SolarEdge Technologies, Inc. (Nasdaq: SEDG), a global leader in
smart energy technology, today announced its financial results for
the third quarter ended September 30, 2022.
Third Quarter 2022 Highlights
- Record revenues of $836.7 million
- Record revenues from solar segment of $788.6 million
- GAAP gross margin of 26.5%
- Non-GAAP gross margin of 27.3%
- Gross margin from solar segment of 28.3%
- Record GAAP operating profit of $84.4 million
- Record non-GAAP operating profit of $120.2 million
- GAAP net income of $24.7 million
- Non-GAAP net income of $54.1 million
- GAAP net diluted earnings per share (“EPS”) of $0.43
- Non-GAAP net diluted EPS of $0.91
- 2.7 Gigawatts (AC) of inverters shipped
- 320.7 MWh of batteries shipped
“We are pleased with our third quarter results, setting new
revenue and operating profit records. The results reflect extremely
strong momentum in Europe where our revenues grew 90% compared to
the same quarter last year,” said Zvi Lando, Chief Executive
Officer of SolarEdge. “This quarter we increased production and
were able to ship more units while increasing our operational
efficiency and returning to a growth trajectory for our gross
margins. We believe that the continued increase in manufacturing
capacity in our existing manufacturing lines combined with our
plans to establish a manufacturing footprint in the U.S. will allow
us to capitalize on the strong demand we are experiencing
globally.”
Third Quarter 2022 Summary
The Company reported record revenues of $836.7 million, up 15%
from $727.8 million in the prior quarter and up 59% from $526.4
million in the same quarter last year.
Revenues from the solar segment were record $788.6 million, up
15% from $687.6 million in the prior quarter and up 65% from $476.8
million in the same quarter last year.
GAAP gross margin was 26.5%, up from 25.1% in the prior quarter
and down from 32.8% in the same quarter last year.
Non-GAAP gross margin was 27.3%, up from 26.7% in the prior
quarter and down from 34.0% in the same quarter last year.
Gross margin from the solar segment was 28.3%, up from 28.1% in
the prior quarter and down from 36.6% in the same quarter last
year.
GAAP operating expenses were $137.6 million, down 6% from $146.6
million in the prior quarter and up 30% from $106.1 million in the
same quarter last year.
Non-GAAP operating expenses were $108.3 million, down 1% from
$109.6 million in the prior quarter and up 29% from $83.8 million
in the same quarter last year.
GAAP operating income was $84.4 million, up 134% from $36.0
million in the prior quarter and up 27% from $66.4 million in the
same quarter last year.
Non-GAAP operating income was $120.2 million, up 42% from $84.7
million in the prior quarter and up 26% from $95.2 million in the
same quarter last year.
GAAP net income was $24.7 million, up 64% from $15.1 million in
the prior quarter and down 53% from $53.0 million in the same
quarter last year.
Non-GAAP net income was $54.1 million, down 5% from $56.7
million in the prior quarter and down 34% from $82.1 million in the
same quarter last year.
GAAP net diluted EPS was $0.43, up from $0.26 in the prior
quarter and down from $0.96 in the same quarter last year.
Non-GAAP net diluted EPS was $0.91, down from $0.95 in the prior
quarter and down from $1.45 in the same quarter last year.
Cash flow from operating activities was $5.6 million, down from
$77.4 million in the prior quarter and down from $61.8 million in
the same quarter last year.
As of September 30, 2022, cash, cash equivalents, bank deposits,
restricted bank deposits and marketable securities totaled $937.6
million, net of debt, compared to $973.3 million on June 30,
2022.
