Nextracker Inc.

Good afternoon, everyone, and thank you for standing by. My name is Joel, and I will be your conference operator today. Today's call is being recorded. I would like to welcome everyone to NextTracker's fourth quarter fiscal year 2025 earnings 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 Mr. Chuck Boynton, CFO. Chuck, you may begin.

Thank you, and good afternoon, everyone. Welcome to NextTracker's fourth quarter fiscal year 2025 earnings call. I'm Chuck Boynton, NextTracker's CFO, and I'm joined by Dan Sugar, our CEO and founder, and Howard Langer, our president. Following brief 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 the earnings press release and shareholder letter. Today's call contains statements regarding our business, financial performance, and operations, including our business and our industry, that may be considered forward-looking statements. And as 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, shareholder letter, and our SEC filings, including our most recently filed quarterly report on Form 10Q and annual report on Form 10K, which are available on our IR website at .nextracker.com. This information is sluggish to change and will 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 reconciliations can be found in the appendix to the press release and the shareholder letter as well as the financial section of our IR website. And now I will turn the call over to our CEO and founder. Dan? Thank you for joining us today

to discuss our fourth quarter results and to recap our accomplishments for fiscal 2025. NextTracker had a fantastic year and again delivered strong financial performance for the quarter. A year ago, we forecast $2.8 to $2.9 billion of revenue and we achieved $3 billion for the full year. We forecast $600 to $650 million of adjusted EBITDA and delivered $775 million. For this fiscal year, we are set up for another year of solid growth. Chuck will provide the details shortly, but I want to first lay out three themes that you will hear during today's call. First, NextTracker continues to win in the market, driven by a flight to quality and evidenced by our continued strong bookings growth momentum. At our IPO in February 2023, our backlog was $2.1 billion and today it is significantly over $4.5 billion. We have been the global and U.S. market share leader for nine consecutive years and according to third-party sources, in 2024, we further increased our leading global market share with top share in U.S., Europe, Latin America, and Australia regions and we hold a strong position in most other major markets. Second, we believe that we are best positioned to navigate the current policy uncertainties by virtue of our large, geographically diversified order backlog with Tier 1 customers, differentiated products that increase customer profitability, our healthy balance sheet, and an extremely flexible supply chain comprising over 90 manufacturing sites in 19 countries. Third, we are accelerating our innovation engine, acquiring and organically developing adjacent technologies to create a complete solar power platform by scaling new products and services across Next Tracker's high-volume global tracker footprint. We can translate modest investments funded from free cash flow into meaningful financial contributions for the company with significant incremental value for our customers. Our market opportunity is expanding rapidly, driven by the structurally increasing global demand for electricity to power AI data centers, EVs, and buildings. This unprecedented surge in electricity demand is approaching the limits of existing generation capacity with terawatts of incremental new capacity needed within the next five years. Many key customers have been asking us to offer additional products and services in addition to solar trackers to increase installation speed, improve system performance, and enhance long-term operating reliability. Customers value our solar domain expertise, innovation capabilities, supply chain actuement, financial strength, and business culture. In response to these customer requests, we began the transition from a pure-play tracker company to a solar power technology platform supplier last summer when we acquired two specialty foundation companies. Today's announcement that we've acquired Bentech Corporation, a pioneer in electrical balance of system for eBoss, extends the strategy and continues our evolution. The Bentech acquisition will enable our customers to source both tracker systems and eBoss components from a single highly bankable supplier, and we've completed additional acquisitions that we will be communicating over the coming months. I'm really excited about the opportunities that these combinations will unlock. We will be inviting analysts and investors to our headquarters in the fall to see our technologies firsthand and hear more about our longer-term plans to scale our business. Before turning the call over to Howard to review some of the highlights from the quarter and year, let me say how proud I am of the contributions of our employees and how grateful we are for the trust and partnership with our customers and suppliers.

