SolarEdge recorded revenue of $326.1 million in Q3 2026, down 4.1% YoY; batteries contributed the largest share
The company expects Q4 revenue of $245 million to $275 million amid softer demand
SolarEdge is developing solid-state transformer technology for AI data centers, with pilot installations targeted for 2027
Israel-headquartered SolarEdge Technologies met its Q3 2026 revenue guidance, reaching the midpoint at $326.1 million, down 5.8% quarter-on-quarter (QoQ) and 4.1% year-on-year (YoY). Amid continued softer demand, the solar inverter, optimizer, and battery manufacturer lowered its revenue guidance for Q4 2026.
Despite the revenue decline, SolarEdge reported improved profitability. Its GAAP gross margin rose to 33.2% from 27.5% in the previous quarter and 21.2% a year earlier. This included a $36 million benefit related to tariffs under the International Emergency Economic Powers Act (IEEPA).
Net income (loss) also narrowed to $8.4 million, down from $30.8 million in Q2 2026 and $50.1 million in Q3 2025.
At $145.9 million, the US was SolarEdge’s largest market, representing 44.7% of total GAAP revenue. Europe accounted for 43.5% at $141.7 million, down 8.2% QoQ. International markets contributed $38.5 million, up 4.3% sequentially and representing 11.8% of revenue.
Batteries were SolarEdge's largest revenue generator during the quarter, with $121.6 million, followed by $93.8 million from power optimizers and $66.2 million from inverters.
The company's Nexis platform generated more than $100 million in revenue during the quarter, supported by the adoption of three-phase systems in European markets.
SolarEdge CEO Shuki Nir said that the US residential market continued to face weak demand, mainly due to delays in further guidance on Foreign Entity of Concern (FEOC) requirements and higher interest rates.
In Germany, uncertainty over proposed changes to the Renewable Energy Sources Act (EEG) is creating concerns about future demand. The proposed reduction in feed-in tariff (FIT) could affect the economics of new installations (see German Cabinet Backs Ending FITs For New Rooftop Solar Under EEG).
Owing to these factors, the company expects Q4 2026 revenue to be between $245 million and $275 million. These factors, along with normal winter seasonality, will lead to a 10% sequential decline in Q1 2027 revenue.
Alongside the weaker market outlook, SolarEdge is restructuring its operations to reduce costs and focus on more profitable markets. Speaking to analysts, management said it will withdraw from selected geographic markets and redirect resources towards core regions and growth opportunities.
Beyond the solar and storage business, SolarEdge is advancing its solid-state transformer (SST) technology for AI data center power sector infrastructure. During Q3 2026, the company continued developing a DC power system designed to connect medium-voltage grids to 800 VDC infrastructure. It claims a demonstrated efficiency of over 99% for SST cells in testing.
The company is now conducting demonstrations with potential customers and expects to complete a working system in its laboratory by the end of 2026. Pilot installations are planned for 2027, followed by volume shipments in 2028.