Nextracker Inc (NASDAQ: NXT) Q4 2025 Earnings Call dated May. 14, 2025
Presentation:
Operator
Presentation
Operator
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 Next Tracker’s fourth quarter fiscal year 2025 earnings call. After the Speaker’s remarks, there will be a Q and 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.
Chuck Boynton
Chief Financial Officer | Nextracker Inc
Thank you and good afternoon everyone. Welcome to next tracker’s fourth quarter fiscal year 2025 earnings call.
I’m Chuck Boynton, Next Tracker 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 and 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 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 GAAP and non GAAP measures on today’s call.
The full non GAAP to GAAP 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
Dan Shugar
Chief Executive Officer | Nextracker Inc
Thank you for joining us today to discuss our fourth quarter results and to recap our accomplishments for fiscal 2025. Next Tracker 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 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, Next Tracker 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 US 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 US 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 from by virtue of our large geographically diversified order backlog with tier one 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 acumen, 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 BendTech Corporation, a pioneer in electrical balance of system or eBoss, extends the strategy and continues our evolution. The Bendtech 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.
Howard Wenger
President | Nextracker Inc
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 NextTracker 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 US 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 100% domestic content tracker which is currently being shipped to many projects in the international arena outside the US we signed contracts in 17 different countries 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 True Capture Yield Management platform. Regional independent engineers now recognize the benefits of True Capture 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 and D and next tracker’s innovation DNA in Q4 we reached a record 1220 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 Halepro series trackers with over 9 gigawatts of Halepro 60 and Halepro 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 book 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 eboss 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.
Chuck Boynton
Chief Financial Officer | Nextracker Inc
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 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 US and 31% from the rest of world. Now moving to profitability, 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. In 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 Bentech Corporation, a leader in EBOSS 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 opex to build out adjacent solutions, particularly around Ventex Technology and go 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 and 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 and 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 gross 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, NextTracker 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.
Questions and Answers
Operator
If you’d like to ask a question, please dial STAR1 on your telephone keypad. If for any reason you need to remove your question, you can dial Star 2 again to ask a question.
It is Star 1. The first question is from the line of Mark Strauss with JP Morgan. Your line is now open. Great. Thank you very much.
Mark Strouse
Analyst | J.P. Morgan
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 kind of based on your experience, based on kind of 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 placed in service, the the FIAC requirements, et cetera, not just for trackers but for the overall space.
Just kind of given my view that you’re a good spokesperson for the overall industry. Thank you. Thanks Mark. Both how 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 the timing of the 30% investment tax credits, the timing of those those two are generally 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 so there are opportunities for improvement in those.
Dan Shugar
Chief Executive Officer | Nextracker Inc
I’d say it’s fair that collectively just with the Nashtracker people. We’ve met with over 15 representatives most 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.
NextTracker Loan 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, you know, amplified that and that’s really recognized. I think it’s also recognized that solar is a really key part of the energy dominance and that, I mean, Solar was over 80% of the capacity installed in the grid last year. So that all that stuff’s recognized. So 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, you know, the final bill, it’s not done until it’s done, so we’ll need to see where that lands. Thanks, Mark. Next question, please.
Operator
Thank you. The next question is from Ben Callo with Baird. Your line’s now open.
Ben Kallo
Analyst | Baird
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. And I have a follow up.
Howard Wenger
President | Nextracker Inc
Sure. This is Howard. Yeah, we’re really pleased with how we ended the quarter both on the revenue side and booking side.
And 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 we 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. So from a margin perspective, we’ve been quite consistent 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, Dan.
Operator
Thank you. The next question is from Philip Shen with Roth Capital Partners. Your line’s now open.
Philip Shen
Analyst | Roth MKM
Hi, everyone. Thanks for taking my questions. Congrats on the strong results. First one is a follow up on the House draft bill.
Shug, you mentioned the FIAC restrictions and then the change in language from construction starts to place in service. Was wondering if you might be able to quantify what kind of impacts there might be if this, 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 1 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.
Dan Shugar
Chief Executive Officer | Nextracker Inc
Yeah, thanks. So 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 the 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 have will have the most impact due to the policy areas that need work that we outlined earlier earlier on the call. Howard, can you take the second part of this question please?
