SHLS

Shoals' second quarter results for 2026 came in above Wall Street’s revenue and earnings expectations, but the market reacted negatively to the report. Management pointed to robust demand in the core utility-scale solar market and record levels of new orders as key drivers of the quarter. CEO Brandon Moss emphasized ongoing operational improvements and a successful legal outcome in a major intellectual property case as factors supporting the company’s performance. However, a decline in operating margin and cautious commentary on the pace of productivity gains highlighted some of the operational hurdles Shoals faces as it consolidates manufacturing operations. Is now the time to buy SHLS? Find out in our full research report (it’s free). Revenue: $163.4 million vs analyst estimates of $160 million (47.4% year-on-year growth, 2.1% beat) Adjusted EPS: $0.12 vs analyst estimates of $0.10 (20.3% beat) Adjusted EBITDA: $31.55 million vs analyst estimates of $29.82 million (19.3% margin, 5.8% beat) The company reconfirmed its revenue guidance for the full year of $620 million at the midpoint EBITDA guidance for the full year is $125 million at the midpoint, above analyst estimates of $123 million Operating Margin: 11.5%, down from 14.4% in the same quarter last year Backlog: $801.4 million at quarter end, up 19.4% year on year Market Capitalization: $1.44 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Philip Shen (ROTH Capital Partners): Asked about the timing and magnitude of revenue from the new TerraFlow partnership. CEO Brandon Moss clarified that meaningful revenue is expected to start in 2027, with no impact in 2026. Julien Dumoulin-Smith (Jefferies LLC): Inquired about factors that could enable Shoals to raise guidance. Moss reiterated the company’s focus on execution and operational efficiency, highlighting a strong project pipeline as a prerequisite for potential guidance changes. Christine Cho (Barclays): Questioned the sustainability of margin improvements given production fluctuations. CFO Dominic Bardos explained that fewer production days in Q4 may slightly pressure margins, but overall improvements are expected as efficiencies ramp up. Christopher Dendrinos (RBC Capital Markets): Asked about the strategic significance of the wire management business and international margin profiles. Moss described wire management as a small part of the business and noted international margins vary based on product mix and geography. Praneeth Satish (Wells Fargo): Sought clarity on AirLink’s market potential and pricing. Moss said AirLink has strong early customer interest and is likely to command a price premium, with initial live installations targeted for 2026. In the coming quarters, our analyst team will track (1) Shoals’ ability to improve productivity and margins as its consolidated facility ramps up, (2) the pace of order conversion and backlog fulfillment, especially in new product lines like BESS and AirLink, and (3) progress in international expansion and new partnerships such as TerraFlow. Additionally, we will monitor the impact of evolving trade policy and tariffs on customer demand and cost structure. Shoals currently trades at $8.53, down from $9.37 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free for active Edge members). WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses. But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Tuesday, Aug. 4, 2026 at 8:00 a.m. ET Vice President of Finance and Investor Relations - Matthew Tractenberg Chief Executive Officer - Brandon Moss Chief Financial Officer - Dominic Bardos Operator: Good morning, and welcome to the Shoals Technologies Group Second Quarter 2026 Earnings Conference Call. Today's call is being recorded, and we have allocated 1 hour for prepared remarks and Q&A. At this time, I would like to turn the conference over to Matt Tractenberg, Vice President of Finance and Investor Relations for Shoals Technologies Group. Thank you. You may begin. Matthew Tractenberg: Thank you, Warren, and thank you, everyone, for joining us today. Hosting the call with me is our CEO, Brandon Moss; and our CFO, Dominic Bardos. On this call, management will be making projections or other forward-looking statements based on current expectations and assumptions, which are subject to risks and uncertainties and should not be considered guarantees of performance or results. Actual results could differ materially. Those risks and uncertainties are listed for investors in our most recent SEC filings. Today's presentation also includes references to non-GAAP financial measures. You should refer to the information contained in the company's second quarter press release for definitional information and reconciliations of historical non-GAAP measures to the nearest comparable GAAP financial measures. Please note that the slides you see here are available for download from the Investor Relations section of our website at investors.shoals.com. With that, let me turn the call over to Brandon. Brandon Moss: Thank you, Matt, and thanks to everyone joining us on the call. Second quarter revenue was within our guided range at $163 million, up 47% over the prior year period. Our commercial team continued their strong performance by adding approximately $207 million of new orders in the period, resulting in a solid book-to-bill of 1.3. This drove another company record backlog and awarded orders or BLAO of $801 million, an increase of 19% year-over-year. As of quarter end, approximately $700 million of our BLAO has shipment dates in the upcoming 4 quarters through Q2 of 2027. Second quarter adjusted gross profit percentage was also within our expected range at 30.6%. We expect to continue making progress in margin improvement driven by positive mix and productivity gains and supported by the strong underlying demand environment. SG&A, including all legal expense, was $28 million, representing 17% of revenue, a 400 basis point decline as compared to 21% last year. Second quarter adjusted EBITDA of $31.6 million came in within our guided range and grew approximately 28% year-over-year. As you've seen, we also prevailed in our 2025 ITC case against Voltage, this was a critical outcome for our shareholders and U.S. innovation in general. We look forward to resolving the matter of damages in our upcoming district court case. We are very optimistic in how we see the market evolving and our competitive position of strength. We continue to expand production at a measured pace to ensure we deliver products with the speed and quality customers expect from us. Factory consolidations are never an easy task, but we've made steady progress and continue to identify opportunities for improvement. While I'm encouraged by the consistent weekly and monthly improvement as we deploy new lean manufacturing processes, we still have work to do. The operational improvements we will realize from this strategic initiative will drive value for all stakeholders in future periods. Briefly turning to our various business lines. The second quarter was another strong period of growth within our core utility-scale solar market. Once again, our quote volume in the quarter exceeded $1 billion of unique projects, adding to our strong pipeline. I'm also encouraged by the progress we're making in key international markets like Australia as evidenced by our increased quote activity and customer engagement. International BLAO now stands at $102 million, driving continued growth and diversification in 2027 and beyond. Our community, commercial and industrial business or CC&I business, which remains a small piece of our overall mix, continues to perform well. Our OEM business is providing a stable and visible revenue stream, growing at 51% on a year-over-year basis. And finally, we produced approximately $20 million of BESS revenue in the quarter and secured approximately $10 million of additional orders. BESS BLAO now stands at $65 million. As previously stated, BESS orders will be episodic and are dependent on how customers manage construction schedules. I'm also excited to announce a partnership with TerraFlow, a leading grid-scale developer of long-duration energy storage infrastructure. Under the agreement, Shoals will support TerraFlow's growing energy storage portfolio with our Power Hub Recombiner solution for utility scale and data center applications. The MOU is intended to support TerraFlow's future deployment plan of up to 5 gigawatts annually. Overall, the quarter played out as anticipated, and the year is tracking to our expectations. We are executing well to finish the move into our new facility and are expanding capacity and capabilities at a measured pace. Underlying demand remains intact, and our competitive position has strengthened. We're very excited about what we see ahead of us. Dom, I'll hand it over to you for a deeper dive into our financial performance and guidance. Dominic Bardos: Thanks, Brandon, and greetings to everyone on the call. Revenue increased by approximately 47% year-over-year to $163.4 million. The increase was largely driven by strong demand from both