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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
Form 10-Q
(Mark One)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 27, 2024
Or
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 001-41617
Nextracker Inc.
(Exact name of registrant as specified in its charter)
Delaware36-5047383
(State or other jurisdiction of(I.R.S. Employer
incorporation or organization)Identification No.)
6200 Paseo Padre Parkway, Fremont, California 94555
(Address, including zip code of registrant’s principal executive offices)
(510) 270-2500
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, $0.0001 par valueNXTThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒Accelerated filer☐Non-accelerated filer☐Smaller reporting company☐
Emerging growth company ☐
i

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
 As of October 28, 2024, there were 143,639,646 shares of the registrant’s Class A common stock outstanding and 1,908,827 shares of the registrant’s Class B common stock outstanding.
ii

TABLE OF CONTENTS
Page
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.

1

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
2

Nextracker Inc.
Unaudited condensed consolidated balance sheets
(In thousands, except share and per share amounts)
As of September 27, 2024As of March 31, 2024
ASSETS
Current assets:
Cash and cash equivalents$561,884$474,054
Accounts receivable, net of allowance of $4,825 and $3,872, respectively
357,586382,687
Contract assets360,013397,123
Inventories179,251201,736
Other current assets326,000312,635
Total current assets1,784,7341,768,235
Property and equipment, net47,1589,236
Goodwill370,613265,153
Other intangible assets, net49,2831,546
Deferred tax assets472,400438,272
Other assets44,47136,340
Total assets$2,768,659$2,518,782
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$406,546$456,639
Accrued expenses77,13982,410
Deferred revenue236,882225,539
Current portion of long-term debt5,6253,750
Other current liabilities80,086123,148
Total current liabilities806,278891,486
Long-term debt, net of current portion140,503143,967
Tax receivable agreement (TRA) liability399,054391,568
Other liabilities140,50699,733
Total liabilities1,486,3411,526,754
Commitments and contingencies (Note 8)
Stockholders’ equity:
Class A common stock, $0.0001 par value, 900,000,000 shares authorized, 143,620,486 shares and 140,773,223 shares issued and outstanding, respectively
14 14 
Class B common stock, $0.0001 par value, 500,000,000 shares authorized, 1,908,827 shares and 3,856,175 shares issued and outstanding, respectively
— — 
Accumulated deficit(2,829,487)(3,066,578)
Additional paid-in-capital4,096,658 4,027,560 
Accumulated other comprehensive (loss) income(1,186)17 
Total Nextracker Inc. stockholders’ equity1,265,999961,013
Non-controlling interest16,31931,015
Total stockholders’ equity1,282,318992,028
Total liabilities and stockholders’ equity$2,768,659$2,518,782
The accompanying notes are an integral part of these condensed consolidated financial statements.
3

Nextracker Inc.
Unaudited condensed consolidated statements of operations and comprehensive income
(In thousands, except share and per share amounts)
Three-month periods endedSix-month periods ended
September 27, 2024September 29, 2023September 27, 2024September 29, 2023
Revenue$635,571 $573,357 $1,355,492 $1,052,900 
Cost of sales410,776 424,247 893,257 790,046 
Gross profit224,795 149,110 462,235 262,854 
Selling, general and administrative expenses72,127 47,872 132,954 82,107 
Research and development19,193 7,146 35,712 12,775 
Operating income133,475 94,092 293,569 167,972 
Interest expense3,665 3,646 6,945 6,748 
Other (income) expense, net(7,382)5,038 (2,514)3,070 
Income before income taxes137,192 85,408 289,138 158,154 
Provision for income taxes19,928 3,999 47,080 13,100 
Net income and comprehensive income117,264 81,409 242,058 145,054 
Less: Net income attributable to non-controlling interests and redeemable non-controlling interests 1,873 42,156 4,967 85,372 
Net income attributable to Nextracker Inc.$115,391 $39,253 $237,091 $59,682 
Earnings per share attributable to Nextracker Inc. common stockholders
Basic$0.80 $0.64 $1.66 $1.10 
Diluted$0.79 $0.55 $1.62 $0.99 
Weighted-average shares used in computing per share amounts:
Basic143,478,959 61,721,709 142,785,176 54,070,140 
Diluted149,079,198 147,141,142 149,150,663 147,008,353 
The accompanying notes are an integral part of these condensed consolidated financial statements.
4

Nextracker Inc.
Unaudited condensed consolidated statements of stockholders’ equity (deficit) and redeemable interest
(In thousands, except share amounts)
Class A common stockClass B common stock
Three-month period ended September 27, 2024Shares outstandingAmountsShares outstandingAmountsAdditional paid-in-capitalAccumulated deficitAccumulated other comprehensive income (loss)
Total Nextracker Inc. stockholders’ equity
Non-controlling interests
Total stockholders’ equity
BALANCE AT JUNE 28, 2024143,391,305 $14 1,908,827 $— $4,066,773 $(2,944,878)$(522)$1,121,387 $15,244 $1,136,631 
Net income— — — — — 115,391 — 115,391 1,873 117,264 
Stock-based compensation expense— — — — 29,885 — — 29,885 — 29,885 
Vesting of Nextracker Inc. RSU awards229,181 — — — — — — — — — 
Tax distribution— — — — — — — — (798)(798)
Total other comprehensive loss— — — — — — (664)(664)— (664)
BALANCE AT SEPTEMBER 27, 2024143,620,486 $14 1,908,827 $— $4,096,658 $(2,829,487)$(1,186)$1,265,999 $16,319 $1,282,318 

Class A common stockClass B common stock
Three-month period ended September 29, 2023Redeemable non-controlling interestsShares outstandingAmountsShares outstandingAmountsAdditional paid-in-capitalAccumulated deficitTotal stockholders' deficit
BALANCE AT JUNE 30, 2023$3,909,522 46,422,308 $5 98,204,522 $10 $— $(3,352,390)$(3,352,375)
Net income42,156 — — — — — 39,253 39,253 
Stock-based compensation expense and other— — — — — 18,216 — 18,216 
Vesting of Nextracker Inc. RSU awards— 42,605 — — — — — — 
Issuance of Class A common stock sold in follow-on offering— 15,631,562 1 — 552,008 552,009 
Use of Follow-on proceeds as consideration for Yuma’s transfer of LLC common units
— — — (15,631,562)(2)(552,007)— (552,009)
Value adjustment of tax receivable agreement— — — — 18,337 — 18,337 
Reclassification of redeemable non-controlling interest(622,292)— — — 622,292 — 622,292 
Redemption value adjustment(13,256)— — — — 13,256 — 13,256 
BALANCE AT SEPTEMBER 29, 2023$3,316,130 62,096,475 $6 82,572,960 $8 $672,102 $(3,313,137)$(2,641,021)




5

Nextracker Inc.
Unaudited condensed consolidated statements of stockholders’ equity (deficit) and redeemable interest (continued)
(In thousands, except share amounts)
Class A common stockClass B common stock
Six-month period ended September 27, 2024Shares outstandingAmountsShares outstandingAmountsAdditional paid-in-capitalAccumulated deficitAccumulated other comprehensive income (loss)
Total Nextracker Inc. stockholders’ equity
Non-controlling interests
Total stockholders’ equity
BALANCE AT MARCH 31, 2024140,773,223 $14 3,856,175 $— $4,027,560 $(3,066,578)$17 $961,013 $31,015 $992,028 
Net income— — — — — 237,091 — 237,091 4,967 242,058 
Stock-based compensation expense— — — — 51,786 — — 51,786 — 51,786 
Vesting of Nextracker Inc. RSU awards899,915 — — — — — — — — — 
Shares exchanged by non-controlling interest holders1,947,348 — (1,947,348)— 13,551 — — 13,551 (13,551)— 
TRA revaluation— — — — 3,761 — — 3,761 — 3,761 
Tax distribution— — — — — — — — (6,112)(6,112)
Total other comprehensive loss— — — — — — (1,203)(1,203)— (1,203)
BALANCE AT SEPTEMBER 27, 2024143,620,486 $14 1,908,827 $— $4,096,658 $(2,829,487)$(1,186)$1,265,999 $16,319 $1,282,318 