Outlook for the Fourth Quarter 2022
The Company also provides guidance for the fourth quarter ending
December 31, 2022 as follows:
- Revenues to be within the range of $855 million to $885
million
- Non-GAAP gross margin expected to be within the range of 27% to
30%
- Non-GAAP operating profit to be within the range of $115
million to $135 million
- Revenues from the solar segment to be within the range of $810
million to $840 million
- Gross margin from the solar segment expected to be within the
range of 28% to 31%
Conference Call
The Company will host a conference call to discuss these results
at 4:30 p.m. ET on Monday, November 7, 2022. The call will be
available, live, to interested parties by dialing 866-952-8559. For
international callers, please dial +1 785-424-1743. The Conference
ID is SEDG. 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 Company uses these non-GAAP financial measures to analyze
its operating performance and future prospects, develop internal
budgets and financial goals, and to facilitate period-to-period
comparisons. The Company believes that these non-GAAP financial
measures reflect an additional way of viewing aspects of its
operations that, when viewed with its GAAP results, provide a more
complete understanding of factors and trends affecting its
business.
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, 2021, filed on February 22, 2022
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 November 7, 2022. The Company
undertakes no duty or obligation to update any forward-looking
statements contained in this release as a result of new
information, future events or changes in its expectations.
SOLAREDGE TECHNOLOGIES
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME (Unaudited)
(in thousands, except per
share data)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
Revenues
$
836,723
$
526,404
$
2,219,577
$
1,411,950
Cost of revenues
614,722
353,843
1,635,976
943,123
Gross profit
222,001
172,561
583,601
468,827
Operating expenses:
Research and development
69,659
55,666
210,855
155,307
Sales and marketing
42,726
29,383
117,017
85,752
General and administrative
27,933
21,098
82,483
60,317
Other operating expenses (income), net
(2,724
)
—
1,963
1,350
Total
operating expenses
137,594
106,147
412,318
302,726
Operating income
84,407
66,414
171,283
166,101
Financial expense, net
(33,025
)
(5,751
)
(52,785
)
(13,591
)
Other income
7,533
—
7,533
—
Income before income taxes
58,915
60,663
126,031
152,510
Income taxes
34,172
7,615
53,081
24,294
Net income
$
24,743
$
53,048
$
72,950
$
128,216
SOLAREDGE TECHNOLOGIES
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS (Unaudited)
(in thousands, except per
share data)
September 30,
2022
December 31,
2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
678,329
$
530,089
Marketable securities
202,598
167,728
Trade receivables, net of allowances of
$4,283 and $2,626, respectively
785,325
456,339
Inventories, net
561,352
380,143
Prepaid expenses and other current
assets
224,169
176,992
Total current assets
2,451,773
1,711,291
LONG-TERM ASSETS:
Marketable securities
688,753
482,228
Deferred tax assets, net
38,268
27,572
Property, plant and equipment, net
491,433
410,379
Operating lease right-of-use assets,
net
62,535
47,137
Intangible assets, net
46,286
58,861
Goodwill
108,860
129,629
Other long-term assets
15,638
33,856
Total
long-term assets
1,451,773
1,189,662
Total
assets
3,903,546
2,900,953
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Trade payables, net
