The Exchanges

Q so, as you're thinking about then translating these innovations to deployment, where you're really deploying at scale at a global level, can you talk a little bit about your strategy around manufacturing? How did you think in the beginning about what to manufacture or assemble on your own versus rely on kind of contracts and suppliers, and how has that changed over time, and how do you do things now?

A We have a similar approach as some other technology companies like Apple. We really focus on where we can design and product position, strategy, customers, and so forth, rather than trying to run a world-class, you know, manufacturing facility, which is its own animal and skill set. What we do is partner with companies, and then that allows tremendous opportunities to geographically position some of the supply chain activities In the more logical places. For example, uh, two years ago, we announced a major manufacturing facility with our partner, JM Steel, physically on the campus of the newest steel mill in the United States, which is in Sinton, Texas. It's actually operated by Steel Dynamics. It's a three million ton steel mill, and they do coating. And so literally on their campus, like about a mile from the actual mill, We bring, you know, master coils of steel in that are then cut down and then made into some of our components by our partner, GM Steel, which operates dozens of steel facilities around, around the world. Versus Asset and Extracker, insourcing and doing all that activity and trying to manage all that, we're better focused on the other aspects of creating value that, that I've mentioned. And so that type of model has served us extremely well. It's very capital efficient. But, you know, on some areas of developing key manufacturing technology, that's where we'v…

AI assessment note: “What we do is partner with companies... For example... with our partner, JM Steel”

Q on the other side. That's super cool. Um, let's switch gears for just a second and talk a little bit about one of your specific newer and most exciting products, which you've already mentioned, which is your NX Horizon Hale Pro product. So I would love to just get a little bit more around the story here. What was the genesis of creating this as a product that you offer?

A I mentioned our system's balanced, and it's individually activated, and it, it communicates with a wireless mesh network. So our system moves very quickly, and we can command this very, very rapidly, and then what we started doing is saying, like, okay, we sent a command. Well, how good was the system in responding to it? And then we started testing that, and training operators, and then simplifying the Graphical user interface, the GUI, and then doing periodic tests with customers to make sure that the efficacy of this thing really worked. So we started rolling out this program and also meeting with underwriters and brought in arm in arm with our customers in some cases and really helping socialize this with the insurance folks so that to help reduce rate increases or in some cases lower rates that, that had been increased. So we, we were all in on this program. I personally involved, was involved with a standing weekly meeting on this just to really support the team, make sure it was adequately resourced. Then we saw, you know, an opportunity, some customers like, hey, that's great. Uh, you've radically reduced, you know, the severity of, of the danger. We want to take it to the next step. And so then we introduced a new product where instead of going to 60 degrees, it actually went all the way to 75 degrees. We, we announced that. That's being shipped. I physically was on a …

AI assessment note: “Then we saw, you know, an opportunity... We want to take it to the next step.”

Q particularly sort of first-of-a-kind technology risks. So do you have, like, a long-standing relationship with insurers? Do you, did you get a sense very quickly on, like, how much data they needed to see to get comfortable, like, changing insurance costs for these installations? Were your customers involved here? I would just be curious to understand a little bit more about your interactions with the insurance side of the industry.

A We did both. Uh, we were directly involved in some underwriters and some insurance companies, and we also had customer requests to sort of go arm, arm in arm with them and talk about the measures we were, we were doing. One of the things they asked for the insurance industry is they're like, okay, that's great. We understand, you know, conceptually how this works. Can you show us sort of forensically times your tech was deployed and near misses? So in other words, oh, there was a hail event at this site. Your stuff was deployed. There's no claims, and we thought that was, that was a good ask. So we started implementing like, okay, let's start really collecting information about how often this thing is deployed, and then what actually happened on the site, and we've been supporting that ask, and there are some cases where we're aware that customers were able to reduce their insurance costs by really good documentation on this stuff. It's still Early days. The insurance industry has had some big payouts, and then they want to, you know, basically see how this stuff evolves over time. But we're confident that the right engineering, the right operations, the right, and then focus on asset management that's, you know, really operationally excellent to make sure that the tech is as simple as it can be, the operators are well-trained stuff. When these events come along, that the right…

AI assessment note: “We were directly involved in some underwriters and some insurance companies”

Q I have to ask one more really quick lightning round question, which is just, with the rise of AI and the future of solar and climate change as an increasingly dire issue, any predictions about what the future holds for solar as an industry and for an X-Tracker within that picture?

