Nextracker (NXT) Q1 2026: Backlog Hits $4.75B as Robotics and AI Bolster Platform Expansion
Nextracker delivered another quarter of robust growth, with backlog surging to a new record and strategic bets in robotics and AI signaling the company’s evolution beyond solar trackers. Amid ongoing US policy uncertainty, management highlighted resilient customer demand, stable project execution, and a strengthening global market position. The company’s expanding technology platform and deepening US supply chain flexibility set the stage for further margin durability and recurring revenue opportunities.
Summary
- Backlog Momentum: Record project backlog underscores sustained demand and strong competitive positioning.
- Platform Diversification: Robotics and AI acquisitions mark a pivotal move toward lifecycle services and digital solutions.
- Policy Navigation: Flexible US supply chain and safe harbor expertise support resilience amid regulatory shifts.
Performance Analysis
Nextracker’s Q1 results reflected both operational discipline and market tailwinds, with revenue and profitability advancing at a double-digit pace. The company’s project backlog climbed to $4.75 billion, marking its 15th consecutive quarter of sequential growth and providing multi-year visibility. This backlog now spans a diversified mix of North American and international projects, with management highlighting that approximately two-thirds of the business remains US-based and one-third international, a ratio that has held steady as global share expands.
Gross margins benefited from a combination of stable pricing, cost management, and policy-driven credits, notably the 45X tax credit, which delivered a 150 basis point lift this quarter tied to historical shipments. The company continues to target adjusted gross margins in the low 30% range, with operating margins in the low 20s. Free cash flow generation, while slightly down year-over-year due to increased growth investments, remains robust, with over $450 million expected for the full year. The balance sheet strength—$743 million in cash and no debt—provides ample capacity for further strategic investment.
- Project Backlog Acceleration: The $4.75B backlog, up sequentially, reflects continued global bookings strength and no material project dropouts.
- Margin Support from Policy Credits: The 45X tax credit offset higher US manufacturing costs, supporting margin stability as domestic content demand rises.
- Cash Flow and Investment: Growth investments in working capital and capex weighed on quarterly free cash flow, but the company projects strong generation for the year.
Backlog growth, margin resilience, and a healthy cash profile position Nextracker to fund both organic R&D and inorganic platform expansion as it shifts toward a lifecycle technology model.
Executive Commentary
"Our backlog hit a new record of over 4.75 billion, reflecting healthy global demand and an increasingly strong competitive position. We also continue to generate solid cash flow and strengthen our balance sheet."
Dan Shugar, CEO & Founder
"Our increased outlook is grounded in several key factors, including the strength and diversity of our backlog, a continued flight to quality among solar developers, and the deep capability and commitment of our global team."
Chuck Boynton, CFO
Strategic Positioning
1. Backlog and Customer Stickiness
Nextracker’s record backlog and high customer retention reflect its entrenched role with tier one developers, who report confidence in project pipelines and safe harbor compliance. The company’s ability to avoid project dropouts and maintain booking momentum, despite policy fluctuations, demonstrates the effectiveness of its customer engagement and risk mitigation strategies.
2. US Supply Chain Flexibility
With over 25 domestic manufacturing facilities and a 100% US-made tracker offering, Nextracker has built significant flex capacity to respond to evolving safe harbor and domestic content requirements. This supply chain agility enables the company to capture incremental demand shifts and policy-driven pull-ins, while offsetting higher costs with tax credits.
3. Platform Expansion: Robotics, AI, and Lifecycle Services
The company’s recent acquisitions in robotics and AI—covering autonomous inspection, robotic cleaning, and 3D site mapping—mark a decisive move beyond hardware into digital lifecycle solutions. These technologies integrate with TrueCapture, Nextracker’s proprietary performance optimization software, and are being commercialized via both equipment sales and emerging “robot as a service” (RaaS, recurring revenue for automation services) models. The appointment of a Chief AI and Robotics Officer signals a commitment to scaling these adjacent businesses globally.
4. Product Innovation and Margin Expansion
Rapid adoption of new systems like Hail Pro and expanded XTR tracker series (with quarter-over-quarter sales up 43% and 22%, respectively) highlight Nextracker’s ability to monetize innovation and respond to evolving customer and insurance requirements. The addition of foundation products and EBOS (electrical balance of system, the wiring and infrastructure connecting solar modules) further broadens the company’s addressable market and deepens project lifecycle integration.
5. Global Market Leadership
Nextracker’s global market share rose to 26% in 2024, with leadership positions in North America, Latin America, Oceania, and now Europe. The company’s international expansion is accelerating, with flagship projects and product launches extending its reach and diversifying revenue streams beyond US policy risk.
Key Considerations
The quarter reinforced Nextracker’s evolution into a diversified platform business, with operational execution and strategic investments positioning the company to capture a larger share of the utility-scale solar value chain.
Key Considerations:
- Recurring Revenue Potential: Robotics and AI services are being commercialized as recurring “robot as a service” offerings, which could smooth revenue and enhance margins over time.
- Policy Risk Mitigation: Deep safe harbor expertise and a flexible US supply chain reduce exposure to regulatory volatility and support customer confidence in project execution.
- Margin Durability: The interplay between US-made content premiums, policy credits, and cost management will be critical to sustaining margins as domestic manufacturing ramps.
- International Diversification: Growing non-US market share and new product launches in Europe and the Middle East hedge against US policy risk and open incremental growth channels.
Risks
Regulatory uncertainty remains a core risk, with upcoming Treasury guidance and executive orders potentially impacting project timing, customer investment behavior, and safe harbor requirements. Management flagged the possibility of both pull-ins and push-outs in US project schedules, though the diversified backlog and global exposure offer some insulation. Margin pressure from higher US manufacturing costs could intensify if policy credits diminish or supply chain inflation accelerates.
Forward Outlook
For Q2 and the remainder of FY26, Nextracker guided to:
- Full-year revenue of $3.2 to $3.45 billion
- Adjusted EBITDA of $750 to $810 million
- Adjusted diluted EPS of $3.96 to $4.27
Management expects quarterly revenue to remain balanced across the year and highlighted:
- The strength and diversity of the backlog as a key driver of visibility
- Potential impacts from pending Treasury and Interior Department guidance, which could shift project schedules
Takeaways
Nextracker’s Q1 demonstrated the company’s ability to convert market leadership into durable backlog and margin leverage, while platform investments in robotics and AI set up new recurring revenue streams.
- Backlog Integrity: Robust bookings and customer confidence support multi-year revenue visibility, even as US policy remains fluid.
- Platform Shift: Acquisitions and organic innovation in robotics and lifecycle management are repositioning Nextracker as a full-scope technology provider, not just a tracker manufacturer.
- Watch for Recurring Revenue Ramp: The commercialization of RaaS offerings and international product launches will be key to sustaining above-market growth and margin expansion.
Conclusion
Nextracker’s record backlog, operational resilience, and strategic bets in robotics and AI mark a turning point in its evolution from hardware leader to technology platform. The company’s ability to navigate policy headwinds while expanding its addressable market and recurring revenue base positions it well for durable, long-term growth.
Industry Read-Through
Nextracker’s results reinforce the accelerating shift toward utility-scale solar as a dominant force in global electricity generation, with policy-driven domestic content requirements and supply chain localization shaping competitive dynamics. The rapid adoption of digital and automation solutions signals a broader industry move toward lifecycle value capture and recurring service models. Competitors and adjacent players should note the rising importance of software, robotics, and flexible supply chains in securing project pipelines and sustaining margins in a volatile policy environment.