Israel-headquartered solar inverter supplier SolarEdge has reported a steep decline in shipments in the fourth quarter of 2023 due to a slowdown in demand.
In its latest financial result announcement, SolarEdge only shipped 901MWac of inverters and 133MWh of batteries in Q4 2023. This was a 76.5% quarter-on-quarter decrease over Q3, when the company shipped 3,841MWac of inverters. For FY 2023, it shipped 12.6GWac of inverters and 744MWh of batteries.
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Ronen Faier, chief financial officer of SolarEdge, commented: “Our inventory level increased significantly due to the abrupt slowdown in demand. Our inventory days increased from 169 days in Q3 to 386 days in Q4. We expect a slight increase in inventory levels in the first quarter as we ramp our US manufacturing, which, along with the lower guided revenues will result in higher inventory days.”
Aside from shipments, SolarEdge’s revenues from the solar segment were only US$282.4 million in Q4 2023, decreasing by 58% from US$676.9 million in the previous quarter and by 66% from US$837.0 million in the same quarter last year.
For FY 2023, revenues from the solar segment were US$2.8 billion, down only 4% from US$2.9 billion in the prior year.
The company’s business worsened in H2 2023, as its net loss was US$162.4 million in Q4 2023, compared to the net loss of US$61.2 million in Q3 2023 and net income of US$20.8 million in Q4 2022. For FY 2023, SolarEdge recorded a net income of US$34.3 million, down 63% from US$93.8 million.
“The first half of 2023 included record installations and expectations for continued growth, with a shift in the second half of the year to a weaker market due to higher interest rates and lower power prices, which resulted in an inventory buildup that slowed our shipments,” said Zvi Lando, SolarEdge CEO.
Looking ahead, SolarEdge expected its revenues for Q1 2024 to be within the range of US$175 million to US$215 million, down by 32-44.6% quarter-on-quarter. Revenues from the solar segment will be within the range of US$160 million to US$200 million, decreasing by 29.2-43.3% quarter-to-quarter.
“The trend of increased inventory days is expected to begin to reverse in the second quarter of 2024 once revenues return to growth and as we manufacture fewer products,” said Faier.
In January, SolarEdge announced that it laid off 900 employees to reduce operating expenses. The company said the workforce reduction would impact about 16% of its global workforce. Of the employees who are going to be laid off, 500 are from the company’s several manufacturing sites.
Lando said the company had implemented several measures to align the company’s cost structure with a projected business outlook, including closure or capacity reductions across its manufacturing base and exiting from certain lines of business, in addition to the 16% reduction in workforce.
“Through these actions, we made sure not to impact our R&D activities in the development of future products that will enable us to maintain our strong position in this market,” he added.
