What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-02-24 compared with 2025-02-25 · 304 added, 268 removed, 806 unchanged (42% of the section changed)

2 unchanged sentences

Shoals Technologies Group, Inc.

Reports of Independent Registered Public Accounting Firm ( BDO USA, P.C.

Austin, Texas ;

Reports of Independent Registered Public Accounting Firm (Ernst & Young LLP;

Nashville, Tennessee;

PCAOB ID # 42 )

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 (Deficit) 59

Consolidated Statements of Changes in Stockholders’ Equity

Consolidated Statements of Cash Flows 54

1 unchanged sentence

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Shoals Technologies Group, Inc.

Portland, Tennessee

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Shoals Technologies Group, Inc.

(the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, changes in members’/stockholders’ equity (deficit), and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024 , in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and our report dated February 25, 2025 expressed an unqualified opinion thereon.

To the Stockholders and the Board of Directors of Shoals Technologies Group, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Shoals Technologies Group, Inc.

(the “Company”) as of December 31, 2025, the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for the year ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025, and the results of its operations and its cash flows for the year ended December 31, 2025, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 24, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken

as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Warranty Liability related to Wire Insulation Shrinkback

As described in Note 8 to the consolidated financial statements, the Company had been notified by certain customers that a subset of wire harnesses used in its electrical balance of systems (“EBOS”) solutions is presenting unacceptable levels of pull back of wire insulation at connection points (“wire insulation shrinkback”).

Based upon the Company’s ongoing assessment, the Company currently believes the wire insulation shrinkback is related to defective wire from a specific manufacturer.

As of December 31, 2024, the Company recorded a warranty liability related to this matter of $39.9 million.

We identified the warranty liability related to the wire insulation shrinkback as a critical audit matter because of certain significant assumptions used by management to estimate the warranty liability, specifically, the magnitude of engineering, procurement, and construction firms’ (“EPC’s”) labor costs, estimated failure rates, and planned remediation methods.

Auditing these assumptions involved especially complex and subjective auditor judgment due to the nature and extent of audit effort required to address this matter.

The primary procedures we performed to address this critical audit matter included:

• Vouching the EPC’s labor rates to external quotes or executed statements of work for a selection of rates.

Recalculating the estimated labor costs using labor rates and the number of impacted harnesses and evaluating the impact on the liability calculation.

• For a selection of sites, agreeing the failure rates to external inspection reports and testing the impact of those on the liability calculation.

• Evaluating management’s designation of planned remediation methods across the population of affected sites.

/s/ BDO USA, P.C.

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.

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.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2025.

Austin, Texas

Nashville, Tennessee

February 24, 2026

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Shoals Technologies Group, Inc.

Portland, Tennessee

To the Stockholders and the Board of Directors of Shoals Technologies Group, Inc.

Opinion on Internal Control Over Financial Reporting

We have audited Shoals Technologies Group, Inc.’s (the “Company’s”) internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO criteria”).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria .

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of operations, changes in members’/stockholders’ equity (deficit), and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”) and our report dated February 25, 2025 expressed an unqualified opinion thereon.

We have audited Shoals Technologies Group, Inc.’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Shoals Technologies Group, Inc.

(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2025, the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for the year ended December 31, 2025, and the related notes and our report dated February 24, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying “Item 9A, Management’s Report on Internal Control over Financial Reporting”.

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit of internal control over financial reporting in accordance with the standards of the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audit also included performing such other procedures as we considered necessary in the circumstances.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

2 unchanged sentences

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and

directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

1 unchanged sentence

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Nashville, Tennessee

February 24, 2026

Report of Independent Registered Public Accounting Firm

Shareholders and Board of Directors

Shoals Technologies Group, Inc.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of Shoals Technologies Group, Inc.

(the “Company”) as of December 31, 2024, the related consolidated statements of operations, changes in members’/stockholders’ equity(deficit), and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

/s/ BDO USA, P.C.

We have served as the Company's auditor from 2017 to 2025.

Austin, Texas

7 unchanged sentences

Unbilled receivables 22,133 20,834

Inventory, net 55,977 52,804

89,878 55,977

Other current assets 9,762 9,849

4 unchanged sentences

Deferred tax assets 438,027 454,160

Right-of-use operating lease assets 46,044 1,786

Other assets 5,402 9,536

6 unchanged sentences

Deferred revenue 37,031 18,737

Long-term debt—current portion — 2,000

Total Current Liabilities 127,323 80,912

Revolving line of credit 136,750 141,750

Long-term debt, less current portion — 139,445

Right-of-use operating lease liabilities, less current portion 38,661 1,235

Warranty liability, less current portion 403 11,392

7 unchanged sentences

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

Class B common stock, $ 0.00001 par value - 195,000,000 shares authorized;

none issued and outstanding as of December 31, 2024 and 2023, respectively

Additional paid-in capital 493,090 483,550

Treasury stock, at cost, 3,908,387 and zero shares as of December 31, 2024 and 2023, respectively

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

15 unchanged sentences

Interest income 305 518 —

Payable pursuant to the tax receivable agreement adjustment — — ( 6,675 )

Gain on termination of tax receivable agreement — — 110,883

Gain on sale of assets 1,835 — —

Foreign currency (loss) gain, net ( 13 ) — —

Income before income taxes 48,518 37,863 54,935

12 unchanged sentences

Shoals Technologies Group, Inc.

Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

Consolidated Statements of Changes in Stockholders’ Equity

(in thousands, except shares)

Common Stock Class B

Common Stock Additional Paid-in Capital Treasury Stock Accumulated Earnings (Deficit) Non-Controlling Interests Total Stockholders' Equity (Deficit)

Shares Amount Shares Amount Shares Amount

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

3 unchanged sentences

Distributions to non-controlling interests — — — — — — — — ( 2,628 ) ( 2,628 )

Vesting of restricted stock units 480,116 — — — — — — — — —

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

Issuance of Class A common stock sold in follow-on offering, net of underwriting discounts and commissions and offering costs 2,000,000 — — — 41,224 — — — — 41,224

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

2 unchanged sentences

Activity under equity-based compensation plan — — — — ( 1,222 ) — — — — ( 1,222 )

Distributions to non-controlling interests — — — — — — — — ( 2,628 ) ( 2,628 )

Vesting of restricted stock units 792,713 — — — — — — — — —

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

Shoals Technologies Group, Inc.

Consolidated Statements of Changes in Members’ / Stockholders’ Equity (Deficit) (continued)

Consolidated Statements of Changes in Stockholders’ Equity (continued)

(in thousands, except shares)

Common Stock Class B

Common Stock Additional Paid-in Capital Treasury Stock Accumulated Earnings (Deficit) Non-Controlling Interests Total Stockholders' Equity (Deficit)

Shares Amount Shares Amount Shares Amount

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

Common Stock Treasury Stock

Shares Amount Shares Amount Additional Paid-in Capital Shares Amount Accumulated Earnings Non-Controlling Interests Total Stockholders' Equity

Net income — — — — — — — 33,574 — 33,574

2 unchanged sentences

Vesting of restricted / performance stock units 687,932 — — — — — — — — —

Repurchase of Class A common stock ( 3,908,387 ) — — — — 3,908,387 ( 25,331 ) — — ( 25,331 )

Excise taxes on treasury stock transactions — — — — — — 59 — — 59

Balance at December 31, 2025 167,450,324 $ 2 — $ — $ 493,090 3,908,387 $ ( 25,272 ) $ 132,153 $ — $ 599,973

15 unchanged sentences

Deferred taxes 16,132 14,035 11,334

Payable pursuant to the tax receivable agreement adjustment — — 6,675

Gain on termination of tax receivable agreement — — ( 110,883 )

Other 1,049 — —

Changes in assets and liabilities:

10 unchanged sentences

Purchases of property, plant and equipment ( 33,043 ) ( 8,393 ) ( 10,578 )

Proceeds from sale of property, plant and equipment 5,088 — —

Other — — ( 269 )

8 unchanged sentences

Repurchase of Class A common stock — ( 25,331 ) —

Proceeds from issuance of Class A common stock in follow-on offering, net of underwriting discounts and commissions — — 42,943

Excise taxes on treasury stock transactions 59 — —

Deferred offering costs — — ( 1,159 )

Early termination payment of tax receivable agreement — — ( 58,000 )

Payment of fees for tax receivable agreement termination — — ( 1,870 )

Shoals Technologies Group, Inc.

