SEDG - Earnings call transcript Q3 2020 | SolarEdge Technologies, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, everyone. Welcome to the SolarEdge Conference Call for the Third Quarter Ended September 30, 2020. This call is being webcast live on the company's website at www.solaredge.com in the Investors section on the Event Calendar page. This call is the sole property and copyright of SolarEdge with all rights reserved and any recording, reproduction or transmission of this call without the expressed written consent of SolarEdge is prohibited.

You may listen to a webcast replay of this call by visiting the Event Calendar page of the SolarEdge Investor website. to conference like to now would turn over the Mr. I Investor at SolarEdge. Sapphire Funari Relations Investor Michael Relations, for Please go ahead, sir.

Michael Funari

XX, XXXX, quarter Good afternoon. operating September review XXXX. company's third Officer. SolarEdge's today the With Ronen fourth Zvi the Zvi to fourth us will quarter, quarter will of brief the Financial as quarter a third third XX, results outlook of Chief quarter financial ended of Faier, ended for Thank you company's and the results Lando, for with September for Chief joining Ronen Officer; review the as the results the the for begin well XXXX. outlook for me XXXX. for discuss are the by Executive followed

supplemental certain Please non-GAAP today per this slides net share, Technologies measures description. in how contained isolation be with material in management not this copy of open website. from in means the Please the call the provide to questions. We more copy from, the the prepared rights financial then the current will the press that measures the with note U.S. that earnings risks investors release and The they webcast for presentation understanding a These prepared materially net is all considered income press call and of as reserved. may include the and All not the operating sole describes section encourage substitutes SolarEdge quarter a will have U.S. to including of statement in cause performance. evaluates obtain evaluating complete company's GAAP. the and Investors the presentation not differ management's for with believe our property release by accordance this presented could to company's involve Safe in uncertainties and September or for statements non-GAAP ended Harbor company's visiting forward-looking review non-GAAP of Listeners GAAP. contained we material should diluted XXXX measures non-GAAP a published expectations. measures, accordance you copyright as note non-GAAP results who do XX, or in are that which actual superior We measures are with

Now, to I turn will the call Zvi. over

Zvi Lando

quarter-over-quarter. well-being continue on third Mike. you, without changing increase $XXX.X solar call. offices of us million, I'm Thank conditions interruption also impact for America to our afternoon quarter’s despite employees, slight all almost Today, including of to and pandemic North we Europe, lockdowns the regions Israel, second announced joining business $XXX.X solar travel our global above were revenues report and happy and function quarter million, you rapidly on wave slightly revenues. of for managing the a and Good while in to our thank of and restrictions. we regulations, the the continue that quarter in the all previous in and third conference the business health our Revenues focus approximately

to $XXX.X such quarter quarter. which as us, territories of the of up as in revenues and solar last million experienced from in well high record saw we this smaller growth $XXX.X strong all France, for record strength Germany, quarter, and million due traditionally are This markets Switzerland, Poland Europe, which Netherlands in as revenues

quarter-over-quarter We both rates growth while throughout teams and our America, local are that North in sell-through reported increase Europe. quarter-over-quarter, we support comes saw offices in from by significant installation the did In not strength and confident our revenues continued distributors.

more in commercial at XX% than August, when September, higher month a the in XX% up residential fact, by in sell-through and than distributors level compared our same up In reported sold in megawatts and was XXXX. to

a are in level. North products however, As an overcome The Australia that a increased the sales and situation commercial in pace, and pandemic. the the And will approximately months still EPCs the a quarter. in and Initially, slower growth we faster similar America U.S. commercial result, anticipate thus, pandemic in are as distributors recovering North than and in the America. Europe In fourth Europe healthy channel at was high. current expectation inventories commercial, at there XX% residential the in of more first during even such, actuality, residential both installations is distributor our and in in and inventory residential of inventory in and complex are

continued we Taiwan from of outside Japan. see As North and regions Australia, America and revenues for strong Europe,

and shipped we On optimizers operational power million XXX,XXX quarter the manufacturing X.X side, and overall inverters. this

we and quarter our optimizers Israel. the X, shipments from to new of U.S. inverters in Sella factory commercial began This

addition new in non-tariff travel manufacturing accelerate to other In from products, this limited to just we drive especially hour and development of sites. factory, product labs, capacity an to team when R&D during this our period are enables us providing cycles,

