Q3 2024 Nextracker Inc Earnings Call

Unknown Executive: Good afternoon, everyone, and thank you for standing by. My name is Sierra, and I will be your moderator today.

Good afternoon, everyone and thank you for standing by mine.

My name is Sierra and I will be your moderator today.

Unknown Executive: Today's call is being recorded. I'd like to welcome everyone to Nextracker's third quarter fiscal year 2024 earnings conference call. (Inaudible) At this time, for opening remarks, I would like to pass the call over to Mary Lai, Vice President of Investor Relations. Mary, you may begin.

Call is being recorded.

I'd like to welcome everyone to Nick's trackers third quarter fiscal year 2024 earnings conference call.

After the Speakers' remarks, there will be a Q&A session.

At this time for opening remarks, I would like to pass the call over to Mary Lai, Vice President of Investor Relations.

Gerry you may begin.

Mary Lai: Thank you and good afternoon, everyone. Welcome to Nextracker's third quarter fiscal year 2024 earnings. I'm Mary Lai, Vice President of Investor Relations. I'm joined by Dan Sugar, our CEO and founder, Howard Wenger, our president, and Dave Bennett, our CFO.

Thank you and good afternoon, everyone. Welcome to next truckers third quarter fiscal year 2024 earnings call.

I'm Mary Lai, Vice President of Investor Relations.

Joining by Dan Sugar, our CEO and founder Howard Wenger, our President and Dave Bennett our CFO.

Mary Lai: Following our prepared remarks, we will transition to a Q&A. As a reminder, a replay of this call will be posted on the IR website, along with our slides and presentation. Today's call contains statements regarding our business, financial performance, and operations, including the impact of our business and industry that may be considered forward-looking statements, and such statements involve risks and uncertainties that may cause actual results to differ materially from our expectations. Those statements are based on current beliefs, assumptions, and expectations and speak only as of the current date.

Following our prepared remarks, we will transition to our Q&A session.

As a reminder, there will be a replay of this call posted on the IR website, along with our slides and press release.

Today's call contains statements regarding our business financial performance and operations, including the impact of our business and industry that may be considered forward looking statements and such statements involve risks and uncertainties that may cause actual results to differ materially from our expectations.

Those statements are based on current beliefs assumptions and expectations and speak only as of the current date for more information on those risks and uncertainties. Please review our earnings press release slides and our SEC filings, including our most recent filed Form 10-Q, which are available on our IR website.

Mary Lai: For more information on those risk uncertainties, please review our earnings press release slides and our SEC filings, including our most recent Form 10-Q, which are available on our IR website at investors.nextracker.com. This information is subject to change, and we undertake no obligation to update any forward-looking statements as a result of new information, future events, or changes in our expectations. The full non-GAAP-to-GAAP reconciliation can be found in the appendix to the press release slides of today's presentation, as well as in the financial section of our IR website. Now, I will turn the call over to our CEO and founder, Dan. Thank you, Mary.

At investors Dot next tracker dot com.

This information is subject to change and we undertake no obligation to update any forward looking statements as a result of new information future events or changes in our expectations. Please note, we will provide GAAP and non-GAAP measures on today's call.

The full non-GAAP to GAAP reconciliation can be found in the appendix two of the press release slide of today's presentation as well as the financial section of our website.

And now I will turn the call over to our CEO and founder Dan.

Thank you Mary good afternoon, everyone and welcome to our third quarter fiscal year 2024 earnings call. We start this call by noting how thrilled we are to be a fully independent public company. After a successful separation from flex in early January.

Daniel S. Shugar: Good afternoon, everyone, and welcome to our third quarter fiscal year 2024 earnings call. We will start this call by noting how thrilled we are to be a fully independent public company after a successful separation from Flex in early January. We are appreciative of our time with FLEX, an eight-year partnership that exceeded its goals related to our growth and global expansion, and we sincerely thank the six outgoing board members, all FLEX executives, for their service.

We are appreciative of our time with flex and eight your combination that exceeded its goals related to our growth and global expansion and we sincerely. Thank the six outgoing board members all flex executives for their service. We're also excited to welcome Julie Blunden and Howard Wenger to our board further shrink.

Daniel S. Shugar: We're also excited to welcome Julie Blunden and Howard Wenger to our board, further strengthening our directors' deep domain and expertise in solar storage and public companies. Now, let's focus on Q3 results. This was another strong quarter and our fourth consecutive quarter of double-digit growth resulting in record revenue, profits, and backlog. Q3 demonstrated ongoing momentum for Nextracker in the solar industry. Our revenue grew 38% year over year to exceed $700 million, and our adjusted EBITDA accelerated to $168 million.

Turning our directors deep domain expertise in solar storage and public companies.

Let's focus on Q3 results.

This was another strong quarter and our fourth consecutive quarter of double digit growth, resulting in record revenue profit and backlog.

Q3 demonstrated ongoing momentum for next tracker in the solar industry, our revenue grew 38% year over year to exceed $700 million.

And our adjusted EBITDA accelerated to $168 million, it's noteworthy that we've doubled our adjusted EBITDA in the last 12 months.

Daniel S. Shugar: It's noteworthy that we've doubled our adjusted EBITDA in the last 12 months. The significant top line and profit expansion was the result of our solid execution, further optimization of our re-architected supply chain, and continued rigor in pricing development. Our reported $168 million of adjusted Avidot does not include the anticipated 45x tax benefits, which are expected to further increase earnings.

The significant top line and profit expansion was the result of our solid execution further optimization of our re architected supply chain and continued rigor and pricing discipline.

Our reported $168 million of adjusted EBITDA does not include the anticipated forty-five ex tax benefits, which are expected to further increase earnings Q.

Daniel S. Shugar: Q3's performance was driven by exceptionally high deliveries in our U.S. business, growing 70% year-over-year. We also highlighted our international expansion progress by celebrating the 10 gigawatt milestone we reached in the Middle East, India, and Africa. We have a long-term and proven track record in these regions, where in some cases, we have the advantage of being the first market mover. Our differentiated product reliability in extreme weather and ability to deliver large volumes are well understood by customers.

Q3's performance was driven by exceptionally high deliveries and our U S business growing 70% year over year. We also highlight our international expansion progress by celebrating the 10 gigawatt milestone we reached in the Middle East, India and Africa.

We have long term and proven track record in these regions where in some cases, we have the advantage of first market mover.

Our differentiated product reliability, and extreme weather and ability to deliver large volumes scale are well understood by customers.

Daniel S. Shugar: Recently, we've booked significant orders and have tracker fleets operating in India, Saudi Arabia, the United Arab Emirates, and Africa. To serve our growing demand, we keep expanding our global supplier footprint. In total, we now have over 70 major supply chain partners across five continents. Our new contracted bookings continue at a healthy pace, both domestically and overseas. This results in a new record backlog, significantly exceeding $3 billion.

<unk>, we've booked significant orders and have tracker fleets operating in India, Saudi Arabia, United Arab Emirates in Africa.

To serve our growing demand, we keep expanding our global supplier footprint in total we now have over 70 major supply chain partners across five continents.

Our new contract bookings continue at a healthy pace, both domestically and overseas.

This resulted in a new record backlog significantly exceeding $3 billion.

Daniel S. Shugar: With this strong demand and record backlog year to date, we are increasing guidance. We're raising the midpoint of our previous annual revenue and profit guidance by approximately $100 million and $73 million, respectively. For the full fiscal year, our new revenue target is $2.45 billion, and our new EBITDA target is $488 million at the midterm.

With this strong demand and record backlog year to date, we are increasing guidance.

We are raising the midpoint of our previous annual revenue and profit guidance by approximately $100 million and $73 million respectively.

For the full fiscal year, our new revenue target is 2.45 billion and our new EBITDA target is $488 million at the mid points.

This is the third consecutive quarter, we've raised our revenue and profit guidance.

Daniel S. Shugar: This is the third consecutive quarter we've raised our revenue and profit guidance. We achieved this growth by focusing on innovation, customers, execution, and our team, delivering over 90 gigawatts since inception. Based on our strong growth profile, supported by healthy profitability and ample liquidity, we've continued to increase our investments in R&D, with emphasis on technology that lowers the levelized cost of solar energy for our customers. The additional R&D investments we've made have accelerated the time to market for new products and allowed us to maintain market leadership. In Q3, we bolstered our overall patent portfolio, both organically and through strategic investments. We now have over 500 patents issued and pending at the end of the quarter. Last September, we launched our next generation technology suite with three innovations: Extreme Terrain Following Tracker XTR 1.5, HELPRO for NX Horizon, and Zonal Diffuse for TrueCAP.

We achieved this growth by focusing on innovation customers execution, and our team delivering over 90 gigawatts since inception.

Our strong growth profile supported by healthy profitability and ample liquidity, we've continued to increase our investments in R&D with emphasis on technology that lowers the level of life cost of solar energy for our customers.

The additional R&D investments, we've made have accelerated the time to market for new products and allows us to maintain market leadership.

In Q3, we bolstered our overall patent portfolio, both organically and through strategic investments. We now have over 500 patents issued and pending at the end of the quarter.

Last September.

We launched our next generation technology suite with three innovations.

Extreme terrain following tracker ex tier one five health pro firm Nx horizon, and zonal diffused for true capture all of these innovations are either operating in the field today are under contract to be delivered to customer projects later this year.

Daniel S. Shugar: All of these innovations are either operating in the field today or under contract to be delivered to customer projects later this year. We will now speak to the short and long-term dynamics in the market, starting with the United States.

We will now speak to the short and long term dynamics in the market starting with the United States as covered on our previous calls there are multiple headwinds in tailwind impacting solar development velocity headwinds, including interconnection backlog permitting delays in equipment shortages are real and can impact any specific <unk>.

