SolarEdge Q2/2019 YoY Revenues Jump Up 43%

Record Revenue Contribution From Solar Business Leads Sales For SolarEdge In Q2/2019; Management Expects To Increase Expedited Shipping Costs Over Next 2 Quarters Anticipating Strong Demand
08:19 AM (Beijing Time) - 09. August 2019
Capture-944x351 PNG

SolarEdge had a good business in Q2/2019 - it increased its revenues by 43% compared to Q2/2018, also operating income was up, while its net income declined 4% over last year. (Photo Credit: SolarEdge Technologies, Inc.)

Key Takeaways

  • SolarEdge reported record revenues during Q2/2019 with solar business contributing $307 million to a total of $325 million
  • Maximum business in solar came from Europe that accounted for 48% of total segment revenues
  • Increase in demand is pushing the company to increase production capacity at a faster rate than anticipated
  • It also sees itself increasing its expedited shipping costs over next 2 quarters to meet customer demand
  • Company has a significant backlog in the US over next 2 quarters despite tariffs on Chinese made products

Israel based solar PV inverter and optimizer producer SolarEdge Technologies, Inc. reported record revenues in Q2/2019 reaching $325 million, a 43% increase since last year. The solar business was the star performer as it contributed $307 million, which is a record quarter for this business division.

Business from Europe represented 48% of total solar revenues, which the company said is an all-time high. It shipped a total of 1.3 GW of inverters during the quarter.

Management said the rapid growth in solar sales requires increasing its production capacity at an even faster pace than it anticipated earlier this year. Along with Europe, Brazil and Asia Pacific are markets that hold promise for its products. In the US, the company has a significant backlog for the next 2 quarters, despite the import taxes on Chinese products.

Top executives of the company during the call with analysts said the company needs to increase its expedited shipping costs in the forthcoming 2 quarters likely to have a temporary impact on its gross margins.   

Ramp up of the company’s Vietnam fab is on schedule as 2 automated optimizer lines and one virtual line are installed at the new site. SolarEdge expects to roll out first mass production shipment in Q3/2019.

Mass production of its 3-phase residential on-grid storage inverter is scheduled to begin in Q4/2019.

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,” said SolarEdge Founder, Chairman and CEO Guy Sella. “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.”

Operating income of the company was $45.4 million, a 12% increase from $40.7 million during Q2/2018, while its net income of $33.1 million was down 4% YoY. Cash flow from operating activities went up to $50.8 million at the end of June 2019, going up from $43.9 million on annual basis.

Guidance

In the 3rd quarter of 2019, SolarEdge has guided for revenues in the range of $395 million to $410 million and gross margin between 32% to 34%. Revenues from solar products is likely to be between $375 million to $390 million while gross margin from sale of solar products is anticipated to be within 33% to 35%.

Jeffrey Osborne of Cowen’s Equity Research team, commented  on the results, “We expect growth to remain strong heading into 2020 as our estimates prove conservative given the diverse product roadmap expansion into resi storage, larger commercial/utility scale inverters.”

Anu Bhambhani

Anu Bhambhani is the Senior News Editor of TaiyangNews

Write, follow the author.
Email

Anu Bhambhani