Q2 2026 SolarEdge Technologies Inc Earnings Call

August 5, 2026

Speaker #1: Your page. This call is the sole property and copyright of SOLAREDGE with all rights reserved and any recording, reproduction, or transmission of this call without the express written consent of SOLAREDGE is prohibited.

Speaker #1: The meeting is about to begin. Hello, and welcome to the SolarEdge conference call for the second quarter ended June 30, 2026. This call is being webcast live on the company's website at www.solaredge.com in the Investors section, on the events calendar. Please stand by.

Operator: Hello and welcome to the SolarEdge Conference Call for the Q2 Ended 30 June 2026. This call is being webcast live on the company's website at www.solaredge.com in the Investors section on the Events Calendar page. This call is the sole property and copyright of SolarEdge with all rights reserved and any recording, reproduction or transmission of this call without the express written consent of SolarEdge is prohibited. You may listen to a webcast replay of this call by visiting the Event Calendar page of the SolarEdge investor website. I would now like to turn the call over to Erica Mannion at Sapphire Investor Relations. Please go ahead.

Speaker #1: You may listen to a webcast replay of this call by visiting the event calendar page of the web of the SOLAREDGE Investor website. I would now like to turn the call over to Erica Menion at Sapphire Investor Relations.

Speaker #1: Please go ahead.

Operator: Please go ahead.

Speaker #2: Good morning, and thank you for joining us to discuss SolarEdge's operating results for the second quarter ended June 30, 2026, as well as the company's outlook for the third quarter of 2026.

Erica Mannion: Good morning. Thank you for joining us to discuss SolarEdge's operating results for Q2, 30 June 2026, as well as the company's outlook for Q3 2026. With me today are Shuki Nir, Chief Executive Officer, Maoz Sigron, Chief Financial Officer, and Meir Adest, Co-founder of SolarEdge. Shuki will begin with a brief review of the results for Q2 ended 30 June 2026. Maoz will review the financial results for Q2, followed by the company's outlook for Q3 2026. We will then open the call for questions. Please note that this call will include forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from management's current expectations.

Speaker #2: With me today are Sue Kinnear, Chief Executive Officer, Moz Sigrun, Chief Financial Officer, and Mira Dest. Co-founder of SOLAREDGE. Sue, we will begin with a brief review of the results for the second quarter ended June 30, 2026.

Speaker #2: review the financial results for the second quarter followed by the company's outlook for the third quarter of 2026. We will then open the call for questions.

Speaker #2: Please note that this call will include forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from management's current expectations.

Speaker #2: We encourage you to review the safe harbor statements contained in our earnings press release and our filings with the SEC for a more complete description of such risks and uncertainties.

Erica Mannion: We encourage you to review the safe harbor statements contained in our earnings press release and our filings with the SEC for a more complete description of such risks and uncertainties. We disclaim any obligation to update any forward-looking statements. Please note during this earnings call, we may refer to certain non-GAAP measures, which are not measures prepared in accordance with US GAAP. The non-GAAP measures are being presented because we believe that they provide investors with a means of evaluating and understanding how the company's management evaluates the company's operating performance. Reconciliation of these measures can be found in our earnings press release and SEC filings. These non-GAAP measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with US GAAP.

Speaker #2: We disclaim any obligation to update any forward-looking statements. Please note, during this earnings call, we may refer to certain non-GAAP measures, which are not measures prepared in accordance with US GAAP.

Speaker #2: The non-GAAP measures are being presented because we believe that they provide investors with the means of evaluating and understanding how the company's management evaluates the company's operating performance.

Speaker #2: Reconciliation of these measures can be found in our earnings press release and SEC filings. These non-GAAP measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with US GAAP.

Speaker #2: Listeners who do not have a copy of the quarter ended June 30, 2026 press release may obtain a copy by visiting the Investor Relations section of the company's website.

Erica Mannion: Listeners who do not have a copy of Q2 ended 30 June 2026 press release may obtain a copy by visiting the investor relations section of the company's website. With that, I will turn the call over to Shuki.

Speaker #2: With that, I will turn the call over to Sue.

Speaker #3: Thank you, Erica. Good morning, everyone, and thank you for joining our call today. On our last call, I discussed how 2026 would be a year of transformation and acceleration for the company built around four main priorities.

Shuki Nir: Thank you, Erica. Good morning, everyone. Thank you for joining our call today. On our last call, I discussed how 2026 would be a year of transformation and acceleration for the company, built around four main priorities: driving profitable growth, expanding global market share, scaling the SolarEdge Nexus platform, and advancing our opportunity in power infrastructure for the AI factories of the future. This quarter, we saw tangible progress across each of these priorities. I am pleased to say that we reached an important milestone in our turnaround. Starting with our execution towards profitable growth. Since the beginning of 2025, we have grown our quarterly revenue year over year and have just delivered a strong Q2. Revenue grew 20% year over year to ILS 346 million. Once again, with no significant pull forward of revenue and non-GAAP gross margin expanded for the sixth consecutive quarter.

Speaker #3: Driving profitable growth, expanding global market share, scaling the SOLAREDGE Nexus platform, and advancing our opportunity in power infrastructure for the AI factories of the future.

Speaker #3: This quarter, we saw tangible progress across each of these priorities, and I'm pleased to say that we reached an important milestone in our turnaround.

Speaker #3: Starting with our execution towards profitable growth. Since the beginning of 2025, we have grown our quarterly revenue year over year and have just delivered a strong second quarter.

Speaker #3: Revenue grew 20% year over year to $346 million, once again with no significant pull forward of revenue, and non-GAAP gross margin expanded for the six consecutive quarter.

Speaker #3: Combined with our continued expense discipline, we delivered non-GAAP operating profitability for the first time in nearly three years, an important milestone in our transformation and a reflection of the relentless focus our team has maintained on operational efficiency and customer centricity.

Shuki Nir: Combined with our continued expense discipline, we delivered non-GAAP operating profitability for the first time in nearly three years, an important milestone in our transformation and a reflection of the relentless focus our team has maintained on operational efficiency and customer centricity. Looking to Q3, we expect revenue to be in the range of ILS 310 to ILS 340 million. Most of the sequential decline is expected in Europe at approximately ILS 15 million at the midpoint, mainly due to seasonality. At the same time, given the continued softness in the market, we do not expect the typical Q3 pickup in the US. Shifting to our second priority, market share gains. Our objective in 2026 has been to grow market share through product innovation, operational focus, and improved customer satisfaction.

Speaker #3: Looking to the third quarter, we expect revenue to be in the range of $310 million to $340 million. Most of the sequential decline is expected in Europe, at approximately $15 million at the midpoint, mainly due to seasonality.

Speaker #3: At the same time, given the continued softness in the market, we do not expect the typical third-quarter pickup in the U.S. Shifting to our second priority, market share gains.

Speaker #3: Our objective in 2026 has been to grow market share through product innovation operational focus and improved customer satisfaction. The US resin market demand remained soft in the second quarter, as customers navigated a slower tax equity funding environment and continued uncertainty around FIOC.

