SHLS · Shoals Technologies Group, Inc.

Shoals Technologies Group began fiscal 2026 with strong top-line momentum, reporting a 74.9% year-over-year revenue increase to $140.6 million, surpassing the high end of its expected range. This growth was driven by robust underlying demand for products, successful market share capture initiatives, and increased project volumes. The company also achieved a record backlog and awarded orders of $758.0 million, up 17.5% year-over-year, indicating sustained demand visibility.

Profitability metrics presented a mixed picture. While Income from Operations improved to $7.7 million from $4.3 million in the prior year, gross margin contracted to 29.2% from 35.0%. This decline was attributable to $3.8 million in additional tariffs, increased right-of-use asset amortization from a new facility, and higher material costs. Additionally, General and Administrative expenses rose significantly to $31.0 million, largely due to a $6.2 million increase in legal expenses related to wire insulation shrinkback, intellectual property, and shareholder litigation matters. The company also recorded a $5.3 million litigation settlement expense, net of recoveries.

Management expressed confidence in the company's strategic positioning, highlighting the strength of the energy transition market and the benefits of a new state-of-the-art production facility. Consequently, Shoals raised its full-year 2026 revenue guidance to a range of $600 million to $640 million and increased its Adjusted EBITDA guidance to a range of $118 million to $132 million. For the second quarter of 2026, the company expects revenue between $150 million and $170 million.