QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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(State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification No.) | |
(Address of principal executive offices, zip code) |
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(Registrant’s telephone number, including area code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
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☒ |
Accelerated filer |
☐ |
Non-accelerated filer |
☐ (Do not check if a smaller reporting company) |
Smaller Reporting Company |
☐ |
Emerging growth company |
☐ |
2 | ||
2 | ||
F-2 - F-3 |
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F-4 | ||
F-5 | ||
F-6 - F-7 |
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F-8 - F-9 |
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F-10 - F-27 |
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4 | ||
17 | ||
19 | ||
19 | ||
19 | ||
20 | ||
20
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20 | ||
20 | ||
20 | ||
21 | ||
21 |
Page | |
F-2 - F-3 | |
F-4 | |
F-5 | |
F-6 - F-7 | |
F-8 - F-9 | |
F-10 - F-27 |
June 30, |
December 31, |
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2019 |
2018 |
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Unaudited |
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ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents |
$ |
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$ |
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Short-term bank deposit |
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Restricted bank deposits |
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Marketable securities |
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Trade receivables, net |
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Prepaid expenses and other assets |
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Inventories, net |
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Total current assets |
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LONG-TERM ASSETS: |
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Marketable securities |
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Operating lease right-of-use assets |
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- |
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Property, plant and equipment, net |
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Deferred tax assets, net |
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Intangible assets, net and goodwill |
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Other long term assets |
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Total long term assets |
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Total assets |
$ |
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$ |
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June 30, |
December 31, |
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2019 |
2018 |
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Unaudited |
||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
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CURRENT LIABILITIES: |
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Trade payables, net |
$ |
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$ |
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||||
Employees and payroll accruals |
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Current maturities of bank loans and accrued interest |
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Warranty obligations |
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Deferred revenues |
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Accrued expenses and other liabilities |
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Total current liabilities |
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LONG-TERM LIABILITIES: |
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Bank loans |
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Warranty obligations |
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Deferred revenues |
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Operating lease liabilities |
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Deferred tax liabilities, net |
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Other long term liabilities |
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Total long-term liabilities |
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COMMITMENTS AND CONTINGENT LIABILITIES |
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STOCKHOLDERS’ EQUITY: |
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Common stock of $ |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
( |
) |
( |
) | ||||
Retained earnings |
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Total SolarEdge Technologies, Inc. stockholders’ equity |
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Non-controlling interests |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
$ |
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$ |
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Three months ended
June 30, |
Six months ended
June 30, |
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2019 |
2018 |
2019 |
2018 |
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Unaudited |
Unaudited |
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Revenues |
$ |
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$ |
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$ |
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$ |
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Cost of revenues |
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Gross profit |
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Operating expenses: |
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Research and development |
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Sales and marketing |
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General and administrative |
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Total operating expenses |
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Operating income |
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Financial expenses (income), net |
( |
) |
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Income before taxes on income |
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Taxes on income |
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Net income |
$ |
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$ |
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$ |
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$ |
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||||||||
Net loss attributable to non-controlling interests |
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||||||||||||
Net income attributable to SolarEdge Technologies, Inc. |
$ |
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$ |
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$ |
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$ |
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Net basic earnings per share of common stock attributable to SolarEdge Technologies, Inc. |
$ |
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$ |
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$ |
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$ |
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||||||||
Net diluted earnings per share of common stock attributable to SolarEdge Technologies, Inc. |
$ |
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$ |
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$ |
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$ |
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Weighted average number of shares used in computing net basic earnings per share of common stock |
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Weighted average number of shares used in computing net diluted earnings per share of common stock |
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Three months ended
June 30, |
Six months ended
June 30, |
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2019 |
2018 |
2019 |
2018 |
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Unaudited |
Unaudited |
|||||||||||||||
Net income |
$ |
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$ |
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$ |
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$ |
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||||||||
Other comprehensive income (loss): |
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Available-for-sale securities: |
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Changes in unrealized gains (losses), net of tax |
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( |
) |
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( |
) | ||||||||||
Reclassification adjustments for losses included in net income |
( |
) |
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Net change |
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( |
) |
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( |
) | ||||||||||
Foreign currency translation adjustments, net |
( |
) |
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( |
) |
( |
) | |||||||||
Total other comprehensive income (loss) |
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( |
) |
( |
) |
( |
) | |||||||||
Comprehensive income |
$ |
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$ |
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$ |
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$ |
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Comprehensive income (loss) attributable to non-controlling interests |
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( |
) |
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Comprehensive income attributable to SolarEdge Technologies, Inc. |
$ |
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$ |
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$ |
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$ |
|
SolarEdge Technologies, Inc. Stockholders’ Equity |
||||||||||||||||||||||||||||||||
Common stock |
Additional paid in
Capital |
Accumulated
Other comprehensive
Income (loss) |
Retained earnings |
Total |
Non-controlling interests |
Total stockholders’
equity |
||||||||||||||||||||||||||
Number |
Amount |
|||||||||||||||||||||||||||||||
Balance as of January 1, 2018 |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
$ |
|
$ |
- |
$ |
|
||||||||||||||||
- |
||||||||||||||||||||||||||||||||
Cumulative effect of adopting ASC 606 |
- |
- |
- |
- |
( |
) |
( |
) |
- |
( |
) | |||||||||||||||||||||
Issuance of Common Stock upon exercise of employee and non-employees stock-based awards |
|
* |
|
- |
- |
|
- |
|
||||||||||||||||||||||||
Equity based compensation expenses to employees and non-employee consultants |
- |
- |
|
- |
- |
|
- |
|
||||||||||||||||||||||||
Other comprehensive loss adjustments |
- |
- |
- |
( |
) |
- |
( |
) |
- |
( |
) | |||||||||||||||||||||
Net income |
- |
- |
- |
- |
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|
- |
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||||||||||||||||||||||||
Balance as of March 31, 2018 (unaudited) |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
$ |
|
$ |
- |
$ |
|
||||||||||||||||
Issuance of Common Stock upon exercise of employee and non-employees stock-based awards |
|
* |
|
- |
- |
|
- |
|
||||||||||||||||||||||||
Equity based compensation expenses to employees and non-employee consultants |
- |
- |
|
- |
- |
|
- |
|
||||||||||||||||||||||||
Other comprehensive loss adjustments |
- |
- |
- |
( |
) |
- |
( |
) |
- |
( |
) | |||||||||||||||||||||
Net income |
- |
- |
- |
- |
|
|
- |
|
||||||||||||||||||||||||
Balance as of June 30, 2018 (unaudited) |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
$ |
|
$ |
- |
$ |
|
SolarEdge Technologies, Inc. Stockholders’ Equity |
||||||||||||||||||||||||||||||||
Common stock |
Additional paid in
Capital |
Accumulated Other comprehensive loss |
Retained earnings |
Total |
Non-controlling interests |
Total stockholders’
equity |
||||||||||||||||||||||||||
Number |
Amount |
|||||||||||||||||||||||||||||||
Balance as of January 1, 2019 |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||||||||||
- |
||||||||||||||||||||||||||||||||
Issuance of Common Stock upon exercise of employee and non-employees stock-based awards |
|
* |
|
|
- |
|
- |
|
||||||||||||||||||||||||
Equity based compensation expenses to employees and non-employee consultants |
- |
- |
|
- |
- |
|
- |
|
||||||||||||||||||||||||
Consideration in common stock related to business combination |
|
* - |
|
- |
- |
|
- |
|
||||||||||||||||||||||||
Non-controlling interests related to business combination |
- |
- |
- |
- |
- |
- |
|
|
||||||||||||||||||||||||
Change to non-controlling interests |
- |
- |
|
- |
- |
|
( |
) |
( |
) | ||||||||||||||||||||||
Other comprehensive loss adjustments |
- |
- |
- |
( |
) |
- |
( |
) |
( |
) |
( |
) | ||||||||||||||||||||
Net income |
- |
- |
- |
- |
|
|
( |
) |
|
|||||||||||||||||||||||
Balance as of March 31, 2019 (unaudited) |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||||||||||
Issuance of Common Stock upon exercise of employee and non-employees stock-based awards |
|
- |
|
- |
- |
|
- |
|
||||||||||||||||||||||||
Equity based compensation expenses to employees and non-employee consultants |
- |
- |
|
- |
- |
|
- |
|
||||||||||||||||||||||||
Change to non-controlling interests |
- |
- |
( |
) |
- |
- |
( |
) |
( |
) |
( |
) | ||||||||||||||||||||
Other comprehensive income adjustments |
- |
- |
- |
|
- |
|
|
|
||||||||||||||||||||||||
Net income |
- |
- |
- |
- |
|
|
( |
) |
|
|||||||||||||||||||||||
Balance as of June 30, 2019 (unaudited) |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
$ |
|
$ |
|
$ |
|
* Represents an amount lower than $1
The accompanying notes are an integral part of the interim consolidated financial statements.
Six months ended
June 30, |
||||||||
2019 |
2018 |
|||||||
Unaudited |
||||||||
Cash flows provided by operating activities: |
||||||||
Net income |
$ |
|
$ |
|
||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation of property, plant and equipment |
|
|
||||||
Amortization of intangible assets |
|
|
||||||
Amortization of premium and accretion of discount on available-for-sale marketable securities |
( |
) |
|
|||||
Stock-based compensation |
|
|
||||||
Loss from disposal of assets |
|
|
||||||
Realized loss from sale of available-for-sale marketable securities |
|
|
||||||
Changes in assets and liabilities: |
||||||||
Inventories, net |
|
( |
) | |||||
Prepaid expenses and other assets |
( |
) |
( |
) | ||||
Trade receivables, net |
( |
) |
( |
) | ||||
Operating lease right-of-use assets and liabilities, net and effect of exchange rate differences |
|
( |
) | |||||
Deferred tax assets and liabilities, net |
( |
) |
( |
) | ||||
Trade payables, net |
|
|
||||||
Employees and payroll accruals |
|
|
||||||
Warranty obligations |
|
|
||||||
Deferred revenues |
|
|
||||||
Other liabilities |
|
|
||||||
Net cash provided by operating activities |
|
|
||||||
Cash flows from investing activities: |
||||||||
Business combination, net of cash acquired |
( |
) |
|
|||||
Purchase of property, plant and equipment |
( |
) |
( |
) | ||||
Withdrawal from bank deposits |
|
( |
) | |||||
Investment in restricted bank deposits |
( |
) |
( |
) | ||||
Investment in available-for-sale marketable securities |
( |
) |
( |
) | ||||
Proceeds from sales and maturities of available-for-sale marketable securities |
|
|
||||||
Net cash used in investing activities |
$ |
( |
) |
$ |
( |
) |
The accompanying notes are an integral part of the interim consolidated financial statements.
