Nextracker Inc. Q4 2023 Earnings Call

May 10, 2023

Dan Shugar: We created Nextracker 10 years ago with a vision of a world powered by renewable energy. Our mission for achieving that was to provide the most intelligent, reliable, and productive solar power system. As a company, and together with our industry colleagues, we've made significant progress advancing our vision. Today, solar leads new power plant additions in many grids around the world. Slide five. What does Nextracker actually do? We design, manufacture, and deliver solar trackers, control systems, and software. Our technology helps customers achieve higher profitability by increasing their energy production, lowering operating costs, and protecting the equipment in extreme weather. Our trackers enable up to 30% more energy to be produced annually compared with stationary solar arrays. The tracker, typically over 300 feet long, rotates the solar panels to follow the sun during the day.

Daniel Shugar: We created Nextracker 10 years ago with a vision of a world powered by renewable energy. Our mission for achieving that was to provide the most intelligent, reliable, and productive solar power system. As a company, and together with our industry colleagues, we've made significant progress advancing our vision. Today, solar leads new power plant additions in many grids around the world. Slide five. What does Nextracker actually do? We design, manufacture, and deliver solar trackers, control systems, and software. Our technology helps customers achieve higher profitability by increasing their energy production, lowering operating costs, and protecting the equipment in extreme weather. Our trackers enable up to 30% more energy to be produced annually compared with stationary solar arrays. The tracker, typically over 300 feet long, rotates the solar panels to follow the sun during the day.

Speaker 1: tracker 10 years ago with a vision of a world powered by renewable energy. Our mission for achieving that was to provide the most intelligent, reliable, and productive solar power system.

Speaker 1: As a company, and together with our industry colleagues, we've made significant progress advancing our vision. Today, solar leads new power plant additions in many grids around the world. Slide five.

Speaker 1: company and together with our industry colleagues we've made significant progress advancing our vision. Today solar leads new power plant additions in many grids around the world. Slide five. So what does Nextracker actually do?

Speaker 1: protecting the equipment in extreme weather.

Speaker 1: Our trackers enable up to 30% more energy to be produced annually compared with stationary solar arrays.

Dan Shugar: Solar panels, electrical inverters, and switchgear are provided by others to the customer. Slide six. For a sense of scale, consider a 325MW project using Nextracker, such as the project we see in this image. This is a big system, but we have single sites that are 5 times larger. This typical project covers roughly 4 square miles with thousands of trackers. On average, we delivered a system of this size every week last year. Slide seven. Nextracker has been the global leader in the market as measured by shipment volume, revenue, and profitability for the last 7 consecutive years. Achieving market share metrics is not an objective for Nextracker. Market share is a by-product of what we are really focused on, innovation, operational excellence, and customer success. This focus has resulted in more than 80% of our sales orders coming from repeat business.

Daniel Shugar: Solar panels, electrical inverters, and switchgear are provided by others to the customer. Slide six. For a sense of scale, consider a 325MW project using Nextracker, such as the project we see in this image. This is a big system, but we have single sites that are 5 times larger. This typical project covers roughly 4 square miles with thousands of trackers. On average, we delivered a system of this size every week last year. Slide seven. Nextracker has been the global leader in the market as measured by shipment volume, revenue, and profitability for the last 7 consecutive years. Achieving market share metrics is not an objective for Nextracker. Market share is a by-product of what we are really focused on, innovation, operational excellence, and customer success. This focus has resulted in more than 80% of our sales orders coming from repeat business.

Speaker 1: The tracker, typically over 300 feet long, rotates the solar panels to follow the sun during the day. Solar panels, electrical inverters, and switch gear are provided by others to the customer.

Speaker 2: Slide 6.

Speaker 1: For a sense of scale, consider a 325 megawatt project using Nextracker, such as the project we see in this image. This is a big system, but we have single sites that are five times larger.

Speaker 1: This typical project covers roughly four square miles with thousands of trackers. On average, we delivered a system of this size every week last year.

Speaker 1: Our project covers roughly four square miles with thousands of trackers. On average, we delivered a system of this size every week last year. Slide seven. For over Victory'sania Mew Inside Beat

Speaker 1: Nextracker has been the global leader in the market as measured by shipment volume, revenue, and profitability for the last seven consecutive years.

Speaker 1: But achieving market share metrics is not an objective for the next...

Speaker 1: byproduct of what we are really focused on. Innovation, operational excellence and customer success.

Speaker 1: This focus has resulted in more than 80% of our sales orders coming from repeat business.

Dan Shugar: As of today, we've delivered over 2 million trackers to dozens of countries. In total, our systems support over 74GW of solar power plants, the equivalent power-generating capacity of about 85 coal power plants. We achieve these metrics through innovation that will be covered by Howard, a global footprint, and relentless focus on customer service. Nextracker's greatest strength is our team and culture. Our executive leaders have over 20 years of solar experience on average. Six of my six co-founders are still with the company 10 years later, which reflects well on our high-performance culture of teamwork. We have strong, trusted customer relationships and understand the needs of developers, independent power producers, and contractors due to our deep industry domain expertise. Slide 8. We completed our fiscal 2023 on 31 March 2023. We optimize our business for annual, not quarterly metrics, and our results validate our approach.

Daniel Shugar: As of today, we've delivered over 2 million trackers to dozens of countries. In total, our systems support over 74GW of solar power plants, the equivalent power-generating capacity of about 85 coal power plants. We achieve these metrics through innovation that will be covered by Howard, a global footprint, and relentless focus on customer service. Nextracker's greatest strength is our team and culture. Our executive leaders have over 20 years of solar experience on average. Six of my six co-founders are still with the company 10 years later, which reflects well on our high-performance culture of teamwork. We have strong, trusted customer relationships and understand the needs of developers, independent power producers, and contractors due to our deep industry domain expertise. Slide 8. We completed our fiscal 2023 on 31 March 2023. We optimize our business for annual, not quarterly metrics, and our results validate our approach.

Speaker 1: As of today, we've delivered over 2 million trackers that does as a country.

Speaker 1: In total, our systems support over 74 gigawatts of solar power plants, the equivalent power generating capacity of about 85 coal power plants.

Speaker 1: We achieve these metrics through innovation that will be covered by Howard, a global footprint, and relentless focus on customer service.

Speaker 1: NEXTRACKER's greatest strength is our team and culture.

Speaker 1: Our executive leaders have over 20 years of solar experience on average. Six of my six co-founders are still with the company 10 years later, which reflects well on our high performance culture teamwork.

Speaker 1: We have strong, trusted customer relationships and understand the needs of developers, independent power producers and contractors due to our deep industry domain expertise.

Speaker 3: Slide 8.

Speaker 1: We completed our fiscal 2023 on March 31st.

Dan Shugar: Last year, we achieved record annual revenues of $1.9 billion and EBITDA of $209 million. Year on year, we achieved a 30% growth in revenue and more than doubled our EBITDA while generating over $100 million of free cash flow. We also achieved phenomenal sales results, finishing the year with record backlog of $2.6 billion. We define backlog as firm orders with deposits. A few months ago, amidst turbulent conditions in the financial markets, Nextracker completed a successful IPO. We offer our sincere appreciation to our IPO stakeholders, starting with our global customers. We thank each of our customers for your ongoing confidence and doubling down with Nextracker, enabling our backlog to grow 90% over the prior year.

Daniel Shugar: Last year, we achieved record annual revenues of $1.9 billion and EBITDA of $209 million. Year on year, we achieved a 30% growth in revenue and more than doubled our EBITDA while generating over $100 million of free cash flow. We also achieved phenomenal sales results, finishing the year with record backlog of $2.6 billion. We define backlog as firm orders with deposits. A few months ago, amidst turbulent conditions in the financial markets, Nextracker completed a successful IPO. We offer our sincere appreciation to our IPO stakeholders, starting with our global customers. We thank each of our customers for your ongoing confidence and doubling down with Nextracker, enabling our backlog to grow 90% over the prior year.

Speaker 1: We optimize our business for annual, not quarterly metrics.

Speaker 1: and our results validate our approach.

Speaker 1: Last year we achieved record annual revenues of $1.9 billion and epic dot

Speaker 1: of $209 million.

Speaker 1: Year on year, we achieved a 30% growth in revenue and more than doubled our EBITDA while generating over $100 million of free cash flow.

Speaker 1: We also achieved phenomenal sales results.

Speaker 1: finishing the year with record backlog of $2.6 billion.

Speaker 1: We define backlog as firm orders with deposits.

Speaker 1: A few months ago, amidst turbulent conditions in the financial markets, Nextracker completed a successful IPO. We offer our sincere appreciation to our IPO stakeholders, starting with our global customers.

Speaker 1: We thank each of our customers for their ongoing confidence and doubling down with Nextracker, enabling our backlog to grow 90% over the prior year.

Dan Shugar: We value our business partners, from contract manufacturers, independent engineers, banks, and consultants that have enabled us to scale and reliably serve the global market. We are extremely appreciative of our investors who funded our IPO, which was a success for the entire renewable power industry. We believe it is our responsibility to deliver strong investment returns through disciplined performance and ferocious focus on customer satisfaction. In addition to delivering for our investors, we believe this will demonstrate solar is an attractive investment sector such that additional capital is invested to our industry, necessary for realizing our vision of a renewably powered world. Finally, we thank our entire Nextracker team for your professionalism, customer focus, and dedication. Slide nine. Now let's focus on key industry drivers. Paramount is solar's tremendous cost reduction progress.

Daniel Shugar: We value our business partners, from contract manufacturers, independent engineers, banks, and consultants that have enabled us to scale and reliably serve the global market. We are extremely appreciative of our investors who funded our IPO, which was a success for the entire renewable power industry. We believe it is our responsibility to deliver strong investment returns through disciplined performance and ferocious focus on customer satisfaction. In addition to delivering for our investors, we believe this will demonstrate solar is an attractive investment sector such that additional capital is invested to our industry, necessary for realizing our vision of a renewably powered world. Finally, we thank our entire Nextracker team for your professionalism, customer focus, and dedication. Slide nine. Now let's focus on key industry drivers. Paramount is solar's tremendous cost reduction progress.

Speaker 1: and consultants that have enabled us to scale and reliably serve the global market.

Speaker 1: And we are extremely appreciative of our investors who funded our IPO, which was a success for the entire renewable power industry.

Speaker 1: We believe it is our responsibility to deliver strong investment returns through disciplined performance and ferocious focus on customer satisfaction.

Speaker 1: In addition to delivering for our investors, we believe this will demonstrate solar is an attractive investment sector such that additional capital is invested to our industry, necessary for realizing our vision of a renewable and powered world. And finally, we thank our entire Nextracker team for your professionalism.

Speaker 1: customer focus and dedication.

Speaker 4: Slide 9.

Dan Shugar: Lazard, a leading financial advisory firm, regularly publishes a comprehensive analysis comparing the production costs of power generation technology. Their latest report shows a new power plant on an unsubsidized basis is lower cost than new coal, nuclear, or gas power generation in most of the world. In fact, solar, with an average cost of $60 per MWh unsubsidized, is about half the cost of a new coal plant and about a third the cost of a new nuclear plant. A new gas plant at $70 per MWh is slightly higher cost than standalone solar and slightly less expensive than solar plus battery storage at $74 per MWh on average. Slide 10. We just reviewed solar's competitive economics today, which have decreased in cost about 600% over the last 15 years.

Daniel Shugar: Lazard, a leading financial advisory firm, regularly publishes a comprehensive analysis comparing the production costs of power generation technology. Their latest report shows a new power plant on an unsubsidized basis is lower cost than new coal, nuclear, or gas power generation in most of the world. In fact, solar, with an average cost of $60 per MWh unsubsidized, is about half the cost of a new coal plant and about a third the cost of a new nuclear plant. A new gas plant at $70 per MWh is slightly higher cost than standalone solar and slightly less expensive than solar plus battery storage at $74 per MWh on average. Slide 10. We just reviewed solar's competitive economics today, which have decreased in cost about 600% over the last 15 years.

Speaker 1: Now let's focus on key industry drivers.

Speaker 1: Paramount is solar's tremendous cost reduction progress.

Speaker 1: Lazard, a leading financial advisory firm, regularly publishes a comprehensive analysis comparing the production costs of power generation technology.

Speaker 1: Their latest report shows a new power plant on an unsubsidized basis is...

Speaker 3: Lower.

Speaker 1: cost than new coal, nuclear, or gas power generation in most of the world. In fact, solar with an average cost of $60 per megawatt hour unsubsidized.

Speaker 1: is about half the cost of a new coal plant and about a third of the cost of a new nuclear plant.

Speaker 1: A new gas plant at $70 per megawatt hour is slightly higher cost than stand-alone solar and slightly less expensive than solar plus battery storage at $74 per megawatt hour on average.

Speaker 2: Slide 10.

