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MarketScreener Homepage  >  Equities  >  Nasdaq  >  SolarEdge Technologies, Inc.    SEDG

SOLAREDGE TECHNOLOGIES, INC.

(SEDG)
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SolarEdge Technologies : Quarter Ended June 30, 2020 Slides

08/03/2020 | 04:16pm EST

Second Quarter 2020

Earnings Summary

August 3, 2020

Safe Harbor

Use of Forward-Looking Statements

This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements include information, among other things, concerning: the expected impact of the COVID-19 pandemic and related public health measures on our business, results of operations, financial condition and liquidity; our possible or assumed future results of operations; future demands for solar energy solutions; business strategies; technology developments; new products and services; financing and investment plans; dividend policy; competitive position; industry and regulatory environment; general economic conditions; potential growth opportunities; and the effects of competition.

Forward-looking statements are only predictions based on our current expectations and are inherently subject to risks and uncertainties. They should not be considered guarantees of future results, which could differ materially from the results set forth in, contemplated by, or underlying this presentation.

Factors that could cause actual results to differ materially from our expectations are described in the reports filed by SolarEdge with the Securities and Exchange Commission and we encourage you to review our filings carefully, especially the sections entitled "Risk Factors" in our annual report on Form 10-K and our quarterly reports on Form 10-Q, noting that many of the risks, uncertainties and other factors identified therein are, and will be, amplified by the COVID-19 pandemic. .

SolarEdge undertakes no duty or obligation to update any forward-looking statements contained in this presentation as a result of new information, future events or changes in its expectations.

This presentation describes non-GAAP revenues, gross margin, operating expenses, operating income, net income and non-GAAP net diluted earnings per share, which are not measures prepared in accordance with U.S. GAAP (i.e. "Non-GAAP" measures). The Non-GAAP measures are presented in this presentation as we believe that they provide investors with a means of evaluating and understanding how SolarEdge's management evaluates the company's operating performance. These Non-GAAP measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with U.S. GAAP.

2

Second Quarter Key Metrics

3.5M

142K

1.44 GW $331.9M

Power Optimizers

Inverters Shipped

Systems Shipped

Revenues

Shipped

3

Financial Results for Quarter

Revenue of $331.9 million

Revenue from solar products of $310.1 million

Total cash and investments, net of debt, $577.4 million GAAP gross margin of 31.0%

Non-GAAP gross margin of 32.4%

Non-GAAP gross margin for the solar business of 33.8% GAAP operating income of $30.0 million

Non-GAAP operating income of $46.6 million GAAP net income of $36.7 million Non-GAAP net income of $52.1 million

Net diluted GAAP earnings per share of $0.70

Net diluted Non-GAAP earnings per share of $0.97 Cash flow from operation of $59.3 million

4

Noteworthy

Revenues of $331.9 million led by Europe, the U.S. and Australia Continued profitability and healthy cash generation

Sales and installations in Europe have returned, and in some countries exceeding, pre COVID-19 rates Signs of recovery in the U.S., although not at pre COVID-19 level, yet

Commercial business grew to 56% of MW shipped

Company continues to operate at full capacity despite country specific restrictions

Positive new product reception in the U.S. (EnergyHub) and Germany (3 phase storage inverter) Sella 1 factory in Israel set to start manufacturing in August

Tracking indicators such as weekly new orders, installation rates and distributor sell outs all trending positively though the rate of improvement varies between regions and segments

