Q4 2024 Nextracker Inc Earnings Call

Good afternoon, everyone and thank you for standing by.

Sierra: My name is Sierra and I will be your conference operator today.

Speaker Change: Today's call is being recorded.

Speaker Change: I would like to welcome everyone and extract this fourth quarter and full fiscal year 2024 earnings call.

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

Sierra: Good afternoon, everyone, and thank you for standing by. My name is Sierra, and I will be your conference operator today. Today's call is being recorded. I'd like to welcome everyone to Nextracker's fourth quarter and full fiscal year 2024 earnings call. After the speaker's 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. Mary, you may begin.

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

Speaker Change: You may begin.

Mary Lai: Thank you and good afternoon, everyone. Welcome to Nextracker's fourth quarter in full fiscal year 2020 earnings call. I'm Mary Lai, Vice President, Investor Relations. I'm joined by Dan Sugar, our CEO and founder, Howard Wenger, our president, and Dave Bennett, our CFO.

Mary Lai: Thank you and good afternoon, everyone. Welcome to next truckers fourth quarter and full fiscal year 2024 earnings call.

Mary Lai: Following our prepared remarks, we will transition to a Q&A session. As a reminder, a replay of this call will be 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 certainties that may cause actual results to differ materially from our expectations.

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

Joined by Dan Sugar, our CEO and founder Howard Wenger, our president and Dave <unk>, Our CFO. Following our prepared remarks, we will transition to a Q&A session.

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

Mary Lai: 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 recently filed 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.

Speaker Change: 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 recently filed Form 10-Q.

Speaker Change: Which are available on our IR website at investors Dot next trucker Dot com.

Speaker Change: This information is subject to change and we undertake no obligation to update any forward looking statements as a result of new information future events or changes in our expectations. Please note, we will provide GAAP and non-GAAP measures on today's call. The full non-GAAP to GAAP reconciliations can be found in the appendix to the press release the slides up.

Mary Lai: Please note, we will provide GAAP and non-GAAP measures on today's call. The full non-GAAP to GAAP reconciliations can be found in the appendix to the press release, the slides of today's presentation, as well as the financial section of the IR website. Now I will turn the call over to our CEO and founder, Dan.

Speaker Change: Today's presentation as well as the financial section of the IR website, and now I will turn the call over to our CEO and founder Dan.

Daniel S. Shugar: Thank you, Mary. Welcome to our fourth quarter and full fiscal year 2024 earnings call. Fiscal year 24 was a fantastic year for Nextracker and the solar engine. As I reflect on the past year and what's ahead of us, it's increasingly clear that solar will continue to be the leading choice for new power generation, and Nextracker will continue to lead solar trackers and system solutions. Our accomplishments last year significantly advanced our mission to be the most trusted and valued renewable energy company by delivering intelligent, reliable, and productive solar power. Nextracker's DNA is about meeting or exceeding expectations with our customers and all stakeholders, including investors.

Daniel S. Shugar: Thank you Barry welcome to our fourth quarter and full fiscal year 2024 earnings call fiscal year 'twenty four was a fantastic year for next tracker in the solar industry as I reflect on the past year and whats before us it's increasingly clear that solar will continue to be the leading choice for new power.

Daniel S. Shugar: Generation and next tracker will continue leading solar trackers and system solutions, our accomplishments last year significantly advanced our mission to be the most trusted and valued renewable energy company by delivering intelligent reliable and productive solar power.

Daniel S. Shugar: Next trackers DNA is about meeting or exceeding expectations with our customers and all stakeholders, including investors our results for the last fiscal year reflect that.

Daniel S. Shugar: Our results for the last fiscal year reflect that, and Q4 was our fourth consecutive quarter of beating our revenue and profit targets. In Q4, strong execution by Team Nextracker enabled us to achieve record revenue, profits, and backlog. Revenue grew 40 percent year-on-year to $737 million. We also doubled our adjusted EBITDA year-over-year to $160 million, and this excludes significant IRA 45X tax credit benefits. In the quarter, both U.S. and international deliveries beat expectations.

Daniel S. Shugar: Q4 is our fourth consecutive quarter of beating our revenue and profit targets in Q4 strong execution by team next tracker enabled us to achieve record revenue profits and backlog revs.

Daniel S. Shugar: Revenue grew 40% year on year to $737 million. We also doubled our adjusted EBITDA year over year to $160 million and this excludes significant IRA forty-five ex tax credit benefits in the quarter, both U S and international deliveries beat X.

Speaker Change: <unk>, we reached record international revenue in Q4 of $242 million nearly a 90% increase year over year, and we reported our fifth consecutive quarter of year over year double digit revenue growth.

Daniel S. Shugar: We reached record international revenue in Q4 of $242 million, nearly a 90% increase year-over-year, and we reported our fifth consecutive quarter of year-over-year double-digit revenue growth. Looking at our fiscal year, Nextracker achieved strong execution and significant growth. We accelerated revenue, profits, and cash flow to record levels. Equally important, we increased the pace of innovation and products, expanded our global supply chain, and our talented global team. We exited the year with $2.5 billion in revenue, an increase of over 30% from the prior year, and more than doubled adjusted EBIT to $521 million.

Speaker Change: Looking at our fiscal year next tracker achieved strong execution and significant growth, we accelerated revenue profits and cash flow to record levels equally important we increased our pace of innovation products expanded our global supply chain and our talented global team.

Speaker Change: We exited the year with $2 5 billion in revenue an increase of over 30% from prior year and more than doubled adjusted EBITDA of $521 million.

Daniel S. Shugar: Our growth was enabled by a relentless focus on exceeding customer expectations through innovation, execution, and customer service. Moving to our new contracted bookings. Strong sales momentum globally resulted in a new record backlog of over $4 billion. Backlog increased more than 50% from last year's $2.6 billion and tripled over the last two years. As always, our backlog is defined to a strict standard of executed contracts or purchase orders with deposits, bills of material, and ship dates for specific projects.

Speaker Change: Our growth was enabled by relentless focus on exceeding customer expectations through innovation execution and customer service moving to our new contracted bookings strong sales momentum globally, resulting in a new record backlog of over $4 billion.

Speaker Change: Backlog increased more than 50% from last year's $2 6 billion and tripled over the last two years as always our backlog is defined to a strict standard of executed contracts for purchase orders with deposits.

Speaker Change: Those are material and ship dates for specific projects.

Daniel S. Shugar: With robust backlog exiting fiscal 24, we're introducing annual guidance for next year. For the full fiscal year 25, we expect revenue to be in the range of $2.8 to $2.9 billion, and Adjusted EBITDA in the range of $600 to $650 million, approximately 20% year-over-year growth at the midpoint. Dave will share more on guidance.

Speaker Change: With robust backlog exiting fiscal 'twenty four we're introducing annual guidance for next year.

Speaker Change: For the full fiscal year 'twenty five we expect revenue to be in the range of 2.8 to $2 9 billion.

Speaker Change: And adjusted EBITDA in the range of $600 million to $650 million, approximately 20% year over year growth at the midpoint.

Dave: Dave will share more on guidance.

Daniel S. Shugar: We're thrilled to announce we have reached a new company milestone of 100 gigawatts of power shipped since inception. 100 gigawatts of power is twice the peak load of the state of California, the world's sixth largest economy. While we are the first U.S. solar company to achieve the milestone of 100 gigawatts shipped, we view this accomplishment as a win for the entire clean power industry as well as Nextracker. We're also pleased to announce that we have successfully expanded our global supply chain to over 50 gigawatts annually, with US capacity at over 30 gigawatts annually.

Dave Smith: We're thrilled to announce we have reached a new company milestone of 100 Gigawatts shipped since inception 100 Gigawatts of power is twice the peak load of the state of California, the world's sixth largest economy.

Speaker Change: While we are the first U S solar company to achieve the milestone of 100 Gigawatts shipped we view this accomplishment as a win for the entire clean power industry as well as next tracker.

Speaker Change: We're also pleased to announce that we have successfully expanded our global supply chain to over 50, Gigawatts annually with U S capacity at over 30 Gigawatts annually.

Daniel S. Shugar: Expanding our global supply chain footprint has been instrumental to scaling the business. We now have over 80 major suppliers strategically located across five continents to support our growth. In the U.S., we played a key role in revitalizing domestic manufacturing by enabling domestic production in 20 new or expanded partner facilities since 2021. About two years ago, for example, we inaugurated a new facility in Pittsburgh with JM Steel. Just last month, we celebrated the expansion of the same facility with JM Steel and tripling annual capacity.

Next Tracker: Expanding our global supply chain footprint has been instrumental to scaling the business. We now have over 80 major suppliers strategically located across five continents to support our growth.

JM steel: In the U S. We played a key role in revitalizing domestic manufacturing by enabling domestic production in 20, new or expanded partner facilities. Since 2021 about two years ago. For example, we inaugurated a new facility in Pittsburgh with JM steel just last month, we sell.

JM steel: Brady the expansion of the same facility with Jane and steel and tripling annual capacity.

Daniel S. Shugar: Today, we are in an excellent strategic position globally, with manufacturing partners operating more than 80 facilities with bespoke Nextracker dedicated production equipment in many of them. We're raising the bar even higher. Just a few weeks ago, we launched the industry's first low carbon tracker solution with up to 35% lower carbon footprint and announced sales orders from leading customers. Initially offered in the United States, the low carbon tracker solution includes life cycle assessment documentation using a third-party verified analysis of environmental benefits. Nextracker has also achieved a carbon footprint label certification issued by the Carbon Trust for its NX-Horizon low carbon track.

Next Tracker: Today, we are in an excellent strategic position globally with manufacturing partners operating more than 80 facilities with be spoke next tracker dedicated production equipment and many of them.

Next Tracker: We're raising the bar even higher just a few weeks ago, we launched the industry's first low carbon tracker solution with up to 35% lower carbon footprint and announced sales orders from leading customers.

Next Tracker: Initially offered in the United States the low carbon tracker solution includes lifecycle assessment documentation using third party verified analysis of environmental benefits.

Next Tracker: <unk> also achieved a carbon footprint label certification issued by the carbon trust for Nx horizon low carbon tracker.

Daniel S. Shugar: And we've doubled down on innovation. Over the last two years, we've doubled our R&D investments to drive product development and allow for global expansion. Fiscal 24 was a key investment year, as we built out product groups, program management teams, sales, and engineering teams. We also began a third global R&D center for solar excellence in India, complementing our existing R&D facilities in Brazil and headquarters in Silicon Valley. These centers all have dedicated labs and teams co-located with field testing and piloting of products and solutions. And finally, we've trained over 1000 solar workers in five of our PowerWorks training academies around the world. Our training programs include tracker installation, commissioning, and operations and maintenance.

Next Tracker: And we've doubled down on innovation over the last two years, we've doubled our R&D investments to drive product development and allow for global expansion fiscal 'twenty four was a key investment year as we built out product groups program management teams sales and engineering teams.

