SEDG 10-K & 10-Q changes, risk factors and insider trading

We achievedincurred a net loss of $405.4 million for the year ended December 31, 2025 and net loss of $1,806.4 million for the year ended December 31, 20242024. and net profit of $34.3 million for the year ended December 31, 2023. In 2021, we experienced an increase in revenues and profitability when compared to the same period in 2020. In 2022 our revenues grew when compared to the same period in 2021 while our net profit decreased due to reasons detailed in the Management's Discussion and Analysis Section of our Annual Report on Form 10-K for the year ended December 31, 2022. Conversely,Beginning in the third quarter of 2023, we experienced a slowdown in the demand for our products and during the second part of the third quarter of 2023, we experienced substantial unexpected cancellations and push outs of existing backlog from our European distributors. We continued to experience a slowdown in demand for our products throughout the year ending December 31, 2024. AsDespite a result,prolonged revenuessoftness in 2024demand, were significantly lower thanin the Companyyear expected.ending December 31, 2025, we have seen an increase in sales due to more normalized channel inventory in both the United States and in Europe.

In the future, our revenues may not grow at the pace we anticipate, or may decline for a number of reasons, many of which are outside our control, including a decline in demand for our products, increased competition, a decrease in the growth of the solar industry, disadvantageous changes to tax law, tax treaties, regulations, and guidance and interpretations related thereto, and business and industry trends including component shortagesshortages, increased competition, and supply chain disruptions due to ocean freight capacity, shipping times and port congestions as well as other macroeconomic conditions in our domestic and international markets, inflation concerns, rising interest rates and recessionary concerns, or our failure to continue to capitalize on growth opportunities. If we fail to maintain sufficient revenue to support our operations, we may not be able to reach or sustain profitability.

In addition, we expect to incur additional costs and expenses related to the continued developmentdevelopment, anddivestiture from businesses, expansion of our business, including in connection with recent or future acquisitions as well as ongoing marketing andmarketing, developing our products, development of our own manufacturing facilities, expanding into new product markets and geographies,markets, maintaining and enhancing our research and development operations and hiring additional personnel. We do not know whether our revenues will grow rapidly enough to absorb these costs, or the extent of these expenses or their impact on the results of our operations.

A changeChanges in tax law,laws, tax treaties, andregulations, regulationsguidance or the interpretation of them, including the Inflation Reduction Act.Act and the OBBBA

In August 2022, the IRA was signed into federal law. The IRA provides for, among other things, certain incentives, including certain tax credits, intended to promote clean energy. The Company has invested resources in establishing a manufacturing presence in the U.S. to benefit from the incentives available under the IRA, including benefits to installers for the purchase and installation of U.S. manufactured products and incentives for manufacturers of such products domestically. Moreover, we incorporated into our financial planning and agreements with our customers and suppliers certain assumptions regarding the future level of U.S. tax incentives. Any unfavorableUnfavorable regulatory treatment, orguidance, guidance,interpretation, expiration of or changes to the benefits being made available, which we relied upon in structuring certain projects and investments, or any adverse impacts on our ability to ramp upincrease production in the U.S. in a timely manner to benefit from the incentives available under the IRA,IRA and H.R.1., could adversely impact our business and financial condition.

Our revenues are primarily derived from products utilized in solar PV installations. Thus, our future success depends on continued demand for solar energy solutions and our ability, and the the ability of vendors to meet this demand. The solar industry is an evolving industry that has experienced substantial changes in recent years, and we cannot be certain that consumers, businesses, or utilities will adopt solar PV systems as an alternative energy source at levels sufficient to grow our business. If demand for solar energy solutions fails to continue to develop sufficiently, demand for our products and services will decrease, resulting in an adverse impact on our ability to increase our revenue and grow our business.

Additionally, there is fluctuating demand for solar energy solutions and we manufacture our products according to our estimate of future customer demand. We have experienced, and may in the future continue to experience, excess or shortages of product inventory as a result. This process requires us to make multiple forecasts and assumptions relating to the demand of our distributors, their end customers and general market conditions. BecauseAs we sell most of our products to distributors, who in turn sell to their end customers, we have limited visibility as to end-customer demand. We depend significantly on our distributors to provide us visibility into their end-customer demand, and we use these forecasts to make our own forecasts and planning decisions. If the information from our distributors turns out to be incorrect or incomplete, then our own forecasts may also be inaccurate. Furthermore, we do not have long-term purchase commitments with most of our distributors or end customers, and our sales are generally made by purchase orders that may be canceled, changed or deferred without notice to us or penalty. As a result, it is difficult to forecast future customer demand to plan our operations.

The cancellation or deferral of product orders, or overproduction due to a change in anticipated order volumes could result in us holding excess or obsolete inventory, which could result in inventory write-downs and, in turn, could have a material adverse effect on our financial condition. For example, in the second part of 2023, the solar industry began to experience a downturn, particularly in Europe, and we experienced substantial unexpected cancellations and push outs of existing backlog from our European distributors. This was a result of operational challenges in the later part of 2022, followed by record level shipments in the first half of 2023, slowing market demand in the third quarter of 2023, and which continued through the year ending December 31, 2024, as distributors began to experience financial challenges. In November 2025, Posigen, Inc., a customer of ours, announced that it filed for Chapter 11 bankruptcy in the Southern District of Texas, following a major liquidity crisis, leading to cancellations of orders. Some of our customers and some installers who purchase our products from distributors have shown signs of financial distress and some have requested and received extended payment terms or loans from us. Additionally, uncertainty related to changes in tariffs, trade policies, legislation, and guidance including from H.R.1, may further contribute to market volatility and adversely impact customer demand for our products, pricing and our financial performance. We may have to make significant provisions for inventory write-downs based on events that are currently not known, and such provisions or any adjustments to such provisions could be material. We may also become involved in disputes with our suppliers who may claim that we failed to fulfill forecast or minimum purchase requirements.

