Summary of Accounting Policies |
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Jul. 03, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of accounting policies | Summary of accounting policies Basis of presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) for reporting financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements, and should be read in conjunction with the Company’s audited consolidated financial statements as of and for the fiscal year ended March 31, 2026, contained in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2026 (the “Form 10-K”). In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary to present the Company’s financial statements fairly have been included. Operating results for the three-month period ended July 3, 2026 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2027 or any future period. The unaudited condensed consolidated balance sheet as of March 31, 2026 was derived from the Company’s audited consolidated financial statements included in the Form 10-K. All intercompany transactions and balances within Nextpower have been eliminated. Certain prior year amounts have been reclassified to conform to the current year presentation. The first quarters for fiscal years 2027 and 2026 ended on July 3, 2026 (94 days) and June 27, 2025 (88 days), respectively. Translation of foreign currencies The reporting currency of the Company is the United States dollar (“USD”). The functional currency of the Company and its subsidiaries is primarily the USD. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in other income, net in the accompanying unaudited condensed consolidated statements of operations. The Company recognized foreign currency exchange losses of $1.0 million and $0.3 million during the three-month periods ended July 3, 2026 and June 27, 2025, respectively, driven by unfavorable exchange rate fluctuations in certain currencies. Use of estimates The preparation of financial statements in conformity with U.S. 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 credit losses, provision for excess or obsolete inventories, valuation of deferred tax assets, warranty reserves, contingencies, operation-related accruals, fair values of awards granted under stock-based compensation plans and fair values of assets obtained and liabilities assumed in business combinations. Due to geopolitical conflicts (including the Russian invasion of Ukraine and the U.S.-Iran war), there has been and will continue to be uncertainty and disruption in the global economy and financial markets. These estimates may change as new events occur and additional information is obtained. Actual results may differ from previously estimated amounts, and such differences may be material to the unaudited condensed consolidated 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 unaudited condensed consolidated financial statements. Product warranty Nextpower offers an assurance type warranty for its products against defects in design, materials and workmanship for a period ranging from 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 the Company’s 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 Nextpower specific projects. 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-month periods ended July 3, 2026 and June 27, 2025:
Out of the total warranty liabilities of $34.1 million, $32.8 million and $18.5 million as of July 3, 2026, March 31, 2026, and June 27, 2025, respectively, $8.2 million, $8.0 million, and $8.0 million, respectively, were presented within other liabilities on the unaudited condensed consolidated balance sheets, while short-term warranty liabilities were presented within other current liabilities. Inventories Inventories are stated at the lower of cost, determined on a weighted average basis, or net realizable value. Nextpower’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 $29.5 million and $51.3 million as of July 3, 2026 and March 31, 2026, respectively, primarily related to advance payments to certain vendors for procurement of inventory. Deferred tax assets Deferred tax assets of $509.0 million and $511.8 million as of July 3, 2026 and March 31, 2026, respectively, are primarily related to the Company’s investment in Nextpower LLC (the “LLC”) as described in Note 12 in the notes to the consolidated financial statements included in the Form 10-K. Accrued expenses Accrued expenses include accruals primarily for freight and tariffs of $71.1 million and $58.2 million as of July 3, 2026 and March 31, 2026, respectively. In addition, accrued expenses also include $41.9 million and $71.9 million of accrued payroll as of July 3, 2026 and March 31, 2026, respectively. TRA liability The TRA liability related to the amount expected to be paid to Flex Ltd. (“Flex” or the “former parent”), TPG Inc. (“TPG”) and 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”) pursuant to the Tax Receivable Agreement (as defined in the section entitled “Management's Discussion and Analysis of Financial Condition and Results of Operations–Liquidity and Capital Resources” in the Form 10-K), was $393.2 million and $393.2 million, as of July 3, 2026 and March 31, 2026, respectively, of which $373.8 million and $372.7 million, respectively, was included in TRA liability and $19.4 million and $20.5 million, respectively, was included in other current liabilities on the unaudited condensed consolidated balance sheets. During the three-month period ended June 27, 2025, a payment of $2.9 million, was made to the former parent, TPG and the TPG Affiliates, which is presented as a financing activity on the unaudited condensed consolidated statement of cash flows. No payment was made during the three-month period ended July 3, 2026. Other liabilities Other liabilities primarily consist of of $38.4 million and $41.0 million, and contingent earnouts for the Company’s acquisitions of $34.9 million and $38.6 million, as of July 3, 2026 and March 31, 2026, respectively. Recently adopted accounting pronouncement Financial Accounting Standards Board (“FASB”) Accounting Standards Update 2025-05, Financial Instruments—Credit Losses: In July 2025, the FASB issued a new accounting standard, which provides a practical expedient (for all entities) related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under FASB Accounting Standards Codification (“ASC”) 606. The Company adopted the new guidance in the first quarter of fiscal year 2027 with an immaterial impact on its unaudited condensed consolidated financial statements.
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