new and existing customers within our core U.S. utility scale solar market and our BESS business segment contributing meaningfully in the period. Gross profit was $49.5 million compared to $41.2 million in the prior year period, an increase of 20%. Our GAAP gross profit percentage was 30.3% and adjusted gross profit percentage was 30.6% within our expectations. As Brandon stated, we believe we will continue to expand gross profit percentage as we realize the benefit of our new factory and positive product mix, all supported by a robust demand environment. Ultimately, we are focused on driving incremental profit dollars to the P&L, a strategy which will create value for all stakeholders. Selling, general and administrative expenses, or SG&A, was $28.5 million or $5.4 million higher than the prior year period. This was driven by an additional $4.4 million in payroll and employee expenses due to increased headcount and achievement of variable compensation targets relative to the prior year. Legal expenses declined slightly versus the prior year as our ITC and class action litigation matters came to a close. Our district court case to determine damages against Voltage is expected to be completed in the third quarter. Income from operations or operating profit was $18.7 million or 11.5% of revenue, growing at 17.0% year-over-year. This compared to $16.0 million during the prior year period. GAAP net income was $12.1 million compared to $13.9 million during the prior year period. Please recall that we recognized a $3.1 million gain on the sale of a manufacturing facility in the prior year period. Adjusted net income was $19.7 million, an increase of 15% as compared to $17.1 million in the prior year period. Adjusted EBITDA was $31.6 million compared to $24.7 million in the prior year period, representing 27.9% growth year-over-year. Adjusted diluted earnings per share of $0.12 was $0.02 higher than the prior year period. Operationally, we generated $6.8 million of cash in the second quarter, driven by an increase in both deferred revenue and accrued liabilities. We ended the quarter with cash and equivalents of $15.7 million and net debt to adjusted EBITDA of 1.6x. Our net debt was $181.1 million, an increase over the prior quarter. Since we last spoke, we also temporarily expanded the capacity of our revolving credit facility by $50 million, providing us the flexibility we need to grow our business. Backlog and awarded orders ended the second quarter at a record $801.4 million, a sequential increase of $43.4 million. Our record backlog constitutes $425.1 million of the total BLAO, providing us with the confidence that the growth projections we have for the upcoming periods can be achieved. Congratulations to the commercial team on another strong bookings quarter. As of June 30, $699.7 million of our backlog and awarded orders have planned delivery dates in the coming 4 quarters through Q2 of 2027, with the remaining $101.7 million beyond that. Turning to guidance. For the quarter ending September 30, 2026, the company expects revenue to be in the range of $150 million to $170 million, representing 18% year-over-year growth at the midpoint and adjusted EBITDA to be in the range of $32 million to $37 million, representing 8% year-over-year growth at the midpoint. For the full year 2026, we are reaffirming our prior guidance and continue to expect revenue to be between $600 million and $640 million, representing year-over-year growth of 30% at the midpoint and adjusted EBITDA to be in the range of $118 million to $132 million, representing year-over-year growth of 26% at the midpoint. In addition, for the full year, we still expect cash flow from operations in the range of $65 million to $85 million, capital expenditures in the range of $20 million to $30 million and interest expense in the range of $8 million to $12 million. With that, I'll turn it back over to Brandon for closing remarks. Brandon Moss: Thank you, Dominic. The U.S. market continues to be robust, and we are focused on improving productivity each month. The need for energy from all sources has never been as strong as it is today, and we believe Shoals is increasingly well positioned to deliver sustainable growth as our strategic and operational initiatives translate into measurable progress. We are strengthening our core markets and reinforcing our competitive position. We have accelerated innovation to deliver more differentiated products and greater customer value. We're expanding into attractive new markets that increase our total addressable opportunity. We are diversifying our market and customer exposure to create a more resilient business. We've invested in automation and technology to drive productivity and support margin expansion over time. And we are building the leadership depth needed to execute our transformation and deliver on our long-term objectives. We want to thank our shareholders and customers for their continued trust and our employees for their hard work and dedication. Operator, we are now ready to take questions. Operator: [Operator Instructions] Your first question comes from the line of Philip Shen with ROTH Capital Partners. Philip Shen: First one is on the tariff MOU signed and announced yesterday. I was wondering if you could give us some more color on the 5 gigawatts of annual storage deployments. What's the expected time line for first meaningful volume? And how does this partnership complement or differ from the ON.energy relationship? Brandon Moss: Phil, thanks for the question. We are very excited about the TerraFlow MOU. We are in the process right now of starting our engineering cycle with those guys to help develop an engineered solution for deployment. I would probably model that revenue will begin in 2027. We will not see an impact in 2026. I think you had a question also related to ON.energy. These guys obviously are trying to build a solution that can be deployed in renewable sites and data centers. They come at the solution with a different approach using vanadium and effectively can create a both short- and long-cycle duration battery solution with very similar goals of reducing frequency energy spikes, all the necessary things that are needed to manage the energy flow in a data center today. So couldn't be more excited about the partnership with those guys. And it's a meaningful step for us to continue to diversify our customer base, which is very important, obviously. Philip Shen: Great. Shifting over to your recent bookings and additions to backlog. I was wondering if you might be able to comment on, especially given the ITC case and that positive outcome for you and what could be coming with the district court case. Can you talk about pricing and margins of your newer orders versus what's been delivered? Meaning should we see a little bit of expansion in the margin? Or is it steady? Or is it a little bit -- the margin a little more compressed than the bookings given some of the new business that you're taking on and the product mix shift that you guys have seen recently? Brandon Moss: Yes. Thanks, Phil. Probably won't get real specific on this. The demand environment, obviously, is very strong as evidenced by our record backlog and awarded orders and $1 billion of discrete project quotes. So I would say, in general, the pricing behavior is responding to that accordingly. Just as a reminder, we've got a long sales cycle. So things that are happening today won't transpire for another 12 months, give or take. So we're pleased with the pricing environment. It's incorporated in our guidance. As we've communicated, we expect margins to improve throughout the year. And again, that is factored into our guide. Operator: Your next question comes from the line of Julien Dumoulin-Smith with Jefferies LLC. Julien Dumoulin-Smith: I just want to follow up on the guidance here real quickly here. Can you talk a little bit about the factors that would give you sort of momentum to raise here? I mean, obviously, reaffirming, but obviously, looking at a number of the factors here trending year-to-date. How would you think about the puts and takes here, both reaffirming today, but prospectively, what could put you in a better position here? Brandon Moss: Yes, certainly. Good to hear from you, Julien. Just maybe a reminder and you probably recall, we raised our full year guidance on the Q1 call. So again, as you mentioned, we have affirmed our guidance for the full year today. Our goal is to give guidance that's reasonable and achievable. We have got 30% growth factored into the midpoint of our guidance on the top line and 26% from an EBITDA standpoint. And I think strong guidance for Q3 as well, up about 18% on the top line. Look, we're excited about the market backdrop. Again, as I mentioned on Phil's question, $1 billion in discrete projects. We have got a very strong book of business, and we look forward to executing on that through the back part of the year. Maybe touching on just our best bookings, great production growth in Q2, where we produced $20 million. We added $10 million in the quarter, could