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Nextracker Reports Q3 FY24 Financial Results

Achieves Record Revenue and Profits; Raises FY24 Guidance

Nextracker (Nasdaq: NXT), one of the world’s leading providers of intelligent solar tracker and software solutions, today announced financial results for the third quarter ended December 31, 2023.

Q3 FY2024 Financial Highlights:

  • Revenue $710 million, up 38% YoY
  • GAAP net income $128 million, diluted EPS $0.87
  • Adjusted EBITDA $168 million, up 168% YoY
  • Adjusted net income $142 million, adjusted diluted EPS $0.96

Q3 FY2024 Business Highlights:

  • Strong execution, significant revenue growth of 38% year-over-year, and supply chain optimization
  • Record backlog; continued demand strength globally, achieved 10-gigawatt milestone in India, Middle East, and Africa regions for projects in operation or under fulfillment
  • High-quality balance sheet with total liquidity of approximately $800 million; strong operating cash flow of $317 million and adjusted free cash flow of $314 million year-to-date

“Nextracker achieved a record third quarter, outperforming across revenue, profit and backlog, which reflects strong execution and spotlights our capability to meet customer requirements. Underpinned by product differentiation that is gaining momentum in the marketplace, we are raising our annual guidance once again,” said Dan Shugar, Founder and CEO of Nextracker. “As the world transitions to renewable energy and with solar leading new power generation, we are well positioned as the global leader in trackers, and we’re just getting started.”

Raised FY2024 Annual Guidance

  • Revenue: $2.425 billion to $2.475 billion (vs. previous $2.3 billion to $2.4 billion)
  • GAAP Net Income: $374 million to $429 million (vs. previous $237 million to $266 million) which includes an estimated $50 million to $80 million of benefit from IRA 45X tax credit vendor rebates
  • GAAP diluted EPS: $2.53 to $2.90 (vs. previous $1.60 to $1.80)
  • Adjusted EBITDA: $475 million to $500 million (vs. previous $390 million to $440 million) which excludes stock-based compensation expense, net intangible amortization, and IRA 45X tax credit vendor rebates
  • Adjusted diluted EPS: $2.55 to $2.75 (vs. previous $1.95 to $2.15) which excludes $0.30 for stock-based compensation expense and net intangible amortization, and excludes $0.28 to $0.45 of benefit from IRA 45X tax credit vendor rebates

Q3 FY2024 Earnings Call

January 31, 2024

1:30p.m. PT / 4:30p.m. ET

Live webcast available on investors.nextracker.com

The webcast replay, along with supporting materials, will be available on the Nextracker IR website following the conclusion of the event.

About Nextracker

Nextracker is a leading provider of intelligent, integrated solar tracker and software solutions used in utility-scale and ground-mounted distributed generation solar projects around the world. Our products enable solar panels power plants to follow the sun’s movement across the sky and optimize plant performance. With power plants operating in more than 30 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 and Nextracker’s outlook for fiscal 2024 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 Non-GAAP Financial Information

An explanation and reconciliation of non-GAAP financial measures to GAAP financial measures is presented in Schedules 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.

Nextracker Inc.

Unaudited condensed consolidated statements of operations and comprehensive income

(In thousands, except share and per share data)

 

 

Three-months ended

 

Nine-months ended

 

December 31, 2023

 

December 31, 2022

 

December 31, 2023

 

December 31, 2022

Revenue

$

710,426

 

 

$

513,370

 

 

$

1,763,326

 

 

$

1,383,742

 

Cost of sales

 

500,701

 

 

 

431,111

 

 

 

1,290,747

 

 

 

1,187,081

 

Gross profit

 

209,725

 

 

 

82,259

 

 

 

472,579

 

 

 

196,661

 

Selling, general and administrative expenses

 

48,356

 

 

 

18,613

 

 

 

126,865

 

 

 

55,475

 

Research and development

 

12,897

 

 

 

4,984

 

 

 

29,270

 

 

 

13,283

 

Operating income

 

148,472

 

 

 

58,662

 

 

 

316,444

 

 

 

127,903

 

Interest and other income, net

 

(18,307

)

 

 

(2,366

)

 

 

(8,489

)

 

 

(1,118

)

Income before income taxes

 

166,779

 

 

 

61,028

 

 

 

324,933

 

 

 

129,021

 

Provision for income taxes

 

38,818

 

 

 

18,442

 

 

 

51,918

 

 

 

35,218

 

Net income and comprehensive income

 

127,961

 

 

 

42,586

 

 

 

273,015

 

 

 

93,803

 

Less: Net income attributable to Nextracker LLC prior to the reorganization transactions

 

 

 

 

42,586

 

 

 

 

 

 

93,803

 

Less: Net income attributable to redeemable non-controlling interests

 

86,565

 

 

 

 

 

 

171,937

 

 

 

 

Net income attributable to Nextracker Inc.

