Core Insights - SolarEdge Technologies, Inc. (SEDG) reported a second-quarter 2025 adjusted loss of 81 cents per share, which was better than the Zacks Consensus Estimate of a loss of 82 cents and improved from a loss of $1.79 in the prior-year quarter [1][8] - The company's revenues for the second quarter reached $289.4 million, exceeding the Zacks Consensus Estimate by 5.7% and representing a 9.1% increase from $265.4 million in the same quarter last year [3][8] Financial Performance - SolarEdge's adjusted gross profit for the second quarter was $36.9 million, a significant increase from $0.5 million in the prior-year period [4] - The company reported an adjusted operating loss of $48.3 million, which is an improvement from an operating loss of $114.3 million in the previous year [5][8] - As of June 30, 2025, SolarEdge had cash and cash equivalents of $545.2 million, up from $274.6 million at the end of 2024 [6] - The net cash inflow from operating activities for the first half of 2025 was $26 million, compared to a cash outflow of $261.8 million in the same period last year [6] Operational Highlights - In the second quarter, SolarEdge shipped 1,194 megawatt-alternate current (MWac) of inverters and 247 megawatt-hours of batteries [4] - Adjusted operating expenses decreased by 25.8% year over year to $85.2 million [4] Future Guidance - For the third quarter of 2025, SolarEdge expects revenues to be in the range of $315-$355 million, with the Zacks Consensus Estimate at $332.8 million [7] - Adjusted operating expenses are projected to be between $85-$90 million, and the adjusted gross margin is expected to be between 15% and 19% [7]

Investment Rating - The report assigns an "Outperform" rating to the company, indicating an expected total return over the next 12-18 months that exceeds the relevant market benchmark by more than 10% [10]. Core Insights - The company reported a net adjusted loss of $48 million for Q2 2025, which was better than the consensus expectation of a $55 million loss, primarily due to strong revenue performance and effective cost control [1][3]. - For Q3 2025, the company expects revenue to be between $315 million and $355 million, surpassing the consensus estimate of approximately $300 million, with a projected non-GAAP gross margin of 15-19% [2]. - The company anticipates achieving positive cash flow by the end of the year and believes it can offset tariff impacts in FY 2026 [1]. Summary by Sections Revenue and Cost Performance - In Q2 2025, the company's revenue was $289 million, significantly higher than the consensus estimate of $273 million, and up 32% from Q1 2025 [3]. - The gross margin for Q2 2025 was approximately 11%, a substantial increase from 8% in Q1 2025, and well above the consensus expectation of 9.5% [2][3]. Shipment Volumes - The company shipped 1,194 MW of photovoltaic inverters in Q2 2025, slightly down from 1,208 MW in Q1 2025, while the shipment of photovoltaic batteries reached 247 MWh, up from 180 MWh in Q1 2025 [2].

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements and management's discussion for the period ended June 30, 2025 [Item 1. Financial Statements](index=4&type=section&id=ITEM%201.%20Financial%20Statements) This section presents SolarEdge Technologies' unaudited condensed consolidated financial statements for the three and six months ended June 30, 2025 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets decreased to $2.49 billion, total liabilities slightly increased, and stockholders' equity declined to $513.2 million due to net losses Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $1,971,913 | $2,050,565 | | Inventories, net | $529,306 | $645,897 | | **Total assets** | **$2,490,448** | **$2,646,453** | | **Total current liabilities** | $1,016,730 | $1,057,337 | | **Total liabilities** | $1,977,229 | $1,988,111 | | **Total stockholders' equity** | $513,219 | $658,342 | [Condensed Consolidated Statements of Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20(Loss)) For Q2 2025, revenues increased to $289.4 million, gross profit improved to $32.1 million, and net loss narrowed to $124.7 million or ($2.13) per share Three Months Ended June 30, (in thousands, except per share data) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Revenues | $289,429 | $265,405 | | Gross profit (loss) | $32,131 | $(10,969) | | Operating loss | $(115,493) | $(160,182) | | Net loss | $(124,744) | $(130,818) | | Net basic and diluted loss per share | $(2.13) | $(2.31) | Six Months Ended June 30, (in thousands, except per share data) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Revenues | $508,909 | $469,804 | | Gross profit (loss) | $49,667 | $(37,156) | | Operating loss | $(218,219) | $(333,887) | | Net loss | $(223,267) | $(288,129) | | Net basic and diluted loss per share | $(3.83) | $(5.06) | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For H1 2025, operating activities generated $26.0 million in cash, a significant improvement, leading to a $162.6 million increase in cash and equivalents, ending at $572.5 million Six Months Ended June 30, (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $26,024 | $(261,791) | | Net cash provided by investing activities | $136,187 | $243,224 | | Net cash used in financing activities | $(6,610) | $(50,684) | | **Increase (decrease) in cash, cash equivalents and restricted cash** | **$162,567** | **$(78,970)** | | **Cash, cash equivalents and restricted cash, end of period** | **$572,506** | **$259,498** | [Notes to the Condensed Consolidated Financial Statements (unaudited)](index=12&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) These notes detail accounting policies, segment reporting, inventory, convertible notes, restructuring activities, and pending legal proceedings, providing context to the financial statements - Following the sale of Automation Machines and discontinuation of its Energy Storage activity, the company now operates as a single operating segment focused on its intelligent inverter solutions[183](index=183&type=chunk) - In June 2024, the company issued **$300 million** of 2.25% convertible senior notes due 2029 and used a portion of the proceeds to repurchase **$285 million** of its 0.00% notes due 2025[94](index=94&type=chunk)[101](index=101&type=chunk) - The company is undergoing restructuring plans initiated in 2024, which included reducing its workforce by approximately **900 employees** in H1 2024 and an additional **400** in July 2024 to align with market conditions[165](index=165&type=chunk) - The company is facing a consolidated securities class action lawsuit and several derivative complaints alleging violations of federal securities laws related to disclosures about inventory levels and demand in Europe[145](index=145&type=chunk)[146](index=146&type=chunk)[150](index=150&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 2025 financial performance, including revenue growth, narrowed net loss, operational metrics, global market conditions, and the company's strong liquidity position [Overview and Global Circumstances](index=38&type=section&id=Overview%20and%20Global%20Circumstances) The company has refocused on its core solar segment, facing global challenges including European demand slowdown, U.S. regulatory changes (OBBB Act), and trade tariffs - The company now operates as a single solar segment after discontinuing its LCV e-Mobility, Automation Machines, and Energy Storage divisions to focus on core activities[195](index=195&type=chunk)[196](index=196&type=chunk) - Demand in Europe has been slow due to high inventory levels, though most distribution partners reached normalized levels by the end of Q2 2025. In contrast, U.S. demand increased in H1 2025 as inventory levels normalized[200](index=200&type=chunk) - The One Big Beautiful Bill Act (OBBB), enacted in July 2025, amends IRA tax credits, accelerating the phase-out of certain customer credits and introducing new eligibility criteria (e.g., FEOC rules), which could negatively impact demand[202](index=202&type=chunk)[204](index=204&type=chunk)[205](index=205&type=chunk) [Key Operating Metrics](index=42&type=section&id=Key%20Operating%20Metrics) Q2 2025 saw significant increases in shipments of inverters, power optimizers, and batteries, with 1,194 megawatts and 247 megawatt-hours shipped respectively Key Operating Metrics (Three Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Inverters shipped | 88,954 | 65,772 | | Power optimizers shipped | 2,742,725 | 2,001,614 | | Megawatts shipped | 1,194 | 873 | | Megawatt hours shipped - batteries | 247 | 128 | [Results of Operations](index=43&type=section&id=Results%20of%20Operations) Q2 2025 revenues grew 9.1% to $289.4 million, gross margin improved to 11.1%, and operating expenses decreased, resulting in a narrowed net loss of $124.7 million - Q2 2025 revenue increased **9.1% YoY**, driven by higher sales volumes of inverters (**+31.9%**), power optimizers (**+31.9%**), and batteries (**+79.2%**)[222](index=222&type=chunk)[224](index=224&type=chunk) - Blended ASP per watt for solar products (ex-batteries) decreased **13.9% YoY** in Q2 2025 due to price