NEXTRACKER INC., 10-Q filed on 3/9/2023
Quarterly Report
v3.22.4
Cover Page - shares
 9 Months Ended
Dec. 31, 2022
Mar. 01, 2023
Document Information [Line Items]    
Document Type 10-Q  
Amendment Flag false  
Document Quarterly Report true  
Document Transition Report false  
Document Period End Date Dec. 31, 2022  
Document Fiscal Year Focus 2022  
Document Fiscal Period Focus Q3  
Current Fiscal Year End Date --03-31  
Entity Registrant Name Nextracker Inc.  
Entity Central Index Key 0001852131  
Entity Incorporation, State or Country Code DE  
Entity Current Reporting Status No  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   45,869,190
Title of 12(b) Security Class A Common Stock, $0.0001 par value  
Trading Symbol NXT  
Security Exchange Name NASDAQ  
Entity File Number 000-00000  
Entity Tax Identification Number 36-5047383  
Entity Address, Address Line One 6200 Paseo Padre Parkway  
Entity Address, City or Town Fremont  
Entity Address, State or Province CA  
Entity Address, Postal Zip Code 94555  
City Area Code 510  
Local Phone Number 270-2500  
v3.22.4
Condensed Combined Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2022
Mar. 31, 2022
Current assets:    
Cash $ 100,081 $ 29,070
Accounts receivable, net of allowance of $1,926 and $3,574, respectively 285,800 168,303
Contract assets 267,665 292,407
Inventories 251,198 172,208
Other current assets 49,593 52,074
Total current assets 954,337 714,062
Property and equipment, net 7,910 7,423
Goodwill 265,153 265,153
Other intangible assets, net 1,383 2,528
Other assets 30,912 28,123
Total assets 1,259,695 1,017,289
Current liabilities:    
Accounts payable 311,354 266,596
Accrued expenses 44,189 26,176
Deferred revenue 173,219 77,866
Due to related parties 41,185 39,314
Other current liabilities 34,665 63,419
Total current liabilities 604,612 473,371
Other liabilities 35,907 42,785
Total liabilities 640,519 516,156
Redeemable preferred units, $0.001 par value, 23,809,524 units and 238,096 units issued and outstanding, respectively 522,918 504,168
Parent company equity (deficit):    
Accumulated net parent investment 96,258 (3,035)
Total parent company equity (deficit) 96,258 (3,035)
Total liabilities, redeemable preferred units and parent company equity (deficit) 1,259,695 $ 1,017,289
Parent Company [Member]    
Current assets:    
Cash  
Total assets  
Current liabilities:    
Total liabilities 0  
Parent company equity (deficit):    
Common stock, $0.01 par value per share, 100 shares authorized, 100 issued and outstanding  
Additional paid-in capital  
Total liabilities, redeemable preferred units and parent company equity (deficit)  
v3.22.4
Condensed Combined Balance Sheets (Parenthetical) - USD ($)
$ in Thousands
Dec. 31, 2022
Mar. 31, 2022
Allowance for credit loss on accounts receivable $ 1,926 $ 3,574
Temporary equity, par value per share $ 0.001 $ 0.001
Temporary equity, shares issued 23,809,524 238,096
Temporary equity, shares outstanding 23,809,524 238,096
Parent Company [Member]    
Common stock, par or stated value per share $ 0.01  
Common stock, shares authorized 100  
Common stock, shares, issued 100  
Common stock, shares, outstanding 100  
v3.22.4
Condensed Combined Statements of Operations and Comprehensive Income - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2022
Dec. 31, 2021
Income Statement [Abstract]        
Revenue $ 513,370 $ 337,607 $ 1,383,742 $ 1,017,779
Cost of sales 431,111 303,843 1,187,081 909,700
Gross profit 82,259 33,764 196,661 108,079
Selling, general and administrative expenses 18,613 13,009 55,475 39,149
Research and development 4,984 3,649 13,283 10,600
Operating income 58,662 17,106 127,903 58,330
Interest and other (income) expense, net (2,366) 91 (1,118) 371
Income before income taxes 61,028 17,015 129,021 57,959
Provision for income taxes 18,442 4,469 35,218 12,840
Net income and comprehensive income $ 42,586 $ 12,546 $ 93,803 $ 45,119
v3.22.4
Condensed Combined Statements of Parent Company Equity (Deficit) and Redeemable Preferred Units - USD ($)
$ in Thousands
Total
Redeemable Preferred Units [Member]
Beginning Balance at Mar. 31, 2021 $ 456,047  
Stock-based compensation expense 2,222  
Net income 45,119  
Net transfers to Parent (14,872)  
Ending Balance at Dec. 31, 2021 488,516  
Beginning Balance at Oct. 01, 2021 463,578  
Stock-based compensation expense 842  
Net income 12,546  
Net transfers to Parent 11,550  
Ending Balance at Dec. 31, 2021 488,516  
Beginning Balance at Mar. 31, 2022 (3,035)  
Beginning Balance, Units at Mar. 31, 2022 504,168 $ 504,168
Stock-based compensation expense 2,790  
Net income 93,803  
Paid-in-Kind dividend for Series A redeemable preferred units (18,750) 18,750
Net transfers from Parent 21,450  
Ending Balance at Dec. 31, 2022 96,258  
Ending Balance, Units at Dec. 31, 2022 522,918 522,918
Beginning Balance at Sep. 30, 2022 86,400  
Beginning Balance, Units at Sep. 30, 2022   516,668
Stock-based compensation expense 940  
Net income 42,586  
Paid-in-Kind dividend for Series A redeemable preferred units (6,250) 6,250
Net transfers from Parent (27,418)  
Ending Balance at Dec. 31, 2022 96,258  
Ending Balance, Units at Dec. 31, 2022 $ 522,918 $ 522,918
v3.22.4
Condensed Combined Statements of Cash Flows - USD ($)
$ in Thousands
 9 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Cash flows from operating activities:    
Net income $ 93,803 $ 45,119
Depreciation and amortization 3,594 9,889
Changes in working capital and other, net (25,015) (160,750)
Net cash provided by (used in) operating activities 72,382 (105,742)
Cash flows from investing activities:    
Purchases of property and equipment (2,653) (5,123)
Proceeds from the disposition of property and equipment 24 167
Net cash used in investing activities (2,629) (4,956)
Cash flows from financing activities:    
Net transfers (to) from Parent 1,258 (14,872)
Net cash provided by (used in) financing activities 1,258 (14,872)
Net increase (decrease) in cash 71,011 (125,570)
Cash beginning of period 29,070 190,589
Cash end of period 100,081 65,019
Non-cash investing activity:    
Unpaid purchases of property and equipment 422 480
Non-cash financing activity:    
Capitalized offering costs 2,534 $ 3,815
Legal settlement paid by Parent, net of insurance recoveries $ 20,428  
v3.22.4
Organization of Nextracker
 9 Months Ended
Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization of Nextracker
 
1.
Organization of Nextracker
The accompanying unaudited condensed combined financial statements reflect the operations that comprise the legacy solar tracker business of Flex Ltd., a Singapore incorporated public company limited by shares and having a registration no. 199002645H, and its consolidated subsidiaries (“Flex” or the “Parent”), including Nextracker LLC (formerly known as NEXTracker Inc.) (the “LLC”) and its subsidiaries, collectively called Nextracker (or the “Company”). On December 19 ,2022, Nextracker Inc. was formed as a Delaware corporation which is a
 
100
%-
owned subsidiary of Yuma, Inc., a Delaware corporation and indirect wholly-owned subsidiary of Flex Ltd. Nextracker Inc. was formed for the purpose of completing a public offering of its Class A common stock (the “IPO”) and other related Transactions (as described in Note 10), in order to carry on the business of Nextracker LLC. As of the date of and for the periods presented in the financial statements, set forth in this quarterly report on Form
10-Q
(the “Quarterly Report”), and prior to the IPO and the completion of the Transactions (see Note 10), Nextracker Inc. had no operations and all of the business operation of Nextracker Inc. were conducted through Nextracker.
The condensed combined financial statements have been derived from the condensed consolidated financial statements and accounting records of Flex. See Note 2 for basis of presentation details.
Nextracker was acquired by Flex in 2015. In 2016, Flex acquired BrightBox Technologies, Inc. (“BrightBox”) on behalf of Nextracker to further its machine learning capabilities. Nextracker operates as a separate operating and reportable segment of Flex and its results of operations have been reported in Flex’s consolidated financial statements.
Nextracker is the leading provider of intelligent, integrated solar tracker and software solutions used in utility-scale and distributed generation solar projects around the world. Nextracker’s products enable solar panels in utility-scale power plants to follow the sun’s movement across the sky and optimize plant performance. Nextracker has operations in the United States, Mexico, Chile, Spain and other countries in Europe, India, Australia, the Middle East, Africa and
Brazil.
The Initial Public Offering
On February 8, 2023, Nextracker Inc.’s registration statement on Form S-1 relating to its IPO was declared effective by the Securities and Exchange Commission (“SEC”) and the shares of its Class A common stock began trading on the Nasdaq Global Select Market on February 9, 2023. The IPO closed on February 13, 2023, pursuant to which Nextracker Inc. issued and sold 30,590,000 shares of its Class A common stock at a public offering price of $24.00 per share, giving effect to the exercise in full of the underwriters’ option to purchase additional shares. Nextracker Inc. received net proceeds of $693.8 million, after deducting $40.4 million in underwriting discount. Upon closing of the IPO, approximately $8.3 million of offering costs were paid by Flex, and the Company netted the previously capitalized offering costs ($7.9 million as of December 31, 2022) against the net parent investment. See further discussion of the Transactions related to the IPO in Note 10.
v3.22.4
Description of the Business and Summary of Significant Accounting Policies
 9 Months Ended
Dec. 31, 2022
Description of the Business and Summary of Significant Accounting Policies
 
2.
Summary of accounting policies
Basis of presentation
Throughout the period covered by the condensed combined financial statements, Nextracker did not operate as a separate entity and stand-alone separate historical financial statements for Nextracker have not been prepared. The financial statements in this Quarterly Report have been derived from Flex’s historical accounting records and are presented on a
carve-out
basis.
Nextracker is primarily comprised of certain stand-alone legal entities for which discrete financial information is available. The accompanying condensed combined financial statements have been prepared on a stand-alone basis and are derived from Flex’s consolidated financial statements and accounting records, using Flex’s historical basis in Nextracker’s assets and liabilities. The accompanying condensed combined financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the requirements of the SEC for interim reporting. As permitted under these rules, certain information and disclosures normally included in combined financial statements prepared in accordance with GAAP have been condensed or omitted. The interim condensed combined financial statements are unaudited. The unaudited interim condensed combined financial statements have been prepared on the same basis as the annual combined financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position as of December 31, 2022 and its results of operations for the three- and nine-month periods ended December 31, 2022 and 2021 and its cash flows for the nine-month periods ended December 31, 2022 and 2021.
 
Nextracker’s results of operations for the nine-month period ended December 31, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2023 or for any other future annual or interim period.
Further, the results stated herein may not be indicative of what Nextracker’s financial position, results of operations and cash flows might be now that Nextracker operates as a separate, stand-alone company since the IPO. The condensed combined financial statements included herein do not reflect any changes that have occurred or may occur in Nextracker’s financing and operations as a result of the IPO.
The condensed combined balance sheet as of March 31, 2022 was derived from the Company’s audited combined financial statements. These condensed combined financial statements should be read in conjunction with the Company’s audited combined financial statements included in the prospectus dated February 8, 2023 that forms a part of Nextracker Inc.’s Registration Statement on Form S-1 (File No. 333-269238), as filed with the SEC pursuant to Rule 424(b)(4) promulgated under the Securities Act of 1933, as amended.
The first quarters for fiscal years 2023 and 2022 ended on July 1, 2022 (92 days), and July 2, 2021 (93 days), respectively. The second quarters for fiscal years 2023 and 2022 ended on September 30, 2022 and October 1, 2021 (91 days in each period), respectively. The third quarters for fiscal years 2023 and 2022 ended on December 31, 2022 and 2021, which are comprised of 93 days and 92 days, respectively.
The condensed combined financial statements include all revenues, expenses, assets and liabilities directly attributable to Nextracker. Where it is possible to specifically attribute such expenses to activities of Nextracker, these amounts have been charged or credited directly to Nextracker without allocation or apportionment. The condensed combined statements of operations and comprehensive income also include allocations of certain costs from Flex incurred on Nextracker’s behalf. Such corporate-level costs are allocated to Nextracker using methods based on proportionate formulas such as revenue and headcount, among others. Such corporate-level costs include costs pertaining to accounting and finance, legal, human resources, information technology, insurance, tax services, and other costs. Such costs may not represent the amounts that would have been incurred had Nextracker operated autonomously or independently from Flex as of the relevant time period. Management considers the expense allocation methodology and results to be reasonable for all periods presented. However, these costs may not be indicative of what Nextracker may incur in the future. During the fourth quarter of fiscal year 2022, Nextracker entered into a Transition Service Agreement (“TSA”) with Flex, whereby Flex agreed to provide or cause to be provided certain services to Nextracker which were previously included as part of the allocations from Flex. As consideration, Nextracker agreed to pay Flex the amount specified for each service as described in the TSA.
All intracompany transactions and accounts within Nextracker have been eliminated. All significant transactions between Nextracker and Flex that have not been historically cash settled have been included in the condensed combined balance sheets within accumulated net parent investment and reflected in the condensed combined statements of cash flows as a financing activity as these are deemed to be internal financing transactions.
In connection with the Parent’s acquisition of Nextracker and BrightBox in 2015 and 2016, respectively, Flex applied pushdown accounting to separate financial statements of acquired entities in accordance with ASC 805. The application of pushdown accounting impacted goodwill and intangible assets (see Note 4).
Cash included in the condensed combined balance sheets reflects cash that is controlled by Nextracker. Flex’s debt has not been allocated to Nextracker for any of the periods presented because the debt is not specifically identifiable to Nextracker.
Redeemable preferred units that are redeemable upon the occurrence of conditions outside of the control of Nextracker are reported as temporary equity in the condensed combined balance sheets.
Flex historically maintains stock-based compensation plans at a corporate level. Starting in fiscal year 2023, Nextracker is granting equity compensation awards to its employees under the First Amended and Restated 2022 Nextracker LLC Equity Incentive Plan (the “2022 Nextracker Plan”). Nextracker employees participate in those plans and a portion of the cost of those plans is included in Nextracker’s condensed combined financial statements. See Note 5 for a further description of the accounting for stock-based compensation.
 
