Slide 1: Calendar Fourth Quarter 2016 Earnings summary
Calendar Fourth Quarter 2016 Earnings summary February 14, 2017
Slide 2: Safe Harbor
SAFE HARBOR Use of Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements include information, among other things, concerning: our possible or assumed future results
Slide 3: Key Operating Metrics
KEY OPERATING METRICS $$ 1,259K optimizers 57K inverters 413 Megawatts $111.5M revenues shipped shipped shipped
Slide 4: Fourth Quarter Highlights
FOURTH QUARTER HIGHLIGHTS Financial highlights for quarter Revenue of $111.5 million GAAP gross margin of 35.0% GAAP operating income of $15.1 million GAAP net income of $9.8 million Non-GAAP net income of $14.7 million Continue to generate cash flow from operations Business highlights for quarter 4
Slide 5: Noteworthy
NOTEWORTHY First quarter of declined revenues since CQ4/13, in line with slow down of U.S residential market and seasonality Continued cost reduction yield strong operational measures and higher than planned, 35% gross margin Annual ASP erosion excluding product mix effect, less than 10% No evident
Slide 6: Financial Results
FINANCIAL RESULTS *USD in millions CQ4'16 CQ3'16 CQ4'15 Revenues 111.5 128.5 124.8 Gross margin 35.0% 32.6% 30.9% Operating expenses 23.9 23.6 19.3 Operating income 15.1 18.2 19.3 Net income 9.8 15.6 24.1 Net diluted earnings per share 0.22 0.35 0.55 *with the exception of gross margin and per share
Slide 7: Non-GAAP Financial Results
NON-GAAP FINANCIAL RESULTS *USD in millions CQ4'16 CQ3'16 CQ4'15 Revenues 111.5 128.5 124.8 Gross margin 35.4% 32.9% 31.1% Operating expenses 20.9 20.9 17.3 Operating income 18.6 21.3 21.5 Net income 14.7 20.9 19.8 Net diluted earnings per share 0.32 0.46 0.44 *with the exception of gross margin and
Slide 8: Quarterly Revenues
QUARTERLY REVENUES USD millions $140.0 $120.0 $100.0 $80.0 $60.0 $40.0 $20.0 $- CQ4'15 CQ1'16 CQ2'16 CQ3'16 CQ4'16
Slide 9: Annual Revenues
ANNUAL REVENUES USD millions $500.0 $450.0 CAGR 40.8% $400.0 $350.0 $300.0 $250.0 $200.0 $150.0 $100.0 $50.0 “J $ cy'12 cy'13 cy'14 cy'15 cy'16 solar
Slide 10: Units Shipped
UNITS SHIPPED Optimizers shipped Inverters shipped K units 1,800 70,000 1,600 60,000 1,400 50,000 1,200 1,000 40,000 800 30,000 600 20,000 400 200 10,000 0 0
Slide 11: Gross Margin
GROSS MARGIN 35.0% 35.0% 32.5% 32.6% 33.0% 30.9% 31.4% 31.0% 29.0% 27.0% 25.0% 23.0% 21.0% 19.0% 17.0% 15.0% CQ4'15 CQ1'16 CQ2'16 CQ3'16 CQ4'16
Slide 12: Operating Expenses
OPERATING EXPENSES 21.4% 18.4% 20.0% 2.8% 16.8% 17.0% 18.0% 15.5% 2.9% 16.0% 2.8% 2.5% 1.8% 9.3% 14.0% 12.0% 7.2% 7.8% G&A 7.1% 7.0% 10.0% S&M 8.0% R&D 6.0% 9.3% 4.0% 6.6% 7.0% 7.4% 7.7% 2.0% 0.0% CQ4'15 CQ1'16 CQ2'16 CQ3'16 CQ4'16
Slide 13: GAAP Operating Income
GAAP OPERATING INCOME USD thousands 25,000 19,262 19,739 17,884 18,240 20,000 15,147 15,000 10,000 5,000 - CQ4'15 CQ1'16 CQ2'16 CQ3'16 CQ4'16
Slide 14: Non GAAP Operating Income
NON GAAP OPERATING INCOME USD thousands 25,000 21,488 22,370 21,340 20,285 18,647 20,000 15,000 10,000 5,000 - CQ4'15 CQ1'16 CQ2'16 CQ3'16 CQ4'16
Slide 15: Annual Operating Income
ANNUAL OPERATING INCOME GAAP NON - GAAP 82,642 71,010 75,000 55,808 75,000 62,042 60,000 60,000 45,000 45,000 30,000 30,000 15,000 15,000 951 - -400 - -15,000 CY'14 CY'15 CY'16 CY'14 CY'15 CY'16
Slide 16: GAAP Net Income
GAAP NET INCOME USD thousands 24,105 25,000 20,799 20,000 17,273 15,616 15,000 9,765 10,000 5,000 - CQ4'15 CQ1'16 CQ2'16 CQ3'16 CQ4'16
Slide 17: Non GAAP Net Income
NON GAAP NET INCOME USD thousands 23,330 25,000 20,895 19,804 19,921 20,000 14,738 15,000 10,000 5,000 - CQ4'15 CQ1'16 CQ2'16 CQ3'16 CQ4'16
Slide 18: Annual Net Income
ANNUAL NET INCOME GAAP NON- GAAP USD thousands USD thousands
Slide 19: Balance Sheet & Cash Flow
BALANCE SHEET & CASH FLOW USD in millions CQ4'16 CQ3'16 CQ4'15 Cash and investments 224.3 206.7 162.0 Inventory 67.4 68.4 87.4 Capital Expenditures 7.2 3.8 2.3 Total Debt - - - Cash Flow From Operations 24.7 24.4 13.1
Slide 20: Calendar First Quarter Outlook
CALENDAR FIRST QUARTER OUTLOOK Revenues expected to be within the range of $110 million to $120 million Gross margin expected to be within the range of 31% to 33%
Slide 21: Appendix
solarzehre solarzs{e-" Appendix
Slide 22: Reconciliation of GAAP to Non-GAAP
RECONCILIATION OF GAAP TO NON-GAAP
Slide 23: Reconciliation of GAAP to Non-GAAP
RECONCILIATION OF GAAP TO NON-GAAP
Slide 24: Reconciliation of GAAP to Non-GAAP
RECONCILIATION OF GAAP TO NON-GAAP
Slide 25: Reconciliation of GAAP to Non-GAAP
RECONCILIATION OF GAAP TO NON-GAAP Reconciliation of GAAP to Non-GAAP Net basic EPS Three months ended 6 months ended December 31, 2016 September 30, 2016 December 31, 2015 December 31, 2016 December 31, 2015 Net basic earnings per share (GAAP) 0.24 0.38 0.61 0.62 0.98 Stock-based compensation 0.08
Slide 26: NASDAQ | SEDG
solarzehre solarzs{e-" NASDAQ | SEDG