管理層發言
Good afternoon, everyone, and thank you for standing by. My name is Sierra, and I will be your conference operator today. Today's call is being recorded. I would like to welcome everyone to Nextracker's Second Quarter Fiscal Year 2025 Earnings Call. After the speakers' remarks, there will be a question-and-answer session. At this time, for opening remarks, I would like to pass the conference over to Mary Lai, Vice President of Investor Relations. Mary, you may begin.
Thank you, and good afternoon, everyone. Welcome to Nextracker's second quarter fiscal year 2025 earnings call. I'm Mary Lai, Vice President of Investor Relations. I'm joined by Dan Shugar, our CEO and Founder; Howard Wenger, our President; and Chuck Boynton, our CFO. On today's call, we will open with brief remarks from our CEO, Dan, and then immediately transition into a Q&A session. As a reminder, there will be a replay of this call posted on the IR website, along with our earnings press release and shareholder letter. Today's call contains statements regarding our business, financial performance, and operations, including our business and our industry that may be considered forward-looking statements, and such statements involve risks and uncertainties that may cause actual results to differ materially from our expectations. Those statements are based on current beliefs, assumptions, and expectations and speak only as of the current date.
For more information on those risks and uncertainties, please review our earnings press release, shareholder letter, and our SEC filings, including our most recently filed quarterly report on Form 10-Q and annual report on Form 10-K, which are available on our IR website at investors.nextracker.com. This information is subject to change, and we undertake no obligation to update any forward-looking statements as a result of the new information, future events, or changes in our expectations. Please note, we will provide GAAP and non-GAAP measures on today's call. The full non-GAAP to GAAP reconciliation can be found in the appendix to the press release and the shareholder letter as well as the financial section of the IR website. And now I will turn the call over to our CEO and Founder. Dan?
Thank you, Mary, and thank you all for joining our Q2 earnings call. We are very pleased with the continued strong execution by the Company across the board in products, sales, and operations, driving solid financial performance. Before we cover the Company's performance, I'd like to offer a few comments on the upcoming election in the United States, which is our largest market. There have been questions addressed to Nextracker and our sector regarding the potential impact of the election on solar. We believe our company and industry will grow, regardless of election outcome. As we have steadily grown through prior Democratic and Republican administrations, we believe we will be successful in any scenario because energy projects are less about politics and more about economics, and solar is the lowest cost form of energy in most markets. It's about the maturity of projects in development in the interconnection queue.
And it's about the availability of capital to finance projects, where risks are considered. In all of these areas, solar shines. The U.S. has a growing appetite for new power, and we believe solar and battery projects are best positioned to satisfy that need. Further, most of the manufacturing investments and solar power plants in the country are located in red states, and the underpinning economic value delivered to those states is significant and real. So much so that 18 Republican members of the House of Representatives sent a unified letter to Speaker Johnson in support of the IRA, demonstrating again the bipartisan support for clean energy and why we believe key elements of the Inflation Reduction Act will persist independent of the outcome of the upcoming election. In summary, we believe Nextracker will continue to grow in the U.S. under either administration. And now let's turn to our company performance.
Q2 was another quarter of strong execution, marking our seventh consecutive quarter of double-digit revenue growth year-over-year. Revenue for the first half of our fiscal '25 was a record, with an increase of 29% year-over-year. We continue to see strong demand for our products globally across all regions, driven in part by a flight to quality across a range of criteria that matter to customers. We strongly believe that Nextracker offers the highest quality and most reliable product on the market with the lowest installed cost, lowest operating cost, highest production, and differentiated technology and engineering. We believe these factors will help to drive demand and enable pricing discipline. Our team is also differentiated with sector domain expertise, a robust global supply chain that delivers products on time, and a customer service ethic that measures in response to customer requirements at each phase of the customer journey.
Customers are rewarding these values with sales orders. Our backlog increased significantly quarter-over-quarter to a new record of over $4.5 billion, and we are pleased with the margin profile of our backlog for this fiscal year and beyond. As a result of the new orders, we are raising our profit target for the full fiscal year by $20 million at the midpoint to $645 million. We are also receiving customer orders for our new products, including NX Horizon, NXTR 1.5, NX Horizon Low Carbon Tracker, NX Hail Pro-75, and our new NX Foundation technologies. All of these products have been successfully deployed in the field. Most of these products resulted from focused R&D investments made by Nextracker. In Q2, we inaugurated our third global design facility in Nextracker's Center of Solar Excellence in Hyderabad, India, a 13-acre facility with a 30,000 square foot state-of-the-art laboratory. Our three global design labs incubate and commercialize PV technologies, localized for regional needs and optimize products for customer requirements as we are serving projects in over 40 countries around the world.
