Q1 2024 Shoals Technologies Group Inc Earnings Call

Participants

Philip Shen; Analyst; ROTH MKM Partners, LLC

Andrew Salvatore; Analyst; Morgan Stanley

Brian Lee; Analyst; Goldman Sachs Group, Inc.

Maheep Mandloi; Analyst; Mizuho Securities Co., Ltd.

Jordan Levy; Analyst; Truist Securities

Christine Cho; Analyst; Barclays

Donovan Schafer; Analyst; Northland Capital Markets

Presentation

Operator

Good afternoon, and welcome to the Shoals Technologies Group First Quarter 2024 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 Mehgan Peetz, Chief Legal Officer for Shoals Technology Group. Thank you. You may begin.

Thank you, operator, and thank you everyone for joining us today. Hosting the call with me are CEO Brandon Moss; our CFO, Dominic Barton; and our new Vice President of Finance and Investor Relations, Matt Tractenberg 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 guidance for the second quarter and full year 2024 are not guarantees of performance or results. Actual results could differ materially from our forward-looking statements if any of our assumptions are incorrect or because of other factors. These factors include, among other things, the risk factors described in our filings with the Securities and Exchange Commission, including economic market and industry conditions defects, our performance problems in our products for their parts, including those related to the higher inflation shrink that matter failure to accurately estimate the potential losses related to such matter and failure to recover those losses from the manufacturer, decreased demand for our product policy and regulatory changes, supply chain disruptions and availability and price of our components and materials. Although we may indicate and believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate, you are 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 so we do not undertake any duty to update any forward-looking statements.
Today's presentation also includes references to non-GAAP financial measures. You should refer to the information contained in the Company's first quarter press release for definitional information and reconciliation of historical non-GAAP measures to the comparable GAAP financial measures.
With that, let me turn the call over to CEO, Brandon Moss.

