☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 20-5338862 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) | |
1 HaMada Street | ||
Herziliya Pituach, Israel | 4673335 | |
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common stock, par value $0.0001 per share | SEDG | NASDAQ (Global Select Market) |
☒ Large accelerated filer | ☐ Accelerated filer | ☐ Non-accelerated filer | ☐ Smaller reporting company | |||
☐ Emerging growth company |
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
• | future demand for renewable energy including solar energy solutions; |
• | our ability to forecast demand for our products accurately and to match production to such demand as well as our customers' ability to forecast demand based on inventory levels; |
• | macroeconomic conditions in our domestic and international markets, as well as inflation concerns, rising interest rates and recessionary concerns; |
• | the retail price of electricity derived from the utility grid or alternative energy sources; |
• | interest rates and supply of capital in the global financial markets in general and in the solar market specifically; |
• | competition, including introductions of power optimizer, inverter and solar photovoltaic (“PV”) system monitoring products by our competitors; |
• | developments in alternative technologies or improvements in distributed solar energy generation; |
• | historic cyclicality of the solar industry and periodic downturns; |
• | product quality or performance problems in our products; |
• | shortages, delays, price changes, or cessation of operations or production affecting our suppliers of key components; |
• | delays, disruptions, and quality control problems in manufacturing; |
• | our dependence upon a small number of outside contract manufacturers and limited or single source suppliers; |
• | capacity constraints, delivery schedules, manufacturing yields, and costs of our contract manufacturers and availability of components; |
• | disruption in our global supply chain and rising prices of oil and raw materials as a result of the conflict between Russia and Ukraine; |
• | performance of distributors and large installers in selling our products; |
• | consolidation in the solar industry among our customers and distributors; |
• | our ability to manage effectively the growth of our organization and expansion into new markets; |
• | Our ability to recognize expected benefits from restructuring plans |
• | any unauthorized access to, disclosure, or theft of personal information or unauthorized access to our network or other similar cyber incidents; |
• | our ability to integrate acquired businesses; |
• | disruption to our business operations due to the evolving state of war in Israel and political conditions related to the Israeli government's plans to significantly reduce the Israeli Supreme Court's judicial oversight; |
• | our dependence on ocean transportation to timely deliver our products in a cost-effective manner; |
• | fluctuations in global currency exchange rates; |
• | the impact of evolving legal and regulatory requirements related to emerging environmental, social and governance requirements; |
• | existing and future responses to and effects of pandemics, epidemics or other health crises; |
• | changes to net metering policies or the reduction, elimination or expiration of government subsidies and economic incentives for on-grid solar energy applications; |
• | federal, state, and local regulations governing the electric utility industry with respect to solar energy; |
• | changes in tax laws, tax treaties, and regulations or the interpretation of them, including the Inflation Reduction Act; |
• | changes in the U.S. trade environment, including the imposition of import tariffs; |
• | our ability to maintain our brand and to protect and defend our intellectual property; |
• | volatility of our stock price; |
• | our customers’ financial stability, creditworthiness and debt leverage ratio; |
• | our ability to retain key personnel and attract additional qualified personnel; |
• | our ability to effectively design, launch, market, and sell new generations of our products and services; |
• | our ability to retain, and events affecting, our major customers; |
• | our ability to service our debt; and |
• | the other factors set forth under “Item 1A. Risk Factors.” |
• | Maximized PV module power output. Our Power Optimizers provide module-level, or MPPT, and real-time adjustments of current and voltage to the optimal working point of each individual PV module. This enables each PV module to continuously produce its maximum power potential independent of other modules in the same string, thus minimizing module mismatch and partial shading losses. By performing these adjustments at a very high rate, our Power Optimizers also solve the dynamic MPP losses associated with traditional inverters. |
• | Optimized architecture with economies of scale. Our system shifts certain functions of the traditional inverter to our Power Optimizers while keeping the DC to AC function and grid interaction in our inverter. As a result, our inverter is smaller, more efficient and more reliable than inverters used in traditional string inverter systems. The cost savings that we have achieved on the inverter enable our system to be priced at a cost per watt that is comparable with traditional inverter systems of leading manufacturers. As a PV system grows in size, our inverter benefits from economies of scale, making our technology viable for large commercial and small-scale utility applications. |
• | Enhanced system design flexibility. Unlike a traditional inverter system that requires each string to be the same length, use the same type of PV modules and be positioned at the same angle toward the sun, our system allows significant design flexibility by enabling the installer to place PV modules in uneven string lengths and on multiple roof facets. This design flexibility increases the amount of the available roof that can be utilized for power production. As a result, our system is significantly less prone to wasted roof space resulting from rooftop asymmetries and obstructions. |
• | Reduced balance of system (BoS) costs. Our DC optimized inverter system allows significantly longer strings to be connected to the same inverter (as compared to a traditional inverter system). This reduces the cost of cabling, fuse boxes and other ancillary electric components. These factors result in easier installations with shorter design times and a lower initial cost per watt, while enabling larger installations per rooftop. |
• | Continuous monitoring and control to reduce operation and maintenance costs. Our cloud-based monitoring platform provides full data visibility at the module level, string level, inverter level and system level. The data can be accessed remotely by any web-enabled device, allowing comprehensive analysis, immediate fault detection and alerts. These monitoring features reduce O&M costs for the system owner by identifying and locating faults, enabling remote testing and reducing field visits. |
• | Enhanced safety. We have incorporated module-level safety mechanisms in our system to protect installers, electricians and firefighters. Each Power Optimizer is configured to reduce output to 1 volt unless the Power Optimizer receives a fail-safe signal from a functioning inverter. As a result, if the inverter is shut down (e.g., for system maintenance, due to malfunction, in the event of a fire or otherwise), the DC voltage throughout the system is reduced to a safe level. Our DC optimized inverters comply with the applicable safety requirements of the regions in which they are sold, providing incremental cost savings to installers by eliminating the need for additional hardware such as DC breakers, switches or fire-proof ducts required by traditional inverter systems. In the U.S., the SolarEdge SafeDC feature is compliant with NEC 2014 & NEC 2017 Rapid Shutdown functionality, Section 690.12. SolarEdge inverters also have a built-in safety feature designed to mitigate the effects of some arcing faults that may pose a risk of fire, in compliance with the UL1699B arc detection standard. In addition, some of the SolarEdge Power Optimizers include a "sense connect capability" which is designed to monitor Power Optimizers’ connectors, and identify improper connections and possible malfunctions for early detection and mitigation of arc risks. |
• | High reliability. Solar PV systems are typically expected to operate for at least 25 years under harsh outdoor conditions. High reliability is critical and is facilitated by systems and components that have low heat generation, solid and stable materials, and an absence of moving parts. We have designed our system to meet these stringent requirements. Our Power Optimizers’ high switching frequency allows the use of ceramic capacitors with a low, fixed rate of aging and a proven life expectancy in excess of 25 years. Further, we use automotive-grade, application-specific integrated circuits (“ASICs”) that embed many of the required electronics. This reduces the number of components and consequently the potential points of failure. |
• | DC Coupling with Energy Storage. Our DC optimized inverter system allows solar energy to be directly stored in batteries without any conversion, referred to as DC coupling, thereby eliminating energy losses that are associated with such conversions. This enables better management of energy stored in the battery, hence improving efficiency, increasing savings for the end user and increasing the overall return on investment, or, ROI. When coupled with a DC enabled EV charger, solar energy can directly charge the electric vehicle, without any AC conversion applying similar energy retention due to less conversions. |
• | Energy Management. Our residential and commercial systems feature the SolarEdge ONE energy optimization system which manages solar energy, battery storage, smart devices, and grid interaction. This smart energy management capability enables system owners to store solar energy at cost-effective times, and also control the timing of their PV energy consumption in order to increase their energy independence, take advantage of lower time-of-use rates, reduce electricity bills, and improve overall system ROI. |
• | Distributed Energy Generation. As the electric grid transitions from centralized power stations to a network of distributed, renewable energy sources, our inverter can serve as a local control system that can manage the energy resources underlying such a distributed network. Our inverters can be used to create a distributed and interactive grid that can help support grid stability. One such example is inverter-enabled charging and discharging of batteries as part of a Virtual Power Plant or VPP, to help manage the load on the grid and support grid stability. |
• | product and system performance and features; |
• | total cost of ownership (TCO); |
• | reliability and duration of product warranty; |
• | customer service and support; |
• | breadth of product line; |
• | local sales and distribution capabilities; |
• | compliance with applicable certifications and grid codes; |
• | size and financial stability of operations; and |
• | size of installed base. |
• | Powering Clean Energy: Accelerating the uptake of clean energy, delivering new smart energy, innovative solutions and improving the lifecycle impacts of our products. As a business founded upon the acceleration of clean energy, we strive to reduce our climate impact by minimizing GHG (greenhouse gas) emissions and transitioning to renewable electricity usage in our facilities. We have completed a lifecycle analysis for three of our key products, examining the carbon footprint of all product life stages and following the examination of the results of such analysis were able to highlight possible reduction opportunities. We have taken significant efforts to reduce energy and resource consumption in our sites, reducing related GHG emissions. We continue to act to recycle our e-waste. We also act to minimize landfill for all waste types, and in 2022, a total of 88% of all waste at our owned and operated sites was either recycled or recovered to energy (2023 figures are currently in examination and will be published in our upcoming sustainability report). |
