Shoals Technologies Group, Inc 10-K for FY2025

Shoals Technologies Group, Inc. (SHLS)

10-K 2026-02-24 For: 2025-12-31

Added on April 10, 2026

About this 10-K

Shoals Technologies Group, Inc filed this 10-K on February 24, 2026, covering the fiscal year ended December 31, 2025 (FY2025).

Headline figures

Fiscal year ended December 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $475.33M; up 19.1% from $399.21M a year earlier
Net income: $33.57M; up 39.2% from net income of $24.13M a year earlier
Diluted EPS: $0.20; up 42.9% from $0.14 a year earlier

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ITEM		PAGE
PART I
Item 1.	Business	2
Item 1A.	Risk Factors	10
Item 1B.	Unresolved Staff Comments	24
Item 1C.	Cybersecurity	24
Item 2.	Properties	26
Item 3.	Legal Proceedings	26
Item 4.	Mine Safety Disclosures	26

PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	26
Item 6.	Reserved	27
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 8.	Financial Statements and Supplementary Data	44
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	87
Item 9A.	Controls and Procedures	87
Item 9B.	Other Information	87
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	88

PART III
Item 10.	Directors, Executive Officers and Corporate Governance	88
Item 11.	Executive Compensation	88
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	88
Item 13.	Certain Relationships and Related Transactions, and Director Independence	88
Item 14.	Principal Accountant Fees and Services	88

PART IV
Item 15.	Exhibits and Financial Statement Schedules	89
Item 16.	Form 10–K Summary	91

	SIGNATURES	92


	Year Ended December 31,				2025 vs 2024
	2025		2024		$ variance		% variance
Revenue	$	475,331	$	399,208	$	76,123	19	%
Cost of revenue	308,823		257,191		51,632		20	%
Gross profit	166,508		142,017		24,491		17	%
Operating expenses
General and administrative expenses	101,524		82,254		19,270		23	%
Depreciation and amortization	8,599		8,591		8		—	%
Total operating expenses	110,123		90,845		19,278		21	%
Income from operations	56,385		51,172		5,213		10	%
Interest expense	(9,994)		(13,827)		(3,833)		(28)	%
Interest income	305		518		(213)		41	%
Gain on sale of assets	1,835		—		1,835		100	%
Foreign currency (loss) gain, net	(13)		—		(13)		100	%
Income before income taxes	48,518		37,863		10,655		28	%
Income tax expense	(14,944)		(13,736)		1,208		9	%
Net income	$	33,574	$	24,127	$	9,447	39	%


	Year Ended December 31,
	2025		2024		2023
Revenue	$	475,331	$	399,208	$	488,939
Cost of revenue	308,823		257,191		320,635
Gross profit	$	166,508	$	142,017	$	168,304
Gross profit percentage	35.0%		35.6%		34.4%

Wire insulation shrinkback expenses (a)	$	—	$	13,764	$	61,705
Adjusted gross profit	$	166,508	$	155,781	$	230,009
Adjusted gross profit percentage	35.0%		39.0%		47.0%


	Year Ended December 31,
	2025		2024		2023
Net income	$	33,574	$	24,127	$	42,661
Interest expense	9,994		13,827		24,100
Interest income	(305)		(518)		—
Income tax expense	14,944		13,736		12,274
Depreciation expense	6,233		5,007		2,612
Amortization of intangibles	7,611		7,619		7,917
Equity-based compensation	9,902		14,230		20,862
Gain on sale of assets	(1,835)		—		—
Wire insulation shrinkback expenses (a)	—		13,764		61,705
Wire insulation shrinkback litigation expenses (b)	18,342		7,292		1,260
Plant optimization expenses (c)	1,063		—		—
Adjusted EBITDA	$	99,523	$	99,084	$	173,391


(Registrant’s telephone number, including area code)			(615)			451-1400


Shoals Technologies Group, Inc.
Reports of Independent Registered Public Accounting Firm (Ernst & Young LLP; Nashville, Tennessee; PCAOB ID #42)			45
Report of Independent Registered Public Accounting Firm (BDO USA, P.C.; Austin, Texas, PCAOB ID #243)			49
Consolidated Balance Sheets			50
Consolidated Statements of Operations			51
Consolidated Statements of Changes in Stockholders’ Equity			52
Consolidated Statements of Cash Flows			54
Notes to Consolidated Financial Statements			56


