SolarEdge Technologies, Inc. (Nasdaq: SEDG), a global leader in
smart energy, today announced its financial results for the fourth
quarter and year ended December 31, 2019.
Fourth Quarter 2019 Highlights
- Record revenues of $418.2 million
- Record revenues from solar products of $389.0 million
- GAAP gross margin of 34.3%
- GAAP gross margin from sale of solar products of 37.3%
- Non-GAAP gross margin from sale of solar products of 37.8%
- Record GAAP net income of $52.8 million
- Record Non-GAAP net income of $87.4 million
- Record GAAP net diluted earnings per share (“EPS”) of
$1.03
- Record Non-GAAP net diluted EPS of $1.65
- 1.6 Gigawatts (AC) of inverters shipped
Full Year 2019 Highlights
- Revenues of $1.43 billion
- Revenues from solar products of $1.34 billion
- GAAP gross margin of 33.6%
- GAAP gross margin from sale of solar products of 35.8%
- Non-GAAP gross margin from sale of solar products of 36.2%
- GAAP net income of $146.5 million
- Non-GAAP net income of $233.2 million
- GAAP net diluted earnings per share (“EPS”) of $2.90
- Non-GAAP net diluted EPS of $4.44
- 5.6 Gigawatts (AC) of inverters shipped
“We are pleased to conclude another very successful year with
revenues growth of over 50% in 2019 most of which was generated by
our solar business. We also announce a non-GAAP net profit growth
of over 48%,” said Zvi Lando, CEO of SolarEdge. “This year, we
continued to expand our solar business and also made significant
investments in our acquired businesses that open new opportunities
for us to expand our product offerings into adjacent segments and
leverage our highly talented technological teams to become leaders
in those markets.”
Fourth Quarter 2019 Summary
The Company reported record revenues of $418.2 million, up 2%
from $410.6 million in the prior quarter and up 59% from $263.7
million in the same quarter last year.
Revenues related to the solar business were $389.0 million,
modestly up from $387.8 million in the prior quarter and up 60%
from $243.4 million in the same quarter last year.
GAAP gross margin was 34.3%, up from 33.9% in the prior quarter
and up from 30.2% year over year.
Non-GAAP gross margin was 35.5%, up from 35.1% in the prior
quarter and up from 30.9% year over year.
GAAP gross margin for the solar business was 37.3%, up from
35.0% in the prior quarter and up from 32.3% year over year.
Non-GAAP gross margin for the solar business was 37.8%, up from
35.4% in the prior quarter and up from 32.8% year over year.
GAAP operating expenses were $92.7 million, up 27% from $73.3
million in the prior quarter and up 66% from $55.8 million in the
same quarter last year. Operating expenses this quarter include
$22.4 million related to the SMRE acquisition and settlement of a
pre-acquisition claim against Kokam.
Non-GAAP operating expenses were $63.1 million, up 15% from
$54.8 million in the prior quarter and up 40% from $45.1 million in
the same quarter last year.
GAAP operating income was $50.5 million, down 23% from $66.0
million in the prior quarter and up 111% from $24.0 million in the
same quarter last year.
Non-GAAP operating income was $85.3 million, down 4% from $89.2
million in the prior quarter and up 135% from $36.4 million in the
same quarter last year.
GAAP net income was $52.8 million, up 27% from $41.6 million in
the prior quarter and up 308% from $12.9 million in the same
quarter last year.
Non-GAAP net income was $87.4 million, up 37% from $63.6 million
in the prior quarter and up 178% from $31.5 million in the same
quarter last year.
GAAP net diluted earnings per share (“EPS”) was $1.03, up from
$0.81 in the prior quarter and up from $0.27 in the same quarter
last year.
Non-GAAP net diluted EPS was $1.65, up from $1.21 in the prior
quarter and up from $0.63 in the same quarter last year.
Cash flow from operating activities was $83.1 million, up from
$68.7 million in the prior quarter and up from $46.9 million in the
same quarter last year.
As of December 31, 2019, cash, cash equivalents, bank deposits,
restricted bank deposit and marketable securities totaled $467.5
million, compared to $432.9 million on September 30, 2019.
