NXT 10-K & 10-Q changes, risk factors and insider trading

•Changes in the global trade environment, including the imposition of tariffs, other import tariffs and wide-ranging, reciprocal and retaliatory tariffsduties and trade restrictions, could adversely affect our business growth and the amount or timing of our revenues, results of operations or cash flows.

•We are dependent on a relatively small number of customers for our sales. A loss of one or more of our significant customers, their inability to perform under their contracts, or their default in payment, could harm our business and negatively impact our revenue, results of operations and cash flows.

•Defects orDefects, performance problems or vulnerabilities in our products could result in loss of customers, reputational damage and decreased revenue, and we may face warranty, indemnity and product liability claims arising from defectiveour products.

•Cybersecurity or other data security incidents could materially impactdisrupt our operations, compromise sensitive information, and adversely affect our financial performance,performance and reputation.

•UncertaintyThe in the development, adoption, integration, deploymentdevelopment and use of AIartificial intelligence in our products and services, as well as our business moreintroduces broadly,risks that could adversely affect our businessoperations, financial condition, and reputation.

•availability, scale and scope of government subsidies, government and tax incentives and financing sources to support the development and commercialization of solar energy solutionssolutions, including the timing, interpretation and implementation of such programs;

•levels of investment by project developers and owners of solar energy products, which tend to decrease when economic growth slows or capital becomes more expensive or less available;

•the emergence, continuance or success of, or increased government support for, other alternative or conventional energy generation technologies and products;

•local, state and federal permitting and other regulatory requirements related to environmental, land use and transmission issues, each of which can significantly impact the feasibility and timelines for solar projects and may result in delays, increased costs or project cancellations;

•the cost and availability of raw materials and components necessary to produce solar energy, such as steel, polysilicon and semiconductor chips; and

•regional, national or global macroeconomic trends, including further increased interest rates, inflation or a reduction in the availability of tax equity or project debt financing, which could make it difficult for project developers and owners to finance the cost of a solar energy system and new projects.projects; and

If demand for solar energy fails to continue to grow, demand for our products will plateau or decrease, which would have an adverse impact on our ability to increase our revenue and grow our business. In addition, demand may be volatile and subject to regional or project-specific fluctuations, which may make it difficult to forecast our operating results. If we are not able to mitigate these risks and overcome these difficulties successfully, our business, financial condition and results of operations could be materially and adversely affected.

We face intense competition from a large number of solar tracker companies in nearly all of the markets in which we compete. The solar tracker industry is currently fragmented.fragmented and competition may increase further as the industry evolves or consolidates. This may result in price competitioncompetition, including downward pressure on pricing, which could adversely affect our revenue and margins. In addition, as we expand our product offerings and offer additional technologies and services, the size and number of competitors will continue to increase.

Some of our competitors are developing or are currently manufacturing products based on different solar power technologies that may ultimately have costs similar to or lower than our projected costs. In addition, some of our competitors have or may in the future have lower costs of goods sold, lower operating costs, greater name and brand recognition in specific markets in which we compete or intend to sell our products, greater market shares, access to larger customer bases, greater resources and significantly greater economies of scale than we do. Additionally, new competitors may enter our market as a result of, among other factors, lower research and development costs.costs, reduced barriers to entry or the availability of government incentives or financing.

We may also face adverse competitive effects from other participants in the solar industry. For example, the price for solar panels has experienced significant declines in several markets globally in recent periods. Substantial pricing declines for panels can make the returns on investment for tracker technology less competitive in comparison to fixed tilt racking systems. In addition, other risks include EPCs subjecting their subcontractors who compete for their business, such as us, to contractual clauses that carry higher contractual risk to us, such as “pay if paid” clauses that requiresrequire an EPC to pay us only when the EPC’s end customer pays the EPC, higher liquidated damages amounts, increased contractual liabilities above 100% of the contract value and more limited force majeure clauses, among others.others, which could increase our risk exposure, reduce our margins or adversely affect our cash flows.

In addition, part of our strategy is to continue to grow our revenues from international markets. Any new geographic market could have different characteristics from the markets in which we currently sell products, and our ability to compete in such markets will depend on our ability to adapt properly to these differences.differences, including local regulatory requirements, customer preferences, competitive dynamics, currency fluctuations and geopolitical considerations. We may also face competition from lower cost providers in any new markets we enter, which could decrease the demand for our products or cause us to reduce the cost of our products in order to remain competitive. Any of these factors could have a material adverse effect on our business, results of operations, financial condition, and prospects.

We face significant competition from providers of conventional and other renewable energy alternatives such as coal, nuclear, natural gas and wind.wind, as well as emerging technologies such as energy storage and hybrid generation solutions. We compete with conventional energy sources primarily based on price, predictability of price and energy availability, environmental considerations and the ease with which customers can use electricity generated by solar energy projects. If solar energy systems cannot offer a compelling value to customers based on these factors, then our business growth may be impaired.

Conventional energy sources generally have substantially greater financial, technical, operational and other resources than solar energy sources, and as a result may be able to devote more resources to research, development, promotion and product sales or respond more quickly to evolving industry standards and changes in market conditions than solar energy systems. Conventional and other renewable energy sources may be better suited than solar for certain locations or customer requirements and may also offer other value-added products or services that could help them compete with solar energy sources. In addition, the source of a majority of conventional energygeneration electricitytechnologies, isparticularly non-renewable,those whichusing fossil fuels, may in certain markets allowbe themable to sellproduce electricity moreat cheaplya lower cost than electricitysolar, generatedparticularly bywhere solarfuel generationcosts facilities.are low or subsidized. Non-renewable generation is typically available for dispatch at any time, as it is not dependent on the availability of intermittent resources such as sunlight.sunlight, Thewhich cost-effectiveness,may performancemake andsuch reliabilitygeneration ofmore solar energy products and services, comparedattractive to conventionalcertain andcustomers otheror renewablegrid energyoperators, sources,particularly couldin materiallymarkets andthat adverselydo affectnot theadequately demandcompensate for ourintermittency productsor andcapacity services, which could have a material adverse effect on our business, financial condition and results of operations.attributes.

Many of our products are used in large-scale projects, which generally require a significant amount of planning and preparation and which have been and can be delayed and rescheduled for a number of reasons, including customer or partner labor availability, difficulties in complying with environmental and other government regulations or obtaining permits, interconnection delays, financing issues, changes in project priorities, additional time required to acquire rights-of-way or property rights, unanticipated soil conditions, or health-related shutdowns or other work stoppages. These delays have in the past resulted in and may in the future result in unplanned downtime, increased costs and inefficiencies in our operations, and increased levels of excess inventory.

Our quarterly results of operations are difficult to predict and may fluctuate significantly in the future. Because we recognize revenue on projects as legal title to equipment is transferred from us to the customer, any delays in large projects from one quarter to another may cause our results of operations for a particular period to fall below expectations. We have experienced seasonal and quarterly fluctuations in the past as a result of a variety of factors, including fluctuations in our customers’ businesses, changes in local and global market trends, fluctuations in economic, political, financial, industry and market conditions, regulatory or policy changes causing customers to delay, change or abandon their projects, as well as seasonal weather-related disruptions. For example, our customers’ ability to install solar energy systems is affected by weather, such as during the winter months. Inclement weather may also affect our logistics and operations by causing delays in the shipping and delivery of our materials, components and products which may, in turn, cause delays in our customers’ solar projects.

Federal, state, local and foreign government bodies provide incentives to owners, end users, distributors and manufacturers of solar energy systems to promote solar electricity in the form of tax credits, rebates, subsidies and other financial incentives. The range and duration of these incentives varies widely by jurisdiction. Our customers typically use our systems for grid-connected applications wherein solar power is sold under a power purchase agreement or into an organized electric market. This segment of the solar industry has historically depended in large part on the availability and size of government incentives supporting the use of renewable energy. Consequently, the reduction, elimination or expiration of government incentives for grid-connected solar electricity may negatively affect the competitiveness of solar electricity relative to conventional and non-solar renewable sources of electricity, and could harm or halt the growth of the solar electricity industry and our business. These reductions, eliminations or expirations could occur without warning. Any changes to the existing framework of these incentives could cause fluctuations in our results of operations.operations and create uncertainty in customer demand and project timing.

