The accompanying notes are an integral part of the consolidated financial statements.
The accompanying notes are an integral part of the consolidated financial statements.
The accompanying notes are an integral part of the consolidated financial statements.
The accompanying notes are an integral part of the consolidated financial statements.
The accompanying notes are an integral part of the consolidated financial statements.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share and per share data)
NOTE 1:-GENERAL
a.SolarEdge Technologies, Inc. (the “Company”) and its subsidiaries design, develop, and sell an intelligent inverter solution designed to maximize power generation at the individual photovoltaic (“PV”) module level while lowering the cost of energy produced by the solar PV system and providing comprehensive and advanced safety features. The Company’s products consist mainly of (i) power optimizers designed to maximize energy throughput from each and every module through constant tracking of Maximum Power Point individually per module, (ii) inverters which invert direct current (DC) from the PV module to alternating current (AC) including the Company’s future ready energy hub inverter which supports, among other things, connection to a DC- coupled battery for backup capabilities, (iii) a remote cloud-based monitoring platform, that collects and processes information from the power optimizers and inverters to enable customers and system owners, to monitor and manage the solar PV system (iv) a storage and backup solution that is used to increase energy independence and maximize self-consumption for homeowners by utilizing a battery, either the energy bank battery introduced by the Company or a battery that is sold separately by third party manufacturers, to store and supply power as needed, and (v) additional smart energy management solutions.
The Company and its subsidiaries sell products worldwide through large distributors, electrical equipment wholesalers, as well as directly to large solar installers and engineering, procurement and construction firms.
b.The Company has expanded its activity to other areas of smart energy technology organically and through acquisitions. The Company now offers a variety of energy solutions, which include lithium-ion cells, batteries and energy storage systems (“Energy Storage”), full powertrain kits for electric vehicles, or EVs (“e-Mobility”), uninterrupted power supply solutions or UPS (“Critical Power”), as well as automated machines for industrial use (“Automation Machines”).
c.Recently issued and adopted pronouncements:
In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (ASU 2020-06), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. This guidance also eliminates the treasury stock method to calculate diluted earnings per share for convertible instruments and requires the use of the if-converted method. ASU 2020-06 will be effective for fiscal years beginning after December 15, 2021, with early adoption permitted. Effective January 1, 2021, the Company early adopted ASU 2020-06 using the modified retrospective approach. Adoption of the new standard resulted in an increase of retained earnings in an amount of $2,884, a decrease of an additional paid-in capital in an amount of $36,336, an increase of convertible senior notes, net, in an amount of $45,282 and a decrease of deferred tax liabilities, net, in an amount of $11,830. Interest expense recognized in future periods will be reduced as a result of accounting for the convertible debt instrument as a single liability measured at its amortized cost. The impact of adoption of this standard on the Company’s earnings per share was immaterial.
In January 2020, the FASB issued ASU 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815), which clarifies the interaction between the accounting for equity securities in Topic 321, the accounting for equity method investments in Topic 323, and the accounting for certain forward contracts and purchased options in Topic 815. The guidance is effective for interim and annual periods beginning after December 15, 2020. Effective January 1, 2021, the Company adopted this standard on a prospective basis. The impact of adoption of this standard on the Company’s consolidated financial statements was immaterial.
SOLAREDGE TECHNOLOGIES, INC.
AND ITS SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share and per share data)
NOTE 1:-GENERAL (Cont.)
d.Basis of Presentation:
The unaudited condensed consolidated financial statements and accompanying notes have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). In management’s opinion, the unaudited condensed consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. The Company’s interim period results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year.
The significant accounting policies applied in the annual consolidated financial statements of the Company as of December 31, 2020, contained in the Company’s Annual Report on Form 10-K/A filed with the SEC on February 19, 2021, have been applied consistently in these unaudited interim condensed consolidated financial statements, except for the adoption of ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (Topic 470) (see Note 7).
e.Use of estimates:
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses and related disclosures in the accompanying notes. The duration, scope and effects of the ongoing COVID-19 pandemic, government and other third-party responses to it, and the related macroeconomic effects, including to the Company’s business and the business of the Company’s suppliers and customers are uncertain, rapidly changing and difficult to predict. As a result, the Company’s accounting estimates and assumptions may change over time in response to this evolving situation. Such changes could result in future impairments of goodwill, intangibles, long-lived assets, inventories, incremental credit losses on receivables and AFS debt securities, or an increase in the Company’s insurance liabilities as of the time of a relevant measurement event.
f.Concentrations of supply risks:
The Company depends on two contract manufacturers and several limited or single source component suppliers. Reliance on these vendors makes the Company vulnerable to possible capacity constraints and reduced control over component availability, delivery schedules, manufacturing yields, and costs.
As of September 30, 2021, and December 31, 2020, two contract manufacturers collectively accounted for 23.2% and 48.5% of the Company’s total trade payables, net, respectively.
During 2020, the Company began commercial shipments from its manufacturing facility in the North of Israel, “Sella 1”. During the second quarter of 2021, Sella 1 reached full manufacturing capacity.
g.Certain prior period amounts have been reclassified to conform to the current period presentation.
NOTE 2:-INVENTORIES, NET
|
|
September 30,
2021
|
|
|
December 31,
2020
|
|
Raw materials
|
|
$
|
161,863
|
|
|
$
|
128,363
|
|
Work in process
|
|
|
21,795
|
|
|
|
25,461
|
|
Finished goods
|
|
|
121,055
|
|
|
|
177,872
|
|
|
|
$
|
304,713
|
|
|
$
|
331,696
|
|
SOLAREDGE TECHNOLOGIES, INC.