reductions, mainly in Europe[225](index=225&type=chunk) - Gross margin improved to **11.1%** in Q2 2025 from a gross loss of **4.1%** in Q2 2024, primarily due to a **$14.7 million** decrease in warranty expenses and better absorption of fixed costs on higher revenue[233](index=233&type=chunk)[234](index=234&type=chunk)[236](index=236&type=chunk) - Total operating expenses decreased to **$147.6 million** in Q2 2025 from **$149.2 million** in Q2 2024, despite a **$44.8 million** increase in 'Other operating expense' from an asset impairment. This was offset by significant reductions in R&D, S&M, and G&A expenses due to restructuring[221](index=221&type=chunk)[237](index=237&type=chunk)[238](index=238&type=chunk)[241](index=241&type=chunk)[244](index=244&type=chunk) [Liquidity and Capital Resources](index=53&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the company maintained strong liquidity with $545.2 million in cash and equivalents, and operating activities generated $26.0 million in H1 2025 - The company's liquidity position as of June 30, 2025, includes **$545.2 million** in cash and cash equivalents and **$235.9 million** in marketable securities[258](index=258&type=chunk) - Net cash from operating activities for H1 2025 was a positive **$26.0 million**, compared to a use of **$261.8 million** in H1 2024, indicating improved working capital management[258](index=258&type=chunk)[260](index=260&type=chunk) - The company has outstanding purchase obligations of **$349.1 million** for raw materials and manufacturing, and capital expenditure commitments of **$18.5 million**[258](index=258&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=55&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks including foreign currency fluctuations, significant customer concentration, and unhedged commodity price volatility for raw materials - A hypothetical **10%** change in the EUR/USD exchange rate would impact net income by **$11.4 million** for the first six months of 2025. A **10%** change in the NIS/USD rate would impact net income by **$19.8 million**[272](index=272&type=chunk) - Significant customer concentration exists, with one customer representing **25.3%** of net trade receivables as of June 30, 2025. For Q2 2025, three customers accounted for **44.6%** of total revenues[276](index=276&type=chunk) - The company is exposed to fluctuating market prices for commodity raw materials such as Copper, Lithium, Nickel, and Cobalt, and does not currently hedge this risk[277](index=277&type=chunk) [Item 4. Controls and Procedures](index=56&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management confirmed effective disclosure controls as of June 30, 2025, following the substantial implementation of a new ERP system, which changed internal controls - The CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2025[280](index=280&type=chunk) - The company substantially completed the implementation of a new ERP system during Q2 2025, which resulted in changes to internal controls over financial reporting[281](index=281&type=chunk) [PART II. OTHER INFORMATION](index=57&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides other required information, including legal proceedings, updated risk factors, and exhibits [Item 1. Legal Proceedings](index=57&type=section&id=ITEM%201.%20Legal%20Proceedings) This section refers to Note 14 for details on various legal proceedings, including significant shareholder class action and derivative lawsuits - The company is party to various legal claims, with further details provided in Note 14 of the financial statements[283](index=283&type=chunk) [Item 1A. Risk Factors](index=57&type=section&id=ITEM%201A.%20Risk%20Factors) This section updates risk factors, emphasizing new U.S. tax law changes (OBBB Act) impacting demand and tax credits, alongside global trade environment risks and tariffs - The newly enacted OBBB amends IRA tax credits, accelerating phase-outs and imposing new eligibility criteria (e.g., domestic content, FEOC rules), which could harm demand for the company's products and reduce tax benefits[285](index=285&type=chunk)[286](index=286&type=chunk)[289](index=289&type=chunk) - The company faces risks from U.S. tariffs on imported components and potential retaliatory tariffs from other countries on its U.S.-manufactured products, which could increase costs and harm sales[293](index=293&type=chunk)[294](index=294&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=58&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities during the reporting period - None[296](index=296&type=chunk) [Item 3. Defaults upon Senior Securities](index=58&type=section&id=ITEM%203.