Shuki Nir: The US resi market demand remained soft in Q2 as customers navigated a slower tax equity funding environment and continued uncertainty around FEOC. This environment has resulted in less funds available to start new projects and to pay for the completion of existing ones. It has put a strain on installers' businesses and cash flows and led to lower purchases from distributors, who have also reduced the amount of inventory they carry. We expect this softness to continue in Q3 as the market awaits further clarity and better funding environment. With that said, when the market rebounds, we believe we are well positioned to gain share. This is due to our fit with the TPO business model and the amount of safe harbor transactions closed ahead of the 4 July deadline.

Speaker #3: This environment has resulted in less funds available to start new projects and to pay for the completion of existing ones. It has put a strain on installers' businesses and cash flows, and led to lower purchases from distributors who have also reduced the amount of inventory they carry.

Speaker #3: We expect this softness to continue in the third quarter, as the market awaits further clarity and better funding environment. With that said, when the market rebounds, we believe we are well positioned to gain share.

Speaker #3: This is due to our fit with the TPO business model and the number of safe harbor transactions closed ahead of the July 4 deadline.

Speaker #3: We will share more information about the safe harbor transactions in both resin and CNI during our investor day on September 10th. In US CNI, we have seen strong momentum.

Shuki Nir: We will share more information about the safe harbor transactions in both resi and C&I during our Investor Day on 10 September. In US C&I, we have seen strong momentum. Better execution across EPCs, small C&I customers, and enterprise accounts has helped increase our market share to more than 50% of US C&I rooftop installations in the most recent report. In addition, SolarEdge systems now installed on rooftops of more than 60% of Fortune 100 companies. The outlook for this market remains positive, supported by rising electricity prices and data center-driven demand. We have been the only major C&I inverter vendor to deliver US-manufactured products at scale designed to meet domestic content, non-FEOC, and FCC Covered List requirements.

Speaker #3: Better execution across EPCs, small CNI customers, and enterprise accounts has helped increase our market share to more than 50% of US CNI rooftop installations in the most recent report.

Speaker #3: In addition, SolarEdge systems are now installed on the rooftops of more than 60% of Fortune 100 companies. The outlook for this market remains positive, supported by rising electricity prices and data center-driven demand.

Speaker #3: We have been the only major CNI inverter vendor to deliver U.S.-manufactured products at scale, designed to meet domestic content, non-FIOC, and FCC covered list requirements.

Speaker #3: Together with the safe harbor agreements we have secured, we believe that we can gain further share in the coming years. In Europe, we more than doubled our revenue year over year, as demand for solar grew in anticipation of higher electricity prices, and demand for storage increased in anticipation of growth in the major markets.

Shuki Nir: Together with the safe harbor agreements we have secured, we believe that we can gain further share in the coming years. In Europe, we more than doubled our revenue year-over-year as demand for solar grew in anticipation of higher electricity prices and demand for storage increased in anticipation of the phase-out of net metering across several major markets. We believe the excitement around Nexus, along with the orders we have received in recent months, are positive indicators of our ability to gain share in the DACH region in the coming quarters. We expect a similar momentum across Europe with the planned rollout of the single-phase Nexus in Q1 2027. In addition, in recent quarters, we have launched retrofit campaigns in the Netherlands and the DACH region, where our combined installed base is greater than one million homes.

Speaker #3: We believe the excitement around Nexus, along with the orders we have received in recent months, are positive indicators of our ability to gain share in the DAAC region in the coming quarters.

Speaker #3: We expect a similar momentum across Europe with the planned rollout of the single-phase Nexus in Q1 2027. In addition, in recent quarters, we have launched retrofit campaigns in the Netherlands and the DAAC region.

Speaker #3: Where our combined installed base is greater than 1 million homes, in Q2 we generated more than $20 million in upsell activities, and we expect this opportunity to continue growing.

Shuki Nir: In Q2, we generated more than ILS 20 million in upsell activities, and we expect this opportunity to continue growing. Turning to our third priority, scaling the Nexus platform. At Intersolar in Germany this June, the highlight for us was the fantastic feedback we received from installers about Nexus. As discussed in previous calls, the platform was designed from the ground up to be a leading PV and storage solution in an environment where the grid is congested and utilities introduce dynamic tariffs. Recently, an independent renewable energy engineering consultant benchmarked Nexus against a leading competitor in Europe from the homeowner's perspective. The analysis shows that Nexus is expected to deliver €5,000 in additional savings over 15 years, driven by superior round-trip efficiency across all power levels and higher PV production.

Speaker #3: Turning to our third priority, scaling the Nexus platform. At Intersolar in Germany this June, the highlight for us was the fantastic feedback we received from installers about Nexus.

Speaker #3: As discussed in previous calls, ground up to be a leading PV and storage solution in an environment where the grid is congested and utilities introduce dynamic tariffs.

Speaker #3: Recently, an independent renewable energy engineering consultant benchmarked Nexus against a leading competitor in Europe from the homeowner's perspective. The analysis shows that Nexus is expected to deliver 5,000 euros in additional savings over 15 years driven by superior round-trip efficiency across all power levels and higher PV production.

Speaker #3: In the second quarter, we began to meaningfully roll out the three-phase version of Nexus in Europe, with shipments exceeding 60 million dollars. In the US, initial feedback from installers and TPOs has been very positive, and we expect Nexus installations to grow as we begin to roll out in volume.

Shuki Nir: In Q2, we began to meaningfully roll out the three-phase version of Nexus in Europe, with shipments exceeding ILS 60 million. In the US, initial feedback from installers and TPOs has been very positive, and we expect Nexus installations to grow as we begin to roll out in volume. Nexus has been approved on a growing list of US financing platforms, spanning TPO, prepaid PPA, and loan products, giving installers and homeowners more ways to access SolarEdge Nexus regardless of how they choose to finance. Turning to our fourth priority in the AI factory market, where we believe there is a substantial long-term opportunity. In Q2, our data center business shifted from development to demonstration as we continued to advance our solution and to engage with prospects and the ecosystem.

Speaker #3: Nexus has been approved on a growing list of U.S. financing platforms, spanning TPO, prepaid PPA, and loan products, giving installers and homeowners more ways to access SolarEdge Nexus, regardless of how they choose to finance.

Speaker #3: Turning to our fourth priority, in the AI factory market, where we believe there is a substantial long-term opportunity. In the second quarter, our data center business shifted from development to demonstration, as we continue to advance our solution and to engage with prospects and the ecosystem.

Speaker #3: Prospective customers, which importantly included their technical and engineering teams, had the opportunity to see live demonstrations of our SST in our labs. These demonstrations validated several critical elements of the system.

Shuki Nir: Prospective customers, which importantly included their technical and engineering team, had the opportunity to see live demonstrations of our SST in our labs. These demonstrations validated several critical elements of the system, including 99% efficiency across a range of power levels, direct conversion from medium voltage AC to a regulated DC bus, and encouraging installation results. In a number of RFIs we have responded to, efficiency is a key area of focus. Efficiency directly translates into greater compute capacity within a fixed power envelope. This additional compute leads to higher revenue, lower cost per token, and improved return on investment for the data center. Our technical progress and customer evaluations and feedback have increased our confidence in both the size of this opportunity and the strength of our position.

Speaker #3: Including 99% efficiency across a range of power levels, direct conversion for medium voltage AC to a regulated DC bus, and encouraging insulation results. In a number of RFIs, we have responded to efficiency is a key area of focus.