Class A common stockClass B common stock
Six-month period ended September 29, 2023Redeemable non-controlling interestsShares outstandingAmountsShares outstandingAmountsAdditional paid-in-capitalAccumulated deficitTotal stockholders' deficit
BALANCE AT MARCH 31, 2023
$3,560,628 45,886,065 $5 98,204,522 $10 $— $(3,075,782)$(3,075,767)
Net income85,372 — — — — — 59,682 59,682 
Stock-based compensation expense and other— — — — — 26,857 — 26,857 
Vesting of Nextracker Inc. RSU awards— 578,848 — — — — — — 
Issuance of Class A common stock sold in follow-on offering— 15,631,562 1 — — 552,008 — 552,009 
Use of Follow-on proceeds as consideration for Yuma’s transfer of LLC common units
— — — (15,631,562)(2)(552,007)— (552,009)
Value adjustment of tax receivable agreement— — — — — 18,337 — 18,337 
Reclassification of redeemable non-controlling interest(622,292)— — — — 622,292 — 622,292 
Redemption value adjustment292,422 — — — — 4,615 (297,037)(292,422)
BALANCE AT SEPTEMBER 29, 2023$3,316,130 62,096,475 $6 82,572,960 $8 $672,102 $(3,313,137)$(2,641,021)
The accompanying notes are an integral part of these condensed consolidated financial statements.

6

Nextracker Inc.
Unaudited condensed consolidated statements of cash flows
(In thousands)
Six-month periods ended
September 27, 2024September 29, 2023
Cash flows from operating activities:
Net income$242,058 $145,054 
Depreciation and amortization3,883 2,020 
Changes in working capital and other, net28,686 105,603 
Net cash provided by operating activities274,627 252,677 
Cash flows from investing activities:
Purchases of property and equipment(14,900)(1,406)
Payment for business acquisitions, net of cash acquired(144,675)— 
Net cash used in investing activities(159,575)(1,406)
Cash flows from financing activities:
Repayment of bank borrowings(1,875)— 
Net proceeds from issuance of Class A shares— 552,009 
Purchase of LLC common units from Yuma, Inc.— (552,009)
Payment of revolver issuance cost(3,715)— 
TRA payment(15,520)— 
Distribution to non-controlling interest holders(6,112)— 
Net transfers to Flex— (8,335)
Other financing activities— (26)
Net cash used in financing activities(27,222)(8,361)
Net increase in cash and cash equivalents87,830 242,910 
Cash and cash equivalents beginning of period474,054 130,008 
Cash and cash equivalents end of period$561,884 $372,918 

Non-cash investing and financing activities:
Unpaid purchases of property and equipment$1,482 $1,059 
Right-of-use assets obtained in exchange of lease liabilities8,498 — 
TRA revaluation3,761 18,337 
Unpaid debt issuance cost2,300—
Reclassification of redeemable non-controlling interest— 622,292 
The accompanying notes are an integral part of these condensed consolidated financial statements.

7
NEXTRACKER
Notes to the unaudited condensed consolidated financial statements
1.Description of business and organization of Nextracker Inc.
Nextracker Inc. and its subsidiaries (“Nextracker,” “we,” the “Company”) is 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. Nextracker’s products enable solar PV power plants to follow the sun’s movement across the sky and optimize plant performance. Nextracker has operations in the United States, Brazil, Argentina, Peru, Mexico, Spain and other countries in Europe, India, Australia, the Middle East and Africa.
2.Summary of accounting policies
Variable interest entities (“VIE”) and consolidation
The Company’s sole material asset is its member’s interest in Nextracker LLC. In accordance with the Nextracker LLC Operating Agreement, the Company was named the managing member of Nextracker LLC. As a result, the Company has all management powers over the business and affairs of Nextracker LLC and to conduct, direct and exercise full control over the activities of Nextracker LLC. The Company has concluded that Nextracker LLC is a VIE. Due to the Company’s power to control the activities most directly affecting the results of Nextracker LLC, the Company is considered the primary beneficiary of the VIE. Accordingly, the Company consolidates the financial results of Nextracker LLC and its subsidiaries. On January 2, 2024, Flex Ltd. (“Flex”) closed the spin-off of all its remaining interests in Nextracker LLC common units held by Yuma, Inc., a Delaware corporation (“Yuma”), Yuma Subsidiary, Inc., a Delaware corporation and wholly-owned subsidiary of Yuma (“Yuma Sub”), to Flex shareholders. As a result of the spin-off, Flex no longer directly or indirectly holds a financial interest in the Company. Nextracker LLC common units held by Yuma, Yuma Sub, TPG Rise Flash, L.P. (“TPG Rise”) and the following affiliates of TPG Inc. (“TPG”): 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”) were presented on the consolidated balance sheets as temporary equity under the caption “Redeemable non-controlling interests,” up until January 2, 2024 as redemption was outside of the control of the Company. Post January 2, 2024, redemption is no longer outside the control of the Company subsequent to the spin-off from Flex and, therefore, the non-controlling interests owned by the TPG Affiliates are now presented on the consolidated balance sheets as permanent equity under the caption “non-controlling interests.”
Basis of presentation
The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC for reporting financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements, and should be read in conjunction with the Company’s audited consolidated financial statements as of and for the fiscal year ended March 31, 2024, contained in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2024 (the “Form 10-K”). In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary to present the Company’s financial statements fairly have been included. Operating results for the three and six-month periods ended September 27, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2025 or any future period. The condensed consolidated balance sheet as of March 31, 2024 was derived from the Company’s audited consolidated financial statements included in the Form 10-K. All intercompany transactions and accounts within Nextracker have been eliminated.
The first quarters for fiscal years 2025 and 2024 ended on June 28, 2024 (89 days) and June 30, 2023 (91 days), respectively. The second quarters for fiscal years 2025 and 2024 ended on September 27, 2024 (91 days) and September 29, 2023 (91 days), respectively.
Translation of foreign currencies
The reporting currency of the Company is the United States dollar (“USD”). The functional currency of the Company and its subsidiaries is primarily the USD. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in other (income) expense, net in the accompanying condensed consolidated statements of operations and comprehensive income when realized. The Company recognized foreign currency exchange gains of $2.4 million during the three-month period ended September 27, 2024 driven by favorable exchange rate fluctuations in Europe. Additionally, during the six-month period ended September 27, 2024, the Company recognized foreign currency exchange losses of $7.4 million due to unfavorable exchange rate fluctuations primarily in Latin