%20Defaults%20upon%20Senior%20Securities) There were no defaults upon senior securities during the reporting period - None[296](index=296&type=chunk) [Item 4. Mine Safety Disclosures](index=58&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[296](index=296&type=chunk) [Item 5. Other Information](index=58&type=section&id=ITEM%205.%20Other%20Information) There is no other information to report for the period - None[297](index=297&type=chunk) [Item 6. Exhibits](index=59&type=section&id=ITEM%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including a new employment agreement, CEO and CFO certifications, and financial statements formatted in Inline XBRL - Exhibits filed include an employment agreement for Daniel Huber, CEO/CFO certifications (31.1, 31.2, 32.1, 32.2), and XBRL data[298](index=298&type=chunk)

分组1 - SolarEdge Technologies reported a quarterly loss of $0.81 per share, slightly better than the Zacks Consensus Estimate of a loss of $0.82, and an improvement from a loss of $1.79 per share a year ago, indicating an earnings surprise of +1.22% [1] - The company posted revenues of $289.43 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 5.74% and showing an increase from year-ago revenues of $265.4 million [2] - SolarEdge shares have increased approximately 89.6% since the beginning of the year, significantly outperforming the S&P 500's gain of 7.9% [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is -$0.69 on revenues of $302.07 million, and for the current fiscal year, it is -$3.29 on revenues of $1.1 billion [7] - The Zacks Industry Rank indicates that the solar industry is currently in the bottom 39% of over 250 Zacks industries, which may impact stock performance [8] - Sunnova Energy, another company in the solar industry, is expected to report a quarterly loss of $0.71 per share, with revenues projected to be $266 million, reflecting a year-over-year increase of 21.1% [9]

Financial Data and Key Metrics Changes - Total revenues for Q2 2025 were $289 million, with non-GAAP revenues at $281 million after excluding $8 million from discontinued operations [22] - Non-GAAP gross margin increased to 13.1% from 7.8% in Q1 2025, driven by higher revenue and increased utilization of operational cost structure [23][24] - Non-GAAP operating loss for Q2 was $48.3 million, an improvement from a loss of $72.4 million in Q1 [26] - Non-GAAP net loss was $47.7 million in Q2, compared to $66.1 million in Q1, with net loss per share improving to $0.81 from $1.14 [26] Business Line Data and Key Metrics Changes - U.S. revenues amounted to $185 million, representing 66% of non-GAAP revenues, while Europe contributed $65 million (23%) and international markets $31 million (11%) [22] - The company recorded a one-time expense of $18 million related to the disposition of its tracker business and a $37 million write-down of the Stella II facility [25] Market Data and Key Metrics Changes - The U.S. residential market is expected to see a shift towards the TPO model, which is anticipated to accelerate in 2026 [12] - In Europe, the company has seen initial market share gains in Q2, although overall share remains below historical levels [15] Company Strategy and Development Direction - The company plans to maximize opportunities from the One Big Beautiful Bill Act, which supports onshoring manufacturing to the U.S. and extends storage tax credits [6][7] - The focus is on ramping up U.S. manufacturing, with production facilities in Texas, Florida, and Utah [19] - The NexSys platform is on track for initial volume by the end of the year, aimed at enhancing product offerings and market competitiveness [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving positive free cash flow for the full year 2025, despite challenges from tariffs [10][27] - The company anticipates a decline in residential demand in 2026 due to the elimination of the 25D credit, but expects this to be partially offset by the TPO shift [9][74] - Management highlighted the importance of domestic content and compliance with FiOQ requirements to capture market share [12][44] Other Important Information - The company has approximately $812 million in cash and investments, with a net cash position of about $470 million [27] - Inventory levels decreased by $108 million to $529 million, marking the fifth consecutive quarter of reduction [28] Q&A Session Summary Question: Sustainability of revenue in Q2 and Q3 - Management indicated that Q3 guidance does not