SolarEdge Technologies, Inc.

Today, ladies and gentlemen, welcome to the SolarEdge conference call for the first quarter ended March 31st, 2022. This call is being webcast live on the company's website at www.solaredge.com in the investors section of the event calendar page. This call is the sole property and copyright of SolarEdge with all rights reserved and any recording, reproduction, or transmission of this call without express written consent of SolarEdge is prohibited. You may listen to a webcast replay of this call by visiting the event calendar page of the SolarEdge investor website. I would now like to turn the call over to Mike Finari with Sapphire Investor Relations, Investor Relations for SolarEdge. Please go ahead.

Good afternoon. Thank you for joining us to discuss SolarEdge's operating results for the first quarter ended March 31st, 2022, as well as the company's outlook for the second quarter of 2022. With me today are TV Lando, Chief Executive Officer, and Ronan Fire, Chief Financial Officer. TV will begin with a brief review of the results for the first quarter ended March 31st, 2022. Ronan will review the financial results for the first quarter, followed by the company's outlook for the second quarter of 2022. We'll then open the call for questions. Please note, 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 Safe Harbor Statement contained in our press release and the slides published today for 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 U.S. GAAP. The non-GAAP measures represented 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 a substitute for, or superior to financial measures prepared in accordance with U.S. GAAP. Listeners who do not have a copy of the quarter-ended March 31, 2022 press release or the supplemental material may obtain a copy by visiting the Investors section of the company's website. Now I'll turn the call over to Dewey.

Thank you, Mike. Good afternoon, and thank you all for joining us on our conference call today. Starting with highlights of our first quarter results, we concluded the quarter with record revenues of approximately $655 million, more than $100 million over our previous record revenues achieved last quarter. Revenues from our solar business were at a record high of $608 million, while revenues from our non-solar business were $47 million. This quarter, we shipped 5.7 million power optimizers and 211,000 inverters, an increase of 600,000 and 14,000 units, respectively, from last quarter. Our solar business grew quarter over quarter by 21%, driven by growth in all segments and geographies, including record quarterly revenues in the United States and 14 European countries, including the Netherlands, Italy, Poland, Spain, Switzerland, and the UK. There's a lot of attention recently to what is happening in Europe, and I would like to add some color on this topic since it is a large source of our revenues. Traditionally, the first quarter in Europe is seasonally lower than other quarters, with significant pickup in the second quarter of each year. However, this year, we have seen significant increase in demand already in the first quarter, And the growth in our megawatt shipments from Q4 2021 to Q1 2022 was 40% in the residential segment and 52% in the commercial segment. On top of this, when we examine the sellout data from our distributors in Europe, it is at an all-time high and inventory days on hand at the distributors are exceptionally low. Considering the current dynamics in Europe of elevated electricity prices, supportive government initiatives, and our historically strong position in this region, and taking into account our current portfolio and new products we plan to release in the coming quarters, we expect our strong growth momentum in Europe to continue. In order to meet the high demand in Europe this quarter, we did have to ship additional products by air. which in combination with the Euro to dollar decline put pressure on our gross margin. Ronen will elaborate on this in a few moments. In the U.S. as well, this was a record revenue quarter. In particular, we saw high quarter-over-quarter growth in the commercial segment, where megawatt shipments grew by over 40%. This correlates with the global strong commercial momentum that we described in the analyst day that is associated with corporate ESG focus and high electricity prices. We continue to grow also in regions outside Europe and the U.S. with record revenues. Noteworthy among these countries is Taiwan, where we ship this quarter more than 50 megawatts of products, and in Japan, where we are ramping sales and installations of our newly certified residential offering. On the product side, we ship this quarter approximately 100 megawatt hours of our SolarEdge home residential battery. We are seeing good market acceptance and strong demand from multiple countries for this product, most recently with a successful launch in Australia. Customer feedback continues to be positive, in particular regarding ease of installation, multiple battery flexibility, and the overall advantages of a DC coupled system. We are on track in ramping our manufacturing facility, and plan to ship over 200 megawatt hours of batteries in the second quarter. We are also experiencing strong demand for all of our other SolarEdge home products, including water heaters, meters, and most notably our standalone and inverter-integrated EV chargers, of which we shipped approximately 8,000 units worldwide in the first quarter. In the commercial and industrial segment, this quarter we released the S1200, a high wattage power optimizer based on our fourth generation ASIC that supports the recently available high power and bifacial modules. We also continue to test our 330 kilowatt large-scale inverter in sites in Israel and in Europe and are on track for RAMP later this year, further strengthening our offer for ground mount installations. I would like now to elaborate on the operational challenges we are facing while ramping production of inverters, optimizers, and batteries to meet the continuously increasing demand we are seeing. We are facing three main areas of challenge while building our capacity to meet this demand. The first is electronic component availability, in particular, at the elevated volumes we require. The second is unpredictable COVID-related disruptions such as the recent one in Shanghai, affecting some of our raw material and component suppliers. And third are the longer logistic routes affecting both incoming supply to manufacturing sites and finished goods shipments. In order to overcome these challenges and to continue and supply our customers with the products they need, when and where they need them, now and in the future, we are on the one hand investing in growing our contract manufacturing facilities by adding space, people, and equipment, and on the other hand, managing the component supply chain with expedited shipments, paying in some cases high logistic costs to get components to our factories and to get products to our customers. While we have raised prices to cover increased components and material costs, we are not placing all of the infrastructure development and expedited shipment costs on our customers. We expect that some of these costs will be mitigated as we grow manufacturing capabilities, such as in Mexico, where this quarter we began to ship inverters and optimizers into the U.S., and we are on track to supply our entire residential inverter and optimizer U.S. offering from the Mexico factory by year-end. While we do not have clear visibility on when the shortage of components will stabilize and our elevated demand will be met in a more predictable manner, We are optimistic that the work we are doing to qualify additional component suppliers and to align short and long-term forecasts with top management of our key suppliers will ease the constraints towards the end of the year. In our non-solar business, our e-mobility division continued delivering full powertrain units and batteries for the Fiat e-Ducato in Europe, doubling our deliveries from the prior quarter, and we are expecting to grow another 30% in the coming quarter. In our energy storage division, the Celatu factory for lithium ion cells and batteries in Korea is now fully constructed and has received permits required to initiate test runs for full cell qualification. In summary, this is an exciting period where we are capitalizing on our long-term investment in a broad portfolio and global presence and are significantly growing our infrastructure and our business globally albeit in a challenging operational environment. With this, I hand it over to Hunen, who will review our financial results.