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Share Name | Share Symbol | Market | Type |
---|---|---|---|
SolarEdge Technologies Inc | NASDAQ:SEDG | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.71 | -1.21% | 58.00 | 57.90 | 57.99 | 4,889 | 13:26:12 |
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☒
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
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20-5338862
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(State or other jurisdiction of
incorporation or organization)
|
|
(IRS Employer
Identification No.)
|
|
|
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1 HaMada Street
|
|
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Herziliya Pituach, Israel
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4673335
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(Address of Principal Executive Offices)
|
|
(Zip Code)
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Title of each class
|
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Name of each exchange on which registered
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Common stock, par value $0.0001 per share
|
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NASDAQ (Global Select Market)
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☒ Lar
ge accelerated filer
|
|
☐ Accelerated filer
|
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☐ Non-accelerated filer
(do not check if a
smaller reporting
company)
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☐ Smaller reporting company
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☐ Emerging growth company |
· |
our limited history of profitability, which may not continue in the future;
|
· |
our limited operating history, which makes it difficult to predict future results;
|
· |
future demand for solar energy solutions;
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· |
changes to net metering policies or the reduction, elimination or expiration of government subsidies and economic incentives for on-grid solar energy applications;
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· |
changes in the U.S. trade environment, including the recent imposition of import tariffs;
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· |
federal, state, and local regulations governing the electric utility industry with respect to solar energy;
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· |
the retail price of electricity derived from the utility grid or alternative energy sources;
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· |
interest rates and supply of capital in the global financial markets in general and in the solar market specifically;
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· |
competition, including introductions of power optimizer, inverter and solar
photovoltaic (“
PV”) system monitoring products by our competitors;
|
· |
developments in alternative technologies or improvements in distributed solar energy generation;
|
· |
historic cyclicality of the solar industry and periodic downturns;
|
· |
defects or performance problems in our products;
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· |
our ability to forecast demand for our products accurately and to match production with demand;
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· |
our dependence on ocean transportation to deliver our products in a cost-effective manner;
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· |
our dependence upon a small number of outside contract manufacturers and suppliers;
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· |
capacity constraints, delivery schedules, manufacturing yields, and costs of our contract manufacturers and availability of components;
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· |
delays, disruptions, and quality control problems in manufacturing;
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· |
shortages, delays, price changes, or cessation of operations or production affecting our suppliers of key components;
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· |
business practices and regulatory compliance of our raw material suppliers;
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· |
performance of distributors and large installers in selling our products;
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· |
our customer's financial stability, creditworthiness, and debt leverage ratio;
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· |
our ability to retain key personnel and attract additional qualified personnel;
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· |
our ability to effectively design, launch, market, and sell new generations of our products and services;
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our ability to maintain our brand and to protect and defend our intellectual property;
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our ability to retain, and events affecting, our major customers;
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our ability to manage effectively the growth of our organization and expansion into new markets;
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our ability to integrate acquired businesses;
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· |
fluctuations in global currency exchange rates;
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unrest, terrorism, or armed conflict in Israel;
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general economic conditions in our domestic and international markets;
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· |
consolidation in the solar industry among our customers and distributors; and
|
• |
Module mismatch.
Traditional inverter systems are unable to consistently produce maximum energy from PV modules. Each PV module in a system has a unique power production profile driven by differences in manufacturing and installation parameters. The architecture of traditional inverter systems does not allow each PV module to operate at its unique MPP. When PV modules are wired in series in a traditional inverter architecture, the entire string’s output is reduced, sometimes correlated directly to the output of the lowest‑performing PV module on the string. Output reduction can result from subtle variations in PV module composition, atmospheric conditions, soiling, individual PV module locations and orientations, or varying levels of PV module degradation over time.
|
• |
Partial shading.
Many real‑world factors can cause a subset of the PV modules in a system to be partially shaded, which can significantly affect the power output of the entire string. For instance, electric wires, a chimney or even adjacent solar panels may cast a shadow during particular hours of the day, or debris may accumulate. This partial shading reduces the yield of a traditional solar PV system by decreasing, or in extreme cases eliminating, power output from the shaded modules. Overall losses to system production from such partial shading can range from small to substantial.
|
• |
Dynamic maximum power point tracking loss.
The MPP of a PV module shifts constantly throughout the day as a result of atmospheric conditions. A traditional inverter system’s inability to coordinate output on a module‑by‑module basis makes it difficult for the system to respond dynamically to the shifting MPP. This inability to respond to the shifting MPP can reduce the potential power output of a traditional solar PV system by 3‑10%.
|
• |
Rooftop system design complexities.
A traditional inverter system requires each string to be of the same length, use the same type of PV modules and be positioned at the same angle toward the sun. Consequently, rooftop asymmetries and obstructions result in either wasted roof space or inefficient duplication of system components.
|
• |
Safety hazards.
Traditional inverter systems cannot shut down the DC output voltage at the PV module level. The DC cables from these modules carry high voltages as long as the sun is shining, even when the traditional inverter or the grid connection has been shut down. This poses serious risks to installers, fire fighters and anyone else who performs work on or around the installation. Such safety hazards have recently prompted heightened safety installation and operation procedures and regulations in a growing number of geographies, compliance with which increases the cost of traditional PV systems.
|
• |
No module level monitoring.
A traditional inverter system cannot track power output, temperature or any other attribute of a single PV module. Consequently, a system operator cannot perform remote diagnostics, track performance of PV system components or receive alerts about individual PV module status, and may be unaware of specific module‑level problems or breakdowns.
|
• |
Higher initial cost per watt and limited economies of scale.
Microinverters perform all the functionality of the traditional inverter, but at each PV module, and consequently a microinverter system has a higher initial upfront cost of components relative to traditional inverter architecture. In addition, as every PV module must have its own microinverter, the cost per watt of a microinverter system does not decrease with scale. As such, microinverters are generally more expensive than traditional inverter systems on a cost per watt basis for residential installations and not economically viable relative to traditional inverter systems for large commercial and utility installations.
|
• |
Grid Code Compliance.
With the growing penetration of solar energy, many utilities in individual U.S. states and Europe have adopted new sets of grid codes to preserve the stability of the electric grid. These grid codes require solar PV inverters to respond dynamically to variances in grid‑wide voltage, which typically requires inverter hardware and software to be reengineered. In most cases, adaptation to these new grid codes would require added costs and complexities, limiting the ability of microinverters to address some markets.
|
• |
Maximized PV module power output.
Our power optimizers provide module‑level MPP tracking and real‑time adjustments of current and voltage to the optimal working point of each individual PV module. This enables each PV module to continuously produce its maximum power potential independent of other modules in the same string, thus minimizing module mismatch and partial shading losses. By performing these adjustments at a very high rate, our power optimizers also solve the dynamic MPP losses associated with traditional inverters. Independent testing from Photon Laboratories as well as tests performed by PV Evolution Labs according to the National Renewable Energy Laboratory shade test have confirmed that our technology provides power harvesting that is superior to traditional inverter systems.
|
• |
Optimized architecture with economies of scale.
Our system shifts certain functions of the traditional inverter to our power optimizers while keeping the DC to AC function and grid interaction in our inverter. As a result, our inverter is smaller, more efficient, more reliable and less expensive than inverters used in traditional inverter systems. The cost savings that we have achieved on the inverter enable our system to be priced at a cost per watt that is comparable with traditional inverter systems of leading manufacturers. As a PV system grows in size, our inverter benefits from economies of scale, making our technology viable for large commercial and utility‑scale applications.
|
• |
Enhanced system design flexibility.
Unlike a traditional inverter system that requires each string to be the same length, use the same type of PV modules and be positioned at the same angle toward the sun, our system allows significant design flexibility by enabling the installer to place PV modules in uneven string lengths and on multiple roof facets. This design flexibility:
|
• |
increases the amount of the available roof that can be utilized for power production. Unlike traditional inverter systems, our system does not require each string to be the same length, use the same type of PV modules or be positioned at the same angle toward the sun. As a result, our system is significantly less prone to wasted roof space resulting from rooftop asymmetries and obstructions.
|
• |
reduces the number of field change orders. For example, some installers use remote tools to estimate the size and configuration of an installation in connection with the customer acquisition process. This is especially common for high‑volume residential arrays, where an exhaustive survey of rooftop obstructions would be uneconomical. In some cases, installers discover that their preliminary design, based on remote tools, cannot be implemented due to unexpected shading or other obstructions. With traditional inverter system designs, an obstructed module may require a significant system redesign and a modification of the customer contract to take into account the changed system design. Our DC optimized inverter solution enables an installer to compensate or adjust for most obstructions without materially changing the original design or requiring a modification to the customer contract.
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• |
Reduced balance of system costs.
Our DC optimized inverter system allows significantly longer strings to be connected to the same inverter (as compared to a traditional inverter system). This minimizes the cost of cabling, fuse boxes and other ancillary electric components. These factors together result in easier installation with shorter design times and a lower initial cost per watt, while enabling larger installations per rooftop.
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• |
Continuous monitoring and control to reduce operation and maintenance costs.
Our cloud‑based monitoring platform provides full data visibility at the module level, string level, inverter level and system level. The data can be accessed remotely by any web‑enabled device, allowing comprehensive analysis, immediate fault detection and alerts. These monitoring features reduce O&M costs for the system owner by identifying and locating faults, enabling remote testing and reducing field visits.
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• |
Enhanced safety.
We have incorporated module‑level safety mechanisms in our system to protect installers, electricians and firefighters. Each power optimizer is configured to reduce output to 1 volt unless the power optimizer receives a fail‑safe signal from a functioning inverter. As a result, if the inverter is shut down (e.g., for system maintenance, due to malfunction, in the event of a fire or otherwise), the DC voltage throughout the system is reduced to a safe level. In recent years, new safety standards have been introduced in the U.S. and in Europe that require or encourage the installation of safety measures such as these. Our DC optimized inverters comply with the applicable safety requirements of the areas in which they are sold, providing incremental cost savings to installers by eliminating the need for additional hardware such as DC breakers, switches or fire‑proof ducts required by traditional inverter systems.
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• |
High reliability.
Solar PV systems are typically expected to operate for at least 25 years under harsh outdoor conditions. High reliability is critical and is facilitated by systems and components that have low heat generation, solid and stable materials, and an absence of moving parts. We have designed our system to meet these stringent requirements. Our power optimizers dissipate much less heat than microinverters because no DC‑AC inversion occurs at the module level. As a result, less heat is dissipated beneath the PV module, which improves lifetime expectancy and reliability of our power optimizers. Our power optimizers’ high switching frequency allows the use of ceramic capacitors with a low, fixed rate of aging and a proven life expectancy in excess of 25 years. Further, we use automotive‑grade application specific integrated circuits (“ASICs”) that embed many of the required electronics into the ASIC. This reduces the number of components and consequently the potential points of failure.
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• |
product and system performance and features;
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• |
total cost of ownership;
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• |
PV module compatibility and interoperability;
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reliability and duration of product warranty;
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customer service and support;
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breadth of product line;
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local sales and distribution capabilities;
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compliance with applicable certifications and grid codes;
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size and financial stability of operations; and
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size of installed base.
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•
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cost competitiveness, reliability and performance of solar PV systems compared to conventional and non-solar renewable energy sources and products;
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•
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availability and amount of government subsidies and incentives to support the development and deployment of solar energy solutions;
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•
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the extent to which the electric power industry and broader energy industries are deregulated to permit broader adoption of solar electricity generation;
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•
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prices of traditional carbon-based energy sources;
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•
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levels of investment by end-users of solar energy products, which tend to decrease when economic growth slows; and
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•
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construction of a significant number of new power generation plants, including plants utilizing natural gas, nuclear, coal, renewable energy, or other generation technologies;
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•
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relief of transmission constraints that enable local centers to generate energy less expensively;
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•
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reductions in the price of natural gas;
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•
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utility rate adjustment and customer class cost reallocation;
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•
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energy conservation technologies and public initiatives to reduce electricity consumption;
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•
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development of smart-grid technologies that lower the peak energy requirements of a utility generation facility;
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development of new or lower-cost energy storage technologies that have the ability to reduce a customer’s average cost of electricity by shifting load to off-peak times; and
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•
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development of new energy generation technologies that provide less expensive energy.
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· |
the addition or loss of significant customers;
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· |
changes in laws or regulations applicable to our industry, products or services;
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speculation about our business in the press or the investment community;
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· |
price and volume fluctuations in the overall stock market;
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· |
volatility in the market price and trading volume of companies in our industry or companies that investors consider comparable;
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share price and volume fluctuations attributable to inconsistent trading levels of our shares;
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· |
our ability to protect our intellectual property and other proprietary rights;
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sales of our common stock by us or our significant stockholders, officers and directors;
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· |
the expiration of contractual lock-up agreements;
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· |
the development and sustainability of an active trading market for our common stock;
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· |
success of competitive products or services;
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· |
the public’s response to press releases or other public announcements by us or others, including our filings with the Securities and Exchange Commission (the “SEC”), announcements relating to litigation or significant changes to our key personnel;
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the effectiveness of our internal controls over financial reporting;
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· |
changes in our capital structure, such as future issuances of debt or equity securities;
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· |
our entry into new markets;
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tax developments in the U.S., Europe, or other markets;
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strategic actions by us or our competitors, such as acquisitions or restructurings; and
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changes in accounting principles.
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· |
authorizing “blank check” preferred stock that our board of directors could issue to increase the number of outstanding shares to discourage a takeover attempt;
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providing for a classified board of directors with staggered, three-year terms, which could delay the ability of stockholders to change the membership of a majority of our board of directors;
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not providing for cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;
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limiting the ability of stockholders to call a special stockholder meeting;
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prohibiting stockholders from acting by written consent;
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establishing advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings;
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· |
the removal of directors only for cause and only upon the affirmative vote of the holders of at least 66
2
/
3
% in voting power of all the then-outstanding shares of common stock of the Company entitled to vote thereon, voting together as a single class;
|
· |
providing that our board of directors is expressly authorized to amend, alter, rescind or repeal our by-laws; and
|
· |
requiring the affirmative vote of holders of at least 66
2
/
3
% of the voting power of all of the then outstanding shares of common stock, voting as a single class, to amend provisions of our certificate of incorporation relating to the management of our business, our board of directors, stockholder action by written consent, advance notification of stockholder nominations and proposals, calling special meetings of stockholders, forum selection and the liability of our directors, or to amend, alter, rescind, or repeal our by-laws.
