SolarEdge Technologies, Inc. (Nasdaq: SEDG), a global leader in
smart energy technology, today announced its financial results for
the fourth quarter and full year ended December 31, 2021.
Fourth Quarter 2021 Highlights
- Record revenues of $551.9 million
- Record revenues from solar segment of $502.7 million
- GAAP gross margin of 29.1%
- Non-GAAP gross margin of 30.3%
- Gross margin from solar segment of 32.8%
- GAAP net income of $41.0 million
- Non-GAAP net income of $62.8 million
- GAAP net diluted earnings per share (“EPS”) of $0.74
- Non-GAAP net diluted EPS of $1.10
- 1.92 Gigawatts (AC) of inverters shipped
Full Year 2021 Highlights
- Record revenues of $1.96 billion, up 34.6% year over year from
2020
- Record revenues from solar segment of $1.79 billion
- GAAP gross margin of 32.0%
- Non-GAAP gross margin of 33.5%
- Gross margin from solar segment of 36.4%
- Record GAAP net income of $169.2 million
- Record Non-GAAP net income of $272.9 million
- Record GAAP net diluted earnings per share (“EPS”) of
$3.06
- Record Non-GAAP net diluted EPS of $4.81
- 7.2 Gigawatts (AC) of inverters shipped
“We are ending 2021 with record revenues for the quarter and for
the year,” said Zvi Lando, Chief Executive Officer of SolarEdge.
“The global demand for solar energy across all segments and
geographies is extremely strong and generating unprecedented demand
for our products. In particular, we are excited about the strong
momentum of the commercial market and the increasing rate of
adoption of our innovative technology within this segment. Our
focus is to ensure customers have the products they need to execute
their projects and we are enabling this by ramping production in
multiple sites and navigating supply chain and logistic
challenges.”
Fourth Quarter 2021 Summary
The Company reported revenues of $551.9 million, up 5% from
$526.4 million in the prior quarter and up 54% from $358.1 million
in the same quarter last year.
Revenues from the solar segment were $502.7 million, up 5% from
$476.8 million in the prior quarter and up 54% from $327.1 million
in the same quarter last year.
GAAP gross margin was 29.1%, down from 32.8% in the prior
quarter and down from 30.8% in the same quarter last year.
Non-GAAP gross margin was 30.3%, down from 34.0% in the prior
quarter and down from 32.5% in the same quarter last year.
Gross margin from the solar segment was 32.8%, down from 36.6%
in the prior quarter and down from 36.2% in the same quarter last
year.
GAAP operating expenses were $119.5 million, up 13% from $106.1
million in the prior quarter and up 25% from $95.9 million in the
same quarter last year.
Non-GAAP operating expenses were $94.1 million, up 12% from
$83.8 million in the prior quarter and up 29% from $72.9 million in
the same quarter last year.
GAAP operating income was $41.0 million, down 38% from $66.4
million in the prior quarter and up 184% from $14.4 million in the
same quarter last year.
Non-GAAP operating income was $72.9 million, down 23% from $95.2
million in the prior quarter and up 68% from $43.5 million in the
same quarter last year.
GAAP net income was $41.0 million, down 23% from $53.0 million
in the prior quarter and up 132% from $17.7 million in the same
quarter last year.
Non-GAAP net income was $62.8 million, down 24% from $82.1
million in the prior quarter and up 13% from $55.7 million in the
same quarter last year.
GAAP net diluted EPS was $0.74, down from $0.96 in the prior
quarter and up from $0.33 in the same quarter last year.
Non-GAAP net diluted EPS was $1.10, down from $1.45 in the prior
quarter and up from $0.98 in the same quarter last year.
Cash flow from operating activities was $89.6 million, up from
$61.8 million in the prior quarter and up from $27.2 million in the
same quarter last year.
As of December 31, 2021, cash, cash equivalents, bank deposits,
restricted bank deposit and marketable securities totaled $548.0
million, net of debt, compared to $524.1 million on September 30,
2021.
Full Year 2021 Summary
Total revenues of $1.96 billion, up 34.6% from $1.46 billion in
the prior year.
GAAP gross margin was 32.0%, up from 31.6% in the prior
year.
Non-GAAP gross margin was 33.5%, up from 33.0% in the prior
year.
GAAP operating income was $207.1 million, up 45% from $142.6
million in the prior year.
Non-GAAP operating income was $321.4 million, up 47% from $218.8
million in the prior year.
GAAP net income was $169.2 million, up 21% from $140.3 million
in the prior year.
Non-GAAP net income was $272.9 million, up 22% from $224.4
million in the prior year.
