Nextracker Inc.

Previous wording

Unless the context requires otherwise, references in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “Nextracker,” the “Company,” “we,” “us” and “our” shall mean, prior to the IPO, both Nextracker LLC (“Nextracker LLC” or the “LLC”) and its consolidated subsidiaries, and following the IPO and the related transactions completed in connection with the IPO, to Nextracker Inc. and its consolidated subsidiaries. References in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “Flex” refer to Flex Ltd., a Singapore incorporated public company limited by shares and having a registration no. 199002645H, and its consolidated subsidiaries, unless the context otherwise indicates.

Current wording

Unless the context requires otherwise, references in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “Nextracker,” the “Company,” “we,” “us” and “our” shall mean, prior to the IPO, Nextracker LLC (“Nextracker LLC” or the “LLC”) and its consolidated subsidiaries, and following the IPO and the related transactions completed in connection with the IPO, Nextracker Inc. and its consolidated subsidiaries. References in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “Flex” refer to Flex Ltd., a Singapore incorporated public company limited by shares and having a registration no. 199002645H, and its consolidated subsidiaries, unless the context otherwise indicates.

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 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.

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 June 27, 2025 (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, 2025, filed with the SEC on May 22, 2025. 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 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.

Current wording

We are a leading solar technology platform provider used in power plants around the world. Our products enable solar panels to follow the sun’s movement across the sky and optimize performance. With products operating in more than forty countries worldwide, Nextracker offers solar tracker technologies and innovative solutions that accelerate solar power plant construction, increase performance, and enhance long-term reliability. We are the global market leader based on gigawatts (“GW”) shipped for ten consecutive years.

Previous wording

We were founded in 2013 by our Chief Executive Officer, Dan Shugar, and were acquired by Flex in 2015. In 2016, Flex acquired BrightBox Technologies on our behalf to further our machine learning capabilities. On January 2, 2024, Flex closed the spin-off of all its remaining interests in Nextracker to Flex shareholders and we are now a fully independent company. Over time, we have developed new and innovative hardware and software products and services to scale our capabilities.

Current wording

We were founded in 2013 by our Chief Executive Officer, Dan Shugar. Over time, we have developed new and innovative products and services to scale our capabilities.

Previous wording

We have shipped more than 100 GW of solar tracker systems as of December 31, 2024 to projects on six continents for use in utility-scale and distributed generation solar applications. Our customers include engineering, procurement and construction firms (“EPCs”), as well as solar project developers and owners. Developers originate projects, select and acquire sites, obtain permits, select contractors, negotiate power offtake agreements and oversee the building of projects. EPCs design and optimize the system, procure components, build and commission the plant and operate the plant for a limited time until transfer to a long- term owner. Owners, which are often independent power producers, own and operate the plant, typically as part of a portfolio of similar assets. Owners generate cash flows through the sale of electricity to utilities, wholesale markets or end users.

Current wording

We have shipped more than 130 GW of solar tracker systems as of March 31, 2025 to projects on six continents for use in utility-scale and distributed generation solar applications. Our customers include engineering, procurement and construction firms (“EPCs”), as well as solar project developers and owners. Developers originate projects, select and acquire sites, obtain permits, select contractors, negotiate power offtake agreements, and oversee the building of projects. EPCs design and optimize the system, procure components, build and commission the plant, and operate the plant for a limited time until transfer to a long-term owner. Owners, which are often independent power producers, own and operate the plant, typically as part of a portfolio of similar assets. Owners generate cash flows through the sale of electricity to utilities, wholesale markets, or end users.

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 $2.0 billion for the nine-month period ended December 31, 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 $0.9 billion for the three-month period ended June 27, 2025 and $3.0 billion for fiscal year 2025.

Previous 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.

Current wording

During the three-month period ended June 27, 2025, we completed two acquisitions. On May 7, 2025, as part of an all-cash transaction, we acquired 100% of the interest in Bentek, an industry pioneer and manufacturer of electrical infrastructure used in all types of solar power plants. Additionally, on May 9, 2025, we acquired 100% of the interest in OnSight, a supplier of autonomous inspection robots and fire detection systems purpose-built for solar plants.

Previous wording

The aggregate cash consideration of the Foundations acquisitions was approximately $144.7 million, net of $4.4 million cash acquired. Additionally, the aggregate total purchase price of $164.7 million includes $14.0 million of deferred consideration expected to be paid within a 12-month period, a $3.4 million release of a loan obligation previously owed by the seller and a $2.6 million contingent earnout. See Note 11 in the notes to the unaudited condensed consolidated financial statements for further detail on these acquisitions.

Current wording

The aggregate cash consideration of both acquisitions was approximately $86.4 million, net of cash acquired. The aggregate total purchase price of both acquisitions of $103.5 million includes $2.6 million of deferred consideration expected to be paid within a 12-month period, and $14.5 million of contingent earnout in aggregate (with a maximum possible consideration of $27.0 million). See Note 10 in the notes to the unaudited condensed consolidated financial statements for further detail on these acquisitions.

