SOLAREDGE TECHNOLOGIES INC

Previous wording

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 in accordance with information currently available to our management. 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, industry and regulatory environment, effects of acquisitions, growth opportunities 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.

Current wording

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 in accordance with information currently available to our management. 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.

Previous wording

the other factors set forth under “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 and in other documents we file from time to time with the SEC that disclose risks and uncertainties that may affect our business.

Current wording

the other factors set forth below in Part II, Item 1.A under “Risk Factors” and in Part I, Item 1A under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 and in other documents we file from time to time with the SEC that disclose risks and uncertainties that may affect our business.

Previous wording

The Company identified two reportable segments: the Solar segment and Energy Storage segment. The Solar segment includes the design, development, manufacturing, and sales of its DC optimized inverter solutions designed to maximize power generation at the PV module level and batteries for PV applications. The Solar segment solution consists mainly of the Company’s power optimizers, inverters, batteries and cloud‑based monitoring platform. The Energy Storage segment includes the design, development, manufacturing, and sales of high-energy, high-power, lithium-ion cells and BESS solutions for the C&I and Utility markets. The Energy Storage segment provides purpose-built components and solutions, hardware and software, as well as pre and post sales engineering support to design, build, and manage battery and system solutions according to the customer’s use cases and mission profiles. The “All other” category includes the design, development, manufacturing and sales of e-Mobility products and automated machines (in prior periods).

Current wording

The Company identified two reportable segments: the Solar segment and Energy Storage segment. The Solar segment includes the design, development, manufacturing, and sales of its DC optimized inverter solutions designed to maximize power generation at the PV module level and batteries for PV applications. The Solar segment solution consists mainly of the Company’s power optimizers, inverters, batteries and cloud‑based monitoring platform. The Energy Storage segment includes the design, development, manufacturing, and sales of high-energy, high-power, lithium-ion cells and BESS solutions for the C&I and Utility markets. The Energy Storage segment provides purpose-built components and solutions, hardware and software, as well as pre and post sales engineering support to design, build, and manage battery and system solutions according to the customer’s use cases and mission profiles. The “All other” category includes the design, development, manufacturing and sales of e-Mobility products (in prior periods) and automated machines.

Previous wording

In the third quarter of 2020, we began commercial shipments from our manufacturing facility in the North of Israel, “Sella 1”. The proximity of Sella 1 to our R&D team and labs enables us to accelerate new product development cycles, as well as define equipment and manufacturing processes of newly developed products which can then be adopted by our contract manufacturers worldwide. In May 2022, we opened “Sella 2”, our own manufacturing facility for Li-Ion cells, in Korea. Sella 2 currently has a 2GWh capacity. In light of the Inflation Reduction Act legislation in the United States, which incentivizes the local manufacturing of renewable energy products by providing benefits to installers for the purchase and installation of product with domestic content, as well as by incentivizing local manufacturing of our products, we have begun manufacturing inverters in Texas and are currently establishing additional manufacturing capabilities in Florida for optimizers and inverters. With the ramp up of these new sites and due to a decrease in demand for our products, we have reduced capacity in all of our manufacturing sites outside of the U,S and discontinued manufacturing of our products in Mexico. As of June 30, 2024, we shipped approximately 128.2 million power optimizers, 5.7 million inverters and 276.2 thousand batteries for PV applications. Over 4 million installations, many of which may include multiple inverters, are currently connected to, and monitored through, our cloud-based monitoring platform. As of June 30, 2024, we shipped approximately 54.5 GW of our DC optimized inverter systems and approximately 2.0 GWh of our batteries for PV applications.