8
NEXTRACKER
Notes to the unaudited condensed consolidated financial statements
America. The Company recognized $3.0 million and $2.6 million foreign currency exchange losses during the three and six-month periods ended September 29, 2023, respectively, due to unfavorable exchange rate fluctuations in certain currencies.
Use of estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. Estimates are used in accounting for, among other things: impairment of goodwill, impairment of long-lived assets, allowance for credit losses, provision for excess or obsolete inventories, valuation of deferred tax assets, warranty reserves, contingencies, operation-related accruals, fair values of awards granted under stock-based compensation plans and fair values of assets obtained and liabilities assumed in business combinations. Due to geopolitical conflicts (including the Russian invasion of Ukraine and the Israel-Hamas conflict), there has been and will continue to be uncertainty and disruption in the global economy and financial markets. The Company has made estimates and assumptions taking into consideration certain possible impacts due to the Russian invasion of Ukraine and the Israel-Hamas conflict. These estimates may change as new events occur and additional information is obtained. Actual results may differ from previously estimated amounts, and such differences may be material to the condensed consolidated financial statements. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period they occur. Management believes that these estimates and assumptions provide a reasonable basis for the fair presentation of the condensed consolidated financial statements.
Accounting for business acquisitions
From time to time, the Company pursues business acquisitions. The fair value of the net assets acquired and the results of the acquired businesses are included in the Company’s condensed consolidated financial statements from the acquisition dates forward. The Company is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and results of operations during the reporting period. Estimates are used in accounting for, among other things, the fair value of acquired net operating assets, property and equipment, intangible assets, contingent earnout, useful lives of plant and equipment and amortizable lives for acquired intangible assets. Any excess of the purchase consideration over the fair value of the identified assets and liabilities acquired is recognized as goodwill.
The Company estimates the preliminary fair value of acquired assets and liabilities as of the date of acquisition based on information available at that time. The valuation of these tangible and identifiable intangible assets and liabilities is subject to further review from management and may change materially between the preliminary allocation and end of the purchase price allocation period. Any changes in these estimates may have a material effect on the Company’s condensed consolidated financial position and results of operations.
Product warranty
Nextracker offers an assurance type warranty for its products against defects in design, materials and workmanship for a period ranging from five to ten years, depending on the component. For these assurance type warranties, a provision for estimated future costs related to warranty expense is recorded when they are probable and reasonably estimable, which is typically when products are delivered. The estimated warranty liability is based on our warranty model, which relies on historical warranty claim information and assumptions based on the nature, frequency and average cost of claims for each product line by project. When little or no experience exists, the estimate is based on comparable product lines and/or estimated potential failure rates. These estimates are based on data from Nextracker specific projects. Estimates related to the outstanding warranty liability are re-evaluated on an ongoing basis using best-available information and revisions are made as necessary.

9
NEXTRACKER
Notes to the unaudited condensed consolidated financial statements
The following table summarizes the activity related to the estimated accrued warranty reserve for the six-month periods ended September 27, 2024 and September 29, 2023:
Six-month periods ended
September 27, 2024September 29, 2023
(In thousands)
Beginning balance$12,511 $22,591 
Provision (release) for warranties issued5,268 (2,614)
Payments(2,879)(883)
Ending balance$14,900 $19,094 
Inventories
Inventories are stated at the lower of cost, determined on a weighted average basis, or net realizable value. Nextracker’s inventory primarily consists of finished goods to be used and to be sold to customers, including components procured to complete the tracker system projects.
Other current assets
Other current assets includes short-term deposits and advances of $74.3 million and $104.7 million as of September 27, 2024 and March 31, 2024, respectively, primarily related to advance payments to certain vendors for procurement of inventory. In addition, it includes $167.2 million and $125.4 million as of September 27, 2024 and March 31, 2024, respectively, in vendor rebates receivable related to the 45X Credit as described under the section “Inflation Reduction Act of 2022 Vendor Rebates” of Note 2 in the notes to the consolidated financial statements in the Form 10-K.
Deferred tax assets
Deferred tax assets of $472.4 million and $438.3 million as of September 27, 2024 and March 31, 2024, respectively, are primarily related to the Company’s investment in Nextracker LLC as described in Note 13 in the notes to the consolidated financial statements included in the Form 10-K and release of valuation allowance related to the acquired foundations business acquisitions described in Note 11.
Accrued expenses
Accrued expenses include accruals primarily for freight and tariffs of $50.6 million and $43.2 million as of September 27, 2024 and March 31, 2024, respectively. In addition, it includes $26.5 million and $39.2 million of accrued payroll as of September 27, 2024 and March 31, 2024, respectively.
TRA liability
TRA liability related to the amount expected to be paid to Flex, TPG and the TPG Affiliates pursuant to the Tax Receivable Agreement, were $399.1 million and $391.6 million, as of September 27, 2024 and March 31, 2024, respectively. During the three-month period ended September 27, 2024, a payment of $15.5 million was made to Flex, TPG and the TPG Affiliates, which is presented as financing activity on the condensed consolidated statement of cash flows.
Other liabilities
Other liabilities primarily consist of the long-term portion of standard product warranty liabilities of $6.3 million and $6.4 million, and the long-term portion of deferred revenue of $95.5 million and $69.3 million as of September 27, 2024 and March 31, 2024, respectively.
Recently issued accounting pronouncement
Accounting Standards Update 2023-07, Segment Reporting—Improvement to Reportable Segment Disclosures: In November 2023, the Financial Accounting Standards Board issued a new accounting standard which updates reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess

10
NEXTRACKER
Notes to the unaudited condensed consolidated financial statements
segment performance. The annual reporting requirements of the new standard is effective for the Company beginning in fiscal year 2025 and interim reporting requirements beginning in the first quarter of fiscal year 2026, with early adoption permitted. The Company expects to adopt the new guidance in the fourth quarter of fiscal year 2025 with an immaterial impact on its consolidated financial statements.
3.Revenue
Based on Accounting Standards Codification (“ASC”) 606 provisions, the Company disaggregates its revenue from contracts with customers by those sales recorded over time and sales recorded at a point in time. The following table presents Nextracker’s revenue disaggregated based on timing of transfer-point in time and over time for the three and six-month periods ended September 27, 2024 and September 29, 2023:
Three-month periods endedSix-month periods ended
September 27, 2024September 29, 2023September 27, 2024September 29, 2023
(In thousands)
Timing of Transfer
Point in time$20,286$21,263$31,006$26,904
Over time615,285552,0941,324,4861,025,996
Total revenue$635,571$573,357$1,355,492$1,052,900
Contract balances
The timing of revenue recognition, billings and cash collections results in contract assets and contract liabilities (deferred revenue) on the condensed consolidated balance sheets. Nextracker’s contract amounts are billed as work progresses in accordance with agreed-upon contractual terms, which generally coincide with the shipment of one or more phases of the project. When billing occurs subsequent to revenue recognition, a contract asset results. Contract assets of $360.0 million and $397.1 million as of September 27, 2024 and March 31, 2024, respectively, are presented in the condensed consolidated balance sheets, of which $143.9 million and $141.4 million, respectively, will be invoiced at the end of the projects as they represent funds withheld until the products are installed by a third party, arranged by the customer, and the project is declared operational. The remaining unbilled receivables will be invoiced throughout the project based on a set billing schedule such as milestones reached or completed rows delivered. Contract assets decreased $37.1 million from March 31, 2024 to September 27, 2024 due to fluctuations in the timing and volume of billings for the Company’s revenue recognized over time.
During the six-month periods ended September 27, 2024 and September 29, 2023, Nextracker converted $133.4 million and $119.2 million of deferred revenue to revenue, respectively, which represented 45% and 56%, respectively, of the beginning period balance of deferred revenue.
Remaining performance obligations
As of September 27, 2024, Nextracker had $332.3 million of the transaction price allocated to the remaining performance obligations. The Company expects to recognize revenue on approximately 71% of these performance obligations in the next 12 months. The remaining long-term unperformed obligation primarily relates to extended warranty and deposits collected in advance on certain tracker projects.
4.Goodwill and intangible assets
Goodwill
During the six-month period ended September 27, 2024, the addition in the Company’s goodwill is driven by its acquisitions of Ojjo, Inc. (“Ojjo”) and the solar foundations business held by Solar Pile International (“SPI”) as further described in Note 11.

