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ANNUAL REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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(State
or other jurisdiction of
incorporation
or organization) |
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(IRS
Employer
Identification
No.) |
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(Address
of Principal Executive Offices) |
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(Zip
Code) |
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Title
of each class |
Trading
Symbol(s) |
Name
of each exchange on which registered |
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☒
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☐
Accelerated filer |
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☐
Non-accelerated filer |
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1 | ||
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17 | ||
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37 | ||
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| 38 | ||
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Item 6. |
Reserved |
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F - 1 |
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65 |
| • |
future demand for renewable energy including solar energy solutions; |
| • |
changes to net metering policies or the reduction, elimination or expiration of government subsidies and economic incentives for
on-grid solar energy applications; |
| • |
changes in the U.S. trade environment, including the recent imposition of import tariffs; |
| • |
federal, state, and local regulations governing the electric utility industry with respect to solar energy; |
| • |
changes in tax laws, tax treaties, and regulations or the interpretation of them, including the Inflation Reduction Act; |
| • |
the retail price of electricity derived from the utility grid or alternative energy sources; |
| • |
interest rates and supply of capital in the global financial markets in general and in the solar market specifically; |
| • |
competition, including introductions of power optimizer, inverter and solar photovoltaic (“PV”) system monitoring products
by our competitors; |
| • |
developments in alternative technologies or improvements in distributed solar energy generation; |
| • |
historic cyclicality of the solar industry and periodic downturns; |
| • |
product quality or performance problems in our products; |
| • |
our ability to forecast demand for our products accurately and to match production with demand; |
| • |
our dependence on ocean transportation to timely deliver our products in a cost-effective manner; |
| • |
our dependence upon a small number of outside contract manufacturers and limited or single source suppliers; |
| • |
capacity constraints, delivery schedules, manufacturing yields, and costs of our contract manufacturers and availability of components;
|
| • |
delays, disruptions, and quality control problems in manufacturing; |
| • |
shortages, delays, price changes, or cessation of operations or production affecting our suppliers of key components; |
| • |
existing and future responses to and effects of Covid-19; |
| • |
business practices and regulatory compliance of our raw material suppliers; |
| • |
performance of distributors and large installers in selling our products; |
| • |
our customers’ financial stability, creditworthiness and debt leverage ratio; |
| • |
our ability to retain key personnel and attract additional qualified personnel; |
| • |
our ability to effectively design, launch, market, and sell new generations of our products and services; |
| • |
our ability to maintain our brand and to protect and defend our intellectual property; |
| • |
our ability to retain, and events affecting, our major customers; |
| • |
our ability to manage effectively the growth of our organization and expansion into new
markets; |
| • |
our ability to integrate acquired businesses; |
| • |
fluctuations in global currency exchange rates; |
| • |
unrest, terrorism, or armed conflict in Israel; |
| • |
macroeconomic conditions in our domestic and international markets, as well as inflation concerns, rising interest rates and recessionary
concerns; |
| • |
consolidation in the solar industry among our customers and distributors; |
| • |
our ability to service our debt; and |
| • |
the other factors set forth under “Item 1A. Risk Factors.” |
| • |
Maximized
PV module power output. Our Power Optimizers provide module-level
Maximum Power Point Tracking or MPPT, and real-time adjustments of current and voltage to the optimal performance level of each individual
PV module. This enables each PV module to continuously produce its maximum power potential independent of other modules in the same string,
minimizing module mismatch and partial shading losses. By performing these adjustments at a very high rate, our Power Optimizers also
solve the dynamic power losses associated with traditional inverters. |
| • |
Optimized
architecture with economies of scale. Our system shifts certain functions
of the traditional inverter to our Power Optimizers while keeping the DC to AC function and grid interaction in our inverter. As a result,
our inverter is smaller, more efficient, more reliable and less expensive than inverters used in traditional PV systems. The cost savings
that we have achieved on the inverter enable our system to be priced at a cost per watt that is comparable with traditional inverter systems
of other leading manufacturers. As a PV system grows in size, our inverter benefits from economies of scale, making our technology viable
for large commercial and utility-scale applications. |
| • |
Enhanced
system design flexibility. Unlike a traditional inverter system that
requires each string to be the same length, use the same type of PV modules and be positioned at the same angle toward the sun, our system
allows significant design flexibility by enabling the installer to place PV modules in uneven string lengths and on multiple roof facets.
This design flexibility: |
| • |
Increases the amount of the available roof that can be utilized for power production. As a result, our system is significantly less
prone to wasted roof space resulting from rooftop asymmetries and obstructions. |
| • |
Reduces the number of field change orders. For example, some installers use remote tools to estimate the size and configuration of
an installation in connection with the customer acquisition process. This is especially common for high-volume residential arrays, where
an exhaustive survey of rooftop obstructions would be uneconomical. In some cases, installers discover that their preliminary design,
based on remote tools, cannot be implemented due to unexpected shading or other obstructions. With traditional inverter system designs,
an obstructed module may require a significant system redesign and a modification of the customer contract to accommodate the changed
system design. Our DC optimized inverter solution enables an installer to compensate or adjust for most obstructions without materially
changing the original design or requiring a modification to the customer contract. |
| • |
Reduced
balance of system costs. Our DC optimized inverter system allows significantly
longer strings to be connected to the same inverter (as compared to a traditional inverter system). This minimizes the cost of cabling,
fuse boxes and other ancillary electric components. These factors result in easier installations with shorter design times and a lower
initial cost per watt, while enabling larger installations per rooftop. |
| • |
Continuous
monitoring and control to reduce operation and maintenance costs. Our
cloud-based monitoring platform provides full data visibility at the module, string, inverter and system level. The data can be accessed
remotely by any web-enabled device, allowing comprehensive analysis, immediate fault detection and alerts. These monitoring features reduce
O&M costs for the system owner by identifying and locating faults, enabling remote testing and reducing field visits.
|
| • |
Enhanced
safety. We have incorporated module-level safety mechanisms in our
system to protect installers, electricians and firefighters. Each Power Optimizer is configured to reduce output to 1 volt unless the
Power Optimizer receives a fail-safe signal from a functioning inverter. As a result, if the inverter is shut down (e.g., for system
maintenance, due to malfunction, in the event of a fire or otherwise), the DC voltage throughout the system is reduced to a safe level.
Our DC optimized inverters comply with the applicable safety requirements of the regions in which they are sold, providing incremental
cost savings to installers by eliminating the need for additional hardware such as DC breakers, switches or fire-proof ducts required
by traditional inverter systems. In the U.S., the SolarEdge SafeDC feature is compliant with NEC 2014 & NEC 2017 Rapid Shutdown functionality,
section 690.12. SolarEdge inverters also have a built-in safety feature designed to mitigate the effects of some arcing faults that may
pose a risk of fire, in compliance with the UL1699B arc detection standard. |
| • |
High
reliability. Solar PV systems are typically expected to operate for
at least 25 years under harsh outdoor conditions. High reliability is critical and is facilitated by systems and components that
have low heat generation, solid and stable materials, and an absence of moving parts. We have designed our system to meet these stringent
requirements. Our Power Optimizers dissipate much less heat than microinverters because no DC-AC
inversion occurs at the module level. As a result, less heat is dissipated beneath the PV module, which improves lifetime expectancy and
the reliability of our power optimizers. Our Power Optimizers’ high switching frequency allows the use of ceramic capacitors with
a low, fixed rate of aging and a proven life expectancy in excess of 25 years. Furthermore, we use automotive-grade, application-specific
integrated circuits (“ASICs”) that embed many of the required electronics. This reduces the number of components and consequently
the potential points of failure. |
| • |
Energy
Storage. Our DC optimized inverter system allows solar energy to be directly
stored in batteries without any conversion, thereby eliminating energy losses that are associated with such conversions and improving
the ROI of PV battery systems. |
| • |
Energy
Management. Strategically located at the intersection between PV modules,
home usage, and the grid, inverters are well positioned to act as smart energy managers. Our smart inverters incorporate the management
of PV energy, battery storage, smart devices, and grid interaction. By leveraging the smart energy management in our inverter, system
owners can not only store solar energy but also optimize their PV energy consumption in order to increase their energy independence, take
advantage of lower time-of-use rates, reduce electricity bills, and improve overall system ROI. |
| • |
Distributed
Energy Generation. As the electric grid transitions
from centralized power stations to a network of distributed, renewable energy sources, our inverter acts as a local control system that
can manage the energy resources underlying such a distributed network. Our inverters are therefore a key part of developing a distributed
and interactive grid that can help support grid stability. One such example is inverter-enabled charging and discharging of batteries
as part of a virtual power plant to help manage the load on the grid and support grid stability. |
| • |
product and system performance and features; |
| • |
total cost of ownership; |
| • |
reliability and duration of product warranty; |
| • |
customer service and support; |
| • |
breadth of product line; |
| • |
local sales and distribution capabilities; |
| • |
compliance with applicable certifications and grid codes; |
| • |
size and financial stability of operations; and |
| • |
size of installed base. |
| • |
Powering Clean Energy: Accelerating the uptake
of clean energy, delivering new smart energy, innovative solutions and improving the lifecycle impacts of our products. As a business
founded upon the acceleration of clean energy, we strive to reduce our climate impact by minimizing GHG (greenhouse gas) emissions and
transitioning to renewable electricity usage in our facilities. We have completed a lifecycle analysis for three of our key products,
examining the carbon footprint of all product life stages and following the examination of the results of such analysis were able to highlight
possible reduction opportunities. Furthermore, we have set a target of reducing 30% of our Scope 1+2 GHG emissions per revenue, by
2025 (compared with the 2020 basis). We have set another target of achieving near-zero e-waste to landfill by 2025. In
2021, a total of 71% of all waste at our owned and operated sites, was either recycled or recovered to energy. |
| • |
Powering
People: Maintaining leading responsible employment
practices, upholding human rights and investing in communities. In 2022, we continued to expand our workforce to support SolarEdge’s
business growth, and maintained responsible employment practices, including an enhanced focus on safety and on employee growth and development.
We set quantitative targets and formulated multi-year programs to enhance gender equality within our workforce and to strengthen its inclusiveness
(see further details in "Human Capital" below). Also in 2022, we enhanced
our community engagement program. Our updated program focuses on the advancement of renewable energy for environmental community value,
encouraging STEM education and youth innovation and strengthening diverse populations. |
| • |
Powering
Business: Maintaining and reinforcing ethical conduct
throughout our value chain, advancing climate resilience, improving the efficiency of our resource consumption and ethical sourcing of
raw materials and components. |
| • |
Our ability to maintain our current level of profitability. |
| • |
The rapidly evolving and competitive nature of the solar industry. |
| • |
Demand for solar energy solutions. |
| • |
The dependence of our e-Mobility business on orders from a leading automotive manufacturer. |
| • |
The impact of declines in the retail price of electricity derived from the utility grid or from alternative
energy sources. |
| • |
The impact of increases in interest rates or tightening of the supply of capital on the ability of end-users
to finance the cost of a solar PV system. |
| • |
The impact of increased competition as new and existing competitors introduce power optimizers, inverters,
solar PV system monitoring and other smart energy products. |
| • |
Developments in alternative technologies or improvements in distributed solar energy generation.
|
| • |
The cyclicality of the solar industry. |
| • |
Defects or performance problems in our products. |
| • |
Our dependence on a small number of outside contract manufacturers. |
| • |
Any delays, disruptions, or quality control problems in our manufacturing operations. |
| • |
Our dependence on a limited number of suppliers for key components and raw materials in our products to
adequately meet anticipated demand. |
| • |
Disruptions to our global supply chain and rising prices of oil and raw materials due to the conflict between
Russia and Ukraine. |
| • |
Our reliance on distributors and large installers to assist in selling our products. |
| • |
Mergers in the solar industry among our current or potential customers. |
| • |
Our planned expansion into new geographic markets or new product lines or services. |
| • |
Our ability to build our non-solar businesses and manage future growth effectively. |
| • |
Our ability to raise the funds necessary to settle conversion of our Convertible Senior Notes or Notes
in cash or to repurchase the Notes upon a fundamental change. |
| • |
Any unauthorized access to, disclosure, or theft of personal information we gather, store, or use.
|
| • |
Attempts by third parties, our employees, or our vendors mighty to gain unauthorized access to our network
or seek to compromise our products and services. |
| • |
Our entry into business engagements with military bodies as our customers. |
| • |
Our ability to successfully execute future acquisitions or be effective in integrating such acquisitions.
|
| • |
Any damage or injury caused by Lithium-Ion used in our battery cells and packs. |
| • |
Conditions in Israel that may affect our operations. |
| • |
Difficulties in enforcing a judgment of a U.S. court against our officers and directors, to assert U.S.
securities laws claims in Israel, or to serve process on our officers and directors. |
| • |
The ongoing Covid-19 pandemic. |
| • |
Our dependence on ocean transportation to deliver our products in a timely and cost efficient manner.
|
| • |
Fluctuations in currency exchange rates. |
| • |
Issues related to corporate social responsibility. |
| • |
Complications with the design or implementation of our new ERP system could adversely impact our business.
|
| • |
Any reduction, elimination or expiration of government subsidies and economic incentives for on-grid solar
electricity. |
| • |
Any unfavorable regulatory treatment, or guidance related to the Inflation Reduction Act of 2022.
|
| • |
Changes to net metering policies. |
| • |
Technical and economic barriers to the purchase and use of solar PV systems resulting from current or future
regulations. |
| • |
Our ability to protect our intellectual property and other proprietary rights. |
| • |
Any claims by third parties that we are infringing upon their intellectual property rights. |
| • |
Any claims for remuneration or royalties for assigned service invention rights by our employees. |
| • |
The impairment
of our goodwill or other intangible assets. |
| • |
Volatility of our stock price. |
| • |
Provisions in our certificate of incorporation and by-laws that may have the effect of delaying or preventing a change of control
or changes in our management. |
| • |
The forum selection clause contained in our certificate of incorporation. |
| • |
Our lack of plans to pay any cash dividends on our common stock in the foreseeable future. |
| • |
cost competitiveness, reliability and performance of solar PV systems compared to conventional and non-solar renewable energy sources
and products; |
| • |
competing new technologies at more competitive prices than those we offer for our products; |
| • |
availability and amount of government subsidies and incentives to support the development and deployment of solar energy solutions;
|
| • |
the extent of deregulation in the electric power industry and broader energy industries to permit broader adoption of solar electricity
generation; |
| • |
prices of traditional carbon-based energy sources; |
| • |
levels of investment by end-users of solar energy products, which tend to decrease when economic growth slows; and |
| • |
the emergence, continuance or success of, or increased government support for, other alternative energy generation technologies and
products. |
| • |
construction of a significant number of new power generation plants, including plants utilizing natural gas, nuclear, coal, renewable
energy, or other generation technologies; |
| • |
relief of transmission constraints that enable local centers to generate energy less expensively; |
| • |
reductions in the price of natural gas, or alternative energy resources other than solar; |
| • |
utility rate adjustment and customer class cost reallocation; |
| • |
energy conservation technologies and public initiatives to reduce electricity consumption; |
| • |
development of smart-grid technologies that lower the peak energy requirements of a utility generation facility; |
| • |
development of new or lower-cost energy storage technologies that have the ability to reduce a customer’s average cost of electricity
by shifting load to off-peak times; and |
| • |
development of new energy generation technologies that provide less expensive energy. |
| • |
the addition or loss of significant customers; |
| • |
changes in laws or regulations applicable to our industry, products or services; |
| • |
speculation about our business in the press or the investment community; |
| • |
price and volume fluctuations including due to general macro-economic and geopolitical changes and developments in the overall stock
market; |
| • |
volatility in the market price and trading volume of companies in our industry or companies that investors consider comparable;
|
| • |
share price and volume fluctuations attributable to inconsistent trading levels of our shares; |
| • |
our ability to protect our intellectual property and other proprietary rights; |
| • |
sales of our common stock by us or our significant stockholders, officers and directors; |
| • |
the
expiration of contractual lock-up agreements; |
| • |
success of competitive products or services; |
| • |
the public’s response to press releases or other public announcements by us or others, including our filings with the Securities
and Exchange Commission (the “SEC”), announcements relating to litigation or significant changes to our key personnel;
|
| • |
the effectiveness of our internal controls over financial reporting; |
| • |
changes in our capital structure, such as future issuances of debt or equity securities; |
| • |
our entry into new markets; |
| • |
tax
developments in the U.S., Europe, or other markets; |
| • |
conversion of all or portion of the Notes; |
| • |
strategic actions by us or our competitors, such as acquisitions or restructurings; and |
| • |
changes in accounting principles. |
| • |
authorizing “blank check” preferred stock that our board of directors could issue to increase the number of outstanding
shares to discourage a takeover attempt; |
| • |
providing for a classified board of directors with staggered, three-year terms, which could delay the ability of stockholders to
change the membership of a majority of our board of directors; |
| • |
not providing for cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director
candidates; |
| • |
limiting the ability of stockholders to call a special stockholder meeting; |
| • |
prohibiting stockholders from acting by written consent; |
| • |
establishing advance notice requirements for nominations for election to our board of directors or for proposing matters that can
be acted upon by stockholders at stockholder meetings; |
| • |
the removal of directors only for cause and only upon the affirmative vote of the holders of at least 662/3%
in voting power of all the then-outstanding shares of common stock of the Company entitled to vote thereon, voting together as a single
class; |
| • |
providing that our board of directors is expressly authorized to amend, alter, rescind or repeal our by-laws; and |
| • |
requiring the affirmative vote of holders of at least 662/3%
of the voting power of all of the then outstanding shares of common stock, voting as a single class, to amend provisions of our certificate
of incorporation relating to the management of our business, our board of directors, stockholder action by written consent, advance notification
of stockholder nominations and proposals, calling special meetings of stockholders, forum selection and the liability of our directors,
or to amend, alter, rescind, or repeal our by-laws. |

|
Year ended December 31, |
||||||||
|
2022 |
2021 |
|||||||
|
Inverters shipped |
1,019,307 |
789,565 |
||||||
|
Power optimizers shipped |
23,736,368 |
18,568,297 |
||||||
|
Megawatts shipped1
|
10,491 |
7,159 |
||||||
|
Megawatts hour shipped - residential batteries |
889 |
53 |
||||||
|
Year ended December 31, |
2021
to 2022 |
|||||||||||||||
|
2022 |
2021 |
Change |
||||||||||||||
|
(In thousands) |
||||||||||||||||
|
Revenues |
$ |
3,110,279 |
$ |
1,963,865 |
$ |
1,146,414 |
$ |
58.4 |
%
| |||||||
|
Cost of revenues |
2,265,631 |
1,334,547 |
931,084 |
69.8 |
%
| |||||||||||
|
Gross profit |
844,648 |
629,318 |
215,330 |
34.2 |
%
| |||||||||||
|
Operating expenses: |
||||||||||||||||
|
Research and development |
289,814 |
219,633 |
70,181 |
32.0 |
%
| |||||||||||
|
Sales and marketing |
159,680 |
119,000 |
40,680 |
34.2 |
%
| |||||||||||
|
General and administrative |
112,496 |
82,196 |
30,300 |
36.9 |
%
| |||||||||||
|
Goodwill impairment and other operating expenses, net |
116,538 |
1,350 |
115,188 |
8,532.4 |
% | |||||||||||
|
Total
operating expenses |
678,528 |
422,179 |
256,349 |
60.7 |
%
| |||||||||||
|
Operating income |
166,120 |
207,139 |
(41,019 |
) |
(19.8 |
)%
| ||||||||||
|
Financial income (expense), net |
3,316 |
(19,915 |
) |
23,231 |
(116.7 |
)% | ||||||||||
|
Other income |
7,719 |
— |
7,719 |
100.0 |
%
| |||||||||||
|
Income before income taxes |
177,155 |
187,224 |
(10,069 |
) |
(5.4 |
)%
| ||||||||||
|
Income taxes |
83,376 |
18,054 |
65,322 |
361.8 |
%
| |||||||||||
|
Net income |
$ |
93,779 |
$ |
169,170 |
$ |
(75,391 |
) |
$ |
(44.6 |
)%
| ||||||
|
Year ended December 31, |
2021 to 2022 |
|||||||||||||||
|
2022 |
2021 |
Change |
||||||||||||||
|
(In thousands) |
||||||||||||||||
|
Revenues
|
$ |
3,110,279 |
$ |
1,963,865 |
$ |
1,146,414 |
58.4 |
%
| ||||||||
|
Year ended December 31, |
2021 to 2022 |
|||||||||||||||
|
2022 |
2021 |
Change |
||||||||||||||
|
(In thousands) |
||||||||||||||||
|
Cost
of revenues
|
$ |
2,265,631 |
$ |
1,334,547 |
$ |
931,084 |
69.8 |
%
| ||||||||
|
Gross
profit
|
$ |
844,648 |
$ |
629,318 |
$ |
215,330 |
34.2 |
%
| ||||||||
| • |
an increase in the volume of products sold and the increase in the cost of components used in the manufacturing of our products;
|
| • |
a significant increase in shipment and logistic costs in an aggregate amount of $124.0 million due to
(i) an increase in volume shipped; (ii) an increase in air and expedited shipments; and (iii) an increase in the shipment rates throughout
2022 that was partially offset by a decrease in shipment rates which began in the fourth quarter of 2022; |
| • |
an increase
in other production costs of $89.0 million, which is mainly attributed to charges from our contract manufacturers, due to manufacturing
disruptions related to global supply constraints, increased logistics costs resulting from transportation disruptions, mobilization of
components between our different manufacturing sites in order to allow for continuous manufacturing, as well as ramp up costs associated
with our new contract manufacturing site in Mexico and Sella 2, our Li-Ion battery cell manufacturing facility located in South Korea;
|
| • |
an increase
in warranty expenses and warranty accruals of $88.6
million. associated primarily with an increased number of products in our install base,
as well as an increase in costs related to the different elements of our warranty expenses, which include the cost of the products, shipment
and other related expenses; |
| • |
an increase
in personnel-related costs of $22.4 million,
related to the expansion of our production, operations, and support headcount, which grew in parallel to our growing install base worldwide,
our new contract manufacturing site in Mexico and the completion of our lithium-ion cell and battery factory in Korea, known as "Sella
2"; and |
| • |
an increase in customs duties of $17.2 million attributed to
the increase in volumes of products manufactured in China for the U.S. market. |
|
Year ended December 31, |
2021 to 2022 |
|||||||||||||||
|
2022 |
2021 |
Change |
||||||||||||||
|
(In thousands) |
||||||||||||||||
|
Research and development |
$ |
289,814 |
$ |
219,633 |
$ |
70,181 |
32.0 |
%
| ||||||||
| • |
an increase
in personnel-related costs of $53.0 million resulting from an increase in our research and development
headcount, as well as salary expenses associated with annual merit increases and employee stock-based
compensation. The increase in headcount reflects our continuing investment in enhancements of existing products, as well as research and
development expenses associated with bringing new products to the market; |
| • |
an increase
in expenses related to overhead costs in the amount of $6.6 million; |
| • |
an increase
in depreciation expenses of property and equipment in the amount of $4.2 million;
|
| • |
a decrease in
reimbursement of costs, in the amount of $4.2 million, related to the research and development
activities performed by SolarEdge e-Mobility; and |
| • |
an increase
in expenses related to material consumption in the manufacturing of prototypes during our development process in the amount of $2.4
million. |
|
Year ended December 31, |
2021 to 2022 |
|||||||||||||||
|
2022 |
2021 |
Change |
||||||||||||||
|
(In thousands) |
||||||||||||||||
|
Sales and marketing |
$ |
159,680 |
$ |
119,000 |
$ |
40,680 |
34.2 |
%
| ||||||||
| • |
an increase in personnel-related costs of $28.6 million, as a result of an increase in headcount supporting
our growth in all geographies, as well as salary expenses associated with annual merit increases and employee stock-based compensation;
|
| • |
an increase in expenses related to marketing activities of $4.8 million; and |
| • |
an increase in expenses related to travel in the amount of $2.7 million. |
|
Year ended December 31, |
2021 to 2022 |
|||||||||||||||
|
2022 |
2021 |
Change |
||||||||||||||
|
(In thousands) |
||||||||||||||||
|
General and administrative
|
$ |
112,496 |
$ |
82,196 |
$ |
30,300 |
36.9 |
%
| ||||||||
| • |
an increase in personnel-related costs of $22.7 million resulting from an increase in our general and
administrative headcount, as well as salary expenses associated with annual merit increases and employee stock-based compensation;
|
| • |
an increase
in expenses related to consultants and sub-contractors in the amount of $7.3 million; and |
| • |
an increase
in expenses related to overhead costs in the amount of $2.4 million. |
|
Year ended December 31, |
2021 to 2022 |
|||||||||||||||
|
2022 |
2021 |
Change |
||||||||||||||
|
(In thousands) |
||||||||||||||||
|
Goodwill impairment and other operating
expenses, net |
$ |
116,538 |
$ |
1,350 |
$ |
115,188 |
8,532.4 |
% | ||||||||
| • |
an increase in the amount of $90.1 million attributed to a goodwill impairment charge related
to three reporting units: e-Mobility, Automation Machines and Critical Power ; and |
| • |
an increase
of $28.4 million attributed to the impairment of intangible assets,
mainly related to the technology of the e-Mobility asset group, as well as the impairment of the related
intangible assets of the Critical Power asset group, due to the discontinuation of its activities.
|
|
Year ended December 31, |
2021 to 2022 |
|||||||||||||||
|
2022 |
2021 |
Change |
||||||||||||||
|
(In thousands) |
||||||||||||||||
|
Financial income (expense), net
|
$ |
3,316 |
$ |
(19,915 |
) |
$ |
23,231 |
(116.7 |
)% | |||||||
| • |
a decrease of $20.9 million in financial expenses resulted from foreign exchange fluctuations, mainly
between each of the Euro, the New Israeli Shekel and the South Korean Won against the U.S. dollar; and |
| • |
an increase of $7.6 million in interest income and accretion (amortization) of discount (premium) on
marketable securities. |
|
Year ended December 31, |
2021 to 2022 |
|||||||||||||||
|
2022 |
2021 |
Change |
||||||||||||||
|
(In thousands) |
||||||||||||||||
|
Other income |
$ |
7,719 |
$ |
— |
$ |
7,719 |
100.0 |
%
| ||||||||
|
Year ended December 31, |
2021 to 2022 |
|||||||||||||||
|
2022 |
2021 |
Change |
||||||||||||||
|
(In thousands) |
||||||||||||||||
|
Income taxes |
$ |
83,376 |
$ |
18,054 |
$ |
65,322 |
361.8 |
%
| ||||||||
| • |
an increase of $51.4 million of current tax expenses mainly
attributed to the change to Section 174 of the U.S Internal Revenue Code, as well as impairment of goodwill and intangible assets, higher
non-deductible expenses and lower tax benefits relating to stock-based compensation. The change to Section 174, which became effective
on January 1, 2022, eliminates the option to deduct research and development expenditures as expensed and requires taxpayers to amortize
them over five years (if generated from a U.S. entity) and fifteen years (if generated from non-U.S. entities). |
| • |
an increase of $13.3 million in prior years taxes income; and |
| • |
a decrease of $0.6 million in deferred tax income. |
|
Year ended December 31, |
2021 to 2022 |
|||||||||||||||
|
2022 |
2021 |
Change |
||||||||||||||
|
(In thousands) |
||||||||||||||||
|
Net
income |
$ |
93,779 |
$
|
169,170 |
$ |
(75,391 |
) |
(44.6 |
)%
| |||||||
|
Year ended December 31, |
||||||||
|
2022 |
2021 |
|||||||
|
(In thousands) |
||||||||
|
Net cash provided by operating activities
|
$ |
31,284 |
$ |
214,129 |
||||
|
Net cash used in investing activities
|
(417,044 |
) |
(484,211 |
) | ||||
|
Net cash provided by (used in) financing activities |
654,607 |
(15,178 |
) | |||||
|
Increase (decrease)
in cash, cash equivalents and restricted cash |
$ |
268,847 |
$ |
(285,260 |
) | |||
| (1) |
An initial qualitative assessment may be performed to determine whether it is more likely than not that the fair value of the reporting
unit is less than its carrying amount.
|
| (2) |
If the Company concludes it is more likely than not that the fair value of the reporting unit is less than its carrying mount, a
quantitative fair value test is performed. An impairment charge for the amount by which the carrying amount exceeds the reporting unit’s
fair value is recognized. |
|
Consolidated
Financial Statements |
|
|
Reports
of Independent Registered Public Accounting Firm (PCAOB ID:
|
F-2
|
|
F-5
| |
|
F-7
| |
|
F-8
| |
|
F-9
| |
|
F-10
| |
|
F-12
|
|
Description
of the Matter |
As described in Notes 2w
and 13 to the consolidated financial statements, as of December 31, 2022, the warranty obligation was $385,057 thousand.