Speaker 1: We just reviewed solar's competitive economics today, which have decreased in cost about 600 percent over the last 15 years. When you consider the availability of solar incentives in some markets, it's straightforward to understand why economics are the major factor driving solar demand.

Dan Shugar: When you consider the availability of solar incentives in some markets, it's straightforward to understand why economics are the major factor driving solar demand. Additional policy tailwinds complementing growth are decarbonization, the desire for energy independence further amplified by the Ukraine War, the US Inflation Reduction Act with similar policies overseas, and appetite to invest in renewable energy and electrification programs. There are two major headwinds impacting solar growth in the US. The first are trade barriers to importing solar panels, especially those with Chinese content. While this situation is improving, industry growth has been materially impacted and many project schedules have extended until panels become available. The second major headwind is delays with electrical interconnection and permitting projects for construction. While these issues are usually solved on an individual project basis, they can delay the project implementation significantly.

Daniel Shugar: When you consider the availability of solar incentives in some markets, it's straightforward to understand why economics are the major factor driving solar demand. Additional policy tailwinds complementing growth are decarbonization, the desire for energy independence further amplified by the Ukraine War, the US Inflation Reduction Act with similar policies overseas, and appetite to invest in renewable energy and electrification programs. There are two major headwinds impacting solar growth in the US. The first are trade barriers to importing solar panels, especially those with Chinese content. While this situation is improving, industry growth has been materially impacted and many project schedules have extended until panels become available. The second major headwind is delays with electrical interconnection and permitting projects for construction. While these issues are usually solved on an individual project basis, they can delay the project implementation significantly.

Speaker 1: Additional policy tailwinds complementing growth are decarbonization, the desire for energy independence further amplified by the Ukraine war, the US Inflation Reduction Act with similar policies overseas, and appetite to invest in renewable energy and electrification programs.

Speaker 1: There are two major headwinds impacting solar growth in the U.S.

Speaker 1: The first are trade barriers to importing solar panels.

Speaker 1: especially those with Chinese content.

Speaker 1: While the situation is improving, industry growth has been materially impacted and many project schedules

Speaker 1: have extended until panels become available.

Speaker 1: The second major headwind is the latest with electrical interconnection and permitting projects for construction.

Speaker 1: While these issues are usually solved on an individual project basis, they can delay the project implementation significantly.

Dan Shugar: In aggregate consideration of the cost and policy factors, it's insightful to see that since 2010, solar's increased from about 10% to half of new power generation capacity added annually in recent years. Slide 11. We covered that Nextracker has maintained leading global share. The most recent regional share data from third parties is shown here, superimposed with the estimated total available market through 2030. Nextracker has leading share in North America, Latin America, Africa, and Australia. There are also meaningful markets in Europe, the Middle East, and Asia. In most of these locations, Nextracker has regional offices with sales, engineering, and service to support customers. Slide 12. Nextracker has intellectual property and know-how regarding manufacturing our products, but our strategy has been to outsource almost entirely with manufacturing partners, which is why our depreciating assets are so minimal.

Daniel Shugar: In aggregate consideration of the cost and policy factors, it's insightful to see that since 2010, solar's increased from about 10% to half of new power generation capacity added annually in recent years. Slide 11. We covered that Nextracker has maintained leading global share. The most recent regional share data from third parties is shown here, superimposed with the estimated total available market through 2030. Nextracker has leading share in North America, Latin America, Africa, and Australia. There are also meaningful markets in Europe, the Middle East, and Asia. In most of these locations, Nextracker has regional offices with sales, engineering, and service to support customers. Slide 12. Nextracker has intellectual property and know-how regarding manufacturing our products, but our strategy has been to outsource almost entirely with manufacturing partners, which is why our depreciating assets are so minimal.

Speaker 1: In aggregate consideration of the cost and policy factors, it's insightful to see that since 2010, solar's increased from about 10% to half of new power generation capacity added annually in recent years.

Speaker 1: of the cost and policy factors, it's insightful to see that since 2010, solar's increased from about 10% to half of new power generation capacity added annually in recent years. Slide 11.

Speaker 1: We covered that next tracker has maintained leading global share.

Speaker 1: The most recent regional share data from certain parties is shown here. Superimposed with the estimated total available market through 2030.

Speaker 1: Nextracker has lead share in North America, Latin America, Africa, and Australia. There is also meaningful markets in Europe , the Middle East, and Asia. In most of these locations, Nextracker has regional offices with sales, engineering, and service to support customers.

Speaker 2: Slide 12.

Speaker 1: DexTracker has intellectual property and know-how regarding manufacturing our products, but our strategy has been to outsource almost entirely with manufacturing partners, which is why our depreciating assets are so minimal.

Dan Shugar: The prior chart illustrated the regional solar markets. This chart shows how we map our supply chain to align with those local markets. In totality, Nextracker has over 50 partners across 16 countries and 5 continents. This global diversification provides customers with confidence we can deliver and also provides us international trade optionality that mitigates risk. We believe Nextracker has built by far the largest capacity and the most geographically diversified position in our sector. Slide 13. Let's take a deeper look at our US supply chain. During the pandemic, commodities such as logistics and steel suffered steep inflationary cost pressures, and port congestion impacted our ability to deliver on time. We made a decision early on to leverage our know-how to massively ramp US capacity. Last summer, we celebrated three factory dedication events in Texas, Arizona, and Pittsburgh.

Daniel Shugar: The prior chart illustrated the regional solar markets. This chart shows how we map our supply chain to align with those local markets. In totality, Nextracker has over 50 partners across 16 countries and 5 continents. This global diversification provides customers with confidence we can deliver and also provides us international trade optionality that mitigates risk. We believe Nextracker has built by far the largest capacity and the most geographically diversified position in our sector. Slide 13. Let's take a deeper look at our US supply chain. During the pandemic, commodities such as logistics and steel suffered steep inflationary cost pressures, and port congestion impacted our ability to deliver on time. We made a decision early on to leverage our know-how to massively ramp US capacity. Last summer, we celebrated three factory dedication events in Texas, Arizona, and Pittsburgh.

Speaker 1: The prior chart illustrated the regional solar market, this chart shows how we map our supply chain to align with those local markets. In totality, next tracker has over 50 partners across 16 countries and five continents. This global diversification provides customers with confidence.

Speaker 1: 13.

Speaker 1: Let's take a deeper look at our US supply chain.

Speaker 1: During the pandemic, commodities such as logistics and steel suffered steep inflationary cost pressures, and port congestion impacted our ability to deliver on time.

Speaker 1: We made the decision early on to leverage our know-how to massively grant U.S. capacity.

Dan Shugar: At the time, we reported on 10GW of reported capacity with additional plans in progress. In response to strong demand and the IRA incentives, we further increased capacity in these plants and worked with additional domestic manufacturers and select overseas partners to relocate equipment to the US. In fact, we have another factory announcement with a key partner coming next week. At the end of fiscal 2023, we have over 25GW of capacity under contract with over 15 US suppliers. Many of these plants are shipping finished goods today and ramping as they add shifts of personnel. Now I turn the call to Howard to share details about our operations, technology, and customers.

Daniel Shugar: At the time, we reported on 10GW of reported capacity with additional plans in progress. In response to strong demand and the IRA incentives, we further increased capacity in these plants and worked with additional domestic manufacturers and select overseas partners to relocate equipment to the US. In fact, we have another factory announcement with a key partner coming next week. At the end of fiscal 2023, we have over 25GW of capacity under contract with over 15 US suppliers. Many of these plants are shipping finished goods today and ramping as they add shifts of personnel. Now I turn the call to Howard to share details about our operations, technology, and customers.

Speaker 1: Last summer we celebrated three factory dedication events in Texas, Arizona, and Pittsburgh. At the time, we reported on 10 gigawatts of reported capacity with additional plans of progress.

Speaker 1: In response to strong demand and the IRA incentives, we further increase capacity in these plants and work with additional domestic manufacturers and select overseas partners to relocate equipment to the USA. In fact, we have another factory announcement with a key partner coming next week.

Speaker 1: At the end of fiscal 2023, we have over 25 Gable Outs of Contanity under contract to over 15 U.S. Suppliers.

Speaker 1: Many of these plants are shifting finished goods today and ramping as they add shifts of personnel.

Howard Wenger: Let me echo Dan by congratulating the Nextracker team. We could not be more pleased with the company's many accomplishments. We had a very strong finish in Q4 with momentum that has put us in a great position for our new fiscal year ahead. Let me provide some background into our technological innovation, which coupled with the best-in-class team Dan discussed, allows us to win business across all regions and terrains. Please turn to slide 15. We can break down our innovations into three categories covering over 350 patents issued and pending. These innovations are designed to work together to enhance lifetime energy production at the lowest possible capital cost and operations and maintenance cost of the entire solar power plant, while also assuring the highest reliability and control to protect the system. The industry characterizes this as LCOE, which is defined as levelized cost of energy.

Speaker 1: Now I turn the call to Howard to share details about our operations, technology, and customers.

Speaker 1: Let me echo Dan by congratulating the NEXTRacker team. We could not be more pleased with the company's many accomplishments.

Speaker 1: We had a very strong finish in Q4 with momentum that has put us in a great position for a new fiscal year ahead. Let me provide some background into our technological innovation which coupled with the best-in-class team Dan discussed allows us to win business across all regions and terrains.

Speaker 1: Please turn to slide 15.

Speaker 1: We can break down our innovations into three categories covering over 350 patents issued and pending.

Speaker 1: These innovations are designed to work together to enhance lifetime energy production at the lowest possible capital cost and operations and maintenance cost of the entire solar power plant.

Speaker 1: while also ensuring the highest reliability and control to protect the system.

Howard Wenger: Offering a lower LCOE is one of the primary factors that enables Nextracker to win in the market. As you can see from the next slide 16, our inventions resulted in a leading balanced tracker that enables each tracker to be independently powered and controlled. This tracker architecture has unlocked a series of innovations that further differentiate us. For example, our patented TrueCapture software optimizes energy yield uniquely for every tracker row. We have over 190 projects with TrueCapture deployed around the world, and we believe we lead the industry by far in this category. Our unique balanced tracker design also enables optimum light capture for bifacial solar panels that are now the standard for large-scale systems. Our extreme terrain following tracker, called XTR, can eliminate all site grading and enables installations on rolling hills and more challenging terrains.

Speaker 1: The industry characterizes this as LCOE, which is defined as levelized cost of energy.

Speaker 1: offering a lower LCOE is one of the primary factors that enables Nextracker to win in the market.

Speaker 1: As you can see from the next slide, 16, our inventions resulted in a leading balance tracker that enables each tracker to be independently powered and controlled.

Speaker 1: This tracker architecture has unlocked a series of innovations that further differentiate us.

Speaker 1: For example, our patented TrueCapture software optimizes energy yield uniquely for every tracker row.

Speaker 1: We have over 190 projects with TrueCapture deployed around the world, and we believe we lead the industry by far in this category.

Speaker 1: Our unique balanced tracker design also enables optimum light capture for bifacial solar panels that are now the standard for large scale systems.

Speaker 1: Our extreme terrain following tracker called XTR can eliminate all site-craning and enable installations on rolling hills and more challenging trains. We have sold and deployed XTR on over 65 projects globally. Again, leading the industry.

Howard Wenger: We have sold and deployed XTR on over 65 projects globally, again leading the industry. Our Navigator software platform connects all of our trackers back to a central hub that enables single-button control for panel stowing and cleaning, as well as site vegetation management, all backed by an onboard UPS for every single tracker in the field, assuring connectivity and control of the entire solar field, even during grid power outages. In summary, our integrated tracker architecture provides advantages that allows us to win business across all regions and site conditions, all climate zones, and all varieties of terrain around the world. This is illustrated on the next slide, number 17, where you can see Nextracker projects deployed across the United States. We win business in large, sunny, flat regions like Texas and the deserts of California and Nevada.

Speaker 1: Our Navigator software platform connects all of our trackers back to a central hub that enables single button control for panel stowing and cleaning, as well as site vegetation management, all backed by an onboard UPS for every single tracker in the field, assuring connectivity and control of the entire solar field, even during grid power outages. In summary,

Speaker 1: Our integrated tracker architecture provides advantages that allows us to win business across all regions and site conditions, all climate zones, and all varieties of terrain around the world. This is illustrated on the next slide, number 17.

Speaker 1: where you can see next tracker projects deployed across the United States.

Howard Wenger: We win in more diffuse light regions in the South and in the wet, rolling hills of the Southeast. We win in colder and higher latitude regions in the Midwest and also in the Northeast, where sites frequently are more constrained with irregular boundaries. This highlights the flexibility of our tracker hardware and software system architecture. With various innovations and extensions of our flagship Horizon tracker system solution, we can win everywhere. Please turn to slide 18. Our tracker solutions' global scale, financial stability, and long-time industry experience have enabled deep and trusted customer partnerships. Over 80% of our revenue comes from repeat customers. This underscores how we partner with our customers for mutual success, a model we have deployed across the world to continually win business. For example, on the next slide 19, we show a selection of global project wins from the last fiscal quarter, Q4.