GAAP net diluted EPS was $3.06, up from $2.66 in the prior
year.
Non-GAAP net diluted EPS was $4.81, up from $4.11 in the prior
year.
Cash flow from operating activities of $214.1 million, down from
$222.7 million in the prior year.
Outlook for the First Quarter 2022
The Company also provides guidance for the first quarter ending
March 31, 2022 as follows:
- Revenues to be within the range of $615 million to $645
million
- Non-GAAP gross margin expected to be within the range of 28% to
30%
- Revenues from solar segment to be within the range of $575
million to $595 million
- Gross margin from solar segment expected to be within the range
of 30% to 32%
Conference Call
The Company will host a conference call to discuss these results
at 4:30 p.m. ET on Tuesday, February 15, 2022. The call will be
available, live, to interested parties by dialing 888-300-0211. For
international callers, please dial +1 773-377-9384. The Conference
ID number is 5805953. A live webcast will also be available in the
Investors Relations section of the Company’s website at:
http://investors.solaredge.com.
A replay of the webcast will be available in the Investor
Relations section of the Company’s web site approximately two hours
after the conclusion of the call and will remain available for
approximately 30 calendar days.
About SolarEdge
SolarEdge is a global leader in smart energy technology. By
leveraging world-class engineering capabilities and with a
relentless focus on innovation, SolarEdge creates smart energy
solutions that power our lives and drive future progress. SolarEdge
developed an intelligent inverter solution that changed the way
power is harvested and managed in photovoltaic (PV) systems. The
SolarEdge DC optimized inverter seeks to maximize power generation
while lowering the cost of energy produced by the PV system.
Continuing to advance smart energy, SolarEdge addresses a broad
range of energy market segments through its PV, storage, EV
charging, batteries, UPS, electric vehicle powertrains, and grid
services solutions. SolarEdge is online at www.solaredge.com
Use of Non-GAAP Financial Measures
The Company has presented certain non-GAAP financial measures in
this release, such as non-GAAP net income, non-GAAP net diluted
EPS, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP
operating income and non-GAAP gross margin from sale of solar
products. Generally, a non-GAAP financial measure is a numerical
measure of a company's performance, financial position, or cash
flows that either exclude or include amounts that are not normally
excluded or included in the most directly comparable measure
calculated and presented in accordance with generally accepted
accounting principles in the United States, or GAAP. Reconciliation
of each non-GAAP financial measure to the most directly comparable
GAAP financial measure can be found in the accompanying tables to
this release. These non-GAAP financial measures do not reflect a
comprehensive system of accounting, differ from GAAP measures with
the same captions and may differ from non-GAAP financial measures
with the same or similar captions that are used by other companies.
As such, these non-GAAP measures should be considered as a
supplement to, and not as a substitute for, or superior to,
financial measures calculated in accordance with GAAP.
The Company uses these non-GAAP financial measures to analyze
its operating performance and future prospects, develop internal
budgets and financial goals, and to facilitate period-to-period
comparisons. The Company believes that these non-GAAP financial
measures reflect an additional way of viewing aspects of its
operations that, when viewed with its GAAP results, provide a more
complete understanding of factors and trends affecting its
business.
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995
This release contains forward looking statements which are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements
include information, among other things, concerning: our possible
or assumed future results of operations; future demands for solar
energy solutions; business strategies; technology developments;
financing and investment plans; dividend policy; competitive
position; industry and regulatory environment; general economic
conditions; potential growth opportunities; and the effects of
competition. These forward-looking statements are often
characterized by the use of words such as “anticipate,” “believe,”
“could,” “seek,” “estimate,” “expect,” “intend,” “may,” “plan,”
“potential,” “predict,” “project,” “should,” “will,” “would” or
similar expressions and the negative or plural of those terms and
other like terminology.
Forward-looking statements are only predictions based on our
current expectations and our projections about future events. These
forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause our actual results,
levels of activity, performance or achievements to be materially
different from those expressed or implied by the forward-looking
statements. Given these factors, you should not place undue
reliance on these forward-looking statements. These factors
include, but are not limited to, the matters discussed in the
section entitled “Risk Factors” of our Annual Report on Form 10-K/A
for the year ended December 31, 2020, filed on February 19, 2021
and our quarterly reports filed on Form 10-Q, Current Reports on
Form 8-K and other reports filed with the SEC. All information set
forth in this release is as of February 15, 2022. The Company
undertakes no duty or obligation to update any forward-looking
statements contained in this release as a result of new
information, future events or changes in its expectations.
