SolarEdge Announces Second Quarter 2024 Financial Results

SolarEdge Technologies, Inc., a global leader in smart energy technology, announced its financial results for the second quarter ended June 30, 2024.

Second Quarter 2024 Highlights

• Revenues of $265.4 million
• Revenues from solar segment of $241.2 million
• GAAP gross margin of negative 4.1%
• Non-GAAP gross margin of 0.2%, including 330 basis points of net IRA benefit
• Gross margin from solar segment of 1.3%
• GAAP operating loss of $160.2 million
• Non-GAAP operating loss of $114.3 million
• GAAP net loss of $130.8 million
• Non-GAAP net loss of $101.2 million
• GAAP net loss per share of $2.31
• Non-GAAP net loss per share of $1.79
• 873 Megawatts (AC) of inverters shipped
• 128 MWh of batteries for PV applications shipped

“We are encouraged by our second quarter top-line results, which saw sequential revenue growth of 30% and an 18% growth in sell-through of our solar products by our distributor customers,” said Zvi Lando, Chief Executive Officer of SolarEdge. “While we expect undershipping to continue in the third quarter, we believe the momentum in our underlying business and the actions we are taking to gain market share and address new growth segments will enable a return to higher revenue levels once inventories are cleared in the first half of 2025.”

Second Quarter 2024 Summary

• The Company reported revenues of $265.4 million, up 30% from $204.4 million in the prior quarter and down 73% from $991.3 million in the same quarter last year.
• Revenues from the solar segment were $241.2 million, up 27% from $190.1 million in the prior quarter and down 75% from $947.4 million in the same quarter last year.
• GAAP gross margin was negative 4.1%, compared to negative 12.8% in the prior quarter and compared to 32.0% in the same quarter last year.
• Non-GAAP gross margin was 0.2%, compared to non-GAAP gross margin of negative 6.5% in the prior quarter and compared to 32.7% in the same quarter last year.
• Gross margin from the solar segment was 1.3%, compared to negative 3.5% in the prior quarter and compared to 34.7% in the same quarter last year.
• GAAP operating expenses were $149.2 million, up 1% from $147.5 million in the prior quarter and down 11% from $166.9 million in the same quarter last year.
• Non-GAAP operating expenses were $114.8 million, up 5% from $109.2 million in the prior quarter and down 14% from $133.3 million in the same quarter last year.
• GAAP operating loss was $160.2 million, compared to a GAAP operating loss of $173.7 million in the prior quarter and compared to GAAP operating income of $150.4 million in the same quarter last year.
• Non-GAAP operating loss was $114.3 million, compared to Non-GAAP operating loss of $122.5 million in the prior quarter and compared to Non-GAAP operating income of $191.0 million in the same quarter last year.
• GAAP net loss was $130.8 million, compared to a GAAP net loss of $157.3 million in the prior quarter and compared to a GAAP net income of $119.5 million in the same quarter last year.
• Non-GAAP net loss was $101.2 million, compared to a Non-GAAP net loss of $108.6 million in the prior quarter and compared to a Non-GAAP net income of $157.4 million in the same quarter last year.
• GAAP net loss per share was $2.31, compared to a GAAP net loss per share of $2.75 in the prior quarter and compared to a GAAP net diluted earnings per share (“EPS”) of $2.03 in the same quarter last year.
• Non-GAAP net loss per share was $1.79, compared to a Non-GAAP net loss per share of $1.90 in the prior quarter and compared to a Non-GAAP net diluted EPS of $2.62 in the same quarter last year.
• Cash used in operating activities was $44.8 million, compared with $217.0 million used in operating activities in the prior quarter and $88.7 million used in operating activities in the same quarter last year.

As of June 30, 2024, cash, cash equivalents, bank deposits, restricted bank deposits, and marketable securities totalled $165.3 million, net of debt, compared to $316.3 million as of March 31, 2024.

In the second quarter of 2024, the company repurchased 247,468 shares of our common stock under our previously announced share repurchase program approved by the Board of Directors at an average price of $68.70 per share, for a total consideration of approximately $17 million.

Outlook for the Third Quarter 2024

The Company also provides guidance for the third quarter ending September 30, 2024, as follows:

• Revenues to be within the range of $260 million to $290 million
• Non-GAAP gross margin expected to be within the range of negative 3% to positive 1%, including approximately 560 basis points of net IRA manufacturing tax credit
• Non-GAAP operating expenses to be within the range of $111 million to $116 million
• Revenues from the solar segment are expected to be within the range of $245 million to $280 million
• Gross margin from the solar segment is expected to be within the range of 0% to 4% including approximately 590 basis points of net IRA manufacturing tax credit