Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Debt Ratios
Coverage Ratios
SolarEdge Technologies Inc., solvency ratios
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 solvency profile reflects a period of increased borrowing followed by a consistent deleveraging phase. Between 2019 and 2020, a sharp increase in debt utilization occurred across all primary solvency metrics, which subsequently trended downward through the end of 2022.
- Debt Leverage Ratios
- Debt to equity rose from 0.00 in 2019 to a peak of 0.55 in 2020, before declining to 0.31 by 2022. A similar trajectory is observed in the debt to capital and debt to assets ratios; specifically, debt to assets decreased from a peak of 0.25 in 2020 to 0.16 in 2022. The inclusion of operating lease liabilities marginally increases these ratios but does not alter the fundamental downward trend observed post-2020.
- Financial Leverage
- The financial leverage ratio experienced a steady increase from 1.71 in 2018 to a peak of 2.24 in 2020. This was followed by a reduction to 1.96 in 2022, indicating a moderation in the reliance on debt to finance the asset base.
- Coverage Ratios
- A consistent decline is observed in the capacity to service debt obligations. The interest coverage ratio decreased significantly from 43.70 in 2018 to 16.35 in 2022. Similarly, the fixed charge coverage ratio fell from 15.52 in 2018 to 7.46 in 2022. Although these ratios remain well above critical thresholds, the downward trend suggests a reduction in the operating cushion available for meeting fixed financial commitments.
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Debt to Equity
SolarEdge Technologies Inc., debt to equity calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term finance lease liabilities | 3,263) | 1,875) | 1,686) | 231) | —) | |
| Convertible senior notes, net | 624,451) | 621,535) | 573,350) | —) | —) | |
| Long-term finance lease liabilities | 45,385) | 40,508) | 26,173) | 2,399) | —) | |
| Total debt | 673,099) | 663,918) | 601,209) | 2,630) | —) | |
| Total SolarEdge Technologies, Inc. stockholders’ equity | 2,176,366) | 1,310,039) | 1,085,757) | 811,670) | 562,408) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 0.31 | 0.51 | 0.55 | 0.00 | 0.00 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 0.05 | 0.04 | — | — | — | |
| Analog Devices Inc. | 0.18 | 0.18 | 0.43 | — | — | |
| Applied Materials Inc. | 0.45 | 0.45 | 0.52 | — | — | |
| Broadcom Inc. | 1.74 | 1.59 | 1.72 | — | — | |
| Intel Corp. | 0.41 | 0.40 | — | — | — | |
| KLA Corp. | 4.75 | 1.02 | — | — | — | |
| Lam Research Corp. | 0.80 | 0.83 | — | — | — | |
| Marvell Technology Inc. | 0.29 | 0.14 | — | — | — | |
| Micron Technology Inc. | 0.14 | 0.15 | — | — | — | |
| NVIDIA Corp. | 0.41 | 0.41 | — | — | — | |
| Qualcomm Inc. | 0.86 | 1.58 | 2.59 | — | — | |
| Texas Instruments Inc. | 0.60 | 0.58 | — | — | — | |
| Debt to Equity, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 0.43 | 0.49 | — | — | — | |
| Debt to Equity, Industry | ||||||
| Information Technology | 0.70 | 0.83 | — | — | — | |
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).
1 2022 Calculation
Debt to equity = Total debt ÷ Total SolarEdge Technologies, Inc. stockholders’ equity
= 673,099 ÷ 2,176,366 = 0.31
2 Click competitor name to see calculations.
The solvency profile of the organization underwent a significant transformation between 2019 and 2022, characterized by a sharp initial increase in leverage followed by a consistent strengthening of the equity position.
- Total Debt Evolution
- A substantial increase in total debt occurred between 2019 and 2020, where obligations rose from US$ 2,630 thousand to US$ 601,209 thousand. Following this surge, debt levels remained relatively stable, exhibiting marginal annual increases to reach US$ 673,099 thousand by the end of 2022.