include significant pull forward of demand related to 25D or safe harbor, reflecting ongoing business recovery [35] Question: Gross margin expectations beyond Q3 - Management noted that higher revenue will drive better utilization of fixed costs, contributing to improved margins [38] Question: Safe harbor opportunities in C&I business - Management refrained from providing specifics on safe harbor deals but acknowledged strong demand in the C&I segment [44] Question: Revenue growth expectations in Europe and the U.S. - Management expects strong performance in the U.S. market, while the European market may remain weak [53] Question: Pricing strategy in Europe - Management stated that pricing is not currently a barrier to growth, and they are prepared to respond to market conditions as needed [97] Question: Battery sourcing strategy and margin targets - Management emphasized a focus on quality and reliability in battery sourcing, with ongoing efforts to improve cost structures [100] Question: Warranty impact on margins - Management noted improvements in product quality, which should positively affect warranty-related costs over time [105]

Company Overview and Q2 2025 Highlights SolarEdge reported Q2 2025 results, highlighting steady progress with revenue growth and margin expansion [Introduction and CEO Statement](index=1&type=section&id=Introduction%20and%20CEO%20Statement) CEO Shuki Nir highlighted SolarEdge's second consecutive quarter of revenue growth and margin expansion - SolarEdge achieved its **second consecutive quarter of year-over-year and sequential revenue growth**[3](index=3&type=chunk) - The company also experienced **margin expansion** during the quarter[3](index=3&type=chunk) [Second Quarter 2025 Financial Summary (GAAP & Non-GAAP)](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Summary%20%28GAAP%20%26%20Non-GAAP%29) SolarEdge reported sequential revenue and gross margin growth, reduced non-GAAP losses, while GAAP losses increased and cash flow turned negative [Revenue and Shipments](index=1&type=section&id=Revenue%20and%20Shipments) Q2 2025 revenues showed strong sequential increases for both GAAP and Non-GAAP, with substantial inverter and battery shipments Q2 2025 Revenue Performance (Millions) | Metric | Q2 2025 | Prior Quarter | Sequential Change | | :----- | :------ | :------------ | :---------------- | | GAAP Revenues | $289.41 | $219.51 | +32% | | Non-GAAP Revenues | $281.0 | $212.1 | +32% | - The Company shipped **1,194 MW (AC) of inverters** and **247 MWh of batteries** for PV applications in Q2 2025[5](index=5&type=chunk) [Margins and Expenses](index=1&type=section&id=Margins%20and%20Expenses) Gross margins improved sequentially in Q2 2025 for both GAAP and Non-GAAP, despite tariff impact, while GAAP operating expenses increased Q2 2025 Gross Margin and Operating Expenses | Metric | Q2 2025 | Prior Quarter | Sequential Change | | :----- | :------ | :------------ | :---------------- | | GAAP Gross Margin | 11.1% | 8.0% | +3.1 pp | | Non-GAAP Gross Margin | 13.1% | 7.8% | +5.3 pp | | GAAP Operating Expenses (Millions) | $147.61 | $120.31 | +$27.3 | | Non-GAAP Operating Expenses (Millions) | $85.2 | $89.1 | -$3.9 | - New tariffs had a **negative impact of approximately 1% on gross margin** in the second quarter[6](index=6&type=chunk) [Operating and Net Loss](index=1&type=section&id=Operating%20and%20Net%20Loss) GAAP operating and net losses increased in Q2 2025, while Non-GAAP operating and net losses significantly narrowed Q2 2025 Operating and Net Loss (Millions) | Metric | Q2 2025 | Prior Quarter | Sequential Change | | :----- | :------ | :------------ | :---------------- | | GAAP Operating Loss | $(115.51) | $(102.71) | $(12.8) | | Non-GAAP Operating Loss | $(48.3) | $(72.4) | +$24.1 | | GAAP Net Loss | $(124.71) | $(98.51) | $(26.2) | | Non-GAAP Net Loss | $(47.7) | $(66.1) | +$18.4 | | GAAP Net Loss per Share | $(2.13) | $(1.70) | $(0.43) | | Non-GAAP Net Loss per Share | $(0.81) | $(1.14) | +$0.33 | [Cash Flow and Liquidity](index=2&type=section&id=Cash%20Flow%20and%20Liquidity) Operating and free cash flow turned negative in Q2 2025, but net cash and investments portfolio increased from year-end 2024 Q2 2025 Cash Flow Summary (Millions) | Metric | Q2 2025 | Prior Quarter | Sequential Change | | :----- | :------ | :------------ | :---------------- | | Cash used in operating activities | $(7.8) | $33.8 (provided) | $(41.6) | | Free cash flow used | $(9.1) | $19.8 (generated) | $(28.9) | - As of June 30, 2025, the cash and investments portfolio, net of debt, totaled **$131.8 