Nextracker Reports Q2 FY25 Financial Results
Reaffirms FY25 Revenue Outlook and Raises FY25 Profit Outlook
Financial Summary |
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(In millions, except per share) |
|||
|
Q2 FY25* |
Q1 FY25* |
Q2 FY24 |
Revenue |
|
|
|
GAAP Gross Profit |
|
|
|
GAAP Gross Margin |
35.4% |
33.0% |
26.0% |
GAAP Net Income |
|
|
|
GAAP Net Income Margin |
18.5% |
17.3% |
14.2% |
GAAP Diluted EPS |
|
|
|
|
|
|
|
Adjusted Gross Profit |
|
|
|
Adjusted Gross Margin |
35.9% |
33.5% |
26.6% |
Adjusted EBITDA |
|
|
|
Adjusted EBITDA Margin |
27.2% |
24.3% |
19.2% |
Adjusted Net Income |
|
|
|
Adjusted Diluted EPS |
|
|
|
*Q2 FY25 and Q1 FY25 GAAP and adjusted results include approximately |
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|
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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 inAnaheim, 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 inBrazil and theU.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
“We finished Q2 with strong execution and operational discipline, driving meaningful improvements in margins, which allows us to raise our FY25 profit outlook,” said
FY2025 Annual Outlook
Reaffirms FY25 revenue outlook and raises FY25 profit outlook
|
Updated Outlook |
Previous Outlook |
Revenue |
|
|
GAAP Net Income |
|
|
GAAP Diluted EPS |
|
|
Adjusted EBITDA |
|
|
Adjusted Diluted EPS |
|
|
Adjusted EBITDA and adjusted diluted EPS exclude approximately |
Q2 FY2025 Earnings Call
Live webcast available oninvestors.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
The webcast replay will be available on the Nextracker Investor Relations website following the conclusion of the event.
Upcoming Events
Fireside Chat
UBS Tech West –
Fireside Chat
Live webcasts available on investors.nextracker.com
About
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
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
Schedule I |
|||||||
|
|||||||
Unaudited condensed consolidated statements of operations and comprehensive income |
|||||||
(In thousands, except per share data) |
|||||||
|
Three-month periods ended |
||||||
|
|
|
|
||||
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 |
$ |
115,391 |
|
|
$ |
39,253 |
|
|
|
|
|
||||
Earnings per share attributable to |
|
|
|
||||
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 |
|
|
|||||||
Unaudited condensed consolidated statements of operations and comprehensive income (continued) |
|||||||
(In thousands, except per share data) |
|||||||
|
Six-month periods ended |
||||||
|
|
|
|
||||
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 |
$ |
237,091 |
|
|
$ |
59,682 |
|
|
|
|
|
||||
Earnings per share attributable to |
|
|
|
||||
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 |
|||||
|
|||||
Unaudited condensed consolidated balance sheets |
|||||
(In thousands) |
|||||
|
As of |
|
As of |
||
ASSETS |
|||||
Current assets: |
|
|
|
||
Cash and cash equivalents |
$ |
561,884 |
|
$ |
474,054 |
Accounts receivable, net of allowance of |
|
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 |
|
|
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 |
|||||||
|
|||||||
Unaudited condensed consolidated statements of cash flows |
|||||||
(In thousands) |
|||||||
Six-month periods ended |
|||||||
|
|
|
|
||||
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 |
|
— |
|
|
|
(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 |
|
|
|
||||
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 |
|||||||||||||
|
|||||||||||||
Reconciliation of GAAP to Non-GAAP financial measures |
|||||||||||||
(In thousands, except percentages and per share data) |
|||||||||||||
|
Three-month periods ended |
||||||||||||
|
|
|
|
||||||||||
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 |
|
|
|
|
|||||||||||||
Reconciliation of GAAP to Non-GAAP financial measures (continued) |
|||||||||||||
(In thousands, except percentages and per share data) |
|||||||||||||
|
Six-month periods ended |
||||||||||||
|
|
|
|
||||||||||
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
Notes
To supplement Nextracker’s unaudited selected financial data presented consistent with
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
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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