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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 | |
---|---|---|---|---|---|---|---|---|---|---|
-4.80 | -8.34% | 52.75 | 52.51 | 52.74 | 186,871 | 13:31:33 |
SolarEdge Technologies, Inc. (Nasdaq: SEDG), a global leader in smart energy technology, today announced its financial results for the second quarter ended June 30, 2023.
Second Quarter 2023 Highlights
“We are pleased with our results for the second quarter, in particular our strong performance in Europe in both the residential and commercial solar segments. While the U.S. residential solar market is currently seeing some headwinds primarily related to higher interest rates, we are navigating through this period by leveraging our geographic and multi-segment strengths in the solar markets and expect to benefit from the positive long-term outlook for this sector,” said Zvi Lando, Chief Executive Officer of SolarEdge.
Second Quarter 2023 Summary
The Company reported record revenues of $991.3 million, up 5% from $943.9 million in the prior quarter and up 36% from $727.8 million in the same quarter last year.
Revenues from the solar segment were a record $947.4 million, up 4% from $908.5 million in the prior quarter and up 38% from $687.6 million in the same quarter last year.
GAAP gross margin was 32.0%, up from 31.8% in the prior quarter and up from 25.1% in the same quarter last year.
Non-GAAP gross margin* was 32.7%, up slightly from 32.6% in the prior quarter and up from 26.7% in the same quarter last year.
Gross margin from the solar segment was 34.7%, down slightly from 35.0% in the prior quarter and up from 28.1% in the same quarter last year.
GAAP operating expenses were $166.9 million, up 7% from $156.0 million in the prior quarter and up 14% from $146.6 million in the same quarter last year.
Non-GAAP operating expenses* were $133.3 million, up 8% from $123.6 million in the prior quarter and up 22% from $109.6 million in the same quarter last year.
GAAP operating income was a record $150.4 million, up 4% from $144.2 million in the prior quarter and up 318% from $36.0 million in the same quarter last year.
Non-GAAP operating income* was a record $191.0 million, up 4% from $183.8 million in the prior quarter and up 126% from $84.7 million in the same quarter last year.
GAAP net income was $119.5 million, down 14% from $138.4 million in the prior quarter and up 692% from $15.1 million in the same quarter last year.
Non-GAAP net income* was $157.4 million, down 10% from $174.5 million in the prior quarter and up 177% from $56.7 million in the same quarter last year.
GAAP net diluted EPS was $2.03, down from $2.35 in the prior quarter and up from $0.26 in the same quarter last year.
Non-GAAP net diluted EPS* was $2.62, down from $2.90 in the prior quarter and up from $0.95 in the same quarter last year.
Cash used in operating activities was $88.7 million, compared with $7.9 million generated from operating activities in the prior quarter and $77.4 million generated from operating activities in the same quarter last year.
As of June 30, 2023, cash, cash equivalents, bank deposits, restricted bank deposits and marketable securities totaled $853.5 million, net of debt, compared to $1.01 billion on March 31, 2023.
Outlook for the Third Quarter 2023
The Company also provides guidance for the third quarter ending September 30, 2023 as follows:
*
Non-GAAP financial measure. See “Non-GAAP Financial Measures” for additional information on non-GAAP financial measures and a reconciliation to the most comparable GAAP measures.
**
Non-GAAP gross margin and Non-GAAP operating income are non-GAAP financial measures and have not been reconciled to the most comparable GAAP outlook because it is not possible to do so without unreasonable efforts due to the uncertainty and potential variability of reconciling items, which are dependent on future events and often outside of management’s control and which could be significant. Because such items cannot be reasonably predicted with the level of precision required, we are unable to provide outlook for the comparable GAAP measures. Forward-looking estimates of Non-GAAP gross margin and Non-GAAP operating income are made in a manner consistent with the relevant definitions and assumptions noted herein and in our filings with the SEC.
Conference Call
The Company will host a conference call to discuss these results at 4:30 p.m. ET on Tuesday, August 1, 2023. The call will be available, live, to interested parties by dialing 877-888-4294. For international callers, please dial +1 785-424-1881. The Conference ID is SEDG. To avoid a delay in connecting to the call, please dial in 10 minutes prior to the start time. A live webcast will also be available in the Investors Relations section of the Company’s website at: http://investors.solaredge.com
A replay of the webcast will be available in the Investor Relations section of the Company’s web site approximately two hours after the conclusion of the call and will remain available for approximately 30 calendar days.