SOLAREDGE TECHNOLOGIES
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
(in thousands, except per share
data)
Three months ended
December 31,
Year ended
December 31,
2021
2020
2021
2020
Unaudited
Revenues
$
551,915
$
358,107
$
1,963,865
$
1,459,271
Cost of revenues
391,424
247,782
1,334,547
997,912
Gross profit
160,491
110,325
629,318
461,359
Operating expenses:
Research and development
64,326
47,513
219,633
163,123
Sales and marketing
33,248
28,872
119,000
95,985
General and administrative
21,879
18,042
82,196
63,119
Other operating expense (income), net
----
1,471
1,350
(3,429
)
Total
operating expenses
119,453
95,898
422,179
318,798
Operating income
41,038
14,427
207,139
142,561
Financial income (expense), net
(6,324
)
10,380
(19,915
)
21,105
Income before income taxes
34,714
24,807
187,224
163,666
Income tax benefit (expense)
6,240
(7,152
)
(18,054
)
(23,344
)
Net income
$
40,954
$
17,655
$
169,170
$
140,322
SOLAREDGE TECHNOLOGIES
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands, except per share
data)
December 31,
2021
2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
530,089
$
827,146
Marketable securities
167,728
143,687
Trade receivables, net of allowances of
$2,626 and $2,886, respectively
456,339
218,706
Inventories, net
380,143
331,696
Prepaid expenses and other current
assets
176,992
198,106
Total current
assets
1,711,291
1,719,341
LONG-TERM ASSETS:
Marketable securities
482,228
147,434
Deferred tax assets, net
27,572
11,676
Property, plant and equipment, net
410,379
303,408
Operating lease right-of-use assets,
net
47,137
41,600
Intangible assets, net
58,861
67,818
Goodwill
129,629
140,479
Other long-term assets
24,963
5,353
Total
long-term assets
1,180,769
717,768
Total
assets
$
2,892,060
$
2,437,109
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Trade payables, net
$
252,068
$
162,051
Employees and payroll accruals
74,465
63,738
Warranty obligations
71,480
62,614
Deferred revenues and customers
advances
17,789
24,648
Accrued expenses and other current
liabilities
109,379
123,048
Total current
liabilities
525,181
436,099
LONG-TERM LIABILITIES:
Convertible senior notes, net
621,535
573,350
Warranty obligations
193,680
142,380
Deferred revenues
151,556
115,372
Finance lease liabilities
40,508
26,173
Operating lease liabilities
38,912
35,194
Other long-term liabilities
10,649
22,784
Total
long-term liabilities
1,056,840
915,253
COMMITMENTS AND CONTINGENT LIABILITIES
STOCKHOLDERS’ EQUITY:
Common stock of $0.0001 par value -
Authorized: 125,000,000 shares as of December 31, 2021 and December
31, 2020; issued and outstanding: 52,815,395 and 51,560,936 shares
as of December 31, 2021 and December 31, 2020, respectively
5
5
Additional paid-in capital
687,295
603,891
Accumulated other comprehensive income
(loss)
(27,319
)
3,857
Retained earnings
650,058
478,004
Total
stockholders’ equity
1,310,039
1,085,757
Total
liabilities and stockholders’ equity
$
2,892,060
$
2,437,109
SOLAREDGE TECHNOLOGIES
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands, except per share
data)
Year ended
December 31,
2021
2020
Cash flows provided by operating
activities: Net income $
169,170
$
140,322
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation of property, plant and equipment
29,359
22,355
Amortization of intangible assets
10,176
9,479
Amortization of debt discount and debt issuance costs
2,903
3,185
Amortization of premium and accretion of discount on
available-for-sale marketable securities, net
9,462
1,168
Stock-based compensation expenses
102,593
67,309
Deferred income taxes, net
(12,045
)
(2,738
)
Exchange rate fluctuations and other items, net
20,697
3,860
Changes in assets and liabilities: Inventories, net
(43,051
)
(149,661
)
Prepaid expenses and other assets
(39,444
)
(3,276
)
Trade receivables, net
(247,723
)
86,538
Trade payables, net
91,709
3,333
Employees and payroll accruals
26,519
18,315
Warranty obligations
60,524
32,274
