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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
____________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 31, 2024
Nextracker Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-41617 | 36-5047383 |
|
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
6200 Paseo Padre Parkway, Fremont, California 94555
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (510) 270-2500
____________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of exchange on which registered | ||
| Class A Common Stock, par value $0.0001 | NXT | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On January 31, 2024, Nextracker Inc. (the “Company”) issued a press release announcing its results for the third fiscal quarter ended December 31, 2023. A copy of the press release is attached as Exhibit 99.1 to this current report on Form 8-K and is incorporated by reference herein.
The information in this current report on Form 8-K and the exhibits attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description |
| 99.1 | Press Release, dated January 31, 2024 |
| 104 | Cover Page Interactive Data (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Nextracker Inc. | ||
| By: | /s/ Léah Schlesinger | |
| Léah Schlesinger | ||
| General Counsel, Chief Ethics and Compliance Officer | ||
Date: January 31, 2024
Exhibit 99.1
Nextracker Reports Q3 FY24 Financial Results
Achieves Record Revenue and Profits; Raises FY24 Guidance
January 31, 2024
FREMONT, CALIF.-- Nextracker (Nasdaq: NXT), one of the world’s leading providers of intelligent solar tracker and software solutions, today announced financial results for the third quarter ended December 31, 2023.
Q3 FY2024 Financial Highlights:
| • | Revenue $710 million, up 38% YoY |
| • | GAAP net income $128 million, diluted EPS $0.87 |
| • | Adjusted EBITDA $168 million, up 168% YoY |
| • | Adjusted net income $142 million, adjusted diluted EPS $0.96 |
Q3 FY2024 Business Highlights:
| • | Strong execution, significant revenue growth of 38% year-over-year, and supply chain optimization |
| • | Record backlog; continued demand strength globally, achieved 10-gigawatt milestone in India, Middle East, and Africa regions for projects in operation or under fulfillment |
| • | High-quality balance sheet with total liquidity of approximately $800 million; strong operating cash flow of $317 million and adjusted free cash flow of $314 million year-to-date |
“Nextracker achieved a record third quarter, outperforming across revenue, profit and backlog, which reflects strong execution and spotlights our capability to meet customer requirements. Underpinned by product differentiation that is gaining momentum in the marketplace, we are raising our annual guidance once again,” said Dan Shugar, Founder and CEO of Nextracker. “As the world transitions to renewable energy and with solar leading new power generation, we are well positioned as the global leader in trackers, and we’re just getting started.”
Raised FY2024 Annual Guidance
| • | Revenue: $2.425 billion to $2.475 billion (vs. previous $2.3 billion to $2.4 billion) |
| • | GAAP Net Income: $374 million to $429 million (vs. previous $237 million to $266 million) which includes an estimated $50 million to $80 million of benefit from IRA 45X tax credit vendor rebates |
| • | GAAP diluted EPS: $2.53 to $2.90 (vs. previous $1.60 to $1.80) |
| • | Adjusted EBITDA: $475 million to $500 million (vs. previous $390 million to $440 million) which excludes stock-based compensation expense, net intangible amortization, and IRA 45X tax credit vendor rebates |
| • | Adjusted diluted EPS: $2.55 to $2.75 (vs. previous $1.95 to $2.15) which excludes $0.30 for stock-based compensation expense and net intangible amortization, and excludes $0.28 to $0.45 of benefit from IRA 45X tax credit vendor rebates |
Q3 FY2024 Earnings Call
January 31, 2024
1:30p.m. PT / 4:30p.m. ET
Live webcast available on investors.nextracker.com
The webcast replay, along with supporting materials, will be available on the Nextracker IR website following the conclusion of the event.
About Nextracker
Nextracker is a leading provider of intelligent, integrated solar tracker and software solutions used in utility-scale and ground-mounted distributed generation solar projects around the world. Our products enable solar panels power plants to follow the sun’s movement across the sky and optimize plant performance. With power plants operating in more than 30 countries worldwide, Nextracker offers solar tracker technologies that increase energy production while reducing costs for significant plant ROI. For more information, please visit www.nextracker.com.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the trends for future solar adoption and Nextracker’s outlook for fiscal 2024 and other periods. These forward-looking statements are based on various assumptions and on the current expectations of Nextracker’s management. These statements involve risks and uncertainties that could cause the actual results to differ materially from those anticipated by these forward-looking statements, including risks and uncertainties that are described under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Nextracker’s most recent Quarterly Report on form 10-Q, Annual Report on Form 10-K and other documents that Nextracker has filed or will file with the Securities and Exchange Commission. There may be additional risks that Nextracker is not aware of or that Nextracker currently believes are immaterial that could also cause actual results to differ from the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements. Nextracker assumes no obligation to update these forward-looking statements.
