SolarEdge, the module-level power electronics firm, just had its first earnings call as a newly publicly traded company -- and it beat revenue estimates.

Here are the company's highlights for the most recent quarter:

  • SolarEdge had record revenue of $86.4 million, up 182 percent year-over-year
  • The company was profitable with a GAAP gross margin of 27.4 percent
  • SolarEdge had GAAP net income of $6.0 million, its third consecutive profitable quarter
  • The company shipped 248 megawatts AC inverters
  • According to the company, "We continued development of energy storage solutions, which we expect to bring to market toward the end of 2015."

SolarEdge also provided guidance for the next quarter:       

  • Revenues in the range of $92 million to $96 million
  • Gross margins in the range of 26 percent to 28 percent

Note that Enphase Energy, the closest competitor to SolarEdge, just posted revenue of $86.7 million, an almost exact match to SolarEdge's quarterly number.

Guy Sella, founder, chairman and CEO of SolarEdge, noted "the addition of a sizable new customer," adding that the company expected "revenue growth to continue through 2015 as originally the United States and Europe, both in the residential and commercial markets." That sizable customer is Vivint.

SolarEdge is another VC-funded solar firm that has made it through the IPO window. The Israel-based startup raised $126 million in its IPO in March, offering 7 million shares at $1 and pricing at the high end of the $16 to $18 range. Deutsche Bank and Goldman Sachs were the lead managers on the transaction. Needham & Company, Canaccord Genuity and Roth Capital Partners were co-managers. VC investors include Opus Capital (14.64 percent pre-IPO ownership), Genesis Partners (14.64 percent), Walden International (14.64 percent), Lightspeed Venture Partners (11.52 percent), Norwest Venture Partners (10.56 percent), Vertex Venture Capital (5.94 percent), and ORR Partners (5.47 percent).

In the past year, SolarEdge has gained tremendous traction in the U.S. residential market, where its market share was 26 percent in the third quarter of 2014, according to GTM Research's latest U.S. PV Leaderboard.

MJ Shiao, GTM's director of solar research, noted, "Globally, we see a huge opportunity for module-level power electronics, growing from less than 4 percent of global annual inverter shipments in 2014 to more than 11 percent by 2018. In 2015, we expect total combined MLPE shipments to well exceed 2 gigawatts. Furthermore, we expect the U.S. residential market to continue growing at 50 percent to 55 percent year-over-year ahead of the federal Investment Tax Credit cliff in 2017 -- a strong foundation and growth opportunity for MLPE vendors."

Scott Moskowitz, GTM solar analyst, added, "SolarEdge's increase in revenue in Q1 over Q4, in spite of strong seasonality, is proof of strong continued market share gain," adding, "248 megawatts of inverters shipped in Q1 is the largest single quarter ever for a module-level power electronics supplier."

Moskowitz continued, "SolarEdge's Q1 (FY Q3) earnings show strong momentum for the company post-IPO. Having the two largest residential installers (SolarCity and Vivint) as customers should continue to help SolarEdge considerably in the near term. SolarEdge now faces the challenge of having a target on its back. The MLPE market still has room for competitors beyond just SolarEdge and Enphase. Tigo, LG, KACO, Sparq, APS, SunPower/SolarBridge and others continue to innovate with the hopes of mounting a challenge. So while the value proposition for SolarEdge's system is strong, the company must continue to meet its cost targets to maintain its competitive advantage in the medium to long term."

Analysts from Deutsche Bank, Needham and Roth Capital (all involved in the IPO) have "buy" ratings and have raised the stock price targets.   

Shares of SolarEdge surged 15 percent to a new post-IPO high of $32.50.

Source: The Microinverter and DC Optimizer Landscape, 2014