Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 01, 2019 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Entity File Number | 001-36894 | |
Entity Interactive Data Current | Yes | |
Entity Current Reporting Status | Yes | |
Entity Registrant Name | SOLAREDGE TECHNOLOGIES, INC. | |
Entity Address, Country | IL | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, City or Town | Herziliya Pituach | |
Entity Address, State or Province | DE | |
Entity Tax Identification Number | 20-5338862 | |
Entity Address, Address Line One | 1 HaMada Street | |
Entity Address, Postal Zip Code | 4673335 | |
Local Phone Number | (9) 957-6620 | |
Entity Information, Former Legal or Registered Name | N/A | |
Entity Common Stock, Shares Outstanding | 48,610,590 | |
Entity Central Index Key | 0001419612 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
City Area Code | 972 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Title of each class | Common stock, par value $0.0001 per share | |
Trading Symbol | SEDG | |
Name of Exchange on which Security is Registered | NASDAQ |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 247,342 | $ 187,764 |
Short-term bank deposits | 5,769 | 9,870 |
Restricted bank deposits | 1,600 | 824 |
Marketable securities | 85,343 | 118,680 |
Trade receivables, net | 292,232 | 173,579 |
Prepaid expenses and other current assets | 68,234 | 45,073 |
Inventories, net | 134,283 | 141,519 |
Total current assets | 834,803 | 677,309 |
LONG-TERM ASSETS: | ||
Marketable securities | 92,871 | 74,256 |
Operating lease right-of-use assets | 34,601 | |
Property, plant and equipment, net | 149,675 | 119,329 |
Deferred tax assets, net | 17,180 | 14,699 |
Intangible assets, net and goodwill | 200,795 | 73,378 |
Other long term assets | 7,667 | 5,501 |
Total long-term assets | 502,789 | 287,163 |
Total assets | 1,337,592 | 964,472 |
CURRENT LIABILITIES: | ||
Trade payables, net | 132,230 | 107,079 |
Employees and payroll accruals | 44,386 | 29,053 |
Current maturities of bank loans and accrued interest | 16,912 | 16,639 |
Warranty obligations | 45,887 | 28,868 |
Deferred revenues | 15,006 | 14,351 |
Accrued expenses and other current liabilities | 80,986 | 29,728 |
Total current liabilities | 335,407 | 225,718 |
LONG-TERM LIABILITIES: | ||
Bank loans | 4,055 | 3,510 |
Warranty obligations | 125,467 | 92,958 |
Deferred revenues | 81,934 | 60,670 |
Operating lease liabilities | 29,117 | |
Deferred tax liabilities, net | 7,762 | 1,499 |
Other long term liabilities | 16,662 | 9,391 |
Total long-term liabilities | 264,997 | 168,028 |
COMMITMENTS AND CONTINGENT LIABILITIES | ||
STOCKHOLDERS' EQUITY: | ||
Common stock of $0.0001 par value - Authorized: 125,000,000 shares as of September 30, 2019 (unaudited) and December 31, 2018; issued and outstanding: 48,576,288 and 46,052,802 shares as of September 30, 2019 (unaudited) and December 31, 2018, respectively | 5 | 5 |
Additional paid-in capital | 450,459 | 371,794 |
Accumulated other comprehensive loss | (3,356) | (524) |
Retained earnings | 284,904 | 191,133 |
Total SolarEdge Technologies, Inc. stockholders' equity | 732,012 | 562,408 |
Non-controlling interests | 5,176 | 8,318 |
Total stockholders' equity | 737,188 | 570,726 |
Total liabilities and stockholders' equity | $ 1,337,592 | $ 964,472 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, authorized shares | 125,000,000 | 125,000,000 |
Common stock, issued shares | 48,576,288 | 46,052,802 |
Common stock, outstanding shares | 48,576,288 | 46,052,802 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Revenues | $ 410,556 | $ 236,578 | $ 1,007,437 | $ 673,567 |
Cost of revenues | 271,247 | 158,596 | 671,348 | 434,042 |
Gross profit | 139,309 | 77,982 | 336,089 | 239,525 |
Operating expenses: | ||||
Research and development | 30,747 | 20,109 | 86,451 | 57,535 |
Sales and marketing | 22,026 | 16,938 | 64,325 | 49,097 |
General and administrative | 12,214 | 6,898 | 37,590 | 17,427 |
Non recurring expenses | 8,305 | 8,305 | ||
Total operating expenses | 73,292 | 43,945 | 196,671 | 124,059 |
Operating income | 66,017 | 34,037 | 139,418 | 115,466 |
Financial expenses, net | 17,023 | 689 | 22,401 | 2,585 |
Income before taxes on income | 48,994 | 33,348 | 117,017 | 112,881 |
Taxes on income (tax benefit) | 7,270 | (12,295) | 24,405 | (3,016) |
Net income | 41,724 | 45,643 | 92,612 | 115,897 |
Net loss (income) attributable to non-controlling interests | (97) | 1,159 | ||
Net income attributable to SolarEdge Technologies, Inc. | $ 41,627 | $ 45,643 | $ 93,771 | $ 115,897 |
Net basic earnings per share of common stock attributable to SolarEdge Technologies, Inc. | $ 0.86 | $ 1 | $ 1.97 | $ 2.57 |
Net diluted earnings per share of common stock attributable to SolarEdge Technologies, Inc. | $ 0.81 | $ 0.95 | $ 1.87 | $ 2.41 |
Weighted average number of shares used in computing net basic earnings per share of common stock | 48,195,020 | 45,601,540 | 47,637,023 | 45,025,661 |
Weighted average number of shares used in computing net diluted earnings per share of common stock | 51,081,594 | 48,281,240 | 49,935,638 | 48,091,185 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 41,724 | $ 45,643 | $ 92,612 | $ 115,897 |
Available-for-sale securities: | ||||
Changes in unrealized gains (losses), net of tax | 17 | 32 | 872 | (484) |
Reclassification adjustments for losses included in net income | 91 | |||
Net change | 17 | 32 | 963 | (484) |
Cash flow hedges: | ||||
Changes in unrealized gains, net of tax expense | 45 | 45 | ||
Reclassification adjustments for loses, net of tax expense included in net income | (9) | (9) | ||
Net change | 36 | 36 | ||
Foreign currency translation adjustments, net | (2,478) | 87 | (3,795) | 76 |
Total other comprehensive income (loss) | (2,461) | 155 | (2,832) | (372) |
Comprehensive income | 39,263 | 45,798 | 89,780 | 115,525 |
Comprehensive loss attributable to non-controlling interests | 286 | 590 | ||
Comprehensive income attributable to SolarEdge Technologies, Inc. | $ 39,549 | $ 45,798 | $ 90,370 | $ 115,525 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Common Stock [Member] | Additional paid in capital [Member] | Accumulated other comprehensive loss [Member] | Retained earnings [Member] | Total | Non-controlling interests [Member] | Stockholders Equity | |
Balance at Dec. 31, 2017 | $ 4 | $ 331,902 | $ (611) | $ 66,172 | $ 397,467 | $ 397,467 | ||
Balance (in shares) at Dec. 31, 2017 | 43,812,601 | |||||||
Cumulative effect of adopting new accounting standard | (3,872) | (3,872) | (3,872) | |||||
Issuance of Common Stock upon exercise of employee and non-employees stock-based awards | [1] | 4,605 | 4,605 | 4,605 | ||||
Issuance of Common Stock upon exercise of employee and non-employee stock options, shares | 1,084,507 | |||||||
Stock-based compensation expenses to employees and non-employee consultants | 6,849 | 6,849 | 6,849 | |||||
Other comprehensive income (loss) adjustments | (524) | (524) | (524) | |||||
Net income | 35,686 | 35,686 | 35,686 | |||||
Balance at Mar. 31, 2018 | $ 4 | 343,356 | (1,135) | 97,986 | 440,211 | 440,211 | ||
Balance (in shares) at Mar. 31, 2018 | 44,897,108 | |||||||
Balance at Dec. 31, 2017 | $ 4 | 331,902 | (611) | 66,172 | 397,467 | 397,467 | ||
Balance (in shares) at Dec. 31, 2017 | 43,812,601 | |||||||
Change to non-controlling interests | ||||||||
Net income | 115,897 | |||||||
Balance at Sep. 30, 2018 | $ 5 | 361,744 | (983) | 178,197 | 538,963 | 538,963 | ||
Balance (in shares) at Sep. 30, 2018 | 45,750,400 | |||||||
Balance at Mar. 31, 2018 | $ 4 | 343,356 | (1,135) | 97,986 | 440,211 | 440,211 | ||
Balance (in shares) at Mar. 31, 2018 | 44,897,108 | |||||||
Issuance of Common Stock upon exercise of employee and non-employees stock-based awards | [1] | 2,986 | 2,986 | 2,986 | ||||
Issuance of Common Stock upon exercise of employee and non-employee stock options, shares | 601,306 | |||||||
Stock-based compensation expenses to employees and non-employee consultants | 7,128 | 7,128 | 7,128 | |||||
Other comprehensive income (loss) adjustments | (3) | (3) | (3) | |||||
Net income | 34,568 | 34,568 | 34,568 | |||||
Balance at Jun. 30, 2018 | $ 5 | 353,470 | (1,138) | 132,554 | 484,891 | 484,891 | ||
Balance (in shares) at Jun. 30, 2018 | 45,498,414 | |||||||
Issuance of Common Stock upon exercise of employee and non-employees stock-based awards | [1] | 324 | 324 | 324 | ||||
Issuance of Common Stock upon exercise of employee and non-employee stock options, shares | 251,986 | |||||||
Stock-based compensation expenses to employees and non-employee consultants | 7,950 | 7,950 | 7,950 | |||||
Other comprehensive income (loss) adjustments | 155 | 155 | 155 | |||||
Net income | 45,643 | 45,643 | 45,643 | |||||
Balance at Sep. 30, 2018 | $ 5 | 361,744 | (983) | 178,197 | 538,963 | 538,963 | ||
Balance (in shares) at Sep. 30, 2018 | 45,750,400 | |||||||
Balance at Dec. 31, 2018 | $ 5 | 371,794 | (524) | 191,133 | 562,408 | 8,318 | 570,726 | |
Balance (in shares) at Dec. 31, 2018 | 46,052,802 | |||||||
Issuance of Common Stock upon exercise of employee and non-employees stock-based awards | [1] | 309 | 309 | 309 | ||||
Issuance of Common Stock upon exercise of employee and non-employee stock options, shares | 254,515 | |||||||
Stock-based compensation expenses to employees and non-employee consultants | 9,704 | 9,704 | 9,704 | |||||
Consideration in common stock related to business combination | [1] | 34,601 | 34,601 | 34,601 | ||||
Consideration in common stock related to business combination, shares | 1,194,046 | |||||||
Non-controlling interests related to business combination | 67,734 | 67,734 | ||||||
Change to non-controlling interests | 977 | 977 | (2,964) | (1,987) | ||||
Other comprehensive income (loss) adjustments | (696) | (696) | (849) | (1,545) | ||||
Net income | 19,016 | 19,016 | (1,041) | 17,975 | ||||
Balance at Mar. 31, 2019 | $ 5 | 417,385 | (1,220) | 210,149 | 626,319 | 71,198 | 697,517 | |
Balance (in shares) at Mar. 31, 2019 | 47,501,363 | |||||||
Balance at Dec. 31, 2018 | $ 5 | 371,794 | (524) | 191,133 | 562,408 | 8,318 | 570,726 | |
Balance (in shares) at Dec. 31, 2018 | 46,052,802 | |||||||
