SolarEdge has attributed write-down and impairment as primarily responsible for its Q4 2024 business results
It admits to excess inventory that it no longer expects to sell as situation will not likely improve in Europe any time soon
It forecasts revenues within the range of $195 million to $215 million for Q1 2025
Israel-based global solar PV inverter manufacturer SolarEdge Technologies continues to face tough business environment as it reported its 3rd consecutive quarter of revenue loss, and 4th consecutive quarter of GAAP operating income loss in Q4 2024.
It took 17% quarter-on-quarter (QoQ) decline in its Q4 revenues with $196.2 million, including $189 million in the solar segment where revenues dropped 15%. The US market accounted for 60% of its solar revenues, followed by 24% from Europe. Remaining 16% was contributed by other international solar markets.
Operating loss narrowed to $151.4 million, down from $382.9 million in the previous quarter, and so did the net loss from $1.23 billion in Q3 2024 to $287.4 million in the reporting quarter. Back then, it stated its net loss as $1.21 billion (see SolarEdge Reports $1.21 Billion GAAP Net Loss For Q3 2024).
It attributes the loss primarily to a write-down and impairment of $138 million on various assets in Q4 of which, approximately $87 million net is related to the solar business. The company admits to excess inventory that it no longer expects to sell as it does not see the recovery in the European markets any time soon.
While in the North American market its channel inventories were largely normalized in Q4 2024, challenges continue in Europe where the management expects the vast majority of its distribution partners to reach normalized inventory levels by Q2 2025-end.
For FY2024, its total revenues of $901.5 million represented an annual decline of more than $2 billion from $2.98 billion in 2023, driven by solar business whose revenues dropped from $2.82 billion to $842.4 million.
Its total inverter shipments of 2024 totaled 3,563 MW AC, and 576 MWh of batteries for PV applications. These comprise 895 MW AC inverters and 130 MWh of batteries shipped in Q4.
In a call with analysts, the company CEO Shuki Nir admitted to reporting dismal results over the last few quarters and shared the steps the company is now taking to move up from here. “To drive this turnaround, I have identified four key priorities strengthening our financials, regaining market share, accelerating innovation and ramping up U.S. manufacturing. These initiatives will not only help us navigate the current environment but also position us for sustained long-term growth,” he explained.
As of now, SolarEdge is manufacturing inverters, optimizers, and batteries in the US, with a run rate capacity of over 70,000 inverters/quarter at the Austin fab. The Florida factory is on track to reach a run rate of 2 million optimizers/quarter in Q1 2025.
Nir added, “In early 2025, we made a very difficult decision to make additional headcount and expense reductions. We will continue to implement cost-saving measures by focusing on core projects, markets and product lines.”
Philip Shen of ROTH opined, "The EU remains challenged, however, in our view, and while PW3 supply/domcon (domestic content) challenges could support SEDG in the US in the near term, we remain on the sidelines until visibility & fundamentals improve more meaningfully."
Since it shut down the company’s energy storage business in Korea in November 2024 to focus on the core solar business, it has not included the same in the financial results (see SolarEdge Closing Down Energy Storage Business Division).
For Q1 2025, SolarEdge forecasts revenues within the range of $195 million to $215 million.
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