Nextpower (Nasdaq: NXT) lifts guidance after Q1 FY27 earnings

Rhea-AI Filing Summary

Nextpower Inc. reported Q1 FY27 revenue of $935 million and GAAP net income of $165 million, with GAAP gross margin of 35.9% and GAAP diluted EPS of $1.07. Adjusted EBITDA was $233 million and adjusted diluted EPS $1.20; results include about $99 million of IRA 45X credits.

Backlog grew to more than $5.5 billion, supported by acquisitions including the Prevalon energy storage business and Apex Power, while an agreement to acquire Zimmermann PV-Steel Group is expected to expand its European footprint. Cash and cash equivalents were $1.21 billion as of July 3, 2026, and adjusted free cash flow was $105 million.

For FY2027, Nextpower now expects revenue of $4.1 to $4.4 billion, GAAP net income of $540 to $573 million and GAAP diluted EPS of $3.42 to $3.64. Updated guidance embeds roughly $50 million of additional costs tied to accelerated entry into the power conversion market.

Filing Explained

Q1 generated $105,160 thousand of adjusted free cash flow, while the proposed Zimmermann acquisition still depends on closing conditions.

Form 8-K reports specified material events, and this filing uses Item 2.02 to disclose Nextpower’s completed first fiscal quarter ended July 3, 2026.

The quarter generated net cash from operating activities of $121,059 thousand and adjusted free cash flow of $105,160 thousand, leaving cash and equivalents at $1,213,898 thousand; the immediate structural effect disclosed is increased cash liquidity.

Adjusted free cash flow is presented as operating cash flow less property and equipment purchases. The company also says its non-GAAP measures exclude items such as stock-based compensation, intangible amortization, and acquisition-related costs, and are not GAAP alternatives.

Cash increased from $1,094,976 thousand at March 31, 2026 to $1,213,898 thousand at July 3, 2026; operating cash flow and adjusted free cash flow were $121,059 thousand and $105,160 thousand, respectively, compared with $81,324 thousand and $70,066 thousand in the year-earlier quarter.

The proposed Zimmermann PV-Steel Group acquisition was not presented as completed; the filing identifies closing conditions, including required government approvals, as remaining dependencies.

8-K Event Classification

2 items: 2.02, 9.01

2 items

Item 2.02 Results of Operations and Financial Condition Financial

Disclosure of earnings results, typically an earnings press release or preliminary financials.

Item 9.01 Financial Statements and Exhibits Exhibits

Financial statements, pro forma financial information, and exhibit attachments filed with this report.

Key Figures

Revenue: $935 million GAAP Net Income: $165 million GAAP Diluted EPS: $1.07 +5 more

8 metrics

Revenue $935 million Q1 FY27 revenue; Q1 FY26 revenue was $864 million

GAAP Net Income $165 million Q1 FY27 GAAP net income with 17.7% net margin

GAAP Diluted EPS $1.07 Q1 FY27 GAAP diluted earnings per share

Adjusted EBITDA $233 million Q1 FY27 adjusted EBITDA with 24.9% margin

Backlog more than $5.5 billion Total backlog after Q1 FY27, including acquisitions

Cash and Cash Equivalents $1,213,898 thousand Cash and cash equivalents as of July 3, 2026

FY2027 Revenue Outlook $4.1 to $4.4 billion Updated full-year FY2027 revenue guidance range

Adjusted Free Cash Flow $105,160 thousand Q1 FY27 adjusted free cash flow

Key Terms

Adjusted EBITDA, Section 45X credit, Tax receivable agreement (TRA), non-GAAP financial measures, +1 more

5 terms

Adjusted EBITDA financial

"including adjusted earnings before interest, taxes, depreciation, and amortization (“Adjusted EBITDA”), adjusted EBITDA margin"

Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.