About SolarEdge
SolarEdge is a global leader in smart energy technology. By leveraging world-class engineering capabilities and with a relentless focus on innovation, SolarEdge creates smart energy solutions that power our lives and drive future progress. SolarEdge developed an intelligent inverter solution that changed the way power is harvested and managed in photovoltaic (PV) systems. The SolarEdge DC optimized inverter seeks to maximize power generation while lowering the cost of energy produced by the PV system. Continuing to advance smart energy, SolarEdge addresses a broad range of energy market segments through its PV, storage, EV charging, batteries, electric vehicle powertrains, and grid services solutions. SolarEdge is online at www.solaredge.com
Use of Non-GAAP Financial Measures
The Company has presented certain non-GAAP financial measures in this release, such as non-GAAP net income, non-GAAP net diluted EPS, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income and non-GAAP gross margin from sale of solar products. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either exclude or include amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States, or GAAP. Reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure can be found in the accompanying tables to this release. These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same captions and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies. As such, these non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
The Non-GAAP measures are presented in this press release because we believe that they provide investors with a means of evaluating and understanding how the Company’s management evaluates the company’s operating performance. The non-GAAP financial measures in this earnings release may differ from similarly titled measures used by other companies.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
This release contains forward looking statements which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include information, among other things, concerning: our possible or assumed future results of operations; future demands for solar energy solutions; business strategies; technology developments; financing and investment plans; dividend policy; competitive position; industry and regulatory environment; general economic conditions; potential growth opportunities; and the effects of competition. These forward-looking statements are often characterized by the use of words such as “anticipate,” “believe,” “could,” “seek,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or similar expressions and the negative or plural of those terms and other like terminology.
Forward-looking statements are only predictions based on our current expectations and our projections about future events. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. Given these factors, you should not place undue reliance on these forward-looking statements. These factors include, but are not limited to, the matters discussed in the section entitled “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2022, filed on February 22, 2023 and our quarterly reports filed on Form 10-Q, Current Reports on Form 8-K and other reports filed with the SEC. All information set forth in this release is as of August 1, 2023. The Company undertakes no duty or obligation to update any forward-looking statements contained in this release, whether as a result of new information, future events or changes in its expectations or otherwise, except as may be required by applicable law, regulation or other competent legal authority.
SOLAREDGE TECHNOLOGIES INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data)
Three Months Ended June 30,
Six Months Ended June 30,
2023
2022
2023
2022
Unaudited
Revenues
$
991,290
$
727,774
$
1,935,179
$
1,382,854
Cost of revenues
673,985
545,132
1,317,748
1,021,254
Gross profit
317,305
182,642
617,431
361,600
Operating expenses:
Research and development
86,526
74,847
166,399
141,196
Sales and marketing
44,222
38,975
