SolarEdge's Q1 Results Cast Shadow With Revenue Decline, But CEO Remains Optimistic

Zinger Key Points
  • SolarEdge Technologies beats revenue expectations with $204.4 million but faces a significant Y/Y decline in solar segment revenue.
  • Adjusted gross margin turns negative at -6.5%, leading to an adjusted operating loss of $(122.5) million and an EPS loss of $(1.90).

SolarEdge Technologies, Inc. SEDG shares are trading lower after it reported first-quarter FY24 results.

Revenues of $204.4 million, beating the consensus of $196.0 million. Revenues from the solar segment stood at $190.1 million, down 79% Y/Y, in the quarter.

Adjusted gross margin was negative (6.5)% versus a positive margin of 32.6% in the prior year quarter.

Adjusted operating loss stood at $(122.5) million versus an adjusted operating income of $183.8 million in the same quarter last year.

Adjusted EPS loss of $(1.90) missed the consensus of $(1.57).

Operating cash flow was negative $(217.0) million in the quarter. As of March-end, cash, cash equivalents, bank deposits, restricted bank deposits, and marketable securities totaled $316.3 million.

In the first quarter of 2024, the company bought back 506,000 shares worth around $33 million.

Outlook: For the second quarter, the company sees revenue of $250 million-$280 million (vs. consensus of $305.99 million), revenues from the solar segment of $225 million-$255 million, and adjusted gross margin of negative 4% to 0%.

Zvi Lando, Chief Executive Officer, said, “As we enter spring when installations historically tend to rise, we expect channel inventory to continue to decline and revenues to improve. In parallel, we are focused on a suite of new products that we plan to release in the next several quarters to position ourselves for the next growth cycle in our industry.”

Investors can gain exposure to the stock via Invesco Solar ETF TAN and Global X CleanTech ETF CTEC.

Price Action: SEDG shares are down 6.78% at $53.65 at the last check Thursday.

Image: Andreas from Pixabay

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