UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended March 31, 2025
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from _________ to __________
Commission File Number: 001-36894
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(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of
incorporation or organization)
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(IRS Employer
Identification No.)
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(Address of Principal Executive Offices, zip code)
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller Reporting Company
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Emerging growth company
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒
As of May 1, 2025, there were 59,044,232 shares of the registrant’s common stock, par value of $0.0001 per share, outstanding.
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION | |
| F-1 | |
| F-1 | |
| F-3 | |
| F-4 | |
| F-5 | |
| F-6 | |
| F-8 | |
| 3 | |
| 14 | |
| 15 | |
PART II. OTHER INFORMATION | 16 |
| 16 | |
| 16 | |
| 17 | |
| 17 | |
| 17 | |
| 17 | |
| 17 | |
| 17 |
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SOLAREDGE TECHNOLOGIES INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(in thousands, except per share data)
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March 31,
2025
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December 31,
2024
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ASSETS
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CURRENT ASSETS:
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Cash and cash equivalents
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$
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$
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Restricted cash
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Marketable securities
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Trade receivables, net of allowances of $
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Inventories, net
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Prepaid expenses and other current assets
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Total current assets
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LONG-TERM ASSETS:
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Marketable securities
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Property, plant and equipment, net
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Operating lease right-of-use assets, net
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Intangible assets, net
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Goodwill
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Loan receivables, net
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Other long-term assets
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Total long-term assets
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Total assets
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$
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$
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SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | F - 1
SOLAREDGE TECHNOLOGIES INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Cont.)
(in thousands, except per share data)
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March 31,
2025
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December 31,
2024
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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CURRENT LIABILITIES:
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Trade payables
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$
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$
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Employees and payroll accruals
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Warranty obligations
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Deferred revenues and customers advances
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Accrued expenses and other current liabilities
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Convertible senior notes, net
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Total current liabilities
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LONG-TERM LIABILITIES:
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Convertible senior notes, net
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Warranty obligations
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Deferred revenues
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Finance lease liabilities
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Operating lease liabilities
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Other long-term liabilities
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Total long-term liabilities
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COMMITMENTS AND CONTINGENT LIABILITIES
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STOCKHOLDERS’ EQUITY:
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Common stock of $
March 31, 2025 and
March 31, 2025 and
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Additional paid-in capital
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Treasury stock, at cost;
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(
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(
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Accumulated other comprehensive loss
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(
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(
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Accumulated deficit
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(
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(
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)
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Total stockholders’ equity
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Total liabilities and stockholders’ equity
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$
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$
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The accompanying notes are an integral part of the condensed consolidated financial statements.
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | F - 2
SOLAREDGE TECHNOLOGIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF LOSS (Unaudited)
(in thousands, except per share data)
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Three Months Ended
March 31, |
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2025
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2024
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Revenues
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$
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$
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Cost of revenues
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Gross profit (loss)
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(
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)
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Operating expenses:
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Research and development
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Sales and marketing
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General and administrative
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Other operating expense (income), net
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(
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)
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Total operating expenses
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Operating loss
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(
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(
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Financial income (expense), net
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(
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Other income, net
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Loss before income taxes
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(
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(
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Tax benefits (income taxes)
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(
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Net loss from equity method investments
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(
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(
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Net loss
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$
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(
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$
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(
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Net basic and diluted loss per share of common stock
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$
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(
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$
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(
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Weighted average number of shares used in computing net basic and diluted loss per share of common stock
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The accompanying notes are an integral part of the condensed consolidated financial statements.
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | F - 3
SOLAREDGE TECHNOLOGIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited)
(in thousands, except per share data)
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Three Months Ended
March 31, |
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2025
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2024
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Net loss
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$
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(
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$
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(
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)
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Other comprehensive income (loss), net of tax:
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Available-for-sale marketable securities
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Cash flow hedges
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(
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(
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Foreign currency translation adjustments on intra-entity transactions that are of a long-term investment nature
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(
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(
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Foreign currency translation adjustments
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(
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)
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Total other comprehensive income (loss)
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(
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)
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Comprehensive loss
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$
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(
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)
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$
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(
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)
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||
The accompanying notes are an integral part of the condensed consolidated financial statements.
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | F - 4
SOLAREDGE TECHNOLOGIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)
(in thousands, except per share data)
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Common stock
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Additional paid in
Capital
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Treasury stock
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Accumulated
other comprehensive
loss
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Accumulated deficit
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Total
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Number
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Amount
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Balance as of January 1, 2025
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$
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$
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$
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(
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)
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$
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(
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)
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$
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(
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$
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Issuance of common stock upon exercise of stock-based awards
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*
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Stock based compensation
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-
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Other comprehensive gain adjustments
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-
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Net loss
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-
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(
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)
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(
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)
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Balance as of March 31, 2025
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$
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$
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$
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(
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)
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$
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(
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)
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$
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(
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)
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$
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Common stock
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Additional paid in
Capital
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Treasury stock
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Accumulated
other comprehensive
loss
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Retained earnings |
Total
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Number
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Amount
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|||||||||||||||||||||||||||
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Balance as of January 1, 2024
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$
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$
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$
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$
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(
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)
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$
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$
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Issuance of common stock upon exercise of stock-based awards
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*
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Stock based compensation
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-
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Repurchase of common stock
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(
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)
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*
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(
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)
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(
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||||||||||||||||||
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Other comprehensive loss adjustments
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-
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(
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(
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Net loss
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-
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(
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)
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(
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)
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|||||||||||||||||||
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Balance as of March 31, 2024
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$
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$
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$
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(
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)
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$
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(
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)
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$
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$
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* Represents an amount less than $1.
The accompanying notes are an integral part of the condensed consolidated financial statements.
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | F - 5
SOLAREDGE TECHNOLOGIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(in thousands, except per share data)
|
Three Months Ended
March 31,
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||||||||
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2025
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2024
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Cash flows from operating activities:
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Net loss
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$
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(
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)
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$
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(
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)
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||
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Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
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Depreciation and amortization
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Stock-based compensation expenses
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Deferred income taxes, net
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(
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)
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(
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)
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||||
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Loss (gain) from exchange rate fluctuations
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(
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)
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Other items
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Changes in assets and liabilities:
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Trade receivables, net
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Inventories, net
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(
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)
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|||||
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Prepaid expenses and other assets
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Operating lease right-of-use assets, net
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||||||
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Trade payables
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(
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)
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|||||
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Warranty obligations
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(
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)
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(
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)
|
||||
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Deferred revenues and customers advances
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(
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)
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(
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)
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||||
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Operating lease liabilities
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(
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)
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(
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)
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Accrued expenses and other liabilities
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(
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)
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(
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)
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Net cash provided by (used in) operating activities
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(
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)
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Cash flows from investing activities:
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Investment in available-for-sale marketable securities
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(
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)
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(
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)
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Proceeds from maturities of available-for-sale marketable securities
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Purchase of property, plant and equipment
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(
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)
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(
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)
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||||
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Repayment related to governmental grant
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(
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)
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Disbursements for loans receivables
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(
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)
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Investment in privately-held companies
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(
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)
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Proceeds from loan receivables
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Other investing activities
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(
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)
|
|||||
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Net cash provided by investing activities
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$
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$
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|
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SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | F - 6
SOLAREDGE TECHNOLOGIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(in thousands, except per share data)
|
Three Months Ended
March 31, |
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2025
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2024
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Cash flows from financing activities:
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Repurchase of common stock
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$
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$
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(
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)
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|||
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Payments on account of repurchase of common stock
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(
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)
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|||||
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Repurchase of convertible debt
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(
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)
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Other financing activities
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(
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)
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(
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)
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Net cash used in financing activities
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(
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)
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(
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)
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Effect of exchange rate changes on cash, cash equivalents and restricted cash
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(
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)
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Increase (decrease) in cash, cash equivalents and restricted cash
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(
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)
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Cash, cash equivalents and restricted cash, beginning of period
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|
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Cash, cash equivalents and restricted cash, end of period
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$
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$
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Supplemental disclosure of non-cash activities:
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Right-of-use asset recognized with a corresponding lease liability
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$
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|
$
|
|
||||
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Purchase of property, plant and equipment
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$
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|
$
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|
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The accompanying notes are an integral part of the condensed consolidated financial statements.
The following table reconciles cash, cash equivalents and restricted cash per the statement of cash flows to the balance sheet:
|
Three Months Ended
March 31,
|
||||||||
|
2025
|
2024
|
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Cash and cash equivalents
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$
|
|
$
|
|
||||
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Restricted cash
|
|
|
||||||
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Cash, cash equivalents and restricted cash, end of period
|
$
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|
$
|
|
||||
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | F - 7
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
NOTE 1: GENERAL
| a. |
SolarEdge Technologies Inc. (the “Company”) and its subsidiaries design, develop, and sell intelligent inverter solutions 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 throughout each and every module through constant tracking of maximum power points individually per module, (ii) inverters which invert direct current (“DC”) from the PV module to alternating current (“AC”) including the Company’s future ready Energy Hub inverter which supports, among other things, connection to a DC-coupled battery for full or partial home backup capabilities, 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) batteries for PV applications that are used to increase energy independence and maximize self-consumption for PV system's owners including a battery and (v) additional smart energy management solutions.
The Company and its subsidiaries sell products worldwide through large distributors, electrical equipment wholesalers, as well as directly to large solar installers and engineering, procurement, and construction firms.
The Company has expanded its activity to other areas of smart energy technology organically and through acquisitions.
|
| b. |
Basis of Presentation:
|
The unaudited condensed consolidated financial statements and accompanying notes have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). In management’s opinion, the unaudited condensed consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. The Company’s interim period results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year.
The significant accounting policies applied in the annual consolidated financial statements of the Company as of December 31, 2024, contained in the Company’s Annual Report on Form 10-K filed with the SEC on February 25, 2025, have been applied consistently in these unaudited interim condensed consolidated financial statements. Certain prior year amounts have been reclassified to conform to current year presentation.
| c. |
Use of estimates:
|
The preparation of financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses, government grants, income taxes and related disclosures in the accompanying notes. Actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties.
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | F - 8
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
| d. |
Concentrations of supply risks:
|
The Company depends on two contract manufacturers and several limited or single source component suppliers. Reliance on these vendors makes the Company vulnerable to possible capacity constraints and reduced control over component availability, delivery schedules, manufacturing yields, and costs.
As of March 31, 2025 two contract manufacturers jointly accounted for 64.3 % of the Company’s total trade payables.
As of December 31, 2024, two contract manufacturers jointly accounted for 43.4 % of the Company’s total trade payables.
The Company's own manufacturing facility, Sella 1, located in the North of Israel, is used in the Company' ongoing operations.
| e. |
New accounting standards updates:
|
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). ASU 2023-09 requires additional categories of information about federal, state and foreign income taxes to be included in effective tax rate reconciliation disclosure. Additionally, the newly added categories also apply to the income taxes paid disclosure. Implementation of said additions are subject to quantitative thresholds. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Since ASU 2023-09 addresses only disclosures, the adoption of ASU 2023-09 is not expected to have a significant impact on its consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, “Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): “Disaggregation of Income (loss) Statement Expenses” (“ASU 2024-03”). ASU 2024-03 requires disaggregation of certain costs and expenses included in each relevant expense caption on the Company's consolidated income (loss) statements in a separate note to the financial statements at each interim and annual reporting period, including amounts of purchases of inventory, employee compensation, depreciation, and intangible asset amortization. ASU 2024-04 is effective fiscal years beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact from ASU 2024-03 on its consolidated financial statements disclosures.
