Shoals Technologies Group, Inc. Reports Financial Results for Third Quarter 2026
Higher quarterly sales and earnings accompanied a lower gross margin and negative operating cash flow for the first nine months.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Summary
Shoals Technologies Group (SHLS) reported third-quarter revenue of $195.3 million, up 43.8% from the same period a year earlier. Net income rose to $17.9 million from $11.9 million, and diluted earnings per share increased to $0.11 from $0.07. Gross margin fell to 31.9% from 37.0%, reflecting manufacturing-transition inefficiencies, product mix, quality-related costs and incremental lease accounting amortization.
Backlog and awarded orders totaled $791.7 million, up 9.8% year over year but down 1.2% sequentially. Shoals raised its full-year outlook, expecting revenue of $665 million–$685 million and adjusted EBITDA of $129 million–$133 million, a non-GAAP earnings measure. Nine-month operating cash flow was negative $5.788 million, versus positive $21.154 million a year earlier. Shoals also entered into a merger and reorganization agreement with ARRAY Technologies.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Hollow bars mark forward-looking points. How the balance works
Positive
- Major point. Forward-looking: it has not happened yet and may not happen.Raised full-year outlook targets 2026 revenue of $665 million–$685 million and adjusted EBITDA of $129 million–$133 million.
- Major pointARRAY Technologies merger and reorganization agreement has been signed.
- Moderate pointThird-quarter revenue increased 43.8% year over year to $195.3 million.
- Moderate pointThird-quarter net income rose to $17.9 million from $11.9 million; diluted EPS increased to $0.11 from $0.07.
- Moderate pointThird-quarter adjusted EBITDA increased to $39.8 million from $32.2 million a year earlier.
- Moderate pointBacklog and awarded orders of $791.7 million increased 9.8% year over year but decreased 1.2% sequentially. 56% of market cap
- Moderate point. Forward-looking: it has not happened yet and may not happen.Full-year operating cash flow is expected to total $55 million–$65 million.
10 minor points
- Minor pointThird-quarter operating income increased to $29.0 million from $18.7 million a year earlier.
- Minor pointThird-quarter gross profit increased to $62.4 million from $50.3 million a year earlier.
- Minor pointThird-quarter adjusted net income rose to $24.5 million from $21.2 million; adjusted diluted EPS reached $0.14 versus $0.13.
- Minor point. Forward-looking: it has not happened yet and may not happen.Fourth-quarter outlook projects revenue of $165 million–$185 million and adjusted EBITDA of $36 million–$40 million.
- Minor pointNew manufacturing facility move is complete.
- Minor pointNine-month revenue increased to $499.237 million from $327.006 million a year earlier.
- Minor pointNine-month net income rose to $29.711 million from $25.452 million; diluted EPS increased to $0.17 from $0.15.
- Minor pointNine-month operating income increased to $55.406 million from $38.981 million a year earlier.
- Minor pointNine-month gross profit increased to $152.931 million from $119.594 million a year earlier.
- Minor pointNine-month capital spending decreased to $17.501 million from $25.879 million a year earlier.
Negative
- Moderate pointThird-quarter gross margin declined to 31.9% from 37.0% amid transition inefficiencies, product mix and quality-related costs.
- Moderate pointNine-month operating cash flow was negative $5.788 million versus positive $21.154 million a year earlier.
- Moderate pointRevolving credit debt increased to $163.750 million at September 30, 2026, from $136.750 million at year-end 2025.
- Moderate pointNine-month warranty expense provision increased to $8.947 million from $0.256 million a year earlier.
- Moderate pointNine-month inventory cash outflow increased to $61.500 million from $5.463 million a year earlier.
8 minor points
- Minor pointThird-quarter general and administrative expenses rose to $31.0 million from $29.4 million a year earlier.
- Minor pointThird-quarter interest expense increased to $3.894 million from $2.832 million a year earlier.
- Minor pointNine-month gross margin declined to 30.6% from 36.6% a year earlier.
- Minor pointNine-month general and administrative expenses increased to $90.482 million from $74.180 million a year earlier.
- Minor pointNine-month interest expense increased to $10.271 million from $7.483 million a year earlier.
- Minor pointAwarded orders include orders for which contracts have not yet been signed.