Use of estimates
The preparation of financial statements in conformity with GAAP requires management 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 doubtful accounts, reserve for excess or obsolete inventories, valuation of deferred tax assets, warranty reserves, contingencies, operation accruals, and fair values of stock options and restricted share unit awards granted under stock-based compensation plans. Due to the
COVID-19
pandemic and geopolitical conflicts (including the Russian invasion of Ukraine), there has been and will continue to be uncertainty and disruption in the global economy and financial markets. The Company has made estimates and assumptions taking into consideration certain possible impacts due to the
COVID-19
pandemic and the Russian invasion of Ukraine. These estimates may change, as new events occur, and additional information is obtained. Actual results may differ from previously estimated amounts, and such differences maybe material to the condensed combined financial statements. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period they occur. Management believes that these estimates and assumptions provide a reasonable basis for the fair presentation of the condensed combined financial statements.
Product warranty
Nextracker offers an assurance type warranty for its products against defects in design, materials and workmanship for a period ranging from five to ten years, depending on the component. For these assurance type warranties, a provision for estimated future costs related to warranty expense is recorded when they are probable and reasonably estimable, which is typically when products are delivered. The estimated warranty liability is based on our warranty model which relies on historical warranty claim information and assumptions based on the nature, frequency and average cost of claims for each product line by project. When little or no experience exists, the estimate is based on comparable product lines and/or estimated potential failure rates. These estimates are based on data from Nextracker specific projects and overall industry statistics. Estimates related to the outstanding warranty liability are
re-evaluated
on an ongoing basis using best-available information and revisions are made as necessary.
The following table summarizes the activity related to the estimated accrued warranty reserve for the three- and nine-month periods ended December 31, 2022 and 2021:
 
    
Three-month periods ended
     
Nine-month periods ended
  
(In thousands)
   
December 31,
2022
     
December 31,
2021
     
December 31,
2022
     
December 31,
2021
  
Beginning balance
    $ 11,431      $ 16,213      $ 10,485      $ 17,085  
Provision (release) for warranties issued (1)
      8,582        (2,373 )       9,974        (2,608 ) 
Payments
      (117 )       (404 )       (563 )       (1,041 ) 
    
 
 
     
 
 
     
 
 
     
 
 
  
Ending balance
    $ 19,896      $ 13,436      $ 19,896      $ 13,436  
    
 
 
     
 
 
     
 
 
     
 
 
  
 
(1)
During the three- and nine-month periods ended December 31, 2022, the Company identified a specific design issue with a
non-core
product, and recorded an additional $8.7 million charge to cost of sales on its condensed combined statement of operations and comprehensive income, related to future remediation costs, which may include replacement parts and services.
 
Inventories
Inventories are stated at the lower of cost (on a
first-in,
first-out
basis) or net realizable value. Nextracker’s inventory primarily consists of finished goods to be used and to be sold to customers, including components procured to complete the tracker system projects.
Other current assets
Other current assets include short-term deposits and advances of $22.6 million and $9.3 million as of December 31, 2022 and March 31, 2022, respectively, primarily related to advance payments to certain vendors for procurement of inventory. Additionally, other current assets include $22.3 
million as of March 31, 2022, for an estimated insurance recovery related to a certain litigation settlement as further described in Note 7. The insurance recovery amount, which w
ill be
 received by Flex, has been netted with net parent investment on the condensed combined balance sheet as of December 31, 2022.
Capitalized offering costs
Capitalized offering costs consist primarily of legal and accounting fees, which are direct and incremental fees related to the offering. These associated costs will be paid by Flex and offset against the net parent investment upon the IPO (see Note 1). The Company had $
7.9
 million and $
5.3
 million in capitalized offering costs as of December 31, 2022 and March 31, 2022, respectively, which are included in other current assets on the condensed combined balance sheets.
Accrued expenses
Accrued expenses include accruals primarily for freight and tariffs of $31.5 million and $20.7 million as of December 31, 2022 and March 31, 2022, respectively. In addition, it includes $12.7 million and $5.5 million accrued payroll as of December 31, 2022 and March 31, 2022, respectively.
Other liabilities
Other liabilities primarily include the long-term portion of standard product warranty liabilities of $
9.3
 million and $
8.8
 million, respectively, and the long-term portion of deferred revenue of $
22.6
 million and $
29.6
 million as of December 31, 2022 and March 31, 2022, respectively.
Redeemable preferred units
On February 1, 2022, the LLC issued redeemable preferred units designated as “Series A Preferred Units,” representing a 16.67% interest in the LLC, to Flex in exchange for the cancellation of a portion of the LLC’s previously issued and outstanding common units. Flex sold all of the LLC’s Series A Preferred Units to TPG Rise Flash, L.P. (“TPG Rise”), an affiliate of the private equity firm TPG (“TPG”), on the same day. The holder of the Series A Preferred Units
is
entitled to cumulative
paid-in-kind
or cash dividends and ha
s
 the option to redeem the Series A Preferred Units or convert the Series A Preferred Units upon certain conditions. Because the redemption or conversion conditions are outside of the control of the Company, the Company had classified the Series A Preferred Units as temporary equity on the combined balance sheets.
 
For the nine-month period ended December 31, 2022, Nextracker recorded $18.8 million dividend to be paid in kind to TPG Rise based on a rate of 5% per annum.
At TPG Rise’s election, Flex is required to repurchase all of the outstanding Series A Preferred Units at their liquidation preference, which shall include all contributed but unreturned capital plus accrued but unpaid dividends, at the earlier of certain change in control events and February 1, 2028. Additionally, if Nextracker has not completed a Qualified Public Offering prior to February 1, 2027, then TPG Rise may cause Flex to repurchase all of the outstanding Series A Preferred Units at their fair market value. Nextracker has determined that a Qualified Public Offering is likely and that the change in control is not probable as of December 31, 2022, and as such, it is not probable that the Series A Preferred Units will become redeemable as of December 31, 2022 and the Series A Preferred Units are not accreted to current redemption value.
In April 2022, the Board approved the amendment and restatement of the Amended and Restated Limited Liability Company Agreement (“A&R LLC Agreement”) dated as of February 1, 2022. Such amendment provided for, among other things, an increase in the total number of Series A Preferred Units issued with a proportionate reduction in the Series A issue price, such that the ownership percentage of TPG Rise remained unchanged at 16.67%. As a result of the amendment, the number of Series A Preferred Units issued and outstanding was increased to 23,809,524.
Recently issued accounting pronouncement
In December 2022, the FASB issued ASU
2022-06
“Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848”, which defers the sunset date of ASC 848 from December 31, 2022 to December 31, 2024. ASC 848 provides relief for companies preparing for the discontinuation of interest rates, such as LIBOR. Entities that apply ASC 848 can continue to do so until December 31, 2024. The Company adopted the guidance during the third quarter of fiscal year 2023 with an immaterial impact on its condensed combined financial statements.
Parent Company [Member]  
Description of the Business and Summary of Significant Accounting Policies
1. Description of the Business and Summary of Significant Accounting Policies
Background and Nature of Operations
Nextracker Inc. (the “Company”) was formed as a Delaware corporation on December 19, 2022 (“date of incorporation”) as a 
100
%-owned subsidiary of Yuma, Inc. (“Yuma”), a Delaware corporation and indirect wholly-owned subsidiary of Flex Ltd., a Singapore incorporated public company limited by shares and having a registration no. 199002645H, and its consolidated subsidiaries (“Flex”). The Company was formed for the purpose of completing an initial public offering (the “IPO”) and related transactions (the “Transactions”) in order to carry on the business of Nextracker LLC (formerly known as NEXTracker Inc.) (the “LLC”) and its subsidiaries, which is an entity comprised of the legacy solar tracker business of Flex that is a leading provider of intelligent, integrated solar tracker and software solutions used in utility-scale and ground-mounted distributed generation solar projects around the world. 
The Initial Public Offering
On February 8, 2023, the Company’s registration statement on Form S-1 relating to its IPO was declared effective by the Securities and Exchange Commission (“SEC”) and the shares of its Class A common stock began trading on the Nasdaq Global Select Market on February 9, 2023. The IPO closed on February 13, 2023, pursuant to which the Company issued and sold 30,590,000 shares of its Class A common stock at a public offering price of $24.00 per share, giving effect to the exercise in full of the underwriters’ option to purchase additional shares. The Company received net proceeds of $693.8 million, after deducting $40.4 million in underwriting discount. See further discussion of the Transactions related to the IPO in Note 4.
Basis of Presentation
The accompanying condensed financial statement is presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and the requirements of the SEC for interim reporting. As permitted under these rules, certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. The interim condensed financial statement is unaudited. The unaudited interim condensed financial statement has been prepared on the same basis as the December 19, 2022 audited financial statement and, in the opinion of management, reflects all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position as of December 31, 2022. Separate statements of income and comprehensive income, changes in stockholder’s equity, and cash flows have not been presented because there have been no activities in this entity from the date of incorporation to December 31, 2022.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in our financial statement and the accompanying notes. Actual results may differ materially from our estimates.
v3.22.4
Stockholder's Equity
 9 Months Ended
Dec. 31, 2022
Parent Company [Member]  
Stockholder's Equity
2. Stockholder’s Equity
At the date of incorporation, the Company was authorized to issue 100 shares of common stock, par value $0.001 per share, and issued 100
 shares of common stock to Yuma
.
 
v3.22.4
Revenue
 9 Months Ended
Dec. 31, 2022
Revenue from Contract with Customer [Abstract]  
Revenue
3.
Revenue
Based on Topic 606 provisions, the Company disaggregates its revenue from contracts with customers by those sales recorded over time and sales recorded at a point in time. The following table presents Nextracker’s revenue disaggregated based on timing of transfer—point in time and over time for the three- and nine-month periods ended December 31, 2022 and 2021:
 
    
Three-month periods ended
     
Nine-month periods ended
  
(In thousands)
   
December 31, 2022
     
December 31, 2021
     
December 31, 2022
     
December 31, 2021
  
Timing of Transfer
                                    
Point in time
    $ 7,618      $ 41,220      $ 40,771      $ 63,024  
Over time
      505,752        296,387        1,342,971        954,755  
    
 
 
     
 
 
     
 
 
     
 
 
  
Total revenue
    $ 513,370      $ 337,607      $ 1,383,742      $ 1,017,779  
    
 
 
     
 
 
     
 
 
     
 
 
  
Contract balances
The timing of revenue recognition, billings and cash collections results in contract assets and contract liabilities (deferred revenue) on the condensed combined balance sheets. Nextracker’s contract amounts are billed as work progresses in accordance with agreed-upon contractual terms, which generally coincide with the shipment of one or more phases of the project. When billing occurs subsequent to revenue recognition, a contract asset results. Contract assets of $267.7 million and $292.4 million as of December 31, 2022 and March 31, 2022, respectively, are presented in the condensed combined balance sheets, of which $120.9 million and $86.5 million, respectively, will be invoiced at the end of the projects as they represent funds withheld until the products are installed by a third party, arranged by the customer, and the project is declared operational. The remaining unbilled receivables will be invoiced throughout the project based on a set billing schedule such as milestones reached or completed rows delivered. Contract assets decreased $24.7 million from March 31, 2022 to December 31, 2022 due to fluctuations in the timing and volume of billings for the Company’s revenue recognized over-time.
 
During the nine-month periods ended December 31, 2022 and 2021, Nextracker converted $73.1 million and $71.3 million deferred revenue to revenue, respectively, which represented 68% and 77%, respectively, of the beginning period balance of deferred revenue.
Remaining performance obligations
As of December 31, 2022, Nextracker had $195.8 million of the transaction price allocated to the remaining performance obligations. The Company expects to recognize revenue on approximately 88% of these performance obligations in the next 12 months. The remaining long-term unperformed obligation primarily relates to extended warranty and deposits collected in advance on certain tracker projects.
v3.22.4
Goodwill and intangible assets
 9 Months Ended
Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and intangible assets
4.
Goodwill and intangible assets
Goodwill
Goodwill relates to the 2015 acquisition of Nextracker and the 2016 acquisition of BrightBox by Flex on behalf of Nextracker. As of December 31, 2022 and March 31, 2022, goodwill totaled $265.2 million, respectively and is not deductible for tax purposes.
Other intangible assets
Nextracker amortizes identifiable intangible assets consisting of developed technology, customer relationships, and trade names because these assets have finite lives. Nextracker’s intangible assets are amortized on a straight-line basis over the estimated useful lives. The basis of amortization approximates the pattern in which the assets are utilized over their estimated useful lives. No residual value is estimated for any intangible assets. The fair value of Nextracker’s intangible assets is determined based on management’s estimates of cash flows and recoverability.
Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an intangible asset may not be recoverable. An impairment loss is recognized when the carrying amount of an intangible asset exceeds its fair value. Nextracker reviewed the carrying value of its intangible assets as of December 31, 2022 and March 31, 2022 and concluded that such amounts continued to be recoverable.
 