A few months ago, in response to customer demand, we accelerated to Q3 of this year the availability of our 100% domestically manufactured tracker. We received customer orders for it, which will ship later this quarter. To our knowledge, we are the only tracker manufacturer that can deliver a 100% U.S. manufactured tracker. This capability can provide tremendous benefits to U.S. customers because it enables them to achieve a much higher score on their domestic content and can enable them to capture a 10% bonus investment tax credit, or ITC. On a typical 100-megawatt system, the 10% bonus ITC can have a value to the customer of roughly $10 million, equivalent approximately to the entire cost of the tracker. Last quarter, we announced the closing of two Foundation business acquisitions which are on track to be successfully integrated by the end of the fiscal year. At the RE+ North America Conference last month, we debuted our NX Foundation Solutions business and customer reception exceeded expectations.
We have signed new booking orders for our Foundation solutions and our NX Horizon trackers and see a robust pipeline business. We're excited for what our Foundation Solutions will do for our customers, enabling quicker, safer, and more efficient solar project development on a wide range of soil types for EPC and developer customers. In summary, it was a great first half of fiscal '25, and we remain focused on executing our plan to achieve double-digit revenue growth for the full year with a raised profitability target. Looking forward, we expect fiscal 2026 to be another growth year, comprised of both our legacy products such as NX Horizon and the five new product offerings I just mentioned. The customer demand for our industry-leading products and our ability to execute and support customers' success give us the confidence to achieve our growth supported by our growing backlog. We now look forward to your questions. Let me pass the call back to the operator.
分析師問答
Our first question today comes from Philip Shen with ROTH Capital Partners. Your line is now open.
Congrats on the very strong quarter. Wanted to check in on the bookings. Our math suggests bookings were close to, if not greater than $1 billion for the quarter. I was wondering if you could talk through what the margin profile looks like for the bookings. Dan, I think you mentioned in your remarks that you were pleased with the margins. Can you kind of give us a baseline or comparison to the strong margins from this quarter? And do you think the bookings are in line with that, maybe a little bit lower or higher? And then when you think about the new bookings, how much of that was your new products? And do you have any new MSA agreements or volume commitment orders or obligations in that backlog as well?
Thank you, Phil, and thanks for the multifaceted question. I appreciate that. This is Dan. Howard, can you weigh in on Phil's question?
Certainly. We had another strong quarter with impressive performance in revenue, profitability, and bookings. Increasing our backlog to over $4.5 billion is a significant achievement for the Company. Regarding our business mix, approximately two-thirds comes from the U.S. and one-third from the rest of the world. This is important because the rest of the world includes competitive markets like the Middle East, which has the lowest solar electricity prices globally, ranging from $0.01 to $0.02 per kilowatt hour. Our pricing and margins can differ by region. That said, we're pleased with the new bookings, as they align well with our two-thirds to one-third business mix. The margin profile for both segments and the overall business is consistent with our profitability expectations moving forward. Additionally, we do have MSAs and VCAs included in the bookings. Thank you, Phil, for your question.
Our next question today comes from Praneeth Satish with Wells Fargo. Your line is now open.
I echo Phil's comments on a strong quarter. You mentioned that you expect to realize 90% of the backlog in eight quarters. So, I think that's a slight improvement from last quarter where you said you expect to realize 80% of the backlog in eight quarters. Can you talk about what's helping shrink that timeline? Is it simply just a higher mix of international projects with a faster revenue conversion cycle? Or are you seeing an improvement on the U.S. side?
It's both actually. We're receiving orders with shorter timelines, which has contributed to the increase in backlog and raised that metric from 80% to 90%. We anticipate recognizing 90% of expected revenue from our backlog over the next eight quarters. So yes, both shorter cycles are equally contributing to this change.
Our next question today comes from Mark Strouse with JPMorgan. Your line is now open.
Congratulations on the quarter. On Page 5 of the shareholder letter, you mentioned double-digit revenue growth for fiscal '25. However, regarding fiscal '26, is there a specific reason you're not indicating double-digit growth? Are you referring to the visibility from your backlog, or is there something in your bookings activity that suggests growth might be less than double digits next year?