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 our 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, 2025 (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.

Previous wording

We derive our revenue from the sale of solar trackers and software products to our customers. Our revenue growth is dependent on (i) our ability to maintain and expand our market share, (ii) total market growth and (iii) our ability to develop and introduce new products driving performance enhancements and cost efficiencies throughout the solar power plant.

Current wording

We derive our revenue primarily from the sale of solar trackers and energy yield management systems to our customers. Our revenue growth is dependent on (i) our ability to maintain and expand our market share, (ii) total market growth and (iii) our ability to develop and introduce new products driving performance enhancements and cost efficiencies throughout the solar power plant.

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 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.

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 included under selling, general and administrative expenses. Acquisition-related costs are also included under selling, general and administrative expenses.

Previous wording

Research and development expenses consist primarily of personnel-related costs associated with our engineering employees, stock-based compensation, as well as third-party consulting. Research and development activities include improvements to our existing products, development of new tracker products and software products. We expense substantially all research and development expenses as incurred. We expect that the dollar amount of research and development expenses will increase in amount over time.

Current wording

Research and development expenses consist primarily of personnel-related costs associated with our engineering employees, stock-based compensation, as well as third-party consulting. Research and development activities include improvements to our existing products, development of new tracker products and energy yield management systems. We expense substantially all research and development expenses as incurred. We expect that the dollar amount of research and development expenses will increase in amount over time.

Previous wording

Our taxable income is primarily from the allocation of taxable income from the LLC. The provision for income taxes primarily represents the LLC’s U.S. federal, state and local income taxes as well as foreign income taxes payable by its subsidiaries. The LLC owns 100% of all foreign subsidiaries. We expect to receive a tax benefit for foreign tax credits in the United States for our distributive shares of the foreign tax paid.

Current wording

Our taxable income is primarily from the allocation of taxable income from the LLC. The provision for income taxes primarily represents the LLC’s U.S. federal, state, and local income taxes as well as foreign income taxes payable by its subsidiaries. We expect to receive a tax benefit for foreign tax credits in the United States for the foreign tax paid.

Previous wording

We present Adjusted gross profit, Adjusted operating income, Adjusted net income, Adjusted EBITDA, Adjusted gross margin, Adjusted net income margin and Adjusted EBITDA margin as supplemental measures of our performance. We define Adjusted gross profit as gross profit plus stock-based compensation expense and intangible amortization. We define Adjusted operating income as operating income plus stock-based compensation expense, intangible amortization and non-recurring integration activities related to our current year acquisitions. We define Adjusted net income as net income (loss) plus stock-based compensation expense, intangible amortization, non-recurring integration activities related to acquisitions and certain nonrecurring legal costs and other discrete events as applicable, net of their tax effects. We define Adjusted EBITDA as net income (loss) plus (i) interest, net, (ii) provision for income taxes, (iii) depreciation expense, (iv) intangible amortization, (v) stock-based compensation expense, (vi) various non-recurring tax adjustments and (vii) certain nonrecurring legal costs, integration activities related to acquisitions and other discrete events as applicable. We define Adjusted gross margin as the percentage derived from Adjusted gross profit divided by revenue. We define Adjusted net income margin as the percentage derived from Adjusted net income divided by revenue. We define Adjusted EBITDA margin as the percentage derived from Adjusted EBITDA divided by revenue.

Current wording

We present Adjusted gross profit, Adjusted operating income, Adjusted net income, Adjusted EBITDA, Adjusted gross margin, Adjusted net income margin and Adjusted EBITDA margin as supplemental measures of our performance. We define Adjusted gross profit as gross profit plus stock-based compensation expense and intangible amortization. We define Adjusted operating income as operating income plus stock-based compensation expense, intangible amortization and non-recurring integration activities related to acquisitions. We define Adjusted net income as net income (loss) plus stock-based compensation expense, intangible amortization, various non-recurring tax adjustments, and non-recurring integration activities related to acquisitions. We define Adjusted EBITDA as net income (loss) plus (i) interest, net, (ii) provision for income taxes, (iii) depreciation expense, (iv) intangible amortization, (v) stock-based compensation expense and (vi) non-recurring integration activities related to acquisitions. We define Adjusted gross margin as the percentage derived from Adjusted gross profit divided by revenue. We define Adjusted net income margin as the percentage derived from Adjusted net income divided by revenue. We define Adjusted EBITDA margin as the percentage derived from Adjusted EBITDA divided by revenue.

