Shoals signs merger deal for 1.6931 Array shares
Quarterly revenue rose 43.8%, but gross profit percentage fell to 31.9% from 37.0%, and nine-month operating cash flow was negative.
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.
Form Type
10-Q
Shoals Technologies Group, Inc. entered a merger agreement with Array Technologies, Inc. on November 4, 2026. If completed, each Shoals Class A share will be exchanged for 1.6931 Array common shares. Completion is subject to customary closing conditions, including government and regulatory approvals and approval by Shoals shareholders and Array stockholders; both boards approved the agreement.
For the quarter ended September 30, 2026, revenue was $195.3 million, up 43.8% from a year earlier, and net income was $17.9 million, up 50.4%. Gross profit percentage declined to 31.9% from 37.0%; Shoals attributed the decrease to inefficiencies during the new-facility ramp-up and transition, product mix, product-quality rework and corrective actions, and lease accounting amortization.
For the nine months ended September 30, 2026, revenue was $499.2 million and operating cash flow was $5.8 million used, versus $21.2 million provided a year earlier. As of September 30, Shoals estimated total wire-insulation-shrinkback losses of $73.0 million and reported a remaining warranty liability of $0.8 million. Backlog and awarded orders totaled $791.7 million.
2 points · 0 major1 major · 3 points
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.
Positive
- Moderate pointQuarterly revenue increased 43.8% to $195.3 million.
- Moderate pointQuarterly net income increased 50.4% to $17.9 million.
Negative
- Major pointWire-insulation-shrinkback estimated total losses were $73.0 million. 5.1% of market cap
- Moderate pointGross profit percentage declined to 31.9% from 37.0%.
- Moderate pointNine-month operating cash flow was $5.8 million used, versus $21.2 million provided a year earlier.
Filing Explained
Of the
Key Figures
Quarterly revenue: $195.3 million
Quarterly net income: $17.9 million
Gross profit percentage: 31.9%
+5 more
8 metrics
Quarterly revenue
$195.3 million
Three months ended September 30, 2026; up 43.8% year over year
Quarterly net income
$17.9 million
Three months ended September 30, 2026; up 50.4% year over year
Gross profit percentage
31.9%
Three months ended September 30, 2026; compared with 37.0% in 2025
Operating cash flow
$5.8 million used
Nine months ended September 30, 2026; $21.2 million provided in 2025
Merger exchange ratio
1.6931 Array common shares per Shoals Class A share
If the merger is completed
Estimated total wire-insulation-shrinkback losses
$73.0 million
As of September 30, 2026
Remaining recorded warranty liability
$0.8 million
Wire-insulation-shrinkback matter as of September 30, 2026
Backlog and awarded orders
$791.7 million
As of September 30, 2026
Key Terms
Adjusted EBITDA, awarded orders, take-or-pay provisions, retainage, +1 more
5 terms
Adjusted EBITDA financial
"We define Adjusted EBITDA as net income plus/(minus)"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
awarded orders financial
"awarded orders of $417.0 million are orders we are in the process of documenting a contract for"
Awarded orders are confirmed purchase contracts or job assignments a company has won from customers or buyers, often after submitting a bid or proposal. They matter to investors because they signal concrete, expected future revenue and help quantify a company’s sales pipeline and backlog—like a contractor winning a scheduled job that promises payment and work ahead, reducing uncertainty about upcoming cash flow and growth.
take-or-pay provisions financial
"contractual minimum purchase commitments with take-or-pay provisions"
A take-or-pay provision is a contract clause that requires one party, typically a buyer, to either take a minimum amount of goods or services from a supplier or pay a fee for the shortfall. For investors, these clauses create predictable revenue for the seller and potential cash obligations or liability for the buyer, similar to a subscription where you must pay whether you use the service or not, which affects cash flow, profitability and risk assessment.
retainage financial
"Retainage represents a contract asset for the portion of the contract price earned"
wire insulation shrinkback technical
"contraction of wire insulation (“wire insulation shrinkback”)"
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How did SHLS perform in the third quarter of 2026?
SHLS reported $195.3 million in revenue, up 43.8%, and $17.9 million in net income, up 50.4%, for the quarter ended September 30, 2026. Basic and diluted earnings per share were each $0.11, compared with $0.07 in the prior-year quarter.
What are the terms of the SHLS-Array merger?
Under the agreement entered on November 4, 2026, each Shoals Class A share will be exchanged for 1.6931 Array common shares if the merger is completed. Completion is subject to customary closing conditions, including government and regulatory approvals and approval by Shoals shareholders and Array stockholders.
How much backlog and awarded orders did SHLS report?
As of September 30, 2026, backlog and awarded orders totaled $791.7 million: $374.7 million of backlog and $417.0 million of awarded orders. Shoals estimated that about $371.3 million of backlog and $325.3 million of awarded orders had delivery dates within the next twelve months.
Why did SHLS gross profit percentage decline?
Shoals attributed the decline to operational inefficiencies during the ramp-up and transition into its new manufacturing facility, product mix, costs for product-quality rework and corrective actions, and incremental lease accounting amortization.
What loss estimate did SHLS report for wire insulation shrinkback?
As of September 30, 2026, Shoals estimated total losses of $73.0 million for the matter and reported a remaining recorded warranty liability of $0.8 million. The company stated that the liability could exceed the amount recorded.
AI-generated analysis. How Rhea-AI works. Not financial advice.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
For the quarterly period ended September 30, 2026
or
For the transition period from _________ to _________
Commission File Number: 001-39942
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||||||||
| (Registrant’s telephone number, including area code) | |||||
| N/A | ||
| (Former name, former address and former fiscal year, if changed since last report) | ||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | ☒ | |||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
| Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
As of October 28, 2026, the registrant had 168,471,900 shares of Class A common stock and no shares of Class B common stock outstanding. This number excludes 3,908,387 shares held by the registrant as Treasury Stock.
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TABLE OF CONTENTS
| ITEM | PAGE | |||||||
| PART I | ||||||||
| Item 1. | Financial Statements (Unaudited) | 1 | ||||||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 23 | ||||||
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 37 | ||||||
| Item 4. | Controls and Procedures | 37 | ||||||
| PART II | ||||||||
| Item 1. | Legal Proceedings | 37 | ||||||
| Item 1A. | Risk Factors | 37 | ||||||
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 40 | ||||||
| Item 3. | Defaults Upon Senior Securities | 40 | ||||||
| Item 4. | Mine Safety Disclosures | 40 | ||||||
| Item 5. | Other Information | 41 | ||||||
| Item 6. | Exhibits | 41 | ||||||
| SIGNATURES | 43 | |||||||
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FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (“Form 10-Q”) of Shoals Technologies Group, Inc. (the “Company,” “we,” “us,” “our,” and “Shoals”) 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 the timing and closing of the ARRAY Merger (as defined below) pursuant to the Agreement and Plan of Merger and Reorganization, dated November 4, 2026 (as may be amended from time to time, the “ARRAY Merger Agreement”), by and among Array Technologies, Inc., a Delaware corporation (“ARRAY”), Pensacola Merger Sub, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of ARRAY (“Merger Sub”), and the Company; whether Company shareholder approval, ARRAY stockholder approval and government and regulatory approvals are obtained; whether the proposed transaction occurs at all; the impact of the proposed transaction on our business; 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 (as defined in Note 8 to the notes to condensed consolidated financial statements); 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. 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.
Important factors that could cause actual results to differ materially from expectations are included in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of Part I and Item 1A “Risk Factors” of Part II of this Form 10-Q, as well as Part I Item 1A “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2025.
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. Some of the key factors that could cause actual results to differ from our expectations include the following:
•The risks associated with the ARRAY Merger Agreement pursuant to which, subject to the terms and conditions of the ARRAY Merger Agreement, Merger Sub will merge with and into the Company (the “ARRAY Merger”), with the Company surviving the ARRAY Merger as a direct, wholly-owned subsidiary of ARRAY, including (i) the Company’s shareholders may be unable to determine the value of consideration to be received in a completed ARRAY Merger because the exchange ratio is fixed and the market price of ARRAY common stock will fluctuate; (ii) the completion of the ARRAY Merger is subject to certain closing conditions that may not be satisfied or waived, including Shoals shareholder approval, ARRAY stockholder approval and certain governmental and regulatory approvals; (iii) an event, change or other circumstance could give rise to delays in completing the ARRAY Merger or the termination of the ARRAY Merger Agreement; (iv) the Company’s business or employee relationships
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may be subject to disruption or change due to the ARRAY Merger; (v) management’s time may be diverted from ongoing business operations and opportunities as a result of the ARRAY Merger; (vi) failure to complete the ARRAY Merger could negatively impact the share price and the future business and financial results of the Company; (vii) potential litigation against the Company could result in substantial costs, an injunction preventing the completion of the ARRAY Merger and/or a judgment resulting in the payment of damages; (viii) the Company will incur significant transaction and merger-related costs in connection with the ARRAY Merger; and (ix) the possibility that the expected benefits of the ARRAY Merger are not realized when expected or at all.
•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, 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.
•We are subject to risks from changes to trade restrictions, import tariffs, anti-dumping and countervailing duties. Such changes could adversely affect the amount or timing of our revenue, results of operations or cash flows.
•We have modified, and in the future may modify, our business strategy to abandon lines of business or implement new lines of business. 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.
•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.
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•Macroeconomic conditions, including high inflation, high interest rates, and geopolitical instability, impact our business and financial results.
•We are subject to risks related to our ability to protect, enforce, and defend our intellectual property.
•Acquisitions, joint ventures and/or investments and the failure to integrate acquired businesses, could disrupt our business and negatively impact our results of operations.
•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 and negatively impact revenue, results of operations, and cash flow.
•A significant drop in the price of electricity may harm our business, financial condition, results of operations and prospects.
•Failure of our information technology systems, including those managed by third parties, or cybersecurity incidents could disrupt our operations and adversely 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 harm 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.
•The market price of our Class A common stock may decline and may continue to be subject to significant volatility.
•Provisions in our amended and restated certificate of incorporation and amended and restated bylaws may have the effect of delaying or preventing a change of control or changes in our management.
•Our amended and restated certificate of incorporation also provides that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our shareholders, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
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PART I — FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited).
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 | $ | $ | |||||||||
| Accounts receivable, net | |||||||||||
| Unbilled receivables | |||||||||||
| Inventory | |||||||||||
| Insurance receivable | |||||||||||
| Other current assets | |||||||||||
| Total Current Assets | |||||||||||
| Property, plant and equipment, net | |||||||||||
| Goodwill | |||||||||||
| Other intangible assets, net | |||||||||||
| Deferred tax assets | |||||||||||
| Right-of-use operating lease assets | |||||||||||
| Other assets | |||||||||||
| Total Assets | $ | $ | |||||||||
| Liabilities and Stockholders’ Equity | |||||||||||
| Current Liabilities | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued expenses and other | |||||||||||
| Litigation settlement liability | |||||||||||
| Warranty liability—current portion | |||||||||||
| Deferred revenue | |||||||||||
| Total Current Liabilities | |||||||||||
| Revolving line of credit | |||||||||||
| Right-of-use operating lease liabilities | |||||||||||
| Warranty liability, less current portion | |||||||||||
| Other long-term liabilities | |||||||||||
| Total Liabilities | |||||||||||
| Commitments and Contingencies (Note 13) | |||||||||||
| Stockholders’ Equity | |||||||||||
Preferred stock, $ | |||||||||||
Class A common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
Treasury stock, at cost, | ( | ( | |||||||||
| Retained earnings | |||||||||||
| Total Stockholders' Equity | |||||||||||
| Total Liabilities and Stockholders’ Equity | $ | $ | |||||||||
See accompanying notes to condensed consolidated financial statements.
