UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
For the quarterly period ended September 30, 2026
OR
For the transition period from _________ to __________
Commission File Number: 001-36894
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of
incorporation or organization)
(IRS Employer
Identification No.)
972 (9) 957-6620
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒
As of November 2, 2026, there were 61,914,401 shares of the registrant’s common stock, par value of $0.0001 per share, outstanding.
TABLE OF CONTENTS
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SOLAREDGE TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(in thousands, except per share data)
September 30,
2026
December 31,
2025
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | F - 1
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Cont.)
The accompanying notes are an integral part of the condensed consolidated financial statements.
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | F - 2
CONDENSED CONSOLIDATED STATEMENTS OF LOSS (Unaudited)
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | F - 3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited)
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | F - 4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)
Additional paid-in
capital
Accumulated
other comprehensive
income (loss)
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | F - 5
loss
* Represents an amount less than $1.
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | F - 6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | F - 7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Cont.)
The following table reconciles cash, cash equivalents and restricted cash per the statement of cash flows to the balance sheet:
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | F - 8
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
NOTE 1: GENERAL
The Company sells products worldwide through large distributors and electrical equipment wholesalers directly to large solar installers and engineering, procurement, and construction firms. The Company's products are carried and actively sold by most of the top distributors as well as some of the largest electrical distribution companies. The Company has expanded its activity to other areas of smart energy technology both organically and through acquisitions.
The unaudited condensed consolidated financial statements and accompanying notes have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). In management’s opinion, the unaudited condensed consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. The Company’s interim period 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, 2025, contained in the Company’s Annual Report on Form 10-K/A filed with the Securities and Exchange Commission (the “SEC”) on March 23, 2026, have been applied consistently in these unaudited condensed consolidated financial statements. Certain prior year amounts have been reclassified to conform to current year presentation.
Trade receivables are stated net of credit losses allowance. The Company is exposed to credit losses primarily through the sale of products. The allowance against gross trade receivables reflects the current expected credit loss inherent in the receivables portfolio determined based on the Company’s methodology. The Company’s methodology is based on historical collection experience, customer creditworthiness and current economic conditions. Additionally, specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default. Trade receivables are written off after all reasonable means to collect the full amount have been exhausted.
The following table provides a roll-forward of the allowance for credit losses that is deducted from the amortized cost basis of trade receivables to present the net amount expected to be collected:
Nine Months Ended
The preparation of financial statements, in conformity with U.S. GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses, government grants, income taxes and related disclosures in the accompanying notes. Actual results could differ from those estimates.
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | F - 9
In preparing the Company’s condensed consolidated financial statements, management considered the economic implications of inflation, geopolitical developments, disruptions due to the war in Israel, currency fluctuation, and the Company’s ability to benefit from certain tax credits in evaluating assumptions used in key accounting estimates. These factors were considered in assessing assets recoverability, inventory valuation and warranty obligations.
The Company depends on certain contract manufacturers and several limited or single source component suppliers. 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 September 30, 2026, one contract manufacturer accounted for 62.5% of the Company’s total trade payables.
As of December 31, 2025, two contract manufacturers jointly accounted for 50.7% of the Company’s total trade payables.
The Company’s wholly owned manufacturing facility, Sella 1, is located in the North of Israel.
On March 31, 2026, the Israeli Knesset enacted Chapter J, the Law for the Encouragement and Incentivization of Research and Development (the “R&D Law”). The R&D Law introduces a refundable tax credit regime for qualifying research and development (“R&D”) expenditures incurred in Israel, which applies to qualifying R&D expenditures incurred beginning the tax year starting January 1, 2026, and allows eligible companies, subject to certain conditions, to (i) offset Israeli income taxes or Israeli qualified domestic minimum top-up taxes (“QDMTT”), or (ii) receive a government grant if the credit is not utilized. As of September 30, 2026, the Company recognized an asset of $3,689 in other long-term assets in connection with refundable tax credits expected to be realized as government grants under the R&D Law. The Company recognized the related benefit as a reduction in research and development expenses of $1,168 and $3,689 for the three and nine months ended September 30, 2026, respectively.
On September 15, 2026, the Company’s Israeli subsidiary, SolarEdge Technologies, Ltd. (the “Israeli Subsidiary”), has entered into an agreement with a third-party financial institution (the “Bank”) to sell certain trade accounts receivable, structured as a true non-recourse sale (the “Factoring Arrangement”). Eligible receivables sold under the Factoring Arrangement generally consist of amounts owed to the Company for delivered products.
The Company evaluated the Factoring Arrangement under Accounting Standards Codification (“ASC”) 860, “Transfers and Servicing,” and concluded that the transfers under it meet the criteria for sale accounting because (i) the transferred receivables are legally isolated from the Company and its creditors, including in the event of bankruptcy, insolvency, or liquidation, (ii) the Bank has the unconditional right to pledge or exchange the receivables it purchases, and (iii) the Company does not maintain effective control over the transferred receivables. Transfers that meet the applicable sale criteria are derecognized from trade receivables, net, with the related discount and fees recognized within financial income (expense), net in the period of transfer, and related cash proceeds are classified as cash provided by operating activities.
During the three and nine months ended September 30, 2026, the Company sold trade receivables under the Factoring Arrangement in the amount of $11,655 and recorded $118 of interest and fees expenses, related to the Factoring Arrangement, in financial income (expense), net.
The Company did not sell any receivables under the Factoring Arrangement during the three and nine months ended September 30, 2025.
Recently issued and adopted pronouncements
In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-05, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets” (“ASU 2025-05”). This amendment introduces a practical expedient for the application of the current expected credit loss (“CECL”) model to current accounts receivable and contract assets. The practical expedient allows entities to assume that conditions as of the balance sheet date remain unchanged over the remaining life of these assets, thereby eliminating the need to incorporate macroeconomic forecasts. ASU 2025-05 is effective beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. The Company adopted this ASU as of January 1, 2026. The adoption of this new ASU did not have a material impact on the Company’s condensed consolidated financial statements.
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | F - 10
In September 2025, the FASB issued ASU 2025-07, “Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract” (“ASU 2025-07”), which (i) expands the scope exception of Topic 815 to exclude certain contracts with a variable that is based on operations or activities specific to one of the parties to the contract and (ii) clarifies the scope of share-based payments from a customer in a revenue contract. ASU 2025-07 is effective for annual reporting periods beginning after December 15, 2026, and interim periods within that year. Early adoption is permitted and must be applied as of the beginning of the fiscal year that includes the interim period. The Company adopted this ASU as of January 1, 2026. The adoption of this new ASU did not have a material impact on the Company’s condensed consolidated financial statements.
New accounting pronouncements not yet effective
In November 2024, the FASB issued ASU 2024-03, “Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income (loss) Statement Expenses” (“ASU 2024-03”). ASU 2024-03 requires disaggregation of certain costs and expenses included in each relevant expense caption on the Company's consolidated income (loss) statements in a separate note to the financial statements at each interim and annual reporting period, including amounts of purchases of inventory, employee compensation, depreciation, and intangible asset amortization. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03 on its consolidated financial statements disclosures.
In September 2025, the FASB issued ASU 2025-06, “Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software” (“ASU 2025-06”), which simplifies the capitalization guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods. ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted. ASU 2025-06 permits an entity to apply the new guidance using a prospective, retrospective or modified transition approach. The Company is currently evaluating the impact of adopting ASU 2025-06 on its consolidated financial statements.
In November 2025, the FASB issued ASU 2025-09 to amend the guidance in Derivatives and Hedging (Topic 815). The update provides targeted improvements intended to enhance the application of hedge accounting, including expanded eligibility of forecasted transactions, additional flexibility in measuring hedge effectiveness, and clarifications related to hedging non-financial items. The guidance is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. The Company is currently evaluating the impact of adopting ASU 2025-09 on its financial statement disclosures.
In December 2025, the FASB issued ASU 2025-10, “Accounting for Government Grants Received by Business Entities” (“ASU 2025-10”), which establishes the accounting and presentation for government grants received by a business entity. ASU 2025-10 is effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods. Early adoption is permitted. ASU 2025-10 permits an entity to apply the new guidance using a modified prospective basis, a modified retrospective basis, or a full retrospective basis. The Company is currently evaluating the impact of adopting ASU 2025-10 on its consolidated financial statements.
In December 2025, the FASB issued ASU 2025-11, “Interim Reporting (Topic 270): Narrow-Scope Improvements” (“ASU 2025-11”), which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting. ASU 2025-11 provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-11 on its consolidated financial statements.
In May 2026, the FASB issued ASU 2026-02, “Environmental Credits and Environmental Credit Obligations (Topic 818)” (“ASU 2026-02”). The ASU establishes authoritative guidance for the accounting of environmental credits and environmental credit obligations, including recognition, measurement, presentation, and disclosure requirements, in an effort to reduce diversity in practice and increase consistency of application across reporting entities. The ASU is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Adoption of this ASU should be applied on a retrospective basis through a cumulative-effect adjustment to the opening balance of retained earnings (or other appropriate components of equity or net assets on the balance sheet) as of the beginning of the annual reporting period of adoption, without recasting for any financial statement information before the period of adoption. Early adoption is permitted as of the beginning of an annual reporting period. The Company is currently evaluating the impact of adopting ASU 2026-02 on its consolidated financial statements.
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | F - 11
NOTE 2: MARKETABLE SECURITIES
As of September 30, 2026, the Company did not hold any available-for-sale marketable securities.
The following is a summary of available-for-sale marketable securities as of December 31, 2025:
The Company did not sell any available-for-sale marketable securities during the three and nine months ended September 30, 2026.
Proceeds from the sale of available-for-sale marketable securities, during the three and nine months ended September 30, 2025, were $76,288, which did not lead to realized gains or losses.
As of December 31, 2025, the Company did not record an allowance for credit losses for its available-for-sale marketable securities.
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | F - 12
NOTE 3: INVENTORIES, NET
NOTE 4: PREPAID EXPENSES AND OTHER CURRENT ASSETS
1 Vendor non-trade receivables are derived from the sale of components to manufacturing vendors who manufacture products, components and other testing equipment for the Company. The Company purchases these components directly from other suppliers. The Company does not reflect the sale of these components to the contract manufacturers in its revenues.
NOTE 5: OTHER LONG-TERM ASSETS
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | F - 13
NOTE 6: DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
The Company maintains a foreign currency cash flow hedging policy designed to mitigate exposure to fluctuations in exchange rates. Under this policy, the Company hedges portions of its anticipated payroll expenses denominated in New Israeli Shekels (“NIS”) for periods of one to nine months. These hedging contracts are designated as cash flow hedges in accordance with ASC 815, “Derivatives and Hedging,” and are considered effective.
As of September 30, 2026, the Company entered into forward contracts to sell U.S. dollars (“USD”) in the amounts of NIS 492 million.
In addition to the above-mentioned cash flow hedge transactions, the Company occasionally enters into derivative instrument arrangements to hedge the Company’s exposure to currencies other than USD. These derivative instruments are not designated as cash flow hedges, as defined by ASC 815, and therefore all gains and losses resulting from fair value remeasurement were recorded immediately in the condensed consolidated statement of loss under financial income (expense), net.
As of September 30, 2026, the Company entered into forward contracts to sell Euro (“EUR”) in the amounts of USD 18 million.
The Company classifies cash flows related to its hedging as operating activities in its condensed consolidated statement of cash flows.