Full Year 2019 Summary
Total revenues of $1.43 billion, up 52% from $937 million in the
prior year.
GAAP gross margin was 33.6%, down from 34.1% in the prior
year.
Non-GAAP gross margin was 34.9%, up from 34.6% in the prior
year.
GAAP operating income was $189.9 million, up 36% from $139.4
million in the prior year.
Non-GAAP operating income was $276.8 million, up 59% from $174.3
million in the prior year.
GAAP net income was $146.5 million, up 14% from $128.8 million
in the prior year.
Non-GAAP net income was $233.2 million, up 48% from $157.3
million in the prior year.
GAAP net diluted EPS was $2.90, up from $2.69 in the prior
year.
Non-GAAP net diluted EPS was $4.44, up from $3.17 in the prior
year.
Cash flow from operating activities of $259 million, up from
$189.1 million in the prior year.
Outlook for the First Quarter 2020
The Company also provides guidance for the first quarter ending
March 31, 2020 as follows:
- Revenues to be within the range of $425 million to $440
million
- Gross margin expected to be within the range of 32% to 34%
- Revenues from solar products to be within the range of $405
million to $415 million
- Gross margin from sale of solar products expected to be within
the range of 33% to 35%
Conference Call
The Company will host a conference call to discuss these results
at 4:30 P.M. ET on Wednesday, February 19, 2020. The call will be
available, live, to interested parties by dialing 800-367-2403. For
international callers, please dial +1 334-777-6978. The Conference
ID number is 7869140. 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 is a global leader in smart energy. 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 PV systems. Continuing to advance smart
energy, SolarEdge addresses a broad range of energy market segments
through its PV, storage, EV charging, batteries, UPS, electric
vehicle powertrains, 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 February 19,
2020. 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)
Three months ended December
31,
Year ended December
31,
2019
2018
2019
2018
Unaudited
Revenues
$ 418,223
$ 263,670
$ 1,425,660
$ 937,237
Cost of revenues
274,974
183,959
946,322
618,001
Gross profit
143,249
79,711
479,338
319,236
Operating expenses:
Research and development, net
34,900
24,710
121,351
82,245
Sales and marketing
23,659
19,210
87,984
68,307
General and administrative
11,771
11,837
49,361
29,264
Other operating expenses
22,391
----
30,696
----
Total
operating expenses
92,721
55,757
289,392
179,816
Operating income
50,528
23,954
189,946
139,420
Financial expenses (income), net
(11,058)
(288)
11,343
2,297
Income before income taxes
61,586
24,242
178,603
137,123
Income taxes
9,241
12,093
33,646
9,077
Net income
$ 52,345
$ 12,149
$ 144,957
$ 128,046
Net loss attributable to Non-controlling
interests
433
787
1,592
787
Net income attributable to SolarEdge
Technologies, Inc.
$ 52,778
$ 12,936
$ 146,549
$ 128,833
SOLAREDGE TECHNOLOGIES INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands)
December 31,
2019
2018
CURRENT ASSETS:
Cash and cash equivalents
$ 223,901
$ 187,764
Short-term bank deposits
5,010
9,870
Restricted bank deposits
27,558
824
Marketable securities
91,845
118,680
Trade receivables, net
298,383
173,579
Prepaid expenses and other current
assets
115,268
45,073
Inventories, net
170,798
141,519
Total current
assets
932,763
677,309
LONG-TERM ASSETS:
Marketable securities
119,176
74,256
Operating lease right-of-use assets,
net
35,858
----
Property, plant and equipment, net
176,963
119,329
Deferred tax assets, net
16,298
14,699
Intangible assets, net
74,008
38,504
Goodwill
129,654
34,874
Other long term assets
9,904
5,501
Total long
term assets
561,861
287,163
Total
assets
$ 1,494,624
$ 964,472
CURRENT LIABILITIES:
Trade payables, net
$ 157,148
$ 107,079
Employees and payroll accruals
47,390
29,053
Current maturities of bank loans and
accrued interest
15,673
16,639
Warranty obligations
65,112
28,868
Deferred revenues
70,815
14,351
Accrued expenses and other current
liabilities
80,576
29,728
Total current
liabilities
436,714
225,718
LONG-TERM LIABILITIES:
Bank loans
173
3,510
Warranty obligations
107,451
92,958
Deferred revenues
89,982
60,670
Operating lease liabilities
30,213
----
Deferred tax liabilities, net
4,461
1,499
Other long term liabilities
13,960
9,391
Total
long-term liabilities
246,240
168,028
STOCKHOLDERS’ EQUITY:
Common stock
5
5
Additional paid-in capital
475,792
371,794
Accumulated other comprehensive loss
(1,809)
(524)
Retained earnings
337,682
191,133
Total
SolarEdge Technologies, Inc. stockholders’ equity
811,670
562,408
Non-controlling interests
-
8,318
Total
stockholders’ equity
811,670
570,726
Total
liabilities and stockholders’ equity
$ 1,494,624
$ 964,472
SOLAREDGE TECHNOLOGIES INC.