311,565
252,068
Employees and payroll accruals
71,905
74,465
Warranty obligations
97,222
71,480
Deferred revenues and customers
advances
31,896
17,789
Accrued expenses and other current
liabilities
181,892
109,379
Total current
liabilities
694,480
525,181
LONG-TERM LIABILITIES:
Convertible senior notes, net
623,721
621,535
Warranty obligations
248,917
193,680
Deferred revenues
176,824
151,556
Finance lease liabilities
45,509
40,508
Operating lease liabilities
46,398
38,912
Other long-term liabilities
15,570
19,542
Total long-term liabilities
1,156,939
1,065,733
COMMITMENTS AND CONTINGENT LIABILITIES
STOCKHOLDERS’ EQUITY:
Common stock of $0.0001 par value -
Authorized: 125,000,000 shares as of September 30, 2022 and
December 31, 2021; issued and outstanding: 55,894,106 and
52,815,395 shares as of September 30, 2022 and December 31, 2021,
respectively
6
5
Additional paid-in capital
1,457,379
687,295
Accumulated other comprehensive loss
(128,266
)
(27,319
)
Retained earnings
723,008
650,058
Total stockholders’ equity
2,052,127
1,310,039
Total
liabilities and stockholders’ equity
$
3,903,546
$
2,900,953
SOLAREDGE TECHNOLOGIES
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (Unaudited)
(in thousands, except per
share data)
Nine Months Ended
September 30,
2022
2021
Cash flows from operating activities:
Net income
$
72,950
$
128,216
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation of property, plant and
equipment
29,571
21,492
Amortization of intangible assets
7,741
7,487
Amortization of debt discount and debt
issuance costs
2,186
2,175
Amortization of premium and accretion of
discount on available-for-sale marketable securities, net
7,864
6,301
Impairment of goodwill and intangible
assets
4,008
—
Stock-based compensation expenses
106,932
73,390
Gain from sale of privately held
company
(7,533
)
—
Deferred income taxes, net
(3,822
)
(6,686
)
Loss (gain) from sale and disposal of
assets
(485
)
2,013
Exchange rate fluctuations and other
items, net
64,662
13,086
Changes in assets and liabilities:
Inventories, net
(188,579
)
30,678
Prepaid expenses and other assets
(55,478
)
(14,977
)
Trade receivables, net
(377,089
)
(206,131
)
Trade payables, net
53,683
(22,959
)
Employees and payroll accruals
12,119
14,321
Warranty obligations
82,025
42,368
Deferred revenues and customers
advances
41,440
13,723
Other liabilities, net
67,789
20,055
Net cash provided by (used in) operating
activities
(80,016
)
124,552
Cash flows from
investing activities:
Proceed from sales and maturities of
available-for-sale marketable securities
178,415
174,817
Purchase of property, plant and
equipment
(125,085
)
(94,135
)
Investment in available-for-sale
marketable securities
(461,491
)
(511,615
)
Investment in a privately-held company
—
(16,643
)
Proceeds from sale of a privately-held
company
24,175
—
Withdrawal from bank deposits, net
—
50,020
Payment for asset acquisition, net of cash
acquired
—
(2,996
)
Other investing activities
3,472
2,593
Net cash used in investing activities
(380,514
)
(397,959
)
Cash flows from
financing activities:
Proceeds from secondary public offering,
net of issuance costs
650,526
—
Repayment of bank loans
(104
)
(16,219
)
Proceeds from exercise of stock-based
awards
3,508
6,128
Tax withholding in connection with
stock-based awards, net
(4,686
)
(8,402
)
Other financing activities
(2,109
)
(939
)
Net cash provided by (used in) financing
activities
647,135
(19,432
)
Increase (decrease) in cash and cash
equivalents
186,605
(292,839
)
