Germany-based solar energy equipment supplier SMA Solar Technology reported a net income of €5.5 million (~$6.1 million) for the first quarter (Q1) of 2025, a 80% year-over-year (YoY) decrease of €28.5 million (~$32 million), missing analysts’ expectations.

The company’s revenue decreased 9.4% to €328 million (~$368 million), falling short of the estimate of €360.3 million (~$404 million).

The fall can be attributed to decreased sales in home solutions and commercial and industrial sectors.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) fell 50% YoY to €24.6 million (~$27.6 million) from €49.9 million (~$56.1 million).

The primary reasons for the decrease compared to the previous year were lower sales and lower fixed cost degression in the home solutions and commercial and industrial solutions segments.

In Q1 2025, the company’s home solutions sales stood at €21.9 million (~$24.6 million), a 65% decrease compared to €62.6 million (~$70.4 million) in Q1 2024. In the commercial and industrial solutions segment, sales stood at €26.3 million (~$29.6 million), reducing 62.6% from €70.5 million (~$79.3 million) in the same quarter the previous year.

The large-scale and project solutions sales during the quarter were at €279.5 million (~$314 million), a 22.2% YoY increase from €228.7 million (~$257 million).

Jürgen Reinert, CEO, SMA Solar Technology, said, “We saw a slight improvement in order intake in the home solutions and commercial and industrial solutions segments in the first quarter of 2025.”

He added, “Looking ahead to the coming quarters, we expect order intake to be less volatile overall due to the further normalization of inventories in distribution within these two segments, thereby returning to normal levels compared to the last two fiscal years.”

Kaveh Rouhi, CFO, SMA, said the large scale and project solutions segments contributed to the company’s sales and earnings.

“As planned, the operating performance of the home solutions and commercial and industrial solutions segments was lower than in the same quarter of the previous year. In addition, we are consistently working on implementing our restructuring and transformation program to achieve the planned improvement in earnings gradually,” added Rouhi.

The company’s order backlog was €1,293.9 million as of March 31, 2025. SMA Group’s free cash flow rose to €96.1 million (~$108 million) from a negative €45.7 million (~$51.4 million) in Q1 2024.

The company’s earnings per share stood at €0.16 (~$0.18) in Q1 2025.

Full Year Guidance 2025

Due to the deterioration of the macroeconomic environment and increased uncertainties caused by volatile tariff policies, along with their potential direct and indirect impacts on the company’s business, it expects sales and EBITDA to be in the lower third of the guidance range of €1,500 million to €1,650 million (~$1.6 billion) and €70 million (~$78.7 million) to €110 million (~$123 million).

“Looking ahead to the coming quarters, we expect order intake to be less volatile overall due to the further normalization of inventories in distribution within these two segments, thereby returning to normal levels compared to the last two fiscal years,” said Reinert.

The company’s revenue declined 19.7% in 2024, primarily due to a significant decrease in sales in the home solutions segment. However, it reported a 79% jump in its 2023 revenue on the back of strong inverter sales.