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | F - 9
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
NOTE 2: MARKETABLE SECURITIES
The following is a summary of available-for-sale marketable securities as of March 31, 2025:
|
Amortized
cost
|
Gross unrealized
gains
|
Gross unrealized
losses
|
Fair value
|
|||||||||||||
|
Matures within one year:
|
||||||||||||||||
|
Corporate bonds
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
|
U.S. Treasury securities
|
|
|
(
|
)
|
|
|||||||||||
|
U.S. Government agency securities
|
|
|
(
|
)
|
|
|||||||||||
|
Non-U.S. Government securities
|
|
|
(
|
)
|
|
|||||||||||
|
|
|
(
|
)
|
|
||||||||||||
|
Matures after one year:
|
||||||||||||||||
|
Corporate bonds
|
|
|
|
|
||||||||||||
|
U.S. Government agency securities
|
|
|
|
|
||||||||||||
|
|
|
|
|
|||||||||||||
|
Total
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
The following is a summary of available-for-sale marketable securities as of December 31, 2024:
|
Amortized
cost
|
Gross unrealized
gains
|
Gross unrealized
losses
|
Fair value
|
|||||||||||||
|
Matures within one year:
|
||||||||||||||||
|
Corporate bonds
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
|
U.S. Treasury securities
|
|
|
(
|
)
|
|
|||||||||||
|
U.S. Government agency securities
|
|
|
|
|
||||||||||||
|
|
|
(
|
)
|
|
||||||||||||
|
Matures after one year:
|
||||||||||||||||
|
Corporate bonds
|
|
|
(
|
)
|
|
|||||||||||
|
U.S. Government agency securities
|
|
|
|
|
||||||||||||
|
|
|
(
|
)
|
|
||||||||||||
|
Total
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
The Company did not sell any available-for-sale marketable securities during the three months ended March 31, 2025 and 2024.
As of March 31, 2025, and December 31, 2024, the Company did not record an allowance for credit losses for its available-for-sale marketable securities.
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | F - 10
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
NOTE 3: INVENTORIES, NET
|
March 31,
2025
|
December 31,
2024
|
|||||||
|
Raw materials
|
$
|
|
$
|
|
||||
|
Work in process
|
|
|
||||||
|
Finished goods
|
|
|
||||||
|
Total inventories, net
|
$
|
|
$
|
|
||||
NOTE 4: PREPAID EXPENSES AND OTHER CURRENT ASSETS
|
March 31,
2025
|
December 31,
2024
|
|||||||
|
Vendor non-trade receivables1
|
$
|
|
$
|
|
||||
|
Government authorities2
|
|
|
||||||
|
Loan receivables, net
|
|
|
||||||
|
Prepayments
|
|
|
||||||
|
Assets held for sale
|
|
|
||||||
|
Other
|
|
|
||||||
|
Total prepaid expenses and other current assets
|
$
|
|
$
|
|
||||
1 Vendor non-trade receivables derived from the sale of components to manufacturing vendors who manufacture products, components and other testing equipment for the Company. The Company purchases these components directly from other suppliers. The Company does not reflect the sale of these components to the contract manufacturers in its revenues.
2 Including (1) Advanced Manufacturing Production Tax Credits (“AMPTC”), which incentivize the production of eligible components within the U.S. under IRC Section 45X, (2) income tax receivables and (3) value-added tax receivables from tax authorities.
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | F - 11
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
NOTE 5: OTHER LONG TERM ASSETS
|
March 31,
2025
|
December 31,
2024
|
|||||||
|
Cloud computing arrangements
|
$
|
|
$
|
|
||||
|
Investments in privately held companies
|
|
|
||||||
|
Severance pay fund
|
|
|
||||||
|
Prepaid expenses and other
|
|
|
||||||
|
Total other long term assets
|
$
|
|
$
|
|
||||
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | F - 12
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
NOTE 6: DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
During the three months ended March 31, 2025, the Company instituted a foreign currency cash flow hedging program to reduce the risk of a forecasted increase in the value of foreign currency cash flows, resulting from payment of salaries in Israeli currency, the New Israeli Shekels (“NIS”). The Company hedges portions of the anticipated payroll denominated in NIS for a period of one to nine months with hedging contracts. These hedging contracts are designated as cash flow hedges, as defined by ASC 815 and are all effective hedges.
As of March 31, 2025, the Company entered into forward contracts and put and call options to sell U.S. dollars (“USD”) in the amounts of NIS 44 million and NIS 74 million, respectively.
In addition to the above-mentioned cash flow hedge transactions, the Company occasionally enters into derivative instrument arrangements to hedge the Company’s exposure to currencies other than 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 loss, under “Financial income (expense), net”.
The Company classifies cash flows related to its hedging as operating activities in its condensed consolidated statement of cash flows.
The fair values of outstanding derivative instruments were as follows:
|
|
Balance sheet location |
March 31,
2025
|
December 31,
2024
|
|||||||
|
Derivative assets of options and forward contracts:
|
||||||||||
|
Designated cash flow hedges
|
|
$
|
|
$
|
|
|||||
|
Derivative liabilities of options and forward contracts:
|
||||||||||
|
Designated cash flow hedges
|
|
$
|
(
|
)
|
$
|
|
||||
Gains (losses) on derivative instruments are summarized below:
|
Three Months Ended
March 31,
|
||||||||||
|
Affected line item
|
2025
|
2024
|
||||||||
|
Foreign exchange contracts
|
||||||||||
|
Non Designated Hedging Instruments
|
Condensed Consolidated Statements of Loss - Financial income (expense), net
|
$
|
|
$
|
|
|||||
|
Designated Hedging Instruments
|
Condensed Consolidated Statements of Comprehensive Loss - Cash flow hedges
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
See Note 15 for information regarding losses from designated hedging instruments reclassified from accumulated other comprehensive loss.
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | F - 13
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
NOTE 7: FAIR VALUE MEASUREMENTS
In accordance with ASC 820, “Fair Value Measurement”, the Company measures its cash equivalents and marketable securities, at fair value using the market approach valuation technique. Cash and cash equivalents are classified within Level 1 because these assets are valued using quoted market prices. Marketable securities and foreign currency derivative contracts are classified within level 2 due to these assets being valued by alternative pricing sources and models utilizing market observable inputs.
The following table sets forth the Company’s assets that were measured at fair value as of March 31, 2025 and December 31, 2024, by level within the fair value hierarchy:
|
Fair value measurements as of
|
||||||||||
|
Description
|
Fair Value
Hierarchy
|
March 31,
2025
|
December 31,
2024
|
|||||||
|
Assets:
|
||||||||||
|
Cash and cash equivalents:
|
||||||||||
|
Cash
|
Level 1
|
$
|
|
$
|
|
|||||
|
Money market mutual funds
|
Level 1
|
$
|
|
$
|
|
|||||
|
Deposits
|
Level 1
|
$
|
|
$
|
|
|||||
|
Restricted cash
|
Level 1
|
$
|
|
$
|
|
|||||
|
Derivative instruments
|
Level 2
|
$
|
|
$
|
|
|||||
|
Short-term marketable securities:
|
||||||||||
|
Corporate bonds
|
Level 2
|
$
|
|
$
|
|
|||||
|
U.S. Treasury securities
|
Level 2
|
$
|
|
$
|
|
|||||
|
U.S. Government agency securities
|
Level 2
|
$
|
|
$
|
|
|||||
|
Non-U.S. Government securities
|
Level 2
|
$
|
|
$
|
|
|||||
|
Long-term marketable securities:
|
||||||||||
|
Corporate bonds
|
Level 2
|
$
|
|
$
|
|
|||||
|
U.S. Government agency securities
|
Level 2
|
$
|
|
$
|
|
|||||
|
Liabilities:
|
||||||||||
|
Derivative instruments
|
Level 2
|
$
|
(
|
)
|
$
|
|
||||
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | F - 14
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
NOTE 8: WARRANTY OBLIGATIONS
Changes in the Company’s product warranty obligations for the three months ended March 31, 2025 and 2024, were as follows:
|
Three Months Ended March 31,
|
||||||||
|
2025
|
2024
|
|||||||
|
Balance, at the beginning of the period
|
$
|
|
$
|
|
||||
|
Accruals for warranty during the period
|
|
|
||||||
|
Changes in estimates
|
(
|
)
|
|
|||||
|
Settlements
|
(
|
)
|
(
|
)
|
||||
|
Balance, at end of the period
|
|
|
||||||
|
Less current portion
|
(
|
)
|
(
|
)
|
||||
|
Long term portion
|
$
|
|
$
|
|
||||
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | F - 15
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
NOTE 9: DEFERRED REVENUES AND CUSTOMERS ADVANCES
Deferred revenues consist of deferred cloud-based monitoring services, communication services, warranty extension services and advance payments received from customers for the Company’s products. Deferred revenues are classified as short-term and long-term deferred revenues based on the period in which revenues are expected to be recognized.
Changes in the balances of deferred revenues and customer advances during the period are as follows:
|
Three Months Ended March 31,
|
||||||||
|
2025
|
2024
|
|||||||
|
Balance, at the beginning of the period
|
$
|
|
$
|
|
||||
|
Revenue recognized
|
(
|
)
|
(
|
)
|
||||
|
Increase in deferred revenues and customer advances
|
|
|
||||||
|
Balance, at the end of the period
|
|
|
||||||
|
Less current portion
|
(
|
)
|
(
|
)
|
||||
|
Long term portion
|
$
|
|
$
|
|
||||
The following table includes estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of March 31, 2025:
|
2025
|
$
|
|
||
|
2026
|
|
|||
|
2027
|
|
|||
|
2028
|
|
|||
|
2029
|
|
|||
|
Thereafter
|
|
|||
|
Total deferred revenues
|
$
|
|
NOTE 10: ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
|
March 31,
2025
|
December 31,
2024
|
|||||||
|
Accrued expenses
|
$
|
|
$
|
|
||||
|
Government authorities
|
|
|
||||||
|
Operating lease liabilities
|
|
|
||||||
|
Accrual for sales incentives
|
|
|
||||||
|
Other
|
|
|
||||||
|
Total accrued expenses and other current liabilities
|
$
|
|
$
|
|
||||
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | F - 16
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
NOTE 11: CONVERTIBLE SENIOR NOTES
Upon conversion, the Company may choose to pay or deliver, as the case may be, cash, shares of common stock, or a combination of cash and shares of common stock.
In addition, upon the occurrence of a fundamental change (as defined in the Indenture), holders of the Notes 2025 may require the Company to repurchase all or a portion of their Notes 2025, in multiples of $1,000 principal amounts, at a repurchase price of 100% of the principal amount of the Notes 2025, plus any accrued and unpaid special interest to, but excluding the fundamental change repurchase date. If certain fundamental changes referred to as make-whole fundamental changes occur, the conversion rate for the Notes 2025 may be increased.
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | F - 17
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
Upon conversion, the Company may choose to pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock.
In addition, upon the occurrence of a fundamental change (as defined in the Indenture 2029), holders of the Notes 2029 may require the Company to repurchase all or a portion of their Notes 2029, in multiples of $1,000 principal amounts, at a repurchase price of 100% of the principal amount of the Notes 2029, plus any accrued and unpaid interest, if any, up to, but not including, the repurchase date. If certain fundamental changes referred to as make-whole fundamental changes occur, the conversion rate for the Notes 2029 may be increased.