Current wording

In the third quarter of 2020, we began commercial shipments from our manufacturing facility in the North of Israel, “Sella 1”. The proximity of Sella 1 to our R&D team and labs enables us to accelerate new product development cycles, as well as define equipment and manufacturing processes of newly developed products which can then be adopted by our contract manufacturers worldwide. In May 2022, we opened “Sella 2”, our own manufacturing facility for Li-Ion cells, in Korea. Sella 2 currently has a 2GWh capacity. In light of the Inflation Reduction Act legislation in the United States, which incentivizes the local manufacturing of renewable energy products by providing benefits to installers for the purchase and installation of product with domestic content, as well as by incentivizing local manufacturing of our products, we began manufacturing inverters in Texas and reached full capacity there during the third quarter of 2024. We are also currently expanding additional manufacturing capabilities in G, for optimizers and inverters. With the manufacturing capabilities of these new sites and due to a decrease in demand for our products, we have reduced capacity in all of our manufacturing sites outside of the U.S. As of September 30, 2024, we shipped approximately 130.0 million power optimizers, 5.7 million inverters and 303.3 thousand batteries for PV applications. Over 4.1 million installations, many of which may include multiple inverters, are currently connected to, and monitored through, our cloud-based monitoring platform. As of September 30, 2024, we shipped approximately 55.3 GW of our DC optimized inverter systems and approximately 2.1 GWh of our batteries for PV applications.

Previous wording

Our revenues for the six months ended June 30, 2024, and 2023 were $469.8 million and $1,935.2 million, respectively. Gross loss was 7.9% for the six months ended June 30, 2024, compared to gross margin of 31.9% for the six months ended June 30, 2023. Net loss for the six months ended June 30, 2024 was $288.1 million compared to net income in the amount of $257.9 million for the six months ended June 30, 2023.

Current wording

Our revenues for the three months ended September 30, 2024, and 2023 were $260.9 million and $725.3 million, respectively,. Gross loss was 269.2% for the three months ended September 30, 2024, compared to our gross margin of 19.7% for the three months ended September 30, 2023. Net loss for the three months ended September 30, 2024, and 2023 was $1,205.3 million and $61.2 million, respectively.

Previous wording

Our revenues for the three months ended June 30, 2024, and 2023 were $265.4 million and $991.3 million, respectively. Gross loss was 4.1% for the three months ended June 30, 2024, compared to gross margin of 32.0% for the three months ended June 30, 2023. Net loss for the three months ended June 30, 2024 was $130.8 million compared to net income in the amount of $119.5 million for the three months ended June 30, 2023.

Current wording

Our revenues for the nine months ended September 30, 2024, and 2023 were $730.7 million and $2,660.5 million, respectively. Gross loss was 101.2% for the nine months ended September 30, 2024, compared to our gross margin of 28.6% for the nine months ended September 30, 2023. Net loss for the nine months ended September 30, 2024 was $1,493.5 million compared to our net income in the amount of $196.7 million, for the nine months ended September 30, 2023.

Previous wording

We have seen a slowdown in demand for our products in our Solar segment from our direct customers since the second part of the third quarter of 2023. This was a result of slowed market demand in the third quarter of 2023 as distributors began to take actions to reduce inventory levels. In particular, beginning in the second part of the third quarter of 2023, we experienced substantial unexpected cancellations and push outs of existing backlog from our European distributors. We attribute these cancellations and pushouts to high inventory in the channels and slower than expected installation rates both in the United States and Europe. This trend continued in the subsequent quarters. Additionally, the Company anticipates a continued lower level of revenues in the third quarter of 2024 when compared to the same quarter last year, as the inventory destocking process continues.

Current wording

We have seen a slowdown in demand for our products in our Solar segment from our direct customers since the second part of the third quarter of 2023. This was a result of slowed market demand in the third quarter of 2023, as distributors began to take actions to reduce inventory levels. In particular, beginning in the second part of the third quarter of 2023, we experienced substantial unexpected cancellations and push outs of existing backlog from our European distributors. We attribute these cancellations and push outs to high inventory in the channels and slower than expected installation rates both in the United States and Europe. This trend continued in the subsequent quarters. Additionally, the Company anticipates a continued lower level of revenues in the fourth quarter of 2024 when compared to the same quarter last year, as the inventory destocking process continues.

