SolarEdge’s second quarter results were met with a significant negative market reaction, as investors remained cautious despite revenue surpassing Wall Street expectations. Management attributed the quarter’s performance to increased U.S. production, strong growth in commercial and industrial (C&I) markets, and early signs of European market share recovery. CEO Shuki Nir acknowledged ongoing operational challenges but emphasized progress on “all four pillars of our turnaround journey,” including tighter expense management and normalization of channel inventories. Management also noted that tariff-related pressures, while still a headwind, had a smaller impact on gross margins than originally forecast.
Is now the time to buy SEDG? Find out in our full research report (it’s free).
SolarEdge (SEDG) Q2 CY2025 Highlights:
- Revenue: $289.4 million vs analyst estimates of $274.9 million (9.1% year-on-year growth, 5.3% beat)
- Adjusted EPS: -$0.81 vs analyst estimates of -$0.84 (3.5% beat)
- Adjusted EBITDA: -$79.3 million vs analyst estimates of -$52.71 million (-27.4% margin, 50.4% miss)
- Revenue Guidance for Q3 CY2025 is $335 million at the midpoint, above analyst estimates of $304 million
- Operating Margin: -39.9%, up from -60.4% in the same quarter last year
- Megawatts Shipped: 1,194, up 321 year on year
- Market Capitalization: $1.57 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From SolarEdge’s Q2 Earnings Call
- Mark Wesley Strouse (JPMorgan): Asked if Q3 guidance benefited from any one-time demand pull-forwards. CEO Shuki Nir clarified that no significant pull-forward from 25D or safe harbor incentives was included in the outlook.
- Philip Shen (ROTH Capital Partners): Inquired about C&I segment dynamics and potential for further safe harbor deals. Nir declined to provide specifics but emphasized SolarEdge’s strong product-market fit and readiness to support C&I customers.
- Brian K. Lee (Goldman Sachs): Pressed for details on regional revenue trends and margin leverage. CFO Asaf Alperovitz highlighted ongoing U.S. market strength, efforts to recapture European market share, and the positive impact of increased production scale on margins.
- Colin William Rusch (Oppenheimer): Asked about R&D priorities and opportunities for operational cost reduction. Nir described ongoing innovation in energy management algorithms and virtual power plant capabilities, while Alperovitz reiterated continued focus on cost efficiency, especially with the upcoming Nexis product line.
- Dimple Gosai (Bank of America): Requested details on battery business performance and storage attach rates. Nir reported rising storage adoption in residential markets and TPO channels, while Alperovitz noted ongoing efforts to improve battery margins and cost structure.
Catalysts in Upcoming Quarters
In upcoming quarters, our analysts will focus on (1) SolarEdge’s ability to ramp U.S. manufacturing and export U.S.-made products globally, (2) the commercial launch and market adoption of the Nexis platform, and (3) continued progress in recovering European market share following distributor inventory normalization. The impact of shifting U.S. incentive policies and the pace of adoption for new energy management software will also be critical signposts.
SolarEdge currently trades at $26.45, up from $25.82 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
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