Hungary, to Australia. of inverters compatible with in equipment Hub and with U.S. Europe non-tariff developed in storage product various Sella to quarter the we and the to of U.S. our more way with of demand define Vietnam around for in to contract is our Energy processes will quarter, this we strong Sella that segments. world. continue QX inverters In sites products, XXX regions. in X,XXX marketed and intent produced X the in kilowatt and and Our ground small and and access in expect new example, currently the inverters XX% over X,XXX Sella manufacturers XXXX By us X the come storage approximately the ramp copy delivered this continued first products mount we to intended prototype X, for manufacturing With mid-sized coupled from see compatible shipped introduction late to utility inverter units planned give of the contract

comes thus and systems having install Our This of in services. third-party on one the of of that self-consumption, that course fully integrated proven and with the to grid of our leads availability battery. batteries. XX,XXX has of global the DC believe itself and about solution, backup, timing enables residential maturity multi-year systems storage residential installers own is scenarios appreciate current that base homeowners We coupled installed benefits

While restrictions production the And residential the planned, dates. and expect our by target impacted months. global will associated pandemic release R&D we of activities several travel have battery delay and as this our continue certification

the With R&D current limited sites in travel travel restrictions, our certification manufacturing teams the to labs. are and

early next more aiming ramp need that it While for revenues still we up pushing only likely for of and are and XXXX, communicated, to consequently shipments as year. will previously year, initial this this in QX happen battery-related is QX

market collaborating on the D as with that quarter in new them home constructions. needs enable collaboration new development this side, Energy new system. easily homebuilders to intended product announced initially to of is The we Schneider’s a where Square serve our solution by and of homes the on on Additionally, California, was are solar Hub is and will integrate Center inverter Schneider Energy Electric, now all with distribution required seamlessly

opportunity the products We the are brand enthusiastic about market, to new this we and us which currently home collaboration to as give introduce this SolarEdge an will underserve.

X-phase our Australian product This We in new also Australia. residential approximately better a of released to us shipments market. for the volt residential inverter gives XXX XX% access beginning of

positive production inverter residential we quarters of in the capacity of We momentum markets, expect the add In new a commercial market to Australia. commercial ago. recent quarters to the larger it the will industrial released we in seen we ramp that couple in and have continued

as reduction to per In aimed for The optimizers cost enables per practically are volume of have addition, higher watt of This new up cost is accommodate effective the with increasing we of adoption. that types modules favorable to power to the compatible cost driving to smaller watt with strategy series of reducing watts. optimization, a trend accelerated gaps inverters and making released good also in of of and optimizers cost line the it XXX all is business, of our module, modules our string outputs market. recently to available in is in the the module

system rooftops As already EPCs who wins interested a our large ground with due design the provided small by the until mounts hesitated cost safety are monitoring scale investors and and we in to gap. and capabilities now result, in seeing

the recovers our as is United significant this offering, basis While utility market our in services add grid been earlier, and has see segment a explained platform plant the market In to States, virtual to growth during power customers to Australia. commercial XXXX. COVID, continue I as in quarterly we the Europe slow expected on

our continue non-solar to also become our business, diversify businesses to including In SolarEdge. continue triggered pilot grid This which sites. for growth of frequency We our to a commercial we product in curtailment pillars project. are services additional of first these heavily invest non-residential offering is of

a and automotive in to deliver known significant we OEM. quarter $XX million, Our gear from significant was we full as prior we as increase solutions first approach powertrain non-solar to this manufacture the batch this a gradually to quarter, expect $XX revenue of milestone and the up million up

For XXs kits is through by the expect mass and the accumulating deliver to an electrical have an miles process. powered going extensive quarter, XXX as last been additional months, XXX our qualification fourth full scheduled six we powertrain vehicles of In to powertrain units to production begin.

control powertrain As and motor units. a includes typical batteries, a reminder, vehicle inverters, kit

this and interested And available become yet and refer solutions. in materializing sustainable review e-Mobility the to website. to that the energy the While a revenues and into SolarEdge new leader Sustainability investors our note, will meaningful who this, vision morning in financial the want Ronen Investors section and margin, global significant for market hand published to is results. with us in bigger our first this Report I I towards it over not smart, step of On to our