The fair values of outstanding derivative instruments were as follows:
September 30, 2026
Gains (losses) on derivative instruments are summarized below:
Three Months Ended
See Note 16, Accumulated Other Comprehensive Income (Loss), for information regarding gains (losses) from designated hedging instruments reclassified from accumulated other comprehensive income (loss).
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | F - 14
NOTE 7: FAIR VALUE MEASUREMENTS
In accordance with ASC 820, “Fair Value Measurement,” the Company measures its cash equivalents and marketable securities at fair value using the market approach valuation technique. Cash and cash equivalents are classified within Level 1 because these assets are valued using quoted market prices. Marketable securities and foreign currency derivative contracts are classified within Level 2 because they are valued using alternative pricing sources and models utilizing market observable inputs.
The following table sets forth the Company’s assets and liabilities that were measured at fair value as of September 30, 2026, and December 31, 2025, by level within the fair value hierarchy:
NOTE 8: WARRANTY OBLIGATIONS
Changes in the Company’s product warranty obligations for the three and nine months ended September 30, 2026 and 2025, were as follows:
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | F - 15
NOTE 9: DEFERRED REVENUES AND CUSTOMER ADVANCES
Deferred revenues and customer advances consist of deferred cloud-based monitoring services, communication services, warranty extension services and advance payments received from customers for the Company’s products and other services. Deferred revenues and customer advances are classified as short-term and long-term deferred revenues and customer advances based on the period in which revenues are expected to be recognized.
Significant changes in the balances of deferred revenues and customer advances during the period are as follows:
The following table includes estimated revenues that the Company expects to be recognized in the future, related to performance obligations that are unsatisfied (or partially unsatisfied) as of September 30, 2026:
NOTE 10: ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
December 31, 2025
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | F - 16
NOTE 11: REVOLVING CREDIT FACILITY
On August 27, 2026, the Israeli Subsidiary, entered into a loan agreement (the “Credit Agreement”) with the Bank, providing for a revolving credit facility of up to $50.0 million (the “RCF”) for working capital needs. The RCF matures on February 27, 2029. Amounts are drawn as individual loans which mature within one week, two weeks, or one month of drawing, as elected by the Israeli Subsidiary, and may be repaid and re-borrowed during their respective periods. Because each individual loan under the RCF matures in no more than one month, outstanding borrowings, if any, are classified as short-term within current liabilities in the Company’s condensed consolidated balance sheets, notwithstanding the RCF’s overall term.
Borrowings bear interest at the daily simple Secured Overnight Financing Rate plus 2.35% per annum. The Company pays a non-refundable non-utilization fee of 0.35% per annum, payable monthly, on undrawn amounts.
For the three and nine months ended September 30, 2026, the Company recognized an immaterial amount of total interest expense in connection with the RCF, which was recorded in financial income (expense), net.
The RCF is guaranteed and secured by liens and floating and fixed charges over the assets of the Israeli Subsidiary, and over certain assets of the Company and SolarEdge Technologies Holdings, Inc., a wholly owned subsidiary of the Company (“SolarEdge Holdings”), in each case subject to certain exclusions. In addition, SolarEdge Holdings and the Company each provide the Bank with an unlimited guarantee of the Israeli Subsidiary’s obligations.
The Credit Agreement contains financial covenants, tested as of the end of each fiscal quarter, including minimum liquidity, tangible equity and net cash requirements applicable to the Company and the Israeli Subsidiary. As of September 30, 2026, the Company had no outstanding borrowings under the RCF and was in compliance with the financial covenants under the Credit Agreement. The Credit Agreement also contains restrictions on changes in control of the Israeli Subsidiary, the incurrence of additional indebtedness by the Israeli Subsidiary and on the granting of additional liens by the Israeli Subsidiary, as well as representations regarding compliance with applicable trade sanctions and with environmental and social risk-related laws and regulations. The Credit Agreement’s events of default include a cross-default triggered if any third party becomes entitled to demand immediate repayment of obligations of the Israeli Subsidiary in excess of $5.0 million.
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | F - 17
NOTE 12: CONVERTIBLE SENIOR NOTES
On September 25, 2020, the Company sold an aggregate principal amount of $632,500 of its 0.00% convertible senior notes due 2025 (the “Notes 2025”). The Notes 2025 were sold pursuant to an indenture, dated September 25, 2020 (the “Indenture”), between the Company and U.S. Bank National Association, as trustee. The Notes 2025 did not bear regular interest and matured on September 15, 2025. The Notes 2025 were general senior unsecured obligations of the Company. The initial conversion rate for the Notes 2025 was 3.5997 shares of common stock per $1,000 principal amount of Notes 2025, which was equivalent to an initial conversion price of approximately $277.80 per share of common stock, subject to adjustment upon the occurrence of certain specified events as set forth in the Indenture. In March 2025, the Company repurchased $5,250 principal amount of its Notes 2025. The Company recorded a net gain of $146 under other income, net, from the repurchase. The Company repaid all of the remaining Notes 2025 on their scheduled maturity of September 15, 2025. At maturity, the Company paid $342,250 in cash towards the principal amount of the Notes 2025 and no shares were issued in connection with the settlement as the conversion value was less than the principal amount of the Notes 2025.
On June 28, 2024, the Company sold an aggregate principal amount of $300,000 of its 2.25% convertible senior notes, due in 2029 (the “Notes 2029”). The Notes 2029 were sold pursuant to an indenture, dated June 28, 2024 (the “Indenture 2029”), between the Company and U.S. Bank National Association, as trustee. The Notes 2029 will bear interest at a rate of 2.25% per year, payable semiannually in arrears on January 1 and July 1 of each year, beginning on January 1, 2025. The Notes 2029 mature on July 1, 2029, unless repurchased, redeemed or converted in accordance with their terms prior to such date. The Notes 2029 are general senior unsecured obligations of the Company. Holders may convert their Notes 2029 at any time prior to the close of business on the business day immediately preceding April 1, 2029, in multiples of $1,000 principal amount, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2024 (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of the Notes 2029 for each trading day of that five consecutive trading day period was less than 98% of the product of the last reported sale price of the common stock and the conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events or if the Company provides a notice of redemption as described in the Indenture 2029. During the quarter ended June 30, 2026, the last reported sale price condition was satisfied. As a result, holders of the Notes 2029 could convert them during the quarter ended September 30, 2026. No holders exercised this option during that quarter. During the quarter ended September 30, 2026, the last reported sale price condition was not satisfied. The Company will continue to assess the conversion conditions each quarter, as required by the Indenture 2029.
In addition, holders may convert their Notes 2029, in multiples of $1,000 principal amount, at their option at any time beginning on or after April 1, 2029, and prior to the close of business on the second scheduled trading day immediately preceding the stated maturity date of the Notes 2029, without regard to the foregoing circumstances. The initial conversion rate for the Notes 2029 is 29.1375 shares of common stock per $1,000 principal amount of Notes 2029, which is equivalent to an initial conversion price of approximately $34.32 per share of common stock, subject to adjustment upon the occurrence of certain specified events as set forth in the Indenture 2029.
Upon conversion of the Notes 2029, the Company may choose to pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock.
In addition, upon the occurrence of a fundamental change (as defined in the Indenture 2029), holders of the Notes 2029 may require the Company to repurchase all or a portion of their Notes 2029, in multiples of $1,000 principal amounts, at a repurchase price of 100% of the principal amount of the Notes 2029, plus any accrued and unpaid interest, if any, up to, but not including, the repurchase date. If certain fundamental changes referred to as make-whole fundamental changes occur, the conversion rate for the Notes 2029 may be increased.
The Notes 2029 are not redeemable prior to July 6, 2027. On or after July 6, 2027, the Company may redeem the Notes 2029 at its option if the last reported sale price of the common stock has been at least 130% of the conversion price, then in effect, for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on and including the trading day immediately preceding the date on which the Company provides notice of redemption, at a redemption price equal to 100% of the principal amount of the Notes 2029 to be redeemed, plus accrued and unpaid interest, if any, up to, but excluding, the redemption date.
The net proceeds from the offering of the Notes 2029 were approximately $293,200, after deducting fees and estimated expenses. Concurrently, the Company has entered into capped call transactions (as detailed below). The Company used approximately $25,230 of the net proceeds from this offering to pay the cost of the capped call transactions. The Company also used approximately $267,900 of the net proceeds, from this offering, to repurchase $285,000 principal amount of its Notes 2025. In June 2024, the Company recorded under other income, net a gain of $15,456 from the repurchase of Notes 2025.
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | F - 18
The Company accounts for the Notes 2029 at amortized cost, as a single unit of account on the balance sheet. The carrying value of the liability is represented by the face amount of the Notes 2029, less debt issuance costs, adjusted for any amortization of issuance costs. Issuance costs are being amortized as interest expense over the term of the Notes 2029, using the effective interest rate method.
The capped call transactions are expected generally to reduce the potential dilution to the common stock upon any conversion of the Notes 2029 and/or offset any cash payments the Company is required to make in excess of the principal amount of converted Notes 2029, as the case may be, in the event that the market price per share of common stock, as measured under the terms of the capped call transactions, is greater than the strike price of the capped call transactions. The strike price initially corresponds to the conversion price of the Notes 2029 and is subject to customary anti-dilution adjustments. If, however, the market price per share of common stock exceeds $48.84, the initial cap price of the capped call transactions, there would nevertheless be unmitigated dilution and/or no offset of any cash payments, in each case, attributable to the amount by which the market price of the common stock exceeds the cap price. The cap price is subject to certain customary adjustments under the terms of the capped call transactions.
The capped call transactions are considered a freestanding instrument as they were entered into separately and apart from Notes 2029. In addition, the conversion or redemption of the Notes 2029 would not automatically result in the exercise of the capped call.
As the capped call transactions are indexed to the Company’s common stock, they were recorded as a reduction of additional paid-in capital in the condensed consolidated balance sheets.
On July 8, 2024, the Company sold to Goldman Sachs & Co. LLC, as representative of the several initial purchasers (the “Initial Purchasers”), and the Initial Purchasers purchased from the Company, $37,000 aggregate principal amount of additional Notes 2029. The additional Notes 2029 were sold pursuant to the Initial Purchasers’ exercise of the option granted by the Company to the Initial Purchasers to purchase additional Notes 2029, solely to cover over-allotments, under the purchase agreement described in the Company’s Form 8-K filed on June 28, 2024.
The net proceeds from the exercise of the option granted by the Company to the Initial Purchasers of the Notes 2029 were approximately $36,237, after deducting fees and estimated expenses. Concurrently, the Company has entered into additional capped call transactions. The Company used approximately $3,111 of the net proceeds from this offering to pay the cost of the additional capped call transactions. The Company intends to use the remainder of the net proceeds from the offering for general corporate purposes.
The Notes 2029 consisted of the following as of September 30, 2026 and December 31, 2025:
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | F - 19
Costs related to the Notes 2025 and the Notes 2029 for the three and nine months ended September 30, 2026 and 2025 were as follows:
As of September 30, 2026, the unamortized issuance costs of the Notes 2029 will be amortized over the remaining term of approximately 2.8 years.
The annual effective interest rate of the Notes 2029 is 2.75%.
As of September 30, 2026, the estimated fair value of the Notes 2029, which the Company has classified as Level 2 financial instruments, is $435,027. The estimated fair value was determined based on the quoted bid price of the Notes 2029 in an over-the-counter market on the last trading day of the reporting period.
As of September 30, 2026, the if-converted value of the Notes 2029 did not exceed the principal amount.
