What changed in this filing

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Item 1. Financial Statements

2024-05-09 compared with 2023-11-06 · 268 added, 322 removed, 452 unchanged (57% of the section changed)

3 unchanged sentences

(in thousands, except per share data)

September 30,

CURRENT ASSETS:

16 unchanged sentences

(in thousands, except per share data)

September 30,

LIABILITIES AND STOCKHOLDERS’ EQUITY

17 unchanged sentences

Common stock of $ 0.0001 par value - Authorized:

125,000,000 shares as of September 30, 2023 and December 31, 2022;

issued and outstanding:

56,810,559 and 56,133,404 shares as of September 30, 2023 and December 31, 2022 , respectively

125,000,000 shares;

57,298,691 shares at

March 31, 2024 and 57,123,437 shares at December 31, 2023;

56,792,795 shares at

March 31, 2024 and 57,123,437 shares at December 31, 2023.

Additional paid-in capital

Treasury stock, at cost;

505,896 shares held

Accumulated other comprehensive loss

7 unchanged sentences

Three Months Ended

September 30,

Nine Months Ended

September 30,

Cost of revenues

Gross profit (loss)

Operating expenses:

6 unchanged sentences

Financial income (expense), net

Other income (loss), net

Other loss, net

Income (loss) before income taxes

Tax benefits (income taxes)

Net loss from equity method investments

Net income (loss)

8 unchanged sentences

Three Months Ended

September 30,

Nine Months Ended

September 30,

Net income (loss)

10 unchanged sentences

(in thousands, except per share data)

Additional paid in

Treasury stock

other comprehensive

Retained earnings

Balance as of January 1, 2024

1 unchanged sentence

Stock based compensation

Repurchase of common stock

Other comprehensive loss adjustments

Balance as of March 31, 2024

Issuance of common stock upon exercise of stock-based awards

Issuance of common stock under employee stock purchase plan

Stock based compensation

Other comprehensive loss adjustments

Balance as of June 30, 2023

Issuance of Common Stock upon exercise of stock-based awards

Stock based compensation

Other comprehensive loss adjustments

Balance as of September 30, 2023

* Represents an amount less than $1.

SOLAREDGE TECHNOLOGIES INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)

(in thousands, except per share data)

comprehensive

Additional paid in

other comprehensive

Retained earnings

Balance as of January 1, 2023

1 unchanged sentence

Stock based compensation

Issuance of common stock in a secondary public offering, net of underwriters' discounts and commissions of $27,140 and $834 of offering costs

Other comprehensive loss adjustments

Balance as of March 31, 2023

Issuance of common stock upon exercise of stock-based awards

Issuance of common stock under employee stock purchase plan

Stock based compensation

Other comprehensive loss adjustments

Balance as of June 30, 2022

Issuance of Common Stock upon exercise of stock-based awards

Stock based compensation

Other comprehensive loss adjustments

Balance as of September 30, 2022

* Represents an amount less than $1.

3 unchanged sentences

(in thousands, except per share data)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities:

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Depreciation and amortization

1 unchanged sentence

Stock-based compensation expenses

Impairment of goodwill and intangible assets

Deferred income taxes, net

Changes in assets and liabilities:

Trade receivables, net

Inventories, net

Prepaid expenses and other assets

Trade receivables, net

Right-of-use assets

Trade payables, net

2 unchanged sentences

Deferred revenues and customers advances

Operating lease liabilities

Accrued expenses and other liabilities, net

Net cash used in operating activities

Net cash provided by (used in) operating activities

Cash flows from investing activities:

2 unchanged sentences

Purchase of property, plant and equipment

Business combinations, net of cash acquired

Purchase of intangible assets

Disbursements for loans receivables

Investment in privately-held companies

Proceeds from governmental grant

Proceeds from sale of a privately-held company

Proceeds from loan receivables

Other investing activities

Net cash used in investing activities

Net cash provided by (used in) investing activities

SOLAREDGE TECHNOLOGIES INC.

1 unchanged sentence

(in thousands, except per share data)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from financing activities:

Repurchase of common stock

Payments on account of repurchase of common stock

Tax withholding in connection with stock-based awards, net

Payments of finance lease liability

Proceeds from secondary public offering, net of issuance costs

Other financing activities

Net cash provided by (used in) financing activities

Increase (decrease) in cash and cash equivalents

Cash and cash equivalents at the beginning of the period

Net cash used in financing activities

Effect of exchange rate differences on cash and cash equivalents

Decrease in cash and cash equivalents

Cash and cash equivalents at the beginning of the period

Cash and cash equivalents at the end of the period

Supplemental disclosure of non-cash activities:

Purchase of intangible assets and business combinations

Right-of-use asset recognized with a corresponding lease liability

6 unchanged sentences

(the “Company”) and its subsidiaries design, develop, and sell an intelligent inverter solution designed to maximize power generation at the individual photovoltaic (“PV”) module level while lowering the cost of energy produced by the solar PV system and providing comprehensive and advanced safety features.

The Company’s products consist mainly of (i) power optimizers designed to maximize energy throughput from each and every module through constant tracking of Maximum Power Point individually per module, (ii) inverters which invert direct current (DC) from the PV module to alternating current (AC) including the Company’s Energy Hub inverter which supports, among other things, connection to a DC-coupled battery for full or partial home backup, and optional connection to the Company's smart EV charger, (iii) a remote cloud-based monitoring platform, that collects and processes information from the power optimizers and inverters to enable customers and system owners, to monitor and manage the solar PV system (iv) a residential storage and backup solution which includes a company designed and manufactured lithium-ion DC-coupled battery that is used to increase energy independence and maximize self-consumption for homeowners including a battery, and (v) additional smart energy management solutions.

The Company’s products consist mainly of (i) power optimizers designed to maximize energy throughput from each and every module through constant tracking of Maximum Power Point individually per module, (ii) inverters which invert direct current (DC) from the PV module to alternating current (AC) including the Company’s future ready Energy Hub inverter which supports, among other things, connection to a DC-coupled battery for full or partial home backup capabilities, and optional connection to the Company's smart EV charger, (iii) a remote cloud-based monitoring platform, that collects and processes information from the power optimizers and inverters to enable customers and system owners, to monitor and manage the solar PV system (iv) batteries for PV applications that are used to increase energy independence and maximize self-consumption for PV system's owners including a battery ,and (v) additional smart energy management solutions.

The Company and its subsidiaries sell products worldwide through large distributors, electrical equipment wholesalers, as well as directly to large solar installers and engineering, procurement, and construction firms.

The Company has expanded its activity to other areas of smart energy technology organically and through acquisitions.

