What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-08 compared with 2024-11-07 · 221 added, 265 removed, 143 unchanged (77% of the section changed)

14 unchanged sentences

• our ability to forecast demand for our products accurately and to match production to such demand as well as our customers' ability to forecast demand based on inventory levels;

• changes in tax laws, tax treaties, and regulations or the interpretation of them, including the Inflation Reduction Act;

• changes in the U.S.

and global trade environments, including the imposition and/or increase of import tariffs or other restrictive trade measures;

• ability to successfully operate our global operations with a reduced work force;

• macroeconomic conditions in our domestic and international markets, as well as inflation concerns, rising interest rates and recessionary concerns;

• changes, elimination or expiration of government subsidies and economic incentives for on-grid solar energy applications;

• the retail price of electricity derived from the utility grid or alternative energy sources;

4 unchanged sentences

• product quality or performance problems in our products;

• loss of key executives, and our ability to retain key personnel and attract additional qualified personnel

• shortages, delays, price changes, or cessation of operations or production affecting our suppliers of key components;

1 unchanged sentence

• our dependence upon a small number of outside contract manufacturers and limited or single source suppliers;

• changes to net metering policies or the reduction, elimination or expiration of government subsidies and economic incentives for on-grid solar energy applications;

• capacity constraints, delivery schedules, manufacturing yields, and costs of our contract manufacturers and availability of components;

• disruption in our global supply chain and rising prices of oil and raw materials as a result of the conflict between Russia and Ukraine;

• performance of distributors and large installers in selling our products;

• consolidation in the solar industry among our customers and distributors;

• our ability to manage effectively the growth of our organization and expansion into new markets;

• our ability to effectively manage changes in our organization and expansion into new markets;

• our ability to recognize expected benefits from restructuring plans;

• any unauthorized access to, disclosure, or theft of personal information or unauthorized access to our network or other similar cyber incidents;

• our ability to implement our new ERP system;

SOLAREDGE TECHNOLOGIES INC.

| 2025 Form 10-Q | 3

• our ability to integrate acquired businesses;

2 unchanged sentences

• fluctuations in global currency exchange rates;

• the impact of evolving legal and regulatory requirements, including emerging environmental, social and governance requirements;

• the impact of evolving legal and regulatory requirements, including corporate social responsibility and sustainability, requirements;

• existing and future responses to and effects of pandemics, epidemics or other health crises;

• changes to net metering policies or the reduction, elimination or expiration of government subsidies and economic incentives for on-grid solar energy applications;

• federal, state, and local regulations governing the electric utility industry with respect to solar energy;

• changes in tax laws, tax treaties, and regulations or the interpretation of them, including the Inflation Reduction Act;

• changes in the U.S.

trade environment, including the imposition of import tariffs;

• business practices and regulatory compliance of our raw material suppliers;

2 unchanged sentences

• our customers’ financial stability, creditworthiness, and debt leverage ratio;

• loss of key executives, and our ability to retain key personnel and attract additional qualified personnel;

• our ability to effectively design, launch, market, and sell new generations of our products and services;

8 unchanged sentences

Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

We develop, manufacture and sell products in a solar segment that addresses a broad range of energy market segments through our diversified product offering, including residential, commercial and large scale photovoltaic or PV, energy storage and backup solutions, electric vehicle or EV charging capabilities, home energy management, grid services and virtual power plants, as well as products in our non-solar businesses including lithium-ion cells, batteries and energy storage systems, which are part of our Energy Storage Segment as well as automation machines ("Automation Machines") and in prior years, we also had product offerings for the e-mobility market.

In prior years, we also had product offerings for the e-mobility market, automation machines (“Automation Machines”) and energy storage.

In October 2023, we decided to discontinue our light commercial vehicle (“LCV”), e-Mobility activity.

The remaining e-mobility activity, which includes PV applications, has been included under the solar segment starting January 1, 2024.

The Company identified two reportable segments:

the Solar segment and Energy Storage segment.

The Solar segment includes the design, development, manufacturing, and sales of its DC optimized inverter solutions designed to maximize power generation at the PV module level and batteries for PV applications.

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

The Energy Storage segment includes the design, development, manufacturing, and sales of high-energy, high-power, lithium-ion cells and BESS solutions for the 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 the design, development, manufacturing and sales of e-Mobility products (in prior periods) and automated machines.

In the third quarter of 2020, we began commercial shipments from our manufacturing facility in the North of Israel, “Sella 1”.

The proximity of Sella 1 to our R&D team and labs enables us to accelerate new product development cycles, as well as define equipment and manufacturing processes of newly developed products which can then be adopted by our contract manufacturers worldwide.

In May 2022, we opened “Sella 2”, our own manufacturing facility for Li-Ion cells, in Korea.

Sella 2 currently has a 2GWh capacity.

In light of the Inflation Reduction Act legislation in the United States, which incentivizes the local manufacturing of renewable energy products by providing benefits to installers for the purchase and installation of product with domestic content, as well as by incentivizing local manufacturing of our products, we began manufacturing inverters in Texas and reached full capacity there during the third quarter of 2024.

We are also currently expanding additional manufacturing capabilities in G, for optimizers and inverters.

With the manufacturing capabilities of these new sites and due to a decrease in demand for our products, we have reduced capacity in all of our manufacturing sites outside of the U.S.

As of September 30, 2024, we shipped approximately 130.0 million power optimizers, 5.7 million inverters and 303.3 thousand batteries for PV applications.

In October 2024, the Company completed the sale of Automation Machines.

Additionally, in November 2024, the Company announced the closure of its Energy Storage Division, as part of its focus on its core activities.

Following the sale of Automation Machines and the discontinuation of the Energy Storage activity in 2024, the Company now operates as one operating segment, the Solar segment, that constitutes consolidated results.

In light of the Inflation Reduction Act legislation in the United States, which incentivizes the local manufacturing of renewable energy products by providing benefits to installers for the purchase and installation of product with domestic content, as well as by incentivizing local manufacturing of our products, we manufacture single phase inverters in Texas and optimizers in Florida.

We are also currently increasing our manufacturing of three-phase inverters in Florida and batteries in Utah.

With the ramp-up of new sites and as part of an effort to centralize and improve operational activity, we have discontinued manufacturing in China, Mexico, and Hungary.

We continue to maintain manufacturing capabilities in Vietnam with a third-party manufacturer.

As of March 31, 2025, we shipped approximately 134.3 million power optimizers, 5.9 million inverters and 346.9 thousand batteries for PV applications.

Over 4.3 million installations, many of which may include multiple inverters, are currently connected to, and monitored through, our cloud-based monitoring platform.

As of September 30, 2024, we shipped approximately 55.3 GW of our DC optimized inverter systems and approximately 2.1 GWh of our batteries for PV applications.

Our revenues for the three months ended September 30, 2024, and 2023 were $260.9 million and $725.3 million, respectively,.

Gross loss was 269.2% for the three months ended September 30, 2024, compared to our gross margin of 19.7% for the three months ended September 30, 2023.

Net loss for the three months ended September 30, 2024, and 2023 was $1,205.3 million and $61.2 million, respectively.