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Fiscal Year Ended
June 30,
|
Six Months Ended December 31,
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Fiscal Year Ended
December 31,
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||||||||||||||||||||||
2014
|
2015
|
2016
|
2016
|
2017
|
2018
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
Consolidated Statements of Operations Data:
|
||||||||||||||||||||||||
Revenues
|
$
|
133,217
|
$
|
325,078
|
$
|
489,843
|
$
|
239,997
|
$
|
607,045
|
$
|
937,237
|
||||||||||||
Cost of revenues
|
111,246
|
243,295
|
337,887
|
159,097
|
392,279
|
618,001
|
||||||||||||||||||
Gross profit
|
21,971
|
81,783
|
151,956
|
80,900
|
214,766
|
319,236
|
||||||||||||||||||
Operating expenses:
|
||||||||||||||||||||||||
Research and development, net
|
18,256
|
22,018
|
33,231
|
20,279
|
54,966
|
82,245
|
||||||||||||||||||
Sales and marketing
|
17,792
|
24,973
|
34,833
|
20,444
|
50,032
|
68,307
|
||||||||||||||||||
General and administrative
|
4,294
|
6,535
|
12,133
|
6,790
|
18,682
|
29,264
|
||||||||||||||||||
Total operating expenses
|
40,342
|
53,526
|
80,197
|
47,513
|
123,680
|
179,816
|
||||||||||||||||||
Operating income (loss)
|
(18,371
|
)
|
28,257
|
71,759
|
33,387
|
91,086
|
139,420
|
|||||||||||||||||
Financial income (expenses)
|
(2,787
|
)
|
(5,077
|
)
|
471
|
(2,789
|
)
|
9,158
|
(2,297
|
)
|
||||||||||||||
Other expenses
|
—
|
104
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Income (loss) before taxes on income
|
(21,158
|
)
|
23,076
|
72,230
|
30,598
|
100,244
|
137,123
|
|||||||||||||||||
Taxes on income (tax benefit)
|
220
|
1,955
|
(4,379
|
)
|
5,217
|
16,072
|
9,077
|
|||||||||||||||||
Net income (loss)
|
$
|
(21,378
|
)
|
$
|
21,121
|
$
|
76,609
|
$
|
25,381
|
$
|
84,172
|
$
|
128,046
|
|||||||||||
Net loss attributable to Non-controlling interests
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
787
|
||||||||||||
Net income attributable to SolarEdge Technologies Inc.
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
128,833
|
||||||||||||
Net basic earnings (loss) per share of common stock attributable to SolarEdge Technologies, Inc.
|
$
|
(7.64
|
)
|
$
|
0.30
|
$
|
1.92
|
$
|
0.62
|
$
|
1.99
|
$
|
2.85
|
|||||||||||
Net diluted earnings (loss) per share of common stock attributable to SolarEdge Technologies, Inc.
|
$
|
(7.64
|
)
|
$
|
0.27
|
$
|
1.73
|
$
|
0.58
|
$
|
1.85
|
$
|
2.69
|
|||||||||||
Weighted average number of shares used in computing net basic earnings (loss) per share of common stock
|
2,798,894
|
11,902,911
|
39,987,935
|
41,026,926
|
42,209,238
|
45,235,310
|
||||||||||||||||||
Weighted average number of shares used in computing net diluted earnings (loss) per share of common stock
|
2,798,894
|
15,269,448
|
44,376,075
|
43,839,342
|
45,425,307
|
47,980,002
|
As of June 30,
|
As of December 31, | |||||||||||||||||||||||
2014
|
2015
|
2016
|
2016
|
2017
|
2018
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
Consolidated Balance Sheet Data:
|
||||||||||||||||||||||||
Cash and cash equivalents
|
$
|
9,754
|
$
|
144,750
|
$
|
74,032
|
$
|
104,683
|
$
|
163,163
|
$
|
191,633
|
||||||||||||
Available-for-sale marketable securities
|
-
|
-
|
111,609
|
118,727
|
180,384
|
192,936
|
||||||||||||||||||
Total assets
|
74,998
|
305,658
|
397,438
|
424,743
|
641,305
|
964,472
|
||||||||||||||||||
Total debt
|
20,244
|
-
|
-
|
-
|
-
|
20,149
|
||||||||||||||||||
Total stockholders’ equity (deficiency)
|
$
|
(135,294
|
)
|
$
|
166,944
|
$
|
256,108
|
$
|
288,778
|
$
|
397,467
|
$
|
570,726
|
Fiscal Year Ended June 30,
|
Six Months Ended December 31,
|
Fiscal Years Ended
December 31,
|
||||||||||||||
2016
|
2016
|
2017
|
2018
|
|||||||||||||
Inverters shipped
|
223,589
|
120,117
|
317,288
|
455,793
|
||||||||||||
Power optimizers shipped
|
5,738,546
|
2,904,858
|
7,367,921
|
11,351,678
|
||||||||||||
Megawatts shipped(1)
|
1,615
|
880
|
2,461
|
3,919
|
(1) |
Calculated based on the aggregate nameplate capacity of inverters shipped during the applicable period. Nameplate capacity is the maximum rated power output capacity of an inverter as specified by the manufacturer. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Performance Measures”.
|
• |
In 2012, we shipped our millionth power optimizer and increased our sales personnel presence in the U.S. market.
|
• |
In 2013, we introduced our third generation power optimizer, based on our third generation ASIC, with a power rating of up to 700 watts and improved heat dissipation capabilities for high reliability and lower cost.
|
• |
In March 2015, we completed our initial public offering and started to trade on the NASDAQ Global Select Market under the ticker SEDG.
|
• |
In September 2015, we released information about the development of our new HD-Wave inverter technology.
|
• |
In January 2016, we announced the immediate international availability of our StorEdge solution.
|
• |
In February 2016, we shipped our ten millionth power optimizer.
|
• |
In June 2016, we received the Intersolar Award in the Photovoltaics category for our HD-Wave technology inverter and began shipments of our HD-Wave inverter.
|
• |
In May 2017, we unveiled our new S-Series power optimizer, an Intersolar Award Finalist in the Photovoltaics category.
|
• |
In July 2017, we launched the world’s first inverter-integrated electric vehicle (EV) charger, supplementing grid power with PV power.
|
• |
In September 2017, we approved an expansion for our residential offering in Australia with higher production of single-phase inverters and launched a line of three-phase inverters.
|
• |
In September 2017, we released our DC optimized inverter solution in South Korea.
|
• |
In January 2018, we launched together with Omron Corporation, a new DC optimized inverter solution for Japan’s high-voltage PV market.
|
• |
In February 2018, we launched our StorEdge Solution with power backup for European PV markets.
|
• |
In April 2018, we were announced as the Gold Winner of the Edison Awards™ for our HD-Wave inverter technology, in the Renewable Energy Category.
|
• |
In May 2018, we released our new innovative grid services and virtual power plant solution.
|
• |
In May 2018, we entered into the UPS market with the purchase of the assets of Gamatronic.
|
• |
In August 2018, we were awarded the Straus Award in the Cloud Computing category for our grid services and virtual power plant solution.
|
• |
In October 2018, we announced our acquisition of Kokam, a leading provider of lithium-ion cells, batteries and energy storage solutions.
|
Year ended December 31,
|
2017 to 2018
|
|||||||||||||||
2017
|
2018
|
Change
|
||||||||||||||
(In thousands)
|
||||||||||||||||
Revenues
|
$
|
607,045
|
$
|
937,237
|
$
|
330,192
|
54.4
|
%
|
||||||||
Cost of revenues
|
392,279
|
618,001
|
225,722
|
57.5
|
%
|
|||||||||||
Gross profit
|
214,766
|
319,236
|
104,470
|
48.6
|
%
|
|||||||||||
Operating expenses:
|
||||||||||||||||
Research and development
|
54,966
|
82,245
|
27,279
|
49.6
|
%
|
|||||||||||
Sales and marketing
|
50,032
|
68,307
|
18,275
|
36.5
|
%
|
|||||||||||
General and administrative
|
18,682
|
29,264
|
10,582
|
56.6
|
%
|
|||||||||||
Total operating expenses
|
123,680
|
179,816
|
56,136
|
45.4
|
%
|
|||||||||||
Operating income
|
91,086
|
139,420
|
48,334
|
53.1
|
%
|
|||||||||||
Financial income (expenses)
|
9,158
|
(2,297
|
)
|
11,455
|
N/A
|
|||||||||||
Income before taxes on income
|
100,244
|
137,123
|
36,879
|
36.8
|
%
|
|||||||||||
Taxes on income
|
16,072
|
9,077
|
(6,995
|
)
|
(43.5
|
)%
|
||||||||||
Net income
|
$
|
84,172
|
$
|
128,046
|
$
|
43,874
|
52.1
|
%
|
||||||||
Net loss attributable to Non-controlling interests
|
-
|
787
|
787
|
N/A
|
||||||||||||
Net income attributable to SolarEdge Technologies Inc.
|
$
|
84,172
|
$
|
128,833
|
$
|
44,661
|
53.1
|
%
|
Year Ended
December 31, |
2017 to 2018 |
|||||||||||||||
2017
|
2018
|
Change
|
||||||||||||||
(In thousands)
|
||||||||||||||||
Revenues
|
$
|
607,045
|
$
|
937,237
|
$
|
330,192
|
54.4
|
%
|
· |
a change in the mix of products, yielding a higher portion of sales of commercial products that are characterized with lower ASP per Watt in comparison to residential products;
|
· |
we initiated price reductions of our commercial products in order to increase market share in this segment;
|
· |
the introduction of new commercial products with higher capacity which carry a lower ASP per watt; and
|
· |
selective price decreases of our residential products
|
Year Ended
December 31, |
2017 to 2018
|
|||||||||||||||
2017
|
2018
|
Change
|
||||||||||||||
(In thousands)
|
||||||||||||||||
Cost of revenues
|
$
|
392 ,279
|
$
|
618,001
|
$
|
225,722
|
57.5
|
%
|
||||||||
Gross profit
|
$
|
214,766
|
$
|
319,236
|
$
|
104,470
|
48.6
|
%
|
· |
an increase in the volume of products sold;
|
· |
increased warranty expenses of $35.1 million associated with the rapid increase in our install base;
|
· |
increased shipment and logistical costs of $16.1 million attributed, in part, to the growth in volumes shipped, an increase of customs tariff in the US and an increase in air shipments due to power component shortages;
|
· |
increased fixed and variable costs related to the manufacturing of Kokam related products and the assembly of UPS products in the amount of $14.7 million; and
|
· |
increased personnel-related costs of $13.1 million related to the expansion of our operations and support headcount which is growing in parallel to our growing install base worldwide and as result of the acquisition of our UPS and battery divisions ;
|
· |
increased warranty and support services expenses and accruals;
|
· |
price reduction to customers at a rate higher than our cost reduction;
|
· |
lower gross profit on UPS and battery products due to underutilization of production facilities, as well as
certain transactions for the sale of batteries with low gross profit, which had been entered into prior to closing the Kokam Acquisition
; and
|
· |
amortization of intangible assets and cost of product adjustment related to the UPS assets acquisition and Kokam Acquisition;
|
· |
reductions in per-unit production costs
that exceeded price erosion of our products;
|
· |
increased efficiency in our supply chain; and
|
· |
general economies of scale in our personnel-related costs and other costs associated with our support and operations departments.
|
Year Ended
December 31 |
2017 to 2018
|
|||||||||||||||
2017
|
2018
|
Change
|
||||||||||||||
(In thousands)
|
||||||||||||||||
Research and development
|
$
|
54,966
|
$
|
82,245
|
$
|
27,279
|
49.6
|
%
|
· |
an increase in personnel-related costs of $21.2 million as a result of an increased headcount of engineers, as well as hiring Gamatronic's employees and the consolidation of Kokam's employees. The increase in headcount reflects our continuing investment in enhancements of existing products as well as development associated with bringing new products to market;
|
· |
depreciation expenses related to lab equipment and amortization expenses related to intangible assets increased by $2.1 million;
|
· |
materials consumption for development increased by $1.5 million, part of it related to Kokam activities;
|
· |
expenses related to other directly related overhead costs that increased by $1.1 million;
|
· |
expenses related to consultants and sub‑contractors that increased by $1.1 million; and
|
· |
Other expenses, including travel expenses increased by $0.3 million.
|
Year Ended
December 31, |
2017 to 2018
|
|||||||||||||||
2017
|
2018
|
Change
|
||||||||||||||
(In thousands)
|
||||||||||||||||
Sales and marketing
|
$
|
50,032
|
$
|
68,307
|
$
|
18,275
|
36.5
|
%
|
· |
an increase in personnel-related costs of $14.6 million as a result of (i) an increase in headcount supporting our growth in the U.S., Europe
Asia and the rest of the world, (ii) salary
expenses associated with employee equity compensation resulting from the impact of the increase in our stock price affecting the fair value of any share award, and (iii) hiring Gamatronic's employees and the consolidation of Kokam's employees;
|
· |
expenses related to travel increased by $1.0 million;
|
· |
expenses related to trade shows and marketing activities increased by $1.0 million;
|
· |
expenses related to other overhead costs increased by $0.6 million;
|
· |
depreciation expenses related to tangible assets and amortization expenses
related to intangible assets
increased by $0.6 million; and
|
· |
expenses related to consultants and sub‑contractors increased by $0.5 million.