			Wire Insulation Shrinkback Warranty
Description of the Matter			The Company’s recorded warranty liability for wire insulation shrinkback was $3.3 million at December 31, 2025. As discussed in Note 8 to the consolidated financial statements, the Company determined that a loss was both probable and reasonably estimable related to a subset of wire harnesses used in its electrical balance of systems (EBOS) solutions that presented unacceptable levels of contraction of wire insulation (“wire insulation shrinkback”). Accordingly, a liability is recorded for the Company’s estimate of probable loss. Auditing the Company’s warranty liability related to wire insulation shrinkback required judgment, as the calculation includes subjective estimates and assumptions in determining the liability. In particular, the estimated costs to remediate is sensitive to the significant assumption of estimated failure rates.


How we Addressed the Matter in Our Audit			We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s controls over the wire insulation shrinkback warranty liability process, including management’s review of the estimated failure rates and the completeness and accuracy of the data used to develop the assumption. To test the Company’s determination of the estimated warranty liability related to wire insulation shrinkback, we performed audit procedures that included, among others, assessing the methodologies utilized by management, performing sensitivity analyses on the significant assumption to evaluate the effect of changes to the estimated liability, testing the completeness and accuracy of the underlying data used by the Company in its evaluation, and testing the mathematical accuracy of the calculations.


	December 31,
	2025		2024
Assets
Current Assets
Cash and cash equivalents	$	7,320	$	23,511
Accounts receivable, net	128,793		78,181
Unbilled receivables	22,133		20,834
Inventory	89,878		55,977
Other current assets	9,762		9,849
Total Current Assets	257,886		188,352
Property, plant and equipment, net	53,302		28,222
Goodwill	69,941		69,941
Other intangible assets, net	33,499		41,083
Deferred tax assets	438,027		454,160
Right-of-use operating lease assets	46,044		1,786
Other assets	5,402		9,536
Total Assets	$	904,101	$	793,080

Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable	$	64,875	$	20,032
Accrued expenses and other	22,215		12,541
Warranty liability—current portion	3,202		29,602
Deferred revenue	37,031		18,737
Total Current Liabilities	127,323		80,912
Revolving line of credit	136,750		141,750
Right-of-use operating lease liabilities, less current portion	38,661		1,235
Warranty liability, less current portion	403		11,392
Other long-term liabilities	991		991
Total Liabilities	304,128		236,280
Commitments and Contingencies (Note 15)
Stockholders’ Equity
Preferred stock, $0.00001 par value - 5,000,000 shares authorized; none issued and outstanding as of December 31, 2025 and 2024	—		—
Class A common stock, $0.00001 par value - 1,000,000,000 shares authorized; 171,358,711 and 170,670,779 shares issued, 167,450,324 and 166,762,392 outstanding as of December 31, 2025 and 2024, respectively	2		2
Additional paid-in capital	493,090		483,550
Treasury stock, at cost, 3,908,387 shares as of December 31, 2025 and 2024, respectively	(25,272)		(25,331)
Retained Earnings	132,153		98,579
Total Stockholders' Equity	599,973		556,800
Total Liabilities and Stockholders’ Equity	$	904,101	$	793,080


	Class A Common Stock			Class B Common Stock					Treasury Stock
	Shares	Amount		Shares	Amount		Additional Paid-in Capital		Shares	Amount		Accumulated Earnings		Non-Controlling Interests		Total Stockholders' Equity
Balance at December 31, 2022	137,904,663	$	1	31,419,913	$	1	$	256,894	—	$	—	$	34,478	$	9,615	$	300,989
Net income	—	—		—	—		—		—	—		39,974		2,687		42,661
Equity-based compensation	—	—		—	—		20,862		—	—		—		—		20,862
Activity under equity-based compensation plan	—	—		—	—		(4,567)		—	—		—		687		(3,880)
Distributions to non-controlling interests	—	—		—	—		—		—	—		—		(2,628)		(2,628)
Vesting of restricted / performance stock units	792,713	—		—	—		—		—	—		—		—		—
Exchange of Class B to Class A common stock	31,419,913	1		(31,419,913)	(1)		186,745		—	—		—		—		186,745
Reallocation of non-controlling interests	—	—		—	—		10,361		—	—		—		(10,361)		—
Elimination of the umbrella-partnership C Corporation structure	—	—		—	—		247		—	—						247
Balance at December 31, 2023	170,117,289	2		—	—		470,542		—	—		74,452		—		544,996
Net income	—	—		—	—		—		—	—		24,127		—		24,127
Equity-based compensation	—	—		—	—		14,230		—	—		—		—		14,230
Activity under equity-based compensation plan	—	—		—	—		(1,222)		—	—		—		—		(1,222)
Vesting of restricted / performance stock units	553,490	—		—	—		—		—	—		—		—		—
Repurchase of Class A Common Stock	(3,908,387)	—		—	—		—		3,908,387	(25,331)		—		—		(25,331)
Balance at December 31, 2024	166,762,392	2		—	—		483,550		3,908,387	(25,331)		98,579		—		556,800


