SolarEdge Announces First Quarter 2022 Financial Results
First Quarter 2022 Highlights
-
Record revenues of
$655.1 million -
Record revenues from solar segment of
$608.0 million - GAAP gross margin of 27.3%
- Non-GAAP gross margin of 28.4%
- Gross margin from solar segment of 30.2%
-
GAAP net income of
$33.1 million -
Non-GAAP net income of
$68.8 million -
GAAP net diluted earnings per share (“EPS”) of
$0.60 -
Non-GAAP net diluted EPS of
$1.20 - 2.13 Gigawatts (AC) of inverters shipped
“We are pleased with our record revenues for the first quarter which represent 62% growth from the first quarter of last year and which are driven by record revenues in
First Quarter 2022 Summary
The Company reported record revenues of
Revenues from the solar segment were record
GAAP gross margin was 27.3%, down from 29.1% in the prior quarter and down from 34.5% in the same quarter last year.
Non-GAAP gross margin was 28.4%, down from 30.3% in the prior quarter and down from 36.5% in the same quarter last year.
Gross margin from the solar segment was 30.2%, down from 32.8% in the prior quarter and down from 39.7% in the same quarter last 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 net diluted EPS was
Non-GAAP net diluted EPS was
Cash flow used in operating activities was
As of
On
Outlook for the Second Quarter 2022
The Company also provides guidance for the second quarter ending
-
Revenues to be within the range of
$710 million to$740 million - Non-GAAP gross margin expected to be within the range of 26% to 29%
-
Revenues from solar segment to be within the range of
$660 million to$690 million - Gross margin from solar segment expected to be within the range of 28% to 31%
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 for the year ended
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (in thousands, except per share data) |
||||||||
|
|
|
Three Months Ended
|
||||||
|
|
|
|
2022 |
|
|
|
2021 |
|
|
Revenues |
|
$ |
655,080 |
|
|
$ |
405,489 |
|
|
Cost of revenues |
|
|
476,122 |
|
|
|
265,415 |
|
|
Gross profit |
|
|
178,958 |
|
|
|
140,074 |
|
|
Operating expenses: |
|
|
|
|
||||
|
Research and development |
|
|
66,349 |
|
|
|
46,977 |
|
|
Sales and marketing |
|
|
35,316 |
|
|
|
26,911 |
|
|
General and administrative |
|
|
26,429 |
|
|
|
19,849 |
|
|
Other operating expenses |
|
|
— |
|
|
|
2,209 |
|
|
Total operating expenses |
|
|
128,094 |
|
|
|
95,946 |
|
|
Operating income |
|
|
50,864 |
|
|
|
44,128 |
|
|
Financial expense, net |
|
|
(5,449 |
) |
|
|
(6,097 |
) |
|
Income before income taxes |
|
|
45,415 |
|
|
|
38,031 |
|
|
Income taxes |
|
|
12,292 |
|
|
|
7,955 |
|
|
Net income |
|
$ |
33,123 |
|
|
$ |
30,076 |
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands, except per share data) |
||||||||
|
2022 |
|
2021 |
||||||
|
ASSETS |
|
|
|
|
||||
|
CURRENT ASSETS: |
|
|
|
|
||||
|
Cash and cash equivalents |
|
$ |
1,002,772 |
|
|
$ |
530,089 |
|
|
Marketable securities |
|
|
158,557 |
|
|
|
167,728 |
|
|