- Stockholders' Equity Growth
- Stockholders' equity demonstrated a consistent upward trajectory throughout the period. From a base of US$ 562,408 thousand in 2018, equity grew steadily each year, culminating in US$ 2,176,366 thousand by December 31, 2022. This represents a significant expansion of the company's internal funding and net asset value.
- Debt to Equity Ratio Dynamics
- The debt to equity ratio transitioned from 0.00 in 2019 to a peak of 0.55 in 2020, reflecting the rapid acquisition of debt. However, a downward trend was observed in subsequent years, with the ratio falling to 0.51 in 2021 and further declining to 0.31 in 2022. This reduction is primarily attributed to the growth rate of equity significantly outpacing the growth rate of total debt, indicating a diminished reliance on borrowed capital and an improved solvency position.
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Debt to Equity (including Operating Lease Liability)
SolarEdge Technologies Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term finance lease liabilities | 3,263) | 1,875) | 1,686) | 231) | —) | |
| Convertible senior notes, net | 624,451) | 621,535) | 573,350) | —) | —) | |
| Long-term finance lease liabilities | 45,385) | 40,508) | 26,173) | 2,399) | —) | |
| Total debt | 673,099) | 663,918) | 601,209) | 2,630) | —) | |
| Short-term operating lease liabilities | 16,183) | 12,728) | 10,994) | 9,590) | —) | |
| Long-term operating lease liabilities | 46,256) | 38,912) | 35,194) | 30,213) | —) | |
| Total debt (including operating lease liability) | 735,538) | 715,558) | 647,397) | 42,433) | —) | |
| Total SolarEdge Technologies, Inc. stockholders’ equity | 2,176,366) | 1,310,039) | 1,085,757) | 811,670) | 562,408) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 0.34 | 0.55 | 0.60 | 0.05 | 0.00 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Advanced Micro Devices Inc. | 0.05 | 0.10 | — | — | — | |
| Analog Devices Inc. | 0.19 | 0.19 | 0.46 | — | — | |
| Applied Materials Inc. | 0.48 | 0.47 | 0.54 | — | — | |
| Broadcom Inc. | 1.76 | 1.61 | 1.75 | — | — | |
| Intel Corp. | 0.42 | 0.40 | — | — | — | |
| KLA Corp. | 4.83 | 1.05 | — | — | — | |
| Lam Research Corp. | 0.83 | 0.86 | — | — | — | |
| Marvell Technology Inc. | 0.30 | 0.16 | — | — | — | |
| NVIDIA Corp. | 0.44 | 0.46 | — | — | — | |
| Qualcomm Inc. | 0.90 | 1.64 | 2.67 | — | — | |
| Texas Instruments Inc. | 0.63 | 0.62 | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Semiconductors & Semiconductor Equipment | 0.44 | 0.51 | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Information Technology | 0.76 | 0.90 | — | — | — | |
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).
1 2022 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Total SolarEdge Technologies, Inc. stockholders’ equity
= 735,538 ÷ 2,176,366 = 0.34
2 Click competitor name to see calculations.
The company's solvency profile from 2018 to 2022 is characterized by a significant increase in total debt during 2020, which was subsequently offset by sustained and robust growth in stockholders' equity. This dynamic resulted in a temporary spike in leverage followed by a consistent deleveraging trend through the end of the analyzed period.
- Total Debt Accumulation
- A substantial increase in total debt, including operating lease liabilities, occurred between December 31, 2019, and December 31, 2020, where the balance rose from US$ 42.4 million to US$ 647.4 million. Following this surge, debt levels continued to increase at a more moderate pace, reaching US$ 735.5 million by December 31, 2022.
- Stockholders' Equity Growth
- Stockholders' equity exhibited consistent year-over-year growth, starting at US$ 562.4 million in 2018 and increasing to US$ 2.176 billion by the end of 2022. The expansion of equity was substantial, nearly quadrupling over the five-year window, which provided a strengthened capital base to support the company's liabilities.
