SolarEdge (SEDG) 8-K Results of Operations and Financial Condition

Exhibit 99.1

SolarEdge Announces Quarter Ended September 30, 2016

Financial Results

FREMONT, Calif. — November 9, 2016. SolarEdge Technologies, Inc. (Nasdaq: SEDG), a global leader in PV inverters, power optimizers, and module-level monitoring services, today announced its financial results for the quarter ended September 30, 2016.

Quarter Ended September 30, 2016 Highlights

· Revenues for the quarter of $128.5 million

· GAAP gross margin for the quarter of 32.6%

· GAAP operating income for the quarter of $18.2 million

· GAAP net income for the quarter of $15.6 million

· Non-GAAP net income for the quarter of $20.9 million

· GAAP net diluted earnings per share for the quarter of $0.35

· Non-GAAP net diluted earnings per share for the quarter of $0.46

· 466 Megawatts (AC) of inverters shipped for the quarter

“The solar market is facing challenging times. Despite this, our financial parameters continue to be strong and we are confident in our strategy. We are focused on maintaining and growing our market share by adjusting our plans to the changing environment and continuing to invest in R&D for new innovative products and diligent cost reduction, while improving operational efficiency and increasing geographic diversification,” said Guy Sella, Founder, Chairman and CEO of SolarEdge.

Quarter Ended September 30, 2016 Summary

The Company reported revenues of $128.5 million, an increase of 3% from the prior quarter and an increase of 12% year over year.

GAAP gross margin reached 32.6%, up from 31.4% in the prior quarter and up 29.1% year over year.

GAAP operating expenses were $23.6 million, an increase of 11% from the prior quarter and an increase of 27% year over year.

GAAP operating income was $18.2 million, up from $17.9 million in the prior quarter and form $14.9 million year over year.

GAAP net income was $15.6 million, down from $17.3 million in the prior quarter and up from $14.4 million year over year.

Non-GAAP net income was $20.9 million, up from $19.9 million in the prior quarter and up from $16.3 million year over year.

GAAP net diluted earnings per shares (“EPS”) was $0.35, down from $0.39 in the prior quarter and up from $0.32 year over year.

Non-GAAP net diluted EPS was $0.46, up from $0.44 in the prior quarter and up from $0.36 year over year.

As of September 30, 2016, cash, cash equivalents, restricted cash and marketable securities totaled $206.7 million, compared to $186.6 million on June 30, 2016. As of September 30, 2016, the Company did not have any debt.

Outlook for the Quarter Ending December 31, 2016

The Company also provides guidance for the quarter ending December 31, 2016 as follows:

· Revenues to be within the range of $110 million to $120 million;

· Gross margins to be within the range of 30% to 32%.

Conference Call

The Company will host a conference call to discuss these results at 4:30 P.M. ET on Wednesday, November 9, 2016. The call will be available, live, to interested parties by dialing +1 877-852-6581. For international callers, please dial +1 719-325-4800. The Conference ID number is 5288310.  A live webcast will also be available in the Investors Relations section of the Company’s website at: http://investors.solaredge.com

A replay of the webcast will be available in the Investor Relations section of the Company’s web site approximately two hours after the conclusion of the call and will remain available for approximately 30 calendar days.

About SolarEdge

SolarEdge provides an intelligent inverter solution that has changed the way power is harvested and managed in solar photovoltaic systems. The SolarEdge DC optimized inverter system maximizes power generation at the individual PV module-level while lowering the cost of energy produced by the solar PV system. The SolarEdge system consists of power optimizers, inverters, storage solutions and a cloud-based monitoring platform and addresses a broad range of solar market segments, from residential solar installations to commercial and small utility-scale solar installations. SolarEdge is online at http://www.solaredge.com

Use of Non-GAAP Financial Measures

The Company has presented certain non-GAAP financial measures in this release. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either exclude or include amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States, or GAAP. Reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure can be found in the accompanying tables to this release. These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same captions and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies. As such, these non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.

The Company uses these non-GAAP financial measures to analyze its operating performance and future prospects, develop internal budgets and financial goals, and to facilitate period-to-period comparisons. The Company believes that these non-GAAP financial measures reflect an additional way of viewing aspects of its operations that, when viewed with its GAAP results, provide a more complete understanding of factors and trends affecting its business.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This release contains forward looking statements which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements include information, among other things, concerning: our possible or assumed future results of operations; future demands for solar energy solutions; business strategies; technology developments; financing and investment plans; dividend policy; competitive position; industry and regulatory environment; general economic conditions; potential growth opportunities; and the effects of competition. These forward-looking statements are often characterized by the use of words such as “anticipate,” “believe,” “could,” “seek,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or similar expressions and the negative or plural of those terms and other like terminology.

