Business Wire | Nov 2, 2021 04:06PM EDT

SolarEdge Announces Third Quarter 2021 Financial Results

Nov. 02, 2021

MILPITAS, Calif.--(BUSINESS WIRE)--Nov. 02, 2021--SolarEdge Technologies, Inc. (Nasdaq: SEDG), a global leader in smart energy technology, today announced its financial results for the third quarter ended September 30, 2021.

Third Quarter 2021 Highlights

* Record revenues of $526.4 million * Record revenues from solar segment of $476.8 million * GAAP gross margin of 32.8% * Non-GAAP gross margin of 34.0% * Gross margin from solar segment of 36.6% * GAAP net income of $53.0 million * Non-GAAP net income of $82.1 million * GAAP net diluted earnings per share ("EPS") of $0.96 * Non-GAAP net diluted EPS of $1.45 * 1.9 Gigawatts (AC) of inverters shipped

"We are pleased with our record revenues in the third quarter amid the unprecedented global logistics and supply chain challenges," said Zvi Lando, Chief Executive Officer of SolarEdge. "Despite a twelve week covid-related shutdown in our Vietnam manufacturing facility during the quarter, we were able to supply products to meet the growing demand of our customers. We are exiting the third quarter with record backlog for the fourth quarter of 2021 and the first quarter of 2022 and will continue navigating the various challenges in order to support our customers' businesses."

Third Quarter 2021 Summary

The Company reported revenues of $526.4 million, up 10% from $480.1 million in the prior quarter and up 56% from $338.1 million in the same quarter last year.

Revenues from the solar segment were $476.8 million, up 11% from $431.4 million in the prior quarter and up 53% from $312.5 million in the same quarter last year.

GAAP gross margin was 32.8%, up from 32.5% in the prior quarter and up from 32.0% in the same quarter last year.

Non-GAAP gross margin was 34.0%, up from 33.9% in the prior quarter and up from 33.5% in the same quarter last year.

Gross margin from the solar segment was 36.6%, down from 37.4% in the prior quarter and up from 34.8% in the same quarter last year.

GAAP operating expenses were $106.1 million, up 5% from $100.6 million in the prior quarter and up 37% from $77.7 million in the same quarter last year.

Non-GAAP operating expenses were $83.8 million, up 3% from $81.5 million in the prior quarter and up 33% from $63.2 million in the same quarter last year.

GAAP operating income was $66.4 million, up 20% from $55.6 million in the prior quarter and up 119% from $30.4 million in the same quarter last year.

Non-GAAP operating income was $95.2 million, up 17% from $81.3 million in the prior quarter and up 90% from $50.0 million in the same quarter last year.

GAAP net income was $53.0 million, up 18% from $45.1 million in the prior quarter and up 21% from $43.8 million in the same quarter last year.

Non-GAAP net income was $82.1 million, up 13% from $72.5 million in the prior quarter and up 25% from $65.9 million in the same quarter last year.

GAAP net diluted EPS was $0.96, up from $0.82 in the prior quarter and up from $0.83 in the same quarter last year.

Non-GAAP net diluted EPS was $1.45, up from $1.28 in the prior quarter and up from $1.21 in the same quarter last year.

Cash flow from operating activities was $61.8 million, up from $38.7 million in the prior quarter and up from $28.4 million in the same quarter last year.

As of September 30, 2021, cash, cash equivalents, bank deposits, restricted bank deposit and marketable securities totaled $524.1 million, net of debt, compared to $509.3 million on June 30, 2021.

Outlook for the Fourth Quarter 2021

The Company also provides guidance for the fourth quarter ending December 31, 2021 as follows:

* Revenues to be within the range of $530 million to $560 million * Non-GAAP gross margin expected to be within the range of 30% to 32% * Revenues from solar segment to be within the range of $490 million to $515 million * Gross margin from solar segment expected to be within the range of 31% to 34%

Conference Call

The Company will host a conference call to discuss these results at 4:30 p.m. ET on Tuesday, November 2, 2021. The call will be available, live, to interested parties by dialing 800-635-7637. For international callers, please dial +1 334-777-6980. The Conference ID number is 5961090. A live webcast will also be available in the Investors Relations section of the Company's website at: http://investors.solaredge.com.