Change to non-controlling interests | 67,089 | |||||||
Net income | 93,771 | |||||||
Balance at Sep. 30, 2019 | $ 5 | 450,459 | (3,356) | 284,904 | 732,012 | 5,176 | 737,188 | |
Balance (in shares) at Sep. 30, 2019 | 48,576,288 | |||||||
Balance at Mar. 31, 2019 | $ 5 | 417,385 | (1,220) | 210,149 | 626,319 | 71,198 | 697,517 | |
Balance (in shares) at Mar. 31, 2019 | 47,501,363 | |||||||
Issuance of Common Stock upon exercise of employee and non-employees stock-based awards | 3,455 | 3,455 | 3,455 | |||||
Issuance of Common Stock upon exercise of employee and non-employee stock options, shares | 466,062 | |||||||
Stock-based compensation expenses to employees and non-employee consultants | 11,372 | 11,372 | 11,372 | |||||
Change to non-controlling interests | (528) | (528) | (65,551) | (66,079) | ||||
Other comprehensive income (loss) adjustments | 325 | 325 | 545 | 870 | ||||
Net income | 33,128 | 33,128 | (215) | 32,913 | ||||
Balance at Jun. 30, 2019 | $ 5 | 431,684 | (895) | 243,277 | 674,071 | 5,977 | 680,048 | |
Balance (in shares) at Jun. 30, 2019 | 47,967,425 | |||||||
Issuance of Common Stock upon exercise of employee and non-employees stock-based awards | 1,176 | 1,176 | 1,176 | |||||
Issuance of Common Stock upon exercise of employee and non-employee stock options, shares | 608,863 | |||||||
Stock-based compensation expenses to employees and non-employee consultants | 17,609 | 17,609 | 17,609 | |||||
Change to non-controlling interests | (10) | (10) | (612) | (622) | ||||
Other comprehensive income (loss) adjustments | (2,461) | (2,461) | (286) | (2,747) | ||||
Net income | 41,627 | 41,627 | 97 | 41,724 | ||||
Balance at Sep. 30, 2019 | $ 5 | $ 450,459 | $ (3,356) | $ 284,904 | $ 732,012 | $ 5,176 | $ 737,188 | |
Balance (in shares) at Sep. 30, 2019 | 48,576,288 | |||||||
[1] | Represents an amount lower than $1 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows provided by operating activities: | ||
Net income | $ 92,612 | $ 115,897 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation of property, plant and equipment | 12,532 | 7,997 |
Amortization of intangible assets | 7,514 | 404 |
Amortization of premium and accretion of discount on available-for-sale marketable securities | 1,242 | |
Stock-based compensation | 38,685 | 21,927 |
Loss from disposal of assets | 566 | 64 |
Realized gain from cash flow hedge | (9) | |
Realized loss from sale of available-for-sale marketable securities | 91 | |
Changes in assets and liabilities: | ||
Inventories, net | 15,746 | (18,120) |
Prepaid expenses and other assets | (19,795) | (4,800) |
Trade receivables, net | (114,572) | (42,418) |
Operating lease right-of-use assets and liabilities, net and effect of exchange rate differences | 2,138 | (222) |
Deferred tax assets and liabilities, net | (4,923) | (4,789) |
Trade payables, net | 21,301 | 14,006 |
Employees and payroll accruals | 15,329 | 1,200 |
Warranty obligations | 49,633 | 28,847 |
Deferred revenues | 19,516 | 21,576 |
Other liabilities | 39,561 | (597) |
Net cash provided by operating activities | 175,934 | 142,205 |
Cash flows from investing activities: | ||
Business combination, net of cash acquired | (38,435) | (11,223) |
Purchase of property, plant and equipment | (39,679) | (30,051) |
Withdrawal from (investment in) bank deposits | 4,101 | (8,123) |
Investment in restricted bank deposits | (243) | (201) |
Investment in available-for-sale marketable securities | (103,711) | (143,150) |
Proceeds from sales and maturities of available-for-sale marketable securities | 119,570 | 71,632 |
Net cash used in investing activities | (58,397) | (121,116) |
Cash flows from financing activities: | ||
Proceeds from borrowing loans | 232 | |
Repayment of bank loans, net | (5,142) | |
Proceeds from issuance of shares under stock purchase plan and upon exercise of stock-based awards | 4,940 | 7,915 |
Purchase of land and building under finance lease | (1,248) | |
Change in non-controlling interests | (67,089) | |
Net cash provided by (used in) financing activities | (68,307) | 7,915 |
Increase in cash and cash equivalents and restricted cash | 49,230 | 29,004 |
Cash, cash equivalents and restricted cash at the beginning of the period | 187,764 | 163,163 |
Effect of exchange rate differences on cash, cash equivalents and restricted cash | 10,348 | 731 |
Cash, cash equivalents and restricted cash at the end of the period | 247,342 | 192,898 |
Supplemental disclosure of non-cash activities: | ||
Operating lease, right of use assets | $ 36,174 |
GENERAL
GENERAL | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GENERAL | NOTE 1:- GENERAL a. SolarEdge Technologies, Inc. (the “Company”) and its subsidiaries design, develop, and sell an intelligent The Company and its subsidiaries sell their products worldwide through large distributors and electrical equipment wholesalers to smaller solar installers, as well as directly to large solar installers and Engineering, Procurement and Construction firms (“EPCs”). In July and October 2018, the Company completed the acquisitions ("Gamatronic Acquisition") of substantially all of the assets and activities of Gamatronic Electronic Industries Ltd. ("Gamatronic IL") and all of the outstanding shares of its wholly owned subsidiary Gamatronic (UK) Limited (“Gamatronic UK”), respectively. Both companies ("UPS Division") are providers and manufacturers of Uninterruptible Power Supplies ("UPS") devices. On October 17, 2018, the Company completed the acquisition of 74.5% of the outstanding common shares and voting rights of Kokam Co., Ltd. (“Kokam”), a Korean company whose shares are traded on the Korean OTC market, a provider of Lithium-ion cells, batteries and energy storage solutions. From October 17, 2018 and through September 30, 2019 (unaudited), the Company increased its shareholdings of Kokam to 94.3%. On January 24, 2019, the Company completed the acquisition of 56.8% of the outstanding common shares and voting rights of S.M.R.E S.p.A (“SMRE”), an Italian company whose shares were traded on the Italian AIM, a provider of innovative integrated powertrain technology and electronics for electric vehicles. Between January 24, 2019 and September 30, 2019 (unaudited), the Company increased its shareholdings of SMRE to 99.8% (see Note 2). b. New accounting pronouncements not yet effective: In January 2017, the FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment". ASU 2017-04 was issued to simplify how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. The amendments in ASU 2017-04 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. The Company is in the process of evaluating the potential impact of this pronouncement. SOLAREDGE TECHNOLOGIES, INC. AND ITS SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) U.S. dollars in thousands (except share and per share data) NOTE 1:- GENERAL (Cont.) In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 amends the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in a more timely recognition of losses. The Company will adopt Topic 326 effective January 1, 2020. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated balance sheets, statements of income and cash flows. c. Recently issued and adopted pronouncements: In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2016-02 (Topic 842) "Leases". Topic 842 supersedes the lease requirements in Accounting Standards Codification (ASC) Topic 840, "Leases". Under Topic 842, lessees are required to recognize assets and liabilities on the balance sheet for most leases and provide enhanced disclosures. ASU No. 2016-02 is effective for interim and annual reporting periods beginning after December 15, 2018. In July 2018, the FASB issued amendments in ASU 2018-11, which provide a transition election to not restate comparative periods for the effects of applying the new standard. This transition election permits entities to change the date of initial application to the beginning of the earliest comparative period presented, or retrospectively at the beginning of the period of adoption through a cumulative-effect adjustment. The Company has elected to apply the standard retrospectively at the beginning of the period of adoption through a cumulative-effect adjustment. The Company has also elected certain relief options offered in ASU 2016-02 including certain available transitional practical expedients. The Company adopted Topic 842 effective January 1, 2019. The interim consolidated financial statements for the nine months ended September 30, 2019 are presented under the new standard, while the comparative periods are not adjusted and continue to be reported in accordance with the Company’s historical accounting policy (See Note 7). d. Basis of Presentation: The accompanying unaudited interim consolidated interim financial statements have been prepared in accordance with Article 10 of Regulation S-X, “Interim Financial Statements” and the rules and regulations for Form 10-Q of the Securities and Exchange Commission (the “SEC”). Pursuant to those rules and regulations, the Company has condensed or omitted certain information and disclosures in footnotes that it normally includes in its annual consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). In management’s opinion, the Company has made all adjustments (consisting only of normal, recurring adjustments, except as otherwise indicated) necessary to fairly present its condensed consolidated financial position, results of operations, and cash flows. The Company’s interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. The significant accounting policies applied in the annual consolidated financial statements of the Company as of December 31, 2018, contained in the Company’s Annual Report on Form 10-K filed with the SEC on February 28, 2019, have been applied consistently in these unaudited interim consolidated financial statements, except for the adoption of ASU No. 2016-02, “Leases (Topic 842) (see Note 1c). SOLAREDGE TECHNOLOGIES, INC. AND ITS SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) U.S. dollars in thousands (except share and per share data) NOTE 1:- GENERAL (Cont.) The Company depends primarily on one contract manufacturer and several limited or single source component suppliers, and is in the process of opening an additional site with this contract manufacturer and its own manufacturing site. Reliance on these vendors makes the Company vulnerable to possible capacity constraints and reduced control over component availability, delivery schedules, manufacturing yields, and costs. As of September 30, 2019 (unaudited) and December 31, 2018, one and three vendors collectively accounted for 59.2% and 58.8% of the Company’s total trade payables, respectively. e. Accounting for stock-based compensation: Some of the RSUs granted are subject to certain performance criteria’s (“PSUs”): accordingly, compensation expense for PSUs are recognized when it becomes probable that the related performance conditions have been satisfied. f. Non recurring expenses: On August 25, 2019, the Company announced the untimely death of Mr. Guy Sella, Founder, who had served as CEO and Chairman of the Board of Directors until shortly before his passing. For the three months ended September 30, 2019, the Company recognized non-recurring expenses in the amount of $8,305 related to payroll, bonus and employees acceleration of stock-based compensation related to Mr. Sella’s passing. g. Certain prior period amounts have been reclassified to conform to the current period presentation. |
