SolarEdge Announces Third Quarter 2024 Financial Results

MILPITAS, Calif.–(BUSINESS WIRE)–SolarEdge Technologies, Inc. (Nasdaq: SEDG), a global leader in smart energy technology, today announced its financial results for the third quarter ended September 30, 2024.

Third Quarter 2024 Highlights

• Revenues of $260.9 million
• Revenues from solar segment of $247.5 million
• GAAP gross margin of negative 269.2%¹
• Non-GAAP gross margin² of negative 265.4%¹
• Gross margin from solar segment of negative 245.8%¹
• GAAP operating loss of negative $1.09 billion¹
• Non-GAAP operating loss² of $808.1 million¹
• GAAP net loss of negative $1.21 billion¹
• Non-GAAP net loss² of negative $874.3 million¹
• GAAP net loss per share of negative $21.1¹
• Non-GAAP net loss² per share of $15.3¹
• Impairment and write downs of $1.03 billion
• 850 Megawatts (AC) of inverters shipped
• 189 MWh of batteries for PV applications shipped

“As SolarEdge weathers this difficult period in the Company’s history, we are diligently pursuing three main priorities: financial stability, recapturing market share and refocusing on our core solar and storage opportunities,” said Ronen Faier, Interim Chief Executive Officer of SolarEdge. “We are grateful for our passionate and dedicated workforce and proud of our leadership in technological innovation, all of which I am confident will put the Company back on a profitable growth trajectory.”

Third Quarter 2024 Summary

The Company reported revenues of $260.9 million, down 2% from $265.4 million in the prior quarter and down 64% from $725.3 million in the same quarter last year.

Revenues from the solar segment were $247.5 million, up 3% from $241.2 million in the prior quarter and down 63% from $676.9 million in the same quarter last year.

GAAP gross margin was negative 269.2%, compared to negative 4.1% in the prior quarter and compared to 19.7% in the same quarter last year.

Non-GAAP gross margin² was negative 265.4%, compared to non-GAAP gross margin of 0.2% in the prior quarter and compared to 20.8% in the same quarter last year.

Gross margin from the solar segment was negative 245.8%, compared to 1.3% in the prior quarter and compared to 24.0% in the same quarter last year.

GAAP operating expenses were $382.9 million, compared to $149.2 million in the prior quarter and $159.5 million in the same quarter last year.

Non-GAAP operating expenses² were $116.3 million, up 1% from $114.8 million in the prior quarter and down 9% from $128.0 million in the same quarter last year.

GAAP operating loss was $1.09 billion, compared to a GAAP operating loss of $160.2 million in the prior quarter and a GAAP operating loss of $16.7 million in the same quarter last year.

Non-GAAP operating loss² was $808.1 million, compared to a Non-GAAP operating loss of $114.3 million in the prior quarter and Non-GAAP operating income of $23.1 million in the same quarter last year.

GAAP net loss was $1.21 billion, compared to a GAAP net loss of $130.8 million in the prior quarter and compared to a GAAP net loss of $61.2 million in the same quarter last year.

Non-GAAP net loss² was $874.3 million, compared to a Non-GAAP net loss of $101.2 million in the prior quarter and compared to a Non-GAAP net loss of $31.0 million in the same quarter last year.

GAAP net loss per share was $21.13, compared to a GAAP net loss per share of $2.31 in the prior quarter and compared to GAAP net loss per share of $1.08 in the same quarter last year.

Non-GAAP net loss per share² was $15.33, compared to a Non-GAAP net loss per share of $1.79 in the prior quarter and compared to a Non-GAAP net loss of $0.55 in the same quarter last year.

Cash used in operating activities was $63.9 million, compared with $44.8 million used in operating activities in the prior quarter and $40.6 million generated from operating activities in the same quarter last year.

As of September 30, 2024, cash, cash equivalents, bank deposits, restricted bank deposits and marketable securities totaled $53.3 million, net of debt, compared to $165.3 million as of June 30, 2024.