Previous wording

Adjusted gross profit, Adjusted operating income, Adjusted net income, Adjusted EBITDA, Adjusted gross margin, Adjusted net income margin and Adjusted EBITDA margin are intended as supplemental measures of performance that are neither required by, nor presented in accordance with, U.S. GAAP. We present these Adjusted financial measures because we believe they assist investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. In addition, we may use all or any combination of Adjusted gross profit, Adjusted operating income, Adjusted net income, Adjusted EBITDA, when determining incentive compensation and to evaluate the effectiveness of our business strategies.

Current wording

Adjusted gross profit, Adjusted operating income, Adjusted net income, Adjusted EBITDA, Adjusted gross margin, Adjusted net income margin and Adjusted EBITDA margin are intended as supplemental measures of performance that are neither required by, nor presented in accordance with, U.S. GAAP. We present these Adjusted financial measures because we believe they assist investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. In addition, we may use all or any combination of Adjusted gross profit, Adjusted operating income, Adjusted net income and Adjusted EBITDA when determining incentive compensation and to evaluate the effectiveness of our business strategies.

Previous wording

(1)Represents transaction and integration costs incurred in relation to our Foundations acquisitions. We do not believe that the acquisition transaction costs are normal, recurring operating expenses indicative of our core operating performance, nor were these charges taken into account as factors in evaluating management’s performance when determining incentive compensation or to evaluate the effectiveness of our business strategies.

Current wording

(1)Represents transaction and integration costs incurred in relation to our acquisitions. We do not believe that the acquisition transaction costs are normal operating expenses indicative of our core operating performance, nor were these charges taken into account as factors in evaluating management’s performance when determining incentive compensation or to evaluate the effectiveness of our business strategies.

Previous 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.

Current wording

Revenue increased by $144.3 million, or 20%, for the three-month period ended June 27, 2025 compared to the three-month period ended June 28, 2024, driven by a 27% increase in GW delivered, most notably in Rest of the World driven by increased demand. Revenue increased by approximately $88.0 million, or 17%, in the U.S. during the three-month period ended June 27, 2025 compared to the three-month period ended June 28, 2024 as the number of projects and volume of shipments increased year over year, Rest of the World increased by $56.3 million, or 27%, primarily resulting from increased shipments to Latin America, the Middle East and Europe.

Previous 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.

Current wording

Cost of sales increased by $100.0 million, or 21%, during the three-month period ended June 27, 2025 compared to the three-month period ended June 28, 2024, primarily driven by the 27% increase in GW delivered noted above, offset by the impact from the 45X Credit. We recognize a reduction in cost of sales for 45X Credit earned on components manufactured in the U.S. During the three-month periods ended June 27, 2025 and June 28, 2024, we recognized approximately $93.2 million and $47.0 million, respectively, 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 primarily due to our recent acquisitions including an increase in headcount. Freight and logistics costs decreased slightly as a percentage of revenue during the three-month period ended June 27, 2025 compared to the three-month period ended June 28, 2024.

Previous wording

Gross profit increased by $230.6 million, or 49%, during the nine-month period ended December 31, 2024 compared to the nine-month period ended December 31, 2023, primarily resulting from the U.S. and Rest of the World revenue growth noted above and the impact from the 45X Credit recognized in the nine-month period ended December 31, 2024.

Current wording

Gross profit increased by $44.3 million, or 19%, during the three-month period ended June 27, 2025 compared to the three-month period ended June 28, 2024, primarily resulting from the U.S. and Rest of the World revenue growth noted above and the impact from the 45X Credit recognized in the period.

Previous 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.

Current wording

Selling, general and administrative expenses increased by $13.1 million, or 22%, to $73.9 million for the three-month period ended June 27, 2025 from approximately $60.8 million for the three-month period ended June 28, 2024 while increasing modestly from approximately 8.4% to approximately 8.6% 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 $3.2 million incurred in conjunction with our 2022 equity incentive plan, $1.1 million of acquisition-related costs incurred in conjunction with our new business acquisitions, and the remaining increase in costs of approximately $8.8 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 current and planned growth.

Previous 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.

Current wording

Other (income) expense, net was $6.0 million income for the three-month period ended June 27, 2025, which primarily included $6.3 million of interest income, partially offset by $0.3 million of unfavorable foreign currency exchange losses. Other (income) expense, net was $4.9 million expense for the three-month period ended June 28, 2024, which primarily included $9.8 million of unfavorable foreign currency exchange losses, partially offset by $4.6 million of interest income.

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 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.

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 21% for the three-month periods ended June 27, 2025 and June 28, 2024. For the three-month periods ended June 27, 2025 and June 28, 2024, we recorded total income tax expense of $33.8 million and $27.2 million, respectively, which reflected consolidated effective income tax rates of 17.7% and 17.9%, respectively. The increase in income tax expense from the three-month period ended June 27, 2025 to the three-month period ended June 28, 2024 is primarily driven by the increase in income before income taxes. The decrease in effective tax rate from the three-month period ended June 28, 2024 to the three-month period ended June 27, 2025 is primarily driven by an increase in tax benefit to a tax credit approved by the State of California, partially offset by tax expense associated with non-deductible executive stock based compensation.

