Q2 2025 Nextracker Inc Earnings Call

Ladies and gentlemen, please remain holding. Your conference call will begin shortly. Again, please remain holding. Your conference call will begin shortly.

Music

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 would like to welcome everyone in next trackers second quarter fiscal year 2025 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 conference over to Mary Lai by President of Investor Relations. Mary, you may begin.

Thank you and good afternoon everyone. Welcome to next trackers second quarter of fiscal year 2025 earnings call. I'm Mary Lai, vice president of Investor Relations.

I'm joined by Dan Shutter, RCO and founder, our Wenger, our president and Chuck Martin, our CFO. On today's call we will open with brief remarks from our CEO Dan and then immediately transition into Q&A session.

As a reminder, there will be a replay of this call, post on the IR website, along with our earnings press release and Shurholder letter.

Today's call contains statements regarding our business, financial performance and operations, including our business and our industry that may be considered for looking statements, and such statements involve risks and uncertainties that may cause actual results of different materialies from our expectations.

Sierra: 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.

Shareholder letter and our SEC filings, including our most recently filed quarterly report on form 10Q and annual report on form 10K, which is available on our IR website at investors.nextroctor.com.

This information is subject to change and we undertake no obligation to update any four-leking statements as a result of the new information, future events or changes in our expectations.

Please note we will provide gap and non-gap measures on today's call. The full non-gap-to-gap reconciliation can be found in the appendix to the press release and the shurholder letter, as well as the financial section of the IR website.

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

Thank you, Mary, and thank you all for joining our Q2 earnings call. We are very pleased with the continued strong execution by the company across the board in products, sales and operations, driving solid financial performance.

Before we cover the company's performance, I'd like to offer a few comments on the upcoming election in the United States, which is our largest market. There have been questions addressed in extract and our sector regarding the potential impact of the election on solar.

We believe our company and industry will grow regardless of election outcome. As we have steadily grown through prior democratic and republican administrations.

We believe we will be successful in any scenario because energy projects are less about politics and more about economics and solar is the lowest-class form of energy in most markets.

It's about the maturity of projects in development and the interconnection queue.

and it's about the availability of capital to finance projects with risks are considered.

in all of these areas, solar shines.

The US has a growing appetite for a new power and we believe solar and battery projects are best positioned to satisfy that need.

Further, most of the manufacturing investments, and solar power plants in the country are located in red states.

and the underpinning economic value delivered to those states is significant and real.

So much so that 18 Republican members of the House of Representatives

sent a unified letter to speaker Johnson in support of the RRA. Demonstrating again, the bipartisan support for clean energy and why we believe he elements of the inflation reduction act will persist independent of the outcome of the upcoming election.

In summary, we believe next tracker will continue to grow in the U.S. under redermenestration.

and now let's turn to our company performance.

Q2 was another quarter of strong execution, marking our 7th consecutive quarter of double-digit revenue growth year over year.

Revenue for the first half of our fiscal 25 was a record with an increase of 29% year over year.

We continue to see strong demand for products globally across all regions, driven in part by a flight to quality across a range of criteria that mattered to customers.

We strongly believe that next-tracker offers the highest quality and most reliable product on the market with the low-synth-salt cost, low-saupering cost, highest production and differentiated technology and engineering.

We believe these factors will help to drive demand and enable right to get supply.

Our team is also differentiated with sector domain expertise, a robust global supply chain that delivers products on time and a customer service ethic that measures in response to customer requirements at each phase of the customer journey.

Customers are rewarding these values with sales orders.

Our backlog increased significantly quarter of a quarter to a new record of over $4.5 billion.

and we are pleased with the margin profile of our backlog for this fiscal year and beyond. As a result of the new orders, we are raising our profit target for the full fiscal year by 20 million at the midpoint to $645 million.

We are also receiving customer orders for a new product, including an X-Hurizon XTR 1.5

and X-Ryzen Low Carving Tracker.