Section 45X credit financial

"Section 45X credit receivable | 311,560 | | 352,598"

A section 45X credit is a government production tax incentive that pays manufacturers a set amount for each qualifying clean-energy component or advanced technology item they make domestically. For investors, it’s like a per-unit bonus that can meaningfully raise a factory’s revenue and improve profit margins, making companies that qualify more valuable and lowering the effective cost of building clean-energy supply chains.

Tax receivable agreement (TRA) financial

"Tax receivable agreement (TRA) liability | 373,811 | | 372,659"

non-GAAP financial measures financial

"the Company discloses certain non-GAAP financial measures that exclude certain charges and gains"

Non-GAAP financial measures are numbers companies use to show their financial performance that exclude certain expenses or income. They help investors see how the company might perform without one-time costs or other unusual items, giving a different perspective from official reports. However, since they can be adjusted, they don’t always tell the full story and should be looked at alongside standard financial figures.

backlog financial

"Grew backlog to more than $5.5 billion, reflecting strong customer demand"

A backlog is the amount of work or orders that a company has received but hasn't completed yet. It’s like a restaurant with many dishes to serve; the backlog shows how many orders are still waiting to be finished. It matters because a large backlog can indicate strong demand or potential delays in delivering products or services.

Earnings Snapshot

Revenue: $935 million · Guidance included

Q1 FY27 (quarter ended July 3, 2026)

Revenue $935 million up from $864 million in Q1 FY26

GAAP net income $165 million slightly above $157 million in Q1 FY26

GAAP diluted EPS $1.07 vs $1.04 in Q1 FY26

Adjusted EBITDA $233 million vs $215 million in Q1 FY26

Adjusted diluted EPS $1.20 vs $1.16 in Q1 FY26

Guidance

For FY2027, the company guides to revenue of $4.1–$4.4 billion, GAAP net income of $540–$573 million, GAAP diluted EPS of $3.42–$3.64, adjusted EBITDA of $870–$930 million, and adjusted diluted EPS of $4.42–$4.73, incorporating about $50 million of incremental power conversion entry costs.

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Available on EDGAR 07/30/2026 - 04:07 PM Accepted by SEC EDGAR 07/30/2026 - 04:06 PM Learn about SEC filing dates

FAQ

What were Nextpower (NXT)'s key Q1 FY27 revenue and profit figures?

Nextpower (NXT) generated Q1 FY27 revenue of $935 million and GAAP net income of $165 million. GAAP gross margin was 35.9%, GAAP net margin 17.7%, and GAAP diluted EPS reached $1.07, with adjusted diluted EPS of $1.20 including the impact of IRA 45X credits.

How did Nextpower (NXT)'s Q1 FY27 earnings compare with Q1 FY26?

Q1 FY27 revenue of $935 million increased from $864 million in Q1 FY26. GAAP net income was $165 million versus $157 million a year earlier, while GAAP diluted EPS was $1.07 compared with $1.04 and adjusted diluted EPS was $1.20 versus $1.16.

What FY2027 guidance did Nextpower (NXT) provide or update?

For FY2027, Nextpower now forecasts revenue of $4.1 to $4.4 billion, GAAP net income of $540 to $573 million, GAAP diluted EPS of $3.42 to $3.64, adjusted EBITDA of $870 to $930 million, and adjusted diluted EPS of $4.42 to $4.73, raising the low ends versus prior guidance.

How strong are Nextpower (NXT)'s backlog and cash position after Q1 FY27?

Nextpower reported backlog of more than $5.5 billion, reflecting strong bookings and contributions from acquisitions like Prevalon. Cash and cash equivalents totaled $1,213,898 thousand as of July 3, 2026, supporting a solid balance sheet alongside positive operating and adjusted free cash flow.

What acquisitions and strategic moves did Nextpower (NXT) highlight?

Nextpower expanded its clean power technology platform with the Prevalon energy storage acquisition, the Apex Power and Zigor inverter assets, and an agreement to acquire Zimmermann PV-Steel Group. These moves add energy storage, power conversion capabilities, incremental backlog above $300 million and broader European reach.