The net proceeds from the offering of the Notes 2029 were approximately $293,200 , after deducting fees and estimated expenses. Congruently, the Company has entered into capped call transactions (as detailed below). The Company used approximately $25,230 of the net proceeds from this offering to pay the cost of the capped call transactions. The Company also used approximately $267,900 of the net proceeds from this offering to repurchase $285,000 principal amount of its Notes 2025. In June 2025, the Company recorded under other income a gain of $15,456 from the repurchase of Notes 2025.
The Company accounts for the Notes 2029 at amortized cost, as a single unit of account on the balance sheet. The carrying value of the liability is represented by the face amount of the Notes 2029, less debt issuance costs, adjusted for any amortization of issuance costs. Issuance costs are being amortized as interest expense over the term of the Notes 2029, using the effective interest rate method.
The capped call transactions are expected generally to reduce the potential dilution to the common stock upon any conversion of the Notes 2029 and/or offset any cash payments the Company is required to make in excess of the principal amount of converted Notes 2029, as the case may be, in the event that the market price per share of common stock, as measured under the terms of the capped call transactions, is greater than the strike price of the capped call transactions. The strike price initially corresponds to the conversion price of the Notes and is subject to customary anti-dilution adjustments. If, however, the market price per share of common stock exceeds $48.84 , the initial cap price of the capped call transactions, there would nevertheless be unmitigated dilution and/or no offset of any cash payments, in each case, attributable to the amount by which the market price of the common stock exceeds the cap price. The cap price is subject to certain customary adjustments under the terms of the capped call transactions.
The capped call transactions are considered a freestanding instrument as they were entered into separately and apart from Notes 2029. In addition, the conversion or redemption of the Notes 2029 would not automatically result in the exercise of the capped call.
As the capped call transactions are indexed to the Company's common stock, they were recorded as a reduction of additional paid-in capital in the condensed consolidated balance sheets.
On July 8, 2024 the Company sold to Goldman Sachs & Co. LLC, as representative of the several initial purchasers (the “Initial Purchasers”), and the Initial Purchasers purchased from the Company, $37,000 aggregate principal amount of additional Notes 2029. The additional Notes 2029 were sold pursuant to the Initial Purchasers’ exercise of the option granted by the Company to the Initial Purchasers to purchase additional Notes 2029, solely to cover over-allotments, under the purchase agreement described in the Company's Form 8-K filed on June 28, 2024.
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | F - 18
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
The net proceeds from the exercise of the option granted by the Company to the Initial Purchasers of the Notes 2029 were approximately $
In March 2025 the Company repurchased $
The convertible senior notes consisted of the following as of March 31, 2025 and December 31, 2024:
|
March 31,
2025
|
December 31,
2024
|
|||||||
|
Notes 2025
|
||||||||
|
Principal
|
$
|
|
$
|
|
||||
|
Unamortized issuance costs
|
(
|
)
|
(
|
)
|
||||
|
Net carrying amount Notes 2025
|
|
|
||||||
|
Notes 2029
|
||||||||
|
Principal
|
|
|
||||||
|
Unamortized issuance costs
|
(
|
)
|
(
|
) | ||||
|
Net carrying amount Notes 2029
|
|
|
||||||
|
Total notes carrying amount
|
$
|
|
$
|
|
||||
Costs related to the Notes 2025 and the Notes 2029 for the three months ended March 31, 2025 and March 31, 2024 were as follows:
|
Three Months Ended
March 31,
|
||||||||
|
2025
|
2024
|
|||||||
|
Notes 2025
|
||||||||
|
Debt issuance cost
|
$
|
|
$
|
|
||||
|
Notes 2029
|
||||||||
|
Debt issuance cost
|
$
|
|
$
|
|
||||
|
Contractual interest expense
|
$
|
|
$
|
|
||||
As of March 31, 2025, the unamortized issuance costs of the Notes 2025 and Notes 2029 will be amortized over the remaining term of approximately 6 months and 4.3 years, respectively.
The annual effective interest rates of the Notes 2025 and the Notes 2029 are 0.47 %. and 2.75 %, respectively.
As of March 31, 2025, the estimated fair values of Notes 2025 and Notes 2029, both of which the Company has classified as Level 2 financial instruments, are $331,983 and $279,973 , respectively. The estimated fair values were determined based on the quoted bid price of the Notes in an over-the-counter market on the last trading day of the reporting period.
As of March 31, 2025, the if-converted value of the Notes 2025 and Notes 2029 did not exceed the principal amount.
NOTE 12: OTHER LONG TERM LIABILITIES
|
March 31,
2025
|
December 31,
2024
|
|||||||
|
Tax liabilities
|
$
|
|
$
|
|
||||
|
Long term accrued expenses
|
|
|
||||||
|
Accrued severance pay
|
|
|
||||||
|
Other
|
|
|
||||||
|
$
|
|
$
|
|
|||||
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | F - 19
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
NOTE 13: STOCK CAPITAL
|
a.
|
Common stock rights:
|
Common stock confers upon its holders the right to receive notice of, and to participate in, all general meetings of the Company, where each share of common stock shall have one vote for all purposes, to share equally, on a per share basis, in bonuses, profits, or distributions out of fund legally available therefor, and to participate in the distribution of the surplus assets of the Company in the event of liquidation of the Company.
|
b.
|
Equity Incentive Plans:
|
The Company’s 2007 Global Incentive Plan (the “2007 Plan”) was adopted by the board of directors on August 30, 2007. The 2007 Plan terminated upon the Company’s IPO on March 31, 2015 and no further awards may be granted thereunder. All outstanding awards will continue to be governed by their existing terms and 379,358 available options for future grants were transferred to the Company’s Amended and Restated 2015 Global Incentive Plan (the “2015 Plan”) and are reserved for future issuances under the 2015 Plan. The 2015 Plan became effective upon the consummation of the IPO. The 2015 Plan provides for the grant of options, restricted stock units (“RSU”), performance stock units (“PSU”), and other share-based awards to directors, employees, officers, and non-employees of the Company and its subsidiaries. As of March 31, 2025, a total of 26,648,950 shares of common stock were reserved for issuance pursuant to stock awards under the 2015 Plan (the “Share Reserve”), an aggregate of 13,058,763 shares are still available for future grants.
The Share Reserve will automatically increase on January 1st of each year during the term of the 2015 Plan, commencing on January 1st of the year following the year in which the 2015 Plan becomes effective, in an amount equal to 5 % of the total number of shares of capital stock outstanding on December 31st of the preceding calendar year; provided, however, that the Company’s board of directors may determine that there will not be a January 1st increase in the Share Reserve in a given year or that the increase will be less than 5% of the shares of capital stock outstanding on the preceding December 31st.
Under its 2015 Plan, the Company granted 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.
The market condition for the PSUs is based on either the Company’s share price target or total shareholder return (“TSR”) compared to the TSR of companies listed in the S&P 500 index over a two to three year performance period or the 30-day successive average trading price of the Company’s common stock, and are subject to a three-year vesting period. The Company uses a Monte-Carlo simulation to determine the grant date fair value for these awards, which takes into consideration the market price of a share of the Company’s common stock on the date of grant less the present value of dividends expected during the requisite service period, as well as the possible outcomes pertaining to the TSR market condition. The Company recognizes such compensation expenses on an accelerated vesting method.
The aggregate maximum number of shares of common stock that may be issued on the exercise of incentive stock options is 10,000,000 . As of March 31, 2025, an aggregate of 8,617,974 options are still available for future grants under the 2015 Plan.
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | F - 20
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
A summary of the activity in stock options and related information is as follows:
|
Number of options
|
Weighted average exercise price
|
Weighted average remaining contractual term in years
|
Aggregate intrinsic Value
|
|||||||||||||
|
Outstanding as of December 31, 2024
|
|
$
|
|
|
$
|
|
||||||||||
|
Exercised
|
(
|
)
|
|
-
|
|
|||||||||||
|
Outstanding as of March 31, 2025
|
|
$
|
|
|
$
|
|
||||||||||
|
Vested and expected to vest as of March 31, 2025
|
|
$
|
|
|
$
|
|
||||||||||
|
Exercisable as of March 31, 2025
|
|
$
|
|
|
$
|
|
||||||||||
The intrinsic value is the amount by which the closing price of the Company’s common stock on March 31, 2025 or the price on the day of exercise exceeds the exercise price of the stock options multiplied by the number of in-the-money options.
A summary of the activity in the RSUs and PSUs and related information is as follows
|
RSU
|
PSU
|
|||||||||||||||
|
Number of
Shares
Outstanding
|
Weighted average grant date fair value
|
Number of
Shares
Outstanding
|
Weighted average grant date fair value
|
|||||||||||||
|
Unvested as of December 31, 2024
|
|
$
|
|
|
$
|
|
||||||||||
|
Granted
|
|
|
|
|
||||||||||||
|
Vested
|
(
|
)
|
|
|
|
|||||||||||
|
Forfeited
|
(
|
)
|
|
(
|
)
|
|
||||||||||
|
Unvested as of March 31, 2025
|
|
$
|
|
|
$
|
|
||||||||||
|
c.
|
Employee Stock Purchase Plan ("ESPP"):
|
The Company adopted an ESPP effective upon the consummation of the IPO. As of March 31, 2025, a total of 5,125,666 shares were reserved for issuance under this plan. The number of shares of common stock reserved for issuance under the ESPP will increase automatically on January 1st of each year, for ten years, by the lesser of 1 % of the total number of shares of the Company’s common stock outstanding on December 31st of the preceding calendar year or 487,643 shares. However, the Company’s board of directors may reduce the amount of the increase in any particular year at their discretion, including a reduction to zero.
The ESPP is implemented through an offering every six months. According to the ESPP, eligible employees may use the lesser of either up to 15 % of their salaries or $15,000 per participant, to purchase common stock for every six month 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.
As of March 31, 2025, 1,798,312 shares of common stock have been purchased under the ESPP.
As of March 31, 2025, 3,327,354 shares of common stock were available for future issuance under the ESPP.
In accordance with ASC No. 718, the ESPP is compensatory and, as such, results in recognition of compensation cost.
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | F - 21
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
|
d.
|
Stock-based compensation expenses:
|
The Company recognized stock-based compensation expenses related to all stock-based awards in the condensed consolidated statement of loss for the three months ended March 31, 2025, and 2024, as follows:
|
Three Months Ended
March 31,
|
||||||||
|
2025
|
2024
|
|||||||
|
Stock-based compensation expenses:
|
||||||||
|
Cost of revenues
|
$
|
|
$
|
|
||||
|
Research and development
|
|
|
||||||
|
Selling and marketing
|
|
|
||||||
|
General and administrative
|
|
|
||||||
|
Total stock-based compensation expenses
|
$
|
|
$
|
|
||||
|
Stock-based compensation capitalized:
|
||||||||
|
Inventory
|
$
|
|
$
|
|
||||
|
Other long-term assets
|
|
|
||||||
|
Total stock-based compensation capitalized
|
$
|
|
$
|
|
||||
For the three months ended March 31, 2025 no amounts were recorded in regard to tax benefits associated with share-based compensation.
The total tax benefit associated with share-based compensation for the three months ended March 31, 2024 was $5,366 .
The tax benefit realized from share-based compensation for three months ended March 31, 2024 was $1,341 .
As of March 31, 2025, there were total unrecognized compensation expenses in the amount of $197,511 related to non-vested equity-based compensation arrangements granted. These expenses are expected to be recognized during the period from April 1, 2025 through May 31, 2029.
