SolarEdge Technologies (NASDAQ:SEDG) shares fell about 24% on Wednesday after the solar technology company issued a weaker-than-expected third quarter outlook, overshadowing better-than-expected second quarter results.
The company guided for Q3 2026 revenue of $310 million to $340 million, with a midpoint of $325 million, below analyst expectations of roughly $368 million to $372 million. The lighter forecast reflected ongoing uncertainty in residential solar demand, particularly in the US, and weighed on investor sentiment.
SolarEdge reported second quarter revenue of $346.2 million, ahead of Wall Street expectations of about $342 million and up 19.6% from $289.4 million a year earlier.
Adjusted earnings per share came in at $0.05 to $0.06, compared with analyst expectations for approximately break-even results.
The company reported continued improvement in profitability during the quarter, with non-GAAP gross margin expanding to 28.6% from 13.1% in the year-ago period. Non-GAAP operating income reached $10.2 million, compared with an operating loss of $48.3 million in Q2 2025, while non-GAAP net income was $3.6 million versus a loss of $47.7 million a year earlier.
On a GAAP basis, SolarEdge posted a net loss of $30.8 million, or $0.50 per diluted share, narrowing from a net loss of $124.7 million, or $2.13 per share, in the prior-year quarter.
“Our second-quarter results mark an important milestone in SolarEdge’s turnaround,” the company’s CEO Shuki Nir said in a statement.
“Revenue grew 20% year over year, GAAP operating loss narrowed significantly, and we returned to non-GAAP operating profitability for the first time since the second quarter of 2023, while continuing to generate positive free cash flow.”
Nir highlighted stronger demand in Europe and growth in US commercial and industrial markets, which helped offset industry-wide weakness in US residential solar.
SolarEdge ended the quarter with $264.6 million in cash and investments, net of debt, compared with $244.2 million at the end of 2025. Free cash flow was $3.1 million in the quarter, compared with negative free cash flow of $9.1 million in the second quarter of 2025.