NEW YORK, August 6, 2026, 07:01 EDT
- U.S. regular trading was yet to begin. SolarEdge shares were set to open 2.92% higher at $34.89 in premarket trading.
- The midpoint for third-quarter revenue at $325 million is 6.1% lower than second-quarter sales. William Blair estimated this figure falls about 12% short of forecasts.
- Initial estimate: Excluding the impact of its tariff-related gain, SolarEdge’s adjusted operating profit for the second quarter is a loss of $3.1 million.
SolarEdge Technologies, Inc. NASDAQ:SEDG shares held steady in premarket trade Thursday following a 30.5% plunge. Its earnings report revealed the company posted its first adjusted operating profit in almost three years, though this was still reliant on tariff relief.
The company’s non-GAAP operating income for the second quarter reached $10.2 million. This figure factored in a $13.3 million gain related to International Emergency Economic Powers Act tariff issues. Without this benefit, operating results would show a $3.1 million loss, based on an initial calculation by the reporter.
The outlook for the third quarter indicates a similarly narrow breakeven. A 24% gross margin on $325 million in revenue translates to gross profit of $78 million at the midpoint. Operating expenses at the midpoint are set at $88.5 million, resulting in a pre-refund loss of $10.5 million. Including the $11.5 million in July refunds brings the result to roughly $1 million in net profit.
Profit quality: comparison of actual and midpoint
Figures marked with a star are preliminary calculations by the reporter.
| Basis | Revenue ($m) | Gross margin | Operating expenses ($m) | IEEPA item ($m) | Operating result ($m) | Operating margin |
|---|---|---|---|---|---|---|
| Q2 non-GAAP, reported | 345.5 | 28.6% | 88.5 | 13.3 included | 10.2 | 3.0% |
| Q2 adjusted, benefit removed | 345.5 | 24.8% | 88.5 | — | -3.1 | -0.9% |
| Q3 forecast, midpoint pre-refund | 325.0 | 24.0% | 88.5 | — | -10.5 | -3.2% |
| Q3 forecast, midpoint post-refund | 325.0 | 24.0% base | 88.5 | 11.5 | 1.0 | 0.3% |
The market reacted sharply to that difference. The decline on Wednesday wiped out approximately $914 million in equity value, calculated using shares as of June 30. Trading volume hit 16.8 million, which is 4.7 times the 65-day average. Trading in Nasdaq cash securities had yet to begin. In premarket activity, SolarEdge was indicated up 2.9% at $34.89.
The drop was considerably sharper than those of its peers. SolarEdge lagged behind the sector ETF by 26.4 percentage points and was 23.8 points behind Enphase. This disparity points to a reset particular to the company, rather than just general weakness in the solar sector.
Market comparison for August 5
| Security | Close ($) | Daily change |
|---|---|---|
| SolarEdge Technologies NASDAQ:SEDG | 33.90 | -30.48% |
| Enphase Energy, Inc. NASDAQ:ENPH | 38.95 | -6.70% |
| Sunrun Inc. NASDAQ:RUN | 10.49 | -4.44% |
| First Solar, Inc. NASDAQ:FSLR | 236.80 | -2.81% |
| Invesco Solar ETF (NYSEARCA:TAN) | 51.27 | -4.05% |
The advance was short-lived before being wiped out. Shares climbed 9.5% on Monday and rose another 8.1% on Tuesday, but dropped 30.5% on Wednesday. The stock stands 17.7% down from its closing level last Friday.
The quarter delivered better-than-anticipated results. Revenue climbed 19.6% to $346.2 million. Adjusted earnings came in at $0.05 per share. Analysts were forecasting $341.99 million in revenue and a loss of $0.02 per share. However, attention remained focused on the company’s outlook.
Guidance served as the turning point. The midpoint of $325 million is 6.1% lower than revenue from the previous quarter. William Blair analyst Jed Dorsheimer noted a 12% shortfall in revenue relative to forecasts. He further pointed out a two-percentage-point gap on margin.
Caution is driven by demand. U.S. revenue reached $154.9 million, with Europe close behind at $154.4 million, each accounting for nearly 45% of total sales. Management forecasts a decline of about $15 million in Europe at the midpoint for the third quarter. Additionally, the company does not anticipate a typical U.S. uptick, as residential demand continues to be weak.
Chief Executive Shuki Nir described the quarter as “an important milestone in SolarEdge’s turnaround.” He noted that robust demand in Europe and stronger U.S. commercial sales helped balance weaker residential results. Nonetheless, numbers adjusted for refunds indicate sustained operating leverage is still hard to achieve. SEC
The longer-term revenue impact from artificial intelligence remains unsubstantiated. SolarEdge announced that its solid-state transformer has progressed to live demonstrations. The company is aiming for laboratory validation by the end of the year and pilot deployments in 2027. Substantial revenue contributions are not anticipated before 2028. Wednesday’s stock decline indicates investors heavily discounted that scenario.
Among 27 analysts surveyed, only one had a Buy rating ahead of Thursday’s market open. Seven analysts assigned Underweight or Sell ratings. The consensus price target was 15.7% higher than shares closed on Wednesday, while the median target suggested a 9.1% potential gain.
Analyst ratings and target prices
| Analyst measure | Current | Three months ago |
|---|---|---|
| Buy | 1 | 1 |
| Hold | 19 | 23 |
| Underweight | 2 | 2 |
| Sell | 5 | 4 |
| Consensus | Hold | Hold |
| Average target | $39.21 | — |
| Median target | $37.00 | — |
| Target range | $24–$71 | — |
An Oppenheimer conference appearance is scheduled for August 13. A more significant investor day is set for September 10. Investors are expected to look for data on organic margins, U.S. order patterns, and more detailed economics for transformers.
Risks. A prolonged sales downturn may result from subdued residential financing and regulations on foreign entities. Seasonal trends in Europe, a firmer shekel, and higher component costs could weigh on margins. More rapid Nexis adoption or increased commercial market share could bolster prospects for a rebound.
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