SolarEdge Technologies, Inc.

Welcome to the SolarEdge conference call for the first quarter ended March 31st, 2023. This call is being webcast live on the company's website at www.solaredge.com and the investor section on 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 the expressed written consent of SolarEdge is prohibited. You may listen to a webcast replay of this call by visiting the event slash calendar page of the SolarEdge Investor website. I would now like to turn the call over to Erica Mannion at Sapphire Investor Relations, Investor Relations for SolarEdge.

Good afternoon. Thank you for joining us to discuss SolarEdge's operating results for the first quarter ended March 31, 2023, as well as the company's outlook for the second quarter of 2023. With me today are C.V. Lando, Chief Executive Officer, and Ronan Fire, Chief Financial Officer. CEBU will begin with a brief review of the results for the first quarter ended March 31, 2023. Learning will review the financial results for the first quarter followed by the company's outlook for the second quarter of 2020. We will then open the call for questions. Please note that this call will include four living 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 statements contained in our press release and the slides published today for a more complete description. All material contained in the webcast is a 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 are presented in this presentation as we believe they provide investors with the 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-ending March 31, 2023 press release or the supplemental material may obtain a copy by visiting the investor section of the company's website. Now, I will turn the call over to C.V.

Thank you, Erica. 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 $944 million. Revenues from our solar business were at a record $909 million while revenues from our non-solar business were $35 million. This quarter, we shipped 6.4 million power optimizers and 330,000 inverters. This quarter, we also shipped 221 megawatt-hour of residential batteries, a slight increase from last quarter. Our solar business revenue grew quarter over quarter by 9% and by 49% year over year, mostly driven by record revenues in Europe and rest of worlds. We saw record revenues in many countries this quarter, including Germany, Austria, Switzerland, France, South Africa and Australia, and very strong revenues from the Netherlands and Italy. Considering that this was a record revenue quarter from our non-U.S., non-Europe region, I want to share a little more information about the geographic landscape which we define as rest of worlds. Revenue this quarter from these regions were up 30% quarter over quarter and came from 24 countries across the Asia Pacific, Africa, and South America. Noteworthy countries in size of market and revenue include Australia, Israel, Taiwan, Thailand, Korea, Brazil, and South Africa. What I think is often overlooked is the extent of our geographic presence and the growth opportunities in these regions. For example, in South Africa, where due to a significant increase in power outage frequency and duration, we are seeing unprecedented demands for solar products, including our residential batteries. Or in Japan, where a recent regulation of the Tokyo Metropolitan Authority has created a special incentive for PV systems with module-level power electronics, for which we already have local certification. As we have said in the past and is evident this quarter, our global presence and infrastructure provides us with stability in our business and access to many growth opportunities. Moving back to the core regions and segments, the European residential markets continue to be very strong for us this quarter, as we ramped shift into three-phase residential inverters, in particular our new backup inverter, as well as the three-phase residential battery. We expect this momentum to continue in the coming quarters as we are still increasing capacity of backup inverters to deliver on the significant backlog and the strong demand for this product. In the U.S., revenues were down quarter over quarter, driven by weakness in the residential segment related to the general effect of interest rates and lower battery sales. As we noted last quarter, residential originations in the fourth quarter were seasonally down more significantly than in prior years, but origination data has improved in the first quarter to the level of the same time last year and even slightly higher. While we expect the uncertainties in the U.S. residential market to continue in the short term, we believe that the long-term dynamics of NEM 3.0 and our advantages under this regulation, which I will discuss further in a few moments, as well as the expectation for TPO share growth, cater well to our product offering and position in the markets. Moving to commercial. In the first quarter, we shipped a record 2.1 gigawatt of inverters, representing 36% quarter-over-quarter and 108% growth year-over-year. This record is a result of the strong demands we have been discussing in recent quarters around corporate ESG initiatives and the multiple CNI applications, coupled with the ramp in production that we have achieved. Momentum of the CNI market is global, and the inherent