Solaredge 2025 Q1 Earnings Beats Expectations with Net Income Improving 37.3%

Solaredge (SEDG) reported its fiscal 2025 Q1 earnings on May 06th, 2025. The company surpassed market expectations, reporting revenues of $219.5 million, which represents a 12% sequential increase. Guidance for the second quarter also exceeded analyst expectations, with projected revenues in the range of $265 million to $285 million. The company's strong performance is attributed to the increased shipment of inverters and batteries, contributing to the positive outlook despite ongoing regulatory challenges.

Revenue

Earnings/Net Income
Solaredge narrowed losses to $1.70 per share in 2025 Q1 from a loss of $2.77 per share in 2024 Q1 (38.6% improvement). Meanwhile, the company successfully narrowed its net loss to $-98.67 million in 2025 Q1, reducing losses by 37.3% compared to the $-157.31 million net loss reported in 2024 Q1. The improvement in EPS indicates a positive trend towards financial recovery.

Price Action

Post-Earnings Price Action Review
The strategy of buying SEDG shares after a revenue drop quarter-over-quarter and holding for 30 days resulted in a 15.41% return over the past five years, compared to a benchmark return of 83.12%. The strategy's compound annual growth rate (CAGR) was 2.94%, with a maximum drawdown of -13.07% and a Sharpe ratio of 0.23, indicating moderate risk and returns. Despite the recent earnings beat, the stock has been volatile, reflecting investor uncertainty. The moderate returns and significant drawdowns suggest that while the strategy has had some success, it has underperformed the broader market, highlighting the challenges faced by investors in capturing consistent gains from Solaredge's stock fluctuations.

CEO Commentary
"I am pleased with the steady progress we made on the SolarEdge turnaround this quarter," said Shuki Nir, CEO of SolarEdge. The company achieved a second consecutive quarter of positive free cash flow, emphasizing a strong focus on execution despite an uncertain tariff and regulatory environment. Revenues for the quarter increased by 12% sequentially, driven by inverter and battery shipments, while the gross margin showed significant improvement from the previous quarter. The leadership remains committed to executing strategic priorities that aim to enhance operational performance.

Guidance
For the second quarter ending June 30, 2025, SolarEdge expects revenues to be in the range of $265 million to $285 million. The company anticipates a non-GAAP gross margin between 8% and 12%, which includes approximately two percentage points of new tariff impact. Additionally, non-GAAP operating expenses are projected to range from $90 million to $95 million.

Additional News
In recent company developments, SolarEdge Technologies announced a significant change to its board of directors. Marcel Gani resigned from the board, effective April 8, 2025, as part of ongoing governance adjustments. Additionally, the company continues to execute its strategic vision by divesting non-profitable operations, including a Korean battery factory and system-tracking services, to focus on core strengths and improve overall financial health. This restructuring aligns with SolarEdge's commitment to enhancing operational efficiencies and strengthening its position in key markets, particularly in residential rooftop solar and commercial installations. These steps underscore the company's proactive approach to navigating challenges and harnessing emerging opportunities in the renewable energy sector.