Executive Summary / Key Takeaways

• Market Leadership & Strategic Evolution: Nextracker (NXT) maintains its dominant position as the global and U.S. solar tracker market leader for nine consecutive years, strategically expanding its offerings beyond core trackers into a comprehensive solar technology platform, aiming for one-third of revenue from non-tracker solutions within five years.
• Robust Financial Performance & Backlog: The company delivered stellar FY2025 results, with revenue growing 18% to $2.96 billion and Adjusted EBITDA surging 49% to $776.5 million. A record backlog exceeding $4.5 billion provides strong revenue visibility, with 87% expected to be realized in the next eight quarters.
• Technological Moat & Innovation: NXT's differentiated technology, including its independent-row NX Horizon trackers and advanced TrueCapture software (proven to reduce energy losses by 1-2%), provides superior performance and a competitive edge, supported by significant R&D investment and a robust patent portfolio.
• Strategic Acquisitions & Domestic Content: Recent acquisitions of foundation businesses (Ojjo, SPI) and the eBOS provider Bentek, coupled with its unique 100% U.S. domestic content tracker capability, are expanding NXT's addressable market, enhancing its integrated solution offering, and capitalizing on IRA incentives.
• Prudent Outlook & Investment for Growth: Despite macroeconomic uncertainties and policy shifts, NXT's FY226 guidance projects continued growth (revenue $3.2B-$3.4B, Adjusted EBITDA $700M-$775M), reflecting strategic investments in OpEx and CapEx to scale new solutions and solidify its long-term market position.

The Solar Powerhouse: Setting the Scene for Nextracker's Evolution

Nextracker Inc. (NASDAQ:NXT) stands at the forefront of the global solar energy revolution, a testament to its foundational vision and relentless innovation since its inception in 2013. At its core, Nextracker provides intelligent solar tracker systems that enable solar power plants to precisely follow the sun's movement, optimizing energy capture and significantly enhancing performance. This core offering has cemented its position as the global and U.S. market leader in gigawatts (GW) shipped for an impressive nine consecutive years.

The company's overarching strategy is clear: to evolve beyond a pure-play tracker manufacturer into a comprehensive solar technology platform supplier. This strategic pivot is driven by the burgeoning global demand for electricity, fueled by the rapid expansion of AI data centers, electric vehicles, and widespread electrification efforts. This unprecedented surge in demand necessitates terawatts of new generation capacity within the next five years, positioning solar as the fastest-growing and most cost-effective power source. Nextracker aims to capture a larger share of this expanding market by offering a broader suite of integrated solutions, with a stated goal for non-tracker revenue to constitute one-third of its business within five years.

Technological Edge: The Engine of Differentiation

Nextracker's competitive advantage is deeply rooted in its differentiated technology, which offers tangible, quantifiable benefits to solar project developers and owners. The company's flagship NX Horizon solar tracker system is built on an independent-row architecture. Unlike traditional linked-row systems, each row moves independently, providing superior flexibility, redundancy, and ease of maintenance. This design contributes to a lower Levelized Cost of Energy (LCOE) and up to 25% more energy generation compared to fixed-tilt systems. The self-powered, decentralized architecture allows for quicker commissioning and enhanced resilience against adverse weather.

Beyond hardware, NXT's software innovations further solidify its technological moat:

• TrueCapture: This advanced energy yield management system leverages the independent-row design and real-time sensor data to dynamically adjust tracker angles based on topography, sun position, and diffuse irradiance. This intelligent optimization typically reduces energy losses by 1-2%. Compared to basic tracking features offered by some competitors, TrueCapture provides 5-8% better performance optimization and 10-15% faster processing speeds for large-scale operations. Over 300 projects globally have been commissioned with TrueCapture, demonstrating its widespread adoption and proven efficacy.
• NX Navigator: This solution provides plant owners with critical monitoring, control, and protection capabilities. Its intuitive dashboard allows for precise visualization of operational data and includes safety features like Hurricane/Typhoon Stow and Hail Stow modes, which automatically command trackers to extreme tilt positions to mitigate damage from severe weather.

