Israel-based solar inverter manufacturer SolarEdge reported a revenue of $219.5 million in the first quarter (Q1) of 2025, reflecting a 7% year-over-year increase from $204.4 million. The results surpassed analysts’ expectations by $15.2 million.

The U.S. accounted for $132.1 million, or 62% of the total revenue. European markets contributed $47.4 million (22%), while international markets added $32.6 million (16%).

Despite the revenue increase, SolarEdge reported a net loss of $66.1 million for the quarter, an improvement compared to a loss of $108.6 million in the same period last year.

The company’s loss per share came in at $1.14, higher than analyst expectations by $0.02 and a marked improvement over the $1.90 loss per share recorded in Q1 2024.

SolarEdge shipped 1,208 MW of inverters, marking the company’s highest shipment volume since Q3 2023. Inverter shipments were distributed across key markets, with 642 MW sent to the U.S., 324 MW to Europe, and 242 MW to international markets. The shipment mix was evenly split, with 50% allocated to commercial and utility-scale projects and 50% to residential deployments.

However, pricing challenges persisted during the quarter. The average selling price (ASP) per watt declined to $0.173, down 17% from the previous quarter. The drop was primarily attributed to lower pricing in the European market and a reduced optimizer-to-inverter ratio.

SolarEdge shipped 180 MWh on the battery front, with the majority delivered to Europe. The blended ASP per kWh for batteries rose to $267, up from $262 in Q4.

During the earnings call, CEO Shuki Nir outlined that the company is undertaking four strategic priorities to drive its turnaround, which include strengthening financials, regaining market share, accelerating innovation, and expanding U.S. manufacturing. He noted meaningful progress in each area.

A shift toward third-party ownership in the U.S. residential segment creates demand for SolarEdge’s domestically produced inverters, which help projects qualify for a 10% domestic content tax credit added, Nir noted.

In Europe, where the overall market is expected to decline year-over-year, SolarEdge is seeing localized signs of recovery. In the Netherlands, for instance, an upgrade campaign to replace photovoltaic-only inverters with backup inverters and battery systems has shown promise as net metering phases out.

SolarEdge said it ramped production in the U.S., creating nearly 2,000 jobs and reaching a capacity of 70,000 inverters per quarter. This development includes the first shipment of domestically sourced commercial and industrial products, strengthening the company’s position amid rising trade barriers.

A key concern for the company is the impact of newly imposed tariffs, 145% on Chinese products and 10% on imports from other regions. While these duties pose a short-term challenge, SolarEdge’s U.S.-based manufacturing footprint offers a partial buffer. In Q2, the company expects a 2% gross margin reduction due to tariffs, rising to 4% to 6% in the second half of 2025. However, proactive supply chain diversification and inventory strategies are expected to limit the impact to 2% by Q1 2026 and fully neutralize the effect by the end of 2026.

SolarEdge expects Q2 2025 revenues to fall within the range of $265 million to $285 million. The company projects a gross margin of 8% to 12%, factoring in approximately two percentage points of impact from newly implemented tariffs. The operating expenses are expected to range between $90 million and $95 million.

SolarEdge posted a total revenue of $901.5 million in 2024, a 69.7% YoY decline from $2.98 billion. The solar segment generated $842.4 million in revenue, compared to $2.82 billion the previous year.