Next Tracker: We also began a third global R&D center for solar excellence in India, complementing our existing R&D facilities in Brazil and headquarters in Silicon Valley. These centers all have dedicated labs and teams co located with field testing and piloting of products and solutions and.

Next Tracker: And finally, we've trained over 1000 solar workers in five of our power works training academies around the world. Our training programs include tracker installation commissioning and operations and maintenance. This is a value added service for our Epc's owners and developers and we are helping elevate the solar sector.

Daniel S. Shugar: This is a value-added service for our EPCs, owners, and developers, and we're helping elevate the solar sector with skilled workers. We believe our technologies, protected by over 500 issued and pending patents, enable our customers to achieve the best financial returns because they operate at the lowest levelized cost of energy. We further believe this is achieved because our systems generate more energy and are lower cost to operate and lower risk across a wide range of extreme weather, including wind, hail, and flooding.

Next Tracker: With skilled workers.

Next Tracker: We believe our technologies protected by over 500 issued and pending patents enable our customers to achieve the best financial returns because they operate at the lowest level <unk> cost of energy.

Next Tracker: We further believe this was achieved because our systems generate more energy and our lower cost to operate and lower risk across a wide range of extreme weather, including wind hail and flooding.

Daniel S. Shugar: We also recognize that our activities can have an impact on the environment. In our recently published Environmental Policy, we outline our commitment to managing operations in an environmentally responsible manner. Providing a safe workplace for our people and our partners is one of our core values, which is why I'm pleased that we earned the ISO 45001 certification for our safety management system during the fiscal year, achieving the latest global occupational health and safety accreditation. I will now provide a market update.

Next Tracker: We also recognize that our activities can have an impact on the environment in our recently published environmental policy, we outline our commitment to managing operations in an environmentally responsible manner.

Next Tracker: Providing a safe workplace for our people and our partners is one of our core values, which is why I'm pleased that we earned the ISO 45001 certification for our safety management system during the fiscal year, achieving the latest global occupational health and safety accreditation.

Next Tracker: I will now provide a market update.

Daniel S. Shugar: Solar deployments continue to accelerate in most of the world because solar is the lowest cost option for new power. As we discussed on our last call, the U.S. Energy Information Administration is forecasting solar to be the fastest growing energy technology with a 26% compound annual growth over the next five years and becoming the number one energy source within a decade. Nextracker's history of 30% CAGR over the last five years reflects favorably on the EIA forecast, as does our strong backlog.

Next Tracker: Solar deployments continued to accelerate in most of the world because solar is the lowest cost option for new power.

Next Tracker: As covered on our last call. The U S energy information administration is forecasting solar to be the fastest growing energy technology with a 26% compound annual growth over the next five years and becoming the number one energy source within a decade.

Daniel S. Shugar: On prior earnings calls, we've had questions regarding sector headwinds and interconnection permitting and other areas. We noted that these headwinds can be real for any given project or customer but that the total universe of projects and customers has grown such that, in totality, the market continues strong growth. We thought it would be helpful to put some numbers to that using our largest market, which is the U.S. In our slides, you will find analysis from the U.S. Department of Energy's Lawrence Berkeley labs that pull source data from U.S. independent system operators related to the U.S. pipeline.

Next Tracker: Next trackers history, a 30% CAGR over the last five years reflects favorably on the EIA forecast as does our strong backlog.

Next Tracker: On prior earnings calls, we've had questions regarding sector headwinds in interconnection permitting and other areas. We noted that these headwinds can be real for any given project or customer, but that the total universe of projects and customers has grown such that in totality. The market continued strong growth we thought it would be helpful to put some numbers.

Next Tracker: To that using our largest market, which is the U S.

Speaker Change: In our slides you will find analysis from the U S Department of Energy's Lawrence, Berkeley labs that pull source data from U S independent system operators related to the U S pipeline.

Daniel S. Shugar: The result is that solar totally dominates planned power with 60% of the current Q positions. Nearly 7,000 solar projects have Q positions in the U.S., with solar and solar plus storage comprising about 1500 gigawatts of new capacity. For context,

Next Tracker: The result is that solar totally dominates planned power with 60% of the current queue positions nearly 7000 solar projects have key positions in the U S with solar and solar plus storage comprising about 1500 gigawatts of new capacity for context.

Howard J. Wenger: The new solar and solar plus storage projects have more total capacity than the entire existing US power generation sector. This Q-position analysis by DOE provides graphic proof that solar and storage are leading the US energy transition. Solar dwarfs Q-positions for natural gas by an astounding factor of 25 times, and there are zero new nuclear or coal plants in the queue. This trend is not a strictly US phenomenon, rather a global phenomenon.

Next Tracker: The new solar and solar plus storage projects have more total capacity than the entire existing U S power generation sector.

Next Tracker: This Q position analysis by Doa provides graphic proof that solar and storage are leading the U S energy transition.

Next Tracker: Solar dwarfs queue positions for natural gas by net sounding factor of two five times.

Next Tracker: And there are zero, new nuclear or coal plants in the Q.

Next Tracker: This trend is not a strictly U S phenomenon, rather a trend of multiple regions globally solar is leading global energy capacity additions and solar economics have never been more favorable.

Howard J. Wenger: Solar is leading global energy capacity additions, and solar economics have never been more favorable. As the world transitions to renewable energy, Nextracker is increasingly well positioned in the solar power ecosystem to drive growth. Now, I'll turn the call over to Howard Wenger, our president, to expand on our commercial progress and product.

Next Tracker: As the world transitions to renewable energy next trackers increasingly well positioned in the solar power ecosystem to drive growth.

Speaker Change: Now I'll turn the call over to Howard Wenger, our president to expand on our commercial progress and our products.

Howard J. Wenger: Thank you, Dan. We indeed had an outstanding Q4 and full fiscal year, setting revenue records for both U.S. and international segments. We continue to see solid demand globally with significant orders where we have tracker fleets operating in nearly 40 countries. Our backlog at the end of Q4 reached a new record of over $4 billion; backlog has increased every quarter since our IPO in February 2023. In fact, we have more than tripled our backlog in just two years. Our robust backlog is supportive of our fiscal year 25 guidance, as backlog is defined to a strict standard of executed contracts or purchase orders with deposits, Bill of Materials, and project-specific ship dates.

Howard J. Wenger: Thank you Dan we indeed had an outstanding Q4 and full fiscal year setting revenue records for both U S and international segments.

Howard J. Wenger: We continue to see solid demand globally with significant orders, where we have tracker fleets operating in nearly 40 countries.

Howard J. Wenger: Our backlog at the end of Q4 reached a new record of over $4 billion.

Next Tracker: Backlog has increased every quarter since our IPO in February 2023 in fact, we have more than tripled our backlog in just two years.

Next Tracker: Robust backlog is supportive of our fiscal year 'twenty five guidance as backlog is defined to a strict standard of executed contracts or purchase orders with deposits below.

Next Tracker: Bill of materials and project specific ship dates.

Howard J. Wenger: Q4 bookings remain strong globally. In the U.S., we achieved record bookings for Fiscal 24 by focusing on EPC partners and booking individual projects, as well as continued strategic alignment with developers and owners. Moreover, our accelerated U.S. supply chain expansion equipped us with domestic content capabilities that are tailored well to what our customers need, and now we have even more local supply capacity to pave the way for future growth. We are pleased to announce that we achieved record bookings internationally for the year as well, including sizable customer contracts in India, Australia, Europe, and Brazil. A few international milestones are noteworthy this year.

Next Tracker: Q4 bookings remained strong globally in the U S. We achieved record bookings for fiscal 'twenty four by focusing on EPC partners and booking individual projects as well as continued strategic alignment with developers and owners.

Next Tracker: Moreover, our accelerated U S supply chain expansion equipped us with domestic content capabilities that tailored well to what our customers need and now we have even more local supply capacity to pave the way for future growth.

Howard J. Wenger: We booked our largest European project ever, a 550 megawatt power system in Greece. And we booked our largest ever Horizon XTR project at over one gigawatt in KSA, or the Kingdom of Saudi Arabia. And we have bookings in six new countries: South Africa, Colombia, Hungary, New Zealand, Romania, and Sweden.

Next Tracker: We are pleased to announce that we achieved record bookings internationally for the year as well, including sizable customer contracts in India, Australia, Europe and Brazil.

Next Tracker: A few international milestones are noteworthy for the year we.

Next Tracker: We booked our largest European project ever a 550 megawatt power system in Greece.

Next Tracker: And we booked our largest ever Horizon X T. Our project at over one gigawatt in KSA or kingdom of Saudi Arabia.

Next Tracker: And we.

Next Tracker: We had bookings in six new countries.

Speaker Change: South Africa, Colombia, Hungry, New Zealand, Romania, and Sweden.

Howard J. Wenger: Now let me address the price environment. As I said on the last call, I can't stress enough that trackers are highly engineered products that factor in conditions such as soil and foundation requirements. Current and Future Land Use, Topography, Wind Speeds, Panel Type, Extreme Weather, and Local Permit Needs Codes and Standards. Trackers are the backbone of any solar power system that needs to deliver energy for 30 years or more, withstanding the elements throughout. We believe there has been a continued flight to quality even as pricing continues to be competitive.

Speaker Change: Now, let me address the price environment.

Speaker Change: As I've said on the last call I can't stress enough.

Speaker Change: That trackers are highly engineered products that factor in conditions, such as soil and foundation requirements.

Speaker Change: Current and future land use topography wind speeds panel type extreme weather and local permit needs codes and standards.

Speaker Change: Trackers are the backbone of any solar power system that needs to deliver energy for 30 years or more.

Speaker Change: Withstanding elements throughout.

Speaker Change: We believe there has been a continued flight to quality, even as pricing continues to be competitive.

Howard J. Wenger: We strongly believe that Nextracker offers the highest quality and most reliable product on the market with the lowest install cost, the lowest operating cost, the highest production, and the best technology and engineering. We further believe this results in Nextracker delivering the lowest LCOE and the highest financial returns for plan owners with unsurpassed quality and durability that discerning buyers appreciate. Finally, we believe that reductions in solar power system costs and pricing are a healthy dynamic.

Speaker Change: We strongly believe that next tracker offers the highest quality and most reliable product on the market with the lowest install cost lowest operating cost.

Speaker Change: Production and best Technology and engineering.

Speaker Change: We further believe this results in next tracker delivering the lowest L. Coa and highest financial returns for plant owners with unsurpassed quality and durability. The discerning buyers appreciate.

Speaker Change: Finally, we believe that reductions in solar power system costs and pricing is a healthy dynamic.

Howard J. Wenger: As the solar industry continues to scale, costs along the entire value chain have dramatically decreased, resulting in solar being among the most competitive generation technologies. Lower solar energy pricing has driven a rapidly increasing TAM, and, as Dan noted, solar is now the most installed form of new power generation. This is a very exciting dynamic and growth opportunity considering that solar is less than 5% of all global electricity generation. Nextracker's innovation and cost reduction programs have enabled us to be increasingly competitive while our volumes expand as the global power sector transitions to renewable energy.

