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Shoals is one of those companies nobody thinks about because the product is genuinely boring. They make electrical balance-of-system stuff, wiring, connectors, combiners, junction boxes, basically the parts that hook solar panels together and tie a solar farm into the grid. Nobody's writing headlines about wire harnesses, but here we are.
Q1 2026 revenue was $140.6M, up 75% YoY, beat estimates. Record backlog too, awarded orders of $758M with about $628M of that already scheduled through Q1 2027. So there's real visibility into near-term revenue, not just a guess. Full-year guidance got raised to $600-640M.
What actually caught my eye is where the growth's coming from now though. Shoals pushed into battery energy storage, and on the earnings call management confirmed they'll be a partner on the largest battery-paired AI data center site in the country. That's a completely new customer type for a company that used to sell almost exclusively to utility-scale solar developers. Kind of makes sense when you think about it, the same wiring expertise for a solar farm is basically what you need to wire up a massive battery site too.
Margins are the catch. Gross margin dropped to around 29% from 35% a year ago, tariffs, higher material costs, and they moved over 250 pieces of equipment in 60 days consolidating into a new facility, which is its own mess. There's also IP and shareholder litigation adding to G&A. Management's saying Q1 was the bottom and margins improve from here, but that's still just guidance, not something that's shown up yet. Company actually posted a small net loss this quarter despite the revenue growth.
So [Shoals](https://www.stoxcraft.com/stocks/shls) has real growth and a real backlog, I just want to see the margin recovery and the AI data center stuff actually land in a quarter before getting too excited. Anyone track solar infrastructure suppliers as a group, or is this too far downstream from the panel makers to matter?