SolarEdge Announces First Quarter 2021 Financial Results
First Quarter 2021 Highlights
-
Revenues of
$405.5 million -
Revenues from solar products of
$376.4 million - GAAP gross margin of 34.5%
- Non-GAAP gross margin of 36.5%
- GAAP gross margin from sale of solar products of 38.3%
- Record non-GAAP gross margin from sale of solar products of 39.7%
-
GAAP net income of
$30.1 million -
Non-GAAP net income of
$55.5 million -
GAAP net diluted earnings per share (“EPS”) of
$0.55 -
Non-GAAP net diluted EPS of
$0.98 - 1.69 Gigawatts (AC) of inverters shipped
“We are happy to report our first quarter results, representing continued growth in our solar business across geographies and segments,” said
First Quarter 2021 Summary
The Company reported revenues of
Revenues related to the sale of solar products were
GAAP gross margin was 34.5%, up from 30.8% in the prior quarter and up from 32.5% year over year.
Non-GAAP gross margin was 36.5%, up from 32.5% in the prior quarter and up from 33.6% year over year.
GAAP gross margin from the sale of solar products was 38.3%, up from 35.3% in the prior quarter and up from 34.6% year over year.
Non-GAAP gross margin from the sale of solar products was 39.7%, up from 36.2% in the prior quarter and up from 35.0% year over year.
GAAP operating expenses were
Non-GAAP operating expenses were
GAAP operating income was
Non-GAAP operating income was
GAAP net income was
Non-GAAP net income was
GAAP EPS was
Non-GAAP net diluted EPS was
Cash flow from operating activities was
As of
Outlook for the Second Quarter 2021
The Company also provides guidance for the second quarter ending
-
Revenues to be within the range of
$445 million to$465 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
$405 million to$420 million - Non-GAAP gross margin from sale of solar products expected to be within the range of 36% to 38%
Conference Call
The Company will host a conference call to discuss these results at
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
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 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/A for the year ended
|
||||||||
|
|
Three months ended
|
||||||
|
|
2021 |
|
2020 |
||||
|
|
Unaudited |
||||||
|
|
|
|
|
||||
Revenues |
|
$ |
405,489 |
|
$ |
431,218 |
|
|
Cost of revenues |
|
|
265,415 |
|
|
291,910 |
|
|
|
|
|
|
|
||||
Gross profit |
|
|
140,074 |
|
|
140,008 |
|
|
|
|
|
|
|
||||
Operating expenses: |
|
|
|
|
||||
Research and development |
|
|
46,977 |
|
|
36,695 |
|
|
Sales and marketing |
|
|
26,911 |
|
|
24,253 |
|
|
General and administrative |
|
|
19,849 |
|
|
16,185 |
|
|
Other operating expenses (income), net |
|
|
2,209 |
|
|
(4,900 |
) |
|
|
|
|
|
|
||||
Total operating expenses |
|
|
95,946 |
|
|
72,233 |
|
|
|
|
|
|
|
||||
Operating income |
|
|
44,128 |
|
|
67,775 |
|
|
|
|
|
|
|
||||
Financial expenses, net |
|
|
6,097 |
|
|
16,605 |
|
|
|
|
|
|
|
||||
Income before income taxes |
|
|
