Q1 2024 Nextracker Inc Earnings Call
Good afternoon, ladies and gentlemen, and welcome to the next Chucker first quarter fiscal year 2024 financial results Conference call. At this time all lines are in a listen only mode. Following the presentation.
Duct a question and answer session. If at any time during this call. If you require immediate assistance. Please press star zero for the operator. This call is being recorded on Wednesday July 26, 2023, I would now like to turn the conference over to John Quinby Director Finance and IR.
Please go ahead. Thank you good afternoon and welcome to next tracker earnings Conference call for our first quarter fiscal 2024 results with.
With me today is our Chief Executive Officer, and founder Danny Sugar, our President our Wagner and our Chief Financial Officer, David that all three will get brief remarks, followed by Q&A.
Slides for today's call as well as a copy of the earnings press release and summary financial are available on the Investor Relations section at <unk> Dot Com. This call is being recorded and will be available for replay on the Investor Relations section of our website as.
As a reminder, today's call contains forward looking statements, which are based on our current expectations and assumptions. These statements involve risks and uncertainties that could cause actual results to differ materially.
Discussion of these risks and uncertainties.
See the cautionary statements in our presentation press release or in the risk factors section of our most recent filings with the SEC. This information is subject to change and we undertake no obligation to update these forward looking statements.
Please note we will provide non-GAAP measures on today's conference call non-GAAP to GAAP reconciliations can be found in the appendix slide of today's presentation as well as in the summary financial posted on the Investor Relations section of our website.
All growth metrics will be on a year over year basis, unless stated otherwise now I'd like to turn the call over to our CEO .
Thank you for joining us to review, our first quarter fiscal 2024 results.
With me today are Howard Wenger, President and Dave <unk>, Chief Financial Officer. Following our remarks, we look forward to your questions. Please.
Please turn to slide three.
I am very pleased with our execution and results in Q1 across all key metrics, starting with our financial results Rep.
Revenue for the quarter was $480 million, increasing 19% year on year.
Our EBITDA for the quarter with $84 million up over 160% year on year.
Increased profitability is attributable to pricing discipline.
Monetization of distinct product features and improved operational efficiency, we achieved solid positive cash flow for the quarter. Further bolstering next tracker is robust and differentiated liquidity position in the industry.
Jeff will provide more detail on our financials.
We have been relentlessly driving solar technology innovation that provides tangible value to customers and hardware controls and software.
Innovation is focused on reducing L E <unk> cost of energy solar power, which supports our customers to increase their project profitability.
And next tracker to exercise pricing discipline.
We have exciting product announcements planned for the major our Eplex trade show in September .
We posted another strong quarter of new contract bookings building upon our booking achievements of last fiscal year.
We ended the quarter with new record backlog over $3 billion.
From $2 6 billion.
As of the end of fiscal year 2023.
Sales momentum continued with repeat business and new customers across diverse and expanding geographies. This is reflected in our strong international performance in the quarter were over 40% of our revenue was attributable to overseas projects.
We were pleased that wood Mackenzie recently named next tracker as the global tracker market share leader for 2022 by a significant margin.
This is the eighth consecutive year next tracker has led the industry.
Based on our Q1 results and strong industry position, we are increasing our annual revenue and EBITDA guidance as David will cover.
In our prior earnings call, we quantified progress.
And the growth of solar as today's largest source of new power being added to my script.
And we also reviewed that in the U S. DRA provides an attractive 30% investment tax credit level for 10 years with upside for U S manufacturing content.
Today, I will provide some qualitative comments on market dynamics based on our insights for meeting hundreds of customers that global events last quarter.
To give a sense of engagement at <unk> Europe last month over 100000 people attended the conference.
We are seeing strong demand factors driven by cost reduction in solar panels and battery storage combined with performance enhancements can panels power electronics and trackers, such as next trackers proven true capture technology.
Some of these.
These factors are yielding lower LTE OE and solar is breaking away from fossil and nuclear power is a lower cost lower risk and faster to deploy resource.
Even when the cost of battery storage is included which is now typical in major markets like the USA.
In parallel electricity demand is increasing with the electrification of transportation end use demand.
In the U S.
Customer pull for locally make components is paired with industrial policy.
<unk> and over 60, new or expanded factory announcements in just the past year for solar and storage hundreds of thousands of people are working directly and forward.
New factories and growing jobs are providing broad support for the industry.
Given solar today provides under 5% of global electric power generation, we envision significant long term growth as cost effective solar increases its share of power for the grid.