Speaker 1: We win business in large sunny flat regions like Texas and the deserts of California and Nevada. We win in more diffuse light regions in the south and in the wet rolling hills of the southeast.

Speaker 1: We went in colder and higher latitude regions in the Midwest and also in the Northeast where sites frequently are more constrained with the regular boundaries.

Speaker 1: This highlights the flexibility of our tractor hardware and software system architecture. With various innovations and extensions of our flagship horizon tractor system solution.

Speaker 1: flexibility of our tracker hardware and software system architecture. With various innovations and extensions of our flagship Horizon Tracker System solution, we can win everywhere.

Speaker 1: Please turn to slide 18. Our tracker solutions global scale, financial stability, and long-time industry experience have enabled deep and trusted customer partnerships.

Speaker 1: Over 80% of our revenue comes from repeat customers.

Speaker 1: This underscores how we partner with our customers for mutual success, a model we have deployed across the world to continually win business.

Speaker 1: For example, on the next slide, 19, we show a selection of global project wins from the last fiscal quarter.

Howard Wenger: Although this is a small subset of our project and customer wins from the quarter, this highlights the breadth of our global reach and portfolio approach to the business spanning multiple continents. We have a healthy combination of new and repeat customers from North America to South America, from Europe to Asia and Oceania. These sample Q4 project wins also reflect the strength of our global team in sales, marketing, supply chain, training, and support that provide a platform to further scale and grow. Which brings me to our backlog on slide 20. We ended the year with a record backlog of $2.6 billion, up 90% from the prior year. We define our backlog as signed contracts for specific projects with deposits from customers.

Speaker 1: quarter four. Although this is a small subset of our project and customer wins from the quarter, this highlights the breadth of our global reach and portfolio approach to the business spanning multiple continents.

Speaker 1: Number four, although this is a small subset of our project and customer wins from the quarter, this highlights the breadth of our global reach and portfolio approach to the business spanning multiple continents. We have a healthy combination of new and repeat customers.

Speaker 1: These sample Q4 Project wins also reflect the strength of our global team in sales, marketing, supply chain, training, and support that provide a platform to further scale and grow.

Speaker 1: Which brings me to our backlog on slide 20.

Speaker 1: We ended the year with a record backlog of $2.6 billion, up 90% from the prior year.

Howard Wenger: By the end of fiscal year 2023, our backlog includes over $1.8 billion of project-specific purchase orders and over $670 million of VCAs, or volume commitment agreements, comprising multiple specific projects. VCAs are signed contracts with deposits from developers, plant owners, and EPCs, or engineering, procurement, and construction companies. We believe our VCA program, which we began last year in fiscal year 2023, provides even greater visibility into our future revenue and growth. In general, legacy backlog contracts take 3 to 5 quarters to cycle into revenue, while our VCA agreements typically cycle into revenue from 3 to 8 quarters. In summary, as our backlog demonstrates, we are seeing significant demand strength in all of our core markets around the world, where our global revenue mix continues to be comprised of roughly 2/3 US and 1/3 rest of world.

Speaker 1: We define our backlog as signed contracts for specific projects with deposits from customers.

Speaker 1: By the end of fiscal year 2023, our backlog includes over $1.8 billion of project-specific purchase orders and over $670 million of VCAs, or Volume Commitment Agreements, comprising multiple specific projects. VCAs are signed contracts with deposits.

Speaker 1: from developers, plant owners, and EPCs, or engineering, procurement, and construction companies.

Speaker 1: We believe our VCA program, which began last year in fiscal year 2023, provides even greater visibility into our future revenue and growth.

Speaker 1: In general, legacy backlog contracts take 3 to 5 quarters to cycle into revenue, while our BCA agreements typically cycle into revenue from 3 to 8 quarters.

Speaker 1: where our global revenue mix continues to be comprised of roughly two-thirds US and one-third rest of the world.

Howard Wenger: Now, let me turn the call over to David Bennett, our Chief Financial Officer, to review the financial details of the quarter and to discuss our guidance for fiscal 2024.

Speaker 1: Now, let me turn the call over to Dave Bennett, our Chief Financial Officer, to review the financial details of the quarter and to discuss our guidance for fiscal 2024.

David Bennett: Thank you, Howard, and thank you all for joining us today. Please note that all numbers referenced in my remarks are on a non-GAAP basis, unless otherwise stated. A reconciliation to comparable GAAP metrics and a list of the reasons why the company uses these measures can be found in today's earnings release, which is available on our website and as an exhibit to our Form 8-K filed with the SEC. Please turn to slide 22. Before we get into our quarterly and annual performance, as well as guidance for fiscal 2024, I'd like to provide some key historical financial information. Note, our fiscal year ends on March 31. Due to the nature of our business, I encourage you to evaluate Nextracker's performance on a full year basis.

Speaker 5: Thank you, Howard, and thank you all for joining us today. Please note that all numbers referenced in my remarks are on a non-GAP basis unless otherwise stated. A reconciliation to comparable gap metrics and a list of the reasons why the company uses these measures can be found in today's earnings release, which is available on our website.

Speaker 5: and as an exhibit to our Form 8K filed with the FCC.

Speaker 5: to our Form 8K file with the FCC. Please turn to slide 22.

Speaker 5: Before we get into our quarterly and annual performance, as well as guidance for fiscal 2024, I'd like to provide some key historical financial information. Note our fiscal year is on March 31st. Due to the nature of our business, our fiscal year is on March 31st.

David Bennett: The exact timing of project deployments can vary based upon factors such as weather, component availability, and project-specific factors, which may impact the timing of revenue recognition between quarters. We report revenues in two segments, the US and the rest of the world. For fiscal 2023, the revenue split was approximately 2/3 US and 1/3 rest of the world. Revenue from TrueCapture, our software solution, has trended historically at approximately 1% to 2% of total revenue. We remain very focused on scaling our software business. It's an important differentiator for Nextracker. Now looking at adjusted earnings before income taxes and depreciation. Adjusted EBITDA of $209 million for fiscal 2023 was a record, with margin stepping up towards historic levels. To understand our margin opportunity, it's important to look at the past few years.

Speaker 5: I encourage you to evaluate NextRacker's performance on a full year basis. The exact timing of project deployments can vary based upon factors such as weather, component availability, and project-specific factors, which may impact the timing of revenue recognition between quarters. For more information, visit www.nextracker.com

Speaker 5: We report revenues in two segments, the U.S. and the rest of the world. For fiscal 2023, the revenue split was approximately two-thirds U.S. and one-third rest of the world.

Speaker 5: Revenue from TrueCapture, our software solution, has trended historically at approximately 1 to 2 percent of total revenue.

Speaker 5: We remain very focused on scaling our software business. It's an important differentiator for NextTrack.

Speaker 5: Now looking at adjusted earnings before income taxes and depreciation.

Speaker 5: Adjusted EBITDA of $209 million for fiscal 23 was a record.

Speaker 5: with margins stepping up towards historic levels.

David Bennett: We ended fiscal 2021 with $179 million of EBITDA at a 15% EBITDA margin. We see fiscal 2021 as the last normal year before the industry began incurring higher costs associated with logistics and freight issues. The $92 million of EBITDA in fiscal 2022 reflects the higher operating costs from these supply chain constraints. While the 6.3% EBITDA margin was not optimal, maintaining profitability during an historic downturn validated our disciplined financial execution. Turning to fiscal 2023, we saw improving sequential EBITDA and margin due to higher pricing, cost reductions, and improved execution. Adjusted EBITDA margin was 11% for fiscal 2023, with sequential increases from 7.9% in Q1 to 14% by Q4, which is trending closer to our margin profile prior to the pandemic.

Speaker 5: To understand our margin opportunity, it's important to look at the past few years.

Speaker 5: We end this fiscal 2021 with $179 million of EBITDA at a 15% EBITDA margin.

Speaker 5: We see fiscal 21 as the last normal year before the industry began incurring higher costs associated with logistics and freight issues.

Speaker 5: The $92 million of EBITDA in fiscal 22 reflects the higher operating costs from these supply chain constraints.

Speaker 5: While the 6.3% evict of margins is not optimal, maintaining profitability during a historic downturn validated our disciplined financial execution.

Speaker 5: Turning to fiscal 23, we saw improving sequential EBITDA and margin due to higher pricing, cost reduction, and improved execution. EBITDA margin was 11% for fiscal 23.

Speaker 5: with sequential increases from 7.9% in the first quarter to 14% by Q4.

David Bennett: Now please turn to slide 23 for our fiscal 2023 Q4 results. We closed the quarter at a record $518 million of revenue, an increase of approximately 18% year-on-year versus Q4 of fiscal 2022. It is worth noting that rest of the world revenue was up over 42%, driven by continued strong demand in Latin America, Europe, the Middle East, and India. Adjusted EBITDA increased $50 million to $73 million from Q4 of fiscal 2022, an increase of 227%. Looking at our fiscal 2023 versus fiscal 2022 results on the next slide. For full-year 2023, revenue was $1.9 billion, an increase of $444 million and 30% from the prior year. Revenue in the US was $1.2 billion, up $329 million.

which is trending closer to our margin profile prior to the pandemic.

Now please turn to slide 23 for our fiscal 23 Q4 results. We close the quarter at a record 518 million of revenue.

an increase of approximately 18% year on year versus the fourth quarter of fiscal 22. It is worth noting that rest of the world revenue was up over 42% driven by continued strong demand in Latin America, Europe , the Middle East, and India.

Adjusted EVA.Increased $50 million to $73 million from the fourth quarter of fiscal 22.

an increase of 227%. Looking at our fiscal 23 or fiscal 22 results on the next slide.

For full year 2023, revenue was $1.9 billion, an increase of $444 million and 30% from the prior year.

David Bennett: Rest of the world revenue was up $115 million. The continued challenges with panel availability in the US impacted our software revenue in H2, which was at the low end of our 1% to 2% of revenue goal. Adjusted EBITDA increased $116 million to $209 million from the prior year, an increase of 126%. Again, we are very pleased to have achieved increased EBITDA every quarter during the year. Fiscal 2023 adjusted free cash flow was over $100 million, an increase of approximately $250 million from the prior year. Net working capital as of 31 March was approximately 13% of revenue. Turning to slide 25, cash and liquidity.

Revenue in the US was 1.2 billion. Up, 329 million. Rest of the world revenue was up 115 million.

The continued challenges with panel availability in the U.S. impacted our software revenue in the second half of the year.

which was at the low end of our 1 to 2 percent of revenue goal. Adjusted EBITDA increased $116 million to $209 million from the prior year, an increase of 126 percent.

Again, we are very pleased to have achieved increased EBITDA every quarter during the year.

fiscal 23 adjusted free cash flow with over a hundred million dollars an increase of approximately 250 million from the prior year.

networking capital as of March 31st with approximately 13 percent of revenue.

David Bennett: We believe that financial strength is an important differentiator and that our capital structure, including a strong balance sheet and ample liquidity, is a key competitive advantage. In addition, we outsource our manufacturing to partners which limits our capital expenditures. In conjunction with the IPO, we closed on a debt syndicate led by tier one institutions, JP Morgan, Bank of America, Citi, and Barclays. We executed a $150 million term loan and a $500 million revolver, which further ensures Nextracker can execute independently from Flex and manage our net working capital. Total liquidity as of March 31, 2023 was $630 million. We have no significant maturities until our fiscal 2028. Note that we are currently operating at a debt to EBITDA ratio of less than one.

Turning to slide 25, cash and liquidity. We believe that financial strength is an important differentiator.

and that our capital structure, including a strong balance sheet and ample liquidity, is a key competitive advantage.

In addition, we outsource our manufacturing partners which limits our capital expenditures.

In conjunction with the IPO, we closed on a debt syndicate led by tier one institutions.

JP Morgan, Bank of America, City, and Barclays.

We executed a $150 million term loan and a $500 million revolver, which further ensures Nextracker can execute independently from Flex and manage our networking capital. Total liquidity as of March 31, 2023 was $630 million.

We have no significant maturity until our fiscal 2028.

David Bennett: It's important to note that Nextracker did not retain any proceeds from the initial public offering or the debt issuance, as all proceeds were remitted to the pre-IPO owners. We ended the fiscal year with $130 million of cash. Please turn to the next slide for our fiscal 2024 guidance. In developing guidance, I want to point out a few factors that influence our outlook. As Dan discussed, we think the H1 of fiscal 2024 will continue to see some constrained panel availability. As such, we expect slower growth in the H1 versus the H2 of the year. We expect our adjusted tax rate to range between 15% and 20% of adjusted pre-tax income based on the current ownership structure. We continue to invest in the business, including further expanding our supply chain, developing our team, and product offerings.