|
Year Ended
December 31, |
2017 to 2018
|
|||||||||||||||
2017
|
2018
|
Change
|
||||||||||||||
(In thousands)
|
||||||||||||||||
General and administrative
|
$
|
18,682
|
$
|
29,264
|
$
|
10,582
|
56.6
|
%
|
· |
an increase in personnel-related costs of $5.8 million related to (i) higher headcount in the legal, finance, human resources, and information technology department, functions required of a fast-growing public company, (ii) changes in management compensation and increased expenses related to equity-based compensation resulting from the impact of the increase in our stock price affecting the fair value of any share award and (iii) hiring Gamatronic's employees and the consolidation of Kokam's employees;
|
· |
expenses related to external consultants and sub-contractors increased by $3.9 million due to legal proceedings initiated by us and other consulting expenses in relation to the Gamatronic Acquisition and the Kokam Acquisition;
|
· |
expenses related to other overhead costs increased by $0.6 million;
|
· |
expenses related to travel increased by $0.5 million;
|
· |
increase of $0.4 million in 2018 due to the disposal of fixed assets; and
|
· |
depreciation expenses increased by $0.3 million.
|
Year Ended
December 31, |
2017 to 2018
|
|||||||||||||||
2017
|
2018
|
Change
|
||||||||||||||
(In thousands)
|
||||||||||||||||
Financial Income (Expenses)
|
$
|
9,158
|
$
|
(2,297
|
)
|
$
|
(11,455
|
)
|
N/A
|
· |
an increase of $13.3 million in foreign exchange fluctuations mostly between the Euro and the New Israeli Shekel against the U.S. Dollar; and
|
· |
an increase of $2.4 million in interest expenses,
mainly related to advance payments received for performance obligations that extend for a period greater than one year, as part of the adoption of Accounting Standards Codification 606, Revenue from Contracts with Customers (ASC 606).
|
· |
an increase of $2.2 million in interest income and accretion (amortization) of discount (premium) on marketable securities; and
|
· |
a decrease of $2.0 million in costs related to hedging transactions in 2018, as compared to 2017.
|
Year Ended
December 31, |
2017 to 2018
|
|||||||||||||||
2017
|
2018
|
Change
|
||||||||||||||
(In thousands)
|
||||||||||||||||
Taxes on income
|
$
|
16,072
|
$
|
9,077
|
$
|
(6,995
|
)
|
(43.5
|
)%
|
· |
a one-time transition tax net decrease of $1.3 million in 2018 as compared to an increase of $18.7 million in 2017 on the federal mandatory deemed repatriation of cumulative foreign earnings; and
|
· |
a decrease of $1.6 million in deferred tax assets (presented as tax income).
|
· |
a tax provision of $12.0 million in the year ended December 31, 2018, with respect to Global Intangible Low Taxed Income inclusion;
|
· |
an increase of $1.7 million in other
current tax expenses in the US;
and
|
· |
an increase
of $0.9 million in current tax expenses in all jurisdictions.
|
Year Ended
December 31, |
2017 to 2018
|
|||||||||||||||
2017
|
2018
|
Change
|
||||||||||||||
(In thousands)
|
||||||||||||||||
Net income
|
$
|
84,172
|
$
|
128,046
|
$
|
43,874
|
52.1
|
%
|
Year ended December 31,
|
2016 to 2017
|
|||||||||||||||
2016
(unaudited)
|
2017
|
Change
|
||||||||||||||
(In thousands)
|
||||||||||||||||
Revenues
|
$
|
489,954
|
$
|
607,045
|
$
|
117,091
|
23.9
|
%
|
||||||||
Cost of revenues
|
329,207
|
392,279
|
63,072
|
19.2
|
%
|
|||||||||||
Gross profit
|
160,747
|
214,766
|
54,019
|
33.6
|
%
|
|||||||||||
Operating expenses:
|
||||||||||||||||
Research and development, net
|
38,220
|
54,966
|
16,746
|
43.8
|
%
|
|||||||||||
Sales and marketing
|
38,200
|
50,032
|
11,832
|
31.0
|
%
|
|||||||||||
General and administrative
|
13,317
|
18,682
|
5,365
|
40.3
|
%
|
|||||||||||
Total operating expenses
|
89,737
|
123,680
|
33,943
|
37.8
|
%
|
|||||||||||
Operating income
|
71,010
|
91,086
|
20,076
|
28.3
|
%
|
|||||||||||
Financial income (expenses)
|
(1,287
|
)
|
9,158
|
10,445
|
N/A
|
|||||||||||
Income before taxes on income
|
69,723
|
100,244
|
30,521
|
43.8
|
%
|
|||||||||||
Taxes on income
|
6,270
|
16,072
|
9,802
|
156.3
|
%
|
|||||||||||
Net income
|
$
|
63,453
|
$
|
84,172
|
$
|
20,719
|
32.7
|
%
|
Year Ended
December 31, |
2016 to 2017 |
|||||||||||||||
2016
(unaudited)
|
2017
|
Change
|
||||||||||||||
(In thousands)
|
||||||||||||||||
Revenues
|
$
|
489,954
|
$
|
607,045
|
$
|
117,091
|
23.9
|
%
|
Year Ended
December 31, |
2016 to 2017
|
|||||||||||||||
2016
(unaudited)
|
2017
|
Change
|
||||||||||||||
(In thousands)
|
||||||||||||||||
Cost of revenues
|
$
|
329,207
|
$
|
392 ,279
|
$
|
63,072
|
19.2
|
%
|
||||||||
Gross profit
|
$
|
160,747
|
$
|
214,766
|
$
|
54,019
|
33.6
|
%
|
· |
an increase in the volume of products sold;
|
· |
increased warranty expenses and warranty accruals of $5.3 million associated with the rapid increase in our install base;
|
· |
increased shipment and logistical costs of $11.1 million attributed, in part, to the growth in volumes shipped, and to an increase in air shipments caused by power component shortages; and
|
· |
increased personnel-related costs of $8.9 million connected to the expansion of our operations and increased support headcount which is growing in parallel with our growing install base worldwide.
|
· |
reductions in per-unit production costs
that exceeded price erosion of our products;
|
· |
increased efficiency in our supply chain;
|
· |
lower costs associated with warranty product replacements; and
|
· |
general economies of scale in our personnel-related costs and other costs associated with our support and operations departments.
|
Year Ended
December 31, |
2016 to 2017
|
|||||||||||||||
2016
(unaudited)
|
2017
|
Change
|
||||||||||||||
(In thousands)
|
||||||||||||||||
Research and development, net
|
$
|
38,220
|
$
|
54,966
|
$
|
16,746
|
43.8
|
%
|
· |
an increase in personnel-related costs of $11.7 million as a result of an increased headcount of engineers. The increase in headcount reflects our continuing investment in enhancements of existing products as well as development associated with bringing new products to market;
|
· |
expenses related to other directly related overhead costs that increased by $2.2 million;
|
· |
expenses related to consultants and sub‑contractors that increased by $1.1 million;
|
· |
depreciation expenses related to lab equipment that increased by $1.0 million; and
|
· |
materials consumption for development, travel expenses and other expenses that increased by $0.7 million.
|
Year Ended
December 31, |
2016 to 2017
|
|||||||||||||||
2016
(unaudited)
|
2017
|
Change
|
||||||||||||||
(In thousands)
|
||||||||||||||||
Sales and marketing
|
$
|
38,200
|
$
|
50,032
|
$
|
11,832
|
31.0
|
%
|
· |
an increase in personnel-related costs of $9.0 million as a result of an increase in headcount supporting our growth in the U.S., Europe,
and Asia, as well as salary increases
;
|
· |
expenses related to consultants and sub‑contractors that increased by $0.9 million;
|
· |
expenses related to trade shows and marketing activities that increased by $0.8 million;
|
· |
expenses related to other directly related overhead costs that increased by $0.7 million; and
|
· |
expenses related to travel that increased by $0.4 million.
|
Year Ended
December 31, |
2016 to 2017
|
|||||||||||||||
2016
(unaudited)
|
2017
|
Change
|
||||||||||||||
(In thousands)
|
||||||||||||||||
General and administrative
|
$
|
13,317
|
$
|
18,682
|
$
|
5,365
|
40.3
|
%
|
· |
an increase in personnel-related costs of $2.5 million related to (i) higher headcount in the legal, finance, human resources, and information technology department, functions required of a fast-growing public company and (ii) increased expenses related to equity-based compensation and changes in management compensation;
|
· |
legal expenses increased by $1.8 million mainly due to legal proceedings initiated by us during 2017 and settled by the end of 2017
;
|
· |
costs related to the accrual of doubtful debts increased by $0.7 million; and
|
· |
other overhead costs, costs related to being a public company and depreciation, all of which increased by $0.4 million.
|
Year Ended
December 31, |
2016 to 2017
|
|||||||||||||||
2016
(unaudited)
|
2017
|
Change
|
||||||||||||||
(In thousands)
|
||||||||||||||||
Financial Income (Expenses)
|
$
|
(1,287
|
)
|
$
|
9,158
|
$
|
10,445
|
N/A
|
· |
an increase of $10.6 million in foreign exchange fluctuations between the Euro and the New Israeli Shekel against the U.S. Dollar; and
|
· |
an increase of $1.0 million in interest income,
net of accretion (amortization) of discount (premium) on marketable securities.
|
Year Ended
December 31, |
2016 to 2017
|
|||||||||||||||
2016
(unaudited)
|
2017
|
Change
|
||||||||||||||
(In thousands)
|
||||||||||||||||
Taxes on income
|
$
|
6,270
|
$
|
16,072
|
$
|
9,802
|
156.3
|
%
|
· |
a one-time transition tax of $18.7 million on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017;
|
· |
an increase of $0.6 million in
current tax expenses;
|
· |
an increase of $9.2 million in deferred tax assets (presented as tax income);
and
|
· |
$0.3 million of income related to the previous year’s tax credit.
|
Year Ended
December 31, |
2016 to 2017
|
|||||||||||||||
2016
(unaudited)
|
2017
|
Change
|
||||||||||||||
(In thousands)
|
||||||||||||||||
Net income
|
$
|
63,453
|
$
|
84,172
|
$
|
20,719
|
32.7
|
%
|
Six Months Ended December 31,
|
2015 to 2016
|
|||||||||||||||
2015
(unaudited) |
2016
|
Change
|
||||||||||||||
(In thousands)
|
||||||||||||||||
Revenues
|
$
|
239,886
|
$
|
239,997
|
$
|
111
|
0.0
|
%
|
||||||||
Cost of revenues
|
167,777
|
159,097
|
(8,680
|
)
|
(5.2
|
)%
|
||||||||||
Gross profit
|
72,109
|
80,900
|
8,791
|
12.2
|
%
|
|||||||||||
Operating expenses:
|
||||||||||||||||
Research and development, net
|
15,290
|
20,279
|
4,989
|
32.6
|
%
|
|||||||||||
Sales and marketing
|
17,077
|
20,444
|
3,367
|
19.7
|
%
|
|||||||||||
General and administrative
|
5,606
|
6,790
|
1,184
|
21.1
|
%
|
|||||||||||
Total operating expenses
|
37,973
|
47,513
|
9,540
|
25.1
|
%
|
|||||||||||
Operating income
|
34,136
|
33,387
|
(749
|
)
|
(2.2
|
)%
|
||||||||||
Financial expenses
|
1,031
|
2,789
|
1,758
|
170.5
|
%
|
|||||||||||
Income before taxes on income
|
33,105
|
30,598
|
(2,507
|
)
|
(7.6
|
)%
|
||||||||||
Taxes on income (tax benefit)
|
(5,432
|
)
|
5,217
|
10,649
|
N/A
|
|||||||||||
Net income
|
$
|
38,537
|
$
|
25,381
|
$
|
(13,156
|
)
|
(34.1
|
)%
|
· |
Revenues for the six-month period ended December 31, 2016 remained stable when compared to revenues in the same period in the prior year.
|
· |
An increase of $8.8 million in gross profit principally due to:
|
o |
Reductions in per unit production costs
|
o |
Installation of automatic assembly line for optimizers and self-manufacturing of sub components
|
o |
Lower costs associated with warranty product replacements
|
o |
Cash received from our insurance company covering a bad debt from a former customer that declared bankruptcy
|
· |
An increase of $9.5 million in operating expenses principally due to:
|
o |
Increase in personnel-related costs to support (1) our continuing investment in enhancements of existing products as well as development associated with bringing new products to market; (2) our growth in the U.S., European, and other markets such as Australia and Japan; and (3) higher headcount in the legal, finance, human resources, and information technology department functions required of a fast-growing publicly-traded company
|
· |
An increase of $1.8 million in financial
expenses mainly due to:
|
o |
Foreign exchange fluctuations between the Euro and the New Israeli Shekel against the U.S. Dollar
|
· |
An increase of $10.6 million in tax expenses
principally
due to:
|
o |
A reversal of deferred tax assets recorded during fiscal 2016
|
o |
Exhaustion of carry forwards of net operating loss balances related to our past losses
|
Fiscal Year ended June 30,
|
Six Months Ended December 31,
|
Fiscal Year ended
December 31,
|
||||||||||||||
2016
|
2016
|
2017
|
2018
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Net cash provided by operating activities
|
$
|
52,427
|
$
|
49,098
|
$
|
136,665
|
$
|
189,079
|
||||||||
Net cash used in investing activities
|
(125,837
|
)
|
(19,747
|
)
|
(85,407
|
)
|
(152,628
|
)
|
||||||||
Net cash provided by financing activities
|
2,779
|
1,284
|
7,240
|
(7,955
|
)
|
|||||||||||
Increase (decrease) in cash and cash equivalents
|
$
|
(70,631
|
)
|
$
|
30,635
|
$
|
58,498
|
$
|
28,496
|
Payment Due By Period
|
||||||||||||||||||||
Total
|
Less
Than 1 Year |
1 – 3
Years |
4 – 5
Years |
More
Than 5 Years |
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Operating leases(1)
|
$
|
21,417
|
$
|
6,933
|
$
|
7,310
|
$
|
4,730
|
$
|
2,444
|
||||||||||
Purchase commitments under agreements(2)
|
262,979
|
262,979
|
-
|
-
|
-
|
|||||||||||||||
Capital expenditures(3)
|
40,052
|
40,052
|
-
|
-
|
-
|
|||||||||||||||
Total
|
$
|
324,448
|
$
|
309,964
|
$
|
7,310
|
$
|
4,730
|
$
|
2,444
|
(1) |
Represents future minimum lease commitments under non‑cancellable operating lease agreements through which we lease our operating facilities.