Thank you, Megan, and good afternoon, everyone. I want to start by welcoming Matt Tractenberg, our new Vice President of Finance and Investor Relations. Matt will be leading our IR efforts and is looking forward to meeting all of you.
Turning to our agenda, I'll begin with a discussion of some key macro trends regarding energy demand and solar power markets, both domestically and internationally. I'll then shift focus to discuss some specific shows business updates, including backlog and awarded orders, shrink back warranty remediation and our ongoing ITC. intellectual property litigation. I'll also provide additional insight into our Shoals fit into the time line of a solar plant construction project, particularly our revenue recognition as it related to our solar plants commercial operation date.
Finally, I'll discuss revenue contributions from our adjacent product areas of battery energy storage systems in e-mobility.
Before handing the call over to Dominik, who will review our financial results for the quarter and our outlook for the remainder 2024.
Before I talk about what we see going forward in the solar industry, I'd like to take a moment to reflect on what our industry has achieved and shows Roland. According to the Energy Information Administration or EIAC. solar power represented the single greatest source of new generation capacity in 2023, solar energy accounted for 4% of power production in the United States last year and is expected to account for 6% and 7% in 2024 and 2025, respectively. It is extraordinary when you consider the size and the power market in the U.S. solar power generation is also leading all forms of renewable energy in terms of new capacity being added to Power Grids globally in the U.S., solar has represented more than 50% of all utility scales renewable generation capacity added to the grid from 2020 through 2023. We are very proud of the role Shoals has played in enabling the industry's growth and products make it possible to build faster with less labor at lower cost and higher reliability than competing solutions as significant as growth has been in solar over the past five years, we see the potential for continued attractive growth in the future. Our optimism is underpinned by two tailwinds. The industry did not have in past years, accelerating low growth and rising power prices. Over the past five years, total electricity demand in the US grew by only 0.1% over the next five years utility filings of work. So load growing at 4.7%. That significant growth is driven by a combination of data centers for reshoring of manufacturing electric vehicles and increased weather volatility requiring more heating and cooling meeting. All the new demand will require more generation capacity, and we expect solar get more than its fair share of that. At the same time as demand is increasing solar power prices, the average price paid by commercial and industrial customers for electricity increased by 20% from 2022, 2023 and has continued in increased despite very low gas prices. The primary driver of higher transmission and distribution charges, which is why we don't think power prices are likely to come down in the future. Higher power prices, benefits solar because solar can not only reduce cost, but also give commercial and industrial users more certainty they need to accurately forecast their costs. We believe that the long-term fundamentals underpinning solar growth remain in place and are arguably better today than they have been historically. However, our industry is currently impacted by two key issues in the near term, the speed at which utilities and regulators connect new projects to the grid and the availability of key equipment over 1.5 of all solar projects in development have been delayed six months or more according to the EI. within our business, we are experiencing reduced revenue in the near to mid term due to solar project delays that have pushed projects out from the first half of 2024 permitting issues, higher financing costs, extended equipment lead times, particularly for transformers and switchgears and long interconnection queues continue to stifle industry growth. These construction delays will impact our results in the near term, but we expect this trend to reverse over time.
Our experience nears the projections of the major industry analysts and consultants pace. Installations of new solar capacity in 2025 is flat when compared to 2024, with potentially approximately 28 gigawatts of new solar generation added for the grid. In the base case, capacity expected to come online in 2025 will drive our 2024 revenue given we typically produce and begin recognizing revenue approximately 13 months before a solar project achieves commercial operation date and is counted in the installed capacity figures fracked by regulators and industry analysts I'll share more information about this relationship later.
One area we do not see major project delays is the community commercial and industrial market. The CC&O market is roughly 10% of the size of the utility scale market, but is expected to grow at a faster rate than utility scale solar in part because these projects get interconnected faster and use more widely available equipment. We are increasing our focus on the CC&O market, and we believe the addressable market for our products is 1.5 to 2 gigawatts of community solar projects and approximately two gigawatts for commercial and industrial projects. See C&I market represents another growth opportunity for Shoals, and we will move quickly to bring the best product set to market for our customers. With that said, initial customer response has been very positive, and we expect to show progress in these areas in late 2024 with potentially more significant revenue coming in 2025.
Turning to the international market, $77.9 million of our backlog and awarded orders at the end of the quarter is for projects outside of the US with the most significant portion coming from projects in Africa. Our project wins and Africa represent the largest order books that we have ever had outside of the U.S. We will continue to focus on select international markets for growth, Latin America, Australia, certain Southern European countries, Africa and the Middle East are all desirable for a number of reasons. Collectively, these regions have an estimated addressable market of 63 gigawatts in 2025.
To summarize our perspectives on the market. First, we believe the fundamentals underlying continued long-term growth in solar remain in place driven by accelerating low growth and persistently higher power prices.
Second, we believe the near-term headwinds creating project delays will give way to longer term sustainable growth as utilities, regulators and equipment suppliers adjust to greater demand for generation capacity.
Third, we believe that because our products make it possible to build faster with less labor at lower cost and higher reliability than competing solutions. They are extraordinarily valuable to our customers, particularly in the current environment. Of course, we see the CC&O market is less exposed to the issues that have delayed many utility scale projects, and it will be a key focus area for us going forward.
Yes, we see strong growth outside of the US, particularly in the Marina region and are positioning ourselves to take advantage of that growth.
Turning now to show specific business updates, I would like to start by reminding everyone where shows products fit into the construction time line of annuities. Building scale solar plants provide more color. We've included additional charts in our quarterly slide presentation available on our website.
One important point I want to expand on is the timing of the sale of our products as it relates to a project being completed and energized because shows manufacturers the box solution that installed after the structural balance of systems is in place we typically deliver our products in the middle of a solar field construction time line. As a result, we are recognizing revenue for projects well in advance of it being connected to the grid energize and counted towards market place calculations. Epcs, on the other hand, are recognizing revenues throughout the build cycle. To further illustrate that timing, we have included a chart in our quarterly materials that shows the revenue recognition of our top 20 projects in 2023, only one, which went live that year. The remainder are scheduled to go live in 2024 or 2025. Therefore, our 2023 revenue was predominantly tied to the 2024 market figures. Revenue this year will be driven by projects that are expected to be energized in 2025. This information is provided to assist you in modeling our growth against future market expectations. At the end of the first quarter, backlog and awarded orders were $615.2 million, driven by the addition of $75 million of awarded orders. This may be further broken down to backlog for purchase orders have been received of $196.2 million and awarded orders of $419 million of the total $615.2 million of BLAO. $484.2 million projected shipment dates in the next four quarters. It is important to note that we achieved record quote volumes during the quarter. Further, our pipeline is at record levels and continues to grow. While the near-term landscape is challenging, we remain optimistic about the opportunity ahead.
Shifting our attention to our remediation efforts related to shrink back on wire purchased from Prisma and a former vendor. Our potential range of exposure has not changed this quarter. Since our last update, we have become aware of only one additional site displaying shrink back. We continue to work with our customers to remediate known issues and further address challenges and opportunities in terms of the legal proceedings against Prisma and we are working the process and expect written discovery and depositions be completed by early next year. We are pursuing legal action against Prisma and because we seek compensatory and punitive damages, recovery of all costs and expenses incurred by us in connection with the identification, repair and replacement of the defect of wire and other legal and equitable relief with regards to our IPC. intellectual property litigation, we completed the ITC trial in Washington, D.C. in March. We expect to hear the court's initial ruling in July for ITC Commission review in November and final resolution following a potential presidential review in January of 2025, we feel strongly about accomplishing our goal of preventing the importation of products that infringe our BLA solution and look forward to the initial ruling in July. Additionally, we intend to pursue remedies for damages in District Court following the final resolution.
Now what I have completed three quarters.
In my role at Shoals, I want to provide you with an update on priorities I laid out. My 1st year shows continued its evolution from a small founder-led company to a rapidly growing public company. Last year, I needed to assess the talent, organizational structure and operating cadence. Positive changes have been made over the last nine months. We have refined and redeployed our corporate strategy, we hired and onboarded key talent and critical functions. In addition, we implemented an enhanced operating model with a regular cadence and more robust analytics as Shoals continues to build a more data-driven culture. While it's hard to immediately see the impact of those changes from the outside, they have made our organization significantly stronger in ways that I am confident will drive better results for our shareholders.
Additionally, I have assessed the status of shoulder product portfolio, go-to-market strategy, business development capabilities and sales team in conjunction with our strategic growth plans. I will now provide some of my initial take was consistent with our comments over the last several quarters. The predominance of our growth has been driven by the domestic utility-scale solar industry this quarter is no different as less than 1% of our revenue was derived from the international solar domestic e-mobility and energy storage solutions. International solar is beginning to show signs of more consistent growth. I fully intend to maintain a strong focus on capturing market share in our targeted regions. I described the target regions earlier, and we will continue to implement our international strategy. Our e-mobility product offering, which utilizes our big lead assembly truck bus system, provides value to fleet operators that need multiple charging stations and close proximity to each other. Some of our initial customers were impacted by higher interest rates, reduced consumer spending and availability of battery energy delivery vehicles last year. As a result, revenues in 2023 declined significantly from our launch in 2022, and they remain at low levels. We will continue to review the entire platform and prioritize investment in businesses that we believe will create value for our shareholders while battery energy storage system revenue was also de minimus this quarter, while the solar industry is experiencing higher attach rates of storage solutions we do not currently have a complete Plug & Play product offering that is desired by most customers. We remain very interested in this market, but will likely have to modify our product offering and go-to-market strategy to maximize our growth potential in this area. So for now, we continue to expect the majority of our revenue to be directly linked to salary Boss solutions. Our core offering is for the domestic utility scale solar market, but we are the market leader and will provide the vast majority of our revenue this year. Importantly, we believe there's still significant opportunity to grow with the market as well as benefit from further increases to our market share.
As part of my broader business review, we have realigned our sales force to go after what we would describe as low hanging fruit that we expect to benefit the Company in coming quarters.
In addition to domestic utility scale solar, we are seeing tangible opportunity in international and CC&O markets near to medium term. And over the longer term, we do expect to leverage BLA into other applications as we've previously discussed.
With that, I'll now turn it over to Dominic, who will discuss our first quarter financial results and outlook for the year.
Dominic?

