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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
Quarterly Data

SolarEdge Technologies Inc., common-size consolidated income statement (quarterly data)

Microsoft Excel
3 months ended: Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018 Sep 30, 2018 Jun 30, 2018 Mar 31, 2018
Revenues 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Cost of revenues -70.69 -73.47 -74.90 -72.68 -70.92 -67.22 -67.46 -65.46 -69.19 -68.04 -68.97 -67.53 -65.75 -66.07 -65.95 -68.33 -69.77 -67.04 -63.92 -62.07
Gross profit 29.31% 26.53% 25.10% 27.32% 29.08% 32.78% 32.54% 34.54% 30.81% 31.96% 31.03% 32.47% 34.25% 33.93% 34.05% 31.67% 30.23% 32.96% 36.08% 37.93%
Research and development -8.86 -8.33 -10.28 -10.13 -11.66 -10.57 -10.97 -11.59 -13.27 -12.07 -11.48 -8.51 -8.34 -7.49 -9.08 -9.64 -9.37 -8.50 -8.61 -8.52
Sales and marketing -4.79 -5.11 -5.36 -5.39 -6.02 -5.58 -6.14 -6.64 -8.06 -6.48 -6.31 -5.62 -5.66 -5.36 -6.81 -7.42 -7.29 -7.16 -7.02 -7.72
General and administrative -3.37 -3.34 -3.86 -4.03 -3.96 -4.01 -4.03 -4.90 -5.04 -4.42 -4.21 -3.75 -2.81 -2.97 -4.21 -4.30 -4.49 -2.92 -2.54 -2.26
Other operating income (expenses), net -12.86 0.33 -0.64 0.00 0.00 0.00 0.18 -0.54 -0.41 0.00 0.00 1.14 -5.35 -2.02 0.00 0.00 0.00 0.00 0.00 0.00
Operating expenses -29.89% -16.44% -20.15% -19.55% -21.64% -20.16% -20.96% -23.66% -26.78% -22.97% -22.00% -16.75% -22.17% -17.85% -20.10% -21.36% -21.15% -18.58% -18.18% -18.50%
Operating income -0.58% 10.09% 4.95% 7.76% 7.44% 12.62% 11.57% 10.88% 4.03% 8.99% 9.03% 15.72% 12.08% 16.08% 13.95% 10.32% 9.08% 14.39% 17.90% 19.42%
Financial income (expense), net 6.30 -3.95 -1.97 -0.83 -1.15 -1.09 -0.36 -1.50 2.90 4.66 3.48 -3.85 2.64 -4.15 0.24 -2.26 0.11 -0.29 -1.09 0.28
Other income 0.02 0.90 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Income before income taxes 5.74% 7.04% 2.98% 6.93% 6.29% 11.52% 11.21% 9.38% 6.93% 13.65% 12.51% 11.87% 14.73% 11.93% 14.19% 8.05% 9.19% 14.10% 16.81% 19.70%
Income taxes -3.40 -4.08 -0.91 -1.88 1.13 -1.45 -1.82 -1.96 -2.00 -0.71 -1.47 -2.07 -2.21 -1.77 -4.07 -1.44 -4.59 5.20 -1.59 -2.70
Net income 2.34% 2.96% 2.07% 5.06% 7.42% 10.08% 9.39% 7.42% 4.93% 12.94% 11.05% 9.80% 12.52% 10.16% 10.13% 6.61% 4.61% 19.29% 15.22% 17.00%
Net (income) loss attributable to non-controlling interests 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.10 -0.02 0.07 0.38 0.30 0.00 0.00 0.00
Net income attributable to SolarEdge Technologies, Inc. 2.34% 2.96% 2.07% 5.06% 7.42% 10.08% 9.39% 7.42% 4.93% 12.94% 11.05% 9.80% 12.62% 10.14% 10.19% 6.99% 4.91% 19.29% 15.22% 17.00%

Based on: 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).

The financial performance over the observed period is characterized by a systemic compression of profit margins, primarily driven by a steady increase in the cost of revenues and a subsequent decline in operating efficiency.

Gross Profitability Trends
A persistent increase in the cost of revenues is observed, rising from 62.07% of revenues in March 2018 to a peak of 74.90% in June 2022. This trend resulted in a significant erosion of gross profit margins, which declined from a high of 37.93% in early 2018 to a low of 25.10% in mid-2022, before a slight recovery to 29.31% by December 2022.
Operating Expense Analysis
Operating expenses exhibited volatility with divergent trends across different categories. Research and development spending as a percentage of revenue generally increased, peaking at 13.27% in December 2020, indicating a period of intensified investment in product development. Conversely, sales and marketing expenses showed a long-term downward trend, decreasing from 7.72% in March 2018 to 4.79% in December 2022, suggesting improved scalability in customer acquisition relative to revenue growth. General and administrative costs remained relatively stable but elevated compared to 2018 levels, fluctuating between 2.26% and 5.04%.
Operating and Net Income Margins
The culmination of rising cost of revenues and fluctuating operating expenses led to a severe decline in operating income. Operating margins dropped from 19.42% in March 2018 to a negative 0.58% by December 2022, marking a transition from high profitability to an operating loss. Net income margins followed a similar trajectory; while they reached a peak of 19.29% in September 2018, they plummeted to 2.34% by the end of 2022. This downward trend highlights a significant reduction in the company's ability to convert revenue into bottom-line profit.
Non-Operating Impacts
Financial income and expenses as a percentage of revenue showed inconsistent patterns, though a notable spike in financial income to 6.30% occurred in December 2022. This non-operating gain partially offset the operating loss in the final quarter, preventing a deeper decline in net income for that period.

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