SolarEdge Technologies, Inc. (Nasdaq: SEDG), a global leader in
smart energy technology, today announced its financial results for
the second quarter ended June 30, 2023.
Second Quarter 2023 Highlights
- Record revenues of $991.3 million
- Record revenues from solar segment of $947.4 million
- GAAP gross margin of 32.0%
- Non-GAAP gross margin* of 32.7%
- Gross margin from solar segment of 34.7%
- Record GAAP operating income of $150.4 million
- Record non-GAAP operating income* of $191.0 million
- GAAP net income of $119.5 million
- Non-GAAP net income* of $157.4 million
- GAAP net diluted earnings per share (“EPS”) of $2.03
- Non-GAAP net diluted EPS* of $2.62
- Record 4.3 Gigawatts (AC) of inverters shipped
- 269 MWh of batteries shipped
“We are pleased with our results for the second quarter, in
particular our strong performance in Europe in both the residential
and commercial solar segments. While the U.S. residential solar
market is currently seeing some headwinds primarily related to
higher interest rates, we are navigating through this period by
leveraging our geographic and multi-segment strengths in the solar
markets and expect to benefit from the positive long-term outlook
for this sector,” said Zvi Lando, Chief Executive Officer of
SolarEdge.
Second Quarter 2023 Summary
The Company reported record revenues of $991.3 million, up 5%
from $943.9 million in the prior quarter and up 36% from $727.8
million in the same quarter last year.
Revenues from the solar segment were a record $947.4 million, up
4% from $908.5 million in the prior quarter and up 38% from $687.6
million in the same quarter last year.
GAAP gross margin was 32.0%, up from 31.8% in the prior quarter
and up from 25.1% in the same quarter last year.
Non-GAAP gross margin* was 32.7%, up slightly from 32.6% in the
prior quarter and up from 26.7% in the same quarter last year.
Gross margin from the solar segment was 34.7%, down slightly
from 35.0% in the prior quarter and up from 28.1% in the same
quarter last year.
GAAP operating expenses were $166.9 million, up 7% from $156.0
million in the prior quarter and up 14% from $146.6 million in the
same quarter last year.
Non-GAAP operating expenses* were $133.3 million, up 8% from
$123.6 million in the prior quarter and up 22% from $109.6 million
in the same quarter last year.
GAAP operating income was a record $150.4 million, up 4% from
$144.2 million in the prior quarter and up 318% from $36.0 million
in the same quarter last year.
Non-GAAP operating income* was a record $191.0 million, up 4%
from $183.8 million in the prior quarter and up 126% from $84.7
million in the same quarter last year.
GAAP net income was $119.5 million, down 14% from $138.4 million
in the prior quarter and up 692% from $15.1 million in the same
quarter last year.
Non-GAAP net income* was $157.4 million, down 10% from $174.5
million in the prior quarter and up 177% from $56.7 million in the
same quarter last year.
GAAP net diluted EPS was $2.03, down from $2.35 in the prior
quarter and up from $0.26 in the same quarter last year.
Non-GAAP net diluted EPS* was $2.62, down from $2.90 in the
prior quarter and up from $0.95 in the same quarter last year.
Cash used in operating activities was $88.7 million, compared
with $7.9 million generated from operating activities in the prior
quarter and $77.4 million generated from operating activities in
the same quarter last year.
As of June 30, 2023, cash, cash equivalents, bank deposits,
restricted bank deposits and marketable securities totaled $853.5
million, net of debt, compared to $1.01 billion on March 31,
2023.
Outlook for the Third Quarter 2023
The Company also provides guidance for the third quarter ending
September 30, 2023 as follows:
- Revenues to be within the range of $880 million to $920
million
- Non-GAAP gross margin** expected to be within the range of 28%
to 31%
- Non-GAAP operating income** to be within the range of $115
million to $135 million
- Revenues from the solar segment to be within the range of $850
million to $890 million
- Gross margin from the solar segment expected to be within the
range of 30% to 33%
*
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.