Substantially
all of the Company's warranty obligations are related to the solar business. The Company's products include a warranty of up to 12 years
for inverters and up to 25 years for its power optimizers. In order to predict the failure rate of each product, the Company established
a reliability model based on the estimated mean time between failures ("MTBF") and an additional model to capture non-systematic failures.
Predicted failure rates are updated periodically based on new product versions and analysis of the root cause of actual failures, as are
warranty related replacement costs.
Auditing
the management’s warranty obligations valuation of the solar business was complex and subject to judgment due to the significant
estimations required in calculating its amount. In particular, the warranty obligations are subject to significant assumptions such as
product failure rates, the average cost of products replacements and other warranty related costs.
|
|
How We Addressed the
Matter in Our Audit |
We obtained an understanding,
evaluated the design and tested the operating effectiveness of internal controls over the accounting for warranty obligations of solar
business, including controls over management's review of the significant assumptions and data underlying the warranty obligations valuation.
To
test the Company’s warranty obligations our substantive audit procedures included, among others, look back analysis and testing
the accuracy and completeness of the underlying data used in management's warranty obligations valuation assessment. We assessed the accuracy
of historical data used in estimating forecasted failure rates, repair replacement ratios and other warranty related costs and compared
them to actual warranty claims. |
|
December
31, |
||||||||
|
2022
|
2021
|
|||||||
|
ASSETS
|
||||||||
|
CURRENT ASSETS:
|
||||||||
|
Cash
and cash equivalents |
$
|
|
$
|
|
||||
|
Marketable
securities |
|
|
||||||
|
Trade
receivables, net of allowances of $ |
|
|
||||||
|
Inventories,
net |
|
|
||||||
|
Prepaid
expenses and other current assets |
|
|
||||||
|
Total
current assets |
|
|
||||||
|
LONG-TERM ASSETS:
|
||||||||
|
Marketable
securities |
|
|
||||||
|
Deferred
tax assets, net |
|
|
||||||
|
Property,
plant and equipment, net |
|
|
||||||
|
Operating
lease right-of-use assets, net |
|
|
||||||
|
Intangible
assets, net |
|
|
||||||
|
Goodwill
|
|
|
||||||
|
Other
long-term assets |
|
|
||||||
|
Total
long-term assets |
|
|
||||||
|
Total
assets |
$
|
|
$
|
|
||||
|
December
31, |
||||||||
|
2022
|
2021
|
|||||||
|
LIABILITIES AND STOCKHOLDERS’
EQUITY |
||||||||
|
CURRENT LIABILITIES:
|
||||||||
|
Trade
payables, net |
$
|
|
$
|
|
||||
|
Employees
and payroll accruals |
|
|
||||||
|
Warranty
obligations |
|
|
||||||
|
Deferred
revenues and customers advances |
|
|
||||||
|
Accrued
expenses and other current liabilities |
|
|
||||||
|
Total
current liabilities |
|
|
||||||
|
LONG-TERM LIABILITIES:
|
||||||||
|
Convertible
senior notes, net |
|
|
||||||
|
Warranty
obligations |
|
|
||||||
|
Deferred
revenues |
|
|
||||||
|
Finance
lease liabilities |
|
|
||||||
|
Operating
lease liabilities |
|
|
||||||
|
Other
long-term liabilities |
|
|
||||||
|
Total
long-term liabilities |
|
|
||||||
|
COMMITMENTS AND CONTINGENT
LIABILITIES |
||||||||
|
STOCKHOLDERS’ EQUITY:
|
||||||||
|
Common
stock of $ |
|
|
||||||
|
Additional
paid-in capital |
|
|
||||||
|
Accumulated
other comprehensive loss |
(
|
)
|
(
|
) | ||||
|
Retained
earnings |
|
|
||||||
|
Total
stockholders’ equity |
|
|
||||||
|
Total
liabilities and stockholders’ equity |
$
|
|
$
|
|
||||
|
Year
ended December 31, |
||||||||||||
|
2022
|
2021
|
2020
|
||||||||||
|
Revenues
|
$
|
|
$
|
|
$
|
|
||||||
|
Cost
of revenues |
|
|
|
|||||||||
|
Gross
profit |
|
|
|
|||||||||
|
Operating
expenses: |
||||||||||||
|
Research
and development |
|
|
|
|||||||||
|
Sales
and marketing |
|
|
|
|||||||||
|
General
and administrative |
|
|
|
|||||||||
|
Goodwill
impairment and other operating expenses (income), net |
|
|
(
|
) | ||||||||
|
Total
operating expenses |
|
|
|
|||||||||
|
Operating
income |
|
|
|
|||||||||
|
Financial
income (expense), net |
|
(
|
) |
|
||||||||
|
Other income |
|
|||||||||||
|
Income
before income taxes |
|
|
|
|||||||||
|
Income
taxes |
|
|
|
|||||||||
|
Net
income |
$
|
|
$
|
|
$
|
|
||||||
|
Net
basic earnings per share of common stock |
$
|
|
$
|
|
$
|
|
||||||
|
Net
diluted earnings per share of common stock |
$
|
|
$
|
|
$
|
|
||||||
|
Weighted
average number of shares used in computing net basic earnings per share of common stock
|
|
|
|
|||||||||
|
Weighted
average number of shares used in computing net diluted earnings per share of common stock
|
|
|
|
|||||||||
|
Year
ended December 31, |
||||||||||||
|
2022
|
2021
|
2020
|
||||||||||
|
Net income
|
$
|
|
$
|
|
$
|
|
||||||
|
Other comprehensive income
(loss), net of tax: |
||||||||||||
|
Net
change related to available-for-sale securities |
(
|
)
|
(
|
)
|
(
|
) | ||||||
|
Net
change related to cash flow hedges |
(
|
) |
|
|
||||||||
|
Foreign
currency translation adjustments on intra-entity transactions that are of a long-term investment nature |
(
|
)
|
(
|
) |
|
|||||||
|
Foreign
currency translation adjustments, net |
(
|
)
|
(
|
) |
|
| ||||||
|
Total other comprehensive
income (loss) |
(
|
)
|
(
|
) |
|
| ||||||
|
Comprehensive income
|
$
|
|
$
|
|
$
|
|
||||||
|
|
SolarEdge Technologies, Inc. Stockholders’ Equity |
|||||||||||||||||||||||
|
|
Common stock |
Additional paid
in |
Accumulated comprehensive Income (loss) |
Retained earnings |
Total |
|||||||||||||||||||
|
|
Number |
Amount |
||||||||||||||||||||||
|
Balance as of December 31,2019 |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
$ |
|
||||||||||||
|
Issuance of common stock upon exercise of stock-based awards |
|
*
|
|
|
|
|
||||||||||||||||||
|
Issuance of Common stock under employee stock purchase plan |
|
*
|
|
|
|
|
||||||||||||||||||
|
Stock based compensation |
- |
|
|
|
|
|
||||||||||||||||||
|
Equity component of convertible senior notes, net |
- |
|
|
|
|
|
||||||||||||||||||
|
Other comprehensive gain adjustments |
- |
|
|
|
|
|
||||||||||||||||||
|
Net income |
- |
|
|
|
|
|
||||||||||||||||||
|
Balance as of December 31,2020 |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||||||
|
Cumulative effect of adopting ASU 2020-06 |
- |
$ |
|
( |
) |
|
|
( |
) | |||||||||||||||
|
Issuance of common stock upon exercise of stock-based awards |
|
*
|
|
|
|
|
||||||||||||||||||
|
Issuance of Common stock under employee stock purchase plan |
|
*
|
|
|
|
|
||||||||||||||||||
|
Stock based compensation |
- |
|
|
|
|
|
||||||||||||||||||
|
Other comprehensive loss adjustments |
- |
|
|
( |
) |
|
( |
) | ||||||||||||||||
|
Net income |
- |
|
|
|
|
|
||||||||||||||||||
|
Balance as of December 31,2021 |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
$ |
|
||||||||||||
|
Issuance of common stock upon exercise of stock-based awards |
|
*
|
|
|
|
|
||||||||||||||||||
|
Issuance of Common stock under employee stock purchase plan |
|
*
|
|
|
|
|
||||||||||||||||||
|
Stock based compensation |
- |
|
|
|
|
|
||||||||||||||||||
|
Issuance
of common stock in a secondary public offering, net of underwriters' discounts and commissions of $ |
|
|
|
|
|
|
||||||||||||||||||
|
Other comprehensive loss adjustments |
- |
|
|
( |
) |
|
( |
) | ||||||||||||||||
|
Net income |
- |
|
|
|
|
|
||||||||||||||||||
|
Balance as of December 31,2022 |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
$ |
|
||||||||||||
|
Year
ended December 31, |
||||||||||||
|
2022
|
2021
|
2020
|
||||||||||
|
Cash
flows from operating activities: |
||||||||||||
|
Net income
|
$
|
|
$
|
|
$
|
|
||||||
|
Adjustments
to reconcile net income to net cash provided by operating activities: |
||||||||||||
|
Depreciation
of property, plant and equipment |
|
|
|
|||||||||
|
Amortization
of intangible assets |
|
|
|
|||||||||
|
Amortization
of debt discount and debt issuance costs |
|
|
|
|||||||||
|
Amortization
of premium and accretion of discount on available-for-sale marketable securities, net |
|
|
|
|||||||||
| Impairment of goodwill and intangible assets | ||||||||||||
|
Stock-based
compensation expenses |
|
|
|
|||||||||
| Gain from sale of privately held company |
( |
) | ||||||||||
|
Deferred
income taxes, net |
(
|
)
|
(
|
)
|
(
|
)
| ||||||
|
Exchange
rate fluctuations and other items, net |
|
|
|
|||||||||
|
Changes
in assets and liabilities: |
||||||||||||
|
Inventories,
net |
(
|
)
|
(
|
)
|
(
|
)
| ||||||
|
Prepaid
expenses and other assets |
(
|
)
|
(
|
)
|
(
|
)
| ||||||
|
Trade
receivables, net |
(
|
)
|
(
|
) |
|
| ||||||
|
Trade
payables, net |
|
|
|
|||||||||
|
Employees
and payroll accruals |
|
|
|
|||||||||
|
Warranty
obligations |
|
|
|
|||||||||
|
Deferred
revenues and customers advances |
|
|
|
(
|
) | |||||||
|
Accrued
expenses and other liabilities, net |
|
|
|
|||||||||
|
Net
cash provided by operating activities |
|
|
|
|||||||||
|
Cash
flows from investing activities: |
||||||||||||
| Proceed from sales and maturities of available-for-sale marketable securities |
|
|
|
|||||||||
|
Purchase
of property, plant and equipment |
(
|
)
|
(
|
)
|
(
|
)
| ||||||
|
Investment
in available-for-sale marketable securities |
(
|
)
|
(
|
)
|
(
|
)
| ||||||
|
Investment
in a privately-held company |
|
|
(
|
) |
|
|||||||
| Proceeds from sale of a privately-held company |
|
|||||||||||
|
Withdrawal
from (investment in) bank deposits, net |
|
|
|
(
|
) | |||||||
|
Withdrawal
from (investment in) restricted bank Deposits, net |
(
|
) |
|
|
| |||||||
|
Other
investing activities |
|
|
(
|
) |
|
| ||||||
|
Net
cash used in investing activities |
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
| |||
|
Year
ended December 31, |
||||||||||||
|
2022
|
2021
|
2020
|
||||||||||
|
Cash
flows from financing activities: |
||||||||||||
| Proceeds from secondary public offering, net of issuance costs |
$ |
|
$ |
$ |
||||||||
|
Repayment
of bank loans |
|
(
|
)
|
|
(
|
)
|
|
(
|
)
| |||
|
Proceeds
from exercise of stock-based award |
|
|
|
|||||||||
| Tax withholding in connection with stock-based awards, net |
|
( |
) |
|
||||||||
|
Proceeds
from issuance of convertible senior notes, net |
|
|
|
|||||||||
|
Proceeds
from bank loans |
|
|
|
|||||||||
|
Other
financing activities |
(
|
)
|
(
|
)
|
(
|
)
| ||||||
|
Net cash provided by
(used in) financing activities |
|
|
(
|
) |
|
| ||||||
|
Increase (decrease) in
cash and cash equivalents |
|
|
(
|
) |
|
|||||||
|
Cash and cash equivalents
at the beginning of the period |
|
|
|
|||||||||
|
Effect of exchange rate
differences on cash and cash equivalents |
(
|
)
|
(
|
)
|
(
|
) | ||||||
|
Cash and cash equivalents
at the end of the period |
$
|
|
$
|
|
$
|
|
||||||
|
Supplemental
disclosure of non-cash activities: |
||||||||||||
|
Right-of-use asset recognized
with corresponding lease liability |
$
|
|
$
|
|
$
|
|
||||||
|
Purchase of property, plant
and equipment |
$
|
|
$
|
|
$
|
|
||||||
|
|
||||||||||||
|
Supplemental
disclosure of cash flow information: |
||||||||||||
|
Cash paid for income
taxes |
$
|
|
$
|
|
$
|
|
||||||
SolarEdge Technologies, Inc. (the “Company”) and its subsidiaries design, develop, and sell an intelligent inverter solution designed to maximize power generation at the individual photovoltaic (“PV”) module level while lowering the cost of energy produced by the solar PV system and providing comprehensive and advanced safety features. The Company’s products consist mainly of (i) power optimizers designed to maximize energy throughput from each and every module through constant tracking of Maximum Power Point individually per module, (ii) inverters which invert direct current (DC) from the PV module to alternating current (AC) including the Company's future ready energy hub inverter which supports among other things, connection to a DC - coupled battery for backup capabilities, (iii) a remote cloud-based monitoring platform, that collects and processes information from the power optimizers and inverters to enable customers and system owners, to monitor and manage the solar PV system (iv) a residential storage and backup solution that is used to increase energy independence and maximize self-consumption for homeowners including a battery ,and (v) additional smart energy management solutions.
The Company and its subsidiaries sell products worldwide through large distributors, electrical equipment wholesalers, as well as directly to large solar installers and engineering, procurement and construction firms.
The Company has expanded its activity to other areas of smart energy technology organically and through acquisitions. The Company now offers a variety of energy solutions, which include lithium-ion cells, batteries and energy storage systems (“Energy Storage”), full powertrain kits for electric vehicles, or EVs (“e-Mobility”), as well as automated machines for industrial use (“Automation Machines”).
In June 2022, the Company decided to discontinue its stand-alone uninterrupted power supply solutions or UPS (“Critical Power”). The Company determined that the discontinuance of the Critical Power business does not represent a strategic shift that will have a major effect on the Company's operations and financial results and therefore it did not meet the criteria for discontinued operations classification.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
F - 12
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
F - 13
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
The Company adjusts the carrying value of its investments to fair value upon observable transactions for identical or similar investments of the same issuer.
F - 14
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
|
Year
Ended
December 31,
2022
|
||||
|
Balance,
at beginning of the period |
$
|
|
||
|
Increase
in provision for expected credit losses |
|
|
||
|
Amounts
written off charged against the allowance and others |
(
|
)
| ||
|
Balance,
at end of the period |
$
|
|
||
j.Inventories:
Inventories are stated at the lower of cost or net realizable value. Cost includes depreciation, labor, material and overhead costs. Inventory reserves are provided to cover risks arising from slow-moving items or technological obsolescence. The Company periodically evaluates the quantities on hand relative to historical, current and projected sales volume. Based on this evaluation, an impairment charge is recorded when required to write-down inventory to its net realizable value. Cost of finished goods and raw materials is determined using the moving average cost method.
|
%
| ||
|
Buildings
and plants |
| |
|
Computers
and peripheral equipment |
| |
|
Office
furniture and equipment |
| |
|
Machinery
and equipment |
| |
|
Laboratory
and testing equipment |
| |
|
Leasehold
improvements |
over
the shorter of the lease term or useful economic life |
l. Government assistance
In
2020, SolarEdge Ltd, a wholly owned subsidiary of the Company, entered into an agreement with the Israeli Ministry of Economy and Industry
to partially subsidize the construction of Sella 1, a factory for production of inverters and optimizers, in the amount of approximately
$
In
2020, SolarEdge Korea (formerly Kokam), a wholly owned subsidiary of the Company, entered into an agreement with Chungcheongbuk-do province
of South Korea to partially subsidize the construction of Sella 2, a factory for production of lithium-ion cells and batteries, in the
amount of approximately $
F - 15
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
m.Leases:
F - 16
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
The Company’s long-lived assets to be held and used, including ROU assets and identifiable intangible assets that are subject to amortization, other than goodwill, are reviewed for impairment in accordance with ASC 360 “Property, Plants and Equipment”, whenever events or changes in circumstances indicate that the carrying amount of an asset (or asset group) may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset (or asset group) to the future undiscounted cash flows expected to be generated by the assets (or asset group). If such evaluation indicates that the carrying amount of the asset (or asset group) is not recoverable, the assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds their fair value (see Note 8).
For
the years ended December 31, 2022, 2021 and 2020, the Company recorded impairment charges of $
|
(1) An initial qualitative assessment may be performed to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. | |
|
(2) If the Company concludes it is more likely than not that the fair value of the reporting unit is less than its carrying amount, a quantitative impairment test is performed. An impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value is recognized (see Note 9). |
For the years ended December 31, 2021 and 2020, the Company did not record any impairment charges.
F - 17
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
In 2021, due to the growing size and complexity of the Company, the Company decided to implement a new global enterprise resource planning ("ERP") system, which will replace the Company's existing operating and financial systems. During the year ended December 31, 2022, the Company began implementing a cloud-based ERP system. The implementation is expected to occur in phases over the next several years.
The Company incurs costs to implement cloud computing arrangements ("CCA") that are hosted by third party vendors. Implementation costs associated with CCA are capitalized when incurred during the application development phase until the software is ready for its intended use. The costs are then amortized on a straight-line basis over the contractual term of the cloud computing arrangement and are recognized as an operating expense within the consolidated statements of income. Capitalized amounts related to such arrangements are recorded within other long-term assets in the consolidated balance sheets. Cash payments for CCA implementation costs are classified as cash outflows from operating activities.
For
the year ended December 31, 2022, the Company has capitalized implementation costs related to its upcoming ERP conversion in the amount
of $
If applicable, severance costs are recorded in each entity in accordance with local laws and regulations.
F - 18
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
The Company also entered into derivative instrument arrangements to hedge the Company’s exposure to currencies other than the U.S. dollar. These derivative instruments are not designated as cash flow hedges, as defined by ASC 815, and therefore all gains and losses, resulting from fair value remeasurement, were recorded immediately in the statement of income, as a financial income (expense), net..
The Company classifies cash flows related to its hedging as operating activities in its consolidated statement of cash flows.
F - 19
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
Revenues from sales of products are recognized based on the transfer of control, which includes but is not limited to, the agreed International Commercial terms, or “INCOTERMS”. Revenues related to warranty extension services, cloud-based monitoring, and communication services are recognized over time on a straight-line basis.
F - 20
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
F - 21
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
y.Advertising costs
Advertising
costs are expensed when incurred and are included in sales and marketing expenses in the consolidated statements of income. The Company
incurred advertising expenses of $
F - 22
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
The
Company had three major customers (customer with a balance that represents more than 10% of total trade receivables, net) as of December
31, 2022 and two major customers for the year ended December 31, 2021 that accounted in the aggregate for approximately
F - 23
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
A three-tiered fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value:
The Company granted under its 2015 Plan, PSU awards to certain employees and officers which vest upon the achievement of certain performance or market conditions subject to their continued employment with the Company.
The market condition for the PSUs is based on the Company’s total shareholder return ("TSR") compared to the TSR of companies listed in the S&P 500 index over a one to three year performance period. The Company uses a Monte-Carlo simulation to determine the grant date fair value for these awards, which takes into consideration the market price of a share of the Company’s common stock on the date of grant less the present value of dividends expected during the requisite service period, as well as the possible outcomes pertaining to the TSR market condition. The Company recognizes such compensation expenses on an accelerated vesting method.
F - 24
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
The fair value for options granted to employees and ESPP in the years ended December 31, 2022, 2021 and 2020, is estimated at the date of grant using the following assumptions:
|
Year ended December 31, |
|||||||||
|
2022 |
2021 |
2020 |
|||||||
|
Employee
Stock Options (1) |
|||||||||
|
Risk-free interest |
|
|
|
|
| ||||
|
Dividend yields |
|
|
|
|
| ||||
|
Volatility |
|
|
|
|
|||||
|
Expected option term in years |
- |
|
|
||||||
|
Estimated forfeiture rate |
|
|
|
|
| ||||
|
ESPP |
|||||||||
|
Risk-free interest |
|
|
|
|
|
||||
|
Dividend yields |
|
|
|
|
|
| |||
|
Volatility |
|
|
|
|
|
| |||
|
Expected term |
|
|
|
||||||
|
PSU |
|||||||||
|
Risk-free interest |
|
|
|
|
|||||
|
Dividend yields |
|
|
|
|
|||||
|
Volatility |
|
|
|
|
|||||
|
Expected term |
|
- |
- |
||||||
Tax has not been recorded for (a) taxes that would apply in the event of disposal of investments in subsidiaries, as it is generally the Company’s intention to hold these investments, not to realize them; and (b) taxes that would apply on the distribution of unremitted earnings from foreign subsidiaries, as these are retained for reinvestment in the Group.
F - 25
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
F - 26
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
NOTE 3: MARKETABLE SECURITIES
|
Amortized
cost
|
Gross
unrealized
gains
|
Gross
unrealized
losses
|
Fair
value |
|||||||||||||
|
Available-for-sale –
matures within one year: |
||||||||||||||||
|
Corporate bonds
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
|
Governmental bonds
|
|
|
(
|
)
|
|
|||||||||||
|
|
|
(
|
)
|
|
||||||||||||
|
Available for-sale –
matures after one year: |
||||||||||||||||
|
Corporate bonds
|
|
|
(
|
)
|
|
|||||||||||
|
Governmental bonds
|
|
|
(
|
)
|
|
|||||||||||
|
|
|
(
|
)
|
|
||||||||||||
|
Total
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
|
Amortized
cost
|
Gross
unrealized
gains
|
Gross
unrealized
losses
|
Fair
value |
|||||||||||||
|
Available-for-sale –
matures within one year: |
||||||||||||||||
|
Corporate bonds
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
|
Governmental bonds
|
|
|
(
|
) |
|
|||||||||||
|
|
|
(
|
)
|
|
||||||||||||
|
Available for-sale –
matures after one year: |
||||||||||||||||
|
Corporate bonds
|
|
|
(
|
)
|
|
|||||||||||
|
Governmental bonds
|
|
|
(
|
)
|
|
|||||||||||
|
|
|
(
|
)
|
|
||||||||||||
|
Total
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
Proceeds
from maturity of available-for-sale marketable securities during the years ended December 31, 2022, 2021 and 2020, were $
Proceeds
from sales of available-for-sale marketable securities during the year ended December 31, 2022 were $
Proceeds
from sales of available-for-sale marketable securities during the year ended December 31, 2021 were $
The Company had no proceeds from sales of available-for sale, marketable securities during the year ended December 31, 2020, therefore no realized gains or losses from the sale of available-for-sale marketable securities were recognized.