Previous wording

Due to the war that began on October 7, 2023, approximately 10% of our employees in Israel were called to active reserve duty and additional employees may be called in the future, if needed. About 75% of these employees have returned to work, though recruitments for additional reserve duties may and have reoccurred. While our offices and facilities are open worldwide, including in Israel, and, to date, we have not had disruptions to our ability to manufacture and deliver products and services to customers, a prolonged war or an escalation of the current condition in Israel could materially adversely affect our business, financial condition, and results of operations. Due to the recency of these events, and their ongoing and evolving nature, the extent of the adverse effect on our business operations is still unknown.

Current wording

Due to the war that began on October 7, 2023, 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, approximately 10% of our employees in Israel have been called to active reserve duty for varying periods. While our offices and facilities are open worldwide, including in Israel, and, to date, we have not had disruptions to our ability to manufacture and deliver products and services to customers, a prolonged war or an escalation of the current condition in Israel could materially adversely affect our business, financial condition, and results of operations. Due to the ongoing and evolving nature, and the extent of these events, the adverse effect on our business operations is still unknown.

Previous wording

The conflict between Ukraine and Russia, which started in early 2022, and the sanctions and other measures imposed in response to this conflict, have increased the level of economic and political uncertainty. While we do not have any meaningful business in Russia or Ukraine and we do not have physical assets in these countries, this conflict has, and is likely to continue to have, a multidimensional impact on the global economy, the energy landscape in general and the global supply chain. In 2022, rising global interest in becoming less dependent on gas and oil led to higher demand for our products. The conflict adversely affected the prices of raw materials arriving from Eastern Asia and resulted in an increase in gas and oil prices. Furthermore, various shipment routes were adversely impacted by the conflict resulting in increased shipment lead times and shipping costs for our products. While the impact of this conflict decreased in 2023, a change or escalation of this ongoing conflict could increase the impacts from the circumstances described above and may lead to an adverse effect on our business and results of operations.

Current wording

The conflict between Ukraine and Russia, which started in early 2022, and the sanctions and other measures imposed in response to this conflict, have increased the level of economic and political uncertainty. While we do not have any meaningful business in Russia or Ukraine and we do not have physical assets in these countries, this conflict has, and is likely to continue to have, a multidimensional impact on the global economy, the energy landscape in general and the global supply chain. In 2022, rising global interest in becoming less dependent on gas and oil led to higher demand for our products. The conflict adversely affected the prices of raw materials arriving from Eastern Asia and resulted in an increase in gas and oil prices. Furthermore, various shipment routes were adversely impacted by the conflict resulting in increased shipment lead times and shipping costs for our products. While the impact of this conflict continued to decrease in 2024, a change or escalation of this ongoing conflict could increase the impacts from the circumstances described above and may lead to an adverse effect on our business and results of operations.

Previous wording

In August 2022, the U.S. government enacted the Inflation Reduction Act of 2022 (the “IRA”), which includes several provisions intended to accelerate U.S. manufacturing and adoption of clean energy, battery and energy storage, electrical vehicles, and other solar products and is expected to impact our business and operations. As part of such incentives, the IRA, among other things, extends the investment tax credit and production tax credit through 2034 and is therefore expected to increase the demand for solar products. The IRA also further incentivizes residential and commercial solar customers and developers through the inclusion of a tax credit for qualifying energy projects of up to 30%. Section 45X of the IRA offers advanced manufacturing production tax credits ("AMPTC") that incentivize the production of eligible components within the U.S. To that end, we established manufacturing capabilities in the U.S. in 2023 and announced additional capacity expected during 2024. These provisions of the law are new and regulations and guidance concerning their implementation are gradually being published by the U.S. Treasury Department. We continue to monitor the benefits that may be available to us, such as the availability of tax credits for domestic manufacturers. To the extent that tax benefits or credits may be available to competing technology and not to our technology, our business could be adversely disadvantaged.

