☒ | 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 MayAugust 1, 2023, there were 56,344,72756,557,816 shares of the registrant’s common stock, par value of $0.0001 per share, outstanding.
F-1 | |
F-1 | |
F-3 | |
F-4 | |
F-5 | |
3 | |
874,212 259,642 3,242,066 46,612 29,934 1,254,360 4,496,426 F - 1 408,523 243,881 900,042 15,232 1,245,590 (77,204 (73,109 882,215 2,350,794 4,496,426 F - 2 F - Other loss 29,325 138,378 2.46 2.35 The accompanying notes are an integral part of the condensed consolidated financial statements. F - March 31, 138,378 6,177 (331 (4,095 134,283 F - 5 *- *- *- F - The accompanying notes are an integral part of the condensed consolidated financial statements.
2022
June 30,
June 30, 23
March 31, ) (125 ) (844 )
June 30,
June 30, 34SOLAREDGE TECHNOLOGIES INC.CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)(in thousands, except per share data) ) ) ) ) The accompanying notes are an integral part of the condensed consolidated financial statements.F - 4EQUITY (Unaudited) 56
SOLAREDGE TECHNOLOGIES INC.
Three Months Ended March 31, | Six Months Ended June 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net income | $ | 138,378 | $ | 33,123 | $ | 257,888 | $ | 48,207 | ||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||||||||||
Depreciation and amortization | 13,464 | 11,660 | 26,725 | 24,138 | ||||||||||||
Loss (gain) from exchange rate fluctuations | (23,214 | ) | 20,398 | |||||||||||||
Stock-based compensation expenses | 39,235 | 34,107 | 78,200 | 71,181 | ||||||||||||
Impairment of goodwill and intangible assets | - | 4,008 | ||||||||||||||
Deferred income taxes, net | (3,930 | ) | (1,034 | ) | (7,636 | ) | (1,092 | ) | ||||||||
Loss (gain) from exchange rate fluctuations | (20,441 | ) | 1,725 | |||||||||||||
Other items | 2,810 | 4,167 | 4,783 | 11,396 | ||||||||||||
Changes in assets and liabilities: | ||||||||||||||||
Inventories, net | (141,521 | ) | (51,323 | ) | (246,193 | ) | (93,348 | ) | ||||||||
Prepaid expenses and other assets | (20,591 | ) | (17,163 | ) | (33,285 | ) | (79,215 | ) | ||||||||
Trade receivables, net | (55,002 | ) | (224,865 | ) | (235,086 | ) | (235,316 | ) | ||||||||
Trade payables, net | (50,410 | ) | (28,045 | ) | (22,304 | ) | (7,339 | ) | ||||||||
Employees and payroll accruals | 10,227 | 9,246 | 8,283 | 5,202 | ||||||||||||
Warranty obligations | 57,864 | 27,629 | 103,524 | 59,588 | ||||||||||||
Deferred revenues and customers advances | 9,325 | 15,029 | 17,222 | 32,277 | ||||||||||||
Accrued expenses and other liabilities, net | 28,515 | 22,755 | (9,695 | ) | 54,341 | |||||||||||
Net cash provided by (used in) operating activities | 7,923 | (162,989 | ) | |||||||||||||
Net cash used in operating activities | (80,788 | ) | (85,574 | ) | ||||||||||||
Cash flows from investing activities: | ||||||||||||||||
Investment in available-for-sale marketable securities | (124,138 | ) | (362,119 | ) | ||||||||||||
Proceed from sales and maturities of available-for-sale marketable securities | 11,597 | 53,096 | 86,813 | 126,287 | ||||||||||||
Purchase of property, plant and equipment | (38,338 | ) | (43,210 | ) | (84,075 | ) | (91,884 | ) | ||||||||
Investment in available-for-sale marketable securities | (38,979 | ) | (26,712 | ) | ||||||||||||
Investment in a privately-held company | (5,500 | ) | - | |||||||||||||
Business combinations, net of cash acquired | (16,653 | ) | - | |||||||||||||
Purchase of intangible assets | (10,000 | ) | - | |||||||||||||
Investment in privately-held companies | (6,750 | ) | - | |||||||||||||
Proceeds from governmental grant | 6,797 | - | ||||||||||||||
Other investing activities | 3,440 | 1,692 | 3,552 | 1,783 | ||||||||||||
Net cash used in investing activities | $ | (67,780 | ) | $ | (15,134 | ) | $ | (144,454 | ) | $ | (325,933 | ) |
F - 67
Three Months Ended March 31, | Six Months Ended June 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Cash flows from financing activities: | ||||||||||||||||
Tax withholding in connection with stock-based awards, net | $ | (8,811 | ) | $ | (2,318 | ) | ||||||||||
Payment of finance lease liability | (1,428 | ) | (1,374 | ) | ||||||||||||
Proceeds from secondary public offering, net of issuance costs | $ | - | $ | 650,526 | - | 650,526 | ||||||||||
Proceeds from exercise of stock-based awards | 75 | 1,478 | ||||||||||||||
Tax withholding in connection with stock-based awards, net | (4,541 | ) | 822 | |||||||||||||
Other financing activities | (756 | ) | (491 | ) | 98 | 1,572 | ||||||||||
Net cash provided by (used in) financing activities | (5,222 | ) | 652,335 | (10,141 | ) | 648,406 | ||||||||||
Increase (decrease) in cash and cash equivalents | (65,079 | ) | 474,212 | (235,383 | ) | 236,899 | ||||||||||
Cash and cash equivalents at the beginning of the period | 783,112 | 530,089 | 783,112 | 530,089 | ||||||||||||
Effect of exchange rate differences on cash and cash equivalents | 9,816 | (1,529 | ) | 10,015 | (21,454 | ) | ||||||||||
Cash and cash equivalents at the end of the period | $ | 727,849 | $ | 1,002,772 | $ | 557,744 | $ | 745,534 | ||||||||
Supplemental disclosure of non-cash activities: | ||||||||||||||||
Purchase of intangible assets and business combinations | $ | 11,245 | $ | - | ||||||||||||
Right-of-use asset recognized with a corresponding lease liability | $ | 11,258 | $ | 27,248 | $ | 12,063 | $ | 34,176 | ||||||||
Purchase of property, plant and equipment | $ | 12,304 | $ | 19,536 | $ | 16,300 | $ | 13,451 |
F - 78
(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 Energy Hub inverter which supports, among other things, connection to a DC-coupled battery for full or partial home backup, and optional connection to the Company's smart EV charger, (iii) a remote cloud-based monitoring platform, that collects and processes information from the power optimizers and inverters to enable customers and system owners, to monitor and manage the solar PV system (iv) a residential storage and backup solution which includes a company designed and manufactured lithium-ion DC-coupled battery that is used to increase energy independence and maximize self-consumption for homeowners including a battery, and (v) additional smart energy management solutions. |
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 - 9
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
e. | Concentrations of supply risks: |
f. | New accounting standards updates: |
F - 810
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
Pursuant to ASC 805, the Company accounted for the Hark acquisition as a business combination using the acquisition method of accounting. Identifiable assets and liabilities of Hark, including identifiable intangible assets, were recorded based on their estimated fair values as of the date of the closing of the acquisition. The excess of the purchase price over the fair value of the net assets acquired was recorded as goodwill. The Company recorded preliminary estimates for the fair value of assets acquired and liabilities assumed as of the acquisition date. Such preliminary valuation required estimates and assumptions including, but not limited to, estimating future cash flows and direct costs in addition to developing the appropriate discount rates and current market profit margins. The Company’s management believes the fair values recognized for the assets acquired and the liabilities assumed were based on reasonable estimates and assumptions.