The components of identifiable intangible assets are as follows:
 
    
As of December 31, 2022
     
As of March 31, 2022
  
(In thousands)
   
Gross

carrying

amount
     
Accumulated

amortization
    
Net

carrying

amount
     
Gross

carrying

amount
     
Accumulated

amortization
    
Net

carrying

amount
  
Intangible assets:
                                                    
Trade name and other intangibles
    $ 15,900      $ (14,517 )    $ 1,383      $ 15,900      $ (13,372 )    $ 2,528  
    
 
 
     
 
 
    
 
 
     
 
 
     
 
 
    
 
 
  
Total
    $ 15,900      $ (14,517 )    $ 1,383      $ 15,900      $ (13,372 )    $ 2,528  
    
 
 
     
 
 
    
 
 
     
 
 
     
 
 
    
 
 
  
Total intangible asset amortization expense recognized in operations during the three- and nine-month periods ended December 31, 2022 and 2021 are as follows:
 
    
Three-month periods ended
     
Nine-month periods ended
  
(In thousands)
   
December 31,
2022
     
December 31,
2021
     
December 31,
2022
     
December 31,
2021
  
Cost of sales
    $ 63      $ 63      $ 188      $ 3,980  
Selling general and administrative expense
      —          478        957        3,944  
    
 
 
     
 
 
     
 
 
     
 
 
  
Total amortization expense
    $ 63      $ 541      $ 1,145      $ 7,924  
    
 
 
     
 
 
     
 
 
     
 
 
  
Estimated future annual amortization expense for the above amortizable intangible assets are as follows:
 
(In thousands)
   
Amount
  
Fiscal year ending March 31,
         
2023 (1)
    $ 62  
2024
      250  
2025
      250  
2026
      250  
2027
      250  
Thereafter
      321  
    
 
 
  
Total amortization expense
    $ 1,383  
    
 
 
  
 
(1)
Represents estimated amortization for the remaining fiscal three-month period ending March 31, 2023.
v3.22.4
Stock-based compensation
 9 Months Ended
Dec. 31, 2022
Share-Based Payment Arrangement, Additional Disclosure [Abstract]  
Stock-based compensation
5.
Stock-based compensation
Flex maintains several stock-based incentive plans (collectively, the “Plans”) for the benefit of certain of its officers, directors and employees, including the employees of Nextracker. The following disclosures represent Nextracker’s portion of the Plans maintained by Flex in which Nextracker’s employees participated. All awards granted under the Plans consist of Flex common shares. Accordingly, the amounts presented are not necessarily indicative of future performance and do not necessarily reflect the results that Nextracker would have experienced as a stand-alone company for the period presented.
 
The following table summarizes Nextracker’s stock-based compensation expense related to Flex equity incentive plans:
 
    
Three-month periods ended
     
Nine-month periods ended
  
(In thousands)
   
December 31,
2022
     
December 31,
2021
     
December 31,
2022
     
December 31,
2021
  
Cost of sales
    $ 350      $ 426      $ 1,105      $ 1,105  
Selling, general and administrative expenses
      590        416        1,685        1,117  
    
 
 
     
 
 
     
 
 
     
 
 
  
Total stock-based compensation expense
    $ 940      $ 842      $ 2,790      $ 2,222  
    
 
 
     
 
 
     
 
 
     
 
 
  
Stock-based compensation expense includes an allocation of Parent’s corporate and shared functional employee expense of immaterial amounts for the three- and nine-month periods ended December 31, 2022 and 2021. These charges were recorded within selling, general and administrative expenses.
The Flex 2017 equity incentive plan (the “2017 Plan”)
All options have been fully expensed and none were outstanding and exercisable as of December 31, 2022.
The executives, officers and employees of Flex, including Nextracker, were granted restricted share unit (“RSU”) awards under the 2017 Plan. RSU awards are rights to acquire a specified number of ordinary Flex shares for no cash consideration in exchange for continued service with Flex. RSU awards generally vest in installments over a
two
to four-year period and unvested RSU awards are forfeited upon termination of employment. Vesting for certain RSU awards is contingent upon service and market conditions, or service and performance conditions.
As of December 31, 2022, the total unrecognized compensation cost related to unvested RSU awards held by Nextracker employees was approximately $2.7 million under the 2017 Plan. These costs will be amortized generally on a straight-line basis over a weighted-average period of approximately one year.
There were no options and no RSU awards granted under the 2017 Plan during the nine-month period ended December 31, 2022.
Of the 338,000 unvested RSU awards outstanding under the 2017 Plan as of December 31, 2022, an immaterial amount of these unvested RSU awards represent the target amount of grants made to certain key employees whereby vesting is contingent on meeting certain market conditions.
The 2022 Nextracker equity incentive plan
During the nine-month period ended December 31, 2022, Nextracker awarded 5.3 million equity-based compensation awards to its employees under the First Amended and Restated 2022 Nextracker LLC Equity Incentive Plan (the “2022 Nextracker Plan”). Of the 5.3 million unvested awards under that plan, the Company granted approximately 2.7 million unit options with an exercise price of $21.00 per unit and 1.9 million RSU awards whereby vesting is contingent upon continued service over a four-year and three-year period, respectively, and the occurrence of an initial public offering event or a sale of the Company. Vesting of the unit options is also contingent upon the growth of the equity valuation of the Company in the four years following the grant date, which could result in a range of
0-100%
of such unit options ultimately vesting. Finally, approximately 0.7 million unvested awards are performance-based restricted share unit awards (“PSU”) contingent upon the achievement of certain metrics specific to Nextracker measured over a three-year period and the occurrence of an IPO or a sale of the Company, which could result in a range of
0-200%
of such PSUs ultimately vesting. The performance-based metrics for the second and third years of vesting for the PSUs are not yet determined, and therefore only 0.2 million PSUs have met the criteria for a grant date under ASC 718 as of December 31, 2022.
Additionally, during the nine-month period ended December 31, 2022, approximately
 
0.3
 
million awards were forfeited due to employee terminations.
 
The valuation of our common units and RSUs was determined in accordance with the guidance provided by the American Institute of Certified Public Accountants Practice Aid, “Valuation of Privately-Held-Company Equity Securities Issued as Compensation”. Application of these approaches involves the use of estimates, judgment and assumptions that are highly complex and subjective, such as those regarding our expected future revenue and EBITDA, discount rates, market multiples, the selection of comparable companies and the probability of possible future events. Changes in any or all of these estimates and assumptions or the relationships between those assumptions impact our valuations as of each valuation date and may have a material impact on the valuation of our common stock. The fair values of our option units and PSUs were estimated using Monte-Carlo simulation models which is a probabilistic approach for calculating the fair value of the awards. Key assumptions for the Monte-Carlo simulation model are the risk-free interest rate, expected volatility, expected dividends and correlation coefficient.
The weighted average grant date fair values were
$5.17 per award for the unit options, $16.72 per award for the RSU, and $18.86 per award for the PSUs. The grant date fair values for the unit options and PSUs were determined using a Monte Carlo simulation. The Company will record cumulative stock-based compensation expense related to these awards in the period when its liquidity event is completed for the portion of the awards for which the relevant service condition has been satisfied with the remaining expense recognized over the remaining
service period.
The total unrecognized compensation expense related to unvested awards under the 2022 Nextracker Plan as of December 31, 2022 was approximately $47.5 million, which is expected to be recognized over a weighted-average period of approximately three years.
v3.22.4
Relationship With Parent And Related Parties
 9 Months Ended
Dec. 31, 2022
Related Party Transactions [Abstract]  
Relationship With Parent And Related Parties
6.
Relationship with parent and related parties
The condensed combined financial statements have been prepared on a stand-alone basis and are derived from the consolidated financial statements and accounting records of Flex. Prior to the IPO, Nextracker was historically managed and operated in the normal course of business by Flex. Accordingly, certain shared costs have been allocated to Nextracker and reflected as expenses in these condensed combined financial statements. Nextracker’s management and the management of Flex consider the expenses included and the allocation methodologies used to be reasonable and appropriate reflections of the historical Flex expenses attributable to Nextracker for purposes of the stand-alone financial statements; however, the expenses reflected in these condensed combined financial statements may not be indicative of the actual expenses that would have been incurred during the periods presented if Nextracker historically operated as a separate, stand-alone entity and would depend on a number of factors, including the chosen organizational structure, what functions were outsourced or performed by employees and strategic decisions made in areas such as information technology and infrastructure. In addition, the expenses reflected in the condensed combined financial statements may not be indicative of expenses that Nextracker will incur in the future.
Allocation of corporate expenses
The condensed combined financial statements include expense allocations for certain functions provided by Flex, including, but not limited to, general corporate expenses related to finance, legal, information technology, human resources, and stock-based compensation. These expenses have been allocated to Nextracker on the basis of direct usage when identifiable, with the remainder allocated on the basis of revenue, headcount or other measure.
During the three-month periods ended December 31, 2022 and 2021, Nextracker was allocated $1.0 million and $3.4 million, respectively, of general corporate expenses incurred by Flex. Of these expenses $0.7 million and $2.6 million, respectively, are included within selling, general and administrative expenses and $0.3 million and $0.8 million, respectively, are included in cost of sales in the condensed combined statements of operations and comprehensive income.
 
During the nine-month periods ended December 31, 2022 and 2021, Nextracker was allocated $4.2 million and $10.1 million, respectively, of general corporate expenses incurred by Flex. Of these expenses $2.8 million and $7.8 million, respectively, are included within selling, general and administrative expenses and $1.4 million and $2.3 million, respectively, are included in cost of sales in the condensed combined statements of operations and comprehensive income.
Risk management
Flex carries insurance for property, casualty, product liability matters, auto liability, and workers’ compensation and maintain excess policies to provide additional limits. Nextracker pays a premium to Flex in exchange for the coverage provided. In fiscal years 2023 and 2022, the policies with significant premiums included the Marine Cargo/Goods in Transit and the multiple Errors and Omissions policies all through various insurance providers. Expenses related to coverage provided by Flex are reflected in the condensed combined statements of operations and comprehensive income and were immaterial for the three- and nine-month periods ended December 31, 2022 and 2021, respectively.
Cash management and financing
Nextracker participates in Flex’ centralized cash management programs. Disbursements are independently managed by Nextracker.
All significant transactions between Nextracker and Flex that have not been historically cash settled have been included in the condensed combined balance sheets within accumulated net parent investment and reflected in the condensed combined statement of cash flows as net transfers to parent as these are deemed to be internal financing transactions. All intra-company accounts, profits and transactions among the combined entities have been eliminated. The following is a summary of material transactions reflected in the accumulated net parent investment during the three- and nine-month periods ended December 31, 2022 and 2021:
 
    
Three-month periods ended
     
Nine-month periods ended
  
(In thousands)
   
December 31,
2022
     
December 31,
2021
     
December 31,
2022
     
December 31,
2021
  
Corporate allocations (excluding stock-based compensation expense)
    $ 65      $ 2,604      $ 1,463      $ 7,849  
Transfer of operations to Nextracker (1)
      (51,527 )       4,558        (8,440 )       401  
Net cash pooling activities (2)
      10,154        (655 )       (1,195 )      (37,843 ) 
Income taxes
      13,890        5,043        29,622        14,721  
    
 
 
     
 
 
     
 
 
     
 
 
  
Net transfers (to) from Parent
    $ (27,418 )     $ 11,550      $ 21,450      $ (14,872 ) 
    
 
 
     
 
 
     
 
 
     
 
 
  
 
(1)
Primarily represents certain international operations where related income and/or losses are included in Nextracker’s condensed combined statements of operations. Cash was also collected by the international operations on behalf of Nextracker, for which Nextracker and Flex do not intend to settle in the future. For the nine-month period ended December 31, 2022, the balance includes the legal settlement paid by Flex as further disclosed in Note 7.
(2)
Primarily represents financing activities for cash pooling and capital transfers.
The cash balance reflected in the condensed combined balance sheets consist of the cash managed and controlled by Nextracker. For as long as Nextracker is a controlled entity of Flex, Nextracker’s U.S. operations may continue to participate in the Flex cash pooling management programs intra-quarter; all outstanding positions are settled or scheduled for settlement as of each quarter end. Cash pooling activities are reflected under net transfers from Parent in the condensed combined statements of parent company equity (deficit) and redeemable preferred units and condensed combined statements of cash flows.
 
Due to related parties relates to balances resulting from transactions between Nextracker and Flex subsidiaries that have historically been cash settled. Nextracker purchased certain components and services from other Flex affiliates of $14.1 million and $43.0 million for the three- and nine-month periods ended December 31, 2022, respectively, compared to $10.4 million and $37.1 million for the three- and nine-month periods ended December 31, 2021, respectively.
Flex also administers on behalf of Nextracker payments to certain freight providers as well as payrolls to certain employees based in the U.S. Nextracker’s average due to related parties balance was $43.0 million and $33.3 million for the nine-month periods ended December 31, 2022 and 2021, respectively. All related cash flow activities are under net cash used in operating activities in the condensed combined statement of cash flows.
Net parent investments
The net parent investment in the condensed combined balance sheets represents Flex’s net investment in Nextracker and is presented in lieu of stockholders’ equity.
v3.22.4
Commitments And Contingencies
 9 Months Ended
Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]  
Commitments And Contingencies
7.
Commitments and contingencies
Litigation and other legal matters
In connection with the matters described below, Nextracker has accrued for loss contingencies where it believes that losses are probable and estimable. The amounts accrued are not material. Although it is reasonably possible that actual losses could be in excess of Nextracker’s accrual, Nextracker is unable to estimate a reasonably possible loss or range of loss in excess of its accrual, except as discussed below, due to various reasons, including, among others, that: (i) the proceedings are in early stages or no claims have been asserted, (ii) specific damages have not been sought in all of these matters, (iii) damages, if asserted, are considered unsupported and/or exaggerated, (iv) there is uncertainty as to the outcome of pending appeals, motions, or settlements, (v) there are significant factual issues to be resolved, and/or (vi) there are novel legal issues or unsettled legal theories presented. Any such excess loss could have a material adverse effect on Nextracker’s results of operations or cash flows for a particular period or on Nextracker’s financial condition.
On July 15, 2022, the Company settled a case that was brought in January 2017 by Array Technologies, Inc. (“ATI”), in which ATI had alleged that Nextracker and Flex caused a former ATI employee to breach his
non-compete
agreement with ATI by joining Nextracker and made claims of, among other things, fraud, constructive fraud, trade secret misappropriation, breach of contract and related claims. All claims are fully released as part of a $42.8 million settlement reached in July 2022. The full settlement amount was paid by Flex on August 4, 2022, and is subject to partial coverage under the Flex insurance policy. The estimated insurance recovery of $22.3 
million, which was included in other current assets in the condensed combined balance sheets as of March 31, 2022, has been netted with net parent investment on the condensed combined balance sheet as of December 31, 2022.
v3.22.4
Income Taxes
 9 Months Ended
Dec. 31, 2022
Income Taxes
8.
Income taxes
The Company follows the guidance under ASC
740-270,
“Interim Reporting”, which requires that an estimated tax rate is applied to
year-to-date
ordinary income. At the end of each interim period, the Company estimates the effective tax rate expected to be applicable for the full fiscal year. The tax effect of discrete items is recorded in the quarter in which the discrete events occur.
 