Thanks, Brandon, and good afternoon to everyone on the call. Turning to our results. First quarter net revenue declined 14% to $90.8 million versus the same period in 2023. The decline in sales was driven by project pushouts which resulted in lower demand for our products in domestic utility scale solar projects and by fewer days of production resulting in lower sales volumes.
Gross profit decreased to $36.5 million compared to $48.3 million in the prior year period. Gross profit as a percentage of net revenue was 40.2% compared to 45.9% in the prior year period, primarily due to higher labor costs and lower fixed cost absorption during the quarter. Similar to the fourth quarter of 2023, we did not incur wire installation stream pack warranty liability expenses in our cost of goods sold. So there was no adjustment to GAAP gross profit necessary during the period.
Further, as Brandon mentioned, based on our current knowledge and assumptions, the remediation range remains at $59.7 million at the low end and $184.9 million at the high end. During the quarter, we spent $3.7 million in cash as we ramped up remediation efforts and had a remaining warranty liability on our balance sheet of $51.2 million related to the shrink back matter. As of March 31, the current portion of the remaining liability is now $31.1 million. As a reminder, this represents the amount of cash we estimate we will consume during the next four quarters as we continue our remediation efforts. It does not reflect any potential recovery from Prysmian shifting to general and administrative expenses. For the first quarter, we incurred $22.8 million of G&A expense compared to $20 million during the same period in the prior year. Year over year. Increase in general and administrative expenses was primarily related to legal fees for the patent infringement and wire insulation shrink backed matters and planned increases in payroll expenses due to higher headcount supporting growth, all of which was partially offset by lower stock-based compensation. Approximately $850,000 of G&A expense was specifically related for the wire insulation street back litigation. Net income was $4.8 million in the first quarter compared to $17.0 million during the same period in the prior year. Adjusted EBITDA in the first quarter was $20.5 million compared to $38.1 million in the prior year period. Adjusted EBITDA margin was 22.5% compared to 36.3% a year ago, largely a result of lower gross margin. Adjusted net income was $12.6 million in the first quarter compared to $25.3 million in the prior year period. Cash flow from operations was $12.9 million, while capital expenditures were $2.5 million. Our balance sheet remains very strong, and we ended the quarter with net debt to adjusted EBITDA of one times, which is down from two times a year ago and a significant improvement from the 4.4 times as of Q1 2022. During the quarter, we amended and extended our revolving credit facility for five years and retired our term loan. The new revolving credit facility has been upsized from $150 million to $200 million and carries a lower interest rate compared to the old term loan. We appreciate the support of our new and existing bank partners equally important to our strong cash flow generation as how that capital is allocated. As I've shared with you on past calls, our focus will remain on driving sustainable long-term organic growth. However, other opportunities that create shareholder value may present themselves, and we are in regular discussion with our Board. Those may include inorganic opportunities that expand our presence in underrepresented markets or broaden our offering to existing customers. Another might be repurchasing our own shares, given what we believe may be a disconnect between our current valuation and the long-term value. We are creating our commitment is that we will deploy our capital to the activities that generate the highest return for shareholders.
Turning to backlog. As of March 31, 2024, we had $615.2 million in backlog and awarded orders an increase of 17% year over year as the Company added $75 million in orders during the period. As we discussed last quarter, some of our international orders have longer lead times than domestic orders, and we are also winning domestic jobs that extend beyond our historical revenue cycle of nine to 13 months to realize revenue from those awarded orders as of March 31, approximately $204.4 million of our backlog and awarded orders had delivery dates beyond 2024.
Turning now to the outlook. Given the current headwinds in the utility-scale solar market, some of our customers have experienced project delays as a result of the current macro uncertainty, we will continue to provide quarterly guidance for the remainder of the year based on current business conditions, business trends and other factors for the quarter ending June 30th, 2024, the Company expects revenue to be in the range of $85 million to $95 million and adjusted EBITDA to be in the range of $20 million to $25 million based on current business conditions, business trends and other factors. For the full year 2024, the Company now expects revenue to be in the range of $440 million to $490 million. This change is reflective of the industry delays we are experiencing and sharing with you today. Our goal is to provide you with a reasonable and achievable range given the uncertainty we believe exists. I want to stress that we believe these changes reflect the timing of our revenues, not lost projects we expect most projects that have been delayed from 2024 to be completed in 2025. Adjusted EBITDA is now expected to be in the range of $130 million to $150 million, adjusted net income to be in the range of $85 million to $100 million. Cash flow from operations to be in the range of $100 million to $115 million. Capital expenditures to be in the range of $15 million to $20 million. Interest expense to be in the range of $15 million to $20 million.
And with that, I'll turn it back over to Brandon for closing remarks.