- Minor point. Forward-looking: it has not happened yet and may not happen.Full-year capital expenditures are expected to total $20 million–$30 million.
- Minor point. Forward-looking: it has not happened yet and may not happen.Full-year interest expense is expected to total $11 million–$13 million.
News Explained
For the quarter ending December 31, 2026, Shoals expects revenue of $165 million to $185 million and adjusted EBITDA of $36 million to $40 million.
Shoals reported its third-quarter results; as of
For the quarter ending
Key Figures
- Q3 revenue
- $195.3 million (+43.8% year over year)
- Third quarter 2026
- Gross profit margin
- 31.9% vs. 37.0%
- Third quarter 2026 vs. prior-year period
- Adjusted EBITDA
- $39.8 million
- Third quarter 2026
- Backlog and awarded orders
- $791.7 million (+9.8% year over year; -1.2% sequentially)
- As of September 30, 2026
- Q4 revenue outlook
- $165 million to $185 million
- Fourth quarter 2026
- Q4 Adjusted EBITDA outlook
- $36 million to $40 million
- Fourth quarter 2026
- Full-year revenue outlook
- $665 million to $685 million
- Revised 2026 outlook
- Full-year Adjusted EBITDA outlook
- $129 million to $133 million
- Revised 2026 outlook
Previous Earnings Reports
-
Set Q3 revenue and EBITDA guidance and reaffirmed full-year ranges, providing the baseline for this report’s results and raised outlook.
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Key Terms
non-gaap financial measures financial
take-or-pay provisions financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
– Quarterly Revenue of
– Income from Operations of
– Net Income of
– Adjusted EBITDA1 of
– Backlog and Awarded Orders of
– Provides Fourth Quarter and Raises Full-year Outlook –
PORTLAND, Tenn., Nov. 04, 2026 (GLOBE NEWSWIRE) -- Shoals Technologies Group, Inc. (“Shoals” or the “Company”) (Nasdaq: SHLS), a global leader in electrical infrastructure solutions for the energy transition market, today announced results for its third quarter ended September 30, 2026.
“We’re very pleased with our strong results in the period, as productivity improvements drove both quarterly revenue and Adjusted EBITDA above our expected range. We remain focused on making meaningful operational improvements as we finish 2026 on a strong note. The long-term health of the market remains robust and we’re well positioned to continue the momentum into 2027 and beyond,” said Brandon Moss, CEO of Shoals.
"Our strategy is working — and the results prove it. With the move into our new facility complete, our focus today is on the customer; delivering quality solutions, on time, with market-leading customer service. With an unmatched market position, world-class manufacturing, and a breakthrough innovation pipeline, we are built for what's ahead and excited about the opportunities in front of us," added Mr. Moss.
____________________________________
1Non-GAAP financial measures referenced in this release are used by management to assist investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. Reconciliations of non-GAAP operating measures to the most directly comparable GAAP financial measures are included in the non-GAAP reconciliation in this release. Non-GAAP measures should not be used as a substitute for the closest comparable GAAP measures.
Third Quarter 2026 Financial Results
Revenue increased
Gross profit was
General and administrative expenses were
Income from operations was
Net income was
Adjusted EBITDA1 was
Adjusted Net Income1 was
Backlog and Awarded Orders
The Company’s backlog and awarded orders as of September 30, 2026, were
Backlog represents signed purchase orders or contractual minimum purchase commitments with take-or-pay provisions and awarded orders are orders we are in the process of documenting with a contract but for which a contract has not yet been signed.
Fourth Quarter 2026 Outlook
At this time, the Company is providing an outlook for the fourth quarter. Based on current business conditions, business trends and other factors, for the quarter ending December 31, 2026, the Company expects:
- Revenue in the range of
$165 million to$185 million ; and - Adjusted EBITDA1 in the range of
$36 million to$40 million .
Revised Full-Year 2026 Outlook
Based on current business conditions, business trends and other factors, for the full year 2026, the Company now expects:
- Revenue in the range of
$665 million to$685 million ; - Adjusted EBITDA1 in the range of
$129 million to$133 million ; - Cash flow from operations in the range of
$55 million to$65 million ; - Capital expenditures in the range of
$20 million to$30 million ; and - Interest expense in the range of
$11 million to$13 million .