still potentially book some business there for the remainder of the year. And maybe most importantly, as we've talked about our bookings related to BESS, and it would be sort of chunky in the early stages of our business. We did book a handful of projects after quarter close that we're excited about. So our focus is execution through the back end of the year, producing as much product as we can at this new mega facility and making it as efficient as possible. And if we do that, that will give us more confidence in how the full year plays out. Julien Dumoulin-Smith: Got it. And maybe if I can ask more specifically within the numbers here, should we expect any IEPA refunds in third quarter? And was there anything in 2Q like some of the peers have been seeing just in terms of the tariff aspect here? And then separately, how should we think about margin inflection? I know my [ Powell ] previously here was kind of asking a similar line of question here, but how much of the margin is impacted by, say, product mix versus new facilities and other factors here? You got a number of different pieces moving into this. Dominic Bardos: Yes. Julien, it's Dominic. Yes. So with regards to IEPA, we did receive some refunds in the second quarter. Not 100% of that hit the income statement because we still had some inventory that was subject to the IEPA. So that will play out here in the third quarter. So that was a favorable assist. In our Q, you'll see that we had some other items that kind of offset that, but it was largely within our expected range. In terms of margin kind of pacing, we've said that the mix is always very important to us. The first half of the year had some more long-tail BLAO as an example, compared to the back half of the year. So favorable mix of products will help us here as we kind of normalize the production -- product mix in the back half. And as Brandon mentioned, the efficiencies in the new factory are important. Anytime you move 3 facilities into 1, it's a complex move. And we're getting to learn the space and work on our efficiencies of production. And so we have the opportunity to get more leverage within our operations here, more fixed cost leverage as we push more product through. And we're very excited about that ability to keep expanding the margin through the back half, as we've said before. Operator: Your next question comes from the line of Christine Cho with Barclays. Christine Cho: If I could just follow up on that margin question. The EBITDA guide for 3Q would imply a step-up in gross margin. But then assuming the midpoint of your guide, it would indicate 4Q top line is down from 3Q. So like how should we think about -- should we think gross margins would be negatively impacted by that just due to less fixed cost absorption? Or no, like we should still assume it's sequentially up due to product mix. Dominic Bardos: Yes. So Christine, thanks for the question. Yes, the margin, and there is an implied slight reduction in Q4. Q4 always has fewer production days for us and the orders and timing of best deliveries will have an impact. So the product mix might be slightly off a little bit different in Q4 than Q3. But at the pace that we're going, and if we're able to secure some more short-term orders, some of the best orders can be more short term in nature. We'll be in a position to have that improvement. On the EBITDA side, keep in mind that our trial, our district court case is in the third quarter. That's going to happen very shortly in North Carolina. And so that will have a bit of a drag on the EBITDA side because that expense is fully recognized. We don't add back our voltage IP protection sorts of things. So that will go away in Q4, so that would help us back on the EBITDA side. So yes, you're right, there's a little bit less production probably modeled right now in Q4, but we'll do what we can to maximize our efficiencies and push product right through. Christine Cho: Okay. And then the leverage has been sort of steadily rising over the last, let's call it, 1.5 years, 2 years. And part of it is you haven't generated free cash flow. So just curious how long we think that this should create. Can you remind us from a cash perspective, like litigation expenses, how much you're still expecting for the remainder of the year? And then can you also update us on where things stand in trying to get damages awarded with respect to the wire and the district court cases and how we should think about the range of outcomes? Dominic Bardos: Yes. So a number of things in there from a cash flow perspective. One, in the first half of the year, we invested heavily in inventory. We have a very strong book of business with record purchase orders, record backlog. And so we acquired materials largely in advance of some of the step-up in cost as well. So the investments that we made in the inventory will provide positive cash flows here in the back half as we burn that back down to a more targeted measure. We did take very strong positions in our core wire products and cabling products. In terms of what we expect, our guidance is still to turn a significant amount of cash in the back half of the year, which would be freed up to pay down on the revolver. We did have a step-up in the revolver in the period, but net debt stayed about flat. As we continue to improve EBITDA, clearly, the leverage ratio will improve. So at 1.6x, we have -- that's a perfectly acceptable and fine leverage ratio, and we expect that, that will improve here in the back half. Operator: Your next question comes from the line of Chris Dendrinos with RBC Capital Markets. Christopher Dendrinos: I wanted to ask about cable wire management products, and there was an acquisition by one of your peers. And I know you all have kind of a wire cliffs business as well, but we don't hear a whole lot about it. So maybe just overall, how do you think about that cliffs business? Is there opportunity there? Is there IP in that business? And how do you think about it? Brandon Moss: Yes, Chris, thanks for the question. Absolutely aware of what's going on in the market around wire management. I guess maybe the first point I would make there is Shoals continues to partner with multiple tracker solutions, multiple wire management solutions. We think of ourselves as sort of agnostic in that case. And whatever the customer is using, whether it be tracker or wire management, we work with them to design our solution to best fit their project. So I know the company very well. Happy for them in their ability to transact in that business. As far as our wire management business, it's a very small piece of what we offer, probably not as much of a focus for us in terms of growth vectors is other areas as we move our business into the data center space with battery energy storage and now our AirLink products. Christopher Dendrinos: Got it. And then maybe just as a follow-up here, and I know there's been a focus on the margin profile. I think you've got international that's ramping into next year. And so how should we think about the margin profile of that international business compared with the U.S. Brandon Moss: Yes. The answer to that, Chris, is it depends on the particular market can have an impact on that. And then whether we are producing the product here fully and it's a domestically shipped export, call it, project. That makes a pretty significant piece of our backlog up of roughly $100 million. It's probably 2/3 of it potentially. Those projects will look and feel very similar to a traditional U.S.-based BLAO project. Where we've got more organic opportunities in market like specifically Australia, pricing may not be as strong as those export markets. So it just depends on the product mix, the product, the geography and will vary project to project. Operator: Your next question comes from the line of Praneeth Satish with Wells Fargo. Praneeth Satish: Switching to AirLink. So it seems like a highly differentiated product. It doesn't seem like there's many competitors doing that exact product. I guess based on your early conversations with customers, how has reception been? Do you think there's going to be an educational period as customers become familiar with the product? And then while I know it's still early, but just generally, when we think about AirLink ASPs, do you imagine them being in line with or above or below traditional busway solutions? Brandon Moss: Yes, Praneeth, great question. We are excited about AirLink. The customer reception to that product has been very, very significant. Of course, there's going to be -- there will be an educational period. This is a product that is, quite frankly, a disruptor to the market and how power is delivered to the rack. So there certainly will be a bit of a learning curve, not only for the engineers that are designing this, the installers, but even local inspectors that are qualifying these products from a national electric code standpoint. So there will be a learning curve there, but it is something that is certainly achievable given the excitement around the product. Our goal, again, is to have a