Abstract

SolarEdge Technologies will report results on February 18, 2026 Pre-Market, with investors watching whether revenue lands within the company’s prior $310.00–$340.00 million guidance range and whether adjusted margins hold near the 19%–23% band despite tariff headwinds.

Market Forecast

Market expectations for the upcoming quarter center on revenue near $329.79 million, an adjusted loss per share around $0.27, and EBIT near a loss of $19.87 million; based on tool-returned growth ratios, these translate to a year-over-year revenue increase of 74.41%, an EPS improvement of 83.93% year-over-year, and an EBIT improvement of 83.57% year-over-year. Management’s prior outlook for the quarter called for revenue of $310.00–$340.00 million and adjusted gross margin of 19%–23%, including an approximately 2% tariff impact within that margin band.

The core business is expected to lean on inverter and DC-optimized system shipments, with the outlook tethered to margin discipline within the guided range and a focus on shipment mix and channel normalization after sequential improvement in the prior quarter. The segment with the clearest incremental catalyst is the “Other” category that includes emerging solutions tied to new power electronics collaborations; in the last reported quarter it contributed about $21.93 million, while company-level revenue grew 30.38% year-over-year.

Last Quarter Review

SolarEdge Technologies’ prior quarter delivered revenue of $340.18 million (up 30.38% year-over-year), gross profit margin of 16.92%, a GAAP net loss attributable to shareholders of $50.06 million for a net profit margin of -14.72%, and adjusted EPS of -$0.31 (a 97.98% year-over-year improvement by the tool’s growth convention). Quarter-on-quarter, net profit improved by 59.87%, signaling narrower losses despite still-negative margins. By business mix, the solar-related segment generated approximately $317.90 million (about 93.45% of revenue), the financing-related line about $0.37 million, and other revenue about $21.93 million, during a period when total company revenue grew 30.38% year-over-year.

A key operating highlight was sequential margin recovery: adjusted gross margin improved to 18.8% from the prior quarter’s 13.1%, aided by mix and cost actions, while cash generation turned positive with operating cash flow of $25.60 million and free cash flow of $22.80 million. Main business momentum was supported by an uptick in shipments—approximately 1,471 MW (AC) of inverters and 269 MWh of batteries—which helped push revenue to $340.18 million as company-level revenue advanced 30.38% year-over-year.

Current Quarter Outlook (with major analytical insights)

Core systems revenue and margin glidepath

The near-term operating narrative remains anchored to the inverter and DC-optimized platform, with the quarter’s revenue expected to land near the middle of the previously guided $310.00–$340.00 million range and consensus at $329.79 million. Margin quality is the critical variable: management’s 19%–23% adjusted gross margin band incorporates roughly 2 percentage points of tariff impact, which puts emphasis on component costs, factory utilization, and shipment mix to defend the midpoint. With GAAP gross margin last quarter at 16.92% and adjusted gross margin at 18.8%, the company needs further product mix and cost execution to close the gap and sustain the guided range, particularly if average selling prices remain competitive. The modeled EPS estimate of -$0.27 and EBIT loss estimate of $19.87 million imply ongoing operating deleverage, but the year-over-year improvement embedded in those figures (+83.93% on EPS and +83.57% on EBIT per the tool’s decimal-to-percentage interpretation) suggests losses could continue narrowing if the company maintains its pricing discipline and supply-chain efficiencies. The short-term check is whether shipments can be balanced against channel inventory and working capital targets so that the gross margin uplift is not offset by higher opex or logistics frictions.

Storage and new power electronics initiatives

The company’s “Other” category, which includes newer solutions and adjacencies, contributed about $21.93 million last quarter and is positioned as a prospective growth lever as new partnerships progress from development toward commercialization. Collaboration on advanced power conversion—aimed at higher-efficiency, high-voltage DC architectures—could increase medium-term mix quality if initial pilots translate into purchase orders. While discrete revenue growth rates for the “Other” category are not disclosed, a sustained cadence of battery shipments (269 MWh last quarter) and early customer traction in higher-value electronics would help lift blended margins, particularly if storage attach rates to core systems increase sequentially. Near-term, the revenue impact from next-generation platforms is likely modest; however, any concrete updates around design wins or initial shipments in this area would be a positive signal for out-year monetization and could buffer gross margin within the 19%–23% guide. Execution risk lies in timelines and qualification, but incremental news flow on deployments would be supportive for sentiment and could reduce reliance on pure volume growth in the core inverter line to hit revenue targets.

Earnings sensitivities most likely to move the stock

Three items are most likely to swing the share price around the print and guide: the revenue midpoint versus the $329.79 million consensus, the precise placement of adjusted gross margin within the 19%–23% band, and the magnitude of tariff drag embedded in guidance. A revenue run-rate that slips toward the low end of $310.00 million could pressure the stock if accompanied by a margin print at the lower bound, whereas a revenue result closer to $340.00 million alongside a margin outcome above 20% would underpin the case for narrowing losses into the next quarter. Additional sensitivities include shipment dynamics and cash generation: last quarter’s positive free cash flow of $22.80 million helped de-risk balance-sheet concerns; maintaining or improving that trajectory can offset concerns about negative EBIT and support valuation narratives built on operating leverage. Management commentary on US-made inverter exports to Europe, announced in late January, is another focal point: if this channel accelerates, it could favorably mix revenue toward product sets with lower logistics complexity and help sustain the guided adjusted margin range.

Analyst Opinions

Among recent research stances within the current window, bearish views outweigh bullish calls, with two explicit negative ratings versus a single recent upgrade, while multiple neutral ratings remain on the sidelines. Notably, Jefferies reiterated an Underperform and lifted its price target to $24.00, emphasizing that even if near-term revenue lands toward the high end of the company’s $310.00–$340.00 million guide, profitability remains a central challenge; the firm does not model a return to positive core profit for several years without a clear inflection in volumes and mix. BMO Capital also maintained a Sell with a $19.00 target, highlighting the risk that current guidance and channel conditions could constrain operating leverage and leave shares vulnerable if adjusted gross margin does not sustain above the midpoint of the 19%–23% range.

These bearish positions share several themes relevant to the quarter at hand. First, they frame the company’s guidance as consistent with a recovery in revenue but not yet conclusive on the path to profitability, given that the consensus still embeds an EBIT loss of about $19.87 million and an adjusted loss per share of roughly $0.27. Second, they caution that while last quarter’s adjusted gross margin improved to 18.8%, the company’s own outlook acknowledges about 2 percentage points of tariff drag, which could cap near-term upside unless further cost reductions or mix benefits materialize. Third, they point to the guidance spread and the possibility that management’s revenue range brackets a wide demand environment; if shipments skew toward lower-margin geographies or products—or if channel inventory rebalancing requires pricing incentives—then the margin outcome could land in the lower half of the 19%–23% band.

Where the bears diverge from more constructive takes is on duration and evidence thresholds. The negative camp is looking for sequential proof that margin expansion endures while operating losses continue to narrow, ideally with free cash flow staying positive in tandem; until then, their coverage suggests valuation may be capped by uncertainty over the slope of operating leverage. They also argue that incremental product catalysts—such as newer, higher-efficiency power electronics collaborations—are promising but not yet in a position to alter near-term earnings trajectory, leaving quarterly results driven mainly by the core systems business. In sum, the prevailing institutional stance within the latest rating changes leans cautious-to-negative: bearish views outnumber bullish ones, and these firms want evidence of sustained margin delivery and improved profitability before turning more constructive.