SHLS - NASDAQ

Good afternoon, and welcome to Shoals 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 Mehgan Peetz, Chief Legal Counsel for Shoals Technologies 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; President, Jeff Tolnar; CFO, Dominic Bardos; and VP of Investor Relations, Dhaval Patel. 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 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, as well as economic and market circumstances, decreased demand for our products, policy and regulatory changes, industry conditions, current macroeconomic events, defects or performance problems in our products or 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. Although we may indicate and believe 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 statement 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 company's 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 Shoals new CEO, Brandon Moss.

Thank you very much, Mehgan, and good afternoon everyone. I'm excited to join you this afternoon in my first earnings call as Shoals 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 a Southwire Company. Southwire as many of you may know is a global leader in the wire and cable space. My last position there was President of Tools, Components & Assembled Solutions business. During my tenure, we built an adjacent product strategy into a large business supporting three product platforms, with domestic and international manufacturing, as well as a global supply chain. I've always admired Shoals 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 have met with the team. I appreciate the mission-driven culture at Shoals. Our employees have immense dedication to each other, the company, the community, and to enabling the green energy transition. I think you will recognize this in our recently released 2022 ESG report. Before we move on today, I want to take a moment to recognize Jeff Tolnar, who has helped guide the organization by serving as Interim CEO since March. I look forward to working with Jeff and his role as President. As Shoals moves 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 Jeff.

Thanks, Brandon. We're very excited to have you onboard. Shoals 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 especially grateful to the Shoal'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, who I know 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. I'll then review current solar market conditions before turning it over to Dominic, who would discuss our financial results in more detail for the second quarter. Shoals 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 EBOS generally, and our combine-as-you-go system solutions specifically. Second quarter gross margin grew 350 basis points to 42.4% and adjusted EBITDA 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 costs, and enhanced operating efficiency resulting from the operational initiatives implemented earlier this year. Demand for Shoals' products remains very strong, and we ended the quarter with record backlog and awarded orders of $546.1 million, an increase of 67% year-over-year. System 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 combine-as-you-go system, bringing the total number of BLA customers to 43 with an additional 14 in transition. We're progressing as planned with new product introductions for 2023. In the second quarter, we began shipping our BLA+ System Solution and recorded first revenues on schedule. Quotes for our BLA+ plus system continue to grow after our global commercial launch earlier this year. We recently announced the commercial launch of Snapshot I-V, formerly known as IV Curve Trace. Snapshot I-V is 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-V. 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 and connectors in the second half of 2023. In battery energy storage, we continue to ship and fulfill the 1gigawatt DC best project. EV 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've excited to say that our international revenue backlog and awarded orders continues to grow. To fulfill our international demand we're exploring international production options. 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. For Shoals the MSA further strengthens project visibility, enabling us to optimize capital allocation and invest to best support our customers and their needs. 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 a majority of the agreement was already reflected in backlog and awarded orders at the time of the announcement. Additional 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 this agreement reflects a strengthening of our relationship with this very important customer. Turning to the solar market backdrop, conditions remain favorable for the industry as a whole and for Shoals specifically. Project visibility continues to be strong, supported by quoting activity and order flow. Now I'll take a moment to provide a brief update on the patent infringement complaints filed by Shoals 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 of already filed claims. I would like to take a moment to say it was an honor to serve as interim CEO, while the board searched for the ideal candidate to lead Shoals in its next phase of growth. Having worked alongside Brandon 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. I'll now 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 combine-as-you-go EBOS System Solutions which comprised 86% of our revenue versus 77% in the prior year period. Gross profit increased 77% to $50.5 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 a higher proportion of revenue from the company’s combine-as-you-go System Solutions, which carry a higher margins 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 charge for our warranty expense, predominantly due to a previously disclosed wire issue with the supplier. We recorded a non-cash 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 headcount 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 30, 2023 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 revenue 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 $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 Brandon for closing remarks.

Thanks Dominic. I'd like to close by thanking all of our customers for their confidence in Shoals, 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.

[Operator Instructions]. The first question comes from Philip Shen with ROTH MKM. Please go ahead.