F - 27
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
NOTE 4: INVENTORIES, NET
|
|
As of December 31, | |||||||
|
|
2022 |
2021 |
||||||
|
Raw materials |
$ | $ | ||||||
|
Work in process |
||||||||
|
Finished goods |
||||||||
|
|
$ | $ | ||||||
The
Company recorded inventory write-downs of $
NOTE 5: PREPAID EXPENSES AND OTHER CURRENT ASSETS
|
As of December 31, |
||||||||
|
2022 |
2021 |
|||||||
|
Vendor non-trade receivables (*) |
$ |
|
$ |
|
||||
|
Government authorities |
|
|
||||||
|
Prepaid expenses and other |
|
|
||||||
|
$ |
|
$ |
|
|||||
(*) Vendor non-trade receivables derived from the sale of components to manufacturing vendors who manufacture products for the Company. The Company purchases these components directly from other suppliers. The Company does not reflect the sale of these components to the contract manufacturers in its revenues (see Note 19b).
|
|
|
As
of December 31, |
| |||||
|
|
|
2022
|
|
|
2021
|
| ||
|
Cost: |
|
|
|
|
|
| ||
|
Land |
|
$ |
|
|
|
$ |
|
|
|
Buildings and plants
|
|
|
|
|
|
|
|
|
|
Computers and peripheral
equipment |
|
|
|
|
|
|
|
|
|
Office furniture
and equipment |
|
|
|
|
|
|
|
|
|
Laboratory and
testing equipment |
|
|
|
|
|
|
|
|
|
Machinery and equipment
|
|
|
|
|
|
|
|
|
|
Leasehold improvements
|
|
|
|
|
|
|
|
|
|
Assets under construction
and payments on account |
|
|
|
|
|
|
|
|
|
Gross property,
plant and equipment |
|
|
|
|
|
|
|
|
|
Less - accumulated
depreciation |
|
|
|
|
|
|
|
|
|
Total property,
plant and equipment, net |
|
$ |
|
|
|
$ |
|
|
F - 28
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
NOTE 7: LEASES
The following table summarizes the Company’s lease-related assets and liabilities recorded in the consolidated balance sheets:
|
Description |
Classification on the consolidated Balance Sheet |
2022 |
2021 |
|||||||
|
Assets: |
||||||||||
|
Operating lease assets, net of lease incentive obligation |
Operating lease right-of use assets, net |
$ |
|
$ |
|
|||||
|
Finance lease assets |
Property, plant and equipment, net |
|
|
|||||||
|
Total lease assets |
$ |
|
$ |
|
||||||
|
Liabilities: |
||||||||||
|
Operating leases short term |
Accrued expenses and other current liabilities |
$ |
|
$ |
|
|||||
|
Finance leases short term |
Accrued expenses and other current liabilities |
|
|
|||||||
|
Operating leases long term |
Operating lease liabilities |
|
|
|||||||
|
Finance leases long term |
Finance lease liabilities |
|
|
|||||||
|
Total lease liabilities |
$ |
|
$ |
|
||||||
The following table presents certain information related to the operating and finance leases:
|
Year ended December 31, |
||||||||
|
2022 |
2021 |
|||||||
|
Finance leases: |
||||||||
|
Finance lease cost |
$ |
|
$ |
|
||||
|
Weighted average remaining lease term in years |
|
|
||||||
|
Weighted average annual discount rate |
|
% |
|
% | ||||
|
Operating leases: |
||||||||
|
Operating lease cost |
$ |
|
$ |
|
||||
|
Weighted average remaining lease term in years |
|
|
||||||
|
Weighted average annual discount rate |
|
% |
|
% | ||||
The following table presents supplemental cash flows information related to the lease costs for operating and finance leases:
|
|
Year ended December 31, |
|||||||
|
|
2022 |
2021 | ||||||
|
Cash paid for amounts included in measurement of lease liabilities: |
|
|||||||
|
Operating cash flows for operating leases |
$ |
|
$ |
| ||||
|
Operating cash flows for finance leases |
$ |
|
$ |
|
||||
|
Financing cash flows for finance leases |
$ |
|
$ |
| ||||
F - 29
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
The following table reconciles the undiscounted cash flows for each of the first five years and the total of the remaining years of the operating and finance lease liabilities recorded in the consolidated balance sheets:
|
Operating Leases |
Finance Leases |
|||||||
|
2023 |
$ |
|
$ |
|
||||
|
2024 |
|
|
||||||
|
2025 |
|
|
||||||
|
2026 |
|
|
||||||
|
2027 |
|
|
||||||
|
Thereafter |
|
|
|
|
||||
|
Total lease payments |
$ |
|
$ |
|
||||
|
Less amount of lease payments representing interest |
|
( |
) |
|
( |
) | ||
|
Present value of future lease payments |
$ |
|
$ |
|
||||
|
Less current lease liabilities |
|
( |
) |
|
( |
) | ||
|
Long-term lease liabilities |
$ |
|
$ |
|
||||
F - 30
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
NOTE 8: INTANGIBLE ASSETS, NET
In
June 2022, the Company decided to discontinue its stand-alone uninterrupted power supply activities or UPS (“Critical Power”).
The Company recorded a loss in the amount of $
In
October 2022, following the e-Mobility and Automation Machines reporting unit’s goodwill analysis, an impairment test for long-lived
assets was performed. The test included comparing the sum of the estimated undiscounted future cash flow attributable to the identified
assets group and its carrying amounts, and recognizing an impairment for the amount to which the carrying amount exceeds the fair value
of the assets groups. As a result, the Company recorded a current technology impairment of $
Acquired intangible assets consisted of the following as of December 31, 2022, and 2021:
|
|
As of December 31, |
|||||||
|
|
2022 |
2021 |
||||||
|
Intangible assets with finite lives: |
|
|
|
|
||||
|
Current Technology |
$ |
|
$ |
|
||||
|
Customer relationships |
|
|
|
|
||||
|
Trade names |
|
|
|
|
||||
|
Assembled workforce |
|
|
|
|
||||
|
Patents |
|
|
|
|
||||
|
Gross intangible assets |
|
|
|
|
||||
|
Less - accumulated amortization |
|
( |
) |
|
( |
) |
||
|
Total intangible assets, net |
$ |
|
$ |
|
||||
Amortization
expenses for the years ended December 31, 2022, 2021 and 2020,
were $
Expected future amortization expenses of intangible assets as of December 31, 2022 are as follows:
|
2023 |
$ |
|
||
|
2024 |
|
|
||
|
2025 |
|
|
||
|
2026 |
|
|
||
|
2027 |
|
|
||
|
2028 and thereafter |
|
|
||
|
|
$ |
|
F - 31
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
|
Solar
|
All
other |
Total
|
||||||||||
|
Goodwill
at December 31, 2020 |
$
|
|
$
|
|
$
|
|
||||||
|
Changes
during the year: |
||||||||||||
|
Foreign
currency adjustments |
(
|
)
|
(
|
)
|
(
|
)
| ||||||
|
Goodwill
at December 31, 2021 |
|
|
|
|||||||||
|
Changes
during the year: |
||||||||||||
|
Foreign
currency adjustments |
(
|
)
|
(
|
)
|
(
|
)
| ||||||
|
Accumulated
impairment losses |
|
(
|
)
|
(
|
)
| |||||||
|
Goodwill
at December 31, 2022 |
$
|
|
$
|
|
$
|
|
||||||
F - 32
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
NOTE 11: DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
The fair values of outstanding derivative instruments were as follows:
|
Balance
sheet location |
December 31,
2022
|
December 31,
2021
|
|||||||
|
Derivative
assets of options and forward contracts: |
|||||||||
|
Designated
cash flow hedges |
Prepaid
expenses and other current assets |
$
|
|
$
|
|
||||
|
Non-designated
hedges |
Prepaid
expenses and other current assets |
|
|
||||||
|
Total
derivative assets |
$
|
|
$
|
|
|||||
|
Derivative
liabilities of options and forward contracts: |
|||||||||
|
Designated
cash flow hedges |
Accrued
expenses and other current liabilities |
$
|
(
|
)
|
$
|
|
|||
|
Non-designated
hedges |
Accrued
expenses and other current liabilities |
|
(
|
)
| |||||
|
Total
derivative liabilities |
$
|
(
|
)
|
$
|
(
|
)
| |||
Gains (losses) on derivative instruments recognized in the consolidated statements of income are summarized below:
|
|
Year ended December 31, |
||||||||||||||
|
|
2022 |
2021 |
2020 |
Affected line item |
|||||||||||
|
Foreign exchange contracts |
|||||||||||||||
|
Non Designated Hedging Instruments |
$ |
|
$ |
|
$ |
( |
) |
Financial income (expense), net |
|||||||
See Note 20 for information regarding gains (losses) from designated hedging instruments reclassified from accumulated other comprehensive loss.
F - 33
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
Gains (losses) on derivative instruments recognized in the consolidated statements of comprehensive income were as follows:
|
Year ended December 31 | ||||||||||||
|
|
2022 |
2021 |
2020 |
|||||||||
|
Foreign exchange contracts: |
||||||||||||
|
Designated Hedging Instruments |
$ |
( |
) |
$ |
|
$ |
|
|||||
As of December 31, 2022, the Company estimates that all of the net derivative losses related to the Company's foreign exchange cash flow hedges included in accumulated other comprehensive loss will be reclassified into earnings within the next 12 months.
NOTE 12: FAIR VALUE MEASUREMENTS
In accordance with ASC 820, the Company measures its cash equivalents and marketable securities, at fair value using the market approach valuation technique. Cash and cash equivalents are classified within Level 1 because these assets are valued using quoted market prices. Marketable securities and foreign currency derivative contracts are classified within level 2 due to these assets being valued by alternative pricing sources and models utilizing market observable inputs.
|
|
Fair
Value Hierarchy |
Fair
value measurements as of
|
||||||||
|
Description
|
December 31,
2022
|
December 31,
2021
|
||||||||
|
Assets:
|
||||||||||
|
Cash and cash equivalents:
|
||||||||||
|
Cash |
Level 1 |
$ |
$ |
|||||||
|
Money
market mutual funds |
Level
1 |
$
|
|
$
|
|
|||||
|
Deposits |
Level 1 |
$ |
$ |
|||||||
|
Derivative instruments
|
Level 2 |
$ |
$ |
|||||||
|
Short-term marketable
securities: |
||||||||||
|
Corporate
bonds |
Level
2 |
$
|
|
$
|
|
|||||
|
Governmental
bonds |
Level
2 |
$
|
|
$
|
|
|||||
|
Long-term marketable
securities: |
||||||||||
|
Corporate
bonds |
Level
2 |
$
|
|
$
|
|
|||||
|
Governmental
bonds |
Level
2 |
$
|
|
$
|
|
|||||
|
Liabilities:
|
||||||||||
|
Derivative instruments
|
Level 2 |
$ |
( |
$ |
( |
|||||
In addition to assets and liabilities that are recorded at fair value on a recurring basis, impairment indicators may subject goodwill and long-lived assets to nonrecurring fair value measurements. The implied fair values of the e-Mobility and Automation Machines reporting units were estimated using the discounted cash flow approach (see Notes 8 and 9). The inputs to these models are considered Level 3.
F - 34
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
|
December
31, |
||||||||||||
|
2022
|
2021
|
2020
|
||||||||||
|
Balance,
at the beginning of the period |
$
|
|
$
|
|
$
|
|
||||||
|
Additions
and adjustments to cost of revenues |
|
|
|
|||||||||
|
Usage
and current warranty expenses |
(
|
)
|
(
|
)
|
(
|
)
| ||||||
|
Balance,
at end of the period |
|
|
|
|||||||||
|
Less
current portion |
(
|
)
|
(
|
)
|
(
|
)
| ||||||
|
Long
term portion |
$
|
|
$
|
|
$
|
|
||||||
NOTE 14: DEFERRED REVENUES
Deferred revenues consist of deferred cloud-based monitoring services, communication services, warranty extension services and advance payments received from customers for the Company’s products. Deferred revenues are classified as short-term and long-term deferred revenues based on the period in which revenues are expected to be recognized.
|
December
31, |
||||||||||||
|
2022
|
2021
|
2020
|
||||||||||
|
Balance,
at the beginning of the period |
$
|
|
$
|
|
$
|
|
||||||
|
Revenue
recognized |
(
|
)
|
(
|
)
|
(
|
)
| ||||||
|
Increase
in deferred revenues and customer advances |
|
|
|
|||||||||
|
Balance,
at the end of the period |
|
|
|
|||||||||
|
Less
current portion |
(
|
)
|
(
|
)
|
(
|
)
| ||||||
|
Long
term portion |
$
|
|
$
|
|
$
|
|
||||||
|
2023 |
$ |
|
||
|
2024 |
|
|||
|
2025 |
|
|||
|
2026 |
|
|||
|
2027 |
|
|||
|
Thereafter |
|
|||
|
Total deferred revenues |
$ |
|
F - 35
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
NOTE 15: ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
|
|
As of December 31, | |||||||
|
|
2022 |
2021 |
||||||
|
Accrued expenses |
$ | $ | ||||||
|
Government authorities |
||||||||
|
Operating lease liabilities |
||||||||
|
Accrual for sales incentives |
||||||||
|
Provision for legal claims |
||||||||
|
Other |
||||||||
|
Total
accrued expenses and other current liabilities |
$ | $ | ||||||
NOTE 16: CONVERTIBLE SENIOR NOTES
On
September 25, 2020, the Company sold $
Holders
may convert their Notes prior to the close of business on the business day immediately preceding June 15, 2025 in multiples of $
Upon conversion, the Company may choose to pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock.
In
addition, upon the occurrence of a fundamental change (as defined in the Indenture), holders of the Notes may require the Company to repurchase
all or a portion of their Notes, in multiples of $
F - 36
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
The Convertible Senior Notes consisted of the following as of December 31, 2022 and 2021:
|
|
As of December 31, |
|||||||
|
2022 |
2021 |
|||||||
|
Liability: |
|
|
||||||
|
Principal |
$ |
|
$ |
|
||||
|
Unamortized issuance costs |
( |
)
|
( |
)
| ||||
|
Net carrying amount |
$ |
|
$ |
|
||||
Effective
January 1, 2021, the Company early adopted ASU 2020-06 using the modified retrospective approach and therefore the Company did not record
amortized debt discount costs related to the Notes in the years ended December 31, 2022 and 2021. For the year ended December 31, 2020,
the Company recorded amortized debt discount costs related to the Notes in the amount of $
For
the years ended December 31, 2022, 2021 and 2020
the Company recorded amortized debt issuance costs related to the Notes in the amount of $
As
of December 31, 2022, the issuance costs of the Notes will be amortized over the remaining term of approximately
The
annual effective interest rate of the liability component following the adoption of ASU 2020-06 is
As
of December 31, 2022, the estimated fair value of the Notes, which the Company has classified as Level 2 financial instruments, is $
As
of December 31, 2022, the if-converted value of the Notes exceeded the principal amount by $
NOTE 17: OTHER LONG TERM LIABILITIES
|
|
As of December 31, |
|||||||
|
|
2022 |
|
2021 |
|||||
|
Tax liabilities |
$ |
|
|
$ |
|
|||
|
Accrued severance pay |
|
|
|
|
||||
|
Other |
|
|
|
|
||||
|
|
$ |
|
|
$ |
|
|||
F - 37
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
F - 38
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
The aggregate maximum number of shares
of common stock that may be issued on the exercise of incentive stock options is
|
Number
of
options
|
Weighted
average
exercise
price
|
Weighted
average
remaining
contractual
term
in years |
Aggregate
intrinsic
Value
|
|||||||||||||
|
Outstanding
as of December 31, 2021 |
|
$
|
|
|
$
|
|
||||||||||
|
Exercised
|
(
|
)
|
|
- |
|
|||||||||||
|
Forfeited
or expired |
(
|
)
|
|
- |
- |
|||||||||||
|
Outstanding
as of December 31, 2022 |
|
$
|
|
|
$
|
|
||||||||||
|
Vested
and expected to vest as of December 31, 2022 |
|
$
|
|
|
$
|
|
||||||||||
|
Exercisable
as of December 31, 2022 |
|
$
|
|
|
$
|
|
||||||||||
The
total intrinsic value of options exercised during the years ended December 31, 2022, 2021 and 2020 was $
There were no options granted in 2022.
The weighted
average grant date fair value of options granted to employees and directors during the years ended December 31, 2021 and 2020, was $
|
Number of
RSUs
|
Weighted
average
grant date
fair value
|
|||||||
|
Unvested as of January 1, 2022 |
|
$
|
|
|||||
|
Granted
|
|
|
||||||
|
Vested
|
(
|
)
|
|
|||||
|
Forfeited
|
(
|
)
|
|
|||||
|
Unvested as of December 31, 2022 |
|
$ |
|
|||||
F - 39
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
A summary of the activity in the PSUs and related information is as follows:
|
Number
of
PSUs
|
Weighted
average
grant date
fair value
|
|||||||
|
Unvested as of January 1, 2022 |
|
$
|
|
|||||
|
Granted
|
|
|
||||||
|
Unvested as of December 31, 2022 |
|
$
|
|
|||||
The
ESPP is implemented through an offering every six months. According to the ESPP, eligible employees may use up to
|
Year ended December 31, | ||||||||||||
|
2022
|
2021
|
2020
|
||||||||||
|
Cost
of revenues |
$
|
|
$
|
|
$
|
|
||||||
|
Research
and development |
|
|
|
|||||||||
|
Selling
and marketing |
|
|
|
|||||||||
|
General
and administrative |
|
|
|
|||||||||
|
Total
stock-based compensation expenses |
$
|
|
$
|
|
$
|
|
||||||
For
the year ended December 31, 2022, the Company capitalized $
F - 40
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
| a. |
Guarantees:
|
| b. |
Contractual
purchase obligations: |
| c. |
Legal
claims: |
F - 41
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
NOTE 20: ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
|
Unrealized gains (losses) on available-for-sale marketable securities
|
Unrealized gains (losses) on cash flow hedges |
Foreign currency translation adjustments on intra-entity transactions
that are of a long-term investment in nature |
Unrealized gains (losses) on foreign currency translation |
Total |
||||||||||||||||
|
Beginning balance as of January 1, 2020 |
$ |
|
$ |
|
$ |
|
$ |
(
|
) |
$ |
(
|
) | ||||||||
|
Revaluation |
|
|
|
|
|
|||||||||||||||
|
Tax on revaluation |
(
|
) |
(
|
) |
|
(
|
) | |||||||||||||
|
Other comprehensive income (loss) before reclassifications |
(
|
) |
|
|
|
|
||||||||||||||
|
Reclassification |
|
(
|
) |
|
|
(
|
) | |||||||||||||
|
Tax on reclassification |
|
|
|
|
|
|||||||||||||||
|
Gains reclassified from accumulated other comprehensive income |
|
(
|
) |
|
|
(
|
) | |||||||||||||
|
Net current period other comprehensive income (loss) |
(
|
) |
|
|
|
|
||||||||||||||
|
Ending balance as of December 31, 2020 |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||||||
|
Revaluation |
(
|
) |
|
(
|
) |
(
|
) |
(
|
) | |||||||||||
|
Tax on revaluation |
|
(
|
) |
|
|
|
||||||||||||||
|
Other comprehensive income (loss) before reclassifications |
(
|
) |
|
(
|
) |
(
|
) |
(
|
) | |||||||||||
|
Reclassification |
(
|
) |
(
|
) |
|
|
(
|
) | ||||||||||||
|
Tax on reclassification |
|
|
|
|
|
|||||||||||||||
|
Gains reclassified from accumulated other comprehensive income |
(
|
) |
(
|
) |
|
|
(
|
) | ||||||||||||
|
Net current period other comprehensive income (loss) |
(
|
) |
|
(
|
) |
(
|
) |
(
|
) | |||||||||||
|
Ending balance as of December 31, 2021 |
$ |
(
|
) |
$ |
|
$ |
(
|
) |
$ |
(
|
) |
$ |
(
|
) | ||||||
|
Revaluation |
(
|
) |
(
|
) |
(
|
) |
(
|
) |
(
|
) | ||||||||||
|
Tax on revaluation |
|
|
|
|
|
|||||||||||||||
|
Other comprehensive loss before reclassifications |
(
|
) |
(
|
) |
(
|
) |
(
|
) |
(
|
) | ||||||||||
|
Reclassification |
|
|
|
|
|
|||||||||||||||
|
Tax on reclassification |
(
|
) |
(
|
) |
|
|
(
|
) | ||||||||||||
|
Losses reclassified from accumulated other comprehensive income |
|
|
|
|
|
|||||||||||||||
|
Net current period other comprehensive loss |
(
|
) |
(
|
) |
(
|
) |
(
|
) |
(
|
) | ||||||||||
|
Ending balance as of December 31, 2022 |
$ |
(
|
) |
$ |
(
|
) |
$ |
(
|
) |
$ |
(
|
) |
$ |
(
|
) | |||||
F - 42
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
The following table provides details about reclassifications out of accumulated other comprehensive income (loss) for the years ended December 31, 2022, 2021 and 2020:
|
Details about Accumulated Other Comprehensive Income (Loss) Components |
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) |
Affected Line Item in the Statement of Income |
|||||||||||||
|
|
2022 | 2021 | 2020 | ||||||||||||
|
Unrealized gains (losses) on available-for-sale marketable securities |
|||||||||||||||
|
|
$ | ( |
) |
$ |
$ | Financial income (expenses), net | |||||||||
|
|
|
( |
) | Income taxes | |||||||||||
|
|
$ | ( |
) | $ | $ | Total, net of income taxes | |||||||||
|
Unrealized gains (losses) on cash flow hedges |
|||||||||||||||
|
|
( |
) | Cost of revenues | ||||||||||||
|
|
( |
) | Research and development | ||||||||||||
|
|
( |
) | Sales and marketing | ||||||||||||
|
|
( |
) | General and administrative | ||||||||||||
|
|
$ | ( |
) | $ | $ | Total, before income taxes | |||||||||
|
|
( |
) | ( |
) | Income taxes | ||||||||||
|
|
( |
) |
|
Total, net of income taxes |
|||||||||||
|
Total reclassifications for the period |
$ |
( |
) | $ |
|
$ |
|
|
|||||||
F - 43
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
NOTE 21: EARNINGS PER SHARE
The following table presents the computation of basic and diluted EPS attributable to SolarEdge Technologies Inc.:
|
Year
ended December 31, |
||||||||||||
|
2022
|
2021
|
2020
|
||||||||||
|
Basic
EPS: |
||||||||||||
|
Numerator:
|
||||||||||||
|
Net
income |
$
|
|
$
|
|
$
|
|
||||||
|
Denominator:
|
||||||||||||
|
Shares
used in computing net earnings per share of common stock, basic |
|
|
|
|||||||||
|
Diluted
EPS: |
||||||||||||
|
Numerator:
|
||||||||||||
|
Net
income attributable to common stock, basic |
$
|
|
$
|
|
$
|
|
||||||
|
Notes
due 2025 |
|
|
|
|||||||||
|
Net
income attributable to common stock, diluted |
$
|
|
$
|
|
$
|
|
||||||
|
Denominator:
|
||||||||||||
|
Shares
used in computing net earnings per share of common stock, basic |
|
|
|
|||||||||
|
Notes
due 2025 |
|
|
|
|||||||||
|
Effect
of stock-based awards |
|
|
|
|||||||||
|
Shares
used in computing net earnings per share of common stock, diluted |
|
|
|
|||||||||
|
Shares
excluded from the calculation of diluted net EPS due to their anti-dilutive effect |
|
|
|
|||||||||
F - 44
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
NOTE 22: GOODWILL IMPAIRMENT AND OTHER OPERATING EXPENSES (INCOME), NET
|
Year
ended December 31, |
||||||||||||
|
2022
|
2021
|
2020
|
||||||||||
|
Impairment
of goodwill 1 |
$
|
|
$
|
|
$
|
|
||||||
|
Impairment
of long-lived assets 2 |
|
|
|
|||||||||
|
Sale
of assets |
(
|
)
|
|
|
||||||||
|
SolarEdge
Korea (formerly Kokam) purchase escrow 3
|
|
(
|
)
|
(
|
)
| |||||||
|
Total
goodwill impairment and other operating expenses (income) |
$
|
|
$
|
|
$
|
(
|
)
| |||||
F - 45
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
F - 46
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
Significant components of the Company’s deferred tax liabilities and assets are as follows:
|
December
31, |
||||||||
|
2022
|
2021
|
|||||||
|
Deferred
tax assets, net: |
||||||||
|
Research
and Development carryforward expenses |
$
|
|
$
|
|
||||
|
Carryforward tax losses(1)
|
|
|
||||||
|
Stock
based compensation expenses |
|
|
||||||
|
Deferred
revenue |
|
|
||||||
|
Lease
liabilities |
|
|
||||||
|
Inventory
Impairment |
|
|
||||||
|
Allowance
and other reserves |
|
|
||||||
|
Total
Gross deferred tax assets, net |
$
|
|
$
|
|
||||
|
Less,
Valuation Allowance |
(
|
)
|
(
|
)
| ||||
|
Total
deferred tax assets, net |
$
|
|
$
|
|
||||
|
Deferred
tax liabilities, net: |
||||||||
|
Intercompany
transactions |
$
|
(
|
)
|
$
|
(
|
)
| ||
|
Right-of-use
assets |
(
|
)
|
(
|
)
| ||||
|
Purchase
price allocation |
(
|
)
|
(
|
)
| ||||
|
Total
deferred tax liabilities, net |
$
|
(
|
)
|
$
|
(
|
)
| ||
|
Recorded
as: |
||||||||
|
Deferred
tax assets, net |
$
|
|
$
|
|
||||
|
Deferred
tax liabilities, net |
|
(
|
)
| |||||
|
Net
deferred tax assets |
$
|
|
$
|
|
||||
(1) Related to deferred tax assets that would only be realizable upon the generation of net income in certain foreign jurisdictions.
