February 14, 2017

SolarEdge Announces Quarter Ended December 31, 2016 Financial Results

FREMONT, Calif.--(BUSINESS WIRE)--Feb. 14, 2017-- SolarEdge Technologies, Inc. (Nasdaq: SEDG), a global leader in PV inverters, power optimizers, and module-level monitoring services, today announced its financial results for the quarter ended December 31, 2016.

Quarter Ended December 31, 2016 Highlights

Revenues for the quarter of $111.5 million
GAAP gross margin for the quarter of 35.0%
GAAP operating income for the quarter of $15.1 million
GAAP net income for the quarter of $9.8 million
Non-GAAP net income for the quarter of $14.7 million
GAAP net diluted earnings per share for the quarter of $0.22
Non-GAAP net diluted earnings per share for the quarter of $0.32
413 Megawatts (AC) of inverters shipped for the quarter

“We focused this quarter on the ramp up of manufacturing new products, including the HD Wave inverter which is now available worldwide. We continued our cost reduction measures yielding solid operating income and record gross margin despite lower revenues than in previous quarters,” said Guy Sella, Founder, Chairman and CEO of SolarEdge. “We remain confident in our ability to grow revenues and profitability in 2017.”

Quarter Ended December 31, 2016 Summary

The Company reported revenues of $111.5 million, 13% down from the prior quarter and 11% year over year.

GAAP gross margin reached 35.0%, up from 32.6% in the prior quarter and from 30.9% year over year.

GAAP operating expenses were $23.9 million, an increase of 1% from the prior quarter and of 24% year over year.

GAAP operating income was $15.1 million, down from $18.2 million in the prior quarter and from $19.3 million year over year.

GAAP net income was $9.8 million, down from $15.6 million in the prior quarter and from $24.1 million year over year.

Non-GAAP net income was $14.7 million, down from $20.9 million in the prior quarter and down from $19.8 million year over year.

GAAP net diluted earnings per shares (“EPS”) was $0.22, down from $0.35 in the prior quarter and down from $0.55 year over year.

Non-GAAP net diluted EPS was $0.32, down from $0.46 in the prior quarter and down from $0.44 year over year.

As of December 31, 2016, cash, cash equivalents, restricted cash and marketable securities totaled $224.3 million, compared to $206.7 million on September 30, 2016.

Outlook for the Quarter Ending March 31, 2017

The Company also provides guidance for the quarter ending March 31, 2017 as follows:

Revenues to be within the range of $110 million to $120 million;
Gross margins to be within the range of 31% to 33%.

Conference Call

The Company will host a conference call to discuss these results at 5:00 P.M. EST on Tuesday, February 14, 2017. The call will be available, live, to interested parties by dialing 877-874-1570. For international callers, please dial +1 719-325-4762. The Conference ID number is 9063628. 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.

About SolarEdge

SolarEdge provides an intelligent inverter solution that has changed the way power is harvested and managed in solar photovoltaic systems. The SolarEdge DC optimized inverter system maximizes power generation at the individual PV module-level while lowering the cost of energy produced by the solar PV system. The SolarEdge system consists of power optimizers, inverters, storage solutions and a cloud-based monitoring platform and addresses a broad range of solar market segments, from residential solar installations to commercial and small utility-scale solar installations. SolarEdge is online at http://www.solaredge.com

Use of Non-GAAP Financial Measures

The Company has presented certain non-GAAP financial measures in this release. 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.

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 Registration Statement on Form S-1 (including the related prospectus), Annual Report on Form 10-K for the fiscal year ended June 30, 2016, filed on August 17, 2016, Current Reports on Form 8-K and other reports filed with the SEC. All information set forth in this release is as of February 14, 2017. The Company undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events or changes in its expectations.


