Nextpower 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 July 3, 2026 (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, 2026, filed with the SEC on May 19, 2026 (the “Form 10-K”). 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

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

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 July 3, 2026 and $3.6 billion for fiscal year 2026.

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 six-month period ended October 2, 2026 and $3.6 billion for fiscal year 2026.

Previous wording

On July 17, 2026, we completed the previously announced acquisition of 100% of the ownership interests in Prevalon Energy LLC (“Prevalon”), a U.S.-headquartered provider of large-scale battery energy storage systems (“BESS”), power stabilization solutions, and lifecycle services, for total consideration of up to $365 million, consisting of (i) approximately $150 million in cash consideration paid at closing, net of cash and restricted cash acquired, (ii) $50 million in stock consideration consisting of shares of our Class A common stock to be issued one year after closing and priced at the average of the daily volume-weighted average prices for our Class A common stock on the Nasdaq Stock Market LLC for each of the 60 consecutive complete trading days ending with May 27, 2026, and (iii) up to $165 million of contingent cash consideration. The acquisition extends our technology platform across BESS, energy management software, and power control technologies and lifecycle services supporting grid-connected storage, hybrid power plants, AI data center infrastructure, and other critical power applications.

Current wording

The acquisition of Prevalon extends our technology platform across BESS, energy management software, and power control technologies and lifecycle services supporting grid-connected storage, hybrid power plants, AI data center infrastructure, and other critical power applications. Further, the acquisition from Zigor/Apex expands our energy infrastructure technology portfolio, including UL-certified central inverters for utility-scale solar and energy storage projects in the United States.

Previous wording

We derive our revenue primarily from the sale of solar trackers and energy yield management systems to our customers. To a lesser extent, we also derived our revenue from foundations, steel frames, eBOS, AI and robotic services, and other. 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. To a lesser extent, we also derived our revenue from foundations, steel frames, eBOS, battery energy storage systems, power conversion, AI and robotic services, and other. 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

Revenue increased by $70.9 million, or 8%, for the three-month period ended July 3, 2026 compared to the three-month period ended June 27, 2025, driven by a higher average selling price resulting from increasing costs per watt coupled with increased customer demand in the U.S, offset with lower GW delivered most notably in Rest of the World. Revenue increased by approximately $176.1 million, or 29%, in the U.S. during the three-month period ended July 3, 2026 compared to the three- month period ended June 27, 2025 as the number of projects and volume of shipments increased year over year, Rest of the World decreased by $105.2 million, or 40%, primarily resulting from decreased shipments to Latin America, and the Middle East, partially offset with increased shipments to Europe.

Current wording

Revenue increased by $204.0 million, or 23%, for the three-month period ended October 2, 2026 compared to the three-month period ended September 26, 2025, driven by approximately $100 million contribution from our recent business acquisitions, by a higher average selling price resulting from increasing costs per watt, and stronger customer demand in the U.S., partially offset by lower GW delivered most notably in Rest of the World. Revenue increased by approximately $217.7 million, or 32%, in the U.S. during the three-month period ended October 2, 2026 compared to the three-month period ended September 26, 2025 as the number of projects and volume of shipments increased year over year in addition to the revenue added from the new acquisitions, Rest of the World decreased by $13.7 million, or 6%, primarily resulting from decreased shipments to Latin America, the Middle East, and Oceania, partially offset with increased shipments to Europe.

Previous wording

Cost of sales increased by $16.8 million, or 3%, during the three-month period ended July 3, 2026 compared to the three-month period ended June 27, 2025, primarily driven by the volume of shipment increase in the U.S., and to a lesser extent, higher freight and logistics costs as a result of the U.S.-Iran war, along with higher cost associated with the increase in headcount as a result of our recent business acquisitions, partially offset by the impact from a $10.1 million increase in Internal Revenue Code Section 45X tax credit (“45X Credit”) that is earned over time for certain clean energy components domestically produced and sold by a manufacturer, coupled with the impact from a $6.9 million decrease in tariffs, net of refunds. We recognize a reduction in cost of sales for 45X Credits earned on components manufactured in the U.S. During the three-month periods ended July 3, 2026 and June 27, 2025, we recognized approximately $103.3 million and $93.2 million, respectively, of reduction to cost of sales related to the 45X Credit earned on production of eligible components shipped during the period, which offset tariffs of approximately $3.9 million and $10.8 million respectively. Freight and logistics costs also increased slightly as a percentage of revenue during the three-month period ended July 3, 2026 compared to the three-month period ended June 27, 2025.

