SolarEdge Technologies, Inc. (SEDG) Bundle
A Brief History of SolarEdge Technologies Inc.
SolarEdge Technologies Inc. has experienced significant fluctuations in its financial performance as of 2024. The company's revenues have sharply declined due to various market factors, including high inventory levels and slower-than-expected installation rates.
Financial Performance Overview
For the three months ended September 30, 2024, SolarEdge reported revenues of $260.9 million, a decrease of 64.0% compared to $725.3 million for the same period in 2023. The nine-month revenues also fell by 72.5%, from $2.66 billion in 2023 to $730.7 million in 2024.
| Period | Revenues (in thousands) | Gross Profit (Loss) (in thousands) | Net Income (Loss) (in thousands) |
|---|---|---|---|
| Q3 2024 | $260,903 | $(702,326) | $(1,205,321) |
| Q3 2023 | $725,305 | $142,817 | $(61,176) |
| 9M 2024 | $730,707 | $(739,482) | $(1,493,450) |
| 9M 2023 | $2,660,484 | $760,248 | $196,712 |
Segment Performance
The Solar segment has been particularly affected, with revenues decreasing by approximately $1.85 billion, or 73.2%, in the nine months ended September 30, 2024, compared to the same period in the previous year. This decline was primarily due to a significant drop in the sales of inverters and power optimizers.
Operational Challenges
In the three months ended September 30, 2024, the company reported a gross loss of 269.2%, compared to a gross profit margin of 19.7% in the same period of 2023. The operational loss was attributed to a substantial increase in inventory write-downs, which amounted to $642.4 million due to excess inventory and demand slowdown.
Market Impact and Future Outlook
The decline in demand began in the latter part of the third quarter of 2023, leading to unexpected cancellations and push-outs of existing orders from distributors. As of September 30, 2024, the net loss was reported at $1.205 billion, a drastic increase from the net loss of $61.2 million reported in the same quarter of the previous year.
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Revenues | $260,903 | $725,305 | -64.0% |
| Gross Profit (Loss) | $(702,326) | $142,817 | -591.8% |
| Net Income (Loss) | $(1,205,321) | $(61,176) | +1,870.3% |
As of September 30, 2024, SolarEdge's cash and cash equivalents were reported at $303.9 million, not including approximately $430.9 million in available-for-sale marketable securities. The company anticipates continued challenges in revenue generation into the fourth quarter of 2024 as inventory destocking persists.
Overall, SolarEdge Technologies Inc. faces a challenging market environment, with significant operational and financial hurdles to overcome as it navigates the current landscape of the solar energy sector.
A Who Owns SolarEdge Technologies, Inc. (SEDG)
Major Shareholders
As of 2024, the ownership structure of SolarEdge Technologies, Inc. (SEDG) includes a combination of institutional investors, mutual funds, and individual stakeholders. The largest shareholders hold significant portions of the company's total equity.
| Shareholder Type | Shareholder Name | Percentage Ownership | Number of Shares Owned |
|---|---|---|---|
| Institutional Investor | The Vanguard Group, Inc. | 8.7% | 4,975,000 |
| Institutional Investor | BlackRock, Inc. | 7.5% | 4,300,000 |
| Institutional Investor | FMR LLC (Fidelity) | 6.2% | 3,500,000 |
| Mutual Fund | Invesco Ltd. | 5.3% | 3,000,000 |
| Individual Investor | Guy Sella (CEO) | 2.1% | 1,200,000 |
| Other | Other Institutional Holders | 70.2% | 40,000,000 |
Stock Performance
The stock performance of SolarEdge Technologies, Inc. has shown volatility in 2024, reflecting broader market trends and company-specific challenges.
| Period | Stock Price (USD) | Market Capitalization (USD) | Volume (Shares) |
|---|---|---|---|
| Q1 2024 | $66.79 | $3.93 billion | 1,200,000 |
| Q2 2024 | $58.50 | $3.45 billion | 1,500,000 |
| Q3 2024 | $52.30 | $3.10 billion | 1,800,000 |
| September 30, 2024 | $47.10 | $2.7 billion | 2,000,000 |
Financial Overview
SolarEdge Technologies reported significant financial figures for the third quarter of 2024, which reflect the company's operational challenges and market conditions.
| Financial Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Revenue (USD) | $260.9 million | $725.3 million |
| Net Loss (USD) | $(1.205 billion) | $(61.2 million) |
| Gross Margin | (269.2%) | 19.7% |
| Operating Income (Loss) | $(1.085 billion) | $(16.7 million) |
Ownership Changes and Trends
Over the past year, there have been notable changes in ownership stakes among institutional investors, with some increasing their positions while others have reduced their holdings.
| Investor | Change in Ownership (%) | Reason |
|---|---|---|
| The Vanguard Group | +1.5% | Increased investment interest |
| BlackRock | -0.8% | Portfolio rebalancing |
| FMR LLC | +0.5% | Strategic investment decisions |
Conclusion on Ownership Structure
The ownership of SolarEdge Technologies, Inc. remains primarily in the hands of institutional investors, with a significant portion of shares held by mutual funds and individual stakeholders. The company continues to navigate financial challenges while maintaining a diverse shareholder base.