The following table presents income tax expense recorded by the Company along with the respective combined effective tax rates for each period presented
:
 
    
Three-month periods ended
    
Nine-month periods ended
  
(In thousands)
   
December 31, 2022
    
December 31, 2021
    
December 31, 2022
    
December 31, 2021
  
Income tax
      18,442       4,469       35,218       12,840  
Effective tax rates
      30.2 %      26.3 %      27.3 %      22.2  %
The effective tax rates differ from the U.S. domestic statutory income tax rate of 21% primarily due to the U.S state and local income taxes coupled with the jurisdictional mix of income between the U.S. and other operating jurisdictions.
Parent Company [Member]  
Income Taxes
3. Income Taxes
As of the date of incorporation and through December 31, 2022, we did not have any taxable income. The Company is subject to statutory tax requirements of the locations in which it conducts its business. State and local income taxes will be accrued as deemed required in the best judgment of management based on analysis and interpretation of respective tax laws.
v3.22.4
Segment Reporting
 9 Months Ended
Dec. 31, 2022
Segment Reporting [Abstract]  
Segment Reporting
9.
Segment reporting
Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the Chief Operating Decision Maker (“CODM”), or a decision-making group, in deciding how to allocate resources and in assessing performance. Resource allocation decisions and Nextracker’s performance are assessed by its Chief Executive Officer, identified as the CODM.
For all periods presented, Nextracker has
one
operating and reportable segment. The following table sets forth geographic information of revenue based on the locations to which the products are shipped:
 
    
Three-month periods ended
     
Nine-month periods ended
  
(In thousands)
   
December 31, 2022
     
December 31, 2021
     
December 31, 2022
     
December 31, 2021
  
Revenue:
                                    
U.S.
    $ 327,548      $ 161,703      $ 908,361      $ 605,743  
Rest of the World
      185,822        175,904        475,381        412,036  
    
 
 
     
 
 
     
 
 
     
 
 
  
Total
    $ 513,370      $ 337,607      $ 1,383,742      $ 1,017,779  
    
 
 
     
 
 
     
 
 
     
 
 
  
The United States is the principal country of domicile.
v3.22.4
Subsequent Events
 9 Months Ended
Dec. 31, 2022
Subsequent Events
10.
Subsequent events
The Company evaluated subsequent events through March 8, 2023, the date the condensed combined financial statements were available to be issued.
Reverse unit split
In January 2023 the Board of Managers and the members of the Company approved a 1-for-2.1 reverse unit split of the units authorized and outstanding, which was effected on January 30, 2023. All unit and per unit data shown in the accompanying condensed combined financial statements and related notes has been retroactively revised to give effect to this reverse unit split for all periods presented. Units underlying authorized and outstanding equity-based awards were proportionately decreased and the respective per unit value and exercise prices, if applicable, were proportionately increased in accordance with the terms of the agreements governing such securities. There was no change in the par value of the Company’s Series A Preferred Units as a result of the reverse stock split.
The Transactions
Nextracker Inc. and the Company completed the following organizational and other transactions in connection with the IPO (see Note 1) (collectively, referred to as the “Transactions”):
 
•  
Immediately prior to the
closing
of the IPO, Nextracker Inc. issued 128,794,522 shares of its Class B common stock to Yuma, Yuma Subsidiary, Inc., a Delaware corporation and wholly-owned subsidiary of Yuma (“Yuma Sub”), and TPG Rise in exchange for cash consideration, which number of shares was equal to the number of common units of the LLC held directly or indirectly by Yuma, Yuma Sub and TPG Rise immediately following the Transactions and before giving effect to the IPO.
 
•  
Immediately prior to the closing of the IPO, the LLC made a distribution in an aggregate amount of $175.0 million (the “Distribution”). With respect to such Distribution, $21.7 million was distributed to TPG Rise and $153.3 million to Yuma and Yuma Sub in accordance with their pro rata LLC units. The Distribution was financed, in part, with net proceeds from the $150.0 million term loan under the 2023 Credit Agreement, as further discussed below.
 
•  
Nextracker Inc. used all of the net proceeds from the IPO ($693.8
 million
) as consideration for Yuma’s transfer to Nextracker Inc. of 30,590,000
LLC common units (the “LLC Common Units”) at a price per unit equal to $
22.68.
 
•
 
In connection with Yuma’s transfer to Nextracker Inc. of 30,590,000 LLC Common Units, a corresponding number of shares of Nextracker Inc.’s Class B common stock held by Yuma was canceled.
 
•  
In connection with the IPO, the Series A Preferred Units held by TPG Rise were automatically converted into 25,026,093 LLC Common Units which are exchangeable, together with a corresponding number of shares of Nextracker Inc.’s Class B common stock, for shares of Nextracker Inc.’s Class A common stock (or cash). Notwithstanding the foregoing, as permitted under and in accordance with the limited liability company agreement of the LLC in effect prior to the IPO (the “Prior LLC Agreement”), on February 8, 2023, TPG Rise exercised its right to have certain blocker corporations affiliated with TPG Rise each merge with a separate direct, wholly-owned subsidiary of Nextracker Inc., with the blocker corporations surviving each such merger, in a transaction intended to qualify as a tax-free transaction. In connection with such blocker corporations’ mergers, the investors in each such blocker corporation received a number of shares of Nextracker Inc.’s Class A common stock with a value based on the Series A Preferred Units held by such blocker corporation for a total of
15,279,190
shares of Nextracker Inc.’s Class A common stock. 
 
•
 
In connection with the IPO, Nextracker Inc.’s repurchased all 100 shares of common stock previously issued to Yuma for an immaterial amount.
On February 13, 2023, the members of the LLC entered into the Third Amended and Restated Limited Liability Company Agreement of the LLC to, among other things, effect the Transactions described above and to appoint Nextracker Inc. as the managing member of the LLC. Nextracker Inc. beneficially owns 
45,869,190
 LLC Common Units after the completion of the IPO and the Transactions. 
2023 Credit Agreement
On February 13, 2023, Nextracker Inc. and the LLC, as the borrower, entered into a senior credit facility with a syndicate of banks (the “2023 Credit Agreement”) comprised of (i) a term loan in the aggregate principal amount of $
150.0
 million (the “Term Loan”), and (ii) a revolving credit facility in an aggregate principal amount of $
500.0
 million (the “RCF”). The LLC borrowed the Term Loan, and used the proceeds to finance, in part, the Distribution. 
The RCF is available in U.S. dollars, euros and such currencies as mutually agreed on a revolving basis during the five-year period through February 11, 2028 and is available to fund working capital and other general corporate purposes. A portion of the RCF not to exceed $
300.0
 million is available for the issuance of letters of credit. A portion of the RCF not to exceed $
50.0
 million is available for swing line loans. Subject to the satisfaction of certain conditions, the LLC will be permitted to incur incremental term loan facilities or increase the RCF commitment in an aggregate principal amount equal to $
100.0
 million plus an additional amount such that the secured net leverage ratio or total net leverage ratio, as applicable, is equal to or less than a specified threshold after giving pro forma effect to such incurrence. 
NEXTRACKER
Notes to unaudited condensed combined financial statements
 
The obligations of the LLC under the 2023 Credit Agreement and related loan documents are jointly and severally guaranteed by Nextracker Inc., certain other holding companies (collectively, the “Guarantors”) and, subject to certain exc
lusio
ns, certain of the LLC’s existing and future direct and indirect wholly-owned domestic subsidiaries.
As of the closing of the 2023 Credit Agreement, all obligations of the LLC and the guarantors are secured by certain equity pledges by the LLC and the Guarantors. However, if the LLC’s total net leverage ratio exceeds a specified threshold, the collateral will include substantially all of the assets of the LLC and the Guarantors and, if the LLC meets certain investment grade conditions, such lien will be released.
The Term Loan requires quarterly principal payments beginning on June 30, 2024 in an amount equal to
0.625
% of the original aggregate principal amount of the Term Loan. From June 30, 2025, the quarterly principal payment will increase to
1.25
% of the original aggregate principal amount of the Term Loan. The remaining balance of the Term Loan and the outstanding balance of any RCF loans will be repayable on February 11, 2028. Borrowings under the 2023 Credit Agreement are prepayable and commitments subject to being reduced in each case at the LLC’s option without premium or penalty. The 2023 Credit Agreement contains certain mandatory prepayment provisions in the event that the LLC or its restricted subsidiaries incur certain types of indebtedness or, subject to certain reinvestment rights, receive net cash proceeds from certain asset sales or other dispositions of property.
Borrowings in U.S. dollars under the 2023 Credit Agreement bear interest at a rate based on either (a) a term secured overnight financing rate
(“SOFR”)-based
formula (including a credit spread adjustment of 10 basis points) plus a margin of
162.5
 
basis points to
 
200
 basis points, depending on the LLC’s total net leverage ratio, or (b) a base rate formula plus a margin of 
62.5
 basis point to 
100
 basis points, depending on the LLC’s total net leverage ratio. Borrowings under the RCF in euros will bear interest based on the adjusted EURIBOR rate plus a margin of 
162.5
 basis points to
200
 basis points, depending on the LLC’s total net leverage ratio. The LLC will also be required to pay a quarterly commitment fee on the undrawn portion of the RCF commitments of 
20
 basis points to 
35
 basis points, depending on the LLC’s total net leverage ratio. The interest rate for the Term Loan is 
5.12
% (
SOFR rate of 3.49
% plus a margin of
1.63
%).
The 2023 Credit Agreement contains certain affirmative and negative covenants that, among other things and subject to certain exceptions, limit the ability of the LLC and its restricted subsidiaries to incur additional indebtedness or liens, to dispose of assets, change their fiscal year or lines of business, pay dividends and other restricted payments, make investments and other acquisitions, make optional payments of subordinated and junior lien debt, enter into transactions with affiliates and enter into restrictive agreements. In addition, the 2023 Credit Agreement requires the LLC to maintain a maximum consolidated total net leverage ratio.
Exchange Agreement
On February 13, 2023, Nextracker Inc., the LLC, Yuma, Yuma Sub and TPG entered into an exchange agreement (the “Exchange Agreement”) under which Yuma, Yuma Sub and TPG (or certain permitted transferees thereof) have the right, subject to the terms of the Exchange Agreement, to require the LLC to exchange LLC Common Units (together with a corresponding number of shares of Nextracker Inc.’s Class B common stock) for newly-issued shares of Nextracker Inc.’s Class A common stock on a one-for-one basis, or, in the alternative, Nextracker Inc. may elect to exchange such LLC Common Units (together with a corresponding number of shares of its Class B common stock) for cash equal to the product of (i) the number of LLC Common Units (together with a corresponding number of shares of Nextracker Inc.’s Class B common stock) being exchanged, (ii) the then-applicable exchange rate under the Exchange Agreement (which will initially be one and is subject to adjustment) and (iii) the Nextracker Inc. Class A common stock value (based on the market price of Nextracker Inc.’s Class A common stock), subject to customary conversion rate adjustments for stock splits, stock dividends, reclassifications and other similar transactions; provided further, that in the event of an exchange request by an exchanging holder, Nextracker Inc. may at its option effect a direct exchange of shares of its Class A common stock for LLC Common Units and shares of its Class B common stock in lieu of such exchange or make a cash payment to such exchanging holder, in each case pursuant to the same economic terms applicable to an exchange between the exchanging holder and the LLC. 
 
Tax Receivable Agreement
On February 13, 2023, Nextracker Inc. entered into a tax receivable agreement (the “Tax Receivable Agreement”) with the LLC, Yuma, Yuma Sub,
TPG Rise and the following affiliates of TPG Rise: 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”). The Tax Receivable Agreement provides for the payment by Nextracker Inc. to Yuma, Yuma Sub, TPG and
the TPG Affiliates (or certain permitted transferees thereof) of
85
% of the tax benefits, if any, that Nextracker Inc. is deemed to realize under certain circumstances as a result of (i) its allocable share of existing tax basis in tangible and intangible assets resulting from exchanges or acquisitions of outstanding Series A Preferred Units or LLC Common Units (Series A Preferred Units and the LLC Common Units, collectively, the “LLC Units”), including as part of the Transactions or under the Exchange Agreement, (ii) increases in tax basis resulting from exchanges or acquisitions of LLC Units and shares of Nextracker Inc.’s Class B common stock (including as part of the Transactions or under the Exchange Agreement), (iii) certain
pre-existing
tax attributes of certain blocker corporations affiliated with TPG Rise that each merged with a separate direct, wholly-owned subsidiary of Nextracker Inc., as part of the Transactions, and (iv) certain other tax benefits related to Nextracker Inc. entering into the Tax Receivable Agreement, including tax benefits attributable to payments under the Tax Receivable Agreement.
Brazil Umbrella Agreement
In February 2023, Nextracker Brasil Ltda., an indirect, wholly-owned subsidiary of Nextracker Inc., and Flextronics International Technologia Ltda., an affiliate of Flex, entered into an umbrella agreement (the “Umbrella Agreement”) that governs the terms, conditions and obligations of a strategic commercial relationship between Nextracker Inc. and Flex for the sale of the Company’s solar trackers in Brazil. The Umbrella Agreement is renewable automatically for successive
one-year
periods, unless a party provides written notice to the other parties that such party does not intend to renew within at least ninety days prior to the end of any term.

Parent Company [Member]  
Subsequent Events
4. Subsequent events
The Company evaluated subsequent events through March 8, 2023, the date the condensed financial statement was available to be issued.
Reverse Unit Split of the LLC
In January 2023, the Board of Managers and the members of the LLC approved a 
1-for-2.1
 reverse unit split of the units of the LLC authorized and outstanding, which was effected on January 30, 2023. All unit and per unit data shown in the accompanying condensed financial statement and related notes has been retroactively revised to give effect to this reverse unit split for all periods presented. 
 
The Transactions
The Company and the LLC completed the following organizational and other transactions in connection with the IPO (see Note 1):
 
•  
Immediately prior to the
closing
of the IPO, the Company issued 
128,794,522
 shares of its Class B common stock to Yuma, Yuma Subsidiary, Inc., a Delaware corporation and wholly-owned subsidiary of Yuma (“Yuma Sub”), and TPG Rise Flash, L.P. (“TPG Rise”), an affiliate of the private equity firm TPG (“TPG”), in exchange for cash consideration, which number of shares was equal to the number of common units of the LLC (the “LLC Common Units”) held directly or indirectly by Yuma, Yuma Sub and TPG Rise immediately following the Transactions and before giving effect to the IPO. 
 