- Debt to Equity Ratio Trends
- The debt to equity ratio shifted from a negligible 0.05 in 2019 to a peak of 0.60 in 2020, coinciding with the rapid expansion of total debt. However, a downward trend was observed thereafter, with the ratio declining to 0.55 in 2021 and further to 0.34 in 2022. This decline indicates that equity growth significantly outpaced debt accumulation in the final two years, resulting in a strengthened solvency position and reduced financial leverage.
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Debt to Capital
SolarEdge Technologies Inc., debt to capital calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term finance lease liabilities | 3,263) | 1,875) | 1,686) | 231) | —) | |
| Convertible senior notes, net | 624,451) | 621,535) | 573,350) | —) | —) | |
| Long-term finance lease liabilities | 45,385) | 40,508) | 26,173) | 2,399) | —) | |
| Total debt | 673,099) | 663,918) | 601,209) | 2,630) | —) | |
| Total SolarEdge Technologies, Inc. stockholders’ equity | 2,176,366) | 1,310,039) | 1,085,757) | 811,670) | 562,408) | |
| Total capital | 2,849,465) | 1,973,957) | 1,686,966) | 814,300) | 562,408) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.24 | 0.34 | 0.36 | 0.00 | 0.00 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 0.04 | 0.04 | — | — | — | |
| Analog Devices Inc. | 0.15 | 0.15 | 0.30 | — | — | |
| Applied Materials Inc. | 0.31 | 0.31 | 0.34 | — | — | |
| Broadcom Inc. | 0.64 | 0.61 | 0.63 | — | — | |
| Intel Corp. | 0.29 | 0.29 | — | — | — | |
| KLA Corp. | 0.83 | 0.50 | — | — | — | |
| Lam Research Corp. | 0.44 | 0.45 | — | — | — | |
| Marvell Technology Inc. | 0.22 | 0.12 | — | — | — | |
| Micron Technology Inc. | 0.12 | 0.13 | — | — | — | |
| NVIDIA Corp. | 0.29 | 0.29 | — | — | — | |
| Qualcomm Inc. | 0.46 | 0.61 | 0.72 | — | — | |
| Texas Instruments Inc. | 0.37 | 0.37 | — | — | — | |
| Debt to Capital, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 0.30 | 0.33 | — | — | — | |
| Debt to Capital, Industry | ||||||
| Information Technology | 0.41 | 0.45 | — | — | — | |
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).
1 2022 Calculation
Debt to capital = Total debt ÷ Total capital
= 673,099 ÷ 2,849,465 = 0.24
2 Click competitor name to see calculations.
The solvency profile between 2018 and 2022 is characterized by a significant increase in total capital and a fluctuating debt-to-capital ratio. While absolute debt levels rose sharply in 2020, the subsequent growth in total capital led to a gradual decompression of the leverage ratio by the end of the period.
- Total Debt Evolution
- Total debt remained negligible in 2019 at 2.63 million but underwent a substantial increase to 601.21 million in 2020. Following this spike, debt levels grew at a slower pace, reaching 663.92 million in 2021 and ending at 673.10 million in 2022.
- Total Capital Growth
- A consistent upward trend is observed in total capital, which expanded from 562.41 million in 2018 to 2.85 billion by December 31, 2022. The most significant growth occurred between 2019 and 2020, where capital more than doubled from 814.30 million to 1.69 billion.
- Debt to Capital Ratio Analysis
- The debt to capital ratio moved from 0.00 in 2019 to a peak of 0.36 in 2020, reflecting the rapid accumulation of debt. However, a downward trend followed, with the ratio decreasing to 0.34 in 2021 and further declining to 0.24 in 2022. This indicates that total capital grew at a faster rate than total debt during the final three years of the analysis, resulting in a lower reliance on debt relative to the overall capital structure.
