FREMONT, Calif. — November 2, 2020. SolarEdge Technologies, Inc. (Nasdaq: SEDG), a global leader in smart energy technology, today announced its financial results for the third quarter ended September 30, 2020.
Third Quarter 2020 Highlights
- Revenues of $338.1 million
- Revenues from solar products of $312.5 million
- GAAP gross margin of 32.0%
- GAAP gross margin from sale of solar products of 34.1%
- Non-GAAP gross margin from sale of solar products of 34.8%
- GAAP net income of $43.8 million
- Non-GAAP net income of $65.9 million
- GAAP net diluted earnings per share (“EPS”) of $0.83
- Non-GAAP net diluted EPS of $1.21
- 1.45 Gigawatts (AC) of inverters shipped
“Our third quarter results reflect significant growth in Europe, despite the current economic slowdown caused by the global pandemic,” said Zivi Lando, CEO of SolarEdge. “Our solar business outside the U.S. reached an all-time high and the U.S. market is showing signs of return to pre-pandemic installation levels. In our non-solar business, our e-Mobility team is gearing up to deliver to our customer the first significant batch of full powertrain solutions for assembly in electric vehicles in the fourth quarter. In addition to continuing to generate significant cash from operations this quarter, we raised $618 million, net of expenses, in convertible debt providing additional support for our continued organic and non-organic growth.”
Third Quarter 2020 Summary
The Company reported revenues of $338.1 million, up 2% from $331.9 million in the prior quarter and down 18% from $410.6 million in the same quarter last year.
Revenues related to the solar business were $312.5 million, up 1% from $310.1 million in the prior quarter and down 19% from $387.8 million in the same quarter last year.
GAAP gross margin was 32.0%, up from 31.0% in the prior quarter and down from 33.9% year over year.
Non-GAAP gross margin was 33.5%, up from 32.4% in the prior quarter and down from 35.1% year over year.
GAAP gross margin for the solar business was 34.1%, up from 33.1% in the prior quarter and down from 35.0% year over year.
Non-GAAP gross margin for the solar business was 34.8%, up from 33.8% in the prior quarter and down from 35.4% year over year.
GAAP operating expenses were $77.7 million, up 6% from $73.0 million in the prior quarter and up 6% from $73.3 million in the same quarter last year.
Non-GAAP operating expenses were $63.2 million, up 3% from $61.1 million in the prior quarter and up 15% from $54.8 million in the same quarter last year.
GAAP operating income was $30.4 million, up 1% from $30.0 million in the prior quarter and down 54% from $66.0 million in the same quarter last year.
Non-GAAP operating income was $50.0 million, up 7% from $46.6 million in the prior quarter and down 44% from $89.2 million in the same quarter last year.
GAAP net income was $43.8 million, up 19% from $36.7 million in the prior quarter and up 5% from $41.6 million in the same quarter last year.
Non-GAAP net income was $65.9 million, up 26% from $52.1 million in the prior quarter and up 4% from $63.6 million in the same quarter last year.
GAAP net diluted EPS was $0.83, up from $0.70 in the prior quarter and up from $0.81 in the same quarter last year.
Non-GAAP net diluted EPS was $1.21, up from $0.97 in the prior quarter and same as in the same quarter last year.
Cash flow from operating activities was $28.4 million, down from $59.3 million in the prior quarter and down from $68.7 million in the same quarter last year.
As of September 30, 2020, cash, cash equivalents, bank deposits, restricted bank deposits and marketable securities totaled $553.8 million, net of debt, compared to $577.4 million on June 30, 2020.
Outlook for the Fourth Quarter 2020
The Company also provides guidance for the fourth quarter ending December 31, 2020 as follows:
- Revenues to be within the range of $345 million to $365 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 $320 million to $335 million
• Non-GAAP Gross margin from sale of solar products expected to be within the range of 34% to 36%
Conference Call
The Company will host a conference call to discuss these results at 4:30 P.M. ET on Monday, November 2, 2020. The call will be available, live, to interested parties by dialing 800-458-4121. For international callers, please dial +1 323-794-2093. The Conference ID number is 7783916. 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 website 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, 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.