NXHail Pro 75 in both our new NX Foundation Technologies.

All of these products have been successfully deployed in the field. Most of these products resulted from focus-arty investments made by next tracker.

In Q2, we inaugurated our third global design facility. Next tracker, Center Solar Excellence in Hutterbot India, a 13 acre facility with a 30,000 square foot state of the art laboratory.

Our three global design labs incubate and commercialized PV technologies.

Localize for regional needs and optimized products for customer requirements as we are serving projects in over 40 countries around the world.

A few months ago, in response to customer demand, we accelerated to cue three of this year the availability of our 100% domestically manufactured tracker.

Sierra: We received customer orders for it, which will ship later this quarter. To our knowledge, we are the only tracker manufacturer that can deliver a 100% US manufacturer tracker.

This capability can provide tremendous benefits to US customers, because an enable them to achieve a much higher score on their domestic content and can enable them to capture the 10% bonus investment tax credit or ITC.

on a typical 100-megawatt system that 10% bonus IGTC can have a value to the customer of roughly $10 million, equivalent approximately to the entire cost of the tractor.

Speaker Change: Last quarter, we announced the closing of two foundation business acquisitions, which are on track to be successfully integrated by the end of the fiscal year.

at the ERAP plus North American Conference last month, we debuted our next Foundation Solutions Business.

and Customer Reception Exceeded Expectations.

We have signed new bookings orders for our Foundation Solutions and our NX Horizon Trackers in C. Roboss Pipeline for New Business.

We're excited for what our foundation solutions will do for our customers, enabling quicker, safer, and more efficient solar project development on a wide range of soil types for EPC and developer customers.

In summary, it was a great first half of Cisco 25 and we remain focused on executing our plan to achieve double-digit revenue growth for the full year.

with a raised profitability target looking forward to expect fiscal 2026 to be another growth year. Comprised of both our legacy products such as NX Horizon and the five new product offerings I just mentioned.

The customer demand for industry-leading products and our ability to execute and support customer success give us the confidence to achieve our growth supported by our grown back log.

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

Speaker Change: Thank you.

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

If you would like to ask a question, please press star, follow by one on your telephone keypad.

If you like to look at that question, press star, follow by too.

And if you are using a speaker phone, please pick up your hands that before asking your question.

In the answer to the time, we ask that you please limit yourself to one question.

Our first question today comes from Phillip Shen with Ralph Kaffle Partners. The Alliance not open.

Hi everyone, thanks for taking my questions, congrats on the very strong quarter.

One of the check-in on the bookings.

are a map suggests, uh, bookings were close to if not greater than.

of Billion for the quarter, was wondering if you could talk through what the margin profile looks like.

Speaker Change: for the bookings. Dan, I think you mentioned in your remarks that.

You were pleased with the margins, can you give us a baseline or comparison to?

The strong margins from this quarter, you know, do you think the bookings are inline with that, maybe a little lower or higher?

Speaker Change: and then when you think about the new bookings, how much of that was your new product? You know, and do you have any new MSA agreements or volume commitment orders for obligations in that backlog as well? Thanks.

Dan Howard: Thank you Phil, thanks for the multi-fats and requests and appreciate that. This is Dan Howard, can you weigh in on the post-question?

Here, I'm a pencil, this is Howard.

We have another strong order performance, both on revenue.

Dan Howard: and Daniel profitability.

and Bullgate.

and so, raising our backlog to a new record of over 4.5 billion is pretty wildstone for the company.

and the mix.

Matters in the new bookings and what's in the backlog. And what we said is...

and the two thirds of our business.

is the guy post for U.S. domestic one-third rest of the world. And we call that out because the rest of the world has some select competitive markets, such as the Middle East.

Dan Howard: which is the lowest cost.

Electrists the solar electricity market in the world.

Speaker Change: and we have pricing that's at one to two cents per kilowatt hour. And so our pricing in margins can vary and do vary by region.