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
(In thousands)
Year ended December
31,
2019
2018
Cash flows provided
by operating activities:
Net income
$ 144,957
$ 128,046
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation of property, plant and
equipment
17,261
11,426
Amortization of intangible assets
9,634
1,193
Amortization of premium and accretion of
discount on available-for-sale marketable securities, net
92
1,242
Stock-based compensation expenses
60,353
30,618
Deferred income tax benefit, net
(6,037)
(7,093)
Loss from sale of business
5,269
----
Other expenses, net
713
561
Changes in assets and liabilities:
Inventories, net
(22,544)
(20,178)
Prepaid expenses and other assets
(67,323)
(2,711)
Trade receivables, net
(124,071)
(60,514)
Operating lease right-of-use assets and
liabilities, net and effect of exchange rate differences
2,192
----
Trade payables, net
47,837
31,482
Employees and payroll accruals
18,592
4,583
Warranty obligations
50,780
41,878
Deferred revenues
83,137
37,041
Other liabilities
38,158
(8,485)
Net cash provided by operating
activities
259,000
189,079
Cash flows from
investing activities:
Business combinations, net of cash
acquired
(38,435)
(94,737)
Purchase of property, plant and
equipment
(72,562)
(38,608)
Withdrawal from (investment in) bank
deposits
4,860
(9,870)
Investment in restricted bank deposits
(26,145)
(112)
Investment in available-for-sale
marketable securities
(160,054)
(142,627)
Proceed from sales and maturities of
available-for-sale marketable securities
142,744
129,345
Other investing activities
(3,261)
----
Net cash used in investing activities
$ (152,853)
$ (156,609)
Cash flows from
financing activities:
Repayment of bank loans, net
$ (9,265)
$ (3,786)
Proceeds from issuance of shares under
stock purchase plan and upon exercise of stock-based awards
9,066
10,021
Change in non-controlling interests
(71,468)
(14,190)
Other financing activities
(1,354)
----
Net cash used in financing activities
$ (73,021)
$ (7,955)
Increase in cash and cash equivalents
33,126
24,515
Cash and cash equivalents at the beginning
of the period
187,764
163,163
Effect of exchange rate differences on
cash and cash equivalents
3,011
86
Cash and cash equivalents at the end of
the period
$ 223,901
$ 187,764
SOLAREDGE TECHNOLOGIES INC.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
(In thousands, except gross
profit and per share data)
(Unaudited)
Reconciliation of GAAP to Non-GAAP Gross Profit
Three months ended Year ended December 31,
2019 September 30, 2019 December 31, 2018
December 31, 2019 December 31, 2018 Gross
profit (GAAP)
143,249
139,309
79,711
479,338
319,236
Stock-based compensation
2,268
1,691
1,323
6,964
4,342
Cost of product adjustment
448
107
398
1,556
606
Amortization and depreciation of acquired assets
2,489
2,898
----
9,771
193
Gross profit (Non-GAAP)
148,454
144,005
81,432
497,629
324,377
Reconciliation of GAAP to Non-GAAP Gross Margin
Three months ended Year ended December 31,
2019 September 30, 2019 December 31, 2018
December 31, 2019 December 31, 2018 Gross margin
(GAAP)
34.3%
33.9%
30.2%
33.6%
34.1%
Stock-based compensation
0.5%
0.4%
0.5%
0.5%
0.4%
Cost of product adjustment
0.1%
----
0.2%
0.1%
0.1%
Amortization and depreciation of acquired assets
0.6%
0.8%
----
0.7%
----
Gross margin (Non-GAAP)
35.5%
35.1%
30.9%
34.9%
34.6%
Reconciliation of GAAP to Non-GAAP Operating expenses