Our revenues for the nine months ended September 30, 2024, and 2023 were $730.7 million and $2,660.5 million, respectively.

Gross loss was 101.2% for the nine months ended September 30, 2024, compared to our gross margin of 28.6% for the nine months ended September 30, 2023.

Net loss for the nine months ended September 30, 2024 was $1,493.5 million compared to our net income in the amount of $196.7 million, for the nine months ended September 30, 2023.

As of March 31, 2025, we shipped approximately 57.4 GW of our DC optimized inverter systems and approximately 2.4 GWh of our batteries for PV applications.

Our revenues for the three months ended March 31, 2025 and March 31, 2024 were $219.5 million and $204.4 million, respectively.

Gross profit as a percentage of revenue was 8.0%, for the three months ended March 31, 2025, compared to gross loss as a percentage of revenue of 12.8%, for the three months ended March 31, 2024.

Net loss was $98.5 million and $157.3 million for the three months ended March 31, 2025, and March 31, 2024, respectively.

SOLAREDGE TECHNOLOGIES INC.

| 2025 Form 10-Q | 4

Global Circumstances Influencing our Business and Operations

Demand for Products

We have seen a slowdown in demand for our products in our Solar segment from our direct customers since the second part of the third quarter of 2023.

This was a result of slowed market demand in the third quarter of 2023, as distributors began to take actions to reduce inventory levels.

In particular, beginning in the second part of the third quarter of 2023, we experienced substantial unexpected cancellations and push outs of existing backlog from our European distributors.

We attribute these cancellations and push outs to high inventory in the channels and slower than expected installation rates both in the United States and Europe.

This trend continued in the subsequent quarters.

Additionally, the Company anticipates a continued lower level of revenues in the fourth quarter of 2024 when compared to the same quarter last year, as the inventory destocking process continues.

We have seen a slowdown in demand for our products from our direct customers since the second part of the third quarter of 2023, throughout 2024 and into 2025.

This was a result of slowed market demand beginning in the third quarter of 2023 and persisting throughout 2024 and into 2025, as distributors began to take actions to reduce inventory levels.

In particular, beginning in the second part of the third quarter of 2023, we experienced substantial unexpected cancellations and push outs of existing backlog, mostly from our European distributors.

We attribute these cancellations and pushouts to high inventory in the channels and slower than expected installation rates both in the United States and to a greater extent in Europe.

The slowdown continued in the subsequent quarters of 2023, throughout 2024 and the first quarter of 2025.

Trade Tariff Uncertainties

The current trade situation is creating uncertainty about what the impacts new or existing tariffs, trade restrictions or retaliatory actions may have on us, the solar industry, our partners, and our customers.

In the last two and a half years, we have relocated our contract manufacturing to the United States.

However, certain critical subcomponents for our products are still sourced from outside the United States.

If not resolved, the escalation in trade tensions or the implementation of broader tariffs, trade restrictions or other retaliatory measures on our products or components originating from countries outside of the United States, or from the United States, could adversely impact our ability to source necessary components, manufacture products at competitive cost, or sell our products at prices customers are willing to pay.

Certain of the components used in our products are being imported to the United States from China, which may be subject to significantly increased tariffs.

In light of the aforementioned, we are exploring alternative suppliers outside of China, however, there is no assurance that we will be successful in identifying suitable alternatives, or that such alternatives, if identified, will not result in increased costs or reduced operational efficiency.

If the price of solar power systems increases, as well as the cost of manufacturing our products in the United States, the use of solar power systems could become less economically feasible and could further reduce our gross margins or reduce the demand of solar power systems manufactured and sold, which in turn may decrease demand for our products.

Additionally, existing or future tariffs may negatively affect key partners, suppliers and manufacturers.

Such outcomes could adversely affect the amount or timing of our revenue, results of operations or cash flows, and continuing uncertainty could cause sales volatility, price fluctuations or supply shortages or cause our customers to advance or delay their purchase of our products.

Any such developments could materially and adversely affect our business operations, results of operations and cash flows.

SOLAREDGE TECHNOLOGIES INC.

| 2025 Form 10-Q | 5

Disruptions Due to the War in Israel

Due to the war that began on October 7, 2023, some of our employees in Israel were called to active reserve duty and additional employees may be called in the future, if needed.

In the three months ended September 30, approximately 10% of our employees in Israel have been called to active reserve duty for varying periods.

While our offices and facilities are open worldwide, including in Israel, and, to date, we have not had disruptions to our ability to manufacture and deliver products and services to customers, a prolonged war or an escalation of the current condition in Israel could materially adversely affect our business, financial condition, and results of operations.

Due to the ongoing and evolving nature, and the extent of these events, the adverse effect on our business operations is still unknown.

In the three months ended March 31, 2025 approximately 5% of our employees in Israel have been called to active reserve duty for varying periods.

While our offices and facilities are open worldwide, including in Israel, and, to date, we have not had disruptions to our ability to manufacture and deliver products and services to customers.

Although the situation is somewhat stabilized due to ceasefires between Israel and Hezbollah, an escalation of the current conflicts in Israel could materially adversely affect our business, financial condition, and results of operations.

Due to the ongoing and evolving nature of the conflict in Israel, and the extent of these events, the adverse effect on our business operations is still unknown.

The majority of our key employees and officers are residents of Israel.

If any of our facilities in Israel were to be damaged, destroyed or otherwise rendered unable to operate, whether due to war, acts of hostility, earthquakes, fire, floods, hurricanes, storms, tornadoes, other natural disasters, employee malfeasance, terrorist acts, power outages or otherwise, or if performance of our research and development is disrupted for any other reason, such an event could delay commercialization of our products, and if we choose to manufacture all or any part of them internally, jeopardize our ability to manufacture our products as promptly as our prospective customers will likely expect, or possibly at all.

If any of our facilities in Israel were to be damaged, destroyed or otherwise rendered unable to operate, whether due to war, acts of hostility, earthquakes, fire, floods, storms, other natural disasters, employee malfeasance, terrorist acts, power outages or otherwise, or if performance of our research and development is disrupted for any other reason, such an event could delay commercialization of our products, and if we choose to manufacture all or any part of them internally, jeopardize our ability to manufacture our products as promptly as our prospective customers will likely expect, or possibly at all.

If we experience delays in achieving our development objectives within a timeframe that meets our prospective customers’ expectations, our business, prospects, financial results and reputation could be harmed.

Impact of Ukraine’s Conflict on the Energy Landscape

The conflict between Ukraine and Russia, which started in early 2022, and the sanctions and other measures imposed in response to this conflict, have increased the level of economic and political uncertainty.

While we do not have any meaningful business in Russia or Ukraine and we do not have physical assets in these countries, this conflict has, and is likely to continue to have, a multidimensional impact on the global economy, the energy landscape in general and the global supply chain.

In 2022, rising global interest in becoming less dependent on gas and oil led to higher demand for our products.

The conflict adversely affected the prices of raw materials arriving from Eastern Asia and resulted in an increase in gas and oil prices.