Previous wording

In connection with the IPO, on February 13, 2023, Nextracker Inc. also entered into a Tax Receivable Agreement (the “Tax Receivable Agreement”) that provided for the payment by us to Flex, TPG Rise and the following affiliates of TPG Rise: TPG Rise Climate Flash Cl BDH, L.P., TPG Rise Climate BDH, L.P. and The Rise Fund II BDH, L.P. (collectively, the “TPG Affiliates”) (or certain permitted transferees thereof) of 85% of the tax benefits, if any, that we are deemed to realize under certain circumstances, as more fully described in the Form 10-K. There may be a material negative effect on our liquidity if, as a result of timing discrepancies or otherwise, the payments under the Tax Receivable Agreement exceed the actual benefits we realize in respect of the tax attributes subject to the Tax Receivable Agreement or distributions to us by the LLC are not sufficient to permit us to make payments under the Tax Receivable Agreement after we have paid taxes. Prior to the separation from Flex, Yuma and Yuma Sub assigned their respective rights under the Tax Receivable Agreement to an entity that remains an affiliate of Flex.

Current wording

In connection with the IPO, on February 13, 2023, Nextracker Inc. entered into a Tax Receivable Agreement (the “Tax Receivable Agreement” or “TRA”) that provided for the payment by us to Flex, TPG Rise, and the following affiliates of TPG Rise: TPG Rise Climate Flash Cl BDH, L.P., TPG Rise Climate BDH, L.P. and The Rise Fund II BDH, L.P. (collectively, the “TPG Affiliates”) (or certain permitted transferees thereof) of 85% of the tax benefits, if any, that we are deemed to realize under certain circumstances, as more fully described in the Form 10-K. There may be a material negative effect on our liquidity if, as a result of timing discrepancies or otherwise, the payments under the Tax Receivable Agreement exceed the actual benefits we realize in respect of the tax attributes subject to the Tax Receivable Agreement or distributions to us by the LLC are not sufficient to permit us to make payments under the Tax Receivable Agreement after we have paid taxes. Prior to the separation from Flex, Yuma and Yuma Sub assigned their respective rights under the Tax Receivable Agreement to an entity that remains an affiliate of Flex.

Previous wording

We believe that our cash provided by operations and other existing and committed sources of liquidity, including our RCF, will provide adequate liquidity for ongoing operations, planned capital expenditures and other investments, potential debt service requirements and payments under the Tax Receivable Agreement for at least the next 12 months.

Current wording

We believe that our cash provided by operations and other existing and committed sources of liquidity, including our revolving credit facility (“RCF”) under the 2023 Credit Agreement (as defined in the section entitled Management's Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025), will provide adequate liquidity for ongoing operations, planned capital expenditures and other investments, potential debt service requirements and payments under the Tax Receivable Agreement for at least the next 12 months.

Previous 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.

Current wording

Net cash used in investing activities was approximately $98.1 million and directly attributable to the $86.8 million payment for the Bentek and OnSight acquisitions net of cash acquired, coupled with the purchase of property and equipment.

Previous 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.

Current wording

Net cash used in financing activities was $6.0 million primarily resulting from a $3.0 million tax distribution to our former non-controlling interest holder pursuant to the LLC Agreement and $2.9 million payment to Flex, TPG and the TPG Affiliates pursuant to the Tax Receivable Agreement,

Previous 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.

Current wording

Net cash provided by operating activities was $120.8 million during the three-month period ended June 28, 2024. Total cash provided during the period was driven by net income of $124.8 million adjusted for non-cash charges of approximately $4.1 million primarily related to stock-based compensation expense, depreciation and amortization, provision for credit losses, partially offset by deferred income taxes associated with our 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 $8.0 million. Accounts payable decreased $71.0 million, partially associated with timing and a decrease in payment cycle. Other liabilities decreased $32.1 million primarily due to a decrease in accrued expense. Partially offsetting the cash outflows were decreases in inventory of $40.3 million as we continue to transfer production to the U.S. and shrink lead times, decreases in account receivable and contract assets in the aggregate of $16.7 million due to the timing of billings and deliveries, increases in deferred revenue of $10.2 million driven primarily by increased deposits on higher bookings during the quarter, and increases in other assets of $27.9 million primarily driven by recognition of the 45X Credits receivable from our vendors.

Previous wording

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

Current wording

Net cash used in investing activities was approximately $113.1 million and directly attributable to the $110.2 million payment for the acquisition of Ojjo, net of cash acquired, coupled with the purchase of property and equipment.

Previous 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.

Current wording

We had a total liquidity of approximately $1.7 billion as of June 27, 2025, 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 June 27, 2025.