Nextracker Inc

Previous wording

This Management’s Discussion and Analysis of Financial Condition and Results of Operations is designed to provide a reader of our unaudited condensed consolidated financial statements with a narrative from the perspective of the Company’s management. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q for the three-month period ended September 27, 2024 (this “Quarterly Report”) and our audited consolidated financial statements and the related notes and other information included in our Annual Report on Form 10-K for the year ended March 31, 2024, filed with the SEC on May 28, 2024, as amended by our Annual Report on Form 10-K/A, filed with the SEC on June 6, 2024. In addition to historical financial information, the following discussion and analysis contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the

Current wording

This Management’s Discussion and Analysis of Financial Condition and Results of Operations is designed to provide a reader of our unaudited condensed consolidated financial statements with a narrative from the perspective of the Company’s management. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q for the three-month period ended December 31, 2024 (this “Quarterly Report”) and our audited consolidated financial statements and the related notes and other information included in our Annual Report on Form 10-K for the year ended March 31, 2024, filed with the SEC on May 28, 2024, as amended by our Annual Report on Form 10-K/A, filed with the SEC on June 6, 2024. In addition to historical financial information, the following discussion and analysis contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such statements are based upon current expectations that involve risks, uncertainties and assumptions. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. For example, the words “believes,” “anticipates,” “plans,” “expects,” “intends” and similar expressions are intended to identify forward-looking statements. Our actual results and timing of selected events may differ materially from those results anticipated and discussed in the forward-looking statements as a result of many factors. Factors that might cause such a discrepancy include, but are not limited to, those discussed under the sections below titled “Liquidity and Capital Resources” and “Risk Factors.” All forward-looking statements in this document are based on information available to us as of the date of this Quarterly Report and we assume no obligation to update any such forward-looking statements, except as required by law.

Previous wording

We are a leading provider of intelligent, integrated solar tracker, foundations, and software solutions used in utility-scale and ground-mounted distributed generation solar projects around the world. Our products enable solar PV power plants to follow the sun’s movement across the sky and optimize plant performance. With power plants operating in more than 40 countries worldwide, we offer solar tracker technologies that increase energy production while reducing costs for significant plant return on investment (“ROI”). We are the global market leader based on gigawatts (“GW”) shipped for eight consecutive years.

Current wording

We are a leading provider of integrated solar trackers, foundations, and software solutions used in ground-mounted utility-scale and distributed generation solar projects around the world. Our product portfolio enables solar photovoltaic power plants to follow the sun’s movement across the sky and optimize plant performance. With power plants operating in more than 40 countries worldwide, we offer solar tracker technologies that increase energy production while reducing costs for significant plant return on investment (“ROI”). We are the global market leader based on gigawatts (“GW”) shipped for eight consecutive years.

Previous wording

For the majority of our projects, our direct customer is the EPC. We also engage with project owners and developers and enter into master supply agreements that cover multiple projects. We are a qualified, preferred provider to some of the largest solar EPCs, project owners and developers in the world. We had revenues of $1.4 billion for the six-month period ended September 27, 2024 and $2.5 billion for fiscal year 2024.

Current wording

For the majority of our projects, our direct customer is the EPC. We also engage with project owners and developers and enter into master supply agreements that cover multiple projects. We are a qualified, preferred provider to some of the largest solar EPCs, project owners and developers in the world. We had revenues of $2.0 billion for the nine-month period ended December 31, 2024 and $2.5 billion for fiscal year 2024.

Previous wording

During the six-month period ended September 27, 2024, we completed two acquisitions. On June 20, 2024, as part of an all-cash transaction, we acquired 100% of the interest in Ojjo, Inc. (“Ojjo”), a renewable energy company specializing in foundations technology and services used in ground-mount applications for solar power generation. Additionally, on July 31, 2024, we closed the acquisition of the solar foundations business held by Solar Pile International (“SPI”) through the purchase of Spinex Systems Inc. and assets held by other SPI affiliates.

Current wording

During the nine-month period ended December 31, 2024, we completed two acquisitions. On June 20, 2024, as part of an all-cash transaction, we acquired 100% of the interest in Ojjo, Inc. (“Ojjo”), a renewable energy company specializing in foundations technology and services used in ground-mount applications for solar power generation. Additionally, on July 31, 2024, we closed the acquisition of the solar foundations business held by Solar Pile International (“SPI”) through the purchase of Spinex Systems Inc. and assets held by other SPI affiliates.

