NEXTracker (NASDAQ:NXT) held its fourth-quarter earnings conference call on Tuesday. Below is the complete transcript from the call.
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Access the full call at https://events.q4inc.com/attendee/838534079
Summary
Nextpower Inc reported a strong fiscal year 2026 with 20% revenue growth year-over-year, strong profitability, and a record backlog of over $5.25 billion.
The company is seeing traction from its platform strategy, with increasing adoption of its expanded product portfolio, and is investing in innovation both organically and through targeted acquisitions.
Nextpower Inc plans to manufacture power conversion products in the U.S. and announced an acquisition to accelerate the launch of its power conversion business.
The company reported fourth-quarter revenue of $881 million, slightly down sequentially, but overall fiscal year revenue increased to approximately $3.56 billion.
For fiscal year 2027, Nextpower Inc expects revenue between $3.8 billion and $4.1 billion and adjusted EBITDA in the range of $825 million to $900 million.
The company continues to prioritize organic investments and disciplined M&A, and has initiated share repurchase activity under a $500 million authorization.
Nextpower Inc’s gross margins are expected to remain in the low 30s, with ongoing investments impacting near-term profitability but expected to drive long-term growth.
Management highlighted strong demand from data centers and emphasized the importance of providing integrated solutions to improve efficiency and reduce costs.
Full Transcript
OPERATOR
Good afternoon everyone and thank you for standing by. My name is Kevin and I will be your conference operator today. Today’s call is being recorded. I would like to welcome everyone to Nextpower’s fourth quarter fiscal year 2026 earnings call. After the Speaker’s remarks, there will be a Q and A session. If you would like to ask a question, please raise your hand. If you have dialed in to today’s call, please press Star9 to raise your hand and Star6 to unmute at this time for opening remarks. I would like to pass the call over to Ms. Sarah Lee, head of Investor Relations. Sarah, you may begin.
Sarah Lee (Head of Investor Relations)
Thank you and good afternoon everyone. Welcome to Nextpower’s fourth quarter fiscal year 2026 earnings call. I’m Sarah Lee, Nextpower’s head of investor Relations and I’m joined by Dan Shooker, our CEO and founder, Howard Wanger, our President and Chuck Boynton, our CFO. As a reminder, there will be a replay of this call posted on the IR website along with the earnings press release and shareholder letter. Today’s call contains statements regarding our business financial performance and operations, including our business and our industry that may be considered forward looking statements and such statements involve risks and uncertainties that may cause actual results to differ materially from our expectations. Those statements are based on current beliefs, assumptions and expectations and speak only as of the current date. For more information on those risks and uncertainties, please review our earnings press release, shareholder letter and our SEC filings, including our most recently filed Quarterly Report, Form 10Q and Annual Report on Form 10K which are available on our IR website at investors.nextpower.com this information is subject to change and we undertake no obligation to update any forward looking statements as a result of new information, future events or changes in our expectations. Please note we will provide GAAP and non GAAP measures on today’s call. The full non GAAP to GAAP reconciliations can be found in the appendix to the press release and the shareholder letter as well as the Financial section of the IR website. And now I’ll turn the call over to our CEO and Founder Dan
Dan Shooker (CEO and Founder)
Good afternoon everyone and thank you for joining us. We’re pleased to report a strong finish to fiscal year 26 and recap what has been a defining year for Nextpower Inc. We delivered solid financial performance across the business including 20% revenue growth year over year, strong profitability and record backlog of over 5.25 billion. Demand remains healthy and we continue to see strong bookings momentum supported by a flight to quality across our customer base. Let me lay out a few key themes you will hear during today’s call. First, our core tracker business continues to strengthen and perform at industry leading levels. Second, we’re seeing clear traction from our platform strategy with increasing adoption of our expanded product portfolio. Third, we’re continuing to invest in innovation both organically and and through targeted acquisitions to build a more integrated power plant technology platform. Let’s start with our core business where we continue to win in the market. We saw one of the highest booking quarters in our history and we exited the year with record backlog. As we continue to lead the global solar market, we continue to increase our backlog while growing revenue and profit. Our global footprint and flexible supply chain position us well to capture the underlying market demand and mitigate fluid policy dynamics in any one region. According to the International Energy Agency, global electricity demand is forecast to grow 3.6% per year until 2030 compared to 2.9% per year for the prior decade. This translates to around 5,400 terawatt hours of incremental electricity needs over the next five years, a structurally