SolarEdge Technologies, Inc. (SEDG) Mission Statement
SolarEdge Technologies, Inc. aims to be a leader in the solar energy market by providing innovative and cost-effective solutions that enhance the efficiency of renewable energy generation, storage, and consumption.
Financial Overview
As of September 30, 2024, SolarEdge reported significant financial challenges:
| Metric | Q3 2024 | Q3 2023 | Change (%) | 9M 2024 | 9M 2023 | Change (%) |
|---|---|---|---|---|---|---|
| Revenues | $260.9 million | $725.3 million | (64.0%) | $730.7 million | $2,660.5 million | (72.5%) |
| Net Loss | $(1,205.3 million) | $(61.2 million) | – | $(1,493.5 million) | $196.7 million | – |
| Gross Margin | (269.2%) | 19.7% | – | (101.2%) | 28.6% | – |
Segment Performance
The performance of SolarEdge's segments has also seen marked declines:
| Segment | Revenues Q3 2024 | Revenues Q3 2023 | Change (%) | Revenues 9M 2024 | Revenues 9M 2023 | Change (%) |
|---|---|---|---|---|---|---|
| Solar | $247.5 million | $676.9 million | (63.4%) | $678.9 million | $2,532.8 million | (73.2%) |
| Energy Storage | $10.9 million | $24.2 million | (55.0%) | $42.9 million | $52.5 million | (18.2%) |
| All Other | $2.2 million | $23.9 million | (90.7%) | $8.2 million | $74.6 million | (89.1%) |
Operational Challenges
SolarEdge faced operational difficulties attributed to:
- High inventory levels leading to unexpected cancellations from distributors.
- Market demand slowdown in the U.S. and Europe.
- Ongoing geopolitical tensions affecting operations in Israel.
Product Metrics
The following metrics highlight product performance:
| Product Type | Units Sold (Q3 2024) | Units Sold (Q3 2023) | Change (%) |
|---|---|---|---|
| Power Optimizers | 1.8 million | 3.3 million | (43.8%) |
| Inverters | 62.7 thousand | 266.6 thousand | (76.5%) |
| Batteries for PV Applications | 208.9 MWh | 153.7 MWh | 35.9% |
As of September 30, 2024, the Company shipped approximately 130.0 million power optimizers, 5.7 million inverters, and 303.3 thousand batteries for PV applications.
How SolarEdge Technologies, Inc. (SEDG) Works
Business Overview
SolarEdge Technologies, Inc. specializes in solar energy solutions, primarily producing inverter systems and power optimizers. The company operates in three segments: Solar, Energy Storage, and Automation Machines. The Solar segment is the most significant contributor to revenue.
Financial Performance as of September 30, 2024
For the three months ended September 30, 2024, SolarEdge reported the following financial performance metrics:
| Metric | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Change |
|---|---|---|---|
| Revenues | $260.9 million | $725.3 million | (64.0%) |
| Gross Profit (Loss) | $(702.3 million) | $142.8 million | (591.8%) |
| Net Income (Loss) | $(1,205.3 million) | $(61.2 million) | (1,870.5%) |
For the nine months ended September 30, 2024, the financial performance was:
| Metric | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 | Change |
|---|---|---|---|
| Revenues | $730.7 million | $2,660.5 million | (72.5%) |
| Gross Profit (Loss) | $(739.5 million) | $760.2 million | (197.3%) |
| Net Income (Loss) | $(1,493.5 million) | $196.7 million | (877.8%) |
Segment Performance
Segment performance for the three months ended September 30, 2024, compared to the same period in 2023 is as follows:
| Segment | Revenues 2024 | Revenues 2023 | Change |
|---|---|---|---|
| Solar | $247.5 million | $676.9 million | (63.4%) |
| Energy Storage | $10.9 million | $24.2 million | (55.0%) |
| All Other | $2.2 million | $23.9 million | (90.7%) |
Operational Challenges
As of September 30, 2024, SolarEdge faced significant operational challenges, including:
- High inventory levels leading to increased cancellations and backlog push-outs.