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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 | $ | $ | $ | $ | |||||||||||||||||||
| Cost of revenue | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| General and administrative expenses | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Total operating expenses | |||||||||||||||||||||||
| Income from operations | |||||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | |||||||||||||||||||
| Interest income | |||||||||||||||||||||||
| Litigation settlement expense, net of recoveries | ( | ( | |||||||||||||||||||||
| Gain (loss) on sale of assets | ( | ( | ( | ||||||||||||||||||||
| Foreign currency gain (loss) | ( | ||||||||||||||||||||||
| Income before income taxes | |||||||||||||||||||||||
| Income tax expense | ( | ( | ( | ( | |||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Earnings per share of Class A common stock: | |||||||||||||||||||||||
| Basic | $ | $ | $ | $ | |||||||||||||||||||
| Diluted | $ | $ | $ | $ | |||||||||||||||||||
| Weighted average shares of Class A common stock outstanding: | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
See accompanying notes to condensed consolidated financial statements.
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Shoals Technologies Group, Inc.
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)
(in thousands, except shares)
For the three and nine months ended September 30, 2026
| Class A Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Total Stockholders' Equity | |||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Activity under equity-based compensation plan | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
| Vesting of restricted stock units | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Activity under equity-based compensation plan | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
| Vesting of restricted stock units | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Activity under equity-based compensation plan | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
| Vesting of restricted stock units | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
| Balance at September 30, 2026 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||
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Shoals Technologies Group, Inc.
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) (continued)
(in thousands, except shares)
For the three and nine months ended September 30, 2025
| Class A Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Total Stockholders' Equity | |||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Activity under equity-based compensation plan | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
| Vesting of restricted / performance stock units | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Activity under equity-based compensation plan | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
| Vesting of restricted stock units | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
| Excise taxes on treasury stock transactions | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Activity under equity-based compensation plan | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
| Vesting of restricted stock units | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||
See accompanying notes to condensed consolidated financial statements.
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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 | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Amortization/write off of deferred financing costs | |||||||||||
| Equity-based compensation | |||||||||||
| Provision for obsolete or slow-moving inventory | |||||||||||
| Provision for warranty expense | |||||||||||
| Deferred taxes | |||||||||||
| Other | ( | ||||||||||
| Changes in assets and liabilities: | |||||||||||
| Accounts receivable | ( | ( | |||||||||
| Unbilled receivables | |||||||||||
| Inventory | ( | ( | |||||||||
| Other assets | ( | ||||||||||
| Accounts payable | ( | ||||||||||
| Accrued expenses and other | |||||||||||
| Warranty liability | ( | ( | |||||||||
| Litigation receivable and settlement liabilities | |||||||||||
| Deferred revenue | |||||||||||
| Net Cash Provided by (Used in) Operating Activities | ( | ||||||||||
| Cash Flows from Investing Activities | |||||||||||
| Purchases of property, plant and equipment | ( | ( | |||||||||
| Proceeds from sale of property, plant and equipment | |||||||||||
| Net Cash Used in Investing Activities | ( | ( | |||||||||
| Cash Flows from Financing Activities | |||||||||||
| Employee withholding taxes related to net settled equity awards | ( | ( | |||||||||
| Proceeds from revolving credit facility | |||||||||||
| Repayments of revolving credit facility | ( | ( | |||||||||
| Excise taxes on treasury stock transactions | |||||||||||
| Net Cash Provided by (Used in) Financing Activities | ( | ||||||||||
| Net Increase (Decrease) in Cash and Cash Equivalents | ( | ||||||||||
| Cash and Cash Equivalents—Beginning of Period | |||||||||||
| Cash and Cash Equivalents—End of Period | $ | $ | |||||||||
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Shoals Technologies Group, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited) (continued)
(in thousands)
| Nine Months Ended September 30, | |||||||||||
| Supplemental Cash Flows Information: | 2026 | 2025 | |||||||||
| Cash paid for interest | $ | $ | |||||||||
| Cash paid (refunded or received) for taxes | $ | ( | $ | ( | |||||||
| Non-cash investing and financing activities: | |||||||||||
| Purchased equipment not yet paid for | $ | $ | |||||||||
| Right of use operating lease assets obtained in exchange for lease obligations | $ | $ | |||||||||
| Right of use operating lease liabilities obtained in exchange for lease assets | $ | $ | |||||||||
See accompanying notes to condensed consolidated financial statements.
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Shoals Technologies Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
1. Organization and Business
Shoals Technologies Group, Inc. (the “Company”) is headquartered in Portland, Tennessee and is a leading design-engineering company and manufacturer of advanced electrical infrastructure solutions for mission‑critical applications across solar photovoltaic (PV), battery energy storage solutions (BESS), and data center power systems for the global energy transition market.
As of September 30, 2026, the Company owns directly or indirectly five subsidiaries: Shoals Intermediate Parent Inc., Shoals Technologies Group, LLC, Shoals International, LLC, Shoals Energy Spain, S.L. and Shoals Energy Australia Pty Ltd.
2. Summary of Significant Accounting Policies
Basis of Accounting and Presentation
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.
Unaudited Interim Financial Information
The accompanying condensed consolidated balance sheets as of September 30, 2026 and December 31, 2025, the condensed consolidated statements of operations, changes in stockholders’ equity and cash flows for the three and nine months ended September 30, 2026 and 2025 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, 2026 and the results of its operations and its cash flows for the three and nine months ended September 30, 2026 and 2025. The financial data and other information disclosed in these notes related to the three and nine months ended September 30, 2026 and 2025 are also unaudited. The results for the three and nine months ended September 30, 2026 are not necessarily indicative of results to be expected for the year ending December 31, 2026, any other interim periods, or any future year or period. The balance sheet as of December 31, 2025 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, 2025.
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
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Shoals Technologies Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
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.
Customer Concentrations
The Company had the following revenue concentration representing approximately 10% or more of revenue for the nine months ended September 30, 2026 and 2025 and related accounts receivable concentration as of September 30, 2026 and December 31, 2025:
| 2026 | 2025 | ||||||||||||||||||||||
| Revenue % | Accounts Receivable % | Revenue % | Accounts Receivable % | ||||||||||||||||||||
| Customer A | % | % | % | % | |||||||||||||||||||
| Customer B | % | * | % | * | |||||||||||||||||||
| Customer D | % | % | * | * | |||||||||||||||||||
*Customer accounted for less than 10% of total revenue or accounts receivable in the period.
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 revolving line of credit 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
Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03.
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Shoals Technologies Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which modernizes the accounting for internal-use software to current development practices, clarifies when to begin capitalizing costs, and enhances disclosure requirements. This update is effective for interim and annual periods beginning after December 15, 2027, with early adoption permitted. ASU 2025-06 is not expected to significantly change our current accounting for internal-use software.
In December 2025, the FASB issued ASU 2025-10, Accounting for Government Grants Received by Business Entities, to establish guidance on the recognition, measurement, and presentation of government grants received by business entities. The new guidance leverages the principles in the accounting framework for government assistance in International Accounting Standard 20 "Accounting for Government Grants and Disclosure of Government Assistance". The new guidance is effective for public business entities in annual periods beginning after December 15, 2028, with early adoption permitted. ASU 2025-10 is not expected to significantly change our current accounting for incentives from federal, state, and local governments.
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 consolidated financial statements.
3. Accounts Receivable
Accounts receivable, net consists of the following (in thousands):
| September 30, 2026 | December 31, 2025 | ||||||||||
| Accounts receivable | $ | $ | |||||||||
| Less: allowance for credit losses | ( | ( | |||||||||
| Accounts receivable, net | $ | $ | |||||||||
4. Inventory
Inventory consists of the following (in thousands):
| September 30, 2026 | December 31, 2025 | ||||||||||
| Raw materials | $ | $ | |||||||||
| Work in process | |||||||||||
| Finished goods | |||||||||||
| Allowance for obsolete or slow-moving inventory | ( | ( | |||||||||
| Inventory | $ | $ | |||||||||
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Shoals Technologies Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
5. Property, Plant and Equipment
Property, plant, and equipment, net consists of the following (in thousands):
| Estimated Useful Lives (Years) | |||||||||||||||||
| September 30, 2026 | December 31, 2025 | ||||||||||||||||
| Land | N/A | $ | $ | ||||||||||||||
| Building and land improvements | |||||||||||||||||
| Machinery and equipment | |||||||||||||||||
| Furniture and fixtures | |||||||||||||||||
| Vehicles | |||||||||||||||||
| Software | |||||||||||||||||
| Construction in progress | |||||||||||||||||
| Less: accumulated depreciation | ( | ( | |||||||||||||||
| Property, plant and equipment, net | $ | $ | |||||||||||||||
Depreciation expense for the three months ended September 30, 2026 and 2025 was $3.2 million and $1.5 million, respectively. During the three months ended September 30, 2026 and 2025, $2.7 million and $1.2 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.
Depreciation expense for the nine months ended September 30, 2026 and 2025 was $8.1 million and $4.3 million, respectively. During the nine months ended September 30, 2026 and 2025, $6.8 million and $3.6 million, respectively, of depreciation expense was allocated to cost of revenue and $1.3 million and $0.7 million, respectively, of depreciation expense was allocated to operating expenses in each period.
6. Goodwill and Other Intangible Assets
Goodwill
There were no changes in the carrying amount of goodwill during the nine months ended September 30, 2026. Goodwill totaled $69.9
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Shoals Technologies Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
Other Intangible Assets
Other intangible assets, net consists of the following (in thousands):
| Estimated Useful Lives (Years) | September 30, 2026 | December 31, 2025 | |||||||||||||||
| Amortizable: | |||||||||||||||||
| Costs: | |||||||||||||||||
| Customer relationships | $ | $ | |||||||||||||||
| Developed technology | |||||||||||||||||
| Trade names | |||||||||||||||||
| Total amortizable intangibles | |||||||||||||||||
| Accumulated amortization: | |||||||||||||||||
| Customer relationships | |||||||||||||||||
| Developed technology | |||||||||||||||||
| Trade names | |||||||||||||||||
| Total accumulated amortization | |||||||||||||||||
| Total other intangible assets, net | $ | $ | |||||||||||||||
Amortization expense related to intangible assets amounted to $1.9 5.7
7. Accrued Expenses and Other
Accrued expenses and other consists of the following (in thousands):
| September 30, 2026 | December 31, 2025 | ||||||||||
| Accrued compensation | $ | $ | |||||||||
| Accrued interest | |||||||||||
| Accrued rebates | |||||||||||
| Accrued professional fees | |||||||||||
| Contract liabilities | |||||||||||
| Other accrued expenses | |||||||||||
| Total accrued expenses and other | $ | $ | |||||||||
8. 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, including product rework prior to installation, a provision for estimated future costs related to such matters is recorded when they are probable and reasonably estimable. As of September 30, 2026 and December 31, 2025 our estimated liability for these matters was approximately $4.9 million and $0.3 million, respectively.
