– Quarterly Revenue of
– Income from Operations of
– Net Income of
– Adjusted EBITDA1 of
– Backlog and Awarded Orders of
– Provides Fourth Quarter and Raises Full-year Outlook –
“We’re very pleased with our strong results in the period, as productivity improvements drove both quarterly revenue and Adjusted EBITDA above our expected range. We remain focused on making meaningful operational improvements as we finish 2026 on a strong note. The long-term health of the market remains robust and we’re well positioned to continue the momentum into 2027 and beyond,” said
"Our strategy is working — and the results prove it. With the move into our new facility complete, our focus today is on the customer; delivering quality solutions, on time, with market-leading customer service. With an unmatched market position, world-class manufacturing, and a breakthrough innovation pipeline, we are built for what's ahead and excited about the opportunities in front of us," added
____________________________________
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.
Third Quarter 2026 Financial Results
Revenue increased 43.8%, to
Gross profit was
General and administrative expenses were
Income from operations was
Net income was
Adjusted EBITDA1 was
Adjusted Net Income1 was
Backlog and Awarded Orders
The Company’s backlog and awarded orders as of
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.
Fourth Quarter 2026 Outlook
At this time, the Company is providing an outlook for the fourth quarter. Based on current business conditions, business trends and other factors, for the quarter ending
- Revenue in the range of
$165 million to$185 million ; and - Adjusted EBITDA1 in the range of
$36 million to$40 million .
Revised Full-Year 2026 Outlook
Based on current business conditions, business trends and other factors, for the full year 2026, the Company now expects:
- Revenue in the range of
$665 million to$685 million ; - Adjusted EBITDA1 in the range of
$129 million to$133 million ; - Cash flow from operations in the range of
$55 million to$65 million ; - Capital expenditures in the range of
$20 million to$30 million ; and - Interest expense in the range of
$11 million to$13 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
In a separate press release issued today, the Company announced it had entered into an Agreement and Plan of Merger and Reorganization with ARRAY Technologies, Inc. Additional information is available in the transaction press release. In light of the transaction announcement, the Company’s previously scheduled third quarter 2026 earnings call will instead be conducted as a joint analyst call with ARRAY Technologies, Inc. on
Interested investors and other parties can view materials related to the Company’s quarterly earnings results on the Investor Relations section of the Company’s website at https://investors.shoals.com.
About
Investor Relations Contact
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; 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.
Some of the key factors and scenarios that could cause actual results to differ from our expectations include, among others, the completion of our proposed transaction with Array Technologies, Inc. on the anticipated terms and timing, including obtaining stockholder and regulatory approvals, the anticipated tax treatment, redemption of Array’s preferred stock, unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies, expansion and growth of Array’s and our businesses and the satisfaction of other conditions to the completion of the proposed Array transaction; the risk that a condition to closing may not be satisfied, that an event, change or other circumstance could give rise to the termination of the proposed Array transaction, or that the proposed Array transaction may not be completed on the expected timeline or at all; failure to realize the anticipated benefits of the proposed Array transaction, including because of a delay in completing the transaction or because our businesses are not integrated successfully on the anticipated timeline, or at all, or integration is more costly or difficult than expected; potential litigation relating to the proposed Array transaction that could be instituted against us, Array, or our respective directors and officers; the risk that disruptions from the proposed Array transaction will harm our or Shoals’ businesses, including our current plans and operations, or divert management’s attention from ongoing business operations and opportunities; our ability to retain and hire key personnel; potential adverse reactions or changes to business, employee, customer or supplier relationships resulting from the announcement, pendency or completion of the proposed Array transaction; the risk that the announcement, pendency or completion of the proposed Array transaction could adversely affect the market price or long-term value of our common stock; 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, and 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; 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, 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
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 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
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.
| Condensed Consolidated Balance Sheets (Unaudited) (in thousands, except shares and par value) | |||||||
2026 | 2025 | ||||||
| Assets | |||||||
| Current Assets | |||||||
| Cash and cash equivalents | $ | 7,674 | $ | 7,320 | |||
| Accounts receivable, net | 159,822 | 128,793 | |||||
| Unbilled receivables | 12,617 | 22,133 | |||||
| Inventory | 148,348 | 89,878 | |||||
| Insurance receivable | 499 | — | |||||
| Other current assets | 12,174 | 9,762 | |||||
| Total Current Assets | 341,134 | 257,886 | |||||
| Property, plant and equipment, net | 62,686 | 53,302 | |||||
| 69,941 | 69,941 | ||||||
| Other intangible assets, net | 27,810 | 33,499 | |||||
