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Income Taxes (Tables)

12 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

Summary of Income before Income Tax, Domestic and Foreign

The domestic and foreign components of income before income taxes were comprised of the following:

		Fiscal year ended March 31,
(In thousands)		2023				2022				2021
Domestic		$	117,115			$	45,259			$	161,323
Foreign			51,968				19,849				(3,294)
Total		$	169,083			$	65,108			$	158,029

Summary of Components of Income Tax Expense (Benefit)

The provision for (benefit from) income taxes consisted of the following:

		Fiscal year ended March 31,
(In thousands)		2023				2022				2021
Current:
Domestic		$	35,244			$	13,558			$	34,013
Foreign			18,238				5,974				2
Total			53,482				19,532				34,015
Deferred:
Domestic			(8,660)				(6,173)				54
Foreign			2,928				836				(388)
Total			(5,732)				(5,337)				(334)
Provision for income taxes		$	47,750			$	14,195			$	33,681

Summary of Effective Income Tax Rate Reconciliation

The reconciliation of the income tax expense (benefit) expected based on domestic statutory income tax rates to the expense (benefit) for income taxes included in the consolidated statements of operations is as follows:

		Fiscal year ended March 31,
(In thousands)		2023				2022				2021
Income taxes based on domestic statutory rates		$	35,508			$	13,673			$	33,186
Effect of tax rate differential			7,487				2,638				342
FDII Deduction			(3,235)				(1,583)				(2,951)
Foreign disregarded entities			11,020				—				—
Foreign tax deduction			(3,659)				—				—
Amount allocated to Non-controlling interest			(1,671)				—				—
Stock-based compensation			—				(424)				(4)
State			4,535				880				2,689
Guaranteed payment on Series A Preferred Units			(4,500)				(875)				—
Other			2,265				(114)				419
Provision for income taxes		$	47,750			$	14,195			$	33,681

Summary of Deferred Tax Assets and Liabilities

The components of deferred income taxes are as follows (in thousands):

		As of March 31,
		2023				2022
Deferred tax liabilities:
Fixed assets		$	(54)			$	(67)
Intangible assets			—				(437)
Others			(2,688)				(663)
Total deferred tax liabilities			(2,742)				(1,167)
Deferred tax assets:
Fixed assets			—				47
Stock-based compensation			2,222				342
Deferred revenue			—				3,967
Warranty reserve			—				2,461
Accrued professional fees			—				2,378
Provision for doubtful accounts			—				449
Net operating loss and other carryforwards			5,467				5,553
Investment in Nextracker LLC			249,377				—
Others			1,598				1,367
Total deferred tax assets			258,664				16,564
Valuation allowances			(1,528)				—
Total deferred tax assets, net of valuation allowances			257,136				16,564
Net deferred tax asset		$	254,394			$	15,397
The net deferred tax asset is classified as follows:
Long-term asset		$	254,767			$	15,828
Long-term liability			(373)				(431)
Total		$	254,394			$	15,397

Summary of Operating Loss Carryforwards

These tax losses and other carryforwards will expire at various dates as follows:

Expiration dates of deferred tax assets related to operating losses and other carryforwards
(In thousands)
2024 - 2029		$	—
2030 - 2035			437
2036 - Post			—
Indefinite			3,844
Total		$	4,281

Summary of Reconciliation of the Beginning and Ending Amount of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

		Fiscal year ended March 31,
(In thousands)		2023				2022				2021
Balance, beginning of fiscal year		$	440			$	465			$	410
Impact from foreign exchange rates fluctuation			(6)				(25)				55
Balance, end of fiscal year		$	434			$	440			$	465

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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

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Tabular disclosure of income before income tax between domestic and foreign jurisdictions.

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Tabular disclosure for tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities and other income tax contingencies. Includes, but is not limited to, interest and penalties, reconciliation of unrecognized tax benefits, unrecognized tax benefits that would affect the effective tax rate, tax years that remain subject to examination by tax jurisdictions, and information about positions for which it is reasonably possible that amounts unrecognized will significantly change within 12 months.

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