Cash conversion has deteriorated sharply, evidenced by a $51.4M working capital outflow in 2026Q1 that contributed to a total free cash flow burn of $49.1M.
| Cash from Operations | -39.94M | 17.07M | 80.39M | 91.95M | 39.45M | -4.08M | 54.08M | 36.18M | 3M |
| Operating CF Margin % | - | 3.59% | 20.14% | 18.81% | 12.07% | -1.92% | 30.81% | 25.04% | 2.89% |
| Operating CF Growth % | -608.47% | -78.77% | -12.58% | 133.06% | 1066.32% | -107.55% | 49.47% | 1105.66% | - |
| Net Income | 33.56M | 33.57M | 24.13M | 42.66M | 143.01M | 3.94M | 33.77M | 25.14M | 8.65M |
| Depreciation & Amortization | 14.79M | 14.44M | 12.63M | 10.53M | 10.51M | 10.05M | 9.4M | 9.16M | 8.99M |
| Stock-Based Compensation | 10.56M | 9.9M | 14.23M | 20.86M | 16.11M | 11.29M | 8.25M | 0 | 0 |
| Deferred Taxes | 13.76M | 16.13M | 14.04M | 11.33M | 8.41M | -1.48M | 0 | 0 | 0 |
| Other Non-Cash Items | 5.54M | 2.78M | 20.97M | 67.06M | -100.57M | 6.33M | 539K | 339K | -2K |
| Working Capital Changes | -118.14M | -59.76M | -5.6M | -60.49M | -38.01M | -34.22M | 2.12M | 1.54M | -14.63M |
| Change in Receivables | -66.24M | -51.91M | 48.24M | -80.26M | -19.21M | -8.92M | -1M | -473K | -9.84M |
| Change in Inventory | -99.29M | -35.11M | -5.84M | 15.01M | -36.93M | -17.19M | -6.47M | -694K | -4.45M |
| Change in Payables | 51.86M | 43.32M | 5.64M | 5.17M | -11.03M | -3.88M | 4.25M | 4.2M | -656K |
| Cash from Investing | -32.39M | -27.95M | -8.39M | -10.85M | -3.66M | -17.04M | -3.24M | -1.72M | -1.41M |
| Capital Expenditures | -37.48M | -33.04M | -8.39M | -10.58M | -3.15M | -4.13M | -3.24M | -1.72M | -1.41M |
| CapEx % of Revenue | 7% | 6.95% | 2.1% | 2.16% | 0.96% | 1.94% | 1.84% | 1.19% | 1.35% |
| Acquisitions | 0 | 5.09M | 0 | 0 | 0 | -12.91M | 0 | 0 | 0 |
| Investments | - | - | - | - | - | - | - | - | - |
| Other Investing | 5.09M | 0 | 0 | -269K | -503K | 0 | 0 | 0 | 0 |
| Cash from Financing | 38.6M | -5.3M | -71.19M | -67.17M | -36.59M | 20.6M | -47.85M | -27.49M | -19.16M |
| Debt Issued (Net) | 40M | -5M | -42M | -59.5M | -9.14M | -119.15M | 343.75M | -13.5M | -8.5M |
| Equity Issued (Net) | -46K | -362K | -25.33M | 0 | -1.3M | 559.9M | 0 | 0 | 0 |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | -376.05M | -13.99M | -10.66M |
| Share Repurchases | -46K | -362K | -25.33M | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | -1.35M | 59K | -3.86M | -7.67M | -26.15M | -420.15M | -15.56M | 0 | 0 |
| Net Change in Cash | -33.73M | -16.19M | 804K | 13.94M | -791K | -516K | 2.99M | 6.97M | -17.57M |
| Free Cash Flow | -77.42M | -15.98M | 72M | 81.38M | 36.3M | -8.21M | 50.85M | 34.46M | 1.6M |
| FCF Margin % | -14.46% | -3.36% | 18.03% | 16.64% | 11.1% | -3.85% | 28.97% | 23.85% | 1.54% |
| FCF Growth % | -204.67% | -122.19% | -11.53% | 124.17% | 542.21% | -116.14% | 47.54% | 2059.34% | - |
| FCF per Share | -0.46 | -0.09 | 0.43 | 0.49 | 0.22 | -0.07 | 0.32 | 0.21 | 0.01 |
| FCF Conversion (FCF/Net Income) | -2.31x | 0.51x | 3.33x | 2.30x | 0.31x | -1.74x | 1.60x | 1.44x | 0.35x |
| Interest Paid | 0 | 0 | 16.29M | 23.1M | 12.84M | 10.81M | 3.03M | 0 | 0 |
| Taxes Paid | 0 | 0 | 109K | 1.32M | 786K | 1.19M | 0 | 0 | 0 |
Liquidity and working capital volatility
As reported in recent financial statements, the relationship between net income and operating cash flow has become increasingly erratic, highlighted by a 2026Q1 period where the company reported a net loss of $297K while simultaneously suffering a massive $41.4M outflow from core operations.
The extreme divergence between accounting profits and cash generation suggests that earnings are heavily influenced by non-cash items and aggressive accrual accounting. Investors should monitor whether this disconnect stems from delayed customer payments or an inability to convert project-based revenue into actual liquidity.
Based on the provided cash flow data, free cash flow has shifted from a positive $23.5M in 2023Q4 to a significant $49.1M burn in 2026Q1, reflecting a deteriorating trajectory that undermines the company's ability to self-fund its operations without external capital support.
The erratic nature of FCF margins, which swung from 36.1% in 2024Q2 to -34.9% in 2026Q1, indicates that the business model is highly sensitive to project timing and operational inefficiencies. This volatility warrants further investigation into whether the company can achieve sustainable cash flow positivity under current market conditions.
According to quarterly filings, working capital changes have become a primary source of cash depletion, with a $51.4M outflow in 2026Q1 alone, signaling significant friction in the company's ability to manage inventory and receivables effectively within its project-based revenue cycle.
The recurring negative working capital adjustments suggest that the company is struggling to align its cash inflows with the timing of its manufacturing and delivery schedules. This pattern may indicate that the company is forced to carry excessive inventory or is experiencing extended collection cycles from its EPC partners.
As indicated by the financial data, capital expenditures have remained elevated relative to revenue, with the CapEx-to-revenue ratio peaking at 11.0% in 2025Q2, suggesting that the company is continuing to invest heavily in infrastructure despite a weakening cash flow profile.
The persistence of capital spending during periods of negative operating cash flow raises questions about the necessity and return profile of these investments. Analysts should monitor whether these expenditures are essential for maintenance or if they represent speculative growth bets that the company can no longer afford.
Quick answers to the most common questions about buying SHLS stock.
Shoals Technologies Group, Inc. (SHLS) generated $17.1M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Shoals Technologies Group, Inc. (SHLS) reported negative free cash flow of $16.0M in 2025, indicating capital requirements exceeded cash from operations.
Shoals Technologies Group, Inc. (SHLS) spent $33.0M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, Shoals Technologies Group, Inc. (SHLS) spent $0.4M on share repurchases. This shows the company's commitment to returning capital to its equity investors.