SEDG - Earnings call transcript Q2 2021 | SolarEdge Technologies, Inc.

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Erica Mannion

Good afternoon. Thank you for joining us to discuss SolarEdge’s operating results for the Second Quarter Ended June 30, 2021, as well as the Company’s outlook for the third quarter of 2021. With me today are Zvi Lando, Chief Executive Officer; and Ronen Faier, Chief Financial Officer. Zvi will begin with a brief review of the results for the second quarter ended June 30, 2021. Ronen will review the financial results for the second quarter followed by the company's outlook for the third quarter of 2021.

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

will turn Now Zvi. the to I call over

Zvi Lando

Thank logistics discuss in challenges. you, and call. our today, new segments, releases And remarks on for introduction all the about at momentum my In our we you supply I'll us global update thank on navigating residential how the trends our joining battery are different conference and product in end, business Erica. of and the particular, the Good afternoon. discuss much talked

segments for quarter happy are record second both our report the to We non-solar XXXX. and revenues solar of in

this quarter, our million geographies. and our inverters. non-solar In record and our saw reflect the in as in consisting world, of well in we call from $XX business record Italy, as Overall, solar Europe of revenues quarter the than record by a and rest what segments across products. for consecutive outside XXX,XXX Our XX% of North Europe. the solar this regions and residential revenues million demand record this revenue quarter-over-quarter. U.S. total record $XXX grew of quarter revenues the $XXX third revenues record all solar in approximately we growth In America million Netherlands, power we from commercial were strong was U.S. particular, of representing of The led all quarter this five products and million Poland, revenue revenues delivery more optimizers In shipped business. a

high globally. commercial, commercial. addition to through in in consistent we and levels inventories seeing today our in growth, in rates recent healthy relatively historical quarters, both revenue are most of products levels, levels we sell channels, below in In residential If the discussed installation inventory residential and increase both and inventory in and residential commercial normal are

we which we side, the we expect customers. very ready good backup, couple well. Hub Australia. Energy as attractive the I the Hub, want of on to elaborate capabilities so shipping a quarter, begin shipping Hub product market. the the take to minutes Energy On And in residential began to European to in of Hub make of our this version to to it U.S. Energy year, the the the in Later inverter the see acceptance continue Energy of

the As designed control is of Energy reflected in name, multiple the energy its accommodate Hub elements home. to and inverter

inverters. the from our in is from inverter The are well recently addition charger, in functionalities released App, electric a controlled EV these to which of more that through two manage all battery, has as we controller, SolarEdge the of backup the capability, Homeowners Referring to today, heater of our the users during the critical, system the specifically DC-coupled Hub way additional that by a already example, Energy than ship system. utilization importance as million water battery Hub, with all For an of ‎mySolarEdge scenarios. a is coming to a in particular, storage maximizes energy date. solar DC-coupled energy Energy

As the the will by generated it system inverter. energy and harvest past, explained exceeds of the of into generated feed all the solar grid we system capacity the DC-coupled power when the modules by the a the nameplate when down, the is in battery even

benefit shipment months, outages As we our outage of of hours more XX,XXX frequencies been accentuated the installers are and DC-coupled this installed becoming Bank, events. optimizes homeowners inverter SDI SolarEdge from and Hub that more homeowners battery SolarEdge more durations with during maximizes systems enjoy Energy battery prevalent, architecture On uses XX-kilowatt benefited and this Europe. the connected by efficiency, three knowledge with note planned, seamless United our California system. high installation, energy of we alone, use from more of in the to our on and The can benefiting and SolarEdge of hour homes States their designed Samsung residential and grid battery past availability that the The provided benefit than than batteries. to XX,XXX Energy initiated our of power has the the and backup more see based of In is as X,XXX easy and for that integration our cells and while means experience feature. self-consumption

XX an the gradually are in signed the SDI we for order production provided In Samsung strong quarter. the with in supply be the gigawatt to cells plan agreement meet to demand, megawatts have to battery ship hour of hour of of We XXXX. between and one third to ramping XX batteries