11
NEXTRACKER
Notes to the unaudited condensed consolidated financial statements
The following table summarizes the activity in the Company’s goodwill during the six-month period ended September 27, 2024 (in thousands):
Balance as of March 31, 2024$265,153
Additions103,565
Purchase accounting adjustments 1,895
Balance as of September 27, 2024$370,613
Other intangible assets
During the six-month period ended September 27, 2024, the total gross value of other intangible assets increased by $49.7 million as a result of the Company’s initial estimated value of other intangible assets from its business acquisitions, which contributed an additional $31.7 million of developed technology and $18.0 million of customer relationships. Refer to Note 11 for additional information.
The components of identifiable intangible assets are as follows:
As of September 27, 2024As of March 31, 2024
Gross
carrying
amount		Accumulated
amortization		Net
carrying
amount		Gross
carrying
amount		Accumulated
amortization		Net
carrying
amount
(In thousands)
Developed technology$31,700$(809)$30,891$—$—$—
Customer relationships18,000(979)17,021———
Trade name and other intangibles3,000(1,629)1,3713,000(1,454)1,546
Total$52,700$(3,417)$49,283$3,000$(1,454)$1,546
The gross carrying amount of other intangible assets are removed when fully amortized. Total intangible asset amortization expense recognized in operations was immaterial for the periods presented.
The estimated future annual amortization expense for other intangible assets is as follows:
Fiscal year ending March 31,Amount
(In thousands)
2025 (1)$3,560
20267,120
20277,120
20287,091
20296,945
Thereafter17,447
Total amortization expense$49,283
(1)Represents estimated amortization for the remaining fiscal six-month period ending March 31, 2025.
5.Stock-based compensation
The Company adopted the First Amended and Restated 2022 Nextracker LLC Equity Incentive Plan in April 2022 (the “LLC Plan”), which provides for the issuance of options, unit appreciation rights, performance units, performance incentive units, restricted incentive units and other unit-based awards to employees, directors and consultants of the Company. Additionally, in connection with the Company’s initial public offering in February 2023 (the “IPO”), the Company approved the Second Amended and Restated 2022 Nextracker Inc. Equity Incentive Plan (together with the LLC Plan, the “2022 Plan”) to reflect, among other things, that the underlying equity interests with respect to awards issued under the LLC Plan shall, in lieu of

12
NEXTRACKER
Notes to the unaudited condensed consolidated financial statements
common units of Nextracker LLC, relate to Class A common stock of Nextracker for periods from and after the closing of the IPO.
The following table summarizes the Company’s stock-based compensation expense:
Three-month periods endedSix-month periods ended
September 27, 2024September 29, 2023September 27, 2024September 29, 2023
(In thousands)
Cost of sales$2,481$3,245$6,261$5,171
Selling, general and administrative expenses25,41714,97140,70421,686
Research and development1,987—4,821—
Total stock-based compensation expense$29,885$18,216$51,786$26,857
During the six-month period ended September 27, 2024, the Company granted 1.6 million time-based unvested restricted share units (“RSU”) awards to certain of its employees under the 2022 Plan. The vesting for these unvested RSU awards is contingent upon time-based vesting with continued service over a three-year period from the grant date, with a portion of the awards vesting at the end of each year. The weighted average fair value per share of the RSUs granted during the period was estimated to be $41.68 per award.
In addition, the Company also granted 0.4 million performance-based vesting (“PSU”) awards whereby vesting is generally contingent upon (i) time-based vesting with continued service through March 31, 2027, and (ii) the achievement of certain metrics specific to the Company, which could result in a range of 0-300% of such PSUs ultimately vesting. The weighted average fair value per share of the PSUs granted during the period was estimated to be $58.30 per award. The fair value of these PSU awards granted during the six-month period ended September 27, 2024 was determined using Monte-Carlo simulation models, which is a probabilistic approach for calculating the fair value of the awards. Also, 0.3 million PSU awards related to the third tranche of performance-based awards granted in fiscal year 2023 met the criteria for a grant date under ASC 718 as the performance metrics for these awards were determined during the six-month period ended September 27, 2024. The weighted average fair value per share of these PSU awards granted in fiscal year 2023 was estimated to be $111.56 per award, determined using a Monte-Carlo simulation model.
Further, the Company granted 0.3 million option awards that will cliff-vest on the third anniversary of the grant date, subject generally to continuous service through such vesting date. The exercise price for the shares underlying such option is equal to $47.05 per award, which corresponds to the Company’s closing price per share as of the grant date of the awards. The fair value of these option awards granted during the six-month period ended September 27, 2024 was estimated to be $29.05 based on a Black-Scholes option pricing model.
Additionally, during the six-month period ended September 27, 2024, an immaterial number of awards were forfeited due to employee terminations.
The total unrecognized compensation expense related to unvested awards under the 2022 Plan as of September 27, 2024 was approximately $161.0 million, which is expected to be recognized over a weighted-average period of approximately 1.7 years.
6.Earnings per share
Basic earnings per share excludes dilution and is computed by dividing net income attributable to Nextracker Inc. common stockholders by the weighted-average number of shares of Class A common stock outstanding during the applicable periods.
Diluted earnings per share reflects the potential dilution from stock-based compensation awards. The potential dilution from awards was computed using the treasury stock method based on the average fair market value of the Company’s common stock for the period. Additionally, the potential dilution impact of Class B common stock convertible into Class A common stock was also considered in the calculation.

13
NEXTRACKER
Notes to the unaudited condensed consolidated financial statements
The computation of earnings per share and weighted average shares outstanding of the Company’s common stock for the period is presented below:
Three-month periods ended
September 27, 2024September 29, 2023
IncomeWeighted average shares outstandingPer shareIncomeWeighted average shares outstandingPer share
NumeratorDenominatorAmountNumeratorDenominatorAmount
(In thousands, except share and per share amounts)
Basic EPS
Net income attributable to Nextracker Inc. common stockholders$115,391 143,478,959 $0.80 $39,253 61,721,709 $0.64 
Effect of Dilutive Impact
Common stock equivalents from Options awards (1)1,159,734 1,013,988 
Common stock equivalents from RSUs (2)1,294,584 1,106,310 
Common stock equivalents from PSUs (3)1,237,094 382,624 
Income attributable to non-controlling interests and common stock equivalent from Class B common stock$1,873 1,908,827 $42,156 82,916,511 
Diluted EPS
Net income$117,264 149,079,198 $0.79 $81,409 147,141,142 $0.55 
(1)During the three-month periods ended September 27, 2024 and September 29, 2023, approximately 0.8 million and 0.5 million of Options awards, respectively, were excluded from the computation of diluted earnings per share due to their anti-dilutive impact on the weighted-average ordinary share equivalents.
(2)During the three-month periods ended September 27, 2024 and September 29, 2023, approximately 0.8 million and 0.4 million of RSU awards, respectively, were excluded from the computation of diluted earnings per share due to their anti-dilutive impact on the weighted-average ordinary share equivalents.
(3)During the three-month periods ended September 27, 2024 and September 29, 2023, approximately 0.7 million and 0.4 million of PSU awards, respectively, were excluded from the computation of diluted earnings per share due to their anti-dilutive impact on the weighted-average ordinary share equivalents.


14
NEXTRACKER
Notes to the unaudited condensed consolidated financial statements
Six-month periods ended
September 27, 2024September 29, 2023
IncomeWeighted average shares outstandingPer shareIncomeWeighted average shares outstandingPer share
NumeratorDenominatorAmountNumeratorDenominatorAmount
(In thousands, except share and per share amounts)
Basic EPS
Net income attributable to Nextracker Inc. common stockholders$237,091 142,785,176 $1.66 $59,682 54,070,140 $1.10 
Effect of Dilutive Impact
Common stock equivalents from Options awards (1)1,273,829 955,488 
Common stock equivalents from RSUs (2)1,378,883 996,010 
Common stock equivalents from PSUs (3)1,235,060 426,199 
Income attributable to non-controlling interests and common stock equivalent from Class B common stock$4,967 2,477,715 $85,372 90,560,516 
Diluted EPS
Net income$242,058 149,150,663 $1.62 $145,054 147,008,353 $0.99 
(1)During the six-month periods ended September 27, 2024 and September 29, 2023, approximately 0.8 million and 0.5 million of Options awards, respectively, were excluded from the computation of diluted earnings per share due to their anti-dilutive impact on the weighted-average ordinary share equivalents.
(2)During the six-month periods ended September 27, 2024 and September 29, 2023, approximately 0.5 million and 0.4 million of RSU awards, respectively, were excluded from the computation of diluted earnings per share due to their anti-dilutive impact on the weighted-average ordinary share equivalents.
(3)During the six-month periods ended September 27, 2024 and September 29, 2023, approximately 0.7 million and 0.4 million of PSU awards, respectively, were excluded from the computation of diluted earnings per share due to their anti-dilutive impact on the weighted-average ordinary share equivalents.
7.Bank borrowings and long-term debt
On June 21, 2024, the Company and Nextracker LLC (the “LLC”), as the borrower, entered into an amendment (the “Amendment”) to the credit agreement, dated as of February 13, 2023 (“2023 Credit Agreement” and, together with the Amendment, the “Amended 2023 Credit Agreement”). The Amendment amended the 2023 Credit Agreement to, among other things: (i) increase the aggregate revolving commitments from $500.0 million to $1.0 billion; (ii) provide for a $1.0 billion secured debt basket for surety bonds; (iii) increase the letter of credit capacity from $300.0 million to $500.0 million; and (iv) update various covenants, baskets and thresholds to provide more financing capacity and operational flexibility to the Company and the LLC. Subject to the satisfaction of certain conditions, the LLC may be permitted to request incremental term loan facilities under the credit facility from one or more lenders. As a result of the Amendment, the Company capitalized $6.0 million of issuance cost for the revolver included in other assets in the condensed consolidated balance sheets. As of September 27, 2024, no amounts were drawn under the revolving facility, and the Company was in compliance with all applicable covenants under its Amended 2023 Credit Agreement, the term loan and the revolving credit facility.
8.Commitments and contingencies
Litigation and other legal matters
Nextracker has accrued for a loss contingency to the extent it believes that losses are probable and estimable. The amounts accrued are not material, but it is reasonably possible that actual losses could be in excess of Nextracker’s accrual. Any related

