This article first appeared on GuruFocus.

Release Date: November 05, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

SolarEdge Technologies Inc (NASDAQ:SEDG) reported a 44% year-over-year revenue growth for Q3 2025.

The company expanded its margins for the fourth consecutive quarter.

SolarEdge Technologies Inc (NASDAQ:SEDG) achieved positive free cash flow in Q3 and expects to maintain this in Q4 and for the full year.

The company regained the number one residential inverter market share position in the US, as reported by Wood Mackenzie.

SolarEdge Technologies Inc (NASDAQ:SEDG) is ramping up US manufacturing, reaching a milestone by exporting its first US-manufactured residential products to Australia.

The company reported a non-GAAP operating loss of $23.8 million for Q3 2025.

Revenues from international markets were down 8% quarter over quarter.

The company is facing incremental tariffs impacting gross margins by approximately 2%.

There is no significant pull forward of revenue expected in Q4 due to safe harbor or the 25D rush.

The European market remains challenging, although there is some improvement in inventory levels.

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Q: Can you provide insights into the expected revenue growth for 2026 and whether you anticipate positive free cash flow for the year? A: (CFO) While we don't provide specific guidance for 2026, we typically see a 10% decline in Q1 compared to Q4 due to historical seasonality. We expect to be free cash flow positive for 2025, but we don't provide specific targets for 2026 at this time.

Q: What is the timeline for commercialization of the Infinion partnership, and do you expect any bookings soon? A: (CEO) The data center market is expected to shift to DC architecture by 2027. We are in discussions with ecosystem players, and while the opportunity is significant, we anticipate commercialization around 2027-2028.

Q: How are gross margins improving despite sequential revenue decline in Q4, and has the legacy European inventory been cleared? A: (CFO) Gross margins are benefiting from the ramp-up of US production and new product introductions like the Nexus platform. The legacy European inventory impact is expected to diminish by next year as we ramp up shipments of new products.

Q: Can you elaborate on the go-to-market strategy for the Infinion partnership and any required investments? A: (CEO) The data center market has a limited number of potential customers, allowing us to approach them directly or through distribution partners. We don't anticipate significant investments as we already have the necessary infrastructure.

Q: What is the outlook for the European market in 2026, and how do you plan to capture market share? A: (CEO) While the European market may fluctuate, our share gain opportunity is significant. We are optimistic due to our commercial storage offerings, normalized inventory levels, and the introduction of the Nexus platform, which positions us well for growth.

Q: How do you plan to manage the tariff impacts, and what is the outlook for US demand? A: (CFO) We expect a 2% tariff impact in Q4, similar to Q3. We are focused on diversifying supply sources and optimizing the supply chain. In the US, we anticipate a market shift favoring TPOs, and we are well-positioned with strong partnerships and product advantages.

Q: Can you provide an update on US manufacturing capacity and plans for expansion? A: (CEO) We have ramped up US manufacturing to support domestic demand and are now exporting to international markets. Our goal is to concentrate manufacturing in the US, leveraging scale and operational efficiency.

Q: What is the demand outlook for C&I products, and do you have the capacity to meet potential increases? A: (CEO) We are well-positioned to capture additional market share in the US C&I segment with our non-FY and domestic content-compliant solutions. We have already engaged in safe harbor transactions for future years and are prepared to meet demand growth.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.