FREMONT - SolarEdge Technologies, Inc. (NASDAQ:SEDG) reported a significant decline in its first-quarter financial performance, with revenues and margins falling sharply from the same period last year.
The company's guidance for the second quarter also fell short of analyst expectations, sending its shares down by 5%.
For the first quarter ended March 31, 2024, SolarEdge posted revenues of $204.4 million, a 78% decrease from the $943.9 million reported in the same quarter last year. This decline was slightly offset by revenues exceeding the consensus estimate of $194.18 million.
The solar segment revenue of $190.1 million also saw a steep drop of 79% YoY. Adjusted net loss per share came in at -$1.90, which was more severe than the analyst estimate of -$1.53.
The company's adjusted gross margin turned negative at -6.5%, including a 4.5% net Investment Tax Credit (ITC) benefit, compared to a positive 32.6% in the first quarter of the previous year. GAAP gross margin was even lower at -12.8%.
SolarEdge attributed the disappointing results to inventory adjustments and typical seasonal patterns, as stated by CEO Zvi Lando. He expressed expectations for channel inventory reductions and revenue improvements heading into spring, alongside a focus on new product releases.
Looking ahead, SolarEdge provided second-quarter revenue guidance in the range of $250 million to $280 million, with the midpoint falling below the analyst consensus of $306 million. Adjusted gross margin for the second quarter is expected to range from -4% to 0%, including an approximate 350 basis points benefit from the net ITC.
Investors reacted negatively to the guidance miss, with the stock price falling 5% following the announcement. The company's performance reflects ongoing challenges in the smart energy technology sector, despite efforts to navigate market conditions and prepare for future growth opportunities.
During the first quarter, SolarEdge repurchased 506,000 shares of common stock at an average price of $65.67 per share, totaling approximately $33 million. As of March 31, 2024, the company's cash and equivalents stood at $316.3 million, net of debt, a decrease from the $634.7 million reported at the end of the previous quarter.
Despite the current financial headwinds, Lando remains optimistic about the company's strategic initiatives. "As we enter spring when installations historically tend to rise, we expect channel inventory to continue to decline and revenues to improve," he said, highlighting the company's commitment to launching new products in the coming quarters.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.