For the three and nine months ended September 30, 2026 the Company recorded $4.6 million and $8.9 million, respectively, in expense related to product quality remediation, rework activities, and associated
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Shoals Technologies Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
warranty obligations. For the three and nine months ended September 30, 2025, the Company recorded zero and $0.3 million, respectively, related to such matters.
Wire Insulation Shrinkback Warranty
The Company was notified by certain customers that a subset of wire harnesses used in its EBOS solutions has presented unacceptable levels of contraction of wire insulation (“wire insulation shrinkback”). Based upon the Company’s assessment, the Company currently believes the wire insulation shrinkback is related to defective wire manufactured by Prysmian Cables and Systems USA, LLC (“Prysmian”). Based on the Company’s continued analysis of information available as of the date of this Quarterly Report, the Company determined that a loss was both probable and reasonably estimable.
As of September 30, 2026, the estimate of potential losses remains unchanged from the estimate provided as of December 31, 2025. In accordance with ASC 450, Contingencies, the Company believes the total estimated loss for this matter is $73.0 million, which represents the best estimate of the potential loss as of September 30, 2026, of which $72.2 million has been incurred to date. As of September 30, 2026, our recorded remaining warranty liability related to this matter was $0.8 million. It is possible that our liability could exceed the amount recorded, including due to additional reports of wire insulation shrinkback at previously affected and reported solar projects or at projects not previously reported or otherwise identified. Any excess amounts remain uncertain.
The estimated loss, as revised, continues to be based on several assumptions, including estimated failure rates, future notification of impacted harnesses, the potential magnitude of engineering, procurement and construction firm’s labor cost to identify and perform the repair and replacement of impacted harnesses, materials replacement cost, planned remediation method, and inspection costs. While our wire insulation shrinkback warranty liability represents our best estimate of expected losses, the Company will monitor future activity to best estimate potential losses. The Company has previously increased, and may further increase in the future, its estimated warranty liability from its current estimate based on available information, including future remediation efforts and the scope of future replacements, if any. Such increase may be material. The Company does not maintain insurance for product warranty issues and has commenced a lawsuit against Prysmian, as discussed in more detail under Wire Insulation Shrinkback Litigation section of Note 13 - Commitments and Contingencies. Because the lawsuit against Prysmian is ongoing, potential recovery from Prysmian is not considered probable as defined in ASC 450, Contingencies, and has not been considered in our estimate of the warranty liability as of September 30, 2026.
The Company recorded no
Warranty liability, which includes both general warranty and wire insulation shrinkback warranty, is estimated as follows (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Warranty liability, beginning of period | $ | $ | $ | $ | |||||||||||||||||||
| Warranty expense | |||||||||||||||||||||||
| Payments | ( | ( | ( | ( | |||||||||||||||||||
| Warranty liability, end of period | |||||||||||||||||||||||
| Less: current portion | |||||||||||||||||||||||
| Warranty liability, net of current portion | $ | $ | $ | $ | |||||||||||||||||||
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Shoals Technologies Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
9. Long-Term Debt
Long-term debt consists of the following (in thousands):
| September 30, 2026 | December 31, 2025 | ||||||||||
| Revolving Credit Facility | $ | $ | |||||||||
Senior Secured Credit Agreement
The Company entered into a senior secured credit agreement (as amended, the “Senior Secured Credit Agreement”), which consisted of (i) a senior secured six-year term loan facility (the “Term Loan Facility”) and (ii) a revolving credit facility (the “Revolving Credit Facility”).
On June 10, 2026 (the “Effective Date”), the Company entered into Amendment No. 7 (the “amendment”) to the Senior Secured Credit Agreement. The amendment, among other things, (i) provides for a new tranche of incremental revolving loans in an aggregate principal amount of $50,000,000 , providing an aggregate amount available for borrowing under the Revolving Credit Facility from $200.0 million to $250.0 million, for a period of 18 months after the Effective Date, after which the amount available for borrowing will return to a maximum of $200.0 million, (ii) replaces the financial covenant for the maximum consolidated first lien secured leverage ratio permitted under the Amended Credit Agreement with the maximum consolidated total leverage ratio of 4.00 :1.00 (with temporary increases to the maximum consolidated total leverage ratio in the event a material acquisition closes), and (iii) amends certain other covenants under the Amended Credit Agreement in a manner customary for facilities of this type. The maturity date applicable to the Revolving Credit Facility is March 19, 2029.
The Revolving Credit Facility bears interest at a rate equal to, at the Company’s election, either adjusted term SOFR or base rate (each, as defined in the Senior Secured Credit Agreement) plus an applicable interest rate margin, based upon the consolidated first lien secured leverage ratio. The applicable interest rate margin varies from 2.25 % to 3.00 % per annum for term benchmark loans and 1.25 % to 2.00 % per annum for base rate loans.
As of September 30, 2026, the interest rate on the Revolving Credit Facility ranged from 6.83 % to 7.14 % for benchmark loans, representing SOFR plus 3.00 %, and was 9.00 % for base rate loans, representing Prime Rate plus 2.00 %. As of September 30, 2026, there were $163.8 million of outstanding borrowings, $1.4 million of outstanding letters of credit, and $84.8 million of availability under the Revolving Credit Facility.
The Senior Secured Credit Agreement contains affirmative and negative covenants that are customary for financings of this type, including covenants that restrict our 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.
As discussed above, the Revolving Credit Facility also includes a consolidated leverage ratio financial covenant that is tested on the last day of each fiscal quarter. As of September 30, 2026, the Company was in compliance with all the required covenants.
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Shoals Technologies Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
10. Earnings per Share ("EPS")
Basic EPS of Class A common stock is computed by dividing net income by the weighted average number of shares of Class A common stock outstanding during the period (which does not include treasury stock). Diluted EPS of Class A common stock is computed similarly to basic EPS except that the weighted average shares outstanding are increased to include additional shares from the assumed exercise of any common stock equivalents using the treasury stock method, if dilutive. The Company’s restricted/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, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net income - basic and diluted | $ | $ | $ | $ | |||||||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted average shares of Class A common stock outstanding - basic | |||||||||||||||||||||||
| Effect of dilutive securities: | |||||||||||||||||||||||
| Restricted / performance stock units | |||||||||||||||||||||||
| Weighted average shares of Class A common stock outstanding - diluted | |||||||||||||||||||||||
| Earnings per share of Class A common stock - basic | $ | $ | $ | $ | |||||||||||||||||||
| Earnings per share of Class A common stock - diluted | $ | $ | $ | $ | |||||||||||||||||||
11. Equity-Based Compensation
2021 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. On February 26, 2026, the Company filed a registration statement on Form S-8 to register an additional 7,208,912 shares of our common stock issuable under the 2021 Incentive Plan.
Restricted Stock Units
During the nine months ended September 30, 2026, the Company granted 972,616 restricted stock units (“RSUs") to certain employees, officers and directors of the Company. The RSUs granted during 2026 have grant date fair values ranging from $5.96 to $12.18 per unit and vest ratably over 3 years, except director grants, which vest over 1 year.
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Shoals Technologies Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
Activity under the 2021 Incentive Plan for RSUs was as follows:
| Nine Months Ended September 30, 2026 | |||||||||||
| Restricted Stock Units | Weighted Average Price | ||||||||||
| Outstanding, December 31, 2025 | $ | ||||||||||
| Granted | $ | ||||||||||
| Vested | ( | $ | |||||||||
| Forfeited | ( | $ | |||||||||
| Outstanding, September 30, 2026 | $ | ||||||||||
Performance Stock Units
During the nine months ended September 30, 2026, the Company granted an aggregate of 432,943 Performance Stock Units ("PSUs") to certain executives. The PSUs granted during 2026 cliff vest after 3 years based upon the level of achievement of certain revenue and adjusted diluted EPS targets during the performance period commencing January 1, 2026 and ending on December 31, 2028, and contain a total shareholder return modifier which could increase or decrease the ultimate number of shares of Class A common stock issued to the executives. The PSUs were valued based on assumed vesting at target and using the market value of the Class A common stock on the grant dates with a value of $10.70 .
Activity under the 2021 Incentive Plan for PSUs was as follows:
| Nine Months Ended September 30, 2026 | |||||||||||||||||||||||
| Performance Stock Units | Weighted Average Price | ||||||||||||||||||||||
| Outstanding, December 31, 2025 | $ | ||||||||||||||||||||||
| Granted | $ | ||||||||||||||||||||||
| Vested | $ | ||||||||||||||||||||||
| Forfeited | ( | $ | |||||||||||||||||||||
| Outstanding, September 30, 2026 | $ | ||||||||||||||||||||||
The Company recognized equity-based compensation of $4.1 million and $2.4 million, respectively, for the three months ended September 30, 2026 and 2025 and $11.8 million and $7.7 million, respectively, for the nine months ended September 30, 2026 and 2025. As of September 30, 2026, the Company had $19.7 million of unrecognized compensation costs which is expected to be recognized over a weighted average period of 1.9 years.
12. Stockholders’ Equity
Common Stock Economic and Voting Rights
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Shoals Technologies Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
13. 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. The Company records legal costs associated with loss contingencies, including fees and costs associated with preservation of evidence in connection with the wire insulation shrinkback litigation, as incurred.
Intellectual Property Litigation
The 2023 IP Litigations. 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 Vista, California, and its related foreign entities (together, “Hikam”), and Voltage LLC, a limited liability company based in Chapel Hill, North Carolina, and a related foreign entity (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. Also on May 4, 2023, the Company filed complaints against Hikam in the U.S. District Court for the Southern District of California, and against Voltage in the U.S. District Court for the Middle District of North Carolina on the same subject matter. The District Court actions seek injunctive relief and monetary damages. The District Court were stayed pending the final disposition of the ITC investigation. On August 30, 2024, the Administrative Law Judge issued a Final Initial Determination finding that Voltage violated Section 337 of the Tariff Act of 1930, as amended, by importing infringing LYNX trunk bus products into the United States. However, on January 14, 2025, the ITC reversed the Administrative Law Judge’s Final Initial Determination and issued a Notice of a Commission Final Determination Finding No Violation of Section 337. The Company appealed the ITC’s decision to the Federal Circuit on February 11, 2025. On February 11, 2026, the Company and Hikam filed a voluntary, joint-dismissal that will end the legal proceedings as they pertain to Hikam. On October 22, 2026, the Company voluntarily dismissed its appeal of the ITC’s Final Determination before the Federal Circuit. The proceedings in the Middle District of North Carolina pertaining to Voltage are ongoing.
The 2025 IP Litigations. On January 9, 2025, the Company filed a patent infringement complaint at the ITC against Voltage. This complaint cites two new patents (the ‘375 and ‘376 Patents) that cover the Company’s BLA solutions. Also on January 9, 2025, the Company filed a complaint against Voltage in the U.S. District Court for the Middle District of North Carolina (the “District Court case”) on the same subject matter. These complaints seek injunctive relief and, in the District Court case, damages for reasonable royalty and lost profits.
On February 6, 2026, an Administrative Law Judge at the ITC issued an Initial Determination finding that Voltage’s products infringed on the Company’s ‘375 and ‘376 patents.
On June 25, 2026, the ITC issued its Final Determination, finding that Voltage violated Section 337 by importing products that infringe Shoals’ ‘375 and ‘376 patents. Accordingly, the ITC issued a Limited Exclusion Order (“LEO”) against Voltage. The LEO prohibits Voltage from importing into the U.S. infringing photovoltaic trunk bus cable and related components.
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Shoals Technologies Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
In the District Court case, a bench trial on certain equitable defenses raised by Voltage was held February 25 - March 5, 2026. On June 5, 2026, the District Court issued its opinion on the equitable defenses that Voltage raised in this bench trial. The court ruled that Voltage did not present sufficient evidence to support a ruling of inequitable conduct or unclean hands. Accordingly, the court denied Voltage’s request to deem Shoals’ ‘375, ‘376, and ‘295 patents unenforceable.
On February 17, 2026, the Company filed a motion for a preliminary injunction seeking to prevent Voltage from manufacturing, distributing, or selling its infringing products in the United States.
The District Court case was tried to a jury beginning on August 13, 2026. On August 26, 2026, the jury returned a verdict in favor of the Company on all matters submitted to it, finding that Voltage willfully infringed certain Company patents and awarding the Company $96.4 million in damages based on lost profits and price erosion. Following the jury’s verdict, the District Court issued a preliminary injunction covering the infringing product line. Voltage has indicated its intention to pursue post-trial remedies, including review of the verdict and a new trial.
The Company continues to vigorously litigate these cases. However, at this stage, the Company is unable to predict the ultimate outcome or impact on its business and financial results. The Company is accounting for these matters 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 against Prysmian in the U.S. District Court for the Middle District of Tennessee, Nashville Division. The Company filed an amended complaint on December 4, 2024. The amended complaint alleges that the Company suffered damages caused by defective wire Prysmian sold to the Company from approximately 2019 through approximately 2022. The amended complaint alleges that the wire at issue in the litigation has presented unacceptable levels of wire insulation shrinkback. The amended complaint includes, among other causes of action, product liability, breach of contract, breach of warranty, indemnity, and negligence claims. Mediation in this case is ongoing.
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 Prysmian wire alleged to be defective, and other legal and equitable relief. The Company is vigorously pursuing its amended complaint, and as the Company continues to assess this matter, it may, from time to time, amend, update or supplement the amended 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.
Securities Litigation
On March 21, 2024, a purported stockholder filed a putative securities class action against the Company and certain of its current and former executive officers in the United States District Court for the Middle District of Tennessee, Nashville Division, captioned Westchester Putnam Counties Heavy & Highway Laborers Local 60 Benefits Fund v. Shoals Technologies Group, Inc., et al. The complaint alleges violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder, based on allegedly false and misleading statements and omissions relating to the wire insulation shrinkback matter. The complaint seeks unspecified monetary damages, recovery of fees and costs, and other relief that the court may find
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Shoals Technologies Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
appropriate. On May 8, 2024 and May 15, 2024, respectively, similar class action complaints were filed in the same court against the Company and certain current and former officers, but these complaints also named as defendants the Company’s Board of Directors, and the selling stockholders and underwriters of the Company’s secondary public offering. While the allegations are largely similar to the first complaint, these new complaints also alleged violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933. These cases were captioned Oklahoma Police Pension and Retirement System v. Shoals Technologies Group, Inc. and Kissimmee Utility Authority Employees Retirement Plan v. Shoals Technologies Group, Inc.
On May 24, 2024, all of these cases were consolidated into one action captioned In re Shoals Technologies Group, Inc. Securities Litigation. Plaintiff Erste Asset Management GmbH has been appointed Lead Plaintiff. On December 9, 2024, Lead Plaintiff and plaintiff Kissimmee Utility Authority Employees’ Retirement Plan filed a consolidated complaint, and on February 4, 2025, Plaintiffs filed an amended complaint. The Company filed a motion to dismiss the amended complaint on February 18, 2025. Plaintiffs filed an opposition to the motion to dismiss on April 21, 2025. On September 30, 2025, the court issued its ruling on the motion to dismiss, granting it in part and denying it in part. On January 21, 2025, Plaintiffs filed a motion for class certification, appointment of class representatives, and approval of class counsel. Defendants’ opposition to Plaintiffs’ motion is due April 6, 2026. Plaintiffs’ reply brief in support of their motion is due May 21, 2026. In December 2025 and January 2026, the Company and the Plaintiffs engaged in court-ordered mediation. On April 28, 2026, the Company and the Plaintiffs submitted a Stipulation and Agreement of Settlement to the United States District Court for the Middle District of Tennessee, Nashville Division. On May 4, 2026, the District Court granted preliminary approval of the settlement. The settlement amount is $70.0 million, of which $64.8 million is fully covered by the Company’s insurance. The Company and its insurers made an initial payment of $65.5 million in June 2026. There is a remaining settlement litigation liability on the Consolidated Balance Sheet of $4.5 million. For the three and nine months ended September 30, 2026, the Company recorded zero and $5.3 million of settlement expense on the Consolidated Statement of Operations related to this matter.
On September 29, 2026, the court held the final settlement hearing, as stipulated by the preliminary settlement order. On September 30, 2026, the court entered an order and final judgment, approving the settlement and dismissing the case with prejudice.
Derivative Litigation
On May 16, 2024, a derivative stockholder action was filed against certain current and former officers and directors of the Company in the United States District Court for the Middle District of Tennessee, Nashville Division, captioned Corwin v. Forth, et al. The complaint asserts claims for breach of fiduciary duty relating to the wire insulation shrinkback matter. The complaint seeks unspecified monetary damages, restitution, the adoption of certain governance reforms, recovery of fees and costs, and other relief that the court may find appropriate. The Company is named as a nominal defendant only. On July 24, 2024, another derivative stockholder action was filed against certain current and former officers and directors of the Company in the same court, captioned Ouellet v. Whitaker et al. The complaint asserts, among others, claims for breach of fiduciary duty, gross mismanagement, abuse of control, waste of corporate assets, unjust enrichment, and violations of Section 14(a) of the Exchange Act, and insider trading, all of which relate to the wire insulation shrinkback matter. The complaint seeks unspecified monetary damages, restitution, the adoption of certain governance reforms, recovery of fees and costs, and other relief that the court may find appropriate. The Company is named as a nominal defendant only. On August 21, 2024, these derivative stockholder actions were consolidated into a single action captioned In re Shoals Technologies Group, Inc. Derivative Litigation (the “Tennessee Derivative Action”).
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Shoals Technologies Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
On March 26, 2025, another derivative stockholder action was filed against certain current and former officers and directors of the Company in the same court as the consolidated action, captioned Norman v. Whitaker, et al. The complaint asserts, among others, claims for violations of Sections 14(a) and 20(a) of the Exchange Act, breach of fiduciary duty, insider trading, and unjust enrichment, all of which relate to the wire insulation shrinkback matter. The complaint seeks unspecified monetary damages, restitution, the adoption of certain governance reforms, recovery of fees and costs, and other relief that the court may find appropriate. The Company is named as a nominal defendant only. On April 11, 2025, the Norman action was consolidated with the Tennessee Derivative Action. On January 19, 2026, the parties in the Tennessee Derivative Action filed a stipulation to stay the Tennessee Derivative Action until 60 days following the conclusion of the January 2026 mediation in the Securities Litigation.
On December 2, 2025, another derivative stockholder action was filed against certain current and former officers and directors of the Company in the Delaware Court of Chancery, captioned Gipsman v. Whitaker, et al. (the “Delaware Derivative Action”). The Delaware Derivative Action asserts claims for breach of fiduciary duty, insider trading, unjust enrichment, and corporate waste, all of which relate to the wire insulation shrinkback matter. The complaint seeks unspecified monetary damages, restitution, the adoption of certain governance reforms, recovery of fees and costs, and other relief that the court may find appropriate. The Company is named as a nominal defendant only. On February 25, 2026, the court entered an order staying the case pending the earlier of (i) the close of fact discovery in the Securities Litigation; or (ii) the lifting of the stay in the Tennessee Derivative Action.
On May 8, 2026, the parties in the Tennessee Derivative Action and Delaware Derivative Action attended a mediation proceeding. Though the mediation did not result in settlement, the parties continued to negotiate and agreed on a binding term sheet to settle the Tennessee Derivative Action and the Delaware Derivative Action. The settlement requires the Company to make certain corporate governance reforms and does not include a monetary component. The parties have agreed to a mediator’s proposal that the attorneys for plaintiffs will seek a $1.5 million fee award, subject to final court approval. The Company’s first-layer side A carrier has agreed to pay $0.5 million of the fee award. Accordingly, the Company has recorded an accrual for litigation settlement and corresponding insurance receivable on the Consolidated Balance Sheet as of September 30, 2026. The Company has recorded a settlement expense of $1.0 million on the Consolidated Statement of Operations for the three months ended September 30, 2026. The parties have entered into a settlement stipulation and are in the process of finalizing the motion to seek preliminary approval. The parties to the Tennessee Derivative Action filed a stipulation on October 28, 2026 to extend the stay until November 11, 2026, while the parties complete the process of finalizing the motion to seek preliminary approval for the settlement.
On June 22, 2026, another derivative stockholder action was filed against certain current and former officers and directors of the Company in the United States District Court for the Middle District of Tennessee, Nashville Division, captioned Cecil v. Bardos, et al. (the “Cecil Derivative Action”). The complaint alleges violations of Section 14(a), breach of fiduciary duty, insider-trading claims, unjust enrichment, and waste, based on allegedly false and misleading statements and omissions relating to the wire insulation shrinkback matter. The complaint seeks unspecified monetary damages, recovery of fees and costs, and other relief that the court may find appropriate. On September 1, 2026, the parties to the Cecil Derivative Action jointly moved to stay all deadlines in light of plaintiff’s agreement to become a party to the binding term sheet in the Tennessee Derivative Action. The court granted the stay motion on September 2, 2026, and administratively closed the case.
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Shoals Technologies Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
Guarantees and Surety Bonds
The Company has provided financial guarantees to support payment obligations of a vendor. The Company has not recorded any liabilities for these financial guarantees in its consolidated balance sheets, because the Company has calculated the estimated fair value of the guarantee and determined it to be immaterial based upon the current facts and circumstances that would trigger a payment obligation.
The Company provides surety bonds to various parties as required for certain transactions initiated during the ordinary course of business to guarantee the Company’s performance in accordance with contractual or legal obligations. These off-balance sheet arrangements do not adversely impact the Company’s liquidity or capital resources. As of September 30, 2026, the Company had surety bonds outstanding of $50.3 million.
14. Income Taxes
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. The resulting provision is adjusted for the tax effect of discrete items required to be recorded during the period. At the end of each interim period, the Company adjusts its estimate of the effective tax rate expected to be applicable for the full fiscal year.
In the nine months ended September 30, 2026 and 2025, our effective tax rate for continuing operations was 24.2 % and 27.0 %, respectively. The difference between the effective tax rate and the statutory tax rate is primarily attributable to nondeductible compensation under Section 162(m) and discrete adjustments related to RSU and PSU shortfalls and windfalls. The decrease in the effective tax rate for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025, was primarily due to stock compensation tax windfalls and the reversal of a related Section 162(m) deferred tax asset valuation allowance in 2026, compared to stock compensation tax shortfalls recognized in 2025.
15. Revenue Recognition
Disaggregation of revenue
Based on ASC 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, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| System solutions | $ | $ | $ | $ | |||||||||||||||||||
| Components | |||||||||||||||||||||||
| Total revenue | $ | $ | $ | $ | |||||||||||||||||||
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Shoals Technologies Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
Contract Balances
The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables, retainage, and deferred revenue 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):
| Location on the Condensed Consolidated Balance Sheets | September 30, 2026 | December 31, 2025 | ||||||||||||
| Billed accounts receivable | Accounts receivable, net | $ | $ | |||||||||||
| Retainage | Accounts receivable, net | $ | $ | |||||||||||
| Contract liabilities | Accrued expenses and other | $ | $ | |||||||||||
| Unbilled receivables | Unbilled receivables | $ | $ | |||||||||||
| Deferred revenue | Deferred revenue | $ | $ | |||||||||||
| Accrued rebates | Accrued expenses and other | $ | $ | |||||||||||
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.
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.
For certain contracts, we provide customers with incentives upon entering into multi-year agreements or volume specific commitments. Any up-front incentives to customers that are not made in exchange for distinct goods and services are capitalized as a contract asset, which are subsequently recognized as a reduction to revenue over the term of the customer arrangements.
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, 2026, $7.3 million and $32.4 million of deferred revenue recorded as of December 31, 2025 was recognized in revenue. During the three and nine months ended September 30, 2025, $1.2 million and $13.3 million of deferred revenue recorded as of December 31, 2024 was recognized in revenue.
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Shoals Technologies Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
16. Segment Reporting
The Company is organized and operates as one
The accounting policies of the consolidated segment are the same as those described in the summary of significant accounting policies. The CODM assesses performance of the Company and decides how to allocate resources based on income from operations and net income that is also reported on the consolidated income statement. The CODM is involved in determining and reviewing projected net income and income from operations as part of the annual operating plan process. Throughout the year, the CODM considers forecast to actual results and variances on a monthly and quarterly basis to allocate resources for the Company.
The following table presents selected financial information with respect to the Company’s single operating segment for the three and nine months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Revenue | $ | $ | $ | $ | |||||||||||||||||||
| Cost of revenue | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| General and administrative expenses | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Total operating expenses | |||||||||||||||||||||||
| Income from operations | |||||||||||||||||||||||
Non-operating income/(expense) (1) | ( | ( | ( | ( | |||||||||||||||||||
| Income tax expense | ( | ( | ( | ( | |||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
All of the Company's long-lived tangible assets, as well as the Company's operating lease right-of-use assets recognized on the Condensed Consolidated Balance Sheets are located within the United States.
17. Subsequent Events
On November 4, 2026, we entered into the ARRAY Merger Agreement with ARRAY. Upon closing, each share of the Company’s Class A common stock will be exchanged for 1.6931 shares of ARRAY common stock. The closing of the ARRAY Merger is subject to the satisfaction of customary closing conditions, including receipt of required government and regulatory approvals and approval by Shoals shareholders and ARRAY stockholders. If completed, the ARRAY Merger is expected to have a material impact on our business, results of operations and financial condition. The ARRAY Merger Agreement has been approved by each of the Board of Directors of the Company and ARRAY.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with our consolidated financial statements and the related notes and other financial information included in our Annual Report on Form 10-K for the year ended December 31, 2025 (“2025 Form 10-K”) and this Quarterly Report on Form 10-Q (“Form 10-Q”). In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. For this purpose, any statements contained in this Form 10-Q that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate” or “continue” or comparable terminology are intended to identify forward-looking statements. Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under the sections of our 2025 Form 10-K and this Form 10-Q captioned “Forward-Looking Statements” and “Risk Factors”.
This MD&A contains the presentation of Adjusted Gross Profit, Adjusted Gross Profit Percentage, Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted Earnings per Share, which are not presented in accordance with generally accepted accounting principles in the U.S. (“GAAP”). Adjusted Gross Profit, Adjusted Gross Profit Percentage, Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted Earnings per Share are being presented because management believes they provide investors and readers of this Form 10-Q with additional insight into our operational performance relative to earlier periods and relative to our competitors. We do not intend Adjusted Gross Profit, Adjusted Gross Profit Percentage, Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted Earnings per Share to be substitutes for any GAAP financial information. Readers of this Form 10-Q should use Adjusted Gross Profit, Adjusted Gross Profit Percentage, Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted Earnings per Share only in conjunction with Gross Profit, and Net Income, the most closely comparable GAAP financial measures, as applicable. Reconciliations of Adjusted Gross Profit, Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted Earnings per Share to the respective most closely comparable GAAP measure, as well as a calculation of Adjusted Gross Profit Percentage and Adjusted Diluted Weighted Average Shares Outstanding, are provided below, in “—Non-GAAP Financial Measures.”
Overview
Shoals Technologies Group is a leading design-engineering company and manufacturer of advanced electrical infrastructure solutions for mission‑critical applications across solar photovoltaic (PV), battery energy storage solutions (BESS), and data center power systems. Our solutions also support original equipment manufacturers (“OEMs”). EBOS encompasses all of the components that are necessary to carry the electric current produced by solar panels or stored by a BESS solution to an inverter and ultimately to the power grid. Since electrical infrastructure is the backbone of a solar or BESS project, our products play a mission-critical role in the quality, safety, reliability, and efficiency of energy projects, which the industry prioritizes over price when selecting EBOS solutions.
We design, manufacture and sell a variety of products used by the solar and battery storage industries, including Solar BLA Solutions; Homeruns, Interconnection and Extension Solutions; Combiners and Re-Combiners; Load Break Disconnects and Transition Solutions; Wireless Performance Monitoring; and BESS. We refer to complete EBOS solutions that use products manufactured by us, typically in connection with the design and specification of an entire EBOS system, as “system solutions”. When we sell a system solution, we work with our customers to design, specify and engineer their system solution to provide a complete customized EBOS solution consisting of individualized products that maximizes reliability and energy production while minimizing cost. We also provide technical support during installation and the transition to operations and maintenance. We refer to individual, often custom and proprietary, products we sell as “components”. We believe our system solutions are unique in our industry because they integrate design and
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engineering support, proprietary components and innovative installation methods into a single offering that would otherwise be challenging for a customer to obtain from a single provider or at all.
Traditionally, and for the three and nine months ended September 30, 2026, we primarily sold our EBOS solutions and OEM components to customers in the United States, while also fulfilling orders for international utility-scale solar projects. Specifically, we primarily sold to engineering, procurement and construction firms (“EPCs”) for use in large solar and BESS projects designed to generate electricity and feed it directly into the electric grid, typically with a generation capacity of 1 megawatt or greater. These EPCs work with owners and developers of solar assets to build energy infrastructure projects. However, given the mission-critical nature of EBOS, the decision to use our products typically involves input from both the EPC and the owner/developer of the energy infrastructure energy project.
We have a focus in two end-markets: (1) clean, grid connected energy and (2) data center and mission-critical electrical infrastructure. This market diversification seeks to capitalize on the growing global demand for energy and the need to accelerate electrification.
We derived 75.2% of our revenue from the sale of system solutions for the nine months ended September 30, 2026. For the same period, we derived substantially all of our revenue from customers in the U.S. As of September 30, 2026, we had $791.7 million of backlog and awarded orders. Backlog of $374.7 million represents signed purchase orders or contractual minimum purchase commitments with take-or-pay provisions and awarded orders of $417.0 million are orders we are in the process of documenting a contract for but for which a contract has not yet been signed. As of September 30, 2026, we believe approximately $371.3 million of backlog and $325.3 million of awarded orders have delivery dates in the next twelve months. Additionally, more than 12.9% of our September 30, 2026 backlog and awarded orders related to international projects. As of September 30, 2026, backlog and awarded orders increased by 9.8% relative to the same date last year and decreased by 1.2% relative to June 30, 2026.
Recent Developments
On November 4, 2026, we entered into the ARRAY Merger Agreement with ARRAY. Upon closing, each share of the Company’s Class A common stock will be exchanged for 1.6931 shares of ARRAY common stock. The closing of the ARRAY Merger is subject to the satisfaction of customary closing conditions, including receipt of required government and regulatory approvals and approval by Shoals shareholders and ARRAY stockholders. If completed, the ARRAY Merger is expected to have a material impact on our business, results of operations and financial condition. The ARRAY Merger Agreement has been approved by each of the Board of Directors of the Company and ARRAY.
Trends and Uncertainties
Trade Regulation and Import Tariffs
Our business activities are subject to numerous laws and regulations in the jurisdictions in which we operate. Our exports and imports are subject to complex trade and customs laws, tax requirements, and tariffs established through governmental actions, statutory authorities or international agreements. Changes in tax policies or trade regulations, the imposition of new or increased tariffs on imported products, including reciprocal tariffs, or retaliatory actions by trading partners could adversely affect our business, financial condition and results of operations.
The global trade environment has experienced significant uncertainty and volatility, including changes in tariff rates, product coverage, implementation dates, exemptions and related regulatory guidance. Although
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certain tariffs previously paid by us have been reimbursed, future changes in trade policy could result in additional tariffs, duties or other costs. The timing, scope and ultimate impact of future trade actions are difficult to predict and may be affected by governmental actions, negotiations with trading partners, judicial proceedings, regulatory developments and changes in applicable laws.
Tariffs and other trade restrictions may increase the cost of raw materials and components used in our products, including copper, aluminum and other materials, and may also result in higher supplier prices, changes in sourcing arrangements or disruptions to our supply chain. Although we have expanded our domestic capabilities, strengthened supply chain resiliency and increased domestic manufacturing capacity, these measures may not fully mitigate the effects of future changes in trade policy. We may also be unable to pass increased costs on to our customers, or there may be a delay between when such costs are incurred and when they can be recovered, which could adversely affect our gross margins and results of operations. Retaliatory trade measures could also adversely affect exports of our products, customer demand or our competitive position in certain markets.
We continue to monitor developments in trade policy, tariffs, customs regulations and global supply chain conditions and evaluate procurement, sourcing and inventory strategies intended to mitigate potential adverse effects. However, significant or rapidly implemented changes in trade policy could adversely affect our supply chain, input costs, pricing, cash flows, financial condition and results of operations.
Energy‑Related Incentives
Federal, state, local, and foreign governmental bodies offer incentives to owners, end users, distributors, and manufacturers of solar energy systems to promote the development of solar electricity. The range, eligibility requirements, availability, and duration of these incentives vary widely by geographic market and are subject to change.
The 2022 Inflation Reduction Act (the “IRA”) introduced significant long‑term tax incentives to promote solar energy deployment in the United States. Under the IRA, taxpayers investing in eligible solar projects may qualify for Investment Tax Credits (“ITC”) or elect to claim Production Tax Credits (“PTC”) for eligible facilities.
In 2025, H.R. 1, the One Big Beautiful Bill Act, modified several energy‑related tax provisions of the IRA. These changes include an accelerated phaseout or termination of the ITC and PTC for solar projects placed in service after 2027, as well as restrictions related to “foreign entities of concern,” which render certain projects owned or controlled by prohibited foreign entities ineligible for specific tax credits. The Department of the Treasury (the “Treasury”) and the Internal Revenue Service (the “IRS”) have issued guidance regarding certain prohibited foreign entity and material assistance requirements, and further guidance or rulemaking may affect how these restrictions are interpreted and applied.
