US solar tracker manufacturer Nextracker has seen high deliveries in its US business with a 70% year-on-year increase in the fourth quarter, driving 38% quarterly revenue growth.
Coupled with the high performance of its financial results for Q3 FY24 – the period ending 31 December 2023 for Nextracker – the company also raised its full-year guidance for FY24 (ending on 31 March 2024).
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It is the third quarter in a row in which it raised guidance, with forecasted full-year revenue increased by US$100 million to US$2.45 billion, while the adjusted EBITDA target has been raised by US$73 million to US$488 million. Both figures are at the mid points of ranges.
With the US’ business driving Q4’s performance and representing 78% of the company’s revenue in the last three months of the year, its international expansion was marked by reaching the 10GW milestone in the Middle East, India and Africa of trackers shipped or under fulfilment. The company’s domestic and international backlog now exceeds US$3 billion.
Moreover, Nextracker’s adjusted earnings before inflation, taxes, depreciation and amortisation (EBITDA) in Q3 FY24 reached US$168 million, more than doubling the EBITDA in the last 12 months with a 168% year-on-year (YoY) growth. Tax benefits from 45X were not included in Q4 2023’s EBITDA, which are expected to further increase the company’s earnings, said Dan Shugar, founder and CEO at Nextracker.
Revenue was up with US$710 million in Q3, a 38% growth YoY. With both revenue and adjusted EBITDA up in double digits YoY, this marked the tracker manufacturer’s fourth consecutive quarter to post a double-digit growth, added Shugar.
“Nextracker achieved a record third quarter, outperforming across revenue, profit and backlog, which reflects strong execution and spotlights our capability to meet customer requirements,” said Shugar.
Nextracker also increased its investment in research and development in Q4 with US$12.9 million, treble the amount for the year prior when it invested US$4.9 million in Q4 2022. “Based on our strong growth profile supported by healthy profitability and ample liquidity, we’ve continued to increase our investments in R&D with emphasis on technology that lowers the levelised cost of solar energy for our customers,” said Shugar during an earnings call.
Ahead of RE+ Las Vegas in September, the company launched three new products targeting hail (NX Horizon Hail Pro), uneven terrain (NX Horizon XTR-1.5) and fast atmospheric changes (Zonal Diffuse), while opening a new tracker component manufacturing line in Las Vegas around the same time.
Earlier this year Nextracker finalised its split from electronics firm Flex, a move that was announced in October 2023.
Red Sea and Suez Canal situation impacting deliveries
Howard Wenger, president at Nextracker, acknowledged the current conflict in the Red Sea and the Suez Canal with some shipments being rerouted, which has an impact on some of the deliveries as well as costs and potentially revenue recognition. “While we don’t see a material impact today, we are closely monitoring the situation and we continue to make the adjustments needed to minimize the impact to our customers,” added Wenger.
Conference call transcript from Seeking Alpha.
Edited on 05 February 2024 to harmonise financial quarters, following the calendar year rather than the company’s financial one, to make comparison simpler, as Nextracker year end is on 31 March 2024.