Shoals has reported Q2 2026 revenue of $163.4 million, representing an increase of 47.4% YoY
Gross margin declined to 30.3%, and net income fell to $12.1 million due to costs associated with ramping up its new manufacturing facility
Shoals maintained its FY2026 guidance and announced a strategic MoU with TerraFlow Energy to support deployment of up to 5 GW annually of long-duration energy storage projects
The electrical balance of systems (EBOS) company Shoals Technologies Group has reported higher Q2 2026 revenue along with ‘record’ backlog and awarded orders, while its transition into the new manufacturing facility lowered the gross margins. The company has reaffirmed its full-year 2026 guidance.
The company posted Q2 2026 revenue of $163.4 million, up 47.4% year-on-year (YoY), while adjusted EBITDA increased to $31.6 million from $24.7 million a year earlier. It also reported net income of $12.1 million, down from last year’s $13.9 million. In Q1 2026, it suffered a net loss of $297,000 (see Shoals Technologies Raises 2026 Outlook After Q1 Growth).
Gross profit for the company increased to $49.5 million (Q2 2025: $41.2 million), although gross margin declined to 30.3% from 37.2% a year earlier. The company attributed the lower margin to inefficiencies related to the ramp-up of its new manufacturing facility, product mix, product quality-related costs, material inefficiencies, and incremental lease accounting amortization.
Backlog and awarded orders reached a record $801.4 million, up 19.4% from the prior-year period’s $671.3 million, reflecting ‘consistent demand’ and growth in battery energy storage markets (see Shoals Technologies Exceeds Revenue Guidance In Q2 2025).
Shoals CEO Brandon Moss said the company delivered revenue and adjusted EBITDA within its expected range, adding that its record backlog and awarded orders are evidence of the market’s resilience.
He also said the company had completed the move into its new manufacturing facility and was making progress on improving productivity.
“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," Moss said.
Separately, the company announced it had signed a strategic memorandum of understanding (MoU) with TerraFlow Energy to support the deployment of up to 5 GW annually of long-duration energy storage projects. Under the agreement, Shoals will provide power distribution solutions for TerraFlow's utility-scale and data center applications, combining its PowerHub platform with TerraFlow's vanadium flow battery technology. The companies also plan to explore showcasing Shoals' AirLink data center power distribution solution at TerraFlow demonstration facilities.
In a note following Shoals’ Q2 results, Roth Capital Partners described the quarter as healthy. The firm said commercial momentum remained strong, driven by record backlog and awarded orders. Analysts expect its margins to improve in H2 2026 and through 2027 as manufacturing operations normalize and higher-margin battery energy storage projects contribute more meaningfully.
Philip Shen, Managing Director and Sr. Research Analyst at Roth, sees potential for the TerraFlow MOU to help Shoals capture close to the full 5 GW opportunity near-term. “This could potentially deepen SHLS's datacenter and storage work through 2027 and beyond,” added Shen.
Looking ahead, Shoals expects Q3 2026 revenue of $150 million to $170 million and adjusted EBITDA of $32 million to $37 million. It also reaffirmed its full-year 2026 outlook, maintaining revenue guidance of $600 million to $640 million and adjusted EBITDA guidance of $118 million to $132 million.