The Company’s Israeli subsidiary’s tax-exempt profit from Benefited Enterprises (as defined in note 23.j) is permanently reinvested, Therefore, deferred taxes have not been provided for such tax-exempt income.
The Company may incur additional tax liability in the event of intercompany dividend distributions by some of its subsidiaries. Such additional tax liability in respect of these subsidiaries has not been provided for in the Financial Statements as the Company’s management and the Board of Directors has determined that the Company intends to reinvest earnings of its subsidiaries indefinitely.
|
December
31, |
||||||||||||
|
2022
|
2021
|
2020
|
||||||||||
|
Balance,
at the beginning of the period |
$
|
|
$
|
|
$
|
|
||||||
|
Increases
related to current year tax positions |
|
|
|
|||||||||
|
Increase
for tax positions related to prior years |
|
|
|
|||||||||
|
Decreases
related to prior year tax positions |
|
(
|
)
|
|
||||||||
|
Balance,
at end of the period |
$
|
|
$
|
|
$
|
|
||||||
F - 47
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
|
Year ended December 31, |
||||||||||||
|
2022 |
2021 |
2020 |
||||||||||
|
Domestic |
$ |
|
$ |
|
$ |
|
||||||
|
Foreign |
|
|
|
|||||||||
|
Income before income taxes |
$ |
|
$ |
|
$ |
|
||||||
|
Year ended December 31, |
||||||||||||
|
2022 |
2021 |
2020 |
||||||||||
|
Current taxes: |
||||||||||||
|
Domestic |
$ |
|
$ |
(
|
) |
$ |
|
|||||
|
Foreign |
|
|
|
|||||||||
|
Total current taxes |
|
|
|
|||||||||
|
Deferred taxes: |
||||||||||||
|
Domestic |
(
|
) |
(
|
) |
|
|||||||
|
Foreign |
(
|
) |
(
|
) |
(
|
) | ||||||
|
Total deferred taxes |
(
|
) |
(
|
) |
(
|
) | ||||||
|
Income taxes, net |
$ |
|
$ |
|
$ |
|
||||||
F - 48
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
|
Year ended December 31, |
||||||||||||
|
2022 |
2021 |
2020 |
||||||||||
|
Statutory tax rate |
|
% |
|
% |
|
% | ||||||
|
Effect of: |
||||||||||||
|
Income tax at rate other than the U.S. statutory tax rate |
(
|
)%
|
(
|
)%
|
(
|
)%
| ||||||
|
Losses and timing differences for which valuation allowance was provided |
|
% |
|
% |
|
% | ||||||
|
Prior year income taxes (benefit) |
|
% |
(
|
)%
|
(
|
)%
| ||||||
|
R&D Capitalization and other effects of TCJA |
|
% |
|
% |
|
% | ||||||
|
Disallowable and allowable deductions |
|
% |
|
% |
(
|
)%
| ||||||
|
Other individually immaterial income tax items, net |
(
|
)%
|
(
|
)%
|
(
|
)%
| ||||||
|
Effective tax rate |
|
% |
|
% |
|
% | ||||||
|
j. |
Tax benefits for Israeli companies under the Law for the Encouragement of Capital Investments, 1959 (the “Investments Law”): |
F - 49
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
F - 50
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
NOTE 24: FINANCIAL INCOME (EXPENSE), NET
|
Year
ended December 31, |
||||||||||||
|
2022
|
2021
|
2020
|
||||||||||
|
Exchange
rate (loss) gain, net |
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
||||
|
Interest
income on marketable securities |
|
|
|
|||||||||
|
Convertible
note |
(
|
)
|
(
|
)
|
(
|
)
| ||||||
|
Hedging
|
|
|
(
|
)
| ||||||||
|
Financing
component expenses related to ASC 606 |
(
|
)
|
(
|
)
|
(
|
)
| ||||||
|
Bank
charges |
(
|
)
|
(
|
)
|
(
|
)
| ||||||
|
Interest
income, net |
|
|
|
|||||||||
|
Other
|
(
|
)
|
|
(
|
)
| |||||||
|
Total
financial income (expenses), net |
$
|
|
$
|
(
|
)
|
$
|
|
|||||
NOTE 25: SEGMENT, GEOGRAPHIC AND PRODUCT INFORMATION
a. Segment Information:
Following the discontinuation of Critical Power in June 2022, the Company operates in four different operating segments: Solar, Energy Storage, e-Mobility and Automation Machines.
The Company's Chief Executive Officer, who is the chief operating decision maker (“CODM”), makes resource allocation decisions and assesses performance based on financial information presented on a consolidated basis, accompanied by disaggregated information about revenues and contributed profit by the operating segments.
The Company does not allocate to its operating segments revenue recognized due to advance payments received for performance obligations that extend for a period greater than one year (“financing component”), related to Accounting Standard Codification 606, “Revenue from Contracts with Customers” (ASC 606).
Segment profit is comprised of gross profit for the segment less operating expenses that do not include amortization and impairment of purchased intangible assets, stock based compensation expenses and certain other items.
The Company manages its assets on a group basis, not by segments, as many of its assets are shared or co-mingled. The Company’s CODM does not regularly review asset information by segments and, therefore, the Company does not report asset information by segment.
The
Company identified
The Solar segment includes the design, development, manufacturing, and sales of an intelligent inverter solution designed to maximize power generation at the individual PV module level and a residential storage solution, compatible with the Company’s energy hub inverter, intended to store and supply power for back-up and to maximize self-consumption. The Solar segment solution consists mainly of the Company’s power optimizers, inverters, batteries and cloud‑based monitoring platform.
F - 51
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
The “All other” category includes the design, development, manufacturing and sales of energy storage products, e-Mobility products, UPS products and automated machines
The following table presents information on reportable segments profit (loss) for the period presented:
|
Year
ended December 31, |
||||||||||||||||||||||||
|
2022
|
2021
|
2020
|
||||||||||||||||||||||
|
Solar
|
All
other |
Solar
|
All
other |
Solar
|
All
other |
|||||||||||||||||||
|
Revenues
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
|
Cost of revenues
|
|
|
|
|
|
|
||||||||||||||||||
|
Gross profit
|
|
|
|
|
|
|
||||||||||||||||||
|
Research and development
|
|
|
|
|
|
|
||||||||||||||||||
|
Sales and marketing
|
|
|
|
|
|
|
||||||||||||||||||
|
General and administrative
|
|
|
|
|
|
|
||||||||||||||||||
|
Segments profit (loss)
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
| |||||||||
The following table presents information on reportable segments reconciliation to consolidated revenues for the periods presented:
|
|
Year ended December 31, | |||||||||||
|
|
2022 |
2021 |
2020 |
|||||||||
|
Solar segment revenues |
$ | $ | $ | |||||||||
|
All other segment revenues |
||||||||||||
|
Revenues from financing component |
||||||||||||
|
Inter-segment revenues |
( |
) | ||||||||||
|
Consolidated revenues |
$ | $ | $ | |||||||||
The following table presents information on reportable segments reconciliation to consolidated operating income for the periods presented:
|
Year
ended December 31, |
||||||||||||
|
2022
|
2021
|
2020
|
||||||||||
|
Solar segment profit
|
$
|
|
$
|
|
$
|
|
||||||
|
All other segment loss
|
(
|
)
|
(
|
)
|
(
|
)
| ||||||
|
Segments operating profit
|
|
|
|
|||||||||
|
Amounts not allocated
to segments: |
||||||||||||
|
Stock
based compensation expenses |
(
|
)
|
(
|
)
|
(
|
)
| ||||||
|
Amortization
and depreciation of acquired assets |
(
|
)
|
(
|
)
|
(
|
)
| ||||||
|
Impairment
of goodwill and long-lived assets |
(
|
)
|
|
|
||||||||
|
Disposal
of assets related to Critical Power |
(
|
)
|
|
|
||||||||
|
Other
unallocated income (expenses), net |
|
(
|
)
|
|
||||||||
|
Consolidated operating
income |
$
|
|
$
|
|
$
|
|
||||||
F - 52
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
b. Revenues by geographic, based on Customers’ location:
|
|
Year ended December 31, | |||||||||||
|
|
2022 |
2021 |
2020 |
|||||||||
|
United States |
$ | $ | $ | |||||||||
|
Europe(*) |
||||||||||||
|
Germany |
|
|
|
|||||||||
|
Netherlands |
||||||||||||
|
Italy |
|
|
|
|||||||||
|
Rest of the world |
||||||||||||
|
Total revenues |
$ | $ | $ | |||||||||
(*) Except for Germany, Netherlands and Italy
c. Revenues by type:
|
Year
ended December 31, |
||||||||||||
|
2022
|
2021
|
2020
|
||||||||||
|
Inverters
|
$
|
|
$
|
|
$
|
|
||||||
|
Optimizers
|
|
|
|
|||||||||
|
Residential batteries
|
|
|
|
|||||||||
|
e-Mobility
components and telematics |
|
|
|
|||||||||
|
Communication
|
|
|
|
|||||||||
|
Others
|
|
|
|
|||||||||
|
Total
revenues |
$
|
|
$
|
|
$
|
|
||||||
d. Long-lived assets by geographic location:
|
As
of December 31, |
||||||||
|
2022
|
2021
|
|||||||
|
Israel
|
$
|
|
$
|
|
||||
|
Korea
|
|
|
||||||
|
China
|
|
|
||||||
|
Europe
|
|
|
||||||
|
Other
|
|
|
||||||
|
Total long-lived assets(*)
|
$
|
|
$
|
|
||||
(*) Long-lived assets are comprised of property and equipment, net and Operating lease right-of-use assets, net.
F - 53
SOLAREDGE TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(in thousands, except per share data)
NOTE 26: SUBSEQUENT EVENTS
In January 2023, the Company entered into an agreement to acquire Hark Systems Ltd. ("Hark"), a UK-based energy IoT company for the C&I sector. Hark's platform will enable the Company to grow its commercial and industrial energy management portfolio and offer additional services to its C&I customers. The acquisition is still subject to certain customary closing conditions and regulatory approvals and is expected to close during the second quarter of 2023.
F - 54
|
Exhibit
No. |
|
Description |
|
Incorporation by Reference |
|
Incorporated by reference to Exhibit 4.1 to Form S-8 (Registration No. 333-203193)
filed with the SEC on April 2, 2015 | ||||
|
Incorporated by reference to Exhibit 3.1 to Form 8-K filed with the SEC on December 1,
2022 | ||||
|
filed with this report | ||||
|
Incorporated by reference to Exhibit 4.1 of Amendment No. 1 to Form S-1 (Registration
No. 333-202159) filed with the SEC on March 11, 2015 | ||||
|
Incorporated by reference to Exhibit 4.1 to Form 8-K filed with the SEC on September
25, 2020 | ||||
|
Incorporated by reference to Exhibit 4.2 to Form 8-K filed with the SEC on September
25, 2020 | ||||
|
Incorporated by reference to Exhibit 10.1 to Form 8-K filed with the SEC on August 21,
2019 | ||||
|
Incorporated by reference to Exhibit 10.3 of Amendment No. 1 to Form S-1 (Registration No. 333-202159) filed
with the SEC on March 11, 2015 | ||||
|
Incorporated by reference to Exhibit 10.3 of Amendment No. 1 to Form S-1 (Registration
No. 333-202159) filed with the SEC on March 11, 2015 | ||||
|
Incorporated by reference to Exhibit 99.3 to Form S-8 (Registration No. 333-203193) filed
with the SEC on April 2, 2015 | ||||
|
Incorporated by reference to Exhibit 99.1 to Form S-8 (Registration No. 333-203193) filed
with the SEC on April 2, 2015 | ||||
|
Incorporated by reference to Exhibit 99.2 to Form S-8 (Registration No. 333-203193)
filed with the SEC on April 2, 2015 | ||||
|
Incorporated by reference to Exhibit 10.11 to Form 10-K filed with the SEC on August
20, 2015 | ||||
|
Incorporated by reference to Exhibit 10.12 to Form 10-K filed with the SEC on August
20, 2015 | ||||
|
Incorporated by reference to Exhibit 10.13 to Form 10-K filed with the SEC on August
20, 2015 |
|
Incorporated by reference to Exhibit 10.14 to Form 10-K filed with the SEC on August
20, 2015 | ||||
|
Filed with this report. | ||||
|
Filed with this report. | ||||
|
Filed with this report. | ||||
|
Filed with this report. | ||||
|
|
Filed with this report. | |||
|
|
Filed with this report. | |||
|
|
Filed with this report. | |||
|
|
Filed with this report. | |||
|
101.INS |
|
XBRL Instance Document - - embedded within the Inline XBRL document |
|
Filed with this report. |
|
101.SCH |
|
XBRL Taxonomy Extension Schema Document |
|
Filed with this report. |
|
101.CAL |
|
XBRL Taxonomy Extension Calculation Linkbase Document |
|
Filed with this report. |
|
101.DEF |
|
XBRL Taxonomy Extension Definition Linkbase Document |
|
Filed with this report. |
|
101.LAB |
|
XBRL Taxonomy Extension Label Linkbase Document |
|
Filed with this report. |
|
101.PRE |
|
XBRL Taxonomy Extension Presentation Linkbase Document |
|
Filed with this report. |
|
104 |
Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline
XBRL document. |
Filed with this report. |
|
By: |
/s/ Zvi Lando |
|
Name: |
Zvi Lando |
|
Title: |
Chief Executive Officer |
|
Date: |
February 22, 2023 |
|
Signature |
Title |
Date |
|
/s/Zvi Lando |
Chief Executive Officer and Director (Principal Executive
Officer) |
February 22, 2023 |
|
/s/Ronen Faier |
Chief Financial Officer (Principal Financial and Accounting
Officer) |
February 22, 2023 |
|
/s/Nadav Zafrir |
Chairman of the Board |
February 22, 2023 |
|
/s/Dirk Hoke |
Director |
February 22, 2023 |
|
/s/Marcel Gani |
Director |
February 22, 2023 |
|
/s/Avery More |
Director |
February 22, 2023 |
|
/s/Tal Payne |
Director |
February 22, 2023 |
|
/s/Betsy Atkins |
Director |
February 22, 2023 |
|
◦
|
the provision requiring a 662/3% supermajority vote for stockholders to amend our Bylaws;
|
|
◦
|
the provisions providing for a classified board of directors (the election and term of our directors);
|
|
◦
|
the provisions regarding removal of directors;
|
|
◦
|
the provisions regarding stockholder action by written consent;
|
|
◦
|
the provisions regarding calling special meetings of stockholders;
|
|
◦
|
the provisions regarding advanced notification of stockholder nominations and proposals;
|
|
◦
|
the provisions regarding filling vacancies on our board of directors and newly created directorships;
|
|
◦
|
the provisions eliminating monetary damages for breaches of fiduciary duty by a director and governing forum selection; and
|
|
◦
|
the amendment provision requiring that the above
provisions be amended only with a 662/3% supermajority vote.
|
|
◦
|
prior to such time the board of directors of the corporation approved either the business combination or transaction which
resulted in the stockholder becoming an interested stockholder;
|
|
◦
|
upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding shares owned by persons who are directors and also officers and employee stock plans in which participants
do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer;
|
|
◦
|
at or subsequent to such time, the business combination is approved by the board of directors and authorized at an annual or
special meeting of stockholders, and not by written consent; or
|
|
◦
|
by the affirmative vote of 662/3% of the outstanding voting stock which is not owned by the interested
stockholder.
|
|
Company TSR Percentile Rank within the Index Group
|
Applicable Percentage
|
|
|
Less than 25th
|
0%
|
|
|
Threshold
|
25th
|
25%
|
|
Target
|
50th
|
100%
|
|
Maximum
|
75th or higher
|
150%
|
|
Name
|
Jurisdiction of organization
|
|
SolarEdge Technologies Ltd.
|
Israel
|
|
SolarEdge Manufacturing Ltd.
|
Israel
|
|
SolarEdge Technologies GmbH
|
Germany
|
|
SOLAREDGE TECHNOLOGIES (CHINA) CO., LTD
|
China
|
|
SolarEdge Technologies (Australia) PTY LTD
|
Australia
|
|
SolarEdge Technologies (Canada) Ltd.
|
Canada
|
|
SolarEdge Technologies (Holland) B.V.
|
The Netherlands
|
|
SolarEdge Technologies (Japan) Co., Ltd.
|
Japan
|
|
SolarEdge Technologies (France) SARL.
|
France
|
|
SolarEdge Technologies (UK) Ltd.
|
United Kingdom
|
|
SOLAREDGE TECHNOLOGIES ITALY S.R.L.
|
Italy
|
|
SolarEdge Automation Machines s.p.a.
|
Italy
|
|
SolarEdge e-Mobility s.p.a
|
Italy
|
|
SolarEdge Investment srl
|
Italy
|
|
SolarEdge Technologies (Bulgaria) Ltd.
|
Bulgaria
|
|
Guangzhou SolarEdge Machinery Technical Consulting Co.Ltd
|
China
|
|
SOLAREDGE TEKNOLOJİ A.Ş.
|
Turkey
|
|
SolarEdge Technologies (Belgium) SPRL
|
Belgium
|
|
SolarEdge Technologies SRL.
|
Romania
|
|
SOLAREDGE TECHNOLOGIES (INDIA) PRIVATE LIMITED
|
India
|
|
SolarEdge Technologies (Sweden) AB
|
Sweden
|
|
SolarEdge Technologies Taiwan Co., Ltd.
|
Taiwan
|
|
SolarEdge Technologies Korea Co., Ltd.
|
South Korea
|
|
Kokam Limited Company
|
South Korea
|
|
SolarEdge Critical Power U.K. Limited
|
United Kingdom
|
|
SOLAREDGE DO BRASIL SERVIÇOS DE
MARKETING E APOIO AO CLIENTE LTDA.
|
Brazil
|
|
SolarEdge Technologies (Vietnam) Company Limited
|
Vietnam
|
|
SolarEdge Technologies (Hungary) Kft.
|
Hungary
|
|
SolarEdge Technologies (Poland) Sp. z o.o
|
Poland
|
|
SolarEdge E-Mobility Germany GmbH & Co. KG
|
Germany
|
|
SolarGik, Ltd.
|
Israel
|
|
SolarEdge Technologies Mexico S.DE R.L. DE C.V.
|
Mexico
|
|
SolarEdge Technologies Consulting Inc.
|
USA
|
|
SolarEdge Technologies Holding Inc.
|
USA
|
|
SolarEdge Technologies (Switzerland) GMBH
|
Switzerland
|
|
SolarEdge Technologies (Spain) Sociedada Limitada
|
Spain
|
|
Kost Forer Gabbay & Kasierer
|
|
A Member of Ernst & Young Global
|
|
Tel-Aviv, Israel
|
|
February 22, 2023
|
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Allowances of trade receivable | $ 3,202 | $ 2,626 |
| Common stock, par value | $ 0.0001 | $ 0.0001 |
| Common stock, authorized shares | 125,000,000 | 125,000,000 |
| Common stock, issued shares | 56,133,404 | 52,815,395 |
| Common stock, outstanding shares | 56,133,404 | 52,815,395 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Consolidated Statements Of Comprehensive Income Loss [Abstract] | |||
| Net income | $ 93,779 | $ 169,170 | $ 140,322 |
| Other comprehensive income (loss), net of tax: | |||
| Net change related to available-for-sale securities | (20,740) | (4,949) | (24) |
| Net change related to cash flow hedges | (2,635) | 874 | 0 |
| Foreign currency translation adjustments on intra-entity transactions that are of a long-term investment nature | (20,540) | (17,420) | 0 |
| Foreign currency translation adjustments, net | (1,875) | (9,681) | 5,690 |
| Total other comprehensive income (loss) | (45,790) | (31,176) | 5,666 |
| Comprehensive income | $ 47,989 | $ 137,994 | $ 145,988 |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) $ in Thousands |
12 Months Ended |
|---|---|
|
Dec. 31, 2022
USD ($)
| |
| Statement of Stockholders' Equity [Abstract] | |
| Underwriters discounts and commissions | $ 27,140 |
| Offering costs | $ 834 |
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Cash flows from operating activities: | |||
| Net income | $ 93,779 | $ 169,170 | $ 140,322 |
| Adjustments to reconcile net income to net cash provided by operating activities: | |||
| Depreciation of property, plant and equipment | 40,580 | 29,359 | 22,355 |
| Amortization of intangible assets | 9,096 | 10,176 | 9,479 |
| Amortization of debt discount and debt issuance costs | 2,916 | 2,903 | 3,185 |
| Amortization of premium and accretion of discount on available-for-sale marketable securities, net | 9,310 | 9,462 | 1,168 |
| Impairment of goodwill and intangible assets | 118,492 | 0 | 0 |
| Stock-based compensation expenses | 145,539 | 102,593 | 67,309 |
| Gain from sale of privately held company | (7,719) | 0 | 0 |
| Deferred income taxes, net | (11,055) | (12,045) | (2,738) |
| Exchange rate fluctuations and other items, net | 10,052 | 20,697 | 3,860 |
| Changes in assets and liabilities: | |||
| Inventories, net | (341,085) | (43,051) | (149,661) |
| Prepaid expenses and other assets | (64,991) | (39,444) | (3,276) |
| Trade receivables, net | (457,610) | (247,723) | 86,538 |
| Trade payables, net | 194,524 | 91,709 | 3,333 |
| Employees and payroll accruals | 26,238 | 26,519 | 18,315 |
| Warranty obligations | 120,169 | 60,524 | 32,274 |
| Deferred revenues and customers advances | 44,376 | 29,936 | (21,438) |
| Accrued expenses and other liabilities, net | 98,673 | 3,344 | 11,630 |
| Net cash provided by operating activities | 31,284 | 214,129 | 222,655 |
| Cash flows from investing activities: | |||
| Proceed from sales and maturities of available-for-sale marketable securities | 231,210 | 202,188 | 141,839 |
| Purchase of property, plant and equipment | (169,341) | (149,251) | (126,790) |
| Investment in available-for-sale marketable securities | (507,171) | (579,377) | (223,705) |
| Investment in a privately-held company | 0 | (16,643) | 0 |
| Proceeds from sale of a privately-held company | 24,362 | 0 | 0 |
| Withdrawal from (investment in) bank deposits, net | 0 | 60,096 | (54,752) |
| Withdrawal from (investment in) restricted bank Deposits, net | (242) | 798 | 25,267 |
| Other investing activities | 4,138 | (2,022) | 1,504 |
| Net cash used in investing activities | (417,044) | (484,211) | (236,637) |
| Cash flows from financing activities: | |||
| Proceeds from secondary public offering, net of issuance costs | 650,526 | 0 | 0 |
| Repayment of bank loans | (138) | (16,073) | (15,595) |
| Proceeds from exercise of stock-based award | 4,030 | 6,486 | 16,671 |
| Tax withholding in connection with stock-based awards, net | 3,023 | (4,283) | 4,829 |
| Proceeds from issuance of convertible senior notes, net | 0 | 0 | 617,869 |
| Proceeds from bank loans | 0 | 0 | 16,944 |
| Other financing activities | (2,834) | (1,308) | (234) |
| Net cash provided by (used in) financing activities | 654,607 | (15,178) | 640,484 |
| Increase (decrease) in cash and cash equivalents | 268,847 | (285,260) | 626,502 |
| Cash and cash equivalents at the beginning of the period | 530,089 | 827,146 | 223,901 |
| Effect of exchange rate differences on cash and cash equivalents | (15,824) | (11,797) | (23,257) |
| Cash and cash equivalents at the end of the period | 783,112 | 530,089 | 827,146 |
| Supplemental disclosure of non-cash activities: | |||
| Right-of-use asset recognized with corresponding lease liability | 46,004 | 20,526 | 29,623 |
| Purchase of property, plant and equipment | 16,016 | 10,781 | 5,612 |
| Supplemental disclosure of cash flow information: | |||
| Cash paid for income taxes | $ 74,689 | $ 45,977 | $ 38,990 |
GENERAL |
12 Months Ended |
|---|---|
Dec. 31, 2022 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| GENERAL |
NOTE
1: GENERAL
SolarEdge Technologies, Inc. (the “Company”) and its subsidiaries design, develop, and sell an intelligent inverter solution designed to maximize power generation at the individual photovoltaic (“PV”) module level while lowering the cost of energy produced by the solar PV system and providing comprehensive and advanced safety features. The Company’s products consist mainly of (i) power optimizers designed to maximize energy throughput from each and every module through constant tracking of Maximum Power Point individually per module, (ii) inverters which invert direct current (DC) from the PV module to alternating current (AC) including the Company's future ready energy hub inverter which supports among other things, connection to a DC - coupled battery for backup capabilities, (iii) a remote cloud-based monitoring platform, that collects and processes information from the power optimizers and inverters to enable customers and system owners, to monitor and manage the solar PV system (iv) a residential storage and backup solution that is used to increase energy independence and maximize self-consumption for homeowners including a battery ,and (v) additional smart energy management solutions. The Company and its subsidiaries sell products worldwide through large distributors, electrical equipment wholesalers, as well as directly to large solar installers and engineering, procurement and construction firms. The Company has expanded its activity to other areas of smart energy technology organically and through acquisitions. The Company now offers a variety of energy solutions, which include lithium-ion cells, batteries and energy storage systems (“Energy Storage”), full powertrain kits for electric vehicles, or EVs (“e-Mobility”), as well as automated machines for industrial use (“Automation Machines”). In June 2022, the Company decided to discontinue its stand-alone uninterrupted power supply solutions or UPS (“Critical Power”). The Company determined that the discontinuance of the Critical Power business does not represent a strategic shift that will have a major effect on the Company's operations and financial results and therefore it did not meet the criteria for discontinued operations classification. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The
consolidated financial statements are prepared according to United States generally accepted accounting principles (“U.S. GAAP”).
a.Principles
of consolidation:
The
consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany transactions and balances including
profit from intercompany sales not yet realized outside the Company have been eliminated upon consolidation.
b.Use
of estimates:
The
preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets, liabilities, revenues, costs and expenses and related disclosures in the accompanying notes. The duration, scope and
effects of the ongoing Covid-19 pandemic and the conflict in Ukraine, government and other third-party responses to it, and the related
macroeconomic effects, including to the Company’s business and the business of the Company’s suppliers and customers are uncertain,
rapidly changing and difficult to predict. As a result, the Company’s accounting estimates and assumptions may change over time
in response to this evolving situation. Such changes could result in future impairments of goodwill, intangibles, long-lived assets, inventories,
incremental credit losses on receivables and available-for-sale marketable debt securities, or an increase in the Company’s insurance
liabilities as of the time of a relevant measurement event.
c.Financial
statements in U.S. dollars:
A
major part of the Company’s operations is carried out in the United States, Israel and certain other countries. The functional currency
of these entities is the U.S. dollar. Financing activities, including cash investments are primarily made in U.S. dollars.