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | F - 22
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
NOTE 14: COMMITMENTS AND CONTINGENT LIABILITIES
|
a.
|
Guarantees:
|
As of March 31, 2025, contingent liabilities exist regarding guarantees in the amounts of $102,644 , $10,806 and $1,540 , for each of securing projects with customers, office rent lease agreements, 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 March 31, 2025, the Company had non-cancellable purchase obligations totaling approximately $234,017 , out of which the Company recorded a provision for loss in the amount of $25,811 .
As of March 31, 2025, the Company had contractual obligations for capital expenditures totaling approximately $32,432 . These commitments reflect purchases of automated assembly lines and other machinery related to the Company’s general manufacturing process and are primarily for its new manufacturing sites in the U.S.
|
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.
On November 3, 2023, Daphne Shen, a purported stockholder of the Company, filed a proposed class action complaint for violation of federal securities laws, individually and putatively on behalf of all others similarly situated, in the U.S. District Court of the Southern District of New York against the Company, the Company’s former CEO and the Company’s former CFO. The complaint alleges violations of Section 10(b) and Rule 10b-5 of the Exchange Act, as well as violations of Section 20(a) of the Exchange Act against the individual defendants. The complaint seeks class certification, damages, interest, attorneys’ fees, and other relief. On December 13, 2023, Javier Cascallar filed a similar proposed class action. On January 2, 2024, six purported lead plaintiffs filed motions in the Shen litigation seeking to consolidate the Cascallar and Shen litigations and appoint lead plaintiffs and lead counsel pursuant to the procedures of the Private Securities Litigation Reform Act of 1995.
On February 7, 2024, the Court consolidated the two actions (the “Consolidated Securities Litigation”), and appointed co-lead plaintiffs (the “Plaintiffs”) and lead counsel. On April 22, 2024, the co-lead Plaintiffs filed an amended complaint adding two additional officers. The amended complaint made substantially similar allegations and claims. Defendants moved to dismiss the amended complaint on July 15, 2024 (the “Motion”), and the motion was fully briefed as of September 17, 2024. On December 4, 2024, the Court issued an order granting in part the Motion, dismissing all allegations except those relating to two purported misstatements, characterizing inventory levels as low. The Court allowed the Plaintiffs to again amend their complaint, and they filed a second amended complaint (the “Second Amended Complaint”) on January 3, 2025. On February 10, 2025, Defendants moved to dismiss the Second Amended Complaint insofar as it attempts to resurrect any of the allegations dismissed in the Court’s December 4 order. On April 7, 2025, a judge issued an order granting in part the Motion, and dismissing all allegations except those characterizing inventory levels as “low” and those relating to demand in Europe. The judge again granted the Plaintiffs the opportunity to file a further amended complaint, which is due on May 7, 2025. Discovery remains stayed pending the Court’s ultimate decision on the motion to dismiss the Second Amended Complaint.
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | F - 23
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
On March 15, 2024, Abdul Hirani filed a purported derivative complaint (the “Hirani Complaint”) in the United States District Court for the Southern District of New York against certain current and former SolarEdge executive officers and board members, including Zvi Lando, Ronen Faier, Nadav Zafrir, Betsy Atkins, Marcel Gani, Dana Gross, Dirk Hoke, Avery More, and Tal Payne. The Hirani Complaint makes largely the same allegations as those in the Consolidated Securities Litigation, namely, that the Company failed to disclose information about SolarEdge’s inventory in Europe and cancellation rates from European distributors, which allegedly resulted in material misstatements about the Company’s business and prospects in its quarterly filings. The Hirani Complaint contends that defendants’ role in allowing those alleged misstatements to be made constitutes (i) breach of fiduciary duty, (ii) aiding and abetting breach of fiduciary duty, (iii) unjust enrichment, (iv) waste of corporate assets, and (v) securities fraud under Section 10(b) of the Exchange Act. The complaint seeks compensatory and punitive damages, interest, attorneys’ fees, and other relief.
On June 10, 2024, Jonathan Blaufarb filed a second purported derivative complaint in the United States District Court for the Southern District of New York against the same defendants as those named in the Hirani Complaint as well as Lior Danziger and J.B. Lowe. The Blaufarb complaint makes largely the same allegations as those in the complaint in the Consolidated Securities Litigation and seeks declaratory relief, corporate governance reforms, damages, restitution, attorneys’ fees, and other relief. It also pleads the same counts as those in the Hirani Complaint, as well as additional counts for abuse of control and gross mismanagement. Defendants accepted service of the Hirani and Blaufarb complaints via stipulation that was so-ordered on July 12, 2024, and the two cases were consolidated with the Hirani matter designated as the lead case. On September 9, 2024, the parties agreed to stay the Consolidated Derivative Actions pending a decision on the motion to dismiss in the Consolidated Securities Litigation. The parties have agreed to keep the stay in place pending a decision on the motion to dismiss the plaintiffs’ Second Amended Complaint in the Consolidated Securities Litigation.
On August 7, 2024, Edwin Isaac filed a purported derivative complaint (the “Isaac Complaint”) in the United States District Court for the District of Delaware against the same defendants as those named in the Consolidated Derivative Actions. The Isaac Complaint makes largely the same allegations as those in the Consolidated Securities Litigation. It also pleads the similar counts to those in the Consolidated Securities Litigation, including (i) breach of fiduciary duty, (ii) contribution, (iii) violation of Section 14(a) of the Exchange Act and SEC Rule 14a-9, (iv) unjust enrichment, (v) waste of corporate assets, and (vi) aiding and abetting breach of fiduciary duty. The complaint seeks declaratory relief, damages, interest, unspecified equitable relief, attorneys’ fees, and other relief. The parties are conferring on service of process and a possible stay of proceedings pending resolution of the motion to dismiss in the Consolidated Securities Litigation.
Due to the early stage of these proceedings, we cannot reasonably estimate the potential range of loss, if any, or the likelihood of a potential adverse outcome. The Company disputes the allegations of wrongdoing and intends to vigorously defend against them.
In August 2019, the Company was served with a lawsuit filed in the civil courts of Milan, Italy against the Italian subsidiary of SolarEdge e-Mobility S.r.l (previously SMRE S.p.A) that purchased the shares of SolarEdge e-Mobility in the tender offer that followed the SolarEdge e-Mobility Acquisition by certain former shareholders of SolarEdge e-Mobility who tendered their shares. The lawsuit asked for damages of approximately $3,000 , representing the difference between the amount for which they tendered their shares (6 Euro per share) and 6.7 Euros per share. On December 6, 2023, the courts of Milan rendered a decision ordering SolarEdge to pay, in favor of each plaintiff, the difference between the price paid (6 Euro per share) and 6.44 Euro per share, i.e. 0.44 euros per share for a total payment of approximately $1.6 million Euros. The Company has paid the amount due under the judgement and appealed this decision. The first hearing was held on November 27, 2024, and the case was adjourned to January 14, 2026.
On January 13, 2025, Stellantis Europe S.p.A. (“Stellantis”) submitted an application for injunctive relief, to the Court of Turin, Italy, claiming that SolarEdge e-Mobility was allegedly in breach of contract. The application for injunctive relief is aimed at obtaining the following interim measures: i) order the Company to resume supply of spare parts and technical assistance activities in favor of Stellantis; and ii) to order the Company to pay a penalty of 100,000 Euro for each day of delay in fulfilling the order above. At a hearing on February 25, 2025 the parties discussed the case and the judge reserved any decision. We are waiting for the Court decision. The Company disputes the allegations of wrongdoing and intends to vigorously defend against them.
As of March 31, 2025, the Company recorded an accrual of $449 for legal claims which was recorded under accrued expenses and other current liabilities.
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | F - 24
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
NOTE 15: ACCUMULATED OTHER COMPREHENSIVE LOSS
The following table summarizes the changes in accumulated balances of other comprehensive gain (loss), net of taxes:
|
Three Months Ended March 31,
|
||||||||
|
2025
|
2024
|
|||||||
|
Unrealized gains (losses) on available-for-sale marketable securities
|
||||||||
|
Beginning balance
|
$
|
(
|
)
|
$
|
(
|
)
|
||
|
Revaluation
|
|
|
||||||
|
Tax on revaluation
|
|
(
|
)
|
|||||
|
Net current period other comprehensive income
|
|
|
||||||
|
Ending balance
|
$
|
|
$
|
(
|
)
|
|||
|
Unrealized gains (losses) on cash flow hedges
|
||||||||
|
Beginning balance
|
$
|
|
$
|
|
||||
|
Revaluation
|
(
|
)
|
(
|
)
|
||||
|
Tax on revaluation
|
(
|
)
|
|
|||||
|
Other comprehensive loss before reclassifications
|
(
|
)
|
(
|
)
|
||||
|
Reclassification
|
(
|
)
|
(
|
)
|
||||
|
Tax on reclassification
|
|
|
||||||
|
Gains reclassified from accumulated other comprehensive income (loss)
|
(
|
)
|
(
|
)
|
||||
|
Net current period other comprehensive loss
|
(
|
)
|
(
|
)
|
||||
|
Ending balance
|
$
|
|
$
|
|
||||
|
Foreign currency translation adjustments on intra-entity transactions that are of a long-term investment in nature
|
||||||||
|
Beginning balance
|
$
|
(
|
)
|
$
|
(
|
)
|
||
|
Revaluation
|
(
|
)
|
(
|
)
|
||||
|
Ending balance
|
$
|
(
|
)
|
$
|
(
|
)
|
||
|
Unrealized gains (losses) on foreign currency translation
|
||||||||
|
Beginning balance
|
$
|
|
$
|
(
|
)
|
|||
|
Revaluation
|
|
(
|
)
|
|||||
|
Ending balance
|
$
|
|
$
|
(
|
)
|
|||
|
Total
|
$
|
(
|
)
|
$
|
(
|
)
|
||
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | F - 25
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
The following table summarizes the reclassifications from “Accumulated other comprehensive loss” into the statement of loss:
|
Details about Accumulated Other Comprehensive Loss Components
|
Three Months Ended
March 31,
|
Affected Line Item in the Statement of Loss
|
|||||||
|
2025
|
2024
|
||||||||
|
Cash flow hedges
|
|||||||||
|
$
|
|
$
|
|
Cost of revenues
|
|||||
|
|
|
Research and development
|
|||||||
|
|
|
Sales and marketing
|
|||||||
|
|
|
General and administrative
|
|||||||
|
$
|
|
$
|
|
Total, before income taxes
|
|||||
|
(
|
)
|
(
|
)
|
Tax benefits (income taxes)
|
|||||
|
Total reclassifications for the period
|
$
|
|
$
|
|
Total, net of tax benefits (income taxes)
|
||||
NOTE 16: OTHER OPERATING EXPENSE (INCOME)
The following table presents the expenses (income) recorded in the three months ended March 31, 2025, and 2024:
|
Three Months Ended
March 31,
|
||||||||
|
2025
|
2024
|
|||||||
|
Income from settlement agreements associated with contractual commitments
|
$
|
(
|
)
|
$
|
|
|||
|
Impairment and disposal by abandonment of property, plant and equipment
|
|
|
||||||
|
Other
|
(
|
)
|
|
|||||
|
Total other operating expense (income), net
|
$
|
(
|
)
|
$
|
|
|||
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | F - 26
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
NOTE 17: RESTRUCTURING AND OTHER EXIT ACTIVITIES
On January 21, 2024, the Company announced the adoption of a restructuring plan in response to challenging industry conditions (the “Restructuring Plan”). Under the Restructuring Plan, the Company reduced its headcount by approximately 900 employees over the first half of 2024 in an involuntary workforce reduction. The adoption of the Restructuring Plan follows the Company’s previous measures taken to align with current market conditions, including termination of manufacturing in Mexico, reduction of manufacturing capacity in China, and discontinuation of the Company’s light commercial vehicle e-mobility activity. On July 15, 2024, the Company announced additional workforce reductions, resulting in the layoff of 400 employees.
