Jon Windham: Great. Thank — yeah, thanks for that. I’ll take the full Flex accounting questions offline. I won’t bore everyone. Thanks again.
Operator: Our next question comes from Mark Strouse with JPMorgan. Please proceed.
Mark Strouse: Good afternoon. And thank you very much for taking the questions. I’ll echo my congrats as well. So pretty impressive upside to the guidance with just — just a quarter to go in the year. I’m curious, if you kind of talking about project movements forward and backwards. If there weren’t any sizable project pull forwards into the March quarter that you should call out or is this kind of just broader market acceleration?
Howard Wenger: It really is this broader market acceleration, Mark. As we noted in our previous call, we have a lot of backlog. Our backlog has grown over call quarter-over-quarter, we’re over $3 billion significantly. And so customers in the strength of the market particularly in the U.S., as we noted, 78% of our revenue came from the U.S. in the quarter, which is higher than normal, it can fluctuate quarter-to-quarter, and we expect it to normally be two-thirds, one-third, but there are some pull ins in the U.S., but it’s not significantly changing our demand picture at all. Our backlog grew in the quarter. So there’s really nothing significant. One thing that Dan noted in his remarks is that there are simply more developers and more EPCs. And we believe we’re doing a good job with our team, winning share of the business.
So the strength is there, the demand strength is there. And things aren’t slowing down because of IRA in anyway. So that’s where we’re at on balance.
Mark Strouse: Okay. I’ll take the rest offline. Thank you, Howard.
Howard Wenger: Thanks, Mark.
Operator: Our next question comes from Julien Smith with Bank of America. Please proceed.
Julien Smith: Hey. Indeed, really very well done. Impressive indeed. Look, thank you guys very much. Appreciate it. So with respect to the 45X, just coming back to what we’re seeing executive percentage. If I can ask that question slightly differently rather than what the percentages. How do you think about what a run rate might look like for instance, like how do you think about what that would trend into the ’25 period. And is that fully reflective of all the various aspects of 45X as you think about torque tube and beyond?
Daniel Shugar: Hi, Julien. Thanks for your question. Let me just start with the operational aspect and then Dave will speak to the financial. Nextracker is very, very serious about scaling off domestic manufacturing in the states and our other core markets. And we hit this early. And last summer, we announced 25 gigawatts of contracted capacity across the United States. We’ve operationalize that, we’ve had six public factory openings. We have over a dozen factories shipping finished goods, all across the United States. And we’re going to be in a position to be any customer requests for domestic manufacturer content. And be able to arbitrage any problem with congestion at a poor for — there is a problem in logistics route or currency or natural disaster what have you.
So we’re really focused on being able to operationalize that with both the supply chain. And we’re achieving great success with our partners. In a number of cases, we’ve gone back to some of these factories we’ve started upwards with our partners to double or greater increased capacity in those factories. Dave?
David Bennett: The only thing to add would be is as I indicated there is a lot of moving parts with what quantifies the fiscal ’24 Q4 amount and that isn’t necessarily a good indicator for what we will be given the ramp, given the one time nature of the cumulative catch up. As we’ve been saying, we bring the demand, it’s a meaningful partnership with our — with our vendors and we will include that in our fiscal ’25 guidance, so it will be transparent you see the uplift to our profitability for fiscal ’25.
Julien Smith: Both of you guys, thank you very much. I appreciate it. And then just related to on the mix on international, you guys were talking about one-third still. Obviously, some real success abroad, how do you think about what that proportion could trend as you think about year-over-year in terms of recognizing that revenue. And then related, how do you think about the ongoing expansion in gross margin, does that start to top out as you think about that international mix really getting going here, if you will.
Howard Wenger: Thanks, Julien. This is Howard. So it’s a big world, solar works just about everywhere, we had our first project in Sweden. But typically thought it was a great solar market. So, so, but the United States remains the biggest market outside of China in the world. And certainly for Nextracker, it’s going to continue to be, the biggest market for some time. But unbalanced there are more locations around the world that we can and we are driving towards increasing that one-third share of our total business because we think that’s healthy for the company and provides us more levers for growth. And we’re really just getting started in many countries around the world. So as far as margin on that front, we have seen that it can be more price sensitive.
