☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
SOLAREDGE TECHNOLOGIES, INC. |
Delaware | 20-5338862 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) | |
1 HaMada Street | ||
Herziliya Pituach, 4673335, Israel | ||
(Address of Principal Executive Offices, zip code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common stock, par value $0.0001 per share | SEDG | NASDAQ (Global Select Market) |
Large accelerated filer | ☒ | Accelerated filer | ☐ |
Non-accelerated filer | ☐ | Smaller Reporting Company | ☐ |
Emerging growth company | ☐ |
As of NovemberMay 1, 2022,2023, there were 55,894,87556,344,727 shares of the registrant’s common stock, par value of $0.0001 per share, outstanding.
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PART I. FINANCIAL INFORMATION
SOLAREDGE TECHNOLOGIES INC.
September 30, 2022 | December 31, 2021 | March 31, 2023 | December 31, 2022 | |||||||||||||
ASSETS | ||||||||||||||||
CURRENT ASSETS: | ||||||||||||||||
Cash and cash equivalents | $ | 678,329 | $ | 530,089 | $ | 727,849 | $ | 783,112 | ||||||||
Marketable securities | 202,598 | 167,728 | 410,820 | 241,117 | ||||||||||||
Trade receivables, net of allowances of $4,283 and $2,626, respectively | 785,325 | 456,339 | ||||||||||||||
Trade receivables, net of allowances of $4,422 and $3,202, respectively | 969,543 | 905,146 | ||||||||||||||
Inventories, net | 561,352 | 380,143 | 874,212 | 729,201 | ||||||||||||
Prepaid expenses and other current assets | 224,169 | 176,992 | 259,642 | 241,082 | ||||||||||||
Total current assets | 2,451,773 | 1,711,291 | 3,242,066 | 2,899,658 | ||||||||||||
LONG-TERM ASSETS: | ||||||||||||||||
Marketable securities | 688,753 | 482,228 | 509,127 | 645,491 | ||||||||||||
Deferred tax assets, net | 38,268 | 27,572 | 46,612 | 44,153 | ||||||||||||
Property, plant and equipment, net | 491,433 | 410,379 | 556,138 | 543,969 | ||||||||||||
Operating lease right-of-use assets, net | 62,535 | 47,137 | 69,710 | 62,754 | ||||||||||||
Intangible assets, net | 46,286 | 58,861 | 17,933 | 19,929 | ||||||||||||
Goodwill | 108,860 | 129,629 | 29,934 | 31,189 | ||||||||||||
Other long-term assets | 15,638 | 33,856 | 24,906 | 18,806 | ||||||||||||
Total long-term assets | 1,451,773 | 1,189,662 | 1,254,360 | 1,366,291 | ||||||||||||
Total assets | $ | 3,903,546 | $ | 2,900,953 | $ | 4,496,426 | $ | 4,265,949 |
F - 21
September 30, 2022 | December 31, 2021 | March 31, 2023 | December 31, 2022 | |||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||
CURRENT LIABILITIES: | ||||||||||||||||
Trade payables, net | $ | 311,565 | $ | 252,068 | $ | 408,523 | $ | 459,831 | ||||||||
Employees and payroll accruals | 71,905 | 74,465 | 90,853 | 85,158 | ||||||||||||
Warranty obligations | 97,222 | 71,480 | 129,278 | 103,975 | ||||||||||||
Deferred revenues and customers advances | 31,896 | 17,789 | 27,507 | 26,641 | ||||||||||||
Accrued expenses and other current liabilities | 181,892 | 109,379 | 243,881 | 214,112 | ||||||||||||
Total current liabilities | 694,480 | 525,181 | 900,042 | 889,717 | ||||||||||||
LONG-TERM LIABILITIES: | ||||||||||||||||
Convertible senior notes, net | 623,721 | 621,535 | 625,182 | 624,451 | ||||||||||||
Warranty obligations | 248,917 | 193,680 | 313,693 | 281,082 | ||||||||||||
Deferred revenues | 176,824 | 151,556 | 196,917 | 186,936 | ||||||||||||
Finance lease liabilities | 45,509 | 40,508 | 43,711 | 45,385 | ||||||||||||
Operating lease liabilities | 46,398 | 38,912 | 50,855 | 46,256 | ||||||||||||
Other long-term liabilities | 15,570 | 19,542 | 15,232 | 15,756 | ||||||||||||
Total long-term liabilities | 1,156,939 | 1,065,733 | 1,245,590 | 1,199,866 | ||||||||||||
COMMITMENTS AND CONTINGENT LIABILITIES | ||||||||||||||||
STOCKHOLDERS’ EQUITY: | ||||||||||||||||
Common stock of $0.0001 par value - Authorized: 125,000,000 shares as of September 30, 2022 and December 31, 2021; issued and outstanding: 55,894,106 and 52,815,395 shares as of September 30, 2022 and December 31, 2021, respectively | 6 | 5 | ||||||||||||||
Common stock of $0.0001 par value - Authorized: 125,000,000 shares as of March 31, 2023 and December 31, 2022; issued and outstanding: 56,343,164 and 56,133,404 shares as of March 31, 2023 and December 31, 2022, respectively | 6 | 6 | ||||||||||||||
Additional paid-in capital | 1,457,379 | 687,295 | 1,545,777 | 1,505,632 | ||||||||||||
Accumulated other comprehensive loss | (128,266 | ) | (27,319 | ) | (77,204 | ) | (73,109 | ) | ||||||||
Retained earnings | 723,008 | 650,058 | 882,215 | 743,837 | ||||||||||||
Total stockholders’ equity | 2,052,127 | 1,310,039 | 2,350,794 | 2,176,366 | ||||||||||||
Total liabilities and stockholders’ equity | $ | 3,903,546 | $ | 2,900,953 | $ | 4,496,426 | $ | 4,265,949 |
F - 32
Three Months Ended September 30, | Nine Months Ended September 30, | Three Months Ended March 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2023 | 2022 | |||||||||||||||||||
Revenues | $ | 836,723 | $ | 526,404 | $ | 2,219,577 | $ | 1,411,950 | $ | 943,889 | $ | 655,080 | ||||||||||||
Cost of revenues | 614,722 | 353,843 | 1,635,976 | 943,123 | 643,763 | 476,122 | ||||||||||||||||||
Gross profit | 222,001 | 172,561 | 583,601 | 468,827 | 300,126 | 178,958 | ||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Research and development | 69,659 | 55,666 | 210,855 | 155,307 | 79,873 | 66,349 | ||||||||||||||||||
Sales and marketing | 42,726 | 29,383 | 117,017 | 85,752 | 40,966 | 35,316 | ||||||||||||||||||
General and administrative | 27,933 | 21,098 | 82,483 | 60,317 | 36,567 | 26,429 | ||||||||||||||||||
Other operating expenses (income), net | (2,724 | ) | - | 1,963 | 1,350 | |||||||||||||||||||
Other operating income, net | (1,434 | ) | - | |||||||||||||||||||||
Total operating expenses | 137,594 | 106,147 | 412,318 | 302,726 | 155,972 | 128,094 | ||||||||||||||||||
Operating income | 84,407 | 66,414 | 171,283 | 166,101 | 144,154 | 50,864 | ||||||||||||||||||
Financial expense, net | (33,025 | ) | (5,751 | ) | (52,785 | ) | (13,591 | ) | ||||||||||||||||
Other income | 7,533 | - | 7,533 | - | ||||||||||||||||||||
Financial income (expense), net | 23,674 | (4,605 | ) | |||||||||||||||||||||
Other loss | (125 | ) | (844 | ) | ||||||||||||||||||||
Income before income taxes | 58,915 | 60,663 | 126,031 | 152,510 | 167,703 | 45,415 | ||||||||||||||||||
Income taxes | 34,172 | 7,615 | 53,081 | 24,294 | 29,325 | 12,292 | ||||||||||||||||||
Net income | $ | 24,743 | $ | 53,048 | $ | 72,950 | $ | 128,216 | $ | 138,378 | $ | 33,123 | ||||||||||||
Net basic earnings per share of common stock | $ | 0.44 | $ | 1.01 | $ | 1.33 | $ | 2.46 | $ | 2.46 | $ | 0.62 | ||||||||||||
Net diluted earnings per share of common stock | $ | 0.43 | $ | 0.96 | $ | 1.29 | $ | 2.32 | $ | 2.35 | $ | 0.60 | ||||||||||||
Weighted average number of shares used in computing net basic earnings per share of common stock | 55,730,328 | 52,355,867 | 54,788,734 | 52,056,233 | 56,215,490 | 53,134,937 | ||||||||||||||||||
Weighted average number of shares used in computing net diluted earnings per share of common stock | 58,747,538 | 55,929,000 | 57,886,041 | 55,955,441 | 59,193,831 | 56,315,193 |
The accompanying notes are an integral part of the condensed consolidated financial statements.
F - 43
Three Months Ended September 30, | Nine Months Ended September 30, | Three Months Ended March 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2023 | 2022 | |||||||||||||||||||
Net income | $ | 24,743 | $ | 53,048 | $ | 72,950 | $ | 128,216 | $ | 138,378 | $ | 33,123 | ||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||||||
Net change related to available-for-sale securities | (9,579 | ) | 29 | (23,647 | ) | (1,847 | ) | |||||||||||||||||
Net change related to cash flow hedges | (140 | ) | 308 | (4,656 | ) | 619 | ||||||||||||||||||
Available-for-sale marketable securities | 6,177 | (9,506 | ) | |||||||||||||||||||||
Cash flow hedges | (331 | ) | (680 | ) | ||||||||||||||||||||
Foreign currency translation adjustments on intra-entity transactions that are of a long-term investment nature | (30,799 | ) | (12,272 | ) | (66,129 | ) | (14,168 | ) | (10,800 | ) | (6,983 | ) | ||||||||||||
Foreign currency translation adjustments, net | 1,872 | (3,664 | ) | (6,515 | ) | (7,596 | ) | |||||||||||||||||
Foreign currency translation adjustments | 859 | (1,579 | ) | |||||||||||||||||||||
Total other comprehensive loss | (38,646 | ) | (15,599 | ) | (100,947 | ) | (22,992 | ) | (4,095 | ) | (18,748 | ) | ||||||||||||
Comprehensive income (loss) | $ | (13,903 | ) | $ | 37,449 | $ | (27,997 | ) | $ | 105,224 | ||||||||||||||
Comprehensive income | $ | 134,283 | $ | 14,375 |
The accompanying notes are an integral part of the condensed consolidated financial statements.