Finding new world, where electricity demand keeps increasing and society trends toward de carbonization now.
Turning back to next tracker.
Our global supply chain is a key competitive advantage, which we generally map to align to our local markets.
This ecosystem comprises about 50 partners across 16 countries and five continents.
To serve our ongoing growth next tracker is continuing to collaborate with our valued sub contractors to increase our global manufacturing footprint.
I will cover our U S position shortly.
After we reported our Q4 results the U S Department of Treasury issued guidance regarding iras domestic content provisions receiving these rules clarifications with incrementally helpful. For next tracker and we continue to work with our customers and trade associations to further clarify the requirements, we continue to exclude potential.
Irate impacts from our guidance pending definitive clarifications and market response.
After quarter end, we completed a successful secondary offering of next tracker stock to the market, allowing our pre IPO shareholders to reduce their ownership and increase liquidity of our stock. Following the transaction flex owns less than 52% of X trackers shares.
The headwinds noted previously regarding solar panel availability and permitting delays for electrical interconnection and project construction starts still exist and are likely to continue for the intermediate term. So there is tangible progress.
The us solar panel availability.
Slide four.
Accelerating our U S manufacturing suppliers has been a key objective.
I am pleased that ramping the 25 gigawatts of contract capacity is on track.
Last quarter, we celebrated the new plant opening in Memphis, Tennessee, with our legacy supply partner MSS joining in the plant dedication with our customers' Silicon Ranch Corporation, who awarded US a second volume commitment agreement of three gigawatts during any of that.
Key raw material supplier U S steel and the CEO of the solar Energy Industries Association.
Key trade Association driving solar policy.
At this public opening next tracker finished goods or on the floor ready to ship to regional job site underscoring our ability to quickly scale with our partners.
Our focus in the U S continues to be sourcing from electric arc furnace mills that are significantly lower carpet.
<unk> overseas steel production.
We are continuing to build our supply chain and next month are planning another strategic supply announcement, we now have over 10 manufacturing facilities with dedicated next tracker lines in the United States.
And now I'll turn the call over to Howard to expand upon our commercial progress.
Let me Echo Dan by congratulating the next tracker team.
We are very pleased with the company's execution, resulting in another strong quarter performance.
Last earnings call on May 10th.
We provided some background on the company given it was our first reporting quarter since going public earlier this year.
I, specifically covering our technological innovation, which coupled with our best in class team allows us to win business across all regions and terrains.
Please turn to slide five.
We reported last quarter that we had significant sales velocity.
<unk>, leading to a company record backlog of $2 6 billion.
Pending our fiscal year 2023.
We plan to report our backlog on an annual basis, while providing sales and customer demand insights on a quarterly basis.
This is consistent with our annual focus as a company that reflects the nature of our large scale project business.
This quarter, we are pleased to report that our strong sales momentum continued and we significantly added to our backlog.
Our backlog is now greater than $3 billion.
At quarter end, establishing a new record for the company.
We believe we have a distinct competitive advantage, creating demand pool. This is driven by our differentiated product offering scale global supply chain and close relationships with our customers and partners where over 80% of our revenue is generated by repeat business.
Further we believe the investment thesis is intact for large scale solar in the U S. Right now independent of the 10% domestic concept bonus provided by the inflation reduction act or IRA.
There is justifiably a lot of focus on the domestic content provisions and government guidance on how to interpret them, but keep in mind that the IRA created a well formed and.
Well known cost sequential policy in the form of establishing a 30% investment tax credit or ITC, which has no domestic content requirements.
<unk> has been the predominant federal policy instrument for solar for decades. So generally speaking the 30% ITC is well understood and is now contemplated into the economics of developing solar power plants.
Further recall that the ITC was scheduled to decline pre IRA to 10% next year.
So elevating it to 30% and holding that constant for at least 10 years.
It's an incredibly significant change and we believe it is the biggest pillar and driver of IRA in terms of utility scale solar demand.
Of course, the domestic content and manufacturing tax credits are important and government clarification. Some market responses are still ongoing but.
But we believe there is sufficient understanding of the IRA provisions today to continue to propel the large scale solar segment forward.
We believe these factors are driving continued demand in the U S. But we're also seeing demand strength internationally. This is illustrated on the map on slide five.
You can see we executed agreements totaling over 10 gigawatts of projects during our fiscal Q1.
Although this is a subset of our projects and customer wins from the corner.
The intent is to highlight the magnitude of next trackers continued sales strength from the.
