Nextracker began trading shares on the Nasdaq exchange on February 9 under the ticker symbol NXT and at an initial public offering of $24 a share, equating to a market value of $638,400,000.

By the close of trading February 14, traders showed their Valentine’s Day love by boosting the stock to $30.90.

Going public also provides insight into the company’s business operations and financial status.

The company’s prospectus, filed with federal securities regulators on February 10, showed that the company shipped around 70 GW of solar tracker systems as of September 30 to projects on six continents.

It also reported firm orders representing executed contracts, purchase orders and volume commitment agreements for projects totaling around $2.1 billion as of the end of the year. Firm orders did not include its pipeline for projects that were in various stages of negotiations and contract execution. 

Even so, firm orders have grown since 2020, the prospectus showed. For its fiscal years ending March 31, Nextracker had firm orders of $700 million in 2020, $1.1 billion in 2021 and $1.3 billion in 2022. 

The company also said it generated revenue of $870.4 million over the six-month period ended Sept. 30, 2022. That was up from $680.2 million over the same period a year earlier. 

It generated gross profit of $114.4 million for the six months ended Sept. 30, 2022. That was up from $74.3 million a year earlier. 

And, Nextracker reported net income of $51.2 million for the six months that ended last September 30. That, too, was up from $32.6 million in the six-month period that ended Oct. 1, 2021. 

The prospectus also detailed a change to the tax credit regime for solar facilities as a result of the federal Inflation Reduction Act (IRA) of 2022.

Under the IRA, taxpayers may be entitled to a 30% investment tax credit (ITC) for projects placed in service after 2021. That increases to 40% if certain “domestic content” requirements are met. Those benefits can be reduced by up to 80%, however, if wage and apprenticeship requirements are not met. 

In addition to the ITC, taxpayers may elect instead to receive a production tax credit (PTC) for qualified solar facilities. 

For projects that enter service after 2024, the ITC and PTC are expected to be replaced by similar “technology neutral” tax credit incentives. Those incentives generally mimic the ITC and PTC. But they also require projects to satisfy a “zero greenhouse gas emissions” standard (which solar does) to qualify. The new credit regime is expected to include projects that start construction before the end of 2033, when the credits are gradually phased out.

Nextracker said that while these changes are intended to encourage solar project investments, their practical impact remains uncertain. Here’s why.

The company said that the tax credit regime that was in place prior to the IRA provided annual reductions at the beginning of 2023 and 2024. As a result, the tax regime encouraged customers to buy products prior to calendar year-end dates in order to qualify for a higher tax credit. 

And while an incentive may still exist for taxpayers to start work on facilities before certain dates, Nextracker said the tax credits themselves will no longer experience annual reductions similar to those that would have occurred at the end of 2022 and 2023 for at least 10 years.

It said the change “could have an adverse impact” on its near-term operating results. That’s because the company anticipated an increase in demand in calendar years 2022 and 2023 (and in its fiscal years 2023 and 2024) based on the previous ITC’s step-down schedule.

It warned, also, that the IRA’s domestic content requirement could increase its production costs and that it could fall short of having enough tracker products on hand to satisfy the law’s requirements. What’s more, if its customers are unable to satisfy prevailing wage and apprenticeship requirements, then the credits available to them will likely be lower than what previously was available.

“If a significant portion of our customers is unable to satisfy these requirements,” the Nextracker prospectus cautioned, “demand for our tracker products may be adversely impacted.”