Ronen Faier

Thank you Zvi afternoon everyone. and good

the results this the always, and a and on As reconciliation GAAP release website discussed today. GAAP issued Fully in our non-GAAP available of is my call in includes press discussion. a review performance

compared represented last $XXX.X third products solar the U.S. million were quarter. to an the and $XXX.X higher revenues. compared were million our solar million year. $XXX.X decrease increase million revenues X% the quarter, of sale of the quarter quarter last last $XXX.X a and million, than this solar XX% same $XXX.X to revenues $XXX.X million slightly were Revenues XX.X% from total quarter For for

and the XX% Europe United our of outside products XX.X% solar our megawatts customers last reached Two and XX our solar XXX shipped quarter. of products million, commercial accounted $XXX.X of million included States the to we compared distributors last and With our per world. a quarter our products each. than quarter XXX our revenues or quarter solar ASP basis, increased Solar approximately to XX%. $XX were this of of representing European XX% rest XXX were quarter. generated customers Europe more the this our quarterly than watt of XX% revenues X% for represented revenues States, of by revenues. from of Blended more XX% Residential quarter top to Europe represented solar the from megawatts record United revenues and megawatts to quarter. Revenues megawatt the high On this delivered this megawatts

same compared in margin non-solar led sold quarter was same revenues and last made last improved products XX% reduction of and a XX% machines the Chinese in quarter year. to in mix. Kokam quarter, million on the is XX.X% lithium-ion exchange in quarter, gross and and in for custom margin of rate critical that to Non-GAAP business sales Europe, United overall gross our our power to the increase quarter in are GAAP products XX.X% by the of gross in by volume product the sales batteries year. the subject This was the our cost This e-Mobility, division. this coupled $XX.X compared from XX.X% the products a States, of prior XX.X% automation XX.X% last with increased prior were sales quarter quarter in was and to activities, in XX.X% tariffs Non-GAAP solar reduction the result for margin quarter. compared by

increase approximately non-tariff quarter, until United of ramp to continue second production quarter, X production business and in as the production. continue Cost sold the we quarter goods will factory from included into of the of products volumes. This in costs this this related of XXXX, XX% to the came solar shipped the Sella States our

enable from preproduction non-solar was higher offset our to previous the Non-GAAP shipments quarter. Our product compared e-Mobility result margin lithium-ion increase XX.X% of us quarter. in in The an gross margins normalized increased sales, eliminate was inventory by expenses. levels this air to activities a XX.X%

that e-Mobility division by for XXX for is of QX. components in Zvi, that powertrain kits part Italian highly contract in includes XXX to in produced mentioned preparing a vehicles our by The system electric complicated several is manufacturing As manufacturer assembled facility. and powertrain supply our are

employees includes that cost been in number Italy During associated the and in building of last the goods our quarters, manufacturing we charged to an expenses capacity increase are have sold. of that

small e-Mobility are and of characterized this number the process, units, gross the with current margins. manufacturing of manufacturing start-up the low complexity of the phase Given sales

operating operating third quarter quarter XX% $XX.X to revenues of Moving or $XX revenues quarter, compared last to revenues year. and On for $XX.X GAAP were operating million, total, million, revenues, same basis, revenues prior compared million for our of XX.X% last $XX.X of million revenues, a the the non-GAAP of for $XX.X expenses. and $XX.X quarter, year. or XX% expenses of In quarter same the or million, or in to was prior quarter or XX.X% or the XX.X% the for XX.X% in third expenses million of the

continues selling in company activity, of response The from litigation to solar a allowing growth under first in cautious to is at an the the the company end increase businesses in on organization. while reduce pandemic. IP China spending, in R&D R&D reported, OpEx the mostly in G&A in mainly remain the provision and global that expenses equipment measures is quarter, appeal. related judgment non-solar the The As to spending took previously to resulting