AND ITS SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share and per share data)
NOTE 3:-MARKETABLE SECURITIES
The following is a summary of available-for-sale marketable debt securities as of September 30, 2021:
|
Amortized cost
|
|
|
Gross unrealized gains
|
|
|
Gross unrealized losses
|
|
|
Fair value
|
|
Available-for-sale – matures within one year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds
|
$
|
138,938
|
|
|
$
|
69
|
|
|
$
|
(143
|
)
|
|
$
|
138,864
|
|
Governmental bonds
|
|
6,600
|
|
|
|
1
|
|
|
|
(6
|
)
|
|
|
6,595
|
|
|
|
145,538
|
|
|
|
70
|
|
|
|
(149
|
)
|
|
|
145,459
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available for-sale – matures after one year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds
|
|
463,081
|
|
|
|
64
|
|
|
|
(1,979
|
)
|
|
|
461,166
|
|
Governmental bonds
|
|
12,211
|
|
|
|
-
|
|
|
|
(62
|
)
|
|
|
12,149
|
|
|
|
475,292
|
|
|
|
64
|
|
|
|
(2,041
|
)
|
|
|
473,315
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
620,830
|
|
|
$
|
134
|
|
|
$
|
(2,190
|
)
|
|
$
|
618,774
|
|
The following is a summary of available-for-sale marketable debt securities as of December 31, 2020:
|
Amortized cost
|
|
|
Gross unrealized gains
|
|
|
Gross unrealized losses
|
|
|
Fair value
|
|
Available-for-sale – matures within one year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds
|
$
|
141,824
|
|
|
$
|
509
|
|
|
$
|
(57
|
)
|
|
$
|
142,276
|
|
Governmental bonds
|
|
1,400
|
|
|
|
11
|
|
|
|
-
|
|
|
|
1,411
|
|
|
|
143,224
|
|
|
|
520
|
|
|
|
(57
|
)
|
|
|
143,687
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available for-sale – matures after one year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds
|
|
142,701
|
|
|
|
65
|
|
|
|
(214
|
)
|
|
|
142,552
|
|
Governmental bonds
|
|
4,895
|
|
|
|
-
|
|
|
|
(13
|
)
|
|
|
4,882
|
|
|
|
147,596
|
|
|
|
65
|
|
|
|
(227
|
)
|
|
|
147,434
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
290,820
|
|
|
$
|
585
|
|
|
$
|
(284
|
)
|
|
$
|
291,121
|
|
As of September 30, 2021, the Company didn’t record an allowance for credit losses for its available-for-sale marketable debt securities.
SOLAREDGE TECHNOLOGIES, INC.
AND ITS SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share and per share data)
NOTE 4:-INVESTMENT IN PRIVATELY-HELD COMPANY
On January 31, 2021, the Company completed an investment of $11,643 in the preferred stock of AutoGrid Systems, Inc ("AutoGrid"), a privately held company without readily determinable fair values.
On February 1, 2021, the Company signed on a preferred stock purchase agreement for an additional investment of $5,000 in AutoGrid's preferred stock (the "second investment"). On April 28, the Company completed the second investment.
Under ASU 2016-01 equity investments without readily determinable fair value include ownership rights that either (i) do not meet the definition of in-substance common stock or (ii) do not provide the Company with control or significant influence.
The Company adjusts the carrying value of its non-marketable equity securities to fair value upon observable transactions for identical or similar investments of the same issuer or upon impairment. All gains and losses on non-marketable equity securities, realized and unrealized, are recognized in financial income (expenses), net.
The Company accounted for the AutoGrid investment as an equity investment that does not have readily determinable fair values. As such, the Company’s non-marketable equity securities had a carrying value of $16,643 as of September 30, 2021. The maximum loss the Company can incur for its investments is their carrying value. Investments in privately-held companies are included within other long-term assets on the consolidated balance sheets.
The Company periodically evaluates the carrying value of the investments in privately-held companies when events and circumstances indicate that the carrying amount of the investment may not be recovered. These investments include the Company’s holdings in privately-held companies that are not traded and therefore not supported with observable market prices. The Company may determine the fair value by reviewing equity valuation reports, current financial results, long-term plans of the privately-held companies, the amount of cash that the privately-held companies have on-hand, the ability to obtain additional financing and overall market conditions in which the privately-held companies operate or based on the price observed from the most recent completed financing.
No impairment or other adjustments related to observable price changes in orderly transactions for identical or similar investments were identified for the three and nine months ended September 30, 2021.
SOLAREDGE TECHNOLOGIES, INC.
AND ITS SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share and per share data)
NOTE 5:-FAIR VALUE MEASUREMENTS
In accordance with ASC 820, the Company measures its cash equivalents and marketable securities, at fair value using the market approach valuation technique. Cash equivalents and marketable securities are classified within Level 1 and Level 2, respectively, because these assets are valued using quoted market prices or alternative pricing sources and models utilizing market observable inputs. Foreign currency derivative contracts are classified within the Level 2 value hierarchy, as the valuation inputs are based on quoted prices and market observable data of similar instruments.
The following table sets forth the Company’s assets that were measured at fair value as of September 30, 2021 and December 31, 2020 by level within the fair value hierarchy:
|
|
|
|
Fair value measurements as of
|
|
|
|
Fair Value
|
|
September 30,
|
|
|
December 31,
|
|
Description
|
|
Hierarchy
|
|
2021
|
|
|
2020
|
|
Measured at fair value on a recurring basis:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
Cash equivalents:
|
|
|
|
|
|
|
|
|
|
Money market mutual funds
|
|
Level 1
|
|
$
|
85,581
|
|
|
$
|
480,673
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative instruments asset:
|
|
|
|
|
|
|
|
|
|
|
Options and forward contracts designated as hedging instruments
|
|
Level 2
|
|
$
|
706
|
|
|
$
|
-
|
|
Options and forward contracts not designated as hedging instruments
|
|
Level 2
|
|
$
|
3,796
|
|
|
$
|
3,786
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term marketable securities:
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds
|
|
Level 2
|
|
$
|
138,864
|
|
|
$
|
142,276
|
|
Governmental bonds
|
|
Level 2
|
|
$
|
6,595
|
|
|
$
|
1,411
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term marketable securities:
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds
|
|
Level 2
|
|
$
|
461,166
|
|
|
$
|
142,552
|
|
Governmental bonds
|
|
Level 2
|
|
$
|
12,149
|
|
|
$
|
4,882
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
Derivative instruments liability:
|
|
|
|
|
|
|
|
|
|
|
Options and forward contracts not designated as hedging instruments
|
|
Level 2
|
|
$
|
-
|
|
|
$
|
(5,819
|
)
|
SOLAREDGE TECHNOLOGIES, INC.