15
NEXTRACKER
Notes to the unaudited condensed consolidated financial statements
excess loss could have a material adverse effect on Nextracker’s results of operations or cash flows for a particular period or on Nextracker’s financial condition.
On February 6, 2024, pursuant to the Third Amended and Restated Limited Liability Company Agreement of Nextracker LLC (the “LLC Agreement”), Nextracker LLC made pro rata tax distributions in an aggregate amount of $94.3 million to the common members of the LLC, including an aggregate of $48.5 million to Yuma Acquisition Sub LLC and Yuma Subsidiary, Inc. As of the date of the tax distribution, Yuma Acquisition Sub LLC and Yuma Subsidiary Inc. were wholly-owned subsidiaries of Nextracker Inc. On February 1, 2024, Flex sent a dispute notice to Nextracker Inc. asserting that Flex is entitled to the distribution that was subsequently made to Yuma Acquisition Sub LLC and Yuma Subsidiary, Inc. and demanding payment of that amount to Flex. It is too early to determine the likelihood that the Company will be required to make any such payments to Flex in the future.
9.Income taxes
The Company follows the guidance under ASC 740-270, “Interim Reporting,” which requires a company to calculate the income tax associated with ordinary income using an estimated annual effective tax rate (“AETR”). At the end of each interim period, the Company applies the AETR to year-to-date (“YTD”) ordinary income (or loss) to arrive at the YTD income tax expense. The Company records the tax effect of discrete items in the quarter in which the discrete events occur.
The following table presents income tax expense recorded by the Company along with the respective consolidated effective tax rates for each period presented. For the three and six-month periods ended September 27, 2024, the difference between the effective tax rate and the U.S. statutory corporate tax rate of 21% is primarily attributable to the benefit of the foreign derived intangible income deduction and foreign tax credits, partially offset by U.S. state and local income taxes and jurisdictional mix of income between the U.S. and other operating jurisdictions.
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.
For the three and six-month periods ended September 29, 2023, the difference between the effective tax rate and the U.S. statutory corporate tax rate of 21% is primarily attributable to certain non-controlling interests in Nextracker LLC, which is not taxable to Nextracker Inc. and its subsidiaries, partially offset by U.S. state and local income taxes and the jurisdictional mix of income between the U.S. and other operating jurisdictions. In addition, there was a change in accounting estimate related to the Tax Receivable Agreement which resulted in a discrete benefit of $6.7 million.
Three-month periods endedSix-month periods ended
September 27, 2024September 29, 2023September 27, 2024September 29, 2023
(In thousands, except percentages)
Income tax19,9283,99947,08013,100
Effective tax rates14.5%4.7%16.3%8.3%
The increase in tax expense as well as effective tax rate from the three and six-month periods ended September 29, 2023 to the three and six-month periods 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.

16
NEXTRACKER
Notes to the unaudited condensed consolidated financial statements
Tax distributions
During the six-month period ended September 27, 2024, and pursuant to the LLC Agreement, Nextracker LLC made pro rata tax distributions to its non-controlling interest holder (TPG) in the aggregate amount of approximately $6.1 million.
10.Segment reporting
Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the Chief Operating Decision Maker (“CODM”), or a decision-making group, in deciding how to allocate resources and in assessing performance. Resource allocation decisions and Nextracker’s performance are assessed by its Chief Executive Officer, identified as the CODM.
For all periods presented, Nextracker has one operating and reportable segment. The following table sets forth geographic information of revenue based on the locations to which the products are shipped:
Three-month periods endedSix-month periods ended
September 27, 2024September 29, 2023September 27, 2024September 29, 2023
Revenue:
(In thousands)
U.S.$461,806$382,160$973,288$652,498
Rest of the World173,765191,197382,204400,402
Total$635,571$573,357$1,355,492$1,052,900
The United States is the principal country of domicile.
11.Business acquisitions
Foundations business
During the six-month period ended September 27, 2024, the Company completed two acquisitions. On June 20, 2024, as part of an all-cash transaction, the Company acquired 100% of the interest in 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, the Company closed the acquisition of the solar foundations business held by SPI through the purchase of Spinex Systems Inc. and assets held by other SPI affiliates.
The acquisitions of Ojjo and the foundations business of SPI (“Foundations acquisitions”) expand the Company’s foundations offering by accelerating its capability to offer customers a more complete integrated solution for solar trackers and foundations. The development of any utility-scale project is a long and complex process. Foundations are a key part of every utility-scale solar project installation. In addition, projects are often confronted with unique challenges related to land use considerations and exceptional variation in subsurface conditions. The Company believes there is additional value for its customers in combining tracker systems and foundations to form an integrated solution, particularly for difficult and unique soil conditions.
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.
The contingent earnout has a maximum possible consideration of $6.0 million upon the achievement of future revenue performance targets, measured in megawatts (“MW”), over a four-year period starting October 1, 2024. The fair value of the contingent earnout liability as of the acquisition date was estimated to be $2.6 million based on a Monte-Carlo simulation model, which is a probabilistic approach used to simulate future revenue and calculate the potential contingent consideration payments for each simulated path. The inputs are unobservable in the market and therefore categorized as Level 3 inputs in the fair value measurement.
The Company incurred approximately $3.7 million of acquisition costs which are presented as selling, general and administrative expenses on the condensed consolidated statement of operations and comprehensive income. The preliminary allocation of the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed was based on their preliminary estimated fair values as of the date of acquisitions. The excess of the purchase price over the tangible and identifiable intangible assets acquired and liabilities assumed has been allocated to goodwill. Goodwill is not deductible for

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NEXTRACKER
Notes to the unaudited condensed consolidated financial statements
income tax purposes. The results of operations of the acquisitions were included in the Company’s condensed consolidated financial statements beginning on the date of acquisition and were not material for all periods presented.
Additional information, which existed as of the acquisition dates, may become known to the Company during the remainder of the measurement period, a period not to exceed 12 months from the date of the relevant acquisition. Changes to amounts recorded as assets and liabilities may result in a corresponding adjustment to goodwill during the respective measurement period.
The following represents the Company’s preliminary allocation of the Foundations acquisitions total aggregate purchase price to the acquired assets and liabilities (in thousands):
Current assets$5,547 
Property and equipment23,977 
Intangible assets49,700 
Goodwill105,460 
Other assets4,232 
Total assets188,916 
Current liabilities17,467 
Other liabilities, non-current6,732 
Total purchase price, net of cash acquired$164,717 
Intangible assets are comprised of $31.7 million of developed technology to be amortized over an estimated useful life of ten years, and $18.0 million of customer relationships to be amortized over an estimated useful life of five years. The fair value assigned to the identified intangible assets was estimated based on an income approach, which provides an indication of fair value based on the present value of cash flows that the acquired business is expected to generate in the future. Key assumptions used in the valuation included forecasted revenues, cost of sales and operating expenses, royalty rate, discount rate and weighted average cost of capital. The useful life of the acquired intangible assets for amortization purposes was determined by considering the period of expected cash flows used to measure the fair values of the asset, adjusted for certain factors that may limit the useful life.
Pro-forma results of operations have not been presented because the effects were not material to the Company’s condensed consolidated financial results for all periods presented.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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.
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