The Company now offers a variety of energy solutions, which include lithium-ion cells, batteries, and energy storage systems (“Energy Storage”), full powertrain kits for electric vehicles, or EVs (“e-Mobility”), as well as automated machines for industrial use (“Automation Machines”).

On April 6, 2023, the Company completed the acquisition of all outstanding shares of Hark Systems Ltd.

("Hark"), a UK-based energy IoT company for the commercial and industrial ("C&I") sector, which operates under the newly established consulting segment (see note 2 ).

The Company offers a variety of energy solutions, which include lithium-ion cells, batteries, and energy storage systems (“Energy Storage”), automated machines for industrial use (“Automation Machines”), as well as cloud-based energy management solutions.

Basis of Presentation:

11 unchanged sentences

Reliance on these vendors makes the Company vulnerable to possible capacity constraints and reduced control over component availability, delivery schedules, manufacturing yields, and costs.

As of September 30, 2023 , and December 31, 2022 , two contract manufacturers collectively accounted for 40.9 % and 34.3 % of the Company’s total trade payables, net, respectively.

In the second quarter of 2022, the Company announced the opening of “Sella 2”, a two gigawatt-hour (GWh) Li-Ion battery cell manufacturing facility located in South Korea.

Sella 2 began producing and shipping cells at the end of 2022 and is expected to reach full manufacturing capacity in early 2024.

Sella 2 is the Company's second owned manufacturing facility following the establishment of Sella 1 in 2020.

Sella 1 is the Company's manufacturing facility in the North of Israel that produces power optimizers and inverters for the Company's solar activities.

New accounting standards updates:

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB") or other standard setting bodies are adopted by the Company as of the specified effective date.

The Company believes that the impact of recently issued or newly effective standards were not applicable to the Company, did not have a material impact on the condensed consolidated financial statements or are not expected to have a material impact on the condensed consolidated financial statements.

As of March 31, 2024, and December 31, 2023, two contract manufacturers collectively accounted for 44.9 % and 58.5 % of the Company’s total trade payables, net, respectively.

The Company's own manufacturing facility, Sella 1, located in the north of Israel, is primarily used in the Company's Solar segment operations.

Additionally, Sella 2, a Company owned manufacturing facility in South Korea, together with a smaller Company owned facility, are used for the Energy Storage segment.

SOLAREDGE TECHNOLOGIES INC.

1 unchanged sentence

(in thousands, except per share data)

BUSINESS COMBINATIONS

On April 6, 2023, the Company completed the acquisition of all outstanding shares of Hark Systems Ltd.

("Hark"), a UK-based energy IoT company for the commercial and industrial ("C&I") sector for approximately $ 18,346 in cash.

Hark's platform is expected to enable the Company to offer its commercial and industrial customers expanded capabilities in energy management and connectivity, including identification of potential energy savings, detection of anomalies in assets’ energy consumption, and optimization of energy usage and carbon emissions through load orchestration and storage control.

Pursuant to ASC 805, "Business Combination", the Company accounted for the Hark acquisition as a business combination using the acquisition method of accounting.

Identifiable assets and liabilities of Hark, including identifiable intangible assets, were recorded based on their estimated fair values as of the date of the closing of the acquisition.

The excess of the purchase price over the fair value of the net assets acquired was recorded as goodwill.

The Company recorded preliminary estimates for the fair value of assets acquired and liabilities assumed as of the acquisition date.

Such preliminary valuation required estimates and assumptions including, but not limited to, estimating future cash flows and direct costs in addition to developing the appropriate discount rates and current market profit margins.

The Company’s management believes the fair values recognized for the assets acquired and the liabilities assumed were based on reasonable estimates and assumptions.

The following table summarizes the preliminary fair values estimation of assets acquired and liabilities assumed as of the date of the acquisition:

Weighted Average Useful Life (In years)

Net liabilities assumed

Identified intangible assets:

Current technology

Customer relationships

Acquisition costs were immaterial and are included in general and administrative expenses in the consolidated statements of income.

Goodwill generated from this acquisition was primarily attributable to the assembled workforce and expected post-acquisition synergies from combining Hark platform with the Company's product offering to its commercial and industrial customers.

All of the Goodwill was assigned to the new Consulting segment (see Note 21 ).

Goodwill was not deductible for tax purposes.

The fair values of technology, customer relationships and trade name were derived by applying the multi-period excess earnings method, with-and-without method, and the relief-from-royalty method, respectively, all of which are under the income approach whose underlying inputs are considered Level 3.

The fair values assigned to assets acquired and liabilities assumed were based on management's estimates and assumptions.

The results of Hark have been included in the Company's consolidated statements of income (loss) since the acquisition date and are not material.

Pro forma financial information has not been presented because the impact of the acquisition was not material to the Company's statement of income.

New accounting standards updates:

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures” (“ASU 2023-07”).

Additional segment reporting information required by ASU 2023-07 includes:

disclosing the title and position of the individual or the name of the group or committee identified as the CODM, provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually, and additional disclosures regarding significant segment expenses.

ASU 2023-07 is effective for fiscal periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The Company is currently evaluating the impact of adopting ASU 2023-07.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures” (“ASU 2023-09”).

ASU 2023-09 requires additional categories of information about federal, state and foreign income taxes to be included in effective tax rate reconciliation disclosure.

Additionally, the newly added categories also apply to the income taxes paid disclosure.

Implementation of said additions are subject to quantitative thresholds.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024.

The Company is currently evaluating the impact of adopting ASU 2023-09.

INVESTMENTS IN PRIVATELY-HELD COMPANIES

In January 2023, the Company completed an investment of $ 5,500 in the common stock of Weev Energy B.F.

Ltd., ("Wevo"), a privately-held company, which represented 34.8 % of Wevo's outstanding shares.

The investment agreement included a call option to acquire Wevo's remaining outstanding shares.

The Company accounted for the common stock and the call option as a single hybrid instrument.

The Company accounted for its investment in Wevo using the equity method of accounting.

Under this method, the investment, which was initially recorded at cost, is adjusted to recognize the Company’s share of net earnings or losses of the investee as they occur, rather than when dividends or other distributions are received.

The Company's share of net losses in the three months ended March 31, 2024 were $ 296 .

In January 2024, the Company completed an investment of $ 6,000 in the preferred stock of Ivy Energy, Inc, ("Ivy"), a privately-held U.S.

The Company accounted for the Ivy investment as an equity investment that does not have readily determinable fair values.

As such, the Company’s non-marketable equity securities had a carrying value of $ 6,000 as of March 31, 2024.

As of March 2024, the Company completed an investment of $ 5,000 in the preferred stock of Stardust Solution, Inc, ("Stardust"), a privately-held U.S.