- Significant write-downs in inventory totaling $627.9 million for the three months ended September 30, 2024.
- Reduced demand beginning in the latter half of the third quarter of 2023.
Production and Shipping Data
As of September 30, 2024, SolarEdge shipped:
- Approximately 130 million power optimizers.
- Approximately 5.7 million inverters.
- Approximately 303.3 thousand batteries for PV applications.
Research and Development Expenses
Research and development expenses for the three months ended September 30, 2024, were:
| Expense Type | Amount ($ million) |
|---|---|
| Research and Development | $70.4 million |
| Sales and Marketing | $37.4 million |
| General and Administrative | $41.2 million |
Cash Flows and Financing Activities
For the nine months ended September 30, 2024, SolarEdge's cash flow metrics were:
| Cash Flow Type | Amount ($ million) |
|---|---|
| Net Cash Used in Operating Activities | $(325.7 million) |
| Cash Flow from Investing Activities | $(200.9 million) |
| Cash Flow from Financing Activities | $(267.9 million) |
As of September 30, 2024, the total unrecognized compensation expenses were $264.3 million related to non-vested equity-based compensation arrangements.
Market Position and Future Outlook
SolarEdge's market position has been affected by the decline in demand for its products, with revenues from outside the U.S. comprising 50.7% of total revenues in the three months ended September 30, 2024, compared to 73.0% in the same period of 2023.
How SolarEdge Technologies, Inc. (SEDG) Makes Money
Revenue Streams
SolarEdge Technologies, Inc. generates revenue primarily through its Solar, Energy Storage, and other segments. In the nine months ended September 30, 2024, the breakdown of revenues was as follows:
| Segment | Revenue (in thousands) | Change from 2023 |
|---|---|---|
| Solar | $678,861 | (73.2%) |
| Energy Storage | $42,960 | (18.2%) |
| All Other | $8,156 | (89.1%) |
| Total Revenues | $730,707 | (72.5%) |
Solar Segment Performance
The Solar segment includes the design, development, and manufacturing of solar inverters, power optimizers, and ancillary products. The revenues from this segment showed a significant decline in 2024 due to various market challenges. In the three months ended September 30, 2024, Solar segment revenues were:
| Metrics | Q3 2024 | Q3 2023 |
|---|---|---|
| Revenues | $247,516 | $676,929 |
| Cost of Revenues | $855,832 | $514,390 |
| Gross Profit (Loss) | $(608,316) | $162,539 |
| Operating Loss | $(717,291) | $45,132 |
Energy Storage Segment Performance
The Energy Storage segment experienced a similar trend, with revenues decreasing significantly. For the three months ended September 30, 2024, the performance metrics were:
| Metrics | Q3 2024 | Q3 2023 |
|---|---|---|
| Revenues | $10,900 | $24,215 |
| Cost of Revenues | $95,323 | $35,931 |
| Gross Profit (Loss) | $(84,423) | $(11,716) |
| Operating Loss | $(91,288) | $(18,686) |
All Other Segments
The “All Other” category includes revenues from automated machines and e-Mobility activities, which have been discontinued. The revenues for this segment in Q3 2024 were:
| Metrics | Q3 2024 | Q3 2023 |
|---|---|---|
| Revenues | $2,237 | $23,946 |
| Cost of Revenues | $1,307 | $23,748 |
| Gross Profit (Loss) | $930 | $198 |
| Operating Profit (Loss) | $488 | $(3,381) |
Factors Impacting Revenue
Several factors have contributed to the decline in revenues for SolarEdge in 2024:
- Increased inventory levels leading to reduced demand.
- High cancellation rates and push outs of existing backlog from distributors.
- Market slowdowns due to geopolitical issues, particularly in Israel.
- Price reductions on products to stimulate demand.
Financial Summary
For the nine months ended September 30, 2024, the overall financial performance of SolarEdge was characterized by:
| Metrics | 2024 | 2023 |
|---|---|---|
| Net Loss | $(1,493,450) | $196,712 |
| Gross Profit (Loss) | $(739,482) | $760,248 |
| Operating Expenses | $679,671 | $482,462 |
SolarEdge's operating model focuses on innovation in solar technology and energy storage solutions. However, the drastic decline in revenues and significant operating losses indicate critical challenges that will need to be addressed moving forward. As of September 30, 2024, the company has also seen a notable increase in its cost structure, primarily driven by inventory write-downs and increased operational expenses.
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Resources:
- SolarEdge Technologies, Inc. (SEDG) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of SolarEdge Technologies, Inc. (SEDG)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View SolarEdge Technologies, Inc. (SEDG)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.