Shoals Technologies (SHLS) 10-Q 7 Nov 23 2023 Q3 Quarterly report Financial data

Cover

Cover - shares	9 Months Ended
	Sep. 30, 2023	Oct. 31, 2023
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Document Transition Report	false
Entity File Number	001-39942
Entity Registrant Name	Shoals Technologies Group, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	85-3774438
Entity Address, Address Line One	1400 Shoals Way
Entity Address, City or Town	Portland
Entity Address, State or Province	TN
Entity Address, Postal Zip Code	37148
City Area Code	(615)
Local Phone Number	451-1400
Title of 12(b) Security	Class A Common Stock, $0.00001 Par Value
Trading Symbol	SHLS
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Amendment Flag	false
Entity Central Index Key	0001831651
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2023
Class A Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		170,057,495
Class B Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		0

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current Assets
Cash and cash equivalents	$ 9,224	$ 8,766
Accounts receivable, net	108,886	50,575
Unbilled receivables	28,506	16,713
Inventory, net	60,961	72,854
Other current assets	6,664	4,632
Total Current Assets	214,241	153,540
Property, plant and equipment, net	22,789	16,870
Goodwill	69,941	69,941
Other intangible assets, net	50,564	56,585
Deferred tax assets	477,073	291,634
Other assets	5,540	6,325
Total Assets	840,148	594,895
Current Liabilities
Accounts payable	16,615	9,481
Accrued expenses and other	21,516	17,322
Warranty liability—current portion	17,254	560
Deferred revenue	27,025	23,259
Long-term debt—current portion	2,000	2,000
Total Current Liabilities	84,410	52,622
Revolving line of credit	0	48,000
Long-term debt, less current portion	188,380	189,063
Warranty liability, less current portion	39,360	0
Other long-term liabilities	3,358	4,221
Total Liabilities	315,508	293,906
Commitments and Contingencies (Note 14)
Stockholders’ Equity
Preferred stock, $0.00001 par value - 5,000,000 shares authorized; none issued and outstanding as of September 30, 2023 and December 31, 2022	0	0
Additional paid-in capital	466,768	256,894
Accumulated earnings	57,870	34,478
Total stockholders’ equity attributable to Shoals Technologies Group, Inc.	524,640	291,374
Non-controlling interests	0	9,615
Total stockholders' equity	524,640	300,989
Total Liabilities and Stockholders’ Equity	840,148	594,895
Class A Common Stock
Stockholders’ Equity
Common stock	2	1
Class B Common Stock
Stockholders’ Equity
Common stock	$ 0	$ 1

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2023	Dec. 31, 2022
Preferred stock, par value (in dollars per share)	$ 0.00001	$ 0.00001
Preferred stock authorized (in shares)	5,000,000	5,000,000
Preferred stock issued (in shares)	0	0
Preferred stock outstanding (in shares)	0	0
Class A Common Stock
Common stock, par value (in dollars per share)	$ 0.00001	$ 0.00001
Common stock authorized (in shares)	1,000,000,000	1,000,000,000
Common stock issued (in shares)	170,054,787	137,904,663
Common stock outstanding (in shares)	170,054,787	137,904,663
Class B Common Stock
Common stock, par value (in dollars per share)	$ 0.00001	$ 0.00001
Common stock authorized (in shares)	195,000,000	195,000,000
Common stock issued (in shares)	0	31,419,913
Common stock outstanding (in shares)	0	31,419,913

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenue	$ 134,209	$ 90,823	$ 358,503	$ 232,289
Cost of revenue	120,059	54,776	245,579	141,357
Gross profit	14,150	36,047	112,924	90,932
Operating expenses
General and administrative expenses	22,551	13,853	59,266	41,037
Depreciation and amortization	2,170	2,229	6,493	6,939
Total operating expenses	24,721	16,082	65,759	47,976
Income (loss) from operations	(10,571)	19,965	47,165	42,956
Interest expense, net	(5,899)	(4,754)	(18,400)	(12,760)
Income (loss) before income taxes	(16,470)	15,211	28,765	30,196
Income tax benefit (expense)	6,642	(2,452)	(2,686)	(5,485)
Net income (loss)	(9,828)	12,759	26,079	24,711
Less: net income attributable to non-controlling interests	0	4,801	2,687	9,711
Net income (loss) attributable to Shoals Technologies Group, Inc.	$ (9,828)	$ 7,958	$ 23,392	$ 15,000
Earnings (loss) per share of Class A common stock:
Basic (in dollars per share)	$ (0.06)	$ 0.07	$ 0.14	$ 0.13
Diluted (in dollars per share)	$ (0.06)	$ 0.07	$ 0.14	$ 0.13
Weighted average shares of Class A common stock outstanding:
Basic (in shares)	169,965	112,975	162,173	112,561
Diluted (in shares)	169,965	113,584	162,611	112,816
Class A Common Stock
Earnings (loss) per share of Class A common stock:
Basic (in dollars per share)	$ (0.06)	$ 0.07	$ 0.14	$ 0.13
Diluted (in dollars per share)	$ (0.06)	$ 0.07	$ 0.14	$ 0.13
Weighted average shares of Class A common stock outstanding:
Basic (in shares)	169,965	112,975	162,173	112,561
Diluted (in shares)	169,965	113,584	162,611	112,816

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) (Unaudited) - USD ($) $ in Thousands	Total	Class A Common Stock	Class B Common Stock	Common Stock Class A Common Stock	Common Stock Class B Common Stock	Additional Paid-in Capital	Accumulated Earnings	Non-Controlling Interests
Balance at beginning of period (in shares) at Dec. 31, 2021				112,049,981	54,794,479
Balance at beginning of period at Dec. 31, 2021	$ (7,498)			$ 1	$ 1	$ 95,684	$ (93,133)	$ (10,051)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	4,649						2,640	2,009
Equity-based compensation	5,636					5,636
Activity under equity-based compensation plan	(1,297)					(2,944)		1,647
Distributions to non-controlling interests	(2,938)							(2,938)
Vesting of restricted / performance stock units (in shares)				308,416
Balance at end of period (in shares) at Mar. 31, 2022				112,358,397	54,794,479
Balance at end of period at Mar. 31, 2022	(1,448)			$ 1	$ 1	98,376	(90,493)	(9,333)
Balance at beginning of period (in shares) at Dec. 31, 2021				112,049,981	54,794,479
Balance at beginning of period at Dec. 31, 2021	(7,498)			$ 1	$ 1	95,684	(93,133)	(10,051)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	24,711
Distributions to non-controlling interests	(7,800)
Balance at end of period (in shares) at Sep. 30, 2022				113,508,362	53,816,214
Balance at end of period at Sep. 30, 2022	22,670			$ 1	$ 1	104,539	(78,133)	(3,738)
Balance at beginning of period (in shares) at Mar. 31, 2022				112,358,397	54,794,479
Balance at beginning of period at Mar. 31, 2022	(1,448)			$ 1	$ 1	98,376	(90,493)	(9,333)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	7,303						4,402	2,901
Deferred tax adjustments related to Tax Receivable Agreement	148					148
Equity-based compensation	4,065					4,065
Activity under equity-based compensation plan	0					(1,326)		1,326
Distributions to non-controlling interests	(1,628)							(1,628)
Vesting of restricted / performance stock units (in shares)				48,721
Exchange of Class B to Class A common stock, net (in shares)				259,888	(259,888)
Exchange of Class B to Class A common stock, net	0
Reallocation of non-controlling interests	0					(20)		20
Balance at end of period (in shares) at Jun. 30, 2022				112,667,006	54,534,591
Balance at end of period at Jun. 30, 2022	8,440			$ 1	$ 1	101,243	(86,091)	(6,714)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	12,759						7,958	4,801
Deferred tax adjustments related to Tax Receivable Agreement	676					676
Equity-based compensation	3,991					3,991
Activity under equity-based compensation plan	0					(1,284)		1,284
Distributions to non-controlling interests	(3,196)							(3,196)
Vesting of restricted / performance stock units (in shares)				122,979
Exchange of Class B to Class A common stock, net (in shares)				718,377	(718,377)
Reallocation of non-controlling interests	0					(87)		87
Balance at end of period (in shares) at Sep. 30, 2022				113,508,362	53,816,214
Balance at end of period at Sep. 30, 2022	22,670			$ 1	$ 1	104,539	(78,133)	(3,738)
Balance at beginning of period (in shares) at Dec. 31, 2022		137,904,663	31,419,913	137,904,663	31,419,913
Balance at beginning of period at Dec. 31, 2022	300,989			$ 1	$ 1	256,894	34,478	9,615
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	16,983						14,296	2,687
Equity-based compensation	7,523					7,523
Activity under equity-based compensation plan	(3,532)					(4,219)		687
Distributions to non-controlling interests	(2,628)							(2,628)
Vesting of restricted / performance stock units (in shares)				495,831
Exchange of Class B to Class A common stock, net (in shares)				31,419,913	(31,419,913)
Exchange of Class B to Class A common stock, net	186,745			$ 1	$ (1)	186,745
Reallocation of non-controlling interests	0					10,361		(10,361)
Balance at end of period (in shares) at Mar. 31, 2023				169,820,407	0
Balance at end of period at Mar. 31, 2023	506,080			$ 2	$ 0	457,304	48,774	0
Balance at beginning of period (in shares) at Dec. 31, 2022		137,904,663	31,419,913	137,904,663	31,419,913
Balance at beginning of period at Dec. 31, 2022	300,989			$ 1	$ 1	256,894	34,478	9,615
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	26,079
Distributions to non-controlling interests	(2,600)
Balance at end of period (in shares) at Sep. 30, 2023		170,054,787	0	170,054,787	0
Balance at end of period at Sep. 30, 2023	524,640			$ 2	$ 0	466,768	57,870	0
Balance at beginning of period (in shares) at Mar. 31, 2023				169,820,407	0
Balance at beginning of period at Mar. 31, 2023	506,080			$ 2	$ 0	457,304	48,774	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	18,924						18,924
Equity-based compensation	4,445					4,445
Activity under equity-based compensation plan	(44)					(44)
Vesting of restricted / performance stock units (in shares)				105,687
Balance at end of period (in shares) at Jun. 30, 2023			0	169,926,094	0
Balance at end of period at Jun. 30, 2023	529,405			$ 2	$ 0	461,705	67,698	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(9,828)						(9,828)
Equity-based compensation	5,092					5,092
Activity under equity-based compensation plan	(276)					(276)
Vesting of restricted / performance stock units (in shares)				128,693
Exchange of Class B to Class A common stock, net	247					247
Balance at end of period (in shares) at Sep. 30, 2023		170,054,787	0	170,054,787	0
Balance at end of period at Sep. 30, 2023	$ 524,640			$ 2	$ 0	$ 466,768	$ 57,870	$ 0