|
(2) |
Represents non‑cancelable amounts associated with our manufacturing contracts. Such purchase commitments are based on our forecasted manufacturing requirements and typically provide for fulfillment within agreed‑upon or commercially standard lead‑times for the particular part or product. The timing and amounts of payments represent our best estimates and may change due to business needs and other factors.
|
(3) |
Represents non‑cancelable amounts associated with purchases of automated assembly lines and other machinery related to our manufacturing.
|
Consolidated Financial Statements
|
|
F-2
|
|
F-5
|
|
F-7
|
|
F-8
|
|
F-9
|
|
F-11
|
|
F-13
|
Mar. 31,
2017 |
June 30,
2017 |
Sept. 30,
2017 |
Dec. 31,
2017 |
Mar. 31,
2018 |
June 30,
2018 |
Sept. 30,
2018 |
Dec. 31,
2018 |
|||||||||||||||||||||||||
(In thousands, unaudited)
|
||||||||||||||||||||||||||||||||
Revenues
|
$
|
115,054
|
$
|
136,099
|
$
|
166,552
|
$
|
189,340
|
$
|
209,871
|
$
|
227,118
|
$
|
236,578
|
$
|
263,670
|
||||||||||||||||
Cost of revenues
|
76,378
|
89,033
|
108,498
|
118,370
|
130,274
|
145,172
|
158,596
|
183,959
|
||||||||||||||||||||||||
Gross profit
|
38,676
|
47,066
|
58,054
|
70,970
|
79,597
|
81,946
|
77,982
|
79,711
|
||||||||||||||||||||||||
Operating expense
|
||||||||||||||||||||||||||||||||
Research and development
|
11,458
|
12,725
|
14,363
|
16,420
|
17,875
|
19,551
|
20,109
|
24,710
|
||||||||||||||||||||||||
Sales and marketing
|
10,775
|
11,961
|
13,217
|
14,079
|
16,205
|
15,954
|
16,938
|
19,210
|
||||||||||||||||||||||||
General and administrative
|
4,439
|
3,265
|
5,078
|
5,900
|
4,753
|
5,776
|
6,898
|
11,837
|
||||||||||||||||||||||||
Total operating expenses
|
26,672
|
27,951
|
32,658
|
36,399
|
38,833
|
41,281
|
43,945
|
55,757
|
||||||||||||||||||||||||
Operating income
|
12,004
|
19,115
|
25,396
|
34,571
|
40,764
|
40,665
|
34,037
|
23,954
|
||||||||||||||||||||||||
Financial income (expenses)
|
1,410
|
3,595
|
2,666
|
1,487
|
584
|
(2,480
|
)
|
(689
|
)
|
288
|
||||||||||||||||||||||
Income before taxes on income
|
13,414
|
22,710
|
28,062
|
36,058
|
41,348
|
38,185
|
33,348
|
24,242
|
||||||||||||||||||||||||
Taxes on income (tax benefit)
|
(761
|
)
|
186
|
91
|
16,556
|
5,662
|
3,617
|
(12,295
|
)
|
12,093
|
||||||||||||||||||||||
Net income
|
$
|
14,175
|
$
|
22,524
|
$
|
27,971
|
$
|
19,502
|
$
|
35,686
|
$
|
34,568
|
$
|
45,643
|
$
|
12,149
|
||||||||||||||||
Net loss attributable to noncontrolling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
787
|
||||||||||||||||||||||||
Net income attributable to SolarEdge Technologies Inc.
|
$
|
14,175
|
$
|
22,524
|
$
|
27,971
|
$
|
19,502
|
$
|
35,686
|
$
|
34,568
|
$
|
45,643
|
$
|
12,936
|
Name
|
Age
(1)
|
Position(s) Held
|
||
Guy Sella
|
54
|
Chief Executive Officer and Chairman of the Board
|
||
Ronen Faier
|
47
|
Chief Financial Officer
|
||
Rachel Prishkolnik
|
50
|
Vice President, General Counsel & Corporate Secretary
|
||
Zvi Lando
|
54
|
Vice President, Global Sales
|
||
Lior Handelsman
|
45
|
Vice President, Marketing and Product Strategy
|
||
Yoav Galin
|
45
|
Vice President, Research & Development
|
||
Meir Adest
|
43
|
Chief Information Officer
|
Name
|
Age
(1)
|
Position(s) Held
|
||
Guy Sella
|
54
|
Chief Executive Officer and Chairman of the Board
|
||
Dan Avida
|
55
|
Director*
|
||
Yoni Cheifetz
|
58
|
Director*
|
||
Marcel Gani
|
66
|
Director*
|
||
Doron Inbar
|
69
|
Director*
|
||
Avery More
|
64
|
Director*
|
||
Tal Payne
|
47
|
Director*
|
ITEM 12. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
Plan Category
|
Number of securities to be issued upon exercise of outstanding stock awards(a)
|
Weighted-average exercise price of outstanding stock awards
(b)
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
(c)
|
|||||||||
Equity compensation plans approved by security holders
(1)
|
5,263,991
|
$
|
5.06
|
3,822,355
|
||||||||
Equity compensation plans not approved by security holders
|
—
|
—
|
—
|
|||||||||
Total
|
5,263,991
|
$
|
5.06
|
3,822,355
|
(1) |
Includes in column (a) 3,812,812 shares of common stock issuable upon exercise of stock awards outstanding under the Company’s 2015 Global Incentive Plan, 1,451,179 shares of common stock issuable upon exercise of options outstanding under the Company’s 2007 Global Incentive Plan. Includes in column (c) 2,468,721 shares of common stock available for future issuance under the Company’s 2015 Global Incentive Plan and 1,353,634 shares of common stock available for future issuance under the Company’s Employee Stock Purchase Plan. Upon consummation of our initial public offering, the Company’s 2007 Global Incentive Plan was terminated and no further awards can be granted under this plan.
|
Page
|
|
F-2
|
|
F-5
|
|
F-7
|
|
F-8
|
|
F-9
|
|
F-11
|
|
F-13
|
Tel-Aviv, Israel
|
|
February 28, 2019
|
Tel-Aviv, Israel
|
|
February 28, 2019
|
December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
ASSETS
|
||||||||||||
CURRENT ASSETS:
|
||||||||||||
Cash and cash equivalents
|
$
|
191,633
|
$
|
163,163
|
$
|
104,683
|
||||||
Short-term bank deposits
|
6,001
|
-
|
-
|
|||||||||
Restricted cash
|
1,628
|
1,516
|
897
|
|||||||||
Marketable securities
|
118,680
|
77,264
|
74,465
|
|||||||||
Trade receivables, net
|
173,579
|
109,528
|
71,041
|
|||||||||
Prepaid expenses and other current assets
|
45,073
|
42,223
|
21,347
|
|||||||||
Inventories
|
141,519
|
82,992
|
67,363
|
|||||||||
Total
current assets
|
678,113
|
476,686
|
339,796
|
|||||||||
LONG-TERM ASSETS:
|
||||||||||||
Marketable securities
|
74,256
|
103,120
|
44,262
|
|||||||||
Property, plant and equipment , net
|
119,329
|
51,182
|
36,122
|
|||||||||
Deferred tax assets, net
|
14,699
|
8,340
|
2,815
|
|||||||||
Intangible assets, net
|
38,504
|
1,115
|
1,259
|
|||||||||
Goodwill
|
34,874
|
-
|
-
|
|||||||||
Other non-current assets
|
4,697
|
862
|
489
|
|||||||||
Total
long term assets
|
286,359
|
164,619
|
84,947
|
|||||||||
Total
assets
|
$
|
964,472
|
$
|
641,305
|
$
|
424,743
|
Year ended December 31,
|
Six months
ended December
31, 2016
|
Year ended
June
30, 2016 |
||||||||||||||
2018
|
2017
|
|||||||||||||||
Revenues
|
$
|
937,237
|
$
|
607,045
|
$
|
239,997
|
$
|
489,843
|
||||||||
Cost of revenues
|
618,001
|
392,279
|
159,097
|
337,887
|
||||||||||||
Gross profit
|
319,236
|
214,766
|
80,900
|
151,956
|
||||||||||||
Operating expenses:
|
||||||||||||||||
Research and development, net
|
82,245
|
54,966
|
20,279
|
33,231
|
||||||||||||
Sales and marketing
|
68,307
|
50,032
|
20,444
|
34,833
|
||||||||||||
General and administrative
|
29,264
|
18,682
|
6,790
|
12,133
|
||||||||||||
Total
operating expenses
|
179,816
|
123,680
|
47,513
|
80,197
|
||||||||||||
Operating income
|
139,420
|
91,086
|
33,387
|
71,759
|
||||||||||||
Financial expenses (income), net
|
2,297
|
(9,158
|
)
|
2,789
|
(471
|
)
|
||||||||||
Income before taxes on income
|
137,123
|
100,244
|
30,598
|
72,230
|
||||||||||||
Taxes on income (tax benefit)
|
9,077
|
16,072
|
5,217
|
(4,379
|
)
|
|||||||||||
Net income
|
$
|
128,046
|
$
|
84,172
|
$
|
25,381
|
$
|
76,609
|
||||||||
Net loss attributable to Non-controlling interests
|
787
|
-
|
-
|
-
|
||||||||||||
Net income attributable to SolarEdge Technologies, Inc.
|
$
|
128,833
|
$
|
84,172
|
$
|
25,381
|
$
|
76,609
|
||||||||
Net basic earnings per share of common stock attributable to SolarEdge Technologies, Inc.
|
$
|
2.85
|
$
|
1.99
|
$
|
0.62
|
$
|
1.92
|
||||||||
Net diluted earnings per share of common stock attributable to SolarEdge Technologies, Inc.
|
$
|
2.69
|
$
|
1.85
|
$
|
0.58
|
$
|
1.73
|
||||||||
Weighted average number of shares used in computing net basic earnings per share of common stock
|
45,235,310
|
42,209,238
|
41,026,926
|
39,987,935
|
||||||||||||
Weighted average number of shares used in computing net diluted earnings per share of common stock
|
47,980,002
|
45,425,307
|
43,839,342
|
44,376,075
|
Year ended December 31, |
Six months
ended December
31, 2016
|
Year ended
June
30, 2016 |
||||||||||||||
2018
|
2017
|
|||||||||||||||
Net income
|
$
|
128,046
|
$
|
84,172
|
$
|
25,381
|
$
|
76,609
|
||||||||
Other comprehensive income (loss):
|
||||||||||||||||
Available-for-sale securities:
|
||||||||||||||||
Changes in unrealized gains (losses) net of tax
|
(360
|
)
|
(297
|
)
|
(193
|
)
|
56
|
|||||||||
Reclassification adjustments for losses included in net income
|
137
|
-
|
-
|
1
|
||||||||||||
Net change
|
(223
|
)
|
(297
|
)
|
(193
|
)
|
57
|
|||||||||
Cash flow hedges:
|
||||||||||||||||
Changes in unrealized gains, net of tax
|
31
|
975
|
93
|
412
|
||||||||||||
Reclassification adjustments for gains, net of tax included in net income
|
(31
|
)
|
(994
|
)
|
(317
|
)
|
(169
|
)
|
||||||||
Net change
|
-
|
(19
|
)
|
(224
|
)
|
243
|
||||||||||
Foreign currency translation adjustments, net
|
310
|
29
|
(178
|
)
|
193
|
|||||||||||
Total other comprehensive income (loss)
|
87
|
(287
|
)
|
(595
|
)
|
493
|
||||||||||
Comprehensive income
|
$
|
128,133
|
$
|
83,885
|
$
|
24,786
|
$
|
77,102
|
||||||||
Comprehensive income attributable to Non-controlling interests
|
150
|
-
|
-
|
-
|
||||||||||||
Comprehensive income attributable to SolarEdge Technologies, Inc.
