MILPITAS, Calif. — February 15, 2022. 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%
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.
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.