Shoals Technologies Group, a manufacturer of electrical infrastructure solutions for utility-scale solar, battery storage, and data center power systems, reported first quarter (Q1) 2026 revenue of $140.6 million, an increase of 74.9% year-over-year (YoY) from $80.4 million. Revenue exceeded analyst estimates by $11.41 million.

Chief Executive Officer Brandon Moss said revenue came in above guidance, with the company adding about $151 million in new orders during the quarter. Backlog and awarded orders reached a record $758 million, up 17.5% YoY. Backlog and awarded orders worth $627.6 million are scheduled for delivery over the next four quarters through Q1 2027.

The company recorded a net loss of $297,000, compared with $282,000 in the prior-year period. Chief Financial Officer Dominic Bardos said the loss reflected the net impact of a shareholder class action settlement of approximately $5 million. The company’s release reported litigation settlement expense, net of recoveries, of $5.3 million.

Gross profit margin declined to 29.2% from 35%, while adjusted gross profit margin was 29.6%. Moss said the decline was driven by product mix, tariffs, higher freight costs, and temporary labor inefficiencies stemming from employee training and the ramp-up of new production lines.

Bardos said that product mix, freight, and tariffs accounted for approximately 200 basis points of margin compression relative to expectations. Management expects margins to improve sequentially through the year as operational efficiencies increase.

Selling, general, and administrative expenses rose to $31 million from $21.7 million, primarily due to higher legal expenses. Bardos said the increase included $4.1 million related to ITC litigation, $1.2 million related to the Prysmian case, and less than $1 million related to shareholder litigation.

Earnings per share remained nil on both a basic and diluted basis, unchanged from Q1 2025 and below analyst expectations by $0.04.

Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased to $21.1 million from $13.5 million, representing 56% growth. Adjusted EBITDA margin declined to 15.0% from 16.8%, driven primarily by product mix, according to Bardos.

The company used $41.4 million in cash from operations during the quarter, primarily to support higher inventory levels to meet demand. Bardos said inventory was built to protect delivery timelines and is expected to decline in the second half of the year. Net debt increased to $179.9 million, driven by inventory growth across both the battery energy storage and core utility-scale solar businesses.

Shoals reported continued growth in its battery energy storage segment, with more than $1 million in revenue recognized in Q1 and $9 million in new bookings, bringing the total backlog and awarded orders to $75 million.

Moss said the company is seeing traction across data center, grid firming, and solar-plus-storage applications. He expects new products, including battery energy storage products, to contribute about one-fifth of total revenue in 2026.

Moss said demand remained strong, with quote volume exceeding $1 billion in the quarter and no material impact from tightening tax equity markets observed in the order book. International backlog and awarded orders totaled nearly $100 million, with strong pipeline activity in markets such as Australia.

The company raised its full-year 2026 outlook, expecting revenue of $600 million to $640 million and adjusted EBITDA of $118 million to $132 million. For the second quarter, Shoals expects revenue of $150 million to $170 million and adjusted EBITDA of $28 million to $33 million.

The company reported revenue of $475.3 million in 2025, up 19.1% from $399.2 million in 2024.