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash Flows from Operating Activities
Net income	$ 26,079	$ 24,711
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	7,744	8,001
Amortization/write off of deferred financing costs	1,032	1,023
Equity-based compensation	17,060	11,887
Provision for credit losses	296	0
Provision for obsolete or slow-moving inventory	3,639	443
Provision for warranty expense	59,723	0
Deferred taxes	2,456	5,299
Changes in assets and liabilities:
Accounts receivable	(58,607)	(40,084)
Unbilled receivables	(11,793)	1,972
Inventory	8,254	(43,601)
Other assets	(1,192)	(381)
Accounts payable	7,390	1,186
Accrued expenses and other	3,330	7,679
Warranty liability	(3,669)	0
Deferred revenue	3,766	26,879
Net Cash Provided by Operating Activities	65,508	5,014
Cash Flows from Investing Activities
Purchases of property, plant and equipment	(7,642)	(2,393)
Other	(269)	(503)
Net Cash Used in Investing Activities	(7,911)	(2,896)
Cash Flows from Financing Activities
Distributions to non-controlling interests	(2,628)	(7,762)
Employee withholding taxes related to net settled equity awards	(3,852)	(1,297)
Proceeds from revolving credit facility	5,000	46,000
Other	(1,159)	0
Net Cash Provided by (Used in) Financing Activities	(57,139)	19,941
Net Increase in Cash, Cash Equivalents and Restricted Cash	458	22,059
Cash, Cash Equivalents and Restricted Cash—Beginning of Period	8,766	9,557
Cash, Cash Equivalents and Restricted Cash—End of Period	9,224	31,616
Supplemental Cash Flows Information:
Cash paid for interest	17,380	8,376
Cash paid for taxes	991	767
Non-cash investing and financing activities:
Recording of deferred tax assets related to exchanges of Class B common stock to Class A common stock	187,648	5,453
Recording of amounts payable pursuant to tax receivable agreement	0	4,629
Capital contribution related to tax receivable agreement exchanges of Class B common stock to Class A common stock	187,648	824
Term Loan Facility
Cash Flows from Financing Activities
Payments on/ repayments of credit facilities	(1,500)	(1,500)
Revolving Credit Facility
Cash Flows from Financing Activities
Payments on/ repayments of credit facilities	$ (53,000)	$ (15,500)

Organization and Business

Organization and Business	9 Months Ended
	Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Business	Organization and Business Shoals Technologies Group, Inc. (the “Company”) was formed as a Delaware corporation on November 4, 2020 for the purpose of facilitating an initial public offering (“IPO”) and other related organizational transactions to carry on the business of Shoals Parent LLC and its subsidiaries (“Shoals Parent”). Shoals Parent LLC is a Delaware limited liability company formed on May 9, 2017. The IPO and related reorganization transactions that occurred on January 29, 2021 resulted in the Company becoming the sole managing member of Shoals Parent, with the Company having sole voting power in and control of the management of Shoals Parent. On July 1, 2023, the Company contributed 100% of its membership interests (“LLC Interests”) in Shoals Parent LLC to its wholly-owned subsidiary Shoals Intermediate Parent, Inc. (“Shoals Intermediate”). As of September 30, 2023 the Company, including Shoals Intermediate, owned 100% of Shoals Parent. Following the contribution, Shoals Parent became a disregarded single member limited liability company, eliminating the Company’s umbrella-partnership C corporation structure (“Up-C structure”). The Company is headquartered in Portland, Tennessee and is a manufacturer of electrical balance of systems (“EBOS”) solutions and components for solar, battery storage and electric vehicle charging applications, selling to customers primarily in the United States as well as internationally. Shoals Parent, through its wholly-owned subsidiaries, Shoals Intermediate Holdings LLC (“Shoals Intermediate Holdings”) and Shoals Holdings LLC (“Holdings”) owns five other subsidiaries through which it conducts substantially all operations: Shoals Technologies, LLC, Shoals Technologies Group, LLC, Solon, LLC (collectively “Shoals”), Shoals International, LLC and Shoals Connect LLC. Shoals Parent acquired Shoals on May 25, 2017. Secondary Offering On March 10, 2023, selling stockholders, which consisted of certain entities controlled by Dean Solon, our founder (the “Founder”), completed a secondary offering consisting of 24,501,650 shares of Class A common stock. Following the closing of the secondary offering, the Founder no longer owned any shares of our Class B common stock or LLC Interests. The Company did not receive any proceeds from the sale of shares of our Class A common stock by the selling stockholders in this offering. Shoals Technologies Group, Inc. Ownership of Shoals Parent In March 2023, following the secondary offering described above, all Continuing Equity Owners (as defined in Note 12 - Stockholders’ Equity), exchanged all the LLC Interests and corresponding shares of Class B common stock of the Company beneficially owned by them into shares of Class A common stock of the Company. As a result, upon effectiveness of such exchanges, and prior to the July 1, 2023 contribution described above, all of the LLC Interests in Shoals Parent were held by the Company, no other holders own LLC Interests and no Class B common stock is outstanding.

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2023
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies Basis of Accounting and Presentation The condensed consolidated financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. Non-Controlling Interests The non-controlling interests on the condensed consolidated statements of operations represented a portion of earnings or loss attributable to the economic interests in the Company’s subsidiary, Shoals Parent, formerly held by the Continuing Equity Owners (as defined in Note 12 - Stockholders’ Equity). Non-controlling interests on the condensed consolidated balance sheets represented the portion of net assets of the Company attributable to the Continuing Equity Owners, based on the portion of the LLC Interests owned by such unit holders. As of September 30, 2023, the Company, along with a wholly-owned subsidiary, Shoals Intermediate, owned 100% of Shoals Parent. Unaudited Interim Financial Information The accompanying condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022, the condensed consolidated statements of operations, changes in stockholders’ equity (deficit) and cash flows for the three and nine months ended September 30, 2023 and 2022 are unaudited. The unaudited interim financial statements have been prepared on the same basis as the audited annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of September 30, 2023 and the results of its operations and its cash flows for the three and nine months ended September 30, 2023 and 2022. The financial data and other information disclosed in these notes related to the three and nine months ended September 30, 2023 and 2022 are also unaudited. The results for the three and nine months ended September 30, 2023 are not necessarily indicative of results to be expected for the year ending December 31, 2023, any other interim periods, or any future year or period. The balance sheet as of December 31, 2022 included herein was derived from the audited financial statements as of that date. Certain disclosures have been condensed or omitted from the interim condensed consolidated financial statements. These condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates. Significant estimates include revenue recognition, allowance for credit losses, useful lives of property, plant and equipment and other intangible assets, impairment of long-lived assets, allowance for obsolete or slow moving inventory, valuation allowance on deferred tax assets, equity-based compensation expense and warranty liability. Trends and Uncertainties In 2022 and to a lesser extent during the first three quarters of 2023, significant levels of inflation resulted in increased energy prices, freight premiums, and other operating costs. As a result of inflation, during 2022 and the first three quarters of 2023, the Federal Reserve increased interest rates. Such increased interest rates have resulted in higher interest rates associated with our Senior Secured Credit Agreement, as defined in Note 8 - Long-Term Debt. The Federal Reserve may continue raising interest rates, and any such additional increases will have a corresponding increase in the interest rates charged under our Senior Secured Credit Agreement. The eventual implications of higher government deficits and debt, tighter monetary policy, and potentially higher long-term interest rates may drive a higher cost of capital during our forecast period. In 2022 and to a lesser extent during the first three quarters of 2023, as a consequence of macroeconomic events, our ability to obtain raw materials required to manufacture our components and system solutions from domestic and international suppliers, as well as our ability to secure inbound logistics to and from our facilities, were impacted, with additional delays linked to international border crossings and the associated approvals and documentation. The Company does not directly source a significant amount of raw materials from Europe. However, the ongoing conflict in Ukraine has reduced the availability of certain materials that can be sourced in Europe and, as a result, increased global logistics costs for the procurement of some inputs and materials used in our products. We expect these trends to persist throughout the year. In addition, changes over the last few years in the international relations and tariff regimes between the U.S. and China in response to various political issues and heightened uncertainty regarding China-Taiwan relations could significantly adversely impact the availability of parts and components to us, and, correspondingly, our ability to produce our components at targeted levels, although we did not experience such negative effects during the first three quarters of 2023. We are continuously monitoring the situation of our supply chain and evaluating our procurement strategy and supply chain to reduce any negative impact on our business, financial condition, and results of operations. In response to supply chain constraints, in 2022 we increased certain raw materials inventory, partly to limit the potential impact of supply chain issues of raw materials in the near term. During the first three quarters of 2023, we continued to monitor and optimize our inventory levels. As of September 30, 2023, other than increased interest expense, we did not experience material adverse effects on our financial results from the events and trends discussed above. Restricted Cash Restricted cash is included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the condensed consolidated statements of cash flows. Restricted cash is restricted as to withdrawal or use. Prior to the termination of the Tax Receivable Agreement (“TRA”), tax distributions paid by Shoals Parent to the Company were restricted under the limited liability company agreement (“LLC Agreement”) for future payments under the TRA and totaled $20.4 million as of September 30, 2022. There was no restricted cash as of September 30, 2023. September 30, 2023 September 30, 2022 Cash and cash equivalents $ 9,224 $ 11,202 Restricted cash included in other current asset — 3,583 Restricted cash included in other assets — 16,831 Total cash, cash equivalents and restricted cash $ 9,224 $ 31,616 Customer Concentrations The Company had the following revenue concentrations representing approximately 10% or more of revenue for the nine months ended September 30, 2023 and 2022 and related accounts receivable concentrations as of September 30, 2023 and December 31, 2022: 2023 2022 Revenue % Accounts Revenue % Accounts Customer A 34.1 % 41.3 % 9.0 % 8.4 % Fair Value Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company follows a fair value hierarchy which requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Three levels of inputs may be used to measure fair value, as follows: • Level 1 – Quoted prices in active markets for identical assets or liabilities. • Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 – Unobservable inputs that are supported by little or no market activity that are significant to the fair value of the assets or liabilities. The fair values of the Company’s cash and cash equivalents, accounts receivable, and accounts payable approximate their carrying values due to their short maturities. The carrying value of the Company’s long-term debt approximates fair value and is considered level 2, as it is based on current market rates at which the Company could borrow funds with similar terms. Recent Accounting Pronouncements Adopted In October 2021, the FASB issued Accounting Standard Update (“ASU”) No. 2021-08, Business Combinations (Topic 805) Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . This ASU requires that contract assets and contract liabilities acquired in a business combination be recognized and measured in accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. This guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within that fiscal year. The adoption of this standard on January 1, 2023 did not have an impact on the Company’s condensed consolidated financial statements. Not Yet Adopted Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed consolidated financial statements.