Daniel S. Shugar: As covered in our previous calls, there are multiple headwinds and tailwinds impacting solar development philosophy. Headwinds, including interconnection backlogs, permitting delays, and equipment shortages, are real and can impact any specific project, EPC, or developer. But in totality, the combination of new entrants in both developers and EPCs and the increasing number of projects in their portfolios has allowed the market to continue expanding. Solar panel availability in the United States has improved significantly in recent quarters, and as things stand today, we are not seeing panel availability as a first-order problem in the market. There are, however, multiple trade proceedings pending that could impact panel imports from certain geographies into the US.

<unk> EPC or developer.

But in totality the combination of new entrants in both developers and EPC.

The increasing number of projects in their portfolios has allowed the market to continue expanding.

Solar panel availability in the United States has improved significantly over recent quarters and as things stand today, we are not seeing panel availability as a first order problems in the market.

There are however, multiple trade proceedings, pending which could impact panel imports from certain geographies into the U S.

Daniel S. Shugar: We will need to see how this evolves over time to determine any potential impact. According to the Solar Energy Industries Association, at the one-year anniversary of the Inflation Reduction Act, or IRA, 85 gigawatts of new U.S. solar module manufacturing capacity have been announced, which inspires confidence that panel availability will be systemically addressed in the coming year. Overseas, some of the headwinds noted above also apply, but they are typically less severe than in the U.S. And globally, falling solar panel pricing has enabled the economics of projects to continue improving and markets, in general, to continue expanding. Longer term, we believe it's insightful to consider both the accelerating need for new power in combination with retiring legacy power generation assets. Focusing on the US, power generation requirements grew modestly from 2007 through 2022 at about 1% annual increase. However, over the last few years, however, energy usage has increased dramatically, driven by growth in data centers, electrification of appliances and transportation, and reindustrialization across the US. At the same time, there has been a significant retirement of legacy power plants.

We will need to see how this evolves over time to determine any potential impact.

According to the solar Energy Industries Association at the one year anniversary of the inflation reduction act or I or a <unk>.

85, Gigawatts of New U S solar module manufacturing capacity had been announced which inspires confidence that Powell availability will be systemically addressed in the coming years.

Overseas some of the headwinds noted above also exist, but are typically less severe than the U S and.

And globally falling solar panel pricing has enabled the economics of projects to continue improving end markets in general to continue expanding.

Longer term, we believe it's insightful to consider both the accelerating need for new power in combination with retiring legacy power generation assets.

<unk> on the U S power generation requirements grew modestly from 2007 through 2022 at about 1% annual increase.

Over the last few years, however, energy usage has increased dramatically driven by growth in data centers electrification of appliances, and transportation and reindustrialization across United States.

At the same time, there has been a significant retirement of legacy power plants.

Daniel S. Shugar: The combination of these factors caused the U.S. Energy Information Administration to forecast a 5% annual increased need for new power generation capacity in the grid over the next five years. The result is that almost 300 gigawatts of new power plants are needed over the next five years, and about 500 gigawatts of new power is needed over the next decade. Where is this massive amount of new power going to come from? The US CIA, historically very conservative on renewables, is forecasting that solar and wind power will comprise the vast majority of new power generation. Solar is expected to have a 26% compound annual growth over the next five years and, within 10 years, be the number one source of electric generation in the United States, comprising almost a quarter of all electric energy. Naysayers point to the intermittency of renewable power as an impediment to its large-scale adoption in the grid.

The combination of these factors has caused the U S energy information administration forecast, a 5% annual increase needs for new power generation capacity in the grid over the next five years. The result is that almost 300 gigawatts of new power plants for <unk>.

Over the next five years and about 500 Gigawatts of new power is needed over the next decade.

There is this massive amount of new power going to come from.

The U S C. I, a historically very conservative on renewables is forecasting that solar and wind power.

<unk> the vast majority of new power generation solar is expected to have a 26% compound annual growth over the next five years and within 10 years be the number one source of electric generation in the United States, comprising almost a quarter of all electric energy.

Naysayers point to the Intermittency of renewable power as an impediment to its large scale adoption in the grid.

Daniel S. Shugar: We believe this issue will improve. Sharp decreases in battery costs have enabled steep ramping of battery storage power plants in the grid, both co-located with renewable power and stand-alone projects. Battery power has increased fivefold in the last two years to 15 gigawatts operating in the USA today. And batteries are expected to triple again to about 50 gigawatts by 2026. Many battery systems have four hours of storage today, which pairs well with a solar tracker plant, which together provide firm power through the evening peak.

We believe this issue will improve.

Sharp decreases in battery costs have enabled steep ramping of battery storage power plants and the grid both co located with renewable power and Standalone projects.

Battery power.

Increased five fold in the last two years to 15 Gigawatts operating in the USA today.

And batteries are expected to triple again to about 50 Gigawatts by 2026.

Many battery systems have four hours of storage today, which pairs well with the solar tracker plant, which together provide firm power through the evening peaks.

Howard J. Wenger: Nextracker is very well positioned to continue driving utility scale and distributed generation as the world transitions to renewable energy with solar leading the charge. We are the skeletal system for the solar power ecosystem, with over 2 million tracker systems shipped to more than 30 countries. We're the global market leader in trackers and a preferred partner for tier one owners, developers, and EPCs. And equally important, we appreciate our customers and their guidance on our products. We listen and respond to customer requirements with operational excellence and uncompromising quality. Now, I'll turn the call over to Howard Wenger, our president, to expand on our commercial progress and product innovation. Thank you, Dan.

Next tracker is very well positioned to continue driving utility scale and distributed generation as the world transitions to renewable energy with solar leading the charge were the skeletal system for the solar power ecosystem with over 2 million tracker systems shipped to more than 30 countries, where the global.

Market leader in trackers, and a preferred partner for tier one owners developers and EPC and equally important we appreciate our customers and their guidance on our products, we listen and respond to customer requirements with operational excellence and uncompromising quality.

Now I'll turn the call over to Howard Wenger, our president to expand on our commercial progress in product innovation.

Thank you Dan Q3 was another successful quarter delivering multiple proof points that our products are differentiated and our team continues to execute on fulfilling customer requirements.

Howard J. Wenger: Q3 was another successful quarter, delivering multiple proof points that our products are differentiated, and our team continues to execute on fulfilling customer requirements. It's been an amazing journey as we have scaled Nextracker's revenue to over $700 million this quarter. In just a short two-year span, we've more than doubled our quarterly revenue while increasing profitability.

It's been an amazing journey as we have scaled next trackers revenue to over $700 million this quarter.

And just a short two year span, we've more than doubled our quarterly revenue while increasing profitability.

Howard J. Wenger: Our proactive investments are paying off. We have invested in innovation, increasing our technological lead. We've implemented a regional strategy to further enable international expansion, and we have successfully deployed a strategic pivot to localize our U.S. supply chain, which is in full flight. The U.S. remains our largest surf market, representing 78% of total Q3 revenue.

Our proactive investments are paying off we have invested in innovation, increasing our technology lead.

We've implemented a regional strategy to further enable international expansion and we have successfully deployed a strategic pivot to localize our U S supply chain, which is in full flight.

The U S remains our largest served market representing 78% of total Q3 revenue.

Howard J. Wenger: This is a higher percentage than in previous reported quarters; however, we expect our revenue mix to continue to be approximately two-thirds U.S. and one-third international for the full fiscal year 24. We did have some delays on projects in the quarter, but this was more than offset by other projects pulling in ahead as our team continued to focus on customer needs and delivery requests. The international business performed as expected, with our MIA region leading the way with project deliveries in the Middle East, India, and Africa.

This is a higher percentage than in previous reported quarters. However, we expect our revenue mix to continue to be approximately two thirds of U S and one third international for the full fiscal year 'twenty four.

We did have some delays of projects in the quarter, but this was more than offset by other projects pulling in ahead.

As our team continued to focus on customer needs and delivery requests.

The international business performed as expected with our EMEA region, leading the way with project deliveries.

In Middle East, India and Africa.

Howard J. Wenger: We are very pleased with our global supply chain and project management teams as they continue to collaborate with customers worldwide. Establishing local supply has further optimized our offering and provided even more reliability, improving execution on multiple continents to achieve on-time delivery for our customers. Let me now provide some details on our new Q3 bookings. Overall, we are seeing continued strong demand. We had another excellent quarter for new business with a book to bill ratio greater than one. Our backlog increased quarter over quarter to a new record and remains significantly over $3 billion.

We are very pleased with our global supply chain and project management teams as they continue to collaborate with customers worldwide.

Establishing local supply has further optimize our offering and provides even more reliability improving execution on multiple continents to achieve on time delivery for our customers.

Let me now provide some details on our new Q3 bookings overall, we are seeing continued strong demand we had another excellent quarter for new business with a book to bill ratio greater than one.

Our backlog increased quarter over quarter to a new record and remained significantly over $3 billion.

In the U S Q3 bookings were diversely represented across the country, where we continue to win under a wide range of conditions and terrain we.

Howard J. Wenger: In the U.S., Q3 bookings were diversely represented across the country, where we continued to win under a wide range of conditions and terrains. We executed a healthy mix of new EPC contracts and Volume Commitment Agreements, or VCAs, in the quarter. We believe our continued sales strength reflects Nextracker's superiority across multiple dimensions that matter most to discerning customers. This includes product performance and capability, quality and reliability, service offering, track record, our team, and Execution and Customer Focus. This list of positive attributes earned over many years translates into what we believe is the most bankable product with the lowest levelized cost of energy for large-scale solar power.

We executed a healthy mix of new EPC contracts and volume commitment agreements or <unk> in the quarter.