Consolidated Statements of Cash Flows (continued)

(in thousands)

Year Ended December 31,

2024 2023 2022

Net Cash Used in Financing Activities ( 5,303 ) ( 71,191 ) ( 67,167 )

2 unchanged sentences

Cash, Cash Equivalents—End of Period $ 7,320 $ 23,511 $ 22,707

Shoals Technologies Group, Inc.

Consolidated Statements of Cash Flows (continued)

(in thousands)

Year Ended December 31,

4 unchanged sentences

Non-cash investing and financing activities:

Purchased equipment not yet paid for $ 1,523 $ — $ —

Right of use operating lease assets obtained in exchange for lease obligations $ 46,168 $ — $ —

Right of use operating lease liabilities obtained in exchange for lease assets $ 41,336 $ — $ —

Recording of deferred tax assets related to exchanges of Class B common stock to Class A common stock $ — $ — $ 187,648

Recording of amounts payable pursuant to tax receivable agreement $ — $ — $ 7,761

Capital contribution related to tax receivable agreement exchanges of Class B common stock to Class A common stock $ — $ — $ 187,648

16 unchanged sentences

As of December 31, 2025, Shoals Technologies Group, Inc.

owns directly or indirectly four subsidiaries:

Shoals Intermediate Parent, Shoals Technologies Group, LLC, Shoals International, LLC and Shoals Energy Spain, S.L.

The Company is headquartered in Portland, Tennessee and is a leading provider of EBOS solutions and components, including battery energy storage solutions (“BESS”) and Original Equipment Manufacturer (“OEM”) components, for the global energy transition market.

owns directly or indirectly five subsidiaries:

Shoals Intermediate Parent, Shoals Technologies Group, LLC, Shoals International, LLC, Shoals Energy Spain, S.L., and Shoals Energy Australia Pty Ltd.

The Company is headquartered in Portland, Tennessee and is leading design-engineering and manufacturer of advanced electrical infrastructure solutions for mission‑critical applications across solar photovoltaic (PV), battery energy storage solutions (BESS), and data center power systems for the global energy transition market.

Summary of Significant Accounting Policies

7 unchanged sentences

Non-Controlling Interests

The non-controlling interests on the consolidated statements of operations represented a portion of earnings or loss attributable to the economic interests in the Company’s former subsidiary, Shoals Parent LLC, formerly held by direct or indirect holders of LLC Interests and our Class B common stock, including the founder and certain current and former executive officers, employees and their respective permitted transferees (the “Continuing Equity Owners”).

Activity related to non-controlling interests on the Statements of

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

Changes in Members’ / Stockholders’ Equity represents activity related to the portion of net assets of the Company attributable to the Continuing Equity Owners, based on the portion of the LLC Interests owned by such unit holders.

transferees (the “Continuing Equity Owners”).

Activity related to non-controlling interests on the Statements of Changes in Members’ / Stockholders’ Equity represents activity related to the portion of net assets of the Company attributable to the Continuing Equity Owners, based on the portion of the LLC Interests owned by such unit holders.

As of March 2023, the Company, along with wholly-owned subsidiary Shoals Intermediate Parent, owned 100 % of Shoals Parent LLC.

157 unchanged sentences

The Company manages its business on the basis of one operating and reportable segment and derives revenues from selling its product.

Foreign Currency Remeasurement

The reporting currency of the Company and its subsidiaries is the United States dollar.

Remeasurement gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included the consolidated statements of operations.

Advertising Expenses

5 unchanged sentences

New Accounting Standards

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, requiring public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis.

Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in Accounting Standards Codification (“ASC”) 280 on an interim and annual basis.

The Company adopted ASU 2023-07 during the year ended December 31, 2024.

This guidance did not have a material impact on our consolidated financial results, but did lead to additional disclosures.

See Note 19 - Segment Reporting in the accompanying notes to the consolidated financial statements for further detail.

Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which expands disclosures in an entity’s income tax rate reconciliation table and disclosures regarding cash taxes paid both in the U.S.

and foreign jurisdictions.

The update will be effective for annual periods beginning after December 15, 2024.

The Company is currently evaluating the impact that this guidance will have on the presentation of its consolidated financial statements.

Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company adopted ASU 2023-09 for the year ended December 31, 2025, and applied the new disclosure requirements prospectively to the current annual period.

Prior period disclosures have not been adjusted to reflect the new disclosure requirements.

See Note 16 Income Taxes in the accompanying notes to the consolidated financial statements for further detail.

Not Yet Adopted

Shoals Technologies Group, Inc.

4 unchanged sentences

The Company is currently evaluating the impact of adopting ASU 2024-03.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software, which modernizes the accounting for internal-use software to current development practices, clarifies when to begin capitalizing costs, and enhances disclosure requirements.

This update is effective for interim and annual periods beginning after December 15, 2027, with early adoption permitted.

ASU 2025-06 is not expected to significantly change our current accounting for internal-use software.

In December 2025, the FASB issued ASU 2025-10, Accounting for Government Grants Received by Business Entities, to establish guidance on the recognition, measurement, and presentation of government grants received by business entities.

The new guidance leverages the principles in the accounting framework for government assistance in International Accounting Standard 20 "Accounting for Government Grants and Disclosure of Government Assistance".

The new guidance is effective for public business entities in annual periods beginning after December 15, 2028, with early adoption permitted.

ASU 2025-10 is not expected to significantly change our current accounting for incentives from federal, state, and local governments.

Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial statements.

4 unchanged sentences

Accounts receivable, net $ 128,793 $ 78,181

Inventory, net consists of the following (in thousands):

Inventory consists of the following (in thousands):

Raw materials $ 90,694 $ 55,703

2 unchanged sentences

Allowance for obsolete or slow-moving inventory ( 3,926 ) ( 4,457 )

Inventory, net $ 55,977 $ 52,804

$ 89,878 $ 55,977

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

The following table presents the change in the allowance for obsolete or slow-moving inventory balances (in thousands):

3 unchanged sentences

Allowance balance, end of year $ ( 3,926 ) $ ( 4,457 )

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

Property, Plant and Equipment

7 unchanged sentences

Furniture and fixtures 3 - 7

Construction in Progress 12,694 3,969

70,790 41,284

17 unchanged sentences

11,900 11,900

Noncompete agreements 5

Total amortizable intangibles 99,600 99,600

3 unchanged sentences

Trade names 8,033 7,155

Backlog 600 600

Noncompete agreements 2,000 2,000

Total accumulated amortization 66,101 58,517

3 unchanged sentences

For the Year Ended December 31, Amortization Expense

Thereafter 3,158

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

Accrued Expenses and Other

7 unchanged sentences

General Warranty

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

The Company offers an assurance type warranty for its products against manufacturer defects which does not contain a service element.

