SOLAREDGE TECHNOLOGIES, INC. [SEDG] Filings

10-Q 1 zk2432199.htm 10-Q SOLAREDGE TECHNOLOGIES, INC. - 1419612 - 2024

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to __________

Commission File Number: 001-36894

SOLAREDGE TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

Delaware		20-5338862
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

1 HaMada Street
Herziliya Pituach, 4673335, Israel
(Address of Principal Executive Offices, zip code)

972 (9) 957-6620

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.0001 per share	SEDG	NASDAQ (Global Select Market)

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller Reporting Company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of November 1, 2024, there were 57,950,134 shares of the registrant’s common stock, par value of $0.0001 per share, outstanding.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
ITEM 1.Financial Statements	F-1
Condensed Consolidated Balance Sheets	F-1
Condensed Consolidated Statements of Income (Loss)	F-3
Condensed Consolidated Statements of Comprehensive Income (Loss)	F-4
Condensed Consolidated Statements of Stockholders’ Equity	F-5
Condensed Consolidated Statements of Cash Flows	F-7
Notes to the Condensed Consolidated Financial Statements (unaudited)	F-9
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	4
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk	23
ITEM 4. Controls and Procedures	24

PART II. OTHER INFORMATION	25
ITEM 1. Legal Proceedings	25
ITEM 1A. Risk Factors	25
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds	27
ITEM 3. Defaults upon Senior Securities	27
ITEM 4. Mine Safety Disclosures	27
ITEM 5. Other Information	28
ITEM 6. Exhibits	28
EXHIBIT INDEX	28

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SOLAREDGE TECHNOLOGIES INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(in thousands, except per share data)

	September 30, 2024		December 31, 2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	303,904	$	338,468
Marketable securities		374,869		521,570
Trade receivables, net of allowances of $41,501 and $16,400, respectively		239,408		622,425
Inventories, net		798,383		1,443,449
Prepaid expenses and other current assets		401,551		378,394
Total current assets		2,118,115		3,304,306
LONG-TERM ASSETS:
Marketable securities		56,041		407,825
Deferred tax assets, net		-		80,912
Property, plant and equipment, net		423,905		614,579
Operating lease right-of-use assets, net		43,088		64,167
Intangible assets, net		11,169		35,345
Goodwill		51,875		42,996
Other long-term assets		112,201		37,601
Total long-term assets		698,279		1,283,425
Total assets	$	2,816,394	$	4,587,731

F - 1

SOLAREDGE TECHNOLOGIES INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Cont.)

(in thousands, except per share data)

	September 30, 2024			December 31, 2023
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Trade payables, net	$	94,730		$	386,471
Employees and payroll accruals		70,120			76,966
Warranty obligations		163,561			183,047
Deferred revenues and customers advances		27,367			40,836
Accrued expenses and other current liabilities		202,134			205,911
Convertible senior notes, net		345,900			-
Total current liabilities		903,812			893,231
LONG-TERM LIABILITIES:
Convertible senior notes, net		329,614			627,381
Warranty obligations		315,343			335,197
Deferred revenues		226,770			214,607
Finance lease liabilities		39,197			41,892
Operating lease liabilities		31,293			45,070
Other long-term liabilities		13,999			18,444
Total long-term liabilities		956,216			1,282,591
COMMITMENTS AND CONTINGENT LIABILITIES
STOCKHOLDERS’ EQUITY:
Common stock of $0.0001 par value - Authorized: 125,000,000 shares; issued: 57,935,436 shares at September 30, 2024 and 57,123,437 shares at December 31, 2023; outstanding: 57,182,072 shares at September 30, 2024 and 57,123,437 shares at December 31, 2023.		6			6
Additional paid-in capital		1,779,212			1,680,622
Treasury stock, at cost; 753,364 shares held		(50,315	)		-
Accumulated other comprehensive loss		(57,253	)		(46,885	)
Retained earnings (Accumulated deficit)		(715,284	)		778,166
Total stockholders’ equity		956,366			2,411,909
Total liabilities and stockholders’ equity	$	2,816,394		$	4,587,731

The accompanying notes are an integral part of the condensed consolidated financial statements.