Note that we are currently operating at a debt to evad of ratio of less than one. It's important to note that next record did not retain any proceeds from the initial public offering or the debt issuance as all proceeds were remitted to the pre-IPO owners. We ended the fiscal year with $130 million of cash. We are currently operating at a debt to evad of ratio of less than one.

Please turn to the next slide for our Fiscal 24 guidance.

In developing guidance, I want to point out a few factors that influence our outlook. As Dan discussed, we think the first half of fiscal 24 will continue to see some constrained panel availability. We hope that the next half of fiscal 24 will continue to see some constrained panel availability.

As such, we expect slower growth in the first half versus the second half of the year. We expect our adjusted tax rate to raise between 15 and 20 percent of adjusted pre-tax income.

We expect slower growth in the first half versus the second half of the year. We expect our adjusted tax rate to raise between 15 and 20 percent of adjusted pre-tax income based on the current ownership structure.

David Bennett: This is reflected in our EBITDA outlook. We have not factored in additional profitability resulting from the Inflation Reduction Act. With that context, our full year fiscal 2024 guidance is as follows. Revenue is expected to be between $2.1 to 2.3 billion, an increase of approximately 16% at the midpoint. Adjusted EBITDA is expected to be between $265 to 305 million. An increase of 36% at the midpoint. GAAP EPS is expected to be between $1.20 to $1.40, and includes approximately $0.15 related to stock-based compensation and intangible amortization. Adjusted earnings per share is expected to be between $1.35 to $1.55, based upon 146.5 million weighted average shares outstanding.

We continue to invest in the business, including further expanding our supply chain, developing our teams, and product offerings. This is reflected in our EBITDA outlook. We have not factored in additional profitability resulting from the Inflation Reduction Act. It won't be gone until with that context.

Our full year fiscal 2024 guidance is as follows.

Revenue is expected to be between $2.1 billion to $2.3 billion, an increase of approximately 16% at the midpoint.

Adjustment EVA is expected to be between $265 million to $305 million, an increase of 36% at the midpoint. Gap EPS is expected to be between $1.20 to $1.40 and includes approximately 15 cents related to stock-based compensation and intangible amortization.

Adjustment earnings per share is expected to be between $1.35 to $1.55 based upon 146.5 million weighted average shares outstanding.

David Bennett: Our Q1 fiscal 2024 outlook is as follows: Revenue is expected to grow 15% to 20% versus Q1 fiscal 2023. EBITDA margin is expected to be between 12% to 13%, up 400 to 500 basis points compared to the same period last year. I will now turn the call back to Dan for some concluding remarks.

Our Q1 Fiscal 2024 Outlook is as follows.

Revenue is expected to grow 15 to 20% versus Q1 fiscal 2023.

Keep it that margin is expected to be between 12 to 13 percent, up 400 to 500 basis points compared to the same period last year.

Howard Wenger: Thank you, Dave and Howard. I've been fortunate to be working in solar since the 1980s, and I've never been more excited about our industry than today. We look forward to your questions.

Daniel Shugar: Thank you, Dave and Howard. I've been fortunate to be working in solar since the 1980s, and I've never been more excited about our industry than today. We look forward to your questions.

I will now turn the call back to Dan for some concluding remarks. Thank you, Dave and Howard.

I've been fortunate to be working in solar since the 1980s, and I've never been more excited about our industry than today. We look forward to your questions.

Operator: Thank you. Ladies and gentlemen, we will now conduct a question and answer session. If you have a question, please press star followed by the number one on your touch tone phone. You will hear a one-tone prompt acknowledging your request. If you would like to cancel your request, please press star two. Please be advised to limit to one question and one follow-up. One moment please for your first question. Your first question comes from the line of Mark Strouse from JP Morgan. Your line is now open.

Thank you. Ladies and gentlemen, we will now conduct a question and answer session. If you have a question, please press star followed by the number one on your touch tone phone. You will hear a one tone prompt acknowledging your request.

If you would like to cancel your request, please press star 2. Please be advised to limit to one question and one follow up.

One moment please for your first question.

Your first question comes from the line of Mark Strauss from J.P. Morgan. Your line is now open. Your line is now open.

Mark Strouse: Great. Good afternoon. Thank you guys, and welcome to the public markets. My first question. It's good to see the bookings momentum continuing here. Curious if you can kind of break that down between what you're seeing US versus internationally. Just curious if you're seeing any kind of temporary slowing of the sales cycle, just as some of your customers might be awaiting the final IRA guidelines here.

Great. Good afternoon. Thank you guys and welcome to the public markets.

So, my first question – so, it's good to see the bookings moment. I'm continuing here. Curious if you can kind of break that down between what you're seeing U.S. versus internationally. Just curious if you're seeing any kind of temporary slowing of the sales cycle, just as some of your customers might be awaiting the final IRA guidelines here. Dale and I'll have learned the rest of what does the blade mean. Thanks a lot. As you know, businesses in North America on stock report that if you showengine and buy greatness from local460,000, you can never buy it. Which, unfortunately, cost up to Notes. A simple idea, Aurora and my

Howard Wenger: Hi Mark, this is Howard Wenger. I'll take the question. We're really happy with where we ended up at the year, up 90% on our backlog to $2.6 billion year-on-year growth. We finished very strong Q4 in terms of bookings, so we have a lot of momentum that we're carrying into the next year. As Dave mentioned in his remarks, and I did as well, our business has recently been comprised of 1/3 rest of world, 2/3 US in terms of revenue. Historically, we've gone as high as 50/50. The backlog is reflective, roughly of our current ratio there. In terms of the slowing of bookings related to IRA, we're just not seeing that.

Hi Mark, this is Howard Wenger. I'll take the question. So, we're really happy with where we ended up at the year, up 90% on our backlog to $2.6 billion year on year growth.

We finished very strong, very strong Q4 in terms of bookings. So we have a lot of momentum that we're carrying into the next year. As Dave mentioned in his remarks, and I did as well, our business has recently been comprised of one-third, rest of the world, two-thirds U.S. in terms of revenue. And we believe that, again, in a way the businesses that are doing this work are still being constructed right, once again, they're making Bordelstoke and the others are doing that.

Historically, we've gone as high as 50-50.

we've gone as high as 50-50.

Um, and for

The backlog is reflective roughly of our current ratio there. In terms of the slowing of bookings related to Ira, we're just not seeing that.

Mark Strouse: Okay. Okay. Thanks, Howard. If I can just sneak in one more. On the domestic content, you know, hearing from some folks that might be getting closer, who knows? Just curious for an update there since the IPO, as far as what percentage of the overall bill of materials you think you might be able to offer customers? I know the exact definitions are still to be determined, but any updates there? Maybe kind of how you're positioning the supply chain for different scenarios there. Thank you.

Okay, thanks Howard. And then if I can just sneak in one more. On the domestic content, hearing from some folks that that might be getting closer, who knows, but just curious for an update there since the IPO as far as.

what percentage of the overall bill of materials you think you might be able to offer customers. I know the exact definitions are still to be determined, but any update there, and then maybe how you're positioning the supply chain for different scenarios there.

Howard Wenger: Sure Mark, this is Dan Shugar, I'll take that. As you noted, the Treasury Department hasn't defined the rules of what constitutes US domestic content under the IRA, so we can't give a specific informed answer for IRA purposes until those rules are issued. We do intend to do what the customer is qualified for the ITC adder. In general, for customers that require domestic content, we can accept orders for about 70% to 80% of domestic content. These percentages are approximate. They can fluctuate as a function of commodity costs and other factors. We're also working with manufacturing partners for other components, and we expect to be able to accept orders next year for over 90% domestic content for customers that require it.

Daniel Shugar: Sure Mark, this is Dan Shugar, I'll take that. As you noted, the Treasury Department hasn't defined the rules of what constitutes US domestic content under the IRA, so we can't give a specific informed answer for IRA purposes until those rules are issued. We do intend to do what the customer is qualified for the ITC adder. In general, for customers that require domestic content, we can accept orders for about 70% to 80% of domestic content. These percentages are approximate. They can fluctuate as a function of commodity costs and other factors. We're also working with manufacturing partners for other components, and we expect to be able to accept orders next year for over 90% domestic content for customers that require it.

Thank you. Sure Mark, this is Dan Sugar. I'll take that. As you noted, the Treasury Department hasn't defined the rules of what constitutes US domestic content under the IRA. So we can't give.

You know a specific informed answer for IRA purposes until those rules are issued

We do intend to do what the customer needs to qualify for the ITC adder.

In general, for customers that require domestic content, we can accept orders for about 70 to 80 percent. In general,

domestic content. These percentages are approximate, they can fluctuate as a function of commodity costs and other factors.

Howard Wenger: In addition, we are using U.S. Steel, meaning steel that's melted, processed, and coated in the United States in our primary components, like tubes that are produced domestically. Finally, I would add that in addition to mechanical components, we have proprietary electronic tracker controllers that are manufactured domestically.

field that's melted, processed, and coated in the United States in our primary components like tubes that are produced domestically. Finally, I would add that, in addition to mechanical components, we have proprietary electronic tracker controllers that are manufactured domestically.

Mark Strouse: Very helpful. Thank you.

Operator: Your next question comes from the.

Howard Wenger: Thank you. We'll take the next question.

Operator: Your next question comes from the line of Julien Dumoulin-Smith from Bank of America. Your line is now open.

David Bennett: Hey, thank you, team. Appreciate it. Maybe just 2 follow-ups on the last question set. First off, just going back to, you know, you talk about pre-pandemic levels and margins, et cetera. Obviously making good headway against that. Can you talk a little bit about what that trajectory looks like and the cadence getting back to that at this point? I mean, well, I'll leave it there.

Julien Dumoulin-Smith: Hey, thank you, team. Appreciate it. Maybe just 2 follow-ups on the last question set. First off, just going back to, you know, you talk about pre-pandemic levels and margins, et cetera. Obviously making good headway against that. Can you talk a little bit about what that trajectory looks like and the cadence getting back to that at this point? I mean, well, I'll leave it there.

open. Hey thank you team appreciate it. Maybe just two follow-ups on the last question, first off just going back to you know you talk about pre-pandemic levels and margins etc. obviously making good headway against that. Can you talk a little bit about what that trajectory looks like and the cadence getting back to that at this point? I mean well I'll leave it there.

Howard Wenger: Thanks, Julien. This is Dave Bennett. In terms of the margin trajectory, getting back to what we

David Bennett: Thanks, Julien. This is Dave Bennett. In terms of the margin trajectory, getting back to what we

David Bennett: What we call normal, the 15% EBITDA in fiscal 2021. Now as you can see, coming out of the low of fiscal 2022 into fiscal 2023, our Q4 closed at 14% EBITDA. That's due to just us closing relative to the quotes, better execution, some cost reductions that would include logistics. The year came in at 11% EBITDA. That we expect to step up to 13% at the midpoint on our way to that historic margin without any IRA uplift. You know, we're on track with that, but we're really prudent with how we're looking at going forward because we are continuing to reinvest in the business. That investment includes R&D, expanding our supply chain, building out our team, and innovating our products.

Thanks, Julian. This is Dave Bennett. In terms of the margin trajectory, getting back to what we call normal, the 15% EBITDA and fiscal 21, as you can see, coming out of the low of fiscal 22 into fiscal 23, RQ4 closed at 14% EBITDA.

That's due to just us closing, relative to the quotes, better execution, some cost reductions that would include logistics. But the year came in at 11% evened up.

That we expect to step up to 13% at the midpoint. On our way to that historic margin without any IRA uplift, we're on track with that, but we're really prudent with how we're looking at going forward because we are continuing to reinvest in the business.

That business, that investment includes R&D, expanding our supply chain, building out our team, and innovating our product.

Julien Dumoulin-Smith: Got it. Okay. It sounds like it's in the cards, but not quite defined yet. Vis-à-vis the IRA uplift, you guys, I think, alluded a moment ago, Dan, to a further expansion of US manufacturing. I think that's what you were alluding to, I think, in the next few weeks. Can you try to follow up a little bit and describe maybe in totality, if you can, early on the total quantum of domestically manufactured capacity you might be looking at a pro forma for that further addition?

Okay, so it sounds like it's in the cards, but not quite defined yet. And then vis-a-vis the IRA uplift, you guys, I think, alluded a moment ago, Dan, to a further expansion of US manufacturing. I think that's what you were alluding to, I think, in the next few weeks. Can you try to follow up a little bit and describe maybe in totality, if you can, early...

on the total quantum of domestically manufactured capacity, you might be looking at the pro-former for that further addition. Julia Danchiger, so in our slide deck on slide 13, we speak to our...

David Bennett: Julien Dumoulin-Smith, Dan Shugar. In our slide deck on slide 13, we speak to our US supply chain in more granular detail. We have over 25GW of contract capacity for primary components. 10 manufacturing plants currently shipping finished components for various tracker components here in the US and additional plants in progress. We will be having another factory announcement next week, and so please stay tuned for that. Thank you for your question.