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Debt to Capital (including Operating Lease Liability)
SolarEdge Technologies Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term finance lease liabilities | 3,263) | 1,875) | 1,686) | 231) | —) | |
| Convertible senior notes, net | 624,451) | 621,535) | 573,350) | —) | —) | |
| Long-term finance lease liabilities | 45,385) | 40,508) | 26,173) | 2,399) | —) | |
| Total debt | 673,099) | 663,918) | 601,209) | 2,630) | —) | |
| Short-term operating lease liabilities | 16,183) | 12,728) | 10,994) | 9,590) | —) | |
| Long-term operating lease liabilities | 46,256) | 38,912) | 35,194) | 30,213) | —) | |
| Total debt (including operating lease liability) | 735,538) | 715,558) | 647,397) | 42,433) | —) | |
| Total SolarEdge Technologies, Inc. stockholders’ equity | 2,176,366) | 1,310,039) | 1,085,757) | 811,670) | 562,408) | |
| Total capital (including operating lease liability) | 2,911,904) | 2,025,597) | 1,733,154) | 854,103) | 562,408) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.25 | 0.35 | 0.37 | 0.05 | 0.00 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Advanced Micro Devices Inc. | 0.05 | 0.09 | — | — | — | |
| Analog Devices Inc. | 0.16 | 0.16 | 0.31 | — | — | |
| Applied Materials Inc. | 0.32 | 0.32 | 0.35 | — | — | |
| Broadcom Inc. | 0.64 | 0.62 | 0.64 | — | — | |
| Intel Corp. | 0.30 | 0.29 | — | — | — | |
| KLA Corp. | 0.83 | 0.51 | — | — | — | |
| Lam Research Corp. | 0.45 | 0.46 | — | — | — | |
| Marvell Technology Inc. | 0.23 | 0.14 | — | — | — | |
| NVIDIA Corp. | 0.31 | 0.31 | — | — | — | |
| Qualcomm Inc. | 0.47 | 0.62 | 0.73 | — | — | |
| Texas Instruments Inc. | 0.39 | 0.38 | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Semiconductors & Semiconductor Equipment | 0.31 | 0.34 | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Information Technology | 0.43 | 0.47 | — | — | — | |
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).
1 2022 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 735,538 ÷ 2,911,904 = 0.25
2 Click competitor name to see calculations.
The solvency profile reveals a period of significant capital expansion and fluctuating leverage between 2019 and 2022. A sharp increase in total debt occurred during 2020, which shifted the capital structure from a minimal debt position to one with more substantial leverage.
- Total Debt Trends
- Total debt, including operating lease liabilities, rose sharply from 42.4 million USD in 2019 to 647.4 million USD in 2020. This was followed by a more moderate upward trajectory, reaching 735.5 million USD by the end of 2022.
- Total Capital Expansion
- Total capital demonstrated consistent and aggressive growth throughout the analyzed period, increasing from 562.4 million USD in 2018 to 2.9 billion USD in 2022. This suggests a substantial increase in the company's total resource base over the five-year window.
- Debt to Capital Ratio Analysis
- The debt to capital ratio experienced a peak of 0.37 in 2020, coinciding with the rapid accumulation of debt. However, a subsequent deleveraging trend is observed, with the ratio decreasing to 0.35 in 2021 and further declining to 0.25 by the end of 2022. This indicates that the growth in total capital outpaced the growth in debt during the latter part of the period, resulting in a stronger solvency position relative to the 2020 peak.