A replay of the webcast will be available in the Investor Relations section of the Company's web site approximately two hours after the conclusion of the call and will remain available for approximately 30 calendar days.

About SolarEdge

SolarEdge is a global leader in smart energy technology. By leveraging world-class engineering capabilities and with a relentless focus on innovation, SolarEdge creates smart energy solutions that power our lives and drive future progress. SolarEdge developed an intelligent inverter solution that changed the way power is harvested and managed in photovoltaic (PV) systems. The SolarEdge DC optimized inverter seeks to maximize power generation while lowering the cost of energy produced by the PV system. Continuing to advance smart energy, SolarEdge addresses a broad range of energy market segments through its PV, storage, EV charging, batteries, UPS, electric vehicle powertrains, and grid services solutions. SolarEdge is online at www.solaredge.com

Use of Non-GAAP Financial Measures

The Company has presented certain non-GAAP financial measures in this release, such as non-GAAP net income, non-GAAP net diluted EPS, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income and non-GAAP gross margin from sale of solar products. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either exclude or include amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States, or GAAP. Reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure can be found in the accompanying tables to this release. These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same captions and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies. As such, these non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.

The Company uses these non-GAAP financial measures to analyze its operating performance and future prospects, develop internal budgets and financial goals, and to facilitate period-to-period comparisons. The Company believes that these non-GAAP financial measures reflect an additional way of viewing aspects of its operations that, when viewed with its GAAP results, provide a more complete understanding of factors and trends affecting its business.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This release contains forward looking statements which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include information, among other things, concerning: our possible or assumed future results of operations; future demands for solar energy solutions; business strategies; technology developments; financing and investment plans; dividend policy; competitive position; industry and regulatory environment; general economic conditions; potential growth opportunities; and the effects of competition. These forward-looking statements are often characterized by the use of words such as "anticipate," "believe," "could," "seek," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "will," "would" or similar expressions and the negative or plural of those terms and other like terminology.

Forward-looking statements are only predictions based on our current expectations and our projections about future events. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. Given these factors, you should not place undue reliance on these forward-looking statements. These factors include, but are not limited to, the matters discussed in the section entitled "Risk Factors" of our Annual Report on Form 10-K/A for the year ended December 31, 2020, filed on February 19, 2021 and our quarterly reports filed on Form 10-Q, Current Reports on Form 8-K and other reports filed with the SEC. All information set forth in this release is as of November 2, 2021. The Company undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events or changes in its expectations.

SOLAREDGE TECHNOLOGIES INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands)



Three months ended Nine months ended September 30, September 30,

2021 2020 2021 2020

Revenues $ 526,404 $ 338,095 $ 1,411,950 $ 1,101,164

Cost of revenues 353,843 230,032 943,123 750,130

Gross profit 172,561 108,063 468,827 351,034

Operating expenses:

Research and 55,666 40,817 155,307 115,610 development

Sales and marketing 29,383 21,924 85,752 67,113

General and 21,098 14,928 60,317 45,077 administrative

Other operatingexpenses (income), - - 1,350 (4,900 )net

Total operating 106,147 77,669 302,726 222,900 expenses

Operating income 66,414 30,394 166,101 128,134

Financial income (5,751 ) 15,765 (13,591 ) 10,725 (expenses), net

Income before income 60,663 46,159 152,510 138,859 taxes

Income taxes 7,615 2,408 24,294 16,192

Net income $ 53,048 $ 43,751 $ 128,216 $ 122,667

SOLAREDGE TECHNOLOGIES INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

September 30,

2021

December 31,

2020

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$

526,588

$

827,146

Short-term bank deposits

10,122

60,096

Restricted bank deposits

1,064

2,611

Marketable securities

145,459

143,687

Trade receivables, net of allowances of $2,826 and $2,886, respectively

416,244

218,706

Inventories, net

304,713

331,696

Prepaid expenses and other current assets

148,364

135,399

Total current assets

1,552,554

1,719,341

LONG-TERM ASSETS:

Marketable securities

473,315

147,434

Deferred tax assets, net

21,827

11,676

Property, plant and equipment, net

353,344

303,408

Operating lease right-of-use assets, net

39,314

41,600

Intangible assets, net

61,639

67,818

Goodwill

131,757

140,479

Other long-term assets

23,083

5,353

Total long-term assets

1,104,279

717,768

Total assets

$

2,656,833

$

2,437,109

SOLAREDGE TECHNOLOGIES INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

September December 30, 31,

2021 2020

ASSETS

CURRENT ASSETS:

Cash and cash equivalents $ 526,588 $ 827,146

Short-term bank deposits 10,122 60,096

Restricted bank deposits 1,064 2,611

Marketable securities 145,459 143,687

Trade receivables, net of allowances of $2,826 and 416,244 218,706$2,886, respectively

Inventories, net 304,713 331,696

Prepaid expenses and other current assets 148,364 135,399

Total current assets 1,552,554 1,719,341

LONG-TERM ASSETS:

Marketable securities 473,315 147,434

Deferred tax assets, net 21,827 11,676

Property, plant and equipment, net 353,344 303,408

Operating lease right-of-use assets, net 39,314 41,600

Intangible assets, net 61,639 67,818

Goodwill 131,757 140,479

Other long-term assets 23,083 5,353

Total long-term assets 1,104,279 717,768

Total assets $ 2,656,833 $ 2,437,109

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

Trade payables, net

$

137,621

$

162,051

Employees and payroll accruals

63,845

63,738

Current maturities of bank loans and accrued interest

141

16,894

Warranty obligations

67,096

62,614

Deferred revenues and customers advances

16,939

24,648

Accrued expenses and other current liabilities

119,865

106,154

Total current liabilities

405,507

436,099

LONG-TERM LIABILITIES:

Convertible senior notes, net

620,808

573,350

Warranty obligations

179,967

142,380

Deferred revenues

136,269

115,372

Deferred tax liabilities, net

405

8,593

Finance lease liabilities

25,375

26,173

Operating lease liabilities

31,509

35,194

Other long-term liabilities

14,910

14,191

Total long-term liabilities

1,009,243

915,253

COMMITMENTS AND CONTINGENT LIABILITIES

STOCKHOLDERS' EQUITY:

Common stock of $0.0001 par value - Authorized: 125,000,000 shares as of September 30, 2021 and December 31, 2020; issued and outstanding: 52,519,490 and 51,560,936 shares as of September 30, 2021 and December 31, 2020, respectively

5

5

Additional paid-in capital

652,109

603,891

Accumulated other comprehensive income (loss)

(19,135

)

3,857

Retained earnings

609,104

478,004

Total stockholders' equity

1,242,083

1,085,757

Total liabilities and stockholders' equity

$

2,656,833

$

2,437,109

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

Trade payables, net $ 137,621 $ 162,051

Employees and payroll accruals 63,845 63,738

Current maturities of bank loans and accrued 141 16,894interest

Warranty obligations 67,096 62,614

Deferred revenues and customers advances 16,939 24,648

Accrued expenses and other current liabilities 119,865 106,154

Total current liabilities 405,507 436,099

LONG-TERM LIABILITIES:

Convertible senior notes, net 620,808 573,350

Warranty obligations 179,967 142,380

Deferred revenues 136,269 115,372

Deferred tax liabilities, net 405 8,593

Finance lease liabilities 25,375 26,173

Operating lease liabilities 31,509 35,194

Other long-term liabilities 14,910 14,191

Total long-term liabilities 1,009,243 915,253

COMMITMENTS AND CONTINGENT LIABILITIES

STOCKHOLDERS' EQUITY:

Common stock of $0.0001 par value - Authorized:125,000,000 shares as of September 30, 2021 andDecember 31, 2020; issued and outstanding: 5 552,519,490 and 51,560,936 shares as of September30, 2021 and December 31, 2020, respectively