increasing demand driven by data centers, electrification and industrial growth. This is creating an unprecedented need for new generation capacity and solar, particularly when paired with storage, is documented to be one of the most scalable and cost effective solutions to meet that demand. According to Rystead Energy, solar power is predicted to account for over 60% of new generation capacity brought online globally between 2025 and 2030 or around 3000g gigawatts AC. By virtue of our market leadership, Nextpower Inc is very well positioned to help meet this demand. Second, we’re seeing clear traction from our platform strategy. Customers have been asking us to offer additional products and services beyond trackers to simplify procurement, accelerate installation speed and improve system performance and long term reliability. We’re building our platform to meet that demand and we believe integration across the power plant is becoming a key differentiator. Howard will provide more detail on how our strategy is translating into customer adoption and bookings activity. We believe these trends will continue to support long term growth across our markets. Third, we’re continuing to expand our platform capabilities. As we’ve disclosed previously, we’ve been investing in the development of power conversion solutions which we view as a critical component of integrated power plant architecture. We’re now delivering on our complete solar platform and on our Everything but the Panel strategy, while also addressing the storage and data center demand all in one go. Our internally developed technology is very unique with a design intended to enable higher operating efficiency and reliability coupled with enhanced ease of maintenance. We plan to manufacture these products in the United States as we expect domestic content and very strong cybersecurity to be important differentiators in the power conversion market. While we’re completing internal development of our next-gen power conditioning technology, we’re expanding our product portfolio and accelerating time to market through an agreement announced today to acquire key power conversion product lines that are ready to ship and a planned US Manufacturing footprint that can also serve as a launching pad for our internally developed products. We think that this acquisition, which is subject to foreign direct investment approval by the Spanish government and other customary closing conditions, has similar attributes to our EBOS acquisition of BendTech last summer. With solid core technology and expertise that nexpower can quickly propel to meaningful scale across our market footprint, we see power conversion as an increasingly critical layer of the system, optimizing solar power plant yield, enabling integration with battery storage and delivering power, quality management and buffering capabilities that are increasingly important for data center applications. We are intentionally leaning into investments to support this next phase of growth. While this will modestly impact near term profitability, we expect these investments to drive accelerated growth beginning next year. We’re increasingly confident to exceed Our previously disclosed 2030 revenue outlook. Overall, we’re very pleased with our performance in fiscal 26 and progress we’re making against our strategic plan. We believe the company is well positioned for continued growth, supported by strong backlog, increasing customer adoption of our platform and ongoing investment in innovation. With that, I’ll turn over to Howard and walk through our commercial performance and product innovation in more detail.
Howard Wanger (President)
Thank you Dan. We are really pleased with how we finished the quarter and the year starting with sales and bookings. This was one of our strongest quarters to date, contributing to a record year in bookings and backlog. We continue to have good diversity across customers, products and regions with 79% of FY26 bookings in the US and 21% from rest of world regions. In the US we continue to see strong demand across the country supported by a flight to quality and what we believe is our superior technology platform. Internationally, Europe was a highlight with record fiscal year bookings. The global pipeline continues to grow and we are seeing more and more countries becoming increasingly active with solar deployment. In particular, Europe, Middle East, India, Africa and Australia continue to strengthen as we look ahead. Demand remains healthy across our markets and overall pipeline visibility remains strong. Our customers are telling us consistently that their pipelines are moving forward overall as most projects continue to advance through permitting, financing and construction, project timing continues to remain manageable on a portfolio basis, with most project delivery schedules not deviating materially. Some projects do accelerate and others push out. This pattern is consistent with what we’ve seen historically. The quality of our bookings and backlog remains very high, providing excellent visibility into project timing and execution. It is important to note our bookings and backlog are based solely on firm orders and contracts. We do not include awards or late stage negotiations in our backlog or bookings numbers. Moving on to pricing, we had a modest gain in our overall ASP year on year due in part to higher attached rates of non tracker products and services in the US as we rolled out our expanded product portfolio, individual