Deferred revenues and customers advances
29,936
(21,438
)
Other liabilities, net
3,344
11,630
Net cash provided by operating activities
214,129
222,655
Cash flows from investing activities:
Investment in available-for-sale marketable securities
(579,377
)
(223,705
)
Proceeds from sales and maturities of available-for-sale marketable
securities
202,188
141,839
Investment in privately-held company
(16,643
)
---- Purchase of property, plant and equipment
(149,251
)
(126,790
)
Withdrawal from (investment in) bank deposits, net
60,096
(54,752
)
Withdrawal from restricted bank deposits
798
25,267
Other investing activities
(2,022
)
1,504
Net cash used in investing activities $
(484,211
)
$
(236,637
)
Cash flows from financing activities:
Repayment of bank loans $
(16,073
)
$
(15,595
)
Proceeds from exercise of stock-based awards and payment of
withholding taxes
2,203
21,500
Proceeds from issuance of convertible senior notes, net
----
617,869
Proceeds from bank loans
----
16,944
Other financing activities
(1,308
)
(234
)
Net cash provided by (used in) financing activities
(15,178
)
640,484
Increase (decrease) in cash and cash equivalents
(285,260
)
626,502
Cash and cash equivalents at the beginning of the period
827,146
223,901
Effect of exchange rate differences on cash and cash equivalents
(11,797
)
(23,257
)
Cash and cash equivalents at the end of the period $
530,089
$
827,146
SOLAREDGE TECHNOLOGIES
INC.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES (Unaudited)
(in thousands, except per share data and percentages)
Reconciliation of GAAP to Non-GAAP Three months ended
Year ended December 31, 2021 September 30,
2021 December 31, 2020 December 31, 2021
December 31, 2020 Gross profit (GAAP)
160,491
172,561
110,325
629,318
461,359
Revenues from finance component
(122
)
(111
)
----
(418
)
----
Stock-based compensation
4,373
4,289
3,720
18,743
11,082
Cost of product adjustment
----
----
----
----
313
Amortization and depreciation of acquired assets
2,272
2,341
2,374
9,326
9,484
Gross profit (Non-GAAP)
167,014
179,080
116,419
656,969
482,238
Gross margin (GAAP)
29.1
%
32.8
%
30.8
%
32.0
%
31.6
%
Revenues from finance component
0.0
%
0.0
%
----
0.0
%
----
Stock-based compensation
0.8
%
0.8
%
1.0
%
1.0
%
0.8
%
Cost of product adjustment
----
----
----
----
0.0
%
Amortization and depreciation of acquired assets
0.4
%
0.4
%
0.7
%
0.5
%
0.6
%
Gross margin (Non-GAAP)
30.3
%
34.0
%
32.5
%
33.5
%
33.0
%
Operating expenses (GAAP)
119,453
106,147
95,898
422,179
318,798
Stock-based compensation - R&D
(14,872
)
(11,949
)
(8,919
)
(45,424
)
(27,048
)
Stock-based compensation - S&M
(5,882
)
(5,737
)
(8,710
)
(22,834
)
(19,413
)
Stock-based compensation - G&A
(4,076
)
(4,210
)
(2,967
)
(15,592
)
(9,766
)
Amortization and depreciation of acquired assets - R&D
(302
)
(207
)
(14
)
(530
)
(91
)
Amortization and depreciation of acquired assets - S&M
(225
)
(229
)
(230
)
(927
)
(1,187
)
Amortization and depreciation of acquired assets - G&A
(6
)
(8
)
(8
)
(29
)
(33
)
Assets sale (disposal)
18
37
(649
)
117
(1,207
)
Other operating income (expenses)
----
----
(1,471
)
(1,350
)
3,429
Operating expenses (Non-GAAP)
94,108
83,844
72,930
335,610
263,482
Operating income (GAAP)
41,038
66,414
14,427
207,139
142,561
Revenues from finance component
(122
)
(111
)
----
(418
)
----
Cost of product adjustment
----
----
----
----
313
Stock-based compensation
29,203
26,185
24,316
102,593
67,309
Amortization and depreciation of acquired assets
2,805
2,785
2,626
10,812
10,795
Assets (sale) disposal
(18
)
(37
)
649
(117
)
1,207
Other operating (income) expenses
----
----
1,471
1,350
(3,429
)
Operating income (Non-GAAP)
72,906
95,236
43,489
321,359
218,756
Reconciliation of GAAP to non-GAAP Three months
ended Year ended
December 31, 2021
September 30, 2021
December 31, 2020
December 31, 2021
December 31, 2020
Financial income (expense), net (GAAP)
(6,324
)
(5,751
)
10,380
(19,915
)
21,105
Notes due 2025
727
726
3,017
2,903
3,185
Non cash interest