Furthermore, various shipment routes were adversely impacted by the conflict resulting in increased shipment lead times and shipping costs for our products.

While the impact of this conflict continued to decrease in 2024, a change or escalation of this ongoing conflict could increase the impacts from the circumstances described above and may lead to an adverse effect on our business and results of operations.

Inflation Reduction Act

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The IRA also further incentivizes residential and commercial solar customers and developers through the inclusion of a tax credit for qualifying energy projects of up to 30%.

Section 45X of the IRA offers advanced manufacturing production tax credits ("AMPTC") that incentivize the production of eligible components within the U.S.

Section 45X of the IRA offers AMPTCs that incentivize the production of eligible components within the U.S.

To that end, we established manufacturing capabilities in the U.S.

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On October 24, 2024, final regulations concerning the application of IRC §45X were published.

The regulations contain detailed rules concerning the eligibility, qualifying and accounting for AMPTCs.

Of particular relevance to the Company are the rules concerning the qualification and measurement of AMPTCs to Residential Inverters, Commercial Inverters and DC-Optimized Inverter Systems, that are included in the definition of Microinverters.

We continue to monitor the benefits that may be available to us, such as the availability of tax credits for domestic manufacturers and the domestic content tax credit bonus that provides incentives for project owners.

The regulations contain detailed rules concerning eligibility, qualifying and accounting for AMPTCs.

Of particular relevance to the Company are the tax credits that we generate as a result of rules concerning the qualification and measurement of AMPTCs to Residential Inverters, Commercial Inverters and DC-Optimized Inverter Systems.

In 2024 and the first quarter of 2025, we sold a significant part of the AMPTCs that we generated from our U.S.

production of eligible components.

In January 2025, the new U.S.

administration issued executive orders aimed at pausing grants and other government funding that have not already been dispersed to under the IRA, creating uncertainty regarding the ability to secure government awards and grants in the future.

This potential loss of financial support could adversely impact our business, and potentially the overall financial performance of the Company.

As of March 31, 2025 and December 31, 2024 benefits from AMPTCs of $82,946 and $80,516, respectively, were recorded as a tax prepayment within prepaid expenses and other current assets.

SOLAREDGE TECHNOLOGIES INC.

| 2025 Form 10-Q | 6

Key Operating Metrics

In managing our business and assessing financial performance, we supplement the information provided by the financial statements with other operating metrics.

In managing our business and assessing financial performance, we supplement the information provided in our financial statements with other operating metrics.

These operating metrics are utilized by our management to evaluate our business, measure our performance, identify trends affecting our business and formulate projections.

We use metrics relating to shipments of inverters, power optimizers and megawatts to evaluate our sales performance and to track market acceptance of our products.

We provide the “megawatts shipped” and “megawatts hour shipped” metrics, which are calculated based on inverter or battery nameplate capacity shipped, respectively, to show adoption of our system on a nameplate capacity basis.

We provide the “megawatts shipped” and “megawatt hours shipped” metrics, which are calculated based on inverter or battery nameplate capacity shipped, respectively, to show adoption of our system on a nameplate capacity basis.

Nameplate capacity shipped is the maximum rated power output capacity of an inverter or battery, and corresponds to our financial results in that higher total nameplate capacities shipped are generally associated with higher total revenues.

However, revenues may increase in a non-correlated manner to the “megawatt shipped” metric since other products, such as power optimizers, are not accounted for in this metric.

Three Months Ended September 30,

Nine Months Ended September 30,

Three months ended March 31,

Inverters shipped

1 unchanged sentence

Megawatts shipped 1

Megawatts hour shipped - batteries for PV applications

Megawatt hours shipped - batteries for PV applications

1 Excluding batteries for PV applications, based on the aggregate nameplate capacity of inverters shipped during the applicable period.

Nameplate capacity is the maximum rated power output capacity of an inverter as specified by the manufacturer.

SOLAREDGE TECHNOLOGIES INC.

| 2025 Form 10-Q | 7

Results of Operations

The results of operations presented below should be reviewed in conjunction with the condensed consolidated financial statements and related notes included elsewhere in this report.

The following table sets forth selected consolidated statements of income (loss) data for each of the periods indicated.

Three Months Ended

September 30,

Nine Months Ended

September 30,

The following table sets forth selected consolidated statements of loss data for each of the periods indicated.

Three Months Ended March 31,

(In thousands)

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Total operating expenses

Operating income (loss)

Operating loss

Financial income (expense), net

Other income (loss), net

Income (loss) before income taxes

Other income, net

Loss before income taxes

Tax benefits (income taxes)

Net loss from equity method investments

Net income (loss)

Comparison of three and nine months ended September 30, 2024, and the three and nine months ended September 30, 2023

Three months ended September 30, 2024 to 2023

Nine months ended September 30, 2024 to 2023

Comparison of three months ended March 31, 2025, and the three months ended March 31, 2024

Three Months Ended March 31,

(In thousands)

Revenues decreased by $464.4 million, or 64.0%, in the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, primarily due to (i) a decrease of $416.5 million related to a decrease in the number of inverters and power optimizers sold;

(ii) a decrease of $22.1 million in revenues generated in 2023 from e-mobility components, related to the discontinuation of the Company’s LCV e-Mobility activity;

and (iii) a decrease of $14.6 million related to less ancillary solar products sold.

The overall decrease in revenues was due to a decline in demand that began in the second part of the third quarter of 2023.

This decline was the result of high inventory in the channels and slower than expected installation rates, leading to substantial unexpected cancellations and push outs of existing backlog, from our distributors.

Revenues from outside of the U.S.

comprised 50.7% of our revenues in the three months ended September 30, 2024 as compared to 73.0% in the three months ended September 30, 2023.

The number of power optimizers recognized as revenues decreased by approximately 1.4 million units, or 43.8%, from approximately 3.3 million units, in the three months ended September 30, 2023, to approximately 1.8 million units in the three months ended September 30, 2024.

The number of inverters recognized as revenues decreased by approximately 203.9 thousand units, or 76.5%, from approximately 266.6 thousand units in the three months ended September 30, 2023 to approximately 62.7 thousand units in the three months ended September 30, 2024.

The megawatts hour of batteries for PV applications recognized as revenues increased by approximately 55.2 megawatts hour, or 35.9% from approximately 153.7 in the three months ended September 30, 2023 to approximately 208.9 megawatts hour in the three months ended September 30, 2024, as a result of lower demand.

Our blended ASP per watt for solar products excluding batteries for PV applications is calculated by dividing the sales of solar products, excluding the sales of batteries for PV applications, by the name plate capacity of inverters shipped.

Our blended ASP per watt for solar products shipped excluding batteries for PV applications increased by $0.039, or 24.0%, in the three months ended September 30, 2024, as compared to the three months ended September 30, 2023.

The increase in blended ASP per watt is mainly attributed to a higher number of power optimizers and other solar products shipped compared to the number of inverters shipped.

This increase in blended ASP per watt was partially offset by an increase in the sale of commercial products that are characterized by lower ASP per watt, out of our total solar product mix.

Our blended ASP per watt/hour for batteries for PV applications is calculated by dividing batteries for PV applications sales, by the nameplate capacity of batteries for PV applications shipped.

