Performance in 2025 was characterized by a return to growth, with revenue increasing 19% as the company successfully recovered from a challenging 2024.
Management is shifting its strategic focus from a narrow product set to a diversified portfolio, intentionally accepting lower gross margin percentages to capture a larger total addressable market.
The core U.S. utility-scale solar business saw accelerated momentum in the second half of 2025, growing 30% compared to the prior year, driven by strong preference for Shoals’ engineered solutions.
International expansion is yielding tangible results, with revenue growing from less than $1 million in 2024 to $13 million in 2025, supported by a record $90 million international order book.
The company is consolidating operations into a new state-of-the-art facility to improve long-term productivity and scalability, though it currently faces temporary inefficiencies from redundant plant overhead.
A strategic pivot toward Battery Energy Storage Systems (BESS) and AI data center infrastructure is underway, highlighted by a new partnership with ON Energy to provide resilient power solutions.
Full-year 2026 revenue guidance of $560 million to $600 million assumes a prudent conversion of the $603 million in backlog scheduled for delivery within the year.
Management has reset gross margin expectations to a low to mid thirties range for the foreseeable future to provide flexibility for winning new customers and entering new markets.
The first new BESS production line is expected to be operational within weeks, with more than half of the $67 million BESS backlog projected to be recognized as revenue in 2026.
Revenue cadence is expected to follow a 45/55 split between the first and second halves of the year, with margins likely bottoming in Q1 before improving as facility synergies are realized.
Legal expenses are expected to remain elevated through 2026 due to ongoing patent and shareholder litigation but are projected to decline significantly in 2027.
Tariffs impacted 2025 gross margins by approximately 80 basis points, and the company expects similar headwinds in 2026 as it works through capitalized inventory costs.
The company completed remediation for all reported instances of defective Prysmian wire in 2025, funded entirely through internal cash flow.
A favorable initial determination was reached in the ITC patent infringement case against Voltage, with a final ruling expected in early June 2026.
Adjusted EBITDA will now exclude legal spend related to class action and derivative lawsuits to provide better visibility into underlying business performance.
