SolarEdge's $36 million refund complicates its recovery story
The cash arrived during the quarter and remained in adjusted earnings. A weaker sales forecast now puts more weight on the underlying business.
Ticker Byline
SolarEdge Technologies, Inc.
SolarEdge supplies inverters, power optimizers, batteries and related systems for solar installations. Demand depends on installations by its customers and on how much equipment distributors and installers already hold.
- Ticker
- SEDG
- Exchange
- XNAS
- SEC CIK
- 0001419612
Channel inventory is weighing on SolarEdge's orders even as quarterly profitability improves. Management attributed $35 million of the reduction in its fourth-quarter sales expectation to equipment already held by customers.
Quarterly revenue and profitability
| Measure | Third quarter | Second quarter |
|---|---|---|
| Revenue | $326.1 | $346.2 |
| Net loss | −$8.4 | −$30.8 |
| Adjusted net income | $21.1 | $3.6 |
The third quarter included $36 million of tariff refunds, retained in both GAAP and non-GAAP results. Management estimated adjusted gross margin excluding refunds at approximately 23.6%.
The sales outlook
Fourth-quarter revenue is forecast at $245 million to $275 million, compared with the $310 million expectation presented in September. The new adjusted gross-margin range is 17% to 21%, excluding potential tariff refunds.
For 2027, management expects revenue to be flat compared with 2026 and adjusted EBITDA to be approximately break-even after restructuring. EBITDA means earnings before interest, taxes, depreciation and amortization.
Cash and borrowing
Third-quarter operating cash inflow was $20.4 million and company-defined free cash flow was $7.8 million. At September 30, cash and cash equivalents were $555.1 million, with a separate $42.7 million of restricted cash. Convertible notes had a $332.7 million carrying amount, distinct from their face value.
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