million**, an increase of **$18.6 million** from $113.2 million as of December 31, 2024[12](index=12&type=chunk) [Outlook for Third Quarter 2025](index=2&type=section&id=Outlook%20for%20Third%20Quarter%202025) SolarEdge projects continued revenue growth and improved non-GAAP gross margin for Q3 2025, with stable non-GAAP operating expenses Q3 2025 Financial Guidance | Metric | Guidance Range | Notes | | :----- | :------------- | :---- | | Revenues (Millions) | $315 to $355 | | | Non-GAAP Gross Margin (%) | 15 to 19 | Includes approximately 2% of new tariff impact | | Non-GAAP Operating Expenses (Millions) | $85 to $90 | | [Conference Call Information](index=2&type=section&id=Conference%20Call%20Information) SolarEdge scheduled a conference call for August 7, 2025, to discuss Q2 2025 results, with live access and webcast replay details - A conference call to discuss Q2 2025 results was scheduled for **8:00 a.m. ET on Thursday, August 7, 2025**[14](index=14&type=chunk) - Interested parties could join by dialing **+1 833-316-1983 (domestic)** or **+1 785-838-9310 (international)**, using Conference ID SEDG[14](index=14&type=chunk) - A live webcast and replay would be available in the **Investor Relations section of the Company's website**[14](index=14&type=chunk) [About SolarEdge](index=3&type=section&id=About%20SolarEdge) SolarEdge is a global leader in smart energy technology, providing intelligent inverter solutions and a broad range of smart energy offerings - SolarEdge is a **global leader in smart energy technology**, leveraging world-class engineering and innovation[17](index=17&type=chunk) - The company developed an **intelligent inverter solution for photovoltaic (PV) systems** to maximize power generation and lower energy costs[17](index=17&type=chunk) - SolarEdge addresses various energy market segments with solutions for **PV, storage, EV charging, batteries, and grid services**[17](index=17&type=chunk) [Use of Non-GAAP Financial Measures](index=3&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) SolarEdge uses non-GAAP measures to provide additional insights into operating results by excluding certain non-recurring or non-cash items - Non-GAAP measures exclude items such as **stock-based compensation, amortization and impairment of acquired intangible assets, restructuring and impairment charges, and certain litigation expenses**[18](index=18&type=chunk) - Management uses non-GAAP measures for **internal budgeting, forecasting, evaluating financial performance, and comparing operating results across periods**[19](index=19&type=chunk) - These non-GAAP measures have limitations and should be considered **in addition to, not as a substitute for, GAAP measures**, and may not be comparable to those of other companies[20](index=20&type=chunk) [Safe Harbor Statement](index=4&type=section&id=Safe%20Harbor%20Statement) The press release contains forward-looking statements subject to known and unknown risks and uncertainties, with no obligation for updates - The press release includes **forward-looking statements** regarding future results, business strategies, technology developments, and economic conditions[21](index=21&type=chunk) - These statements are subject to **known and unknown risks and uncertainties**, including demand for renewable energy, ability to forecast demand, changes in tax laws, trade environment, and macroeconomic conditions[22](index=22&type=chunk) - Readers should not place **undue reliance on forward-looking statements**, and the company does not undertake to update them[22](index=22&type=chunk) [Investor Contacts](index=4&type=section&id=Investor%20Contacts) Contact information for SolarEdge's Investor Relations department and Sapphire Investor Relations, LLC is provided for inquiries - **JB Lowe** is the Head of Investor Relations for SolarEdge Technologies, Inc[24](index=24&type=chunk) - **Erica Mannion or Michael Funari** from Sapphire Investor Relations, LLC can also be contacted[24](index=24&type=chunk) - All investor inquiries can be directed to **investors@solaredge.com**[24](index=24&type=chunk) [Condensed Consolidated Financial Statements (GAAP)](index=6&type=section&id=Condensed%20Consolidated%20Financial%20Statements%20%28GAAP%29) This section presents SolarEdge's GAAP financial statements, including statements of loss, balance sheets, and cash flows [Condensed Consolidated Statements of Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Loss) GAAP statements show a net loss of $(124,744) thousand for Q2 2025, an increase from the prior year, despite higher revenues Condensed Consolidated Statements of Loss (GAAP, in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------ | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Revenues | $289,429 | $265,405 | $508,909 | $469,804 | | Cost of revenues | 257,298 | 276,374 | 459,242 | 506,960