Our blended ASP per watt/hour for batteries for PV applications decreased by $0.158, or 33.3%, in the three months ended September 30, 2024, as compared to the three months ended September 30, 2023.

The decrease in blended ASP per watt/hour is mainly attributed to a price reduction of our batteries for PV applications.

Revenues decreased by $1,929.8 million, or 72.5%, in the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, primarily due to (i) a decrease of $1,640.5 million related to a decrease in the number of inverters and power optimizers sold;

(ii) a decrease of $167.7 million related to the lower number of batteries for PV applications sold, primarily in Europe;

(iii) a decrease of $65.9 million in revenues generated from e-mobility components, related to the discontinuation of the Company’s LCV e-Mobility activity;

and (iv) a decrease of $60.0 million related to less ancillary solar products sold.

The overall decrease in revenues was due to the decline in demand that began in the second part of the third quarter of 2023.

Revenues increased by $15.1 million, or 7.4%, in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to an increase of $36.4 million related to an increase in the number of power optimizers sold;

and an increase of $3.8 million related to an increase in the number of batteries for PV applications sold;

these were partially offset by (i) a decrease of $14.1 million related to less ancillary solar products sold;

(ii) a decrease of $3.7 million in revenue from inverters sold, related to a price reduction, mainly in Europe;

(iii) a decrease of $3.5 million in revenues due to the discontinuation of our Energy Storage Business;

and (iv) a decrease of $3.4 million in revenues from automation machines, which was sold in October 2024.

Revenues from outside of the U.S.

comprised 60.2% of our revenues in the nine months ended September 30, 2024 as compared to 75.7% in the nine months ended September 30, 2023.

The number of power optimizers recognized as revenues decreased by approximately 10.4 million units, or 68.0%, from approximately 15.3 million units, in the nine months ended September 30, 2023, to approximately 4.9 million units in the nine months ended September 30, 2024.

The number of inverters recognized as revenues decreased by approximately 742.0 thousand units, or 79.6%, from approximately 932.4 thousand units in the nine months ended September 30, 2023 to approximately 190.4 thousand units in the nine months ended September 30, 2024.

The megawatts hour of batteries for PV applications recognized as revenues decreased by approximately 215.2 megawatts hour, or 33.4% from approximately 643.6 megawatts hour in the nine months ended September 30, 2023 to approximately 428.4 megawatts hour in the nine months ended September 30, 2024 as a result of lower demand.

Our blended ASP per watt for solar products shipped excluding batteries for PV applications increased by $0.005, or 2.9%, in the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.

The increase in blended ASP per watt is mainly attributed to a higher number of power optimizers and other solar products shipped compared to the number of inverters shipped.

This increase in blended ASP per watt was partially offset by price reduction as well as an increase in the sale of commercial products that are characterized by lower ASP per watt, out of our total solar product mix.

Our blended ASP per watt/hour for batteries for PV applications decreased by $0.126, or 26.3%, in the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023.

The decrease in blended ASP per watt/hour is mainly attributed to price reduction of our batteries for PV applications.

comprised 39.8% of our revenues in the three months ended March 31, 2025, as compared to 68.1% in the three months ended March 31, 2024.

SOLAREDGE TECHNOLOGIES INC.

| 2025 Form 10-Q | 8

The number of power optimizers recognized as revenues increased by approximately 1.0 million units, or 98.2%, from approximately 1.1 million units in the three months ended March 31, 2024 to approximately 2.1 million units in the three months ended March 31, 2025.

The number of inverters recognized as revenues increased by approximately 10 thousand units, or 15.5%, from approximately 62.3 thousand units in the three months ended March 31, 2024 to approximately 72.0 thousand units in the three months ended March 31, 2025.

The megawatt hours of batteries for PV applications recognized as revenues increased by approximately 67.6 megawatt hours, or 71.9% from approximately 94.0 in the three months ended March 31, 2024 to approximately 162.0 megawatt hours in the three months ended March 31, 2025.

Our blended Average Selling Price (“ASP”) per watt for solar products excluding batteries for PV applications is calculated by dividing the solar revenues, excluding revenues from the sale of batteries for PV applications, by the nameplate capacity of inverters shipped.

Our blended ASP per watt for solar products increased by $0.001, or 0.4%, in the three months ended March 31, 2025, as compared to the three months ended March 31, 2024.

This increase in blended ASP per watt is mainly attributed to a higher number of power optimizers shipped, compared to the number of inverters shipped;

as well as higher ASP due to increase in U.S.

sales compared to sales in Europe, which is characterized by a higher demand for residential products, which have a higher ASP per watt out of our total solar product mix.

This increase in blended ASP per watt was partially offset by price reductions, mainly in Europe.

Our blended ASP per watt/hour for batteries for PV applications is calculated by dividing batteries for PV applications revenues, by the nameplate capacity of batteries for PV applications shipped.

Our blended ASP per watt/hour for batteries for PV applications decreased by $0.116, or 30.2%, in the three months ended March 31, 2025, as compared to the three months ended March 31, 2024.

The decrease in blended ASP per watt/hour is mainly attributed to price reduction of our batteries for PV applications as well as an increase in the sale of our three-phase battery that is sold at a lower ASP per watt/hour.

Cost of Revenues and Gross Profit (loss)

Three months ended September 30, 2024 to 2023

Nine months ended September 30, 2024 to 2023

Three Months Ended March 31,

(In thousands)

1 unchanged sentence

Gross profit (loss)

Cost of revenues increased by $380.7 million, or 65.4%, in the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, primarily due to an increase in inventory write-down accruals of $642.4 million related to the slowdown in our products demand, and excess inventory in our channels, the repeated price reductions and the introduction of a new generation of our products, which was partially offset by:

• a decrease in direct cost of revenues sold of $157.2 million which includes a decrease in the volume of products sold and an increase of $14.0 million in AMPTC recognized;

• a decrease in warranty expenses and warranty accruals of $52.1 million associated primarily with a decrease in revenues;

• a decrease in shipment and logistic costs in an aggregate amount of $44.2 million due to a decrease in volumes shipped;

Gross profit as a percentage of revenue decreased from 19.7%, in the three months ended September 30, 2023, to a gross loss of 269.2% in the three months ended September 30, 2024, primarily due to:

• inventory write-down accruals resulting in lower gross margin of approximately 250%;

• price reductions to our batteries for PV applications, which contributed a higher portion of our total product mix resulting in lower gross margin of approximately 23%;

• lower absolute fixed and other production related costs, which were divided this quarter by significantly lower revenue, resulting in lower gross margin of approximately 13%.

Cost of revenues decreased by $430.0 million, or 22.6%, in the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, primarily due to:

• a decrease in direct cost of revenues sold of $731.2 million which includes both a decrease in the volume of products sold and an increase of $44.1 million AMPTC recognized;

• a decrease in warranty expenses and warranty accruals of $190.0 million associated primarily with a decrease in revenues;

• a decrease in shipment and logistic costs in an aggregate amount of $124.1 million due to a decrease in volumes shipped and a decrease in expedited shipments costs.