F - 54
Common stock | Additional | Accumulated other | Common stock | Additional paid in Capital | Accumulated other comprehensive loss | Retained earnings | Total | |||||||||||||||||||||||||||||||||||||||||
Number | Amount | paid in Capital | comprehensive loss | Retained earnings | Total | Number | Amount | |||||||||||||||||||||||||||||||||||||||||
Balance as of January 1, 2022 | 52,815,395 | $ | 5 | $ | 687,295 | $ | (27,319 | ) | $ | 650,058 | $ | 1,310,039 | ||||||||||||||||||||||||||||||||||||
Balance as of January 1, 2023 | 56,133,404 | $ | 6 | $ | 1,505,632 | $ | (73,109 | ) | $ | 743,837 | $ | 2,176,366 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock-based awards | 270,751 | * - | 1,478 | - | - | 1,478 | 209,760 | *- | 75 | - | - | 75 | ||||||||||||||||||||||||||||||||||||
Stock based compensation | - | - | 34,107 | - | - | 34,107 | ||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock in a secondary public offering, net of underwriters' discounts and commissions of $27,140 and $834 of offering costs | 2,300,000 | 1 | 650,525 | - | - | 650,526 | ||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss adjustments | - | - | - | (18,748 | ) | - | (18,748 | ) | ||||||||||||||||||||||||||||||||||||||||
Net income | - | - | - | - | 33,123 | 33,123 | ||||||||||||||||||||||||||||||||||||||||||
Balance as of March 31, 2022 | 55,386,146 | $ | 6 | $ | 1,373,405 | $ | (46,067 | ) | $ | 683,181 | $ | 2,010,525 | ||||||||||||||||||||||||||||||||||||
Issuance of Common Stock upon exercise of stock-based awards | 211,839 | * - | 164 | - | - | 164 | ||||||||||||||||||||||||||||||||||||||||||
Issuance of Common stock under employee stock purchase plan | 35,105 | * - | 8,141 | - | - | 8,141 | ||||||||||||||||||||||||||||||||||||||||||
Stock based compensation | - | - | 37,171 | - | - | 37,171 | - | - | 40,070 | - | - | 40,070 | ||||||||||||||||||||||||||||||||||||
Other comprehensive loss adjustments | - | - | - | (43,553 | ) | - | (43,553 | ) | - | - | - | (4,095 | ) | - | (4,095 | ) | ||||||||||||||||||||||||||||||||
Net income | - | - | - | - | 15,084 | 15,084 | - | - | - | - | 138,378 | 138,378 | ||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2022 | 55,633,090 | $ | 6 | $ | 1,418,881 | $ | (89,620 | ) | $ | 698,265 | $ | 2,027,532 | ||||||||||||||||||||||||||||||||||||
Issuance of Common Stock upon exercise of stock-based awards | 261,016 | *- | 1,866 | - | - | 1,866 | ||||||||||||||||||||||||||||||||||||||||||
Stock based compensation | - | - | 36,632 | - | - | 36,632 | ||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss adjustments | - | - | - | (38,646 | ) | - | (38,646 | ) | ||||||||||||||||||||||||||||||||||||||||
Net income | - | - | - | - | 24,743 | 24,743 | ||||||||||||||||||||||||||||||||||||||||||
Balance as of September 30, 2022 | 55,894,106 | $ | 6 | $ | 1,457,379 | $ | (128,266 | ) | $ | 723,008 | $ | 2,052,127 | ||||||||||||||||||||||||||||||||||||
Balance as of March 31, 2023 | $ | 56,343,164 | $ | 6 | $ | 1,545,777 | $ | (77,204 | ) | $ | 882,215 | $ | 2,350,794 |
F - 6
Common stock | Additional | Accumulated other | ||||||||||||||||||||||
Number | Amount | paid in Capital | comprehensive income (loss) | Retained earnings | Total | |||||||||||||||||||
Balance as of January 1, 2021 | 51,560,936 | $ | 5 | $ | 603,891 | $ | 3,857 | $ | 478,004 | $ | 1,085,757 | |||||||||||||
Cumulative effect of adopting ASU 2020-06 | - | - | (36,336 | ) | - | 2,884 | (33,452 | ) | ||||||||||||||||
Issuance of Common Stock upon exercise of stock-based awards | 405,239 | * - | 5,008 | - | - | 5,008 | ||||||||||||||||||
Stock based compensation | - | - | 23,153 | - | - | 23,153 | ||||||||||||||||||
Other comprehensive loss adjustments | - | - | - | (10,618 | ) | - | (10,618 | ) | ||||||||||||||||
Net income | - | - | - | - | 30,076 | 30,076 | ||||||||||||||||||
Balance as of March 31, 2021 | 51,966,175 | $ | 5 | $ | 595,716 | $ | (6,761 | ) | $ | 510,964 | $ | 1,099,924 | ||||||||||||
Issuance of Common Stock upon exercise of stock-based awards | 297,801 | * - | 5,500 | - | - | 5,500 | ||||||||||||||||||
Stock based compensation | - | - | 24,052 | - | - | 24,052 | ||||||||||||||||||
Other comprehensive income adjustments | - | - | - | 3,225 | - | 3,225 | ||||||||||||||||||
Net income | - | - | - | - | 45,092 | 45,092 | ||||||||||||||||||
Balance as of June 30, 2021 | 52,263,976 | $ | 5 | $ | 625,268 | $ | (3,536 | ) | $ | 556,056 | $ | 1,177,793 | ||||||||||||
Issuance of Common Stock upon exercise of stock-based awards | 255,514 | *- | 656 | - | - | 656 | ||||||||||||||||||
Stock based compensation | - | - | 26,185 | - | - | 26,185 | ||||||||||||||||||
Other comprehensive loss adjustments | - | - | - | (15,599 | ) | - | (15,599 | ) | ||||||||||||||||
Net income | - | - | - | - | 53,048 | 53,048 | ||||||||||||||||||
Balance as of September 30, 2021 | 52,519,490 | $ | 5 | $ | 652,109 | $ | (19,135 | ) | $ | 609,104 | $ | 1,242,083 |
Common stock | Additional paid in Capital | Accumulated other comprehensive income (loss) | Retained earnings | Total | ||||||||||||||||||||
Number | Amount | |||||||||||||||||||||||
Balance as of January 1, 2022 | 52,815,395 | $ | 5 | $ | 687,295 | $ | (27,319 | ) | $ | 650,058 | $ | 1,310,039 | ||||||||||||
Issuance of common stock upon exercise of stock-based awards | 270,751 | *- | 1,478 | - | - | 1,478 | ||||||||||||||||||
Stock based compensation | - | - | 34,107 | - | - | 34,107 | ||||||||||||||||||
Issuance of common stock in a secondary public offering, net of underwriters' discounts and commissions of $27,140 and $834 of offering costs | 2,300,000 | 1 | 650,525 | - | - | 650,526 | ||||||||||||||||||
Other comprehensive loss adjustments | - | - | - | (18,748 | ) | - | (18,748 | ) | ||||||||||||||||
Net income | - | - | - | - | 33,123 | 33,123 | ||||||||||||||||||
Balance as of March 31, 2022 | 55,386,146 | $ | 6 | $ | 1,373,405 | $ | (46,067 | ) | $ | 683,181 | $ | 2,010,525 |
F - 75
SOLAREDGE TECHNOLOGIES INC.