• | Powering People: Maintaining leading responsible employment practices, upholding human rights and investing in communities. In 2023, we continued to expand our workforce to support SolarEdge’s business growth, and maintained responsible employment practices, including an enhanced focus on safety and on employee growth and development. We set quantitative targets and formulated multi-year programs to enhance gender equality in accordance with equal opportunities laws within our workforce and to strengthen its inclusiveness, including by reaching over 150 women in management roles. (see further details in "Human Capital" below). Also in 2023, we continued to enhance our community engagement program. Our updated program focuses on the advancement of renewable energy for environmental community value, encouraging STEM education and youth innovation and strengthening diverse populations. A prominent example is our long-term educational program, EDGEUcate, aimed to raise awareness and educate children from a young age on sustainable practices and the role of solar energy on the global efforts of decarbonization. |
• | Powering Business: Maintaining and reinforcing ethical conduct throughout our value chain, advancing climate resilience, improving the efficiency of our resource consumption and ethical sourcing of raw materials and components. Our supplier code of conduct ("SCoC"), includes provisions regarding, among others, ethics, safety, environmental protection, human rights, and fair employment. As of December 31, 2023, over 280 key suppliers have signed their acknowledgment of the SCoC terms. To date, we also conducted on-site audits of four contract manufacturers and three major raw material suppliers in connection with their compliance with the SCoC requirements, and are aiming to further expand these efforts in 2024. In addition, our conflict-minerals practices involve engaging our suppliers to evaluate the traceability of their upstream sources. |
• | Our ability to be profitable in the future. | |
• | The rapidly evolving and competitive nature of the solar industry, which makes it difficult to evaluate our future prospects. | |
• | Fluctuations in demand for solar energy solutions, including if demand for solar energy solutions does not resume growth or grows at a slower rate than anticipated, and our ability to accurately forecast customer demand. | |
• | Macroeconomic conditions in our domestic and international markets, as well as inflation concerns, instability of financial institutions, rising interest rates, and recessionary concerns. | |
• | The impact of declines in the retail price of electricity derived from the utility grid or from alternative energy sources. | |
• | The impact of increases in interest rates or tightening of the supply of capital on the ability of end-users to finance the cost of a solar PV system. | |
• | The impact of increased competition as new and existing competitors introduce power optimizers, inverters, solar PV system monitoring, batteries and other smart energy products. | |
• | Developments in alternative technologies or improvements in distributed solar energy generation. | |
• | The cyclicality of the solar industry. | |
• | Defects or performance problems in our products. | |
• | Our dependence on a small number of outside contract manufacturers, including difficulties ramping production with new contract manufacturers. | |
• | Any delays, disruptions, or quality control problems in our manufacturing operations. | |
• | Our dependence on a limited number of suppliers for key components and raw materials in our products to adequately meet anticipated demand. | |
• | Disruptions to our global supply chain and rising prices of oil and raw materials due to the conflict between Russia and Ukraine. | |
• | Our reliance on distributors and large installers to assist in selling our products, and the failure of these customers to perform as expected. | |
• | Mergers in the solar industry among our current or potential customers. | |
• | Our planned expansion into new geographic markets or new product lines or services. | |
• | Our ability to build our non-solar businesses and manage future growth effectively. | |
• | Discontinuance of our e-Mobility business, resulting in the write-off of tangible and intangible assets. |
• | Our ability to recognize expected benefits from cost reduction and restructuring. | |
• | Any unauthorized access to, disclosure, or theft of personal information we gather, store, or use. | |
• | Attempts by third parties, our employees, or our vendors to gain unauthorized access to our network or seek to compromise our products and services. | |
• | Our entry into business engagements with military bodies as our customers in the lithium-ion battery and energy storage business. | |
• | Our entry into adjacent markets through recent acquisitions and risks associated with acquisitions, including our ability to be effective in integrating such acquisitions. | |
• | Disruption to our business operations as a result of war and hostilities in Israel and other conditions in Israel that affect our operations. | |
• | The tax benefits that are available to us under Israeli law that require us to meet various conditions and may be terminated or reduced in the future, which could increase our costs and taxes. | |
• | Difficulties in enforcing a judgment of a U.S. court against our officers and directors, to assert U.S. securities laws claims in Israel, or to serve process on our officers and directors. | |
• | Our dependence on ocean transportation to deliver our products in a timely and cost-efficient manner. | |
• | Fluctuations in currency exchange rates. | |
• | Corporate social responsibility and sustainability, including the impact of evolving legal and regulatory requirements. | |
• | Complications with the design or implementation of our new ERP system. | |
• | Natural disasters, public health events, significant disruptions of information technology systems, data security breaches, or other catastrophic events. |
• | Any reduction, elimination or expiration of government subsidies and economic incentives for on-grid solar electricity applications. | |
• | Any change in or elimination of regulatory treatment, or guidance related to, or an inability to ramp up production to benefit from incentives under the IRA. | |
• | Changes to net metering policies. | |
• | Existing electric utility industry regulations and changes to regulations, which may present technical regulatory, and economic barriers to the purchase and use of solar PV systems. |
• | Our ability to protect our intellectual property and other proprietary rights. |
• | Any claims by third parties that we are infringing upon their intellectual property rights. |
• | Any claims for remuneration or royalties for assigned service invention rights by our employees. |
• | The impairment of our goodwill or other intangible assets. |
• | Volatility of our stock price. |
• | Provisions in our certificate of incorporation and by-laws that may have the effect of delaying or preventing a change of control or changes in our management. |
• | The forum selection clause contained in our certificate of incorporation. |
• | Our ability to raise the funds necessary to settle conversion of our Convertible Senior Notes or Notes in cash or to repurchase the Notes upon a fundamental change. |
• | Our ability to raise additional capital to execute on our current or future business opportunities. |
• | Our lack of plans to pay any cash dividends on our common stock in the foreseeable future. |
• | Our share repurchase program. |
• | cost competitiveness, reliability and performance of solar PV systems compared to conventional and non-solar renewable energy sources and products; |
• | competing new technologies at more competitive prices than those we offer for our products and services; |
• | availability and amount of government subsidies and incentives to support the development and deployment of solar energy solutions; |
• | the extent of deregulation in the electric power industry and broader energy industries to permit broader adoption of solar electricity generation; |
• | prices of traditional carbon-based energy sources; |
• | levels of investment by end-users of solar energy products, which tend to decrease when economic growth slows; and |
• | the emergence, continuance or success of, or increased government support for, other alternative energy generation technologies and products. |
Demand for solar energy solutions fluctuates, and if demand for solar energy solutions does not resume growth or grows at a slower rate than anticipated, or if we are unable to accurately forecast customer demand, our business and results of operations will suffer.
• | reduced demand for our products as a result of constraints on capital spending for residential solar energy systems by our customers; |
• | increased price competition for our products that may adversely affect revenue, gross margin and profitability; |
• | decreased ability to forecast operating results and make decisions about budgeting, planning and future investments; |
• | business and financial difficulties faced by our suppliers or other partners, including impacts to material costs, sales, liquidity levels, ability to continue investing in their businesses, ability to import or export goods, ability to meet development commitments and manufacturing capability; and |
• | increased overhead and production costs as a percentage of revenue. |
• | construction of a significant number of new power generation plants, including plants utilizing natural gas, nuclear, coal, renewable energy, or other generation technologies; |
• | relief of transmission constraints that enable local centers to generate energy less expensively; |
• | reductions in the price of natural gas, or alternative energy resources other than solar; |
• | utility rate adjustment and customer class cost reallocation; |
• | energy conservation technologies and public initiatives to reduce electricity consumption; |
• | development of smart-grid technologies that lower the peak energy requirements of a utility generation facility; |
• | development of new or lower-cost energy storage technologies that have the ability to reduce a customer’s average cost of electricity by shifting load to off-peak times; and |
• | development of new energy generation technologies that provide less expensive energy. |
• | cost competitiveness, reliability and performance of storage solutions, including the price of raw materials for battery cells and the manufacturing costs of battery cells, packs and containers; |
• | competing new technologies at more competitive prices than those we offer for our products and services; |
• | prices of traditional carbon-based energy sources; and |
• | the emergence, continuance or success of, or increased government support for, other alternative energy generation and storage technologies and products. |
• | the addition or loss of significant customers; |
• | changes in laws or regulations applicable to our industry, products or services; |
• | speculation about our business in the press or the investment community; |
• | price and volume fluctuations including due to general macro-economic and geopolitical changes and developments in the overall stock market; |