Mark, Dan Shugar here. We will provide more details on the FY '26 revenue plan in future earnings calls. The company has never been in a better position than it is today with a backlog of $4.5 billion. We've observed growth in fees across many global regions, which is fantastic as multiple areas contribute to steady growth. While one region may outperform another from quarter to quarter, we experienced strong growth in higher-value regions during the first half of this fiscal year. In the second half, we anticipate increased shipments in more competitive regions, such as the Middle East, as Howard noted. Overall, we are on track to achieve what we promised: double-digit growth for the year, meeting our revenue goals and raising our profitability expectations. Thank you for the question.
Our next question today comes from Dimple Gosai with Bank of America. Your line is now open.
Can you provide some insight into the competitive landscape and customer behavior, particularly in relation to the upcoming elections and the urgency to move domestic products? Additionally, could you share details on your new customer acquisitions and whether they are primarily in the U.S. or international markets? I believe you mentioned adding eight new customers.
Okay. This is Howard. We are observing strong and consistent demand across all our major regions, including North America, the Middle East, India, Africa, Latin America, Europe, Australia, and New Zealand. The demand is being driven by the increasing need for electricity, global electrification, data centers, hyperscalers, electric vehicles, and the push for clean energy. This broader macro environment is supporting demand, and the upcoming U.S. elections are not negatively impacting this perspective. We are seeing an increase in our backlog and exceeding our performance metrics. On the customer side, we are noticing a significant preference for Nextracker, and we have communicated the unique value our company offers. Our tracker design is distinct, and not all trackers are built the same or function similarly. We believe our tracker architecture stands out, and customers truly value that.
This advantage extends to our operations, operational excellence, and the financial stability of our company, which has a strong balance sheet with $1.5 billion in liquidity. These projects require substantial capital, and since they produce one of the least expensive forms of energy using solar and storage, having a reliable tracker, which is essential for the system, is crucial. All these factors enhance our value proposition, contributing to a preference for Nextracker. Thank you for the question.
Our next question comes from Christine Cho with Barclays. Your line is now open.
I thought maybe I would hit on margins. So, you guys are doing well above the high 20s guidance. And I realize this is the full year guide, and I know your mix shift to the U.S. is slightly higher than the 2/3 year-to-date. And I think your shareholder letter also talks about software coming in better at 2%. But other than that, is there anything else you would point to, to bridge the gap on where in the cost structure you might be doing better than you expected? Or alternatively, anything that should bring gross margins down in the back half of this year, other than the mix shift shifting back toward rest of world? And just lastly, when you say structural gross margin, can you help us better understand what that definition is? Does that mean where you think gross margins will naturally settle out without any subsidies? Whether it's explicit 45x credit or lower bill of materials offered instead of the explicit 45x credit?
Thank you, Christine, Chuck Boynton here. I appreciate your question. So first of all, Q1 and Q2 were incredibly strong quarters based on execution. And execution is really the key word. We overdelivered based on our product teams, our customer service teams out in the field, delivering our projects on time with quality. And when you do that with great products, deliver on time, good things tend to happen. Margins tend to be a little bit better than you plan when you deliver a great product on time, on schedule. The second thing is we've seen a really significant uptake in TrueCapture. TrueCapture is the best industry-leading software that manages the power plant that drives the best sales in the industry. TrueCapture has fairly high margins because of software, and we saw a lot of systems being commissioned in Q2. That allowed us to really accelerate margins in Q2, and that will probably not repeat in Q3 and Q4.
It might, but our plan is it will be more like 1% to 2%. It was higher than that in Q2. So, then the third factor is 45x. We had some accumulated 45x benefits from prior quarters that got amortized into Q2, and that will not repeat in the back half of the year. In the letter, we talked about 300 basis points of overachievement in Q2 that are likely not to repeat in Q3 and Q4. And then Howard mentioned the international projects. In the first half, we had a really high share of U.S. projects that delivered really strong margins, great value for our customers. The back half of the year, we have some very large projects, especially in Q4, scheduled deliveries that are in very, very competitive markets, and that effectively averages out the Company to effectively 2/3:1/3 international:U.S. mix. The structural margin comment is really taking a step back, thinking about what is the business on average if you blend out the model of 2/3:1/3 international, on average, what would the margin profile look like?
And we're saying, structurally, it should be in the high 20s, maybe low 30s. So that's a comment that the Company has made consistently, and we've been overperforming that based on really great execution. Thank you, Christine. Next question.
