MILPITAS, Calif. — February 13, 2023. SolarEdge Technologies, Inc. (Nasdaq: SEDG), a global leader in smart energy technology, today announced its financial results for the fourth quarter 2022 and full year ended December 31, 2022.

Fourth Quarter 2022 Highlights

• Record revenues of $890.7 million
• Record revenues from solar segment of $837.0 million
• GAAP gross margin of 29.3%
• Non-GAAP gross margin of 2%
• Gross margin from solar segment of 4%
• GAAP operating loss of $5.2 million
• Record non-GAAP operating profit of $149.6 million
• GAAP net income of $28 million
• Record non-GAAP net income of $175 million
• GAAP net diluted earnings per share (“EPS”) of $36
• Record non-GAAP net diluted EPS of $86
• 14 Gigawatts (AC) of inverters shipped
• 6 MWh of batteries shipped

Full Year 2022 Highlights

• Record revenues of $3.11 billion, up 58% year over year from 2021
• Record revenues from solar segment of $92 billion, up 63% year over year from 2021
• GAAP gross margin of 27.2%
• Non-GAAP gross margin of 2%
• Gross margin from solar segment of 8%
• GAAP net income of $93.8 million
• Record Non-GAAP net income of $32 million
• GAAP net diluted earnings per share (“EPS”) of $1.65
• Record Non-GAAP net diluted EPS of $95
• 5 Gigawatts (AC) of inverters shipped
• 889 MWh of batteries shipped

“We are pleased with our fourth quarter results that conclude a challenging yet very successful year. The global economic and geopolitical events coupled with post pandemic dynamics created an unprecedented demand for solar energy in general and our products in particular,” said Zvi Lando, Chief Executive Officer of SolarEdge. “I am proud that our extraordinary global team of employees was able to overcome the hurdles we faced and conclude a record year in almost every element of our operations. We are excited about the opportunities of the year ahead and expect to continue our profitable growth momentum.”

Fourth Quarter 2022 Summary

The Company reported record revenues of $890.7 million, up 6% from $836.7 million in the prior quarter and up 61% from $551.9 million in the same quarter last year.

Revenues from the solar segment were a record $837.0 million, up 6% from $788.6 million in the prior quarter and up 66% from $502.7 million in the same quarter last year.

GAAP gross margin was 29.3%, up from 26.5% in the prior quarter and up from 29.1% in the same quarter last year.

Non-GAAP gross margin was 30.2%, up from 27.3% in the prior quarter and down from 30.3% in the same quarter last year.

Gross margin from the solar segment was 32.4%, up from 28.3% in the prior quarter and down from 32.8% in the same quarter last year.

GAAP operating expenses were $266.2 million, up 93% from $137.6 million in the prior quarter and up 123% from $119.5 million in the same quarter last year.

Non-GAAP operating expenses were $119.0 million, up 10% from $108.3 million in the prior quarter and up 26% from $94.1 million in the same quarter last year.

GAAP operating loss was $5.2 million, down from operating income of $84.4 million in the prior quarter and down from operating income of $41.0 million in the same quarter last year.

Non-GAAP operating income was a record $149.6 million, up 24% from $120.2 million in the prior quarter and up 105% from $72.9 million in the same quarter last year.

GAAP net income was $20.8 million, down 16% from $24.7 million in the prior quarter and down 49% from $41.0 million in the same quarter last year.

Non-GAAP net income was a record $171.5 million, up 217% from $54.1 million in the prior quarter and up 173% from $62.8 million in the same quarter last year.

GAAP net diluted EPS was $0.36, down from $0.43 in the prior quarter and down from $0.74 in the same quarter last year.

Non-GAAP net diluted EPS was a record $2.86, up from $0.91 in the prior quarter and up from $1.10 in the same quarter last year.

Cash flow from operating activities was $111.3 million, up from $5.6 million in the prior quarter and up from $89.6 million in the same quarter last year.

As of December 31, 2022, cash, cash equivalents, bank deposits, restricted bank deposits and marketable securities totaled $1.04 billion, net of debt, compared to $937.6 million on September 30, 2022.