<unk> of our global reach spanning multiple continents.
We had a healthy combination of EPC.
In VCA business with new and repeat customers from.
From North America to South America.
From Europe to Africa, and Asia and Oceania.
These sample Q1 company wins also reflect the strength of our global team and.
In sales marketing supply chain training finance and support that provide a platform to further scale and grow.
In summary, we saw demand strength in all of our core markets around the world.
Now, let me turn the call over to Dave <unk>, Our Chief Financial Officer to review the financial details of the quarter and to discuss our guidance for fiscal 2024.
Thank you Howard.
Q1 fiscal 2024 represents our first full financial period for next tracker as a public company.
We are off to a great start.
Please turn to slide seven our fiscal 2020 for Q1 results.
Revenue for the quarter, both at the high end of our guidance at $480 million in.
An increase of 19% year over year.
Rest of the World revenue was $209 million up 56% year over year and.
44% of our current quarter mix.
As expected revenue in the U S was relatively flat versus the prior year quarter, primarily due to push outs of certain projects due to permitting delays.
And panel availability.
The rest of the World was particularly strong this quarter.
No change to our expectation that the U S will represent 60% to 70% of total revenue for the year.
Adjusted EBITDA increased 52 million to $84 million from the first quarter of fiscal 'twenty three and.
An increase of over 160%.
Our strong results were largely driven by improved execution.
Along with lower logistics cost.
We ended the quarter at 17, 4% adjusted EBITDA margin.
From approximately 8% in the prior year.
While we are very pleased with the positive EBITDA results.
We don't expect this level of outperformance to continue throughout the year.
As always encourage you to evaluate next tracker on an annual basis.
We remained focused on sustainable year over year growth and have increased our annual guidance and I'll speak to in a couple of slides.
Adjusted free cash flow was $225 million for the quarter.
Driven by networking capital management decreased customer deposits, resulting from strong bookings and elevated adjusted EBITDA.
Net working capital as of June 30 was less than 10% of annualized revenue, which was favorable to our guided 10% to 15% levels.
We do expect to fund our networking capital as well as continuing to ramp U S manufacturing over the next two quarters to support our planned growth.
Which may temporarily pressure free cash flow.
Turning to slide eight for an update on our balance sheet and liquidity.
We believe that our capital structure, including a strong balance sheet and ample liquidity.
A key competitive advantage.
The quarter with cash of $355 million, which exceeds our total debt by over $200 million.
Total liquidity as of June 30 was $855 million.
Comprised of our Undrawn $500 million revolver, and our current cash balance.
We continue to operate with a debt to adjusted EBITDA of less than one with no significant debt maturities until fiscal 2028.
As Dan outlined we closed on a secondary offering that resulted in an increase in public float for the next tracker common stock.
Following the transaction pre IPO owners now own approximately 66% of next tracker comprised.
Approximately 52% flex and 14% TPG.
It is important to note that all proceeds from the secondary offering that closed in the first week of July so our fiscal Q2.
Were distributed to the pre IPO owners.
Please turn to the next slide our updated fiscal 2020 for guidance.
Driven by our strong Q1 result in addition to higher expected volume in the second half.
We have increased our fiscal 2020 for full year guidance.
The factors supporting our assumption setting guidance are largely unchanged from last quarter.
We will continue to invest in the business, including ramping production.
Other innovation around product development.
And building out the team to take advantage of the opportunity ahead of us.
Based on the current ownership structure adjusted for the follow on transaction.
We continue to expect our adjusted tax rate to range between 15, and 20% of adjusted pre tax income.
We have again not factored in additional profitability, resulting from the in place and reduction Act.
Our full year revised fiscal 2024 guidance is as follows.
We are increasing revenue guidance by approximately 5% or 100 million to a range of $2 2 billion to $2 4 billion.
At the midpoint, we're expecting 21% year over year growth.
We are also increasing our EBITDA guidance by over 10%.
$30 million to $315 million at the midpoint of $290 million to $340 million due to strong execution that include maintaining pricing discipline and prioritizing higher margin business.
At the midpoint, we expect fiscal 'twenty for adjusted EBITDA to grow approximately 50% year over year.
GAAP EPS is expected to be between $1 20 to $1 40 per share and includes approximately 25.
Related to stock based compensation and intangible amortization.
Adjusted EPS is now expected to be between $1 45 to $1 65 per share.
Based upon 147 5 million weighted average shares outstanding.
Our Q2 fiscal 2024 outlook is asphalt.
