Nextracker raises FY26 revenue outlook to up to $3.475B while expanding global platform

Earnings Call Insights: Nextracker Inc. (NXT) Q2 2026

MANAGEMENT VIEW

* CEO Daniel Shugar opened by highlighting "another quarter of strong execution" and emphasized the company's focus on "innovation, long-term customer partnerships and execution." Shugar pointed to a 42% year-over-year revenue growth in Q2 to $905 million and a 29% increase in adjusted EBITDA to $224 million. He stated, "Over the past year, we've significantly expanded our technology platform from foundations and electrical balance of systems solutions to AI and robotics, and our suite of complementary products and services is gaining traction."
* Shugar announced a multiyear agreement with a U.S. solar panel manufacturer for "multi-gigawatt volumes of our advanced module frame technology, a deal valued at over $75 million." He explained that this agreement would "significantly increase domestic content of solar panels" and support customer eligibility for tax credits.
* The CEO also introduced new product launches: "We also launched NX PowerMerge in September, our new electrical balance of system trunk bus product and achieved record eBOS bookings in Q2 and the highest quarterly sales in Bentek's 40-year history."
* International strategy was underscored by the launch of "Nextracker Arabia, a joint venture with Abunayyan Holding, expanding our manufacturing footprint and commercial presence across the Middle East and North Africa."
* President Howard Wenger reported "strong global demand for our products and services, growing backlog to over $5 billion at quarter end." Wenger highlighted "record bookings for eBOS and foundations," and "record quarterly bookings for TrueCapture and our Navigator control system."
* CFO Charles Boynton stated, "Q2 revenue was $905 million, and adjusted EBITDA was $224 million, representing a 25% EBITDA margin... Adjusted free cash flow was $171 million for the quarter and $241 million year-to-date." Boynton added, "We closed the quarter with $845 million in cash, no debt and total liquidity of nearly $1.8 billion."

OUTLOOK

* Boynton raised the full year FY '26 outlook: "We now expect revenue between $3.275 billion and $3.475 billion, adjusted EBITDA between $775 million and $815 million and adjusted diluted EPS in the range of $4.04 to $4.25 per share."
* Management expects "modest margin impact due to Section 232 tariffs and a higher percentage of international projects."
* "Second half revenue to be slightly more weighted toward Q4... gross margins to continue to be in the low 30s and operating margins in the low 20s."

FINANCIAL RESULTS

* Year-to-date revenue reached $1.77 billion, and adjusted EBITDA for the first half totaled $438 million.
* Boynton noted, "Q2 gross margins and operating margins remained strong, reflecting benefits of 45x manufacturing credits, solid cost management and a favorable regional mix."
* Tariff-related headwinds increased to approximately 300 basis points in Q2, up from 200 basis points in Q1.
* The company maintained an asset-light model, with Boynton pointing to a "highly capital efficient" approach and significant cash reserves.

Q&A

* Mark W. Strouse, JPMorgan: Asked about industry growth outlook post-policy changes and tax credits. Shugar responded, "We feel the fundamentals for solar are very strong... the industry can stand on its own without tax credits and be economically viable."
* Brian Lee, Goldman Sachs: Questioned project timing and business mix. Shugar noted, "We have raised our outlook now both Q1 and in Q2 so we are seeing strength in the year... as we grow in scale, it is becoming a little more linear."
* Philip Shen, ROTH Capital: Inquired about bookings momentum and tariff impacts. Wenger said, "Demand is still there... another quarter of increased backlog."
* Praneeth Satish, Wells Fargo: Asked about the T1 Energy partnership and steel frame strategy. Shugar explained, "We see this as a great win for everyone. There’s a lot of opportunities to co-optimize these products and to really serve the industry."
* Dimple Gosai, BofA: Sought quantification of Saudi Arabia JV investment and local manufacturing. Shugar replied, "There’s actually a factory... that facility is shipping finished goods. We have multi-gigawatt orders, we're fulfilling right now."
* Corinne Blanchard, Deutsche Bank: Asked about TrueCapture revenue contribution. Shugar stated, "TrueCapture rev rec is really tied to commissioning of systems... rebounded to a really strong quarter of around 2% recognized this quarter."
* Ben Kallo, Baird: Queried about future M&A appetite and capital allocation. Boynton answered, "We are really, really intentional with not making the mistake of killing the company you've acquired by not investing in it."

SENTIMENT ANALYSIS

* Analysts displayed a positive to slightly bullish tone, focusing on growth, bookings, and the durability of demand, with questions probing expansion strategies and the impact of recent policies.
* Management maintained confident and assertive language throughout, with Shugar stating, "We’re confident in our ability to deliver sustained profitability and cash generation while scaling our platform globally."
* Compared to Q1, analyst sentiment remained constructive, while management's confidence in guidance and strategy was more pronounced, emphasizing platform expansion and international partnerships.

QUARTER-OVER-QUARTER COMPARISON

* Revenue and adjusted EBITDA increased from Q1, with the company raising full-year guidance for both metrics.
* Backlog expanded from over $4.75 billion in Q1 to over $5 billion at Q2 end.
* Strategic focus shifted toward integrated platform offerings, highlighted by new product launches and a major joint venture in the Middle East.
* Management's confidence was more explicit, and the tone of both analysts and executives grew increasingly focused on platform expansion and global scale.

RISKS AND CONCERNS

* Management cited "tariff-related headwinds of approximately 300 bps in Q2, up 200 bps over Q1."
* Section 232 tariffs and a higher percentage of international projects may modestly impact margins in the second half.
* Mitigation strategies include leveraging a "diversified supply chain, domestic manufacturing footprint and disciplined execution."

FINAL TAKEAWAY

Nextracker reported strong revenue and profitability growth in Q2 2026, highlighted by record bookings, ongoing platform expansion, and a growing backlog. Management raised its full-year outlook and emphasized the acceleration of integrated technology solutions, international expansion, and continued investment in new products and strategic partnerships. The company's confident tone, strengthened by a robust balance sheet and expanding global presence, signals sustained focus on growth and long-term value creation.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/nxt/earnings/transcripts]

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