Shoals shares rise after Q1 call highlights record backlog, margin pressure at SHLS

Shoals Technologies Group (SHLS) shares traded at $9.55 after its first-quarter earnings call, up from $8.27 before the report, as investors weighed strong U.S. utility-scale solar demand against pressure on gross margins. CEO Brandon Moss said revenue growth was supported by strong quote activity and a record backlog from new and existing customers. Management said margins were hurt by product mix, higher freight costs, tariffs and temporary labor inefficiencies tied to a new production facility. Moss said the company believes gross margin has reached its low point and should improve through 2026. Key investor focus areas include Shoals’ ability to expand battery energy storage system volumes, win additional AI data center projects, improve margins as facility transition costs fade and convert international backlog, particularly in Australia.