Current wording

In August 2022, the U.S. government enacted the Inflation Reduction Act of 2022 (the “IRA”), which includes several provisions intended to accelerate U.S. manufacturing and adoption of clean energy, battery and energy storage, electrical vehicles, and other solar products and is expected to impact our business and operations. As part of such incentives, the IRA, among other things, extends the investment tax credit and production tax credit through 2034 and is therefore expected to increase the demand for solar products. The IRA also further incentivizes residential and commercial solar customers and developers through the inclusion of a tax credit for qualifying energy projects of up to 30%. Section 45X of the IRA offers advanced manufacturing production tax credits ("AMPTC") that incentivize the production of eligible components within the U.S. To that end, we established manufacturing capabilities in the U.S. in 2023. These provisions of the law are new and regulations and guidance concerning their implementation are gradually being published by the U.S. Treasury Department. On October 24, 2024, final regulations concerning the application of IRC §45X were published. The regulations contain detailed rules concerning the eligibility, qualifying and accounting for AMPTCs. Of particular relevance to the Company are the rules concerning the qualification and measurement of AMPTCs to Residential Inverters, Commercial Inverters and DC-Optimized Inverter Systems, that are included in the definition of Microinverters.

Previous wording

Comparison of three and six months ended June 30, 2024, to the three and six months ended June 30, 2023

Current wording

Comparison of three and nine months ended September 30, 2024, and the three and nine months ended September 30, 2023

Previous wording

Revenues decreased by $725.9 million, or 73.2%, in the three months ended June 30, 2024, as compared to the three months ended June 30, 2023, primarily due to (i) a decrease of $609.7 million related to a decrease in the number of inverters and power optimizers sold; (ii) a decrease of $87.0 million related to the lower number of batteries for PV applications sold, primarily in Europe; (iii) a decrease of $20.9 million in revenues generated in 2023 from e-mobility components, related to the discontinuation of the Company’s LCV e-Mobility activity; and (iv) a decrease of $15.2 million related to less ancillary solar products sold. The overall decrease in revenues was due to the decline in demand that began in the third quarter of 2023. This decline was the result of high inventory in the channels and slower than expected installation rates beginning in the third quarter of 2023, leading to substantial unexpected cancellations and push outs of existing backlog, from our distributors.

Current wording

Revenues decreased by $464.4 million, or 64.0%, in the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, primarily due to (i) a decrease of $416.5 million related to a decrease in the number of inverters and power optimizers sold; (ii) a decrease of $22.1 million in revenues generated in 2023 from e-mobility components, related to the discontinuation of the Company’s LCV e-Mobility activity; and (iii) a decrease of $14.6 million related to less ancillary solar products sold. The overall decrease in revenues was due to a decline in demand that began in the second part of the third quarter of 2023. This decline was the result of high inventory in the channels and slower than expected installation rates, leading to substantial unexpected cancellations and push outs of existing backlog, from our distributors.

Previous wording

Revenues from outside of the U.S. comprised 63.4% of our revenues in the three months ended June 30, 2024 as compared to 80.3% in the three months ended June 30, 2023.

Current wording

Revenues from outside of the U.S. comprised 50.7% of our revenues in the three months ended September 30, 2024 as compared to 73.0% in the three months ended September 30, 2023.

Previous wording

The number of power optimizers recognized as revenues decreased by approximately 3.5 million units, or 63.6%, from approximately 5.5 million units in the three months ended June 30, 2023 to approximately 2.0 million units in the three months ended June 30, 2024. The number of inverters recognized as revenues decreased by approximately 268.5 thousand units, or 80.4%, from approximately 333.8 thousand units in the three months ended June 30, 2023 to approximately 65.4 thousand units in the three months ended June 30, 2024. The megawatts hour of batteries for PV applications recognized as revenues decreased by approximately 146.0 megawatts hour, or 53.8% from approximately 271.0 in the three months ended June 30, 2023 to approximately 125.0 megawatts hour in the three months ended June 30, 2024, as a result of lower demand.