product installed live from a test perspective in 2026, and we are on track to do that. We've got IP filed and then internal testing at third-party labs underway to validate this product. So a lot will transpire in the back part of this year for that particular product. As far as ASPs goes, we're obviously not 100% set on that. This product will deliver substantial value to the ultimate owner and also the installer. So I would expect a price premium over other available options in the marketplace. Praneeth Satish: Got it. That's helpful. And then just longer term, if we think about the portfolio of the different products that you have now, I guess, is it correct to directionally kind of rank these projects from a margin perspective, lowest to highest is OEM, long tail, battery combiner, solar, BLAO and then AirLink at the top. And then so if AirLink does start to become a larger share of revenue, I guess, really in 2028, could we expect an uplift in consolidated gross margins, all else being equal? Brandon Moss: Yes. I think, Praneeth, that's probably a pretty good list. I might flip the best products and the solar products, if I was forced ranking those. But I think you're directionally correct there. And obviously, the new products that we're introducing, whether it be AirLink or BESS products, highly engineered, we expect those products to command accretive margins in relation to our total business. So our goal is to always generate positive mix profiles with the new products that we're introducing. In some cases, you can do that. In some cases, you can as it relates to maybe a long-tail BLAO, but that's always our intention. Operator: Your next question comes from the line of Brian Lee with Goldman Sachs & Co. Brian Lee: Kudos on the nice execution. I guess on that front, I'd be curious, can you talk a little bit about the state of the book and turn business with the BLAO at record levels and the sequential growth. I just -- and the demand environment being so good, I would have expected maybe you have a more upbeat outlook for the rest of the year in terms of the top line. So just maybe any kind of puts and takes around either the state of the book and turn business? Or is this a potential production or just lead time issue? Just it seems like it translate this year. I know '27 is shaping up pretty strong. Dominic Bardos: Sure, Brian. It's Dominic here. In terms of our book and turn business, first of all, I just want to remind us all that we did raise our annual guide last quarter. We did see a good healthy book and turn business for the year. So I think our book and turn business has been strong. We do have -- we're managing the capacity within our new facility. Keep in mind that we've moved everything over here in the first half of the year. And now we have a chance to really maximize that efficiency. So there's interest. If we can pull projects in, there's always that interest. In terms of our booking cycle, it has lengthened a little bit. We do have some backlog into Q1 now for the year. And some of that might be international, but there's other domestic products that are going forward in Q1 as well. So in the past, we might have said the backlog converts within a 6-month window. That's lengthening a little bit these days. But we're very pleased with the demand environment. The underlying fundamentals are very strong. There's a preference for the Shoals products in the marketplace, and we will do what we can to maximize efficiency of this brand-new facility. Brian Lee: All right. That's helpful color. And then just a second question on the -- I know it came up in an early question from Phil, but the ON.energy partnership, I guess they recently announced a 5-gigawatt deal with Crusoe. I'd be curious, what's your participation in that? Are you an exclusive supplier? Is it just on the Recombiner solution? And then are you already seeing an impact on backlog awarded orders or even revenue? Or is that all '27 and beyond? Just maybe any quantification you can kind of provide and timing expectations. Brandon Moss: Yes. Thanks, Brian. We're obviously still continue to be very excited about our partnership with ON.energy. Those products, largely the revenue generation in Q2 or $20 million was for that particular customer. And maybe more importantly, those products are landing and being installed on the largest battery paired AI data center site in the country. So a very exciting step for Shoals to validate our product and our solutions. As it relates specifically to the ON.energy Crusoe announcement, I can't talk specifically about projects. But obviously, we have great visibility into their pipeline and as their business grows, I would expect that Shoals will be a big part of that solution as they're designing these systems. As I mentioned earlier, after the quarter closed, we booked a handful of projects. And you could probably guess that a few of those handful of projects may be that one particular customer. So unfortunately, we can't talk about specific projects or our customers' customer. Operator: Your next question comes from the line of Colin Rusch with Oppenheimer & Co. Colin Rusch: Now that you've got a little bit more robust portfolio of products and particularly with AirLink, can you talk about the cross-selling opportunities that you're starting to see and how your customer focus may shift here over the next year or so? Brandon Moss: Colin, fantastic question. As we show AirLink product, there is obviously a direct connection of what we can do to that product with other electrical apparatus. That's an opportunity for us for organic growth and potential M&A activity as things transpire. The other exciting thing that we're seeing as we interact with data center owners is the possible use cases for our BLAO product, whether that be in the broader electrical infrastructure and battery storage or even other opportunities within the data center itself. So it's exciting for us. We've got great relationships with these larger EPCs. Those EPCs, obviously, that are working in renewables projects are also working in the data center build-out. So it's great synergy from both a product standpoint and a channel standpoint for Shoals right now, quite frankly. So great question. Colin Rusch: And then just from an operational perspective, it looks like you guys are set up for some really significant improving incremental operating margins. And so I just want to get a sense of what you guys are targeting in terms of those incremental operating margins here on a go-forward basis and how we should think about OpEx trending as we get into '27? Dominic Bardos: Sure. So Colin, I appreciate the questions. We're not quite ready to guide '27 yet, but our intention is to keep moving margins, all things being equal from a mix standpoint, up sequentially. We believe that we have cost leverage, fixed cost absorption that will be coming into play. We have one redundant facility that will be exiting us midyear of '27 as well. And we do have some favorable mix and some good products coming online that will generate margins that are accretive to where we are today. So I think the longer-term outlook for us remains healthy with regards to margin expansion from where we are today. As we've guided earlier in the year, and I'm always cautious with regards to gross margin because I think it goes down a bit of a rabbit hole. But gross margin will sequentially improve. Our expectations are that gross margins will continue to sequentially improve as we learn this new facility. Keep in mind, we're now operating in a 14-acre facility, and it's taking us a little bit of time from the complexities of getting all the productivity right that we want to see. So we will see continued improvement, just all things being equal going forward and product mix as we have a higher mix of traditional BLAO versus long-tail BLAO in the back half will be favorable for us as well. So we're going to do everything we can to move those margins up. As we've said this year, the low to mid-30s is right where we need to be, and we're going to keep moving that margin into that bandwidth. And we look forward to being able to share 2027 with you at a future date. Operator: Your next question comes from the line of Maheep Mandloi with Mizuho. Maheep Mandloi: I think most have been answered. But maybe just high level on the tariffs over here since someone else, like are you hearing any customers talk about that or worried about that in terms of demand from either Section 232 tariffs or other policy changes over here? Brandon Moss: Yes, absolutely, Maheep. We're monitoring the landscape closely, whether it's Section 232, the latest news on inverters. I don't see that having near-term impact for us whatsoever and potentially some speed bumps along the way longer term, but I don't think it changes at all the underlying demand environment. We continue to believe that this market is going to be stronger for longer, as we've said over and over again, and we're seeing that come through in our quote volume and book of business. So we're very excited about the