On November 1, 2023, SolarEdge Technologies Inc (SEDG, Financial), a global leader in smart energy technology, announced its financial results for the third quarter ended September 30, 2023. The company reported a decline in revenues and net income compared to the previous quarter and the same quarter last year.
Financial Performance Overview
The company reported revenues of $725.3 million, a decrease of 27% from $991.3 million in the prior quarter and a 13% decrease from $836.7 million in the same quarter last year. Revenues from the solar segment were $676.4 million, down 29% from $947.4 million in the prior quarter and down 14% from $788.6 million in the same quarter last year.
GAAP gross margin was 19.7%, down from 32.0% in the prior quarter and down from 26.5% in the same quarter last year. Non-GAAP gross margin was 20.8%, down from 32.7% in the prior quarter and down from 27.3% in the same quarter last year.
GAAP operating expenses were $159.5 million, down 4% from $166.9 million in the prior quarter but up 16% from $137.6 million in the same quarter last year. Non-GAAP operating expenses were $128.0 million, down 4% from $133.3 million in the prior quarter and up 18% from $108.3 million in the same quarter last year.
Net Income and Earnings Per Share
GAAP net loss was $61.2 million, a significant drop from a GAAP net income of $119.5 million in the prior quarter and a GAAP net income of $24.7 million in the same quarter last year. Non-GAAP net loss was $31.0 million, down from a Non-GAAP net income of $157.4 million in the prior quarter and down from a Non-GAAP net income of $54.1 million in the same quarter last year.
GAAP net diluted loss per share was $1.08, down from a GAAP net diluted EPS of $2.03 in the prior quarter and down from a GAAP net diluted EPS of $0.43 in the same quarter last year. Non-GAAP net diluted loss per share was $0.55, down from a Non-GAAP net diluted EPS of $2.62 in the prior quarter and down from a Non-GAAP net diluted EPS of $0.91 in the same quarter last year.
Cash Flow and Balance Sheet
Cash generated from operating activities was $40.6 million, compared with $88.7 million used in operating activities in the prior quarter and $5.6 million generated from operating activities in the same quarter last year. As of September 30, 2023, cash, cash equivalents, bank deposits, restricted bank deposits and marketable securities totaled $831.4 million, net of debt, compared to $853.5 million on June 30, 2023.
CEO Commentary
“The results for the third quarter fell short of our prior expectations and are reflecting a slow market environment, which has resulted in high inventory of our products in the distribution channels, in particular in Europe”, said Zvi Lando, Chief Executive Officer of SolarEdge. “While channel inventory clearing is expected to continue in coming quarters, we are optimistic about the future of the solar PV industry and are confident that our leading technology, global presence and broad product offering will enable us to continue to be a leader in this market."
Despite the challenges faced in the third quarter, SolarEdge Technologies Inc (SEDG, Financial) remains optimistic about the future of the solar PV industry and its position as a market leader.
Explore the complete 8-K earnings release (here) from SolarEdge Technologies Inc for further details.