• | volatility in the market price and trading volume of companies in our industry or companies that investors consider comparable; |
• | share price and volume fluctuations attributable to inconsistent trading levels of our shares; |
• | our ability to protect our intellectual property and other proprietary rights; |
• | sales of our common stock by us or our significant stockholders, officers and directors; |
• | the expiration of contractual lock-up agreements; |
• | success of competitive products or services; |
• | the public’s response to press releases or other public announcements by us or others, including our filings with the Securities and Exchange Commission (the “SEC”), announcements relating to litigation or significant changes to our key personnel; |
• | the effectiveness of our internal controls over financial reporting; |
• | changes in our capital structure, such as future issuances of debt or equity securities; |
• | our entry into new markets; |
• | tax developments in the U.S., Europe, or other markets; |
• | the inclusion, exclusion, or deletion of our stock from any trading indices, such as the S&P 500 Index; |
• | conversion of all or portion of the Notes; |
• | strategic actions by us or our competitors, such as acquisitions or restructurings; and |
• | changes in accounting principles. |
• | authorizing “blank check” preferred stock that our board of directors could issue to increase the number of outstanding shares to discourage a takeover attempt; |
• | providing for a classified board of directors with staggered, three-year terms until the 2026 annual meeting of stockholders at which time all of the board members will be subject to annual elections, which, until then, could delay the ability of stockholders to change the membership of a majority of our board of directors; |
• | not providing for cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; |
• | limiting the ability of stockholders to call a special stockholder meeting; |
• | prohibiting stockholders from acting by written consent; |
• | establishing advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings; and |
• | the removal of directors only for cause and only upon the affirmative vote of the holders of at least a majority in voting power of all the then-outstanding shares of common stock of the Company entitled to vote thereon, voting together as a single class until the 2026 annual meeting of stockholders; |
• | providing that our board of directors is expressly authorized to amend, alter, rescind or repeal our by-laws. |
• | provide additional cash reserves to support our operations; |
• | invest in our research and development efforts; |
• | expand our operations into new product markets and new geographies; |
• | acquire complementary businesses, products, services or technologies; or |
• | otherwise pursue our strategic plans and respond to competitive pressures, including adjustments to our business to mitigate the effects of any tariffs that might apply to us or our industry. |
◦ | Processes designed to comply with information security standards and privacy regulations, including the European Union's General Data Protection Regulation. |
◦ | Maintenance of an ISO 27001 Information Security Management Standard certification. |
◦ | Implementation of a variety of security controls, such as firewalls, and intrusion detection systems. |
◦ | Protection against Denial-of-Service attacks which prevent legitimate use of our services. |
◦ | Security events monitoring in our security operations center. |
◦ | Development of incident response policies and procedures designed to initiate remediation and compliance activities in a timely manner. |
◦ | Implementation of data loss prevention tools. |
◦ | Implementing an ID management system to enforce granular role-based access controls. |
◦ | Performing penetration testing on cloud and app platform. |
◦ | Administration of a comprehensive cyber security awareness program to educate employees about cyber security risks and best practices. |
◦ | Retention of a third-party, independent cyber security firm to conduct cyber security assessments of our systems and procedures. |
◦ | Employment of a responsible disclosure policy, which includes a Bug Bounty Program designed to help identify and fix any potential flaws in the company’s services or products. |
◦ | A security solution designed to safeguard customer data and systems. |
◦ | Security assessments of our major vendors. |
◦ | Risk assessments by an insurance company. |
◦ | Implementation of endpoint detection and response (EDR) technology, as well as partial operational technology (OT) security measures on some of our factories, to protect our on-premises systems. |
Year ended December 31, | ||||||||
2023 | 2022 | |||||||
Inverters shipped | 1,011,890 | 1,019,307 | ||||||
Power optimizers shipped | 17,430,082 | 23,736,368 | ||||||
Megawatts shipped1 | 12,629 | 10,491 | ||||||
Megawatts hour shipped - batteries for PV applications | 744 | 889 |
Year ended December 31, | 2022 to 2023 | |||||||||||||||
2023 | 2022 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Revenues | $ | 2,976,528 | $ | 3,110,279 | $ | (133,751 | ) | (4.3 | )% | |||||||
Cost of revenues | 2,272,705 | 2,265,631 | 7,074 | 0.3 | % | |||||||||||
Gross profit | 703,823 | 844,648 | (140,825 | ) | (16.7 | ) % | ||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 321,482 | 289,814 | 31,668 | 10.9 | % | |||||||||||
Sales and marketing | 164,318 | 159,680 | 4,638 | 2.9 | % | |||||||||||
General and administrative | 146,504 | 112,496 | 34,008 | 30.2 | % | |||||||||||
Goodwill impairment | — | 90,104 | (90,104 | ) | (100 | )% | ||||||||||
Other operating expenses, net | 31,314 | 26,434 | 4,880 | 18.5 | % | |||||||||||
Total operating expenses | 663,618 | 678,528 | (14,910 | ) | (2.2 | )% | ||||||||||
Operating income | 40,205 | 166,120 | (125,915 | ) | (75.8 | ) % | ||||||||||
Financial income, net | 41,212 | 3,750 | 37,462 | 999.0 | % | |||||||||||
Other income (loss), net | (318 | ) | 7,285 | (7,603 | ) | (104.4 | )% | |||||||||
Income before income taxes | 81,099 | 177,155 | (96,056 | ) | (54.2 | ) % | ||||||||||
Income taxes | (46,420 | ) | (83,376 | ) | 36,956 | (44.3 | )% | |||||||||
Net loss from equity method investments | (350 | ) | — | (350 | ) | 100.0 | % | |||||||||
Net income | $ | 34,329 | $ | 93,779 | $ | (59,450 | ) | (63.4 | )% |
Year ended December 31, | 2022 to 2023 | |||||||||||||||
2023 | 2022 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Revenues | $ | 2,976,528 | $ | 3,110,279 | $ | (133,751 | ) | (4.3 | )% |
Year ended December 31, | 2022 to 2023 | |||||||||||||||
2023 | 2022 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Cost of revenues | $ | 2,272,705 | $ | 2,265,631 | $ | 7,074 | 0.3 | % | ||||||||
Gross profit | $ | 703,823 | $ | 844,648 | $ | (140,825 | ) | (16.7 | )% |
• | an increase in warranty expenses and warranty accruals of $70.5 million associated primarily with an increased number of products in our install base, which increases our actual spending on product warranty, and an increase in costs related to the different elements of our warranty expenses, which include the cost of the products, shipment and other related expenses, which impacts our remaining obligations for all units under warranty, including those sold in previous years; |
• | an increase of $48.1 million in inventory costs, which is mainly attributed to changes in inventory valuation, higher inventory accruals related to our initial manufacturing in Sella 2 and the write-off related to the discontinuation of the Company’s LCV e-Mobility activity, partially offset by a decrease in inventory write-off related to discontinuation of our UPS activities in the year ended December 31, 2022; |
• | an increase in personnel-related costs of $14.2 million, related to the expansion of our production, operations, and support headcount, which grew in parallel to our growing install base worldwide, as well as an increase in severance and related benefit costs as a result of the Restructuring Plan announced to adjust our manufacturing capacity and increase distribution efficiency, which includes termination of manufacturing in Mexico, reduction of manufacturing capacity in China, and discontinuation of the Company’s LCV e-Mobility activity; |
• | an increase in other costs of $11 million mainly due to the contract termination expenses related to components procurement obligations related to the discontinued LCV e-mobility activity; |
• | an increase of $9.1 million in depreciation expenses of property, plant and equipment and in expenses related to overhead costs; and |
• | an increase of $3.9 million in expenses related to consultants and sub-contractors. |
• | a decrease in direct cost of revenues sold of $97.5 million associated primarily with a decrease in the volume of product sold; |
• | a decrease in shipment and logistic costs in an aggregate amount of $42.5 million due to a decrease in the volume of shipments, a decrease in shipment rates and a decrease in expedited shipments costs; and |
• | a decrease in other production costs of $12.6 million mainly attributed to a decrease in charges from our contract manufacturers, due to manufacturing disruptions related to global supply constraints in the year ended December 31, 2022, partially offset by an increase related to ramp up costs associated with Sella 2, our Li-Ion battery cell manufacturing facility located in South Korea, as well as contract termination cost related to claims from our contract manufacturers as part of the Restructuring Plan in Mexico and China. |
• | an increase in actual warranty expenses and accruals for future warranty obligations related to our existing install base, which were divided this fiscal year by slightly lower revenues resulting in lower gross margin of 2.7%; and |
• | an increase in the inventory accrual due to the write-offs of excess inventory, write-offs of inventory related to the discontinuation of the Company’s LCV e-Mobility activity and inventory disposal related to our initial manufacturing in Sella 2 resulting in lower gross margin of 1.6%; |
Year ended December 31, | 2022 to 2023 | |||||||||||||||
2023 | 2022 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Research and development | $ | 321,482 | $ | 289,814 | $ | 31,668 | 10.9 | % |
• | an increase in personnel-related costs of $18.3 million resulting from an increase in our research and development headcount, as well as salary expenses associated with annual merit increases and employee stock-based compensation, which were partially offset by the depreciation of the NIS against the U.S. dollar. The increase in headcount reflects our continuing investment in enhancements of existing products, as well as research and development expenses associated with bringing new products to the market; |
• | an increase in expenses related to consultants and sub-contractors in the amount of $6.8 million: |
• | an increase in depreciation expenses of property and equipment in the amount of $3.4 million; and |
• | an increase in expenses related to overhead costs in the amount of $1.5 million. |
Year ended December 31, | 2022 to 2023 | |||||||||||||||
2023 | 2022 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Sales and marketing | $ | 164,318 | $ | 159,680 | $ | 4,638 | 2.9 | % |
• | an increase in expenses related to marketing activities in the amount of $2.4 million; |
• | an increase of $1.4 million in training-related expenses as a result of resuming training activities that had been previously cancelled or postponed due to Covid-19 restrictions in 2022; and |
• | an increase in expenses related to overhead costs in the amount of $1.2 million. |
Year ended December 31, | 2022 to 2023 | |||||||||||||||
2023 | 2022 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