Six months ended
June 30, |
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2019 |
2018 |
|||||||
Unaudited |
||||||||
Cash flows from financing activities: |
||||||||
Repayment of bank loans, net |
$ |
( |
) |
$ |
|
|||
Proceeds from issuance of shares under stock purchase plan and upon exercise of stock-based awards |
|
|
||||||
Change in non-controlling interests |
( |
) |
|
|||||
Net cash provided by (used in) financing activities |
$ |
( |
) |
$ |
|
|||
Increase in cash and cash equivalents and restricted cash |
( |
) |
|
|||||
Cash, cash equivalents and restricted cash at the beginning of the period |
|
|
||||||
Effect of exchange rate differences on cash, cash equivalents and restricted cash |
|
|
||||||
Cash, cash equivalents and restricted cash at the end of the period |
$ |
|
$ |
|
||||
Supplemental disclosure of non-cash activities: |
||||||||
Operating lease, right of use assets |
$ |
|
$ |
|
NOTE 1:- |
GENERAL |
a. |
SolarEdge Technologies, Inc. (the “Company”) and its subsidiaries design, develop, and sell an intelligent inverter solution designed to maximize power generation at the individual photovoltaic (“PV”) module level while lowering the cost of energy produced by the solar PV system and providing comprehensive and advanced safety features. The Company’s products consist mainly of (i) power optimizers designed to maximize energy throughput from each and every module through constant tracking of Maximum Power Point individually per module, (ii) inverters which invert direct current (DC) from the PV module to alternating current (AC), (iii) a related cloud-based monitoring platform, that collects and processes information from the power optimizers and inverters of a solar PV system to enable customers and system owners as applicable, to monitor and manage the solar PV systems and (iv) a storage solution that is used to increase energy independence and maximize self-consumption for homeowners by utilizing a battery that is sold separately by third party manufacturers, to store and supply power as needed (the “StorEdge solution”). The StorEdge solution is designed to provide smart energy functions such as maximizing self-consumption, Time-of-Use programming for desired hours of the day, and home energy backup solutions. |
b. |
New accounting pronouncements not yet effective: |
In January 2017, the FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment". ASU 2017-04 was issued to simplify how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. The amendments in ASU 2017-04 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. The Company is in the process of evaluating the potential impact of this pronouncement.
NOTE 1:- |
GENERAL (Cont.) |
c. |
Recently issued and adopted pronouncements: |
d. |
Basis of Presentation: |
NOTE 1:- |
GENERAL (Cont.) |
e. |
Accounting for share-based compensation: |
f. |
Certain prior period amounts have been reclassified to conform to the current period presentation. |
NOTE 2:- |
BUSINESS COMBINATION |
NOTE 2:- |
BUSINESS COMBINATION (Cont.) |
Three months ended |
Six months ended |
|||||||
June 30, 2019 |
||||||||
Unaudited |
||||||||
Revenue |
$ |
|
$ |
|
||||
Net loss |
$ |
|
$ |
|
Components of Purchase Price: |
||||
Cash |
$ |
|
||
Less cash acquired |
( |
) | ||
Common stock |
|
|||
Total purchase price |
$ |
|
||
Allocation of Purchase Price: |
||||
Total net identifiable assets |
$ |
|
||
Total identifiable intangible assets, net and Goodwill (1) |
|
|||
Non-controlling interest |
$ |
( |
) | |
Total purchase price allocation (2) |
$ |
|
(1) |
|
(2) |
|
NOTE 2:- |
BUSINESS COMBINATION (Cont.) |
Three months ended June 30, |
Six months ended
June 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Unaudited |
Unaudited |
|||||||||||||||
Revenue |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
Net income |
$ |
|
$ |
|
$ |
|
$ |
|
NOTE 3:- |
INTANGIBLE ASSETS AND GOODWILL |
As of June 30,
2019 |
As of December 31, 2018 |
|||||||
(unaudited) |
||||||||
Intangible assets with finite lived: |
||||||||
Current technology |
$ |
|
$ |
|
||||
Customer relationships |
|
|
||||||
Trade names |
|
|
||||||
Patents |
|
|
||||||
Gross intangible assets |
|
|
||||||
Less - accumulated amortization |
( |
) |
( |
) | ||||
Total intangible assets, net |
|
|
||||||
Goodwill: |
||||||||
Goodwill from business combinations |
|
|
||||||
Foreign currency translation |
( |
) |
|
|||||
Goodwill |
|
|
||||||
Intangible assets with finite lived, net and goodwill resulted from SMRE Acquisition |
|
|
||||||
Total Intangible assets with finite lived, net and goodwill |
$ |
|
$ |
|
NOTE 3:- |
INTANGIBLE ASSETS AND GOODWILL (Cont.) |
NOTE 4:- |
INVENTORIES |
June 30,
2019 |
December 31,
2018 |
|||||||
(unaudited) |
||||||||
Raw materials |
$ |
|
$ |
|
||||
Work in process |
|
|
||||||
Finished goods |
|
|
||||||
$ |
|
$ |
|
NOTE 5:- |
WARRANTY OBLIGATIONS |
Six months ended June 30, |
||||||||
2019 |
2018 |
|||||||
(unaudited) |
||||||||
Balance, at beginning of period |
$ |
|
$ |
|
||||
Additions and adjustments to cost of revenues |
|
|
||||||
Usage and current warranty expenses |
( |
) |
( |
) | ||||
Balance at end of period |
|
|
||||||
Less current portion |
( |
) |
( |
) | ||||
Long term portion |
$ |
|
$ |
|
NOTE 6:- |
FAIR VALUE MEASUREMENTS |
Fair value measurements as of |
|||||||||||
June 30, |
December 31, |
||||||||||
Description |
Fair Value Hierarchy |
2019 |
2018 |
||||||||
(unaudited) |
|||||||||||
Measured at fair value on a recurring basis: |
|||||||||||
Assets: |
|||||||||||
Cash equivalents: |
|||||||||||
Money market mutual funds |
Level 1 |
$ |
|
$ |
|
||||||
Short-term marketable securities: |
|||||||||||
Corporate bonds |
Level 2 |
|
|
||||||||
Governmental bonds |
Level 2 |
|
|
||||||||
Long-term marketable securities: |
|||||||||||
Corporate bonds |
Level 2 |
|
|
||||||||
Liabilities |
|||||||||||
Long-term Earn-out provision |
Level 3 |
$ |
( |
) |
$ |
( |
) |
NOTE 7:- |
LEASES |
NOTE 7:- |
LEASES (cont.) |
Classification on the condensed consolidated Balance Sheet |
As of June 30, 2019 |
|||||
(unaudited) |
||||||
Assets |
||||||
Operating lease assets, net of lease incentive obligation |
Operating lease right-of-use assets |
$ |
|
|||
Finance lease assets |
Property, plant and equipment, net |
|
||||
Total lease assets |
$ |
|
||||
Liabilities |
||||||
Operating and finance leases short term |
Accrued expenses and other current liabilities |
$ |
|
|||
Operating leases long term |
Operating lease liabilities |
|
||||
Finance leases long term |
Other non-current liabilities |
|
||||
Total lease liabilities |
$ |
|
||||
Weighted average remaining lease term in years |
||||||
Operating leases |
|
|||||
Finance leases |
|
|||||
Weighted average annual discount rate |
||||||
Operating leases |
|
% | ||||
Finance leases |
|
% |
Three months ended |
Six months ended |
|||||||
June 30, 2019 |
||||||||
(unaudited) |
||||||||
Finance lease cost |
||||||||
Amortization of leased assets |
$ |
|
$ |
|
||||
Interest on lease liabilities |
|
|
||||||
Operating lease cost |
|
|
||||||
Total lease cost |
$ |
|
$ |
|
NOTE 7:- |
LEASES (cont.) |
Three months ended |
Six months ended |
|||||||
June 30, 2019 | ||||||||
(unaudited) |
||||||||
Cash paid for amounts included in measurement of lease liabilities |
||||||||
Operating cash flows for operating leases |
$ |
|
$ |
|
Operating Lease |
Finance Leases |
|||||||
2019 |
$ |
|
$ |
|
||||
2020 |
|
|
||||||
2021 |
|
|
||||||
2022 |
|
|
||||||
2023 |
|
|
||||||
Thereafter |
|
|
||||||
Total lease payments |
|
|
||||||
Less: amount of lease payments representing interest |
( |
) |
( |
) | ||||
Present value of future lease payments |
|
|
||||||
Less: current obligations under leases |
( |
) |
( |
) | ||||
Long-term lease obligations |
$ |
|
$ |
|
NOTE 8:- |
COMMITMENTS AND CONTINGENT LIABILITIES |
a. |
Guarantees: |
NOTE 8:- |
COMMITMENTS AND CONTINGENT LIABILITIES (Cont.) |
c. |
Legal claims: |
NOTE 9:- |
STOCK CAPITAL |
a. |
Common Stock: |
Number of shares |
||||||||||||||||
Authorized |
Issued and outstanding |
|||||||||||||||
June 30, 2019 |
December 31, 2018 |
June 30, 2019 |
December 31, 2018 |
|||||||||||||
(unaudited) |
(unaudited) |
|||||||||||||||
Stock of $ |
||||||||||||||||
Common stock |
|
|
|
|
b. |
Stock Incentive plans: |
NOTE 9:- |
STOCK CAPITAL (Cont.) |
c. |
Options granted to employees and directors: |
Weighted |
||||||||||||||||
average |
||||||||||||||||
Weighted |
remaining |
|||||||||||||||
Number |
average |
contractual |
Aggregate |
|||||||||||||
of |
exercise |
term |
intrinsic |
|||||||||||||
Options |
price |
in years |
Value |
|||||||||||||
Outstanding as of December 31, 2018 |
|
|
|
|
||||||||||||
Granted |
|
|
||||||||||||||
Exercised |
( |
) |
|
|||||||||||||
Forfeited and expired |
( |
) |
|
|||||||||||||
Outstanding as of June 30, 2019 |
|
|
|
|
||||||||||||
Vested and expected to vest as of June 30, 2019 |
|
|
|
|
||||||||||||
Exercisable as of June 30, 2019 |
|
|
|
|
Number of
RSUs |
Weighted average
grant date fair value |
|||||||
Unvested as of December 31, 2018 |
|
|
||||||
Granted |
|
|
||||||
Vested |
( |
) |
|
|||||
Forfeited |
( |
) |
|
|||||
Unvested as of June 30, 2019 (unaudited) |
|
|
NOTE 9:- |
STOCK CAPITAL (Cont.) |
e. |
Options and RSUs issued to non-employee consultants: |
Outstanding |
Exercisable |
|||||||||
as of |
as of |
|||||||||
Issuance |
June 30, |
Exercise |
June 30, |
Options exercisable | ||||||
Date |
2019 |
price |
2019 |
through | ||||||
2014 |
|
$ |
|
October 29, 2024 | ||||||
2015 |
|
$ |
|
|||||||
2016 |
|
$ |
|
September 21, 2026 | ||||||
2017 |
|
$ |
|
March 15, 2027 | ||||||
2018 |
|
$ |
|
|||||||
2019 |
|
$ |
|
|||||||
|
|
f. |
Employee Stock Purchase Plan (“ESPP”): |
NOTE 9:- |
STOCK CAPITAL (Cont.) |
g. |
Stock-based compensation expense for employees and non-employee consultants: |
Three months ended June 30, |
Six months ended
June 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Unaudited |
Unaudited |
|||||||||||||||
Cost of revenues |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
Research and development |
|
|
|
|
||||||||||||
Selling and marketing |
|
|
|
|
||||||||||||
General and administrative |
|
|
|
|
||||||||||||
Total stock-based compensation expense |
$ |
|
$ |
|
$ |
|
$ |
|
NOTE 10:- |
BASIC AND DILUTED NET EARNINGS PER SHARE |
NOTE 10:- |
BASIC AND DILUTED NET EARNINGS PER SHARE (Cont.) |
Three months ended June 30, |
Six months ended
June 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Unaudited |
Unaudited |
|||||||||||||||
Basic EPS: |
||||||||||||||||
Numerator: |
||||||||||||||||
Net income |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
Net loss attributable to Non-controlling interests |
|
|
|
|
||||||||||||
Net income attributable to SolarEdge Technologies, Inc. |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
Denominator: |
||||||||||||||||
Shares used in computing net earnings per share of common stock, basic |
|
|
|
|
||||||||||||
Diluted EPS: |
||||||||||||||||
Numerator: |
||||||||||||||||
Net income |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
Net loss attributable to Non-controlling interests |
|
|
|
|
||||||||||||
Undistributed earnings reallocated to non-vested stockholders |
( |
) |
|
( |
) |
|
||||||||||