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Debt to Assets
SolarEdge Technologies Inc., debt to assets calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term finance lease liabilities | 3,263) | 1,875) | 1,686) | 231) | —) | |
| Convertible senior notes, net | 624,451) | 621,535) | 573,350) | —) | —) | |
| Long-term finance lease liabilities | 45,385) | 40,508) | 26,173) | 2,399) | —) | |
| Total debt | 673,099) | 663,918) | 601,209) | 2,630) | —) | |
| Total assets | 4,265,949) | 2,892,060) | 2,437,109) | 1,494,624) | 964,472) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.16 | 0.23 | 0.25 | 0.00 | 0.00 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 0.04 | 0.03 | — | — | — | |
| Analog Devices Inc. | 0.13 | 0.13 | 0.24 | — | — | |
| Applied Materials Inc. | 0.20 | 0.21 | 0.24 | — | — | |
| Broadcom Inc. | 0.54 | 0.53 | 0.54 | — | — | |
| Intel Corp. | 0.23 | 0.23 | — | — | — | |
| KLA Corp. | 0.53 | 0.34 | — | — | — | |
| Lam Research Corp. | 0.29 | 0.31 | — | — | — | |
| Marvell Technology Inc. | 0.21 | 0.11 | — | — | — | |
| Micron Technology Inc. | 0.10 | 0.12 | — | — | — | |
| NVIDIA Corp. | 0.25 | 0.24 | — | — | — | |
| Qualcomm Inc. | 0.32 | 0.38 | 0.44 | — | — | |
| Texas Instruments Inc. | 0.32 | 0.31 | — | — | — | |
| Debt to Assets, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 0.24 | 0.26 | — | — | — | |
| Debt to Assets, Industry | ||||||
| Information Technology | 0.26 | 0.29 | — | — | — | |
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).
1 2022 Calculation
Debt to assets = Total debt ÷ Total assets
= 673,099 ÷ 4,265,949 = 0.16
2 Click competitor name to see calculations.
An analysis of the solvency position between 2018 and 2022 indicates a period of aggressive asset accumulation and a strategic shift in capital structure. While total liabilities rose sharply during the middle of the period, the overall solvency profile improved by the end of the timeframe due to a higher rate of asset growth relative to debt acquisition.
- Total Asset Expansion
- A consistent and significant upward trend in total assets is observed, increasing from 964,472 thousand US dollars in 2018 to 4,265,949 thousand US dollars by December 31, 2022. This represents a substantial broadening of the company's financial base over the five-year period.
- Debt Accumulation Patterns
- Total debt remained negligible in 2019 at 2,630 thousand US dollars, followed by a sharp increase to 601,209 thousand US dollars in 2020. Following this initial surge, debt growth decelerated, reaching 673,099 thousand US dollars by the end of 2022.
- Debt to Assets Ratio Trend
- The debt to assets ratio experienced a peak of 0.25 in 2020, coinciding with the primary increase in borrowing. However, a subsequent downward trend is evident, with the ratio decreasing to 0.23 in 2021 and further to 0.16 in 2022. This trajectory demonstrates that the growth in total assets has significantly outpaced the growth in total debt, resulting in a strengthened solvency position and a lower reliance on borrowed capital to fund assets.
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Debt to Assets (including Operating Lease Liability)
SolarEdge Technologies Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term finance lease liabilities | 3,263) | 1,875) | 1,686) | 231) | —) | |
| Convertible senior notes, net | 624,451) | 621,535) | 573,350) | —) | —) | |
| Long-term finance lease liabilities | 45,385) | 40,508) | 26,173) | 2,399) | —) | |
| Total debt | 673,099) | 663,918) | 601,209) | 2,630) | —) | |
| Short-term operating lease liabilities | 16,183) | 12,728) | 10,994) | 9,590) | —) | |
| Long-term operating lease liabilities | 46,256) | 38,912) | 35,194) | 30,213) | —) | |
| Total debt (including operating lease liability) | 735,538) | 715,558) | 647,397) | 42,433) | —) | |
| Total assets | 4,265,949) | 2,892,060) | 2,437,109) | 1,494,624) | 964,472) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.17 | 0.25 | 0.27 | 0.03 | 0.00 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Advanced Micro Devices Inc. | 0.04 | 0.06 | — | — | — | |
| Analog Devices Inc. | 0.14 | 0.14 | 0.25 | — | — | |
| Applied Materials Inc. | 0.22 | 0.22 | 0.26 | — | — | |
| Broadcom Inc. | 0.55 | 0.53 | 0.55 | — | — | |
| Intel Corp. | 0.23 | 0.23 | — | — | — | |
| KLA Corp. | 0.54 | 0.35 | — | — | — | |
| Lam Research Corp. | 0.30 | 0.33 | — | — | — | |
| Marvell Technology Inc. | 0.21 | 0.12 | — | — | — | |
| NVIDIA Corp. | 0.27 | 0.27 | — | — | — | |
| Qualcomm Inc. | 0.33 | 0.40 | 0.46 | — | — | |
| Texas Instruments Inc. | 0.34 | 0.33 | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Semiconductors & Semiconductor Equipment | 0.25 | 0.27 | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Information Technology | 0.29 | 0.31 | — | — | — | |
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).