Additional paid-in capital 652,109 603,891

Accumulated other comprehensive income (loss) (19,135 ) 3,857

Retained earnings 609,104 478,004

Total stockholders' equity 1,242,083 1,085,757

Total liabilities and stockholders' equity $ 2,656,833 $ 2,437,109

SOLAREDGE TECHNOLOGIES INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

Nine months ended

September 30,

2021

2020

Cash flows provided by operating activities:

Net income

$

128,216

$

122,667

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation of property, plant and equipment

21,492

16,376

Amortization of intangible assets

7,487

7,081

Amortization of debt discount and debt issuance costs

2,175

168

Amortization of premium and accretion of discount on available-for-sale marketable securities, net

6,301

602

Stock-based compensation expenses

73,390

42,993

Deferred income taxes, net

(6,686

)

(5,263

)

Loss from disposal of assets

2,013

-

Exchange rate fluctuations and other items, net

13,086

(235

)

Changes in assets and liabilities:

Inventories, net

30,678

(121,999

)

Prepaid expenses and other assets

(14,977

)

37,871

Trade receivables, net

(206,131

)

118,044

Trade payables, net

(22,959

)

(35,499

)

Employees and payroll accruals

14,321

3,132

Warranty obligations

42,368

23,155

Deferred revenues and customers advances

13,723

(24,283

)

Other liabilities

20,055

10,619

Net cash provided by operating activities

124,552

195,429

Cash flows from investing activities:

Investment in available-for-sale marketable securities

(511,615

)

(36,781

)

Proceeds from sales and maturities of available-for-sale marketable securities

174,817

116,419

Purchase of property, plant and equipment

(94,135

)

(90,553

)

Withdrawal from (investment in) bank deposits, net

50,020

(14,667

)

Investment in privately held company

(16,643

)

-

Payment for asset acquisition, net of cash acquired

(2,996

)

-

Withdrawal from restricted bank deposits

46

25,538

Other investing activities

2,547

743

Net cash provided by (used in) investing activities

$

(397,959

)

$

699

SOLAREDGE TECHNOLOGIES INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

Nine months ended September 30,

2021 2020

Cash flows provided by operating activities:

Net income $ 128,216 $ 122,667

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation of property, plant and equipment 21,492 16,376

Amortization of intangible assets 7,487 7,081

Amortization of debt discount and debt issuance 2,175 168 costs

Amortization of premium and accretion of discount 6,301 602 on available-for-sale marketable securities, net

Stock-based compensation expenses 73,390 42,993

Deferred income taxes, net (6,686 ) (5,263 )

Loss from disposal of assets 2,013 -

Exchange rate fluctuations and other items, net 13,086 (235 )

Changes in assets and liabilities:

Inventories, net 30,678 (121,999 )

Prepaid expenses and other assets (14,977 ) 37,871

Trade receivables, net (206,131 ) 118,044

Trade payables, net (22,959 ) (35,499 )

Employees and payroll accruals 14,321 3,132

Warranty obligations 42,368 23,155

Deferred revenues and customers advances 13,723 (24,283 )

Other liabilities 20,055 10,619

Net cash provided by operating activities 124,552 195,429

Cash flows from investing activities:

Investment in available-for-sale marketable (511,615 ) (36,781 )securities

Proceeds from sales and maturities of 174,817 116,419 available-for-sale marketable securities

Purchase of property, plant and equipment (94,135 ) (90,553 )

Withdrawal from (investment in) bank deposits, 50,020 (14,667 )net

Investment in privately held company (16,643 ) -

Payment for asset acquisition, net of cash (2,996 ) - acquired

Withdrawal from restricted bank deposits 46 25,538

Other investing activities 2,547 743

Net cash provided by (used in) investing $ (397,959 ) $ 699 activities

Cash flows from financing activities:

Repayment of bank loans

$

(16,219

)

$

(15,194

)

Proceeds from exercise of stock-based awards and payment of withholding taxes

(2,274

)

19,205

Proceeds from issuance of convertible senior notes, net

-

618,269

Proceeds from bank loans

-

15,185

Other financing activities

(939

)

(152

)

