SolarEdge Technologies NASDAQ: SEDG reported first-quarter 2026 results that management said showed continued progress in its push toward “profitable growth,” alongside product launches and efforts to expand market share across key regions. On the earnings call, CEO Shuki Nir said 2026 is a “year of transformation and acceleration,” with priorities that include expanding global share, scaling the SolarEdge Nexis platform, and investing in adjacent opportunities such as AI data center power solutions.
First-quarter results and profitability trajectory
CFO Asaf Alperovitz reported non-GAAP revenue of $310 million for the quarter ended March 31, 2026, up 46% year-over-year and down 7% sequentially. He said the quarter outperformed “the typical seasonal decline of 10%–15%,” and did not include “any significant one-time or pull forward of revenue from Safe Harbor.”
By geography, SolarEdge posted $150 million of revenue from the U.S. (51% of total), down 20% quarter-over-quarter. Europe revenue was $114 million (37% of total), up 14% quarter-over-quarter, while international markets contributed $38 million (12% of total), up 5% quarter-over-quarter.
Non-GAAP gross margin was 23.5%, slightly higher than 23.3% in the prior quarter and toward the high end of guidance. Alperovitz attributed the improvement to “a more favorable product mix and lower seasonal warranty costs.”
Non-GAAP operating expenses were $97.7 million. Excluding a “one-time doubtful debt expense of approximately $14 million,” ongoing operating expenses were approximately $84 million, which Alperovitz said was below the company’s guidance range and down from $88.7 million last quarter. He said the OpEx performance reflected cost control and efficiency measures, while noting headwinds from a strengthening Israeli shekel against the U.S. dollar.
Non-GAAP operating loss was about $25 million; excluding the $14 million doubtful debt expense, SolarEdge’s ongoing operating loss was about $11 million, which Alperovitz said was flat with Q4 despite lower revenue. Non-GAAP net loss was $26.3 million, compared with a non-GAAP net loss of $8.2 million in Q4, and non-GAAP loss per share was $0.43 versus $0.14 in the prior quarter.
Nir said that at the midpoint of SolarEdge’s outlook, the company expects to “approach break-even operating profit in the second quarter,” calling it “an important milestone” reflecting a focus on operational efficiency and execution.
Cash, working capital, and tariff-related refund potential
SolarEdge ended the quarter with approximately $583 million in cash and investments. The company generated about $21 million of free cash flow in Q1, while cash and investments increased by about $2 million, as free cash flow was partly offset by several items including a “one-time non-operational $26 million payment related to a lease amendment for our new headquarters,” Alperovitz said. He added that the amendment reduces the planned footprint for the new campus and is expected to lower annual lease expenses by approximately $8 million.
Capital expenditures were about $4 million in Q1. For full-year 2026, SolarEdge expects CapEx of $60 million to $80 million, with Alperovitz citing major categories including increased U.S. production capacity for PV and batteries, investment in the new Israel headquarters (including R&D facilities), investment related to the AI data center offering, and maintenance CapEx. Despite higher CapEx and planned working-capital investment tied to expected growth and the Nexis launch, he said SolarEdge expects positive cash flow for full-year 2026, supported in part by its ability to monetize 45X credits.
Alperovitz also highlighted improved working capital efficiency, saying the cash conversion cycle reached its “fastest point in many years,” driven by lower DSO and higher DPOs. Accounts receivable net decreased to $223 million from $267 million in the prior quarter. Inventory grew $44 million, which Alperovitz attributed largely to higher raw material procurement ahead of the Nexis launch and higher battery demand.
On tariffs, Alperovitz said the U.S. Supreme Court ruled on Feb. 20 that certain tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were invalid. SolarEdge has started the refund submission process with U.S. Customs and Border Protection and “anticipate[s] that the refunds could total approximately $55 million.” Those potential refunds were not included in Q2 guidance.
Market conditions: U.S. residential, C&I momentum, and Europe’s rebound
Nir said the U.S. residential market started the year slowly, citing changes in tax credit policies and uncertainty related to FEOC that have slowed tax equity funding for third-party ownership (TPO) providers. Even so, he said SolarEdge believes it is well positioned for a rebound, particularly as the market potentially evolves toward the 48E tax credit and higher battery attach rates—areas he said align with SolarEdge’s position with TPOs and its “fully integrated DC coupled battery architecture.”
In U.S. commercial and industrial (C&I), Nir said SolarEdge continues to build momentum, pointing to products designed to be both Domestic Content and FEOC compliant and emphasizing penetration of enterprise accounts, which he described as providing improved visibility and a “more stable cadence of business.” In response to a JPMorgan question on competition, Nir said there are “three leaders” in rooftop C&I and that SolarEdge is “the only one” among them able to offer customers products qualified for both Domestic Content and FEOC compliance. He characterized the shift as “structural rather than cyclical.”