As Dan noted, we had a great year and finished with a very strong quarter. Demand strength continued in Q4, helping to drive record bookings and backlog for FY25. We believe Next Tracker is benefiting from a general flight to quality, leading to expanded market leadership. Customers continue to recognize our differentiated advantage driven by our technology platform and supply chain, faster installation times, operational superiority, including superb on-time delivery, and overall bankability and strength. In the U.S., the general market environment remains strong. Tier 1 owner-developers continue to advance their projects and bring them to notice to proceed. Multiple owner-developers have told us that their pipelines are secure, including making the necessary safe harbor investments and locking in domestic supply. We are seeing substantially increased demand for a 100% domestic content in Q4 alone, with dozens of new utility and DG projects across the globe. The international pipeline continues to grow, and we are seeing more countries installing solar. In Europe, we had the strongest year ever, delivering record-breaking volume. Spain was particularly strong, and we saw good traction across other countries in Europe. We believe our market share grew to a leading position, benefiting from our XTR Terrain Following Tracker, which is critical to this region, as well as benefits from our cost reduction programs. We had a very solid year in Latin America, led by Brazil, and we extended our reach into new countries. We saw increasing sales gains in our TrueCapture yield management platform. Regional independent engineers now recognize the benefits of TrueCapture through extensive measurement and verification programs, which owners rely on for their purchase decisions. We were also pleased to see Latin America's first installation of our NX Horizon Low Carbon Tracker. And finally, we had excellent gains and big wins in other markets, including Australia, New Zealand, India, Saudi Arabia, and South Africa. Now, turning to R&D and Next Tracker's Innovation DNA. In Q4, we reached a record 1,220 patents, including 646 issued patents and 574 patents pending. These patent assets reflect our focus on engineering excellence and solving real-world challenges at scale. From control algorithms and structural design to tracker performance improvements, each patent represents a meaningful source of value for Next Tracker and for our customers. Our innovation focus drove strong demand for new products in FY25. This includes excellent uptake for our HailPro Series trackers with over 9 gigawatts of HailPro 60 and HailPro 75 sold during the year, providing solutions that really matter to owners in the insurance industry. We sold 17 gigawatts of XTR 0.75 and XTR 1.5 during the year, reinforcing our global leading position in terrain following. And we exceeded our sales plan for our recently acquired foundations business with one gigawatt booked, moving to pricing, costs, and project timing. In Q4, pricing for Next Tracker was generally stable and the company continues to manage costs well. Project timing was also stable and manageable on a portfolio basis in the quarter, with some projects accelerating and some pushing out, which as we have noted previously is the nature of large-scale projects spanning multiple quarters and years. Our backlog and large project portfolio provide excellent visibility and help reduce uncertainty. In summary, we had a great year and we enter our new fiscal year with momentum. We are well positioned to achieve our FY26 outlook, bolstered by strong backlog and the quality of our customer partnerships. Furthermore, we are excited to expand our product offering by adding E-BOS, foundations, and enhanced services to our global leading tracker offering. Our customers want us to do more and we are responding. We look forward to the upcoming Analyst Day in the fall where we will discuss in more depth our solar power platform strategy. Now I'll turn the call over to Chuck to discuss the outlook among other topics.

