SolarEdge registered a GAAP net loss of $1.21 billion during Q3 2024
It blamed impairments and write-downs, including $536 million for the solar vertical
For Q4 2024, it targets to report $180 million to $200 million in revenues
Over $1.03 billion in impairments and write-downs negatively impacted Israel’s solar inverter manufacturer SolarEdge Technologies in Q3 2024. It resulted in the company reporting a GAAP net loss of $1.21 billion for the reporting quarter.
Speaking to analysts to discuss the financial results, SolarEdge CFO Ariel Porat shared that these impairments and write-downs were a result of the significant difference between the book value of its assets and the company’s market cap due to a sustained decline in its market cap.
Of the $612 million of inventory write-downs, $536 million is related to the solar business and $76 million to the non-solar business. A write-down of $94 million was related to the retirement of solar machinery due to a reduction in manufacturing. Similarly, it took an impairment of $113 million on manufacturing assets in the energy storage business.
The write-downs, he explained, were due mainly to excess inventory that it no longer expects to sell in Europe owing to lower demand, as well as due to the accelerated increase in demand for domestic content ‘which came sooner than expected,’ thus reducing the demand for some products in its inventory.
SolarEdge’s Q3 revenues of $260.9 million comprise $247.5 million from the solar segment. The latter includes the sale of PV-attached residential and commercial batteries.
The US solar market brought in $128.7 million or 52% of the company’s solar revenues. The European market accounted for $78.9 million or 32% of the solar revenues. Other international markets represented the remaining 16% or $39.9 million of PV revenues.
During the reporting quarter, it shipped 341 MW to the US, 191 MW to Europe, and 318 MW to the international markets. Out of the 850 MW of total solar shipments, 67% went to the commercial and utility segment, with the remaining 33% going to the residential segment.
Philip Shen of ROTH MKM counts the uncertainty in the European Union (EU) market and competition from Tesla’s Powerwall 3 in the US among the challenges for the company going forward.
For Q4 2024, SolarEdge expects to report revenues within the range of $180 million to $200 million. The solar PV segment is likely to account for $170 million to $190 million of this total.
Gross margin for the solar segment is guided within the 0% to 3% range, including approximately 1,050 basis points of net Inflation Reduction Act (IRA) manufacturing tax credit.
Recently, the company made its 1st sale of 45X Advanced Manufacturing Tax Credits in the US for its US-made solar inverters (see SolarEdge Raises $40 Million With 45X US Tax Credits Sale).