(in thousands, except per share data)
Nine Months Ended September 30, | Three Months Ended March 31, | |||||||||||||||
2022 | 2021 | 2023 | 2022 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net income | $ | 72,950 | $ | 128,216 | $ | 138,378 | $ | 33,123 | ||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||||||||||
Depreciation of property, plant and equipment | 29,571 | 21,492 | ||||||||||||||
Amortization of intangible assets | 7,741 | 7,487 | ||||||||||||||
Amortization of debt discount and debt issuance costs | 2,186 | 2,175 | ||||||||||||||
Amortization of premium and accretion of discount on available-for-sale marketable securities, net | 7,864 | 6,301 | ||||||||||||||
Impairment of goodwill and intangible assets | 4,008 | - | ||||||||||||||
Depreciation and amortization | 13,464 | 11,660 | ||||||||||||||
Stock-based compensation expenses | 106,932 | 73,390 | 39,235 | 34,107 | ||||||||||||
Gain from sale of privately held company | (7,533 | ) | - | |||||||||||||
Deferred income taxes, net | (3,822 | ) | (6,686 | ) | (3,930 | ) | (1,034 | ) | ||||||||
Loss (gain) from sale and disposal of assets | (485 | ) | 2,013 | |||||||||||||
Exchange rate fluctuations and other items, net | 64,662 | 13,086 | ||||||||||||||
Loss (gain) from exchange rate fluctuations | (20,441 | ) | 1,725 | |||||||||||||
Other items | 2,810 | 4,167 | ||||||||||||||
Changes in assets and liabilities: | ||||||||||||||||
Inventories, net | (188,579 | ) | 30,678 | (141,521 | ) | (51,323 | ) | |||||||||
Prepaid expenses and other assets | (55,478 | ) | (14,977 | ) | (20,591 | ) | (17,163 | ) | ||||||||
Trade receivables, net | (377,089 | ) | (206,131 | ) | (55,002 | ) | (224,865 | ) | ||||||||
Trade payables, net | 53,683 | (22,959 | ) | (50,410 | ) | (28,045 | ) | |||||||||
Employees and payroll accruals | 12,119 | 14,321 | 10,227 | 9,246 | ||||||||||||
Warranty obligations | 82,025 | 42,368 | 57,864 | 27,629 | ||||||||||||
Deferred revenues and customers advances | 41,440 | 13,723 | 9,325 | 15,029 | ||||||||||||
Other liabilities, net | 67,789 | 20,055 | ||||||||||||||
Accrued expenses and other liabilities, net | 28,515 | 22,755 | ||||||||||||||
Net cash provided by (used in) operating activities | (80,016 | ) | 124,552 | 7,923 | (162,989 | ) | ||||||||||
Cash flows from investing activities: | ||||||||||||||||
Proceed from sales and maturities of available-for-sale marketable securities | 178,415 | 174,817 | 11,597 | 53,096 | ||||||||||||
Purchase of property, plant and equipment | (125,085 | ) | (94,135 | ) | (38,338 | ) | (43,210 | ) | ||||||||
Investment in available-for-sale marketable securities | (461,491 | ) | (511,615 | ) | (38,979 | ) | (26,712 | ) | ||||||||
Investment in a privately-held company | - | (16,643 | ) | (5,500 | ) | - | ||||||||||
Proceeds from sale of a privately-held company | 24,175 | - | ||||||||||||||
Withdrawal from bank deposits, net | - | 50,020 | ||||||||||||||
Payment for asset acquisition, net of cash acquired | - | (2,996 | ) | |||||||||||||
Other investing activities | 3,472 | 2,593 | 3,440 | 1,692 | ||||||||||||
Net cash used in investing activities | $ | (380,514 | ) | $ | (397,959 | ) | $ | (67,780 | ) | $ | (15,134 | ) |
F - 86
Nine Months Ended September 30, | Three Months Ended March 31, | |||||||||||||||
2022 | 2021 | 2023 | 2022 | |||||||||||||
Cash flows from financing activities: | ||||||||||||||||
Proceeds from secondary public offering, net of issuance costs | $ | 650,526 | $ | - | $ | - | $ | 650,526 | ||||||||
Repayment of bank loans | (104 | ) | (16,219 | ) | ||||||||||||
Proceeds from exercise of stock-based awards | 3,508 | 6,128 | 75 | 1,478 | ||||||||||||
Tax withholding in connection with stock-based awards, net | (4,686 | ) | (8,402 | ) | (4,541 | ) | 822 | |||||||||
Other financing activities | (2,109 | ) | (939 | ) | (756 | ) | (491 | ) | ||||||||
Net cash provided by (used in) financing activities | 647,135 | (19,432 | ) | (5,222 | ) | 652,335 | ||||||||||
Increase (decrease) in cash and cash equivalents | 186,605 | (292,839 | ) | (65,079 | ) | 474,212 | ||||||||||
Cash and cash equivalents at the beginning of the period | 530,089 | 827,146 | 783,112 | 530,089 | ||||||||||||
Effect of exchange rate differences on cash and cash equivalents | (38,365 | ) | (7,719 | ) | 9,816 | (1,529 | ) | |||||||||
Cash and cash equivalents at the end of the period | $ | 678,329 | $ | 526,588 | $ | 727,849 | $ | 1,002,772 | ||||||||
Supplemental disclosure of non-cash activities: | ||||||||||||||||
Right-of-use asset recognized with a corresponding lease liability | $ | 43,274 | $ | 2,253 | $ | 11,258 | $ | 27,248 | ||||||||
Purchase of property, plant and equipment | $ | 12,304 | $ | 19,536 |
F - 97
(in thousands, except per share data)
a. | SolarEdge Technologies, Inc. (the “Company”) and its subsidiaries design, develop, and sell an intelligent inverter solution designed to maximize power generation at the individual photovoltaic (“PV”) module level while lowering the cost of energy produced by the solar PV system and providing comprehensive and advanced safety features. The Company’s products consist mainly of (i) power optimizers designed to maximize energy throughput from each and every module through constant tracking of Maximum Power Point individually per module, (ii) inverters which invert direct current (DC) from the PV module to alternating current (AC) including the Company’s |
b. | The Company has expanded its activity to other areas of smart energy technology organically and through acquisitions. The Company now offers a variety of energy solutions, which include lithium-ion cells, batteries, and energy storage systems (“Energy Storage”), full powertrain kits for electric vehicles, or EVs (“e-Mobility”), as well as automated machines for industrial use (“Automation Machines”). |
c. | Basis of Presentation: |
d. | Use of estimates: |
F - 10
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
e. | Concentrations of supply risks: |
f. | New accounting |
F - 118
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | |||||||||||||||||||||||||
Available-for-sale – matures within one year: | ||||||||||||||||||||||||||||||||
Corporate bonds | $ | 203,445 | $ | - | $ | (4,049 | ) | $ | 199,396 | $ | 390,012 | $ | 82 | $ | (8,595 | ) | $ | 381,499 | ||||||||||||||
Governmental bonds | 3,254 | - | (52 | ) | 3,202 | 29,788 | - | (467 | ) | 29,321 | ||||||||||||||||||||||
206,699 | - | (4,101 | ) | 202,598 | 419,800 | 82 | (9,062 | ) | 410,820 | |||||||||||||||||||||||
Available-for-sale – matures after one year: | ||||||||||||||||||||||||||||||||
Corporate bonds | 683,804 | - | (30,753 | ) | 653,051 | 515,425 | 698 | (15,855 | ) | 500,268 | ||||||||||||||||||||||
Governmental bonds | 36,901 | - | (1,199 | ) | 35,702 | 9,251 | - | (392 | ) | 8,859 | ||||||||||||||||||||||
720,705 | - | (31,952 | ) | 688,753 | 524,676 | 698 | (16,247 | ) | 509,127 | |||||||||||||||||||||||
Total | $ | 927,404 | $ | - | $ | (36,053 | ) | $ | 891,351 | $ | 944,476 | $ | 780 | $ | (25,309 | ) | $ | 919,947 |
Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | |||||||||||||||||||||||||
Available-for-sale – matures within one year: | ||||||||||||||||||||||||||||||||
Corporate bonds | $ | 160,462 | $ | 23 | $ | (320 | ) | $ | 160,165 | $ | 222,482 | $ | - | $ | (4,657 | ) | $ | 217,825 | ||||||||||||||
Governmental bonds | 7,576 | - | (13 | ) | 7,563 | 23,845 | - | (553 | ) | 23,292 | ||||||||||||||||||||||
168,038 | 23 | (333 | ) | 167,728 | 246,327 | - | (5,210 | ) | 241,117 | |||||||||||||||||||||||
Available-for-sale – matures after one year: | ||||||||||||||||||||||||||||||||
Corporate bonds | 474,412 | 9 | (5,580 | ) | 468,841 | 657,238 | 80 | (26,460 | ) | 630,858 | ||||||||||||||||||||||
Governmental bonds | 13,506 | - | (119 | ) | 13,387 | 15,250 | - | (617 | ) | 14,633 | ||||||||||||||||||||||
487,918 | 9 | (5,699 | ) | 482,228 | 672,488 | 80 | (27,077 | ) | 645,491 | |||||||||||||||||||||||
Total | $ | 655,956 | $ | 32 | $ | (6,032 | ) | $ | 649,956 | $ | 918,815 | $ | 80 | $ | (32,287 | ) | $ | 886,608 |
F - 129
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
September 30, 2022 | December 31, 2021 | March 31, 2023 | December 31, 2022 | |||||||||||||
Raw materials | $ | 432,766 | $ | 247,386 | $ | 503,445 | $ | 503,257 | ||||||||
Work in process | 15,529 | 13,863 | 37,754 | 23,407 | ||||||||||||
Finished goods | 113,057 | 118,894 | 333,013 | 202,537 | ||||||||||||
$ | 561,352 | $ | 380,143 | |||||||||||||
Total inventories, net | $ | 874,212 | $ | 729,201 |
March 31, 2023 | December 31, 2022 | |||||||
Vendor non-trade receivables (*) | $ | 147,238 | $ | 147,597 | ||||
Government authorities | 57,275 | 55,670 | ||||||
Prepaid expenses and other | 55,129 | 37,815 | ||||||
Total prepaid expenses and other current assets | $ | 259,642 | $ | 241,082 |
F - 1310
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
NOTE 5:DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
