SolarEdge Technologies, Inc.

Welcome to the SolarEdge conference call for the third quarter ended September 30th, 2021. This call is being webcast live on the company's website at www.solaredge.com in the investors section on the event calendar page. This call is the sole property and copyright of SolarEdge with all rights reserved in any recording, reproduction, or transmission of this call without the express written consent of SolarEdge is prohibited. You may listen to a webcast replay of this call by visiting the event calendar page on the SolarEdge Investor website. I would now like to turn the call over to Erica Mannion at Sapphire Investor Relations, Investor Relations for SolarEdge. Ma'am, please begin.

Good afternoon. Thank you for joining us to discuss SolarEdge's operating results for the third quarter ended September 30, 2021, as well as the company's outlook for the fourth quarter of 2021. With me today is C.V. Landau, Chief Executive Officer, and Ronan Fire, Chief Financial Officer. C.V. will begin with a brief review of the results for the third quarter ended September 30, 2021. Ronan will review the financial results for the third quarter, followed by the company's outlook for the fourth quarter of 2021. We will then open the call for questions. Please note that this call will include forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from management's current expectations. We encourage you to review the State of Harper statements contained in our press release and the slides published today for a more complete description. All material contained in the webcast is the sole property and copyright of SolarEdge Technologies, with all rights reserved. Please note, this presentation describes certain non-GAAP measures, including non-GAAP net income and non-GAAP net diluted earnings per share, which are not measures prepared in accordance with the U.S. GAAP. The non-GAAP measures are presented in this presentation as we believe they provide investors with a means of evaluating and understanding how the company's management evaluates the company's operating performance. These non-GAAP measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with U.S. GAAP. Listeners who do not have a copy of the quarter-ended September 30, 2021 press release or the supplemental materials may obtain a copy by visiting the investor section of the company's website. Now, I will turn the call over to Steve.