Under the IRA, investments in certain solar projects may qualify for aan domestic contentadditional bonus credit amount if the solar energy project satisfies certain “domestic content” requirements. On May 12, 2023, the U.S. Treasury Department and the IRS released Notice 2023-38 providing guidance with respect to the IRA’s domestic content bonus credit. On May 16, 2024, the U.S. Treasury Department and the IRS released Notice 2024-41, which includes a “safe harbor” that taxpayers may use to classify certain components of solar projects and for the purpose of qualifying for the domestic content bonus credit. On January 16, 2025, the U.S. Treasury Department and the IRS released Notice 2025-08, which introduced an updated elective safe harbor.harbor for the domestic content bonus credit. Generally, for a qualified facility or energy project to qualify for a domestic content bonus, the project must include specified amounts of U.S.-manufactured iron, steel and manufactured products and be able to substantiate that content and its country of manufacture. We have invested in developing a supply chain and U.S. manufacturing footprint to allow us to sell customers a solar tracker that we believe complies with the domestic content requirements provided in the Notices discussed above.

In 2024, the U.S. Treasury Department and the IRS issued final Treasury regulations on the elective payment of applicable credits under Section 6417 of the IRC and the transfer of certain credits under Section 6418 of the IRC. These final Treasury regulations provide guidance to taxpayers related to selling applicable tax credits including the ITC and Section 45X Credit.

On October 28, 2024, the U.S. Treasury Department and the IRS published the 45X Treasury regulations regarding the Section 45X Credit, which became effective on December 27, 2024. The 45X Treasury regulations retain the same basic structure as the proposed Treasury regulations issued on December 15, 2023 with certain revisions. In particular, the 45X Treasury regulations confirm that torque tubes and structural fasteners, including several used in our trackers, may qualify as eligible components.

The amount of the Section 45X Credit varies depending on the eligible component. In the case of torque tubes and structural fasteners, the credit amount is equal to 87 cents$0.87 per kilogram and $2.28 per kilogram, respectively, through the end of 2029.

The Section 45X Credit amount as scheduled in current law will be reduced each year by 25% of these amountsstarting in each of calendar years 2030, 20312030 and end after 2032. In calendar year 2024, ourOur eligible U.S. manufacturing suppliers availedavail themselves of the Section 45X Credits to varying degrees and we accounted for some of these economic benefits in our cost of acquiring torque tubes and structural fasteners. Beginning in calendar year 2025, in certain circumstances, we have directly obtained the benefit of the Section 45X Credit through the use of an election authorized in the 45Section 45X Treasury regulations.

In lieu of theSection ITC,48E, as a result of changes made by the IRA, United States taxpayers may also be allowed to elect to receiveclaim a production tax credit (“PTC”) under Section 4545Y of the IRC for qualified solar facilities if the construction of the facility began beforeafter JanuaryDecember 1,31, 20252024 and the facility is timely placed in service for federal income tax purposes after 2021.purposes.

The PTC is available for electricity produced by a qualifying solar project and sold to unrelated persons during the ten years following the qualifying solar project’s placement in servicerespect andof iskilowatt equal to an inflation-adjusted amount for every kilowatt-hourhours of electricity produced by a qualifying solar project and sold to one or more unrelated persons.persons during the ten years following the date on which the qualifying solar project is placed in service. The inflation-adjusted amount isof updatedPTC annually.available varies based on an annual inflation adjustment. The available credit amount is increased by up to 10% if the domestic content requirements described above are satisfied.

UnderThe IRA created Sections 48E and 45Y, which are “technology neutral” tax credit incentives that replace each of the IRA,ITC and the production tax credit under Section 45 of the IRC (“PTC”), respectively, for certain qualifying projects that begin construction and are placed in service after 2024,2024. eachThese of the ITC and PTC are replaced by similar “technology neutral” tax credit incentives, but alsoprovisions require that projectsa project satisfy a “zero greenhouse gas emissions” standard in order to qualify for the tax credits. Taxpayers that began construction onof energy projects or facilities that qualify for the ITC or PTC prior to 2025 may choose to claim the ITC, PTC, or one of the “technology neutral” tax credits in respect of the project assuming that certain continuous construction requirements are met. The technology neutral tax credits are generally available for projects that begin construction prior to 2034 or, if later, the year in which national greenhouse gas emissions are reduced below a threshold amount. Following that time, the technology neutral tax credits will become subject to a three-year phase-out schedule.

On January 7, 2025, the U.S. Treasury Department and the IRS released final Treasury regulations which were published in the Federal Register on January 15, 2025 (the “Clean Electricity Treasury regulations”) regarding the Section 45Y Credit and Section 48E with respect to certain qualified facilities and/or theenergy Sectionstorage 48Etechnology Creditclaiming withsuch respecttax to certain qualified facilities.credits.

The OBBBA did not change the prevailing wage and apprenticeship requirements imposed on our customers by the IRA. If we or our customers are unable to satisfy or cure respective prevailing wage and apprenticeship requirements under the IRA, for projects that establish the beginning of construction on or after January 29, 2023, the tax credits available to the customers will be lowersubstantially than the credits available prior to the IRA.lower. If we or a significant portion of our customers are unable to satisfy prevailing wage and apprenticeship requirements under the IRA, demand for our tracker products may be adversely impacted by the reduced tax credits available to our customers, which could have a material adverse effect on our business, financial condition and results of operations.

Certain provisions of the IRA have been the subject of substantial public interest and have been subject to debate, and there are divergent views on potential implementation, guidance, rules and regulatory principles by a diverse group of interested parties. We expect a similar pattern of divergent interpretations with respect to OBBBA, the Executive Order and implementing guidance and regulations. There can be no assurance that our products will fully qualify for the benefits under the IRA or the OBBBA or that competitors will not disproportionately benefit or gain competitive advantages as a result of the IRA’s implementation or interpretation.interpretation of these laws. In addition, if our customers or suppliers incorrectly interpret the requirements of the IRA’s tax credits or the OBBBA and it is later determined that the tax credits were incorrectly claimed, we may be penalized. As a result, the final interpretation and implementation of the provisions in the IRA or OBBBA could have a material adverse impact on us.

Furthermore, future legislative enactments or administrative actions could limit, amend, repeal or terminate IRAfederal or othertax incentives that we currently do, or hope toto, leverage. Any reduction, elimination, or discriminatory application or expiration of thecurrent IRAand any future federal tax incentives may materially adversely affect our future operating results and liquidity.

In addition, federal, state, local and foreign government bodies have implemented additional policies that are intended to promote or mandate renewable electricity generally or solar electricity in particular. For example, many U.S. states have adopted procurement requirements for renewable energy production and/or a renewable portfolio standard (“RPS”) that requires regulated utilities to procure a specified percentage of total electricity delivered to customers in the state from eligible renewable energy sources, including utility-scale solar power generation facilities, by a specified date. While the recent trend has been for jurisdictions with RPSs to maintain or expand them, there have been certain exceptions and thereThere can be no assurances that RPSs or other policies supporting renewable energy will continue. Proposals to extend compliance deadlines, reduce renewable requirements or solar set-asides, or entirely repeal RPSs emerge from time to time in various jurisdictions. Reduction or elimination of RPSs, restrictions or prohibitions imposed on solar projects, as well as changes to other renewable-energy and solar-energy policies, could reduce the potential growth of the solar energy industry and materially and adversely affect our business.

Moreover, changes in policies of recent U.S. presidential administrations have created regulatory uncertainty in the renewable energy industry, including the solar energy industry, and have adversely affected and may continue to adversely affect our business. For example, in the span of less than six years, the United States joined, withdrew from, and then rejoined the 2015 Paris Agreement on climate change mitigation following changes in administration between U.S. Presidents Obama, Trump and Biden. To start his second term, U.S. President Trump signed numerous executive orders including for the U.S. to again withdraw from the Paris Climate Treaty, to expedite deregulated oil and gas drilling, and revoke executive orders and actions from the previous administration related to, among other things, the implementation of the energy and infrastructure provisions of the IRA. Additionally, under President Trump, the U.S. Department of the Interior implementedand aU.S. 60-dayDepartment pauseof onEnergy have recently taken several steps to prohibit, prevent or delay new renewable energy projectsprojects. For example, on publicJuly land15, or2025 inthe publicDepartment watersof Interior issued an internal memo entitled “Departmental Review Procedures for Decisions, Actions, Consultations, and Other Undertakings Related to Wind and Solar Energy Facilities.” The memo mandates that 69 categories of previously routine permitting and review activities related to wind and solar projects be elevated to top levels within the Department of Interior, which beganmay onsubstantially Januaryslow 20,approval 2025.timelines Thisand pause, or a similar pause, on renewable energy project development, particularly if extended, could delayreduce the timingnumber of projects and could have a material adverse impact on our business, financial condition and results of operations.permitted.