Speaker #3: Efficiency directed translates into greater compute capacity within a fixed power envelope. And this additional compute leads to higher revenue, lower cost per token, and improved return on investment for the data center.

Speaker #3: Our technical progress and customer evaluations and feedback have increased our confidence in both the size of this opportunity and the strength of our position.

Speaker #3: We believe SOLAREDGE is developing a highly differentiated solution that addresses the growing need for greater power efficiency and increased compute capacity within data centers.

Shuki Nir: We believe SolarEdge is developing a highly differentiated solution that addresses the growing need for greater power efficiency and increased compute capacity within data centers. We remain focused on our next planned milestones, getting to a working system in our lab by the end of this year, followed by pilot installations in 2027 and volume shipments in 2028. To summarize, Q2 marked a meaningful point in our turnaround. We returned to Non-GAAP operating profitability and made progress in all four priorities. While we are pleased with this progress, our team continues to focus on maintaining the operating and financial discipline, driving profitable growth, gaining share in our core markets, scaling up the Nexus platform, and advancing our SST to capture the AI factory opportunity. Lastly, I would like to welcome our new CFO, Maoz.

Speaker #3: We remain focused on our next planned milestones: getting to a working system in our lab by the end of this year, followed by pilot installations in 2027 and volume shipments in 2028.

Speaker #3: To summarize, the second quarter marked a meaningful point in our turnaround. We returned to non-GAAP operating profitability and made progress in all four priorities.

Speaker #3: While we are pleased with this progress, our team continues to focus on maintaining the operating and financial discipline driving profitable growth, gaining share in our core markets, scaling up the Nexus platform, and advancing our SST to capture the AI factory opportunity.

Speaker #3: Lastly, I would like to welcome our new CFO, Maud. His experience across finance, operations, capital markets, and organizational transformation is highly relevant as we continue our journey from turnaround to profitable growth.

Shuki Nir: His experience across finance, operations, capital markets, and organizational transformation is highly relevant as we continue our journey from turnaround to profitable growth. I am confident that his leadership, together with the strength of our finance organization, will serve us well as we enter this next phase. With that, I will hand it over to Maoz.

Speaker #3: I am confident that his leadership, together with the strengths of our finance organization, will serve us well as we enter this next phase. With that, I will hand it over to Maud.

Speaker #2: Thank you, Shuki, and good morning, everyone. I am very pleased to join SOLAREDGE and to speak with you today on my first earnings call as CFO of the company.

Maoz Sigron: Thank you, Shuki, and good morning, everyone. I am very pleased to join SolarEdge and to speak with you today on my first earnings call as CFO of the company. I'm excited about the opportunities ahead in residential and C&I, as well as the vast emerging opportunity in AI factories. I have spent time with teams across the organization, and I've been impressed by the extent of the company's technology, the quality of its people, and the operational discipline that has been established. My immediate priorities are continuity and execution, including, first, supporting profitable growth of our core business by ensuring our investment in Nexus and in our offering in the AI factory market are aligned with clear milestones and returns. Second, focusing on operational excellence by driving cost discipline and cost structure while strengthening execution rigor across manufacturing and the supply chain.

Speaker #2: I am excited about the opportunities ahead. In a residential and CNI, as well as the vast emerging opportunity in AI factories. I have spent time with teams across the organization and have been impressed by the extent of the company's technology, the quality of its people, and the operational discipline that has been established.

Speaker #2: My immediate priorities are continuity and execution, including first, supporting profitable growth of our core business by ensuring our investment in Nexus and in our offering in the AI factory market are aligned with clear milestones and returns.

Speaker #2: Second, focusing on operational excellence by driving cost discipline and cost structure while enhancing execution rigor across manufacturing and the supply chain. Third, managing cash by prioritizing free cash flow generation, maintaining a strong balance sheet, and liquidity position.

Maoz Sigron: Third, managing cash by prioritizing free cash flow generation, maintaining a strong balance sheet and liquidity position. Starting with our quarterly results. GAAP revenue for Q2 was $346.2 million, up 11.5% quarter-over-quarter and 19.6% year-over-year. Non-GAAP revenue was $345.5 million, up 11.5% quarter-over-quarter and 23% year-over-year, above the midpoint of our guidance range. This result does not include any significant pull forward of revenue from safe harbor. GAAP revenue from the US amounted to $154.9 million, down 2% quarter-over-quarter and representing 44.7% of our revenue. Revenue from Europe was $154.4 million, up 36% quarter-over-quarter, representing 44.6% of our revenue. International market revenue was $36.9 million, down 5% quarter-over-quarter, representing 10.7% of our revenue.

Speaker #2: Starting with our quarterly results. Gap revenue for the second quarter was 346.2 million, up 11.5% quarter over quarter, and 19.6% year over year. Non-gap revenue was 345.5 million, up 11.5% quarter over quarter, and 23% year over year, above the midpoint of our guidance range.

Speaker #2: This result does not include any significant pull-forward of revenue from safe harbors. GAAP revenue from the U.S. amounted to $154.9 million, down 2% quarter over quarter, and representing 44.7% of our revenue.

Speaker #2: Revenue from Europe was $154.4 million, up 36% quarter over quarter, representing 44.6% of our revenue. International market revenue was $36.9 million, down 5% quarter over quarter, representing 10.7% of our revenue.

Speaker #2: Gap gross margin was 27.5% this quarter, compared to a 22% in the first quarter, and 11.1% in the second quarter of last year. Non-gap gross margin was 28.6% this quarter, compared to a 23.5% in the first quarter, and 13.1% in the second quarter of last year.

Maoz Sigron: GAAP gross margin was 27.5% this quarter, compared to 22% in Q1 and 11.1% in Q2 of last year. Non-GAAP gross margin was 28.6% this quarter, compared to 23.5% in Q1 and 13.1% in Q2 of last year, above the high end of our guidance range. These results include a gross benefit of $13.3 million related to EPA tariff refunds. The improvement was driven by continued cost discipline, favorable product mix, the EPA refunds, and the improved operational leverage as fixed costs were absorbed over higher volumes. GAAP operating expenses for Q2 were $111.2 million, compared to $123.3 million in Q1 and $147.6 million in Q2 of last year.

Speaker #2: Above the high end of our guidance range. This result includes a gross benefit of 13.3 million related to EPA tariff refund. The improvement was driven by continued cost discipline favorable product mix, the EPA refunds, and the improved operational leverage as fixed costs were absorbed over higher volumes.

Speaker #2: Gap operating expenses for the second quarter were 111.2 million, compared to 123.3 million in the first quarter. And 147.6 million in the second quarter of last year.

Speaker #2: Non-GAAP operating expenses for the second quarter were $88.5 million, the exact midpoint of our guidance range, compared to $97.7 million in the first quarter and $85.2 million in the second quarter of last year.