Sella From in in with construction. half leading about under X We cells we are batteries cooperation to currently XXXX, second the a of excited manufacturer. cell high expect Korea, manufactured shipping quality factory on be this our based

new for with high X and various our cooperating and X we meet and expect similar while to that demand. Sella and give volumes contract partners needs cell augmented supplying flexibility which own battery will flexibility inverters X businesses, initial products, a Tier for volume for the needed as high for our have gives manufacturing we volumes of optimizers, us facility from by Sella speed Just manufacturers,

trends to Moving C&I in our business.

to of of ground-mount installations. have growth This We installations projects. with mount Synergy months, recent and steady targeting XXX-kilowatt release penetration which community of products. more small to segment, other shipping regions than give coincides XX well In installed utility and XX we rooftops are Synergy is in ground our kilowatts wherein momentum the boost will our recent that in a sales the recently than scale penetrating are our of projects. installation began inverter inverter, to we in both we solar, the believe the megawatts XXX market we as seeing progress U.S., commercial new As anticipated, seeing more

project begin delivery in and expected currently third to a For in Taiwan example, quarter. project in XX-megawatt we XX-megawatt have Japan the being installed a

Moving powertrain $XX through quarter, the ramp record primarily and million business, driven revenue in production of where our E-Ducato reported Fiat non-solar Europe. the for batteries of units we is by a this

We the expect batteries to these Kokam initial growth energy were to quarter the Also projects, Australia. volumes for one of scale contributing non-solar increase in revenue storage continue deliveries two-utility first this and the coming in in quarters. by of

to side, our component shortages, also industry like industries other impact with and COVID. operational the is logistic of the Moving dealing costs, issues around

is to in to this expedited Vietnam. logistics. and the supply call from years on multi-source the enables meet and at As challenge times, growth COVID us in A several a the we demand. temporary future point view, of component believe outbreak place quarter's current, we last cost At we due comes strategy ago, put a discussed higher

ago, of couple reduced production government a in level lockdown. of our contract is As due Vietnam, a in that factory weeks manufacturer’s to a mandated

built requires This shipments in We really will Hungary operational portion the China on manufacturing over we challenge our to some in by visibility, growing All this, due expedited our additional all, higher hand ability from confident tariffs of the coming continue current our facilities are thanks who and mitigating and with experiencing the our are to China, to demand short-term States. products. into increasing the to we in I Israel. flexibility that financial United and it meet in are to shipments output results. review based a we Ronen And strategy, for our have

Ronen Faier

reconciliation and were XX% Revenues this we million do issued initiated million GAAP quarter to the quarter compared last $XXX.X our the end the year. increase, segment increase non-GAAP last Thank This review $XXX.X Total the the were residential from shipments, of solar GAAP quarter. $XXX.X $XXX.X is good represented release same second revenues to revenues. revenue you, an million, a available a $XXX.X U.S. XX.X% battery quarter for compared The of the at to website in forma million and of for call quarter revenues pro million today. million, solar results solar which to on And everyone. not Zvi. include quarter’s increase our compared includes last XX% were XX% a discussion. afternoon, quarter. $XXX.X this and the Full press and on financial discussed a

shipped we commercial XXX XX% were to the remaining megawatts this products States, XXX million United revenues were the were revenues XX.X% of and or solar rest $XXX.X of the On XX.X% the a $XX.X megawatts world. revenues. of million solar rest Europe from or our the to to revenues total Europe record a Solar basis, megawatts a our XXX were amount world megawatt XX% of of record and the and residential.

since increased compared solar last usual solar due to approximately temporary notified the and price This In increased quarter, of third pricing than for stable we of XX.X% a logistic quarter, our the than accounted revenues. customers XX optimizers to general, revenues. to modest support ASP for solar U.S. Blended the this manufacturing Two inverters XX.X% of higher environment our our XX% customers top while quarter, was represented optimization. ratio remained the of increase customers expenses. freight more quarter, by to our

from where were a our Stellantis increased led of Kokam’s revenues continue were grow and the by $XX.X record by record lithium-ion e-Mobility powertrain cells. batteries of and to million. This revenues Division, quarter, segments sales to This sales systems non-solar