The Company accounted for the Stardust investment as an equity investment that does not have readily determinable fair values.

As such, the Company’s non-marketable equity securities had a carrying value of $ 5,000 as of March 31, 2024.

Investments in privately-held companies are included within other long-term assets in the condensed consolidated balance sheets.

As of March 31, 2024, the carrying value of investments in privately-held companies was $ 16,183 .

There were no impairment charges for the three months ended March 31, 2024 associated with this equity method investment.

SOLAREDGE TECHNOLOGIES INC.

2 unchanged sentences

MARKETABLE SECURITIES

The following is a summary of available-for-sale marketable securities as of September 30, 2023 :

unrealized gains

unrealized losses

The following is a summary of available-for-sale marketable securities as of March 31, 2024:

Amortized cost

Gross unrealized gains

Gross unrealized losses

Matures within one year:

1 unchanged sentence

Treasury securities

Government agency securities

Government securities

1 unchanged sentence

Corporate bonds

Treasury securities

Government agency securities

1 unchanged sentence

The following is a summary of available-for-sale marketable securities as of December 31, 2023:

unrealized gains

unrealized losses

Amortized cost

Gross unrealized gains

Gross unrealized losses

Matures within one year:

1 unchanged sentence

Treasury securities

Government agency securities

Government securities

2 unchanged sentences

Treasury securities

Government agency securities

Government securities

Proceeds from sales of available-for-sale marketable securities during the nine months ended September 30, 2023 and 2022 were $ 2,807 and $ 29,235 , which led to realized losses of $ 125 and $ 723 , respectively.

There were no proceeds from sales of available-for-sale marketable securities during the three months ended September 30, 2023 .

Proceeds from sales of available-for-sale marketable securities during the three months ended September 30, 2022 were $ 5,811 , which led to realized gains of $ 121 .

As of September 30, 2023 , and December 31, 2022 , the Company did not record an allowance for credit losses for its available-for-sale marketable securities.

The Company did not sell any available-for-sale marketable securities during the three months ended March 31, 2024

Proceeds from sales of available-for-sale marketable securities during the three months ended March 31, 2023 were $ 2,807 , which led to realized losses of $ 125 .

As of March 31, 2024, and December 31, 2023, the Company did not record an allowance for credit losses for its available-for-sale marketable securities.

SOLAREDGE TECHNOLOGIES INC.

2 unchanged sentences

INVENTORIES, NET

September 30, 2023

December 31, 2022

Raw materials

3 unchanged sentences

PREPAID EXPENSES AND OTHER CURRENT ASSETS

September 30, 2023

December 31, 2022

Vendor non-trade receivables 1

7 unchanged sentences

The Company does not reflect the sale of these components to the contract manufacturers in its revenues.

(2) Loan receivables is a loan to a third party.

The loan will be repaid on a monthly basis with an additional agreed interest for the long term portion of the loan.

See Note 8 for additional information.

The loan is measured at its amortized cost and is subjected to the Company's credit risk policy as stated in the most recent 10-K filing.

Expected provision for credit loss regarding this loan was immaterial.

The amortized cost of the loan receivable approximates its fair value as of September 30, 2023.

SOLAREDGE TECHNOLOGIES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands, except per share data)

INTANGIBLE ASSETS, NET

Acquired intangible assets consisted of the following as of September 30, 2023 , and December 31, 2022 :

September 30, 2023

December 31, 2022

Intangible assets with finite lives:

Current Technology

Customer relationships

Assembled workforce

Patents and licenses*

Gross intangible assets

Less - accumulated amortization

Total intangible assets, net

* See Note 16

For the three months ended September 30, 2023 and 2022 , the Company recorded amortization expenses related to intangible assets in the amount of $ 2,663 and $ 2,464 , respectively.

For the nine months ended September 30, 2023 and 2022 , the Company recorded amortization expenses related to intangible assets in the amount of $ 5,901 and $ 7,741 , respectively.

Expected future amortization expenses of intangible assets as of September 30, 2023 are as follows:

2028 and thereafter

SOLAREDGE TECHNOLOGIES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands, except per share data)

Changes in the carrying amount of goodwill for the period ended September 30, 2023 were as follows:

Goodwill at December 31, 2022

Changes during the year:

Foreign currency adjustments

Goodwill at September 30, 2023

As of September 30, 2023 and December 31, 2022 there were $ 90,104 accumulated goodwill impairment losses.

2 Loan receivables are loans to third parties.

The loan repayments are expected on a monthly or annual basis as per the contractual terms of each loan agreement.

The loan is measured at its amortized cost and is subjected to the Company's credit risk policy.

The loans bear interest that represent market interest rate.

As of March 31, 2024, the Company's provision for credit loss was $ 2,395 .

The amortized cost of the loan receivable approximates its fair value as of March 31, 2024.

SOLAREDGE TECHNOLOGIES INC.

2 unchanged sentences

OTHER LONG TERM ASSETS

September 30, 2023

December 31, 2022

Cloud computing arrangements

2 unchanged sentences

Loan receivables

Prepaid expenses and other

Total other long term assets

(1) In January 2023, the Company completed an investment of $ 5,500 in the common stock of a privately-held company which represents 34.8 % of its outstanding shares.

The Company accounted for this investment using the equity method of accounting.

The Company's share of net earnings or losses in the nine months ended September 30, 2023 was immaterial.

(2) In April and July of 2023, the Company completed a total investment of $ 2,500 in the preferred stock of a privately-held company which represents 4.5 % of its outstanding shares on a fully diluted basis.

The Company accounted for this investment as an equity investment without readily determinable fair values.

No impairment or other adjustments related to observable price changes in orderly transactions for identical or similar investments were identified.

SOLAREDGE TECHNOLOGIES INC.

2 unchanged sentences

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

During the nine months ended September 30, 2023 , the Company instituted a foreign currency cash flow hedging program to reduce the risk of a forecasted increase in the value of foreign currency cash flows, resulting from payment of salaries in Israeli currency, the New Israeli Shekels (“NIS”).

During the three months ended March 31, 2024, the Company instituted a foreign currency cash flow hedging program to reduce the risk of a forecasted increase in the value of foreign currency cash flows, resulting from payment of salaries in Israeli currency, the New Israeli Shekels (“NIS”).

The Company hedges portions of the anticipated payroll denominated in NIS for a period of one to nine months with hedging contracts.

These hedging contracts are designated as cash flow hedges, as defined by ASC 815 and are all effective hedges.

As of September 30, 2023 , the Company entered into forward contracts and put and call options to sell U.S.

dollars (“USD”) for NIS in the amount of approximately NIS 38 million and NIS 622 million , respectively.