NXT's commitment to innovation extends to its hardware portfolio:

• NX Horizon-XTR: Launched in March 2022, this terrain-following tracker conforms to natural ground undulations, significantly reducing the need for costly and environmentally impactful earthworks. In FY2025, NXT sold 17 GW of its XTR variants, highlighting strong market acceptance for this solution on challenging sites.
• NX Horizon Hail Pro: Addressing a critical concern for asset owners, this product line (including Hail Pro-60 and Hail Pro-75) offers automatic stowing capabilities, with over 9 GW sold in FY2025.
• NX Horizon Low Carbon: Introduced in April 2024, this is the industry's first solar tracker solution with a reduced carbon footprint, achieved through locally sourced materials like electric arc furnace (EAF) manufactured and recycled steel, and optimized logistics.

This continuous stream of innovation is backed by substantial R&D investment, which has tripled over recent years. Nextracker employs over 300 R&D professionals and operates three Centers for Solar Excellence globally (Fremont, CA; Hyderabad, India; São Paulo, Brazil) to incubate and commercialize PV technologies. The company's robust intellectual property portfolio boasts 1,220 patents (646 issued, 574 pending), underscoring its leadership in solar technology. For investors, this technological differentiation translates directly into a strong competitive moat, enabling NXT to command premium pricing, drive higher performance for customers, and generate recurring revenue streams from its software offerings, ultimately bolstering its market leadership and long-term growth prospects.

Strategic Expansion: Building a Comprehensive Platform

Nextracker's strategic evolution from a pure-play tracker company is gaining significant momentum through targeted acquisitions and organic development of adjacent technologies. This expansion is designed to offer customers a more holistic, integrated solution for solar power plant development.

In fiscal year 2025, Nextracker launched NX Foundation Solutions by acquiring Ojjo, Inc. and Solar Pile International (SPI)'s foundation businesses for approximately $144.7 million in cash. This move addresses a critical need in the market, as 20-30% of solar sites are considered "difficult" due to challenging soil conditions (e.g., hard rock, expansive clay, frost-heave, or swampy terrains). Ojjo's technology, for instance, can perform the work of two to three legacy machines with half the equipment, offering significant efficiency gains. The integration of these foundation technologies allows NXT to provide a more complete solution, streamlining project timelines, reducing costs, and minimizing environmental impact. The company has already booked 1 GW with its new foundation business, indicating strong initial customer adoption.

Further solidifying its platform strategy, Nextracker announced the acquisition of U.S.-based Bentek Corporation in May 2025 for approximately $119 million. Bentek is a pioneer in electrical Balance of Systems (eBOS) components, which collect and transport electricity from solar panels to the grid. This acquisition enables Nextracker to offer streamlined procurement and project logistics from a single source, providing integrated solutions that reduce system costs and simplify utility-scale solar deployment. Bentek is recognized as a top 3-4 eBOS supplier in the U.S., and Nextracker plans to leverage its financial support and system design expertise to scale Bentek's operations, potentially expanding its offerings overseas.

Beyond these acquisitions, Nextracker is also exploring new applications like AgriPV, which combines solar power generation with agricultural activities. This dual land-use approach offers a unique value proposition, providing additional income streams for landowners and enhancing community acceptance for solar projects. Nextracker's independent-row tracker architecture is particularly well-suited for AgriPV applications, allowing for easier navigation and co-optimization with crop needs.

This strategic expansion into foundations and eBOS, coupled with ongoing exploration of areas like AgriPV, significantly expands Nextracker's total addressable market. By offering a more comprehensive suite of products and services, the company deepens its customer relationships, creates cross-selling opportunities, and enhances its overall value proposition, positioning it for sustained growth and increased relevance in the evolving solar industry.

Financial Performance: A Trajectory of Strength

Nextracker's financial performance in fiscal year 2025 underscores its operational effectiveness and the robust demand for its solutions. The company reported revenue of $2.96 billion, an impressive 18% increase year-over-year from $2.50 billion in FY2024. This growth was primarily driven by a 29% increase in gigawatts (GW) delivered, reaching approximately 34 GW in FY2025. The fourth quarter of FY2025 alone saw record revenue of $924 million, up 26% year-over-year.

Profitability metrics also demonstrated significant strength. Adjusted Gross Profit for FY2025 reached $1.02 billion, with the Adjusted Gross Margin expanding to 34.6%, up from 28.1% in FY2024. This improvement was attributed to disciplined pricing, favorable cost absorption (including lower freight and logistics costs), and the benefits from its expanded global supply chain. A notable contributor was the 45X Credit, which provided a $224.9 million reduction to cost of sales in FY2025. The company's software offerings, particularly TrueCapture, also contributed to strong gross margins due to a higher rate of commissioned projects.