Accordingly,
monetary accounts maintained in currencies other than the U.S. dollar are translated into U.S. dollars in accordance with Financial Accounting
Standards Board Accounting Standards Codification (“ASC”) No. 830 “Foreign Currency Matters”. All transaction
gains and losses of the re-measurement of monetary balance sheet items are reflected in the statements of income as financial income or
expenses, as appropriate.
The
financial statements of other Company’s subsidiaries whose functional currency is other than the U.S. dollar have been translated
into U.S dollars. Assets and liabilities have been translated using the exchange rates in effect as of the balance sheet date. Statements
of income amounts have been translated using the date of the transaction or at the average exchange rate to for the relevant period.
The
resulting translation adjustments are reported as a component of stockholders’ equity in accumulated other comprehensive income
(loss). Gains and losses arising from intercompany foreign currency transactions that are of a long-term investment in nature are reported
in the same manner as translation adjustments. d.Cash
and cash equivalents:
Cash
equivalents are short-term, highly liquid investments that are readily convertible to cash, with original maturities of three months or
less at the date acquired.
e.Short-term
bank deposits:
Short-term
bank deposits are deposits with an original maturity of more than three months and less than a year from the date of investment and which
do not meet the definition of cash equivalents. The deposits are presented according to their term deposits.
f.Restricted
bank deposits:
Short-term
restricted bank deposits possess an original maturity of more than three months and less than a year from the date of investment. Long-term
restricted bank deposits possess an original maturity of more than one year from the date of investment. Restricted bank deposits are
primarily used as collateral for the Company's office leases and credit cards.
g.Marketable
Securities:
Marketable
securities consist of corporate and governmental bonds. The Company determines the appropriate classification of marketable securities
at the time of purchase and re-evaluates such designation at each balance sheet date. In accordance with FASB ASC No. 320 “Investments
- Debt and Equity Securities”, the Company classifies marketable securities as available-for-sale.
Available-for-sale
("AFS") securities are stated at fair value, with unrealized gains and losses reported in accumulated other comprehensive income (loss),
a separate component of stockholders’ equity, net of taxes. Realized gains and losses on sales of marketable securities, as determined
on a specific identification basis, are included in financial income (expenses), net. The amortized cost of marketable securities is adjusted
for amortization of premium and accretion of discount to maturity, both of which, together with interest, are included in financial income
(expenses), net.
The
Company classifies its marketable securities as either short-term or long-term based on each instrument’s underlying contractual
maturity date. Marketable securities with maturities of 12 months or less are classified as short-term and marketable securities with
maturities greater than 12 months are classified as long-term.
On
each reporting period, the Company evaluates whether declines in fair value below carrying value are due to expected credit losses, as
well as the ability and intent to hold the investment until a forecasted recovery occurs, in accordance with ASC 326. Allowance for credit
losses on AFS debt securities are recognized as a charge in financial income (expenses), net, on the consolidated statements of income,
and any remaining unrealized losses, net of taxes, are included in accumulated other comprehensive income (loss) in stockholders' equity.
The
Company has not recorded credit losses for the years ended December 31, 2022, 2021 and 2020.
The
Company determines realized gains or losses on sale of marketable securities on a specific identification method and records such gains
or losses in financial income (expenses), net on the consolidated statements of income. h.Investment
in privately-held companies:
The
Company's equity investments are investments in equity securities of privately-held companies, that are not traded and therefore not supported
with observable market prices. The Company elected to account for its equity investments without readily determinable market values that
either (i) do not meet the definition of in-substance common stock or (ii) do not provide the Company with control or significant influence
using Accounting Standards Update (“ASU”) 2016-01.
The Company adjusts the carrying value of its investments to fair value upon observable transactions for identical or similar investments of the same issuer. The
Company periodically evaluates the carrying value of the investments in privately-held companies when events and circumstances indicate
that the carrying amount of the investment may not be recovered. The maximum loss the Company can incur for its investments is their carrying
value.
The
Company may determine the fair value by reviewing equity valuation reports, current financial results, long-term plans of the privately-held
companies, the amount of cash that the privately-held companies have on-hand, the ability to obtain additional financing and overall market
conditions in which the privately-held companies operate or based on the price observed from the most recent completed financing.
All
gains and losses on investments in privately-held companies, realized and unrealized, are recognized in other income.
i.Trade
receivables:
Trade
receivables are stated net of credit losses allowance. The Company is exposed to credit losses primarily through sales of products. The
allowance against gross trade receivables reflects the current expected credit loss inherent in the receivables portfolio determined based
on the Company’s methodology. The Company’s methodology is based on historical collection experience, customer creditworthiness,
current and future economic condition and market condition. Additionally, specific allowance amounts are established to record the appropriate
provision for customers that have a higher probability of default. Trade receivables are written off after all reasonable means to collect
the full amount have been exhausted.
The
following table provides a roll-forward of the allowance for credit losses that is deducted from the amortized cost basis of trade receivables
to present the net amount expected to be collected:
j.Inventories: Inventories are stated at the lower of cost or net realizable value. Cost includes depreciation, labor, material and overhead costs. Inventory reserves are provided to cover risks arising from slow-moving items or technological obsolescence. The Company periodically evaluates the quantities on hand relative to historical, current and projected sales volume. Based on this evaluation, an impairment charge is recorded when required to write-down inventory to its net realizable value. Cost of finished goods and raw materials is determined using the moving average cost method. k.Property,
plant and equipment:
Property,
plant and equipment are stated at cost, net of accumulated depreciation and government grants. Assets under construction represent the
construction or development stage of property and equipment that have not yet been placed in service for the Company's intended use. Depreciation
is calculated by the straight-line method over the estimated useful life of the assets, at the following rates:
l. Government assistance In 2020, SolarEdge Ltd, a wholly owned subsidiary of the Company, entered into an agreement with the Israeli Ministry of Economy and Industry to partially subsidize the construction of Sella 1, a factory for production of inverters and optimizers, in the amount of approximately $7,000. In 2020, SolarEdge Korea (formerly Kokam), a wholly owned subsidiary of the Company, entered into an agreement with Chungcheongbuk-do province of South Korea to partially subsidize the construction of Sella 2, a factory for production of lithium-ion cells and batteries, in the amount of approximately $12,000. The assistance
is in the form of a cash subsidy, which the government will pay as a grant upon the satisfaction of predetermined construction completion
milestones. When the defined milestones are reached and the right to receive a subsidy amount becomes virtually certain, the amount of
the grant is recorded as a reduction of the related asset's value under “Property, plant and equipment, net”.
The
Company recorded reduction of property, plant and equipment in the amount of $7,359
and $4,842
for the years ended December 31, 2022 and 2021, respectively.
As
of December 31, 2022, the Company has a right to receive of $9,233
that has yet to be paid which was recorded under “Prepaid expenses and other current assets”.
m.Leases: The
Company determines if an arrangement is a lease at inception. Contracts containing a lease are further evaluated for classification as
an operating or finance lease. In determining the leases classification the Company assesses among other criteria: (i) 75% or more of
the remaining economic life of the underlying asset is a major part of the remaining economic life of that underlying asset; and (ii)
90% or more of the fair value of the underlying asset comprises substantially all of the fair value of the underlying asset. Operating
leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities and long-term operating lease
liabilities in the Company’s consolidated balance sheets. Finance leases are included in property, plant and equipment, net, other
current liabilities, and long-term finance lease liabilities in the Company’s consolidated balance sheets. ROU assets represent
the right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments
arising from the lease. For leases with terms greater than 12 months, the Company records the ROU asset and liability at commencement
date based on the present value of lease payments according to their term.
The
Company uses incremental borrowing rates based on the estimated rate of interest for collateralized borrowing over a similar term of the
lease payments at commencement date. The ROU asset also includes any lease payments made and excludes lease incentives. Lease terms may
include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expenses
are recognized on a straight-line basis over the lease term or the useful life of the leased asset.
In
addition, the carrying amount of the ROU and lease liabilities are remeasured if there is a modification, a change in the lease term,
a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset.
n.Business
Combination:
The
Company allocates the fair value of the purchase price to the tangible assets acquired, liabilities assumed and intangible assets acquired
based on their estimated fair value. The excess of the fair value of the purchase price over the fair values of these identifiable assets
and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially
with respect to intangible assets.
Significant
estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired technology and
discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently
uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which does not
exceed one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the
corresponding offset to goodwill. Upon the finalization of the measurement period, any subsequent adjustments are recorded to earnings.
o.Intangible
Assets: Acquired
identifiable finite-lived intangible assets are amortized on a straight-line basis or accelerated method over the estimated useful lives
of the assets. The basis of amortization approximates the pattern in which the assets are utilized, over their estimated useful lives.
The Company routinely reviews the remaining estimated useful lives of finite-lived intangible assets. In case the Company reduces the
estimated useful life for any asset, the remaining unamortized balance is amortized or depreciated over the revised estimated useful life
(see Note 8). p.Impairment
of long-lived assets: The Company’s long-lived assets to be held and used, including ROU assets and identifiable intangible assets that are subject to amortization, other than goodwill, are reviewed for impairment in accordance with ASC 360 “Property, Plants and Equipment”, whenever events or changes in circumstances indicate that the carrying amount of an asset (or asset group) may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset (or asset group) to the future undiscounted cash flows expected to be generated by the assets (or asset group). If such evaluation indicates that the carrying amount of the asset (or asset group) is not recoverable, the assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds their fair value (see Note 8). For the years ended December 31, 2022, 2021 and 2020, the Company recorded impairment charges of $29,037, $2,209 and $1,471, under Goodwill impairment and other operating expenses (income), net, respectively. q.Goodwill:
Goodwill
reflects the excess of the consideration transferred, including the fair value of any contingent consideration and any non-controlling
interest in the acquiree, over the assigned fair values of the identifiable net assets acquired. Goodwill is not amortized, and is assigned
to reporting units and tested for impairment at least on an annual basis, in the fourth quarter of the fiscal year.
The
goodwill impairment test is performed according to the following principles:
For
the year ended December 31, 2022, the Company recorded impairment charges of goodwill in the amount of $90,104.
For the years ended December 31, 2021 and 2020, the Company did not record any impairment charges. r.Cloud
computing arrangements:
In 2021, due to the growing size and complexity of the Company, the Company decided to implement a new global enterprise resource planning ("ERP") system, which will replace the Company's existing operating and financial systems. During the year ended December 31, 2022, the Company began implementing a cloud-based ERP system. The implementation is expected to occur in phases over the next several years. The Company incurs costs to implement cloud computing arrangements ("CCA") that are hosted by third party vendors. Implementation costs associated with CCA are capitalized when incurred during the application development phase until the software is ready for its intended use. The costs are then amortized on a straight-line basis over the contractual term of the cloud computing arrangement and are recognized as an operating expense within the consolidated statements of income. Capitalized amounts related to such arrangements are recorded within other long-term assets in the consolidated balance sheets. Cash payments for CCA implementation costs are classified as cash outflows from operating activities. For the year ended December 31, 2022, the Company has capitalized implementation costs related to its upcoming ERP conversion in the amount of $3,457 and presented it under other long-term assets in the consolidated balance sheet. s.Severance
pay:
The
employees of the Company’s Israeli subsidiary are included under Section 14 of the Severance Pay Law, 1963, under which these employees
are entitled only to monthly deposits made in their name with insurance companies, at a rate of 8.33% of their monthly salary. These payments
cause the Company to be released from any future obligation under the Israeli Severance Pay Law to make severance payments in respect
of those employees; therefore, related assets and liabilities are not presented in the consolidated balance sheets.
If applicable, severance costs are recorded in each entity in accordance with local laws and regulations. For
the years ended December 31, 2022, 2021 and 2020, the Company recorded $17,202,
$14,231
and $10,598 in
severance expenses related to its employees, respectively.
t.Derivatives
and Hedging:
The
Company accounts for derivatives and hedging based on ASC 815 (“Derivatives and Hedging”). ASC 815 requires the Company to
recognize all derivatives on the balance sheet at fair value. The accounting for changes in the fair value (i.e., gains or losses) of
a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the
type of hedging relationship.
To
protect against the increase in value of forecasted foreign currency cash flows resulting from salary denominated in the Israeli currency,
the New Israeli Shekels (“NIS”), during the year ended December 31, 2022, the Company instituted a foreign currency cash flow
hedging program whereby portions of the anticipated payroll denominated in NIS for a period of one to nine months with hedging contracts.
Accordingly,
when the dollar strengthens against the NIS, the decline in present value of future foreign currency expenses is offset by losses in the
fair value of the hedging contracts. Conversely, when the dollar weakens, the increase in the present value of future foreign currency
cash flows is offset by gains in the fair value of the hedging contracts. These hedging contracts are designated as cash flow hedges,
as defined by ASC 815 and are all effective hedges.
The Company also entered into derivative instrument arrangements to hedge the Company’s exposure to currencies other than the U.S. dollar. These derivative instruments are not designated as cash flow hedges, as defined by ASC 815, and therefore all gains and losses, resulting from fair value remeasurement, were recorded immediately in the statement of income, as a financial income (expense), net.. The Company classifies cash flows related to its hedging as operating activities in its consolidated statement of cash flows. u.Revenue
recognition:
Revenues
are recognized in accordance with ASC 606; revenue from contracts with customers is recognized when control of the promised goods or services
is transferred to the customers, in an amount that the Company expects in exchange for those goods or services.
The
Company’s products and services consist mainly of (i) power optimizers, (ii) inverters, (iii) residential batteries, (iv) a related
cloud-based monitoring platform, (v) communication services, (vi) warranty extension services, (vii) Lithium-ion cells and other storage
solutions (viii) EV components, and (ix) automated machinery for manufacturing lines.
The
Company recognizes revenue under the core principle that transfer of control to the Company’s customers should be depicted in an
amount reflecting the consideration the Company expects to receive in revenue. In
order to achieve that core principle, the Company applies the following five-step approach: (1) identify the contract with a customer,
(2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the
performance obligations in the contract, and (5) recognize revenue when the performance obligation is satisfied.
(1)Identify
the contract with a customer
A
contract is an agreement or purchase order between two or more parties that creates enforceable rights and obligations. In evaluating
the contract, the Company analyzes the customer’s intent and ability to pay the amount of promised consideration (credit risk) and
considers the probability of collecting substantially all of the consideration.
The
Company determines whether collectability is reasonably assured on a customer-by-customer basis pursuant to its credit review policy.
The Company typically sells to customers with whom it has a long-term business relationship and a history of successful collection. For
a new customer, or when an existing customer substantially expands its commitments, the Company evaluates the customer’s financial
position, the number of years the customer has been in business, the history of collection with the customer, and the customer’s
ability to pay, and typically assigns a credit limit based on that review.
(2)Identify
the performance obligations in the contract
At
a contract’s inception, the Company assesses the goods or services promised in a contract with a customer and identifies the performance
obligations. The main performance obligations are the provisions of the following: providing of the Company’s products; cloud based
monitoring services; extended warranty services and communication services. Depending on the shipping terms agreed with the customer,
the Company may perform shipping and handling activities after the customer obtains control of the goods and revenue is recognized. The
Company has elected to account for shipping and handling costs as activities to fulfill the promise to transfer the goods. As a result
of this accounting policy election, the Company does not consider shipping and handling activities after the customer obtains control
of the goods as promised services to its customers.
(3)Determine
the transaction price
The
transaction price is the amount of consideration to which the Company is entitled in exchange for transferring promised goods or services
to a customer, excluding amounts collected on behalf of third parties. Generally, the Company does not provide price protection, stock
rotation, and/or right of return. The Company determines the transaction price for all satisfied and unsatisfied performance obligations
identified in the contract from contract inception to the beginning of the earliest period presented. Rebates or discounts on goods or
services are accounted for as variable consideration. The rebate or discount program is applied retrospectively for future purchases.
Provisions for rebates, sales incentives, and discounts to customers are accounted for as reductions in revenue in the same period the
related sales are recorded.
Accrual
for rebates for direct customers is presented net of receivables. Accrual for sale incentives related to non-direct customers is presented
under accrued expenses and other current liabilities. The Company accrued $176,706
and $152,717
for rebates and sales incentives as of December 31, 2022 and 2021, respectively. When
a contract provides a customer with payment terms of more than a year, the Company considers whether those terms create variability in
the transaction price and whether a significant financing component exists.
As
of December 31, 2022, the Company has not provided payment terms of more than a year.
The
performance obligations that extend for a period greater than one year are those that include a financial component: (i) warranty extension
services, (ii) cloud-based monitoring, and (iii) communication services. The Company recognizes financing component expenses in its consolidated
statement of income in relation to advance payments for performance obligations that extend for a period greater than one year. These
financing component expenses are reflected in the Company’s deferred revenues balance.
(4)Allocate
the transaction price to the performance obligations in the contract
The
Company performs an allocation of the transaction price to each separate performance obligation, in proportion to their relative standalone
selling prices.
(5)Recognize
revenue when a performance obligation is satisfied
Revenue
is recognized when or as performance obligations are satisfied by transferring control of a promised good or service to a customer. Control
either transfers over time or at a point in time, which affects when revenue is recorded.
Revenues from sales of products are recognized based on the transfer of control, which includes but is not limited to, the agreed International Commercial terms, or “INCOTERMS”. Revenues related to warranty extension services, cloud-based monitoring, and communication services are recognized over time on a straight-line basis. Deferred
revenues consist of deferred cloud-based monitoring services, communication services, warranty extension services and advance payments
received from customers for the Company’s products. Deferred revenues are classified as short-term and long-term deferred revenues
based on the period in which revenues are expected to be recognized (see Note 14).
v.Cost
of revenues:
Cost
of revenues includes the following: product costs consisting of purchases from contract manufacturers and other suppliers, direct and
indirect manufacturing costs, shipping and handling, support, warranty expenses, provision for losses related to slow moving and dead
inventory, personnel and logistics costs. Shipping
and handling costs, which amounted to $257,753,
$116,574
and $101,597,
for the years ended December 31, 2022, 2021 and 2020, respectively, are included in the cost of revenues in the consolidated statements
of income. Shipping and handling costs include custom tariff charges and all other costs associated with the distribution of finished
goods from the Company’s point of sale directly to its customers. w.Warranty
obligations:
The
Company provides a product warranty for its solar segment related products as follows: a standard 10-year
limited warranty for its residential batteries, a standard 12-year
limited warranty for the majority of its inverters, that is extendable up to 25
years for an additional cost and a 25-year
limited warranty for power optimizers.
The
Company maintains reserves to cover the expected costs that could result from the standard warranty. The warranty liability is in the
form of product replacement and associated costs. Warranty reserves are based on the Company’s best estimate of such costs and are
included in cost of revenues. The reserve for the related warranty expenses is based on various factors including assumptions about the
frequency of warranty claims on product failures, derived from results of accelerated lab testing, field monitoring, analysis of the history
of product field failures, and the Company’s reliability estimates.
The
Company has established a reliability measurement system based on the units’ estimated mean time between failure, or MTBF, a metric
that equates to a steady-state failure rate per year for each product generation. The MTBF predicts the expected failure rate of each
product within the Company's products installed base during the expected product warranted lifetime.
The
Company performs accelerated life cycle testing, which simulates the service life of the product in a short period of time.
The
accelerated life cycle tests incorporate test methodologies derived from standard tests used by solar module vendors to evaluate the period
over which solar modules wear out. Corresponding replacement costs are updated periodically to reflect changes in the Company’s
actual and estimated production costs for its products, rate of usage of refurbished units as a replacement of faulty units, and other
costs related to logistic and subcontractors’ services associated with the replacement products.
In
addition, through the collection of actual field failure statistics, the Company has identified several additional failure causes that
are not included in the MTBF model. Such causes, which mostly consist of design errors, workmanship errors caused during the manufacturing
process and, to a lesser extent, replacement of non-faulty units by installers, result in generating additional replacement costs to the
replacement costs projected under the MTBF model.
For
other products, the Company accrues for warranty costs based on the Company’s best estimate of product and associated costs. The
Company’s other products are sold with a standard limited warranty that typically range in duration from one to ten years.
Warranty
obligations are classified as short-term and long-term obligations based on the period in which the warranty is expected to be claimed.
x.Convertible
senior notes:
Effective
January 1, 2021, the Company early adopted ASU 2020-06 using the modified retrospective approach. The Notes are accounted for as a single
liability measured at its amortized cost, as no other embedded features require bifurcation and recognition as derivatives. Adoption of
the new standard resulted in an increase of retained earnings in the amount of $2,884,
a decrease of an additional paid-in capital in the amount of $36,336,
an increase of convertible senior notes, net, in the amount of $45,282
and a decrease of deferred tax liabilities, net, in the amount of $11,830.
The impact of adoption of this standard on the Company’s earnings per share was immaterial. The
Company’s Convertible Senior Notes are included in the calculation of diluted Earnings Per Share (“EPS”) if the assumed
conversion into common shares is dilutive, using the “if-converted” method. This involves adding back the periodic non-cash
interest expense net of tax associated with the Notes to the numerator and by adding the shares that would be issued in an assumed conversion
(regardless of whether the conversion option is in or out of the money) to the denominator for the purposes of calculating diluted EPS,
unless the Notes are antidilutive (see Note 21). y.Advertising costs
Advertising costs are expensed when incurred and are included in sales and marketing expenses in the consolidated statements of income. The Company incurred advertising expenses of $11,090, $6,323, and $4,199 for the years ended December 31, 2022, 2021, and 2020, respectively. z.Research
and development costs:
Research
and development costs, are charged to the consolidated statement of income as incurred. aa.Concentrations
of credit risks:
Financial
instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, short-term
bank deposits, restricted bank deposits, marketable securities, trade receivables, derivative instruments and other accounts receivable.
Cash
and cash equivalents, short-term bank deposits and restricted bank deposits are mainly invested in major banks in the U.S., Israel, Germany
and Korea. Management believes that the financial institutions that hold the Company’s investments are financially sound and, accordingly,
minimal credit risk exists with respect to these investments.
The
Company's debt marketable securities include investments in highly-rated corporate debentures (located mainly in U.S., Canada, France,
UK, Cayman Islands and other countries) and governmental bonds. The financial institutions that hold
the Company's debt marketable securities are major financial institutions located in the United States. The Company believes its debt
marketable securities portfolio is a diverse portfolio of highly-rated securities and the Company's investment policy limits the amount
the Company may invest in an issuer (see Note 2g.).
The
trade receivables of the Company derive from sales to customers located primarily in the United States and Europe.
The
Company performs ongoing credit evaluations of its customers for the purpose of determining the appropriate allowance for credit losses
(see Note 2i.). The Company generally does not require collaterals, however, in certain circumstances, the Company may require letters
of credit, other collateral, or additional guarantees. From time to time, the Company may purchase trade credit insurance.
The Company
had one major customer (customers with attributable revenues that represents more than 10% of total revenues) for the year ended December
31, 2022, two major customers for the year ended December 31, 2021, and one major customer for the year ended December 31, 2020 that accounted
for approximately 18.5%,
30.9%%
and 14.8%
of the Company’s consolidated revenues, respectively. All of the revenues from these customers were generated in the solar segment.
The Company had three major customers (customer with a balance that represents more than 10% of total trade receivables, net) as of December 31, 2022 and two major customers for the year ended December 31, 2021 that accounted in the aggregate for approximately 42.2% and 39.3%, of the Company’s consolidated trade receivables, net, respectively. ab.Concentrations
of supply risks:
The
Company depends on two contract manufacturers and several limited or single source component suppliers, including, Samsung SDI, that provides
lithium-ion battery cells required for the Company's residential storage solution. Reliance on these vendors makes the Company vulnerable
to possible capacity constraints and reduced control over component availability, delivery schedules, manufacturing yields, and costs.
As
of December 31, 2022 and 2021, two contract manufacturers collectively accounted for 34.3%
and 27.9%
of the Company’s total trade payables, net, respectively.
In
the second quarter of 2022, the Company announced the opening of “Sella 2”, a two gigawatt-hour (GWh) Li-Ion battery cell
manufacturing facility located in South Korea. Sella 2 is in the ramp-up phase, that is expected to continue throughout 2023. Sella
2 is the Company's second owned manufacturing facility following the establishment of Sella 1 in 2020. Sella 1 is the Company's manufacturing
facility in the North of Israel that produces power optimizers and inverters for the Company's solar activities. ac.Fair
value of financial instruments:
The
following methods and assumptions were used by the Company in estimating the fair value of its financial instruments:
The
carrying value of cash and cash equivalents, short-term bank deposits, restricted bank deposits, trade receivables, net, long term bank
loans and current maturities, prepaid expenses and other current assets, trade payables, net, employee and payroll accruals and accrued
expenses and other current liabilities approximate their fair values due to the short-term maturities of such instruments.
Assets
measured at fair value on a recurring basis as of December 31, 2022 and 2021 are comprised of money market funds, derivative
instruments and marketable securities (see Note 12).
The
Company applies ASC 820 “Fair Value Measurements and Disclosures”, with respect to fair value measurements of all financial
assets and liabilities. Fair value is an exit price, representing the amount that would be received for the sale of an asset or paid to
transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should
be determined based on assumptions that market participants would use in pricing an asset or a liability.