In addition to the above-mentioned cash flow hedge transactions, the Company occasionally enters into derivative instrument arrangements to hedge the Company’s exposure to currencies other than the USD.

These derivative instruments are not designated as cash flow hedges, as defined by ASC 815, and therefore all gains and losses, resulting from fair value remeasurement, were recorded immediately in the statement of income, under " Financial income (expense), net ".

As of September 30, 2023, the Company entered into put and call option contracts to sell Euro ("EUR") for USD in the amount of EUR 120 million.

As of March 31, 2024, the Company entered into put and call options to sell U.S.

dollars (“USD”) for NIS in the amount of NIS 276 million.

As of March 31, 2024, the Company entered into a cross-currency swap contract to sell Euro (“EUR”) for USD in the amount of EUR 18 million.

The Company classifies cash flows related to its hedging as operating activities in its condensed consolidated statement of cash flows.

1 unchanged sentence

Balance sheet location

September 30,

Derivative assets of options and forward contracts:

8 unchanged sentences

Gains (losses) on derivative instruments are summarized below:

Three Months Ended

September 30,

Nine Months Ended

September 30,

Affected line item

Three Months Ended

Foreign exchange contracts

11 unchanged sentences

Marketable securities and foreign currency derivative contracts are classified within level 2 due to these assets being valued by alternative pricing sources and models utilizing market observable inputs.

The following table sets forth the Company’s assets that were measured at fair value as of September 30, 2023 and December 31, 2022, by level within the fair value hierarchy:

The following table sets forth the Company’s assets that were measured at fair value as of March 31, 2024 and December 31, 2023, by level within the fair value hierarchy:

Fair value measurements as of

September 30,

Fair Value Hierarchy

Cash and cash equivalents:

4 unchanged sentences

Treasury securities

Government agency securities

Government securities

6 unchanged sentences

WARRANTY OBLIGATIONS

Changes in the Company’s product warranty obligations for the three and nine months ended September 30, 2023 and 2022 , were as follows:

Three Months Ended

September 30,

Nine Months Ended

September 30,

Changes in the Company’s product warranty obligations for the three months ended March 31, 2024 and 2023, were as follows:

Three Months Ended March 31,

Balance, at the beginning of the period

Additions and adjustments to cost of revenues

Usage and current warranty expenses

Accruals for warranty during the period

Changes in estimates

Balance, at end of the period

8 unchanged sentences

Changes in the balances of deferred revenues and customer advances during the period are as follows:

Three Months Ended

September 30,

Nine Months Ended

September 30,

Three Months Ended March 31,

Balance, at the beginning of the period

4 unchanged sentences

Long term portion

The following table includes estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of September 30, 2023:

The following table includes estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of March 31, 2024:

Total deferred revenues

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

September 30,

Accrued expenses

2 unchanged sentences

Accrual for sales incentives

Finance lease

Finance lease liabilities

Total accrued expenses and other current liabilities

17 unchanged sentences

If certain fundamental changes referred to as make-whole fundamental changes occur, the conversion rate for the Notes may be increased.

The Convertible Senior Notes consisted of the following as of September 30, 2023 and December 31, 2022:

September 30,

The Convertible Senior Notes consisted of the following as of March 31, 2024 and December 31, 2023:

Unamortized issuance costs

Net carrying amount

For the three months ended September 30, 2023 and 2022 the Company recorded amortized debt issuance costs related to the Notes in the amount of $ 733 and $ 730 , respectively.

For the nine months ended September 30, 2023 and 2022 the Company recorded amortized debt issuance costs related to the Notes in the amount of $ 2,196 and $ 2,186 , respectively.

As of September 30, 2023, the unamortized issuance costs of the Notes will be amortized over the remaining term of approximately 2 years.

For the three months ended March 31, 2024 and 2023 the Company recorded amortized debt issuance costs related to the Notes in the amount of $ 735 and $ 731 , respectively.

As of March 31, 2024, the unamortized issuance costs of the Notes will be amortized over the remaining term of approximately 1.5 years.

The annual effective interest rate of the Notes is 0.47 %.

As of September 30, 2023, the estimated fair value of the Notes, which the Company has classified as Level 2 financial instruments, is $ 578,048 .

As of March 31, 2024, the estimated fair value of the Notes, which the Company has classified as Level 2 financial instruments, is $ 577,428 .

The estimated fair value was determined based on the quoted bid price of the Notes in an over-the-counter market on the last trading day of the reporting period.

As of September 30, 2023, the if-converted value of the Notes did not exceed the principal amount.

As of March 31, 2024, the if-converted value of the Notes did not exceed the principal amount.

SOLAREDGE TECHNOLOGIES INC.

4 unchanged sentences

Common stock confers upon its holders the right to receive notice of, and to participate in, all general meetings of the Company, where each share of common stock shall have one vote for all purposes, to share equally, on a per share basis, in bonuses, profits, or distributions out of fund legally available therefor, and to participate in the distribution of the surplus assets of the Company in the event of liquidation of the Company.

Secondary public offering:

On March 17, 2022, the Company offered and sold 2,300,000 shares of the Company’s common stock, at a public offering price of $ 295.00 per share.

The shares of Common Stock were issued and sold in a registered offering pursuant to the underwriting agreement dated March 17, 2022, among the Company, Goldman Sachs & Co.

Morgan Securities LLC, and Morgan Stanley & Co.

LLC (the “Underwriting Agreement”).

All of the offered shares were issued at closing, including 300,000 shares of Common Stock that were issued and sold pursuant to the underwriters’ option to purchase additional shares under the Underwriting Agreement, which was exercised in full on March 18, 2022.

The net proceeds to the Company were $ 650,526 after deducting underwriters' discounts of $ 27,140 and commissions of $ 834 .

Equity Incentive Plans:

4 unchanged sentences

The 2015 Plan provides for the grant of options, restricted stock units ("RSU"), performance stock units ("PSU"), and other share-based awards to directors, employees, officers, and non-employees of the Company and its subsidiaries.

As of September 30, 2023 , a total of 20,853,755 shares of common stock were reserved for issuance pursuant to stock awards under the 2015 Plan (the “Share Reserve”), an aggregate of 11,845,915 shares are still available for future grants.

As of March 31, 2024, a total of 23,709,926 shares of common stock were reserved for issuance pursuant to stock awards under the 2015 Plan (the “Share Reserve”), an aggregate of 13,676,076 shares are still available for future grants.

