The solar inverter and battery energy storage supplier reported heavy losses for the full year 2024 but beat revenue expectations for Q4, 2024.
SolarEdge, a global provider of solar inverters, module-level power electronics, and battery energy storage, reported its Q4 and yearly earnings for 2024.
The company delivered quarterly revenue of $196.2 million, coming in roughly 4% higher than Wall Street consensus expectations. Share prices are up over 20% in the trading session following the earnings call.
SolarEdge also delivered a deep miss on earnings per share, reporting a loss of $3.52 per share, far lower than the expected loss of $1.66 per share. For the full year 2024, company reported a net loss of $1.8 billion, burning $313 million in cash. Gross margins were a loss of 97.3%. The company’s stock has fallen over 76% over the last twelve months.
SolarEdge’s struggles are not isolated to the company but are rather a symptom of an overall down market for distributed solar globally. SolarEdge had sustained steady growth for years, but in 2023 its year-over-year revenues fell by 4% to $3 billion. The full year 2024 proved to be an even more difficult year, as revenues fell 40% to $18 billion.
The company is now pursuing leaner operations and a focus on cash flow efficiency. In January, it announced layoffs of about 900 people, or about 16% of its workforce.
SolarEdge said the reduction is part of a restructuring plan “designed to reduce operating expenses and align its cost structure to current market dynamics.” Residential solar provider Sunnova recently announced employment cuts for similar reasons.
The company reported $26 million in free cash flow for Q4, and said it expects to generate positive free cash flow in Q1 2025 and the full year 2025.
“Positive cash flow is an essential first step. But our turnaround includes a relentless focus on operational efficiency to drive our return to profitability,” said said Shuki Nir, chief executive officer, SolarEdge, on the Q4 call.
Persistent high interest rates have squeezed high-growth tech stocks, including many in the solar industry. Falling oil and gas prices throughout 2023 and 2024 has also weakened demand for solar and other renewable resources.
However, the long-term outlook for solar remains strong. Solar is now the most dominant source of new electricity generation added to the grid in the United States. According to the Energy Information Administration (EIA), over 64% of new capacity added to the grid through three quarters in 2024 was solar, followed by natural gas.
Globally, clean energy investments are expected to surpass fossil fuels investments for the first time in 2025, according to S&P Global. S&P said investment in renewable power generation, green hydrogen, and carbon capture and storage will reach $670 billion in 2025, marking the first time these investments outpace projected upstream oil and gas spending.
“Solar PV is expected to represent half of all cleantech investments and two-thirds of installed megawatts,” said Edurne Zoco, executive director, Clean Energy Technology, S&P Global Commodity Insights.
“Demand for electricity is growing relentlessly,” said Nir. “Solar is among the most cost-effective sources of energy and SolarEdge is well positioned to lead this market due to the unique combination of our innovative technology, brilliant people, loyal distributors, over 70,000 installer partners, and the millions of homes and businesses that benefit from SolarEdge systems on a daily basis.”