Our next question comes from Brian Lee with Goldman Sachs. Your line is now open.
I have a couple of questions. Regarding the software aspect, Chuck or Dan, could you discuss how you view the attach rate? This is the first time you’ve shared the percentage of sales, and it seems like there could be potential for growth. I recall you mentioning during the IPO that the figure was probably too small to disclose. How do you perceive the attach rate? Additionally, can you provide some insights on the margin uplift compared to the high 20% structural growth? Where does software fit into that? Also, in instances where customers do not sign up for TrueCapture, what factors contribute to that aside from the added cost?
Thank you, Brian. Over the long term, the adoption rate of TrueCapture has significantly increased. We introduced TrueCapture, an adaptive tracking software, about seven years ago, and it operates in all our major regions worldwide. To my knowledge, there are over 300 projects using TrueCapture. We have collaborated with top independent engineers who value TrueCapture, and it has been validated through actual field measurements. This means that customers are becoming more comfortable with TrueCapture. As markets mature and we enter new or early markets, the adoption rate of TrueCapture tends to rise. One point we discussed during the IPO is that TrueCapture follows a different revenue recognition model compared to our hardware business, where revenue and profitability are recognized upon delivery. With TrueCapture, revenue is recognized when the systems are turned on, leading to a lag between hardware delivery and when the systems are commissioned and used.
As Chuck mentioned, in the last quarter, we saw increased TrueCapture revenue as systems were being shipped but not yet activated. We are very optimistic about the global growth of the TrueCapture business and the engagement from independent engineers. We continue to release new features and technology that enhance TrueCapture's effectiveness. For instance, we introduced a feature called Zonal Diffuse, which you can find on YouTube, and another feature called Split Boost, which increases energy generation. If you search for Split Boost and Nextracker on YouTube, you'll see how it works. These features not only enhance the performance of TrueCapture but also increase the amount of energy it generates. Thank you for your question.
Brian, I want to mention that from a margin perspective, software is somewhat unique as it generally involves higher research and development expenses. A significant amount of investment goes into intellectual property and technology development. As a result, while the reported gross margin appears quite high, it is accompanied by operating expenses in the R&D category. This quarter, we have indeed increased our investment in R&D, and we intend to further boost our R&D spending in the third and fourth quarters, which is contributing to this added value. Thank you.
Our next question comes from Dylan Nassano with Wolfe Research. Your line is now open.
Peer spoke on their earnings call last night. They're talking about shipping modules to warehouses for customers who aren't yet ready to accept the product. I don't know if you guys listen to that call, but just two questions on that is, have you seen any impact on your projects in your backlog specifically from those actions? And can you also just remind us what kind of recourse do you have when it comes to exercising contractual delivery rights should it be necessary?
Yes. I'm sorry, can you repeat who announced your shipping modules to warehouses?
Yes. Sorry, it was First Solar. They were just talking about, yes, shipping directly to warehouses.
This is Howard. I'll respond to the question. My understanding is that it's quite limited, at least that's our perspective. I don't want to speak on behalf of First Solar. We're observing consistent activity on a project-by-project basis. This means that from quarter to quarter, we're experiencing some project schedules being delayed while others are being advanced. Overall, due to the variety of EPCs we collaborate with, the number of owners, and the range of projects we have both in the U.S. and internationally, we're able to manage these fluctuations effectively. I believe we've demonstrated this over the last seven quarters since going public. However, on an individual project level, we might see delays or shifts of a month, six weeks, or sometimes longer, but there isn't a strong pattern emerging. We are not witnessing any significant upward trend compared to what we discussed last quarter. In fact, I would say we are seeing more stability in our shipping schedules from last quarter to this quarter. Thank you for the question.
Our next question comes from Maheep Mandloi with Mizuho. Your line is now open.
First, just on the revenue cadence. I think in the new that you've pointed to flattish in Q3. It's how this Q4 weighted. So, if you just talk about how many book and billings you still need to do for Q4 or the second half? And separately, on the structural margins or ratio of that, could you just talk about the structuring OpEx you expect? I think you talked about higher OpEx in Q3, Q4 for R&D, but how should we think about that going forward?
This is Howard. I'll respond to the first part of your question, while Chuck will address the second part concerning spending. We feel very confident about our fiscal year 2025 due to our strong backlog and clear visibility. We're in excellent shape there. We've consistently met or exceeded our top-line expectations, primarily driven by megawatt shipments each quarter. Looking ahead, we have high confidence for the next quarter and for the entire year, including Q4. As Dan and Chuck have mentioned, we anticipate a very strong quarter and are quite assured about our ability to deliver. Chuck, would you like to discuss the operating expenses?