These movements were partially offset by an increase of $636.5 million in inventory write-down related to the slowdown in our products demand and excess inventory in our channel, the repeated price reductions and the introduction of a new generation of our products.

Gross profit as a percentage of revenue decreased from 28.6% in the nine months ended September 30, 2023 to gross loss of 101.2% in the nine months ended September 30, 2024 primarily due to:

• inventory write-down accruals resulting in lower gross margin of approximately 90%;

• lower absolute fixed and other production related costs, which were divided this year by a significantly lower revenue, resulting in a lower gross margin, of approximately 23%;

• price reduction and a higher portion of our single phase batteries, out of our total product mix, resulting in lower gross margin of approximately 16%.

Cost of revenues decreased by $28.6 million, or 12.4%, in the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, primarily due to:

• a decrease in warranty expenses and warranty accruals of $17.2 million associated primarily with a lower cost of materials;

• a decrease in inventory costs of $8.7 million related to lower write-downs;

• a decrease in the direct cost of revenues sold of $5.9 million, associated primarily with the AMPTC recognized, which was partially offset by an increase in costs due to the manufacturing in the U.S., and a lower cost of products sold.

Gross profit as a percentage of revenue in the three months ended March 31, 2025 was 8.0%, as compared to gross loss as a percentage of revenue of 12.8%, in the three months ended March 31, 2024, primarily due to:

• a decrease in warranty expenses and warranty accruals of approximately 8% associated primarily with a lower cost of materials;

• a decrease of approximately 7% in restructuring plan and ramp up costs;

• a decrease of approximately 4% in indirect cost associated primarily with lower inventory write-downs.

SOLAREDGE TECHNOLOGIES INC.

| 2025 Form 10-Q | 9

Operating Expenses:

Research and Development

Three months ended September 30, 2024 to 2023

Nine months ended September 30, 2024 to 2023

Three Months Ended March 31,

(In thousands)

Research and development

Research and development costs decreased by $9.7 million or 12.1%, in the three months ended September 30, 2024, compared to the three months ended September 30, 2023, primarily due to:

• a decrease in personnel-related costs of $5.8 million resulting from our workforce reduction plan designed to reduce operating expenses and align our cost structure to current market dynamics;

• a decrease in expenses related to consultants and sub-contractors in an amount of $2.5 million.

Research and development costs decreased by $31.5 million or 12.8%, in the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, primarily due to:

• a decrease in personnel-related costs of $20.6 million resulting from our workforce reduction plan designed to reduce operating expenses and align our cost structure to current market dynamics;

• a decrease in expenses related to consultants and sub-contractors in an amount of $8.4 million.

Research and development costs decreased by $13.4 million or 17.7%, in the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily due to:

• a decrease in personnel-related costs of $7.2 million resulting from our Restructuring Plan designed to reduce operating expenses and align our cost structure to current market dynamics;

• a decrease in material consumption of $2.2 million;

• a decrease in depreciation and amortization of $1.5 million.

Sales and Marketing

Three months ended September 30, 2024 to 2023

Nine months ended September 30, 2024 to 2023

Three Months Ended March 31,

(In thousands)

Sales and marketing

Sales and marketing expenses decreased by $2.9 million, or 7.2%, in the three months ended September 30, 2024, compared to the three months ended September 30, 2023, primarily due to a decrease in personnel-related costs of $2.7 million resulting from our workforce reduction plan designed to reduce operating expenses and align our cost structure to current market dynamics.

Sales and marketing expenses decreased by $9.2 million, or 7.3%, in the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, primarily due to:

• a decrease in personnel-related costs of $6.4 million resulting from our workforce reduction plan designed to reduce operating expenses and align our cost structure to current market dynamics;

• a decrease of $1.4 million in training-related expenses.

Sales and marketing expenses decreased by $7.3 million, or 18.6%, in the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily due to a decrease in personnel-related costs of $6.4 million resulting from our Restructuring Plan designed to reduce operating expenses and align our cost structure to current market dynamics;

General and Administrative

Three months ended September 30, 2024 to 2023

Nine months ended September 30, 2024 to 2023

Three Months Ended March 31,

(In thousands)

General and administrative

General and administrative expenses increased by $2.1 million, or 5.4%, in the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily due to an increase in expenses related to doubtful debt of $4.4 million.

This was partially offset by:

• a decrease in expenses related to consultants and sub-contractors of $0.7 million;

• a decrease in personnel-related costs of $0.5 million resulting from our workforce reduction plan designed to reduce operating expenses and align our cost structure to current market dynamics.

General and administrative expenses decreased by $0.8 million, or 0.7%, in the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, primarily due to:

• a decrease in personnel-related costs of $7.1 million resulting from our workforce reduction plan designed to reduce operating expenses and align our cost structure to current market dynamics;

• a decrease in expenses related to consultants and sub-contractors $5.6 million.

• a decrease of $1.1 million related to other administrative costs.

These were partially offset by an increase in expenses related to doubtful debt of $13.2 million

General and administrative expenses have decreased by $0.7 million, or 2.2%, in the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily due to a net reversal of doubtful debt in the amount of $8.1 million in the three months ended March 31, 2025, as compared to an expense of $3.0 million, in the three months ended March 31, 2024, mainly related to collection of doubtful debt.

This decrease was partially offset by:

• an increase of $8.1 million primarily due to a penalty for postponing the commencement of our campus lease agreement;

• an increase in personnel-related costs, of $1.9 million primarily due to one-time restructuring costs and changes in management, which were partially offset by our Restructuring Plan designed to reduce operating expenses and align our cost structure to current market dynamics.

SOLAREDGE TECHNOLOGIES INC.

| 2025 Form 10-Q | 10

Other operating expense (income), net

Three months ended September 30, 2024 to 2023

Nine months ended September 30, 2024 to 2023

Three Months Ended March 31,

(In thousands)

Other operating expense (income), net

Other operating expenses, net, increased by $233.9 million in the three months ended September 30, 2024, compared to the three months ended September 30, 2023, primarily due to:

• an increase of $207.4 million in losses related to the impairment of property, plant and equipment;

• an increase of $22.5 million in losses related to the impairment of intangible assets;

• an increase of $2.3 million in losses related to the impairment of goodwill.

Other operating expense, net was $237.3 million, in the nine months ended September 30, 2024, compared to other operating income, net of $1.4 million in the nine months ended September 30, 2023, primarily due to:

• an increase of $209.1 million in losses related to the impairment of property, plant, and equipment;

• an increase of $22.5 million in losses related to the impairment of intangible assets;

• an increase of $2.3 million in losses related to the impairment of goodwill.

Other operating income, net, was $3.6 million in the three months ended March 31, 2025 compared to other operating expense, net, of $2.4 million in the three months ended March 31, 2024 primarily due to:

• an increase of $3.1 million in income related to lower than expected discontinuation charges;

• a decrease of $1.7 million in losses related to impairment of property, plant and equipment;

• a decrease of $0.9 million in losses from sale of property, plant and equipment.