38,031 |
|
|
51,170 |
|
|
|
|
|
|
|
||||
Income taxes |
|
|
7,955 |
|
|
8,922 |
|
|
|
|
|
|
|
||||
Net income |
|
$ |
30,076 |
|
$ |
42,248 |
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
||||
|
|
2021 |
|
2020 |
||||
CURRENT ASSETS: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
685,157 |
|
|
$ |
827,146 |
|
Short-term bank deposits |
|
|
43,626 |
|
|
|
60,096 |
|
Restricted bank deposits |
|
|
2,509 |
|
|
|
2,611 |
|
Marketable securities |
|
|
139,079 |
|
|
|
143,687 |
|
Trade receivables, net of allowances of |
|
|
271,713 |
|
|
|
218,706 |
|
Inventories, net |
|
|
340,038 |
|
|
|
331,696 |
|
Prepaid expenses and other current assets |
|
|
102,985 |
|
|
|
135,399 |
|
Total current assets |
|
|
1,585,107 |
|
|
|
1,719,341 |
|
|
|
|
|
|
||||
LONG-TERM ASSETS: |
|
|
|
|
||||
Marketable securities |
|
|
294,828 |
|
|
|
147,434 |
|
Deferred tax assets, net |
|
|
17,353 |
|
|
|
11,676 |
|
Property, plant and equipment, net |
|
|
312,214 |
|
|
|
303,408 |
|
Operating lease right-of-use assets, net |
|
|
39,804 |
|
|
|
41,600 |
|
Intangible assets, net |
|
|
64,196 |
|
|
|
67,818 |
|
|
|
|
134,620 |
|
|
|
140,479 |
|
Other long-term assets |
|
|
16,473 |
|
|
|
5,353 |
|
Total long-term assets |
|
|
879,488 |
|
|
|
717,768 |
|
|
|
|
|
|
||||
Total assets |
|
$ |
2,464,595 |
|
|
$ |
2,437,109 |
|
|
|
|
|
|
||||
CURRENT LIABILITIES: |
|
|
|
|
||||
Trade payables, net |
|
$ |
122,063 |
|
|
$ |
162,051 |
|
Employees and payroll accruals |
|
|
63,929 |
|
|
|
63,738 |
|
Current maturities of bank loans and accrued interest |
|
|
16,215 |
|
|
|
16,894 |
|
Warranty obligations |
|
|
63,443 |
|
|
|
62,614 |
|
Deferred revenues and customers advances |
|
|
21,065 |
|
|
|
24,648 |
|
Accrued expenses and other current liabilities |
|
|
111,011 |
|
|
|
106,154 |
|
Total current liabilities |
|
|
397,726 |
|
|
|
436,099 |
|
|
|
|
|
|
||||
LONG-TERM LIABILITIES: |
|
|
|
|
||||
Convertible senior notes, net |
|
|
619,357 |
|
|
|
573,350 |
|
Warranty obligations |
|
|
154,510 |
|
|
|
142,380 |
|
Deferred revenues |
|
|
122,168 |
|
|
|
115,372 |
|
Deferred tax liabilities, net |
|
|
- |
|
|
|
8,593 |
|
Finance lease liabilities |
|
|
24,918 |
|
|
|
26,173 |
|
Operating lease liabilities |
|
|
32,667 |
|
|
|
35,194 |
|
Other long-term liabilities |
|
|
13,325 |
|
|
|
14,191 |
|
Total long-term liabilities |
|
|
966,945 |
|
|
|
915,253 |
|
|
|
|
|
|
||||
STOCKHOLDERS’ EQUITY: |
|
|
|
|
||||
Common stock |
|
|
5 |
|
|
|
5 |
|
Additional paid-in capital |
|
|
595,716 |
|
|
|
603,891 |
|
Accumulated other comprehensive income (loss) |
|
|
(6,761 |
) |
|
|
3,857 |
|
Retained earnings |
|
|
510,964 |
|
|
|
478,004 |
|
Total stockholders’ equity |
|
|
1,099,924 |
|
|
|
1,085,757 |
|
|
|
|
|
|
||||
Total liabilities and stockholders’ equity |
|
$ |
2,464,595 |
|
|
$ |
2,437,109 |
|
|
||||||||
|
|
Three months ended
|
||||||
|
|
2021 |
|
2020 |
||||
Cash flows provided by operating activities: |
|
|
|
|||||
Net income |