Impairment

During the third quarter, SolarEdge undertook an asset valuation analysis which resulted in a write down and impairment of various assets. In total, the write down and impairment amount was $1.03 billion.

______________________________________________________________________

1		Includes impairments and write offs
2		Non-GAAP financial measure. See “Non-GAAP Financial Measures” for additional information on non-GAAP financial measures and a reconciliation to the most comparable GAAP measures.

Outlook for the Fourth Quarter 2024

The Company also provides guidance for the fourth quarter ending December 31, 2024 as follows:

• Revenues to be within the range of $180 million to $200 million;
• Non-GAAP gross margin* expected to be within the range of negative 4% to 0%, including approximately 1,000 basis points of net IRA manufacturing tax credit;
• Non-GAAP operating expenses* to be within the range of $103 million to $108 million;
• Revenues from the solar segment to be within the range of $170 million to $190 million;
• Gross margin from the solar segment expected to be within the range of 0% to 3% including approximately 1,050 basis points of net IRA manufacturing tax credit.

*

Non-GAAP gross margin and Non-GAAP operating expenses are non-GAAP financial measures, and these forward-looking measures have not been reconciled to the most comparable GAAP outlook because it is not possible to do so without unreasonable efforts due to the uncertainty and potential variability of reconciling items, which are dependent on future events and often outside of management’s control and which could be significant. Because such items cannot be reasonably predicted with the level of precision required, we are unable to provide outlook for the comparable GAAP measures. Forward-looking estimates of Non-GAAP gross margin and Non-GAAP operating expenses are made in a manner consistent with the relevant definitions and assumptions noted herein and in our filings with the SEC.

Conference Call

The Company will host a conference call to discuss its results for the third quarter ended September 30, 2024 at 4:30 p.m. ET on Wednesday, November 6, 2024. The call will be available, live, to interested parties by dialing 800-343-4136. For international callers, please dial +1 203-518-9843. The Conference ID is SEDG. To avoid a delay in connecting to the call, please dial in 10 minutes prior to the start time. A live webcast will also be available in the Investors Relations section of the Company’s website at: http://investors.solaredge.com

A replay of the webcast will be available in the Investor Relations section of the Company’s web site approximately two hours after the conclusion of the call and will remain available for approximately 30 calendar days.

About SolarEdge

SolarEdge is a global leader in smart energy technology. By leveraging world-class engineering capabilities and with a relentless focus on innovation, SolarEdge creates smart energy solutions that power our lives and drive future progress. SolarEdge developed an intelligent inverter solution that changed the way power is harvested and managed in photovoltaic (PV) systems. The SolarEdge DC optimized inverter seeks to maximize power generation while lowering the cost of energy produced by the PV system. Continuing to advance smart energy, SolarEdge addresses a broad range of energy market segments through its PV, storage, EV charging, batteries, and grid services solutions. SolarEdge is online at www.solaredge.com

Use of Non-GAAP Financial Measures

To provide investors and others with additional information regarding SolarEdge’s results, SolarEdge has disclosed in this earnings release the following non-GAAP financial measures: non-GAAP operating income (loss), non-GAAP operating expenses, non-GAAP gross margin, non-GAAP net income (loss), and non-GAAP net earnings (loss) per share. SolarEdge has provided a reconciliation of each non-GAAP financial measure used in this earnings release to the most directly comparable GAAP financial measure below. These non-GAAP financial measures differ from GAAP in that they exclude stock-based compensation, amortization and impairment of acquired intangible assets, restructuring and impairment charges, acquisition, disposition and other items, certain litigation and other contingencies, amortization of debt issuance cost, non-cash interest expense and non-cash revenue recognized from significant financing component, certain foreign currency exchange rates, gains and losses on investments, income and losses from equity method investments and discrete items that impacted our GAAP tax rate. Our non-GAAP financial measures also reflect the application of our non-GAAP tax rate.

