Executive Summary / Key Takeaways

• Market Dominance & Strategic Evolution: Nextracker maintains its decade-long global leadership in solar trackers, leveraging a "flight to quality" trend among developers. The company is strategically evolving into a comprehensive solar power technology platform, expanding beyond trackers into foundations, electrical balance of system (eBOS), and cutting-edge AI/robotics solutions.
• Robust Financial Performance & Outlook: The company delivered strong Q1 FY26 results with 20% revenue growth and 23% adjusted EBITDA growth, alongside a record backlog exceeding $4.75 billion. Nextracker forecasts continued growth for FY26, with revenue guided between $3.2 billion and $3.45 billion and adjusted EBITDA between $750 million and $810 million.
• Technological Moat & U.S. Manufacturing Advantage: Nextracker's differentiated technology, including TrueCapture software and specialized tracker systems like Hail Pro and XTR, delivers quantifiable benefits in energy yield and risk reduction. Its extensive U.S. manufacturing footprint, with over 25 facilities, provides a unique 100% domestic content tracker, enabling significant tax credit advantages for customers.
• Strong Balance Sheet & Growth Investments: With $743 million in cash and no debt, Nextracker possesses a fortress balance sheet. This financial strength underpins strategic investments in R&D and acquisitions, supporting the long-term goal of non-tracker revenue contributing one-third of the business within five years.

• Resilience Amidst Policy Uncertainty: Despite an evolving U.S. policy environment and tariff discussions, Nextracker's diversified backlog, flexible supply chain, and strong customer relationships position it to manage potential headwinds and capitalize on the accelerating global demand for solar energy.

The Dawn of a Solar Power Platform

Nextracker Inc. (NASDAQ:NXT) stands at the forefront of the global solar revolution, having cemented its position as the world's leading solar tracker provider for ten consecutive years. Founded in 2013, Nextracker has grown from a specialized component supplier to a pivotal technology platform, enabling solar panels to precisely follow the sun's movement and optimize energy capture. This core capability, coupled with a relentless focus on innovation and operational excellence, has allowed Nextracker to ship over 130 gigawatts (GW) of solar tracker systems across six continents by March 31, 2025, serving utility-scale and distributed generation applications worldwide.

The company's journey has been marked by strategic foresight, beginning with the acquisition of BrightBox, a machine learning company, around 2015. This early move laid the groundwork for Nextracker's sophisticated software business, including its flagship TrueCapture adaptive tracking technology. This foundational strength in intelligent controls has been a key differentiator, allowing Nextracker to consistently deliver superior energy yield and operational efficiency to its customers.

The broader industry landscape underscores Nextracker's critical role. Solar energy is experiencing unprecedented growth, driven by escalating global electricity demand from AI data centers, electric vehicles, and expanding infrastructure. In 2024, solar accounted for over 80% of new U.S. generation capacity, and the International Energy Agency (IEA) predicts it will become the largest source of global electricity supply within the next decade. This structural demand, coupled with solar's economic competitiveness—evidenced by prices as low as $15 per megawatt-hour in unsubsidized markets like the Middle East—creates a powerful tailwind for Nextracker.

Technological Edge and Expanding Moat

Nextracker's competitive advantage is deeply rooted in its differentiated technology and continuous innovation. The company holds a formidable intellectual property portfolio, boasting a record 1,220 patents (646 issued, 574 pending) across mechanical, electronic, and software categories. This extensive patent library reflects a commitment to engineering excellence and solving real-world challenges at scale.

At the core of its offering is the NX Horizon solar tracking solution, which dynamically positions solar panels for optimal energy capture. Complementing this, the NX Horizon-XTR terrain-following tracker significantly expands the addressable market by enabling efficient deployment on sloped, uneven, and challenging terrains, radically reducing the need for expensive site grading. Sales of the XTR series were up 22% quarter-over-quarter in Q1 FY26, demonstrating rapid adoption. Another critical innovation is NX Horizon Hail Pro, which adds automatic stowing capabilities using weather service information. This technology is winning in the market due to its ability to reduce hail damage risk and insurance costs for project owners, with Hail Pro system sales increasing by 43% quarter-over-quarter in Q1 FY26.

