Shoals Revenue Surges 43.8% to $195.3 Million, Beating Third-Quarter Estimates
Key Facts
Shoals Technologies reported results for the third quarter ended September 30 on November 4, 2026, posting revenue of $195.3 million, up 43.8% year over year from $135.8 million. Revenue topped analysts’ estimate of $162.22 million, while adjusted earnings per share also beat expectations. The company said revenue growth was tied to strong demand for its products, market-share initiatives and higher project volume during the year. The results put rapid sales growth alongside pressure on gross margin, reflecting a divergence between revenue trends and some execution and cost indicators. The company’s shares, ticker SHLS, closed at $8.47 on November 3, before the results were announced.
Adjusted diluted earnings per share were $0.14 in the third quarter, compared with $0.13 in the same period of 2025, beating analysts’ estimate of $0.12. Net income rose to $17.9 million from $11.9 million a year earlier. Basic earnings per share were also $0.11, versus $0.07 in the third quarter of 2025. The figures show year-over-year earnings improvement alongside revenue growth, although the gain in adjusted earnings per share was narrower than the increase in sales. The improvement was not limited to net income; the company also posted an increase in adjusted EBITDA.
Adjusted EBITDA was $39.8 million, compared with $32.2 million in the third quarter of 2025. The chief executive said, "Productivity improvements drove quarterly revenue and adjusted EBITDA above the range we expected." The company linked improved productivity to quarterly results that exceeded its expected range, as revenue and adjusted operating profitability both rose. Gross margin, however, moved in the opposite direction, falling to 31.9% from 37.0% a year earlier. The divergence highlights that growth in business volume did not prevent mounting pressure from operating costs and sales mix during the period.
The company attributed the margin decline mainly to operational inefficiencies that accompanied higher production and the transition to its new manufacturing facility, as well as the product mix during the quarter. It also cited costs incurred to address product-quality issues. These factors separate the sources of sales growth from those that weighed on profitability for each dollar of revenue: demand, market-share gains and higher project volume supported revenue, while operational, product and quality challenges affected margin. In the second quarter of 2026, revenue was $163.4 million, up 47.4% year over year, and backlog and awarded orders totaled $801.4 million on June 30. The company had said at the time that it had completed the move to the new facility and was making progress in improving productivity.
Backlog and awarded orders totaled $791.7 million on September 30, 2026, up 9.8% year over year but down 1.2% from June 30. The company said the annual increase reflected continued demand and growth in emerging battery energy storage markets. The quarter-over-quarter comparison points to a modest decline in the order balance from the end of the second quarter, while it remained above its level a year earlier. In August, Shoals and ON.energy announced that manufacturing and deliveries were underway for a 1.1-gigawatt data center project. The company said that, when completed, the project would be the largest grid-connected battery facility in the United States.
On its outlook, Shoals said it expects revenue of between $165 million and $185 million in the fourth quarter of 2026. It raised its fiscal 2026 revenue forecast to a range of $665 million to $685 million. The annual outlook follows third-quarter revenue of $195.3 million, while the fourth-quarter range estimates the next period within the company’s stated guidance. The raised forecast came alongside backlog that increased year over year but declined sequentially, and margin pressure from the operational transition, product mix and quality costs. Investing.com reported that the stock rose 5.08% in premarket trading on November 4 after the results were announced.