Forward-looking statements are only predictions based on our current expectations and our projections about future events.  These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. Given these factors, you should not place undue reliance on these forward-looking statements.  These factors include, but are not limited to, the matters discussed in the section entitled “Risk Factors” of our Registration Statement on Form S-1 (including the related prospectus), Annual Report on Form 10-K for the fiscal year ended June 30, 2016, filed on August 17, 2016, Current Reports on Form 8-K and other reports filed with the SEC. All information set forth in this release is as of November 9, 2016.  The Company undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events or changes in its expectations.

Investor Contacts

SolarEdge Technologies, Inc.

Ronen Faier, Chief Financial Officer

+1 510-498-3263

investors@solaredge.com

Sapphire Investor Relations, LLC

Erica Mannion or Michael Funari

+1 617-542-6180

investors@solaredge.com

SOLAREDGE TECHNOLOGIES INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

	Three months ended September 30,
	2016		2015
	Unaudited
Revenues	$	128,484	$	115,054
Cost of revenues		86,609		81,527
Gross profit		41,875		33,527
Operating expenses:
Research and development, net		9,935		6,991
Sales and marketing		10,036		8,244
General and administrative		3,664		3,418
Total operating expenses		23,635		18,653
Operating income		18,240		14,874
Financial income (expenses), net		390		(72	)
Income before taxes on income		18,630		14,802
Taxes on income		3,014		370
Net income	$	15,616	$	14,432

SOLAREDGE TECHNOLOGIES INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

	September 30,			June 30,
	2016			2016
	Unaudited
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	90,014		$	74,032
Restricted cash		946			928
Marketable Securities		61,786			59,163
Trade receivables, net		84,898			72,737
Prepaid expenses and other accounts receivable		17,276			21,340
Inventories		68,434			81,550
Total current assets		323,354			309,750
PROPERTY AND EQUIPMENT, NET		30,377			27,831
LONG-TERM ASSETS:
Marketable securities		53,955			52,446
Prepaid expenses and lease deposits		437			399
Deferred tax assets, net		4,127			6,296
Intangible assets, net		695			716
Total assets	$	412,945		$	397,438
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables, net	$	40,282		$	48,481
Employees and payroll accruals		11,975			10,092
Warranty obligations		15,103			14,114
Deferred revenues		2,421			3,859
Accrued expenses and other accounts payable		8,719			10,725
Total current liabilities		78,500			87,271
LONG-TERM LIABILITIES
Warranty obligations		41,305			37,078
Deferred revenues		16,059			14,684
Lease incentive obligation		2,135			2,297
Total long-term liabilities		59,499			54,059
COMMITMENTS AND CONTINGENT LIABILITIES
STOCKHOLDERS’ EQUITY:
Common stock		4			4
Additional paid-in capital		302,587			299,214
Accumulated other comprehensive income		120			271
Accumulated deficit		(27,765	)		(43,381	)
Total stockholders’ equity		274,946			256,108
Total liabilities and stockholders’ equity	$	412,945		$	397,438

SOLAREDGE TECHNOLOGIES INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Three months ended September 30,
	2016			2015
	Unaudited
Cash flows provided by operating activities:
Net income	$	15,616		$	14,432
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation		1,271			738
Amortization of intangible assets		21			21
Amortization of premiums on available-for-sale marketable securities		332			-
Stock-based compensation		3,100			1,832
Realized losses on Cash Flow Hedges		-			1
Changes in assets and liabilities:
Inventories		13,120			(5,956	)
Prepaid expenses and other accounts receivable		4,176			11,811
Trade receivables, net		(12,102	)		(11,928	)
Deferred tax assets, net		2,180			-
Trade payables		(8,200	)		(13,500	)
Employees and payroll accruals		1,879			1,044
Warranty obligations		5,216			4,025
Deferred revenues		(63	)		1,970
Accrued expenses and other accounts payable		(2,015	)		1,467
Lease incentive obligation		(162	)		(11	)
Net cash provided by operating activities		24,369			5,946
Cash flows used in investing activities:
Purchase of property and equipment		(3,815	)		(3,292	)
Purchase of intangible assets		-			(800	)
Decrease (increase) in restricted cash		(18	)		51
Decrease (increase) in short and long-term lease deposits		(29	)		73
Investment in available-for-sale marketable securities		(19,928	)		-
Maturities of available-for-sale marketable securities		15,304			-
Net cash used in investing activities		(8,486	)		(3,968	)
Cash flows from financing activities:
Proceeds from issuance of shares upon exercise of options		273			17
Net cash provided by  financing activities		273			17
Increase  in cash and cash equivalents		16,156			1,995
Cash and cash equivalents at the beginning of the period		74,032			144,750
Effect of exchange rate differences on cash and cash equivalents		(174	)		(16	)
Cash and cash equivalents at the end of the period	$	90,014		$	146,729