Accounts Receivable

Accounts Receivable	9 Months Ended
	Sep. 30, 2023
Receivables [Abstract]
Accounts Receivable	Accounts Receivable Accounts receivable, net consists of the following (in thousands): September 30, 2023 December 31, 2022 Accounts receivable $ 109,645 $ 51,061 Less: allowance for credit losses (759) (486) Accounts receivable, net $ 108,886 $ 50,575

Inventory

Inventory	9 Months Ended
	Sep. 30, 2023
Inventory Disclosure [Abstract]
Inventory	Inventory Inventory, net consists of the following (in thousands): September 30, 2023 December 31, 2022 Raw materials $ 64,105 $ 73,970 Work in process 2,699 1,023 Finished goods 592 785 Allowance for obsolete or slow-moving inventory (6,435) (2,924) Inventory, net $ 60,961 $ 72,854

Property, Plant and Equipment

Property, Plant and Equipment	9 Months Ended
	Sep. 30, 2023
Property, Plant and Equipment [Abstract]
Property, Plant and Equipment	Property, Plant and Equipment Property, plant, and equipment, net consists of the following (in thousands): Estimated Useful Lives (Years) September 30, 2023 December 31, 2022 Land N/A $ 840 $ 840 Building and land improvements 5-40 11,975 9,031 Machinery and equipment 3-5 16,379 12,371 Furniture and fixtures 3-7 2,336 1,787 Vehicles 5 125 125 31,655 24,154 Less: accumulated depreciation (8,866) (7,284) Property, plant and equipment, net $ 22,789 $ 16,870 Depreciation expense for the three months ended September 30, 2023 and 2022 was $0.7 million and $0.5 million, respectively. During the three months ended September 30, 2023 and 2022, $0.5 million and $0.4 million, respectively, of depreciation expense was allocated to cost of revenue and $0.2 million and $0.1 million, respectively, of depreciation expense was allocated to operating expenses. Depreciation expense for the nine months ended September 30, 2023 and 2022 was $1.7 million and $1.4 million, respectively. During the nine months ended September 30, 2023 and 2022, $1.2 million and $1.1 million, respectively, of depreciation expense was allocated to cost of revenue and $0.5 million and $0.3 million, respectively, of depreciation expense was allocated to operating expenses.

Goodwill and Other Intangible A

Goodwill and Other Intangible Assets	9 Months Ended
	Sep. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill and Other Intangible Assets	Goodwill and Other Intangible Assets Goodwill Goodwill relates to the acquisition of Shoals and ConnectPV, Inc. There were no changes in the carrying amount of goodwill during the nine months ended September 30, 2023. Goodwill totaled $69.9 million as of September 30, 2023 and December 31, 2022. Other Intangible Assets Other intangible assets, net consists of the following (in thousands): Estimated Useful Lives (Years) September 30, 2023 December 31, 2022 Amortizable: Costs: Customer relationships 13 $ 53,100 $ 53,100 Developed technology 13 34,600 34,600 Trade names 13 11,900 11,900 Backlog 1 600 600 Noncompete agreements 5 2,000 2,000 Total amortizable intangibles 102,200 102,200 Accumulated amortization: Customer relationships 26,124 22,925 Developed technology 16,856 14,860 Trade names 6,056 5,230 Backlog 600 600 Noncompete agreements 2,000 2,000 Total accumulated amortization 51,636 45,615 Total other intangible assets, net $ 50,564 $ 56,585 Amortization expense related to intangible assets amounted to $2.0 million and $2.1 million for the three months ended September 30, 2023 and 2022, respectively, and $6.0 million and $6.6 million for the nine months ended September 30, 2023 and 2022, respectively.

Accrued Expenses and Other

Accrued Expenses and Other	9 Months Ended
	Sep. 30, 2023
Payables and Accruals [Abstract]
Accrued Expenses and Other	Accrued Expenses and Other Accrued expenses and other consists of the following (in thousands): September 30, 2023 December 31, 2022 Accrued compensation $ 9,033 $ 4,917 Accrued interest 7,095 7,226 Other accrued expenses 5,388 5,179 Total accrued expenses and other $ 21,516 $ 17,322

Warranty Liability

Warranty Liability	9 Months Ended
	Sep. 30, 2023
Guarantees and Product Warranties [Abstract]
Warranty Liability	Warranty Liability General Warranty The Company offers an assurance type warranty for its products against manufacturer defects which does not contain a service element. For these assurance type warranties, a provision for estimated future costs related to warranty expense is recorded when they are probable and reasonably estimable. As of September 30, 2023 and December 31, 2022 our estimated general warranty liability was approximately zero and $0.1 million, respectively. The Company recorded total warranty expense related to general warranty matters of $0.2 million and $0.6 million for the three and nine months ended September 30, 2023, respectively, and zero for the three and nine months ended September 30, 2022. Wire Insulation Shrinkback Warranty The Company has been notified by certain customers that a subset of wire harnesses used in its EBOS solutions is presenting unacceptable levels of pull back of wire insulation at connection points (“wire insulation shrinkback”). Based upon the Company’s ongoing assessment, the Company currently believes the wire insulation shrinkback is related to defective red wire manufactured by Prysmian. Based on the Company’s continued analysis of information available as of the date of this Quarterly Report, which includes better visibility into the scope of affected sites and potential solutions, including identification, repair and replacement of harnesses, the Company has determined that a potential range of loss was both probable and reasonably estimable and has updated its estimate of potential losses from the estimate provided in the previous quarter. However, as no amount within the current range of loss appears to be a better estimate than any other amount, the Company has recorded a warranty liability and related expense representing the low end of the range of potential loss of $59.7 million. The high-end of the range of potential loss is $184.9 million, which is $125.2 million higher than the amount we recorded. As of September 30, 2023, our recorded warranty liability related to this matter was $56.6 million. The estimated range is based on several assumptions, and as additional information becomes available, the Company may increase or decrease its estimated warranty liability from its current estimate, and such increase or decrease may be material. The Company does not maintain insurance for product warranty and has commenced a lawsuit against Prysmian, as discussed in more detail under Wire Insulation Shrinkback Litigation section of Note 14 - Commitments and Contingencies. Because the lawsuit against Prysmian is ongoing, potential recovery from Prysmian is not considered probable as defined in ASC 450, and has not been considered in our estimate of the warranty liability as of September 30, 2023. The Company recorded total warranty expense related to this matter of $50.2 million and $59.1 million for the three and nine months ended September 30, 2023, respectively, and zero for the three and nine months ended September 30, 2022. Warranty liability, which includes both general warranty and wire insulation shrinkback warranty, consists of the following (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Warranty liability, beginning of period $ 9,634 $ 60 $ 560 $ 60 Warranty expense 50,421 — 59,723 — Payments (3,441) — (3,669) — Warranty liability, end of period 56,614 60 56,614 60 Less: current portion 17,254 60 17,254 60 Warranty liability, less current portion $ 39,360 $ — $ 39,360 $ —

Long-Term Debt

Long-Term Debt	9 Months Ended
	Sep. 30, 2023
Debt Disclosure [Abstract]
Long-Term Debt	Long-Term Debt Long-term debt consists of the following (in thousands): September 30, 2023 December 31, 2022 Term Loan Facility $ 193,750 $ 195,250 Revolving Credit Facility — 48,000 Less: deferred financing costs (3,370) (4,187) Total debt, net of deferred financing costs 190,380 239,063 Less: current portion (2,000) (2,000) Long-term debt, net current portion $ 188,380 $ 237,063 Senior Secured Credit Agreement Holdings has a senior secured credit agreement (as amended, the “Senior Secured Credit Agreement”), consisting of (i) a $350.0 million senior secured six-year term loan facility (the “Term Loan Facility”) and (ii) a $150.0 million revolving credit facility (the “Revolving Credit Facility”). As of September 30, 2023, interest rates on the Term Loan Facility were SOFR plus 5.75%, or 11.27%, and on the Revolving Credit Facility, SOFR plus 3.25%. As of September 30, 2023, there were $193.8 million outstanding under the Term Loan Facility, no borrowings outstanding under the Revolving Credit Facility, letters of credit of $0.6 million, and $149.4 million of availability under the Revolving Credit Facility. The Senior Secured Credit Agreement contains affirmative and negative covenants, including covenants that restrict the Company’s incurrence of indebtedness, incurrence of liens, dispositions, investments, acquisitions, restricted payments, and transactions with affiliates. The Senior Secured Credit Agreement also includes customary events of default, including the occurrence of a change of control. The Revolving Credit Facility also includes a consolidated leverage ratio financial covenant that is tested on the last day of each fiscal quarter. To remain in compliance with the financial covenant, Shoals Intermediate Holdings’ consolidated leverage ratio, as of the last day of any quarter, cannot be greater than 6.50 to 1.00. As of September 30, 2023, the Company was in compliance with all the required covenants.