Hi everyone. Thanks for taking my questions. In a 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 your winning business? And do you expect to lower price any time soon? Thanks.

Okay Phil, how are you? It’s Jeff. We get pushed back from procurement officers all the time. It's 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. We'll continue to look at the market and our customers. And one of the things that we're doing more strategically is aligning our view of the future, with the customer view of the future towards signing MSAs. You saw that with Blattner. That gives them certainty and Shoals certainty, and we expect to continue to do that with others.

That's great. I 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 more in 2024? It sounds like with the Blattner announcement, that puts other EPCs on notice in terms of needing to lock up supply. Thanks.

I think that's fair. We're reaching out to all of our EPC and developer customers and partners. And exploring their desires and needs for MSAs going forward. We're actively discussing with many and we're hopeful to be announcing more in the near and long term.

The next question comes from Mark Strouse with JPMorgan. Please go ahead.

Hi. This is Drew [ph] on for Mark. Congrats on the strong quarter. The first question just on the solid mix here again in System Solutions. It looks like that's the third quarter in a row in the mid-80s. Is 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. It’s Dominic. Yes, the mix as we kind of talked about last quarter, a lot of our growth is coming from our 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 experience the same level of growth as the rest of the business. So this high mix is something that we do consider valuable going forward and likely to be the right level for us. In terms of its impact on margin, we’ll start lapping that level of mix again. These are the same types of margins that we ran back a couple years ago. As you recall in 2022, we did have some input cost challenges that we've now overcome in 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.

Got it. Thank you. And then just a unrelated follow-up here. Exciting to hear about the Snapshot products there and the monitoring capabilities. Jeff, I believe you hinted that in the prepared remarks there, that there’s an ability to go back and up sell to prior sales there. Can you just talk a little bit about what that opportunity looks like and how you see that going forward? Thank you.

Yes, correct, your spot on. What I'm excited really say about the product is two things. It gives the developer deeper insight into their solar field performance than 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 for improving maintenance and field performance.

The next question comes from Jordan Levy with Truist Securities. Please go ahead.

Good afternoon, all, and thanks for taking my questions. Just maybe to start out, I wanted to see if I could get your updated thoughts on sort of the outlook on the international front and the progress you've made there.

Yes, hi Jordan. We're – I think I mentioned in the prepared remarks, we're really excited about where the backlog of awarded orders and quoting activities is going with international. We're staying on track with our targeted markets that we've announced in prior quarters. Australia, countries in Europe and Latin America are the primary focus areas. We're looking at more regionalization of production, so that we can improve deliverable timeframes and also cost to those customer sets. So overall, we're at a point where we're very – we are 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 the same that they are in the U.S. and that it's just teaching the customers the value proposition and that sort of thing. Are there more dynamics that we need to think about there?

That's a part of it Jordan for sure. Its market education I would say and if you look at each of those regions specifically, Europe tends to have smaller fields that have fewer and smaller block sizes, which lends better to a component type solution which Shoals has and Shoals enjoys. Whereas Australia has a very large land mass and has growing and 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 Shoals has the products to cover all 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 Hilary on for Joe and I was just hoping we could first touch on the EV charging and just kind of how that's been going relative to expectations. Any color there would be great. Thank you.

Yes, hi Hilary. How are you? We are so really excited about the market. We feel that the products that we've launched have differentiation and the solution is resonating with our customers. The focus areas that we've mentioned in the past of fleet, school bus electrification and now workplace multi-unit dwelling, those are still resonating. We've got a fantastic list of customer prospects and we're hoping to announce some soon. And like I said, we remain very, very excited about the EV application and immobility 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, you know understanding the systems is kind of pulling up that overall. But I was wondering if you could just kind of speak to some of these other offerings. There's been a lot of things kind of coming up and just any detail on what the margin profile looks like for those, anything there would be helpful. Thank you.

