NXT Nextracker Inc

Reaffirms FY25 Revenue Outlook and Raises FY25 Profit Outlook

Nextracker (Nasdaq: NXT), a global market leader of intelligent solar tracker and software solutions, today announced financial results for the second quarter of fiscal year 2025, ended September 27, 2024.

Financial Summary

(In millions, except per share)

 

 

Q2 FY25*

Q1 FY25*

Q2 FY24

Revenue

$636

$720

$573

GAAP Gross Profit

$225

$237

$149

GAAP Gross Margin

35.4%

33.0%

26.0%

GAAP Net Income

$117

$125

$81

GAAP Net Income Margin

18.5%

17.3%

14.2%

GAAP Diluted EPS

$0.79

$0.84

$0.55

 

 

 

 

Adjusted Gross Profit

$228

$241

$152

Adjusted Gross Margin

35.9%

33.5%

26.6%

Adjusted EBITDA

$173

$175

$110

Adjusted EBITDA Margin

27.2%

24.3%

19.2%

Adjusted Net Income

$145

$139

$96

Adjusted Diluted EPS

$0.97

$0.93

$0.65

*Q2 FY25 and Q1 FY25 GAAP and adjusted results include approximately $51 million and $47 million, respectively, of IRA 45X advanced manufacturing tax credit vendor rebates (45X credits). Q2 FY24 results do not include 45X credits.

 

Please refer to Nextracker’s most recent Quarterly Report on Form 10-Q and Annual Report on Form 10-K for more information on 45X credits and schedules IV and V attached to this press release for a reconciliation of non-GAAP to GAAP financial measures. Additional information can be found on the Investor Relations section of our website.

Business Highlights

• Unveiled NX Foundation Solutions at 2024 RE+ North America in Anaheim, California
• Signed 100% U.S. domestic content project contracts and accelerated planned ship date to the end of CY24
• Expanded manufacturing footprint to over 85 partner manufacturing facilities
• Inaugurated India’s first R&D Center for Solar Excellence in Hyderabad, the third global R&D center along with centers in Brazil and the U.S.

“We’re very pleased with the company’s execution, driving a record first half of fiscal year 2025 with strong demand in Q2,” said Dan Shugar, founder and CEO of Nextracker. “In the quarter, we successfully executed on the launch of our new NX Foundation Solutions portfolio. We are also pleased to report that we have received customer orders for all of our new products launched in the last year, including NX Horizon-XTR™ 1.5 all-terrain tracker, NX Horizon™ Low Carbon Tracker, NX Hail Pro-75, and NX Foundation Solutions. Finally, we accelerated our planned timeline for our 100% U.S. domestic content projects ship date from early CY25 to before the end of the current calendar year.”

“We finished Q2 with strong execution and operational discipline, driving meaningful improvements in margins, which allows us to raise our FY25 profit outlook,” said Chuck Boynton, CFO of Nextracker. “In the first half of FY25, we generated $260 million in adjusted free cash flow, bolstering our balance sheet with over $560 million of total cash and cash equivalents, bringing our total liquidity to over $1.5 billion.”

FY2025 Annual Outlook

Reaffirms FY25 revenue outlook and raises FY25 profit outlook

 

Updated Outlook

Previous Outlook

Revenue

$2.8 to $2.9 billion

$2.8 to $2.9 billion

GAAP Net Income

$378 to $408 million

$363 to $393 million

GAAP Diluted EPS

$2.50 to $2.70

$2.37 to $2.57

Adjusted EBITDA

$625 to $665 million

$600 to $650 million

Adjusted Diluted EPS

$3.10 to $3.30

$2.89 to $3.09

Adjusted EBITDA and adjusted diluted EPS exclude approximately $119 million and $0.60, respectively, for stock-based compensation, acquisition related costs and net intangible amortization.

Q2 FY2025 Earnings Call

October 30, 2024 2:00 p.m. PT / 5:00 p.m. ET Live webcast available on investors.nextracker.com

We encourage you to review our Q2 FY25 Shareholder Letter, which, along with this press release, is available on the Nextracker Investor Relations website and includes important information for Nextracker shareholders that supplements and expands on the information in this press release.