Earnings (Loss) per Share ("EPS

Earnings (Loss) per Share ("EPS")	9 Months Ended
	Sep. 30, 2023
Earnings Per Share [Abstract]
Earnings (Loss) per Share ("EPS")	Earnings (Loss) per Share ("EPS") Basic EPS of Class A common stock is computed by dividing net income (loss) attributable to the Company by the weighted average number of shares of Class A common stock outstanding during the period. Diluted EPS of Class A common stock is computed similarly to basic EPS except the weighted average shares outstanding are increased to include additional shares from the exchange of Class B common stock under the if-converted method and the assumed exercise of any common stock equivalents using the treasury stock method, if dilutive. The Company’s restricted and performance stock units are considered common stock equivalents for this purpose. Basic and diluted EPS of Class A common stock have been computed as follows (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Numerator: Net income (loss) attributable to Shoals Technologies Group, Inc. - basic $ (9,828) $ 7,958 $ 23,392 $ 15,000 Reallocation of net income attributable to non-controlling interests from the assumed exchange of Class B common stock — — — — Net income (loss) attributable to Shoals Technologies Group, Inc. - diluted $ (9,828) $ 7,958 $ 23,392 $ 15,000 Denominator: Weighted average shares of Class A common stock outstanding - basic 169,965 112,975 162,173 112,561 Effect of dilutive securities: Restricted / performance stock units — 609 438 255 Class B common stock — — — — Weighted average shares of Class A common stock outstanding - diluted 169,965 113,584 162,611 112,816 Earnings (loss) per share of Class A common stock - basic $ (0.06) $ 0.07 $ 0.14 $ 0.13 Earnings (loss) per share of Class A common stock - diluted $ (0.06) $ 0.07 $ 0.14 $ 0.13 For the nine months ended September 30, 2023 and three and nine months ended September 30, 2022, the reallocation of net income attributable to non-controlling interests from the assumed exchange of Class B common stock has been excluded along with the dilutive effect of Class B common stock to the weighted average shares of Class A common stock outstanding – dilutive, as they were antidilutive. For the three months ended September 30, 2023 there were no shares of Class B common stock outstanding and the assumed exercise of any restricted and performance stock units has been excluded as they were antidilutive .

Equity-Based Compensation

Equity-Based Compensation	9 Months Ended
	Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]
Equity-Based Compensation	Equity-Based Compensation2021 Long-term Incentive Plan The Shoals Technologies Group, Inc. 2021 Long-Term incentive Plan (the “2021 Incentive Plan”) became effective on January 26, 2021. The 2021 Incentive Plan authorized 8,768,124 new shares, subject to adjustment pursuant to the 2021 Incentive Plan. Restricted Stock Units During the nine months ended September 30, 2023, the Company granted 392,672 restricted stock units (“RSUs") to certain employees, officers and directors of the Company. The RSUs have grant date fair values ranging from $18.12 to $28.26 per unit and generally vest ratably over 3 years, except director grants which vest over 1 year. Activity under the 2021 Incentive Plan for RSUs was as follows: Nine Months Ended Restricted Weighted Average Price Outstanding, December 31, 2022 1,736,975 $ 22.34 Granted 392,672 $ 25.25 Vested (823,736) $ 20.99 Forfeited (74,178) $ 22.88 Outstanding, September 30, 2023 1,231,733 $ 24.14 Performance Stock Units During the nine months ended September 30, 2023, the Company granted an aggregate of 205,585 Performance Stock Units ("PSUs") to certain executives. The PSUs cliff vest after 3 years upon meeting certain revenue and gross profit percentage targets and contain certain modifiers which could increase or decrease the ultimate number of shares of Class A common stock issued to the executives. The PSUs were valued using the market value of the Class A common stock on the grant date ranging from $26.55 to $28.26. Activity under the 2021 Incentive Plan for PSUs was as follows: Nine Months Ended Performance Weighted Average Price Outstanding, December 31, 2022 256,305 $ 11.89 Granted 205,585 $ 27.75 Vested (67,101) $ 11.86 Forfeited (101,323) $ 13.08 Outstanding, September 30, 2023 293,466 $ 22.59 The Company recognized equity-based compensation of $5.1 million and $4.0 million for the three months ended September 30, 2023 and 2022, respectively, and $17.1 million and $11.9 million for the nine months ended September 30, 2023 and 2022, respectively. As of September 30, 2023, the Company had $27.7 million of unrecognized compensation costs which is expected to be recognized over a period of 1.7 years.

Stockholders' Equity

Stockholders' Equity	9 Months Ended
	Sep. 30, 2023
Equity [Abstract]
Stockholders' Equity	Stockholders’ Equity Shoals Parent Ownership Prior to July 1, 2023, the Company was the sole managing member of Shoals Parent and had the sole voting power in, and controlled the management of Shoals Parent. As of September 30, 2023, the Company owned 100% of Shoals Parent. Prior to the Company owning 100% of Shoals Parent, the remaining interest in Shoals Parent, was held by direct or indirect holders of LLC Interests and our Class B common stock, including the Founder and certain current and former executive officers, employees and their respective permitted transferees (collectively, the “Continuing Equity Owners”), who could exchange at each of their respective options, in whole or in part, from time to time, their LLC Interests (along with an equal number of shares of Class B common stock (which shares were then immediately canceled)) for cash or newly issued shares of our Class A common stock. Accordingly, the Company consolidated the financial results of Shoals Parent and reported non-controlling interests in its condensed consolidated financial statements. In accordance with the LLC Agreement, Shoals Parent made cash distributions to its members in an amount sufficient to cover the members’ tax liabilities, if any, with respect to each member’s share of Shoals Parent taxable earnings. The payment of these cash distributions by Shoals Parent to Continuing Equity Owners was recorded as distributions to holders of LLC Interests in the accompanying condensed consolidated statements of stockholders’ equity (deficit) and condensed consolidated statements of cash flows. Common Stock Economic and Voting Rights Holders of Class A common stock and Class B common stock (if any shares are outstanding) are entitled to one vote per share and, except as otherwise required, vote together as a single class on all matters on which stockholders generally are entitled to vote. Holders of Class B common stock (if any shares are outstanding) are not entitled to receive dividends and will not be entitled to receive any distributions upon the liquidation, dissolution or winding up of the Company. Shares of Class B common stock were only issuable to the extent necessary to maintain the one-to-one ratio between the number of LLC Interests held by the Continuing Equity Owners and the number of shares of Class B common stock held by the Continuing Equity Owners. As of September 30, 2023, there were no shares of Class B common stock nor LLC Interests outstanding, and no shares of Class B common stock are currently issuable. Shares of Class B common stock were transferable only together with an equal number of LLC Interests.

Non-Controlling Interests

Non-Controlling Interests	9 Months Ended
	Sep. 30, 2023
Noncontrolling Interest [Abstract]
Non-Controlling Interests	Non-Controlling InterestsEffective July 1, 2023, the Company owned 100% of Shoals Parent. The following table summarizes the effects of the changes in ownership in Shoals Parent on equity: Nine months ended September 30, 2023 2022 Net income attributable to non-controlling interests $ 2,687 $ 9,711 Transfers to non-controlling interests: Increase as a result of activity under equity-based compensation plan 687 4,257 Decrease from tax distributions to non-controlling interests (2,628) (7,762) Reallocation of non-controlling interests (10,361) 107 Change from net income attributable to non-controlling interests and transfers to non-controlling interests $ (9,615) $ 6,313 Issuance of Additional LLC Interests Under the LLC Agreement, the Company was required to cause Shoals Parent to issue additional LLC Interests to the Company when the Company issued additional shares of Class A common stock. Other than as it relates to the issuance of Class A common stock in connection with an equity incentive program, the Company contributed to Shoals Parent net proceeds and property, if any, received by the Company with respect to the issuance of such additional shares of Class A common stock. The Company caused Shoals Parent to issue a number of LLC Interests equal to the number of shares of Class A common stock issued such that, at all times, the number of LLC Interests held by the Company was equal to the number of outstanding shares of Class A common stock. During the nine months ended September 30, 2023 and 2022, the Company caused Shoals Parent to issue to the Company a total of 601,518 and 480,116 LLC Interests, respectively, for the vesting of awards granted under the 2021 Incentive Plan. On July 1, 2023, the Company contributed 100% of its LLC Interests in Shoals Parent LLC to its wholly-owned subsidiary, Shoals Intermediate. Following the contribution, Shoals Parent LLC became a disregarded single member limited liability company, eliminating the Up-C structure. Distributions for Taxes As a limited liability company (treated as a partnership for income tax purposes), Shoals Parent does not incur significant federal, state or local income taxes, as these taxes are primarily the obligations of its members. As authorized by the LLC Agreement, Shoals Parent was required to distribute cash, to the extent that Shoals Parent had cash available, on a pro rata basis, to its members to the extent necessary to cover the members’ tax liabilities, if any, with respect to each member’s share of Shoals Parent taxable earnings. Shoals Parent made such tax distributions to its members quarterly, based on the single highest marginal tax rate applicable to its members applied to projected year-to-date taxable income. During the nine months ended September 30, 2023 and 2022, tax distributions to non-controlling LLC Interests holders were $2.6 million and $7.8 million, respectively.