SOLAREDGE TECHNOLOGIES INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data)

	Six months Ended December 31,			Year ended June 30,
	2016			2016			2015			2014

Revenues	$	239,997		$	489,843		$	325,078		$	133,217
Cost of revenues		159,097			337,887			243,295			111,246

Gross profit		80,900			151,956			81,783			21,971

Operating expenses:

Research and development, net		20,279			33,231			22,018			18,256
Sales and marketing		20,444			34,833			24,973			17,792
General and administrative		6,790			12,133			6,535			4,294

Total operating expenses		47,513			80,197			53,526			40,342

Operating income (loss)		33,387			71,759			28,257			(18,371	)

Other expenses		-			-			104			-

Financial income (expenses), net		(2,789	)		471			(5,077	)		(2,787	)

Income (loss) before taxes on income		30,598			72,230			23,076			(21,158	)

Taxes on income (tax benefit)		5,217			(4,379	)		1,955			220

Net income (loss)	$	25,381		$	76,609		$	21,121		$	(21,378	)


SOLAREDGE TECHNOLOGIES INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands

	December 31,			June 30,				June 30,
	2016			2016				2015

CURRENT ASSETS:
Cash and cash equivalents	$	104,683			$	74,032		$	144,750
Restricted cash		897				928			3,639
Marketable Securities		74,465				59,163			-
Trade receivables, net		71,041				72,737			35,428
Prepaid expenses and other accounts receivable		21,347				21,340			32,645
Inventories		67,363				81,550			73,950

Total current assets		339,796				309,750			290,412

LONG-TERM ASSETS:
Marketable securities		44,262				52,446			-
Property, equipment and intangible assets, net		37,381				28,547			14,717
Prepaid expenses and lease deposits		489				399			529
Deferred tax assets, net		2,815				6,296			-

Total long term assets		84,947				87,688			15,246

Total assets	$	424,743			$	397,438		$	305,658

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Trade payables	$	34,001			$	48,481		$	80,684
Employees and payroll accruals		13,018				10,092			6,814
Warranty obligations		13,616				14,114			9,431
Deferred revenues		1,202				3,859			1,676
Accrued expenses and other accounts payable		8,648				10,725			6,987

Total current liabilities		70,485				87,271			105,592

LONG-TERM LIABILITIES:
Warranty obligations		44,759				37,078			22,448
Deferred revenues		18,660				14,684			8,289
Lease incentive obligation		2,061				2,297			2,385

Total long-term liabilities		65,480				54,059			33,122

COMMITMENTS AND CONTINGENT LIABILITIES
STOCKHOLDERS’ EQUITY:
Common stock		4				4			4
Additional paid-in capital		307,098				299,214			287,152
Accumulated other comprehensive income (loss)		(324	)			271			(222	)
Accumulated deficit		(18,000	)			(43,381	)		(119,990	)

Total stockholders’ equity		288,778				256,108			166,944

Total liabilities and stockholders’ equity	$	424,743			$	397,438		$	305,658


SOLAREDGE TECHNOLOGIES INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)

	Six months ended December 31,			Year ended June 30,
	2016			2016			2015			2014
Cash flows provided by (used in) operating activities:
Net income (loss)	$	25,381		$	76,609		$	21,121		$	(21,378	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization of intangible assets		2,759			3,847			2,253			1,978
Amortization of premiums on available-for-sale marketable securities		681			532			-			-
Stock-based compensation		6,600			9,089			2,956			1,082
Financial expenses (income), net related to term loan		-			-			(992	)		431
Remeasurement of warrants to purchase convertible preferred stock		-			-			5,350			(53	)
Capital loss from disposal of property		-			-			104			-
Interest expenses related to short term bank loan		-			-			-			44
Changes in assets and liabilities:
Inventories		14,022			(7,356	)		(48,507	)		(10,681	)
Prepaid expenses and other accounts receivable		(367	)		10,542			(19,563	)		(7,409	)
Trade receivables, net		1,555			(37,271	)		(16,333	)		(9,911	)
Deferred tax assets, net		3,652			(6,380	)		-			-
Trade payables		(14,464	)		(32,200	)		41,111			19,441
Employees and payroll accruals		2,996			3,278			1,668			1,726
Warranty obligations		7,183			19,313			13,698			7,803
Deferred revenues		1,335			8,578			3,989			(500	)
Accrued expenses and other accounts payable		(1,999	)		3,934			2,530			(418	)
Lease incentive obligation		(236	)		(88	)		2,669			-
Net cash provided by (used in) operating activities		49,098			52,427			12,054			(17,845	)

