Solar Industry Headwinds Hit SolarEdge Hard: Q2 Results Disappoint

SolarEdge Technologies, Inc. SEDG shares are trading lower after it reported second-quarter FY24 results.

Revenues of $265.4 million, beating the consensus of $262.3 million. Revenues from the solar segment stood at $241.2 million, down 75% Y/Y, in the quarter.

Adjusted gross margin was 0.2% versus 32.7% in the prior year quarter. Adjusted operating loss stood at $114.3 million versus an adjusted operating income of $191.0 million in the same quarter last year.

Adjusted EPS loss of $1.79 missed the consensus loss of $1.58.

Operating cash flow was negative $44.8 million in the quarter. As of June 30, 2024, cash, cash equivalents, bank deposits, restricted bank deposits, and marketable securities totaled $165.3 million, net of debt.

In the second quarter of 2024, the company bought back 247,468 shares worth around $17 million.

Outlook: For the third quarter, the company sees revenue of $260 million-$290 million (vs. consensus of $359.93 million), revenues from the solar segment of $245 million-$280 million, and adjusted gross margin of negative 3% to positive 1%.

Zvi Lando, Chief Executive Officer of SolarEdge said, “While we expect undershipping to continue in the third quarter, we believe the momentum in our underlying business and the actions we are taking to gain market share and address new growth segments will enable a return to higher revenue levels once inventories are cleared in the first half of 2025.”

Last month, SolarEdge Technologies laid off 400 employees, with 200 cuts in Israel, due to a market downturn and excess inventory.

Investors can gain exposure to the stock via Invesco Solar ETF TAN and Global X Solar ETF RAYS.

Also Read: SolarEdge Stock Falls As Analysts React To $300 Million Private Offering

Price Action: SEDG shares are down 19.4% at $19.03 premarket at the last check Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Image: Andreas from Pixabay

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