85,188
74,291
General and administrative
36,199
28,121
72,766
54,550
Other operating expense (income), net
—
4,687
(1,434
)
4,687
Total operating expenses
166,947
146,630
322,919
274,724
Operating income
150,358
36,012
294,512
86,876
Financial income (expense), net
3,384
(14,311
)
27,058
(18,916
)
Other loss
—
—
(125
)
(844
)
Income before income taxes
153,742
21,701
321,445
67,116
Income taxes
34,232
6,617
63,557
18,909
Net income
$
119,510
$
15,084
$
257,888
$
48,207
SOLAREDGE TECHNOLOGIES INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except per share data)
June 30, 2023
December 31, 2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
557,744
$
783,112
Marketable securities
493,176
241,117
Trade receivables, net of allowances of $6,890 and $3,202, respectively
1,149,820
905,146
Inventories, net
984,194
729,201
Prepaid expenses and other current assets
264,188
241,082
Total current assets
3,449,122
2,899,658
LONG-TERM ASSETS:
Marketable securities
435,800
645,491
Deferred tax assets, net
49,993
44,153
Property, plant and equipment, net
580,503
543,969
Operating lease right-of-use assets, net
66,387
62,754
Intangible assets, net
43,656
19,929
Goodwill
42,332
31,189
Other long-term assets
28,772
18,806
Total long-term assets
1,247,443
1,366,291
Total assets
$
4,696,565
$
4,265,949
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Trade payables, net
434,602
459,831
Employees and payroll accruals
74,709
85,158
Warranty obligations
146,150
103,975
Deferred revenues and customers advances
28,135
26,641
Accrued expenses and other current liabilities
214,133
214,112
Total current liabilities
897,729
889,717
LONG-TERM LIABILITIES:
Convertible senior notes, net
625,914
624,451
Warranty obligations
342,437
281,082
Deferred revenues
204,693
186,936
Finance lease liabilities
42,208
45,385
Operating lease liabilities
47,046
46,256
Other long-term liabilities
16,349
15,756
Total long-term liabilities
1,278,647
1,199,866
COMMITMENTS AND CONTINGENT LIABILITIES
STOCKHOLDERS’ EQUITY:
Common stock of $0.0001 par value - Authorized: 125,000,000 shares as of June 30, 2023 and December 31, 2022; issued and outstanding: 56,556,340 and 56,133,404 shares as of June 30, 2023 and December 31, 2022, respectively
6
6
Additional paid-in capital
1,595,890
1,505,632
Accumulated other comprehensive loss
(77,432
)
(73,109
)
Retained earnings
1,001,725
743,837
Total stockholders’ equity
2,520,189
2,176,366
Total liabilities and stockholders’ equity
$
4,696,565
$
4,265,949
SOLAREDGE TECHNOLOGIES INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands, except per share data)
Six Months Ended June 30,
2023
2022
Cash flows from operating activities:
Net income
$
257,888
$
48,207
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization
26,725
24,138
Loss (gain) from exchange rate fluctuations
(23,214
)
20,398
Stock-based compensation expenses
78,200
71,181
Impairment of goodwill and intangible assets
—
4,008
Deferred income taxes, net
(7,636
)
(1,092
)
Other items
4,783
11,396
Changes in assets and liabilities:
Inventories, net
(246,193
)
(93,348
)
Prepaid expenses and other assets
(33,285
)
(79,215
)
Trade receivables, net
(235,086
)
(235,316
)
Trade payables, net
(22,304
)
(7,339
)
Employees and payroll accruals
8,283
5,202
Warranty obligations
103,524
59,588
Deferred revenues and customers advances
17,222
32,277
Accrued expenses and other liabilities, net
(9,695
)
54,341
Net cash used in operating activities
(80,788
)
(85,574
)
Cash flows from investing activities:
Investment in available-for-sale marketable securities
(124,138
)
(362,119
)
Proceed from sales and maturities of available-for-sale marketable securities
86,813
126,287
Purchase of property, plant and equipment
(84,075
)
(91,884
)
Business combinations, net of cash acquired
(16,653
)
—
Purchase of intangible assets
(10,000
)
—
Investment in privately-held companies
(6,750
)
—
Proceed from government grants in relation to capital expenditures
6,797
—
Other investing activities
3,552
1,783
Net cash used in investing activities
(144,454
)