Current wording

Cost of sales increased by $151.6 million, or 25%, during the three-month period ended October 2, 2026 compared to the three-month period ended September 26, 2025, primarily driven by the volume of shipment increase in the U.S., higher freight and logistics costs, including elevated diesel costs, as a result of the U.S.-Iran war, and trucking shortages, along with higher cost associated with the increase in headcount as a result of our recent business acquisitions. The higher costs were partially offset by the impact from a $14.8 million increase in Internal Revenue Code Section 45X tax credit (“45X Credit”) that is earned over time for certain clean energy components domestically produced and sold by a manufacturer, coupled with the impact from a $17.8 million decrease in tariffs, net of refunds. We recognize a reduction in cost of sales for 45X Credits earned on components manufactured in the U.S. During the three-month periods ended October 2, 2026 and September 26, 2025, we recognized approximately $113.8 million and $99.1 million, respectively, of reduction to cost of sales related to the 45X Credit earned on production of eligible components shipped during the period, which offset tariffs of approximately $14.7 million and $32.5 million, respectively. Freight and logistics costs (excluding tariffs) also increased as a percentage of revenue during the three-month period ended October 2, 2026 compared to the three-month period ended September 26, 2025.

Previous wording

Gross profit increased by $54.1 million, or 19%, during the three-month period ended July 3, 2026 compared to the three-month period ended June 27, 2025, primarily resulting from the volume of shipment increase in the U.S. noted above and the impact from the 45X Credit recognized in the period, which more than offset the higher freight and logistics costs noted above.

Current wording

Gross profit increased by $52.5 million, or 18%, during the three-month period ended October 2, 2026 compared to the three-month period ended September 26, 2025, primarily resulting from the volume of shipment increase in the U.S., including the new acquisitions noted above and the impact from the 45X Credit recognized in the period, which more than offset the higher freight and logistics costs.

Previous wording

Selling, general and administrative expenses increased by $26.5 million, or 36%, to $100.4 million for the three-month period ended July 3, 2026 from approximately $73.9 million for the three-month period ended June 27, 2025 while increasing 219 basis points from approximately 9% 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 costs of approximately $20.7 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. In addition, acquisition-related costs and stock-based compensation expense increased $3.1 million and $2.7 million, respectively.

Current wording

Selling, general and administrative expenses increased by $7.6 million, or 9%, to $92.2 million for the three-month period ended October 2, 2026 from approximately $84.6 million for the three-month period ended September 26, 2025 while decreasing 104 basis points from approximately 9% to approximately 8% 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 costs of approximately $14.3 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. These increases were partially offset by reductions of $4.4 million and $2.4 million in stock-based compensation expense and acquisition-related costs, respectively. The decrease in percent of revenue is driven primarily by revenue from the new acquisitions being accompanied with lower selling general and administrative levels.

Previous wording

Research and development expenses increased by $22.9 million, or 106%, to $44.5 million for the three-month period ended July 3, 2026 from approximately $21.6 million during the three-month period ended June 27, 2025, primarily driven by our continued investment in innovation, increasing our engineering team and supporting our recent business acquisitions.

Current wording

Research and development expenses increased by $18.7 million, or 69%, to $45.6 million for the three-month period ended October 2, 2026 from approximately $26.9 million during the three-month period ended September 26, 2025, primarily driven by our continued investment in innovation, increasing our engineering team and supporting our recent business acquisitions.

Previous wording

Interest expense decreased by $1.0 million, or 79%, to $0.3 million for the three-month period ended July 3, 2026 from $1.2 million during the three-month period ended June 27, 2025, primarily driven by lower amortization of the issuance cost and related commitment fee as a result of the new revolving credit facility entered on September 8, 2025, which replaced the credit facility entered into on February 13, 2023.