Current wording

The number of power optimizers recognized as revenues decreased by approximately 1.4 million units, or 43.8%, from approximately 3.3 million units, in the three months ended September 30, 2023, to approximately 1.8 million units in the three months ended September 30, 2024. The number of inverters recognized as revenues decreased by approximately 203.9 thousand units, or 76.5%, from approximately 266.6 thousand units in the three months ended September 30, 2023 to approximately 62.7 thousand units in the three months ended September 30, 2024. The megawatts hour of batteries for PV applications recognized as revenues increased by approximately 55.2 megawatts hour, or 35.9% from approximately 153.7 in the three months ended September 30, 2023 to approximately 208.9 megawatts hour in the three months ended September 30, 2024, as a result of lower demand.

Previous wording

Our blended ASP per watt for solar products excluding batteries for PV applications is calculated by dividing the sales of solar products, excluding the sales of batteries for PV applications, by the name plate capacity of inverters shipped. Our blended ASP per watt for solar products shipped excluding batteries for PV applications increased by $0.026, or 13.8%, in the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. The increase in blended ASP per watt is mainly attributed to a significantly higher number of power optimizers and other solar products shipped compared to the number of inverters shipped. This increase in blended ASP per watt was partially offset by an additional price reduction we initiated in the second quarter and an increase in the sale of commercial products that are characterized by lower ASP per watt, out of our total solar product mix.

Current wording

Our blended ASP per watt for solar products excluding batteries for PV applications is calculated by dividing the sales of solar products, excluding the sales of batteries for PV applications, by the name plate capacity of inverters shipped. Our blended ASP per watt for solar products shipped excluding batteries for PV applications increased by $0.039, or 24.0%, in the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The increase in blended ASP per watt is mainly attributed to a higher number of power optimizers and other solar products shipped compared to the number of inverters shipped. This increase in blended ASP per watt was partially offset by an increase in the sale of commercial products that are characterized by lower ASP per watt, out of our total solar product mix.

Previous wording

Our blended ASP per watt/hour for batteries for PV applications is calculated by dividing batteries for PV applications sales, by the nameplate capacity of batteries for PV applications shipped. Our blended ASP per watt/hour for batteries for PV applications decreased by $0.108, or 22.7%, in the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. The decrease in blended ASP per watt/hour is mainly attributed to a price reduction of our batteries for PV applications. This decrease in ASP per watt/hour was partially offset by an increase in the sale of our one-phase battery that is sold at a higher ASP per watt/hour.

Current wording

Our blended ASP per watt/hour for batteries for PV applications is calculated by dividing batteries for PV applications sales, by the nameplate capacity of batteries for PV applications shipped. Our blended ASP per watt/hour for batteries for PV applications decreased by $0.158, or 33.3%, in the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The decrease in blended ASP per watt/hour is mainly attributed to a price reduction of our batteries for PV applications.

Previous wording

Revenues decreased by $1,465.4 million, or 75.7%, in the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, primarily due to (i) a decrease of $1,224.0 million related to a decrease in the number of inverters and power optimizers sold; (ii) a decrease of $165.4 million related to the lower number of batteries for PV applications sold, primarily in Europe; (iii) a decrease of $45.4 million related to less ancillary solar products sold; and (iv) a decrease of $43.7 million in revenues generated from e-mobility components, related to the discontinuation of the Company’s LCV e-Mobility activity. The overall decrease in revenues was due to the decline in demand that began in the third quarter of 2023. This decline was the result of high inventory in the channels and slower than expected installation rates beginning in the third quarter of 2023, leading to substantial unexpected cancellations and push outs of existing backlog, from our distributors.