Speaker Change: As the solar industry continues scaling costs, along the entire value chain have dramatically decreased resulting in solar being among the most competitive generation technologies.

Daniel S. Shugar: Lower solar energy pricing has driven a rapidly increasing tam and as Dan noted solar is now the most install form of new power generation.

Speaker Change: This is a very exciting dynamic and growth opportunity considering that solar is less than 5% of all global electricity generation.

Speaker Change: Next trackers innovation and cost reduction programs have enabled us to be increasingly competitive while our volumes expand as the global power sector transitions to renewable energy.

Howard J. Wenger: In summary, we had a very successful year strengthening customer partnerships, capturing new business, and delivering a record year of bookings, backlog, and revenue. We finished fiscal 24 with 68% of total revenue from the US and 32% from the rest of the world.

Speaker Change: In summary.

Speaker Change: We had a very successful year in strengthening customer partnerships, capturing new business and delivering a record year of bookings backlog and revenue.

Howard J. Wenger: And we had double-digit year-over-year growth in most regions, demonstrating again our global scale and expansion, where we have over 300 active projects around the world. Let me now transition to products and solutions and our innovation progress. First, let's discuss our Intelligent Energy Yield Maximization software, TrueCapture. I'm pleased to report we saw continued increases in customer adoption in fiscal 2024 with record true capture bookings and backlog. Since TrueCapture was created, we have led the industry with over 300 projects and reached over 50 gigawatts deployed or under fulfillment.

Speaker Change: We finished fiscal 'twenty four was 68% of total revenue from the U S and 32% rest of world and we had double digit year over year growth in most regions demonstrating again, our global scale and expansion, where we had over 300 active projects around the world.

Speaker Change: Let me now transition to products and solutions and our innovation progress.

Speaker Change: First let's discuss our intelligent energy yield maximization software true capture.

Howard J. Wenger: True Capture has been extensively validated by third-party engineers and is generally a meaningful driver of improved energy yield and LCOE for power plant owners. And True Capture is the gift that keeps on giving to our customers as we provide over-the-air updates to automatically upgrade existing True Capture projects with subsequent enhancements.

Speaker Change: I am pleased to report we saw continued increases in customer adoption in fiscal 2024 with record true capture bookings and backlog.

Speaker Change: Since two capture was created we have led the industry with over 300 projects and reaching over 50, gigawatts deployed or under fulfillment.

Speaker Change: True capture has been extensively validated by third party engineers and is generally a meaningful driver of improved energy yield and L. Coa for power plant owners.

Speaker Change: And true capture is the gift that keeps on giving to our customers as we provide over the air updates to automatically upgrade existing true capture projects with subsequent enhancements in.

Howard J. Wenger: In parallel, we continue to invest in desktop, cloud, and mobile software that helps improve commissioning times, enables robust control and measurement of our trackers, and generally enhances our customers' experience. Now, shifting to Horizon XTR, the industry's most deployed and proven all-terrain solar tracker, first delivered in calendar year 2019 and with more than 90 utility-scale projects operating or in development. We've had an excellent response from our customers, reaching a cumulative 15 gigawatts deployed or under fulfillment in Q4. And we booked the largest XTR project in fiscal 24, a world record first for the industry, a one gigawatt project for a train following tracker.

Speaker Change: In parallel we continue to invest in desktop cloud and mobile software that helps improve commissioning times enables robust control and measurement of our trackers and generally enhances our customers experience.

Howard J. Wenger: Horizon XTR was developed to drastically reduce time-consuming and costly project site grading, and our XTR tracker can also allow for soil settlement and subsidence. This past fiscal year, we doubled the undulation capability of Horizon XTR to conform to even more sloping terrain, opening up even more solar siding possibilities. Unknown soil conditions and uneven terrain present unique risks for developers and owners.

Speaker Change: Now shifting to horizon STR, the industry's most deployed and proven altering solar tracker.

Speaker Change: First delivered in calendar year, 2019, and with more than 90 utility scale projects operating or in fulfillment.

Speaker Change: We've had an excellent response from our customers, reaching a cumulative 15 gigawatts deployed or under fulfillment in Q4.

Speaker Change: And we booked the largest xdr project in fiscal 'twenty for a world record first for the industry of a one gigawatt project for a train following tracker.

Speaker Change: Horizon STR was developed to drastically reduce time consuming and costly project site grading.

Speaker Change: And our Xdr tracker can also allow for soil settlement and subsidence.

Speaker Change: This past fiscal year, we've doubled the insulation capability of horizon STR to conform to even more sloping terrain opening up even more solar siting possibilities unknown soil conditions and uneven train present unique risk for developers and owners.

Howard J. Wenger: XTR can de-risk projects by moving less earth and deploying shorter piles, which can reduce costs and mitigate soil erosion, leaving valuable topsoil intact for future farming use. Now, let's address severe weather. There has been an increased prevalence of extreme weather around the world. We believe we have the industry's most capable and responsive tracker for severe weather, equipping owners with operational tools for mitigating risk. For example, a number of utility-scale solar systems have experienced hail damage. Hail damage depends on many factors, including hail size, wind speed, and direction, panel glass thickness and construction, tracker tilt angle, and operator actions.

Speaker Change: <unk> can derisk projects by moving lessor, and deploying shorter piles, which can reduce cost and mitigate soil erosion.

Speaker Change: Leaving valuable topsoil intact for future farming use.

Howard J. Wenger: In response, Nextracker collaborated with customers to develop an industry-first hailstone technology that has helped mitigate risk, with initial deployments three years ago. This year alone, Nextracker already has documented hundreds of successful hailstos in Texas through the use of our software. So far, in calendar year 24,

Speaker Change: Lets now address severe weather.

Speaker Change: There has been an increased prevalence of extreme weather around the world.

Howard J. Wenger: Of the 27 Texas projects that were subjected to hailstorms and had our NX Navigator and HailSTO installed, none of them reported hail damage. To address the most extreme hail, Nextracker developed a next-generation, fully-automated hailstone technology, which we announced in September 2023, called HailPro, with up to a 75-degree rotation angle. Our hailstone functionality at a high 75-degree angle can mitigate risk by dramatically reducing the probability of panel breakage. We plan to have our initial deployments later this year.

Speaker Change: We believe we have the industry's most capable and responsive tracker for severe weather.

Speaker Change: Equipping owners with operational tools for mitigating risk.

Speaker Change: For example, a number of utility scale solar systems have experienced hail damage.

Speaker Change: Hail damage depends on many factors, including hail size wind speed and direction panel glass thickness and construction.

Speaker Change: Tracker tilt angle and operator actions.

Next Tracker: In response next tracker collaborated with customers to develop an industry first <unk> technology that has helped mitigate risk with initial.

Speaker Change: Deployments three years ago.

Next Tracker: This year alone next tracker already has documented hundreds of successful hailstones in Texas through the use of our software.

Speaker Change: So far in calendar year 'twenty four.

Speaker Change: Of the 27, Texas projects that were subjected to Hailstorms and had our Nx navigator and hailstone installed.

Speaker Change: None of them reported hail damage.

Speaker Change: To address the most extreme hail next tracker developed a next generation fully automated hailstone technology, which we announced in September 2023 called Hail pro with up to a 75 degree rotation angle or.

Speaker Change: Our hailstone functionality at a high 75 degree angle to mitigate risk by dramatically, reducing the probability of panel breakage.

Speaker Change: We plan to have our initial deployments later this year.

Howard J. Wenger: With respect to flooding, our NX Horizon tracker is designed above the floodplain with self-powered architecture in which sealed gears, controllers, and motors are all mounted to the steel torque tube itself. This elevated design configuration typically provides a minimum flood clearance of three feet.

Speaker Change: With respect to flooding.

Speaker Change: Our Nx horizon tracker is designed above the floodplain with self powered architecture in which sealed gears controllers and motors are all mounted to the steel torque tube itself.

Speaker Change: This elevated design configuration typically provides a minimum flood clearance of three feet.

Howard J. Wenger: Our NX Navigator control system has flood stow functionality that can stow to a safe position with a single press of a button by plant operators or can automatically stow when equipped with flood sensors. Now, moving to wind engineering, which is vital to trackers. We recognize early on that applying minimum static pressure wind design code standards to solar trackers is inadequate. We pioneered characterization of dynamic wind forces and solar rays, including phenomena such as torsional galloping, over the last decade, publishing white papers and webinars since 2019.

Speaker Change: Our Nx navigator control system has floods stove functionality that can stow to a safe position with a single press of a button by plant operators or can automatically stowe when equipped with floods sensors.

Wyndham: Now moving to Wyndham engineering, which is vital to trackers. We recognized early on that applying minimums static pressure when design code standards to solar trackers is inadequate.

Wyndham: We pioneered characterization of dynamic wind forces in solar arrays.

Jonathan Mark Windham: Including phenomenon, such as torsional galloping over the last decade publishing white papers and Webinars since 2019.

Howard J. Wenger: This fundamental research, combined with full-scale outdoor field testing at the National Renewable Energy Laboratory in Colorado, was integrated into our product. As a result, Nextracker and X-Horizon systems have had no substantial wind failures over the last seven years. On multiple sites and occasions around the world, Nextracker systems have endured extreme wind events reliably, while adjacent competitive tracker systems suffered extensive and widespread damage.

Speaker Change: This fundamental research combined with full scale outdoor field testing at the National renewable Energy Laboratory in Colorado was integrated into our products.

Speaker Change: As a result next tracker Nx horizon systems have had no substantial win failures over the last seven years.

Speaker Change: On multiple sites and occasions around the world.

Speaker Change: Next tracker systems have endured extreme wind events reliably while adjacent competitive tracker system suffered extensive and widespread damage.

Howard J. Wenger: Customers understand that engineering and technology really matter. We believe we are driving the gold standard for solar trackers, and this is being rewarded with repeat customer orders. Our unrivaled inventions and technologies in mechanics, electronics, and software help customers de-risk projects and improve project economics, while expanding geographic areas where solar is cost-effective. Our catalog of positive attributes earned and proven over many years translates into what we believe is the most bankable product with the lowest levelized cost of energy.

Speaker Change: Customers understand that engineering and technology really matter.

Speaker Change: We believe we are driving the gold standard for solar trackers and this is being rewarded with repeat customer orders are.

Speaker Change: Our unrivaled inventions in technologies, and mechanics electronics and software help customers Derisk projects and improve project economics, while expanding geographic areas, where solar is cost effective.

Speaker Change: Our catalog of positive attributes earned and proven over many years translates into what we believe is the most bankable product with the lowest level is cost of energy.