SolarEdge’s management uses these non-GAAP financial measures to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, for short- and long-term operating plans, to calculate bonus payments and to evaluate SolarEdge’s financial performance, the performance of its individual functional groups and the ability of operations to generate cash. Management believes these non-GAAP financial measures reflect SolarEdge’s ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in SolarEdge’s business, as they exclude charges and gains that are not reflective of ongoing operating results. Management also believes that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating SolarEdge’s operating results and future prospects from the same perspective as management and in comparing financial results across accounting periods.

The use of non-GAAP financial measures has certain limitations because they do not reflect all items of income and expense that affect SolarEdge’s operations. These non-GAAP financial measures should be considered in addition to, not as a substitute for or in isolation from, measures prepared in accordance with GAAP and should not be considered measures of SolarEdge’s liquidity. Further, these non-GAAP measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore comparability may be limited. Management encourages investors and others to review SolarEdge’s financial information in its entirety and not rely on a single financial measure.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

Statements contained in this press release contains may contain forward-looking statements that are based on our management’s expectations, estimates, projections, beliefs and assumptions in accordance with information currently available to our management. This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include information, among other things, concerning our possible or assumed future results of operations, future demands for solar energy solutions, business strategies, technology developments, new products and services, financing and investment plans; dividend policy; competitive position, industry and regulatory environment, general economic conditions; potential growth opportunities; cancellations and pushouts of existing backlog; installation rates; goodwill impairment; and the effects of competition. Forward-looking statements include statements that are not historical facts and can be identified by terms such as “anticipate,” “believe,” “could,” “seek,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or similar expressions and the negatives of those terms.

Forward-looking statements inherently involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Given these uncertainties, you should not place undue reliance on forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this release. Important factors that could cause actual results to differ materially from our expectations include, but are not limited to: future demand for renewable energy including solar energy solutions; our ability to forecast demand for our products accurately and to match production to such demand as well as our customers’ ability to forecast demand based on inventory levels; macroeconomic conditions in our domestic and international markets, as well as inflation concerns, rising interest rates, and recessionary concerns; changes, elimination or expiration of government subsidies and economic incentives for on-grid solar energy applications; changes in the U.S. trade environment; federal, state, and local regulations governing the electric utility industry with respect to solar energy; changes in tax laws, tax treaties, and regulations or the interpretation of them, including the Inflation Reduction Act; the retail price of electricity derived from the utility grid or alternative energy sources; interest rates and supply of capital in the global financial markets in general and in the solar market specifically; competition, including introductions of power optimizer, inverter and solar photovoltaic system monitoring products by our competitors; developments in alternative technologies or improvements in distributed solar energy generation; historic cyclicality of the solar industry and periodic downturns; product quality or performance problems in our products; shortages, delays, price changes, or cessation of operations or production affecting our suppliers of key components; our dependence upon a small number of outside contract manufacturers and limited or single source suppliers; capacity constraints, delivery schedules, manufacturing yields, and costs of our contract manufacturers and availability of components; delays, disruptions, and quality control problems in manufacturing; existing and future responses to and effects of pandemics, epidemics, or other health crises; disruption in our global supply chain and rising prices of oil and raw materials as a result of the conflict between Russia and Ukraine; our customers’ financial stability and our ability to retain customers; our ability to retain key personnel and attract additional qualified personnel; performance of distributors and large installers in selling our products; consolidation in the solar industry among our customers and distributors; our ability to manage effectively the growth of our organization and expansion into new markets and integration of acquired businesses; our ability to recognize expected benefits from restructuring plans; any unauthorized access to, disclosure, or theft of personal information or unauthorized access to our network or other similar cyber incidents; disruption to our business operations due to the evolving state of war in Israel and political conditions related to the Israeli government’s plans to significantly reduce the Israeli Supreme Court’s judicial oversight; our dependence on ocean transportation to timely deliver our products in a cost-effective manner; fluctuations in global currency exchange rates; the impact of evolving legal and regulatory requirements, including emerging environmental, social and governance requirements; changes to net metering policies or the reduction, elimination or expiration of government subsidies and economic incentives for on-grid solar energy applications; federal, state, and local regulations governing the electric utility industry with respect to solar energy; changes in tax laws, tax treaties, and regulations or the interpretation of them, including the Inflation Reduction Act; changes in the U.S. trade environment, including the imposition of import tariffs; business practices and regulatory compliance of our raw material suppliers; our ability to maintain our brand and to protect and defend our intellectual property; the impairment of our goodwill or other intangible assets; volatility of our stock price; our customers’ financial stability, creditworthiness, and debt leverage ratio; our ability to retain key personnel and attract additional qualified personnel; our ability to effectively design, launch, market, and sell new generations of our products and services; our ability to retain, and events affecting, our major customers; our ability to service our debt; future goodwill impairments; and the other factors set forth under “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, filed on February 26, 2024, in subsequent Quarterly Reports on Form 10Q and in other documents we file from time to time with the SEC that disclose risks and uncertainties that may affect our business. The preceding list is not intended to be an exhaustive list of all of our forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Statements in this press release speak only as of the date they were made. The Company undertakes no duty or obligation to update any forward-looking statements contained in this release, whether as a result of new information, future events or changes in its expectations or otherwise, except as may be required by applicable law, regulation or other competent legal authority.