Cash flows from investing activities:
Purchase of property and equipment		(11,025	)		(15,690	)		(11,765	)		(2,990	)
Purchase of intangible assets		(600	)		(800	)		-			-
Decrease (increase) in restricted cash		31			2,711			(2,038	)		(156	)
Decrease (increase) in long-term lease deposit		(77	)		103			(134	)		(1	)
Investment in available-for-sale marketable securities		(40,858	)		(118,511	)		-			-
Maturities of available-for-sale marketable securities		32,782			6,350			-			-
Net cash used in investing activities		(19,747	)		(125,837	)		(13,937	)		(3,147	)

Cash flows from financing activities:
Proceeds from short term bank loan		-			-			23,000			21,813
Repayment of short term bank loan		-			-			(36,326	)		(12,447	)
Repayments of term loan		-			-			(5,919	)		(2,401	)
Proceeds from issuance of Series D-2 Convertible Preferred stock, net		-			-			-			669
Proceeds from issuance of Series D-3 Convertible Preferred stock, net		-			-			-			9,991
Proceeds from issuance of Series E Convertible Preferred stock, net		-			-			24,712			-
Proceeds from initial public offering, net		-			-			131,402			-
Issuance costs related to initial public offering		-			(194	)		-			-
Proceeds from issuance of shares under stock purchase plan and upon exercise of stock-based awards		1,284			2,973			84			51
Net cash provided by financing activities		1,284			2,779			136,953			17,676

Increase (decrease) in cash and cash equivalents		30,635			(70,631	)		135,070			(3,316	)
Cash and cash equivalents at the beginning of the period		74,032			144,750			9,754			13,142
Effect of exchange rate differences on cash and cash equivalents		16			(87	)		(74	)		(72	)
Cash and cash equivalents at the end of the period	$	104,683		$	74,032		$	144,750		$	9,754


SOLAREDGE TECHNOLOGIES INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (In thousands, except per share data) (Audited)

	Reconciliation of GAAP to Non-GAAP Gross Profit
	Three months ended							6 months ended
	December 31, 2016		September 30, 2016			December 31, 2015		December 31, 2016		December 31, 2015

Gross profit (GAAP)	39,025		41,875			38,582		80,900		72,109
Stock-based compensation	486		385			209		871		389
Gross profit (Non-GAAP)	39,511		42,260			38,791		81,771		72,498

	Reconciliation of GAAP to Non-GAAP Gross Margin
	Three months ended							6 months ended
	December 31, 2016		September 30, 2016			December 31, 2015		December 31, 2016		December 31, 2015
Gross margin (GAAP)	35.0	%	32.6		%	30.9	%	33.7	%	30.1	%
Stock-based compensation	0.4	%	0.3		%	0.2	%	0.4	%	0.1	%
Gross margin (Non-GAAP)	35.4	%	32.9		%	31.1	%	34.1	%	30.2	%

	Reconciliation of GAAP to Non-GAAP Operating expenses
	Three months ended							6 months ended
	December 31, 2016		September 30, 2016			December 31, 2015		December 31, 2016		December 31, 2015
Operating expenses (GAAP)	23,878		23,635			19,320		47,513		37,973
Stock-based compensation R&D	1,134		927			518		2,061		913
Stock-based compensation S&M	1,003		849			749		1,852		1,365
Stock-based compensation G&A	877		939			750		1,816		1,391
Operating expenses (Non-GAAP)	20,864		20,920			17,303		41,784		34,304