Net income attributable to SolarEdge Technologies, Inc. |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
Denominator: |
||||||||||||||||
Shares used in computing net earnings per share of common stock, basic |
|
|
|
|
||||||||||||
Weighted average effect of dilutive securities: |
||||||||||||||||
Non-vested PSU’S |
( |
) |
|
( |
) |
|
||||||||||
Effect of stock-based awards |
|
|
|
|
||||||||||||
Shares used in computing net earnings per share of common stock, diluted |
|
|
|
|
NOTE 11:- |
INCOME TAXES |
a. |
Taxes on income are comprised as follows: |
Three months ended
June 30, |
Six months ended
June 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
(unaudited) |
(unaudited) |
|||||||||||||||
Current year taxes |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
Deferred tax income net, and others |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
Taxes on income |
$ |
|
$ |
|
$ |
|
$ |
|
b. |
Deferred income taxes: |
As of June 30,
2019 |
As of December 31, 2018 |
|||||||
(Unaudited) |
||||||||
Deferred tax assets, net: |
||||||||
Research and Development carryforward expenses |
$ |
|
$ |
|
||||
Carryforward tax losses |
|
|
||||||
Stock based compensation expenses |
|
|
||||||
Allowance and other reserves |
|
|
||||||
Total deferred tax assets |
$ |
|
$ |
|
||||
Deferred tax liabilities, net: |
||||||||
Intangible assets |
( |
) |
( |
) | ||||
Total deferred tax liabilities |
$ |
( |
) |
$ |
( |
) | ||
Recorded as: |
||||||||
Deferred tax assets, net |
$ |
|
$ |
|
||||
Deferred tax liabilities, net |
( |
) |
( |
) | ||||
Net deferred tax assets |
$ |
|
$ |
|
NOTE 11:- |
INCOME TAXES (Cont.) |
c. |
Uncertain tax positions: |
As of June 30,
2019 |
As of December 31,
2018 |
|||||||
(Unaudited) |
||||||||
Balance at January 1, |
$ |
|
$ |
|
||||
Increases related to current year tax positions |
|
|
||||||
Decreases related to prior year tax positions |
|
( |
) | |||||
$ |
|
$ |
|
NOTE 12:- |
CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS |
a. |
For the three months period ended June 30, 2019 (unaudited) and 2018 (unaudited), the Company had one major customer that accounted for |
b. |
As of June 30, 2019 (unaudited) and as of December 31, 2018, two customers accounted for approximately |
NOTE 13:- |
SEGMENT INFORMATION |
As of June 30, |
As of December 31, |
|||||||
2019 |
2018 |
|||||||
(Unaudited) |
||||||||
Solar |
$ |
|
$ |
|
||||
Non-Solar |
|
|
||||||
Adjustments |
( |
) |
( |
) | ||||
Total assets |
$ |
|
$ |
|
NOTE 14:- | SUBSEQUENT EVENT |
• |
our limited history of profitability, which may not continue in the future;
|
• |
our limited operating history, which makes it difficult to predict future results;
|
• |
future demand for solar energy solutions;
|
• |
changes to net metering policies or the reduction, elimination or expiration of government subsidies and economic incentives for on‑grid solar energy applications;
|
• |
changes in the U.S. trade environment, including the recent imposition of import tariffs;
|
• |
federal, state and local regulations governing the electric utility industry with respect to solar energy;
|
• |
the retail price of electricity derived from the utility grid or alternative energy sources;
|
• |
interest rates and supply of capital in the global financial markets in general and in the solar market specifically;
|
• |
competition, including introductions of power optimizer, inverter and solar photovoltaic (“PV”) system monitoring products by our competitors;
|
• |
developments in alternative technologies or improvements in distributed solar energy generation;
|
• |
historic cyclicality of the solar industry and periodic downturns;
|
• |
defects or performance problems in our products;
|
• |
our ability to forecast demand for our products accurately and to match production with demand;
|
• |
our dependence on ocean transportation to deliver our products in a cost effective manner;
|
• |
our dependence upon a small number of outside contract manufacturers and suppliers;
|
• |
capacity constraints, delivery schedules, manufacturing yields and costs of our contract manufacturers and availability of components;
|
• |
delays, disruptions and quality control problems in manufacturing;
|
• |
shortages, delays, price changes or cessation of operations or production affecting our suppliers of key components;
|
• |
business practices and regulatory compliance of our raw material suppliers;
|
• |
performance of distributors and large installers in selling our products;
|
• |
our customers’ financial stability, creditworthiness and debt leverage ratio;
|
• |
our ability to retain key personnel and attract additional qualified personnel;
|
• |
our ability to effectively design, launch, market and sell new generations of our products and services;
|
• |
our ability to maintain our brand and to protect and defend our intellectual property;
|
• |
our ability to retain, and events affecting, our major customers;
|
• |
our ability to manage effectively the growth of our organization and expansion into new markets;
|
• |
our ability to integrate acquired businesses;
|
• |
fluctuations in global currency exchange rates;
|
• |
unrest, terrorism or armed conflict in Israel;
|
• |
general economic conditions in our domestic and international markets;
|
• |
consolidation in the solar industry among our customers and distributors; and
|
• |
the other factors set forth under “Item 1A. Risk Factors” in “Part II-OTHER INFORMATION” section of this report.
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
Inverters shipped
|
160,117
|
113,767
|
290,789
|
213,413
|
||||||||||||
Power optimizers shipped
|
3,730,519
|
2,737,524
|
6,759,621
|
5,213,068
|
||||||||||||
Megawatts shipped (1)
|
1,335
|
985
|
2,479
|
1,785
|
(1) |
Calculated based on the aggregate nameplate capacity of inverters shipped during the applicable period. Nameplate capacity is the maximum rated power output capacity of an inverter as specified by the manufacturer.
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
(In thousands)
|
(In thousands)
|
|||||||||||||||
Revenues
|
$
|
325,010
|
$
|
227,118
|
$
|
596,881
|
$
|
436,989
|
||||||||
Cost of revenues
|
214,340
|
145,172
|
400,101
|
275,446
|
||||||||||||
Gross profit
|
110,670
|
81,946
|
196,780
|
161,543
|
||||||||||||
Operating expenses:
|
||||||||||||||||
Research and development
|
29,505
|
19,551
|
55,704
|
37,426
|
||||||||||||
Sales and marketing
|
22,127
|
15,954
|
42,299
|
32,159
|
||||||||||||
General and administrative
|
13,685
|
5,776
|
25,376
|
10,529
|
||||||||||||
Total operating expenses
|
65,317
|
41,281
|
123,379
|
80,114
|
||||||||||||
Operating income
|
45,353
|
40,665
|
73,401
|
81,429
|
||||||||||||
Financial expenses (income), net
|
(773
|
)
|
2,480
|
5,378
|
1,896
|
|||||||||||
Income before taxes on income
|
46,126
|
38,185
|
68,023
|
79,533
|
||||||||||||
Taxes on income
|
13,213
|
3,617
|
17,135
|
9,279
|
||||||||||||
Net income
|
$
|
32,913
|
$
|
34,568
|
$
|
50,888
|
$
|
70,254
|
||||||||
Net loss attributable to non-controlling interests
|
215
|
-
|
1,256
|
-
|
||||||||||||
Net income attributable to SolarEdge Technologies, Inc.
|
$
|
33,128
|
$
|
34,568
|
$
|
52,144
|
$
|
70,254
|
Three Months Ended
June 30,
|
Three Months Ended
June 30,
2018 to 2019
|
|||||||||||||||
2019
|
2018
|
Change
|
||||||||||||||
(in thousands)
|
||||||||||||||||
Revenues
|
$
|
325,010
|
$
|
227,118
|
$
|
97,892
|
43.1
|
%
|
Three Months Ended
June 30,
|
Three Months Ended
June 30,
2018 to 2019
|
|||||||||||||||
2019
|
2018
|
Change
|
||||||||||||||
(in thousands)
|
||||||||||||||||
Cost of revenues
|
$
|
214,340
|
$
|
145,172
|
$
|
69,168
|
47.6
|
%
|
||||||||
Gross profit
|
$
|
110,670
|
$
|
81,946
|
$
|
28,724
|
35.1
|
%
|
• |
an increase in the volume of products sold;
|
• |
inclusion of variable costs related to the assembly of UPS products and the manufacturing of Kokam and SMRE products in the aggregate amount of $11.3 million, which were not included in the cost of goods sold for the three months
ended June 30, 2018, as those businesses were acquired after July 2018;
|
• |
increased warranty expenses and warranty accruals of $9.8 million associated primarily with the rapid increase of products in our install base;
|
• |
increased shipment and logistics costs of $7.0 million attributed to the growth in volume of products shipped and new customs tariff rules in the U.S.;
|
• |
increased personnel-related costs of $5.2 million connected to the expansion of our operations and support headcount which is growing in parallel to our growing install base worldwide and in connection with entering the UPS, battery
and integrated powertrain technology businesses; and
|
• |
increase of amortization of intangible assets and cost of product adjustment of $3.3 million related to the Gamatronic Acquisition, the Kokam Acquisition and the SMRE Acquisition.
|
• |
lower gross profit from our UPS, battery business and SMRE products and underutilization of production facilities in Korea;
|
• |
increased warranty and support services expenses and accruals due to the increase in our install base;
|
• |
increased shipment and logistics costs resulted from our expedited growth; and
|
• |
amortization of intangible assets and cost of product adjustment related to the Gamatronic Acquisition, the Kokam Acquisition and the SMRE Acquisition.
|
Three Months Ended
June 30,
|
Three Months Ended
June 30,
2018 to 2019
|
|||||||||||||||
2019
|
2018
|
Change
|
||||||||||||||
(in thousands)
|
||||||||||||||||
Research and development
|
$
|
29,505
|
$
|
19,551
|
$
|
9,954
|
50.9
|
%
|
• |
an increase in personnel-related costs of $7.8 million resulting from an increase in our research and development headcount as well as salary expenses associated with employee equity-based compensation. The increase in headcount reflects
the inclusion of personnel costs from acquired businesses as well as our continuing investment in enhancements of existing products as well as research and development expenses associated with bringing new products to the market;
|
• |
increased expenses related to consultants and sub‑contractors in an amount of $1.2 million;
|
• |
increased expenses related to material consumption costs in an amount of $0.5 million;
|
• |
increased depreciation expenses related to lab equipment in an amount of $0.4 million; and
|
• |
increased expenses related to other overhead cost and other expenses in an amount of $0.1 million.
|
Three Months Ended
June 30,
|
Three Months Ended
June 30,
2018 to 2019
|
|||||||||||||||
2019
|
2018
|
Change
|
||||||||||||||
(in thousands)
|
||||||||||||||||
Sales and marketing
|
$
|
22,127
|
$
|
15,954
|
$
|
6,173
|
38.7
|
%
|
• |
an increase in personnel-related costs of $4.6 million as a result of the inclusion of personnel costs from acquired businesses and an increase in headcount supporting our growth in the U.S., Europe, and Asia, as well as salary
expenses associated with employee equity-based compensation;
|
• |
expenses related to marketing activities that increased by $0.8 million;
|
• |
expenses related to other overhead costs and travel costs that increased by $0.6 million; and
|
• |
expenses related to external consultants and sub-contractors and depreciation expenses that increased by $0.2 million.