Amount | Weighted Average Useful Life (In years) | |||||||
Cash | $ | 448 | ||||||
Net liabilities assumed | (1,837 | ) | ||||||
Identified intangible assets: | ||||||||
Current technology | 6,576 | 5 | ||||||
Customer relationships | 283 | 1 | ||||||
Trade name | 610 | 5 | ||||||
Goodwill | 12,266 | |||||||
Total | $ | 18,346 |
F - 11
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 | |||||||||||||
Available-for-sale – matures within one year: | ||||||||||||||||
Corporate bonds | $ | 390,012 | $ | 82 | $ | (8,595 | ) | $ | 381,499 | |||||||
Governmental bonds | 29,788 | - | (467 | ) | 29,321 | |||||||||||
419,800 | 82 | (9,062 | ) | 410,820 | ||||||||||||
Available-for-sale – matures after one year: | ||||||||||||||||
Corporate bonds | 515,425 | 698 | (15,855 | ) | 500,268 | |||||||||||
Governmental bonds | 9,251 | - | (392 | ) | 8,859 | |||||||||||
524,676 | 698 | (16,247 | ) | 509,127 | ||||||||||||
Total | $ | 944,476 | $ | 780 | $ | (25,309 | ) | $ | 919,947 |
Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | |||||||||||||
Matures within one year: | ||||||||||||||||
Corporate bonds | $ | 472,687 | $ | 424 | $ | (10,314 | ) | $ | 462,797 | |||||||
U.S. governmental bonds | 23,954 | - | (248 | ) | 23,706 | |||||||||||
Non - U.S. governmental bonds | 6,840 | - | (167 | ) | 6,673 | |||||||||||
503,481 | 424 | (10,729 | ) | 493,176 | ||||||||||||
Matures after one year: | ||||||||||||||||
Corporate bonds | 416,648 | 583 | (13,464 | ) | 403,767 | |||||||||||
U.S. governmental bonds | 27,842 | - | (313 | ) | 27,529 | |||||||||||
Non - U.S. governmental bonds | 4,742 | - | (238 | ) | 4,504 | |||||||||||
449,232 | 583 | (14,015 | ) | 435,800 | ||||||||||||
Total | $ | 952,713 | $ | 1,007 | $ | (24,744 | ) | $ | 928,976 |
Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | |||||||||||||
Available-for-sale – matures within one year: | ||||||||||||||||
Corporate bonds | $ | 222,482 | $ | - | $ | (4,657 | ) | $ | 217,825 | |||||||
Governmental bonds | 23,845 | - | (553 | ) | 23,292 | |||||||||||
246,327 | - | (5,210 | ) | 241,117 | ||||||||||||
Available-for-sale – matures after one year: | ||||||||||||||||
Corporate bonds | 657,238 | 80 | (26,460 | ) | 630,858 | |||||||||||
Governmental bonds | 15,250 | - | (617 | ) | 14,633 | |||||||||||
672,488 | 80 | (27,077 | ) | 645,491 | ||||||||||||
Total | $ | 918,815 | $ | 80 | $ | (32,287 | ) | $ | 886,608 |
Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | |||||||||||||
Matures within one year: | ||||||||||||||||
Corporate bonds | $ | 222,482 | $ | - | $ | (4,657 | ) | $ | 217,825 | |||||||
U.S. governmental bonds | 15,963 | - | (284 | ) | 15,679 | |||||||||||
Non - U.S. governmental bonds | 7,882 | - | (269 | ) | 7,613 | |||||||||||
246,327 | - | (5,210 | ) | 241,117 | ||||||||||||
Matures after one year: | ||||||||||||||||
Corporate bonds | 657,238 | 80 | (26,460 | ) | 630,858 | |||||||||||
U.S. governmental bonds | 9,939 | - | (261 | ) | 9,678 | |||||||||||
Non - U.S. governmental bonds | 5,311 | - | (356 | ) | 4,955 | |||||||||||
672,488 | 80 | (27,077 | ) | 645,491 | ||||||||||||
Total | $ | 918,815 | $ | 80 | $ | (32,287 | ) | $ | 886,608 |
F - 912
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
March 31, 2023 | December 31, 2022 | |||||||
Raw materials | $ | 503,445 | $ | 503,257 | ||||
Work in process | 37,754 | 23,407 | ||||||
Finished goods | 333,013 | 202,537 | ||||||
Total inventories, net | $ | 874,212 | $ | 729,201 |
June 30, 2023 | December 31, 2022 | |||||||
Raw materials | $ | 461,453 | $ | 503,257 | ||||
Work in process | 35,348 | 23,407 | ||||||
Finished goods | 487,393 | 202,537 | ||||||
Total inventories, net | $ | 984,194 | $ | 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 |
June 30, 2023 | December 31, 2022 | |||||||
Vendor non-trade receivables (*) | $ | 141,810 | $ | 147,597 | ||||
Government authorities | 78,963 | 55,670 | ||||||
Prepaid expenses and other | 43,415 | 37,815 | ||||||
Total prepaid expenses and other current assets | $ | 264,188 | $ | 241,082 |
F - 1013
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
NOTE 6: INTANGIBLE ASSETS, NET
Acquired intangible assets consisted of the following as of June 30, 2023, and December 31, 2022:
June 30, 2023 | December 31, 2022 | |||||||
Intangible assets with finite lives: | ||||||||
Current Technology | $ | 34,879 | $ | 29,196 | ||||
Customer relationships | 3,138 | 2,958 | ||||||
Trade names | 3,769 | 3,287 | ||||||
Assembled workforce | 3,575 | 3,575 | ||||||
Patents and licenses* | 21,400 | 1,400 | ||||||
Gross intangible assets | 66,761 | 40,416 | ||||||
Less - accumulated amortization | (23,105 | ) | (20,487 | ) | ||||
Total intangible assets, net | $ | 43,656 | $ | 19,929 |
* See Note 16
2023 | $ | 4,666 | ||
2024 | 8,627 | |||
2025 | 7,698 | |||
2026 | 7,269 | |||
2027 | 4,002 | |||
2028 and thereafter | 11,394 | |||
$ | 43,656 |
F - 14
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
NOTE 5: 7: GOODWILL
Changes in the carrying amount of goodwill for the period ended June 30, 2023 were as follows:
Solar | All other | Total | ||||||||||
Goodwill at December 31, 2022 | $ | 28,768 | $ | 2,421 | $ | 31,189 | ||||||
Changes during the year: | ||||||||||||
Acquisitions | - | 12,266 | 12,266 | |||||||||
Foreign currency adjustments | (1,194 | ) | 71 | (1,123 | ) | |||||||
Goodwill at June 30, 2023 | $ | 27,574 | $ | 14,758 | $ | 42,332 |
F - 15
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
June 30, 2023 | December 31, 2022 | |||||||
Severance pay fund | $ | 7,479 | $ | 8,799 | ||||
Cloud computing arrangements | 8,236 | 3,457 | ||||||
Investments in privately held companies | 8,536 | 1,863 | ||||||
Prepayments | 3,285 | 2,961 | ||||||
Other | 1,236 | 1,726 | ||||||
Total other long term assets | $ | 28,772 | $ | 18,806 |
F - 16
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
Balance sheet location | March 31, 2023 | December 31, 2022 | Balance sheet location | June 30, 2023 | December 31, 2022 | |||||||||||||
Derivative assets of options and forward contracts: | ||||||||||||||||||