NOTE 13: OTHER LONG-TERM LIABILITIES
Total other long-term liabilities
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | F - 20
NOTE 14: STOCK CAPITAL
Common stock confers upon its holders the right to receive notice of, and to participate in, all general meetings of the Company, where each share of common stock shall have one vote for all purposes, to share equally, on a per share basis, in bonuses, profits, or distributions out of funds legally available therefor, and to participate in the distribution of the surplus assets of the Company in the event of liquidation of the Company.
The Company’s Amended and Restated 2015 Global Incentive Plan (the “2015 Plan”) became effective upon the consummation of the Company’s initial public offering (the “IPO”). The 2015 Plan provided for the grant of options, restricted stock units (“RSU”), performance stock units (“PSU”), and other stock-based awards to directors, employees, officers, and non-employees of the Company. As of September 30, 2026, a total of 26,648,950 shares of common stock were reserved for issuance pursuant to stock awards under the 2015 Plan (the “Share Reserve”), an aggregate of 10,336,315 shares are still available for future grants.
Under its 2015 Plan, the Company granted PSU awards to certain employees and officers which vest upon the achievement of certain market conditions subject to their continued employment with the Company.
The market condition for the PSUs is based on either (a) the Company’s share price targets during a 30-day successive average trading price of the Company’s common stock over a three year performance period and subject to a minimum of a two year employment period following the grant date, or (b) the Company’s share price targets during a 20-day successive average trading price of the Company’s common stock over a four year performance period and subject to a minimum of a two year employment period following the grant date, or (c) total shareholder return (“TSR”) compared to the TSR of (i) for grants granted in 2024 companies listed in the S&P 500 index, and (ii) for grants granted in 2026, companies listed in the Solar Index, in each case, over a two to three year performance period. The Company uses a Monte-Carlo simulation to determine the grant date fair value for these awards, which takes into consideration the market price of a share of the Company’s common stock on the date of grant less the present value of dividends expected during the requisite service period, as well as the possible outcomes pertaining to the TSR market condition. The Company recognizes such compensation expenses on an accelerated vesting method.
A summary of the activity in stock options and related information is as follows:
The intrinsic value is the amount by which the closing price of the Company’s common stock on September 30, 2026, or the price on the day of exercise exceeds the exercise price of the stock options, multiplied by the number of in-the-money options.
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | F - 21
A summary of the activity in the RSUs and PSUs and related information is as follows:
Number of
Shares
Outstanding
The Company adopted an ESPP effective upon the consummation of the IPO. As of September 30, 2026, a total of 5,125,666 shares were reserved for issuance under this plan.
The ESPP is implemented through an offering every six months. According to the ESPP, eligible employees may use the lesser of either up to 15% of their salaries or $15,000 per participant, to purchase common stock for every six month 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 September 30, 2026, 3,088,005 shares of common stock have been purchased under the ESPP.
As of September 30, 2026, 2,037,661 shares of common stock were available for future issuance under the ESPP.
The Company recognized stock-based compensation expenses related to all stock-based awards in the consolidated statement of loss for the three and nine months ended September 30, 2026 and 2025, as follows:
For the three and nine months ended September 30, 2026 and 2025, no amounts of tax benefits were recorded in regard to stock-based compensation.
As of September 30, 2026, there were total unrecognized compensation expenses in the amount of $176,636 related to non-vested equity-based compensation arrangements granted. These expenses are expected to be recognized during the period from October 1, 2026, through September 30, 2030.
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | F - 22
NOTE 15: COMMITMENTS AND CONTINGENT LIABILITIES
As of September 30, 2026, contingent liabilities exist regarding guarantees in the amounts of $9,098, $5,864 and $5,717 for securing projects with customers and vendors, office rent lease agreements, custom and other transactions, respectively.
The Company has contractual obligations to purchase goods and raw materials. These contractual purchase obligations relate to inventories and other purchase orders, which cannot be canceled without penalty. In addition, the Company acquires raw materials or other goods and services, including product components, by issuing authorizations to its suppliers to purchase materials based on its projected demand and manufacturing needs.
As of September 30, 2026, the Company had non-cancelable purchase obligations totaling approximately $293,187, out of which the Company recorded a provision for loss in the amount of $24,324.
As of September 30, 2026, the Company had contractual obligations for capital expenditures totaling approximately $14,347. These commitments reflect purchases of automated assembly lines and other machinery related to the Company’s general manufacturing process and are primarily for its new manufacturing sites in the U.S.
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.
As of September 30, 2026, the Company recorded an accrual of $15,399 for legal claims which was recorded under accrued expenses and other current liabilities.
On November 3, 2023, Daphne Shen, a purported stockholder of the Company, filed a proposed class action complaint for violation of federal securities laws, individually and putatively on behalf of all others similarly situated, in the U.S. District Court of the Southern District of New York against the Company, the Company’s former CEO and the Company’s former CFO. The complaint alleges violations of Section 10(b) and Rule 10b-5 of the Exchange Act, as well as violations of Section 20(a) of the Exchange Act against the individual defendants. The complaint seeks class certification, damages, interest, attorneys’ fees, and other relief. On December 13, 2023, Javier Cascallar filed a similar proposed class action. On January 2, 2024, six purported lead plaintiffs filed motions in the Shen litigation seeking to consolidate the Cascallar and Shen litigations and appoint lead plaintiffs and lead counsel pursuant to the procedures of the Private Securities Litigation Reform Act of 1995.
On February 7, 2024, the Court consolidated the two actions (the “Consolidated Securities Litigation”), and appointed co-lead plaintiffs (the “Plaintiffs”) and lead counsel. On April 22, 2024, the Plaintiffs filed an amended complaint adding two additional officers. The amended complaint made substantially similar allegations and claims. Defendants moved to dismiss the amended complaint on July 15, 2024 (the “Motion”), and the Motion was fully briefed as of September 17, 2024. On December 4, 2024, the Court issued an order granting in part the Motion, dismissing all allegations except those relating to two purported misstatements, characterizing inventory levels as low. The Court allowed the Plaintiffs to again amend their complaint, and they filed a second amended complaint (the “Second Amended Complaint”) on January 3, 2025. On February 10, 2025, Defendants moved to dismiss the Second Amended Complaint insofar as it attempts to resurrect any of the allegations dismissed in the Court’s December 4, 2024 order. On April 7, 2025, the Court issued an order granting in part the second motion to dismiss, dismissing all allegations except those characterizing inventory levels as “low” and those relating to demand in Europe. Lead Plaintiffs filed a motion for class certification on October 17, 2025, and Defendants filed their opposition on January 16, 2026. Plaintiffs’ reply was due on February 20, 2026. The parties held a mediation on February 5, 2026, but no resolution was reached at that time. On March 20, 2026, the mediator made a double-blind settlement recommendation of $55,000, which was accepted by both parties on March 26, 2026. On April 21, 2026, Lead Plaintiffs’ counsel submitted a motion for preliminary approval of the settlement. On August 24, 2026, the Court held a final settlement conference, and on August 26, 2026, the settlement was approved. The $55,000 settlement payment has been paid into an escrow account by SolarEdge’s insurance carriers, and as of September 30, 2026, the Company was legally released from the related liability. Therefore, during the quarter ended September 30, 2026, the Company derecognized the $55,000 provision for legal claims and the corresponding insurance recovery receivable. The Company and the individual defendants deny all allegations of wrongdoing, and the settlement does not constitute any admission of liability.
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | F - 23
On March 15, 2024, Abdul Hirani filed a purported derivative complaint (the “Hirani Complaint”) in the U.S. District Court for the Southern District of New York against certain current and former SolarEdge executive officers and board members, including Zvi Lando, Ronen Faier, Nadav Zafrir, Betsy Atkins, Marcel Gani, Dana Gross, Dirk Hoke, Avery More, and Tal Payne. The Hirani Complaint makes largely the same allegations as those in the Consolidated Securities Litigation. The Hirani Complaint brings claims for (i) breach of fiduciary duty, (ii) aiding and abetting breach of fiduciary duty, (iii) unjust enrichment, (iv) waste of corporate assets, and (v) securities fraud under Section 10(b) of the Exchange Act. The complaint seeks compensatory and punitive damages, interest, attorneys’ fees, and other relief.
On June 10, 2024, Jonathan Blaufarb filed a second purported derivative complaint (the “Blaufarb Complaint”) in the U.S. District Court for the Southern District of New York against the same defendants as those named in the Hirani Complaint as well as Lior Danziger and J.B. Lowe. The Blaufarb Complaint makes largely the same allegations as those in the complaint in the Consolidated Securities Litigation and seeks declaratory relief, corporate governance reforms, damages, restitution, attorneys’ fees, and other relief. It also pleads the same counts as those in the Hirani Complaint, as well as additional counts for abuse of control and gross mismanagement. Defendants accepted service of the Hirani and Blaufarb complaints via stipulation that was so-ordered on July 12, 2024, and the two cases were consolidated with the Hirani matter designated as the lead case (together, the “Consolidated Derivative Actions”). On September 9, 2024, the parties agreed to stay the Hirani and Blaufarb actions pending a decision on the motion to dismiss in the Consolidated Securities Litigation. Following the decision granting in part and denying in part the motion to dismiss the Second Amended Complaint in the Consolidated Securities Litigation, the parties entered into a new stipulation on June 20, 2025, staying this consolidated derivative action through the close of fact discovery in the Consolidated Securities Litigation.
On August 7, 2024, Edwin Isaac filed a purported derivative complaint (the “Isaac Complaint”) in the U.S. District Court for the District of Delaware against the same defendants as those named in the Consolidated Derivative Actions. The Isaac Complaint makes largely the same allegations as those in the Consolidated Securities Litigation. It also pleads the similar counts to those in the Consolidated Securities Litigation, including (i) breach of fiduciary duty, (ii) contribution, (iii) violation of Section 14(a) of the Exchange Act and SEC Rule 14a-9, (iv) unjust enrichment, (v) waste of corporate assets, and (vi) aiding and abetting breach of fiduciary duty. The complaint seeks declaratory relief, damages, interest, unspecified equitable relief, attorneys’ fees, and other relief. The parties filed a stipulation on June 30, 2025, agreeing to stay the Isaac matter through the close of fact discovery in the Consolidated Securities Litigation.
On May 22, 2025, Mike Maddox, a purported shareholder, filed a derivative complaint (the “Maddox Complaint”) in the U.S. District Court for the Southern District of New York against the same defendants as those named in the earlier-filed derivative actions. The Maddox Complaint makes largely the same allegations as those in the Consolidated Securities Litigation and the other derivative actions. It also pleads similar counts to those in the other derivative actions, including (i) breach of fiduciary duty, (ii) gross mismanagement, (iii) waste of corporate assets, (iv) unjust enrichment, and (v) violation of Section 14(a) of the Exchange Act. The parties filed a stipulation on July 21, 2025, agreeing to stay the Maddox Complaint through the close of fact discovery in the Consolidated Securities Litigation.
On September 9, 2025, Jerald F. Chauncey, Jr. filed a complaint (the “Chauncey Complaint”) in the Delaware Court of Chancery, against the same defendants as those named in the other derivative actions. The Chauncey Complaint makes largely the same allegations as those in the Consolidated Securities Litigation and other derivative actions. It also pleads similar counts to those in other derivative actions, including (i) breach of fiduciary duty, (ii) unjust enrichment, and (iii) waste of corporate assets. The parties filed a stipulation on October 7, 2025, agreeing to stay the Chauncey matter through the close of fact discovery in the Consolidated Securities Litigation.
