SolarEdge Technologies, Inc.

It was a successful first quarter for SolarEdge Technologies, reporting an all-around beat. Solar business revenues grew 49% year-over-year, driven mainly by sustainable revenues in Europe and the Rest of the World. The company shipped 6.4 million power optimizers and 330,000 inverters. It also sent 221 megawatt-hours of residential batteries, slightly higher than the previous quarter. Revenue from the Rest of the World regions increased by 30% quarter-over-quarter, coming from 24 countries across the Asia Pacific, Africa, and South America. The European residential market continued strong as the company ramped shipments of 3-phase residential inverters, backup inverters, and 3-phase residential batteries. In the U.S., revenues were down quarter-over-quarter due to weakness in the residential segment related to interest rates and lower battery sales. However, the company believes that the long-term dynamics of NEM 3.0 regulation and the anticipation for TPO share growth cater well to their product offering and position in the market. They believe their inherent advantages in safety capability and balance of system cost efficiencies position them well in the C&I market, where demand for their product is still outpacing capacity. In addition, SolarEdge unveiled its first Battery Virtual Power Plant, which is designed to support the National Grid ESO DFS in Great Britain. We give SolarEdge Technologies, Inc. a ‘Hold’ rating with a revised target price.