Shoals Technologies (NASDAQ: SHLS) posts Q1 revenue surge and lifts 2026 outlook
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Shoals Technologies Group reported strong growth for the first quarter of 2026. Revenue rose 74.9% to $140.6 million, while gross profit increased to $41.0 million. However, higher tariffs, facility costs and materials reduced gross margin to 29.2% from 35.0%.
Income from operations improved to $7.7 million, but a $5.3 million litigation settlement expense led to a small net loss of $0.3 million. Adjusted EBITDA grew to $21.1 million and adjusted net income to $12.1 million. Backlog and awarded orders reached a record $758.0 million, and the company issued second-quarter and raised full-year 2026 revenue and adjusted EBITDA outlook.
Positive
- Revenue and earnings growth: Q1 2026 revenue rose 74.9% to $140.6 million, with adjusted EBITDA up to $21.1 million and adjusted net income to $12.1 million, indicating significantly stronger underlying profitability.
- Record backlog and raised guidance: Backlog and awarded orders reached a record $758.0 million, up 17.5% year over year, and the company raised full-year 2026 revenue and adjusted EBITDA outlook.
Negative
- Margin pressure from costs and tariffs: Gross margin declined to 29.2% from 35.0%, driven by $3.8 million in additional tariffs, higher facility amortization and increased material costs.
- Litigation-related expenses and cash outflow: The quarter included $5.3 million of litigation settlement expense and higher legal costs, while operating activities used $41.4 million of cash, largely due to inventory growth.
Insights
Shoals posts rapid Q1 growth, record backlog and raises 2026 outlook despite litigation costs.
Shoals delivered Q1 2026 revenue of $140.6 million, up 74.9%, driven by higher project volumes and market-share gains. Adjusted EBITDA rose to $21.1 million and adjusted net income to $12.1 million, showing much stronger underlying profitability than the small GAAP loss.
Margins compressed, with gross margin at 29.2% versus 35.0% a year ago, reflecting $3.8 million in additional tariffs, higher right-of-use asset amortization and material costs. General and administrative expense increased due to legal spending and incentive compensation, including $6.2 million more legal expense and a $5.3 million litigation settlement accrual.
Backlog and awarded orders reached a record $758.0 million, up 17.5% year over year and 1.4% sequentially, supporting the decision to raise full-year 2026 revenue guidance to $600–640 million and adjusted EBITDA to $118–132 million. Operating cash flow was negative $41.4 million, mainly from a large inventory build, so subsequent quarters will show how quickly that working capital converts to cash.
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Q1 2026 Revenue: $140.6 million
Q1 2026 Gross Margin: 29.2%
Q1 2026 Net Loss: $0.3 million
+5 more
8 metrics
Q1 2026 Revenue
$140.6 million
Three months ended March 31, 2026; up 74.9% year over year
Q1 2026 Gross Margin
29.2%
Gross profit $41.0 million on $140.6 million revenue; down from 35.0%
Q1 2026 Net Loss
$0.3 million
Net loss of $0.297 million; loss per share $0.00 basic and diluted
Q1 2026 Adjusted EBITDA
$21.1 million
Adjusted EBITDA for three months ended March 31, 2026
Backlog and Awarded Orders
$758.0 million
As of March 31, 2026; up 17.5% year over year and 1.4% sequentially
Operating Cash Flow
-$41.4 million
Net cash used in operating activities for Q1 2026
Full-year 2026 Revenue Guidance
$600–640 million
Company outlook for full-year 2026 revenue
Full-year 2026 Adjusted EBITDA Guidance
$118–132 million
Company outlook for full-year 2026 Adjusted EBITDA
Key Terms
Adjusted EBITDA, backlog and awarded orders, wire insulation shrinkback, litigation settlement expense, +2 more
6 terms
Adjusted EBITDA financial
"Adjusted EBITDA1 was $21.1 million, compared to $13.5 million in the prior-year period."