In addition, the U.S. Supreme Court’s decision on June 30, 2022 in West Virginia v. EPA, holding that the U.S. Environmental Protection Agency (“EPA”) exceeded its authority in enacting a subsequently repealed rule that would have allowed electric utility generation facility owners to reduce emissions with “outside the fence measures,” may limit EPA’s ability to address greenhouse gas emissions comprehensively without specific authorization from Congress. It is difficult to predict what further actions will be taken that may impact our business including revisions to the IRA and other federal incentives relatingrelated to renewable energy.

Changes in the global trade environment, including the imposition of tariffs, other import tariffs and wide-ranging, reciprocal and retaliatory tariffsduties and trade restrictions, could adversely affect our business growth and the amount or timing of our revenues, results of operations or cash flows.

Escalating tradeTrade tensions, particularly between the United States and China, have led to increased tariffs and trade restrictions, including tariffs applicable to certain materials for and components forof our products such as steel orand low-power solar modules, electrical equipment, orand for products used in solar energy projects more broadly, such as storage batteries and solar modules. The U.S. government has recently imposed additional, new, or higher tariffs on certain products from China and China has responded by imposing additional, new, or higher tariffs on certain products imported from the United States.

Unless the context requires otherwise, references in this Annual Report on Form 10-K to “NextrackerNextpower”, the “Company”, “we”, “us” and “our” shall mean, prior to the IPO, NextrackerNextpower LLC ("NextrackerNextpower LLC" or the “LLC”, formerly Nextracker LLC) and its consolidated subsidiaries, and following the IPO and the related transactions completed in connection with the IPO, NextrackerNextpower Inc. and its consolidated subsidiaries. References in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “Flex” refer to Flex Ltd., a Singapore incorporated public company limited by shares and having a registration no. 199002645H, and its consolidated subsidiaries, unless the context otherwise indicates.

2023This Management’s Discussion and Analysis of Financial Condition and Results of Operations is designed to provide a reader of our consolidated financial statements with a narrative from the perspective of the Company’s management. This section of this Annual Report on Form 10-K discusses fiscal year 2026 and 2025 items and year-to-year comparisons between fiscal year 2026 and 2025. Discussions of fiscal year 2025 items and year-to-year comparisons between fiscal year 2025 and fiscal year 2024 are not included in this Annual Report on Form 10-K and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K, filed with the SEC on May 28,22, 2024, as amended by our Annual Report on Form 10-K/A, filed with the SEC on June 6, 2024.2025. You should read the following discussion in conjunction with the notes to the consolidated financial statements and other information included elsewhere in this Annual Report on Form 10-K. In addition to historical financial information, the following discussion and analysis contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based upon current expectations that involve risks, uncertainties and assumptions. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. For example, the words “believes,” “anticipates,” “plans,” “expects,” “intends” and similar expressions are intended to identify forward-looking statements. Our actual results and timing of selected events may differ materially from those results anticipated and discussed in the forward-looking statements as a result of many factors. Factors that might cause such a discrepancy include, but are not limited to, those discussed under the sections titled “Liquidity and Capital Resources” below and “Risk Factors.” All forward-looking statements in this document are based on information available to us as of the date of this Annual Report on Form 10-K and we assume no obligation to update any such forward-looking statements, except as required by law.

FoundationsBusiness Acquisitions

The aggregate cash consideration of the Foundationsforegoing Acquisitionsbusiness acquisitions was approximately $144.7$116.8 million, net of $4.4 million cash acquired. Additionally, theTheir aggregate total purchase price of $164.7$149.4 million includes $14.0$2.7 million of deferred consideration expected to be paid within a 12-month period, aand $3.4$29.9 million releaseof contingent earnout in aggregate (with a maximum possible consideration of a loan obligation previously owed by the seller and a $2.6$58.5 million contingent earnout.). For further detaildetails on the acquisitions refer to Note 1514 in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

We generate revenue primarily from the sale of solar trackers system, including foundations, and from TrueCapture,but our energysolutions extend to include yield management system.systems, foundations, steel frames, electrical balance of systems (eBOS), robotic services, risk mitigation and operability solutions and emerging technologies designed to optimize performance across the entire solar power plant. Our most significant source of revenue is the sale of solar tracking products. Our customers include EPCs, as well as solar project developers and owners. We usually enter into a different contract with our customers for each individual solar project. Contracts typically stipulate total price, technical solution, specifications of the system sold, delivery and activation schedule, warranty terms and related services provided. The delivery period for a specific contract can range from days to several months depending on the size of the project. Our contract prices range from a few hundred thousand dollars for the smallest projects to over one hundred million dollars for the largest.dollars.

Demand for our products is largely driven by installations of utility-scale solar projects around the world. The volume of solar projects installations is dependent on a variety of factors, including, but not limited to, the cost of solar plants in comparison to other forms of power generation, prevailing electricity prices, conventional power generation plant retirement, global renewable energy targets, government regulations, and public incentives promoting solar energy. Our revenue is subject to variability as these factors change over time, and as a result may cause variability in our quarterly shipments. Increases in competitive tracker pricing pressure can also affect our revenue by lowering the average selling price (“ASP”) of our products. Our integrated design approach enables deployment across a wide range of topographical and climate conditions and supports efficient construction and long-term operation of utility-scale solar projects. By combining hardware, software, and engineering capabilities, we aim to deliver scalable solutions that help customers meet increasing demand for reliable, cost-effective electricity.

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC for reporting financial information. In the opinion of our management, all adjustments (consisting only of normal recurring adjustments) considered necessary to present our financial statements fairly have been included. All intercompany transactions and accounts within NextrackerNextpower have been eliminated.

The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. Estimates are used in accounting for, among other things: impairment of goodwill, impairment of long-lived assets, allowance for credit losses, provision for excess or obsolete inventories, valuation of deferred tax assets, warranty reserves, contingencies, operation related accruals, fair values of awards granted under stock-based compensation plans and fair values of assets obtained and liabilities assumed in business combinations.combinations (including contingent earnout liabilities). We periodically review estimates and assumptions, and the effects of our revisions are reflected in the period they occur. We believe that these estimates and assumptions provide a reasonable basis for the fair presentation of the consolidated financial statements.

We have executed agreements with certain suppliers to grow our U.S. manufacturing footprint. These suppliers produce 45X Credit-eligible parts, including torque tubes and structural fasteners, that will then be incorporated into a solar tracker. The 45X Credit was eligible for domestic parts manufactured after January 1, 2023. We have contractually agreed with these suppliers to either share a portion of the economic value of the credit related to our purchases in the form of a vendor rebate or assign their credit directly to us (“an assignment”) pursuant to Section 6418 of the IRC. We account for the 45X Credits shared or assigned to us as a reduction of the purchase price of the parts acquired from the vendor and therefore a reduction of inventory until the control of the part is transferred to the customer, at which point we recognize such amounts as a reduction of cost of sales on the consolidated statements of operations and comprehensive income.income (refer to Note 13 in the notes to the consolidated financial statements). 45X Credits assigned to us are also treated as a reduction to our federal tax payable as further discussed in Note 1312 in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

We have recorded a liability of $419.4$393.2 million and $391.6$419.4 million, as of March 31, 20252026 and 2024,2025, respectively, of which $394.9$372.7 million and $391.6$394.9 million, respectively, were included in TRA liabilities and $24.5$20.5 million and zero,$24.5 million, respectively, were included in other current liabilities on the consolidated balance sheets and represents 85% of the estimated future tax benefits subject to the Tax Receivable Agreement entered into by NextrackerNextpower Inc. on February 13, 2023 (the “Tax Receivable Agreement” or “TRA” ). In U.S. federal, state and local income tax or franchise tax that we realize or are deemed to realize (determined by using certain assumptions) as a result of favorable tax attributes, will be available to us as a result of certain transactions executed in connection with our IPO and follow-on offering, exchanges of Class A common stock and payments made under the TRA. The actual amount and timing of any payments under these agreements will vary depending upon a number of factors, including the amount and timing of the taxable income we generate in the future and the tax rate then applicable, and the portion of our payments under the TRA constituting imputed interest. Estimating future taxable income is inherently uncertain and requires judgment. In projecting future taxable income, we consider our historical results as well as assumptions related to future forecasts for our various businesses by location. The impact of any changes in the total projected obligations recorded under the TRA as a result of actual changes in the geographic mix of our earnings, changes in tax legislation and tax rates or other factors that may impact our actual tax savings realized will be reflected in income before taxes in the period in which the change occurs.