Cash and cash equivalents at the beginning
of the period
530,089
827,146
Effect of exchange rate differences on
cash and cash equivalents
(38,365
)
(7,719
)
Cash and cash equivalents at the end of
the period
$
678,329
$
526,588
SOLAREDGE TECHNOLOGIES
INC.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES (Unaudited)
(in thousands, except per share
data and percentages)
Reconciliation of GAAP to
Non-GAAP
Three Months Ended
Nine Months Ended
September 30,
2022
June 30,
2022
September 30,
2021
September 30,
2022
September 30,
2021
Gross profit (GAAP)
$
222,001
$
182,642
$
172,561
$
583,601
$
468,827
Revenues from finance component
(159
)
(146
)
(111
)
(440
)
(296
)
Stock-based compensation
4,661
5,285
4,289
15,008
14,370
Disposal of assets related to Critical
Power
—
4,314
—
4,314
—
Amortization and depreciation of acquired
assets
2,064
2,185
2,341
6,468
7,054
Gross profit (Non-GAAP)
$
228,567
$
194,280
$
179,080
$
608,951
$
489,955
Gross margin (GAAP)
26.5
%
25.1
%
32.8
%
26.3
%
33.2
%
Revenues from finance component
0.0
%
0.0
%
0.0
%
0.0
%
0.0
%
Stock-based compensation
0.6
%
0.7
%
0.8
%
0.7
%
1.0
%
Disposal of assets related to Critical
Power
—
%
0.6
%
—
%
0.2
%
—
%
Amortization and depreciation of acquired
assets
0.2
%
0.3
%
0.4
%
0.3
%
0.5
%
Gross margin (Non-GAAP)
27.3
%
26.7
%
34.0
%
27.4
%
34.7
%
Operating expenses (GAAP)
$
137,594
$
146,630
$
106,147
$
412,318
$
302,726
Stock-based compensation
(31,090
)
(31,789
)
(21,896
)
(91,924
)
(59,020
)
Amortization and depreciation of acquired
assets
(495
)
(531
)
(444
)
(1,571
)
(953
)
Assets impairment
19
(4,687
)
—
(4,668
)
—
Gain (loss) from assets sales and
disposal
744
(8
)
37
1,146
99
Other items
1,559
—
—
1,559
(1,350
)
Operating expenses (Non-GAAP)
$
108,331
$
109,615
$
83,844
$
316,860
$
241,502
Operating income (GAAP)
$
84,407
$
36,012
$
66,414
$
171,283
$
166,101
Revenues from finance component
(159
)
(146
)
(111
)
(440
)
(296
)
Disposal of assets related to Critical
Power
—
4,314
—
4,314
—
Stock-based compensation
35,751
37,074
26,185
106,932
73,390
Amortization and depreciation of acquired
assets
2,559
2,716
2,785
8,039
8,007
Assets impairment
(19
)
4,687
—
4,668
—
Loss (gain) from assets sales and
disposal
(744
)
8
(37
)
(1,146
)
(99
)
Other items
(1,559
)
—
—
(1,559
)
1,350
Operating income (Non-GAAP)
$
120,236
$
84,665
$
95,236
$
292,091
$
248,453
SOLAREDGE TECHNOLOGIES
INC.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES (Unaudited)
(in thousands, except per share
data and percentages)
Reconciliation of GAAP to
Non-GAAP
Three Months Ended
Nine Months Ended
September 30,
2022
June 30,
2022
September 30,
2021
September 30,
2022
September 30,
2021
Financial income (expense), net
(GAAP)
$
(33,025
)
$
(14,311
)
$
(5,751
)
$
(52,785
)
$
(13,591
)
Notes due 2025
730
728
726
2,186
2,175
Non cash interest
1,775
1,699
1,469
5,083
4,245
Currency fluctuation related to lease
standard
(1,116
)
(9,028
)
574
(11,936
)
(415
)
Financial income (expense), net
(Non-GAAP)
$
(31,636
)
$
(20,912
)
$
(2,982
)
$
(57,452
)
$
(7,586
)
Other income (GAAP)
$
7,533
$
—
$
—
$
7,533
$
—
Gain from sale of investment in
privately-held company
(7,533
)
—
—
(7,533
)
—
Other income (Non-GAAP)
$
—
$
—
$
—
$
—
$
—
Income tax benefit (expense)
(GAAP)
$
(34,172
)
$
(6,617
)
$
(7,615
)
$
(53,081
)
$
(24,294
)
Income tax adjustment
(291
)
(389
)
(2,528
)
(1,881
)
(6,458
)
Income tax benefit (expense)
(Non-GAAP)
$
(34,463
)
$
(7,006
)
$
(10,143
)
$
(54,962
)
$
(30,752
)
Net income (GAAP)
$
24,743
$
15,084
$
53,048
