Balance Sheet: Liabilities and Stockholders’ Equity

The balance sheet provides creditors, investors, and analysts with information on company resources (assets) and its sources of capital (its equity and liabilities). It normally also provides information about the future earnings capacity of a company assets as well as an indication of cash flows that may come from receivables and inventories.

Liabilities represents obligations of a company arising from past events, the settlement of which is expected to result in an outflow of economic benefits from the entity.

SolarEdge Technologies Inc., consolidated balance sheet: liabilities and stockholders’ equity

US$ in thousands

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Trade payables, net	459,831)	252,068)	162,051)	157,148)	107,079)
Employees and payroll accruals	85,158)	74,465)	63,738)	47,390)	29,053)
Warranty obligations	103,975)	71,480)	62,614)	65,112)	28,868)
Deferred revenues and customers advances	26,641)	17,789)	24,648)	70,815)	14,351)
Accrued expenses	117,638)	51,014)	47,757)	36,158)	14,859)
Government authorities	67,514)	22,631)	26,218)	27,191)	11,344)
Short-term finance lease liabilities	3,263)	1,875)	1,686)	231)	—)
Short-term operating lease liabilities	16,183)	12,728)	10,994)	9,590)	—)
Accrual for sales incentives	6,790)	—)	—)	—)	—)
Provision for legal claims	43)	11,622)	5,866)	—)	—)
Other	2,681)	9,509)	30,527)	23,079)	20,164)
Accrued expenses and other current liabilities	214,112)	109,379)	123,048)	96,249)	46,367)
Current liabilities	889,717)	525,181)	436,099)	436,714)	225,718)
Convertible senior notes, net	624,451)	621,535)	573,350)	—)	—)
Warranty obligations	281,082)	193,680)	142,380)	107,451)	92,958)
Deferred revenues	186,936)	151,556)	115,372)	89,982)	60,670)
Long-term finance lease liabilities	45,385)	40,508)	26,173)	2,399)	—)
Long-term operating lease liabilities	46,256)	38,912)	35,194)	30,213)	—)
Tax liabilities	3,830)	5,105)	5,062)	5,389)	7,147)
Accrued severance pay	9,848)	1,739)	1,561)	4,647)	411)
Other	2,078)	3,805)	16,161)	6,159)	6,842)
Other long-term liabilities	15,756)	10,649)	22,784)	16,195)	14,400)
Long-term liabilities	1,199,866)	1,056,840)	915,253)	246,240)	168,028)
Total liabilities	2,089,583)	1,582,021)	1,351,352)	682,954)	393,746)
Common stock of $0.0001 par value	6)	5)	5)	5)	5)
Additional paid-in capital	1,505,632)	687,295)	603,891)	475,792)	371,794)
Accumulated other comprehensive income (loss)	(73,109)	(27,319)	3,857)	(1,809)	(524)
Retained earnings	743,837)	650,058)	478,004)	337,682)	191,133)
Total SolarEdge Technologies, Inc. stockholders’ equity	2,176,366)	1,310,039)	1,085,757)	811,670)	562,408)
Non-controlling interests	—)	—)	—)	—)	8,318)
Total stockholders’ equity	2,176,366)	1,310,039)	1,085,757)	811,670)	570,726)
Total liabilities and stockholders’ equity	4,265,949)	2,892,060)	2,437,109)	1,494,624)	964,472)

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).

Overall, the company experienced substantial growth in both liabilities and stockholders’ equity between 2018 and 2022. Liabilities demonstrated a particularly significant increase, growing at a faster rate than equity. This growth appears to be driven by increases across most liability categories, especially current liabilities and long-term debt.

Current Liabilities: Current liabilities increased significantly from US$225.718 million in 2018 to US$889.717 million in 2022. The most substantial contributor to this increase was trade payables, net, which rose from US$107.079 million to US$459.831 million over the same period. Accrued expenses and other current liabilities also experienced a considerable rise, more than tripling from US$46.367 million to US$214.112 million. Government authorities also increased notably, from US$11.344 million to US$67.514 million. While deferred revenues and customers advances fluctuated, they remained relatively stable overall.
Long-Term Liabilities: Long-term liabilities exhibited a dramatic increase, growing from US$168.028 million in 2018 to US$1,199.866 million in 2022. The primary driver of this growth was convertible senior notes, net, which increased from zero to US$624.451 million. Warranty obligations also increased substantially, from US$92.958 million to US$281.082 million. Long-term lease liabilities, both finance and operating, also contributed to the overall increase, though to a lesser extent.
Stockholders’ Equity: Total stockholders’ equity increased from US$570.726 million in 2018 to US$2,176.366 million in 2022. This growth was primarily fueled by increases in additional paid-in capital, which rose from US$371.794 million to US$1,505.632 million. Retained earnings also increased significantly, from US$191.133 million to US$743.837 million. Accumulated other comprehensive income (loss) experienced a net decrease, moving from a loss of US$524 thousand to a loss of US$73.109 million. Common stock remained relatively constant.
Total Liabilities and Equity: The combined total of liabilities and stockholders’ equity grew from US$964.472 million in 2018 to US$4,265.949 million in 2022, reflecting the overall expansion of the company’s financial position. The proportion of liabilities within this total increased over the period, indicating a greater reliance on debt financing.

The increases in warranty obligations across both current and long-term liabilities suggest a potential increase in product complexity or a change in warranty policies. The significant rise in accrued expenses warrants further investigation to understand the underlying causes. The substantial growth in both liabilities and equity indicates a period of rapid expansion for the company, but the increasing proportion of liabilities should be monitored.

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SolarEdge Technologies Inc. (NASDAQ:SEDG)

Balance Sheet: Liabilities and Stockholders’ Equity