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Litigation The Company is from time to time subject to legal proceedings and claims, which arise in the normal course of its business. In the opinion of management and legal counsel, except as disclosed below, the amount of losses or gains that may be sustained, if any, would not have a material effect on the financial position, results of operations or cash flows of the Company. Intellectual Property Litigation On May 4, 2023, the Company filed a patent infringement complaint with the U.S. International Trade Commission (“ITC”) against Hikam America, Inc., a corporation based in Chula, California, and its related foreign entities (together, “Hikam”), and Voltage LLC, a limited liability company based in Chapel Hill, North Carolina, and its related foreign entities (together, “Voltage”). The complaint primarily requests that the ITC (i) investigate unlawful imports of certain photovoltaic connectors and components that the Company alleges infringe on two valid and enforceable patents owned by the Company related to improved connectors for solar panel arrays and (ii) issue a limited exclusion order and a cease and desist order against the Hikam respondents and the Voltage respondents to bar them from importing, marketing, distributing, selling, offering for sale, licensing, advertising, transferring, or otherwise using the infringing photovoltaic connectors and components in and into the United States. On July 18, 2023, the Company filed an amended complaint with the ITC, adding allegations that the Voltage respondents also infringe a third, recently-issued patent owned by the Company. Also on May 4, 2023, the Company filed complaints against the Hikam defendants in the U.S. District Court for the Southern District of California, and against the Voltage defendants in the U.S. District Court for the Middle District of North Carolina on the same subject matter. On June 28, 2023, the Company filed an amended complaint in the U.S. District Court for the Middle District of North Carolina against the Voltage respondents alleging that they also infringe on a third, recently-issued patent owned by the Company. These complaints seek injunctive relief and damages for reasonable royalty and lost profits. The District Court actions have been stayed pending the final disposition of the ITC investigation. An evidentiary hearing in the ITC investigation has been scheduled for March 18 through 22, 2024. The ITC has set a target date for completion of the investigation of November 12, 2024. The Company intends to vigorously pursue these actions. However, at this stage, the Company is unable to predict the outcome or impact on its business and financial results. The Company is accounting for this matter as a gain contingency, and will record any such gain in future periods if and when the contingency is resolved, in accordance with ASC 450 Contingencies . Wire Insulation Shrinkback Litigation On October 31, 2023, the Company filed a complaint in the U.S. District Court for the Middle District of Tennessee, Nashville Division, against Prysmian Cables and Systems USA, LLC (“Prysmian”). The complaint alleges damages caused by defective red wire Prysmian sold the Company between 2020 through approximately 2022. The defective red wire has presented unacceptable levels of wire insulation shrinkback. The complaint includes, among other causes of action, product liability, breach of contract, breach of warranty, indemnity, and negligence claims. The Company seeks compensatory and punitive damages, recovery of all costs and expenses incurred by the Company in connection with the identification, repair and replacement of the defective wire, and other legal and equitable relief. The Company intends to vigorously pursue this action, and as the Company continues to assess this matter, it may, from time to time, amend, update or supplement the complaint to, among other things, increase the damages sought for various purposes, including in accordance with increases to the Company’s estimated warranty liability and related expenses related to this matter. At this stage, the Company is unable to predict the outcome of this litigation or the impact on its business and financial results. The Company is accounting for this matter as a gain contingency, and will record any such gain in future periods if and when the contingency is resolved, in accordance with ASC 450 Contingencies . Surety Bonds

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2023
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes In August 2022, the U.S. President signed into law the Inflation Reduction Act of 2022 (the “IRA”), which revised U.S. tax law by, among other things, including a new corporate alternative minimum tax (the “CAMT”) of 15% on certain large corporations, imposing a 1% excise tax on stock buybacks, and providing incentives to address climate change, including the introduction of advanced manufacturing production tax credits. The provisions of the IRA are generally effective for tax years beginning after 2022. Given the complexities of the IRA, including recently issued guidance and regulations from the Internal Revenue Service and U.S. Treasury Department, we will continue to monitor these developments and evaluate the potential future impact to our results of operations. The Company is taxed as a subchapter C corporation and is subject to federal and state income taxes. The Company’s sole material asset is Shoals Parent, which is a limited liability company that was taxed as a partnership for U.S. federal and certain state and local income tax purposes. Shoals Parent’s net taxable income and related tax credits, if any, were passed through to its members and included in the member’s tax returns. On July 1, 2023, the Company contributed 100% of its LLC Interests in Shoals Parent LLC to its wholly-owned subsidiary, Shoals Intermediate. Following the contribution, Shoals Parent LLC became a disregarded single member limited liability company, eliminating the Up-C structure. The contribution resulted in a $5.1 million income tax benefit during the nine months ended September 30, 2023 and a corresponding increase to the deferred tax asset as of September 30, 2023. Shoals Parent is subject to and reports an entity level tax in various states. The income tax burden on the earnings taxed to the non-controlling interest holders was not reported by the Company in its condensed consolidated financial statements under U.S. GAAP. As a result, the Company’s effective tax rate can differ materially from the statutory rate, depending on the ownership percentage of the non-controlling interests. The Company’s effective income tax rate for the nine months ended September 30, 2023 and 2022, was 9.3% and 18.2%, respectively. In calculating the provision for interim income taxes, in accordance with ASC Topic 740, an estimated annual effective tax rate is applied to year-to-date ordinary income. At the end of each interim period, the Company estimates the effective tax rate expected to be applicable for the full fiscal year. For annual periods, the Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that the deferred tax assets will be realized. Deferred tax assets and liabilities are calculated by applying existing tax laws and the rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the year of the enacted rate change. The Company accounts for uncertainty in income taxes using a recognition and measurement threshold for tax positions taken or expected to be taken in a tax return, which are subject to examination by federal and state taxing authorities. The tax benefit from an uncertain tax position is recognized when it is more likely than not that the position will be sustained upon examination by taxing authorities based on technical merits of the position. The amount of the tax benefit recognized is the largest amount of the benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The effective tax rate and the tax basis of assets and liabilities reflect management’s estimates of the ultimate outcome of various tax uncertainties. The Company recognizes penalties and interest related to uncertain tax positions within the provision (benefit) for income taxes line in the accompanying condensed consolidated statements of operations. As of the quarter ended September 30, 2023, the Company has recorded $1.0 million of gross unrecognized tax benefits inclusive of interest and penalties, all of which, if recognized, would favorably impact the effective tax rate. The Company recognizes penalties and interest related to uncertain tax positions within the income tax expense line in the accompanying condensed consolidated statements of operations. The Company files U.S. federal and certain state income tax returns. The income tax returns of the Company are subject to examination by U.S. federal and state taxing authorities for various time periods, depending on those jurisdictions’ rules, generally after the income tax returns are filed.

Revenue Recognition

Revenue Recognition	9 Months Ended
	Sep. 30, 2023
Revenue from Contract with Customer [Abstract]
Revenue Recognition	Revenue Recognition Disaggregation of revenue Based on Topic 606 provisions, the Company disaggregates its revenue from contracts with customers based on product type. Revenue by product type is disaggregated between system solutions and components. System solutions are contracts under which the Company provides multiple products typically in connection with the design and specification of an entire EBOS system. Components represents sales of individual components. The following table presents the Company’s revenue disaggregated by product type (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 System solutions $ 99,461 $ 69,486 $ 292,822 $ 173,136 Components 34,748 21,337 65,681 59,153 Total revenue $ 134,209 $ 90,823 $ 358,503 $ 232,289 Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), retainage (contract assets), and deferred revenue (contract liabilities) on the condensed consolidated balance sheets, recorded on a contract-by-contract basis at the end of each reporting period. The Company’s contract balances consist of the following (in thousands): (*) September 30, 2023 December 31, 2022 Billed accounts receivable Accounts receivable, net $ 104,138 $ 48,571 Retainage Accounts receivable, net $ 4,748 $ 2,004 Unbilled receivables Unbilled receivables $ 28,506 $ 16,713 Deferred revenue Deferred revenue $ 27,025 $ 23,259 (*) Location on the condensed consolidated balance sheets. The majority of the Company’s contract amounts are billed as work progresses in accordance with agreed-upon contractual terms, which generally coincide with the shipment of one or more phases of the project. Billing sometimes occurs subsequent to revenue recognition, resulting in unbilled receivables. The changes in unbilled receivables relate to fluctuations in the timing of billings for the Company’s revenue recognized over time. As of December 31, 2021, billed accounts receivable and unbilled receivables were $26.7 million and $13.5 million, respectively. Certain contracts contain retainage provisions. Retainage represents a contract asset for the portion of the contract price earned by the Company for work performed but held for payment by the customer as a form of security until the Company obtains specified milestones. The Company typically bills retainage amounts as work is performed. Retainage provisions are not considered a significant financing component because they are intended to protect the customer in the event that some or all of the obligations under the contract are not completed. The changes in retainage relate to fluctuations in the timing of retainage billings and achievement of specified milestones. As of December 31, 2021, retainage was $4.8 million. The Company also receives deferred revenue in the form of customer deposits. The customer deposits are short term as the related performance obligations are typically fulfilled within 12 months. The changes in deferred revenue relate to fluctuations in the timing of customer deposits and completion of performance obligations. During the three and nine months ended September 30, 2023, $2.3 million and $20.8 million, respectively, of deferred revenue recorded as of December 31, 2022 was recognized in revenue. As of December 31, 2021, deferred revenue was $1.8 million and during the three and nine months ended September 30, 2022, $0.4 million and $1.7 million, respectively, of deferred revenue recorded as of December 31, 2021, was recognized in revenue.