What's that said, the new bookings that we have, we're very happy with the mix. It's consistent with the two thirds, one third mix that we talk about.

2-3 US, 1-3 rest of the world, and the margin profile on both of those contributions and then to the overall, is very much in line with our profitability and going forward. As far as...

the type of, do we have MSA's BCAs in the bookings in the SRS. Thank you, Phil, for your question.

Speaker Change: Our next question is, it comes from Printing Statutes with Wolf Hargom. Your line is not open.

Speaker Change: Thanks Echo Films comments on a strong quarter. You mentioned that you expect to realize 90% of the backlog in eight quarters. So I think that's...

a flight improvement from last quarter where you said you expect to realize.

80% of the backlog in eight quarters. Can you talk about what's helping shrink that timeline? Is it simply just a higher mix of international projects with a faster revenue conversion cycle? Are you seeing an improvement on the US side?

Good morning.

Speaker Change: It's both actually, we're getting orders with shorter horizons.

and that's what fed the backlog increase and caused that metric to go from 80 to 90%. 90% of expected.

Reven, if of 90% of our revenue, in fact, law we expect to recognize over the next eight quarters.

Speaker Change: and so yeah, it's an equal contribution on both with shorter cycles.

Thank you.

Our next question today goes from Mark Strauss with...

J.P. Morgan, Galais not open.

Speaker Change: Thank you very much for taking our questions and can go ask on the quarter.

on page 5 of the Shareholder Letter. You talk about double digit growth, revenue growth in fiscal 25.

but then it's growth in fiscal 26. Maybe I'm splitting hairs here, but is there a reason that you're stopping short of saying double digit growth in fiscal 26?

are you kind of just talking about the visibility that you have from your backlogs or if there's something else that you're seeing and kind of booking activity maybe that's making you think that it might be less than that will visit growth next year. Thank you.

I mark the answer to your...

will provide a lot more color on.

The FY26 revenue plant in subsequent earnings calls.

is the answer. So we'll provide more than I will just say the company has never been in a better position than it is today.

Hornet Half-Thought is ours at Back Log. We've seen Howard's covered.

3. Growth Among

and many regions around the world that it's super to have multiple regions in the world, all contributing, steady growth.

Porter, the quarter one regional B stronger than other regions. The first half of this fiscal year we saw it.

Speaker Change: and the first half of this fiscal year we saw it here.

Speaker Change: and David Bennett.

Hi, there's someone, do we found the fog natural where that's coming from?

Okay, thank you. So we saw very strong growth in higher value regions. The first half of this year, this is our fiscal year. And the second half of year is we're seeing.

Speaker Change: Stranger, Plant Shipments in Lower Value, more competitive regions as Howard mentioned the fact that the note is.

but I'm balanced. We're doing what we said we were going to do. Go we out.

Rowling with somebody double-digit growth this year, we're hitting our revenue plan and we've been able to be raised on our profitability expectations.

Speaker Change: The End

Thanks for the question.

Our next question of the day comes from Diffel Glossai with Bank of America. Your life is not open.

Hi, good evening and thanks for the question. Can you please speak a little bit about some of the competitive dynamics what we're seeing in terms of, you know, customer behavior, also a head of elections versus rushing to kind of get...

and the Domestic Product through the door. And then also a little bit about, you know, your new customer wins. Is that more in the US versus international? I think you quoted 12 or 8 new customers, sorry.

Okay, this is Howard. So what we're seeing in the market is continued very solid demand across all of our major regions.

in North America, Middle East, Africa, Latin America.

Speaker Change: You're Australia.

and Ziana. We're seeing just across the board a lot of demand and that's being driven by

The increase of demand for electricity, the electrification of the world, the centers, hyper-scalers.

Speaker Change: Electric vehicles and demand for clean energy.

Speaker Change: and so there is...

and a macro overlay on the demand picture. And the election in the United States is not dampening that from our perspective as we're showing we're increasing our backlog and delivering on our metrics.