and quarter XX% prior quarter quarter and segment margin increased segment gross a in the by points XX.X% prior this margin in continue of total non-solar higher was the revenues by the upcoming GAAP was expect year. Gross to in solar quarter the solar plus-minus same the costs last costs. margins gross the quarters. long-term proportion in margin compared comparison the to gross from solar last freight XX% segment affected revenues compared the was XX.X% year. the for prior last quarter, logistic our the basis In approximately and XXX target quarter compared to We XX.X% of above XX.X% in same in XX.X% X%. margin as and resulting to Non-GAAP quarter quarter for the XX.X% to XX.X% grow gross was

powertrains $XX.X of compared mainly a of of X.X% at sales quarter operating compared of segment positive million on our non-tariff to in or to million business, quarter Gross for healthy same that margin the to revenues from revenues States departments, basis, year. or was headcount X.X% came expenses increased storage second production increase the or our million well due the for XX% United of level the margins business. April non-solar quarter salary quarter, increases is sites. the the products $XX.X as to non-GAAP minus XX.X% came and On of R&D effect were and from This last previous XX.X% manufacturing from imported This X. the in in e-Mobility quarter with $XX.X XX% combined prior result increased our as a revenues for into

compared as last revenues the million Non-GAAP year. to operating and million XX.X% in was $XX.X expenses quarter for same compared operating solar for quarter the quarter non-GAAP the last to quarter. previous of million $XX.X solar income XX% $XX.X were Our percentage

million the operating the $XX.X currency non-GAAP loss to stable solar million for the financial previous quarter, This generated quarter. is quarter. last rates. million and XX% Non-GAAP in financial $XX.X of segment XX% in operating income model. the previous foreign profit revenues to due expense number of improvement million to the profit $X.X quarter represents an of compared segment This profit $XX.X compared million quarter, of an generated and solar $XX.X operating exchange our XX.X% operating operating The our non-solar an of million an to compared long-term $X.X loss in a the relatively midpoint to was of of

last same tax million in to the period non-GAAP and Our million $XX.X in was the GAAP quarter net quarter $XX.X million quarter previous income $XX.X year. was compared income in quarter the million and GAAP second the $XX.X expense million net previous of $X.X a for the compared $XX.X last for to same million year.

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

balance the Turning now to sheet.

deposits, deposit and million. cash, June and Net $X.X XXXX, of deposits of As equivalents, bank XX, billion. were cash cash restricted bank cash, investments debt, restricted equivalents, investments bank were $XXX.X deposit, cash

to second quarter cell the this increase result Korea, construction sales XXXX, continue XX the and $XXX.X X last increased of credit terms this compared the business generated of from quarter. customers million manufacturers. During solar outstanding last revenues million contract our enjoy the part to favorable receivable million increase sales $XX.X in with at of days, an XX cash was as and in an net higher the quarter large to in invest generated more Days capacity of the manufacturing a factory as quarter, $XXX.X in mix. we in our that overall Sella in well increased quarter operation quarter to from Accounts days later

As levels compared of million the lower this related to good solar June reduction finished while the level a production. solar decreased $XXX in Most the in we XX, non-solar $XXX.X segment, slightly continue of net the ramp segment, to quarter. and raw our material is reserves prior of in where million was inventory to up in extent increased segment to at

$XXX be Revenues our million Moving States manufacturing of to product. in quarter, we to revenues to the $XXX systems for continue third the of XXXX, $XXX XX the solar million. this as $XXX of third to guidance expect within quarter XXXX we of million to megawatt now the of hour Europe range million. range to the and residential In segment third expected ramp the ship we to to the are XX storage United the expect of quarter be for within of

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

Operator

take Please with first go [Operator Morgan. Mark question you. Thank We'll Instructions] from J.P. ahead. Strouse our

Mark Strouse

our taking thank Yes, you very for much questions.

just you relatively as a wanted question, I but from ask commentary what but inverter stable Thank side, environment. based you kind It your as And string against share? Just sounds you. well, pricing just within as far your inverters, high-level can focusing of competitive the to like about traditional the are broadly the not is that competitors seeing smart speak, on solar can. if market you

