SolarEdge Technologies (SEDG) Q4 2023 earnings summary

Executive summary

• FY 2023 revenue was $2.98B, down 4% YoY; weaker H2 demand, inventory buildup and slower shipments followed record installations and growth expectations in H1.

• Q4 revenue was $316.0M, down 56% QoQ and 65% YoY; GAAP gross margin fell to (17.9%), and the quarter ended in operating and net losses.

Financial highlights

• Q4 GAAP and adjusted gross margins were (17.9%) and 3.3%, versus 29.3% and 30.2% in Q4 2022.

• Q4 GAAP operating and net losses were $237.6M and $162.4M; adjusted operating and net losses were $107.8M and $52.5M.

• Q4 diluted EPS was $(2.85) GAAP and $(0.92) adjusted; Q4 2022 comparatives were $0.36 and $2.86.

• FY GAAP and adjusted gross margins were 23.6% and 26.7%; operating income was $40.2M and $290.0M, respectively.

• FY GAAP and adjusted net income was $34.3M and $248.4M; diluted EPS was $0.60 and $4.12, respectively.

Outlook and guidance

• Q1 2024 revenue guidance: $175M–$215M total, including $160M–$200M from the solar segment.

• Q1 adjusted gross margin guidance: (3%) to 1%, including ~850 bps of net IRA manufacturing tax credit; solar-segment margin guidance: 1%–5%, including ~900 bps of credit.

• Q1 adjusted operating expense guidance: $122M–$130M; the outlook is unreconciled to GAAP because future reconciling items cannot be reasonably predicted.