BUSINESS COMBINATION
BUSINESS COMBINATION | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATION | NOTE 2:- BUSINESS COMBINATION S.M.R.E On January 24, 2019, the Company completed the acquisition of 56.8% of the outstanding common shares and voting rights of SMRE, a provider of innovative integrated powertrain technology and electronics for electric vehicles for $73,036, net of cash acquired, out of which $42,240 was paid in cash and $34,601 was paid in shares of SolarEdge common stock (the “SMRE Acquisition”). As part of the SMRE Acquisition, the Company issued 334,096 PSUs that are subject to certain performance goals and a vesting period, in the aggregate amount of $13,444 which will be expensed in the condensed consolidated statements of operation in general and administrative expenses line item (see Note 9). As of January 24, 2019 (unaudited), the fair value of the 43.2% non-controlling interests in SMRE was estimated to be $67,733. The fair value of the non-controlling interests was valued based on and at the transaction price. The primary reason for the SMRE Acquisition was to acquire technology and customer relationships and to expand and diversify the Company’s business by entering into the electric vehicles market. The Company determined that the SMRE Acquisition will be accounted for as a business combination in accordance with ASC 805 "Business Combinations". SOLAREDGE TECHNOLOGIES, INC. AND ITS SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) U.S. dollars in thousands (except share and per share data) NOTE 2:- BUSINESS COMBINATION (Cont.) During the period from the SMRE Acquisition through September 30, 2019 (unaudited), the Company purchased additional common shares of SMRE in the open market and through a tender offer in a total amount of $66,562. As of September 30, 2019 (unaudited), the Company holds 99.8% of the outstanding common shares and voting rights of SMRE and such company’s shares are delisted from the Italian Alternative Investment Market (“AIM”). The amounts of revenue and net loss of SMRE included in the Company’s condensed consolidated statements of income for the three and nine months ended September 30, 2019 (unaudited): Three months ended Nine months ended September 30, 2019 (Unaudited) Revenue $ 4,235 $ 12,485 Net loss $ 4,136 $ 11,403 The following table summarizes the preliminary estimated purchase price allocation of the business combination completed during the nine months ended September 30, 2019 (unaudited): Components of Purchase Price: Cash $ 42,240 Less cash acquired (3,805 ) Common stock 34,601 Total purchase price $ 73,036 Allocation of Purchase Price: Total net identifiable assets $ 7,947 Total identifiable intangible assets, net of deferred tax liabilities and Goodwill (1) 132,822 Non-controlling interest $ (67,733 ) Total purchase price allocation (2) $ 73,036 (1) The intangible assets consist primarily of technology, trade name and customer relationships. (2) The Company expects to complete the preliminary estimated purchase price allocation during the measurement period of one year from January 24, 2019. Fair values that are still under review include, among others, values assigned to identifiable intangible assets, goodwill, deferred income taxes and contingent liabilities. During the three months ended September 30, 2019 (unaudited), there were no acquisition-related costs. During the nine months ended September 30, 2019 (unaudited), the Company recognized acquisition-related costs of $604. The purchase price allocation for Kokam business combination completed during the year ended December 31, 2018 is still preliminary as of September 30, 2019 (unaudited). As of September 30, 2019, the Gamatronic Acquisition purchase price allocation is final. The following table represents the pro-forma (unaudited) condensed consolidated statements of income as if all acquisitions completed during the year ended December 31, 2018 and the nine months ended September 30, 2019 (unaudited), had been included in the condensed consolidated statements of income of the Company for the three and nine months ended September 30, 2019 (unaudited) and 2018 (unaudited): SOLAREDGE TECHNOLOGIES, INC. AND ITS SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) U.S. dollars in thousands (except share and per share data) NOTE 2:- BUSINESS COMBINATION (Cont.) Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 (Unaudited) (Unaudited) Revenue $ 410,556 $ 254,433 $ 1,008,509 $ 734,758 Net income $ 41,724 $ 39,748 $ 91,247 $ 95,411 The pro-forma results have been calculated after applying the Company’s accounting policies and adjusting the results of all acquisitions to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property, plant and equipment and intangible assets had been applied since the acquisitions date, together with the consequential tax effects. The pro-forma results are based on estimates and assumptions, which the Company believes are reasonable. The pro-forma results are not the results that would have been realized had the acquisitions actually occurred on January 1, 2018 and 2019, and are not necessarily indicative of the Company’s condensed consolidated statements of income in future periods. |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | NOTE 3:- INTANGIBLE ASSETS AND GOODWILL Acquired intangible assets and goodwill consisted of the following: As of September 30, 2019 As of December 31, 2018 (Unaudited) Intangible assets with finite lived: Current technology $ 28,775 $ 30,821 Customer relationships 3,640 3,857 Trade names 3,456 3,721 Patents 1,400 1,400 Gross intangible assets 37,271 39,799 Less - accumulated amortization (4,538 ) (1,295 ) Total intangible assets, net 32,733 38,504 Goodwill: Goodwill from business combinations 34,874 34,445 Foreign currency translation (2,282 ) Goodwill 32,592 34,874 Intangible assets with finite lived, net and goodwill resulted from SMRE Acquisition 135,470 - Total Intangible assets with finite lived, net and goodwill $ 200,795 $ 73,378 SOLAREDGE TECHNOLOGIES, INC. AND ITS SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) U.S. dollars in thousands (except share and per share data) NOTE 3:- INTANGIBLE ASSETS AND GOODWILL (Cont.) Amortization expenses for the three months ended September 30, 2019 (unaudited) and 2018 (unaudited) were $2,619 and $332, respectively. Amortization expenses for the nine months ended September 30, 2019 (unaudited) and 2018 (unaudited) were $7,514 and $404, respectively. The reported amount of net acquisition-related intangible assets and goodwill can fluctuate due to the impact of changes in foreign currency exchange rates on intangible assets and goodwill not denominated in U.S. dollars. Acquired finite-lived intangible assets are amortized on a straight-line basis or accelerated method over the estimated useful lives of the assets. The Company will amortize its finite-lived intangible assets over a period of 2-13 years. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 4:- INVENTORIES September 30, 2019 December 31, 2018 (Unaudited) Raw materials $ 65,495 $ 39,380 Work in process 22,549 18,115 Finished goods 46,239 84,024 $ 134,283 $ 141,519 |
WARRANTY OBLIGATIONS
WARRANTY OBLIGATIONS | 9 Months Ended |
Sep. 30, 2019 | |
Product Warranties Disclosures [Abstract] | |
WARRANTY OBLIGATIONS | NOTE 5:- WARRANTY OBLIGATIONS Changes in the Company’s product warranty obligations for the nine months ended September 30, 2019 (unaudited) and 2018 (unaudited) were as follows: Nine months ended September 30, 2019 2018 (Unaudited) Balance, at beginning of period $ 121,826 $ 78,811 Additions and adjustments to cost of revenues 79,791 47,819 Usage and current warranty expenses (30,263 ) (18,911 ) Balance at end of period 171,354 107,719 Less current portion (45,887 ) (21,660 ) Long term portion $ 125,467 $ 86,059 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 6:- FAIR VALUE MEASUREMENTS In accordance with ASC 820, the Company measures its cash equivalents, foreign currency derivative contracts, and marketable securities, at fair value using the market approach valuation technique. Cash equivalents and marketable securities are classified within Level 1 or Level 2. This is because these assets are valued using quoted market prices or alternative pricing sources and models utilizing market observable inputs. Earn-out provision is classified within the Level 3 value hierarchy, as the valuation is based on unobservable inputs which are supported by little or no market activity. The following table sets forth the Company’s assets that were measured at fair value as of September 30, 2019 (unaudited) and December 31, 2018, by level within the fair value hierarchy: Fair value measurements as of Description Fair Value Hierarchy September 30, 2019 December 31, 2018 (Unaudited) Measured at fair value on a recurring basis: Assets: Cash equivalents: Money market mutual funds Level 1 $ 18,004 $ 1,767 Short-term marketable securities: Corporate bonds Level 2 85,343 110,385 Governmental bonds Level 2 - 8,295 Long-term marketable securities: Corporate bonds Level 2 91,477 74,256 Governmental bonds Level 2 1,394 - Liabilities Short-term Earn-out provision Level 3 (348 ) - Long-term Earn-out provision Level 3 $ (523 ) $ (332 ) |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2019 | |
