SolarEdge figures tick all the boxes for investors


The numbers all appear to be going in the right direction for Israeli inverter and energy storage company SolarEdge, with an anticipated flattening of gross margin the only slight wrinkle in the latest financials posted by the Nasdaq-listed manufacturer.

In stark contrast with many of its rivals, the update published yesterday dispensed with an accompanying narrative and largely let the fourth-quarter and full-year figures speak for themselves.

SolarEdge posted record revenues of $418 million from October to the end of the year, including record $389 million receipts from solar products. The company was confident enough to predict more of the same in the current quarter as it forecast revenue of $425-440 million with $405-415 million of it expected to come from PV-related products.

Another record

The final-quarter net income figure of $52.8 million quoted by SolarEdge in a press release issued yesterday to publicize the financials also marked a three-month record. With a $433,000 loss attributable to non-controlling interests factored in, SolarEdge banked a net $52 million from October to the end of December.

The company shipped 1.6 GW of the 5.6 GW of inverters sold during 2019 in the final three months of the year and felt confident enough to invest $121 million in R&D activity, up from $82 million in 2018.

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With SolarEdge booking full-year revenue of $1.43 billion, up from $937 million in 2018; gross profits of $479 million, up from $319 million; and net income of $145 million, up from $128 million, the company was also able to splurge on the acquisition of Italian electric vehicle company SMRE. With the deal closed last month, SolarEdge revealed operating expenses which rose 27% from $73.3 million in the third quarter to $92.7 million in the October-to-December window included the $22.4 million bill for SMRE and for settling a claim against Korean battery manufacturer Kokam which pre-dated the Israeli company’s acquisition of the energy storage business.

The bottom line

Gross margin rose from 33.9% in the third quarter of last year to 34.3% from October to year-end although it retreated to 33.6% for the full year, from 34.1% in 2018, and is expected to remain at 32-34% in the current reporting period, according to SolarEdge. The manufacturer revealed gross margin from its solar products came in at 37.3% in the last quarter but is expected to fall to 33-35% in the current window.

The balance sheet shows no obvious warning lights either, although the company’s expansionist approach has seen its current liabilities rise from $226 million in 2018 to $436 million last year, with the long-term figure going out from $168 million to $246 million by the same comparison. At the same time, SolarEdge estimates its total assets rose from $964 million in 2018 to $1.49 billion last year.

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