Nextpower Inc. Q3 FY2026 earnings call

Key Points

• Dan Shugar highlighted a strong quarter with solid operational discipline, increased backlog, and focus on customers and innovation. The company transitioned to the new Nextpower brand and outlined strategic evolution from a tracking system supplier to an end-to-end solar technology platform.
• Howard Wenger discussed strong customer bookings and backlog growth. In the U.S., bookings were up 63% YOY, driven by flight to quality and domestic supply chain. International markets, especially Europe, saw record bookings. The NX Horizon Hail Pro tracker continued to gain traction, with 2,170 hail stows in 2025 and low module breakage. The technology platform expanded with diverse offerings in order book.
• Chuck Boynton reported strong cash flow, with $123 million operating cash flow in Q3 and $391 million YTD. Balance sheet was strong with $953 million cash and no debt, and achieved investment-grade rating. Announced a $500 million share repurchase program over 3 years. Addressed tariff impact on margins, noting $44 million impact in Q3, and raised fiscal 2026 guidance with revenue between $3.425 billion and $3.5 billion, adjusted EBITDA between $810 million and $830 million, and adjusted diluted EPS $4.26 to $4.36.

Nextpower delivered a strong third quarter. Q3 revenue grew 34% year-on-year to $909 million, with adjusted EBITDA increasing 15% to $214 million. Fiscal year-to-date revenue was $2.68 billion, up 32% year-over-year. Geographically, 81% of Q3 revenue came from the U.S., and 19% from rest of world markets. Year-to-date, revenue mix was 75% from the U.S. and 25% from rest of world.

Forward-Looking Statements

• Raised fiscal 2026 guidance: revenue expected to be between $3.425 billion and $3.5 billion, adjusted EBITDA between $810 million and $830 million, and adjusted diluted EPS in the range of $4.26 to $4.36.
• No update on fiscal 2027 outlook from Capital Markets Day held last November; remained confident in strong performance going into next year with a great backlog.

Risks Discussed

• Tariffs continued to impact margins, with $44 million tariff impact in Q3, up from $33 million in Q2 due to full quarter impact of new tariffs.
• Forward-looking statements involve risks and uncertainties, with actual results possibly differing from expectations. Detailed risks outlined in SEC filings including quarterly report Form 10-Q and annual report Form 10-K.

Q: Philip Shen asked if bookings cleared $1 billion in Q3 and about revenue mix of U.S. tracker vs non-tracker.

A: Howard Wenger responded that bookings were strong with a new backlog record, somewhat weighted to the U.S., and non-tracker business was starting to impact revenue mix, particularly in the U.S. with rollout of foundations, eBOS, etc.

Q: Praneeth Satish inquired about permit freeze on federal lands projects.

A: Dan Shugar and Howard Wenger stated some federal land projects were moving forward, with developers navigating project portfolios and seeing favorable velocity in permit phases for both public and private lands.

Q: Dimple Gosai asked about attach rate of TrueCapture, eBOS, etc., and gross margin uplift.

A: Howard Wenger mentioned non-tracker pipeline expanding with acquisitions like eBOS, and Chuck Boynton noted non-tracker and tracker revenue splits were roughly at corporate average, with software having higher margins.

Q: Brian Lee asked about fiscal 2027 outlook and IRA credits.

A: Charles Boynton said IRA credits were roughly in line with prior quarter, and no update on fiscal 2027 outlook from Capital Markets Day; remained confident in strong performance.

Q: Mark Strouse asked about Saudi JV timing and margin cadence, and share buyback approach.

A: Howard Wenger discussed JV timing with 2.25 gigawatt project starting to deliver, and Charles Boynton said share repurchase program would be structured and cautious initially.

Q: Julien Dumoulin-Smith's team asked about Saudi JV timing, margin cadence, and power conversion conversations.

A: Howard Wenger discussed JV timing and construction of new factory in Jeddah, and Daniel Shugar talked about power conversion development, focusing on reliability and local manufacturing with customer pilots planned in 2026.

Q: Vikram Bagri asked about non-tracker margins vs Analyst Day and importance of investment-grade rating.

A: Charles Boynton clarified non-tracker margins were blending with corporate average, and investment-grade rating was important to all customers and suppliers, especially internationally, as it reflected disciplined management.

Q: Ben Kallo asked about 'bring your own power' and energy storage.

A: Howard Wenger and Daniel Shugar discussed 'bring your own power' being a long-term trend with increased demand from data centers, and Nextpower's technology platform being applicable to both solar and battery storage.

Q: Jonathan Windham asked about impact of storage availability on solar demand.

A: Daniel Shugar said storage development was positive and complementary to solar, with solar and storage going together, and Nextpower's platform supporting both.