A three-tiered fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value: Level
1 -Observable inputs that reflect quoted prices (unadjusted) for identical assets
or liabilities in active markets.
Level
2 -Include other inputs that are directly or indirectly observable in the marketplace.
Level
3 -Unobservable inputs which are supported by little or no market activity.
The
fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when
measuring fair value. ad.Stock-based
compensation:
The
Company uses the closing trading price of its common stock on the day before the grant date as the fair value of awards of restricted
stock units ("RSUs"), and performance stock units that are based on the Company's financial performance targets ("PSUs"). The compensation
expense for RSUs is recognized using a straight-line attribution method over the requisite employee service period while compensation
expense for PSUs is recognized using an accelerated amortization model. The Company estimates the forfeitures at the time of grant and
revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Estimated forfeitures are based on actual
historical pre-vesting forfeitures.
The Company granted under its 2015 Plan, PSU awards to certain employees and officers which vest upon the achievement of certain performance or market conditions subject to their continued employment with the Company.
The market condition for the PSUs is based on the Company’s total shareholder return ("TSR") compared to the TSR of companies listed in the S&P 500 index over a one to three year performance period. The Company uses a Monte-Carlo simulation to determine the grant date fair value for these awards, which takes into consideration the market price of a share of the Company’s common stock on the date of grant less the present value of dividends expected during the requisite service period, as well as the possible outcomes pertaining to the TSR market condition. The Company recognizes such compensation expenses on an accelerated vesting method. The
Company selected the Black-Scholes-Merton option-pricing model as the most appropriate fair value method for its stock-option awards and
Employee Stock Purchase Plan (“ESPP”). The option-pricing model requires a number of assumptions, of which the most significant
are the fair market value of the underlying common stock, expected stock price volatility, and the expected option term. Expected volatility
for stock-option awards and ESPP was calculated based upon the Company’s stock prices. The expected term of options granted is based
upon historical experience and represents the period between the options’ grant date and the expected exercise or expiration date.
The risk-free interest rate is based on the yield from U.S. treasury bonds with an equivalent term. The Company does not use dividend
yield rate since the Company has not declared or paid any dividends on its common stock and does not expect to pay any dividends in the
foreseeable future.
A
modification of the terms of a stock-based award is treated as an exchange of the original award for a new award with total compensation
cost equal to the grant-date fair value of the original award plus the incremental value of the modification to the award.
The fair value for options granted to employees and ESPP in the years ended December 31, 2022, 2021 and 2020, is estimated at the date of grant using the following assumptions:
(1)
No new options were granted in 2022. ae.Earnings
per share
Basic
net EPS is computed by dividing the net earnings attributable to SolarEdge Technologies, Inc. by the weighted-average number of shares
of common stock outstanding during the period.
Diluted
net EPS is computed by giving effect to all potential shares of common stock, to the extent dilutive, including stock options, RSUs, PSUs,
shares to be purchased under the Company’s ESPP, and the Notes due 2025, all in accordance with ASC No. 260, "Earnings Per Share."
af.Income
taxes:
The
Company and its subsidiaries account for income taxes in accordance with ASC 740, “Income Taxes”. ASC 740 prescribes the use
of the liability method, whereby deferred tax asset and liability account balances are determined based on differences between financial
reporting and tax bases of assets and liabilities and are measured using the enacted tax rates that will be in effect when the differences
are expected to reverse.
Deferred
income tax balances reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their tax
bases and are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered. Deferred tax assets are
evaluated for future realization and reduced by a valuation allowance to the extent the Company believes they will not be realized. The
Company considers all available evidence, including historical information, long range forecast of future taxable income and evaluation
of tax planning strategies. Amounts recorded for valuation allowance can result from a complex series of judgments about future events
and can rely on estimates and assumptions.
Tax has not been recorded for (a) taxes that would apply in the event of disposal of investments in subsidiaries, as it is generally the Company’s intention to hold these investments, not to realize them; and (b) taxes that would apply on the distribution of unremitted earnings from foreign subsidiaries, as these are retained for reinvestment in the Group. The
Company accounts for uncertain tax positions in accordance with ASC 740-10 two-step approach to recognizing and measuring uncertain tax
positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of
available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be
sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit
as the largest amount that is more than 50% (cumulative probability) likely to be realized upon ultimate settlement.
ag.New
accounting pronouncements not yet effective:
From
time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB") or other standard setting
bodies are adopted by the Company as of the specified effective date. The Company believes that the impact of recently issued standards
that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.
ah.Recently
issued and adopted pronouncements:
In
October 2021, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2021-08, Accounting for Contract Assets and
Contract Liabilities from Contracts with Customers (Topic 805). This ASU requires an acquirer in a business combination to recognize and
measure contract assets and contract liabilities (deferred revenue) from acquired contracts using the revenue recognition guidance in
Topic 606. At the acquisition date, the acquirer applies the revenue model as if it had originated the acquired contracts. The ASU is
effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. Adoption of the ASU
should be applied prospectively. Early adoption is also permitted, including adoption in an interim period. The Company elected to early
adopt ASU 2021-08 on January 1, 2022, and will apply this new guidance to all business combinations consummated subsequent to this date.
Currently, this ASU has no impact on the Company's consolidated financial statements.
In
November 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2021-10, Government
Assistance (Topic 832): Disclosures by Business Entities about Government Assistance. Under ASU 2021-10, the accounting entities with
transactions with a government that are accounted for by analogy to a grant or contribution accounting model are required to annually
disclose certain information regarding the transaction including: (i) nature and related accounting policy used; (ii) line items on the
balance sheet and income statement affected by the transactions; (iii) amounts applicable to each line item; and (iv) significant terms
and conditions. This guidance is effective for financial statements issued for annual periods beginning after December 15, 2021. The adoption
of this ASU has a minor impact on the disclosures to the annual consolidated financial statements. ai.Certain
prior period amounts have been reclassified to conform to the current period presentation. |
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MARKETABLE SECURITIES |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Marketable Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| MARKETABLE SECURITIES |
NOTE 3: MARKETABLE SECURITIES The
following is a summary of available-for-sale marketable securities at December 31, 2022:
The
following is a summary of available-for-sale marketable securities at December 31, 2021:
Proceeds from maturity of available-for-sale marketable securities during the years ended December 31, 2022, 2021 and 2020, were $201,974, $187,375 and $141,839, respectively. Proceeds from sales of available-for-sale marketable securities during the year ended December 31, 2022 were $29,236, which led to realized losses of $434. Proceeds from sales of available-for-sale marketable securities during the year ended December 31, 2021 were $14,813, which led to realized losses of $16. The Company had no proceeds from sales of available-for sale, marketable securities during the year ended December 31, 2020, therefore no realized gains or losses from the sale of available-for-sale marketable securities were recognized. |
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INVENTORIES, NET |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INVENTORIES, NET |
NOTE 4: INVENTORIES, NET
The Company recorded inventory write-downs of $10,170, $7,142 and $8,864 for the years ended December 31, 2022, 2021 and 2020, respectively. |
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PREPAID EXPENSES AND OTHER CURRENT ASSETS |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PREPAID EXPENSES AND OTHER CURRENT ASSETS |
NOTE 5: PREPAID EXPENSES AND OTHER CURRENT ASSETS
(*) Vendor non-trade receivables derived from the sale of components to manufacturing vendors who manufacture products for the Company. The Company purchases these components directly from other suppliers. The Company does not reflect the sale of these components to the contract manufacturers in its revenues (see Note 19b). |
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PROPERTY, PLANT AND EQUIPMENT, NET |
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PROPERTY, PLANT AND EQUIPMENT, NET |
NOTE
6: PROPERTY, PLANT AND EQUIPMENT, NET
Depreciation
expenses for the years ended December 31, 2022, 2021 and 2020, were $40,580,
$29,359 and
$22,355,
respectively. |
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LEASES |
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| Lessee Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LEASES |
NOTE 7: LEASES The following table summarizes the Company’s lease-related assets and liabilities recorded in the consolidated balance sheets:
The following table presents certain information related to the operating and finance leases:
The following table presents supplemental cash flows information related to the lease costs for operating and finance leases:
The following table reconciles the undiscounted cash flows for each of the first five years and the total of the remaining years of the operating and finance lease liabilities recorded in the consolidated balance sheets:
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INTANGIBLE ASSETS, NET |
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INTANGIBLE ASSETS, NET |
NOTE 8: INTANGIBLE ASSETS, NET In June 2022, the Company decided to discontinue its stand-alone uninterrupted power supply activities or UPS (“Critical Power”). The Company recorded a loss in the amount of $1,226 pertaining to Critical Power's current technology and customer relationships. In October 2022, following the e-Mobility and Automation Machines reporting unit’s goodwill analysis, an impairment test for long-lived assets was performed. The test included comparing the sum of the estimated undiscounted future cash flow attributable to the identified assets group and its carrying amounts, and recognizing an impairment for the amount to which the carrying amount exceeds the fair value of the assets groups. As a result, the Company recorded a current technology impairment of $26,917 related to e-Mobility's asset group and a $245 trade name impairment related to Automation Machines' asset group. The impairments are recorded under Goodwill impairment and other operating expenses (income), net in the consolidated statement of income. Acquired intangible assets consisted of the following as of December 31, 2022, and 2021:
Amortization expenses for the years ended December 31, 2022, 2021 and 2020, were $9,096, $10,176 and $9,479, respectively. Expected future amortization expenses of intangible assets as of December 31, 2022 are as follows:
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GOODWILL |
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Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| GOODWILL |
NOTE
9: GOODWILL
Goodwill
is tested for impairment annually in the fourth quarter of each year and is examined between annual tests if an event occurs or circumstances
change that would indicate the carrying amount may be impaired.
In
June 2022, the Company decided to discontinue its stand-alone Critical Power activities. The Company recorded a loss in the
amount of $2,782
pertaining to Critical Power's goodwill.
The
Company completed its annual goodwill impairment test in the fourth quarter of 2022 for all reporting units and determined the following:
Qualitative
assessment of the Company’s storage reporting unit was performed in order to determine whether it is necessary to conduct
the quantitative goodwill impairment test. Based on the results, the Company believes that it is more likely than not that the
fair value of said reporting unit is greater than its carrying value and therefore a quantitative goodwill impairment test was not performed,
and no goodwill impairment was recorded.
Due
to impairment indicators of the e-Mobility reporting unit, which include, among other things, a shift in the Company's strategy that may
result in a decline of the projected growth forecasted at the time of acquisition, the Company performed a quantitative goodwill impairment
test. As a result, the Company recorded goodwill impairment in the amount of $80,534
which is presented under Goodwill impairment and other operating expenses (income), net in the consolidated statement of
income.
In
addition, a quantitative test has also been performed for the Automation Machines reporting unit due to indicators of impairment
identified, which include, among other things, managerial changes and a decline in the overall financial performance compared
with past projections. As a result, the Company recorded goodwill impairment in the amount of $6,788,
which was recorded under Goodwill impairment and other operating expenses (income), net in the consolidated statement of
income.
The
fair value of the reporting units was estimated using a discounted cash flow analysis. When performing this analysis, the Company also
considered multiples of earnings from comparable public companies. The decline in fair value primarily resulted from an increased discount
rate and reduced estimated future cash flows.
The following summarizes
the goodwill activity for the year ended December 31, 2022, and 2021:
As
of December 31, 2022 there were $90,104
accumulated goodwill impairment losses. As of December 31, 2021 and 2020 there were no accumulated goodwill impairment losses.
|
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INVESTMENT IN PRIVATELY-HELD COMPANY |
12 Months Ended |
|---|---|
Dec. 31, 2022 | |
| Equity Method Investments and Joint Ventures [Abstract] | |
| INVESTMENT IN PRIVATELY-HELD COMPANY |
NOTE
10: INVESTMENT IN PRIVATELY-HELD COMPANY
On
January 31, 2021, the Company completed an investment of $11,643
in the preferred stock of AutoGrid Systems, Inc. ("AutoGrid"), a privately held company.
On
February 1, 2021, the Company signed on a preferred stock purchase agreement for an additional investment of $5,000
in AutoGrid's preferred stock (the "second investment"). On April 28, 2021, the Company completed the second investment.
The
Company accounted for the AutoGrid investment as an equity investment without readily determinable fair values.
On
July 20, 2022, the Company completed the sale of its investment in AutoGrid for proceeds of $24,362,
thus recognizing a gain of $7,719
which was recorded in the statement of income under "Other income".
Investments
in privately-held companies are included within other long-term assets in the consolidated balance sheets. As of December 31,
2022, the Company had no investments in privately-held companies. As of December 31, 2021, the carrying value of investments
in privately-held companies was $16,643.
No
impairment or other adjustments related to observable price changes in orderly transactions for identical or similar investments were
identified up to the date of the sale. |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES |
NOTE 11: DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES As
of December 31, 2022, the Company entered into forward contracts and put and call options to sell
U.S. dollars (“USD”) for NIS in the amount of approximately NIS 194
million and NIS 18
million, respectively. The fair values of outstanding derivative instruments were as follows:
Gains (losses) on derivative instruments recognized in the consolidated statements of income are summarized below:
See Note 20 for information regarding gains (losses) from designated hedging instruments reclassified from accumulated other comprehensive loss. Gains (losses) on derivative instruments recognized in the consolidated statements of comprehensive income were as follows:
As of December 31, 2022, the Company estimates that all of the net derivative losses related to the Company's foreign exchange cash flow hedges included in accumulated other comprehensive loss will be reclassified into earnings within the next 12 months. |
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FAIR VALUE MEASUREMENTS |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Measurements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FAIR VALUE MEASUREMENTS |
NOTE 12: FAIR VALUE MEASUREMENTS In accordance with ASC 820, the Company measures its cash equivalents and marketable securities, at fair value using the market approach valuation technique. Cash and cash equivalents are classified within Level 1 because these assets are valued using quoted market prices. Marketable securities and foreign currency derivative contracts are classified within level 2 due to these assets being valued by alternative pricing sources and models utilizing market observable inputs. The
following table sets forth the Company’s assets that were measured at fair value as of December 31, 2022 and 2021 by level within
the fair value hierarchy:
In addition to assets and liabilities that are recorded at fair value on a recurring basis, impairment indicators may subject goodwill and long-lived assets to nonrecurring fair value measurements. The implied fair values of the e-Mobility and Automation Machines reporting units were estimated using the discounted cash flow approach (see Notes 8 and 9). The inputs to these models are considered Level 3. |
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WARRANTY OBLIGATIONS |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Product Warranties Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| WARRANTY OBLIGATIONS |
NOTE
13: WARRANTY
OBLIGATIONS
Changes
in the Company’s product warranty obligations for the years ended December
31, 2022, 2021 and 2020 were as follows:
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DEFERRED REVENUES |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue Recognition and Deferred Revenue [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DEFERRED REVENUES |
NOTE 14: DEFERRED REVENUES Deferred revenues consist of deferred cloud-based monitoring services, communication services, warranty extension services and advance payments received from customers for the Company’s products. Deferred revenues are classified as short-term and long-term deferred revenues based on the period in which revenues are expected to be recognized.
Significant
changes in the balances of deferred revenues during the period are as follows:
The
following table includes estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied
(or partially unsatisfied) as of December 31, 2022:
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ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Payables and Accruals [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES |
NOTE 15: ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
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CONVERTIBLE SENIOR NOTES |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CONVERTIBLE SENIOR NOTES |
NOTE 16: CONVERTIBLE SENIOR NOTES On September 25, 2020, the Company sold $632,500 aggregate principal amount of its 0.00% convertible senior notes due 2025 (the “Notes”). The Notes were sold pursuant to an indenture, dated September 25, 2020 (the “Indenture”), between the Company and U.S. Bank National Association, as trustee (the “Trustee”). The Notes do not bear regular interest and mature on September 15, 2025, unless earlier repurchased or converted in accordance with their terms. The Notes are general senior unsecured obligations of the Company. Holders may convert their Notes prior to the close of business on the business day immediately preceding June 15, 2025 in multiples of $1,000 principal amount, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on December 31, 2020 (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five-business-day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of the Notes for each trading day of that five consecutive trading day period was less than 98% of the product of the last reported sale price of the common stock and the conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events as described in the Indenture. In addition, holders may convert their Notes, in multiples of $1,000 principal amount, at their option at any time beginning on or after June 15, 2025, and prior to the close of business on the second scheduled trading day immediately preceding the stated maturity date of the Notes, without regard to the foregoing circumstances. The initial conversion rate for the Notes was 3.5997 shares of common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $277.80 per share of common stock, subject to adjustment upon the occurrence of certain specified events as set forth in the Indenture. Upon conversion, the Company may choose to pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock. In addition, upon the occurrence of a fundamental change (as defined in the Indenture), holders of the Notes may require the Company to repurchase all or a portion of their Notes, in multiples of $1,000 principal amount, at a repurchase price of 100% of the principal amount of the Notes, plus any accrued and unpaid special interest, if any, to, but excluding, the repurchase date. If certain fundamental changes referred to as make-whole fundamental changes occur, the conversion rate for the Notes may be increased. The Convertible Senior Notes consisted of the following as of December 31, 2022 and 2021:
Effective January 1, 2021, the Company early adopted ASU 2020-06 using the modified retrospective approach and therefore the Company did not record amortized debt discount costs related to the Notes in the years ended December 31, 2022 and 2021. For the year ended December 31, 2020, the Company recorded amortized debt discount costs related to the Notes in the amount of $2,480. For the years ended December 31, 2022, 2021 and 2020 the Company recorded amortized debt issuance costs related to the Notes in the amount of $2,916, $2,903 and $3,185, respectively. As of December 31, 2022, the issuance costs of the Notes will be amortized over the remaining term of approximately 2.7 years. The annual effective interest rate of the liability component following the adoption of ASU 2020-06 is 0.47%. As of December 31, 2022, the estimated fair value of the Notes, which the Company has classified as Level 2 financial instruments, is $831. The estimated fair value was determined based on the quoted bid price of the Notes in an over-the-counter market on the last trading day of the reporting period. As of December 31, 2022, the if-converted value of the Notes exceeded the principal amount by $12,452. |
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OTHER LONG TERM LIABILITIES |
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| OTHER LONG TERM LIABILITIES |
NOTE 17: OTHER LONG TERM LIABILITIES
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STOCK CAPITAL |
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| Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| STOCK CAPITAL |
NOTE
18: STOCK
CAPITAL
a. Common
stock rights:
Common
stock confers upon its holders the right to receive notice of, and to participate in, all general meetings of the Company, where each
share of common stock shall have one vote for all purposes, to share equally, on a per share basis, in bonuses, profits, or distributions
out of fund legally available therefor, and to participate in the distribution of the surplus assets of the Company in the event
of liquidation of the Company.
b. Secondary
public offering:
On
March 17, 2022, the Company offered and sold 2,300,000
shares of the Company’s common stock, at a public offering price of $295.00
per share. The shares of Common Stock were issued and sold in a registered offering pursuant to the underwriting agreement dated March
17, 2022, among the Company, Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, and Morgan Stanley & Co. LLC (the “Underwriting
Agreement”). All of the offered shares were issued at closing, including 300,000
shares of Common Stock that were issued and sold pursuant to the underwriters’ option to purchase additional shares under the Underwriting
Agreement, which was exercised in full on March 18, 2022.
The
net proceeds to the Company were $650,526
after deducting underwriters' discounts of $27,140
and commissions of $834.
c. Equity
Incentive Plans:
The
Company’s 2007 Global Incentive Plan (the “2007 Plan”) was adopted by the board of directors on August 30, 2007. The
2007 Plan terminated upon the Company’s IPO on March 31, 2015 and no further awards may be granted thereunder. All outstanding awards
will continue to be governed by their existing terms and 379,358
available options for future grants were transferred to the Company’s 2015 Global Incentive Plan (the “2015 Plan”) and
are reserved for future issuances under the 2015 plan. The 2015 Plan became effective upon the consummation of the IPO. The 2015 Plan
provides for the grant of options, restricted stock units ("RSU"), performance stock units ("PSU"), and other share-based awards to directors,
employees, officers, and non-employees of the Company and its subsidiaries. As of December 31,
2022, a total of 18,047,085
shares of common stock were reserved for issuance pursuant to stock awards under the 2015 Plan (the “Share Reserve”),
an aggregate of 9,410,816
shares are still available for future grants.
The
Share Reserve will automatically increase on January 1st of each year during the term of the 2015 Plan, commencing on
January 1st of the year following the year in which the 2015 Plan becomes effective, in an amount equal to 5%
of the total number of shares of capital stock outstanding on December 31st
of the preceding calendar year; provided, however, that the Company’s board of directors may determine that there will not be a
January 1st increase in the Share Reserve in a given year or
that the increase will be less than 5% of the shares of capital stock outstanding on the preceding December 31st.
The
Company granted under its 2015 Plan, PSU awards to certain employees and officers which vest upon the achievement of certain performance
or market conditions subject to their continued employment with the Company.
In
2021, the Company has also committed to issuing additional shares, which are subject to resale registration rights and which carry certain
performance conditions (including business performance targets and a continued service relationship with the Company) and are treated
as PSUs for accounting purposes.
The
market condition for the PSUs is based on the Company’s total shareholder return ("TSR") compared to the TSR of companies listed
in the S&P 500 index over a one to three year performance period. The Company uses a Monte-Carlo simulation to determine the grant
date fair value for these awards, which takes into consideration the market price of a share of the Company’s common stock on the
date of grant less the present value of dividends expected during the requisite service period, as well as the possible outcomes pertaining
to the TSR market condition. The Company recognizes such compensation expenses on an accelerated vesting method.
The aggregate maximum number of shares of common stock that may be issued on the exercise of incentive stock options is 10,000,000. As of December 31, 2022, an aggregate of 8,617,974 options are still available for future grants under the 2015 Plan. A
summary of the activity in stock options and related information is as follows:
The
aggregate intrinsic value in the tables above represents the total intrinsic value (the difference between the fair value of the Company’s
common stock as of the last day of each period and the exercise price, multiplied by the number of in-the-money options) that would have
been received by the option holders had all option holders exercised their options on the last day of each period.
The total intrinsic value of options exercised during the years ended December 31, 2022, 2021 and 2020 was $37,948, $65,668, and $251,564, respectively.
There were no options granted in 2022.
The weighted average grant date fair value of options granted to employees and directors during the years ended December 31, 2021 and 2020, was $168.71 and $62.11, respectively. A
summary of the activity in the RSUs and related information is as follows:
A summary of the activity in the PSUs and related information is as follows:
d. Employee
Stock Purchase Plan:
The
Company adopted an ESPP effective upon the consummation of the IPO. As of December 31, 2022, total
of 3,662,737
shares were reserved for issuance under this plan. The number of shares of common stock reserved for issuance under the ESPP will increase
automatically on January 1st of each year, for ten years, by the lesser of 1%
of the total number of shares of the Company’s common stock outstanding on December 31st of the preceding calendar year or 487,643
shares. However, the Company’s board of directors may reduce the amount of the increase in any particular year at their discretion,
including a reduction to zero.
The ESPP is implemented through an offering every six months. According to the ESPP, eligible employees may use up to 15% of their salaries to purchase common stock up to an aggregate limit of $15 per participant for every six months plan. The price of an ordinary share purchased under the ESPP is equal to 85% of the lower of the fair market value of the ordinary share on the subscription date of each offering period or on the purchase date. As
of December 31, 2022, 738,876
shares of common stock had been purchased under the ESPP.
As
of December 31, 2022, 2,923,861
shares of common stock were available for future issuance under the ESPP.
In
accordance with ASC No. 718, the ESPP is compensatory and, as such, results in recognition of compensation cost.
e. Stock-based
compensation expenses:
The
Company recognized stock-based compensation expenses related to all stock-based awards in the consolidated statement of income for the
years ended December 31, 2022, 2021 and 2020, as follows:
For the year ended December 31, 2022, the Company capitalized $380 stock-based compensation related to the ERP implementation within other long-term assets in the consolidated balance sheets for the year ended December 31, 2022. In 2021 and 2020 the Company did not capitalize any stock-based compensation expenses. The
total tax benefit associated with share-based compensation for the year ended December 31, 2022, 2021 and 2020 was $7,747,
$19,113
and $7,847,
respectively. The tax benefit realized from share-based compensation for the year ended December 31, 2022, 2021 and 2020 was $10,171,
$13,379
and $11,263,
respectively.
As
of December 31, 2022, there were total unrecognized compensation expenses in the amount of $343,473
related to non-vested equity-based compensation arrangements granted. These expenses are expected to be recognized
during the period from October 1, 2022 through November 30, 2026. |
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COMMITMENTS AND CONTINGENT LIABILITIES |
12 Months Ended | ||||||
|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||
| Commitments and Contingencies Disclosure [Abstract] | |||||||
| COMMITMENTS AND CONTINGENT LIABILITIES |
NOTE
19: COMMITMENTS
AND CONTINGENT LIABILITIES
As
of December 31, 2022, contingent liabilities exist regarding guarantees in the amounts of $5,655
and $1,372
in respect of office rent lease agreements and customs and other transactions, respectively.
The
Company has contractual obligations to purchase goods and raw materials. These contractual purchase obligations relate to inventories
and other purchase orders, which cannot be canceled without penalty. In addition, the Company acquires raw materials or other goods and
services, including product components, by issuing authorizations to its suppliers to purchase materials based on its projected demand
and manufacturing needs.
As
of December 31, 2022, the Company had non-cancelable purchase obligations totaling approximately $1,590,229,
out of which the Company recorded a provision for loss in the amount of $7,002.
As
of December 31, 2022, the Company had contractual obligations for capital expenditures totaling approximately $73,955.
These commitments reflect purchases of automated assembly lines and other machinery related to the Company’s manufacturing process
as well as capital expenditures associated with the construction of Sella 2, the Company’s second lithium-ion cell and battery factory
in Korea.
From
time to time, the Company may be involved in various claims and legal proceedings. The Company reviews the status of each matter and assesses
its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be
reasonably estimated, the Company accrues a liability for the estimated loss. These accruals are reviewed at least quarterly and adjusted
to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a
particular matter.