Sure. So from a margin perspective what we've talked about is that we really have a 40% target for all the products where we can truly drive value for our customers, and the margins that we've seen and delivered in the immobility international have met that corporate standard. So we'd like to say it's 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 those 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 telegraphed that we should maybe not get too out over our skis in terms of gross margin cadence after the really strong results in Q1. I mean Q2 is still pretty strong here in the 42. Do we hang out here at this level for the rest of the year or is there incremental investment that you called out earlier in the year that still hasn't played through the numbers, and maybe you'd expect even further moderation from here 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. We haven't announced anything from any new facilities, which a new rent for example was one of the things I was talking about that may impact gross margin 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 the 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 the investments that we've talked about. So I don't see – you know, I can't give you specifics in terms of are we north of 42 or slightly below that, but we do expect our guidance range to fully allow us to get the EBITDA targets that we 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 top line view and you've had solid bookings for two straight quarters to get back on coverage seemingly here. So curious what would be the gating factor to maybe have a more bullish view on revenue for the year? And then 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 skill seasonality in the U.S.? Thank you.

Yes, 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 timeline is 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 are 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 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. Things may shift a quarter or a project might move in or out, but we feel very comfortable with that 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 wire issue, what the nature of the technical problem was and how expensive it was in terms of the numbers, customer's number of shipments and how much time it was spread over?

So a couple of things. Let me take that one on first Colin. So that 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 as adequate to do the remediation required and that's why we booked it, and we continue to explore this issue further. It is an ongoing, open item for us and we will continue to work with the supplier. We really can't disclose much about that. We certainly want to be very respectful of the supplier and we're really taking our customer care first and foremost at heart. We are going to stand behind these products first, take care of our customers first, and we'll deal with the supplier after that.

Okay, and then as we think about Brandon, as you get into the seat and look at the opportunity to expand geographically, can you talk about some of the key levers you're seeing 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 around strategy at this point. You know look, what I would say, number one, I'm excited to be here. It’s a fantastic opportunity. Shoals as you know has a tremendous reputation in the market. We've got a tier one customer base. What I've seen here is an incredible culture and I think there's a lot of opportunity ahead of us. Again, as you've seen with numbers this quarter, the team has delivered again tremendous results. So you know I would ask, maybe check back with me next quarter, and I think I'll be able to get some more specifics around strategy.

The next question comes from Kashy Harrison with Piper Sandler. Please go ahead.

Hey, this is Luke Tilkens on for Kashy. I understand you're in the seat for 12 days Brandon and congrats on your new role. I guess kind of bigger picture, what are your kind of objectives for the first six months in the seat and the things you're looking to learn about and accomplish?

Yes Luke, thanks for the question. Great to meet you as well. You know look, again my goal here initially is to listen and learn before I act. You know learning a lot about the solar market, learning a lot about the company in general. You know I've admired this business. The company has been able to really create tremendous innovative approaches, create simple solutions for our customers and you know the plan is to continue to really drive the business that way initially. You know, I bring experience to the job and rapidly growing our business platform. I did that at Southwire Company in our Tools, Components and Assembled Solutions Business; stood up a few product platforms and an international manufacturing global supply chain. So really, it's that simple. I look forward to leveraging that experience and continue to help scale the Shoals business to $1 billion plus organization. And what's vitally important to me is to really continue what has made this company special at this point and it's the culture, commission driven values around here that have been really the cornerstone of this company’s success. So, you know excited to be part of the team here and really the mission thus far as listening and learning.

Great, thank you for that. And then I've got a follow-up question, kind of on the discussion on the new Snapshot I-V 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 are you guys just thinking about this from a one-time hardware sale. Thanks.

I appreciate the question. We are not getting into that amount of detail. It is a product ecosystem and we expect to have this as our first of many within that ecosystem. So more to come, 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 I-V ecosystem can provide.

The next question comes from Derek Soderberg with Cantor Fitzgerald. Please go ahead.

Yes, hey guys. Thanks for taking my questions. I also wanted to ask about the Snapshot or the Snapshot Wireless Gateway. So if I'm not mistaken, that's the first gateway product you guys have had. I'm curious, was this 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 and the hardware or software side?

I appreciate the question Derek, thank you. This was a Shoals innovation based on our – just looking into the solar fields and what's needed. As you know, the inverters provided a certain amount of data, the other electronics in 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 and visibility of the solar field than we believe 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 where 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 international growth, I think in the prepared remarks you mentioned I think – talked a bit about the manufacturing footprint internationally. I was wondering if you can expand on that. How you might acquire that or what that might look like gaining that footprint? Thanks.