For these assurance type warranties, a provision for estimated future costs related to warranty expense is recorded when they are probable and reasonably estimable.

As of December 31, 2024 and December 31, 2023 our estimated general warranty liability was approximately $ 1.1 million and zero , respectively.

As of December 31, 2025 and December 31, 2024, our estimated general warranty liability was approximately $ 0.3 million and $ 1.1 million, respectively.

The Company recorded total warranty expense related to general warranty matters of $ 0.5 million, $ 1.9 million , and $ 0.4 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Wire Insulation Shrinkback Warranty

The Company has been notified by certain customers that a subset of wire harnesses used in its EBOS solutions is presenting unacceptable levels of contraction of wire insulation (“wire insulation shrinkback”).

Based upon the Company’s ongoing assessment, the Company currently believes the wire insulation shrinkback is related to defective wire manufactured by Prysmian Cables and Systems USA, LLC (“Prysmian”).

Based on the Company’s continued analysis of information available as of the date of this Annual Report, the Company determined that a potential range of loss was both probable and reasonably estimable.

The estimate of potential losses remains unchanged from the estimate provided as of September 30, 2024.

During the three months ended September 30, 2024, the Company determined that it was appropriate to adjust the range from the estimates provided in prior quarters, and based on additional information obtained, the Company increased the low-end of the estimated range from $ 59.7 million to $ 73.0 million, and decreased the high-end of the estimated range from $ 184.9 million to $ 160.0 million.

As no amount within the current range of loss appears to be a better estimate than any other amount, the Company recorded a warranty liability and related expense representing the low-end of the range of potential loss of $ 73.0 million, which resulted in an increase in the warranty liability and warranty expense of $ 13.3 million during the year ended December 31, 2024.

The high-end of the range of potential loss is $ 160.0 million, which is $ 87.0 million higher than the low-end of the range of potential loss.

As of December 31, 2024, our recorded warranty liability related to this matter was $ 39.9 million.

The estimated range, as revised, continues to be based on several assumptions, including the potential magnitude of engineering, procurement and construction firm’s labor cost to identify and perform the repair and replacement of impacted harnesses, estimated failure rates, materials replacement cost, planned remediation method, inspection costs, and other various assumptions.

While our wire insulation shrinkback warranty liability represents our best estimate of the range of expected losses at any given time, the Company remains active in the ongoing identification, repair and replacement process and has increased, and may further increase or

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

decrease, its estimated warranty liability from its current estimate based on available information, including with respect to experience relating to weather delays, site access, the scope of replacement, vegetation management or other factors.

Such increase or decrease may be material.

The Company was notified by certain customers that a subset of wire harnesses used in its EBOS solutions has presented unacceptable levels of contraction of wire insulation (“wire insulation shrinkback”).

Based upon the Company’s assessment, the Company currently believes the wire insulation shrinkback is related to defective wire manufactured by Prysmian Cables and Systems USA, LLC (“Prysmian”).

Based on the Company’s continued analysis of information available as of the date of this Annual Report, the Company determined that a loss was both probable and reasonably estimable.

For the year ended December 31, 2023, the Company disclosed an initial range of potential loss from $ 59.7 million to $ 184.9 million.

The Company recorded warranty expense for this matter of $ 59.2 million during the year ended December 31, 2023.

During the year ended December 31, 2024, the Company determined it was appropriate to adjust the range of estimates previously provided based on additional information obtained.

The low-end of the estimated range increased to $ 73.0 million and the high-end decreased to $ 160.0 million.

The Company recorded warranty expense of $ 13.3 million during the year ended December 31, 2024.

In accordance with ASC 450, Contingencies , the Company believes the potential estimated loss for this matter is $ 73.0 million, which represents the best estimate of the potential loss as of December 31, 2025, of which $ 69.7 million has been incurred to date.

As of December 31, 2025, our recorded remaining warranty liability related to this matter was $ 3.3 million.

It is reasonably possible that our liability could exceed the amount recorded, including due to additional reports of wire insulation shrinkback at previously affected and reported solar projects or at projects not previously reported or otherwise identified.

Any excess amounts remain uncertain.

The estimated loss, as revised, continues to be based on several assumptions, including estimated failure rates, future notification of impacted harnesses, the potential magnitude of engineering, procurement and construction firm’s labor cost to identify and perform the repair and replacement of impacted harnesses, materials replacement cost, planned remediation method, and inspection costs.

While our wire insulation shrinkback warranty liability represents our best estimate of expected losses, the Company will monitor future activity to best estimate potential losses.

The Company has increased, and may further increase, its estimated warranty liability from its current estimate based on available information, including future remediation efforts and the scope of future replacements, if any.

Such increase may be material.

The Company does not maintain insurance for product warranty issues and has commenced a lawsuit against Prysmian, as discussed in more detail under Wire Insulation Shrinkback Litigation section of Note 15 - Commitments and Contingencies.

Because the lawsuit against Prysmian is ongoing, potential recovery from Prysmian is not considered probable as defined in ASC 450, Contingencies, and has not been considered in our estimate of the warranty liability as of December 31, 2025.

The Company recorded total warranty expense related to this matter of $ 13.3 million, $ 59.2 million, and $ 0.5 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The Company recorded total warranty expense related to this matter of zero , $ 13.3 million, and $ 59.2 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

Warranty liability, which includes both general warranty and wire insulation shrinkback warranty, consists of the following (in thousands):

4 unchanged sentences

Payments ( 40,965 ) ( 29,123 ) ( 5,202 )

Warranty adjustments (1) 3,054 — —

Warranty liability, end of period $ 3,605 $ 40,994 $ 54,914

1 unchanged sentence

Warranty liability, net current portion $ 403 $ 11,392 $ 23,815

(1) Warranty adjustments are related to the expected value of scrap recoveries and have been recorded in other assets.

Long-Term Debt

Long-term debt consists of the following (in thousands):

Term Loan Facility $ — $ 143,750

Revolving Credit Facility 141,750 40,000

deferred financing costs — ( 2,305 )

Total debt, net of deferred financing costs 141,750 181,445

current portion — ( 2,000 )

Long-term debt, net current portion $ 141,750 $ 179,445

Revolving line of credit $ 136,750 $ 141,750

The aggregate amounts of principal maturities on the Company’s long-term debt is as follows (in thousands):

For the Year Ended December 31,

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

Senior Secured Credit Agreement

On November 25, 2020 Shoals Holdings LLC, a former subsidiary of the Company, entered into a senior secured credit agreement (as amended, the “Senior Secured Credit Agreement”), consisting of (i) a $ 350.0 million senior secured six-year term loan facility (the “Term Loan Facility”), (ii) a $ 30.0 million senior secured delayed draw term loan facility, maturing concurrently with the six-year Term Loan Facility (the “Delayed Draw Term Loan Facility”) and (iii) an uncommitted super senior first out revolving credit facility (the “Revolving Credit Facility”).

In December 2020, Shoals Holdings LLC entered into two amendments to the Senior Secured Credit Agreement in order to obtain a $ 100.0 million increase (the “Revolver Upsize”) to the Revolving Credit Facility and modify the terms of the interest rate and prepayment premium.

In December 2020, Shoals Holdings LLC entered into two amendments to the Senior Secured Credit Agreement in order to obtain a $ 100.0 million increase to the Revolving Credit Facility and modify the terms of the interest rate and prepayment premium.

As part of the first amendment the Company repaid and terminated all outstanding commitments under the Delayed Draw Term Loan Facility.

On January 29, 2021, the Company used proceeds from the IPO to repay $ 150.0 million of outstanding borrowings under the Term Loan Facility.

