Nextracker (US:NXT)2025-05-14 22:00Financial Data and Key Metrics Changes - For Q4, revenue reached a record $924 million, up 26% year-over-year, bringing full-year revenue to approximately $3 billion, an 18% increase over fiscal 2024 [18][20] - Adjusted EBITDA for Q4 expanded to a record $242 million, a 52% increase year-over-year, with an adjusted EBITDA margin of 26% [19][20] - Adjusted diluted EPS for fiscal 2025 was $4.22, up 38% year-over-year, with Q4 adjusted EPS of $1.29, a 34% increase compared to the prior year [20] - Adjusted free cash flow was $227 million in Q4 and $622 million for the full year [21] Business Line Data and Key Metrics Changes - The company reported strong demand for its Hail Pro series trackers, with over 9 gigawatts sold during the year, and 17 gigawatts of XTR 0.75 and XTR 1.5 sold, reinforcing its global leading position in terrain following [14][15] - The backlog increased significantly from $2.1 billion at IPO to over $4.5 billion, indicating strong bookings growth momentum [5][9] Market Data and Key Metrics Changes - The geographic revenue mix for the full year was 69% from the U.S. and 31% from the rest of the world [19] - The international business signed contracts in 17 different countries in Q4 alone, with strong performance noted in Europe, particularly in Spain [11][12] Company Strategy and Development Direction - The company is transitioning from a pure play tracker company to a solar power technology platform supplier, acquiring adjacent technologies to create a complete solar power platform [6][8] - The acquisition of BendTech Corporation aims to enable customers to source both tracker systems and eBOS components from a single supplier, enhancing the company's product offerings [7][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating current policy uncertainties due to a geographically diversified order backlog and a healthy balance sheet [6][26] - For fiscal 2026, the company expects revenue in the range of $3.2 billion to $3.4 billion, with adjusted EBITDA between $700 million and $775 million [22][26] Other Important Information - The company plans to increase OpEx as a percentage of revenue by approximately 100 basis points in FY 2026 to support growth initiatives [23] - The company has a strong focus on innovation, reaching a record 1,220 patents, including 646 issued patents and 574 patents pending [13] Q&A Session Summary Question: Thoughts on the House tax bill and its workability - Management noted that there are favorable aspects in the reconciliation bill, particularly regarding incentives for U.S. manufacturing, but also areas needing improvement [31][33] Question: International business and margin outlook - The international business continues to grow, with 30% to 40% of business being international, and margins are expected to remain healthy despite being generally lower internationally [38][39] Question: Impact of the House draft bill on volumes and bookings - Management indicated that the impact of the bill would be more significant in the intermediate term, with a healthy pipeline and secure projects in the U.S. market [45][47] Question: Revenue outlook and contribution from new businesses - The company is focused on growth, with expectations for a third of its business to come from non-tracker revenue in five years, and will provide more details at the upcoming Analyst Day [51][55] Question: Durability of structural gross margins - Management expressed confidence in the visibility of pricing, margins, and costs for fiscal 2026, with structural margins largely booked [80][81] Question: Market share and manufacturing capacity of BendTech - BendTech is considered a top supplier in the U.S. eBOS market, and the acquisition is expected to unlock growth potential due to previously constrained capacity [85][86] Question: 45X impact and tariff framework assumptions - Management indicated that Q4 saw a slight increase in 45X benefits, and the guidance for 2026 is based on a prudent approach to tariffs [89][92]