Daniel Shugar: Julien Dumoulin-Smith, Dan Shugar. In our slide deck on slide 13, we speak to our US supply chain in more granular detail. We have over 25GW of contract capacity for primary components. 10 manufacturing plants currently shipping finished components for various tracker components here in the US and additional plants in progress. We will be having another factory announcement next week, and so please stay tuned for that. Thank you for your question.

U.S. supply chain in more granular detail. So we have over 25 gigawatts of contract capacity for primary components, 10 manufacturing plants currently shipping finished components for various tracker components.

here in the U.S. and additional plans in progress. We will be having another...

Julien Dumoulin-Smith: All good, cheers.

factory announcement next week. And so please stay tuned for that. Thank you for your question.

Howard Wenger: Thank you. We'll take the next question, please.

Operator: Your next question comes from the line of Christine Cho from Barclays. Your line is now open.

All good. Thank you. We'll take the next question, please. Your next question comes from the line of Christine Cho from Barclays. Your line is now open. Hi. Good evening. Thank you for taking my question. I thought I would maybe ask the backlog question a different way.

Christine Cho: Hi, good evening. Thank you for taking my question. I thought I would maybe ask the backlog question a different way. You said, you know, you ended the year two-thirds US, one-third rest of world. If I just kind of compare it to what it was last quarter, it would seem that the US backlog went up about $100 million quarter over quarter and a bigger jump in rest of world. Am I sort of in the ballpark there? Which I guess would sort of fit with what you have on slide 19. Are VCAs mostly in US or rest of world?

You said, you ended the year 2, 3rd US, 1, 3rd, rest of the world. If I just kind of compared to what it was last quarter, it would seem that the US backlog went up about 100 million quarter over quarter and a bigger jump in rest of the world. Am I sort of in the ballpark there, which I guess would sort of fit with what you have on flight 19? And then our VCA is mostly in US or rest of the world.

Howard Wenger: Okay. I'll take the second part of the question first. Dave will answer the first part. VCAs are focused right now in the US. We do have activity outside of the US, but the ones that are signed and contracted are in the US. Dave?

Okay, I'll take the second part of the question first. Dave will answer the first part. So VCAs are focused

Okay, I'll take the second part of the question first. Dave will answer the first part. So VCAs are focused right now in the US.

We do have activity outside of the US, but the ones that are signed and contracted are in the US. Gabe? Yeah, thanks for the question. I think as you can think about our backlog and how we're growing it and then the velocity of how it flows out into revenue, you would think what Howard prepared is a weighted average. So what are those? So, Randi?

David Bennett: Yeah. Thanks for the question. I think as you can think about our backlog and how we're growing it, and then the velocity of how it flows out into revenue, you would think what Howard prepared is a weighted average. It differs from the rest of the world because we have different markets and when they come in. It's really hard to answer in terms of breaking out our backlog by quarter, by segment. I think it's best to think about it in aggregate with a 3 to 5 quarter rollout on our legacy backlog and then with the VCAs rolling out over 3 to 8 quarters.

It differs rest of the world because we have different markets and when they come in so it's really hard to answer in terms of breaking out our our backlog by quarter by Segment so I think it's best to think about it in Aggregate with the three to five quarter roll out on our legacy backlog and then with the VCAs rolling out over three to eight quarters

It differs, rest of the world, because we have different markets and when they come in. So it's really hard to answer in terms of breaking out our backlog by quarter by segment. So I think it's best to think about it in aggregate with a three to five quarter rollout on our legacy backlog and then with the VCAs rolling out over three to eight quarters. Okay. Thank you.

Christine Cho: Okay, you know, I didn't really see any guidance for gross margins, and it looked like you hit 19% this quarter. You've seen continuous improvement over the last year. How much more running room does this have to move higher? Should we expect this to creep? And was there anything in the quarter that was a benefit that might not recur? If we could also get sort of the impact of FX on top line and EBITDA.

Then, you know, I didn't really see any guidance for gross margins, and it looked like you hit 19% this quarter. You've seen continuous improvement over the last year. How much more running room does this have to move higher? We expect this to creep.

And was there anything in the quarter that was a benefit that might not recur? If we could also get sort of the impact of FX on top line in Ybutsau.

David Bennett: Okay, let me start with the end. No real one-time benefit, no significant impacts from FX on that. In terms of run rate and increase, as we talked about, our fiscal 2021 15% EBITDA with a run rate of about 5% on SG&A gets you to around 20% gross margin. That's the target. We're tracking towards that target. We do expect to continue to improve margins on that path. We're not committing to the exact time to get there, but we are committing to going from around a 13% EBITDA for fiscal 2023, which is about 18% gross margin. That's up from the prior year, 200 basis points on both of those. We're committing to the continued increase. In terms of the timing, you know the target.

Okay, so let me start with the end. No real one-time benefit, no significant impacts from FX.

on that. In terms of run rate and increase as we talked about our fiscal 21 15% EBITDA with a run rate of about 5% on SG&A gets you to around 20% gross margin. That's the target we're tracking towards that target. We do expect to...

Continue to improve margins on that path. We're not committing to the exact time to get there.

But we are committing to going from around a 13% EBITDA for fiscal 23, which is about 18% gross margin and that's up from the prior year to 200 basis points on both of those.

Howard Wenger: Thank you, Christine.

We're committing to the continued increase in terms of the timing you know the target.

Christine Cho: Thank you.

Howard Wenger: We'll take the next question, please.

Operator: Your next question comes from the line of Jordan Levy from Truist. Your line is now open.

Thank you, Christine. We'll take the next question, please. Your next question comes from the line of Jordan Levy from Trubas. Your line is now open.

Jordan Levy: Afternoon, all. Maybe I'd start on just asking the competitive landscape you're seeing out there. I know there's been some smaller names come up in certain applications here in the US. How does that environment look both domestically and in international markets?

Afternoon all. Maybe I'd start on just asking the competitive landscape you're seeing out there. I know there's been some smaller names come up in certain applications here in the US. How's that environment look both domestically and in international markets? Well, it's capitalism works.

Howard Wenger: It's capitalism works. It's a competitive world. We're very focused on our customers, our technology, our company, and running a sound business. Our backlog increase of 90% reflects that focus. There are new competitors. They have a significantly less share in the market, and they have a different customer base. It's interesting that we actually don't run into some of the new entrants into the market. I'll just add that we have a lot of pricing discipline in the company. What do I mean by that? You know, we want to grow, but we want to grow profitably. We're not chasing business. We're focused on tier one customers and going after solid business that the kind of business that we like to do over and over again.

It's a competitive world. We're very focused on our customers, our technology, our company, and running a sound business. Our backlog increase of 90% reflects that focus. But there are new competitors. They have significantly less share in the market and they have a different...

customer base. So it's interesting that we actually don't run into some of the new entrances into the market. We also will just add that

We have a lot of pricing discipline in the company. What do I mean by that?

You know, we want to grow, but we want to grow profitably. So we're not chasing business, we're focused on Tier 1 customers and going after solid business. The kind of business that we like to do over and over again, as we talked about, 80% of our customers are repeat business. So that's the landscape.

Howard Wenger: As we talked about, 80% of our customers are repeat business. That's the landscape. Do you have a follow-on question, please?

David Bennett: Yeah, just a quick follow-on. Just flipping over to the TrueCapture side, seems like there's been some good traction there with the Atlas announcement. I just wanted to get your thoughts on how the reception and feedback's been as you're growing that business and then some of the supply chain challenges you're working through on that side.

Jordan Levy: Yeah, just a quick follow-on. Just flipping over to the TrueCapture side, seems like there's been some good traction there with the Atlas announcement. I just wanted to get your thoughts on how the reception and feedback's been as you're growing that business and then some of the supply chain challenges you're working through on that side.

Do you have a follow-on question, please? Yeah, just a quick follow-on just flipping over to the True Capture side. Seems like there's been some contraction there with the Atlas announcement. I just wanted to get your thoughts on how the reception feedback's been as you're growing that business and then some of the supply chain challenges you're working through on that side. Thanks Jordan, appreciate the question.

Howard Wenger: Thanks, Jordan. Appreciate the question. As Dave mentioned, we are typically 1% to 2% of revenue. We're tracking on the lower end of the range. Bookings are still very strong for TrueCapture. There's a lot of uptake for the software. It's been validated by multiple independent engineers. Customers. It provides tangible value. So there is some delays in commissioning projects that are impacting the TrueCapture recognition of revenue that is principally driven from delays in mounting the final PV panel on the whole power system. But again, bookings for TrueCapture are strong. Revenue recognition is lagging a bit. Really appreciate the questions, Jordan. Next question, please.

first.

It provides tangible value.

So there is some delays in commissioning projects that are impacting the truth capture recognition of.

revenue that is principally driven from delays in bounding the final PV panel on the whole power system. But again, bookings for true capture are strong. Revenue recognition is lagging a bit.

Operator: Your next question comes from the line of Tristan Richardson from Scotiabank. Your line is now open.

I really appreciate the questions, Jordan. Next question, please. Our next question comes from the line of Tristan Richardson from Scotiabank. Your line is now open.

Tristan Richardson: Hey, good evening, guys. Howard, just to follow up on maybe an earlier question about, you know, seeing projects move out into the light in anticipation of IRA. Really appreciate that maybe you're not seeing that at all in your existing book, but maybe to ask it another way, thinking about top of the funnel activity or discussions with customers. I mean, do you sense or are you seeing early indications of, you know, pent-up demand such that when we do have domestic content clarity, you would see order flow accelerate? I mean, just, yeah, any comments on top of the funnel would be helpful.

Hey, good evening, guys. Howard, just to follow up on maybe an earlier question about, you know,

seeing projects move out into the right in anticipation of IRA. Really appreciate that maybe you're not seeing that at all in your existing book, but maybe to ask it another way, thinking about top of the funnel activity or discussions with customers. Do you sense or are you seeing or are you seeing indications of...

you know, pen up demand such that when we do have domestic content clarity, you would see order flow accelerate. I mean, or just, yeah, any comments on top of the funnel will be helpful.

Howard Wenger: Sure. Our entire funnel is robust. Let me put it that way, the top and the bottom. Honestly, we're seeing very strong demand in the US. I think that it takes three to five years to develop a project, utility scale project into fruition. A lot of the activity has already begun on these projects. Our take is that the industry is anticipating a very favorable outcome. Sort of all systems are go on the development side, which is feeding the funnel.

Sure. Our entire funnel is robust. Let me put it that way, the top and the bottom.

And honestly, we're saying very strong demand in the U.S. I think that it takes three to five years to develop a project, a utility-scale project, into fruition. And so a lot of the activity has already begun.

Tristan Richardson: Thanks, Howard. Maybe Dave, just to follow up. Sure. Yeah, just some minor one on the Q2 commentary. Dave, is there anything we should be thinking about, you know, nuanced or project timing-wise, driving sort of that sequential decline sort of implied by the year-over-year commentary you gave for Q2?

Thanks, Howard. And then maybe, Dave, just a follow-up. Sure. Yeah, just a minor one on the 2Q commentary. Dave, is there anything we should be thinking about, nuanced or project-timing-wise, driving sort of a sequential decline sort of implied by the year-over-year commentary you gave for 2Q? Yeah.

David Bennett: Sure. Tristan, you're talking calendar Q2, yeah? Not our fiscal Q1.

Tristan Richardson: Apologies. Yes. Yep.

Sure, Tristan, you're talking calendar Q2, yeah? About our fiscal Q1.

David Bennett: Okay. Yeah. You're right on. The sequential decline is driven by the panel availability, visibility pushing to the H2. If you were looking at it on a sequential basis, we really look at it on a year-over-year basis, which is why we're guiding to 15% to 20% year-over-year growth, which is how we're focused. That tracks to the annual guidance. In terms of sequential, yes, we've seen a pushout due to the panel availability.

Apologizing. Yes. Yep. Okay. Yeah. So I'm going to write on the sequential decline.

is driven by the panel availability, visibility pushing to the second half. If you were looking at it on a sequential basis, we don't. We really look at it on a year-over-year basis, which is why we're guiding to the 15% to 20% year-over-year growth, which is how we're focusing. And that tracks to the annual guidance.

But in terms of sequential, yes, we've seen a push out on the unit of the panel availability.

Tristan Richardson: Super helpful. Appreciate it. Thank you, guys.

Howard Wenger: Thank you.

Operator: Your next question comes from the line of Sophie Karp from KeyBank. Your line is now open.

Operator: Your next question comes from the line of Sophie Karp from KeyBanc. Your line is now open.

Super helpful, appreciate it. Thank you guys. Thank you.

Sophie Karp: Hi. Thank you for squeezing me in here. Congrats on your Q1 as a public company. I was just wondering if you could comment on what percentage of your backlog sort of is tied to domestically manufactured solar modules, and to that degree, maybe de-risk from the delays in getting them from customs. Thank you.