On July 29, 2026, Sara Per (“Per”) filed a purported derivative complaint in the Delaware Court of Chancery against the same defendants as those named in the Consolidated Derivative Actions. The Per complaint makes largely the same allegations as those in the Consolidated Securities Litigation and the other derivative actions. It also pleads similar counts to those in the Consolidated Derivative Actions, including (i) breach of fiduciary duty, (ii) gross mismanagement, (iii) waste of corporate assets, and (iv) unjust enrichment. The parties intend to file a stipulation agreeing to stay the Per matter through the close of fact discovery in the Consolidated Securities Litigation.
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | F - 24
On July 30, 2026, Andres Bolin Rivera (“Rivera”) filed a purported derivative complaint in the U.S. District Court for the District of Delaware against the same defendants as those named in the Consolidated Derivative Actions. The Rivera complaint, which is currently filed under seal, likely makes largely the same allegations as those in the Consolidated Securities Litigation and the other derivative actions. The parties intend to file a stipulation agreeing to stay the Rivera matter through the close of fact discovery in the Consolidated Securities Litigation.
On September 15, 2025, Ampt, LLC (“Ampt”) filed a lawsuit in the District of Delaware seeking to enforce an agreement between Ampt and the Company. The Company had invoked a force majeure clause in relation to its performance of the agreement, valued at $54 million over a period of five years, in October 2023. The Company filed an answer on December 1, 2025, and the court ordered a disclosure schedule to begin in January 2026. The case is scheduled for trial on November 1, 2027. On January 5, 2026, the parties met for mediation, which has been inconclusive. Fact discovery commenced during the first half of 2026. The Company disputes the allegations and intends to vigorously defend against them.
On February 20, 2026, the Supreme Court of the United States invalidated certain tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”). Following the decision and subsequent actions by U.S. Customs and Border Protection (“CBP”), the Company became eligible to claim refunds of previously paid IEEPA-related duties. The Company accounts for refunds of previously paid IEEPA tariffs by applying a gain contingency model and recognizes such refunds only when the gain is realized or realizable. In the three and nine months ended September 30, 2026, the Company received and recognized refunds and associated interest from CBP related to tariffs paid during fiscal 2025 and the first quarter of fiscal 2026. The Company recognized $36,845 and $50,451 during the three and nine months ended September 30, 2026, respectively, of which $36,000 and $49,282, respectively, were recognized as reductions to cost of revenues, and $845 and $1,169, respectively, were recognized as interest income.
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | F - 25
NOTE 16: ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The following table summarizes the changes in accumulated other comprehensive income (loss), net of taxes:
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | F - 26
The following table summarizes the reclassification out of accumulated other comprehensive loss, net of taxes:
Affected Line Item in the
Statement of Loss
The following table presents the expenses (income) recorded in the three and nine months ended September 30, 2026 and 2025:
Three Months Ended September 30,
Nine Months EndedSeptember 30,
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | F - 27
NOTE 18: INCOME TAXES
For the three months ended September 30, 2026, the Company reported income taxes at an effective tax rate of negative 117.3%, including discrete items, compared to the three months ended September 30, 2025, where the Company reported income taxes at an effective tax rate of negative 5.4%.
For the nine months ended September 30, 2026, the Company reported income taxes at an effective tax rate of negative 9.2%, including discrete items, compared to the nine months ended September 30, 2025, where the Company reported income taxes at an effective tax rate of negative 5.4%.
The negative effective tax rate in the three and nine months ended September 30, 2026, resulted primarily from the valuation allowance on current losses and capital losses, coupled with profits in certain jurisdictions, as well as an increase in taxes resulting from non-deductible expenses and the write-off of a receivable related to prior years that was determined to be unrecoverable following the completion of the U.S. federal income tax audit for tax years 2021 through 2024, partially offset by a release of a provision for uncertain tax positions related to the completion of the audit. The negative effective tax rate in the corresponding periods in 2025 was mainly caused by the valuation allowance on current losses, coupled with withholding taxes incurred on certain intra-group interest payments and additional tax payable as a result of the settlement with the Israeli Tax Authority for tax years 2016–2018.
Deferred tax assets are evaluated for future realization and reduced by a valuation allowance to the extent that the Company believes they will not be realized. The Company considers all available evidence, including historical information, long-range forecast of future taxable income and evaluation of tax planning strategies. Amounts recorded for valuation allowance can result from a complex series of judgments about future events and can rely on estimates and assumptions. Based primarily on the negative evidence outweighing the positive evidence, including the Company’s three-year cumulative, consolidated GAAP loss, historical tax losses and the difficulty in forecasting excess tax benefits related to equity-based compensation, the Company believes there is uncertainty as to when it will be possible to utilize certain net operating losses (each an “NOL”), credit carryforwards, capital losses and other deferred tax assets. Therefore, the Company recorded a valuation allowance against the deferred tax assets for which it is more-likely-than-not they will not be realized.
Should the Company’s operating results improve and projections show continued utilization of the tax attributes, the Company would consider that as significant positive evidence and future reassessment may result in the determination that all or a portion of the valuation allowance is no longer required. If this were to occur, any reversal of the valuation allowance would result in a corresponding non-cash income tax benefit, thereby increasing total net deferred tax assets.
In July 2025, the One Big Beautiful Bill Act, or H.R.1, was enacted into law, making permanent key elements of the Tax Cuts and Jobs Act, including 100 percent bonus depreciation, domestic research cost expensing, increases the Advanced Manufacturing Investment credit (Section 48D of the IRC, originally enacted as part of the CHIPS Act) rate to 35 percent from 25 percent for qualifying assets and makes modifications to the international tax framework. The H.R.1 includes multiple effective dates, with certain provisions effective in 2025 and others phased in through 2027. Given the Company’s current loss position for income tax purposes, the provisions of H.R.1 did not have an impact on the current period. The Company continues to evaluate the provisions of H.R.1 that become effective in future years.
On October 1, 2025, the Governor of California signed Senate Bill 302 (“SB 302”) into law. SB 302 provides a gross income exclusion for taxpayers that either elect to receive direct payments from the Internal Revenue Service or receive payment from transfer of certain federal tax credits beginning tax years on or after January 1, 2026, and before January 1, 2031.
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | F - 28
NOTE 19: LOSS PER SHARE
The following table presents the computation of basic and diluted loss per share (“EPS”):
The following outstanding shares of common stock equivalents were excluded from the calculation due to their antidilutive nature:
Three Months EndedSeptember 30,
1 In conjunction with the issuance of the Notes 2029, in June 2024, the Company used approximately $25,230 of the net proceeds from this offering to pay the cost of the capped call transactions. In July 2024, following an additional issuance of the Notes 2029, $3,111 of net proceeds were used to pay the cost of capped call transactions. In accordance with ASC 260 “Earnings Per Share”, antidilutive contracts, such as purchased call options, are excluded from the computation of diluted net income (loss) per share. Accordingly, any potential impact resulting from the capped call transaction is excluded from the Company’s computation of diluted net income (loss) per share.
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | F - 29
NOTE 20: SEGMENT INFORMATION
The Company operates as one operating segment that constitutes consolidated results.
The Company’s Chief Executive Officer, who is the chief operating decision maker (the “CODM”), makes resource allocation decisions and assesses performance based on financial information presented on a consolidated net loss, accompanied by disaggregated information about significant expenses.
The CODM does not regularly review asset information and, therefore, the Company does not report asset information.
The segment includes the design, development, manufacturing, and sales of an intelligent inverter solution designed to maximize power generation at the individual PV module level and batteries. The segment solution consists mainly of the Company’s power optimizers, inverters, batteries and other smart energy management solutions.
The following tables present information on reportable loss for the periods presented:
1 Including stock-based compensation expenses.
2 Represents indirect costs of goods, consultants and sub-contractors, marketing, bad debt, impairments and dispositions.
The following table presents revenues disaggregated by geographical location:
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | F - 30
The following table presents revenues disaggregated by type:
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | F - 31
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Statements contained in this Form 10-Q or statements incorporated by reference from documents we have filed with the Securities and Exchange Commission may contain forward-looking statements that are based on our management’s expectations, estimates, projections, beliefs and assumptions and on information currently available to our management. The forward-looking statements should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included in Part 1, Item 1 of this report. This discussion contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, technology developments, new products and services, financing and investment plans, competitive position, backlog, industry and regulatory environment, effects of acquisitions, growth opportunities, potential future impairments, and the effects of competition. Forward-looking statements include statements that are not historical facts and can be identified by terms such as “anticipate,” “believe,” “could,” “seek,” “estimate,” “expect,” “intend,” “may,” "plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or similar expressions and the negatives of those terms.
Forward-looking statements inherently involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Given these uncertainties, you should not place undue reliance on forward-looking statements. Forward-looking and other statements regarding our sustainability efforts and aspirations are not an indication that these statements are necessarily material to investors or requiring disclosure in our filing with the Securities and Exchange Commission (“SEC”). In addition, historical, current and forward-looking sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve and assumptions that are subject to change in the future, including future rule-making. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this filing. Important factors that could cause actual results to differ materially from our expectations include:
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | 3
the other factors set forth below in Part II, Item 1A under “Risk Factors” and in Part I, Item 1A under ”Risk Factors” in our Annual Report on Form 10-K/A for the year ended December 31, 2025, and in other documents we file from time to time with the SEC that disclose risks and uncertainties that may affect our business.
The preceding list is not intended to be an exhaustive list of all of our forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | 4
Overview
We are a global smart energy technology company. We develop, manufacture and sell products that address a broad range of energy market segments through our diversified product offering, including residential, commercial and large scale PV, energy storage and backup solutions, EV charging capabilities, home energy management, grid services and virtual power plants. By leveraging engineering capabilities and focusing on innovation, safety and reliability, we create smart energy solutions that power our lives and drive future progress.
During 2026, we launched or ramped up sales of several new products. Most notably, we successfully launched SolarEdge Nexis, our next-generation residential product portfolio. In the third quarter of 2026, we continued the rollout of the platform in key markets.
In the C&I market, during the third quarter of 2026, we focused on ramping up the sales of our commercial energy storage business with the CSS-OD 107, a 107 kWh battery, featuring a 29.9 kW or 49.9 kW battery inverter output, scalable up to 2.1MW hour size sites and the CSS-OD 197, a 197 kWh battery, featuring a 50 kW or 100 kW battery inverter output, scalable up to 4MW hour size sites. Both are suitable for outdoor or indoor installations.
In addition, we continued the transition of our inverter products to a Single SKU concept. This is a software-defined platform that significantly reduces the complexity of our business for residential and commercial applications globally. It allows us to manufacture and ship one SKU of an inverter to the residential market, and minimal SKUs for the commercial market, which can then be programmed to the desired kilowatt rating in the field. This framework simplifies forecasting, manufacturing, inventory management, logistics, service and support, for both us and our customers. It also adds flexibility for home and business owners who can boost the inverter rating if a larger system is needed in the future.
In light of U.S. Federal incentives supporting domestic manufacturing and domestic content, including incentives initially enacted under the Inflation Reduction Act (the “IRA”), which incentivizes the local manufacturing of renewable energy products by providing benefits to installers for the purchase and installation of products with domestic content, as well as by incentivizing local manufacturing of our products, we manufacture the vast majority of our products in the United States. This includes inverters in Texas, power optimizers and inverters in Florida, and batteries in Utah. As part of our effort to streamline and centralize, we have discontinued manufacturing in China, Mexico, and Hungary. We continue to manufacture a minor portion of our products in Israel at our Sella 1 facility. We also continue to maintain manufacturing capabilities in Vietnam.