In the past, unfavorable macroeconomic and market conditions have resulted in sustained periods of decreased demand. Macroeconomic and market conditions could be adversely affected by a variety of political, economic or other factors in the U.S.U.S., Europe, and international markets, which could, in turn, adversely affect spending levels of installers and end users and could create volatility or deteriorating conditions in the markets in which we operate. Macroeconomic uncertainty or weakness could result in:

Decreases in the retail prices of electricity from the utility grid, or other renewable energy resources, would make the purchase of solar PV systems less economically attractive and would likely lower sales of our products. The price of electricity derived from the utility grid could decrease as a result of:

Moreover, technological developments in the PV and solar components industry could allow our competitors and their customers to offer electricity at lower costs lower than those that we can be offered by usoffer to our customers, which could result in reduced demand for our products. If the cost of electricity generated by solar PV installations incorporating our systems is high relative to the cost of electricity from other sources, our business, financial condition, and results of operations may be harmed.negatively impacted.

An increase in interest rates or tightening of the supply of capital in the global financial markets could make it difficult for end-users to finance the cost of a solar PV system and could reduce the demand for smart energy products and thus the demand for our products.

Many end-users depend on financing to fund the initial capital expenditure required to develop, build, or purchase a solar PV system. An increase in interest rates or a reduction in the supply of project debt financing or tax equity investments, could reduce the number of solar projects that receive financing or otherwise make it difficult for our customers or the end-users to secure the financing necessary to develop, build, purchase, or install a solar PV system on favorable terms, or at all, and thus lower demand for our products which could limit our growth or reduce our net sales. In addition, we believe that a significant percentage of end-users install solar PV systems as an investment, funding the initial capital expenditure through financing. An increase in interest rates could lower such end-user’s return on investment on a solar PV system, increase equity return requirements or make alternative investments more attractive relative to solar PV systems, and, in each case, could cause such end-users to seek alternative investments. During 2022 and 2023, record levels of inflation have resulted in significant volatility and disruptions in the global economy. In response to rising inflation, central banks in the markets in which we operate, including the U.S. Federal Reserve and the European Central Bank, have tightened their monetary policies and raised interest rates. Such measures have adversely impacted the demand for our products whichand may continue if there is a period of sustained heightened inflation.

The market for our products is highly competitive and we expect to face increased competition as new and existing competitors introduce power optimizers, EV chargers, inverters, solar PV system monitoring, batteries and other smart energy products, which could negatively affect our results of operations and market share.

The market for solar PV solutions is highly competitive.competitive and increasing competition may adversely affect our market share, revenues, gross margins, and profitability. We principally compete with traditional inverter manufacturers as well asmanufacturers, microinverter manufacturers.manufacturers, Currently,and ouremerging MLPE technology providers. Our DC optimized inverter system competes with products from these traditional inverter manufacturers, microinverter manufacturers,competitors as well as emergingnew technology companiesentrants offering alternative MLPE products.technologies. Over the past fewlast years, several new entrants to the inverter and MLPE market, including low-cost Asian manufacturers, have announcedentered, plans to shipannounced, or haveexpanded already shipped products ininto markets in which we sell our products, including, with respect to sales in the U.S., AustraliaAustralia, and in Europe. We expect competition to intensify as new and existing competitors enter the market. InIncreasing addition,competition thereis arebeing severaldriven newby entrantsevolving thatsafety arestandards, proposingthe emergence of higher‑power PV modules, rising demand for storage batteriessolutions, as well as solutions toand the rapidentry shutdownof functionalityadditional whichMLPE, hasinverter, becomebattery, aand regulatorysoftware‑based requirementenergy‑management forproviders PVacross rooftopour solarkey systemsmarkets, inacross theboth U.S.our residential and C&I markets.. If these new technologies are successful in offering a price competitive and technological attractive solution to the residential solar PV market, this could make it more difficult for us to maintain market share.

Several of our existing and potential competitors have the financial resources or have received certainfinancial resources or benefit from government subsidies or state‑supported financing, in order to offer competitive products at aggressive or below-market pricing levels, which could cause us to lose sales or market share or require us to lower prices for our products in order to compete effectively. Specifically, competition from Chinese state owned or financed companies pose apricing threat.pressure on us and may exacerbate regional market volatility. If we have to reduce our prices by more than we anticipated, or if we are unable to offset any future reductions in our average selling prices by increasing our sales volume, reducing our costs and expenses or introducing new products, our revenues and gross profit would suffer.

In addition, competitors may be able to develop new technologies or products more quickly than us, may partner with other competitors to provide combined technologies and competing solutions and may be able to develop products that are more reliable or that provide more functionality than ours.

Significant developments in alternative technologies, such as advances in other forms of distributed solar PV power generation, storage solutions, such as batteries, the widespread use or adoption of fuel cells for residential or commercial properties or improvements in other forms of centralized power production, may have a material adverse effect on our business and prospects. Any failure by us to adopt new or enhanced technologies ortechnologies, processes, or to react to changes in existing technologies, could result in product obsolescence, the loss of competitiveness of our products, decreaseddecreases revenuein our revenue, and a loss of market share to competitors.