Our revenues last XX.X% of percentage to non-GAAP were compared solar quarter. XX.X% expenses as solar operating

same to Our $XX.X the compared for and year. quarter $XX was quarter quarter, operating income period GAAP million million, to previous and same Non-GAAP in was in quarter, the last $XX previous the year. compared in last the million for operating $XX.X the million, $XX.X million for income $XX period the million

the as of income loss financial higher compared to $XX.X an million, million, offset was for income to non-solar of investment power $XX.X of activities quarter increased the of a result by in $X in activities and expense critical non-GAAP $X.X in million operating profitability loss previous in compared the quarter, Financial previous operating in of business. quarter, and a resulted battery million e-Mobility our the the currency $XX quarter This million is loans and intercompany provided changes result fluctuations, acquisitions from in a the million expense income for exchange this foreign to of the $X.X $X.X the mostly quarter expense Korea intercompany $X.X a of was same This for Italy. rate same and prior million and treatment quarter, million tax period accounting period of last year. unrealized and Tax year. in compared last for resulting the balances financial

million previous year. $XX.X stock expenses in expense the quarter deductible million, compared was of the same $X.X of for tax to Our non-GAAP $X.X related result to higher last third our last a to employees the XXXX. options income was and exercise QX the Mainly million stock quarter $XX.X employee and compared quarter units million in net by GAAP previous in net same in year. $XX.X the GAAP and million for of the quarter million a $XX.X quarter restricted income

year. last to Our income XX.X a last net GAAP million the third share $XX.X non-GAAP was quarter was earnings quarter million the $X.XX of income compared $X.XX the $X.XX million and the quarter diluted last same net previous non-GAAP $XX.X in net the diluted $X.XX in for same previous in per net to and for for the year. quarter, $X.XX $X.XX, the EPS GAAP same was the and quarter in to year. compared compared Non quarter, previous same quarter

Our non-solar an loss. earnings diluted businesses non-GAAP per $X.XX generated share

Turning the sheet. now to balance

of a of XX, deposits increased September raised investments at deposits, deposits this and deposits, restricted as bank of were the debt, million. cash, As equivalents, equivalents, end bank convertible Net XXXX, cash billion, our and of cash loan were investments bank cash, $X.X $XXX.X result significantly restricted bank quarter.

quarter. receivable business outstanding this from last was compared in XX of million operations. net Days from million During XX to last the this to we quarter $XXX.X decrease increased a quarter third sales generated quarter. flow days in the solar XXXX, days, million cash nominally $XX.X quarter Accounts $XXX.X

to customers reliable continue from general payment We see back our are our to in patterns the and credit times. terms pre-pandemic

result inventory XX, XXXX, for reserves, of in $XXX.X good raw September level e-Mobility prior $XXX QX compared deliveries. level, increased quarter. planned of in is products, As was the to of our schedule in million this a the be net allows higher inventory customers flexible to materials million increase our both inventories the the of finished to delivery us in solar division preparation of and which at

the the for to now fourth Moving guidance of XXXX. quarter

for the XXXX be to $XXX million. within million Revenues to fourth $XXX revenues expected of within are $XXX million. sale of the to $XXX the quarter expect be products We of of range the range from and million solar

for margins be over is expect turn please? the activity I We will to to expected be now for margins range non-GAAP the gross open call XX%. Non-GAAP of XX% gross to to up the it to XX% to the within questions. range the solar within operator of Operator, XX%.

Operator

Instructions] [Operator Morgan. JP first today Mark Strouse with We'll from hear

Mark Strouse

wanted XX% kind made that of around your C&I than to reconcile the about comments with your comments dig C&I. Just greater distributors uncertainty. in from you sell-through in on Can think I you

First of of global number, And you're number? all, about Thanks. then kind being help me the with your commentary kind was and what was from U.S. hearing distributors things resi? two of that recovery out that those just than think the that slower a

Zvi Lando

So increase installation and very sell-through of our high. month several in indeed months America, and commercial the a products it’s positive first distributors rates and sell-through was after significant the in time consistent not North fairly were December where a of through

the high. indicator. So At for is positive the time it's -- level explained, a inventories the the inventory same that reasons level I still

resume. from that sell-through more the believe will sales significant us will to until it of attach we few take rate a months So distributors new

sales. commercial will we fourth of terms sales still that's inventories the will be market the as see in quite the that growth we low decline, and of but quarter think why XXXX in So a growth