On November 27, 2024, the Company announced the closure of its Energy Storage Division. In connection with the closure, the Company expects to reduce its headcount by approximately 500 employees, primarily in manufacturing positions in South Korea. This closure and associated headcount reduction represented approximately 12% of the Company’s overall employee population, at the time, almost all of whom will be dismissed over the first half of 2025. The Company has determined that the discontinuation of its Energy Storage activity does not represent a strategic shift that will have a major effect on the Company's operations and financial results and therefore it did not meet the criteria for discontinued operations classification.
Restructuring and other exit charges for the three months ended March 31, 2025, by type of cost were as follows:
|
Employee
termination costs
|
Contract termination and other
|
Total
|
||||||||||
|
Cost of revenues
|
$
|
|
$
|
|
$
|
|
||||||
|
Research and development
|
|
|
|
|||||||||
|
Sales and marketing
|
|
|
|
|||||||||
|
General and administrative
|
|
|
|
|||||||||
|
Other operating expenses
|
|
(
|
)
|
(
|
)
|
|||||||
|
Total
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||
Restructuring and other exit charges for the three months ended March 31, 2024, by type of cost were as follows:
|
Employee
termination costs
|
Contract termination and other
|
Total
|
||||||||||
|
Cost of revenues
|
$
|
|
$
|
|
$
|
|
||||||
|
Research and development
|
|
|
|
|||||||||
|
Sales and marketing
|
|
|
|
|||||||||
|
General and administrative
|
|
|
|
|||||||||
|
Total
|
$
|
|
$
|
|
$
|
|
||||||
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | F - 27
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
The Company’s liability balance for the restructuring and other exit charges is as follows:
|
Employee termination
costs
|
Contract termination and other
|
|||||||
|
Balance as of December 31, 2024
|
$
|
|
$
|
|
||||
|
Charges
|
|
|
||||||
|
Cash payments
|
(
|
)
|
|
|||||
|
Non-cash utilization and other
|
|
(
|
)
|
|||||
|
Balance as of March 31, 2025
|
$
|
|
$
|
|
||||
NOTE 18: INCOME TAXES
For the three months ended March 31, 2025, the Company reported income taxes at an effective tax rate of negative 6.2 % including discrete items, compared to the three months ended March 31, 2024, where the Company reported income taxes at an effective tax rate of 13.1 %.
The negative effective tax rate in the three months ended March 31, 2025 resulted primarily from the valuation allowance on current losses, coupled with withholding taxes incurred on certain intra-group interest payments and additional tax payable as a result of the settlement with the Israeli Taxes Authority (as further detailed below). The effective tax rate in the corresponding period in 2024 was mainly due to impairments and disposals, which significantly increased the quarterly loss before income tax, partially offset by higher tax expenses resulting from an increase in the valuation allowance during that quarter.
Deferred tax assets are evaluated for future realization and reduced by a valuation allowance to the extent that the Company believes they will not be realized. The Company considers all available evidence, including historical information, long range forecast of future taxable income and evaluation of tax planning strategies. Amounts recorded for valuation allowance can result from a complex series of judgments about future events and can rely on estimates and assumptions. Based primarily on the negative evidence outweighing the positive evidence, including the Company's three year cumulative, consolidated GAAP loss, historical tax losses and the difficulty in forecasting excess tax benefits related to equity-based compensation, the Company believes there is uncertainty as to when it will be possible to utilize certain net operating losses (each an “NOL”), credit carryforwards and other deferred tax assets. Therefore, the Company recorded a valuation allowance against the deferred tax assets for which it is more-likely-than-not they will not be realized.
Should the Company's operating results improve and projections show continued utilization of the tax attributes, the Company would consider that as significant positive evidence and future reassessment may result in the determination that all or a portion of the valuation allowance is no longer required. If this were to occur, any reversal of the valuation allowance would result in a corresponding non-cash income tax benefit, thereby increasing total DTAs.
During March 2025, SolarEdge Technologies, Ltd. (the “Israeli Subsidiary”) reached a settlement agreement with the Israeli Tax Authority settling all issues in dispute for tax years 2016 - 2018, in consideration for a payment of NIS 100 million (approximately $27 million). Accordingly, the Israeli Subsidiary recorded a current tax payable for the settlement amount and released approximately $25 million of its provision for uncertain tax positions for these years (including related accruals for interest and penalties). The settlement amount is payable in monthly payments over 3 years and can be prepaid in full at any point. The amount payable bears interest and is linked to the Consumer Prices Index.
The Company accrues interest and penalties related to unrecognized tax benefits in its provision for income taxes. The total amount of penalties and interest as of March 31, 2025 and December 31, 2024 were $2,032 and $9,165 , respectively.
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | F - 28
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
NOTE 19: LOSS PER SHARE
The following table presents the computation of basic and diluted loss per share (“EPS”):
|
Three Months Ended March 31,
|
||||||||
|
2025
|
2024
|
|||||||
|
Basic EPS:
|
||||||||
|
Numerator:
|
||||||||
|
Net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
||
|
Denominator:
|
||||||||
|
Shares used in computing net loss per share of common stock, basic
|
|
|
||||||
|
Diluted EPS:
|
||||||||
|
Numerator:
|
||||||||
|
Net loss attributable to common stock, diluted
|
$
|
(
|
)
|
$
|
(
|
)
|
||
|
Denominator:
|
||||||||
|
Shares used in computing net loss per share of common stock, diluted
|
|
|
||||||
|
Loss per share:
|
||||||||
|
Basic and Diluted
|
$
|
(
|
)
|
$
|
(
|
)
|
||
The following outstanding shares of common stock equivalents were excluded from the calculation due to their antidilutive nature:
|
Three Months Ended March 31,
|
||||||||
|
2025
|
2024
|
|||||||
|
Stock-based awards
|
|
|
||||||
|
Notes due 2025
|
|
|
||||||
|
Notes due 20291
|
|
|
||||||
|
Total shares excluded
|
|
|
||||||
1 In conjunction with the issuance of the Notes 2029, in June 2024, the Company used approximately $
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | F - 29
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
NOTE 20: SEGMENT INFORMATION
Following the sale of Automation Machines and the discontinuation of the Energy Storage activity in 2024, the Company now operates as one operating segment that constitutes consolidated results. The Company recast its comparative numbers to conform to current period presentation.
The Company's Chief Executive Officer, who is the chief operating decision maker (“CODM”), makes resource allocation decisions and assesses performance based on financial information presented on a consolidated net loss, accompanied by disaggregated information about significant expenses.
The Company’s CODM does not regularly review asset information and, therefore, the Company does not report asset information.
The segment includes the design, development, manufacturing, and sales of an intelligent inverter solution designed to maximize power generation at the individual PV module level and batteries for PV applications. The segment solution consists mainly of the Company’s power optimizers, inverters, batteries and cloud‑based monitoring platform.
The following tables present information on reportable loss for the period presented:
|
Three Months Ended March 31,
|
||||||||
|
2025
|
2024
|
|||||||
|
Revenues
|
$
|
|
$
|
|
||||
|
Less:
|
||||||||
|
Direct costs of goods
|
|
|
||||||
|
Salaries1
|
|
|
||||||
|
Inventory costs
|
|
|
||||||
|
Shipment and logistics
|
|
|
||||||
|
Warranty
|
(
|
)
|
|
|||||
|
Depreciation and amortization
|
|
|
||||||
|
Directly related overhead costs
|
|
|
||||||
|
Other2
|
|
|
||||||
|
Financial (income) expense, net
|
(
|
)
|
|
|||||
|
Income taxes (tax benefit)
|
|
(
|
)
|
|||||
|
Net loss from equity method investments
|
|
|
||||||
|
Net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
||
1 Including stock-based compensation expenses.
2 Represents indirect costs of goods, consultants and sub-contractors, marketing and bad debt.
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | F - 30
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except per share data)
The following table presents revenues disaggregated by geographical location:
|
Three Months Ended March 31,
|
||||||||
|
2025
|
2024
|
|||||||
|
United States
|
$
|
|
$
|
|
||||
|
Europe
|
|
|
||||||
|
International markets
|
|
|
||||||
|
Total revenues
|
$
|
|
$
|
|
||||
On April 1, 2025, the Company sold one of its battery cell manufacturing facilities and certain other related assets, in South Korea for $
On April 30, 2025, the Company divested from its PV tracker business, in order to focus on the Company's core solar business.
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | F - 31
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Statements contained in this Form 10-Q or statements incorporated by reference from documents we have filed with the Securities and Exchange Commission may contain forward-looking statements that are based on our management’s expectations, estimates, projections, beliefs and assumptions in accordance with information currently available to our management. Forward-looking statements should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included in Part 1, Item 1 of this report. This discussion contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, technology developments, new products and services, financing and investment plans, competitive position, backlog, industry and regulatory environment, effects of acquisitions, growth opportunities, potential future impairments, and the effects of competition. Forward-looking statements include statements that are not historical facts and can be identified by terms such as “anticipate,” “believe,” “could,” “seek,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or similar expressions and the negatives of those terms.
Forward-looking statements inherently involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Given these uncertainties, you should not place undue reliance on forward-looking statements. Forward-looking and other statements regarding our sustainability efforts and aspirations are not an indication that these statements are necessarily material to investors or requiring disclosure in our filing with the Securities and Exchange Commission (“SEC”). In addition, historical, current and forward-looking sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve and assumptions that are subject to change in the future, including future rule-making. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this filing. Important factors that could cause actual results to differ materially from our expectations include:
| • | future demand for renewable energy including solar energy solutions; |
| • | our ability to forecast demand for our products accurately and to match production to such demand as well as our customers' ability to forecast demand based on inventory levels; |
| • | changes in tax laws, tax treaties, and regulations or the interpretation of them, including the Inflation Reduction Act; |
| • | changes in the U.S. and global trade environments, including the imposition and/or increase of import tariffs or other restrictive trade measures; |
| • | ability to successfully operate our global operations with a reduced work force; |
| • | macroeconomic conditions in our domestic and international markets, as well as inflation concerns, rising interest rates and recessionary concerns; |
| • | changes, elimination or expiration of government subsidies and economic incentives for on-grid solar energy applications; |
| • | 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; |
| • | loss of key executives, and our ability to retain key personnel and attract additional qualified personnel |
| • | shortages, delays, price changes, or cessation of operations or production affecting our suppliers of key components; |
| • | delays, disruptions, and quality control problems in manufacturing; |
| • | our dependence upon a small number of outside contract manufacturers and limited or single source suppliers; |
| • | changes to net metering policies or the reduction, elimination or expiration of government subsidies and economic incentives for on-grid solar energy applications; |
| • | capacity constraints, delivery schedules, manufacturing yields, and costs of our contract manufacturers and availability of components; |
| • | performance of distributors and large installers in selling our products; |
| • | consolidation in the solar industry among our customers and distributors; |
| • | our ability to effectively manage changes in our organization and expansion into new markets; |
| • | our ability to recognize expected benefits from restructuring plans; |
| • | any unauthorized access to, disclosure, or theft of personal information or unauthorized access to our network or other similar cyber incidents; |
| • | our ability to implement our new ERP system; |
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | 3
| • | our ability to integrate acquired businesses; |
| • | disruption to our business operations due to the evolving state of war in Israel and political conditions related to the Israeli government's plans to significantly reduce the Israeli Supreme Court's judicial oversight; |
| • | our dependence on ocean transportation to timely deliver our products in a cost-effective manner; |
| • | fluctuations in global currency exchange rates; |
| • | the impact of evolving legal and regulatory requirements, including corporate social responsibility and sustainability, requirements; |
| • | existing and future responses to and effects of pandemics, epidemics or other health crises; |
| • | federal, state, and local regulations governing the electric utility industry with respect to solar energy; |
| • | business practices and regulatory compliance of our raw material suppliers; |
| • | our ability to maintain our brand and to protect and defend our intellectual property; |
| • | volatility of our stock price; |
| • | our customers’ financial stability, creditworthiness, and debt leverage ratio; |
| • | our ability to effectively design, launch, market, and sell new generations of our products and services; |
| • | our ability to retain, and events affecting, our major customers; |
| • | natural disasters, public health events and other disruptions; |
| • | impairment of our goodwill or other long-lived and intangible assets |
| • | our liquidity and ability to service our debt; |
the other factors set forth below in Part II, Item 1.A under “Risk Factors and in Part I, Item 1A under Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 and in other documents we file from time to time with the SEC that disclose risks and uncertainties that may affect our business.