Designated cash flow hedges | Prepaid expenses and other current assets | $ | 353 | $ | - | |||||||||||||
Derivative liabilities of options and forward contracts: | ||||||||||||||||||
Designated cash flow hedges | Accrued expenses and other current liabilities | $ | (2,583 | ) | $ | (1,874 | ) | Accrued expenses and other current liabilities | $ | (1,893 | ) | $ | (1,874 | ) |
Three Months Ended March 31, | |||||||||
Affected line item | 2023 | 2022 | |||||||
Foreign exchange contracts | |||||||||
Non Designated Hedging Instruments | Condensed Consolidated Statements of Income - Financial income (expense), net | $ | - | $ | 934 | ||||
Designated Hedging Instruments | Condensed Consolidated Statements of Comprehensive Income - Cash flow hedges | $ | (2,057 | ) | $ | (1,178 | ) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
Affected line item | 2023 | 2022 | 2023 | 2022 | |||||||||||||
Foreign exchange contracts | |||||||||||||||||
Non Designated Hedging Instruments | Condensed Consolidated Statements of Income - Financial income (expense), net | $ | - | $ | 3,009 | $ | - | $ | 3,943 | ||||||||
Designated Hedging Instruments | Condensed Consolidated Statements of Comprehensive Income - Cash flow hedges | $ | (2,091 | ) | $ | (6,351 | ) | $ | (4,148 | ) | $ | (7,529 | ) |
F - 1117
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
Fair Value Hierarchy | Fair value measurements as of | |||||||||
Description | March 31, 2023 | December 31, 2022 | ||||||||
Assets: | ||||||||||
Cash and cash equivalents: | ||||||||||
Cash | Level 1 | $ | 667,384 | $ | 695,004 | |||||
Money market mutual funds | Level 1 | $ | 17,486 | $ | 25,149 | |||||
Deposits | Level 1 | $ | 42,979 | $ | 62,959 | |||||
Derivative instruments | Level 2 | $ | 353 | $ | - | |||||
Short-term marketable securities: | ||||||||||
Corporate bonds | Level 2 | $ | 381,499 | $ | 217,825 | |||||
Governmental bonds | Level 2 | $ | 29,321 | $ | 23,292 | |||||
Long-term marketable securities: | ||||||||||
Corporate bonds | Level 2 | $ | 500,268 | $ | 630,858 | |||||
Governmental bonds | Level 2 | $ | 8,859 | $ | 14,633 | |||||
Liabilities: | ||||||||||
Derivative instruments | Level 2 | $ | (2,583 | ) | $ | (1,874 | ) |
Fair value measurements as of | ||||||||||
Description | Fair Value Hierarchy | June 30, 2023 | December 31, 2022 | |||||||
Assets: | ||||||||||
Cash and cash equivalents: | ||||||||||
Cash | Level 1 | $ | 525,804 | $ | 695,004 | |||||
Money market mutual funds | Level 1 | $ | 5,772 | $ | 25,149 | |||||
Deposits | Level 1 | $ | 26,168 | $ | 62,959 | |||||
Short-term marketable securities: | ||||||||||
Corporate bonds | Level 2 | $ | 462,797 | $ | 217,825 | |||||
U.S. governmental bonds | Level 2 | $ | 23,706 | $ | 15,679 | |||||
Non - U.S. governmental bonds | Level 2 | $ | 6,673 | $ | 7,613 | |||||
Long-term marketable securities: | ||||||||||
Corporate bonds | Level 2 | $ | 403,767 | $ | 630,858 | |||||
U.S. governmental bonds | Level 2 | $ | 27,529 | $ | 9,678 | |||||
Non - U.S. governmental bonds | Level 2 | $ | 4,504 | $ | 4,955 | |||||
Liabilities: | ||||||||||
Derivative instruments | Level 2 | $ | (1,893 | ) | $ | (1,874 | ) |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Balance, at the beginning of the period | $ | 442,971 | $ | 292,666 | $ | 385,057 | $ | 265,160 | ||||||||
Additions and adjustments to cost of revenues | 89,631 | 59,061 | 181,201 | 106,968 | ||||||||||||
Usage and current warranty expenses | (44,015 | ) | (27,551 | ) | (77,671 | ) | (47,952 | ) | ||||||||
Balance, at end of the period | 488,587 | 324,176 | 488,587 | 324,176 | ||||||||||||
Less current portion | (146,150 | ) | (91,761 | ) | (146,150 | ) | (91,761 | ) | ||||||||
Long term portion | $ | 342,437 | $ | 232,415 | $ | 342,437 | $ | 232,415 |
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 - 1218
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
Three Months Ended March 31, | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Balance, at the beginning of the period | $ | 213,577 | $ | 169,345 | $ | 224,424 | $ | 184,245 | $ | 213,577 | $ | 169,345 | ||||||||||||
Revenue recognized | (11,742 | ) | (14,529 | ) | (19,000 | ) | (10,595 | ) | (21,990 | ) | (17,560 | ) | ||||||||||||
Increase in deferred revenues and customer advances | 22,589 | 29,429 | 27,404 | 27,045 | 41,241 | 48,910 | ||||||||||||||||||
Balance, at the end of the period | 224,424 | 184,245 | 232,828 | 200,695 | 232,828 | 200,695 | ||||||||||||||||||
Less current portion | (27,507 | ) | (25,511 | ) | (28,135 | ) | (30,460 | ) | (28,135 | ) | (30,460 | ) | ||||||||||||
Long term portion | $ | 196,917 | $ | 158,734 | $ | 204,693 | $ | 170,235 | $ | 204,693 | $ | 170,235 |
2023 | $ | 23,888 | ||
2024 | 12,073 | |||
2025 | 10,764 | |||
2026 | 10,389 | |||
2027 | 8,363 | |||
Thereafter | 158,947 | |||
Total deferred revenues | $ | 224,424 |
2023 | $ | 21,700 | ||
2024 | 12,038 | |||
2025 | 10,880 | |||
2026 | 10,649 | |||
2027 | 8,668 | |||
Thereafter | 168,893 | |||
Total deferred revenues | $ | 232,828 |
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 |
June 30, 2023 | December 31, 2022 | |||||||
Accrued expenses | $ | 107,902 | $ | 117,638 | ||||
Government authorities | 76,995 | 67,514 | ||||||
Operating lease liabilities | 16,738 | 16,183 | ||||||
Accrual for sales incentives | 5,439 | 6,790 | ||||||
Finance lease | 3,123 | 3,263 | ||||||
Other | 3,936 | 2,724 | ||||||
Total accrued expenses and other current liabilities | $ | 214,133 | $ | 214,112 |
F - 1319
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 March 31,June 30, 2023 and December 31, 20222022::
March 31, 2023 | December 31, 2022 | June 30, 2023 | December 31, 2022 | |||||||||||||
Liability: | ||||||||||||||||
Principal | $ | 632,500 | $ | 632,500 | $ | 632,500 | $ | 632,500 | ||||||||
Unamortized issuance costs | (7,318 | ) | (8,049 | ) | (6,586 | ) | (8,049 | ) | ||||||||
Net carrying amount | $ | 625,182 | $ | 624,451 | $ | 625,914 | $ | 624,451 |
F - 1420
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.
