SolarEdge reports US$326.1M revenue as fourth-quarter outlook weakens
A US$36M tariff benefit lifted gross margin, while net cash and investments slipped and fourth-quarter sales guidance came in lower.
Ines Halvorsen
For the quarter ended Sept. 30, 2026, revenue fell to US$326.1 million from US$340.2 million a year earlier at SolarEdge Technologies, Inc. NASDAQSEDG, the company reported on Wednesday. Its quarterly net loss narrowed to US$8.4 million from US$50.1 million.
The solar equipment maker's third-quarter GAAP gross margin rose to 33.2 per cent from 21.2 per cent a year earlier. The Nov. 4 results included a US$36 million benefit related to International Emergency Economic Powers Act tariffs.
Operating cash flow reached US$20.4 million in the third quarter, while free cash flow was US$7.8 million. That marked a fifth consecutive quarter of positive free cash flow, although the cash and investments portfolio, net of debt, fell to US$260.9 million at Sept. 30 from US$264.6 million at June 30.
For the fourth quarter ending Dec. 31, 2026, SolarEdge forecast revenue of US$245 million to US$275 million. Its outlook excludes potential tariff refunds and calls for a lower adjusted gross margin than the third-quarter result.
SolarEdge shares closed at US$32.88 on Nasdaq on Nov. 3 at 4 p.m. EST, according to the NASDAQSEDG quote page. That close preceded Wednesday's release, so it does not measure the market's response to the results.
Third-quarter revenue came in below the US$329.1 million consensus compiled by Zacks Investment Research on Nov. 2. Adjusted diluted earnings of US$0.29 a share exceeded its US$0.02 estimate.
Free cash flow increased from US$3.1 million in the second quarter but remained below the US$22.8 million generated in the third quarter of 2025.
SolarEdge develops solar inverters, power optimizers, energy storage and energy-management equipment for residential and commercial customers. Third-quarter sales also declined from the preceding quarter's US$346.2 million, even as profitability improved.
"As near-term market uncertainty persists and given reduced revenue expectations for the fourth quarter, we are taking decisive steps to reduce costs, sharpen our focus, and support profitability amid softer demand," chief executive Shuki Nir said in the release.
Tariff Benefits Lifted Third-Quarter Margins
The tariff-related benefit also supported SolarEdge's third-quarter adjusted gross margin of 34.7 per cent. Fourth-quarter guidance puts that measure at 17 to 21 per cent, excluding potential refunds.
SolarEdge expects fourth-quarter adjusted operating expenses of US$87 million to US$91 million, compared with US$88.8 million in the third quarter. The expense range therefore sits around the latest quarterly level while the revenue forecast is lower.
The release also described live demonstrations of SolarEdge's solid-state transformer technology for potential data-centre partners and customers. It did not identify a signed customer contract or a commercial shipment date for that effort.
Enphase Energy, Inc. NASDAQENPH reported a similar demand constraint in its Oct. 27 quarterly release. Its third-quarter revenue was US$293.3 million, and it attributed a smaller-than-anticipated increase in U.S. revenue to soft residential solar demand.
Read more: Eaton raises 2026 growth outlook as electrical backlog climbs 46 per cent
SolarEdge's next reporting period ends Dec. 31, 2026, with the lower sales range and refund-excluding margin outlook setting the benchmarks for the fourth quarter.
