Name: SolarEdge Technologies Inc. (NASDAQ:SEDG) | Income Statement
Creator: Stock Analysis on Net

Income Statement

The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.

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SolarEdge Technologies Inc., consolidated income statement

US$ in thousands

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Revenues	3,110,279)	1,963,865)	1,459,271)	1,425,660)	937,237)
Cost of revenues	(2,265,631)	(1,334,547)	(997,912)	(946,322)	(618,001)
Gross profit	844,648)	629,318)	461,359)	479,338)	319,236)
Research and development	(289,814)	(219,633)	(163,123)	(121,351)	(82,245)
Sales and marketing	(159,680)	(119,000)	(95,985)	(87,984)	(68,307)
General and administrative	(112,496)	(82,196)	(63,119)	(49,361)	(29,264)
Goodwill impairment and other operating income (expenses), net	(116,538)	(1,350)	3,429)	(30,696)	—)
Operating expenses	(678,528)	(422,179)	(318,798)	(289,392)	(179,816)
Operating income	166,120)	207,139)	142,561)	189,946)	139,420)
Exchange rate gain (loss), net	(1,547)	(22,493)	33,065)	(10,342)	(4,725)
Interest income on marketable securities	10,551)	2,973)	3,750)	4,590)	5,629)
Interest expenses	(11,538)	(10,665)	(10,120)	(5,826)	(3,211)
Hedging	4,716)	9,417)	(4,013)	—)	—)
Interest income, net	1,402)	183)	67)	—)	—)
Other	(268)	670)	(1,644)	235)	10)
Financial income (expense), net	3,316)	(19,915)	21,105)	(11,343)	(2,297)
Other income	7,719)	—)	—)	—)	—)
Income before income taxes	177,155)	187,224)	163,666)	178,603)	137,123)
Income taxes	(83,376)	(18,054)	(23,344)	(33,646)	(9,077)
Net income	93,779)	169,170)	140,322)	144,957)	128,046)
Net loss attributable to non-controlling interests	—)	—)	—)	1,592)	787)
Net income attributable to SolarEdge Technologies, Inc.	93,779)	169,170)	140,322)	146,549)	128,833)

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).

Revenue demonstrates a consistent and strong upward trajectory, growing from 937.2 million US dollars in 2018 to 3.11 billion US dollars by 2022. This expansion reflects significant top-line growth over the five-year period, with the most substantial increase occurring between 2021 and 2022.

Gross Profitability and Margin Trends: While gross profit increased in absolute terms from 319.2 million US dollars in 2018 to 844.6 million US dollars in 2022, the gross margin percentage shows a downward trend. The margin peaked in the early part of the period and contracted significantly in 2022, where the cost of revenues rose to 2.27 billion US dollars, indicating that costs grew faster than revenues in the final year of the analysis.
Operating Expense Scaling: Operating expenses increased steadily from 179.8 million US dollars in 2018 to 678.5 million US dollars in 2022. Research and development spending grew the most aggressively, increasing from 82.2 million US dollars to 289.8 million US dollars. General and administrative expenses also saw a sharp rise, nearly quadrupling over the period, suggesting increased organizational complexity as the company scaled.
Operating Income Volatility: Operating income grew from 139.4 million US dollars in 2018 to a peak of 207.1 million US dollars in 2021, before declining to 166.1 million US dollars in 2022. The 2022 contraction is partially attributed to a significant goodwill impairment and other operating expense of 116.5 million US dollars, which offset the gains from higher revenue.
Net Income and Tax Impact: Net income attributable to the company peaked in 2021 at 169.2 million US dollars but fell sharply to 93.8 million US dollars in 2022. This decline was driven not only by lower operating income but also by a substantial increase in income taxes, which rose to 83.4 million US dollars in 2022 from 18.1 million US dollars in 2021.
Financial Income and Other Gains: Financial income (expense), net, has been volatile, fluctuating between gains and losses. A notable exchange rate loss of 22.5 million US dollars occurred in 2021, while 2022 saw a net financial income of 3.3 million US dollars, supported by an increase in interest income on marketable securities to 10.6 million US dollars.

The overall financial trend indicates a period of rapid scale-up in revenues and operational investment. However, the 2022 fiscal year marks a pivot point where increasing costs of revenues, higher tax burdens, and impairment charges led to a contraction in net profitability despite record-high sales.

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