Hello and welcome to the Shoals Technologies Group, Inc. Third Quarter 2024 Earnings Call. My name is Alex and I'll be coordinating the call today. [Operator Instructions] I'll now hand it over to our host Matt Tractenberg to begin. Please go ahead.

Thank you, Alex, and thank you everyone for joining us today. Hosting the call with me is our CEO, Brandon Moss; and our CFO, Dominic Bardos. 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 which should not be considered guarantees of performance or results. Actual results could differ materially from our forward-looking statements. Risk factors include, among other things, those described in our filings with the Securities and Exchange Commission, including economic market and industry conditions, project delays, the effects of competitive dynamics, volume discounts and other customer mix in our key markets, defects or performance problems in our products or their parts, including those related to the wire insulation shrinkback 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 products, policy and regulatory changes, supply chain disruptions, and availability and price of our components and materials. Today's presentation also includes references to non-GAAP financial measures. You should refer to the information contained in the company's third quarter press release for definitional information and reconciliations of historical non-GAAP measures to the comparable GAAP financial measures. Please note, that the slides you see here are available for download from the Investor Relations section of our website at investors.shoals.com. With that, let me turn the call over to Brandon.

Thank you, Matt, and good afternoon, everyone. I'll begin by sharing some thoughts on the current events that we're all navigating and provide some color on markets we operate in. I'll then spend some time discussing the progress we're making with customers, new products, and growth opportunities. Dominic will then review our financial results for the quarter and provide our outlook on the remainder of 2024. Like many of you, I'm pleased that the election uncertainty is behind us. While we've seen recent volatility in solar equities, we believe the outlook for US utility scale solar remains bright. While some have expressed concern the new administration will enact policies that harm the domestic solar industry, it is important to remember that there are almost a half a million jobs tied to solar and storage. Those jobs are in both red and blue states and have support from both parties. In fact, almost three times more clean energy investment occurred in Republican congressional districts than in Democratic districts since the IRA was enacted. Of the top 10 congressional districts that have attracted the most clean energy investments, nine are led by Republican lawmakers. The IRA has not only advanced clean energy, but has had meaningful impact on the local and national economy regardless of political affiliation. While we may see some elements of the clean energy tax credits look different in the coming four years, we believe solar will fare well. Recall that Shoals does not receive any 45x credits and employs over a 1000 people across the US. As a member of the Solar Energy Industries Association, we're proud of the bipartisan work we've done to advance the solar industry in America. In our opinion, the clean energy transition is more important now than ever before and is crucial to…

Thanks, Brandon, and good morning to everyone on the call. Turning to our financial results, third quarter net revenue declined 23.9% to $102.2 million year-over-year but increased 2.9% sequentially. The year-over-year decline in net revenue was largely driven by project delays, which we've been discussing all year, and to a lesser extent, the competitive dynamics, volume discounts, and customer mix. Gross profit increased to $25.4 million compared to $14.2 million in the prior year period. We recorded a $13.3 million charge related to wire insulation shrinkback remediation in the current period. This resulted in GAAP gross profit percentage of 24.8% compared to 10.5% in the prior year period. I'll provide more detail on this in a moment. Adjusted gross profit percentage, which excludes the effect of that warranty charge was 37.9% largely driven by higher labor costs, some nonrecurring operational charges, volume discounts, and to a lesser degree, lower fixed cost absorption. We continue to target 42% adjusted gross profit percentage over the longer term. Adjusted EBITDA was $24.5 million compared to $48.0 million in the prior year period. Adjusted EBITDA margin was 24.0% compared to 35.8% a year ago, driven largely by lower sales and adjusted gross profit percentage. General and administrative expenses were $18.7 million compared to $22.6 million during the prior year period. The year-over-year decrease in G&A expense was primarily related to lower stock based and incentive compensation. Approximately $2.3 million of G&A expense was specifically related to the ongoing wire insulation shrinkback litigation. Net loss was $0.3 million compared to net loss of $9.8 million during the prior year period. Adjusted net income was $13.9 million compared to $33.4 million in the prior year period. As I mentioned earlier, I'd like to provide some additional color on the status of our warranty remediation. We've been…