Yes, 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, we're doing economic evaluations, we're 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 in meeting and exceeding our customer requirements through on-time deliveries, accelerated deliveries, and a very cost competitive solution. Another point where I can talk about how we fulfill that, we've got ideas, but it would be just too early to talk about on an earnings call.

The next question comes from Brett Castelli with Morningstar. Please go ahead.

Yes hi, thank you. Just wanted to come back to the backlog and your orders, 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 closed rates with customers and the like?

Now Brett, 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 and converted to revenue. We replaced that in backlog and awarded orders and also then grew sequentially over the first quarter. So we feel very good about our visibility that's being derived from that. Back log in awarded orders and we also mentioned our quoting activity, I believe in the queue. That continues at a very robust pace through Q1 into Q2. So that's also a more forward indicator. The market is strong and Shoal’s position within it also is strong.

Thanks Jeff and then just curious. An update on sort of solar plus storage and what you're seeing in terms of storage quoting activity relative to maybe recent history?

Yes, a couple of things. One is, we're continuing to fulfill the projects that have been awarded. We announced a big one last year, where we're fulfilling that one at an expected and fantastic pace from the customer's perspective. The quoting activity continues for the attached storage market. We're also seeing an increase in a 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. The market itself is still very, very large and what we're working through right now is finalizing value proposition. We're working with those customers that are sending us quotes and we are seeing an increase in requests 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 don't break out EV as a separate segment or internationally right now to the extent of breaking things out. It kind of comes down to more sort of like systems sales versus component sales, all effectively, presumably or sort of predominantly within solar. But these are important growth initiatives for you guys, international and EV and so you know presumably there would be some point in the future where you would start to break out, provide some of those numbers either doing it as segments or you have solar segment and EV segment, are you doing a domestic and international, something like that. And so my question, I know and I'm very sympathetic to – you don't want to say, okay, here's when we would get – you know disclosed revenue numbers for EV. But what would be good to know is, kind of putting an outer bound on it in terms of what – like when do you think it would be appropriate for us as analysts or investors or to kind of actually be bugging you about it. I think it's fair to allow certain times for business to you guys to figure things out and allow growth, but is it you know a year from now, two years from now, you know three years from now? Where in your view it would be at that, 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 range there?

So Donovan, this is Dominic. Let me jump in on that one, because you know from a financial driven reporting standpoint, there's a couple things that will lead into that. First and foremost as we said in our Q, we are still predominantly 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 and domestic solar, some of the other things, you know 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 is really refining these things and hope to have an 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, it’s kind of pushing the other percentages 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’ll look forward to the Analyst Day sort of broadly. And then as a follow-up, just because you guys have such fantastic market share, I figure you're a pretty good one to check in on anything you're seeing on your radar around projects being delayed at all. I mean your results seem to suggest that is likely not the case, but I figure I might as well ask directly if you're seeing projects in the U.S., seeing delays because of the Uyghur Forced Labor Prevention Act customs, detaining panels or developers facing long interconnection queues, running into permitting issues. Anything on that front that you’re seeing that's making things go slower than you're hoping for otherwise expect in the U.S.

I appreciate the question Donovan. This is Jeff. We've not seen any delays to projects due to UFLPA, general panel availability, labor market and grid interconnections. We're 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 way differently, so we're watching each. One of the advantages that we have at Shoals is that we are typically brought into a customer after the developers chosen their EPC. So that typically means that number one, the permit is either approved or well underway and that they have sourced their panels already and know where those are coming from. So there is a higher degree of certainty once we're awarded, and Slide 34 in our 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 this field goes live. So our product goes out the door. The site is then finalized, commissioned, energized thereafter and then they might show – and then the electrons show up in the analyst reports. So there's a high degree of lead and lag built into our time frame that gives us stronger visibility and a little bit higher certainty. But we are continuing to watch, because UFLPA and AD/CVD impacted the entire market last year and we want to make sure we're not impacted this year or going forward.