Shoals Technologies Beats Q3 Estimates and Merges with Array Technologies in All-Stock Deal

Shoals Technologies Group posted third-quarter 2026 revenue of $195.3 million, a 43.8% year-over-year increase that exceeded the $162 million analyst estimate by more than 22%. Adjusted EPS of $0.14 topped the $0.12 consensus, and Adjusted EBITDA of $39.8 million came in ahead of the $35 million estimate. Adjusted gross margin of 32.0% was the one soft spot, missing the 32.7% estimate. Management credited productivity improvements for pushing both revenue and Adjusted EBITDA above their own expected range. Total backlog and awarded orders reached $791.7 million, up 9.8% year over year.

Shoals also raised its full-year 2026 guidance, lifting revenue to $665 million to $685 million against a prior consensus of $628 million, and Adjusted EBITDA to $129 million to $133 million versus the $124 million estimate. The company guided fourth-quarter revenue to $165 million to $185 million, roughly in line with the $164 million estimate, and Q4 Adjusted EBITDA to $36 million to $40 million against an estimate of $37.4 million. Full-year cash flow from operations is expected at $55 million to $65 million, capital expenditures at $20 million to $30 million, and interest expense at $11 million to $13 million.

Simultaneously, Shoals announced a definitive all-stock merger agreement with Array Technologies. Under the terms, Shoals shareholders will receive 1.6931 Array shares per share and will own approximately 65% of the combined company. The deal pairs Shoals' electrical balance-of-system infrastructure products with Array's solar tracking and structural solutions, with both companies planning further expansion into battery storage and data center infrastructure. Shoals CEO Brandon Moss will lead the combined entity. The merger is expected to close in Q1 2027, subject to regulatory and shareholder approvals. The combined company is targeting 2027 revenue of $2.2 billion to $2.4 billion, Adjusted EBITDA of $410 million to $480 million, and annual EBITDA synergies exceeding $100 million within three years. Shares of Array rose about 12.1% in premarket trading on the news, while Shoals gained approximately 6.4%.