Gains (losses) on derivative instruments Three Months Ended March 31, Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Affected line item Foreign exchange contracts Non Designated Hedging Instruments $1,211 $3,350 $5,154 $7,706 Financial expenses, net Three Months Ended Nine Months Ended 2022 2021 2022 2021 Foreign exchange contracts: Designated Hedging Instruments $ (1,399 ) $ 1,006 $ (8,928 ) $ 1,719September 30, 2022,March 31, 2023, the Company entered into forward contracts and put and call options to sell U.S. dollars (“USD”) for NIS in the amount of approximately NIS 334231 million and NIS 10125 million,, respectively.also enteredoccasionally enters into derivative instrument arrangements to hedge the Company’s exposure to currencies other than the USD. These derivative instruments are not designated as cash flow hedges, as defined by ASC 815, and therefore all gains and losses, resulting from fair value remeasurement, were recorded immediately in the statement of income, under "Financial expense, net""Financial income (expense), net".As of September 30, 2022, the Company entered into forward contracts to sell Australian dollars (“AUD”) for USD in the amount of AUD 4 million.As of September 30, 2022, the Company entered into forward contracts to sell Euro for USD in the amount of €9 million. F - 14SOLAREDGE TECHNOLOGIES INC.NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(in thousands, except per share data)recognized in our income statements are summarized below: gains (losses)losses from designated hedging instruments reclassified from accumulated other comprehensive loss.Gains (losses) on derivative instruments recognized in the consolidated comprehensive income (loss) statements were as follows:
September 30,
September 30,
F - 1511
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
Fair value measurements as of | Fair Value Hierarchy | Fair value measurements as of | ||||||||||||||||||
Description | Fair Value Hierarchy | September 30, 2022 | December 31, 2021 | March 31, 2023 | December 31, 2022 | |||||||||||||||
Assets: | ||||||||||||||||||||
Cash equivalents: | ||||||||||||||||||||
Cash and cash equivalents: | ||||||||||||||||||||
Cash | Level 1 | $ | 552,800 | $ | 508,389 | Level 1 | $ | 667,384 | $ | 695,004 | ||||||||||
Money market mutual funds | Level 1 | $ | 94,581 | $ | 21,680 | Level 1 | $ | 17,486 | $ | 25,149 | ||||||||||
Deposits | Level 1 | $ | 30,948 | $ | 20 | Level 1 | $ | 42,979 | $ | 62,959 | ||||||||||
Derivative instruments | Level 2 | $ | 1,813 | $ | 4,009 | Level 2 | $ | 353 | $ | - | ||||||||||
Short-term marketable securities: | ||||||||||||||||||||
Corporate bonds | Level 2 | $ | 199,396 | $ | 160,165 | Level 2 | $ | 381,499 | $ | 217,825 | ||||||||||
Governmental bonds | Level 2 | $ | 3,202 | $ | 7,563 | Level 2 | $ | 29,321 | $ | 23,292 | ||||||||||
Long-term marketable securities: | ||||||||||||||||||||
Corporate bonds | Level 2 | $ | 653,051 | $ | 468,841 | Level 2 | $ | 500,268 | $ | 630,858 | ||||||||||
Governmental bonds | Level 2 | $ | 35,702 | $ | 13,387 | Level 2 | $ | 8,859 | $ | 14,633 | ||||||||||
Liabilities: | ||||||||||||||||||||
Derivative instruments | Level 2 | $ | (4,269 | ) | $ | (169 | ) | Level 2 | $ | (2,583 | ) | $ | (1,874 | ) |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Balance, at the beginning of the period | $ | 324,176 | $ | 232,167 | $ | 265,160 | $ | 204,994 | ||||||||
Additions and adjustments to cost of revenues | 56,815 | 43,068 | 163,783 | 109,382 | ||||||||||||
Usage and current warranty expenses | (34,852 | ) | (28,172 | ) | (82,804 | ) | (67,313 | ) | ||||||||
Balance, at end of the period | 346,139 | 247,063 | 346,139 | 247,063 | ||||||||||||
Less current portion | (97,222 | ) | (67,096 | ) | (97,222 | ) | (67,096 | ) | ||||||||
Long term portion | $ | 248,917 | $ | 179,967 | $ | 248,917 | $ | 179,967 |
Three Months Ended March 31, | ||||||||
2023 | 2022 | |||||||
Balance, at the beginning of the period | $ | 385,057 | $ | 265,160 | ||||
Additions and adjustments to cost of revenues | 91,570 | 47,907 | ||||||
Usage and current warranty expenses | (33,656 | ) | (20,401 | ) | ||||
Balance, at end of the period | 442,971 | 292,666 | ||||||
Less current portion | (129,278 | ) | (82,340 | ) | ||||
Long term portion | $ | 313,693 | $ | 210,326 |
F - 1612
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
Three Months Ended September 30, | Nine Months Ended September 30, | Three Months Ended March 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2023 | 2022 | |||||||||||||||||||
Balance, at the beginning of the period | $ | 200,695 | $ | 144,253 | $ | 169,345 | $ | 140,020 | $ | 213,577 | $ | 169,345 | ||||||||||||
Revenue recognized | (12,731 | ) | (10,667 | ) | (37,855 | ) | (46,259 | ) | (11,742 | ) | (14,529 | ) | ||||||||||||
Increase in deferred revenues and customer advances | 20,756 | 19,622 | 77,230 | 59,447 | 22,589 | 29,429 | ||||||||||||||||||
Balance, at the end of the period | 208,720 | 153,208 | 208,720 | 153,208 | 224,424 | 184,245 | ||||||||||||||||||
Less current portion | (31,896 | ) | (16,939 | ) | (31,896 | ) | (16,939 | ) | (27,507 | ) | (25,511 | ) | ||||||||||||
Long term portion | $ | 176,824 | $ | 136,269 | $ | 176,824 | $ | 136,269 | $ | 196,917 | $ | 158,734 |
2022 | $ | 11,697 | ||||||
2023 | 23,044 | $ | 23,888 | |||||
2024 | 10,466 | 12,073 | ||||||
2025 | 9,648 | 10,764 | ||||||
2026 | 9,047 | 10,389 | ||||||
2027 | 8,363 | |||||||
Thereafter | 144,818 | 158,947 | ||||||
Total deferred revenues | $ | 208,720 | $ | 224,424 |
September 30, 2022 | December 31, 2021 | |||||||
Accrued expenses | $ | 112,388 | $ | 57,158 | ||||
Government authorities | 40,189 | 22,631 | ||||||
Operating lease liabilities | 15,307 | 12,728 | ||||||
Provision for legal claims | 39 | 11,622 | ||||||
Accrual for sales incentives | 5,558 | 3,048 | ||||||
Other | 8,411 | 2,192 | ||||||
$ | 181,892 | $ | 109,379 |
March 31, 2023 | December 31, 2022 | |||||||
Accrued expenses | $ | 127,018 | $ | 117,638 | ||||
Government authorities | 87,159 | 67,514 | ||||||
Operating lease liabilities | 17,215 | 16,183 | ||||||
Accrual for sales incentives | 5,746 | 6,790 | ||||||
Other | 6,743 | 5,987 | ||||||
Total accrued expenses and other current liabilities | $ | 243,881 | $ | 214,112 |
F - 1713
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
The Convertible Senior Notes consisted of the following as of September 30, 2022March 31, 2023 and December 31, 2021:2022:
September 30, 2022 | December 31, 2021 | March 31, 2023 | December 31, 2022 | |||||||||||||
Liability: | ||||||||||||||||
Principal | $ | 632,500 | $ | 632,500 | $ | 632,500 | $ | 632,500 | ||||||||
Unamortized issuance costs | (8,779 | ) | (10,965 | ) | (7,318 | ) | (8,049 | ) | ||||||||
Net carrying amount | $ | 623,721 | $ | 621,535 | $ | 625,182 | $ | 624,451 |
F - 1814
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
The Company granted under its 2015 Plan, PSU awards to certain employees and officers which vest upon the achievement of certain performance or market conditions subject to their continued employment with the Company.
In 2021, the Company has also committed to issuing additional shares, which carry certain performance conditions (including business performance targets and a continued service relationship with the Company) and are treated as PSUs for accounting purposes.
F - 1915
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
Number of options | Weighted average exercise price | Weighted average remaining contractual term in years | Aggregate intrinsic Value | |||||||||||||
Outstanding as of December 31, 2021 | 474,280 | $ | 44.68 | 5.22 | $ | 112,479 | ||||||||||
Exercised | (123,420 | ) | 28.42 | - | - | |||||||||||
Forfeited or expired | (243 | ) | 5.01 | - | - | |||||||||||
Outstanding as of September 30, 2022 | 350,617 | $ | 50.43 | 5.07 | $ | 65,030 | ||||||||||
Vested and expected to vest as of September 30, 2022 | 349,682 | $ | 50.22 | 5.10 | $ | 64,916 | ||||||||||
Exercisable as of September 30, 2022 | 298,440 | $ | 36.94 | 4.75 | $ | 58,637 |
Number of options | Weighted average exercise price | Weighted average remaining contractual term in years | Aggregate intrinsic Value | |||||||||||||
Outstanding as of December 31, 2022 | 339,029 | $ | 50.64 | 4.86 | $ | 79,414 | ||||||||||
Exercised | (3,645 | ) | 20.46 | - | 1,073 | |||||||||||
Outstanding as of March 31, 2023 | 335,384 | $ | 50.97 | 4.63 | $ | 84,989 | ||||||||||
Vested and expected to vest as of March 31, 2023 | 334,950 | $ | 50.80 | 4.62 | $ | 84,937 | ||||||||||
Exercisable as of March 31, 2023 | 311,240 | $ | 40.47 | 4.43 | $ | 82,079 |
Number of RSUs | Weighted average grant date fair value | Number of RSUs | Weighted average grant date fair value | |||||||||||||
Unvested as of December 31, 2021 | 1,759,972 | $ | 189.25 | |||||||||||||
Unvested as of December 31, 2022 | 1,488,515 | $ | 232.05 | |||||||||||||
Granted | 259,198 | 299.66 | 103,081 | 296.64 | ||||||||||||
Vested | (620,186 | ) | 128.46 | (197,866 | ) | 164.31 | ||||||||||
Forfeited | (115,327 | ) | 209.13 | (31,296 | ) | 254.24 | ||||||||||
Unvested as of September 30, 2022 | 1,283,657 | $ | 214.73 | |||||||||||||
Unvested as of March 31, 2023 | 1,362,434 | $ | 246.27 |
Number of PSUs | Weighted average grant date fair value | |||||||
Unvested as of December 31, 2021 | 108,595 | $ | 296.40 | |||||
Granted | 39,263 | 293.04 | ||||||
Unvested as of September 30, 2022 | 147,858 | $ | 295.51 |
Number of PSUs | Weighted average grant date fair value | |||||||
Unvested as of December 31, 2022 | 149,232 | $ | 295.88 | |||||
Granted | 31,911 | 314.22 | ||||||
Vested | (8,249 | ) | 270.93 | |||||
Unvested as of March 31, 2023 | 172,894 | $ | 300.45 |
d. | Employee Stock Purchase Plan ("ESPP"): |
The ESPP is implemented through an offering every six months. According to the ESPP, eligible employees may use up to 15% of their salaries to purchase common stock up to an aggregate limit of $15 per participant for every six months plan. The price of an ordinary share purchased under the ESPP is equal to 85% of the lower of the fair market value of the ordinary share on the subscription date of each offering period or on the purchase date.
