SolarEdge braced for Covid-19-related dip in record revenues

Share

Israeli solar inverter maker and battery storage company SolarEdge anticipates the Covid-19 pandemic will wipe as much as $126 million off its revenues during the current quarter, according to its latest quarterly update.

The inverter giant unveiled another glowing set of figures for the first three months of the year yesterday but, whilst acknowledging the difficulty of assessing the impact of coronavirus disruption, warned record revenue of $431 million from January to March would quickly revert to around $305-335 million in the current reporting period.

The top-line ‘net income’ figure of $42 million for Q1 represented a 122% rise on the $19 million banked during the same period of last year but a 20% reverse from the $53 million banked in the final three months of last year for the Nasdaq-listed company.

Business as usual

The record quarterly business, including a new high of $408 million revenue from its solar business, was recorded thanks to a lack of “significant disruption” to SolarEdge’s workforce or business operations from the spread of Covid-19 in the first three months of the year.

The current quarter may be a different story, although the Israeli business felt confident enough to predict steady gross margins for the April-to-June period, accompanied by the caveat: “The evolving impact of, and responses to the Covid-19 pandemic on economies around the world, including all of the company’s markets, is unprecedented and makes it difficult to predict with confidence its impact on the company’s business for the next quarter and the rest of this year.”

Having imposed limited measures requiring social distancing and limits on the size of public gatherings in the second week of March, the government of Israel did not resort to a full lockdown until late in the month, near the end of the first-quarter financial reporting period.

If SolarEdge, which also shipped a record 1.85 GW volume of inverters during the first quarter, has a shock in store, investors can at least be reassured by a lack of nasty surprises in its balance sheet, amid a healthy assets-to-liabilities structure, borrowings paid down and the only red figures related to expenses to be expected of a successful company: R&D spending, marketing and general admin costs.