Howard J. Wenger: In summary, we are immensely proud of our team's execution and milestones achieved this past year, and we are ready to take on and deliver a strong fiscal 2025. Now I turn the call over to Dave Bennett, our Chief Financial Officer, to review the financials. Dave?

Speaker Change: In summary, we are immensely proud of our team's execution and milestones achieved this past year.

And we are ready to take on and deliver a strong fiscal 2025.

Speaker Change: Now I'll turn the call over to Dave Bennett, Our Chief Financial Officer to review financials, Dave.

David P. Bennett: Thank you, Howard. Before I start, I'd like to remind everyone that all references to financial performance, except for revenue, are non-gap adjusted, and all growth rates are year-over-year unless otherwise stated. As a reminder, our Q4 non-GAAP results exclude the IRA 45x benefits recognized in the current quarter for GAAP purposes. The results for Q4 and fiscal year 2024 both set new records, delivering double-digit growth for the top line and triple-digit growth for profit.

David P. Bennett: 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.

David P. Bennett: As a reminder, our Q4 non-GAAP results exclude the IRA forty-five ex benefits recognized in the current quarter for GAAP purposes.

The results for Q4 and fiscal year 2020 for both set new records delivering double digit growth for the top line and triple digit growth for profits.

David P. Bennett: Starting with our quarterly results. Q4 was our fifth consecutive quarter of year-over-year growth since the IPO. Revenue closed at $737 million, up 42%, driven by 27% growth in the U.S. market and 89% growth in the rest of the world. Q4's revenue mix was 67% U.S. and 33% rest of world. There was strong execution by our teams and progressing projects on schedule this quarter, and we did not encounter weather delays that often impact deliveries in the last two weeks of the quarter.

David P. Bennett: Starting with our quarterly results.

David P. Bennett: Q4 was our fifth consecutive quarter of year over year growth since the IPO revenue closed at $737 million.

David P. Bennett: 42% driven by 27% growth in the U S market and 89% growth in the rest of the world.

David P. Bennett: Q4 is revenue mix was 67% U S and 33% rest of world.

Speaker Change: There was strong execution by our teams in progressing projects to plan this quarter and we did not encounter weather delays that often impact deliveries in the last two weeks of the quarter.

David P. Bennett: Gross margins for the quarter expanded by just over 10 percentage points from the prior year to 30% as a result of strong execution on our contracts, continued efforts optimizing our supply chain, and exercising consistent pricing discipline. Adjusted EBITDA for Q4 was $160 million. An increase of 87 million, or 120% growth. Our Q4 EBITDA margin of 22% was up nearly 800 basis points from the prior year. Adjusted diluted earnings per share was 96 cents in the quarter.

Gross margins for the quarter expanded by just over 10 percentage points from the prior year to 30% as a result of strong execution on our contracts continued efforts optimizing our supply chain.

Speaker Change: And exercising consistent pricing discipline.

Speaker Change: Adjusted EBITDA for Q4 was $160 million.

Speaker Change: An increase of $87 million or 120% growth.

Speaker Change: Our Q4 EBITDA margin of 22% was up nearly 800 basis points for the prior year.

Adjusted diluted earnings per share was <unk> 96 cents in the quarter.

David P. Bennett: Turning to full year results, fiscal year 24 was our third consecutive year of double-digit revenue growth. Revenue was $2.5 billion, up 31%, with the U.S. representing 68% of the mix and the rest of the world at 32%. Despite some quarterly variations and mix throughout the year, overall, very balanced 30% plus growth across both markets, full year gross margins expanded to 28% as a result of our strong execution. As well as our success in achieving structural enhancements to our business throughout the year, which included optimizing our global supply chain and increasing our localized content offering, resulting in lower material and logistics costs on top of faster lead times. Gross margins also benefited from a larger U.S. mix, which on average carries a higher pricing range and margin profile compared to the rest of the world.

Speaker Change: Turning to full year results.

Speaker Change: Fiscal year 'twenty four was our third consecutive year of double digit revenue growth.

Speaker Change: Revenue was $2 5 billion up 31% with the U S representing 68% of the mix and the rest of the world at 32%.

Speaker Change: Despite some quarterly variations in mix throughout the year overall, very balanced 30% plus growth across both markets.

Speaker Change: Full year gross margins expanded to 28% as a result of our strong execution as well as our success in achieving structural enhancements to our business throughout the year, which included optimizing our global supply chain and increasing our localized content offering <unk>.

Resulting in lower material and logistics costs on top of faster lead times.

Speaker Change: Gross margins also benefited from a larger U S mix, which on average carries a higher pricing range and margin profile compared to the rest of the world.

David P. Bennett: Turning to Operating Expenses, which includes R&D, we have strategically increased these costs by $83 million, or 86%, as we continue to invest in our growth, innovation, and stand-alone public company infrastructure post-spend-from-flex. Going forward, we expect to maintain our investment in operating expenses at between 7 and 8% of revenue. Full year adjusted EBITDA was $521 million, an increase of $312 million, or 150% growth, establishing a new annual record for the company. We have more than doubled our EBITDA dollars in the last year. The full year adjusted EBITDA margin of 21% was up nearly 10 percentage points from the prior year. Adjusted diluted earnings per share was $3.06 for the year.

Speaker Change: Turning to operating expenses, which includes R&D expense, we have strategically increased these costs by $83 million or <unk>, 86% as we continue to invest in our growth innovation and stand alone public company infrastructure post spin from flex.

Speaker Change: Going forward, we expect to maintain our investment in operating expenses at between seven and 8% of revenue.

Speaker Change: Full year, adjusted EBITDA was $521 million, an increase of $312 million or 150% growth, establishing a new annual record for the company.

Speaker Change: We have more than doubled our EBITDA dollars in the last year.

Speaker Change: Full year adjusted EBITDA margin of 21% was up nearly 10 percentage points from the prior year.

Adjusted diluted earnings per share was $3 <unk> for the year.

David P. Bennett: As previously stated, the separation from PLEX increased our public float by approximately 74 million shares, but did not impact our diluted EPS. Adjusted free cash flow was $113 million for the quarter and $427 million for the year, driven by strong networking capital management, customer deposits, and higher EBIT. Networking capital at the end of Q4 was approximately 16% of trailing 12 months revenue, which was slightly above our expected 10 to 15% levels, primarily due to the recognition of $126 million of vendor rebate receivables recorded in conjunction with the IRA 45X incentive that I will cover shortly.

Speaker Change: As previously stated the separation from <unk> increased our public float by approximately 74 million shares.

Speaker Change: Did not impact our diluted EPS.

Speaker Change: Adjusted free cash flow was $113 million for the quarter and $427 million for the year driven by strong networking capital management customer.

Speaker Change: Deposits and higher EBITDA.

Speaker Change: Net working capital at the end of Q4 was approximately 16% of trailing 12 months revenue.

Speaker Change: Which was slightly above our expected, 10% to 15% levels, primarily due to the recognition of a $126 million of vendor rebate receivables recorded in conjunction with the IRA 45 ex incentive that I will cover shortly.

David P. Bennett: Our high-quality balance sheet, cash flow generation, and ample liquidity remain competitive advantages. We closed the quarter with $474 million in total cash, which is greater than three times our total debt of $150 million. Total liquidity at the end of Q4 was over $800 million.

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

Speaker Change: We closed the quarter with $474 million in total cash.

Speaker Change: Which is greater than three times, our total debt of $150 million.

Speaker Change: Total liquidity at the end of Q4 was over $800 million.

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. Our financial strength supports our capital allocation strategy, with the following key highlights. Our capital deployment is focused on enabling growth. Free cash flow conversion is expected to be greater than 70%, excluding M&A.

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

Speaker Change: Our financial strength supports our capital allocation strategy with the following key highlights.

Speaker Change: Our capital deployment is focused on enabling growth.

Speaker Change: Free cash flow conversion is expected to be greater than 70% excluding M&A.

David P. Bennett: We are in a net cash position, and our current debt to EBITDA ratio is less than one as we are committed to maintaining a differentiated capital structure. Under the current framework, we will evaluate future M&A with discipline, and would expect investments to be funded through our operating cash flows and incremental debt capacity, if required. In the short term, given our projected growth and limitations with our previous flex spinout structure, we are currently not planning to execute on a dividend or a share buyback program.

Speaker Change: We are in a net cash position and our current debt to EBITDA ratio is less than one as we are committed to maintaining a differentiated capital structure.

Speaker Change: Under the current framework, we will evaluate future M&A with discipline.

Speaker Change: And would expect investments to be funded through our operating cash flows and incremental debt capacity if required.

Speaker Change: In the short term given our projected growth and limitations with our previous flex spinout structure we.

Speaker Change: We are currently not planning to execute on a dividend or a share buyback program.

David P. Bennett: Let me now transition to the IRA 45x benefit considerations for Nextracker. We have developed valuable relationships with our critical vendors and have successfully executed multiple supply agreements, many exclusive to Nextracker. As previously stated, the IRA 45x incentives currently earned are in the form of a rebate from our vendors. The key objective is to reduce the cost of materials to enable domestically made products to be more cost competitive with imports. So far, we have achieved our objective of reducing the cost of materials. Let me provide some details.

Speaker Change: Let me now transition to the IRA 45 X benefit considerations for next tracker.

Speaker Change: We have developed valuable relationships with our critical vendors and have successfully executed multiple supply agreements many exclusive to next tracker as.

Speaker Change: As previously stated the IRA 45 ex incentives currently earned or in the form of a rebate from our vendors.

Speaker Change: The key objective is to reduce cost of materials to enable domestically made products to be more cost competitive with imports.

Speaker Change: So far we have achieved our objective of reducing the cost of materials let.

Speaker Change: Let me provide some details during the fourth quarter of fiscal 2024.

David P. Bennett: During the fourth quarter of fiscal 2024, we recorded a cumulative adjustment to recognize 45x vendor rebates on production of eligible components shipped to projects after January 1, 2023. As of the end of Q4, we recognized $126 million in other current assets related to the rebate receivable from our vendors, of which $121 million was recognized as a reduction in GAAP cost of sales. The remaining $5 million was deferred as of year end to be recognized as a reduction in cost of sales in fiscal 2025. The $121 million gap cost of sales reduction exceeded our previously anticipated range of $50 to $80 million in Q4, mainly due to increased volume and a final assessment of the contractual terms impacting the timing of realization.

Speaker Change: We recorded a cumulative adjustment to recognize 45 X vendor rebates on production of eligible components shipped two projects. After January one 2023.

Speaker Change: As of the end of Q4, we recognized $126 million and other current assets related to the rebate receivable from our vendors of which 121 million was recognized as a reduction in GAAP cost of sales.

The remaining $5 million was deferred as of year end to be recognized as a reduction to cost of sales in fiscal 2025.

Speaker Change: The $121 million GAAP cost of sales reduction exceeded our previously anticipated range of $50 million to $80 million in Q4, mainly due to increased volume and final assessment of the contractual terms impacting the timing of realizations.

David P. Bennett: Our fiscal 2025 guidance that I will share next includes the estimated IRA 45X benefits. As we previously communicated, we are operationalizing the IRA 45x incentive into our procurement process and financial reporting system. Therefore, we believe the 45x benefits should be reported with our consolidated financial results for fiscal 2025 and moving forward. Our structural margin has increased from the mid-20s to the high-20s for fiscal 2025. This expected increase factors in the 45x benefits.

Speaker Change: Our fiscal 2025 guidance that I will share next includes the estimated Irey 45 X benefits as.

Speaker Change: As we previously communicated.

Speaker Change: We are operationalized, the IRR 45, ex incentive into our procurement process and financial reporting systems.

Speaker Change: Therefore, we believe the 45 X benefits should be reported with our consolidated financial results for fiscal 2025 and moving forward.

Speaker Change: Our structural margin has increased from the mid <unk> to the high <unk> for fiscal 2025.

Speaker Change: This expected increase factors in 45 X benefits variations in regional and customer mix and.

David P. Bennett: Variations in Regional and Customer Mix, and expected pricing pressure that may lower ASPs. The 45X benefit is one element that lowers the cost of our trackers and is used in combination with other elements including cost downs, lower logistics costs, and maximizing local content.

Speaker Change: And expected pricing pressure that may lower asps.

Speaker Change: The 45 X benefit is one element that lowers the cost of our trackers and is used in combination with other elements, including cost downs.

Speaker Change: Lower logistics costs and maximizing local content.

David P. Bennett: All of which come together in the form of lower LCOE that, along with pricing discipline, supports our confidence in our structural margin profile. As always, we encourage you to evaluate Nextracker on an annual basis to reflect the nature of our large-scale project. Therefore, we will not provide quarterly guidance, but we will provide top line comments as guideposts. Based on the current timing of the project.

Speaker Change: All of which come together in the form of lower Coa that along with pricing discipline supports our confidence in our structural margin profile.

Speaker Change: As always we encourage you to evaluate next tracker on an annual basis to reflect the nature of our large scale projects.

Speaker Change: Therefore, we will not provide quarterly guidance.

Speaker Change: But we will provide topline comments as guideposts.

Speaker Change: Based on the current timing of projects Q1 fiscal 2025 year over year revenue growth is expected in the range of 25% to 30%.

David P. Bennett: Q1 fiscal 2025 year-over-year revenue growth is expected in the range of 25 to 30 percent. Our fiscal 2025 guidance is as follows. We expect revenue in the range of 2.8 to 2.9 billion. At the midpoint, we are expecting approximately 14% growth year over year. We expect adjusted EBITDA in the range of 600 to 650 million. At the midpoint, we are expecting approximately 20% growth year over year and an implied EBITDA margin of approximately 22%.

Speaker Change: Our fiscal 2025 guidance is as follows.

Speaker Change: We expect revenue in the range of $2 eight to $2 9 billion at the midpoint, we are expecting approximately 14% growth year over year.

Speaker Change: We expect adjusted EBITDA in the range of $600 million to $650 million at.

Speaker Change: At the midpoint, we're expecting approximately 20% growth year over year.

Speaker Change: And an implied EBITDA margin of approximately 22%.

David P. Bennett: GAP EPS is expected to be between $2.41 to $2.61 per share and includes approximately 48 cents related to stock-based compensation and intangible amortization. Adjusted EPS is expected to be between $2.89 to $3.09 per share based on 153 million weighted average shares outstanding. Net interest and other expense is expected to be between $15 to $20 million. We expect the fiscal year adjusted income tax rate to range between 20% to 25%.

Speaker Change: GAAP EPS is expected to be between $2 41.

Speaker Change: To $2 61 per share and includes approximately 48 related to stock based compensation.

Speaker Change: And intangible amortization.

Speaker Change: Adjusted EPS is expected to be between $2 89.

Speaker Change: To $3 <unk> per share.

Speaker Change: Based on $153 million weighted average shares outstanding.

Speaker Change: Net interest and other expense is expected to be between $15 million to $20 million.

Speaker Change: We expect the fiscal year adjusted income tax rate to range between 20% to 25%.

Daniel S. Shugar: I will now turn the call back to Dan for his concluding remarks. Okay, Dan? Thank you, Dave. I'm so proud of our team and what we accomplished last year. We're excited that this new year is off to a great start, and we look forward to advancing the clean energy transition with our customers and partners. Lastly, on behalf of the company and the board, we want to thank Dave Bennett for his significant contribution to Nextracker.

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

Speaker Change: Dan.

Daniel S. Shugar: Thank you Dave I'm, so proud of our team of what we've accomplished last year.

Daniel S. Shugar: And we're thrilled to have him continue as our Chief Accounting Officer. Our new Chief Financial Officer, Chuck Boyden, is expected to join Nextracker later this month, and we look forward to Chuck and Dave leading our fabulous finance and accounting team. Now, I'll pass the call back to the operator.

Daniel S. Shugar: We're excited that this new year is off to a great start and we look forward to advancing the clean energy transition with our customers and partners lastly on behalf of the company and the board we want to thank Dave Bennett for his significant contribution to next tracker and we're thrilled to have them continue as our chief accounting officer, our new Chief Financial Officer.

Chuck Boynton as expected joined next tracker later this month and we look forward to Chuck and Dave, leading our Fabulous finance and accounting teams.

Speaker Change: We now look forward to your question, let me pass the call back to the operator.

Speaker Change: Okay.

Speaker Change: Thank you.

Operator: We will now begin the Q&A session. If you would like to ask a question, please press star followed by one on your telephone keypad. If you would like to remove a question, press star followed by one. And if you are using a speakerphone... Please pick up your handset before asking your question. Our first question today comes from Praneeth Satish with Wells Fargo. Please proceed.

Speaker Change: We will now begin the Q&A session.

Speaker Change: If you would like to ask a question. Please press star followed by one on your telephone keypad.

Speaker Change: If you'd like to remove that question press star followed by Tim.

Speaker Change: And if you are using a speakerphone. Please pick up your handset before asking a question.

Speaker Change: Our first question today comes from <unk> with Wells Fargo.

Operator: Please proceed.

Praneeth Satish: Thanks. Maybe I could start on the backlog here. Another impressive quarter.

Speaker Change: Maybe if I could start on the backlog here another impressive quarter can you give us your latest forecast for converting that into revenue are you seeing kind of the conversion cycle elongate I think you've mentioned in the past that it typically <unk>.

Howard J. Wenger: Can you give us your latest forecast for converting that into revenue? Are you seeing kind of a conversion cycle elongation? I think you've mentioned in the past that typically, the majority converts to revenue within a 12 month window. So just trying to see if there's any changes to that pattern or kind of a shift towards projects with extended timelines.

Speaker Change: Geordie converts to revenue within a 12 month window. So just just trying to see if there's any changes to that pattern or kind of a shift towards projects with extended timelines.

Howard J. Wenger: This is Howard Wenger. Thanks for the question. Yeah, we're pleased with the growth of our backlog. Typically, it results in revenue in two to eight quarters, and most of that in two to five quarters.

Speaker Change: This is Howard Wenger. Thanks for the question, Yes, we're pleased with the growth of our backlog.

Speaker Change: Typically it is.

Speaker Change: Salt in revenue and two to eight quarters.

Howard J. Wenger: And most of that in two to five quarters.

unknown: Got it. Okay.

Howard J. Wenger: Got it okay.

Speaker Change: And then maybe just.

Speaker Change: Switching to the guidance here on 45 X credits.

unknown: And then maybe just switching to the guidance here on 45x credits. Can we assume, based on the guidance, that some of that benefit, the 45x credit, is going to be shared with customers based on the way you worded it in the form of potentially ASP reductions? Just trying to unpack the difference between 30% gross margin this quarter and the high 20% gross margin for the guidance. And how much of that is based on 45x versus sharing with customers?

Speaker Change: Can we assume that based on the guidance that some of that benefit. The 45 ex credit is going to be shared with customers.

Speaker Change: Based on the way you worded it.

Speaker Change: In the form of potentially.

Speaker Change: ASP reductions just trying to unpack.

Speaker Change: The difference between 30% gross margin this quarter to high 20% gross margin for the guidance and how much of that is based on 45 X versus sharing with customers.

unknown: Sure, statement. I'll take that, and then Howard can supplement it. The structural rate that you spoke about, we did increase based on a lot of factors. One of those is the fact that we do have a lower-cost BOM as a result of the 45X credit. That's just one of the things we do, and we spoke about it as we moved through fiscal 24 into our guide for fiscal 25. We've also optimized our supply chain.

Speaker Change: Sure.

Speaker Change: David and I will take that and then Howard can supplement.

Speaker Change: <unk>.

Howard J. Wenger: The structural rate that you spoke about we did increase.

Speaker Change: Based on a lot of factors one of those is the fact that we do have a lower cost is VOM as a result.

Speaker Change: 45 ex credit.

Speaker Change: That's just one of the things we use and we spoke about it as we move through fiscal 'twenty four into our guide for fiscal 'twenty. Five we've also optimized our supply chain, we also need to exercise consistent pricing discipline all of those come together.

unknown: We also need to exercise consistent pricing discipline. All of those things come together. So in the end, the pricing element is set not necessarily specifically to share the 45X. It's a combination of what we put together. We're very focused on maintaining the price that we put out and ensuring the structural margin at the growth margin level in the high 20s would get you to a 22% midpoint EBITDA. So that's all baked in. Howard, I don't know if you have anything to add.

Speaker Change: So in the end the pricing element is said not necessarily specifically to share to <unk> 45 acts as a combination of what we put together.

Speaker Change: We're very focused on maintaining the price that we put out in ensuring the structural margin at the gross margin level in the high <unk>.

Speaker Change: Which gets you to a 22% midpoint EBITDA.

Speaker Change: So that's all baked in Howard I don't know if you have anything to add.

Howard J. Wenger: The only thing I'd add is that the 45X credit is doing what it's set out to do as a policy mechanism, which is to onshore and reshore the supply chain to the United States. We've done that.

I would add is that the 45 ex credit is doing what it set out to do as a policy mechanism, which is to onshore and reassure supply chain to the United States. We've done that we have over 20 facilities.

Howard J. Wenger: We have over 20 facilities now that are manufacturing components in the United States, so we've really domesticated our product, and it's a mechanism to equilibrate the costs of the local supply chain to what we would have done by importing the product internationally. So it's working. And of course, we're innovating, we're driving down costs, which we need to do, and we are lowering prices over time in a disciplined manner because that's what the solar industry has done for the last 10 years.

Speaker Change: That our manufacturer components in the United States, So we really domesticated our product.

Speaker Change: It's a mechanism to <unk>.

Speaker Change: We will operate the costs.

Speaker Change: This local supply chain to what we would have done.