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.
backlog and awarded orders financial
"The Company’s backlog and awarded orders as of March 31, 2026, were $758.0 million, representing a 17.5% increase"
wire insulation shrinkback financial
"legal expenses for ongoing matters related to wire insulation shrinkback, intellectual property, and shareholder litigation matters"
litigation settlement expense financial
"The Company has recorded a litigation settlement expense, net of recoveries of $5.3 million for the three months ended March 31, 2026."
non-GAAP financial measures financial
"Non-GAAP financial measures referenced in this release are used by management to assist investors and analysts"
Non-GAAP financial measures are numbers companies use to show their financial performance that exclude certain expenses or income. They help investors see how the company might perform without one-time costs or other unusual items, giving a different perspective from official reports. However, since they can be adjusted, they don’t always tell the full story and should be looked at alongside standard financial figures.
plant optimization expenses financial
"represents $0.6 million and zero of expenses incurred in connection with actions taken to consolidate our operations into a newly constructed facility"
Earnings Snapshot
Revenue: $140.6 million · Guidance included
Q1 2026
Revenue
$140.6 million
+74.9% YoY
Net income (loss)
-$0.3 million
similar to prior-year net loss of $0.3 million
Adjusted EBITDA
$21.1 million
up from $13.5 million prior-year period
Backlog and awarded orders
$758.0 million
+17.5% YoY, +1.4% sequential
Guidance
Company provided Q2 2026 guidance and raised full-year 2026 revenue to $600–640 million and Adjusted EBITDA to $118–132 million.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 5, 2026
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| (Exact name of registrant as specified in its charter) | |||||||||||||||||
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| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||||||||
| (Address of principal executive offices) | (Zip Code) | |||||||||||||||||||
| (Registrant’s telephone number, including area code) | ||||||||||||||||||||
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. ☐
Item 2.02 Results of Operations and Financial Condition.
On May 5, 2026, Shoals Technologies Group, Inc. (the “Company”) issued a press release announcing its financial results for the three months ended March 31, 2026. In the press release, the Company also announced that it would be holding a conference call on May 5, 2026 to discuss its financial results for the three months ended March 31, 2026. The full text of the press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
The information set forth in this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description | |||||||
| 99.1 | Press Release issued by Shoals Technologies Group, Inc. dated May 5, 2026 | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Shoals Technologies Group, Inc. | |||||||||||
| By: | /s/ Dominic Bardos | ||||||||||
| Name: | Dominic Bardos | ||||||||||
| Title: | Chief Financial Officer | ||||||||||
Date: May 5, 2026
Exhibit 99.1
Shoals Technologies Group, Inc. Reports Financial Results for First Quarter 2026
–Quarterly Revenue of $140.6 million –
–Income from Operations of $7.7 million –
–Net Loss of $0.3 million –
–Adjusted EBITDA1 of $21.1 million –
–Record Backlog and Awarded Orders of $758.0 million –
–Provides Second Quarter and Raises Full-year Outlook –
PORTLAND, TN. – May 5, 2026 (GLOBE NEWSWIRE) – Shoals Technologies Group, Inc. (“Shoals” or the “Company”) (Nasdaq: SHLS), a global leader in electrical infrastructure solutions for the energy transition market, today announced results for its first quarter ended March 31, 2026.
“We began the year on very solid footing, with revenue above our expected range and growing at approximately 75% from the prior-year period. The underlying demand environment remains extremely strong as evidenced by our record backlog and awarded orders of $758 million. We are executing our strategic plan of accelerating growth within our core domestic utility scale solar market and expanding our offering into attractive high growth markets,” said Brandon Moss, CEO of Shoals.
“The underlying strength of the markets in which we operate, combined with our leading competitive position, a broad and innovative product portfolio, and our new state of the art production facility, positions us exceptionally well to drive profitable growth in 2026 and beyond. We’re very excited about what we see ahead, and are pleased to increase both our revenue and adjusted EBITDA guidance for the current year,” added Mr. Moss.
First Quarter 2026 Financial Results
Revenue increased 74.9%, to $140.6 million, compared to $80.4 million for the prior-year period, 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.
1Non-GAAP financial measures referenced in this release are used by management to assist investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. Reconciliations of non-GAAP operating measures to the most directly comparable GAAP financial measures are included in the non-GAAP reconciliation in this release. Non-GAAP measures should not be used as a substitute for the closest comparable GAAP measures.
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Gross profit was $41.0 million, compared to $28.1 million in the prior-year period. Gross profit as a percentage of revenue was 29.2% compared to 35.0% in the prior-year period. The decrease in margin is attributable to $3.8 million in additional tariffs paid in comparison to the prior-year quarter, an increase of $1.4 million in right-of-use asset amortization arising from the opening of our consolidated operations facility, along with an increase in material costs.
General and administrative expenses were $31.0 million, compared to $21.7 million during the same period in the prior year. The increase in general and administrative expenses was primarily the result of a $6.2 million increase in legal expenses for ongoing matters related to wire insulation shrinkback, intellectual property, and shareholder litigation matters along with $1.6 million in increased cash and share-based incentive compensation expense due to increased headcount in comparison to the prior-year period.
Income from operations was $7.7 million, compared to $4.3 million during the prior-year period.
The Company has recorded a litigation settlement expense, net of recoveries of $5.3 million for the three months ended March 31, 2026. This is due to the accrual for the expected settlement amount, net of insurance recoveries related to the Company’s securities litigation as disclosed in Form 10-Q.
Net loss was $0.3 million compared to $0.3 million during the prior-year period. Loss per share was $0.00 in the current and prior-year period.
Adjusted EBITDA1 was $21.1 million, compared to $13.5 million in the prior-year period.
Adjusted Net Income1 was $12.1 million compared to $5.7 million during the prior-year period. Adjusted diluted earnings per share1 was $0.07 compared to $0.03 in the prior-year period.
Backlog and Awarded Orders
The Company’s backlog and awarded orders as of March 31, 2026, were $758.0 million, representing a 17.5% increase compared to the prior-year period and a 1.4% sequential increase from December 31, 2025. The increase in backlog and awarded orders as compared to the prior-year period reflects consistent demand for the Company’s innovative products, with growth in international and emerging battery energy storage markets.
Backlog represents signed purchase orders or contractual minimum purchase commitments with take-or-pay provisions and awarded orders are orders we are in the process of documenting with a contract but for which a contract has not yet been signed.
Second Quarter 2026 Outlook
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At this time, the Company is providing an outlook for the second quarter. Based on current business conditions, business trends and other factors, for the quarter ending June 30, 2026, the Company expects:
•Revenue in the range of $150 million to $170 million
•Adjusted EBITDA1 in the range of $28 million to $33 million
Full Year 2026 Outlook
Based on current business conditions, business trends and other factors, for the full year 2026, the Company expects:
•Revenue in the range of $600 million to $640 million
•Adjusted EBITDA1 in the range of $118 million to $132 million
•Cash flow from operations in the range of $65 million to $85 million
•Capital expenditures in the range of $20 million to $30 million
•Interest expense in the range of $8 million to $12 million
A reconciliation of Adjusted EBITDA1 guidance, which is a forward-looking measure that is a non-GAAP measure, to the most closely comparable GAAP measure is not provided because we are unable to provide such reconciliation without unreasonable effort. The inability to provide a quantitative reconciliation is due to the uncertainty and inherent difficulty in predicting the occurrence, the financial impact and the periods in which the components of the applicable GAAP measures and non-GAAP adjustments may be recognized. The GAAP measure may include the impact of such items as non-cash share-based compensation, amortization of intangible assets and the tax effect of such items, in addition to other items we have historically excluded from Adjusted EBITDA and Adjusted Net Income. We expect to continue to exclude these items in future disclosures of these non-GAAP measures and may also exclude other similar items that may arise in the future.
Webcast and Conference Call Information
Company management will host a webcast and conference call on May 5, 2026, at 8:00 a.m. Eastern Time, to discuss the Company’s financial results.
Interested investors and other parties can listen to a webcast of the live conference call by logging onto the Investor Relations section of the Company’s website at https://investors.shoals.com.
About Shoals Technologies Group, Inc.
Shoals Technologies Group is a leading manufacturer of advanced electrical infrastructure solutions for mission-critical applications across utility scale solar, battery storage, and data center power systems. Since its founding in 1996, the Company has designed innovative technologies and systems solutions that allow its customers to substantially increase installation efficiency and safety while improving system performance and reliability at scale.
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Shoals Technologies Group is a recognized leader in the energy transition industry. For additional information, please visit: https://www.shoals.com.
Investor Relations Contact
Shoals Technologies Group, Inc.
Email: investors@shoals.com
Forward-Looking Statements
This report contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements include information concerning our possible or assumed future results of operations; expectations regarding the utility-scale solar market; project delays; regulatory environment, including changes or potential changes to such environment; the effects of strategic pricing actions, volume discounts and customer mix in our key markets; pipeline and orders; business strategies, plans and expectations, including sales and marketing goals; technology developments; financing and investment plans; warranty and liability accruals and estimates of loss or gains; estimates of potential loss related to the wire insulation shrinkback matter discussed in our public filings; litigation strategy and expected benefits or results from the current intellectual property and wire insulation shrinkback litigation; potential growth opportunities, including opportunities associated with our entry into new markets; production and capacity at our plants; and potential share repurchases under the Company’s Share Repurchase Program discussed in our public filings. Forward-looking statements include statements that are not historical facts and can be identified by terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will,” “would” or similar expressions and the negatives of those terms.
Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
Some of the key factors and scenarios that could cause actual results to differ from our expectations include, among others, if demand for solar energy projects diminishes, we may not be able to grow; 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; the interruption of the flow of raw materials from international vendors has disrupted our supply chain, including as a result of the imposition of additional duties, tariffs, and other charges on imports and exports; the imposition of trade restrictions, import tariffs, anti-dumping, and countervailing duties; we have modified, and in the future may modify, our business strategy to abandon lines of business or implement new lines of business, and modifying our business strategy could have an adverse effect on our business and financial results; amounts included in our backlog and awarded orders may not result in actual revenue or translate into profits; defects or performance problems in our products or their parts,
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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; 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 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 with respect to the planned consolidation and relocation of our Tennessee-based manufacturing and distribution operations, and may not realize the benefits thereof; safety issues may subject us to penalties, negatively impact customer relationships, result in higher operating costs, and negatively impact employee morale and turnover; the market for our products is competitive, and we face increased competition as new and existing competitors introduce EBOS system solutions and components; macroeconomic conditions, including high inflation, high interest rates, and geopolitical instability, impact our business and financial results; we are subject to risks associated with the patent infringement complaints that we filed with the U.S. International Trade Commission (“ITC”) and District Courts; if we fail to, or incur significant costs in order to obtain, maintain, protect, defend, or enforce our intellectual property portfolio and other proprietary rights, including the patents we are asserting in ongoing patent infringement litigation; acquisitions, joint ventures, and/or investments and the failure to integrate acquired businesses could disrupt our business; 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; a significant drop in the price of electricity may harm our business; the unauthorized access to our information technology systems or the disclosure of personal or sensitive data or confidential information, whether through a breach of our computer system or otherwise, could severely disrupt our business; failure of our information technology systems, including those managed by third parties, whether intentional or inadvertent, could lead to delays in our business operations and, if significant or extreme, affect our results of operations; our expansion outside the U.S. could subject us to additional business, financial, regulatory, and competitive risks; our indebtedness could adversely affect our financial flexibility, restrict our current and future operations, and our competitive position; existing electric utility industry, federal, state, and municipal renewable energy and solar energy policies and regulations, including zoning and siting laws, and any subsequent changes, present technical, regulatory, and economic barriers to the purchase and use of solar energy systems that may significantly reduce demand for our products or harm our ability to compete; changes in tax laws or regulations that are applied adversely to us, or our customers could materially adversely affect our business, financial condition, results of operations, and prospects; and the market price of our Class A common stock may decline and may continue to be subject to significant volatility.
These and other important risk factors are described more fully in the Company’s most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and other documents filed with the Securities and Exchange Commission and could cause actual results to vary from expectations. Given these uncertainties, you should not place undue reliance on forward-looking statements. Also, forward-looking statements represent our management’s
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beliefs and assumptions only as of the date of this report. You should read this report with the understanding that our actual future results may be materially different from what we expect.
Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
Non-GAAP Financial Measures
Adjusted Gross Profit, Adjusted Gross Profit Percentage, Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted Earnings per Share (“EPS”)
We define Adjusted Gross Profit as gross profit plus plant optimization expenses. We define Adjusted Gross Profit Percentage as Adjusted Gross Profit divided by revenue. We define Adjusted EBITDA as net loss plus/(minus) (i) interest expense, (ii) interest income, (iii) income tax expense/(benefit), (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, and (xi) litigation settlement expense, net of insurance recoveries. 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, and (viii) litigation settlement expenses, net of insurance recoveries, 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
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(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 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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Shoals Technologies Group, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands, except shares and par value)
| March 31, 2026 | December 31, 2025 | ||||||||||
| Assets | |||||||||||
| Current Assets | |||||||||||
| Cash and cash equivalents | $ | 1,877 | $ | 7,320 | |||||||
| Accounts receivable, net | 129,205 | 128,793 | |||||||||
| Unbilled receivables | 15,144 | 22,133 | |||||||||
| Inventory | 158,993 | 89,878 | |||||||||
| Insurance receivable | 64,750 | — | |||||||||
| Other current assets | 12,572 | 9,762 | |||||||||
| Total Current Assets | 382,541 | 257,886 | |||||||||
| Property, plant and equipment, net | 59,072 | 53,302 | |||||||||
| Goodwill | 69,941 | 69,941 | |||||||||
| Other intangible assets, net | 31,603 | 33,499 | |||||||||
| Deferred tax assets | 438,116 | 438,027 | |||||||||
| Right-of-use operating lease assets | 45,000 | 46,044 | |||||||||
| Other assets | 4,622 | 5,402 | |||||||||
| Total Assets | $ | 1,030,895 | $ | 904,101 | |||||||
| Liabilities and Stockholders’ Equity | |||||||||||
| Current Liabilities | |||||||||||
| Accounts payable | $ | 80,425 | $ | 64,875 | |||||||
| Accrued expenses and other | 26,305 | 22,215 | |||||||||
| Litigation settlement liability | 70,000 | — | |||||||||
| Warranty liability—current portion | 1,232 | 3,202 | |||||||||
| Deferred revenue | 30,343 | 37,031 | |||||||||
| Total Current Liabilities | 208,305 | 127,323 | |||||||||
| Revolving line of credit | 181,750 | 136,750 | |||||||||
| Right-of-use operating lease liabilities | 37,800 | 38,661 | |||||||||
| Warranty liability, less current portion | 403 | 403 | |||||||||
| Other long-term liabilities | 991 | 991 | |||||||||
| Total Liabilities | 429,249 | 304,128 | |||||||||
| Commitments and Contingencies | |||||||||||
| Stockholders’ Equity | |||||||||||
| Preferred stock, $0.00001 par value - 5,000,000 shares authorized; none issued and outstanding as of March 31, 2026 and December 31, 2025 | — | — | |||||||||
| Class A common stock, $0.00001 par value - 1,000,000,000 shares authorized; 171,680,204 and 171,358,711 shares issued; 167,771,817 and 167,450,324 outstanding as of March 31, 2026 and December 31, 2025, respectively | 2 | 2 | |||||||||
| Additional paid-in capital | 495,060 | 493,090 | |||||||||
| Treasury stock, at cost, 3,908,387 shares as of March 31, 2026 and December 31, 2025, respectively | (25,272) | (25,272) | |||||||||
| Retained earnings | 131,856 | 132,153 | |||||||||
| Total Stockholders' Equity | 601,646 | 599,973 | |||||||||
| Total Liabilities and Stockholders’ Equity | $ | 1,030,895 | $ | 904,101 | |||||||
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Shoals Technologies Group, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except per share amounts)
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Revenue | $ | 140,557 | $ | 80,361 | ||||||||||
| Cost of revenue | 99,547 | 52,221 | ||||||||||||
| Gross profit | 41,010 | 28,140 | ||||||||||||
| Operating expenses | ||||||||||||||
| General and administrative expenses | 31,014 | 21,693 | ||||||||||||
| Depreciation and amortization | 2,278 | 2,135 | ||||||||||||
| Total operating expenses | 33,292 | 23,828 | ||||||||||||
| Income from operations | 7,718 | 4,312 | ||||||||||||
| Interest expense | (2,903) | (2,415) | ||||||||||||
| Interest income | 59 | 118 | ||||||||||||
| Litigation settlement expense, net of recoveries | (5,250) | — | ||||||||||||
| Gain (loss) on sale of assets | (2) | — | ||||||||||||
| Foreign currency gain (loss) | (8) | — | ||||||||||||
| Income (loss) before income taxes | (386) | 2,015 | ||||||||||||
| Income tax benefit (expense) | 89 | (2,297) | ||||||||||||
| Net loss | $ | (297) | $ | (282) | ||||||||||
| Loss per share of Class A common stock: | ||||||||||||||
| Basic | $ | (0.00) | $ | (0.00) | ||||||||||
| Diluted | $ | (0.00) | $ | (0.00) | ||||||||||
| Weighted average shares of Class A common stock outstanding: | ||||||||||||||
| Basic | 167,555 | 166,960 | ||||||||||||
| Diluted | 167,555 | 166,960 | ||||||||||||
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Shoals Technologies Group, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash Flows from Operating Activities | |||||||||||
| Net loss | $ | (297) | $ | (282) | |||||||
| Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 4,101 | 3,287 | |||||||||
| Amortization/write off of deferred financing costs | 156 | 156 | |||||||||
| Equity-based compensation | 3,317 | 2,661 | |||||||||
| Provision for obsolete or slow-moving inventory | 518 | 252 | |||||||||
| Provision for warranty expense | 527 | 257 | |||||||||
| Deferred taxes | (89) | 2,288 | |||||||||
| Other | 1,765 | — | |||||||||
| Changes in assets and liabilities: | |||||||||||
| Accounts receivable | (412) | 10,477 | |||||||||
| Unbilled receivables | 6,989 | 10,425 | |||||||||
| Inventory | (69,633) | (5,448) | |||||||||
| Other assets | (2,186) | (1,471) | |||||||||
| Accounts payable | 15,221 | 6,682 | |||||||||
| Accrued expenses and other | 2,510 | (347) | |||||||||
| Warranty liability | (2,497) | (9,837) | |||||||||
| Litigation receivable and settlement liabilities | 5,250 | — | |||||||||
| Deferred revenue | (6,688) | (3,542) | |||||||||
| Net Cash Provided by (Used in) Operating Activities | (41,448) | 15,558 | |||||||||
| Cash Flows from Investing Activities | |||||||||||
| Purchases of property, plant and equipment | (7,648) | (3,209) | |||||||||
| Net Cash Used in Investing Activities | (7,648) | (3,209) | |||||||||
| Cash Flows from Financing Activities | |||||||||||
| Employee withholding taxes related to net settled equity awards | (1,347) | (251) | |||||||||
| Proceeds from revolving credit facility | 45,000 | 20,000 | |||||||||
| Repayments of revolving credit facility | — | (20,000) | |||||||||
| Net Cash Provided by (Used in) Financing Activities | 43,653 | (251) | |||||||||
| Net Increase (Decrease) in Cash and Cash Equivalents | (5,443) | 12,098 | |||||||||
| Cash and Cash Equivalents—Beginning of Period | 7,320 | 23,511 | |||||||||
| Cash and Cash Equivalents—End of Period | $ | 1,877 | $ | 35,609 | |||||||
10
Shoals Technologies Group, Inc.
Adjusted Gross Profit, Adjusted Gross Profit Percentage, Adjusted EBITDA, Adjusted Net Income and Adjusted Diluted Earnings per Share (“EPS”) (Unaudited)
Reconciliation of Gross Profit to Adjusted Gross Profit and Adjusted Gross Profit Percentage (in thousands):
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Revenue | $ | 140,557 | $ | 80,361 | ||||||||||
| Cost of revenue | 99,547 | 52,221 | ||||||||||||
| Gross profit | $ | 41,010 | $ | 28,140 | ||||||||||
| Gross profit percentage | 29.2 | % | 35.0 | % | ||||||||||
| Plant optimization expense | $ | 621 | $ | — | ||||||||||
| Adjusted gross profit | $ | 41,631 | $ | 28,140 | ||||||||||
| Adjusted gross profit percentage | 29.6 | % | 35.0 | % | ||||||||||
Reconciliation of Net Income to Adjusted EBITDA (in thousands):
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Net loss | $ | (297) | $ | (282) | ||||||||||
| Interest expense | 2,903 | 2,415 | ||||||||||||
| Interest income | (59) | (118) | ||||||||||||
| Income tax expense (benefit) | (89) | 2,297 | ||||||||||||
| Depreciation expense | 2,199 | 1,391 | ||||||||||||
| Amortization of intangibles | 1,902 | 1,896 | ||||||||||||
| Equity-based compensation | 3,317 | 2,661 | ||||||||||||
| (Gain) loss on sale of asset | 2 | — | ||||||||||||
Wire insulation shrinkback litigation expenses (a) | 3,707 | 2,529 | ||||||||||||
Plant optimization expenses (b) | 621 | — | ||||||||||||
Shareholder litigation expenses (c) | 1,656 | 716 | ||||||||||||
Litigation settlement expense (c) | 5,250 | — | ||||||||||||
| Adjusted EBITDA | $ | 21,112 | $ | 13,505 | ||||||||||
Reconciliation of Net Income to Adjusted Net Income (in thousands):
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Net loss | $ | (297) | $ | (282) | ||||||||||
| Amortization of intangibles | 1,902 | 1,896 | ||||||||||||
| Amortization / write-off of deferred financing costs | 156 | 156 | ||||||||||||
| Equity-based compensation | 3,317 | 2,661 | ||||||||||||
| (Gain) loss on sale of asset | 2 | — | ||||||||||||
Wire insulation shrinkback litigation expenses (a) | 3,707 | 2,529 | ||||||||||||
Plant optimization expenses (b) | 621 | — | ||||||||||||
Shareholder litigation expenses (c) | 1,656 | 716 | ||||||||||||
11
Shoals Technologies Group, Inc.