A reconciliation of Adjusted EBITDA1 guidance, which is a forward-looking measure that is a non-GAAP measure, to the most closely comparable GAAP measure is not provided because we are unable to provide such reconciliation without unreasonable effort. The inability to provide a quantitative reconciliation is due to the uncertainty and inherent difficulty in predicting the occurrence, the financial impact and the periods in which the components of the applicable GAAP measures and non-GAAP adjustments may be recognized. The GAAP measure may include the impact of such items as non-cash share-based compensation, amortization of intangible assets and the tax effect of such items, in addition to other items we have historically excluded from Adjusted EBITDA and Adjusted Net Income. We expect to continue to exclude these items in future disclosures of these non-GAAP measures and may also exclude other similar items that may arise in the future.
Webcast and Conference Call Information
In a separate press release issued today, the Company announced it had entered into an Agreement and Plan of Merger and Reorganization with ARRAY Technologies, Inc. Additional information is available in the transaction press release. In light of the transaction announcement, the Company’s previously scheduled third quarter 2026 earnings call will instead be conducted as a joint analyst call with ARRAY Technologies, Inc. on November 4, 2026 at 8:00 a.m. EDT.
Interested investors and other parties can view materials related to the Company’s quarterly earnings results on the Investor Relations section of the Company’s website at https://investors.shoals.com.
About Shoals Technologies Group, Inc.
Shoals Technologies Group is a leading manufacturer of advanced electrical infrastructure solutions for mission-critical applications across utility-scale solar, battery storage, and data center power systems. Since its founding in 1996, the Company has designed innovative technologies and systems solutions that allow its customers to substantially increase installation efficiency and safety while improving system performance and reliability at scale. Shoals Technologies Group is a recognized leader in the energy transition industry. For additional information, please visit: https://www.shoals.com.
Investor Relations Contact
Shoals Technologies Group, Inc.
Email: investors@shoals.com
Forward-Looking Statements
This report contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements include information concerning our possible or assumed future results of operations; expectations regarding the utility-scale solar market; project delays; regulatory environment, including changes or potential changes to such environment; the effects of strategic pricing actions, volume discounts and customer mix in our key markets; pipeline and orders; business strategies, plans and expectations, including sales and marketing goals; technology developments; financing and investment plans; warranty and liability accruals and estimates of loss or gains; estimates of potential loss related to the wire insulation shrinkback matter discussed in our public filings; litigation strategy and expected benefits or results from the current intellectual property and wire insulation shrinkback litigation; potential growth opportunities, including opportunities associated with our entry into new markets; and production and capacity at our plants. Forward-looking statements include statements that are not historical facts and can be identified by terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will,” “would” or similar expressions and the negatives of those terms.
Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
Some of the key factors and scenarios that could cause actual results to differ from our expectations include, among others, the completion of our proposed transaction with Array Technologies, Inc. on the anticipated terms and timing, including obtaining stockholder and regulatory approvals, the anticipated tax treatment, redemption of Array’s preferred stock, unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies, expansion and growth of Array’s and our businesses and the satisfaction of other conditions to the completion of the proposed Array transaction; the risk that a condition to closing may not be satisfied, that an event, change or other circumstance could give rise to the termination of the proposed Array transaction, or that the proposed Array transaction may not be completed on the expected timeline or at all; failure to realize the anticipated benefits of the proposed Array transaction, including because of a delay in completing the transaction or because our businesses are not integrated successfully on the anticipated timeline, or at all, or integration is more costly or difficult than expected; potential litigation relating to the proposed Array transaction that could be instituted against us, Array, or our respective directors and officers; the risk that disruptions from the proposed Array transaction will harm our or Shoals’ businesses, including our current plans and operations, or divert management’s attention from ongoing business operations and opportunities; our ability to retain and hire key personnel; potential adverse reactions or changes to business, employee, customer or supplier relationships resulting from the announcement, pendency or completion of the proposed Array transaction; the risk that the announcement, pendency or completion of the proposed Array transaction could adversely affect the market price or long-term value of our common stock; if demand for solar energy