Mark Strouse

in kind And then countries certain internationally. of around just general lockdowns certain news

at starting that all? to impact if is your business curious, Just

Zvi Lando

is same line with message. this the in So

that round the during of residential almost XXXXs, world throughout reporting than were the without continued most was of first early Europe of installation the rate in we we residential the So a still of at interruption. during first pandemic, And lockdowns the saw in as lockdowns XXXX. installing also phase higher

well So countries. the will that this and in same Australia lockdowns also Europe, and installations the and residential the we will during no be signs to Commercial, residential, we're other in mentioned signs and slower be U.S., also also of is increasing the the we round are as of time, as Europe. continue recovery as is of as slowdown. than I commercial before, and all can in behavior believe that at tell, a continuing pace now seeing that far also although the At this in

the I would to more for As be that around move will our that has months I said, ease. constraint us lockdowns bigger, a And least of to people say the is at and around. definitely begins impacted the ability couple until probably

Operator

We'll Rusch Oppenheimer. to go Colin next with

Colin Rusch

What a annualized are talk you what's gross on the going seeing mix what’s growth bit Can with you quarter-to-quarter? from driving rate margins? little about perspective, on guide an that

Ronen Faier

following the changes the the time, XX% that sales to when decline the close margins. States, we seasonal and hand, U.S. the especially combination we the higher the general, gross in in the vendors. lost because to first the margins. the selling that resi, actually United lower first the residential that characterized XX%. effects as And was from QX QX. that is -- the from is we margins. to more. And mix little more way, same at what euro are at a that that as Zvi is is Europe. the gap in In a due increase usually by with fact mentioned, And fourth to as the we're we This On sell-through not sales, helping States see QX are all, see do in move in higher United helping the into quarter time, almost see see therefore, bit sales QX, we in a of the it's of going gross about resi to sales -- was from one we big moved Europe, the see By So it there during is in this are to

bit little a is difference smaller. the now So

the this thing happened one. that So is first

continue we time. but we bit to to at higher P&L reductions. still cost The do reductions levels second that are slower issue is realized materialized inventory the Cost had, they over are time now a little given same the that the

helping So I effects combined margins. growth solar these are in together think gross the two the

the this you are despite growth the same non-solar As to increased remains is the sales it of consolidated our solar overall in saw say, guidance, These therefore numbers. the margin when and solar actually in or that gross sales the for comes lower volumes with lose, that in the the reflecting to guidance the margins, were going of characterized they business are to the the to sort and increase e-Mobility. gross

Colin Rusch

customers working then far you can Zvi kits in And at business, on the you're sense their Obviously are market how these but are shipping process? development they that are, wanted a just you to kind be who and and sense give powertrain along a into how just a that out. they slow this with Can that, of us of point? emerging deep how market of many get

Zvi Lando

size working significant to that significant one the one customers other We're much, with project of is much production. and close a working cycle. earlier with at but start-up We're phase very size customer

Operator

next Credit to go Mandloi Suisse. with We’ll Maheep

Maheep Mandloi

like significant XX%. how residential Just you of talk about mix, just the on growth could the commercial,

go said flat to And XX/XX-ish residential year? residential. just I that we Does for and back wanted see for you shipments going that that from QX forward, think QX do -- how I for range you imply saw to to about historically we still think QX should mix year-over-year? U.S. next

Zvi Lando

our the quarter in this between last year difference fourth harbor. the safe is -- to big In year

residential revenue. there no safe soon in America So our shipments are harbor QX North

of of last still a partially harbor lower rate and it's partially at period safe XXXX. than So the it year, down significantly from is same because

Maheep Mandloi

think And said few delayed if most if coupled, product And could But of the confirm opportunity you how where an which months a for any or so battery you solution? been beyond for you was AC retrofit by customers coupled plans coupled that launch, have do far solution? just DC here. high level this that would opting AC on have you the about be an

Zvi Lando

a we that proximately significant with this DC systems coupled XX,XXX number storage Chem is batteries. Obviously Tesla that storage when system. harvesting, solutions LG are time that advantages modules I have As believe has and -- batteries, resilient for of blackout power. -- of energy residential to of the third-party typically PV of the or other you’re the originally compared period XX,XXX that to DC of mentioned, we it allows lot are coupled the oversizing and all of and installed, quite and extending that -- any during and a the absence of

So efficient, -- conversions it DC forth number and AC. more because it's the to and reduces of from back

the and -- adopted as believe DC idea the customers said, coupled system better. we I that is So many

Now, installed XX,XXX these coupled in we many are on that AC of have systems top an configuration. still

to primarily coupled, be do coupled. battery be DC that's be AC able it reason not the won't technical way because to Our right why any it's will there's it. But just

Operator

Partners, ROTH Philip next we'll from And Capital from hear Shen.

