Nextracker Reports Q2 FY25 Financial Results

About this update from Nextpower Inc.

Reaffirms FY25 Revenue Outlook and Raises FY25 Profit Outlook FREMONT, Calif. --(BUSINESS WIRE)-- 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. View source version on businesswire.com : https://www.businesswire.com/news/home/20241030347227/en/ Investors, Financial Media Mary Lai VP, IR & Financial Communications [email protected] Media Kristan Kirsh SVP, Global Marketing [email protected] Source: Nextracker

View stock analysis, news, and events for Nextpower Inc.