Speaker Change: and then so. There is one thing on a customer side what we're sensing is a real flight to quality.

Speaker Change: and that's we've articulated the value proposition of the company. We have very differentiated trackers, not all trackers are protected the same. They don't operate the same.

He is a very different tracker of architecture that we believe is superior and that our customers really appreciate and then it extends from

That to operations and operational excellence.

and the bank ability of our company with a, let's chuck out a fortress balance sheet, very strong balance sheet, we $1.5 billion for today.

Speaker Change: is a company in our, these projects are very expensive. They're, I mean, they're not.

Expenses are on work. They require a lot of capital to finance.

and then produced the lowest.

Speaker Change: POS, or Revener G.

with Solar and then some with Solar and Storage. But there require a lot of capital. And so it's important for the tracker, which is the backbone of the system to operate. And so all of these things feed.

Our value proposition and what we believe is a flight of the differential for next tracker. Really appreciate the question.

Speaker Change: Hi next question, the latest Lucas trainer show with Park Lays, the online is not open.

Good evening. Thank you for taking the question. I thought maybe I would hit on margin, so you know you guys are doing well above the high 20s guidance and I realize this is the full year guide and I know you're mixed shift the U.S. is slightly higher than the two thirds year date.

and I think your Sherholder Letter also talks about software coming in better at 2%. But other than that, is there anything else you would point to to bridge the gap on?

You know, where in the cost structure you might be doing better than you expected or alternatively, anything that should bring birth margins down in the back half of this year other than the mix shifts shifting back towards rest of the world.

and just lastly when you face structural growth margin.

Can you help us better understand what that definition is? Does that mean, you know, where you think those margins will naturally settle out with Out any subsidies whether it's explicit 45 x credit or lower bill of materials offered instead of the explicit 45 x credit?

Thank you for staying Chuck Boynton here. I appreciate your question. So first of all, I'll keep wanting you to work incredibly strong for us.

Based on execution and execution is what the key word is.

We over-delivered based on our product teams, our customer service teams out in the field, delivering our projects on time with quality. And when you do that with great products, deliver on time, good things tend to happen. large and tend to be able to better than you plan.

and I'm going to talk about the new product.

Speaker Change: The second thing is we've seen a really significant uptake in true capture. True capture is the best industry-leading software that manages the power plant that drives the best sell to you in industry.

Speaker Change: Comcalfsure, Paz

Fairly High Margin's being a software and we saw a lot of systems being commissioned in Q2.

that allowed us to really accelerate margins in Q2 that will probably not repeat in Q3 and Q4. It might, but our plan is it'll be more like, you know, one to two percent. It was higher than that in Q2.

So, the third factor is 45x. We had some accumulated 45x.

Bennett gets from private reports, they've got amortized in the Q2, and that will not repeat in the back half of the year. In the letter we talked about 300 basis points of over-achievement in Q2 that are likely not to repeat in Q3 and Q4.

and then Howard mentioned the International Projects.

and the first half we had a really high share of US projects that deliver really strong margins.

Great value for our customers. The back half of the year we have some very large projects, especially in Q4.

scheduled deliveries that are in very, very competitive markets and that effectively averages out the company to effectively two-thirds one-third international U.S. mix.

The structural margin comment is really taking a step back thinking about what is the business on average if you blend out.

The model of two thirds, one third international, on average, what would the marching profile look like?

and we're saying structurally it should be in the high 20s, maybe the low 30s, but that's a comment that the companies made consistently and we've been overperforming that based on a really great execution. Thank you, Christine. Next question.

Our next question comes from Brian Lee with Goldman Sachs. He lines that open.

Hey guys, thanks, good afternoon.

He's a couple of questions I had on the software piece, you know, Chuck or Dan, can you kind of speak to, I don't know if you think about it in terms of a catch rate, but this the first time you broke out the percent of sale, it seems like it could be an opportunity going forward.