5

GAAP Financial Results

*USD in millions

Q2 19

Q1 20

Q2 20

Revenues

325.0

431.2

331.9

Gross margin

34.1%

32.5%

31.0%

Operating expenses **

65.3

72.2

73.0

Operating income

45.4

67.8

30.0

Net income

33.1

42.2

36.7

Net diluted earnings per share

0.66

0.81

0.70

*With the exception of gross margin and per share data

** Q1 20 includes non recurring operating income of ($4.9M).

6

NON-GAAP Financial Results

*USD in millions

Q2 19

Q1 20

Q2 20

Revenues

325.0

431.2

331.9

Gross margin

35.7%

33.6%

32.4%

Operating expenses

54.9

66.3

61.1

Operating income

61.0

78.6

46.6

Net income

49.3

50.7

52.1

Net diluted earnings per share

0.94

0.95

0.97

*With the exception of gross margin and per share data

7

Units Shipped

Power optimizers shipped

K Units

5,500

5,060

5,000

4,587

4,454

4,500

3,731

4,000

3,516

3,500

2,738 3,004

3,134

3,029

3,000

2,500

2,000

1,500

1,000

500

-

Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20

8

Inverters shipped

K Units

220.0

202.0

200.0

187.9

186.8

180.0

160.1

160.0

141.7

140.0

121.8

120.5

130.7

120.0

113.8

100.0

80.0

60.0

40.0

20.0

0.0

Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20

Quarterly Revenues

9

Gross Margins Trend by Quarters (%)

GAAP

Non-GAAP

40%

40%

34.3%

35.7%

35.1%

35.5%

35% 34.1%

33.9%

32.5%

31.0%

35%

33.6%

32.4%

30%

30%

25%

25%

20%

20%

%

15%

15

10%

10%

5%

5%

0%

0%

Q2 19

Q3 19

Q4 19

Q1 20

Q2 20

Q2 19

Q3 19

Q4 19

Q1 20

Q2 20

10

GAAP Operating Expenses

11

Consolidated Operating Income

GAAP

Non-GAAP

70

66.0

67.8

90

89.2

85.3

78.7

60

80

50

45.4

50.5

70

61.0

60

40

50

46.6

30.0

30

40

20

30

20

10

10

0

0

Q2 19

Q3 19

Q4 19

Q1 20

Q2 20

Q2 19

Q3 19

Q4 19

Q1 20

Q2 20

USD Millions

12

*

GAAP Q1 20, Q4 19 and Q3 19 include non recurring operating (income) expenses of ($4.9M), $22.4M and $8.3M respectively

Consolidated Net Income

GAAP

Non-GAAP

70

60

52.8

50

42.2

41.6

40

36.7

33.1

30

20

10

0

Q2 19

Q3 19

Q4 19

Q1 20

Q2 20

90

80

70

60

50

40

30

20

10

0

USD Millions

87.4

63.6

49.3

50.7

52.1

Q2 19

Q3 19

Q4 19

Q1 20

Q2 20

13 * Q1 20, Q4 19 and Q3 19 include non recurring operating (income) expenses of ($4.9M), $22.4M and $8.3M respectively

Balance Sheet & Cash flow

USD in millions

Q2 19

Q1 20

Q2 20

Cash deposits and

373.6

558.7

592.7

investments

Inventory

148.9

198.6

264.5

Capital Expenditures

11.7

27.4

26.4

Total Debt*

22.0

15.0

15.3

Cash Flow From Operations

50.8

107.7

59.3

* Debt balances relate to pre acquisition loans in Kokam and SMRE

14

Third Quarter Guidance*

Revenues to be within the range of $325 million to $350 million;

Non-GAAP gross margins expected to be within the range of 32% to 34%;

Revenues from solar products to be within the range of $305 million to $325 million;

Non-GAAP gross margins from sale of solar products expected to be within the range of 33% to 35%

*The pandemic effects on economies around the world are unprecedented. The guidance includes the anticipated impact of the COVID-19 pandemic and related public health measures on the

Company's business, at the time of publication.

15

Appendix

Reconciliation of GAAP to Non-GAAP

Reconciliation of Non-GAAP Financial Measures

Reconciliation of GAAP to Non-GAAP Gross Profit

Three months ended

Six months ended

June 30, 2020

March 31, 2020

June 30, 2019

June 30, 2020

June 30, 2019

Gross profit (GAAP)

102,963

140,008

110,670

242,971

196,780

Stock-based compensation

2,359

2,273

1,651

4,632

3,005

Cost of product adjustment

----

313

319

313

1,001

Amortization and depreciation of acquired assets

2,325

2,356

3,307

4,681

4,384

Gross profit (Non-GAAP)

107,647

144,950

115,947

252,597

205,170

Reconciliation of GAAP to Non-GAAP Gross Margin

Three months ended

Six months ended

June 30, 2020

March 31, 2020

June 30, 2019

June 30, 2020

June 30, 2019

Gross margin (GAAP)

