Continuing its run of strong results, SolarEdge Technologies Inc. plans to expand both geographically and in terms of product segments over the second half of 2017. Notching record revenues and profits for the second quarter, the Israeli maker of photovoltaic inverters and power optimizers upped its outlook for the third quarter, saying revenues will be between $155 million and $165 million over the next three months.
"In the second quarter, we continued the successful execution of our business strategy with record revenues, leaving us well-positioned to continue to expand our business with new product offerings and new territories," founder and CEO Guy Sella said on an Aug. 2 earnings call.
Founded in 2006, SolarEdge competes in a market dominated by Chinese giants such as Huawei Technologies Co. Ltd. and Sungrow Power Supply Co. The company has carved out a distinctive niche by offering products that are smaller, more efficient, more power-dense and pricier than its competitors' offerings. According to GTM Research, SolarEdge ranked tenth in market share in terms of inverter shipments in 2016, but fourth in revenue.
Second-quarter revenue was $136.1 million, the company's highest ever, up 18% from the first quarter and 9% from the same period a year ago. Net profit on a GAAP basis reached $22.5 million, up 30% from the second quarter of 2016, as the company shipped a record 75,000 inverters in the quarter.
Growth in Europe
The company's sales in the second quarter were driven by modest growth in North America, its largest market, and more rapid expansion in Europe, particularly Germany and the Netherlands, executives explained on the call. Europe now accounts for nearly half of SolarEdge's revenues. To accelerate growth and boost margins, SolarEdge plans to expand in fast-growing solar photovoltaic, or PV, markets including Japan, India and Australia.
The company is also expanding its product line. At the Intersolar North America conference in July, SolarEdge unveiled what it called the first integrated PV inverter/electric vehicle charging system, which supplements power from the grid with electricity generated from solar panels. The system couples an electric vehicle, or EV, charger with SolarEdge's HD-Wave inverter system, enabling charging speeds up to six times faster than conventional EV charge stations.
Combining an EV charger and an inverter marks the company's expansion from solar inversion, said Sella, and sees the company "turning the inverter into a central component for home-energy management applications." That is "part of our longer term plan for growth and business expansion," he added.
The coming year will also see the introduction of SolarEdge's S-series line of power optimizers, which has up to 40% higher power density and is more than one-third smaller than its current optimizers. It also incorporates new safety features designed to make it less susceptible to heat anomalies and fires. The S-series is expected to reach the market in 2018. The company is also developing a large-capacity inverter solution designed for utility-scale solar installations.
Even as average inverter selling prices are expected to fall by 10% to 15% in 2017, Sella said, "We continue to drive down production costs while introducing new products."
SolarEdge shares were up 20.8% in trading Aug. 3, closing at $27.60 on more than four-times average volume.