Thank you Howard and good afternoon everyone. I'm pleased to share our financial results for the fourth quarter and fiscal year 2025. We closed the year with yet another exceptional quarter, reflecting strong execution by the global Next Tracker team and continued momentum in the utility scale solar deployment worldwide. Let's start with revenue performance. Q4 reached a record 924 million, up 26% year over year, bringing our full year revenue to approximately $3 billion, an 18% increase over fiscal 24. Similar to fiscal 24, our full year geographic revenue mix was 69% in the U.S. and 31% from the rest of the world. Now moving to Q4 adjusted EBITDA expanded to a record 242 million, a 52% increase year over year with an adjusted EBITDA margin of 26%. For the year, adjusted EBITDA was 776 million, also a record and up 49% compared to fiscal 24. As a reminder, fiscal 24 adjusted results did not include 45X credits. Adjusted gross profit for the year was just over 1 billion. Q4 adjusted gross margin was 33.4%, down 260 basis points from Q3, primarily driven by one-time benefits recognized in the prior quarter. Adjusted diluted EPS for fiscal 25 was $4.22, up 38% year over year, and Q4 we delivered adjusted EPS of $1.29, a 34% increase compared to the prior year. We also delivered robust cash flow. Adjusted free cash flow was 227 million in Q4 and 622 million for the full year. Operating cash flow in Q4 was 237 million, offset by capex of 10 million. We closed the year with 766 million in cash with no debt and approximately 1.7 billion of total liquidity. This positions us well to continue investing in our strategic growth initiatives. During fiscal 25, we used 150 million of cash to retire our debt and approximately 152 million of cash to fund key acquisitions, including two foundations businesses. Today, we also announced the acquisition of Bentec Corporation, a leader in EBOS solutions, expanding our platform and enabling integrated offerings that reduce system costs and simplify utility scale solar deployment. Looking ahead to fiscal 2026, we expect revenue in the range of $3.2 to $3.4 billion with adjusted EBITDA between $700 and $775 million and adjusted diluted EPS in the range of $3.65 to $4.03. As Dan discussed, we are accelerating investments to capitalize on the opportunity ahead of us. This will include some additional optics to build out adjacent solutions, particularly around Bentec's technology and -to-market efforts. More specifically, in FY26, we plan to increase our OPEX as a percentage of revenue by approximately 100 basis points. We also plan to increase our capex to approximately 100 million in FY26, all while generating more than 450 million in free cash flow. On the M&A front, in FY25, we spent approximately $152 million in cash to acquire several businesses. As Dan mentioned, we recently closed several new transactions. The payments associated with these deals and our prior transactions will require approximately $110 million in cash this fiscal year. Excluding any additional M&A or capital allocation activity, we expect to end fiscal 26 with over $1 billion in cash. Investing for growth while driving strong cash generation remains core to our strategy. We expect structural growth margins for fiscal 26 in the low 30s. This takes into consideration geographic mix, impact of tariffs, and the investment to scale the recently announced acquisitions. While we have taken a prudent approach to guidance due to ongoing macroeconomic uncertainty, our confidence in the business is grounded in several key drivers. The strength of our record backlog, the continued flight to quality among solar developers, and the deep capability and commitment of our global team. In summary, Next Tracker delivered another year of record results with strong revenue growth, expanding profitability, and excellent cash generation. We are strategically reinvesting into this momentum to grow market share, expand our portfolio, and create long-term shareholder value. With that, we're happy to take your questions. Operator?

We'll now open the line for questions. If you'd like to ask a question, please dial star one on your telephone keypad. If for any reason you need to remove your question, you can dial star two. Again, to ask a question, it is star one. The first question is from the line of Mark Strauss with JPMorgan. Your line is now open.

Great. Thank you very much. Thanks for taking our questions. Congrats on the continued execution. Maybe Dan or Howard, there's a lot to get to here, but I wanted to start with the House tax bill. Just given your long experience in the space, knowing that things can still change, but just based on your experience, based on your initial conversations with partners, how workable do you think this package is with regards to some of the new provisions, like the timing being based on place and service, the FIAC requirements, et cetera? Not just for trackers, but for the overall space, just given my view that you're a good spokesperson for the overall industry. Thank you.