The Share Reserve will automatically increase on January 1 st of each year during the term of the 2015 Plan, commencing on January 1 st of the year following the year in which the 2015 Plan becomes effective, in an amount equal to 5 % of the total number of shares of capital stock outstanding on December 31 st of the preceding calendar year;

5 unchanged sentences

The aggregate maximum number of shares of common stock that may be issued on the exercise of incentive stock options is 10,000,000 .

As of September 30, 2023 , an aggregate of 8,617,974 options are still available for future grants under the 2015 Plan.

As of March 31, 2024, an aggregate of 8,617,974 options are still available for future grants under the 2015 Plan.

SOLAREDGE TECHNOLOGIES INC.

1 unchanged sentence

(in thousands, except per share data)

STOCK CAPITAL (Cont.)

A summary of the activity in stock options and related information is as follows:

4 unchanged sentences

Outstanding as of December 31, 2023

Outstanding as of September 30, 2023

Vested and expected to vest as of September 30, 2023

Exercisable as of September 30, 2023

The intrinsic value is the amount by which the closing price of the Company’s common stock on September 30, 2023 of $ 129.51 or the price on the day of exercise exceeds the exercise price of the stock options multiplied by the number of in-the-money options.

Outstanding as of March 31, 2024

Vested and expected to vest as of March 31, 2024

Exercisable as of March 31, 2024

The intrinsic value is the amount by which the closing price of the Company’s common stock on March 31, 2024 of $ 70.98 or the price on the day of exercise exceeds the exercise price of the stock options multiplied by the number of in-the-money options.

A summary of the activity in the RSUs and related information is as follows:

2 unchanged sentences

Unvested as of December 31, 2023

Unvested as of September 30, 2023

Unvested as of March 31, 2024

A summary of the activity in the PSUs and related information is as follows:

2 unchanged sentences

Unvested as of December 31, 2023

Unvested as of September 30, 2023

Unvested as of March 31, 2024

Employee Stock Purchase Plan ("ESPP"):

The Company adopted an ESPP effective upon the consummation of the IPO.

As of September 30, 2023 , a total of 4,150,380 shares were reserved for issuance under this plan.

As of March 31, 2024, a total of 4,638,023 shares were reserved for issuance under this plan.

The number of shares of common stock reserved for issuance under the ESPP will increase automatically on January 1 st of each year, for ten years, by the lesser of 1% of the total number of shares of the Company’s common stock outstanding on December 31st of the preceding calendar year or 487,643 shares.

3 unchanged sentences

The price of an ordinary share purchased under the ESPP is equal to 85 % of the lower of the fair market value of the ordinary share on the subscription date of each offering period or on the purchase date.

As of September 30, 2023 , 780,370 shares of common stock have been purchased under the ESPP.

As of September 30, 2023 , 3,370,010 shares of common stock were available for future issuance under the ESPP.

In accordance with ASC No.

718, the ESPP is compensatory and, as such, results in recognition of compensation cost.

SOLAREDGE TECHNOLOGIES INC.

1 unchanged sentence

(in thousands, except per share data)

STOCK CAPITAL (Cont.)

As of March 31, 2024, 938,164 shares of common stock have been purchased under the ESPP.

As of March 31, 2024, 3,699,859 shares of common stock were available for future issuance under the ESPP.

In accordance with ASC No.

718, the ESPP is compensatory and, as such, results in recognition of compensation cost.

Stock-based compensation expenses:

The Company recognized stock-based compensation expenses related to all stock-based awards in the consolidated statement of income for the three and nine months ended September 30, 2023 , and 2022 , as follows:

The Company recognized stock-based compensation expenses related to all stock-based awards in the condensed consolidated statement of income (loss) for the three months ended March 31, 2024, and 2023, as follows:

Three Months Ended

September 30,

Nine Months Ended

September 30,

Stock-based compensation expenses:

7 unchanged sentences

Total stock-based compensation capitalized

The total tax benefit associated with stock-based compensation for the three months ended September 30, 2023 and 2022 was $ 3,124 and $ 2,646 , respectively.

The tax benefit realized from stock-based compensation for the three months ended September 30, 2023 , and 2022 was $ 1,589 and $ 3,060 , respectively.

The total tax benefit associated with stock-based compensation for the nine months ended September 30, 2023 , and 2022 was $ 11,422 and $ 9,182 , respectively.

The tax benefit realized from stock-based compensation for the nine months ended September 30, 2023 , and 2022 was $ 7,050 and $ 8,871 , respectively.

As of September 30, 2023 , there were total unrecognized compensation expenses in the amount of $ 290,401 related to non-vested equity-based compensation arrangements granted.

These expenses are expected to be recognized during the period from October 1, 2023 , through August 31, 2027 .

The total tax benefit associated with share-based compensation for the three months ended March 31, 2024 and 2023 was $ 5,366 and $ 4,197 , respectively.

The tax benefit realized from share-based compensation for three months ended March 31, 2024 and 2023 was $ 1,341 and $ 2,842 , respectively.

As of March 31, 2024, there were total unrecognized compensation expenses in the amount of $ 298,976 related to non-vested equity-based compensation arrangements granted.

These expenses are expected to be recognized during the period from April 1, 2024 through February 29, 2028

Repurchase of Common Stock :

On November 1, 2023, the Company announced the approval by the Board of Directors of a share repurchase program which authorizes the repurchase of up to $ 300,000 of the Company’s common stock.

Under the share repurchase program, repurchases can be made using a variety of methods, which may include open market purchases, block trades, privately negotiated transactions, accelerated share repurchase programs and/or a non-discretionary trading plan or other means, including through 10b5-1 trading plans, all in compliance with the rules of the SEC and other applicable legal requirements.

The timing, manner, price and amount of any common share repurchases under the share repurchase program are determined by the Company in its discretion and depend on a variety of factors, including legal requirements, price and economic and market conditions.

The program does not obligate the Company to acquire any amount of common stock, it may be suspended, extended, modified, discontinued or terminated at any time at the Company’s discretion without prior notice, and will expire on December 31, 2024.

During the three months ended March 31, 2024, the Company repurchased 505,896 shares of common stock from the open market at an average cost of $ 65.67 per share for a total of $ 33,222 .

SOLAREDGE TECHNOLOGIES INC.

2 unchanged sentences

COMMITMENTS AND CONTINGENT LIABILITIES

As of September 30, 2023 , contingent liabilities exist regarding guarantees in the amounts of $ 5,804 , and $ 1,821 in respect of office rent lease agreements and other transactions, respectively.

As of March 31, 2024, contingent liabilities exist regarding guarantees in the amounts of $ 6,002 , and $ 1,841 in respect of office rent lease agreements and other transactions, respectively.

Contractual purchase obligations:

2 unchanged sentences

In addition, the Company acquires raw materials or other goods and services, including product components, by issuing authorizations to its suppliers to purchase materials based on its projected demand and manufacturing needs.