F - 2

SOLAREDGE TECHNOLOGIES INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (Unaudited)

(in thousands, except per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Revenues	$	260,903		$	725,305		$	730,707		$	2,660,484
Cost of revenues		963,229			582,488			1,470,189			1,900,236
Gross profit (loss)		(702,326	)		142,817			(739,482	)		760,248
Operating expenses:
Research and development		70,372			80,082			214,999			246,481
Sales and marketing		37,427			40,351			116,316			125,539
General and administrative		41,212			39,110			111,085			111,876
Other operating expense (income), net		233,929			-			237,271			(1,434	)
Total operating expenses		382,940			159,543			679,671			482,462
Operating income (loss)		(1,085,266	)		(16,726	)		(1,419,153	)		277,786
Financial income (expense), net		5,558			(7,901	)		(2,371	)		19,157
Other income (loss), net		(3,928	)		(484	)		14,623			(609	)
Income (loss) before income taxes		(1,083,636	)		(25,111	)		(1,406,901	)		296,334
Income taxes		(121,108	)		(36,065	)		(85,109	)		(99,622	)
Net loss from equity method investments		(577	)		-			(1,440	)		-
Net income (loss)	$	(1,205,321	)	$	(61,176	)	$	(1,493,450	)	$	196,712
Net basic earnings (loss) per share of common stock	$	(21.13	)	$	(1.08	)	$	(26.22	)	$	3.49
Net diluted earnings (loss) per share of common stock	$	(21.13	)	$	(1.08	)	$	(26.22	)	$	3.34
Weighted average number of shares used in computing net basic earnings (loss) per share of common stock		57,029,983			56,671,504			56,952,656			56,435,880
Weighted average number of shares used in computing net diluted earnings (loss) per share of common stock		57,029,983			56,671,504			56,952,656			59,297,423

The accompanying notes are an integral part of the condensed consolidated financial statements.

F - 3

SOLAREDGE TECHNOLOGIES INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

(in thousands, except per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Net income (loss)	$	(1,205,321	)	$	(61,176	)	$	(1,493,450	)	$	196,712
Other comprehensive income (loss), net of tax:
Available-for-sale marketable securities		2,975			2,562			4,470			9,400
Cash flow hedges		563			(923	)		(2,970	)		(938	)
Foreign currency translation adjustments on intra-entity transactions that are of a long-term investment nature		13,555			(9,989	)		(7,408	)		(22,724	)
Foreign currency translation adjustments		3,604			1,833			(4,460	)		3,422
Total other comprehensive income (loss)		20,697			(6,517	)		(10,368	)		(10,840	)
Comprehensive income (loss)	$	(1,184,624	)	$	(67,693	)	$	(1,503,818	)	$	185,872

The accompanying notes are an integral part of the condensed consolidated financial statements.

F - 4

SOLAREDGE TECHNOLOGIES INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)

(in thousands, except per share data)

	Common stock					Additional paid in Capital			Treasury stock			Accumulated other comprehensive loss			Retained earnings (Accumulated deficit)			Total
	Number			Amount		Additional paid in Capital			Treasury stock			Accumulated other comprehensive loss			Retained earnings (Accumulated deficit)			Total
Balance as of January 1, 2024		57,123,437		$	6	$	1,680,622		$	-		$	(46,885	)	$	778,166		$	2,411,909
Issuance of common stock upon exercise of stock-based awards		175,254			*-		13			-			-			-			13
Stock based compensation		-			-		38,888			-			-			-			38,888
Repurchase of common stock		(505,896	)		*-		-			(33,222	)		-			-			(33,222	)
Other comprehensive loss adjustments		-			-		-			-			(19,726	)		-			(19,726	)
Net loss		-			-		-			-			-			(157,311	)		(157,311	)
Balance as of March 31, 2024		56,792,795		$	6	$	1,719,523		$	(33,222	)	$	(66,611	)	$	620,855		$	2,240,551
Issuance of common stock upon exercise of stock-based awards		161,549			*-		13			-			-			-			13
Issuance of common stock under employee stock purchase plan		245,146			*-		10,208			-			-			-			10,208
Stock based compensation		-			-		39,897			-			-			-			39,897
Repurchase of common stock		(247,468	)		*-		-			(17,093	)		-			-			(17,093	)
Capped call transactions related to notes 2029		-			-		(25,230	)		-			-			-			(25,230	)
Other comprehensive loss adjustments		-			-		-			-			(11,339	)		-			(11,339	)
Net loss		-			-		-			-			-			(130,818	)		(130,818	)
Balance as of June 30, 2024		56,952,022		$	6	$	1,744,411		$	(50,315	)	$	(77,950	)	$	490,037		$	2,106,189
Issuance of common stock upon exercise of stock-based awards		230,050			*-		42			-			-			-			42
Stock based compensation		-			-		37,871			-			-			-			37,871
Capped call transactions related to notes 2029		-			-		(3,112	)		-			-			-			(3,112	)
Other comprehensive gain adjustments		-			-		-			-			20,697			-			20,697
Net loss		-			-		-			-			-			(1,205,321	)		(1,205,321	)
Balance as of September 30, 2024		57,182,072		$	6	$	1,779,212		$	(50,315	)	$	(57,253	)	$	(715,284	)	$	956,366

