SolarEdge — Third Quarter 2026 Earnings Summary

Financial Performance:

• GAAP revenue was $326.1 million, down 5.8% sequentially and 4.1% year-over-year; Non-GAAP revenue was $325.4 million, down 5.8% sequentially and 4.2% year-over-year.
• GAAP gross margin was 33.2% (up from 27.5% in Q2 2026 and 21.2% in Q3 2025); Non-GAAP gross margin was 34.7% (up from 28.6% in Q2 2026 and 18.8% in Q3 2025).
• Both GAAP and Non-GAAP gross margins included a $36.0 million benefit related to IEEPA tariff matters.
• GAAP operating expenses were $110.1 million; Non-GAAP operating expenses were $88.8 million.
• GAAP operating loss was $1.9 million, compared to a $16.0 million loss in Q2 2026 and a $35.2 million loss in Q3 2025.
• Non-GAAP operating income was $23.9 million, compared to $10.2 million in Q2 2026 and a $23.8 million loss in Q3 2025.
• GAAP net loss was $8.4 million, compared to a $30.8 million loss in Q2 2026 and a $50.1 million loss in Q3 2025.
• Non-GAAP net income was $21.1 million, compared to $3.6 million in Q2 2026 and an $18.3 million loss in Q3 2025.
• GAAP EPS (diluted) was $(0.14); Non-GAAP EPS (diluted) was $0.29.
• Free cash flow was $7.8 million, marking the fifth consecutive quarter of positive free cash flow (compared to $3.1 million in Q2 2026 and $22.8 million in Q3 2025).
• Cash and investments portfolio, net of debt, was $260.9 million as of September 30, 2026, down from $264.6 million as of June 30, 2026.
• Trade receivables were $209.6 million (down from $267.4 million in Q4 2025); Inventories were $621.1 million (up from $552.6 million in Q4 2025).
• Convertible senior notes, net, were $332.7 million as of September 30, 2026.

Guidance and Future Outlook:

• Q4 2026 revenue guidance is $245 million to $275 million, excluding potential IEEPA refunds.
• Q4 2026 Non-GAAP gross margin guidance is 17% to 21%.
• Q4 2026 Non-GAAP operating expenses guidance is $87 million to $91 million.
• Management noted reduced revenue expectations for the fourth quarter due to near-term market uncertainty and softer demand.
• Management stated they are taking decisive steps to reduce costs and sharpen focus to support profitability.

Business Segments and Product Lines:

• The company highlighted continued progress on the SolarEdge SST (solid-state transformer) platform for the AI data center opportunity.
• Live demonstrations of SST technology are generating increasing interest from potential partners and customers.
• Strong momentum was reported in the Nexis product line.
• Increasing storage adoption was noted as a key growth driver.

Market and Competitive Landscape:

• Management cited persistent near-term market uncertainty and reduced revenue expectations as current market conditions.
• The company is accelerating efforts in the AI data center power infrastructure market.

Risks and Challenges:

• Risks include near-term market uncertainty, softer demand, and reduced revenue expectations for Q4 2026.
• The press release notes that Q4 guidance excludes potential IEEPA refunds, indicating variability in future financial results.
• Management highlighted the need to reduce costs to support profitability amid current demand conditions.

Management Commentary and Tone:

• CEO Shuki Nir stated the team delivered revenue at the midpoint of guidance with profitability in line with expectations.
• Management expressed confidence that product innovation initiatives (Nexis, storage, and SST) position the company to capitalize on a market recovery.
• The tone acknowledged current challenges while emphasizing decisive cost-reduction steps and strategic focus.

Other Key Points:

• The company reported five consecutive quarters of positive free cash flow.
• The press release includes a detailed reconciliation of GAAP to Non-GAAP financial measures, excluding stock-based compensation, amortization, restructuring charges, and other items.
• A conference call was scheduled for November 4, 2026, at 8:00 a.m. ET to discuss results.
• The company operates in over 145 countries with more than 60% of Fortune 100 companies utilizing SolarEdge technology.