As of September 30, 2023 , the Company had non-cancellable purchase obligations totaling approximately $ 1,116,593 , out of which the Company recorded a provision for loss in the amount of $ 13,463 .

As of September 30, 2023 , the Company had contractual obligations for capital expenditures totaling approximately $ 120,572 .

These commitments reflect purchases of automated assembly lines and other machinery related to the Company’s general manufacturing process and mainly to its new manufacturing site in the U.S.

As of March 31, 2024, the Company had non-cancellable purchase obligations totaling approximately $ 484,287 , out of which the Company recorded a provision for loss in the amount of $ 23,259 .

As of March 31, 2024, the Company had contractual obligations for capital expenditures totaling approximately $ 32,967 .

These commitments reflect purchases of automated assembly lines and other machinery related to the Company’s general manufacturing process and are primarily for its new manufacturing sites in the U.S.

Legal claims:

3 unchanged sentences

These accruals are reviewed at least quarterly and adjusted to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular matter.

In September 2018, the Company’s German subsidiary, SolarEdge Technologies GmbH, received a complaint filed by competitor SMA Solar Technology AG (“SMA”).

The complaint, filed in the District Court Düsseldorf, Germany, alleged that SolarEdge's 12.5kW - 27.6kW inverters infringed on two of the plaintiff’s patents.

SMA asserted a value in dispute of EUR 5.5 million (approximately $ 5,830 ) for both patents.

The Company challenged the validity of both patents and the first patent was invalidated and SMA’s appeal on the matter was denied in January 2023.

In August 2021, the German Patent Court rendered SMA's second patent invalid, and this invalidity has been appealed by SMA.

In May 2023 the Federal Supreme Court as final instance in the nullity proceedings revoked the second patent, and SMA withdrew its infringement complaint.

On July 28, 2022, the Company and its subsidiary SolarEdge Technologies Ltd were served with complaints filed by Ampt LLC ("Ampt") in the International Trade Commission (the “Commission”) pursuant to Section 337 of the Tariff Act of 1930, as amended, and related lawsuits in the District Court for the District of Delaware alleging patent infringement against the Company.

On May 9, 2023, Ampt and the Company entered into a settlement agreement pursuant to which the parties agreed to dismiss all proceedings related to the complaints, and the parties have granted each other 10-year cross-licenses for certain intellectual property.

As of September 30, 2023 , an immaterial amount for legal claims was recorded in accrued expenses and other current liabilities.

On November 3, 2023, Daphne Shen, a purported stockholder of the Company, filed a proposed class action complaint for violation of federal securities laws, individually and punitively on behalf of all others similarly situated, in the U.S.

District Court of the Southern District of New York against the Company, the Company’s CEO and the Company’s CFO.

The complaint alleges violations of Section 10(b) and Rule 10b-5 of the Exchange Act, as well as violations of Section 20(a) of the Exchange Act against the individual defendants.

The complaint seeks class certification, damages, interest, attorneys’ fees, and other relief.

On December 13, 2023, Javier Cascallar filed a similar proposed class action.

On February 7, 2024, the Court consolidated the two actions, and appointed co-lead plaintiffs and lead counsel.

On April 22, 2024, the co-lead Plaintiffs filed an amended complaint adding two additional officers.

The amended complaint makes substantially similar allegations and claims.

Due to the early stage of this proceeding, the Company cannot reasonably estimate the potential range of loss , if any, or the likelihood of a potential adverse outcome.

The Company disputes the allegations of wrongdoing and intends to vigorously defend against them.

In August 2019, the Company was served with a lawsuit filed in the civil courts of Milan, Italy against the Italian subsidiary of SolarEdge e-Mobility S.r.l (previously SMRE S.p.A) that purchased the shares of SolarEdge e-Mobility in the tender offer that followed the SolarEdge e-Mobility Acquisition by certain former shareholders of SolarEdge e-Mobility who tendered their shares.

The lawsuit asked for damages of approximately $ 3,000 , representing the difference between the amount for which they tendered their shares ( 6 Euro per share) and 6.7 Euros per share.

In December 2023, the court of Milan, rendered a decision ordering SolarEdge to pay, in favor of each plaintiff, the difference between the price paid ( 6 Euro per share) and 6.44 Euro per share, (i.e.

0.44 euros per share) for a total payment of approximately $ 1,700 , which consists, in addition to the shareholders' compensation, legal expenses, court fees, VAT, and CPA expenses per local law.

The Company is currently evaluating whether to appeal this decision.

As of March 31, 2024, the Company recorded an accrual of $ 2,229 for legal claims which was recorded under accrued expenses and other current liabilities.

SOLAREDGE TECHNOLOGIES INC.

3 unchanged sentences

The following table summarizes the changes in accumulated balances of other comprehensive gain (loss), net of taxes:

Three Months Ended

September 30,

Nine Months Ended

September 30,

Three Months Ended March 31,

Unrealized gains (losses) on available-for-sale marketable securities

1 unchanged sentence

Tax on revaluation

Other comprehensive income (loss) before reclassifications

Other comprehensive income before reclassifications

Reclassification

Tax on reclassification

Losses reclassified from accumulated other comprehensive income (loss)

Net current period other comprehensive income (loss)

Losses reclassified from accumulated other comprehensive income

Net current period other comprehensive income

Ending balance

2 unchanged sentences

Tax on revaluation

Other comprehensive income (loss) before reclassifications

Other comprehensive loss before reclassifications

Reclassification

Tax on reclassification

Losses reclassified from accumulated other comprehensive income (loss)

Net current period other comprehensive income (loss)

Losses (gains) reclassified from accumulated other comprehensive income (loss)

Net current period other comprehensive loss

Ending balance

8 unchanged sentences

(in thousands, except per share data)

ACCUMULATED OTHER COMPREHENSIVE LOSS (Cont.)

