Q2 2026 Shoals Technologies Group Inc Earnings Call Transcript
Key Points
- Shoals Technologies Group Inc (SHLS) delivered strong second-quarter revenue of $163 million, up 47% year-over-year, and within its guided range.
- The company achieved a record backlog and awarded orders (BLAO) of $801 million, up 19% year-over-year, with a solid book-to-bill ratio of 1.3.
- Shoals Technologies Group Inc (SHLS) secured a favorable outcome in its 2025 ITC case against Voltage, a critical win for its intellectual property and competitive position.
- The company is expanding into new markets, including a partnership with Teraflow for long-duration energy storage, supporting up to 5 gigawatts annually, and growing its international BLAO to $102 million.
- Shoals Technologies Group Inc (SHLS) is making progress on margin improvement, with adjusted gross profit at 30.6% and expectations for continued expansion driven by product mix and new factory efficiencies.
- The company's OEM business grew 51% year-over-year, providing a stable and visible revenue stream, and its BESS segment produced $20 million in revenue with $10 million in new orders.
- Shoals Technologies Group Inc (SHLS) faces ongoing operational challenges from consolidating three facilities into one, with management noting there is still work to do on lean manufacturing processes.
- The company's net debt increased to $181.1 million, with leverage at 1.6 times adjusted EBITDA, and cash flow from operations was modest at $6.8 million in the quarter.
- Legal expenses related to the district court case against Voltage are expected to create a drag on third-quarter EBITDA, with the case not expected to conclude until late in the quarter.
- Shoals Technologies Group Inc (SHLS) reaffirmed its full-year guidance without raising it, despite strong demand, citing a lengthening booking cycle and the need to maximize efficiency at its new facility.
- The company's BESS orders remain episodic and dependent on customer construction schedules, creating potential revenue volatility, with no significant impact expected from the Teraflow partnership until 2027.
- Fourth-quarter revenue is expected to decline sequentially from the third quarter due to fewer production days and potential product mix shifts, which could impact margin expansion.
Good morning and welcome to the Scholz Technologies Group Second Quarter 2026 Earnings Conference Call.
Today's call is being recorded, and we have allocated one hour for prepared remarks and Q&A.
At this time, I would like to turn the conference over to Matt Trachtenberg, Vice President of Finance and Investor Relations for Scholz Technologies Group.
Thank you. You may begin.
Thank you, Warren, and thank you everyone for joining us today. Hosting the call with me is our CEO, Brandon Moss and our CFO, Dominic Bartos.
On this call, management will be making projections or other forward-looking statements based on current expectations and assumptions, which are subject to risks and uncertainties and should not be considered guarantees of performance or results.
Actual results could differ materially. Those risks and uncertainties are listed for investors in our most recent SEC filings.
Today's
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