Nextpower (Nextracker) 2027 Q1 Earnings Call

Good afternoon, everyone. Welcome to Nextpower's first quarter fiscal year 2027 earnings call. I'm Sarah Lee, Nextpower's Head of Investor Relations, and I'm joined by Dan Shugar, our CEO and Founder, Howard Wenger, 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. 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 10-Q, and annual report on Form 10-K, 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. Now I'll turn the call over to our CEO and Founder, Dan.

Good afternoon. Thank you for joining us. We are very pleased by the company's performance and positioning as we report on the first quarter of our fiscal year. Nextpower delivered a strong quarter, characterized by continued bookings momentum and backlog growth, operational discipline and execution, and significant progress in the expansion of our technology platform. We achieved a record quarterly revenue of $935 million, with adjusted EBITDA of $233 million. Backlog grew to over $5.5 billion, reflecting healthy customer demand and booking strength across both our core tracker business and our expanding portfolio of non-tracker products. On top of the $5.5 billion, Nextpower Energy Storage brings over $300 million of additional backlog. We demonstrated continued progress with our long-term strategy of solving customer problems and delivering tangible value and performance.

For most of our history, this meant developing tracker products that help customers lower LCOE, accelerate installation, improve reliability, reduce risk, and increase energy yield. That approach led to global market leadership in solar trackers. According to Wood Mackenzie for 2025 tracker market share, Nextpower was recognized as the number one solar tracker company in the U.S. and globally for the 11th consecutive year, growing share to 55% in the U.S. and 30% worldwide. By innovating tracker solutions that solve complex project challenges and improve financial outcomes, we have earned trust and repeat business from our global tier 1 customer base and deployed our technology across projects totaling more than 160 gigawatts. Each project deepens our customer relationships and gives us greater insight into evolving needs of utility-scale solar and storage customers.

Those insights guide how we invest, both organically and through disciplined M&A, to enhance the value we can deliver to our customers. Customers continue to ask us to do more as utility-scale solar, storage, and critical power infrastructure projects become larger and more complex. With the acquisition of Prevalon, which closed last Monday, we launched Nextpower Energy Storage. Prevalon brings us a proven team with an excellent track record across 6 gigawatt hours of turnkey storage solutions, spanning applications from dispatchable peaking power to data center stabilization, serving blue-chip customers. Solar and storage are highly symbiotic technologies for electric grids, enabling low-cost energy and rapid capacity deployment for dispatchable firm power. Energy storage also represents a significant growth factor and opportunity for Nextpower, as it is projected to grow at 33% CAGR from 2025 to 2028.

Since our last call, we also announced the pending acquisition of Zimmermann PV-Steel Group, a very well-respected company based in Germany with an excellent European footprint. Upon closing, Zimmermann is expected to expand Nextpower's offering with five new product lines, extending the company's reach into 15 additional countries and creating cross-selling opportunities for Nextpower eBOS, power conditioning systems, and batteries. These transactions follow our customer-focused playbook, identify critical pain points Invest in differentiated technology, scale through Nextpower's global footprint and trust relationships, and reinvest to strengthen the platform. As we execute on this strategy, we believe we can improve customer outcomes, increase our project participation scope, strengthen Nextpower's competitive moat, and generate attractive long-term returns for shareholders. I also want to proactively address questions around Tuesday's announcement by the FCC related to imported inverters.

Nextpower launched a power electronics business to solve customer needs in inverters, which include better operating performance, stronger domestic manufacturing, enhanced cybersecurity, and support from an investment-grade U.S. company that has a strong product service culture. Our new inverter business satisfies these needs and helps to further de-risk customers as we may see additional U.S. government restrictions on overseas inverters. We're pleased to announce today that our acquisition of the Apex inverter business has closed, and that our product has achieved Underwriters Laboratories UL 1741 SB certification. We are further accelerating our U.S. manufacturing build-out across multiple locations. We expect deliveries to begin in early 2027 and plan to have over 10 gigawatts of U.S. capacity online next summer. Our UL-certified Apex inverter is designed to enhance cybersecurity using site-level optical fiber communications and is designed to meet all government requirements.