Maoz Sigron: Non-GAAP operating expenses for Q2 were $88.5 million, the exact midpoint of our guidance range, compared to $97.7 million in Q1 and $85.2 million in Q2 2023. Despite the continued headwinds we face from a strengthening new Israeli shekel against the US dollar, we are maintaining our ongoing cost control and leveraging efficiency measures to ensure profitable growth. GAAP operating losses for Q2 were $16 million compared to GAAP operating losses of $55 million in Q1 and $115.5 million in Q2 2023. Non-GAAP operating income for Q2 was $10.2 million, compared to non-GAAP operating losses of $24.8 million in Q1 and $48.3 million in Q2 2023.

Speaker #2: Despite the continued advance effects from enhancing new Israeli shekel against the US dollar, we are maintaining our ongoing cost control and leveraging efficiency measures to ensure profitable growth.

Speaker #2: Gap operating losses for the second quarter were 16 million, compared to gap operating losses of 55 million in the first quarter and 115.5 million in the second quarter of last year.

Speaker #2: Non-gap operating income for the second quarter was 10.2 million, compared to non-gap operating losses of 24.8 million in the first quarter and 48.3 million in the second quarter of last year.

Speaker #2: Our GAAP net loss was $30.8 million in the second quarter, compared to GAAP net losses of $57.4 million in the first quarter and GAAP net losses of $124.7 million in the second quarter of last year.

Maoz Sigron: Our GAAP net loss was $30.8 million in Q2 compared to GAAP net losses of $57.4 million in Q1, and GAAP net losses of $124.7 million in Q2 2023. Our non-GAAP net income was $3.6 million in Q2, compared to a non-GAAP net loss of $26.3 million in Q1, and non-GAAP net loss of $47.7 million in Q2 2023. Positive for the first time since Q2 2023. GAAP net loss per share was $0.50 in Q2, compared to a loss of $0.95 in Q1, and a loss of $2.13 in Q2 2023.

Speaker #2: Our non-GAAP net income was $3.6 million in the second quarter, compared to a non-GAAP net loss of $26.3 million in the first quarter and a non-GAAP net loss of $47.7 million in the second quarter of last year.

Speaker #2: Positive for the first time since the second quarter of 2023. Gap net loss per share was 50 cents in the second quarter, compared to a loss of 95 cents in the first quarter and a loss of 213 cents in the second quarter of last year.

Speaker #2: Non-gap net profit per diluted share was 5 cents in the second quarter, compared to a loss of 43 cents in the first quarter and a loss of 81 cents in the second quarter of last year.

Maoz Sigron: Non-GAAP net profit per diluted share was $0.05 in Q2, compared to a loss of $0.43 in Q1, and a loss of $0.81 in Q2 2023. Turning now to our balance sheet. As of 30 June 2026, cash equivalents, and marketable securities were $601.6 million, up from $581.1 million as of 31 December 2025. During Q2, we generated $3.1 million of free cash flow compared to $20.7 million in Q1, and a -$9.1 million free cash flow in Q2 2023. Our CapEx in H1 was $12 million. For the full year 2026, we continue to expect CapEx within the range of $60 to $80 million with our principal investment areas remaining. First, increased production capacity in the US for both PV and batteries.

Speaker #2: Turning now to our balance sheet. As of June 30, 2026, cash-cash equivalent and marketable securities were 601.6 million, up from 581.1 million as of December 31, 2025.

Speaker #2: During the second quarter, we generated 3.1 million of free cash flow, compared to 20.7 million in the first quarter. And the negative free cash flow of 9.1 million in the second quarter of last year.

Speaker #2: Our capital expenditure in the first half was 12 million. For the full year 2026, we continued to expect capital expenditure within the range of 60 to 80 million, with our principal investment areas remaining, first, increased production capacity in the US for both PV and batteries.

Speaker #2: Second, investment in our new headquarters in Israel, largely related to advanced R&D facilities. Third, investment related to our AI factory offering. And, lastly, ongoing maintenance CapEx.

Maoz Sigron: Second, investment in our new headquarters in Israel, largely related to advanced R&D facilities. Third, investment related to our AI factory offering. Lastly, ongoing maintenance CapEx. We continue to expect positive free cash flow for the full year, reflecting our improving operating performance, continued discipline in managing expenses and capital investments, and our ongoing ability to monetize 45X credits. Turning to our working capital items. Our rigorous focus on cash management continued to yield positive results. In Q2, the net AR decreased once again, driven by strong collection combined with lower DSO and DIO DPO. Our conversion cycle continued to improve. Turning now to our guidance for Q3 2026. We expect revenue to be within the range of $310 million to $340 million. This range does not include any significant pull forward of revenue.

Speaker #2: We continue to expect positive free cash flow for the full year, reflecting our improving operating performance, continued discipline in managing expenses and capital investments, and our ongoing ability to monetize 45X credit.

Speaker #2: Turning to our working capital items, our rigorous focus on cash management continued to yield positive results. In the second quarter, net AR decreased once again, driven by strong collections. Combined with lower DSO and higher DPO, our conversion cycle continued to improve.

Speaker #2: Turning now to our guidance for the third quarter of 2026. We expect revenue to be within the range of 310 million to 340 million, this range does not include any significant pull forward of revenue.

Speaker #2: We expect a non-GAAP gross margin of approximately 22% to 26%. This range does not include any impact from potential EPA refunds. We expect non-GAAP operating expenses of approximately $86 million to $91 million.

Maoz Sigron: We expect a non-GAAP gross margin of approximately 22% to 26%. This range does not include any impact from potential EPA refunds. We expect non-GAAP operating expenses of approximately ILS 86 million to ILS 91 million, in line with our Q2 run rate of ILS 88.5 million and reflecting continued discipline in our core operations and planned investment in Nexus and AI Factory SST. Including the ILS 11.5 million of EPA refunds we have already received in July, the midpoint of our guidance imply a non-GAAP operating profit in the Q3. We believe the combination of our operational discipline, market share gains, and introduction of new innovative products, including Nexus, will continue to drive profitable growth in the years ahead. I will now turn the call over to the operator to open it up for questions. Operator?

Speaker #2: In line with our second-quarter run rate of $88.5 million, and reflecting continued discipline in our core operations and planned investment in Nexus and AI Factory SST.

Speaker #2: Including the 11.5 million of EPA refunds, we have already received in July, the midpoint of our guidance, imply a non-gap operating profit in the third quarter.

Speaker #2: We believe the combination of our operational discipline, market share gains, and introduction of new innovative products including Nexus will continue to drive profitable growth in the years ahead.

Speaker #2: I will now turn the call over to the operator to open it up for questions. Operator?

Speaker #1: Thank you. At this time, if you wish to ask a question, please press star one on your telephone keypad. You may remove yourself from the queue by pressing star two.

Operator: Thank you. At this time, if you wish to ask a question, please press star one on your telephone keypad. You may remove yourself from the queue by pressing star two. In the interest of time, we ask that you please limit to one question and one follow-up. We'll take our first question from Christine Cho with Barclays. Please go ahead. Your line is open.

Speaker #1: In the interest of time, we ask that you please limit to one question and one follow-up. We'll take our first question from Christine Cho with Barclays.

Speaker #1: Please go ahead, you're line is open.

Speaker #3: Good morning. Thank you for taking the question. I wanted to start off with, so I understand you kind of gave some reasons for the top line sequential decline.