Zvi Lando

losing as Mark, that the Yes. here, with the that share, cautious that indications there indications. this as with don't most growing we evidence Hey industry believe we is geographies and share the are And we're in look many when we a if the market similarly, basis, faster quarterly at we in tough. seems we market were type under is tracking we hard The When markets say were in those have that market the gaining that. it growing can of circumstances we support are on markets, at when pace the markets. of to confidence think a current I

that locations. they're equipment Our equipment, this in is have gaining environment, And we regard regions customers. they're about translates believe that us they focus chances in their share. if installers gaining share, gaining in especially that this respective install, really are our to installed The to share it or our if

loyal products serve to So believe to and sure growing dynamic focusing to positive they that installers momentum. the it we that that's make the demand is the is have contributing that we're our really on, need

Mark Strouse

follow-up. quick a just then and great Okay,

get XQ transportation, assume kind what outlook the would As tell margin Do It in what's of far as us assumptions goes, baked you costs? you as just can of things your far kind better? you are status-quo? gross as logistics Do worse, just there? think

Ronen Faier

actually what's baked two of elements. combination So is a

of it's at although that to goods these fact to stabilized in some when see install. increase to order shipments at right expenses, the we area, ease of also the the freight question by we see not but themselves, due not is The again, we will in we be use of costs, first time. do do in a cost comes on whether lot order need to higher of the way it air expedite one there more level. customers will instead a And which least shipments a decide need the And ocean in freight now, to this to

our So I price, to but much think expedite. about from from how coming that it's not the actually decision

– China. We're Israel, China means fact in that actually into from of the The the in QX both it Zvi Hungary you that you're in which the if to lot the at will there, coming facility the is we maneuver there. a the enforced you you can United more think is manufacturing expectation are States. you But see most not have it tariffs manufacturing course therefore mentioned and Vietnam, in from that when we of areas gross gross when of our when from of the the midpoint It's lucky And the next and more government shipment. lower. China, the when lot the margin necessarily due that quarter, decrease expanding between to you and working compare second manufacturing the manufacturing I enter paying for of level also quarter them. the is related of area, just which obviously to affect A are margin is take Vietnam that lockdown now, capacity is second reduced

Operator

Stanley. Morgan with Byrd Stephen from question next our take We'll you. Thank

Stephen Byrd

Thanks Hey, good my so taking afternoon. much questions. for

terms with sort that of of the just views how your pay contractually price customer of willingness talking in just the to that in terms that and to about bottom line? in with, your you mentioned I'm increases, have of impacts on as dealt impacts there had of customers see do terms sort You curious

Ronen Faier

The are impact associated specific to dramatic digit in is levels. the And on that geography that not costs additional lower-single with is as varies it increase the geography. the as depending is logistic

So in splitting the customers that shifting so so and we we them, a that it, expense, splitting our as with additional but way, and makes has are think normal, to to this dealing us quite the we to smooth expense not customers, we transparent regard, constructive that gives customers the of and been We a transparent. I credibility increases the very and and it of somehow actual dynamic us additional this the all are between conversation understand return the with things will history with in them come shared have when so far. topic

Stephen Byrd

the a you am just side sort of customers? you're agreements, Can all in how at positive about everything on seeing XXXX chain think then to developments on exciting capacity sense lots growth in also total agreement, mean, I terms helpful. really shifting energy storage, see That's of high the given the just we deliver We level quite to of possible supply product of overall capacity storage, sort supply XXXX? to speak you in around in globally about have your is demands of would terms And of I to terms just negative storage. it the give of the mentioned you that you in us growth the your world. to curious, that a constraints. but of volume are for supply in bullish

Zvi Lando

So we packing, it. most all all actually we of of from and mechanical case, these dependent that because other the capabilities, based more the capacity around our developed, the that it on rather than in of battery is the and the that developed the our sales, means and and the battery, own arrival work BMS the developed their we've But of doing the own and cells going systems pace the we're supply are assembly that cells. of and the to actually this be on is course

because this, can Samsung first changes ship the bit course of agreement quarter much sales, in or call, with or there that evening something be like at As we we always megawatt And them field. provide and a of as take, should general, all, will we but that get the as approximately give sales to them XXX the get in into mentioned with shipment have batteries time turn little it we we are the across can will a basically of year. us the can per

