Shoals Technologies Group, Inc. Class A Common Stock Barclays 40th Annual Energy-Power Conference

Thank you, Christine. Good afternoon, everybody.

Sure. Yeah. Maybe just to start out with our strategy. We set the course now a couple of years back that we were going to continue to grow our core market, obviously, solar, but also diversifying the new end markets. We are starting to see that materialize with our BESS business and now soon to be AirLink, as you mentioned. So, really working through those markets one by one. The solar market today is certainly as good as I have seen it since I have been at Shoals, which is a little over three years. But probably as good as the market's ever been. As everybody knows, there is an underlying demand for power that is extremely significant. I think the thesis of a cliff, so to speak, happening after the tax credits rolled off is maybe subsiding a bit.

We are believers in the market, and that the market will be stronger for longer. So, where Wood Mackenzie and BloombergNEF has projected things, through the end of the decade and a bit beyond, I think it is probably a high 30s, low 40s market from a domestic perspective, which is a fantastic market for Shoals, and our peers to operate in, quite frankly. So we are very bullish on the solar market. As it relates to Battery Energy Storage Solutions, one of our new vectors for growth, it is a really exciting market. I think about the product that we are providing specifically to data centers. We are probably in the first quarter of the maturation of that product segment. As AI data center architecture continues to change and evolve, we will have more and more opportunity to satisfy those particular markets.

As it relates specifically to our AirLink product inside of the data center, it is fantastic for us to be able to provide power to the rack versus just power to the physical structure of the data center. That market size is very significant. Christine, you have done a bunch of good work on looking into this product, so you understand the market landscape. We think about that market of being about a $2 billion market opportunity for us now, and then growing to about $4 billion later in the decade. Our product is primarily a substitute for traditional busway to deliver power, again, to rack. So, exciting opportunity for us to continue to grow in that space.

Sure. Each market is different for us, but maybe before I go there, talk a little bit about what is unique and what makes those market opportunities the same. Shoals, really at its core, our core competency is the ability to build at scale, a very high mix. So custom solutions at scale. When you think across whether it be solar, whether it be BESS, whether it be data center, that value proposition really holds true, and how that translates to the customer is quality product, reliability, being able to deliver it fast the way that they want it, and our products will stand the test of time and the infrastructure that it's going into. Each of the markets, obviously, and the margin profiles are a bit unique.

In the solar landscape, we've got an IP portfolio protecting our Big Lead Assembly product, our solution, which is very strong and intact, as we've seen here in recent weeks through the judgment in our IP litigation. With that IP and the solution that we provide, we are able to drive a price point in the marketplace that is deserving of the value that that product delivers. There is unbelievable demand for EBOS products now, as we talked about with the robustness of the market. I would say that pricing and margin behaviors in this market are behaving rationally with that type of demand. As I think about our battery energy storage product, similar scenario, highly engineered custom solution for our customers.

When you think about our margin stack, battery energy storage is at the higher side of our margin stack as we're getting still essentially paid for that value in the engineering that we're delivering to the customer. As it relates specifically to our AirLink product, we've not priced that product in the market yet. But there's a tremendous amount of value there and speed to power, safety, and also the scalability of the power that we can deliver to the rack server. I would expect that product to be sort of at the higher end of our margin stack when it comes to market.