Net cash provided by (used in) financing activities

(19,432

)

637,313

Increase (decrease) in cash and cash equivalents

(292,839

)

833,441

Cash and cash equivalents at the beginning of the period

827,146

223,901

Effect of exchange rate differences on cash and cash equivalents

(7,719

)

(9,233

)

Cash and cash equivalents at the end of the period

$

526,588

$

1,048,109

Cash flows from financing activities:

Repayment of bank loans $ (16,219 ) $ (15,194 )

Proceeds from exercise of stock-based awards and (2,274 ) 19,205 payment of withholding taxes

Proceeds from issuance of convertible senior - 618,269 notes, net

Proceeds from bank loans - 15,185

Other financing activities (939 ) (152 )

Net cash provided by (used in) financing (19,432 ) 637,313 activities

Increase (decrease) in cash and cash equivalents (292,839 ) 833,441

Cash and cash equivalents at the beginning of 827,146 223,901 the period

Effect of exchange rate differences on cash and (7,719 ) (9,233 )cash equivalents

Cash and cash equivalents at the end of the $ 526,588 $ 1,048,109 period

SOLAREDGE TECHNOLOGIES INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited)

(In thousands, except share and per share data)

Reconciliation of GAAP to Non-GAAP Gross Profit

Three months ended

Nine months ended

September 30, 2021

June 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Gross profit (GAAP)

172,561

156,192

108,063

468,827

351,034

Revenues from finance component

(111)

(99)

---

(296)

---

Stock-based compensation

4,289

4,291

2,730

14,370

7,362

Cost of product adjustment

---

---

---

---

313

Amortization and depreciation of acquired assets

2,341

2,401

2,429

7,054

7,110

Gross profit (Non-GAAP)

179,080

162,785

113,222

489,955

365,819

Reconciliation of GAAP to Non-GAAP Gross Margin

Three months ended

Nine months ended

September 30, 2021

June 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Gross margin (GAAP)

32.8%

32.5%

32.0%

33.2%

31.9%

Revenues from finance component

0.0%

0.0%

---

0.0%

---

Stock-based compensation

0.8%

0.9%

0.8%

1.0%

0.7%

Cost of product adjustment

---

---

---

---

0.0%

Amortization and depreciation of acquired assets

0.4%

0.5%

0.7%

0.5%

0.6%

Gross margin (Non-GAAP)

34.0%

33.9%

33.5%

34.7%

33.2%

Reconciliation of GAAP to Non-GAAP Operating expenses

Three months ended

Nine months ended

September 30, 2021

June 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Operating expenses (GAAP)

106,147

100,633

77,669

302,726

222,900

Stock-based compensation - R&D

(11,949)

(9,805)

(6,904)

(30,552)

(18,129)

Stock-based compensation - S&M

(5,737)

(5,780)

(4,066)

(16,952)

(10,703)

Stock-based compensation - G&A

(4,210)

(4,176)

(2,559)

(11,516)

(6,799)

Amortization and depreciation of acquired assets - R&D

(207)

(9)

(26)

(228)

(77)

Amortization and depreciation of acquired assets - S&M

(229)

(236)

(370)

(702)

(957)

Amortization and depreciation of acquired assets - G&A

(8)

(7)

(8)

(23)

(25)

Assets sale (disposal)

37

---

(558)

99

(558)

Other operating income (expenses)

---

859

---

(1,350)

4,900

Operating expenses (Non-GAAP)

83,844

81,479

63,178

241,502

190,552

SOLAREDGE TECHNOLOGIES INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited)

(In thousands, except share and per share data)

Reconciliation of GAAP to Non-GAAP Gross Profit

Three months ended Nine months ended

September June September September September 30, 2021 30, 30, 2020 30, 2021 30, 2020 2021

Gross profit (GAAP) 172,561 156,192 108,063 468,827 351,034

Revenues from finance (111) (99) --- (296) ---component

Stock-based 4,289 4,291 2,730 14,370 7,362compensation

Cost of product --- --- --- --- 313adjustment

Amortization anddepreciation of 2,341 2,401 2,429 7,054 7,110acquired assets

Gross profit 179,080 162,785 113,222 489,955 365,819(Non-GAAP)