(325,933
)
Cash flows from financing activities:
Tax withholding in connection with stock-based awards, net
(8,811
)
(2,318
)
Payment of finance lease liability
(1,428
)
(1,374
)
Proceeds from secondary public offering, net of issuance costs
—
650,526
Other financing activities
98
1,572
Net cash provided by (used in) financing activities
(10,141
)
648,406
Increase (decrease) in cash and cash equivalents
(235,383
)
236,899
Cash and cash equivalents at the beginning of the period
783,112
530,089
Effect of exchange rate differences on cash and cash equivalents
10,015
(21,454
)
Cash and cash equivalents at the end of the period
557,744
745,534
SOLAREDGE TECHNOLOGIES INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited) (in thousands, except per share data and percentages)
Reconciliation of GAAP to Non-GAAP
Q2-22
Q3-22
Q4-22
Q1-23
Q2-23
Gross profit (GAAP)
$
182,642
$
222,001
$
261,047
$
300,126
$
317,305
Revenues from finance component
(146
)
(159
)
(174
)
(187
)
(202
)
Stock-based compensation
5,286
4,661
6,810
5,927
5,923
Amortization of stock-based compensation capitalized in inventories
—
—
—
—
316
Disposal of assets related to Critical Power
4,314
—
—
—
—
Amortization and depreciation of acquired asset
2,184
2,064
961
1,515
872
Gross profit (Non-GAAP)
$
194,280
$
228,567
$
268,644
$
307,381
$
324,214
Gross margin (GAAP)
25.1
%
26.5
%
29.3
%
31.8
%
32.0
%
Revenues from finance component
0.0
%
0.0
%
0.0
%
0.0
%
0.0
%
Stock-based compensation
0.7
%
0.6
%
0.8
%
0.6
%
0.6
%
Amortization of stock-based compensation capitalized in inventories
—
%
—
%
—
%
—
%
0.0
%
Disposal of assets related to Critical Power
0.6
%
—
%
—
%
—
%
—
%
Amortization and depreciation of acquired assets
0.3
%
0.2
%
0.1
%
0.2
%
0.1
%
Gross margin (Non-GAAP)
26.7
%
27.3
%
30.2
%
32.6
%
32.7
%
Operating expenses (GAAP)
$
146,630
$
137,594
$
266,210
$
155,972
$
166,947
Stock-based compensation - R&D
(16,819
)
(14,553
)
(16,854
)
(17,209
)
(17,272
)
Stock-based compensation - S&M
(7,047
)
(9,341
)
(7,928
)
(8,079
)
(7,822
)
Stock-based compensation - G&A
(7,922
)
(7,196
)
(7,015
)
(8,020
)
(7,948
)
Amortization and depreciation of acquired assets - R&D
(300
)
(302
)
(301
)
(313
)
(289
)
Amortization and depreciation of acquired assets - S&M
(226
)
(187
)
(173
)
(181
)
(235
)
Amortization and depreciation of acquired assets - G&A
(5
)
(6
)
(4
)
(26
)
17
Assets impairment
(4,696
)
19
(114,473
)
—
—
Gain (loss) from assets sales and disposal
—
2,303
(102
)
1,434
—
Acquisition costs
—
—
(350
)
—
(135
)
Operating expenses (Non-GAAP)
$
109,615
$
108,331
$
119,010
$
123,578
$
133,263
SOLAREDGE TECHNOLOGIES INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited) (in thousands, except per share data and percentages)
Reconciliation of GAAP to Non-GAAP
Q2-22
Q3-22
Q4-22
Q1-23
Q2-23
Operating income (loss) (GAAP)
$
36,012
$
84,407
$
(5,163
)
$
144,154
$
150,358
Revenues from finance component
(146
)
(159
)
(174
)
(187
)
(202
)
Disposal of assets related to Critical Power
4,314
—
—
—
—
Stock-based compensation
37,074
35,751
38,607
39,235
38,965
Amortization of stock-based compensation capitalized in inventories
—
—
—
—
316
Amortization and depreciation of acquired assets
2,715
2,559
1,439
2,035
1,379
Assets impairment
4,696
(19
)
114,473
—
—
Loss (gain) from assets sales and disposal
—
(2,303
)
102
(1,434
)
—
Acquisition costs
—
—
350
—
135
Operating income (Non-GAAP)
$
84,665
$
120,236
$
149,634
$
183,803
$
190,951
Financial income (expense), net (GAAP)
$
(14,311
)
$
(33,025
)
$
56,101
$
23,674
$
3,384
Non cash interest expense
2,427
2,505
2,685
2,892
3,105
Unrealized losses (gains)
—
—
(170
)
—
—
Currency fluctuation related to lease standard
(9,028
)
(1,116
)
749
(2,519
)
(2,107
)
Financial income (expense), net (Non-GAAP)
$
(20,912
)
$
(31,636
)
$
59,365
$
24,047
$
4,382
Other income (loss) (GAAP)
$
—
$
7,533
$
186
$
(125
)
$
—
Gain from sale of investment in privately-held company
—
(7,533
)
(186
)
—
—
Other income (loss) (Non-GAAP)
$
—
$
—
$
—
$
(125
)
$
—
Income tax benefit (expense) (GAAP)
$
(6,617
)
$
(34,172
)
$
(30,295