Revenue is expected to grow 15% to 20% versus Q2 fiscal 2023.
Adjusted EBITDA margin is expected to be between 13 and 14%.
Approximately 400 to 500 basis points.
To the same period last year.
The EBITDA guidance reflects the normal quarterly volatility of the business. So as always we direct you to evaluate our progress on an annual basis.
I will now turn the call back to Dan for some.
Concluding remarks.
Thank you Dave the macro for solar is strong in the U S and abroad, and we continue to see accelerated investment into renewables.
Solar has achieved its position as the number one source of new power generation through technology and cost reduction.
We believe these trends will continue which will result in significant long term industry growth and then next tracker is ideally positioned to leverage this opportunity.
Regarding X trackers performance none of these results would have been possible without the confidence of our customers.
We endeavor to earn every day and the hard work and dedication of the next tracker team for which we're extremely appreciative.
We now look forward to your questions.
Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press the star followed by the one on your telephone keypad.
From acknowledging request.
<unk> received should you wish to cancel their request.
Press the Star followed later too.
One moment. Please for your first question.
And your first question comes from the line of Julien Dumoulin Smith from Bank of America. Please go ahead.
Hey, guys, it's actually Alex <unk> on for Julian Congrats on the strong results yet again.
Just wanted to kick off with maybe some of the dynamics on the geographies here, obviously U S relatively flat flagging some headwinds there I'm just curious on the permitting piece specifically if you can sort of expand on your exposures. How you are positioning around that.
Then relative to sort of not only domestic content, but also transferability guidance. How are you seeing sort of a headwind or even a catalyst in the back half for developers just sort of move forward and put a date on projects.
And then sorry.
Firmly ordered with you guys.
Alex and sugar. Thank you for your question I'll take the first part Howard will take the second part.
So with respect to <unk>.
Permitting first or.
Increased guidance reflects the.
Environment that we're operating in our expectations.
Any individual project can be pushed there is an enormous portfolio of projects that were supporting.
So we take those fat.
Factors into account.
We are.
Entitlements are either granted or we consider upcoming projects on a probabilistic basis based on the levels of entitlements.
They stand.
An advantage for us in managing.
So many projects in so many geographies is that is one.
One project has slowed down because you have another one or two takes place so that would be my answer to that and Howard if you could address the second part of the question sure.
Sure.
Hey, Alex so.
We just wanted to you said something about headwind headwinds I mean, we hit the high end of our guide.
We believe.
We're still planning for the same mix.
In international on an annual basis, and as Dan mentioned quarter to quarter things may fluctuate. So that's why we keep reorienting.
Everyone to our annual performance.
Said.
Things are going extremely well, we had a really strong bookings quarter, including in the U S.
As far as tax equity and transferability.
We're not seeing.
Over.
Constraints, there right now in tax equity.
We do believe that there is upside with the transferability.
Clarification.
And so we appreciate the question.
Next question please.
Okay.
Okay.
Feel free for phone modality. Thank you did you have a buy on yeah. Just just a brief follow up just on the pricing piece you guys mentioned disciplined pricing a couple of times, obviously, some benefits maybe on the supply chain side rolling off to Dave's comment just curious if you could expand on that a little bit really briefly.
Okay.
Well, we don't.
Sure Asps.
What I will say is.
There is a flight to quality.
Our customers really want to ensure that their projects are supported.
Design.
On execution.
On commissioning.
With the highest performance.
Tractors.
With a company that has solid.
Financial stability Gabe covered our liquidity position.
And ability to service them with the team.
That really understands the business that's been in your shoes.
<unk>.
Given the as Howard mentioned, how the.
Very significant.
Improvement in economics in the projects in the U S.
Many of which had been anticipated to have a 10% investment tax credit now have a 30% investment tax credit.
Customers are really focused on delivery and so we don't chase.
<unk> with price.
Really tried to do is deliver.
To deliver value.
Liver operational excellence.
And really do everything we need to do to ensure our customers are successful in their projects.
That's where we're focused.
Thank you next question is a question.
And your next question comes from the line of Mark Jones from Jpmorgan. Please go ahead.
Yes. Good afternoon. Thank you very much for taking our questions.
Good to see the supply chain and continue to build out here.
Curious as you're signing these new contracts.
These new partnerships.
How you are baking in kind of <unk>.
Flexibility into those contracts with the.
The higher rate treasury guidance still kind of unknown.
Are those contracts fixed or is there some kind of flexibility that you are baking in there and then is there any kind of goalpost that you can point us to as far as the.