Current wording

Revenues decreased by $1,929.8 million, or 72.5%, in the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, primarily due to (i) a decrease of $1,640.5 million related to a decrease in the number of inverters and power optimizers sold; (ii) a decrease of $167.7 million related to the lower number of batteries for PV applications sold, primarily in Europe; (iii) a decrease of $65.9 million in revenues generated from e-mobility components, related to the discontinuation of the Company’s LCV e-Mobility activity; and (iv) a decrease of $60.0 million related to less ancillary solar products sold. The overall decrease in revenues was due to the decline in demand that began in the second part of the third quarter of 2023. This decline was the result of high inventory in the channels and slower than expected installation rates, leading to substantial unexpected cancellations and push outs of existing backlog, from our distributors.

Previous wording

Revenues from outside of the U.S. comprised 65.4% of our revenues in the six months ended June 30, 2024 as compared to 76.7% in the six months ended June 30, 2023.

Current wording

Revenues from outside of the U.S. comprised 60.2% of our revenues in the nine months ended September 30, 2024 as compared to 75.7% in the nine months ended September 30, 2023.

Previous wording

The number of power optimizers recognized as revenues decreased by approximately 9.0 million units, or 74.5%, from approximately 12.0 million units in the six months ended June 30, 2023 to approximately 3.1 million units in the six months ended June 30, 2024. The number of inverters recognized as revenues decreased by approximately 538.1 thousand units, or 80.8%, from approximately 665.8 thousand units in the six months ended June 30, 2023 to approximately 127.7 thousand units in the six months ended June 30, 2024. The megawatts hour of batteries for PV applications recognized as revenues decreased by approximately 268.0 megawatts hour, or 55.0% from approximately 487.0 megawatts hour in the six months ended June 30, 2023 to approximately 220.0 megawatts hour in the six months ended June 30, 2024 as a result of lower demand.

Current wording

The number of power optimizers recognized as revenues decreased by approximately 10.4 million units, or 68.0%, from approximately 15.3 million units, in the nine months ended September 30, 2023, to approximately 4.9 million units in the nine months ended September 30, 2024. The number of inverters recognized as revenues decreased by approximately 742.0 thousand units, or 79.6%, from approximately 932.4 thousand units in the nine months ended September 30, 2023 to approximately 190.4 thousand units in the nine months ended September 30, 2024. The megawatts hour of batteries for PV applications recognized as revenues decreased by approximately 215.2 megawatts hour, or 33.4% from approximately 643.6 megawatts hour in the nine months ended September 30, 2023 to approximately 428.4 megawatts hour in the nine months ended September 30, 2024 as a result of lower demand.

Previous wording

Our blended ASP per watt for solar products shipped excluding batteries for PV applications decreased by $0.011, or 5.2%, in the six months ended June 30, 2024 as compared to the six months ended June 30, 2023. The decrease in blended ASP per watt is mainly attributed to price reduction as well as an increase in the sale of commercial products that are characterized by lower ASP per watt. This decrease in blended ASP per watt was partially offset by a relatively higher number of power optimizers shipped compared to the number of inverters shipped.

Current wording

Our blended ASP per watt for solar products shipped excluding batteries for PV applications increased by $0.005, or 2.9%, in the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023. The increase in blended ASP per watt is mainly attributed to a higher number of power optimizers and other solar products shipped compared to the number of inverters shipped. This increase in blended ASP per watt was partially offset by price reduction as well as an increase in the sale of commercial products that are characterized by lower ASP per watt, out of our total solar product mix.

Previous wording

Our blended ASP per watt/hour for batteries for PV applications decreased by $0.101, or 21.1%, in the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. The decrease in blended ASP per watt/hour is mainly attributed to price reduction of our batteries for PV applications. This decrease in ASP per watt/hour was partially offset by an increase in the sale of our one-phase battery that is sold at a higher ASP per watt/hour.