SOLAREDGE TECHNOLOGIES INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (in thousands, except per share data)
		Three Months Ended September 30,								Nine Months Ended September 30,
		2024				2023				2024				2023
		Unaudited								Unaudited
Revenues		$	260,903			$	725,305			$	730,707			$	2,660,484
Cost of revenues			963,229				582,488				1,470,189				1,900,236
Gross profit (loss)			(702,326	)			142,817				(739,482	)			760,248
Operating expenses:
Research and development			70,372				80,082				214,999				246,481
Sales and marketing			37,427				40,351				116,316				125,539
General and administrative			41,212				39,110				111,085				111,876
Other operating expense (income), net			233,929				—				237,271				(1,434	)
Total operating expenses			382,940				159,543				679,671				482,462
Operating income (loss)			(1,085,266	)			(16,726	)			(1,419,153	)			277,786
Financial income (expense), net			5,558				(7,901	)			(2,371	)			19,157
Other income (loss), net			(3,928	)			(484	)			14,623				(609	)
Income (loss) before income taxes			(1,083,636	)			(25,111	)			(1,406,901	)			296,334
Income taxes			(121,108	)			(36,065	)			(85,109	)			(99,622	)
Net loss from equity method investments			(577	)			—				(1,440	)			—
Net income (loss)		$	(1,205,321	)		$	(61,176	)		$	(1,493,450	)		$	196,712

SOLAREDGE TECHNOLOGIES INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except per share data)
		September 30, 2024				December 31, 2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	303,904			$	338,468
Marketable securities			374,869				521,570
Trade receivables, net of allowances of $41,501 and $16,400, respectively			239,408				622,425
Inventories, net			798,383				1,443,449
Prepaid expenses and other current assets			401,551				378,394
Total current assets			2,118,115				3,304,306
LONG-TERM ASSETS:
Marketable securities			56,041				407,825
Deferred tax assets, net			—				80,912
Property, plant and equipment, net			423,905				614,579
Operating lease right-of-use assets, net			43,088				64,167
Intangible assets, net			11,169				35,345
Goodwill			51,875				42,996
Other long-term assets			112,201				37,601
Total long-term assets			698,279				1,283,425
Total assets			2,816,394				4,587,731
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Trade payables, net		$	94,730			$	386,471
Employees and payroll accruals			70,120				76,966
Warranty obligations			163,561				183,047
Deferred revenues and customers advances			27,367				40,836
Accrued expenses and other current liabilities			202,134				205,911
Convertible senior notes, net			345,900				—
Total current liabilities			903,812				893,231
LONG-TERM LIABILITIES:
Convertible senior notes, net			329,614				627,381
Warranty obligations			315,343				335,197
Deferred revenues			226,770				214,607
Finance lease liabilities			39,197				41,892
Operating lease liabilities			31,293				45,070
Other long-term liabilities			13,999				18,444
Total long-term liabilities			956,216				1,282,591
COMMITMENTS AND CONTINGENT LIABILITIES
STOCKHOLDERS’ EQUITY:
Common stock of $0.0001 par value – Authorized: 125,000,000 shares; issued: 57,935,436 shares at September 30, 2024 and 57,123,437 shares at December 31, 2023; outstanding: 57,182,072 shares at September 30, 2024 and 57,123,437 shares at December 31, 2023.			6				6
Additional paid-in capital			1,779,212				1,680,622
Treasury stock, at cost; 753,364 shares held			(50,315	)			—
Accumulated other comprehensive loss			(57,253	)			(46,885	)
Retained earnings (Accumulated deficit)			(715,284	)			778,166
Total stockholders’ equity			956,366				2,411,909
Total liabilities and stockholders’ equity		$	2,816,394			$	4,587,731