Your next question comes from the line of Sophie Karp from KeyBank. Your line is now open. Hi, thank you for squeezing me in here.

Congrats on your first quarter as a public company.

So I was just wondering if you could comment on

What percentage of your backlog sort of is tied to domestically manufactured solar modules?

into that degree may be derived from the other ways in giving them from customs. Thank you.

Howard Wenger: Thanks, Sophie. Could you repeat your question, please?

Sophie Karp: Yeah, the question is, could you comment on what percentage of your backlog is tied to projects that utilize domestically manufactured solar panels?

Thanks, Sophie. Could you repeat your question, please?

Yeah, the question is, could you comment on what percentage of your backlog is tied to projects that utilize domestically manufactured solar panels? Well, first, we are planned.

Dan Shugar: Well, first, our plan contemplates the PV that's available, and we're not splitting out which projects have PV that's made in the US versus PV that's being imported.

Daniel Shugar: Well, first, our plan contemplates the PV that's available, and we're not splitting out which projects have PV that's made in the US versus PV that's being imported.

contemplate the TV that's available and

We're not splitting out which projects have PVDIS made the US versus PVDIS being important.

Sophie Karp: Okay. Thank you.

Dan Shugar: Yeah. If you have a follow-on, I feel like I didn't wanna leave you hanging. I'm not sure if we fully understood your question, but did you have a follow-on there we could maybe unpack it further?

Daniel Shugar: Yeah. If you have a follow-on, I feel like I didn't wanna leave you hanging. I'm not sure if we fully understood your question, but did you have a follow-on there we could maybe unpack it further?

Thank you. If you have a follow on, I feel like I didn't want to leave you hang out. I'm not sure if we fully understand your question, but if you have a follow on there, we could maybe unpack it further.

Sophie Karp: I guess this is not the breakdown that you're providing. I was just wondering what percentage of their backlog is not tied to, you know, customs duties, but it sounds like you're not comfortable providing that data, which is fine.

So I guess this is not the breakdown that you're providing. I was just wondering what percentage of their backlog is going to not be really not tied to you know, absolute delays, but it sounds like you're not comfortable providing that data, which is fine.

Dan Shugar: Okay, great. Thank you.

Daniel Shugar: Okay, great. Thank you.

Sophie Karp: Thank you.

Howard Wenger: Thank you, Sophie. Appreciate the words of congratulations. Next question, please.

Okay, great. Thank you.

Operator: Your next question comes from the line of Philip Shen from Roth. Thank you. Your line is open.

Thank you, Sophie, and appreciate the words of congratulations. Next question, please.

Philip Shen: Hey, guys. I'll echo that congratulations as well. Couple more questions on backlog and bookings. How much of the $1 billion of bookings for FQ4 2023 is the volume commitment agreements and how much is non-VCA? In terms of your booking strength, to what degree has that continued into your Q1, and how do you expect those bookings to trend in Q1, Q2, and Q3? Thanks.

Your next question comes from the line of Philip Shen from Rod. Thank you. Your line is open.

Hey guys, I'll echo that congratulations as well. A couple more questions on backlog and bookings. How much of the 1 billion of bookings for FQ-423 is the volume commitment agreements and how much is non VCA? And then in terms of your booking strength to what degree has that continued into your FQ-1?

And how do you expect those bookings to trend in FQ1, 2, and 3? Thanks. Okay, sure. Well, on slide 20 of the deck, Phil, we show that $674 million of the $2.559 billion in backlog is attributable to VCAs.

Howard Wenger: Okay. Sure. Well, on slide 20 of the deck, Phil, we show that $674 million of the $2.559 billion in backlog is attributable to VCAs. So that's part one to your question, I believe. The second part is-

Philip Shen: Let me just jump in. I'm sorry. I guess, we're trying to figure out the incremental VCA. For example, year-end 2022 calendar, you guys had about $2.1 billion of backlog. How much of that was VCA, for example? If, you know, the bookings were about $1 billion, how much of those bookings as opposed to the actual backlog, what was the mix of VCA and non-VCA of the bookings? Thanks.

So that's part one to your question, I believe. The second part is... Let me just jump in. I'm sorry. I guess we're trying to figure out the incremental VCA. So, for example, year-end 22 calendar, you guys had about 2.1 billion of...

backlog, how much of that was VCA for example, so if the bookings were about a billion, how much of those bookings, as opposed to the year, as opposed to the actual backlog, what was the mix of VCA and non VCA of the bookings?

Howard Wenger: We're not giving that level of detail, Phil. So far we've had two public announcements of VCAs. If you can track those happened in. One of them happened in calendar year 2022, one announcement calendar year 2023. But we have other VCAs that we've signed and have commitments and deposits for specific projects. That's the level of detail we're providing at this time. You had a part two to your question, which is kind of booking strengths coming into the current quarter or, can you-

Thanks. We're not giving that level of detail, Phil. And so far, we've had two public announcements of VCAs. You can track those. Those happened in, one of them happened in calendar year 22, one announcement in calendar year 23, but we have other VCAs.

Philip Shen: Yeah. What kind of strength do you see ahead? You know, do you see more this kind of momentum carrying through into your next quarter and then even the back half of this calendar year? Thanks.

Yeah, what kind of strength do you feel ahead? Do you see more this kind of momentum carrying through into your next quarter and then even the back half of this calendar year?

Howard Wenger: Yeah. Yes, to both of those. We do.

Philip Shen: Great.

Howard Wenger: There's strong momentum.

Philip Shen: In terms of my final question here, looks like U.S. Steel could be defined as melt-to-coat potentially. We'll have to see. Sorry if I missed this, can you talk about how much capacity that you have today could qualify as melt-to-coat steel, and then how much could qualify by year-end calendar this year or some period in the future?

Yes, yes, above of us we do. We're strong momentum. And then in terms of my final question here, looks like US field could be defined as melt the melting codes potentially we'll have to see. And sorry if I missed this but can you talk about

how much capacity that you have today could qualify as melt to coat steel, and then how much could qualify by year-end calendar this year or some period in the future.

that you have today could qualify as melt to coat steel and then how much could qualify by year-end calendar this year or some period in the future? Yeah, thank you, Phil.

Dan Shugar: Yeah. Thank you, Phil. I'll take that. This is Dan. As noted on again, slide 13 of our materials, we have over 25GW of contracted capacity. That's a large amount of contract capacity, and it's regionally distributed across the US and in some cases, for example, with the JM Steel facility that we dedicated in April, it's co-located with a steel plant, in that case, with the Steel Dynamics facility, one of the newest mills in America, 3 million ton facility, which can make steel and galvanize within a mile of our contract fabrication partners' facility. We very intentionally located these facilities.

Daniel Shugar: Yeah. Thank you, Phil. I'll take that. This is Dan. As noted on again, slide 13 of our materials, we have over 25GW of contracted capacity. That's a large amount of contract capacity, and it's regionally distributed across the US and in some cases, for example, with the JM Steel facility that we dedicated in April, it's co-located with a steel plant, in that case, with the Steel Dynamics facility, one of the newest mills in America, 3 million ton facility, which can make steel and galvanize within a mile of our contract fabrication partners' facility. We very intentionally located these facilities.

I'll take that. This is Dan. As noted on slide 13 of our materials, we have over 25 gigawatts of contracted capacity.

This is Dan. As noted on, again, slide 13 of our materials, we have over 25 gigawatts of contracted capacity.

large amount of contract capacity and it's regionally distributed across the U.S. and in some cases for example with the J.M. Steel facility that we dedicated in April it's co-located with

steel plant in that case with the steel dynamics facility, one of the newest mills in America, three million ton facility which can make steel and galvanize.

within a mile of our contract fabrication partners.

of our contract fabrication partners facility.

Dan Shugar: We have very strong relationships with the most of the top steel companies in the United States, and we see the ability to well, certainly deliver our plan and be able to deliver in excess of our plan with you know, growth, upside growth we could see in the United States with raw material that's melted, coated, and processed in the United States. In this case, you know, rolled, so it's melted, it's rolled, it's galvanized, it's made into tracker components here. So it's a very exciting story also because the U.S. steel is so much cleaner on average than the overseas steel, and we're creating thousands of jobs domestically. It's just a great story.

Daniel Shugar: We have very strong relationships with the most of the top steel companies in the United States, and we see the ability to well, certainly deliver our plan and be able to deliver in excess of our plan with you know, growth, upside growth we could see in the United States with raw material that's melted, coated, and processed in the United States. In this case, you know, rolled, so it's melted, it's rolled, it's galvanized, it's made into tracker components here. So it's a very exciting story also because the U.S. steel is so much cleaner on average than the overseas steel, and we're creating thousands of jobs domestically. It's just a great story.

So we very intentionally located these facilities. We have very strong relationships with the

intentionally located these facilities. We have very strong relationships with the

most of the top steel companies in the United States and we see the ability to deliver, well certainly deliver our plan and be able to deliver in excess of our plan.

with up-site growth we could see in the United States with raw material that's...

you know, upcycled growth we could see in the United States with Gallic, Kom soup, sir Althard. Neltinit?

coated and processed in the United States. In this case, this case, you know, rolled, so it's melted, it's rolled, it's galvanized, it's made in tracker components here. So it's a very exciting story. Also because the US steel is so much cleaner on average than the overseas steel, and we're creating.

Howard Wenger: Thanks for your questions, Phil.

Philip Shen: Thanks, guys.

thousands of jobs domestically, it's just a great story.

Operator: Your next question comes from the line of Maheep Mandloi from Credit Suisse. Your line is now open.

Thanks for your questions, Phil. Thanks, guys. Your next question comes from the line of Mahit Mandloy from Credit Suisse. The line is now open. Hey, good evening and thanks for taking your questions as well and congratulations coming to the markets in the quarter.

Maheep Mandloi: Hey, good evening, and thanks for taking our questions as well. Congratulations coming to the markets in the quarter here. Just curious on the rest of the world growth over here in 2023, in 2024, FY 2024. I'm just curious, how should we think about that, and how should we think about pricing in general in the US and international markets? Thanks.

Howard Wenger: Hi, Maheep. Thanks for your question. Both the United States and the rest of the world are growing at a good clip. As Dave noted, our guidance is to grow overall for the company at a rate of 15% to 20% year on year. We're not giving precise details, but you can think of it as roughly split between the US and rest of world. Rest of world is actually growing a little bit faster in terms of the business. We're really well positioned in a few markets in particular, as Dan noted. Brazil, in particular, is a very strong market for the company. Australia, Spain, multiple continents, things are going quite well. Then the second part of your question had to do with pricing.

in the fashion markets. Thanks. Hi, Muhu. Thanks for your question. So the both the United States and the rest of the world are growing at a good clip. As Dave noted our guidance is to grow overall for the company at a rate of 15 to 20 percent year on year.

And we're not giving precise details, but you can think of it as roughly split between the U.S. and the rest of the world.

The rest of the world is actually growing a little bit faster in terms of the business.

So, and we're really well positioned in a couple of market, few markets in particular as Dan noted. Brazil in particular is very strong market for the company. Australia, Spain, multiple continents things are going quite well.

So, and we're really well positioned in a couple of market, few markets in particular, as Dan noted. Brazil, in particular, is a very strong market for the company. Australia, Spain, multiple continents, things are going quite well.

Howard Wenger: We had some pricing adjustments in the double digits year over year, upward, to compensate largely in part for the impacts from the pandemic and the Ukraine war in combination. Things have equilibrated to a greater degree, and as Dan talked about, we're rapidly scaling our domestic supply chain. We're in a good position to continue to grow and exercise extreme price discipline in all markets around the world. We're gonna keep doing that. Thank you, Maheep. Do you have a...? Was that two questions, or is there a follow-up?

And then the second part of your question had to do with pricing. And so we

We had some pricing adjustments in the double digits year over year upward.

to compensate largely in part of the impacts from the pandemic and the Ukraine war in combination. And things have equilibrated to a degree and as Dan talked about, we're rapidly scaling our domestic supply chain.

We're in a good position to continue to grow and exercise extreme price discipline.

in all markets around the world. And we're gonna keep doing that. Thank you, Mahit. Do you have a, was that two questions or is there a follow up? Is it okay if I could squeeze a follow up just on the cash uses here. You have more than 600 million of liquidity and seems to be in the free cash flow position.

Maheep Mandloi: If I could squeeze a follow-up, just on the cash uses here. You have more than $600 million of liquidity and seems to be in a free cash flow position for FY 2023 and likely for 2024 as well. Just curious, like, what would be the priority here, for the cash uses? Thanks.

David Bennett: Yeah. Thanks for the question. You know, for fiscal 2024, our strategy, our capital allocation strategy is to focus on the fundamentals. We're gonna, through the growth period that we're in right now, is manage our net working capital to between 10% and 15% and allow EBITDA to drive our cash up. You know, like you said, the liquidity of $630 million does provide flexibility and will allow the company to invest at the point in time it's the right time with the right return.