Trade receivables, net of allowances of |
|
|
676,820 |
|
|
|
456,339 |
|
|
Inventories, net |
|
|
432,504 |
|
|
|
380,143 |
|
|
Prepaid expenses and other current assets |
|
|
191,664 |
|
|
|
176,992 |
|
|
Total current assets |
|
|
2,462,317 |
|
|
|
1,711,291 |
|
|
LONG-TERM ASSETS: |
|
|
|
|
||||
|
Marketable securities |
|
|
449,673 |
|
|
|
482,228 |
|
|
Deferred tax assets, net |
|
|
31,205 |
|
|
|
27,572 |
|
|
Property, plant and equipment, net |
|
|
473,511 |
|
|
|
410,379 |
|
|
Operating lease right-of-use assets, net |
|
|
59,783 |
|
|
|
47,137 |
|
|
Intangible assets, net |
|
|
55,734 |
|
|
|
58,861 |
|
|
|
|
|
127,109 |
|
|
|
129,629 |
|
|
Other long-term assets |
|
|
23,583 |
|
|
|
24,963 |
|
|
Total long-term assets |
|
|
1,220,598 |
|
|
|
1,180,769 |
|
|
Total assets |
|
$ |
3,682,915 |
|
|
|
2,892,060 |
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
||||
|
CURRENT LIABILITIES: |
|
|
|
|
||||
|
Trade payables, net |
|
$ |
241,630 |
|
|
$ |
252,068 |
|
|
Employees and payroll accruals |
|
|
84,309 |
|
|
|
74,465 |
|
|
Warranty obligations |
|
|
82,340 |
|
|
|
71,480 |
|
|
Deferred revenues and customers advances |
|
|
25,511 |
|
|
|
17,789 |
|
|
Accrued expenses and other current liabilities |
|
|
134,951 |
|
|
|
109,379 |
|
|
Total current liabilities |
|
|
568,741 |
|
|
|
525,181 |
|
|
LONG-TERM LIABILITIES: |
|
|
|
|
||||
|
Convertible senior notes, net |
|
|
622,263 |
|
|
|
621,535 |
|
|
Warranty obligations |
|
|
210,326 |
|
|
|
193,680 |
|
|
Deferred revenues |
|
|
158,734 |
|
|
|
151,556 |
|
|
Finance lease liabilities |
|
|
53,405 |
|
|
|
40,508 |
|
|
Operating lease liabilities |
|
|
48,480 |
|
|
|
38,912 |
|
|
Other long-term liabilities |
|
|
10,441 |
|
|
|
10,649 |
|
|
Total long-term liabilities |
|
|
1,103,649 |
|
|
|
1,056,840 |
|
|
COMMITMENTS AND CONTINGENT LIABILITIES |
|
|
|
|
||||
|
STOCKHOLDERS’ EQUITY: |
|
|
|
|
||||
|
Common stock of |
|
|
6 |
|
|
|
5 |
|
|
Additional paid-in capital |
|
|
1,373,405 |
|
|
|
687,295 |
|
|
Accumulated other comprehensive loss |
|
|
(46,067 |
) |
|
|
(27,319 |
) |
|
Retained earnings |
|
|
683,181 |
|
|
|
650,058 |
|
|
Total stockholders’ equity |
|
|
2,010,525 |
|
|
|
1,310,039 |
|
|
Total liabilities and stockholders’ equity |
|
$ |
3,682,915 |
|
|
$ |
2,892,060 |
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands, except per share data) |
||||||||
|
|
|
Three Months Ended |
||||||
|
|
|
|
2022 |
|
|
|
2021 |
|
|
Cash flows from operating activities: |
|
|
|
|
||||
|
Net income |
|
$ |
33,123 |
|
|
$ |
30,076 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
||||
|
Depreciation of property, plant and equipment |
|
|
9,002 |
|
|
|
6,887 |
|
|
Amortization of intangible assets |
|
|
2,658 |
|
|
|
2,391 |
|
|
Amortization of debt discount and debt issuance costs |
|
|
728 |
|
|
|
724 |
|
|
Amortization of premium and accretion of discount on available-for-sale marketable securities, net |
|
|
2,550 |
|
|
|
1,295 |
|
|
Stock-based compensation expenses |