The webcast replay will be available on the Nextracker Investor Relations website following the conclusion of the event.

Upcoming Events

Nextracker leadership executives will present at the upcoming investor conferences:

Baird Global Industrial Conference – Chicago, IL

Fireside Chat November 13, 2024 8:50 a.m. PT / 11:50 a.m. ET

UBS Tech West – Scottsdale, AZ

Fireside Chat December 4, 2024 10:35 a.m. PT / 1:35 p.m. ET

Live webcasts available on investors.nextracker.com

About Nextracker

Nextracker is a leading provider of intelligent, integrated solar tracker, foundations, and software solutions used in utility-scale and ground-mounted distributed generation solar projects around the world. Our products enable solar PV power plants to follow the sun’s movement across the sky and optimize plant performance. With power plants operating in more than forty countries worldwide, Nextracker offers solar tracker technologies that increase energy production while reducing costs for significant plant ROI. For more information, please visit www.nextracker.com.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the trends for future solar adoption, the expected benefits of the Ojjo, Inc. and Solar Pile International acquisitions, the expected benefits of the NX Foundation Solutions portfolio launch and other new product launches, our domestic content capabilities, and Nextracker’s outlook for fiscal 2025 and other periods. These forward-looking statements are based on various assumptions and on the current expectations of Nextracker’s management. These statements involve risks and uncertainties that could cause the actual results to differ materially from those anticipated by these forward-looking statements, including risks and uncertainties that are described under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Nextracker’s most recent Quarterly Report on Form 10-Q, Annual Report on Form 10-K and other documents that Nextracker has filed or will file with the Securities and Exchange Commission. There may be additional risks that Nextracker is not aware of or that Nextracker currently believes are immaterial that could also cause actual results to differ from the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements. Nextracker assumes no obligation to update these forward-looking statements.

Use of Adjusted Financial Information

An explanation and reconciliation of non-GAAP financial measures to GAAP financial measures is presented in Schedules III, IV and V attached to this press release, and can be found, along with other financial information including the Earnings Presentation, on the investor relations section of our website at investors.nextracker.com.

Channels for Disclosure of Information

Nextracker intends to announce material information to the public through the Nextracker Investor Relations website investors.nextracker.com, SEC filings, press releases, public conference calls, and public webcasts. Nextracker uses these channels to communicate with its investors, customers, and the public about the company, its offerings, and other issues. As such, Nextracker encourages investors, the media, and others to follow the channels listed above and to review the information disclosed through such channels.

Schedule I

Nextracker Inc.

Unaudited condensed consolidated statements of operations and comprehensive income

(In thousands, except per share data)

 

 

Three-month periods ended

 

September 27, 2024

 

September 29, 2023

Revenue

$

635,571

 

 

$

573,357

Cost of sales

 

410,776

 

 

 

424,247

 

Gross profit

 

224,795

 

 

 

149,110

 

Selling, general and administrative expenses

 

72,127

 

 

 

47,872

 

Research and development

 

19,193

 

 

 

7,146

 

Operating income

 

133,475

 

 

 

94,092

 

Interest expense

 

3,665

 

 

 

3,646

 

Other (income) expense, net

 

(7,382

)

 

 

5,038

 

Income before income taxes

 

137,192

 

 

 

85,408

 

Provision for income taxes

 

19,928

 

 

 

3,999

 

Net income and comprehensive income

 

117,264

 

 

 

81,409

 

Less: Net income attributable to non-controlling interests and redeemable non-controlling interests

 

1,873

 

 

 

42,156

 

Net income attributable to Nextracker Inc.

$

115,391

 

 

$

39,253

 

 

 

 

 

Earnings per share attributable to Nextracker Inc. common stockholders

 

 

 

Basic

$

0.80

 

 

$

0.64

 

Diluted

$

0.79

 

 

$

0.55

 

Weighted-average shares used in computing per share amounts:

 

 

 

Basic

 

143,479

 

 

 

61,722

 

Diluted

 

149,079

 

 

 

147,141

 

Nextracker Inc.