I will. Thank you. And just to put context, Q4 will be the single biggest quarter in the Company's history, and it's going to put a lot of pressure on our supply chain team. They are amazing and work to the challenge, but we have booked and sold a lot of business, and it's going to be a really, really strong Q4. On the OpEx side, we're making really important strategic investments, primarily in technology. We believe the Company has a very big moat with our technology, and we want to deepen and widen that moat with investments, key investments in R&D. You saw in Q2 R&D spend went up by $3 million. SG&A was flat. And we would intend in the back half of the year to continue to invest in R&D as well as sales and go-to-market in key geographies to drive revenue and sales for coming years.
Our next question comes from Joseph Osha with Guggenheim Partners. Your line is now open.
Turning to your 45x disclosure, I'd like to clarify. The 300 basis point uplift that you referred to is sort of the incremental credit. It does not refer to the totality of the 45x uplift. Am I reading your language correctly?
Joe, yes. Think of that the 300 basis points was a combination of TrueCapture, 45x and other, which is, I would call that great execution of our field teams. And so, 45x, think of that as maybe 1/3 of that, the year-over-year benefits, though, just to be clear, Joe. 45x was not in our prior year ago numbers. We had a cumulative catch up in Q4, as you might recall, that was GAAP only. And so, when you compare year-over-year to 45x, we want to just be super transparent and clear that they're not purely comparative. Thank you.
Our next question comes from Jonathan Kees with Daiwa Capital Markets. Your line is now open.
Great. Of all your instructions, just limit myself one. I'll also add my kudos to the quarter, the results. Just wanted to ask about project cancellations. You had mentioned last quarter, you had a customer who had canceled out. It was just a small customer. Just curious if you had anything like that this quarter.
Thank you for your question. We have not had any projects canceled this quarter. As for the project that was canceled last quarter, it was one out of over 500 projects. That’s the current situation.
Our next question comes from Kashy Harrison with Piper Sandler. Your line is now open.
Congrats on the quarter. So, my question is on NX Foundation. Just based on your analysis of your pipeline, I was wondering if you could discuss what proportion of sites fall under the definition of hard terrain that would be applicable to Ojjo? And then do you have any U.S. Foundation revenues, hard terrain or otherwise in fiscal '25? And then finally, when do you expect to start quantifying the Foundation backlog?
Okay. I'll take the first part of the question. And then, Chuck, you take the second part of the question, please?
Yes.
We had a great launch event at RE+ for our Foundations business. We presented a map from the U.S. Geological Service indicating areas where Bedrock is within one meter of the surface. A significant portion of the U.S. has rock close to the surface, meaning that traditional piles would encounter rock. Over the years, as the solar market has expanded geographically, there has been an increase in the number of sites with rock that needs to be managed, as well as other challenging soil types like frosty soils, expansive clay soils, or swampy soils. Our two foundation technologies are designed to address these challenges. In terms of specific figures, we mentioned that 20% to over 30% of sites are considered difficult sites. Some of our customers report that over half of their sites fall into this category, depending on their geographic activity range. This is quite significant. That answers the first part of your question. Chuck, please address the second part.
Yes. Kashy, thank you for the question. In Q2, we actually booked and reported revenue for our new Foundations business. So, we're super real that we have customers paying us money for this technology. We have booked new transactions. We don't expect the dollars to be significant this year. And that's a stay tuned for Analyst Day and our views on next year. We'll provide more color as we think about talking about next fiscal year. Thank you.
Our next question comes from Jon Windham with UBS. Your line is now open.
Perfect. Congratulations on the 100% U.S. domestic content capabilities. As you plan to ramp and ship that next year, just wondering if you could give us some thoughts or guidepost about what proportion of your U.S. business is that likely to be? I appreciate it.
Thanks, Jon. And just as a point of clarification, we actually have our first 100% U.S. tracker scheduled for delivery this quarter. So, we were able to accelerate that based on customer demand. With respect to the percentage of our business next year that could use the 100% domestic tracker. We're going to have to wait and see on that and speak to it later. It comes a bit to customer needs. It also relates to their module mix. But what we're working on is, from a supply chain standpoint, getting ahead of the curve. And that's consistent with how Nextracker massively ramped our U.S. business prior to Build Back Better, prior to the IRA, we were ramping our U.S. supply chain, and we've ramped it in other key markets such as India. This quarter, in India, we announced we've had a 95% content, for example, in India, with over 10 gigs of capacity in India for India. And in the U.S., over 30 gigs of our major components in the U.S. for the U.S. We are seeing continued demand and stronger demand than we anticipated for this 100% U.S. content tracker. We'll have to wait and see before we guide to that number; we could address that potentially on our subsequent or the following earnings call or the Analyst Day that Chuck mentioned. Thank you.