SOLAREDGE TECHNOLOGIES INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands, except per share data)
		Nine Months Ended September 30,
		2024				2023
Cash flows from operating activities:
Net income (loss)		$	(1,493,450	)		$	196,712
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization			47,215				42,019
Provision to write down inventories to net realizable value			638,966				20,674
Loss on impairment and disposal of property, plant and equipment			206,620				—
Stock-based compensation expenses			112,818				115,015
Impairment of goodwill and intangible assets			24,725				—
Deferred income taxes, net			79,831				(18,199	)
Gain from repurchasing of convertible notes			(15,455	)			—
Loss (gain) from exchange rate fluctuations			8,243				(8,170	)
Other items			10,299				6,915
Changes in assets and liabilities:
Trade receivables, net			379,214				(40,011	)
Inventories, net			15,858				(458,475	)
Prepaid expenses and other assets			(38,223	)			19,822
Operating lease right-of-use assets, net			12,286				12,323
Trade payables, net			(284,255	)			(53,996	)
Warranty obligations			(39,294	)			130,863
Deferred revenues and customers advances			1,253				18,580
Operating lease liabilities			(11,881	)			(11,945	)
Accrued expenses and other liabilities, net			19,574				(12,330	)
Net cash used in operating activities			(325,656	)			(40,203	)
Cash flows from investing activities:
Investment in available-for-sale marketable securities			(200,919	)			(214,516	)
Proceeds from maturities of available-for-sale marketable securities			632,866				191,810
Proceeds from sales of available-for-sale marketable securities			70,642				2,807
Purchase of property, plant and equipment			(95,905	)			(130,024	)
Business combinations, net of cash acquired			(10,417	)			(16,653	)
Purchase of intangible assets			(10,000	)			(10,600	)
Disbursements for loans receivables			(37,500	)			(13,000	)
Investment in privately-held companies			(25,742	)			(8,000	)
Other investing activities			(4,270	)			9,989
Net cash provided by (used in) investing activities			318,755				(188,187	)
Cash flows from financing activities:
Repurchase of common stock			(50,315	)			—
Partial repurchase of Notes 2025			(267,900	)			—
Proceeds from issuance of Notes 2029, net of issuance costs			329,214				—
Capped call transactions related to Notes 2029			(28,342	)			—
Tax withholding in connection with stock-based awards, net			(592	)			(9,267	)
Other financing activities			(1,938	)			(2,038	)
Net cash used in financing activities			(19,873	)			(11,305	)
Effect of exchange rate differences on cash and cash equivalents			(7,790	)			7,705
Decrease in cash and cash equivalents			(34,564	)			(231,990	)
Cash and cash equivalents at the beginning of the period			338,468				783,112
Cash and cash equivalents at the end of the period		$	303,904			$	551,122

Contacts

Investor Contacts
SolarEdge Technologies, Inc.

JB Lowe, Head of Investor Relations

investors@solaredge.com

Sapphire Investor Relations, LLC

Erica Mannion or Michael Funari

investors@solaredge.com

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