Speaker Change: By importing the product internationally. So it's working and of course, we're innovating, we're driving down costs, which we need to do and we are lowering price over time in a disciplined manner because thats what the solar industry has done for the last 10 years as Dan showed in his.

Howard J. Wenger: As Dan showed in his remarks and showed graphically in the presentation, how big the solar industry has become now, and it is the dominant form of energy in the interconnection queues, bigger than the total installed capacity that's serving the US market. So these policies are working, and the way we got there to this picture was by driving cost out, scaling up, and lowering the price of solar energy for customers. And that's going to continue.

Daniel S. Shugar: Or what he mentioned in his remarks and showed in graphically in the presentation is how big the solar industry has become now.

Speaker Change: And it is the dominant form of energy in the interconnection shoes.

Speaker Change: Bigger than the total install capacity that serve in the U S market.

Speaker Change: These policies are working.

Speaker Change: Yes.

Speaker Change: And the way, we got there to that picture was by driving cost out scaling up and lowering the price of solar energy to customers and thats going to continue.

unknown: Got it. Thank you. And congrats to Dave and Chuck.

Speaker Change: Got it thank you and congrats to Dave and Chuck.

Speaker Change: Thank you.

unknown: Our next question today comes from Philip Shen with Roth M.K.M. Please begin.

Speaker Change: Our next question today comes from Philip Shen with Roth <unk>. Please.

Philip Shen: Please begin.

Speaker Change: Yes.

Philip Shen: Hey guys, thanks for taking the questions. Congratulations on a strong quarter. You guys have had, I think, five quarters in a row, since you've been a publicly traded company of about a billion bookings a quarter. This quarter was very strong. It seems like at least 1.2 billion. What do you expect for next quarter and the quarter beyond? And how long do you think you can keep this going? And then, as it relates to the structural margins, can you talk about the 1.2 billion? from FQ4. Would you say that those bookings were, you know, had high 20s gross margins, or is there a chance they're different from what the FY25 guide looks like? Thanks, guys.

Speaker Change: Hey, guys. Thanks for taking the questions congrats on the strong quarter.

Speaker Change: You guys have had.

Speaker Change: I think five quarters in a row.

Speaker Change: Since you've been a publicly traded company.

Speaker Change: That $1 billion.

Speaker Change: Bookings a quarter.

Speaker Change: This quarter.

Speaker Change: It was very strong it seems like at least $1 2 billion.

Speaker Change: What do you expect for next quarter and the quarter.

Speaker Change: Beyond.

Speaker Change: And how long.

Speaker Change: Do you think you can keep this going.

Speaker Change: And then as it relates to the structural margins.

Speaker Change: Can you talk about for the $1 2 billion.

Speaker Change: From F Q4.

Speaker Change: Would you say that those bookings were had.

Speaker Change: The high Twenty's gross margins or.

Speaker Change: Is there a chance.

Speaker Change: They are different from what the FY 'twenty guidance it looks like thanks guys.

Howard J. Wenger: Thanks for the question, Phil. I'm not going to confirm or deny the $1.2 billion, but I will confirm that we did book more than $1 billion in the quarter. And so we are happy with our performance. It's consistent with the previous quarters, as you've mentioned. And as far as the macro going forward, the market's really strong. You saw what's in the interconnection queue. Our pipeline continues to be robust. I know you like that word. And it's the truth. Demand is strong in the US. It's also strong in multiple regions around the world.

Speaker Change: Thanks for the question Phil.

Speaker Change: The I'm not going to confirm or deny the $1 2 billion, but I will confirm that we did book more than $1 billion in the quarter.

Speaker Change: And so we are happy with our performance.

Speaker Change: Consistent with the previous quarters as you've mentioned.

Speaker Change: As far as the macro going forward the market's really strong you saw within the interconnection queue.

Speaker Change: Our pipeline continues to be robust I know you'd like that word.

Speaker Change: Yes.

Speaker Change: It's the truth.

Demand is strong in the U S. It's also strong in multiple regions around the world.

unknown: As for the margin question, we're not guiding to that or providing more color on that at this time. And we really aren't giving guidance for bookings and going forward, but we appreciate the question. Dave, did you have anything else you wanted to add? No, Phil, I mean you're...

Speaker Change: As far as the margin question.

Speaker Change: Not.

Speaker Change: We're not guiding to that are providing more color on that at this time.

Speaker Change: We really.

Speaker Change: Are not giving guidance for bookings.

Phil: Going forward, but I appreciate the question David you have anything else you wanted to know Phil I mean, your you hit it we're looking at the entire year for the margin the weighted across all quarters.

unknown: No, Phil, I mean, you hit it. We're looking at the entire year for the margin that is awaited across all quarters. Certainly, we execute on cost downs quarter over quarter, and we're going to continue to do that. So the profitability as these roll out may be on a different cost base. So all in, we've given the full weighted margin for the year of fiscal 25. And we're committed to that higher structural margin, which is approaching that 30% gross margin.

Speaker Change: Certainly we executed on cost downs quarter over quarter. So we're going to continue to do that.

Speaker Change: All of the profitability.

Speaker Change: These roll out maybe on a different cost base. So all in we've given the full weighted margin for the year or fiscal 'twenty five.

Speaker Change: We're committed to that higher structural margin, which is approaching that 30% gross margin.

Speaker Change: Okay.

Philip Shen: Great, thanks, guys. Shifting over to the overall industry, you know, with the Southeast Asia, ADCVD, I was wondering if you've seen any impacts at all in your conversations with customers? I know you talked about the number of projects being strong and the queue being large, but I was wondering if you see risk at all with the industry slowing down given the number of headwinds that the industry is facing.

Speaker Change: Great. Thanks, guys shifting over to.

Speaker Change: The overall industry.

Speaker Change: With the southeast Asia.

Speaker Change: CVD.

Speaker Change: I was wondering if you could if you've seen any impacts at all in your conversations with customers.

Speaker Change: I know you talked about.

Speaker Change: The number of projects being strong in the queue.

Speaker Change #100: Large but was wondering if you see risk at all with the industry slowing down given the number of headwinds that.

Speaker Change #100: The industry is facing.

Daniel S. Shugar: Hey, Phil.

Daniel S. Shugar: Hey Philip, Dan Shugar. We haven't seen that Issue and Pat philosophy in the market or book Demand is strong. Last week, there was the American Clean Power event in Minneapolis. We had other events. I didn't hear any customers bring that up.

Speaker Change #101: Hey, Phil and sugar.

Speaker Change #102: We haven't seen that.

Speaker Change #103: Issue impact.

Speaker Change #105: Velocity in the market or bookings.

Speaker Change #104: Demand is strong.

Speaker Change #106: Last week, there with the American clean power.

Speaker Change #107: In Minneapolis, we add other events I didn't hear any customers, bringing that up.

Philip Shen: Great. Okay. Thanks, Dan. I'll pass it on.

Speaker Change #107: Okay, great. Okay. Thanks, Dan I'll pass it on.

Thanks, Paul.

Speaker Change #107: Okay.

Brian K. Lee: Our next question today comes from Brian Lee with Goldman Sachs. Please proceed.

Speaker Change #107: Our next question today comes from Brian Lee with Goldman Sachs. Please proceed.

Speaker Change #108: Hey, guys.

Brian K. Lee: Thanks for taking my questions. Kudos on the nice execution.

Brian K. Lee: Yeah, Thanks for taking my questions and kudos on the nice execution.

Brian K. Lee: First one, just going back to the backlog, I appreciate Howard the greater than billion dollar bookings disclosure here. So obviously, you did book to bill well over one billion in the quarter. Is that true of both the US and international markets? And then related to that, I guess the last two years, the US and rest of the world sales mix has been consistent at around 70 to 30%. Is that what you'd expect in fiscal 25? Or do you see either geo growing faster this year?

Brian K. Lee: First one just going back to the backlog I appreciate Howard.

Brian K. Lee: The greater than 1 billion dollar bookings disclosure here. So obviously you had a book to bill well over one in the quarter is that true of both the U S and international and then related to that I guess, the last two years U S and rest of world sales mix has been consistent at around 77%.

Howard J. Wenger: And then how to follow

Brian K. Lee: 30% is that what you would expect in fiscal 'twenty five or do you see either geo growing faster. This year and then I had a follow up.

unknown: Yeah, thanks. This is Howard again. The answer is that, as far as the last part of your question, we've been remarkably consistent as a company with the two-thirds, one-third. If you look at the history of hitting this 100 gigawatt milestone, two-thirds of that was shipped to the U.S., and one-third to international customers, roughly. And we're seeing that quarter-by-quarter, year-on-year, year-over-year. So, we expect that same mix going forward. We see strong growth in both markets, meaning the rest of the world and the U.S., and don't see that shifting out, or the ballots going one way or the other. Both are growing at roughly the same pace.

Brian K. Lee: Yes. Thanks This is Howard again.

Speaker Change #110: The answer is that as far as the last part of your question, we've been remarkably consistent as a company with a two thirds one third if you look at the history.

Speaker Change #111: Hitting this 100 gigawatt milestone two thirds of that was shipped to.

Speaker Change #111: The U S and one third to international roughly so and we're seeing that quarter by quarter year on year year over year. So we expect that same mix going forward, we see strong growth in both markets, meaning rest of world in the U S.

Speaker Change #111: And don't see that shifting out.

Speaker Change #111: Or.

Speaker Change #111: Off the balance going one way or the other both are growing at roughly the same pace.

Speaker Change #111: Okay.

Brian K. Lee: Okay, growth in both areas. That's good to hear. And then just to follow up on the margins and the IRA credits discussion here again, Dave, you mentioned during your remarks that there was 60 million, roughly more in IRA credits recognized and guided at the midpoint. So I guess I wanted to dive into that a little bit. I would have expected maybe more EBITDA growth, apples to apples, on the mid-teens revenue growth you're guiding for in fiscal 25, you know, when we're including the IRA impact for both 24 and 25.

Speaker Change #111: Growth in both areas. That's good to hear and then just a follow up on.

Speaker Change #111: The margins in the IRI credits discussion here again, Dave you mentioned during your remarks that.

Dave: There was 60 million roughly more than IRI credits recognized the guide at the midpoint. So.

Dave: I guess.

Dave: I wanted to dive into that a little bit.

Speaker Change #112: I would've expected, maybe more EBITDA growth apples to apples on the mid teens revenue growth youre guiding for in fiscal 2005, when my including the IRS impact for both 2025, so how much of that pull forward is coming out of 25 million to 24, you would have otherwise recognized over the next 12 months and then how much.

Brian K. Lee: So how much of that, you know, pull forward is coming out of 25 into 24 you would have otherwise recognized, you know, over the next 12 months and then, you know, how much of this, you know, it may be it's just the pricing and passing through more of the credit that you mentioned during your remarks as well. Understand, yeah, let me be very clear. None of it.

Speaker Change #113: Maybe it's just the pricing and passing through more of the credit that you mentioned during your remarks as well. Thank you guys.

