FREMONT, Calif. — May 6, 2019. SolarEdge Technologies, Inc. (Nasdaq: SEDG), a global leader in smart energy technology, today announced its financial results for the first quarter ended March 31, 2019.
First Quarter 2019 Highlights
- Record revenues of $271.9 million
- Record revenues from solar products of $253.1 million
- GAAP gross margin of 31.7%
- Non-GAAP gross margin from sale of solar products of 34.3%
- GAAP net diluted EPS of $0.39
- Non-GAAP net diluted EPS of $0.64
- 1.1 Gigawatts (AC) of inverters shipped
“We opened 2019 with a strong quarter and record revenues driven by substantial growth, particularly in Europe, which demonstrates our leading position in the global solar inverter market,” said Guy Sella, Founder, Chairman and CEO of SolarEdge. “This quarter we concluded the acquisition of SMRE which provides us with an entry into the e-mobility market and we continued the integration of Kokam and the building of our UPS business. We are very happy to be able to continue to grow our solar business while leveraging profits for further investment in our new areas of technology development, which include UPS products, lithium ion batteries and integrated powertrain electronics for electric vehicles.”
First Quarter 2019 Summary
The Company reported record revenues of $271.9 million, up 3% from $263.7 million in the prior quarter and up 30% from $209.9 million in the same quarter last year.
Revenues related to the solar business were $253.1 million, up 4% from $243.4 million in the prior quarter and up 21% from $209.9 million in the same quarter last year.
GAAP gross margin was 31.7%, up from 30.2% in the prior quarter and down from 37.9% year over year.
Non-GAAP gross margin was 32.8%, up from 30.9% in the prior quarter and down from 38.4% year over year.
GAAP gross margin for the solar business was 33.8%, up from 32.3% in the prior quarter.
Non-GAAP gross margin for the solar business was 34.3%, up from 32.8% in the prior quarter.
GAAP operating expenses were $58.1 million, up 5% from $55.3 million in the prior quarter and up 50% from $38.8 million year over year.
Non-GAAP operating expenses were $48.0 million, up 7% from $45.1 million in the prior quarter and up 46% from $32.9 million year over year.
GAAP operating income was $28.0 million, up 15% from $24.4 million in the prior quarter and down 31% from $40.8 million year over year.
Non-GAAP operating income was $41.2 million, up 13% from $36.4 million in the prior quarter and down 14% from $47.6 million year over year
GAAP net income was $19.0 million, up 47% from $12.9 million in the prior quarter and down 47% from $35.7 million year over year.
Non-GAAP net income was $32.9 million, up 5% from $31.5 million in the prior quarter and down 23% from $42.5 million year over year.
GAAP net diluted earnings per share (“EPS”) was $0.39, up from $0.27 in the prior quarter and down from $0.75 year over year.
Non-GAAP net diluted EPS was $0.64, up from $0.63 in the prior quarter and down from $0.87 year over year.
Cash flow from operating activities was $56.5 million, up from $46.9 million in the prior quarter and down from $64.0 million year over year.
As of March 31, 2019, cash, cash equivalents, restricted cash, bank deposits and marketable securities totaled $398.7 million, compared to $392.2 million on December 31, 2018 following a payment of $43.0 million for the acquisition of S.M.R.E. and additional Kokam shares, net of cash obtained in the acquisition.
Outlook for the Second Quarter 2019
The Company also provides guidance for the second quarter ending June 30, 2019 as follows:
- Revenues to be within the range of $310 million to $320 million
- Gross margin expected to be within the range of 32% to 34%
- Revenues from solar products to be within the range of $290 million to $300 million
- Gross margin from sale of solar products expected to be within the range of 33% to 35%
The Company will host a conference call to discuss these results at 4:30 P.M. ET on Monday, May 6, 2019. The call will be available, live, to interested parties by dialing 888-394-8218. For international callers, please dial +1 323-701-0225. The Conference ID number is 6398323. 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.
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, 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.
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 December 31, 2018, filed on February 28, 2019, Current Reports on Form 8-K and other reports filed with the SEC. All information set forth in this release is as of May 6, 2019. 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.