Financial income (expense), net

Three months ended September 30, 2024 to 2023

Nine months ended September 30, 2024 to 2023

Three Months Ended March 31,

(In thousands)

Financial income (expense), net

Financial income, net was $5.6 million in the three months ended September 30, 2024, compared to financial expense, net in the amount of $7.9 million in the three months ended September 30, 2023, primarily due to $4.6 million income in the three months ended September 30, 2024 as compared to expenses of $16.4 million in the three months ended September 30, 2023, as a result of fluctuations in foreign exchange rates, primarily between the Euro and the NIS against the U.S.

This was partially offset by a decrease of $5.8 million in income related to hedging transactions.

Financial expenses, net was $2.4 million in the nine months ended September 30, 2024, compared to financial income, net in the amount of $19.2 million in the nine months ended September 30, 2023, primarily due to:

• an increase in expenses of $11.4 million due to credit loss related to loans receivables.

• a decrease of $5.0 million in income related to hedging transactions.

• an expense of $0.5 million compared to an income of $4.8 million in fluctuations in foreign exchange rates primarily between the Euro and the NIS against the U.S.

Please refer to the section entitled "Foreign Currency Exchange Risk" under Item 3 of this report for additional information.

Other income (loss), net

Three months ended September 30, 2024 to 2023

Nine months ended September 30, 2024 to 2023

Financial income, net, was $10.1 million in the three months ended March 31, 2025, compared to financial expense, net, in the amount of $7.1 million in the three months ended March 31, 2024, primarily due to:

• gain of $8.7 million in the three months ended March 31, 2025 as compared to loss of $9.5 million due to fluctuations in foreign exchange rates between the Euro and the NIS, against the U.S.

• gain of $1.2 million in the three months ended March 31, 2025 as compared to loss of $2.3 million due to credit loss related to loans receivable.

These were partially offset by:

• a decrease of $3.2 million in interest income related to our marketable securities investments;

• an increase of $1.9 million in interest expenses related to our Notes 2029.

SOLAREDGE TECHNOLOGIES INC.

| 2025 Form 10-Q | 11

Other income, net

Three months ended March 31,

(In thousands)

Other income (loss), net

Other loss increased by $3.4 million in the three months ended September 30, 2024, compared to the three months ended September 30, 2023, primarily due to a loss of $5.0 million related to impairment of an investment in a privately held company.

This was partially offset by an increase of $1.1 million in realized gain from marketable securities.

Other income, net was $14.6 million in the nine months ended September 30, 2024, compared to other loss, net of $0.6 million in the nine months ended September 30, 2023, primarily due to:

• an increase of $15.5 million due to a gain from the repurchase of the 2025 Notes;

• an increase of $3.2 million in realized gain from marketable securities;

• an increase of $1.1 million due to a gain from the revaluation of equity investment as a result of business combination.

These were partially offset by an increase in loss of $5.0 million as a result of an impairment of an investment in privately held company.

Tax benefits (income taxes)

Three months ended September 30, 2024 to 2023

Nine months ended September 30, 2024 to 2023

Other income, net

Other income, net increased by $0.1 million, or 100.0%, in the three months ended March 31, 2025, compared to the three months ended March 31, 2024, due to gain from the repurchase of convertible notes, in the three months ended March 31, 2025.

Income taxes (tax benefits)

Three months ended March 31,

(In thousands)

Income taxes increased by $85.0 million in the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily due to:

• an increase in deferred tax expenses of $141.2 million in the three months ended September 30, 2024, compared to the three months ended September 30, 2023, driven mainly by a valuation allowance due to uncertainty regarding future profitability.

• a decrease of $46.8 million in current tax expenses related to the decrease in profits before tax in certain jurisdictions, partially offset by an increase in our provision for uncertain tax positions.

Income taxes decreased by $14.5 million in the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023 primarily due to:

• a decrease of $104.0 million in current tax expenses mainly related to the decrease in profits before tax in certain jurisdictions, partially offset by an increase in our provision for uncertain tax positions.

• an increase in deferred tax expenses of $98.0 million, in the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, driven mainly by the valuation allowance due to uncertainty regarding future profitability.

Tax benefits (income taxes)

Income taxes were $5.7 million in the three months ended March 31, 2025, compared to tax benefits in the amount of $23.8 million in the three months ended March 31, 2024 primarily due to a valuation allowance of the deferred tax assets on our current losses, withholding taxes paid on certain intra-group interest payments and additional tax payable as a result of a settlement with the Israeli Tax Authority for tax years 2016-2018.

Net loss from equity method investments

Three months ended September 30, 2024 to 2023

Nine months ended September 30, 2024 to 2023

Three months ended March 31,

(In thousands)

Net loss from equity method investments

Net loss from equity method investments increased by $0.6 million, or 100% in the three months ended September 30, 2024 as compared to the three months ended September 30, 2023.

Net loss from equity method investments increased by $1.4 million, or 100% in the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.

Net Income (loss)

Three months ended September 30, 2024 to 2023

Nine months ended September 30, 2024 to 2023

(In thousands)

Net income (loss)

As a result of the factors discussed above, net loss in the three months ended September 30, 2024 and September 30, 2023 was $1,205.3 million and $61.2 million, respectively.

As a result of the factors discussed above, net loss was $1,493.5 million in the nine months ended September 30, 2024, as compared to a net income of $196.7 million in the nine months ended September 30, 2023.

Segment analysis

In October 2023, we decided to discontinue our LCV e-Mobility activity and the remaining e-Mobility activity is included under the solar segment starting January 1, 2024.

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

Solar, Energy Storage and Automation Machines.

We have identified two operating segments as reportable – the Solar and the Energy Storage segments.

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

We do not allocate our 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 excluding amortization and impairment of purchased intangible assets, stock based compensation expenses, restructuring charges, discontinued activity charges, impairment of property, plant and equipment and certain other items (which are reported under "Not allocated to segments").

Three Months Ended

September 30,

Nine Months Ended

September 30,

Net loss from equity method investments slightly decreased in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.

Three months ended March 31,

(In thousands)

Segment profit (loss)

Energy Storage

Segment profit (loss)

Not allocated to segments

Revenues not allocated to segments

Expenses, net not allocated to segments

As discussed above, this decrease in revenues was due to high inventory in the channels and slower than expected installation rates beginning in the third quarter of 2023, leading to substantial unexpected cancellations and push outs of existing backlog from our distributors.

Solar revenues decreased by $429.4 million, or 63.4%, in the three months ended September 30, 2024, as compared to the three months ended September 30, 2023 primarily due to (i) a decrease of $416.5 million related to a decrease in the number of inverters and power optimizers sold;

and a decrease of $14.6 million related to less ancillary solar products sold.

Solar operating loss was $717.3 million, in the three months ended September 30, 2024, as compared to profit of $45.1 million in the three months ended September 30, 2023.

