10-Q · May 5, 2026
Shoals Technologies Group reported Q1 2026 revenue of $140.6 million, a significant increase of 74.9% compared to $80.4 million for Q1 2025. Despite strong revenue growth, the company posted a net loss of $0.3 million…
Earnings analysis · 10-Q
SHLS earnings analysis
Filed August 4, 2026 · Our reading of the company's report
The latest report
Shoals delivered strong Q2 top-line growth, with revenue of $163.4 million up 47.4% year over year and 15.9% sequentially, aided by demand, market-share gains, and project volumes. Profitability was mixed: operating…
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Shoals delivered strong Q2 top-line growth, with revenue of $163.4 million up 47.4% year over year and 15.9% sequentially, aided by demand, market-share gains, and project volumes. Profitability was mixed: operating margin recovered sequentially to 11.5%, but gross margin fell 6.9 points year over year to 30.3% and GAAP EPS of $0.07 missed the $0.10 estimate. Liquidity is supported by $15.7 million of cash and $51.4 million of revolver availability, but negative $49.3 million six-month free cash flow, a $97.1 million inventory build, and $196.8 million of debt are key watch items.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.07
What stood out
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Revenue accelerated to $163.4M
Q2 revenue rose $52.5 million, or 47.4% year over year, to $163.4 million and increased $22.4 million, or 15.9%, from Q1 2026 revenue of $141.0 million. Management attributed growth to demand, market-share capture initiatives, and higher project volumes.
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Operating margin recovered sequentially
Operating income increased 17.0% year over year to $18.7 million. Operating margin was 11.5%, improving from 5.5% in Q1 2026, although remaining below 14.4% in Q2 2025.
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Order book expanded to $801.4M
Backlog and awarded orders reached $801.4 million at June 30, including $425.1 million of contracted backlog and $376.3 million of awarded orders. The total was up 19.4% year over year and 5.7% from March 31, 2026.
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Adjusted profitability increased
Adjusted EBITDA increased to $31.6 million from $24.7 million a year earlier, while adjusted diluted EPS increased to $0.12 from $0.10. GAAP net income, however, declined to $12.1 million from $13.9 million.
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Cash balance increased
Cash and equivalents increased to $15.7 million at June 30, 2026 from $7.3 million at December 31, 2025, supported by $60.0 million of revolver borrowings.
What to watch
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Gross margin remains sharply below prior year
Gross margin contracted 6.9 percentage points year over year to 30.3% from 37.2%, despite a 1.1-point sequential improvement from 29.2% in Q1 2026. Management cited new-facility ramp inefficiencies, product mix, product-quality rework/corrective actions, material inefficiencies, and lease amortization.
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Inventory build drove cash burn
Six-month operating cash flow swung to an outflow of $34.6 million from an inflow of $1.7 million a year earlier; adding $14.7 million of capex implies free cash flow of negative $49.3 million. The primary working-capital use was a $97.1 million inventory increase.
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Higher revolver use increased interest burden
Outstanding borrowings rose $60.0 million from year-end to $196.8 million, leaving $51.4 million available under the $250.0 million revolving facility. Q2 interest expense increased 55.4% year over year to $3.5 million.
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GAAP earnings lagged revenue growth
GAAP diluted EPS of $0.07 was below the $0.10 consensus estimate and below $0.08 in Q2 2025. Net income declined 12.4% year over year to $12.1 million despite the 47.4% revenue increase.
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Litigation remains a material expense
For the six months, the company recorded $5.3 million of litigation settlement expense net of recoveries, plus $6.6 million of wire-insulation shrinkback litigation expense. Legal expenses also contributed $5.5 million to the year-over-year increase in six-month G&A expense.
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Policy and tariff uncertainty remains elevated
Item 1A did not identify new or revised formal risk factors versus the 2025 Form 10-K. MD&A nevertheless flags tariff uncertainty after the February 20, 2026 Supreme Court ruling and notes solar ITC/PTC changes for projects placed in service after 2027, which could affect costs, project timing, and demand.
Management's outlook
The 10-Q does not provide explicit numeric revenue or EPS guidance. MD&A says sourcing and logistics pressures are expected to persist through 2026; the company’s separate earnings release provided the quantitative outlook.
Earlier filings 4
10-K · February 24, 2026
Shoals positions itself as a specialist EBOS (electrical balance of system) provider for utility-scale solar, BESS and emerging data center power systems, highlighting patented system solutions (e.g., its Big Lead…
10-Q · November 4, 2025
Shoals Technologies Group, Inc. reported Q3 2025 results with revenue of $135.8 million, exceeding expectations and up 33% year-over-year. EPS matched consensus at $0.12, with gross margin steady at 37%. While the…
10-Q · August 5, 2025
Shoals reported Q2 revenue of $110,841,000 (up $11,592,000 or ~11.7% YoY) and diluted EPS of $0.08 (vs. $0.07 YoY). Gross margin was 37.2% and operating margin was 14.4%, both down versus Q2 2024. Liquidity and warranty…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.