In the first quarter of this year, Solaredge, a technology company that provides solutions for the solar energy sector, experienced another weak performance. Despite high hopes for a market recovery in the second quarter, recent reports suggest that a quick turnaround is unlikely.
Just two weeks ago, rumors emerged that Solaredge’s competitors were experiencing delays in their own market recovery efforts. As a result, Solaredge’s stock price dropped by 8.5% in late trading after releasing its financial reports.
Despite higher-than-expected revenues of $204 million in the first quarter, which was still a 78% drop from the corresponding period last year, the solar sector saw revenues decrease by 33%. Most of these revenues came from Europe and North America.
Solaredge reported a gross loss of $26.2 million and a net loss of $157 million according to GAAP rules. The company also experienced negative cash flow from current operations and used $33 million to purchase its own shares. Despite these challenges, Solaredge is expecting revenues of $250-280 million in the second quarter, although this is below analysts’ expectations.
CEO Zvi Lando stated that he expects an increase in solar system installations in the second quarter to lead to lower inventories and improved revenues for the company. Solaredge is currently focusing on new product launches as it prepares for future growth opportunities in the industry. Earlier this year, Solaredge announced layoffs of over 900 employees due to declining demand for their products and services.
Despite its difficulties, Solaredge remains traded on Nasdaq with an estimated value of approximately $3 billion at present time – down significantly from its peak value of around $20 billion earlier in the year.