This was due to the decrease of $429.4 million in revenue as well as a significant increase in inventory write-down accrual of $545.2 million related to the slowdown in our products demand and the repeated price reductions, which were partially offset by a decrease in direct cost of revenues associated with a decrease in the volume of products sold of $118.0 million, a decrease in warranty expenses and warranty accruals of $51.4 million associated primarily with a decrease in revenues and a decrease in shipment and logistic costs in an aggregate amount of $32.2 million_ due to a decrease in volumes shipped;

Solar revenues decreased by $1,853.9 million, or 73.2%, in the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023 primarily due to (i) a decrease of $1,640.5 million related to a decrease in the number of inverters and power optimizers sold;

(ii) a decrease of $167.7 million related to the number of batteries for PV applications sold primarily in Europe;

(iii) a decrease of $60.0 million related to less ancillary solar products sold.

Solar operating loss was $932.7 million, in the nine months ended September 30, 2024, as compared to profit of $458.9 million in the nine months ended September 30, 2023.

This was primarily due to the decrease of $1,853.9 million in revenue followed by a decrease in direct cost of revenues of $648.8 million, a decrease in warranty expenses and warranty accruals of $192.8 million, and a decrease of $118.9 million in shipment and logistic costs, all associated with a decrease in the volume of products sold which was offset by a significant increase in inventory write-down accrual valued at $554.3 million related to the slowdown in our products demand and repeated price reductions.

Energy Storage

Energy Storage revenues decreased by $13.3 million, or 55.0%, in the three months ended September 30, 2024, as compared to the three months ended September 30, 2023.

Energy Storage operating loss increased by $72.6 million, or 388.5%, in the three months ended September 30, 2024, as compared to the three months ended September 30, 2023.

The increase in operating loss was primarily due to the decrease in revenues and an increase of $59.4 million in cost of revenues mainly attributed to an increase in inventory write-down partially offset by a decrease in direct cost of revenues.

Energy Storage revenues decreased by $9.5 million, or 18.2%, in the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023.

Energy Storage operating loss increased by $60.6 million, or 115.5%, in the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023.

The increase in operating loss was primarily due to the decrease in revenues as well as an increase of $55.2 million in cost of revenues mainly attributed to an increase in inventory write-down partially offset by a decrease in direct cost of revenues.

All other segments revenues decreased by $21.7 million, or 90.7%, in the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, primarily due to the discontinuation of the Company’s LCV e-Mobility activity.

All other segments operating profit was $0.5 million in the three months ended September 30, 2024, compared to operating loss of $3.4 million, in the three months ended September 30, 2023.

This improvement was mainly due to the discontinuation of our LCV e-Mobility activity.

All other segments revenues decreased by $66.4 million, or 89.1%, in the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, primarily due to the discontinuation of the Company’s LCV e-Mobility activity.

All other segments operating profit was $0.9 million in the nine months ended September 30, 2024, compared to operating loss of $8.6 million, in the nine months ended September 30, 2023.

This improvement was mainly due to the discontinuation of our LCV e-Mobility activity.

Not allocated to segments

There were no significant changes in revenues not allocated to segments in the three months ended September 30, 2024, as compared to the three months ended September 30, 2023.

Expenses, net, not allocated to segments increased by $237.4 million, or 596.6%, in the three months ended September 30, 2024, as compared to the three months ended September 30, 2023.

The increase was mainly due to the impairment of property, plant and equipment, intangible assets and goodwill.

There were no significant changes in revenues not allocated to segments in the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023.

Expenses, net, not allocated to segments increased by $254.2 million, or 211.8%, in the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023.

The increase was mainly due to the impairment of property, plant and equipment, intangible assets and goodwill as well as an increase in costs related to the Restructuring Plan, all of which are not assessed by our CODM and therefore not allocated to any of the segments above.

As a result of the factors discussed above, net loss decreased by $58.8 million or 37.4% in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.

SOLAREDGE TECHNOLOGIES INC.

| 2025 Form 10-Q | 12

Liquidity and Capital Resources

The following table shows our cash flows from operating activities, investing activities, and financing activities for the stated periods:

Three Months Ended September 30,

Nine Months Ended September 30,

(In thousands)

Three Months Ended March 31,

(In thousands)

Net cash used in operating activities

Net cash provided by (used in) investing activities

Net cash provided by (used in) financing activities

Net cash provided by (used in) operating activities

Net cash provided by investing activities

Net cash used in financing activities

Increase (decrease) in cash and cash equivalents

As of September 30, 2024, our cash and cash equivalents were $303.9 million.

This amount does not include $430.9 million invested in available-for-sale marketable securities and $4.1 million invested in restricted bank deposits.

Our principal uses of cash are for funding our operations, capital expenditures, other working capital requirements, other investments, any potential future share repurchases and the repayment of our convertible notes due 2025.

As of September 30, 2024, we have open commitments for capital expenditures in an amount of approximately $18.5 million.

As of March 31, 2025, our cash and cash equivalents were $401.4 million.

This amount does not include $284.3 million invested in available-for-sale marketable securities, $104.5 million in restricted cash, and $3.4 million invested in deposits and restricted deposits.

Our principal uses of cash are for funding our operations, capital expenditures, other working capital requirements, other investments, and the repayment of our Notes 2025.

As of March 31, 2025, we have open commitments for capital expenditures in an amount of approximately $32.4 million.

These commitments mainly reflect purchases of automated assembly lines and other machinery related to our manufacturing and operations.

We also have purchase obligations in the amount of $234.0 million, related to raw materials and commitments for the future manufacturing of our products.

Beginning in the fourth quarter of 2024, we started to sell AMPTCs.

We plan to pursue additional tax credit transfer agreements in the future.

We believe our cash and cash equivalents, and available-for-sale marketable securities will be sufficient to meet our anticipated cash needs for at least the next 12 months as well as in the longer term, including the self-funding of our capital expenditure, operational commitments and the redemption of our debt.

Operating Activities

Operating cash flows consist primarily of net income (loss), adjusted for certain non-cash items and changes in assets and liabilities.

Cash used in operating activities increased by $285.5 million in the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, mainly due to net loss adjusted for certain non-cash items generated in the nine months ended September 30, 2024 as compared to net income adjusted for certain non-cash items in the nine months ended September 30, 2023, which was partially offset by lower operating working capital requirements.

Operating cash flows consist primarily of net loss, adjusted for certain non-cash items and changes in assets and liabilities.

Cash provided by operating activities was $33.8 million in the three months ended March 31, 2025 as compared to cash used in operating activities of $217.0 million in the three months ended March 31, 2024,attributed to a decrease in net loss adjusted for certain non-cash items generated in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, as well as by lower operating working capital requirements.

Investing Activities

Investing cash flows consist primarily of capital expenditures, investment in, sales and maturities of available for sale marketable securities, investment and withdrawal of bank deposits and restricted bank deposits, cash used for acquisitions, and disbursements and receipts from collections of loans made by the Company.

Cash provided by investing activities was $318.8 million in the nine months ended September 30, 2024 as compared to cash used in investing activities of $188.2 million in the nine months ended September 30, 2023, primarily driven by an increase of $508.9 million in proceeds provided by sales and maturities of available-for-sale marketable securities and a decrease of $34.1 million in purchase of property plant and equipment and a decrease of $13.6 million in purchases of available-for-sale debt investments.