**
Non-GAAP gross margin and Non-GAAP
operating income are non-GAAP financial measures and 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 income 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 these results
at 4:30 p.m. ET on Tuesday, August 1, 2023. The call will be
available, live, to interested parties by dialing 877-888-4294. For
international callers, please dial +1 785-424-1881. 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, electric vehicle powertrains, and grid
services solutions. SolarEdge is online at www.solaredge.com
Use of Non-GAAP Financial Measures
The Company has presented certain non-GAAP financial measures in
this release, such as non-GAAP net income, non-GAAP net diluted
EPS, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP
operating income and non-GAAP gross margin from sale of solar
products. Generally, a non-GAAP financial measure is a numerical
measure of a company's performance, financial position, or cash
flows that either exclude or include amounts that are not normally
excluded or included in the most directly comparable measure
calculated and presented in accordance with generally accepted
accounting principles in the United States, or GAAP. Reconciliation
of each non-GAAP financial measure to the most directly comparable
GAAP financial measure can be found in the accompanying tables to
this release. These non-GAAP financial measures do not reflect a
comprehensive system of accounting, differ from GAAP measures with
the same captions and may differ from non-GAAP financial measures
with the same or similar captions that are used by other companies.
As such, these non-GAAP measures should be considered as a
supplement to, and not as a substitute for, or superior to,
financial measures calculated in accordance with GAAP.
The Non-GAAP measures are presented in this press release
because we believe that they provide investors with a means of
evaluating and understanding how the Company’s management evaluates
the company’s operating performance. The non-GAAP financial
measures in this earnings release may differ from similarly titled
measures used by other companies.
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995
This release contains forward looking statements which are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These 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;
financing and investment plans; dividend policy; competitive
position; industry and regulatory environment; general economic
conditions; potential growth opportunities; and the effects of
competition. These forward-looking statements are often
characterized by the use of words such as “anticipate,” “believe,”
“could,” “seek,” “estimate,” “expect,” “intend,” “may,” “plan,”
“potential,” “predict,” “project,” “should,” “will,” “would” or
similar expressions and the negative or plural of those terms and
other like terminology.
Forward-looking statements are only predictions based on our
current expectations and our projections about future events. These
forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause our actual results,
levels of activity, performance or achievements to be materially
different from those expressed or implied by the forward-looking
statements. Given these factors, you should not place undue
reliance on these forward-looking statements. These factors
include, but are not limited to, the matters discussed in the
section entitled “Risk Factors” of our Annual Report on Form 10-K
for the year ended December 31, 2022, filed on February 22, 2023
and our quarterly reports filed on Form 10-Q, Current Reports on
Form 8-K and other reports filed with the SEC. All information set
forth in this release is as of August 1, 2023. 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 (in thousands,
except per share data)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Unaudited
Revenues
$
991,290
$
727,774
$
1,935,179
$
1,382,854
Cost of revenues
673,985
545,132
1,317,748
1,021,254
Gross profit
317,305
182,642
617,431