|
$ |
30,076 |
|
|
$ |
42,248 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
||||
Depreciation of property, plant and equipment |
|
|
6,887 |
|
|
|
5,004 |
|
Amortization of intangible assets |
|
|
2,391 |
|
|
|
2,321 |
|
Amortization of debt discount and debt issuance costs |
|
|
724 |
|
|
|
- |
|
Amortization of premium and accretion of discount on available-for-marketable securities, net |
|
|
1,295 |
|
|
|
120 |
|
Stock-based compensation expenses |
|
|
23,153 |
|
|
|
12,773 |
|
Deferred income taxes, net |
|
|
(2,141 |
) |
|
|
(2,859 |
) |
Loss from disposal of assets |
|
|
2,147 |
|
|
|
6 |
|
Exchange rate fluctuations and other items, net |
|
|
13,303 |
|
|
|
(1,018 |
) |
Changes in assets and liabilities: |
|
|
|
|
||||
Inventories, net |
|
|
(8,376 |
) |
|
|
(29,004 |
) |
Prepaid expenses and other assets |
|
|
20,218 |
|
|
|
49,888 |
|
Trade receivables, net |
|
|
(57,380 |
) |
|
|
59,420 |
|
Trade payables, net |
|
|
(39,034 |
) |
|
|
(17,589 |
) |
Employees and payroll accruals |
|
|
7,477 |
|
|
|
11,821 |
|
Warranty obligations |
|
|
13,088 |
|
|
|
13,809 |
|
Deferred revenues and customers advances |
|
|
3,615 |
|
|
|
(31,729 |
) |
Other liabilities |
|
|
6,640 |
|
|
|
(7,466 |
) |
Net cash provided by operating activities |
|
|
24,083 |
|
|
|
107,745 |
|
Cash flows from investing activities: |
|
|
|
|
||||
Investment in available-for-sale marketable securities |
|
|
(186,528 |
) |
|
|
(31,924 |
) |
Proceed from maturities of available-for-sale marketable securities |
|
|
40,450 |
|
|
|
42,333 |
|
Purchase of property, plant and equipment |
|
|
(24,545 |
) |
|
|
(27,053 |
) |
Withdrawal from (investment in) bank deposits, net |
|
|
16,470 |
|
|
|
(3,316 |
) |
Other investing activities |
|
|
571 |
|
|
|
36 |
|
Net cash used in investing activities |
|
|
(153,582 |
) |
|
|
(19,924 |
) |
Cash flows from financing activities: |
|
|
|
|
||||
Repayment of bank loans |
|
|
(34 |
) |
|
|
(15,232 |
) |
Proceeds from bank loans |
|
|
- |
|
|
|
15,295 |
|
Proceeds from exercise of stock-based awards net of tax withholding |
|
|
(1,716 |
) |
|
|
3,308 |
|
Other financing activities |
|
|
(312 |
) |
|
|
(56 |
) |
Net cash provided by (used in) financing activities |
|
|
(2,062 |
) |
|
|
3,315 |
|
Increase (decrease) in cash and cash equivalents |
|
|
(131,561 |
) |
|
|
91,136 |
|
Cash and cash equivalents at the beginning of the period |
|
|
827,146 |
|
|
|
223,901 |
|
Effect of exchange rate differences on cash and cash equivalents |
|
|
(10,428 |
) |
|
|
9,035 |
|
Cash and cash equivalents at the end of the period |
|
$ |
685,157 |
|
|
$ |
324,072 |
|
||||||
Reconciliation of GAAP to Non-GAAP Gross Profit |
||||||
Three months ended |
||||||
|
|
|
|
|
||
Gross profit (GAAP) |
140,074 |
|
110,325 |
|
140,008 |
|
Revenues from finance component |
(86) |
|
---- |
|
---- |
|
Stock-based compensation |
5,790 |
|
3,720 |
|
2,273 |
|
Cost of product adjustment |
|
---- |
|
---- |
|
