Solaredge announces first quarter 2022 financial results
Milpitas, calif.--(business wire)--solaredge technologies, inc. (nasdaq: sedg), a global leader in smart energy technology, today announced its financial results for the first quarter ended march 31, 2022. first quarter 2022 highlights record revenues of $655.1 million record revenues from solar segment of $608.0 million gaap gross margin of 27.3% non-gaap gross margin of 28.4% gross margin from solar segment of 30.2% gaap net income of $33.1 million non-gaap net income of $68.8 million gaap net diluted earnings per share (“eps”) of $0.60 non-gaap net diluted eps of $1.20 2.13 gigawatts (ac) of inverters shipped “we are pleased with our record revenues for the first quarter which represent 62% growth from the first quarter of last year and which are driven by record revenues in the united states and 14 countries in europe,” said zvi lando, chief executive officer of solaredge. “we continue to demonstrate our operational capabilities by navigating the current supply chain environment to meet strong worldwide demand for our products, and continuing to build long-term manufacturing capacity to support our growing businesses.” first quarter 2022 summary the company reported record revenues of $655.1 million, up 19% from $551.9 million in the prior quarter and up 62% from $405.5 million in the same quarter last year. revenues from the solar segment were record $608.0 million, up 21% from $502.7 million in the prior quarter and up 62% from $376.4 million in the same quarter last year. gaap gross margin was 27.3%, down from 29.1% in the prior quarter and down from 34.5% in the same quarter last year. non-gaap gross margin was 28.4%, down from 30.3% in the prior quarter and down from 36.5% in the same quarter last year. gross margin from the solar segment was 30.2%, down from 32.8% in the prior quarter and down from 39.7% in the same quarter last year. gaap operating expenses were $128.1 million, up 7% from $119.5 million in the prior quarter and up 34% from $95.9 million in the same quarter last year. non-gaap operating expenses were $98.9 million, up 5% from $94.1 million in the prior quarter and up 30% from $76.2 million in the same quarter last year. gaap operating income was $50.9 million, up 24% from $41.0 million in the prior quarter and up 15% from $44.1 million in the same quarter last year. non-gaap operating income was $87.2 million, up 20% from $72.9 million in the prior quarter and up 21% from $71.9 million in the same quarter last year. gaap net income was $33.1 million, down 19% from $41.0 million in the prior quarter and up 10% from $30.1 million in the same quarter last year. non-gaap net income was $68.8 million, up 10% from $62.8 million in the prior quarter and up 24% from $55.5 million in the same quarter last year. gaap net diluted eps was $0.60, down from $0.74 in the prior quarter and up from $0.55 in the same quarter last year. non-gaap net diluted eps was $1.20, up from $1.10 in the prior quarter and up from $0.98 in the same quarter last year. cash flow used in operating activities was $163.0 million, compared with $89.6 million generated from operating activities in the prior quarter and $24.1 million generated from operating activities in the same quarter last year. as of march 31, 2022, cash, cash equivalents, bank deposits, restricted bank deposit and marketable securities totaled $979.0 million, net of debt, compared to $548.0 million on december 31, 2021. on march 17, 2022, the company offered and sold 2,300,000 shares of its common stock in a public offering at a price of $295.00 per share. the net proceeds to the company after underwriters' discounts and commissions and offering costs were $650.5 million. outlook for the second quarter 2022 the company also provides guidance for the second quarter ending june 30, 2022 as follows: revenues to be within the range of $710 million to $740 million non-gaap gross margin expected to be within the range of 26% to 29% revenues from solar segment to be within the range of $660 million to $690 million gross margin from solar segment expected to be within the range of 28% to 31% conference call the company will host a conference call to discuss these results at 4:30 p.m. et on monday, may 2, 2022. the call will be available, live, to interested parties by dialing 800-304-0389. for international callers, please dial +1 313-209-5140. the conference id number is 9289118. 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, ups, 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, 2021, filed on february 22, 2022 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 2, 2022. 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. solaredge technologies inc. condensed consolidated statements of income (unaudited) (in thousands, except per share data) three months ended march 31, 2022 2021 revenues $ 655,080 $ 405,489 cost of revenues 476,122 265,415 gross profit 178,958 140,074 operating expenses: research and development 66,349 46,977 sales and marketing 35,316 26,911 general and administrative 26,429 19,849 other operating expenses — 2,209 total operating expenses 128,094 95,946 operating income 50,864 44,128 financial expense, net (5,449 ) (6,097 ) income before income taxes 45,415 38,031 income taxes 12,292 7,955 net income $ 33,123 $ 30,076 solaredge technologies inc. condensed consolidated balance sheets (unaudited) (in thousands, except per share data) march 31, 2022 december 31, 2021 assets current assets: cash and cash equivalents $ 1,002,772 $ 530,089 marketable securities 158,557 167,728 trade receivables, net of allowances of $3,226 and $2,626, respectively 676,820 456,339 inventories, net 432,504 380,143 prepaid expenses and other current assets 191,664 176,992 total current assets 2,462,317 1,711,291 long-term assets: marketable securities 449,673 482,228 deferred tax assets, net 31,205 27,572 property, plant and equipment, net 473,511 410,379 operating lease right-of-use assets, net 59,783 47,137 intangible assets, net 55,734 58,861 goodwill 127,109 129,629 other long-term assets 23,583 24,963 total long-term assets 1,220,598 1,180,769 total assets $ 3,682,915 2,892,060 liabilities and stockholders’ equity current liabilities: trade payables, net $ 241,630 $ 252,068 employees and payroll accruals 84,309 74,465 warranty obligations 82,340 71,480 deferred revenues and customers advances 25,511 17,789 accrued expenses and other current liabilities 134,951 109,379 total current liabilities 568,741 525,181 long-term liabilities: convertible senior notes, net 622,263 621,535 warranty obligations 210,326 193,680 deferred revenues 158,734 151,556 finance lease liabilities 53,405 40,508 operating lease liabilities 48,480 38,912 other long-term liabilities 10,441 10,649 total long-term liabilities 1,103,649 1,056,840 commitments and contingent liabilities stockholders’ equity: common stock of $0.0001 par value - authorized: 125,000,000 shares as of march 31, 2022 and december 31, 2021; issued and outstanding: 55,386,146 and 52,815,395 shares as of march 31, 2022 and december 31, 2021, respectively 6 5 additional paid-in capital 1,373,405 687,295 accumulated other comprehensive loss (46,067 ) (27,319 ) retained earnings 683,181 650,058 total stockholders’ equity 2,010,525 1,310,039 total liabilities and stockholders’ equity $ 3,682,915 $ 2,892,060 solaredge technologies inc. condensed consolidated statements of cash flows (unaudited) (in thousands, except per share data) three months ended march 31, 2022 2021 cash flows from operating activities: net income $ 33,123 $ 30,076 adjustments to reconcile net income to net cash provided by operating activities: depreciation of property, plant and equipment 9,002 6,887 amortization of intangible assets 2,658 2,391 amortization of debt discount and debt issuance costs 728 724 amortization of premium and accretion of discount on available-for-sale marketable securities, net 2,550 1,295 stock-based compensation expenses 34,107 23,153 deferred income taxes, net (1,034 ) (2,141 ) loss (gain) from sale and disposal of assets (410 ) 2,147 exchange rate fluctuations and other items, net 3,024 13,303 changes in assets and liabilities: inventories, net (51,323 ) (8,376 ) prepaid expenses and other assets (17,163 ) 20,218 trade receivables, net (224,865 ) (57,380 ) trade payables, net (28,045 ) (39,034 ) employees and payroll accruals 9,246 7,477 warranty obligations 27,629 13,088 deferred revenues and customers advances 15,029 3,615 other liabilities, net 22,755 6,640 net cash provided by (used in) operating activities (162,989 ) 24,083 cash flows from investing activities: proceed from sales and maturities of available-for-sale marketable securities 53,096 40,450 purchase of property, plant and equipment (43,210 ) (24,545 ) investment in available-for-sale marketable securities (26,712 ) (186,528 ) withdrawal from bank deposits, net — 16,470 other investing activities 1,692 571 net cash used in investing activities $ (15,134 ) $ (153,582 ) cash flows from financing activities: proceeds from secondary public offering, net of issuance costs 650,526 — proceeds from exercise of stock-based awards 1,478 5,008 proceeds (withholdings) from stock-based awards, net 822 (6,724 ) other financing activities (491 ) (346 ) net cash provided by (used in) financing activities 652,335 (2,062 ) increase (decrease) in cash and cash equivalents 474,212 (131,561 ) cash and cash equivalents at the beginning of the period 530,089 827,146 effect of exchange rate differences on cash and cash equivalents (1,529 ) (10,428 ) cash and cash equivalents at the end of the period $ 1,002,772 $ 685,157 solaredge technologies inc. reconciliation of non-gaap financial measures (unaudited) (in thousands, except per share data and percentages) reconciliation of gaap to non-gaap three months ended march 31, 2022 december 31, 2021 march 31, 2021 gross profit (gaap) 178,958 160,491 140,074 revenues from finance component (135 ) (122 ) (86 ) stock-based compensation 5,062 4,373 5,790 amortization and depreciation of acquired assets 2,219 2,272 2,312 gross profit (non-gaap) 186,104 167,014 148,090 gross margin (gaap) 27.3 % 29.1 % 34.5 % revenues from finance component 0.0 % 0.0 % 0.0 % stock-based compensation 0.8 % 0.8 % 1.4 % amortization and depreciation of acquired assets 0.3 % 0.4 % 0.6 % gross margin (non-gaap) 28.4 % 30.3 % 36.5 % operating expenses (gaap) 128,094 119,453 95,946 stock-based compensation - r&d (14,985 ) (14,872 ) (8,798 ) stock-based compensation - s&m (6,701 ) (5,882 ) (5,435 ) stock-based compensation - g&a (7,359 ) (4,076 ) (3,130 ) amortization and depreciation of acquired assets - r&d (303 ) (302 ) (12 ) amortization and depreciation of acquired assets - s&m (236 ) (225 ) (237 ) amortization and depreciation of acquired assets - g&a (6 ) (6 ) (8 ) gain (loss) from assets sales and disposal 410 18 62 other operating income (expenses) — — (2,209 ) operating expenses (non-gaap) 98,914 94,108 76,179 operating income (gaap) 50,864 41,038 44,128 revenues from finance component (135 ) (122 ) (86 ) stock-based compensation 34,107 29,203 23,153 amortization and depreciation of acquired assets 2,764 2,805 2,569 loss (gain) from assets sales and disposal (410 ) (18 ) (62 ) other operating (income) expenses — — 2,209 operating income (non-gaap) 87,190 72,906 71,911 solaredge technologies inc. reconciliation of non-gaap financial measures (unaudited) (in thousands, except per share data and percentages) reconciliation of gaap to non-gaap three months ended march 31, 2022 december 31, 2021 march 31, 2021 financial income (expense), net (gaap) (5,449 ) (6,324 ) (6,097 ) notes due 2025 728 727 724 non cash interest 1,609 1,527 1,336 unrealized gains/losses — (541 ) — currency fluctuation related to lease standard (1,792 ) 2,422 (2,289 ) financial income (expense), net (non-gaap) (4,904 ) (2,189 ) (6,326 ) income tax benefit (expense) (gaap) (12,292 ) 6,240 (7,955 ) uncertain tax positions — (9,007 ) — deferred taxes (1,201 ) (5,181 ) (2,141 ) income tax benefit (expense) (non-gaap) (13,493 ) (7,948 ) (10,096 ) net income (gaap) 33,123 40,954 30,076 revenues from finance component (135 ) (122 ) (86 ) stock-based compensation 34,107 29,203 23,153 amortization and depreciation of acquired assets 2,764 2,805 2,569 loss (gain) from assets sales and disposal (410 ) (18 ) (62 ) other operating (income) expenses — — 2,209 notes due 2025 728 727 724 non cash interest 1,609 1,527 1,336 unrealized gains (losses) — (541 ) — currency fluctuation related to lease standard (1,792 ) 2,422 (2,289 ) uncertain tax positions — (9,007 ) — deferred taxes (1,201 ) (5,181 ) (2,141 ) net income (non-gaap) 68,793 62,769 55,489 solaredge technologies inc. reconciliation of non-gaap financial measures (unaudited) (in thousands, except per share data and percentages) reconciliation of gaap to non-gaap three months ended march 31, 2022 december 31, 2021 march 31, 2021 net basic earnings per share (gaap) 0.62 0.78 0.58 revenues from finance component 0.00 0.00 0.00 stock-based compensation 0.64 0.55 0.45 amortization and depreciation of acquired assets 0.05 0.05 0.05 loss (gain) from assets sales and disposal (0.00 ) (0.00 ) (0.00 ) other operating (income) expenses — — 0.04 notes due 2025 0.01 0.02 0.01 non cash interest 0.03 0.03 0.03 unrealized gains (losses) — (0.01 ) — currency fluctuation related to lease standard (0.03 ) 0.04 (0.05 ) uncertain tax positions — (0.17 ) — deferred taxes (0.03 ) (0.10 ) (0.04 ) net basic earnings per share (non-gaap) 1.29 1.19 1.07 net diluted earnings per share (gaap) 0.60 0.74 0.55 revenues from finance component 0.00 0.00 0.00 stock-based compensation 0.58 0.50 0.40 amortization and depreciation of acquired assets 0.05 0.05 0.04 loss (gain) from assets sales and disposal (0.01 ) (0.00 ) (0.00 ) other operating (income) expenses — — 0.04 notes due 2025 0.01 0.00 0.00 non cash interest 0.02 0.03 0.03 unrealized gains (losses) — (0.01 ) — currency fluctuation related to lease standard (0.03 ) 0.04 (0.04 ) uncertain tax positions — (0.16 ) — deferred taxes (0.02 ) (0.09 ) (0.04 ) net diluted earnings per share (non-gaap) 1.20 1.10 0.98 number of shares used in computing net diluted earnings per share (gaap) 56,315,193 56,011,040 55,997,136 stock-based compensation 927,219 894,079 766,187 number of shares used in computing net diluted earnings per share (non-gaap) 57,242,412 56,905,119 56,763,323
