SolarEdge(US:SEDG)2024-08-07 20:26Financial Performance - Revenues for Q2 2024 were $265.4 million, a decrease of 73.3% compared to $991.3 million in Q2 2023[135]. - Net loss for Q2 2024 was $130.8 million, compared to net income of $119.5 million in Q2 2023[135]. - Revenues decreased by $725.9 million, or 73.2%, in the three months ended June 30, 2024, compared to the same period in 2023, primarily due to lower sales of inverters and power optimizers[149]. - Revenues decreased by $1,465.4 million, or 75.7%, in the six months ended June 30, 2024, compared to the same period in 2023, primarily due to lower sales of inverters and power optimizers[153]. - Solar revenues decreased by $706.1 million, or 74.5%, in the three months ended June 30, 2024, compared to the same period in 2023, primarily due to lower sales of inverters and power optimizers[182]. - Energy Storage revenues increased by $2.3 million, or 12.0%, in the three months ended June 30, 2024, compared to the same period in 2023[186]. - All other segments revenues decreased by $22.1 million, or 89.9%, in the three months ended June 30, 2024, primarily due to the discontinuation of the LCV e-Mobility activity[188]. Product Shipment and Demand - Approximately 128.2 million power optimizers, 5.7 million inverters, and 276.2 thousand batteries for PV applications were shipped as of June 30, 2024[134]. - The company experienced a slowdown in demand for its Solar segment products starting in Q3 2023, attributed to high inventory levels and slower installation rates[136]. - Inverters shipped in Q2 2024 totaled 65,772, down from 334,635 in Q2 2023, representing a decline of 80.3%[144]. - Power optimizers shipped in Q2 2024 were 2,001,614, a decrease of 63.8% from 5,531,373 in Q2 2023[144]. - The number of power optimizers sold decreased by approximately 3.5 million units, or 63.6%, from approximately 5.5 million units in the three months ended June 30, 2023, to approximately 2.0 million units in the same period in 2024[150]. - The number of inverters sold decreased by approximately 538.1 thousand units, or 80.8%, from approximately 665.8 thousand units in the six months ended June 30, 2023, to approximately 127.7 thousand units in the same period in 2024[154]. Cost and Expenses - Gross loss for Q2 2024 was 4.1%, compared to a gross margin of 32.0% in Q2 2023[135]. - Cost of revenues decreased by $397.6 million, or 59.0%, in the three months ended June 30, 2024, compared to the same period in 2023, mainly due to a decrease in the volume of products sold[157]. - Total operating expenses for the three months ended June 30, 2024, were $149.2 million, compared to $166.9 million in the same period in 2023[157]. - Research and development costs decreased by $17.3 million or 19.9% in the three months ended June 30, 2024, compared to the same period in 2023[162]. - Sales and marketing expenses decreased by $4.2 million or 9.6% in the three months ended June 30, 2024, compared to the same period in 2023[166]. - General and administrative expenses increased by $2.8 million or 7.8% in the three months ended June 30, 2024, primarily due to an increase in expenses related to doubtful debt of $7.4 million[166]. Cash Flow and Financing - Net cash used in operating activities was $44.8 million in the three months ended June 30, 2024, compared to $88.7 million in the same period in 2023[191]. - Cash provided by investing activities was $243.2 million in the six months ended June 30, 2024, compared to cash used of $144.5 million in the same period in 2023, driven by increased proceeds from marketable securities[194]. - The company has cash and cash equivalents of $259.5 million as of June 30, 2024, excluding $550.6 million in marketable securities[191]. - The company announced a share repurchase program authorizing the repurchase of up to $300 million of common stock, effective until December 31, 2024[197]. - During the six months ended June 30, 2024, the company repurchased 753,364 shares at an average cost of $66.79 per share for a total of $50.3 million[198]. - The company sold $300 million of 2.25% convertible senior notes due 2029, with net proceeds of approximately $293.2 million after fees[199]. - The company repurchased $285 million principal amount of outstanding 0.000% convertible notes due 2025, resulting in a gain of $15.5 million recorded under other income[199]. Tax and Financial Metrics - Tax benefits were $12.2 million in the three months ended June 30, 2024, compared to income taxes of $34.2 million in the same period in 2023[172]. - Financial expense, net was $0.9 million in the three months ended June 30, 2024, compared to financial income of $3.4 million in the same period in 2023, primarily due to an increase of $9.2 million in expenses related to credit loss[169]. - Financial expenses, net was $7.9 million in the six months ended June 30, 2024, compared to financial income of $27.1 million in the same period in 2023, primarily due to an increase of $11.4 million in expenses related to credit loss[169]. Market and Customer Insights - Revenues from outside of the U.S. comprised 63.4% of total revenues in the three months ended June 30, 2024, down from 80.3% in the same period in 2023[150]. - Approximately 48.33% of revenues for the six months ended June 30, 2024, were earned in non-U.S. dollar currencies, primarily the Euro[202]. - A hypothetical 10% change in foreign currency exchange rates between the Euro and the U.S. dollar would impact net income by $23.3 million for the six months ended June 30, 2024[202]. - As of June 30, 2024, two major customers accounted for approximately 25.3% of consolidated trade receivables, down from 46.8% as of December 31, 2023[204]. - For the three months ended June 30, 2024, one major customer accounted for approximately 11.3% of total revenues, compared to 29.6% for the same period in 2023[204]. Risks and Challenges - The company has reduced manufacturing capacity outside the U.S. and discontinued production in Mexico due to decreased demand[134]. - Approximately 10% of employees in Israel were called to active reserve duty due to the ongoing war, with 75% having returned to work[137]. - The company is exposed to commodity price risk from fluctuating prices of raw materials such as Copper, Lithium, Nickel, and Cobalt, without hedging arrangements in place[205].