F - 1521
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, 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 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 | (6,748 | ) | 24.34 | - | 1,900 | |||||||||||
Outstanding as of June 30, 2023 | 332,281 | $ | 51.18 | 4.39 | $ | 73,219 | ||||||||||
Vested and expected to vest as of June 30, 2023 | 331,930 | $ | 51.03 | 4.39 | $ | 73,186 | ||||||||||
Exercisable as of June 30, 2023 | 312,950 | $ | 42.34 | 4.23 | $ | 71,413 |
Number of RSUs | Weighted average grant date fair value | Number of RSUs | Weighted average grant date fair value | |||||||||||||
Unvested as of December 31, 2022 | 1,488,515 | $ | 232.05 | 1,488,515 | $ | 232.05 | ||||||||||
Granted | 103,081 | 296.64 | 193,199 | 287.80 | ||||||||||||
Vested | (197,866 | ) | 164.31 | (366,445 | ) | 184.37 | ||||||||||
Forfeited | (31,296 | ) | 254.24 | (50,100 | ) | 257.92 | ||||||||||
Unvested as of March 31, 2023 | 1,362,434 | $ | 246.27 | |||||||||||||
Unvested as of June 30, 2023 | 1,265,169 | $ | 278.79 |
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 |
Number of PSUs | Weighted average grant date fair value | |||||||
Unvested as of December 31, 2022 | 149,232 | $ | 295.88 | |||||
Granted | 32,348 | 314.22 | ||||||
Vested | (8,249 | ) | 270.93 | |||||
Unvested as of June 30, 2023 | 173,331 | $ | 114.79 |
F - 1622
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
e. | Stock-based compensation expenses: |
Three Months Ended March 31, | ||||||||
2023 | 2022 | |||||||
Cost of revenues | $ | 5,927 | $ | 5,062 | ||||
Research and development | 17,209 | 14,985 | ||||||
Selling and marketing | 8,079 | 6,701 | ||||||
General and administrative | 8,020 | 7,359 | ||||||
Total stock-based compensation expenses | $ | 39,235 | $ | 34,107 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Stock-based compensation expenses: | ||||||||||||||||
Cost of revenues | $ | 5,923 | $ | 5,286 | $ | 11,850 | $ | 10,348 | ||||||||
Research and development | 17,272 | 16,819 | 34,481 | 31,804 | ||||||||||||
Selling and marketing | 7,822 | 7,047 | 15,901 | 13,748 | ||||||||||||
General and administrative | 7,948 | 7,922 | 15,968 | 15,281 | ||||||||||||
Total stock-based compensation expenses | $ | 38,965 | $ | 37,074 | $ | 78,200 | $ | 71,181 | ||||||||
Stock-based compensation capitalized: | ||||||||||||||||
Inventory | $ | 606 | $ | - | $ | 1,011 | $ | - | ||||||||
Other long-term assets | 407 | 97 | 837 | 97 | ||||||||||||
Total stock-based compensation capitalized | $ | 1,013 | $ | 97 | $ | 1,848 | $ | 97 |
F - 1723
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
12: 16:COMMITMENTS AND CONTINGENT LIABILITIESMarch 31,June 30, 2023,, contingent liabilities exist regarding guarantees in the amounts of $5,876,$5,937, and $1,899$1,875 in respect of office rent lease agreements and customs and other transactions, respectively.March 31,June 30, 2023,, the Company had non-cancelable purchase obligations totaling approximately $1,617,376,$1,443,251, out of which the Company recorded a provision for loss in the amount of $8,052.$8,818.March 31,June 30, 2023,, the Company had contractual obligations for capital expenditures totaling approximately $121,347.$132,988. These commitments reflect purchases of automated assembly lines and other machinery related to the Company’s general manufacturing process and mainly to its plans to establish manufacturing capabilities in the United States.allegesalleged that SolarEdge's 12.5kW - 27.6kW inverters infringed on two of the plaintiff’s patents. SMA asserted a value in dispute of EUR 5.5 million (approximately $5,983)$5,973) for both patents. The Company challenged the validity of both patents and the first patent was invalidated and SMA’s appeal on the matter was denied in January 2023. In August 2021, the German Patent Court rendered SMA's second patent invalid, and this invalidity has been appealed by SMA. In May 2023 the Federal Supreme Court as final instance in the nullity proceedings revoked the second patent, and SMA and a hearing is pending. The Company believes that it has meritorious defenses to these claims and intends to vigorously defend against the remaining lawsuit.withdrew its infringement complaint.wasand its subsidiary SolarEdge Technologies Ltd were served with complaints filed by Ampt LLC ("Ampt") in the International Trade Commission (the “Commission”) pursuant to Section 337 of the Tariff Act of 1930, as amended, and related lawsuits in the District Court for the District of Delaware alleging patent infringement against the Company. On May 9, 2023, Ampt and the Company and its subsidiary SolarEdge Technologies Ltd. On October 24, 2022,entered into a settlement agreement pursuant to which the complaint filed in the District Court of Delaware was administratively stayed until the Commission's action is resolved. The Company believes that it has meritorious defensesparties agreed to dismiss all proceedings related to the complaints, and intend to vigorously defend against them.the parties have granted each other 10-year cross-licenses for certain intellectual property.March 31,June 30, 2023,, an immaterial amount for legal claims was recorded in accrued expenses and other current liabilities.