1 2022 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 735,538 ÷ 4,265,949 = 0.17
2 Click competitor name to see calculations.
Between 2019 and 2022, a significant transformation in the balance sheet structure is observed. While total debt increased substantially in absolute terms, the rapid expansion of the total asset base has effectively mitigated solvency risks, resulting in a declining debt-to-assets ratio following a peak in 2020.
- Debt Accumulation Patterns
- A sharp increase in total debt, including operating lease liabilities, occurred between 2019 and 2020, rising from US$ 42.4 million to US$ 647.4 million. This upward trajectory continued at a more moderate pace through 2022, with total debt reaching US$ 735.5 million.
- Asset Base Expansion
- Total assets exhibited consistent and aggressive growth over the analyzed period. Assets rose from US$ 964.5 million in 2018 to US$ 4.27 billion by the end of 2022, indicating a substantial increase in the company's overall resource capacity.
- Debt to Assets Ratio Analysis
- The solvency ratio was minimal at 0.03 in 2019 before spiking to 0.27 in 2020, reflecting the sudden increase in leverage. Subsequently, a downward trend emerged, with the ratio decreasing to 0.25 in 2021 and further to 0.17 in 2022. This trend demonstrates that asset growth has outpaced debt accumulation in recent years, thereby improving the overall solvency profile.
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Financial Leverage
SolarEdge Technologies Inc., financial leverage calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Total assets | 4,265,949) | 2,892,060) | 2,437,109) | 1,494,624) | 964,472) | |
| Total SolarEdge Technologies, Inc. stockholders’ equity | 2,176,366) | 1,310,039) | 1,085,757) | 811,670) | 562,408) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 1.96 | 2.21 | 2.24 | 1.84 | 1.71 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 1.23 | 1.66 | — | — | — | |
| Analog Devices Inc. | 1.38 | 1.38 | 1.79 | — | — | |
| Applied Materials Inc. | 2.19 | 2.11 | 2.11 | — | — | |
| Broadcom Inc. | 3.23 | 3.03 | 3.18 | — | — | |
| Intel Corp. | 1.80 | 1.77 | — | — | — | |
| KLA Corp. | 8.99 | 3.04 | — | — | — | |
| Lam Research Corp. | 2.74 | 2.64 | — | — | — | |
| Marvell Technology Inc. | 1.41 | 1.28 | — | — | — | |
| Micron Technology Inc. | 1.33 | 1.34 | — | — | — | |
| NVIDIA Corp. | 1.66 | 1.70 | — | — | — | |
| Qualcomm Inc. | 2.72 | 4.14 | 5.86 | — | — | |
| Texas Instruments Inc. | 1.87 | 1.85 | — | — | — | |
| Financial Leverage, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 1.77 | 1.87 | — | — | — | |
| Financial Leverage, Industry | ||||||
| Information Technology | 2.65 | 2.87 | — | — | — | |
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).
1 2022 Calculation
Financial leverage = Total assets ÷ Total SolarEdge Technologies, Inc. stockholders’ equity
= 4,265,949 ÷ 2,176,366 = 1.96
2 Click competitor name to see calculations.
The financial position from 2018 to 2022 is characterized by rapid asset expansion and a shifting reliance on external financing. Total assets experienced consistent and substantial growth, increasing from $964,472 thousand in 2018 to $4,265,949 thousand by 2022. This growth was accompanied by a steady increase in stockholders' equity, which grew from $562,408 thousand to $2,176,366 thousand over the five-year period.