In the third quarter of 2026, we continued to strategically focus on our core markets and product lines to better align resources with markets and product lines that exhibit the strongest potential. As part of this strategic portfolio rationalization, we are concentrating our operations in key jurisdictions while discontinuing local activities in certain countries. Accordingly, we operate as one operating segment that constitutes consolidated results.
In parallel to our core business, we are developing a direct current (“DC”)-native, grid-to-rack power train solution for artificial intelligence (“AI”) data centers. The solution is designed to carry power from the medium-voltage grid connection through conversion, distribution and protection to the compute rack. At its core is a solid-state transformer (“SST”), which is designed to convert medium-voltage alternating current (“AC”) directly to an 800 volt DC (“VDC”) distribution bus at high efficiency. The solution is currently under development and has not yet been commercialized.
Our revenues for the three months ended September 30, 2026, and 2025 were $326.1 million and $340.2 million, respectively. Gross profit as a percentage of revenue for the three months ended September 30, 2026, and 2025 was 33.2% and 21.2%, respectively. Net loss for the three months ended September 30, 2026, and 2025 was $8.4 million and $50.1 million, respectively.
Our revenues for the nine months ended September 30, 2026, and 2025 were $982.8 million and $849.1 million, respectively. Gross profit as a percentage of revenue for the nine months ended September 30, 2026, and 2025 was 27.6% and 14.3%, respectively. Net loss for the nine months ended September 30, 2026, and 2025 was $96.5 million and $273.3 million, respectively.
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | 5
Global Circumstances Influencing our Business and Operations
Demand for Products
A prolonged softness in demand in the global market for PV products has continued to adversely impact the solar industry. Additionally, uncertainty related to changes in tariffs, trade restrictions and policies, legislation, and guidance, including from H.R.1, and proposed regulations in Germany that may negatively impact feed-in tariffs, may contribute to growing market volatility and adversely impact customer demand for our products, pricing and our financial performance. This softness in demand has led to a decrease in sales in the third quarter of 2026. We expect the softness in demand to continue in the fourth quarter of 2026 and there can be no assurance that our sales will not further decrease.
Impact of the H.R.1 on U.S. Tax Incentives
In August 2022, the U.S. government enacted the IRA, which contains several provisions intended to accelerate U.S. manufacturing and adoption of clean energy such as solar, wind, hydrogen and electric vehicles and therefore had positive impacts on our business and operations along with the overall U.S. solar market. Some of the applicable provisions in the IRA that positively impact the market for renewable energy include Section 48E, the tech-neutral investment tax credit (“ITC”), and 45Y, the production tax credit (“PTC”). The IRA includes incentives for residential and commercial solar customers and developers through the inclusion of ITCs for qualifying energy projects of up to 30% with a potential to gain further bonus credits such as through the utilization of Domestic Content. Section 45X of the IRA offers advanced manufacturing production credits (“AMPTCs”) that incentivize the production of eligible components within the United States. In light of such incentives, we established manufacturing capabilities in the United States starting in 2023 and further expanded such capabilities in 2024, 2025 and 2026. On October 24, 2024, the U.S. Internal Revenue Service (the “IRS”) and the U.S. Department of the Treasury (the “Treasury”) issued regulations regarding the application of Section 45X which contain details concerning eligibility, qualifying and accounting for AMPTCs for components produced and sold after December 31, 2022. Of particular relevance to us are the tax credits that we generate as a result of rules concerning the qualification and measurement of AMPTCs to Residential Inverters, Commercial Inverters and DC-Optimized Inverter Systems that we manufacture in the United States. In 2024 and 2025, and continuing into 2026, we sold a significant part of the AMPTCs that we generated from our U.S. production of eligible components.
On July 4, 2025, H.R.1 was enacted into law introducing amendments to the clean energy tax credits contained in the IRA. The IRA provides energy tax credits that are significant to us and our U.S. based customers, and material changes thereto could adversely affect our revenue, our eligibility for certain tax credits, tax credits available to our customers, competitiveness and demand for our products and our financial condition.
H.R.1 accelerated the phase-out timeline for certain credits, eliminated the 25D individual homeowner credit, and imposed new eligibility criteria. Among other changes, H.R.1 shortens the term of the ITC and PTC under Sections 48E and 45Y of the Internal Revenue Code (the “Code”), used by customers of SolarEdge who are engaged in third-party ownership (“TPO”) models, such as residential solar leases and power purchase agreements, and commercial solar customers and developers, shortening the end date from 2034 to 2027. H.R.1 also included a 12-month period in which such customers who began construction were given four years to complete their projects through the end of 2030. Projects begun after twelve months from enactment (July 4, 2026) of H.R.1 must be placed in service by December 31, 2027, to receive the credit. H.R.1 eliminated the individual residential tax credit under Section 25D of the Code at the end of 2025. These changes may negatively impact the eligibility of our customers and individuals to obtain tax credits, which may negatively affect the overall demand for our products.
H.R.1 also amends the domestic content bonus credit rules for Section 48E projects. Projects commencing construction after June 16, 2025, must meet a 45% domestic content threshold, up from 40%. Since January 1, 2026, such threshold was increased to 50% and shall thereafter increase to 55% starting on January 1, 2027. H.R.1 also introduced restrictions relating to material assistance from Prohibited Foreign Entities (“PFEs”) for Sections 45X, 45Y and 48E of the Code. These rules generally require applicable facilities, energy storage technologies and eligible components to satisfy specified material assistance cost ratio requirements that increase over time. Currently, we manufacture components aimed at helping our customers meet their non-PFE percentage requirements. However, if the Treasury were to release new rules or guidance that impact our ability to provide components with non-PFE percentages towards their total requirement, our customers’ eligibility to qualify for certain tax credits could be impaired, which may adversely affect our revenue, gross margins, business operations and competitive position. In addition, as of January 1, 2026, in order to receive the AMPTC, manufacturers must also reach a required percentage of non-PFE content in their manufactured components. Today, we meet the required threshold. However, if the Treasury guidance relating to the calculation of non-PFE content should change in a way that would impact our ability to reach that required percentage, it could have adverse impacts on our manufacturing costs, results of operations, cash flows, gross margin, and profits.
On August 15, 2025, the Treasury and the IRS released Notice 2025-42, its first set of guidance for H.R.1 related to the beginning of construction requirements applicable to our customers. While it removed the ability for projects over 1.5 MW to utilize the 5% safe harbor method (still allowing projects equal to or less than 1.5 MW to continue using it), it kept in place the physical work test method for all projects.
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | 6
On February 12, 2026, the U.S. Department of Treasury and IRS released IRS Notice 2026-15 providing additional guidance on H.R.1 related to the PFE rules enacted in H.R.1. Specifically, this notice confirms the ability to rely on temporary safe harbor tables and existing safe harbor tables for the determination of material assistance from a PFE. This guidance provides answers to several compliance questions related to our AMPTC material assistance calculations and its customers’ 48E material assistance calculation among other things. While this removed some uncertainty around the Material Assistance Cost Ratio calculation, the Treasury and the IRS have indicated that they intend to issue proposed regulations and additional guidance regarding the PFE and material assistance requirements, which may include additional safe harbor tables. Such future regulations or guidance could affect the determination of our eligibility for AMPTCs and our customers’ eligibility for Sections 45Y and 48E credits. If we are unable to meet the requirements this may adversely affect our revenue, or our customers’ eligibility to obtain certain tax credits, the overall demand for our products, our results of operations, cash flows, gross margins and profits.
To the extent that tax benefits or credits may be impacted through new regulation, issued guidance, interpretation, or by new laws passed by Congress, our business could be disadvantaged or advantaged. Reductions in AMPTCs, without an offsetting reduction in our manufacturing costs, would adversely affect our results of operations and cash flows, and have an adverse impact on our gross margin, which may include transitioning into a gross loss. We continue to monitor the benefits that may be available to us, such as the availability of tax credits for domestic manufacturers.
Trade, Tariff, and Regulatory Uncertainties
The current trade environment continues to create uncertainty regarding the impact of tariffs, trade restrictions and retaliatory measures on our business, the solar industry, our suppliers, and our customers.
On February 20, 2026, the Supreme Court of the United States (the “U.S. Supreme Court”) invalidated certain tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”). Following the decision and subsequent actions by the U.S. Customs and Border Protection (“CBP”), we became eligible to claim refunds of previously paid IEEPA-related duties. In the three and nine months ended September 30, 2026, we received and recognized refunds and associated interest from CBP related to tariffs paid during fiscal 2025 and the first quarter of fiscal 2026. We recognized $36.8 million and $50.5 million during the three and nine months ended September 30, 2026, respectively, of which $36.0 million and $49.3 million, respectively, was recognized as a reduction to cost of revenues and $0.8 million and $1.2 million, respectively, was recognized as interest income. We continue to pursue refunds of additional IEEPA-related duties. The availability and timing of any remaining refunds are subject to applicable CBP procedures and ongoing judicial proceedings, and we cannot provide assurance regarding the amount or timing of any additional amounts that we may recover.
In addition, following the U.S. Supreme Court’s ruling, the U.S. Administration imposed a temporary 10% import surcharge under Section 122 of the Trade Act of 1974 (“Section 122”) on substantially all imports, subject to certain exceptions. The surcharge took effect on February 24, 2026, and expired in July 2026, upon reaching the statutory 150-day limit. On May 7, 2026, the U.S. Court of International Trade held that the Section 122 proclamation was invalid and granted relief to certain plaintiffs. The U.S. Government appealed the decision, and the U.S. Court of Appeals for the Federal Circuit subsequently stayed the judgment pending resolution of the appeal. If the Section 122 proclamation is ultimately held invalid and we become entitled to refunds, we may be eligible to recover some or all of the Section 122 duties previously paid. However, our eligibility for, and the timing and amount of, any such refunds remain uncertain and may depend on further judicial and administrative proceedings.
Effective July 24, 2026, the United States imposed additional tariffs under Section 301 of the Trade Act of 1974 (“Section 301”) on imports from 60 economies in connection with the Office of the United States Trade Representative (“USTR”) investigations relating to the failure of those economies to impose and effectively enforce prohibitions on imports produced with forced labor. The measures generally impose additional duties of 10% or 12.5%, subject to country-specific treatment and specified product exclusions and exemptions. These tariffs are in addition to existing tariff measures, including certain Section 301 tariffs applicable to imports from China. Other trade-related duties may also affect the products, components and raw materials used in our business.
On July 28, 2026, the FCC updated its “Covered List,” maintained under the Secure and Trusted Communications Networks Act, to include certain power inverters produced in foreign countries, which generally prevents covered new inverter models from receiving FCC equipment authorizations required for their importation and sale in the United States. On August 20, 2026, the FCC modified the Covered List entry for power inverters following an updated national security determination, including to exclude from the applicable restrictions certain foreign-produced power inverters that are eligible for the advanced manufacturing production credit under Section 45X of the Code, as well as power inverters that qualify as domestic end products under the applicable Buy American Act standard. The FCC also revised the scope of power inverters covered by the restriction. The FCC’s restrictions generally do not affect inverter models that received the applicable FCC authorization prior to July 28, 2026, although certain modifications or updates to previously authorized models may require further FCC review under the requirements then in effect. Based on the current requirements, we believe that our inverter products continue to be eligible for sale and installation in the United States. However, further changes to the Covered List or its interpretation, as well as the application of the applicable requirements to modifications or updates to previously authorized models, could affect our ability to obtain required FCC authorizations for future products.
