Israel-headquartered inverter producer SolarEdge posted dramatically lowered yearly revenues and increased net losses in 2024, a year in which the Western inverter market saw sustained challenges and a raft of job losses.
The firm posted net losses (in accordance with generally accepted accounting principles (GAAP)) of US$1.81 billion over 2024 and non-GAAP losses of US$1.31 billion. This compares with GAAP net income of US$34.3 million (non-GAAP US$248.4 million) in 2023.
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Total revenue for 2024 was US$901.5 million, down by over US$2 billion from US$2.98 billion in 2023. In its investor presentation, SolarEdge showed that its total revenue had a negative compound annual growth rate (CAGR) of -46.2% from 2022 to 2024, driven overwhelmingly by declines in its solar business, which accounts for over 90% of its revenues.
GAAP losses for Q4 2024 were US$287.4 million, compared with losses of over US$1 billion in Q3. Net revenue for the final quarter of the year was US$196.2 million, down 17% on the previous quarter.
The company appointed a new CEO, Shuki Nir, formerly its chief marketing executive, in December following previous leader Zvi Lando’s decision to step down in August to reportedly aid in SolarEdge’s “full recovery”.
In the company’s 2024 earnings call, Nir said: “Our financial results in recent quarters have been disappointing to our shareholders and employees and it is clear we need to significantly change the way we operate to win back customers, extend our technological leadership and return to growth.”
SolarEdge closed its battery storage manufacturing division in November, as reported by our colleagues at Energy-storage.news, to focus on its “core” solar and solar-tied-batteries business. This resulted in around 500 job cuts, mostly in South Korea. It cut a further 400 positions in January to “enhance operational cost efficiency”.
All of the major Western inverter manufacturers have experienced challenges over the last year. Competitors SMA Solar and Enphase have also announced job cuts and strategic shifts.
Associate director of clean energy technology at market analyst S&P Global, Cormac Gilligan, told PV Tech Premium that the industry was facing “growing pains” as product requirements shift, Chinese manufacturers occupy greater market share and the European market, in particular, sees a drop off in demand.
Records from sun.store, a European solar industry wholesale platform, show that inverter prices generally trended downwards in the last three months of 2024 and Chinese manufacturers such as Huawei and Sungrow dominated purchases.
In SolarEdge’s earnings call, CFO Ariel Porat said that the company “impaired and wrote off” around US$115 million in inventory in Q4 2024 – “of which, approximately US$87 million net is related to our solar business” – as a result of challenges in the European market.
“This is excess inventory on our balance sheet that we no longer expect to sell given our expectation that the recovery in the European markets will take longer than anticipated. The remaining US$28 million, which was excluded from non-GAAP is related to both inventory and non-cancellable, non-returnable items that are related to our energy storage division in Korea,” Porat said.
Earnings call transcript from Motley Fool.