projects diminishes, we may not be able to grow, and our financial results, business and prospects could be materially adversely impacted; if we fail to accurately estimate the potential losses related to the wire insulation shrinkback matter, or fail to recover the costs and expenses incurred by us from the supplier, and our profit margins, financial results, business and prospects could be materially adversely impacted; the interruption of the flow of raw materials from international vendors has disrupted our supply chain, including as a result of the imposition of additional duties, tariffs, and other charges on imports and exports; the imposition of trade restrictions, import tariffs, anti-dumping, and countervailing duties; we have modified, and in the future may modify, our business strategy to abandon lines of business or implement new lines of business, and modifying our business strategy could have an adverse effect on our business and financial results; amounts included in our backlog and awarded orders may not result in actual revenue or translate into profits; defects or performance problems in our products or their parts, whether due to manufacturing, installation, or use, including those related to the wire insulation shrinkback matter, have a high consequence of failure and can lead to equipment and systems failure, physical injury or death, and in the past have, and in the future could, result in loss of customers, reputational damage and decreased revenue, and materially adversely impact our business, financial condition and results of operations; we have experienced, and may experience in the future, delays, disruptions, quality control, or reputational problems in our manufacturing operations in part due to our vendor concentration; if we fail to retain our key personnel and attract additional qualified personnel, our business strategy and prospects could suffer; our products are primarily manufactured and shipped from our production facilities in Tennessee, and any damage or disruption at these facilities may harm our business; we may face difficulties integrating and optimizing our consolidated Tennessee-based manufacturing and distribution operations, and may not fully realize the anticipated benefits thereof; safety issues may subject us to penalties, negatively impact customer relationships, result in higher operating costs, and negatively impact employee morale and turnover; the market for our products is competitive, and we face increased competition as new and existing competitors introduce EBOS system solutions and components, which could negatively affect our results of operations and market share; macroeconomic conditions, including high inflation, high interest rates, and geopolitical instability, impact our business and financial results; we are subject to risks associated with the patent infringement complaints that we filed with the U.S. International Trade Commission and District Courts; if we fail to, or incur significant costs in order to obtain, maintain, protect, defend, or enforce our intellectual property portfolio and other proprietary rights, including the patents we are asserting in ongoing patent infringement litigation; acquisitions, joint ventures, and/or investments and the failure to integrate acquired businesses could disrupt our business and negatively impact revenue, results of operations and cash flow; a loss of one or more of our significant customers, their inability to perform under their contracts, or their default in payment could harm our business, financial condition, results of operations and prospects; a significant drop in the price of electricity may harm our business; the unauthorized access to our information technology systems or the disclosure of personal or sensitive data or confidential information, whether through a breach of our computer system or otherwise, could severely disrupt our business; failure of our information technology systems, including those managed by third parties, whether intentional or inadvertent, could lead to delays in our business operations and, if significant or extreme, affect our results of operations; our expansion outside the U.S. could subject us to additional business, financial, regulatory, and competitive risks; our indebtedness could adversely affect our financial flexibility, restrict our current and future operations, and our competitive position; existing electric utility industry, federal, state, and municipal renewable energy and solar energy policies and regulations, including zoning and siting laws, and any subsequent changes, present technical, regulatory, and economic barriers to the purchase and use of solar energy systems that may significantly reduce demand for our products or harm our ability to compete; changes in tax laws or regulations that are applied adversely to us, or our customers could materially adversely affect our business, financial condition, results of operations, and prospects; and the market price of our Class A common stock may decline and may continue to be subject to significant volatility.
These and other important risk factors are described more fully in the Company’s most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and other documents filed with the Securities and Exchange Commission and could cause actual results to vary from expectations. Given these uncertainties, you should not place undue reliance on forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this report. You should read this report with the understanding that our actual future results may be materially different from what we expect.
Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
Non-GAAP Financial Measures
Adjusted Gross Profit, Adjusted Gross Profit Percentage, Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted Earnings per Share (“EPS”)
We define Adjusted Gross Profit as gross profit plus plant optimization expenses. We define Adjusted Gross Profit Percentage as Adjusted Gross Profit divided by revenue. We define Adjusted EBITDA as net income plus/(minus) (i) interest expense, (ii) interest income, (iii) income tax expense, (iv) depreciation expense, (v) amortization of intangibles, (vi) equity-based compensation, (vii) gain (loss) on sale of asset (viii) wire insulation shrinkback litigation expenses, (ix) plant optimization expenses, (x) shareholder litigation expenses, (xi) litigation settlement expense, net of insurance recoveries, and (xii) transaction, integration, and restructuring costs. We define Adjusted Net Income as net income plus (i) amortization of intangibles, (ii) amortization / write-off of deferred financing costs, (iii) equity-based compensation, (iv) gain (loss) on sale of asset (v) wire insulation shrinkback litigation expenses, (vi) plant optimization expenses, (vii) shareholder litigation expenses, (viii) litigation settlement expenses, net of insurance recoveries, and (ix) transaction, integration, and restructuring costs, all net of applicable income taxes. We define Adjusted Diluted EPS as Adjusted Net Income divided by the diluted weighted average shares of Class A common stock outstanding for the applicable period.
Beginning with the three months ended March 31, 2026, we revised our definition of Adjusted EBITDA to exclude shareholder litigation costs, which are reflected in General and Administrative expenses on our consolidated statements of operations. Comparative amounts for prior periods have been recast to conform to the current period presentation. Management believes this revised definition provides a more meaningful representation of the Company’s ongoing operating performance as the costs are not reflective of our core operations.
Adjusted Gross Profit, Adjusted Gross Profit Percentage, Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS are intended as supplemental measures of performance that are neither required by, nor presented in accordance with, GAAP. We present Adjusted Gross Profit, Adjusted Gross Profit Percentage, Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS because we believe they assist investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. In addition, we use Adjusted Gross Profit, Adjusted Gross Profit Percentage, Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS: (i) as factors in evaluating management’s performance when determining incentive compensation, as applicable; (ii) to evaluate the effectiveness of our business strategies; and (iii) because our credit agreement uses measures similar to Adjusted EBITDA, Adjusted Net Income and Adjusted Diluted EPS to measure our compliance with certain covenants.
Among other limitations, Adjusted Gross Profit, Adjusted Gross Profit Percentage, Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments; do not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; and may be calculated by other companies in our industry differently than we do or not at all, which may limit their usefulness as comparative measures.
Because of these limitations, Adjusted Gross Profit, Adjusted Gross Profit Percentage, Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS should not be considered in isolation or as substitutes for performance measures calculated in accordance with GAAP. You should review the reconciliation of gross profit to Adjusted Gross Profit and Adjusted Gross Profit Percentage, net income to Adjusted EBITDA, and net income to Adjusted Net Income and Adjusted Diluted EPS below and not rely on any single financial measure to evaluate our business.
| Shoals Technologies Group, Inc. Condensed Consolidated Balance Sheets (Unaudited) (in thousands, except shares and par value) | |||||||