Thank you, Dominic. I want to close by offering some additional color on the environment we're navigating and the transformation taking place at Shoals. We believe we are at the cusp of a meaningful investment cycle within the clean energy sector. Our long-term financial model incorporates the Wood Mackenzie outlook of conservative growth in the US utility scale solar market, which we believe is realistic and achievable. At the same time, we cannot ignore the potential energy shortfall we expect over the next decade or fail to recognize the favorable position solar is in to address it. We've detailed at length the processes, capabilities and strategies we've deployed that will help ensure we continue to win in the marketplace. We've identified attractive market segments, geographies and new products that will enable us to leverage our strengths and diversify our portfolio. We've seen incredible traction with existing customers, signed MSAs with multiple new EPCs and are winning back wallet share with others. Our product innovation engine is running on all cylinders and we are releasing exciting new products. We are building a world-class team of seasoned business leaders and are streamlining operations in a new facility that will allow us to optimize our footprint to become lean and agile. The transformation we've been talking about with you is beginning to change the look and feel of Shoals in ways that customers, investors and employees are noticing. In closing, 2024 was a challenging year for Shoals and others in the industry. However, given our momentum and supported by our backlog and awarded orders, we believe we'll return to growth in the upcoming year. I want to thank all of our shareholders and customers for their continued trust and our employees for their hard work and dedication. Operator, we are now ready to take questions.

Thank you. [Operator Instructions] Our first question for today comes from Brian Lee of Goldman Sachs. Your line is now open. Please go ahead.

Hey, guys. Good morning. Thanks for taking the questions. I guess one on the ITC decision. I just kind of had maybe a little bit of a clarification or housekeeping question. My understanding was that there was a deadline for review, which is this week, maybe today. Have you heard any updates there? And if there are no updates, does that effectively mean there will be no review and the initial ruling is going to be largely representative of the final ruling? Maybe walk us through that a bit and also if I have the timing right? And I had a follow-up. Thanks.

Brian, hey, thank you for the call. Good morning. I think you're right on the timing. It's either today or tomorrow, if I recall correctly, on the deadline for review. Look, I think there's -- in these cases, there's issues that come up from review from time-to-time. I don't think that, that should lead to any assumptions on how the case would turn out. So if there is something that is reviewed, it is a common occurrence. What we're looking for is that final determination that comes at the end of December. And to your question, have we heard anything about potential items up for review, we have not at this point. Having said all that, look, we still remain excited about the initial determination. It was a win for Shoals. And look I think probably as importantly, we plan to protect our new BLA patent portfolio as we did the last one. And we'll continue to pursue this case in the District Court following the final outcome of the ITC.

Okay. Fair enough. That's helpful. And then just a question on bookings. A bit softer this quarter, but then Dominic, I appreciate the commentary around what bookings strength you're seeing at the start of this quarter. Can you, I know it's lumpy, but can you give us a sense of that run rate relative to where you were during the third quarter? It would seem like the better competitive landscape, the election out of the way and some of these new opportunities and customers you're talking about, you should see some meaningful strength in bookings activity with some of those headwinds out of the way. And based on the comments you made about the early start to Q4, maybe you're indicating that. But just any sense of how sustained you think the bookings momentum could be here in Q4 and maybe a comp to where you were at this point last quarter? Thanks, guys.

Brian, thanks for that. Yes, we've seen some good strength as we started the quarter. And I think as I mentioned in the remarks, we think there was some timing. There were some just folks holding out, as you mentioned, on some of the order processing. We have a very, very healthy pipeline. We've had quoting activity hit record levels. Some of the projects that are coming back online and coming through now from the award standpoint are represented in both 2025 revenue and some are already for 2026. So we haven't guided to where the quarter is going to land. We just wanted to say, this isn't the first time we've seen this. I think a year ago, we had a dip, and we said, hey, there's some timing issues going on. But we're very pleased with the commercial gains that we've had, the customer engagement that we've had, some of the new customers since the ITC initial determination that we've had. So I'm very, very pleased with where we stand right now with our bookings.

All right. Thanks, guys. Appreciate it.

Thank you. Our next question comes from Mark Strouse of JPMorgan. Your line is now open. Please go ahead.