Current wording

Interest expense decreased by $0.4 million, or 52%, to $0.4 million for the three-month period ended October 2, 2026 from $0.7 million during the three-month period ended September 26, 2025, primarily driven by lower amortization of the issuance cost and related commitment fee as a result of the existing revolving credit facility entered on September 8, 2025, which replaced the credit facility entered into on February 13, 2023.

Previous wording

Other income, net was $8.3 million for the three-month period ended July 3, 2026, which primarily included $9.3 million of interest income, partially offset by $1.0 million of unfavorable foreign currency exchange losses and other. Other income, 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.

Current wording

Other income, net was $7.9 million for the three-month period ended October 2, 2026, which primarily included $9.9 million of interest income, partially offset by $3.5 million of unfavorable foreign currency exchange losses and other. Other income, net was $2.1 million income for the three-month period ended September 26, 2025, which primarily included $6.4 million of interest income, partially offset by the write-off of unamortized issuance costs of $5.8 million associated with our prior credit facility originally entered into on February 13, 2023, coupled with $1.9 million of unfavorable foreign currency exchange losses and other.

Previous wording

For the three-month periods ended July 3, 2026 and June 27, 2025, we recorded total income tax expense of $33.6 million and $33.8 million, respectively, which reflected consolidated effective income tax rates of 16.9% and 17.7%, respectively. The decrease in tax expense as well as effective tax rate from the three-month period ended June 27, 2025 to the three-month period ended July 3, 2026 is driven by jurisdictional mix of income and stock-based compensation deductions.

Current wording

For the three-month periods ended October 2, 2026 and September 26, 2025, we recorded total income tax expense of $49.6 million and $35.9 million, respectively, which reflected consolidated effective income tax rates of 23.1% and 19.6%, respectively. The increase in tax expense as well as effective tax rate from the three-month period ended September 26, 2025 to the three-month period ended October 2, 2026 is driven by jurisdictional mix of income, legal entity restructuring and stock-based compensation deductions.

Previous wording

Our principal uses of cash have been to fund our operations and invest in research and development and our cash flow generation and credit facilities have continued to provide adequate liquidity for our business. We enhanced our capital structure with a$1.0 billion unsecured revolving credit facility expanding our total liquidity toover $2.0 billionas of July 3, 2026.

Current wording

Our principal uses of cash have been to fund our operations and invest in research and development and our cash flow generation and credit facilities have continued to provide adequate liquidity for our business. We enhanced our capital structure with a$1.0 billion unsecured revolving credit facility expanding our total liquidity toover $1.9 billionas of October 2, 2026.

Previous wording

As of July 3, 2026, we had approximately $919.4 million available under the revolving credit facility, net of $80.6 million of outstanding letters of credit. We were in compliance with all applicable covenants as of July 3, 2026.

Current wording

As of October 2, 2026, we had approximately $916.2 million available under the revolving credit facility, net of $83.8 million of outstanding letters of credit. We were in compliance with all applicable covenants as of October 2, 2026.

Previous wording

We participate in various supplier finance programs administered by a third-party financial institution. Under such programs, certain suppliers may, at their sole discretion, elect to sell one or more of their receivables from us to a financial institution. Our payment obligations to the financial institution are not accelerated and remain subject to the original contractual terms agreed with the supplier. We do not provide guarantees or collateral in connection with these arrangements. Amounts payable under the programs are included in accounts payable on the unaudited condensed consolidated balance sheets and payments made under the programs are reported as operating activities on the unaudited condensed consolidated statements of cash flows. The outstanding amount payable under our supplier finance programs as of July 3, 2026 was $174.8 million.

Current wording

We participate in various supplier finance programs administered by a third-party financial institution. Under such programs, certain suppliers may, at their sole discretion, elect to sell one or more of their receivables from us to a financial institution. Our payment obligations to the financial institution are not accelerated and remain subject to the original contractual terms agreed with the supplier. We do not provide guarantees or collateral in connection with these arrangements. Amounts payable under the programs are included in accounts payable on the unaudited condensed consolidated balance sheets and payments made under the programs are reported as operating activities on the unaudited condensed consolidated statements of cash flows. The outstanding amount payable under our supplier finance programs as of October 2, 2026 was $215.1 million.

