The first quarter was another weak quarter for the technology company solaredge , which provides solutions for the solar energy sector, and the forecast for the second quarter indicates that the recovery is not yet here. A sign of this came already two weeks ago, when the competitor Anphase published reports that pointed to the delay in the recovery of the market, and in response the Solaredge share also fell. Yesterday, after Solaredge released its reports, the stock was down 8.5% in late trading.
The company has been suffering from a decline in demand for several quarters, mainly due to high inventory levels accumulated by the distributors of its products. In the first quarter, revenues were higher than analysts’ forecasts and amounted to $204 million, a figure that reflects a 78% drop from the corresponding quarter, with revenues from the solar sector falling by 33% to $190 million. 45% of the revenues in the quarter were from Europe, 34% from the USA and the rest from the rest of the world.
Solaredge posted a gross loss of $26.2 million (or $13.3 million on a Non-GAAP basis), and the bottom line was a net loss according to GAAP rules of $157 million, compared to a profit of $138 million in the corresponding quarter. On a non-GAAP basis, the net loss amounted to $109 million, which is $1.9 per share, while analysts were expecting a loss of $1.57 per share.
The flow from current operations was negative at $217 million, and the amount of cash in the treasury decreased during the quarter by $124 million to $214 million. In total, Solaredge had $316 million in cash and investments. The company used $33 million to purchase its own shares at an average price of $65.7, higher than today’s price.
Solaredge presents a disappointing forecast for the future
Solaredge expects revenues of 250-280 million dollars in the second quarter – an improvement compared to the first quarter but a decrease compared to the corresponding quarter. Analysts expected more, $306 million. The gross profitability is not expected to return, and the expectation is for a negative gross profitability of 4% until balance (0%).
Zvi Lando, the company’s CEO, said that seasonally, in the second quarter, the installations of solar systems increase, so the company expects a continued decrease in inventories and an improvement in revenues. At the same time, he noted that the company is focusing on new products that it expects to launch in the coming quarters in preparation for the next cycle of growth in the industry.
Let’s recall that against the background of the situation, the company announced at the beginning of the year the layoffs of 900 employees, of which 550 are in Israel.
Solaredge is traded on Nasdaq, and after weakening in late trading after the publication of the reports, it is trading at a value of approximately $3 billion. At its peak, the company traded at a value approaching $20 billion, and for a period of time it was even the largest Israeli company on Wall Street.
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