Full Year 2022 Summary

Total record revenues of $3.11 billion, up 58% from $1.96 billion in the prior year.

GAAP gross margin was 27.2%, down from 32.0% in the prior year.

Non-GAAP gross margin was 28.2%, down from 33.5% in the prior year.

GAAP operating income was $166.1 million, down 20% from $207.1 million in the prior year.

Non-GAAP operating income was a record $441.7 million, up 37% from $321.4 million in the prior year.

GAAP net income was $93.8 million, down 45% from $169.2 million in the prior year.

Non-GAAP net income was a record $351.2 million, up 29% from $272.9 million in the prior year.

GAAP net diluted EPS was $1.65, down from $3.06 in the prior year.

Non-GAAP net diluted EPS was a record $5.95, up from $4.81 in the prior year.

Cash flow from operating activities of $31.3 million, down from $214.1 million in the prior year.

Outlook for the First Quarter 2023

The Company also provides guidance for the first quarter ending March 31, 2023 as follows:

• Revenues to be within the range of $915 million to $945 million
• Non-GAAP gross margin expected to be within the range of 28% to 31%
• Non-GAAP operating profit to be within the range of $150 million to $170 million
• Revenues from the solar segment to be within the range of $875 million to $905 million
• Gross margin from the solar segment expected to be within the range of 31% to 34%

Conference Call

The Company will host a conference call to discuss these results at 4:30 p.m. ET on Monday, February 13, 2023. The call will be available, live, to interested parties by dialing 866-952-8559. For international callers, please dial +1 785-424-1744. The Conference ID is SEDG.  To avoid a delay in connecting to the call, please dial in 10 minutes prior to the start time. A live webcast will also be available in the Investors Relations section of the Company’s website at: http://investors.solaredge.com

A replay of the webcast will be available in the Investor Relations section of the Company’s web site approximately two hours after the conclusion of the call and will remain available for approximately 30 calendar days.

About SolarEdge

SolarEdge is a global leader in smart energy technology. By leveraging world-class engineering capabilities and with a relentless focus on innovation, SolarEdge creates smart energy solutions that power our lives and drive future progress. SolarEdge developed an intelligent inverter solution that changed the way power is harvested and managed in photovoltaic (PV) systems. The SolarEdge DC optimized inverter seeks to maximize power generation while lowering the cost of energy produced by the PV system. Continuing to advance smart energy, SolarEdge addresses a broad range of energy market segments through its PV, storage, EV charging, batteries, electric vehicle powertrains, and grid services solutions. SolarEdge is online at www.solaredge.com

Use of Non-GAAP Financial Measures

The Company has presented certain non-GAAP financial measures in this release, such as non-GAAP net income, non-GAAP net diluted EPS, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income and non-GAAP gross margin from sale of solar products. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either exclude or include amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States, or GAAP. Reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure can be found in the accompanying tables to this release. These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same captions and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies. As such, these non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.

The Company uses these non-GAAP financial measures to analyze its operating performance and future prospects, develop internal budgets and financial goals, and to facilitate period-to-period comparisons. The Company believes that these non-GAAP financial measures reflect an additional way of viewing aspects of its operations that, when viewed with its GAAP results, provide a more complete understanding of factors and trends affecting its business.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This release contains forward looking statements which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements include information, among other things, concerning: our possible or assumed future results of operations; future demands for solar energy solutions; business strategies; technology developments; financing and investment plans; dividend policy; competitive position; industry and regulatory environment; general economic conditions; potential growth opportunities; and the effects of competition. These forward-looking statements are often characterized by the use of words such as “anticipate,” “believe,” “could,” “seek,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or similar expressions and the negative or plural of those terms and other like terminology.

Forward-looking statements are only predictions based on our current expectations and our projections about future events.  These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. Given these factors, you should not place undue reliance on these forward-looking statements.  These factors include, but are not limited to, the matters discussed in the section entitled “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2021, filed on February 22, 2022 and our quarterly reports filed on Form 10-Q, Current Reports on Form 8-K and other reports filed with the SEC. All information set forth in this release is as of February 13, 2023.  The Company undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events or changes in its expectations.