SolarEdge, an Israel-based solar inverter manufacturer, recorded a net loss of $61.2 million in the third quarter (Q3) of 2023, a 348% year-over-year (YoY) drop from the net profit of $24.7 million.

The drop in net income was attributed to the considerable drop in demand, especially from the company’s primary markets in Europe, and the high inventory of products in the channels.

The company’s revenues were down by 13% to $725.3 million in Q3 from $836.7 million during the same quarter last year.

The revenues from the solar segment were recorded at $676.4 million, a 14% YoY drop from $788.6 million.

The company experienced a 16% surge in operating expenses to $159.5 million. The Q3 and Q4 expected revenue have been significantly lowered as the company experienced a burden due to the new infrastructure built to support the anticipated sales growth as the previous quarters.

During the quarterly earnings calls, Zvi Lando, CEO of SolarEdge, said, “Market demand began to slow in the third quarter, and distributors began to experience financial challenges. As a result, we received a large amount of requests to cancel or push out orders. In Europe, during the second part of the third quarter, we experienced significant unexpected cancellations and push out of the existing backlog from our European distributors. Although the dynamics are consistent with what we caution during our second-quarter earnings call, the magnitude grew much greater than we anticipated.”

SolarEdge’s inventory for Q3 2023 stood at $1.18 billion compared to $561.4 million in Q3 2022.

During the quarter, the company shipped 3.8 GW of inverters, 121 MWh of residential batteries, and 3.3 million power optimizers. It also started the initial inverter shipments from its first U.S. manufacturing facility and the first shipments of new 330 kW inverters to the U.S.

9M 2023

SolarEdge recorded a net income of $196.71 million for the first nine months (9M) of 2023, a 169.7% YoY increase from $72.95 million on the back of the increased demand across the company’s major markets during the first two quarters.

The company recorded a revenue of $2.66 billion from January to September, a 19.86% increase from the $2.22 billion recorded during the same period last year.

The operating expenses for the period surged by 17% YoY to $482.5 million.

Lando said, “The underlying demand in the European market was strong in the nine-month period ended September 30, although below the much-elevated expectation heading into the year leading to the inventory buildup. On an aggregated basis in Europe, our sell-through in the third quarter was up 34% year-over-year.”

During Q2 2023, the company posted a net income of $119.5 million, a YoY growth of 692% from $15.1 million.

Mercom had previously reported on how solar inverter suppliers to India remained optimistic about meeting the market demand through the global chip shortage and increasing inverter costs.