|
Three Months Ended
June 30,
|
Three Months Ended
June 30,
2018 to 2019
|
|||||||||||||||
2019
|
2018
|
Change
|
||||||||||||||
(in thousands)
|
||||||||||||||||
General and administrative
|
$
|
13,685
|
$
|
5,776
|
$
|
7,909
|
136.9
|
%
|
• |
an increase in personnel-related costs of $4.9 million related to (i) increased headcount resulting from the acquisitions of Gamatronic, Kokam and SMRE and the expansions of our legal, finance, human resources and information
technology departmentsy; and (ii) increased expenses related to equity-based compensation and changes in management compensation;
|
• |
an increase of $1.7 million in external consultants and sub-contractor expenses, mainly due to legal proceedings and various patent protection matters in which we are involved;
|
• |
an increase in costs related to doubtful debts of $0.7 million; and
|
• |
expenses related to other overhead costs, depreciation, public company related expenses and travel expenses, all of which increased by $0.6 million.
|
Three Months Ended
June 30,
|
Three Months Ended
June 30,
2018 to 2019
|
|||||||||||||||
2019
|
2018
|
Change
|
||||||||||||||
(in thousands)
|
||||||||||||||||
Financial expenses (income), net
|
$
|
(773
|
)
|
$
|
2,480
|
$
|
(3,253
|
)
|
N/A
|
• |
a decrease of $6.3 million in foreign exchange expenses between the Euro, the New Israeli Shekel, the Australian Dollar and the South Korean Won against the U.S. Dollar; and
|
• |
an increase of $0.2 million in interest income and accretion (amortization) of discount (premium) on marketable securities.
|
• |
a decrease of $2.0 million in income related to hedging transactions;
|
• |
an increase of $0.6 million in foreign exchange fluctuations of lease agreements’ liabilities as part of the adoption of Accounting Standards Update No. 2016-02, (Topic 842) "Leases";
|
• |
an increase of $0.3 million in interest expenses related to advance payments received for performance obligations that extend for a period greater than one year, as part of the new revenue recognition standard adoption; and
|
• |
an increase of $0.3 million in bank charges and other financial expenses.
|
Three Months Ended
June 30,
|
Three Months Ended
June 30,
2018 to 2019
|
|||||||||||||||
2019
|
2018
|
Change
|
||||||||||||||
(in thousands)
|
||||||||||||||||
Taxes on income
|
$
|
13,213
|
$
|
3,617
|
$
|
9,596
|
265.3
|
%
|
• |
an increase of $5.2 million in current tax expenses in Israel, mainly attributed to the termination of the two year tax exemption in Israel which ended on December 31, 2018;
|
• |
an increase of $2.6 million in current tax in the U.S. mainly attributed to an increase in Global Intangible Low Taxed Income (“GILTI”) tax;
|
• |
a decrease of $1.7 million deferred tax assets in Israel and the U.S.; and
|
• |
an increase of $1.1 million in current and prior year tax expenses in other jurisdictions.
|
Three Months Ended
June 30,
|
Three Months Ended
June 30,
2018 to 2019
|
|||||||||||||||
2019
|
2018
|
Change
|
||||||||||||||
(in thousands)
|
||||||||||||||||
Net income
|
$
|
32,913
|
$
|
34,568
|
$
|
(1,655
|
)
|
(4.8
|
)%
|
Six Months Ended
June 30,
|
Six Months Ended
June 30,
2018 to 2019
|
|||||||||||||||
2019
|
2018
|
Change
|
||||||||||||||
(In thousands)
|
||||||||||||||||
Revenues
|
$
|
596,881
|
$
|
436,989
|
$
|
159,892
|
36.6
|
%
|
Six Months Ended
June 30,
|
Six Months Ended
June 30,
2018 to 2019
|
|||||||||||||||
2019
|
2018
|
Change
|
||||||||||||||
(In thousands)
|
||||||||||||||||
Cost of revenues
|
$
|
400,101
|
$
|
275,446
|
$
|
124,655
|
45.3
|
%
|
||||||||
Gross profit
|
$
|
196,780
|
$
|
161,543
|
$
|
35,237
|
21.8
|
%
|
• |
inclusion of variable costs related to the assembly of UPS products and the manufacturing of Kokam and SMRE products in the aggregate amount of $25.6 million, which were not included in the cost of goods sold for the six months ended
June 30, 2018 as those businesses were acquired after July 2018;
|
• |
an increase in the volume of products sold;
|
• |
increased warranty expenses and warranty accruals of $18.7 million associated primarily with the rapid increase in our install base;
|
• |
increased personnel-related costs of $9.5 million related to the expansion of our operations and support headcount which is growing in parallel to our growing install base worldwide and in connection with entering the UPS, battery
and integrated powertrain technology businesses;
|
• |
increased shipment and logistic costs of $8.9 million attributed, in part, to the growth in volumes shipped and new customs tariff rules in the U.S.; and
|
• |
increased of amortization of intangible assets and cost of product adjustment of $5.0 million related to the Gamatronic Acquisition, the Kokam Acquisition and the SMRE Acquisition.
|
• |
lower gross profit from our UPS, battery business and SMRE products and underutilization of production facilities;
|
• |
increased warranty and support services expenses and accruals due to the increase in our install base; and
|
• |
amortization of intangible assets and cost of product adjustment related to the Gamatronic Acquisition, the Kokam Acquisition and the SMRE Acquisition.
|
Six Months Ended
June 30,
|
Six Months Ended
June 30,
2018 to 2019
|
|||||||||||||||
2019
|
2018
|
Change
|
||||||||||||||
(In thousands)
|
||||||||||||||||
Research and development
|
$
|
55,704
|
$
|
37,426
|
$
|
18,278
|
48.8
|
%
|
• |
an increase in personnel-related costs of $13.9 million resulting from an increase in our research and development headcount as well as salary expenses associated with employee equity compensation. The increase in headcount reflects
the inclusion of personnel costs from acquired businesses in addition to our continuing investment in enhancements of existing products and research and development expenses associated with bringing new products to the market;
|
• |
increased expenses related to consultants and sub‑contractors in an amount of $2.2 million;
|
• |
increased expenses related to material consumption costs in an amount of $1.0 million;
|
• |
increased depreciation expenses related to lab equipment in an amount of $0.7 million; and
|
• |
increased expenses related to other overhead cost in an amount of $0.5 million.
|
Six Months Ended
June 30,
|
Six Months Ended
June 30,
2018 to 2019
|
|||||||||||||||
2019
|
2018
|
Change
|
||||||||||||||
(In thousands)
|
||||||||||||||||
Sales and marketing
|
$
|
42,299
|
$
|
32,159
|
$
|
10,140
|
31.5
|
%
|
• |
an increase in personnel-related costs of $7.0 million as a result of the inclusion of personnel costs from acquired businesses as well as from an increase in headcount supporting our growth in the U.S., Europe and Asia, as well as
salary expenses associated with employee equity compensation;
|
• |
increased expenses related to marketing activity in an amount of $1.0 million;
|
• |
increased expenses related to other overhead costs and travel expenses in an amount of $1.0 million;
|
• |
increased expenses related to amortization and depreciation expenses in an amount of $1.0 million; and
|
• |
increased expenses related to external consultants and sub-contractor and other expenses in an amount of $0.1 million.
|
Six Months Ended
June 30,
|
Six Months Ended
June 30,
2018 to 2019
|
|||||||||||||||
2019
|
2018
|
Change
|
||||||||||||||
(In thousands)
|
||||||||||||||||
General and administrative
|
$
|
25,376
|
$
|
10,529
|
$
|
14,847
|
141.0
|
%
|
• |
an increase in personnel costs of $8.5 million related to (i) increased headcount resulting from the acquisitions of Gamatronic, Kokam and SMRE and the expansions of our legal, finance, human resources and information technology
departmentsy; and (ii) increased expenses related to equity-based compensation and changes in management compensation;
|
• |
increased expenses related to consultants and sub‑contractors in an amount of $4.3 million due to legal proceedings in which we are involved and other legal expenses in relation to SMRE Acquisition costs;
|
• |
increased expenses related to other overhead costs and other expenses in an amount of $0.9 million;
|
• |
increased expenses related to doubtful debt in an amount of $0.6 million; and
|
• |
increased expenses related to depreciation expenses and public company related expenses in an amount of $0.5 million.
|
Six Months Ended
June 30,
|
Six Months Ended
June 30,
2018 to 2019
|
|||||||||||||||
2019
|
2018
|
Change
|
||||||||||||||
(In thousands)
|
||||||||||||||||
Financial expenses (income), net
|
$
|
5,378
|
$
|
1,896
|
$
|
3,482
|
183.6
|
%
|
• |
an increase of $1.5 million in foreign exchange fluctuations of lease agreements’ liabilities as part of the adoption of Accounting Standards Update No. 2016-02, (Topic 842) "Leases";
|
• |
an increase of $1.1 million in interest expenses related to advance payments received for performance obligations that extend for a period greater than one year, as part of the new revenue recognition and lease accounting standards
adoption;
|
• |
a decrease of $ 0.6 million in finance income related to hedging transactions;
|
• |
an increase of $0.5 million in foreign exchange fluctuations, mainly between the Euro, the New Israeli Shekel, the Australian Dollar and the South Korean Won against the U.S. Dollar; and
|
• |
an increase of $0.3 million in other financial expenses and bank charges.
|
Six Months Ended
June 30,
|
Six Months Ended
June 30,
2018 to 2019
|
|||||||||||||||
2019
|
2018
|
Change
|
||||||||||||||
(In thousands)
|
||||||||||||||||
Taxes on income
|
$
|
17,135
|
$
|
9,279
|
$
|
7,856
|
84.7
|
%
|
• |
an increase of $5.1 million in current tax expenses in Israel mainly attributed to the termination of the two year tax exemption in Israel which ended on December 31, 2018;
|
• |
a decrease of $3.4 million in deferred tax assets in Israel;
|
• |
an increase of $1.1 million in current and prior year tax expenses in other jurisdictions; and
|
• |
an increase of $0.6 million in current tax in the U.S.
|
• |
an increase of $1.9 million in deferred tax assets, net (presented as tax benefit) in other jurisdictions, mainly related to deferred tax assets as a result of the Kokam and SMRE acquisitions; and
|
• |
an increase of $0.4 million in deferred tax assets in the U.S.
|
Six Months Ended
June 30,
|
Six Months Ended
June 30,
2018 to 2019
|
|||||||||||||||
2019
|
2018
|
Change
|
||||||||||||||
(In thousands)
|
||||||||||||||||
Net income
|
$
|
50,888
|
$
|
70,254
|
$
|
(19,366
|
)
|
(27.6
|
)%
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Net cash provided by operating activities
|
$
|
50,784
|
$
|
43,891
|
$
|
107,234
|
$
|
107,870
|
||||||||
Net cash used in investing activities
|
$
|
(35,176
|
)
|
$
|
(61,971
|
)
|
$
|
(52,221
|
)
|
$
|
(64,482
|
)
|
||||
Net cash provided by (used in) financing activities
|
$
|
(64,755
|
)
|
$
|
2,986
|
$
|
(67,385
|
)
|
$
|
7,591
|
||||||
Increase (decrease) in cash, cash equivalents and restricted cash
|
$
|
(49,147
|
)
|
$
|
(15,094
|
)
|
$
|
(12,372
|
)
|
$
|
50,979
|
Exhibit No.
|
Description
|
Incorporation by Reference
(where a report is indicated below, that
document has been previously filed with
the SEC and the applicable exhibit is
incorporated by reference thereto)
|
Filed with this report.
|
||
Filed with this report.
|
||
Filed with this report.
|
||
Filed with this report.
|
||
101.INS
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
|
Filed with this report.
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
Filed with this report.
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
Filed with this report.
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
Filed with this report.
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
Filed with this report.
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
Filed with this report.
|
104
|
The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 formatted in Inline XBRL
|
Included in Exhibit 101.
|
Date: August 8, 2019
|
SOLAREDGE TECHNOLOGIES, INC.