AND ITS SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share and per share data)
NOTE 6:-DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
The Company accounts for derivatives and hedging based on ASC 815 (“Derivatives and Hedging”). ASC 815 requires the Company to recognize all derivatives on the balance sheet at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship.
To protect against the increase in value of forecasted foreign currency cash flows resulting from salary denominated in the Israeli currency, the New Israeli Shekels (“NIS”), during the nine months ended September 30, 2021, the Company instituted a foreign currency cash flow hedging program. The Company hedges portions of the anticipated payroll denominated in NIS for a period of one to nine months with hedging contracts. Accordingly, when the dollar strengthens against the NIS, the decline in present value of future foreign currency expenses is offset by losses in the fair value of the hedging contracts. Conversely, when the dollar weakens, the increase in the present value of future foreign currency cash flows is offset by gains in the fair value of the hedging contracts. These hedging contracts are designated as cash flow hedges, as defined by ASC 815 and are all effective hedges.
As of September 30, 2021, the Company entered into forward contracts to sell U.S. dollars for NIS in the amount of $36,481.
In addition to the above-mentioned cash flow hedges transactions, the Company also entered into derivative instrument arrangements to hedge the Company’s exposure to currencies other than the U.S. dollar. These derivative instruments are not designated as cash flow hedges, as defined by ASC 815, and therefore all gains and losses, resulting from fair value remeasurement, were recorded immediately in the statement of income, under financial income (expenses), net.
As of September 30, 2021, the Company entered into forward contracts and put and call options to sell Australian dollars (“AUD”) for U.S. dollars in the amount of AUD 6 million and AUD 9 million, respectively.
As of September 30, 2021, the Company entered into forward contracts and put and call options to sell Euro (“EUR”) for U.S. dollars in the amount of EUR 56 million and EUR 24 million, respectively.
The fair value of derivative assets as of September 30, 2021 and December 31, 2020, was $4,502 and $3,786, respectively, which was recorded in prepaid expenses and other current assets in the consolidated balance sheets.
As of September 30, 2021, there were no derivative liabilities. As of December 31, 2020, the fair value of derivative liabilities was $5,819, which was recorded in accrued expenses and other current liabilities in the consolidated balance sheets.
For the three months ended September 30, 2021 and 2020, the Company recorded a gain and loss in the amount of $3,350 and $1,450, respectively, in financial income (expense), net, related to the derivative instruments not designated as cash flow hedges.
For the three months ended September 30, 2021 and 2020, the Company recorded an unrealized gain in the amount of $1,006 and $85 net of tax effect, respectively, in “accumulated other comprehensive loss” related to the derivative assets designated as hedging instruments.
SOLAREDGE TECHNOLOGIES, INC.
AND ITS SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share and per share data)
NOTE 6:-DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Cont.)
For the nine months ended September 30, 2021 and 2020, the Company recorded a gain and loss in the amount of $7,706 and $959, respectively, in financial income (expense), net, related to the derivative instruments not designated as cash flow hedges.
For the nine months ended September 30, 2021 and 2020, the Company recorded unrealized gain in the amount of $1,719 and $966 net of tax effect, respectively, in “accumulated other comprehensive loss” related to the derivative assets designated as hedging instruments.
NOTE 7:-OTHER COMPRENHENSIVE INCOME (LOSS)
The following table provides details about reclassifications out of accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2021 and 2020:
Details about Accumulated Other Comprehensive Income (Loss) Components
|
|
Amount Reclassified from Accumulated Other
Comprehensive Income (Loss)
|
|
Affected Line Item in the
Statements of Income
|
|
|
Three months ended
|
|
Nine months ended
|
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
2021
|
|
|
2020
|
|
2021
|
|
|
2020
|
|
|
Unrealized gains on cash flow hedges, net
|
|
$
|
97
|
|
|
$
|
90
|
|
$
|
152
|
|
|
$
|
189
|
|
Cost of revenues
|
|
|
|
476
|
|
|
|
353
|
|
|
751
|
|
|
|
623
|
|
Research and development
|
|
|
|
97
|
|
|
|
75
|
|
|
153
|
|
|
|
136
|
|
Sales and marketing
|
|
|
|
124
|
|
|
|
87
|
|
|
196
|
|
|
|
153
|
|
General and administrative
|
|
|
|
794
|
|
|
|
605
|
|
|
1,252
|
|
|
|
1,101
|
|
Total, before income taxes
|
|
|
|
(96
|
)
|
|
|
(74
|
)
|
|
(152
|
)
|
|
|
(135
|
)
|
Income tax expense
|
|
|
$
|
698
|
|
|
$
|
531
|
|
$
|
1,100
|
|
|
$
|
966
|
|
Total, net of income taxes
|
Unrealized gains on available-for-sale marketable securitie
|
|
$
|
12
|
|
|
$
|
-
|
|
$
|
16
|
|
|
$
|
-
|
|
Financial income (expenses),
net
|
|
|
|
-
|
|
|
|
-
|
|
|
(4
|
)
|
|
|
-
|
|
Income tax expense
|
|
|
$
|
12
|
|
|
$
|
-
|
|
$
|
12
|
|
|
$
|
-
|
|
Total, net of income taxes
|
|
|
$
|
710
|
|
|
$
|
531
|
|
$
|
1,112
|
|
|
$
|
966
|
|
Total, net of income taxes
|
SOLAREDGE TECHNOLOGIES, INC.