Speaker Change #112: Okay.

David P. Bennett: Understand. Yeah, let me be very clear. None of it was pulled into 24 from 25. Okay.

Speaker Change #114: I understand yes.

Speaker Change #115: Let me be very clear none of it was pulled into 'twenty four from 25, okay.

David P. Bennett: The B relative to what we guide was simply due to the evolving of kind of the second half of my prepared remark sentence was in final determination of the realization. You'll see that others deferred a larger portion than we did and determining that element was what was kind of uncertain at the time we did the guidance. We kind of, and then also beat with higher revenues as we did for Q4.

Speaker Change #116: The beat relative to what we guided was simply due to the evolving of kind of the second half of my prepared remark sentence was and final determination of the realisation youll see that others differed.

Speaker Change #117: For a larger portion that we did in determining that element was what was kind of uncertain at the time, we did the guidance we kind of and then also we need with higher revenues as we as we did for Q4, so thats really driving the incremental amount in terms of fiscal 'twenty, five and a minus as we've been talking about.

David P. Bennett: So that's really driving the incremental amount in terms of fiscal 25 and the amount of sales we've been talking about. 45X is part of our combination of elements we use to lower the cost. It's a meaningful part of it, but it's not the only part. Along with what we expect to have some pricing pressures that are normal that Howard spoke of, all of those come together. So to some extent, it is covering some of that pricing pressure to maintain the margin and increase it if I could ask.

Speaker Change #118: 45, <unk> is part of our.

Speaker Change #118: Combination of elements, we used to lower the cost it's a meaningful part of it it's not the only part along with what we expect to have some pricing pressures that are normal that Howard spoke to all of those come together so to some extent.

Speaker Change #118: As covered covering some of that pricing pressure to maintain the margin.

Speaker Change #119: And increase it if I if I could add.

Speaker Change #119: Okay.

unknown: Thank you for the question.

Speaker Change #120: Thank you for the question.

Mark Wesley Strouse: Our next question today comes from Mark Strouse with J.P. Morgan.

Our next question today comes from Mark Strouse with JP Morgan.

Speaker Change #121: These proceed.

Mark Wesley Strouse: Yeah, hey guys, thanks for taking my question. I apologize for the background noise here. I want to go back to Phil's question on ADCVD. Assuming that there is an investigation and

Mark Wesley Strouse: Yeah, Hey, guys. Thanks for taking my question and I apologize for the background noise here.

Mark Wesley Strouse: I wanted to go back to Phil's question on 80 CVD.

Speaker Change #123: Assuming that there is an investigation and some of your customers might be looking to switch the type of panels that they are using can you talk about how easy that process is does that result in a.

unknown: Some of your customers might be looking to switch the type of panels that they are using.

Mark Wesley Strouse: Yes.

Speaker Change #124: A change order.

Speaker Change #125: With you and if so can you talk about who is responsible for bearing that that's something that you would share with the customer.

Speaker Change #125: Yep.

unknown: Can you talk about how easy that process is? Does that result in a change order with you? And if so, can you talk about who's responsible for bearing that? Is that something that you would share with the customer? Are they on the hook for that? Hey Mark, it's Dan Shugar.

Speaker Change #126: Hey, Mark and sugar thanks.

Daniel S. Shugar: Thanks for the question. I'll point out that First Solar is a much larger part of the US supply position today than it has been in the recent past. That sort of thing we want. Thing two, there's been a homogenization around the mechanical size of crystalline solar panels over the last few years. There are basically two classes of panels, the 700 watt class and the 600 watt class or 550 watt class solar panels. So whether it's Nextracker or a different tracker, usually, when you're laying out a system, you need to know, is it the first solar panel? Is it the lower power class of crystalline power or the higher power?

Speaker Change #127: Thanks for the question.

Speaker Change #127: I'll point out that first solar has a much larger part of the U S supply position today than it has been in recent past.

Speaker Change #128: That sort of thing one.

Speaker Change #129: Thank you there's been no homogenization around the mechanical five crystal and solar panels.

Speaker Change #129: Over the last few years, there's basically two classes of panels.

Speaker Change #129: Yeah.

Speaker Change #130: The I'll call. It 700 Watt class at the 605 class or $5 50, while class solar panels.

Speaker Change #131: Whether its next tracker a different tracker.

Speaker Change #132: <unk> when youre laying out a system.

Speaker Change #132: You need to know is it the first solar is it.

Speaker Change #133: The lower power class of Crystal empower are the higher power plant.

Daniel S. Shugar: The other thing I'd point out is that we are making substantially more, well the vast majority of the tubes that are going to U.S. projects are happening in the United States. Our lead time is short. Our flexibility is higher. We just don't see that type of switch being an issue or imposing a significant cost on the customer.

Speaker Change #134: The other thing I'd point out is that we.

Speaker Change #134: We are making substantially.

Speaker Change #134: The vast majority of the tubes that are going to U S projects.

Speaker Change #134: Are happening in the United States.

Speaker Change #134: Our lead time is short.

Speaker Change #134: Our flexibility is higher.

Speaker Change #135: And we.

Speaker Change #135: We just don't see.

Speaker Change #136: That type of switch being an issue for closing a significant cost on the customer.

unknown: It would be my high-level response to that question. Okay, okay. Thanks, Dan. And then just a real quick follow up. I'll take the rest offline.

Speaker Change #137: It would be my high level response to that question.

Speaker Change #138: Okay. Okay. Thanks, and then just a real quick follow up I'll take the rest offline last quarter you talked about.

unknown: I'll take the rest offline. Last quarter you talked about... curious if that's still happening or if you're back to normal yet. Thank you.

Speaker Change #138: Okay.

Speaker Change #139: Curious if that's still happening you are back to normal.

unknown: I'm sorry, you faded out for just a sec, Mark, you said last quarter, and then we lost you for a second. Yeah, I'm so sorry.

Speaker Change #140: Thank you I'm, sorry, you faded out for just a SEC marquee set last quarter and then we lost you for a second.

unknown: Just an update. Last quarter you talked about the Red Sea rerouting some of your shipping. Is that still happening, or are you back to normal? And that it's a non-material issue for our results this last quarter in line with our plan.

Speaker Change #141: Yes, Im sorry, Im sorry, just an update last quarter, you talked about the Red Sea rerouting. Some of your shipping is that still happening or are you back then.

Speaker Change #142: That said non material issue.

Speaker Change #143: For our results this last quarter for our plan.

Mark Wesley Strouse: Thanks Mark.

Speaker Change #144: Got it okay. Thank you.

unknown: Thank you for your questions. We do ask, in the interest of your time going forward, that you please limit yourself to one question each to get through the queue. Our next question today comes from Vikram Bagri with Citi. Please proceed.

Speaker Change #145: Thank you for your question.

Speaker Change #146: We do ask in the interest of good time going forward that you. Please limit yourself to one question each to get through the queue.

Our next question today comes from Vikram <unk> with Citi.

Vikram Bagri: Please proceed.

Vikram Bagri: Good afternoon, everyone. Dan, you mentioned, and we know you've been beating estimates since going public, which is very impressive. When you look ahead, what catalysts do you think could play out that would make you exceed revenues or margin this fiscal year? There are a number of topics on our mind that can make you exceed those targets, whether it's, you know, higher conversion or faster conversion of backlog, or higher IRA credits that you're taking in. Just wanted to see when, from your vantage point, what catalysts do you have on top of mind, which would make you exceed the guidance?

Speaker Change #148: Good afternoon, everyone, Dan you mentioned.

We know you've been beating estimates.

Public which is very impressive.

Speaker Change #149: When you look ahead what catalyst.

Daniel S. Shugar: Things could play out that could make you exceed revenues of margin. This fiscal year. The number of topics on our mind, which can make you exceed those targets.

Targets, whether it's.

Speaker Change #150: Higher conversion of posture conclusion of backlog Hyatt <unk> credits.

Speaker Change #151: Good just wanted to see like win from your vantage point, what catalysts do you have on top of mind, which would make you exceed the guidance and related to that.

Daniel S. Shugar: And related to that, your peers have indicated that in their backlog, they have not shared 45x credits with any of their customers yet. It's not in their contracts yet. Is that true for you guys as well? Thank you.

Speaker Change #153: Orders have indicated that in the backlog they have not shared qualify VIX credits with any of your customers. It's not in their contracts yet is that true for you guys as well.

Speaker Change #152: Thank you.

Daniel S. Shugar: Hey Vikram, Dan Sugar. Thank you for your question. Look, we've covered on prior calls that there are a lot of tailwinds in the sector. But the way we roll at Nextracker is we establish plans that are resilient to be able to endure unknowns, and then we want to be able to perform reliably. So are there any number of tailwinds that could allow the plan to be exceeded? Definitely.

Speaker Change #154: Hey, Vikram Dan Sugar. Thank you for your question.

Speaker Change #155: Look we've covered on prior calls there are a lot of tailwind for the sector.

Speaker Change #156: But the way we roll. It next tracker is we established plans that are resilient to be able to endure unknown.

Speaker Change #157: And then we want to be able to perform reliably. So are there any number of tailwind that could allow the plan to be exceeded definitely.

Daniel S. Shugar: But we're building a robust plan and managing the business to be able to meet or exceed performance. With respect to 45x credit, Howard commented that the motivation for those was to really focus on on-shoring. Look, I really want to point out something we covered on a prior call, which is that most of the projects being done in the US today are predicated on much smaller investment tax credits, typically in the 10% region.

But we're building a robust plan and managing the business to be able to meet or exceed performance with respect to <unk> 45 acts.

Speaker Change #157: Credit.

Speaker Change #157: Howard commented what the motivation of those was was to really focus with onshore look I really want to point out something we covered off on a prior call which is.

Speaker Change #157: That <unk>.

Speaker Change #157: Most of the projects being done in the U S. Today were predicated on <unk>.

Speaker Change #157: Much smaller investment tax credits typically in the 10% region there.

Daniel S. Shugar: They're now 30%, in some cases, 40%. So the developer owners are enjoying that significant benefit of the increased credit and that you know, which is an order of magnitude plus higher than what we're talking about for the 45. So that's our common.

Speaker Change #157: There are now 30% in some cases, 40%.

Speaker Change #158: So the.

Speaker Change #159: Develop our owners are enjoying that significant.

Speaker Change #159: Benefit and the increased credit.

Speaker Change #160: And that's it.

Speaker Change #161: Which is.

Order of magnitude plus higher than what we're talking about for the 45 back.

Speaker Change #161: So that's our comment on that.

Christine Cho: Next question, please. Yes, our next question comes from Christine Cho with Barclays. Please proceed.

Speaker Change #162: Next question please.

Speaker Change #162: Yes. Our next question comes from Christine Cho with Barclays. Please proceed.

Christine Cho: Good evening. Thank you for taking my question.

Thank you Alan and welcome can put formal cross song.

Christine Cho: So could you give us an idea that's.

