Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported August 4, 2026 · Beat 2 of last 7 quarters
The Buildout is a website built on agentic AI tools, currently in beta, and could have factual errors.
Shoals' record backlog and strong bookings signal sustained demand for electrical balance-of-system components in utility-scale solar and BESS, both critical to AI data center power infrastructure. The TerraFlow and ON.energy partnerships position Shoals to capture growth in long-duration storage and data center power delivery, reinforcing the AI infrastructure buildout thesis.
Q2 revenue grew 47% YoY to $163.4M, driven by strong demand in core utility-scale solar and meaningful BESS contribution. Adjusted EBITDA grew 28% YoY to $31.6M, with adjusted gross margin at 30.6%. The company added $207M in new orders, achieving a book-to-bill of 1.3x and record BLAO of $801.4M. BESS revenue was $20M in the quarter, with $10M in new orders, and the company announced a partnership with TerraFlow for up to 5GW annually of long-duration storage. The company also prevailed in its ITC case against Voltage, with damages to be determined in district court in Q3.
Management reaffirmed full-year 2026 guidance of $600M-$640M revenue (30% growth at midpoint) and $118M-$132M adjusted EBITDA (26% growth at midpoint). Q3 guidance implies 18% YoY revenue growth at midpoint. They expect gross margin to improve sequentially through the year, driven by favorable product mix, new facility efficiencies, and productivity gains. The company is expanding capacity at a measured pace, with the new mega facility being completed and production ramping. BESS revenue is expected to be episodic, with TerraFlow partnership revenue beginning in 2027. The tone was optimistic, citing strong demand, record backlog, and a strengthened competitive position.
“The U.S. market continues to be robust, and we are focused on improving productivity each month. The need for energy from all sources has never been as strong as it is today, and we believe Shoals is increasingly well positioned to deliver sustainable growth as our strategic and operational initiatives translate into measurable progress.”
on Market demand and positioning
“We are very excited about the TerraFlow MOU. We are in the process right now of starting our engineering cycle with those guys to help develop an engineered solution for deployment. I would probably model that revenue will begin in 2027.”
on TerraFlow partnership
“Our goal is to give guidance that's reasonable and achievable. We have got 30% growth factored into the midpoint of our guidance on the top line and 26% from an EBITDA standpoint.”
on Guidance philosophy
On the tariff MOU signed and announced yesterday, what's the expected timeline for first meaningful volume? And how does this partnership complement or differ from the ON.energy relationship?
Brandon Moss said revenue from TerraFlow will begin in 2027, not 2026. He noted TerraFlow uses a different approach with vanadium, creating both short- and long-cycle duration battery solutions, and the partnership is a meaningful step to diversify the customer base.
Can you talk about the factors that would give you momentum to raise guidance? And should we expect any IEPA refunds in Q3?
Brandon Moss noted they raised guidance in Q1 and reaffirmed for the full year, citing strong demand and record backlog. Dominic Bardos confirmed IEPA refunds were received in Q2, with some impact deferred to Q3 due to inventory, and that margin improvement will come from favorable mix and new facility efficiencies.
How has customer reception been for AirLink? Do you think there will be an educational period? And how do AirLink ASPs compare to traditional busway solutions?
Brandon Moss said customer reception has been very significant, but there will be a learning curve for engineers, installers, and inspectors. He expects a price premium over other options, and the product is on track for a live test installation in 2026.