The following table summarizes the reclassification out of "Accumulated other comprehensive loss", net of taxes:

The following table summarizes the reclassifications from "Accumulated other comprehensive loss" into the statement of income (loss):

Details about Accumulated Other

1 unchanged sentence

Three Months Ended

September 30,

Nine Months Ended

September 30,

Affected Line Item in the

Statement of Income

Unrealized gains (losses) on available-for-sale marketable securities

Available-for-sale marketable securities

Financial income (expense), net

Total, net of income taxes

Unrealized gains (losses) on cash flow hedges, net

Tax benefits (income taxes)

Total, net of tax benefits (income taxes)

Cash flow hedges

Cost of revenues

3 unchanged sentences

Total, before income taxes

Total, net of income taxes

Tax benefits (income taxes)

Total, net of tax benefits (income taxes)

Total reclassifications for the period

OTHER OPERATING EXPENSE (INCOME)

The following table presents the expenses ( income ) recorded in the three and nine months ended September 30, 2023, and 2022:

Three Months Ended

September 30,

Nine Months Ended

September 30,

Impairment of goodwill and intangible assets

Sale of assets

The following table presents the expenses (income) recorded in the three ended March 31, 2024, and 2023:

Three Months Ended March 31,

Impairment of property, plant and equipment

Loss (gain) from sales and disposal of assets

Legal settlements and contingencies

Total other operating expense (income), net

2 unchanged sentences

(in thousands, except per share data)

The effective tax rate for the three months ended September 30, 2023 , and 2022 was ( 143.6 )% and 58.0 % , respectively.

The change in effective tax rate in the three months ended September 30, 2023 compared to the corresponding period in 2022 is mainly due to the IRC Section 174 R&D capitalization, and other expenses not recognized for GILTI purposes, which did not decrease in line with the decrease in our taxable income, as well as unfavorable impact of losses in foreign subsidiaries where we do not anticipate a future tax benefit.

The effective tax rate for the nine months ended September 30, 2023 and 2022 was 33.6 % and 42.1 % , respectively.

The lower tax rate in the nine months ended September 30, 2023 compared to the corresponding period in 2022 is mainly due to the fact that the Company's income before tax, most of which is subject to tax rates lower than the US statutory rate, increased.

Conversely, the IRC Section 174 R&D capitalization, and other expenses not recognized for GILTI purposes, did not increase in the same proportion.

As of September 30, 2023 , and December 31, 2022 , unrecognized tax benefits were $ 3,155 and $ 2,756 , respectively.

RESTRUCTURING AND OTHER EXIT ACTIVITIES

On January 21, 2024, the Company announced the adoption of a restructuring plan in response to challenging industry conditions (the “Restructuring Plan”).

Under the Restructuring Plan, the Company reduced its headcount by approximately 16% over the first half of 2024 through an involuntary workforce reduction plan.

The adoption of the Restructuring Plan follows the Company’s previous measures taken to align with current market conditions, including termination of manufacturing in Mexico, reduction of manufacturing capacity in China, and discontinuation of the Company’s light commercial vehicle e-mobility activity.

Restructuring and other exit charges for the three months ended March 31, 2024 by segment and type of cost were as follows:

Employee termination costs

Contract termination and other

Employee termination costs

Inventory write-down

Cost of revenues

Research and development

Sales and marketing

General and administrative

The Company’s liability balance for the restructuring and other exit charges is as follows:

Employee termination costs

Inventory write-down 1

Contract termination and other

Balance as of December 31, 2023

Cash payments

Non-cash utilization and other

Balance as of March 31, 2024

1 Inventory write-down is included under Inventories, net on the balance sheet.

The total amount expected to be incurred for restructuring and other exit charges, which primarily consists of contract terminations related to the Solar segment, is $ 5,497 .

SOLAREDGE TECHNOLOGIES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands, except per share data)

For the three months ended March 31, 2024, the Company reported tax benefits and its effective tax rate was 13.1 %, compared to the three months ended March 31, 2023, where the Company reported income taxes and its effective tax rate was 17.5 %.

The change in effective tax rate in the three months ended March 31, 2024 compared to the corresponding period in 2023 is primarily attributable to the fact that the pre-tax loss for the quarter was in jurisdictions where the Company is either subject to a lower tax rate or where we do not anticipate a future tax benefit.

As of March 31, 2024, and December 31, 2023, unrecognized tax benefits were $ 18,496 and $ 15,908 , respectively.

If recognized, such benefits would favorably affect the Company’s effective tax rate.

The Company accrues interest and penalties related to unrecognized tax benefits in its provision for income taxes.

The total amount of penalties and interest were immaterial as of September 30, 2023 , and December 31, 2022 .

The total amount of penalties and interest as of March 31, 2024 and December 31, 2023 were $ 4,570 and $ 2,927 , respectively.

In August 2022, the U.S.

1 unchanged sentence

As part of such incentives, the IRA will, among other things, extend the investment tax credit (“ITC”) through 2034 and is therefore expected to increase the demand for solar products.

The IRA is expected to further incentivize residential and commercial solar customers and developers due to the inclusion of a tax credit for qualifying energy projects of up to 30%.

Since these regulations are new and their implementation is still pending administrative guidance from the Internal Revenue Service and U.S.

Treasury Department, the Company will be examining the benefits that may be available to it, such as the availability of tax credits for domestic manufacturers, in the coming months.

During the third quarter, the Company began manufacturing inverters in the U.S.

The IRA is expected to further incentivize residential and commercial solar customers and developers due to the inclusion of significant tax credits for qualifying energy projects, and Advanced Manufacturing tax credits ("AMPTC") for U.S.

manufacturing of eligible components (under IRC §45X), including PV inverters and DC-optimized systems.The Company has been manufacturing eligible products in the U.S.

since the fourth quarter of 2023.

In the three months ended March 31, 2024, the Company manufactured and sold products that entitle it to $ 14,960 of AMPTCs, which were recorded as a reduction in of cost of revenues.

In the three months ended March 31, 2023, the Company did not record AMPTCs.

As of March 31, 2024 and December 31, 2023, benefits recognized from AMPTCs of $ 20,980 and $ 6,020 , respectively, were recorded as a tax prepayment within prepayment and other current assets.

The implementation of the new incentive rules is complex and further guidance by the U.S.

Treasury on these rules is still pending.

SOLAREDGE TECHNOLOGIES INC.

3 unchanged sentences

The following table presents the computation of basic and diluted earnings (loss) per share (“EPS”):

Three Months Ended

September 30,

Nine Months Ended

September 30,

Three Months Ended March 31,

Net income (loss)

Shares used in computing net EPS of common stock, basic

Shares used in computing net earnings (loss) per share of common stock, basic

Net income (loss) attributable to common stock, basic

1 unchanged sentence

Net income (loss) attributable to common stock, diluted

Shares used in computing net EPS of common stock, basic

Shares used in computing net earnings (loss) per share of common stock, basic

Notes due 2025

Effect of stock-based awards

Shares used in computing net EPS of common stock, diluted

Earnings (loss) per share:

Shares excluded from the calculation of net diluted due to their anti-dilutive effect

Shares used in computing net earnings (loss) per share of common stock, diluted

Earnings per share:

The following outstanding shares of common stock equivalents were excluded from the calculation due to their antidilutive nature:

Three Months Ended March 31,

Stock-based awards

Notes due 2025

Total shares excluded

SOLAREDGE TECHNOLOGIES INC.