In Europe, management said demand was slow in January and February but improved in March and continued into April, in part due to rising electricity prices. In response to JPMorgan’s question about demand since the Iran conflict, Nir said the company has seen increased activity across several countries and an increase in demand not only for PV but also “PV plus storage.” He emphasized the value of pairing batteries with a sophisticated energy management system in markets with dynamic tariffs, including in scenarios with negative tariffs.
Nir said Europe’s Q1 revenue reached its highest point since Q4 2023, driven by stronger battery demand in both residential and C&I. He also noted that the Europe strength was occurring before SolarEdge had fully ramped exports of U.S.-manufactured products and before rollout of the Nexis platform.
Safe Harbor transactions and customer credit issues
Management discussed Safe Harbor activity, including additional transactions in the quarter and expectations for more deals in Q2, “primarily through the Physical Work Test method,” Nir said. He described several strategic benefits, including improved revenue visibility for up to four years, an “entry point for incremental sales” such as batteries or EV chargers, and improved manufacturing stability and operational planning.
During Q&A, management contrasted Physical Work Test transactions with “5% Safe Harbor” deals, with Nir explaining that 5% Safe Harbor transactions can result in product being purchased shortly after contract signing, which can be viewed as a pull-forward of revenue, while Physical Work Test aligns delivery and revenue more closely with when customers need the product for installation.
Alperovitz also addressed SolarEdge’s exposure to the bankruptcy of installer Freedom Forever. He said the company has “net zero exposure on our balance sheet,” adding that SolarEdge has not recognized significant revenue from Freedom over the last 18 months and that remaining amounts owed were fully offset by deferred revenue liabilities. He said SolarEdge holds a UCC lien against Freedom’s assets representing approximately $100 million, but the company does not know what, if any, amount will be recovered; any recovery would be recognized as a benefit when received.
Regarding the $14 million doubtful debt expense, Alperovitz said it relates to a separate U.S. customer experiencing “financial operational challenges,” and SolarEdge took a conservative approach by writing down the full amount owed. The company did not disclose the customer name. He later added the company had “very low revenue” from that customer over the last three quarters and did not expect a direct revenue impact.
Product roadmap: Nexis, commercial storage, and AI data center power
Nir highlighted the SolarEdge Nexis launch in Germany, saying the event drew nearly 1,000 installers in person or via livestream and that early demand has filled planned Q2 Nexis production for European customers. He said the platform can address additional market segments, including larger homes, which he said account for more than 50% of Germany’s residential market. In response to questions about pricing, Nir said SolarEdge has not implemented price cuts, arguing that pricing should reflect customer value. He added that Nexis and U.S.-made products provide lower cost and could provide “some room to move if we need to.”
SolarEdge also announced a second-generation commercial battery product, the CSS Outdoor 197 kWh solution. Nir described software features supporting multiple optimization modes including maximizing self-consumption, peak shaving, tariff optimization, and managing export/import limitations.
On AI data center power, Nir said NVIDIA’s GTC 2026 featured a live energized 800-volt DC power rack and that high-voltage DC is moving toward infrastructure roadmaps. He said SolarEdge plans a working system in 2026, initial pilot installations in 2027, and broader rollout in 2028. Nir said the company is advancing a solid-state transformer platform and working toward converting 34.5 kV directly to 800V DC at “efficiencies above 99%.” Co-founder Meir Adest said SolarEdge is preparing prototypes to share with hyperscalers and expects to show a proof of concept “towards the end of this year,” followed by pilot plans next year and mass deployment in 2028.
Second-quarter 2026 outlook
- Revenue: $325 million to $355 million (excluding any significant one-time pull-forward revenue)
- Non-GAAP gross margin: 23% to 27% (excluding any impact from potential IEEPA refunds)
- Non-GAAP operating expenses: $86 million to $91 million
At the midpoint of guidance, Alperovitz said the implied EBIT loss is approximately $3.5 million, “bringing us close to breakeven.”
Finally, Nir said Alperovitz will continue as CFO through June 9 and that the CFO search is underway. He also said SolarEdge plans to hold an Investor Day after Labor Day, where management expects to provide a longer-term view.
About SolarEdge Technologies NASDAQ: SEDG
SolarEdge Technologies NASDAQ: SEDG is a global provider of solar energy solutions focused on optimizing photovoltaic (PV) power generation. The company's core offerings include power optimizers, inverters and cloud-based monitoring platforms designed to maximize energy output and improve safety across residential, commercial and utility-scale installations. By coupling module-level electronics with centralized inverters, SolarEdge's technology enables real-time performance monitoring and rapid fault detection to enhance system reliability.
In recent years, SolarEdge has expanded its product portfolio beyond solar PV to include energy storage systems, electric vehicle (EV) charging solutions and smart energy management tools.
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