Previous wording

Refer to the critical accounting policies and significant management estimates under Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended March 31, 2024 (the “Form 10-K”), where we discussed our more significant policies and estimates used in the preparation of the unaudited condensed consolidated financial statements. There have been no material changes to the Company’s critical accounting estimates since the Form 10-K, other than our accounting for business acquisitions as disclosed below.

Current wording

Refer to the critical accounting policies and significant management estimates under Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended March 31, 2024 (the “Form 10-K”), where we discussed our more significant policies and estimates used in the preparation of the unaudited condensed consolidated financial statements. There have been no material changes to our critical accounting estimates since the Form 10-K, other than our accounting for business acquisitions as disclosed below.

Previous wording

Selling, general and administrative expenses consist primarily of personnel-related costs associated with our administrative and support functions. These costs include, among other things, personnel costs, stock-based compensation, facilities charges including depreciation associated with administrative functions, professional services, travel expenses and allowance for bad debt. Professional services include audit, legal, tax and other consulting services. We have expanded our sales organization and expect to continue growing our sales headcount to support our planned growth. We have incurred and expect to continue to incur on an ongoing basis certain new costs related to the requirements of being a publicly traded company, including insurance, accounting, tax, legal and other professional services costs, which could be material. Amortization of intangibles consists of customer relationships and trade names over their expected period of use and is also included under selling, general and administrative expenses.

Current wording

Selling, general and administrative expenses consist primarily of personnel-related costs associated with our administrative and support functions. These costs include, among other things, personnel costs, stock-based compensation, facilities charges including depreciation associated with administrative functions, professional services, travel expenses and allowance for bad debt. Professional services include audit, legal, tax and other consulting services. We have expanded our sales organization and expect to scale our sales headcount to support our planned growth. We have incurred and expect to continue to incur on an ongoing basis certain new costs related to the requirements of being a publicly traded company, including insurance, accounting, tax, legal and other professional services costs, which could be material. Amortization of intangibles consists of customer relationships and trade names over their expected period of use and is also included under selling, general and administrative expenses.

Previous wording

Revenue increased by $62.2 million, or 11%, for the three-month period ended September 27, 2024 compared to the three-month period ended September 29, 2023, resulting primarily from a 27% increase in gigawatts delivered, most notably in the U.S. driven by increased demand coupled with an acceleration of deliveries to meet customers’ updated project schedules, partially offset by continued declines in average selling prices resulting from declining costs per watt. Revenue increased approximately $79.6 million, or 21%, in the U.S. during the three-month period ended September 27, 2024 compared to the three-month period ended September 29, 2023 while decreasing $17.4 million, or 9%, in the Rest of the World during the same period, primarily due to a reduction in shipments in Latin America. Quarterly variability occurs based on specific project timing and may be impacted negatively by delays in construction caused by multiple factors including permitting, interconnection, weather and labor issues.

Current wording

Revenue decreased by $31.1 million, or 4%, for the three-month period ended December 31, 2024 compared to the three-month period ended December 31, 2023, resulting primarily from slightly lower revenue generated in the U.S. due to the timing of deliveries and related project schedules. Revenue decreased approximately $105.4 million, or 19%, in the U.S. during the three-month period ended December 31, 2024 compared to the three-month period ended December 31, 2023 while increasing $74.3 million, or 48%, in the Rest of the World during the same period, primarily due to increased demand in Europe. Quarterly variability occurs based on specific project timing and may be impacted negatively by delays in construction caused by multiple factors including permitting, interconnection, weather and labor issues.

Previous wording

Cost of sales decreased by $13.5 million, or 3%, during the three-month period ended September 27, 2024 compared to the three-month period ended September 29, 2023, primarily driven by the impact from the 45X Credit. As noted in the overview, we now recognize a reduction in cost of sales for 45X Credit earned on components manufactured in the U.S. During the three-month period ended September 27, 2024, we recognized approximately $50.7 million of reduction to cost of sales related to the 45X Credit earned on production of eligible components shipped during the period. Additional incremental cost savings, primarily related to materials we procured from our vendors, were achieved through our expanded global supply chain that allows us to source local material and provides better lead times for customers. Freight and logistics costs remained flat as a percentage of revenue during the three-month period ended September 27, 2024 compared to the three-month period ended September 29, 2023.