Lessee Disclosure [Abstract] | |
LEASES | NOTE 7:- LEASES The Company leases offices, plants and vehicles under operating and finance leases. For leases with terms greater than 12 months, the Company records the related asset and liability at the present value of lease payments according to their term. Several of the Company’s leases include renewal options and some have termination options that are factored into the Company’s determination of the lease payments when appropriate. The Company estimates the incremental borrowing rate in order to discount the lease payments based on the information available at the lease commencement date. SOLAREDGE TECHNOLOGIES, INC. AND ITS SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) U.S. dollars in thousands (except share and per share data) NOTE 7:- LEASES (cont.) The following table summarizes the Company’s lease-related assets and liabilities recorded on the condensed consolidated balance sheet: Classification on the condensed consolidated Balance Sheet As of September 30, 2019 (Unaudited) Assets Operating lease assets, net of lease incentive obligation Operating lease right-of-use assets $ 34,601 Finance lease assets Property, plant and equipment, net 1,471 Total lease assets $ 36,072 Liabilities Operating and finance leases short term Accrued expenses and other current liabilities $ 9,451 Operating leases long term Operating lease liabilities 29,117 Finance leases long term Other non-current liabilities Total lease liabilities $ 39,442 Weighted average remaining lease term in years Operating leases 4.71 Finance leases 7.51 Weighted average annual discount rate Operating leases 1.45 % Finance leases 2.85 % The following table presents certain information related to the lease costs for operating and finance leases: Three months ended Nine months ended September 30, 2019 (Unaudited) Finance lease cost Amortization of leased assets $ 20 $ 73 Interest on lease liabilities 12 43 Operating lease cost 2,517 7,132 Total lease cost $ 2,549 $ 7,248 SOLAREDGE TECHNOLOGIES, INC. AND ITS SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) U.S. dollars in thousands (except share and per share data) NOTE 7:- LEASES (cont.) The following table presents supplemental cash flow information related to the lease costs for operating and finance leases: Three months ended Nine months ended September 30, 2019 (Unaudited) Cash paid for amounts included in measurement of lease liabilities Operating cash flows for operating and finance leases $ 2,560 $ 7,175 Financing cash flows for finance leases $ 1,248 $ 1,248 The following table reconciles the undiscounted cash flows for each of the first five years and total of the remaining years of the operating and finance lease liabilities recorded on the condensed consolidated balance sheets (unaudited): Operating Lease Finance Leases 2019 $ 2,735 $ 22 2020 9,691 88 2021 8,384 88 2022 7,528 88 2023 6,517 88 Thereafter 5,410 Total lease payments 40,265 1,329 Less: amount of lease payments representing interest (1,774 ) (378 ) Present value of future lease payments 38,491 951 Less: current obligations under leases (9,374 ) (77 ) Long-term lease obligations $ 29,117 $ |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENT LIABILITIES | NOTE 8:- COMMITMENTS AND CONTINGENT LIABILITIES a. Guarantees: As of September 30, 2019 (unaudited), contingent liabilities exist regarding guarantees in the amount of $2,036, $57, $184, $388 and $13,353 in respect of office rent lease agreements, customs transactions, credit card limits, capital expenditure and bank loans, respectively. SOLAREDGE TECHNOLOGIES, INC. AND ITS SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) U.S. dollars in thousands (except share and per share data) NOTE 8:- COMMITMENTS AND CONTINGENT LIABILITIES (Cont.) b. Contractual purchase obligations: The Company has contractual obligations to purchase goods and raw materials. These contractual purchase obligations relate to inventories held by contract manufacturers and purchase orders initiated by the contract manufacturers and suppliers, which cannot be cancelled without penalty. The Company utilizes third parties to manufacture its products. In addition, it acquires raw materials or other goods and services, including product components, by issuing to suppliers authorizations to purchase based on its projected demand and manufacturing needs. As of September 30, 2019 (unaudited), the Company had non-cancellable purchase obligations totaling approximately $362,968 out of which the Company already recorded a provision for loss in the amount of $2,231. As of September 30, 2019 (unaudited), the Company had contractual obligations for capital expenditures totaling approximately $75,073. These commitments reflect purchases of automated assembly lines and other machinery related to the Company’s manufacturing. c. Legal claims: From time to time, the Company may be involved in various claims and legal proceedings. The Company reviews the status of each matter and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, the Company accrues a liability for the estimated loss. These accruals are reviewed at least quarterly and adjusted to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular matter. In May 2019 (unaudited), the Company received notice that Huawei Technologies Co., Ltd., a Chinese entity, has filed three lawsuits in the Guangzhou intellectual property court against the Company's two Chinese subsidiaries and its equipment manufacturer in China. The lawsuits allege infringement of three patents and ask for an injunction of manufacture, use, sale and offer for sale, and damage awards of approximately $4.3 million. In response to the lawsuits, the Company initiated invalidation proceedings against Huawei’s three patents. The Company believes that it has meritorious defenses to the claims asserted and intends to vigorously defend against these lawsuits. In August 2019, the Company was served with a lawsuit by certain former shareholders of SMRE, against its Italian subsidiary that purchased the shares of SMRE in the tender offer which followed the SMRE Acquisition. The shareholders who tendered their shares are asking for the difference between the amount for which they tendered their shares (6 Euro per share) and 6.7 Euros per share, for awards of approximately $3 million. The Company believes it has meritorious defenses to the claims asserted and intends to vigorously defend against this lawsuit. |
STOCK CAPITAL
STOCK CAPITAL | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
STOCK CAPITAL | NOTE 9:- STOCK CAPITAL a. Common Stock: Number of shares Authorized Issued and outstanding September 30, 2019 December 31, 2018 September 30, 2019 December 31, 2018 (Unaudited) (Unaudited) Stock of $0.0001 par value: Common stock 125,000,000 125,000,000 48,576,288 46,052,802 b. Stock Incentive plans: The Company’s 2007 Global Incentive Plan (the “2007 Plan”) was adopted by the board of directors on August 30, 2007. On March 31, 2015, once the Company completed its Initial Public Offering (“IPO”), the 2007 Plan was terminated and no further awards will be granted thereunder. All outstanding awards are continuing to be governed by their existing terms and 379,358 available options for future grant were transferred to the Company’s 2015 Global Incentive Plan (the “2015 Plan”) and are reserved for future issuances under the 2015 plan. The 2015 Plan became effective upon the consummation of the IPO. The 2015 Plan provides for the grant of options, RSUs and other stock-based awards to directors, employees, officers, and consultants of the Company and its Subsidiaries. As of September 30, 2019 (unaudited), a total of 10,383,357 shares of common stock were reserved for issuance under the 2015 Plan (the “Share Reserve”). The Share Reserve will automatically increase on January 1st of each year during the term of the 2015 Plan commencing on January 1st of the year following the year in which the 2015 Plan becomes effective in an amount equal to five percent (5%) of the total number of shares of capital stock outstanding on December 31st of the preceding calendar year; provided, however, that our board of directors may determine that there will not be a January 1st increase in the Share Reserve in a given year or that the increase will be less than five percent (5%) of the shares of capital stock outstanding on the preceding December 31st. The aggregate maximum number of shares of common stock that may be issued on the exercise of incentive stock options is ten million (10,000,000). As of September 30, 2019 (unaudited), an aggregate of 8,686,589 shares of common stock are still available for future grant under the 2015 Plan. SOLAREDGE TECHNOLOGIES, INC. AND ITS SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) U.S. dollars in thousands (except share and per share data) NOTE 9:- STOCK CAPITAL (Cont.) c. Options granted to employees and directors: A summary of the activity in the share options granted to employees and directors for the nine months ended September 30, 2019 (unaudited) and related information follows: Number of Options Weighted average exercise price Weighted average remaining contractual term in years Aggregate intrinsic Value Outstanding as of December 31, 2018 2,401,893 11.04 6.19 58,323 Granted 267,852 36.15 Exercised (377,685 ) 6.40 Forfeited and expired (11,324 ) 13.84 Outstanding as of September 30, 2019 2,280,736 14.74 6.07 157,318 Vested and expected to vest as of September 30, 2019 