Reductions or uncertainty surrounding these incentives may diminish the financial attractiveness of solar projects, which could decrease demand for our products. Additionally, ongoing uncertainty around the duration, eligibility criteria, and future legislative changes affecting these incentives may cause delays in project financing and execution, which could impact our sales volume and growth trajectory.
The Solar Market and Critical Power Infrastructure
The domestic utility‑scale solar market has previously experienced volatility driven by a combination of permitting delays, supply‑chain constraints, labor shortages, project‑financing challenges, interconnection bottlenecks, and uncertainty stemming from federal trade and tax policy changes. We believe long‑term demand fundamentals remain strong; however, new circumstances may emerge and could affect future project
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timing, pricing dynamics, and customer mix. These circumstances include changes in federal or state energy policy, delays in Treasury or IRS guidance, interpretations of tax credit eligibility requirements, lengthy lead times for electrical equipment, and uncertainty regarding the ability of developers to meet deadlines. We continue to monitor market conditions and manage these uncertainties through proactive commercial strategies, inventory planning, and close engagement with customers and suppliers.
The market for critical power infrastructure is expanding as electricity demand increases and energy systems grow more complex, including as a result of data center expansion, artificial intelligence growth, electrification, grid modernization, and renewable energy deployment. However, this growth is accompanied by uncertainty arising from shifting policy frameworks, technological change, and varying levels of industry participation. These conditions may result in inconsistent coordination across stakeholders, policy fragmentation, and differing degrees of market readiness, each of which could influence project execution, capital allocation, and technology deployment. We will continue to assess how volatility in the industries in which we operate may affect our operations, capital expenditures, and cash flows.
Other Macroeconomic Pressures
Inflationary pressures persisted into 2026, driven in part by tariff-related cost increases that elevated prices for imported and domestic goods. Forecasts indicate that while inflation is expected to gradually ease, it remains above desired targets, with ongoing price pressures anticipated through 2026. Interest rates, though off their historic highs, remain elevated relative to long-term averages, and uncertainty remains regarding the future path of monetary policy, including the potential for interest rates to remain elevated or increase further if inflationary pressures persist. Higher borrowing costs, coupled with uncertainty created by shifting tariff regimes and evolving monetary policy, may continue to affect capital markets and increase our cost of financing.
Sourcing raw materials and securing inbound logistics continues to present challenges, reflecting persistent global supply chain disruptions, trade‑policy volatility, and geopolitical conflict. Tariff‑driven increases in import prices and secondary supplier cost increases have raised costs across multiple inputs, contributing to higher procurement and logistics costs. Ongoing geopolitical instability, including the conflict in the Middle East involving Iran, Israel, and the United States, may disrupt the availability of certain materials, contribute to increased global freight and input costs, and further complicate procurement planning. We expect these sourcing and logistics pressures to persist through 2026 as trade uncertainty and geopolitical tensions remain unresolved.
Key Components of Our Results of Operations
The following discussion describes certain line items in our condensed consolidated statements of operations.
Revenue
We generate revenue from the sale of EBOS solutions and components for solar, BESS, and OEM offerings. Our customers include EPCs, utilities, solar developers, independent power producers, and solar module manufacturers. We derive the majority of our revenue from selling system solutions. When we sell a system solution, we enter into a contract with our customers covering the price, specifications, delivery dates and warranty for the products being purchased, among other things. Our contractual delivery period for system solutions can vary from one to three months whereas manufacturing typically requires a shorter time frame. Contracts for system solutions can range in value from several hundred thousand to several million dollars.
Our revenue is affected by changes in the price, volume and mix of system solutions and components purchased by our customers. The price and volume of our system solutions and components are driven by the demand for our energy infrastructure system solutions and components, volume based discounts and rebate
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incentives, changes in product mix, geographic mix of our customers, strength of competitors’ product offerings, and availability of government incentives to the end-users of our products.
Our revenue growth is dependent on continued growth in the amount of projects to support energy infrastructure constructed each year and our ability to increase our share of demand in the geographies where we currently compete and plan to compete in the future, as well as our ability to continue to develop and commercialize new and innovative products that address the changing technology and performance requirements of our customers.
Cost of Revenue and Gross Profit
Cost of revenue consists primarily of system solutions and components costs, including purchased raw materials, as well as costs related to importing and tariffs, shipping, customer support, product warranty and rework, personnel and depreciation of manufacturing and testing equipment. Personnel costs in cost of revenue include both direct labor costs as well as costs attributable to any individuals whose activities relate to the transformation of raw materials or component parts into finished goods or the transportation of materials to the customer. Our product costs are affected by the underlying cost of raw materials, including copper and aluminum; component costs, including fuses, resin, enclosures, and cable; technological innovation; economies of scale resulting in lower component costs; and improvements in production processes and automation. We do not currently hedge against changes in the price of raw materials. Some of these costs, primarily indirect personnel and depreciation of manufacturing and testing equipment, are not directly affected by sales volume. Gross profit may vary from year to year and is primarily affected by our sales volume, product prices, product costs, product mix, customer mix, geographical mix, shipping method and warranty expense.
Operating Expenses
Operating expenses consist of general and administrative expenses as well as depreciation and amortization expense. Personnel-related costs are the most significant component of our operating expenses and include salaries, equity-based compensation, benefits, payroll taxes and commissions. The number of our full-time employees increased from 186 to 211 from September 30, 2025 to September 30, 2026, and we expect to hire new employees in the future to support our growth. The timing of these additional hires could materially affect our operating expenses in any particular period, both in absolute dollars and as a percentage of revenue.
General and Administrative Expenses
General and administrative expenses consist primarily of legal and professional fees, salaries, equity-based compensation expense, employee benefits and payroll taxes related to our executives, and our sales, finance, human resources, information technology, engineering and legal organizations, travel expenses, facilities costs, marketing expenses, insurance, bad debt expense and fees for professional services. Professional services consist of audit, tax, accounting, legal, internal controls, information technology, investor relations and other costs. We expect to increase our sales and marketing personnel as we expand into new geographic markets. Substantially all of our sales are currently in the U.S. We currently have a sales presence serving the U.S., Asia-Pacific, Europe, Latin America, and Africa geographies. We intend to grow our sales presence and marketing efforts in targeted geographic markets and could expand to additional countries in the future.
Depreciation
Depreciation in our operating expenses consists of costs associated with property, plant and equipment (“PP&E”) not used in manufacturing our products. We expect that as we increase both our revenue and the number of our general and administrative personnel, we will invest in additional PP&E to support our growth resulting in additional depreciation expense.
Amortization
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Amortization of intangibles consists of amortization of customer relationships, developed technology, and trade names over their expected period of use.
Non-operating Expenses
Interest Expense
Interest expense consists of interest and other charges paid in connection with our Senior Secured Credit Agreement.
Interest income
Interest income is related to interest on bank deposits.
Litigation settlement expense, net of recoveries
Litigation settlement expenses related to the amounts owed, net of applicable insurance recoveries, to settle matters of litigation.
Gain (loss) on sale of asset
Gain (loss) on sale of asset represents consideration received in excess of the net book value of assets sold.
Foreign currency gain (loss), net
Foreign currency gains and losses arise from the remeasurement of transactions in a currency other than the functional currency of the Company based on exchange rate fluctuations.
Income Tax Expense
Shoals Technologies Group, Inc. is subject to U.S. federal and state income tax in multiple jurisdictions.
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Results of Operations
The following table summarizes our results of operations (dollars in thousands):
| Three Months Ended September 30, | Increase / (Decrease) | Nine Months Ended September 30, | Increase / (Decrease) | ||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||
| Revenue | $ | 195,308 | $ | 135,804 | $ | 59,504 | 43.8 | % | $ | 499,237 | $ | 327,006 | $ | 172,231 | 52.7 | % | |||||||||||||||||||||||||
| Cost of revenue | 132,912 | 85,552 | 47,360 | 55.4 | % | 346,306 | 207,412 | 138,894 | 67.0 | % | |||||||||||||||||||||||||||||||
| Gross profit | 62,396 | 50,252 | 12,144 | 24.2 | % | 152,931 | 119,594 | 33,337 | 27.9 | % | |||||||||||||||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||||||||||||||||||||
| General and administrative expenses | 31,003 | 29,423 | 1,580 | 5.4 | % | 90,482 | 74,180 | 16,302 | 22.0 | % | |||||||||||||||||||||||||||||||
| Depreciation and amortization | 2,427 | 2,158 | 269 | 12.5 | % | 7,043 | 6,433 | 610 | 9.5 | % | |||||||||||||||||||||||||||||||
| Total operating expenses | 33,430 | 31,581 | 1,849 | 5.9 | % | 97,525 | 80,613 | 16,912 | 21.0 | % | |||||||||||||||||||||||||||||||
| Income from operations | 28,966 | 18,671 | 10,295 | 55.1 | % | 55,406 | 38,981 | 16,425 | 42.1 | % | |||||||||||||||||||||||||||||||
| Interest expense | (3,894) | (2,832) | (1,062) | (37.5) | % | (10,271) | (7,483) | (2,788) | (37.3) | % | |||||||||||||||||||||||||||||||
| Interest income | — | 38 | (38) | (100.0) | % | 327 | 232 | 95 | 40.9 | % | |||||||||||||||||||||||||||||||
| Litigation settlement expense, net of recoveries | (1,000) | — | (1,000) | * | (6,250) | — | (6,250) | * | |||||||||||||||||||||||||||||||||
| Gain (loss) on sale of assets | (2) | (7) | 5 | (71.4) | % | (4) | 3,127 | (3,131) | (100.1) | % | |||||||||||||||||||||||||||||||
| Foreign currency gain (loss) | 18 | — | 18 | * | (10) | — | (10) | * | |||||||||||||||||||||||||||||||||
| Income before income taxes | 24,088 | 15,870 | 8,218 | 51.8 | % | 39,198 | 34,857 | 4,341 | 12.5 | % | |||||||||||||||||||||||||||||||
| Income tax expense | (6,218) | (3,991) | (2,227) | (55.8) | % | (9,487) | (9,405) | (82) | (0.9) | % | |||||||||||||||||||||||||||||||
| Net income | $ | 17,870 | $ | 11,879 | $ | 5,991 | 50.4 | % | $ | 29,711 | $ | 25,452 | $ | 4,259 | 16.7 | % | |||||||||||||||||||||||||
*Not meaningful as the prior period balance was zero.
Comparison of the Three Months Ended September 30, 2026 and 2025
Revenue
Revenue increased by $59.5 million, or 43.8%, for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025, driven by strong underlying demand of products, the impact of market share capture initiatives, and an increase in volume of projects in the current year.
Cost of Revenue and Gross Profit
Cost of revenue increased by $47.4 million, or 55.4%, for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025, driven by the increase in revenue. Gross profit as a percentage of revenue was 31.9% during the three months ended September 30, 2026, and 37.0% during the three months ended September 30, 2025. Gross profit as a percentage of revenue declined period over period primarily due to operational inefficiencies associated with the ramp-up and transition into the new manufacturing facility and product mix within the period, along with costs incurred to address product quality matters, including rework and corrective actions, as well as incremental lease accounting amortization.
