SolarEdge Technologies, Inc.

Welcome to the SolarEdge conference call for the fourth quarter and year ended December 31st, 2024. This call is being webcast live on the company's website at www.solaredge.com and the investors section on the events 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 of the SolarEdge investor website. I would now like to turn the call over to J.B. Lowe, head of investor relations for SolarEdge. Please begin.

Good morning. Thank you for joining us to discuss SolarEdge's operating results for the fourth quarter ended December 31st, 2024, as well as the company's outlook for the first quarter of 2025. With me today are Shuki Nir, Chief Executive Officer, and Ariel Peratt, Chief Financial Officer. Shuki will begin with a brief review of the results for the fourth quarter ended December 31st, 2024. Ariel will review the financial results for the fourth quarter, followed by the company's outlook for the first quarter of 2025. 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 safe harbor statements contained in our earnings press release, the slide presentation posted on our website ahead of this call today, and our filings with the SEC for a more complete description of such risks and uncertainties. Please note, during this earnings call, we may refer to 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 US GAAP. The non-GAAP measures are being presented because we believe that they provide investors with a means of evaluating and understanding how the company's management evaluates the company's operating performance. Reconciliation of these measures can be found in our earnings press release, slide presentation, and SEC filings. 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 December 31st, 2024 press release or the supplemental material may obtain a copy by visiting the investor relations section of the company's website. I will now turn the call over to Shuki.

Thank you, JB. Good morning, everyone, and thank you for joining today. SolarEdge is a global leader in renewable energy solutions, recognized for its innovation, engineering excellence, and strong customer relationships. While we face challenges, the long-term potential in solar storage and energy management has never been stronger. That's why I feel both honored and excited to step into this leadership role at such a pivotal time. Since joining SolarEdge several months ago, I've spent my time diving into the business, listening to customers, and connecting with our global team. These experiences and my learnings have helped me form a clear understanding of where we are and what we need to do differently moving forward. Everything I have seen and heard tells me we have significant strengths to build on. Demand for electricity is growing relentlessly. Solar is among the most cost-effective sources of energy, and SolarEdge is well positioned to lead this market due to the unique combination of our innovative technology, brilliant people, loyal distributors, over 70,000 installer partners, and the millions of homes and businesses that benefit from solar systems on a daily basis. Our financial results in recent quarters have been disappointing to our shareholders and employees, and it is clear we need to significantly change the way we operate to win back customers, extend our technological leadership, and return to growth. To drive this turnaround, I have identified four key priorities. Strengthening our financials, regaining market share, accelerating innovation, and ramping up U.S. manufacturing. These initiatives will not only help us navigate the current environment, but also position us for sustained long-term growth. A key pillar of our turnaround is strengthening our financials. In Q4, we generated approximately $26 million in free cash flow, above our forecast and ahead of schedule. we expect to generate positive free cash flow in Q1 2025 and remain free cash flow positive for the year. This progress will be driven by disciplined cash management, inventory reductions, and a fast transition to U.S. domestic content. Positive cash flow is an essential first step, but our turnaround includes a relentless focus on operational efficiency to drive our return to profitability. In early 2025, we made a very difficult decision to make additional headcount and expense reduction. We will continue to implement cost-saving measures by focusing on core projects, markets, and product lines. We are evaluating the outlook for our e-mobility and Solar Geek tracker businesses. Our second priority is regaining market share. As you may recall, back in November 2024, we launched a campaign to partner with our channel customers in Europe and international markets. The objective is to bring more attractive offerings to installers, help our distribution partners reduce their inventory levels, attract new customers, and grow shares. More recently, we have simplified our go-to-market structure to enhance agility, flattened the organization to get closer to our customers, and strengthen our partnership with distributors and installers. Our sales team is now laser-focused on reinforcing our core value proposition. We are a technology company developing industry-leading hardware and software solutions that enable generation of more energy and increase the ROI of our customers. Our solutions include advanced safety and cybersecurity capabilities, which have become increasingly important in recent quarters. Our value extends beyond just product. We've been heavily investing in delivering an excellent customer experience. We believe that our service and support organization stands out for its excellence in the industry with less than two minutes average waiting time at our worldwide call centers. Our third key priority for 2025 is accelerating innovation across both residential and commercial markets. ensuring we remain at the forefront of smart energy solutions. In residential, we continue to prioritize energy management software, which we see as a key driver for future growth. We believe we are the hardware vendor with one of the most sophisticated energy management software capabilities. In Europe, we recently introduced the SolarEdge One controller. This new product integrates third-party devices such as EV chargers and heat pumps, into the SolarEdge home ecosystem, optimizing energy usage, and maximizing savings. Moving to our next generation residential portfolio called Nexus, which includes our most powerful residential inverter to date, a modular battery, and a meter collar solution. We have just begun the alpha phase and are on track to deliver initial volumes of Nexus products during the fourth quarter of 2025. We believe that the Nexus solution will allow us to be more competitive in the marketplace. It generates more energy, shortens installation and commissioning time, addresses additional market segments, and reduces our cost structure. Moving to CNI. We are getting excellent traction with our commercial battery products. We have already sold this product in Germany, the Netherlands, Italy, the UK, France, Spain, the Czech Republic, Poland, Hungary, Taiwan, and South Africa. We see commercial storage as a strategic growth area for us. And here again, customers are choosing our storage product in particular because of the energy management solution we offer around it. Our fourth focus area for 2025 is ramping up our US manufacturing. We are now manufacturing inverters, optimizers, and batteries in the US, and have already created nearly 2,000 jobs at our facilities. Our Austin facility has ramped up to a run rate capacity of over 70,000 inverters per quarter, and our Florida facility is on track to reach a run rate capacity of 2 million optimizers per quarter in Q125. We have started reaping the benefits from this build-out by offering our customers a reliable supply of domestic content inverters, optimizers, and batteries. This allowed the signing of safe harbor agreements with two residential customers in late December, supporting them in their goal to lock in attractive project economics. We've also started to ramp up our domestic content commercial inverter manufacturing, with initial volumes expected at the end of the first quarter. We recently signed a supply agreement with Summit Ridge Energy, one of the largest developers of CNI solar in the US. This agreement demonstrates the competitive advantage that our domestic content products will deliver, particularly in large-scale rooftop solar. Before handing over to Ariel to discuss the financials, I'll provide a high-level update on the region. Our sales rule for Q4 was approximately $400 million. In North America, our sales rule was down 17% quarter over quarter. Our channel inventories here remained largely normalized. While there is additional uncertainty in the U.S. market due to potential policy changes, the long-term underlying fundamentals of the solar market are healthy. In Europe, our sell-through was roughly flat quarter over quarter. The European market remains challenged due to continued macro headwinds, and we expect the vast majority of our distribution partners to reach normalized inventory levels by the end of Q2 2025. To summarize, We have to focus on what we can control. We have to get back to our roots of passion for innovation. We have to implement best-in-class execution across everything we do, and we have to make fast and sometimes tough decisions to right-size the company. By doing so, we will accelerate our turnaround and position SolarEdge to reach its exciting full potential as a leader in solar, storage, and smart energy management in the years to come. I look forward to sharing our progress with you in the quarters ahead. And with that, I will turn it over to Ariel.