2,253,031 14.61 6.04 155,705 Exercisable as of September 30, 2019 1,910,609 12.21 5.65 136,632 The aggregate intrinsic value represents the total intrinsic value (the difference between the fair value of the Company’s common stock as of the last day of each period and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on the last day of each period. The total intrinsic value of options exercised during the nine months ended September 30, 2019 (unaudited) was $23,907. The weighted average grant date fair values of options granted to employees and executive directors during the nine months ended September 30, 2019 (unaudited) was $19.83. d. A summary of the activity in the RSUs (excluding PSUs) granted to employees and members of the board of Number of RSUs Weighted average grant date fair value Unvested as of December 31, 2018 2,807,232 34.40 Granted 608,112 51.55 Vested (858,914 ) 32.12 Forfeited (225,800 ) 38.14 Unvested as of September 30, 2019 (unaudited) 2,330,630 39.35 SOLAREDGE TECHNOLOGIES, INC. AND ITS SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) U.S. dollars in thousands (except share and per share data) NOTE 9:- STOCK CAPITAL (Cont.) As part of the SMRE Acquisition (unaudited), the Company granted 334,096 PSUs that are subject to certain performance goals and a vesting period. The PSUs grant date fair value is $40.24. During the nine months ended September 30, 2019 (unaudited), the Company recognized expenses in the amount of $2,521 related to PSU’S vesting that were expensed in the condensed consolidated statement of operations in general and administrative expenses line item. e. Options and RSUs issued to non-employee consultants: The Company has granted options and RSUs to purchase common shares to non-employee consultants as of September 2019 (unaudited) as follows: Issuance Date Outstanding as of September 30, 2019 Exercise price Exercisable as of September 30, 2019 Options exercisable through 2014 5,249 $3.51 - $5.01 5,137 October 29, 2024 2016 3,084 $0.00 - $15.34 - September 21, 2026 2017 10,376 $0.00 - $13.70 - March 15, 2027 2018 16,012 $0.00 - 2019 13,912 $0.00 - 48,633 5,137 The Company had accounted for its options and RSUs granted to non-employee consultants under the fair value method of ASC 505-50 (“Equity-Based Payments to Non-Employees”). In connection with the grant of stock options and RSUs to non-employee consultants, the Company recorded stock compensation expenses during the nine months ended September 30, 2019 (unaudited) and 2018 (unaudited) in the amount of $525 and $1,070, respectively. f. Employee Stock Purchase Plan (“ESPP”): The Company adopted an Employee Stock Purchase Plan (the “ESPP”) effective upon the consummation of the IPO. As of September 30, 2019 (unaudited), a total of 2,199,808 shares were reserved for issuance under this plan. The number of shares of common stock reserved for issuance under the ESPP will increase automatically on January 1st of each year, for ten years, by the lesser of 1% of the total number of shares of the Company’s common stock outstanding on December 31st of the preceding calendar year or 487,643 shares. However, the Company’s board of directors may reduce the amount of the increase in any particular year at their discretion, including a reduction to zero. The ESPP is implemented through an offering every six months. According to the ESPP, eligible employees may use up to 10% of their salaries to purchase common stock shares up to an aggregate limit of $10 per participant for every six months plan. The price of an ordinary share purchased under the ESPP is equal to 85% of the lower of the fair market value of the ordinary share on the subscription date of each offering period or on the purchase date. As of September 30, 2019 (unaudited), 460,455 common stock shares had been purchased under the ESPP. SOLAREDGE TECHNOLOGIES, INC. AND ITS SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) U.S. dollars in thousands (except share and per share data) NOTE 9:- STOCK CAPITAL (Cont.) As of September 30, 2019 (unaudited), 1,739,353 common stock shares were available for future issuance under the ESPP. In accordance with ASC No. 718, the ESPP is compensatory and as such, results in recognition of compensation cost. g. Stock-based compensation expense for employees and non-employee consultants: The Company recognized stock-based compensation expenses related to stock options, RSUs and PSUs granted to employees and non-employee consultants and ESPP in the condensed consolidated statement of income for the three and nine months ended September 30, 2019 (unaudited) and 2018 (unaudited), as follows: Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 (Unaudited) (Unaudited) Cost of revenues $ 1,691 $ 1,127 $ 4,696 $ 3,019 Research and development 4,269 2,988 11,935 7,975 Selling and marketing 2,779 2,250 7,905 6,548 General and administrative 2,628 1,585 7,907 4,385 Non-recurring expenses 6,242 - 6,242 - Total stock-based compensation expense $ 17,609 $ 7,950 $ 38,685 $ 21,927 As of September 30, 2019 (unaudited), there was a total unrecognized compensation expense of $103,421 related to non-vested stock-based compensation arrangements. These expenses are expected to be recognized during the period from October 1, 2019 through August 31, 2023. |
BASIC AND DILUTED NET EARNINGS
BASIC AND DILUTED NET EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
BASIC AND DILUTED NET EARNINGS PER SHARE | NOTE 10:- BASIC AND DILUTED NET EARNINGS PER SHARE Basic net earnings per share is computed by dividing the net earnings attributable to SolarEdge Technologies, Inc. by the weighted-average number of shares of common stock outstanding during the period. Diluted net earnings per share is computed by giving effect to all potential shares of common stock, including stock options, to the extent dilutive, all in accordance with ASC No. 260, "Earnings Per Share." 334,096 and 304,725 shares were excluded from the calculation of diluted net earnings per share due to their anti-dilutive effect for the three and nine months ended September 30, 2019 (unaudited), respectively. No shares were excluded from the calculation of diluted net earnings per share due to their anti-dilutive effect for the three and nine months ended September 30, 2018 (unaudited). SOLAREDGE TECHNOLOGIES, INC. AND ITS SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) U.S. dollars in thousands (except share and per share data) NOTE 10:- BASIC AND DILUTED NET EARNINGS PER SHARE (Cont.) The following table presents the computation of basic and diluted net earnings per share attributable to SolarEdge Technologies, Inc. for the periods presented (in thousands, except share and per share data): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 (Unaudited) (Unaudited) Basic EPS: Numerator: Net income $ 41,724 $ 45,643 $ 92,612 $ 115,897 Net loss (income) attributable to Non-controlling interests (97 ) - 1,159 - Net income attributable to SolarEdge Technologies, Inc. $ 41,627 $ 45,643 $ 93,771 $ 115,897 Denominator: Shares used in computing net earnings per share of common stock, basic 48,195,020 45,601,540 47,637,023 45,025,661 Diluted EPS: Numerator: Net income $ 41,724 $ 45,643 $ 92,612 $ 115,897 Net loss (income) attributable to Non-controlling interests (97 ) - 1,159 - Undistributed earnings reallocated to non-vested stockholders (270 ) - (569 ) - Net income attributable to SolarEdge Technologies, Inc. $ 41,357 $ 45,643 $ 93,202 $ 115,897 Denominator: Shares used in computing net earnings per share of common stock, basic 48,195,020 45,601,540 47,637,023 45,025,661 Weighted average effect of dilutive securities: Non-vested PSU’S (334,096 ) - (304,725 ) - Effect of stock-based awards 3,220,670 2,679,700 2,603,340 3,065,524 Shares used in computing net earnings per share of common stock, diluted 51,081,594 48,281,240 49,935,638 48,091,185 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2019 | |
Income Taxes | |
INCOME TAXES | NOTE 11:- INCOME TAXES a. Taxes on income are comprised as follows: Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 (Unaudited) (Unaudited) Current year taxes $ 10,418 $ (10,524 ) $ 29,327 $ 1,773 Deferred tax income net, and others (3,148 ) (1,771 ) (4,922 ) (4,789 ) Taxes on income (tax benefit) $ 7,270 $ (12,295 ) $ 24,405 $ (3,016 ) b. Deferred income taxes: Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax liabilities and assets are as follows: As of September 30, 2019 As of December 31, 2018 (Unaudited) Total deferred tax assets $ 28,585 $ 22,608 Total deferred tax liabilities $ (19,167 ) $ (9,408 ) Recorded as: Deferred tax assets, net $ 17,180 $ 14,699 Deferred tax liabilities, net (7,762 ) (1,499 ) Net deferred tax assets $ 9,418 $ 13,200 c. Uncertain tax positions: As of September 30, 2019 As of December 31, 2018 (Unaudited) Balance at January 1, $ 8,499 $ 579 Increases related to current year tax positions 1,371 8,499 Decreases related to prior year tax positions - (579 ) $ 9,870 $ 8,499 |
CONCENTRATION OF CREDIT RISK AN
CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS | 9 Months Ended |
Sep. 30, 2019 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS | NOTE 12:- CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS a. For the three month period ended September 30, 2019 (unaudited) and 2018 (unaudited), the Company had two and For the nine month period ended September 30, 2019 (unaudited) and 2018 (unaudited), the Company had one major customer that accounted for 17.7% and 17.3% of its condensed consolidated revenues, respectively. b. As of September 30, 2019 (unaudited) and as of December 31, 2018, one and two customers accounted for |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | NOTE 13:- SEGMENT INFORMATION The Company's chief operating decision maker (“CODM”) is our acting Chief Executive Officer who makes resource allocation decisions and assesses performance based on financial information presented on a consolidated basis. Accordingly, the Company has determined that it has a single reportable segment - the solar segment. Total segment assets include corporate assets, such as cash and cash equivalents, marketable securities and tax assets. Total segment assets reconciled to consolidated amounts are as follows: As of September 30, 2019 As of December 31, 2018 (Unaudited) Solar $ 1,266,831 $ 888,672 Non-Solar 124,139 92,358 Adjustments (53,378 ) (16,558 ) Total assets $ 1,337,592 $ 964,472 |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of Operation of Acquired Entity | Three months ended Nine months ended September 30, 2019 (Unaudited) Revenue $ 4,235 $ 12,485 Net loss $ 4,136 $ 11,403 |
Schedule of Preliminary Estimated Components and Allocations of Combined Purchase Prices | The following table summarizes the preliminary estimated purchase price allocation of the business combination completed during the nine months ended September 30, 2019 (unaudited): Components of Purchase Price: Cash $ 42,240 Less cash acquired (3,805 ) Common stock 34,601 Total purchase price $ 73,036 Allocation of Purchase Price: Total net identifiable assets $ 7,947 Total identifiable intangible assets, net of deferred tax liabilities and Goodwill (1) 132,822 Non-controlling interest $ (67,733 ) Total purchase price allocation (2) $ 73,036 (1) The intangible assets consist primarily of technology, trade name and customer relationships. (2) The Company expects to complete the preliminary estimated purchase price allocation during the measurement period of one year from January 24, 2019. Fair values that are still under review include, among others, values assigned to identifiable intangible assets, goodwill, deferred income taxes and contingent liabilities. |
Schedule of Pro-forma Condensed Consolidated Statements of Operations | Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 (Unaudited) (Unaudited) Revenue $ 410,556 $ 254,433 $ 1,008,509 $ 734,758 Net income $ 41,724 $ 39,748 $ 91,247 $ 95,411 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Acquired Intangible Assets and Goodwill | As of September 30, 2019 As of December 31, 2018 (Unaudited) Intangible assets with finite lived: Current technology $ 28,775 $ 30,821 Customer relationships 3,640 3,857 Trade names 3,456 3,721 Patents 1,400 1,400 Gross intangible assets 37,271 39,799 Less - accumulated amortization (4,538 ) (1,295 ) Total intangible assets, net 32,733 38,504 Goodwill: Goodwill from business combinations 34,874 34,445 Foreign currency translation (2,282 ) Goodwill 32,592 34,874 Intangible assets with finite lived, net and goodwill resulted from SMRE Acquisition 135,470 - Total Intangible assets with finite lived, net and goodwill $ 200,795 $ 73,378 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | September 30, 2019 December 31, 2018 (Unaudited) Raw materials $ 65,495 $ 39,380 Work in process 22,549 18,115 Finished goods 46,239 84,024 $ 134,283 $ 141,519 |
WARRANTY OBLIGATIONS (Tables)
WARRANTY OBLIGATIONS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Product Warranties Disclosures [Abstract] | |
Schedule of Warranty Obligations | Nine months ended September 30, 2019 2018 (Unaudited) Balance, at beginning of period $ 121,826 $ 78,811 Additions and adjustments to cost of revenues 79,791 47,819 Usage and current warranty expenses (30,263 ) (18,911 ) Balance at end of period 171,354 107,719 Less current portion (45,887 ) (21,660 ) Long term portion $ 125,467 $ 86,059 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value | Fair value measurements as of Description Fair Value Hierarchy September 30, 2019 December 31, 2018 (Unaudited) Measured at fair value on a recurring basis: Assets: Cash equivalents: Money market mutual funds Level 1 $ 18,004 $ 1,767 Short-term marketable securities: Corporate bonds Level 2 85,343 110,385 Governmental bonds Level 2 - 8,295 Long-term marketable securities: Corporate bonds Level 2 91,477 74,256 Governmental bonds Level 2 1,394 - Liabilities Short-term Earn-out provision Level 3 (348 ) - Long-term Earn-out provision Level 3 $ (523 ) $ (332 ) |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Lessee Disclosure [Abstract] | |
Schedule of Lease-related Assets and Liabilities | Classification on the condensed consolidated Balance Sheet As of September 30, 2019 (Unaudited) Assets Operating lease assets, net of lease incentive obligation Operating lease right-of-use assets $ 34,601 Finance lease assets Property, plant and equipment, net 1,471 Total lease assets $ 36,072 Liabilities Operating and finance leases short term Accrued expenses and other current liabilities $ 9,451 Operating leases long term Operating lease liabilities 29,117 Finance leases long term Other non-current liabilities Total lease liabilities $ 39,442 Weighted average remaining lease term in years Operating leases 4.71 Finance leases 7.51 Weighted average annual discount rate Operating leases 1.45 % Finance leases 2.85 % |
Schedule of Information Related to Lease Costs for Finance and Operating Leases | Three months ended Nine months ended September 30, 2019 (Unaudited) Finance lease cost Amortization of leased assets $ 20 $ 73 Interest on lease liabilities 12 43 Operating lease cost 2,517 7,132 Total lease cost $ 2,549 $ 7,248 |
Schedule of Supplemental Cash Flow Information Related to Leases | Three months ended Nine months ended September 30, 2019 (Unaudited) Cash paid for amounts included in measurement of lease liabilities Operating cash flows for operating and finance leases $ 2,560 $ 7,175 Financing cash flows for finance leases $ 1,248 $ 1,248 |
Schedule of Operating and Finance lease liabilities | Operating Lease Finance Leases 2019 $ 2,735 $ 22 2020 9,691 88 2021 8,384 88 2022 7,528 88 2023 6,517 88 Thereafter 5,410 Total lease payments 40,265 1,329 Less: amount of lease payments representing interest (1,774 ) (378 ) Present value of future lease payments 38,491 951 Less: current obligations under leases (9,374 ) (77 ) Long-term lease obligations $ 29,117 $ |
STOCK CAPITAL (Tables)
STOCK CAPITAL (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Composition of Common Stock Capital | Number of shares Authorized Issued and outstanding September 30, 2019 December 31, 2018 September 30, 2019 December 31, 2018 (Unaudited) (Unaudited) Stock of $0.0001 par value: Common stock 125,000,000 125,000,000 48,576,288 46,052,802 |
Schedule of Stock Option Activity | Number of Options Weighted average exercise price Weighted average remaining contractual term in years Aggregate intrinsic Value Outstanding as of December 31, 2018 2,401,893 11.04 6.19 58,323 Granted 267,852 36.15 Exercised (377,685 ) 6.40 Forfeited and expired (11,324 ) 13.84 Outstanding as of September 30, 2019 2,280,736 14.74 6.07 157,318 Vested and expected to vest as of September 30, 2019 2,253,031 14.61 6.04 155,705 Exercisable as of September 30, 2019 1,910,609 12.21 5.65 136,632 |
Schedule of RSU Activity | Number of RSUs Weighted average grant date fair value Unvested as of December 31, 2018 2,807,232 34.40 Granted 608,112 51.55 Vested (858,914 ) 32.12 Forfeited (225,800 ) 38.14 Unvested as of September 30, 2019 (unaudited) 2,330,630 39.35 |
Schedule of Options and RSUs Granted to Non-Employee Consultants | Issuance Date Outstanding as of September 30, 2019 Exercise price Exercisable as of September 30, 2019 Options exercisable through 2014 5,249 $3.51 - $5.01 5,137 October 29, 2024 2016 3,084 $0.00 - $15.34 - September 21, 2026 2017 10,376 $0.00 - $13.70 - March 15, 2027 2018 16,012 $0.00 - 2019 13,912 $0.00 - 48,633 5,137 |
Schedule of Recognized Stock-Based Compensation Expense | Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 (Unaudited) (Unaudited) Cost of revenues $ 1,691 $ 1,127 $ 4,696 $ 3,019 Research and development 4,269 2,988 11,935 7,975 Selling and marketing 2,779 2,250 7,905 6,548 General and administrative 2,628 1,585 7,907 4,385 Non-recurring expenses 6,242 - 6,242 - Total stock-based compensation expense $ 17,609 $ 7,950 $ 38,685 $ 21,927 |
BASIC AND DILUTED NET EARNING_2
BASIC AND DILUTED NET EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Net Earnings (Loss) Per Share | Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 (Unaudited) (Unaudited) Basic EPS: Numerator: Net income $ 41,724 $ 45,643 $ 92,612 $ 115,897 Net loss (income) attributable to Non-controlling interests (97 ) - 1,159 - Net income attributable to SolarEdge Technologies, Inc. $ 41,627 $ 45,643 $ 93,771 $ 115,897 Denominator: Shares used in computing net earnings per share of common stock, basic 48,195,020 45,601,540 47,637,023 45,025,661 Diluted EPS: Numerator: Net income $ 41,724 $ 45,643 $ 92,612 $ 115,897 Net loss (income) attributable to Non-controlling interests (97 ) - 1,159 - Undistributed earnings reallocated to non-vested stockholders (270 ) - (569 ) - Net income attributable to SolarEdge Technologies, Inc. $ 41,357 $ 45,643 $ 93,202 $ 115,897 Denominator: Shares used in computing net earnings per share of common stock, basic 48,195,020 45,601,540 47,637,023 45,025,661 Weighted average effect of dilutive securities: Non-vested PSU’S (334,096 ) - (304,725 ) - Effect of stock-based awards 3,220,670 2,679,700 2,603,340 3,065,524 Shares used in computing net earnings per share of common stock, diluted 51,081,594 48,281,240 49,935,638 48,091,185 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Income Taxes Tables | |
Schedule of Taxes on Income | Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 (Unaudited) (Unaudited) Current year taxes $ 10,418 $ (10,524 ) $ 29,327 $ 1,773 Deferred tax income net, and others (3,148 ) (1,771 ) (4,922 ) (4,789 ) Taxes on income (tax benefit) $ 7,270 $ (12,295 ) $ 24,405 $ (3,016 ) |
Schedule of Deferred Tax Assets and Liabilities | As of September 30, 2019 As of December 31, 2018 (Unaudited) Total deferred tax assets $ 28,585 $ 22,608 Total deferred tax liabilities $ (19,167 ) $ (9,408 ) Recorded as: Deferred tax assets, net $ 17,180 $ 14,699 Deferred tax liabilities, net (7,762 ) (1,499 ) Net deferred tax assets $ 9,418 $ 13,200 |
Schedule of Uncertain Tax Positions | As of September 30, 2019 As of December 31, 2018 (Unaudited) Balance at January 1, $ 8,499 $ 579 Increases related to current year tax positions 1,371 8,499 Decreases related to prior year tax positions - (579 ) $ 9,870 $ 8,499 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Assets | As of September 30, 2019 As of December 31, 2018 (Unaudited) Solar $ 1,266,831 $ 888,672 Non-Solar 124,139 92,358 Adjustments (53,378 ) (16,558 ) Total assets $ 1,337,592 $ 964,472 |
GENERAL (Narrative) (Details)
GENERAL (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Jan. 24, 2019 | Oct. 17, 2018 | |
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||
Non-recurring expenses | $ 8,305 | $ 8,305 | |||||
Accounts Payable [Member] | |||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||
Concentration risk (as a percent) | 59.20% | 58.80% | |||||
Kokam [Member] | |||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||
Percentage of acquisition | 94.30% | 94.30% | 74.50% | ||||
SMRE [Member] | |||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||
Percentage of acquisition | 99.80% | 99.80% | 56.80% |
BUSINESS COMBINATION (Narrative
BUSINESS COMBINATION (Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Jan. 24, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Acquisition related costs | $ 604 | |||||
General and administrative expenses | $ 12,214 | $ 6,898 | 37,590 | $ 17,427 | ||
Non-controlling interests | $ 5,176 | 5,176 | $ 8,318 | |||
Business combination, net of cash acquired | $ 38,435 | $ 11,223 | ||||
SMRE [Member] | ||||||
Percentage of acquisition | 56.80% | 99.80% | 99.80% | |||
Amount of investment | $ 73,036 | |||||
Cash paid | 42,240 | |||||
Common shares, value, paid | $ 34,601 | |||||
Percentage of noncontrolling interest | 43.20% | |||||
Non-controlling interests | $ 67,733 | |||||
Business combination, net of cash acquired | $ 66,562 | |||||
SMRE [Member] | Options [Member] | ||||||
Number of shares granted | 334,096 | |||||
General and administrative expenses | $ 13,444 |
BUSINESS COMBINATION (Schedule
BUSINESS COMBINATION (Schedule of Operation of Acquired Entity) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Net income (loss) | $ 41,724 | $ 45,643 | $ 92,612 | $ 115,897 |
SMRE [Member] | ||||
Revenues | 4,235 | 12,485 | ||
Net income (loss) | $ 4,136 | $ 11,403 |
BUSINESS COMBINATION (Schedul_2
BUSINESS COMBINATION (Schedule of Preliminary Estimated Components and Allocations of Combined Purchase Prices) (Details) - SMRE [Member] $ in Thousands | Sep. 30, 2019USD ($) | |
Components of Purchase Price: | ||
Cash | $ 42,240 | |
Less cash acquired | (3,805) | |
Common stock | 34,601 | |
Total purchase price | 73,036 | |
Allocation of Purchase Price: | ||
Total net identifiable assets | 7,947 | |
Total identifiable intangible assets, net of deferred tax liabilities and Goodwill | 132,822 | [1] |
Non-controlling interests | (67,733) | |
Total purchase price allocation | $ 73,036 | [2] |
[1] | The intangible assets consist primarily of technology, trade name and customer relationships. | |
[2] | The Company expects to complete the preliminary estimated purchase price allocation during the measurement period of one year from January 24, 2019. Fair values that are still under review include, among others, values assigned to identifiable intangible assets, goodwill, deferred income taxes and contingent liabilities. |
BUSINESS COMBINATION (Schedul_3
BUSINESS COMBINATION (Schedule of Pro-forma Condensed Consolidated Statements of Operations) (Details) - SMRE [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Business Acquisition [Line Items] | ||||
Revenue | $ 410,556 | $ 254,433 | $ 1,008,509 | $ 734,758 |
Net income | $ 41,724 | $ 39,748 | $ 91,247 | $ 95,411 |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expenses | $ 2,619 | $ 332 | $ 7,514 | $ 404 |
Minimum [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived intangible assets estimated useful lives of assets | 2 years | |||
Maximum [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived intangible assets estimated useful lives of assets | 13 years |
INTANGIBLE ASSETS AND GOODWIL_3
INTANGIBLE ASSETS AND GOODWILL (Schedule of Acquired Intangible Assets) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Intangible assets with finite lived: | ||
Gross intangible assets | $ 37,271 | $ 39,799 |
Less - accumulated amortization | (4,538) | (1,295) |
Total intangible assets, net | 32,733 | 38,504 |
Goodwill: | ||
Goodwill from business combinations | 34,874 | 34,445 |
Foreign currency translation | (2,282) | 429 |
Goodwill | 32,592 | 34,874 |
Intangible assets with finite lived, net and goodwill resulted from SMRE Acquisition | 135,470 | |
Total Intangible assets with finite lived, net and goodwill | 200,795 | 73,378 |
Current technology [Member] | ||
Intangible assets with finite lived: | ||
Gross intangible assets | 28,775 | 30,821 |
Customer Relationships [Member] | ||
Intangible assets with finite lived: | ||
Gross intangible assets | 3,640 | 3,857 |
Trade names [Member] | ||
Intangible assets with finite lived: | ||
Gross intangible assets | 3,456 | 3,721 |
Patents [Member] | ||
Intangible assets with finite lived: | ||
Gross intangible assets | $ 1,400 | $ 1,400 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 65,495 | $ 39,380 |
Work in process | 22,549 | 18,115 |
Finished goods | 46,239 | 84,024 |
Inventories, net | $ 134,283 | $ 141,519 |
WARRANTY OBLIGATIONS (Details)
WARRANTY OBLIGATIONS (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Changes in the Company's product warranty liability | ||
Balance, at beginning of period | $ 121,826 | $ 78,811 |
Additions and adjustments to cost of revenues | 79,791 | 47,819 |
Usage and current warranty expenses | (30,263) | (18,911) |
Balance, at end of period | 171,354 | 107,719 |
Less current portion | (45,887) | (21,660) |
Long term portion | $ 125,467 | $ 86,059 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Level 1 [Member] | Money Market Funds [Member] | ||
Fair value of assets | $ 18,004 | $ 1,767 |
Level 2 [Member] | Short-term corporate bonds [Member] | ||
Fair value of assets | 85,343 | 110,385 |
Level 2 [Member] | Short-term governmental bonds [Member] | ||
Fair value of assets | 8,295 | |
Level 2 [Member] | Long-term corporate bonds [Member] | ||
Fair value of assets | 91,477 | 74,256 |
Level 2 [Member] | Long-term governmental bonds [Member] | ||
Fair value of assets | 1,394 | |
Level 3 [Member] | Long-term Earn-out provision [Member] | ||
Fair value of liabilities | (523) | (332) |
Level 3 [Member] | Short-term Earn-out provision [Member] | ||
Fair value of liabilities | $ (348) |
LEASES (Schedule of Lease-relat
LEASES (Schedule of Lease-related Assets and Liabilities) (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Assets | ||
Operating lease assets, net of lease incentive obligation | $ 34,601 | |
Finance lease assets | 1,471 | |
Total lease assets | 36,072 | |
Liabilities | ||
Operating and finance leases short term | 9,451 | |
Operating leases long term | 29,117 | |
Finance leases long term | 874 | |
Total lease liabilities | $ 39,442 | |
Operating leases | 4 years 8 months 15 days | |
Finance leases | 7 years 6 months 3 days | |
Operating leases | 1.45% | |
Finance leases | 2.85% |
LEASES (Schedule of Information
LEASES (Schedule of Information Related to Lease Costs for Finance and Operating Leases) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Finance lease cost | ||
Amortization of leased assets | $ 20 | $ 73 |
Interest on lease liabilities | 12 | 43 |
Operating lease cost | 2,517 | 7,132 |
Total lease cost | $ 2,549 | $ 7,248 |
LEASES (Schedule of Supplementa
LEASES (Schedule of Supplemental Cash Flow Information Related to Leases) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Cash paid for amounts included in measurement of lease liabilities | ||
Operating cash flows for operating and finance leases | $ 2,560 | $ 7,175 |
Financing cash flows for finance leases | $ 1,248 | $ 1,248 |
LEASES (Schedule of Operating a
LEASES (Schedule of Operating and Finance lease liabilities) (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Operating leases | |
2019 | $ 2,735 |
2020 | 9,691 |
2021 | 8,384 |
2022 | 7,528 |
2023 | 6,517 |
Thereafter | 5,410 |
Total lease payments | 40,265 |
Less: amount of lease payments representing interest | (1,774) |
Present value of future lease payments | 38,491 |
Less: current obligations under leases | (9,374) |
Long-term lease obligations | 29,117 |
Finance lease | |
2019 | 22 |
2020 | 88 |
2021 | 88 |
2022 | 88 |
2023 | 88 |
Thereafter | 955 |
Total lease payments | 1,329 |
Less: amount of lease payments representing interest | (378) |
Present value of future lease payments | 951 |
Less: current obligations under leases | (77) |
Long-term lease obligations | $ 874 |
COMMITMENTS AND CONTINGENT LI_2
COMMITMENTS AND CONTINGENT LIABILITIES (Details) $ in Thousands | 1 Months Ended | 9 Months Ended | |
Aug. 31, 2019USD ($) | Aug. 31, 2019€ / shares | Sep. 30, 2019USD ($) | |
Non-cancelable purchase obligations | $ 362,968 | ||
Provision for contractual inventory purchase obligations | 2,231 | ||
Contractual obligations for capital expenditures | 75,073 | ||
Lawsuit claims | 4,300 | ||
SMRE [Member] | |||
Difference amount of tendered shares for shareholders of SMRE | $ 3,000 | ||
SMRE [Member] | Maximum [Member] | |||
Difference amount per share of tendered shares for shareholders of SMRE | € / shares | € 6.7 | ||
SMRE [Member] | Minimum [Member] | |||
Difference amount per share of tendered shares for shareholders of SMRE | € / shares | € 6 | ||
Office Rent Lease Agreements [Member] | |||
Guarantees amount | 2,036 | ||
Customs Transactions [Member] | |||
Guarantees amount | 57 | ||
Credit Card Limits [Member] | |||
Guarantees amount | 184 | ||
Capital expenditure [Member] | |||
Guarantees amount | 388 | ||
Bank loans [Member] | |||
Guarantees amount | $ 13,353 |
STOCK CAPITAL (Narrative) (Deta
STOCK CAPITAL (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation | $ 38,685 | $ 21,927 | ||
Unrecognized compensation expense | $ 103,421 | 103,421 | ||
General and administrative expenses | $ 12,214 | $ 6,898 | 37,590 | 17,427 |
Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Intrinsic value of options exercised | $ 23,907 | |||
Weighted average grant date fair value of options granted | $ 19.83 | |||