|
$
|
127,983
|
$
|
83,885
|
$
|
24,786
|
$
|
77,102
|
SolarEdge Technologies, Inc. Stockholders’ Equity
|
||||||||||||||||||||||||||||||||
Common stock
|
Additional paid in
Capital
|
Accumulated
Other comprehensive
Income (loss)
|
Retained earnings (Accumulated
Deficit)
|
Total
|
Non-controlling interests
|
Total
stockholders’
equity
|
||||||||||||||||||||||||||
Number
|
Amount
|
|||||||||||||||||||||||||||||||
Balance as of June 30, 2015
|
39,297,539
|
$
|
4
|
$
|
287,152
|
$
|
(222
|
)
|
$
|
(119,990
|
)
|
$
|
166,944
|
$
|
-
|
$
|
166,944
|
|||||||||||||||
Issuance of Common Stock upon exercise of employee and non-employees stock-based awards
|
1,592,383
|
* -
|
2,973
|
-
|
-
|
2,973
|
-
|
2,973
|
||||||||||||||||||||||||
Equity based compensation expenses to employees and non-employee consultants
|
-
|
-
|
9,089
|
-
|
-
|
9,089
|
-
|
9,089
|
||||||||||||||||||||||||
Other comprehensive income adjustments
|
-
|
-
|
-
|
493
|
-
|
493
|
-
|
493
|
||||||||||||||||||||||||
Net income
|
-
|
-
|
-
|
-
|
76,609
|
76,609
|
-
|
76,609
|
||||||||||||||||||||||||
Balance as of June 30, 2016
|
40,889,922
|
$
|
4
|
$
|
299,214
|
$
|
271
|
$
|
(43,381
|
)
|
$
|
256,108
|
$
|
-
|
$
|
256,108
|
||||||||||||||||
Issuance of Common Stock upon exercise of employee and non-employees stock-based awards
|
286,150
|
* -
|
349
|
-
|
-
|
349
|
-
|
349
|
||||||||||||||||||||||||
Issuance of Common stock under employee stock purchase plan
|
83,319
|
* -
|
935
|
-
|
-
|
935
|
-
|
935
|
||||||||||||||||||||||||
Equity based compensation expenses to employees and non-employee consultants
|
-
|
-
|
6,600
|
-
|
-
|
6,600
|
-
|
6,600
|
||||||||||||||||||||||||
Other comprehensive loss adjustments
|
-
|
-
|
-
|
(595
|
)
|
-
|
(595
|
)
|
-
|
(595
|
)
|
|||||||||||||||||||||
Net income
|
-
|
-
|
-
|
-
|
25,381
|
25,381
|
-
|
25,381
|
||||||||||||||||||||||||
Balance as of December 31, 2016
|
41,259,391
|
$
|
4
|
$
|
307,098
|
$
|
(324
|
)
|
$
|
(18,000
|
)
|
$
|
288,778
|
$
|
-
|
$
|
288,778
|
SolarEdge Technologies, Inc. Stockholders’ Equity
|
||||||||||||||||||||||||||||||||
Common stock
|
Additional paid in
Capital
|
Accumulated
Other comprehensive
Income (loss)
|
Retained earnings (Accumulated
Deficit)
|
Total
|
Non-controlling interests
|
Total
stockholders’
equity
|
||||||||||||||||||||||||||
Number
|
Amount
|
|||||||||||||||||||||||||||||||
Balance as of December 31, 2016
|
41,259,391
|
$
|
4
|
$
|
307,098
|
$
|
(324
|
)
|
$
|
(18,000
|
)
|
$
|
288,778
|
$
|
-
|
$
|
288,778
|
|||||||||||||||
Issuance of Common Stock upon exercise of employee and non-employees stock-based awards
|
2,368,152
|
* -
|
4,854
|
-
|
-
|
4,854
|
-
|
4,854
|
||||||||||||||||||||||||
Issuance of Common stock under employee stock purchase plan
|
185,058
|
* -
|
2,386
|
-
|
-
|
2,386
|
-
|
2,386
|
||||||||||||||||||||||||
Equity based compensation expenses to employees and non-employee consultants
|
-
|
-
|
17,564
|
-
|
-
|
17,564
|
-
|
17,564
|
||||||||||||||||||||||||
Other comprehensive loss adjustments
|
-
|
-
|
-
|
(287
|
)
|
-
|
(287
|
)
|
-
|
(287
|
)
|
|||||||||||||||||||||
Net income
|
-
|
-
|
-
|
-
|
84,172
|
84,172
|
-
|
84,172
|
||||||||||||||||||||||||
Balance as of December 31, 2017
|
43,812,601
|
$
|
4
|
$
|
331,902
|
$
|
(611
|
)
|
$
|
66,172
|
$
|
397,467
|
$
|
-
|
$
|
397,467
|
||||||||||||||||
Cumulative effect of adopting ASC 606
|
-
|
-
|
-
|
-
|
(3,872
|
)
|
(3,872
|
)
|
-
|
(3,872
|
)
|
|||||||||||||||||||||
Issuance of Common Stock upon exercise of employee and non-employees stock-based awards
|
2,122,932
|
1
|
6,333
|
-
|
-
|
6,334
|
-
|
6,334
|
||||||||||||||||||||||||
Issuance of Common stock under employee stock purchase plan
|
117,269
|
* -
|
3,687
|
-
|
-
|
3,687
|
-
|
3,687
|
||||||||||||||||||||||||
Equity based compensation expenses to employees and non-employee consultants
|
-
|
-
|
30,618
|
-
|
-
|
30,618
|
-
|
30,618
|
||||||||||||||||||||||||
Non-controlling interests related to business combination
|
-
|
-
|
-
|
-
|
-
|
-
|
22,159
|
22,159
|
||||||||||||||||||||||||
Purchase of Non-controlling interests
|
-
|
-
|
(746
|
)
|
-
|
-
|
(746
|
)
|
(13,204
|
)
|
(13,950
|
)
|
||||||||||||||||||||
Other comprehensive loss adjustments
|
-
|
-
|
-
|
87
|
-
|
87
|
150
|
237
|
||||||||||||||||||||||||
Net income
|
-
|
-
|
-
|
-
|
128,833
|
128,833
|
(787
|
)
|
128,046
|
|||||||||||||||||||||||
Balance as of December 31, 2018
|
46,052,802
|
$
|
5
|
$
|
371,794
|
$
|
(524
|
)
|
$
|
191,133
|
$
|
562,408
|
$
|
8,318
|
$
|
570,726
|
Year ended December 31, |
Six months
ended
December 31,
|
Year ended
June 30,
|
||||||||||||||
2018
|
2017
|
2016
|
2016
|
|||||||||||||
Cash flows provided by operating activities:
|
||||||||||||||||
Net income
|
$
|
128,046
|
$
|
84,172
|
$
|
25,381
|
$
|
76,609
|
||||||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||||||
Depreciation of property, plant and equipment
|
11,426
|
7,011
|
2,702
|
3,763
|
||||||||||||
Amortization of intangible assets
|
1,193
|
144
|
57
|
84
|
||||||||||||
Amortization of premium and accretion of discount on available-for-sale marketable securities
|
1,242
|
2,061
|
681
|
532
|
||||||||||||
Stock-based compensation
|
30,618
|
17,564
|
6,600
|
9,089
|
||||||||||||
Capital loss from disposal of equipment
|
445
|
-
|
-
|
-
|
||||||||||||
Realized loss from sale of available-for-sale marketable securities
|
137
|
-
|
-
|
-
|
||||||||||||
Realized gain from cash flow hedge
|
(31
|
)
|
(994
|
)
|
(317
|
)
|
(169
|
)
|
||||||||
Changes in assets and liabilities:
|
||||||||||||||||
Inventories
|
(20,178
|
)
|
(15,690
|
)
|
14,022
|
(7,356
|
)
|
|||||||||
Prepaid expenses and other assets
|
(2,711
|
)
|
(20,943
|
)
|
(127
|
)
|
10,814
|
|||||||||
Trade receivables, net
|
(60,514
|
)
|
(38,139
|
)
|
1,555
|
(37,271
|
)
|
|||||||||
Deferred tax assets and liabilities, net
|
(7,093
|
)
|
(5,455
|
)
|
3,652
|
(6,380
|
)
|
|||||||||
Trade payables, net
|
31,482
|
35,455
|
(14,464
|
)
|
(32,200
|
)
|
||||||||||
Employees and payroll accruals
|
4,583
|
9,394
|
2,996
|
3,278
|
||||||||||||
Warranty obligations
|
41,878
|
20,436
|
7,183
|
19,313
|
||||||||||||
Deferred revenues
|
37,041
|
14,106
|
1,335
|
8,578
|
||||||||||||
Other liabilities
|
(8,485
|
)
|
27,543
|
(2,235
|
)
|
3,846
|
||||||||||
Net cash provided by operating activities
|
189,079
|
136,665
|
49,021
|
52,530
|
||||||||||||
Cash flows from investing activities:
|
||||||||||||||||
Business combinations, net of cash acquired
|
(94,737
|
)
|
-
|
-
|
-
|
|||||||||||
Purchase of property, plant and equipment
|
(38,608
|
)
|
(21,382
|
)
|
(11,025
|
)
|
(15,690
|
)
|
||||||||
Purchase of intangible assets
|
-
|
-
|
(600
|
)
|
(800
|
)
|
||||||||||
Investment in short term bank deposits
|
(6,001
|
)
|
-
|
-
|
-
|
|||||||||||
Investment in available-for-sale marketable securities
|
(142,627
|
)
|
(143,675
|
)
|
(40,858
|
)
|
(118,511
|
)
|
||||||||
Proceed from sales and maturities of available-for-sale marketable securities
|
129,345
|
80,269
|
32,782
|
6,350
|
||||||||||||
Net cash used in investing activities
|
$
|
(152,628
|
)
|
$
|
(84,788
|
)
|
$
|
(19,701
|
)
|
$
|
(128,651
|
)
|
Year ended
December
31, 2018
|
Year ended
December
31, 2017
|
Six months
ended December
31, 2016
|
Year ended
June
30, 2016 |
|||||||||||||
Cash flows from financing activities:
|
||||||||||||||||
Repayment of bank loan
|
$
|
(3,786
|
)
|
$
|
-
|
$
|
-
|
$
|
-
|
|||||||
Issuance costs related to initial public offering
|
-
|
-
|
-
|
(194
|
)
|
|||||||||||
Proceeds from issuance of shares under stock purchase plan and upon exercise of stock-based awards
|
10,021
|
7,240
|
1,284
|
2,973
|
||||||||||||
Purchase of Non-controlling interests
|
(14,190
|
)
|
-
|
-
|
-
|
|||||||||||
Net cash provided by financing activities
|
(7,955
|
)
|
7,240
|
1,284
|
2,779
|
|||||||||||
Increase (decrease) in cash, cash equivalents and restricted cash
|
28,496
|
59,117
|
30,604
|
(73,342
|
)
|
|||||||||||
Cash, cash equivalents and restricted cash at the beginning of the period
|
164,679
|
105,580
|
74,960
|
148,389
|
||||||||||||
Effect of exchange rate differences on cash, cash equivalents and restricted cash
|
86
|
(18
|
)
|
16
|
(87
|
)
|
||||||||||
Cash, cash equivalents and restricted cash at the end of the period
|
$
|
193,261
|
$
|
164,679
|
$
|
105,580
|
$
|
74,960
|
||||||||
Supplemental disclosure of non-cash investing activities:
|
||||||||||||||||
Net change in accrued expenses and other accounts payable related to property and equipment additions
|
$
|
-
|
$
|
598
|
$
|
-
|
$
|
1,187
|
||||||||
Supplemental disclosure of cash flow information:
|
||||||||||||||||
Cash paid for taxes
|
$
|
15,368
|
$
|
3,100
|
$
|
1,103
|
$
|
1,178
|
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), (iii) a related cloud-based monitoring platform, that collects and processes information from the power optimizers and inverters of a solar PV system to enable customers and system owners as applicable, to monitor and manage the solar PV systems and (iv) a storage solution that is used to increase energy independence and maximize self-consumption for homeowners by utilizing a battery that is sold separately by third party manufacturers, to store and supply power as needed (the “StorEdge solution”). The StorEdge solution is designed to provide smart energy functions such as maximizing self-consumption, Time-of-Use programming for desired hours of the day, and home energy backup solutions.
|
b. |
Basis of presentation:
|
NOTE 1:- |
GENERAL (Cont.)
|
c. |
For the years ended December 31, 2018, and December 31, 2017, and the six months ended December 31, 2016, the Company had one major customer (customer with attributable revenues that represents more than 10% of total revenues) that accounted for approximately 19.4%, 14.8% and 11.2% of the Company’s consolidated revenues, respectively. For the year ended June 30, 2016, the Company had three major customers that accounted for approximately 32.6% of the Company’s consolidated revenues (see Note 19).
|
d. |
As of December 31, 2018 and 2017, the Company had two major customers (customer with a balance that represents more than 10% of total trade receivables) which accounted in the aggregate for approximately 41.3% and 35.2%, respectively, of the Company’s consolidated trade receivables.
|
e. |
The Company depends on three contract manufacturers and several limited or single source component suppliers. The Company is in a process of discontinuing its activity with one of those contract manufacturers. Reliance on these vendors makes the Company vulnerable to possible capacity constraints and reduced control over component availability, delivery schedules, manufacturing yields, and costs.
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES
|
a. |
Principles of consolidation:
|
b. |
Use of estimates:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
c. |
Financial statements in U.S. dollars:
|
d. |
Basic and Diluted Net
Earnings
Per Share Attributable to
SolarEdge
Technologies, Inc.
:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
Year ended December 31,
|
Six months
ended
December 31,
|
Year ended
June 30,
|
||||||||||||||
2018
|
2017
|
2016
|
2016
|
|||||||||||||
Numerator:
|
||||||||||||||||
Net income
|
$
|
128,046
|
$
|
84,172
|
$
|
25,381
|
$
|
76,609
|
||||||||
Net loss attributable to Non-controlling interests
|
787
|
-
|
-
|
-
|
||||||||||||
Net income attributable to SolarEdge Technologies, Inc.
|
$
|
128,833
|
$
|
84,172
|
$
|
25,381
|
$
|
76,609
|
||||||||
Denominator:
|
||||||||||||||||
Shares used in computing net earnings per share of common stock, basic
|
45,235,310
|
42,209,238
|
41,026,926
|
39,987,935
|
||||||||||||
Effect of stock-based awards
|
2,744,692
|
3,216,069
|
2,812,416
|
4,388,140
|
||||||||||||
Shares used in computing net earnings per share of common stock, diluted
|
47,980,002
|
45,425,307
|
43,839,342
|
44,376,075
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
e. |
Cash and cash equivalents:
|
f. |
Short-term bank deposits:
|
g. |
Marketable Securities:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
h. |
Restricted cash:
|
i. |
Inventories:
|
j. |
Property, plant and equipment:
|
%
|
||
Buildings and plants
|
2.5 – 5 (mainly 2.5)
|
|
Computers and peripheral equipment
|
15 – 33 (mainly 33)
|
|
Office furniture and equipment
|
7 – 25 (mainly 7)
|
|
Machinery and equipment
|
7 – 33 (mainly 20)
|
|
Laboratory equipment
|
15 – 25 (mainly 15)
|
|
Leasehold improvements
|
over the shorter of the lease term
or useful economic life
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
k. |
Business Combination:
|
l. |
Intangible Assets:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
m. |
Goodwill:
|
n. |
Impairment of long-lived assets:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
p. |
Revenue recognition:
|
Year ended December 31,
|
Six months
ended
December 31,
|
Year ended
June 30,
|
||||||||||||||
2018
|
2017
|
2016
|
2016
|
|||||||||||||
Solar
|
$
|
914,285
|
$
|
607,045
|
$
|
239,997
|
$
|
489,843
|
||||||||
Non-solar
|
22,952
|
-
|
-
|
-
|
||||||||||||
Total revenues
|
$
|
937,237
|
$
|
607,045
|
$
|
239,997
|
$
|
489,843
|
(1) |
Identify the contract with a customer
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
(2) |
Identify the performance obligations in the contract
|
(3) |
Determine the transaction price
|
(4) |
Allocate the transaction price to the performance obligations in the contract
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
(5) |
Recognize revenue when a performance obligation is satisfied
|
Balance as of
December 31, 2017
|
Adjustments due
following adoption
of ASC 606
|
Balance as of
January 1, 2018
|
||||||||||
Deferred Revenues - Current term
|
$
|
2,559
|
$
|
(89
|
)
|
$
|
2,470
|
|||||
Deferred Revenues - Long term
|
31,453
|
3,961
|
35,414
|
|||||||||
Retained earnings
|
$
|
66,172
|
$
|
(3,872
|
)
|
$
|
62,300
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
Year ended December 31, 2018
|
||||||||||||
As Reported
|
Balances before
adoption of
ASC 606
|
Effect of change
|
||||||||||
Statements of operations
|
||||||||||||
Revenues
|
$
|
937,237
|
$
|
937,168
|
$
|
69
|
||||||
Financial expenses (income), net
|
2,297
|
(122
|
) |
2,419
|
||||||||
Net income
|
128,046
|
130,396
|
(2,350
|
)
|
||||||||
Cash flows
|
||||||||||||
Net income
|
128,046
|
130,396
|
(2,350
|
)
|
||||||||
Changes in assets and liabilities:
|
||||||||||||
Deferred revenues
|
37,041
|
34,789
|
2,252
|
|||||||||
As of December 31, 2018
|
||||||||||||
As Reported
|
Balances before
adoption of
ASC 606
|
Effect of change
|
||||||||||
Balance Sheets
|
||||||||||||
Deferred Revenues - Current
|
14,351
|
14,559
|
(208
|
)
|
||||||||
Deferred Revenues - Long term
|
60,670
|
54,240
|
6,430
|
|||||||||
Retained earnings
|
$
|
191,133
|
$
|
195,005
|
$
|
(3,872
|
)
|
q. |
Cost of revenues:
|
r. |
Shipping and handling costs:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
s. |
Warranty obligations:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
t. |
Research and development costs:
|
u. |
Concentrations of credit risks:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
Level 1- |
Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
|
Level 2- |
Include other inputs that are directly or indirectly observable in the marketplace.
|
Level 3- |
Unobservable inputs which are supported by little or no market activity.
|
w. |
Accounting for stock-based compensation:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
Year ended December 31,
|
Six months
ended December
31, 2016
|
Year Ended
June
30, 2016
|
||||||||||||||
2018
|
2017
|
|||||||||||||||
Employee Stock Options
|
||||||||||||||||
Risk-free interest
|
2.32
|
%
|
2.14% - 2.17
|
%
|
1.28% - 1.34
|
%
|
1.39% - 1.97
|
%
|
||||||||
Dividend yields
|
0
|
%
|
0
|
%
|
0
|
%
|
0
|
%
|
||||||||
Volatility
|
56.53
|
%
|
58.08% - 58.10
|
%
|
55.33% - 55.34
|
%
|
55.45%-56.03
|
%
|
||||||||
Expected option term in years
|
6.06
|
6.06
|
6.06
|
5.50-6.11
|
||||||||||||
Estimated forfeiture rate
|
0
|
%
|
0
|
%
|
0
|
%
|
10.3
|
%
|
||||||||
Employee Stock Purchase Plan
|
||||||||||||||||
Risk-free interest
|
2.10% - 2.52
|
%
|
0.60% - 1.07
|
%
|
0.60
|
%
|
0.40
|
%
|
||||||||
Dividend yields
|
0
|
%
|
0
|
%
|
0
|
%
|
0
|
%
|
||||||||
Volatility
|
54.13% - 56.67
|
%
|
45.60% - 48.08
|
%
|
48.08
|
%
|
62.84
|
%
|
||||||||
Expected term
|
6 months
|
6 months
|
6 months
|
6 months
|
Year ended
December
31, 2018
|
Year ended
December
31, 2017
|
Six months
ended December
31, 2016
|
Year ended
June
30, 2016
|
|||||||||||||
Risk-free interest
|
2.81%-2.84
|
%
|
2.12% - 2.42
|
%
|
1.16% - 2.45
|
%
|
1.15%-2.21
|
%
|
||||||||
Dividend yields
|
0
|
%
|
0
|
%
|
0
|
%
|
0
|
%
|
||||||||
Volatility
|
58.18%-59.33
|
%
|
61.21% - 62.62
|
%
|
55.33% - 58.57
|
%
|
55.37%-55.75
|
%
|
||||||||
Contractual life in years
|
6-10
|
6-10
|
6 - 10
|
6.4-10
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
x. |
Income taxes:
|
y. |
Derivative financial instruments:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
z. |
Comprehensive income:
|
aa. |
New accounting pronouncements not yet effective:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
ab. |
Recently issued and adopted pronouncements:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
ac. |
Certain prior period amounts have been reclassified to conform to the current period presentation.
|
NOTE 3:- |
MARKETABLE SECURITIES
|
Amortized
cost
|
Gross unrealized
gains
|
Gross unrealized
losses
|
Fair
value
|
|||||||||||||
Available-for-sale – matures within one year:
|
||||||||||||||||
Corporate bonds
|
$
|
110,904
|
$
|
-
|
$
|
(519
|
)
|
$
|
110,385
|
|||||||
Governmental bonds
|
8,343
|
-
|
(48
|
)
|
8,295
|
|||||||||||
119,247
|
-
|
(567
|
)
|
118,680
|
||||||||||||
Available for-sale – matures after one year:
|
||||||||||||||||
Corporate bonds
|
74,564
|
-
|
(308
|
)
|
74,256
|
|||||||||||
74,564
|
-
|
(308
|
)
|
74,256
|
||||||||||||
Total
|
$
|
193,811
|
$
|
-
|
$
|
(875
|
)
|
$
|
192,936
|
NOTE 3:- |
MARKETABLE SECURITIES (Cont.)
|
Amortized
cost
|
Gross unrealized
gains
|
Gross unrealized
losses
|
Fair
value
|
|||||||||||||
Available for-sale – matures within one year:
|
||||||||||||||||
Corporate bonds
|
$
|
68,392
|
$
|
1
|
$
|
(121
|
)
|
$
|
68,272
|
|||||||
Governmental bonds
|
9,019
|
-
|
(27
|
)
|
8,992
|
|||||||||||
77,411
|
1
|
(148
|
)
|
77,264
|
||||||||||||
Available for-sale – matures after one year:
|
||||||||||||||||
Corporate bonds
|
95,540
|
-
|
(380
|
)
|
95,160
|
|||||||||||
Governmental bonds
|
8,023
|
-
|
(63
|
)
|
7,960
|
|||||||||||
103,563
|
-
|
(443
|
)
|
103,120
|
||||||||||||
Total
|
$
|
180,974
|
$
|
1
|
$
|
(591
|
)
|
$
|
180,384
|
Amortized
cost
|
Gross unrealized
gains
|
Gross unrealized
losses
|
Fair
value
|
|||||||||||||
Available for-sale – matures within one year:
|
||||||||||||||||
Corporate bonds
|
$
|
71,753
|
$
|
20
|
$
|
(54
|
)
|
$
|
71,719
|
|||||||
Governmental bonds
|
2,758
|
-
|
(12
|
)
|
2,746
|
|||||||||||
74,511
|
20
|
(66
|
)
|
74,465
|
||||||||||||
Available for-sale – matures after one year:
|
||||||||||||||||
Corporate bonds
|
39,435
|
3
|
(159
|
)
|
39,279
|
|||||||||||
Governmental bonds
|
5,004
|
-
|
(21
|
)
|
4,983
|
|||||||||||
44,439
|
3
|
(180
|
)
|
44,262
|
||||||||||||
Total
|
$
|
118,950
|
$
|
23
|
$
|
(246
|
)
|
$
|
118,727
|
NOTE 3:- |
MARKETABLE SECURITIES (Cont.)
|
12 months or less
|
Greater than 12 months
|
|||||||||||||||
Fair value
|
Gross unrealized losses
|
Fair value
|
Gross unrealized losses
|
|||||||||||||
As of
December 31, 2018
|
$
|
118,680
|
$
|
(567
|
)
|
$
|
74,256
|
$
|
(308
|
)
|
||||||
As of
December 31, 2017
|
$
|
72,269
|
$
|
(148
|
)
|
$
|
103,116
|
$
|
(443
|
)
|
||||||
As of
December 31, 2016
|
$
|
51,124
|
$
|
(66
|
)
|
$
|
39,373
|
$
|
(180
|
)
|
NOTE 4:- |
FAIR VALUE MEASUREMENTS
|
NOTE 4:- |
FAIR VALUE MEASUREMENTS (cont.)
|
|
Fair Value
Hierarchy
|
Fair value measurements
as of December 31,
|
||||||||||||
Description
|
2018
|
2017
|
2016
|
|||||||||||
Measured at fair value on a recurring basis:
|
||||||||||||||
Assets:
|
||||||||||||||
Cash equivalents:
|
||||||||||||||
Money market mutual funds
|
Level 1
|
$
|
1,767
|
$
|
6,163
|
$
|
6,510
|
|||||||
Derivative instruments asset
|
Level 2
|
-
|
-
|
19
|
||||||||||
Short-term marketable securities:
|
||||||||||||||
Corporate bonds
|
Level 2
|
110,385
|
68,272
|
71,719
|
||||||||||
Governmental bonds
|
Level 2
|
8,295
|
8,992
|
2,746
|
||||||||||
Long-term marketable securities:
|
||||||||||||||
Corporate bonds
|
Level 2
|
74,256
|
95,160
|
39,279
|
||||||||||
Governmental bonds
|
Level 2
|
-
|
7,960
|
4,983
|
||||||||||
Liabilities
|
||||||||||||||
Long-term Earn-out provision
|
Level 3
|
(332
|
)
|
-
|
-
|
|||||||||
Derivative instruments liability
|
Level 2
|
-
|
(180
|
)
|
-
|
NOTE 5:- |
PREPAID EXPENSES AND OTHER CURRENT ASSETS
|
As of December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
Vendor non-trade receivables
(*)
|
$
|
28,284
|
$
|
33,719
|
$
|
15,209
|
||||||
Prepaid expenses and other
|
11,038
|
5,083
|
3,553
|
|||||||||
Government authorities
|
5,751
|
3,421
|
2,585
|
|||||||||
$
|
45,073
|
$
|
42,223
|
$
|
21,347
|
NOTE 6:- |
INVENTORIES
|
As of December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
Raw materials
|
$
|
39,380
|
$
|
25,887
|
$
|
10,053
|
||||||
Work in process
|
18,115
|
-
|
-
|
|||||||||
Finished goods
|
84,024
|
57,105
|
57,310
|
|||||||||
$
|
141,519
|
$
|
82,992
|
$
|
67,363
|
NOTE 7:- |
PROPERTY, PLANT AND EQUIPMENT, NET
|
As of December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
Cost:
|
||||||||||||
Land
|
$
|
6,592
|
$
|
-
|
$
|
-
|
||||||
Buildings and plants
|
18,196
|
-
|
-
|
|||||||||
Computers and peripheral equipment
|
13,896
|
9,872
|
6,053
|
|||||||||
Office furniture and equipment
|
9,005
|
1,785
|
1,505
|
|||||||||
Laboratory and testing equipment
|
18,160
|
13,732
|
9,589
|
|||||||||
Machinery and equipment
|
113,553
|
38,461
|
26,298
|
|||||||||
Leasehold improvements
|
11,741
|
7,536
|
5,898
|
|||||||||
Gross property, plant and equipment
|
191,143
|
71,386
|
49,343
|
|||||||||
Less - accumulated depreciation
|
71,814
|
20,204
|
13,221
|
|||||||||
Total property, plant and equipment, net
|
$
|
119,329
|
$
|
51,182
|
$
|
36,122
|
NOTE 8:- |
BUSINESS COMBINATION
|
NOTE 8:- |
BUSINESS COMBINATION (Cont.)
|
NOTE 8:- |
BUSINESS COMBINATION (Cont.)