An upside or downside and kind of what the.
Percentage split of the kind of the 45 ex credit that you might be able to keep.
I'll address the last question first Mark Thank you for that.
No we're not speaking to that at this time a potential split of the 45 X credits with respect to how we are dealing with flexibility.
I want to pull back a little and just speak to.
The relationships, we have with a number of our key subcontractors and suppliers.
Last quarter, one of the public factory openings that we had was with MSS.
It was in Memphis.
We were able to bring life terminal facility that had just been used for warehousing.
Hadn't been used for manufacturing in many decades and this is a supplier.
I had a long relationship with.
On multiple continents.
And.
We.
I've.
<unk> been able to work productively with these suppliers and a variety of market.
I understand the industry and have worked well with us and so the and.
Liable performers and we've continued to work with some new.
It helped to cultivate some new participants in the industry, which is really exciting. So we think we've.
Our supply chain.
Yes.
Very robust it's a differentiated.
Advantage for the company as we noted we have over 10 facilities across the U S with over 25 gigawatts of contracted capacity.
And next month, we're planning another major factory announcement.
So we're continuing to build.
But we're really a strong relationship company and Thats served us well historically, when we think about the future.
Mark do you have a following question please.
Yes. Please.
I think a real simple follow up question here just wanted to make sure I'm thinking about the <unk>.
The greater than $3 billion backlog correctly.
Does that include or exclude VCA, but I just want to make sure I'm comparing it to the appropriate metrics from last quarter.
It includes vca's.
Okay. Thank you Howard Thank you very much.
One thing I'd like to add.
As.
Same store volume commitment agreement.
It's not an LOI signed a letter of interest.
But term sheet, it's a binding agreement backed by deposits and collateral with.
Finding liquidated damages on both sides with specific projects and project sizes.
Pricing.
So you can think of it as an EPC agreement, but multiple EPC agreements wrapped into one agreement.
The question Mark.
Thank you and our next question comes from the line of Chris.
Christian Christine Cho from Barclays. Please go ahead.
Hi, Good evening. Thank you for taking my question. So maybe if I could start on the backlog previously you guys have talked about it being a two third one third split for U S and rest of World and I understand you don't want to give specifics for the backlog on a quarterly basis, but.
As we think about the bookings that you did.
In the fiscal first quarter would it be fair to say that split.
Still valid for the bookings you did and if you could provide any qualitative comments on how vcs are also attempting.
Sure. This is Howard.
So.
That's correct, we're going to be providing annually.
More deep.
Detail on our backlog, but we are giving a lot of insights quarterly.
And.
For example, we know we're above $3 billion.
In backlog this quarter. We also note on slide five.
We have over 10 gigawatts more than 10 Gigawatts.
Upside executed contracts in the quarter.
The geographies associated with those so we're actually giving a fair amount of information that should give you a lot of directional guidance as far as the mix goes.
There are.
BCA agreements and an EPC agreements contained as I answered to previous question.
It's consistent with our historical mix that we discussed on the last call and both Ccas and Epc's.
Agreements contributed to the growth of our backlog in the quarter.
I appreciate the question do you have a follow on.
Okay, just thinking about the 10 gigawatts of signed executed contract from corner as we think about bookings for the quarter would you be able to.
Qualitatively talk about how ESP for Barclays have trended just as steel prices have come down.
Well pricing actually can vary.
Geography by geography, even project a project because of <unk>.
Terrain in size and so forth, but on a macro scale pricing is stable.
Thank you. Thank you.
Thank you once again should you have a question. Please press the star followed by the one on your telephone keypad.
And your next question comes from the line of Vikram <unk> from Seb. Please go ahead.
Good afternoon, everyone.
It looks like revenues in the remainder of the year are levered to U S with more than 80% of the revenues it.
It looks like in mixed up with the scope will be coming from US I was wondering if you can talk about the magnitude of delays you saw in front of me being in related to panels and the size of our daughters. You made just wanted to understand the confidence in the U S orders converting this year.
Yes. Thank you for the question.
Typically it's just.
Business as usual, but then there'll be a few jobs that have an issue.
Whether it's a permanent issue or a panel this year or something.
We're confident in our forecast and which is why we increased our guidance.
10% I'm, sorry, 5% of revenue is covered by bye.
Bye.
Dave.
10% on earnings.
Not seeing delays in orders.
We're seeing.
Projects proceeding, but then.
There will be occasional projects that have been.
Every project requires a local jurisdiction to issue a building permit.