AND ITS SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share and per share data)
NOTE 8:-CONVERTIBLE SENIOR NOTES
On September 25, 2020, the Company sold $632,500 aggregate principal amount of its 0.00% convertible senior notes due 2025 (the “Notes”). The Notes were sold pursuant to an indenture, dated September 25, 2020 (the “Indenture”), between the Company and U.S. Bank National Association, as trustee (the “Trustee”). The Notes do not bear regular interest and mature on September 15, 2025, unless earlier repurchased or converted in accordance with their terms. The Notes are general senior unsecured obligations of the Company. Holders may convert their Notes prior to the close of business on the business day immediately preceding June 15, 2025 in multiples of $1,000 principal amount, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on December 31, 2020 (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five-business-day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of the Notes for each trading day of that five consecutive trading day period was less than 98% of the product of the last reported sale price of the common stock and the conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events as described in the Indenture. In addition, holders may convert their Notes, in multiples of $1,000 principal amount, at their option at any time beginning on or after June 15, 2025, and prior to the close of business on the second scheduled trading day immediately preceding the stated maturity date of the Notes, without regard to the foregoing circumstances. The initial conversion rate for the Notes was 3.5997 shares of common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $277.80 per share of common stock, subject to adjustment upon the occurrence of certain specified events as set forth in the Indenture.
Upon conversion, the Company may choose to pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock.
In addition, upon the occurrence of a fundamental change (as defined in the Indenture), holders of the Notes may require the Company to repurchase all or a portion of their Notes, in multiples of $1,000 principal amount, at a repurchase price of 100% of the principal amount of the Notes, plus any accrued and unpaid special interest, if any, to, but excluding, the repurchase date. If certain fundamental changes referred to as make-whole fundamental changes occur, the conversion rate for the Notes may be increased.
The Convertible Senior Notes consisted of the following as of September 30, 2021 and December 31, 2020:
|
|
As of
|
|
|
As of
|
|
|
|
September 30, 2021
|
|
|
December 31, 2020
|
|
Liability:
|
|
|
|
|
|
|
|
|
Principal
|
|
$
|
632,500
|
|
|
$
|
632,500
|
|
Unamortized debt discount
|
|
|
-
|
|
|
|
(46,353
|
)
|
Unamortized issuance costs
|
|
|
(11,692
|
)
|
|
|
(12,797
|
)
|
Net carrying amount
|
|
$
|
620,808
|
|
|
$
|
573,350
|
|
|
|
|
|
|
|
|
|
|
Equity component:
|
|
|
|
|
|
|
|
|
Amount allocated to conversion option
|
|
$
|
-
|
|
|
$
|
48,834
|
|
Deferred taxes liability, net
|
|
|
-
|
|
|
|
(11,368
|
)
|
Allocated issuance costs
|
|
|
-
|
|
|
|
(1,130
|
)
|
Equity component, net
|
|
$
|
-
|
|
|
$
|
36,336
|
|
SOLAREDGE TECHNOLOGIES, INC.
AND ITS SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share and per share data)
NOTE 8:-CONVERTIBLE SENIOR NOTES (Cont.)
As of September 30, 2021, the debt issuance costs of the Notes will be amortized over the remaining term of approximately 4 years.
Prior to January 1, 2021, the Company separated the Notes into liability and equity components. On issuance, the carrying amount of the equity components was recorded as a debt discount and subsequently amortized to interest expense. Effective January 1, 2021, the Company early adopted ASU 2020-06 using the modified retrospective approach. The Notes are accounted for as a single liability measured at its amortized cost, as no other embedded features require bifurcation and recognition as derivatives.
Adoption of the new standard resulted in an increase of retained earnings in an amount of $2,884, a decrease of an additional paid-in capital in an amount of $36,336, an increase of convertible senior notes, net, in an amount of $45,282 and a decrease of deferred tax liabilities, net, in an amount of $11,830. The impact of adoption of this standard on the Company’s earnings per share was immaterial.
The annual effective interest rate of the Notes following the adoption of ASU 2020-06 is 0.47%.
The following table presents the total amount of interest expenses recognized related to the Notes for the three and nine months ended September 30, 2021 and 2020:
|
|
Three months ended
September 30,
|
|
|
Nine months ended
September 30,
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Amortization of debt discount
|
|
$
|
-
|
|
|
$
|
131
|
|
|
$
|
-
|
|
|
$
|
131
|
|
Amortization of debt issuance costs
|
|
|
726
|
|
|
|
37
|
|
|
|
2,176
|
|
|
|
37
|
|
Total interest expenses
|
|
$
|
726
|
|
|
$
|
168
|
|
|
$
|
2,176
|
|
|
$
|
168
|
|
As of September 30, 2021, the estimated fair value of the Notes, which the Company has classified as Level 2 financial instruments, is $791,106. The estimated fair value was determined based on the quoted bid price of the Notes in an over-the-counter market on the last trading day of the reporting period.
As of September 30, 2021, the if-converted value of the Notes exceeded the principal amount by $158,606.
NOTE 9:-WARRANTY OBLIGATIONS
Changes in the Company’s product warranty obligations for the nine months ended September 30, 2021 and 2020, were as follows:
|
|
As of September 30,
|
|
|
|
2021
|
|
|
2020
|
|
Balance, at the beginning of the period
|
|
$
|
204,994
|
|
|
$
|
172,563
|
|
Additions and adjustments to cost of revenues
|
|
|
109,382
|
|
|
|
74,465
|
|
Usage and current warranty expenses
|
|
|
(67,313
|
)
|
|
|
(51,334
|
)
|
Balance, at the end of the period
|
|
|
247,063
|
|
|
|
195,694
|
|
Less current portion
|
|
|
(67,096
|
)
|
|
|
(65,080
|
)
|
Long term portion
|
|
$
|
179,967
|
|
|
$
|
130,614
|
|
SOLAREDGE TECHNOLOGIES, INC.
AND ITS SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share and per share data)
NOTE 10:-COMMITMENTS AND CONTINGENT LIABILITIES
a.Guarantees:
As of September 30, 2021, contingent liabilities exist regarding guarantees in the amounts of $5,167 and $2,782 in respect of office rent lease agreements and other transactions, respectively.
b.Contractual purchase obligations:
The Company has contractual obligations to purchase goods and raw materials.