What non-GAAP measures does Nextpower (NXT) emphasize in its results?

Nextpower highlights adjusted gross profit and margin, adjusted operating income, adjusted EBITDA, adjusted net income, adjusted diluted EPS and adjusted free cash flow. These exclude stock-based compensation, intangible amortization, acquisition-related costs and certain tax effects to supplement, but not replace, GAAP metrics.

false000185213100018521312026-07-302026-07-30

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 30, 2026

Nextpower Inc.

(Exact name of registrant as specified in its charter)

Delaware

001-41617

36-5047383

(State or other jurisdiction of incorporation)

(Commission File Number)

(IRS Employer Identification No.)

6200 Paseo Padre Parkway, Fremont, California 94555

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (510) 270-2500

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of exchange on which registered

Class A Common Stock, par value $0.0001

NXT

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02     Results of Operations and Financial Condition.

On July 30, 2026, Nextpower Inc. (the “Company”) issued a press release announcing its results for the first fiscal quarter ended July 3, 2026. A copy of the press release is attached as Exhibit 99.1 to this current report on Form 8-K and is incorporated by reference herein.

The information contained in Item 2.02 of this current report on Form 8-K and the exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

Item 9.01     Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.			Description
99.1			Press Release, dated July 30, 2026
104			Cover Page Interactive Data (embedded within the Inline XBRL document)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Nextpower Inc.
By:			/s/ Charles Boynton
			Charles Boynton
			Chief Financial Officer

Date: July 30, 2026

Exhibit 99.1

Nextpower Reports Q1 Fiscal Year 2027 Financial Results

Record quarterly revenue and backlog driven by strong customer demand and disciplined execution; continued expansion of power technology platform

FREMONT, Calif., July 30, 2026 – Nextpower™ (Nasdaq: NXT), a leading provider of clean power technology solutions, today announced financial results for the first quarter for fiscal year 2027, ended July 3, 2026.

Financial Summary

(In millions, except per share)

			Q1 FY27			Q4 FY26			Q1 FY26
Revenue			$935			$881			$864
GAAP Gross Profit			$336			$297			$282
GAAP Gross Margin			35.9		%	33.8		%	32.6		%
GAAP Net Income			$165			$151			$157
GAAP Net Income Margin			17.7		%	17.1		%	18.2		%
GAAP Diluted EPS			$1.07			$0.97			$1.04
Adjusted Gross Profit			$342			$304			$285
Adjusted Gross Margin			36.6		%	34.5		%	33.0		%
Adjusted EBITDA			$233			$202			$215
Adjusted EBITDA Margin			24.9		%	22.9		%	24.9		%
Adjusted Net Income			$186			$162			$176
Adjusted Diluted EPS			$1.20			$1.05			$1.16

Q1 FY27, Q4 FY26, and Q1 FY26 results include approximately $99 million, $47 million, and $82 million, respectively, of IRA 45X advanced manufacturing tax credit vendor rebates and tariffs, net.

Please refer to Nextpower’s most recent Quarterly Report on Form 10-Q and Annual Report on Form 10-K for more information on schedules III, IV and V attached to this press release for a reconciliation of non-GAAP to GAAP financial measures. Additional information can be found on the Investor Relations section of our website.

Business Highlights

•Grew backlog to more than $5.5 billion, reflecting strong customer demand and bookings momentum across core tracker products and accelerating growth in complementary platform technologies. Prevalon, closed in July 2026, adds incremental backlog significantly above $300 million.

•Expanded Nextpower’s clean power technology platform through acquisition of the Prevalon energy storage business as well as Apex Power and key assets of Zigor Corporation’s inverter business. Also announced an agreement to acquire Zimmermann PV-Steel Group to expand Nextpower’s European footprint and product portfolio.