Just like if you're adding a bathroom in your house or something you need a permit for that and so some local jurisdictions.
There's there's delays and what was originally anticipated by the project.
But in aggregate.
The overall demand, we're seeing strong demand.
And strong.
Fulfillment.
With occasional delays, but in aggregate, we're able to grow and increase our guidance.
Thank you did you have a follow up question.
Yes, I do.
I wanted to ask the question on how much of the 45 ex credit.
Be retained by by you and your peers I was wondering if you can talk about the pricing competition youre seeing in the market you mentioned, you're not using pricing.
Or are you balancing growth versus sort of competing with <unk>.
<unk> on pricing from what we understand and what we have seen the pricing competition remains stiff I'm. Just wondering like are you seeing that in the market as well and does that indicate.
A lot of the 45 tax credit may get competed away.
The competitive environment.
Alright. Thank you for the question no. We don't really see that 45 axis has a factor in how we think about pricing or our dollar with customers.
It would be a general answer to that.
We're really focused on.
Supporting the.
Really tier one customers and that doesn't necessarily mean, they have to be the.
Biggest customers, but we're really focused on supporting customers that have quality projects quality operations.
That have reliable performance in terms of developing their projects that need reliable and Conversely, if they want to work with X tracker, because we're going to be there for them and so really what we're focused on Howard mentioned.
Some of the volume commitment agreements we have executed.
Several.
So this quarter for example.
In the Memphis facility that Silicon Ranch Corporation executed second volume commitment agreement, which doubled.
From the original one we had last year, we had an agreed.
That was one five gigawatts and came back with a three gigawatt.
<unk> commitment agreement.
With the with financial Securities as Howard mentioned, but they are really focused on is eight.
Hey.
We want reliable supply with high performing trackers.
U S content.
Regionalized design support and things like that that's what that's what.
Our.
Valued customers are really looking for and we're set up to do.
With that thank.
Thank you for your question next question. Please.
Thank you and your next question comes from the line of Philip Shen from Roth MTM. Please go ahead.
Hey, guys. Congrats on the strong execution first question is on margins you had a really strong quarter here.
Can you give us a little more color on how you were able to drive those strong margins I think you talked about Howard.
Actually Dan price discipline monetization features and Theres something else.
But could you give us a little more detail and specifically.
How much is software contributing to both revenue and gross profit online and then to what degree did.
45 X support this quarter.
And looking ahead I know, Dave you talked about you can look at the whole quarter or is it just this quarter and extrapolate you have to look at the whole year.
But is it fair to say that we're at a new level of margins.
For the next quarter, and so forth or do we go back down to 18%.
Hi, Phil Thanks for the question and multiple part question. Let me I took some notes and I'll make sure I capture while youre looking for from.
From the last part I think the answer is yes, our reset guidance.
<unk> contemplate a higher margin.
As I spoke to in the opening remarks, our execution outside of that is from start to finish quoting to execution of the product.
We had upside that included.
Logistics costs that were lower than expected that did benefit profitability that we would not expect to continue with the same level.
On top of that there are other elements that we're executing and we have baked into our reset on the guidance.
Let's look at fiscal two for fiscal 'twenty, four or 23, sorry that was at a 14% EBITDA.
We just closed the current quarter at 17, 4% EBITA and looking at our current backlog.
That's what drove.
Up the <unk>.
Date of our guidance and the increasing of revenue by 5% and EBITDA by 10%.
And to answer specifically, if you look at the high end of the guidance.
Midpoint of the revenue.
As an EBITDA of approximately 15% so yes, we have.
Banked and additional profit element into our forward look.
You asked about software.
One of the elements, we messaged last quarter and continued to message now is that channel availability had impacted our software revenue recognition were actually below our guided 1% to 2% of revenue for the corner, we expect that to be back up throughout the day.
The year, so we do expect to land at 1% to 2%.
And Phil with respect to 40 <unk>, none of the 45 zero 45 X benefit baked in the results we just printed.
That's all.
Upside and we're confident that will come when treasury issues, it's definitive guidance put until they do we're not baking it in.
Great. Thanks, guys.
Shifting over to.
Yeah.
Let's see here.
Yeah.
The overall market size, what do you think the U S market.
From a total booking standpoint could be in 2023 and 2024.
Just trying to figure out what your market share might be and woodmac came out with some numbers and showed you and ray kind of neck and neck.
But wanted to see how fast you think the market is growing versus how fast.
It might be growing as well thanks.
