Israel-based solar inverter producer SolarEdge Technologies has reported a return to non-GAAP operating profitability for the first time since the second quarter of 2023, but its shares fell around 24% after the company issued weaker-than-expected guidance for the third quarter.
The inverter manufacturer posted second-quarter 2026 revenue of US$346.2 million, up 20% year-on-year and 11.5% sequentially, driven by stronger demand in Europe and growth in the US commercial and industrial (C&I) segment.
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Non-GAAP gross margin increased to 28.6%, compared with 13.1% in the same period last year, marking the company’s sixth consecutive quarter of year-on-year gross margin expansion. Non-GAAP operating income reached US$10.2 million, compared with a loss of US$48.3 million a year earlier, while non-GAAP net income was US$3.6 million.
“Strong demand in Europe combined with strength in US C&I, more than offset industry-wide softness in US residential, driving overall year-over-year growth. We are focused on building on this momentum by scaling the Nexis platform in our core markets and continuing to advance the SolarEdge SST to address the significant opportunity in AI factories,” said Shuki Nir, CEO of SolarEdge.
On a GAAP basis, SolarEdge narrowed its operating loss to US$16 million from US$115.5 million in the second quarter of 2025. Net loss improved to US$30.8 million, or US$0.50 per diluted share, compared with a loss of US$124.7 million, or US$2.13 per share, a year earlier.
The company generated positive free cash flow of US$3.1 million during the quarter and increased its cash and investments portfolio, net of debt, to US$264.6 million as of 30 June, up from US$244.2 million at the end of 2025.
However, investor sentiment was overshadowed by the company’s third-quarter outlook. SolarEdge expects revenue of US$310-340 million, below market expectations, citing continued uncertainty in US residential solar demand.
In December 2025, PV Tech spoke with SolarEdge’s North America general manager about the policy uncertainty and market headwinds shaping the US solar sector heading into 2026.
For the quarter of 2026, SolarEdge reduced its net losses and maintained relatively stable margins. The company, in May 2026, reported a net loss of US$57.4 million for the three months ended 31 March 2026, improving from a net loss of US$132.1 million in the previous quarter. Gross margin was 22%, broadly in line with 22.2% in Q4 2025.
Revenue totalled US$310.5 million, down 7.4% from US$335.4 million in the previous quarter. SolarEdge said the quarter did not benefit from any significant one-off or pull-forward demand related to US policy changes, including safe harbour activity or a year-end rush to secure the Section 25D residential solar tax credit.