/s/ Guy Sella
|
|
Guy Sella
Chief Executive Officer and Chairman of the Board
(Principal Executive Officer)
|
||
Date: August 8, 2019
|
/s/ Ronen Faier
|
|
|
Ronen Faier
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
/s/ Guy Sella | |
Guy Sella
|
|
Chief Executive Officer and Chairman of the Board
(Principal Executive Officer)
|
/s/ Ronen Faier | |
Ronen Faier
|
|
Chief Financial Officer
(Principal Financial Officer)
|
/s/ Guy Sella |
|
Guy Sella
|
|
Chief Executive Officer and Chairman of the Board
|
/s/ Ronen Faier | |
Ronen Faier
|
|
Chief Financial Officer
|
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, authorized shares | 125,000,000 | 125,000,000 |
Common stock, issued shares | 47,967,425 | 46,052,802 |
Common stock, outstanding shares | 47,967,425 | 46,052,802 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 32,913 | $ 34,568 | $ 50,888 | $ 70,254 |
Available-for-sale securities: | ||||
Changes in unrealized gains (losses), net of tax | 370 | (6) | 855 | (516) |
Reclassification adjustments for losses included in net income | (29) | 91 | ||
Net change | 341 | (6) | 946 | (516) |
Foreign currency translation adjustments, net | (16) | 3 | (1,317) | (11) |
Total other comprehensive income (loss) | 325 | (3) | (371) | (527) |
Comprehensive income | 33,238 | 34,565 | 50,517 | 69,727 |
Comprehensive income (loss) attributable to non-controlling interests | 545 | (304) | ||
Comprehensive income attributable to SolarEdge Technologies, Inc. | $ 32,693 | $ 34,565 | $ 50,821 | $ 69,727 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Cash flows provided by operating activities: | ||
Net income | $ 50,888 | $ 70,254 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation of property, plant and equipment | 8,147 | 4,981 |
Amortization of intangible assets | 4,895 | 72 |
Amortization of premium and accretion of discount on available-for-sale marketable securities | (12) | 1,014 |
Stock-based compensation | 21,076 | 13,977 |
Loss from disposal of assets | 552 | 64 |
Realized loss from sale of available-for-sale marketable securities | 91 | |
Changes in assets and liabilities: | ||
Inventories, net | 1,723 | (18,952) |
Prepaid expenses and other assets | (2,574) | (2,135) |
Trade receivables, net | (56,562) | (9,203) |
Operating lease right-of-use assets and liabilities, net and effect of exchange rate differences | 1,466 | (148) |
Deferred tax assets and liabilities, net | (1,960) | (3,018) |
Trade payables, net | 5,493 | 12,143 |
Employees and payroll accruals | 5,151 | 1,028 |
Warranty obligations | 28,860 | 18,479 |
Deferred revenues | 11,764 | 13,120 |
Other liabilities | 28,236 | 6,194 |
Net cash provided by operating activities | 107,234 | 107,870 |
Cash flows from investing activities: | ||
Business combination, net of cash acquired | (38,435) | |
Purchase of property, plant and equipment | (22,244) | (21,385) |
Withdrawal from bank deposits | 3,909 | (342) |
Investment in restricted bank deposits | (203) | (191) |
Investment in available-for-sale marketable securities | (63,655) | (89,389) |
Proceeds from sales and maturities of available-for-sale marketable securities | 68,407 | 46,825 |
Net cash used in investing activities | (52,221) | (64,482) |
Cash flows from financing activities: | ||
Repayment of bank loans, net | (4,675) | |
Proceeds from issuance of shares under stock purchase plan and upon exercise of stock-based awards | 3,764 | 7,591 |
Change in non-controlling interests | (66,474) | |
Net cash provided by (used in) financing activities | (67,385) | 7,591 |
Increase in cash and cash equivalents and restricted cash | (12,372) | 50,979 |
Cash, cash equivalents and restricted cash at the beginning of the period | 187,764 | 163,163 |
Effect of exchange rate differences on cash, cash equivalents and restricted cash | 1,183 | 398 |
Cash, cash equivalents and restricted cash at the end of the period | 176,575 | 214,540 |
Supplemental disclosure of non-cash activities: | ||
Operating lease, right of use assets | $ 38,374 |
GENERAL |
6 Months Ended | ||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||
GENERAL |
The Company and its subsidiaries sell their products worldwide through large distributors and electrical equipment wholesalers to smaller solar installers, as well as directly to large solar installers and Engineering, Procurement and Construction firms (“EPCs”).
In July and October 2018, the Company completed the acquisitions ("Gamatronic Acquisition") of substantially all of the assets and activities of Gamatronic Electronic Industries Ltd. ("Gamatronic IL") and all of the outstanding shares of its wholly owned subsidiary Gamatronic (UK) Limited (“Gamatronic UK”), respectively. Both companies ("UPS Division") are providers and manufacturers of Uninterruptible Power Supplies ("UPS") devices.
On October 17, 2018, the Company completed the acquisition of 74.5% of the outstanding common shares and voting rights of Kokam Co., Ltd. (“Kokam”), a Korean company whose shares are traded on the Korean OTC market, a provider of Lithium-ion cells, batteries and energy storage solutions. From October 17, 2018 and through June 30, 2019, the Company increased its shareholdings of Kokam to 94.2%.
On January 24, 2019, the Company completed the acquisition of 56.8% of the outstanding common shares and voting rights of S.M.R.E S.p.A (“SMRE”), an Italian company whose shares were traded on the Italian AIM, a provider of innovative integrated powertrain technology and electronics for electric vehicles. Between January 24, 2019 and June 30, 2019, the Company increased its shareholdings of SMRE to 99.4% (see note 2).
In January 2017, the FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment". ASU 2017-04 was issued to simplify how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. The amendments in ASU 2017-04 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. The Company is in the process of evaluating the potential impact of this pronouncement. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 amends the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in a more timely recognition of losses. The Company will adopt Topic 326 effective January 1, 2020. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated balance sheets, statements of operations and cash flows.
In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2016-02 (Topic 842) "Leases". Topic 842 supersedes the lease requirements in Accounting Standards Codification (ASC) Topic 840, "Leases". Under Topic 842, lessees are required to recognize assets and liabilities on the balance sheet for most leases and provide enhanced disclosures. ASU No. 2016-02 is effective for interim and annual reporting periods beginning after December 15, 2018. In July 2018, the FASB issued amendments in ASU 2018-11, which provide a transition election to not restate comparative periods for the effects of applying the new standard. This transition election permits entities to change the date of initial application to the beginning of the earliest comparative period presented, or retrospectively at the beginning of the period of adoption through a cumulative-effect adjustment. The Company has elected to apply the standard retrospectively at the beginning of the period of adoption through a cumulative-effect adjustment. The Company has also elected certain relief options offered in ASU 2016-02 including certain available transitional practical expedients. The Company adopted Topic 842 effective January 1, 2019. The interim consolidated financial statements for the six months ended June 30, 2019 are presented under the new standard, while the comparative periods are not adjusted and continue to be reported in accordance with the Company’s historical accounting policy (See note 7).
The accompanying unaudited interim consolidated interim financial statements have been prepared in accordance with Article 10 of Regulation S-X, “Interim Financial Statements” and the rules and regulations for Form 10-Q of the Securities and Exchange Commission (the “SEC”). Pursuant to those rules and regulations, the Company has condensed or omitted certain information and disclosures in footnotes that it normally includes in its annual consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).
In management’s opinion, the Company has made all adjustments (consisting only of normal, recurring adjustments, except as otherwise indicated) necessary to fairly present its condensed consolidated financial position, results of operations, and cash flows. The Company’s interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year.
The significant accounting policies applied in the annual consolidated financial statements of the Company as of December 31, 2018, contained in the Company’s Annual Report on Form 10-K filed with the SEC on February 28, 2019, have been applied consistently in these unaudited interim consolidated financial statements, except for the adoption of ASU No. 2016-02, “Leases (Topic 842) (see Note 1c).
The Company depends on two contract manufacturers and several limited or single source component suppliers, and is in the process of opening an additional site with one of those contract manufacturers. Reliance on these vendors makes the Company vulnerable to possible capacity constraints and reduced control over component availability, delivery schedules, manufacturing yields, and costs.
As of June 30, 2019 (unaudited) and December 31, 2018, two and three vendors collectively accounted for 57.2% and 58.8% of the Company’s total trade payables, respectively.
The Company has the right to offset its trade payables to one of its contract manufacturers against vendor non-trade receivables. As of June 30, 2019 (unaudited), a total of $944 of these receivables met the criteria for net recognition and were off set against the corresponding trade payable balances for this contract manufacturer in the accompanying condensed consolidated balance sheets.
Some of the RSUs granted are subject to certain performance criteria’s (“PSUs”): accordingly, compensation expense for PSUs are recognized when it becomes probable that the related performance conditions have been satisfied.
|
BUSINESS COMBINATION |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BUSINESS COMBINATION |
S.M.R.E
On January 24, 2019, the Company completed the acquisition of 56.8% of the outstanding common shares and voting rights of SMRE, a provider of innovative integrated powertrain technology and electronics for electric vehicles for $73,036, net of cash acquired, out of which $42,240 was paid in cash and $34,601 was paid in shares of SolarEdge common stock (the “SMRE Acquisition”).
As part of the SMRE Acquisition, the Company issued 334,096 PSUs that are subject to certain performance goals and a vesting period, in the aggregate amount of $13,444 which will be expensed in the condensed consolidated statements of operation in general and administrative expenses line item (see note 9).
As of January 24, 2019 (unaudited), the fair value of the 43.2% non-controlling interests in SMRE was estimated to be $67,733. The fair value of the non-controlling interests was valued based on and at the transaction price.
The primary reason for the SMRE Acquisition was to acquire technology and customer relationships and to expand and diversify the Company’s business by entering into the electric vehicles market.
The Company determined that the SMRE Acquisition will be accounted for as a business combination in accordance with ASC 805 "Business Combinations".
During the period from the SMRE Acquisition through June 30, 2019 (unaudited), the Company purchased additional common shares of SMRE in the open market and through a tender offer in a total amount of $65,945. As of June 30, 2019 (unaudited), the Company holds 99.4% of the outstanding common shares and voting rights of SMRE and such company’s shares are delisted from the Italian Alternative Investment Market (“AIM”).
The amounts of revenue and net loss of SMRE included in the Company’s condensed consolidated statements of operations for the three and six months ended June 30, 2019 (unaudited):
The following table summarizes the preliminary estimated purchase price allocation of the business combination completed during the six months ended June 30, 2019 (unaudited):
During the three and six months ended June 30, 2019 (unaudited), the Company recognized acquisition-related costs of $151 and $604, respectively.
The purchase price allocations for the business combinations completed during the year ended December 31, 2018 are still preliminary as of June 30, 2019 (unaudited).
The following table represents the pro-forma (unaudited) condensed consolidated statements of operations as if all acquisitions completed during the year ended December 31, 2018 and the six months ended June 30, 2019 (unaudited), had been included in the condensed consolidated statements of operations of the Company for the three and six months ended June 30, 2019 (unaudited) and 2018 (unaudited):
The pro-forma results have been calculated after applying the Company’s accounting policies and adjusting the results of all acquisitions to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property, plant and equipment and intangible assets had been applied since the acquisitions date, together with the consequential tax effects.
