What drove NXT's EPS surge in Q1 2025?

Nextracker's (NXT) EPS surge in Q1 2025 can be attributed to several key factors:

1. **Revenue Growth**: Nextracker reported a revenue of $719.9 million in Q1 2025, surpassing the FactSet consensus of $616.7 million. This significant revenue outperformance indicates a strong market demand for the company's products and services.
2. **Operating Margin Improvement**: The company's adjusted EBITDA reached a record $175 million, marking a 109% year-on-year increase. This substantial increase in profitability is a result of effective cost management and operational efficiency.
3. **Gross Margin Recovery**: Nextracker's gross margin recovered to 22.1% in Q1 2025, up from 20.9% in the same quarter last year. This improvement suggests that the company is better positioned to absorb cost fluctuations and maintain profitability.
4. **Free Cash Flow Enhancement**: The free cash flow margin for Nextracker improved to 19.9% in Q1 2025, up from 8.8% in the same quarter last year. This indicates that the company is generating sufficient cash to support its operations and invest in growth opportunities.

In conclusion, Nextracker's EPS surge in Q1 2025 is primarily driven by revenue growth, operating margin improvement, gross margin recovery, and enhanced free cash flow. These factors collectively contribute to the company's robust financial performance and profitability.