Q2 2026 Solaredge Technologies Inc Earnings Call Transcript
Key Points
- SolarEdge Technologies Inc (SEDG) achieved non-GAAP operating profitability for the first time in nearly three years, with non-GAAP operating income of $10.2 million in Q2 2026.
- Revenue grew 20% year-over-year to $346 million, with non-GAAP gross margin expanding for the sixth consecutive quarter to 28.6%.
- The company gained significant market share in the US C&I rooftop segment, now holding more than 50% of installations, and has systems on rooftops of over 60% of Fortune 100 companies.
- The Nexis platform is gaining traction, with shipments exceeding $60 million in Q2 and positive feedback from installers, including an independent benchmark showing EUR5,000 in additional savings over 15 years.
- The company is making progress in the AI factory market, with live demonstrations of its SST validating 99% efficiency and direct medium voltage AC to regulated DC conversion, and expects to have a working system by end of 2026.
- SolarEdge generated positive free cash flow of $3.1 million in Q2, and expects positive free cash flow for the full year, supported by strong cash management and monetization of 45X credits.
- The US residential market remains soft due to slower tax equity funding and uncertainty around FEOC, leading to lower purchases from distributors and strained installer cash flows.
- The company expects a sequential revenue decline in Q3 2026, with guidance of $310-$340 million, primarily due to European seasonality and continued US softness.
- Non-GAAP gross margin is expected to decline to 22%-26% in Q3, down from 28.6% in Q2, due to lower scale and fixed cost absorption.
- The company faces headwinds from a strengthening Israeli shekel against the US dollar, which impacts operating expenses.
- There is uncertainty regarding the timing of market recovery, as clarity on FEOC definitions and funding environment is needed for the US resi market to rebound.
- The company is experiencing some component supply chain pressures, particularly in memory, due to data center demand, leading to price increases that need to be absorbed.
Hello, and welcome to the SolarEdge conference call for the second quarter ended June 30, 2026. This call is being webcast live on the company's website at www.solaredge.com in the Investors section on the Events 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 express 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.
I would now like to turn the call over to Erica Mannion at Sapphire Investor Relations. Please go ahead.
Good morning, and thank you for joining us to discuss SolarEdge's operating results for the second quarter, June 30, 2026, as well as the company's outlook for the third quarter of 2026. With me today are Shuki Nir, Chief Executive Officer; Maoz Sigron, Chief
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