underlying demand environment. I think we have set ourselves up appropriately to continue to protect and grow our core business. Again, that's evidenced by our backlog. And what's really helped us there is our new product introductions in our core products, if you think about long-tail BLAO, if you think about our SuperJumper Super Harness products, we have a more diverse customer portfolio than ever before, which is very exciting for us. I think we're -- along with the solar market, we are certainly on the right track in diversifying our business as it relates to the data center space specifically, and we are realizing wins in the battery energy storage space and very excited about our AirLink product. So I think the markets and the way that we're executing commercially in those markets are set up for us to have continued success. And additionally, when you think about the investments we've made here in Portland, Tennessee with our Mega facility, those came at absolutely the right time for us to be able to handle this growth, whether it be in our core markets or more diverse markets like battery energy storage. So exciting times ahead for Shoals, whether it be market-driven or our execution, but we're in a very good spot. Matthew Tractenberg: Great. Well, [ Lauren ], that's going to be all the time we have for questions today. I do want to note that we have a very active IR calendar through September. Those events are listed on the Investors section of our website. So if you're attending any conferences and would like to meet with us, please do let us know. We can help you further, please reach out to [email protected] with any questions. Thanks for joining us today. Have a great day, everyone. Thanks, everyone. Brandon Moss: Thank you. Operator: This concludes today's call. Thank you for attending. You may now disconnect. Before you buy stock in Shoals Technologies Group, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Shoals Technologies Group wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $411,427!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,335,252!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 11, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool recommends Shoals Technologies Group. The Motley Fool has a disclosure policy. Shoals Technologies (SHLS) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Get insights on thousands of stocks from the global community of over 7 million individual investors at Simply Wall St. Shoals Technologies Group (SHLS) just released second quarter results, reaffirmed its 2026 revenue guidance and signed an MOU with TerraFlow Energy. Together, these updates give investors fresh information on growth, profitability and future project opportunities. See our latest analysis for Shoals Technologies Group. The Shoals Technologies Group share price has climbed 3.84% over the last day and 2.17% over the past week, although the 30 day share price return is down 10.88%. Even so, the 1 year total shareholder return of 89.19% contrasts with weaker multi year total shareholder returns, which suggests recent momentum has picked up after a longer period of pressure. If you are looking beyond Shoals and want to see which other power grid players are catching attention, this is a good moment to scan the 37 power grid technology and infrastructure stocks Shoals Technologies Group now trades below both analyst targets and an estimated intrinsic value, even after the latest rebound. Is that a sign the market is too cautious on the story, or is the discount warranted by the risks? The most followed narrative values Shoals Technologies Group at $11.05 a share, compared with the last close at $8.93. That gap rests on a specific view of future earnings power, margins and the price investors might pay for those earnings. Read the complete narrative. Want to see what underpins that valuation gap for Shoals Technologies Group? Forecast double digit top line growth, rising margins and a future earnings multiple all sit at the core of this narrative. The mix of higher storage exposure, international orders and backlog conversion assumptions may surprise you. Result: Fair Value of $11.05 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, Shoals Technologies Group still faces real pressure from margin compression and elevated legal and warranty costs, which could weigh on cash flow and dampen sentiment. Find out about the key risks to this Shoals Technologies Group narrative. While the SWS DCF model suggests Shoals Technologies Group is undervalued at $8.93 versus an estimated future cash flow value of $11.09, the earnings multiple tells a different story. The current P/E of 47.2x is richer than both peers at 40.9x and a fair ratio of 40.5x. That gap points to a higher bar for future execution. Which signal do you put more weight on? See what the numbers say about this price — find out in our valuation breakdown. Given the mix of optimism and concern around Shoals Technologies Group, it helps to review the data yourself and decide where you stand. To weigh both sides of the story in one place, start with the 3 key rewards and 2 important warning signs. If the Shoals Technologies Group story has sharpened your thinking, do not stop there. Use the Simply Wall Street Screener to uncover other stocks that fit your goals. Target potential mispricing by scanning 52 high quality undervalued stocks that combine quality fundamentals with prices that may not fully reflect their underlying business strength. Build a steadier portfolio by reviewing 83 resilient stocks with low risk scores that score well on resilience and aim to keep surprises to a minimum. Spot early opportunities by checking the screener containing 21 high quality undiscovered gems that meet strict fundamental filters yet still sit off most investors' radar. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include SHLS. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Interested in Shoals Technologies Group, Inc.? Here are five stocks we like better. Strong growth and record demand: Q2 2026 revenue rose 47% year over year to $163.4 million, supported by utility-scale solar and BESS demand. New orders totaled approximately $207 million, lifting backlog and awarded orders to a record $801 million. Profitability improved despite lower GAAP net income: Adjusted EBITDA increased 27.9% to $31.6 million, while adjusted net income rose 15% to $19.7 million. Shoals expects margin gains from product mix, productivity improvements and factory consolidation, with inventory investments expected to support second-half cash generation. 2026 outlook reaffirmed: Management maintained full-year revenue guidance of $600 million to $640 million and adjusted EBITDA guidance of $118 million to $132 million. The company also highlighted future growth opportunities in long-duration storage through its TerraFlow partnership and in data-center power delivery through its AirLink product. Got Solar? How You Can Play The Industry's Value Chain Perfectly Shoals Technologies Group (NASDAQ:SHLS) reported second-quarter 2026 revenue of $163.4 million, up 47% from the prior-year period, as demand from its U.S. utility-scale solar customers and battery energy storage system, or BESS, business supported growth. The company said results were within its previously guided range and reaffirmed its full-year outlook. CEO Brandon Moss said the company added approximately $207 million in new orders during the quarter, producing a book-to-bill ratio of 1.3. Backlog and awarded orders, which Shoals refers to as BLAO, reached a company record of $801 million, up 19% year over year. Of that total, approximately $699.7 million has planned delivery dates over the next four quarters through the second quarter of 2027. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control Generac Powers Up as Summer Temperatures Rise “The U.S. market continues to be robust,” Moss said, adding that the company is focused on improving productivity as it expands capacity at its new facility in Portland, Tennessee. Gross profit increased 20% year over year to $49.5 million. GAAP gross margin was 30.3%, while adjusted gross margin was 30.6%. Shoals said it expects further margin improvement from favorable product mix, productivity gains and efficiencies from its factory consolidation. → Financials Hit Record Highs as the AI Trade Unravels—Can They Keep Leading? MarketBeat Week in Review – 5/8 - 5/12 Selling, general and administrative expense was $28.5 million, or 17% of revenue, compared with 21% of revenue in the prior-year quarter. CFO Dominic Bardos said the year-over-year increase in SG&A dollars was largely driven by payroll and employee expenses associated with higher headcount and variable compensation. Legal expenses declined slightly from the prior year as certain litigation matters concluded. Operating income rose 17% to $18.7 million, representing 11.5% of revenue. GAAP net income was $12.1 million, compared with $13.9 million a year earlier; the prior-year period included a $3.1 million gain from the sale of a manufacturing facility. Adjusted net income increased 15% to $19.7 million, while adjusted EBITDA rose 27.9% to $31.6 million. Adjusted diluted earnings per share was $0.12, up $0.02 from the prior-year period. → Why Rare Earth Processing Could Be the Real 2027 Opportunity Shoals generated $6.8 million in operating cash flow during the quarter, aided by increases in deferred revenue and accrued liabilities. It ended the period with $15.7 million in cash and equivalents and net debt of $181.1 million, or 1.6 times adjusted EBITDA. The company also temporarily expanded its revolving credit facility by $50 million. Bardos said Shoals invested heavily in inventory during the first half to support its record order book and secure materials ahead of cost increases. The company expects those inventory investments to contribute to cash generation in the second half, with cash flow available to reduce borrowings under its revolver. The company generated approximately $20 million in BESS revenue during the second quarter and secured about $10 million in additional BESS orders. BESS BLAO stood at $65 million at quarter-end. Moss said BESS orders are expected to remain episodic because they depend on customers’ construction schedules. Shoals also announced an agreement with TerraFlow, a developer of long-duration energy storage infrastructure. Under a memorandum of understanding, Shoals plans to support TerraFlow’s utility-scale and data-center energy storage portfolio with its PowerHub Recombiner solution. The MOU is intended to support future TerraFlow deployment plans of up to 5 gigawatts annually. Moss said Shoals has begun engineering work with TerraFlow and expects revenue from the partnership to begin in 2027, with no expected effect on 2026 results. He said TerraFlow’s approach uses vanadium technology and is intended to support both short- and long-duration battery applications. International BLAO reached $102 million, with the company citing increased quote activity and customer engagement in markets including Australia. Moss said international project margins can vary based on geography, product mix and whether products are manufactured domestically and exported or produced for more local market opportunities. Shoals completed its move into its new facility during the quarter and said it is continuing to implement lean manufacturing processes. Management said the consolidation of three facilities into one larger site is complex but should provide greater fixed-cost leverage as production volumes increase. Bardos said a remaining redundant facility is expected to be exited in mid-2027. Management said product mix is expected to be more favorable in the second half as traditional BLA products account for a higher share of production relative to Long Tail BLA products. The company expects gross margins to improve sequentially overall, though it noted fourth-quarter production days and the timing of BESS deliveries could affect quarterly results. Shoals also highlighted its AirLink product for data-center power delivery. Moss said the company expects to have the product installed and operational for testing in 2026, with internal and third-party testing underway. He said the product is expected to carry a premium price relative to other market options, though pricing has not been finalized. On litigation, Moss said Shoals prevailed in its 2025 International Trade Commission case against Voltage. The company expects its district court case concerning damages against Voltage to conclude in the third quarter. Management said legal costs related to that trial would weigh on third-quarter EBITDA but should no longer affect fourth-quarter results after the case is completed. For the third quarter, Shoals expects revenue of $150 million to $170 million and adjusted EBITDA of $32 million to $37 million. At the midpoint, the outlook represents 18% year-over-year revenue growth and 8% adjusted EBITDA growth. For full-year 2026, the company reaffirmed projected revenue of $600 million to $640 million and adjusted EBITDA of $118 million to $132 million. Shoals continues to expect operating cash flow of $65 million to $85 million, capital expenditures of $20 million to $30 million and interest expense of $8 million to $12 million. Management said it sees continued demand across utility-scale solar, BESS and data-center-related opportunities, while monitoring policy developments including tariffs and inverter-related changes. Moss said the company does not currently expect those developments to have a near-term effect on demand. Shoals Technologies Group, Inc is a leading provider of electrical balance-of-system (BOS) solutions for the solar energy industry. The company designs, engineers and manufactures a comprehensive portfolio of products, including junction boxes, combiner boxes, cable assemblies, power distribution units and monitoring systems. These components are critical to interconnecting photovoltaic modules, optimizing energy output and ensuring safe, reliable performance across solar installations. Founded in 1996 and headquartered in Portland, Tennessee, Shoals has grown its manufacturing and operations footprint to serve customers around the globe. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Shoals Technologies Group Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Revenue growth of 47% was primarily driven by robust demand within the core U.S. utility-scale solar market and meaningful contributions from the Battery Energy Storage System (BESS) segment. Management attributed the record $801 million backlog to strong commercial execution and a favorable demand environment, with quote volumes exceeding $1 billion in unique projects during the quarter. The company is undergoing a strategic factory consolidation, moving three facilities into one 'Mega' facility in Tennessee to drive long-term productivity and fixed-cost leverage. Operational performance is being optimized through the deployment of new lean manufacturing processes, though management noted that consistent weekly improvements are still a work in progress. Strategic diversification is accelerating through the expansion into the data center and energy storage markets, aimed at creating a more resilient business model with less reliance on solar cycles. The successful outcome of the ITC case against Voltage was highlighted as a critical defense of the company's intellectual property and competitive positioning in the U.S. market. Full-year 2026 guidance assumes 30% top-line growth at the midpoint, supported by the $700 million in backlog scheduled for shipment through Q2 2027. Management expects sequential gross margin expansion throughout the remainder of the year, driven by a more favorable product mix and increased efficiency at the new manufacturing facility. The partnership with TerraFlow is expected to begin contributing to revenue in 2027, supporting up to 5 gigawatts of annual energy storage deployments. The AirLink product is on track for live test installations in 2026, with management anticipating a price premium due to the value delivered to data center owners and installers. Cash flow from operations is projected to significantly improve in the second half of 2026 as the company burns down inventory levels built up to support the record backlog. Legal expenses related to the Voltage district court case are expected to impact Q3 EBITDA, as these costs are fully recognized and not added back to adjusted metrics. The company temporarily expanded its revolving credit facility by $50 million to provide liquidity for inventory investments and operational growth. Management noted that the booking cycle has lengthened slightly, with some backlog now extending into Q1 2027, compared to the historical six-month conversion window. One redundant manufacturing facility is scheduled to be exited in mid-2027, which is expected to further optimize the company's cost structure. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. The partnership focuses on engineered solutions for renewable sites and data centers using long-duration energy storage. Meaningful revenue impact is not expected until 2027 as the engineering cycle is currently in the early stages. Management reported a healthy pricing environment responding to strong demand, though the long sales cycle means current pricing won't impact results for approximately 12 months. Margins are expected to improve throughout the year due to product mix and factory efficiencies, which are already factored into the reaffirmed guidance. Management does not anticipate near-term impacts from Section 232 or other trade policy changes on the underlying demand environment. The company believes its domestic manufacturing investments and diversified product portfolio provide a competitive advantage in a shifting regulatory landscape. AirLink is viewed as a market disruptor for power delivery to data center racks, requiring an educational period for engineers and inspectors. The product is expected to command accretive margins relative to the total business due to its highly engineered nature and labor-saving value proposition.