Yeah, good morning. Thank you very much for taking our questions. Dominic, just one question for me. The gross margins in 3Q came in slightly below your target range of 40% to 45%. You mentioned a few things. Just I think you said some nonrecurring operational items. There might have been some other things. Can you just give us a bit more color on exactly what those were and how to think about gross margin going forward? Thank you.

Sure, absolutely. So, as you know, we've talked about some of the labor challenges when you're trying to have a volatile revenue plan coming in and out and how we've managed labor. We did run some elevated labor in the period. We also had some more unusual items that hit in the period, some supply chain things, some factors that impacted our efficiency on the floor. We had some expedited freight to make sure we had materials coming in at the right time. And when you're air freight heavy materials because there was just a snafu with some supply chain issues, it has an impact within the period. So I think the margin in and of itself, there are always going to be operational things. It just seemed like we had a few that were all coming in against us in Q3. I do not characterize them as long-term issues. Our guide for the long-term remains solid. We believe that the 40% to 45% target range is absolutely solid for us.

Next question, Alex.

Thank you. Our next question comes from Philip Shen of ROTH Capital Partners. Your line is now open. Please go ahead.

Thanks for taking my questions here. I wanted to follow up on the bookings thread. So I was wondering with the commercial success you're having, if we see book-to-bill at 1 or 1:1 in Q4? Do you see potential for that? And with the election, sorry, I'll just pause there. I'll start with the next one.

Yes, Phil, absolutely. I'm encouraged where we are in the quarter. We'd like to get that book-to-bill back over 1. So that's absolutely our target.

Phil, maybe just to jump on to Dominic's point and to give a little bit more color about our bookings and commercial activity. Look, we've talked about over the course of the last couple of quarters, the investment we've made in our commercial organization. We've done it across sales, product management and marketing, and that's beginning to pay dividends for us. And it's coming through in the results, right? We've quoted $2 billion worth of projects. That's up basically 50% year-over-year. A lot of those project quotes are due to our flexibility and new innovations that we're bringing to market, which is really neat to see. We've talked a lot about the past few quarters in talking about our wallet share. We had four EPCs that in 2023 did less than a combined $1 million with us. We've done $25 million year-to-date with those EPCs and we've got four gigs in our backlog and awarded orders. We've seen four new EPCs, as Dominic mentioned, since the ITC ruling become customers, which is fantastic. We've started shipping our new large EPC that we talked about earlier in the year. We've launched a project with them that's now being deployed, which is great. And look we still have things going with our top customers and our historical top customers. None of the 12 gigawatts that we talked about earlier this year in our new MSA is in our backlog today. So we feel really good about the progress we're making on the commercial side of the business, and we are moving. So I expect strong bookings.

Great. Brandon, thanks for the color. Shifting over to the election results. The election is over. We're likely in for a red sweep and that could result in uncertainty around the IRA and the incentives there, including the ITC. So our checks suggest these changes could result in a positive activity in US utility scale solar in '25. I know it's really early, we're just a week out, but have you had those conversations yet with the customers? What's your sense in terms of the risk around slowdowns and pushouts for this new kind of headwind potentially? Thanks.

Yes, Phil, that's a great question. Probably goes without saying. We hear in Portland, Tennessee still love the solar market. We're excited about it. There has been varying degrees of opinions on how things will play out. I lean back just on the power needs here. Specifically in the US, we're seeing 3% to 5% load growth over the course of the next five years. That may be an understated number. That's roughly 1,000 terawatt hours of power that is going to be consumed with data centers consuming probably 10% to 15% of that. A lot of conversation around nuclear here, probably more so the last 60 days than before. Obviously, that generation source has its place on the grid. I think it's probably worth pointing out that those plants won't be generating. The new generation probably doesn't come online for five to seven years. And I think we saw some things play out there with the Amazon and Talent situation here in the last couple of weeks. So, look, we think solar still being lowest LCOE, quickest to deploy, and we've got projects that are ready to go nationwide, which is exciting. So I think the new administration is going to be supportive of that. I think there's a recognition that US has to dominate on the Gen AI front and we've got to have power to do that. A lot of investments, as you know, in red states. I live in one of those, Georgia, where we've seen substantial investments. So you've got some strong governors in red states that have been supportive of the renewables industry and also in Congress as well with 9 out of 10 top invested areas being Republican Congressman. So I'm excited about the new administration and I hope the theories about a pull forward or an acceleration in supporting solar and US manufacturing holds true.