These contractual purchase obligations relate to inventories held by contract manufacturers and purchase orders initiated by the contract manufacturers, which cannot be canceled without penalty.
The Company utilizes third parties to manufacture its products. In addition, the Company acquires raw materials or other goods and services, including product components, by issuing authorizations to its suppliers to purchase materials based on its projected demand and manufacturing needs. As of September 30, 2021, the Company had non-cancelable purchase obligations totaling approximately $1,178,921 out of which the Company recorded a provision for loss in the amount of $3,992.
As of September 30, 2021, the Company had contractual obligations for capital expenditures totaling approximately $126,210. These commitments reflect purchases of automated assembly lines and other machinery related to the Company’s manufacturing process as well as capital expenditures associated with the construction of Sella 2, the Company’s planned second lithium-ion cell and battery factory in Korea which is under construction.
c.Legal claims:
From time to time, the Company may be involved in various claims and legal proceedings. The Company reviews the status of each matter and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, the Company accrues a liability for the estimated loss. These accruals are reviewed at least quarterly and adjusted to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular matter.
In September 2018, the Company’s German subsidiary, SolarEdge Technologies GmbH received a complaint filed by competitor SMA Solar Technology AG (“SMA”).
The complaint, filed in the District Court Düsseldorf, Germany, alleged that the Company’s 12.5kW - 27.6kW inverters infringe two of the plaintiff’s patents. In its complaint, SMA asserted a value in dispute of EUR 5.5 million (approximately $6,364) for both patents. The Company challenged the validity of both patents. With respect to one of the claims, in October 2020, the German Patent Court rendered the SMA patent invalid and this invalidity has been appealed by SMA. With respect to the other claim, in November 2019, the first instance court stayed the infringement proceedings since it considered it to be highly likely that the second SMA patent would also be rendered invalid. The Company believes that it has meritorious defenses to the claims asserted and intends to vigorously defend against the remaining lawsuit.
In May 2019, the Company’s two Chinese subsidiaries and its equipment manufacturer in China were served with three lawsuits by Huawei Technologies Co., Ltd., a Chinese entity (“Huawei”).
SOLAREDGE TECHNOLOGIES, INC.
AND ITS SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share and per share data)
NOTE 10:-COMMITMENTS AND CONTINGENT LIABILITIES (Cont.)
The lawsuits, filed in the Guangzhou intellectual property court, alleged infringement of three patents and asked for an injunction of manufacture, use, sale and offer for sale, and damage awards. A first-instance judgment was issued on August 7, 2020 ordering the three defendants to collectively pay damages in the amount of approximately Chinese Yuan (“CNY”) 10.5 million (approximately $1,623), including court fees, with respect of one of the patents. The Company has filed an appeal with the Supreme People’s Court of China. The first instance court’s judgement is not effective or enforceable pending the appeal. In addition, in January 2021, Huawei filed a motion to increase its claimed monetary damages to CNY 50.5 million (approximately $7,808) and for a preliminary injunction with respect to the second lawsuit. In February 2021, a preliminary injunction was rendered by the Guangzhou intellectual property court with respect to such second lawsuit and applying to seven inverter models. In line with the court’s mandate, the Company took immediate action to make software changes to meet the court order and also appealed the decision. In addition, in February 22, 2021 a first-instance judgment was issued ordering the three defendants to collectively pay damages in the amount of CNY 50.5 million (approximately $7,808), including court fees, with respect to the second patent. The Company appealed this judgement with the Supreme People’s Court. The first instance court’s judgement is not effective or enforceable pending the appeal. In October 2021, a first-instance judgment was issued ordering the three defendants to collectively pay damages in the amount of approximately CNY 10.5 million (approximately $1,623), including court fees, with respect to the third lawsuit. The Company has filed an appeal with the Supreme People’s Court of China. The first instance court’s judgement is not effective or enforceable pending the appeal. The Company believes that it has meritorious defenses to the claims asserted by Huawei.
In December 2019, the Company received a lawsuit filed by a former consultant of the Company and its Israeli subsidiary in the amount of 25.5 million NIS (approximately $7,897) claiming damages caused relating to a terminated consulting agreement and stock options therein. The Company believes it has meritorious defenses to the claims asserted and intends to vigorously defend against this lawsuit.
As of September 30, 2021, accrued amounts for legal claims of $11,132, were recorded in accrued expenses and other current liabilities.
SOLAREDGE TECHNOLOGIES, INC.
AND ITS SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share and per share data)
NOTE 11:-STOCK CAPITAL
a.Common stock rights:
Common stock confers upon its holders the right to receive notice of, and to participate in, all general meetings of the Company, where each share of common stock shall have one vote for all purposes; to share equally, on a per share basis, in bonuses, profits, or distributions out of fund legally available therefor; and to participate in the distribution of the surplus assets of the Company in the event of liquidation of the Company.
b.Stock incentive plans:
The Company’s 2007 Global Incentive Plan (the “2007 Plan”) was adopted by the board of directors on August 30, 2007. The 2007 Plan terminated upon the Company’s IPO on March 31, 2015 and no further awards may be granted thereunder. All outstanding awards will continue to be governed by their existing terms and 379,358 available options for future grant were transferred to the Company’s 2015 Global Incentive Plan (the “2015 Plan”) and are reserved for future issuances under the 2015 plan. The 2015 Plan became effective upon the consummation of the IPO. The 2015 Plan provides for the grant of options, RSUs and other share-based awards to directors, employees, officers and nonemployees of the Company and its subsidiaries.
The Share Reserve will automatically increase on January 1st of each year during the term of the 2015 Plan, commencing on January 1st of the year following the year in which the 2015 Plan became effective, in an amount equal to 5% of the total number of shares of capital stock outstanding on December 31st of the preceding calendar year; provided, however, that the Company’s board of directors may determine that there will not be a January 1st increase in the Share Reserve in a given year or that the increase will be less than 5% of the shares of capital stock outstanding on the preceding December 31st.