I remember talking to this at the time of the idea, I feel that was pretty small to break out. So, you know, just to sense how you guys think about it, to catch rain.

Maybe if you can quantify kind of the margin up with compared to the high 20% structural growth, where software coming in at and in situations where you aren't able to get a customer to sign up for true capture. What are some of the drivers there outside of me?

Speaker Change: [inaudible]

Speaker Change: [inaudible]

Over the long term, the attached race of true capture has increased significantly.

Speaker Change: This we first introduced True Capture, which is an adaptive tracking software about seven years ago.

Speaker Change: It's operating in all our major regions around the world.

There are two monology over 300 projects that have been commissioned with True Capture. We work with all the leading independent engineers that value True Capture.

Speaker Change: And...

Speaker Change: from Capture has been empirically validated in the field. What does that mean?

Demi, we've gone out there and measured it and customers have become increasingly comfortable with true capture.

Speaker Change: Ann.

So it's well understood and as Markets mature.

We're going to new markets for early markets as a mature true capture tends to have an increasing attachment as we go forward.

What do things we discussed?

During the IPO process around that, and is true capture does have a different revenue recognition model than our hardware business where in the hardware business.

Speaker Change: and Prof. Bennett recognized upon delivery. In the case of true capture.

The revenue recognition happens when the true capture systems are turned on.

So then you have to, so there's a lag between hardware delivery and one systems are commissioned.

and then True Capture's use. And so as Chuck mentioned, this last quarter we saw more True Capture revenue because it was building in terms of...

Speaker Change: and the systems were being shipped, but they were turned on yet. So that's basically where it stands. We feel really...

Great about the growth in the true capture business globally, about the engagement by the independent engineers. We keep our light releasing features, technology that increases.

True captures efficacy in the field. For example, we released.

a feature called

So on all the feuds.

Speaker Change: and you can go on the internet on YouTube and look at that and we also released a feature called Split Boost.

which is a highly differentiated feature that generates more energy. So if you're on YouTube and type in Split Boos next track, or you actually see how it works, these things increase.

Speaker Change: Not only will they increase the amount of energy generated by truth.

and I'll just add in the margin side.

Speaker Change: Software is a little different animal because you have, you tend to hire R&D costs, you spend a lot of money on the IP developing that technology. And so the gross margin that's reported is very high.

but it comes with op-ax on the R&D line. Then you'll note this corridor, we've increased our investment in R&D, and we plan to increase our investment in R&D again in Q3 and Q4. And this is what's driving this additional value. Thank you.

Our next question comes from Bill and the Fonda with Wolf Research. Your line is not open.

The End.

Here's a book on their earnings call last night. They're talking about shipping modules to wear houses for customers who aren't yet ready to accept the product.

I don't know if you guys listened to that call, but just two questions on that is, have you seen any impact on your projects and your backlogs specifically from those actions? And can you also just remind us what kind of recourse do you have when it comes to exercising contractual delivery rights? Should it be necessary? Thank you.

I'm sorry, can you repeat who announced your shipping modules to warehouse this?

Speaker Change: Yes, I was first solar. They were just talking about, yeah, shipping directly to warehouses.

The End

This is Howard on its question. My understanding is that it's fairly limited, at least that's what we're saying. I don't want to speak for solar. We're...

Not seen.

Speaker Change: We're seeing very consistent.

Activity on a project by project basis. What that means is in from quarter quarter.

We're seeing some project schedules shifting to the right. Some project schedules being pulled in. And I'm not sure because of our...

The number of EPCs that we work with and number of owners and the number of projects that we have in the US and internationally were able to manage these flows back and forth.

In totality, I think we've proven that over the last seven quarters it's going public. But we're not seeing...

On an individual project basis, we can see a delay, we're a shift of a month.

Speaker Change: Six weeks.

sometimes even flunker, but it's not a very concerted trend. We're not seeing that. So I'm going to tear it up into the right relative to what we talked about last quarter.