Our future success partly depends on continued demand for solar PV systems in the end-markets we serve, including the residential and commercial sectors in the U.S.U.S., Europe and Europe.additional international markets. The solar industry has historically been cyclical and has experienced periodic downturns which have affected and may in the future affect demand for our products. The solar industry has undergone challenging business conditions in past years, including downward pricing pressure for PV modules, mainly as a result of overproduction, and reductions in applicable governmental subsidies, contributing to demand decreases. For example, since the second part of 20232023, throughout 2024, and throughout 2024,2025 the solar industry experienced a downturn, which continues,persists. particularlyThis indownturn Europe, whichinitially led to a large amount of requests to cancel or push out orders during 2023 and into 2024, and the buildup of a significant backlog for our products.products.In Thisthe slowdownsecond half of 2023, throughout 2024, and throughout 2025, with a downturn of the renewable energy demand, some players in the market inhave Europeannounced continuesexiting the solar market and others have shown signs of financial distress. For example, in 2025November and2025, itPosigen, isInc., nota clearcustomer whenof demandours, for PV systems in Europe will increase and return to the levelsannounced that it wasfiled atfor Chapter 11 bankruptcy in 2021the Southern District of Texas, following a major liquidity crisis. Some of our customers and 2022.some Additionally,installers therewho purchase our products from distributors have shown signs of financial distress and some have requested and received extended payment terms or loans from us. There is no assurance that the solar industry will not suffer additional significant downturns in the future, which will adversely affect demand for our solar products and our results of operations.

Furthermore, defective components may give rise to warranty, indemnity, or product liability claims against us that exceed any revenue or profit we receive from the affected products. In most cases, we offer a minimum 12-year limited warranty for our inverters, extendable to twenty-five years for an additional cost, a 25-year limited warranty for our power optimizers and a 10-year limited warranty for our residential energybatteries bankand battery.storage solutions. Our limited warranties cover defects in materials and workmanship of our products under normal use and service conditions; therefore, we bear the risk of warranty claims long after we have sold products and recognized revenue. While we do have accrued reserves for warranty claims, our estimated warranty costs for previously sold products may change to the extent future products are not compatible with earlier generation products under warranty. Our warranty accruals are based on our assumptions and in some cases we do not have a long history of making such assumptions. As a result, theseThese assumptions could prove to be materially different from the actual performance of our systems, or from claims made by installers, customers or end users, causing us to incur substantial unanticipated expenses to repair or replace defective products in the future or to compensate customers for defective products. Our failure to accurately predict future claims could result in unexpected volatility in, and have a material adverse effect on, our financial condition. In particular, our commercial CSS-OD batteries are still relatively new onto the marketmarket, and weour do not have theoperational experience in servicing these products yet.is still developing.

While we manufacture a small portion of our products in Israel, we heavily rely upon our contract manufacturers to manufacture most of our products. We mainly rely on two contract manufacturers. Any change in our relationship or contractual terms with our contract manufacturers, or changes in our contract manufacturers’ ability to comply with their contractual obligations could adversely affect our financial condition and results of operations. Our reliance on a small number of contract manufacturers makes us vulnerable to possible capacity constraints and reduced control over component availability, delivery schedules, manufacturing yields and costs. Even though we havealso commenced manufacturingmanufacture in our facilities in Israel, the expected production volumes will not be sufficient to relieve our significant dependence on our contract manufacturers. In addition, we remain heavily dependent on suppliers of the subcomponents and components needed for our manufacturing.

We depend on limited or single source suppliers for certain key components and raw materials used to manufacture our products, making us susceptible to quality issues, shortages and price changes. Any of these limited or single source suppliers could stop supplying, or offering at commercially reasonable prices, our components or raw materials, cease operations or be acquired by, or enter into exclusive arrangements with our competitors. Moreover, we rely on suppliers in China for certain key subcomponents or components, and rising tensions between China and other countries could damage our relationships with these suppliers. Because there are few suppliers of raw materials used to manufacture our products, itIt may be difficult to timely identify and/or qualify alternate suppliers on commercially reasonable terms; therefore, our ability to satisfy customer demand may be adversely affected. Transitioning to a new supplier or redesigning a product to accommodate a new component manufacturer would result in additional costs and delays that could harm our business or financial performance.

Any interruption in the supply of limited source components or raw materials for our products would adversely affect our ability to meet scheduled product deliveries to our customers and could result in lost revenue or higher expenses associated with increased air shipments required to meet customer demand in a timely manner and would harm our business. For example, in 2021 and 2022, we experienced raw material shortages due to increased lead time which affected our ability to timely receive certain components within the previously expected lead times. If this were to reoccur, such shortages could result in a delay in sales, higher costs associated with air shipments, cancellations of orders by customers, liquidated damages for late deliveries and loss of market share.

TheFor example the conflict that began between Russia and Ukraine in late February 2022 may lead to disruptions to our supply-chain and logistics. Specifically, the conflict may disrupt the transit of goods by train from China to Europe, resulting in an increase in prices of certain raw materials sourced in Russia (such as nickel and aluminum) that we use in the manufacture of our products as well as increase in oil prices that will in turn cause overall shipping costs to rise.products. In addition, the governments of the U.S., the European Union, Japan and other jurisdictions have announced sanctions on certain industry sectors and parties in Russia and the regions of Donetsk and Luhansk, as well as enhanced export controls on certain products and industries. These and any additional sanctions, as well as any counter responses by the governments of Russia or other jurisdictions, could adversely affect the global financial markets generally and levels of economic activity as well as increase financial markets volatility and any additional measures or sanctions, as well as the resulting rise in prices of oil and certain raw materials sourced in Russia may disrupt our business and results of operations and/or adversely affect the pricing of our products.

In the second half of 20232023, throughout 2024, and throughout 2024,2025, with thea downturn of the renewable energy demand, some players in the market have announced exiting the solar market and others have shown signs of financial distress. For example, in JanuaryNovember 2024,2025, ADTPosigen, Inc., a customer of ours, announced that it wasfiled exitingfor Chapter 11 bankruptcy in the residentialSouthern solar business completely after having bought Sunpro Solar in 2021. ADT was not a customerDistrict of SolarEdge, but the trend could continue and SolarEdge customers could also decide to exit the solar business.Texas.. Some of our customers and some installers who purchase our products from distributors have shown signs of financial distress and some have requested and received extended payment terms or loans from us. If these installers and distributors become insolvent or if some of their customers fail to pay our distributors for products sold by such distributors, we may need to write off some of their debt to us and we may suffer harm to our business, financial condition, and results of operations.