Howard Wenger
President | Nextracker Inc
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, we still at 924 million and we still increased backlog sequentially. So that gives you, that gives you some color on the booking strength this quarter. And as far as in the coming quarters, our pipeline is healthy. The US market, what we’re finding is and we talk a lot with owner developers, they’ve safe harbored and they’ve secured the tier ones for sure. The ones with multi gigawatt pipelines with a lot of investment behind it. They’ve safe harbor 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 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.
Operator
Thank you. The next question is from Brian Lee with Goldman Sachs. Your line is now open.
Brian Lee
Analyst | Goldman Sachs
Thanks for taking the questions and kudos on the great execution here. I had two sort of modeling guidance related Ones first one would just be around the revenue outlook. As you mentioned, Dan, 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 Ventech? 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 implying EBITDA margin sort of in the 22% range, you just came off a year where you did 20%. I know you’re talking about 100 basis point headwind from higher OPEX and investment, but is there a bridge to why EBITDA margins are being implicitly guided down year on year or is that just your level of conservatism getting baked in there? Thanks guys.
Dan Shugar
Chief Executive Officer | Nextracker Inc
Yeah, thanks Brian. Chuck will get into some detail. I’ll just say at a high level were 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 in a position 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,
Chuck Boynton
Chief Financial Officer | Nextracker Inc
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. You know, 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, that, you know, 33.4% for Q4 and that’s kind of a good number and that’s structural Margins as we talk about are kind of in the, 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, you know, low 30s gross margins, you know, low 20s EBITDA margins is a really good place to plan and run our business. Thank you.
Operator
Thank you. The next question is from Kashi Harrison with Piper Sandler Airlines now open.
Kashy Harrison
Analyst | Piper Sandler Companies
Good. Good afternoon. Congrats on the, the fiscal year and thanks for taking the question. So, you know, minor series just focused on Ventech. 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.
Dan Shugar
Chief Executive Officer | Nextracker Inc
Yeah, we’ll do a two part, 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 belt system as well as mechanical balances. And they go together just like they do in your car or a number 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 EBOSS, other EBOSS providers. We have a great deal of respect for the providers that exist and we’re going to have the Ventec platform continue to support the 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 to.
Howard, would you like to pick it up from there, please?
Howard Wenger
President | Nextracker Inc
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 eboss, 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 evos. We also See synergies in the product development, as Dan mentioned, like really thinking about what’s the best and fastest way to install EBAs with our tracker.
But we’re also going to make the EBOSS solutions that we have available for other trackers and 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 EBOSS and longevity, the reliability, the quality. And having our brand and our warranty wrapped around both is going to be very powerful. We’ve spoken with several customers already about it and they’re really excited, so.
And
Dan Shugar
Chief Executive Officer | Nextracker Inc
I’ll jump in Howard, when you’re finished.
Howard Wenger
President | Nextracker Inc
Sure. There’s just a lot of synergy here.
Dan Shugar
Chief Executive Officer | Nextracker Inc
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 Bend Tech, 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. Ventex, been an early mover in this category of Eboss 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. In the world and one of the longest operating is both a current customer and a long term customer of BendTech. 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 that we need more manufacturing of all the above solar in the United States and Ventech has the ingredients to become a larger player in the us 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 US supply chain for and continuing to be one of the providers in the industry to support the growth of the US solar industry down the road. We could look at bringing these products overseas.
And we could collaborate with others down the road as well. But 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 Ventech. They have a great leadership team over there. We’ve interacted with them a lot. We’ve. And there’s just, it’s going to be. The integration of the companies is going to.
Is already seamless. Thanks for the question.
Operator
Thank you. The next question is from Julian demoulin Smith with Jeffries. Your lines now open.
Julien Dumoulin-Smith
Analyst | Jeffries LLC
Hey, good afternoon team. Thank you guys very much and again, nicely done. I gotta 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 tracker revenues. That’s pretty impressive, right? 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, you know, Eboss and or other categories? I mean how much are you 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 this analyst day later this fall, you can speak to it.
So.
Dan Shugar
Chief Executive Officer | Nextracker Inc
Yeah, thanks Julian.
Julien Dumoulin-Smith
Analyst | Jeffries LLC
Scaling and.
Dan Shugar
Chief Executive Officer | Nextracker Inc
Okay, thanks Julian. Dan Sugar here. I’ll take the first part then chuckle, jump in on the second. We have in addition to Ventec, completed some other acquisitions recently that we have not announced yet. And we’ll be speaking about those when they’re, when we’re ready to in the coming months. And let me just pull back and just say how do we approach, how do we approach new technology in the market and new products and services? First of adanll, we have a very strong organic internal R and 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 what our shipments with our, for example, our true capture technology, our terrain 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 ladder 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 serving customers and scaling is to partner with others that have been doing it for a while and myopically focused on that.
So the 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?
Chuck Boynton
Chief Financial Officer | Nextracker Inc
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 on invested capital. You look at the cash flow generation in 26, even after 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 and D as Dan mentioned and then we’ll continue to evaluate other MA 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.
Operator
Thank you. The next question is from the line of Dimple Gosai with Bank of America. Your line is now open.
Dimple Gosai
Analyst | Bank of America
Thank you so much for taking my question and congrats on the quarter. Can you please help unpack the durability of the structural growth margins in the low 30s that you kind of spend speaking to especially for 2026? You know, I think I understand the geographic exposure and the margin differentials 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.
Howard Wenger
President | Nextracker Inc
Thank you. Dimple. 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.
Operator
The next question is from Moses Sutton with BMP Paribas. Your line’s now open.
Moses Sutton
Analyst | BNP Paribas Exane
Thanks for squeezing me in. Two basic ones. First, it’s great to see the EBOS entry. What percent market share do you think Bendtech has had in recent past and does it have sufficient manufacturing capacity? And number two, are you starting to see strong pipeline and even bookings visibility for 2028? It seems many specific projects are getting greenlit already, even before that draft bill came out.
Howard Wenger
President | Nextracker Inc
This is Howard.
Hey Moses. So Bentec, we put them in like the top three or four EBOSS suppliers in the US and so they, they have a very, I would say loyal following. They’ve been under capitalized frankly. So that’s constrained their growth. So we’re really looking forward to unlocking 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 US and internationally is massive compared to their volume.
So we think that we can really increase demand and supply and really ignite this business.
Moses Sutton
Analyst | BNP Paribas Exane
Thank you.
Howard Wenger
President | Nextracker Inc
Thank you.
Operator
The next question is from Dylan Nassano with Wolff Research. Your line is now open.
Dylan Nassano
Analyst | Wolfe Research
Hey, good afternoon. Thanks for taking my question. Just 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?
Chuck Boynton
Chief Financial Officer | Nextracker Inc
Great, I’ll take the first two and then Dan or Howard can take the third one.
So on 45X, Dylan, you know, 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 U.S. 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, you know, 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?
Dan Shugar
Chief Executive Officer | Nextracker Inc
I’m sorry, could you restate the third part of that question please?
Dylan Nassano
Analyst | Wolfe Research
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?
Dan Shugar
Chief Executive Officer | Nextracker Inc
Well, I think, you know what Chuck said is, and Howard, this year is pretty baked.
It doesn’t, I don’t see that stuff impacting this year at all. Do you, Howard?
Howard Wenger
President | Nextracker Inc
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 is. 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.
Chuck Boynton
Chief Financial Officer | Nextracker Inc
Yeah. And look I’ll just taking the long view, we went public a little over two years ago. At that time our backlog was, was 2.1 billion. Today it’s well over 4.5 billion. And we just had our, you know, a great quarter, you know and many quarters in a row of book to bill over one. So we feel, 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.
Operator
Absolutely. The last question for today is from the line of Pranith Satish with Wells Fargo. Your line’s now open.
Praneeth Satish
Analyst | Wells Fargo
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 with where you really kind of scale up the eboss 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.
Unidentified Speaker
Sure. Thanks. We’ll do a two part. Well, let me say they have real bookings, they’re serving customers, stuff shifting and there’s, there’s extra capacity at Bend Tech to continue scaling to take incremental business.
So that’s the fact, Howard.
Howard Wenger
President | Nextracker Inc
Yeah, we think that we can realize some benefits relative to their current run rate today. And it’s been like a week since we or you know, 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 eboss 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. You know, 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, you know, we’re looking at where we can add value and where we can also complement the existing industry and you know, basically help systems achieve higher levels of actual performance, which is a major thing.
Unidentified Speaker
Okay, I’d like, 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 EBOSS business, we very much look forward to speaking with you in callbacks and to hosting you at our analyst day coming up in the fall.
Operator
This concludes the call. Thank you very much. That concludes today’s call. Thank you for your participation. You may now disconnect your lines.