product pricing like trackers, continue to align with the broader solar cost reduction curve which is a healthy dynamic that drives ongoing solar power demand growth. We continue to invest in R and D and scaling initiatives to reduce costs. For example, just in the past year we reduced installation time by 20% for our flagship NX Horizon™ tracker according to a third party engineering study. We are also driving down lifetime cost of ownership by increasing performance and reliability. For example, we released the next generation of our tracker control system including TruCapture, which leads the industry in system performance gains. As discussed in November at Capital Markets Day, our strategy is to offer a complete solar technology platform which includes everything but the panel. Customers are increasingly looking for more integrated solutions to simplify project procurement, design and execution, reduce risk and improve overall system performance. Our platform is designed to meet this demand and we believe integration across the power plant is becoming a key differentiator for for Nextpower Inc. One example is the ramp of our innovative Tracker Plus foundation products which are already being deployed at a multi gigawatt scale with annualized bookings run rate now exceeding 100 million. The NX Horizon™ and NX Earth Trust™ foundation systems enable our trackers to be installed across all soil conditions with better quality and reduced install time and cost. The integration of our EBOS offerings is also being well received. Recall we purchased BendTech about one year ago and already our EBOS business is accelerating with record bookings in this past quarter and over 40% bookings growth year on year for this business. A few other highlights for the quarter are worth mentioning. First, we received initial purchase orders for our new NX Power Merge EBOS solution. Power merge enables Nextpower Inc to now offer both TrunkBus and CombinerBox EBOS solutions which together comprise the vast majority of utility scale systems. This provides a powerful platform to expand EBOS sales. Second, we signed another multi year gigawatt scale steel module frame agreement with JinkoSolar for US Manufactured steel frames. Steel module frames are simply a better engineered solution than traditional aluminum frames and are particularly well suited for robotic installation. And third, we are seeing early success in bundled deployments with projects incorporating multiple elements of our platform. Demand also remains strong for our core product set which includes trackers that handle more complex terrain in extreme weather environments. We surpassed 50 gigawatts of cumulative sales of our terrain following tracker called XTR and over 30 gigawatts of our NX Hail-Pro Tracker solutions. Just over the last fiscal year, our Hail Pro trackers conducted 4,605 hail stows with 57 events experiencing hail of up to 3 inches in diameter and a 99.99% module survival rate. We also recognized record true capture revenue in FY26. These products continue to differentiate us and are driving incremental value. Finally, we are very excited about the announced definitive agreement to acquire power conversion products along with the excellent team and supply capability. As Dan noted, this versatile platform can be used for solar storage and data center applications. The central Inverter system has a rating of 4.5 MVA for solar applications and 5.2 MVA for storage and data center use cases. The units are currently in UL and IEC certification testing which is expected to be completed by next quarter. We have already signed a conditional letter of intent with a key customer for over 100 megawatts of power conversion products and expect this business to generate revenue in the current fiscal year. In summary, we had an excellent quarter and year and we enter our new fiscal year with momentum. We are well positioned to achieve our FY27 outlook, supported by strong backlog, great customer partnerships and our expanded product platform. With that, I’ll turn it over to Chuck.
Chuck Boynton (Chief Financial Officer)
Thank you Howard and good afternoon everyone. First, I’ll walk through our financial results for the fourth quarter and fiscal 2026. For the fourth quarter revenue was 881 million, down 3% sequentially but above our expectations due to continued strength in North America, which included strong execution in our TruCapture business. It’s important to note this was the first quarter with our new JV in the Middle East. As you know, we are not consolidating the JV and as expected, this reduced our reported revenue by approximately 300 basis points. For the full fiscal year, revenue increased 20% to approximately 3.56 billion. We finished the year well above our initial plan. This was primarily due to a very strong US Market and a continuing leadership position in the global solar tracker market. Gross margins overachieved in Q4 primarily due to tariff recovery, record true capture and US revenue concentration, partially offset by elevated freight and logistics costs, particularly related to disruptions in the Middle East. Adjusted EBITDA for the fourth quarter was 202 million and 23% margin. This was above our expectations, driven by higher gross margins offset by growth in investments in OPEX, primarily R& D and infrastructure. For the full year, adjusted EBITDA was 854 million, well above our initial plan and our updated plan for Q4. …
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