F - 5

SOLAREDGE TECHNOLOGIES INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)

(in thousands, except per share data)

	Common stock				Additional paid in Capital		Accumulated other comprehensive loss			Retained earnings			Total
	Number		Amount		Additional paid in Capital		Accumulated other comprehensive loss			Retained earnings			Total
Balance as of January 1, 2023		56,133,404	$	6	$	1,505,632	$	(73,109	)	$	743,837		$	2,176,366
Issuance of common stock upon exercise of stock-based awards		209,760		*-		75		-			-			75
Stock based compensation		-		-		40,070		-			-			40,070
Other comprehensive loss adjustments		-		-		-		(4,095	)		-			(4,095	)
Net income		-		-		-		-			138,378			138,378
Balance as of March 31, 2023		56,343,164	$	6	$	1,545,777	$	(77,204	)	$	882,215		$	2,350,794
Issuance of common stock upon exercise of stock-based awards		171,682		*-		89		-			-			89
Issuance of common stock under employee stock purchase plan		41,494		*-		10,046		-			-			10,046
Stock based compensation		-		-		39,978		-			-			39,978
Other comprehensive loss adjustments		-		-		-		(228	)		-			(228	)
Net income		-		-		-		-			119,510			119,510
Balance as of June 30, 2023		56,556,340	$	6	$	1,595,890	$	(77,432	)	$	1,001,725		$	2,520,189
Issuance of common stock upon exercise of stock-based awards		254,219		*-		18		-			-			18
Stock based compensation		-		-		37,892		-			-			37,892
Other comprehensive loss adjustments		-		-		-		(6,517	)		-			(6,517	)
Net income		-		-		-		-			(61,176	)		(61,176	)
Balance as of September 30, 2023		56,810,559	$	6	$	1,633,800	$	(83,949	)	$	940,549		$	2,490,406

* Represents an amount less than $1.

The accompanying notes are an integral part of the condensed consolidated financial statements.

F - 6

SOLAREDGE TECHNOLOGIES INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(in thousands, except per share data)

	Nine Months Ended September 30,
	2024			2023
Cash flows from operating activities:
Net income (loss)	$	(1,493,450	)	$	196,712
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		47,215			42,019
Provision to write down inventories to net realizable value		638,966			20,674
Loss on impairment and disposal of property, plant and equipment		206,620			-
Stock-based compensation expenses		112,818			115,015
Impairment of goodwill and intangible assets		24,725			-
Deferred income taxes, net		79,831			(18,199	)
Gain from repurchasing of convertible notes		(15,455	)		-
Loss (gain) from exchange rate fluctuations		8,243			(8,170	)
Other items		10,299			6,915
Changes in assets and liabilities:
Trade receivables, net		379,214			(40,011	)
Inventories, net		15,858			(458,475	)
Prepaid expenses and other assets		(38,223	)		19,822
Operating lease right-of-use assets, net		12,286			12,323
Trade payables, net		(284,255	)		(53,996	)
Warranty obligations		(39,294	)		130,863
Deferred revenues and customers advances		1,253			18,580
Operating lease liabilities		(11,881	)		(11,945	)
Accrued expenses and other liabilities, net		19,574			(12,330	)
Net cash used in operating activities		(325,656	)		(40,203	)
Cash flows from investing activities:
Investment in available-for-sale marketable securities		(200,919	)		(214,516	)
Proceeds from maturities of available-for-sale marketable securities		632,866			191,810
Proceeds from sales of available-for-sale marketable securities		70,642			2,807
Purchase of property, plant and equipment		(95,905	)		(130,024	)
Business combinations, net of cash acquired		(10,417	)		(16,653	)
Purchase of intangible assets		(10,000	)		(10,600	)
Disbursements for loans receivables		(37,500	)		(13,000	)
Investment in privately-held companies		(25,742	)		(8,000	)
Other investing activities		(4,270	)		9,989
Net cash provided by (used in) investing activities	$	318,755		$	(188,187	)

F - 7

SOLAREDGE TECHNOLOGIES INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Cont.)