Current wording

Cost of sales decreased by $62.2 million, or 12%, during the three-month period ended December 31, 2024 compared to the three-month period ended December 31, 2023, primarily driven by the impact from the 45X Credit and the reduction in revenue. As noted in the overview, we now recognize a reduction in cost of sales for 45X Credit earned on components manufactured in the U.S. During the three-month period ended December 31, 2024, we recognized approximately $52.2 million of reduction to cost of sales related to the 45X Credit earned on production of eligible components shipped during the period. The reduction in cost of sales was offset by increases in certain direct costs related to U.S. manufacturing, including the cost of steel and other components. Freight and logistics costs decreased slightly as a percentage of revenue during the three-month period ended December 31, 2024 compared to the three-month period ended December 31, 2023 due to the lower delivered volume as a result of the slight reduction in revenues noted above.

Previous wording

Gross profit increased by $75.7 million, or 51%, during the three-month period ended September 27, 2024 compared to the three-month period ended September 29, 2023, primarily resulting from the impact from the 45X Credit recognized in the period. Additional margin improvement was driven by a slightly higher mix of U.S. revenue that generally carries a higher margin profile than the Rest of the World coupled with incremental cost savings achieved through our global supply chain.

Current wording

Gross profit increased by $31.2 million, or 15%, during the three-month period ended December 31, 2024 compared to the three-month period ended December 31, 2023, primarily resulting from the impact from the 45X Credit recognized in the period. Additional margin improvement was driven by incremental cost savings achieved through our global supply chain. The above increases were offset by reduced quarter-over-quarter revenue.

Previous wording

Selling, general and administrative expenses increased $24.3 million, or 51%, to $72.1 million for the three-month period ended September 27, 2024 from approximately $47.9 million for the three-month period ended September 29, 2023 while also increasing approximately 300 basis points from approximately 8% to approximately 11% as a percentage of revenue during the same period. The increase in selling, general and administrative expenses was primarily the result of an increase in stock-based compensation expense of $10.4 million incurred in conjunction with our 2022 equity incentive plan, the remaining increase in costs of approximately $13.9 million related to our continued expansion of our sales organization in line with the growth in the global market and the expansion of our supporting functions also required to support our planned growth.

Current wording

Selling, general and administrative expenses increased $22.2 million, or 46%, to $70.6 million for the three-month period ended December 31, 2024 from approximately $48.4 million for the three-month period ended December 31, 2023 while also increasing approximately 358 basis points from approximately 7% to approximately 10% as a percentage of revenue during the same period. The increase in selling, general and administrative expenses was primarily the result of an increase in stock-based compensation expense of $16.3 million incurred in conjunction with our 2022 equity incentive plan, and the remaining increase in costs of approximately $5.9 million related to our continued expansion of our sales organization in line with the growth in the global market and the expansion of our supporting functions also required to support our current and planned growth.

Previous wording

Research and development expenses increased $22.9 million, or 180%, to $35.7 million for the six-month period ended September 27, 2024 from approximately $12.8 million during the six-month period ended September 29, 2023 as a result of our commitment to product innovation and development including software enhancements and additional headcount, coupled with an increase in stock-based compensation expense of $4.8 million.

Current wording

Research and development ("R&D") expenses increased $7.2 million, or 56%, to $20.1 million for the three-month period ended December 31, 2024 from approximately $12.9 million during the three-month period ended December 31, 2023 as a result of our commitment to product innovation and development, including software enhancements, additional headcount and the expansion of our R&D and innovation capability in the U.S., Brazil and India with the launch of Center of Excellence facilities.

Previous wording

Interest expense modestly increased $0.2 million, or 3%, to $6.9 million, for the six-month period ended September 27, 2024 from $6.7 million during the six-month period ended September 29, 2023.

Current wording

Interest expense modestly increased $0.6 million, or 18%, to $3.8 million for the three-month period ended December 31, 2024 from $3.2 million during the three-month period ended December 31, 2023.

Previous wording

Other (income) expense, net was $2.5 million income for the six-month period ended September 27, 2024, which primarily included $8.0 million interest income, partially offset by $7.4 million of unfavorable foreign currency exchange losses. Other (income) expense, net was $3.1 million expense for the six-month period ended September 29, 2023, which primarily included $5.7 million tax related expense as a result of an increase in our liability under the Tax Receivable Agreement and $2.6 million of unfavorable foreign currency exchange losses, partially offset by $5.3 million of interest income during the period.