F - 20
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
F - 16
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
e. | Stock-based compensation expenses: |
Three Months Ended September 30, | Nine Months Ended September 30, | Three Months Ended March 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2023 | 2022 | |||||||||||||||||||
Cost of revenues | $ | 4,660 | $ | 4,289 | $ | 15,008 | $ | 14,370 | $ | 5,927 | $ | 5,062 | ||||||||||||
Research and development | 14,553 | 11,949 | 46,357 | 30,552 | 17,209 | 14,985 | ||||||||||||||||||
Selling and marketing | 9,341 | 5,737 | 23,089 | 16,952 | 8,079 | 6,701 | ||||||||||||||||||
General and administrative | 7,197 | 4,210 | 22,478 | 11,516 | 8,020 | 7,359 | ||||||||||||||||||
Total stock-based compensation expenses | $ | 35,751 | $ | 26,185 | $ | 106,932 | $ | 73,390 | $ | 39,235 | $ | 34,107 |
TheFor the three months ended March 31, 2023, the Company capitalized stock-based compensation as part of inventories and prepaid expenses for the three and nine months ended September 30, 2022, in the amount of $881$430 related to ERP implementation, which were included within other long-term assets in the condensed consolidated balance sheets and $977, $405 related to inventory.respectively. In 2021
The total tax benefit associated with share-based compensation for the nine months ended September 30, 2022, and 2021 was $9,182 and $10,249, respectively. The tax benefit realized from share-based compensation for the nine months ended September 30, 2022, and 2021 was $8,871 and $10,400, respectively.
F - 2117
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
NOTE 12:COMMITMENTS AND CONTINGENT LIABILITIES
a. Guarantees:
As of March 31, 2023September 30, 2022,, contingent liabilities exist regarding guarantees in the amounts of $5,924, $2,767,$5,876, and $1,321$1,899 in respect of office rent lease agreements projects with customers,and customs and other transactions, respectively.
b. Contractual purchase obligations:
The Company has contractual obligations to purchase goods and raw materials. These contractual purchase obligations relate to inventories and other purchase orders, which cannot be canceled without penalty. In addition, the Company acquires raw materials or other goods and services, including product components, by issuing authorizations to its suppliers to purchase materials based on its projected demand and manufacturing needs.
As of September 30, 2022March 31, 2023, the Company had non-cancelable purchase obligations totaling approximately $1,639,1571,617,376, out of which the Company recorded a provision for loss in the amount of $5,8748,052.
As of September 30, 2022March 31, 2023, the Company had contractual obligations for capital expenditures totaling approximately $69,158121,347. These commitments reflect purchases of automated assembly lines and other machinery related to the Company’s general manufacturing process as well as capital expenditures associated withand mainly to its plans to establish manufacturing capabilities in the construction of Sella 2United States., the Company’s second lithium-ion cell and battery factory in Korea.
c. Legal claims:
From time to time, the Company may be involved in various claims and legal proceedings. The Company reviews the status of each matter and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, the Company accrues a liability for the estimated loss. These accruals are reviewed at least quarterly and adjusted to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular matter.
In September 2018, the Company’s German subsidiary, SolarEdge Technologies GmbH, received a complaint filed by competitor SMA Solar Technology AG (“SMA”). The complaint, filed in the District Court Düsseldorf, Germany, alleges that SolarEdge's 12.5kW - 27.6kW inverters infringeinfringed on two of the plaintiff’s patents. SMA asserted a value in dispute of EUR 5.5 million (approximately $5,411)$5,983) for both patents. The Company challenged the validity of both patents. With respect to one ofpatents and the claims,first patent was invalidated and SMA’s appeal on the matter was denied in October 2020,January 2023. In August 2021, the German Patent Court rendered the SMASMA's second patent invalid, and this invalidity has been appealed by SMA. With respect to the other claim, in November 2019, the first instance court stayed the infringement proceedings since it considered it to be highly likely that the second SMA patent would also be rendered invalid.and a hearing is pending. The Company believes that it has meritorious defenses to thethese claims asserted and intends to vigorously defend against the remaining lawsuit.
In May 2019, the Company was served with three lawsuits by Huawei Technologies Co., Ltd., a Chinese entity (“Huawei”), against its two Chinese subsidiaries and equipment manufacturer in China. In May 2022, the Company announced that it had agreed on a global patent license agreement with Huawei. The agreement includes a cross license that covers patents relating to both companies’ products and resulted in the settlement of all pending patent litigation between the companies.
As of March 31, 2023September 30, 2022,, an immaterial amount for legal claims was recorded in accrued expenses and other current liabilities.
F - 2218
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Unrealized gains (losses) on available-for-sale marketable securities | ||||||||||||||||
Beginning balance | $ | (18,777 | ) | $ | (1,636 | ) | $ | (4,709 | ) | $ | 240 | |||||
Revaluation | (12,424 | ) | 6 | (31,064 | ) | (2,340 | ) | |||||||||
Tax on revaluation | 2,694 | 35 | 6,522 | 505 | ||||||||||||
Other comprehensive income (loss) before reclassifications | (9,730 | ) | 41 | (24,542 | ) | (1,835 | ) | |||||||||
Reclassification | 166 | (16 | ) | 1,010 | (16 | ) | ||||||||||
Tax on reclassification | (15 | ) | 4 | (115 | ) | 4 | ||||||||||
Gains (losses) reclassified from accumulated other comprehensive income (loss) | 151 | (12 | ) | 895 | (12 | ) | ||||||||||
Net current period other comprehensive income (loss) | (9,579 | ) | 29 | (23,647 | ) | (1,847 | ) | |||||||||
Ending balance | $ | (28,356 | ) | $ | (1,607 | ) | $ | (28,356 | ) | $ | (1,607 | ) | ||||
Unrealized gains (losses) on cash flow hedges | ||||||||||||||||
Beginning balance | $ | (3,642 | ) | $ | 311 | $ | 874 | $ | - | |||||||
Revaluation | (1,569 | ) | 1,146 | (10,094 | ) | 1,956 | ||||||||||
Tax on revaluation | 170 | (140 | ) | 1,166 | (237 | ) | ||||||||||
Other comprehensive income (loss) before reclassifications | (1,399 | ) | 1,006 | (8,928 | ) | 1,719 | ||||||||||
Reclassification | 1,422 | (794 | ) | 4,833 | (1,251 | ) | ||||||||||
Tax on reclassification | (163 | ) | 96 | (561 | ) | 151 | ||||||||||
Gains (losses) reclassified from accumulated other comprehensive income (loss) | 1,259 | (698 | ) | 4,272 | (1,100 | ) | ||||||||||
Net current period other comprehensive income (loss) | (140 | ) | 308 | (4,656 | ) | 619 | ||||||||||
Ending balance | $ | (3,782 | ) | $ | 619 | $ | (3,782 | ) | $ | 619 | ||||||
Foreign currency translation adjustments on intra-entity transactions that are of a long-term investment in nature | ||||||||||||||||
Beginning balance | $ | (52,750 | ) | $ | (1,896 | ) | $ | (17,420 | ) | $ | - | |||||
Revaluation | (30,799 | ) | (12,272 | ) | (66,129 | ) | (14,168 | ) | ||||||||
Ending balance | $ | (83,549 | ) | $ | (14,168 | ) | $ | (83,549 | ) | $ | (14,168 | ) | ||||
Unrealized gains (losses) on foreign currency translation | ||||||||||||||||
Beginning balance | $ | (14,451 | ) | $ | (315 | ) | $ | (6,064 | ) | $ | 3,617 | |||||
Revaluation | 1,872 | (3,664 | ) | (6,515 | ) | (7,596 | ) | |||||||||
Ending balance | $ | (12,579 | ) | $ | (3,979 | ) | $ | (12,579 | ) | $ | (3,979 | ) | ||||
Total | $ | (128,266 | ) | $ | (19,135 | ) | $ | (128,266 | ) | $ | (19,135 | ) |
Three Months Ended March 31, | ||||||||
2023 | 2022 | |||||||
Unrealized gains (losses) on available-for-sale marketable securities | ||||||||
Beginning balance | $ | (25,449 | ) | $ | (4,709 | ) | ||
Revaluation | 7,570 | (12,721 | ) | |||||
Tax on revaluation | (1,471 | ) | 2,471 | |||||
Other comprehensive income (loss) before reclassifications | 6,099 | (10,250 | ) | |||||
Reclassification | 107 | 844 | ||||||
Tax on reclassification | (29 | ) | (100 | ) | ||||
Losses reclassified from accumulated other comprehensive income | 78 | 744 | ||||||
Net current period other comprehensive income (loss) | 6,177 | (9,506 | ) | |||||
Ending balance | $ | (19,272 | ) | $ | (14,215 | ) | ||
Unrealized gains (losses) on cash flow hedges | ||||||||
Beginning balance | $ | (1,761 | ) | $ | 874 | |||
Revaluation | (2,196 | ) | (1,337 | ) | ||||
Tax on revaluation | 139 | 159 | ||||||
Other comprehensive loss before reclassifications | (2,057 | ) | (1,178 | ) | ||||
Reclassification | 1,840 | 565 | ||||||
Tax on reclassification | (114 | ) | (67 | ) | ||||
Losses reclassified from accumulated other comprehensive loss | 1,726 | 498 | ||||||
Net current period other comprehensive loss | (331 | ) | (680 | ) | ||||
Ending balance | $ | (2,092 | ) | $ | 194 | |||
Foreign currency translation adjustments on intra-entity transactions that are of a long-term investment in nature | ||||||||