Use of Non-GAAP Financial Information
An explanation and reconciliation of non-GAAP financial measures to GAAP financial measures is presented in Schedules IV and V attached to this press release, and can be found, along with other financial information including the Earnings Presentation, on the investor relations section of our website at investors.nextracker.com.
Schedule I
Nextracker Inc.
Unaudited condensed consolidated statements of operations and comprehensive income
(In thousands, except share and per share data)
| Three-months ended | Nine-months ended | |||||||||||||||
| December 31, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | |||||||||||||
| Revenue | $ | 710,426 | $ | 513,370 | $ | 1,763,326 | $ | 1,383,742 | ||||||||
| Cost of sales | 500,701 | 431,111 | 1,290,747 | 1,187,081 | ||||||||||||
| Gross profit | 209,725 | 82,259 | 472,579 | 196,661 | ||||||||||||
| Selling, general and administrative expenses | 48,356 | 18,613 | 126,865 | 55,475 | ||||||||||||
| Research and development | 12,897 | 4,984 | 29,270 | 13,283 | ||||||||||||
| Operating income | 148,472 | 58,662 | 316,444 | 127,903 | ||||||||||||
| Interest and other income, net | (18,307 | ) | (2,366 | ) | (8,489 | ) | (1,118 | ) | ||||||||
| Income before income taxes | 166,779 | 61,028 | 324,933 | 129,021 | ||||||||||||
| Provision for income taxes | 38,818 | 18,442 | 51,918 | 35,218 | ||||||||||||
| Net income and comprehensive income | 127,961 | 42,586 | 273,015 | 93,803 | ||||||||||||
| Less: Net income attributable to Nextracker LLC prior to the reorganization transactions | — | 42,586 | — | 93,803 | ||||||||||||
| Less: Net income attributable to redeemable non-controlling interests | 86,565 | — | 171,937 | — | ||||||||||||
| Net income attributable to Nextracker Inc. | $ | 41,396 | $ | — | $ | 101,078 | $ | — | ||||||||
| Earnings per share attributable to the stockholders of Nextracker Inc. (1) | ||||||||||||||||
| Basic | $ | 0.67 | N/A | $ | 1.78 | N/A | ||||||||||
| Diluted | $ | 0.87 | N/A | $ | 1.86 | N/A | ||||||||||
| Weighted-average shares used in computing per share amounts: | ||||||||||||||||
| Basic | 62,108,835 | N/A | 56,789,399 | N/A | ||||||||||||
| Diluted | 147,344,370 | N/A | 147,160,053 | N/A | ||||||||||||
| (1) | Basic and diluted earnings per share is applicable only for the period following the initial public offering (“IPO”) and the related Transactions. |
Schedule II
Nextracker Inc.
Unaudited condensed consolidated balance sheets
(In thousands)
| As of December 31, 2023 | As of March 31, 2023 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 367,818 | $ | 130,008 | ||||
| Accounts receivable, net of allowance of $1,884 and $1,768, respectively | 365,271 | 271,159 | ||||||
| Contract assets | 351,545 | 297,960 | ||||||
| Inventories | 202,662 | 138,057 | ||||||
| Other current assets | 131,664 | 35,081 | ||||||
| Total current assets | 1,418,960 | 872,265 | ||||||
| Property and equipment, net | 8,369 | 7,255 | ||||||
| Goodwill | 265,153 | 265,153 | ||||||
| Other intangible assets, net | 1,633 | 1,321 | ||||||
| Deferred tax assets and other assets | 401,010 | 273,686 | ||||||
| Total assets | $ | 2,095,125 | $ | 1,419,680 | ||||
| LIABILITIES, REDEEMABLE INTERESTS AND STOCKHOLDERS' DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | 374,919 | 211,355 | ||||||
| Accrued expenses | 70,178 | 59,770 | ||||||
| Deferred revenue | 180,021 | 176,473 | ||||||
| Due to related parties | 58,292 | 12,239 | ||||||
| Other current liabilities | 76,027 | 47,589 | ||||||
| Total current liabilities | 759,437 | 507,426 | ||||||
| Long-term debt | 144,762 | 147,147 | ||||||
| TRA liability and other liabilities | 439,396 | 280,246 | ||||||
| Total liabilities | 1,343,595 | 934,819 | ||||||
| Redeemable non-controlling interest | 3,868,543 | 3,560,628 | ||||||
| Total stockholders' deficit | $ | (3,117,013 | ) | $ | (3,075,767 | ) | ||
| Total liabilities, redeemable interests, and stockholders' deficit | $ | 2,095,125 | $ | 1,419,680 | ||||
Schedule III
Nextracker Inc.