Customer response to our inverter technology, manufacturing, cyber, domestic manufacturing, and service plan has been very strong. We're doubling down on ramp plan for these essential products and services with the goal of having the highest availability operating inverters for solar and storage power plant owners. The current market environment represents a structural tailwind for our business. Global electricity demand continues to accelerate, driven by electrification, industrial growth, artificial intelligence, data centers, and the need for more reliable and resilient power infrastructure. Solar and storage are the fastest, lowest cost, and proven ways to add new capacity. As this market moves forward toward terawatt scale annual deployment volumes, customers need partners that can deliver high-performing, reliable energy infrastructure solutions at scale. We believe Nextpower is uniquely positioned to meet that demand.

We will be hosting our second Capital Markets Day on November 16th at RE+ in Las Vegas, where we will provide an update to our 2030 outlook that will reflect a material acceleration due to our strong market momentum, recent strategic acquisitions, and exemplary operational execution. We look forward to seeing many of you there. With that, I'll turn it over to Howard.

Thank you, Dan. Q1 was another great quarter for Nextpower, marked by record revenue, strong customer bookings and backlog growth, and operational execution. We continue to see a flight to quality in the market and increasing validation of our platform and bundling strategy. Customers are choosing Nextpower because of our technology, execution, supply chain, bankability, and customer service. We believe these factors are propelling company growth and show up in our sales backlog and market share. We had another excellent bookings quarter with strong demand both in the U.S. and international markets. Tracker sales drove sequential backlog growth to a new record high. We are now also benefiting from meaningful sales and revenue contributions from non-tracker products, starting with eBOS, which serves as a proof point of how we are efficiently integrating and operationalizing acquisitions.

We had record eBOS bookings in the quarter, and the product segment is on track to contribute well over $100 million of revenue for the year. Our eBOS offering has strengthened further with the recent UL certification of our unique and differentiated NX PowerMerge solution. We have currently booked 850 megawatts of PowerMerge, with deliveries expected to begin in the current quarter. Secondly, our foundations business is also growing with a 50% year-over-year increase in the quarter. Thirdly, our TrueCapture control system delivered record revenue and backlog in the quarter, reinforcing Nextpower's industry-leading position. We are also pleased to announce in the non-tracker category that the Apex inverter is now UL certified and is applicable for both solar and storage markets.

This certification paves the way for broad commercialization in the U.S. market. We are highly focused on rapidly building out a scalable and flexible supply chain for these products. Finally, we are very excited to add energy storage to the Nextpower platform. With the launch of Nextpower Energy Storage, we expand our ability to serve our solar customers with a broader set of integrated solutions while expanding our customer base to include hyperscalers, standalone storage developers, and a large range of utility customers. Moving to markets and the demand picture. The U.S. remains our best market globally. We are seeing continued positive demand signals as project pipelines are growing, getting permitted, and reaching construction. We have very strong and trusted customer relationships in the U.S., and this is helping us accelerate growth in our non-tracker business and puts us in great position for addressing the storage segment.

Internationally, we secured a tracker order for the largest solar plus storage project to date in Australia, a 721-megawatt project incorporating significant locally made steel content. We also continue to expand our global customer footprint in the quarter, taking our customer reach to over 50 countries. The acquisition of Zimmermann PV, when closed, will extend our reach further with 15 additional countries. Zimmermann is a very well-respected brand with a fantastic team. With more than 20 gigawatts of cumulative projects and well-established customer relationships across Europe. Importantly, the acquisition of Zimmermann will expand our ability to serve a much broader set of ground mount solar applications with their product portfolio. For example, roughly half of Europe's ground mount PV installations are fixed tilt at about 25 gigawatts per year. Zimmermann brings deep expertise in fixed tilt and other structural solutions that we expect will significantly increase our addressable market.