2 unchanged sentences

SEGMENT INFORMATION

Following the discontinuation of Critical Power in June 2022, the Company operates in five different operating segments:

Solar, Energy Storage, e-Mobility, Automation Machines, and the newly formed Consulting segment.

Following the discontinuation of its e-Mobility LCV activity, the Company operates in three different operating segments:

Solar, Energy Storage and Automation Machines.

The Company’s Chief Executive Officer, who is the chief operating decision maker (“CODM”), makes resource allocation decisions and assesses performance based on financial information presented on a consolidated basis, accompanied by disaggregated information about revenues and contributed profit by the operating segments.

The Company does not allocate to its operating segments revenue recognized due to advance payments received for performance obligations that extend for a period greater than one year, related to ASC 606, “Revenue from Contracts with Customers”.

Segment profit is comprised of gross profit for the segment less operating expenses that do not include amortization of purchased intangible assets, impairments of goodwill and intangible assets, stock based compensation expenses, and certain other items.

The Company does not allocate to its operating segments revenue recognized due to advance payments received for performance obligations that extend for a period greater than one year (“financing component”), related to Accounting Standard Codification 606, “Revenue from Contracts with Customers” (ASC 606).

Segment profit (loss) is comprised of gross profit (loss) for the segment less operating expenses that do not include amortization and impairment of purchased intangible assets, stock based compensation expenses, restructuring charges, discontinued activity charges and certain other items.

The Company manages its assets on a group basis, not by segments, as many of its assets are shared or co-mingled.

The Company’s CODM does not regularly review asset information by segments and, therefore, the Company does not report asset information by segment.

The Company identified one operating segment as reportable – the Solar segment.

The Company identified two operating segments as reportable – the Solar segment and the Energy Storage segment.

The other operating segments are insignificant individually and therefore their results are presented together under “All other”.

The Solar segment includes the design, development, manufacturing, and sales of an intelligent inverter solution designed to maximize power generation at the individual PV module level and a residential storage solution, compatible with the Company’s Energy Hub inverter, intended to store and supply power for back-up and to maximize self-consumption.

The Solar segment solution consists mainly of the Company’s power optimizers, inverters, batteries, and cloud‑based monitoring platform.

The “All other” category includes the design, development, manufacturing, and sales of energy storage products, e-Mobility products, automated machines, and consulting services.

The Energy Storage segment includes the design, development, manufacturing, and sales of high-energy, high-power, lithium-ion cells and racks and containerized battery systems for C&I and Utility markets.

The Energy Storage segment provides purpose-built components and solutions, hardware and software, as well as pre and post sales engineering support to design, build, and manage battery and system solutions according to the customer’s use cases and mission profiles.

The “All other” category includes automated machines and e-Mobility (in prior periods).

SOLAREDGE TECHNOLOGIES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands, except per share data)

The following tables present information on reportable segments profit (loss) for the period presented:

Three Months Ended

September 30, 2023

Nine Months Ended

September 30, 2023

Three Months Ended March 31, 2024

Energy Storage

Cost of revenues

4 unchanged sentences

Segments profit (loss)

SOLAREDGE TECHNOLOGIES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands, except per share data)

SEGMENT INFORMATION (Cont.)

Three Months Ended

September 30, 2022

Nine Months Ended

September 30, 2022

Three Months Ended March 31, 2023

Energy Storage

Cost of revenues

Gross profit (loss)

Research and development

3 unchanged sentences

The following table presents information on reportable segments reconciliation to consolidated revenues for the periods presented:

Three Months Ended

September 30,

Nine Months Ended

September 30,

Solar revenues

All other revenues

Revenues from finance component

Three Months Ended March 31,

Solar segment revenues

Energy Storage segment revenues

All other segment revenues

Revenues from financing component

Consolidated revenues

The following table presents information on reportable segments reconciliation to consolidated operating income for the periods presented:

Three Months Ended

September 30,

Nine Months Ended

September 30,

Solar segment profit

All other segment loss

Segments operating profit

SOLAREDGE TECHNOLOGIES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands, except per share data)

The following table presents information on reportable segments reconciliation to consolidated operating income (loss) for the periods presented:

Three Months Ended March 31,

Solar segment profit (loss)

Energy Storage segment (loss)

All other segment profit (loss)

Segments operating profit (loss)

Amounts not allocated to segments:

Stock based compensation expenses

Amortization related to business combinations

Impairment of goodwill and intangible assets

Disposal of assets related to Critical Power

Sale of Critical Power assets

Other unallocated expenses (income), net

Consolidated operating income (expense)

Restructuring and other exit activities

Impairment of long-lived assets

Amortization and depreciation of acquired assets

Other unallocated expenses

Consolidated operating income (loss)

Financial income (expense), net

Other loss, net

Income (loss) before income taxes

SUBSEQUENT EVENTS

On November 1, 2023, the Company announced the approval by the Board of Directors of a share repurchase program which authorizes the repurchase of up to $ 300 million of the Company’s common stock.

In October 2023, the Company decided to discontinue its light commercial e-Mobility ("LCV") activity related to the supply of products to its sole customer.

On November 3, 2023, Daphne Shen, a purported stockholder of the Company, filed a proposed class action complaint for violation of federal securities laws, individually and putatively on behalf of all others similarly situated, in the U.S District Court of the Southern District of New York against the Company, the Company’s CEO and the Company’s CFO.

The complaint alleges that the Company violated various securities laws and seeks class certification, damages, interest, attorneys’ fees, and other relief.

Due to the early stage of this proceeding, we cannot reasonably estimate the potential range of loss, if any.

The Company disputes the allegations of wrongdoing and intends to vigorously defend against them.

On April 1, 2024, the Company completed the acquisition of the remaining outstanding shares of Wevo for approximately $ 13,300 in cash.

Wevo is a software startup specializing in EV char ging optim ization and management for sites with large quantities of EV chargers such as apartment buildings, workplace car parks and public charging locations.

On April 10, 2024, the Company closed an agreement to acquire minority shares in Ampeers Energy GmbH ("Ampeers") from existing shareholders as well as through a share capital increase.

Ampeers, a German-based company, is involved in the programming, operation and marketing of an information and communications technology platform .

On May 7, 2024, the Israeli tax authorities issued tax orders for tax years 2017-2018 for the Company’s Israeli subsidiary, challenging the subsidiary's tax positions on several issues.

The Israeli subsidiary intends to protest the orders before the Central District Court in Israel.

The Company believes it has adequately provided for all exposures related to taxes payable by the group;

however, adverse results could have a material impact on the Company’s financial statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements