Original source text
– 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, Tenn., May 05, 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.
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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.
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.
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
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 millionAdjusted 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 millionAdjusted EBITDA1 in the range of $118 million to $132 millionCash flow from operations in the range of $65 million to $85 millionCapital expenditures in the range of $20 million to $30 millionInterest 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. 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:
[email protected]
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, 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 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 (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.
Shoals Technologies Group, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands, except shares and par value) March 31,
2026 December 31,
2025Assets 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 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) $(0.00)Weighted average shares of Class A common stock outstanding: Basic 167,555 166,960 Diluted 167,555 166,960 Shoals Technologies Group, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands) Three Months Ended March 31, 2026 2025 Cash Flows from Operating Activities Net loss$(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 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 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% 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