$

41,396

 

 

$

 

 

$

101,078

 

 

$

 

 

 

 

 

 

 

 

 

Earnings per share attributable to the stockholders of Nextracker Inc. (1)

 

 

 

 

 

 

 

Basic

$0.67

 

 

N/A

 

 

$1.78

 

 

N/A

 

Diluted

$0.87

 

 

N/A

 

 

$1.86

 

 

N/A

 

Weighted-average shares used in computing per share amounts:

 

 

 

 

 

 

 

Basic

 

62,108,835

 

 

 

N/A

 

 

 

56,789,399

 

 

 

N/A

 

Diluted

 

147,344,370

 

 

 

N/A

 

 

 

147,160,053

 

 

 

N/A

 

(1)

Basic and diluted earnings per share is applicable only for the period following the initial public offering (“IPO”) and the related Transactions.

Nextracker Inc.

Unaudited condensed consolidated balance sheets

(In thousands)

 

 

 

As of December 31, 2023

 

As of March 31, 2023

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

367,818

 

 

$

130,008

 

Accounts receivable, net of allowance of $1,884 and $1,768, respectively

 

365,271

 

 

 

271,159

 

Contract assets

 

351,545

 

 

 

297,960

 

Inventories

 

202,662

 

 

 

138,057

 

Other current assets

 

131,664

 

 

 

35,081

 

Total current assets

 

1,418,960

 

 

 

872,265

 

Property and equipment, net

 

8,369

 

 

 

7,255

 

Goodwill

 

265,153

 

 

 

265,153

 

Other intangible assets, net

 

1,633

 

 

 

1,321

 

Deferred tax assets and other assets

 

401,010

 

 

 

273,686

 

Total assets

$

2,095,125

 

 

$

1,419,680

 

LIABILITIES, REDEEMABLE INTERESTS AND STOCKHOLDERS' DEFICIT

 

 

 

Current liabilities:

 

 

 

Accounts payable

 

374,919

 

 

 

211,355

 

Accrued expenses

 

70,178

 

 

 

59,770

 

Deferred revenue

 

180,021

 

 

 

176,473

 

Due to related parties

 

58,292

 

 

 

12,239

 

Other current liabilities

 

76,027

 

 

 

47,589

 

Total current liabilities

 

759,437

 

 

 

507,426

 

Long-term debt

 

144,762

 

 

 

147,147

 

TRA liability and other liabilities

 

439,396

 

 

 

280,246

 

Total liabilities

 

1,343,595

 

 

 

934,819

 

Redeemable non-controlling interest

 

3,868,543

 

 

 

3,560,628

 

Total stockholders' deficit

$

(3,117,013

)

 

$

(3,075,767

)

Total liabilities, redeemable interests, and stockholders' deficit

$

2,095,125

 

 

$

1,419,680

 

Nextracker Inc.

Unaudited condensed consolidated statements of cash flows

(In thousands)

 

 

Nine-months ended

 

December 31, 2023

 

December 31, 2022

Cash flows from operating activities:

 

 

 

Net income

$

273,015

 

 

$

93,803

 

Depreciation and amortization

 

3,138

 

 

 

3,594

 

Changes in working capital and other, net

 

41,328

 

 

 

(25,015

)

Net cash provided by operating activities

 

317,481

 

 

 

72,382

 

Cash flows from investing activities:

 

 

 

Purchases of property and equipment

 

(3,850

)

 

 

(2,653

)

Proceeds from the disposition of property and equipment

 

 

 

 

24

 

Net cash used in investing activities

 

(3,850

)

 

 

(2,629

)

Cash flows from financing activities:

 

 

 

Repayments of bank borrowings and long-term debt

 

(2,813

)

 

 

 

Net proceeds from issuance of Class A shares

 

552,009

 

 

 

 

Purchase of LLC common units from Yuma, Inc.

 

(552,009

)

 

 

 

Distribution to non-controlling interest holders

 

(64,365

)

 

 

 

Net transfers (to) from Parent

 

(8,335

)

 

 

1,258

 

Other financing activities

 

(308

)

 

 

 

Net cash provided by (used in) financing activities

 

(75,821

)

 

 

1,258

 

Effect of exchange rate on cash and cash equivalents

 

 

 

 

 

Net increase in cash and cash equivalents

 

237,810

 

 

 

71,011

 

Cash and cash equivalents beginning of period

 

130,008

 

 

 

29,070

 

Cash and cash equivalents end of period

$

367,818

 

 

$

100,081

 

 

Nine-months ended

Adjusted free cash flow

December 31, 2023

 

December 31, 2022

Net cash provided by operating activities

$

317,481

 

 

$

72,382

 

Purchases of property and equipment

 

(3,850

)

 

 

(2,653

)

Proceeds from the disposition of property and equipment

 

 

 

 

24

 

Adjusted free cash flow

$

313,631

 

 

$

69,753

 

Nextracker Inc.

