Earnings

SolarEdge Restores Non-GAAP Operating Profit

The Tip Desk · August 5, 2026 · 4 min read

Second-quarter revenue was $346.2 million as non-GAAP operating income reached $10.2 million, the first such profit since the second quarter of 2023.

SolarEdge Technologies (SEDG) reported non-GAAP operating income of $10.2 million in the second quarter ended June 30, 2026, reversing a $24.8 million non-GAAP operating loss in the prior quarter and marking the first non-GAAP operating profit since the second quarter of 2023.

GAAP revenue was $346.2 million, up 19.6% from a year earlier. Non-GAAP revenue was $345.5 million. The sequential rebound followed a 7.4% decline in first-quarter revenue. Chief executive Shuki Nir called the quarter “an important milestone in SolarEdge’s turnaround,” saying strong demand in Europe and strength in U.S. commercial and industrial more than offset industry-wide softness in U.S. residential.

The company is focused on scaling the Nexis platform in core markets and advancing the SolarEdge SST to address AI factories.

Gross margin expanded for a sixth consecutive year-over-year period. GAAP gross margin was 27.5%, compared with 22.0% in the first quarter. Non-GAAP gross margin was 28.6%. Both figures included a $13.3 million benefit related to IEEPA tariff matters.

GAAP operating loss narrowed to $16.0 million from $55.0 million in the prior quarter. GAAP net loss was $30.8 million, or $0.50 a share, compared with a $57.4 million loss, or $0.95 a share, in the first quarter. Non-GAAP net income was $3.6 million, or $0.05 a share.

GAAP operating expenses were $111.2 million. Non-GAAP operating expenses were $88.5 million. Research and development, net, was $52.8 million; sales and marketing was $27.3 million; general and administrative was $24.5 million; other operating expense, net, was $6.6 million.

Non-GAAP free cash flow was $3.1 million, down from $20.7 million in the first quarter. Cash and investments, net of debt, grew by $20.4 million in the quarter to $264.6 million as of June 30, 2026.

For the third quarter ending September 30, 2026, SolarEdge guided revenue of $310 million to $340 million, non-GAAP gross margin of 22% to 26%, and non-GAAP operating expenses of $86 million to $91 million. The guidance does not include any significant pull-forward of revenue and excludes potential IEEPA refunds in the third quarter. Including $11.5 million of IEEPA refunds received in July, the company said the midpoint of guidance implies non-GAAP operating profit in the third quarter.

The outlook range sits below second-quarter GAAP revenue of $346.2 million and below the $325 million to $355 million range the company had given for the second quarter. Non-GAAP operating expenses of $86 million to $91 million bracket the $88.5 million run rate just reported.

Nir said the company is building on the quarter’s momentum by scaling Nexis in core markets and continuing to advance the SST for AI factories.

The sequential revenue rebound and the flip to non-GAAP operating profit sit against a year of margin expansion that had already been described as a multi-quarter run. First-quarter results had shown a $24.8 million non-GAAP operating loss and 23.5% non-GAAP gross margin, with management then saying it expected to be close to breakeven operating profitability at the midpoint of its second-quarter outlook.

GAAP results remained in the red. Operating loss of $16.0 million and net loss of $30.8 million, or $0.50 a share, left the company still reporting a GAAP deficit even as the non-GAAP operating line crossed into profit.

Free cash flow stayed positive at $3.1 million, a smaller print than the $20.7 million generated in the first quarter. The cash-and-investments position, net of debt, was $264.6 million at June 30.

Third-quarter guidance of $310 million to $340 million in revenue, 22% to 26% non-GAAP gross margin, and $86 million to $91 million of non-GAAP operating expenses is presented without IEEPA refunds. Including the $11.5 million of refunds received in July, the company said the midpoint implies non-GAAP operating profit.

SolarEdge is scaling Nexis in core markets and advancing the SST for AI factories as it builds on the quarter’s demand mix of Europe and U.S. commercial and industrial.

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