(in thousands, except per share data)

	Nine Months Ended September 30,
	2024			2023
Cash flows from financing activities:
Repurchase of common stock	$	(50,315	)	$	-
Partial repurchase of Notes 2025		(267,900	)		-
Proceeds from issuance of Notes 2029, net of issuance costs		329,214			-
Capped call transactions related to Notes 2029		(28,342	)		-
Tax withholding in connection with stock-based awards, net		(592	)		(9,267	)
Other financing activities		(1,938	)		(2,038	)
Net cash used in financing activities		(19,873	)		(11,305	)

Effect of exchange rate differences on cash and cash equivalents		(7,790	)		7,705

Decrease in cash and cash equivalents		(34,564	)		(231,990	)
Cash and cash equivalents at the beginning of the period		338,468			783,112
Cash and cash equivalents at the end of the period	$	303,904		$	551,122

Supplemental disclosure of non-cash activities:
Purchase of intangible assets and business combinations	$	-		$	11,307
Right-of-use asset recognized with a corresponding lease liability	$	2,138		$	17,658
Purchase of property, plant and equipment	$	4,761		$	19,574

The accompanying notes are an integral part of the condensed consolidated financial statements.

F - 8

SOLAREDGE TECHNOLOGIES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands, except per share data)

NOTE 1: GENERAL

SolarEdge Technologies Inc. (the “Company”) and its subsidiaries design, develop, and sell an intelligent inverter solution designed to maximize power generation at the individual photovoltaic (“PV”) module level while lowering the cost of energy produced by the solar PV system and providing comprehensive and advanced safety features. The Company’s products consist mainly of (i) power optimizers designed to maximize energy throughput from each and every module through constant tracking of Maximum Power Point individually per module, (ii) inverters which invert direct current ("DC") from the PV module to alternating current ("AC") including the Company’s future ready Energy Hub inverter which supports, among other things, connection to a DC-coupled battery for full or partial home backup capabilities, and optional connection to the Company's smart EV charger, (iii) a remote cloud-based monitoring platform, that collects and processes information from the power optimizers and inverters to enable customers and system owners, to monitor and manage the solar PV system (iv) batteries for PV applications that are used to increase energy independence and maximize self-consumption for PV system's owners including a battery and (v) additional smart energy management solutions.

The Company and its subsidiaries sell products worldwide through large distributors, electrical equipment wholesalers, as well as directly to large solar installers and engineering, procurement, and construction firms.

The Company has expanded its activity to other areas of smart energy technology organically and through acquisitions. The Company offers a variety of energy solutions, which include lithium-ion cells, batteries, and energy storage systems (“Energy Storage”), automated machines for industrial use (“Automation Machines”), as well as cloud-based energy management solutions.

Basis of Presentation:

The unaudited condensed consolidated financial statements and accompanying notes have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). In management’s opinion, the unaudited condensed consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. The Company’s interim period results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year.

The significant accounting policies applied in the annual consolidated financial statements of the Company as of December 31, 2023, contained in the Company’s Annual Report on Form 10-K filed with the SEC on February 26, 2024, have been applied consistently in these unaudited interim condensed consolidated financial statements. Certain prior year amounts have been reclassified to conform to current year presentation.

Use of estimates:

The preparation of financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses, government grants, income taxes and related disclosures in the accompanying notes. Actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties.

In accordance with ASC 360-10, the Company records impairment losses on long-lived assets used in operations when events and circumstances indicate that long-lived assets may be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets. During the third quarter of 2024, the Company's share price continued to deteriorate and a major slowdown in operations occurred, leading the Company to perform an impairment test. For detailed information on impairments related to long-lived assets, refer to Notes 7 and 8.