We derive our revenue primarily from the sale of solar trackers and energy yield management systems to our customers. Our revenue growth is dependent on (i) our ability to maintain and expand our market share, (ii) total market growth and (iii) our ability to develop and introduce new products driving performance enhancements and cost efficiencies throughout the solar power plant. To a lesser extent, we also derived our revenue from yield management systems, foundations, steel frames, eBOS, AI and robotic services, and other.

Steel prices, cost of transportation, and labor costs in countries where our suppliers perform manufacturing activities affect our cost of sales. Our ability to lower our cost of sales depends on implementation and design improvements to our products as well as on driving more cost-effective manufacturing processes with our suppliers. We generally do not directly purchase raw materials such as steel or electronic components and generally do not hedge against changes in their price. Most of our cost of sales are directly affected by sales volume. Personnel costs related to our supply chain, logistics, quality, tooling and operationstooling are not directly impacted by our sales volume.

Selling, general and administrative expenses consist primarily of personnel-related costs associated with our administrative and support functions. These costs include, among other things, personnel costs, stock-based compensation, facilities charges including depreciation associated with administrative functions, professional services, travel expenses, and allowance for bad debt. Professional services include audit, legal, tax and other consulting services. We have expanded our sales organization and expect to scale our sales headcount to support our planned growth. We have incurred and expect to continue to incur on an ongoing basis certain new costs related to the requirements of being a publicly traded company, including insurance, accounting, tax, legal and other professional services costs, which could be material. Amortization of intangibles consists of customer relationships and trade names over their expected period of use and is included under selling, general and administrative expenses. Acquisition relatedAcquisition-related costs are also included under selling, general and administrative expenses.

Research and development expenses consist primarily of personnel-related costs associated with our engineering employees, stock-based compensation, as well as third-party consulting.consulting and supporting our new business acquisitions. Research and development activities include improvements to our existing products, development of new tracker products and energy yield management systems.systems and innovations to expand our technology platform. We expense substantially all research and development expenses as incurred. We expect that the dollar amount of research and development expenses will increase in amount over time.

Our taxable income is primarily from the allocation of taxable income from the LLC. The provision for income taxes primarily represents the LLC’s U.S. federal, state, and local income taxes as well as foreign income taxes payable by its subsidiaries. The LLC owns 100% of all foreign subsidiaries. We expect to receive a tax benefit for foreign tax credits in the United States for our distributive shares of the foreign tax paid.

We present Adjusted gross profit, Adjusted operating income, Adjusted net income, Adjusted EBITDA, Adjusted gross margin, Adjusted net income margin and Adjusted EBITDA margin as supplemental measures of our performance. We define Adjusted gross profit as gross profit plus stock-based compensation expense and intangible amortization. We define Adjusted operating income as operating income plus stock-based compensation expense, intangible amortization and non-recurring integration activities related to acquisitions. We define Adjusted net income as net income (loss) plus stock-based compensation expense, intangible amortization, non-recurring tax adjustments, non-recurring integration activities related to acquisitions and certain nonrecurring legal costs and other discrete events as applicable, net of their tax effects. We define Adjusted EBITDA as net income (loss) plus (i) interest, net, (ii) debt extinguishment costs, (iii) provision for income taxes, (iiiiv) depreciation expense, (ivv) intangible amortization, (vvi) stock-based compensation expense, (vi) various non-recurring tax adjustments and (vii) certain nonrecurring legal costs,non-recurring integration activities related to acquisitions and (viii) other discrete events as applicable. We define Adjusted gross margin as the percentage derived from Adjusted gross profit divided by revenue. We define Adjusted net income margin as the percentage derived from Adjusted net income divided by revenue. We define Adjusted EBITDA Marginmargin as the percentage derived from Adjusted EBITDA divided by revenue.

(21)Represents transaction and integration costs incurred in relation to our Foundations acquisitions. We do not believe that the acquisition transaction costs are normal, recurringnormal operating expenses indicative of our core operating performance, nor were these charges taken into account as factors in evaluating management’s performance when determining incentive compensation or to evaluate the effectiveness of our business strategies.

Cost of sales increased by $263.6$448.9 million, or 16%,23%, during fiscal year 20252026 compared to fiscal year 20242025 primarily due to the increase in GW delivered noted above, along with higher cost associated with the increase in headcount as a result of our recent business acquisitions also noted above, coupled with the impact from a $110.7 million increase in tariffs which increased to $130.4 million in fiscal year 2026 from $19.7 million in fiscal year 2025, offset by the impact from the 45X Credit.Credit (refer to Note 13 in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K). As noted in the overview, we now recognize a reduction in cost of sales for the 45X Credit earned on components manufactured in the U.S. During fiscal year 2025,2026, we recognized approximately $224.9$379.9 million of reduction to cost of sales related to the 45X Credit earned on production of eligible components shipped during the period, compared to $121.4$224.9 million recognized in fiscal year 2024.2025. Freight and logistics costs decreased(excluding slightlytariffs) as a percentage of revenue remained relatively flat at approximately 6% during fiscal yearyears 20252026 comparedand to fiscal year 2024.2025.

Gross profit increased by $195.8$151.3 million, or 24%,15%, during fiscal year 20252026 compared to fiscal year 2024,2025, primarily resulting from the U.S. and Rest of the World revenue growth noted above and the impact of the 45X Credit discussedrecognized, below.offset Maintainingby pricingthe discipline,higher favorabletariffs coupled with the higher cost absorption,associated including lower freight and logistic costs, acrosswith our customerincrease basein andheadcount regionsnoted we serve were the primary drivers supporting the increased margin. We have also expanded our global supply chain that allows sourcing local material, provides flexibility servicing our customers and directly reduces freight and logistics costs.above. Freight and logistics costs (excluding tariffs) as a percentage of cost of sales decreasedincreased by about 120118 basis points during fiscal year 20252026 compared to fiscal year 2024.2025. Gross margin increaseddecreased by 157150 basis pointspoints, fromto 32.5%32.6% for fiscal year 20242026 tofrom 34.1% for fiscal year 2025.2025 primarily resulting from the increase in tariffs noted above that were not fully included in pricing.

Selling, general and administrative expenses increased $106.8$51.6 million, or 58%,18%, to $290.3$341.9 million for fiscal year 2025,2026, from approximately $183.6$290.3 million in fiscal year 20242025, while also increasingdecreasing approximately 24720 basis points from approximately 7.3%9.8% to overapproximately 9.8%9.6% as a percentage of revenue during the same period. The increase in selling, general and administrative expenses was primarily the result of anapproximately increase in stock-based compensation expense of $60.2$40.1 million incurred in conjunction with our 2022 equity incentive plan, and the remaining increaserise in costs of approximately $46.5 million related to our continued expansion of our sales organization in line with the growth in the global market, and the expansion of our supporting functions also required to support our current and planned growth.growth, coupled with a $5.0 million increase in acquisition-related costs incurred in conjunction with our new business acquisitions, offset by a $6.5 million decrease in stock-based compensation expense incurred in conjunction with our 2022 equity incentive plan.

Research and development expenses increased $37.0$41.5 million, or 87%,52%, to $79.4$120.9 million for fiscal year 20252026 from approximately $42.4$79.4 million during fiscal year 20242025 driven by our continued investment in innovation, expandingincreasing our engineering team and supporting our new businessexpanded acquisitions.product portfolio.

Interest expense modestly decreased $0.7$10.5 million, or 5%,80%, to $13.1$2.6 million for fiscal year 20252026 from $13.8$13.1 million during fiscal year 2024.2025, primarily driven by the full repayment of the Term Loan under the Prior Credit Agreement in the fourth quarter of fiscal year 2025.

We accrue and pay income taxes according to the laws and regulations of each jurisdiction in which we operate. Most of our revenue and profits are generated in the United States with a statutory income tax rate of approximately 21% in fiscal years 2025, 20242026 and 2023.2025. For fiscal years 2025, 20242026 and 2023,2025, we recorded total income tax expense of $130.8 million, $111.8$127.9 million and $47.8$130.8 million, respectively, which reflected consolidated effective income tax rates of 20.2%, 18.4%17.9% and 28.2%,20.2%, respectively. The increasedecrease in tax expense as well as effective tax rate from fiscal year 20242025 to 20252026 is driven by aan reductionincrease in realizable foreign tax benefitscredits related to stockprior basedyear compensationtransfer associatedpricing with the non-deductible executive compensation,adjustments and thedeferred changetax inbenefit thedue amountto ofan non-controlling interests as further described in Note 6 in the notesincrease to the consolidatedestimated financialU.S. statementsstate includedtax elsewhere in this Annual report on Form 10-K.rate.

Our principal uses of cash have been to fund our operations and invest in research and development and our cash flow generation and credit facilities have continued to provide adequate liquidity for our business. We enhanced our capital structure with a $1.0 billion unsecured revolving credit facility, expanding our total liquidity to approximately $2.0 billion as of March 31, 2026.

•Changes in the global trade environment, including the imposition of tariffstariffs, andother import duties, as well as wide-ranging, reciprocal and retaliatory tariffsduties and trade restrictions, could adversely affect our business growth and the amount or timing of our revenues, results of operations or cash flows.

•We are dependent on a relatively small number of customers for our sales. A loss of one or more of our significant customers, their inability to perform under their contracts, or their default in payment, could harm our business and negatively impact our revenue, results of operations and cash flows.

•Cybersecurity or other data security incidents could materially impactdisrupt our operations, compromise sensitive information, and adversely affect our financial performance,performance and reputation.

•UncertaintyThe in the development, adoption, integration, deploymentdevelopment and use of AIartificial intelligence in our products and services, as well as our business moreintroduces broadly,risks that could adversely affect our businessoperations, financial condition, and reputation.

•availability, scale and scope of government subsidies, government and tax incentives and financing sources to support the development and commercialization of solar energy solutionssolutions, including the timing, interpretation and implementation of such programs;

•levels of investment by project developers and owners of solar energy products, which tend to decrease when economic growth slows or capital becomes more expensive or less available;

•local, state and federal permitting and other regulatory requirements related to environmental, land use and transmission issues, each of which can significantly impact the feasibility and timelines for solar projects and may result in delays, increased costs or project cancellations;

•the cost and availability of raw materials and components necessary to produce solar energy, such as steel, polysilicon and semiconductor chips; and

•regional, national or global macroeconomic trends, including further increased interest rates, inflation or a reduction in the availability of tax equity or project debt financing, which could make it difficult for project developers and owners to finance the cost of a solar energy system and new projects.projects; and

If demand for solar energy fails to continue to grow, demand for our products will plateau or decrease, which would have an adverse impact on our ability to increase our revenue and grow our business. In addition, demand may be volatile and subject to regional or project-specific fluctuations, which may make it difficult to forecast our operating results. If we are not able to mitigate these risks and overcome these difficulties successfully, our business, financial condition and results of operations could be materially and adversely affected.

We face intense competition from a large number of solar tracker companies in nearly all of the markets in which we compete. The solar tracker industry is currently fragmented.fragmented and competition may increase further as the industry evolves or consolidates. This may result in price competitioncompetition, including downward pressure on pricing, which could adversely affect our revenue and margins. In addition, as we expand our product offerings and offer additional technologies and services, the size and number of competitors will continue to increase.

Some of our competitors are developing or are currently manufacturing products based on different solar power technologies that may ultimately have costs similar to or lower than our projected costs. In addition, some of our competitors have or may in the future have lower costs of goods sold, lower operating costs, greater name and brand recognition in specific markets in which we compete or intend to sell our products, greater market shares, access to larger customer bases, greater resources and significantly greater economies of scale than we do. Additionally, new competitors may enter our market as a result of, among other factors, lower research and development costs.costs, reduced barriers to entry or the availability of government incentives or financing.

We may also face adverse competitive effects from other participants in the solar industry. For example, the price for solar panels has experienced significant declines in several markets globally in recent periods. Substantial pricing declines for panels can make the returns on investment for tracker technology less competitive in comparison to fixed tilt racking systems. In addition, other risks include EPCs subjecting their subcontractors who compete for their business, such as us, to contractual clauses that carry higher contractual risk to us, such as “pay if paid” clauses that requiresrequire an EPC to pay us only when the EPC’s end customer pays the EPC, higher liquidated damages amounts, increased contractual liabilities above 100% of the contract value and more limited force majeure clauses, among others.others, which could increase our risk exposure, reduce our margins or adversely affect our cash flows.

In addition, part of our strategy is to continue to grow our revenues from international markets. Any new geographic market could have different characteristics from the markets in which we currently sell products, and our ability to compete in such markets will depend on our ability to adapt properly to these differences.differences, including local regulatory requirements, customer preferences, competitive dynamics, currency fluctuations and geopolitical considerations. We may also face competition from lower cost providers in any new markets we enter, which could decrease the demand for our products or cause us to reduce the cost of our products in order to remain competitive. Any of these factors could have a material adverse effect on our business, results of operations, financial condition, and prospects.

We face significant competition from providers of conventional and other renewable energy alternatives such as coal, nuclear, natural gas and wind.wind, as well as emerging technologies such as energy storage and hybrid generation solutions. We compete with conventional energy sources primarily based on price, predictability of price and energy availability, environmental considerations and the ease with which customers can use electricity generated by solar energy projects. If solar energy systems cannot offer a compelling value to customers based on these factors, then our business growth may be impaired.

Conventional energy sources generally have substantially greater financial, technical, operational and other resources than solar energy sources, and as a result may be able to devote more resources to research, development, promotion and product sales or respond more quickly to evolving industry standards and changes in market conditions than solar energy systems. Conventional and other renewable energy sources may be better suited than solar for certain locations or customer requirements and may also offer other value-added products or services that could help them compete with solar energy sources. In addition, the source of a majority of conventional energygeneration electricitytechnologies, isparticularly non-renewable,those whichusing fossil fuels, may in certain markets allowbe themable to sellproduce electricity moreat cheaplya lower cost than electricitysolar, generatedparticularly bywhere solarfuel generationcosts facilities.are low or subsidized. Non-renewable generation is typically available for dispatch at any time, as it is not dependent on the availability of intermittent resources such as sunlight.sunlight, Thewhich cost-effectiveness,may performancemake andsuch reliabilitygeneration ofmore solar energy products and services, comparedattractive to conventionalcertain andcustomers otheror renewablegrid energyoperators, sources,particularly couldin materiallymarkets andthat adverselydo affectnot theadequately demandcompensate for ourintermittency productsor andcapacity services, which could have a material adverse effect on our business, financial condition and results of operations.attributes.

Many of our products are used in large-scale projects, which generally require a significant amount of planning and preparation and which have been and can be delayed and rescheduled for a number of reasons, including customer or partner labor availability, difficulties in complying with environmental and other government regulations or obtaining permits, interconnection delays, financing issues, changes in project priorities, additional time required to acquire rights-of-way or property rights, unanticipated soil conditions, or health-related shutdowns or other work stoppages. These delays have in the past resulted in and may in the future result in unplanned downtime, increased costs and inefficiencies in our operations, and increased levels of excess inventory.

Our quarterly results of operations are difficult to predict and may fluctuate significantly in the future. Because we recognize a significant portion of our revenue over time based on projectsthe costs incurred to date on a project as legala titlepercentage of the total costs we expect to incur, and recognize certain other revenue only when control of the equipment is transferred from ustransfers to the customer, any delays in large projects from one quarter to another may cause our results of operations for a particular period to fall below expectations. We have experienced seasonal and quarterly fluctuations in the past as a result of a variety of factors, including fluctuations in our customers’ businesses, changes in local and global market trends, fluctuations in economic, political, financial, industry and market conditions, regulatory or policy changes causing customers to delay, change or abandon their projects, as well as seasonal weather-related disruptions. For example, our customers’ ability to install solar energy systems is affected by weather, such as during the winter months. Inclement weather may also affect our logistics and operations by causing delays in the shipping and delivery of our materials, components and products which may, in turn, cause delays in our customers’ solar projects.

Federal, state, local and foreign government bodies provide incentives to owners, end users, distributors and manufacturers of solar energy systems to promote solar electricity in the form of tax credits, rebates, subsidies and other financial incentives. The range and duration of these incentives varies widely by jurisdiction. Our customers typically use our systems for grid-connected applications wherein solar power is sold under a power purchase agreement or into an organized electric market. This segment of the solar industry has historically depended in large part on the availability and size of government incentives supporting the use of renewable energy. Consequently, the reduction, elimination or expiration of government incentives for grid-connected solar electricity may negatively affect the competitiveness of solar electricity relative to conventional and non-solar renewable sources of electricity, and could harm or halt the growth of the solar electricity industry and our business. These reductions, eliminations or expirations could occur without warning. Any changes to the existing framework of these incentives could cause fluctuations in our results of operations.operations and create uncertainty in customer demand and project timing.

The Inflation Reduction Act of 2022 (the “IRA”) made significant changes to the federal income tax credits available to solar energy projects, including the investment tax credit (“ITC”) under Section 48 of the U.S. Internal Revenue Code (“IRC”) for certain energy property.projects. One such change createdAs a per-unitresult of changes made by the IRA, United States taxpayers may be entitled to a 30% tax credit (under the “ITC (now Section 45X Credit”48E) that is earned over time, for certain cleanqualifying energy components domestically producedprojects and soldincreased byfurther ato manufacturer.40% for projects that satisfy certain "domestic content" requirements. Guidance issued by the U.S. Treasury Department regarding the availability of the ITC (and its successor under Section 48E commonly referred to as a “tech neutral” credit that became effective January 1, 2025) has changed in the past and is subject to change in the future. The IRA also introduced a per-unit tax credit (the “Section 45X Credit” or “45X Credit”) that is earned over time for certain clean energy components domestically produced and sold by a manufacturer. The IRA itself was substantially amended by the OBBBA (described below) on July 4, 2025, including with respect to the Section 48E and the Section 45X Credit, in a manner which materially reduced the future availability of these credits.

On October 28, 2024, the U.S. Treasury Department and the IRS published the 45X Treasury regulations regarding the Section 45X Credit, which became effective on December 27, 2024.The2024. The 45X Treasury regulations confirm that torque tubes and structural fasteners, including several used in our trackers, may qualify as eligible components.

The Section 45X Credit amount will be reduced each year by 25% of these amounts starting in 2030 and end after 2032. In calendar year 2024, ourOur eligible U.S. manufacturing suppliers availedavail themselves of the Section 45X Credits to varying degrees and we accounted for some of these economic benefits in our cost of acquiring torque tubes and structural fasteners. Beginning in calendar year 2025, in certain circumstances, we have directly obtained the benefit of the Section 45X Credit through the use of an election authorized in the Section 4545X Treasury regulations.

On January 7, 2025, the U.S. Treasury Department and the IRS released final Treasury regulations which were published in the Federal Register on January 15, 2025 (the “Clean Electricity Treasury regulations”) regarding the Section 45Y Credit and Section 48E with respect to certain qualified facilities and/or energy storage technology claiming such tax credit and the Section 48E Credit with respect to claiming such a tax credit on certain qualified facilities and energy storage technology.credits.

On July 4, 2025, a U.S. federal budget reconciliation bill known as the One Big Beautiful Bill Act (“OBBBA”) was enacted. The OBBBA, among other things, materially changed most of the federal renewable energy incentives, including those described in Sections 45X, 48E48E, and 45Y. In particular, the OBBBA significantly altered the availability of the Section 48E and 45Y tax credits our customers rely upon for qualified solar and wind facilities. For example, whereas under the IRA, Section 48E and 45Y credits were available through 2032 or such later period until the U.S. power sector emitted 75% less carbon emissions than 2022 levels, the OBBBA substantially reduced this timeframe to require that projects begin construction by July 4, 2026 to utilize a continuity safe harbor that permits solar projects to be placed in service within four calendar years following the calendar year in which the project began construction for tax credit eligibility. Alternatively, solar projects that begin construction after July 4, 2026 must be placed in service by December 31, 2027 to qualify for the Section 48E and 45Y credits. Such acceleration in the expiration of these tax credits will reduce the number of projects in future years that would have otherwise qualified for such credits, likely reducing the overall project volume over time.

Additionally, on July 7, 2025 President Trump issued an Executive Order directing the Secretary of the Treasury to take measures to strictly enforce the termination of the Sections 48E and 45Y credits for wind and solar facilities. The Executive Order specifically directs the Secretary of the Treasury to issue new restrictions concerning “beginning of construction” requirements that appear in many provisions of the OBBBA and which govern eligibility for these tax credits. The Executive Order targets “safe harbor” practices in which our customers’customers seek to establish that their projects have begun construction by the relevant deadline (and therefore qualify for the tax credit) by incurring 5% or more of applicable project costs. Treasury guidance required by this Executive Order was issued on August 22, 2025 in the form of IRS Notice 2025-42. Under this guidance the 5% safe harbor was eliminated effective September 2, 2025 and additional requirements were imposed on solar projects for purposes of demonstrating both the start of physical construction and continuous physical construction thereafter. Such requirements may diminish our customers’ ability to qualify their projects for Section 48E or 45Y tax credits, which in turn could reduce demand for our products and materially harm our business and results of operations.

In addition, the OBBBA introduced certain “foreign entity of concern” (“FEOC”) restrictions relating to prohibited foreign entities on owners of qualified facilities claiming such Section 48E and 45Y tax credits, as well as on manufacturers of components that otherwise qualify for the Section 45X credit. AUnder these rules, a “prohibited foreign entity” of concern (“FEOC”) isincludes a designation“specified referringforeign toentity” or “foreign influenced entity”, and in general means that certain entities (governments or companies) that are under the ownership, control, or influence of deemed foreign adversaries, such as China.China, are ineligible for such tax credits. Under the OBBBA a taxpayer must comply with the FEOC rules applicable to a tax credit in order to qualify for such tax credit. The FEOC restrictions apply to Sections 45X, 48E and 45Y in somewhat different ways. However, these rules generally require that Nextpower evaluate its ownership, the ownership of certain members of its supply chain partners, any rights regarding the ability to appoint board members and executives of Nextpower and its supply chain partners, certain payments made by Nextpower and its supply chain partners, and certain contractual arrangements entered into by Nextpower and its supply chain partners with other parties. On February 12, 2026, the U.S. Treasury Department issued interim guidance under Notice 2026-15 regarding material assistance tests related to prohibited foreign entities, and requested public comment. Additional Treasury guidance and/or regulations implementing the FEOC provisions of the OBBBA are pending and may alter current interpretations of the restrictions.

Moreover, changes in policies of recent U.S. presidential administrations have created regulatory uncertainty in the renewable energy industry, including the solar energy industry, and have adversely affected and may continue to adversely affect our business. For example, in the span of less than six years, the United States joined, withdrew from, and then rejoined the 2015 Paris Agreement on climate change mitigation following changes in administration between U.S. Presidents Obama, Trump and Biden. To start his second term, U.S. President Trump signed numerous executive orders including for the U.S. to again withdraw from the Paris Climate Treaty, to expedite deregulated oil and gas drilling, and revoke executive orders and actions from the previous administration related to, among other things, the implementation of the energy and infrastructure provisions of the IRA. Additionally, the U.S. Department of the Interior and U.S. Department of Energy have recently taken several steps to prohibit, prevent or delay new renewable energy projects. For example, on July 15, 2025 the Department of Interior issued an internal memo entitled “Departmental Review Procedures for Decisions, Actions, Consultations, and Other Undertakings Related to Wind and Solar Energy Facilities.” The memo mandates that 69 categories of previously routine permitting and review activities related to wind and solar projects be elevated to top levels within the Department of Interior, which may substantially slow approval timelines and reduce the number of projects permitted. These or similar actions could materially reduce the number of future solar projects and/or delay the timing of projects or result in cancellations of planned or in-process projects and could have a material adverse impact on our business, financial condition and results of operations.

There is no assurance that theseforeign governments will provide or continue to provide sufficient incentives and support to the solar industry or that the industry in any particular country will not suffer significant downturns in the future as the result of changes in public policies or government interest in renewable energy, any of which would adversely affect demand for our solar products.

Trade tensions, particularly between the United States and China, have led to increased tariffs and trade restrictions, including tariffs applicable to certain materials for and components of our products such as steel and low-power solar modules, electrical equipment, and for products used in solar energy projects more broadly, such as electrical equipment, storage batteries and solar modules.

Prior to February 7, 2026, imports of solar modules from most countries face a 14% tariff pursuant to Section 201 of the Trade Act of 1974. There are also tariffs on various items of solar equipment, including solar cells and modules, inverters and power optimizers, imported from China under Section 301 of the Trade Act of 1974 (“Section 301 Tariffs”). At present, Section 301 tariffsTariffs are 50% on Chinese crystalline solar photovoltaic (“CSPV”) cells and modules, 25% on Chinese steel products, 25% on Chinese parts of lead-acid storage batteries (including separators thereof) and 25% on Chinese lithium-ion non-EV batteries are 25%.batteries. These Section 301 tariffsTariffs are additive to reciprocal tariffs. Nextpower products include proprietary crystalline solar photovoltaic (“CSPV”) modules that provide off-grid power to our controllers located either on each tracker row or on weather stations at the project site. Such CSPV modules are impacted by Section 201122 tariffs on solar modules until February 6, 2026, and, if sourced from China, could be impacted by Section 301 tariffs on solar modules. All tariffs on solar cells and modules also may indirectly affect us by increasing the costs of components of solar energy projects, thereby adversely impacting the financial viability of solar energy projects in which our products are used, which could lead to decreased demand for our products.Tariffs.

Under an August 2023 “circumvention” determination by the U.S. Department of Commerce (“Commerce”), CSPV cells and modules produced in Cambodia, Malaysia, Thailand and Vietnam using waferscertain and other keyChinese components made in China and entered into the United States on or after April 1, 2022 are subject to antidumping duty and countervailing duty (“AD/CVD”) orders on CSPV cells and modules from China that have been in place since 2012 (“Solar Circumvention Determination”). AD/CVD cash deposit rates for imported CSPV modules covered by the China AD/CVD orders vary significantly depending on the producer and exporter of the modules and may amount to over 250% of the entered value of the imported merchandise.modules.

Unless the context requires otherwise, references in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “Nextpower,” the “Company,” “we,” “us” and “our” shall mean, prior to the initial public offering (“IPO”), Nextpower LLC (“Nextpower LLC” or the “LLC”, formerly Nextracker LLC) and its consolidated subsidiaries, and following the IPO and the related transactions completed in connection with the IPO, Nextpower Inc. and its consolidated subsidiaries. References in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “Flex” refer to Flex Ltd., a Singapore incorporated public company limited by shares and having a registration no. 199002645H, and its consolidated subsidiaries, unless the context otherwise indicates.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations is designed to provide a reader of our unaudited condensed consolidated financial statements with a narrative from the perspective of the Company’s management. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q for the three-month period ended DecemberJuly 31,3, 20252026 (this “Quarterly Report”) and our audited consolidated financial statements and the related notes and other information included in our Annual Report on Form 10-K for the year ended March 31, 2025,2026, filed with the SEC on May 22,19, 20252026 (the “Form 10-K”). In addition to historical financial information, the following discussion and analysis contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such statements are based upon current expectations that involve risks, uncertainties and assumptions. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. For example, the words “believes,” “anticipates,” “plans,” “expects,” “intends” and similar expressions are intended to identify forward-looking statements. Our actual results and timing of selected events may differ materially from those results anticipated and discussed in the forward-looking statements as a result of many factors. Factors that might cause such a discrepancy include, but are not limited to, those discussed under the sections below titled “Liquidity and Capital Resources” and “Risk Factors.” All forward-looking statements in this document are based on information available to us as of the date of this Quarterly Report and we assume no obligation to update any such forward-looking statements, except as required by law.

We have shipped more than 150160 GW of solar tracker systems as of JanuaryJuly 30,3, 2026 to projects on six continents for use in utility-scale and distributed generation solar applications. Our customers include engineering, procurement and construction firms (“EPCs”), as well as solar project developers and owners. Developers originate projects, select and acquire sites, obtain permits, select EPC contractors, negotiate power offtake agreements, and oversee the building of projects. EPCs design and optimize the system, procure components, build and commission the plant, and operate the plant for a limited time until transfer to a long-term owner. Owners, which are often developers and/or independent power producers, own and operate the plant, typically as part of a portfolio of similar assets. Owners generate cash flows through the sale of electricity to utilities, wholesale markets, or end users.

For the majority of our projects, our direct customer is the EPC. We also engage with developersproject owners and project ownersdevelopers and enter into master supply agreements that cover multiple projects. We are a qualified, preferred provider to some of the largest solar EPCs, developersproject owners and project ownersdevelopers in the world. We had revenues of $2.7$0.9 billion for the nine-monththree-month period ended DecemberJuly 31,3, 20252026 and $3.0$3.6 billion for fiscal year 2025.2026.

We derive our revenue primarily from the sale of solar trackers and energy yield management systems to our customers. To a lesser extent, we also derived our revenue from foundations, steel frames, eBOS, AI and robotic services, and other. Our revenue growth is dependent on (i) our ability to maintain and expand our market share, (ii) total market growth and (iii) our ability to develop and introduce new products driving performance enhancements and cost efficiencies throughout the solar power plant. We also derived our revenue from TrueCapture, eBOS, foundations business, robotic solutions, and other.

Research and development expenses consist primarily of personnel-related costs associated with our engineering employees, stock-based compensation, third-party consulting and supporting our new business acquisitions. Research and development activities include improvements to our existing products, development of new tracker products such asand energy yield management systems and innovations to expand our technology platform. We expense substantially all research and development expenses as incurred. We expect that the dollar amount of research and development expenses will increase in amount over time.

Our taxable income is primarily from the allocation of taxable income from the LLC. The provision for income taxes primarily represents the LLC’sCompany’s U.S. federal, state, and local income taxes as well as foreign income taxes payable by its subsidiaries. We expect to receive a tax benefit for foreign tax credits in the United States for the foreign tax paid.

We present Adjusted gross profit, Adjusted operating income, Adjusted net income, Adjusted EBITDA, Adjusted gross margin, Adjusted net income margin and Adjusted EBITDA margin as supplemental measures of our performance. We define Adjusted gross profit as gross profit plus stock-based compensation expense and intangible amortization. We define Adjusted operating income as operating income plus stock-based compensation expense, intangible amortization and non-recurring integration activities related to acquisitions. We define Adjusted net income as net income (loss) plus stock-based compensation expense, intangible amortization, various non-recurring tax adjustments, and non-recurring integration activities related to acquisitions.acquisitions and other discrete events as applicable, net of their tax effects. We define Adjusted EBITDA as net income (loss) plus (i) interest, net, (ii) revolverdebt extinguishment costs, (iii) provision for income taxes, (iv) depreciation expense, (v) intangible amortization, (vi) stock-based compensation expense andexpense, (vii) non-recurring integration activities related to acquisitions.acquisitions and (viii) other discrete events as applicable. We define Adjusted gross margin as the percentage derived from Adjusted gross profit divided by revenue. We define Adjusted net income margin as the percentage derived from Adjusted net income divided by revenue. We define Adjusted EBITDA margin as the percentage derived from Adjusted EBITDA divided by revenue.

The following table provides a reconciliation of gross profit to Adjusted gross profit, operating income to Adjusted operating income, net income to Adjusted net income, net income to Adjusted EBITDA, gross margin to Adjusted gross margin, net income margin to Adjusted net income margin, and net income margin to Adjusted EBITDA margin for each period presented. The Adjusted measures presented in the table are inclusive of non-controlling interests.

Comparison of the three-month periods ended DecemberJuly 31,3, 20252026 and DecemberJune 31,27, 20242025

Revenue increased by $230.0$70.9 million, or 34%,8%, for the three-month period ended DecemberJuly 31,3, 20252026 compared to the three-month period ended DecemberJune 31,27, 2024,2025, driven by a 26%higher increaseaverage selling price resulting from increasing costs per watt coupled with increased customer demand in the U.S, offset with lower GW delivered,delivered most notably in the U.S. driven by increased customer demand, including an increaseRest of $129.6the million in point in time revenue due to a year over year increase in components directly shipped to our customers designated locations including software licenses, coupled with additional revenue generated from our recent business acquisitions.World. Revenue increased by approximately $284.6$176.1 million, or 63%,29%, in the U.S. during the three-month period ended DecemberJuly 31,3, 20252026 compared to the three-month period ended DecemberJune 31,27, 20242025 as the number of projects and volume of shipments increased year over year, Rest of the World decreased by $54.6$105.2 million, or 24%,40%, primarily resulting from decreased shipments to Latin America, and the Middle East, partially offset with increased shipments to Europe and Australia.Europe.

Cost of sales increased by $182.8$16.8 million, or 42%,3%, during the three-month period ended DecemberJuly 31,3, 20252026 compared to the three-month period ended DecemberJune 31,27, 2024,2025, primarily driven by the 26%volume of shipment increase in GWthe deliveredU.S., notedand above,to a lesser extent, higher freight and logistics costs as a result of the U.S.-Iran war, along with higher cost associated with the increase in headcount as a result of our recent business acquisitions, coupled with the impact from a $39.2 million increase in tariffs, partially offset by the impact from a $44.6$10.1 million increase in Internal Revenue Code Section 45X tax credit (“45X Credit”) that is earned over time for certain clean energy components domestically produced and sold by a manufacturer.manufacturer, coupled with the impact from a $6.9 million decrease in tariffs, net of refunds. We recognize a reduction in cost of sales for 45X Credits earned on components manufactured in the U.S. During the three-month periods ended DecemberJuly 31,3, 20252026 and DecemberJune 31,27, 2024,2025, we recognized approximately $96.8$103.3 million and $52.2$93.2 million, respectively, of reduction to cost of sales related to the 45X Credit earned on production of eligible components shipped during the period, which offset tariffs of approximately $43.6$3.9 million and $4.5$10.8 million respectively. Freight and logistics costs also increased slightly as a percentage of revenue during the three-month period ended DecemberJuly 31,3, 20252026 compared to the three-month period ended DecemberJune 31,27, 2024.2025.

Gross profit increased by $47.2$54.1 million, or 20%,19%, during the three-month period ended DecemberJuly 31,3, 20252026 compared to the three-month period ended DecemberJune 31,27, 2024,2025, primarily resulting from the volume of shipment increase in the U.S. noted above and the impact from the 45X Credit recognized in the period, which more than offset the higher tariffsfreight and logistics costs noted above.

Selling, general and administrative expenses increased by $12.2$26.5 million, or 17%,36%, to $82.7$100.4 million for the three-month period ended DecemberJuly 31,3, 20252026 from approximately $70.6$73.9 million for the three-month period ended DecemberJune 31,27, 20242025 while decreasingincreasing 129219 basis points from approximately 10%9% to approximately 9%11% as a percentage of revenue during the same period. The increase in selling, general and administrative expenses was primarily the result of an increase in costs of approximately $11.8$20.7 million related to our continued expansion of our sales organization in line with the growth in the global market and the expansion of our supporting functions also required to support our current and planned growth. In addition, acquisition-related costs and stock-based compensation expense increased $3.1 million and $2.7 million, respectively.

Research and development expenses increased by $9.2$22.9 million, or 46%,106%, to $29.3$44.5 million for the three-month period ended DecemberJuly 31,3, 20252026 from approximately $20.1$21.6 million during the three-month period ended DecemberJune 31,27, 2024,2025, primarily driven by our continued investment in innovation, expandingincreasing our engineering team and supporting our newrecent business acquisitions.

Interest expense decreased by $3.5$1.0 million, or 91%,79%, to $0.3 million for the three-month period ended DecemberJuly 31,3, 20252026 from $3.8$1.2 million during the three-month period ended DecemberJune 31,27, 2024,2025, primarily driven by thelower full repaymentamortization of the Termissuance Loancost underand related commitment fee as a result of the 2023new Creditrevolving Agreementcredit (asfacility definedentered inon September 8, 2025, which replaced the sectioncredit entitledfacility “Management'sentered Discussioninto andon AnalysisFebruary of13, Financial Condition and Results of Operations–Liquidity and Capital Resources” in the Form 10-K) in the fourth quarter of fiscal year 2025.2023.

Other income, net was $4.7$8.3 million for the three-month period ended DecemberJuly 31,3, 2025,2026, which primarily included $9.6$9.3 million of interest income, partially offset by $5.3$1.0 million of unfavorable foreign currency exchange losses and other. Other income, net was $13.8$6.0 million income for the three-month period ended DecemberJune 31,27, 2024,2025, which primarily included $5.8$6.3 million of interest income, $4.4partially millionoffset inby tax gains as a result of decrease in our liability under the Tax Receivable Agreement, and $3.6$0.3 million of favorableunfavorable foreign currency exchange gains.losses.

We accrue and pay income taxes according to the laws and regulations of each jurisdiction in which we operate. Most of our revenue and profits are generated in the United States with a statutory income tax rate of 21% for the three-month periods ended DecemberJuly 31,3, 20252026 and DecemberJune 31,27, 2024.2025.

For the three-month periods ended DecemberJuly 31,3, 20252026 and DecemberJune 31,27, 2024,2025, we recorded total income tax expense of $49.3$33.6 million and $42.8$33.8 million, respectively, which reflected consolidated effective income tax rates of 27.3%16.9% and 26.7%,17.7%, respectively. The increasedecrease in tax expense as well as effective tax rate from the three-month period ended DecemberJune 31,27, 20242025 to the three-month period ended DecemberJuly 31,3, 20252026 is driven by anjurisdictional increasemix inof income before income taxes for the corresponding period, a change in domestic and foreign earnings mix and non-deductible stock-based compensation expense.deductions.

From time to time, we are subject to income and non-income based tax audits in the jurisdictions in which we operate. The calculation of tax liabilities involves dealing with uncertainties in the application of complex tax rules and regulations in a number of jurisdictions. Due to such complexity of these uncertainties, the ultimate resolution may result in a payment or refund that is materially different from our estimates.

Our principal uses of cash have been to fund the growth in our operations and invest in research and development and our cash flow generation and credit facilities have continued to provide adequate liquidity for our business. We enhanced our capital structure with a $1.0 billion unsecured revolving credit facility expanding our total liquidity to approximatelyover $1.8$2.0 billion as of DecemberJuly 31,3, 2025. In January 2026, Fitch Ratings (“Fitch”) issued inaugural investment grade credit ratings for the Company and assigned a Long-Term Issuer Default Rating of BBB- to us with a Stable outlook.2026.

As a result of the New Credit Agreement, we capitalized approximately $2.0 million of issuance costs related to the New Revolving Credit Facility, which were included in other assets in the unaudited condensed consolidated balance sheets and will be amortized over the term of the New Credit Agreement. As of DecemberJuly 31,3, 2025,2026, we had approximately $891.4$919.4 million available under the Newrevolving Revolvingcredit Credit Facility,facility, net of $108.6$80.6 million of outstanding letters of credit. We were in compliance with all applicable covenants as of DecemberJuly 31,3, 2025.2026.

In connection with the IPO, on February 13, 2023, Nextpower Inc. also entered into a Tax Receivable Agreement (the “Tax Receivable Agreement” or “TRA”) that provided for the payment by us to Flex, TPG Inc.Rise Flash, L.P (“TPG Rise”), and the following affiliates of TPG: TPG Rise Climate Flash Cl BDH, L.P., TPG Rise Climate BDH, L.P. and The Rise Fund II BDH, L.P. (collectively, the “TPG Affiliates”) (or certain permitted transferees thereof) of 85% of the tax benefits, if any, that we are deemed to realize under certain circumstances, as more fully described in the Form 10-K. There may be a material negative effect on our liquidity if, as a result of timing discrepancies or otherwise, the payments under the Tax Receivable Agreement exceed the actual benefits we realize in respect of the tax attributes subject to the Tax Receivable Agreement or distributions to us by the LLC are not sufficient to permit us to make payments under the Tax Receivable Agreement after we have paid taxes. Prior to the separation from Flex, Yuma, Inc. (“Yuma”) and Yuma Subsidiary, Inc. (“Yuma Sub”) assigned their respective rights under the Tax Receivable Agreement to an entity that remains an affiliate of Flex.