General and administrative | $ | 146,504 | $ | 112,496 | $ | 34,008 | 30.2 | % |
• | an increase in expenses related to doubtful debt in the amount of $14.0 million; |
• | an increase in expenses related to consultants and sub-contractors in the amount of $11.5 million; |
• | an increase in personnel-related costs of $6.5 million resulting from an increase in our general and administrative headcount, as well as salary expenses associated with annual merit increases, partially offset by a decrease in employee stock-based compensation and the depreciation of the NIS against the U.S. dollar; and |
• | an increase in expenses related to overhead costs in the amount of $1.5 million. |
Year ended December 31, | 2022 to 2023 | |||||||||||||||
2023 | 2022 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Goodwill impairment | — | 90,104 | (90,104 | ) | (100 | )% |
Year ended December 31, | 2022 to 2023 | |||||||||||||||
2023 | 2022 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Other operating expenses, net | 31,314 | 26,434 | 4,880 | 18.5 | % |
• | an increase of $24.5 million in impairment of property, plant and equipment income related to the announced Restructuring Plan to adjust our manufacturing capacity and increase distribution efficiency; and |
• | an increase of $1.7 million in legal claims provision, as a result of a recent court decision against our Italian subsidiary relating to the 2019 acquisition of SolarEdge e-Mobility. |
Financial income (expenses), net
Year ended December 31, | 2022 to 2023 | |||||||||||||||
2023 | 2022 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Financial income, net | $ | 41,212 | $ | 3,750 | $ | 37,462 | 999.0 | % |
• | a gain of $24.2 million in the year ended December 31, 2023, compared to a loss of $1.5 million in 2022, as a result of fluctuations in foreign exchange rates, primarily between the Euro and NIS against the U.S dollar; and |
• | an increase of $10.6 million in interest income from marketable securities and loans to third parties. |
Year ended December 31, | 2022 to 2023 | |||||||||||||||
2023 | 2022 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Other income (loss), net | $ | (318 | ) | $ | 7,285 | $ | (7,603 | ) | (104.4 | )% |
Year ended December 31, | 2022 to 2023 | ||||||
2023 | 2022 | Change | |||||
(In thousands) | |||||||
Income taxes | $ (46,420) | $ (83,376) | $ 36,956 | (44.3)% |
• | a decrease of $5.0 million in current tax due to a decrease in profit before tax, offset by an increase in non-deductible expenses, lower tax benefits relating to stock-based compensation |
• | and an increase in our provision for uncertain tax positions; and |
• | an increase of $32.0 million in deferred tax income, mainly related to the update of the projected preferred technological enterprises tax rate change and certain write-offs items which will be tax deductible in future periods. |
Year ended December 31, | 2022 to 2023 | |||||||||||||||
2023 | 2022 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Net loss from equity method investments | $ | (350 | ) | $ | — | $ | (350 | ) | 100.0 | % |
Year ended December 31, | 2022 to 2023 | |||||||||||||||
2023 | 2022 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Net income | $ | 34,329 | $ | 93,779 | $ | (59,450 | ) | (63.4 | )% |
As a result of the factors discussed above, net income decreased by $59.5 million, or 63.4% in the year ended December 31, 2023 as compared to the year ended December 31, 2022.
Year ended December 31, | 2022 to 2023 | |||||||||||||||
2023 | 2022 | Change | ||||||||||||||
(In thousands) | ||||||||||||||||
Solar | ||||||||||||||||
Revenues | 2,815,539 | 2,921,175 | (105,636 | ) | (3.6 | )% | ||||||||||
Segment profit | 364,517 | 486,862 | (122,345 | ) | (25.1 | )% | ||||||||||
Energy Storage | ||||||||||||||||
Revenues | 83,717 | 76,325 | 7,392 | 9.7 | % | |||||||||||
Segment loss | (60,119 | ) | (13,863 | ) | (46,256 | ) | 333.7 | % | ||||||||
All other | ||||||||||||||||
Revenues | 76,438 | 112,165 | (35,727 | ) | (31.9 | )% | ||||||||||
Segment loss | (14,374 | ) | (31,274 | ) | 16,900 | (54.0 | )% | |||||||||
Not allocated to segments | ||||||||||||||||
Revenues | 834 | 614 | 220 | 35.8 | % | |||||||||||
Segment loss | (249,819 | ) | (275,605 | ) | 25,786 | (9.4 | )% |
Year ended December 31, | ||||||||
2023 | 2022 | |||||||
(In thousands) | ||||||||
Net cash provided by (used in) operating activities | $ | (180,113 | ) | $ | 31,284 | |||
Net cash used in investing activities | (268,894 | ) | (417,044 | ) | ||||
Net cash provided by (used in) financing activities | (11,956 | ) | 654,607 | |||||
Increase (decrease) in cash, cash equivalents and restricted cash | $ | (460,963 | ) | $ | 268,847 |
(1) | An initial qualitative assessment may be performed to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. |
(2) | If the Company concludes it is more likely than not that the fair value of the reporting unit is less than its carrying mount, a quantitative fair value test is performed. An impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value is recognized. |
Consolidated Financial Statements | |
Reports of Independent Registered Public Accounting Firm (PCAOB ID: 1281) | F-2 |
F-5 | |
F-7 | |
F-8 | |
F-9 | |
F-10 | |
F-12 |
Description of the Matter | As described in Notes 2w and 14 to the consolidated financial statements, as of December 31, 2023, the warranty obligation was $512,748 thousand. Substantially all of the Company's warranty obligations are related to the solar business. The Company's products include a warranty of up to 12 years for inverters, up to 25 years for its power optimizers and 10 years for batteries for PV applications. In order to predict the failure rate of each product, the Company established a reliability model based on the estimated mean time between failures ("MTBF") and an additional model to capture non-systematic failures. Predicted failure rates are updated periodically based on new product versions and analysis of the root cause of actual failures, as are warranty related replacement costs. Auditing the management’s warranty obligations valuation of the solar business was complex and subject to judgment due to the significant estimations required in calculating its amount. In particular, the warranty obligations are subject to significant assumptions such as product failure rates, the average cost of products replacements and other warranty related costs. | |
How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the accounting for warranty obligations of solar business, including controls over management's review of the significant assumptions and data underlying the warranty obligations valuation. To test the Company’s warranty obligations our substantive audit procedures included, among others, look back analysis and testing the accuracy and completeness of the underlying data used in management's warranty obligations valuation assessment. We assessed the accuracy of historical data used in estimating forecasted failure rates, repair replacement ratios and other warranty related costs and compared them to actual warranty claims. In addition, we involved a specialist to assess the assumptions and the precision of the inputs underlying the MTBF model, including, evaluating the appropriateness of the MTBF model and its consistency with data obtained from external sources. |
Description of the Matter | As of December 31, 2023, the Company’s consolidated inventories balance was $1,443 thousand and the Company’s contractual obligations to purchase inventories from contract manufacturers ("contractual purchase obligations") were $543 thousand. As described in Notes 1, 5 and 20 to the consolidated financial statements, the Company values its inventories at the lower of cost or net realizable value. Reserves for potentially excess inventories and excess product contractual purchase obligations are made based on management's analysis of inventory levels, future sales forecasts, and market conditions. Auditing the valuation of inventory reserves for the excess inventories and excess product contractual purchase obligations were complex and subject to judgment due to the significant estimates and assumptions required by management to calculate the reserves, especially, the future salability of the inventories. These assumptions include the assessment by inventory category of future demand and market conditions for the Company's products. | |
How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls over the Company's excess inventory reserve process and excess product contractual purchase obligations including management's assessment of the underlying assumptions and data. To test the valuation of inventory reserve for the excess inventories and excess product contractual purchase obligations our substantive audit procedures included, among others, evaluating the reasonableness of the significant assumptions used by management including those related to forecasted inventory usage, future demand, and market conditions. We examined the completeness, accuracy, and relevance of the underlying data used in management's estimate. We held discussions with appropriate non-financial personnel including sales, R&D and operating management, regarding strategic or operational changes in the business would impact expected demand or related carrying value of inventories, introduction of new products and other factors to corroborate management's assertions regarding excess inventories. We performed an examination of historical forecasted sales estimation to actual utilization of inventories and performed sensitivity analysis on demand assumptions to evaluate the changes in the inventory reserve that would result from changes in the assumptions. |
December 31, | ||||||||
2023 | 2022 | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 338,468 | $ | 783,112 | ||||
Marketable securities | 521,570 | 241,117 | ||||||
Trade receivables, net of allowances of $16,400 and $3,202, respectively | 622,425 | 905,146 | ||||||
Inventories, net | 1,443,449 | 729,201 | ||||||
Prepaid expenses and other current assets | 378,394 | 241,082 | ||||||
Total current assets | 3,304,306 | 2,899,658 | ||||||
LONG-TERM ASSETS: | ||||||||
Marketable securities | 407,825 | 645,491 | ||||||
Deferred tax assets, net | 80,912 | 44,153 | ||||||
Property, plant and equipment, net | 614,579 | 543,969 | ||||||
Operating lease right-of-use assets, net | 64,167 | 62,754 | ||||||
Intangible assets, net | 35,345 | 19,929 | ||||||
Goodwill | 42,996 | 31,189 | ||||||
Other long-term assets | 37,601 | 18,806 | ||||||
Total long-term assets | 1,283,425 | 1,366,291 | ||||||
Total assets | $ | 4,587,731 | $ | 4,265,949 |
F - 5
December 31, | ||||||||
2023 | 2022 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Trade payables, net | $ | 386,471 | $ | 459,831 | ||||
Employees and payroll accruals | 76,966 | 85,158 | ||||||
Warranty obligations | 183,047 | 103,975 | ||||||
Deferred revenues and customers advances | 40,836 | 26,641 | ||||||
Accrued expenses and other current liabilities | 205,911 | 214,112 | ||||||
Total current liabilities | 893,231 | 889,717 | ||||||
LONG-TERM LIABILITIES: | ||||||||
Convertible senior notes, net | $ | 627,381 | $ | 624,451 | ||||
Warranty obligations | 335,197 | 281,082 | ||||||
Deferred revenues | 214,607 | 186,936 | ||||||
Finance lease liabilities | 41,892 | 45,385 | ||||||
Operating lease liabilities | 45,070 | 46,256 | ||||||
Other long-term liabilities | 18,444 | 15,756 | ||||||
Total long-term liabilities | 1,282,591 | 1,199,866 | ||||||
COMMITMENTS AND CONTINGENT LIABILITIES | ||||||||
STOCKHOLDERS’ EQUITY: | ||||||||
Common stock of $0.0001 par value - Authorized: 125,000,000 shares as of December 31, 2023 and December 31, 2022; issued and outstanding: 57,123,437 and 56,133,404 shares as of December 31, 2023 and December 31, 2022, respectively | 6 | 6 | ||||||