Three months ended Year ended December 31,
2019 September 30, 2019 December 31, 2018
December 31, 2019 December 31, 2018 Operating
expenses (GAAP)
92,721
73,292
55,757
289,392
179,816
Stock-based compensation - R&D
(4,937)
(4,269)
(3,230)
(16,872)
(11,205)
Stock-based compensation - S&M
(3,157)
(2,779)
(2,564)
(11,062)
(9,112)
Stock-based compensation - G&A
916
(2,628)
(1,574)
(6,991)
(5,959)
Amortization and depreciation of acquired assets - R&D
(30)
(17)
(652)
(92)
(762)
Amortization and depreciation of acquired assets - S&M
33
(440)
(101)
(1,214)
(130)
Amortization and depreciation of acquired assets - G&A
45
(54)
----
(35)
----
Acquisition related expenses
----
----
(2,140)
(949)
(2,140)
Assets disposal
(56)
(14)
(435)
(622)
(435)
Non recurring operating expenses
(22,391)
(8,305)
----
(30,696)
----
Operating expenses (Non-GAAP)
63,144
54,786
45,061
220,859
150,073
Reconciliation of GAAP to Non-GAAP Operating income
Three months ended Year ended December 31,
2019 September 30, 2019 December 31, 2018
December 31, 2019 December 31, 2018 Operating
income (GAAP)
50,528
66,017
23,954
189,946
139,420
Cost of product adjustment
448
107
398
1,556
606
Stock-based compensation
9,446
11,367
8,691
41,889
30,618
Amortization and depreciation of acquired assets
2,441
3,409
753
11,112
1,085
Acquisition related expenses
----
----
2,140
949
2,140
Assets disposal
56
14
435
622
435
Non recurring operating expenses
22,391
8,305
----
30,696
----
Operating income (Non-GAAP)
85,310
89,219
36,371
276,770
174,304
Reconciliation of GAAP to Non-GAAP Financial expenses
(income), net Three months ended Year ended
December 31, 2019 September 30, 2019 December 31,
2018 December 31, 2019 December 31, 2018
Financial expenses (income), net (GAAP)
(11,058)
17,023
(288)
11,343
2,297
Non cash interest
(1,055)
(955)
(769)
(3,645)
(2,489)
Currency fluctuation due to new lease standard adoption
(266)
(800)
----
(2,591)
----
Intangible assets amortization
348
----
528
348
528
Financial expenses (income), net (Non-GAAP)
(12,031)
15,268
(529)
5,455
336
Reconciliation of GAAP to Non-GAAP Tax on income (tax
benefit) Three months ended Year ended
December 31, 2019 September 30, 2019 December 31,
2018 December 31, 2019 December 31, 2018 Tax
on income (GAAP)
9,241
7,270
12,093
33,646
9,077
Deferred tax realized (asset)
1,114
2,963
2,304
6,037
7,093
Transition tax of foreign earnings
----
----
(8,189)
----
1,296
Tax on income (Non-GAAP)
10,355
10,233
6,208
39,683
17,466
Reconciliation of GAAP to Non-GAAP Net income
attributable to SolarEdge Technologies Inc. Three months
ended Year ended December 31, 2019 September
30, 2019 December 31, 2018 December 31, 2019
December 31, 2018 Net income attributable to SolarEdge
Technologies Inc. (GAAP)
52,778
41,627
12,936
146,549
128,833
Cost of product adjustment
448
107
398
1,556
606
Stock-based compensation
9,446
11,367
8,691
41,889
30,618
Amortization and depreciation of acquired assets
2,093
3,409
225
10,764
557
Acquisition related expenses
----
----
2,140
949
2,140
Assets disposal
56
14
435
622
435
Non recurring operating expenses
22,391
8,305
----
30,696
----
Non cash interest
1,055
955
769
3,645
2,489
Currency fluctuation due to new lease standard adoption
266
800
----
2,591
----
Deferred tax realized (asset)
(1,114)
(2,963)
(2,304)
(6,037)
(7,093)
Transition tax of foreign earnings
----
----
8,189
----
(1,296)
Net income attributable to Solaredge Technologies Inc.