| September 30, 2026 | December 31, 2025 | ||||||
| Assets | |||||||
| Current Assets | |||||||
| Cash and cash equivalents | $ | 7,674 | $ | 7,320 | |||
| Accounts receivable, net | 159,822 | 128,793 | |||||
| Unbilled receivables | 12,617 | 22,133 | |||||
| Inventory | 148,348 | 89,878 | |||||
| Insurance receivable | 499 | — | |||||
| Other current assets | 12,174 | 9,762 | |||||
| Total Current Assets | 341,134 | 257,886 | |||||
| Property, plant and equipment, net | 62,686 | 53,302 | |||||
| Goodwill | 69,941 | 69,941 | |||||
| Other intangible assets, net | 27,810 | 33,499 | |||||
| Deferred tax assets | 428,540 | 438,027 | |||||
| Right-of-use operating lease assets | 42,881 | 46,044 | |||||
| Other assets | 5,704 | 5,402 | |||||
| Total Assets | $ | 978,696 | $ | 904,101 | |||
| Liabilities and Stockholders’ Equity | |||||||
| Current Liabilities | |||||||
| Accounts payable | $ | 27,400 | $ | 64,875 | |||
| Accrued expenses and other | 44,143 | 22,215 | |||||
| Litigation settlement liability | 5,999 | — | |||||
| Warranty liability—current portion | 5,281 | 3,202 | |||||
| Deferred revenue | 56,216 | 37,031 | |||||
| Total Current Liabilities | 139,039 | 127,323 | |||||
| Revolving line of credit | 163,750 | 136,750 | |||||
| Right-of-use operating lease liabilities | 36,391 | 38,661 | |||||
| Warranty liability, less current portion | 403 | 403 | |||||
| Other long-term liabilities | 991 | 991 | |||||
| Total Liabilities | 340,574 | 304,128 | |||||
| Commitments and Contingencies | |||||||
| Stockholders’ Equity | |||||||
| Preferred stock, | — | — | |||||
| Class A common stock, | 2 | 2 | |||||
| Additional paid-in capital | 501,528 | 493,090 | |||||
| Treasury stock, at cost, 3,908,387 shares as of September 30, 2026 and December 31, 2025 | (25,272 | ) | (25,272 | ) | |||
| Retained earnings | 161,864 | 132,153 | |||||
| Total Stockholders' Equity | 638,122 | 599,973 | |||||
| Total Liabilities and Stockholders’ Equity | $ | 978,696 | $ | 904,101 | |||
| Shoals Technologies Group, Inc. Condensed Consolidated Statements of Operations (Unaudited) (in thousands, except per share amounts) | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Revenue | $ | 195,308 | $ | 135,804 | $ | 499,237 | $ | 327,006 | |||||||
| Cost of revenue | 132,912 | 85,552 | 346,306 | 207,412 | |||||||||||
| Gross profit | 62,396 | 50,252 | 152,931 | 119,594 | |||||||||||
| Operating expenses | |||||||||||||||
| General and administrative expenses | 31,003 | 29,423 | 90,482 | 74,180 | |||||||||||
| Depreciation and amortization | 2,427 | 2,158 | 7,043 | 6,433 | |||||||||||
| Total operating expenses | 33,430 | 31,581 | 97,525 | 80,613 | |||||||||||
| Income from operations | 28,966 | 18,671 | 55,406 | 38,981 | |||||||||||
| Interest expense | (3,894 | ) | (2,832 | ) | (10,271 | ) | (7,483 | ) | |||||||
| Interest income | — | 38 | 327 | 232 | |||||||||||
| Litigation settlement expense, net of recoveries | (1,000 | ) | — | (6,250 | ) | — | |||||||||
| Gain (loss) on sale of assets | (2 | ) | (7 | ) | (4 | ) | 3,127 | ||||||||
| Foreign currency gain (loss) | 18 | — | (10 | ) | — | ||||||||||
| Income before income taxes | 24,088 | 15,870 | 39,198 | 34,857 | |||||||||||
| Income tax expense | (6,218 | ) | (3,991 | ) | (9,487 | ) | (9,405 | ) | |||||||
| Net income | $ | 17,870 | $ | 11,879 | $ | 29,711 | $ | 25,452 | |||||||
| Earnings per share of Class A common stock: | |||||||||||||||
| Basic | $ | 0.11 | $ | 0.07 | $ | 0.18 | $ | 0.15 | |||||||
| Diluted | $ | 0.11 | $ | 0.07 | $ | 0.17 | $ | 0.15 | |||||||
| Weighted average shares of Class A common stock outstanding: | |||||||||||||||
| Basic | 168,377 | 167,369 | 168,000 | 167,206 | |||||||||||
| Diluted | 170,133 | 168,750 | 170,058 | 167,725 | |||||||||||
| Shoals Technologies Group, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) (in thousands) | |||||||
| Nine Months Ended September 30, | |||||||