F - 9

SOLAREDGE TECHNOLOGIES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands, except per share data)

Concentrations of supply risks:

The Company depends on two contract manufacturers and several limited or single source component suppliers. Reliance on these vendors makes the Company vulnerable to possible capacity constraints and reduced control over component availability, delivery schedules, manufacturing yields, and costs.

As of September 30, 2024 none of the Company's contract manufacturers account for more than 10% of the Company’s total trade payables, net.

As of December 31, 2023, two contract manufacturers collectively accounted for 58.5% of the Company’s total trade payables, net.

The Company's own manufacturing facility, Sella 1, located in the North of Israel, is primarily used in the Company's Solar segment operations. Additionally, Sella 2, a Company owned manufacturing facility in South Korea, together with a smaller Company owned facility, are used for the Energy Storage segment.

New accounting standards updates:

In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”). Additional segment reporting information required by ASU 2023-07 includes: disclosing the title and position of the individual or the name of the group or committee identified as the CODM, provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually, and additional disclosures regarding significant segment expenses. ASU 2023-07 is effective for fiscal periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Since ASU 2023-07 addresses only disclosures, the adoption of ASU 2023-07 is not expected to have a significant impact on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). ASU 2023-09 requires additional categories of information about federal, state and foreign income taxes to be included in effective tax rate reconciliation disclosure. Additionally, the newly added categories also apply to the income taxes paid disclosure. Implementation of said additions are subject to quantitative thresholds. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Since ASU 2023-07 addresses only disclosures, the adoption of ASU 2023-07 is not expected to have a significant impact on its consolidated financial statements.

F - 10

SOLAREDGE TECHNOLOGIES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands, except per share data)

NOTE 2: BUSINESS COMBINATIONS

In January 2023, the Company completed an investment of $5,500 in the common stock of Weev Energy B.F. Ltd., ("Wevo"), an Israel-based software startup, specializing in EV charging optimization and management for sites with large quantities of EV chargers, which represented 34.8% of Wevo's outstanding shares. Wevo's solution will also be part of the SolarEdge ONE energy optimization system for the Commercial and Industrial ("C&I") segment, designed to offer SolarEdge customers a single energy optimization solution that orchestrates and integrates between on-site solar generation, battery storage and large-scale EV charging.

On April 1, 2024, the Company completed the acquisition of all remaining outstanding shares of Wevo for approximately $13,331 in cash.

Pursuant to ASC 805, "Business Combination", the Company accounted for the Wevo acquisition as a business combination using the acquisition method of accounting. Identifiable assets and liabilities of Wevo, including identifiable intangible assets, were recorded based on their estimated fair values as of the date of the closing of the acquisition. The excess of the purchase price over the fair value of the net assets acquired was recorded as goodwill. The Company recorded preliminary estimates for the fair value of assets acquired and liabilities assumed as of the acquisition date. Such preliminary valuation required estimates and assumptions including, but not limited to, estimating future cash flows and direct costs in addition to developing the appropriate discount rates and current market profit margins. The Company’s management believes the fair values recognized for the assets acquired and the liabilities assumed were based on reasonable estimates and assumptions.

From the initial investment through to the purchase of all remaining shares, the Company's share of net losses were $646.

The fair value of the original investment was determined by multiplying the total fair value of Wevo, as outlined below, by the Company's 34.8% ownership stake and applying a discount to account for lack of control.

The Company determined that the acquisition date fair value of the original investment on April 1, 2024 was $5,979, resulting in a gain of $1,125.

The following table summarizes the preliminary fair values estimation of assets acquired and liabilities assumed as of the date of the acquisition:

	Amount			Weighted Average Useful Life (In years)
Cash	$	2,914
Net liabilities assumed		(903	)
Identified intangible assets:
Technology		4,049			7
Customer relationships		1,241			1
Trade name		665			2
Goodwill		11,344
Total	$	19,310

Acquisition costs were immaterial and are included in general and administrative expenses in the consolidated statements of income (loss).

Goodwill generated from this acquisition was primarily attributable to expected post-acquisition synergies from combining Wevo's platform with the Company's product offering to its commercial and industrial customers. All of the Goodwill was assigned to the Solar segment (see Note 24). Goodwill is not deductible for tax purposes. The fair values of technology, customer relationships and trade name were derived by applying the multi-period excess earnings method, with-and-without method, and the relief-from-royalty method, respectively, all of which are under the income approach whose underlying inputs are considered Level 3. The fair values assigned to assets acquired and liabilities assumed were based on management's estimates and assumptions.