In the three and nine months ended September 30, 2021, the Company granted under its 2015 Plan, performance-based restricted stock unit (“PRSU”) awards to certain employees which vest upon the achievement of certain performance conditions subject to the employees’ continued service relationship with the Company. The probability of vesting is assessed at each reporting period and compensation cost is adjusted based on this probability assessment. The Company recognizes such compensation expenses on an accelerated vesting method.
As of September 30, 2021, a total of 15,406,316 shares of common stock were reserved for issuance pursuant to stock awards under the 2015 Plan (the “Share Reserve”).
The aggregate maximum number of shares of common stock that may be issued on the exercise of incentive stock options is 10,000,000. As of September 30, 2021, an aggregate of 8,617,974 options are still available for future grant under the 2015 Plan.
SOLAREDGE TECHNOLOGIES, INC.
AND ITS SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share and per share data)
NOTE 11:-STOCK CAPITAL (Cont.)
A summary of the activity in the stock options granted to employees and members of the board of directors for the nine months ended September 30, 2021 and related information are as follows:
|
|
Number of
options
|
|
|
Weighted
average
exercise
price
|
|
|
Weighted
average
remaining
contractual
term
in years
|
|
|
Aggregate
intrinsic
Value
|
|
Outstanding as of December 31, 2020
|
|
|
691,732
|
|
|
|
31.86
|
|
|
|
5.07
|
|
|
$
|
198,709
|
|
Granted
|
|
|
19,489
|
|
|
|
311.35
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
(188,425
|
)
|
|
|
32.45
|
|
|
|
|
|
|
|
|
|
Forfeited or expired
|
|
|
(10,432
|
)
|
|
|
44.24
|
|
|
|
|
|
|
|
|
|
Outstanding as of September 30, 2021
|
|
|
512,364
|
|
|
|
42.02
|
|
|
|
5.32
|
|
|
$
|
115.260
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vested and expected to vest as of September 30, 2021
|
|
|
477,119
|
|
|
|
37.28
|
|
|
|
5.54
|
|
|
$
|
109,397
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable as of September 30, 2021
|
|
|
395,839
|
|
|
|
25.49
|
|
|
|
5.09
|
|
|
$
|
95,005
|
|
The aggregate intrinsic value in the tables above represents the total intrinsic value (the difference between the fair value of the Company’s common stock as of the last day of each period and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on the last day of each period.
The total intrinsic value of options exercised during the nine months ended September 30, 2021 was $51,308.
The weighted average grant date fair values of options granted to employees and executive directors during the nine months ended September 30, 2021 was $168.36.
A summary of the activity in the RSUs and PRSUs granted to employees and directors for the nine months ended September 30, 2021, is as follows:
|
|
Number of
RSUs
|
|
|
Weighted average
grant date
fair value
|
|
Unvested as of January 1, 2021
|
|
|
2,216,841
|
|
|
$
|
103.79
|
|
Granted (1)
|
|
|
322,909
|
|
|
|
283.61
|
|
Vested
|
|
|
(732,555
|
)
|
|
|
78.61
|
|
Forfeited
|
|
|
(92,198
|
)
|
|
|
121.09
|
|
Unvested as of September 30, 2021
|
|
|
1,714,997
|
|
|
$
|
146.53
|
|
|
(1)
|
The number of PRSUs granted to employees was 132,673 with a weighted average grant date fair value of 294.04.
|
SOLAREDGE TECHNOLOGIES, INC.
AND ITS SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share and per share data)
NOTE 11:-STOCK CAPITAL (Cont.)
c.Employee Stock Purchase Plan (“ESPP”):
The Company adopted an ESPP effective upon the consummation of the IPO. As of September 30, 2021, a total of 3,175,094 shares were reserved for issuance under this plan. The number of shares of common stock reserved for issuance under the ESPP will increase automatically on January 1st of each year, for ten years, by the lesser of 1% of the total number of shares of the Company’s common stock outstanding on December 31st of the preceding calendar year or 487,643 shares. However, the Company’s board of directors may reduce the amount of the increase in any particular year at its discretion, including a reduction to zero.
The ESPP is implemented through an offering every six months. According to the ESPP, eligible employees may use up to 10% of their salaries to purchase common stock up to an aggregate limit of $10 per participant for every six months plan. The price of an ordinary share purchased under the ESPP is equal to 85% of the lower of the fair market value of the ordinary share on the subscription date of each offering period or on the purchase date.
As of September 30, 2021, 635,193 shares of common stock had been purchased under the ESPP.
As of September 30, 2021, 2,539,901 shares of common stock were available for future issuance under the ESPP.
In accordance with ASC No. 718, the ESPP is compensatory and, as such, results in recognition of compensation cost.
d.Stock-based compensation expenses for employees and non-employees:
The Company recognized stock-based compensation expenses related to stock options, RSUs and PRSUs granted to employees and nonemployees and ESPP in the condensed consolidated statement of income for the three and nine months ended September 30, 2021 and 2020, as follows:
|
|
Three months ended
September 30,
|
|
|
Nine months ended
September 30,
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Cost of revenues
|
|
$
|
4,289
|
|
|
$
|
2,730
|
|
|
$
|
14,370
|
|
|
$
|
7,362
|
|
Research and development
|
|
|
11,949
|
|
|
|
6,904
|
|
|
|
30,552
|
|
|
|
18,129
|
|
Selling and marketing
|
|
|
5,737
|
|
|
|
4,066
|
|
|
|
16,952
|
|
|
|
10,703
|
|
General and administrative
|
|
|
4,210
|
|
|
|
2,559
|
|
|
|
11,516
|
|
|
|
6,799
|
|
Total stock-based compensation expenses
|
|
$
|
26,185
|
|
|
$
|
16,259
|
|
|
$
|
73,390
|
|
|
$
|
42,993
|
|
As of September 30, 2021, there were total unrecognized compensation expenses in the amount of $257,967 related to non-vested equity-based compensation arrangements granted under the Company’s Plans. These expenses are expected to be recognized during the period from October 1, 2021 through May 31, 2026.