Yes, thanks, Phil just to clarify.
We saw the Woodmac report and also a.
<unk> actually published yesterday, they both had similar numbers.
With next tracker for the eighth year in a row as the number one global share by a significant margin.
And number one in the U S by a lesser margin.
We believe but we're not focused on market share we're focused on.
Innovation.
Adding value to customers.
Monetizing value where appropriate.
For the company. So we can keep reinvesting in new tech to advance solar and so forth.
The U S market has as Howard mentioned unprecedented.
Stimulus with this 30% ITC.
Okay tablet.
And we are seeing panels.
Debottleneck Debottleneck I mean, that's been that's been the governor the principal governor.
The U S market we're.
We're seeing domestic suppliers significantly increase there.
They're they're they're shipments and our outlook for solar recently as the largest U S company for solar.
Largest supplier of panels.
Has.
Increased their capacity increase their production and has new plants coming online in the U S near term and other U S. Some larger contingent.
You've seen.
Several tier one.
Asian manufacturers that are manufacturing from southeast Asia predominantly with their supply chain.
Having less constraints from the customer and border protection.
So.
In terms of how big the market can be.
Well as I said in the past one of the things I've consistently underestimated my whole career in solar is how fast the market could grow.
And we are now positioned with Nextera, but one of the reasons, we went to 25 gigawatts.
Capacity over 25 Gigawatts it.
Executed con.
Contracted capacity.
Sure.
Which is a really big number.
One of the reasons, we went big as to be able to to be able to handle some incremental upside. So I think the answer the question really comes to how fast some of these panel manufacturer scale in the U S. How fast turn feeds.
These supply chains are coming from southeast Asia, and India and other sectors.
Scaling so we're very optimistic.
And which is one of the but based on concrete bottom up data, which is one of the reasons. We've increased our plans for this year. Thanks for your question next question. Please.
Thank you and your next question comes from the line of Jordan Levy from <unk> Securities. Please go ahead.
Afternoon on this call.
<unk>.
Just wanted to see if we could shift over to the international side of the business briefly just wanted to see if you could talk about how the pipeline and some of your key markets outside the U S are performing versus expectations and any particular positive or negative momentum in any of your major international markets.
It was last quarter.
This is Howard I'll respond to that.
As we noted we had a.
Really strong quarter internationally in terms of our P&L and deliveries and then on the demand side.
Overall.
It's a great picture and one of the benefits of being.
In multiple continents.
Our leading share of <unk>.
Comments.
Is that if an area of our country.
Another.
Country can flow.
And so we're seeing a lot of.
Of great activity in certain parts of the world like Australia and Europe .
Brazil.
As is.
<unk>.
A little bit.
Dynamic because of the wholesale price per power, but theyre very committed large customers to that market. So we continue to see developments going through in Brazil, but is something too that we're watching closely but overall the picture is really strong for the company and we're growing.
At a good clip and feel like we feel very confident with R.
Our mix for the year.
Going forward for the international business.
Thank you for the question do you have a quick follow up.
Yeah, a quick follow up just on steel prices, we've seen it move up a little bit over the last three months. It doesn't seem like it's impacted your results or ability to grow the backlog, but just wanted to see if we could get a quick refresher on until you really look at that impact of higher steel prices and if that's changed at all over the last several years.
Alright.
Jordan.
This is Dan speaking.
The answer is not really.
We take a bit of a longer term view.
And have structured.
Very strong relationships.
With.
Most of the larger mills.
In the U S and some of the larger mills abroad.
Think about the <unk>.
Relationship between our narrowing our demand our fabrication capability and our supply of altogether that really came to light in our Memphis.
Operations.
We had this public opening in May we had.
It's a beautiful thing because we had.
Starting with the customer, which is where we're really focused with silicon ranch.
Double down with next tracker triple down relate they went from our prior one five gigawatt.
PCA to three gigawatt.
And a lot of their demand is regionalize, let's just say around the tenancy value.
There are many states, but let's just say that that's an epicenter. What we opened we opened up of tracker factory in Memphis right in the middle of the third NAND Center.
One of the other and then on the steel side, bringing home.
One of the other speakers.
David Burritt CEO of U S steel, which has had a fantastic mill.
While the Big River steel facility.
Privilege of being there it's right across the Mississippi River in Arkansas, It's one of the.
Highest performing mills.
From a.
From a cleanliness standpoint about.
The lowest <unk> producing mill in the world, but certainly amongst them.
And it's.
A very short distance from that mill to this particular tracker facility.