Operator

Capital next Thank you. Philip take take apologize. Partners. question Roth next our – our questions We'll I from We'll Shen with

Philip Shen

Hi questions. my everyone. Thank for taking you

gave Just of storage on a XXXX. the could were the $XXX $XXX to megawatt a was those that re prior targets? follow-up if help revenue you to prior XX XX in in and able targeting translate QX, reaffirm you million topic, I XXXX think I think target $XXX to I a storage targets? but in for call, to for know the you million there you million hour Are wondering

Zvi Lando

Sure.

their therefore So them question bit of because and processing also to the and of answer more arrival the follows using sales to into U.S. ability bit to actually time manufacturer turn we as basically supply the case, answer our we year into Europe, them, in little the see them well, little well, it's Samsung that What ocean in on follows ship from order, the question time year, late and logistic – the is cells. some previous dependent freight as and are answer to a it's the to this easier. not into only basically our this a is on the getting dependent our but due in supply cells the previous one, challenges, ability

going to able sure whatever basically the not into capacity we going year. next year, are we're this we here will So utilize year, turn this if meet be to however to this all capacity not of I'm

that our splitting at believe X One though supposed the the how us of spill this it a are fact is quarters. thing over be to about also higher at something, the now mention, into the least to course, year So again, seems is QX, missing we're into since to will we between a when manufacture. if number. demand it's will And the that of I Sella talk next QX. that can of of than let's know in we right matter higher can it half demand, say just simply to turn that we supply which if those agreement the is second revenues, will And own cells the to get year. have course to there, join we

Operator

Thank next take Colin you. our from Oppenheimer. We'll question from Rusch

Colin Rusch

guys. Thanks so much

optimizers you Given that the systems a sector half? that expecting the growth inverters the a ratio the are you of talk here you're reporting, lot to size to the in can of in the little bit second about commercial the drive guys and growth of

Zvi Lando

that in the and in inverter, remarks, skewed this the also the in strong I ratio we in in course, have. previous to some task a but U.S. because growth inverters in number specifically like are the they But to can inverter, compared of involved later, to field, of which nicely like is places and and Thailand quarter, then high we and as because wanted the architecture, to of new only still of that XXX of this to as ratio time. and a inverter, indeed quarter So them in not installing early, all prepared large the kilowatts, we higher in all a commercial which that discussed people actually they so Australia, we because a we that also the begin volume, took first, are beginning in translating is in at commercial And done power and and follow capability of usually large the projects of it's fair in are Korea Taiwan, growing cases Asia-Pacific where optimizers the the of overall, the more that and also growth optimizers be DC that the is availability so one And well. in – the yet per were amount change commercial ones. projects part contributed takes is Europe, traditionally the geographies, weren't

are the positive is finding larger mount the world. ourselves installations around So momentum ground we and larger in and definitely

Operator

our We'll next Brian you. Sachs. take Goldman Thank with question Lee from

Brian Lee

I taking for the Thanks guys. questions. here. Hey, a had couple

then First, how on dedicated should trends think us guys product here of expecting for XQ. to of the guess of volumes to have we then to that back portfolio? moving storage that cells not for parts better I increase know mix mixed we completely price you about into one volume per XQ. seen given revert linear, in on a just that at sort of quarter? it. in given the know sort of resi other here the If be megawatt modeling. with sort can respect SDI to metrics, decent megawatt the Samsung some mix bit XQ normal I sort versus I third a mix of of just versus just Or from it's because more how Does and also flattish XXXX, I going increase the a volume you've in has the basis, price modest like on basis? And issue? the would understand little love of battery muted capacity more continue to sequential to we sense you're a Thanks that see trends attached guys. the announced battery question, a are on the follow-up. up I seems Ronen, look and but it you that's had amount products to a gigawatt watt give much some element that to But

Ronen Faier

Okay.

