Shoals has reported strong YoY revenue growth, supported by utility-scale solar demand and rising project activity
The company’s BESS business contributed new revenue and orders; it sees AI data centers emerging as a long-term opportunity
Its margins faced temporary pressure from tariffs, freight costs, and factory consolidation activities, but the company maintained a positive full-year outlook
Shoals Technologies Group beat its Q1 2026 revenue guidance, reporting a 74.9% year-on-year (YoY) increase to $140.6 million, supported by higher project volumes, strong demand for its products, and continued strength in the utility-scale solar market.
The company also attributes the revenue increase during the quarter to the impact of its market share capture initiatives. Gross profit for the period at $41 million improved over $28.1 million in Q1 2025 (see Strong Start For Shoals In 2025, Despite Lower Profits).
The electrical balance of systems (EBOS) company Shoals said its battery energy storage systems (BESS) business had a strong start during the reporting quarter, generating about $1 million in revenue and adding $9 million in new orders. The company said demand came from AI data centers, grid firming projects, and solar-plus-storage applications, with most bookings coming from the latter 2 segments. Shoals expects the AI data center market to become the main long-term growth driver for its BESS business.
Adjusted EBITDA for the period was $21.1 million compared to $13.5 million in Q1 2025. However, it reported a net loss of $297,000 for the period, driven by a class action settlement, which widened slightly from $282,000 in the prior-year period.
Q1 margins were affected by tariffs, freight costs, and operational factors tied to the company’s new facility transition. It faced more disruption than expected while consolidating operations from 3 older sites into a new factory. During the quarter, Shoals relocated more than 250 pieces of equipment over a 60-day period, which temporarily affected operations.
The company recently opened its 638,000 sq. ft. manufacturing facility in Portland, Tennessee, consolidating its 3 existing Tennessee facilities into a single centralized location and expanding its production capacity to meet increasing demand.
The company management expects some pressure to continue in Q2 but said many costs are temporary or now reflected in pricing, while maintaining a positive full-year outlook.
As of March 31, 2026, the company’s backlog and awarded orders (BLAO) totaled $758 million, representing a 17.5% YoY and 1.4% sequential increase, comprising $100 million from international markets. It attributes this growth to consistent demand for its products and growth in international and emerging battery energy storage markets.
“The underlying demand environment remains extremely strong as evidenced by our record backlog and awarded orders of $758 million. We are executing our strategic plan of accelerating growth within our core domestic utility scale solar market and expanding our offering into attractive high growth markets,” said Shoals CEO Brandon Moss.
For FY2026, Shoals has revised its projections upward, now expecting annual revenues of $600 million to $640 million, with 30% YoY growth at the midpoint. Adjusted EBITDA is expected to range from $118 million to $132 million, with 28% YoY growth at the midpoint. This is a change from the previous revenue forecast of $125 million to $135 million, and adjusted EBITDA forecast of $110 million to $130 million (see Shoals Technologies Posts 19% YoY Revenue Growth In FY2025).
Speaking to analysts, Moss said the company expects about 1/5th of its 2026 revenue to come from new products, including BESS.
For Q2 2026, Shoals forecasts revenue of $150 million to $170 million, with 44% YoY growth at the midpoint, and adjusted EBITDA of $28 million to $33 million, with 25% YoY growth at the midpoint.