|
Kokam
|
UPS Division
|
Total
|
||||||||||
Components of Purchase Price:
|
||||||||||||
Cash
|
$
|
87,004
|
$
|
12,322
|
$
|
99,326
|
||||||
Less cash acquired
|
(4,477
|
)
|
(112
|
)
|
(4,589
|
)
|
||||||
Earn-out provision
|
-
|
860
|
860
|
|||||||||
Total purchase price
|
$
|
82,527
|
$
|
13,070
|
$
|
95,597
|
||||||
Allocation of Purchase Price:
|
||||||||||||
Net tangible assets (liabilities):
|
||||||||||||
Trade receivables, net
|
$
|
4,113
|
$
|
220
|
$
|
4,333
|
||||||
Prepaid expenses and other current assets
|
1,390
|
23
|
1,413
|
|||||||||
Inventories
|
30,633
|
6,351
|
36,984
|
|||||||||
Property, plant and equipment, net
|
41,079
|
857
|
41,936
|
|||||||||
Other non-current assets
|
3,568
|
-
|
3,568
|
|||||||||
Trade payables
|
(5,956
|
)
|
(110
|
)
|
(6,066
|
)
|
||||||
Employees and payroll accruals
|
(2,046
|
)
|
-
|
(2,046
|
)
|
|||||||
Accrued expenses and other current liabilities
|
(6,426
|
)
|
(43
|
)
|
(6,469
|
)
|
||||||
Loans
|
(23,670
|
)
|
-
|
(23,670
|
)
|
|||||||
Warranty obligations
|
(1,059
|
)
|
(61
|
)
|
(1,120
|
)
|
||||||
Deferred tax liabilities, net
|
(2,271
|
)
|
-
|
(2,271
|
)
|
|||||||
Other non-current liabilities
|
(1,399
|
)
|
-
|
(1,399
|
)
|
|||||||
Total net tangible assets
|
$
|
37,956
|
$
|
7,237
|
$
|
45,193
|
||||||
Identifiable intangible assets (1):
|
||||||||||||
Technology
|
$
|
28,389
|
$
|
2,048
|
$
|
30,437
|
||||||
Customer relationships
|
3,007
|
810
|
3,817
|
|||||||||
Backlog
|
-
|
193
|
193
|
|||||||||
Tradename
|
3,671
|
-
|
3,671
|
|||||||||
Total identifiable intangible assets acquired
|
$
|
35,067
|
$
|
3,051
|
$
|
38,118
|
||||||
Goodwill (2)
|
$
|
31,663
|
$
|
2,782
|
$
|
34,445
|
||||||
Non-controlling interests
|
$
|
(22,159
|
)
|
-
|
$
|
(22,159
|
)
|
|||||
Total purchase price allocation
|
$
|
82,527
|
$
|
13,070
|
$
|
95,597
|
(1) |
Gamatronic's definite-lived intangible assets include current technology of $2,048 (7 years weighted-average useful life), customer relationships of $810 (7 years weighted-average useful life) and backlog of $193 (2 months weighted-average useful life.
|
NOTE 8:- |
BUSINESS COMBINATION (Cont.)
|
(2) |
The goodwill
resulted from the Gamatronic Acquisition
is attributable primarily to acquired technology, expected synergies and the assembled workforce from the UPS Division. The goodwill is expected to be deductible for income tax purposes over a period of 10 years.
|
Year ended December 31,
|
||||||||
2018
|
2017
|
|||||||
Unaudited
|
||||||||
Revenue
|
$
|
976,827
|
$
|
671,570
|
||||
Net income
|
$
|
115,074
|
$
|
66,011
|
NOTE 9:- |
INTANGIBLE ASSETS AND GOODWILL
|
a. |
Intangible assets:
|
As of December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
Intangible assets with finite lives:
|
||||||||||||
Current Technology
|
$
|
30,821
|
$
|
-
|
$
|
-
|
||||||
Customer relationships
|
3,857
|
-
|
-
|
|||||||||
Trade names
|
3,721
|
-
|
-
|
|||||||||
Patents
|
1,400
|
1,400
|
1,400
|
|||||||||
Backlog
|
193
|
-
|
-
|
|||||||||
Gross intangible assets
|
39,992
|
1,400
|
1,400
|
|||||||||
Less - accumulated amortization
|
(1,488
|
)
|
(285
|
)
|
(141
|
)
|
||||||
Total intangible assets, net
|
$
|
38,504
|
$
|
1,115
|
$
|
1,259
|
2019
|
$
|
4,673
|
||
2020
|
4,769
|
|||
2021
|
4,818
|
|||
2022
|
4,883
|
|||
2023
|
4,868
|
|||
2024 and thereafter
|
14,493
|
|||
$
|
38,504
|
NOTE 9:- |
INTANGIBLE ASSETS AND GOODWILL (Cont.)
|
b. |
Goodwill:
|
Total
|
||||
Goodwill at January 1, 2018
|
$
|
-
|
||
Business combinations
|
34,445
|
|||
Foreign currency translation
|
429
|
|||
Goodwill at December 31, 2018
|
$
|
34,874
|
NOTE 10:- |
ACCRUED EXPENSES AND OTHER ACCOUNTS PAYABLE
|
As of December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
Accrued expenses
|
$
|
14,859
|
$
|
14,863
|
$
|
4,209
|
||||||
Government authorities
|
11,344
|
1,905
|
1,568
|
|||||||||
Loss provision related to contractual inventory purchase obligations and others*
|
3,525
|
3,610
|
2,871
|
|||||||||
$
|
29,728
|
$
|
20,378
|
$
|
8,648
|
NOTE 11:- |
BANK LOANS
|
Maturities calendar year
|
As of December 31, 2018
|
Effective interest rate*
|
||||||||
2019
|
$
|
15,919
|
0.60%-0.89%
|
|||||||
2020
|
2,430
|
0.68%-0.75%
|
||||||||
2018 - 2020
|
900
|
0.67%
|
||||||||
2016 - 2021
|
900
|
0.69%
|
||||||||
$
|
20,149
|
|||||||||
Less - current maturities bank loans
|
$
|
(16,639
|
)
|
|||||||
Long term bank loans net of Current maturities
|
$
|
3,510
|
NOTE 11:- |
BANK LOANS (Cont.)
|
NOTE 12:- |
WARRANTY OBLIGATIONS
|
December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
Balance, at beginning of year
|
$
|
78,811
|
$
|
58,375
|
$
|
51,192
|
||||||
Additions and adjustments to cost of revenues
|
70,854
|
34,650
|
13,749
|
|||||||||
Usage and current warranty expenses
|
(27,839
|
)
|
(14,214
|
)
|
(6,566
|
)
|
||||||
Balance, at end of year
|
121,826
|
78,811
|
58,375
|
|||||||||
Less current portion
|
(28,868
|
)
|
(14,785
|
)
|
(13,616
|
)
|
||||||
Long term portion
|
$
|
92,958
|
$
|
64,026
|
$
|
44,759
|
As of December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
Tax liabilities
|
$
|
7,147
|
$
|
16,840
|
$
|
2,061
|
||||||
Lease incentive obligations
|
1,468
|
1,765
|
-
|
|||||||||
Other
|
776
|
-
|
-
|
|||||||||
$
|
9,391
|
$
|
18,605
|
$
|
2,061
|
Unrealized losses on available-for-sale marketable securities
|
Unrealized gains on cash flow hedges
|
Unrealized gains losses on foreign currency translation
|
Total
|
|||||||||||||
Beginning balance
|
$
|
(433
|
)
|
$
|
-
|
$
|
(178
|
)
|
$
|
(611
|
)
|
|||||
Other comprehensive income (loss) before reclassifications
|
(360
|
)
|
31
|
310
|
(19
|
)
|
||||||||||
Loses (gains) reclassified from accumulated other comprehensive income
|
137
|
(31
|
)
|
-
|
106
|
|||||||||||
Net current period other comprehensive income (loss)
|
(223
|
)
|
-
|
310
|
87
|
|||||||||||
Ending balance
|
$
|
(656
|
)
|
$
|
-
|
$
|
132
|
$
|
(524
|
)
|
Unrealized losses on available-for-sale marketable securities
|
Unrealized gains on cash flow hedges
|
Unrealized losses on foreign currency translation
|
Total
|
|||||||||||||
Beginning balance
|
$
|
(136
|
)
|
$
|
19
|
$
|
(207
|
)
|
$
|
(324
|
)
|
|||||
Other comprehensive income (loss) before reclassifications
|
(297
|
)
|
975
|
29
|
707
|
|||||||||||
Gains reclassified from accumulated other comprehensive income
|
-
|
(994
|
)
|
-
|
(994
|
)
|
||||||||||
Net current period other comprehensive income (loss)
|
(297
|
)
|
(19
|
)
|
29
|
(287
|
)
|
|||||||||
Ending balance
|
$
|
(433
|
)
|
$
|
-
|
$
|
(178
|
)
|
$
|
(611
|
)
|
Unrealized gains (losses) on available-for-sale marketable securities
|
Unrealized gains on cash flow hedges
|
Unrealized losses on foreign currency translation
|
Total
|
|||||||||||||
Beginning balance
|
$
|
57
|
$
|
243
|
$
|
(29
|
)
|
$
|
271
|
|||||||
Other comprehensive income (loss) before reclassifications
|
(193
|
)
|
93
|
(178
|
)
|
(278
|
)
|
|||||||||
Gains reclassified from accumulated other comprehensive income
|
-
|
(317
|
)
|
-
|
(317
|
)
|
||||||||||
Net current period other comprehensive loss
|
(193
|
)
|
(224
|
)
|
(178
|
)
|
(595
|
)
|
||||||||
Ending balance
|
$
|
(136
|
)
|
$
|
19
|
$
|
(207
|
)
|
$
|
(324
|
)
|
Unrealized gains on available-for-sale marketable securities
|
Unrealized gains on cash flow hedges
|
Unrealized losses on foreign currency translation
|
Total
|
|||||||||||||
Beginning balance
|
$
|
-
|
$
|
-
|
$
|
(222
|
)
|
$
|
(222
|
)
|
||||||
Other comprehensive income (loss) before reclassifications
|
56
|
412
|
193
|
661
|
||||||||||||
Losses (gains) reclassified from accumulated other comprehensive income (loss)
|
1
|
(169
|
)
|
-
|
(168
|
)
|
||||||||||
Net current period other comprehensive income
|
57
|
243
|
193
|
493
|
||||||||||||
Ending balance
|
$
|
57
|
$
|
243
|
$
|
(29
|
)
|
$
|
271
|
Components
|
Amount Reclassified from
Accumulated Other Comprehensive Income (Loss) |
Affected Line Item in the Statements of Operations
|
|||||||||||||||
Year ended
December 31,
|
Six months
ended
December 31,
|
Year ended
June 30,
|
|||||||||||||||
2018
|
2017
|
2016
|
2016
|
||||||||||||||
Unrealized gains on cash flow hedges
|
$
|
3
|
$
|
166
|
$
|
47
|
$
|
30
|
Cost of revenues
|
||||||||
19
|
570
|
227
|
115
|
Research and development
|
|||||||||||||
5
|
151
|
58
|
33
|
Sales and marketing
|
|||||||||||||
4
|
153
|
46
|
24
|
General and administrative
|
|||||||||||||
31
|
1,040
|
378
|
202
|
Total, before income taxes
|
|||||||||||||
-
|
46
|
61
|
33
|
Income tax expenses
|
|||||||||||||
31
|
994
|
317
|
169
|
Total, net of income taxes
|
|||||||||||||
Unrealized losses on available-for-sale marketable securities
|
(137
|
)
|
-
|
-
|
(1
|
)
|
Financial income, net
|
||||||||||
-
|
-
|
-
|
-
|
Income tax expense
|
|||||||||||||
(137
|
)
|
-
|
-
|
(1
|
)
|
Total, net of income taxes
|
|||||||||||
Total reclassifications for the period
|
$
|
(106
|
)
|
$
|
994
|
$
|
317
|
$
|
168
|
Total, net of income taxes
|
NOTE 15:- |
COMMITMENTS AND CONTINGENT LIABILITIES
|
a. |
Lease commitments:
|
2019
|
6,933
|
|||
2020
|
4,677
|
|||
2021
|
2,633
|
|||
2022
|
2,380
|
|||
2023
|
2,350
|
|||
2024 and thereafter
|
2,444
|
|||
$
|
21,417
|
NOTE 15:- |
COMMITMENTS AND CONTINGENT LIABILITIES (Cont.)
|
b. |
Guarantees:
|
c. |
Contractual purchase obligations:
|
d. |
Legal claims:
|
NOTE 15:- |
COMMITMENTS AND CONTINGENT LIABILITIES (Cont.)
|
NOTE 16:- |
STOCK CAPITAL
|
a. |
Composition of common stock capital of the Company:
|
Number of shares
|
||||||||||||||||||||||||
Authorized
as of December 31,
|
Issued and outstanding
as of December 31,
|
|||||||||||||||||||||||
2018
|
2017
|
2016
|
2018
|
2017
|
2016
|
|||||||||||||||||||
Stock of $0.0001 par value:
|
||||||||||||||||||||||||
Common stock
|
125,000,000
|
125,000,000
|
125,000,000
|
46,052,802
|
43,812,601
|
41,259,391
|
b. |
Common stock rights:
|
c. |
Stock option plans:
|
NOTE 16:- |
STOCK CAPITAL (Cont.)
|
Weighted
|
||||||||||||||||
average
|
||||||||||||||||
Weighted
|
remaining
|
|||||||||||||||
Number
|
average
|
contractual
|
Aggregate
|
|||||||||||||
of
|
exercise
|
term
|
intrinsic
|
|||||||||||||
options
|
price
|
in years
|
Value
|
|||||||||||||
Outstanding as of December 31, 2017
|
3,524,310
|
7.40
|
6.35
|
106,251
|
||||||||||||
Granted
|
180,983
|
38.05
|
||||||||||||||
Exercised
|
(1,280,057
|
)
|
4.89
|
|||||||||||||
Forfeited or expired
|
(23,343
|
)
|
8.35
|
|||||||||||||
Outstanding as of December 31, 2018
|
2,401,893
|
11.04
|
6.19
|
58,323
|
||||||||||||
Vested and expected to vest as of December 31, 2018
|
2,359,484
|
10.94
|
6.17
|
57,520
|
||||||||||||
Exercisable as of December 31, 2018
|
1,843,014
|
7.93
|
5.64
|
50,173
|
NOTE 16:- |
STOCK CAPITAL (Cont.)