Unaudited condensed consolidated statements of operations and comprehensive income (continued)

(In thousands, except per share data)

 

 

Six-month periods ended

 

September 27, 2024

 

September 29, 2023

Revenue

$

1,355,492

 

 

$

1,052,900

Cost of sales

 

893,257

 

 

 

790,046

 

Gross profit

 

462,235

 

 

 

262,854

 

Selling, general and administrative expenses

 

132,954

 

 

 

82,107

 

Research and development

 

35,712

 

 

 

12,775

 

Operating income

 

293,569

 

 

 

167,972

 

Interest expense

 

6,945

 

 

 

6,748

 

Other (income) expense, net

 

(2,514

)

 

 

3,070

 

Income before income taxes

 

289,138

 

 

 

158,154

 

Provision for income taxes

 

47,080

 

 

 

13,100

 

Net income and comprehensive income

 

242,058

 

 

 

145,054

 

Less: Net income attributable to non-controlling interests and redeemable non-controlling interests

 

4,967

 

 

 

85,372

 

Net income attributable to Nextracker Inc.

$

237,091

 

 

$

59,682

 

 

 

 

 

Earnings per share attributable to Nextracker Inc. common stockholders

 

 

 

Basic

$

1.66

 

 

$

1.10

 

Diluted

$

1.62

 

 

$

0.99

 

Weighted-average shares used in computing per share amounts:

 

 

 

Basic

 

142,785

 

 

 

54,070

 

Diluted

 

149,151

 

 

 

147,008

 

Schedule II

Nextracker Inc.

Unaudited condensed consolidated balance sheets

(In thousands)

 

 

As of September 27, 2024

 

As of March 31, 2024

ASSETS

Current assets:

 

 

 

Cash and cash equivalents

$

561,884

 

$

474,054

Accounts receivable, net of allowance of $4,825 and $3,872, respectively

 

357,586

 

 

382,687

Contract assets

 

360,013

 

 

397,123

Inventories

 

179,251

 

 

201,736

Other current assets

 

326,000

 

 

312,635

Total current assets

 

1,784,734

 

 

1,768,235

Property and equipment, net

 

47,158

 

 

9,236

Goodwill

 

370,613

 

 

265,153

Other intangible assets, net

 

49,283

 

 

1,546

Deferred tax assets

 

472,400

 

 

438,272

Other assets

 

44,471

 

 

36,340

Total assets

$

2,768,659

 

$

2,518,782

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

 

 

 

Accounts payable

$

406,546

 

$

456,639

Accrued expenses

 

77,139

 

 

82,410

Deferred revenue

 

236,882

 

 

225,539

Current portion of long-term debt

 

5,625

 

 

3,750

Other current liabilities

 

80,086

 

 

123,148

Total current liabilities

 

806,278

 

 

891,486

Long-term debt, net of current portion

 

140,503

 

 

143,967

Tax receivable agreement (TRA) liability

 

399,054

 

 

391,568

Other liabilities

 

140,506

 

 

99,733

Total liabilities

 

1,486,341

 

 

1,526,754

Total stockholders’ equity

 

1,282,318

 

 

992,028

Total liabilities and stockholders’ equity

$

2,768,659

 

$

2,518,782

Schedule III

Nextracker Inc.

Unaudited condensed consolidated statements of cash flows

(In thousands)

 

Six-month periods ended

 

September 27, 2024

 

September 29, 2023

Cash flows from operating activities:

 

 

 

Net income

$

242,058

 

 

$

145,054

 

Depreciation and amortization

 

3,883

 

 

 

2,020

 

Changes in working capital and other, net

 

28,686

 

 

 

105,603

 

Net cash provided by operating activities

 

274,627

 

 

 

252,677

 

Cash flows from investing activities:

 

 

 

Purchases of property and equipment

 

(14,900

)

 

 

(1,406

)

Payment for business acquisitions, net of cash acquired

 

(144,675

)

 

 

—

 

Net cash used in investing activities

 

(159,575

)

 

 

(1,406

)

Cash flows from financing activities:

 

 

 

Repayment of bank borrowings

 

(1,875

)

 

 

—

 

Net proceeds from issuance of Class A shares

 

—

 

 

 

552,009

 

Purchase of LLC common units from Yuma, Inc.