Shoals Technologies Group (SHLS) came out with quarterly earnings of $0.12 per share, beating the Zacks Consensus Estimate of $0.1 per share. This compares to earnings of $0.1 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +20.00%. A quarter ago, it was expected that this solar energy equipment supplier would post earnings of $0.06 per share when it actually produced earnings of $0.07, delivering a surprise of +16.67%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. Shoals Technologies, which belongs to the Zacks Solar industry, posted revenues of $163.37 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 3.44%. This compares to year-ago revenues of $110.84 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Shoals Technologies shares have added about 10.2% since the beginning of the year versus the S&P 500's gain of 11%. While Shoals Technologies has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Shoals Technologies was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.12 on $158.02 million in revenues for the coming quarter and $0.40 on $622.39 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Solar is currently in the top 27% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Sunrun (RUN), has yet to report results for the quarter ended June 2026. The results are expected to be released on August 5. This solar energy products distributor is expected to post quarterly earnings of $0.08 per share in its upcoming report, which represents a year-over-year change of -92.5%. The consensus EPS estimate for the quarter has been revised 12.2% higher over the last 30 days to the current level. Sunrun's revenues are expected to be $722.86 million, up 27% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Shoals Technologies Group, Inc. (SHLS) : Free Stock Analysis Report Sunrun Inc. (RUN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

– Quarterly Revenue of $163.4 million – – Income from Operations of $18.7 million – – Net Income of $12.1 million – – Adjusted EBITDA1 of $31.6 million – – Backlog and Awarded Orders of $801.4 million – – Provides Third Quarter and Reaffirms Full-year Outlook – PORTLAND, Tenn., Aug. 04, 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 second quarter ended June 30, 2026. “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,” said 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,” said Mr. Moss. ________________________ 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. Second Quarter 2026 Financial ResultsRevenue increased 47.4%, to $163.4 million, compared to $110.8 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 $49.5 million, compared to $41.2 million in the prior-year period. Gross profit as a percentage of revenue was 30.3% compared to 37.2% in the prior-year period. Gross profit as a percentage of revenue declined year over year primarily due to operational inefficiencies associated with the ramp-up and transition into the new manufacturing facility and product mix within the quarter, along with costs incurred to address product quality matters, including rework and corrective actions, as well as material-related inefficiencies and incremental lease accounting amortization. General and administrative expenses were $28.5 million, compared to $23.1 million during the same period in the prior year. The increase in general and administrative expenses was the 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. Income from operations was $18.7 million, compared to $16.0 million during the prior-year period. Net income was $12.1 million compared to $13.9 million during the prior-year period. Earnings per share was $0.07 in the current period and $0.08 in the prior-year period. Adjusted EBITDA1 was $31.6 million, compared to $24.7 million in the prior-year period. Adjusted Net Income1 was $19.7 million compared to $17.1 million during the prior-year period. Adjusted Diluted Earnings Per Share1 was $0.12 compared to $0.10 in the prior-year period. Backlog and Awarded OrdersThe Company’s backlog and awarded orders as of June 30, 2026, were $801.4 million, representing a 19.4% increase compared to the prior-year period and a 5.7% sequential increase from March 31, 2026. 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 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. Third Quarter 2026 OutlookAt this time, the Company is providing an outlook for the third quarter. Based on current business conditions, business trends and other factors, for the quarter ending September 30, 2026, the Company expects: Revenue in the range of $150 million to $170 million; and Adjusted EBITDA1 in the range of $32 million to $37 million. Full Year 2026 OutlookBased on current business conditions, business trends and other factors, for the full year 2026, the Company continues to expect: 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; and 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 InformationCompany management will host a webcast and conference call on August 4, 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; 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, 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 Tennessee, and any damage or disruption at these facilities may harm our business; we may face difficulties integrating and optimizing our consolidated Tennessee-based manufacturing and distribution operations, and may not fully realize the anticipated 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, which could negatively affect our results of operations and market share; 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 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 and negatively impact revenue, results of operations and cash flow; 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, financial condition, results of operations and prospects; 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 income 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. Reconciliation of Gross Profit to Adjusted Gross Profit and Adjusted Gross Profit Percentage (in thousands): Reconciliation of Net Income to Adjusted EBITDA (in thousands): Reconciliation of Net Income to Adjusted Net Income (in thousands): (a) For the three and six months ended June 30, 2026, represents $2.9 million and $6.6 million, respectively, of expenses incurred in connection with the lawsuit initiated by the Company against the supplier of the defective wire. For the three and six months ended June 30, 2025, represents $2.5 million and $5.1 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 and six months ended June 30, 2026, represents $0.5 million and $1.1 million 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 and six months ended June 30, 2026, represents $0.5 million and $2.1 million of expenses incurred in connection with the Company’s defense of certain derivative and class action litigation and for the three months and six months ended June 30, 2026, represents zero and $5.3 million, respectively, in settlement expenses associated with this litigation. For the three and six months ended June 30, 2025, represents $0.2 million and $0.9 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. Calculation of Adjusted Diluted Earnings per Share (in thousands, except per share amounts):