)
$
(29,325
)
$
(34,232
)
Income tax adjustment
(389
)
(291
)
(7,186
)
(3,901
)
(3,735
)
Income tax benefit (expense) (Non-GAAP)
$
(7,006
)
$
(34,463
)
$
(37,481
)
$
(33,226
)
$
(37,967
)
SOLAREDGE TECHNOLOGIES INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited) (in thousands, except per share data and percentages)
Reconciliation of GAAP to Non-GAAP
Q2-22
Q3-22
Q4-22
Q1-23
Q2-23
Net income (GAAP)
$
15,084
$
24,743
$
20,829
$
138,378
$
119,510
Revenues from finance component
(146
)
(159
)
(174
)
(187
)
(202
)
Disposal of assets related to Critical Power
4,314
—
—
—
—
Stock-based compensation
37,074
35,751
38,607
39,235
38,965
Amortization of stock-based compensation capitalized in inventories
—
—
—
—
316
Amortization and depreciation of acquired assets
2,715
2,559
1,439
2,035
1,379
Assets impairment
4,696
(19
)
114,473
—
—
Loss (gain) from assets sales and disposal
—
(2,303
)
102
(1,434
)
—
Acquisition costs
—
—
350
—
135
Non cash interest expense
2,427
2,505
2,685
2,892
3,105
Unrealized losses (gains)
—
—
(170
)
—
—
Currency fluctuation related to lease standard
(9,028
)
(1,116
)
749
(2,519
)
(2,107
)
Gain from sale of investment in privately-held company
—
(7,533
)
(186
)
—
—
Income tax adjustment
(389
)
(291
)
(7,186
)
(3,901
)
(3,735
)
Net income (Non-GAAP)
$
56,747
$
54,137
$
171,518
$
174,499
$
157,366
Net basic earnings per share (GAAP)
$
0.27
$
0.44
$
0.37
$
2.46
$
2.12
Revenues from finance component
0.00
0.00
0.00
0.00
(0.01
)
Disposal of assets related to Critical Power
0.08
—
—
—
—
Stock-based compensation
0.67
0.64
0.69
0.70
0.70
Amortization of stock-based compensation capitalized in inventories
—
—
—
—
0.00
Amortization and depreciation of acquired assets
0.04
0.05
0.02
0.03
0.03
Assets impairment
0.09
0.00
2.05
—
—
Loss (gain) from assets sales and disposal
—
(0.04
)
0.00
(0.02
)
—
Acquisition costs
—
—
0.01
—
0.00
Non cash interest expense
0.04
0.04
0.05
0.05
0.05
Unrealized losses (gains)
—
—
(0.01
)
—
—
Currency fluctuation related to lease standard
(0.16
)
(0.02
)
0.02
(0.05
)
(0.03
)
Gain from sale of investment in privately-held company
—
(0.13
)
(0.01
)
—
—
Income tax adjustment
(0.01
)
(0.01
)
(0.13
)
(0.07
)
(0.07
)
Net basic earnings per share (Non-GAAP)
$
1.02
$
0.97
$
3.06
$
3.10
$
2.79
SOLAREDGE TECHNOLOGIES INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited) (in thousands, except per share data and percentages)
Reconciliation of GAAP to Non-GAAP
Q2-22
Q3-22
Q4-22
Q1-23
Q2-23
Net diluted earnings per share (GAAP)
$
0.26
$
0.43
$
0.36
$
2.35
$
2.03
Revenues from finance component
0.00
0.00
0.00
(0.01
)
(0.01
)
Disposal of assets related to Critical Power
0.08
—
—
—
—
Stock-based compensation
0.62
0.59
0.64
0.62
0.62
Amortization of stock-based compensation capitalized in inventories
—
—
—
—
0.00
Amortization and depreciation of acquired assets
0.04
0.05
0.02
0.03
0.03
Assets impairment
0.08
0.00
1.91
—
—
Loss (gain) from assets sales and disposal
—
(0.04
)
0.00
(0.02
)
—
Acquisition costs
—
—
0.01
—
0.00
Non cash interest expense
0.03
0.03
0.03
0.04
0.04
Unrealized losses (gains)
—
—
0.00
—
—
Currency fluctuation related to lease standard
(0.15
)
(0.02
)
0.01
(0.04
)
(0.03
)
Gain from sale of investment in privately-held company
—
(0.13
)
0.00
—
—
Income tax adjustment
(0.01
)
0.00
(0.12
)
(0.07
)
(0.06
)
Net diluted earnings per share (Non-GAAP)
$
0.95
$
0.91
$
2.86
$
2.90
$
2.62
Number of shares used in computing net diluted earnings per share (GAAP)
58,564,734
58,747,538
58,734,719
59,193,831
59,183,666
Stock-based compensation
904,781
784,228
1,237,266
939,571
986,527
Number of shares used in computing net diluted earnings per share (Non-GAAP)
59,469,515
59,531,766
59,971,985
60,133,402
60,170,193
View source version on businesswire.com: https://www.businesswire.com/news/home/20230801762615/en/
Investor Contacts SolarEdge Technologies, Inc. JB Lowe, Head of Investor Relations investors@solaredge.com
Sapphire Investor Relations, LLC Erica Mannion or Michael Funari investors@solaredge.com
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