Beyond hardware, Nextracker's TrueCapture energy yield management system stands out. This adaptive tracking software, now deployed in over 300 commissioned projects globally, empirically validates its ability to boost total energy yield. TrueCapture's advanced features, such as Zonal Diffuse and Split Boost, further enhance energy generation by intelligently adjusting tracker positions to optimize for diffuse light conditions and inter-row shading. While software revenue is expected to be approximately 2% of total revenue, its high gross margins contribute significantly to profitability. The company has tripled its R&D investment over the last three years, fueling these innovations and expanding its global design facilities in the U.S., Brazil, and India to localize technologies for regional needs.

Nextracker's commitment to innovation extends to its manufacturing capabilities. The company has strategically built out a robust U.S. supply chain, operating over 25 manufacturing facilities across the country. This enables the production of a 100% U.S. domestically manufactured tracker, with initial deliveries scheduled for Q3 FY25. This capability is a significant competitive advantage, allowing customers to qualify for 24.7 points towards the 40-45% domestic content threshold required for a 10% bonus Investment Tax Credit (ITC), a substantial financial benefit for U.S. projects.

Strategic Expansion: Beyond the Tracker

Nextracker's strategic evolution from a pure-play tracker company to a broader solar power technology platform is a key driver of its future growth. This transition is actively pursued through both organic development and targeted acquisitions, aiming for non-tracker revenue to constitute one-third of the business within five years.

The company initiated this pivot in the summer of 2024 with the acquisition of two specialty foundation businesses, including Ojjo, Inc. on June 20, 2024. These NX Foundation Solutions address challenging soil conditions, enabling quicker, safer, and more efficient solar project development. Cumulative sales of the NX Earth Truss foundation product have already surpassed 1 GW, demonstrating strong customer uptake and exceeding initial sales plans.

Further expanding its integrated offerings, Nextracker acquired Bentek Corporation on May 7, 2025, a pioneer in electrical balance of system (eBOS) manufacturing. This acquisition allows customers to source both tracker systems and eBOS components from a single, highly bankable supplier, streamlining project execution and reducing overall system costs. Bentek, a top 3-4 eBOS supplier in the U.S., brings a loyal customer base and robust product lines, and Nextracker is optimistic about significantly scaling its production and market reach.

In a bold move to enhance its digital platform, Nextracker also launched a new AI and robotics business initiative in May 2025, anchored by the acquisition of OnSight Technology, Inc. (May 9, 2025), Amir Robotics, and intellectual property from SenseHawk. These technologies encompass autonomous inspection robots, robotic cleaning, drones, and 3D site mapping. Integrated with Nextracker's control and monitoring systems, these solutions are designed to optimize performance, reduce operational and maintenance (O&M) costs, and lower project risks. The company has appointed Dr. Francesco Borrelli as its Chief AI and Robotics Officer, signaling a serious commitment to this emerging area, with a vision for a "robot as a service" model generating recurring revenue.

Financial Strength and Compelling Outlook

Nextracker's strategic initiatives are underpinned by a consistently strong financial performance and a robust balance sheet. For the first quarter of fiscal year 2026 (ended June 27, 2025), the company reported revenue of $864 million, a 20% increase year-over-year. Adjusted EBITDA grew 23% to $215 million, resulting in a healthy 25% adjusted EBITDA margin. The adjusted gross margin stood at 33%, benefiting from a 150 basis point uplift from 45X credits related to historical shipments.

The company anticipates structural gross margins in the low 30s and operating margins in the low 20s, reflecting a balanced approach to growth and profitability.

Looking at the full fiscal year 2025, Nextracker exceeded its own forecasts, achieving approximately $3 billion in revenue (an 18% increase over FY24) against a guidance of $2.8 billion to $2.9 billion. Adjusted EBITDA for FY25 reached a record $776 million, significantly surpassing the $600 million to $650 million forecast. This track record of over-delivery instills confidence in the company's forward guidance.