Thanks, Dominic. I would like to close by thanking all of our customers for the competence and shows our employees for enabling us to effectively serve our customers and our shareholders for their continued support.
I'm excited about the long-term macro trends that will drive the solar market for years to come, and I am even more excited about Shell's competitive position in the marketplace. We are an innovation leader with strong product development capabilities and an outstanding customer list. As we move past this period of volatility, we expect to continue our industry-leading growth driven by further market share gains in the domestic utility scale market expand our presence in the CC&O market and extend our leading position into key international markets.
Over the last nine months, I've heard a consistent message from our customers that they want to expand our relationship with shows they provided candid feedback on how we can be more flexible and responsive. And that's extremely encouraging because it's entirely within our control and influence as a result, we've made meaningful changes to our sales structure and operations, which we believe will improve our flexibility and increased touch points with each customer, ensuring that doing business with Shoals is a simple and efficient as possible is top of mind for all of us, and we believe you'll begin to see the benefits over time.
Finally, as conditions improve, we expect Shoals will be well positioned to produce strong profitability and cash flow driven by our capital light model. For that end, we will continue to make investments in talent and our operational footprint that will position us for many years to come, thoughtful and disciplined capital allocation as a key strategic imperative going forward. And as Dominic mentioned, may include types of activities. You haven't seen from us before remaining flexible that opportunistic while operating within a framework that prioritizes shareholder returns will allow us to create value and reward investors.
And with that, we thank you for your time today. Operator, we can now open the line for questions.

Question and Answer Session

Operator

(Operator Instructions)
Mark Strouse, JPMorgan Chase.

Yes, good afternoon.
Thank you very much for taking my questions. I wanted to start with just a general question on the visibility that you have into the second half ramp. And then more specifically, if you've sensitized that guidance at all for a potential AD/CVD case I mean, are there are there projects that you're baking into the second half of this year guidance that are using panels that may be subject to a So tariffs, if commerce determines to take that that case up.
And I have a quick follow-up. Thank you,

Mark up your well, a good question. I think look on the on the second half guidance on?
Absolutely. We've got visibility to every project on and we've taken in into account some of the potential delays. So the information that we've got now I think we feel good about about our guidance on and the areas where we can control and really influence. I think we're we're executing quite well. Our goal is really to put something out there. That's reasonable and achievable and done. And I think I think we've done that with this guide as it relates specifically to panels.
Look, you know, we hear the same information that you hear I'm sure there is a maybe upwards of 12 to 18 months' worth of panel inventory on the ground in the US. I do realize that some of those may be subject to tariffs, but we are not anticipating a significant amount of disruption and from the rolling at this point in the back half.

Okay.
Okay.
Thanks, Brent. And then quick follow-up I fully appreciate projects are getting delayed generally, but when you look at the orders that are occurring within the industry over the last quarter over there, so two quarters, can you just kind of talk about what you're seeing with your your market share of those orders?