The preceding list is not intended to be an exhaustive list of all of our forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
Overview
We develop, manufacture and sell products in a solar segment that addresses a broad range of energy market segments through our diversified product offering, including residential, commercial and large scale photovoltaic or PV, home energy management, grid services and virtual power plants. In prior years, we also had product offerings for the e-mobility market, automation machines (“Automation Machines”) and energy storage. In October 2023, we decided to discontinue our light commercial vehicle (“LCV”), e-Mobility activity. In October 2024, the Company completed the sale of Automation Machines. Additionally, in November 2024, the Company announced the closure of its Energy Storage Division, as part of its focus on its core activities.
Following the sale of Automation Machines and the discontinuation of the Energy Storage activity in 2024, the Company now operates as one operating segment, the Solar segment, that constitutes consolidated results.
In light of the Inflation Reduction Act legislation in the United States, which incentivizes the local manufacturing of renewable energy products by providing benefits to installers for the purchase and installation of product with domestic content, as well as by incentivizing local manufacturing of our products, we manufacture single phase inverters in Texas and optimizers in Florida. We are also currently increasing our manufacturing of three-phase inverters in Florida and batteries in Utah. With the ramp-up of new sites and as part of an effort to centralize and improve operational activity, we have discontinued manufacturing in China, Mexico, and Hungary. We continue to maintain manufacturing capabilities in Vietnam with a third-party manufacturer. As of March 31, 2025, we shipped approximately 134.3 million power optimizers, 5.9 million inverters and 346.9 thousand batteries for PV applications. Over 4.3 million installations, many of which may include multiple inverters, are currently connected to, and monitored through, our cloud-based monitoring platform. As of March 31, 2025, we shipped approximately 57.4 GW of our DC optimized inverter systems and approximately 2.4 GWh of our batteries for PV applications.
Our revenues for the three months ended March 31, 2025 and March 31, 2024 were $219.5 million and $204.4 million, respectively. Gross profit as a percentage of revenue was 8.0%, for the three months ended March 31, 2025, compared to gross loss as a percentage of revenue of 12.8%, for the three months ended March 31, 2024. Net loss was $98.5 million and $157.3 million for the three months ended March 31, 2025, and March 31, 2024, respectively.
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | 4
Global Circumstances Influencing our Business and Operations
Demand for Products
We have seen a slowdown in demand for our products from our direct customers since the second part of the third quarter of 2023, throughout 2024 and into 2025. This was a result of slowed market demand beginning in the third quarter of 2023 and persisting throughout 2024 and into 2025, as distributors began to take actions to reduce inventory levels. In particular, beginning in the second part of the third quarter of 2023, we experienced substantial unexpected cancellations and push outs of existing backlog, mostly from our European distributors. We attribute these cancellations and pushouts to high inventory in the channels and slower than expected installation rates both in the United States and to a greater extent in Europe. The slowdown continued in the subsequent quarters of 2023, throughout 2024 and the first quarter of 2025.
Trade Tariff Uncertainties
The current trade situation is creating uncertainty about what the impacts new or existing tariffs, trade restrictions or retaliatory actions may have on us, the solar industry, our partners, and our customers. In the last two and a half years, we have relocated our contract manufacturing to the United States. However, certain critical subcomponents for our products are still sourced from outside the United States. If not resolved, the escalation in trade tensions or the implementation of broader tariffs, trade restrictions or other retaliatory measures on our products or components originating from countries outside of the United States, or from the United States, could adversely impact our ability to source necessary components, manufacture products at competitive cost, or sell our products at prices customers are willing to pay. Certain of the components used in our products are being imported to the United States from China, which may be subject to significantly increased tariffs. In light of the aforementioned, we are exploring alternative suppliers outside of China, however, there is no assurance that we will be successful in identifying suitable alternatives, or that such alternatives, if identified, will not result in increased costs or reduced operational efficiency.
If the price of solar power systems increases, as well as the cost of manufacturing our products in the United States, the use of solar power systems could become less economically feasible and could further reduce our gross margins or reduce the demand of solar power systems manufactured and sold, which in turn may decrease demand for our products. Additionally, existing or future tariffs may negatively affect key partners, suppliers and manufacturers. Such outcomes could adversely affect the amount or timing of our revenue, results of operations or cash flows, and continuing uncertainty could cause sales volatility, price fluctuations or supply shortages or cause our customers to advance or delay their purchase of our products. Any such developments could materially and adversely affect our business operations, results of operations and cash flows.
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | 5
Disruptions Due to the War in Israel
Due to the war that began on October 7, 2023, some of our employees in Israel were called to active reserve duty and additional employees may be called in the future, if needed. In the three months ended March 31, 2025 approximately 5% of our employees in Israel have been called to active reserve duty for varying periods. While our offices and facilities are open worldwide, including in Israel, and, to date, we have not had disruptions to our ability to manufacture and deliver products and services to customers. Although the situation is somewhat stabilized due to ceasefires between Israel and Hezbollah, an escalation of the current conflicts in Israel could materially adversely affect our business, financial condition, and results of operations. Due to the ongoing and evolving nature of the conflict in Israel, and the extent of these events, the adverse effect on our business operations is still unknown.
The majority of our key employees and officers are residents of Israel. If any of our facilities in Israel were to be damaged, destroyed or otherwise rendered unable to operate, whether due to war, acts of hostility, earthquakes, fire, floods, storms, other natural disasters, employee malfeasance, terrorist acts, power outages or otherwise, or if performance of our research and development is disrupted for any other reason, such an event could delay commercialization of our products, and if we choose to manufacture all or any part of them internally, jeopardize our ability to manufacture our products as promptly as our prospective customers will likely expect, or possibly at all. If we experience delays in achieving our development objectives within a timeframe that meets our prospective customers’ expectations, our business, prospects, financial results and reputation could be harmed.
Inflation Reduction Act
In August 2022, the U.S. government enacted the Inflation Reduction Act of 2022 (the “IRA”), which includes several provisions intended to accelerate U.S. manufacturing and adoption of clean energy, battery and energy storage, electrical vehicles, and other solar products and is expected to impact our business and operations. As part of such incentives, the IRA, among other things, extends the investment tax credit and production tax credit through 2034 and is therefore expected to increase the demand for solar products. The IRA also further incentivizes residential and commercial solar customers and developers through the inclusion of a tax credit for qualifying energy projects of up to 30%. Section 45X of the IRA offers AMPTCs that incentivize the production of eligible components within the U.S. To that end, we established manufacturing capabilities in the U.S. in 2023. These provisions of the law are new and regulations and guidance concerning their implementation are gradually being published by the U.S. Treasury Department. On October 24, 2024, final regulations concerning the application of IRC §45X were published. The regulations contain detailed rules concerning eligibility, qualifying and accounting for AMPTCs. Of particular relevance to the Company are the tax credits that we generate as a result of rules concerning the qualification and measurement of AMPTCs to Residential Inverters, Commercial Inverters and DC-Optimized Inverter Systems. In 2024 and the first quarter of 2025, we sold a significant part of the AMPTCs that we generated from our U.S. production of eligible components.
In January 2025, the new U.S. administration issued executive orders aimed at pausing grants and other government funding that have not already been dispersed to under the IRA, creating uncertainty regarding the ability to secure government awards and grants in the future. This potential loss of financial support could adversely impact our business, and potentially the overall financial performance of the Company.
As of March 31, 2025 and December 31, 2024 benefits from AMPTCs of $82,946 and $80,516, respectively, were recorded as a tax prepayment within prepaid expenses and other current assets.
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | 6
Key Operating Metrics
In managing our business and assessing financial performance, we supplement the information provided in our financial statements with other operating metrics. These operating metrics are utilized by our management to evaluate our business, measure our performance, identify trends affecting our business and formulate projections. We use metrics relating to shipments of inverters, power optimizers and megawatts to evaluate our sales performance and to track market acceptance of our products.
We provide the “megawatts shipped” and “megawatt hours shipped” metrics, which are calculated based on inverter or battery nameplate capacity shipped, respectively, to show adoption of our system on a nameplate capacity basis. Nameplate capacity shipped is the maximum rated power output capacity of an inverter or battery, and corresponds to our financial results in that higher total nameplate capacities shipped are generally associated with higher total revenues. However, revenues may increase in a non-correlated manner to the “megawatt shipped” metric since other products, such as power optimizers, are not accounted for in this metric.
Three months ended March 31, | ||||||||
2025 | 2024 | |||||||
Inverters shipped | 84,533 | 68,882 | ||||||
Power optimizers shipped | 2,251,596 | 1,070,987 | ||||||
Megawatts shipped1 | 1,208 | 946 | ||||||
Megawatt hours shipped - batteries for PV applications | 177 | 128 | ||||||
1 Excluding batteries for PV applications, based on the aggregate nameplate capacity of inverters shipped during the applicable period. Nameplate capacity is the maximum rated power output capacity of an inverter as specified by the manufacturer.
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | 7
Results of Operations
The results of operations presented below should be reviewed in conjunction with the condensed consolidated financial statements and related notes included elsewhere in this report.
The following table sets forth selected consolidated statements of loss data for each of the periods indicated.