 

—

 

 

 

(552,009

)

Payment of revolver issuance cost

 

(3,715

)

 

 

—

 

TRA payment

 

(15,520

)

 

 

—

 

Distribution to non-controlling interest holders

 

(6,112

)

 

 

—

 

Net transfers to Flex

 

—

 

 

 

(8,335

)

Other financing activities

 

—

 

 

 

(26

)

Net cash used in financing activities

 

(27,222

)

 

 

(8,361

)

Net increase in cash and cash equivalents

 

87,830

 

 

 

242,910

 

Cash and cash equivalents beginning of period

 

474,054

 

 

 

130,008

 

Cash and cash equivalents end of period

$

561,884

 

 

$

372,918

 

   

 

Six-month periods ended

Adjusted free cash flow

September 27, 2024

 

September 29, 2023

Net cash provided by operating activities

$

274,627

 

 

$

252,677

 

Purchases of property and equipment

 

(14,900

)

 

 

(1,406

)

Adjusted free cash flow

$

259,727

 

 

$

251,271

 

Schedule IV

Nextracker Inc.

Reconciliation of GAAP to Non-GAAP financial measures

(In thousands, except percentages and per share data)

 

 

Three-month periods ended

 

September 27, 2024

 

September 29, 2023

GAAP gross profit & margin

$

224,795

 

 

35.4

%

 

$

149,110

 

 

26.0

%

Stock-based compensation expense

 

2,481

 

 

 

 

 

3,245

 

 

 

Intangible amortization

 

896

 

 

 

 

 

62

 

 

 

Adjusted gross profit & margin

$

228,172

 

 

35.9

%

 

$

152,417

 

 

26.6

%

 

 

 

 

 

 

 

 

GAAP operating income & margin

$

133,475

 

 

21.0

%

 

$

94,092

 

 

16.4

%

Stock-based compensation expense

 

29,885

 

 

 

 

 

18,216

 

 

 

Intangible amortization

 

1,875

 

 

 

 

 

62

 

 

 

Acquisition related costs

 

2,177

 

 

 

 

 

—

 

 

 

Adjusted operating income & margin

$

167,412

 

 

26.3

%

 

$

112,370

 

 

19.6

%

 

 

 

 

 

 

 

 

GAAP net income & margin

$

117,264

 

 

18.5

%

 

$

81,409

 

 

14.2

%

Stock-based compensation expense

 

29,885

 

 

 

 

 

18,216

 

 

 

Intangible amortization

 

1,875

 

 

 

 

 

62

 

 

 

Adjustment for taxes

 

(6,274

)

 

 

 

 

(3,656

)

 

 

Acquisition related costs

 

2,177

 

 

 

 

 

—

 

 

 

Adjusted net income & margin

$

144,927

 

 

22.8

%

 

$

96,031

 

 

16.7

%

 

 

 

 

 

 

 

 

GAAP net income & margin

$

117,264

 

 

18.5

%

 

$

81,409

 

 

14.2

%

Interest, net

 

455

 

 

 

 

 

(86

)

 

 

Provision for income taxes

 

19,928

 

 

 

 

 

3,999

 

 

 

Depreciation expense

 

1,067

 

 

 

 

 

912

 

 

 

Intangible amortization

 

1,875

 

 

 

 

 

62

 

 

 

Stock-based compensation expense

 

29,885

 

 

 

 

 

18,216

 

 

 

Acquisition related costs

 

2,177

 

 

 

 

 

—

 

 

 

Other tax related income, net

 

—

 

 

 

 

 

5,686

 

 

 

Adjusted EBITDA & margin

$

172,651

 

 

27.2

%

 

$

110,198

 

 

19.2

%

 

 

 

 

 

 

 

 

Diluted earnings per share

 

 

 

 

 

 

 

GAAP

$

0.79

 

 

 

 

$

0.55

 

 

 

Earnings per share attributable to Non-GAAP adjustments

 

0.18

 

 

 

 

 

0.10

 

 

 

Adjusted

$

0.97

 

 

 

 

$

0.65

 

 

 

 

 

 

 

 

 

 

 

Diluted shares used in computing per share amounts

 

149,079

 

 

 

 

 

147,141

 

 

 

Nextracker Inc.