| Deferred tax assets | 428,540 | 438,027 | |||||
| Right-of-use operating lease assets | 42,881 | 46,044 | |||||
| Other assets | 5,704 | 5,402 | |||||
| Total Assets | $ | 978,696 | $ | 904,101 | |||
| Liabilities and Stockholders’ Equity | |||||||
| Current Liabilities | |||||||
| Accounts payable | $ | 27,400 | $ | 64,875 | |||
| Accrued expenses and other | 44,143 | 22,215 | |||||
| Litigation settlement liability | 5,999 | — | |||||
| Warranty liability—current portion | 5,281 | 3,202 | |||||
| Deferred revenue | 56,216 | 37,031 | |||||
| Total Current Liabilities | 139,039 | 127,323 | |||||
| Revolving line of credit | 163,750 | 136,750 | |||||
| Right-of-use operating lease liabilities | 36,391 | 38,661 | |||||
| Warranty liability, less current portion | 403 | 403 | |||||
| Other long-term liabilities | 991 | 991 | |||||
| Total Liabilities | 340,574 | 304,128 | |||||
| Commitments and Contingencies | |||||||
| Stockholders’ Equity | |||||||
| Preferred stock, | — | — | |||||
| Class A common stock, | 2 | 2 | |||||
| Additional paid-in capital | 501,528 | 493,090 | |||||
| (25,272 | ) | (25,272 | ) | ||||
| Retained earnings | 161,864 | 132,153 | |||||
| Total Stockholders' Equity | 638,122 | 599,973 | |||||
| Total Liabilities and Stockholders’ Equity | $ | 978,696 | $ | 904,101 | |||
| Condensed Consolidated Statements of Operations (Unaudited) (in thousands, except per share amounts) | |||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||
| 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 | |||||||||||
| Operating expenses | |||||||||||||||
| General and administrative expenses | 31,003 | 29,423 | 90,482 | 74,180 | |||||||||||
| Depreciation and amortization | 2,427 | 2,158 | 7,043 | 6,433 | |||||||||||
| Total operating expenses | 33,430 | 31,581 | 97,525 | 80,613 | |||||||||||
| Income from operations | 28,966 | 18,671 | 55,406 | 38,981 | |||||||||||
| Interest expense | (3,894 | ) | (2,832 | ) | (10,271 | ) | (7,483 | ) | |||||||
| Interest income | — | 38 | 327 | 232 | |||||||||||
| Litigation settlement expense, net of recoveries | (1,000 | ) | — | (6,250 | ) | — | |||||||||
| Gain (loss) on sale of assets | (2 | ) | (7 | ) | (4 | ) | 3,127 | ||||||||
| Foreign currency gain (loss) | 18 | — | (10 | ) | — | ||||||||||
| Income before income taxes | 24,088 | 15,870 | 39,198 | 34,857 | |||||||||||
| Income tax expense | (6,218 | ) | (3,991 | ) | (9,487 | ) | (9,405 | ) | |||||||
| Net income | $ | 17,870 | $ | 11,879 | $ | 29,711 | $ | 25,452 | |||||||
| Earnings per share of Class A common stock: | |||||||||||||||
| Basic | $ | 0.11 | $ | 0.07 | $ | 0.18 | $ | 0.15 | |||||||
| Diluted | $ | 0.11 | $ | 0.07 | $ | 0.17 | $ | 0.15 | |||||||
| Weighted average shares of Class A common stock outstanding: | |||||||||||||||
| Basic | 168,377 | 167,369 | 168,000 | 167,206 | |||||||||||
| Diluted | 170,133 | 168,750 | 170,058 | 167,725 | |||||||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) (in thousands) | |||||||
| Nine Months Ended | |||||||
| 2026 | 2025 | ||||||
| Cash Flows from Operating Activities | |||||||
| Net income | $ | 29,711 | $ | 25,452 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 13,802 | 9,984 | |||||
| Amortization/write off of deferred financing costs | 699 | 467 | |||||
| Equity-based compensation | 11,795 | 7,674 | |||||
| Provision for obsolete or slow-moving inventory | 3,030 | 1,090 | |||||
| Provision for warranty expense | 8,947 | 256 | |||||
| Deferred taxes | 9,487 | 10,574 | |||||
| Other | 5,295 | (3,127 | ) | ||||
| Changes in assets and liabilities: | |||||||
| Accounts receivable | (31,029 | ) | (39,283 | ) | |||
| Unbilled receivables | 9,516 | 13,129 | |||||
| Inventory | (61,500 | ) | (5,463 | ) | |||
| Other assets | (3,413 | ) | 2,465 | ||||
| Accounts payable | (37,475 | ) | 12,566 | ||||
| Accrued expenses and other | 17,530 | 11,661 | |||||
| Warranty liability | (6,868 | ) | (33,653 | ) | |||
| Litigation receivable and settlement liabilities | 5,500 | — | |||||
| Deferred revenue | 19,185 | 7,362 | |||||
| Net Cash Provided by (Used in) Operating Activities | (5,788 | ) | 21,154 | ||||
| Cash Flows from Investing Activities | |||||||
| Purchases of property, plant and equipment | (17,501 | ) | (25,879 | ) | |||
| Proceeds from sale of property, plant and equipment | — | 5,088 | |||||
| (17,501 | ) | (20,791 | ) | ||||
| Cash Flows from Financing Activities | |||||||
| Employee withholding taxes related to net settled equity awards | (3,357 | ) | (344 | ) | |||
| Proceeds from revolving credit facility | 60,000 | 50,000 | |||||
| Repayments of revolving credit facility | (33,000 | ) | (65,000 | ) | |||
| Excise taxes on treasury stock transactions | — | 59 | |||||
| Net Cash Provided by (Used in) Financing Activities | 23,643 | (15,285 | ) | ||||
| Net Increase (Decrease) in Cash and Cash Equivalents | 354 | (14,922 | ) | ||||
| Cash and Cash Equivalents—Beginning of Period | 7,320 | 23,511 | |||||
| Cash and Cash Equivalents—End of Period | $ | 7,674 | $ | 8,589 | |||
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 | Nine Months Ended | ||||||||||||||
| 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 | Nine Months Ended | |||||||||||||
| 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 | Nine Months Ended | ||||||||||||||
| 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 | |||||||||||
| 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
(b) For the three and nine months ended
(c) For the three and nine months ended
(d) Represents costs incurred in connection with the recently announced proposed transaction with ARRAY Technologies, Inc., 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
| Three Months Ended | Nine Months Ended | ||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||
| Statutory | 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 | Nine Months Ended | ||||||||||
| 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 | |||
