SolarEdge Technologies, Inc.
CEO : Mr. Zvi Lando
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2023 Q2 | 36.2% YoY | 317.5% | 685.2% | 2023-08-01 |
Zvi Lando says,
Record Revenues and Shipment Numbers
- Record revenues of approximately $991 million
- Revenues from solar business at a record $947 million
- Shipped 5.5 million power optimizers and 335,000 inverters
- Shipped 269 megawatt hours of residential batteries, a 22% increase from last quarter
European Market Trends
- Growth in Europe was strong, with megawatt shipments growing by 52% quarter-over-quarter
- Record revenues in many countries, including Germany, the United Kingdom, Switzerland, South Africa, and Thailand
- Higher than optimal inventory levels in distribution channels, especially for solar modules
- Opportunity to grow market share in Europe due to growing complexity of the European grid
US Residential Market Trends
- Decrease in demand compared to the second half of last year due to higher interest rates and new Net Metering 3.0 regime in California
- Inventories of products in various channels are higher than normal
- Shipments to US residential markets were down 29% this quarter
- Process of inventory normalization expected to last at least through the end of the year
Positive Market Trends for 2024
- Expected increase in third-party ownership installations and storage installations
- DC coupled system offers up to 10% more energy in the evolving NEM 3.0 battery market
Digital Solution Platform
- Increased investments in energy management software, installer toolkit, and digital infrastructure
- Grid services enrollment grew by 70% in the second quarter
- Acquisition of Hark Systems enhances monitoring and connectivity capabilities
- Opportunity for differentiation in optimized interaction with the grid and energy management
Ronen Faier says,
Decrease in revenues from batteries in Europe:
- Batteries shipments were faster than the ability to ramp up inverters, resulting in built inventory within channels in Europe.
- The built inventory needs to be cleared in order to continue and grow, and this will be done by adopting or getting more inverters from the company during the third and fourth quarter.
Decrease in revenues from optimizers in Europe:
- Inverter shipments were slower to ramp compared to other products, causing installers (especially commercial installers) to install modules faster than inverters.
- Installers would take more optimizers to complete the installation of modules and then install and commission the inverters later.
Lower revenues in the United States:
- Inventories are high, but some products that are needed are still missing and will be shipped.
Relatively mixed situation in the rest of the world:
- Expecting relatively flat or slightly down revenues.
Q & A sessions,
Batteries
- Battery sales are expected to decrease substantially in the next quarter, particularly in Europe.
- There is an excess of batteries in the market due to a lack of inverters.
European Market Dynamics
- Inventory levels in Europe are relatively high, but days outstanding and point-of-sale data indicate strong demand.
- Inventory adjustments are expected to take one or two quarters.
- Fourth quarter sales in Europe are typically lower due to the start of winter and fewer installation days.
- Market dynamics are healthy, but the impact of winter and ongoing electricity concerns may affect sales.
US Market Dynamics
- Inventory levels in the US are higher than desired, and point-of-sale data shows improvement but at a lower level.
- It may take more than one or two quarters to change the situation in the US market.
Inverter and Margin Impact
- More three-phase commercial inverters will be shipped in Q3 and Q4, which have lower margins compared to other products.
- The mix of inverters and optimizers will impact the overall gross margin of the solution.
- Air shipments are expected to decrease after Q4.
Operating Margins and Expenses
- Operating margin levels are not expected to have any structural changes.
- Leverage in operating expenses is related to revenue levels rather than margins or pricing.
- The operating margin improvement model will resume once revenues increase.
No bad stock 