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Operating Expenses
General and Administrative
General and administrative expenses increased $1.6 million, or 5.4%, for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025. The increase in general and administrative expenses was the result of a $5.4 million increase in cash and share-based incentive compensation expense due to improved financial performance in comparison to the prior year and increased headcount, which was offset by $4.1 million in decreased spending related to legal matters in the current quarter in comparison to the prior year quarter.
Depreciation and Amortization
Depreciation and amortization expenses increased by $0.2 million, or 12.5%, for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025. This change is attributable to additions of property, plant, and equipment supporting our general and administrative functions.
Interest Expense
Interest expense increased by $1.1 million, or 37.5%, for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025. This increase was due to an increase in the total weighted average outstanding balance of the Revolving Credit Facility during the three months ended September 30, 2026 compared to the three months ended September 30, 2025.
Litigation settlement expense, net of recoveries
Litigation settlement expense, net of recoveries increased by $1.0 million for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025. This is due to the accrual for the settlement amount, net of insurance recoveries related to the Company’s Derivative litigation. See Note 13 - Commitments and Contingencies, in our condensed consolidated financial statements included in this Form 10-Q for more information.
Income tax expense
Income tax expense totaled $6.2 million for the three months ended September 30, 2026, as compared to income tax expense of $4.0 million for the three months ended September 30, 2025. Our effective income tax rate for the three months ended September 30, 2026 and 2025 was 25.8% and 25.1%, respectively. The change in our effective income tax rate was primarily attributable to nondeductible compensation under Section 162(m) during the three months ended September 30, 2026.
Comparison of the Nine Months Ended September 30, 2026 and 2025
Revenue
Revenue increased by $172.2 million, or 52.7%, for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025, driven by strong underlying demand of products, the impact of market share capture initiatives, and an increase in volume of projects in the current year.
Cost of Revenue and Gross Profit
Cost of revenue increased by $138.9 million, or 67.0%, for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025, driven by the increase in revenue. Gross profit as a percentage of revenue was 30.6% during the nine months ended September 30, 2026, and 36.6% during the nine months ended September 30, 2025. Gross profit as a percentage of revenue declined period over period primarily due to operational inefficiencies associated with the ramp-up and transition into the new
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manufacturing facility and product mix within the period, along with costs incurred to address product quality matters, including rework and corrective actions, as well as incremental lease accounting amortization.
Operating Expenses
General and Administrative
General and administrative expenses increased $16.3 million, or 22.0%, for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025. The increase in general and administrative expenses was the result of $11.4 million in increased payroll, cash and incentive based share expense due to increased headcount in comparison to the prior year, $3.3 million in increased costs related to administration, and a $1.5 million increase in legal expenses for ongoing matters related to wire insulation shrinkback, intellectual property, and shareholder litigation matters.
Depreciation and Amortization
Depreciation and amortization expenses increased by $0.6 million, or 9.5%, for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025. This change is attributable to additions of property, plant, and equipment supporting our general and administrative functions.
Interest Expense
Interest expense increased by $2.8 million, or (37.3)%, for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025. This increase was due to an increase in the total weighted average outstanding balance of the Revolving Credit Facility during the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025.
Litigation settlement expense, net of recoveries
Litigation settlement expense, net of recoveries increased by $6.3 million for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025. This is due to the accrual for the settlement amount, net of insurance recoveries related to the Company’s Securities and Derivative litigations. See Note 13 - Commitments and Contingencies, in our condensed consolidated financial statements included in this Form 10-Q for more information.
Gain on sale of asset
Gain on sale of asset decreased $3.1 million from the previous period due to the prior year sale of owned land and building assets to consolidate operations into new facilities.
Income tax expense
Income tax expense totaled $9.5 million for the nine months ended September 30, 2026, as compared to income tax expense of $9.4 million for the nine months ended September 30, 2025. Our effective income tax rate for the nine months ended September 30, 2026 and 2025 was 24.2% and 27.0%, respectively. The decrease in the effective tax rate for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, was primarily due to stock compensation tax windfalls and the reversal of a related Section 162(m) deferred tax asset valuation allowance.
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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.
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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 | |||||||||||||||||||
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| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
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 $0.7 million and $7.3 million, respectively, of expenses incurred in connection with the lawsuit initiated by the Company against the supplier of the defective wire. For the three and nine months ended September 30, 2025, represents $6.8 million and $11.9 million, respectively, of expenses incurred in connection with the lawsuit initiated by the Company against the supplier of the defective wire. We consider this litigation distinct from ordinary course legal matters given the expected magnitude of the expenses, the nature of the allegations in the Company’s complaint, the amount of damages sought, and the impact of the matter underlying the litigation on the Company’s financial results. In the future, we also intend to exclude from our non-GAAP measures the benefit of recovery, if any. We believe excluding expenses from these discrete litigation events provides investors with a better view of the operating performance of our business and allows for comparability through periods. See Note 13 - Commitments and Contingencies, in our condensed consolidated financial statements included in this Form 10-Q for more information.
(b) For the three and nine months ended September 30, 2026, represents $0.1 million and $1.2 million of expenses incurred in connection with actions taken to consolidate our operations into a newly constructed facility, including items such as professional fees, relocation, facility set-up and other costs, which relates to costs classified within cost of revenue based on their nature and function. For the three and nine months ended September 30, 2025, represents $0.7 million of expenses incurred in connection with actions taken to consolidate our operations into a newly constructed facility, which primarily consisted of costs classified within general and administrative expenses based on their nature and function. We believe excluding expenses from these events provides investors with a better view of the operating performance of our business and allows for comparability through periods.
(c) For the three and nine months ended September 30, 2026, represents $0.1 million and $2.3 million, respectively, of expenses incurred in connection with the Company’s defense of certain derivative and class action litigation and for the three and nine months ended September 30, 2026, represents $1.0 million and $6.3 million, respectively, in settlement expenses associated with this litigation. For the three and nine months ended September 30, 2025, represents $0.3 million and $1.2 million, respectively, of expenses incurred in connection with the Company’s defense of certain derivative and class action litigation. We consider expenses incurred in connection with these legal matters distinct from normal matters and expenses within the operation of our business.
(d) Represents costs incurred in connection with the ARRAY Merger, 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.
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| 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 | |||||||||||||||
Liquidity and Capital Resources
We finance our operations primarily with operating cash flows and short and long-term borrowings. Our ability to generate positive cash flow from operations is dependent on the strength of our gross profits as well as our ability to quickly turn our working capital. Conversely, lower than expected gross margins or an inability to quickly turn our working capital, together with an inability to incur additional short and long-term borrowings, would reduce cash flows and could have a material adverse effect on our liquidity, financial condition and results of operations. Based on our past performance and current expectations, we believe that operating cash flows and availability under our Revolving Credit Facility will be sufficient to meet our near and long-term future cash needs.
Cash used in operating activities was $5.8 million during the nine months ended September 30, 2026, as compared to cash provided by operating activities of $21.2 million during the nine months ended September 30, 2025. As of September 30, 2026, our cash and cash equivalents were $7.7 million, an increase from $7.3 million as of December 31, 2025. As of September 30, 2026 we had outstanding borrowings of $163.8 million, a $27.0 million increase from outstanding borrowings of $136.8 million as of December 31, 2025. As of September 30, 2026, we also had $84.8 million available for additional borrowings under our $250.0 million Revolving Credit Facility.
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Net Cash Provided by (Used in) Operating Activities | $ | (5,788) | $ | 21,154 | |||||||
| Net Cash Used in Investing Activities | (17,501) | (20,791) | |||||||||
Net Cash Provided by (Used in) Financing Activities | 23,643 | (15,285) | |||||||||
Net Increase (Decrease) in Cash and Cash Equivalents | $ | 354 | $ | (14,922) | |||||||
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Operating Activities
For the nine months ended September 30, 2026, cash used in operating activities was $5.8 million, due to operating results that included $29.7 million of net income, which included $53.1 million of non-cash expense, along with cash inflows in deferred revenue of $19.2 million, accrued expenses and other of $17.5 million, and litigation receivable and settlement liabilities of $5.5 million. These inflows were offset by outflows in inventory of $61.5 million, accounts receivable and unbilled receivables of $21.5 million, warranty of $6.9 million, and other assets of $3.4 million.
For the nine months ended September 30, 2025, cash provided by operating activities was $21.2 million, primarily due to operating results that included $25.5 million of net income, which included $26.9 million of non-cash expense, along with cash inflows in unbilled receivables of $13.1 million, accounts payable of $12.6 million, accrued expenses of $11.7 million, deferred revenue of $7.4 million, and other assets of $2.5 million. These cash inflows were offset by cash outflows of $39.3 million related to accounts receivable, $33.7 million of warranty liability, and $5.5 million in inventory.
Investing Activities
For the nine months ended September 30, 2026, net cash used investing activities was $17.5 million, which was attributable to purchases of property and equipment.
For the nine months ended September 30, 2025, net cash used investing activities was $20.8 million, which was attributable to the purchase of $25.9 million in property and equipment, offset by the proceeds from the sale of property and equipment of $5.1 million.
Financing Activities
For the nine months ended September 30, 2026, net cash provided by financing activities was $23.6 million, due to $60.0 million in borrowings on the Revolving Credit Facility offset by $33.0 million in repayments and $3.4 million in taxes paid related to net share settled equity awards.
For the nine months ended September 30, 2025, net cash used in financing activities was $15.3 million, due to $65.0 million in payments on the Revolving Credit Facility, offset by $50.0 million in borrowings, and $0.3 million in taxes paid related to net share settled equity awards.
Debt Obligations
For a discussion of our debt obligations see Note 9 - Long-Term Debt in our condensed consolidated financial statements included in this Form 10-Q.
Surety Bonds
For a discussion of our surety bond obligations see Note 13 - Commitments and Contingencies in our condensed consolidated financial statements included in this Form 10-Q.
Product Warranty
For a discussion of our product warranties see Note 8 - Warranty Liability in our condensed consolidated financial statements included in this Form 10-Q.
Critical Accounting Policies and Accounting Estimates
For a description of the application of our critical accounting policies or estimation procedures, see our 2025 Form 10-K. There were no material changes to the information previously disclosed.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
During the nine months ended September 30, 2026, there were no material changes in our market risk exposure. For a description of our analysis of quantitative and qualitative market risk, see Part II, Item 7A “Quantitative and Qualitative Disclosures About Market Risk” in our 2025 Form 10-K.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2026. Based upon the evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2026, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control Over Financial Reporting
There were no changes to our internal control over financial reporting that occurred during the quarter ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may be involved in litigation relating to claims that arise out of our operations and businesses and that cover a wide range of matters, including, among others, intellectual property matters, contract and employment claims, personal injury claims, product liability claims and warranty claims. Except as described under Litigation in Note 13 - Commitments and Contingencies, there are no claims or proceedings to which we are party that we believe would have a material adverse effect on our business, financial condition, results of operations or cash flows. However, the results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, we may incur significant costs and experience a diversion of management resources as a result of litigation.
Item 1A. Risk Factors
For a discussion of the material factors that affect our business, financial condition or results of operations, please see the risk factors disclosed in our 2025 Form 10-K and the other information set forth in this Form 10-Q. You should be aware that these risk factors and other information may not describe every risk facing our Company. Additional risks and uncertainties not currently known to us may also materially adversely affect our business, financial condition and/or results of operations. The following risk factors supplement the risk factors
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previously disclosed in Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the year ended December 31, 2025.