361,600
Operating expenses:
Research and development
86,526
74,847
166,399
141,196
Sales and marketing
44,222
38,975
85,188
74,291
General and administrative
36,199
28,121
72,766
54,550
Other operating expense (income), net
—
4,687
(1,434
)
4,687
Total
operating expenses
166,947
146,630
322,919
274,724
Operating income
150,358
36,012
294,512
86,876
Financial income (expense), net
3,384
(14,311
)
27,058
(18,916
)
Other loss
—
—
(125
)
(844
)
Income before income taxes
153,742
21,701
321,445
67,116
Income taxes
34,232
6,617
63,557
18,909
Net income
$
119,510
$
15,084
$
257,888
$
48,207
SOLAREDGE TECHNOLOGIES INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except per
share data)
June 30, 2023
December 31, 2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
557,744
$
783,112
Marketable securities
493,176
241,117
Trade receivables, net of allowances of
$6,890 and $3,202, respectively
1,149,820
905,146
Inventories, net
984,194
729,201
Prepaid expenses and other current
assets
264,188
241,082
Total current assets
3,449,122
2,899,658
LONG-TERM ASSETS:
Marketable securities
435,800
645,491
Deferred tax assets, net
49,993
44,153
Property, plant and equipment, net
580,503
543,969
Operating lease right-of-use assets,
net
66,387
62,754
Intangible assets, net
43,656
19,929
Goodwill
42,332
31,189
Other long-term assets
28,772
18,806
Total long-term assets
1,247,443
1,366,291
Total assets
$
4,696,565
$
4,265,949
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Trade payables, net
434,602
459,831
Employees and payroll accruals
74,709
85,158
Warranty obligations
146,150
103,975
Deferred revenues and customers
advances
28,135
26,641
Accrued expenses and other current
liabilities
214,133
214,112
Total current liabilities
897,729
889,717
LONG-TERM LIABILITIES:
Convertible senior notes, net
625,914
624,451
Warranty obligations
342,437
281,082
Deferred revenues
204,693
186,936
Finance lease liabilities
42,208
45,385
Operating lease liabilities
47,046
46,256
Other long-term liabilities
16,349
15,756
Total long-term liabilities
1,278,647
1,199,866
COMMITMENTS AND CONTINGENT LIABILITIES
STOCKHOLDERS’ EQUITY:
Common stock of $0.0001 par value -
Authorized: 125,000,000 shares as of June 30, 2023 and December 31,
2022; issued and outstanding: 56,556,340 and 56,133,404 shares as
of June 30, 2023 and December 31, 2022, respectively
6
6
Additional paid-in capital
1,595,890
1,505,632
Accumulated other comprehensive loss
(77,432
)
(73,109
)
Retained earnings
1,001,725
743,837
Total stockholders’ equity
2,520,189
2,176,366
Total liabilities and stockholders’
equity
$
4,696,565
$
4,265,949
SOLAREDGE TECHNOLOGIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands,
except per share data)
Six Months Ended June
30,
2023
2022
Cash flows from operating activities:
Net income
$
257,888
$
48,207
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization
26,725
24,138
Loss (gain) from exchange rate
fluctuations
(23,214
)
20,398
Stock-based compensation expenses
78,200
71,181
Impairment of goodwill and intangible
assets
—
4,008
Deferred income taxes, net
(7,636
)
(1,092
)
Other items
4,783
11,396
Changes in assets and liabilities:
Inventories, net
(246,193
)
(93,348
)
Prepaid expenses and other assets
(33,285
)
(79,215
)
Trade receivables, net
(235,086
)
(235,316
)
Trade payables, net
(22,304
)
(7,339
)
Employees and payroll accruals
8,283
5,202
Warranty obligations
103,524
59,588
Deferred revenues and customers
advances
17,222
32,277
Accrued expenses and other liabilities,
net
(9,695
)
54,341
Net cash used in operating activities
(80,788
)
(85,574
)
Cash flows from investing activities:
Investment in available-for-sale
marketable securities
(124,138
)
(362,119
)
Proceed from sales and maturities of
available-for-sale marketable securities
86,813
126,287
Purchase of property, plant and
equipment
(84,075
)
(91,884
)
Business combinations, net of cash
acquired
(16,653
)
—
Purchase of intangible assets
(10,000
)
—
Investment in privately-held companies
(6,750
)
—
Proceed from government grants in relation
to capital expenditures
6,797
—
Other investing activities
3,552
1,783
Net cash used in investing activities
(144,454
)
(325,933
)
Cash flows from financing activities:
Tax withholding in connection with
stock-based awards, net
(8,811
)
(2,318
)
Payment of finance lease liability
(1,428
)
(1,374
)
Proceeds from secondary public offering,
net of issuance costs
—
650,526
Other financing activities
98
1,572
Net cash provided by (used in) financing
activities
(10,141
)
648,406
Increase (decrease) in cash and cash
equivalents
(235,383
)
236,899
Cash and cash equivalents at the beginning
of the period
783,112
530,089
Effect of exchange rate differences on
cash and cash equivalents
10,015
(21,454
)
Cash and cash equivalents at the end of
the period
557,744
745,534
SOLAREDGE TECHNOLOGIES INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited) (in
thousands, except per share data and percentages)
Reconciliation of GAAP to
Non-GAAP
Q2-22
Q3-22
Q4-22
Q1-23
Q2-23
Gross profit (GAAP)
$
182,642
$
222,001
$
261,047
$
300,126
$
317,305
Revenues from finance component
(146
)
(159
)
(174
)
(187
)
(202
)
Stock-based compensation
5,286
4,661
6,810
5,927
5,923
Amortization of stock-based compensation
capitalized in inventories
—
—
—
—
316
Disposal of assets related to Critical
Power
4,314
—
—
—
—
Amortization and depreciation of acquired
asset
2,184
2,064
961
1,515
872
Gross profit (Non-GAAP)
$
194,280
$
228,567
$
268,644
$
307,381
$
324,214
Gross margin (GAAP)
25.1
%
26.5
%
29.3
%
31.8
%
32.0
%
Revenues from finance component
0.0
%
0.0
%
0.0
%
0.0
%
0.0
%
Stock-based compensation
0.7
%
0.6
%
0.8
%
0.6
%
0.6
%
Amortization of stock-based compensation
capitalized in inventories
—
%
—
%
—
%
—
%
0.0
%
Disposal of assets related to Critical
Power
0.6
%
—
%
—
%
—
%
—
%
Amortization and depreciation of acquired
assets
0.3
%
0.2
%
0.1
%
0.2
%
0.1
%
Gross margin (Non-GAAP)
26.7
%
27.3
%
30.2
%
32.6
%
32.7
%
Operating expenses (GAAP)
$
146,630
$
137,594
$
266,210
$
155,972
$
166,947
Stock-based compensation - R&D
(16,819
)
(14,553
)
(16,854
)
(17,209
)
(17,272
)
Stock-based compensation - S&M
(7,047
)
(9,341
)
(7,928
)
(8,079
)
(7,822
)
Stock-based compensation - G&A
(7,922
)
(7,196
)
(7,015
)
(8,020
)
(7,948
)
Amortization and depreciation of acquired
assets - R&D
(300
)
(302
)
(301
)
(313
)
(289
)
Amortization and depreciation of acquired
assets - S&M
(226
)
(187
)
(173
)
(181
)
(235
)
Amortization and depreciation of acquired
assets - G&A
(5
)
(6
)
(4
)
(26
)
17
Assets impairment
(4,696
)
19
(114,473
)
—
—
Gain (loss) from assets sales and
disposal
—
2,303
(102
)
1,434
—
Acquisition costs
—
—
(350
)
—
(135
)
Operating expenses (Non-GAAP)
$
109,615
$
108,331
$
119,010
$
123,578
$
133,263
SOLAREDGE TECHNOLOGIES INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited) (in
thousands, except per share data and percentages)
Reconciliation of GAAP to
Non-GAAP
Q2-22
Q3-22
Q4-22
Q1-23
Q2-23
Operating income (loss) (GAAP)
$
36,012
$
84,407
$
(5,163
)
$
144,154
$
150,358
Revenues from finance component
(146
)
(159
)
(174
)
(187
)
(202
)
Disposal of assets related to Critical
Power
4,314
—
—
—
—
Stock-based compensation
37,074
35,751
38,607
39,235
38,965
Amortization of stock-based compensation
capitalized in inventories
—
—
—
—
316
Amortization and depreciation of acquired
assets
2,715
2,559
1,439
2,035
1,379
Assets impairment
4,696
(19
)
114,473
—
—
Loss (gain) from assets sales and
disposal
—
(2,303
)
102
(1,434
)
—
Acquisition costs
—
—
350
—
135
Operating income (Non-GAAP)
$
84,665
$
120,236
$
149,634
$
183,803
$
190,951
Financial income (expense), net
(GAAP)
$
(14,311
)
$
(33,025
)
$
56,101
$
23,674
$
3,384
Non cash interest expense
2,427
2,505
2,685
2,892
3,105
Unrealized losses (gains)
—
—
(170
)
—
—
Currency fluctuation related to lease
standard
(9,028
)
(1,116
)
749
(2,519
)
(2,107
)
Financial income (expense), net
(Non-GAAP)
$
(20,912
)
$
(31,636
)
$
59,365
$
24,047
$
4,382
Other income (loss) (GAAP)
$
—
$
7,533
$
186
$
(125
)
$
—
Gain from sale of investment in
privately-held company