•  
Immediately prior to the closing of the IPO, the LLC made a
cash
distribution in an aggregate amount of $
175.0
 million (the “Distribution”). With respect to such Distribution, $
21.7
 million was distributed to TPG Rise and $
153.3
 million to Yuma and Yuma Sub in accordance with their pro rata LLC units. The Distribution was financed, in part, with net proceeds from the $
150.0
 million term loan under the 2023 Credit Agreement, as further discussed below, together with cash on hand. 
 
•  
The Company used all of the net proceeds from the IPO ($
693.8
 million) as consideration for Yuma’s transfer to the Company of 30,590,000 LLC
Common Units 
at a price per unit equal to $
22.68
, and, as a result, did not retain any of the net proceeds from the IPO. 
 
•  
In connection with Yuma’s transfer to the Company of 
30,590,000
 LLC
Common Units
, a corresponding number of shares of the Company’s
Class B common stock held by Yuma was canceled. 
 
•  
In connection with the IPO, the LLC’s redeemable preferred units designated as “Series A Preferred Units” held by TPG Rise were automatically converted into
 
25,026,093
 LLC Common Units which are exchangeable, together with a corresponding number of shares of the Company’s Class B common stock, for shares of the Company’s Class A common stock (or cash). Notwithstanding the foregoing, as permitted under and in accordance with the limited liability company agreement of the LLC in effect prior to the IPO (the “Prior LLC Agreement”), on February 8, 2023, TPG Rise exercised its right to have certain blocker corporations affiliated with TPG Rise each merge with a separate direct, wholly-owned subsidiary of the Company, with the blocker corporations surviving each such merger, in a transaction intended to qualify as a tax-free
transaction. In connection with such blocker corporations’ mergers, the investors in each such blocker corporation received a number of shares of the Company’s Class A common stock with a value based on the Series A Preferred Units held by such blocker corporation for a total of 

15,279,190 shares of the Company’s Class A common stock.
 
•
 
In connection with the IPO, the Company repurchased all 100 shares of common stock previously issued to Yuma for an immaterial amount.
On February 8, 2023, the Company amended and restated its certificate of incorporation to, among other things, authorize 900,000,000 shares of $0.0001 par value Class A common stock, 500,000,000 shares of $0.0001 par value Class B common stock, and 50,000,000 shares of par value $0.0001 preferred stock.
On February 13, 2023, the members of the LLC entered into the Third Amended and Restated Limited Liability Company Agreement of the LLC to, among other things, effect the Transactions described above and to appoint the Company as the managing member of the LLC. The Company beneficially owns
 
45,869,190
 
LLC Common Units after the closing of the IPO and the Transactions. 
 

2023 Credit Agreement
On February 13, 2023, the Company and the LLC, as the borrower, entered into a senior credit facility with a syndicate of banks (the “2023 Credit Agreement”) comprised of (i) a term loan in the aggregate principal amoun
t of $
150.0
 million (the “Term Loan”), and (ii) a revolving credit facility in an aggregate principal amount of $
500.0
 million (the “RCF”). The LLC borrowed the Term Loan, and used the proceeds to finance, in part, the Distribution. 
The RCF is available in U.S. dollars, euros and such currencies as mutually agreed on a revolving basis during the five-year period through February 11, 2028 and is available to fund working capital and other general corporate purposes. A portion of the RCF not to exce
ed $
300.0 
million is available for the issuance of letters of credit. A portion of the RCF not to exceed
$50.0 
million is available for swing line loans. Subject to the satisfaction of certain conditions, the LLC will be permitted to incur incremental term loan facilities or increase the RCF commitment in an aggregate principal amount
 equal to $100.0 
million plus an additional amount such that the secured net leverage ratio or total net leverage ratio, as applicable, is equal to or less than a specified threshold after giving pro forma effect to such incurrence.
The obligations of the LLC under the 2023 Credit Agreement and related loan documents are jointly and severally guaranteed by the Company, certain other holding companies (collectively, the “Guarantors”) and, subject to certain exclusions, certain of the LLC’s existing and future direct and indirect wholly-owned domestic subsidiaries. 
As of the closing of the 2023 Credit Agreement, all obligations of the LLC and the guarantors are secured by certain equity pledges by the LLC and the Guarantors. However, if the LLC’s total net leverage ratio exceeds a specified threshold, the collateral will include substantially all of the assets of the LLC and the Guarantors and, if the LLC meets certain investment grade conditions, such lien will be released. 
The Term Loan requires quarterly principal payments beginning on June 30, 2024 in an amount equal to 0.625% of the original aggregate principal amount of the Term Loan. From June 30, 2025, the quarterly principal payment will increase to 1.25% of the original aggregate principal amount of the Term Loan. The remaining balance of the Term Loan and the outstanding balance of any RCF loans will be repayable on February 11, 2028.

Borrowings under the 2023 Credit Agreement are prepayable and commitments subject to being reduced in each case at the LLC’s option without premium or penalty. The 2023 Credit Agreement contains certain mandatory prepayment provisions in the event that the LLC or its restricted subsidiaries incur certain types of indebtedness or, subject to certain reinvestment rights, receive net cash proceeds from certain asset sales or other dispositions of property.
Borrowings in U.S. dollars under the 2023 Credit Agreement bear interest at a rate based on either (a) a term secured overnight financing rate (“SOFR”)-based formula (including a credit spread adjustment of 10 basis points) plus a margin
 
of
162.5
basis points to
200
basis points, depending on the LLC’s total net leverage ratio, or (b) a base rate formula plus a margin
of
62.5
basis point to
100
basis points, depending on the LLC’s total net leverage ratio. Borrowings under the RCF in euros will bear interest based on the adjusted EURIBOR rate plus a margin
of
162.5
basis points to
200
basis points, depending on the LLC’s total net leverage ratio. The LLC will also be required to pay a quarterly commitment fee on the undrawn portion of the RCF commitments
of 
20
basis points to
35
basis points, depending on the LLC’s total net leverage ratio. The interest rate for the Term Loan
is 5.12% (SOFR rate of 3.49% plus a margin of 1.63
%). 
The 2023 Credit Agreement contains certain affirmative and negative covenants that, among other things and subject to certain exceptions, limit the ability of the LLC and its restricted subsidiaries to incur additional indebtedness or liens, to dispose of assets, change their fiscal year or lines of business, pay dividends and other restricted payments, make investments and other acquisitions, make optional payments of subordinated and junior lien debt, enter into transactions with affiliates and enter into restrictive agreements. In addition, the 2023 Credit Agreement requires the LLC to maintain a maximum consolidated total net leverage ratio.
Exchange Agreement
On February 13, 2023, the Company, the LLC, Yuma, Yuma Sub and TPG entered into an exchange agreement (the “Exchange Agreement”) under which Yuma, Yuma Sub and TPG (or certain permitted transferees thereof) have the right, subject to the terms of the Exchange Agreement, to require the LLC to exchange LLC Common Units (together with a corresponding number of shares of Class B common stock) for newly-issued shares of Class A common stock on a one-for-one basis, or, in the alternative, the Company may elect to exchange such LLC Common Units (together with a corresponding number of shares of Class B common stock) for cash equal to the product of (i) the number of LLC Common Units (together with a corresponding number of shares of Class B common stock) being exchanged, (ii) the then-applicable exchange rate under the Exchange Agreement (which will initially be one and is subject to adjustment) and (iii) the Class A common stock value (based on the market price of our Class A common stock), subject to customary conversion rate adjustments for stock splits, stock dividends, reclassifications and other similar transactions; provided further, that in the event of an exchange request by an exchanging holder, the Company may at its option effect a direct exchange of shares of Class A common stock for LLC Common Units and shares of Class B common stock in lieu of such exchange or make a cash payment to such exchanging holder, in each case pursuant to the same economic terms applicable to an exchange between the exchanging holder and the LLC.
 
Tax Receivable Agreement
On February 13, 2023, the Company entered into a tax receivable agreement (the “Tax Receivable Agreement”) with the LLC, Yuma, Yuma Sub, TPG Rise and the following affiliates of TPG Rise: 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”). The Tax Receivable Agreement provides for the payment by the Company to Yuma, Yuma Sub, TPG and the TPG Affiliates (or certain permitted transferees thereof) of
 
85
% of the tax benefits, if any, that the Company is deemed to realize under certain circumstances as a result of (i) its allocable share of existing tax basis in tangible and intangible assets resulting from exchanges or acquisitions of outstanding Series A Preferred Units or LLC Common Units (the Series A Preferred Units and the LLC Common Units, collectively, the “LLC Units”), including as part of the Transactions or under the Exchange Agreement, (ii) increases in tax basis resulting from exchanges or acquisitions of LLC Units and shares of the Company’s Class B common stock (including as part of the Transactions or under the Exchange Agreement), (iii) certain pre-existing tax attributes of certain blocker corporations affiliated with TPG Rise that each merged with a separate direct, wholly-owned subsidiary of the Company, as part of the Transactions, and (iv) certain other tax benefits related to the Company entering into the Tax Receivable Agreement, including tax benefits attributable to payments under the Tax Receivable Agreement. 
Brazil Umbrella Agreement
In February 2023, Nextracker Brasil Ltda., an indirect, wholly-owned subsidiary of the Company, and Flextronics International Technologia Ltda., an affiliate of Flex, entered into an umbrella agreement (the “Umbrella Agreement”) that governs the terms, conditions and obligations of a strategic commercial relationship between the Company, and Flex for the sale of the LLC’s solar trackers in Brazil. The Umbrella Agreement is renewable automatically for successive one-year periods, unless a party provides written notice to the other parties that such party does not intend to renew within at least ninety days prior to the end of any term. 
v3.22.4
Description of the Business and Summary of Significant Accounting Policies (Policies)
 9 Months Ended
Dec. 31, 2022
Significant Accounting Policies [Line Items]  
Basis of presentation
Basis of presentation
Throughout the period covered by the condensed combined financial statements, Nextracker did not operate as a separate entity and stand-alone separate historical financial statements for Nextracker have not been prepared. The financial statements in this Quarterly Report have been derived from Flex’s historical accounting records and are presented on a
carve-out
basis.
Nextracker is primarily comprised of certain stand-alone legal entities for which discrete financial information is available. The accompanying condensed combined financial statements have been prepared on a stand-alone basis and are derived from Flex’s consolidated financial statements and accounting records, using Flex’s historical basis in Nextracker’s assets and liabilities. The accompanying condensed combined financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the requirements of the SEC for interim reporting. As permitted under these rules, certain information and disclosures normally included in combined financial statements prepared in accordance with GAAP have been condensed or omitted. The interim condensed combined financial statements are unaudited. The unaudited interim condensed combined financial statements have been prepared on the same basis as the annual combined financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position as of December 31, 2022 and its results of operations for the three- and nine-month periods ended December 31, 2022 and 2021 and its cash flows for the nine-month periods ended December 31, 2022 and 2021.
 
Nextracker’s results of operations for the nine-month period ended December 31, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2023 or for any other future annual or interim period.
Further, the results stated herein may not be indicative of what Nextracker’s financial position, results of operations and cash flows might be now that Nextracker operates as a separate, stand-alone company since the IPO. The condensed combined financial statements included herein do not reflect any changes that have occurred or may occur in Nextracker’s financing and operations as a result of the IPO.
The condensed combined balance sheet as of March 31, 2022 was derived from the Company’s audited combined financial statements. These condensed combined financial statements should be read in conjunction with the Company’s audited combined financial statements included in the prospectus dated February 8, 2023 that forms a part of Nextracker Inc.’s Registration Statement on Form S-1 (File No. 333-269238), as filed with the SEC pursuant to Rule 424(b)(4) promulgated under the Securities Act of 1933, as amended.
The first quarters for fiscal years 2023 and 2022 ended on July 1, 2022 (92 days), and July 2, 2021 (93 days), respectively. The second quarters for fiscal years 2023 and 2022 ended on September 30, 2022 and October 1, 2021 (91 days in each period), respectively. The third quarters for fiscal years 2023 and 2022 ended on December 31, 2022 and 2021, which are comprised of 93 days and 92 days, respectively.
The condensed combined financial statements include all revenues, expenses, assets and liabilities directly attributable to Nextracker. Where it is possible to specifically attribute such expenses to activities of Nextracker, these amounts have been charged or credited directly to Nextracker without allocation or apportionment. The condensed combined statements of operations and comprehensive income also include allocations of certain costs from Flex incurred on Nextracker’s behalf. Such corporate-level costs are allocated to Nextracker using methods based on proportionate formulas such as revenue and headcount, among others. Such corporate-level costs include costs pertaining to accounting and finance, legal, human resources, information technology, insurance, tax services, and other costs. Such costs may not represent the amounts that would have been incurred had Nextracker operated autonomously or independently from Flex as of the relevant time period. Management considers the expense allocation methodology and results to be reasonable for all periods presented. However, these costs may not be indicative of what Nextracker may incur in the future. During the fourth quarter of fiscal year 2022, Nextracker entered into a Transition Service Agreement (“TSA”) with Flex, whereby Flex agreed to provide or cause to be provided certain services to Nextracker which were previously included as part of the allocations from Flex. As consideration, Nextracker agreed to pay Flex the amount specified for each service as described in the TSA.
All intracompany transactions and accounts within Nextracker have been eliminated. All significant transactions between Nextracker and Flex that have not been historically cash settled have been included in the condensed combined balance sheets within accumulated net parent investment and reflected in the condensed combined statements of cash flows as a financing activity as these are deemed to be internal financing transactions.
In connection with the Parent’s acquisition of Nextracker and BrightBox in 2015 and 2016, respectively, Flex applied pushdown accounting to separate financial statements of acquired entities in accordance with ASC 805. The application of pushdown accounting impacted goodwill and intangible assets (see Note 4).
Cash included in the condensed combined balance sheets reflects cash that is controlled by Nextracker. Flex’s debt has not been allocated to Nextracker for any of the periods presented because the debt is not specifically identifiable to Nextracker.
Redeemable preferred units that are redeemable upon the occurrence of conditions outside of the control of Nextracker are reported as temporary equity in the condensed combined balance sheets.
Flex historically maintains stock-based compensation plans at a corporate level. Starting in fiscal year 2023, Nextracker is granting equity compensation awards to its employees under the First Amended and Restated 2022 Nextracker LLC Equity Incentive Plan (the “2022 Nextracker Plan”). Nextracker employees participate in those plans and a portion of the cost of those plans is included in Nextracker’s condensed combined financial statements. See Note 5 for a further description of the accounting for stock-based compensation.
Use of estimates
 