The pro-forma results are based on estimates and assumptions, which the Company believes are reasonable. The pro-forma results are not the results that would have been realized had the acquisitions actually occurred on January 1, 2018 and 2019, and are not necessarily indicative of the Company’s condensed consolidated statements of operations in future periods.
|
INTANGIBLE ASSETS AND GOODWILL |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INTANGIBLE ASSETS AND GOODWILL |
Acquired intangible assets and goodwill consisted of the following:
Amortization expenses for the three months ended June 30, 2019 (unaudited) and 2018 (unaudited) were $2,924 and $36, respectively.
Amortization expenses for the six months ended June 30, 2019 (unaudited) and 2018 (unaudited) were $4,895 and $72, respectively.
The reported amount of net acquisition-related intangible assets and goodwill can fluctuate due to the impact of changes in foreign currency exchange rates on intangible assets and goodwill not denominated in U.S. dollars.
Acquired finite-lived intangible assets are amortized on a straight-line basis or accelerated method over the estimated useful lives of the assets. The Company will amortize its finite-lived intangible assets over a period of 2-13 years.
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INVENTORIES |
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORIES |
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WARRANTY OBLIGATIONS |
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Product Warranties Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
WARRANTY OBLIGATIONS |
Changes in the Company’s product warranty obligations for the six months ended June 30, 2019 (unaudited) and 2018 (unaudited) were as follows:
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FAIR VALUE MEASUREMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS |
In accordance with ASC 820, the Company measures its cash equivalents, foreign currency derivative contracts, and marketable securities, at fair value using the market approach valuation technique. Cash equivalents and marketable securities are classified within Level 1 or Level 2. This is because these assets are valued using quoted market prices or alternative pricing sources and models utilizing market observable inputs. Earn-out provision is classified within the Level 3 value hierarchy, as the valuation is based on unobservable inputs which are supported by little or no market activity.
The following table sets forth the Company’s assets that were measured at fair value as of June 30, 2019 (unaudited) and December 31, 2018, by level within the fair value hierarchy:
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LEASES |
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Lessee Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES |
The Company leases offices, plants and vehicles under operating and finance leases. For leases with terms greater than 12 months, the Company records the related asset and liability at the present value of lease payments according to their term. Several of the Company’s leases include renewal options and some have termination options that are factored into the Company’s determination of the lease payments when appropriate. The Company estimates the incremental borrowing rate in order to discount the lease payments based on the information available at the lease commencement date.
The following table summarizes the Company’s lease-related assets and liabilities recorded on the condensed consolidated balance sheet:
The following table presents certain information related to the lease costs for operating and finance leases:
The following table presents supplemental cash flow information related to the lease costs for operating and finance leases:
The following table reconciles the undiscounted cash flows for each of the first five years and total of the remaining years of the operating and finance lease liabilities recorded on the condensed consolidated balance sheets (unaudited):
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COMMITMENTS AND CONTINGENT LIABILITIES |
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Jun. 30, 2019 | |||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||
COMMITMENTS AND CONTINGENT LIABILITIES |
As of June 30, 2019 (unaudited), contingent liabilities exist regarding guarantees in the amount of $1,963, $56, $180 and $13,353 in respect of office rent lease agreements, customs transactions, credit card limits and bank loans, respectively.
b. Contractual purchase obligations:
The Company has contractual obligations to purchase goods and raw materials. These contractual purchase obligations relate to inventories held by contract manufacturers and purchase orders initiated by the contract manufacturers and suppliers, which cannot be canceled without penalty. The Company utilizes third parties to manufacture its products. In addition, it acquires raw materials or other goods and services, including product components, by issuing to suppliers authorizations to purchase based on its projected demand and manufacturing needs.
As of June 30, 2019 (unaudited), the Company had non-cancellable purchase obligations totaling approximately $310,897 out of which the Company already recorded a provision for loss in the amount of $2,843.
As of June 30, 2019 (unaudited), the Company had contractual obligations for capital expenditures totaling approximately $45,420. These commitments reflect purchases of automated assembly lines and other machinery related to the Company’s manufacturing.
From time to time, the Company may be involved in various claims and legal proceedings. The Company reviews the status of each matter and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, the Company accrues a liability for the estimated loss. These accruals are reviewed at least quarterly and adjusted to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular matter.
On May 8, 2019 (unaudited), the Company received notice that Huawei Technologies Co., Ltd., a Chinese entity, has filed three lawsuits in the Guangzhou intellectual property court against the Company's two Chinese subsidiaries and its equipment manufacturer in China. The lawsuits allege infringement of three patents and ask for an injunction of manufacture, use, sale and offer for sale, and damage awards of approximately $4.3 million. The Company believes that it has meritorious defenses to the claims asserted and intends to vigorously defend against these lawsuits.
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STOCK CAPITAL |
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Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK CAPITAL |
The Company’s 2007 Global Incentive Plan (the “2007 Plan”) was adopted by the board of directors on August 30, 2007. On March 31, 2015, once the Company completed its Initial Public Offering (“IPO”), the 2007 Plan was terminated and no further awards will be granted thereunder. All outstanding awards are continuing to be governed by their existing terms and 379,358 available options for future grant were transferred to the Company’s 2015 Global Incentive Plan (the “2015 Plan”) and are reserved for future issuances under the 2015 plan.
The 2015 Plan became effective upon the consummation of the IPO. The 2015 Plan provides for the grant of options, RSUs and other share-based awards to directors, employees, officers, and consultants of the Company and its Subsidiaries. As of June 30, 2019 (unaudited), a total of 10,383,357 shares of common stock were reserved for issuance under the 2015 Plan (the “Share Reserve”).
The Share Reserve will automatically increase on January 1st of each year during the term of the 2015 Plan commencing on January 1st of the year following the year in which the 2015 Plan becomes effective in an amount equal to five percent (5%) of the total number of shares of capital stock outstanding on December 31st of the preceding calendar year; provided, however, that our board of directors may determine that there will not be a January 1st increase in the Share Reserve in a given year or that the increase will be less than five percent (5%) of the shares of capital stock outstanding on the preceding December 31st.
The aggregate maximum number of shares of common stock that may be issued on the exercise of incentive stock options is ten million (10,000,000). As of June 30, 2019 (unaudited), an aggregate of 8,686,589 shares of common stock are still available for future grant under the 2015 Plan.
A summary of the activity in the share options granted to employees and directors for the six months ended June 30, 2019 (unaudited) and related information follows:
The aggregate intrinsic value represents the total intrinsic value (the difference between the fair value of the Company’s common stock as of the last day of each period and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on the last day of each period. The total intrinsic value of options exercised during the six months ended June 30, 2019 (unaudited) was $5,865.
The weighted average grant date fair values of options granted to employees and executive directors during the six months ended June 30, 2019 (unaudited) was $19.83.
d. A summary of the activity in the RSUs (excluding PSUs) granted to employees and members of the board of directors for the six months ended June 30, 2019 (unaudited) is as follows:
As part of the SMRE Acquisition (unaudited), the Company granted 334,096 PSUs that are subject to certain performance goals and a vesting period. The PSUs grant date fair value is $40.24.
During the six months ended June 30, 2019 (unaudited), the Company recognized expenses in the amount of $1,680 related to PSU’S vesting that were expensed in the condensed consolidated statement of operations in general and administrative expenses line item.
The Company has granted options and RSUs to purchase common shares to non-employee consultants as of June 30, 2019 (unaudited) as follows:
The Company had accounted for its options and RSUs granted to non-employee consultants under the fair value method of ASC 505-50 (“Equity-Based Payments to Non-Employees”).
In connection with the grant of stock options and RSUs to non‑employee consultants, the Company recorded stock compensation expenses during the six months ended June 30, 2019 (unaudited) and 2018 (unaudited) in the amount of $352 and $835, respectively.
The Company adopted an Employee Stock Purchase Plan (the “ESPP”) effective upon the consummation of the IPO. As of June 30, 2019 (unaudited), a total of 2,199,808 shares were reserved for issuance under this plan. The number of shares of common stock reserved for issuance under the ESPP will increase automatically on January 1st of each year, for ten years, by the lesser of 1% of the total number of shares of the Company’s common stock outstanding on December 31st of the preceding calendar year or 487,643 shares. However, the Company’s board of directors may reduce the amount of the increase in any particular year at their discretion, including a reduction to zero.
The ESPP is implemented through an offering every six months. According to the ESPP, eligible employees may use up to 10% of their salaries to purchase common stock shares up to an aggregate limit of $10 per participant for every six months plan. The price of an ordinary share purchased under the ESPP is equal to 85% of the lower of the fair market value of the ordinary share on the subscription date of each offering period or on the purchase date.
As of June 30, 2019 (unaudited), 460,455 common stock shares had been purchased under the ESPP. As of June 30, 2019 (unaudited), 1,739,353 common stock shares were available for future issuance under the ESPP.
In accordance with ASC No. 718, the ESPP is compensatory and as such results in recognition of compensation cost.
The Company recognized stock-based compensation expenses related to stock options, RSUs and PSUs granted to employees and non-employee consultants and ESPP in the condensed consolidated statement of income for the three and six months ended June 30, 2019 (unaudited) and 2018 (unaudited), as follows:
As of June 30, 2019 (unaudited), there was a total unrecognized compensation expense of $113,848 related to non‑vested equity‑based compensation arrangements. These expenses are expected to be recognized during the period from July 1, 2019 through May 31, 2023.
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BASIC AND DILUTED NET EARNINGS PER SHARE |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BASIC AND DILUTED NET EARNINGS PER SHARE |
Basic net earnings per share is computed by dividing the net earnings attributable to SolarEdge Technologies, Inc. by the weighted-average number of shares of common stock outstanding during the period.
Diluted net earnings per share is computed by giving effect to all potential shares of common stock, including stock options, to the extent dilutive, all in accordance with ASC No. 260, "Earnings Per Share."
334,096 and 289,796 shares were excluded from the calculation of diluted net earnings per share due to their anti-dilutive effect for the three and six months ended June 30, 2019 (unaudited), respectively.
No shares were excluded from the calculation of diluted net earnings per share due to their anti-dilutive effect for the three and six months ended June 30, 2018 (unaudited).
The following table presents the computation of basic and diluted net earnings per share attributable to SolarEdge Technologies, Inc. for the periods presented (in thousands, except share and per share data):
|
INCOME TAXES |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES |
Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
Significant components of the Company’s deferred tax liabilities and assets are as follows:
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CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS |
6 Months Ended | ||||||||
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Jun. 30, 2019 | |||||||||
Risks and Uncertainties [Abstract] | |||||||||
CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS |
For the six month period ended June 30, 2019 (unaudited) and 2018 (unaudited), the Company had one major customer that accounted for 15.3% and 18.2% of its condensed consolidated revenues, respectively.
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SEGMENT INFORMATION |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION |
The Company's chief operating decision maker (“CODM”) is our Chief Executive Officer who makes resource allocation decisions and assesses performance based on financial information presented on a consolidated basis. Accordingly, the Company has determined that it has a single reportable segment - the solar segment.
Total segment assets include corporate assets, such as cash and cash equivalents, marketable securities and tax assets. Total segment assets reconciled to consolidated amounts are as follows:
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SUBSEQUENT EVENTS |
6 Months Ended | ||
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Jun. 30, 2019 | |||
Subsequent Events [Abstract] | |||
SUBSEQUENT EVENTS |
In August 2019, the Company was served with a lawsuit by certain former shareholders of SMRE, against its Italian subsidiary that purchased the shares of SMRE in the tender offer which followed the SMRE Acquisition. The shareholders who tendered their shares are asking for the difference between the amount for which they tendered their shares (6 Euro per share) and 6.7 Euros per share, for awards of approximately $3 million. The Company believes it has meritorious defenses to the claims asserted and intends to vigorously defend against this lawsuit.