	Reconciliation of GAAP to Non-GAAP Operating income
	Three months ended							6 months ended
	December 31, 2016		September 30, 2016			December 31, 2015		December 31, 2016		December 31, 2015
Operating income (GAAP)	15,147		18,240			19,262		33,387		34,136
Stock-based compensation	3,500		3,100			2,226		6,600		4,058
Operating income (Non-GAAP)	18,647		21,340			21,488		39,987		38,194

	Reconciliation of GAAP to Non-GAAP Tax on income (Tax benefit)
	Three months ended							6 months ended
	December 31, 2016		September 30, 2016			December 31, 2015		December 31, 2016		December 31, 2015
Tax on income (Tax benefit) (GAAP)	2,203		3,014			(5,802	)	5,217		(5,432	)
Deferred tax asset (realized)	(1,473	)	(2,179		)	6,527		(3,652	)	6,527
Tax on income (Tax benefit) (Non-GAAP)	730		835			725		1,565		1,095

	Reconciliation of GAAP to Non-GAAP Net income
	Three months ended							6 months ended
	December 31, 2016			September 30, 2016		December 31, 2015		December 31, 2016		December 31, 2015
Net income (GAAP)	9,765			15,616		24,105		25,381		38,537
Stock-based compensation	3,500			3,100		2,226		6,600		4,058
Deferred tax realized (asset)	1,473			2,179		(6,527	)	3,652		(6,527	)
Net income (Non-GAAP)	14,738			20,895		19,804		35,633		36,068

	Reconciliation of GAAP to Non-GAAP Net basic EPS
	Three months ended							6 months ended
	December 31, 2016			September 30, 2016		December 31, 2015		December 31, 2016		December 31, 2015
Net basic earnings per share (GAAP)	0.24			0.38		0.61		0.62		0.98
Stock-based compensation	0.08			0.08		0.06		0.16		0.10
Deferred tax realized (asset)	0.04			0.05		(0.17	)	0.09		(0.16	)
Net basic earnings per share (Non-GAAP)	0.36			0.51		0.50		0.87		0.92

	Reconciliation of GAAP to Non-GAAP Net diluted EPS
	Three months ended							6 months ended
	December 31, 2016			September 30, 2016		December 31, 2015		December 31, 2016		December 31, 2015
Net diluted earnings per share (GAAP)	0.22			0.35		0.55		0.58		0.87
Stock-based compensation	0.07			0.06		0.03		0.12		0.07
Deferred tax realized (asset)	0.03			0.05		(0.14	)	0.08		(0.14	)
Net diluted earnings per share (Non-GAAP)	0.32			0.46		0.44		0.78		0.80

	Reconciliation of GAAP to Non-GAAP No. of shares used in Net diluted EPS
	Three months ended							6 months ended
	December 31, 2016			September 30, 2016		December 31, 2015		December 31, 2016		December 31, 2015
Number of shares used in computing net diluted earnings per share (GAAP)	43,683,458			43,995,227		44,007,348		43,839,342		44,231,660
Stock-based compensation	2,399,308			1,742,211		1,341,335		2,070,759		1,013,903
Number of shares used in computing net diluted earnings per share (Non-GAAP)	46,082,766			45,737,438		45,348,683		45,910,101		45,245,563

View source version on businesswire.com: http://www.businesswire.com/news/home/20170214006266/en/

Source: SolarEdge Technologies, Inc.

Investor Contacts
SolarEdge Technologies, Inc.
Ronen Faier, +1 510-498-3263
Chief Financial Officer
investors@solaredge.com
or
Sapphire Investor Relations, LLC
Erica Mannion or Michael Funari, +1 617-542-6180
investors@solaredge.com

PDF Version

What are you looking for?

What are you looking for?

SolarEdge Announces Quarter Ended December 31, 2016 Financial Results

Stay Informed

How can we help you?