$
72,950
$
128,216
Revenues from finance component
(159
)
(146
)
(111
)
(440
)
(296
)
Disposal of assets related to Critical
Power
—
4,314
—
4,314
—
Stock-based compensation
35,751
37,074
26,185
106,932
73,390
Amortization and depreciation of acquired
assets
2,559
2,716
2,785
8,039
8,007
Assets impairment
(19
)
4,687
—
4,668
—
Loss (gain) from assets sales and
disposal
(744
)
8
(37
)
(1,146
)
(99
)
Other items
(1,559
)
—
—
(1,559
)
1,350
Notes due 2025
730
728
726
2,186
2,175
Non cash interest
1,775
1,699
1,469
5,083
4,245
Currency fluctuation related to lease
standard
(1,116
)
(9,028
)
574
(11,936
)
(415
)
Gain from sale of investment in
privately-held company
(7,533
)
—
—
(7,533
)
—
Income tax adjustment
(291
)
(389
)
(2,528
)
(1,881
)
(6,458
)
Net income (Non-GAAP)
$
54,137
$
56,747
$
82,111
$
179,677
$
210,115
SOLAREDGE TECHNOLOGIES
INC.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES (Unaudited)
(in thousands, except per share
data and percentages)
Reconciliation of GAAP to
Non-GAAP
Three Months Ended
Nine Months Ended
September 30,
2022
June 30,
2022
September 30,
2021
September 30,
2022
September 30,
2021
Net basic earnings per share
(GAAP)
$
0.44
$
0.27
$
1.01
$
1.33
$
2.46
Revenues from finance component
0.00
0.00
0.00
(0.01
)
0.00
Disposal of assets related to Critical
Power
—
0.08
—
0.08
—
Stock-based compensation
0.64
0.67
0.50
1.95
1.41
Amortization and depreciation of acquired
assets
0.05
0.04
0.05
0.15
0.15
Assets impairment
0.00
0.09
—
0.09
—
Loss (gain) from assets sales and
disposal
(0.02
)
0.00
0.00
(0.03
)
0.00
Other items
(0.02
)
—
—
(0.02
)
0.03
Notes due 2025
0.01
0.01
0.02
0.04
0.04
Non cash interest
0.03
0.03
0.03
0.09
0.08
Currency fluctuation related to lease
standard
(0.02
)
(0.16
)
0.01
(0.22
)
(0.01
)
Gain from sale of investment in
privately-held company
(0.13
)
—
—
(0.14
)
—
Income tax adjustment
(0.01
)
(0.01
)
(0.05
)
(0.03
)
(0.12
)
Net basic earnings per share
(Non-GAAP)
$
0.97
$
1.02
$
1.57
$
3.28
$
4.04
Net diluted earnings per share
(GAAP)
$
0.43
$
0.26
$
0.96
$
1.29
$
2.32
Revenues from finance component
0.00
0.00
0.00
(0.01
)
(0.01
)
Disposal of assets related to Critical
Power
—
0.08
—
0.08
—
Stock-based compensation
0.59
0.62
0.45
1.80
1.27
Amortization and depreciation of acquired
assets
0.05
0.04
0.05
0.13
0.14
Assets impairment
0.00
0.08
—
0.08
—
Loss (gain) from assets sales and
disposal
(0.02
)
0.00
0.00
(0.02
)
0.00
Other items
(0.02
)
—
—
(0.02
)
0.02
Notes due 2025
0.00
0.00
0.00
0.00
0.01
Non cash interest
0.03
0.03
0.03
0.09
0.08
Currency fluctuation related to lease
standard
(0.02
)
(0.15
)
0.01
(0.20
)
(0.01
)
Gain from sale of investment in
privately-held company
(0.13
)
—
—
(0.13
)
—
Income tax adjustment
0.00
(0.01
)
(0.05
)
(0.03
)
(0.11
)
Net diluted earnings per share
(Non-GAAP)
$
0.91
$
0.95
$
1.45
$
3.06
$
3.71
Number of shares used in computing net
diluted earnings per share (GAAP)
58,747,538
58,564,734
55,929,000
57,886,041
55,955,441
Stock-based compensation
784,228
904,781
653,967
872,076
733,488
Number of shares used in computing net
diluted earnings per share (Non-GAAP)
59,531,766
59,469,515
56,582,967
58,758,117
56,688,929
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221107005942/en/
Investor Contacts SolarEdge Technologies, Inc. Ronen
Faier, Chief Financial Officer +1 510-498-3263
investors@solaredge.com
Sapphire Investor Relations, LLC Erica Mannion or Michael Funari
+1 617-542-6180 investors@solaredge.com
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