31.0%

32.5%

34.1%

31.8%

33.0%

Stock-based compensation

0.7%

0.5%

0.5%

0.6%

0.5%

Cost of product adjustment

----

0.1%

0.1%

----

0.2%

Amortization and depreciation of acquired assets

0.7%

0.5%

1.0%

0.6%

0.7%

Gross margin (Non-GAAP)

32.4%

33.6%

35.7%

33.1%

34.4%

17

Reconciliation of GAAP to Non-GAAP

Reconciliation of GAAP to Non-GAAP Operating expenses

Three months ended

Six months ended

June 30, 2020

March 31, 2020

June 30, 2019

June 30, 2020

June 30, 2019

Operating expenses (GAAP)

72,998

72,233

65,317

145,231

123,379

Stock-based compensation - R&D

(5,847)

(5,378)

(4,176)

(11,225)

(7,666)

Stock-based compensation - S&M

(3,445)

(3,192)

(2,722)

(6,637)

(5,126)

Stock-based compensation - G&A

(2,310)

(1,930)

(2,823)

(4,240)

(5,279)

Amortization and depreciation of acquired assets - R&D

(25)

(26)

(9)

(51)

(45)

Amortization and depreciation of acquired assets - S&M

(292)

(295)

51

(588)

(807)

Amortization and depreciation of acquired assets - G&A

(9)

(8)

(26)

(17)

(26)

Acquisition related expenses

----

----

(151)

----

(949)

Assets disposal

----

----

(552)

----

(552)

Other operating income (expenses)

----

4,900

----

4,900

----

Operating expenses (Non-GAAP)

61,070

66,303

54,909

127,373

102,929

Reconciliation of GAAP to Non-GAAP Operating income

Three months ended

Six months ended

June 30, 2020

March 31, 2020

June 30, 2019

June 30, 2020

June 30, 2019

Operating income (GAAP)

29,965

67,775

45,353

97,740

73,401

Cost of product adjustment

----

313

319

313

1,001

Stock-based compensation

13,961

12,773

11,372

26,734

21,076

Amortization and depreciation of acquired assets

2,651

2,686

3,291

5,337

5,262

Acquisition related expenses

----

----

151

----

949

Assets disposal

----

----

552

----

552

Other operating ( income) expenses

----

(4,900)

----

(4,900)

----

Operating income (Non-GAAP)

46,577

78,647

61,038

125,224

102,241

18

Reconciliation of GAAP to Non-GAAP

Reconciliation of GAAP to Non-GAAP Financial expenses (income), net

Three months ended

Six months ended

June 30, 2020

March 31, 2020

June 30, 2019

June 30, 2020

June 30, 2019

Financial expenses (income), net (GAAP)

(11,565)

16,605

(773)

5,040

5,378

Non cash interest

(1,200)

(1,128)

(850)

(2,328)

(1,635)

Currency fluctuation related to lease standard

(892)

1,033

(577)

141

(1,525)

Amortization and depreciation of acquired assets

----

(982)

----

(982)

----

Financial expenses (income), net (Non-GAAP)

(13,657)

15,528

(2,200)

1,871

2,218

Reconciliation of GAAP to Non-GAAP Tax on income

Three months ended

Six months ended

June 30, 2020

March 31, 2020

June 30, 2019

June 30, 2020

June 30, 2019

Tax on income (GAAP)

4,862

8,922

13,213

13,784

17,135

Deferred tax realized (asset)

3,236

3,536

987

6,772

1,960

Tax on income (Non-GAAP)

8,098

12,458

14,200

20,556

19,095

19

Reconciliation of GAAP to Non-GAAP

Reconciliation of GAAP to Non-GAAP Net income

Three months ended

Six months ended

June 30, 2020

March 31, 2020

June 30, 2019

June 30, 2020

June 30, 2019

Net income attributable to Solaredge Technologies Inc. (GAAP)

36,668

42,248

33,128

78,916

52,144

Cost of product adjustment

----

313

319

313

1,001

Stock-based compensation

13,961

12,773

11,372

26,734

21,076

Amortization and depreciation of acquired assets

2,651

3,668

3,291

6,319

5,262

Acquisition related expenses

----

----

151

----

949

Assets disposal

----

----

552

----

552

Other operating ( income) expenses

----

(4,900)

----

(4,900)