Related Party Transactions

Related Party Transactions	9 Months Ended
	Sep. 30, 2023
Related Party Transactions [Abstract]
Related Party Transactions	Related Party TransactionsAs part of the LLC Agreement we were required to pay tax distributions to the non-controlling interest holders, some of which were considered related parties at the time of distribution. See Note 13 - Non-Controlling Interests.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2023
Accounting Policies [Abstract]
Basis of Accounting and Presentation	Basis of Accounting and PresentationThe condensed consolidated financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Principles of Consolidation	Principles of ConsolidationThe condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Reclassifications	Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation.
Non-Controlling Interests	Non-Controlling Interests The non-controlling interests on the condensed consolidated statements of operations represented a portion of earnings or loss attributable to the economic interests in the Company’s subsidiary, Shoals Parent, formerly held by the Continuing Equity Owners (as defined in Note 12 - Stockholders’ Equity). Non-controlling interests on the condensed consolidated balance sheets represented the portion of net assets of the Company attributable to the Continuing Equity Owners, based on the portion of the LLC Interests owned by such unit holders. As of September 30, 2023, the Company, along with a wholly-owned subsidiary, Shoals Intermediate, owned 100% of Shoals Parent.
Use of Estimates	Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates. Significant estimates include revenue recognition, allowance for credit losses, useful lives of property, plant and equipment and other intangible assets, impairment of long-lived assets, allowance for obsolete or slow moving inventory, valuation allowance on deferred tax assets, equity-based compensation expense and warranty liability.
Restricted Cash	Restricted CashRestricted cash is included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the condensed consolidated statements of cash flows. Restricted cash is restricted as to withdrawal or use.
Fair Value	Fair Value Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company follows a fair value hierarchy which requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Three levels of inputs may be used to measure fair value, as follows: • Level 1 – Quoted prices in active markets for identical assets or liabilities. • Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 – Unobservable inputs that are supported by little or no market activity that are significant to the fair value of the assets or liabilities. The fair values of the Company’s cash and cash equivalents, accounts receivable, and accounts payable approximate their carrying values due to their short maturities. The carrying value of the Company’s long-term debt approximates fair value and is considered level 2, as it is based on current market rates at which the Company could borrow funds with similar terms.
Recent Accounting Pronouncements	Recent Accounting Pronouncements Adopted In October 2021, the FASB issued Accounting Standard Update (“ASU”) No. 2021-08, Business Combinations (Topic 805) Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . This ASU requires that contract assets and contract liabilities acquired in a business combination be recognized and measured in accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. This guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within that fiscal year. The adoption of this standard on January 1, 2023 did not have an impact on the Company’s condensed consolidated financial statements. Not Yet Adopted Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed consolidated financial statements.

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 30, 2023
Accounting Policies [Abstract]
Schedule of Cash and Cash Equivalents	September 30, 2023 September 30, 2022 Cash and cash equivalents $ 9,224 $ 11,202 Restricted cash included in other current asset — 3,583 Restricted cash included in other assets — 16,831 Total cash, cash equivalents and restricted cash $ 9,224 $ 31,616
Schedule of Restricted Cash	September 30, 2023 September 30, 2022 Cash and cash equivalents $ 9,224 $ 11,202 Restricted cash included in other current asset — 3,583 Restricted cash included in other assets — 16,831 Total cash, cash equivalents and restricted cash $ 9,224 $ 31,616
Schedule of Revenue and Accounts Receivable Concentration Risks	The Company had the following revenue concentrations representing approximately 10% or more of revenue for the nine months ended September 30, 2023 and 2022 and related accounts receivable concentrations as of September 30, 2023 and December 31, 2022: 2023 2022 Revenue % Accounts Revenue % Accounts Customer A 34.1 % 41.3 % 9.0 % 8.4 %

Accounts Receivable (Tables)

Accounts Receivable (Tables)	9 Months Ended
	Sep. 30, 2023
Receivables [Abstract]
Schedule of Accounts Receivable	Accounts receivable, net consists of the following (in thousands): September 30, 2023 December 31, 2022 Accounts receivable $ 109,645 $ 51,061 Less: allowance for credit losses (759) (486) Accounts receivable, net $ 108,886 $ 50,575

Inventory (Tables)

Inventory (Tables)	9 Months Ended
	Sep. 30, 2023
Inventory Disclosure [Abstract]
Schedule of Inventory	Inventory, net consists of the following (in thousands): September 30, 2023 December 31, 2022 Raw materials $ 64,105 $ 73,970 Work in process 2,699 1,023 Finished goods 592 785 Allowance for obsolete or slow-moving inventory (6,435) (2,924) Inventory, net $ 60,961 $ 72,854

Property, Plant and Equipment (

Property, Plant and Equipment (Tables)	9 Months Ended
	Sep. 30, 2023
Property, Plant and Equipment [Abstract]
Schedule of Property, Plant, and Equipment, Net	Property, plant, and equipment, net consists of the following (in thousands): Estimated Useful Lives (Years) September 30, 2023 December 31, 2022 Land N/A $ 840 $ 840 Building and land improvements 5-40 11,975 9,031 Machinery and equipment 3-5 16,379 12,371 Furniture and fixtures 3-7 2,336 1,787 Vehicles 5 125 125 31,655 24,154 Less: accumulated depreciation (8,866) (7,284) Property, plant and equipment, net $ 22,789 $ 16,870

Goodwill and Other Intangible_2

Goodwill and Other Intangible Assets (Tables)	9 Months Ended
	Sep. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Other Intangible Assets	Other intangible assets, net consists of the following (in thousands): Estimated Useful Lives (Years) September 30, 2023 December 31, 2022 Amortizable: Costs: Customer relationships 13 $ 53,100 $ 53,100 Developed technology 13 34,600 34,600 Trade names 13 11,900 11,900 Backlog 1 600 600 Noncompete agreements 5 2,000 2,000 Total amortizable intangibles 102,200 102,200 Accumulated amortization: Customer relationships 26,124 22,925 Developed technology 16,856 14,860 Trade names 6,056 5,230 Backlog 600 600 Noncompete agreements 2,000 2,000 Total accumulated amortization 51,636 45,615 Total other intangible assets, net $ 50,564 $ 56,585

Accrued Expenses and Other (Tab

Accrued Expenses and Other (Tables)	9 Months Ended
	Sep. 30, 2023
Payables and Accruals [Abstract]
Schedule of Accrued Expenses and Other Consists	Accrued expenses and other consists of the following (in thousands): September 30, 2023 December 31, 2022 Accrued compensation $ 9,033 $ 4,917 Accrued interest 7,095 7,226 Other accrued expenses 5,388 5,179 Total accrued expenses and other $ 21,516 $ 17,322

Warranty Liability (Tables)

Warranty Liability (Tables)	9 Months Ended
	Sep. 30, 2023
Guarantees and Product Warranties [Abstract]
Schedule of Warranty Liability	Warranty liability, which includes both general warranty and wire insulation shrinkback warranty, consists of the following (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Warranty liability, beginning of period $ 9,634 $ 60 $ 560 $ 60 Warranty expense 50,421 — 59,723 — Payments (3,441) — (3,669) — Warranty liability, end of period 56,614 60 56,614 60 Less: current portion 17,254 60 17,254 60 Warranty liability, less current portion $ 39,360 $ — $ 39,360 $ —

Long-Term Debt (Tables)

Long-Term Debt (Tables)	9 Months Ended
	Sep. 30, 2023
Debt Disclosure [Abstract]
Schedule of Long-term Debt	Long-term debt consists of the following (in thousands): September 30, 2023 December 31, 2022 Term Loan Facility $ 193,750 $ 195,250 Revolving Credit Facility — 48,000 Less: deferred financing costs (3,370) (4,187) Total debt, net of deferred financing costs 190,380 239,063 Less: current portion (2,000) (2,000) Long-term debt, net current portion $ 188,380 $ 237,063

Earnings (Loss) per Share ("E_2

Earnings (Loss) per Share ("EPS") (Tables)	9 Months Ended
	Sep. 30, 2023
Earnings Per Share [Abstract]
Schedule of Basic and Diluted Earnings Per Share	Basic and diluted EPS of Class A common stock have been computed as follows (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Numerator: Net income (loss) attributable to Shoals Technologies Group, Inc. - basic $ (9,828) $ 7,958 $ 23,392 $ 15,000 Reallocation of net income attributable to non-controlling interests from the assumed exchange of Class B common stock — — — — Net income (loss) attributable to Shoals Technologies Group, Inc. - diluted $ (9,828) $ 7,958 $ 23,392 $ 15,000 Denominator: Weighted average shares of Class A common stock outstanding - basic 169,965 112,975 162,173 112,561 Effect of dilutive securities: Restricted / performance stock units — 609 438 255 Class B common stock — — — — Weighted average shares of Class A common stock outstanding - diluted 169,965 113,584 162,611 112,816 Earnings (loss) per share of Class A common stock - basic $ (0.06) $ 0.07 $ 0.14 $ 0.13 Earnings (loss) per share of Class A common stock - diluted $ (0.06) $ 0.07 $ 0.14 $ 0.13