The repayment of a portion of the borrowings under the Term Loan Facility resulted in a $ 16.0 million loss on debt repayment as the result of the $ 11.3 million prepayment premium and $ 4.7 million write-off of a portion of the deferred financing costs.

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

On May 2, 2022, Shoals Holdings LLC entered into an amendment to the Senior Secured Credit Agreement in order to increase the amount available for borrowing under the Revolving Credit Facility from $ 100.0 million to $ 150.0 million.

The amendment also set forth Secured Overnight Financing Rate (“SOFR”) as the benchmark rate and amended the financial covenant such that, commencing with September 30, 2022, its Consolidated First Lien Secured Leverage Ratio (as defined in the Senior Secured Credit Agreement) shall not exceed 6.50 :1.00.

The amendment also set forth Secured Overnight Financing Rate (“SOFR”) as the benchmark rate.

On December 27, 2023, the Company used proceeds from the Revolving Credit Facility to make a $ 50.0 million voluntary prepayment of outstanding borrowings under the Term Loan Facility.

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On March 19, 2024, the Company made a $ 43.8 million voluntary prepayment of all the outstanding term loans under the Term Loan Facility, thereby terminating all term loan commitments under the Term Loan Facility.

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

Beginning March 19, 2024 and until the delivery of the Company’s compliance certificate for the second quarter of 2024 pursuant to the Senior Secured Credit Agreement, the Revolving Credit Facility bore interest at a rate equal to, at the Company’s election, either adjusted term SOFR or base rate (each, as defined in the Senior Secured Credit Agreement) plus (i) in the case of SOFR rate loans, 2.50 % per annum and (ii) in the case of base rate loans, 1.50 % per annum.

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Guarantees and Security

The obligations under the Senior Secured Credit Agreement are guaranteed by Shoals Technologies Group, Inc.’s and its wholly owned domestic subsidiaries other than certain immaterial subsidiaries and other excluded subsidiaries.

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

excluded subsidiaries.

The obligations under the Senior Secured Credit Agreement are secured by a first priority security interest in substantially all of Shoals Technologies Group Inc.’s and the guarantors’ existing and future property and assets, including accounts receivable, inventory, equipment, general intangibles, intellectual property, investment property, other personal property, material owned real property, cash and proceeds of the foregoing.

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Basic EPS of Class A common stock is computed by dividing net income attributable to the Company by the weighted average number of shares of Class A common stock outstanding during the period.

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

if-converted method and the assumed exercise of any common stock equivalents using the treasury stock method, if dilutive.

Diluted EPS of Class A common stock is computed similarly to basic EPS except the weighted average shares outstanding are increased to include additional shares from the exchange of Class B common stock under the if-converted method and the assumed exercise of any common stock equivalents using the treasury stock method, if dilutive.

The Company’s restricted/performance stock units are considered common stock equivalents for this purpose.

Basic and diluted EPS of Class A common stock have been computed as follows (in thousands, except per share amounts):

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

Year ended December 31,

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Net income attributable to Shoals Technologies Group, Inc.

- basic $ 24,127 $ 39,974 $ 127,611

Reallocation of net income attributable to non-controlling interests from the assumed exchange of Class B common stock — — 15,402

Net income attributable to Shoals Technologies Group, Inc.

- diluted $ 24,127 $ 39,974 $ 143,013

- basic & diluted $ 33,574 $ 24,127 $ 39,974

Weighted average shares of Class A common stock outstanding - basic 167,257 168,570 164,165

1 unchanged sentence

Restricted / performance stock units 1,121 155 339

Class B common stock — — 52,828

Weighted average shares of Class A common stock outstanding - diluted 168,378 168,725 164,504

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Earnings per share of Class A common stock - diluted $ 0.20 $ 0.14 $ 0.24

For the year ended December 31, 2023, the reallocation of net income attributable to non-controlling interests from the assumed exchange of Class B common stock has been excluded along with the dilutive effect of Class B common stock to the weighted average shares of Class A common stock outstanding – dilutive, as they were antidilutive.

For the year ended December 31, 2024 there were no shares of Class B common stock outstanding as all outstanding shares of Class B common stock (together with the relevant limited liability units) were exchanged for Class A common stock in the first quarter of 2023.

For the years ended December 31, 2025 and 2024 there were no shares of Class B common stock outstanding as all outstanding shares of Class B common stock (together with the relevant limited liability units) were exchanged for Class A common stock in the first quarter of 2023.

Equity-Based Compensation

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Restricted Stock Units

During the years ended December 31, 2024, 2023 and 2022 the Company granted 1,559,317 , 413,873 and 727,001 restricted stock units (“RSUs”), respectively, to certain employees, officers and directors of the

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

During the years ended December 31, 2025, 2024 and 2023 the Company granted 2,119,962 , 1,559,317 , and 413,873 restricted stock units (“RSUs”), respectively, to certain employees, officers and directors of the Company.

The RSUs had grant date fair values ranging from $ 3.26 to $ 10.34 , $ 4.40 to $ 15.39 , and $ 14.45 to $ 28.26 , respectively, during the years ended December 31, 2025, 2024 and 2023.

The RSUs generally vest ratably over either 3 or 4 years, except for some director, officer and employee grants which immediately vest or vest over one year , and for retention grants which vest over 2 to 3 years.

There were a limited number of awards with immediate vesting.

The RSUs generally vest ratably over 3 years, except for director grants which vest over one year , and for retention grants which vest over 2 to 3 years.

Activity under the 2021 Incentive Plan for RSUs was as follows:

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

Stock Units Weighted Average Price

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During the years ended December 31, 2025, 2024 and 2023, the Company granted an aggregate of 941,257 , 324,099 , and 205,585 Performance Stock Units (“PSUs”), respectively, to certain executives.

The PSUs granted during 2023 and 2022 cliff vest after 3 years upon meeting certain revenue and gross profit targets.

The PSUs granted during 2024 cliff vest after 3 years upon meeting certain revenue and adjusted EPS targets and contain certain modifiers which could increase or decrease the ultimate number of Class A common stock issued to the executives.

The PSUs granted during 2023 cliff vest after 3 years upon meeting certain revenue and gross profit targets.

The PSUs granted during 2024 and 2025 cliff vest after 3 years upon meeting certain revenue and adjusted EPS targets and contain certain modifiers which could increase or decrease the ultimate number of Class A common stock issued to the executives.

The PSUs were valued using the market value of the Class A common stock on the grant date ranging from $ 4.59 to $ 5.34 , $ 13.01 to $ 15.39 , and $ 26.55 to $ 28.26 , respectively, during the years ended December 31, 2025, 2024 and 2023.

Activity under the 2021 Incentive Plan for PSUs was as follows:

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

Stock Units Weighted Average Price

1 unchanged sentence

Granted 205,585 $ 27.75

Vested ( 67,101 ) $ 11.86

Forfeited ( 101,323 ) $ 13.08

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Outstanding, December 31, 2025 1,321,520 $ 9.20

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

During the years ended December 31, 2025, 2024 and 2023, the Company recognized $ 9.9 million, $ 14.2 million, and $ 20.9 million, respectively, in equity-based compensation.

2 unchanged sentences

Secondary Offerings

On December 6, 2022, the Company completed a secondary offering consisting of 27,900,000 shares of Class A common stock offered by the selling stockholders and 2,000,000 shares of Class A common stock offered by the Company.

The Company used the proceeds of the sale of Class A common stock together with cash on hand, to make a payment of $ 58.0 million to terminate the Tax Receivable Agreement (“TRA”).