Previous wording

Net cash provided by operating activities was $121.1 million during the three-month period ended July 3, 2026. Total cash provided during the period was driven by net income of $165.4 million adjusted for non-cash charges of approximately $45.1 million primarily related to stock-based compensation expense, depreciation and amortization, and deferred income taxes costs. 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 $89.4 million as we continue to fund our current and planned growth.

Current wording

Net cash provided by operating activities was $279.2 million during the six-month period ended October 2, 2026. Total cash provided during the period was driven by net income of $330.8 million adjusted for non-cash charges of approximately $93.5 million primarily related to stock-based compensation expense, depreciation and amortization, and deferred income taxes costs. 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 $145.1 million as we continue to fund our current and planned growth.

Previous wording

Net cash used in investing activities was approximately $21.9 million and directly attributable to $15.9 million paid for the purchase of property and equipment, coupled with $6.0 million paid for the purchase of intangible assets.

Current wording

Net cash used in investing activities was approximately $179.5 million and directly attributable to the $132.5 million payment for our fiscal year 2027 acquisitions net of cash acquired, coupled with $39.0 million paid for the purchase of property and equipment, and $8.0 million paid for the purchase of intangible assets.

Previous wording

Net cash provided by financing activities was $19.8 million primarily resulting from $26.0 million of proceeds from the issuance of common stock upon option exercises, offset by a $6.2 million payment of acquisition deferred purchase price.

Current wording

Net cash used in financing activities was $164.8 million primarily resulting from $162.1 million of repurchases of common stock, $19.4 million payment to Flex, TPG and the TPG Affiliates pursuant to the Tax Receivable Agreement, and a $16.1 million payment of acquisition deferred purchase price, offset by $32.8 million of proceeds from the issuance of common stock upon option exercises.

Previous wording

Net cash provided by operating activities was $81.3 million during the three-month period ended June 27, 2025. Total cash provided during the period was driven by net income of $157.2 million adjusted for non-cash charges of approximately $28.1 million primarily related to stock-based compensation expense, depreciation and amortization, and deferred income taxes. 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 $103.9 million as we continued to fund our current and planned growth.

Current wording

Net cash provided by operating activities was $268.2 million during the six-month period ended September 26, 2025. Total cash provided during the period was driven by net income of $304.0 million adjusted for non-cash charges of approximately $80.1 million primarily related to stock-based compensation expense, depreciation and amortization, write-off of unamortized revolver issuance costs, and deferred income taxes. 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 $115.9 million as we continued to fund our current and planned growth.

Previous wording

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

Current wording

Net cash used in investing activities was approximately $142.5 million and directly attributable to the $115.8 million payment for the business acquisitions net of cash acquired, coupled with $26.7 million paid for the purchase of property and equipment.

Previous 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 a $2.9 million payment to Flex, TPG and the TPG Affiliates pursuant to the Tax Receivable Agreement.

Current wording

Net cash used in financing activities was $46.4 million primarily resulting from a $27.4 million payment to Flex, TPG and TPG Affiliates pursuant to the Tax Receivable Agreement, a $14.0 million payment of acquisition of deferred purchase price, and a $3.0 million tax distribution to our former non-controlling interest holder pursuant to the LLC Agreement.

Previous wording

We had a total liquidity of over $2.0 billion as of July 3, 2026, primarily related to unutilized amounts under the revolving credit facility net of cumulative letters of credit issued in conjunction with our customer contracts, and our cash and cash equivalents.

Current wording

We had a total liquidity of over $1.9 billion as of October 2, 2026, primarily related to unutilized amounts under the revolving credit facility net of cumulative letters of credit issued in conjunction with our customer contracts, and our cash and cash equivalents.

Previous wording

Refer to Note 2 in the notes to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for recently adopted accounting pronouncements during thethree-month period ended July 3, 2026.

Current wording

Refer to Note 2 in the notes to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for recently adopted accounting pronouncements during thesix-month period ended October 2, 2026.