Equity-Based Compensation (Tabl

Equity-Based Compensation (Tables)	9 Months Ended
	Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]
Schedule of RSU And PSU Activity	Activity under the 2021 Incentive Plan for RSUs was as follows: Nine Months Ended Restricted Weighted Average Price Outstanding, December 31, 2022 1,736,975 $ 22.34 Granted 392,672 $ 25.25 Vested (823,736) $ 20.99 Forfeited (74,178) $ 22.88 Outstanding, September 30, 2023 1,231,733 $ 24.14 Activity under the 2021 Incentive Plan for PSUs was as follows: Nine Months Ended Performance Weighted Average Price Outstanding, December 31, 2022 256,305 $ 11.89 Granted 205,585 $ 27.75 Vested (67,101) $ 11.86 Forfeited (101,323) $ 13.08 Outstanding, September 30, 2023 293,466 $ 22.59

Non-Controlling Interests (Tabl

Non-Controlling Interests (Tables)	9 Months Ended
	Sep. 30, 2023
Noncontrolling Interest [Abstract]
Schedule of Effects of Changes in Ownership	The following table summarizes the effects of the changes in ownership in Shoals Parent on equity: Nine months ended September 30, 2023 2022 Net income attributable to non-controlling interests $ 2,687 $ 9,711 Transfers to non-controlling interests: Increase as a result of activity under equity-based compensation plan 687 4,257 Decrease from tax distributions to non-controlling interests (2,628) (7,762) Reallocation of non-controlling interests (10,361) 107 Change from net income attributable to non-controlling interests and transfers to non-controlling interests $ (9,615) $ 6,313

Revenue Recognition (Tables)

Revenue Recognition (Tables)	9 Months Ended
	Sep. 30, 2023
Revenue from Contract with Customer [Abstract]
Schedule of Revenue Disaggregated by Product	The following table presents the Company’s revenue disaggregated by product type (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 System solutions $ 99,461 $ 69,486 $ 292,822 $ 173,136 Components 34,748 21,337 65,681 59,153 Total revenue $ 134,209 $ 90,823 $ 358,503 $ 232,289
Schedule of Contract Balances	The Company’s contract balances consist of the following (in thousands): (*) September 30, 2023 December 31, 2022 Billed accounts receivable Accounts receivable, net $ 104,138 $ 48,571 Retainage Accounts receivable, net $ 4,748 $ 2,004 Unbilled receivables Unbilled receivables $ 28,506 $ 16,713 Deferred revenue Deferred revenue $ 27,025 $ 23,259 (*) Location on the condensed consolidated balance sheets.

Organization and Business (Deta

Organization and Business (Details)	Mar. 10, 2023 shares	Sep. 30, 2023 subsidiary shares	Jul. 01, 2023	Jun. 30, 2023 shares	Dec. 31, 2022 shares
Class of Stock [Line Items]
Number of subsidiaries | subsidiary		5
Class A Common Stock
Class of Stock [Line Items]
Common stock outstanding (in shares)		170,054,787			137,904,663
Class B Common Stock
Class of Stock [Line Items]
Common stock outstanding (in shares)		0		0	31,419,913
Stock Offering By Selling Shareholders | Class A Common Stock
Class of Stock [Line Items]
Stock issued in IPO (in shares)	24,501,650
Shoals Parent
Class of Stock [Line Items]
Ownership interest			100%
Shoals Intermediate Parent, Inc.
Class of Stock [Line Items]
Ownership interest			100%

Summary of Significant Accoun_4

Summary of Significant Accounting Policies - Narrative (Details) - USD ($)	Sep. 30, 2023	Jul. 01, 2023	Sep. 30, 2022
Condensed Income Statements, Captions [Line Items]
Restricted cash and cash equivalents	$ 0		$ 20,400,000
Shoals Parent
Condensed Income Statements, Captions [Line Items]
Ownership interest		100%

Summary of Significant Accoun_5

Summary of Significant Accounting Policies - Schedule of Cash Cash Equivalents And Restricted Cash (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Dec. 31, 2021
Accounting Policies [Abstract]
Cash and cash equivalents	$ 9,224	$ 8,766	$ 11,202
Restricted cash included in other current asset	0		3,583
Restricted cash included in other assets	0		16,831
Total cash, cash equivalents and restricted cash	$ 9,224	$ 8,766	$ 31,616	$ 9,557

Summary of Significant Accoun_6

Summary of Significant Accounting Policies - Schedule of Revenue and Accounts Receivable Concentrations (Details) - Customer A - Customer Concentration Risk	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Revenue %
Concentration Risk [Line Items]
Concentration risk	34.10%	9%
Accounts Receivable %
Concentration Risk [Line Items]
Concentration risk	41.30%	8.40%

Accounts Receivable (Details)

Accounts Receivable (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Receivables [Abstract]
Accounts receivable	$ 109,645	$ 51,061
Less: allowance for credit losses	(759)	(486)
Accounts receivable, net	$ 108,886	$ 50,575

Inventory (Details)

Inventory (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Raw materials	$ 64,105	$ 73,970
Work in process	2,699	1,023
Finished goods	592	785
Allowance for obsolete or slow-moving inventory	(6,435)	(2,924)
Inventory, net	$ 60,961	$ 72,854

Property, Plant and Equipment -

Property, Plant and Equipment - Schedule of Property, Plant, and Equipment, Net (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 31,655	$ 24,154
Less: accumulated depreciation	(8,866)	(7,284)
Property, plant and equipment, net	22,789	16,870
Land
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	840	840
Building and land improvements
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 11,975	9,031
Building and land improvements | Minimum
Property, Plant and Equipment [Line Items]
Estimated Useful Lives (Years)	5 years
Building and land improvements | Maximum
Property, Plant and Equipment [Line Items]
Estimated Useful Lives (Years)	40 years
Machinery and equipment
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 16,379	12,371
Machinery and equipment | Minimum
Property, Plant and Equipment [Line Items]
Estimated Useful Lives (Years)	3 years
Machinery and equipment | Maximum
Property, Plant and Equipment [Line Items]
Estimated Useful Lives (Years)	5 years
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 2,336	1,787
Furniture and fixtures | Minimum
Property, Plant and Equipment [Line Items]
Estimated Useful Lives (Years)	3 years
Furniture and fixtures | Maximum
Property, Plant and Equipment [Line Items]
Estimated Useful Lives (Years)	7 years
Vehicles
Property, Plant and Equipment [Line Items]
Estimated Useful Lives (Years)	5 years
Property, plant and equipment, gross	$ 125	$ 125

Property, Plant and Equipment_2

Property, Plant and Equipment - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 0.7	$ 0.5	$ 1.7	$ 1.4
Depreciation expense allocated to cost of revenue	0.5	0.4	1.2	1.1
Depreciation expense allocated to operating expenses	$ 0.2	$ 0.1	$ 0.5	$ 0.3

Goodwill and Other Intangible_3

Goodwill and Other Intangible Assets - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 69,941		$ 69,941		$ 69,941
Amortization expense of intangible assets	$ 2,000	$ 2,100	$ 6,000	$ 6,600

Goodwill and Other Intangible_4

Goodwill and Other Intangible Assets - Schedule of Other Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Total amortizable intangibles	$ 102,200	$ 102,200
Total accumulated amortization	51,636	45,615
Total other intangible assets, net	$ 50,564	56,585
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Lives (Years)	13 years
Total amortizable intangibles	$ 53,100	53,100
Total accumulated amortization	$ 26,124	22,925
Developed technology
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Lives (Years)	13 years
Total amortizable intangibles	$ 34,600	34,600
Total accumulated amortization	$ 16,856	14,860
Trade names
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Lives (Years)	13 years
Total amortizable intangibles	$ 11,900	11,900
Total accumulated amortization	$ 6,056	5,230
Backlog
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Lives (Years)	1 year
Total amortizable intangibles	$ 600	600
Total accumulated amortization	$ 600	600
Noncompete agreements
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Lives (Years)	5 years
Total amortizable intangibles	$ 2,000	2,000
Total accumulated amortization	$ 2,000	$ 2,000

Accrued Expenses and Other (Det

Accrued Expenses and Other (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Accrued compensation	$ 9,033	$ 4,917
Accrued interest	7,095	7,226
Other accrued expenses	5,388	5,179
Total accrued expenses and other	$ 21,516	$ 17,322

Warranty Liability - Narrative

Warranty Liability - Narrative (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Jun. 30, 2023	Dec. 31, 2022	Jun. 30, 2022	Dec. 31, 2021
Product Warranty Liability [Line Items]
Provision for warranty expense			$ 59,723,000	$ 0
Warranty liability	$ 56,614,000	$ 60,000	56,614,000	60,000	$ 9,634,000	$ 560,000	$ 60,000	$ 60,000
Products Without Service
Product Warranty Liability [Line Items]
Estimated accrued warranty liability	0		0			$ 100,000
Provision for warranty expense	200,000	0	600,000	0
Wire Harness
Product Warranty Liability [Line Items]
Provision for warranty expense	50,200,000	$ 0	59,100,000	$ 0
Warranty liability and expenses, low end of potential loss	184,900,000		184,900,000
Warranty liability and expenses, high end of potential loss	59,700,000		59,700,000
Warranty liability amount higher than expected			125,200,000
Warranty liability	$ 56,600,000		$ 56,600,000