|
|
34,107 |
|
|
|
23,153 |
|
|
Deferred income taxes, net |
|
|
(1,034 |
) |
|
|
(2,141 |
) |
|
Loss (gain) from sale and disposal of assets |
|
|
(410 |
) |
|
|
2,147 |
|
|
Exchange rate fluctuations and other items, net |
|
|
3,024 |
|
|
|
13,303 |
|
|
Changes in assets and liabilities: |
|
|
|
|
||||
|
Inventories, net |
|
|
(51,323 |
) |
|
|
(8,376 |
) |
|
Prepaid expenses and other assets |
|
|
(17,163 |
) |
|
|
20,218 |
|
|
Trade receivables, net |
|
|
(224,865 |
) |
|
|
(57,380 |
) |
|
Trade payables, net |
|
|
(28,045 |
) |
|
|
(39,034 |
) |
|
Employees and payroll accruals |
|
|
9,246 |
|
|
|
7,477 |
|
|
Warranty obligations |
|
|
27,629 |
|
|
|
13,088 |
|
|
Deferred revenues and customers advances |
|
|
15,029 |
|
|
|
3,615 |
|
|
Other liabilities, net |
|
|
22,755 |
|
|
|
6,640 |
|
|
Net cash provided by (used in) operating activities |
|
|
(162,989 |
) |
|
|
24,083 |
|
|
Cash flows from investing activities: |
|
|
|
|
||||
|
Proceed from sales and maturities of available-for-sale marketable securities |
|
|
53,096 |
|
|
|
40,450 |
|
|
Purchase of property, plant and equipment |
|
|
(43,210 |
) |
|
|
(24,545 |
) |
|
Investment in available-for-sale marketable securities |
|
|
(26,712 |
) |
|
|
(186,528 |
) |
|
Withdrawal from bank deposits, net |
|
|
— |
|
|
|
16,470 |
|
|
Other investing activities |
|
|
1,692 |
|
|
|
571 |
|
|
Net cash used in investing activities |
|
$ |
(15,134 |
) |
|
$ |
(153,582 |
) |
|
Cash flows from financing activities: |
|
|
|
|
||||
|
Proceeds from secondary public offering, net of issuance costs |
|
|
650,526 |
|
|
|
— |
|
|
Proceeds from exercise of stock-based awards |
|
|
1,478 |
|
|
|
5,008 |
|
|
Proceeds (withholdings) from stock-based awards, net |
|
|
822 |
|
|
|
(6,724 |
) |
|
Other financing activities |
|
|
(491 |
) |
|
|
(346 |
) |
|
Net cash provided by (used in) financing activities |
|
|
652,335 |
|
|
|
(2,062 |
) |
|
Increase (decrease) in cash and cash equivalents |
|
|
474,212 |
|
|
|
(131,561 |
) |
|
Cash and cash equivalents at the beginning of the period |
|
|
530,089 |
|
|
|
827,146 |
|
|
Effect of exchange rate differences on cash and cash equivalents |
|
|
(1,529 |
) |
|
|
(10,428 |
) |
|
Cash and cash equivalents at the end of the period |
|
$ |
1,002,772 |
|
|
$ |
685,157 |
|
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited) (in thousands, except per share data and percentages) |
||||||||
|
|
Reconciliation of GAAP to Non-GAAP |
|||||||
|
|
Three months ended |
|||||||
|
|
2022 |
|
2021 |
|
2021 |
|||
|
Gross profit (GAAP) |
178,958 |
|
|
160,491 |
|
|
140,074 |
|
|
Revenues from finance component |
(135 |
) |
|
(122 |
) |
|
(86 |
) |
|
Stock-based compensation |
5,062 |
|
|
4,373 |
|
|
5,790 |
|
|
Amortization and depreciation of acquired assets |
2,219 |
|
|
2,272 |
|
|
2,312 |
|
|
Gross profit (Non-GAAP) |
186,104 |
|
|
167,014 |
|
|
148,090 |
|
|
|
|
|
|
|
|
|||
|
Gross margin (GAAP) |
27.3 |
% |
|
29.1 |
% |
|
34.5 |
% |
|
Revenues from finance component |