313 |
Amortization and depreciation of acquired assets |
2,312 |
|
2,374 |
|
2,356 |
|
Gross profit (Non-GAAP) |
148,090 |
|
116,419 |
|
144,950 |
|
|
|
|
|
|
||
Reconciliation of GAAP to Non-GAAP Gross Margin |
||||||
Three months ended |
||||||
|
|
|
|
|
||
Gross margin (GAAP) |
34.5% |
|
30.8% |
|
32.5% |
|
Revenues from finance component |
0.0% |
|
---- |
|
---- |
|
Stock-based compensation |
|
1.4% |
|
1.0% |
|
0.5% |
Cost of product adjustment |
---- |
|
---- |
|
0.1% |
|
Amortization and depreciation of acquired assets |
0.6% |
|
0.7% |
|
0.5% |
|
Gross margin (Non-GAAP) |
36.5% |
|
32.5% |
|
33.6% |
|
|
|
|
|
|
||
Reconciliation of GAAP to Non-GAAP Operating expenses |
||||||
Three months ended |
||||||
|
|
|
|
|
||
Operating expenses (GAAP) |
95,946 |
|
95,898 |
|
72,233 |
|
Stock-based compensation - R&D |
(8,798) |
|
(8,919) |
|
(5,378) |
|
Stock-based compensation - S&M |
(5,435) |
|
(8,710) |
|
(3,192) |
|
Stock-based compensation - G&A |
(3,130) |
|
(2,967) |
|
(1,930) |
|
Amortization and depreciation of acquired assets - R&D |
(12) |
|
(14) |
|
(26) |
|
Amortization and depreciation of acquired assets - S&M |
(237) |
|
(230) |
|
(295) |
|
Amortization and depreciation of acquired assets - G&A |
(8) |
|
(8) |
|
(9) |
|
Assets sale (disposal) |
62 |
|
(649) |
|
---- |
|
Other operating income (expenses) |
(2,209) |
|
(1,471) |
|
4,900 |
|
Operating expenses (Non-GAAP) |
76,179 |
|
72,930 |
|
66,303 |
|
||||||
Reconciliation of GAAP to Non-GAAP Operating income |
||||||
Three months ended |
||||||
|
|
|
|
|
||
Operating income (GAAP) |
44,128 |
|
14,427 |
|
67,775 |
|
Revenues from finance component |
(86) |
|
---- |
|
---- |
|
Cost of product adjustment |
---- |
|
---- |
|
313 |
|
Stock-based compensation |
23,153 |
|
24,316 |
|
12,773 |
|
Amortization and depreciation of acquired assets |
2,569 |
|
2,626 |
|
2,686 |
|
Assets (sale) disposal |
(62) |
|
649 |
|
---- |
|
Other operating (income) expenses |
2,209 |
|
1,471 |
|
(4,900) |
|
Operating income (Non-GAAP) |
71,911 |
|
43,489 |
|
78,647 |
|
|
|
|
|
|
||
Reconciliation of GAAP to Non-GAAP
|
||||||
Three months ended |
||||||
|
|
|
|
|
||
Financial expenses (income), net (GAAP) |
6,097 |
|
(10,380) |
|
16,605 |
|
Notes due 2025 |
(724) |
|
(3,017) |
|
---- |
|
Non cash interest |
(1,336) |
|
(1,305) |
|
(1,128) |
|
Currency fluctuation related to lease standard |
2,289 |
|
(2,172) |
|
1,033 |
|
Amortization and depreciation of acquired assets |
---- |
|
---- |
|
(982) |
|
Financial expenses (income), net (Non-GAAP) |
6,326 |
|
(16,874) |
|
15,528 |
|
|
|
|
|
|
||
Reconciliation of GAAP to Non-GAAP Tax on income |
||||||
Three months ended |
||||||
|
|
|
|
|
||
Tax on income (GAAP) |
7,955 |
|
7,152 |
|
8,922 |
|
Deferred taxes |
2,141 |
|
(2,522) |
|
3,536 |
|
Tax on income (Non-GAAP) |
10,096 |
|
4,630 |
|
12,458 |
|
||||||
Reconciliation of GAAP to Non-GAAP Net income |
||||||
Three months ended |
||||||
|
|
|
|
|
||