We believe our continued sales strength reflects next tracker superiority across multiple dimensions that matter most to discerning customers.

This includes product performance and capability.

Quality and reliability service offering track record our team.

And execution and customer focus.

This catalog of positive attributes earned over many years translates into what we believe is the most bankable product with the lowest level <unk> cost of energy for large scale solar power.

We also now have a robust U S manufacturing capability that is enabling us to deliver domestic content our customers want.

As well as providing scalable capacity to allow for future growth.

As for the IRA and the impact of waiting for Treasury clarifications. The upshot is that we are not seeing a significant impact on U S project deliveries.

Howard J. Wenger: We also now have a robust US manufacturing capability that is enabling us to deliver domestic content our customers want. [inaudible] Customers and projects are transacting, and as we have outlined in previous earnings calls, we continue to see positive demand activities as our backlog continues to grow. Let's now turn to our international booking. In Q3, we signed customer contracts across several international regions, notably in India, Australia, Saudi Arabia, and Spain. We've also added new countries to our list, such as South Africa, New Zealand, and even Sweden, which is not considered a traditional solar market but reflects improving economics driven by recent solar technology developments, such as bifacial solar panels and Nextracker TrueCapture technology.

Or on new bookings cut.

Customers and projects are transacting and as we have outlined in previous earnings calls, we continue to see positive demand activities as our backlog continues to grow.

Let's now turn to our international bookings.

In Q3, we signed customer contracts across several international regions, notably in India, Australia, Saudi Arabia and Spain.

We've also added new countries to our list such as South Africa, New Zealand, and even Sweden, which is not considered a traditional solar market, but reflects improving economics driven by recent solar technology developments, such as bifacial solar panels and next tracker true capture technology.

Howard J. Wenger: As you've heard from Dan, we achieved a milestone of 10 gigawatts of operating and contracted systems in our MIA region, comprised of the Middle East, India, and Africa. Our deep relationships and already established track record of superior solar performance matter greatly to customers in these regions. As we deploy our regional strategy, we have more boots on the ground to scale, but more importantly, we lead with product quality and reliability, our world-class wind engineering and performance, coupled with our high quality and durable components, such as batteries, motors, and fasteners. While we believe it's early days in our global expansion, we've been fast movers and are the leading solar tracker platform in many countries. And we have increasing opportunities to further invest in and mobilize to address and grow in these significant markets.

As you've heard from Dan we achieved a milestone of 10 gigawatts of operating and contracted systems in our EMEA region comprised of Middle East, India and Africa.

Our deep relationships and already established track record of superior solar performance matter greatly the customers in these regions.

As we deploy our regional strategy, we have more boots on the ground to scale, but more importantly, we lead with product quality and reliability, our world class wind engineering and performance, coupled with our high quality and durable components, such as batteries motors and fasteners.

While we believe it's early days in our global expansion, we've been fast movers and are the leading solar tracker platform in many countries and we have increasing opportunities to further invest and mobilized to address and grow in these significant markets.

As Dan noted, we are constantly monitoring headwinds and tailwind for our business as we navigate the company forward.

Howard J. Wenger: As Dan noted, we are constantly monitoring headwinds and tailwinds for our business as we navigate the company forward. We continue to see, on balance, a net positive trend, and we are in a strong position going forward. We do want to acknowledge that some of our shipments are being rerouted due to the Red Sea and Suez Canal conflict, which does have an impact on some deliveries and costs and potentially revenue recognition.

We continue to see on balance a net positive trend.

And we are in a strong position going forward.

We do want to acknowledge that some of our shipments are being rerouted due to the red Sea and Suez Canal conflict, which does have an impact on some deliveries and costs and potentially revenue recognition.

Howard J. Wenger: We have factored this into our guidance, and while we don't see a material impact today, we are closely monitoring the situation, and we continue to make the adjustments needed to minimize the impact to our customers. [inaudible] Solar trackers are not commodity products but are highly engineered for site-specific conditions such as soils and foundation requirements, topography, wind speeds, panel type, and local permit needs, codes, and standards.

We have factored this into our guidance, while we don't see a material impact today, we are closely monitoring the situation and we continue to make the adjustments needed to minimize the impact to our customers.

I'd like to briefly discuss pricing.

Solar trackers are not commodity products, but are highly engineered for site specific conditions, such as soils and foundation requirements topography wind speeds panel type and local permit needs codes and standards as.

Howard J. Wenger: As such, costs and pricing are specific to each and every project and vary from site to site, region to region, and customer to customer. Also, I want to point out there is a significant lag time of multiple quarters between ASP, or average sales price at the time of booking, versus revenue per watt that is often used as a proxy for ASP. That said, on an aggregate basis worldwide for Q3, and for the majority of last year, our ASP has been relatively stable. Our margin strength is in part a result of our continued rigor in pricing discipline. But even more so, it's driven by a differentiated superior product and service offering and our ability to deliver what we believe offers the lowest LCOE and highest financial returns for our customers. We do not chase business.

As such costs and pricing are specific to each and every project and vary from site to site region to region and customer to customer.

Also I want to point out there's a significant lag time of multiple quarters between ASP or average sales price at the time of booking.

First is the revenue per watt that is often used as a proxy for asps.

That said on an aggregate basis worldwide for Q3 and for the majority of last year, our ASP has been relatively stable.

Our margin strength is in part a result of our continued rigor in pricing discipline.

But even more so it's driven by a differentiated superior product and service offering and our ability to deliver what we believe offers the lowest that'll Coa and highest financial returns for our customers.

We do not chase business.

Howard J. Wenger: And finally, let me wrap up with a quick update on our continued hardware and software innovation. We're having tremendous success with our NxHorizon tracker products, as well as increasing traction for both of our XTR and Hail Pro product lines. As we increase project installations of these products in a wider variety of terrains and weather conditions, we are expanding use cases for Nextracker. Q3 sales and installation of TrueCapture increased both sequentially and year over year. TrueCapture is our intelligent self-adjusting tracker software that integrates with our patented electronic controller to help maximize solar power production. It operates automatically with no user intervention.

And finally, let me wrap up with a quick update on our continued hardware and software innovation.

We're having tremendous success with our Nx horizon tracker products.

As well as increasing traction for both of our X T R and hail pro product lines.

As we increase project installations of these products in a wider variety of terrain and weather conditions. We are expanding use cases for next tracker.

Q3 sales and installation of true capture increased both sequentially and year over year.

True capture is our intelligence self adjusting tracker software that integrates with our patent in the electronic controller to help maximize solar power production.

It operates automatically with no user intervention.

True captures a differentiated software platform and enhances our overall offering.

We are seeing increasing adoption as our customers see the value add by boosting energy gains and enhancing their financial returns.

Howard J. Wenger: TrueCapture is a differentiated software platform that enhances our overall offering. We are seeing increasing adoption as our customers see the value add by boosting energy gains and enhancing their financial return. We will continue our R&D investments to accelerate innovation and time to market for new products. We recently announced new product innovations that leverage inherent features of our flagship NX Horizon Smart Solar Tracking System. We are making good progress in HALPRO, in HALPRO 75, XTR 1.5, and enhancements to TrueCapture, including Zonal Diffuse.

We will continue our R&D investments to accelerate innovation and time to market for new products.

We recently announced new product innovations that leverage inherent features of our flagship Nx horizon smart solar tracking system.

We are making good progress inhale pro and hail Pro 75.

Tier 1.5, and enhancements to chew capture including zonal defuse.

All of these innovations are either operating in the field today are scheduled to be delivered to customer projects later this year.

We will be reporting on our progress in the quarters ahead.

In summary.

Howard J. Wenger: All of these innovations are either operating in the field today or scheduled to be delivered to customer projects later this year. We'll be reporting on our progress in the quarters ahead. In summary, we are very proud of the team's execution and accomplishments in the quarter. We just celebrated our 10th anniversary, and we are energized and ready for more as the world transitions to renewable energy. Now, let me turn the call over to Dave Bennett, our Chief Financial Officer, to review the financials. Dave. Thank you, Howard. Before I start, I'd like to remind everyone that all references to financial metrics, except for revenue, are non-GAAP adjusted, and all growth rates are year-over-year unless otherwise stated. Please note our Q3 results exclude any benefit from the IRA 45x tax credits related to tracker components.

We are very proud of the team's execution and accomplishments in the quarter.

We just celebrated our 10 year anniversary and we are energized and ready for more as the world transitions to renewable energy.

Now, let me turn the call over to Dave Bennett, Our Chief Financial Officer to review financials.

Dave.

Thank you Howard before I start I'd like to remind everyone that all references to financial metrics, except for revenue or non-GAAP adjusted.

And all growth rates are year over year, unless otherwise stated. Please note. Our Q3 results exclude any benefit from the IRA forty-five ex tax credits related to tracker components.

Q3 was another record quarter.

Delivering double digit growth for both top and Bottomline.

And our fourth consecutive quarter of growth since the IPO.

Q3 revenue closed at a $710 million.

David P. Bennett: Q3 was another record quarter, delivering double-digit growth for both top and bottom lines and our fourth consecutive quarter of growth since the IPO. Q3 revenue closed at $710 million, up 38%, driven by a 70% increase in the U.S. market offset by a decline of 17% in the rest of the world. Q3 revenue mix was 78% and 22%, respectively. We saw a material uptick in U.S. revenue primarily due to strong execution from our teams in progressing projects on schedule. We expect the U.S. to land at the high end of our previously reported full-year revenue mix of 60 to 70 percent of total revenue. Adjusted EBITDA for Q3 was $168 million, an increase of 105 million, or 168% growth, establishing another new record for the company. Gross margins expanded in Q3 to 30% as a result of our strong execution and Favorable Mix both by project and region.