See Note 17 - Payable Pursuant to the Tax Receivable Agreement.

On March 10, 2023, the selling stockholders, which consisted of certain entities controlled by the Company’s founder, completed a secondary offering consisting of 24,501,650 shares of Class A common stock.

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The Company did not receive any proceeds from the sale of shares of our Class A common stock by the selling stockholders in this offering.

As of December 31, 2025 and 2024, there were no shares of Class B common stock nor LLC Interests outstanding, and no shares of Class B common stock are currently issuable.

Shoals Parent LLC Ownership

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Effective December 31, 2023, Shoals Parent LLC merged with and into Shoals Intermediate Parent with Shoals Intermediate Parent as the surviving corporation.

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

Prior to the Company owning 100 % of Shoals Parent LLC, the remaining interest in Shoals Parent LLC was held by the Continuing Equity Owners, who could exchange at each of their respective options, in whole or in part, from time to time, their LLC Interests (along with an equal number of shares of Class B common stock (which shares were then immediately canceled)) for cash or newly issued shares of our Class A common stock.

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Common Stock Economic and Voting Rights

Holders of Class A common stock and Class B common stock (if any shares are outstanding) are entitled to one vote per share and, except as otherwise required, vote together as a single class on all matters on which stockholders generally are entitled to vote.

Holders of Class B common stock (if any shares are outstanding) are not entitled to receive dividends and will not be entitled to receive any distributions upon the liquidation, dissolution or winding up of the Company.

Shares of Class B common stock were only issuable to the extent necessary to maintain the one -to-one ratio between the number of LLC Interests held by the Continuing Equity Owners and the number of shares of Class B common stock held by the Continuing Equity Owners.

As of December 31, 2024 and 2023, there were no shares of Class B common stock nor LLC Interests outstanding, and no shares of Class B common stock are currently issuable.

Shares of Class B common stock were transferable only together with an equal number of LLC Interests.

Holders of Class A common stock are entitled to one vote per share and, except as otherwise required, vote together as a single class on all matters on which stockholders generally are entitled to vote.

Share Repurchase Program and Accelerated Share Repurchase Agreement

On June 11, 2024, the Company announced a share repurchase program (the “Repurchase Program”) authorizing the repurchase of up to $ 150.0 million of the Company’s Class A common stock, with an estimated completion date of December 31, 2025.

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

completion date of December 31, 2025.

Under the Repurchase Program, the Company is authorized to repurchase shares of Class A common stock through open market purchases, privately-negotiated transactions, accelerated share repurchases or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Exchange Act.

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As of June 12, 2024, the $ 25.0 million payment to Jefferies LLC was recognized as a reduction to stockholders’ equity, consisting of a $ 15.0 million increase in treasury stock, which reflected the value of the initial 2,202,643 shares received upon initial settlement, and a $ 10.0 million decrease in additional paid-in capital, which reflected the value of the shares then held by Jefferies LLC and pending final settlement of the ASR.

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

On August 5, 2024, in final settlement of the ASR, Jefferies LLC delivered an additional 1,705,744 shares of the Company’s Class A common stock to the Company.

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Upon final settlement the value of the shares was reclassified from Additional Paid-in Capital to Treasury Stock.

The Company did not repurchase any shares of its common stock under the Repurchase Program during the twelve months ended December 31, 2025.

Non-Controlling Interests

As of the first quarter of 2023, the Company owned 100 % of Shoals Parent LLC.

The following table summarizes the effects of the changes in ownership in Shoals Parent LLC on equity for the years ended December 31, 2023, and 2022.

There was no activity for the year ended December 31, 2024.

The following table summarizes the effects of the changes in ownership in Shoals Parent LLC on equity for the year ended December 31, 2023.

There was no activity for the years ended December 31, 2025 or 2024.

Year ended December 31,

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Transfers to non-controlling interests:

Decrease as a result of the Organizational Transactions — —

Increase as a result of newly issued LLC Interests in IPO — —

Increase as a result of activity under equity-based compensation plan 687

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Issuance of Additional LLC Interests

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

Under the limited liability company agreement of Shoals Parent LLC (“LLC Agreement”), the Company was required to cause Shoals Parent LLC to issue additional LLC Interests to the Company when the Company issued additional shares of Class A common stock.

1 unchanged sentence

The Company caused Shoals Parent LLC to issue a number of LLC Interests equal to the number of shares of Class A common stock issued such that, at all times, the number of LLC Interests held by the Company was equal to the number of outstanding shares of Class A common stock.

During the years ended December 31, 2024, 2023 and 2022, the Company caused Shoals Parent LLC to issue to the Company a total of zero , 601,518 and 480,116 LLC Interests, respectively, for the vesting of awards granted under the 2021 Long-Term Incentive Plan.

During the year ended December 31, 2023, the Company caused Shoals Parent LLC to issue to the Company a total of 601,518 LLC Interests, for the vesting of awards granted under the 2021 Long-Term Incentive Plan.

There were no issuance of LLC Interests for the years ended December 31, 2025 and 2024.

On July 1, 2023, the Company contributed 100 % of its LLC Interests in Shoals Parent LLC to its wholly-owned subsidiary, Shoals Intermediate Parent.

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Distributions for Taxes

As a limited liability company (treated as a partnership for income tax purposes), Shoals Parent LLC did not incur significant federal, state or local income taxes, as these taxes were primarily the obligations of its

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

As authorized by the LLC Agreement, Shoals Parent LLC was required to distribute cash, to the extent that Shoals Parent LLC had cash available, on a pro rata basis, to its members to the extent necessary to cover the members’ tax liabilities, if any, with respect to each member’s share of Shoals Parent LLC taxable earnings.

Shoals Parent LLC made such tax distributions to its members quarterly, based on the single highest marginal tax rate applicable to its members applied to projected year-to-date taxable income.

During the years ended December 31, 2024, 2023 and 2022, tax distributions to non-controlling LLC Interests holders were zero , $ 2.6 million and $ 7.8 million, respectively.

During the year ended December 31, 2023, tax distributions to non-controlling LLC Interests holders were $ 2.6 million.

There was no tax distribution activity for the years ended December 31, 2025 and 2024.

Other Distributions

1 unchanged sentence

If the Company authorized a distribution, such distribution was made to the members of the LLC (including the Company) pro rata in accordance with the percentages of their respective LLC units.

The Company has operating leases for real estate related to manufacturing operations and equipment agreements.

The Company has operating leases for real estate related to manufacturing operations.

The following table summarizes the balances as it relates to leases at the end of the period (in thousands):

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

Location on the Consolidated Balance Sheets 2025 2024

Right-of-use asset Other assets $ 1,786 $ 2,871

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 Other long-term liabilities 1,235 2,116

Lease liability, net current portion Right-of-use operating lease liabilities 38,661 1,235

Total lease liability $ 41,878 $ 2,116

The Company entered into a lease agreement for a new manufacturing facility in order to expand the operational footprint of the Portland, Tennessee manufacturing facilities.

The accounting commencement date for the lease of this new and expanded facility was September 1, 2025.

The Company determines if an arrangement is a lease at its inception.

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Lease expense for these leases is recognized on a straight-line basis over the lease term.

Operating lease arrangements are comprised primarily of real estate and equipment agreements for which the ROU assets are included in other assets and the corresponding lease liabilities, depending on their maturity, are included in accrued expenses and other or other long-term liabilities in the consolidated balance sheets.

The Company also elected to apply the practical expedient to consider non-lease components as a part of the lease.

Operating lease arrangements are comprised primarily of real estate and equipment agreements.