Philip Shen

you weakness? it plan I that you guidance look or you potential on don't year? Thanks. expect through possibly And also trend next was In market. the the I terms can but much could were looking strength know revenues solar Europe, then talked through, into the reasons how haven’t what the know about wondering you than weaker as U.S. we for given you and expect XXXX, outlook, talk talk to if it in and And of was QX. resi I you in you solar for

Zvi Lando

the tried factors in to explain are, are I as in the that we is think in below I what seasonality in and Europe. comments, say, QX shifting two down. would expectations or summary, One So the typical there

is excellent been us practically It's us every pretty down to has to QX, year. going as is year. QX going in for Europe QX. be good this It So it's for be been excellent in it but from still

challenging second element commercial. The is

earlier expecting of North QX going periods to we're levels revenue close the Those growth for to significantly the has on and up not year, quarters, pick declining is QX same in the rates significant positive QX. they are if So couple coming you than installation below of America in will last year. where for to inventory down last expectations the those and been from are residential us as and it's up were and the of are commercial

Philip Shen

in then terms And 'XX? Zvi. Great, of

Zvi Lando

our we go, early that year segments, segment challenging cetera. will with of the part, and then bigger the coverage most can will XXXX our segments anything, recovering worked as we obviously, across to us in more from in market in great far product board to the the say, a we for terms ago. better a is parts -- us the times if at of We point strength are, share are of XXXX. in would for and covering diversification, very say that as marks in and the the than of et enabling geographical larger we question all around So And as spread view, of market. put it's position during a be then I us for look geographies in we believe same because meaning situation good all pandemic, market the a were a a we most inverters from cover segments commercial position position most countries

non-existent like residential the offerings which additional the market, to of gives in practically that added we Some in. home or weak were Corporation the like we previously new Australia, us very Schneider that access

it's of and better of how try revenue out And the will all the market kinds actually So will the at also our our in share and on have. geographies putting point we that, affect in that any start very early to that's external and in. our mark together, optimistic the we predict what position terms control, feel in than we're what those XXXX, or some of me -- is for the of publicly published. kicking difficult about question in XXXX again, dynamics The control, factors offerings in is and battery

Operator

We'll hear Needham from Jim with Ricchiuti next & Company.

Jim Ricchiuti

C&I The U.S.? in and the commercial business, is more that concentrated

Zvi Lando

those, but significant No. C&I in in It's in Europe. significant it's Actually, very a the to still is very business And Australia. business compared is strong and a C&I U.S. opportunity. business our our strong smaller

Jim Ricchiuti

So the now seeing geographies, positive more signs when U.S., important those? some talk business C&I to about clearly in September are the of right which you what in you other are some seeing in

Zvi Lando

the the I don't maybe. So of XXXX, on down mentioned will these XX% top compared up be in probably while to compared ratio again, of but will regions in Europe XXXX. are be I the residential in the remember range the to I head, have number And in C&I don't XX% exactly. of my Australia down, both XXXX market and market the to markets

So that regard. that's roughly the C&I in

Jim Ricchiuti

And Okay. Fair levels may should I for have we we your R&D some on moving just How OpEx, just of higher? thinking I'm the one, some current Ronen wondering how it. and with a OpEx, that be about about up quarter? have little given thinking just But enough. missed should just be particularly may color

Ronen Faier

close in So very bit in compared what of we see little to -- a be in to QX general, it uptick. with QX should an

an we and mentioned businesses all, in we developing, we As mode. non-solar before, businesses, first are these investment are that in the of are

that means are R&D. that we increasing So

And additions of to the customers market, though, marketing is activities, and other bring in it. the a from In we comes little that are that now major more in We markets. new to all, R&D no prior to able cases. using to some are end the are solar increasing see trying see we we not therefore, we COVID, we people maybe needed business, talent now And the bit here, sales -- we opportunity companies. When that first do have and were in it mature. we lay-offs opportunities approach mobility saw to the most more are

And not as are had I remain that may G&A external not it, within the controlled relatively to, something can today, So in we marketing Sales control, grow. for extensive insurances, factors can in we be but our similar. accrue judgment more to a the we that most we that would see related that are call company. R&D changes QX needed that control and of general,