38% driven by a 70% increase in the U S market offset by a decline of 17% and the rest of the world.

Q3 revenue mix was 78% and 22% respectively.

We saw a material uptick to U S revenue, primarily due to strong execution from our teams and progressing projects to schedule.

We expect the U S to land at the high end of our previously reported full year revenue mix of 60% to 70% of total revenue.

Adjusted EBITDA for Q3 was $168 million.

An increase of $105 million or 168% growth.

Establishing another new record for the company.

Gross margins expanded in Q3 to 30% as a result of our strong execution.

And favorable mix, both by project and region.

As Howard and Dan both mentioned our teams continued to optimize our supply chain and drive pricing discipline.

As I just said Q3 also had a larger U S mix.

Which has somewhat higher pricing and margins versus the rest of the world.

David P. Bennett: As Howard and Dan both mentioned, our teams continued to optimize our supply chain and drive pricing discipline. As I just said, Q3 also had a larger U.S. mix, which has somewhat higher pricing and margins versus the rest of the world. Our Q3 EBITDA margin of 23.6% was up over 1,100 basis points from the prior year and marks the seventh consecutive quarter of sequential margin improvement. Despite Q3's outperformance, we continue to expect project gross margins to track in the mid-20s as we manage our business to optimize annual results. Adjusted Diluted Earnings Per Share was 96 cents in the quarter. As previously stated, the separation from Plex increased our public float by approximately 74 million shares but does not impact our diluted EPS. Adjusted free cash flow was $62 million for the quarter and $314 million for the first nine months of fiscal year 24.

Our Q3 EBITDA margin of 23, 6% was up over 1100 basis points from the prior year and marks the seventh consecutive quarter of sequential margin improvement. Despite Q3s outperformance. We continue to expect project gross margins to track in the mid Twenty's as.

We manage our business to optimize annual results.

Adjusted diluted earnings per share.

Was 96 cents in the quarter as previously stated the separation from flex increased our public float by approximately 74 million shares.

But does not impact our diluted EPS.

Adjusted free cash flow was $62 million for the quarter and $314 million for the first nine months of fiscal year 'twenty four driven by strong networking capital management cut.

Customer deposits and higher EBITDA.

Networking capital at the end of Q3 was approximately 13% of trailing 12 months revenue.

Which was within our expected 10% to 15% levels.

To support our planned growth in the next few quarters.

We expect to continue to fund our networking capital.

David P. Bennett: This was driven by strong networking capital management, Customer Deposits, and Higher EBITDA. Networking capital at the end of Q3 was approximately 13% of trailing 12 months revenue, which was within our expected 10 to 15% level. To support our planned growth in the next few quarters, we expect to continue to fund our networking capital, which may pressure free cash flow. However, our high quality balance sheet, cash flow generation, and ample liquidity remain competitive advantages. We closed the quarter with $368 million in total cash, which is greater than two times our total debt of less than $150 million. Total liquidity at the end of Q3 was nearly $800 million.

Which may pressure free cash flow.

Our high quality balance sheet cash flow generation and ample liquidity remain competitive advantages.

We closed the quarter with $368 million in total cash, which is greater than two times, our total debt of less than $150 million.

Total liquidity at the end of Q3 with nearly $800 million.

We continue to operate with a debt to EBITDA ratio of less than one with no significant debt maturities until fiscal 2028.

We have a resilient financial model with a growth mindset.

We will continue to make investments in our teams technology and infrastructure to grow create value and scale our business.

At the same time, we have the flexibility to explore M&A opportunities to accelerate our business with the mindset to create differentiated value for customers. In addition to increasing shareholder value.

Now transition to the IRA forty-five X benefit considerations for next tracker.

David P. Bennett: We continue to operate with a debt to EBITDA ratio of less than one, with no significant debt maturities until fiscal 2028. We have a resilient financial model with a growth mindset. We will continue to make investments in our teams, technology, and infrastructure to grow, create value, and scale our business. At the same time, we have the flexibility to explore M&A opportunities to accelerate our business with the mindset to create differentiated value for customers in addition to increasing shareholder value.

We have developed great relationships and arrangements with top vendors in the industry.

We have strong conviction that our torque tubes, and the bulk of our fasteners will qualify under 45 X.

Which will be meaningful to our financials in fiscal year 2025.

The key takeaway to understand is that our objective is to reduce the cost of materials to enabled domestically made products to be cost competitive with imports via the 45 ex tax credit vendor rebates.

Consistent with last quarter, we have not factored in any expected IRA forty-five ex profit projections and our updated fiscal 2020 for adjusted EBITDA and non-GAAP EPS guidance.

David P. Bennett: Let me now transition to the IRA 45x benefit considerations for Nextracker. We have developed great relationships and arrangements with top vendors in the industry. We have strong conviction that our torque tubes and the bulk of our fasteners will qualify under 45X, which will be meaningful to our financials in fiscal year 2025. The key takeaway to understand is that our objective is to reduce the cost of materials to enable domestically made products to be cost competitive with imports via the 45X tax credit vendor rebate. Consistent with last quarter, we have not factored in any expected IRA 45x profit projections in our updated fiscal 2024 adjusted EBITDA and non-GAAP EPS guidance. However, based on current arrangements with vendors and the 45x treasury rules, we believe that, based on current arrangements with vendors and the 45x treasury rules. We expect to realize a reduction in gap costs of sales in the range of $50 to $80 million in our fourth quarter, fiscal 24.

However, based on current arrangements with vendors and the 45 ex Treasury rules.

We expect to realize a reduction in GAAP cost of sales in the range of $50 million to $80 million in our fourth quarter fiscal 'twenty four.

This is our current projection and subject to change based on contract terms and tax filing timing by our vendors.

As previously messaged fiscal 'twenty four continues to be a transitional year as we work through respective contract terms.

And mechanics with our vendors.

We plan to include the impacts of the 45 X credits in our fiscal 2025, adjusted EBITDA and non-GAAP EPS guidance.

Now, let me speak briefly about the successful separation from flex.

As stated in the previously issued press release on January 2nd.

We announced the completion of flexes spinoff of all of its remaining interest in next tracker to the flex shareholders.

Flex no longer directly or indirectly hold any shares of next tracker common stock.

David P. Bennett: This is our current projection and subject to change based on contract terms and tax filing timing by our vendors. As previously communicated, Fiscal 24 continues to be a transitional year as we work through respective contract terms and mechanics with our vendors. We plan to include the impacts of the 45x credits in our fiscal 2025 adjusted EBITDA and non-GAAP EPS guidance. Now, let me speak briefly about the successful separation from FLEC. As stated in the previously issued press release on January 2, we announced the completion of Flex's spinoff of all of its remaining interest in Nextracker to the Flex shareholders. Flex no longer directly or indirectly holds any shares of Nextracker common stock.

We continue to maintain a transition services agreement with flex to properly transition certain non customer facing and back office functions, which we expect to be completed this year.

Turning to guidance.

Our revised full year fiscal 'twenty four guidance is as follows.

With strong results year to date, we have once again raised the midpoint of our full year revenue guidance by $100 million.

The new range is now 2425 to 2.4 dollars 75 billion.

At the midpoint, we're expecting 29% growth year over year.

We've also raised our adjusted EBITDA guidance range meaningfully by $73 million.

The updated range is now $475 million to $500 million.

David P. Bennett: We continue to maintain a transition services agreement with Flex to properly transition certain non-customer facing and back office functions, which we expect to be completed this year. Our revised full year fiscal 24 guidance is as follows. With strong results year to date, we have once again raised the midpoint of our full-year revenue guidance by $100 million. The new range is now 2.425 to 2.475 billion. At the midpoint, we are expecting 29% growth year over year. We've also meaningfully raised our adjusted EBITDA guidance range by $73 million.

At the midpoint, we're expecting over a 130% growth year over year.

And an implied EBITDA margin of approximately 20%.

Our business should be evaluated on an annual basis structurally we expect our gross margin to be sustainable in the mid twenties range.

Factoring in quarterly variations in regional project and customer mix.

GAAP EPS is expected to be between $2 53.

To $2 90 per share and includes approximately 30 related to stock based compensation and intangible amortization.

GAAP EPS also includes the benefit of approximately 28 to <unk> 45 per share.

David P. Bennett: The updated range is now 475 to 500 million. At the midpoint, we are expecting over 130% growth year over year and an implied EBITDA margin of approximately 20%. Our business should be evaluated on an annual basis. Structurally, we expect our gross margin to be sustainable in the mid-20s range, factoring in quarterly variations in regional projects and customer mix. Gap EPS is expected to be between $2.53 and $2.90 per share and includes approximately $0.30 related to stock-based compensation and intangible amortization. GAAP EPS also includes the benefit of approximately $0.28 to $0.45 per share related to the recognition of the expected IRA tax credit vendor rebate. Adjusted EPS is expected to be between $2.55 and $2.75 per share based on 148 million weighted average shares outstanding.

Related to the recognition of the expected irate tax credit vendor rebates.

Adjusted EPS is expected to be between $2 55 to $2 75 per share based on 148 million weighted average shares outstanding.

Net interest and other income are expected to be under $5 million due to benefits from FX and interest income offsetting interest expense.

We still expect the adjusted income tax rate to range between 15% to 20% for the full fiscal year.

As we head into fiscal 2025.

We do expect the tax rate to trend slightly higher as an independent company domiciled in the U S.

I will now turn the call back to Dan for concluding remarks.

Dan.

Thank you, Dave I am so proud of our team and what we've achieved our execution is backed by a strong history of innovation deep domain expertise.

Mobile supply chain and trusted relationships.

We're thrilled to begin this year as a fully independent company.