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“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.
OVERVIEW
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.
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.
We have shipped more than 100 GW of solar tracker systems as of September 27, 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.
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.
Business acquisitions
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.
The acquisitions of Ojjo and the foundations business of SPI (“Foundations acquisitions”) expand our foundations offering by accelerating our capability to offer customers a more complete integrated solution for solar trackers and foundations. The development of any utility-scale project is a long and complex process. Foundations are a key part of every utility-scale solar project installation. In addition, projects are often confronted with unique challenges related to land use considerations and exceptional variation in subsurface conditions. We believe there is additional value for our customers in combining tracker systems and foundations to form an integrated solution, particularly for difficult and unique soil conditions.
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.

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Inflation Reduction Act of 2022 (“IRA”)
On August 16, 2022, the IRA was enacted into law, which includes a new corporate minimum tax, a stock repurchase excise tax, numerous green energy credits, other tax provisions and significantly increased enforcement resources. The Section 45X of the Internal Revenue Code of 1986, as amended Advanced Manufacturing Production Credit (“45X Credit”), which was established as part of the IRA, is a per-unit tax credit earned over time for each clean energy component domestically produced and sold by a manufacturer.
We have executed agreements with certain suppliers to ramp up our U.S. manufacturing footprint. These suppliers produce 45X Credit eligible parts, including torque tubes and structural fasteners, that will then be incorporated into a solar tracker. The 45X Credit was eligible for domestic parts manufactured after January 1, 2023. We have contractually agreed with these suppliers to share a portion of the economic value of the credit related to our purchases in the form of a vendor rebate. We account for these vendor rebate amounts as a reduction of the purchase price of the parts acquired from the vendor and therefore a reduction of inventory until the control of the part is transferred to the customer, at which point we recognize such amounts as a reduction of cost of sales on the consolidated statements of operations and comprehensive income. During the fourth quarter of fiscal 2024, we determined the amount and collectability of the 45X Credit vendor rebates we expect to receive in accordance with the vendor contracts and recognized a cumulative reduction to cost of sales of $121.4 million related to 45X Credit vendor rebates earned on production of eligible components shipped to projects starting on January 1, 2023 through March 31, 2024.
The following tables set forth geographic information of revenue based on the locations to which the products are shipped:
Three-month periods endedSix-month periods ended
September 27, 2024September 29, 2023September 27, 2024September 29, 2023
Revenue:
(In thousands, except percentages)
U.S.$461,80673%$382,16067%$973,28872%$652,49862%
Rest of the World173,76527%191,19733%382,20428%$400,40238%
Total$635,571$573,357$1,355,492$1,052,900
The following table sets forth the revenue from customers that individually accounted for greater than 10% of our revenue during the periods included below:
Three-month periods endedSix-month periods ended
September 27, 2024September 29, 2023September 27, 2024September 29, 2023
(In millions)
Customer G$83.4$90.9$192.7$137.3
Critical accounting policies and significant management estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. Estimates are used in accounting for, among other things: impairment of goodwill, impairment of long-lived assets, allowance for credit losses, provision for excess or obsolete inventories, valuation of deferred tax assets, warranty reserves, contingencies, operation-related accruals, fair values of awards granted under stock-based compensation plans and fair values of assets obtained and liabilities assumed in business combinations. We periodically review estimates and assumptions, and the effects of our revisions are reflected in the period they occur. We believe that these estimates and assumptions provide a reasonable basis for the fair presentation of the unaudited condensed consolidated financial statements.
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.

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Accounting for business acquisitions
From time to time, we pursue business acquisitions. The fair value of the net assets acquired and the results of the acquired businesses are included in our unaudited condensed consolidated financial statements from the acquisition dates forward. We are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and results of operations during the reporting period. Estimates are used in accounting for, among other things, the fair value of acquired net operating assets, property and equipment, intangible assets, contingent earnout, useful lives of plant and equipment and amortizable lives for acquired intangible assets. Any excess of the purchase consideration over the fair value of the identified assets and liabilities acquired is recognized as goodwill.
We estimate the preliminary fair value of acquired assets and liabilities as of the date of acquisition based on information available at that time. The valuation of these tangible and identifiable intangible assets and liabilities is subject to further review from management and may change materially between the preliminary allocation and end of the purchase price allocation period. Any changes in these estimates may have a material effect on our unaudited condensed consolidated financial position and results of operations.
Key components of our results of operations
The following discussion describes certain line items in our unaudited condensed consolidated statements of operations and comprehensive income.
Revenue
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.
Cost of sales and gross profit
Cost of sales consists primarily of purchased components net of any incentives or rebates earned from our suppliers, shipping and other logistics costs, applicable tariffs, standard product warranty costs, amortization of certain acquired intangible assets, stock-based compensation and direct labor. Direct labor costs represent expenses of personnel directly related to project execution such as supply chain, logistics, quality, tooling, operations and customer satisfaction. Amortization of intangibles consists of developed technology and certain acquired patents over its expected period of use and is also included under cost of sales.
Steel prices, cost of transportation and labor costs in countries where our suppliers perform manufacturing activities affect our cost of sales. Our ability to lower our cost of sales depends on implementation and design improvements to our products as well as on driving more cost-effective manufacturing processes with our suppliers. We generally do not directly purchase raw materials such as steel or electronic components and do not hedge against changes in their price. Most of our cost of sales are directly affected by sales volume. Personnel costs related to our supply chain, logistics, quality, tooling and operations are not directly impacted by our sales volume.
Operating expenses
Selling, general and administrative expenses
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.

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Research and development
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.
Income tax expense
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.
RESULTS OF OPERATIONS
The financial information and the discussion below should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report.
In addition, reference should be made to our audited consolidated financial statements and notes thereto and related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2024.
Three-month periods endedSix-month periods ended
September 27, 2024September 29, 2023% ChangeSeptember 27, 2024September 29, 2023% Change
Unaudited Condensed Statement of Operations and Comprehensive Income Data:
(In thousands, except percentages)
Revenue$635,571 $573,357 11 %$1,355,492$1,052,90029 %
Cost of sales410,776 424,247 (3)893,257790,04613 
Gross profit224,795 149,110 51 462,235262,85476 
Selling, general and administrative expenses72,127 47,872 51 132,95482,10762 
Research and development19,193 7,146 169 35,71212,775180 
Operating income133,475 94,092 42 293,569167,97275 
Interest expense3,665 3,646 1 6,9456,7483 
Other (income) expense, net(7,382)5,038 (247)(2,514)3,070(182)
Income before income taxes137,192 85,408 61 289,138158,15483 
Provision for income taxes19,928 3,999 398 47,08013,100259 
Net income and comprehensive income$117,264 $81,409 44 %$242,058$145,05467 %
Non-GAAP Financial Measures
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