•Delivered record quarterly eBOS bookings, with eBOS revenue on track to exceed well over $100 million for the year, achieved UL certification of NX PowerMergeTM and grew cumulative PowerMerge bookings to over 850 MW.

•Expanded the company’s #1 U.S. and global tracker market shares, according to Wood Mackenzie, while expanding Nextpower’s global project footprint to over 50 countries.

“Nextpower delivered record quarterly revenue and backlog, with strong bookings momentum across our business,” said Dan Shugar, CEO and founder of Nextpower. “These results confirm that customers are responding positively to our expanding clean power technology platform, including strong adoption of eBOS and growing traction across the broader product portfolio. With the recent addition of power conversion and energy storage product lines, we believe Nextpower is positioned to deliver even more value to customers as they generate, store, control, and deliver reliable power at scale. Our team remains focused on enhanced customer value, operational excellence, and disciplined growth.”

“This quarter’s financial performance and strong cash generation reinforce the durability of our business model and the execution of our operating platform,” said Chuck Boynton, CFO of Nextpower. “We remain focused on disciplined capital allocation maintaining a strong balance sheet, and investing in capabilities that complement our core business, deepen customer relationships, and drive long-term profitable growth.”

FY2027 Annual Outlook

			Updated Outlook			Previous Outlook
Revenue			$4.1 to $4.4 billion			$4.0 to $4.4 billion
GAAP Net Income			$540 to $573 million			$507 to $573 million
GAAP Diluted EPS			$3.42 to $3.64			$3.22 to $3.64
Adjusted EBITDA			$870 to $930 million			$845 to $930 million
Adjusted Diluted EPS			$4.42 to $4.73			$4.30 to $4.73

Updated outlook includes planned incremental costs of approximately $50 million related to the acceleration of our entry into the power conversion market.

Adjusted EBITDA range of $870 million to $930 million excludes approximately $199 million for stock-based compensation, net intangible amortization, and acquisition related costs.

Adjusted Diluted EPS range of $4.42 to $4.73 excludes approximately $1.05 for stock-based compensation, net intangible amortization, and acquisition related costs, net of impacts for tax.

Q1 FY2027 Earnings Call

July 30, 2026

2:00 p.m. PT / 5:00 p.m. ET

Live webcast available on investors.nextpower.com

We encourage you to review our Q1 FY27 Shareholder Letter, which, along with this press release, is available on the Nextpower Investor Relations website and includes important information for Nextpower shareholders that supplements and expands on the information in this press release.

The webcast replay will be available on the Nextpower Investor Relations website following the conclusion of the event.

About Nextpower

Nextpower™ (Nasdaq: NXT) innovates and delivers integrated technology solutions for modern energy infrastructure. Its solar and energy storage platforms help customers design, build, and operate utility-scale power plants and other critical power infrastructure with faster project delivery, improved system performance, greater reliability, and long-term operational value. Building on more than a decade of energy technology leadership, Nextpower partners with customers worldwide to accelerate the deployment of reliable firm power needed for a rapidly electrifying world. Learn more at www.nextpower.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation statements relating to: the trends for energy demand and future solar adoption; the demand for our products (including but not limited to trackers, foundations, eBOS, NX PowerMerge, our other products and our bundled solutions); the ability to grow our core tracker business, our bookings and backlog, including our ability to convert our backlog into revenue; our competitiveness and global market share; our expansion into energy storage solutions, data center power infrastructure and our ability to provide integrated solutions across solar, energy storage and data center applications; the expected benefits of the Prevalon, Apex/Zigor and other recent acquisitions and the proposed acquisition of Zimmermann PV-Steel Group (including the benefits our customers may realize as a result of integrating these businesses and assets into Nextpower’s); the benefits of UL certification for NX PowerMerge and the Apex inverter system; and statements regarding our outlook for fiscal year 2027 and other periods. These forward-looking statements are only predictions and may differ materially from actual results due to a variety of factors including but not limited to: our ability to execute our strategies, mission, plans, objectives and goals; our ability to complete the pending acquisition of Zimmermann PV-Steel Group and to satisfy the transaction’s closing conditions including obtaining the requisite government approvals; our ability to integrate our other recently completed acquisitions and to realize their anticipated benefits and synergies; the market demand for our products, solutions and services and our ability to deliver them to customers; projections regarding the U.S. and global demand for electricity and solar power; macro-economic trends; changing business conditions in our industry and markets overall; and legislative, regulatory and economic developments. These forward-looking statements are based on various assumptions and on the current expectations of Nextpower’s management. These statements involve risks and uncertainties that could cause the actual results to differ materially from those anticipated by these forward-looking statements, including risks and uncertainties that are also described under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Nextpower’s most recent Quarterly Report on Form 10-Q, Annual Report on Form 10-K and other documents that Nextpower has filed or will file with the Securities and Exchange Commission. There may be additional risks that Nextpower is not aware of or that Nextpower currently believes are immaterial that could also cause actual results to differ from these forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements. Nextpower assumes no obligation to update these forward-looking statements.