The results of Wevo have been included in the Company's consolidated statements of income (loss) since its acquisition date and are not material. Pro forma financial information has not been presented because the impact of the acquisition was not material to the Company's statements of income (loss).

F - 11

SOLAREDGE TECHNOLOGIES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands, except per share data)

NOTE 3: INVESTMENTS IN PRIVATELY-HELD COMPANIES

In January 2024, the Company completed an investment of $6,075 in the preferred stock of Ivy Energy, Inc, ("Ivy"), a privately-held U.S. company. The Company accounted for the Ivy investment as an equity investment that does not have readily determinable fair values. As such, the Company’s non-marketable equity securities had a carrying value of $6,075 as of September 30, 2024.

As of March 2024, the Company completed an investment of $5,000 in the preferred stock of Stardust Solution, Inc, ("Stardust"), a privately-held U.S. company. The Company accounted for the Stardust investment as an equity investment that does not have a readily determinable fair market value.

In April 2024, the Company completed an investment of approximately $17,000 in the preferred stock of Ampeers Energy GmbH ("Ampeers"), a privately-held German company, which represented 28.23% of Ampeers' outstanding shares.

The Company accounted for its investment in Ampeers using the equity method of accounting. Under this method, the investment, which was initially recorded at cost, is adjusted to recognize the Company’s share of net earnings or losses of the investee as they occur, rather than when dividends or other distributions are received. Investments in privately-held companies are included within other long-term assets in the condensed consolidated balance sheets. As of September 30, 2024 and December 31, 2023 the carrying value of investments in privately-held companies was $22,574 and $7,650, respectively.

In September 2024, the Company impaired its investment in Stardust in the amount of $5,000. This impairment was recorded under Other income (loss), net in the consolidated statements of income (loss).

There were no impairment charges for the three and nine months ended September 30, 2023 associated with these equity investments.

F - 12

SOLAREDGE TECHNOLOGIES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands, except per share data)

NOTE 4: MARKETABLE SECURITIES

The following is a summary of available-for-sale marketable securities as of September 30, 2024:

	Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
Matures within one year:
Corporate bonds	$	350,590	$	164	$	(1,505	)	$	349,249
U.S. Treasury securities		9,925		-		(7	)		9,918
U.S. Government agency securities		13,284		25		-			13,309
Non-U.S. Government securities		2,400		-		(7	)		2,393
		376,199		189		(1,519	)		374,869
Matures after one year:
Corporate bonds		46,103		638		(50	)		46,691
U.S. Government agency securities		9,280		70		-			9,350
		55,383		708		(50	)		56,041
Total	$	431,582	$	897

SOLAREDGE TECHNOLOGIES, INC. [SEDG] Filings
10-Q	[2024-11-07]
10-Q	[2024-08-07]
10-Q	[2024-05-09]
10-K	[2024-02-26]
10-Q	[2023-11-06]
10-Q	[2023-08-07]
10-Q	[2023-05-08]
10-K	[2023-02-22]
10-Q	[2022-11-08]
10-Q	[2022-08-04]
10-Q	[2022-05-04]
10-K	[2022-02-22]
10-Q	[2021-11-03]
10-Q	[2021-08-04]
10-Q	[2021-05-04]
10-K	[2021-02-19]
10-Q	[2020-11-04]
10-Q	[2020-08-06]
10-Q	[2020-05-07]
10-K	[2020-02-27]
10-Q	[2019-11-07]
10-Q	[2019-08-08]
10-Q	[2019-05-10]
10-K	[2019-02-28]
10-Q	[2018-11-02]
10-Q	[2018-08-03]
10-Q	[2018-05-10]
10-K	[2018-02-20]
10-Q	[2017-11-08]
10-Q	[2017-08-03]
10-Q	[2017-05-10]
10-Q	[2016-11-09]
10-K	[2016-08-17]
10-Q	[2016-05-10]
10-Q	[2016-02-08]
10-Q	[2015-11-06]
10-K	[2015-08-20]
10-Q	[2015-05-08]
S-1	[2015-02-18]