Use of estimates
The preparation of financial statements in conformity with GAAP requires management 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 doubtful accounts, reserve for excess or obsolete inventories, valuation of deferred tax assets, warranty reserves, contingencies, operation accruals, and fair values of stock options and restricted share unit awards granted under stock-based compensation plans. Due to the
COVID-19
pandemic and geopolitical conflicts (including the Russian invasion of Ukraine), there has been and will continue to be uncertainty and disruption in the global economy and financial markets. The Company has made estimates and assumptions taking into consideration certain possible impacts due to the
COVID-19
pandemic and the Russian invasion of Ukraine. These estimates may change, as new events occur, and additional information is obtained. Actual results may differ from previously estimated amounts, and such differences maybe material to the condensed combined financial statements. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period they occur. Management believes that these estimates and assumptions provide a reasonable basis for the fair presentation of the condensed combined financial statements.
Product warranty
Product warranty
Nextracker offers an assurance type warranty for its products against defects in design, materials and workmanship for a period ranging from five to ten years, depending on the component. For these assurance type warranties, a provision for estimated future costs related to warranty expense is recorded when they are probable and reasonably estimable, which is typically when products are delivered. The estimated warranty liability is based on our warranty model which relies on historical warranty claim information and assumptions based on the nature, frequency and average cost of claims for each product line by project. When little or no experience exists, the estimate is based on comparable product lines and/or estimated potential failure rates. These estimates are based on data from Nextracker specific projects and overall industry statistics. Estimates related to the outstanding warranty liability are
re-evaluated
on an ongoing basis using best-available information and revisions are made as necessary.
The following table summarizes the activity related to the estimated accrued warranty reserve for the three- and nine-month periods ended December 31, 2022 and 2021:
 
    
Three-month periods ended
     
Nine-month periods ended
  
(In thousands)
   
December 31,
2022
     
December 31,
2021
     
December 31,
2022
     
December 31,
2021
  
Beginning balance
    $ 11,431      $ 16,213      $ 10,485      $ 17,085  
Provision (release) for warranties issued (1)
      8,582        (2,373 )       9,974        (2,608 ) 
Payments
      (117 )       (404 )       (563 )       (1,041 ) 
    
 
 
     
 
 
     
 
 
     
 
 
  
Ending balance
    $ 19,896      $ 13,436      $ 19,896      $ 13,436  
    
 
 
     
 
 
     
 
 
     
 
 
  
 
(1)
During the three- and nine-month periods ended December 31, 2022, the Company identified a specific design issue with a
non-core
product, and recorded an additional $8.7 million charge to cost of sales on its condensed combined statement of operations and comprehensive income, related to future remediation costs, which may include replacement parts and services.
Inventories
 
Inventories
Inventories are stated at the lower of cost (on a
first-in,
first-out
basis) or net realizable value. Nextracker’s inventory primarily consists of finished goods to be used and to be sold to customers, including components procured to complete the tracker system projects.
Other current assets
Other current assets
Other current assets include short-term deposits and advances of $22.6 million and $9.3 million as of December 31, 2022 and March 31, 2022, respectively, primarily related to advance payments to certain vendors for procurement of inventory. Additionally, other current assets include $22.3 
million as of March 31, 2022, for an estimated insurance recovery related to a certain litigation settlement as further described in Note 7. The insurance recovery amount, which w
ill be
 received by Flex, has been netted with net parent investment on the condensed combined balance sheet as of December 31, 2022.
Capitalized offering costs
Capitalized offering costs
Capitalized offering costs consist primarily of legal and accounting fees, which are direct and incremental fees related to the offering. These associated costs will be paid by Flex and offset against the net parent investment upon the IPO (see Note 1). The Company had $
7.9
 million and $
5.3
 million in capitalized offering costs as of December 31, 2022 and March 31, 2022, respectively, which are included in other current assets on the condensed combined balance sheets.
Accrued expenses
Accrued expenses
Accrued expenses include accruals primarily for freight and tariffs of $31.5 million and $20.7 million as of December 31, 2022 and March 31, 2022, respectively. In addition, it includes $12.7 million and $5.5 million accrued payroll as of December 31, 2022 and March 31, 2022, respectively.
Other liabilities
Other liabilities
Other liabilities primarily include the long-term portion of standard product warranty liabilities of $
9.3
 million and $
8.8
 million, respectively, and the long-term portion of deferred revenue of $
22.6
 million and $
29.6
 million as of December 31, 2022 and March 31, 2022, respectively.
Redeemable preferred units
Redeemable preferred units
On February 1, 2022, the LLC issued redeemable preferred units designated as “Series A Preferred Units,” representing a 16.67% interest in the LLC, to Flex in exchange for the cancellation of a portion of the LLC’s previously issued and outstanding common units. Flex sold all of the LLC’s Series A Preferred Units to TPG Rise Flash, L.P. (“TPG Rise”), an affiliate of the private equity firm TPG (“TPG”), on the same day. The holder of the Series A Preferred Units
is
entitled to cumulative
paid-in-kind
or cash dividends and ha
s
 the option to redeem the Series A Preferred Units or convert the Series A Preferred Units upon certain conditions. Because the redemption or conversion conditions are outside of the control of the Company, the Company had classified the Series A Preferred Units as temporary equity on the combined balance sheets.
 
For the nine-month period ended December 31, 2022, Nextracker recorded $18.8 million dividend to be paid in kind to TPG Rise based on a rate of 5% per annum.
At TPG Rise’s election, Flex is required to repurchase all of the outstanding Series A Preferred Units at their liquidation preference, which shall include all contributed but unreturned capital plus accrued but unpaid dividends, at the earlier of certain change in control events and February 1, 2028. Additionally, if Nextracker has not completed a Qualified Public Offering prior to February 1, 2027, then TPG Rise may cause Flex to repurchase all of the outstanding Series A Preferred Units at their fair market value. Nextracker has determined that a Qualified Public Offering is likely and that the change in control is not probable as of December 31, 2022, and as such, it is not probable that the Series A Preferred Units will become redeemable as of December 31, 2022 and the Series A Preferred Units are not accreted to current redemption value.
In April 2022, the Board approved the amendment and restatement of the Amended and Restated Limited Liability Company Agreement (“A&R LLC Agreement”) dated as of February 1, 2022. Such amendment provided for, among other things, an increase in the total number of Series A Preferred Units issued with a proportionate reduction in the Series A issue price, such that the ownership percentage of TPG Rise remained unchanged at 16.67%. As a result of the amendment, the number of Series A Preferred Units issued and outstanding was increased to 23,809,524.
Recently issued accounting pronouncement
Recently issued accounting pronouncement
In December 2022, the FASB issued ASU
2022-06
“Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848”, which defers the sunset date of ASC 848 from December 31, 2022 to December 31, 2024. ASC 848 provides relief for companies preparing for the discontinuation of interest rates, such as LIBOR. Entities that apply ASC 848 can continue to do so until December 31, 2024. The Company adopted the guidance during the third quarter of fiscal year 2023 with an immaterial impact on its condensed combined financial statements.
Parent Company [Member]  
Significant Accounting Policies [Line Items]  
Background and Nature of Operations
Background and Nature of Operations
Nextracker Inc. (the “Company”) was formed as a Delaware corporation on December 19, 2022 (“date of incorporation”) as a 
100
%-owned subsidiary of Yuma, Inc. (“Yuma”), a Delaware corporation and indirect wholly-owned subsidiary of Flex Ltd., a Singapore incorporated public company limited by shares and having a registration no. 199002645H, and its consolidated subsidiaries (“Flex”). The Company was formed for the purpose of completing an initial public offering (the “IPO”) and related transactions (the “Transactions”) in order to carry on the business of Nextracker LLC (formerly known as NEXTracker Inc.) (the “LLC”) and its subsidiaries, which is an entity comprised of the legacy solar tracker business of Flex that is a leading provider of intelligent, integrated solar tracker and software solutions used in utility-scale and ground-mounted distributed generation solar projects around the world. 
Basis of presentation
Basis of Presentation
The accompanying condensed financial statement is presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and the requirements of the SEC for interim reporting. As permitted under these rules, certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. The interim condensed financial statement is unaudited. The unaudited interim condensed financial statement has been prepared on the same basis as the December 19, 2022 audited financial statement and, in the opinion of management, reflects all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position as of December 31, 2022. Separate statements of income and comprehensive income, changes in stockholder’s equity, and cash flows have not been presented because there have been no activities in this entity from the date of incorporation to December 31, 2022.
Use of estimates
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in our financial statement and the accompanying notes. Actual results may differ materially from our estimates.
v3.22.4
Description of the Business and Summary of Significant Accounting Policies (Tables)
 9 Months Ended
Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Summary of Product Warranty
The following table summarizes the activity related to the estimated accrued warranty reserve for the three- and nine-month periods ended December 31, 2022 and 2021:
 
    
Three-month periods ended
     
Nine-month periods ended
  
(In thousands)
   
December 31,
2022
     
December 31,
2021
     
December 31,
2022
     
December 31,
2021
  
Beginning balance
    $ 11,431      $ 16,213      $ 10,485      $ 17,085  
Provision (release) for warranties issued (1)
      8,582        (2,373 )       9,974        (2,608 ) 
Payments
      (117 )       (404 )       (563 )       (1,041 ) 
    
 
 
     
 
 
     
 
 
     
 
 
  
Ending balance
    $ 19,896      $ 13,436      $ 19,896      $ 13,436  
    
 
 
     
 
 
     
 
 
     
 
 
  
 
(1)
During the three- and nine-month periods ended December 31, 2022, the Company identified a specific design issue with a
non-core
product, and recorded an additional $8.7 million charge to cost of sales on its condensed combined statement of operations and comprehensive income, related to future remediation costs, which may include replacement parts and services.
v3.22.4
Revenue (Tables)
 9 Months Ended
Dec. 31, 2022
Disaggregation of Revenue [Abstract]  
Summary of Nextracker's Revenue Disaggregation The following table presents Nextracker’s revenue disaggregated based on timing of transfer—point in time and over time for the three- and nine-month periods ended December 31, 2022 and 2021:
 
    
Three-month periods ended
     
Nine-month periods ended
  
(In thousands)
   
December 31, 2022
     
December 31, 2021
     
December 31, 2022
     
December 31, 2021
  
Timing of Transfer
                                    
Point in time
    $ 7,618      $ 41,220      $ 40,771      $ 63,024  
Over time
      505,752        296,387        1,342,971        954,755  
    
 
 
     
 
 
     
 
 
     
 
 
  
Total revenue
    $ 513,370      $ 337,607      $ 1,383,742      $ 1,017,779  
    
 
 
     
 
 
     
 
 
     
 
 
  
v3.22.4
Goodwill and intangible assets (Tables)
 9 Months Ended
Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
Summary of Intangible Assets
The components of identifiable intangible assets are as follows:
 
    
As of December 31, 2022
     
As of March 31, 2022
  
(In thousands)
   
Gross

carrying

amount
     
Accumulated

amortization
    
Net

carrying

amount
     
Gross

carrying

amount
     
Accumulated

amortization
    
Net

carrying

amount
  
Intangible assets:
                                                    
Trade name and other intangibles
    $ 15,900      $ (14,517 )    $ 1,383      $ 15,900      $ (13,372 )    $ 2,528  
    
 
 
     
 
 
    
 
 
     
 
 
     
 
 
    
 
 
  
Total
    $ 15,900      $ (14,517 )    $ 1,383      $ 15,900      $ (13,372 )    $ 2,528  
    
 
 
     
 
 
    
 
 
     
 
 
     
 
 
    
 
 
  
Summary of Intangible Asset Amortization Expense
Total intangible asset amortization expense recognized in operations during the three- and nine-month periods ended December 31, 2022 and 2021 are as follows:
 
    
Three-month periods ended
     
Nine-month periods ended
  
(In thousands)
   
December 31,
2022
     
December 31,
2021
     
December 31,
2022
     
December 31,
2021
  
Cost of sales
    $ 63      $ 63      $ 188      $ 3,980  
Selling general and administrative expense
      —          478        957        3,944  
    
 
 
     
 
 
     
 
 
     
 
 
  
Total amortization expense
    $ 63      $ 541      $ 1,145      $ 7,924  
    
 
 
     
 
 
     
 
 
     
 
 
  
Summary of Future Annual Amortization Expense
Estimated future annual amortization expense for the above amortizable intangible assets are as follows:
 
(In thousands)
   
Amount
  
Fiscal year ending March 31,
         
2023 (1)
    $ 62  
2024
      250  
2025
      250  
2026
      250  
2027
      250  
Thereafter
      321  
    
 
 
  
Total amortization expense
    $ 1,383  
    
 
 
  
 
(1)
Represents estimated amortization for the remaining fiscal three-month period ending March 31, 2023.
v3.22.4
Stock-based compensation (Tables)
 9 Months Ended
Dec. 31, 2022
Share-Based Payment Arrangement, Additional Disclosure [Abstract]  
Schedule of Employee Service Share Based Compensation Allocation of Recognized Period Costs
The following table summarizes Nextracker’s stock-based compensation expense related to Flex equity incentive plans:
 
    
Three-month periods ended
     
Nine-month periods ended
  
(In thousands)
   
December 31,
2022
     
December 31,
2021
     
December 31,
2022
     
December 31,
2021
  
Cost of sales
    $ 350      $ 426      $ 1,105      $ 1,105  
Selling, general and administrative expenses
      590        416        1,685        1,117  
    
 
 
     
 
 
     
 
 
     
 
 
  
Total stock-based compensation expense
    $ 940      $ 842      $ 2,790      $ 2,222  
    