Risks Related to the ARRAY Merger
The Company’s shareholders cannot be sure of the value of the consideration they will receive in the ARRAY Merger, if completed, because the exchange ratio is fixed and the market price of ARRAY common stock has fluctuated and will continue to fluctuate.
If the ARRAY Merger is completed, each share of the Company’s Class A common stock outstanding immediately prior to the ARRAY Merger will automatically be converted into the right to receive 1.6931 shares of ARRAY common stock and, if applicable, cash in lieu of fractional shares (the “ARRAY Merger Consideration”). Because the exchange ratio is fixed, the value of the ARRAY Merger Consideration will depend on the market price of ARRAY common stock at the time the ARRAY Merger is completed. The value of ARRAY common stock has fluctuated since the date of the announcement of the ARRAY Merger Agreement and will continue to fluctuate. Accordingly, the Company’s shareholders will not know or be able to determine the market value of the ARRAY Merger Consideration they would receive upon completion of the ARRAY Merger. Share price changes may result from a variety of factors, including, among others, general market and economic conditions, changes in ARRAY’s and the Company’s respective businesses, operations and prospects, market assessments of the likelihood that the ARRAY Merger will be completed and the timing of the ARRAY Merger and regulatory considerations. Many of these factors are beyond the Company’s control.
Completion of the ARRAY Merger is subject to certain conditions, including approval of our shareholders, ARRAY stockholders and certain governmental and regulatory approvals, and if these conditions are not satisfied or waived, the ARRAY Merger will not be completed.
The completion of the ARRAY Merger is subject to satisfaction or waiver of certain customary closing conditions, including (i) the adoption of the ARRAY Merger Agreement by the Company’s shareholders and the approval of the issuance of ARRAY common stock in connection with the ARRAY Merger by ARRAY stockholders, (ii) the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), (iii) the absence of any law or order issued by a governmental entity of competent jurisdiction prohibiting, restraining or making illegal the consummation of the ARRAY Merger, (iv) the effectiveness of the Registration Statement on Form S-4 to be filed by ARRAY pursuant to which the shares of ARRAY common stock to be issued in connection with the ARRAY Merger will be registered with the SEC, and the absence of any stop order suspending such effectiveness or proceeding for the purpose of suspending such effectiveness, and (v) approval for listing on Nasdaq of the shares of ARRAY common stock to be issued in connection with the ARRAY Merger. The obligation of each party to consummate the ARRAY Merger is also conditioned upon (i) the other party having performed in all material respects its obligations under the ARRAY Merger Agreement, (ii) the other party’s representations and warranties in the ARRAY Merger Agreement being true and correct (subject to certain materiality qualifiers) and (iii) the other party having not experienced a material adverse effect. There can be no assurance that the conditions to the closing of the ARRAY Merger will be satisfied or waived or that the ARRAY Merger will be completed.
Failure to complete the ARRAY Merger could negatively impact the share price and the future business and financial results of the Company.
The ARRAY Merger may not be completed within the expected timeframe, or at all, as a result of various factors and conditions, some of which may be beyond our control. If the ARRAY Merger is not completed for any reason, including as a result of any condition not being satisfied or waived prior to the
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outside date specified in the ARRAY Merger Agreement, the ongoing business of the Company may be adversely affected, and without realizing any of the benefits of having completed the ARRAY Merger, the Company would be subject to a number of risks, including the following:
•the Company may experience negative reactions from the financial markets, including negative impacts on its stock price;
•the Company may experience negative reactions from its customers, regulators and employees;
•the Company will be required to pay certain costs relating to the ARRAY Merger, whether or not the ARRAY Merger is completed;
•the ARRAY Merger Agreement places certain restrictions on the conduct of the Company’s business prior to completion of the ARRAY Merger, and such restrictions, the waiver of which are subject to the written consent of ARRAY, and subject to certain exceptions and qualifications, may prevent the Company from taking certain other specified actions or otherwise pursuing business opportunities during the pendency of the ARRAY Merger that the Company would have made, taken or pursued if these restrictions were not in place; and
•matters relating to the ARRAY Merger (including integration planning) will require substantial commitments of time and resources by the Company’s management, which would otherwise have been devoted to day-to-day operations and other opportunities that may have been beneficial to the Company as an independent company.
The ARRAY Merger Agreement does not allow the Company to solicit competing acquisition proposals and restricts the Company’s ability to engage in discussions regarding such proposals, subject to certain exceptions. In the event of a termination of the ARRAY Merger Agreement under certain circumstances specified in such agreement, including a change in the recommendation of the Company’s Board of Directors or the Company entering into an agreement with respect to a competing acquisition proposal within twelve months following certain terminations, the Company may be required to pay a termination fee of $40.3 million to ARRAY. This payment could affect the structure, pricing and terms proposed by a third party seeking to acquire or merge with the Company and could discourage a third party from making a competing acquisition proposal, including a proposal that would be more favorable to the Company’s shareholders than the ARRAY Merger. ARRAY may be required to pay the Company a termination fee of $22.2 million under certain specified circumstances; however, if the ARRAY Merger Agreement is terminated under circumstances in which no termination fee is payable to the Company, the Company may not receive any compensation for the costs it has incurred or the opportunities it has forgone.
There can be no assurance that the risks described above will not materialize. If any of those risks materialize, they may materially and adversely affect the Company’s business, financial condition, financial results and/or share price.
The Company will be subject to various uncertainties while the ARRAY Merger is pending that may cause disruption and may make it more difficult to maintain relationships with customers and other third-party business partners.
The Company’s efforts to complete the ARRAY Merger could cause substantial disruptions in, and create uncertainty surrounding, its business, which may materially adversely affect its results of operations and its business. Uncertainty as to whether the ARRAY Merger will be completed may affect the Company’s ability to recruit prospective employees or to retain and motivate existing employees. Employee retention may be particularly challenging while the ARRAY Merger is pending because employees may experience uncertainty about their roles following the ARRAY Merger. As mentioned above, a substantial amount of our management’s
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and employees’ attention is being directed toward the completion of the ARRAY Merger and thus is being diverted from our day-to-day operations. Uncertainty as to the Company’s future could materially adversely affect its business and its relationship with customers and potential customers. For example, customers, suppliers and other third parties may defer decisions concerning working with the Company, or seek to change existing business relationships with the Company. Changes to or termination of existing business relationships could adversely affect the Company’s revenue, earnings and financial condition, as well as the market price of the Company’s Class A common stock. The adverse effects of the pendency of the ARRAY Merger could be exacerbated by any delays in completion of the ARRAY Merger or termination of the ARRAY Merger Agreement.
Potential litigation against the Company could result in substantial costs, prevention or delay of the completion of the ARRAY Merger, and/or a judgment resulting in the payment of damages.
The Company could be subject to litigation related to any failure to complete the ARRAY Merger or related to any enforcement proceeding commenced against the Company to perform its obligations under the ARRAY Merger Agreement. If the ARRAY Merger is not completed, these risks may materialize and may adversely affect the Company’s business, financial condition, financial results and/or share price.
Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into merger agreements. Shareholders of the Company may file lawsuits against ARRAY, the Company and/or the directors and officers of either company in connection with the ARRAY Merger, which may result in payment of damages. These lawsuits could prevent or delay the completion of the ARRAY Merger and result in substantial costs to the Company, including any costs associated with the indemnification of directors and officers. There can be no assurance that any of the defendants will be successful in the outcome of any potential lawsuits.
The Company has incurred and will continue to incur significant transaction and merger-related costs in connection with the ARRAY Merger.
The Company has incurred and expects to continue to incur a number of non-recurring costs associated with the ARRAY Merger. The significant non-recurring costs associated with the ARRAY Merger include, among others, fees and expenses of financial advisors and other advisors and representatives, certain employment-related costs relating to employees of the Company and filing fees due in connection with filings required under the HSR Act. Some of these costs have already been incurred or may be incurred regardless of whether the ARRAY Merger is completed, including a portion of the fees and expenses of financial advisors and other advisors and representatives.
Item 2. Unregistered Sale of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Mine Safety Disclosures
Not applicable.
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Item 5. Other Information
(c) Insider Trading Arrangements
During the three months ended September 30, 2026, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted terminated
Item 6. Exhibits
| EXHIBIT INDEX | ||||||||||||||||||||||||||
| Incorporated by Reference | ||||||||||||||||||||||||||
| Number | Description of Document | Form | Filing Date | Exhibit No. | ||||||||||||||||||||||
| 3.1 | Amended and Restated Certificate of Incorporation of Shoals Technologies Group, Inc., dated January 28, 2021 | 8-K | 1/29/2021 | 3.1 | ||||||||||||||||||||||
| 3.2 | Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Shoals Technologies Group, Inc., dated January 28, 2021 | 10-Q | 8/6/2024 | 3.2 | ||||||||||||||||||||||
| 3.3 | Second Amended and Restated Bylaws of Shoals Technologies Group, Inc., dated February 20, 2025 | 10-K | 2/25/2025 | 3.3 | ||||||||||||||||||||||
| 10.1 | Amendment No. 7 to Credit Agreement, dated as of June 10, 2026, between Shoals Technologies Group, Inc., as Borrower, the guarantors party thereto, Wilmington Trust, National Association, as Collateral Agent, JPMorgan Chase Bank, N.A., as Administrative Agent and the 2026 Incremental Revolving Lenders. | 8-K | 6/12/2026 | 10.1 | ||||||||||||||||||||||
| 10.2 | Amendment No. 8 to Credit Agreement, dated as of August 28, 2026, between Shoals Technologies Group, Inc., as Borrower, the guarantors party thereto, Wilmington Trust, National Association, as Collateral Agent, JPMorgan Chase Bank, N.A., as Administrative Agent and the Lenders party thereto. | 8-K | 8/31/2026 | 10.1 | ||||||||||||||||||||||
| 31.1* | Certification of the Chief Executive Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) | |||||||||||||||||||||||||
| 31.2* | Certification of the Chief Financial Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) | |||||||||||||||||||||||||
| 32.1** | Certification of the Chief Executive Officer and Chief Financial Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002 | |||||||||||||||||||||||||
| 101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||||||||||||||||||||||||
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |||||||||||||||||||||||||
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||||||||||||||||||||
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| EXHIBIT INDEX | ||||||||||||||||||||||||||
| Incorporated by Reference | ||||||||||||||||||||||||||
| Number | Description of Document | Form | Filing Date | Exhibit No. | ||||||||||||||||||||||
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||||||||||||||||||||
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||||||||||||||||||||
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||||||||||||||||||||
| 104 | Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||||||||||||||||||||||||
________
* Filed herewith.
** Furnished herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Shoals Technologies Group, Inc. | |||||||||||||||||||||||
| Date: | November 4, 2026 | By: | /s/ Brandon Moss | ||||||||||||||||||||
| Name: | Brandon Moss | ||||||||||||||||||||||
| Title: | Chief Executive Officer | ||||||||||||||||||||||
| Date: | November 4, 2026 | By: | /s/ Dominic Bardos | ||||||||||||||||||||
| Name: | Dominic Bardos | ||||||||||||||||||||||
| Title: | Chief Financial Officer | ||||||||||||||||||||||
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