Christine Cho: Breakdown of your BCA non BCA rest of rock on the left in your backlog.

Christine Cho: And when we think about pricing pressure that you mentioned.

Speaker Change #164: Based on your comments it sounds like you've already bolted onto your contracts, but how much of that will depend.

Speaker Change #165: Unlike our competitors.

Speaker Change #166: Is there some extra cost.

Speaker Change #166: Okay.

Speaker Change #167: We'll talk about being disciplined on pricing.

Speaker Change #168: You are talking about high quality growth.

Speaker Change #169: So how do you define quite disciplined around pricing, whereas the right level that you Wouldnt go below.

Howard J. Wenger: So, could you give us an idea of the breakdown of your VCA, non-VCA, rest of world, and U.S. orders in your backlog? And when we think about the pricing pressure that you mentioned at the end of the year, based on your comments, it sounds like you've already baked it into your contracts, but how much of it will depend on what your competitors are doing? Is there some extra cushion here?

Speaker Change #169: Howard Wenger here, thanks for the questions.

Christine Cho: Christine so.

Speaker Change #170: We are not breaking out VCA.

Speaker Change #171: And our backlog why because we have a strict standards for backlog, which the VCA as me.

Howard J. Wenger: And they are just considered part of our backlog like any other contract or purchase order.

Howard J. Wenger: They contain deposit specific project name specific ship dates.

Howard J. Wenger: And so.

Howard J. Wenger: And our commitment.

Speaker Change #172: A binding commitment so.

Speaker Change #173: We're not breaking it out for that reason the backlog is backlog.

Howard J. Wenger: You guys always talk about being disciplined on pricing, and you're talking about high 20s growth margin. So, how do you define being disciplined on pricing? Where's the right level that you wouldn't go below?

Speaker Change #174: As far as pricing and so forth every project is.

Speaker Change #175: This different and you have to think about these projects.

Speaker Change #176: They are on the order of 150, 200 $300 million $500 million of investment.

Speaker Change #177: And we comprise.

Speaker Change #178: Less than 10%.

Speaker Change #178: These projects.

Speaker Change #179: Most of these projects.

Speaker Change #180: So being the backbone of the system.

Speaker Change #181: Being so critical to the operation of the plant for 30 years plus.

Speaker Change #182: Quality durability, really really matter and discerning buyers really paid attention to track record and.

Third party validation of all of the claims that a company like next tracker and others may.

Speaker Change #182: So.

Speaker Change #183: That said it is.

Speaker Change #184: Competition works.

Speaker Change #185: And capitalism works.

Speaker Change #186: We want to continue to.

Speaker Change #187: Drive costs down.

<unk> prices down over time for our customers. So we can increase the total Tam and Thats exactly what were doing and Thats, what we plan on doing.

Howard J. Wenger: Howard Wenger here. Thanks for the questions, Christine. So We are not breaking out BCAs in our backlog. Why? Because we have a strict standard for backlog which the BCAs meet and they're just considered part of our backlog like any other contract or purchase order, because they contain deposits, specific project names, specific ship dates, um and and so uh in a commitment uh a binding commitment so uh we're not breaking it out for that reason backlog is backlog As far as pricing and so forth, every project is different, and you have to think about these projects.

Speaker Change #188: Really appreciate the question. Thank you.

Speaker Change #189: Next question please.

Howard J. Wenger: They're on the order of $150, $200, $300 million, $500 million of investment. And we comprise less than 10% of the cost of these projects. So, being the backbone of the system, being so critical to the operation of the plant for 30 years plus, quality, durability really, really matter, and discerning buyers really pay attention to the track record and third-party validation of all of the claims that a company like Nextracker and others make.

Daniel S. Shugar: Yes, Sir our next question comes from Dan <unk> with Wolfe Research. Please proceed.

Howard J. Wenger: So, that said, competition works, and capitalism works, and we want to continue to drive costs down and prices down over time for our customers so we can increase the total TAM. And that's exactly what we're doing, and that's what we plan on doing. I really appreciate the question. Thank you.

Daniel S. Shugar: Yeah, Hey, everyone. Good evening.

Daniel S. Shugar: I just wanted to go back to the revenue guidance relative.

Daniel S. Shugar: The backlog so if I look at the 2020 for your initial guidance range and kind of compare that to a backlog of $2 six at the time I mean, obviously you ended up beating raising and you end up realizing almost 100% of that backlog, but just comparing that to the guidance for this year relative to the backlog.

Speaker Change #190: Where it seems like there is some conservatism embedded in there just can you just provide any color on where exactly that the b or anything that would kind of make last year different from this year. Thank you.

Dylan Asana: Yes, our next question comes from Dylan Asana with Wolf Research. Please proceed.

John: Hi, John Yes, I think.

Speaker Change #192: Howard just really kind of touched on this with the <unk>.

Speaker Change #193: It's about individual projects and their timing too.

Howard J. Wenger: Delivery and the content of our backlog.

Speaker Change #194: We consider VCA is an EPC contract.

Speaker Change #194: The same in that backlog now so relative to the rollout Howard touched on it at a 2% to eight quarter.

Dylan Asana: Yeah. Hey, everyone. Good evening.

unknown: Um, I just want to go back to the revenue guidance relative to, uh, the backlog. So if I look at 2024, your initial guidance range, and kind of compare that to the backlog of 2.6 at a time, I mean, obviously, you ended up beating rates. And you end up realizing almost 100% of that backlog. But just comparing that to the guidance for this year relative to the backlog, where I mean it seems like there's some conservatism embedded in there. Can you just provide any color on where exactly that would be or anything that would kind of make last year different from this year? Thanks.

Cliff: Cliff I think in the past that is not meaningfully different but the specific projects that are in that backlog and the timing to shift now and that really is what supports our guide and keep in mind. Our guide has historically, we've proven to you guys that we do factor in the headwinds that can happen.

Cliff: I spoke to it every quarter, we kind of factor in a little conservatism relative to weather and other things in logistics may happen does that push individual deliveries out that may impact our achieving a number so we've factored that into our guidance and overall I think you can see the strong backlog at <unk>.

unknown: Hi Dylan. Yeah, I think Howard just really kind of touched on this with the, you know, it's about individual projects and their timing to delivery and the content of our backlog that we consider VTAs and EPC contracts the same in that backlog now. So relative to the rollout, Howard touched on it at a two to eight quarter. Cliff.

unknown: I think in the past, that's not meaningfully different, but the specific projects that are in that backlog have a timing to shift now, and that really is what supports our guide. And keep in mind, our guide historically, we've proven to you guys that we do factor in the headwinds that can happen. I speak to it every quarter; we kind of factor in a little conservatism relative to weather. And other things in logistics may happen that push individual deliveries out that may impact our achieving a number. So we've factored that into our guide. And overall, I think you can see the strong backlog of over $4 billion certainly supports the guidance range.

Speaker Change #196: A record over $4 billion certainly support.

Speaker Change #196: The guidance range.

unknown: Thank you. We have time for one more question. Our final question today comes from Ahit Metloy with Mizuho. Please proceed. Hey, good evening. Thanks for taking that question. Just a question on the 45x and the guidance here. Could you just point out how much that...

Speaker Change #197: Thank you we have time for one more question.

Ahit Metloy: Our final question today comes from Mahit Metloy with Mizuho. Please proceed.

Speaker Change #198: Our final question today comes from Mohit met Loy with Mizuho. Please proceed.

Speaker Change #199: Hey, good evening. Thanks for taking the question just a question on the 45 <unk> in the guidance here could you just point to how much that would.

Speaker Change #200: Not suggests it could be somewhere around $100 million I'm, just trying to understand the.

Speaker Change #200: Doug.

Speaker Change #201: Gross margin, excluding the vendor credit.

Speaker Change #201: So you kind of talked about those mid <unk> gross margin. It seems like it's still like I said, but just wanted to double check that thank you.

David P. Bennett: Sure. Thanks for the question. The 45x and I've kind of been speaking to this, it's just one of the elements that lowers our cost. It is interchangeable with other elements that lower our costs, so we don't really, and we don't really plan on breaking that out going forward. For Fiscal 24, we were not guiding to it. The accounting was uncertain. The treatment was uncertain from the treasury.

Sure. Thanks for the question.

Speaker Change #202: 45, exon economists speak into this is just one of the elements that lowers our cost.

Speaker Change #202: It is a.

Speaker Change #203: Interchangeable with other elements that are our costs. So we don't really and we don't really plan on breaking that out going forward for fiscal 'twenty four.

Speaker Change #203: We were not guiding to it the accounting was uncertain. The treatment was uncertain from the treasury. So that was one element we kept separate from our 24 result, but going into fiscal 'twenty five.

Daniel S. Shugar: So that was one element we kept separate from our 24 results. But going into fiscal 25, it's absolutely operationalized with our procurement systems, our financial systems, and is included in our guide, including, and it was a driver in increasing that structural gross margin profile from the mid-20s up to the high-20s. And that's something we expect to be able to sustain over time. And the 45X credit, to the extent we receive it, is going to be part of that. That's kind of the extent of what we're going to be breaking it out with, though. This is Dan Sugar.

Speaker Change #204: Absolutely operationalized with our procurement system, our financial system and is included in our guide, including and there was a driver and increasing that structural gross margin profile from the mid <unk> up to the high quality and Thats, something we expect to be able to.

Speaker Change #204: The sustained over time and the 45 ex credit to the extent, we receive it is going to be part of that.

Speaker Change #204: That's kind of the extent of what we're going to be breaking it out though.

Daniel S. Shugar: I just want to thank you, Bye. The Nextracker team, all our customers, our investors, for a fantastic year in Fiscal 24. We're really excited about the industry. We think it's a rising tide here for the industry, and for many participants. It's going to end these really pipeline numbers we're seeing in the queue are overwhelming. It's very exciting. So we're on a path here with solar to be the number one source of energy in the US and the world, and it's great to be part of it. If we didn't get to your question, apologies for that, but we will speak to you in the callbacks. Thank you very much.

Daniel S. Shugar: This is Dan sugar I just wanted to think.

Daniel S. Shugar: Hi.

Speaker Change #205: The next tracker team all our customers our investors for a fantastic year for fiscal 'twenty four.

Speaker Change #206: Excited about the industry, we think it's a rising tide here for the industry for many participants.

Speaker Change #207: It's going to add these these really pipeline.

Speaker Change #207: The numbers, we're seeing in the queue.

Speaker Change #208: Our overwhelming it's very exciting so we're on a path here with solar to be the number one toy.

Speaker Change #209: Energy in the U S and the world and it's great to be part of it.

Speaker Change #209: If we didn't get your question apologies for that but we will.

Speaker Change #210: Speak to you on the call backs. Thank you very much.

Operator: That will conclude today's conference call. Thank you all for your participation. You may now disconnect your line.

Speaker Change #211: That will conclude today's conference call. Thank you all for your participation you may now disconnect your line.