The Company elected to apply the practical expedient to consider non-lease components as a part of the lease.

The Company’s leases contain certain non-lease components for common area maintenance which are variable on a month to month basis and as such recorded as a variable lease expense as incurred.

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

The details of the Company’s operating leases are as follows (in thousands):

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The following table presents the maturities of lease liabilities as of December 31, 2025 (in thousands):

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

For the Year Ended December 31, Operating Leases

Thereafter 30,388

Total lease payments 58,844

8 unchanged sentences

Operating cash flows from operating leases $ 6,275 $ 1,610

On February 7, 2024 the Company entered into a lease agreement.

The commencement date of the lease is February 7, 2024 and the rent commencement date is the earlier of (i) the date upon which a certificate of occupancy is issued to the tenant, or (ii) August 1, 2024.

Under the terms of the lease agreement, the lease term is 140 months from the rent commencement date, with the right to extend the lease term for up to three periods of five years each.

Annualized rent during the first 12 months following the rent commencement date is $ 4.9 million, with annual escalators throughout the remaining lease term.

As of the date of this annual report, the Company has begun to pay monthly rent, consistent with the terms of the agreement.

The related ROU asset and lease liability for this agreement have not yet been recorded as the Company has not yet obtained the right to direct to use of the identified asset, per ASC 842, Leases.

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

Non-cash investing activities:

Right of use operating lease assets obtained in exchange for lease obligations $ 46,168 $ —

Right of use operating lease liabilities obtained in exchange for lease assets $ 41,336 $ —

Commitments and Contingencies

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On May 4, 2023, the Company filed a patent infringement complaint with the U.S.

International Trade Commission (“ITC”) against Hikam America, Inc., a corporation based in Chula Vista, California, and its related foreign entities (together, “Hikam”), and Voltage LLC, a limited liability company based in Chapel Hill, North Carolina, and a related foreign entity (together, “Voltage”).

International Trade Commission (“ITC”) against Hikam America, Inc., a corporation based in Chula Vista,

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

California, and its related foreign entities (together, “Hikam”), and Voltage LLC, a limited liability company based in Chapel Hill, North Carolina, and a related foreign entity (together, “Voltage”).

The complaint primarily requests that the ITC (i) investigate unlawful imports of certain photovoltaic connectors and components that the Company alleges infringe on two valid and enforceable patents owned by the Company related to improved connectors for solar panel arrays and (ii) issue a limited exclusion order and a cease and desist order against the Hikam respondents and the Voltage respondents to bar them from importing, marketing, distributing, selling, offering for sale, licensing, advertising, transferring, or otherwise using the infringing photovoltaic connectors and components in and into the United States.

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However, on January 14, 2025, the ITC reversed the Administrative Law Judge’s Final Initial Determination and issued a Notice of a Commission Final Determination Finding No Violation of Section 337.

The Company appealed the ITC’s reversal to the Federal Circuit on February 11, 2025.

The Company appealed the ITC’s decision to the Federal Circuit on February 11, 2025.

The appeal is pending.

On February 11, 2026, the Company and Hikam filed a voluntary, joint-dismissal that will end the legal proceedings as they pertain to Hikam.

The Company’s case against Voltage remains stayed pending a ruling in the appeal.

The 2025 IP Litigations.

On January 9, 2025, the Company filed a new patent infringement complaint at the ITC against Voltage.

On January 9, 2025, the Company filed a patent infringement complaint at the ITC against Voltage.

This complaint cites two new patents (the ‘375 and ‘376 Patents) that cover the Company’s BLA solutions.

Also on January 9, 2025, the Company filed a complaint against Voltage in the U.S.

District Court for the Middle District of North Carolina on the same subject matter.

These complaints seek injunctive relief and, in district court, damages for reasonable royalty and lost profits.

The Company intends to vigorously pursue these actions.

However, at this stage, the Company is unable to predict the outcome or impact on its business and financial results.

District Court for the Middle District of North Carolina “(the District Court case”) on the same subject matter.

These complaints seek injunctive relief and, in the District Court case, damages for reasonable royalty and lost profits.

On February 6, 2026, an Administrative Law Judge at the ITC issued an Initial Determination finding that Voltage’s products infringed on Shoals ‘375 and ‘376 patents.

The ITC is expected to issue a Final Determination by June 2026.

In the District Court case, a bench trial on certain equitable defenses raised by Voltage is scheduled for February 26-27 of 2026.

A jury trial to resolve Shoals’ infringement claims and other remaining matters is scheduled for August 2026.

On February 17, 2026, Shoals filed a motion for preliminary injunction seeking additional, immediate relief to prevent the alleged infringing activities from continuing while the case is pending.

Voltage’s response to this motion is due March 10, 2026.

The Company is vigorously pursuing these 2023 IP Litigations and the 2025 IP Litigations.

1 unchanged sentence

The Company is accounting for these matters as a gain contingency, and will record any such gain in future periods if and when the contingency is resolved, in accordance with ASC 450, Contingencies.

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

Wire Insulation Shrinkback Litigation

2 unchanged sentences

The Company filed an amended complaint on December 4, 2024.

The amended complaint alleges that the Company suffered damages caused by defective wire Prysmian sold to the Company from approximately 2019 through approximately 2022.

The amended complaint alleges that the Company suffered damages caused by defective wire Prysmian

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

sold to the Company from approximately 2019 through approximately 2022.

The amended complaint alleges that the wire at issue in the litigation has presented unacceptable levels of wire insulation shrinkback.

The amended complaint includes, among other causes of action, product liability, breach of contract, breach of warranty, indemnity, and negligence claims.

Mediation in this case is ongoing.

The Company seeks compensatory and punitive damages, recovery of all costs and expenses incurred by the Company in connection with the identification, repair and replacement of the Prysmian wire alleged to be defective, and other legal and equitable relief.

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The Company filed a motion to dismiss the amended complaint on February 18, 2025.

Although the Company intends to vigorously defend against these claims, there is no guarantee that the Company will prevail.

Plaintiffs filed an opposition to the motion to dismiss on April 21, 2025.

On September 30, the court issued its ruling on the motion to dismiss, granting it in part and denying it in part.

On January 21, 2025, Plaintiffs filed a motion for class certification, appointment of class representatives, and approval of class counsel.

Defendants’ opposition to Plaintiffs’ motion is due April 6, 2026.

Plaintiffs’ reply brief in support of their motion is due May 21, 2026.

In December 2025 and January 2026, the Company and the Plaintiffs engaged in court-ordered mediation.

This case is ongoing.

Although the Company intends to continue to vigorously defend against these claims, there is no guarantee that the Company will prevail.

Accordingly, the Company is unable to determine the ultimate outcome of this consolidated lawsuit or determine the amount or range of potential losses associated with the consolidated lawsuit.

2 unchanged sentences

Derivative Litigation

On May 16, 2024, a derivative shareholder action was filed against certain current and former officers and directors of the Company in the United States District Court for the Middle District of Tennessee, Nashville Division, captioned Corwin v.

On May 16, 2024, a derivative stockholder action was filed against certain current and former officers and directors of the Company in the United States District Court for the Middle District of Tennessee, Nashville Division, captioned Corwin v.

Forth, et al .

2 unchanged sentences

The Company is named as a nominal defendant only.

On July 24, 2024, another derivative shareholder action was filed against certain current and former officers and directors of the Company in the same court, captioned Ouellet v.

On July 24, 2024, another derivative stockholder action was filed against certain current and former officers and directors of the Company in the same court, captioned Ouellet v.

Whitaker et al .

2 unchanged sentences

The Company is named as a nominal defendant only.