| 2026 | 2025 | ||||||
| Cash Flows from Operating Activities | |||||||
| Net income | $ | 29,711 | $ | 25,452 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 13,802 | 9,984 | |||||
| Amortization/write off of deferred financing costs | 699 | 467 | |||||
| Equity-based compensation | 11,795 | 7,674 | |||||
| Provision for obsolete or slow-moving inventory | 3,030 | 1,090 | |||||
| Provision for warranty expense | 8,947 | 256 | |||||
| Deferred taxes | 9,487 | 10,574 | |||||
| Other | 5,295 | (3,127 | ) | ||||
| Changes in assets and liabilities: | |||||||
| Accounts receivable | (31,029 | ) | (39,283 | ) | |||
| Unbilled receivables | 9,516 | 13,129 | |||||
| Inventory | (61,500 | ) | (5,463 | ) | |||
| Other assets | (3,413 | ) | 2,465 | ||||
| Accounts payable | (37,475 | ) | 12,566 | ||||
| Accrued expenses and other | 17,530 | 11,661 | |||||
| Warranty liability | (6,868 | ) | (33,653 | ) | |||
| Litigation receivable and settlement liabilities | 5,500 | — | |||||
| Deferred revenue | 19,185 | 7,362 | |||||
| Net Cash Provided by (Used in) Operating Activities | (5,788 | ) | 21,154 | ||||
| Cash Flows from Investing Activities | |||||||
| Purchases of property, plant and equipment | (17,501 | ) | (25,879 | ) | |||
| Proceeds from sale of property, plant and equipment | — | 5,088 | |||||
| Net Cash Used in Investing Activities | (17,501 | ) | (20,791 | ) | |||
| Cash Flows from Financing Activities | |||||||
| Employee withholding taxes related to net settled equity awards | (3,357 | ) | (344 | ) | |||
| Proceeds from revolving credit facility | 60,000 | 50,000 | |||||
| Repayments of revolving credit facility | (33,000 | ) | (65,000 | ) | |||
| Excise taxes on treasury stock transactions | — | 59 | |||||
| Net Cash Provided by (Used in) Financing Activities | 23,643 | (15,285 | ) | ||||
| Net Increase (Decrease) in Cash and Cash Equivalents | 354 | (14,922 | ) | ||||
| Cash and Cash Equivalents—Beginning of Period | 7,320 | 23,511 | |||||
| Cash and Cash Equivalents—End of Period | $ | 7,674 | $ | 8,589 | |||
| Shoals Technologies Group, Inc. Adjusted Gross Profit, Adjusted Gross Profit Percentage, Adjusted EBITDA, Adjusted Net Income and Adjusted Diluted Earnings per Share (“EPS”) (Unaudited) |
Reconciliation of Gross Profit to Adjusted Gross Profit and Adjusted Gross Profit Percentage (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Revenue | $ | 195,308 | $ | 135,804 | $ | 499,237 | $ | 327,006 | |||||||
| Cost of revenue | 132,912 | 85,552 | 346,306 | 207,412 | |||||||||||
| Gross profit | $ | 62,396 | $ | 50,252 | $ | 152,931 | $ | 119,594 | |||||||
| Gross profit percentage | 31.9 | % | 37.0 | % | 30.6 | % | 36.6 | % | |||||||
| Plant optimization expense (b) | $ | 115 | $ | — | $ | 1,232 | $ | — | |||||||
| Adjusted gross profit | $ | 62,511 | $ | 50,252 | $ | 154,163 | $ | 119,594 | |||||||
| Adjusted gross profit percentage | 32.0 | % | 37.0 | % | 30.9 | % | 36.6 | % | |||||||
Reconciliation of Net Income to Adjusted EBITDA (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||
| Net income | $ | 17,870 | $ | 11,879 | $ | 29,711 | $ | 25,452 | ||||||
| Interest expense | 3,894 | 2,832 | 10,271 | 7,483 | ||||||||||
| Interest income | — | (38 | ) | (327 | ) | (232 | ) | |||||||
| Income tax expense | 6,218 | 3,991 | 9,487 | 9,405 | ||||||||||
| Depreciation expense | 3,174 | 1,466 | 8,113 | 4,296 | ||||||||||
| Amortization of intangibles | 1,910 | 1,909 | 5,703 | 5,710 | ||||||||||
| Equity-based compensation | 4,096 | 2,421 | 11,794 | 7,675 | ||||||||||
| (Gain) loss on sale of asset | 2 | 7 | 4 | (3,127 | ) | |||||||||
| Wire insulation shrinkback litigation expenses (a) | 711 | 6,831 | 7,294 | 11,906 | ||||||||||
| Plant optimization expenses (b) | 115 | 676 | 1,232 | 676 | ||||||||||
| Shareholder litigation expenses (c) | 144 | 261 | 2,264 | 1,174 | ||||||||||
| Litigation settlement expense (c) | 1,000 | — | 6,250 | — | ||||||||||
| Transaction, integration and restructuring costs (d) | 671 | — | 671 | — | ||||||||||