So we're actually saying more stability I would say in our shipping schedules from from last quarter to this quarter.

Speaker Change: Thanks for the question.

Our next question comes from a Heath Madeline with Lizzoho.

Speaker Change: They were so open.

Hey, a green, thanks for the questions. First, just on the revenue cadence, I think the newsletter pointed to flat-ish and cute sheets, so I have this Q4 rated.

So we just talk about how many book and deadlines you still need to do.

for Q4 or the second half.

and separately on the structural margin or relationship that, could you talk about the structure? I'll make sure you expect, I think you stopped the word higher up, I think you'd think you'd be for R&D, but how should we think about that? I'm going forward. Thanks.

This is Howard, all I answer the first part of the question and chocolate answer the second part about spending.

Speaker Change: So, um...

Speaker Change: We...

Feel very solid about our FY25 because of our backlog in our visibility.

We're really, really, a good shape there.

there is, so that's, that's,

Speaker Change: What I'll say, we've...

Speaker Change: either hit or be our top line, which is really driven by megawattship and each quarter. And we have a lot of confidence going into next quarter and for the year. And that includes Q4, which...

is Dan and Chuck and Art for Comments.

by color on.

Speaker Change: Yes.

Speaker Change: It's got a respect, a inferior robust quarter and we're quite confident in delivering on the quarter. Chuck, you want to take the opportunity. I will. Thank you. And just to put context.

You know, Q4 will be the single biggest quarter in the company's history, and it's going to put a lot of pressure on supply chains. They are amazing and work to the challenge, but we have booked and sold a lot of business and it's going to be a really, really strong Q4.

On the OPEX side, we're making really important strategic investments.

Speaker Change: Primarily in Technology.

We believe the company has a very big mode with our technology and we want to deepen and widen that mode with investments key investments in R&D. We saw in Q2 R&D spent 1 up by 3 million SGNA was flat.

and we would intend the back half of the year to continue to invest in R&D as well as sales and go to market and key geographies to drive revenue and sales for coming years.

Speaker Change: The End

Speaker Change: Our next question comes from Joseph Alcher with Guggenheim partners. Here Lai is not open.

Turning to your 45-axis closure, I'd like to clarify that the 300-paces point-off with that you refer to is...

It's sort of the incremental credit. It's not referred to the totality of the 45X uplift in my reading your language correctly.

Speaker Change: by the subject. Yeah, I think that the 300 basis points was a combination of true capture, 45 X and other, which is I would call that great execution of our field teams.

and so 45-X think of that as maybe a third of that. The year or the year benefits, so just be clear, Joe.

40th of next was not in our prior year ago numbers.

We had a keynote of catch up in Q4 as you might recall that was gaff only. And so when you compare a year or 45x, we want to just be super transparent and clear that they're not purely compatible with our QPARATA. Thank you.

Speaker Change: Next question, question Jonathan Keys, Wood Eye, Capra Market. I'll start open.

Jonathan Keys: Great, thank you for taking my question and I'll follow your instructions just to limit myself one. I'll have my tutos to the quarter of the results.

I just wanted to ask about Project Cancelsations. You didn't mention last quarter, you had a customer who had a campful dad, so small customer, just curious if you had anything like that this quarter.

Speaker Change: Thanks for your question.

Speaker Change: We have not had any project cancelled this quarter.

and the context of that one project that canceled last quarter, the context was there was one out of over 500 projects.

and so that's where we stand.

Speaker Change: Rachel.

Thank you. Our next question comes from Kathy Harris and with Piper Samar. Your line is not open.

Good afternoon. Thanks for taking the question that can grab some order. So my question is on next foundation.

Just based on your analysis of your pipeline, I was wondering if you could discuss what proportion of sites fall under the definition of heart terrain that would be applicable to Ojo. And then do you have any U.S. foundation revenues?

and Parker Raynor, otherwise in fiscal 25. And then finally, when do you expect to start quantifying the foundation backlog? Thank you.

Okay, I'll take first part of the question and then shall you take the second part of the question, please?

We had a fabulous...

Speaker Change: and watch the event at already plus of our foundation's business.

and we showed a map from the US Geological Service.

that shows when bedrock is within.

1 meter of the surface.

Speaker Change: is my recollection of what the measure was. And it turns out there's a significant portion just geographically of the U.S. that has...

Rock, you know, near the surface, where if you were putting a traditional pile in the ground,

Speaker Change: You with hip rock.

and what we've also seen is over the years.

Speaker Change: and...

The solar market has broadened geographically across the US.

Speaker Change: is a greater prevalence of the number of sites that have rock that have to be addressed. Or, it's not just rock, but also difficult soils, such as frost, heat, soils, expansive clay soils.

Speaker Change: or Swampy Soy-Soyles and the two foundation technologies with Quartadress all the above.

In terms of numbers, but we covered it in that forum, there were numbers like 20 to 30 plus percent of the sites.

are difficult sites. Some of our customers have over half their sites depending on their geographic range of activity, so it's very significant.

Speaker Change: That's the answer to the first part of the question. Chop in terms of the second half. Thank you, sir. Thank you, the question. In Q2, we actually booked a recorded revenue for foundations.

So Super!

The real that we have customer pay as money for the technology.

We have booked news for transactions.

We don't expect the dollars to be a significant this year. And that's a stay tuned for Analyst Day and our views on next year. We'll provide more colors. We think about talking about next fiscal year. Thank you.

My next question comes from John Wendom with UBS. They'll either sound open.

Perfect, appreciate things and time to do the questions. Congratulations on the 100% U.S. domestic content capabilities. As you plan to ramp and ship that next year.

I just wanted to give you some thoughts or guide post about what proportion of your US business is that likely today? Appreciate it.

Thanks John and just as a point of clarification, we actually have our first 100% U.S. tracker scheduled for delivery this quarter.

So we were able to accelerate that based on customer demand, with respect to the percentage of our business next year that could use the 100% domestic tracker.

Speaker Change: Moura!

We're going to have to wait and see on that and speak to it later. It comes a bit too customer needs. It also relates to their module. Their module mix. But what we're working on is from a supply chain standpoint.

Get in ahead of the curve.

and that's consistent with how Nick Strocker massively ramped our U.S. business.

Prior to the back better, prior to IRA, we were ramping our U.S. supply chain, and we've ramped it in other key markets such as India. This quarter of India, we announced we've hit a hundred, 95 percent content for example in India.

with overtaken gigs of capacity.

Speaker Change: On.

Speaker Change: and in the U.S. over 3 gigs of our major components in the U.S. for U.S. We are seeing.

Speaker Change: and continued demand and stronger demand than we anticipated for this 100% US content tracker.

We'll have to wait and see before we die to that number. We could address that potentially on our subsequent or the following hurting's call or the analyst at Chuck Manchews.

Speaker Change: Thank you.

Our next question comes from Ben Kelo with Bayard. You're lying about open.

Ben Kelo: Hey guys, just get the International Opti so big and the US Opti is very margins. What do you guys optimize for?

Dells Growter, Margin or EPS Growter, Cash Flur.

Hey Ben, we want to keep growing and we want to do so responsibly and that's

and that means profitly.

and in an creative way. So if we go into a new region, we evaluate is a creative to the company.

It's for the black anime day.

and so we see it your way which is there is a vast international opportunity in addition to the US market.

I personally just came back from India, spent a week there. They have a 500 gigawat target for renewables by 2030 that translates to 50 gigawat per year just for India.

and that goal is more than a goal. It's really like an RPS.

Speaker Change: The States.

are required to comply to get these clean pups and meet this clean power ball. They don't, they don't receive funding. That's our understanding for this trip.

Speaker Change: So there is this movement worldwide happening on electrification and clean energy. And so we are going to, we are tapping into that and we are going to keep doing that responsibly. Thanks for your question.