Additional paid-in capital | 1,680,622 | 1,505,632 | ||||||
Accumulated other comprehensive loss | (46,885 | ) | (73,109 | ) | ||||
Retained earnings | 778,166 | 743,837 | ||||||
Total stockholders’ equity | 2,411,909 | 2,176,366 | ||||||
Total liabilities and stockholders’ equity | $ | 4,587,731 | $ | 4,265,949 |
F - 6
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Revenues | $ | 2,976,528 | $ | 3,110,279 | $ | 1,963,865 | ||||||
Cost of revenues | 2,272,705 | 2,265,631 | 1,334,547 | |||||||||
Gross profit | 703,823 | 844,648 | 629,318 | |||||||||
Operating expenses: | ||||||||||||
Research and development | 321,482 | 289,814 | 219,633 | |||||||||
Sales and marketing | 164,318 | 159,680 | 119,000 | |||||||||
General and administrative | 146,504 | 112,496 | 82,196 | |||||||||
Goodwill impairment | - | 90,104 | - | |||||||||
Other operating expenses, net | 31,314 | 26,434 | 1,350 | |||||||||
Total operating expenses | 663,618 | 678,528 | 422,179 | |||||||||
Operating income | 40,205 | 166,120 | 207,139 | |||||||||
Financial income (expense), net | 41,212 | 3,750 | (20,014 | ) | ||||||||
Other income (loss), net | (318 | ) | 7,285 | 99 | ||||||||
Income before income taxes | 81,099 | 177,155 | 187,224 | |||||||||
Income taxes | 46,420 | 83,376 | 18,054 | |||||||||
Net loss from equity method investments | 350 | - | - | |||||||||
Net income | $ | 34,329 | $ | 93,779 | $ | 169,170 | ||||||
Net basic earnings per share of common stock | $ | 0.61 | $ | 1.70 | $ | 3.24 | ||||||
Net diluted earnings per share of common stock | $ | 0.60 | $ | 1.65 | $ | 3.06 | ||||||
Weighted average number of shares used in computing net basic earnings per share of common stock | 56,557,106 | 55,087,770 | 52,202,182 | |||||||||
Weighted average number of shares used in computing net diluted earnings per share of common stock | 57,237,518 | 58,100,649 | 55,971,030 |
F - 7
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Net income | $ | 34,329 | $ | 93,779 | $ | 169,170 | ||||||
Other comprehensive income (loss), net of tax: | ||||||||||||
Available-for-sale marketable securities | 20,489 | (20,740 | ) | (4,949 | ) | |||||||
Cash flow hedges | 5,701 | (2,635 | ) | 874 | ||||||||
Foreign currency translation adjustments on intra-entity transactions that are of a long-term investment nature | (5,375 | ) | (20,540 | ) | (17,420 | ) | ||||||
Foreign currency translation adjustments | 5,409 | (1,875 | ) | (9,681 | ) | |||||||
Total other comprehensive income (loss) | 26,224 | (45,790 | ) | (31,176 | ) | |||||||
Comprehensive income | $ | 60,553 | $ | 47,989 | $ | 137,994 |
F - 8
SolarEdge Technologies, Inc. Stockholders’ Equity | ||||||||||||||||||||||||
Common stock | Additional paid in Capital | Accumulated other comprehensive Income (loss) | Retained earnings | Total | ||||||||||||||||||||
Number | Amount | |||||||||||||||||||||||
Balance as of December 31, 2020 | 51,560,936 | $ | 5 | $ | 603,891 | $ | 3,857 | $ | 478,004 | $ | 1,085,757 | |||||||||||||
Cumulative effect of adopting ASU 2020-06 | - | - | (36,336 | ) | - | 2,884 | (33,452 | ) | ||||||||||||||||
Issuance of common stock upon exercise of stock-based awards | 1,204,861 | * - | 6,486 | - | - | 6,486 | ||||||||||||||||||
Issuance of Common stock under employee stock purchase plan | 49,598 | * - | 10,661 | - | - | 10,661 | ||||||||||||||||||
Stock based compensation | - | - | 102,593 | - | - | 102,593 | ||||||||||||||||||
Other comprehensive loss adjustments, net | - | - | - | (31,176 | ) | - | (31,176 | ) | ||||||||||||||||
Net income | - | - | - | - | 169,170 | 169,170 | ||||||||||||||||||
Balance as of December 31, 2021 | 52,815,395 | $ | 5 | $ | 687,295 | $ | (27,319 | ) | $ | 650,058 | $ | 1,310,039 | ||||||||||||
Issuance of common stock upon exercise of stock-based awards | 940,880 | * - | 4,030 | - | - | 4,030 | ||||||||||||||||||
Issuance of Common stock under employee stock purchase plan | 77,129 | * - | 17,863 | - | - | 17,863 | ||||||||||||||||||
Stock based compensation | - | - | 145,919 | - | - | 145,919 | ||||||||||||||||||
Issuance of common stock in a secondary public offering, net of underwriters' discounts and commissions of $27,140 and $834 of offering costs | 2,300,000 | 1 | 650,525 | - | - | 650,526 | ||||||||||||||||||
Other comprehensive loss adjustments, net | - | - | - | (45,790 | ) | - | (45,790 | ) | ||||||||||||||||
Net income | - | - | - | - | 93,779 | 93,779 | ||||||||||||||||||
Balance as of December 31, 2022 | 56,133,404 | $ | 6 | $ | 1,505,632 | $ | (73,109 | ) | $ | 743,837 | $ | 2,176,366 | ||||||||||||
Issuance of common stock upon exercise of stock-based awards | 790,745 | * - | 226 | - | - | 226 | ||||||||||||||||||
Issuance of Common stock under employee stock purchase plan | 199,288 | * - | 20,693 | - | - | 20,693 | ||||||||||||||||||
Stock based compensation | - | - | 154,071 | - | - | 154,071 | ||||||||||||||||||
Other comprehensive income adjustments, net | - | - | - | 26,224 | - | 26,224 | ||||||||||||||||||
Net income | - | - | - | - | 34,329 | 34,329 | ||||||||||||||||||
Balance as of December 31, 2023 | 57,123,437 | $ | 6 | $ | 1,680,622 | $ | (46,885 | ) | $ | 778,166 | $ | 2,411,909 |
F - 9
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net income | $ | 34,329 | $ | 93,779 | $ | 169,170 | ||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||||||
Depreciation and amortization | 57,196 | 49,676 | 39,535 | |||||||||
Loss (gain) from exchange rate fluctuations | (26,878 | ) | 9,527 | 21,131 | ||||||||
Stock-based compensation expenses | 149,945 | 145,539 | 102,593 | |||||||||
Impairment of goodwill and long-lived assets | 30,790 | 119,141 | - | |||||||||
Deferred income taxes, net | (43,071 | ) | (11,055 | ) | (12,045 | ) | ||||||
Other items | 8,164 | 4,382 | 11,931 | |||||||||
Changes in assets and liabilities: | ||||||||||||
Inventories, net | (690,854 | ) | (341,085 | ) | (43,051 | ) | ||||||
Prepaid expenses and other assets | (91,523 | ) | (64,991 | ) | (39,444 | ) | ||||||
Trade receivables, net | 296,429 | (457,610 | ) | (247,723 | ) | |||||||
Trade payables, net | (67,795 | ) | 194,524 | 91,709 | ||||||||
Employees and payroll accruals | 21,419 | 26,238 | 26,519 | |||||||||
Warranty obligations | 133,090 | 120,169 | 60,524 | |||||||||
Deferred revenues and customers advances | 39,632 | 44,376 | 29,936 | |||||||||
Accrued expenses and other liabilities, net | (30,986 | ) | 98,674 | 3,344 | ||||||||
Net cash provided by (used in) operating activities | (180,113 | ) | 31,284 | 214,129 | ||||||||
Cash flows from investing activities: | ||||||||||||
Investment in available-for-sale marketable securities | (296,396 | ) | (507,171 | ) | (579,377 | ) | ||||||
Proceeds from sales and maturities of available-for-sale marketable securities | 280,189 | 231,210 | 202,188 | |||||||||
Purchase of property, plant and equipment | (170,523 | ) | (169,341 | ) | (149,251 | ) | ||||||
Disbursements for loans receivables | (58,000 | ) | - | - | ||||||||
Business combinations, net of cash acquired | (16,653 | ) | - | - | ||||||||
Purchase of intangible assets | (10,600 | ) | - | - | ||||||||
Investment in privately-held companies | (8,000 | ) | - | (16,643 | ) | |||||||
Proceeds from governmental grant | 6,794 | 4,479 | - | |||||||||
Proceeds from sale of a privately-held company | 1,313 | 24,362 | - | |||||||||
Withdrawal from bank deposits, net | - | - | 60,096 | |||||||||
Other investing activities | 2,982 | (583 | ) | (1,224 | ) | |||||||
Net cash used in investing activities | $ | (268,894 | ) | $ | (417,044 | ) | $ | (484,211 | ) |
F - 10
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Cash flows from financing activities: | ||||||||||||
Tax withholding in connection with stock-based awards, net | $ | (9,259 | ) | $ | 3,023 | $ | (4,283 | ) | ||||
Payments of finance lease liability | (2,794 | ) | (2,834 | ) | (1,308 | ) | ||||||
Proceeds from secondary public offering, net of issuance costs | - | 650,526 | - | |||||||||
Repayment of bank loans | (129 | ) | (138 | ) | (16,073 | ) | ||||||
Other financing activities | 226 | 4,030 | 6,486 | |||||||||
Net cash provided by (used in) financing activities | (11,956 | ) | 654,607 | (15,178 | ) | |||||||
Increase (decrease) in cash and cash equivalents | (460,963 | ) | 268,847 | (285,260 | ) | |||||||
Cash and cash equivalents at the beginning of the period | 783,112 | 530,089 | 827,146 | |||||||||
Effect of exchange rate differences on cash and cash equivalents | 16,319 | (15,824 | ) | (11,797 | ) | |||||||
Cash and cash equivalents at the end of the period | $ | 338,468 | $ | 783,112 | $ | 530,089 | ||||||
Supplemental disclosure of non-cash activities: | ||||||||||||
Purchase of intangible assets and business combinations | $ | 11,307 | $ | - | $ | - | ||||||
Right-of-use asset recognized with corresponding lease liability | $ | 18,077 | $ | 46,004 | $ | 20,526 | ||||||
Purchase of property, plant and equipment | $ | 6,323 | $ | 16,016 | $ | 10,781 | ||||||
Supplemental disclosure of cash flow information: | ||||||||||||
Cash paid for income taxes | $ | 137,981 | $ | 74,689 | $ | 45,977 |
F - 11
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
F - 12
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
F - 13
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
Year Ended December 31, 2023 | ||||
Balance, at beginning of the period | $ | 3,202 | ||
Increase in provision for expected credit losses | 13,760 | |||
Recoveries collected | (134 | ) | ||
Amounts written off charged against the allowance | (568 | ) | ||
Foreign currency translation | 140 | |||
Balance, at end of the period | $ | 16,400 |
F - 14
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
% | ||
Buildings and plants | 2.5-5.7 (mainly 2.5) | |
Computers and peripheral equipment | 14.3-33.3 (mainly 33.3) | |
Office furniture and equipment | 7-25 (mainly 7) | |
Machinery and equipment | 10-25 (mainly 10) | |
Laboratory and testing equipment | 10-20 (mainly 10) | |
Leasehold improvements | over the shorter of the lease term or useful economic life |
F - 15
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
Refundable and transferable tax credits are similar in essence to government grants. This is because the taxpayer can realize the benefit regardless of whether they owe income tax or not in the relevant years. Therefore, these amounts are not considered income taxes and fall outside the scope of Topic 740. Instead, they are treated as government grants.
F - 16
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
F - 17
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
F - 18
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
F - 19
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
(2) Identify the performance obligations in the contract
F - 20
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
F - 21
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
F - 22
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
F - 23
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
F - 24
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
The fair value for options, PSU and ESPP granted to employees is estimated at the date of grant using the following assumptions:
Year ended December 31, | ||||||
2023 | 2022 | 2021 | ||||
Employee Stock Options (1) | ||||||
Risk-free interest | - | - | 0.43% | |||
Dividend yields | - | - | 0% | |||
Volatility | - | - | 60.74% | |||
Expected option term in years | - | - | 5.48 | |||
Estimated forfeiture rate | - | - | 0% | |||
ESPP | ||||||
Risk-free interest | 5.38% - 5.46% | 1.64% - 4.70% | 0.03% - 0.10% | |||
Dividend yields | 0% | 0% | 0% | |||
Volatility | 56.44% - 66.78% | 71.28% - 71.97% | 48.39% - 76.05% | |||
Expected term | 6 months | 6 months | 6 months | |||
PSU | ||||||
Risk-free interest | 4.09% | 1.77% | - | |||
Dividend yields | 0% | 0% | - | |||
Volatility | 71.60% | 67.42% | - | |||
Expected term | 3 years | 1 - 3 years | - |
F - 25