Period that we're in right now is manage our networking capital to between 10 and 15 percent and allow you to drive our cash up and you know like you said the liquidity of 630 million does provide flexibility and will allow the company to invest

Howard Wenger: Thank you for your questions. We're gonna keep rolling. Just so you know, on the call, we're gonna go about 10 minutes over until 3:40PM Pacific Time. We wanna get everybody in, but we're gonna try and be succinct with our answers. Next question, please.

At the point in time, it's the right time with the right return. Thank you for your questions. We're going to keep rolling. And just so you know on the call, we're going to go about 10 minutes over until 3.40 p.m. Pacific time. We want to get everybody in, but we're going to try and be succinct with our answers. Next question, please.

Operator: Your next question comes from the line of Derek Soderberg from Cantor Fitzgerald. Your line is now open.

Your next question comes from the line of Derek Soberberg from Kontor Fitzgerald. Your line is now open. Yeah, hey guys, thanks for taking my questions. I also wanted to ask on pricing, have you guys been in conversation with suppliers and customers or sort of sharing in the benefits of the IRA and can you talk a bit about

Derek Soderberg: Yeah. Hey, guys, thanks for taking my questions. I also wanted to ask on pricing. Have you guys been in conversation with suppliers and customers for sort of sharing in the benefits of the IRA? Can you talk a bit about how you expect that to play out? It sounds like prices have been adjusted higher a bit this year, but you know, is there an expectation for pricing once we get clarification on the IRA? If you could just talk about that a bit, that'd be great.

how you expect that to play out. It sounds like prices have been adjusted higher a bit this year, but is there an expectation for pricing once we get clarification on the IRA? Can you just talk about that a bit? That'd be great.

Howard Wenger: Sure. My pleasure. Yeah. Our plan contemplates how we expect things to play out. I'll start with that. We are not, as we mentioned, however, we are not factoring any of the 45X incentives that are contemplated to come. Look, I mean, the IRA, we think it was very well structured. There's a lot of benefits, tremendous benefits to developers and owners of the systems that come with that. Relative to domestic manufacturers, not only for trackers, but also for solar panels and other inverters, electronics that are being made in the US, you know, we think those were right-sized to really help us significantly expand the US supply base. The conversation is really around supply security, supply certainty, on-time delivery. We've been able to really articulate those benefits.

Sure, my pleasure. Yeah, so our plan contemplates how we expect things to play out. I'll start with that. And we are not, as we mentioned, however, we were not factoring any of the 45x. But...

incentives that are contemplated to come. And look, I mean the IRA, we think it was very well structured. There's a lot of benefits, tremendous benefits, to developers and owners of the systems

Relative to domestic manufacturing, not only for trackers but also for solar panels and other inverters, electronics, that are being made in the U.S.

You know, we think those were right sides to really help us significantly expand the U.S. supply base. So the conversation is really around supply security.

Howard Wenger: That's how we see things playing out. Do you have a quick follow-up?

supply certainty, on-time delivery, we've been able to really articulate those benefits.

certainty, on-time delivery, we've been able to really articulate those benefits.

Howard Wenger: That's how we see things playing out. Do you have a quick follow-up?

Derek Soderberg: Got it. I do. You know, you mentioned permitting and interconnection delays in the prepared remarks. I'm curious if those, if that's geographically specific to the US and less so internationally, you know, is that true? You know, is there a path or timeline towards that improving over time? You know, what needs to happen for that to improve? Any detail there would be great. Thanks.

So that's how we see things playing out. Do you have a quick follow up? I do. You mentioned permitting and interconnection delays in the prepared marks. I'm curious of those. Is that geographically specific to the US and what's so internationally? You know, is that true?

Dan Shugar: Sure. Look, you know, these are real headwinds, on the permitting. I'm sure, yeah, you've done some projects at your house. You've tried to get a permit on the construction side with your local jurisdiction. Things can roll out. You know, we're fulfilling many dozens of projects at any given moment. You can have issues where, a construction permit is delayed. You know, but in aggregate, there are so many projects and so much demand. That's why we're seeing, you know, our revenue keep going up and our plan keeps going up. Relative to electrical interconnection, you know, it's a fact that the time required to achieve an interconnection, permit or authorization has increased over time, significantly. This has been documented. It's a factor, definitely.

Daniel Shugar: Sure. Look, you know, these are real headwinds, on the permitting. I'm sure, yeah, you've done some projects at your house. You've tried to get a permit on the construction side with your local jurisdiction. Things can roll out. You know, we're fulfilling many dozens of projects at any given moment. You can have issues where, a construction permit is delayed. You know, but in aggregate, there are so many projects and so much demand. That's why we're seeing, you know, our revenue keep going up and our plan keeps going up. Relative to electrical interconnection, you know, it's a fact that the time required to achieve an interconnection, permit or authorization has increased over time, significantly. This has been documented. It's a factor, definitely.

on the construction side with your local jurisdiction. I think this can roll out. We're fulfilling many dozens of projects in any given moment. You can have issues where a construction permit is delayed.

But in aggregate, there are so many projects and so much demand. That's why we're seeing our revenue keep going up and our plan keep going up. It's a fact that the time...

required to achieve an interconnection.

permit or authorization has increased over time significantly. This has been documented.

or authorization has increased over time, but significantly this has been documented. And so it's a factor, definitely.

Dan Shugar: The economics of solar are so strong and so many great developers and IPPs are out developing projects. There are 3,000 utilities in the United States, as you know, kind of an interesting data point, and there's many, many projects in the interconnection queue. We're seeing an army of developers and IPPs just bringing forth high-quality projects that are advancing millions of dollars to perfect their project interconnection. You know, it goes to why we guide to an annual plan. Just to give you a sense, right? Our plan for this year, if you look at our $2.2 billion-dollar guide on average, we're delivering over $40 million a week during this upcoming period.

Daniel Shugar: The economics of solar are so strong and so many great developers and IPPs are out developing projects. There are 3,000 utilities in the United States, as you know, kind of an interesting data point, and there's many, many projects in the interconnection queue. We're seeing an army of developers and IPPs just bringing forth high-quality projects that are advancing millions of dollars to perfect their project interconnection. You know, it goes to why we guide to an annual plan. Just to give you a sense, right? Our plan for this year, if you look at our $2.2 billion-dollar guide on average, we're delivering over $40 million a week during this upcoming period.

But the economics of solar are so strong and so many great developers and IPPs are out developing projects. There are 3,000 utilities in the United States as kind of an interesting data point and there's many, many projects in the UNIROC connection queue. So we're seeing.

An army of developer and ITPs just brings forth high quality projects through advancing millions of dollars to perfect their project inter-connection.

But it goes to why we guide to an annual plan, just to give you a sense, right? So our plan for this year, if you look at our $2.2 million dollar, go hide on $1 billion dollar, go hide on average, we're delivering over $40 million dollars a week during this upcoming period.

Dan Shugar: If you have a single project that our customer's waiting for a permit to be able to close on materials, you can have a bit of movement around the edge of the quarter. We're really focused on annual results, meeting customer needs, and delivering positive profitability for the company. I believe our results speak to that. Thanks, Derek, for your questions. Next question, please.

Daniel Shugar: If you have a single project that our customer's waiting for a permit to be able to close on materials, you can have a bit of movement around the edge of the quarter. We're really focused on annual results, meeting customer needs, and delivering positive profitability for the company. I believe our results speak to that.

If you have a single project that our customer's waiting for a permit to be able to close the material, you can have a bit of movement around the edge of the quarter. We're really focused on annual results.

meeting customer needs and delivering positive profitability for the company. And I believe our results speak to that.

Howard Wenger: Thanks, Derek, for your questions. Next question, please.

Operator: Your next question comes from the line of Kashy Harrison from Craig-Hallum Capital Group. Your line is now open.

Thanks, Derek, for your questions. Next question, please.

Your next question comes from the line of Christian Schrob from Craig Hallub Capital Group. Your line is now open.

Kashy Harrison: Congrats on a great quarter. I just have one question. Do you guys have any opinion yet on panel availability for your fiscal year 2025? The reason I ask is some of our contacts, you know, are much more optimistic about 2024 than they are 2023. I'm just wondering if you have any opinion you'd like to share.

Congrats on a great quarter. I just have one question. Do you guys have any opinion yet on panel availability for your fiscal year 25? The reason I ask is some of our contacts are much more optimistic about 24 than they are 23.

Dan Shugar: You're speaking about FY 2025, correct?

Daniel Shugar: You're speaking about FY 2025, correct?

Kashy Harrison: Yeah. Fiscal year 25. Yep.

I'm just wondering if you have an opinion you'd like to share. You're speaking about for 25 correct? Yeah, fiscal year 25. Yep.

if you have an opinion you'd like to share. You're speaking about for 25, correct? Yeah, your fiscal year 25, yep. Got it.

Dan Shugar: Got it.

Daniel Shugar: Got it.

Derek Soderberg: Twenty-four.

Kashy Harrison: Twenty-four.

Dan Shugar: Yeah, got it. Okay. Well, first, let me just kick start what's happening today. We're seeing increased panels coming into the United States with less issues with Customs and Border Protection, as a general statement. A significant increase for panels coming from India, a significant increase of panels coming from Southeast Asia. What's really exciting is also the, since the IRA was announced, according to the American Clean Power Association, over 25 new, you know, PV manufacturing facilities have been announced for the United States. In some cases, those are expansions. In some cases, those are new plants. You know, we're hopeful the market will respond quickly as we executed with tremendous speed on the tracker manufacturing side.

Daniel Shugar: Yeah, got it. Okay. Well, first, let me just kick start what's happening today. We're seeing increased panels coming into the United States with less issues with Customs and Border Protection, as a general statement. A significant increase for panels coming from India, a significant increase of panels coming from Southeast Asia. What's really exciting is also the, since the IRA was announced, according to the American Clean Power Association, over 25 new, you know, PV manufacturing facilities have been announced for the United States. In some cases, those are expansions. In some cases, those are new plants. You know, we're hopeful the market will respond quickly as we executed with tremendous speed on the tracker manufacturing side.

Yeah got it. Okay well first let me just take stock what's happening today. We're seeing increased panels coming into the United States with less issues with Customs and Border Protection.

as a general statement and

a significant increase for panels coming from India, a significant increase of panels coming from Southeast Asia.

What's really exciting is also the since the IRA was announced

According to the American Clean Power Association, over 25 new PV manufacturing facilities have been announced for the United States. In some cases those are expansion and some cases those are new plants. So we're hopeful of the market. We'll respond quickly as we did on this.

Dan Shugar: We're optimistic that we're going to see more domestic manufacturing of solar panels and all the incumbent components while these trade barriers have been reduced to allow us to fulfill the intermediate-term market. Thank you, Kashy Harrison, for your question.

Daniel Shugar: We're optimistic that we're going to see more domestic manufacturing of solar panels and all the incumbent components while these trade barriers have been reduced to allow us to fulfill the intermediate-term market.

we executed with tremendous speed on the tracker manufacturing side. We're optimistic that we're going to see more domestic manufacturing of solar panels and all the incoming components while these trade barriers.

Howard Wenger: Thank you, Kashy Harrison, for your question.

have been reduced to allow us to fulfill the intermediate term market. Thank you Christian for your question.

Kashy Harrison: Thanks.

Dan Shugar: Next question.

Daniel Shugar: Next question.

Operator: Your next question comes from the line of Martin Malloy from Johnson Rice. Your line is now open.

Next question. Your next question comes from the line of Martin Malloy from Johnson Race. Your line is not open.

Speaker 15: Good afternoon. I just have one question as well. Is there any trends that you could maybe highlight in terms of customer interest or orders, for some of your different products you've introduced, the NX Horizon-XTR or NX Gemini?

Martin Malloy: Good afternoon. I just have one question as well. Is there any trends that you could maybe highlight in terms of customer interest or orders, for some of your different products you've introduced, the NX Horizon-XTR or NX Gemini?

Good afternoon. I just have one question as well. Are there, is there any.

friends that you could maybe highlight in terms of customer interest or orders for some of your different products you've introduced, the Horizon XTR Gemini.

Dan Shugar: Yeah. I really appreciate that question. I want to really speak to some of the technologies that are delivering extreme value to customers. The software, TrueCapture, and our terrain-following technology, XTR. We introduced TrueCapture over six years ago, and when we introduced it, we had data from multiple utility-scale field trials that have been validated by independent engineers and socialized with the independent engineers that represent owners and so forth. Which is why we've achieved such strong commercial traction on that technology. As Howard mentioned, 190 customers are using it, and that's around the world, I believe, on 5 continents. Similarly, for our terrain-following technology XTR, we first deployed that in 2018, and then worked really closely with a leading EPC to field dozens of projects. We released it globally.

