SolarEdge Reports record Revenues

11 August, 2016

SolarEdge CEO Guy Sella says he is not concerned by the acquisition of rival SolarCity by Tesla: “they will need years develop a products such as ours. I don’t see Tesla stepping over our patents”

SolarEdge CEO Guy Sella says he is not concerned by the acquisition of rival SolarCity by Tesla: “they will need years develop a products such as ours. I don’t see Tesla stepping over our patents”

Tesla's PowerWall Battery
Tesla’s PowerWall Battery

Israeli inverter developer SolarEdge Technologies revenues has reached $489.8 million in the year to June – a 50.7% increase compared to last year. The company increased gross profit from 25% to 31%, reporting a net profit of 7$71.8 million compared to a net profit of $28.3 million last year.

As of June 30 cash, cash equivalents, restricted cash and marketable securities amounted to $186.6 million. The company’s revenues outlook for Q1 2017 (beginning in July 2017) is $30 million-$139 million, compared to $124.8 in the final quarter of 2016. SolarEdge did not have any debt at the end of its fiscal year.

SolarEdge’s founder and CEO Guy Sella reported that US sales slowed in the last quarter of 2016. “We maintain our profitability and continue to generate cash flow from our operations, quarter over quarter. While this quarter is characterized by a general slowdown in the residential U.S market, we were able to compensate with increased sales in other geographic regions in which we sell,” said Sella, in a release. “We remain on target with our plans to grow our business and increase market share without sacrificing gross margins and profitability.”

A genuinely Israeli industry

PowerEdge's power optimization solutions
PowerEdge’s power optimization solutions

The decrease in US sales and the fact that Q2 results did not meet the company’s expectations disspointed most of the investors. The company’s stock fell by up to 9.6% following the publication of the earnings report. Nevertheless, SolarEdge managed to expand considerably over the last few years, becoming a truly big the last quarter of 2016, SolarEdge shipped more than 58,000 inverters and a 1.5 million power optimizers.

SolarEdge is considered a global leader in control and optimization systems of solar cells. The company focuses in the manufacturing of Inverters and controllers designed to optimize the output of solar panels – both in the residential as well as in the industrial markets.

Tesla’s multibillion dollar deal

One year ago, Tesla and SolarEdge announced their cooperation. The two companies joined hands as part of Tesla’s Powerwall project. Tesla’s goal was to supply a rechargeable battery storing solar energy, based of Tesla’s car battery, thus supplying private residents with an alternative power source during blackouts and reducing dependency of the power grid.SolarEdge was to supply a unique inverter which would enable the connection of the battery to the solar panels.

The cooperation between the two companies has led to a wave of rumors of an upcoming takeover of SolarEdge by Tesla. The hopes for such a deal were shattered by Alon Musk announcement of his intention to take over SolarCity, – one of SolarEdge’s main customers. The takeover was finally approved last week, when Tesla announced it will buy SolarCity for as much as $2.6 billion. Many fear that such a takeover would lead to the loss of solarCity as a customer, as well as put an end to the fledging cooperation with tesla.

CEO Guy Sella
CEO Guy Sella

SolarEdge CEO Guy Sella commented on the issue in a conference call following the publication report (transcript by seekingalpha), saying that the acquisition will not have any near term effects on solarEdge. “I guess, other companies can develop such inverters. It will take years to achieve. I believe that once it will be achieved by Tesla, they probably want to use SolarEdge for this specific application. But even today, as you know, SolarCity is less than 10% of our business and they use our product for specific cases where the optimizer is needed, so I think that the risk on our business in the coming few years is minimal. “said Sella.

SolarEdge’s CEO even found a silver lining in the much feared deal saying “I think this area of solar with battery becomes more and more mainstream, it will work in our benefits and as other people can develop inverters, you can imagine that other companies develop batteries, batteries are and not more complex to develop than inverters.

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