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BUSINESS COMBINATION (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Operation of Acquired Entity |
The amounts of revenue and net loss of SMRE included in the Company’s condensed consolidated statements of operations for the three and six months ended June 30, 2019 (unaudited):
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Schedule of Preliminary Estimated Components and Allocations of Combined Purchase Prices |
The following table summarizes the preliminary estimated purchase price allocation of the business combination completed during the six months ended June 30, 2019 (unaudited):
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Schedule of Pro-forma Condensed Consolidated Statements of Operations |
The following table represents the pro-forma (unaudited) condensed consolidated statements of operations as if all acquisitions completed during the year ended December 31, 2018 and the six months ended June 30, 2019 (unaudited), had been included in the condensed consolidated statements of operations of the Company for the three and six months ended June 30, 2019 (unaudited) and 2018 (unaudited):
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INTANGIBLE ASSETS AND GOODWILL (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Acquired Intangible Assets and Goodwill |
Acquired intangible assets and goodwill consisted of the following:
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INVENTORIES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventories |
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WARRANTY OBLIGATIONS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product Warranties Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Warranty Obligations |
Changes in the Company’s product warranty obligations for the six months ended June 30, 2019 (unaudited) and 2018 (unaudited) were as follows:
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FAIR VALUE MEASUREMENTS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets and Liabilities Measured at Fair Value |
The following table sets forth the Company’s assets that were measured at fair value as of June 30, 2019 (unaudited) and December 31, 2018, by level within the fair value hierarchy:
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LEASES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lessee Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Lease-related Assets and Liabilities |
The following table summarizes the Company’s lease-related assets and liabilities recorded on the condensed consolidated balance sheet:
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Schedule of Information Related to Lease Costs for Finance and Operating Leases |
The following table presents certain information related to the lease costs for operating and finance leases:
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Schedule of Supplemental Cash Flow Information Related to Leases |
The following table presents supplemental cash flow information related to the lease costs for operating and finance leases:
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Schedule of Operating and Finance lease liabilities |
The following table reconciles the undiscounted cash flows for each of the first five years and total of the remaining years of the operating and finance lease liabilities recorded on the condensed consolidated balance sheets (unaudited):
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STOCK CAPITAL (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Composition of Common Stock Capital |
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Schedule of Stock Option Activity |
A summary of the activity in the share options granted to employees and directors for the six months ended June 30, 2019 (unaudited) and related information follows:
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Schedule of RSU Activity |
d. A summary of the activity in the RSUs (excluding PSUs) granted to employees and members of the board of directors for the six months ended June 30, 2019 (unaudited) is as follows:
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Schedule of Options and RSUs Granted to Non-Employee Consultants |
The Company has granted options and RSUs to purchase common shares to non-employee consultants as of June 30, 2019 (unaudited) as follows:
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Schedule of Recognized Stock-Based Compensation Expense |
The Company recognized stock-based compensation expenses related to stock options, RSUs and PSUs granted to employees and non-employee consultants and ESPP in the condensed consolidated statement of income for the three and six months ended June 30, 2019 (unaudited) and 2018 (unaudited), as follows:
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BASIC AND DILUTED NET EARNINGS PER SHARE (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Computation of Basic and Diluted Net Earnings (Loss) Per Share |
The following table presents the computation of basic and diluted net earnings per share attributable to SolarEdge Technologies, Inc. for the periods presented (in thousands, except share and per share data):
|
INCOME TAXES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Taxes on Income |
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Schedule of Deferred Tax Assets and Liabilities |
Significant components of the Company’s deferred tax liabilities and assets are as follows:
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Schedule of Uncertain Tax Positions |
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SEGMENT INFORMATION (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Assets |
Total segment assets include corporate assets, such as cash and cash equivalents, marketable securities and tax assets. Total segment assets reconciled to consolidated amounts are as follows:
|
GENERAL (Narrative) (Details) - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Dec. 31, 2018 |
Jan. 24, 2019 |
Oct. 17, 2018 |
|
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||
Accounts receivable pledged to offset accounts payable | $ 944 | |||
Accounts Payable [Member] | ||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||
Concentration risk (as a percent) | 57.20% | 58.80% | ||
SMRE [Member] | ||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||
Percentage of acquisition | 99.40% | 56.80% | ||
Kokam [Member] | ||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||
Percentage of acquisition | 94.20% | 74.50% |
BUSINESS COMBINATION (Narrative) (Details) - USD ($) $ in Thousands |
1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|---|
Jan. 24, 2019 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
|
Acquisition related costs | $ 151 | $ 604 | ||||
General and administrative expenses | 13,685 | $ 5,776 | 25,376 | $ 10,529 | ||
Non-controlling interests | $ 5,977 | 5,977 | $ 8,318 | |||
Additional common shares purchased | 38,435 | |||||
Finite-lived intangible assets | $ 142,755 | |||||
SMRE [Member] | ||||||
Percentage of acquisition | 56.80% | 99.40% | 99.40% | |||
Amount of investment | $ 73,036 | |||||
Cash paid | 42,240 | |||||
Common shares, Value | $ 34,601 | |||||
Percentage of noncontrolling interest | 43.20% | |||||
Non-controlling interests | $ 67,733 | |||||
Additional common shares purchased | $ 65,945 | |||||
SMRE [Member] | Options [Member] | ||||||
Number of shares granted | 334,096 | |||||
General and administrative expenses | $ 13,444 |
BUSINESS COMBINATION (Schedule of Operation of Acquired Entity) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Net income (loss) | $ 32,913 | $ 34,568 | $ 50,888 | $ 70,254 |
SMRE [Member] | ||||
Revenues | 5,348 | 8,250 | ||
Net income (loss) | $ 5,388 | $ 7,267 |
BUSINESS COMBINATION (Schedule of Preliminary Estimated Components and Allocations of Combined Purchase Prices) (Details) - SMRE [Member] $ in Thousands |
Jun. 30, 2019
USD ($)
|
|||||
---|---|---|---|---|---|---|
Components of Purchase Price: | ||||||
Cash | $ 42,240 | |||||
Less cash acquired | (3,805) | |||||
Common stock | 34,601 | |||||
Total purchase price | 73,036 | |||||
Allocation of Purchase Price: | ||||||
Total net identifiable assets | 7,947 | |||||
Total identifiable intangible assets, net and Goodwill | 132,822 | [1] | ||||
Non-controlling interests | (67,733) | |||||
Total purchase price allocation | $ 73,036 | [2] | ||||
|
BUSINESS COMBINATION (Schedule of Pro-forma Condensed Consolidated Statements of Operations) (Details) - SMRE [Member] - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Business Acquisition [Line Items] | ||||
Revenue | $ 325,010 | $ 248,541 | $ 597,953 | $ 480,325 |
Net income | $ 32,913 | $ 27,009 | $ 49,523 | $ 55,663 |
INTANGIBLE ASSETS AND GOODWILL (Narrative) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expenses | $ 2,924 | $ 36 | $ 4,895 | $ 72 |
Minimum [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived intangible assets estimated useful lives of assets | 2 years | |||
Maximum [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived intangible assets estimated useful lives of assets | 13 years |
INTANGIBLE ASSETS AND GOODWILL (Schedule of Acquired Intangible Assets) (Details) - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2019 |
Dec. 31, 2018 |
|
Intangible assets with finite lived: | ||
Gross intangible assets | $ 38,456 | $ 39,799 |
Less - accumulated amortization | (3,532) | (1,295) |
Total intangible assets, net | 34,924 | 38,504 |
Goodwill: | ||
Goodwill from business combinations | 34,874 | 34,445 |
Foreign currency translation | (1,213) | 429 |
Goodwill | 33,661 | 34,874 |
Intangible assets with finite lived, net and goodwill resulted from SMRE Acquisition | 142,755 | |
Total Intangible assets with finite lived, net and goodwill | 211,340 | 73,378 |
Current technology [Member] | ||
Intangible assets with finite lived: | ||
Gross intangible assets | 29,734 | 30,821 |
Customer Relationships [Member] | ||
Intangible assets with finite lived: | ||
Gross intangible assets | 3,742 | 3,857 |
Trade names [Member] | ||
Intangible assets with finite lived: | ||
Gross intangible assets | 3,580 | 3,721 |
Patent [Member] | ||
Intangible assets with finite lived: | ||
Gross intangible assets | $ 1,400 | $ 1,400 |
INVENTORIES (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 63,013 | $ 39,380 |
Work in process | 23,001 | 18,115 |
Finished goods | 62,878 | 84,024 |
Inventories, net | $ 148,892 | $ 141,519 |
WARRANTY OBLIGATIONS (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Changes in the Company's product warranty liability | ||
Balance, at beginning of period | $ 121,826 | $ 78,811 |
Additions and adjustments to cost of revenues | 46,288 | 27,546 |
Usage and current warranty expenses | (17,476) | (9,066) |
Balance, at end of period | 150,638 | 97,291 |
Less current portion | (38,819) | (18,964) |
Long term portion | $ 111,819 | $ 78,327 |
FAIR VALUE MEASUREMENTS (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Level 1 [Member] | Money Market Funds [Member] | ||
Fair value of assets | $ 739 | $ 1,767 |
Level 2 [Member] | Short-term corporate bonds [Member] | ||
Fair value of assets | 105,266 | 110,385 |
Level 2 [Member] | Short-term governmental bonds [Member] | ||
Fair value of assets | 4,344 | 8,295 |
Level 2 [Member] | Long-term corporate bonds [Member] | ||
Fair value of assets | 79,616 | 74,256 |
Level 3 [Member] | Long-term Earn-out provision [Member] | ||
Fair value of liabilities | $ (885) | $ (332) |
LEASES (Schedule of Lease-related Assets and Liabilities) (Details) $ in Thousands |
Jun. 30, 2019
USD ($)
|
---|---|
Assets | |
Operating lease assets, net of lease incentive obligation | $ 36,788 |
Finance lease assets | 2,922 |
Total lease assets | 39,710 |
Liabilities | |
Operating and finance leases short term | 10,134 |
Operating leases long term | 30,009 |
Finance leases long term | 2,014 |
Total lease liabilities | $ 42,157 |
Operating leases | 4 years 10 months 24 days |
Finance leases | 8 years 5 months 1 day |
Operating leases | 1.45% |
Finance leases | 2.87% |
LEASES (Schedule of Information Related to Lease Costs for Finance and Operating Leases) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
|
Finance lease cost | ||
Amortization of leased assets | $ 26 | $ 53 |
Interest on lease liabilities | 15 | 31 |
Operating lease cost | 2,384 | 4,615 |
Total lease cost | $ 2,425 | $ 4,699 |
LEASES (Schedule of Supplemental Cash Flow Information Related to Leases) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
|
Cash paid for amounts included in measurement of lease liabilities | ||
Operating cash flows from operating leases | $ 2,384 | $ 4,615 |
