“The results for the third quarter fell short of our prior expectations and are reflecting a slow market environment, which has resulted in high inventory of our products in the distribution channels, in particular in Europe”, said Zvi Lando, Chief Executive Officer of SolarEdge. “While channel inventory clearing is expected to continue in coming quarters, we are optimistic about the future of the solar PV industry and are confident that our leading technology, global presence and broad product offering will enable us to continue to be a leader in this market.”
Third Quarter 2023 Summary
The Company reported revenues of $725.3 million, down 27% from $991.3 million in the prior quarter and down 13% from $836.7 million in the same quarter last year.
* 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.
Revenues from the solar segment were $676.4 million, down 29% from $947.4 million in the prior quarter and down 14% from $788.6 million in the same quarter last year.
GAAP gross margin was 19.7%, down from 32.0% in the prior quarter and down from 26.5% in the same quarter last year.
Non-GAAP gross margin* was 20.8%, down from 32.7% in the prior quarter and down from 27.3% in the same quarter last year.
Gross margin from the solar segment was 24.0%, down from 34.7% in the prior quarter and down from 28.3% in the same quarter last year.
GAAP operating expenses were $159.5 million, down 4% from $166.9 million in the prior quarter and up 16% from $137.6 million in the same quarter last year.
Non-GAAP operating expenses* were $128.0 million, down 4% from $133.3 million in the prior quarter and up 18% from $108.3 million in the same quarter last year.
GAAP operating loss was $16.7 million, down from a GAAP operating income of $150.4 million in the prior quarter and down from GAAP operating income of $84.4 million in the same quarter last year.
Non-GAAP operating income* was $23.1 million, down 88% from $191.0 million in the prior quarter and down 81% from $120.2 million in the same quarter last year.
GAAP net loss was $61.2 million, down from a GAAP net income of $119.5 million in the prior quarter and down from a GAAP net income of $24.7 million in the same quarter last year.
Non-GAAP net loss* was $31.0 million, down from a Non-GAAP net income of $157.4 million in the prior quarter and down from a Non-GAAP net income of $54.1 million in the same quarter last year.
GAAP net diluted loss per share was $1.08, down from a GAAP net diluted EPS of $2.03 in the prior quarter and down from a GAAP net diluted EPS of $0.43 in the same quarter last year.
Non-GAAP net diluted loss per share* was $0.55, down from a Non-GAAP net diluted EPS of $2.62 in the prior quarter and down from a Non-GAAP net diluted EPS of $0.91 in the same quarter last year.
Cash generated from operating activities was $40.6 million, compared with $88.7 million used in operating activities in the prior quarter and $5.6 million generated from operating activities in the same quarter last year.
As of September 30, 2023, cash, cash equivalents, bank deposits, restricted bank deposits and marketable securities totaled $831.4 million, net of debt, compared to $853.5 million on June 30, 2023.
________________________________________________________________________
* 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.
Outlook for the Fourth Quarter 2023
The Company also provides guidance for the fourth quarter ending December 31, 2023 as follows:
- Revenues to be within the range of $300 million to $350 million
- Non-GAAP gross margin** expected to be within the range of 5% to 8%, including approximately 130 basis points of net IRA manufacturing tax credit
- Non-GAAP operating expenses** to be within the range of $126 million to $130 million
- Revenues from the solar segment to be within the range of $275 million to $320 million
- Gross margin from the solar segment expected to be within the range of 7% to 10% including approximately 130 basis points of net IRA manufacturing tax credit
**Non-GAAP gross margin and Non-GAAP operating expenses are non-GAAP financial measures, and these forward-looking measures 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 expenses 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 its results for the third quarter ended September 30, 2023 at 4:30 p.m. ET on Wednesday, November 1, 2023. The call will be available, live, to interested parties by dialing 800-343-4136. For international callers, please dial +1 203-518-9843. 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.
