Israeli inverter and energy storage manufacturer SolarEdge has reported third-quarter (Q3) 2026 revenue of US$326.1 million, landing at the midpoint of its own guidance range but down 5.8% from the prior quarter and 4.1% year-on-year.
The results published on 4 November 2026 bear out SolarEdge’s Q2 prediction, when it forecast a weak third quarter ahead, despite posting 20% year-on-year revenue growth in that quarter.
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Despite the quarterly revenue decline, profitability metrics improved, with GAAP gross margin up to 33.2% from 27.5% in the second quarter and 21.2% a year earlier. Non-GAAP gross margin reached 34.7%. Both figures included a US$36.0 million benefit tied to IEEPA tariff matters.
Non-GAAP operating income came in at US$23.9 million, more than double the prior quarter’s US$10.2 million, and non-GAAP net income was US$21.1 million, compared with US$3.6 million in Q2 2026 and a net loss a year earlier.
The company also reported free cash flow of US$7.8 million, the fifth consecutive quarter of positive free cash flow, with cash flow from operations of US$20.4 million. Cash and investments, net of debt, stood at US$260.9 million as of September 30, 2026.
Looking ahead, SolarEdge guided for fourth-quarter revenue of between US$245 million and US$275 million, a sharp sequential decline, alongside non-GAAP gross margin of 17% to 21% — well below Q3 levels — reflecting reduced demand expectations into year-end.
CEO Shuki Nir said the company is “taking decisive steps to reduce costs, sharpen our focus, and support profitability amid softer demand”.
He pointed to longer-term growth drivers including momentum in the Nexis residential solar and battery storage platform, increasing storage adoption and SolarEdge’s push into the AI data centre power infrastructure market through its solid-state transformer (SST) platform, which Nir said is generating “increasing interest from potential partners and customers”.
The results suggest SolarEdge remains caught between near-term demand softness and a strategic pivot toward diversification — particularly data centre power infrastructure — as it looks to stabilise margins ahead of an uncertain fourth quarter.
