SolarEdge Returns to Non-GAAP Profitability in Q2, Guides for Continued Improvement
SEDG sits 90% above its 52-week low of $23.01.
Summary
SolarEdge reported Q2 2026 revenue of $346.2M (+20% YoY) and achieved non-GAAP operating income of $10.2M, its first quarterly operating profit in three years. The company guided for Q3 revenue of $310M-$340M with non-GAAP gross margin of 22%-26%.
Key Events · Earnings and Guidance · SEDG
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Return to Non-GAAP Profitability
Non-GAAP operating income reached $10.2M, the first positive quarter since Q2 2023, driven by 20% YoY revenue growth to $346.2M and gross margin expansion to 28.6%.
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Gross Margin Recovery
GAAP gross margin improved to 27.5% from 11.1% a year ago, aided by a $13.3M IEEPA tariff benefit. Non-GAAP gross margin reached 28.6%, the sixth consecutive quarter of YoY expansion.
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Strengthening Balance Sheet
Cash and investments net of debt grew by $20.4M to $264.6M. Free cash flow was $3.1M, marking a return to positive cash generation.
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Q3 Guidance Implies Continued Momentum
Revenue guidance of $310M-$340M and non-GAAP gross margin of 22%-26% suggest further sequential improvement, with the midpoint implying non-GAAP operating profit when including $11.5M of IEEPA refunds received in July.
Analysis · SEDG · Manufacturing
SolarEdge posted its first non-GAAP operating profit since Q2 2023, driven by 20% revenue growth and a sharp gross margin recovery to 28.6%. The turnaround is gaining traction: GAAP losses narrowed dramatically, free cash flow turned positive, and the balance sheet strengthened with net cash rising to $264.6M. Q3 guidance implies further sequential improvement, with revenue of $310M-$340M and non-GAAP gross margin of 22%-26%. This marks a critical inflection point after years of losses, signaling that restructuring and demand recovery are taking hold.
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At the time of this filing, SEDG was trading at $43.70 on NASDAQ in the Manufacturing sector, with a market capitalization of approximately $3B. The 52-week trading range was $23.01 to $81.25. This filing was assessed with positive market sentiment and an importance score of 8 out of 10.