Nextpower Q2 Earnings Call Highlights

Key Points

• Record Q2 performance: Revenue surpassed $1.1 billion, up 23% year over year, while adjusted EBITDA reached approximately $250 million. Bookings exceeded $1 billion, backlog topped $6 billion, and the company ended the quarter with more than $1 billion in cash and no debt.
• Business diversification accelerated: Storage generated about $100 million in revenue and more than $20 million in adjusted EBITDA in its first contributing quarter, while eBOS and inverter businesses secured significant orders. The Zimmermann acquisition further expands Nextpower’s product portfolio and global reach.
• Fiscal 2027 outlook raised: Nextpower now expects revenue of $4.2 billion–$4.45 billion, adjusted EBITDA of $890 million–$940 million and more than $500 million in free cash flow. Management warned that higher diesel, steel, freight and logistics costs will pressure second-half margins.

Nextpower NASDAQ: NXT reported record second-quarter fiscal 2027 results, citing continued demand for its solar tracker products and growing contributions from energy storage, electrical balance-of-system offerings and power conversion equipment.

Revenue exceeded $1.1 billion, up 23% from a year earlier, while adjusted EBITDA was approximately $250 million, up 12% year over year. Adjusted EBITDA margin was 23%. The company generated roughly $135 million of adjusted free cash flow during the quarter and $240 million year to date, ending the period with more than $1 billion in cash and no debt.

CEO and founder Dan Shugar said the company recorded more than $1 billion in quarterly bookings and expanded backlog to more than $6 billion. He said non-tracker products accounted for approximately 22% of quarterly revenue, reflecting the company’s effort to broaden its participation across solar and storage projects.

Storage, eBOS and Inverter Businesses Gain Traction

Nextpower’s energy-storage business contributed approximately $100 million of revenue and more than $20 million of adjusted EBITDA in its first quarter of contribution following the acquisition of the former Prevalon business. The results included revenue from a behind-the-meter storage project serving a tier-one hyperscaler’s AI data center.

CFO Chuck Boynton said storage margins can vary depending on the application and customer, noting that the company had initially outlined mid-teens EBITDA margins for the acquired business. Long-term service agreements were immaterial during the quarter, though Boynton said the company sees a long-term opportunity for service agreements in both storage and power conversion.

Shugar said the company’s Hybrid Power Stabilizer can help support data-center loads that can fluctuate sharply in fractions of a second. He said the product recently completed full-scale testing at a major national laboratory and that the business is receiving inquiries from qualified customers.

The company also reported record bookings in its Foundation and eBOS businesses. eBOS bookings exceeded $100 million in the quarter, with its NX PowerMerge solution representing a material share of bookings. President Howard Wenger said Nextpower has secured more than 2 gigawatts of firm PowerMerge orders and achieved a 100% pass rate in post-installation functional and quality testing on a commercial-scale deployment.

Nextpower secured a 1.1-gigawatt inverter framework agreement covering five projects and shipped its first Nextpower-branded power conversion systems during the quarter. The company expects to invest approximately $40 million in capital expenditures over the next 12 months to build out U.S. manufacturing for its NX Power Conversion line. It expects products to begin shipping by the end of next summer and plans to reach more than 10 GW of capacity by the end of calendar 2027.

Zimmermann Acquisition Expands European Reach

After the quarter ended, Nextpower completed its acquisition of Zimmermann PV-Steel Group. The transaction was completed as an all-cash deal for EUR 230 million, lower than the consideration previously announced.

Zimmermann adds fixed-tilt, agrivoltaic and wire-management products to Nextpower’s portfolio, as well as more than 20 GW of cumulative project experience and operations in 15 additional countries. Wenger said the acquisition expands Nextpower’s global footprint to 68 countries and provides cross-selling opportunities for Foundation, eBOS, power conversion and storage offerings.

Nextpower now expects Zimmermann to contribute approximately $100 million of revenue and $10 million of adjusted EBITDA for the balance of fiscal 2027. Boynton said the acquisition is expected to be accretive immediately. Zimmermann’s backlog was not included in Nextpower’s reported quarter-end backlog because its business is more dependent on shorter-cycle activity, while the storage acquisition was included in ending backlog.

Outlook Raised Despite Cost Pressures

Nextpower raised its fiscal 2027 outlook and now expects:

• Revenue of $4.2 billion to $4.45 billion.
• Adjusted EBITDA of $890 million to $940 million.
• Adjusted diluted earnings per share of $4.61 to $4.87.
• Free cash flow of more than $500 million, up from its prior estimate of $450 million.

The company expects second-half revenue to be weighted toward the fourth quarter due to customer delivery schedules. Boynton said third-quarter revenue is expected to decline sequentially from the record second quarter but rise about 10% from the prior year. The company expects the fourth quarter could produce record revenue and adjusted EBITDA.

Management expects full-year adjusted gross margin in the low 30% range and adjusted EBITDA margin in the low 20% range. In the second half, adjusted gross margin is expected in the high 20% range and adjusted EBITDA margin in the high teens.

Boynton attributed lower second-half margins relative to the first half partly to higher diesel, steel, freight and logistics costs, as well as investment in newer product categories. He said freight and logistics costs are expected to remain elevated through fiscal 2027, though the company’s distributed manufacturing footprint helps limit exposure by locating finished-goods production closer to project sites.

Wenger said the U.S. represented approximately 82% of quarterly revenue, while international revenue rose 25% sequentially. The company expects a roughly 80/20 U.S.-international revenue mix for the full year, with international business comprising a low-20% percentage of revenue in the second half.

Nextpower plans to provide further details on its longer-term strategy and fiscal 2028 outlook at its Capital Markets Day in Las Vegas on Nov. 16.

About Nextpower (NASDAQ:NXT)

Nextracker Inc is a renewable energy technology company that designs, manufactures and supplies intelligent solar-tracking systems for utility-scale and large commercial solar power projects. Its systems adjust the position of solar panels throughout the day to help photovoltaic modules capture more sunlight and improve energy production.

The company's product portfolio includes single-axis solar trackers, structural components, foundations and related hardware, as well as software and controls designed to optimize tracker performance.

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