Christine Cho: Good morning. Thank you for taking the question. I wanted to start off with, I understand you gave some reasons for the top-line sequential decline. Can we talk about what's driving the lower sequential gross margins? If that's mostly driven by US, Europe, just any color on that as well.

Speaker #3: Can we talk about what's driving the lower sequential gross margins? If that's mostly driven by US, Europe, just any color on that as well.

Speaker #2: Thank you for the question. Yes, the gross margin for Q3—we expect 24%. The main reason for that is the scale of the business, which is different in Q3 and very much aligned with the fixed costs that we have in cost of goods.

Maoz Sigron: Thank you for the question. Yes, the gross margin for Q3, we're expecting 24%. The main reason for that is the scale of the business that is different in Q3 and very much aligned with our fixed cost that we have in the cost of goods. This is actually the main reason. If you take this out, you actually can see a small improvement quarter-over-quarter.

Speaker #2: And this is actually the main reason. If you take this out, you can actually see a small improvement quarter over quarter.

Speaker #3: Okay. And then, in the prepared remarks, you mentioned that with the current backdrop in the U.S., distributors are coming down on inventory. Do you have a sense of how many weeks they have on hand currently, and how that compares to how much they typically like to carry?

Christine Cho: Okay. In the prepared remarks, you mentioned that with the current backdrop in the US, distributors are coming down on inventory. Do you have a sense of how many weeks they have on hand currently, and how that compares to how much they typically like to carry? I know you mentioned that you don't expect to see Q3 pickup in the US, but should we think that there's enough inventory in the channel that they can continue to come down in Q4, so it's possible that there's a sequential decline in Q4 as well? How much of this is also being driven by people wanting to de-stock ahead of purchasing Nexus?

Speaker #3: And I know you mentioned that you don't expect to see Q3 pickup in the US. But should we think that there's enough inventory in the channel that it can continue to come down in Q4, and so it's possible that there's a sequential decline in Q4 as well?

Speaker #3: And how much of this is also being driven by people wanting to destock ahead of purchasing Nexus?

Speaker #2: Yeah, so thank you, Christine. How are you? Regarding the channel inventory, as we said, due to the softness in the market, everybody is becoming a little bit more cautious and a little bit more careful.

Maoz Sigron: Yeah. Thank you, Christine. How are you? For the channel inventory, as we said, due to the softness in the market, everybody is becoming a little bit more cautious and a little bit more careful. Our channel inventory, to the best of our knowledge, is normalized. It's moving between products and between distributors, both in Europe and the US, but overall, it's normalized. We don't have a reason to believe that something is going to be materially different going into the quarter. We did mention that because in conversations with distributors and channel partners, they are stating that they are trying to be careful about how much inventory they bring because it's not yet clear to everybody when the clarity around the FEOC definition is going to happen.

Shuki Nir: Yeah. Thank you, Christine. How are you? For the channel inventory, as we said, due to the softness in the market, everybody is becoming a little bit more cautious and a little bit more careful. Our channel inventory, to the best of our knowledge, is normalized. It's moving between products and between distributors, both in Europe and the US, but overall, it's normalized. We don't have a reason to believe that something is going to be materially different going into the quarter. We did mention that because in conversations with distributors and channel partners, they are stating that they are trying to be careful about how much inventory they bring because it's not yet clear to everybody when the clarity around the FEOC definition is going to happen.

Speaker #2: Our channel inventory, to the best of our knowledge, is normalized. It's moving between products and between distributors, both in Europe and the US, but overall, it's normalized.

Speaker #2: And we don't have a reason to believe that something is going to be materially different going into the quarter. We did mention that because in conversations with distributors and channel partners, they are stating that they are trying to be careful about how much inventory they bring because nobody because it's not yet clear to everybody when the clarity around the FIOC, the finishing is going to happen.

Speaker #3: Thank you.

Operator: Thank you. We will move next with Brian Lee with Goldman Sachs. Please go ahead.

Speaker #1: We will move next to Brian Lee with Goldman Sachs. Please go ahead.

Brian Lee: Hey. Thanks for taking the questions. Maybe just to kind of piggyback off of Christine's questions. For the Q3 guide, can you kind of walk us through the pieces? It sounds like you're calling out some European seasonality, some softness in the resi market for the US, curious kind of what your view is embedded for storage volumes in the Q3. How much of this sort of persists into Q4? I know you don't want to give guidance, but kind of the setup for European seasonality and the channel as well as US resi and storage into year-end.

Speaker #4: Hey. Thanks for taking the questions. Maybe just to kind of piggyback off of Christine's questions, how much well, for the three-queue guide, can you kind of walk us through the pieces?

Speaker #4: It sounds like you're calling out some European seasonality, some softness in the resin market for the US, and I'm curious what your view is regarding storage volumes in the third quarter.

Speaker #4: And then how much of this sort of persists into four-queue kind of? Can you maybe I know you don't want to give guidance, but kind of the setup for European seasonality and the channel as well as US resin and storage into your end?

Speaker #2: Yes, thank you, Brian. So what we have is there are two or three factors that are in play here, and some of them are going in one direction and others on the other one.

Maoz Sigron: Yes. Thank you, Brian. What we have is, there are two or three factors that are in play here, and some of them are going in one direction and the others on the other one. If you think about seasonality, usually, Q4, and we are not guiding for Q4 right now. Usually Q4 is seasonally lower than Q3. However, going into Q3, what we said was that we expect Europe, in the midpoint, to go down by ILS 15 million, mainly due to seasonality, and it is a combination of PV and storage. In the US, softness in the resi, we expect it to continue, and again, it is both PV and storage.

Shuki Nir: Yes. Thank you, Brian. What we have is, there are two or three factors that are in play here, and some of them are going in one direction and the others on the other one. If you think about seasonality, usually, Q4, and we are not guiding for Q4 right now. Usually Q4 is seasonally lower than Q3. However, going into Q3, what we said was that we expect Europe, in the midpoint, to go down by ILS 15 million, mainly due to seasonality, and it is a combination of PV and storage. In the US, softness in the resi, we expect it to continue, and again, it is both PV and storage.

Speaker #2: If you think about seasonality, then usually the fourth quarter—and we're not guiding for fourth quarter right now—usually, fourth quarter is seasonally lower than Q3.

Speaker #2: However, going into the third quarter, what we said was that we expect Europe to go down at the midpoint—to go down by $15 million—mainly due to seasonality.

Speaker #2: And it's a combination of PV and storage. And in the US, the softness in the resin, we expect it to continue and again, it's both resin.

Speaker #2: It's both PV and storage. One thing that people may want to pay attention to is the growth of storage in the revenue, both in Q2 and we expect that to over time without any particular quarter any particular quarter can be up or down a little bit, but overall, the industry is moving into a higher attach rates of storage.

Shuki Nir: One thing that people may want to pay attention to is the growth of storage in the revenue, both in Q2, and we expect that to over time, without any particular quota. Any particular quota can be up or down a little bit, but overall, the industry is moving into higher attach rates of storage. We have seen it in the US, we have seen it in Germany, we have seen it in other places. The retrofit activities in anticipation of the phase-out of feed-in tariffs is also a main driver for storage when in a retrofit installation, it is mostly storage. All in all, we are expecting storage to become a bigger piece of our business. That is the second piece. The third piece is, you asked about what will happen in future quarters.

