SolarEdge dips after another weak quarter

Solar energy solutions company SolarEdge Technologies (Nasdaq: SEDG) had another weak first quarter, with second quarter guidance indicating continued challenges ahead. The market sentiment was further dampened by competitor Enphase Energy’s (Nasdaq: ENPH) recent financial results, causing SolarEdge’s share price to drop. Following the release of its financials, SolarEdge’s stock fell 8.5% in late trading yesterday.

The company has been facing declining demand for several quarters, largely due to high inventory levels at its distributors. First quarter revenue slightly exceeded analysts’ expectations at $204 million, representing a 78% decrease compared to the same quarter in 2023. Solar segment revenue decreased by 33% to $190 million, with 45% of revenue coming from Europe, 34% from the US, and the remaining from other regions.

SolarEdge reported a GAAP-based net loss of $157 million, a significant contrast to the $138 million net profit in the previous year’s first quarter. On a non-GAAP basis, the net loss was $109 million, or $1.9 per share, higher than the projected loss per share of $1.57.

Operating activities consumed $217 million in cash, compared to $140 million in the previous quarter and a $7.9 million cash generation in the first quarter of 2023. The company ended the first quarter with $316.3 million in cash and cash equivalents, net of debt, down from $634.7 million at the end of 2023. SolarEdge also spent $33 million on share buybacks at an average price of $65.67 per share.

For the second quarter, SolarEdge anticipates revenue between $250 million and $280 million, showing improvement from the first quarter but a decline from the previous year’s second quarter. The expected non-GAAP gross margin is between minus 4.0% and zero.

CEO Zvi Lando expressed optimism for the future, saying, \”Our first quarter results were aligned with our expectations of inventory clearing and typical seasonality. As we enter spring and installations historically increase, we anticipate further declines in channel inventory and revenue improvements. We are also focusing on releasing new products in the coming quarters to position ourselves for future industry growth cycles.\”

Earlier this year, SolarEdge announced the layoff of 900 employees, including 550 in Israel.

With a current market cap of just over $3 billion, SolarEdge’s peak market cap was nearly $20 billion, making it briefly the most valuable Israeli company traded in New York.

Published by Globes, Israel business news – en.globes.co.il – on May 9, 2024.

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