Shuki Nir, CEO of SolarEdge: "We are working hard and not looking at the stock"
The Israeli company returned to adjusted profit for the first time in nearly three years, but a weak forecast for the next quarter sent the stock down by about 30% in one day. In an interview, Shuki Nir explains why he remains optimistic and how operations with Nvidia and others could transform the company.
A year and eight months ago, Shuki Nir took over a company on the ropes. SolarEdge, which at its peak in 2022 was the largest Israeli company on Nasdaq with a value of about $20 billion, had lost more than 95% of its value.
Nir was appointed CEO with an impressive background: he led the consumer division at SanDisk between 2008-2016 and held senior roles at Oodrive, Kornit, and IronSource. The market initially reacted with skepticism, as Nir had served as Chief Marketing Officer just before his appointment. However, since he took office, SolarEdge stock has surged by about 160%.
This week, for the first time in nearly three years, the company reached a significant milestone: returning to profit. Nevertheless, the market reaction was brutal, and the stock crashed by about 30% in one day. SolarEdge recorded revenue of $346.2 million, a 20% growth compared to the same quarter last year, and moved to an adjusted net profit (Non-GAAP) of $3.6 million, or 5 cents per share.
Why did investors react negatively?
The disappointment stemmed from the forecast. For the third quarter, the company expects revenue of only $310 to $340 million, about 10% lower than market expectations. In a special interview with ice, Shuki Nir commented on the situation:
"In the long term, we are doing what is necessary for the business to develop. The stock price follows the company's business results. After three years of losses, the company moved to profit. We are focused on continuing to increase revenue and profitability."
Nir noted that the company is banking on new products like Nexius and European expansion. He also highlighted "Safe Harbor" deals, which are expected to provide stable revenue starting from 2028.
Storage and Data Centers
In the second quarter, energy storage became the company's largest revenue source ($126 million), surpassing optimizers and inverters. Nir believes this trend will persist as the world shifts from PV-only systems to "PV plus storage."
SolarEdge's biggest long-term bet lies in data centers and SST (Solid-State Transformer) technology. As AI data centers require a transition to 800-volt DC power, SolarEdge's voltage conversion technology could prove vital.
"We are ahead of competitors in development, which is mostly done in Israel, in Modiin. We have held meetings with potential clients, and the feedback was very enthusiastic. All data centers will move to 800 volts DC, and our solution could provide hundreds of millions of dollars in value per year," Nir emphasized.
Concluding, the CEO acknowledged that the turnaround takes time: "Profitability and free cash flow mean the company can stand on its own feet. We are working hard to continue this process."