On August 21, 2024, these derivative shareholder actions were consolidated into a single action captioned In re Shoals Technologies Group, Inc.

Derivative Litigation .

Although the Company intends to vigorously defend against these claims, there is no guarantee that the Company will prevail.

Accordingly, the Company is unable to determine the ultimate outcome of this lawsuit or determine the amount or range of potential losses associated with the lawsuit.

This consolidated case is currently stayed pending the outcome of a motion to dismiss that will be filed in the securities matters referenced above.

On August 21, 2024, these derivative stockholder actions were consolidated into a single action captioned In re Shoals Technologies Group, Inc.

Derivative Litigation (the “Tennessee Derivative Action”).

On March 26, 2025, another derivative stockholder action was filed against certain current and former officers and directors of the Company in the same court as the consolidated action, captioned Norman v.

Whitaker, et al.

The complaint asserts, among others, claims for violations of Sections 14(a) and 20(a) of the Exchange Act, breach of fiduciary duty, insider trading, and unjust enrichment, all of which relate to the wire insulation shrinkback matter.

The complaint seeks unspecified monetary damages, restitution, the adoption of certain governance reforms, recovery of fees and costs, and other relief that the court may find appropriate.

The Company is named as a nominal defendant only.

On April 11, 2025, the Norman action was consolidated with the Tennessee Derivative Action.

On January 19, 2026, the parties in the Tennessee Derivative Action filed a stipulation to stay the Tennessee Derivative Action until 60 days following the conclusion of the January 2026 mediation in the Securities Litigation.

On December 2, 2025, another derivative stockholder action was filed against certain current and former officers and directors of the Company in the Delaware Court of Chancery, captioned Gipsman v.

Whitaker, et al.

(the “Delaware Derivative Action”).

The Delaware Derivative Action asserts claims for breach of fiduciary duty, insider trading, unjust enrichment, and corporate waste, all of which relate to the wire insulation shrinkback matter.

The complaint seeks unspecified monetary damages, restitution, the adoption of certain governance reforms, recovery of fees and costs, and other relief that the court may find appropriate.

The Company is named as a nominal defendant only.

Although the Company intends to continue to vigorously defend against these claims, there is no guarantee that the Company will prevail.

Accordingly, the Company is unable to determine the ultimate outcome of the derivative litigation or determine the amount or range of potential losses associated with the lawsuit.

The Company provides surety bonds to various parties as required for certain transactions initiated during the ordinary course of business to guarantee the Company’s performance in accordance with contractual or legal obligations.

1 unchanged sentence

Employee Benefit Plan

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

The Company has a 401(k) retirement plan for substantially all of its employees based on certain eligibility requirements.

8 unchanged sentences

Income before income taxes $ 48,518 $ 37,863 $ 54,935

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

The components of income tax expense are as follows (in thousands):

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Income tax expense $ 14,944 $ 13,736 $ 12,274

The differences between income taxes expected at the U.S.

federal statutory income tax rate and the reported income tax expense are summarized as follows (in thousands):

A reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory U.S.

federal income tax rate to income before income taxes after the prospective adoption of ASU 2023-09 is as follows:

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

Year Ended December 31,

2024 2023 2022

Federal Statutory Tax Rate $ 10,189 21.0 %

State and Local Income Taxes, Net of Federal Income Tax Effect (a)

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 %

(a) The state taxes in Texas made up the majority (greater than 50 percent) of the tax effect in this category.

A reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory U.S.

federal income tax rate to income before income taxes prior to the adoption of ASU 2023-09 is as follows:

Year Ended December 31,

federal income taxes at statutory rate $ 7,951 $ 11,537

4 unchanged sentences

Non-controlling interests — ( 564 )

Termination of TRA — — ( 15,905 )

Termination of Up-C structure — ( 2,347 )

Remeasurement of deferred taxes — — ( 6,775 )

Change in valuation allowance 2,112 988

23 unchanged sentences

Net deferred tax asset $ 438,027 $ 454,160

(1)Goodwill represents the excess of tax-deductible goodwill over book goodwill of of $ 1,795 million as of December 31, 2024, and $ 1,930 million as of December 31, 2023, which is mainly related to the step up in tax basis resulting from exchanges of LLC Interests for shares of Class A common stock

(1) Goodwill represents the excess of tax-deductible goodwill over book goodwill of $ 1,658 million as of December 31, 2025, and $ 1,795 million as of December 31, 2024, which is mainly related to the step-up in tax basis resulting from exchanges of LLC Interests for shares of Class A common stock.

During the year ended December 31, 2023, the Company acquired the remaining non-controlling interest in Shoals Parent LLC and contributed 100 % of its interest to its wholly-owned subsidiary Shoals Intermediate Parent, thereby eliminating the Company’s Up-C structure.

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If not utilized, $ 27.0 million of the state net operating loss can be carried forward indefinitely and $ 94.7 million will expire between 2033-2045.

As of December 31, 2024, the Company determined that a valuation allowance related to its state net operating loss carryforwards and goodwill amortization in the amount of $ 2.1 million was required, as it is more-likely-than-not these deferred tax assets would not be realized.

In the prior year, the Company recorded a valuation allowance related to its state net operating loss carryforwards and goodwill amortization in the amount of $ 2.1 million, as it is more likely than not these deferred tax assets would not be realized.

As of December 31, 2025, the Company’s assessment of the valuation allowance resulted in an insignificant adjustment in the current year.

The valuation allowance mainly derives from states with shortened net operating loss carryforward periods.

Additionally, since goodwill amortization is the primary contributor to the net operating losses, it must be considered in the analysis as the net operating loss carryforwards will expire before the benefit of the goodwill amortization is fully realized in certain states.

On December 31, 2023, the Company determined that a valuation allowance related to land and other non-

Additionally, since goodwill amortization is the primary contributor to the net operating losses, it must be considered in the analysis, as the net operating loss carryforwards will expire before the benefit of the goodwill amortization is fully realized in

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

amortizable intangibles in the amount of $ 1.0 million was required, as it is more-likely-than-not these deferred tax assets would not be realized.

certain states.

As of December 31, 2023, the Company determined that a valuation allowance related to land and other non-amortizable intangibles in the amount of $ 1.0 million was required, as it is more likely than not these deferred tax assets would not be realized.

As of December 31, 2025, an insignificant amount of the valuation allowance was released due to the disposal of land.

The federal and state valuation allowance is $ 0.9 million and $ 2.1 million, respectively, for a total valuation allowance of $ 3.0 million as of December 31, 2025.

In August 2022, the U.S.

President signed into law the Inflation Reduction Act of 2022 (the “IRA”), which revised U.S.

tax law by, among other things, including a new corporate alternative minimum tax (the “CAMT”) of 15% on certain large corporations, imposing a 1% excise tax on stock buybacks, and providing incentives to address climate change, including the introduction of advanced manufacturing production tax credits.

The provisions of the IRA are generally effective for tax years beginning after 2022.

Given the complexities of the IRA, including recently issued guidance from the Internal Revenue Service and regulations from the U.S.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law.

OBBBA includes significant changes to U.S.

federal income tax law, including modifications to the 2017 Tax Cuts and Jobs Act and 2022 Inflation Reduction Act provisions.

The law made changes to certain business deductions and credits, and new limitations and incentives affecting capital investment and clean energy.

As of December 31, 2025, OBBBA had minimal impact on the Company’s tax position.

Given the complexities, including recently issued guidance from the Internal Revenue Service and regulations from the U.S.

Treasury Department, we will continue to monitor these developments and evaluate the potential future impact to our results of operations.