Speaker #2: We've seen it in the US. We've seen it in Germany. We've seen it in other places. And the retrofit activities in anticipation of the phase-out of feeding tariffs is also a main driver for storage in a retrofit installation.

Speaker #2: It's mostly storage. So all in all, we are expecting storage to become a bigger piece of our business. So that's the second piece. The third piece is you asked about what will happen in future quarters.

Speaker #2: As we said, it ties into clarity around the FIOC definition and the ability of the financing companies to secure investments that then will actually allow additional money to flow into the market, into installers, and when that happens, we will see that the market rebounds.

Shuki Nir: As we said, it ties into clarity around the FEOC definition and the ability of the financing companies to secure investments, that then will actually allow additional money to flow into the market, into installers. When that happens, we will see that the market rebounds. When the market rebounds, we feel that we are very well-positioned to benefit from that. Our engagement with the TPOs, the safe harbors that we have signed, and the Nexus with all of its advantages, we believe position us well to benefit from that.

Speaker #2: And when the market rebounds, we feel that we are very well positioned to benefit from that. Our engagement with the TPOs, the Safe Harbors that we've signed, and the Nexus with all of its advantages, we believe position us well to benefit from that.

Speaker #4: Helpful. I appreciate that. And then maybe just a second question. I know you've been clear for the past several quarters, including on this call, that there's no significant pull forward revenue, no Safe Harbor.

Brian Lee: Helpful. I appreciate that. Maybe just a second question. I know you have been clear for the past several quarters, including on this call, that there is no significant pull-forward revenue, no safe harbor. I am just curious on that dynamic because I know your peer has seen a significant amount of safe harbor over the course of the entirety of 2026. Can you kind of walk us through what is the difference between your go-to-market or your safe harbor strategy or maybe customers as to why that is happening? Also, maybe kind of in relation to that, any thoughts on the recent FCC foreign inverter ban? How does SolarEdge kind of fit into that, and do you need waivers, and what is sort of the potential implications that you think you have to contemplate? Thank you.

Speaker #4: I'm just curious about that dynamic, because I know your peer has seen a significant amount of Safe Harbor over the course of the entirety of 2026.

Speaker #4: So can you kind of walk us through what's the difference between your go-to-market or your Safe Harbor strategy or maybe customers as to why that's happening?

Speaker #4: And then also, maybe kind of in relation to that, any thoughts on the recent FCC foreign inverter ban? How does SOLAREDGE kind of fit into that?

Speaker #4: And do you need waivers? And what are the potential implications that you think could come into play? Thank you.

Speaker #2: Yeah. Thank you, Brian. And it was a little bit more than one question. So if I forget something, please remind me. When you refer to our peer and what they've done, you should definitely ask them.

Shuki Nir: Thank you, Brian. It was a little bit more than one question, so if I forget something, please remind me. When you refer to our peer and what they've done, you should definitely ask them. In our conversations with our customers, with our partners, both on the C&I side and the resi side, their strong preference is obviously to go with the physical walk test. The physical walk test allows them to align their purchases with their demand, basically. When they need the equipment, they are pulling it or they are buying it from us. That will align our revenue with their purchases, with their installations, and it's a healthier flow of the channel, if you will.

Speaker #2: But in our conversations with our customers, with our partners, both on the CNI side and the resin side, there's strong preferences, obviously, to go with the physical walk test, the physical walk test allows them to align their purchases with the demand, basically.

Speaker #2: So when they need the equipment, they are pulling it or they are buying it from us. That will align our revenue with their purchases, with their installations, and it's a healthier flow of the channel, if you will.

Speaker #2: Because of that and due to the fact that many of them have seen Nexus, believe in the value that it brings to the table, and they understand very well that even in three or four years from now, it will still be a leading product in the market.

Shuki Nir: Due to the fact that many of them have seen Nexus, believe in the value that it brings to the table, and they understand very well that even in three or four years from now, it will still be a leading product in the market. They felt comfortable going with the physical walk test, safe harbor deals with that. We've signed, as I mentioned, both on C&I side and the resi side, a significant amount of safe harbor transactions, and we will elaborate on that and share more information during Investor Day. As it pertains to the FCC ruling, as you know, SolarEdge is a Delaware company. We're listed in Nasdaq. The majority of our manufacturing is done in the US, in Utah, in Florida, and in Texas.

Speaker #2: Because of all of these reasons, they felt comfortable going with the physical walk test Safe Harbor deals with us. We've signed as I mentioned, both on CNI side and the resin side significant amount of Safe Harbor transactions.

Speaker #2: And we will elaborate on that and share more information during investor day. As it pertains to the FCC ruling, so as you know, SOLAREDGE is a Delaware company.

Speaker #2: We're listed in NASDAQ. The majority of our manufacturing is done in the US, in Utah, in Florida, and in Texas. To the best of our understanding, the FCC covered list is something that we comply with, and we plan to continue being in compliance with.

Shuki Nir: To the best of our understanding, the FCC covered list is something that we comply with, and we plan to continue being in compliance with. From that perspective, it's a step in the right direction, maybe for the safety of the energy market in the US. SolarEdge, being an American company, is definitely part of that, and we see no reason that we won't be in compliance with it.

Speaker #2: So from that perspective, it's a step in the right direction maybe from the safety of the energy market in the US, but SOLAREDGE being an American company is definitely part of that.

Speaker #2: And we see no reason that we won't be in compliance with it.

Speaker #1: Thank you. Our next question comes from Philip Shen with Roth Capital Partners. Please go ahead.

Operator: Thank you. Our next question comes from Philip Shen with Roth Capital Partners. Please go ahead.

Philip Shen: Thanks, all, for taking the questions. I have a follow-up on Brian's question about the FCC inverter action. They talked about exemptions, I think. Well, actually, we wrote about potential for exemptions coming. I don't know if they talked about it, the point here is that we see potential for the FCC near term to issue exemptions and approve exemptions. It still might take a few weeks. I was wondering, let's say this takes 3 weeks. Have you guys already applied for Nexus, for example, to be exempted? If not, do you think that this process could delay the rollout of Nexus in the US? Ultimately, this is I think a tailwind more for your C&I business, as there's not much Chinese inverter penetration in the resi business.

Speaker #5: Thanks, all, for taking the questions. I have a follow-up on Brian's question about the FCC inverter action. They talked about exemptions, I think.

Speaker #5: Well, actually, we wrote about potential for exemptions coming. I don't know if they talked about it, but the point here is that we see potential for the FCC near term to issue exemptions and approve exemptions but it still might take a few weeks and so I was wondering let's say this takes three weeks.

Speaker #5: Have you guys already applied for Nexus, for example, to be exempted? And if not, do you think that this process could delay the rollout of Nexus in the US?

Speaker #5: And then ultimately, this is I think a tailwind more for your CNI business as there's not much Chinese inverter penetration in the resin business.

Speaker #5: I just want to confirm that you see if there is a tailwind for you guys that's more of a CNI tailwind as opposed to resin.

Philip Shen: Just want to confirm that you see if there is a tailwind for you guys that's more of a C&I tailwind as opposed to resi. If you could quantify where you think that tailwind would be, that would be great as well. Thanks.