Thanks, Mark. This is Dan Sugar. Both Howard and I have been to Washington. We've met with congressional representatives. We've been working with our trade associations and obviously very focused on these issues. There are things in the reconciliation bill that are favorable, and there are things that need attention and ongoing work. In the favorable category, the 45X treatment as it relates to incentives to manufacture certain components in the United States. Additionally, the 48E as it relates to the timing of the 30% investment tax credits. The timing of those, those two are generally favorable. Need for improvement would be the transferability provisions, the placed in service versus start of construction timing as it relates to when tax credits are locked in, and the FIAC areas that deal with certain components that are in solar systems that may have a foreign origin, how those can impact. There are opportunities for improvement in those. I'd say it's fair that collectively, just with the Next Tracker people, we've met with over 15 representatives. In the last few weeks, our peers and industry associations have met with many more. I'd say generally very supportive of our Make in America initiatives. Next Tracker alone has had nine public factory openings of new or massively expanded factories making our equipment. We have over 25 manufacturer partners across the US. Others in the industry are amplified that, and that's really recognized. I think it's also recognized that solar is a really key part of the dominance and that solar was over 80% of the capacity installed in the grid last year. All that stuff's recognized. We're cautiously optimistic. The areas I outlined for need for improvement, we're going to have constructive dialogue with our representatives and be able to move the needle forward. That said, the final bill, it's not done until it's done, we'll need to see where that lands. Thanks, Mark. Next question, please.

Thank you. The next question is from Ben Callow with Bayard. Your line's now open.

Hey, guys. Congrats on the results. Maybe if you could just talk about international the business there and how we think about margin going forward as it pertains to your backlog, because I have a follow-up. Sure. This is

Howard. We're really pleased with how we ended the quarter both on the revenue side and booking side. We continue to perform within the 30% to 40% of our business being international or rest of world and the balance 60% to 70% being in the US. And that's where we're at. We've been very consistent. It's in our shareholder letter on that front. And our backlog reflects that. The international business continues to hum. There are more countries, as we noted in our remarks, that we did business in Q4 alone, 17 countries outside of the United States. And many of them are kind of, you know, countries that don't talk that much about, like Saudi Arabia and Greece and Peru and Chile and Bulgaria. These were countries where we actually booked and signed contracts in the quarter, amongst others. And from a margin perspective, we've been quite consistent in saying that the margins are lower internationally, generally speaking. And we've been able to, as a combined overall company, maintain really healthy margins in the past. And that's what we're outlooking going forward. Thanks for the question,

Ben. Thank you. The next question is from Philip Shen with Roth Capital Partners. Your line's now open.

Hi, everyone. Thanks for taking my questions. Congrats on the strong results. First one is a follow-up on the House Draft Bill. Shoghi mentioned the FIAC restrictions and then the change in language from construction starts to place and service. I was wondering if you might be able to quantify what kind of impacts there might be if these provisions were to become law? What kind of impacts could we see from each one of these new items on volumes for, let's say, for the industry, calendar 26 and 7? And then on bookings, can you share the directionality of what FQ4 bookings looked like? Was it well above a billion at one point? If you can give a decimal, that'd be great. And then what's your expectation in terms of bookings activity in the coming quarters, given the uncertainty in the marketplace? Although we have some better understanding of where the changes to the IRA might be now. Thanks.

Yeah, thanks, Phil. I'll take the first part as it relates to the policy, and then Howard will jump in on the rest. It's really early days on this bill. This bill's got a long way to go. It was just published. It's going to have quite a journey. And we don't have precise answers to your question. I would say, though, directionally, there'll be little impact for the next few years in terms of what our realized financial results will be. What we're looking at is more intermediate term, three, four years out, how it relates to new projects that, as the projects that are grandfathered in now, which can go two to three years, become fulfilled. And so it's really the future book of business that will have the most impact due to the policy areas that need work that we outlined earlier on the call. Howard, can you take the second part of this question,

please? Sure. Hey, Phil. So we've had sequential growth in our backlog since going public every quarter. And this last quarter was no exception. We had record revenue. And we still at 924 million. And we still increased backlog sequentially. So that gives you some color on the booking strength this quarter. And as far as in the coming quarters, our pipeline is healthy. The U.S. market, what we're finding is, and we talk a lot with owner developers, they've saved Harvard and they've secured their, the tier ones for sure, the ones with multi gigawatt pipelines with a lot of investment behind it. They've saved Harvard. And they're telling us their pipelines are secure, which means for us, it's really good news. So in addition to the backlog being significantly over 4.5 billion, our pipeline is continues to be very healthy. And the flagship of our, where we do business is the United States. And that continues moving forward. Thanks, Phil.