Adjusted EBITDA for FY2025 surged by 49% to $776.5 million, resulting in an Adjusted EBITDA Margin of 26.2%. This strong performance reflects the company's ability to scale operations efficiently. While Selling, General, and Administrative (SG&A) expenses increased by 58% (driven by stock-based compensation and expansion of sales/support functions) and Research and Development (R&D) expenses rose by 87% (reflecting increased investment in innovation and acquisitions), these investments are strategic and aimed at fueling future growth.

Nextracker maintains a formidable financial position. As of March 31, 2025, the company reported $766 million in cash and no debt, having fully retired its $150 million term loan in FY2025. Its total liquidity stands at approximately $1.7 billion.

The company's Adjusted Free Cash Flow for FY2025 was a robust $622 million, demonstrating strong cash generation capabilities. This financial strength provides significant flexibility for continued strategic investments and potential capital returns.

The company's backlog has consistently grown, reaching significantly over $4.5 billion by the end of FY2025, more than doubling since its IPO in February 2023 when it stood at $2.1 billion. This record backlog provides excellent revenue visibility, with 87% of it expected to be realized over the next eight quarters, and the majority within the next four quarters. This strong financial trajectory, coupled with a robust backlog, underscores Nextracker's consistent execution, operational efficiency, and ability to capitalize on market opportunities.

Competitive Positioning: Dominance Through Differentiation and Scale

Nextracker's competitive standing is characterized by its entrenched market leadership and a strategic focus on differentiation that sets it apart from rivals. For nine consecutive years, Nextracker has been the global and U.S. market share leader, further increasing its lead in 2024 across key regions like the U.S., Europe, Latin America, and Australia. This sustained dominance is a direct result of a "flight to quality" among solar developers and owners, who increasingly prioritize reliability, performance, and the financial strength of their partners.

Direct Competitors:
Nextracker's primary direct competitors in the solar tracker market include Array Technologies (ARRY), GameChange Solar, PV Hardware, Arctech Solar, TrinaSolar Co., Ltd., and Shoals Technologies Group (SHLS).

• Array Technologies: As NXT's closest publicly traded rival, ARRY holds an estimated 30-35% market share. While ARRY focuses on cost-efficient hardware, NXT's technology, particularly its TrueCapture software, offers 5-10% greater energy efficiency and 10-15% faster processing speeds for large-scale operations. This technological edge allows NXT to command premium pricing and achieve higher gross margins (34.6% for NXT in FY25 vs. ARRY's 33% in 2024). NXT's diversified global supply chain (over 90 manufacturing sites in 19 countries) also provides a crucial advantage against ARRY's potential vulnerability to supply chain disruptions.
• First Solar (FSLR): While primarily a solar module manufacturer, FSLR's integrated systems offer indirect competition. FSLR's modules are known for their efficiency, potentially offering 10-15% lower operating costs per watt. However, NXT's specialized software provides superior performance optimization for the entire tracking system. FSLR's revenue growth (70% in Q3 2024) has been higher than NXT's (18% in FY25), reflecting different market dynamics and product focuses.
• Enphase Energy (ENPH): ENPH, a leader in inverters and microinverters, primarily serves the residential and distributed generation markets, contrasting with NXT's utility-scale focus. While ENPH boasts higher gross margins (47% in 2024), NXT's strength lies in its scale and integration capabilities for large utility projects across 40+ countries.

Indirect Competitors:
Nextracker also competes indirectly with fixed-tilt solar systems, which are 30-50% cheaper upfront but 10-20% less efficient. Other alternatives include wind energy and emerging technologies like floating solar. NXT's ability to demonstrate superior LCOE and ROI through enhanced energy yield and reduced operational costs is key to maintaining its competitive edge against these alternatives.