Use of Adjusted Financial Information

An explanation and reconciliation of non-GAAP financial measures to GAAP financial measures is presented in Schedules III, IV and V attached to this press release, and can be found, along with other financial information including the Earnings Presentation, on the investor relations section of our website at investors.nextpower.com.

Channels for Disclosure of Information

Nextpower intends to announce material information to the public through the Nextpower Investor Relations website investors.nextpower.com, SEC filings, press releases, public conference calls, and public webcasts. Nextpower uses these channels to communicate with its investors, customers, and the public about the company, its offerings, and other issues. As such, Nextpower encourages investors, the media, and others to follow the channels listed above and to review the information disclosed through such channels.

Investor Contact:

Sarah Lee

Investor@nextpower.com

Media Contact:

Brandy Lee

Media@nextpower.com

Schedule I

Nextpower Inc.

Unaudited condensed consolidated statements of operations

(In thousands, except per share data)

			Three-month periods ended
			July 3, 2026						March 31, 2026						June 27, 2025
Revenue			$	935,170					$	880,517					$	864,253
Cost of sales			599,317						583,140						582,527
Gross profit			335,853						297,377						281,726
Selling, general and administrative expenses			100,438						100,625						73,936
Research and development			44,508						43,166						21,560
Operating income			190,907						153,586						186,230
Interest expense			253						338						1,216
Other income, net			(8,271)						(6,387)						(5,953)
Income before income taxes			198,925						159,635						190,967
Provision for income taxes			33,570						9,032						33,784
Net income			165,355						150,603						157,183
Earnings per share:
Basic			$	1.10					$	1.01					$	1.06
Diluted			$	1.07					$	0.97					$	1.04
Weighted-average shares used in computing per share amounts:
Basic			150,778						148,496						147,631
Diluted			155,142						154,664						150,901

Schedule II

Nextpower Inc.

Unaudited condensed consolidated balance sheets

(In thousands)

			As of July 3, 2026						As of March 31, 2026
ASSETS
Current assets:
Cash and cash equivalents			$	1,213,898					$	1,094,976
Accounts receivable, net of allowance of $2,164 and $2,078, respectively			444,711						417,043
Contract assets			607,382						533,257
Inventories			261,625						262,276
Section 45X credit receivable			311,560						352,598
Other current assets			189,070						186,406
Total current assets			3,028,246						2,846,556
Property and equipment, net			89,183						78,356
Goodwill			488,950						488,950
Other intangible assets, net			80,640						78,046
Deferred tax assets			509,009						511,815
Other assets			66,179						69,489
Total assets			$	4,262,207					$	4,073,212
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable			$	535,974					$	533,490
Accrued expenses			112,955						130,133
Deferred revenue			319,837						307,492
Other current liabilities			157,596						192,747
Total current liabilities			1,126,362						1,163,862
Tax receivable agreement (TRA) liability			373,811						372,659
Long-term deferred revenue			113,007						102,493
Other liabilities			91,924						99,801
Total liabilities			1,705,104						1,738,815
Total stockholders’ equity			2,557,103						2,334,397
Total liabilities and stockholders’ equity			$	4,262,207					$	4,073,212

Schedule III

Nextpower Inc.