Stock-based compensation | $ 525 | $ 1,070 | ||
Options [Member] | SMRE [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average grant date fair value of options granted | $ 40.24 | |||
Number of shares granted | 334,096 | |||
General and administrative expenses | $ 2,521 | |||
Maximum [Member] | Option [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of options available for future grant under the plan | 10,000,000 | 10,000,000 | ||
2007 Plan, Transferred to 2015 Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of options available for future grant under the plan | 379,358 | 379,358 | ||
2015 Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of options reserved for issuance under the plan | 10,383,357 | 10,383,357 | ||
Number of options available for future grant under the plan | 8,686,589 | 8,686,589 | ||
2015 Plan [Member] | Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Annual increase percentage | 5.00% | |||
ESPP [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of options reserved for issuance under the plan | 2,199,808 | 2,199,808 | ||
Number of options available for future grant under the plan | 1,739,353 | 1,739,353 | ||
Maximum number of excess shares authorized | 487,643 | 487,643 | ||
Number of Common stock purchased | 460,455 | |||
Maximum percentage of salary | 10.00% | 10.00% | ||
Maximum amount authorized per person | $ 10 | $ 10 | ||
Maximum percentage of common stock | 85.00% | |||
ESPP [Member] | Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Annual increase percentage | 1.00% |
STOCK CAPITAL (Schedule of Comp
STOCK CAPITAL (Schedule of Composition of Common Stock Capital) (Details) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Common stock capital | ||
Par value | $ 0.0001 | $ 0.0001 |
Authorized | 125,000,000 | 125,000,000 |
Common stock, issued shares | 48,576,288 | 46,052,802 |
Common stock, outstanding shares | 48,576,288 | 46,052,802 |
STOCK CAPITAL (Schedule of Stoc
STOCK CAPITAL (Schedule of Stock Option Activity) (Details) - Option [Member] - Employees and Members of Board of Directors [Member] $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($)$ / sharesshares | |
Number of Options | |
Outstanding as of December 31, 2018 | shares | 2,401,893 |
Granted | shares | 267,852 |
Exercised | shares | (377,685) |
Forfeited and expired | shares | (11,324) |
Outstanding as of September 30, 2019 | shares | 2,280,736 |
Vested and expected to vest as of September 30, 2019 | shares | 2,253,031 |
Exercisable as of September 30, 2019 | shares | 1,910,609 |
Weighted average exercise price | |
Outstanding as of December 31, 2018 | $ / shares | $ 11.04 |
Granted | $ / shares | 36.15 |
Exercised | $ / shares | 6.40 |
Forfeited and expired | $ / shares | 13.84 |
Outstanding as of September 30, 2019 | $ / shares | 14.74 |
Vested and expected to vest as of September 30, 2019 | $ / shares | 14.61 |
Exercisable as of September 30, 2019 | $ / shares | $ 12.21 |
Weighted average remaining contractual term in years | |
Outstanding as of December 31, 2018 | 6 years 2 months 8 days |
Ountstanding as of September 30, 2019 | 6 years 25 days |
Vested and expected to vest as of September 30, 2019 | 6 years 14 days |
Exercisable as of September 30, 2019 | 5 years 7 months 24 days |
Aggregate intrinsic Value | |
Outstanding as of December 31, 2018 | $ | $ 58,323 |
Outstanding as of September 30, 2019 | $ | 157,318 |
Vested and expected to vest as of September 30, 2019 | $ | 155,705 |
Exercisable as of September 30, 2019 | $ | $ 136,632 |
STOCK CAPITAL (Schedule of RSU
STOCK CAPITAL (Schedule of RSU Activity) (Details) - Restricted Stock Units (RSUs) [Member] - Employees and Members of Board of Directors [Member] | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Number of RSUs | |
Unvested as of December 31, 2018 | shares | 2,807,232 |
Granted | shares | 608,112 |
Vested | shares | (858,914) |
Forfeited | shares | (225,800) |
Unvested as of September 30, 2019 (unaudited) | shares | 2,330,630 |
Weighted average grant date fair value | |
Unvested as of December 31, 2018 | $ / shares | $ 34.40 |
Granted | $ / shares | 51.55 |
Vested | $ / shares | 32.12 |
Forfeited | $ / shares | 38.14 |
Unvested as of September 30, 2019 (unaudited) | $ / shares | $ 39.35 |
STOCK CAPITAL (Schedule of Opti
STOCK CAPITAL (Schedule of Options and RSUs Granted to Non-Employee Consultants) (Details) - Options And RSUs [Member] - Nonemployee Consultants [Member] | Sep. 30, 2019$ / sharesshares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding at the end of the period | 48,633 |
Exercisable at the end of the period | 5,137 |
2014 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding at the end of the period | 5,249 |
Exercisable at the end of the period | 5,137 |
2014 [Member] | Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price | $ / shares | $ 3.51 |
2014 [Member] | Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price | $ / shares | $ 5.01 |
2016 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding at the end of the period | 3,084 |
Exercisable at the end of the period | |
2016 [Member] | Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price | $ / shares | $ 0 |
2016 [Member] | Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price | $ / shares | $ 15.34 |
2017 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding at the end of the period | 10,376 |
Exercisable at the end of the period | |
2017 [Member] | Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price | $ / shares | $ 0 |
2017 [Member] | Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price | $ / shares | $ 13.70 |
2018 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding at the end of the period | 16,012 |
Exercise price | $ / shares | $ 0 |
Exercisable at the end of the period | |
2019 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding at the end of the period | 13,912 |
Exercise price | $ / shares | $ 0 |
Exercisable at the end of the period |
STOCK CAPITAL (Schedule of Reco
STOCK CAPITAL (Schedule of Recognized Stock-Based Compensation Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | $ 17,609 | $ 7,950 | $ 38,685 | $ 21,927 |
Cost of revenues [Member] | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | 1,691 | 1,127 | 4,696 | 3,019 |
Research and development [Member] | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | 4,269 | 2,988 | 11,935 | 7,975 |
Selling and marketing [Member] | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | 2,779 | 2,250 | 7,905 | 6,548 |
General and administrative [Member] | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | 2,628 | 1,585 | 7,907 | 4,385 |
Non-recurring expenses [Member] | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | $ 6,242 | $ 6,242 |
BASIC AND DILUTED NET EARNING_3
BASIC AND DILUTED NET EARNINGS PER SHARE (Schedule of Computation of Basic and Diluted Net Earnings (Loss) Per Share) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Numerator: | ||||||||
Net income | $ 41,724 | $ 45,643 | $ 92,612 | $ 115,897 | ||||
Net loss (income) attributable to Non-controlling interests | (97) | 1,159 | ||||||
Net income attributable to SolarEdge Technologies, Inc. | $ 41,627 | $ 33,128 | $ 19,016 | $ 45,643 | $ 34,568 | $ 35,686 | $ 93,771 | $ 115,897 |
Denominator: | ||||||||
Shares used in computing net earnings per share of common stock, basic | 48,195,020 | 45,601,540 | 47,637,023 | 45,025,661 | ||||
Numerator: | ||||||||
Net income | $ 41,724 | $ 45,643 | $ 92,612 | $ 115,897 | ||||
Net loss attributable to Non-controlling interests | (97) | 1,159 | ||||||
Undistributed earnings reallocated to non-vested stockholders | (270) | (569) | ||||||
Net income attributable to SolarEdge Technologies, Inc. | $ 41,357 | $ 45,643 | $ 93,202 | $ 115,897 | ||||
Denominator: | ||||||||
Shares used in computing net earnings per share of common stock, basic | 48,195,020 | 45,601,540 | 47,637,023 | 45,025,661 | ||||
Weighted average effect of dilutive securities: | ||||||||
Non-vested PSU'S | (334,096) | (304,725) | ||||||
Effect of stock-based awards | 3,220,670 | 2,679,700 | 2,603,340 | 3,065,524 | ||||
Shares used in computing net earnings per share of common stock, diluted | 51,081,594 | 48,281,240 | 49,935,638 | 48,091,185 |
INCOME TAXES (Schedule of Taxes
INCOME TAXES (Schedule of Taxes on Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Taxes Schedule Of Taxes On Income Details | ||||
Current year taxes | $ 10,418 | $ (10,524) | $ 29,327 | $ 1,773 |
Deferred tax income net, and others | (3,148) | (1,771) | (4,922) | (4,789) |
Taxes on income (tax benefit) | $ 7,270 | $ (12,295) | $ 24,405 | $ (3,016) |
INCOME TAXES (Schedule of Defer
INCOME TAXES (Schedule of Deferred Tax Liabilities And Assets) (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Deferred tax assets, net: | ||
Total deferred tax assets | $ 28,585 | $ 22,608 |
Total deferred tax liabilities | (19,167) | (9,408) |
Recorded as: | ||
Deferred tax assets, net | 17,180 | 14,699 |
Deferred tax liabilities, net | (7,762) | (1,499) |
Net deferred tax assets | $ 9,418 | $ 13,200 |
INCOME TAXES (Schedule of Uncer
INCOME TAXES (Schedule of Uncertain Tax Positions) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Balance at January 1, | $ 8,499 | $ 579 |
Increases related to current year tax positions | 1,371 | 8,499 |
Decreases related to prior year tax positions | (579) | |
Closing balance | $ 9,870 | $ 8,499 |
CONCENTRATION OF CREDIT RISK _2
CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Revenues [Member] | One Major Customers [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 32.30% | 15.70% | 17.70% | 17.30% | |
Accounts Receivable [Member] | Two Major Customers [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 24.50% | 41.30% |
SEGMENT INFORMATION (Schedule o
SEGMENT INFORMATION (Schedule of Segment Assets) (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Total assets | $ 1,337,592 | $ 964,472 |
Solar [Member] | ||
Total assets | 1,266,831 | 888,672 |
Non-solar [Member] | ||
Total assets | 124,139 | 92,358 |
Adjustments [Member] | ||
Total assets | $ (53,378) | $ (16,558) |