SolarEdge Technologies (SEDG, Financial), a solar equipment manufacturer, released its third-quarter financial results, revealing a significant 64% year-over-year sales decline to $260.9 million, falling short of analysts' predicted $290.9 million. The company reported a non-GAAP loss of $15.33 per share, which was worse than anticipated by analysts. In response to these results, the company took a $1 billion write-down and cautioned that its profit margins for the next quarter might be zero or negative, causing its share price to drop by over 20%.
The company’s guidance for fourth-quarter revenue is equally disappointing at $190 million, which is 38.9% below analysts' expectations. SolarEdge also projected its non-GAAP gross margin to be between -4% and 0%, a forecast that factors in a 1,000 basis point benefit from the IRA manufacturing tax credit.
Interim CEO Ronen Faier emphasized the company's focus on three main priorities as SolarEdge navigates this challenging period: achieving financial stability, regaining market share, and refocusing on core solar and storage opportunities.
The disappointing performance and outlook underscore the challenges facing the solar industry, such as high interest rates and excess inventory. The $1.03 billion write-down was attributed to a decline in the value of various assets following valuation assessments.
As of the latest update, SolarEdge's shares were down 17.07% in after-hours trading, with the year-to-date decline exceeding 80%. This drop is significant, even for a stock that is known for its historical volatility.