Net income (GAAP) |
30,076 |
|
17,655 |
|
42,248 |
|
Revenues from finance component |
(86) |
|
---- |
|
---- |
|
Cost of product adjustment |
---- |
|
---- |
|
313 |
|
Stock-based compensation |
23,153 |
|
24,316 |
|
12,773 |
|
Amortization and depreciation of acquired assets |
2,569 |
|
2,626 |
|
3,668 |
|
Assets (sale) disposal |
(62) |
|
649 |
|
---- |
|
Other operating (income) expenses |
2,209 |
|
1,471 |
|
(4,900) |
|
Notes due 2025 |
724 |
|
3,017 |
|
---- |
|
Non cash interest |
1,336 |
|
1,305 |
|
1,128 |
|
Currency fluctuation related to lease standard |
(2,289) |
|
2,172 |
|
(1,033) |
|
Deferred taxes |
(2,141) |
|
2,522 |
|
(3,536) |
|
Net income (Non GAAP) |
55,489 |
|
55,733 |
|
50,661 |
|
|
|
|
|
|
||
Reconciliation of GAAP to Non-GAAP Net basic EPS |
||||||
Three months ended |
||||||
|
|
|
|
|
||
Net basic earnings per share (GAAP) |
0.58 |
|
0.34 |
|
0.86 |
|
Revenues from finance component |
0.00 |
|
---- |
|
---- |
|
Cost of product adjustment |
---- |
|
---- |
|
0.01 |
|
Stock-based compensation |
0.45 |
|
0.48 |
|
0.25 |
|
Amortization and depreciation of acquired assets |
0.05 |
|
0.05 |
|
0.08 |
|
Assets (sale) disposal |
0.00 |
|
0.01 |
|
---- |
|
Other operating (income) expenses |
0.04 |
|
0.03 |
|
(0.10) |
|
Notes due 2025 |
0.01 |
|
0.06 |
|
---- |
|
Non cash interest |
0.03 |
|
0.02 |
|
0.02 |
|
Currency fluctuation related to lease standard |
(0.05) |
|
0.05 |
|
(0.02) |
|
Deferred taxes |
(0.04) |
|
0.05 |
|
(0.07) |
|
Net basic earnings per share (Non-GAAP) |
1.07 |
|
1.09 |
|
1.03 |
|
||||||
Reconciliation of GAAP to Non-GAAP Net diluted EPS |
||||||
Three months ended |
||||||
|
|
|
|
|
||
Net diluted earnings per share (GAAP) |
0.55 |
|
0.33 |
|
0.81 |
|
Revenues from finance component |
0.00 |
|
---- |
|
---- |
|
Cost of product adjustment |
|
---- |
|
---- |
|
0.01 |
Stock-based compensation |
0.40 |
|
0.44 |
|
0.21 |
|
Amortization and depreciation of acquired assets |
0.04 |
|
0.05 |
|
0.07 |
|
Assets (sale) disposal |
|
0.00 |
|
0.01 |
|
---- |
Other operating (income) expenses |
|
0.04 |
|
0.03 |
|
(0.09) |
Notes due 2025 |
0.00 |
|
0.02 |
|
---- |
|
Non cash interest |
0.03 |
|
0.02 |
|
0.02 |
|
Currency fluctuation related to lease standard |
(0.04) |
|
0.04 |
|
(0.02) |
|
Deferred taxes |
(0.04) |
|
0.04 |
|
(0.06) |
|
Net diluted earnings per share (Non-GAAP) |
0.98 |
|
0.98 |
|
0.95 |
|
|
|
|
|
|
||
Reconciliation of GAAP to Non-GAAP
|
||||||
Three months ended |
||||||
|
|
|
|
|
||
Number of shares used in computing net diluted earnings per share (GAAP) |
55,997,136 |
|
53,496,384 |
|
52,172,720 |
|
Stock-based compensation |
766,187 |
|
865,179 |
|
1,399,732 |
|
Notes due 2025 |
---- |
|
2,276,818 |
|
---- |
|
Number of shares used in computing net diluted earnings per share (Non-GAAP) |
56,763,323 |
|
56,638,381 |
|
53,572,452 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20210503005635/en/
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