Thanks, Phil. Alex, next question, please.

Thank you. Our next question comes from Kashy Harrison of Piper Sandler. Your line is now open. Please go ahead.

Good morning, everyone, and thanks for taking my questions. So first one for me, on Slide, I think, 16, you talked about $445 million of backlog scheduled to ship within the next 12 months. What are some of the parameters that underpin that statement, just given the lower contracted backlog in Q3 and the delays that we've seen all throughout 2024? Just trying to understand the confidence in that $445 million.

Kashy, it's Dominic. Yes. So of the $455 million, you're right that some of that $455 million in the next few quarters, which takes us through three quarters of 2025, include delayed projects from 2024 that we had talked about earlier in the year. So it's not necessarily a forecast of our revenue. We're not necessarily calling our shot for '25, but it is based on our book of business right now, which I think over the past year has gotten healthier. I think there were some delays. I think projects that were on the fringe may have -- we may have told you about earlier quarters that we pushed some back into the pipeline. So I think our book of business is healthy. We've had good momentum this quarter thus far. The next four quarters are based on project time lines and delivery dates expected by the customers and we remain closer to those customers than ever. So I really believe that the health of our book of business is very strong.

And did you, sorry, did you talk about?

Appreciate that. Oh, sorry, go ahead.

Sorry, go ahead, Kashy.

Yes, sure. So just my follow-up question. I think last quarter, you highlighted, Brandon, that your top 10 customers represented 61% of your backlog and awarded orders. Can you give us a sense of what that top 10 mix looks right now? Thank you.

Yes. Great question. At this point, I don't want to get into details of the specifics of that backlog and the way it is assorted amongst customers. Again the only thing that I would point out is, as I think about our backlog and awarded orders, it's becoming healthier, as Dominic said, and more diverse. Again, I'd lean on the statement that I made earlier that we are really focused on wallet share of customer like we have talked about all year, and we're starting to see the dividends of that being paid with, again, $25 million of revenue of four top 10 EPCs flowing through already this year with 4 gigawatts of backlog and awarded orders. So we're excited about our order book, quality and diversity of that.

And if I could add just one thing. There is a delay right now at the EDGAR site with SEC. So our Q is not available to you. But in the first nine months of the year, customer A's concentration has now reduced to about 30% from last year, running 34%, 35%. So I think the diversity that Brandon was talking about is manifesting itself in our revenue recognition as well. So I just want to point that out that the Q and our 8-Ks have been filed and accepted, but they're just not published on the edgar.gov website yet. There's an issue on their end technically. I just want to put that out there.

Thanks, Kashy. Alex, next question, please.

Thank you. Our next question comes from Christine Cho of Barclays. Your line is now open. Please go ahead.

Good morning. Thank you for taking my questions. Just on a follow-up about that backlog and that $455 million of deliveries. When projects are delayed, are you using your discretion of how long it's going to be delayed or do you actually have firmer time lines from the customers of how much it's going to be delayed? And you talked about how there's no cancellations, but that was another thing I wanted to ask like sort of is there any, I guess, what's the, from a customer standpoint, can they just like indefinitely delay or like at what point do they actually cancel?

Yes, Christine, good question. It's Brandon. Maybe I'll take the first part of that. We do not use our discretion in how we're pacing the backlog and awarded orders out or the potential award date. We're actually sitting down with our top customers on a weekly basis and we go through their construction schedule. So many of our top customers will share that schedule with us from the time that they're putting pilings in to the time that they're putting modules on trackers. So we've got a great understanding of those dates and timing and we blow that through our CRM, which drives these backlog and awarded order numbers. So while not totally perfect, we feel pretty good about that information, and we've been getting better and better and more rigorous around it as the year has gone. Dominic, maybe you want to hit the second part of that?