F - 1824
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
Three Months Ended March 31, | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Unrealized gains (losses) on available-for-sale marketable securities | ||||||||||||||||||||||||
Beginning balance | $ | (25,449 | ) | $ | (4,709 | ) | $ | (19,272 | ) | $ | (14,215 | ) | $ | (25,449 | ) | $ | (4,709 | ) | ||||||
Revaluation | 7,570 | (12,721 | ) | 793 | (5,919 | ) | 8,363 | (18,640 | ) | |||||||||||||||
Tax on revaluation | (1,471 | ) | 2,471 | (132 | ) | 1,357 | (1,603 | ) | 3,828 | |||||||||||||||
Other comprehensive income (loss) before reclassifications | 6,099 | (10,250 | ) | 661 | (4,562 | ) | 6,760 | 14,812 | ||||||||||||||||
Reclassification | 107 | 844 | - | - | 107 | 844 | ||||||||||||||||||
Tax on reclassification | (29 | ) | (100 | ) | - | - | (29 | ) | (100 | ) | ||||||||||||||
Losses reclassified from accumulated other comprehensive income | 78 | 744 | ||||||||||||||||||||||
Losses reclassified from accumulated other comprehensive income (loss) | - | - | 78 | 744 | ||||||||||||||||||||
Net current period other comprehensive income (loss) | 6,177 | (9,506 | ) | 661 | (4,562 | ) | 6,838 | (14,068 | ) | |||||||||||||||
Ending balance | $ | (19,272 | ) | $ | (14,215 | ) | $ | (18,611 | ) | $ | (18,777 | ) | $ | (18,611 | ) | $ | (18,777 | ) | ||||||
Unrealized gains (losses) on cash flow hedges | ||||||||||||||||||||||||
Beginning balance | $ | (1,761 | ) | $ | 874 | $ | (2,092 | ) | $ | 194 | $ | (1,761 | ) | $ | 874 | |||||||||
Revaluation | (2,196 | ) | (1,337 | ) | (2,229 | ) | (7,188 | ) | (4,425 | ) | (8,525 | ) | ||||||||||||
Tax on revaluation | 139 | 159 | 138 | 837 | 277 | 996 | ||||||||||||||||||
Other comprehensive loss before reclassifications | (2,057 | ) | (1,178 | ) | ||||||||||||||||||||
Other comprehensive income (loss) before reclassifications | (2,091 | ) | (6,351 | ) | (4,148 | ) | (7,529 | ) | ||||||||||||||||
Reclassification | 1,840 | 565 | 2,566 | 2,846 | 4,406 | 3,411 | ||||||||||||||||||
Tax on reclassification | (114 | ) | (67 | ) | (159 | ) | (331 | ) | (273 | ) | (398 | ) | ||||||||||||
Losses reclassified from accumulated other comprehensive loss | 1,726 | 498 | ||||||||||||||||||||||
Net current period other comprehensive loss | (331 | ) | (680 | ) | ||||||||||||||||||||
Losses reclassified from accumulated other comprehensive income (loss) | 2,407 | 2,515 | 4,133 | 3,013 | ||||||||||||||||||||
Net current period other comprehensive income (loss) | 316 | (3,836 | ) | (15 | ) | (4,516 | ) | |||||||||||||||||
Ending balance | $ | (2,092 | ) | $ | 194 | $ | (1,776 | ) | $ | (3,642 | ) | $ | (1,776 | ) | $ | (3,642 | ) | |||||||
Foreign currency translation adjustments on intra-entity transactions that are of a long-term investment in nature | ||||||||||||||||||||||||
Beginning balance | $ | (37,960 | ) | $ | (17,420 | ) | $ | (48,760 | ) | $ | (24,403 | ) | $ | (37,960 | ) | $ | (17,420 | ) | ||||||
Revaluation | (10,800 | ) | (6,983 | ) | (1,935 | ) | (28,347 | ) | (12,735 | ) | (35,330 | ) | ||||||||||||
Ending balance | $ | (48,760 | ) | $ | (24,403 | ) | $ | (50,695 | ) | $ | (52,750 | ) | $ | (50,695 | ) | $ | (52,750 | ) | ||||||
Unrealized gains (losses) on foreign currency translation | ||||||||||||||||||||||||
Beginning balance | $ | (7,939 | ) | $ | (6,064 | ) | $ | (7,080 | ) | $ | (7,643 | ) | $ | (7,939 | ) | $ | (6,064 | ) | ||||||
Revaluation | 859 | (1,579 | ) | 730 | (6,808 | ) | 1,589 | (8,387 | ) | |||||||||||||||
Ending balance | $ | (7,080 | ) | $ | (7,643 | ) | $ | (6,350 | ) | $ | (14,451 | ) | $ | (6,350 | ) | $ | (14,451 | ) | ||||||
Total | $ | (77,204 | ) | $ | (46,067 | ) | $ | (77,432 | ) | $ | (89,620 | ) | $ | (77,432 | ) | $ | (89,620 | ) |
F - 1925
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
The following table summarizes the
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) |
Details about Accumulated Other Comprehensive Loss Components | Three Months Ended June 30, | Six Months Ended June 30, | Affected Line Item in the Statement of Income | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||
Unrealized gains (losses) on available-for-sale marketable securities | |||||||||||||||||
$ | - | $ | - | $ | (107 | ) | $ | (844 | ) | Financial income (expense), net | |||||||
- | - | 29 | 100 | Income taxes | |||||||||||||
$ | - | $ | - | $ | (78 | ) | $ | (744 | ) | Total, net of income taxes | |||||||
Unrealized gains (losses) on cash flow hedges, net | |||||||||||||||||
(303 | ) | (318 | ) | (515 | ) | (385 | ) | Cost of revenues | |||||||||
(1,521 | ) | (1,694 | ) | (2,650 | ) | (2,032 | ) | Research and development | |||||||||
(310 | ) | (349 | ) | (535 | ) | (420 | ) | Sales and marketing | |||||||||
(432 | ) | (485 | ) | (706 | ) | (574 | ) | General and administrative | |||||||||
$ | (2,566 | ) | $ | (2,846 | ) | $ | (4,406 | ) | $ | (3,411 | ) | Total, before income taxes | |||||
159 | 331 | 273 | 398 | Income taxes | |||||||||||||
(2,407 | ) | (2,515 | ) | (4,133 | ) | (3,013 | ) | Total, net of income taxes | |||||||||
Total reclassifications for the period | $ | (2,407 | ) | $ | (2,515 | ) | $ | (4,211 | ) | $ | (3,757 | ) |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Impairment of goodwill and intangible assets | $ | - | $ | 4,008 | $ | - | $ | 4,008 | ||||||||
Sale of assets | - | - | (1,434 | ) | - | |||||||||||
Write-off of property, plant and equipment | - | 679 | - | 679 | ||||||||||||
Total other operating expense (income), net | $ | - | $ | 4,687 | $ | (1,434 | ) | $ | 4,687 |
F - 26
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
F - 2027
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
Three Months Ended March 31, | ||||||||
2023 | 2022 | |||||||
Basic EPS: | ||||||||
Numerator: | ||||||||
Net income | $ | 138,378 | $ | 33,123 | ||||
Denominator: | ||||||||
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 | $ | 138,378 | $ | 33,123 | ||||
Notes due 2025 | 552 | 553 | ||||||
Net income attributable to common stock, diluted | $ | 138,930 | $ | 33,676 | ||||
Denominator: | ||||||||
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 | ||||||
Effect of stock-based awards | 701,523 | 903,438 | ||||||
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 | 192,339 | 223,776 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Basic EPS: | ||||||||||||||||
Numerator: | ||||||||||||||||
Net income | $ | 119,510 | $ | 15,084 | $ | 257,888 | $ | 48,207 | ||||||||