Nextracker's backlog hit a new record of over $4.75 billion in Q1 FY26, more than doubling since its IPO in February 2023. This substantial backlog provides excellent revenue visibility, with the vast majority of FY26 revenue already contracted. For the full fiscal year 2026, Nextracker expects revenue in the range of $3.2 billion to $3.45 billion, with adjusted EBITDA projected between $750 million and $810 million, and adjusted diluted EPS between $3.96 and $4.27 per share.

The company's liquidity position is a significant competitive advantage. Nextracker exited Q1 FY26 with $743 million in cash and no debt, boasting approximately $1.7 billion in total liquidity. This financial strength enables strategic investments, with plans to increase CapEx to approximately $100 million in FY26 and allocate around $110 million for payments related to recent and prior acquisitions. Despite these investments, Nextracker expects to generate over $450 million in adjusted free cash flow in FY26 and end the fiscal year with over $1 billion in cash, excluding any further M&A.

Competitive Positioning and Market Dynamics

Nextracker's market leadership is not merely a function of size but a testament to its differentiated value proposition in a highly competitive industry. While direct competitors like Array Technologies (ARRY) also offer solar tracking systems, Nextracker distinguishes itself through its superior software integration, broader product portfolio, and robust supply chain. Nextracker's TrueCapture software, for instance, provides an intelligent layer of optimization that many competitors lack, translating into higher energy yields and lower operational costs for customers. This technological edge, combined with its comprehensive platform approach (trackers, foundations, eBOS, AI/robotics), allows Nextracker to offer more integrated solutions than a pure-play tracker company like ARRY.

Compared to module manufacturers like First Solar (FSLR) or residential solar providers like SunPower (SPWR) and microinverter specialists like Enphase Energy (ENPH), Nextracker occupies a unique and critical position in the utility-scale solar value chain. Its products are designed to be compatible with a wide range of solar panels, including those from First Solar, ensuring flexibility for customers. Nextracker's focus on utility-scale projects, where its advanced tracking and software solutions deliver maximum impact, contrasts with the distributed generation focus of companies like ENPH and SPWR.

Nextracker's global footprint is another key differentiator. The company holds leading market positions in North America, Latin America, Oceania, and has recently achieved market leadership in Europe, highlighted by projects like the 550 MW Oricheio solar power plant in Greece. Its ability to sign contracts in 17 different countries in Q4 FY25 alone underscores its international reach. While international markets can be more competitive and capital-sensitive, Nextracker's differentiated technology and proven durability are highly valued, even in price-sensitive regions like the Middle East. Over 80% of Nextracker's Q3 FY25 revenue came from repeat customers, signaling strong customer loyalty and trust in its products and services.

Despite its strong position, Nextracker faces risks from an evolving U.S. policy environment, including the One Big Beautiful Bill Act (OBBBA) and potential executive orders impacting tax credits and safe harbor provisions. The introduction of Foreign Entity of Concern (FEOC) restrictions could also affect supply chain costs. However, Nextracker's substantial and geographically diversified backlog, coupled with its highly flexible U.S. supply chain (over 25 manufacturing facilities), provides a significant buffer against these uncertainties. The company's management remains confident in its ability to adapt, noting that the industry has historically grown through various administrations due to solar's compelling economics.

Conclusion

Nextracker Inc. is more than just a solar tracker company; it is rapidly transforming into a comprehensive solar power technology platform, strategically positioned to capitalize on the accelerating global demand for clean energy. Its decade-long market leadership, underpinned by a robust portfolio of patented, differentiated technologies like TrueCapture, Hail Pro, and XTR, provides a significant competitive moat. The company's proactive expansion into adjacent high-value segments such as foundations, eBOS, and AI/robotics, driven by customer demand and supported by a strong balance sheet, promises to unlock new revenue streams and enhance long-term value.

With a record backlog, consistent financial outperformance, and a clear strategic roadmap for growth and innovation, Nextracker is well-equipped to navigate the complexities of the evolving policy landscape and supply chain dynamics. The company's commitment to operational excellence, U.S. domestic manufacturing, and a "flight to quality" mindset among its Tier 1 customers reinforces its resilience. For discerning investors, Nextracker represents a compelling opportunity to participate in the structural growth of the utility-scale solar market, backed by a proven leader with a deepening technological and operational advantage.