LEASES (Schedule of Operating and Finance lease liabilities) (Details) $ in Thousands |
Jun. 30, 2019
USD ($)
|
---|---|
Operating leases | |
2019 | $ 5,548 |
2020 | 9,289 |
2021 | 8,024 |
2022 | 7,278 |
2023 | 6,365 |
Thereafter | 5,197 |
Total lease payments | 41,701 |
Less: amount of lease payments representing interest | (1,694) |
Present value of future lease payments | 40,007 |
Less: current obligations under leases | (9,998) |
Long-term lease obligations | 30,009 |
Finance lease | |
2019 | 106 |
2020 | 211 |
2021 | 211 |
2022 | 196 |
2023 | 196 |
Thereafter | 1,654 |
Total lease payments | 2,574 |
Less: amount of lease payments representing interest | (424) |
Present value of future lease payments | 2,150 |
Less: current obligations under leases | (136) |
Long-term lease obligations | $ 2,014 |
COMMITMENTS AND CONTINGENT LIABILITIES (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2019
USD ($)
| |
Non-cancelable purchase obligations | $ 310,897 |
Provision for contractual inventory purchase obligations | 2,843 |
Contractual obligations for capital expenditures | 45,420 |
Lawsuit claims | 4,300 |
Office Rent Lease Agreements [Member] | |
Guarantees amount | 1,963 |
Customs Transactions [Member] | |
Guarantees amount | 56 |
Credit Card Limits [Member] | |
Guarantees amount | 180 |
Bank loans [Member] | |
Guarantees amount | $ 13,353 |
STOCK CAPITAL (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation | $ 21,076 | $ 13,977 | ||
Unrecognized compensation expense | $ 113,848 | 113,848 | ||
General and administrative expenses | $ 13,685 | $ 5,776 | 25,376 | 10,529 |
Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Intrinsic value of options exercised | $ 5,865 | |||
Weighted average grant date fair value of options granted | $ 19.83 | |||
Stock-based compensation | $ 352 | $ 835 | ||
Options [Member] | SMRE [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average grant date fair value of options granted | $ 40.24 | |||
Number of shares granted | 334,096 | |||
General and administrative expenses | $ 1,680 | |||
Maximum [Member] | Option [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of options available for future grant under the plan | 10,000,000 | 10,000,000 | ||
2007 Plan, Transferred to 2015 Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of options available for future grant under the plan | 379,358 | 379,358 | ||
2015 Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of options reserved for issuance under the plan | 10,383,357 | 10,383,357 | ||
Number of options available for future grant under the plan | 8,686,589 | 8,686,589 | ||
2015 Plan [Member] | Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Annual increase percentage | 5.00% | |||
ESPP [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of options reserved for issuance under the plan | 2,199,808 | 2,199,808 | ||
Number of options available for future grant under the plan | 1,739,353 | 1,739,353 | ||
Maximum number of excess shares authorized | 487,643 | 487,643 | ||
Number of Common stock purchased | 460,455 | |||
Maximum percentage of salary | 10.00% | 10.00% | ||
Maximum amount authorized per person | $ 10 | $ 10 | ||
Maximum percentage of common stock | 85.00% | |||
ESPP [Member] | Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Annual increase percentage | 1.00% |
STOCK CAPITAL (Schedule of Composition of Common Stock Capital) (Details) - $ / shares |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Common stock capital | ||
Par value | $ 0.0001 | $ 0.0001 |
Authorized | 125,000,000 | 125,000,000 |
Common stock, issued shares | 47,967,425 | 46,052,802 |
Common stock, outstanding shares | 47,967,425 | 46,052,802 |
STOCK CAPITAL (Schedule of Stock Option Activity) (Details) - Option [Member] - Employees and Members of Board of Directors [Member] $ / shares in Units, $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2019
USD ($)
$ / shares
shares
| |
Number of Options | |
Outstanding as of December 31, 2018 | shares | 2,401,893 |
Granted | shares | 267,852 |
Exercised | shares | (145,246) |
Forfeited and expired | shares | (10,625) |
Outstanding as of June 30, 2019 | shares | 2,513,874 |
Vested and expected to vest as of June 30, 2019 | shares | 2,479,232 |
Exercisable as of June 30, 2019 | shares | 1,864,999 |
Weighted average exercise price | |
Outstanding as of December 31, 2018 | $ / shares | $ 11.04 |
Granted | $ / shares | 36.15 |
Exercised | $ / shares | 8.65 |
Forfeited and expired | $ / shares | 14.51 |
Outstanding as of June 30, 2019 | $ / shares | 13.84 |
Vested and expected to vest as of June 30, 2019 | $ / shares | 13.70 |
Exercisable as of June 30, 2019 | $ / shares | $ 9.02 |
Weighted average remaining contractual term in years | |
Outstanding as of December 31, 2018 | 6 years 2 months 8 days |
Ountstanding as of June 30, 2019 | 6 years 1 month 20 days |
Vested and expected to vest as of June 30, 2019 | 6 years 1 month 9 days |
Exercisable as of June 30, 2019 | 5 years 4 months 2 days |
Aggregate intrinsic Value | |
Outstanding as of December 31, 2018 | $ | $ 58,323 |
Outstanding as of June 30, 2019 | $ | 122,227 |
Vested and expected to vest as of June 30, 2019 | $ | 59,508 |
Exercisable as of June 30, 2019 | $ | $ 99,673 |
STOCK CAPITAL (Schedule of RSU Activity) (Details) - Restricted Stock Units (RSUs) [Member] - Employees and Members of Board of Directors [Member] |
6 Months Ended |
---|---|
Jun. 30, 2019
$ / shares
shares
| |
Number of RSUs | |
Unvested as of December 31, 2018 | shares | 2,807,232 |
Granted | shares | 480,022 |
Vested | shares | (487,906) |
Forfeited | shares | (145,142) |
Unvested as of June 30, 2019 (unaudited) | shares | 2,654,206 |
Weighted average grant date fair value | |
Unvested as of December 31, 2018 | $ / shares | $ 34.40 |
Granted | $ / shares | 43.85 |
Vested | $ / shares | 32.49 |
Forfeited | $ / shares | 36.27 |
Unvested as of June 30, 2019 (unaudited) | $ / shares | $ 36.36 |
STOCK CAPITAL (Schedule of Options and RSUs Granted to Non-Employee Consultants) (Details) - Options And RSUs [Member] - Nonemployee Consultants [Member] |
Jun. 30, 2019
$ / shares
shares
|
---|---|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding at the end of the period | 58,472 |
Exercisable at the end of the period | 5,245 |
2014 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding at the end of the period | 6,023 |
Exercisable at the end of the period | 5,245 |
2014 [Member] | Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price | $ / shares | $ 3.51 |
2014 [Member] | Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price | $ / shares | $ 5.01 |
2015 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding at the end of the period | 2,127 |
Exercise price | $ / shares | $ 0.00 |
Exercisable at the end of the period | |
2016 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding at the end of the period | 5,001 |
Exercisable at the end of the period | |
2016 [Member] | Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price | $ / shares | $ 0.00 |
2016 [Member] | Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price | $ / shares | $ 15.34 |
2017 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding at the end of the period | 13,126 |
Exercisable at the end of the period | |
2017 [Member] | Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price | $ / shares | $ 0.00 |
2017 [Member] | Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price | $ / shares | $ 13.70 |
2018 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding at the end of the period | 19,496 |
Exercise price | $ / shares | $ 0.00 |
Exercisable at the end of the period | |
2019 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding at the end of the period | 12,699 |
Exercise price | $ / shares | $ 0.00 |
Exercisable at the end of the period |
STOCK CAPITAL (Schedule of Recognized Stock-Based Compensation Expense) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | $ 11,372 | $ 7,128 | $ 21,076 | $ 13,977 |
Cost of revenues [Member] | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | 1,651 | 968 | 3,005 | 1,892 |
Research and development [Member] | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | 4,176 | 2,605 | 7,666 | 4,987 |
Selling and marketing [Member] | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | 2,722 | 2,094 | 5,126 | 4,298 |
General and administrative [Member] | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | $ 2,823 | $ 1,461 | $ 5,279 | $ 2,800 |
BASIC AND DILUTED NET EARNINGS PER SHARE (Schedule of Computation of Basic and Diluted Net Earnings (Loss) Per Share) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2019 |
Mar. 31, 2019 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Numerator: | ||||||
Net income | $ 32,913 | $ 34,568 | $ 50,888 | $ 70,254 | ||
Net loss attributable to Non-controlling interests | 215 | 1,256 | ||||
Net income attributable to SolarEdge Technologies, Inc. | $ 33,128 | $ 19,016 | $ 34,568 | $ 35,686 | $ 52,144 | $ 70,254 |
Denominator: | ||||||
Shares used in computing net earnings per share of common stock, basic | 47,683,799 | 45,216,253 | 47,353,401 | 44,726,382 | ||
Numerator: | ||||||
Net income | $ 32,913 | $ 34,568 | $ 50,888 | $ 70,254 | ||
Net loss attributable to Non-controlling interests | 215 | 1,256 | ||||
Undistributed earnings reallocated to non-vested stockholders | (220) | (304) | ||||
Net income attributable to SolarEdge Technologies, Inc. | $ 32,908 | $ 34,568 | $ 51,840 | $ 70,254 | ||
Denominator: | ||||||
Shares used in computing net earnings per share of common stock, basic | 47,683,799 | 45,216,253 | 47,353,401 | 44,726,382 | ||
Weighted average effect of dilutive securities: | ||||||
Non-vested PSU'S | (334,096) | (289,796) | ||||
Effect of stock-based awards | 2,590,331 | 3,075,027 | 2,294,675 | 3,258,435 | ||
Shares used in computing net earnings per share of common stock, diluted | 49,940,034 | 48,291,280 | 49,358,280 | 47,984,817 |
INCOME TAXES (Schedule of Taxes on Income) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Income Taxes Schedule Of Taxes On Income Details | ||||
Current year taxes | $ 13,753 | $ 5,322 | $ 18,909 | $ 12,323 |
Deferred tax income net, and others | (540) | (1,705) | (1,774) | (3,044) |
Taxes on income | $ 13,213 | $ 3,617 | $ 17,135 | $ 9,279 |
INCOME TAXES (Schedule of Deferred Tax Liabilities And Assets) (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Deferred tax assets, net: | ||
Research and Development carryforward expenses | $ 8,657 | $ 9,482 |
Carryforward tax losses | 5,670 | 4,155 |
Stock based compensation expenses | 4,056 | 3,160 |
Allowance and other reserves | 7,242 | 5,811 |
Total deferred tax assets | 25,625 | 22,608 |
Deferred tax liabilities, net: | ||
Intangible assets | (19,537) | (9,408) |
Total deferred tax liabilities | (19,537) | (9,408) |
Recorded as: | ||
Deferred tax assets, net | 14,751 | 14,699 |
Deferred tax liabilities, net | (8,663) | (1,499) |
Net deferred tax assets | $ 6,088 | $ 13,200 |
INCOME TAXES (Schedule of Uncertain Tax Positions) (Details) - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2019 |
Dec. 31, 2018 |
|
Income Tax Disclosure [Abstract] | ||
Balance at January 1, | $ 8,499 | $ 579 |
Increases related to current year tax positions | 1,216 | 8,499 |
Decreases related to prior year tax positions | (579) | |
Closing balance | $ 9,715 | $ 8,499 |
CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS (Details) |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
|
Revenues [Member] | One Major Customers [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 16.20% | 16.30% | 15.30% | 18.20% | |
Accounts Receivable [Member] | Two Major Customers [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 29.00% | 41.30% |
SEGMENT INFORMATION (Schedule of Segment Assets) (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Total assets | $ 1,221,694 | $ 964,472 |
Solar [Member] | ||
Total assets | 1,135,483 | 888,672 |
Non-solar [Member] | ||
Total assets | 124,260 | 92,358 |
Adjustments [Member] | ||
Total assets | $ (38,049) | $ (16,558) |
SUBSEQUENT EVENT (Details) - 1 months ended Aug. 31, 2019 - Subsequent Event [Member] - SMRE [Member] $ in Millions |
€ / shares |
USD ($) |
---|---|---|
Subsequent Event [Line Items] | ||
Difference amount of tendered shares for shareholders of SMRE | $ | $ 3 | |
Minimum [Member] | ||
Subsequent Event [Line Items] | ||
Difference amount per share of tendered shares for shareholders of SMRE | € 6 | |
Maximum [Member] | ||
Subsequent Event [Line Items] | ||
Difference amount per share of tendered shares for shareholders of SMRE | € 6.7 |
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