Reconciliation of GAAP to Non-GAAP financial measures (continued)

(In thousands, except percentages and per share data)

 

 

Six-month periods ended

 

September 27, 2024

 

September 29, 2023

GAAP gross profit & margin

$

462,235

 

 

34.1

%

 

$

262,854

 

 

25.0

%

Stock-based compensation expense

 

6,261

 

 

 

 

 

5,171

 

 

 

Intangible amortization

 

984

 

 

 

 

 

125

 

 

 

Adjusted gross profit & margin

$

469,480

 

 

34.6

%

 

$

268,150

 

 

25.5

%

 

 

 

 

 

 

 

 

GAAP operating income & margin

$

293,569

 

 

21.7

%

 

$

167,972

 

 

16.0

%

Stock-based compensation expense

 

51,786

 

 

 

 

 

26,857

 

 

 

Intangible amortization

 

1,963

 

 

 

 

 

125

 

 

 

Acquisition related costs

 

3,657

 

 

 

 

 

—

 

 

 

Adjusted operating income & margin

$

350,975

 

 

25.9

%

 

$

194,954

 

 

18.5

%

 

 

 

 

 

 

 

 

GAAP net income & margin

$

242,058

 

 

17.9

%

 

$

145,054

 

 

13.8

%

Stock-based compensation expense

 

51,786

 

 

 

 

 

26,857

 

 

 

Intangible amortization

 

1,963

 

 

 

 

 

125

 

 

 

Adjustment for taxes

 

(15,918

)

 

 

 

 

(4,881

)

 

 

Acquisition related costs

 

3,657

 

 

 

 

 

—

 

 

 

Adjusted net income & margin

$

283,546

 

 

20.9

%

 

$

167,155

 

 

15.9

%

 

 

 

 

 

 

 

 

GAAP net income & margin

$

242,058

 

 

17.9

%

 

$

145,054

 

 

13.8

%

Interest, net

 

(837

)

 

 

 

 

1,334

 

 

 

Provision for income taxes

 

47,080

 

 

 

 

 

13,100

 

 

 

Depreciation expense

 

1,920

 

 

 

 

 

1,895

 

 

 

Intangible amortization

 

1,963

 

 

 

 

 

125

 

 

 

Stock-based compensation expense

 

51,786

 

 

 

 

 

26,857

 

 

 

Acquisition related costs

 

3,657

 

 

 

 

 

—

 

 

 

Other tax related income, net

 

—

 

 

 

 

 

5,686

 

 

 

Adjusted EBITDA & margin

$

347,627

 

 

25.6

%

 

$

194,051

 

 

18.4

%

 

 

 

 

 

 

 

 

Diluted earnings per share

 

 

 

 

 

 

 

GAAP

$

1.62

 

 

 

 

$

0.99

 

 

 

Earnings per share attributable to Non-GAAP adjustments

 

0.28

 

 

 

 

 

0.15

 

 

 

Adjusted

$

1.90

 

 

 

 

$

1.14

 

 

 

 

 

 

 

 

 

 

 

Diluted shares used in computing per share amounts

 

149,151

 

 

 

 

 

147,008

 

 

 

See the accompanying notes on Schedule V attached to this press release

Schedule V

Nextracker Inc. Notes

To supplement Nextracker’s unaudited selected financial data presented consistent with U.S. Generally Accepted Accounting Principles (“GAAP”), the Company discloses certain non-GAAP financial measures that exclude certain charges and gains, including adjusted earnings before interest, taxes, depreciation, and amortization (“Adjusted EBITDA”), adjusted gross profit, adjusted operating income, adjusted net income, adjusted diluted earnings per share, and adjusted free cash flow. These supplemental measures exclude certain legal and other charges, stock-based compensation expense and intangible amortization, other discrete events as applicable and the related tax effects. These non-GAAP measures are not in accordance with or an alternative for GAAP and may be different from non-GAAP measures used by other companies. We believe that these non-GAAP measures have limitations in that they do not reflect all the amounts associated with Nextracker’s results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Nextracker’s results of operations in conjunction with the corresponding GAAP measures. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measures. We compensate for the limitations of non-GAAP financial measures by relying upon GAAP results to gain a complete picture of the Company’s performance.