I was prepared to do the first one. I'm sorry. What was the second part, Christine, I'd be happy to.

Like indefinitely postponing versus cancellation like cancellation actually happen?

Yes, I apologize for forgetting that. I'll focus on the first part. Yes. So we have backlog, we actually have a contract. And as you know, we've had one cancellation in the past year. I think it was we talked about in Q1 that was actually a cancellation with one of our top customers that was beyond their control, and we worked with them on cancellation fees, et cetera, how to reapply some things if we could. With awarded orders, those are -- we do not have the contract yet. And so those can be delayed for a while. We've had some of our European projects or international projects, I should say, that actually if they've had delays, we're still on the slate for the award. We just don't control when those projects are going to go forward. So we don't control that. We don't consider it something that we would remove unless we think the project has lost funding. If we hear that the EPC is now not able to do the work because they have a conflict, we did move some projects like that up back into pipeline to rebid with other EPCs. So that does happen occasionally with awarded orders, but not with backlog.

The move back up the pipeline was Q2, I believe, that we did that. But again, talking about our order book, Christine, we feel very strongly about the quality of it. And I guess just to reiterate, and I know you've all heard this that when these projects delay, they push out. Shoals is not losing the projects. They're just slower to deploy than we had originally scheduled due to the plethora of different situations that we've talked about all year, due to high interest rates, renegotiating PPAs and it could be even EPCs renegotiating construction costs with the owner or developer. So we feel great about our order book moving forward.

Thanks, Christine. Alex, next question, please.

Thank you. Our next question comes from Jordan Levy of Truist Securities. Your line is now open. Please go ahead.

Thanks for taking my questions. Just a quick one on [Technical Difficulty] project timing. And like you said, there's a lot of complex dynamics here. But just on a high level and kind of a normalized environment, how far out do you typically book projects for the following year? And at what point could you still be booking incremental orders for 2025 delivery?

Jordan you -- we lost sort of the first part of that question, but I think I've got it. So look, we're booking orders out into 2026 right now. So projects and the project cycle, as we've talked about, has elongated all year, where it used to be closer to a 9 to 12 has stretched out probably more on an average standpoint to 13, 14 months now. So while things are elongating, that's bad, it does give us better visibility for the long-term, which is ultimately a good thing for the business. As far as our book and turn business, we can usually book and turn things within, I'd say, 9 to 12 months is probably typical.

Yes. There's always some of that. Now when we give guidance for '25 at the end of the year in February, we will really have a really solid idea of the first couple of quarters because the book and turn business with lead times will really be back half generated, but it's still possible up through the first half of the year to book things that would be delivered in 2025. That's part of the business that happens with us every year. In fact, as we talked about last time on our quarterly guidance, we anticipated booking some additional business in the year that will, in fact, play out that way. And we did have some projects push out the way we guided. So we anticipated both sides of that equation happening and that's really how we're seeing it play out this year. So we can still book additional 2025 projects, I'd say, through the first half of '25.

Also important to point out, we're talking about the quality scale right now. For our CC&I business, it's a quicker turn business. And as that becomes more impactful to Shoal's overall revenue, I think we've got the ability to generate some quicker book and turn business. We talked about in the remarks, we've quoted 64 projects, and we're starting to see some revenue flow through in 2024, which is great and I'm confident that will accelerate in 2025.

Jordan, do you have a follow-up?

Yes. Just a quick one. I appreciate that on the international side of things. I know Gary and the team and all of you have worked hard to get a new product set there, super jumper and trench BLA and that sort of thing. I just wanted to see if we could get any color on how customers are responding post the rollout of some of those products.

Yes. Jordan, we have seen substantial quoting activity post Intersolar when we've launched those products, which has been very exciting for us. Again, we're in a long sales cycle business. So no huge wins to report yet as it relates to the new products on the international front, but we are seeing, I would say, pretty drastically increasing quoting activity, which is a positive sign for us. So more to come on international. I like our strategy and the direction we're going there.

Thanks, Jordan. Alex?

Thank you. Our next question comes from Andrew Percoco of Morgan Stanley. Your line is now open. Please go ahead.