Speaker #5: And if you could quantify what you think that tailwind would be, that would be great as well. Thanks.

Shuki Nir: Thank you, Phil. Let me take the first thing out of the way. Where it's coming from, I'd like to be very, very clear. Nexus is made in the US by a US company. There is no need or reason to ask for exemption. It's part of the FCC list, period. I don't know where that comes from, it's not true. It's not going to delay the Nexus rollout in any way, shape, or form. As we said, we are actually starting to roll out Nexus in the US as well in Q3. It's already been approved by many financing companies, we expect Nexus to gain traction this quarter and in future quarters.

Speaker #2: So let me thank you, Phil. And let me take the first thing out of the way. I don't know where it's coming from. I'd like to be very, very clear.

Speaker #2: Nexus is made in the U.S. by a U.S. company. There is no need or reason to ask for exemption—it's part of the FCC list, period.

Speaker #2: And I don't know where that comes from, but it's not true. So it's not going to delay the Nexus rollout in any way, shape, or form.

Speaker #2: And as we said, we are actually starting to roll out Nexus in the US as well in the third quarter. It's already been approved by many financing companies and we expect Nexus to gain traction this quarter and in future quarters.

Shuki Nir: As for the C&I opportunity due to the FCC Covered List, as you said, it's not yet clear when it is going to impact companies that are not going to be approved for their new product. It's not yet clear whether their existing products can actually continue to be imported into the US or not, when, if at all, it will stop. In the last report, we've actually gained share in the C&I market to the point of 50% of the rooftop C&I installations in that quarter. The reason for that was the superiority of our technology, as well as the FEOC and domestic content compliance. As you know, and you know it very well, Phil, there have been three leaders in the C&I market, SMA, Chint, and SolarEdge. The other two, to the best of our knowledge, are not complying with both.

Speaker #2: As for the CNI opportunity, due to the FCC covered list, so it's not yet clear. As you said, it's not yet clear when it is going to impact companies that are not going to be approved for their new product.

Speaker #2: It's not yet clear whether their existing products can actually continue to be imported into the US or not and when, if at all, it will stop.

Speaker #2: We have actually in the last report, we've actually gained share in the CNI market to the point of 50% of the rooftop CNI installations in that quarter.

Speaker #2: And the reason for that was the superiority of our technology as well as the FIOC and domestic content compliance. And as you know, and you know it very well, Phil, there have been three leaders in the CNI market.

Speaker #2: SMA, Chint, and SOLAREDGE. The other two, to the best of our knowledge, are not complying with both. And because of that, we've seen a good traction towards SOLAREDGE.

Shuki Nir: Because of that, we've seen a good traction towards the SolarEdge, and that traction, if at all, should continue with the FCC ruling, actually.

Speaker #2: And that traction, if at all, should continue with the FCC ruling, actually.

Speaker #1: Thank you. Our next question comes from Colin Rush with Oppenheimer. Please go ahead.

Operator: Thank you. Our next question comes from Colin Rusch with Oppenheimer. Please go ahead.

Speaker #6: Thanks so much, guys. Can you talk a little bit about the trend lines on storage pricing? It looks like you're seeing a little bit of improvement on that.

Colin Rusch: Thanks so much, guys. Can you talk a little bit about the trend lines on storage pricing? It looks like you're seeing a little bit of improvement on that, and just want to get a sense of whether that's mix-related or if you're actually monetizing a little bit more effectively in the market.

Speaker #6: And I just want to get a sense of whether that's mixed related or if you're actually monetizing a little bit more effectively in the market.

Speaker #2: Yeah, thank you, Colin. So storage pricing, as always, it's a combination of three different products that we are selling at the moment on the storage side.

Shuki Nir: Yeah. Thank you, Colin. Storage pricing, as always, it's a combination of three different products that we are selling at the moment on the storage side. One is the C&I storage in Europe, which has a higher power density. The other ones are the single-phase and the three-phase residential storage, that each one of them is slightly different and it depends on the market. Overall, our storage prices have remained stable per product. The differences that you're seeing quarter to quarter are mainly due to product mix, I would say. As I mentioned earlier, we definitely are seeing a growing demand for storage products in general in the market and for our own storage products, specifically. The C&I storage in Europe continues to improve. With Nexus, that was designed from the ground up to be a PV plus storage solution.

Speaker #2: One is the CNI storage in Europe, which has a higher power density. The other ones are the single-phase and the three-phase residential storage that each one of them is slightly different than and it depends on the market.

Speaker #2: Overall, our storage prices have remained stable per product. What you're seeing, the differences that you're seeing quarter to quarter are mainly due to product mix, I would say.

Speaker #2: But as I mentioned earlier, we definitely are seeing a growing demand for storage products in general in the market and for our own storage products specifically.

Speaker #2: The CNI storage in Europe continues to improve. And with Nexus, that was designed from the ground up to be a PV plus storage solution, we believe that we are going to continue benefiting from that trend.

Shuki Nir: We believe that we are going to continue benefiting from that trend.

Speaker #6: Great. And then on the supply chain side, I want to get a sense of any sort of shifts that you're seeing in terms of component availability, pricing, inflationary pressures that we should be thinking about as we get into the back half of 2026.

Colin Rusch: Great. Then on the supply chain side, I want to get a sense of any sort of shifts that you're seeing in terms of component availability, pricing, inflationary pressures that we should be thinking about as we get into the H2 of 2026.

Speaker #2: Yes. So component suppliers they've always said that shortages are coming. As you know, the data center demand is actually creating some strain on some of the components, memory, in particular.

Shuki Nir: Yeah. Component suppliers, they've always said that shortages are coming. As you know, data center demand is actually creating some strain on some of the components, memory in particular. Our supply chain team has worked diligently in order to secure supply. In some cases, like memory, we have to actually absorb some of the price increases, but in the grand scheme of things, these are not something that is significant. We are working together with our partners to secure supply and to make sure that we are able to support our customers to the best of our ability.

Speaker #2: Our supply chain team has worked diligently in order to secure supply at some in some cases, like memory, we have to actually absorb some of the price increases, but these are at the grand scheme of things.

Speaker #2: These are not something that is significant. We are working together with our partners to secure supply and to make sure that we are able to support our customers to the best of our ability.

Speaker #1: Thank you. And once again, if you would like to ask a question, please press star one on your telephone keypad. We will move next to Corinne Blanchard with Deutsche Bank.

Operator: Thank you. Once again, if you would like to ask a question, please press star one on your telephone keypad. We will move next with Corinne Blanchard with Deutsche Bank. Please go ahead.

Speaker #1: Please go ahead.

Speaker #7: Hey, good morning. Thank you for taking my question. Maybe shifting gears a little bit here, can you talk about the SST and I know you have talked previously about the timeline and trying to get a more like a proof of concept by the end of this year and then pilots program and update in 2027.

Corinne Blanchard: Hey, good morning. Thank you for taking my question. Maybe shifting gears a little bit here, can you talk about the SST? I know you have talked previously about the timeline and trying to get more of a proof of concept by the end of this year, then pilot program a bit in 2027. Can you just maybe tell us what we should be expecting in the next 6 months for that one?

Speaker #7: But can you just maybe tell us what we should be expecting in the next six months for that one?

