FREMONT, Calif. — November 1, 2018. SolarEdge Technologies, Inc. (Nasdaq: SEDG), a global leader in smart energy technology, today announced its financial results for the third quarter ended September 30, 2018.
Third Quarter 2018 Highlights
- Record revenues of $236.6 million, up 42% year-over-year
- GAAP net income of $45.6 million
- GAAP net diluted EPS of $0.95
- Non-GAAP net diluted EPS of $0.86
- 1,083 Megawatts (AC) of inverters shipped
“This quarter we continued to grow our revenues and market share,” said Guy Sella, Founder, Chairman and CEO of SolarEdge. “We shipped 1.1GW of systems and delivered over three million power optimizers, with record high shipments of commercial products.”
“While continuing to expand our existing business, we closed the asset acquisition of a new UPS division, Gamatronic. In the first weeks of October, we also signed and closed the Kokam acquisition which will expand our smart energy offerings, adding proven battery storage options to our product portfolio. These acquisitions will take us a further step toward offering full solutions that are more comprehensive, smarter and beneficial.”
Third Quarter 2018 Summary
The Company reported record revenues of $236.6 million, up 4% from $227.1 million in the prior quarter and up 42% from $166.6 million year over year.
GAAP gross margin was 33.0%, down from 36.1%, in the prior quarter and down from 34.9% year over year.
GAAP operating expenses were $43.9 million, up 6% from $41.3 million in the prior quarter and up 35% from $32.7 million year over year.
GAAP operating income was $34.0 million, down 16% from $40.7 million in the prior quarter and up 34% from $25.4 million year over year.
GAAP net income was $45.6 million, up 32% from $34.6 million in the prior quarter and up 63% from $28.0 million year over year.
Non-GAAP net income was $42.7 million, up 5% from $40.6 million in the prior quarter and up 35% from $31.5 million year over year.
GAAP net diluted earnings per share (“EPS”) was $0.95, up from $0.72 in the prior quarter and up from $0.61 year over year.
Non-GAAP net diluted EPS was $0.86, up from $0.82 in the prior quarter and up from $0.66 year over year.
Cash flow from operating activities was $ 34.3 million, down from $43.9 million in the prior quarter and up from $33.7 million year over year.
As of September 30, 2018, cash, cash equivalents, restricted cash, bank deposit and marketable securities totaled $453.2 million, compared to $437.6 million on June 30, 2018.
Outlook for the Fourth Quarter 2018
The Company also provides guidance for the fourth quarter ending December 31, 2018 as follows:
- Revenues to be within the range of $245 million to $255 million;
- GAAP gross margins expected to be within the range of 30% to 32%, depending on the effects of recent M&A; and
- Non GAAP gross margins expected to be within the range of 32% to 34%.
The Company will host a conference call to discuss these results at 4:30 P.M. ET on Thursday, November 1, 2018. The call will be available, live, to interested parties by dialing 800-682-0995. For international callers, please dial +1 334-323-0505. The Conference ID number is 2786736. 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, 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 and non-GAAP net diluted EPS. 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, 2017, filed on February 20, 2018, Current Reports on Form 8-K and other reports filed with the SEC. All information set forth in this release is as of August 2, 2018. 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.