SolarEdge Technologies, Inc. (Nasdaq: SEDG), a global leader in smart energy technology, today announced its financial results for the first quarter ended March 31, 2023.

First Quarter 2023 Highlights

• Record revenues of $943.9 million
• Record revenues from solar segment of $908.5 million
• GAAP gross margin of 31.8%
• Non-GAAP gross margin of 32.6%
• Gross margin from solar segment of 35.0%
• Record GAAP operating income of $144.2 million
• Record non-GAAP operating income of $183.8 million
• Record GAAP net income of $138.4 million
• Record non-GAAP net income of $174.5 million
• Record GAAP net diluted earnings per share (“EPS”) of $2.35
• Record non-GAAP net diluted EPS of $2.90
• 3.6 Gigawatts (AC) of inverters shipped
• 221 MWh of batteries shipped

“We are pleased with our first quarter results reflecting our strong global presence and execution capabilities,” said Zvi Lando, Chief Executive Officer of SolarEdge. “Our diverse geographic and segmental footprint enables us to continue to grow revenues without being overly dependent on any single market or segment. As we see supply chain challenges gradually improving, we remain focused on execution and efficiencies to drive up margins and profitability.”

First Quarter 2023 Summary

The Company reported record revenues of $943.9 million, up 6% from $890.7 million in the prior quarter and up 44% from $655.1 million in the same quarter last year.

Revenues from the solar segment were a record $908.5 million, up 9% from $837.0 million in the prior quarter and up 49% from $608.0 million in the same quarter last year.

GAAP gross margin was 31.8%, up from 29.3% in the prior quarter and up from 27.3% in the same quarter last year.

Non-GAAP gross margin was 32.6%, up from 30.2% in the prior quarter and up from 28.4% in the same quarter last year.

Gross margin from the solar segment was 35%, up from 32.4% in the prior quarter and up from 30.2% in the same quarter last year.

GAAP operating expenses were $156.0 million, down 41% from $266.2 million in the prior quarter and up 22% from $128.1 million in the same quarter last year.

Non-GAAP operating expenses were $123.6 million, up 4% from $119.0 million in the prior quarter and up 25% from $98.9 million in the same quarter last year.

GAAP operating income was a record $144.2 million, up from an operating loss of $5.2 million in the prior quarter and up from operating income of $50.9 million in the same quarter last year.

Non-GAAP operating income was a record $183.8 million, up 23% from $149.6 million in the prior quarter and up 111% from $87.2 million in the same quarter last year.

GAAP net income was a record $138.4 million, up 564% from $20.8 million in the prior quarter and up 318% from $33.1 million in the same quarter last year.

Non-GAAP net income was a record $174.5 million, up 2% from $171.5 million in the prior quarter and up 154% from $68.8 million in the same quarter last year.

GAAP net diluted EPS was a record $2.35, up from $0.36 in the prior quarter and up from $0.60 in the same quarter last year.

Non-GAAP net diluted EPS was a record $2.90, up from $2.86 in the prior quarter and up from $1.20 in the same quarter last year.

Cash flow from operating activities was $7.9 million, down from $111.3 million in the prior quarter and up from $163.0 million used in operating activities in the same quarter last year.

As of March 31, 2023, cash, cash equivalents, bank deposits, restricted bank deposits and marketable securities totaled $1.01 billion, net of debt, compared to $1.04 billion on December 31, 2022.

Outlook for the Second Quarter 2023

The Company also provides guidance for the second quarter ending June 30, 2023 as follows:

• Revenues to be within the range of $970 million to $1,010 million
• Non-GAAP gross margin expected to be within the range of 32% to 35%
• Non-GAAP operating profit to be within the range of $195 million to $215 million
• Revenues from the solar segment to be within the range of $930 million to $980 million
• Gross margin from the solar segment expected to be within the range of 34% to 37%

Conference Call

The Company will host a conference call to discuss these results at 4:30 p.m. ET on Wednesday, May 3, 2023. The call will be available, live, to interested parties by dialing 800-895-3361. For international callers, please dial +1 785-424-1062. 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, 2022, filed on February 22, 2023 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 May 3, 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.

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