Denominator: | ||||||||||||||||
Shares used in computing net EPS of common stock, basic | 56,415,636 | 55,470,279 | 56,316,116 | 54,309,060 | ||||||||||||
Diluted EPS: | ||||||||||||||||
Numerator: | ||||||||||||||||
Net income attributable to common stock, basic | $ | 119,510 | $ | 15,084 | $ | 257,888 | $ | 48,207 | ||||||||
Notes due 2025 | 536 | 551 | 1,072 | 1,100 | ||||||||||||
Net income attributable to common stock, diluted | $ | 120,046 | $ | 15,635 | $ | 258,960 | $ | 49,307 | ||||||||
Denominator: | ||||||||||||||||
Shares used in computing net EPS of common stock, basic | 56,415,636 | 55,470,279 | 56,316,116 | 54,309,060 | ||||||||||||
Notes due 2025 | 2,276,818 | 2,276,818 | 2,276,818 | 2,276,818 | ||||||||||||
Effect of stock-based awards | 491,212 | 817,637 | 596,368 | 860,538 | ||||||||||||
Shares used in computing net EPS of common stock, diluted | 59,183,666 | 58,564,734 | 59,189,302 | 57,446,416 | ||||||||||||
Earnings per share: | ||||||||||||||||
Basic | $ | 2.12 | $ | 0.27 | $ | 4.58 | $ | 0.89 | ||||||||
Diluted | $ | 2.03 | $ | 0.26 | $ | 4.38 | $ | 0.86 | ||||||||
Shares excluded from the calculation of diluted net EPS due to their anti-dilutive effect | 491,212 | 182,715 | 596,368 | 203,246 |
F - 2128
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
Three Months Ended June 30, 2023 | Six Months Ended June 30, 2023 | |||||||||||||||
Solar | All other | Solar | All other | |||||||||||||
Revenues | $ | 947,360 | $ | 43,728 | $ | 1,855,865 | $ | 78,925 | ||||||||
Cost of revenues | 618,943 | 47,931 | 1,209,048 | 94,147 | ||||||||||||
Gross profit (loss) | 328,417 | (4,203 | ) | 646,817 | (15,222 | ) | ||||||||||
Research and development | 62,102 | 6,863 | 117,925 | 13,391 | ||||||||||||
Sales and marketing | 34,136 | 2,029 | 65,281 | 3,590 | ||||||||||||
General and administrative | 25,145 | 2,988 | 49,888 | 6,766 | ||||||||||||
Segments profit (loss) | $ | 207,034 | $ | (16,083 | ) | $ | 413,723 | $ | (38,969 | ) |
F - 2229
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 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 June 30, 2022 | Six Months Ended June 30, 2022 | |||||||||||||||
Solar | All other | Solar | All other | |||||||||||||
Revenues | $ | 687,599 | $ | 40,029 | $ | 1,295,596 | $ | 86,977 | ||||||||
Cost of revenues | 494,400 | 38,948 | 918,900 | 83,289 | ||||||||||||
Gross profit | 193,199 | 1,081 | 376,696 | 3,688 | ||||||||||||
Research and development | 49,141 | 8,587 | 92,272 | 16,517 | ||||||||||||
Sales and marketing | 28,419 | 3,283 | 54,224 | 5,857 | ||||||||||||
General and administrative | 16,396 | 3,789 | 32,245 | 7,414 | ||||||||||||
Segments profit (loss) | $ | 99,243 | $ | (14,578 | ) | $ | 197,955 | $ | (26,100 | ) |
Three Months Ended March 31, | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Solar revenues | $ | 908,505 | $ | 607,997 | $ | 947,360 | $ | 687,599 | $ | 1,855,865 | $ | 1,295,596 | ||||||||||||
All other segment revenues | 35,197 | 46,948 | ||||||||||||||||||||||
Revenues from financing component | 187 | 135 | ||||||||||||||||||||||
All other revenues | 43,728 | 40,029 | 78,925 | 86,977 | ||||||||||||||||||||
Revenues from finance component | 202 | 146 | 389 | 281 | ||||||||||||||||||||
Consolidated revenues | $ | 943,889 | $ | 655,080 | $ | 991,290 | $ | 727,774 | $ | 1,935,179 | $ | 1,382,854 |
Three Months Ended March 31, | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Solar segment profit | $ | 206,689 | $ | 98,712 | $ | 207,034 | $ | 99,243 | $ | 413,723 | $ | 197,955 | ||||||||||||
All other segment loss | (22,886 | ) | (11,522 | ) | (16,083 | ) | (14,578 | ) | (38,969 | ) | (26,100 | ) | ||||||||||||
Segments operating profit | 183,803 | 87,190 | 190,951 | 84,665 | 374,754 | 171,855 | ||||||||||||||||||
Amounts not allocated to segments: | ||||||||||||||||||||||||
Stock based compensation expenses | (39,235 | ) | (34,107 | ) | (38,965 | ) | (37,074 | ) | (78,200 | ) | (71,181 | ) | ||||||||||||
Other unallocated expenses | (414 | ) | (2,219 | ) | ||||||||||||||||||||
Impairment of goodwill and intangible assets | - | (4,008 | ) | - | (4,008 | ) | ||||||||||||||||||
Disposal of assets related to Critical Power | - | (4,314 | ) | - | (4,314 | ) | ||||||||||||||||||
Other unallocated expenses, net | (1,628 | ) | (3,257 | ) | (2,042 | ) | (5,476 | ) | ||||||||||||||||
Consolidated operating income | $ | 144,154 | $ | 50,864 | $ | 150,358 | $ | 36,012 | $ | 294,512 | $ | 86,876 |
F - 23
• | 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, state, and local regulations governing the electric utility industry with respect to solar energy; |
• | 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 |
• | 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; |
• |
• | 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, recessionary concerns, the prospect of a shutdown of the U.S. federal government and |
• | consolidation in the solar industry among our customers and distributors; |
• | our ability to service our debt; |
• | any unauthorized access to, disclosure, or theft of personal information or unauthorized access to our network or other similar cyber incidents; |
• | the impact of evolving legal and regulatory requirements, including emerging environmental, social and governance requirements; and |
• | the other factors set forth under “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022 and subsequent reports on Form 10-Q and in other documents we file from time to time with the SEC that disclose risks and uncertainties that may affect our business. |
Three months ended March 31, | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2023 | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Inverters shipped | 329,653 | 211,114 | 334,635 | 228,389 | 664,288 | 439,503 | ||||||||||||||||||
Power optimizers shipped | 6,440,683 | 5,724,131 | 5,531,373 | 5,215,074 | 11,972,056 | 10,939,205 | ||||||||||||||||||
Megawatts shipped1 | 3,608 | 2,130 | 4,324 | 2,516 | 7,933 | 4,646 | ||||||||||||||||||
Megawatts hour shipped - residential batteries | 221 | 100 | ||||||||||||||||||||||
Megawatts shipped - residential batteries | 269 | 251 | 490 | 350 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
(In thousands) | ||||||||||||||||
Revenues | $ | 991,290 | $ | 727,774 | $ | 1,935,179 | $ | 1,382,854 | ||||||||
Cost of revenues | 673,985 | 545,132 | 1,317,748 | 1,021,254 | ||||||||||||