These were partially offset by an increase of $22.9 million in disbursements of loans made by the Company and an increase of $17.7 million in cash used in the purchase of privately-held companies.

Cash provided by investing activities decreased by $81.4 million in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily driven by a decrease of $176.7 million in proceeds provided by sales and maturities of available-for-sale marketable securities, and an increase of $6.6 million in payment related to governmental grant, these were partially offset by a decrease of $56.8 million in purchases of available-for-sale debt investments, a decrease of $16.2 million in purchase of property plant and equipment, an increase of $12.0 million in proceeds from loans receivables, a decrease of $8.8 million in the purchase of privately-held companies and a decrease of $7.5 million in disbursements of loans made by the Company.

Financing Activities

Financing cash flows consisted primarily of repurchases of our common stock under the share repurchase program, the issuance and repurchase of convertible notes, and our employee equity incentive plans.

Cash used in financing activities in the nine months ended September 30, 2024 increased by $8.6 million compared to the nine months ended September 30, 2023, primarily due to a $267.9 million increase in cash used for the repurchase of convertible note, an increase of $50.3 million in cash used in share repurchases, a $28.3 million increase in cash used to purchase the capped call transactions and $13.0 million decrease in proceeds provided by the exercise of stock-based awards.

This was partially offset by a $329.2 million increase in cash provided by the issuance of convertible notes and a decrease of $21.6 million in withholding taxes remitted to the tax authorities related to the exercise of stock-based awards.

Financing cash flows consisted primarily of repurchases of our common stock under the share repurchase program, which expired on December 31, 2024, the issuance and partial repurchase of convertible senior notes, and our employee equity incentive plans.

Cash used in financing activities in the three months ended March 31, 2025 decreased by $44.8 million compared to the three months ended March 31, 2024, primarily due to a decrease of $50.0 million in cash used in share repurchases, which was partially offset by an increase of $5.1 million in cash used for the repurchase of our convertible senior notes, due in 2025 ("Notes 2025").

SOLAREDGE TECHNOLOGIES INC.

| 2025 Form 10-Q | 13

Share Repurchases

2 unchanged sentences

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 SolarEdge 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 nine months ended September 30, 2024, the Company repurchased 753,364 shares of common stock from the open market at an average cost of $66.79 per share for a total of $50.3 million.

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 $33.2 million.

Convertible Senior Notes

On June 28, 2024, we sold an aggregate principal amount of $300 million of 2.25% convertible senior notes due 2029 in a transaction exempt from registration pursuant to Rule 144A and Regulation S under the Securities Act.

On June 28, 2024, we sold an aggregate principal amount of $300 million of 2.25% convertible senior notes due in 2029 in a transaction exempt from registration pursuant to Rule 144A and Regulation S under the Securities Act.

The net proceeds from the offering of the Notes 2029 were approximately $293.2 million, after deducting fees and estimated expenses.

5 unchanged sentences

The Notes 2029 were sold pursuant to the Initial Purchasers’ exercise of the option granted by the Company to the Initial Purchasers to purchase additional Notes 2029, as described above in Note 11, “Convertible Senior Notes.”

In March 2025 the Company repurchased $5,250 principal amount of its Notes 2025.

The Company recorded a net gain of $146 thousands under other income, from this repurchase.

Critical Accounting Policies and Significant Management Estimates

Management believes that there have been no significant changes during the nine months ended September 30, 2024 to the items that we disclosed as our critical accounting policies and estimates in MD&A in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, except as mentioned in Note 1, “General” (if any).

Management believes that there have been no significant changes during the three months ended March 31, 2025 to the items that we disclosed as our critical accounting policies and estimates in MD&A in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, except as mentioned in Note 1, “General” (if any).

Q uantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk in the ordinary course of our business.

Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates.

Our market risk exposure is primarily a result of fluctuations in foreign currency exchange rates, customer concentrations, interest rates and commodity prices.

We do not hold or issue financial instruments for trading purposes.

Foreign Currency Exchange Risk

Approximately 32.7% and 54.4% of our revenues for the three months ended March 31, 2025, and 2024, respectively, were earned in non-U.S.

dollar denominated currencies other than the U.S.

dollar, principally the Euro.

Our expenses are generally denominated in the currencies in which our operations are located, primarily the U.S.

dollar, NIS, and Euro.

Our NIS denominated expenses consist primarily of personnel and overhead costs.

Our consolidated results of operations and cash flows are, therefore, subject to fluctuations due to changes in foreign currency exchange rates and may be adversely affected in the future due to changes in foreign exchange rates.

A hypothetical 10% change in foreign currency exchange rates between the Euro and the U.S.

dollar would increase or decrease our net income by $4.0 million for the three months ended March 31, 2025.

A hypothetical 10% change in foreign currency exchange rates between the NIS and the U.S.

dollar would increase or decrease our net income by $12.8 million for the three months ended March 31, 2025.

For purposes of our consolidated financial statements, local currency assets and liabilities are translated at the rate of exchange to the U.S.

dollar on the balance sheet date, and local currency revenues and expenses are translated at the exchange rate as of the date of the transaction or at the average exchange rate to the U.S.

dollar during the reporting period.

To date, we have used derivative financial instruments, specifically foreign currency forward contracts and put and call options, to manage exposure to foreign currency risks by hedging portions of the anticipated payroll payments denominated in NIS.

These derivative instruments are designated as cash flow hedges.

In addition, from time to time we enter into derivative financial instruments to hedge the Company’s exposure to currencies other than the U.S.

dollar, mainly forward contracts to sell Euro and AUD for U.S.

These derivative instruments are not designated as cash flow hedges.

SOLAREDGE TECHNOLOGIES INC.

| 2025 Form 10-Q | 14

Concentrations of Major Customers

Our trade accounts receivables potentially expose us to a concentration of credit risk with our major customers.

As of March 31, 2025, three major customers jointly accounted for approximately 35.9% of our consolidated trade receivables, net balance.

As of March 31, 2024, three major customers jointly accounted for approximately 36.9% of our consolidated trade receivables, net balance.

For the three months ended March 31, 2025, two major customers accounted for approximately 41.4% of our total revenues.

For the three months ended March 31, 2024, no single major customer contributed more than 10% of our total revenues.

Commodity Price Risk

We are subject to risk from fluctuating market prices of certain commodity raw materials which are used in our products, including Copper, Lithium, Nickel and Cobalt.

Prices of these raw materials may be affected by supply restrictions or other market factors from time to time, and we do not enter into hedging arrangements to mitigate commodity risk.

Significant price changes for these raw materials could reduce our operating margins if we are unable to recover such increases from our customers, and could harm our business, financial condition, and results of operations.

Contro ls and Procedures.

Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of March 31, 2025.

In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Based on that evaluation, our chief executive officer and chief financial officer concluded, as of March 31, 2025, that our disclosure controls and procedures were effective and operating to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and to provide reasonable assurance that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that occurred during the first fiscal quarter of 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

SOLAREDGE TECHNOLOGIES INC.

| 2025 Form 10-Q | 15

OTHER INFORMATION.

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 2. Management’s Discussion and Analysis