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
F - 26
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
Amount | Weighted Average Useful Life (In years) | |||||||
Cash | $ | 448 | ||||||
Net liabilities assumed | (1,837 | ) | ||||||
Identified intangible assets: | ||||||||
Current technology | 6,576 | 5 | ||||||
Customer relationships | 283 | 1 | ||||||
Trade name | 610 | 5 | ||||||
Goodwill | 12,266 | |||||||
Total | $ | 18,346 |
F - 27
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | |||||||||||||
Matures within one year: | ||||||||||||||||
Corporate bonds | $ | 487,083 | $ | 679 | $ | (5,942 | ) | $ | 481,820 | |||||||
U.S. Treasury securities | 15,324 | - | (63 | ) | 15,261 | |||||||||||
U.S. Government agency securities | 8,787 | 11 | (3 | ) | 8,795 | |||||||||||
Non-U.S. Government securities | 15,161 | 673 | (140 | ) | 15,694 | |||||||||||
526,355 | 1,363 | (6,148 | ) | 521,570 | ||||||||||||
Matures after one year: | ||||||||||||||||
Corporate bonds | 342,223 | 1,902 | (4,444 | ) | 339,681 | |||||||||||
U.S. Treasury securities | 2,430 | - | (22 | ) | 2,408 | |||||||||||
U.S. Government agency securities | 44,100 | 107 | (121 | ) | 44,086 | |||||||||||
Non-U.S. Government securities | 20,488 | 1,162 | - | 21,650 | ||||||||||||
409,241 | 3,171 | (4,587 | ) | 407,825 | ||||||||||||
Total | $ | 935,596 | $ | 4,534 | $ | (10,735 | ) | $ | 929,395 |
Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | |||||||||||||
Matures within one year: | ||||||||||||||||
Corporate bonds | $ | 222,482 | $ | - | $ | (4,657 | ) | $ | 217,825 | |||||||
U.S. Treasury securities | 15,963 | - | (284 | ) | 15,679 | |||||||||||
Non-U.S. Government securities | 7,882 | - | (269 | ) | 7,613 | |||||||||||
246,327 | - | (5,210 | ) | 241,117 | ||||||||||||
Matures after one year: | ||||||||||||||||
Corporate bonds | 657,238 | 80 | (26,460 | ) | 630,858 | |||||||||||
U.S. Treasury securities | 9,939 | - | (261 | ) | 9,678 | |||||||||||
Non-U.S. Government securities | 5,311 | - | (356 | ) | 4,955 | |||||||||||
672,488 | 80 | (27,077 | ) | 645,491 | ||||||||||||
Total | $ | 918,815 | $ | 80 | $ | (32,287 | ) | $ | 886,608 |
F - 28
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
NOTE 5: INVENTORIES, NET
As of December 31, | ||||||||
2023 | 2022 | |||||||
Raw materials | $ | 340,604 | $ | 503,257 | ||||
Work in process | 20,885 | 23,407 | ||||||
Finished goods | 1,081,960 | 202,537 | ||||||
$ | 1,443,449 | $ | 729,201 |
NOTE 6: PREPAID EXPENSES AND OTHER CURRENT ASSETS
As of December 31, | ||||||||
2023 | 2022 | |||||||
Vendor non-trade receivables1 | $ | 102,991 | $ | 147,597 | ||||
Government authorities | 167,221 | 55,670 | ||||||
Loan receivables2 | 55,418 | - | ||||||
Interest from marketable securities | 7,515 | 6,235 | ||||||
Prepaid expenses and other | 45,249 | 31,580 | ||||||
Total prepaid expenses and other current assets | $ | 378,394 | $ | 241,082 |
F - 29
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
As of December 31, | ||||||||
2023 | 2022 | |||||||
Cost: | ||||||||
Land | $ | 12,823 | $ | 13,070 | ||||
Buildings and plants | 153,813 | 152,218 | ||||||
Computers and peripheral equipment | 57,527 | 46,376 | ||||||
Office furniture and equipment | 10,992 | 10,911 | ||||||
Laboratory and testing equipment | 67,248 | 58,454 | ||||||
Machinery and equipment | 362,363 | 315,155 | ||||||
Leasehold improvements | 96,730 | 85,147 | ||||||
Assets under construction and payments on account | 88,077 | 47,168 | ||||||
Gross property, plant and equipment | 849,573 | 728,499 | ||||||
Less - accumulated depreciation | 234,994 | 184,530 | ||||||
Total property, plant and equipment, net | $ | 614,579 | $ | 543,969 |
NOTE 8: LEASES
Description | Classification on the consolidated Balance Sheet | 2023 | 2022 | |||||||
Assets: | ||||||||||
Operating lease assets, net of lease incentive obligation | Operating lease right-of use assets, net | $ | 64,167 | $ | 62,754 | |||||
Finance lease assets | Property, plant and equipment, net | 49,926 | 52,934 | |||||||
Total lease assets | $ | 114,093 | $ | 115,688 | ||||||
Liabilities: | ||||||||||
Operating leases short term | Accrued expenses and other current liabilities | $ | 17,704 | $ | 16,183 | |||||
Finance leases short term | Accrued expenses and other current liabilities | 3,253 | 3,263 | |||||||
Operating leases long term | Operating lease liabilities | 45,070 | 46,256 | |||||||
Finance leases long term | Finance lease liabilities | 41,892 | 45,385 | |||||||
Total lease liabilities | $ | 107,919 | $ | 111,087 |
F - 30
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
Year ended December 31, | ||||||||
2023 | 2022 | |||||||
Finance leases: | ||||||||
Finance lease cost | $ | 4,154 | $ | 4,196 | ||||
Weighted average remaining lease term in years | 14.99 | 16.28 | ||||||
Weighted average annual discount rate | 2.30 | % | 2.30 | % | ||||
Operating leases: | ||||||||
Operating lease cost | $ | 18,479 | $ | 15,901 | ||||
Weighted average remaining lease term in years | 9.50 | 8.33 | ||||||
Weighted average annual discount rate | 3.68 | % | 2.17 | % |
Year ended December 31, | ||||||||
2023 | 2022 | |||||||
Cash paid for amounts included in measurement of lease liabilities: | ||||||||
Operating cash flows for operating leases | $ | 17,930 | $ | 16,343 | ||||
Operating cash flows for finance leases | $ | 373 | $ | 420 | ||||
Financing cash flows for finance leases | $ | 2,794 | $ | 2,834 |
Operating Leases | Finance Leases | |||||||
2024 | $ | 17,933 | $ | 3,288 | ||||
2025 | 10,693 | 3,452 | ||||||
2026 | 6,585 | 3,452 | ||||||
2027 | 5,209 | 4,017 | ||||||
2028 | 4,479 | 3,155 | ||||||
Thereafter | 30,169 | 36,087 | ||||||
Total lease payments | $ | 75,068 | $ | 53,451 | ||||
Less amount of lease payments representing interest | (12,294 | ) | (8,306 | ) | ||||
Present value of future lease payments | $ | 62,774 | $ | 45,145 | ||||
Less current lease liabilities | (17,704 | ) | (3,253 | ) | ||||
Long-term lease liabilities | $ | 45,070 | $ | 41,892 |
F - 31
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
NOTE 9: INTANGIBLE ASSETS, NET
As of December 31, | ||||||||
2023 | 2022 | |||||||
Intangible assets with finite lives: | ||||||||
Current Technology | $ | 26,990 | $ | 29,196 | ||||
Customer relationships | 3,193 | 2,958 | ||||||
Trade names | 624 | 3,287 | ||||||
Assembled workforce | 3,575 | 3,575 | ||||||
Patents | 22,000 | 1,400 | ||||||
Gross intangible assets | 56,382 | 40,416 | ||||||
Less - accumulated amortization | (21,037 | ) | (20,487 | ) | ||||
Total intangible assets, net | $ | 35,345 | $ | 19,929 |
2024 | $ | 7,415 | ||
2025 | 6,518 | |||
2026 | 5,930 | |||
2027 | 3,762 | |||
2028 | 2,612 | |||
2029 and thereafter | 9,108 | |||
$ | 35,345 |
F - 32
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
Solar | Energy Storage | All other | Total | |||||||||||||
Goodwill at December 31, 2021 | $ | 30,505 | $ | 2,568 | $ | 96,556 | $ | 129,629 | ||||||||
Changes during the year: | ||||||||||||||||
Foreign currency adjustments | (1,737 | ) | (147 | ) | (6,452 | ) | (8,336 | ) | ||||||||
Impairment losses | - | - | (90,104 | ) | (90,104 | ) | ||||||||||
Goodwill at December 31, 2022 | 28,768 | 2,421 | - | 31,189 | ||||||||||||
Changes during the year: | ||||||||||||||||
Acquisitions | 12,266 | - | - | 12,266 | ||||||||||||
Foreign currency adjustments | (402 | ) | (57 | ) | - | (459 | ) | |||||||||
Goodwill at December 31, 2023 | $ | 40,632 | $ | 2,364 | $ | - | $ | 42,996 |
F - 33
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
As of December 31, | ||||||||
2023 | 2022 | |||||||
Cloud computing arrangements | $ | 13,666 | $ | 3,457 | ||||
Severance pay fund | 9,241 | 8,799 | ||||||
Investments in privately held companies1 | 7,650 | 1,863 | ||||||
Loan receivables | 2,438 | - | ||||||
Prepaid expenses and other | 4,606 | 4,687 | ||||||
Total other long term assets | $ | 37,601 | $ | 18,806 |
F - 34
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
NOTE 12: DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
Balance sheet location | December 31, 2023 | December 31, 2022 | |||||||
Derivative assets of options and forward contracts: | |||||||||
Designated cash flow hedges | Prepaid expenses and other current assets | $ | 4,477 | $ | - | ||||
Non-designated hedges | Prepaid expenses and other current assets | 410 | - | ||||||
Total derivative assets | $ | 4,887 | $ | - | |||||
Derivative liabilities of options and forward contracts: | |||||||||
Designated cash flow hedges | Accrued expenses and other current liabilities | $ | - | $ | (1,874 | ) | |||
Non-designated hedges | Accrued expenses and other current liabilities | - | - | ||||||
Total derivative liabilities | $ | - | $ | (1,874 | ) |
Year ended December 31, | |||||||||||||
Affected line item | 2023 | 2022 | 2021 | ||||||||||
Foreign exchange contracts | |||||||||||||
Non Designated Hedging Instruments | Consolidated Statements of Income - Financial income (expense), net | $ | 2,337 | $ | 4,716 | $ | 9,417 | ||||||
Designated Hedging Instruments | Consolidated Statements of Comprehensive Income - Cash flow hedges | $ | (1,990 | ) | $ | (8,965 | ) | $ | 3,289 |
F - 35
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
Fair value measurements as of | ||||||||||
Description | Fair Value Hierarchy | December 31, 2023 | December 31, 2022 | |||||||
Assets: | ||||||||||
Cash and cash equivalents: | ||||||||||
Cash | Level 1 | $ | 309,521 | $ | 695,004 | |||||
Money market mutual funds | Level 1 | $ | 22,311 | $ | 25,149 | |||||
Deposits | Level 1 | $ | 6,636 | $ | 62,959 | |||||
Derivative instruments | Level 2 | $ | 4,887 | $ | - | |||||
Short-term marketable securities: | ||||||||||
Corporate bonds | Level 2 | $ | 481,820 | $ | 217,825 | |||||
U.S. Treasury securities | Level 2 | $ | 15,261 | $ | 15,679 | |||||
U.S. Government agency securities | Level 2 | $ | 8,795 | $ | - | |||||
Non-U.S. Government securities | Level 2 | $ | 15,694 | $ | 7,613 | |||||
Long-term marketable securities: | ||||||||||
Corporate bonds | Level 2 | $ | 339,681 | $ | 630,858 | |||||
U.S. Treasury securities | Level 2 | $ | 2,408 | $ | 9,678 | |||||
U.S. Government agency securities | Level 2 | $ | 44,086 | $ | - | |||||
Non-U.S. Government securities | Level 2 | $ | 21,650 | $ | 4,955 | |||||
Liabilities: | ||||||||||
Derivative instruments | Level 2 | $ | - | $ | (1,874 | ) |
F - 36
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Balance, at the beginning of the period | $ | 385,057 | $ | 265,160 | $ | 204,994 | ||||||
Accruals for warranty during the period | 250,266 | 211,202 | 127,057 | |||||||||
Changes in estimates | 20,017 | 1,914 | 7,685 | |||||||||
Settlements | (137,096 | ) | (93,219 | ) | (74,576 | ) | ||||||
Balance, at end of the period | 518,244 | 385,057 | 265,160 | |||||||||
Less current portion | (183,047 | ) | (103,975 | ) | (71,480 | ) | ||||||
Long term portion | $ | 335,197 | $ | 281,082 | $ | 193,680 |
December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Balance, at the beginning of the period | $ | 213,577 | $ | 169,345 | $ | 140,020 | ||||||
Revenue recognized | (29,650 | ) | (23,017 | ) | (26,093 | ) | ||||||
Increase in deferred revenues and customer advances | 71,516 | 67,249 | 55,418 | |||||||||
Balance, at the end of the period | 255,443 | 213,577 | 169,345 | |||||||||
Less current portion | (40,836 | ) | (26,641 | ) | (17,789 | ) | ||||||
Long term portion | $ | 214,607 | $ | 186,936 | $ | 151,556 |
2024 | $ | 40,836 | ||
2025 | 13,786 | |||
2026 | 13,417 | |||
2027 | 11,314 | |||
2028 | 10,084 | |||
Thereafter | 166,006 | |||
Total deferred revenues | $ | 255,443 |
F - 37
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
As of December 31, | ||||||||
2023 | 2022 | |||||||
Accrued expenses | $ | 142,130 | $ | 117,638 | ||||
Government authorities | 34,309 | 67,514 | ||||||
Operating lease liabilities | 17,704 | 16,183 | ||||||
Accrual for sales incentives | 5,862 | 6,790 | ||||||
