Despite weakness in the US, global presence boost SolarEdge results
7 May, 2023
Quarterly revenues of $943.9 million thanks to record demands in Western Europe, South Africa, and Australia
Solar stocks have recently experienced a sharp downturn, in the wake of micro-inverters manufacturer Enphase’ earning report two weeks ago. Enphase, which is the primary competitor of SolarEdge, has reported positive results, but lowered its next quarter guidance, pointing that high-interest rates are straining on demand in the US market. Analysts expected a similar outcome from SolarEdge.
Nevertheless, SolarEdge’s report presented a totally different image: record revenues, improved profitability, and a positive forecast for the second quarter. SolarEdge recorded revenues of $943.9 million for Q1, a 44% increase from Q1 2022. In addition, the gross margin, which was a little low in the past quarters, significantly improved to 31.7%, compared to 27.3% in Q1 2022 and 29.3% in Q4 2022. On the bottom line, the company recorded a net income of $136.4 million, more than three times that of Q1 2022.
Like Enphase, SolarEdge also reported on the general decline in the US market. The company’s revenues in the US for Q1 was $255.5 million, 28.3% of the total revenue. This represents a 16% decline from the previous quarter and a 4% decline from Q1 2022.
Power outages in South Africa, incentives in Japan
How did the company accomplish such remarkable results? A record-high $577.9 million in revenue was earned in Europe, a 22% increase from the previous quarter and twice as much as was made in Q1 2022. Today, two-quarters of the company’s total revenue comes from European sales. SolarEdge recorded top revenues in Germany, Austria, Switzerland and France, and strong results in the Netherlands and Italy.
Revenues outside Europe and the US also significantly increased by 30%, with record revenues in Australia and South Africa. SolarEdge CEO, Zvi Landa, said in a conference call: “Our global presence and the opportunities in these areas are sometimes overlooked”. According to Landa, the frequency of power outages in South Africa, where the firm reported record revenue, has increased demand for solar solutions, even in the domestic market.
In Japan, new regulation in the Tokyo metropolis generates incentives for purchasing solar panels with SolarEdge inverters. “As stated previously and as demonstrated by the most recent quarter results, our presence and global infrastructure give us business stability as well as new growth opportunities,” said Landa.
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