0.0 |
% |
|
0.0 |
% |
|
0.0 |
% |
|
Stock-based compensation |
0.8 |
% |
|
0.8 |
% |
|
1.4 |
% |
|
Amortization and depreciation of acquired assets |
0.3 |
% |
|
0.4 |
% |
|
0.6 |
% |
|
Gross margin (Non-GAAP) |
28.4 |
% |
|
30.3 |
% |
|
36.5 |
% |
|
|
|
|
|
|
|
|||
|
Operating expenses (GAAP) |
128,094 |
|
|
119,453 |
|
|
95,946 |
|
|
Stock-based compensation - R&D |
(14,985 |
) |
|
(14,872 |
) |
|
(8,798 |
) |
|
Stock-based compensation - S&M |
(6,701 |
) |
|
(5,882 |
) |
|
(5,435 |
) |
|
Stock-based compensation - G&A |
(7,359 |
) |
|
(4,076 |
) |
|
(3,130 |
) |
|
Amortization and depreciation of acquired assets - R&D |
(303 |
) |
|
(302 |
) |
|
(12 |
) |
|
Amortization and depreciation of acquired assets - S&M |
(236 |
) |
|
(225 |
) |
|
(237 |
) |
|
Amortization and depreciation of acquired assets - G&A |
(6 |
) |
|
(6 |
) |
|
(8 |
) |
|
Gain (loss) from assets sales and disposal |
410 |
|
|
18 |
|
|
62 |
|
|
Other operating income (expenses) |
— |
|
|
— |
|
|
(2,209 |
) |
|
Operating expenses (Non-GAAP) |
98,914 |
|
|
94,108 |
|
|
76,179 |
|
|
|
|
|
|
|
|
|||
|
Operating income (GAAP) |
50,864 |
|
|
41,038 |
|
|
44,128 |
|
|
Revenues from finance component |
(135 |
) |
|
(122 |
) |
|
(86 |
) |
|
Stock-based compensation |
34,107 |
|
|
29,203 |
|
|
23,153 |
|
|
Amortization and depreciation of acquired assets |
2,764 |
|
|
2,805 |
|
|
2,569 |
|
|
Loss (gain) from assets sales and disposal |
(410 |
) |
|
(18 |
) |
|
(62 |
) |
|
Other operating (income) expenses |
— |
|
|
— |
|
|
2,209 |
|
|
Operating income (Non-GAAP) |
87,190 |
|
|
72,906 |
|
|
71,911 |
|
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited) (in thousands, except per share data and percentages) |
||||||||
|
|
Reconciliation of GAAP to non-GAAP |
|||||||
|
|
Three months ended |
|||||||
|
|
2022 |
|
2021 |
|
2021 |
|||
|
Financial income (expense), net (GAAP) |
(5,449 |
) |
|
(6,324 |
) |
|
(6,097 |
) |
|
Notes due 2025 |
728 |
|
|
727 |
|
|
724 |
|
|
Non cash interest |
1,609 |
|
|
1,527 |
|
|
1,336 |
|
|
Unrealized gains/losses |
— |
|
|
(541 |
) |
|
— |
|
|
Currency fluctuation related to lease standard |
(1,792 |
) |
|
2,422 |
|
|
(2,289 |
) |
|
Financial income (expense), net (non-GAAP) |
(4,904 |
) |
|
(2,189 |
) |
|
(6,326 |
) |
|
|
|
|
|
|
|
|||
|
Income tax benefit (expense) (GAAP) |
(12,292 |
) |
|
6,240 |
|
|
(7,955 |
) |
|
Uncertain tax positions |
— |
|
|
(9,007 |
) |
|
— |
|
|
Deferred taxes |
(1,201 |
) |
|
(5,181 |
) |
|
(2,141 |
) |
|
Income tax benefit (expense) (Non-GAAP) |
(13,493 |
) |
|
(7,948 |
) |
|
(10,096 |
) |
|
|
|
|
|
|
|
|||
|
Net income (GAAP) |
33,123 |
|
|
40,954 |
|
|
30,076 |
|
|
Revenues from finance component |
(135 |
) |
|
(122 |
) |
|
(86 |
) |
|
Stock-based compensation |
34,107 |
|
|
29,203 |
|
|
23,153 |
|
|
Amortization and depreciation of acquired assets |
2,764 |
|
|
2,805 |
|
|
2,569 |
|
|
Loss (gain) from assets sales and disposal |
(410 |
) |
|
(18 |
) |
|
(62 |
) |
|
Other operating (income) expenses |
