Nextracker (NXT) Q4 2025: Backlog Surges Past $4.5B as Platform Expansion Accelerates

2025-05-14 | By EarningsIQ Research

Nextracker’s Q4 capped a year of record execution, with backlog climbing above $4.5 billion and a decisive pivot toward a full solar power platform model. Strategic acquisitions, robust cash flow, and a deepening customer pipeline reinforce visibility for fiscal 2026, while margin guidance signals a deliberate investment cycle to capture long-term share.

Summary

• Backlog Momentum: Bookings strength pushed backlog above $4.5 billion, extending multi-year growth visibility.
• Platform Strategy in Motion: Acquisitions in eBOS and foundations mark a shift from trackers to a broader solar technology platform.
• Margin Tradeoff for Growth: Guidance bakes in margin compression as Nextracker invests to scale new business lines.

Performance Analysis

Nextracker delivered another quarter of record revenue and profitability, with Q4 revenue reaching $924 million, up 26% year over year, and full-year revenue climbing 18% to $3 billion. The business remains heavily weighted toward the U.S. market, which accounted for 69% of annual revenue, while international operations contributed the remaining 31%. Adjusted EBITDA for the year reached $776 million, a 49% increase, with adjusted EBITDA margin at 26% for Q4. Operating cash flow remained robust, supporting both organic investments and M&A activity.

Gross margin for Q4 came in at 33.4%, a sequential decline of 260 basis points, primarily due to one-time benefits in the prior quarter, but still within the company’s target structural range. Management highlighted record free cash flow and ended the year with $766 million in cash and no debt, providing ample liquidity for strategic initiatives.

• Backlog Growth Outpaces Revenue: Despite record Q4 revenue, Nextracker increased backlog sequentially, signaling sustained demand.
• International Diversification: Contracts signed in 17 countries in Q4, with Europe and Latin America showing particular strength.
• Cash Generation Enables Reinvestment: Over $450 million in free cash flow projected for FY26, supporting platform expansion and M&A.

While EBITDA margin is guided lower for FY26, management attributes this to planned increases in OpEx and CapEx to build out newly acquired business lines, not to underlying demand or price pressure.

Executive Commentary

Strategic Positioning

1. Backlog and Bookings Strength

Nextracker’s backlog now exceeds $4.5 billion, more than doubling since its IPO in early 2023. The company has achieved sequential backlog growth every quarter since going public, underpinned by a “flight to quality” among customers seeking bankable, reliable partners for utility-scale solar. This backlog provides multi-year revenue visibility and risk mitigation amid policy and market uncertainty.

2. Solar Platform Expansion

The transition from a pure-play tracker provider to a full solar technology platform is underway, with the acquisition of Bentec (electrical balance of system, or eBOS) and two foundation businesses. Management outlined a vision where non-tracker revenue could comprise one third of sales within five years, leveraging both organic R&D and targeted M&A to broaden the offering and deepen customer relationships.

3. Investment in Innovation and Manufacturing

R&D intensity remains high, with patent filings reaching 1,220 (646 issued, 574 pending), and new product launches (such as Hail Pro Series and XTR terrain-following trackers) driving differentiation. The company’s manufacturing footprint now spans over 90 sites in 19 countries, supporting both resilience and domestic content requirements—crucial for U.S. policy incentives and customer procurement preferences.

4. Margin Guidance and Resource Allocation

FY26 guidance calls for gross margins in the low 30s and EBITDA margins in the low 20s, reflecting a deliberate step-up in OpEx (up ~100 basis points as a percent of revenue) and CapEx (to $100 million) to support new business integration and go-to-market efforts. Management frames this as a multi-year growth investment, not a sign of underlying weakness.

5. Policy Navigation and Supply Chain Flexibility

Management continues to actively engage with U.S. policymakers, advocating for favorable implementation of tax credits and domestic content rules. The company’s diversified manufacturing and supplier base, with over 25 U.S. partners and extensive international reach, provides flexibility to navigate evolving trade and tariff regimes.

Key Considerations

This quarter marks a clear inflection in Nextracker’s business model, with the company leveraging its scale, balance sheet, and customer intimacy to expand beyond trackers into adjacent solar technologies. Investors should weigh both the near-term margin tradeoffs and the potential for platform economics over time.

Key Considerations:

• Platform Build-Out: Acquisitions in eBOS and foundations signal a strategic shift to end-to-end solar solutions, with integration and cross-selling opportunities ahead.
• Demand Visibility: Backlog and pipeline strength, especially among Tier 1 U.S. developers, supports top-line confidence despite policy uncertainty.
• Margin Compression: FY26 guidance bakes in higher investment spend, with structural margins still above most solar peers but below FY25 peaks.
• Geographic Diversification: International business remains a growth lever, but carries lower margins and greater execution complexity.
• Policy Tailwinds and Risks: U.S. incentives (45X, 48E) and domestic content requirements are double-edged, requiring ongoing advocacy and supply chain agility.

Risks

Key risks include policy volatility (especially around U.S. tax credits and tariffs), integration execution for recent acquisitions, and the challenge of scaling new business lines without diluting core profitability. International expansion brings additional margin and operational risks, while macroeconomic headwinds or delays in utility-scale solar deployments could pressure backlog conversion.

Forward Outlook

For Q1 2026, Nextracker guided to:

• Revenue between $3.2 and $3.4 billion for the full year
• Adjusted EBITDA of $700 to $775 million
• Adjusted diluted EPS of $3.65 to $4.03

Management expects:

• Gross margins in the low 30s, reflecting geographic mix and new business scaling
• Over $450 million in free cash flow, even after increased CapEx and M&A payments

Leadership emphasized that most FY26 revenue is already contracted, with backlog providing strong visibility and only modest policy-driven risk in the near term.

Takeaways

Nextracker’s Q4 and FY25 results reinforce its position as the global leader in utility-scale solar trackers, while the company’s rapid backlog growth and platform expansion signal a new phase of strategic ambition.

• Backlog as a Strategic Moat: Multi-year, $4.5+ billion backlog provides both revenue visibility and operational leverage as Nextracker expands its offering.
• Platform Economics in Formation: Early-stage investments in eBOS and foundations are expected to yield cross-selling and integration synergies, with the potential to reshape the P&L over time.
• Execution Watchpoint: Investors should monitor margin realization, integration progress, and the pace of non-tracker revenue growth as leading indicators of sustained value creation.

Conclusion

Nextracker enters FY26 with record momentum and a bold strategic agenda, using its scale and cash generation to transition toward a solar technology platform. Margin headwinds are a calculated tradeoff, with backlog and pipeline strength supporting the company’s growth thesis. Execution on integration and new business scaling will be the key watchpoints in the coming year.

Industry Read-Through

Nextracker’s results underscore the growing premium on bankability, platform breadth, and supply chain resilience in the utility-scale solar sector. The company’s ability to expand backlog and maintain margin discipline amid policy and cost volatility sets a high bar for peers. The move toward integrated solar platforms—combining trackers, eBOS, and foundations—signals an industry trend toward consolidation and value chain capture. Developers and EPCs are increasingly seeking turnkey solutions from trusted partners, a dynamic likely to accelerate as project complexity and scale grow. Solar supply chain players should expect intensifying competition and a rising bar for differentiation in both technology and customer service.

NXT Technology Renewable Energy Solar Platform Expansion Backlog eBOS Margin