Current wording

Our blended ASP per watt/hour for batteries for PV applications decreased by $0.126, or 26.3%, in the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The decrease in blended ASP per watt/hour is mainly attributed to price reduction of our batteries for PV applications.

Previous wording

Gross profit as a percentage of revenue decreased from 32.0% in the three months ended June 30, 2023 to gross loss of 4.1% in the three months ended June 30, 2024, primarily due to:

Current wording

Gross profit as a percentage of revenue decreased from 19.7%, in the three months ended September 30, 2023, to a gross loss of 269.2% in the three months ended September 30, 2024, primarily due to:

Previous wording

Gross profit as a percentage of revenue decreased from 31.9% in the six months ended June 30, 2023 to gross loss of 7.9% in the six months ended June 30, 2024 primarily due to:

Current wording

Gross profit as a percentage of revenue decreased from 28.6% in the nine months ended September 30, 2023 to gross loss of 101.2% in the nine months ended September 30, 2024 primarily due to:

Previous wording

Research and development costs decreased by $17.3 million or 19.9%, in the three months ended June 30, 2024, compared to the three months ended June 30, 2023, primarily due to:

Current wording

Research and development costs decreased by $9.7 million or 12.1%, in the three months ended September 30, 2024, compared to the three months ended September 30, 2023, primarily due to:

Previous wording

Research and development costs decreased by $21.8 million or 13.1%, in the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily due to:

Current wording

Research and development costs decreased by $31.5 million or 12.8%, in the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, primarily due to:

Previous wording

Solar operating loss was $215.4 million, in the six months ended June 30, 2024, as compared to profit of $413.7 million in the six months ended June 30, 2023. This was primarily due to the decrease of $1,424.5 million in revenue followed by a lesser decrease of $774.1 million in cost of revenues, mainly attributed to fixed and other production related costs as well as a decrease of $30.1 million in AMPTC recognized. This was partially offset by a decrease of $21.2 million in operating expenses as a result of our workforce reduction plan designed to reduce operating expenses and align our cost structure to current market dynamics.

Current wording

Sales and marketing expenses decreased by $2.9 million, or 7.2%, in the three months ended September 30, 2024, compared to the three months ended September 30, 2023, primarily due to a decrease in personnel-related costs of $2.7 million resulting from our workforce reduction plan designed to reduce operating expenses and align our cost structure to current market dynamics.

Previous wording

Sales and marketing expenses decreased by $4.2 million, or 9.6%, in the three months ended June 30, 2024, compared to the three months ended June 30, 2023, primarily due to:

Current wording

Sales and marketing expenses decreased by $9.2 million, or 7.3%, in the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, primarily due to:

Previous wording

General and administrative expenses increased by $2.8 million, or 7.8%, in the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily due to an increase in expenses related to doubtful debt of $7.4 million. This was partially offset by:

Current wording

General and administrative expenses increased by $2.1 million, or 5.4%, in the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily due to an increase in expenses related to doubtful debt of $4.4 million. This was partially offset by:

Previous wording

General and administrative expenses decreased by $2.9 million, or 4.0%, in the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily due to:

Current wording

General and administrative expenses decreased by $0.8 million, or 0.7%, in the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, primarily due to:

Previous wording

These were partially offset byan increase in expenses related to doubtful debt of$8.8 million

Current wording

These were partially offset by an increase in expenses related to doubtful debt of $13.2 million

Previous wording

Other operating expenses, net, increased by $1.0 million in the three months ended June 30, 2024, compared to the three months ended June 30, 2023, primarily due to an increase in losses related to the sale of property, plant and equipment and other assets.

