SolarEdge’s second quarter results were marked by notable year-over-year revenue growth and a return to non-GAAP operating profitability, but the market responded negatively, reflecting lingering concerns about the company’s near-term trajectory. Management attributed the quarter’s performance to progress in operational efficiency, product rollouts, and increasing demand for storage solutions—particularly in Europe, where anticipation of electricity price hikes and policy changes fueled both solar and retrofit activity. CEO Yehoshua Nir described the quarter as “an important milestone in our turnaround,” highlighting that non-GAAP gross margin expanded for the sixth consecutive quarter, driven by disciplined cost control and a favorable product mix.
Is now the time to buy SEDG? Find out in our full research report (it’s free for active Edge members).
SolarEdge (SEDG) Q2 CY2026 Highlights:
- Revenue: $346.2 million vs analyst estimates of $342.2 million (19.6% year-on-year growth, 1.2% beat)
- Adjusted EPS: $0.05 vs analyst estimates of $0 (significant beat)
- Revenue Guidance for Q3 CY2026 is $325 million at the midpoint, below analyst estimates of $371.8 million
- Operating Margin: -4.6%, up from -39.9% in the same quarter last year
- Market Capitalization: $2.05 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From SolarEdge’s Q2 Earnings Call
- Christine Cho (Barclays) asked about the drivers behind lower sequential gross margins and inventory trends. CFO Maoz Sigron attributed the margin decline mainly to fixed cost absorption on lower volumes and said channel inventory levels appear normalized, with distributors remaining cautious due to ongoing regulatory uncertainty.
- Brian Lee (Goldman Sachs) inquired about the components of Q3 guidance, especially storage volumes and potential for further sequential declines. CEO Yehoshua Nir said European seasonality and U.S. residential softness will weigh on results, and highlighted growing storage attach rates as a positive long-term trend.
- Philip Shen (ROTH Capital Partners) questioned whether the FCC inverter restrictions and exemptions could delay Nexis rollout or provide a tailwind for C&I sales. CEO Nir clarified that Nexis is U.S.-made and not subject to exemption requirements, and sees compliance as an advantage in the commercial segment.
- Colin Rusch (Oppenheimer) asked about storage pricing trends and supply chain pressures. CEO Nir explained that pricing has remained stable, with mix shifts driving minor fluctuations, and noted that component cost increases (especially memory) have had limited impact due to proactive supply chain management.
- Corinne Blanchard (Deutsche Bank) probed for details on the SST data center project timeline and revenue contribution. Management indicated a fully working prototype is targeted by year-end, pilots in 2027, and initial revenues in 2028, with more detail expected at the upcoming Investor Day.
Catalysts in Upcoming Quarters
Looking ahead, StockStory analysts will be watching (1) the pace and breadth of Nexis platform adoption in both Europe and the U.S.; (2) signs of stabilization or recovery in the U.S. residential solar market, particularly as regulatory and funding dynamics evolve; and (3) progress on the AI data center power infrastructure initiative, including achieving technical milestones and securing pilot customers. The ability to maintain margin discipline as volumes fluctuate will also be key.
SolarEdge currently trades at $33.24, down from $48.76 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).
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