As of December 31, 2024 and 2023, the Company has recorded $ 1.0 million of gross unrecognized tax benefits inclusive of interest and penalties, all of which, if recognized, would favorably impact the effective tax rate.

As of December 31, 2025 and 2024, the Company has recorded $ 0.7 million and $ 1.0 million, respectively, of gross unrecognized tax benefits inclusive of interest and penalties, all of which, if recognized, would favorably impact the effective tax rate.

We do not expect a significant change in our uncertain tax benefits in the next twelve months.

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federal and state tax authorities for years beginning after 2021 and 2020, respectively.

Payable Pursuant to the Tax Receivable Agreement

The Company had a TRA with the Founder, a “related party,” and a former equity owner of Shoals Investment CTB (the “TRA Owners”) that provided for the payment by the Company to the TRA Owners (or their permitted assignees) of 85 % of the amount of the benefits, if any, that the Company actually realized or was deemed to realize as a result of (i) the Company’s allocable share of existing tax basis acquired in connection with organization transactions associated with the IPO (including Blocker’s share of existing tax basis) and increases to such allocable share of existing tax basis, (ii) certain increases in the tax basis of assets of Shoals Parent LLC and its subsidiaries resulting from purchases or exchanges of LLC Interests, and (iii) certain other tax benefits related to the Company entering into the TRA, including those attributable to payments made under the TRA.

These contractual payment obligations were obligations of the Company and not of Shoals Parent LLC.

The Company’s payable pursuant to the TRA was determined on an undiscounted basis in accordance with ASC 450, Contingencies, since the contractual payment obligations were deemed to be probable and reasonably estimable.

For purposes of the TRA, the benefit deemed realized by the Company was computed by comparing the actual income tax liability of the Company (calculated with certain assumptions) to the amount of such taxes that the Company would have been required to pay had there been no increase to the tax basis of the assets of Shoals Parent LLC as a result of the purchases or exchanges, and had the Company not entered into the TRA.

When estimating the expected tax rate to use in order to determine the tax benefit expected to be recognized from the Company’s increased tax basis as a result of exchanges of LLC Interests by the TRA Owners, the Company continuously monitored changes in its overall tax posture, including changes resulting from new legislation and changes as a result of new jurisdictions in which the Company was subject to tax.

On November 29, 2022, the Company entered into an amendment to the TRA (the “TRA Amendment”), dated as of January 29, 2021, pursuant to which the parties thereto agreed to grant the Company a right to terminate the TRA until December 31, 2022 (the “TRA Termination Right”) in exchange for a termination

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

consideration of $ 58.0 million, payable in cash.

The Company reassessed the liability related to the payable pursuant to the TRA at the TRA Amendment date and concluded it was probable that the expected payments related to the payable pursuant to the TRA had changed.

As a result of this change, the Company remeasured the payable pursuant to the TRA to $ 58.0 million on the TRA Amendment date, resulting in a gain on the termination of the TRA of $ 110.9 million.

As part of the evaluation to determine if the gain should be recognized as income in the consolidated statement of operations or a stockholder contribution the Company concluded the termination of the TRA was negotiated in an arm’s length transaction with the majority owner of the TRA, a third party, and both the third party and the related party received the same value based upon ownership percentage, and therefore, the gain should be recorded in the consolidated statement of operations.

The Company exercised its TRA Termination Right, and the TRA was terminated on December 6, 2022.

The following table reflects the changes to the Company’s payable pursuant to the TRA (in thousands).

Following the year ended December 31, 2022, there was no activity or balance related to the TRA for the years ended December 31, 2024 and 2023.

The table below provides the updated requirements of ASU 2023-09 for cash paid for income taxes, net of refunds.

Year Ended December 31,

Beginning balance $ 156,374

Additions to TRA:

Exchange of LLC Interests for Class A common stock 7,761

Adjustment for change in estimated effective income tax rate 6,675

Adjustment related to TRA termination ( 112,810 )

Early termination payment of TRA ( 58,000 )

Payable pursuant to TRA $ —

Cash paid for income taxes, net of refunds

State and Local

Minnesota ( 10 )

Tennessee ( 173 )

Total cash paid during the period for income taxes $ ( 183 )

Revenue Recognition

2 unchanged sentences

Revenue by product type is disaggregated between system solutions and components.

System solutions are contracts under which the Company provides multiple products typically in connection with the design and specification of an entire EBOS system.

System solutions are contracts under which the Company provides multiple products typically in connection

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

with the design and specification of an entire EBOS system.

Components represents sales of individual components.

5 unchanged sentences

Total revenue $ 475,331 $ 399,208 $ 488,939

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

Contract Balances

5 unchanged sentences

Contract assets Other assets $ — $ 4,251

Contract liabilities Accrued expenses and other $ 1,811 $ —

Unbilled receivables Unbilled receivables $ 22,133 $ 20,834

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The changes in unbilled receivables relate to fluctuations in the timing of billings for the Company’s revenue recognized over-time.

As of December 31, 2022, billed accounts receivable and unbilled receivables were $ 48.6 million and $ 16.7 million, respectively.

Certain contracts contain retainage provisions.

3 unchanged sentences

The changes in retainage relate to fluctuations in the timing of retainage billings and achievement of specified milestones.

As of December 31, 2022, retainage was $ 2.0 million.

For certain contracts, we provide customers with incentives upon entering into multi-year agreements or volume specific commitments.

Any up-front incentives to customers that are not made in exchange for distinct goods and services are capitalize as a contract asset within other assets, which are subsequently recognized as a reduction to revenue over the term of the customer arrangements.

Any up-front incentives to customers that are not made in exchange for distinct goods and services are capitalized as a contract asset within other assets, which are subsequently recognized as a reduction to revenue over the term of the customer arrangements.

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

The Company also receives deferred revenue in the form of customer deposits.

5 unchanged sentences

Rebates are typically paid within three to four months .

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

Segment Reporting

The Company is organized and operates as one reportable segment, which carries out business activities related to the design, development, manufacture and marketing of products and services for EBOS solutions and components.

The Company is organized and operates as one operating and reportable segment, which carries out business activities related to the design, development, manufacture and marketing of products and services for EBOS solutions and components.

The Company’s chief operating decision maker (“CODM”), the Chief Executive Officer, reviews operating results including discrete financial information and profitability metrics at a consolidated entity level for purposes of making resource allocation decisions and for evaluating financial performance.

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Non-operating income/(expense) (1) ( 7,867 ) ( 13,309 ) ( 24,100 )

( 13,309 ) ( 24,100 ) 85,670

Income tax expense ( 14,944 ) ( 13,736 ) ( 12,274 )

Net income $ 33,574 $ 24,127 $ 42,661

(1) Consists of non-operating expenses included on the consolidated income statements which may include interest expense, interest income, payable pursuant to the tax receivable agreement adjustment, and gain on termination of tax receivable agreement.

(1) Consists of non-operating expenses included on the consolidated income statements which includes interest expense, interest income, gains and losses on the disposal of assets, and foreign currency gains and losses.

All of the Company's long-lived tangible assets, as well as the Company's operating lease right-of-use assets recognized on the Consolidated Balance Sheets were located within the United States.

Shoals Technologies Group, Inc.

Notes to Consolidated Financial Statements

Subsequent Events

On February 20, 2026, the U.S.

Supreme Court invalidated the current U.S.

presidential administration's tariff measures after concluding that the International Emergency Economic Powers Act did not authorize their imposition.

It is uncertain how future repercussions of the ruling and other changes in trade policy would impact our operations, supply chain, and cash flow.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data