SolarEdge Technologies, Inc.

What they do

SolarEdge develops, manufactures and sells products for residential, commercial and large-scale solar, including inverters, power optimizers, batteries and backup, EV charging, home energy management and grid services. Following the sale of Automation Machines and the 2024 discontinuation of its Energy Storage activity, it operates as one operating segment. Most products are manufactured in the United States (inverters in Texas, optimizers and inverters in Florida, batteries in Utah), with manufacturing discontinued in China, Mexico and Hungary and a minor portion still made in Israel and by a third-party manufacturer in Vietnam.

Revenue drivers

• Power optimizers — Largest unit driver: 10,571.4 thousand optimizers recognized as revenue in 2025 versus 6,645.8 thousand in 2024. Sold into residential and commercial solar systems.
• Inverters — 349.6 thousand inverters recognized as revenue in 2025 versus 245.7 thousand in 2024, now shipped under a Single SKU software-defined platform programmed to the desired kilowatt rating in the field.
• Batteries (energy storage) — 897.4 MWh of batteries recognized as revenue in 2025 versus 556.2 MWh in 2024, supplemented by the commercial CSS-OD 102.4 kWh-rated storage solution scaled up to megawatt-hour sites.
• Customer concentration — One customer accounted for 18.6% of 2025 revenues and the top three customers together represented 35.8%, so revenue depends on a small number of distributors and large installers.

Recent performance

Second quarter 2026 GAAP revenue was $346.2 million, up 11.5% sequentially and up 19.6% year over year, with GAAP gross margin of 27.5% versus 22.0% in Q1 2026 and 11.1% in Q2 2025. The company reported a sixth consecutive quarter of year-over-year gross margin expansion, helped by $13.3 million of IEEPA tariff-related benefit. GAAP operating loss narrowed to $16.0 million from $55.0 million in the prior quarter and $115.5 million a year earlier, and non-GAAP operating income was $10.2 million, the first non-GAAP operating profit since Q2 2023. GAAP net loss was $30.8 million, or $(0.50) diluted, versus $(0.95) in Q1 2026 and $(2.13) in Q2 2025; free cash flow was $3.1 million.

Strategy

Management is focused on scaling the next-generation residential SolarEdge Nexis platform in core markets and on the SolarEdge SST for AI factory applications. The company transitioned inverters to a Single SKU software-defined platform at the end of 2025 to simplify forecasting, manufacturing, inventory, logistics and service. It is concentrating operations in key jurisdictions and discontinuing local activities in certain countries, and U.S. manufacturing is emphasized in light of IRA domestic-content incentives. Management credits strong European demand plus U.S. commercial and industrial strength for offsetting industry-wide softness in U.S. residential.

Risks

• Customer concentration — One customer was 18.6% of 2025 revenue and the top three were 35.8%, so loss or reduced purchasing by a large distributor or installer would materially hit revenue.
• Profitability and history of losses — The company reported net losses of $1,806.4 million in 2024 and $405.4 million in 2025, and its own risk factors cite the ability to be profitable in the future.
• Trade and tariff exposure — Results include IEEPA tariff benefits and management flags changes in the U.S. and global trade environment, including import tariffs, as a factor in demand and results.
• Solar demand cyclicality — The filings cite a rapidly evolving, competitive solar industry, periodic downturns, and whether demand for solar energy solutions resumes growth, plus U.S. residential softness noted in Q2 2026.

Outlook

For third quarter 2026, management guides revenue of $310 million to $340 million, non-GAAP gross margin of 22% to 26%, and non-GAAP operating expenses of $86 million to $91 million. The guidance excludes potential IEEPA refunds, though management says that including the $11.5 million of IEEPA refunds received in July, the midpoint implies non-GAAP operating profit. The outlook is described as not including any significant pull-forward of revenue.