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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.
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.
Among other limitations, Adjusted gross profit, Adjusted operating income, Adjusted net income, Adjusted EBITDA, Adjusted net income margin, Adjusted gross margin and Adjusted EBITDA margin do not reflect our cash expenditures or future capital expenditures or contractual commitments (including under the Tax Receivable Agreement, as defined below), do not reflect the impact of certain cash or non-cash charges resulting from matters we consider not to be indicative of our ongoing operations and do not reflect the associated income tax expense or benefit related to those charges. In addition, other companies in our industry may calculate Adjusted gross profit, Adjusted operating income, Adjusted net income, Adjusted EBITDA, Adjusted gross margin, Adjusted net income margin and Adjusted EBITDA margin differently from us, which further limits their usefulness as comparative measures.
Because of these limitations, Adjusted gross profit, Adjusted operating income, Adjusted net income, Adjusted EBITDA, Adjusted gross margin, Adjusted net income margin and Adjusted EBITDA margin should not be considered in isolation or as substitutes for performance measures calculated in accordance with U.S. GAAP. We compensate for these limitations by relying primarily on our U.S. GAAP results and using Adjusted financial measures on a supplemental basis. You should review the reconciliation to the most directly comparable U.S. GAAP measure of Adjusted gross profit, Adjusted operating income, Adjusted net income, Adjusted EBITDA, Adjusted gross margin, Adjusted net income margin and Adjusted EBITDA margin below and not rely on any single financial measure to evaluate our business.
Three-month periods endedSix-month periods ended
September 27, 2024September 29, 2023September 27, 2024September 29, 2023
Other Financial Information:(In thousands, except percentages)
Adjusted gross profit$228,172$152,417$469,480$268,150
Adjusted operating income167,412112,370350,975194,954
Adjusted net income144,92796,031283,546167,155
Adjusted EBITDA172,651110,198347,627194,051
Adjusted gross margin35.9%26.6%34.6%25.5%
Adjusted net income margin22.8%16.7%20.9%15.9%
Adjusted EBITDA margin27.2%19.2%25.6%18.4%
The following table provides a reconciliation of gross profit to Adjusted gross profit, operating income to Adjusted operating income, net income to Adjusted net income, net income to Adjusted EBITDA, gross margin to Adjusted gross margin, net income margin to Adjusted net income margin, and net income margin to Adjusted EBITDA margin for each period presented. The Adjusted measures presented in the table are inclusive of non-controlling interests and redeemable non-controlling interests.

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Three-month periods ended
Six-month periods ended

September 27, 2024September 29, 2023September 27, 2024September 29, 2023
Reconciliation of GAAP to Non-GAAP Financial Measures:
(In thousands, except percentages)
GAAP gross profit & margin$224,795 35.4%$149,110 26.0%$462,235 34.1%$262,854 25.0%
Stock-based compensation expense2,481 3,245 6,261 5,171 
Intangible amortization896 62 984 125 
Adjusted gross profit & margin$228,172 35.9%$152,417 26.6%$469,480 34.6%$268,150 25.5%
GAAP operating income & margin$133,475 21.0%$94,092 16.4%$293,569 21.7%$167,972 16.0%
Stock-based compensation expense29,885 18,216 51,786 26,857 
Intangible amortization1,875 62 1,963 125 
Acquisition related costs (1)2,177 — 3,657 — 
Adjusted operating income & margin$167,412 26.3%$112,370 19.6%$350,975 25.9%$194,954 18.5%
GAAP net income & margin$117,264 18.5%$81,409 14.2%$242,058 17.9%$145,054 13.8%
Stock-based compensation expense29,885 18,216 51,786 26,857 
Intangible amortization1,875 62 1,963 125 
Adjustment for taxes(6,274)(3,656)(15,918)(4,881)
Acquisition related costs (1)2,177 — 3,657 — 
Adjusted net income & margin$144,927 22.8%$96,031 16.7%$283,546 20.9%$167,155 15.9%
GAAP net income & margin$117,264 18.5%$81,409 14.2%$242,058 17.9%$145,054 13.8%
Interest, net455 (86)(837)1,334 
Provision for income taxes19,928 3,999 47,080 13,100 
Depreciation expense1,067 912 1,920 1,895 
Intangible amortization1,875 62 1,963 125 
Stock-based compensation expense29,885 18,216 51,786 26,857 
Acquisition related costs (1)2,177 — 3,657 — 
Other tax related income, net— 5,686 — 5,686 
Adjusted EBITDA & margin$172,651 27.2%$110,198 19.2%$347,627 25.6%$194,051 18.4%
(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.
The data below, and discussion that follows, represents our results from operations.
Comparison of the three-month periods ended September 27, 2024 and September 29, 2023
Revenue
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

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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.
Cost of sales and gross profit
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.
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.
Selling, general and administrative expenses
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.
Research and development
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.
Interest expense
Interest expense remained relatively flat at approximately $3.7 million for both three-month periods ended September 27, 2024 and September 29, 2023, respectively.
Other (income) expense, net
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.
Provision for income taxes
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 three-month periods ended September 27, 2024 and September 29, 2023. For the three-month periods ended September 27, 2024 and

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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.
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.
From time to time, we are subject to income and non-income based tax audits in the jurisdictions in which we operate. The calculation of tax liabilities involves dealing with uncertainties in the application of complex tax rules and regulations in a number of jurisdictions. Due to such complexity of these uncertainties, the ultimate resolution may result in a payment or refund that is materially different from our estimates.
Comparison of the six-month periods ended September 27, 2024 and September 29, 2023
Revenue
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.
Cost of sales and gross profit
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.
Gross profit increased by $199.4 million, or 76%, during the six-month period ended September 27, 2024 compared to the six-month period ended September 29, 2023, primarily resulting from the U.S. revenue growth noted above and the impact from the 45X Credit recognized in the first half of fiscal year 2025. In addition, throughout fiscal year 2024 and into fiscal year 2025, we continue to implement enhancements to our overall margin structure that include maintaining pricing discipline, expanding our global supply chain and other innovations that drive cost savings. As a percentage of revenue, these efforts increased gross margins by approximately 200 basis points during the six-month period ended September 27, 2024 compared to the six-month period ended September 29, 2023 and were net of the impact from competitive pressures that have lowered prices.

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Selling, general and administrative expenses
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.
Research and development
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.
Interest expense
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.
Other (income) expense, net
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.
Provision for income taxes
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.
LIQUIDITY AND CAPITAL RESOURCES
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.
Credit Facilities
On June 21, 2024, Nextracker Inc. and the LLC, as the borrower, entered into the Amendment to the 2023 Credit Agreement. The Amendment amended the 2023 Credit Agreement to, among other things: (i) increase the aggregate commitments of the revolving credit facility (the “RCF”) from $500.0 million to $1.0 billion; (ii) provide for a $1.0 billion secured debt basket for surety bonds; (iii) increase the letter of credit capacity from $300.0 million to $500.0 million; and (iv) update various covenants, baskets and thresholds to provide more financing capacity and operational flexibility to Nextracker Inc. and the LLC. Subject to the satisfaction of certain conditions, the LLC may be permitted to request incremental term loan facilities under the credit facility from one or more lenders.
The RCF under the 2023 Credit Agreement is available in U.S. dollars, euros and such currencies as mutually agreed on a revolving basis during the five-year period through February 11, 2028. A portion of the RCF not to exceed $500.0 million is