Thanks. Good morning, guys, and thanks for taking the question. Most of my questions have been answered, but maybe just one quick follow-up on the margin question. In the slides, you mentioned volume-driven discounts as one of the drivers for the lower gross margin in the quarter. Obviously, you guys have been focused with regaining wallet share with some of your top EPCs. Can you just discuss a little bit more about how you're approaching pricing in some of these volume-driven discounts on a go-forward basis and maybe what that means for margin recovery in the fourth quarter of 2024 and then into 2025? Thank you.

Sure. So as we've talked about, and I think we reiterated at our Investor Day, pricing is always a discussion, and we always look at the volume of business. And historically, we had not had these master supply agreements in place. And so historically, while we may have been negotiating pricing differently based on an EPC and the volume that they provided, we now have MSAs in place have very scripted volume arrangements for some of them, not all, but some do. And so in the case, as that becomes more significant, we will increase disclosures around that in the future because it's now something that we can calculate. There's a very specific accounting guidance for that. So as we look at those things, I want to make sure that we're very clear that we do want to have partnerships. When we sign a 12.5 gigawatt deal, you certainly want to make sure that you reflect that with your top customers. And so as those things become more significant to drive top line growth, there might be some percentages associated with that on the discount side. So it's nothing unusual for us. It's not a new thing. It's just now that it's kind of been memorialized in MSAs, it will become something that we will disclose more about probably in '25.

Andrew, just to jump on that a little bit, I do want to reiterate our third quarter gross margin being at 37.9%, we did have some nonrecurring issues in there and some other things, as Dominic outlined. Our Q4 guidance and I know we don't guide to gross margin, but it does reflect higher EBITDA margins, which, I mean, would lead you to believe that we're going to drive some higher margins on the gross margin side. So we do not think a 37.9% is a go-forward or acceptable margin for us. Haven't guided to that in Q4 and are confident we can get it back to the range that we have been discussing all year, the 40%, 45% or 42% range.

Thanks, Andrew. Alex?

Thank you. Our next question comes from Praneeth Satish of Wells Fargo. Your line is now open. Please go ahead.

Thanks. Good morning. Maybe just going back to Slide 16. It looks like you expect 76% of the order book to convert to revenue in the next 12 months, which is actually up from last quarter when I think the metric was 72%. I guess what's driving that improvement? And then just given the current macro backdrop, do you think we could see this metric hold steady or continue to improve into Q4?

Yes. So a couple of things on that. One, as we mentioned, some of the projects that we thought were being kind of delayed indefinitely were pushed back out of our awarded order book. The order book, we believe, is healthy, probably the healthiest it's been in a few quarters simply because there was some shakeout in 2024 for everybody in the industry. So the improvements, I would say, a couple of things are driving that. We believe that some of the delays that we saw earlier in the year that we now have the customers' good time lines. So we have good expectations of when some of those awards and when purchase orders will be coming through for those materials. And I believe that the market, now that the election is behind us and PPAs that had to be renegotiated have been renegotiated, those customers that have come to us with projects such as following our victory at the ITC, those are projects that were probably already on the books, and they need to have material. So we feel very confident in that time line of our order book right now.

Got it. That's helpful. And maybe just staying on this concept here of revenue conversion cycles. As you kind of look out over the next few years when you compare international utility scale, CC&I, batteries, what are the revenue conversion cycles for each of these verticals look like compared to your traditional domestic utility scale market? And do you think overall, you could see that percentage of the amount of the order book that converts to revenue in the next 12 months? Do you think that could kind of skew up or down over the next few years based on the verticals you're entering?

Yes. So a few things about that. I think at our Investor Day, we did talk about some of the ramp. And as we target our 12% to 18% growth over time, not all of these verticals will grow at the same speed and revenue conversion cycles are certainly a factor in that. As Brandon mentioned, CC&I has a relatively shorter conversion cycle. We can find out about projects. We can build the product, we can recognize revenue in a shorter time line. Some of the things internationally, we have proven to take longer than our US utility scale base. So we factor that in because we still have some awarded orders that have had delays even longer than we've seen here in the US. I don't believe things are getting worse for us from a utility scale standpoint. When we look at projects that went COD, we're still averaging about 13 month lead time in front of when a project goes COD. I think our customers in the construction side, they figured out time lines about when to really maximize their efficiency and use of cash when they build these things. And they now know how to place orders with us. So we're not seeing anything worse in that standpoint. And I think with battery energy storage, those are relatively quick turnarounds. We can get those cabinets, those combiners and disconnects turned around relatively quickly. And so I think it really varies on the vertical. We're excited about all of our growth verticals, but the revenue cycles are certainly not getting any worse at this point.