Speaker #2: Okay. So thank you for the question. I think the first thing to start with is the fact that we sent the last couple of weeks demonstrating a working prototype of the SST to prospective customers.

Shuki Nir: Okay. Thank you for the question. I think the first thing to start with is the fact that we spent the last couple of weeks demonstrating a working prototype of the SST to prospective customers. Really, it was interesting to see the difference between slideshows and presentations and having them see an actual working model going from medium voltage to 800 volt DC regulated. I think that alleviates from their perspective, a lot of the concerns they had about the maturity of the product. Where we're going from here is, we're going to spend the next few months until the end of the year to get the proof of concept prototype fully working at the full 3-phase, 34.5 kV voltage. 2026 will be pilots at the data centers.

Maoz Sigron: Okay. Thank you for the question. I think the first thing to start with is the fact that we spent the last couple of weeks demonstrating a working prototype of the SST to prospective customers. Really, it was interesting to see the difference between slideshows and presentations and having them see an actual working model going from medium voltage to 800 volt DC regulated. I think that alleviates from their perspective, a lot of the concerns they had about the maturity of the product. Where we're going from here is, we're going to spend the next few months until the end of the year to get the proof of concept prototype fully working at the full 3-phase, 34.5 kV voltage. 2026 will be pilots at the data centers.

Speaker #2: And really, it was interesting to see the difference between slideshows and presentations and having them see an actual working model. At going from medium voltage to 800-volt DC regulated.

Speaker #2: So I think that alleviate from their perspective a lot of the concerns they had about the maturity of the product. Where we're going from here is we're going to spend the next few months until the end of the year to get the proof of concept prototype fully working at the full three-phase 34.5 kilovolt voltage.

Speaker #2: And then 2026 will be pilots in at the data centers—sorry, 2027 will be pilots at the data centers—so that we could have meaningful revenue in 2028.

Shuki Nir: Sorry, 2027 will be pilots at the data centers, so that we could have a meaningful revenue in 2028.

Maoz Sigron: Sorry, 2027 will be pilots at the data centers, so that we could have a meaningful revenue in 2028.

Speaker #7: Thank you. I mean, do you just to read one on that quantifying revenues, when do you expect to be in a position to share maybe like a ballpark of expectation and how much you can contribute to the portfolio?

Corinne Blanchard: Thank you. Just to rebound on quantifying revenues, when do you expect to be in a position to share maybe a ballpark of expectation and how much you can contribute to the portfolio?

Speaker #2: Yeah. So as we've said, it's a transition that the industry is going through, right? And with NVIDIA actually sharing with the entire ecosystem, their roadmap for GPUs that will require 800-volt.

Shuki Nir: Yeah. As we've said, it's a transition that the industry is going through, right? With NVIDIA actually sharing with the entire ecosystem their roadmap for GPUs that will require 800V, that will be step one. The second step is whether people are going to use sidecar or other inefficient solutions, or when they will transition into SSTs. We expect revenue to start in 2028. During our investor day on 10 September, we are actually going to share more information about how we think about the opportunity and evolution of revenue in that part of the business.

Speaker #2: That will be step one. The second step is whether people are going to use sidecar or other inefficient solutions, or when they will transition into SSTs.

Speaker #2: And we expect revenue to start in 2028. During our investor day on September 10th, we are actually going to share more information about how we think about the opportunity and evolution of revenue in that part of the business.

Speaker #1: Thank you. We will move next with Mahib Mandloy with Mizuho. Please go ahead.

Operator: Thank you. We will move next with Maheep Mandloi with Mizuho. Please go ahead.

Maheep Mandloi: Hey, thanks for taking the questions. Maybe just on Q4, I suppose we're not looking for guidance there, but just in terms of seasonality, anything which would be different or similar to what we've seen historically here for you guys?

Speaker #3: Hey, thanks for taking the questions. Let me do some Q4 solution. I'm looking for guidance there, but just in terms of seasonality, anything which would be different or similar to what we've seen historically here for you guys?

Speaker #2: Yeah. So as you know, we don't guide beyond the current quarter. And when we talk about Q4, I think that as I mentioned earlier, on one hand, we are seeing the improvement on the storage side, more and more in the Netherlands, for example, people are in anticipation of the elimination of net metering more and more people would like to upgrade their existing systems into storage.

Shuki Nir: Yeah. As you know, we don't guide beyond the current quarter. When we talk about Q4, I think that, as I mentioned earlier, on one hand, we are seeing the improvement on the storage side more and more. In the Netherlands, for example, people are in anticipation of the elimination of net metering. More and more people would like to upgrade their existing systems into storage. One can expect that maybe there will be some upside coming from there. Usually, from seasonality, there is a decline in the market between Q3 and Q4. In our case, actually, we are going to see the ramp-up of Nexus. Between these three moving parts, we are not providing guidance at this stage, and we'll share with you obviously everything as we come closer to Q4.

Speaker #2: So one can expect that maybe there will be some upside coming from there. Usually, it's a seasonal from seasonality. There is a decline in the market between Q3 and Q4.

Speaker #2: And in our case, actually, we are going to see the ramp-up of Nexus. So between these three moving parts, we are not providing guidance at this stage.

Speaker #2: And we'll share with you, obviously, everything as we come closer to Q4.

Maheep Mandloi: I appreciate that. Just maybe to follow up on Europe, I've been hearing about potential inverter bans on the Chinese players over there. What have you heard on that, or what are customers talking about that to people there?

Speaker #3: I appreciate that. And just maybe to follow up on Europe, I'm hearing about potential inverter bans on the Chinese players over there. So what have you heard on that, or what are customers talking about to people over there?

Speaker #2: Yeah. So there is one directive that was already issued in Europe that for projects that are funded by the European bank, they cannot use unauthorized inverters.

Shuki Nir: Yeah. There is one directive that was already issued in Europe that for projects that are funded by the European Bank, they cannot use unauthorized inverters. That has been the case so far. The only thing that has been actually out and being official. This, as we said in the past, is mainly applicable for utility and maybe some C&I business opportunity for us. For other segments of the market, namely the C&I and the residential market, there is some sentiment that maybe there will be a ban, but we don't want to speculate about if and when.

Speaker #2: And that has been the case so far the only thing that has been actually out and being official this, as we said in the past, it's mainly applicable for utility and maybe some CNI business opportunity for us.

Speaker #2: For other segments of the market, namely the CNI and the residential market, there is some sentiment that maybe there will be a ban, but we don't want to speculate about if and when.

Speaker #1: Thank you. And at this time, there are no further questions. Thank you. I will now turn the meeting back to Shuki Nair for closing comments.

Operator: Thank you. At this time, there are no further questions in queue. I will now turn the meeting back to Shuki Nir for closing comments.

Speaker #2: Thank you. Thank you, everyone, for joining us for today's call. We I'd like to thank the SOLAREDGE team for working really, really hard. And after almost three years moving back to profitability, and thank you all.

Shuki Nir: Thank you everyone for joining us for today's call. I'd like to thank the SolarEdge team for working really hard, and after almost three years, moving back to profitability. Thank you all.

Operator: Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.

Q2 2026 SolarEdge Technologies Inc Earnings Call

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