Beginning balance | $ | (37,960 | ) | $ | (17,420 | ) | ||
Revaluation | (10,800 | ) | (6,983 | ) | ||||
Ending balance | $ | (48,760 | ) | $ | (24,403 | ) | ||
Unrealized gains (losses) on foreign currency translation | ||||||||
Beginning balance | $ | (7,939 | ) | $ | (6,064 | ) | ||
Revaluation | 859 | (1,579 | ) | |||||
Ending balance | $ | (7,080 | ) | $ | (7,643 | ) | ||
Total | $ | (77,204 | ) | $ | (46,067 | ) |
F - 2319
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
Details about Accumulated Other Comprehensive Loss Components | Three Months Ended September 30, | Nine Months Ended September 30, | Affected Line Item in the Statement of Income | ||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||
Unrealized gains (losses) on available-for-sale marketable securities | |||||||||||||||||
$ | (166) | $ | 12 | $ | (1010 | ) | $ | 16 | Financial expense, net | ||||||||
15 | - | 115 | (4 | ) | Income taxes | ||||||||||||
$ | (151) | $ | 12 | $ | (895 | ) | $ | 12 | Total, net of income taxes | ||||||||
Unrealized gains (losses) on cash flow hedges, net | |||||||||||||||||
(157 | ) | 97 | (542 | ) | 152 | Cost of revenues | |||||||||||
(808 | ) | 476 | (2,841 | ) | 751 | Research and development | |||||||||||
(242 | ) | 97 | (662 | ) | 153 | Sales and marketing | |||||||||||
(215 | ) | 124 | (788 | ) | 196 | General and administrative | |||||||||||
$ | (1,422 | ) | $ | 794 | $ | (4,833 | ) | $ | 1252 | Total, before income taxes | |||||||
163 | (96 | ) | 561 | (152 | ) | Income taxes | |||||||||||
(1,259 | ) | 698 | (4,272 | ) | 1,100 | Total, net of income taxes | |||||||||||
Total reclassifications for the period | $ | (1,410 | ) | $ | 710 | $ | (5,167 | ) | $ | 1,112 |
Details about Accumulated Other Comprehensive Loss Components | Three Months Ended March 31, | Affected Line Item in the Statement of Income | |||||||
2023 | 2022 | ||||||||
Available-for-sale marketable securities | |||||||||
$ | (107 | ) | $ | (844) | Financial income (expense), net | ||||
29 | 100 | Income taxes | |||||||
$ | (78 | ) | $ | (744) | Total, net of income taxes | ||||
Cash flow hedges | |||||||||
(212 | ) | (67 | ) | Cost of revenues | |||||
(1,129 | ) | (338 | ) | Research and development | |||||
(225 | ) | (71 | ) | Sales and marketing | |||||
(274 | ) | (89 | ) | General and administrative | |||||
$ | (1,840 | ) | $ | (565) | Total, before income taxes | ||||
114 | 67 | Income taxes | |||||||
(1,726 | ) | (498 | ) | Total, net of income taxes | |||||
Total reclassifications for the period | $ | (1,804 | ) | $ | (1,242) |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Impairment of goodwill and intangible assets (1) | $ | - | $ | - | $ | 4,008 | $ | - | ||||||||
Write-off of property, plant and equipment | (19 | ) | - | 660 | 2,209 | |||||||||||
Sale of property, plant and equipment | (1,146 | ) | - | (1,146 | ) | - | ||||||||||
Sale of Critical Power assets | (1,559 | ) | - | (1,559 | ) | - | ||||||||||
Kokam purchase escrow (2) | - | - | - | (859 | ) | |||||||||||
Total other operating expenses (income) | $ | (2,724 | ) | $ | - | $ | 1,963 | $ | 1,350 |
F - 2420
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
NOTE 15:INCOME TAXES
The effective tax rate for the three months ended September 30, 2022, and 2021 was 58.0% and 12.6%, respectively, and for the nine months ended September 30, 2022, and 2021 the effective tax rate was 42.1% and 15.9%, respectively.
The increase in the effective tax rate in the current year, is primarily due to the change to Section 174 of the U.S Internal Revenue Code, which came into effect on January 1, 2022. The change requires taxpayers to amortize research and development expenditures over five years (if expensed by a U.S. entity) or fifteen years (if expensed by non-U.S. entities). This change resulted in an increase in the Company’s taxable income and Global Intangible Low Taxed Income (“GILTI”) tax. In addition, the change in the Company's tax rate resulted from a different allocation of income among the Company’s U.S., Israeli, and foreign subsidiaries, and lower tax benefits relating to stock-based compensation.
As of September 30, 2022, and December 31, 2021, unrecognized tax benefits were $2,561 and $2,192, respectively. If recognized, such benefits would favorably affect the Company’s effective tax rate.
The Company accrues interest and penalties related to unrecognized tax benefits in its provision for income taxes. The total amount of penalties and interest were immaterial as of September 30, 2022, and December 31, 2021.
In August 2022, the U.S. government signed into law the Inflation Reduction Act of 2022 (the “IRA”), which, among other things, revised U.S. tax law by, including a new corporate alternative minimum tax (the “CAMT”) of 15% on certain large corporations, imposing a 1% excise tax on stock buybacks, and providing incentives to address climate change, including the introduction of advanced manufacturing production tax credits, that may be relevant to the company's products, if they will be manufactured in the US. The provisions of the IRA are generally effective for tax years beginning after 2022. Given the complexities of the IRA, which is pending technical guidance and regulations from the Internal Revenue Service and U.S. Treasury Department, the Company is in the process of evaluating provisions included under the IRA and its impact to the Company’s consolidated financial statements.
F - 25
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
Three Months Ended September 30, | Nine Months Ended September 30, | Three Months Ended March 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2023 | 2022 | |||||||||||||||||||
Basic EPS: | ||||||||||||||||||||||||
Numerator: | ||||||||||||||||||||||||
Net income | $ | 24,743 | $ | 53,048 | $ | 72,950 | $ | 128,216 | $ | 138,378 | $ | 33,123 | ||||||||||||
Denominator: | ||||||||||||||||||||||||
Shares used in computing net EPS of common stock, basic | 55,730,328 | 52,355,867 | 54,788,734 | 52,056,233 | ||||||||||||||||||||
Shares used in computing net earnings per share of common stock, basic | 56,215,490 | 53,134,937 | ||||||||||||||||||||||
Diluted EPS: | ||||||||||||||||||||||||
Numerator: | ||||||||||||||||||||||||
Net income attributable to common stock, basic | $ | 24,743 | $ | 53,048 | $ | 72,950 | $ | 128,216 | $ | 138,378 | $ | 33,123 | ||||||||||||
Notes due 2025 | 551 | 525 | 1,651 | 1,575 | 552 | 553 | ||||||||||||||||||
Net income attributable to common stock, diluted | $ | 25,294 | $ | 53,573 | $ | 74,601 | $ | 129,791 | $ | 138,930 | $ | 33,676 | ||||||||||||
Denominator: | ||||||||||||||||||||||||
Shares used in computing net EPS of common stock, basic | 55,730,328 | 52,355,867 | 54,788,734 | 52,056,233 | ||||||||||||||||||||
Shares used in computing net earnings per share of common stock, basic | 56,215,490 | 53,134,937 | ||||||||||||||||||||||
Notes due 2025 | 2,276,818 | 2,276,818 | 2,276,818 | 2,276,818 | 2,276,818 | 2,276,818 | ||||||||||||||||||
Effect of stock-based awards | 740,392 | 1,296,315 | 820,489 | 1,622,390 | 701,523 | 903,438 | ||||||||||||||||||
Shares used in computing net EPS of common stock, diluted | 58,747,538 | 55,929,000 | 57,886,041 | 55,955,441 | ||||||||||||||||||||
Shares used in computing net earnings per share of common stock, diluted | 59,193,831 | 56,315,193 | ||||||||||||||||||||||
Earnings per share: | ||||||||||||||||||||||||
Basic | $ | 2.46 | $ | 0.62 | ||||||||||||||||||||
Diluted | $ | 2.35 | $ | 0.60 | ||||||||||||||||||||
Shares excluded from the calculation of diluted net EPS due to their anti-dilutive effect | 138,916 | 243,689 | 181,802 | 169,597 | 192,339 | 223,776 |
F - 2621
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
Three Months Ended September 30, 2022 | Nine Months Ended September 30, 2022 | |||||||||||||||
Solar | All other | Solar | All other | |||||||||||||
Revenues | $ | 788,610 | $ | 47,954 | $ | 2,084,206 | $ | 134,931 | ||||||||
Cost of revenues | 565,403 | 42,594 | 1,484,303 | 125,883 | ||||||||||||
Gross profit | 223,207 | 5,360 | 599,903 | 9,048 | ||||||||||||
Research and development | 47,943 | 6,861 | 140,215 | 23,378 | ||||||||||||
Sales and marketing | 30,996 | 2,202 | 85,220 | 8,059 | ||||||||||||
General and administrative | 17,534 | 2,795 | 49,779 | 10,209 | ||||||||||||
Segments profit (loss) | $ | 126,734 | $ | (6,498 | ) | $ | 324,689 | $ | (32,598 | ) |
F - 2722
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
The following table presents information on reportable segments profit (loss) for the period presented:
Three Months Ended September 30, 2021 | Nine Months Ended September 30, 2021 | |||||||||||||||
Solar | All other | Solar | All other | |||||||||||||
Revenues | $ | 476,838 | $ | 49,455 | $ | 1,284,574 | $ | 127,080 | ||||||||
Cost of revenues | 302,081 | 45,132 | 799,163 | 122,536 | ||||||||||||
Gross profit | 174,757 | 4,323 | 485,411 | 4,544 | ||||||||||||
Research and development | 34,657 | 8,853 |
| 102,151 |
| 22,376 | ||||||||||
Sales and marketing | 21,127 | 2,290 | 60,758 | 7,340 | ||||||||||||
General and administrative | 14,054 | 2,863 | 39,094 | 9,783 | ||||||||||||