SOLAREDGE TECHNOLOGIES INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(In thousands, except per share data)

(unaudited)

Reconciliation of Non-GAAP Financial Measures

	Reconciliation of GAAP to Non-GAAP Gross Profit
	Three months ended
	September 30, 2016		June 30, 2016		September 30, 2015
Gross profit (GAAP)		41,875		39,113		33,527
Stock-based compensation		385		310		180
Gross profit (Non-GAAP)		42,260		39,423		33,707

	Reconciliation of GAAP to Non-GAAP Gross Margin
	Three months ended
	September 30, 2016			June 30, 2016			September 30, 2015
Gross margin (GAAP)		32.6	%		31.4	%		29.1	%
Stock-based compensation		0.3	%		0.2	%		0.2	%
Gross margin (Non-GAAP)		32.9	%		31.6	%		29.3	%

	Reconciliation of GAAP to Non-GAAP Operating expenses
	Three months ended
	September 30, 2016		June 30, 2016		September 30, 2015
Operating expenses (GAAP)		23,635		21,229		18,653
Stock-based compensation R&D		927		747		395
Stock-based compensation S&M		849		730		616
Stock-based compensation G&A		939		613		641
Operating expenses (Non-GAAP)		20,920		19,138		17,001

	Reconciliation of GAAP to Non-GAAP Operating income
	Three months ended
	September 30, 2016		June 30, 2016		September 30, 2015
Operating income (GAAP)		18,240		17,884		14,874
Stock-based compensation		3,100		2,401		1,832
Operating income (Non-GAAP)		21,340		20,285		16,706

	Reconciliation of GAAP to Non-GAAP Tax on income (Tax benefit)
	Three months ended
	September 30, 2016			June 30, 2016			September 30, 2015
Tax on income (Tax benefit) (GAAP)		3,014			84			370
Tax expenses due to utilization of deferred tax asset		(2,179	)		(247	)		----
Tax on income (Tax benefit) (Non-GAAP)		835			(163	)		370

	Reconciliation of GAAP to Non-GAAP Net income
	Three months ended
	September 30, 2016		June 30, 2016		September 30, 2015
Net income (GAAP)		15,616		17,273		14,432
Stock-based compensation		3,100		2,401		1,832
Tax expenses due to utilization of deferred tax asset		2,179		247		----
Net income (Non-GAAP)		20,895		19,921		16,264

	Reconciliation of GAAP to Non-GAAP Net basic EPS
	Three months ended
	September 30, 2016		June 30, 2016		September 30, 2015
Net basic earnings per share (GAAP)		0.38		0.42		0.37
Stock-based compensation		0.08		0.06		0.04
Tax expenses due to utilization of deferred tax asset		0.05		0.01		----
Net basic earnings per share (Non-GAAP)		0.51		0.49		0.41

	Reconciliation of GAAP to Non-GAAP Net diluted EPS
	Three months ended
	September 30, 2016		June 30, 2016		September 30, 2015
Net diluted earnings per share (GAAP)		0.35		0.39		0.32
Stock-based compensation		0.06		0.04		0.04
Tax expenses due to utilization of deferred tax asset		0.05		0.01		----
Net diluted earnings per share (Non-GAAP)		0.46		0.44		0.36

	Reconciliation of GAAP to Non-GAAP No. of shares used in Net diluted EPS
	Three months ended
	September 30, 2016		June 30, 2016		September 30, 2015
Number of shares used in computing net diluted earnings per share (GAAP)		43,995,227		44,463,087		44,455,964
Stock-based compensation		1,742,211		1,216,866		686,470
Number of shares used in computing net diluted earnings per share (Non-GAAP)		45,737,438		45,679,953		45,142,434