We will continue to make strategic investments expand our talented team and look to pursue additional market opportunities ahead.

Tracker is well positioned to grow and scale globally.

David P. Bennett: Net interest and other income is expected to be under $5 million due to benefits from FX and interest income offsetting interest expense. However, we still expect the adjusted income tax rate to range between 15% to 20% for the full fiscal year. As we head into fiscal 2025, we do expect the tax rate to trend slightly higher as an independent company domiciled in the U.S. I will now turn the call back to Dan for his concluding remarks. Thank you, Dave. I'm so proud of our team and what we've achieved.

Just getting started with.

We now look forward to your questions, Let me pass the call back to the operator.

Thank you.

If you'd like to ask a question. Please press star followed by one on your telephone keypad.

If you'd like to remove your question Pat Star followed by two.

And in the interest of time, please limit yourself to one question and one follow up to allow everyone to speak.

Our first question comes from Brian Lee with Goldman Sachs. Please proceed.

Hey, guys. Good afternoon, thanks for taking the question.

Quickly on.

<unk> execution again.

First question I know you probably can't get into all the specifics, but if we sort of back into what's implied by the guidance for the vendor rebates that youre going to.

Daniel S. Shugar: Our execution is backed by a strong history of innovation, deep domain expertise, a global supply chain, and trusted relations. We're thrilled to begin this year as a fully independent company. We will continue to make strategic investments, expand our talented team, and look to pursue additional market opportunities. Nextracker is well positioned to grow and scale globally, but we're just getting started. We look forward to your questions. Now, let me pass the call back to the operator.

You are seeing in fiscal Q4, I guess I get to something in the ballpark ballpark of like a third.

Credit share with other constituents here I know, we might not have all the details to be able to get to that number but I thought it would be a bit higher. So is there. Some additional clarity you can provide as to weather.

Unknown Executive: Thank you. If you would like to ask a question, please press star followed by 1 on your telephone keypad. If you'd like to remove your question, press star followed by 0.

One is that in the right ballpark or two is there something unique about your.

Shipments in 2003 that you wouldn't get.

Unknown Executive: And in the interest of time, please limit yourselves to one question and one follow-up to allow everyone to speak. Our first question comes from Brian Lee of Goldman Sachs. Please proceed. Hey guys, good afternoon. Thanks for taking the time to answer the question. And, you know, kudos on great execution again. I guess, first question, I know you probably can't get into all the specifics, but if we sort of back into what's implied by the guidance for the vendor rebates that you're going to be seeing in fiscal Q4, I guess I get to something in the ballpark of like a third credit share with other, you know, constituents here. I know we might not have all the details to be able to get to that number, but I thought it'd be a bit higher.

Our full share or 50% plus that I think has been implied thus far.

By you and your peers, just wondering what we should be thinking about as we head into fiscal 'twenty five.

And then I had a follow up.

Brian and Dan sure. Thank you for your question, we're not commenting on the share that we have with our manufacturing partners safety up more share of elaborate on that yes, Thanks, Dan Hi, Brian.

Couple of things to remember.

On our fiscal 'twenty four.

One is we've previously guided without 40 buybacks, we're going to finish the year measuring our business to that standard.

To give you guys enough transparency.

To understand that we are partnering with our vendors and have a meaningful share and thats the extent of it.

But 24 is a transitional year.

Brian K. Lee: So is there some additional clarity you can provide as to whether, you know, one, is that in the right ballpark or two, is there something unique about, you know, your shipments in 23 that you wouldn't get the full share or, you know, 50% plus that I think has been implied thus far by you and your peers? Just wondering what we should be thinking about as we head into fiscal 25. And then I had a follow-up appointment.

Starting in January we started U S manufacturing before 2023, but triple down on it after IRI and think about the ramp going through calendar 2023, so you're not at a full run rate at the beginning of it so to try to measure.

The amount based on our accumulative catch up entry is not going to be representative of our going forward plan.

And then each vendor, we're going to work contract by contract to understand their tax filings that it and work with them.

Daniel S. Shugar: Brian, Dan Sugar, thank you for your question. We're not commenting on the share that we have with our manufacturing partners. Dave, do you have more to elaborate on that? Yeah, thanks, Dan. Hi Brian.

And then lastly, Q4.

It contains a cumulative catch up for all of those periods over the ramp and so in a nutshell the way we're addressing as fiscal 'twenty five.

<unk> 45 X will be operationalized and used as a measure.

Outperformance for us so it will be in our guidance for fiscal 'twenty five but looking at it for fiscal 'twenty is really a transitional year and thats kind of why we've approached it that way.

David P. Bennett: You know, a couple of things to remember in fiscal 24. One is, you know, we've previously guided without 45x. We're going to finish the year, measuring our business to that standard, and try to give you guys enough transparency to understand that we are partnering with our vendors and have a meaningful share. And that's the extent of it. But 24 is a transitional year.

Yes fair enough that makes sense that figure there are some nuances to that number for this year, maybe just second question I'll pass it on.

Yes.

This could be for you Dan I guess can you talk a bit about the competitive landscape the market share outlook, particularly in the U S. It seems like that has become a bit more noise here of late I know next tracker has been winning via innovation and meeting customer requirements. So any reason to believe that won't be the case going forward can you maybe speak to the apples.

David P. Bennett: Starting in January, we started US manufacturing before 2023, but tripled down on it after IRA. And think about the ramp going through calendar 2023. So you're not at a full run rate at the beginning of it.

David P. Bennett: So to try to measure the amount based on our cumulative catch-up entry is not going to be representative of our going forward plan. You know, and then each vendor, we're going to work contract by contract to understand their tax filing status and work with them. And then lastly, Q4, it contains a cumulative catch-up entry for all of those periods over the ramp.

Youre getting wins or feedback from customers on this being the reason you continue to win business here in the U S.

Thank you Brian Yes.

Product differentiation is a primary driver for.

Winning in the market.

That combined with our experience financial condition.

And at the end of the day, what does that mean.

Our trackers.

Make more energy.

And other designs.

At scale in the market.

We you can visually see it if you go on.

Youtube and you looked at our true capture first couple three minutes.

You can actually see.

How the systems are working empirical side by side cases, where true captures offer us operationalize the knot and we harvest for bifacial owners through reflected light.

Daniel S. Shugar: And so, in a nutshell, the way we're addressing it is fiscal 25. 45X will be operationalized and used as a measure of performance for us. So it will be in our guidance for fiscal 25, but looking at it for fiscal 24, it's really a transitional year, and that's kind of why we've approached it that way. Fair enough. That makes sense. I figured there were some nuances to the number for this year. Maybe the second question; I'll pass it on. This could be for you, Dan, I guess.

About a third of the United States is that.

Pretty extreme hail risk area, and we have operationalized, our health pro technology to help customers.

Enjoy.

Operational performance on their system.

Safer and we have many.

Successful customers with their fleets using our technology. So there's a variety of factors there, but we've been in the shoes of the customer what we're focused on is below sell Coa.

For our customers by having differentiation differentiated technology and really strong operational metrics.

Daniel S. Shugar: Can you talk a bit about the competitive landscape, and the market share outlook, particularly in the US? It seems like that has become a bit more noisy of late. I know Nextracker has been winning via innovation and meeting customer requirements, so any reason to believe that won't be the case going forward? Can you maybe speak to examples where you're getting wins or feedback from customers on this being the reason you continue to win business here in the US? Thank you, Brian. Yeah, product differentiation is a primary driver for that, combined with our experience and financial position. And at the end of the day, what does that mean? are trackers, and other designs that are

Alright, Thanks for all the color guys I'll pass it on.

Our next question comes from Jon Windham with UBS. Please proceed.

Perfect. Thanks.

Great result, just to ask about you did mentioned some project delays that you can just any color you can add on what drove those obviously add some projects pull forwards to allow you still beat on revenue.

Pretty solidly, but just any commentary about the nature of delays geography, what caused them to be helpful. Thanks.

Sure. This is Howard Wenger I'll answer that so we had some delays for example in the Midwest. There is a lot of it's the wintertime.

The training sites.

Daniel S. Shugar: That's cool. We, you can visually see it if you go on. [inaudible] And we harvest more bifacial energy through reflected light. About a third of the United States is in a pretty extreme hail risk area.

Sites can get muddy things.

Things could get pushed.

A week or two weeks so the shipments can.

Very from quarter to quarter as a result of that Meanwhile, we've had acceleration where customers want product faster.

Yeah.

And so on balance we'd be.

Every financial metric, which means we'd be on shipments too so on balance.

Daniel S. Shugar: And we have operationalized our Hail Pro technology to help customers enjoy operational performance on their system that's safer, and we have many successful customers with their fleets using our technology. So there's a variety of factors there, but we've been in the shoes of the customer. What we're focused on is the lowest LCOE for our customers by having differentiated technology and really strong operations. Right. Thanks for all the color guys.

We're good.

It's not we're in the project business for part of this construction business and things can shift here and there. The other thing that I mentioned was the conflict in the Suez Canal region.

<unk>.

And in that we.

We have factored that into our shipping.

So.

With our customers, so we're able to mitigate and and get product to our customers on time. So they can finish their projects on time, but things can shift a week or two as a result of different dynamics.

Brian K. Lee: I'll pass it on. Our next question comes from John Windham with UBS; please proceed. Perfect. Thanks. Great result.

Jonathan Mark Windham: You did mention some project delays. Any colleague can add on what drove those up, so you add some project pull-forwards to allow you to still beat on revenue pretty solidly, but just any commentary about the nature of delays, geography, what caused them would be helpful. Thanks. Sure, this is Howard Wenger. I'll answer that.

Thanks for your question Great. Thanks, Yeah. Thanks, Matt I'll take the accounting question is offline I won't bore everyone. Thanks again.