Reconciliation of GAAP to Non-GAAP Gross Margin

Three months ended Nine months ended

September June September September September 30, 2021 30, 30, 2020 30, 2021 30, 2020 2021

Gross margin (GAAP) 32.8% 32.5% 32.0% 33.2% 31.9%

Revenues from finance 0.0% 0.0% --- 0.0% ---component

Stock-based 0.8% 0.9% 0.8% 1.0% 0.7%compensation

Cost of product --- --- --- --- 0.0%adjustment

Amortization anddepreciation of 0.4% 0.5% 0.7% 0.5% 0.6%acquired assets

Gross margin 34.0% 33.9% 33.5% 34.7% 33.2%(Non-GAAP)



Reconciliation of GAAP to Non-GAAP Operating expenses

Three months ended Nine months ended

September June September September September 30, 2021 30, 30, 2020 30, 2021 30, 2020 2021

Operating expenses 106,147 100,633 77,669 302,726 222,900(GAAP)

Stock-based (11,949) (9,805) (6,904) (30,552) (18,129)compensation - R&D

Stock-based (5,737) (5,780) (4,066) (16,952) (10,703)compensation - S&M

Stock-based (4,210) (4,176) (2,559) (11,516) (6,799)compensation - G&A

Amortization anddepreciation of (207) (9) (26) (228) (77)acquired assets - R&D

Amortization anddepreciation of (229) (236) (370) (702) (957)acquired assets - S&M

Amortization anddepreciation of (8) (7) (8) (23) (25)acquired assets - G&A

Assets sale (disposal) 37 --- (558) 99 (558)

Other operating income --- 859 --- (1,350) 4,900(expenses)

Operating expenses 83,844 81,479 63,178 241,502 190,552(Non-GAAP)

SOLAREDGE TECHNOLOGIES INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited)

(In thousands, except share and per share data)

Reconciliation of GAAP to Non-GAAP Operating income

Three months ended

Nine months ended

September 30, 2021

June 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Operating income (GAAP)

66,414

55,559

30,394

166,101

128,134

Revenues from finance component

(111)

(99)

---

(296)

---

Cost of product adjustment

---

---

---

---

313

Stock-based compensation

26,185

24,052

16,259

73,390

42,993

Amortization and depreciation of acquired assets

2,785

2,653

2,833

8,007

8,169

Assets (sale) disposal

(37)

---

558

(99)

558

Other operating (income) expenses

---

(859)

---

1,350

(4,900)

Operating income (Non-GAAP)

95,236

81,306

50,044

248,453

175,267

Reconciliation of GAAP to Non-GAAP Financial expenses (income), net

Three months ended

Nine months ended

September 30, 2021

June 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Financial expenses (income), net (GAAP)

5,751

1,743

(15,765)

13,591

(10,725)

Notes due 2025

(726)

(726)

(168)

(2,176)

(168)

Non-cash interest

(1,469)

(1,439)

(1,254)

(4,244)

(3,582)

Currency fluctuation related to lease standard

(574)

(1,300)

(243)

415

(102)

Amortization and depreciation of acquired assets

---

---

---

---

(982)

Financial expenses (income), net (Non-GAAP)

2,982

(1,722)

(17,430)

7,586

(15,559)

Reconciliation of GAAP to Non-GAAP Tax on income

Three months ended

Nine months ended

September 30, 2021

June 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Tax on income (GAAP)

7,615

8,724

2,408

24,294

16,192

Deferred taxes

2,528

1,789

(816)

6,458

5,956

Tax on income (Non-GAAP)

10,143

10,513

1,592

30,752

22,148

SOLAREDGE TECHNOLOGIES INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited)

(In thousands, except share and per share data)

Reconciliation of GAAP to Non-GAAP Operating income

Three months ended Nine months ended

September June September September September 30, 2021 30, 30, 2020 30, 2021 30, 2020 2021