|
Options
|
Weighted
|
Options
|
Weighted
|
||||||||||||||
outstanding
|
average
|
exercisable
|
average
|
||||||||||||||
Range of
|
as of
|
remaining
|
as of
|
remaining
|
|||||||||||||
exercise
|
December 31,
|
contractual
|
December 31,
|
contractual
|
|||||||||||||
price
|
2018
|
Life in years
|
2018
|
Life in years
|
|||||||||||||
$0.87 – $1.50
|
22,236
|
0.57
|
22,236
|
0.57
|
|||||||||||||
$2.01 – $2.46
|
331,482
|
2.56
|
331,482
|
2.56
|
|||||||||||||
$3.03 – $5.01
|
1,080,892
|
5.86
|
1,043,120
|
5.86
|
|||||||||||||
$9.36
|
10,546
|
6.08
|
10,098
|
6.08
|
|||||||||||||
$13.70 – $14.85
|
426,181
|
8.14
|
180,479
|
8.14
|
|||||||||||||
$15.34 – $17.14
|
183,623
|
7.66
|
100,571
|
7.66
|
|||||||||||||
$20.81 – $25.09
|
165,950
|
6.68
|
121,100
|
6.68
|
|||||||||||||
$38.05
|
180,983
|
9.01
|
33,928
|
9.01
|
|||||||||||||
2,401,893
|
6.19
|
1,843,014
|
5.64
|
No. of
RSUs
|
Weighted average
grant date
fair value
|
|||||||
Unvested as of January 1, 2018
|
2,087,992
|
24.33
|
||||||
Granted
|
1,744,621
|
41.45
|
||||||
Vested
|
(811,376
|
)
|
24.97
|
|||||
Forfeited
|
(214,005
|
)
|
29.36
|
|||||
Unvested as of December 31, 2018
|
2,807,232
|
34.40
|
NOTE 16:- |
STOCK CAPITAL (Cont.)
|
Options & RSU’s
|
|||||||||||||
outstanding
|
Range
|
Exercisable
|
|||||||||||
as of
|
of
|
as of
|
|||||||||||
Issuance
|
December 31,
|
Exercise
|
December 31,
|
Exercisable
|
|||||||||
Date
|
2018
|
price
|
2018
|
Through
|
|||||||||
2014
|
6,478
|
$3.51 - $5.01
|
4,923
|
October 29, 2024
|
|||||||||
2015
|
5,918
|
$0
|
-
|
||||||||||
2016
|
7,126
|
$0 - $15.34
|
-
|
September 21, 2026
|
|||||||||
2017
|
18,626
|
$0 - $13.70
|
-
|
March 15, 2027
|
|||||||||
2018
|
20,783
|
$0
|
-
|
||||||||||
58,931
|
4,923
|
d. |
Employee Stock Purchase Plan (“ESPP”):
|
NOTE 16:- |
STOCK CAPITAL (Cont.)
|
e. |
Stock-based compensation expense for employees and non-employee consultants:
|
Year ended December 31,
|
Six months ended
December 31,
|
Year ended
June 30,
|
||||||||||||||
2018
|
2017
|
2016
|
2016
|
|||||||||||||
Cost of revenues
|
$
|
4,343
|
$
|
2,250
|
$
|
871
|
$
|
945
|
||||||||
Research and development, net
|
11,205
|
5,703
|
2,061
|
2,364
|
||||||||||||
Selling and marketing
|
9,111
|
5,387
|
1,852
|
2,915
|
||||||||||||
General and administrative
|
5,959
|
4,224
|
1,816
|
2,820
|
||||||||||||
Total stock-based compensation expense
|
$
|
30,618
|
$
|
17,564
|
$
|
6,600
|
$
|
9,044
|
a. |
Tax rates in U.S:
|
b. |
Kokam is subject to Korean tax on progressive tax rates of up to 22%.
|
c. |
Corporate tax in Israel:
|
d. |
Carryforward tax losses:
|
e. |
Deferred income taxes:
|
December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
Deferred tax assets, net:
|
||||||||||||
Research and Development carryforward expenses
|
$
|
9,482
|
$
|
5,380
|
$
|
908
|
||||||
Carryforward tax losses
|
4,155
|
-
|
-
|
|||||||||
Stock based compensation expenses
|
3,160
|
1,622
|
1,039
|
|||||||||
Inventory Impairment
|
1,471
|
-
|
-
|
|||||||||
Allowance and other reserves
|
4,340
|
1,338
|
868
|
|||||||||
Total deferred tax assets, net
|
$
|
22,608
|
$
|
8,340
|
$
|
2,815
|
||||||
Deferred tax liabilities, net:
|
||||||||||||
Purchase price allocation adjustments
|
(9,408
|
)
|
-
|
-
|
||||||||
Total deferred tax liabilities, net
|
$
|
(9,408
|
)
|
$
|
-
|
$
|
-
|
|||||
Recorded as:
|
||||||||||||
Deferred tax assets, net
|
$
|
14,699
|
$
|
8,340
|
$
|
2,815
|
||||||
Deferred tax liabilities, net
|
(1,499
|
)
|
-
|
-
|
||||||||
Net deferred tax assets
|
$
|
13,200
|
$
|
8,340
|
$
|
2,815
|
f. |
Uncertain tax positions:
|
|
December 31,
|
|||||||||||
2018
|
2017
|
2016
|
||||||||||
Balance at January 1,
|
$
|
579
|
$
|
249
|
$
|
-
|
||||||
Increases related to current year tax positions
|
8,499
|
330
|
249
|
|||||||||
Decreases related to prior year tax positions
|
(579
|
)
|
-
|
-
|
||||||||
Balance at December 31,
|
$
|
8,499
|
$
|
579
|
$
|
249
|
g. |
Income before taxes are comprised as follows:
|
Year ended December 31,
|
Six months
ended
December 31,
|
Year ended
June 30,
|
||||||||||||||
2018
|
2017
|
2016
|
2016
|
|||||||||||||
Domestic
|
$
|
13,405
|
$
|
7,461
|
$
|
3,165
|
$
|
3,758
|
||||||||
Foreign
|
123,718
|
92,783
|
27,433
|
68,472
|
||||||||||||
$
|
137,123
|
$
|
100,244
|
$
|
30,598
|
$
|
72,230
|
h. |
Taxes on income (tax benefit) are comprised as follows:
|
Year ended December 31,
|
Six months
ended
December 31,
|
Year ended
June 30,
|
||||||||||||||
2018
|
2017
|
2016
|
2016
|
|||||||||||||
Current taxes:
|
||||||||||||||||
U.S. Federal & State
|
$
|
13,894
|
$
|
19,889
|
$
|
1,047
|
$
|
1,737
|
||||||||
Foreign
|
2,276
|
1,639
|
518
|
263
|
||||||||||||
Total current taxes
|
16,170
|
21,528
|
1,565
|
2,000
|
||||||||||||
Deferred taxes:
|
||||||||||||||||
U.S. Federal & State
|
(1,284
|
)
|
(42
|
)
|
507
|
(1,380
|
)
|
|||||||||
Foreign
|
(5,809
|
)
|
(5,414
|
)
|
3,145
|
(4,999
|
)
|
|||||||||
Total deferred taxes
|
(7,093
|
)
|
(5,456
|
)
|
3,652
|
(6,379
|
)
|
|||||||||
Income taxes, net
|
$
|
9,077
|
$
|
16,072
|
$
|
5,217
|
$
|
(4,379
|
)
|
i. |
Reconciliation of theoretical tax expense to actual tax expense:
|
Year ended December 31,
|
Six months
ended
December 31,
|
Year ended
June 30,
|
||||||||||||||
2018
|
2017
|
2016
|
2016
|
|||||||||||||
Income before taxes, as reported in the consolidated statements of operations
|
$
|
137,123
|
$
|
100,244
|
$
|
30,598
|
$
|
72,230
|
||||||||
Statutory tax rate
|
21
|
%
|
34
|
%
|
34
|
%
|
34
|
%
|
||||||||
Theoretical tax benefits on the above amount at the US statutory tax rate
|
28,796
|
34,083
|
10,403
|
24,558
|
||||||||||||
Income tax at rate other than the U.S. statutory tax rate
|
(26,861
|
)
|
(34,734
|
)
|
(5,396
|
)
|
(30,229
|
)
|
||||||||
Tax Cuts and Jobs Act of 2017
|
8,062
|
18,735
|
-
|
-
|
||||||||||||
Non-deductible expenses
|
(644
|
)
|
(1,545
|
)
|
164
|
1,514
|
||||||||||
Other individually immaterial income tax items, net
|
(276
|
)
|
(467
|
)
|
46
|
(222
|
)
|
|||||||||
Actual tax expense (tax benefit)
|
$
|
9,077
|
$
|
16,072
|
$
|
5,217
|
$
|
(4,379
|
)
|
j. |
Tax assessments:
|
k. |
Tax benefits for Israeli companies under the Law for the Encouragement of Capital Investments, 1959 (the “Investments Law”):
|
l. |
Tax benefits under the Law for the Encouragement of Industry (Taxes), 1969:
|
NOTE 18:- |
FINANCIAL EXPENSES (INCOME), NET
|
Year ended
December 31,
|
Six months
ended
December 31,
|
Year ended
June 30,
|
||||||||||||||
2018
|
2017
|
2016
|
2016
|
|||||||||||||
Interest income on marketable securities
|
$
|
(5,629
|
)
|
$
|
(4,398
|
)
|
$
|
(1,504
|
)
|
$
|
(1,112
|
)
|
||||
Exchange rate loss (income), net
|
4,725
|
(8,111
|
)
|
3,521
|
(27
|
)
|
||||||||||
Interest expenses
|
2,536
|
-
|
-
|
-
|
||||||||||||
Amortization of marketable securities premium and accretion of discount, net
|
1,242
|
2,017
|
685
|
532
|
||||||||||||
Expenses (income), net, related to hedging transactions
|
(698
|
)
|
1,334
|
87
|
136
|
|||||||||||
Other financial expenses, net
|
121
|
-
|
-
|
-
|
||||||||||||
$
|
2,297
|
$
|
(9,158
|
)
|
$
|
2,789
|
$
|
(471
|
)
|
NOTE 19:- |
SEGMENT, GEOGRAPHIC, MAJOR CUSTOMER AND PRODUCT INFORMATION
|
a. |
Segment Information:
|
As of December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
Solar
|
$
|
866,868
|
$
|
641,305
|
$
|
424,743
|
||||||
Non-Solar
|
97,604
|
-
|
-
|
|||||||||
Total assets
|
$
|
964,472
|
$
|
641,305
|
$
|
424,743
|
b. |
Geographic Information:
|
Year ended December 31,
|
Six months
ended
December 31,
|
Year ended
June 30,
|
||||||||||||||
2018
|
2017
|
2016
|
2016
|
|||||||||||||
Revenues based on Customers’ location:
|
||||||||||||||||
United States
|
$
|
505,469
|
$
|
348,949
|
$
|
160,321
|
$
|
334,260
|
||||||||
Europe (*)
|
175,894
|
128,295
|
37,500
|
74,830
|
||||||||||||
Netherlands
|
123,959
|
70,067
|
23,099
|
36,377
|
||||||||||||
Rest of the world
|
131,915
|
59,734
|
19,077
|
44,376
|
||||||||||||
Total revenues
|
$
|
937,237
|
$
|
607,045
|
$
|
239,997
|
$
|
489,843
|
c. |
Major Customers:
|
Year ended December 31,
|
Six months
ended
December 31,
|
Year ended
June 30,
|
||||||||||||||
2018
|
2017
|
2016
|
2016
|
|||||||||||||
Customer A
|
19.4
|
%
|
14.8
|
%
|
11.2
|
%
|
11.6
|
%
|
||||||||
Customer B
|
6.8
|
%
|
8.1
|
%
|
8.4
|
%
|
10.1
|
%
|
||||||||
Customer C
|
-
|
3.0
|
%
|
8.7
|
%
|
10.9
|
%
|
d. |
Products:
|
Year ended December 31,
|
Six months
ended
December 31,
|
Year ended
June 30,
|
||||||||||||||
2018
|
2017
|
2016
|
2016
|
|||||||||||||
Inverters
|
$
|
416,966
|
$
|
290,632
|
$
|
112,585
|
$
|
223,756
|
||||||||
Optimizers
|
432,410
|
286,856
|
115,229
|
244,852
|
||||||||||||
Others
|
87,861
|
29,557
|
12,183
|
21,235
|
||||||||||||
Total revenues
|
$
|
937,237
|
$
|
607,045
|
$
|
239,997
|
$
|
489,843
|
NOTE 19:- |
SEGMENT, GEOGRAPHIC, MAJOR CUSTOMER AND PRODUCT INFORMATION (Cont.)
|
e. |
Long-lived assets by geographic region:
|
As of December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
Israel
|
$
|
59,126
|
$
|
43,273
|
$
|
35,055
|
||||||
Korea
|
41,268
|
-
|
-
|
|||||||||
China
|
10,433
|
5,985
|
36
|
|||||||||
Europe
|
6,600
|
1,219
|
466
|
|||||||||
U.S.
|
1,369
|
567
|
515
|
|||||||||
Other
|
533
|
138
|
50
|
|||||||||
Total long-lived assets*
|
$
|
119,329
|
$
|
51,182
|
$
|
36,122
|
NOTE 20:- |
SUBSEQUENT EVENTS
|
SOLAREDGE TECHNOLOGIES, INC.
|
||
By:
|
/s/ Guy Sella
|
|
Name: Guy Sella
|
||
Title: Chief Executive Officer and Chairman
|
||
Date:
|
February 28, 2019
|
Signature
|
Title
|
Date
|
/s/Guy Sella
Guy Sella |
Chief Executive Officer and Chairman
( Principal Executive Officer ) |
February 28, 2019
|
/s/Ronen Faier
Ronen Faier |
Chief Financial Officer
( Principal Financial and Accounting Officer ) |
February 28, 2019
|
/s/Dan Avida
Dan Avida |
Director
|
February 28, 2019
|
/s/Yoni Cheifetz
Yoni Cheifetz |
Director
|
February 28, 2019
|
/s/Marcel Gani
Marcel Gani |
Director
|
February 28, 2019
|
/s/Doron Inbar
Doron Inbar |
Director
|
February 28, 2019
|
/s/Avery More
Avery More |
Director
|
February 28, 2019
|
/s/Tal Payne
Tal Payne |
Director
|
February 28, 2019
|
1 Year SolarEdge Technologies Chart |
1 Month SolarEdge Technologies Chart |
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