Solar PV inverter manufacturer SolarEdge Technologies, Inc. improved its Q3/2021 revenues with an increase of 10% QoQ and 56% YoY to report a record $526.4 million, despite a 12-week COVID-19 related shutdown in its Vietnam manufacturing facility, and 'unprecedented global logistics and supply chain challenges'. It shipped 1.9 GW total inverter capacity in the quarter.
To compensate for the loss of production with the Vietnam fab shutdown which majorly caters to the US market, it increased capacity at other sites which created a gap in the supply of products for the coming quarter. CEO Zvi Lando admitted that it will take time for the Israeli company to replenish which will come 'at a higher cost due to the need for expedited shipments and due to tariffs from shipping more China-made products to the US'.
According to analysts from Cowen, SolarEdge began shipping its Energy Bank in Q3 with installations in the US, Europe and Australia. A total of around 20 MWh were shipped.
Q3/2021
Of the Q3/2021 revenues, GAAP gross margin was 32.8%, up from 32.5% in the previous quarter and 32% in Q3/2020. Solar segment's gross margin of 36.6% was slightly down from 37.4% from the last quarter but up from 34.8% from last year (see A Healthy Q3/2020 For SolarEdge Technologies).
The company's GAAP net income went up 18% QoQ and 21% YoY to $53 million in the reporting quarter.
SolarEdge launched 2 new products in October 2021, both for the residential segment (see SolarEdge Launches New Residential Products).
Guidance
CEO Zvi Lando said the company exited Q3/2021 with a record backlog for Q4/2021 and Q1/2022 of more than 4 GW AC and still receiving orders. He added that the 4th quarter guidance does not fully reflect the high demand for its products and anticipated continued growth. The Vietnam factory is expected to be in full production by mid November.
SolarEdge expects to start shipping products from its new contract manufacturing site in Mexico from H1/2022.
For the 4th quarter, SolarEdge forecast revenues within $530 million to $560 million with solar segment contributing $490 million to $515 million. Non-GAAP gross margin for the group is likely to be between 30% to 32% and for solar segment it will be anywhere within 31% to 34%.
Around 70 MWh of battery banks are expected to be delivered in Q4/2021, which should make up for the delays in the previous quarter, according to the Cowen analysts. SolarEdge expects to reach a quarterly runrate of 180 MWh by the end of 1Q22, which would be equal to about 300 of its Energy Bank products per day. "We are constructive on the cadence given the contract with Samsung SDI for 1GWh," said Cowen.
In an investor note, Roth Capital analysts summarized that "SEDG delivered a mixed Q3, but lower-than-expected Q4 guide and that management sees limited Q4 storage revenues with more meaningful revenue in Q1." However, they analyzed, "As a result, we are touching down estimates on a more conservative 2022 storage forecast. Despite this, we think (…) the core solar business should remain strong in the U.S. and Europe through 2022."