Alex?

Thank you. Our next question comes from Joseph Osha of Guggenheim Partners. Your line is now open. Please go ahead.

Thank you. Good morning. Two questions. First, looking at the redesigned voltage product, which was excluded from the ITC, you all have mentioned your patent portfolio a number of times this morning. Might we expect that you begin to look at your other options for addressing competitive outcomes with that redesigned voltage product? And I do have a follow-up.

Joe, we'll totally tip our hand there. But like we've said, we will continue to protect our patent portfolio. We feel very strongly about our two new patents related to the BLA product line. So more to come there.

Great. Thank you. And then just returning to this revenue conversion, this bookings conversion question, given how time lines have stretched out and how hard it's been to predict timing, obviously, CC&I and whatnot is a separate issue. But why would it make sense in your 2025 outlook to build in any book and ship just given the way the business looks and given [Technical Difficulty] 2024 in utility data?

Joe, would you like to come present to our Board of Directors so I can get a good plan approved for next year. Seriously, though, that's a great question.

I'd be glad to. You know me a lot.

Seriously, that's a great question. We do look at what's been happening. And as we work with our customers, we are starting to have even tighter integration on construction time lines. As we've talked about the master supply agreements that we've signed with some very large EPCs, they share very detailed specs. And so we can really look at projects that they are bidding on that they hope to move forward with in the back half of the year. And if we feel like they have a great shot at winning those projects and they do get an awarded order, we should be able to count on that. We know the percentages of the business that we're going to get. So, yes, it's always risky. As I mentioned before, I think, it was last time that this is the first year where our revenue for the year is going to be below the backlog and awarded orders that we started the year with. Usually, we can target getting another 10% lift or something on top of what the backlog and awarded order book is at the end of the year. So we're going to look at that. We are very sensitive to the dynamics facing our customers, but we're also very confident in our relationships with them that we would have confidence to put those jobs into our back half if they win those jobs.

Alex, let's see if we can squeeze in one last question.

Thank you. Our final question for today comes from Colin Rusch of Oppenheimer. Your line is now open. Please go ahead.

Thanks so much. Thanks so much for squeezing me in guys. Can you talk a little bit about the competitive environment separate from voltage, any competitors that you're seeing start to emerge and any needs from your customers thinking about second sources or alternate solutions for what you guys provide?

Yes, Colin, great question. We've seen really some exciting engagements between our commercial team and customers. We're working hand-in-hand with them to try to really improve deployments around EBOS. There's been sort of, I guess, a restart of our voice of customer efforts here in the last year so to speak. And we're seeing -- we're starting to see the benefits of that. So you'll see some new products from us probably over the course of the next year, some adaptation of products as a result of that. We talked about the 2kV product in the prepared remarks. That's an exciting new product line for us. But we're really focused on customer dynamics and making sure that we're meeting their needs, not only on the specific product side, but we have gotten much more flexible around the packaging and how we kit products to deliver them on site to make us more competitive by unlocking additional value for our customers. So that's our focus. In terms of the broader competitive landscape, we're always going to have competition. We command a great share in the marketplace. People understand that. We'll always be nipping in our heels, but I like what we're doing specifically in the space right now to maintain and continue to grow our share.

Great. Thanks so much, guys.

Thank you. We're at the top of the hour. That's all the time that we have for questions today. I want to note that we do have a very active Investor Relations calendar through the end of the year. It can be found on our IR website. So please join us for one of those events. If you can, we'd love to meet with you. If we can help you further, please reach out to the Investor Relations team at investors@shoals.com with any questions. Thanks, everybody, for joining us today. Have a great day.

Thanks, all.

Thank you all for joining today's call. You may now disconnect your lines.