Segments profit (loss) | $ | 104,919 | $ | (9,683 | ) | $ | 283,408 | $ | (34,955 | ) |
Three Months Ended March 31, | ||||||||||||||||
2023 | 2022 | |||||||||||||||
Solar | All other | Solar | All other | |||||||||||||
Revenues | $ | 908,505 | $ | 35,197 | $ | 607,997 | $ | 46,948 | ||||||||
Cost of revenues | 590,105 | 46,216 | 424,500 | 44,341 | ||||||||||||
Gross profit (loss) | 318,400 | (11,019 | ) | 183,497 | 2,607 | |||||||||||
Research and development | $ | 55,823 | $ | 6,528 | $ | 43,131 | $ | 7,930 | ||||||||
Sales and marketing | 31,145 | 1,561 | 25,805 | 2,574 | ||||||||||||
General and administrative | 24,743 | 3,778 | 15,849 | 3,625 | ||||||||||||
Segments profit (loss) | $ | 206,689 | $ | (22,886 | ) | $ | 98,712 | $ | (11,522 | ) |
Three Months Ended March 31, | ||||||||
2023 | 2022 | |||||||
Solar revenues | $ | 908,505 | $ | 607,997 | ||||
All other segment revenues | 35,197 | 46,948 | ||||||
Revenues from financing component | 187 | 135 | ||||||
Consolidated revenues | $ | 943,889 | $ | 655,080 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Solar revenues | $ | 788,610 | $ | 476,838 | $ | 2,084,206 | $ | 1,284,574 | ||||||||
All other revenues | 47,954 | 49,455 | 134,931 | 127,080 | ||||||||||||
Revenues from finance component | 159 | 111 | 440 | 296 | ||||||||||||
Consolidated revenues | $ | 836,723 | $ | 526,404 | $ | 2,219,577 | $ | 1,411,950 |
Three Months Ended March 31, | ||||||||
2023 | 2022 | |||||||
Solar segment profit | $ | 206,689 | $ | 98,712 | ||||
All other segment loss | (22,886 | ) | (11,522 | ) | ||||
Segments operating profit | 183,803 | 87,190 | ||||||
Amounts not allocated to segments: | ||||||||
Stock based compensation expenses | (39,235 | ) | (34,107 | ) | ||||
Other unallocated expenses | (414 | ) | (2,219 | ) | ||||
Consolidated operating income | $ | 144,154 | $ | 50,864 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Solar segment profit | $ | 126,734 | $ | 104,919 | $ | 324,689 | $ | 283,408 | ||||||||
All other segment loss | (6,498 | ) | (9,683 | ) | (32,598 | ) | (34,955 | ) | ||||||||
Segments operating profit | 120,236 | 95,236 | 292,091 | 248,453 | ||||||||||||
Amounts not allocated to segments: | ||||||||||||||||
Stock based compensation expenses | (35,751 | ) | (26,185 | ) | (106,932 | ) | (73,390 | ) | ||||||||
Amortization related to business combinations | (2,559 | ) | (2,785 | ) | (8,039 | ) | (8,007 | ) | ||||||||
Impairment of goodwill and intangible assets | - | - | (4,008 | ) | - | |||||||||||
Disposal of assets related to Critical Power | - | - | (4,314 | ) | - | |||||||||||
Sale of Critical Power assets | 1,559 | - | 1,559 | - | ||||||||||||
Other unallocated income (expenses), net | 922 | 148 | 926 | (955 | ) | |||||||||||
Consolidated operating income | $ | 84,407 | $ | 66,414 | $ | 171,283 | $ | 166,101 |
November 3, 2022,April 6, 2023, the Company received notice thatcompleted the acquisition of all outstanding shares of Hark Systems Ltd. ("Hark"), a class action lawsuit was filedUK-based energy IoT company for the commercial and industrial ("C&I") sector for approximately USD 16.7 million in the U.S District Court of the Southern District of New York againstcash. Hark's platform is expected to enable the Company SolarEdge Technologies Ltd., the Company’s CEOto offer its commercial and the Company’s CFO, by a purported stockholderindustrial customers expanded capabilities in energy management and connectivity, including identification of the Company, alleging violationspotential energy savings, detection of the Federal Securities Actanomalies in connection with complaints filed against the Company by Ampt LLC, the details for which can be found under “Note 12- Commitmentsassets’ energy consumption, and Contingent Liabilities”. The Company believes the allegations contained in this new action are without meritoptimization of energy usage and intends to vigorously defend against them.carbon emissions through load orchestration and storage control.
F - 2823
• | future demand for renewable energy including solar energy solutions; |
• | changes to net metering policies or the reduction, elimination or expiration of government subsidies and economic incentives for on-grid solar energy applications; |
• | changes in the U.S. trade environment, including the imposition of import tariffs; |
• | federal, |
• | changes in tax laws, tax treaties, and regulations or the interpretation of them, including the Inflation Reduction Act; |
• | the retail price of electricity derived from the utility grid or alternative energy sources; |
• | interest rates and supply of capital in the global financial markets in general and in the solar market specifically; |
• | competition, including introductions of power optimizer, inverter and solar photovoltaic (“PV”) system monitoring products by our competitors; |
• | developments in alternative technologies or improvements in distributed solar energy generation; |
• | historic cyclicality of the solar industry and periodic downturns; |
• | product quality or performance problems in our products; |
• | our ability to forecast demand for our products accurately and to match production with demand; |
• | our dependence on ocean transportation to timely deliver our products in a cost-effective manner; |
• | our dependence upon a small number of outside contract manufacturers and limited or single source suppliers; |
• | capacity constraints, delivery schedules, manufacturing yields, and costs of our contract manufacturers and availability of components; |
• | delays, disruptions, and quality control problems in manufacturing; |
• | shortages, delays, price changes, or cessation of operations or production affecting our suppliers of key components; |
• | existing and future responses to and effects of Covid-19; |
• | business practices and regulatory compliance of our raw material suppliers; |
• | performance of distributors and large installers in selling our products; |
• | disruption in our global supply chain and rising prices of oil and raw materials as a result of the conflict between Russia and Ukraine may adversely affect our business; |
• | our customers’ financial stability, creditworthiness, and debt leverage ratio; |
• | our ability to retain key personnel and attract additional qualified personnel; |
• | our ability to effectively design, launch, market, and sell new generations of our products and services; |
• | our ability to maintain our brand and to protect and defend our intellectual property; |
• | our ability to retain, and events affecting, our major customers; |
• | our ability to manage effectively the growth of our organization and expansion into new markets; |
• | our ability to integrate acquired businesses; |
• | fluctuations in global currency exchange rates; |
• | unrest, terrorism, or armed conflict in Israel; |
• | macroeconomic conditions in our domestic and international markets, as well as inflation concerns, financial institutions instability, rising interest rates and recessionary concerns; |
• | consolidation in the solar industry among our customers and distributors; |
• | our ability to service our debt; and |
• | the other factors set forth under “Item 1A. Risk Factors” in our |
Three Months Ended September 30, 2022 | Nine Months Ended September 30, 2022 | Three months ended March 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2023 | 2022 | |||||||||||||||||||
Inverters shipped | 264,515 | 230,849 | 704,018 | 592,300 | 329,653 | 211,114 | ||||||||||||||||||
Power optimizers shipped | 6,123,479 | 4,699,443 | 17,062,684 | 13,445,523 | 6,440,683 | 5,724,131 | ||||||||||||||||||
Megawatts shipped1 | 2,703 | 1,903 | 7,349 | 5,237 | 3,608 | 2,130 | ||||||||||||||||||
Megawatts shipped - residential batteries | 321 | 11 | 671 | 11 | ||||||||||||||||||||
Megawatts hour shipped - residential batteries | 221 | 100 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
(In thousands) | ||||||||||||||||
Revenues | $ | 836,723 | $ | 526,404 | $ | 2,219,577 | $ | 1,411,950 | ||||||||
Cost of revenues | 614,722 | 353,843 | 1,635,976 | 943,123 | ||||||||||||
Gross profit | 222,001 | 172,561 | 583,601 | 468,827 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 69,659 | 55,666 | 210,855 | 155,307 | ||||||||||||
Sales and marketing | 42,726 | 29,383 | 117,017 | 85,752 | ||||||||||||
General and administrative | 27,933 | 21,098 | 82,483 | 60,317 | ||||||||||||
Other operating expenses (income), net | (2,724 | ) | — | 1,963 | 1,350 | |||||||||||
Total operating expenses | 137,594 | 106,147 | 412,318 | 302,726 | ||||||||||||
Operating income | 84,407 | 66,414 | 171,283 | 166,101 | ||||||||||||
Financial expense, net | (33,025 | ) | (5,751 | ) | (52,785 | ) | (13,591 | ) | ||||||||
Other income | 7,533 | — | 7,533 | — | ||||||||||||
Income before income taxes | 58,915 | 60,663 | 126,031 | 152,510 | ||||||||||||
Income taxes | 34,172 | 7,615 | 53,081 | 24,294 | ||||||||||||
Net income | 24,743 | 53,048 | 72,950 | 128,216 |
Three Months Ended March 31, | ||||||||
2023 | 2022 | |||||||
(In thousands) | ||||||||
Revenues | 943,889 | 655,080 | ||||||
Cost of revenues | 643,763 | 476,122 | ||||||
Gross profit | 300,126 | 178,958 | ||||||