----

Non cash interest

1,200

1,128

850

2,328

1,635

Currency fluctuation related to lease standard

892

(1,033)

577

(141)

1,525

Deferred tax realized (asset)

(3,236)

(3,536)

(987)

(6,772)

(1,960)

Net income attributable to Solaredge Technologies Inc. (Non-GAAP)

52,136

50,661

49,253

102,797

82,184

20

Reconciliation of GAAP to Non-GAAP

Reconciliation of GAAP to Non-GAAP Net basic EPS

Three months ended

Six months ended

June 30, 2020

March 31, 2020

June 30, 2019

June 30, 2020

June 30, 2019

Net basic earnings per share (GAAP)

0.74

0.86

0.69

1.59

1.10

Cost of product adjustment

----

0.01

0.01

0.01

0.02

Stock-based compensation

0.28

0.25

0.24

0.54

0.45

Amortization and depreciation of acquired assets

0.05

0.08

0.07

0.13

0.11

Acquisition related expenses

----

----

----

----

0.02

Other operating ( income) expenses

----

(0.10)

----

(0.10)

----

Assets disposal

----

----

0.01

----

0.01

Non cash interest

0.02

0.02

0.02

0.05

0.03

Currency fluctuation related to lease standard

0.02

(0.02)

0.01

----

0.04

Deferred tax realized (asset)

(0.06)

(0.07)

(0.02)

(0.14)

(0.04)

Net basic earnings per share (Non-GAAP)

1.05

1.03

1.03

2.08

1.74

21

Reconciliation of GAAP to Non-GAAP

Reconciliation of GAAP to Non-GAAP Net diluted EPS

Three months ended

Six months ended

June 30, 2020

March 31, 2020

June 30, 2019

June 30, 2020

June 30, 2019

Net diluted earnings per share (GAAP)

0.70

0.81

0.66

1.51

1.05

Cost of product adjustment

----

0.01

----

----

0.02

Stock-based compensation

0.24

0.21

0.19

0.47

0.35

Amortization and depreciation of acquired assets

0.05

0.07

0.07

0.11

0.11

Acquisition related expenses

----

----

----

----

0.01

Other operating ( income) expenses

----

(0.09)

----

(0.09)

----

Assets disposal

----

----

0.01

----

0.01

Non cash interest

0.02

0.02

0.02

0.05

0.04

Currency fluctuation related to lease standard

0.02

(0.02)

0.01

----

0.03

Deferred tax realized (asset)

(0.06)

(0.06)

(0.02)

(0.13)

(0.04)

Net diluted earnings per share (Non-GAAP)

0.97

0.95

0.94

1.92

1.58

Reconciliation of GAAP to Non-GAAP No. of shares used in Net diluted EPS

Three months ended

Six months ended

June 30, 2020

March 31, 2020

June 30, 2019

June 30, 2020

June 30, 2019

Number of shares used in computing net diluted earnings per share (GAAP)

52,536,437

52,172,720

49,940,034

52,357,838

49,358,280

Stock-based compensation

1,154,279

1,399,732

2,130,135

1,277,006

2,448,673

Number of shares used in computing net diluted earnings per share (Non-GAAP)

53,690,716

53,572,452

52,070,169

53,634,844

51,806,953

22

NASDAQ | SEDG

Disclaimer

SolarEdge Technologies Inc. published this content on 03 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 August 2020 20:16:07 UTC


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Sales 2020 1 457 M - -
Net income 2020 154 M - -
Net cash 2020 827 M - -
P/E ratio 2020 107x
Yield 2020 -
Capitalization 15 882 M 15 882 M -
EV / Sales 2020 10,3x
EV / Sales 2021 8,55x
Nbr of Employees 2 431
Free-Float 97,5%
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Technical analysis trends SOLAREDGE TECHNOLOGIES, INC.
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Mean consensus HOLD
Number of Analysts 18
Average target price 312,87 $
Last Close Price 310,12 $
Spread / Highest target 40,3%
Spread / Average Target 0,89%
Spread / Lowest Target -37,1%
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Managers and Directors
NameTitle
Zvi Lando Chief Executive Officer
Nadav Zafrir Chairman
Uri Bechor Chief Operating Officer
Ronen Faier Chief Financial Officer
Yoav Galin Vice President-Research & Development
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