- Financial Leverage Trajectory
- The financial leverage ratio demonstrated a non-linear trend, increasing from 1.71 in 2018 to a peak of 2.24 in 2020. This upward movement suggests that during this interval, the expansion of the asset base was driven more aggressively by liabilities than by equity contributions.
- Solvency Stabilization
- A reversal in the leverage trend occurred after 2020, with the ratio decreasing to 2.21 in 2021 and further to 1.96 by the end of 2022. This reduction indicates a shift toward a more equity-heavy capital structure, improving the long-term solvency profile by reducing the relative dependence on borrowed funds to support the asset base.
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Interest Coverage
SolarEdge Technologies Inc., interest coverage calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income attributable to SolarEdge Technologies, Inc. | 93,779) | 169,170) | 140,322) | 146,549) | 128,833) | |
| Add: Net income attributable to noncontrolling interest | —) | —) | —) | (1,592) | (787) | |
| Add: Income tax expense | 83,376) | 18,054) | 23,344) | 33,646) | 9,077) | |
| Add: Interest expenses | 11,538) | 10,665) | 10,120) | 5,826) | 3,211) | |
| Earnings before interest and tax (EBIT) | 188,693) | 197,889) | 173,786) | 184,429) | 140,334) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 16.35 | 18.55 | 17.17 | 31.66 | 43.70 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 14.61 | 109.09 | — | — | — | |
| Analog Devices Inc. | 16.46 | 8.19 | 7.79 | — | — | |
| Applied Materials Inc. | 34.33 | 29.69 | 18.36 | — | — | |
| Broadcom Inc. | 8.16 | 4.59 | 2.37 | — | — | |
| Intel Corp. | 16.66 | 37.35 | — | — | — | |
| KLA Corp. | 22.76 | 16.00 | — | — | — | |
| Lam Research Corp. | 29.11 | 21.95 | — | — | — | |
| Marvell Technology Inc. | -2.47 | -3.65 | — | — | — | |
| Micron Technology Inc. | 51.66 | 35.18 | — | — | — | |
| NVIDIA Corp. | 43.12 | 24.96 | — | — | — | |
| Qualcomm Inc. | 31.61 | 19.38 | 10.50 | — | — | |
| Texas Instruments Inc. | 47.88 | 49.47 | — | — | — | |
| Interest Coverage, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 20.45 | 18.07 | — | — | — | |
| Interest Coverage, Industry | ||||||
| Information Technology | 22.18 | 19.66 | — | — | — | |
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).
1 2022 Calculation
Interest coverage = EBIT ÷ Interest expense
= 188,693 ÷ 11,538 = 16.35
2 Click competitor name to see calculations.
An analysis of solvency metrics from 2018 to 2022 reveals a significant contraction in the margin of safety regarding interest obligations. While operational earnings have grown over the period, this growth was outpaced by a more aggressive increase in interest costs, leading to a steady decline in the overall interest coverage ratio.
- Earnings Before Interest and Tax (EBIT)
- Operational profitability demonstrated an overall upward trend, increasing from 140,334 thousand USD in 2018 to 188,693 thousand USD in 2022. The growth path was non-linear, with a slight dip in 2020 followed by a peak in 2021 at 197,889 thousand USD, before settling at the 2022 level.
- Interest Expenses
- Interest expenses exhibited a consistent and steep increase throughout the five-year period. Costs rose from 3,211 thousand USD in 2018 to 11,538 thousand USD in 2022, representing a nearly fourfold increase. The most rapid growth occurred between 2018 and 2020, indicating a substantial increase in debt load or borrowing costs during that window.