Core Insights - SolarEdge Technologies and Enphase Energy have lost their significant post-pandemic gains, with SolarEdge underperforming compared to the S&P 500 Index and the iShares Global Clean Energy ETF [1] Company Performance - SolarEdge Technologies is currently underperforming relative to both the S&P 500 Index and the iShares Global Clean Energy ETF, indicating a decline in market performance [1] Market Context - The decline in performance for both SolarEdge and Enphase Energy suggests a broader trend affecting clean energy stocks post-pandemic, reflecting potential shifts in investor sentiment or market conditions [1]

Core Insights - SolarEdge Technologies (SEDG) experienced a stock decline of 7.8% in the most recent trading session, underperforming compared to the S&P 500, which fell by 0.3% [1] - Over the past month, the company's shares have increased by 32.65%, significantly outperforming the Oils-Energy sector's gain of 3.2% and the S&P 500's gain of 3.64% [1] Earnings Expectations - The upcoming earnings report for SolarEdge Technologies is scheduled for August 7, 2025, with an expected EPS of -$0.82, reflecting a 54.19% increase from the same quarter last year [2] - The consensus estimate for quarterly revenue is projected at $273.71 million, which is a 3.13% increase compared to the previous year [2] Full Year Projections - For the full year, the Zacks Consensus Estimates predict an EPS of -$3.29 and revenue of $1.1 billion, indicating changes of +85.69% and +18.25% respectively from the prior year [3] Analyst Estimates and Market Sentiment - Changes in analyst estimates for SolarEdge Technologies are crucial as they reflect short-term business trends and analysts' confidence in the company's performance [4] - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), indicates a current rank of 3 (Hold) for SolarEdge Technologies, with a recent consensus EPS projection moving 1.21% lower [6] Industry Context - The solar industry, part of the Oils-Energy sector, holds a Zacks Industry Rank of 85, placing it in the top 35% of over 250 industries [7] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1, highlighting the competitive strength of the solar industry [7]

Group 1 - First Solar (FSLR) stock price increase narrowed to 4.5% [1] - Daqo New Energy ADR currently up 7.6%, SolarEdge up 4.2%, Clean Energy ETF QCLN up 2.4%, and Canadian Solar ADR up 1.6% [1] - U.S. solar manufacturers have filed anti-dumping and countervailing duty petitions against three Asian countries: India, Indonesia, and Laos [1]

Core Viewpoint - Morgan Stanley has adjusted ratings for several U.S. solar stocks due to market and policy changes, downgrading Enphase Energy and SolarEdge Technologies to "Neutral" while favoring Sunrun as a preferred stock [1][2]. Group 1: Enphase Energy - Morgan Stanley downgraded Enphase Energy's rating from "Overweight" to "Neutral" and reduced the target price from $64 to $37, reflecting downward pressure on stock prices and profit margins due to the industry's shift towards third-party systems [1]. - Despite the downgrade, the firm believes that Enphase remains one of the few consistently profitable solar companies with a net cash position [1]. - Analyst Mark Strouse noted that the recent "Inflation Reduction Act" may lead to a lack of positive momentum in the U.S. residential solar market, potentially impacting Enphase's market share and gross margins [1]. Group 2: SolarEdge Technologies - SolarEdge Technologies' rating was also downgraded from "Overweight" to "Neutral," with a target price set at $23, following a 34% increase in the stock's performance this month [2]. - Strouse maintains that SolarEdge holds a relatively favorable position in the U.S. residential inverter market, as the residential solar sector shifts towards third-party ownership models [2]. - New foreign entity regulatory frameworks have reduced competitive pressure in the market [2]. Group 3: Sunrun - Morgan Stanley is optimistic about Sunrun, assigning it an "Overweight" rating and raising the target price from $13 to $16, due to improved visibility in solar leasing and power purchase agreements [2]. - Sunrun is expected to meet the 48E tax credit eligibility by the end of 2027 and continue to benefit from storage incentives until the end of 2032 [2].