Our next question comes from Mark Strouse with Jpmorgan. Please.

Please proceed.

Good afternoon. Thank you very much for taking my questions.

Howard J. Wenger: So we had some delays, for example, in the Midwest. There's a lot of it's wintertime, and it's raining, sites can get muddy, things can get pushed a week or two weeks. So the shipments can, you know, vary from quarter to quarter as a result of that. Meanwhile, we've had accelerations where customers want the product faster. And so, on balance, you know, we beat on every financial metric, which means we beat on shipments, too. So, on balance, we're good, but it's not, we're in the project business, we're part of the construction business, and things can shift here and there. The other thing I mentioned was the conflict in the Suez Canal region, and we have factored that into our shipping timeframes with our customers. So we're able to mitigate and get product to our customers on time so they can finish their projects on time. But things can shift by a week or two as a result of different dynamics.

Echo my congrats as well.

So pretty impressive upside to the guidance with just a just a quarter to go in the year.

I'm curious, if you're kind of talking about project movements forward and backwards.

If there weren't any sizable project pull forwards into the March quarter that you should call out or is this kind of just broader market acceleration.

It really is just broader market acceleration mark.

As we noted in our previous call. We have we have a lot of backlog.

Our backlog has grown quarter over.

Quarter over $3 billion significantly.

So customers and the strength of the market.

Particularly in the U S.

As we noted 78% of our revenue came from the U S in the quarter.

This is higher than normal it can fluctuate quarter to quarter and we expect it to normally be two thirds, one third but there were there are some pull ins.

Howard J. Wenger: Thanks for your question. Great. Thanks. Yeah, yeah.

In the U S, but it's not significantly changing our demand picture at all our backlog grew in the quarter.

Jonathan Mark Windham: Thanks for that. I'll take the 40 bucks accounting questions offline. It won't bore everyone.

So theres really nothing significant.

Significant one thing that Dan noted in his remarks is that there are simply more developers and more npcs and we believe we are.

Mark Wesley Strouse: Thanks again. Our next question comes from Mark Strouse with J.P. Morgan. Please proceed. Good afternoon.

Howard J. Wenger: Thank you very much for taking our questions. I'll echo my congratulations as well. So, pretty impressive upside to take guidance with just a quarter to go in the year. I'm curious if, you know, kind of talking about project movements forward and backward, if there were any sizable project pull-forwards into the March quarter that you should call out, or is this kind of just broader market acceleration? It really is just broader market acceleration, Mark.

Doing a good job with our team.

Winning the share of the business. So the strength is there the demand strengthens there and things are slowing down because of IRA.

And anyway, so yes.

Yes, that's fair.

On balance.

Okay I'll take the rest offline. Thank you Howard.

Thanks Mark.

Our next question comes from Julien Smith with Bank of America.

These proceed.

Howard J. Wenger: As we noted in our previous call, we had, we have a lot of backlog. Our backlog has grown quarter over quarter; we're over 3 billion significantly. And so customers, the strength of the market, particularly in the US. As we noted, 78% of our revenue came from the US in the quarter, which is higher than normal. It can fluctuate quarter to quarter, and we expect it to normally be two-thirds, one-third. But there are some pull-ins in the U.S., but it's not significantly changing our demand picture at all.

Hey, indeed, really very well done impressive.

Look thank you guys very much appreciate it so with respect to the 45 X just coming back to what we're saying is that going to go up a sense Gerry if I can ask that question slightly differently rather than what the percentages. How do you think about what a run rate might look like for instance, like how do you think about what that would trend into the 25 period.

Is that fully reflective of all the various aspects of 45 access do you think about <unk> and beyond.

Hi, Julien. Thanks for your question, let me just start with the operational aspect and then Dave will speak to the financial.

Howard J. Wenger: Our backlog grew in the quarter, so there's really nothing significant. One thing that Dan noted in his remarks is that there are simply more developers and more APCs. And we believe we're, you know, doing a good job with our team, winning that share of the business. So the strength is there, the demand is there. And things aren't slowing down because of IRA in any way. So, yeah, that's where we're at on balance. I'll take the rest offline.

Next tracker is very very serious about scaling up.

Domestic manufacturing of our states and our other core okay.

And we hit this early.

And last summer we announced.

Five gigawatts of contracted capacity across the United States.

We've operationalized that six public factory openings.

Julien Patrick Dumoulin: Thank you, Howard. Thanks, Mark. Our next question comes from Julien Smith with Bank of America. Please proceed. Hey, indeed, really very well done.

We have over a dozen.

Factories shipping finished goods all across the United States.

And we are going to be in a position to be any customer request for a domestic manufacturer content and be able to arbitrage any problem.

Julien Patrick Dumoulin: Impressive, indeed. Look, thank you guys very much. I appreciate it.

Daniel S. Shugar: So with respect to the 45x, just coming back to what we were saying a second ago about percent sharing, if I can ask that question slightly differently, rather than what the percentage is, how do you think about what a run rate might look like, for instance? Like, how do you think about what that would trend into the 25 period? And is that fully reflective of all the various aspects of 45x as you think about TorqueTube and beyond? Hi Julien.

<unk>.

Congestion at a four four.

There is a.

Our problem.

Logistics route or currency or for a natural disaster or what have you.

We're really focused on being able to operationalize that with buses supply chain.

And.

We're achieving great success with our partners.

A number of cases, we've gone back to some of these factories, we've started up work with our partners to double.

Or even greater increase capacity in those factories.

Dave.

Hey, Julien the only thing to add would be it.

Daniel S. Shugar: Thanks for your question. Let me just start with the operational aspect, and then Dave will speak to the financial one. Nextracker is very, very serious about scaling up. Domestic manufacturing in the States and our other, And we hit this early, and last summer we announced that 25 gigawatts of contracted capacity across the United States. We've operationalized that; we've had six public factory openings. We have over a dozen factories, shipping finished goods all across the United States.

As I indicated there is a lot of moving parts with what.

<unk> for fiscal 'twenty, four Q4 amount and that isn't necessarily a good indicator for what we will be given the ramp given the onetime nature of the cumulative catch up.

As we've been saying, we bring the demand it's a meaningful partnership with our with our vendors.

And we will include that in our fiscal 'twenty five guidance.

It will be transparent to you see the uplift to our profitability for fiscal 'twenty five.

Wonderful guys. Thank you very much I appreciate it and then just related you are on the mixed on internationally you guys were talking about once there's still obviously some real successes abroad. How do you think about what that proportion could trend as you think about it year over year in terms of recognizing that revenue and then related how do you think about the ongoing expansion of gross margin does that start to top out as you.

Daniel S. Shugar: And we're going to be in a position to accept any customer request for domestically manufactured content and be able to arbitrage any problem with congestion at a port or there's a problem in a logistics route or currency or due to a natural disaster or what have you. So we're really focused on being able to operationalize that with most of the supply chain and we're achieving great success with our partners, and in a number of cases, we've gone back to some of these factories we started up with our partners to double or even greatly increase the capacity in those. Dave

Think about that international mix really getting going here if you will.

Hey, Julien this is Howard so it's a big World Solar works just about everywhere.

First project in Sweden.

David P. Bennett: The only thing to add would be, As I indicated, there's a lot of moving parts with what quantifies the fiscal 24 Q4 amount, and that isn't necessarily a good indicator for what we will be given the ramp, given the one-time nature of the cumulative catch-up. As we've been saying, we bring the demand. It's a meaningful partnership with our vendors. And we will include that in our fiscal 25 guidance, so it'll be transparent.

But.

My father was a great solar market.

So so but the United States remains the biggest market outside of China in the World and certainly for next tracker, it's going to continue to be.

The biggest market for some time.

But on balance there are.

More locations around the world that.

We can and we are driving towards increasing that one third share of our total business. Because we think that's healthy for the company and provides us more levers for growth.

David P. Bennett: You see the uplift to our profitability for fiscal 25. wonderful, guys. Thank you very much.

Julien Patrick Dumoulin: And then just related here on the mix on international, you guys were talking about one-third still, obviously some real successes abroad. How do you think about what that proportion could trend as you think about it year over year in terms of recognizing that revenue? And then, related, how do you think about the ongoing expansion of gross margin? Do you start to top out as you think about that international mix really getting going here, if you will? Hey, Julien, this is Howard.

And we're really just getting started in many countries around the world.

So as.

As far as margin on that front.

We have seen that it can be.

More price.

Sensitive, but we think that will change over time as customers come to realize the strength of our technology and the importance of the tracker in terms of being designed for 40 year design life like ours is with the highest quality components the best reliability the.

Howard J. Wenger: So it's a big world; solar works just about everywhere. We had our first project in Sweden, not, you know, typically thought of as a great solar market. So, the United States remains the biggest market outside of China in the world, and certainly for Nextracker, it's going to continue to be, you know, the biggest market for some time. But on balance, there are more locations around the world that we can, and we are driving towards increasing that one-third share of our total business because we think that's healthy for the company and provides us with more levers for growth. Um, and we're really just getting started in many countries around the world.

The best performance track record and the owners of these projects will increasingly drive.

And.

The choice of next tracker being the most.

Reliable and most trusted partner.

We've seen that in the United States, We think Thats part of our traction we believe we're going to see that more and more internationally.

As time goes on one thing I want to note and mesh in that we've shipped over 90 gigawatts in the Companys history. Two thirds of those Gigawatts is just in the last three years.

So when you think about the S curve and the adoption rate and how were going up that and the experience base it'll pull increasingly more towards quality a flight to quality over time and that's played out in the U S already which is our home market it'll play out internationally as well.

