seeing an increase and requested for attachment rates.
The next question comes from Donovan Schafer with Northland Capital markets. Please go ahead.
Hey, guys congratulations on the quarter I want to first ask about.
You know I know.
You know you don't break out that you know easy as a separate segment for international you know right now.
Sense of breaking things out kind of comes down to a more sort of you know like system sales versus component sales all effectively.
Presumably you are sort of predominantly within solar but yeah. These are important growth initiatives, you guys International and E D.
And so presumably there would be at some point in the future, where you would start to break out or provide some of those numbers either you know either doing it or segments, where you have solar segment in each segment or do you do with domestic and international or something like that.
And so my question I know and I'm very sympathetic to you you don't want to say, okay. Here's when we would get you know disclose revenue numbers for E D.
But.
What would be good to know is kind of putting an outer bound on it in terms of.
Like when do you think it would be appropriate for us as analysts.
Our investors are to kind of actually be bugging you about it you know I think it's fair to allow certain time for our business to you guys to figure things out in a low growth, but is it you know a year from now two years from now three years from now where in your view it would be you know adopt that's the point.
Where it would be fair or appropriate for us to kind of be really bugging, you guys about that kind of what's the outer outer range there.
So Jonathan this is Dominic let me, let me jump in on that one because from a financial reporting standpoint.
There's a couple of things that will lead into that.
First and foremost as we've said in our Q, we are still predominantly a domestic and we're still predominantly solar driven as you can tell the growth in our company came from different ways than it was anticipated three years ago, and so you know as the company pivoted to take advantage of the incredible domestic growth in domestic solar.
Some of the other things you, while they're still growing and the investments are being made it's still not at a point of significance and predictability that we want to have for you one of the things that we're doing with Brandon joining over the next few months as we're really refining these things and hope to have a in the analyst Investor day in the first quarter of next year, and we'll be able to lay that out for you right now.
You're right. We just are not in that position that we can really break those things out and tell you when it's going to be right because domestic solar keeps growing and as it keeps growing at this outpaced rate is kind of pushing the other percentage is down. So that's where we are we look forward to being able to share that with you. They are tremendous markets and tremendous opportunities for the company.
But we're just not at a point, where we can tell you when that will be.
Okay. That's very helpful. So I look forward to the analyst day.
Super broadly and then.
As a follow up just because you guys have such a fantastic market share I figure you're pretty good wanted to check in on any.
Anything you're seeing on your radar around projects being delayed at all I mean your results seem to suggest that that is likely not the case, but I figure I might as well ask directly. If you are seeing you know projects in the U S.
Thing delays because of the weaker forced labor Prevention Act customs you know detaining panels.
Or you know developers.
Developers facing long interconnection queues running into permitting us just anything on that front that you're seeing that's making things go slower than you.
You were hoping for or otherwise expect in the U S.
Yeah I appreciate the question Donovan this Jeff.
We've not seen any delays to projects due to U S. L. P. A general panel availability labor market and grid interconnections were watching those really closely.
And depending on the market you're in whether it's domestic solar or some of the international markets those factors weigh differently.
So we're watching each one of the advantages that we have it shows is that we are typically brought into a customer after the developers chosen there a P. C. So that typically means that that number one the permit is either approved or well underway and that they have sourced their panels already in.
Where those are coming from so there's a higher degree of certainty once we are awarded.
And then slide 34 in the deck provides a little guidance on that and then also that there's a complexity from trying to calculate market share is that our products are typically shipped six to nine months before the field goes live.
So we are our product goes out the door.
The.
Site is then finalize commissioned energized thereafter.
And then and then they May show and then the electronic show up in the analyst reports. So there's a high degree of lead and lag built into our timeframe that gives us stronger visibility.
And in a little bit higher certainty, but we are continuing to watch because U S. L. P E and 80 CVD impacted the entire market last year, and we want to make sure we're not impacted this year or going forward.
This concludes the question and answer session and today's conference call. You may disconnect. Your lines. Thank you for participating and have a pleasant day.
Yeah.
Yeah.
[music].
Uh huh.
[music].
Okay.
Hum.