Thank you. The next question is from Brian Lee with Goldman Sachs. Your line is now open.

Thanks for getting the questions and kudos on the great execution here. I had two sort of modeling guidance related ones. The first one would just be around the revenue outlook. As you mentioned, your business is evolving. You're kind of a platform solutions model going forward. So can you give us a sense of, as we look at the 26 revenue guidance, how much of the revenue is coming from some of your new businesses like foundations and Ventek? How much is coming from maybe some price capture with steel going up? And then what's the sort of delta between what you're seeing in international growth versus domestic? And then secondly, just on margins, if I look at your guidance, you know, implying EBITDA margin sort of in the 22% range, you just came off a year where you did 26. I know you're talking about a hundred basis point headwind from higher up X and investment, but is there a bridge to why, you know, EBITDA margins are being implicitly guided down year on year, or is that just your level of conservatism getting baked in Thanks, guys.

Yeah, thanks, Brian. Chuck will get into some detail. I'll just say at a high level, we're guiding up for another year of solid growth. We'll be in terms of getting into how much the new product offerings will be contributing to our total picture. We'll be positioned to do that at the upcoming analyst day we're going to have in the fall. And we'll be inviting our analysts and investors to participate in that at our headquarters here in Silicon Valley. And we'll be breaking that down at greater detail at that time. Chuck?

Great. Thank you, Brian. So, you know, first of all, fiscal 25 was just a stellar year. The company had a record Q4 and had incredibly strong margins all year. What you saw, and we talked about in Q2 and Q3, was we had a number of tailwinds that really helped increase both gross margin and operating margins. As we look forward into fiscal 26, it's really a year where we're leaning in on growth and looking for multi-years of growth. We mentioned in our letter that we see in five years a third of our business coming from non-tracker revenue. So this strategy is really about leaning in for growth. And so we're investing in OPEX, as you mentioned. We're investing in CAPEX, investing in the acquisitions, as well as organic activities to drive growth that we'll talk about in the fall at our analyst day. You know, our margin profile, if you look at Q4, you know, we were in that .4% for Q4. And that's kind of a good number. And structural margins, as we talk about, are kind of in the low 30s, structural gross margins. And our outlook sort of contemplates that same kind of range for fiscal 26. And so we feel that, low 30s gross margins, low 20s EBITDA margins is a really good place to plan and run our business. Thank you.

Thank you. The next question is from Kashie Harrison with Piper Sandler. Your line's now open.

Good afternoon. Congrats on the fiscal year. And thanks for taking the question. So, you know, could you just walk us through strategic rationale, go to market, how much of the supply chain is US versus international, contract manufacturing versus direct manufacturing, and then cost structure? I just want to, you know, get a whole picture of how to think about the strategy behind this deal. Thank you.

Yeah, we'll do a few parts. I'll answer a bit on the strategy. Howard will then fill in some of the details to the extent we can go there. First, we couldn't be more excited about this. Let me just take a step back. We're systems thinkers. Okay. We've been doing this since the 80s. And, you know, back in the day, we actually designed, manufactured electrical balance system, as well as mechanical balances. And they go together, just like they do in your car or a of other components. And so we really see there's an opportunity to, for customers, to have one provider designing and supplying materials to the projects as in a buildable megawatts and delivering by blocks in a sequence that works for the customer. And also for these products to work well together, they touch each other. And so we're going to continue collaborating with the E-Boss, other E-Boss providers, we have a great deal of respect for the providers that exist. And we're going to have the then tech platform continue to support fixed systems, work with our tracker, work with other trackers. But to the extent it's involved with our tracker, we see opportunities to co-optimize the solutions to add increasing value for the customers as we look forward. Howard, would you like to pick it up from there, please?