(Non-GAAP)
87,419
63,621
31,479
233,224.00
157,289
Reconciliation of GAAP to Non-GAAP Net basic earnings per
share Three months ended Year ended December
31, 2019 September 30, 2019 December 31, 2018
December 31, 2019 December 31, 2018 Net basic
earnings per share (GAAP)
1.08
0.86
0.28
3.06
2.85
Cost of product adjustment
0.01
0.01
0.01
0.03
0.01
Stock-based compensation
0.20
0.23
0.19
0.87
0.68
Amortization and depreciation of acquired assets
0.04
0.07
0.01
0.23
0.01
Acquisition related expenses
----
----
0.04
0.02
0.05
Assets disposal
----
----
0.01
0.01
0.01
Non recurring operating expenses
0.46
0.17
----
0.64
----
Non cash interest
0.02
0.02
0.02
0.08
0.05
Currency fluctuation due to new lease standard adoption
----
0.02
----
0.06
----
Deferred tax realized (asset)
(0.02)
(0.06)
(0.05)
(0.13)
(0.15)
Transition tax of foreign earnings
----
----
0.18
----
(0.03)
Net basic earnings per share (Non-GAAP)
1.79
1.32
0.69
4.87
3.48
Reconciliation of GAAP to Non-GAAP Net diluted earnings
per share Three months ended Year ended
December 31, 2019 September 30, 2019 December 31,
2018 December 31, 2019 December 31, 2018 Net
diluted earnings per share (GAAP)
1.03
0.81
0.27
2.90
2.69
Cost of product adjustment
0.01
----
0.01
0.02
0.01
Nonvested PSUs
(0.01)
----
----
----
----
Stock-based compensation
0.15
0.19
0.16
0.68
0.53
Amortization and depreciation of
acquired assets
0.04
0.07
0.01
0.22
0.01
Acquisition related expenses
----
----
0.04
0.02
0.04
Assets disposal
----
----
0.01
0.01
0.01
Non recurring operating
expenses
0.43
0.16
----
0.59
----
Non cash interest
0.02
0.02
0.01
0.07
0.05
Currency fluctuation due to new
lease standard adoption
----
0.02
----
0.05
----
Deferred tax realized (asset)
(0.02)
(0.06)
(0.04)
(0.12)
(0.14)
Transition tax of foreign
earnings
----
----
0.16
----
(0.03)
Net diluted earnings per share (Non-GAAP)
1.65
1.21
0.63
4.44
3.17
Reconciliation of GAAP to Non-GAAP No. of shares used in
Net diluted earnings per share Three months ended
Year ended December 31, 2019 September 30,
2019 December 31, 2018 December 31, 2019
December 31, 2018 Number of shares used in computing net
diluted earnings per share (GAAP)
50,966,778
51,081,594
47,637,478
50,195,661
47,980,002
Stock-based compensation
1,774,490
1,375,391
2,204,179
2,011,807
1,636,127
Number of shares used in computing net diluted earnings per
share (Non-GAAP)
52,741,268
52,456,985
49,841,657
52,207,468
49,616,129
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200219005913/en/
Investor Contacts SolarEdge Technologies, Inc. Ronen
Faier, Chief Financial Officer +1 510-498-3263
investors@solaredge.com
Sapphire Investor Relations, LLC Erica Mannion or Michael Funari
+1 617-542-6180 investors@solaredge.com
SolarEdge Technologies (NASDAQ:SEDG)
Historical Stock Chart
From Mar 2024 to Apr 2024
SolarEdge Technologies (NASDAQ:SEDG)
Historical Stock Chart
From Apr 2023 to Apr 2024