Unaudited condensed consolidated statements of cash flows
(In thousands)
| Nine-months ended | ||||||||
| December 31, 2023 | December 31, 2022 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 273,015 | $ | 93,803 | ||||
| Depreciation and amortization | 3,138 | 3,594 | ||||||
| Changes in working capital and other, net | 41,328 | (25,015 | ) | |||||
| Net cash provided by operating activities | 317,481 | 72,382 | ||||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment | (3,850 | ) | (2,653 | ) | ||||
| Proceeds from the disposition of property and equipment | — | 24 | ||||||
| Net cash used in investing activities | (3,850 | ) | (2,629 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Repayments of bank borrowings and long-term debt | (2,813 | ) | — | |||||
| Net proceeds from issuance of Class A shares | 552,009 | — | ||||||
| Purchase of LLC common units from Yuma, Inc. | (552,009 | ) | — | |||||
| Distribution to non-controlling interest holders | (64,365 | ) | — | |||||
| Net transfers (to) from Parent | (8,335 | ) | 1,258 | |||||
| Other financing activities | (308 | ) | — | |||||
| Net cash provided by (used in) financing activities | (75,821 | ) | 1,258 | |||||
| Effect of exchange rate on cash and cash equivalents | — | — | ||||||
| Net increase in cash and cash equivalents | 237,810 | 71,011 | ||||||
| Cash and cash equivalents beginning of period | 130,008 | 29,070 | ||||||
| Cash and cash equivalents end of period | $ | 367,818 | $ | 100,081 | ||||
| Nine-months ended | ||||||||
| Adjusted free cash flow | December 31, 2023 | December 31, 2022 | ||||||
| Net cash provided by operating activities | $ | 317,481 | $ | 72,382 | ||||
| Purchases of property and equipment | (3,850 | ) | (2,653 | ) | ||||
| Proceeds from the disposition of property and equipment | — | 24 | ||||||
| Adjusted free cash flow | $ | 313,631 | $ | 69,753 | ||||
Schedule IV
Nextracker Inc.
Reconciliation of GAAP to Non-GAAP Financial measures
(In thousands, except percentages, shares and per share data)
| Three-months ended | Nine-months ended | |||||||||||||||
| December 31, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | |||||||||||||
| GAAP gross profit | $ | 209,725 | $ | 82,259 | $ | 472,579 | $ | 196,661 | ||||||||
| Stock-based compensation expense | 2,497 | 350 | 7,668 | 1,105 | ||||||||||||
| Intangible amortization | 63 | 63 | 188 | 188 | ||||||||||||
| Non-GAAP gross profit | $ | 212,285 | $ | 82,672 | $ | 480,435 | $ | 197,954 | ||||||||
| GAAP operating income | $ | 148,472 | $ | 58,662 | $ | 316,444 | $ | 127,903 | ||||||||
| Stock-based compensation expense | 13,037 | 940 | 39,895 | 2,790 | ||||||||||||
| Intangible amortization | 63 | 63 | 188 | 1,145 | ||||||||||||
| Legal costs and other | — | — | — | 1,441 | ||||||||||||
| Non-GAAP operating income | $ | 161,572 | $ | 59,665 | $ | 356,527 | $ | 133,279 | ||||||||
| GAAP net income | $ | 127,961 | $ | 42,586 | $ | 273,015 | $ | 93,803 | ||||||||
| Stock-based compensation expense | 13,037 | 940 | 39,895 | 2,790 | ||||||||||||
| Intangible amortization | 63 | 63 | 188 | 1,145 | ||||||||||||
| Adjustment for taxes | 841 | (193 | ) | (4,040 | ) | (1,983 | ) | |||||||||
| Legal costs and other | — | — | — | 1,441 | ||||||||||||
| Non-GAAP net income | $ | 141,902 | $ | 43,396 | $ | 309,058 | $ | 97,196 | ||||||||
| GAAP Net income | $ | 127,961 | $ | 42,586 | $ | 273,015 | $ | 93,803 | ||||||||
| Interest, net | (198 | ) | (215 | ) | 1,136 | (380 | ) | |||||||||
| Provision for income taxes | 38,818 | 18,442 | 51,918 | 35,218 | ||||||||||||
| Depreciation expense | 1,055 | 887 | 2,950 | 2,450 | ||||||||||||
| Intangible amortization | 63 | 63 | 188 | 1,145 | ||||||||||||
| Stock-based compensation expense | 13,037 | 940 | 39,895 | 2,790 | ||||||||||||
| Legal costs and other | — | — | — | 1,441 | ||||||||||||
| Other tax related income, net | (12,945 | ) | — | (7,259 | ) | — | ||||||||||
| Adjusted EBITDA | $ | 167,791 | $ | 62,703 | $ | 361,843 | $ | 136,467 | ||||||||
| Net income (% of revenue) | 18.0 | % | 8.3 | % | 15.5 | % | 6.8 | % | ||||||||
| Non-GAAP gross margin | 29.9 | % | 16.1 | % | 27.2 | % | 14.3 | % | ||||||||
| Adjusted EBITDA (% of revenue) | 23.6 | % | 12.2 | % | 20.5 | % | 9.9 | % | ||||||||
| Diluted earnings per share | ||||||||||||||||
| GAAP | $ | 0.87 | N/A | $ | 1.86 | N/A | ||||||||||
| Earnings per share attributable to Non-GAAP adjustments | $ | 0.09 | N/A | $ | 0.24 | N/A | ||||||||||
| Non-GAAP | $ | 0.96 | N/A | $ | 2.10 | N/A | ||||||||||
| Diluted shares used in computing per share amounts | 147,344,370 | N/A | 147,160,053 | N/A | ||||||||||||
Schedule V
Nextracker Inc.