	Estimated Useful Lives (Years)
		December 31,
		2025		2024
Land	N/A	$	610	$	840
Building and land improvements	5-40	30,228		13,687
Machinery and equipment	3-5	23,940		19,958
Furniture and fixtures	3-7	3,193		2,705
Vehicles	5	125		125
Construction in Progress		12,694		3,969
		70,790		41,284
Less: accumulated depreciation		(17,488)		(13,062)
Property, plant and equipment, net		$	53,302	$	28,222


For the Year Ended December 31,	Amortization Expense
2026	7,585
2027	7,585
2028	7,585
2029	7,585
2030	3,159
	$	33,499


	Restricted Stock Units	Weighted Average Price
Outstanding, December 31, 2022	1,736,975	$	22.34
Granted	413,873	$	24.78
Vested	(887,996)	$	21.39
Forfeited	(91,386)	$	23.05
Outstanding, December 31, 2023	1,171,466	$	23.87
Granted	1,559,317	$	8.91
Vested	(650,080)	$	23.43
Forfeited	(238,347)	$	16.75
Outstanding, December 31, 2024	1,842,356	$	12.21
Granted	2,119,962	$	4.33
Vested	(734,768)	$	17.33
Forfeited	(371,728)	$	6.86
Outstanding, December 31, 2025	2,855,822	$	5.75


	Performance Stock Units	Weighted Average Price
Outstanding, December 31, 2022	256,305	$	11.89
Granted	205,585	$	27.75
Vested	(67,101)	$	11.86
Forfeited	(101,323)	$	13.08
Outstanding, December 31, 2023	293,466	$	22.59
Granted	324,099	$	15.30
Vested	(22,790)	$	16.04
Forfeited	(122,109)	$	19.26
Outstanding, December 31, 2024	472,666	$	18.77
Granted	941,257	$	4.63
Vested	(37,678)	$	14.43
Forfeited	(54,725)	$	9.65
Outstanding, December 31, 2025	1,321,520	$	9.20


	Year Ended December 31,
	2025		2024		2023
Statutory U.S. Federal income tax rate	21.0	%	21.0	%	21.0	%
Permanent adjustments	1.1	%	1.3	%	1.9	%
State and local taxes (net of federal benefit)	2.3	%	2.9	%	3.3	%
Effective income tax rate for Adjusted Net Income	24.4	%	25.2	%	26.2	%


	Year Ended December 31,
	2025		2024		2023
Net cash provided by operating activities	$	17,067	$	80,388	$	91,955
Net cash used in investing activities	(27,955)		(8,393)		(10,847)
Net cash used in financing activities	(5,303)		(71,191)		(67,167)
Net increase (decrease) in cash, cash equivalents	$	(16,191)	$	804	$	13,941