Our next question comes from Ben Kallo with Baird. Your line is now open.
Just because the international opportunity is so big, and the U.S. opportunity is better margins. What do you guys optimize for? Sales growth or margin or EPS growth, cash flow?
We are focused on optimizing growth in a responsible way that is profitable and value-adding for the company. When considering entering a new region, we assess its contributions similarly to a merger or acquisition. We recognize the significant international opportunities alongside the U.S. market. I recently returned from India, where I learned that they aim for 500 gigawatts of renewable energy by 2030, which means about 50 gigawatts each year just for India. This target is substantial, functioning similarly to a Renewable Portfolio Standard, meaning states must comply to achieve their clean power goals, or they risk losing funding. We've observed a global shift toward electrification and clean energy, and we plan to engage with this trend responsibly. Thank you for your question.
Our next question comes from Jordan Levy with Truist. Your line is now open.
I think Chuck, in an earlier comment, mentioned the efforts on the R&D side regarding expansion into new technologies and markets. I wanted to see if you could provide any additional information about the types of opportunities that are appealing to you.
Yes. So, the question is, what new R&D efforts are we taking on? Dan, maybe you should take that question.
Sure. Thank you, Jordan. The best way to approach this is to note that we have over 600 patents issued and pending across three categories: mechanical, electronic, and controls and software. These categories are interconnected rather than separate. For instance, the mechanical aspect ties into the control systems, which in turn relate to the software like TrueCapture. This integration enhances value for our customers. We continue to invest significantly in all these areas, supported by a well-defined process that assesses innovation, quantifies its value to customers, evaluates incremental investment, risks, and time frames. Based on our available budget, we prioritize and fund projects accordingly, and we have consistently increased that budget. We've seen great results from this approach, as evidenced by our technologies being piloted in the field. Our Hail Pro-75, for example, is currently operational in real utility-scale power plants, which has proven to be very productive. Additionally, we are open to acquiring technologies that could complement our offerings. I believe we have time for one more question. Operator?
Our next question comes from Julien Dumoulin-Smith with Jefferies. Your line is now open.
Guys, can you hear me, okay?
Crystal, Julien.
Awesome. Sorry about that. I wasn't sure if it was coming through earlier. Just to follow up. Earlier on the U.S. content, how many points you qualifying for under the domestic content just to clarify the 100% product? And then just coming back to the margin question quickly here. Obviously, first half versus back half, as you think about that exit run rate in the back half year, is that kind of what you should be thinking about in terms of an EBITDA margin going forward for the remainder of that backlog? Or is the first half of this year really kind of a good indicator of what you can put up as you think about embedded in that backlog across the $4.5 billion?
Thank you, Julien. This is Howard. I'll respond to the first part of your question, and Chuck will address the second. We're pleased to report that we have successfully delivered on domestic content this quarter for our customers, and the uptake has been higher than we expected. This is largely due to our ability to help customers qualify for 24.7 points out of 100. To clarify, if they require 40 or 45 points to receive a 10% credit, we are already providing more than half of those points. Customers are showing significant interest as they consider how many domestic panels they need to meet that requirement. That's my response to the first part of your question. Chuck?
Yes. Julien, we're not going to sort of do our outlook for next year and beyond today. But a lot of the factors, the structural kind of high 20s, maybe low 30s gross margins would translate into, call it, 20-ish EBITDA margin it's too really right now to say what that's going to look like next year because there's a lot of factors, mix, attach rates of TrueCapture, our new Foundations businesses. And it's more appropriate to talk about that at our Analyst Day or at our Q4 earnings call as we roll out the outlook for next year. Dan, do you want to close?
Yes. First, thank you, everyone, for joining our earnings call. We thank the entire Nextracker team, our shareholders, and our highly valued customers and partners as we march ahead for a renewably powered world. Thanks for joining our call today.
Thank you. This concludes our Q2 earnings call.
That will conclude today's conference call. Thank you for your participation. You may now disconnect.