Current wording

Other income, net was $13.8 million for the three-month period ended December 31, 2024, which primarily included $5.8 million of interest income, and $4.4 million in tax gains as a result of a decrease in our liability under the Tax Receivable Agreement, and $3.6 million of favorable foreign currency exchange gains. Other income, net was $21.5 million for the three-month period ended December 31, 2023, which primarily included $12.9 million tax related gains as a result of a decrease in our liability under the Tax Receivable Agreement, $5.2 million of favorable foreign currency exchange gains, and $3.4 million of interest income.

Previous wording

September 29, 2023, we recorded total income tax expense of $19.9 million and $4.0 million, respectively, which reflected consolidated effective income tax rates of 15% and 5%, respectively. The increase in tax expense as well as effective tax rate from the three-month period ended September 29, 2023 to the three-month period ended September 27, 2024 is driven by an increase in income before income taxes for the corresponding period and an increase in tax rate due to the separation from Flex as further described in Note 6 in the notes to the consolidated financial statements in the Form 10-K.

Current wording

December 31, 2023, we recorded total income tax expense of $42.8 million and $38.8 million, respectively, which reflected consolidated effective income tax rates of 27% and 23%, respectively. The increase in tax expense as well as effective tax rate from the three and nine-month periods ended December 31, 2023 to the three and nine-month periods ended December 31, 2024 is driven by a reduction in tax benefit related to stock based compensation associated with the non-deductible executive compensation, and an increase in tax rate due to the separation from Flex as further described in Note 6 in the notes to the consolidated financial statements in the Form 10-K.

Previous wording

Revenue increased by $302.6 million, or 29%, for the six-month period ended September 27, 2024 compared to the six-month period ended September 29, 2023, driven by a 44% increase in GW delivered, most notably in the U.S. driven by increased demand coupled with an acceleration of deliveries to meet customers updated project schedules. The revenue increase from additional GW delivered was slightly offset by a reduction in revenue per watt due to declining costs per watt compared to the six-month period ended September 29, 2023. Revenue increased approximately $320.8 million, or 49%, in the U.S. during the six-month period ended September 27, 2024 compared to the six-month period ended September 29, 2023 as more projects came on line, Rest of the World decreased $18.2 million, or 5%, primarily from reduced shipments to Latin America.

Current wording

Revenue increased by $271.5 million, or 15%, for the nine-month period ended December 31, 2024 compared to the nine-month period ended December 31, 2023, driven by a 25% increase in GW delivered, most notably in the U.S. driven by increased demand coupled with an acceleration of deliveries to meet customers updated project schedules. The revenue increase from additional GW delivered was slightly offset by a reduction in revenue per watt due to declining costs per watt compared to the nine-month period ended December 31, 2023. Revenue increased approximately $215.4 million, or 18%, in the U.S. during the nine-month period ended December 31, 2024 compared to the nine-month period ended December 31, 2023 as more projects came on line, and the Rest of the World increased $56.1 million, or 10%, primarily from increased shipments to Australia, the Middle East and Europe.

Previous wording

Cost of sales increased by $103.2 million, or 13%, during the six-month period ended September 27, 2024 compared to the six-month period ended September 29, 2023, primarily driven by the 44% increase in GW delivered noted above, partially offset by the impact from the 45X Credit. As noted in the overview, we now recognize a reduction in cost of sales for the 45X Credit earned on components manufactured in the U.S. During the first half of fiscal year 2025, we recognized approximately $98.0 million of reduction to cost of sales related to the 45X Credit earned on production of eligible components shipped during the period. Additional incremental cost savings, primarily related to materials we procured from our vendors, were achieved through our expanded global supply chain that allows us to source local materials and provide better lead times for customers. Freight and logistics costs remained flat as a percentage of revenue during the six-month period ended September 27, 2024 compared to the six-month period ended September 29, 2023.

Current wording

Cost of sales increased by $41.0 million, or 3%, during the nine-month period ended December 31, 2024 compared to the nine-month period ended December 31, 2023, primarily driven by the 25% increase in GW delivered noted above, offset by the impact from the 45X Credit. As noted in the overview, we now recognize a reduction in cost of sales for the 45X Credit earned on components manufactured in the U.S. For the nine-month period ended December 31, 2024, we recognized approximately $150.2 million of reduction to cost of sales related to the 45X Credit earned on production of eligible components shipped during the period. Freight and logistics costs remained flat as a percentage of revenue during the nine-month period ended December 31, 2024 compared to the nine-month period ended December 31, 2023.