Operating income (GAAP) 66,414 55,559 30,394 166,101 128,134

Revenues from finance (111) (99) --- (296) ---component

Cost of product --- --- --- --- 313adjustment

Stock-based compensation 26,185 24,052 16,259 73,390 42,993

Amortization anddepreciation of acquired 2,785 2,653 2,833 8,007 8,169assets

Assets (sale) disposal (37) --- 558 (99) 558

Other operating (income) --- (859) --- 1,350 (4,900)expenses

Operating income 95,236 81,306 50,044 248,453 175,267(Non-GAAP)



Reconciliation of GAAP to Non-GAAP Financial expenses (income), net

Three months ended Nine months ended

September June September September September 30, 2021 30, 30, 2020 30, 2021 30, 2020 2021

Financial expenses 5,751 1,743 (15,765) 13,591 (10,725)(income), net (GAAP)

Notes due 2025 (726) (726) (168) (2,176) (168)

Non-cash interest (1,469) (1,439) (1,254) (4,244) (3,582)

Currency fluctuationrelated to lease (574) (1,300) (243) 415 (102)standard

Amortization anddepreciation of acquired --- --- --- --- (982)assets

Financial expenses 2,982 (1,722) (17,430) 7,586 (15,559)(income), net (Non-GAAP)



Reconciliation of GAAP to Non-GAAP Tax on income

Three months ended Nine months ended

September June September September September 30, 2021 30, 30, 2020 30, 2021 30, 2020 2021

Tax on income (GAAP) 7,615 8,724 2,408 24,294 16,192

Deferred taxes 2,528 1,789 (816) 6,458 5,956

Tax on income (Non-GAAP) 10,143 10,513 1,592 30,752 22,148

SOLAREDGE TECHNOLOGIES INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited)

(In thousands, except share and per share data)

Reconciliation of GAAP to Non-GAAP Net income

Three months ended

Nine months ended

September 30, 2021

June 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Net income (GAAP)

53,048

45,092

43,751

128,216

122,667

Revenues from finance component

(111)

(99)

---

(296)

---

Cost of product adjustment

---

---

---

---

313

Stock-based compensation

26,185

24,052

16,259

73,390

42,993

Amortization and depreciation of acquired assets

2,785

2,653

2,833

8,007

9,151

Assets (sale) disposal

(37)

---

558

(99)

558

Other operating (income) expenses

---

(859)

---

1,350

(4,900)

Notes due 2025

726

726

168

2,176

168

Non-cash interest

1,469

1,439

1,254

4,244

3,582

Currency fluctuation related to lease standard

574

1,300

243

(415)

102

Deferred taxes

(2,528)

(1,789)

816

(6,458)

(5,956)

Net income (Non-GAAP)

82,111

72,515

65,882

210,115

168,678

Reconciliation of GAAP to Non-GAAP Net basic EPS

Three months ended

Nine months ended

September 30, 2021

June 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Net basic earnings per share (GAAP)

1.01

0.87

0.87

2.46

2.46

Revenues from finance component

0.00

(0.01)

---

0.00

---

Cost of product adjustment

---

---

---

---

0.01

Stock-based compensation

0.50

0.47

0.32

1.41

0.86

Amortization and depreciation of acquired assets

0.05

0.05

0.05

0.15

0.18

Assets (sale) disposal

0.00

---

0.01

0.00

0.01

Other operating (income) expenses

---

(0.02)

---

0.03

(0.10)

Notes due 2025

0.02

0.01

0.00

0.04

0.00

Non-cash interest

0.03

0.03

0.03

0.08

0.08

Currency fluctuation related to lease standard

0.01

0.03

0.00

(0.01)

0.00

Deferred taxes

(0.05)

(0.04)

0.02

(0.12)

(0.12)

Net basic earnings per share (Non-GAAP)

1.57

1.39

1.30

4.04

3.38

SOLAREDGE TECHNOLOGIES INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited)

(In thousands, except share and per share data)

Reconciliation of GAAP to Non-GAAP Net income

Three months ended Nine months ended

September June September September September 30, 2021 30, 30, 2020 30, 2021 30, 2020 2021