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | 7
We have relocated our contract manufacturing to the United States, where we now manufacture the substantial majority of our products. We continue to manufacture a minor portion of our products in Israel at our Sella 1 facility and also continue to maintain manufacturing capabilities in Vietnam. Certain components and subcomponents used in our products continue to be sourced from suppliers outside the United States, including from China. Consequently, our cost structure may be affected by existing or future tariffs and other trade measures, including trade restriction orders. In addition, retaliatory measures imposed by other countries on products exported from the United States could adversely affect our international sales. In response to the evolving trade environment, we continue to evaluate and adjust our supply chain and sourcing strategies, including efforts to diversify suppliers and reduce tariff exposure where economically and operationally feasible. However, there can be no assurance that such efforts will fully mitigate the impact of current or future tariffs, trade restrictions or other trade-related measures, and any resulting increases in costs, supply chain disruptions or reductions in demand could adversely affect our business, financial condition and results of operations.
If tariffs or other trade measures increase the cost of our products or other components of solar power systems, solar power systems could become less economically attractive, which could reduce demand for our products and adversely affect our gross margins. Additionally, existing or future tariffs may negatively affect key partners, suppliers and manufacturers. Such outcomes could adversely affect the amount or timing of our revenue, results of operations or cash flows, and continuing uncertainty could cause sales volatility, price fluctuations or supply shortages or cause our customers to advance or delay their purchase of our products. Any such developments could materially and adversely affect our business operations, results of operations and cash flows.
Separately, in Europe, on July 29, 2026, the German federal cabinet proposed a draft amendment to the German Renewable Energy Sources Act (the “EEG”) that, if enacted, among other things, would phase out the fixed feed-in tariff for certain rooftop solar systems. The draft remains subject to review by the German parliament and to EU approval, and the final content and timing of any legislation are uncertain. If enacted as proposed, reduced feed-in tariff support could lower demand for new residential solar installations in Germany and, as a result, for our products. We cannot predict whether, when or in what form the proposed legislation will be adopted or its ultimate effect on our business.
Disruptions Due to the War in Israel
Due to the war in Gaza that began on October 7, 2023, followed by additional military conflicts with Iran and Hezbollah in Lebanon during 2024, 2025 and the first nine months of 2026, some of our employees in Israel were called to active reserve duty and additional employees may be called in the future, if needed. In the three months ended September 30, 2026, approximately 5% of our employees in Israel were called to active reserve duty for varying periods. Despite the ceasefire framework agreed between Israel, Hamas, the United States and other countries in the region and the moderation of the hostilities involving Israel, Iran, Yemen and Lebanon, it is unknown whether any ceasefires or periods of relative calm will endure, or if other conflicts will reemerge or escalate in the future.
While our offices and facilities worldwide, including in Israel, remain open and, to date, we have not had material disruptions to our ability to manufacture and deliver products and services to customers, a reemergence of conflicts in Israel could materially adversely affect our business, financial condition, and results of operations. Due to the ongoing and evolving nature of the conflict in Israel, and the extent of these events, the adverse effect on our business operations is still unknown.
The majority of our key employees and officers are residents of Israel. If any of our facilities in Israel were to be damaged, destroyed or otherwise rendered unable to operate, whether due to war, acts of hostility, earthquakes, fire, floods, storms, other natural disasters, employee malfeasance, terrorist acts, power outages or otherwise, or if performance of our research and development is disrupted for any other reason, such an event could delay commercialization of our products, and if we choose to manufacture all or any part of them internally, jeopardize our ability to manufacture our products as promptly as our prospective customers will likely expect, or possibly at all. If we experience delays in achieving our development objectives within a timeframe that meets our prospective customers’ expectations, our business, prospects, financial results and reputation could be harmed.
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | 8
Performance Measures
In managing our business and assessing financial performance, we supplement the information provided by our financial statements with other operating metrics. These operating metrics are utilized by our management to evaluate our business, measure our performance, identify trends affecting our business and formulate projections. We provide the following metrics: (i) inverters recognized as revenue; (ii) power optimizers recognized as revenue; and (iii) Megawatt hours (MWh) of batteries recognized as revenue.
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | 9
Results of Operations
The results of operations presented below should be reviewed in conjunction with the condensed consolidated financial statements and related notes included elsewhere in this report.
The following table sets forth selected consolidated statements of loss data for each of the periods indicated.
Comparison of three and nine months ended September 30, 2026, and the three and nine months ended September 30, 2025
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | 10
Revenues
Revenues decreased by $14.1 million, or 4.1%, in the three months ended September 30, 2026, compared to the three months ended September 30, 2025, primarily due to (i) a decrease of $73.8 million in the number of inverters and optimizers sold; partially offset by (i) an increase of $48.8 million related to the higher volume of batteries sold, in MWh, and higher number of battery accessories sold; and (ii) an increase of $9.9 million related to higher number of ancillary solar products sold.
Revenues from outside of the U.S. comprised 55.3% of our revenues in the three months ended September 30, 2026 compared to 40.3% in the three months ended September 30, 2025.
The number of power optimizers recognized as revenues decreased by approximately 0.6 million units, or 20.1%, from approximately 2.9 million units in the three months ended September 30, 2025, to approximately 2.4 million units in the three months ended September 30, 2026. The number of inverters recognized as revenues decreased by approximately 6.3 thousand units, or 6.8%, from approximately 92.7 thousand units in the three months ended September 30, 2025, to approximately 86.4 thousand units in the three months ended September 30, 2026. The megawatt hours of batteries recognized as revenues increased by approximately 158.0 megawatt hours, or 68.7%, from approximately 230.0 in the three months ended September 30, 2025, to approximately 388.0 megawatt hours in the three months ended September 30, 2026.
Revenues increased by $133.7 million, or 15.8%, in the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, primarily due to (i) an increase of $163.9 million related to the higher volume of batteries sold, in MWh, and higher number of battery accessories sold; (ii) an increase of $37.0 million related to higher number of ancillary solar products sold and (iii) an increase of $11.8 million related to an increase in communication products sold; these were partially offset by (i) a decrease of $59.7 million in the number of inverters and optimizers sold; and (ii) a decrease of $15.3 million in revenues due to the discontinuation of our Energy Storage Business.
Revenues from outside of the U.S. comprised 53.3% of our revenues in the nine months ended September 30, 2026, compared to 38.7% in the nine months ended September 30, 2025.
The number of power optimizers recognized as revenues decreased by approximately 0.4 million units, or 5.5%, from approximately 7.7 million units, in the nine months ended September 30, 2025, to approximately 7.3 million units in the nine months ended September 30, 2026. The number of inverters recognized as revenues decreased by approximately 51.3 thousand units, or 20.5%, from approximately 250.8 thousand units in the nine months ended September 30, 2025, to approximately 199.5 thousand units in the nine months ended September 30, 2026. The megawatt hours of batteries recognized as revenues increased by approximately 528.0 megawatt hours, or 85.6%, from approximately 617.0 megawatt hours in the nine months ended September 30, 2025, to approximately 1,145.0 megawatt hours in the nine months ended September 30, 2026.
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | 11
Cost of Revenues and Gross Profit
Cost of revenues decreased by $50.2 million, or 18.7%, in the three months ended September 30, 2026, compared to the three months ended September 30, 2025, primarily due to a decrease in the direct cost of revenues sold of $75.3 million associated mainly with an increase in AMPTC and IEEPA refunds recognized; excluding such AMPTC incentives would have caused us to transition into a gross loss, for both periods presented. This was partially offset by an increase of $22.6 million in indirect costs of revenue primarily related to inventory write-down accruals.
Gross profit as a percentage of revenue was 33.2% in the three months ended September 30, 2026, compared to 21.2%, in the three months ended September 30, 2025, primarily due to an improvement in the direct cost of revenue of approximately 13.1% associated primarily to IEEPA refunds recognized.
Excluding the AMPTC incentives would have caused our gross profit as a percentage of revenue to transition from a gross profit to a gross loss.
Cost of revenues decreased by $16.1 million, or 2.2%, in the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, primarily due to:
These were partially offset by an increase of $48.2 million in indirect costs of revenue primarily related to inventory write-down accruals.
Gross profit as a percentage of revenue was 27.6% in the nine months ended September 30, 2026, compared to 14.3% in the nine months ended September 30, 2025, primarily due to:
These were partially offset by an increase in inventory write-down accruals of approximately 4.0%.
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | 12
Operating Expenses:
Research and Development, net
Research and development, net costs decreased by $1.7 million, or 3.1%, in the three months ended September 30, 2026, compared to the three months ended September 30, 2025, primarily due to:
These were partially offset by:
Research and development, net costs decreased by $14.1 million or 8.3%, in the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, primarily due to:
These were partially offset by an increase in other directly related overhead costs of $3.0 million.
Sales and Marketing
Sales and marketing expenses decreased by $0.5 million, or 1.7%, in the three months ended September 30, 2026, compared to the three months ended September 30, 2025, primarily due to:
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | 13
These were partially offset by an increase in personnel-related costs of $1.5 million mainly driven by the weakening of the U.S. dollar against the NIS.
Sales and marketing expenses decreased by $6.1 million, or 7.0%, in the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, primarily due to:
General and Administrative
General and administrative expenses increased by $2.1 million, or 8.1%, in the three months ended September 30, 2026, compared to the three months ended September 30, 2025, primarily due to an increase in personnel-related costs of $3.2 million resulting mainly from an increase in salary expenses associated with employee stock-based compensation, as well as the weakening of the U.S. dollar against the NIS;
This was partially offset by a decrease in the credit loss expenses of $1.0 million.
General and administrative expenses increased by $13.1 million, or 17.2%, in the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, primarily due to:
This was partially offset by:
Other operating expense (income), net
Other operating expenses, net, was $2.5 million in the three months ended September 30, 2026, compared to other operating income, net, of $0.3 million in the three months ended September 30, 2025, primarily due to an increase of $3.1 million due to loss from sale of the light commercial vehicle e-Mobility activity.
Other operating expenses, net, decreased by $23.4 million, in the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, primarily due to:
These were partially offset by an increase related to $9.6 million losses from sale and disposal of property, plant and equipment for the nine months ended September 30, 2026, compared to $10.1 million related to gains recognized from sale of property, plant, and equipment in the nine months ended September 30, 2025.
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | 14
Financial income (expense), net
Financial expense, net, was $2.0 million in the three months ended September 30, 2026, compared to financial income, net, in the amount of $3.0 million in the three months ended September 30, 2025, primarily due to:
These were partially offset by an increase of $3.5 million in foreign currency gains, primarily attributable to fluctuations in the Euro and NIS relative to the U.S. dollar;
Financial expense, net was $15.4 million in the nine months ended September 30, 2026, compared to financial income, net in the amount of $5.8 million in the nine months ended September 30, 2025, primarily due to:
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | 15
Other expense, net
Other expense, net decreased by $15.0 million in the three months ended September 30, 2026, compared to the three months ended September 30, 2025, primarily as the prior-year period included loss from impairment of private held company.
Other expense, net, decreased by $10.8 million in the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, primarily as the prior-year periods included a $15.0 million loss from impairment of a privately held company, which was partially offset by $4.0 million income from sale of an investment in a privately held company.
Income taxes
Income taxes increased by $2.0 million in the three months ended September 30, 2026, compared to the three months ended September 30, 2025. The increase is primarily due to higher income recorded in subsidiaries in the three months ended September 30, 2026, as well as a receivable related to prior years that was determined to be unrecoverable and was written off following the conclusion of the Federal income tax audit for tax years 2021 through 2024, partially offset by a release of a provision for uncertain tax positions related to the completion of the audit.