Previous wording

Selling, general and administrative expenses increased $50.8 million, or 62%, to $133.0 million for the six-month period ended September 27, 2024 from approximately $82.1 million for the six-month period ended September 29, 2023 while also increasing approximately 201 basis points from approximately 8% to over 10% as a percentage of revenue during the same period. The increase in selling, general and administrative expenses was primarily the result of an increase in stock-based compensation expense of $19.0 million incurred in conjunction with our 2022 equity incentive plan, the remaining increase in costs of approximately $31.8 million related to our continued expansion of our sales organization in line with the growth in the global market and the expansion of our supporting functions also required to support our planned growth.

Current wording

Selling, general and administrative expenses increased $76.7 million, or 60%, to $203.5 million for the nine-month period ended December 31, 2024 from approximately $126.9 million for the nine-month period ended December 31, 2023 while also increasing approximately 281 basis points from approximately 7% to over 10% as a percentage of revenue during the same period. The increase in selling, general and administrative expenses was primarily the result of an increase in stock-based compensation expense of $35.3 million incurred in conjunction with our 2022 equity incentive plan, and the remaining increase in costs of approximately $41.4 million related to our continued expansion of our sales organization in line with the growth in the global market and the expansion of our supporting functions also required to support our current and planned growth.

Previous wording

Research and development expenses increased $12.0 million, or 169%, to $19.2 million for the three-month period ended September 27, 2024 from approximately $7.1 million during the three-month period ended September 29, 2023 as a result of our commitment to product innovation and development, including software enhancements and additional headcount, coupled with an increase in stock-based compensation expense of $2.0 million.

Current wording

Research and development expenses increased $26.5 million, or 91%, to $55.8 million for the nine-month period ended December 31, 2024 from approximately $29.3 million during the nine-month period ended December 31, 2023 as a result of an increase in stock-based compensation expense of $1.9 million coupled with our commitment to product innovation and development, including software enhancements, additional headcount and the expansion of our R&D and innovation capability in the U.S., Brazil and India with the launch of Center of Excellence facilities .

Previous wording

Other (income) expense, net was a $7.4 million income for the three-month period ended September 27, 2024, which primarily included $3.3 million of interest income and $2.4 million of favorable foreign currency exchange gains. Other (income) expense, net was a $5.0 million expense for the three-month period ended September 29, 2023, which primarily included $5.7 million tax related expense as a result of an increase in our liability under the Tax Receivable Agreement, and $3.0 million of unfavorable foreign currency exchange losses, partially offset by $3.7 million of interest income.

Current wording

Other income, net was $16.3 million for the nine-month period ended December 31, 2024, which primarily included $13.7 million interest income, and $4.4 million in tax related income as a result of a decrease in our liability under the Tax Receivable Agreement, partially offset by $3.8 million of unfavorable foreign currency exchange losses. Other income, net was $18.5 million for the nine-month period ended December 31, 2023, which primarily included $8.8 million of interest income, $7.3 million tax related gains as a result of a decrease in our liability under the Tax Receivable Agreement, and $2.6 million of favorable foreign currency exchange gains during the period.

Previous wording

We accrue and pay income taxes according to the laws and regulations of each jurisdiction in which we operate. Most of our revenue and profits are generated in the United States with a statutory income tax rate of approximately 21% for the six-month periods ended September 27, 2024 and September 29, 2023. For the six-month periods ended September 27, 2024 and September 29, 2023, we recorded total income tax expense of $47.1 million and $13.1 million, respectively, which reflected consolidated effective income tax rates of 16% and 8%, respectively. The increase in tax expense as well as effective tax rate from the six-month period ended September 29, 2023 to the six-month period ended September 27, 2024 is driven by an increase in income before income taxes for the corresponding period and an increase in tax rate due to the separation from Flex as further described in Note 6 in the notes to the consolidated financial statements in the Form 10-K.

