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Nextracker Inc. (NXT)·Q4 2025 Earnings Summary

Executive Summary

  • Record Q4 FY25 revenue of $924.3M and adjusted EPS of $1.29; both exceeded Wall Street consensus (Revenue $828.1M*, EPS $0.98*) and capped FY25 with $3.0B revenue and $4.22 adjusted EPS .
  • Full-year FY26 guidance introduced: revenue $3.2–$3.4B, adjusted EBITDA $700–$775M, adjusted EPS $3.65–$4.03; management flagged ~100 bps OpEx step-up, ~$100M capex, and >$450M FY26 FCF .
  • Backlog increased sequentially again and is “significantly above $4.5B,” supported by strong bookings and a rising domestic content attach rate .
  • Strategic expansion into eBOS via Bentek acquisition to enable single-source tracker + electrical BOS solutions; customers welcomed the move and early capacity exists to ramp .

Note: Consensus values (*) retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Record quarterly revenue and profitability: Q4 revenue $924M (+26% YoY); Q4 adjusted EBITDA $242.5M (+52% YoY); FY25 adjusted EBITDA $776.5M (+49% YoY) .
  • Strong cash generation and balance sheet: FY25 adjusted FCF $621.9M; cash $766.1M at year-end; no long-term debt outstanding .
  • Product and platform momentum: robust uptake of Hail Pro trackers (>9 GW booked), XTR terrain-following (>17 GW sold FY25), record TrueCapture bookings, and >40 countries served; management emphasized flight-to-quality and market share leadership .
    • “We had a fantastic year, exceeding our financial, technology, customer satisfaction, and market growth targets.” — Dan Shugar, CEO .
    • “We completed a very strong financial year… ending the year with over $766 million in cash and no debt.” — Chuck Boynton, CFO .

What Went Wrong

  • Margin compression vs prior periods: Q4 GAAP gross margin 33.1% (Q3: 35.5%; Q4 FY24: 46.2%); Q4 adjusted gross margin 33.4% (Q3: 36.0%); drivers include non-repeat one-time tailwinds in Q3 and higher international mix in Q4 .
  • Lower FY26 EBITDA margin guidance vs FY25 actuals as the company leans into growth: structural gross margin expected low-30s and EBITDA low-20s amid higher OpEx and investments (Bentek, other adjacencies) .
  • Policy/tariff uncertainties remain a monitoring item (House bill items like placed-in-service timing, component origin restrictions); management is “cautiously optimistic” but noted areas needing improvement .

Financial Results

Headline Results vs Prior Periods

MetricQ4 FY24Q3 FY25Q4 FY25
Revenue ($USD Millions)$736.5 $679.4 $924.3
GAAP Diluted EPS ($USD)$1.51 $0.79 $1.05
Adjusted Diluted EPS ($USD)$0.96 $1.03 $1.29
GAAP Gross Margin %46.2% 35.5% 33.1%
Adjusted EBITDA Margin %21.7% 27.4% 26.2%
45X Credits Recognized (approx., $MM)$121.4 (cumulative catch-up) $52 $75

Consensus vs Actual – Q4 FY25

MetricConsensus*Actual
Revenue ($USD Millions)$828.1*$924.3
Primary EPS ($USD)$0.98*$1.29
EBITDA ($USD Millions)$193.9*$242.5 (Adjusted EBITDA)

Note: Consensus values (*) retrieved from S&P Global.

Geographic Mix (Full Year FY25)

RegionFY25 Mix
United States69%
Rest of World31%

KPIs

KPIQ4 FY25FY25
Backlog ($B)>$4.5B >$4.5B
Adjusted Free Cash Flow ($USD Millions)$227 $621.9
Cash & Equivalents ($USD Millions)$766.1 (year-end) $766.1
Long-term Debt ($USD Millions)$0 (year-end) $0
TrueCapture: Selected NoteRecord FY25 bookings Higher attach/commissioning momentum

Non-GAAP context and 45X treatment

  • Q4 FY24 GAAP included a $121.4M cumulative 45X benefit; Q4 FY24 adjusted excluded 45X. Beginning Q1 FY25, 45X vendor rebates are included in non-GAAP results going forward .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY2026N/A$3.2–$3.4B New
GAAP Net IncomeFY2026N/A$445–$503M New
GAAP Diluted EPSFY2026N/A$2.91–$3.29 New
Adjusted EBITDAFY2026N/A$700–$775M New
Adjusted Diluted EPSFY2026N/A$3.65–$4.03 New
Adjusted EBITDAFY2025$625–$665M $700–$740M Raised
Adjusted Diluted EPSFY2025$3.10–$3.30 $3.75–$3.95 Raised
GAAP Diluted EPSFY2025$2.50–$2.70 $3.11–$3.31 Raised
GAAP Net IncomeFY2025$378–$408M $467–$497M Raised