Sure. So we see massive synergy between electrical balances system and the tracker because they touch each other, literally. And they're designed at the same time. And right now, we don't design E-Boss, but we have, as we've announced today, we are doing that now. So the same project engineering team, which is very large at Next Tracker, will be doing the design and engineering of the tracker and the E-Boss. We also see synergies in the product development, as Dan mentioned, like really thinking about the best and fastest way to install E-Boss with our tracker. But we're also going to make the E-Boss solutions that we have available for other trackers, including fixed-tilt systems. So we see a lot of synergy on the design side, engineering side, and then the sales platform. We touch the same customers. We're selling to the EPCs. The owners of the equipment really care about the tracker and they care about the E-Boss and the longevity, the reliability, the quality. And having our brand and our warranty wrapped around both is going to be very powerful. We've jumped into Howard's when you're finished. Sure. There's just a lot of synergy here. Yeah.

And just building on Howard's comment, we've actually had customers just tell us point blank. They say, we want to buy more from you, Next Tracker. Please offer more components. Now, what we really love about Bentech, we did a lot of due diligence, personally went on the floor. Their main operation is in San Jose. It's only 30 minutes from our headquarters in Fremont. They have a very well-provisioned facility with spare capacity, very professionally laid out. Bentech's been an early mover in this category of E-Boss for 15 years. We love their quality, reliability, ethos, their culture. They're testing 100% of the electrical harnesses before they ship, which is very important for durability, confidence for customers. And we've also spoken to a number of customers that have been working with them for a long time. For example, Solve Energy, which is one of the largest EPCs in the United States and the world, and one of the longest operating, is both a current customer and a long-term customer of Bentech. There's a quote by George Hirschman in our release, who's CEO, saying that he really welcomed this, and he's actually been encouraging us to lean in. The other thing I would just say is we need more manufacturing of all the above solar in the United States. Bentech has the ingredients to become a larger player in the U.S., but they were lacking financial support and they were lacking a holistic system design type approach to the system. We bring those things to them, and we're going to help building out the U.S. supply chain for and continuing to be one of the providers in the industry to support the growth of the U.S. solar industry. Down the road, we could look at offering these products overseas, and we could collaborate with others down the road as well. This was a good first step for us. We have domain expertise in this legacy. This gets us a very prudent step up and running into this segment, and we look forward to supporting their growth and serving customers.

I'll just close by saying that there's a saying that culture eats strategy for breakfast, and we are really culturally matched with Bentech. They have a we've interacted with them a lot, and it's going to be the integration of the companies is already seamless. Thanks for the question.

Thank you. The next question is from Julian DeMullen Smith with Jeffreys. Your line is now open.

Hey, good afternoon, team. Thank you guys very much and getting nicely done, I'd kind of say. Maybe just to follow up on that last one a little bit, let's focus on the strategy still. You talk about a third of your business coming from non-trekker revenues. That's pretty impressive. I mean, even if that's in five years from now, even a third of the revenues would be north of a billion dollars. How do you think about reconciling EBOS and or other categories? I mean, thinking about scaling this business up to a billion dollars plus, and realistically, what is sort of the cadence of that build out? I mean, what are you reflecting in guidance in 26, for instance? And how do you think about that trajectory, as well as given the liquidity and cash profile that you guys are alluding to here? I mean, what is the prospect for having further subsequent acquisitions reflected, say, by this time, you know, when you have the San Luis Day, late in the fall? You can speak to it. So, yeah, thanks, Julian.