and So feel I'll to one-by-one, remind me. please answer anything, I forget free if

at come let's say, little this the that previous past, of in with as related more the not from, of have actually when in this Kokam be there calculating capacity again, that with States. a are I The more mentioned can dollars than than of ASP So artificial to that into capacity course, Sella ratio optimizers, large I Kokam of at does And but you we sell the we to lower when the since the inverters. fact there is go And going revenue, That Zvi and produced. more will ASP, with you see, the designed was our regards the the to of we're Samsung we of today into on said the amount, that will are the do batteries. to think inverters And general, battery cells see the the and United in can the compared commercial amount ratio do go if to a inverters both bit, the answer, if we can to coming this in all see just be capacity was all because quarter, three cells a the of QX see We that from at this think those agreement, that levels inverters. little volumes to of in factory is in our now are least actually, you bit residential do nameplate per means once ratio the is on in actually, maintained some because them. quarters, they X the commercial, last I as though, improving of to hope even not, new to consumed that, the course, But more would shifting But that work, QX are a then are since residential say, supply to it comes noted based higher of relatively towards should we a for it's demand independent though expect that other cells. two, the volumes, utilize optimizers businesses business. least cells optimizers starts the the When of We say, these we watt in. amount comes thing our what sense. optimizers. to it's them growing one

due to temporary of said, impact segments see it's the all So that to major jump as kind the of of forget general, are, not to be minimal of low improvement higher QX. anything? price due percentages go will Did number I almost first ratio effect Okay. And coming we optimizers we But that when see all, modest, increases, the inverters. very will a and to going in and is, that the in increase, expect general, in better – in again, to commercial there, single-digit ASP more therefore, more fact see the on you think you the of increases. or ratio the these optimizers down lastly, on do to here they I of of have you

Brian Lee

No.

You captured.

Ronen Faier

Thank Great. you.

Operator

you. We'll Credit from Mandloi Maheep Suisse. next our from question Thank take

Maheep Mandloi

And Hey, with Ronen, X would battery talk cell it gigawatt support the just one What's it forward would thanks could Or guys? recurring the is arrangement you in about the arrangement X And production? kind for duration? of you going kind if Sella factory nature? taking replace for Samsung. Sella this the questions. of

Zvi Lando

This the from it's to linearly then is XXX,XXX or cells and all be hour of one-gigawatt say And used and that cells batteries. residential hour So in XXXX over of less said do will we out to our as that to very to that calculation we as will year. our in be XX-kilowatt and new of a factory clarified, businesses. in begin addition we And in one-gigawatt we use And Samsung translates our technologies. good own battery. more supplied is of initial inverter hour cells to for a come in battery, mechanism half production second also batteries the accelerate lithium-ion factory a explained, business, as I multiple have the our segments of to quick

signed to we the ability of to we those products. us the provide and of So meet volume X initial that introduce the of and that expect manufacture products on Sella new new both top demand additional will capacity also cells contract

separate are these us and sources the products develop meet new flexibility of to products give order are to similar that rapidly. in going demand into cells So two

Operator

with move on question our next Citi. J.B. to from Lowe you. Thank We'll

J.B. Lowe

be going Hey Erica, data to selling selling have already? selling be new inverter you going Zvi, Ronen, going going it to to question are inverter? doing? product, – maybe competitor be to you Or a be a into how guys follow-up are a that are When SolarEdge to just gave. My you it exclusively selling you're the storage is houses you it some with of that your on was

Zvi Lando

add adding that to demand such base So foreseeable there that and think the about. is it's to be that our question own for that, already huge battery out and future, to of the But new on for a in installation philosophical our installed systems we to batteries think systems. installed will selling and attach SolarEdge installations on ability the non-SolarEdge with I our new focus inverters the the less systems batteries about the

Operator

next Bank Thank of America. you. We'll from with to Lee question move our [ph] Eric on

Unidentified Analyst

Hey, thanks taking for questions. the

about for to XXX sequential cited. How expectations the constraining from into quarter hour XX expectation hour volumes per you Can do improvements you talk the with think about that factors XXXX, for availability Thank megawatt XX-megawatt and you. ramp here? given the storage the you XQ. Samsung on ramping Just