—
(7,533
)
(186
)
—
—
Other income (loss) (Non-GAAP)
$
—
$
—
$
—
$
(125
)
$
—
Income tax benefit (expense)
(GAAP)
$
(6,617
)
$
(34,172
)
$
(30,295
)
$
(29,325
)
$
(34,232
)
Income tax adjustment
(389
)
(291
)
(7,186
)
(3,901
)
(3,735
)
Income tax benefit (expense)
(Non-GAAP)
$
(7,006
)
$
(34,463
)
$
(37,481
)
$
(33,226
)
$
(37,967
)
SOLAREDGE TECHNOLOGIES INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited) (in
thousands, except per share data and percentages)
Reconciliation of GAAP to
Non-GAAP
Q2-22
Q3-22
Q4-22
Q1-23
Q2-23
Net income (GAAP)
$
15,084
$
24,743
$
20,829
$
138,378
$
119,510
Revenues from finance component
(146
)
(159
)
(174
)
(187
)
(202
)
Disposal of assets related to Critical
Power
4,314
—
—
—
—
Stock-based compensation
37,074
35,751
38,607
39,235
38,965
Amortization of stock-based compensation
capitalized in inventories
—
—
—
—
316
Amortization and depreciation of acquired
assets
2,715
2,559
1,439
2,035
1,379
Assets impairment
4,696
(19
)
114,473
—
—
Loss (gain) from assets sales and
disposal
—
(2,303
)
102
(1,434
)
—
Acquisition costs
—
—
350
—
135
Non cash interest expense
2,427
2,505
2,685
2,892
3,105
Unrealized losses (gains)
—
—
(170
)
—
—
Currency fluctuation related to lease
standard
(9,028
)
(1,116
)
749
(2,519
)
(2,107
)
Gain from sale of investment in
privately-held company
—
(7,533
)
(186
)
—
—
Income tax adjustment
(389
)
(291
)
(7,186
)
(3,901
)
(3,735
)
Net income (Non-GAAP)
$
56,747
$
54,137
$
171,518
$
174,499
$
157,366
Net basic earnings per share
(GAAP)
$
0.27
$
0.44
$
0.37
$
2.46
$
2.12
Revenues from finance component
0.00
0.00
0.00
0.00
(0.01
)
Disposal of assets related to Critical
Power
0.08
—
—
—
—
Stock-based compensation
0.67
0.64
0.69
0.70
0.70
Amortization of stock-based compensation
capitalized in inventories
—
—
—
—
0.00
Amortization and depreciation of acquired
assets
0.04
0.05
0.02
0.03
0.03
Assets impairment
0.09
0.00
2.05
—
—
Loss (gain) from assets sales and
disposal
—
(0.04
)
0.00
(0.02
)
—
Acquisition costs
—
—
0.01
—
0.00
Non cash interest expense
0.04
0.04
0.05
0.05
0.05
Unrealized losses (gains)
—
—
(0.01
)
—
—
Currency fluctuation related to lease
standard
(0.16
)
(0.02
)
0.02
(0.05
)
(0.03
)
Gain from sale of investment in
privately-held company
—
(0.13
)
(0.01
)
—
—
Income tax adjustment
(0.01
)
(0.01
)
(0.13
)
(0.07
)
(0.07
)
Net basic earnings per share
(Non-GAAP)
$
1.02
$
0.97
$
3.06
$
3.10
$
2.79
SOLAREDGE TECHNOLOGIES INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited) (in
thousands, except per share data and percentages)
Reconciliation of GAAP to
Non-GAAP
Q2-22
Q3-22
Q4-22
Q1-23
Q2-23
Net diluted earnings per share
(GAAP)
$
0.26
$
0.43
$
0.36
$
2.35
$
2.03
Revenues from finance component
0.00
0.00
0.00
(0.01
)
(0.01
)
Disposal of assets related to Critical
Power
0.08
—
—
—
—
Stock-based compensation
0.62
0.59
0.64
0.62
0.62
Amortization of stock-based compensation
capitalized in inventories
—
—
—
—
0.00
Amortization and depreciation of acquired
assets
0.04
0.05
0.02
0.03
0.03
Assets impairment
0.08
0.00
1.91
—
—
Loss (gain) from assets sales and
disposal
—
(0.04
)
0.00
(0.02
)
—
Acquisition costs
—
—
0.01
—
0.00
Non cash interest expense
0.03
0.03
0.03
0.04
0.04
Unrealized losses (gains)
—
—
0.00
—
—
Currency fluctuation related to lease
standard
(0.15
)
(0.02
)
0.01
(0.04
)
(0.03
)
Gain from sale of investment in
privately-held company
—
(0.13
)
0.00
—
—
Income tax adjustment
(0.01
)
0.00
(0.12
)
(0.07
)
(0.06
)
Net diluted earnings per share
(Non-GAAP)
$
0.95
$
0.91
$
2.86
$
2.90
$
2.62
Number of shares used in computing net
diluted earnings per share (GAAP)
58,564,734
58,747,538
58,734,719
59,193,831
59,183,666
Stock-based compensation
904,781
784,228
1,237,266
939,571
986,527
Number of shares used in computing net
diluted earnings per share (Non-GAAP)
59,469,515
59,531,766
59,971,985
60,133,402
60,170,193
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230801762615/en/
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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