Operator

with Brian next hear We'll from Sachs. Lee Goldman

Brian Lee

a And basis? levels off, And them where us you a C&I trending today? on market they follow-up. are just that's quantification kind general? bit situation, you been give Europe. had And against then an more where you're of I guess, around inventory competitive on in a first area the had And where then going you've a inventory bit the are suppliers, Can forward? see always in sort weeks pricing peaked in space, that of you more how of I seeing with competing getting given

Zvi Lando

So trying out to pull data. exact the

for well, feel it. So to give just a

levels inventory the about products the for commercial Europe are in for quarters. range, are inventory levels products X-week While residential X.X in

we're So XX, XX about weeks.

the So for residential that's in level versus C&I Europe. roughly inventory

please? the remind The second Brian, me, part of question, just

Brian Lee

given just some you're the side? trends, being on more competitive if pricing peers inventory, around or your pricing seeing the of Just aggressive

Zvi Lando

Yes.

and string So than the in for higher standard the particular, is globally, MLPE only C&I, in price significantly the in in the C&I inverter practically particular, in in pricing difference our are selling price Europe, between Europe, region. quite

get delayed, and the So is project do the it small our of higher pulling decisions. out market don't gap investment delayed, projects is the resume It's will But or solution as expect now, is that these impact big gradually projects on with And MLPE price as of solution, types not and not they're with pace. project product just distributors companies and that in not of to fluctuations the we are being constructed at as being the a their moving will those what the are long distributors execution so an is back replenishing. slower really the chose to the right -- share such. that's

Brian Lee

the a you question, point resi just about basis second and And you U.S. basis then to mentioned XXX margins, point between for Fair XXX C&I, Europe talked had think delta example. Okay. Ronen, I a enough. historically,

compressed. where best us of XX% sense it the thought you I the just And then growth maybe for today? it's context, end been market, quarter-on-quarter give is resi. that in I'm the would Can so a margin And given sorry, have like for -- it sounds U.S. better guidance today, margin your QX

and margins So the maybe bit a bit why maybe are moving moving all pieces of could guidance you color if a just QX? provide for higher in little those around

Ronen Faier

Sure.

things. So of several a it's combination

would margins many about are due now that States. I close was First But there XXX are especially when when basis that to at right euro coming, the points U.S. we're basis before, it's assume of comes against moving I all, of strengthening to closer say XXX today, parts to the that talking it point time, to this if would points dollar. it the United

of see of a usual. products First lower bit business tariff costs. are higher that United more China. we countries basis are holding with And have non-tariff a the States, expensive of ramps on in the into up, manufacturing all, as areas margin going the today little a therefore, than products from course, And the actually, tariff we the those still than on like-to-like specifically,

factory this that into still to sales is ramp-up that two will you second that we're that our from a the have some not fact is a factory those bit up a are the towards means XXXX, that a into to more that that, now Israel, little the of X to straight phase, Sella even of that coming built the now and part products. specific shifts shifts add You This are day. again, going in which X quarter go costs United into means going do States do

these in for elements would on is we the cost sales second products, of more them cost than due the have of So the U.S. first And lower U.S. into that all, we the difference euro margin our compression I the go the -- today elements Europe United products. reason euro. when of and in because non-U.S. the between and States, the, growth the the say, are added on the to sales in more

Operator

Securities. [Operator Instructions] Osha from with We'll hear JMP Joseph next

Joseph Osha

questions. Two

dilutive looks e-Mobility. business level have of there's is to level? the need follow-up. what that e-Mobility to would where this understand a the We've that to the I'm case success the scale heard then like is return of Does rest get about a eventually out to business the business like? I get And margin at First, trying that near to for point at? do I'd And what how to sort term. of roughly you

Zvi Lando

this important, So first, that it's is a long-term move.

is technology So Day, obviously, on well also And Analyst at huge. within the as and we strength the it potential the believe we explained company bodes technology. of manufacturing our that this market in

scale significant of in But much the industry. the that years away. the more is is So scale potentially, PV

and beginning we're production which as company And the we're were that next cost automotive to reduce selling and from acquired. is way is when limited at we improving acquired what that in margin a is quarter what we moving a us, X were beyond as XXX, profitability units ability success looking months. in to the optimize moving our And to today it that move result, is products qualified of we of go this that For XX in we're to the do along, operates. before and and of now, tens the industry the thousands

that in So on flexibility, path see that months. has is until that a than terms of something begin to will potential while is X but it long for to it potential, scale shorter already a there's top-line, we tremendous benefits materialize to sure believe XX within