Income taxes decreased by $5.8 million in the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025. The decrease was primarily attributable to certain tax expenses recognized during the nine months ended September 30, 2025, that did not recur in the corresponding period in 2026, including withholding taxes on certain intercompany interest payments and additional tax payable in connection with a settlement with the Israeli Tax Authority for tax years 2016 through 2018. The decrease was also attributable to the release of our provision for uncertain tax positions in the U.S. during the nine months ended September 30, 2026, following the conclusion of the Federal income tax audit for tax years 2021 through 2024.
Net loss from equity method investments
Net loss from equity method investments decreased in the three and nine months ended September 30, 2026, compared to the three and nine months ended September 30, 2025, as the prior-year periods included an impairment of our equity investment.
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | 16
Net loss
As a result of the factors discussed above, net loss decreased by $41.7 million in the three months ended September 30, 2026, compared to the three months ended September 30, 2025.
As a result of the factors discussed above, net loss decreased by $176.8 million in the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025.
Liquidity and Capital Resources
The following table shows our cash flows from operating activities, investing activities, and financing activities for the stated periods:
As of September 30, 2026, our cash and cash equivalents were $555.1 million. This amount excludes $42.7 million of restricted cash. Our principal uses of cash are for funding our operations, capital expenditures, other working capital requirements and other investments. As of September 30, 2026, we have open commitments for capital expenditures in an amount of approximately $14.3 million. These commitments mainly reflect purchases of automated assembly lines and other machinery related to our manufacturing and operations. We also have purchase obligations in the amount of $293.2 million, related to raw materials and commitments for the future manufacturing of our products.
As of September 30, 2026, we had a non-cancelable lease commitment for the initial term of a lease of approximately $264.5 million for new offices in Israel, which has not yet commenced. The lease is expected to commence by the end of 2026. The initial term of the lease agreement is 15 years commencing on the transfer of possession, with an option to extend the lease for additional periods of up to 10 years, subject to the conditions of the lease agreement. In November 2025, we amended our lease agreement to reduce the leased area. In connection with the amendment, we agreed to make a lease modification payment of $28.8 million, which is accounted for as prepaid lease consideration under Accounting Standards Codification 842, “Leases”. The full amount had been paid as of September 30, 2026.
Beginning in the fourth quarter of 2024, we started to sell AMPTCs to third parties pursuant to tax credit agreements. We plan to pursue additional tax credit sales in the future. Our inability to complete sales or delays in doing so may affect the timing of our cash inflows. Failing to sell AMPTCs could result in significant delays in the realization of the credits’ value, and would have a material negative effect on our liquidity.
We believe that cash provided by operating activities, as well as our cash and cash equivalents, and our RCF (defined below) with the Bank (defined below) will be sufficient to meet our anticipated cash needs for at least the next 12 months as well as in the longer term, including the self-funding of our capital expenditure, operational commitments and the redemption of our debts.
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | 17
Operating Activities
Operating cash flows consist primarily of net loss, adjusted for certain non-cash items and changes in assets and liabilities. Cash provided by operating activities was $56.2 million in the nine months ended September 30, 2026, compared to $51.6 million in the nine months ended September 30, 2025, primarily driven by a lower net loss, adjusted for certain non-cash items, partially offset by higher working capital needs.
Investing Activities
Investing cash flows consist primarily of capital expenditures, investment in, sales and maturities of available-for-sale marketable securities, investment and withdrawal of bank deposits and restricted bank deposits, cash used for acquisitions, proceeds from sale of business and equity investments, and disbursements and receipts from collections of loans made by us. Cash used in investing activities was $11.4 million in the nine months ended September 30, 2026, as compared to cash provided by investing activities of $371.8 million in the nine months ended September 30, 2025, primarily driven by a decrease of $721.1 million in proceeds provided by maturities and sales of available-for-sale marketable securities, a decrease of $50.7 million in proceeds from loan receivables, a decrease of $37.4 million in proceeds from sale of property, plant and equipment and an increase of $26.2 million in payments made before lease commencement; these were partially offset by a decrease of $454.6 million in purchases of available-for-sale marketable securities.
Financing Activities
Financing cash flows consist primarily of issuance, repayment and partial repurchase of convertible senior notes, proceeds from and repayment of our RCF, and our employee equity incentive plans. Cash used in financing activities was $0.1 million in the nine months ended September 30, 2026, compared to $349.5 million in the nine months ended September 30, 2025, primarily due to a decrease of $342.3 million in cash used due to the repayment of our Notes 2025, a decrease of $5.1 million in cash used for the repurchase of our Notes 2025, and an increase of $3.6 million related to issuance of common stock upon exercise of stock-based awards; these were partially offset by an increase of $3.1 million related to tax withholding in connection with stock-based awards, net.
Accounts Receivable Factoring Arrangement
Our Israeli subsidiary, SolarEdge Technologies, Ltd. (the “Israeli Subsidiary”), entered into an agreement with a third-party financial institution (the “Bank”), to sell certain trade accounts receivable. During the nine months ended September 30, 2026, we sold trade receivables totaling $11.7 million and incurred related interest and fees of $0.1 million, which were recorded in financial income (expense), net. For additional information, see Note 1g of our condensed consolidated financial statements.
Revolving Credit Facility
On August 27, 2026, our Israeli Subsidiary entered into a $50.0 million revolving credit facility (the “RCF”) with the Bank, to fund our working capital needs. The RCF is secured by the Israeli Subsidiary, us, and SolarEdge Technologies, Holdings Inc., our wholly owned subsidiary and the Israeli Subsidiary direct parent (“SolarEdge Holdings”), and is guaranteed on an unlimited basis by us and SolarEdge Holdings. As of September 30, 2026, we had $50.0 million available under the RCF and were in compliance with the applicable financial covenants. For additional information, see Note 11, “Revolving Credit Facility”, of our condensed consolidated financial statements.
Convertible Senior Notes
On June 28, 2024, we sold an aggregate principal amount of $300 million of 2.25% convertible senior notes due in 2029 (the “Notes 2029”) in a transaction exempt from registration pursuant to Rule 144A and Regulation S under the Securities Act (the “Notes 2029 Offering”). The net proceeds from the Notes 2029 Offering were approximately $293.2 million after deducting fees and estimated expenses. Separately, we have entered into capped call transactions. We used approximately $25.2 million of the net proceeds from the Notes 2029 Offering to pay for the cost of the capped call transactions and approximately $267.9 million of the net proceeds from the Notes 2029 Offering to repurchase $285.0 million of our outstanding 0.00% convertible notes due 2025 (the “Notes 2025”). We intend to use the remainder of the net proceeds from the Notes 2029 Offering for general corporate purposes.
On July 8, 2024, we sold an aggregate principal amount of $37 million of the Notes 2029. The Notes 2029 were sold pursuant to the exercise of options granted by us to several initial purchasers of the Notes 2029 represented by Goldman Sachs & Co. LLC to purchase additional Notes 2029. For additional information, please see Note 12, “Convertible Senior Notes”, of our condensed consolidated financial statements.
In March 2025 we repurchased $5.2 million principal amount of our Notes 2025. We recorded a net gain of $146 thousand under other income, net from this repurchase. We settled all of our outstanding Notes 2025 on September 15, 2025. As part of the settlement, we paid $342.3 million in cash towards principal amount of the Notes 2025 and no shares were issued in connection with the settlement as the conversion value was less than the principal amounts of the Notes 2025.
Critical Accounting Policies and Significant Management Estimates
Management believes that there have been no significant changes during the nine months ended September 30, 2026, to the items that we disclosed as our critical accounting policies and estimates in MD&A in our Annual Report on Form 10-K/A for the fiscal year ended December 31, 2025, except as mentioned in Note 1, “General,” of our condensed consolidated financial statements (if any).
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | 18
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risk in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily a result of fluctuations in foreign currency exchange rates, customer concentrations, interest rates and commodity prices. We do not hold or issue financial instruments for trading purposes.
Foreign Currency Exchange Risk
Approximately 48.5% and 34.9% of our revenues for the nine months ended September 30, 2026 and 2025, respectively, were earned in non-U.S. dollar denominated currencies other than the U.S. dollar, principally the Euro. Our expenses are generally denominated in the currencies in which our operations are located, primarily the U.S. dollar, NIS, and Euro. Our NIS denominated expenses consist primarily of personnel and overhead costs. Our consolidated results of operations and cash flows are, therefore, subject to fluctuations due to changes in foreign currency exchange rates and may be adversely affected in the future due to changes in foreign exchange rates. A hypothetical 10% change in foreign currency exchange rates between the Euro and the U.S. dollar would increase or decrease our net loss by $18.6 million for the nine months ended September 30, 2026. A hypothetical 10% change in foreign currency exchange rates between NIS and the U.S. dollar would increase or decrease our net loss by $36.1 million for the nine months ended September 30, 2026.
For purposes of our consolidated financial statements, local currency assets and liabilities are translated at the rate of exchange to the U.S. dollar on the balance sheet date, and local currency revenues and expenses are translated at the exchange rate as of the date of the transaction or at the average exchange rate to the U.S. dollar during the reporting period.
To date, we have used derivative financial instruments, specifically foreign currency forward contracts and put and call options, to manage exposure to foreign currency risks by hedging portions of the anticipated payroll payments denominated in NIS. These derivative instruments are designated as cash flow hedges.
In addition, from time to time we enter into derivative financial instruments to hedge our exposure to currencies other than the U.S. dollar, mainly forward contracts to sell Euro for U.S. dollars. These derivative instruments are not designated as cash flow hedges.
Concentrations of Major Customers
Our trade accounts receivables potentially expose us to a concentration of credit risk with our major customers. As of September 30, 2026, two major customers accounted for approximately 27.2% of our consolidated trade receivables, net balance. As of December 31, 2025, three major customers accounted for approximately 45.5% of our consolidated trade receivables, net balance. For the three months ended September 30, 2026, three major customers accounted for approximately 32.3% of our total revenues. For the three months ended September 30, 2025, one major customer accounted for approximately 23.1% of our total revenues. For the nine months ended September 30, 2026, two major customer accounted for approximately 24.0% of our total revenues. For the nine months ended September 30, 2025, two major customers accounted for approximately 32.4% of our total revenues.
Commodity Price Risk
We are subject to risk from fluctuating market prices of certain commodity raw materials which are used in our products, including Copper, Lithium, Nickel and Cobalt. Prices of these raw materials may be affected by supply restrictions or other market factors from time to time, and we do not enter into hedging arrangements to mitigate commodity risk. Significant price changes for these raw materials could reduce our operating margins if we are unable to recover such increases from our customers, and could harm our business, financial condition, and results of operations.
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | 19
ITEM 4. Controls and Procedures.
Disclosure Controls and Procedures
Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of September 30, 2026. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Based on that evaluation, our chief executive officer and chief financial officer concluded, as of September 30, 2026, that our disclosure controls and procedures were effective and operating to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and to provide reasonable assurance that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
We substantially completed the implementation of our new ERP system during the fiscal quarter ended June 30, 2025. We are performing our post-implementation activities. The implementation of that ERP system is expected to, among other things, improve user access security and automate a number of accounting, back office and reporting processes and activities, thereby decreasing the amount of manual processes previously required. The implementation resulted in, and the post-implementation activities may result in, changes to certain of our processes and procedures. These changes have been and will continue to be subject to our evaluation of the operating effectiveness of internal controls over financial reporting. Except for the implementation of the new ERP system as described in this paragraph, there have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that occurred during the quarter ended September 30, 2026, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | 20
PART II. OTHER INFORMATION.