Warranty Liability - Schedule (

Warranty Liability - Schedule (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward]
Warranty liability, beginning of period	$ 9,634	$ 60	$ 560	$ 60
Warranty expense	50,421		59,723	0
Payments	(3,441)	0	(3,669)	0
Warranty liability, end of period	56,614	60	56,614	60
Less: current portion	17,254	60	17,254	60	$ 560
Warranty liability, less current portion	$ 39,360	$ 0	$ 39,360	$ 0	$ 0

Long-Term Debt - Schedule of Lo

Long-Term Debt - Schedule of Long-term Debt (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Less: deferred financing costs	$ (3,370,000)	$ (4,187,000)
Total debt, net of deferred financing costs	190,380,000	239,063,000
Less: current portion	(2,000,000)	(2,000,000)
Long-term debt, net current portion	188,380,000	237,063,000
Senior Secured Credit Agreement | Line of Credit | Term Loan Facility
Debt Instrument [Line Items]
Long-term debt, gross	193,750,000	195,250,000
Senior Secured Credit Agreement | Line of Credit | Revolving Credit Facility
Debt Instrument [Line Items]
Long-term debt, gross	$ 0	$ 48,000,000

Long-Term Debt - Narrative (Det

Long-Term Debt - Narrative (Details) - Senior Secured Credit Agreement - Line of Credit - USD ($)	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Term Loan Facility
Debt Instrument [Line Items]
Face amount of debt instrument	$ 350,000,000
Term of debt instrument	6 years
Effective interest rate of debt instrument	11.27%
Long-term debt, gross	$ 193,750,000	$ 195,250,000
Term Loan Facility | SOFR
Debt Instrument [Line Items]
Basis spread on variable rate	5.75%
Revolving Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity of credit facility	$ 150,000,000
Long-term debt, gross	0	$ 48,000,000
Letters of credit outstanding, amount	600,000
Remaining borrowing capacity under credit facility	$ 149,400,000
Maximum net leverage ratio	6.50
Revolving Credit Facility | SOFR
Debt Instrument [Line Items]
Basis spread on variable rate	3.25%

Earnings (Loss) per Share ("E_3

Earnings (Loss) per Share ("EPS") - Schedule (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Jun. 30, 2023	Dec. 31, 2022
Numerator:
Net income (loss) attributable to Shoals Technologies Group, Inc. - basic	$ (9,828)	$ 7,958	$ 23,392	$ 15,000
Reallocation of net income attributable to non-controlling interests from the assumed exchange of Class B common stock	0	0	0	0
Net income (loss) attributable to Shoals Technologies Group, Inc. - diluted	$ (9,828)	$ 7,958	$ 23,392	$ 15,000
Denominator:
Weighted average shares of Class A common stock outstanding - basic (in shares)	169,965,000	112,975,000	162,173,000	112,561,000
Weighted average shares of Class A common stock outstanding - diluted (in shares)	169,965,000	113,584,000	162,611,000	112,816,000
Earnings (loss) per share of Class A common stock - basic (in dollars per share)	$ (0.06)	$ 0.07	$ 0.14	$ 0.13
Earnings (loss) per share of Class A common stock - diluted (in dollars per share)	$ (0.06)	$ 0.07	$ 0.14	$ 0.13
Class B Common Stock
Denominator:
Common stock outstanding (in shares)	0		0		0	31,419,913
Restricted / performance stock units
Denominator:
Effect of dilutive securities (in shares)	0	609,000	438,000	255,000
Class B Common Stock
Denominator:
Effect of dilutive securities (in shares)	0	0	0	0

Equity-Based Compensation - Nar

Equity-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Jan. 26, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-based compensation	$ 5.1	$ 4	$ 17.1	$ 11.9
Unrecognized compensation costs	$ 27.7		$ 27.7
Period for recognition of unrecognized compensation costs			1 year 8 months 12 days
Director
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period			1 year
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)			392,672
Granted (in dollars per share)			$ 25.25
Award vesting period			3 years
Restricted Stock Units | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in dollars per share)			$ 18.12
Restricted Stock Units | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in dollars per share)			$ 28.26
Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)			205,585
Granted (in dollars per share)			$ 27.75
Award vesting period			3 years
Performance Shares | Minimum | Class A Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in dollars per share)			$ 26.55
Performance Shares | Maximum | Class A Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in dollars per share)			$ 28.26
2021 Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized (in shares)					8,768,124

Equity-Based Compensation - Sch

Equity-Based Compensation - Schedule of Restricted And Performance Stock Unit Activity (Details)	9 Months Ended
	Sep. 30, 2023 $ / shares shares
Restricted Stock Units
Stock Units
Outstanding at beginning of period (in shares) | shares	1,736,975
Granted (in shares) | shares	392,672
Vested (in shares) | shares	(823,736)
Forfeited (in shares) | shares	(74,178)
Outstanding at end of period (in shares) | shares	1,231,733
Weighted Average Price
Balance at beginning of period (in dollars per share) | $ / shares	$ 22.34
Granted (in dollars per share) | $ / shares	25.25
Vested (in dollars per share) | $ / shares	20.99
Forfeited (in dollars per share) | $ / shares	22.88
Balance at end of period (in dollars per share) | $ / shares	$ 24.14
Performance Shares
Stock Units
Outstanding at beginning of period (in shares) | shares	256,305
Granted (in shares) | shares	205,585
Vested (in shares) | shares	(67,101)
Forfeited (in shares) | shares	(101,323)
Outstanding at end of period (in shares) | shares	293,466
Weighted Average Price
Balance at beginning of period (in dollars per share) | $ / shares	$ 11.89
Granted (in dollars per share) | $ / shares	27.75
Vested (in dollars per share) | $ / shares	11.86
Forfeited (in dollars per share) | $ / shares	13.08
Balance at end of period (in dollars per share) | $ / shares	$ 22.59

Stockholders' Equity (Details)

Stockholders' Equity (Details)	Sep. 30, 2023 vote shares	Jul. 01, 2023	Jun. 30, 2023 shares	Dec. 31, 2022 shares
Class of Stock [Line Items]
Maximum ratio of class B common stock held to LLC interests held	1
Class A Common Stock
Class of Stock [Line Items]
Number of votes per share of common stock | vote	1
Common stock outstanding (in shares)	170,054,787			137,904,663
Common stock issued (in shares)	170,054,787			137,904,663
Class B Common Stock
Class of Stock [Line Items]
Number of votes per share of common stock | vote	1
Common stock outstanding (in shares)	0		0	31,419,913
Common stock issued (in shares)	0			31,419,913
Shoals Parent
Class of Stock [Line Items]
Ownership interest		100%

Non-Controlling Interests - Nar

Non-Controlling Interests - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended				9 Months Ended
	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2023	Sep. 30, 2022	Jul. 01, 2023
Noncontrolling Interest [Line Items]
Distributions to non-controlling interests	$ 2,628	$ 3,196	$ 1,628	$ 2,938	$ 2,600	$ 7,800
Shoals Parent
Noncontrolling Interest [Line Items]
Interests purchased in subsidiaries (in shares)		480,116			601,518	480,116
Shoals Parent
Noncontrolling Interest [Line Items]
Ownership interest							100%

Non-Controlling Interests - Sch

Non-Controlling Interests - Schedule of Effects of Changes in Ownership (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Noncontrolling Interest [Abstract]
Net income attributable to non-controlling interests	$ 0	$ 4,801	$ 2,687	$ 9,711
Transfers to non-controlling interests:
Increase as a result of activity under equity-based compensation plan			687	4,257
Decrease from tax distributions to non-controlling interests			(2,628)	(7,762)
Reallocation of non-controlling interests			(10,361)	107
Change from net income attributable to non-controlling interests and transfers to non-controlling interests			$ (9,615)	$ 6,313

Commitments and Contingencies (

Commitments and Contingencies (Details) $ in Millions	May 04, 2023 patent	Sep. 30, 2023 USD ($)
Loss Contingencies [Line Items]
Patents allegedly infringed upon | patent	2
Surety Bond
Loss Contingencies [Line Items]
Maximum potential payment obligation with regard to surety bonds | $		$ 31.6

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2023	Sep. 30, 2022	Jul. 01, 2023
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Income tax benefit		$ 5.1
Effective income tax rate		9.30%	18.20%
Penalties and interest on uncertain tax positions	$ 1
Shoals Intermediate Parent, Inc.
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Ownership interest				100%

Revenue Recognition - Schedule

Revenue Recognition - Schedule of Revenue Disaggregated by Product (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Disaggregation of Revenue [Line Items]
Total revenue	$ 134,209	$ 90,823	$ 358,503	$ 232,289
System solutions
Disaggregation of Revenue [Line Items]
Total revenue	99,461	69,486	292,822	173,136
Components
Disaggregation of Revenue [Line Items]
Total revenue	$ 34,748	$ 21,337	$ 65,681	$ 59,153

Revenue Recognition - Schedul_2

Revenue Recognition - Schedule of Contract Balances (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Dec. 31, 2021
Revenue from Contract with Customer [Abstract]
Billed accounts receivable	$ 104,138	$ 48,571	$ 26,700
Retainage	4,748	2,004	4,800
Unbilled receivables	28,506	16,713	$ 13,500
Deferred revenue	$ 27,025	$ 23,259

Revenue Recognition - Narrative

Revenue Recognition - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2021	Dec. 31, 2022
Revenue from Contract with Customer [Abstract]
Billed accounts receivable	$ 104,138		$ 104,138		$ 26,700	$ 48,571
Unbilled receivables	28,506		28,506		13,500	16,713
Retainage	4,748		4,748		4,800	$ 2,004
Contract with customer, liability, revenue recognized	$ 2,300	$ 400	$ 20,800	$ 1,700	$ 1,800