Our next question today comes from Jordan Levy with truest. You'll end us out open.

Speaker Change: [inaudible]

and the experiment at the new technology and also into new markets. I just wanted to see if we could not get into too many specific, but any additional color we could get there on what sort of opportunities are attractive to you.

Yeah, so the question is what new R&D efforts are we taking on and down? Maybe you should take that question. Sure. Page Gordon, thank you.

Speaker Change: Gordon, I think the best way to think about this is if you look at our...

Patton, we have over 600 Pattons, P.E. shooting, Pending, and three categories.

Speaker Change: and Canonical, electronic and controls and software. And so we're continuing at these relay to each other. They're not siloops.

The mechanical relates to the control system which relates to the software, for example, in True Capture.

and these really had value for customers. So we're really continuing and investing all of these categories.

What we have is a very well-evolved process to...

Speaker Change: Look at queer.

We Booked Interfation.

and then how much value does it contribute to a customer? Can that value be quantified and monetized by the customer? What key incremental investment and what's the risk and what's the timeframe? These are the factors that go in and that we have a list.

Based on the available budget we have, and then we're vesting in everything that we can afford and we've continued to increase that budget, and we've just seen a really great...

efficacy and what do things we speak about as that's where we release these technologies.

Speaker Change: They've been piloted in the field and so it's great. We've got our help for 75 out there operating with customers in real, utility-scale power plants and so forth.

Speaker Change: So it's been a very productive. Now, haven't said that, we've also acquired technology. We're open to that. We're very open to looking at technologies that can be added to the company.

I believe we have time for one more question and operator.

Speaker Change: and the

and next question comes from Julian the moderator. We're ready for the next question. The line is out open.

Speaker Change: Hey guys, can you hear me okay?

Chris Don't Julian.

Julian: Awesome, hey, sorry about that, I wasn't sure it was coming through or other.

and I appreciate the time. Just to follow up earlier on the US content, how many points you qualify for in the domestic content, just to clarify the 100% product, and then just coming back to the margin questions that were quickly here. Obviously, first half versus the back cap, as you think about that exit run rate in the back cap here, is that kind of what you should be thinking about in terms of an even margin?

going forward to the remainder of that backlog, or is the first half this year really kind of a good indicator what you can put up.

Speaker Change: If you think about embedded in that that was...

Cross the Four Naps, Wayne.

Speaker Change: Good night.

Speaker Change: Thank you, Julian. This is Howard, all answer the first part. Check the second. So on the domestic contact, really happy to be able to deliver that disorder for customers. We're seeing a higher take up than we anticipated for that. Why? In the large part because we...

and now in the Naval Accestory Qualifier for 24.7 points out of 100.

A quarter of Ford's, the 40 or 45% that's required. Okay, so if you need and that's increasing over time, so if you need 40 or 45 points, we're more than half of the points to get to a 10% credit.

So we're seeing customers really interested in that. They're thinking about, okay, tracker, plus, how much panel, domestic panels do they need to achieve that hurdle?

Julian: So that's the answer to the first part of your question, Chuck.

Yes, Julian, we're not going to sort of do our outlook for next year and beyond today.

So, a lot of the factors, these structural kind of high 20s, making about 30s, gross margins, which translate into, you know, call it 20-ish, even out margin.

It's a week, it's two really right now to say what that's going to look like next year because there's a lot of factors mixed, attached, raised so.

True Capture, our new Foundation businesses. And this is more appropriate to talk about that, then our analysts say, or at our Q4 earnings calls, we roll out the outlook for next year.

Dan, do you want to go on a walk? Of course?

Yes, first, thank you everyone for joining our greetings call. We've spent the entire next track routine, our shareholders, and our highly valued customers of partners as we march ahead for a completely powered world. Thanks for joining our call today.

Thank you. This includes our Q2 Army in call.

Welcome to today's conference call. Thank you for your participation. You may now disconnect.