Thank you, Erica. Good afternoon, and thank you all for joining us on our conference call. We are happy to be announcing a record revenue quarter of $526 million. We are seeing growing demands for our existing products across all segments and regions, and strong interest in our pipeline of new products In fact, we have already secured orders for delivery in Q4 and in Q1 of more than four gigawatts of AC nameplate inverters compared to 1.9 gigawatts that we shipped in this quarter. And we are still receiving additional orders for this period. In today's call, I will address the temporary headwinds that we are facing on the operational side, which will clarify our next quarter guidance which does not fully reflect the high demand for our products and our anticipated continued growth. In the last earnings release, we updated that production in our factory in Vietnam had been partially suspended due to a government-enforced COVID-related lockdown. We explained that assuming the interruption would be short, as we were expecting at the time, we would compensate for it by increasing capacity in our other factories, and this is indeed what we did. However, the shutdown ended up being longer and more extensive than expected, practically putting to a halt our manufacturing capacity in Vietnam for 12 weeks. Prior to this event, the Vietnam factory was providing between 20% and 25% of our capacity and the vast majority of our non-tariff shipments to the U.S. market. So while we increased capacity in the other sites to partially compensate for it, This shutdown created a gap in supply of products for the fourth quarter that will take some time to replenish and which will come at a higher cost due to the need for expedited shipments and due to tariffs from shipping more China-made products to the U.S. We are therefore guiding moderate revenue growth for the fourth quarter at a reduced gross margin. The production in the Viet Nam factory resumed October 1st and is gradually ramping back to full capacity, which is expected in mid-November. Unrelated to these events in Vietnam, we have been working for some time to build redundancy and expand our manufacturing footprint with a new contract manufacturing site in Mexico. We expect first products to ship from the facility in the first half of 2022, and once ramped, this site will significantly increase our capacity and give us further flexibility to manage growing demand from the U.S. market. As is indicated in our record revenue results in the third quarter, we experienced healthy demand for our products and ended the quarter with record backlog. While this is not a data point we usually provide and do not plan to do in the future, it is reflective of the commitments of our customers and their strong demand for our products. To that end, Other than in some unique cases of extreme logistical costs where we will share some of those costs with our customers, on a broader level, we do not currently plan to increase prices on deliveries this year. Our customers have trusted us with their early orders and we value their loyalty. To sum up this topic, we are happy with the record third quarter results and are focused on quickly closing the capacity gap created from the temporary factory closure in Vietnam, while ensuring we are meeting the needs of our customers. I'd like to share now some new product news, which is a big part of the demand increase we are seeing. The first is our energy bank residential battery. Production of the batteries is ramping at a good pace, and we have installations already in the US, Italy, Germany, England, Belgium, and first deliveries in Australia. This quarter, we manufactured and shipped approximately 20 megawatt hour of energy bank batteries, a bit below what we had anticipated. In Q4, we expect to ship approximately 70 megawatt hour, compensating for the delays from this quarter. By the end of the first quarter of 2022, we expect to reach production output of 300 energy bank batteries per day, or 180 megawatt hours per quarter. In parallel to ramping battery shipments, we continue to see strong demand for our energy hub inverter, where shipments were up from 21,000 units in the second quarter to 37,000 units in the third quarter. We also began shipments of the high-power version of the energy hub inverter with up to 11.4 kilowatt AC nameplate capacity and industry-leading 10.3 kilowatt continuous backup power per inverter. Considering the current trends of increased electrification and need for resilience, we expect average system size and the required power consumption in case of backup to increase as well. And as such, increased adoption of this configuration due to its capacity and power level. The availability of this inverter will also provide cost saving for our customers who until today, in many cases, have used multiple inverters to achieve these capacities and power levels. As battery attach rates and the interest in resilience intensifies, we are seeing strong interest globally in the combined energy hub energy bank solution, which offers a DC-coupled system that harvests more of the energy generated by the modules and feeds it into the battery, even when the power generated by the solar system exceeds the nameplate capacity of the inverter. An additional milestone on the product front is that we began installations in Japan of our JET certified HD wave inverter, which through a built-in AC socket enables direct power consumption from solar in case of power outage. This is a significant step for SolarEdge towards opening the large residential market in Japan, where this capability is mandated by regulation. Shifting to our offering of optimizers. In the third quarter, we began shipments in some regions of our fourth-generation optimizer that, among other improvements, enables high-efficiency optimization of newer generation solar modules with higher electrical currents. Additionally, this new optimizer is designed to incorporate the new safety mechanism. In some cases, electrical arcs and safety events are caused by loose connectors or damage caused to cabling from rodents or other various causes. In the new optimizer, we have incorporated a capability that actively measures the temperature at the connectors to detect excessive heat, even before it turns into electrical arc. This past quarter, we shipped more than 200,000 of these S-series Generation 4 optimizers, and we will continue to ramp in the coming quarters. On the commercial side, we continue to see increased activity driven, among other reasons, by corporations looking to reduce their carbon footprint via solar installations on their facilities. Many of these corporations choose the SolarEdge solution due to our safety and monitoring capabilities. In many cases, we are leveraging success at one site for global proliferation to other sites of these international corporations. On the smaller utility side, this quarter we installed our first ground mount installation of our new 330 kilowatt inverter. This one megawatt installation has three inverters and thousands of optimizers. These new 1.3 kilowatt optimizers are specially designed for this inverter from performance and cost point of view. and to fit the solar modules typically used in ground mount installations that are typically high power and in many cases bifacial. The experience from this installation will assist us as we ramp production and sales of this offering in 2022. Turning to our non-solar business, where we had a record quarter in revenues driven from our non-solar storage business. This is despite the lower than planned shipments in the e-mobility business, due to instability in the automotive industry. While our ability to deliver has ramped on schedule, considering the current trend in the automotive industry, we expect to end up delivering approximately $70 million from the immobility business for 2021. I will now hand it over to Ronen, who will review our financial results. Ronen.