 
 
     
 
 
     
 
 
     
 
 
  
v3.22.4
Relationship With Parent And Related Parties (Tables)
 9 Months Ended
Dec. 31, 2022
Related Party Transactions [Abstract]  
Summary of Material Transactions Reflected in Accumulated Net Parent Investment The following is a summary of material transactions reflected in the accumulated net parent investment during the three- and nine-month periods ended December 31, 2022 and 2021:
 
    
Three-month periods ended
     
Nine-month periods ended
  
(In thousands)
   
December 31,
2022
     
December 31,
2021
     
December 31,
2022
     
December 31,
2021
  
Corporate allocations (excluding stock-based compensation expense)
    $ 65      $ 2,604      $ 1,463      $ 7,849  
Transfer of operations to Nextracker (1)
      (51,527 )       4,558        (8,440 )       401  
Net cash pooling activities (2)
      10,154        (655 )       (1,195 )      (37,843 ) 
Income taxes
      13,890        5,043        29,622        14,721  
    
 
 
     
 
 
     
 
 
     
 
 
  
Net transfers (to) from Parent
    $ (27,418 )     $ 11,550      $ 21,450      $ (14,872 ) 
    
 
 
     
 
 
     
 
 
     
 
 
  
 
(1)
Primarily represents certain international operations where related income and/or losses are included in Nextracker’s condensed combined statements of operations. Cash was also collected by the international operations on behalf of Nextracker, for which Nextracker and Flex do not intend to settle in the future. For the nine-month period ended December 31, 2022, the balance includes the legal settlement paid by Flex as further disclosed in Note 7.
(2)
Primarily represents financing activities for cash pooling and capital transfers.
v3.22.4
Income Taxes (Tables)
 9 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Summary of Income Tax Expense
The following table presents income tax expense recorded by the Company along with the respective combined effective tax rates for each period presented
:
 
    
Three-month periods ended
    
Nine-month periods ended
  
(In thousands)
   
December 31, 2022
    
December 31, 2021
    
December 31, 2022
    
December 31, 2021
  
Income tax
      18,442       4,469       35,218       12,840  
Effective tax rates
      30.2 %      26.3 %      27.3 %      22.2  %
v3.22.4
Segment Reporting (Tables)
 9 Months Ended
Dec. 31, 2022
Segment Reporting [Abstract]  
Summary of Geographic Information of Revenue The following table sets forth geographic information of revenue based on the locations to which the products are shipped:
 
    
Three-month periods ended
     
Nine-month periods ended
  
(In thousands)
   
December 31, 2022
     
December 31, 2021
     
December 31, 2022
     
December 31, 2021
  
Revenue:
                                    
U.S.
    $ 327,548      $ 161,703      $ 908,361      $ 605,743  
Rest of the World
      185,822        175,904        475,381        412,036  
    
 
 
     
 
 
     
 
 
     
 
 
  
Total
    $ 513,370      $ 337,607      $ 1,383,742      $ 1,017,779  
    
 
 
     
 
 
     
 
 
     
 
 
  