There hashave been an increase in consolidation activities among distributors, large installers, and other strategic partners in the solar industry. For example,example in OctoberSunPower 2020,Inc. Sunrun,a solar technology, services and installation company acquired Sunder Energy, a leading providerresidential solar sales company, in September 2025. In November 2025, Sun Power Inc also acquired Ambia Solar, a residential solar installation company. Additionally, in September 2025, Solaris Assets, LLC, and certain of its affiliates acquired substantially all the assets and business operations of Sunnova Energy International Inc., a residential solar,solar and battery storage and energy services, acquired Vivint Solar. In addition, in December 2021, Stem Inc., a storage software and services company acquired AlsoEnergy, a solar asset management software company. If thisconsolidations consolidationpersist continuesin andthe impactssolar industry, our customers,customers itmay willbe furtherimpacted, as we may increase our reliance on a small number of customers for a significant portion of our sales and may negatively impact our competitive position in the solar market.

We have discontinued our e-Mobility business andbusiness, energy storage business, and PV Tracker business, resulting in the write-off of tangible and intangible assets.

In October 2023, the Company decided to discontinue its LCV e-Mobility activity related to the supply of products to its sole customer, Stellantis. Our e-Mobility business currently does not have additional substantial projects in the pipeline, and we do not plan to engage additional customers or generate revenues from the e-Mobility business. We have therefore discontinued this business. In November 2024, the yearCompany endedannounced Decemberthat 31,it 2022,intends weto impaireddiscontinue goodwillits andEnergy intangibleStorage assetsbusiness related to the manufacture of batteries, mainly at our e-MobilitySella business2 andlocation in South Korea in order to focus on the yearCompany's endedcore solar business. On September 4, 2025, as part of the decision to close our Energy Storage Division, we sold our last battery cell manufacturing facility in South Korea. During December 31,2025, 2023,the Company decided to undertake actions necessary to substantially complete the liquidation process of SolarEdge Technologies Korea Co., Ltd. In April 2025, we impaireddivested tangiblefrom assetsour includingPV machinerytracker andbusiness, inventoryas write-off.part Suchof impairmentour chargeseffort haveto had a negative impactfocus on our operatingcore results and related financial statements.activities.

In order to operate more efficiently and cost effectively, we have, and we may from time to time, adjust employment levels, optimize our footprint and/or implement other restructuring activities. For example, in January, July, and November 2024, as well as January 2025, we announced adoption of a restructuring plan in response to challenging industry conditions, including a reduction in workforce. In 2025, we began to strategically focus on our core markets and product lines to better align resources with markets and product lines that exhibit the strongest potential. As part of this strategic portfolio rationalization, we are concentrating our operations in key jurisdictions while discontinuing local activities in certain countries. These activities are complex and may involve or require significant changes to our operations. If we do not successfully manage these activities, expected efficiencies and benefits might be delayed or not realized. Risks associated with these actions and other workforce management issues include: unfavorable political responses and reputational harm; unforeseen delays in the implementation of the restructuring activities; additional costs; adverse effects on employee morale; the failure to meet operational targets due to the loss of employees or work stoppages; and difficulty managing our operations during or after facility consolidations, any of which may impair our ability to achieve anticipated cost reductions, harm our business or reputation, or have a material adverse effect on our competitive position, results of operations, cash flows or financial condition.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the section of this Annual Report on Form 10-K captioned “Business” and our consolidated financial statements and the related notes to those statements included elsewhere in this Form 10-K. In addition to historical financial information, the following discussion and analysis contains forward looking statements that involve risks, uncertainties, and assumptions. Our actual results and timing of selected events may differ materially from those anticipated in these forward looking statements as a result of many factors, including those discussed under the sections of this Annual Report captioned “Special Note Regarding Forward Looking Statements” and “Risk Factors”. For discussion related to changes in financial condition and the results of operations for the year ended December 31, 2023 (including as compared to 2022),2024, refer to Item 7- Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 26,25, 2024.2025.

We are a global smart energy technology company. We develop, manufacture, and sell products that address a broad range of energy market segments through our diversified product offering, including residential, commercial and large scale photovoltaic or PV, energy storage and backup solutions, electric vehicle or EV charging capabilities, home energy management, grid services and virtual power plants,plants. asBy wellleveraging asengineering products in our non-solar businesses including lithium-ion cells, batteriescapabilities and energywith storage systems, prior to October 2024, automation machines ("Automation Machines") and in prior years we also had product offerings for the e-mobility market. In October 2023, we decided to discontinue our LCV activity and the remaining e-mobility activity. Starting January 1, 2024, all e-mobility activity, which includes PV solutions are included under our solar segment. In October 2024, the Company completed the sale of Automation Machines. Additionally, in November 2024, the Company announced the closure of its Energy Storage Division, as part of itsa focus on itsinnovation, coresafety solarand activitiesreliability, Inwe thecreate fourthsmart quarterenergy 2024solutions thethat Companypower identifiedour onelives reportableand segment:drive thefuture Solar segment.progress.

For the year ended December 31, 2024,2025, one customer accounted for 12.9%18.6% of our revenues and our top three customers (all distributors) together represented 31.3%35.8% of our revenues.

Our revenues were $901.5$1,184.4 million and $2,976.5$901.5 million for the year ended December 31, 20242025 and 2023,2024, respectively. For the year ended December 31, 20242025 our gross lossprofit was 97.3%16.6% as compared to gross profitloss of 23.6%97.3% for the year ended December 31, 2023.2024. For the year ended December 31, 2024,2025, our net loss was $1,806.4$405.4 million as compared to our net incomeloss of $34.3$1,806.4 million for the year ended December 31, 2023.2024.