Current wording

We accrue and pay income taxes according to the laws and regulations of each jurisdiction in which we operate. Most of our revenue and profits are generated in the United States with a statutory income tax rate of approximately 21% for the nine-month periods ended December 31, 2024 and December 31, 2023. For the nine-month periods ended December 31, 2024 and December 31, 2023, we recorded total income tax expense of $89.9 million and $51.9 million, respectively, which reflected consolidated effective income tax rates of 20% and 16%, respectively. The increase in tax expense as well as effective tax rate from the nine-month period ended December 31, 2023 to the nine-month period ended December 31, 2024 is driven by a reduction in tax benefits related to stock based compensation associated with the non-deductible executive compensation, and an increase in income before income taxes for the corresponding period and an increase in tax rate due to the separation from Flex as further described in Note 6 in the notes to the consolidated financial statements in the Form 10-K.

Previous wording

During the three-month period ended September 27, 2024, the Company drafted its transfer pricing documentation with respect to the economic arrangement between Ojjo and Nextracker LLC, whereby Ojjo is compensated for the services that it provides on behalf of Nextracker LLC. Therefore, during the three-month period ended September 27, 2024, Ojjo updated its forecasted pre-tax earnings to account for the draft of the economic arrangement between these parties, which reflects forecasted profits into the future. Due to the transfer pricing methodology, Ojjo is effectively guaranteed a profit going forward. As a result, the Company released the valuation allowance recorded against Ojjo’s deferred tax assets given that it is more likely than not that the deferred tax assets will be realized. A $7.9 million income tax benefit was recorded as a discrete item in the three-month period ended September 27, 2024 as it relates to a change in management’s assertion related to the realization of deferred tax assets in periods beyond the current tax year. An immaterial amount of income tax benefit related to the utilization of deferred tax assets with a valuation allowance in the current period is appropriately running through the computation of the annual effective tax rate.

Current wording

During the nine-month period ended December 31, 2024, Ojjo updated its forecasted pre-tax earnings to account for the economic arrangement in accordance with its transfer pricing policy, which reflects forecasted profits into the future. As a result, we released the valuation allowance recorded against Ojjo’s deferred tax assets given that it is more likely than not that the deferred tax assets will be realized. An $8.5 million income tax benefit was recorded as a discrete item in the nine-month period ended December 31, 2024 as it relates to a change in management’s assertion related to the realization of deferred tax assets in periods beyond the current tax year.

Previous wording

Net cash provided by operating activities was $274.6 million during the six-month period ended September 27, 2024. Total cash provided during the period was driven by net income of $242.1 million adjusted for non-cash charges of approximately $57.2 million primarily related to stock-based compensation expense, depreciation and amortization and provision for credit losses, partially offset by deferred income taxes associated with the Tax Receivable Agreement. Cash from net income was further decreased by the overall increase in our net operating assets and liabilities, primarily our net working capital accounts, resulting in an outflow of approximately $24.6 million. Accounts payable decreased $53.3 million, partially associated with timing and a decrease in payment cycle, other liabilities decreased $67.2 million primarily due to decrease in accrued expense, and other assets increased $16.1 million driven by advance payments to suppliers. Partially offsetting the cash outflows were decreases in inventory of $27.2 million as we continue to transfer production to the U.S. and shrink lead times, decreases in account receivable, contract assets in the aggregate of $61.6 million due to a reduction in revenue, the timing of billings and deliveries, and increases in deferred revenue of $23.3 million driven primarily by increased deposits on higher bookings during the period.

Current wording

Net cash provided by operating activities was $418.5 million during the nine-month period ended December 31, 2024. Total cash provided during the period was driven by net income of $359.4 million adjusted for non-cash charges of approximately $91.9 million primarily related to stock-based compensation expense, depreciation and amortization, deferred income taxes associated with the Tax Receivable Agreement and provision for credit losses. Cash from net income was further decreased by the overall increase in our net operating assets and liabilities, primarily our net working capital accounts, resulting in an outflow of approximately $32.9 million. Accounts payable decreased $81.3 million, partially associated with timing and a decrease in payment cycle, other liabilities decreased $46.4 million primarily due to a decrease in accrued expense primarily for freight and tariffs, and other assets increased $21.7 million driven by advance payments to suppliers. Inventory increased $10.4 million as we ramped up for our fourth quarter projects deliveries. Partially offsetting the cash outflows were net decreases in accounts receivable and contract assets of $44.2 million due to the timing of billings and deliveries, and increases in deferred revenue of $82.7 million driven primarily by increased deposits on higher bookings during the period and safe harbor deposits.