Gross profit | 317,305 | 182,642 | 617,431 | 361,600 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 86,526 | 74,847 | 166,399 | 141,196 | ||||||||||||
Sales and marketing | 44,222 | 38,975 | 85,188 | 74,291 | ||||||||||||
General and administrative | 36,199 | 28,121 | 72,766 | 54,550 | ||||||||||||
Other operating expense (income), net | - | 4,687 | (1,434 | ) | 4,687 | |||||||||||
Total operating expenses | 166,947 | 146,630 | 322,919 | 274,724 | ||||||||||||
Operating income | 150,358 | 36,012 | 294,512 | 86,876 | ||||||||||||
Financial income (expense), net | 3,384 | (14,311 | ) | 27,058 | (18,916 | ) | ||||||||||
Other loss | - | - | (125 | ) | (844 | ) | ||||||||||
Income before income taxes | 153,742 | 21,701 | 321,445 | 67,116 | ||||||||||||
Income taxes | 34,232 | 6,617 | 63,557 | 18,909 | ||||||||||||
Net income | $ | 119,510 | $ | 15,084 | $ | 257,888 | $ | 48,207 |
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 March 31, | 2022 to 2023 | |||||||||||||||
2023 | 2022 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Revenues | 943,889 | 655,080 | 288,809 | 44.1 | % |
Three months ended June 30, 2023 to 2022 | Six months ended June 30, 2023 to 2022 | |||||||||||||||||||||||||||||||
2023 | 2022 | Change | 2023 | 2022 | Change | |||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Revenues | $ | 991,290 | $ | 727,774 | $ | 263,516 | 36.2 | % | $ | 1,935,179 | $ | 1,382,854 | $ | 552,325 | 39.9 | % |
Three Months Ended March 31, | 2022 to 2023 | |||||||||||||||
2023 | 2022 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Cost of revenues | 643,763 | 476,122 | 167,641 | 35.2 | % | |||||||||||
Gross profit | 300,126 | 178,958 | 121,168 | 67.7 | % |
Three months ended June 30, 2023 to 2022 | Six months ended June 30, 2023 to 2022 | |||||||||||||||||||||||||||||||
2023 | 2022 | Change | 2023 | 2022 | Change | |||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Cost of revenues | $ | 673,985 | $ | 545,132 | $ | 128,853 | 23.6 | % | $ | 1,317,748 | $ | 1,021,254 | $ | 296,494 | 29.0 | % | ||||||||||||||||
Gross profit | $ | 317,305 | $ | 182,642 | $ | 134,663 | 73.7 | % | $ | 617,431 | $ | 361,600 | $ | 255,831 | 70.7 | % |
• | an increase in direct cost of revenues sold of |
• | an increase in warranty expenses and warranty accruals of |
• |
an increase in personnel-related costs of |
• | a decrease in shipment and logistic costs in an aggregate amount of $4.1 million due to a decrease in shipment rates and a decrease in expedited shipments costs; and |
• |
• | gradual price increases across our product offerings; |
• |
• |
• | continued cost reduction efforts. |
• | an increased portion of sales of commercial products out of our total product mix, that are characterized with lower gross |
• |
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 |
• |
• | an increase in direct cost of revenues sold of $195.9 million associated primarily with an increase in the volume of products sold; |
• | an increase in warranty expenses and warranty accruals of $73.7 million associated primarily with an increase in the number of products in our install base as well as an increase in costs related to the different elements of our warranty expenses which include the cost of the products, shipment and other related expenses; |
• | an increase in personnel-related costs of $9.2 million related to the expansion of our production, operations, and support headcount which grew in parallel to our growing install base worldwide; and |
• | an increase of $6.4 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, partially offset by a decrease in inventory write-offs related to the discontinuation of our UPS related activities in the comparable period. |
• | gradual price increases across our product offerings; |
• | a decrease in shipment rates as well as a decline in the portion of expedited shipments out of our total shipments; 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 margins; |
• | 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 |
• | our non-solar businesses, that are generally characterized by a lower gross profit which effect was amplified this quarter. |
Three months ended March 31, | 2022 to 2023 | |||||||||||||||
2023 | 2022 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Research and development | 79,873 | 66,349 | 13,524 | 20.4 | % |
Three months ended June 30, 2023 to 2022 | Six months ended June 30, 2023 to 2022 | |||||||||||||||||||||||||||||||
2023 | 2022 | Change | 2023 | 2022 | Change | |||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Research and development | $ | 86,526 | $ | 74,847 | $ | 11,679 | 15.6 | % | $ | 166,399 | $ | 141,196 | $ | 25,203 | 17.8 | % |
• | an increase in personnel-related costs of |
• | an increase in expenses related to consultants and sub-contractors in an amount of |
• | an increase in expenses related to material consumption in the manufacturing of samples and prototypes as part of our development process in an amount of $1.4 million. |
• | an increase in personnel-related costs of $15.1 million resulting from an increase in our research and development headcount as well as salary expenses associated with annual merit increases, which were partially offset by the depreciation of the NIS against the U.S. dollar and employee equity-based compensation. The increase in headcount reflects our continued investment in enhancements of existing products as well as research and development expenses associated with bringing new products to the market; |
• | an increase in expenses related to consultants and sub-contractors in an amount of $5.0 million; and |
• | an increase in expenses related to other overhead costs in an amount of |
• | an increase in depreciation expenses of property and equipment in an amount of $2.0 million. |
Three months ended March 31, | 2022 to 2023 | |||||||||||||||
2023 | 2022 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Sales and marketing | 40,966 | 35,316 | 5,650 | 16.0 | % |
Three months ended June 30, 2023 to 2022 | Six months ended June 30, 2023 to 2022 | |||||||||||||||||||||||||||||||
2023 | 2022 | Change | 2023 | 2022 | Change | |||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Sales and marketing | $ | 44,222 | $ | 38,975 | $ | 5,247 | 13.5 | % | $ | 85,188 | $ | 74,291 | $ | 10,897 | 14.7 | % |
• | an increase in personnel-related costs of |