In calculating non-GAAP financial measures, we exclude certain items to facilitate a review of the comparability of the Company’s operating performance on a period-to-period basis because such items are not, in our view, related to the Company’s ongoing operational performance. We use non-GAAP measures to evaluate the operating performance of our business, for comparison with forecasts and strategic plans, for calculating return on investment, and for benchmarking performance externally against competitors. In addition, management’s incentive compensation is determined using certain non-GAAP measures. Since we find these measures to be useful, we believe that investors benefit from seeing results “through the eyes” of management in addition to seeing GAAP results. We believe that these non-GAAP measures, when read in conjunction with the Company’s GAAP financials, provide useful information to investors by offering:

• the ability to make more meaningful period-to-period comparisons of the Company’s ongoing operating results;
• the ability to better identify trends in the Company’s underlying business and perform related trend analysis;
• a better understanding of how management plans and measures the Company’s underlying business; and
• an easier way to compare the Company’s operating results against analyst financial models and operating results of competitors that supplement their GAAP results with non-GAAP financial measures.

The following are explanations of each of the adjustments that we incorporate into non-GAAP measures, as well as the reasons for excluding each of these individual items in the reconciliations of these non-GAAP financial measures:

Stock-based compensation expense consists of non-cash charges for the estimated fair value of unvested restricted share unit and stock option awards granted to employees. The Company believes that the exclusion of these charges provides for more accurate comparisons of its operating results to peer companies due to the varying available valuation methodologies, subjective assumptions, and the variety of award types. In addition, the Company believes it is useful to investors to understand the specific impact stock-based compensation expense has on its operating results.

Intangible amortization consists primarily of non-cash charges that can be impacted by, among other things, the timing and magnitude of acquisitions. The Company considers its operating results without these charges when evaluating its ongoing performance and forecasting its earnings trends, and therefore excludes such charges when presenting non-GAAP financial measures. The Company believes that the assessment of its operations excluding these costs is relevant to its assessment of internal operations and comparisons to the performance of its competitors.

The 45X Advanced Manufacturing Production Tax Credit (“45X Credit”) which was established as part of the Inflation Reduction Act (IRA), is a per-unit tax credit earned over time for each clean energy component domestically produced and sold by a manufacturer. The 45X Credit was eligible for domestic parts manufactured after January 1, 2023. The Company has executed agreements with certain suppliers to ramp up its U.S. manufacturing footprint. These suppliers produce 45X Credit eligible parts, including torque tubes, and structural fasteners, that will then be incorporated into a solar tracker. The Company has contractually agreed with these suppliers to share a portion of the credit related to Nextracker’s purchases. The Company accounts for these credits as a reduction of the purchase price of the parts acquired from the vendor and therefore a reduction of inventory until the part is sold, at which point the Company recognizes such credit as a reduction of cost of sales on the unaudited condensed consolidated statements of operations and comprehensive income. During the fourth quarter of fiscal 2024, the Company determined the amount of the 45X vendor rebates it expects to receive in accordance with the vendor contracts and recognized a cumulative reduction to cost of sales of $121.4 million related to 45X Credit vendor rebates earned on production of eligible components shipped to projects starting on January 1, 2023 through March 31, 2024. The Company believes that the assessment of its operations excluding the benefit from the vendor credits provides a more consistent comparison of its performance given the cumulative nature of the amount recorded in the fiscal fourth quarter. Beginning in the first quarter of fiscal year 2025, these 45X credit vendor rebates are not excluded from our non-GAAP financial measures.

Acquisition costs consist primarily of nonrecurring transaction costs for business acquisitions.

Adjustment for taxes relates to the tax effects of the various adjustments that we incorporate into non-GAAP measures to provide a more meaningful measure on non-GAAP net income and certain adjustments related to non-recurring settlements of tax contingencies or other non-recurring tax charges, when applicable.

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Investors, Financial Media Mary Lai VP, IR & Financial Communications Investor@nextracker.com

Media Kristan Kirsh SVP, Global Marketing Media@nextracker.com