Howard J. Wenger: So as far as margin on that front is concerned, we have seen that it can be more price sensitive. But we think that'll change over time as customers come to realize the strength of our technology and the importance of the tracker in terms of being designed for a 40-year design life like ours is with the highest quality components, the best reliability, the best performance track record, and the owners of these projects will increasingly drive and the choice of Nextracker being the most reliable and most trusted partner. We've seen that in the United States.

For your question.

I'd like to thank you all on what Howard said.

Which is this.

It's around our philosophy.

For how we design.

How we build how we serve customers.

I can tell you with X trackers not going to do.

We're not going to cut any corners.

On a.

Product quality.

<unk> philosophy.

Howard J. Wenger: We think that's part of our traction. We believe we're going to see that more and more internationally as time goes on. One thing I want to note. Dan mentioned that we've shipped over 90 gigawatts in the company's history, and two-thirds of those gigawatts are just in the last three years. So, when you think about the S-curve and the adoption rate and how we're going to increase that in the experience base, it'll pull increasingly more towards quality, a flight to quality over time. And that's played out in the U.S. already, which is our home market. It'll play out internationally as well. Thanks for your questions. I'd like to pile on with Howard.

You won't be seeing X trackers shipping lead acid batteries.

Controllers.

Doing any corner cutting.

Our product is going to be.

Maintaining the highest standards.

To make sure that.

<unk> perform.

And that we we.

Really set a standard not only for next tracker, but that solar power systems.

The highest performing reliable systems.

Power generation.

Thanks Julien.

Our next question today comes from Philip Shen with Roth.

Please proceed.

Hey, guys. Congrats on a great quarter, just a quick follow up on Julians last question there spin.

Daniel S. Shugar: What is this? It's around our philosophy of How We Design, how we build, how we serve. I can tell you what Nextracker is not going to do. We're not going to cut any corners. Honor, product quality. Design Philosophy. You won't be seeing Nextracker shipping lead-acid batteries in any, doing any corner cutting, on our product.

Specifically for F Q3 was.

What was international mix down due to seasonality or was it more just strength in the U S market.

Or was there some slowdown in international growth and then.

What is your expectation for the international versus U S mix for Q4. Thanks.

So, let's just start for the full year, Phil we expect to land at roughly one third two thirds for the full fiscal year 'twenty four.

Daniel S. Shugar: We're going to be maintaining the highest standard for trackers, and that we really set a standard, not only for Nextracker, but that solar power system is the highest performing, reliable, and is empowered. Thanks, Julien. Our next question today comes from Philip Shen with Ross. Please proceed. You guys, congrats on a great quarter. Just a quick follow-up on Julien's last question there. Specifically for FQ3, was the international mix down due to seasonality, or was it more just strength in the U.S. market, or was there some slowdown in international growth?

Hey.

So.

On balance Youll see for Q4.

Or is that are closer to that.

And so we.

The U S market just as is.

Very strong right now and customers are.

Our accelerating certain projects.

And that's what we saw this quarter.

And one week can make a difference right. If you got one out of 13 weeks you have some significant projects getting more product. This week versus next the next week or falling out of into the subsequent quarter. It can change that ratio, but yes were stable at one third two thirds.

Philip Shen: And then, what is your expectation for the international versus U.S. production? So let's just start for the full year, Phil. We expect to land at roughly one third, two thirds for the full fiscal year 24. Okay, so, Unbalanced, you'll see numbers that are closer to that. And so we, um, Uh, the U.S. market just is, is... very strong right now, and customers are accelerating certain projects. And that's what we saw. And, you know, one week can make a difference, right? If you got one out of 13 weeks, you have some significant projects, getting more product this week versus next, you know, the next week, or falling out of the subsequent quarter, it can change that ratio.

Andrew Thanks, However, I do want to note that interest.

The international business is up.

Year on year quarter on quarter in terms of.

<unk> and <unk>.

Revenue.

Got it thanks, so no slowdown there as it relates to.

Okay.

Right now it's really not.

You guys are.

Doing doing very well with your bookings and your record backlog.

Which would assume at least $710 million.

And bookings I think for Q3.

Was wondering if you could give us just a little bit of color on do you think the F Q3 bookings were closer to $1 billion or maybe closer to $750 million and then to what degree can you share any color on.

Howard J. Wenger: But yeah, we're, we're, stable at one through two. And I do want to note that the international business is up, you know, year on year, quarter on quarter in terms of bookings and revenue. Got it. Thank you. So there's no slowdown there as it relates to bookings. No, it's really not.

What you see for calendar 'twenty, four or better yet fiscal 'twenty five I know you have no official guidance, but.

As you guys have very long lead times and you should have good visibility.

Philip Shen: You guys are doing very well with your bookings and your record backlog, which would assume at least 710 million in bookings, I think, for FQ3. I was wondering if you could give us just a little bit of color on whether you think the FQ3 bookings were closer to a billion or maybe closer to 750. And then, to what degree can you share any color on... um... what you see for calendar twenty-four or better yet fiscal twenty-five? I know you have no official guidance, but the reality is that you guys have very long lead times, and you should have a good visibility degree you can kind of talk through that would be really helpful. Do you expect the booking strength to continue?

The degree you can kind of talk through that would be really helpful.

Do you expect the bookings strength to continue.

Do you expect to be able to continue to hit these record backlog numbers in the coming quarters. Thanks, guys.

We're going to give more detail on the next call as to where we landed on backlog for the year. We mentioned that I think last quarter the quarter before that we would be on an annual basis, providing more detail on backlog and then quarter to quarter some directional guidance.

No.

I just wanted to say on the bookings and the bookings strength.

Very consistent for the since we've been public company each quarter that we've reported our bookings in totality worldwide EPC and VCA business very consistent each quarter in terms of magnitude and very strong each quarter.

Philip Shen: to be able to continue to hit these record backlogs. We're going to give more detail on the next call as to where we landed on the backlog for the year. We mentioned that, I think, last quarter of the quarter before, that we would be, on an annual basis, providing more detail on backlog and then quarter to quarter, some directional guidance. I just want to stay on the bookings and the booking strength, very consistent for the since we've been a public company each quarter that we've reported our bookings in totality worldwide EPC and BCA business, very consistent each quarter in terms of magnitude and very strong Strong Demand Globally. Thanks for your question, Phil. And just on the longer term, Phil. In my prepared remarks, I noted that the EIA is forecasting a 26% annual compounded growth in solar in the state. That sounds very high, right?

Collecting.

Strong demand globally.

Thanks for your question, Phil and just on the longer term Phil.

In my prepared remarks, I noted that the EIA is forecasting a 26% annually compounded growth in solar in the state.

Does that that sounds very high rate well next trackers demonstrated a 30% annual compounded growth for five years in a row.

So it is definitely in the realm of.

Possibility, but the United States in particular is going to need a ton of.

Power. So there is a huge opportunity here not just for next tracker, but the whole solar power industry other tracker companies.

New tracker entrance, new solar panel companies, new power electronics companies, new EPC to really engage in the market and we need we.

We need additional companies.

And companies that are serious about performing and delivering high quality products across the value chain.

Daniel S. Shugar: Well, Nextracker has demonstrated a 30% annual compounded growth for five years in a row, so it is definitely in the realm of possibility. But the United States, in particular, is going to need a ton of power. So there's a huge opportunity here, not just for Nextracker, but the whole solar power industry, and other tracker companies. Newtracker, new solar panel companies, new power electronics companies, new EPCs to really engage in the market. We need additional companies and companies that are serious about performing and delivering high quality products across the value chain. So I mean, that is tremendous. 300 gigawatts of new power will need to be needed in five years in the United States.

I mean that is tremendous 300 gigawatts of new power needed five years in the United States with the EIA predicting most of that's going to come from solar that's a big deal.

Thank you Phil.

Thanks, Dan.

Okay. Thanks.

Yeah.

Our next question comes from Kathy Harrison with Piper Sandler.

Please proceed.

Good afternoon, great quarter, and thanks for taking the questions.

So my first one is just on the margin.

30% is a pretty big number and I was wondering if you could just provide more specifics precisely on how you got to 30%. This quarter and then Dave I know you mentioned mid Twenty's as more of a sustainable level, but is there a scenario in which <unk>.

Philip Shen: With the EIA predicting that most of that's going to come from solar, that's a big deal. Thank you, Phil. Thanks, Dan. Our next question comes from Kashy Harrison with Piper Sandler. Please proceed. Good afternoon.

Next tracker to generating 30% gross margins ex credits, while simultaneously generating a lower <unk> than some of your peers and I have a follow up.

Yes, thanks for the question.

Kashy Harrison: Great quarter. And thanks for taking the questions. So my first one is just on the margins. You know, 30% is a pretty big number, and I was wondering if you could just provide more specifics precisely on how you got to 30% this quarter. And then, Dave, I know you mentioned mid-20s is more of a sustainable level.

Obviously is there a scenario what we just printed it so I can't say that there isn't a scenario.

The higher gross margin for the quarter driven by.

By some level of leverage we were at a record revenue at.

<unk> 10.

We benefited from a regional mix that we already alluded to with a high U S concentration that generally drives a higher margin profile and a slightly better software attach rate, so thats going to move our margin profile up as.

David P. Bennett: But, you know, is there a scenario in which Nextracker is generating 30% gross margins, X credits, while simultaneously generating a lower LCOE than some of your peers? And I have a follow-up. Yeah, thanks for the question, Kashy. Obviously, is there a scenario? Well, we just printed it out. So I can't say that there isn't a scenario.

As well.

The year over year increase we spoke about before but in terms of the sequential increase.

It's just execution over and over the biggest factor in my opinion is pricing discipline and cost discipline. So some of the innovations that we talk to and everyone aligned to the new product introductions, that's real but it's also about innovating our supply chain.