advantages of our solution in this market, among them safety, scalability, and balance of system cost efficiencies, position as well, such that demand for our product is still outpacing capacity. On top of the strong demand and market position of our commercial offering, part of our growth strategy includes providing our customers with energy management applications and services. In this context, this quarter, we closed the previously announced acquisition of Hart Systems. Hart's SAS products allow companies to get a granular level of energy transparency and then start acting on what they are seeing. It integrates with solar, storage, EV charging, HVAC, factory machinery, building management systems, smart meters, and other assets. Now that the acquisition is closed, we will use HART's capabilities to augment our software offering for CNI customers by providing additional monitoring and connectivity capabilities as our customers move from solar-only installations to systems with storage, easy charging, and other advanced energy needs. I want now to return to the topic of NEM 3.0, which became effective in California in April, and the suitability of our product offering to address this regulation. The main impact of the NEM 3.0 regulation is significant reduction in the economic benefit of exporting power to the grid. And as such, it is to the system's owner's advantage to use their energy the solar system produces during most times of the day. other than in specific instances when the utility pays an exceptionally high rate for the power exported from the system. Our large installed base of solar plus batteries in time of use or self-consumption markets, predominantly in European countries, has enabled us to gain experience managing such use cases, as well as develop specific algorithms to maximize the import and export optimization. Our analysis shows that the best return on investment under NEM 3.0 is achieved with a solar plus battery combination, but exact payback times can be affected by many different factors. Among these factors are system size, consumption patterns, oversizing ratio of DC panels to the inverter AC power, battery capacity and power, and the local utility provider's policy. In specific use cases, payback can be met within six to seven years. More importantly, homeowners can offset their monthly electricity bill by up to 95% using solar plus battery when paying for the system in cash, while when using alone, monthly electricity bill can be reduced by approximately 30%. To achieve best economics from a solar plus battery solution, the battery needs to be sized and managed in an optimal way. For example, under NEM 3.0, during the month of September, the export rate in some of the California utilities is as high as $3 per kilowatt hour for two hours in the afternoon after the sun is down and there is no solar power. To take full advantage of this high rate, the battery needs to have the right capacity and power. The SolarEdge home battery with its 10 kilowatt-hour capacity and 5 kilowatts of continuous power can discharge in full during this two-hour duration, contributing to maximum savings. In addition, with our DC coupled battery, there is only one AC to DC conversion of the energy stored in the battery compared to three conversions with an AC coupled battery. We estimate that approximately 5% to 7% of the energy is lost in every charge cycle of an AC battery. DC coupled batteries also make maximum use of system oversight. Since the battery is connected directly to the inverter and not through the AC panel, the system can store all excess energy generated from the panels above inverter AC capacity in the battery, generating as much as 3% more power during the peak summer months. Finally, in self-consumption mode, DC coupled batteries are simple to install and commission, as they only require one DC connection to the inverter and do not require a main panel upgrade. Homeowners can choose to start with a more cost-effective self-consumption battery, what we call rate saver mode, and add a backup option when desired. In conclusion, we feel that our hardware plus software solution addresses the N3.0 requirements in an optimal way, and we look forward to good adoption of our offering in this market. Before handing it over to Ronen, I would like to give a brief update on our operational stability and growth. Over the last two years, we have dealt with challenges around component availability, supply chain issues, and logistics constraints. The general improvement in the market, combined with the actions that we have taken, have allowed us to return to a more normal mode of operation. In most product areas, we are at a point where our manufacturing capacity is able to meet demand, and we can use normal shipping routes, build inventory, and reduce lead times. For other products, in particular three-phase inverters for commercial and residential use, we are still ramping and expect to reach stability within the next couple of quarters. Our operational plan includes adding manufacturing sites in the U.S. to increase capacity and benefit from the manufacturing credits of the IRA, where we are on track to have U.S. manufactured products in the third quarter of this year. With this, I hand it over to Anand, who will review our financial results.