SolarEdge dips after another weak quarter

SolarEdge CEO Zvi Lando credit: Eyal Izhar
SolarEdge CEO Zvi Lando credit: Eyal Izhar

First quarter revenue was 78% below the the corresponding quarter of 2023.

The first quarter was another weak one for solar energy solutions company SolarEdge Technologies (Nasdaq: SEDG), and the company’s second quarter guidance indicates that recovery is not nigh. A sign of that came two weeks ago, when competitor Enphase Energy (Nasdaq: ENPH) released financials indicating that recovery in the market was some way off, and, in response, SolarEdge’s share price fell as well. In late trading yesterday, after the release of its own financials, SolarEdge fell 8.5%.

For several quarters now, the company has been suffering from a decline in demand, mainly because of high levels of stocks at its distributors. In the first quarter, revenue was a little above the consensus analysts’ estimate, at $204 million, which was 78% below the figure for the corresponding quarter of 2023. Revenue from the solar segment was down 33%, at $190 million. 45% of revenue was from Europe, 34% from the US, and the remainder from the rest of the world.

SolarEdge reported a GAAP-based net loss of $157 million, which compares with a net profit of $138 million in the corresponding quarter. On a non-GAAP basis, the net loss was $109 million, or $1.9 per share; the analysts’ estimate was a loss per share of $1.57.

Cash used in operating activities was $217 million, which compares with $140 million used in the previous quarter, and $7.9 million cash generated from operating activities in the corresponding quarter of 2023. At the end of the first quarter, SolarEdge had cash and cash equivalents of $316.3 million, net of debt, which compares with $634.7 million at the end of 2023. The company used $33 million to buy back its own shares in the first quarter, at an average of $65.67 per share, which is higher than the current market price.

For the second quarter, SolarEdge expects revenue of $250 million to $280 million, which will represent an improvement over the first quarter, but a decline in relation to the corresponding quarter of 2023. The analysts expected $306 million. The non-GAAP gross margin is expected to be between minus 4.0% and zero.

"Our first quarter results were aligned with our expectations of inventory clearing and typical seasonality. As we enter spring when installations historically tend to rise, we expect channel inventory to continue to decline and revenues to improve. In parallel, we are focused on a suite of new products that we plan to release in the next several quarters to position ourselves for the next growth cycle in our industry," SolarEdge CEO Zvi Lando said.

Earlier this year, the company announced the layoffs of 900 employees, 550 of them in Israel.

SolarEdge has a current market cap of just over $3 billion. At its peak, the company’s market cap was almost $20 billion, and for a brief period its was the most valuable Israeli company traded in New York.

Published by Globes, Israel business news - - on May 9, 2024.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.

SolarEdge CEO Zvi Lando credit: Eyal Izhar
SolarEdge CEO Zvi Lando credit: Eyal Izhar
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