Okay. Thanks, Julian. Dan Schroeder here. I'll take the first part, then Chuck will jump in on the second. We have, in addition to Ventek, completed some other acquisitions recently that we have not announced yet. And we'll be speaking about those when we're ready to in the coming months. And let me just pull back and just say, how do we approach new technology in the market and new products and services? First of all, we have a very strong organic internal R&D program. We've roughly tripled the investment in that over the last few years. And we're seeing the fruits of that in our bookings, in our shipments, with our, for example, our TrueCapture technology, our rain following XTR technology, our HalePro systems, all of which we've pioneered in the industry, and those are quantified to an extent in the shareholder letter and the low carbon tracker. So, you know, we're innovating getting the job done with organic development. Not all great technologies invented here. And sometimes even if we're working on something, it's more prudent to serve customers and scaling is to partner with others that have been doing it for a while and myopically focused on that. So, the E-BOSS is one category. We have other things that are very exciting. We'll be speaking to as soon as we're ready. And we'll be providing a lot more granularity about the build out of our non-tracker products and services offerings over the coming years during the analyst day in the fall. Chuck, can you pick it up from there, please?

I will. Thank you, Julian. You know, if you think about our cash generation, this is a really a great business. We generate a really good return invested capital. You look at the cash flow generation in 26, even after, you know, the capex that we're going to do, we expect to generate more than $450 million of free cash flow. And even after paying for the current acquisitions and the prior acquisitions, we expect to end the year with north of a billion dollars of cash. Now, that does not include new deals that we might do, but I'll say we're prioritizing organic investment. We're investing heavily in R&D, as Dan mentioned, and then we'll continue to evaluate other M&A opportunities. We may or may not do any or announce any, but, you know, we're looking for areas where we can add value to our customers and companies that will integrate well with our technology platform. Thank you, Julian.

Next question,

please. Thank you. The next question is from the line of Dimple Gossai with Bank of America. Your line's now open.

Thank you so much for taking my question and congrats on the quarter. Can you please help unpack, you know, the durability of the structural growth margins in the low 30s that you're kind of speaking to, especially for 2026? You know, I think I understand the geographic exposure and the margin to parentials there, but how much of that is kind of driven by 45X versus operational execution or product mix improvements, especially post this acquisition that we've just discussed and, you know, some of the software pieces?

Thank you, Dimple. But, you know, Next Tracker is such a great company. If you look at our backlog, I'd say not all, but, you know, the vast majority of 26 is contracted. And so there's a lot of work to do for sure, but we have very good visibility on pricing, margins, and cost for 26. Now, there's still work to do, but, you know, this is a business that we look at in terms of years and multi-years. And the structural margins for fiscal 26 are largely, you know, booked as of today, and so there's work to do, you know, still. But for the most part, we feel like we're really well positioned for 26.

Next question. The next question is from Moses Sutton with BMP Paribas. Your line's now open.

And thanks for squeezing me in. Two basic ones. First, it's great to see the EBOSS entry. What percent market share do you think Bentech has had in recent past, and does it have sufficient manufacturing capacity? And number two, are you starting to see strong pipeline and even booking visibility for 2028? It seems many specific projects are getting greenlit already, even before that draft bill came out.

This is Howard. Hey, Moses. So, Bentech, we put them in like the top three or four EBOSS suppliers in the U.S., and so they have a very, I would say, loyal following. They've been undercapitalized, frankly, so that's constrained their growth. So we're really looking forward to blocking that. And, you know, as Chuck mentioned, we're going to be giving more details on the outlook and impact on our business going forward. But they do have a pipeline that does extend out. We think this is one of the areas of like our sales team is so much larger than their team, and our platform for the U.S. and internationally is massive compared to their volume. So we think that we can really increase demand and supply and really ignite this business.

Thank you. Thank you. The next question is from Dylan Nassano with Wolf Research. Your line is now open.

Hey, good afternoon. Thanks for taking my question. Just a quick modeling one for me. On the 45X, it looks like that stepped up by about 25 million in the quarter relative to the kind of run rate of the previous couple of quarters. Is there any one-time items we should think about there? And then also, in terms of the 2026 guidance, can you just kind of speak to what kind of tariff framework you are assuming in there, and could we see movement towards the high end if more deals get done by the White House or vice versa, if tariffs ratchet back up? And then similarly, on the big beautiful bill, some of the items that you flagged that need some more work, if those get softened, could there potentially be any impact to the guidance range?