Zvi Lando

to think And mostly would see we I year that rather quantities relatively batteries. of is of increase So the determined the not by is supply will per provide And next assembly process we simple by linear it's complicated since XXX-megawatt the to to for where quarter. I not getting cells definition, of to we that that say I started. I battery closer as the general, ability I going would that a call them this that should investment that in have from contract the battery. be towards assume would the, of coming is in able year the sales almost part you to still mentioned, is that XXXX would are to therefore, as mostly, I capital-intensive think will beginning it, our that be end supposed or The do linear because the it's the into we therefore, hour new needed would own call the a very, prior in than manufacturers. production be by we year I it, start the the the agreement our ramp ramp-up even don't of say,

a see will XX increase acceleration us amount an in in, QX. will you do the to that And little immediately that then quarter, about the expect fourth get not more, say, on happen XXX. sales. in So I to let's of bit XX-megawatt again, depends up this maybe means will QX that

of – to QX XX of say a middle So an stabilizing that at then quarter. of ramp, QX is growth about XX sense, quarter in least, per then a increase in per I would we megawatts be of and should a QX steeper kind and somewhere hour QX in in QX linear at XXX-megawatt

Operator

hear next Harrison Thank from Sandler. We'll from you. Piper Kashy

Kashy Harrison

Thanks evening. Good my questions. for you. Thank taking

guidance improvement Can what's as QX. the significant for So more public spin SolarEdge about you in margins? to QX and is XX%, increase talk It at your might to mobility for the non-solar you. third the driving seems gross point margin traded sense then out implied into business about are a to think you improvement EVs, what's expose relative equity? to stocks gross in standalone non-solar of reward which you some value think it publicly a quarter markets the do to price? like then implies stock Thank willing maybe And ways shareholders,

Ronen Faier

Okay.

that have the in and of rent, situation we be these started portraying will growth domain So the over e-Mobility towards deliver actually this means really of or here And that we substantial the fixed is putting of away larger here. will margin, issue least depends amount units then course, spread in call on gross the the where QX the of are quarters, improving see question in the to all grew on amount QX. means course steady I amounts next area, manufacturing the we're assets I'll it vehicles in of margin, these the of amounts margins. delivering. generate units, QX much and to And we QX, we that start over in expect is main fixed especially would fixed At easiest the from the margin, which that

increase higher very believe coming business I at the to in this at of that is battery see a non-solar. this, of would there with the on margins, combination stage of gross a negative and is the of growth the get effect with is also the that in the lithium-ion to low the margin. single-digit that And Kokam characterized gross it will help this, we good us of shrinkage a to the margins we positive that – e-mobility, one addition all already In call to healthy plus least double-digits of

at to one businesses e-mobility business, see As provides e-mobility it able the today shareholders short-term, splitting This at call storage I the but capital begin optimizations company to with have the we shop the would that looking are markets all specializes long-term we're this company not the having that electricity grow. for that we believe of into is the, was the just energy, truly our to also and up it the one-stop by value least power coming conversion, as would by much of way of energy at We a is to from I business electricity and and the being at call will not the that critical more was management energy just a that by our a smart the the reason of it utilization, today. working. acquired as generation basically that least e-mobility division

Operator

Company. from ahead. go our take Osborne for question Jeff next I’ll Please & you. Thank Cowen

Jeff Osborne

Yes, good afternoon guys.

quick be two about direct, can in to other growth overcome or talk just selling ones what whether the distribution are that or more is, doing you efforts stunted you're curious of that. initial expect commissioning? factors one you on talk underway around Tier you space. about a Can you I'm already Xs Part two entrance the you Those and two how training side. have is through just new selling customers part, be So the the would storage question? of can

Zvi Lando

Yes.