Unaudited condensed consolidated statements of cash flows

(In thousands)

									Three-month periods ended
																					July 3, 2026						June 27, 2025
Cash flows from operating activities:
Net income																					$	165,355					$	157,183
Depreciation and amortization of intangible assets																					8,766						5,789
Changes in working capital and other, net																					(53,062)						(81,648)
Net cash provided by operating activities																					121,059						81,324
Cash flows from investing activities:
Payment for business acquisitions, net of cash acquired																					—						(86,413)
Purchases of property and equipment																					(15,899)						(11,258)
Other investing activities																					(6,000)						(400)
Net cash used in investing activities																					(21,899)						(98,071)
Cash flows from financing activities:
Proceeds from exercises of options awards																					26,008						—
TRA payment																					—						(2,944)
Distribution to former non-controlling interest holder																					—						(3,010)
Payment of acquisition deferred purchase price																					(6,246)						—
Net cash provided by (used in) financing activities																					19,762						(5,954)
Net increase (decrease) in cash and cash equivalents																					118,922						(22,701)
Cash and cash equivalents beginning of period																					1,094,976						766,103
Cash and cash equivalents end of period																					$	1,213,898					$	743,402

			Three-month periods ended
Adjusted free cash flow			July 3, 2026						June 27, 2025
Net cash provided by operating activities			$	121,059					$	81,324
Purchases of property and equipment			(15,899)						(11,258)
Adjusted free cash flow			$	105,160					$	70,066

Schedule IV

Nextpower Inc.

Reconciliation of GAAP to Non-GAAP financial measures

(In thousands, except percentages and per share data)

			Three-month periods ended
			July 3, 2026												March 31, 2026												June 27, 2025
GAAP gross profit & margin			$	335,853					35.9%						$	297,377					33.8%						$	281,726					32.6%
Stock-based compensation expense			4,445												4,530												2,238
Intangible amortization			1,985												1,958												1,159
Adjusted gross profit & margin			$	342,283					36.6%						$	303,865					34.5%						$	285,123					33.0%
GAAP operating income & margin			$	190,907					20.4%						$	153,586					17.4%						$	186,230					21.5%
Stock-based compensation expense			29,638												32,480												22,310
Intangible amortization			3,375												3,718												2,059
Acquisition related costs			4,148												6,276												1,079
Adjusted operating income & margin			$	228,068					24.4%						$	196,060					22.3%						$	211,678					24.5%
GAAP net income & margin			$	165,355					17.7%						$	150,603					17.1%						$	157,183					18.2%
Stock-based compensation expense			29,638												32,480												22,310
Intangible amortization			3,375												3,718												2,059
Adjustment for taxes			(16,254)												(32,719)												(7,129)
Acquisition related costs			4,148												6,276												1,079
Other			—												1,385												—
Adjusted net income & margin			$	186,262					19.9%						$	161,743					18.4%						$	175,502					20.3%
GAAP net income & margin			$	165,355					17.7%						$	150,603					17.1%						$	157,183					18.2%
Interest, net			(9,159)												(8,679)												(5,371)
Provision for income taxes			33,570												9,032												33,784
Depreciation expense			5,391												5,298												3,730
Intangible amortization			3,375												3,718												2,059
Stock-based compensation expense			29,638												32,480												22,310
Acquisition related costs			4,148												6,276												1,079
Other tax related loss, net			—												1,254												—
Other			235												1,817												—
Adjusted EBITDA & margin			$	232,553					24.9%						$	201,799					22.9%						$	214,774					24.9%
Diluted earnings per share
GAAP diluted earnings per share			$	1.07											$	0.97											$	1.04
Earnings per share attributable to Non-GAAP adjustments			0.13												0.08												0.12
Adjusted diluted earnings per share			$	1.20											$	1.05											$	1.16
Diluted shares used in computing per share amounts			155,142												154,664												150,901

Schedule V

Nextpower Inc.