Nextracker's Moats:
NXT's competitive advantages are multifaceted:

• Proprietary Technology: Its independent-row architecture, TrueCapture software, and specialized products like NX Horizon-XTR and Hail Pro provide a significant performance advantage, translating into higher energy yield and lower operational risks for customers.
• Global Scale and Supply Chain: With over 90 manufacturing facilities in 19 countries, including more than 20 U.S. fabricators, NXT boasts an annual capacity of over 30 GW for its primary components in the U.S. This robust and geographically optimized supply chain ensures faster project deployment, minimizes logistics costs, and enhances customer confidence.
• Domestic Content Leadership: Nextracker is uniquely positioned as the first and only company shipping a 100% U.S. domestic content tracker. This capability allows customers to qualify for 24.7 points towards the 40-45% domestic content threshold required for the lucrative 10% bonus Investment Tax Credit (ITC) under the IRA, a significant differentiator in the U.S. market.
• Strategic Expansion: The recent acquisitions of foundation businesses and Bentek (eBOS) are expanding NXT's product portfolio, allowing it to offer more integrated solutions and capture a larger share of the project value chain.

While NXT faces challenges such as higher upfront costs for some of its advanced products and project delays primarily due to permitting and interconnection issues (rather than AD/CVD concerns), its strong competitive moats enable it to maintain pricing discipline and market share. The company's focus on innovation, operational excellence, and strategic expansion positions it to continue its dominance in the rapidly growing solar energy sector.

Outlook and Guidance: Sustained Growth and Strategic Investment

Nextracker's outlook for fiscal year 2026 reflects a confident stance on continued growth, underpinned by its strategic initiatives and robust market position. The company has provided concrete guidance:

• Revenue: Expected to be in the range of $3.2 billion to $3.4 billion.
• Adjusted EBITDA: Projected between $700 million and $775 million.
• Adjusted Diluted EPS: Forecasted in the range of $3.65 to $4.03.

This guidance signals management's commitment to "leaning in on growth" and accelerating strategic investments. Key assumptions supporting this outlook include the sustained strong global demand for solar energy, driven by the increasing electricity needs of AI data centers, electric vehicles, and broader electrification. Management anticipates a stable pricing environment and effective cost management, projecting structural gross margins for FY2026 to remain in the low-30s, even considering geographic mix, tariffs, and the integration costs of recent acquisitions.

To fuel its strategic expansion, Nextracker plans to increase its operating expenses (OpEx) by approximately 100 basis points as a percentage of revenue in FY2026, primarily for building out adjacent solutions like Bentek's eBOS offerings. Capital expenditures (CapEx) are also expected to increase to approximately $100 million, supporting both organic growth and the integration of new acquisitions. Despite these investments, the company anticipates generating more than $450 million in free cash flow in FY2026, demonstrating its strong cash generation capabilities and financial discipline.

Regarding policy uncertainties, particularly the proposed U.S. tax bill changes, Nextracker's management believes there will be "little impact for the next few years" on their realized financial results. Any effects are expected to be more intermediate-term, impacting future bookings rather than current projects. The company also expects the 45X credits to continue contributing approximately 11% of its U.S. revenue, reinforcing the benefits of its domestic manufacturing strategy.

This forward-looking perspective highlights Nextracker's proactive approach to capitalizing on the massive opportunities in the solar industry. By strategically reinvesting its strong cash flows into expanding its platform and enhancing its technological capabilities, Nextracker is positioning itself for multi-year growth and solidifying its leadership in the global energy transition.

Conclusion

Nextracker stands as a formidable force in the global solar industry, having consistently demonstrated market leadership, technological prowess, and robust financial performance. Its journey from a pioneering solar tracker company to an expanding solar technology platform supplier is a compelling narrative of strategic foresight and operational excellence. The company's differentiated NX Horizon trackers, coupled with its intelligent TrueCapture software, provide a quantifiable edge in energy yield and operational efficiency, forming a strong competitive moat.

The strategic acquisitions of foundation businesses and the recent integration of Bentek's eBOS solutions are pivotal steps in Nextracker's evolution, significantly broadening its addressable market and enabling a more integrated, value-added offering for customers. This, combined with its unparalleled U.S. domestic content capabilities and globally diversified supply chain, positions NXT to capitalize on the accelerating demand for clean energy. While macroeconomic uncertainties and policy shifts present ongoing challenges, Nextracker's record backlog, strong cash generation, and disciplined investment strategy provide a solid foundation for sustained growth. For discerning investors, Nextracker represents a compelling opportunity to participate in the long-term growth of the solar sector, driven by a company that consistently delivers on its promises and strategically invests to maintain its leadership in a rapidly electrifying world.