David P. Bennett: You know, the higher gross margin for the quarter driven by some level of leverage; we were at a record revenue of 7.10. But to close, you really should look at it over a greater than one quarter window. If you look at the whole year to date, Kashy, we are at a 27% gross margin and a 20% EBITDA, which is in that range of what we say is sustainable. Thank you. We're going to have to... Good.

Our cost downs, and enabling us to maintain that higher profitability, but to close you really should look at it on a.

Greater than one quarter window, if you look at the full year to date.

We are at a 27% gross margin and a 20% EBITDA, which is in that range of what we say it's sustainable.

Thank you.

Yes.

Okay got it.

Kashy Harrison: My apologies, we need to go to the next question. Thanks, Kathy. Thank you. Our next question comes from Christine Cho with Barclays. Please proceed. Good evening.

Yeah.

My apologies we need to.

Next question. Thanks, Kathy Thank you.

Our next question comes from Christine Cho with Barclays. Please proceed.

Good evening. Thank you for taking my question great quarter.

Christine Cho: Thank you for taking my question. Great quarter. If I could just go back to your comments on the 45X for fiscal 25, you mentioned that you expected it to be meaningful, and the objective is to reduce costs. So can you just talk about how you expect it to impact margins? Do you expect it to be an equal offset?

If I could just.

Go back to your comments on the 45 X bar fiscal 'twenty five you mentioned that you expect it to be meaningful.

And the objective is to reduce heart. So can you talk to how you expect the sort of impact margin youre back expected equal.

Recall offset or.

Christine Cho: Or, you know, do you anticipate there will be more and you would keep it as a higher margin, or do you adjust for demand? Hi Christine. This is Suge.

Anticipated anymore.

That is higher margin or do it that's correct.

Hi, Christine this is Chuck thanks for your questions.

Daniel S. Shugar: Thanks for your question. Look, the 45X was about rapidly spinning up the US supply chain to deal with all the disruptions in the pandemic and create a bunch of jobs here. That was the premise of the 45 Act.

Look the 45 X.

Was about.

Rapidly spinning up the U S supply chain to deal.

With all the disruptions in the pandemic and create a bunch of jobs here.

That was the premise of the 45 day be it in tracker.

Daniel S. Shugar: CNN Tracker, or solar panel, and we have accomplished that; products are competitive here with things that are made overseas with the 45x. And we're delivering on the US product, field at source, domestically with higher quality steel; it's also cleaner. Okay, with respect to our position on the 45-X. Nextracker has an extremely diverse, domestic supply chain across multiple Manufacturing Partners. With a huge amount of capacity, we've announced over 25 gigawatts. Counseling.

For solar panels.

We have accomplished that.

Our competitive here.

With things that are made overseas with a 45 X and we're delivering on the U S product.

With.

Steel that sourced.

Domestically with higher <unk>.

All of these steel it's also cleaner.

Right.

With respect to our position on the 45 X.

Next tracker has an extremely diverse.

Domestic supply chain across multiple man.

Manufacturing partners.

With a huge amount of capacity, we've announced over 25 gigawatts.

<unk>, we've operationalized that which one would then have to presume we're in a very strong.

Daniel S. Shugar: We've operationalized that, which one would then have to presume we're in a very strong position with respect to I, supporting but also negotiating position with respect to suppliers. So we're going to leave it at that, and we'll be speaking to our FY25 guidance after the next four. Thank you for your questions. Okay, great.

Position with respect to.

Hi.

Supporting but also.

Hi.

Negotiating position with respect to suppliers, so we're going to leave it at that.

And we'll be speaking to our FY 'twenty five guidance.

After the next quarter.

Thank you for your question Okay great.

Okay.

Our next question comes from Puneet <unk> with Wells Fargo. Please proceed.

Praneeth Satish: Our next question comes from Praneeth Satish with Wells Fargo. Please proceed. Thanks. I guess with the separation from Flex behind you, I'm just interested in your perspective on M&A, whether you'd be more or less inclined to pursue acquisitions now, and then, I guess just broadly, what gaps do you see in your portfolio? And what businesses do you think would be complementary and synergistic?

Thanks.

I guess with the separation from flex behind you I'm just interested in your perspective on M&A, whether you would be more or less inclined to pursue acquisitions now and then I guess just broadly what gaps do you see in your portfolio and what businesses do you think would be comp.

Complementary and synergistic.

Daniel S. Shugar: Thanks, Praneeth. We don't see gaps in our offering. We could expand our offering. We will be very discerning.

Thanks, pretty we don't see gaps in our offering.

We could expand our offering.

We'll be very discerning.

Daniel S. Shugar: As we were when we did an acquisition of a machine learning company seven or eight years ago that helped us accelerate our food capture technology. So we just completed the Flex spinoff, and we are open to a variety of options. We're evaluating things, but we're going to have a lot of discipline about how we proceed with that. Thank you. Our final question comes from Steve Fleishman with Wolf Street Research. Please proceed. Great. Excuse me.

As we were when we did an acquisition of a machine learning company seven or eight years ago that helped us accelerate our.

Crude capture technology so.

We just completed the flex spin off and we.

We are open to a variety of options, we're evaluating things, but we're going to be have a lot of discipline about how we proceed on that.

Thank you.

Our final question comes from Steve Fleishman with Wolfe Research.

Please proceed.

Great.

Steven Isaac Fleishman: Thank you. Two quick questions: first, the strong US growth, any sense of how much that is market growth and how much you are taking market share. And then just would like more color on your thoughts on the commentary on the trade issues on panels. A lot of that seems backward looking, but what the risk might be to forward looking.

Excuse me. Thank you two quick questions first.

The strong U S growth any sense on how much that is market growth versus you taking market share.

And then just would like more color on your thoughts on the commentary on the trade issues on panels and.

A lot of assets that seems backward looking but what the risk might be to forward looking.

Thank you.

We we focus on our customers.

Howard J. Wenger: We focus on our customers and winning and partnering with them. We're doing that with our EPC customers. We're doing that with owner developers directly, and power plant owners. We have a lot of capacity for growth.

And wedding.

And partnering with them.

We're doing that with our EPC customers, we're doing that with owner developers directly.

And then power plant owners.

And.

We have a lot of capacity for growth.

Howard J. Wenger: And we don't really pay attention to whether we're taking share or we're just focused on delivering value for our customers and improving our product, investing in innovation, and doing as much solar as we possibly can. We've dedicated our whole careers to solar, mainstreaming solar power. Dan and I have worked in the solar power industry for more than 35 years each.

And we don't really pay attention to.

Whether we're taking share or we're just we're just focused on delivering value for our customers and improving our products.

Investing in innovation.

And doing.

Doing as much solar as we possibly can we've dedicated our whole careers to solar mainstreaming solar power.

I've worked in the solar power industry for more than 35 years each.

Howard J. Wenger: And that's our focus. What we do find when we do that, when we have that focus, and when the company focuses on value, we do win. And it seems like we win disproportionately.

And that's our focus what.

What we do find when.

When we do that.

When we have that focus and when the company focuses on value.

That we do win and it seems like we win disproportionately.

Howard J. Wenger: And, and, which is, it's good for the company. But it's mainly around, and we've shown that we are the global leader, leader in market share. Okay, but We're just, We're really conveying that to all of our employees at the company: focus on the customer, focus on innovation, differentiation, delivering value, lowering the cost of energy.

And which is good for the company, but it's mainly around <unk>.

We've shown that we are both global leaguer leader in market share okay, but.

We're just.

We're really conveying that to all of our employees at the company focus on the cups customer focus on innovation differentiation delivering value lowering the cost of energy.

Steven Isaac Fleishman: Having that 40-year design life, highest quality, highest reliability DNA, and in that, that brief success. Thanks for your question. We have time for one more question, operator. Our final question comes from Moses Sutton with BNP. Please proceed. Hi, thanks for squeezing me in. Just a quick one on True Capture. As you noted, it's slightly better software attached. Any way to quantify this at all? Maybe, you know, the cumulative installed gigawatt number, how much has changed in a quarter of a quarter, year over year, just anything that could help us on the True Capture side with the numbers.

Having that 40 year design life highest quality highest rollout.

Reliability DNA.

And in that and that breeds success.

Thanks for your question.

We have time for one more question operator.

Our final question comes from Moses Sutton with BNP. Please proceed.

Yeah.

Hi, Thanks, Thanks for squeezing me in just a quick one on to capture so you noted it's slightly better software attach any way to quantify this at all maybe the cumulative installed gigawatt number.

How much has changed on a quarter over quarter year over year, just anything that can help us on the true capture side through the numbers. Thanks again.

Moses Nathaniel Sutton: Thanks. Moses, thanks for your question. As we have kept introducing new features on TrueCapture like Split Boost and Zonal Diffuse, we've seen increasing uptake on our TrueCapture fleet. And, as I mentioned, you can visually see it.

Well thanks for your question.

As we have kept introducing new features on troop capture like split boost Donald diffuse, we've seen increasing uptake on our true capture fleet.

And as I mentioned, you can visually see it so we encourage people to watch those videos, we have on Youtube will be going deeper on your question. After next quarter when we do the annual guidance.

Moses Nathaniel Sutton: So we encourage people to watch those videos we have on YouTube. We'll be going deeper on your question after next quarter when we do the annual guide. Great. Thanks again. Congratulations. Thank you, everyone. Thank you, Moses.

Great. Thanks again congrats.

Thank you alright, thank you everyone for joining the call.

Moses Nathaniel Sutton: Great. This concludes our call. Thank you. This will conclude today's conference call. Thank you all for your participation. You may now disconnect your line.

This concludes our call. Thank you.

This will conclude today's conference call. Thank you all for your participation you may now disconnect your line.