v3.22.4
Organization of Nextracker - Additional Information (Details) - USD ($)
$ / shares in Units, $ in Millions
Feb. 13, 2023
Feb. 08, 2023
Dec. 31, 2022
Dec. 19, 2022
IPO [Member] | Common Class A [Member] | Subsequent Event [Member]        
Organization Consolidation And Presentation Of FinancialS tatements [Line Items]        
Stock issued during period, Shares, new issues 30,590,000 15,279,190    
Sale of stock price per share $ 24      
Proceeds from the IPO $ 693.8      
Payments for underwriting expense 40.4      
Flex [Member] | IPO [Member] | Common Class A [Member]        
Organization Consolidation And Presentation Of FinancialS tatements [Line Items]        
Offering costs     $ 7.9  
Flex [Member] | IPO [Member] | Common Class A [Member] | Subsequent Event [Member]        
Organization Consolidation And Presentation Of FinancialS tatements [Line Items]        
Offering costs $ 8.3      
Nextracker Inc [Member] | Yuma, Inc. [Member]        
Organization Consolidation And Presentation Of FinancialS tatements [Line Items]        
Noncontrolling interest, ownership percentage by parent       100.00%
v3.22.4
Description of the Business and Summary of Significant Accounting Policies - Summary of Product Warranty (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2022
Dec. 31, 2021
Product Warranty Liability [Line Items]        
Beginning balance $ 11,431 $ 16,213 $ 10,485 $ 17,085
Provision (release) for warranties issued 8,582 (2,373) 9,974 (2,608)
Payments (117) (404) (563) (1,041)
Ending balance $ 19,896 $ 13,436 $ 19,896 $ 13,436
v3.22.4
Description of the Business and Summary of Significant Accounting Policies - Summary of Product Warranty (Parenthetical) (Details)
$ in Millions
 9 Months Ended
Dec. 31, 2022
USD ($)
Cost of Sales [Member]  
Product Warranty Liability [Line Items]  
Product Warranty Expense $ 8.7
v3.22.4
Description of the Business and Summary of Significant Accounting Policies - Additional Information (Details) - USD ($)
$ / shares in Units, $ in Millions
 9 Months Ended
Feb. 13, 2023
Feb. 08, 2023
Dec. 31, 2022
Sep. 30, 2022
Jul. 01, 2022
Dec. 31, 2021
Oct. 01, 2021
Jul. 02, 2021
Dec. 31, 2022
Dec. 19, 2022
Mar. 31, 2022
Mar. 31, 2021
Product Warranty Liability [Line Items]                        
Product warranty description                 period ranging from five to ten years, depending on the component      
Short-term deposits and advances     $ 22.6           $ 22.6   $ 9.3  
Accrued Freight and Tariffs     31.5           31.5   20.7  
Accrued payroll     $ 12.7           12.7   $ 5.5  
Dividend to be paid in kind                 $ 18.8      
Temporary equity, shares outstanding     23,809,524           23,809,524   238,096  
Loss contingency insurance recovery receivable                     $ 22.3  
Other Current Assets [Member]                        
Product Warranty Liability [Line Items]                        
Deferred offering costs current     $ 7.9           $ 7.9   $ 5.3  
Other Noncurrent Liabilities [Member]                        
Product Warranty Liability [Line Items]                        
Standard product warranty liability non current     9.3           9.3     $ 8.8
Contract with customers liability non current     $ 22.6           $ 22.6     $ 29.6
Redeemable Preferred Units [Member]                        
Product Warranty Liability [Line Items]                        
Temporary Equity Dividnded Rate                 5.00%      
Common Class A [Member] | IPO [Member] | Subsequent Event [Member]                        
Product Warranty Liability [Line Items]                        
Stock issued during period, Shares, new issues 30,590,000 15,279,190                    
Sale of stock price per share $ 24                      
Proceeds from the IPO $ 693.8                      
Payments for underwriting expense $ 40.4                      
First Quarter [Member]                        
Product Warranty Liability [Line Items]                        
Quarter period duration         92 days     93 days        
Second Quarter [Member]                        
Product Warranty Liability [Line Items]                        
Quarter period duration       91 days     91 days          
Third Quarter [Member]                        
Product Warranty Liability [Line Items]                        
Quarter period duration     93 days     92 days            
TPG Rise [Member]                        
Product Warranty Liability [Line Items]                        
Ownership Interest                 16.67%      
Nextracker Inc [Member] | Yuma, Inc. [Member]                        
Product Warranty Liability [Line Items]                        
Noncontrolling interest, ownership percentage by parent                   100.00%    
Parent Company [Member] | Common Class A [Member] | IPO [Member] | Subsequent Event [Member]                        
Product Warranty Liability [Line Items]                        
Stock issued during period, Shares, new issues 30,590,000                      
Sale of stock price per share $ 24                      
Proceeds from the IPO $ 693.8                      
Payments for underwriting expense $ 40.4                      
Parent Company [Member] | Nextracker Inc [Member] | Yuma, Inc. [Member]                        
Product Warranty Liability [Line Items]                        
Noncontrolling interest, ownership percentage by parent                   100.00%    
v3.22.4
Stockholder's Equity - Additional Information (Details) - Parent Company [Member]
Dec. 31, 2022
$ / shares
shares
Class of Stock [Line Items]  
Common Stock, Shares Authorized 100
Common Stock, Shares, Issued 100
Common Stock, Par or Stated Value Per Share | $ / shares $ 0.01
Nextracker Inc. [Member]  
Class of Stock [Line Items]  
Common Stock, Shares, Issued 100
Yuma, Inc. [Member]  
Class of Stock [Line Items]  
Common Stock, Shares Authorized 100
Common Stock, Par or Stated Value Per Share | $ / shares $ 0.001
v3.22.4
Revenue - Summary of Nextracker's Revenue Disaggregation (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2022
Dec. 31, 2021
Disaggregation of Revenue [Line Items]        
Revenues $ 513,370 $ 337,607 $ 1,383,742 $ 1,017,779
Point in time [Member]        
Disaggregation of Revenue [Line Items]        
Revenues 7,618 41,220 40,771 63,024
Over time [Member]        
Disaggregation of Revenue [Line Items]        
Revenues $ 505,752 $ 296,387 $ 1,342,971 $ 954,755
v3.22.4
Revenue - Additional Information (Details) - USD ($)
$ in Thousands
 9 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 19, 2022
Mar. 31, 2022
Revenue From Contract With Customer [Line Items]        
Contract assets $ 267,665   $ 267,700 $ 292,407
Contract with customer assets funds withheld 120,900     $ 86,500
Contract with customer asset change in measure of timing and volume of billings 24,700      
Contract with customer liability, revenue recognized $ 73,100 $ 71,300    
Percentage of revenue recognized 68.00% 77.00%    
Transaction price allocated to performance obligation  $ 195,800      
Revenue remaining performance obligation percentage       88.00%
v3.22.4
Goodwill and intangible assets - Summary of Intangible Assets (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Mar. 31, 2022
Finite-Lived Intangible Assets [Line Items]    
Gross carrying amount $ 15,900 $ 15,900
Accumulated amortization (14,517) (13,372)
Net carrying amount 1,383 2,528
Trade name and other intangibles [Member]    
Finite-Lived Intangible Assets [Line Items]    
Gross carrying amount 15,900 15,900
Accumulated amortization (14,517) (13,372)
Net carrying amount $ 1,383 $ 2,528
v3.22.4
Goodwill and Intangible Assets - Summary of Intangible Asset Amortization Expense (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2022
Dec. 31, 2021
Finite Lived Intangible Assets Amortization Expense [Line Items]        
Amortization expense $ 63 $ 541 $ 1,145 $ 7,924
Cost of sales [Member]        
Finite Lived Intangible Assets Amortization Expense [Line Items]        
Amortization expense 63 63 188 3,980
Selling general and administrative expense [Member]        
Finite Lived Intangible Assets Amortization Expense [Line Items]        
Amortization expense $ 0 $ 478 $ 957 $ 3,944
v3.22.4
Goodwill and Intangible Assets - Summary of Future Annual Amortization Expense (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Mar. 31, 2022
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract]    
2023 $ 62  
2024 250  
2025 250  
2026 250  
2027 250  
Thereafter 321  
Total amortization expense $ 1,383 $ 2,528
v3.22.4
Goodwill and Intangible Assets - Additional Information (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Mar. 31, 2022
Goodwill And Intangible Assets Disclosure [Line Items]    
Goodwill $ 265,153 $ 265,153
v3.22.4
Stock-based compensation - Additional information (Details)
$ / shares in Units, $ in Millions
 9 Months Ended
Dec. 31, 2022
USD ($)
$ / shares
shares
2017 Plan [Member]  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Unrecognized compensation cost | $ $ 2.7
Weighted-average period over which cost not yet recognized is expected to be recognized 1 year
Number of share options (or share units) exercised during the current period. 0
Number of equity-based payment instruments vested during the period 0
Equity Instruments Other than Options, Nonvested oustanding 338,000
2017 Plan [Member] | Maximum [Member] | Restricted Stock Units (RSUs) [Member]  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Award vesting period 4 years
2017 Plan [Member] | Minimum [Member] | Restricted Stock Units (RSUs) [Member]  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Award vesting period 2 years
2022 Nextracker plan [Member]  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Award vesting period 4 years
Unrecognized compensation cost | $ $ 47.5
Weighted-average period over which cost not yet recognized is expected to be recognized 3 years
Number of shares issued under share-based payment arrangement 5,300,000
Number of equity-based payment instruments cancelled during the period 300,000
2022 Nextracker plan [Member] | Restricted Stock Units (RSUs) [Member]  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Number of equity-based payment instruments granted during the period 1,900,000
weighted average grant date fair values | $ / shares $ 16.72
2022 Nextracker plan [Member] | Share-Based Payment Arrangement, Option [Member]  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Number of shares issued under share-based payment arrangement 5,300,000
Gross number of share options granted during the period. 2,700,000
Share Price | $ / shares $ 21
weighted average grant date fair values | $ / shares $ 5.17
2022 Nextracker plan [Member] | Performance Based Restricted Share Unit Awards [Member]  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Number of shares issued under share-based payment arrangement 700,000
Number of equity-based payment instruments granted during the period 200,000
weighted average grant date fair values | $ / shares $ 18.86
2022 Nextracker plan [Member] | Maximum [Member] | Restricted Stock Units (RSUs) [Member]  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Award vesting period 3 years
2022 Nextracker plan [Member] | Maximum [Member] | Share-Based Payment Arrangement, Option [Member]  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Award vesting percentage 100.00%
2022 Nextracker plan [Member] | Maximum [Member] | Performance Based Restricted Share Unit Awards [Member]  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Award vesting percentage 200.00%
2022 Nextracker plan [Member] | Minimum [Member] | Restricted Stock Units (RSUs) [Member]  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Award vesting period 4 years
2022 Nextracker plan [Member] | Minimum [Member] | Share-Based Payment Arrangement, Option [Member]  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Award vesting percentage 0.00%
2022 Nextracker plan [Member] | Minimum [Member] | Performance Based Restricted Share Unit Awards [Member]  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Award vesting percentage 0.00%
v3.22.4
Stock-based compensation - Schedule of Employee Service Share Based Compensation Allocation of Recognized Period Costs (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2022
Dec. 31, 2021
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]        
stock-based compensation expense $ 940 $ 842 $ 2,790 $ 2,222
Cost of Sales [Member]        
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]        
stock-based compensation expense 350 426 1,105 1,105
Selling, General and Administrative Expenses [Member]        
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]        
stock-based compensation expense $ 590 $ 416 $ 1,685 $ 1,117
v3.22.4
Relationship with parent and related parties - Additional information (Details) - Flex Ltd [Member] - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2022
Dec. 31, 2021
Related Party Transaction [Line Items]        
General corporate expenses $ 1.0 $ 3.4 $ 4.2 $ 10.1
Selling, general and administrative expenses 0.7 2.6 2.8 7.8
Cost of sales 0.3 0.8 1.4 2.3
Related party transaction purchases from related party 14.1 10.4 43.0 37.1
Due to related parties $ 43.0 $ 33.3 $ 43.0 $ 33.3
v3.22.4
Risk Management and Financial Instruments - Summary of Material Transactions Reflected in Accumulated Net Parent Investment (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2022
Dec. 31, 2021
Related Party Transaction [Line Items]        
Related party transaction amounts of transaction $ (27,418) $ 11,550 $ 21,450 $ (14,872)
Corporate allocations (excluding stock-based compensation expense) [Member]        
Related Party Transaction [Line Items]        
Related party transaction amounts of transaction 65 2,604 1,463 7,849
Transfer Of operations To Nextracker [Member]        
Related Party Transaction [Line Items]        
Related party transaction amounts of transaction (51,527) 4,558 (8,440) 401
Net Cash Pooling Activities [Member]        
Related Party Transaction [Line Items]        
Related party transaction amounts of transaction 10,154 (655) (1,195) (37,843)
Income Taxes [Member]        
Related Party Transaction [Line Items]        
Related party transaction amounts of transaction $ 13,890 $ 5,043 $ 29,622 $ 14,721
v3.22.4
Commitments and Contingencies - Additional Information (Details) - USD ($)
$ in Millions
 1 Months Ended
Jul. 31, 2022
Mar. 31, 2022
Commitments and Contingencies Disclosure [Abstract]    
Litigation settlement amount awarded to other party $ 42.8  
Loss contingency insurance recovery receivable   $ 22.3
v3.22.4
Income Taxes - Additional Information (Details)
 9 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
U.S. domestic statutory income tax rate 21.00%
v3.22.4
Income Taxes - Summary of Income Tax Expense (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2022
Dec. 31, 2021
Income Tax Disclosure [Line Items]        
Income tax $ 18,442 $ 4,469 $ 35,218 $ 12,840
Effective tax rates 30.20% 26.30% 27.30% 22.20%
v3.22.4
Segment Reporting - Summary of Geographic Information of Revenue (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2022
Dec. 31, 2021
Revenue, Major Customer [Line Items]        
Revenue $ 513,370 $ 337,607 $ 1,383,742 $ 1,017,779
UNITED STATES        
Revenue, Major Customer [Line Items]        
Revenue 327,548 161,703 908,361 605,743
Non-US [Member]        
Revenue, Major Customer [Line Items]        
Revenue $ 185,822 $ 175,904 $ 475,381 $ 412,036
v3.22.4
Subsequent Events - Additional Information (Details) - USD ($)
$ / shares in Units, $ in Millions
 1 Months Ended
Feb. 28, 2023
Feb. 13, 2023
Feb. 10, 2023
Feb. 08, 2023
Jan. 31, 2023
Dec. 31, 2022
Subsequent Event [Line Items]            
Percentage of tax benefits on tax receivable agreement   85.00%        
Parent [Member]            
Subsequent Event [Line Items]            
Percentage of tax benefits on tax receivable agreement           85.00%
Subsequent Event [Member]            
Subsequent Event [Line Items]            
Number of shares repurchased during the period   100        
Subsequent Event [Member] | Parent [Member]            
Subsequent Event [Line Items]            
Number of shares repurchased during the period   100        
Description of reference rate used for variable rate of debt instrument   SOFR rate of 3.49%        
Preferred Stock, Shares Authorized       50,000,000    
Preferred Stock, Par or Stated Value Per Share       $ 0.0001    
Subsequent Event [Member] | 2023 Credit Agreement [Member] | Eurodollar [Member] | Maximum [Member]            
Subsequent Event [Line Items]            
Basis points 200.00%          
Subsequent Event [Member] | 2023 Credit Agreement [Member] | Eurodollar [Member] | Maximum [Member] | Parent [Member]            
Subsequent Event [Line Items]            
Basis points 200.00%          
Subsequent Event [Member] | 2023 Credit Agreement [Member] | Eurodollar [Member] | Minimum [Member]            
Subsequent Event [Line Items]            
Basis points 162.50%          
Subsequent Event [Member] | 2023 Credit Agreement [Member] | Eurodollar [Member] | Minimum [Member] | Parent [Member]            
Subsequent Event [Line Items]            
Basis points 162.50%          
Subsequent Event [Member] | 2023 Credit Agreement [Member] | Base Rate [Member] | Maximum [Member]            
Subsequent Event [Line Items]            
Basis points 100.00%          
Subsequent Event [Member] | 2023 Credit Agreement [Member] | Base Rate [Member] | Maximum [Member] | Parent [Member]            
Subsequent Event [Line Items]            
Basis points 100.00%          
Subsequent Event [Member] | 2023 Credit Agreement [Member] | Base Rate [Member] | Minimum [Member]            
Subsequent Event [Line Items]            
Basis points 62.50%          
Subsequent Event [Member] | 2023 Credit Agreement [Member] | Base Rate [Member] | Minimum [Member] | Parent [Member]            
Subsequent Event [Line Items]            
Basis points 62.50%          
Subsequent Event [Member] | 2023 Credit Agreement [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member]            
Subsequent Event [Line Items]            
Debt instrument, interest rate, effective percentage   5.12%        
Description of reference rate used for variable rate of debt instrument   SOFR rate of 3.49        
Debt Instrument, basis spread on variable rate   1.63%        
Subsequent Event [Member] | 2023 Credit Agreement [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Parent [Member]            
Subsequent Event [Line Items]            
Debt instrument, interest rate, effective percentage   5.12%        
Debt Instrument, basis spread on variable rate   1.63%        
Subsequent Event [Member] | 2023 Credit Agreement [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Maximum [Member]            
Subsequent Event [Line Items]            
Basis points 200.00%          
Subsequent Event [Member] | 2023 Credit Agreement [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Maximum [Member] | Parent [Member]            
Subsequent Event [Line Items]            
Basis points 200.00%          
Subsequent Event [Member] | 2023 Credit Agreement [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Minimum [Member]            
Subsequent Event [Line Items]            
Basis points 162.50%          
Subsequent Event [Member] | 2023 Credit Agreement [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Minimum [Member] | Parent [Member]            
Subsequent Event [Line Items]            
Basis points 162.50%          
Subsequent Event [Member] | 2023 Credit Agreement [Member] | Revolving Credit Facility [Member]            
Subsequent Event [Line Items]            
Line of credit facility, Maximum borrowing capacity $ 500.0          
Subsequent Event [Member] | 2023 Credit Agreement [Member] | Revolving Credit Facility [Member] | Parent [Member]            
Subsequent Event [Line Items]            
Line of credit facility, Maximum borrowing capacity $ 500.0          
Subsequent Event [Member] | 2023 Credit Agreement [Member] | Revolving Credit Facility [Member] | Maximum [Member]            
Subsequent Event [Line Items]            
Long-Term line of credit   $ 100.0        
Quarterly commitment fee on the undrawn portion 35.00%          
Subsequent Event [Member] | 2023 Credit Agreement [Member] | Revolving Credit Facility [Member] | Maximum [Member] | Parent [Member]            
Subsequent Event [Line Items]            
Long-Term line of credit $ 100.0          
Quarterly commitment fee on the undrawn portion 35.00%          
Subsequent Event [Member] | 2023 Credit Agreement [Member] | Revolving Credit Facility [Member] | Minimum [Member]            
Subsequent Event [Line Items]            
Quarterly commitment fee on the undrawn portion 20.00%          
Subsequent Event [Member] | 2023 Credit Agreement [Member] | Revolving Credit Facility [Member] | Minimum [Member] | Parent [Member]            
Subsequent Event [Line Items]            
Quarterly commitment fee on the undrawn portion 20.00%          
Subsequent Event [Member] | 2023 Credit Agreement [Member] | Term Loan [Member]            
Subsequent Event [Line Items]            
Line of credit facility, Maximum borrowing capacity $ 150.0          
Line of credit facility frequency of payment and payment terms The Term Loan requires quarterly principal payments beginning on June 30, 2024 in an amount equal to 0.625% of the original aggregate principal amount of the Term Loan. From June 30, 2025, the quarterly principal payment will increase to 1.25% of the original aggregate principal amount of the Term Loan. The remaining balance of the Term Loan and the outstanding balance of any RCF loans will be repayable on February 11, 2028.          
Subsequent Event [Member] | 2023 Credit Agreement [Member] | Term Loan [Member] | Parent [Member]            
Subsequent Event [Line Items]            
Line of credit facility, Maximum borrowing capacity $ 150.0          
Line of credit facility frequency of payment and payment terms The Term Loan requires quarterly principal payments beginning on June 30, 2024 in an amount equal to 0.625% of the original aggregate principal amount of the Term Loan. From June 30, 2025, the quarterly principal payment will increase to 1.25% of the original aggregate principal amount of the Term Loan. The remaining balance of the Term Loan and the outstanding balance of any RCF loans will be repayable on February 11, 2028.          
Subsequent Event [Member] | 2023 Credit Agreement [Member] | Swing Line Loans [Member]            
Subsequent Event [Line Items]            
Long-Term line of credit   50.0        
Subsequent Event [Member] | 2023 Credit Agreement [Member] | Swing Line Loans [Member] | Parent [Member]            
Subsequent Event [Line Items]            
Long-Term line of credit $ 50.0          
Subsequent Event [Member] | 2023 Credit Agreement [Member] | Letter of Credit [Member]            
Subsequent Event [Line Items]            
Long-Term line of credit   $ 300.0        
Subsequent Event [Member] | 2023 Credit Agreement [Member] | Letter of Credit [Member] | Parent [Member]            
Subsequent Event [Line Items]            
Long-Term line of credit $ 300.0          
Subsequent Event [Member] | Common Class B [Member] | Parent [Member]            
Subsequent Event [Line Items]            
Common Stock, Shares Authorized       500,000,000    
Common Stock, Par or Stated Value Per Share       $ 0.0001    
Subsequent Event [Member] | Common Class A [Member] | Parent [Member]            
Subsequent Event [Line Items]            
Common Stock, Shares Authorized       900,000,000    
Common Stock, Par or Stated Value Per Share       $ 0.0001    
Subsequent Event [Member] | IPO [Member]            
Subsequent Event [Line Items]            
Distribution in an aggregate amount     $ 175.0      
Subsequent Event [Member] | IPO [Member] | Parent [Member]            
Subsequent Event [Line Items]            
Distribution in an aggregate amount     175.0      
Subsequent Event [Member] | IPO [Member] | Nextracker Inc. [Member]            
Subsequent Event [Line Items]            
Common unit outstanding   45,869,190        
Subsequent Event [Member] | IPO [Member] | Nextracker Inc. [Member] | Parent [Member]            
Subsequent Event [Line Items]            
Common unit outstanding   45,869,190        
Subsequent Event [Member] | IPO [Member] | 2023 Credit Agreement [Member]            
Subsequent Event [Line Items]            
Proceeds from term loan     150.0      
Subsequent Event [Member] | IPO [Member] | 2023 Credit Agreement [Member] | Parent [Member]            
Subsequent Event [Line Items]            
Proceeds from term loan     150.0      
Subsequent Event [Member] | IPO [Member] | Common Class A [Member]            
Subsequent Event [Line Items]            
Stock issued during period, Shares, new issues   30,590,000   15,279,190    
Proceeds from the IPO   $ 693.8        
Subsequent Event [Member] | Yuma, Inc [Member] | IPO [Member]            
Subsequent Event [Line Items]            
Distribution in an aggregate amount     153.3      
Proceeds from the IPO     $ 693.8      
Common unit issued     30,590,000      
Common unit price per unit     $ 22.68      
Common unit outstanding     30,590,000      
Subsequent Event [Member] | Yuma, Inc [Member] | IPO [Member] | Parent [Member]            
Subsequent Event [Line Items]            
Stock issued during period, Shares, new issues     30,590,000      
Distribution in an aggregate amount     $ 153.3      
Proceeds from the IPO     $ 693.8      
Common unit price per unit     $ 22.68      
Common unit outstanding     30,590,000      
Subsequent Event [Member] | Yuma, Inc [Member] | IPO [Member] | Common Class B [Member]            
Subsequent Event [Line Items]            
Stock issued during period, Shares, new issues     128,794,522      
Subsequent Event [Member] | Yuma, Inc [Member] | IPO [Member] | Common Class B [Member] | Parent [Member]            
Subsequent Event [Line Items]            
Stock issued during period, Shares, new issues     128,794,522      
Subsequent Event [Member] | TPG Rise [Member] | Parent [Member]            
Subsequent Event [Line Items]            
Preferred units converted to LLC common units     $ 25,026,093      
Subsequent Event [Member] | TPG Rise [Member] | Common Class A [Member] | Parent [Member]            
Subsequent Event [Line Items]            
Stock issued during period, Shares, new issues     15,279,190      
Subsequent Event [Member] | TPG Rise [Member] | IPO [Member]            
Subsequent Event [Line Items]            
Distribution in an aggregate amount     $ 21.7      
Preferred units converted to LLC common units     $ 25,026,093      
Subsequent Event [Member] | TPG Rise [Member] | IPO [Member] | Parent [Member]            
Subsequent Event [Line Items]            
Distribution in an aggregate amount     $ 21.7      
Reverse Unit Split [Member] | Subsequent Event [Member]            
Subsequent Event [Line Items]            
Stockholders' equity reverse stock split         1-for-2.1  
Reverse Unit Split [Member] | Subsequent Event [Member] | Parent [Member]            
Subsequent Event [Line Items]            
Stockholders' equity reverse stock split         1-for-2.1