1,527
1,469
1,305
5,771
4,887
Unrealized gains/losses
(541
)
----
----
(541
)
----
Currency fluctuation related to lease standard
2,422
574
2,172
2,007
2,274
Amortization and depreciation of acquired assets
----
----
----
----
982
Financial income (expense), net (non-GAAP)
(2,189
)
(2,982
)
16,874
(9,775
)
32,433
Income tax benefit (expense) (GAAP)
6,240
(7,615
)
(7,152
)
(18,054
)
(23,334
)
Uncertain tax positions
(9,007
)
----
----
(9,007
)
----
Deferred taxes
(5,181
)
(2,528
)
2,522
(11,639
)
(3,434
)
Income tax benefit (expense) (Non-GAAP)
(7,948
)
(10,143
)
(4,630
)
(38,700
)
(26,768
)
Net income (GAAP)
40,954
53,048
17,655
169,170
140,322
Revenues from finance component
(122
)
(111
)
----
(418
)
----
Cost of product adjustment
----
----
----
----
313
Stock-based compensation
29,203
26,185
24,316
102,593
67,309
Amortization and depreciation of acquired assets
2,805
2,785
2,626
10,812
11,777
Gain (loss) from assets sales and disposal
(18
)
(37
)
649
(117
)
1,207
Other operating (income) expenses
----
----
1,471
1,350
(3,429
)
Notes due 2025
727
726
3,017
2,903
3,185
Non cash interest
1,527
1,469
1,305
5,771
4,887
Unrealized gains (losses)
(541
)
----
----
(541
)
----
Currency fluctuation related to lease standard
2,422
574
2,172
2,007
2,274
Uncertain tax positions
(9,007
)
----
----
(9,007
)
----
Deferred taxes
(5,181
)
(2,528
)
2,522
(11,639
)
(3,434
)
Net income (Non-GAAP)
62,769
82,111
55,733
272,884
224,411
Reconciliation of GAAP to non-GAAP Three months
ended Year ended December 31, 2021 September
30, 2021 December 31, 2020 December 31, 2021
December 31, 2020 Net basic earnings per share (GAAP)
0.78
1.01
0.34
3.24
2.79
Revenues from finance component
0.00
0.00
----
(0.01
)
----
Cost of product adjustment
----
----
----
----
0.01
Stock-based compensation
0.55
0.50
0.48
1.97
1.34
Amortization and depreciation of acquired assets
0.05
0.05
0.05
0.21
0.24
Gain (loss) from assets sales and disposal
0.00
0.00
0.01
(0.01
)
0.02
Other operating (income) expenses
----
----
0.03
0.03
(0.07
)
Notes due 2025
0.02
0.02
0.06
0.05
0.06
Non cash interest
0.03
0.03
0.02
0.11
0.10
Unrealized gains (losses)
(0.01
)
----
----
(0.01
)
----
Currency fluctuation related to lease standard
0.04
0.01
0.05
0.04
0.05
Uncertain tax positions
(0.17
)
----
----
(0.17
)
----
Deferred taxes
(0.10
)
(0.05
)
0.05
(0.22
)
(0.07
)
Net basic earnings per share (Non-GAAP)
1.19
1.57
1.09
5.23
4.47
Net diluted earnings per share (GAAP)
0.74
0.96
0.33
3.06
2.66
Revenues from finance component
0.00
0.00
----
(0.01
)
----
Cost of product adjustment
----
----
----
----
----
Stock-based compensation
0.50
0.45
0.44
1.77
1.20
Amortization and depreciation of acquired assets
0.05
0.05
0.05
0.19
0.21
Gain (loss) from assets sales and disposal
0.00
0.00
0.01
0.00
0.03
Other operating (income) expenses
----
----
0.03
0.02
(0.07
)
Notes due 2025
0.00
0.00
0.02
0.02
0.02
Non cash interest
0.03
0.03
0.02
0.10
0.08
Unrealized gains (losses)
(0.01
)
----
----
(0.01
)
----
Currency fluctuation related to lease standard
0.04
0.01
0.04
0.03
0.05
Uncertain tax positions
(0.16
)
----
----
(0.16
)
----
Deferred taxes
(0.09
)
(0.05
)
0.04
(0.20
)
(0.07
)
Net diluted earnings per share (Non-GAAP)
1.10
1.45
0.98
4.81
4.11
Number of shares used in computing net diluted earnings
per share (GAAP)
56,011,040
55,929,000
53,496,384
55,971,030
52,795,475
Stock-based compensation
894,079
653,967
865,179
773,636
1,138,517
Notes due 2025
----
----
2,276,818
----
618,701
Number of shares used in computing net diluted earnings per
share (Non-GAAP)
56,905,119
56,582,967
56,638,381
56,744,666
54,552,693
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220215006005/en/
Investor Contacts SolarEdge Technologies, Inc. Ronen
Faier, Chief Financial Officer +1 510-498-3263
investors@solaredge.com
Sapphire Investor Relations, LLC Erica Mannion or Michael Funari
+1 617-542-6180 investors@solaredge.com
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