Joseph Osha

the talking to overall units. of you when it from the quarter, about Okay. e-Mobility to tens I for model. first we mention financial guess did going hundreds was thousands the units this fourth sort units of into the And talked clear, was of calculation time then heard to about enough the that hear you big beginning you but I that's quarter, of for blip

relevant, this from become say, So going is to months now. XX highly

to of So understanding brackets this that like, some financial model any put around is for is early what there way still mean going days? what it's the you kind looks help us can

Zvi Lando

Yes.

into for some still contracts a we're it's specific that to the that a frame. XX us short the million to still that is the it's give to doesn't of solidified you I it We're At allows more that coming in -- allow in which of think of the us closer regard where really this we you it, that early give fit quarter, next, model number model handful for for months. of positive in in the mid-term this the -- a point range I call company. point, impact XX to terms in it's us think to to a information dollars

Operator

with Osborne Jeff Company. from Cowen & next hear We'll

Jeff Osborne

you late Most ‘XX? heard mistaken either I I if to or XXX-kilowatt I'm right, utility-scale the One, just maybe questions thinking year, that earlier is later this but out was coming was that for follow-up but things. X year targeted have of on the my been asked, timing. that, I next mentioned wanted inverter, on now

Zvi Lando

our utility at longer In type of and endeavor to into real terms this intend and first of medium do scale. -- beta for we especially alpha because is type which testing product, installations voltage

part will we in mentioned, XXXX. the shipments late in be year. of be began volume I produce prototypes. But as moving earlier into the So to the of only We'll alphas part real

Jeff Osborne

no? be clear, you the is time in to is with And just -- were or that ago, thinking line in timing a that that year or

Zvi Lando

yes. Roughly, Yes.

Jeff Osborne

storage Got that what exactly on is delay? months just few just comment to referencing the exactly of relates some it then packs? new the into unclear to sells were that integration delays third-party maybe qualification I was test? safety it it. the COVID? of type Can the crystallize one Ronan And what Or as the that's you referencing just leading had that Is you or on side. certifications you're

Zvi Lando

this the the similarly, to the in certifications, level, want we initial the to battery No. usually so becoming batteries all U.S. cycle there, would the in be battery full these not the taking in these actions longer. routes battery type the under are at cycles of production, debugging -- Hungary. -- to longer without the all corrective And it’s in circumstances. It's have we at it’s in going that system-level is presence on both is lab. condition, any units type level. we The line, again, factory began the R&D level, have producing seller the battery on pack or at And people in and And and full our it Europe that that is aligned people spot, of of

Operator

Marshall Carver Advisors. Energy with from Next Heikinen

Marshall Carver

targets, Yes, well? so -- so a last I question. the at as But are I Those would at -- year million in now the $XXX think as quarters couple the least of you the a this somewhat longer-term pushed XXXX. back the such with longer point, addressed battery this imagine

Ronen Faier

sales. in target million batteries on are the The be testing Korea. will gave, no. is is X-gigawatt on battery The to to coming first-generation therefore, we Kokum delay one a $XXX related coming is based factory on in shipping we XXXX the the that implying for from this possible now And necessarily third-party Actually, that based the our delay and factory. numbers the in not our that to delay the from U.S. that batteries to battery is No. Kokam sales

Marshall Carver

or gave for And number similar the in at weeks, commercial total you the inventory the give levels? helpful. XX XX Okay. inventory you company? residential for that Europe Very was could a levels to And

Ronen Faier

varies residential at that but the that quite weeks in couple a type And it's of level, range. countries, of eight was And in range Europe. a quarters. company it company around in between of also, similar little that level, for it's the seven, So bit

Operator

And at Zvi for to back closing like Lando this to remarks. I'd turn things any time,

Zvi Lando

thank So just everyone thank thank wish I on call. And you. and I you. for to just joining us stay safe the everybody

Operator

for joining conclude will that today's thank all And conference. Again, you us.

SolarEdge (SEDG) 2 Nov 202020 Q3 Earnings call transcript