Finance lease | 3,253 | 3,263 | ||||||
Other | 2,653 | 2,724 | ||||||
Total accrued expenses and other current liabilities | $ | 205,911 | $ | 214,112 |
F - 38
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
As of December 31, | ||||||||
2023 | 2022 | |||||||
Liability: | ||||||||
Principal | $ | 632,500 | $ | 632,500 | ||||
Unamortized issuance costs | (5,119 | ) | (8,049 | ) | ||||
Net carrying amount | $ | 627,381 | $ | 624,451 |
As of December 31, | ||||||||
2023 | 2022 | |||||||
Tax liabilities | $ | 3,577 | $ | 3,830 | ||||
Accrued severance pay | 12,967 | 9,848 | ||||||
Other | 1,900 | 2,078 | ||||||
$ | 18,444 | $ | 15,756 |
F - 39
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
a. | Common stock rights: |
b. | Secondary public offering: |
c. | Equity Incentive Plans: |
F - 40
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
Number of options | Weighted average exercise price | Weighted average remaining contractual term in years | Aggregate intrinsic Value | |||||||||||||
Outstanding as of December 31, 2022 | 339,029 | $ | 50.64 | 4.86 | $ | 79,414 | ||||||||||
Exercised | (21,613 | ) | 10.48 | - | 3,572 | |||||||||||
Outstanding as of December 31, 2023 | 317,416 | $ | 53.38 | 4.05 | $ | 17,366 | ||||||||||
Vested and expected to vest as of December 31, 2023 | 317,166 | $ | 53.24 | 4.05 | $ | 17,366 | ||||||||||
Exercisable as of December 31, 2023 | 307,719 | $ | 47.70 | 3.97 | $ | 17,366 |
Number of RSUs | Weighted average grant date fair value | |||||||
Unvested as of January 1, 2023 | 1,488,515 | $ | 232.05 | |||||
Granted | 1,138,764 | 133.44 | ||||||
Vested | (661,967 | ) | 198.16 | |||||
Forfeited | (105,026 | ) | 253.80 | |||||
Unvested as of December 31, 2023 | 1,860,286 | $ | 182.52 |
Number of PSUs | Weighted average grant date fair value | |||||||
Unvested as of January 1, 2023 | $ | 149,232 | $ | 295.88 | ||||
Granted | 32,348 | 314.22 | ||||||
Vested | (107,165 | ) | 296.76 | |||||
Unvested as of December 31, 2023 | $ | 74,415 | $ | 302.58 |
F - 41
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
d. | Employee Stock Purchase Plan: |
e. | Stock-based compensation expenses: |
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Stock-based compensation expenses: | ||||||||||||
Cost of revenues | $ | 23,200 | $ | 21,818 | $ | 18,743 | ||||||
Research and development | 66,944 | 63,211 | 45,424 | |||||||||
Selling and marketing | 30,987 | 31,017 | 22,834 | |||||||||
General and administrative | 28,814 | 29,493 | 15,592 | |||||||||
Total stock-based compensation expenses | $ | 149,945 | $ | 145,539 | $ | 102,593 | ||||||
Stock-based compensation capitalized: | ||||||||||||
Inventories, net | $ | 2,460 | $ | - | $ | - | ||||||
Other long-term assets | 1,666 | 380 | - | |||||||||
Total stock-based compensation capitalized | $ | 4,126 | $ | 380 | $ | - |
F - 42
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
a. | Guarantees: |
b. | Contractual purchase obligations: |
c. | Legal claims: |
F - 43
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
Unrealized gains (losses) on available-for-sale marketable securities | Unrealized gains (losses) on cash flow hedges | Foreign currency translation adjustments on intra-entity transactions that are of a long-term investment in nature | Unrealized gains (losses) on foreign currency translation | Total | ||||||||||||||||
Beginning balance as of January 1, 2021 | $ | 240 | $ | - | $ | - | $ | 3,617 | $ | 3,857 | ||||||||||
Revaluation | (6,283 | ) | 3,735 | (17,420 | ) | (9,681 | ) | (29,649 | ) | |||||||||||
Tax on revaluation | 1,346 | (446 | ) | - | - | 900 | ||||||||||||||
Other comprehensive income (loss) before reclassifications | (4,937 | ) | 3,289 | (17,420 | ) | (9,681 | ) | 28,749 | ||||||||||||
Reclassification | (16 | ) | (2,742 | ) | - | - | (2,758 | ) | ||||||||||||
Tax on reclassification | 4 | 327 | - | - | 331 | |||||||||||||||
Gains reclassified from accumulated other comprehensive income | (12 | ) | (2,415 | ) | - | - | (2,427 | ) | ||||||||||||
Net current period other comprehensive income (loss) | (4,949 | ) | 874 | (17,420 | ) | (9,681 | ) | (31,176 | ) | |||||||||||
Ending balance as of December 31, 2021 | $ | (4,709 | ) | $ | 874 | $ | (17,420 | ) | $ | (6,064 | ) | $ | (27,319 | ) | ||||||
Revaluation | (26,944 | ) | (9,890 | ) | (20,540 | ) | (1,875 | ) | (59,249 | ) | ||||||||||
Tax on revaluation | 5,583 | 925 | - | - | 6,508 | |||||||||||||||
Other comprehensive income (loss) before reclassifications | (21,361 | ) | (8,965 | ) | (20,540 | ) | (1,875 | ) | (52,741 | ) | ||||||||||
Reclassification | 736 | 7,024 | - | - | 7,760 | |||||||||||||||
Tax on reclassification | (115 | ) | (694 | ) | - | - | (809 | ) | ||||||||||||
Losses reclassified from accumulated other comprehensive income | 621 | 6,330 | - | - | 6,951 | |||||||||||||||
Net current period other comprehensive loss | (20,740 | ) | (2,635 | ) | (20,540 | ) | (1,875 | ) | (45,790 | ) | ||||||||||
Ending balance as of December 31, 2022 | $ | (25,449 | ) | $ | (1,761 | ) | $ | (37,960 | ) | $ | (7,939 | ) | $ | (73,109 | ) | |||||
Revaluation | 25,898 | (1,973 | ) | (5,375 | ) | 5,409 | 23,959 | |||||||||||||
Tax on revaluation | (5,487 | ) | (17 | ) | - | - | (5,504 | ) | ||||||||||||
Other comprehensive income (loss) before reclassifications | 20,411 | (1,990 | ) | (5,375 | ) | 5,409 | 18,455 | |||||||||||||
Reclassification | 107 | 8,325 | - | - | 8,432 | |||||||||||||||
Tax on reclassification | (29 | ) | (634 | ) | - | - | (663 | ) | ||||||||||||
Losses reclassified from accumulated other comprehensive income | 78 | 7,691 | - | - | 7,769 | |||||||||||||||
Net current period other comprehensive income (loss) | 20,489 | 5,701 | (5,375 | ) | 5,409 | 26,224 | ||||||||||||||
Ending balance as of December 31, 2023 | $ | (4,960 | ) | $ | 3,940 | $ | (43,335 | ) | $ | (2,530 | ) | $ | (46,885 | ) |
F - 44
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
Details about Accumulated Other Comprehensive Income (Loss) Components | Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | Affected Line Item in the Statement of Income | |||||||||||
2023 | 2022 | 2021 | |||||||||||
Unrealized gains (losses) on available-for-sale marketable securities | |||||||||||||
$ | (107 | ) | $ | (736 | ) | $ | 16 | Financial income (expenses), net | |||||
29 | 115 | (4 | ) | Income taxes | |||||||||
$ | (78 | ) | $ | (621 | ) | $ | 12 | Total, net of income taxes | |||||
Unrealized gains (losses) on cash flow hedges | |||||||||||||
(964 | ) | (801 | ) | 333 | Cost of revenues | ||||||||
(4,981 | ) | (4,142 | ) | 1,645 | Research and development | ||||||||
(1,057 | ) | (959 | ) | 334 | Sales and marketing | ||||||||
(1,323 | ) | (1,122 | ) | 430 | General and administrative | ||||||||
$ | (8,325 | ) | $ | (7,024 | ) | $ | 2,742 | Total, before income taxes | |||||
634 | 694 | (327 | ) | Income taxes | |||||||||
(7,691 | ) | (6,330 | ) | 2,415 | Total, net of income taxes | ||||||||
Total reclassifications for the period | $ | (7,769 | ) | $ | (6,951 | ) | $ | 2,427 |
F - 45
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Basic: | ||||||||||||
Numerator: | ||||||||||||
Net income | $ | 34,329 | $ | 93,779 | $ | 169,170 | ||||||
Denominator: | ||||||||||||
Shares used in computing net EPS of common stock, basic | 56,557,106 | 55,087,770 | 52,202,182 | |||||||||
Diluted: | ||||||||||||
Numerator: | ||||||||||||
Net income attributable to common stock, basic | $ | 34,329 | $ | 93,779 | $ | 169,170 | ||||||
Notes due 2025 | - | 2,203 | 2,134 | |||||||||
Net income attributable to common stock, diluted | $ | 34,329 | $ | 95,982 | $ | 171,304 | ||||||
Denominator: | ||||||||||||
Shares used in computing net EPS of common stock, basic | 56,557,106 | 55,087,770 | 52,202,182 | |||||||||
Notes due 2025 | - | 2,276,818 | 2,276,818 | |||||||||
Effect of stock-based awards | 680,412 | 736,061 | 1,492,030 | |||||||||
Shares used in computing net EPS of common stock, diluted | 57,237,518 | 58,100,649 | 55,971,030 | |||||||||
Earnings per share: | ||||||||||||
Basic | $ | 0.61 | $ | 1.70 | $ | 3.24 | ||||||
Diluted | $ | 0.60 | $ | 1.65 | $ | 3.06 | ||||||
Shares excluded from the calculation of net diluted due to their anti-dilutive effect | 1,994,328 | 207,980 | 132,133 |
F - 46
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Impairment of property, plant and equipment | $ | 25,168 | $ | 649 | $ | 2,209 | ||||||
Impairment of intangible assets1 | 5,622 | 28,388 | - | |||||||||
Gain on sale of assets | (1,262 | ) | (2,603 | ) | - | |||||||
Legal settlements and contingencies2 | 1,786 | - | - | |||||||||
SolarEdge Korea (formerly Kokam) purchase escrow3 | - | - | (859 | ) | ||||||||
Total other operating expense, net | $ | 31,314 | $ | 26,434 | $ | 1,350 |
F - 47
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
Solar | e-Mobility | |||||||||||||||||||||||
Employee termination costs | Contract termination and other | Employee termination costs | Inventory write-down | Contract termination and other | Total | |||||||||||||||||||
Cost of revenues | $ | 2,561 | $ | 20,593 | $ | - | $ | 27,158 | $ | 9,489 | $ | 59,801 | ||||||||||||
Sales and marketing | - | - | 4 | - | - | 4 | ||||||||||||||||||
General and administrative | - | - | 297 | - | 87 | 384 | ||||||||||||||||||
Total | $ | 2,561 | $ | 20,593 | $ | 301 | $ | 27,158 | $ | 9,576 | $ | 60,189 |
Employee termination costs | Inventory write-down 1 | Contract termination and other | ||||||||||
Balance as of January 1, 2023 | $ | - | $ | - | $ | - | ||||||
Charges | 2,862 | 27,158 | 30,169 | |||||||||
Cash payments | (548 | ) | - | - | ||||||||
Foreign currency adjustments | 59 | 616 | 224 | |||||||||
Balance as of December 31, 2023 | $ | 2,373 | $ | 27,774 | $ | 30,393 |
F - 48
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
a. | Tax rates in the U.S: |
b. | Corporate tax in Israel: |
c. | Carryforward tax losses: |
d. | Deferred taxes: |
F - 49
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
December 31, | ||||||||
2023 | 2022 | |||||||
Deferred tax assets, net: | ||||||||
Research and Development carryforward expenses | $ | 25,527 | $ | 9,335 | ||||
Carryforward tax losses(1) | 44,294 | 19,916 | ||||||
Stock based compensation expenses | 28,715 | 9,863 | ||||||
Deferred revenue | 13,244 | 8,954 | ||||||
Lease liabilities | 12,872 | 6,520 | ||||||
Inventory Impairment | 11,136 | 627 | ||||||
Foreign currency translation | 4,985 | 6,987 | ||||||
Allowance and other reserves | 17,367 | 23,255 | ||||||
Total Gross deferred tax assets, net | $ | 158,140 | $ | 85,457 | ||||
Less, Valuation Allowance | (51,245 | ) | (23,777 | ) | ||||
Total deferred tax assets, net | $ | 106,895 | $ | 61,680 | ||||
Deferred tax liabilities, net: | ||||||||
Intercompany transactions | $ | (4,470 | ) | $ | (6,292 | ) | ||
Right-of-use assets | (13,353 | ) | (6,618 | ) | ||||
Purchase price allocation | (4,129 | ) | (4,617 | ) | ||||
Property, plant and equipment | (5,481 | ) | - | |||||
Total deferred tax liabilities, net | $ | (27,433 | ) | $ | (17,527 | ) | ||
Recorded as: | ||||||||
Deferred tax assets, net | $ | 80,912 | $ | 44,153 | ||||
Deferred tax liabilities, net | (1,450 | ) | - | |||||
Net deferred tax assets | $ | 79,462 | $ | 44,153 |
e. | Uncertain tax positions are comprised as follows: |
December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Balance, at the beginning of the period | $ | 2,756 | $ | 2,192 | $ | 10,564 | ||||||
Increases related to current year tax positions | 1,502 | 564 | 635 | |||||||||
Increase for tax positions related to prior years | 11,778 | - | - | |||||||||
Decreases related to prior year tax positions | (128 | ) | - | (9,007 | ) | |||||||
Balance, at end of the period | $ | 15,908 | $ | 2,756 | $ | 2,192 |
F - 50
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
f. | Income before income taxes are comprised as follows: |