| Adjusted EBITDA | $ | 39,805 | $ | 32,235 | $ | 92,467 | $ | 70,418 | ||||||
Reconciliation of Net Income to Adjusted Net Income (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Net income | $ | 17,870 | $ | 11,879 | $ | 29,711 | $ | 25,452 | |||||||
| Amortization of intangibles | 1,910 | 1,909 | 5,703 | 5,710 | |||||||||||
| Amortization / write-off of deferred financing costs | 387 | 156 | 699 | 467 | |||||||||||
| Equity-based compensation | 4,096 | 2,421 | 11,794 | 7,675 | |||||||||||
| (Gain) loss on sale of asset | 2 | 7 | 4 | (3,127 | ) | ||||||||||
| Wire insulation shrinkback litigation expenses (a) | 711 | 6,831 | 7,294 | 11,906 | |||||||||||
| Plant optimization expenses (b) | 115 | 676 | 1,232 | 676 | |||||||||||
| Shareholder litigation expenses (c) | 144 | 261 | 2,264 | 1,174 | |||||||||||
| Litigation settlement expense (c) | 1,000 | — | 6,250 | — | |||||||||||
| Transaction, integration and restructuring costs (d) | 671 | — | 671 | — | |||||||||||
| Tax impact of adjustments (e) | (2,413 | ) | (2,943 | ) | (9,588 | ) | (5,875 | ) | |||||||
| Adjusted Net Income | $ | 24,493 | $ | 21,197 | $ | 56,034 | $ | 44,058 | |||||||
(a) For the three and nine months ended September 30, 2026, represents
(b) For the three and nine months ended September 30, 2026, represents
(c) For the three and nine months ended September 30, 2026, represents
(d) Represents costs incurred in connection with the recently announced proposed transaction with ARRAY Technologies, Inc., primarily consisting of legal, investment banking, accounting, consulting and other professional and advisory fees. We believe these costs are not reflective of our core operations and that excluding them provides a more meaningful view of our ongoing operating performance.
(e) Shoals Technologies Group, Inc. is subject to U.S. Federal income taxes, in addition to state and local taxes. Represents the estimated tax impact of all Adjusted Net Income add-backs, excluding those which represent permanent differences between book versus tax. The adjustment to the provision for income tax reflects the effective tax rates below.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||
| Statutory U.S. Federal income tax rate | 21.0 | % | 21.0 | % | 21.0 | % | 21.0 | % | |||
| Permanent adjustments | 3.1 | % | 0.6 | % | 3.1 | % | 0.6 | % | |||
| State and local taxes (net of federal benefit) | 2.6 | % | 2.4 | % | 2.6 | % | 2.4 | % | |||
| Effective income tax rate for Adjusted Net Income | 26.7 | % | 24.0 | % | 26.7 | % | 24.0 | % | |||
Calculation of Adjusted Diluted Earnings per Share (in thousands, except per share amounts):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||
| Diluted weighted average shares outstanding | 170,133 | 168,750 | 170,058 | 167,725 | |||||||
| Adjusted Net Income | $ | 24,493 | $ | 21,197 | $ | 56,034 | $ | 44,058 | |||
| Adjusted Diluted EPS | $ | 0.14 | $ | 0.13 | $ | 0.33 | $ | 0.26 | |||
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were Shoals Technologies Group's third-quarter 2026 earnings results?
Shoals reported $195.3 million in revenue and $17.9 million in net income for the quarter ended September 30, 2026. Revenue increased 43.8% year over year, while diluted earnings per share rose to $0.11 from $0.07. Gross margin declined to 31.9% from 37.0%.
What is Shoals Technologies Group's revised full-year 2026 outlook?
Shoals expects revenue of $665 million–$685 million and adjusted EBITDA of $129 million–$133 million for 2026. It also expects operating cash flow of $55 million–$65 million, capital expenditures of $20 million–$30 million and interest expense of $11 million–$13 million.
What does Shoals include in backlog and awarded orders?
Backlog includes signed purchase orders or contractual minimum purchase commitments with take-or-pay provisions, which require payment for committed purchases. Awarded orders are orders being documented through contracts that have not yet been signed.