• | an increase of $1.3 million in expenses related to pre-sale initiatives; and |
• | an increase in expenses related to other marketing activities by $1.0 million. |
• | an increase in personnel-related costs of $6.2 million as a result of an increase in headcount supporting our growth outside of the U.S, as well as salary expenses associated with annual merit increases and employee equity-based compensation; | |
• | an increase of $1.4 million in training-related expenses as a result of resuming training activities that had been previously cancelled or postponed due to Covid-19 restrictions in |
• | an increase of $1.3 million in expenses related to pre-sale initiatives. |
Three months ended March 31, | 2022 to 2023 | |||||||||||||||
2023 | 2022 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
General and administrative | 36,567 | 26,429 | 10,138 | 38.4 | % |
Three months ended June 30, 2023 to 2022 | Six months ended June 30, 2023 to 2022 | |||||||||||||||||||||||||||||||
2023 | 2022 | Change | 2023 | 2022 | Change | |||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
General and administrative | $ | 36,199 | $ | 28,121 | $ | 8,078 | 28.7 | % | $ | 72,766 | $ | 54,550 | $ | 18,216 | 33.4 | % |
• | an increase in expenses related to consultants and sub-contractors in an amount of |
• | an increase in personnel-related costs of |
• | an increase in expenses related to consultants and sub-contractors in an amount of |
• | an increase in personnel-related costs of $5.0 million resulting from an increase in our general and administrative headcount, as well as salary expenses associated with annual merit increases and employee equity-based compensation; and |
• | an increase in expenses related to |
Three months ended June 30, 2023 to 2022 | Six months ended June 30, 2023 to 2022 | |||||||||||||||||||||||||||||||
2023 | 2022 | Change | 2023 | 2022 | Change | |||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Other operating expense (income), net | $ | - | $ | 4,687 | $ | (4,687 | ) | (100.0 | )% | $ | (1,434 | ) | $ | 4,687 | $ | (6,121 | ) | (130.6 | )% |
• | a decrease of $4.0 million in expenses related to write-offs of goodwill and intangible assets related to the discontinuation of our UPS related activities; and |
• | a decrease of $0.7 million in expenses related to write-offs of property, plant and equipment. |
Three months ended March 31, | 2022 to 2023 | |||||||||||||||
2023 | 2022 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Other operating income, net | (1,434 | ) | — | (1,434 | ) | (100.0 | )% |
• | a decrease of $4.0 million in expenses related to write-offs of goodwill and intangible assets related to the discontinuation of our UPS-related activities; |
• | a decrease of $0.7 million in expenses related to write-offs of property, plant and equipment; and |
• | an increase of $1.4 million in income from the sale of property, plant and equipment and other assets. |
Three months ended June 30, 2023 to 2022 | Six months ended June 30, 2023 to 2022 | |||||||||||||||||||||||||||||||
2023 | 2022 | Change | 2023 | 2022 | Change | |||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Financial income (expense), net | $ | 3,384 | $ | (14,311 | ) | $ | 17,695 | (123.6 | )% | $ | 27,058 | $ | (18,916 | ) | $ | 45,974 | (243.0 | )% |
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 income of $21.2 million in the six months ended June 30, 2023, compared to expenses of $20.0 million in the six months ended June 30, 2022, as a result of fluctuations in foreign exchange rates, primarily between the Euro and the NIS against the U.S. dollar. |
• | an increase of $7.9 million in interest income and accretion (amortization) of discount (premium) on marketable securities. |
Three months ended March 31, | 2022 to 2023 | |||||||||||||||
2023 | 2022 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Other loss | (125 | ) | (844 | ) | 719 | (85.2 | )% |
Three months ended June 30, 2023 to 2022 | Six months ended June 30, 2023 to 2022 | |||||||||||||||||||||||||||||||
2023 | 2022 | Change | 2023 | 2022 | Change | |||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Other loss | $ | - | $ | - | $ | - | - | % | $ | (125 | ) | $ | (844 | ) | $ | 719 | (85.2 | )% |
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 June 30, 2023 to 2022 | Six months ended June 30, 2023 to 2022 | |||||||||||||||||||||||||||||||
2023 | 2022 | Change | 2023 | 2022 | Change | |||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Income taxes | $ | 34,232 | $ | 6,617 | $ | 27,615 | 417.3 | % | $ | 63,557 | $ | 18,909 | $ | 44,648 | 236.1 | % |
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 June 30, 2023 to 2022 | Six months ended June 30, 2023 to 2022 | |||||||||||||||||||||||||||||||
2023 | 2022 | Change | 2023 | 2022 | Change | |||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Net income | $ | 119,510 | $ | 15,084 | $ | 104,426 | 692.3 | % | $ | 257,888 | $ | 48,207 | $ | 209,681 | 435.0 | % |
Three Months Ended March 31, | ||||||||
2023 | 2022 | |||||||
(In thousands) | ||||||||
Net cash provided by (used in) operating activities | 7,923 | (162,989 | ) | |||||
Net cash used in investing activities | (67,780 | ) | (15,134 | ) | ||||
Net cash provided by (used in) financing activities | (5,222 | ) | 652,335 | |||||
Increase (decrease) in cash and cash equivalents | (65,079 | ) | 474,212 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
(In thousands) | ||||||||||||||||
Net cash provided by (used in) operating activities | $ | (88,711 | ) | $ | 77,415 | $ | (80,788 | ) | $ | (85,574 | ) | |||||
Net cash used in investing | (76,674 | ) | (310,799 | ) | (144,454 | ) | (325,933 | ) | ||||||||
Net cash provided by (used in) financing activities | (4,919 | ) | (3,929 | ) | (10,141 | ) | 648,406 | |||||||||
Increase (decrease) in cash and cash equivalents | $ | (170,304 | ) | $ | (237,313 | ) | $ | (235,383 | ) | $ | 236,899 |
Exhibit No. | Description | Incorporation by Reference | ||
Incorporated by reference to Exhibit 3.2 to Form 8-K filed with the SEC June 2, 2023 | ||||
Incorporated by reference to Exhibit 10.1 to Form 10-Q filed with the SEC on May 10, 2017 | ||||
Incorporated by reference to Exhibits 10.1 to Form 8-K filed with the SEC on July 7, 2023 | ||||
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 |
(Principal Executive Officer) |
/s/ Ronen Faier | ||
Chief Financial Officer | ||
(Principal Financial Officer) |