In managing our business and assessing financial performance, we supplement the information provided by the financial statements with other operating metrics. These operating metrics are utilized by our management to evaluate our business, measure our performance, identify trends affecting our business and formulate projections. WeAs usediscussed in our quarterly report on Form 10-Q for the third quarter of 2025, we re-evaluated the key operating metrics relatingthat we have historically used to shipmentsmeasure our operating performance to improve their accuracy and relevance to the Company's business. This process included our application of inverters,new powerdata, optimizerstechnologies, and/or megawattsproduct changes that may allow us to evaluateidentify ourmetrics salesthat performancewe andview to trackbe marketthe acceptancemost reflective of our products. We use metrics relating to monitoring (systems monitored) to evaluate market acceptance of our products and usage of our solution.business.

Due to the war that began on October 7, 2023, some of our employees in Israel were called to active reserve duty and additional employees may be called in the future, if needed. In the year ended December 31, 20242025, approximately 319279 or 13% of our employees in Israel have beenwere called to active reserve duty for varying periods. WhileOn ourOctober offices9, 2025, Israel, Hamas, the United States and facilitiesother are open worldwide, includingcountries in Israel,the and,region agreed to date,a weframework havefor nota hadceasefire disruptionsin to our ability to manufacture and deliver products and services to customers. Although the situation is somewhat stabilized due to ceasefiresGaza between Israel and Hamas,Hamas. asIt wellis asunknown Israelwhether andthis Hezbollah,ceasefire anwill escalationendure, ofor theif currentother conflicts in IsraelGaza, couldLebanon, materiallyYemen, adverselyIran, affector our business, financial condition, and results of operations. Due toin the ongoingbroader andregion evolvingwill naturereemerge ofor escalate in the conflict in Israel, and the extent of these events, the adverse effect on our business operations is still unknown.future.

The majority of our key employees and officers are residents of Israel. If any of our facilities in Israel were to be damaged, destroyed or otherwise rendered unable to operate, whether due to war, acts of hostility, earthquakes, fire, floods, storms,otherstorms, other natural disasters, employee malfeasance, terrorist acts, power outages or otherwise, or if performance of our research and development is disrupted for any other reason, such an event could delay commercialization of our products, and if we choose to manufacture all or any part of them internally, jeopardize our ability to manufacture our products as promptly as our prospective customers will likely expect, or possibly at all. If we experience delays in achieving our development objectives within a timeframe that meets our prospective customers’ expectations, our business, prospects, financial results and reputation could be harmed.

We generate revenues from the sale of DC optimized inverter systems for solar PV installations, which include power optimizers, inverters, storage and backup solutions, EV chargers, smart energy devices, our cloud-based monitoring platform, extended warranty for our products and grid services. Our customer base mainly includes distributors, large solar installers, wholesalers, and EPCs. In addition, we also generated revenues from the sale of lithium-ion cells, batteries and energy storage solutions and automation machines.

Our revenues from the sale of solar-relatedour products are affected by changes in the volume and average selling prices of our DC optimized inverter systems. The volume and average selling price of our systems is driven by the supply and demand for our products, changes in the product mix between our residential and commercial products, the customer mix between large and small customers, the geographical mix of our sales, sales incentives, end user government incentives, seasonality, and competitive product offerings. Revenues from the sale of lithium-ion cells, batteries, energy storage system or ESS products, are affected by the type of product sold (cell, battery or system) and the type of battery that is sold.

Our revenue growth is dependent on our ability to expand our market share in each of the geographies in which we compete, expand and retain our global footprint to newin evolving markets, manage our production capabilities to meet demand, continue to develop and introduce new and innovative products that address the changing technology and performance requirements of our customers and expand of the new businesses we acquired.customers.

Cost of revenues consists primarily of product costs, including purchases from our contract manufacturers and other suppliers, as well as costs related to shipping, customer support, product warranty, personnel, depreciation of testing and manufacturing equipment, amortization of intangible assets and other fixed costs, provision for losses related to slow moving and dead inventory, hosting services for our cloud based monitoring platform, variable utility costs, operational costs related to the manufacturing factories, other logistics services, and contract termination costs, partially offset by AMPTCs we are entitled to under IRA. When evaluating potential manufacturing locations, the Company considers the full cost structure associated with the cost of revenues and the related decision‑making process reflects a holistic review of operational, logistical, financial, and strategic parameters, including market conditions, cost structures, tariffs, and the evolving policy landscape. Our product costs are affected by technological innovations, such as advances in semiconductor integration and new product introductions, economies of scale resulting in lower component costs, improvements in production processes and automation, the volume of products subject to import tariffs (for example, for imports from China to the U.S.) and the volume of products for which manufacturing credits are available (for example, for products made in the U.S.). Some of these costs, primarily personnel, amortization of intangible assets and depreciation of testing and manufacturing equipment, are not directly affected by sales volume.

Cost of revenues also includes our operations, productionproduction, and support departments’ costs. TheOur operations and production departments are responsible for production management such as planning, procurement, supply chain, production methodologies and machinery planning, logistics managementmanagement, and manufacturing support to our contract manufacturers, as well as the quality assurance of our products. Our support department provides customer and technical support at various levels through our call centers around the world as well as second and third-level support services, which are provided by support personnel located in our headquarters. Our employees headcount in our operations, production and support departments has reducedincreased to 1,935 as of December 31, 2025 from 1,804 as of December 31, 2024 from 2,857 as of December 31, 2023.2024.

In October of 2023, the Company made an announcement regarding its restructuring plans to adjust its manufacturing capacity and increase operating efficiency, including, terminatingincluding the manufacturingdiscontinuation process in Mexico, reducing manufacturing capacity in China, and discontinuingof the Company’s LCV e-Mobility activity,activity. and onOn January 21, 2024, the Company announced adoption of additional measures in response to challenging industry conditions, including reducing its headcount by approximately 900 over the first half of 2024 through involuntary workforce reduction plans, followed by an additional involuntary workforce reduction in July 2024 resulting in the layoff of approximately 400 employeesemployees. (together,On November 27, 2024, the “RestructuringCompany Plans”).announced the closure of its Energy Storage Division. Under the closure, the Company expected to reduce its headcount by approximately 500 employees, primarily employees working in manufacturing positions in South Korea. These decisions were made in order to better align the Company with current market conditions.conditions (together, the “Restructuring Plans”).

Gross profit (loss) may vary from quarter to quarter and is primarily affected by our average selling prices, product costs, manufacturing ramp-up costs, restructuring costs, product mix, customer mix, geographical mix, location of manufacturing, shipping method, warranty costs, generation and recognition of AMPTCs, ability to benefit from certain tax credits, inventory write-offs, exchange ratesrates, and seasonality.

Operating expenses consist of research and development, sales and marketing, general and administrative, goodwill impairment and other operating expenses, net. Personnel-related costs are a significant component of the operating expenses and include salaries, benefits, payroll taxes, commissions, severance and stock-based compensation. Our employees headcount in our research and development, sales and marketing and general and administrative departments, has reduced to 1,641 as of December 31, 2025 from 2,157 as of December 31, 2024 fromas 2,776 aspart of December 31, 2023. Under the 2024 and 2025our Restructuring Plans described above, our headcount will be further reduced over the first half of 2025.Plans.

Sales and marketing expenses consist primarily of personnel-related expenses such as salaries, severance, sales commissions, benefits, payroll taxes, and stock-based compensation. These expenses also include travel, fees of independent consultants, trade shows, marketing, costs associated with the operation of our sales offices and other indirect costs. We currently have a sales presence in many countries worldwide. In 2025, we began to strategically focus on our core markets and product lines to better align resources with markets and product lines that exhibit the strongest potential. As part of this strategic portfolio rationalization, we are concentrating our operations in key jurisdictions while discontinuing local activities in certain countries. We may either continue to reduce our presence in certain regions or expand our sales presence to additional regions or reduce, our presenceglobally, in certainthe regions, globally.future.

General and administrative expenses consist primarily of salaries, severance, employee benefitsbenefits, and stock-based compensation related to our executives, finance, human resources, information technology, and legal organizations, travel expenses, facilities costs, fees for professional services, and registration fees related to being a publicly-traded company. Professional services consist of audit and legal costs, remuneration to board members, insurance, information technologytechnology, and other costs. General and administrative expenses also include expenses related to certain legal claims and provision for expected credit losses in the event of uncollectible account receivables balances.

Other operating expenses, net, consist primarily of impairment and abandonment of long-lived assets, impairment of assets held for sale, loss from business disposition, as well as goodwill impairment assigned to our reporting units and tested for impairment at least on an annual basis and certain other nonrecurring items.

Interest expense consists of interest related to bank loans, advance payments received for performance obligations that extend for a period greater than one year, related to Accounting Standard Codification 606, “Revenue from Contracts with Customers” (ASC 606), interest related to Accounting Standard Codification 842, “Leases” (ASC 842), amortization of premium related to our investment in available for sale marketable securities, the amortization of debt issuance cost associated with our Notes due 2025 and 2029 as well as the contractual interest expenses from our Notes due 2029.

As of January 2019, our Israeli Subsidiary elected to implement the 2011 and 2017 Amendments starting as of tax year 2019 and as a result, under the PTE regime with respect to our business activities in Israel. Our PTE income was subject to a 12% tax rate in Israel in the years 2019-2021, and in 2022-2023 to a 6% tax rate as we surpassed 10 billion New Israeli Shekel revenues threshold. In 2024,2024 and 2025 the Company incurred losses for tax purposes.

Loss from equity method investments consists of our proportionate share of the net income or loss of equity method investments.

Revenues decreasedincreased by $2,075.1$283.0 million, or 69.7%,31.4%, in the year ended December 31, 2024,2025, as compared to the year ended December 31, 2023,2024, primarily due to (i) aan decreaseincrease of $1,713.9$261.1 million related to aan decreaseincrease in the number of inverters and power optimizers sold; (ii) aan decreaseincrease of $187.8$94.9 million related to the number of batteries for PV applications sold, mainly in Europe and the U.S; (iii) a decrease of $81.8$33.5 million in revenues due to the discontinuation of our Energy Storage Business; and (iv) a decrease of $30.4 million in the amount of ancillary solar products sold; and (iv) a decrease of $66.0 million in revenues generated from e-mobility components, related to the discontinuation of the Company’s LCV e-Mobility activity. The overall decrease in revenues was due to a decline in demand that began in the second part of the third quarter of 2023. This decline was the result of high inventory in the channels and slower than expected installation rates, leading to substantial unexpected cancellations and push outs of existing backlog, from our distributors.sold.

In addition to the other information set forth in this report, you should carefully consider the risks set forth below and the risk factors as described in Part I, Item 1A, “Risk Factors”, in our Annual Report on Form 10-K/A for the year ended December 31, 2025. 2025 (the “2025 Form 10-K/A”) and Part II, Item 1A, “Risk Factors,” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 (the “Q1 2026 Form 10-Q”). Other than the risk factors set forth below, there have been no material changes to the risk factors previously disclosed in the 2025 Form 10-K/A.A and Q1 2026 Form 10-Q.

