Nextpower Inc.

Next Tracker's Third Quarter Fiscal Year 2024 Earnings Conference Call. After the speaker's remarks, there will be a Q&A session. At this time for opening remarks, I would like to pass the call over to Mary Lai, Vice President of Investor Relations. Mary, you may begin.

Thank you and good afternoon, everyone. Welcome to Next Tracker's Third Quarter Fiscal Year 2024 Earnings Call. I'm Mary Lai, Vice President of Investor Relations. I'm joined by Dan Sugar, our CEO and founder, Howard Wenger, our president, and Dave Bennett, our CFO. Following our prepared remarks, we will transition to a Q&A session. As a reminder, there will be a replay of this call posted on the IR website, along with our slides and press release. Today's call contains statements regarding our business, financial performance, and operations, including the impact of our business, and industry that may be considered forward-looking statements, and such statements involve risks and uncertainties that may cause actual results to differ materially from our expectations. Those statements are based on current beliefs, assumptions, and expectations and speak only as of the current date. For more information on those risks and uncertainties, please review our earnings press release, slides, and our SEC filings, including our most recent file form, 10-Q, which are available on our IR website at investors.nexttracker.com. This information is subject to change and we undertake no obligation to update any forward-looking statements as a result of new information, future events, or changes in our expectations. Please note, we will provide gap and non-gap measures on today's call. The full non-gap to gap reconciliation can be found in the appendix to the press release slides of today's presentation as well as the financial section of our website. And now, I will turn the call over to our CEO and founder. Dan?

Thank you, Mary. Good afternoon, everyone, and welcome to our third quarter fiscal year 2024 earnings call. We start this call by noting how thrilled we are to be a fully independent public company after a successful separation from Flex in early January. We are appreciative of our time with Flex, an eight-year combination that exceeded its goals related to our growth and global expansion, and we sincerely thank the six outgoing board members, all Flex executives, for their service. We're also excited to welcome Julie Blunden and Howard Wenger to our board, further strengthening our director's deep domain expertise in solar, storage, and public companies. Let's focus on Q3 results. This was another strong quarter and our fourth consecutive quarter of double-digit growth, resulting in record revenue, profits, and backlog. Q3 demonstrated ongoing momentum for Nextracker in the solar industry. Our revenue grew 38% year-over-year to exceed $700 million, and our adjusted EBITDA accelerated to $168 million. It's noteworthy that we've doubled our adjusted EBITDA in the last 12 months. The significant top line and profit expansion was the result of our solid execution, further optimization of our re-architected supply chain, and continued rigor in pricing discipline. Our reported $168 million of adjusted EBITDA does not include the anticipated 45x tax benefits, which are expected to further increase earnings. Q3's performance was driven by exceptionally high deliveries in our U.S. business, growing 70% year over year. We also highlight our international expansion progress by celebrating the 10 gigawatt milestone we reached in the Middle East, India, and Africa. We have long-term and proven track record in these regions, where in some cases we have the advantage of first market mover. Our differentiated product reliability in extreme weather and ability to deliver large volumes scale are well understood by customers. Recently, we've booked significant orders and have tracker fleets operating in India, Saudi Arabia, United Arab Emirates, and Africa. To serve our growing demand, we keep expanding our global supplier footprint. In total, we now have over 70 major supply chain partners across five continents. Our new contracted bookings continue at a healthy pace, both domestically and overseas. This resulted in a new record backlog significantly exceeding $3 billion. With the strong demand and record backlog year to date, we are increasing guidance. We're raising the midpoint of our previous annual revenue and profit guidance by approximately $100 million and $73 million, respectively. For the full fiscal year, our new revenue target is $2.45 billion, and our new EBITDA target is $488 million at the midpoints. This is the third consecutive quarter we've raised our revenue and profit guidance. We achieved this growth by focusing on innovation, customers, execution, and our team, delivering over 90 gigawatts since inception. Based on our strong growth profile, supported by healthy profitability and liquidity, we've continued to increase our investments in R&D with emphasis on technology that lowers the levelized cost of solar energy for our customers. The additional R&D investments we've made have accelerated the time to market for new products and allows us to maintain market leadership. In Q3, we bolstered our overall patent portfolio, both organically and through strategic investments. We now have over 500 patents issued and pending at the end of the quarter. Last September, we launched our next generation technology suite with three innovations, Extreme Terrain Following Tracker, XTR 1.5, HalePro for NX Horizon, and Zonal Diffuse for TrueCapture. All of these innovations are either operating in the field today or under contract to be delivered to customer projects later this year. We'll now speak to the short and long-term dynamics in the market, starting with the United States. As covered on our previous calls, there are multiple headwinds and tailwinds impacting solar development velocity. Headwinds, including interconnection backlogs, permitting delays, and equipment shortages are real and can impact any specific project, EPC, or developer. But in totality, the combination of new entrants in both developers and EPCs and the increasing number of projects in their portfolios has allowed the market to continue expanding. Solar panel availability in the United States has improved significantly over recent quarters, and as things stand today, we are not seeing panel availability as a first-order problem in the market. There are, however, multiple trade proceedings pending which could impact panel imports from certain geographies into the U.S. We will need to see how this evolves over time to determine any potential impact. According to the Solar Energy Industries Association, at the one-year anniversary of the Inflation Reduction Act, or IRA, 85 gigawatts of new U.S. solar module manufacturing capacity had been announced, which inspires confidence that panel availability will be systemically addressed in the coming years. Overseas, some of the headwinds noted above also exist, but are typically less severe than the U.S. And globally, falling solar panel pricing has enabled the economics of projects to continue improving and markets in general to continue expanding. Longer term, we believe it's insightful to consider both the accelerating need for new power in combination with retiring legacy power generation assets. Focusing on the U.S. Power generation requirements grew modestly from 2007 through 2022 at about 1% annual increase. Over the last few years, however, energy usage has increased dramatically, driven by growth in data centers, electrification of appliances and transportation, and reindustrialization across the United States. At the same time, there has been a significant retirement of legacy power plants. The combination of these factors has caused the U.S. Energy Information Administration to forecast a 5% annual increased need for new power generation capacity in the grid over the next five years. The result is that almost 300 gigawatts of new power plants are needed over the next five years, and about 500 gigawatts of new power is needed over the next decade. Where is this massive amount of new power going to come from? The USCIA, historically very conservative on renewables, is forecasting that solar and wind power will comprise the vast majority of new power generation. Solar is expected to have a 26% compound annual growth over the next five years and within 10 years be the number one source of electric generation in the United States, comprising almost a quarter of all electric energy. Naysayers point to the intermittency of renewable power as an impediment to its large-scale adoption in the grid. We believe this issue will improve. Sharp decreases in battery costs have enabled steep ramping of battery storage power plants in the grid, both co-located with renewable power and standalone projects. Battery power increased five-fold in the last two years to 15 gigawatts operating in the USA today. And batteries are expected to triple again to about 50 gigawatts by 2026. Many battery systems have four hours of storage today, which pairs well with a solar tracker plant, which together provide firm power through the evening peak. Nextracker is very well positioned to continue driving utility scale and distributed generation as the world transitions to renewable energy with solar leading the charge. We are the skeletal system for the solar power ecosystem. With over 2 million tracker systems shipped to more than 30 countries, we are the global market leader in trackers and a preferred partner for Tier 1 owners, developers, and EPCs. And equally important, We appreciate our customers and their guidance on our products. We listen and respond to customer requirements with operational excellence and uncompromising quality. Now I'll turn the call over to Howard Wenger, our president, to expand on our commercial progress and product innovation.