Notes

To supplement Nextpower’s unaudited selected financial data presented consistent with U.S. Generally Accepted Accounting Principles (“GAAP”), the Company discloses certain non-GAAP financial measures that exclude certain charges and gains, including adjusted earnings before interest, taxes, depreciation, and amortization (“Adjusted EBITDA”), adjusted EBITDA margin, adjusted gross profit, adjusted gross margin, adjusted operating income, adjusted operating margin, adjusted net income, adjusted net income margin, adjusted diluted earnings per share, and adjusted free cash flow. These supplemental measures exclude certain legal and other charges, stock-based compensation expense and intangible amortization, other discrete events as applicable and the related tax effects. These non-GAAP measures are not in accordance with or an alternative for GAAP and may be different from non-GAAP measures used by other companies. We believe that these non-GAAP measures have limitations in that they do not reflect all the amounts associated with Nextpower’s results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Nextpower’s results of operations in conjunction with the corresponding GAAP measures. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measures. We compensate for the limitations of non-GAAP financial measures by relying upon GAAP results to gain a complete picture of the Company’s performance.

In calculating non-GAAP financial measures, we exclude certain items to facilitate a review of the comparability of the Company’s operating performance on a period-to-period basis because such items are not, in our view, related to the Company’s ongoing operational performance. We use non-GAAP measures to evaluate the operating performance of our business, for comparison with forecasts and strategic plans, for calculating return on investment, and for benchmarking performance externally against competitors. In addition, management’s incentive compensation is determined using certain non-GAAP measures. Since we find these measures to be useful, we believe that investors benefit from seeing results “through the eyes” of management in addition to seeing GAAP results. We believe that these non-GAAP measures, when read in conjunction with the Company’s GAAP financials, provide useful information to investors by offering:

•the ability to make more meaningful period-to-period comparisons of the Company’s ongoing operating results;

•the ability to better identify trends in the Company’s underlying business and perform related trend analysis;

•a better understanding of how management plans and measures the Company’s underlying business; and

•an easier way to compare the Company’s operating results against analyst financial models and operating results of competitors that supplement their GAAP results with non-GAAP financial measures.

The following are explanations of each of the adjustments that we incorporate into non-GAAP measures, as well as the reasons for excluding each of these individual items in the reconciliations of these non-GAAP financial measures:

Stock-based compensation expense consists of non-cash charges for the estimated fair value of unvested restricted share unit and stock option awards granted to employees. The Company believes that the exclusion of these charges provides for more accurate comparisons of its operating results to peer companies due to the varying available valuation methodologies, subjective assumptions, and the variety of award types. In addition, the Company believes it is useful to investors to understand the specific impact stock-based compensation expense has on its operating results.

Intangible amortization consists primarily of non-cash charges that can be impacted by, among other things, the timing and magnitude of acquisitions. The Company considers its operating results without these charges when evaluating its ongoing performance and forecasting its earnings trends, and therefore excludes such charges when presenting non-GAAP financial measures. The Company believes that the assessment of its operations excluding these costs is relevant to its assessment of internal operations and comparisons to the performance of its competitors.

Acquisition costs consist primarily of nonrecurring transaction costs, including integration and diligence activities.

Adjustment for taxes relates to the tax effects of the various adjustments that we incorporate into non-GAAP measures to provide a more meaningful measure on non-GAAP net income and certain adjustments related to non-recurring settlements of tax contingencies or other non-recurring tax charges, when applicable.

Other includes an immaterial amount of non-cash equity in loss for the Nextpower Arabia joint venture which is accounted for under the equity method investment accounting.

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