Nextracker Inc. (NASDAQ:NXT) reported second-quarter results that surpassed top- and bottom-line expectations, driven by robust demand across U.S. and international markets and continued momentum from its recently acquired businesses.
Goldman Sachs analysts, led by Brian Lee, reiterated their Buy rating and raised their 12-month price forecast to $125 from $89, implying a 38% upside from the latest close.
The bank cited strong execution, expanding backlog, and momentum from recently acquired businesses as key drivers.
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Quarterly Financial Highlights
The analysts said that the company's fiscal second-quarter 2026 revenue climbed to $905 million, topping Goldman's estimates of $859 million.
Adjusted EBITDA reached $224 million, beating estimates of $207 million, while adjusted EPS of $1.19 exceeded expectations of $1.07.
Non-GAAP gross margin stood at 33.1%, boosted by stable pricing and cost management, and would have reached 36% excluding tariff-related effects. Bookings rose to about $1.2 billion, pushing backlog above $5 billion.
Fiscal 2026 Outlook
The company raised its fiscal 2026 revenue forecast to $3.275-$3.475 billion, up from $3.20-$3.45 billion, implying 14% year-on-year growth at the midpoint. Adjusted EBITDA is now expected between $775 million and $815 million, while EPS guidance increased to $4.04–$4.25.
Management said second-half margins may soften slightly due to international mix and tariffs, but underlying trends remain strong. Domestic capacity is expected to offset part of the tariff impact.
Acquisitions and Business Units Drive Record Bookings
Goldman noted accelerating traction in Nextracker's recently acquired businesses. The company reported record bookings for its eBOS and foundations units, with Bentek achieving its best results in four decades.
The TrueCapture and Origami Solar segments also posted multi-year supply deals worth roughly $75 million in future revenue.
Analysts added that Nextracker formed a 50/50 joint venture with Abunayyan Holding to create Nextracker Arabia, expanding its reach in Saudi Arabia and the MENA region.
The venture, set to launch in the fourth quarter of fiscal 2026, will assume control of Nextracker's local plant and earn revenue from technology licensing.
Strong Balance Sheet and Liquidity Position
Goldman said the company's strong balance sheet is backed by $171 million in quarterly free cash flow and $845 million in cash.
With a renewed $1 billion credit line and expected $400 million more in FCF in the second half, the company has ample liquidity to support growth.
Goldman raised its EPS estimates by 2%, 6%, and 7% for fiscal 2026-2028 to $4.26, $4.80, and $5.30, respectively, citing higher revenue and margins.
Price Action: NXT shares were trading higher by 7.92% to $97.54 at last check Friday.
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