Shipping 800 MW (AC) of inverters, Israel-based SolarEdge has managed to achieve record revenues of $209 million in Q1 2018. The result represents an 82% increase year-on-year. The company’s GAAP gross margin reached a solid 37.9% in Q1, resulting in a 4% increase year-on-year.
The robust shipping volumes and record revenues are good news for shareholders, as earnings per share (EPS) climbed to $0.75 from, $0.42 last quarter and $0.32 last year.
“We are pleased to announce strong first quarter results with record revenues and record profitability, despite the traditional seasonal slowdown and continued industry wide components shortages,” said Guy Sella, Founder, Chairman and CEO of SolarEdge. “Our continued technological innovation and operational excellence, coupled with our introduction of new products and financial strength positions us for further growth and industry leadership,” he added.
The company’s guidance for Q2, paints a similarly rosy picture. Expecting to increase revenues further, to the range of $220 million to $230 million, gross margin is expected to remain steady at 36% to 38%.
Furthermore, the company announced its intention to enter the uninterrupted power supply (UPS) market. The Israeli company has signed an asset acquisition deal with UPS provider, Gamatronic.
In a joint statement, the companies stressed that the market for UPS solutions is changing and that through strategic acquisitions like this, both companies can benefit from an exchange of knowledge, allowing for bespoke solutions in the future.
“This acquisition is our first step in expanding our business to new fields outside the solar arena,” continued Sella. “The multi-billion dollar UPS market is expected to undergo significant changes in the coming years and we believe that combining SolarEdge’s innovation, operational excellence and business leadership with Gamatronic’s technology and extensive experience in this field will allow us to become a UPS market leader.”
Gamatronic has been manufacturing and delivering UPS solutions to the U.S., China, Latin America and South Africa, since 1970. This experience is said to provide ample knowledge to develop new products and advance current ones through ongoing innovation.
As UPS solutions are mostly used for commercial and industrial (C&I) applications, like hospitals, factories and telecoms systems, the acquisition may be indicative of SolarEdge’s intention to continue to expand its presence in the C&I market segment.
Specialized power electronics, like micro-inverters and power optimizers have not penetrated the C&I market to any great extent, due to higher prices and a perception of a more complicated installation process.
With increasingly competitive pricing and upcoming software solutions to be coupled with PV arrays, that only work with micro-inverters or power optimizers, a breakthrough in the market segment could eventuate in the near future.