In the second quarter of 2025, Israel and the Islamic Republic of Iran engaged in a 12‑day war, which subsequently stabilized due to a brokered ceasefire. More recently, during Marchthe andfirst Aprilhalf of 2026, Israel was again engaged in direct military conflictconflicts with Iran and in significant hostilities with Hezbollah in Lebanon. Although hostilities have since moderated, it is unknown whether any ceasefires or periods of relative calm will endure, or whether conflicts involving Gaza, Lebanon, Iran, Yemen, or other parts of the region may reemerge or escalate in the future.

Because our headquarters and a substantial portion of our workforce are based in Israel, these conflicts have impacted, and may continue to impact, the availability of our workforce. Some of our employees, executive officers, and directors residing in Israel are obligated to perform reserve duty in the Israeli military and are subject to being called to active duty under emergency circumstances. In the year ended December 31, 2025, approximately 279 employees, or 13% of our workforce in Israel, and in the firstsecond quarter of 2026, approximately 162179 employees, or 6.8%, 7%, were called to active reserve duty for varying periods, which adversely affected workforce availability. Additional employees may be called to reserve duty in the future.

While our offices and facilities worldwide, including in Israel, remain open and, to date, we have not experienced material disruptions to our ability to manufacture and deliver products and services to customers, any reemergence or escalation of conflicts in Israel or the surrounding region could materially adversely affect our business, financial condition, and results of operations Additionally, in 2023, the Israeli government announced plans to significantly reduce the Israeli Supreme Court's judicial oversight, including reducing its ability to strike down legislation that it deems unreasonable, and plans to increase political influence over the selection of judges. Although the Israeli Supreme Court partially struck down these plans, the current government has vowed to make other changes to law that limit the powers of the Supreme Court. If such government plans are eventually enacted, they may cause operational challenges for us since we are headquartered in Israel and many of our employees are located in Israel.operations.

We are a global smart energy technology company. We develop, manufacture and sell products that address a broad range of energy market segments through our diversified product offering, including residential, commercial and large scale photovoltaic or PV, energy storage and backup solutions, EV charging capabilities, home energy management, grid services and virtual power plants. By leveraging engineering capabilities and with focusing on innovation, safety and reliability, we create smart energy solutions that power our lives and drive future progress. We launched or ramped up sales of several new products in the second quarter of 2026. Most notably, after we successfully launched SolarEdge Nexis, our next-generation residential product portfolio, we continued the rollout of the platform in key markets. We also expanded our commercial energy storage business with the CSS-OD 107, a 107 kWh battery, featuring a 29.9 kW or 49.9 kW battery inverter output, scalable up to 2.1MW hour size sites and the CSS-OD 197, a 197 kWh battery, featuring a 50 kW or 100 kW battery inverter output, scalable up to 4MW hour size sites. Both solutions are suitable for outdoor or indoor installations.

In the firstsecond quarter of 2026, we continued to strategically focus on our core markets and product lines to better align resources with markets and product lines that exhibit the strongest potential. As part of this strategic portfolio rationalization, we are concentrating our operations in key jurisdictions while discontinuing local activities in certain countries. Accordingly, we operate as one operating segment that constitutes consolidated results.

Our revenues for the three months ended MarchJune 31,30, 2026 and March 31, 2025 were $310.5$346.2 million and $219.5$289.4 million, respectively. Gross profit as a percentage of revenue was 22.0%, for the three months ended MarchJune 31,30, 2026, comparedand to2025 8.0%,was for27.5% theand three11.1%, months ended March 31, 2025.respectively. Net loss for the three months ended MarchJune 31,30, 2026, and March 31, 2025 was $57.4$30.8 million and $98.5$124.7 million, respectively.

A prolonged softness in demand in the global market for PV products has continued to adversely impact the solar industry. Additionally, uncertainty related to changes in tariffs, trade restrictions and policies, legislation, and guidance including from H.R.1, may contribute to growing market volatility and adversely impact customer demand for our products, pricing and our financial performance. Despite a prolonged softness in demand, in the first half of 2026, we have seen an increase in salessales, duemainly toof moreour normalizedC&I channel inventory.products. Additionally, in the attachmentsecond ratequarter of batteries within solar installations is rising globally, which2026, we believehave has ledseen an increase in demand for our batteries. We expect the softness in demand for PV products to continue in the third quarter and there can be no assurance that our sales will continue to increase or will not decrease.

In August 2022, the U.S. government enacted the IRA, which contains several provisions intended to accelerate U.S. manufacturing and adoption of clean energy such as solar, wind, hydrogen and electric vehicles and therefore had positive impacts on our business and operations along with the overall U.S. solar market. Some of the applicable provisions in the IRA that are positively impactingimpact the market for renewable energy include the extension ofSection 48E, the tech-neutral investment tax credit ITC,("ITC"), and 45Y, the tech-neutralproduction PTC.tax credit ("PTC"). The IRA includes incentives for residential and commercial solar customers and developers through the inclusion of ITCs for qualifying energy projects of up to 30% with a potential to gain further bonus credits such as through the utilization of Domestic Content. Section 45X of the IRA offers advanced manufacturing production credits (“AMPTCs”), that incentivize the production of eligible components within the United States. In light of such incentives, we established manufacturing capabilities in the United States starting in 2023 and further expanded such capabilities in 20242024, 2025 and 2025.2026. On October 24, 2024, the U.S. Internal Revenue Service (the “IRS”) and the U.S. Department of the Treasury (the “Treasury”) issued a Notice of Proposed Rule followed by a Final Rule that became effective on December 27, 2024, concerning the application of Section 45X which contain details concerning eligibility, qualifying and accounting for AMPTCs for components produced and sold after December 31, 2022. Of particular relevance to the Company are the tax credits that we generate as a result of rules concerning the qualification and measurement of AMPTCs to Residential Inverters, Commercial Inverters and DC-Optimized Inverter Systems that we manufacture in the United States. In 2024 and 2025, and continuing into 2026, we sold a significant part of the AMPTCs that we generated from our U.S. production of eligible components.