Yes, maybe to touch, you know, a lot to unpack there all of a clutch on market share. First, look from my you and everybody really, we grew 50% last year on our own 2023 numbers relate to 2024 CODs. So we're doing a 50% growth rate on a on a year that is expected to grow at 26%. If that happens since IPO, look, we've outpaced the market by to Actional goals dollars outpaced the market, I think come.
I think we'll continue to do that.
We've got opportunity, as I've noted in the past to grow wallet share. So where I feel very strong about growing market share. There is opportunities to continue to grow wallet share with existing large EPC customers. And as I mentioned in the prepared remarks that, hey, we reorganized the sales team to go after what we believe some low-hanging fruit, and we'll do just that. So I feel very strongly about our market share. And I feel very strongly about our ability to continue to grow and take wallet share with larger EPCs.
As it relates to the delays on, I think most importantly, to remind everybody, these projects are delayed. They're not lost and we follow the form eight, 60 data from the Ivor very, very closely both for new projects and the historic projects and about half of the projects in that data set or delayed six months or more. If you look specifically at Shoals projects, 37% of our projects have been pushed out by at least one month and maybe the most important number is that 20% of the projects but were in our awarded order bucket at the end of the year last year have been pushed out of 2024 and 2025. And that number equates to about $50 million worth of projects that have pushed to the right sort of significant number obviously. But again, we track these projects. We're tight with our customers, the EPCs. And again, we feel like these projects are not lost, they're just delayed and pushed into 2025.

Operator

Our next question comes from Philip Shen with Roth. Please proceed with your question.

Philip Shen

Yes, thanks for taking my questions, Brent, and you just talked about how the AD/CVD case could impact your '24 guide and how conservative it is and how you have good line of sight there. I was wondering if you could talk about how that case could impact bookings in Q2 and three So and while the 24 is conservative, to what degree do you think this could slowdown, what do you think the trend of bookings could be in Q2 and three over Yes. And Phil, just to clarify, you're talking of Q2 bookings 2024 related to the module inventory. And yes, I know you talked about the quoting activity is high. Why are you seeing we saw for the modules, the buyers and sellers basically come to a pause because of this case. And so are you seeing that pause maybe impact in your conversations with customers as well.

We are not a model module on module pricing. Module availability is not something that is bubbling up from our customers at this point. So I'm not you know, not a not a significant concern at this point. It's a possible fill that fraction procured modules for for these are these projects already for projects that we have not received yet and a backlog of awarded order. So first of all, the things that we hear in terms of delays via interconnections, site permitting on equipment, availability of modules has not bubbled up to a concern at this point.

Philip Shen

Great.
Thanks for the color. Shifting to a few housekeeping questions here. Was wondering if you might be able to give us a little bit of the cadence of Q3 versus Q4 revenue? And do you factor in Q1 and Q2, it's roughly $140 million-ish per quarter?
Or do you think it kind of ramps up from Q2, Q2 to Q3 and then and we have a larger Q4.
And then final, Brendan, you talked about the progress you're making in the C&I segment and you could see if we could see some developments and impact by year end of this year.
Is there any way you can quantify?

So Phil, this is Dominic. Let me take the pacing first, yes, we've adjusted the annual and we don't provide quarterly guidance. We have not given specifics yet to three and four at this point in time. I think the expectation would be that it's relatively even, but we have not given anything very specific yet. So appreciate your patience on that one, and I'll let Brandon answer things about the CC. and I. space.

So great question about CC&O. We're excited about this space and I think it is fantastic timing for us to not only have the ability to capture more and more share. But the changes that are being that are happening really be a lot of growth, particularly in the US, the substantial growth that's going on with data center builds primarily due to a I think that's going to drive a lot of distributed generation in the future, which fits well with this CC and our product portfolio on book I would think for 2024, we are moving very fast. We're very excited about the opportunity in front of us to get the product set, right. We have developed a specific team to begin cultivating the market in the CC&O space and the team has he's out in the market, again, working on the right product set and creating relationships with potential new EPCs that Charles has not done business with in the past, and I've been engaged in some of those conversations or personally, I think you're going to see some traction in the back of 20 back end of 2024. But the meaningful the meaningful progress will be made in the 2025 time line because again, we've got to put together a new product set and have a new team focused on a product set specifically just to be clear, not a huge departure from what we do today. We're just it's the same same basic core products, just working for our optimal product set to burden the market. So we, again, are very excited about.
I'm sorry.

Operator

Andrew Harrison of Morgan Stanley. Please proceed with your question.

Andrew Salvatore

Great.
Thanks so much for taking the question. I do have another follow-up question here on the bookings number and backlog. I mean, I totally understand that there's a lot of strong tailwinds here related to renewable energy demand, whether it be data centers or onshoring of manufacturing. But if I just look at the first quarter bookings number, it looked relatively light compared to kind of the first quarter of last year or even the fourth quarter of last year. Can you just discuss what's driving that? Is it mostly customers just hitting pause while they wait to get most of the projects that they're currently in their pipeline online? Or is it is there anything else underlying that softness this quarter? And I have one follow-up.
Thank you.

Yes, thanks. Great question. Yes, we love the love to talk through this a bit. So a total backlog and awarded orders, as mentioned, $615 million, which is a nice increase over the first quarter of last year. What I do want to point out is that our project awards were consistent with past quarters on what was unusual for us. We have had some projects that in at least one case were canceled and a handful of projects that pushed back into our sales funnel. So you can think of that number being around $60 million. So I think if you take that $60 million, you add it to our our net new bookings, which were at $75 million. You'd see that we've got, you know, kind of a normalized quarter of project inflow into our BLA or pipe, so not abnormal what was abnormal is having some things shift back up in the funnel and then in one at least one instance of project canceled on the good news is the things that the projects that move back up into the funnel, we feel very good about our opportunity to go after that business. Again, whether it's with the same EPC or a different EPC arm also would love to point out. And from a quote standpoint, again, we are seeing record quote volume and that is both on the number of quotes and the total dollars of quotes. So the inbound demand is certainly very strong. And I think, again, we're in a volatile time. I look at this as being a transitory period of volatility and excited about the growth ahead.

Andrew Salvatore

Understood. That's really helpful. And I want to follow up, you really helpful disclosures in the deck as it relates to kind of shipments and rev rec versus COD. Um, I know you're not providing 2025 guidance, but I'm just going to take a crack at a question here. Anyway. If you look at Wood Mackenzie SCIA. forecast for 2026 growth, it's implying relatively soft growth. Is that a proper way to think about your 20 top25 line growth? I know there's potentially some market share opportunities at play as well. But if there's any additional context you can provide in terms of how we should be thinking about a normalized growth rate beyond 2024, that'd be super helpful.

Thank you.
Sure, Andrew. Yes, you're right. You said at the beginning, we haven't discussed '25 or '26 guidance yet. We're very excited to be sharing more information at our Analyst Day in early September. But there's a couple of things I want to point out. Some of the projects that we've talked about in '24 are pushing into '25, assuming those projects are still going forward, that would be a natural growth of year over year that you'd expect to see on top of something that we're going to get organically. And the other thing is the growth that we see in the C&I space in international is not reflected in the domestic utility scale solar pieces so we have other growth pillars to go on. We look forward to sharing more with you in our September analyst day.

Operator

Our next question comes from Brian Lee with Goldman Sachs.
Please proceed with your question.

Brian Lee

Hey, guys, good afternoon. Thanks for taking the questions on real quickly, just on Andrew's question on Brendan, but I was a I wasn't following totally the $60 million that you referenced, which was inflow. It sounded like that was an order which you had, but then went back into the sales funnel and then it was an order you had, but then the project got canceled. All that happened within the quarter. So you would have had $135 million of net orders. I just wanted to understand what that $60 million is referencing?

Yes, Brian, I would be happy to clarify.
Yes. So we're talking about a handful of projects here, not just one project so yes, I mean, in the quarter, we had a project cancel and we had a handful of projects that would have been included in our backlog and awarded orders number. But we move back into the sales funnel, which is very unusual for us on because of no questions about the project so far. So that equated to about $60 million. If you think of our or our net new backlog and awarded orders that we talked about was $75 million. So yes, so you're right with the math that 60%-plus in the past.

Brian Lee

Okay.
That's helpful. I just wanted to clarify that. And then maybe just one more last question and I'll pass it on. I think you said on $204 million of your backlog and awarded orders on is for beyond 2024 deliveries. So if my math is right, that means there's about $400 million plus which presumably is for 2024 delivery and you just did $90 million of revenue in Q1 and the midpoint of guidance is for 65. So are you assuming more of that $410 million or so that's remaining for '24 deliveries doesn't actually play out in '24.
And I guess the secondary question to that would also be our, you know, not assuming any go-get revenue, which I know you get pretty much your some tens of millions of dollars of go-get revenue every year, but just be curious if you could reconcile that a little bit. Thank you.

So, Brian, this is Dominic. Let me handle that one. You're absolutely right about the math. And at the end of the quarter. That was the math that would indicate that, hey, you should have about $500 million right, of net revenue in the year in April, there was additional project pushes so we referenced $50 million where the projects and pushed from the year did not happen in Q1. Some of that has happened through April as well. So the numbers a little bit south of that for tenants left in the world orders and backlog status. And as we go through the year, the amount of time to book and bill in these projects starts to decrease. And so we're now looking at things that we can really add towards the tail end of Q3 and into Q4. But we believe that there's some projects will still likely move. We'll continue to backfill and replace those projects as we did. We added $135 million worth of new projects because $60 million of them actually pushed out. It makes the numbers look lower in Q1. So we're just trying to give you a very realistic guidance range that we believe is comfortable and achievable. And we intend to deliver on those numbers.

Operator

Maheep Mandloi, Mizuho Securities.

Maheep Mandloi

Yes, good evening. Thanks for taking the questions. Just a question on the pushouts. Could you talk about the nature of them? Are these looking for months or quarters of pushouts into the next year? And as we kind of think about '25, '26 growth versus some of the forecasts out there. And could you talk about any other levers which you have either international sales are increasing the wallet share for Waterberg project trading etc., levels we patients.

Okay.
Thanks.
Yes, as mentioned, look of 37% of our projects has shifted at least by month. And as mentioned, we pushed $50 million with the projects out of the year into 2025. So some, you know, some some substantial projects pushes and that is obviously impacting our number more than anything this year as it relates to '25 and '26. Again, we're not going to comment or guide on that, but I'm certainly we're driving an international strategy. As we mentioned, there's 63 gigawatts of development market opportunity out into 2025 for us, we're really pleased with our approach and progress really in the international space. As we've mentioned in prior calls, we've got about $78 million of orders on the books for ship internationally. So we're excited about that opportunity and obviously excited about the CCI. opportunity that we talked about before. Having said that, as we move out into '25 and '26, you know, understand the WoodMac data that base case is probably not as exciting as we've seen in prior years as it relates to the solar market. But what we are very excited about is the load growth in the United States. We've had a period of about five years of no load growth in the US and we're entering a period where we've got a projected 4.7% load growth. We've seen some exciting things in the news recently and you guys have probably all seen the Brookfield Microsoft deal that was announced 10.5 gigs. And if you've listened to the quarter earnings call, they mentioned the bourbon and data centers and customers coming at them with 100 gigawatt opportunities of the data center space alone. We look at over the next four years that low growth potentially doubling from 70 to close to 140 gigawatts. So we are excited about the future in the US, but that low growth is going to bring the solar generation space. The limiting factor on all this growth is labor and shows is uniquely well positioned to solve that problem for folks. So I know the forecasts are tough and whatnot, inflammation and others, but we really are excited about what we're seeing in the broader macro area around us around power at a time.

Maheep Mandloi

So that is not the end and maybe sneak one small one on just on new backlog and new bookings, given you talked about your backlog is mostly foresee over the next year or as of like Christmas here in next year?
Our bookings mostly for late '25, '26 now? Or are there things about that?

Now as Dominic was mentioning, we've got some opportunity here still for book and bill that will that will impact 2024 or could impact 2024.
But yes, you're right.
I mean the vast majority of our projects and I think we put some materials or I know, we put some materials out in the deck that shows the difference between projects COD in our rev rec. So on average about 13 months. But you've got some outliers though, that stretch out as far as two years.

Operator

Our next question comes from Jordan Levy with Truist Securities. Please proceed with your question.

Jordan Levy

Afternoon, all appreciate all the details. Maybe you might if I had on this and I may have missed it, but maybe can you just talk about any change in the competitive environment on the Airbus side?
If there's and any and how you see that evolve?

So thanks for the question of Merck's, no, no dynamic changes in the competitive market. We still believe that our best opportunity for growth is too it really took to replace the traditional install methods of Vina homeruns combiner boxes and doing field installs on, you know, we still are huge advocates, obviously that we've got the best solution in the marketplace. We've got the best technology we have the best IP, which we are obviously are in the process of protecting. So So all good news on the competitive landscape is, for instance, currently.

Jordan Levy

And Charles, I appreciate that. And maybe just as a follow-up, as it relates to kind of the set the sales side of things as you kind of look to go more into the international market. I know that's been an initiative for a while now. And also with the C C & I side of things, just curious if do you think the sales organization is rightsized right now? Or does that kind of need to scale up?
Bob?

Yes, I think look, we've changed a lot of things around here related to our commercial organization in, call it the last six months, not just the sales organization. Specifically, we're making investments in our marketing function. We're making investments in our product line management function. But as it relates specifically to the commercial organization and sales, yes, we've made some investments. We've hired a GM of our international business who is now leading that effort for us cross-functionally from a manufacturing standpoint and even you know, from a product standpoint as well, we have put in place a dedicated TCIP., again, little little different sales cycle, there potentially could be even a different go-to-market structure than we have historically participated in the utility scale space. So we're excited about those investments even on our core utility scale side, where again, we're market leaders, we have changed our sales organization to a pod structure, and our goal is to increase touch points with our customers and not just the touch points of our salespeople, but of the different functions that interact and engage with these large EPCs could be something as simple as a legal when we sign sign up a deal with an agency, there's a contract. And so we're trying to give our customers great touch points with, but our entire organization.
And then also I see familiar faces each and every time they transact business.

Operator

Our next question comes from Christine Cho with Barclays. Please proceed with your question.

Christine Cho

Good evening.
Thank you for all the color today. I just wanted to touch on slide 15 here, you know the slide where you show the delineates, the projects that are on schedule delayed six months or so delayed by six months. And in 2023, we see these projects increasingly become more delayed more than six months. So just trying to clarify what that meant exactly for you. Did that mean that in 2023 customers took delivery of their products and are delayed getting the project to the finish line? Or was it the other way around and that because projects or delayed they weren't taking delivery of your product until they had better line of sight. And ultimately, I'm just trying to, I guess on the slide prior to that, you know, the 50% revenue growth in '23, but only having 26% year-over-year growth in utility-scale installations in '24, know, I guess, you know the it could that could be market share gains. But I'm also, I guess, trying to figure out and how much of that was your customers taking delivery of the product maybe a little earlier than they normally would have sort.

Christine's, Dominic, I mean, you answered a couple of those on the slide deck.
When we look at the project delays and we took all the EI. data from former 60. And you're right, it has been a trend that has been growing with projects being delayed. What we see also, by the way, is all new projects that are being added into the funnel at EIA. and form a 60s on their initial reports. They may have a COD target date to 2026, 2027. They're naturally going to be on time. So what we have seen is an increase in projects that are being delayed. And we've seen the push out really started manifesting itself for us largely in Q4 because there was a lot of growth coming in that was just kind of masking some of the delays that we were seeing. In no case are we aware of any customers agreeing to take product early. Our products are shipped over a period of weeks to the sites where they're installed directly on site and construction. So if a project is being delayed and construction is being halted or they have a permitting issue. We're being told to delay for 30, 60 or 90 days. That length of time is going to increase and we're just going to have to wait for our revenue recognition until they're ready to receive product. We have seen the length of time from the time we've initially quoted something so the time of purchase order comes in and revenue is recognized increased over the past six months. We have probably added a full quarter of visibility now, and it's lengthening as these projects are sitting out there longer. So the project delays, we believe are very real. We're experiencing here and we just tried to show the color of how that is manifesting itself with some public data.

Christine Cho

Okay.
Thank you for that. And then just wanted to go back to your earlier comments about, you know, some of your bookings and projects getting canceled and pushed back into the funnel. Can you talk exactly about what drove that? I understood that like if they got too awarded orders and things like that, that's so much time and you know, Energy had been spent getting to that point that it was very rare to have something canceled. Just more color on that would be helpful.

Yes, you're exactly right. Christina, it has been very rare that something like this has happened on precedent and really for what we've seen historically at Shoals, we had one order cancel, as I mentioned, and that was worth a fantastic customer, quite honestly. So it's something that we've not seen in the past. Again, as a reminder, we talk about an awarded order. We are in a position where we've got a verbal agreement, and we're 70% through the design process with a customer on. And so if the customer is moving forward with the project, we've got that order with the customer. So in these very few cases that we've seen the the site, the project it either was pushed back or canceled or we have had a situation where the EPC did not move forward with the project for a variety of reasons. So again, unprecedented for us, not something we've experienced in the past, but I do want to make sure that everybody understands that our inbound order flow again was normal and consistent with what we've seen in the past.

Operator

Our next question comes from Donovan shaper with Northland Capital.
Markets. Please proceed with your question.

Donovan Schafer

Hey, guys, and thanks for taking the questions. So first, I want to ask I was just having the slowdown that you're seeing right now and that resulting in lower fixed cost absorption and some maybe lower utilization at your facilities and whatnot. But my question is, are you is there a material portion of your resources is that you are able to redirect in some way on the other initiatives, like if you have a sales folks that are I'm well versed and they have contacts on the U.S. Maybe you're not able to kind of pivot then temporarily to focusing on international. And maybe you are I'm just kind of curious, is it does that give you a silver lining sometimes right. If something like this gives you an opportunity to to throw more other things or people you already have under your roof doesn't being able to do or the skill sets are quite specialized and geographically focused.

I'm sure there's a couple of things, Dan, that I think that this dynamic by way of.
Yes, thanks for that question. From a cost of goods sales standpoint, we had ramped up and we're ramping up significantly in Q4 to be prepared for the business. And so some of our gross margin, we had some Labor Ready on the floor that we don't want to whipsaw for short term scenario. And similarly, with our salaried sales force and our salaried team members, we don't want to be that abrupt and swing quarter to quarter based on short term result on brand? And would you like to add a little bit more to that?

Yes, the government, most importantly, look, we're looking at these project delays and the turbulence that we have in the market is short term and no in no way shape or form are we are we cutting back resources to serve our utility scale, our core of core customers here domestically. In fact, we're doing the opposite. We're increasing touch points for increasing visibility with our with our customers. So and you know, again, as Dominic alluded to, I think in the plant you're always looking for ways where you can shift labor and spread your absorption a little bit.
But with our salaried staff.
Again, we're pedal down and focused on growth mode and focused on this slow growth that is coming.

Donovan Schafer

Okay. And then as a follow-up team, the last questioner pointed out the things and timing, the 30% growth in 2023, yes, compared to the swap installed capacity growth '24 and things like that. And that's kind of a lot of moving parts. But what I'd like to get is kind of strip as much as possible and kind of directly it directly as possible to kind of ask the question around market share where we’re at if we took to make it apples to apples and to reflect the core offering, like, let's say, let's call it, you know, DLA or combiner boxes are the things that people use out in the field to connect the home, no, like a $1 million panels into some bank of inverters to collect all of that, that set of apparatus stripped down to kind of its core. Is your your position still that your market share from the time of the IPO has has increased the hub the same or decreased and specifically just the U.S. If we just talk about that, just trying to get the other eye,

I think you said it very well. You know, we made some comments in our prepared remarks of what sales outside of our core domestic utility scale solar was '23 and what is represented in first quarter of 2024. So I think you could classify virtually all of the sales to related to domestic utility scale. Solar are there has been some instances where we've written some large projects internationally over the course of the period that is outlined on page 14, but up on the aggregate, the vast majority of the sales has come from US domestic solar. So I think that the top of 40% growth over a period of 20% growth is correlated.

Operator

Yes, we have reached the end of our question-and-answer session. I would now like to turn the floor back over to Brandon Moss for concluding comments.

Yes.
I'd just like to thank all of you for joining us today and for the thoughtful questions. And Dominic, Mehgan and I look forward to seeing all of you in person really at upcoming conferences. So thanks for the time today. Appreciate all the questions.

Operator

This concludes today's conference. Thank you for your participation. You may disconnect your lines at this.