Previous wording

Net cash used in investing activities was approximately $159.6 million and directly attributable to the $144.7 million payment for the Foundations acquisitions net of cash acquired, coupled with the purchase of property and equipment.

Current wording

Net cash used in investing activities was approximately $168.5 million and directly attributable to the $144.7 million payment for the Foundations acquisitions net of cash acquired, coupled with the purchase of property and equipment.

Previous wording

Net cash used in financing activities was $27.2 million primarily resulting from a $15.5 million payment to Flex, TPG and the TPG Affiliates pursuant to the Tax Receivable Agreement, $6.1 million of tax distributions to our non-controlling interest holders pursuant to the LLC Agreement and a $3.7 million payment of the RCF issuance costs.

Current wording

Net cash used in financing activities was $30.5 million primarily resulting from a $15.5 million payment to Flex, TPG and the TPG Affiliates pursuant to the Tax Receivable Agreement, $6.1 million of tax distributions to our non-controlling interest holders pursuant to the LLC Agreement and a $6.0 million payment of the RCF issuance costs.

Previous wording

Net cash provided by operating activities was $252.7 million during the six-month period ended September 29, 2023. Total cash provided during the period was driven by net income of $145.1 million adjusted for non-cash charges of approximately $2.0 million primarily related to depreciation and amortization. Cash from net income was increased by the overall decrease in our net operating assets and liabilities, primarily our net working capital accounts, resulting in an inflow of approximately $105.6 million. Accounts payable increased approximately $191.4 million, partially associated with timing and increase in our payment cycles. Deferred revenue increased approximately $82.1 million driven primarily by increased deposits on higher bookings during the quarter. Offsetting the cash inflows were increases in accounts receivable and contract assets in aggregate of approximately $82.3 million during the six-month period ended September 29, 2023, resulting from shorter billing and collection periods and lower sequential revenue, and increases in inventories of approximately $58.2 million due to strong demand. Other net assets increased approximately $99.2 million driven by advance payments to suppliers to secure product with longer lead times and drive growth of our U.S. manufacturing footprint.

Current wording

Net cash provided by operating activities was $317.5 million during the nine-month period ended December 31, 2023. Total cash provided during the period was driven by net income of $273.0 million adjusted for non-cash charges of approximately ($84.3) million, primarily related to deferred income taxes associated with our Tax Receivable Agreement, partially offset by stock-based compensation expense, depreciation and amortization. Cash from net income was increased by the overall decrease in our net operating assets and liabilities, primarily our net working capital accounts, resulting in an inflow of approximately $128.8 million. Accounts payable increased approximately $162.8 million partially associated with timing and increase in our payment cycles. Deferred revenue increased approximately $36.6 million driven primarily by increased deposits on higher bookings during the nine-month period ended December 31, 2023. Amounts due to related parties increased $54.4 million and other assets decreased $87.7 million during the nine-month period ended December 31, 2023. Partially offsetting the cash inflows were increases in accounts receivable and contract assets in aggregate of approximately $148.1 million during nine-month period ended December 31, 2023, resulting from shorter billing and collection periods, and increases in inventories of approximately $64.6 million due to strong demand.

Previous wording

Net cash used in investing activities was $1.4 million and directly attributable to the purchase of property and equipment.

Current wording

Net cash used in investing activities was $3.9 million and directly attributable to the purchase of property and equipment.

Previous wording

Net cash used in financing activities was $8.4 million resulting from our repayment to Flex for the cash pool payable outstanding to Flex. After repaying such amount to Flex, no such cash pool payable is outstanding as of September 29, 2023.

Current wording

Net cash used in financing activities was $75.8 million resulting from the tax distribution to our non-controlling interest holders pursuant to the LLC Agreement, and our repayment to Flex for the cash pool payable outstanding to Flex. After repaying such amount to Flex, no such cash pool payable is outstanding as of December 31, 2023.

Previous wording

We had a total liquidity of over $1.5 billion as of September 27, 2024, primarily related to unutilized amounts under the RCF net of cumulative letters of credit issued in conjunction with our customer contracts, and our cash and cash equivalents balance as of September 27, 2024.

Current wording

We had a total liquidity of over $1.6 billion as of December 31, 2024, primarily related to unutilized amounts under the RCF net of cumulative letters of credit issued in conjunction with our customer contracts, and our cash and cash equivalents less current portion of long-term debt balance as of December 31, 2024.