SolarEdge Announces Second Quarter 2019 Financial Results
Second Quarter 2019 Highlights
- Record revenues of $325.0 million
- Record revenues from solar products of $306.7 million
- GAAP gross margin of 34.1%
- GAAP gross margin from sale of solar products of 36.4%
- Non-GAAP gross margin from sale of solar products of 36.9%
- GAAP net income of $33.1 million
- Record Non-GAAP net income of $49.3 million
- GAAP net diluted earnings per share (“EPS”) of $0.66
- Record Non-GAAP net diluted EPS of $0.94
- 1.3 Gigawatts (AC) of inverters shipped
“We are pleased to conclude a strong second quarter of record revenues, record non-GAAP net income and record non-GAAP net diluted EPS. We continue to generate strong cash flow while strengthening our position as the global leader in the inverter market,” said Guy Sella, founder, Chairman and CEO of SolarEdge. “Despite the effect of increased tariffs on certain Chinese made products, our non-GAAP solar business gross margin was strong, at approximately 37%, slightly higher than the same quarter last year. The integration of the acquired non-solar businesses is proceeding on schedule and we expect growth in each new line of business in the upcoming quarters. We see strong customer demand for our products worldwide and we are building the needed capacity both in China and outside of China to meet the needs of our customers.”
Second Quarter 2019 Summary
The Company reported record revenues of $325.0 million, up 20% from $271.9 million in the prior quarter and up 43% from $227.1 million in the same quarter last year.
Revenues related to the solar business were $306.7 million, up 21% from $253.1 million in the prior quarter and up 35% from $227.1 million in the same quarter last year.
GAAP gross margin was 34.1%, up from 31.7% in the prior quarter and down from 36.1% year over year. This quarter’s gross margins were negatively impacted by the increase in US tariffs on China made products.
Non-GAAP gross margin was 35.7%, up from 32.8% in the prior quarter and down from 36.5% year over year.
GAAP gross margin for the solar business was 36.4%, up from 33.8% in the prior quarter.
Non-GAAP gross margin for the solar business was 36.9%, up from 34.3% in the prior quarter.
GAAP operating expenses were $65.3 million, up 12% from $58.1 million in the prior quarter and up 58% from $41.3 million in the same quarter last year.
Non-GAAP operating expenses were $54.9 million, up 14% from $48.0 million in the prior quarter and up 56% from $35.1 million in the same quarter last year.
GAAP operating income was $45.4 million, up 62% from $28.0 million in the prior quarter and up 12% from $40.7 million in the same quarter last year.
Non-GAAP operating income was $61.0 million, up 48% from $41.2 million in the prior quarter and up 28% from $47.8 million in the same quarter last year.
GAAP net income was $33.1 million, up 74% from $19.0 million in the prior quarter and down 4% from $34.6 million in the same quarter last year.
Non-GAAP net income was $49.3 million, up 50% from $32.9 million in the prior quarter and up 21% from $40.6 million in the same quarter last year.
GAAP net diluted EPS was $0.66, up from $0.39 in the prior quarter and down from $0.72 in the same quarter last year.
Non-GAAP net diluted EPS was $0.94, up from $0.64 in the prior quarter and up from $0.82 in the same quarter last year.
Cash flow from operating activities was $50.8 million, down from $56.5 million in the prior quarter and up from $43.9 million in the same quarter last year.
As of June 30, 2019, cash, cash equivalents, bank deposits, restricted bank deposit and marketable securities totaled $373.6 million, compared to $398.7 million on March 31, 2019 after all payments related to the acquisition of SMRE shares.
Outlook for the Third Quarter 2019
The Company also provides guidance for the third quarter ending September 30, 2019 as follows:
- Revenues to be within the range of $395 million to $410 million
- Gross margin expected to be within the range of 32% to 34%
- Revenues from solar products to be within the range of $375 million to $390 million
- Gross margin from sale of solar products expected to be within the range of 33% to 35%
The Company will host a conference call to discuss these results at 4:30 P.M. ET on Tuesday, August 6, 2019. The call will be available, live, to interested parties by dialing 800-353-6461. For international callers, please dial +1 334-323-0501. The Conference ID number is 9972180. 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.
SolarEdge is a global leader in smart energy. 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 solaredge.com