Adjusted Gross Profit, Adjusted Gross Profit Percentage, Adjusted EBITDA, Adjusted Net Income and Adjusted Diluted Earnings per Share (“EPS”) (Unaudited)
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
Litigation settlement expense (c) | 5,250 | — | ||||||||||||
Tax impact of adjustments (d) | (4,169) | (1,942) | ||||||||||||
| Adjusted Net Income | $ | 12,145 | $ | 5,734 | ||||||||||
(a) For the three months ended March 31, 2026 and 2025, represents $3.7 million and $2.5 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.
(b) For the three months ended March 31, 2026 and 2025, represents $0.6 million and zero 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. 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 months ended March 31, 2026, represents $1.6 million of expenses incurred in connection with the Company’s defense of certain derivative and class action litigation and $5.3 million in settlement expenses associated with this litigation. For the three months ended March 31, 2025, represents $0.7 million 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) Shoals Technologies Group, Inc. is subject to U.S. Federal income taxes, in addition to state and local taxes. Represents the estimated tax impact of all Adjusted Net Income add-backs, excluding those which represent permanent differences between book versus tax. The adjustment to the provision for income tax reflects the effective tax rates below.
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Statutory U.S. Federal income tax rate | 21.0 | % | 21.0 | % | ||||||||||
| Permanent adjustments | 1.7 | % | 0.6 | % | ||||||||||
| State and local taxes (net of federal benefit) | 2.4 | % | 2.8 | % | ||||||||||
| Effective income tax rate for Adjusted Net Income | 25.1 | % | 24.4 | % | ||||||||||
12
Shoals Technologies Group, Inc.
Adjusted Gross Profit, Adjusted Gross Profit Percentage, Adjusted EBITDA, Adjusted Net Income and Adjusted Diluted Earnings per Share (“EPS”) (Unaudited)
Calculation of Adjusted Diluted Earnings per Share (in thousands, except per share amounts):
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Diluted weighted average shares outstanding | 167,555 | 166,960 | ||||||||||||
| Adjusted Net Income | $ | 12,145 | $ | 5,734 | ||||||||||
| Adjusted Diluted EPS | $ | 0.07 | $ | 0.03 | ||||||||||
13
FAQ
How did Shoals Technologies Group (SHLS) perform financially in Q1 2026?
Shoals reported Q1 2026 revenue of $140.6 million, up 74.9% from a year earlier. Gross profit rose to $41.0 million, while income from operations increased to $7.7 million. After litigation-related charges, the company recorded a small net loss of $0.3 million.
What were Shoals Technologies Group’s adjusted results for Q1 2026?
On an adjusted basis, Shoals generated $21.1 million of Adjusted EBITDA in Q1 2026, up from $13.5 million a year earlier. Adjusted net income was $12.1 million versus $5.7 million, and adjusted diluted earnings per share increased to $0.07 from $0.03.
How strong is Shoals Technologies Group’s backlog and awarded orders?
As of March 31, 2026, Shoals reported backlog and awarded orders of $758.0 million. This represents a 17.5% increase compared with the prior-year period and a 1.4% sequential increase, reflecting continued demand for its products across solar and energy storage markets.
What guidance did Shoals Technologies Group provide for Q2 2026?
For the quarter ending June 30, 2026, Shoals expects revenue between $150 million and $170 million. It also projects Adjusted EBITDA in the range of $28 million to $33 million, based on current business conditions and demand trends disclosed by management.
What is Shoals Technologies Group’s full-year 2026 outlook?
For full-year 2026, Shoals guides to revenue of $600–640 million and Adjusted EBITDA of $118–132 million. It also anticipates operating cash flow of $65–85 million, capital expenditures of $20–30 million, and interest expense of $8–12 million.
How did litigation and legal expenses affect Shoals Technologies Group in Q1 2026?
Q1 2026 results included a $5.3 million litigation settlement expense related to securities litigation and a $6.2 million year-over-year increase in legal expenses. These items contributed to higher general and administrative costs and the small GAAP net loss, despite stronger operating performance.