Operating expenses: | ||||||||
Research and development | 79,873 | 66,349 | ||||||
Sales and marketing | 40,966 | 35,316 | ||||||
General and administrative | 36,567 | 26,429 | ||||||
Other operating income, net | (1,434 | ) | — | |||||
Total operating expenses | 155,972 | 128,094 | ||||||
Operating income | 144,154 | 50,864 | ||||||
Financial income (expense), net | 23,674 | (4,605 | ) | |||||
Other loss | (125 | ) | (844 | ) | ||||
Income before income taxes | 167,703 | 45,415 | ||||||
Income taxes | 29,325 | 12,292 | ||||||
Net income | 138,378 | 33,123 |
Three months ended September 30, 2022 to 2021 | Nine months ended September 30, 2022 to 2021 | |||||||||||||||||||||||||||||||
2022 | 2021 | Change | 2022 | 2021 | Change | |||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Revenues | 836,723 | 526,404 | 310,319 | 59.0 | % | 2,219,577 | 1,411,950 | 807,627 | 57.2 | % |
Three Months Ended March 31, | 2022 to 2023 | |||||||||||||||
2023 | 2022 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Revenues | 943,889 | 655,080 | 288,809 | 44.1 | % |
Three months ended September 30, 2022 to 2021 | Nine months ended September 30, 2022 to 2021 | Three Months Ended March 31, | 2022 to 2023 | |||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | Change | 2022 | 2021 | Change | 2023 | 2022 | Change | ||||||||||||||||||||||||||||||||||||||||
(In thousands) | (In thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Cost of revenues | 614,722 | 353,843 | 260,879 | 73.7 | % | 1,635,976 | 943,123 | 692,853 | 73.5 | % | 643,763 | 476,122 | 167,641 | 35.2 | % | |||||||||||||||||||||||||||||||||
Gross profit | 222,001 | 172,561 | 49,440 | 28.7 | % | 583,601 | 468,827 | 114,774 | 24.5 | % | 300,126 | 178,958 | 121,168 | 67.7 | % |
• | an increase in |
• | an increase in |
• | an increase of $10.0 million in inventory accrual which is mainly attributed to changes in inventory valuations, and higher inventory accruals related to our initial manufacturing in Sella 2; |
• | an increase in shipment and logistic costs in an aggregate amount of $5.5 million due to an increase in volumes shipped, which was partially offset by a decrease in air and expedited shipments and by a decrease in shipment rates; |
• | an increase in personnel-related costs of |
• | an increase in other production costs of $1.4 million, which is mainly attributed to ramp up costs associated with Sella 2. |
• | gradual price increases across our product offerings; |
• | a decline in the portion of air and expedited shipments, as well as a decrease in shipment rates; |
• | favorable exchange rates on our cost of revenues; |
• | decreased custom duties in the U.S. mainly attributed to a decrease in the portion of products manufactured in China; and |
• | continued cost reduction efforts. |
• | an increased portion of sales of commercial products out of our total product mix, that are characterized with lower gross margin ; |
• | unfavorable exchange rates on our sales outside of the U.S.; |
• | an increase in warranty expenses and warranty accruals associated primarily with the change in the composition of our install base, as well as an increase in costs related to the different components of our warranty expenses, as reflected in our actual support costs; and |
• | a negative impact on margin attributed to our non-solar businesses, that are characterized by a lower gross profit. |
Three months ended March 31, | 2022 to 2023 | |||||||||||||||
2023 | 2022 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Research and development | 79,873 | 66,349 | 13,524 | 20.4 | % |
• | an increase in |
Three months ended September 30, 2022 to 2021 | Nine months ended September 30, 2022 to 2021 | |||||||||||||||||||||||||||||||
2022 | 2021 | Change | 2022 | 2021 | Change | |||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Research and development | 69,659 | 55,666 | 13,993 | 25.1 | % | 210,855 | 155,307 | 55,548 | 35.8 | % |
• | an increase in expenses related to |
• | an increase |
Three months ended September 30, 2022 to 2021 | Nine months ended September 30, 2022 to 2021 | |||||||||||||||||||||||||||||||
2022 | 2021 | Change | 2022 | 2021 | Change | |||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Sales and marketing | 42,726 | 29,383 | 13,343 | 45.4 | % | 117,017 | 85,752 | 31,265 | 36.5 | % |
Three months ended March 31, | 2022 to 2023 | |||||||||||||||
2023 | 2022 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Sales and marketing | 40,966 | 35,316 | 5,650 | 16.0 | % |
• | an increase in personnel-related costs of |
• | an increase of $1.4 million in training-related expenses |
Three months ended March 31, | 2022 to 2023 | |||||||||||||||
2023 | 2022 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
General and administrative | 36,567 | 26,429 | 10,138 | 38.4 | % |
• |
• | an increase |
Three months ended September 30, 2022 to 2021 | Nine months ended September 30, 2022 to 2021 | |||||||||||||||||||||||||||||||
2022 | 2021 | Change | 2022 | 2021 | Change | |||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
General and administrative | 27,933 | 21,098 | 6,835 | 32.4 | % | 82,483 | 60,317 | 22,166 | 36.7 | % |
• | an increase in expenses related to an accrual for doubtful |
Three months ended March 31, | 2022 to 2023 | |||||||||||||||
2023 | 2022 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Other operating income, net | (1,434 | ) | — | (1,434 | ) | (100.0 | )% |
Three months ended September 30, 2022 to 2021 | Nine months ended September 30, 2022 to 2021 | |||||||||||||||||||||||||||||||
2022 | 2021 | Change | 2022 | 2021 | Change | |||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Other operating expenses (income), net | (2,724 | ) | — | (2,724 | ) | (100.0 | )% | 1,963 | 1,350 | 613 | 45.4 | % |
Three months ended March 31, | 2022 to 2023 | |||||||||||||||
2023 | 2022 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Financial income (expense), net | 23,674 | (4,605 | ) | 28,279 | (614.1 | )% |
• | an increase of |
• | an increase of |
Three months ended September 30, 2022 to 2021 | Nine months ended September 30, 2022 to 2021 | |||||||||||||||||||||||||||||||
2022 | 2021 | Change | 2022 | 2021 | Change | |||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Financial expense, net | (33,025 | ) | (5,751 | ) | (27,274 | ) | 474.2 | % | (52,785 | ) | (13,591 | ) | (39,194 | ) | 288.4 | % |
Three months ended March 31, | 2022 to 2023 | |||||||||||||||
2023 | 2022 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Other loss | (125 | ) | (844 | ) | 719 | (85.2 | )% |
Three months ended September 30, 2022 to 2021 | Nine months ended September 30, 2022 to 2021 | |||||||||||||||||||||||||||||||
2022 | 2021 | Change | 2022 | 2021 | Change | |||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Other income | 7,533 | — | 7,533 | 100.0 | % | 7,533 | — | 7,533 | 100.0 | % |
Three months ended September 30, 2022 to 2021 | Nine months ended September 30, 2022 to 2021 | |||||||||||||||||||||||||||||||
2022 | 2021 | Change | 2022 | 2021 | Change | |||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Income taxes | 34,172 | 7,615 | 26,557 | 348.7 | % | 53,081 | 24,294 | 28,787 | 118.5 | % |
Three months ended March 31, | 2022 to 2023 | |||||||||||||||
2023 | 2022 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Income taxes | 29,325 | 12,292 | 17,033 | 138.6 | % |
Three months ended September 30, 2022 to 2021 | Nine months ended September 30, 2022 to 2021 | |||||||||||||||||||||||||||||||
2022 | 2021 | Change | 2022 | 2021 | Change | |||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Net income | 24,743 | 53,048 | (28,305 | ) | (53.4 | )% | 72,950 | 128,216 | (55,266 | ) | (43.1 | )% |
Three months ended March 31, | 2022 to 2023 | |||||||||||||||
2023 | 2022 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Net income | 138,378 | 33,123 | 105,255 | 317.8 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | Three Months Ended March 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2023 | 2022 | |||||||||||||||||||
(In thousands) | (In thousands) | |||||||||||||||||||||||
Net cash provided by (used in) operating activities | 5,558 | 61,784 | (80,016 | ) | 124,552 | 7,923 | (162,989 | ) | ||||||||||||||||
Net cash used in investing activities | (54,581 | ) | (61,961 | ) | (380,514 | ) | (397,959 | ) | (67,780 | ) | (15,134 | ) | ||||||||||||
Net cash provided by (used in) financing activities | (1,271 | ) | 1,774 | 647,135 | (19,432 | ) | (5,222 | ) | 652,335 | |||||||||||||||
Increase (decrease) in cash and cash equivalents | (50,294 | ) | 1,597 | 186,605 | (292,839 | ) | (65,079 | ) | 474,212 |
Exhibit No. | Description | Incorporation by Reference | ||
Filed with this report. | ||||
Filed with this report. | ||||
Filed with this report. | ||||
Filed with this report. | ||||
101 | The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended | Filed with this report. | ||
104 | The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended | Included in Exhibit 101 |
Date: | ||
/s/Zvi Lando | ||
Zvi Lando | ||
Chief Executive Officer | ||
(Principal Executive |
Date: | ||
/s/ Ronen Faier | ||
Ronen Faier | ||
Chief Financial Officer | ||
(Principal Financial Officer) |