Revenue in the final three months of the year reached a record of $263.7 million, up 11% from the previous quarter and 39% from the $189.3 million generated in the same period of 2017. That contributed to a full-year close of $937.2 million, up 54% on the previous year.
Although gross margin came down in the final quarter – to 30.2% from 33.6% in the previous quarter and 37.5% year over year – for the full year, it remained flat at 34.1%.
Adjusted operating expenses closed at $55.3 million for a 26% increase over the previous quarter’s $43.9 million and 52% more than in the fourth quarter of 2017. Full year operating expenses closed at $179 million for 2018, up from $123.6 million in the previous year.
Operating income fell 28% from $34 million in the previous quarter to $24.4 million, to post a similar result to the $34.6 million seen in the last three months of 2017. However, for the full year operating income rose 53%, from $84.2 million in 2017 to $128.8 million, as gross profits came in at $319 million, compared to 2017’s $214.7 million.
Cashflow from operating activities hit $189.1 million for 2018, up from $126.7 million in 2017 and a strong year for SolarEdge put a smile on investors’ faces as net diluted earnings per share closed at $2.69, up from $1.85 a year earlier.
“We are happy to report another record revenue quarter and a very strong year in which we continued to take market share,” said Guy Sella, founder, chairman and CEO of SolarEdge. “In addition to the growth and strong profitability of our solar business, this quarter we continued to lay the foundations for our non-solar future growth with the acquisition of Kokam – a leading provider of lithium-ion batteries – and the post-quarter acquisition of a majority holding of S.M.R.E, a provider of innovative integrated powertrain technology and electronics for the e-mobility market. I am confident that these acquisitions, which will initially dilute our margins and EPS, will over time and with our investment, innovation and operational excellence, become a meaningful part of the SolarEdge success.”
In its guidance to the end of March, SolarEdge said it is likely to again reach revenues of around $260 million, with gross margins of 30-32%. With acquisitions in storage, UPS and e-mobility businesses, the company is likely to further diversify its product portfolio.
Solar is expected to return to growth in 2019, according to analysts, as price falls drive a new wave of private power purchase agreements and big European tender programs kick in. There are raised expectations for the U.S. and the MENA region as well as China. Industry watchers are predicting the PV market could hit the 120 GW mark this year.