This article first appeared on GuruFocus. Revenue: $163.4 million, up 47% year-over-year. Adjusted Gross Profit Percentage: 30.6%, within expected range. GAAP Gross Profit: $49.5 million, up 20% from $41.2 million in the prior year period. SG&A Expenses: $28.5 million, representing 17% of revenue, a 400 basis point improvement year-over-year. Operating Profit: $18.7 million, or 11.5% of revenue, up 17% year-over-year. GAAP Net Income: $12.1 million, compared to $13.9 million in the prior year period. Adjusted Net Income: $19.7 million, up 15% year-over-year. Adjusted EBITDA: $31.6 million, up 27.9% year-over-year. Adjusted Diluted EPS: $0.12, up $0.02 year-over-year. Cash Flow from Operations: $6.8 million generated in the second quarter. Cash and Equivalents: $15.7 million at quarter end. Net Debt: $181.1 million, with net debt to adjusted EBITDA of 1.6 times. Backlog and Awarded Orders (BLAO): Record $801.4 million, up 19% year-over-year. New Orders: Approximately $207 million added in the quarter, resulting in a book-to-bill of 1.3. OEM Business Revenue: Grew 51% year-over-year. BESS Revenue: Approximately $20 million produced in the quarter, with approximately $10 million in additional orders secured. International BLAO: $102 million. Warning! GuruFocus has detected 7 Warning Signs with SHLS. Is SHLS fairly valued? Test your thesis with our free DCF calculator. Release Date: August 04, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Shoals Technologies Group Inc (NASDAQ:SHLS) delivered strong second-quarter revenue of $163 million, up 47% year-over-year, and within its guided range. The company achieved a record backlog and awarded orders (BLAO) of $801 million, up 19% year-over-year, with a solid book-to-bill ratio of 1.3. Shoals Technologies Group Inc (NASDAQ:SHLS) secured a favorable outcome in its 2025 ITC case against Voltage, a critical win for its intellectual property and competitive position. The company is expanding into new markets, including a partnership with Teraflow for long-duration energy storage, supporting up to 5 gigawatts annually, and growing its international BLAO to $102 million. Shoals Technologies Group Inc (NASDAQ:SHLS) is making progress on margin improvement, with adjusted gross profit at 30.6% and expectations for continued expansion driven by product mix and new factory efficiencies. The company's OEM business grew 51% year-over-year, providing a stable and visible revenue stream, and its BESS segment produced $20 million in revenue with $10 million in new orders. Shoals Technologies Group Inc (NASDAQ:SHLS) faces ongoing operational challenges from consolidating three facilities into one, with management noting there is still work to do on lean manufacturing processes. The company's net debt increased to $181.1 million, with leverage at 1.6 times adjusted EBITDA, and cash flow from operations was modest at $6.8 million in the quarter. Legal expenses related to the district court case against Voltage are expected to create a drag on third-quarter EBITDA, with the case not expected to conclude until late in the quarter. Shoals Technologies Group Inc (NASDAQ:SHLS) reaffirmed its full-year guidance without raising it, despite strong demand, citing a lengthening booking cycle and the need to maximize efficiency at its new facility. The company's BESS orders remain episodic and dependent on customer construction schedules, creating potential revenue volatility, with no significant impact expected from the Teraflow partnership until 2027. Fourth-quarter revenue is expected to decline sequentially from the third quarter due to fewer production days and potential product mix shifts, which could impact margin expansion. Q: Can you provide more color on the Terraflow MOU and the expected timeline for first meaningful volume from the 5 gigawatts of annual storage deployments?A: Brandon Moss (CEO): We are very excited about the Terraflow MOU and are starting the engineering cycle to develop an engineered solution. We model revenue beginning in 2027, with no impact in 2026. Terraflow uses a different approach with vanadium to create both short and long cycle duration battery solutions for renewable sites and data centers. This partnership is a meaningful step to diversify our customer base. Q: Given the strong demand environment and record backlog, what are the puts and takes regarding the decision to reaffirm rather than raise full-year guidance?A: Brandon Moss (CEO): We raised full-year guidance on the Q1 call and our goal is to provide guidance that is reasonable and achievable. We have 30% growth factored into the midpoint of our top-line guidance for 2026. We are focused on execution through the back end of the year, maximizing production at our new mega facility. We booked a handful of BESS projects after quarter close, and if we execute well, it will give us more confidence in how the full year plays out. Q: How should we think about the margin inflection, specifically the impact of product mix versus new facility efficiencies?A: Dominic Bardos (CFO): We received some IEPA refunds in Q2, though not all hit the income statement due to inventory still subject to the tax. Product mix is important; the first half had more long-tail BLA compared to the back half, so a favorable mix will help. The efficiencies of the new factory are also important as we consolidate three facilities into one, and we have the opportunity to gain more fixed cost leverage as we push more product through. Q: The EBITDA guide for Q3 implies a step-up in gross margin, but the Q4 top-line midpoint is down from Q3. Should we expect gross margins to be negatively impacted by less fixed cost absorption?A: Dominic Bardos (CFO): There is an implied slight reduction in Q4 due to fewer production days and the timing of BESS deliveries. However, if we secure more short-term orders, we could see improvement. On the EBITDA side, the district court case in Q3 will be a drag because that expense is fully recognized and not added back, but that will go away in Q4. Q: Can you update us on the cash flow situation, litigation expenses, and the district court case for damages against Voltage?A: Dominic Bardos (CFO): In the first half, we invested heavily in inventory to secure materials ahead of cost increases, which will provide positive cash flows in the back half as we burn it down. We expect to turn significant cash in the back half to pay down the revolver. At 1.6 times net debt to EBITDA, we have a fine leverage ratio and expect it to improve. The district court case is expected to be completed in Q3. Q: How do you think about the wire clips business given the recent acquisition by a peer, and is there opportunity there?A: Brandon Moss (CEO): Shoals partners with multiple tracker and wire management solutions and remains agnostic. We work with customers to design solutions that best fit their project. Our wire management business is a very small piece of what we offer and is not a major growth focus compared to areas like data center, battery energy storage, and our Airlink product. Q: How should we think about the margin profile of the international business compared to the U.S.?A: Brandon Moss (CEO): It depends on the market and whether we produce the product domestically for export. About two-thirds of the roughly $100 million international backlog consists of export projects that will look similar to traditional U.S.-based BLA projects. Organic opportunities in markets like Australia may not have pricing as strong as export markets, so it varies project to project. Q: How has customer reception been for the Airlink product, and how do you expect ASPs to compare to traditional busway solutions?A: Brandon Moss (CEO): Customer reception has been significant, though there will be an educational period for engineers, installers, and inspectors. We are on track to have a product installed live from a test perspective in 2026, with IP filed and third-party lab testing underway. Given the substantial value the product delivers, we expect a price premium over other available options. Q: Can you rank your product portfolio from a margin perspective, and could Airlink drive an uplift in consolidated gross margins in 2028?A: Brandon Moss (CEO): Your ranking is directionally correct, though I might flip the BESS and solar products. New products like Airlink and BESS are highly engineered and expected to command accretive margins relative to the total business. Our goal is to always generate positive mix profiles with new product introductions. Q: What is your participation in the OnEnergy Crusoe announcement, and are you seeing an impact on backlog or revenue?A: Brandon Moss (CEO): We remain excited about our partnership with OnEnergy, which generated the $20 million in Q2 revenue. Those products are being installed at the largest battery-paired AI data center site in the country. We can't discuss specific projects, but we have great visibility into their pipeline, and as their business grows, Shoals will be a big part of that solution. We booked a handful of projects after quarter close, some of which may be with that customer. For the complete transcript of the earnings call, please refer to the full earnings call transcript.