Shoals Technologies saw a notable uptick in early trading after releasing two market-moving items in quick succession: an agreement to merge with ARRAY Technologies and third-quarter financial results that outperformed Wall Street expectations. In pre-open trading the stock rose 5.3% as investors digested the combination and the stronger-than-expected operational performance.
The merger is structured as an all-stock transaction under which Shoals shareholders will receive 1.6931 shares of ARRAY for each Shoals share they hold. Upon closing, Shoals investors are expected to own roughly 65% of the combined company. The closing target for the deal is the first quarter of 2027.
On the earnings side, Shoals reported adjusted earnings per share of $0.14 for the third quarter, beating analysts' consensus of $0.12. Revenue for the quarter was $195.3 million, a 43.8% increase year over year and well above the Street's approximate $162 million forecast. Management also revised its full-year 2026 revenue outlook upward to a range of $665 million to $685 million and provided Q4 revenue guidance between $165 million and $185 million.
The company indicated continued strength in demand, with backlog and awarded orders totaling $791.7 million as of September 30, 2026. That backlog figure represents nearly 10% growth compared with the prior-year period and supports the raised revenue outlook for the year.
Management described the strategic logic for the merger as a pairing of complementary product suites: ARRAY's expertise in solar trackers and mounting systems combined with Shoals' electrical balance-of-system offerings. The companies expect the combined business to present a more complete solution set for customers in utility-scale solar and battery storage.
Pro forma projections provided by management put 2027 revenue for the combined entity in a range of $2.2 billion to $2.4 billion, with adjusted EBITDA estimated between $410 million and $480 million. Management has also identified more than $100 million in potential annual synergies. Shoals CEO Brandon Moss is slated to lead the merged company, providing continuity in leadership.
The broader U.S. equity market moved higher on the same day, a backdrop that coincided with the company-specific moves: the S&P 500 rose about 1.1% and the Dow Jones Industrial Average gained about 2.1% on the day.
Taken together, the merger announcement and the quarter's stronger results constituted a near-term catalyst for Shoals shares. Investors were evaluating both the scale and scope benefits of the proposed combination and the evidence that Shoals' standalone business was accelerating ahead of expectations as it heads into the planned merger.
While the market reaction has been positive, closing of the deal remains subject to the usual conditions and timing set by the companies. The company-provided projections and synergy targets will be factors investors monitor as the transaction progresses toward its targeted first-quarter 2027 close.