Daniel Shugar: Yeah. I really appreciate that question. I want to really speak to some of the technologies that are delivering extreme value to customers. The software, TrueCapture, and our terrain-following technology, XTR. We introduced TrueCapture over six years ago, and when we introduced it, we had data from multiple utility-scale field trials that have been validated by independent engineers and socialized with the independent engineers that represent owners and so forth. Which is why we've achieved such strong commercial traction on that technology. As Howard mentioned, 190 customers are using it, and that's around the world, I believe, on 5 continents. Similarly, for our terrain-following technology XTR, we first deployed that in 2018, and then worked really closely with a leading EPC to field dozens of projects. We released it globally.

Yeah, I really appreciate that question.

I want to really speak to some of the technologies that are delivering extreme value to customers.

software, TrueCapture, and our terrain- following technology, XTR. So we introduced TrueCapture over six years ago, and when we introduced it, we had data from multiple utility-scale field trials that have been validated by all of hospitals, hospitals, and all of the things that have been covered for many, many years.

the independent engineers that represent owners and so forth, which is why we've achieved such strong commercial traction on that technology. As Howard mentioned, over 190 customers are using it, and that's around the world, I believe, on five contents. I've goted a bunch of other design plaques and I was hoping to cover quite a bit with

Similarly, for our terrain following technology XTR, we first deployed that in 2018 and then worked really closely with a leading APC to field dozens of projects and then we released it globally. Today,RONNIE smuggling

Dan Shugar: Today, we have over 60 projects around the world using XTR. This is really about having real hardware backed up by real software, real firmware to be able to extract the value, have it validated by the engineers, and this stuff works. I can speak to that as an engineer. That is definitely driving our commercial activity. Thank you for your question, Marty. Next question, please.

Daniel Shugar: Today, we have over 60 projects around the world using XTR. This is really about having real hardware backed up by real software, real firmware to be able to extract the value, have it validated by the engineers, and this stuff works. I can speak to that as an engineer. That is definitely driving our commercial activity.

We have over 60 projects around the world using XTR. And this is really about having real hardware backed up by real software, real firmware to be able to extract the value, have it validated by the engineers, and this stuff works. I can speak to that as an engineer.

Howard Wenger: Thank you for your question, Marty. Next question, please.

Howard Wenger: Thank you.

Martin Malloy: Thank you.

And that is definitely driving our commercial activity. Thank you for your question, Marty. Next question, please. Thank you. Your next question comes from the line of Thomas Martin from BNP. Your line is now open. Hi there. Thanks for taking questions. Okay.

Operator: Your next question comes from the line of Thomas Martin from BNP. Your line is now open.

Speaker 16: Hi there. Thanks for taking questions. Just a quick clarification, first of all. Are you able to indicate how much of the bottom end of your guidance range can be covered from existing project awards in the backlog?

Thomas Martin: Hi there. Thanks for taking questions. Just a quick clarification, first of all. Are you able to indicate how much of the bottom end of your guidance range can be covered from existing project awards in the backlog?

Just a quick clarification first of all. Are you able to indicate how much of the bottom end of your guidance range can be covered from existing project awards in the backlog?

Dan Shugar: Sure. You know, our existing backlog allows us to, you know, in terms of meeting our guidance, we're very comfortable that the majority is booked up. That's why we're providing the range that we are.

Daniel Shugar: Sure. You know, our existing backlog allows us to, you know, in terms of meeting our guidance, we're very comfortable that the majority is booked up. That's why we're providing the range that we are.

Ter, you know, ARP existing backlog allows us to, you know, in terms of meeting our guidance.

Sure, you know our existing backlog allows us to, you know, in terms of meeting our guidance, we're very comfortable that the majority is booked up.

And so that's why we're providing the range that we are. Quick follow-up. Thanks and yeah so quick follow-up. You can't answer this. On the software side, panel supply, you've spoken about that, having been...

Speaker 16: Quick follow-up. Thanks. Yeah, sorry, quick follow-up. You part answered this. I mean, on the software side, you know, panel supply, you've spoken about that as being part of the reason for your revenue recognition lacking. You've spoken about panel supply being an issue for the next quarter. You know, we've got them coming into the market and coming through to customs. However, it's perhaps in the near term not allowing all the projects to accelerate dramatically. Is this likely to be a calendar H2 normalization cycle in terms of panel delivery, also enabling to unlock the software revenues that are currently not turned on? And are you able to give us any quantification of what sort of level of software revenues you've got deferred awaiting panels?

Thomas Martin: Quick follow-up. Thanks. Yeah, sorry, quick follow-up. You part answered this. I mean, on the software side, you know, panel supply, you've spoken about that as being part of the reason for your revenue recognition lacking. You've spoken about panel supply being an issue for the next quarter. You know, we've got them coming into the market and coming through to customs. However, it's perhaps in the near term not allowing all the projects to accelerate dramatically. Is this likely to be a calendar H2 normalization cycle in terms of panel delivery, also enabling to unlock the software revenues that are currently not turned on? And are you able to give us any quantification of what sort of level of software revenues you've got deferred awaiting panels?

part of the reason for your revenue recognition lacking. He's spoken about panels by being an issue for the next quarter. We've got them coming into the market and coming through to customs. However, it's perhaps in the new term not perhaps, you know, go out and roll the protest to accelerate the mass.

Dan Shugar: Okay. I think I understand your question. You're asking the timing if our backlog for our software, which has grown, impacts the rollout of the revenue recognition related to software revenue. Is that your question?

Daniel Shugar: Okay. I think I understand your question. You're asking the timing if our backlog for our software, which has grown, impacts the rollout of the revenue recognition related to software revenue. Is that your question?

software revenues, you've got the deferred awaiting panels. Okay, I think I understand your question. You're asking the timing, if our backlog for our software, which has grown, impacts the rollout of the revenue recognition related to software revenue? Is that your question? Well, so, correct me if I'm wrong, but my understanding was that you...

Speaker 16: Well, so correct me if I'm wrong, but my understanding was that you also got effectively a backlog of revenue recognition that hasn't come through on the software side related to the panel supply issues. You know, it sounds like the panel supply issues are getting better, maybe not in the next calendar quarter, but you know, does your guidance assume in H2 that the revenue recognition on the software side is improving quite significantly because the panels are coming through and allowing you to actually turn on the software or allowing the customers to turn on the software?

Thomas Martin: Well, so correct me if I'm wrong, but my understanding was that you also got effectively a backlog of revenue recognition that hasn't come through on the software side related to the panel supply issues. You know, it sounds like the panel supply issues are getting better, maybe not in the next calendar quarter, but you know, does your guidance assume in H2 that the revenue recognition on the software side is improving quite significantly because the panels are coming through and allowing you to actually turn on the software or allowing the customers to turn on the software?

in the second half of the year that the revenue recognition software side is improving quite significantly because the panels are coming through and allowing you to actually turn on the software or allowing the customers to turn on the software. Yeah, and the guidance does contemplate the timing of our software revenue recognition and it will be waited to the second half.

Dan Shugar: Yeah. The guidance does contemplate the timing of our software revenue recognition, and it will be weighted to H2.

Daniel Shugar: Yeah. The guidance does contemplate the timing of our software revenue recognition, and it will be weighted to H2.

Howard Wenger: Thank you for your questions, Thomas. Appreciate it. Next question.

Dan Shugar: I believe this is our, this will be our last question. Thank you.

Daniel Shugar: I believe this is our, this will be our last question. Thank you.

Thank you for your questions. I'm appreciated. Next question. And I believe this is our last question. Thank you.

Operator: Your next question will be from Donovan Schafer from Northland Capital Markets. Your line is now open.

Our next question will be from Donovan Shaffer from Northland Capital Markets. Your line is now open. Hey guys, thanks for taking the questions. I want to just ask, just sort of focusing on hardware for a moment, just the hardware side of things, about kind of new product innovation or introductions, if there's anything on the hardware side.

Speaker 17: Hey, guys. Thanks for taking the questions. I want to just ask, just sort of focusing on hardware for a moment, just the hardware side of things, about kind of new product innovation or introductions, if there's anything on the hardware side, you're looking at or most interested in or developing. Then just tightly related to that, you know, it does look like a lot of companies have come out with these, you know, dual row trackers where you use a pretty simple kind of push-pull setup to have one motor driving, you know, two rows. You guys are. I know you guys are very, you know, kind of pioneers of the independent row idea, but I'm just wondering, you know, if there's sort of a place for that. We've got Trina, GameChange, PV Hardware, Arctech, SGI, Norland.

Donovan Schafer: Hey, guys. Thanks for taking the questions. I want to just ask, just sort of focusing on hardware for a moment, just the hardware side of things, about kind of new product innovation or introductions, if there's anything on the hardware side, you're looking at or most interested in or developing. Then just tightly related to that, you know, it does look like a lot of companies have come out with these, you know, dual row trackers where you use a pretty simple kind of push-pull setup to have one motor driving, you know, two rows. You guys are. I know you guys are very, you know, kind of pioneers of the independent row idea, but I'm just wondering, you know, if there's sort of a place for that. We've got Trina, GameChange, PV Hardware, Arctech, SGI, Norland.

you're looking at, or most interested in, or developing. And then just tightly related to that, it does look like a lot of companies have come out with these dual row trackers where you use a pretty simple kind of push-pull setup to have one motor driving two rows. You guys are – I know you guys are very –

pioneers of the independent row idea, but I'm just wondering if there's sort of a place for that. We've got Trina, Game Change, PV Hardware, ARCTEK, STI New Orleans, there's a lot of them out there now. And so just is there substance to it or is there something you see where you feel like you couldn't see yourself going there and just doesn't make sense somehow.

Speaker 17: You know, there's a lot of them out there now. Just, is there substance to it, or is there something you see where you feel like you couldn't see yourselves going there and just doesn't make sense somehow?

Donovan Schafer: You know, there's a lot of them out there now. Just, is there substance to it, or is there something you see where you feel like you couldn't see yourselves going there and just doesn't make sense somehow?

Dan Shugar: Yeah. Donovan Schafer, I appreciate the question. Let me just say we have a deep technology and product roadmap that covers each of our three buckets in mechanical, electronics and controls, and software. We're gonna have a range of new offerings covering all three of those, this year and on a go forward. With respect to the architecture of our system, we're very open to evaluating different architectures. You know, in prior companies, we actually. We didn't invent the concept of tracking, but we commercialized it in prior companies. We've been working on trackers since the 1980s, and we're always evaluating things. We believe, as Howard Wenger mentioned, that our solutions can allow us to win across a wide range of geographies and a wide range of site conditions.

Daniel Shugar: Yeah. Donovan Schafer, I appreciate the question. Let me just say we have a deep technology and product roadmap that covers each of our three buckets in mechanical, electronics and controls, and software. We're gonna have a range of new offerings covering all three of those, this year and on a go forward. With respect to the architecture of our system, we're very open to evaluating different architectures. You know, in prior companies, we actually. We didn't invent the concept of tracking, but we commercialized it in prior companies. We've been working on trackers since the 1980s, and we're always evaluating things. We believe, as Howard mentioned, that our solutions can allow us to win across a wide range of geographies and a wide range of site conditions.

Yeah, Donna, then I appreciate the question. Let me just say we have a deep technology and product roadmap that covers each of our three buckets in mechanical, electronics, and controls in software. And we're going to have a range of new offerings covering all three of those this year and on a go forward. With respect to the architecture of our system, we're very open.

to evaluating different architectures. You know, in prior companies, we actually, we didn't invent the concept of tracking, but we commercialized it in prior companies.

And so we've been working on trackers since the 1980s, and we're always evaluating things. We believe, as Howard mentioned, that our solutions can allow us to win across a wide range of geographies and a wide range of site conditions.

Dan Shugar: Our backlog with a 90% year-on-year growth reflects that outcome. Thank you for your question, Donovan. I'd like to take this opportunity to thank everyone for listening in to our first earnings call, supporting the company through our journey from when we started 10 years ago on the IPO process and really the industry. We're looking forward to working with our other industry partners to fulfill our vision of a renewably powered world. Thank you.

Daniel Shugar: Our backlog with a 90% year-on-year growth reflects that outcome. Thank you for your question, Donovan. I'd like to take this opportunity to thank everyone for listening in to our first earnings call, supporting the company through our journey from when we started 10 years ago on the IPO process and really the industry. We're looking forward to working with our other industry partners to fulfill our vision of a renewably powered world. Thank you.

And our backlog with a 90% year-on-year growth reflects that outcome. Thank you for your question, Donovan. And I'd like to take this opportunity to thank everyone for listening in to our first earnings call, supporting the company through our journey from when we started 10 years ago in the IPO process.

And really the industry, we're looking forward to working with our other industry partners to fulfill our vision of a renewably powered world. Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

Dan Shugar: Nice job.

Daniel Shugar: Nice job.

Nice job...................

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