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Domestic | $ | 49,758 | $ | 47,324 | $ | 13,659 | ||||||
Foreign | 31,341 | 129,831 | 173,565 | |||||||||
Income before income taxes | $ | 81,099 | $ | 177,155 | $ | 187,224 |
g. | Income taxes (tax benefit) are comprised as follows: |
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Current taxes: | ||||||||||||
Domestic | $ | 42,960 | $ | 56,958 | $ | (7,872 | ) | |||||
Foreign | 46,531 | 37,473 | 37,564 | |||||||||
Total current taxes | 89,491 | 94,431 | 29,692 | |||||||||
Deferred taxes: | ||||||||||||
Domestic | (2,244 | ) | (8,955 | ) | (3,682 | ) | ||||||
Foreign | (40,827 | ) | (2,100 | ) | (7,956 | ) | ||||||
Total deferred taxes | (43,071 | ) | (11,055 | ) | (11,638 | ) | ||||||
Income taxes, net | $ | 46,420 | $ | 83,376 | $ | 18,054 |
F - 51
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
h. | Reconciliation of theoretical tax expense to actual tax expense: |
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Statutory tax rate | 21 | % | 21 | % | 21 | % | ||||||
Effect of: | ||||||||||||
Income tax at rate other than the U.S. statutory tax rate | (37.3 | )% | (10.8 | )% | (7.4 | )% | ||||||
Losses and timing differences for which valuation allowance was provided | 27.7 | % | 5.2 | % | 2.7 | % | ||||||
Prior year income taxes (benefit) | (1.0 | )% | 2.9 | % | (4.4 | )% | ||||||
R&D Capitalization and other effects of TCJA | 42.5 | % | 18.9 | % | 0.1 | % | ||||||
Non-deductible expenses | 4.5 | % | 13.2 | % | 2.0 | % | ||||||
Other individually immaterial income tax items, net | (0.2 | )% | (3.3 | )% | (4.4 | )% | ||||||
Effective tax rate | 57.2 | % | 47.1 | % | 9.6 | % |
i. | Tax assessments: |
j. | Tax benefits for Israeli companies under the Law for the Encouragement of Capital Investments, 1959 (the “Investments Law”): |
F - 52
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
k. | Tax benefits under the Law for the Encouragement of Industry (Taxes), 1969: |
F - 53
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
NOTE 26: FINANCIAL INCOME (EXPENSE), NET
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Exchange rate (loss) gain, net | $ | 24,181 | $ | (1,547 | ) | $ | (22,493 | ) | ||||
Interest income on marketable securities | 25,668 | 10,551 | 2,973 | |||||||||
Convertible note | (2,930 | ) | (2,916 | ) | (2,903 | ) | ||||||
Hedging | 2,337 | 4,716 | 9,417 | |||||||||
Financing component expenses related to ASC 606 | (9,773 | ) | (7,038 | ) | (5,771 | ) | ||||||
Bank charges | (1,418 | ) | (1,584 | ) | (1,991 | ) | ||||||
Interest income | 7,494 | 2,932 | 788 | |||||||||
Interest expense | (1,269 | ) | (1,530 | ) | (605 | ) | ||||||
Other | (3,078 | ) | 166 | 571 | ||||||||
Total financial income (expenses), net | $ | 41,212 | $ | 3,750 | $ | (20,014 | ) |
a. | Segment Information: |
F - 54
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
Year ended December 31, 2023 | ||||||||||||
Solar | Energy Storage | All other | ||||||||||
Revenues | $ | 2,815,539 | $ | 83,717 | $ | 76,438 | ||||||
Cost of revenues | 1,994,578 | 112,518 | 75,469 | |||||||||
Gross profit (loss) | 820,961 | (28,801 | ) | 969 | ||||||||
Research and development | 226,776 | 17,370 | 9,403 | |||||||||
Sales and marketing | 126,207 | 3,539 | 2,654 | |||||||||
General and administrative | 103,461 | 10,409 | 3,286 | |||||||||
Segments profit (loss) | $ | 364,517 | $ | (60,119 | ) | $ | (14,374 | ) |
Year ended December 31, 2022 | ||||||||||||
Solar | Energy Storage | All other | ||||||||||
Revenues | $ | 2,921,175 | $ | 76,325 | $ | 112,165 | ||||||
Cost of revenues | 2,050,147 | 63,752 | 118,171 | |||||||||
Gross profit (loss) | 871,028 | 12,573 | (6,006 | ) | ||||||||
Research and development | 196,381 | 15,108 | 13,908 | |||||||||
Sales and marketing | 118,154 | 4,095 | 5,592 | |||||||||
General and administrative | 69,631 | 7,233 | 5,768 | |||||||||
Segments profit (loss) | $ | 486,862 | $ | (13,863 | ) | $ | (31,274 | ) |
Year ended December 31, 2021 | ||||||||||||
Solar | Energy Storage | All other | ||||||||||
Revenues | $ | 1,787,280 | $ | 83,430 | $ | 92,737 | ||||||
Cost of revenues | 1,136,896 | 61,099 | 108,483 | |||||||||
Gross profit (loss) | 650,384 | 22,331 | (15,746 | ) | ||||||||
Research and development | 143,173 | 10,289 | 20,217 | |||||||||
Sales and marketing | 85,309 | 3,698 | 6,232 | |||||||||
General and administrative | 53,156 | 5,841 | 7,695 | |||||||||
Segments profit (loss) | $ | 368,746 | $ | 2,503 | $ | (49,890 | ) |
F - 55
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Solar segment revenues | $ | 2,815,539 | $ | 2,921,175 | $ | 1,787,280 | ||||||
Energy Storage segment revenues | 83,717 | 76,325 | 83,430 | |||||||||
All other segment revenues | 76,438 | 112,165 | 92,737 | |||||||||
Revenues from financing component | 834 | 614 | 418 | |||||||||
Consolidated revenues | $ | 2,976,528 | $ | 3,110,279 | $ | 1,963,865 |
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Solar segment profit | $ | 364,517 | $ | 486,862 | $ | 368,746 | ||||||
Energy Storage segment profit (loss) | (60,119 | ) | (13,863 | ) | 2,503 | |||||||
All other segment loss | (14,374 | ) | (31,274 | ) | (49,890 | ) | ||||||
Segments operating profit | 290,024 | 441,725 | 321,359 | |||||||||
Amounts not allocated to segments: | ||||||||||||
Stock based compensation expenses | (149,945 | ) | (145,539 | ) | (102,593 | ) | ||||||
Amortization and depreciation of acquired assets | (7,969 | ) | (9,478 | ) | (10,812 | ) | ||||||
Impairment of goodwill and long-lived assets | (30,790 | ) | (119,141 | ) | - | |||||||
Restructuring and other exit activities | (60,189 | ) | (4,314 | ) | - | |||||||
Other unallocated income (expenses), net | (926 | ) | 2,867 | (815 | ) | |||||||
Consolidated operating income | $ | 40,205 | $ | 166,120 | $ | 207,139 |
b. | Revenues by geographic, based on customers’ location: |
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
United States | $ | 759,611 | $ | 1,133,798 | $ | 786,019 | ||||||
Europe(*) | 661,542 | 528,197 | 297,684 | |||||||||
Germany | 692,047 | 449,160 | 191,066 | |||||||||
Netherlands | 326,314 | 382,226 | 222,103 | |||||||||
Italy | 223,943 | 330,565 | 181,644 | |||||||||
Rest of the world | 313,071 | 286,333 | 285,349 | |||||||||
Total revenues | $ | 2,976,528 | $ | 3,110,279 | $ | 1,963,865 |
F - 56
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
c. | Revenues by type: |
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Inverters | $ | 1,374,026 | $ | 1,137,142 | $ | 828,101 | ||||||
Optimizers | 902,411 | 1,135,040 | 828,542 | |||||||||
Batteries for PV applications | 378,275 | 429,119 | 19,531 | |||||||||
e-Mobility components and telematics | 68,425 | 94,446 | 68,946 | |||||||||
Communication | 32,945 | 72,812 | 24,111 | |||||||||
Others | 220,446 | 241,720 | 194,634 | |||||||||
Total revenues | $ | 2,976,528 | $ | 3,110,279 | $ | 1,963,865 |
d. | Long-lived assets by geographic location: |
As of December 31, | ||||||||
2023 | 2022 | |||||||
Israel | $ | 364,438 | $ | 333,740 | ||||
Korea | 199,422 | 201,731 | ||||||
United States | 47,083 | 12,030 | ||||||
China | 38,037 | 34,230 | ||||||
Europe | 23,478 | 21,282 | ||||||
Other | 6,288 | 3,710 | ||||||
Total long-lived assets(*) | $ | 678,746 | $ | 606,723 |
F - 57
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
1. | In January 2024, the Company entered into an agreement to acquire minority shares in Ampeers Energy GmbH ("Ampeers") from existing shareholders as well as through a share capital increase. Ampeers, a German-based company, is involved in the programming, operation and marketing of an information and communications technology platform. The investment is subject to customary closing conditions and regulatory approvals and is expected to close during the first half of 2024. |
2. | Also in January 2024, the Company completed a minority investment in Ivy Energy, a U.S. company that provides software to real estate owners for distribution of solar energy between multi dwelling units. |
3. | On January 21, 2024, the Company announced adoption of additional measures in response to challenging industry conditions, including reducing its headcount by approximately 16% over the first half of 2024 through an involuntary workforce reduction plan. These decisions were made in order to better align the Company with current market conditions. The significant part of the workforce reduction occurred in January 2024. |
ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Exhibit No. | Description | Incorporation by Reference | ||
Incorporated by reference to Exhibit 3.2 to Form 8-K filed with the SEC on June 2, 2023 | ||||
Incorporated by reference to Exhibit 3.1 to Form 8-K filed with the SEC on December 1, 2022 | ||||
Filed with this report | ||||
Incorporated by reference to Exhibit 4.1 of Amendment No. 1 to Form S-1 (Registration No. 333-202159) filed with the SEC on March 11, 2015 | ||||
Incorporated by reference to Exhibit 4.1 to Form 8-K filed with the SEC on September 25, 2020 | ||||
Incorporated by reference to Exhibit 4.2 to Form 8-K filed with the SEC on September 25, 2020 | ||||
Incorporated by reference to Exhibit 10.1 to Form 8-K filed with the SEC on August 21, 2019 | ||||
Incorporated by reference to Exhibit 10.3 of Amendment No. 1 to Form S-1 (Registration No. 333-202159) filed with the SEC on March 11, 2015 | ||||
Incorporated by reference to Exhibit 10.3 of Amendment No. 1 to Form S-1 (Registration No. 333-202159) filed with the SEC on March 11, 2015 | ||||
Incorporated by reference to Exhibit 99.3 to Form S-8 (Registration No. 333-203193) filed with the SEC on April 2, 2015 | ||||
Incorporated by reference to Exhibit 10.1 to Form 10-Q filed with the SEC on May 10, 2017 | ||||
Incorporated by reference to Exhibit 99.2 to Form S-8 (Registration No. 333-203193) filed with the SEC on April 2, 2015 | ||||
Incorporated by reference to Exhibit 10.11 to Form 10-K filed with the SEC on August 20, 2015 | ||||
Incorporated by reference to Exhibit 10.12 to Form 10-K filed with the SEC on August 20, 2015 | ||||
Incorporated by reference to Exhibit 10.13 to Form 10-K filed with the SEC on August 20, 2015 | ||||
Incorporated by reference to Exhibit 10.14 to Form 10-K filed with the SEC on August 20, 2015 | ||||
Incorporated by reference to Exhibit 10.11 to Form 10-K filed with the SEC on February 22, 2023 |
Incorporated by reference to Exhibit 10.1 to form 8-K filed with the SEC on July 7, 2023 | ||||
Filed with this report. | ||||
Filed with this report. | ||||
Filed with this report. | ||||
Filed with this report. | ||||
Filed with this report. | ||||
Filed with this report. | ||||
Filed with this report. | ||||
Filed with this report. | ||||
101.INS | XBRL Instance Document - - embedded within the Inline XBRL document | Filed with this report. | ||
101.SCH | XBRL Taxonomy Extension Schema Document | Filed with this report. | ||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | Filed with this report. | ||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | Filed with this report. | ||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | Filed with this report. | ||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | Filed with this report. | ||
104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. | Filed with this report. |
By: | /s/ Zvi Lando |
Name: | Zvi Lando |
Title: | Chief Executive Officer |
Date: | February 26, 2024 |
Signature | Title | Date |
/s/Zvi Lando | Chief Executive Officer and Director (Principal Executive Officer) | 2/26/2024 |
/s/Ronen Faier | Chief Financial Officer (Principal Financial and Accounting Officer) | 2/26/2024 |
/s/Nadav Zafrir | Chairman of the Board | 2/26/2024 |
/s/Dirk Carsten Hoke | Director | 2/26/2024 |
/s/Marcel Gani | Director | 2/26/2024 |
/s/Avery More | Director | 2/26/2024 |
/s/Tal Payne | Director | 2/26/2024 |
/s/Betsy Atkins | Director | 2/26/2024 |
/s/ Dana Gross | Director | 2/26/2024 |