Reconciliation of GAAP to Non-GAAP Financial measures

(In thousands, except percentages, shares and per share data)

 

 

Three-months ended

 

Nine-months ended

 

December 31, 2023

 

December 31, 2022

 

December 31, 2023

 

December 31, 2022

GAAP gross profit

$

209,725

 

 

$

82,259

 

 

$

472,579

 

 

$

196,661

 

Stock-based compensation expense

 

2,497

 

 

 

350

 

 

 

7,668

 

 

 

1,105

 

Intangible amortization

 

63

 

 

 

63

 

 

 

188

 

 

 

188

 

Non-GAAP gross profit

$

212,285

 

 

$

82,672

 

 

$

480,435

 

 

$

197,954

 

GAAP operating income

$

148,472

 

 

$

58,662

 

 

$

316,444

 

 

$

127,903

 

Stock-based compensation expense

 

13,037

 

 

 

940

 

 

 

39,895

 

 

 

2,790

 

Intangible amortization

 

63

 

 

 

63

 

 

 

188

 

 

 

1,145

 

Legal costs and other

 

 

 

 

 

 

 

 

 

 

1,441

 

Non-GAAP operating income

$

161,572

 

 

$

59,665

 

 

$

356,527

 

 

$

133,279

 

GAAP net income

$

127,961

 

 

$

42,586

 

 

$

273,015

 

 

$

93,803

 

Stock-based compensation expense

 

13,037

 

 

 

940

 

 

 

39,895

 

 

 

2,790

 

Intangible amortization

 

63

 

 

 

63

 

 

 

188

 

 

 

1,145

 

Adjustment for taxes

 

841

 

 

 

(193

)

 

 

(4,040

)

 

 

(1,983

)

Legal costs and other

 

 

 

 

 

 

 

 

 

 

1,441

 

Non-GAAP net income

$

141,902

 

 

$

43,396

 

 

$

309,058

 

 

$

97,196

 

GAAP Net income

$

127,961

 

 

$

42,586

 

 

$

273,015

 

 

$

93,803

 

Interest, net

 

(198

)

 

 

(215

)

 

 

1,136

 

 

 

(380

)

Provision for income taxes

 

38,818

 

 

 

18,442

 

 

 

51,918

 

 

 

35,218

 

Depreciation expense

 

1,055

 

 

 

887

 

 

 

2,950

 

 

 

2,450

 

Intangible amortization

 

63

 

 

 

63

 

 

 

188

 

 

 

1,145

 

Stock-based compensation expense

 

13,037

 

 

 

940

 

 

 

39,895

 

 

 

2,790

 

Legal costs and other

 

 

 

 

 

 

 

 

 

 

1,441

 

Other tax related income, net

 

(12,945

)

 

 

 

 

 

(7,259

)

 

 

 

Adjusted EBITDA

$

167,791

 

 

$

62,703

 

 

$

361,843

 

 

$

136,467

 

Net income (% of revenue)

 

18.0

%

 

 

8.3

%

 

 

15.5

%

 

 

6.8

%

Non-GAAP gross margin

 

29.9

%

 

 

16.1

%

 

 

27.2

%

 

 

14.3

%

Adjusted EBITDA (% of revenue)

 

23.6

%

 

 

12.2

%

 

 

20.5

%

 

 

9.9

%

Diluted earnings per share

 

 

 

 

 

 

 

GAAP

$

0.87

 

 

 

N/A

 

 

$

1.86

 

 

 

N/A

 

Earnings per share attributable to Non-GAAP adjustments

$

0.09

 

 

 

N/A

 

 

$

0.24

 

 

 

N/A

 

Non-GAAP

$

0.96

 

 

 

N/A

 

 

$

2.10

 

 

 

N/A

 

 

 

 

 

 

 

 

 

Diluted shares used in computing per share amounts

 

147,344,370

 

 

 

N/A

 

 

 

147,160,053

 

 

 

N/A

 

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

Nextracker Inc.

Notes

(1) 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 (“EBITDA”), non-GAAP gross profit, non-GAAP operating income, non-GAAP net income, non-GAAP 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 and assumed in business acquisitions. 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.

During fiscal year 2023, the Company granted equity compensation awards to employees under the First Amended and Restated 2022 Nextracker LLC Equity Incentive Plan (the “2022 Nextracker Plan”), Vesting of awards under the Plan was contingent on a Nextracker Initial Public Offering (IPO) which occurred on February 9, 2023. In addition to the 2022 Nextracker Plan, Flex maintains several stock-based incentive plans for the benefit of certain of its officers, directors, and employees, including the employees of Nextracker. Stock-based compensation expense for the nine-month periods also include expense recognized under the Flex plan.

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.

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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