A Eight years ago, nine years ago, we were able to use AI and machine learning in our adaptive tracking software. So we've been able to incorporate that in our products. You know, I think there's an opportunity for companies to use some of those technologies to make their businesses more efficient, you know, in contract review and things like that. Um, probably, you know, coding, uh, computer coding, things like that. But, you know, we're already seeing significant increased demand for solar, for AI data centers. You know, there's this narrative out there that, like, oh, hey, this twenty-four-seven load, you know, it needs, like, baseload power. I don't really fully agree with that. I think there's some cases where, where that could be true, but generally speaking, you know, if you look at the difference between the peak in a utility, in the U.S., there's 3000 utilities, and overseas, there's a lot more, obviously, but if you look at, like, hey, here's the, the peak in the middle of the day, versus five or six In the afternoon, depending on where it's happening, and three o'clock in the morning, there's a huge difference in those. We've seen energy storage, you know, go from one hours to two hours to four hours. You know, are we going to be six hours in a few years? Probably. And so, if you look at solar plus storage, that gets you really far down the road in terms of, like, addr…

AI assessment note: “we're already seeing significant increased demand for solar, for AI data centers.”

Q acquisitions, some of the other sort of traditional exit pathways. So can you talk a little bit about your exit moment for the company, and was it Obvious and easy to kind of do an IPO, or was, was it a little bit more challenging than that, or any advice you have as folks are trying to think about how to set themselves up for success for that exit moment?

A I think the main thing if, you know, I were to give advice is to basically build a plan that you can hit despite unknowns when you launch. Don't over-promise and under-deliver. Do the opposite. It doesn't mean you sandbag. What it means is that you can set An aggressive plan, but that, um, you have to assume that some things are going to be harder than, or take longer than, you know, you might want in an ideal world. When we went to go public, the market had been pretty much closed for five or six months. I don't think there was a single IPO, or certainly not a big one. And we, we, uh, we had a very successful IPO. It was a little bit over two years ago now, and it was a good experience when we did it, and we've really focused on Making sure that we're able to achieve expectations we create out there. What's primary is having the right mission, vision, and culture to be able to, like, inspire a team and really focus on what the customer really needs at the end of the day. So, focusing on a culture where, for us, it's really about innovation that delivers tangible value for the customers, and then focusing on, well, what are the customer needs? Being able to execute on that, With hyper-focus to make sure that what you've promised, you actually do. And then having the right team to basically be able to do that. The company's not a family. It's a team.

AI assessment note: “When we went to go public, the market had been pretty much closed”

Q a customer, for example, comes to you with an idea, like, is this happening on a daily basis? Does that happen every so often? How do you know which ideas are the ones to focus on, and how does the, the sort of initial conversation go between you and the customers who have something that you think might be the kernel of a great idea for a product for you?

A Yeah, and we don't have to overly constrain how innovation happens or customer feedback happens or whatever. I mean, yesterday I was on a, A job site with a customer. We were doing quarterly business review with one of the leading EPCs in the space, and we had a review in the room. We asked them, what's going well? We asked them, what are the opportunities for improvement? And then we hyper focus on those and then try to really listen to those. And then we actually go out in the field and look at, at certain products. And a lot of, there were a number of specific things that come out of each one of these engagements. Not all things, you know, come from innovations. Come, I mean, at Apple, no one was asking for, you know, the iPod or, or some of the features in the iPhone. Similarly, at NextTracker, when we came out with our adaptive tracking software, TrueCapture, no one was asking for that. So we knew that there were opportunities to get more energy out of the systems. And let me go way back here. So when I was a young engineer in my twenties, I was actually working at PG&E at the time. And I had the opportunity to work in, at the time, the solar, a new technology program. We did some public engagement. We have this, we built this little solar trailer, and we go, I physically brought it to a, like a fair in the, in, on a Sunday afternoon, and we're out there, and we're making …

AI assessment note: “We asked them, what's going well? We asked them, what are the opportunities for improvement?”