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SolarEdge Announces Second Quarter 2020 Financial Results

FREMONT, Calif. — August 3, 2020. SolarEdge Technologies, Inc. (Nasdaq: SEDG), a global leader in smart energy technology, today announced its financial results for the second quarter ended June 30, 2020.

Second Quarter 2020 Highlights

  • Revenues of $331.9 million
  • Revenues from solar products of $310.1 million
  • GAAP gross margin of 31.0%
  • GAAP gross margin from sale of solar products of 33.1%
  • Non-GAAP gross margin from sale of solar products of 33.8%
  • GAAP net income of $36.7 million
  • Non-GAAP net income of $52.1 million
  • GAAP net diluted earnings per share (“EPS”) of $0.70
  • Non-GAAP net diluted EPS of $0.97
  • 1.44 Gigawatts (AC) of inverters shipped

“This quarter, despite the challenges caused by COVID 19, we maintained healthy profitability while generating cash from operating activity,” said Zivi Lando, CEO of SolarEdge. “Our global strength, and in particular our loyal customer base in the Netherlands, Germany, Italy and Australia, softened the decline in U.S. demand this past quarter. While the pandemic has created many operational challenges, I am confident in our financial strength and grateful for the trust of our customers and dedication of our employees which enable us to continue to focus on product innovation and execution of our long term plans even in these challenging times.”

Second Quarter 2020 Summary

The Company reported revenues of $331.9 million, down 23% from $431.2 million in the prior quarter and up 2% from $325.0 million in the same quarter last year.

Revenues related to the solar business were $310.1 million, down 24% from $407.6 million in the prior quarter and up 1% from $306.7 million in the same quarter last year.

GAAP gross margin was 31.0%, down from 32.5% in the prior quarter and down from 34.1% year over year.

Non-GAAP gross margin was 32.4%, down from 33.6% in the prior quarter and down from 35.7% year over year.

GAAP gross margin for the solar business was 33.1%, down from 34.6% in the prior quarter and down from 36.4% year over year.

Non-GAAP gross margin for the solar business was 33.8%, down from 35.0% in the prior quarter and down from 36.9% year over year.

GAAP operating expenses were $73.0 million, up 1% from $72.2 million in the prior quarter and up 12% from $65.3 million in the same quarter last year.

Non-GAAP operating expenses were $61.1 million, down 8% from $66.3 million in the prior quarter and up 11% from $54.9 million in the same quarter last year.

GAAP operating income was $30.0 million, down 56% from $67.8 million in the prior quarter and down 34% from $45.4 million in the same quarter last year.

Non-GAAP operating income was $46.6 million, down 41% from $78.6 million in the prior quarter and down 24% from $61.0 million in the same quarter last year.

GAAP net income was $36.7 million, down 13% from $42.2 million in the prior quarter and up 11% from $33.1 million in the same quarter last year.

Non-GAAP net income was $52.1 million, up 3% from $50.7 million in the prior quarter and up 6% from $49.3 million in the same quarter last year.

GAAP net diluted EPS was $0.70, down from $0.81 in the prior quarter and up from $0.66 in the same quarter last year.

Non-GAAP net diluted EPS was $0.97, up from $0.95 in the prior quarter and up from $0.94 in the same quarter last year.

Cash flow from operating activities was $59.3 million, down from $107.7 million in the prior quarter and up from $50.8 million in the same quarter last year.

As of June 30, 2020, cash, cash equivalents, bank deposits, restricted bank deposits and marketable securities totaled $592.7 million, compared to $467.5 million on December 31, 2019.

Outlook for the Third Quarter 2020

The Company also provides guidance for the third quarter ending September 30, 2020 as follows:

  • Revenues to be within the range of $325 million to $350 million
  • Non-GAAP Gross margin expected to be within the range of 32% to 34%
  • Revenues from solar products to be within the range of $305 million to $325 million
  • Non-GAAP Gross margin from sale of solar products expected to be within the range of 33% to 35%

Conference Call

The Company will host a conference call to discuss these results at 4:30 P.M. ET on Monday, August 3, 2020. The call will be available, live, to interested parties by dialing 800-256-1007. For international callers, please dial +1 323-994-2093. The Conference ID number is 7031770.  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. 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 PV systems. Continuing to advance smart energy, SolarEdge addresses a broad range of energy market segments through its PV, storage, EV charging, batteries, UPS, electric vehicle powertrains, and grid services solutions. SolarEdge is online at solaredge.com

Use of Non-GAAP Financial Measures

The Company has presented certain non-GAAP financial measures in this release, such as non-GAAP net income, non-GAAP net diluted EPS, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income and non-GAAP gross margin from sale of solar products. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either exclude or include amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States, or GAAP. Reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure can be found in the accompanying tables to this release. These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same captions and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies. As such, these non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.

 

The Company uses these non-GAAP financial measures to analyze its operating performance and future prospects, develop internal budgets and financial goals, and to facilitate period-to-period comparisons. The Company believes that these non-GAAP financial measures reflect an additional way of viewing aspects of its operations that, when viewed with its GAAP results, provide a more complete understanding of factors and trends affecting its business.

 

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This release contains forward looking statements which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements include information, among other things, concerning: our possible or assumed future results of operations; future demands for solar energy solutions; business strategies; technology developments; financing and investment plans; dividend policy; competitive position; industry and regulatory environment; general economic conditions; potential growth opportunities; and the effects of competition. These forward-looking statements are often characterized by the use of words such as “anticipate,” “believe,” “could,” “seek,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or similar expressions and the negative or plural of those terms and other like terminology.

Forward-looking statements are only predictions based on our current expectations and our projections about future events.  These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. Given these factors, you should not place undue reliance on these forward-looking statements.  These factors include, but are not limited to, the matters discussed in the section entitled “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2019, filed on February 27, 2020, Current Reports on Form 8-K and other reports filed with the SEC. All information set forth in this release is as of August 3, 2020.  The Company undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events or changes in its expectations.

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