Inverter and energy management solutions manufacturer SolarEdge has posted record revenues and inverter shipments for Q2 as it benefited from strong demand for its products in the US and Europe, while addressing previous supply chain problems that had hampered performance in the previous quarter.
In Q2 2022, SolarEdge shipped 2.52GW of its inverters, resulting in a record revenue of US$727.8 million, up 11% from US$655.1 million from Q1 2022 and up 52% from the same quarter last year.
At the same time, the company surpassed the 2.5GW shipment level for the first time. Of these, 936MW were sent to the US, 1.2GW to Europe, building on SolarEdge’s strong performance there of late, and 357MW went out to the rest of the world.
In Q1 SolarEdge benefited from high demand for its products in Europe to increase revenues to a then-quarterly record, despite supply chain problems forcing it rely on air freight to sate European demand.
Out of the products shipped this quarter, 51% were commercial products, while the remaining 49% were residential, SolarEdge’s CFO Ronen Faier said in a conference call with analysts.
Its gross margin, however, was 25.1%, down from 27.3% in Q1 and down from 32.5% in the same quarter last year. But the company expects this to rise to between 27-30% for its solar segment in Q3 following a reordering of its supply chain and falling component costs.
SolarEdge has previously said it intends to increasing shipments to the US from a new production plant in Mexico as it looks to save on freight costs and reduce the impact of tariffs on imports.
Faier said this would allow the company to lower tariffs and sea freight costs when shipping to the US and he expects the Mexico facility to have a 100% run rate at the end of Q4, with all of those products heading to the US residential sector.
He also noted the price of key components, such as aluminium and copper, were decreasing, which would have a positive effect on the company’s operations.
“They are far from the level that they used to be in the past, but they are decreasing, and this is something that we continue to see.”
When asked by analysts about SolarEdge’s Q3 guidance, Faier said the company expected to ship the same number of products as it had in Q2, while it expects revenues in the range of US$810 million to US$840 million.
At the start of the week, power optimiser provider Ampt filed two lawsuits against SolarEdge in the US alleging patent infringement on power optimiser technology.
SolarEdge has dismissed the claim, referencing a previously ruling in its favour and accusing Ampt of “shopping around its claims to other courts”.
“SolarEdge anticipates a vigorous defense of these new cases,” it added.
Analyst commentary taken from The Motley Fool