Net income (GAAP) 53,048 45,092 43,751 128,216 122,667

Revenues from finance (111) (99) --- (296) ---component

Cost of product --- --- --- --- 313adjustment

Stock-based compensation 26,185 24,052 16,259 73,390 42,993

Amortization anddepreciation of acquired 2,785 2,653 2,833 8,007 9,151assets

Assets (sale) disposal (37) --- 558 (99) 558

Other operating (income) --- (859) --- 1,350 (4,900)expenses

Notes due 2025 726 726 168 2,176 168

Non-cash interest 1,469 1,439 1,254 4,244 3,582

Currency fluctuationrelated to lease 574 1,300 243 (415) 102standard

Deferred taxes (2,528) (1,789) 816 (6,458) (5,956)

Net income (Non-GAAP) 82,111 72,515 65,882 210,115 168,678



Reconciliation of GAAP to Non-GAAP Net basic EPS

Three months ended Nine months ended

September June September September September 30, 2021 30, 30, 2020 30, 2021 30, 2020 2021

Net basic earnings per 1.01 0.87 0.87 2.46 2.46share (GAAP)

Revenues from finance 0.00 (0.01) --- 0.00 ---component

Cost of product --- --- --- --- 0.01adjustment

Stock-based compensation 0.50 0.47 0.32 1.41 0.86

Amortization anddepreciation of acquired 0.05 0.05 0.05 0.15 0.18assets

Assets (sale) disposal 0.00 --- 0.01 0.00 0.01

Other operating (income) --- (0.02) --- 0.03 (0.10)expenses

Notes due 2025 0.02 0.01 0.00 0.04 0.00

Non-cash interest 0.03 0.03 0.03 0.08 0.08

Currency fluctuationrelated to lease 0.01 0.03 0.00 (0.01) 0.00standard

Deferred taxes (0.05) (0.04) 0.02 (0.12) (0.12)

Net basic earnings per 1.57 1.39 1.30 4.04 3.38share (Non-GAAP)

SOLAREDGE TECHNOLOGIES INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited)

(In thousands, except share and per share data)

Reconciliation of GAAP to Non-GAAP Net diluted EPS

Three months ended

Nine months ended

September 30, 2021

June 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Net diluted earnings per share (GAAP)

0.96

0.82

0.83

2.32

2.33

Revenues from finance component

0.00

(0.01)

---

(0.01)

---

Cost of product adjustment

---

---

---

---

0.01

Stock-based compensation

0.45

0.42

0.28

1.27

0.74

Amortization and depreciation of acquired assets

0.05

0.04

0.05

0.14

0.17

Assets (sale) disposal

0.00

---

0.01

0.00

0.01

Other operating (income) expenses

---

(0.01)

---

0.02

(0.09)

Notes due 2025

0.00

0.00

0.00

0.01

0.00

Non-cash interest

0.03

0.03

0.02

0.08

0.07

Currency fluctuation related to lease standard

0.01

0.02

0.00

(0.01)

0.00

Deferred taxes

(0.05)

(0.03)

0.02

(0.11)

(0.11)

Net diluted earnings per share (Non-GAAP)

1.45

1.28

1.21

3.71

3.13

Reconciliation of GAAP to Non-GAAP No. of shares used in Net diluted EPS

Three months ended

Nine months ended

September 30, 2021

June 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Number of shares used in computing net diluted earnings per share (GAAP)

55,929,000

55,930,562

53,144,188

55,955,441

52,623,675

Stock-based compensation

653,967

780,309

1,134,877

733,488

1,229,630

Number of shares used in computing net diluted earnings per share (Non-GAAP)

56,582,967

56,710,871

54,279,065

56,688,929

53,853,305

View source version on businesswire.com: https://www.businesswire.com/news/home/20211102006166/en/

CONTACT: Investor Contacts SolarEdge Technologies, Inc. Ronen Faier, Chief Financial Officer +1 510-498-3263 investors@solaredge.com

CONTACT: Sapphire Investor Relations, LLC Erica Mannion or Michael Funari +1 617-542-6180 investors@solaredge.com