So that particular mill Ken.
Belts and code.
Deal.
Coil that then we can process and our partner MSS to processing facilities now that particular place not limited to that mill nor nor.
Nor is that mill limited to delivering two next trackers partner MSS because as we mentioned we have over 10 facilities under contract, but we really like this model.
Perry.
<unk> demand.
Fabrications.
Okay.
City and supply altogether.
In our system.
Regionally optimize.
To minimize cost.
Minimized.
Two with transport.
And to shorten the lead time as much as possible for customers. So that we can reduce cost of logistics and be a reliable supplier.
Thanks, a lot. Your next question please.
Thank you and your next question comes from the line of Donovan Schaeffer from Northland Capital markets. Please go ahead.
Hey, guys. Thanks for taking the questions. So the first question I wanted to ask.
So I know at least as far as like.
Corporate practice with public facing sort of disclosures you don't give revenue mix based on product types, but I would like just from a qualitative standpoint, or maybe you are willing to share some kind of a number.
The idea here.
I'd like to get at is something like like a revenue mix from the different products and value offerings that you bring to the table or even something where it's like.
Take for instance, the train following tracker.
No.
One like I say, a one gigawatt deployment you may actually on the user trend following pizza.
Designed for some small fraction of that so if we've talked about it as strictly Gee whats the revenue mix it could be like a tiny fraction.
But what I wanted to like something to help us kind of understand when our customers pulling the trigger on these things.
As a way to indicate a validated sort of externally by a customer behavior.
And to what extent they value these offerings that could even be something like.
10% of your new bookings.
Are enabled by the availability of a training following solution.
Or.
X number.
Come with the the true capture.
Or.
Something to do with the two P. The Gemini solution if that ends up getting used on a certain maybe you win a side because you can use the two P for certain portions of it.
Anything like that so just if you could provide any updates or clarification.
Ideally quantification, but anything that shows the degree of customers taking action on that breadth of offering.
I appreciate the question.
<unk>.
And we appreciate the request more than anything.
Say, a few words and then we'll consider it for next quarter.
But but we on the last call we talked about how true capture has been deployed on over a 190 projects at how X T. Our train extreme train following has been deployed over 65 projects.
Last quarter so so.
We these are commercial products, we are monetizing them.
We're improving on them.
Dan alluded to new product releases.
In his prepared remarks upcoming at the largest trade show in the U S called <unk>, plus which is in Las Vegas This year the week of and.
Second week of September .
And so we're very cognizant of of investors and those who follow us to want to continue.
To understand our products and how they're monetize so we will.
We will take your request seriously. Thanks for the question yes.
Yes.
If I follow and just.
Sure.
Oh, yes, so quick follow up is just on.
Outside the usual culprits of exciting international geographies, there any that stand out I think Brazil, Australia, we all kind of know to pay attention to that.
I think India has a lot of potential but that can be a challenging market to operate in domestically for various reasons. So anything like maybe what's most promising in Africa or somewhere in the middle east or if you've seen any traction in India or anything like that just what would be the atypical markets, but that.
It could be.
Under the radar.
Yeah. So so.
This is these are select a subset of wins during the quarter on slide five we have pins place on a global map.
Correspond to where these 10 over 10 gigawatts of wins.
<unk> user by wins, we mean contracts.
And.
And so.
And the approximate geographies you can see yes Africa.
India, Yes.
Parts of Asia, and the Middle East Yes.
Not just Spain in Europe other parts of Europe , Yes, Latin America, Brazil, not the only place in Latin America, just in the quarter, even in North America.
There is a pit that's up about the United States and Canada. So there are a number of markets, where we're present in.
And that our promising markets either growing with upside for the company or more mature markets, which have the whole pie growing rapidly likelihood states. Thanks, very much we need to move on to our last question.
We have one more question.
No further questions.
Yes, there are no further questions.
Yeah.
Yes, Hey, denture here. Thank you all very much for the questions.
I appreciate the comments.
In totality.
The market dynamics.
<unk> dynamics are really strong due to fundamentals.
Cost reduction of solar.
Better performance out of panels and burgers.
Trackers.
Next trackers.
Patented.
Proven true capture technology.
And this is improving.
The market because solar and most grids around the world is lowest cost way to generate power.
You very much and.
Yeah.
Thank you for dialing into our Investor call.
Thank you, ladies and gentlemen that does conclude your conference for today. Thank you all for participating you may all disconnect.
Ladies and gentlemen that does conclude your conference.