Stock Analysis on Net
Stock Analysis on Net

SolarEdge Technologies Inc. (NASDAQ:SEDG)

This company has been moved to the archive! The financial data has not been updated since February 22, 2023.

Common-Size Income Statement 

SolarEdge Technologies Inc., common-size consolidated income statement

Microsoft Excel
12 months ended: Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Revenues 100.00 100.00 100.00 100.00 100.00
Cost of revenues -72.84 -67.96 -68.38 -66.38 -65.94
Gross profit 27.16% 32.04% 31.62% 33.62% 34.06%
Research and development -9.32 -11.18 -11.18 -8.51 -8.78
Sales and marketing -5.13 -6.06 -6.58 -6.17 -7.29
General and administrative -3.62 -4.19 -4.33 -3.46 -3.12
Goodwill impairment and other operating income (expenses), net -3.75 -0.07 0.23 -2.15 0.00
Operating expenses -21.82% -21.50% -21.85% -20.30% -19.19%
Operating income 5.34% 10.55% 9.77% 13.32% 14.88%
Exchange rate gain (loss), net -0.05 -1.15 2.27 -0.73 -0.50
Interest income on marketable securities 0.34 0.15 0.26 0.32 0.60
Interest expenses -0.37 -0.54 -0.69 -0.41 -0.34
Hedging 0.15 0.48 -0.28 0.00 0.00
Interest income, net 0.05 0.01 0.00 0.00 0.00
Other -0.01 0.03 -0.11 0.02 0.00
Financial income (expense), net 0.11% -1.01% 1.45% -0.80% -0.25%
Other income 0.25 0.00 0.00 0.00 0.00
Income before income taxes 5.70% 9.53% 11.22% 12.53% 14.63%
Income taxes -2.68 -0.92 -1.60 -2.36 -0.97
Net income 3.02% 8.61% 9.62% 10.17% 13.66%
Net loss attributable to non-controlling interests 0.00 0.00 0.00 0.11 0.08
Net income attributable to SolarEdge Technologies, Inc. 3.02% 8.61% 9.62% 10.28% 13.75%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

The financial data demonstrates several notable trends across the analyzed periods.

Profitability Margins
The cost of revenues has generally increased as a percentage of revenues, rising from approximately 65.94% in 2018 to 72.84% in 2022. This increase has negatively impacted the gross profit margin, which decreased from 34.06% in 2018 to 27.16% in 2022, reflecting a decline in profitability at the gross level.
Operating Expenses
Research and development expenses initially increased from 8.78% in 2018 to a peak of 11.18% in 2020 and 2021, before declining to 9.32% in 2022. Sales and marketing expenses show a consistent reduction, falling from 7.29% in 2018 to 5.13% in 2022, indicating improved efficiency or cost control in these areas. General and administrative expenses increased from 3.12% in 2018 to a peak of 4.33% in 2020 and then decreased gradually to 3.62% in 2022.
Overall Operating Expenses and Income
Total operating expenses rose from 19.19% of revenues in 2018 to about 21.82% in 2022, indicating higher relative operational costs despite some expense reductions in specific areas. Operating income declined significantly from 14.88% in 2018 to 5.34% in 2022, reflecting the combined negative effects of increased costs of revenues and elevated operating expenses.
Financial Income and Expenses
Financial income and expense items have shown volatility. Exchange rate gains and losses fluctuated, with a notable gain of 2.27% in 2020 but mostly negative or minimal impacts in other years. Interest income on marketable securities showed a downward trend from 0.60% in 2018 to 0.34% in 2022, while interest expenses decreased from 0.34% to 0.37% over the same period. The net financial income (expense) was negative in 2018, 2019, and 2021, but positive in 2020 and 2022, suggesting inconsistent financial performance regarding non-operating items.
Income Before and After Taxes
Income before income taxes steadily declined from 14.63% in 2018 to 5.70% in 2022. Income tax expense relative to revenues fluctuated, increasing especially in 2019 and 2022, which contributed to further diminishing net income margins. Net income as a percentage of revenues declined markedly from 13.66% in 2018 to 3.02% in 2022, evidencing reduced bottom-line profitability.
Other Observations
Goodwill impairment and other operating income (expenses), net showed sporadic negative impacts, most notably in 2019 and 2022. Hedging effects were minor but positive in recent years. The net loss attributable to non-controlling interests was insignificant in the early years and absent thereafter. Other income was reported positively only in 2022, contributing slightly to financial results.