ITEM 1. Legal Proceedings
In the normal course of business, we may from time to time be named as a party to various legal claims, actions and complaints (including as a result of initiating such legal claims, action or complaints on behalf of the Company), including the matters described in Note 15, “Commitments and Contingent Liabilities”, of our condensed consolidated financial statements in this Quarterly Report on Form 10-Q and in Item 3 – “Legal Proceedings” of our Annual Report on Form 10-K/A for the fiscal year ended December 31, 2025. It is impossible to predict with certainty whether any resulting liability from any such legal claims, actions or complaints would have a material adverse effect on our financial position, results of operations or cash flows.
ITEM 1A. Risk Factors
In addition to the other information set forth in this report, you should carefully consider the risks set forth below and the risk factors as described in Part I, Item 1A, “Risk Factors”, in our Annual Report on Form 10-K/A for the year ended December 31, 2025 (the “2025 Form 10-K/A”), Part II, Item 1A, “Risk Factors,” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 (the “Q1 2026 Form 10-Q”), and Part II, Item 1A, “Risk Factors,” in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 (together with the Q1 2026 Form 10-Q, the “Prior 2026 Forms 10-Q”). Other than the risk factors set forth below, there have been no material changes to the risk factors previously disclosed in the 2025 Form 10-K/A and Prior 2026 Forms 10-Q.
Changes in the global trade environment, including the United States trade environment, such as the increase or imposition of import tariffs, could adversely affect the amount or timing of our revenue, results of operations or cash flows.
We depend on the ongoing availability of certain raw materials and components to assemble our products. Since 2025, the United States has imposed significant new tariffs on a broad range of imported products and components and may adopt additional tariffs, trade restrictions or other measures in the future. Although certain tariffs previously imposed under the International Emergency Economic Powers Act were invalidated by the Supreme Court of the United States (the “U.S. Supreme Court”) in February 2026 and subsequently rescinded, other trade measures remain in effect or have been implemented as replacements.
In particular, following the U.S. Supreme Court’s ruling, the U.S. Administration imposed a temporary 10% import surcharge under Section 122 of the Trade Act of 1974 (“Section 122”) on substantially all imports, subject to certain exceptions. The surcharge took effect on February 24, 2026 and expired in July 2026 upon reaching the statutory 150-day limit. On May 7, 2026, the U.S. Court of International Trade held that the Section 122 proclamation was invalid and granted relief to certain plaintiffs. The U.S. Government appealed the decision, and the U.S. Court of Appeals for the Federal Circuit subsequently stayed the judgment pending resolution of the appeal. If the Section 122 proclamation is ultimately held invalid and we become entitled to refunds, we may be eligible to recover some or all of the Section 122 duties previously paid. However, our eligibility for, and the timing and amount of, any such refunds remain uncertain and may depend on further judicial and administrative proceedings.
Most recently, upon the expiration of Section 122 tariffs on July 24, 2026, the U.S. Administration imposed additional tariffs under Section 301 of the Trade Act of 1974 (“Section 301”) on imports from 60 economies in connection with the Office of the United States Trade Representative (“USTR”) investigations relating to the failure of those economies to impose and effectively enforce prohibitions on imports produced with forced labor. The measures generally impose additional duties of 10% or 12.5%, subject to country-specific treatment and specified product exclusions and exemptions. These tariffs are in addition to certain existing duties and may apply alongside other trade measures, including Section 301 tariffs applicable to imports from China, tariffs under Section 232 of the Trade Expansion Act of 1962, antidumping and countervailing duties, and any future tariffs or trade restrictions that may be adopted. As with the Section 122 surcharge discussed above, these Section 301 tariffs may also be subject to legal challenge, and we cannot predict the outcome of any such challenge or its effect on our tariff exposure.
In addition, on July 28, 2026, the Federal Communications Commission (the “FCC”) updated its “Covered List,” maintained under the Secure and Trusted Communications Networks Act, to include certain power inverters produced in foreign countries, which generally prevents covered new inverter models from receiving the FCC equipment authorizations required for their importation and sale in the United States. On August 20, 2026, the FCC modified the Covered List entry for power inverters following an updated national security determination, including to exclude from the applicable restrictions certain foreign-produced power inverters that are eligible for the advanced manufacturing production credit under Section 45X of the Internal Revenue Code, as well as power inverters that qualify as domestic end products under the applicable Buy American Act standard. The FCC also revised the scope of power inverters covered by the restriction. The FCC's restrictions generally do not affect inverter models that received the applicable FCC authorization prior to July 28, 2026, although certain modifications or updates to previously authorized models may require further FCC review under the requirements then in effect. Based on the current requirements, we believe that our inverter products continue to be eligible for sale and installation in the United States. However, further changes to the Covered List or its interpretation, as well as the application of the applicable requirements to modifications or updates to previously authorized models, could affect our ability to obtain required FCC authorizations for future products. We continuously evaluate the impact of this and other trade restrictions on our business. Inability to comply with such trade restrictions would have a material adverse effect on our business, financial condition, results of operations and cash flows.
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | 21
We have relocated our contract manufacturing to the United States, where we now manufacture the substantial majority of our products. We continue to manufacture a minor portion of our products in Israel, at our Sella 1 facility and also continue to maintain manufacturing capabilities in Vietnam. However, certain components and subcomponents necessary for our products continue to be sourced from suppliers outside the United States, and imports of such items may be subject to existing or future tariffs or other trade restrictions. It is unknown whether and to what extent these tariffs will remain in place or if other new laws or regulations will be adopted. In addition, retaliatory measures may be imposed by foreign governments on products exported from the United States to markets in which we sell our products.
The scope, duration and impact of current and future tariffs and trade measures remain uncertain and may increase our cost of revenue, disrupt supply chains, create cost volatility, reduce demand for our products, adversely affect our customers, suppliers, contract manufacturers and other business partners, or impair our ability to compete effectively. Continuing uncertainty regarding trade policy may also cause customers to accelerate, delay or cancel purchases, resulting in sales volatility and fluctuations in operating results.
In particular, if tariffs increase the cost of components imported into the United States, increase the cost of manufacturing our products, or increase the cost of solar power systems generally, solar power systems may become less economically attractive, which could reduce demand for our products and adversely affect our gross margins. It is difficult to predict what additional trade-related actions may be taken by the United States or other governments, including further tariff increases, new trade restrictions, or retaliatory measures. Any such actions could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Disruption to our business operations as a result of the evolving conflict in Israel and other conditions in Israel that affect our operations may limit our ability to develop, produce and sell our products.
Our headquarters and principal research and development center are located in Israel. As a result, political, economic, and military conditions in Israel directly affect our business, operations, and workforce.
Israel has been involved in a number of armed conflicts and has been the target of terrorist activity, including threats from Gaza, Iran, the Houthi militants in Yemen, Hezbollah militants in Lebanon, Iranian militias in Syria, and others. Violence between Hamas and Israel intensified on October 7, 2023, when the terrorist group launched an unprecedented attack on Israel. On October 8, 2023, the Israeli Government announced that the Security Cabinet of the State of Israel approved a war situation in Israel. Since that time, and in connection with subsequent regional hostilities, the ongoing state of war has disrupted and continues to disrupt our business operations.
In the second quarter of 2025, Israel and the Islamic Republic of Iran engaged in a 12-day war, which subsequently stabilized due to a brokered ceasefire. More recently, during the first half of 2026, Israel was again engaged in direct military conflicts with Iran and in significant hostilities with Hezbollah in Lebanon. Although hostilities have since moderated, it is unknown whether any ceasefires or periods of relative calm will endure, or whether conflicts involving Gaza, Lebanon, Iran, Yemen, or other parts of the region may reemerge or escalate in the future.
Because our headquarters and a substantial portion of our workforce are based in Israel, these conflicts have impacted, and may continue to impact, the availability of our workforce. Some of our employees, executive officers, and directors residing in Israel are obligated to perform reserve duty in the Israeli military and are subject to being called to active duty under emergency circumstances. In the year ended December 31, 2025, approximately 279 employees, or 13% of our workforce in Israel, and in the third quarter of 2026, approximately 120 employees, or 5%, were called to active reserve duty for varying periods, which adversely affected workforce availability. Additional employees may be called to reserve duty in the future.
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | 22
Any future armed conflict, political instability, or violence in Israel or the surrounding region may impair our ability to manage our business effectively, operate our manufacturing plant in northern Israel, conduct research and development activities, or otherwise carry out our operations. In the event of a significant escalation of existing hostilities or the outbreak of additional conflicts, we may be forced to cease or significantly curtail operations, which could delay the distribution and sale of our products.
The majority of our key employees and officers are residents of Israel. If any of our offices or facilities in Israel were damaged, destroyed, or rendered inoperable as a result of war, hostile actions, terrorist attacks, earthquakes, fire, floods, storms, power outages, employee malfeasance, or other natural or man-made events, our ability to conduct research and development, manufacture products, and operate our business could be materially adversely affected. Any resulting delay in the achievement of our development or commercialization objectives could harm our business, prospects, financial results, and reputation.
In addition, several countries, principally in the Middle East, restrict business dealings with Israeli companies, and other countries or groups may impose similar restrictions if hostilities or regional political instability persist or intensify. If instability in neighboring states results in the establishment of fundamentalist Islamic regimes or governments more hostile to Israel, it could be subject to additional political, economic, or military constraints, which could materially adversely affect our operations and our ability to sell products in the region.
Any interruption or curtailment of trade between Israel and its current trading partners, or a significant downturn in Israel’s economic or financial condition, could have a material adverse effect on our business, financial condition, and results of operations. Since the start of the war with Hamas, we have become aware of pressure being placed on some of our customers not to engage in business with us due to our affiliation with Israel. In addition, adverse developments in foreign policy toward Israel could negatively impact our ability to do business with suppliers and customers, which could, in turn, harm our reputation, results of operations, or financial condition.
While our offices and facilities worldwide, including in Israel, remain open and, to date, we have not experienced material disruptions to our ability to manufacture and deliver products and services to customers, any reemergence or escalation of conflicts in Israel or the surrounding region could materially adversely affect our business, financial condition, and results of operations.
Additionally, in 2023, the Israeli government announced plans to significantly reduce the Israeli Supreme Court’s judicial oversight, including reducing its ability to strike down legislation that it deems unreasonable, and plans to increase political influence over the selection of judges. Although the Israeli Supreme Court partially struck down these plans, the government vowed to make other changes to law that limit the powers of the Supreme Court. Following the elections held in Israel on October 27, 2026, it is unclear whether these efforts will be resumed. If such plans are eventually enacted, they may cause operational challenges for us since we are headquartered in Israel and many of our employees are located in Israel.
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None
ITEM 3. Defaults upon Senior Securities.
ITEM 4. Mine Safety Disclosures
Not applicable.
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | 23
ITEM 5. Other Information
Indemnification Agreements
On November 1, 2026, our Board of Directors approved a form of indemnification agreement (the “Indemnification Agreement”) to be entered into between us and our directors and certain of our officers. Each of our directors and executive officers is expected to enter into an Indemnification Agreement during the fourth quarter of 2026. These agreements will require us to indemnify these individuals to the fullest extent permitted under Delaware law against liability that may arise by reason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified.
The foregoing description of the Indemnification Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the form of Indemnification Agreement, a copy of which is filed as Exhibit 10.1 to this Quarterly Report on Form 10-Q and is incorporated herein by reference.
ITEM 6. Exhibits
Index to Exhibits
Exhibit
No.
The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2026 formatted in Inline XBRL
Included in Exhibit 101
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | 24
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: November 5, 2026
SOLAREDGE TECHNOLOGIES, INC. | 2026 Form 10-Q | 25