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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241030347227/en/
Investors, Financial Media Mary Lai VP, IR &
Financial Communications Investor@nextracker.com
Media Kristan Kirsh SVP, Global Marketing
Media@nextracker.com
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