Current wording

Other operating expenses, net, increased by $233.9 million in the three months ended September 30, 2024, compared to the three months ended September 30, 2023, primarily due to:

Previous wording

Other operating expense, net was $3.3 million, in the six months ended June 30, 2024, compared to other operating income, net of $1.4 million in the six months ended June 30, 2023, primarily due to:

Current wording

Other operating expense, net was $237.3 million, in the nine months ended September 30, 2024, compared to other operating income, net of $1.4 million in the nine months ended September 30, 2023, primarily due to:

Previous wording

Financial expense, net was $0.9 million in the three months ended June 30, 2024, compared to financial income, net in the amount of $3.4 million in the three months ended June 30, 2023, primarily due to an increase of $9.2 million in expenses due to credit loss related to loans receivables. This was partially offset by an increase of $4.5 million in income due to fluctuations in foreign exchange rates, primarily between the Euro and the NIS against the U.S. dollar.

Current wording

Financial income, net was $5.6 million in the three months ended September 30, 2024, compared to financial expense, net in the amount of $7.9 million in the three months ended September 30, 2023, primarily due to $4.6 million income in the three months ended September 30, 2024 as compared to expenses of $16.4 million in the three months ended September 30, 2023, as a result of fluctuations in foreign exchange rates, primarily between the Euro and the NIS against the U.S. dollar. This was partially offset by a decrease of $5.8 million in income related to hedging transactions.

Previous wording

Financial expenses, net was $7.9 million in the six months ended June 30, 2024, compared to financial income, net in the amount of $27.1 million in the six months ended June 30, 2023, primarily due to:

Current wording

Financial expenses, net was $2.4 million in the nine months ended September 30, 2024, compared to financial income, net in the amount of $19.2 million in the nine months ended September 30, 2023, primarily due to:

Previous wording

Other income, net was $18.6 million in the six months ended June 30, 2024, compared to other loss, net of $0.1 million in the six months ended June 30, 2023, primarily due to:

Current wording

Other income, net was $14.6 million in the nine months ended September 30, 2024, compared to other loss, net of $0.6 million in the nine months ended September 30, 2023, primarily due to:

Previous wording

Net loss from equity method investments increased by $0.9 million, or 100% in the six months ended June 30, 2024 as compared to the six months ended June 30, 2023.

Current wording

Net loss from equity method investments increased by $1.4 million, or 100% in the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.

Previous wording

As a result of the factors discussed above, net loss was $288.1 million in the six months ended June 30, 2024, as compared to a net income of $257.9 million in the six months ended June 30, 2023.

Current wording

As a result of the factors discussed above, net loss in the three months ended September 30, 2024 and September 30, 2023 was $1,205.3 million and $61.2 million, respectively.

Previous wording

As a result of the factors discussed above, net loss was $130.8 million in the three months ended June 30, 2024, as compared to a net income of $119.5 million in the three months ended June 30, 2023.

Current wording

As a result of the factors discussed above, net loss was $1,493.5 million in the nine months ended September 30, 2024, as compared to a net income of $196.7 million in the nine months ended September 30, 2023.

Previous wording

Energy Storage operating loss decreased by $5.7 million, or 37.1%, in the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. The decrease in operating loss was primarily due to the increase in revenues, a decrease of $2.4 million in cost of revenues mainly attributed to a decrease in inventory write-down and a decrease of $0.9 million in operating expenses.

Current wording

Energy Storage operating loss increased by $72.6 million, or 388.5%, in the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The increase in operating loss was primarily due to the decrease in revenues and an increase of $59.4 million in cost of revenues mainly attributed to an increase in inventory write-down partially offset by a decrease in direct cost of revenues.

Previous wording

Energy Storage operating loss decreased by $12.0 million, or 35.5%, in the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. The decrease in operating loss was primarily due to an increase in revenues followed by a decrease of $4.2 million in cost of revenues mainly attributed to inventory write-down and a decrease of $4.0 million in operating expenses primarily due to a decrease in the doubtful debt expenses.

Current wording

Energy Storage operating loss increased by $60.6 million, or 115.5%, in the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The increase in operating loss was primarily due to the decrease in revenues as well as an increase of $55.2 million in cost of revenues mainly attributed to an increase in inventory write-down partially offset by a decrease in direct cost of revenues.