H.R.1 accelerates the phase-out timeline for certain credits, eliminates the 25D individual homeowner credit, and imposes new eligibility criteria. Among other changes, H.R.1 shortens the term of the investment tax credit ("ITC") and production tax credit ("PTC") under Sections 48E and 45Y of the Code, used by customers of SolarEdge who are engaged in third-party ownership (“TPO”) models, such as residential solar leases and power purchase agreements, and commercial solar customers and developers, shortening the end date from 2034 to 2027. However, H.R.1 also includesincluded a 12-month period in which such customers canwho beginbegan construction givingwere themgiven four years to complete their projects through the end of 2030. Projects begun after twelve months from enactment (July 4, 2026) of H.R.1 must be placed in service by December 31, 2027, to receive the credit. H.R.1 eliminated the individual residential tax credit under Section 25D of the Code at the end of 2025. These changes may negatively impact the eligibility of our customers and individuals to obtain tax credits, which may negatively affect the overall demand for our products.

Due to the war in Gaza that began on October 7, 2023, followed by additional military conflicts with Iran and Hezbollah in Lebanon during 2024, 2025 and the first quarterhalf of 2026, some of our employees in Israel were called to active reserve duty and additional employees may be called in the future, if needed. In the three months ended MarchJune 31,30, 2026, approximately 6.8%7% of our employees in Israel were called to active reserve duty for varying periods. Despite the ceasefire framework agreed between Israel, Hamas, the United States and other countries in the region and the moderation of the hostilities involving Israel, Iran, Yemen and Lebanon, it is unknown whether any ceasefires or periods of relative calm will endure, or if other conflicts in Gaza, Lebanon, Yemen, Iran, or in the broader region will reemerge or escalate in the future.

1 Metrics may not match those disclosed in the 10-Q for MarchJune 31,30, 2025 due to change in performance measures since that time.

Revenues increased by $91.0$56.8 million, or 41.5%,19.6%, in the three months ended MarchJune 31,30, 20262026, compared to the three months ended MarchJune 31, 30, 2025, primarily due to (i) an increase of $35.9$63.0 million related to ana increase in the number of power optimizers sold; an increase of $53.0 million related to an increase in thehigher number of batteries and battery accessories sold; and (ii) an increase of $19.3$4.9 million relatedin to more ancillary solarcommunication products sold; these were partially offset by (i) a decrease of $7.8$13.9 million in revenuethe fromnumber of inverters and optimizers sold; and (ii) a decrease of $7.0$8.1 million in revenues due to the discontinuation of our Energy Storage Business.

Revenues from outside of the U.S. comprised 49.1%55.3% of our revenues in the three months ended MarchJune 31,30, 2026,2026 compared to 39.8%36.0% in the three months ended MarchJune 31,30, 2025.

The number of power optimizers recognized as revenues increaseddecreased by approximately 0.30.1 million units, or 15.4%,5.9%, from approximately 2.1 million units in the three months ended March 31, 2025 to approximately 2.42.6 million units in the three months ended MarchJune 31,30, 2025 to approximately 2.5 million units in the three months ended June 30, 2026. The number of inverters recognized as revenues decreased by approximately 21.423.6 thousand units, or 29.8%,27.4%, from approximately 72.0 thousand units in the three months ended March 31, 2025 to approximately 50.586.2 thousand units in the three months ended MarchJune 31, 30, 2025 to approximately 62.6 thousand units in the three months ended June 30, 2026. The megawatt hours of batteries recognized as revenues increased by approximately 154217.0 megawatt hours, or 86.8%103.8%, from approximately 177 209.0 in the three months ended MarchJune 31,30, 2025 to approximately 331426.0 megawatt hours in the three months ended MarchJune 31,30, 2026 as a result of increase in demand.2026.

Cost of revenues increaseddecreased by $40.3$6.2 million, or 19.9%,2.4%, in the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31, 30, 2025, primarily due to: ana increasedecrease in the direct cost of revenues sold of $60.4$34.2 million associated primarilymainly with an increase in the volumeAMPTC ofand productsIEEPA sold, offset by an increase in AMPTCrefunds recognized; excluding such AMPTC incentives would have caused us to transition into a gross loss, for both periods presented.

Gross profit as a percentage of revenue was 27.5% in the three months ended MarchJune 31,30, 2026 was 22.0%,2026, compared to 8.0%,11.1%, in the three months ended March 31,June 30, 2025, primarily due to:

Research and development, net costs decreased by $11.8$0.6 millionmillion, or 19.1%,1.2%, in the three months ended MarchJune 31,30, 20262026, compared to the three months ended MarchJune 31,30, 2025, primarily due to:

This wasThese were partially offset by:

Sales and marketing expenses decreased by $4.2$1.5 million, or 13.3%,5.1%, in the three months ended MarchJune 31,30, 20262026, compared to the three months ended MarchJune 31,30, 2025, primarily due to: a decrease of $1.5 million in marketing expenses.

General and administrative expenses have increased by $6.2$4.8 million, or 20.7%,24.0%, in the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025, primarily due to a net provision for doubtful debt in the amount of $13.4 million in the three months ended March 31, 2026 compared to a net reversal of $8.1 million in the three months ended March 31, 2025 mainly related to collection of doubtful debt.:

Other operating expense,expenses, net, wasdecreased $9.3by $39.1 million in the three months ended MarchJune 31,30, 20262026, compared to other operating income, net, of $3.6 million in the three months ended MarchJune 31,30, 20252025, primarily due to:

Financial expense, net,net wasincreased $1.0by $5.1 million in the three months ended MarchJune 31,30, 2026, compared to financial income, net, in the amount of $10.1 million in the three months ended MarchJune 31,30, 2025, primarily due to: