SolarEdge posts major growth but supply chain problems hit profits
Israeli solar energy technology company SolarEdge Technologies beat analysts’ estimates on revenue in the first quarter of this year, but missed on profit. This is a result of opposing factors. On the one hand, demand for the company’s products rose against the background of the energy crisis in Europe, and sales in the US reached record levels; on the other hand, supply chain difficulties eroded gross profit.
SolarEdge provides systems for monitoring and optimizing solar energy production, and energy storage solutions. In late trading in New York, after the quarterly financials were released, the company’s share price rose 2%. SolarEdge has a market cap of $14.14 billion.
First quarter revenue totaled $655 million, representing 61.6% growth over the corresponding quarter of 2021, and $20m. ahead of the consensus analysts’ estimate. On a GAAP basis, net profit was $33.1m., up 10.1% in comparison with the corresponding quarter.
As mentioned, supply chain difficulties eroded the company’s profitability, raising the cost of components and of shipping for its products. Movements in the euro-dollar exchange rate also had a negative impact on profit.
The gross profit margin in the solar segment was 30.2%, which compares with 32.8% in the previous quarter. The overall gross margin was 27.3%, down from 29.1% in the previous quarter and 34.5% in the corresponding quarter of 2021.
On a non-GAAP basis, SolarEdge posted a net profit $68.8m., up from $55.5m. in the corresponding quarter. Earnings per share were $1.20, $0.07 below the consensus analysts’ estimate.
Cash flow used in operating activities was $163m., compared with $89.6m. generated from operating activities in the previous quarter and $24.1m. generated from operating activities in the corresponding quarter last year.
At the end of the first quarter, SolarEdge had cash and cash equivalents of $979m., net of debt, which compares with $548m. at the end of 2021.
During the first quarter, SolarEdge raised $650.5m. net in a share offering at $295 per share. Its share price closed at $255.31 yesterday.
SolarEdge CEO Zvi Lando said, ”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. 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.” (Globes/TNS)