Second Quarter 2026
Filed Aug 4, 2026Shoals Technologies Group, Inc. Reports Financial Results for Second Quarter 2026
Revenue increased 47.4% and backlog and awarded orders reached $801.4 million, but gross profit as a percentage of revenue declined to 30.3%, while net income and earnings per share were below the prior-year period. The Company provided third-quarter outlook and reaffirmed full-year outlook.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $163.4 million | – | 47.4% |
| Gross profitGAAP | $49.5 million | – | – |
| Gross profit as a percentage of revenueGAAP | 30.3% | – | – |
| General and administrative expensesGAAP | $28.5 million | – | – |
| Income from operationsGAAP | $18.7 million | – | – |
| Net incomeGAAP | $12.1 million | – | – |
| Earnings per shareGAAP | $0.07 | – | – |
| Adjusted EBITDAnon-GAAP | $31.6 million | – | – |
| Adjusted Net Incomenon-GAAP | $19.7 million | – | – |
| Adjusted Diluted Earnings Per Sharenon-GAAP | $0.12 | – | – |
| Backlog and Awarded Ordersother | $801.4 million | 5.7% | 19.4% |
Third Quarter 2026 outlook
- Revenue$150 million to $170 million
- NoteAdjusted EBITDA in the range of $32 million to $37 million.
- NoteFull Year 2026: Revenue in the range of $600 million to $640 million.
- NoteFull Year 2026: Adjusted EBITDA in the range of $118 million to $132 million.
- NoteFull Year 2026: Cash flow from operations in the range of $65 million to $85 million.
- NoteFull Year 2026: Capital expenditures in the range of $20 million to $30 million.
- NoteFull Year 2026: Interest expense in the range of $8 million to $12 million.
What drove it
- Revenue growth was 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.
- The increase in backlog and awarded orders compared with the prior-year period reflected consistent demand for the Company's innovative products, with growth in emerging battery energy storage markets.
- The Company completed the move into its new facility and reported steady progress toward improving productivity.
- General and administrative expenses increased as a result of a $4.4 million increase in cash and share-based incentive compensation expense due to increased headcount in comparison to the prior-year period.
Concerns
- Gross profit as a percentage of revenue declined year over year due primarily to operational inefficiencies associated with the ramp-up and transition into the new manufacturing facility and product mix within the quarter.
- Gross profit was also affected by costs incurred to address product quality matters, including rework and corrective actions, material-related inefficiencies, and incremental lease accounting amortization.
- Net income and earnings per share were below the prior-year period.
- The Company stated that amounts included in backlog and awarded orders may not result in actual revenue or translate into profits.
What to watch
- Productivity improvement following the move into the new manufacturing facility.
- Resolution of operational, material-related, and product-quality inefficiencies affecting gross profit as a percentage of revenue.
- Conversion of $801.4 million of backlog and awarded orders into revenue and profits.
- Third-quarter revenue in the range of $150 million to $170 million and Adjusted EBITDA in the range of $32 million to $37 million.
- Progress against the reaffirmed full-year revenue, Adjusted EBITDA, cash flow from operations, capital expenditures, and interest expense outlook.
Analysis
Second-quarter revenue was $163.4 million, up 47.4% from $110.8 million in the prior-year period. The Company attributed the growth to strong underlying product demand, market share capture initiatives, and increased project volumes. Backlog and awarded orders were $801.4 million as of June 30, 2026, with reported growth of 19.4% compared to the prior-year period and 5.7% sequentially from March 31, 2026. Management cited consistent demand and growth in emerging battery energy storage markets.
The revenue expansion did not translate into higher reported gross margin. Gross profit was $49.5 million compared to $41.2 million, but gross profit as a percentage of revenue declined to 30.3% from 37.2%. Shoals identified new-facility ramp-up and transition inefficiencies, quarterly product mix, product-quality rework and corrective actions, material-related inefficiencies, and incremental lease accounting amortization as the principal factors. The Company has completed its move into the new facility and identified improving productivity as a key operating objective.
Operating income increased to $18.7 million from $16.0 million, and Adjusted EBITDA increased to $31.6 million from $24.7 million. However, net income declined to $12.1 million from $13.9 million and earnings per share declined to $0.07 from $0.08. General and administrative expenses increased to $28.5 million from $23.1 million, which the Company attributed to a $4.4 million increase in cash and share-based incentive compensation expense driven by increased headcount. Non-GAAP Adjusted Net Income rose to $19.7 million from $17.1 million, while Adjusted Diluted Earnings Per Share rose to $0.12 from $0.10.
For the third quarter, Shoals expects revenue in the range of $150 million to $170 million and Adjusted EBITDA in the range of $32 million to $37 million. The Company reaffirmed full-year outlook for revenue, Adjusted EBITDA, cash flow from operations, capital expenditures, and interest expense. The filing does not provide a reconciliation of forward Adjusted EBITDA to the most comparable GAAP measure, citing uncertainty in predicting relevant GAAP components and non-GAAP adjustments.
The central issues for the reported period are demand conversion and execution. The reported backlog and awarded orders support the demand narrative, while gross-margin pressure highlights the cost of the facility transition, quality actions, and material inefficiencies. Shoals also cautioned that backlog and awarded orders may not result in actual revenue or translate into profits, making margin recovery and backlog conversion central measures for subsequent periods.
Management, verbatim
The year is progressing well, with second quarter revenue and Adjusted EBITDA within our expected range. The market remains resilient as evidenced by our record backlog and awarded orders of $801.4 million. We have completed the move into our new facility and are steadily making progress towards improving productivity.
Brandon Moss, CEO of Shoals
At Shoals, we’ve stayed focused on strengthening our core business while strategically expanding into high-growth markets that are shaping the future of energy, and that strategy is yielding results. With our market position, manufacturing footprint, and innovation pipeline, we believe we’re exceptionally well positioned for what lies ahead and we’re excited by the opportunities in front of us.
Brandon Moss, CEO of Shoals
Not in the filing
stated, not guessed- Prior-period outlook was not provided, so no comparison of reported results with prior guidance is available.
- Segment revenue, segment growth, and segment profitability were not reported in the provided filing text.
- Cash balance and debt balance were not reported in the provided filing text.
- Quarterly operating cash flow, free cash flow, and capital expenditures were not reported in the provided filing text.
- Share repurchases, dividends, and other capital-return activity were not reported in the provided filing text.
- Prior-quarter values for revenue, gross profit, gross margin, general and administrative expenses, income from operations, net income, earnings per share, Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted Earnings Per Share were not reported.
- Forward gross margin, operating expenses, and tax-rate guidance were not reported.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.