- Interest Coverage Ratio
- The interest coverage ratio declined sharply from 43.70 in 2018 to 16.35 in 2022. This downward trend highlights that interest expenses grew at a significantly faster rate than the company's ability to generate EBIT. Although the ratio has diminished, the 2022 value of 16.35 indicates that earnings remain more than sufficient to cover current interest obligations.
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Fixed Charge Coverage
SolarEdge Technologies Inc., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income attributable to SolarEdge Technologies, Inc. | 93,779) | 169,170) | 140,322) | 146,549) | 128,833) | |
| Add: Net income attributable to noncontrolling interest | —) | —) | —) | (1,592) | (787) | |
| Add: Income tax expense | 83,376) | 18,054) | 23,344) | 33,646) | 9,077) | |
| Add: Interest expenses | 11,538) | 10,665) | 10,120) | 5,826) | 3,211) | |
| Earnings before interest and tax (EBIT) | 188,693) | 197,889) | 173,786) | 184,429) | 140,334) | |
| Add: Operating lease cost | 15,901) | 14,890) | 12,741) | 9,665) | 6,231) | |
| Earnings before fixed charges and tax | 204,594) | 212,779) | 186,527) | 194,094) | 146,565) | |
| Interest expenses | 11,538) | 10,665) | 10,120) | 5,826) | 3,211) | |
| Operating lease cost | 15,901) | 14,890) | 12,741) | 9,665) | 6,231) | |
| Fixed charges | 27,439) | 25,555) | 22,861) | 15,491) | 9,442) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 7.46 | 8.33 | 8.16 | 12.53 | 15.52 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 6.82 | 36.00 | — | — | — | |
| Analog Devices Inc. | 12.87 | 6.64 | 6.48 | — | — | |
| Applied Materials Inc. | 24.67 | 22.50 | 14.48 | — | — | |
| Broadcom Inc. | 6.55 | 3.70 | 1.92 | — | — | |
| Intel Corp. | 7.34 | 16.56 | — | — | — | |
| KLA Corp. | 18.72 | 13.03 | — | — | — | |
| Lam Research Corp. | 21.44 | 17.80 | — | — | — | |
| Marvell Technology Inc. | -1.40 | -1.75 | — | — | — | |
| NVIDIA Corp. | 25.61 | 14.40 | — | — | — | |
| Qualcomm Inc. | 22.52 | 14.48 | 8.30 | — | — | |
| Texas Instruments Inc. | 36.70 | 36.25 | — | — | — | |
| Fixed Charge Coverage, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 14.17 | 12.68 | — | — | — | |
| Fixed Charge Coverage, Industry | ||||||
| Information Technology | 13.28 | 12.13 | — | — | — | |
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).
1 2022 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 204,594 ÷ 27,439 = 7.46
2 Click competitor name to see calculations.
Between 2018 and 2022, a consistent contraction in the fixed charge coverage ratio was observed, indicating a reduction in the margin of safety regarding the company's ability to meet its fixed financial obligations. While earnings before fixed charges and tax remained positive and showed an overall upward trend, the growth in fixed charges significantly outpaced the growth in earnings, resulting in a diminished coverage profile.
- Earnings Before Fixed Charges and Tax
- Earnings grew from US$ 146.57 million in 2018 to a peak of US$ 212.78 million in 2021, before experiencing a slight decline to US$ 204.59 million in 2022. Despite the minor contraction in the final year, the overall earnings capacity increased over the five-year period.
- Fixed Charge Obligations
- Fixed charges demonstrated an uninterrupted upward trajectory, increasing every year from US$ 9.44 million in 2018 to US$ 27.44 million in 2022. This represents a substantial increase in the company's annual fixed financial commitments.
- Fixed Charge Coverage Ratio
- The coverage ratio declined from a high of 15.52 in 2018 to 7.46 in 2022. The most significant deterioration occurred between 2019 and 2020, where the ratio dropped from 12.53 to 8.16. Although a marginal recovery to 8.33 occurred in 2021, the trend resumed its downward path in 2022.
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