SolarEdge Cuts Staff Amid Weak Sales Outlook and Revenue Drop

SolarEdge is bracing for another weak quarter, reporting a 5.8% sequential decline in third-quarter 2026 revenue to $326.1 million. The solar inverter manufacturer anticipates fourth-quarter revenues between $245 million and $275 million, with the midpoint representing a roughly 20% drop from the previous quarter. This forecast follows news in late October that SolarEdge was laying off approximately 200 employees globally, about 10% of its workforce, with 50 to 60 of those cuts in Israel.

CEO Shuki Nir stated that the company is implementing cost-reduction measures and focusing its operations due to weak demand and the projected revenue decrease. No additional layoffs beyond the October announcement were detailed in the report. The company's operational loss narrowed to $1.9 million from $16 million in the prior quarter, and net loss fell from $30.8 million to $8.4 million.

Excluding certain accounting items, SolarEdge posted an operating profit of $23.9 million and a net profit of $21.1 million. Free cash flow remained positive for the fifth consecutive quarter, totaling $7.8 million. The reported gross profit margin rose to 33.2% from 27.5%, significantly boosted by a $36 million benefit related to U.S. tariffs. Without this tariff benefit, the gross profit margin would have been approximately 22.2%. For the fourth quarter, the company projects a non-tariff adjusted gross profit margin of 17% to 21%.

Concurrently, SolarEdge is exploring entry into the data center power infrastructure market for artificial intelligence, developing an electronic transformer to enhance voltage conversion and power supply for high-performance computing systems. While Nir noted interest from potential clients and partners, significant commercial orders in this area have not yet been reported. The company's ability to maintain positive cash flow while sales decline and the data center business remains nascent will be a key challenge.