Notes
See the accompanying notes on Schedule V attached to this press release (1) To supplement Nextracker’s unaudited selected financial data presented consistent with U.S. Generally Accepted Accounting Principles (“GAAP”), the Company discloses certain non-GAAP financial measures that exclude certain charges and gains, including Adjusted earnings before interest, taxes, depreciation, and amortization (“EBITDA”), non-GAAP gross profit, non-GAAP operating income, non-GAAP net income, non-GAAP diluted earnings per share, and adjusted free cash flow. These supplemental measures exclude certain legal and other charges, stock-based compensation expense and intangible amortization, other discrete events as applicable and the related tax effects. These non-GAAP measures are not in accordance with or an alternative for GAAP and may be different from non-GAAP measures used by other companies. We believe that these non-GAAP measures have limitations in that they do not reflect all the amounts associated with Nextracker’s results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Nextracker’s results of operations in conjunction with the corresponding GAAP measures. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measures. We compensate for the limitations of non-GAAP financial measures by relying upon GAAP results to gain a complete picture of the Company’s performance.
In calculating non-GAAP financial measures, we exclude certain items to facilitate a review of the comparability of the Company’s operating performance on a period-to-period basis because such items are not, in our view, related to the Company’s ongoing operational performance. We use non-GAAP measures to evaluate the operating performance of our business, for comparison with forecasts and strategic plans, for calculating return on investment, and for benchmarking performance externally against competitors. In addition, management’s incentive compensation is determined using certain non-GAAP measures. Since we find these measures to be useful, we believe that investors benefit from seeing results “through the eyes” of management in addition to seeing GAAP results. We believe that these non-GAAP measures, when read in conjunction with the Company’s GAAP financials, provide useful information to investors by offering:
| • | the ability to make more meaningful period-to-period comparisons of the Company’s ongoing operating results; |
| • | the ability to better identify trends in the Company’s underlying business and perform related trend analysis; |
| • | a better understanding of how management plans and measures the Company’s underlying business; and |
| • | an easier way to compare the Company’s operating results against analyst financial models and operating results of competitors that supplement their GAAP results with non-GAAP financial measures. |
The following are explanations of each of the adjustments that we incorporate into non-GAAP measures, as well as the reasons for excluding each of these individual items in the reconciliations of these non-GAAP financial measures:
Stock-based compensation expense consists of non-cash charges for the estimated fair value of unvested restricted share unit and stock option awards granted to employees and assumed in business acquisitions. The Company believes that the exclusion of these charges provides for more accurate comparisons of its operating results to peer companies due to the varying available valuation methodologies, subjective assumptions, and the variety of award types. In addition, the Company believes it is useful to investors to understand the specific impact stock-based compensation expense has on its operating results.
During fiscal year 2023, the Company granted equity compensation awards to employees under the First Amended and Restated 2022 Nextracker LLC Equity Incentive Plan (the “2022 Nextracker Plan”), Vesting of awards under the Plan was contingent on a Nextracker Initial Public Offering (IPO) which occurred on February 9, 2023. In addition to the 2022 Nextracker Plan, Flex maintains several stock-based incentive plans for the benefit of certain of its officers, directors, and employees, including the employees of Nextracker. Stock-based compensation expense for the nine-month periods also include expense recognized under the Flex plan.
Intangible amortization consists primarily of non-cash charges that can be impacted by, among other things, the timing and magnitude of acquisitions. The Company considers its operating results without these charges when evaluating its ongoing performance and forecasting its earnings trends, and therefore excludes such charges when presenting non-GAAP financial measures. The Company believes that the assessment of its operations excluding these costs is relevant to its assessment of internal operations and comparisons to the performance of its competitors.
Adjustment for taxes relates to the tax effects of the various adjustments that we incorporate into non-GAAP measures to provide a more meaningful measure on non-GAAP net income and certain adjustments related to non-recurring settlements of tax contingencies or other non-recurring tax charges, when applicable.
Investors & Analysts
Mary Lai
VP, Investor Relations
Investor@nextracker.com
Media & Press
Kristan Kirsh
SVP, Global Marketing
Media@nextracker.com