	Year Ended December 31,
	2025		2024		2023
Cash Flows from Operating Activities
Net income	$	33,574	$	24,127	$	42,661
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	13,817		12,626		10,529
Amortization/write off of deferred financing costs	622		3,093		2,165
Equity-based compensation	9,902		14,230		20,862
Provision for credit losses	—		—		296
Provision for obsolete or slow-moving inventory	1,206		2,670		5,041
Provision for warranty expense	522		15,203		59,556
Deferred taxes	16,132		14,035		11,334
Other	1,049		—		—
Changes in assets and liabilities:
Accounts receivable	(50,612)		28,937		(56,839)
Unbilled receivables	(1,299)		19,302		(23,423)
Inventory	(35,107)		(5,843)		15,009
Other assets	1,822		(9,767)		1,355
Accounts payable	43,320		5,636		5,171
Accrued expenses and other	4,790		(11,247)		4,471
Warranty liability	(40,965)		(29,123)		(5,202)
Deferred revenue	18,294		(3,491)		(1,031)
Net Cash Provided by Operating Activities	17,067		80,388		91,955
Cash Flows from Investing Activities
Purchases of property, plant and equipment	(33,043)		(8,393)		(10,578)
Proceeds from sale of property, plant and equipment	5,088		—		—
Other	—		—		(269)
Net Cash Used in Investing Activities	(27,955)		(8,393)		(10,847)
Cash Flows from Financing Activities
Distributions to non-controlling interests	—		—		(2,628)
Employee withholding taxes related to net settled equity awards	(362)		(1,222)		(3,880)
Deferred financing costs	—		(2,638)		—
Payments on term loan facility	—		(143,750)		(51,500)
Proceeds from revolving credit facility	60,000		148,750		45,000
Repayments of revolving credit facility	(65,000)		(47,000)		(53,000)
Repurchase of Class A common stock	—		(25,331)		—
Excise taxes on treasury stock transactions	59		—		—
Deferred offering costs	—		—		(1,159)
Net Cash Used in Financing Activities	(5,303)		(71,191)		(67,167)


	2025				2024				2023
	Revenue %		Accounts Receivable %		Revenue %		Accounts Receivable %		Revenue %
Customer A	19.1	%	25.2	%	26.4	%	19.0	%	36.3	%
Customer B	12.9	%	6.9	%	10.4	%	8.8	%	5.5	%


	Year ended December 31,
	2023
Net income attributable to non-controlling interests	$	2,687
Transfers to non-controlling interests:
Increase as a result of activity under equity-based compensation plan	687
Decrease from tax distributions to non-controlling interests	(2,628)
Reallocation of non-controlling interests	(10,361)
Change from net income attributable to non-controlling interests and transfers to non-controlling interests	$	(9,615)


		December 31,
	Location on the Consolidated Balance Sheets	2025		2024
Right-of-use asset	Right-of-use operating lease assets	$	46,044	$	1,786

Lease liability, current portion	Accrued expenses and other	$	3,217	$	881
Lease liability, net current portion	Right-of-use operating lease liabilities	38,661		1,235
Total lease liability		$	41,878	$	2,116


For the Year Ended December 31,	Operating Leases
2026	6,070
2027	5,597
2028	5,431
2029	5,596
2030	5,762
Thereafter	30,388
Total lease payments	58,844
Less: Imputed lease interest	(16,966)
Total lease liabilities	$	41,878


	Year Ended December 31,
	2025
U.S. Federal Statutory Tax Rate	$	10,189	21.0	%
State and Local Income Taxes, Net of Federal Income Tax Effect (a)	1,855		3.8	%
Changes in Valuation Allowances	(48)		(0.1)	%
Nontaxable or Nondeductible Items
Equity Compensation	2,051		4.2	%
Other	529		1.1	%
Other Adjustments	368		0.8	%
Effective Tax Rate	$	14,944	30.8	%


	Year Ended December 31,
	2025
Cash paid for income taxes, net of refunds
U.S. Federal	$	—
U.S. State and Local
Minnesota	(10)
Tennessee	(173)
Other	—
Foreign	—
Total cash paid during the period for income taxes	$	(183)


Shoals Technologies Group, Inc.

By:	/s/ Brandon Moss
	Name:	Brandon Moss
	Title:	Chief Executive Officer and Director


Type of Award:			Restricted Stock Units
Participant:			[●]
Date of Grant:			[●]
Vesting Commencement Date:			[●]
Total Number of Restricted Stock Units:			[●]


Vesting Schedule:	Subject to Sections 3 and 6 of the Agreement, the Plan and the other terms and conditions set forth herein, the RSUs shall vest according to the following schedule, subject to your continued employment or service with the Company or an Affiliate from the Date of Grant through each such vesting date (each, a “Vesting Date”):
	Vesting Date	Percentage of RSUs That Vest
	First Anniversary of the Vesting Commencement Date	33.33%
	Second Anniversary of the Vesting Commencement Date	33.33%
	Third Anniversary of the Vesting Commencement Date	33.34%


/s/ Brandon Moss
Brandon Moss
Chief Executive Officer (Principal Executive Officer)


/s/ Dominic Bardos
Dominic Bardos
Chief Financial Officer (Principal Financial Officer)