Additional FY26 guardrails: OpEx +~100 bps of revenue; Capex ~$100M; target >$450M FCF; end FY26 cash >$1B (ex-new M&A) .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4)Trend
AI/Technology demand driversEmphasized structural electricity demand growth (data centers/EVs) supporting multi-year solar build; doubled R&D; commissioning boosts TrueCapture revenue “Market opportunity expanding rapidly” driven by AI/EV/buildings; platform strategy accelerates Strengthening
Supply Chain & Domestic Content100% U.S. tracker accelerated; >20 U.S. factories; domestic content rules increase tracker points; customers seeking higher domestic content Shipping 100% domestic tracker; rising attach; U.S. footprint enables on-time delivery and logistics optimization Strengthening
Tariffs/Macro & PolicyPrudent assumptions in outlook; backlog visibility; flight-to-quality; stable pricing House bill: mixed items; cautious optimism; FY26 largely booked; tariff framework prudently assumed Stable/Cautious
Product Performance (Hail Pro, XTR, TrueCapture)Hail Pro-75 bookings rising; XTR reduces grading; TrueCapture attach rate improving; software ~2% of revenue FY25: >9 GW Hail Pro booked, >17 GW XTR sold; record TrueCapture bookings Strengthening
Regional TrendsU.S. ~66–70%; record bookings; Europe/LatAm/Australia leading in Q3 Full-year mix 69% U.S.; strong international contracts in 17 countries; Europe strongest year Mixed: ROW growing; U.S. strong
Regulatory/LegalDomestic content points up; backlog conversion 80–90% realized over eight quarters Discussions on placed-in-service timing and foreign-origin components; pipeline secure with safe harbor Watchlist
R&D & PatentsTripled R&D; Hyderabad lab; CAL-NEXT (UC Berkeley) 1,220 patents (646 issued/574 pending); continuing innovation engine Strengthening
eBOS & Adjacent SolutionsFoundations bookings begin; customers want more from NXT Bentek acquired; synergies across design/install; capacity to ramp; customers supportive New Growth Vector

Management Commentary

  • “Backlog again increasing sequentially… supported by robust demand around the globe.” — Dan Shugar (CEO) .
  • “We expect revenue in the range of $3.2–$3.4 billion… adjusted EBITDA between $700–$775 million… adjusted diluted EPS $3.65–$4.03.” — Chuck Boynton (CFO) .
  • “We are evolving Nextracker from a pure-play tracker supplier to a solar power platform company.” — Dan Shugar (CEO) .
  • “We see massive synergy between electrical balance of system and the tracker because they touch each other… customers asked us to offer more components.” — Management on Bentek .

Q&A Highlights

  • Policy outlook: Management cautiously optimistic on House bill; favorable treatment for 45X/ITC timing, but transferability and foreign-origin components need refinement; minimal impact to FY26 given contracted backlog .
  • International vs U.S. margin mix: ROW margins generally lower; Q4 margin compression primarily mix-related with large international projects; structural gross margins in low-30s .
  • 45X credits: FY25 run-rate around ~11% of U.S. revenue; Q4 had small one-time uplift; FY26 outlook prudently assumes similar upper bound .
  • Domestic content points: 100% U.S. tracker enables ~24.7 of 100 points toward the bonus ITC; higher demand for domestic content .
  • eBOS ramp: Bentek among top 3–4 eBOS suppliers; undercapitalized historically—NXT will unlock capacity; benefits expected to begin in FY26 .

Estimates Context

  • Q4 FY25 beat: Revenue $924.3M vs $828.1M consensus*; Primary EPS $1.29 vs $0.98 consensus* .
  • FY25 beat: Revenue $3.0B vs $2.87B consensus*; Primary EPS $4.22 vs $3.87 consensus* .
  • FY26 consensus: Revenue ~$3.45B*, Primary EPS ~$4.28* — company guided revenue below consensus and EPS below consensus midpoint, reflecting growth investments and prudent assumptions .

Note: Consensus values (*) retrieved from S&P Global.

Key Takeaways for Investors

  • Results and narrative support a “beat-and-raise” setup into FY26: Q4/FY25 beats, new FY26 guide, backlog quality, and platform expansion (eBOS/foundations) .
  • Expect near-term margin variability as mix shifts (more international delivery), OpEx steps up (~100 bps), and capex scales to support adjacencies; structural gross margins low-30s, EBITDA low-20s .
  • Domestic content is a commercial differentiator: 100% U.S. tracker raises DC points and boosts bonus ITC eligibility, supporting pricing power and pipeline security .
  • 45X credits remain a meaningful—but prudently bounded—benefit; model ~upper bound near 11% of U.S. revenue per management commentary .
  • Platform strategy is the medium-term growth catalyst: foundations + eBOS + software (TrueCapture) to expand TAM, deepen customer penetration, and diversify revenue .
  • Backlog strength and multi-year visibility de-risk FY26: majority of FY26 structurally booked, reducing estimate/guidance volatility risk .
  • Watch policy headlines (tariffs, placed-in-service, transferability): unlikely to affect FY26 materially but could change FY27+ pipeline composition; optionality exists with diversified global supply chain .