It was another weak first quarter for solar solutions company SolarEdge Technologies (Nasdaq: SEDG), and the company's Q2 guidance suggests a recovery isn't anytime soon. A sign of this appeared two weeks ago, when competitor Enphase Energy (Nasdaq: ENPH) released financial statements indicating that a recovery in the market was some way off, and in response, SolarEdge's stock price also fell. In late trading yesterday, after releasing its financials, SolarEdge stock fell 8.5%.
For several quarters now, the company has been experiencing declining demand, mainly due to high inventory levels at its distributors. In the first quarter, revenues were slightly above consensus analyst estimates, at $204 million, which was 78% below the figure for the corresponding quarter of 2023. Revenues from the solar segment fell 33%, to $190 million. 45% of revenue came from Europe, 34% from the United States, and the rest from the rest of the world.
SolarEdge reported a GAAP net loss of $157 million, compared to a net profit of $138 million in the corresponding quarter. On a non-GAAP basis, net loss was $109 million, or $1.9 per share; Analysts' estimate was a loss per share of $1.57.
Cash used in operating activities was $217 million, compared to $140 million used in the prior quarter, and $7.9 million in cash generated by operating activities in the corresponding quarter of 2023. At the end of the first quarter, SolarEdge had cash and It equates to $316.3 million, net of debt, compared to $634.7 million at the end of 2023. The company used $33 million to buy back its own stock in the first quarter, at an average of $65.67 per share, which is above the current market price. .
For the second quarter, SolarEdge expects its revenue to range from $250 million to $280 million, which would represent an improvement over the first quarter, but a decline compared to the corresponding quarter in 2023. Analysts expected $306 million. Non-GAAP gross margin is expected to range between -4.0% and zero.
“Our first quarter results are consistent with our expectations for inventory clearance and typical seasonality. As we enter the spring when installations historically tend to be higher, we expect channel inventory to continue to decline and revenues to improve. In parallel, we are focusing on the combination of “New products we plan to release in the next few quarters to position ourselves for the next growth cycle in our industry.”
Earlier this year, the company announced the layoff of 900 employees, 550 of whom were in Israel.
SolarEdge has a current market cap of just over $3 billion. At its peak, the company's market capitalization was around $20 billion, and for a brief period it was the most valuable Israeli company traded in New York.
Published by Globes, Israel Business News – en.globes.co.il – on May 9, 2024.
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