Three Months Ended March 31, | ||||||||
2025 | 2024 | |||||||
(In thousands) | ||||||||
Revenues | 219,480 | 204,399 | ||||||
Cost of revenues | 201,944 | 230,586 | ||||||
Gross profit (loss) | 17,536 | (26,187 | ) | |||||
Operating expenses: | ||||||||
Research and development | 61,997 | 75,351 | ||||||
Sales and marketing | 31,657 | 38,911 | ||||||
General and administrative | 30,183 | 30,865 | ||||||
Other operating expense (income), net | (3,575 | ) | 2,391 | |||||
Total operating expenses | 120,262 | 147,518 | ||||||
Operating loss | (102,726 | ) | (173,705 | ) | ||||
Financial income (expense), net | 10,068 | (7,064 | ) | |||||
Other income, net | 148 | - | ||||||
Loss before income taxes | (92,510 | ) | (180,769 | ) | ||||
Tax benefits (income taxes) | (5,726 | ) | 23,754 | |||||
Net loss from equity method investments | (287 | ) | (296 | ) | ||||
Net loss | (98,523 | ) | (157,311 | ) | ||||
Comparison of three months ended March 31, 2025, and the three months ended March 31, 2024
Revenues
Three Months Ended March 31, | 2024 to 2025 | |||||||||||||||
2025 | 2024 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Revenues | 219,480 | 204,399 | 15,081 | 7.4 | % | |||||||||||
Revenues increased by $15.1 million, or 7.4%, in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to an increase of $36.4 million related to an increase in the number of power optimizers sold; and an increase of $3.8 million related to an increase in the number of batteries for PV applications sold; these were partially offset by (i) a decrease of $14.1 million related to less ancillary solar products sold; (ii) a decrease of $3.7 million in revenue from inverters sold, related to a price reduction, mainly in Europe; (iii) a decrease of $3.5 million in revenues due to the discontinuation of our Energy Storage Business; and (iv) a decrease of $3.4 million in revenues from automation machines, which was sold in October 2024.
Revenues from outside of the U.S. comprised 39.8% of our revenues in the three months ended March 31, 2025, as compared to 68.1% in the three months ended March 31, 2024.
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | 8
The number of power optimizers recognized as revenues increased by approximately 1.0 million units, or 98.2%, from approximately 1.1 million units in the three months ended March 31, 2024 to approximately 2.1 million units in the three months ended March 31, 2025. The number of inverters recognized as revenues increased by approximately 10 thousand units, or 15.5%, from approximately 62.3 thousand units in the three months ended March 31, 2024 to approximately 72.0 thousand units in the three months ended March 31, 2025. The megawatt hours of batteries for PV applications recognized as revenues increased by approximately 67.6 megawatt hours, or 71.9% from approximately 94.0 in the three months ended March 31, 2024 to approximately 162.0 megawatt hours in the three months ended March 31, 2025.
Our blended Average Selling Price (“ASP”) per watt for solar products excluding batteries for PV applications is calculated by dividing the solar revenues, excluding revenues from the sale of batteries for PV applications, by the nameplate capacity of inverters shipped. Our blended ASP per watt for solar products increased by $0.001, or 0.4%, in the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. This increase in blended ASP per watt is mainly attributed to a higher number of power optimizers shipped, compared to the number of inverters shipped; as well as higher ASP due to increase in U.S. sales compared to sales in Europe, which is characterized by a higher demand for residential products, which have a higher ASP per watt out of our total solar product mix. This increase in blended ASP per watt was partially offset by price reductions, mainly in Europe.
Our blended ASP per watt/hour for batteries for PV applications is calculated by dividing batteries for PV applications revenues, by the nameplate capacity of batteries for PV applications shipped. Our blended ASP per watt/hour for batteries for PV applications decreased by $0.116, or 30.2%, in the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The decrease in blended ASP per watt/hour is mainly attributed to price reduction of our batteries for PV applications as well as an increase in the sale of our three-phase battery that is sold at a lower ASP per watt/hour.
Cost of Revenues and Gross Profit (loss)
Three Months Ended March 31, | 2024 to 2025 | |||||||||||||||
2025 | 2024 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Cost of revenues | 201,944 | 230,586 | (28,642 | ) | (12.4 | )% | ||||||||||
Gross profit (loss) | 17,536 | (26,187 | ) | 43,723 | (167.0 | )% | ||||||||||
Cost of revenues decreased by $28.6 million, or 12.4%, in the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, primarily due to:
| • | a decrease in warranty expenses and warranty accruals of $17.2 million associated primarily with a lower cost of materials; |
| • | a decrease in inventory costs of $8.7 million related to lower write-downs; and |
| • | a decrease in the direct cost of revenues sold of $5.9 million, associated primarily with the AMPTC recognized, which was partially offset by an increase in costs due to the manufacturing in the U.S., and a lower cost of products sold. |
Gross profit as a percentage of revenue in the three months ended March 31, 2025 was 8.0%, as compared to gross loss as a percentage of revenue of 12.8%, in the three months ended March 31, 2024, primarily due to:
| • | a decrease in warranty expenses and warranty accruals of approximately 8% associated primarily with a lower cost of materials; |
| • | a decrease of approximately 7% in restructuring plan and ramp up costs; and |
| • | a decrease of approximately 4% in indirect cost associated primarily with lower inventory write-downs. |
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | 9
Operating Expenses:
Research and Development
Three Months Ended March 31, | 2024 to 2025 | |||||||||||||||
2025 | 2024 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Research and development | 61,997 | 75,351 | (13,354 | ) | (17.7 | )% | ||||||||||
Research and development costs decreased by $13.4 million or 17.7%, in the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily due to:
| • | a decrease in personnel-related costs of $7.2 million resulting from our Restructuring Plan designed to reduce operating expenses and align our cost structure to current market dynamics; |
| • | a decrease in material consumption of $2.2 million; and |
| • | a decrease in depreciation and amortization of $1.5 million. |
Sales and Marketing
Three Months Ended March 31, | 2024 to 2025 | |||||||||||||||
2025 | 2024 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Sales and marketing | 31,657 | 38,911 | (7,254 | ) | (18.6 | )% | ||||||||||
Sales and marketing expenses decreased by $7.3 million, or 18.6%, in the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily due to a decrease in personnel-related costs of $6.4 million resulting from our Restructuring Plan designed to reduce operating expenses and align our cost structure to current market dynamics;
General and Administrative
Three Months Ended March 31, | 2024 to 2025 | |||||||||||||||
2025 | 2024 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
General and administrative | 30,183 | 30,865 | (682 | ) | (2.2 | )% | ||||||||||
General and administrative expenses have decreased by $0.7 million, or 2.2%, in the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily due to a net reversal of doubtful debt in the amount of $8.1 million in the three months ended March 31, 2025, as compared to an expense of $3.0 million, in the three months ended March 31, 2024, mainly related to collection of doubtful debt.
This decrease was partially offset by:
| • | an increase of $8.1 million primarily due to a penalty for postponing the commencement of our campus lease agreement; |
| • | an increase in personnel-related costs, of $1.9 million primarily due to one-time restructuring costs and changes in management, which were partially offset by our Restructuring Plan designed to reduce operating expenses and align our cost structure to current market dynamics. |
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | 10
Other operating expense (income), net
Three Months Ended March 31, | 2024 to 2025 | |||||||||||||||
2025 | 2024 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Other operating expense (income), net | (3,575 | ) | 2,391 | (5,966 | ) | (249.5 | )% | |||||||||
Other operating income, net, was $3.6 million in the three months ended March 31, 2025 compared to other operating expense, net, of $2.4 million in the three months ended March 31, 2024 primarily due to:
| • | an increase of $3.1 million in income related to lower than expected discontinuation charges; |
| • | a decrease of $1.7 million in losses related to impairment of property, plant and equipment; and |
| • | a decrease of $0.9 million in losses from sale of property, plant and equipment. |
Financial income (expense), net
Three Months Ended March 31, | 2024 to 2025 | |||||||||||||||
2025 | 2024 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Financial income (expense), net | 10,068 | (7,064 | ) | 17,132 | (242.5 | )% | ||||||||||
Financial income, net, was $10.1 million in the three months ended March 31, 2025, compared to financial expense, net, in the amount of $7.1 million in the three months ended March 31, 2024, primarily due to:
| • | gain of $8.7 million in the three months ended March 31, 2025 as compared to loss of $9.5 million due to fluctuations in foreign exchange rates between the Euro and the NIS, against the U.S. dollar; and |
| • | gain of $1.2 million in the three months ended March 31, 2025 as compared to loss of $2.3 million due to credit loss related to loans receivable. |
These were partially offset by:
| • | a decrease of $3.2 million in interest income related to our marketable securities investments; and |
| • | an increase of $1.9 million in interest expenses related to our Notes 2029. |
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | 11
Other income, net
Three months ended March 31, | 2024 to 2025 | |||||||||||||||
2025 | 2024 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Other income, net | 148 | - | 148 | 100.0 | % | |||||||||||
Other income, net increased by $0.1 million, or 100.0%, in the three months ended March 31, 2025, compared to the three months ended March 31, 2024, due to gain from the repurchase of convertible notes, in the three months ended March 31, 2025.
Income taxes (tax benefits)
Three months ended March 31, | 2024 to 2025 | |||||||||||||||
2025 | 2024 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Tax benefits (income taxes) | (5,726 | ) | 23,754 | (29,480 | ) | (124.1 | )% | |||||||||
Income taxes were $5.7 million in the three months ended March 31, 2025, compared to tax benefits in the amount of $23.8 million in the three months ended March 31, 2024 primarily due to a valuation allowance of the deferred tax assets on our current losses, withholding taxes paid on certain intra-group interest payments and additional tax payable as a result of a settlement with the Israeli Tax Authority for tax years 2016-2018.
Net loss from equity method investments
Three months ended March 31, | 2024 to 2025 | |||||||||||||||
2025 | 2024 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Net loss from equity method investments | (287 | ) | (296 | ) | 9 | (3.0 | )% | |||||||||
Net loss from equity method investments slightly decreased in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.
Net loss
Three months ended March 31, | 2024 to 2025 | |||||||||||||||
2025 | 2024 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Net loss | (98,523 | ) | (157,311 | ) | 58,788 | (37.4 | )% | |||||||||
As a result of the factors discussed above, net loss decreased by $58.8 million or 37.4% in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | 12
Liquidity and Capital Resources
The following table shows our cash flows from operating activities, investing activities, and financing activities for the stated periods:
Three Months Ended March 31, | ||||||||
2025 | 2024 | |||||||
(In thousands) | ||||||||
Net cash provided by (used in) operating activities | $ | 33,823 | $ | (217,019 | ) | |||
Net cash provided by investing activities | 67,597 | 149,008 | ||||||
Net cash used in financing activities | (6,237 | ) | (50,987 | ) | ||||
Increase (decrease) in cash and cash equivalents | $ | 95,183 | $ | (118,998 | ) | |||
As of March 31, 2025, our cash and cash equivalents were $401.4 million. This amount does not include $284.3 million invested in available-for-sale marketable securities, $104.5 million in restricted cash, and $3.4 million invested in deposits and restricted deposits. Our principal uses of cash are for funding our operations, capital expenditures, other working capital requirements, other investments, and the repayment of our Notes 2025. As of March 31, 2025, we have open commitments for capital expenditures in an amount of approximately $32.4 million. These commitments mainly reflect purchases of automated assembly lines and other machinery related to our manufacturing and operations. We also have purchase obligations in the amount of $234.0 million, related to raw materials and commitments for the future manufacturing of our products.
Beginning in the fourth quarter of 2024, we started to sell AMPTCs. We plan to pursue additional tax credit transfer agreements in the future.
We believe our cash and cash equivalents, and available-for-sale marketable securities will be sufficient to meet our anticipated cash needs for at least the next 12 months as well as in the longer term, including the self-funding of our capital expenditure, operational commitments and the redemption of our debt.
Operating Activities
Operating cash flows consist primarily of net loss, adjusted for certain non-cash items and changes in assets and liabilities. Cash provided by operating activities was $33.8 million in the three months ended March 31, 2025 as compared to cash used in operating activities of $217.0 million in the three months ended March 31, 2024,attributed to a decrease in net loss adjusted for certain non-cash items generated in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, as well as by lower operating working capital requirements.