— |
|
|
— |
|
|
2,209 |
|
|
Notes due 2025 |
728 |
|
|
727 |
|
|
724 |
|
|
Non cash interest |
1,609 |
|
|
1,527 |
|
|
1,336 |
|
|
Unrealized gains (losses) |
— |
|
|
(541 |
) |
|
— |
|
|
Currency fluctuation related to lease standard |
(1,792 |
) |
|
2,422 |
|
|
(2,289 |
) |
|
Uncertain tax positions |
— |
|
|
(9,007 |
) |
|
— |
|
|
Deferred taxes |
(1,201 |
) |
|
(5,181 |
) |
|
(2,141 |
) |
|
Net income (Non-GAAP) |
68,793 |
|
|
62,769 |
|
|
55,489 |
|
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited) (in thousands, except per share data and percentages) |
||||||||
|
|
Reconciliation of GAAP to non-GAAP |
|||||||
|
|
Three months ended |
|||||||
|
|
2022 |
|
2021 |
|
2021 |
|||
|
Net basic earnings per share (GAAP) |
0.62 |
|
|
0.78 |
|
|
0.58 |
|
|
Revenues from finance component |
0.00 |
|
|
0.00 |
|
|
0.00 |
|
|
Stock-based compensation |
0.64 |
|
|
0.55 |
|
|
0.45 |
|
|
Amortization and depreciation of acquired assets |
0.05 |
|
|
0.05 |
|
|
0.05 |
|
|
Loss (gain) from assets sales and disposal |
(0.00 |
) |
|
(0.00 |
) |
|
(0.00 |
) |
|
Other operating (income) expenses |
— |
|
|
— |
|
|
0.04 |
|
|
Notes due 2025 |
0.01 |
|
|
0.02 |
|
|
0.01 |
|
|
Non cash interest |
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
Unrealized gains (losses) |
— |
|
|
(0.01 |
) |
|
— |
|
|
Currency fluctuation related to lease standard |
(0.03 |
) |
|
0.04 |
|
|
(0.05 |
) |
|
Uncertain tax positions |
— |
|
|
(0.17 |
) |
|
— |
|
|
Deferred taxes |
(0.03 |
) |
|
(0.10 |
) |
|
(0.04 |
) |
|
Net basic earnings per share (Non-GAAP) |
1.29 |
|
|
1.19 |
|
|
1.07 |
|
|
|
|
|
|
|
|
|||
|
Net diluted earnings per share (GAAP) |
0.60 |
|
|
0.74 |
|
|
0.55 |
|
|
Revenues from finance component |
0.00 |
|
|
0.00 |
|
|
0.00 |
|
|
Stock-based compensation |
0.58 |
|
|
0.50 |
|
|
0.40 |
|
|
Amortization and depreciation of acquired assets |
0.05 |
|
|
0.05 |
|
|
0.04 |
|
|
Loss (gain) from assets sales and disposal |
(0.01 |
) |
|
(0.00 |
) |
|
(0.00 |
) |
|
Other operating (income) expenses |
— |
|
|
— |
|
|
0.04 |
|
|
Notes due 2025 |
0.01 |
|
|
0.00 |
|
|
0.00 |
|
|
Non cash interest |
0.02 |
|
|
0.03 |
|
|
0.03 |
|
|
Unrealized gains (losses) |
— |
|
|
(0.01 |
) |
|
— |
|
|
Currency fluctuation related to lease standard |
(0.03 |
) |
|
0.04 |
|
|
(0.04 |
) |
|
Uncertain tax positions |
— |
|
|
(0.16 |
) |
|
— |
|
|
Deferred taxes |
(0.02 |
) |
|
(0.09 |
) |
|
(0.04 |
) |
|
Net diluted earnings per share (Non-GAAP) |
1.20 |
|
|
1.10 |
|
|
0.98 |
|
|
|
|
|
|
|
|
|||
|
Number of shares used in computing net diluted earnings per share (GAAP) |
56,315,193 |
|
|
56,011,040 |
|
|
55,997,136 |
|
|
Stock-based compensation |
927,219 |
|
|
894,079 |
|
|
766,187 |
|
|
Number of shares used in computing net diluted earnings per share (Non-GAAP) |
57,242,412 |
|
|
56,905,119 |
56,763,323 |
|
||
View source version on businesswire.com: https://www.businesswire.com/news/home/20220502005610/en/
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