Shoals Technologies Group (SHLS) Q4 2025 earnings summary

Executive summary

• Q4 2025 revenue reached $148.3 million, up 38.6% year-over-year, with a record backlog and awarded orders of $747.6 million, supporting strong growth into 2026.

• Full-year 2025 revenue grew 19%, with notable expansion in U.S. utility-scale solar, international, CC&I, and OEM segments; international revenue rose from less than $1 million in 2024 to $13 million in 2025.

• Adjusted EBITDA for Q4 was $30.3 million (20.4% margin), up 14.7% year-over-year, with net income of $8.1 million.

• Strategic initiatives included new product launches, customer diversification, operational improvements, and a move to a consolidated manufacturing facility.

• Legal actions and remediation efforts, including wire insulation shrinkback, were completed or progressed, funded by internal cash flow.

Financial highlights

• Q4 gross profit was $46.9 million (31.6% margin), up 16.7% year-over-year, but margin declined from 37.6% due to higher costs.

• Adjusted net income for Q4 was $17.5 million, with adjusted diluted EPS of $0.10 (+22% YoY).

• Free cash flow in Q4 was negative $11.3 million, impacted by remediation and elevated CapEx; Q4 cash flow from operations was $17.1 million.

• Year-end cash was $7.3 million; net debt $129.4 million; net debt/adjusted EBITDA 1.3x; total liquidity $70.6 million.

• Full-year 2025 adjusted EBITDA was $99.5 million; adjusted net income $60.6 million; adjusted diluted EPS $0.36.

Outlook and guidance

• Q1 2026 revenue expected at $125–$135 million (+62% YoY at midpoint); adjusted EBITDA $16–$21 million.

• Full-year 2026 revenue guidance: $560–$600 million (+22% YoY at midpoint); adjusted EBITDA: $110–$130 million.

• 2026 cash flow from operations: $65–$85 million; CapEx: $20–$30 million; interest expense: $8–$12 million.

• Gross margin expected in low to mid-30% range for 2026, with improvement anticipated in 2027.

• Operating cash flow for 2026 expected to increase 340% at midpoint; CapEx to decline 24% at midpoint.