On August 20, Nextpower (NASDAQ:NXT) announced that the US Patent and Trademark Office awarded it patent number 12,712,292 for its NX PowerMerge electrical balance of systems technology. In the same release, the company said a new order from BUILD Renewables pushed the PowerMerge backlog past 2 gigawatts. Nextpower has long been known as a solar tracker company, the maker of the steel that tilts panels toward the sun. This patent and the backlog jump behind it are the clearest sign yet that its ambitions run well past that.
Wiring Its Way To Diversification
The patent covers electrical balance of systems technology, the wiring and connectors that gather power from thousands of solar strings and route it into a plant’s larger trunk lines. It is unglamorous infrastructure, but the order book behind it is growing fast. Cumulative NX PowerMerge bookings stood above 850 megawatts as of Nextpower’s July 30 earnings report, and by August 20 the new BUILD Renewables deal had helped push that backlog past 2 gigawatts. BUILD Renewables CEO Craig Sandeen credited the product’s safety, installation speed, and integration with Nextpower’s own tracker hardware, the kind of bundling edge a single-product rival cannot easily copy.
The broader business is accelerating alongside it. Fiscal first-quarter revenue reached $935 million, up from $881 million the prior quarter and $864 million a year earlier, while gross margin widened to 35.9% from 32.6% over that same stretch. Total backlog across the company now tops $5.5 billion. Nextpower has also bought its way into adjacent markets, closing the Prevalon energy storage deal and adding Apex Power and part of Zigor’s inverter business, with an agreement pending to bring in Zimmermann PV-Steel Group. Management raised its full-year outlook alongside those results, while holding the top US and global share in trackers.
Subsidies Still Do The Lifting
Not all of that profit is coming from the business Nextpower is building day to day. The July earnings report disclosed that roughly $99 million of fiscal first-quarter results came from IRA 45X manufacturing tax credits and tariff-related rebates, up from $82 million a year earlier and $47 million the quarter before. Against $165 million of GAAP net income, that is a large share of the bottom line tied to policy rather than product demand, and it has been growing rather than shrinking. If those credits are trimmed or expire, the earnings picture could look very different.
The expansion itself carries a cost too. Nextpower closed or announced four acquisitions in a short stretch: Prevalon, Apex Power, part of Zigor, and the pending Zimmermann deal, while also accelerating its push into power conversion equipment, a move management said adds roughly $50 million in incremental spending. Integrating four businesses at once while entering a new product category is a lot to execute cleanly, and the PowerMerge backlog itself is still young. A 2 gigawatt order book sounds large, but it is a recent jump from a standing start, and turning bookings into installed, paying projects takes years, not quarters.
What The Smart Money Sees
Hedge fund ownership of Nextpower climbed from 44 funds to 59 in the most recent quarter, a rise that suggests institutional conviction is building rather than fading. Short interest sits at 8.14% of float, a meaningful bet against the stock but not an extreme one. The stock trades at a forward price-to-earnings ratio of 17.92 as of September 21, a multiple that does not scream expectations of runaway growth. That combination, rising fund ownership against a still-modest earnings multiple, suggests the market has not yet fully priced in the eBOS and acquisition story.
The Real Test Still Ahead
Nextpower’s patent and its ballooning PowerMerge backlog give the company a genuine second growth engine beyond trackers, and the underlying financials back that up with rising revenue and wider margins. A meaningful piece of current profit still leans on tax credits and rebates that are not guaranteed to last, though, and the company is digesting four acquisitions and a new product line at the same time. Whether the bull case holds will show up in whether those PowerMerge bookings convert into installed, paying projects rather than backlog on paper.
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