Great. I'll take the first two, and then Dan or Howard can take the third one. So on 45X, Dylan, yes, Q4 was a little better on the 45X than planned. There was a couple of kind of one-time benefits. It was small. I think as we've looked in the past, if you look throughout fiscal 25, we averaged about 11% of US revenue. That's probably the upper end of what we'd outlook for 26. So I'd look at roughly 11% of US revenue. And on the tariff side, we've taken a prudent approach with our outlook. We feel like we're covered for the year. It could be a little better, could be a little worse, but I think we feel like our outlook contemplates where things are going to land, and so we feel comfortable with our prudent outlook. Dan, you want to cover the third part?

I'm sorry. Could you restate the third part of that question, please?

Just, I mean, you guys identified some parts of the Republican proposal that maybe could use a little more work to be more beneficial for the industry. If that were to happen and we get something kind of softer with the Senate part of the bill, could you see movement towards the higher end of the range of guidance?

Well, I think what Chuck said is, and Howard, this year is pretty baked. I don't see that stuff impacting this year at all. Do you, Howard?

No. Yeah. I mean, look, the important thing is that it's kind of for this year and next year, all of our partners that we've talked with, and I'm talking about many, many developer owners and EPCs, they're saying that their pipelines are secure. All the major tier ones. Yeah. And so, of course, could there be upside? Yes, anything's possible. But we feel really good right now. Where we stand, we managed to an annual basis. We provided the outlook for the year. This is the first quarter. We feel very, very, very good about our outlook.

Yeah. And look, taking the long view, we went public a little over two years ago. At that time, our backlog was $2.1 billion. Today, it's well over $4.5 billion. And we just had a great quarter, in many quarters in a row of book to bill over one. So, we feel very good about the business. We feel great about our margin profile, our position in the market. We're going to continue operating with price discipline and really lean in on the innovation and customer service, listening customer, identify what their pain points are, either develop technology that addresses it or acquire those if we can, and then move with operational excellence to crush it. And basically have fantastic customer satisfaction. That's our DNA. And our team is myopically focused on that. Operator, we have time for one more question, please.

Absolutely. The last question for today is from the line of Praneeth Satish with Wells Fargo Your line is now open.

Thanks for squeezing me in here. So, I know you mentioned that customers have been coming to you asking for a combined tracker, EBOS solution. So, it seems like there could be some pent up demand here. When we think about the go to market strategy where you really kind of scale up the EBOS revenue, is that something that could start immediately in fiscal 2026? Or is it contingent on you finishing out some of the capex build that you referenced? Or is it a more gradual ramp that will take you into fiscal 27? Just trying to understand how to think about and model the attach rate for the EBOS offering. Thank you.

Sure.

Thanks.

We'll do a two part. Well, let me say they have real bookings. They're serving customers, stuff's shifting. And there's extra capacity at Ben Tech to continue scaling to take incremental business. So, that's the fact. Howard?

Yeah, we think that we can realize some benefits relative to their current run rate today. It's been like a week since we, or since we acquired them and realize those benefits this year in FY26. We do think that we can increase their run rate this year.

And just as a point of clarification, customers have asked us to do more than EBOS in terms of they want us. There's other things customers have asked us to do in terms of adding to our scope. I mean, we're systems oriented. In the earlier days in the industry, we were doing many parts of the pie in terms of the value pie for customers. And so, we're looking at where we can add value and where we can also complement the existing industry and basically help systems achieve higher levels of actual performance, which is a major thing. Okay, we'd like to thank you all so much for joining us for this earnings call to recap our fiscal year 2025 business. And as we set guidance for fiscal year 2026 and announced our launch of our EBOS business, we very much look forward to speaking with you in the fall. This concludes the call. Thank you very much.

That concludes today's call. Thank you for your participation. You may now disconnect your lines.