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available for the issuance of letters of credit. A portion of the RCF not to exceed $50.0 million is available for swing line loans. Subject to the satisfaction of certain conditions, the LLC will be permitted to incur incremental term loan facilities or increase the RCF commitment in an aggregate principal amount equal to $257.5 million plus an additional amount such that the secured net leverage ratio or total net leverage ratio, as applicable, is equal to or less than a specified threshold after giving pro forma effect to such incurrence.
The obligations of the LLC under the Amended 2023 Credit Agreement and related loan documents are jointly and severally guaranteed by Nextracker Inc., certain other holding companies (collectively, the “Guarantors”) and, subject to certain exclusions, certain of the LLC’s existing and future direct and indirect wholly-owned domestic subsidiaries.
As of the closing of the Amended 2023 Credit Agreement, all obligations of the LLC and the Guarantors were secured by certain equity pledges by the LLC and the Guarantors. However, if the LLC’s total net leverage ratio exceeds a specified threshold, the collateral will include substantially all the assets of the LLC and the Guarantors and, if the LLC meets certain investment grade conditions, such lien will be released.
The term loan facility (“Term Loan”) under the 2023 Credit Agreement requires quarterly principal payments beginning on June 30, 2024, in an amount equal to 0.625% of the original aggregate principal amount of the Term Loan. From June 30, 2025, the quarterly principal payment will increase to 1.25% of the original aggregate principal amount of the Term Loan. The remaining balance of the Term Loan and the outstanding balance of any RCF loans will be repayable on February 11, 2028. Borrowings under the Amended 2023 Credit Agreement are prepayable and commitments subject to being reduced in each case at the LLC’s option without premium or penalty. The Amended 2023 Credit Agreement contains certain mandatory prepayment provisions in the event that the LLC or its restricted subsidiaries incur certain types of indebtedness or, subject to certain reinvestment rights, receive net cash proceeds from certain asset sales or other dispositions of property.
Borrowings in U.S. dollars under the Amended 2023 Credit Agreement bear interest at a rate based on either (a) a term secured overnight financing rate (“SOFR”) based formula (including a credit spread adjustment of 10 basis points) plus a margin of 162.5 basis points to 200 basis points, depending on the LLC’s total net leverage ratio, or (b) a base rate formula plus a margin of 62.5 basis points to 100 basis points, depending on the LLC’s total net leverage ratio. Borrowings under the RCF in euros bear interest based on the adjusted EURIBOR rate plus a margin of 162.5 basis points to 200 basis points, depending on the LLC’s total net leverage ratio. The LLC is required to pay a quarterly commitment fee on the undrawn portion of the RCF commitments of 20 basis points to 35 basis points, depending on the LLC’s total net leverage ratio. The interest rate for the Term Loan was 6.53% (SOFR rate of 4.80% plus a margin of 1.73%) as of September 27, 2024.
The Amended 2023 Credit Agreement contains certain affirmative and negative covenants that, among other things and subject to certain exceptions, limit the ability of the LLC and its restricted subsidiaries to incur additional indebtedness or liens, to dispose of assets, change their fiscal year or lines of business, pay dividends and other restricted payments, make investments and other acquisitions, make optional payments of subordinated and junior lien debt, enter into transactions with affiliates and enter into restrictive agreements. In addition, the Amended 2023 Credit Agreement requires the LLC to maintain a consolidated total net leverage ratio below a certain threshold. As of September 27, 2024, we were in compliance with all applicable covenants under the Amended 2023 Credit Agreement, the Term Loan and the RCF.
Tax Receivable Agreement
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.
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.

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Cash Flows Analysis
Six-month periods ended
September 27, 2024September 29, 2023
(In thousands)
Net cash provided by operating activities$274,627$252,677
Net cash used in investing activities(159,575)(1,406)
Net cash used in financing activities(27,222)(8,361)
Six-month period ended September 27, 2024
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.
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.
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.
Six-month period ended September 29, 2023
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.
Net cash used in investing activities was $1.4 million and directly attributable to the purchase of property and equipment.
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.
Cash management and financing
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.

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Contractual obligations and commitments
As discussed in the “Credit Facilities” section above, in June 2024, we entered into an amendment to the 2023 Credit Agreement, which, among other things, increased our revolving commitment.
Information regarding our debt obligation, operating lease commitments and other commitments is provided in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Form 10-K.
There were no material changes in our contractual obligations and commitments as of September 27, 2024.
Recently adopted accounting pronouncements
None during the six-month period ended September 27, 2024.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risk in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily a result of fluctuations in commodity prices, such as steel and customer concentrations. We do not hold or issue financial instruments for trading purposes and had $146.1 million outstanding under our Term Loan, net of issuance costs as of September 27, 2024.
There were no material changes in our exposure to market risks for changes in interest and foreign currency exchange rates for the six-month period ended September 27, 2024 as compared to the fiscal year ended March 31, 2024.
Concentration of major customers
Our customer base consists primarily of EPCs, as well as solar project owners and developers. We do not require collateral on our trade receivables. The loss of any one of our top five customers could have a materially adverse effect on our revenue and profits.
The following table sets forth the revenue from our customers that exceeded 10% of our total revenue and the total revenue from our five largest customers by percentage of our total revenue during the periods included below:
Three-month periods endedSix-month periods ended
September 27, 2024September 29, 2023September 27, 2024September 29, 2023
Customer G13%16%14%13%
Top five largest customers39%46%39%38%
Our trade accounts receivables and contract assets are from companies within the solar industry and, as such, we are exposed to normal industry credit risks. We periodically evaluate our reserves for potential credit losses and establish reserves for such losses.
The following table sets forth the total accounts receivable, net of allowance for credit losses and contract assets, from our largest customers that exceeded 10% of such total, and the total accounts receivable and contract assets, net of allowance for credit losses, from our top five customers by percentage during the periods included below:
As of September 27, 2024As of March 31, 2024
Customer A9%12%
Customer G14%16%
Top five largest customers42%47%
Commodity price risk
We are subject to risk from fluctuating market prices of certain commodity raw materials, such as steel, that are used in our products. Prices of these raw materials may be affected by supply restrictions or other market factors from time to time, and we do not enter into hedging arrangements to mitigate commodity risk. Significant price changes for these raw materials could

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reduce our operating margins if we are unable to recover such increases from our customers, and could harm our business, financial condition and results of operations.
In addition, we are subject to risk from fluctuating logistics costs. As a result of disruptions caused by geopolitical conflicts, consumer and commercial demand for shipped goods has increased across multiple industries, which in turn has reduced the availability and capacity of shipping containers and available ships worldwide. These disruptions caused, and may in the future cause, increased logistics costs and shipment delays affecting the timing of our project deliveries, the timing of our recognition of revenue and our profitability.
Foreign currency exchange risk
We transact business in various foreign countries and are, therefore, subject to risk of foreign currency exchange rate fluctuations. We have established a foreign currency risk management policy to manage this risk. We intend to manage our foreign currency exposure by evaluating and using non-financial techniques, such as currency of invoice, leading and lagging payments and receivables management.
Based on our overall currency rate exposures as of September 27, 2024 and March 31, 2024, including the derivative financial instruments intended to hedge the nonfunctional currency-denominated monetary assets, liabilities and cash flows, and other factors, a 10% appreciation or depreciation of the U.S. dollar from its cross-functional rates would not be expected, in the aggregate, to have a material effect on our financial position, results of operations and cash flows in the near-term.
ITEM 4. CONTROLS AND PROCEDURES
a.Evaluation of Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,” as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and our Principal Financial Officer, to allow timely decisions regarding required disclosure. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of September 27, 2024. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
b.Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended September 27, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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c.Inherent Limitations on Effectiveness of Controls
Our management, including our Chief Executive Officer and Chief Financial Officer, believes that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. However, our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In the ordinary course of conducting our business, we have in the past and may in the future become involved in various legal actions and other claims. We may also become involved in other judicial, regulatory and arbitration proceedings concerning matters arising in connection with the conduct of our businesses. Some of these matters may involve claims of substantial amounts. In addition, from time to time, third parties may assert intellectual property infringement claims against us in the form of letters and other forms of communication. These legal proceedings may be subject to many uncertainties and there can be no assurance of the outcome of any individual proceedings. We do not believe that these matters, and we are not a party to any other legal proceedings that we believe, if determined adversely to us, would have a material adverse effect on our business, financial condition or results of operations.
For more information, see Note 8 “Commitments and contingencies” in the notes to the unaudited condensed consolidated final statements included elsewhere in this Quarterly Report.
ITEM 1A. RISK FACTORS
Our business and our ability to execute our strategy are subject to many risks. These risks and uncertainties include, but are not limited to, the following:
Summary of Risk Factors
•The demand for solar energy and, in turn, our products is impacted by many factors outside of our control, and if such demand does not continue to grow or grows at a slower rate than we anticipate, our business and prospects will suffer.
•Competitive pressures within our industry may harm our business, results of operations, financial condition and prospects.
•