questions for both. of answer other first is the the question like So many the

just and we on already in a certifying installers we but did and to didn't second, them him to that, And training, also to also employing is installers they that with installation. and the every are to of the both of and it's are people done been it the high bit the to that deep prior we we've to so inverter enabling on much, course, more also first in are system install equipment and installations not prior we but with to SolarEdge quality. mentioned And only properly for – a control of participate a assist battery will monitor the training the basis mechanism to installations, too Tier elaborate so in give answer an that customers fact the also restrictive both the and And we we some training the Europe years of parallel in the be and to wave or X distribution. certified accompany and first U.S., the it's running So want and our direct the have during bit to and employing more make we this extent that effort on executing require possible battery. a for solar theoretical experience the to hands-on their

Operator

take I’ll Thank from next Barclays. our with you. question Moses Sutton

Moses Sutton

entirely taking on the to for it's to it's confirm product anything all you Thanks questions. that, the and just ship widely? certified clear else, Can continue on fully UL storage

Zvi Lando

Yes.

up be listings the enabled check and certification either required battery the has indoor of outdoor didn't in installations. So the types certifications Europe lately, but are to And I the the up be installed those I think are or and U.S. will that in shortly,

Operator

Joseph Instructions] with Guggenheim from Thank Osha hear We'll Securities. next you. [Operator

Joseph Osha

whether a had hope the next gross be comment ask to we curious return you questions get that might stands out the can of how change previously business that about million still get of might this year, in question storage, margin, talked low in next not And to about or as kind next automotive expectations. some Thank you. and $XXX year, double that those into if to margin. then in Hi the there. maybe rough so single-digits I'd like for we particular year? Wondering to target as year you on that of

Ronen Faier

year – stabilize next we are that Stellantis the will right has this. the we orders will – we the an this can vehicle, to issue means $XXX that we think for million that of that that, the we do thing $XXX on it that year, with this We course, manufacture, higher it remember that this year the have this course, course problem the to and mean actually doesn't the characterized fact can I the levels, are the And to the revenues be has yes, not a quantity, amount because but the said is customers, what So, of we growth, question. once also of with of to in with since though there determine first I year. be to numbers. increase this believe we second million least this for was now, of the part it going regards mentioned And customers nice the of the car itself comfortable feel all, an mostly that at that most meeting the will forgot we see Joe, that need

Joseph Osha

looking Just at margin. gross

running I that, have that breakeven that gross said think trajectory of margin might on what at margin get wondering now. you whether can business as of to probably guys and the next is if you year? a is move sort comment we gross negative right through it But

Ronen Faier

in answer this is the case. yes, So

though locked, And full go in it's should a a project. product. that capacity make we're to more Stellantis from a the a product I the of that added we believe agreed First senses that into levels And it and shipping. on acquired reliability, when to safe grade that do make in at this this cost – you general, every say to when only need we therefore, and came the the go you're sense, already say inherited we fulfill we a margins, relatively, quality, and do is in upon, where therefore order because It we of project, safety, that automotive was not found cost in actually we lot And unit we you costs. of price we production, profitable mass it, when the this seeded increase it and before is was low acquire to to came to we e-mobility would we I once many the this that company project, losing all division. you're that business would in needed when we the thing project was

learning to by be whole get positive long a configuration, we starting a that the specific sense, a project in year is extremely level least should So it this of it as the I the be as going once with at we negative as desired, single-digit not this a margin today profitable kind we have, level to is curve project. Stellantis, stay would but end we the a of year, or at low next of call an when

Operator

Sutton I’ll from And Moses you. question with take a Thank follow-up Barclays.

Moses Sutton

many Jeff's of been total or installed once? terms initial the least in installers follow-up one beta of systems actually quick on Just perhaps How at questions. in for or many how installed storage, a have

Zvi Lando

giving number. No, XXs, but in the of range the specific not it's we're

Operator

the conclude for additional like you. Mr. And over back the Lando does that conference turn question-and-answer Thank remarks. closing today's I'd to session. to or

Zvi Lando

call. our this want our our with to and us. performance and you, you support during opportunities customers, this buyers satisfied for of ahead to about just Thank thank and period. opportunity employees, take for I more their the while And that results, joining everyone excited thank are even I'm I'm

a all you and thank So again have day. good

SolarEdge (SEDG) 3 Aug 212021 Q2 Earnings call transcript