SOLAREDGE TECHNOLOGIES, INC.
AND ITS SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share and per share data)
NOTE 12:-EARNINGS PER SHARE
Basic net EPS is computed by dividing the net earnings by the weighted-average number of shares of common stock outstanding during the period. Diluted net EPS is computed by giving effect to all potential shares of common stock, to the extent dilutive, including stock options, RSUs, PRSUs, shares to be purchased under the Company’s ESPP, and the Notes due 2025, all in accordance with ASC No. 260, “Earnings Per Share.”
The following table presents the computation of basic and diluted EPS:
|
|
Three months ended
September 30,
|
|
|
Nine months ended
September 30,
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Basic EPS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
53,048
|
|
|
$
|
43,751
|
|
|
$
|
128,216
|
|
|
$
|
122,667
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing net earnings per share of common stock, basic
|
|
|
52,355,867
|
|
|
|
50,529,691
|
|
|
|
52,056,233
|
|
|
|
49,842,399
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to common stock, basic
|
|
$
|
53,048
|
|
|
$
|
43,751
|
|
|
$
|
128,216
|
|
|
$
|
122,667
|
|
Notes due 2025
|
|
|
525
|
|
|
|
137
|
|
|
|
1,575
|
|
|
|
137
|
|
Net income attributable to common stock, diluted
|
|
$
|
53,573
|
|
|
$
|
43,888
|
|
|
$
|
129,791
|
|
|
$
|
122,804
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing net earnings per share of common stock, basic
|
|
|
52,355,867
|
|
|
|
50,529,691
|
|
|
|
52,056,233
|
|
|
|
49,842,399
|
|
Notes due 2025
|
|
|
2,276,818
|
|
|
|
197,984
|
|
|
|
2,276,818
|
|
|
|
65,995
|
|
Effect of stock-based awards
|
|
|
1,296,315
|
|
|
|
2,416,513
|
|
|
|
1,622,390
|
|
|
|
2,715,281
|
|
Shares used in computing net earnings per share of common stock, diluted
|
|
|
55,929,000
|
|
|
|
53,144,188
|
|
|
|
55,955,441
|
|
|
|
52,623,675
|
|
SOLAREDGE TECHNOLOGIES, INC.
AND ITS SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share and per share data)
NOTE 12:-EARNINGS PER SHARE (Cont.)
No shares were excluded from the calculation of diluted net EPS due to their anti-dilutive effect for the three and nine months ended September 30, 2021 and 2020.
The vesting of PRSUs is contingent upon the achievement of certain performance conditions. The performance awards are not included in the diluted EPS calculation until the performance conditions have been met.
As of September 30, 2021, certain performance conditions associated with these PRSUs were met and consequently 14,773 PRSUs were considered as issuable for the calculation of the diluted EPS for the three and nine months ended September 30, 2021.
NOTE 13:-OTHER OPERATING EXPENSES (INCOME)
|
|
Three months ended
September 30,
|
|
|
Nine months ended
September 30,
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Kokam purchase escrow (1) (2)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(859
|
)
|
|
$
|
(4,900
|
)
|
Write-off of property, plant and equipment
|
|
|
-
|
|
|
|
-
|
|
|
|
2,209
|
|
|
|
-
|
|
Total other operating expenses (income)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
1,350
|
|
|
$
|
(4,900
|
)
|
(1)
|
In the nine months ended September 30, 2021, the Company received a payment of $859 out of the Kokam Co., Ltd. (“Kokam”) acquisition escrow (“the escrow”), with regards to a working capital adjustment.
|
|
|
(2)
|
In the nine months ended September 30, 2020, the Company was indemnified for an amount of $4,900 out of the escrow, with regards to a legal claim of Kokam that was settled in arbitration.
|
NOTE 14:-INCOME TAXES
The effective tax rate for the three months ended September 30, 2021 and 2020 were 12.6% and 5.2%, respectively and for the nine months ended September 30, 2021 and 2020 were 15.9% and 11.7%, respectively.
The increase in the effective tax rate in the current year is primarily due to presence of a full valuation allowance in various jurisdictions and different allocation of income among the Company’s US, Israel, and foreign subsidiaries.
The Company’s effective tax rate was lower than the U.S. federal statutory rate for the three and nine months ended September 30, 2021, due to earnings taxed at lower rates in foreign jurisdictions and tax benefits relating to stock-based compensation, which were partially offset by full valuation allowance in various jurisdictions and Global intangible low-taxed income (“GILTI”) tax.
As of September 30, 2021, and December 31, 2020, unrecognized tax benefits were $10,708 and $10,564, respectively. If recognized, such benefits would favorably affect the Company’s effective tax rate. The Company accrues interest and penalties related to unrecognized tax benefits in its provision for income taxes. The total amount of penalties and interest were $205 and $127 as of September 30, 2021 and December 31, 2020, respectively. It is reasonably possible that the Company’s gross unrecognized tax benefits will decrease by up to $8,937 in the next 12 months, primarily due to the lapse of the statute of limitations. These adjustments, if recognized, would positively impact the Company’s effective tax rate, and would be recognized as additional tax benefits.
SOLAREDGE TECHNOLOGIES, INC.
AND ITS SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share and per share data)
NOTE 15:-SEGMENT INFORMATION
The Company operates in five different operating segments: Solar, Energy Storage, e-Mobility, Critical Power and Automation Machines.
The Company's Chief Executive Officer, who is the chief operating decision maker (“CODM”), makes resource allocation decisions and assesses performance based on financial information presented on a consolidated basis, accompanied by disaggregated information about revenues and contributed profit by the operating segments.
The Company does not allocate to its operating segments revenue recognized due to advance payments received for performance obligations that extend for a period greater than one year (“financing component”), related to Accounting Standard Codification 606, “Revenue from Contracts with Customers” (ASC 606).
Segment profit is comprised of gross profit for the segment less operating expenses that do not include amortization of purchased intangible assets, stock based compensation expenses and certain other items.
The Company manages its assets on a group basis, not by segments, as many of its assets are shared or co-mingled. The Company’s CODM does not regularly review asset information by segments and, therefore, the Company does not report asset information by segment.
The Company identified one operating segment as reportable – the Solar segment. The other operating segments are insignificant individually and therefore their results are presented together under “All other”.
The Solar segment includes the design, development, manufacturing, and sales of an intelligent inverter solution designed to maximize power generation at the individual PV module level and a residential storage solution, compatible with the Company’s energy hub inverter, intended to store and supply power for back-up and to maximize self-consumption. The Solar segment solution consists mainly of the Company’s power optimizers, inverters, batteries and cloud-based monitoring platform.
The “All other” category includes the design, development, manufacturing and sales of energy storage products, e-Mobility products, UPS products and automated machines.
The following table presents information on reportable segments profit (loss) for the periods presented:
|
|
Three months ended
September 30, 2021
|
|
|
Nine months ended
September 30, 2021
|
|
|
|
Solar
|
|
|
All other
|
|
|
Solar
|
|
|
All other
|
|
Revenues
|
|
$
|
476,838
|
|
|
$
|
49,455
|
|
|
$
|
1,284,574
|
|
|
$
|
127,080
|
|
Cost of revenues
|
|
|
302,081
|
|
|
|
45,132
|
|
|
|
799,163
|
|
|
|
122,536
|
|
Gross profit
|
|
|
174,757
|
|
|
|
4,323
|
|
|
|
485,411
|
|
|
|
4,544
|
|
Research and development
|
|
|
34,657
|
|
|
|
8,853
|
|
|
|
102,151
|
|
|
|
22,376
|
|
Sales and marketing
|
|
|
21,127
|
|
|
|
2,290
|
|
|
|
60,758
|
|
|
|
7,340
|
|
General and administrative
|
|
|
14,054
|
|
|
|
2,863
|
|
|
|
39,094
|
|
|
|
9,783
|
|
Segments profit (loss)
|
|
$
|
104,919
|
|
|
$
|
(9,683
|
)
|
|
$
|
283,408
|
|
|
$
|
(34,955
|
)
|
SOLAREDGE TECHNOLOGIES, INC.
AND ITS SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share and per share data)
NOTE 15:-SEGMENT INFORMATION (Cont.)
The following table presents information on reportable segments reconciliation to consolidated operating income for the periods presented:
|
|
Three months ended
September 30, 2020
|
|
|
Nine months ended
September 30, 2020
|
|
|
|
Solar
|
|
|
All other
|
|
|
Solar
|
|
|
All other
|
|
Revenues
|
|
$
|
312,480
|
|
|
$
|
25,615
|
|
|
$
|
1,030,175
|
|
|
$
|
71,476
|
|
Cost of revenues
|
|
|
203,590
|
|
|
|
21,283
|
|
|
|
673,751
|
|
|
|
61,974
|
|
Gross profit
|
|
|
108,890
|
|
|
|
4,332
|
|
|
|
356,424
|
|
|
|
9,502
|
|
Research and development
|
|
|
26,466
|
|
|
|
7,421
|
|
|
|
79,923
|
|
|
|
17,481
|
|
Sales and marketing
|
|
|
15,160
|
|
|
|
2,328
|
|
|
|
48,803
|
|
|
|
6,650
|
|
General and administrative
|
|
|
10,593
|
|
|
|
1,210
|
|
|
|
28,467
|
|
|
|
9,228
|
|
Segments profit (loss)
|
|
$
|
56,671
|
|
|
$
|
(6,627
|
)
|
|
$
|
199,231
|
|
|
$
|
(23,857
|
)
|
The following table presents information on reportable segments reconciliation to consolidated revenues for the periods presented:
|
|
Three months ended
September 30,
|
|
|
Nine months ended
September 30,
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Solar segment revenues
|
|
$
|
476,838
|
|
|
$
|
312,480
|
|
|
$
|
1,284,574
|
|
|
$
|
1,030,175
|
|
All other segment revenues
|
|
|
49,455
|
|
|
|
25,615
|
|
|
|
127,080
|
|
|
|
71,476
|
|
Revenues from financing component
|
|
|
111
|
|
|
|
-
|
|
|
|
296
|
|
|
|
-
|
|
Intersegment revenues
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(487
|
)
|
Consolidated revenues
|
|
$
|
526,404
|
|
|
$
|
338,095
|
|
|
$
|
1,411,950
|
|
|
$
|
1,101,164
|
|
The following table presents information on reportable segments reconciliation to consolidated operating income for the periods presented:
|
|
Three months ended
September 30,
|
|
|
Nine months ended
September 30,
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Solar segment profit
|
|
$
|
104,919
|
|
|
$
|
56,671
|
|
|
$
|
283,408
|
|
|
$
|
199,231
|
|
All other segment loss
|
|
|
(9,683
|
)
|
|
|
(6,627
|
)
|
|
|
(34,955
|
)
|
|
|
(23,857
|
)
|
Segments operating profit
|
|
|
95,236
|
|
|
|
50,044
|
|
|
|
248,453
|
|
|
|
175,374
|
|
Amounts not allocated to segments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock based compensation expenses
|
|
|
(26,185
|
)
|
|
|
(16,259
|
)
|
|
|
(73,390
|
)
|
|
|
(42,993
|
)
|
Amortization related to business combinations
|
|
|
(2,785
|
)
|
|
|
(2,833
|
)
|
|
|
(8,007
|
)
|
|
|
(8,169
|
)
|
Legal settlement
|
|
|
-
|
|
|
|
-
|
|
|
|
859
|
|
|
|
4,900
|
|
Other unallocated income (expenses), net
|
|
|
148
|
|
|
|
(558
|
)
|
|
|
(1,814
|
)
|
|
|
(871
|
)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intersegment profit
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(107
|
)
|
Consolidated operating income
|
|
$
|
66,414
|
|
|
$
|
30,394
|
|
|
$
|
166,101
|
|
|
$
|
128,134
|
|