Nextracker (US:NXT)2025-10-30 01:46Financial Performance - Nextracker reported revenues of $1.8 billion for the six-month period ended September 26, 2025, and $3.0 billion for fiscal year 2025[115]. - Revenue for the three-month period ended September 26, 2025, increased by $269.7 million, or 42%, compared to the same period in 2024, driven by a 41% increase in GW delivered[144]. - Revenue increased by $414.0 million, or 31%, for the six-month period ended September 26, 2025, driven by a 34% increase in GW delivered, particularly in the U.S.[156]. - U.S. revenue increased by approximately $225.2 million, or 49%, during the three-month period ended September 26, 2025, due to increased project numbers and shipment volumes[145]. - Gross profit increased by $68.1 million, or 30%, during the three-month period ended September 26, 2025, attributed to revenue growth and the impact of the 45X Credit[147]. - Adjusted gross profit for the three-month period ended September 26, 2025, was $299.6 million, with an adjusted gross margin of 33.1%[140]. - Adjusted operating income for the same period was $218.5 million, representing an adjusted operating margin of 24.1%[141]. - Adjusted net income for the three-month period ended September 26, 2025, was $180.6 million, with an adjusted net income margin of 19.9%[140]. - Adjusted EBITDA for the three-month period was $223.5 million, with an adjusted EBITDA margin of 24.7%[141]. - Gross profit increased by $112.4 million, or 24%, during the six-month period ended September 26, 2025, primarily due to revenue growth in the U.S. and Rest of the World[158]. Revenue Composition - Revenue from the U.S. accounted for 73% of total revenue for the six-month period ended September 26, 2025, while the rest of the world contributed 27%[121]. - The revenue mix is predominantly from solar tracker system sales, with additional revenue from TrueCapture, eBOS, foundations business, and robotic solutions[121]. - The top five largest customers accounted for 39% of total revenue for the six-month period ended September 26, 2025[187]. Expenses and Costs - Cost of sales rose by $201.6 million, or 49%, primarily due to the increase in GW delivered and higher costs associated with recent business acquisitions[146]. - Selling, general and administrative expenses increased by $25.6 million, or 19%, to $158.6 million for the six-month period ended September 26, 2025, mainly due to expansion of the sales organization and acquisition-related costs[159][160]. - Research and development expenses increased by $12.7 million, or 36%, to $48.4 million for the six-month period ended September 26, 2025, driven by investments in innovation and engineering team expansion[161]. - Nextracker's operating expenses include costs related to being a publicly traded company, which are expected to be material[128]. Strategic Initiatives - Nextracker entered a joint venture with Abunayyan Holding in Saudi Arabia to expand its presence in the Middle East and North Africa markets[116]. - The company completed three acquisitions in 2025, including Bentek, OnSight, and Origami, for a total purchase price of approximately $140.2 million[117][119]. - The company has a disciplined M&A approach focusing on core competencies and technological differentiation[120]. - The company expects to increase research and development expenses over time to support new product development and technology improvements[130]. Cash Flow and Liquidity - Net cash provided by operating activities was $268.2 million for the six-month period ended September 26, 2025, compared to $274.6 million for the same period in 2024[174]. - Net cash used in investing activities was approximately $142.5 million, primarily due to a $115.8 million payment for acquisitions and $26.7 million for property and equipment[176]. - Net cash used in financing activities was $46.4 million, mainly from a $27.4 million payment related to the Tax Receivable Agreement and a $14.0 million payment of acquisition deferred purchase price[177]. - The company enhanced its capital structure with a $1.0 billion unsecured revolving credit facility, increasing total liquidity to approximately $1.8 billion as of September 26, 2025[165]. - Total liquidity as of September 26, 2025, was approximately $1.8 billion, primarily from unutilized amounts under the New Revolving Credit Facility[181]. - The New Credit Agreement provides for a $1.0 billion unsecured New Revolving Credit Facility maturing on September 8, 2030, with approximately $915.0 million available as of September 26, 2025[182]. Tax and Other Income - Total income tax expense increased to $69.6 million for the six-month period ended September 26, 2025, reflecting an effective tax rate of 18.6%[164]. - Other income, net was $8.1 million for the six-month period ended September 26, 2025, including $12.7 million of interest income, partially offset by write-offs and foreign currency losses[163]. Risks - The company is exposed to commodity price risk, particularly with fluctuating prices of raw materials like steel, which could impact operating margins[188]. - Foreign currency exchange risk is managed through a policy that includes techniques such as currency of invoice and receivables management[191]. - A 10% appreciation or depreciation of the U.S. dollar is not expected to have a material effect on the company's financial position in the near term[192].