Investing Activities
Investing cash flows consist primarily of capital expenditures, investment in, sales and maturities of available for sale marketable securities, investment and withdrawal of bank deposits and restricted bank deposits, cash used for acquisitions, and disbursements and receipts from collections of loans made by the Company. Cash provided by investing activities decreased by $81.4 million in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily driven by a decrease of $176.7 million in proceeds provided by sales and maturities of available-for-sale marketable securities, and an increase of $6.6 million in payment related to governmental grant, these were partially offset by a decrease of $56.8 million in purchases of available-for-sale debt investments, a decrease of $16.2 million in purchase of property plant and equipment, an increase of $12.0 million in proceeds from loans receivables, a decrease of $8.8 million in the purchase of privately-held companies and a decrease of $7.5 million in disbursements of loans made by the Company.
Financing Activities
Financing cash flows consisted primarily of repurchases of our common stock under the share repurchase program, which expired on December 31, 2024, the issuance and partial repurchase of convertible senior notes, and our employee equity incentive plans. Cash used in financing activities in the three months ended March 31, 2025 decreased by $44.8 million compared to the three months ended March 31, 2024, primarily due to a decrease of $50.0 million in cash used in share repurchases, which was partially offset by an increase of $5.1 million in cash used for the repurchase of our convertible senior notes, due in 2025 ("Notes 2025").
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | 13
Share Repurchases
On November 1, 2023, we announced the approval by the Board of Directors of a share repurchase program which authorizes the repurchase of up to $300 million of the Company’s common stock. Under the share repurchase program, repurchases can be made using a variety of methods, which may include open market purchases, block trades, privately negotiated transactions, accelerated share repurchase programs and/or a non-discretionary trading plan or other means, including through 10b5-1 trading plans, all in compliance with the rules of the SEC and other applicable legal requirements. The timing, manner, price and amount of any common share repurchases under the share repurchase program are determined by the Company in its discretion and depend on a variety of factors, including legal requirements, price and economic and market conditions. The program does not obligate SolarEdge to acquire any amount of common stock, it may be suspended, extended, modified, discontinued or terminated at any time at the Company’s discretion without prior notice, and expired on December 31, 2024.
During the three months ended March 31, 2024, the Company repurchased 505,896 shares of common stock from the open market at an average cost of $65.67 per share for a total of $33.2 million.
Convertible Senior Notes
On June 28, 2024, we sold an aggregate principal amount of $300 million of 2.25% convertible senior notes due in 2029 in a transaction exempt from registration pursuant to Rule 144A and Regulation S under the Securities Act. The net proceeds from the offering of the Notes 2029 were approximately $293.2 million, after deducting fees and estimated expenses. Separately, we have entered into capped call transactions. We used approximately $25.2 million of the net proceeds from this offering to pay the cost of the capped call transactions and approximately $267.9 million of the net proceeds from this offering to repurchase $285.0 million principal amount of its outstanding 0.000% convertible notes due 2025. As a result of the repurchase of Notes 2025, we recognized a gain of $15.5 million which was recorded under other income. We intend to use the remainder of the net proceeds from the offering for general corporate purposes.
On July 8, 2024, we sold an aggregate principal amount of $37 million of the Notes 2029. The Notes 2029 were sold pursuant to the Initial Purchasers’ exercise of the option granted by the Company to the Initial Purchasers to purchase additional Notes 2029, as described above in Note 11, “Convertible Senior Notes.”
In March 2025 the Company repurchased $5,250 principal amount of its Notes 2025. The Company recorded a net gain of $146 thousands under other income, from this repurchase.
Critical Accounting Policies and Significant Management Estimates
Management believes that there have been no significant changes during the three months ended March 31, 2025 to the items that we disclosed as our critical accounting policies and estimates in MD&A in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, except as mentioned in Note 1, “General” (if any).
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risk in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily a result of fluctuations in foreign currency exchange rates, customer concentrations, interest rates and commodity prices. We do not hold or issue financial instruments for trading purposes.
Foreign Currency Exchange Risk
Approximately 32.7% and 54.4% of our revenues for the three months ended March 31, 2025, and 2024, respectively, were earned in non-U.S. dollar denominated currencies other than the U.S. dollar, principally the Euro. Our expenses are generally denominated in the currencies in which our operations are located, primarily the U.S. dollar, NIS, and Euro. Our NIS denominated expenses consist primarily of personnel and overhead costs. Our consolidated results of operations and cash flows are, therefore, subject to fluctuations due to changes in foreign currency exchange rates and may be adversely affected in the future due to changes in foreign exchange rates. A hypothetical 10% change in foreign currency exchange rates between the Euro and the U.S. dollar would increase or decrease our net income by $4.0 million for the three months ended March 31, 2025. A hypothetical 10% change in foreign currency exchange rates between the NIS and the U.S. dollar would increase or decrease our net income by $12.8 million for the three months ended March 31, 2025.
For purposes of our consolidated financial statements, local currency assets and liabilities are translated at the rate of exchange to the U.S. dollar on the balance sheet date, and local currency revenues and expenses are translated at the exchange rate as of the date of the transaction or at the average exchange rate to the U.S. dollar during the reporting period.
To date, we have used derivative financial instruments, specifically foreign currency forward contracts and put and call options, to manage exposure to foreign currency risks by hedging portions of the anticipated payroll payments denominated in NIS. These derivative instruments are designated as cash flow hedges.
In addition, from time to time we enter into derivative financial instruments to hedge the Company’s exposure to currencies other than the U.S. dollar, mainly forward contracts to sell Euro and AUD for U.S. dollars. These derivative instruments are not designated as cash flow hedges.
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | 14
Concentrations of Major Customers
Our trade accounts receivables potentially expose us to a concentration of credit risk with our major customers. As of March 31, 2025, three major customers jointly accounted for approximately 35.9% of our consolidated trade receivables, net balance. As of March 31, 2024, three major customers jointly accounted for approximately 36.9% of our consolidated trade receivables, net balance. For the three months ended March 31, 2025, two major customers accounted for approximately 41.4% of our total revenues. For the three months ended March 31, 2024, no single major customer contributed more than 10% of our total revenues.
Commodity Price Risk
We are subject to risk from fluctuating market prices of certain commodity raw materials which are used in our products, including Copper, Lithium, Nickel and Cobalt. Prices of these raw materials may be affected by supply restrictions or other market factors from time to time, and we do not enter into hedging arrangements to mitigate commodity risk. Significant price changes for these raw materials could reduce our operating margins if we are unable to recover such increases from our customers, and could harm our business, financial condition, and results of operations.
Item 4. Controls and Procedures.
Disclosure Controls and Procedures
Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of March 31, 2025. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Based on that evaluation, our chief executive officer and chief financial officer concluded, as of March 31, 2025, that our disclosure controls and procedures were effective and operating to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and to provide reasonable assurance that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that occurred during the first fiscal quarter of 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | 15
PART II. OTHER INFORMATION.
ITEM 1. Legal Proceedings
In the normal course of business, we may from time to time be named as a party to various legal claims, actions and complaints (including as a result of initiating such legal claims, action or complaints on behalf of the Company), including the matters described in Note 14 – “Commitments and Contingent Liabilities” to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q and in Item 3 – “Legal Proceedings” of our Annual Report on Form 10-K for the period ended December 31, 2024. It is impossible to predict with certainty whether any resulting liability from any such legal claims, actions or complaints would have a material adverse effect on our financial position, results of operations or cash flows.
ITEM 1A. Risk Factors
In addition to the other information set forth in this report, you should carefully consider the risk set forth below and the risk factors as described in Part I, Item 1A, ”Risk Factors”, in our Annual Report on Form 10-K for the year ended December 31, 2024. Other than the risk factors set forth below, there have been no material changes to the risk factors previously disclosed in the 2024 Form 10-K.
Changes in the United States trade environment, including the imposition of import tariffs, could adversely affect the amount or timing of our revenue, results of operations or cash flows.
The United States has recently imposed significant new tariffs on nearly all products and components imported into the United States, including an incremental 145% tariff applicable to goods from China, and could propose additional tariffs or increases to those already in place. A subset of certain key components, necessary for the production of our products are sourced from China, among other countries. It is unknown whether and to what extent these tariffs will remain in place or if other new laws or regulations will be adopted. Due to broad uncertainty regarding the timing, content and extent of any regulatory changes in the U.S. or abroad, we cannot predict the impact, if any, that these tariffs or other changes to trade policy could have on our business, financial condition and results of operations. Furthermore, in the U.S., these measures could be altered at any time through presidential action, judicial orders, or a bipartisan congressional response, and the resulting uncertainty surrounding domestic and foreign trade and tariff policies may amplify the impact of these developments. In light of the aforementioned we are exploring alternative suppliers outside of China, however, there is no assurance that we will be successful in identifying suitable alternatives, or that such alternatives, if identified, will not result in increased costs or reduced operational efficiency.
It is unknown what effect any such new tariffs or retaliatory actions will have on the solar industry and our customers. We have most of our contract manufacturing the U.S. However, certain components necessary for our products are currently required to be imported from outside the U.S. The resulting environment of escalating trade tension, retaliatory trade tension, or other trade actions, restrictive measures, additional trade restrictions, or barriers, if implemented on a broader range of products or components from outside the United States, or with respect to products shipped from the United States, could harm our ability to obtain necessary product components or to sell our products at prices customers are willing to pay, which could have a material adverse effect on our business, prospects, results of operations and cash flows.
Furthermore, if the price of solar power systems in the United States increases, as well as the cost of manufacturing our products in the United States, the use of solar power systems could become less economically feasible and could reduce our gross margins or reduce the demand of solar power systems manufactured and sold, which in turn may decrease demand for our products. Additionally, existing or future tariffs could negatively affect key partners, suppliers and manufacturers. Such outcomes could adversely affect the amount or timing of our revenue, results of operations or cash flows, and continuing uncertainty could cause sales volatility, price fluctuations or supply shortages or cause our customers to advance or delay their purchase of our products. It is difficult to predict what further trade-related actions governments may take, which may include additional or increased tariffs and trade restrictions, and we may be unable to quickly and effectively react to such actions. As additional new tariffs, legislation and/or regulations are implemented, or if existing trade agreements are renegotiated or if affected countries take retaliatory trade actions, such changes could have a material adverse effect on our business, financial condition, results of operations or cash flows.
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | 16
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None
ITEM 3. Defaults upon Senior Securities.
None
ITEM 4. Mine Safety Disclosures
Not applicable.
ITEM 5. Other Information
None.
ITEM 6. Exhibits
Index to Exhibit
Exhibit No. | Description | Incorporation by Reference | ||
Filed with this report. | ||||
Filed with this report. | ||||
Filed with this report. | ||||
Furnished with this report. | ||||
Furnished with this report. | ||||
101 | The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Income, (iii) Condensed Consolidated Statements of Comprehensive Income, (iv) Condensed Consolidated Statements of Stockholders’ Equity, (v) Condensed Consolidated Statements of Cash Flows, (vi) Notes to Condensed Consolidated Financial Statements, and (vii) part II, Item 5(c) | |||
104 | The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 formatted in Inline XBRL | Included in Exhibit 101 |
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | 17
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: May 8, 2025
/s/ Shuki Nir | ||
Shuki Nir Chief Executive Officer (Principal Executive Officer) |
Date: May 8, 2025
/s/ Asaf Alperovitz | ||
Asaf Alperovitz Chief Financial Officer (Principal Financial Officer) |
SOLAREDGE TECHNOLOGIES INC. | 2025 Form 10-Q | 18