SolarEdge Technologies, Inc. reported third‑quarter 2025 results on November 5 2025, posting revenue of $340.21 million, up 18% from $289.41 million in Q2. GAAP gross margin expanded to 21.2% from 11.1% in the prior quarter, while non‑GAAP gross margin rose to 18.8% from 13.1%. Operating cash flow surged to $25.6 million, a jump from $7.8 million in Q2, and free cash flow climbed to $22.8 million from $9.1 million. The company posted a GAAP operating loss of $35.2 million versus $115.5 million, and a non‑GAAP operating loss of $23.8 million from $48.3 million. EPS of $‑0.31 beat the consensus estimate of $‑0.41, a beat of $0.10 or roughly 24%.
Revenue growth was driven by a 10% increase in U.S. residential demand and a 55% jump in European sales, offsetting a modest decline in legacy product volumes. Year‑over‑year, Q3 2025 revenue rose 44.5% to $340.21 million from $235.44 million in Q3 2024, underscoring the company’s recovery from the severe loss incurred in the prior year. The strong performance in the U.S. and Europe reflects the ramp‑up of domestic manufacturing and the continued demand for high‑efficiency inverters.
Margin expansion was largely a result of inventory normalization and cost control initiatives. By reducing excess inventory and improving supply‑chain efficiency, the company lowered cost of goods sold, allowing gross margins to climb by 10 percentage points. Management also highlighted pricing power in the residential segment, where the company’s DC‑optimized inverters command a premium, further supporting margin growth. The narrowing operating loss reflects the combined effect of higher revenue, improved gross margin, and disciplined operating expenses.
Despite the robust Q3 results, SolarEdge guided for Q4 2025 revenue of $310 million to $340 million, below the consensus estimate of $343.3 million. The guidance miss signals management’s concern about potential headwinds, including the upcoming elimination of the 25D tax credit for residential solar and ongoing tariff impacts. Investors focused on the weaker forward outlook, which tempered the market reaction. The company’s cash and investments net of debt rose to $208.8 million from $131.8 million, reinforcing its liquidity position as it continues to invest in U.S. manufacturing and the Nexis platform.
CEO Shuki Nir emphasized that the company is “making steady progress in its turnaround, with three consecutive quarters of revenue growth and improving margins.” He added that SolarEdge remains focused on innovation and operational efficiency, positioning the firm to capitalize on growing demand for smart energy solutions. The company’s strategic shift to recognize revenue from product shipments rather than shipments themselves, effective Q4 2025, is expected to provide a clearer view of earnings and support future growth.
The Q3 results demonstrate a significant turnaround from the $1.21 billion GAAP net loss in Q3 2024, driven by a $1.03 billion impairment charge. The current quarter’s positive free cash flow and strengthened balance sheet give SolarEdge the flexibility to invest in next‑generation products and expand U.S. manufacturing. While the cautious Q4 guidance reflects near‑term uncertainty, the company’s improved profitability, cash‑flow generation, and market‑share gains suggest a solid foundation for long‑term growth in the competitive solar inverter market.
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