In
September 2018, the Company’s German subsidiary, SolarEdge Technologies GmbH received a complaint filed by competitor SMA Solar
Technology AG (“SMA”). The complaint, filed in the District Court Düsseldorf, Germany, alleges that SolarEdge's 12.5kW
- 27.6kW inverters infringed on two of the plaintiff’s patents. SMA asserted a value in dispute of EUR 5.5
million (approximately $5,866)
for both patents. The Company challenged the validity of both patents. With respect to one of the claims, in October 2020, the German
Patent Court rendered the SMA patent invalid, the invalidity was appealed by SMA and in January 2023, the German Supreme Court upheld
the finding of invalidity. With respect to the other claim, in November 2019, the first instance court stayed the infringement proceedings
since it considered it to be highly likely that the second SMA patent would also be rendered invalid. In August 2021, the German Patent
Court rendered SMA's second patent invalid, and this invalidity has been appealed by SMA and a hearing is pending. The Company believes
that it has meritorious defenses to these claims and intends to vigorously defend against the remaining lawsuit.
On
July 28, 2022, the Company was served with complaints filed by Ampt LLC in the International Trade Commission (the “Commission”)
pursuant to Section 337 of the Tariff Act of 1930, as amended, in the District Court for the District of Delaware alleging patent infringement
against the Company and its subsidiary SolarEdge Technologies Ltd. On October 24, 2022, the complaint filed in the District Court of Delaware
was administratively stayed until the Commission's action is resolved. The Company believes that it has meritorious defenses to the complaints
and intend to vigorously defend against them.
On
November 3, 2022, the Company received notice that a class action lawsuit was filed in the U.S District Court or the Southern District
of New York against the Company, SolarEdge Technologies Ltd., the Company’s CEO and the Company’s CFO, by a purported stockholder
of the Company, alleging violations of the Federal Securities Act in connection with complaints filed against the Company by Ampt LLC,
detailed above. On February 14, 2023, the lawsuit was voluntarily withdrawn by the plaintiffs and dismissed by the court.
|
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accumulated Other Comprehensive Income Loss [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ACCUMULATED OTHER COMPREHENSIVE (INCOME) LOSS |
NOTE 20: ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The following table provides details about reclassifications out of accumulated other comprehensive income (loss) for the years ended December 31, 2022, 2021 and 2020:
|
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EARNINGS PER SHARE |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| EARNINGS PER SHARE |
NOTE 21: EARNINGS PER SHARE
The following table presents the computation of basic and diluted EPS attributable to SolarEdge Technologies Inc.:
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GOODWILL IMPAIRMENT AND OTHER OPERATING EXPENSES (INCOME), NET |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Operating Income Expenses [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| GOODWILL IMPAIRMENT AND OTHER OPERATING EXPENSES (INCOME), NET |
NOTE 22: GOODWILL IMPAIRMENT AND OTHER OPERATING EXPENSES (INCOME), NET
1
In June 2022, the Company decided to discontinue its stand-alone Critical Power activities. The Company recorded a loss related
to its Critical Power business in the amount of $2,782
(see Note 9). In addition,
in October 2022, as a result of an impairment test performed on the e-Mobility and Automation Machines reporting units, the Company recorded
a loss of $80,534
and $6,788,
respectively (see Note 9).
2
In October 2022, the Company recorded a loss of $26,917
and $245
as a result of an impairment test performed on e-Mobility and Automation Machines, respectively, a loss of $1,226
due to the discontinuance of Critical Power activities (see Note 8) and other miscellaneous items.
3
In the year ended December 31, 2021, the Company received a payment of $859
out of the SolarEdge Korea (formerly Kokam) acquisition escrow, with regards to a working capital adjustment. In the year ended December
31, 2020, the Company was indemnified for an amount of $4,900
out of the escrow, with regards to a legal claim of SolarEdge Korea (formerly Kokam) that was settled in arbitration.
|
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INCOME TAXES |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INCOME TAXES |
NOTE
23:INCOME TAXES
a.
Tax rates in the U.S:
The
Company is subject to U.S. federal tax at the rate of 21%.
On
December 22, 2017, the Tax Cuts and Jobs Act (the "Tax Act") was signed into law making significant changes to U.S. income tax law. These
changes include, but are not limited to, a corporate tax rate decrease from 35%
to 21%
effective for tax years 2018 onwards and created new taxes on certain foreign-sourced earnings and certain related-party payments - the
Global Intangible Low Taxed Income (“GILTI”). Furthermore, changes introduced by the Tax
Act to Section 174 of the Internal Revenue Code, that came into effect on January 1, 2022, require taxpayers to amortize research and
development expenditures over five years (if expensed by a U.S. entity) or fifteen years (if expensed by non-U.S. entities), thereby increasing
taxable income and payable tax.
The
Tax Act required the Company to pay U.S. income taxes on accumulated foreign subsidiaries earnings not previously subject to U.S. income
tax at a rate of 15.5%
to the extent of foreign cash and certain other net current assets and 8%
on the remaining earnings. The total tax liability was calculated to approximately $8,500,
which will be paid over the eight-year period provided in the Tax Act (ending 2024). b.
Corporate tax in Israel:
The
taxable income of Israeli companies is subject to corporate tax at the rate of 23%. The
Israeli subsidiary is also eligible for tax benefits as further described in note 23.j.
c.
Carryforward tax losses:
As
of December 31, 2022, the foreign subsidiaries have carryforward tax losses of $83,391 which
does not have an expiration date.
d.
Deferred taxes:
Deferred
taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax liabilities and assets are as follows:
(1) Related to deferred tax assets that would only be realizable upon the generation of net income in certain foreign jurisdictions. The Company’s Israeli subsidiary’s tax-exempt profit from Benefited Enterprises (as defined in note 23.j) is permanently reinvested, Therefore, deferred taxes have not been provided for such tax-exempt income. The Company may incur additional tax liability in the event of intercompany dividend distributions by some of its subsidiaries. Such additional tax liability in respect of these subsidiaries has not been provided for in the Financial Statements as the Company’s management and the Board of Directors has determined that the Company intends to reinvest earnings of its subsidiaries indefinitely. e.
Uncertain tax positions are comprised as follows:
The
total amount of gross unrecognized tax benefits above would affect the Company's effective tax rate, if recognized.
The
Company accrues interest and penalties related to unrecognized tax benefits in its provision for income taxes. The total amount of penalties
and interest were not material as of December 31, 2022, 2021 and
2020.
It
is reasonably possible that the Company’s gross unrecognized tax benefits will decrease by an insignificant amount in the next 12
months, primarily due to the lapse of the statute of limitations.
f.
Income before income taxes are comprised as follows:
g.
Income taxes (tax benefit) are comprised as follows:
h.
Reconciliation of theoretical tax expense to actual tax expense:
The
differences between the statutory tax rate of the Company and the effective tax rate are result of a variety of factors, including different
effective tax rates applicable to non-US subsidiaries that have tax rates different than the Company tax rate, tax benefits relating to
stock-based compensation and adjustments to valuation allowances on deferred tax assets on such subsidiaries.
A
reconciliation between the theoretical tax expense and the actual tax expense as reported in the consolidated statements of income is
as follows:
i.
Tax assessments:
The
Israeli tax authorities issued a tax order for tax year 2016 and tax assessments for tax years 2017 and 2018 against the Company’s
Israeli subsidiary, challenging the subsidiary's positions on several issues. The Israeli subsidiary has protested the order before the
Central District Court in Israel and appealed the tax assessments.
The
Company believes it has adequately provided for these items, however adverse results could have a material impact on the Company’s
financial statements.
As
of December 31, 2022, the Company and certain of its subsidiaries filed U.S. federal and various state and foreign income tax returns.
The statute of limitations relating to the consolidated U.S. federal income tax return is closed for all tax years up to and including
2018.
The
statute of limitations related to tax returns of the Company’s Israeli subsidiary for all tax years up to and including 2015 has
lapsed.
The
statute of limitations related to tax returns of the Company’s other subsidiaries has lapsed for part of the tax years, which differs
between the different subsidiaries.
The
Israeli subsidiary elected tax year 2012 as a "Year of Election" for “Benefited Enterprise” status under the Investments Law.
According to the Investments Law, the Israeli subsidiary elected to participate in the alternative benefits program which provides certain
benefits, including tax exemptions and reduced tax rates (which depend on, inter alia, the geographic location in Israel). Income not
eligible for Benefited Enterprise benefits is taxed at a regular corporate tax rate.
Upon
meeting the requirements under the Investments Law, undistributed income derived from Benefited Enterprise from productive activity will
be exempt from tax for two years from the year in which the Israeli subsidiary first has taxable income (“exempt period”),
provided that 12 years have not passed from the beginning of the year of election.
On
October 24, 2018, the Company’s Israeli subsidiary received an approval from the Israeli Tax Authorities confirming the applicability
of the two-year tax exemption as provided in the Investments Law until December 31, 2018. As of December 31, 2018, approximately $289,900
was derived from tax exempt profits earned by the Israeli subsidiary “Benefited Enterprises” in the two tax years exempt period,
tax years 2017 - 2018. The Company has determined that such tax-exempt income will not be distributed as dividends and intends to reinvest
the amount of its tax-exempt income earned by the Israeli subsidiary. Accordingly, no provision for deferred income taxes has been provided
on income attributable to the Israeli subsidiary “Benefited Enterprises” as such income is essentially permanently reinvested.
If
the Israeli subsidiary’s retained tax-exempt income is distributed, the income would be taxed at the applicable corporate tax rate
which depends on the foreign ownership in each tax year.
Through
December 31, 2022, the Israeli subsidiary had generated income under the provision of the Investments Law.
Pursuant
to amendment 73 to the Investments Law (the “2017 Amendment"), a preferred enterprise located in development area A will be
subject to a tax rate of 7.5%
instead of 9%
effective from January 1, 2017 and thereafter (the tax rate applicable to preferred enterprises located in other areas remains at 16%).
The
2017 Amendment also prescribes special tax tracks for preferred technological enterprises (“PTE”), which are subject to rules
that were issued by the Ministry of Finance.
On
June 14, 2017, the Encouragement of Capital Investments Regulations (Preferred Technological Income and Capital Gain for Technological
Enterprise), 2017 (the “Regulations”) were published.
The
Regulations describe, inter alia, the mechanism used to determine the calculation of the benefits under the PTE regime. According to these
regulations, a company that complies with the terms under the PTE regime may be entitled to certain tax benefits with respect to income
generated during the company’s regular course of business and derived from the preferred intangible asset, excluding income derived
from intangible assets used for marketing and income attributed to production activity.
A
PTE, which is located in the center of Israel will be subject to tax at a rate of 12%
on profits deriving from intellectual property, or 6% if its annual revenues exceed NIS 10
billion. The Israeli subsidiary notified the ITA of its election to implement the PTE with effect from January 1, 2019, and its PTE income
was subject to a 12% tax rate in the years 2019-2021, and in 2022 to a 6% tax rate as the group surpassed NIS 10
billion revenues threshold.
Tax
Benefits for Research and Development:
Israeli
tax law (section 20A to the Israeli Tax Ordinance (New Version), 1961) allows, a tax deduction for research and development expenses,
including capital expenses, for the year in which they are paid. Such expenses must relate to scientific research in industry, agriculture,
transportation or energy, and must be approved by the relevant Israeli government ministry, determined by the field of research. As for
expenses incurred in scientific research that is not approved by the relevant Israeli government ministry, they will be deductible over
a three-year period starting from the tax year in which they are paid. The Company’s Israeli subsidiary intends to submit a formal
request to the relevant Israeli government ministry in order to obtain such approval for 2019 - 2021. k.
Tax benefits under the Law for the Encouragement of Industry (Taxes), 1969:
The
Company’s Israeli subsidiary claims currently to be qualified as ‘industrial company’ as defined by this law and as
such, is entitled to certain tax benefits, consisting mainly of accelerated depreciation and amortization of patents and certain other
intangible property. |
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FINANCIAL (EXPENSES) INCOME, NET |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Nonoperating Income (Expense) [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FINANCIAL EXPENSES (INCOME), NET |
NOTE 24: FINANCIAL INCOME (EXPENSE), NET
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SEGMENT, GEOGRAPHIC AND PRODUCT INFORMATION |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SEGMENT, GEOGRAPHIC, MAJOR CUSTOMER AND PRODUCT INFORMATION |
NOTE 25: SEGMENT, GEOGRAPHIC AND PRODUCT INFORMATION a. Segment Information: Following the discontinuation of Critical Power in June 2022, the Company operates in four different operating segments: Solar, Energy Storage, e-Mobility and Automation Machines. The Company's Chief Executive Officer, who is the chief operating decision maker (“CODM”), makes resource allocation decisions and assesses performance based on financial information presented on a consolidated basis, accompanied by disaggregated information about revenues and contributed profit by the operating segments. The Company does not allocate to its operating segments revenue recognized due to advance payments received for performance obligations that extend for a period greater than one year (“financing component”), related to Accounting Standard Codification 606, “Revenue from Contracts with Customers” (ASC 606). Segment profit is comprised of gross profit for the segment less operating expenses that do not include amortization and impairment of purchased intangible assets, stock based compensation expenses and certain other items. The Company manages its assets on a group basis, not by segments, as many of its assets are shared or co-mingled. The Company’s CODM does not regularly review asset information by segments and, therefore, the Company does not report asset information by segment.
The Company identified one operating segment as reportable – the Solar segment. The other operating segments are insignificant individually and therefore their results are presented together under “All other”. The Solar segment includes the design, development, manufacturing, and sales of an intelligent inverter solution designed to maximize power generation at the individual PV module level and a residential storage solution, compatible with the Company’s energy hub inverter, intended to store and supply power for back-up and to maximize self-consumption. The Solar segment solution consists mainly of the Company’s power optimizers, inverters, batteries and cloud‑based monitoring platform. The “All other” category includes the design, development, manufacturing and sales of energy storage products, e-Mobility products, UPS products and automated machines The following table presents information on reportable segments profit (loss) for the period presented:
The following table presents information on reportable segments reconciliation to consolidated revenues for the periods presented:
The following table presents information on reportable segments reconciliation to consolidated operating income for the periods presented:
b. Revenues by geographic, based on Customers’ location:
(*) Except for Germany, Netherlands and Italy c. Revenues by type:
d. Long-lived assets by geographic location:
(*) Long-lived assets are comprised of property and equipment, net and Operating lease right-of-use assets, net. |
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SUBSEQUENT EVENTS |
12 Months Ended |
|---|---|
Dec. 31, 2022 | |
| Subsequent Events [Abstract] | |
| SUBSEQUENT EVENTS |
NOTE 26: SUBSEQUENT EVENTS In January 2023, the Company entered into an agreement to acquire Hark Systems Ltd. ("Hark"), a UK-based energy IoT company for the C&I sector. Hark's platform will enable the Company to grow its commercial and industrial energy management portfolio and offer additional services to its C&I customers. The acquisition is still subject to certain customary closing conditions and regulatory approvals and is expected to close during the second quarter of 2023. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Principles of consolidation |
a.Principles
of consolidation:
The
consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany transactions and balances including
profit from intercompany sales not yet realized outside the Company have been eliminated upon consolidation.
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| Use of estimates |
b.Use
of estimates:
The
preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets, liabilities, revenues, costs and expenses and related disclosures in the accompanying notes. The duration, scope and
effects of the ongoing Covid-19 pandemic and the conflict in Ukraine, government and other third-party responses to it, and the related
macroeconomic effects, including to the Company’s business and the business of the Company’s suppliers and customers are uncertain,
rapidly changing and difficult to predict. As a result, the Company’s accounting estimates and assumptions may change over time
in response to this evolving situation. Such changes could result in future impairments of goodwill, intangibles, long-lived assets, inventories,
incremental credit losses on receivables and available-for-sale marketable debt securities, or an increase in the Company’s insurance
liabilities as of the time of a relevant measurement event.
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| Financial statements in U.S. dollars |
c.Financial
statements in U.S. dollars:
A
major part of the Company’s operations is carried out in the United States, Israel and certain other countries. The functional currency
of these entities is the U.S. dollar. Financing activities, including cash investments are primarily made in U.S. dollars.
Accordingly,
monetary accounts maintained in currencies other than the U.S. dollar are translated into U.S. dollars in accordance with Financial Accounting
Standards Board Accounting Standards Codification (“ASC”) No. 830 “Foreign Currency Matters”. All transaction
gains and losses of the re-measurement of monetary balance sheet items are reflected in the statements of income as financial income or
expenses, as appropriate.
The
financial statements of other Company’s subsidiaries whose functional currency is other than the U.S. dollar have been translated
into U.S dollars. Assets and liabilities have been translated using the exchange rates in effect as of the balance sheet date. Statements
of income amounts have been translated using the date of the transaction or at the average exchange rate to for the relevant period.
The
resulting translation adjustments are reported as a component of stockholders’ equity in accumulated other comprehensive income
(loss). Gains and losses arising from intercompany foreign currency transactions that are of a long-term investment in nature are reported
in the same manner as translation adjustments.
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| Cash and cash equivalents |
d.Cash
and cash equivalents:
Cash
equivalents are short-term, highly liquid investments that are readily convertible to cash, with original maturities of three months or
less at the date acquired.
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| Short-term bank deposits |
e.Short-term
bank deposits:
Short-term
bank deposits are deposits with an original maturity of more than three months and less than a year from the date of investment and which
do not meet the definition of cash equivalents. The deposits are presented according to their term deposits.
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| Restricted bank deposits |
f.Restricted
bank deposits:
Short-term
restricted bank deposits possess an original maturity of more than three months and less than a year from the date of investment. Long-term
restricted bank deposits possess an original maturity of more than one year from the date of investment. Restricted bank deposits are
primarily used as collateral for the Company's office leases and credit cards.
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| Marketable Securities |
g.Marketable
Securities:
Marketable
securities consist of corporate and governmental bonds. The Company determines the appropriate classification of marketable securities
at the time of purchase and re-evaluates such designation at each balance sheet date. In accordance with FASB ASC No. 320 “Investments
- Debt and Equity Securities”, the Company classifies marketable securities as available-for-sale.
Available-for-sale
("AFS") securities are stated at fair value, with unrealized gains and losses reported in accumulated other comprehensive income (loss),
a separate component of stockholders’ equity, net of taxes. Realized gains and losses on sales of marketable securities, as determined
on a specific identification basis, are included in financial income (expenses), net. The amortized cost of marketable securities is adjusted
for amortization of premium and accretion of discount to maturity, both of which, together with interest, are included in financial income
(expenses), net.
The
Company classifies its marketable securities as either short-term or long-term based on each instrument’s underlying contractual
maturity date. Marketable securities with maturities of 12 months or less are classified as short-term and marketable securities with
maturities greater than 12 months are classified as long-term.
On
each reporting period, the Company evaluates whether declines in fair value below carrying value are due to expected credit losses, as
well as the ability and intent to hold the investment until a forecasted recovery occurs, in accordance with ASC 326. Allowance for credit
losses on AFS debt securities are recognized as a charge in financial income (expenses), net, on the consolidated statements of income,
and any remaining unrealized losses, net of taxes, are included in accumulated other comprehensive income (loss) in stockholders' equity.
The
Company has not recorded credit losses for the years ended December 31, 2022, 2021 and 2020.
The
Company determines realized gains or losses on sale of marketable securities on a specific identification method and records such gains
or losses in financial income (expenses), net on the consolidated statements of income.
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| Investments in privately-held companies |
h.Investment
in privately-held companies:
The
Company's equity investments are investments in equity securities of privately-held companies, that are not traded and therefore not supported
with observable market prices. The Company elected to account for its equity investments without readily determinable market values that
either (i) do not meet the definition of in-substance common stock or (ii) do not provide the Company with control or significant influence
using Accounting Standards Update (“ASU”) 2016-01.
The Company adjusts the carrying value of its investments to fair value upon observable transactions for identical or similar investments of the same issuer. The
Company periodically evaluates the carrying value of the investments in privately-held companies when events and circumstances indicate
that the carrying amount of the investment may not be recovered. The maximum loss the Company can incur for its investments is their carrying
value.
The
Company may determine the fair value by reviewing equity valuation reports, current financial results, long-term plans of the privately-held
companies, the amount of cash that the privately-held companies have on-hand, the ability to obtain additional financing and overall market
conditions in which the privately-held companies operate or based on the price observed from the most recent completed financing.
All
gains and losses on investments in privately-held companies, realized and unrealized, are recognized in other income.
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| Trade receivables |
i.Trade
receivables:
Trade
receivables are stated net of credit losses allowance. The Company is exposed to credit losses primarily through sales of products. The
allowance against gross trade receivables reflects the current expected credit loss inherent in the receivables portfolio determined based
on the Company’s methodology. The Company’s methodology is based on historical collection experience, customer creditworthiness,
current and future economic condition and market condition. Additionally, specific allowance amounts are established to record the appropriate
provision for customers that have a higher probability of default. Trade receivables are written off after all reasonable means to collect
the full amount have been exhausted.
The
following table provides a roll-forward of the allowance for credit losses that is deducted from the amortized cost basis of trade receivables
to present the net amount expected to be collected:
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| Inventories |
j.Inventories: Inventories are stated at the lower of cost or net realizable value. Cost includes depreciation, labor, material and overhead costs. Inventory reserves are provided to cover risks arising from slow-moving items or technological obsolescence. The Company periodically evaluates the quantities on hand relative to historical, current and projected sales volume. Based on this evaluation, an impairment charge is recorded when required to write-down inventory to its net realizable value. Cost of finished goods and raw materials is determined using the moving average cost method. |
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| Property, plant and equipment |
k.Property,
plant and equipment:
Property,
plant and equipment are stated at cost, net of accumulated depreciation and government grants. Assets under construction represent the
construction or development stage of property and equipment that have not yet been placed in service for the Company's intended use. Depreciation
is calculated by the straight-line method over the estimated useful life of the assets, at the following rates:
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| Government assistance |
l. Government assistance In 2020, SolarEdge Ltd, a wholly owned subsidiary of the Company, entered into an agreement with the Israeli Ministry of Economy and Industry to partially subsidize the construction of Sella 1, a factory for production of inverters and optimizers, in the amount of approximately $7,000. In 2020, SolarEdge Korea (formerly Kokam), a wholly owned subsidiary of the Company, entered into an agreement with Chungcheongbuk-do province of South Korea to partially subsidize the construction of Sella 2, a factory for production of lithium-ion cells and batteries, in the amount of approximately $12,000. The assistance
is in the form of a cash subsidy, which the government will pay as a grant upon the satisfaction of predetermined construction completion
milestones. When the defined milestones are reached and the right to receive a subsidy amount becomes virtually certain, the amount of
the grant is recorded as a reduction of the related asset's value under “Property, plant and equipment, net”.
The
Company recorded reduction of property, plant and equipment in the amount of $7,359
and $4,842
for the years ended December 31, 2022 and 2021, respectively.
As
of December 31, 2022, the Company has a right to receive of $9,233
that has yet to be paid which was recorded under “Prepaid expenses and other current assets”. |
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| Leases |
m.Leases: The
Company determines if an arrangement is a lease at inception. Contracts containing a lease are further evaluated for classification as
an operating or finance lease. In determining the leases classification the Company assesses among other criteria: (i) 75% or more of
the remaining economic life of the underlying asset is a major part of the remaining economic life of that underlying asset; and (ii)
90% or more of the fair value of the underlying asset comprises substantially all of the fair value of the underlying asset. Operating
leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities and long-term operating lease
liabilities in the Company’s consolidated balance sheets. Finance leases are included in property, plant and equipment, net, other
current liabilities, and long-term finance lease liabilities in the Company’s consolidated balance sheets. ROU assets represent
the right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments
arising from the lease. For leases with terms greater than 12 months, the Company records the ROU asset and liability at commencement
date based on the present value of lease payments according to their term.
The
Company uses incremental borrowing rates based on the estimated rate of interest for collateralized borrowing over a similar term of the
lease payments at commencement date. The ROU asset also includes any lease payments made and excludes lease incentives. Lease terms may
include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expenses
are recognized on a straight-line basis over the lease term or the useful life of the leased asset.
In
addition, the carrying amount of the ROU and lease liabilities are remeasured if there is a modification, a change in the lease term,
a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset.
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| Business Combination |
n.Business
Combination:
The
Company allocates the fair value of the purchase price to the tangible assets acquired, liabilities assumed and intangible assets acquired
based on their estimated fair value. The excess of the fair value of the purchase price over the fair values of these identifiable assets
and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially
with respect to intangible assets.
Significant
estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired technology and
discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently
uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which does not
exceed one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the
corresponding offset to goodwill. Upon the finalization of the measurement period, any subsequent adjustments are recorded to earnings.
|
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| Intangible Assets |
o.Intangible
Assets: Acquired
identifiable finite-lived intangible assets are amortized on a straight-line basis or accelerated method over the estimated useful lives
of the assets. The basis of amortization approximates the pattern in which the assets are utilized, over their estimated useful lives.
The Company routinely reviews the remaining estimated useful lives of finite-lived intangible assets. In case the Company reduces the
estimated useful life for any asset, the remaining unamortized balance is amortized or depreciated over the revised estimated useful life
(see Note 8). |
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| Impairment of long-lived assets |
p.Impairment
of long-lived assets: The Company’s long-lived assets to be held and used, including ROU assets and identifiable intangible assets that are subject to amortization, other than goodwill, are reviewed for impairment in accordance with ASC 360 “Property, Plants and Equipment”, whenever events or changes in circumstances indicate that the carrying amount of an asset (or asset group) may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset (or asset group) to the future undiscounted cash flows expected to be generated by the assets (or asset group). If such evaluation indicates that the carrying amount of the asset (or asset group) is not recoverable, the assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds their fair value (see Note 8). For the years ended December 31, 2022, 2021 and 2020, the Company recorded impairment charges of $29,037, $2,209 and $1,471, under Goodwill impairment and other operating expenses (income), net, respectively. |
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| Goodwill |
q.Goodwill:
Goodwill
reflects the excess of the consideration transferred, including the fair value of any contingent consideration and any non-controlling
interest in the acquiree, over the assigned fair values of the identifiable net assets acquired. Goodwill is not amortized, and is assigned
to reporting units and tested for impairment at least on an annual basis, in the fourth quarter of the fiscal year.
The
goodwill impairment test is performed according to the following principles:
For
the year ended December 31, 2022, the Company recorded impairment charges of goodwill in the amount of $90,104.
For the years ended December 31, 2021 and 2020, the Company did not record any impairment charges. |
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| Cloud computing arrangements |
r.Cloud
computing arrangements:
In 2021, due to the growing size and complexity of the Company, the Company decided to implement a new global enterprise resource planning ("ERP") system, which will replace the Company's existing operating and financial systems. During the year ended December 31, 2022, the Company began implementing a cloud-based ERP system. The implementation is expected to occur in phases over the next several years. The Company incurs costs to implement cloud computing arrangements ("CCA") that are hosted by third party vendors. Implementation costs associated with CCA are capitalized when incurred during the application development phase until the software is ready for its intended use. The costs are then amortized on a straight-line basis over the contractual term of the cloud computing arrangement and are recognized as an operating expense within the consolidated statements of income. Capitalized amounts related to such arrangements are recorded within other long-term assets in the consolidated balance sheets. Cash payments for CCA implementation costs are classified as cash outflows from operating activities. For the year ended December 31, 2022, the Company has capitalized implementation costs related to its upcoming ERP conversion in the amount of $3,457 and presented it under other long-term assets in the consolidated balance sheet. |
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| Severance pay |
s.Severance
pay:
The
employees of the Company’s Israeli subsidiary are included under Section 14 of the Severance Pay Law, 1963, under which these employees
are entitled only to monthly deposits made in their name with insurance companies, at a rate of 8.33% of their monthly salary. These payments
cause the Company to be released from any future obligation under the Israeli Severance Pay Law to make severance payments in respect
of those employees; therefore, related assets and liabilities are not presented in the consolidated balance sheets.
If applicable, severance costs are recorded in each entity in accordance with local laws and regulations. For
the years ended December 31, 2022, 2021 and 2020, the Company recorded $17,202,
$14,231
and $10,598 in
severance expenses related to its employees, respectively.
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| Derivatives and Hedging |
t.Derivatives
and Hedging:
The
Company accounts for derivatives and hedging based on ASC 815 (“Derivatives and Hedging”). ASC 815 requires the Company to
recognize all derivatives on the balance sheet at fair value. The accounting for changes in the fair value (i.e., gains or losses) of
a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the
type of hedging relationship.
To
protect against the increase in value of forecasted foreign currency cash flows resulting from salary denominated in the Israeli currency,
the New Israeli Shekels (“NIS”), during the year ended December 31, 2022, the Company instituted a foreign currency cash flow
hedging program whereby portions of the anticipated payroll denominated in NIS for a period of one to nine months with hedging contracts.
Accordingly,
when the dollar strengthens against the NIS, the decline in present value of future foreign currency expenses is offset by losses in the
fair value of the hedging contracts. Conversely, when the dollar weakens, the increase in the present value of future foreign currency
cash flows is offset by gains in the fair value of the hedging contracts. These hedging contracts are designated as cash flow hedges,
as defined by ASC 815 and are all effective hedges.
The Company also entered into derivative instrument arrangements to hedge the Company’s exposure to currencies other than the U.S. dollar. These derivative instruments are not designated as cash flow hedges, as defined by ASC 815, and therefore all gains and losses, resulting from fair value remeasurement, were recorded immediately in the statement of income, as a financial income (expense), net.. The Company classifies cash flows related to its hedging as operating activities in its consolidated statement of cash flows. |
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| Revenue recognition |
u.Revenue
recognition:
Revenues
are recognized in accordance with ASC 606; revenue from contracts with customers is recognized when control of the promised goods or services
is transferred to the customers, in an amount that the Company expects in exchange for those goods or services.
The
Company’s products and services consist mainly of (i) power optimizers, (ii) inverters, (iii) residential batteries, (iv) a related
cloud-based monitoring platform, (v) communication services, (vi) warranty extension services, (vii) Lithium-ion cells and other storage
solutions (viii) EV components, and (ix) automated machinery for manufacturing lines.
The
Company recognizes revenue under the core principle that transfer of control to the Company’s customers should be depicted in an
amount reflecting the consideration the Company expects to receive in revenue. In
order to achieve that core principle, the Company applies the following five-step approach: (1) identify the contract with a customer,
(2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the
performance obligations in the contract, and (5) recognize revenue when the performance obligation is satisfied.
(1)Identify
the contract with a customer
A
contract is an agreement or purchase order between two or more parties that creates enforceable rights and obligations. In evaluating
the contract, the Company analyzes the customer’s intent and ability to pay the amount of promised consideration (credit risk) and
considers the probability of collecting substantially all of the consideration.
The
Company determines whether collectability is reasonably assured on a customer-by-customer basis pursuant to its credit review policy.
The Company typically sells to customers with whom it has a long-term business relationship and a history of successful collection. For
a new customer, or when an existing customer substantially expands its commitments, the Company evaluates the customer’s financial
position, the number of years the customer has been in business, the history of collection with the customer, and the customer’s
ability to pay, and typically assigns a credit limit based on that review.
(2)Identify
the performance obligations in the contract
At
a contract’s inception, the Company assesses the goods or services promised in a contract with a customer and identifies the performance
obligations. The main performance obligations are the provisions of the following: providing of the Company’s products; cloud based
monitoring services; extended warranty services and communication services. Depending on the shipping terms agreed with the customer,
the Company may perform shipping and handling activities after the customer obtains control of the goods and revenue is recognized. The
Company has elected to account for shipping and handling costs as activities to fulfill the promise to transfer the goods. As a result
of this accounting policy election, the Company does not consider shipping and handling activities after the customer obtains control
of the goods as promised services to its customers.
(3)Determine
the transaction price
The
transaction price is the amount of consideration to which the Company is entitled in exchange for transferring promised goods or services
to a customer, excluding amounts collected on behalf of third parties. Generally, the Company does not provide price protection, stock
rotation, and/or right of return. The Company determines the transaction price for all satisfied and unsatisfied performance obligations
identified in the contract from contract inception to the beginning of the earliest period presented. Rebates or discounts on goods or
services are accounted for as variable consideration. The rebate or discount program is applied retrospectively for future purchases.
Provisions for rebates, sales incentives, and discounts to customers are accounted for as reductions in revenue in the same period the
related sales are recorded.
Accrual
for rebates for direct customers is presented net of receivables. Accrual for sale incentives related to non-direct customers is presented
under accrued expenses and other current liabilities. The Company accrued $176,706
and $152,717
for rebates and sales incentives as of December 31, 2022 and 2021, respectively. When
a contract provides a customer with payment terms of more than a year, the Company considers whether those terms create variability in
the transaction price and whether a significant financing component exists.
As
of December 31, 2022, the Company has not provided payment terms of more than a year.
The
performance obligations that extend for a period greater than one year are those that include a financial component: (i) warranty extension
services, (ii) cloud-based monitoring, and (iii) communication services. The Company recognizes financing component expenses in its consolidated
statement of income in relation to advance payments for performance obligations that extend for a period greater than one year. These
financing component expenses are reflected in the Company’s deferred revenues balance.
(4)Allocate
the transaction price to the performance obligations in the contract
The
Company performs an allocation of the transaction price to each separate performance obligation, in proportion to their relative standalone
selling prices.
(5)Recognize
revenue when a performance obligation is satisfied
Revenue
is recognized when or as performance obligations are satisfied by transferring control of a promised good or service to a customer. Control
either transfers over time or at a point in time, which affects when revenue is recorded.
Revenues from sales of products are recognized based on the transfer of control, which includes but is not limited to, the agreed International Commercial terms, or “INCOTERMS”. Revenues related to warranty extension services, cloud-based monitoring, and communication services are recognized over time on a straight-line basis. Deferred
revenues consist of deferred cloud-based monitoring services, communication services, warranty extension services and advance payments
received from customers for the Company’s products. Deferred revenues are classified as short-term and long-term deferred revenues
based on the period in which revenues are expected to be recognized (see Note 14).
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| Cost of revenues |
v.Cost
of revenues:
Cost
of revenues includes the following: product costs consisting of purchases from contract manufacturers and other suppliers, direct and
indirect manufacturing costs, shipping and handling, support, warranty expenses, provision for losses related to slow moving and dead
inventory, personnel and logistics costs. |
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| Shipping and handling costs |
Shipping
and handling costs, which amounted to $257,753,
$116,574
and $101,597,
for the years ended December 31, 2022, 2021 and 2020, respectively, are included in the cost of revenues in the consolidated statements
of income. Shipping and handling costs include custom tariff charges and all other costs associated with the distribution of finished
goods from the Company’s point of sale directly to its customers.
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| Warranty obligations |
w.Warranty
obligations:
The
Company provides a product warranty for its solar segment related products as follows: a standard 10-year
limited warranty for its residential batteries, a standard 12-year
limited warranty for the majority of its inverters, that is extendable up to 25
years for an additional cost and a 25-year
limited warranty for power optimizers.
The
Company maintains reserves to cover the expected costs that could result from the standard warranty. The warranty liability is in the
form of product replacement and associated costs. Warranty reserves are based on the Company’s best estimate of such costs and are
included in cost of revenues. The reserve for the related warranty expenses is based on various factors including assumptions about the
frequency of warranty claims on product failures, derived from results of accelerated lab testing, field monitoring, analysis of the history
of product field failures, and the Company’s reliability estimates.
The
Company has established a reliability measurement system based on the units’ estimated mean time between failure, or MTBF, a metric
that equates to a steady-state failure rate per year for each product generation. The MTBF predicts the expected failure rate of each
product within the Company's products installed base during the expected product warranted lifetime.
The
Company performs accelerated life cycle testing, which simulates the service life of the product in a short period of time.
The
accelerated life cycle tests incorporate test methodologies derived from standard tests used by solar module vendors to evaluate the period
over which solar modules wear out. Corresponding replacement costs are updated periodically to reflect changes in the Company’s
actual and estimated production costs for its products, rate of usage of refurbished units as a replacement of faulty units, and other
costs related to logistic and subcontractors’ services associated with the replacement products.
In
addition, through the collection of actual field failure statistics, the Company has identified several additional failure causes that
are not included in the MTBF model. Such causes, which mostly consist of design errors, workmanship errors caused during the manufacturing
process and, to a lesser extent, replacement of non-faulty units by installers, result in generating additional replacement costs to the
replacement costs projected under the MTBF model.
For
other products, the Company accrues for warranty costs based on the Company’s best estimate of product and associated costs. The
Company’s other products are sold with a standard limited warranty that typically range in duration from one to ten years.
Warranty
obligations are classified as short-term and long-term obligations based on the period in which the warranty is expected to be claimed.
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| Convertible senior notes |
x.Convertible
senior notes:
Effective
January 1, 2021, the Company early adopted ASU 2020-06 using the modified retrospective approach. The Notes are accounted for as a single
liability measured at its amortized cost, as no other embedded features require bifurcation and recognition as derivatives. Adoption of
the new standard resulted in an increase of retained earnings in the amount of $2,884,
a decrease of an additional paid-in capital in the amount of $36,336,
an increase of convertible senior notes, net, in the amount of $45,282
and a decrease of deferred tax liabilities, net, in the amount of $11,830.
The impact of adoption of this standard on the Company’s earnings per share was immaterial. The
Company’s Convertible Senior Notes are included in the calculation of diluted Earnings Per Share (“EPS”) if the assumed
conversion into common shares is dilutive, using the “if-converted” method. This involves adding back the periodic non-cash
interest expense net of tax associated with the Notes to the numerator and by adding the shares that would be issued in an assumed conversion
(regardless of whether the conversion option is in or out of the money) to the denominator for the purposes of calculating diluted EPS,
unless the Notes are antidilutive (see Note 21). |
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| Advertising costs |
y.Advertising costs
Advertising costs are expensed when incurred and are included in sales and marketing expenses in the consolidated statements of income. The Company incurred advertising expenses of $11,090, $6,323, and $4,199 for the years ended December 31, 2022, 2021, and 2020, respectively. |
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| Research and development costs |
z.Research
and development costs:
Research
and development costs, are charged to the consolidated statement of income as incurred. |
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| Concentrations of credit risks |
aa.Concentrations
of credit risks:
Financial
instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, short-term
bank deposits, restricted bank deposits, marketable securities, trade receivables, derivative instruments and other accounts receivable.
Cash
and cash equivalents, short-term bank deposits and restricted bank deposits are mainly invested in major banks in the U.S., Israel, Germany
and Korea. Management believes that the financial institutions that hold the Company’s investments are financially sound and, accordingly,
minimal credit risk exists with respect to these investments.
The
Company's debt marketable securities include investments in highly-rated corporate debentures (located mainly in U.S., Canada, France,
UK, Cayman Islands and other countries) and governmental bonds. The financial institutions that hold
the Company's debt marketable securities are major financial institutions located in the United States. The Company believes its debt
marketable securities portfolio is a diverse portfolio of highly-rated securities and the Company's investment policy limits the amount
the Company may invest in an issuer (see Note 2g.).
The
trade receivables of the Company derive from sales to customers located primarily in the United States and Europe.
The
Company performs ongoing credit evaluations of its customers for the purpose of determining the appropriate allowance for credit losses
(see Note 2i.). The Company generally does not require collaterals, however, in certain circumstances, the Company may require letters
of credit, other collateral, or additional guarantees. From time to time, the Company may purchase trade credit insurance.
The Company
had one major customer (customers with attributable revenues that represents more than 10% of total revenues) for the year ended December
31, 2022, two major customers for the year ended December 31, 2021, and one major customer for the year ended December 31, 2020 that accounted
for approximately 18.5%,
30.9%%
and 14.8%
of the Company’s consolidated revenues, respectively. All of the revenues from these customers were generated in the solar segment.
The Company had three major customers (customer with a balance that represents more than 10% of total trade receivables, net) as of December 31, 2022 and two major customers for the year ended December 31, 2021 that accounted in the aggregate for approximately 42.2% and 39.3%, of the Company’s consolidated trade receivables, net, respectively. |
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| Concentrations of supply risks |
ab.Concentrations
of supply risks:
The
Company depends on two contract manufacturers and several limited or single source component suppliers, including, Samsung SDI, that provides
lithium-ion battery cells required for the Company's residential storage solution. Reliance on these vendors makes the Company vulnerable
to possible capacity constraints and reduced control over component availability, delivery schedules, manufacturing yields, and costs.
As
of December 31, 2022 and 2021, two contract manufacturers collectively accounted for 34.3%
and 27.9%
of the Company’s total trade payables, net, respectively.
In
the second quarter of 2022, the Company announced the opening of “Sella 2”, a two gigawatt-hour (GWh) Li-Ion battery cell
manufacturing facility located in South Korea. Sella 2 is in the ramp-up phase, that is expected to continue throughout 2023. Sella
2 is the Company's second owned manufacturing facility following the establishment of Sella 1 in 2020. Sella 1 is the Company's manufacturing
facility in the North of Israel that produces power optimizers and inverters for the Company's solar activities. |
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| Fair value of financial instruments |
ac.Fair
value of financial instruments:
The
following methods and assumptions were used by the Company in estimating the fair value of its financial instruments:
The
carrying value of cash and cash equivalents, short-term bank deposits, restricted bank deposits, trade receivables, net, long term bank
loans and current maturities, prepaid expenses and other current assets, trade payables, net, employee and payroll accruals and accrued
expenses and other current liabilities approximate their fair values due to the short-term maturities of such instruments.
Assets
measured at fair value on a recurring basis as of December 31, 2022 and 2021 are comprised of money market funds, derivative
instruments and marketable securities (see Note 12).
The
Company applies ASC 820 “Fair Value Measurements and Disclosures”, with respect to fair value measurements of all financial
assets and liabilities. Fair value is an exit price, representing the amount that would be received for the sale of an asset or paid to
transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should
be determined based on assumptions that market participants would use in pricing an asset or a liability.
A three-tiered fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value: Level
1 -Observable inputs that reflect quoted prices (unadjusted) for identical assets
or liabilities in active markets.
Level
2 -Include other inputs that are directly or indirectly observable in the marketplace.
Level
3 -Unobservable inputs which are supported by little or no market activity.
The
fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when
measuring fair value.
|
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| Stock-based compensation |
ad.Stock-based
compensation:
The
Company uses the closing trading price of its common stock on the day before the grant date as the fair value of awards of restricted
stock units ("RSUs"), and performance stock units that are based on the Company's financial performance targets ("PSUs"). The compensation
expense for RSUs is recognized using a straight-line attribution method over the requisite employee service period while compensation
expense for PSUs is recognized using an accelerated amortization model. The Company estimates the forfeitures at the time of grant and
revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Estimated forfeitures are based on actual
historical pre-vesting forfeitures.
The Company granted under its 2015 Plan, PSU awards to certain employees and officers which vest upon the achievement of certain performance or market conditions subject to their continued employment with the Company.
The market condition for the PSUs is based on the Company’s total shareholder return ("TSR") compared to the TSR of companies listed in the S&P 500 index over a one to three year performance period. The Company uses a Monte-Carlo simulation to determine the grant date fair value for these awards, which takes into consideration the market price of a share of the Company’s common stock on the date of grant less the present value of dividends expected during the requisite service period, as well as the possible outcomes pertaining to the TSR market condition. The Company recognizes such compensation expenses on an accelerated vesting method. The
Company selected the Black-Scholes-Merton option-pricing model as the most appropriate fair value method for its stock-option awards and
Employee Stock Purchase Plan (“ESPP”). The option-pricing model requires a number of assumptions, of which the most significant
are the fair market value of the underlying common stock, expected stock price volatility, and the expected option term. Expected volatility
for stock-option awards and ESPP was calculated based upon the Company’s stock prices. The expected term of options granted is based
upon historical experience and represents the period between the options’ grant date and the expected exercise or expiration date.
The risk-free interest rate is based on the yield from U.S. treasury bonds with an equivalent term. The Company does not use dividend
yield rate since the Company has not declared or paid any dividends on its common stock and does not expect to pay any dividends in the
foreseeable future.
A
modification of the terms of a stock-based award is treated as an exchange of the original award for a new award with total compensation
cost equal to the grant-date fair value of the original award plus the incremental value of the modification to the award.
The fair value for options granted to employees and ESPP in the years ended December 31, 2022, 2021 and 2020, is estimated at the date of grant using the following assumptions:
(1)
No new options were granted in 2022. |
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| Earnings per share |
ae.Earnings
per share
Basic
net EPS is computed by dividing the net earnings attributable to SolarEdge Technologies, Inc. by the weighted-average number of shares
of common stock outstanding during the period.
Diluted
net EPS is computed by giving effect to all potential shares of common stock, to the extent dilutive, including stock options, RSUs, PSUs,
shares to be purchased under the Company’s ESPP, and the Notes due 2025, all in accordance with ASC No. 260, "Earnings Per Share."
|
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| Income taxes |
af.Income
taxes:
The
Company and its subsidiaries account for income taxes in accordance with ASC 740, “Income Taxes”. ASC 740 prescribes the use
of the liability method, whereby deferred tax asset and liability account balances are determined based on differences between financial
reporting and tax bases of assets and liabilities and are measured using the enacted tax rates that will be in effect when the differences
are expected to reverse.
Deferred
income tax balances reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their tax
bases and are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered. Deferred tax assets are
evaluated for future realization and reduced by a valuation allowance to the extent the Company believes they will not be realized. The
Company considers all available evidence, including historical information, long range forecast of future taxable income and evaluation
of tax planning strategies. Amounts recorded for valuation allowance can result from a complex series of judgments about future events
and can rely on estimates and assumptions.
Tax has not been recorded for (a) taxes that would apply in the event of disposal of investments in subsidiaries, as it is generally the Company’s intention to hold these investments, not to realize them; and (b) taxes that would apply on the distribution of unremitted earnings from foreign subsidiaries, as these are retained for reinvestment in the Group. The
Company accounts for uncertain tax positions in accordance with ASC 740-10 two-step approach to recognizing and measuring uncertain tax
positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of
available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be
sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit
as the largest amount that is more than 50% (cumulative probability) likely to be realized upon ultimate settlement.
|
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| New accounting pronouncements not yet effective |
ag.New
accounting pronouncements not yet effective:
From
time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB") or other standard setting
bodies are adopted by the Company as of the specified effective date. The Company believes that the impact of recently issued standards
that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.
|
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| Recently issued and adopted pronouncements |
ah.Recently
issued and adopted pronouncements:
In
October 2021, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2021-08, Accounting for Contract Assets and
Contract Liabilities from Contracts with Customers (Topic 805). This ASU requires an acquirer in a business combination to recognize and
measure contract assets and contract liabilities (deferred revenue) from acquired contracts using the revenue recognition guidance in
Topic 606. At the acquisition date, the acquirer applies the revenue model as if it had originated the acquired contracts. The ASU is
effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. Adoption of the ASU
should be applied prospectively. Early adoption is also permitted, including adoption in an interim period. The Company elected to early
adopt ASU 2021-08 on January 1, 2022, and will apply this new guidance to all business combinations consummated subsequent to this date.
Currently, this ASU has no impact on the Company's consolidated financial statements.
In
November 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2021-10, Government
Assistance (Topic 832): Disclosures by Business Entities about Government Assistance. Under ASU 2021-10, the accounting entities with
transactions with a government that are accounted for by analogy to a grant or contribution accounting model are required to annually
disclose certain information regarding the transaction including: (i) nature and related accounting policy used; (ii) line items on the
balance sheet and income statement affected by the transactions; (iii) amounts applicable to each line item; and (iv) significant terms
and conditions. This guidance is effective for financial statements issued for annual periods beginning after December 15, 2021. The adoption
of this ASU has a minor impact on the disclosures to the annual consolidated financial statements. ai.Certain
prior period amounts have been reclassified to conform to the current period presentation. |
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Allowance for Credit Losses |
The
following table provides a roll-forward of the allowance for credit losses that is deducted from the amortized cost basis of trade receivables
to present the net amount expected to be collected:
|
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| Schedule of Estimated Useful Lives of Property and Equipment |
Property,
plant and equipment are stated at cost, net of accumulated depreciation and government grants. Assets under construction represent the
construction or development stage of property and equipment that have not yet been placed in service for the Company's intended use. Depreciation
is calculated by the straight-line method over the estimated useful life of the assets, at the following rates:
|
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| Option [Member] | Employees and Members of Board of Directors [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Assumptions Used to Estimate Fair Value of Stock Options and Warrants |
|
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MARKETABLE SECURITIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Marketable Securities Tables Abstract | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Amortized Cost of Available-For-Sale Marketable Securities |
The
following is a summary of available-for-sale marketable securities at December 31, 2022:
The
following is a summary of available-for-sale marketable securities at December 31, 2021:
|
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INVENTORIES, NET (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Inventories |
|
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PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Prepaid Expenses and Other Current Assets |
|
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PROPERTY, PLANT AND EQUIPMENT, NET (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Property and Equipment |
|
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LEASES (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lessee Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Lease-related Assets and Liabilities |
The following table summarizes the Company’s lease-related assets and liabilities recorded in the consolidated balance sheets:
|
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| Schedule of Information Related to Operating Finance Leases |
The following table presents certain information related to the operating and finance leases:
|
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| Schedule of Supplemental Cash Flow Information Related to Leases |
The following table presents supplemental cash flows information related to the lease costs for operating and finance leases:
|
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| Schedule of Operating and Finance lease liabilities |
The following table reconciles the undiscounted cash flows for each of the first five years and the total of the remaining years of the operating and finance lease liabilities recorded in the consolidated balance sheets:
|
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INTANGIBLE ASSETS, NET (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Acquired Intangible Assets |
|
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| Schedule of Future Amortization Expense |
|
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GOODWILL (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Goodwill activity |
|
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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of fair values of outstanding derivative instruments |
|
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| Schedule of gains (losses) on derivative instruments recognized in our income statements |
|
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| Schedule of gains (losses) on derivative instruments recognized in the consolidated comprehensive income statements |
|
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FAIR VALUE MEASUREMENTS (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Measurements Tables Abstract | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Assets and Liabilities Measured at Fair Value |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
WARRANTY OBLIGATIONS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Product Warranties Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Warranty Obligations |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEFERRED REVENUES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue Recognition and Deferred Revenue [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Balances of Deferred Revenues |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule Estimated Revenues Expected To Recognized In Future To Performance Obligations |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Payables and Accruals [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Accrued Expenses and Other Current Liabilities |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONVERTIBLE SENIOR NOTES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Convertible Senior Notes |
|
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OTHER LONG TERM LIABILITIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Other Long Term Liabilities |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK CAPITAL (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of activity in the share options granted to employees and members of board of directors |
|
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| Schedule of RSU activity |
|
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| Schedule of recognized stock-based compensation expenses |
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| Option [Member] | Employees and members of board of directors | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of RSU activity |
|
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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accumulated Other Comprehensive Income Loss [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Changes in AOCI |
|
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| Schedule of Reclassifications out of AOCI |
The following table provides details about reclassifications out of accumulated other comprehensive income (loss) for the years ended December 31, 2022, 2021 and 2020:
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EARNINGS PER SHARE (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Computation of Basic and Diluted Net Earnings (Loss) Per Share |
The following table presents the computation of basic and diluted EPS attributable to SolarEdge Technologies Inc.:
|
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GOODWILL IMPAIRMENT AND OTHER OPERATING EXPENSES (INCOME), NET (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Operating Income Expenses [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of goodwill impairment and other operating expenses income |
1
In June 2022, the Company decided to discontinue its stand-alone Critical Power activities. The Company recorded a loss related
to its Critical Power business in the amount of $2,782
(see Note 9). In addition,
in October 2022, as a result of an impairment test performed on the e-Mobility and Automation Machines reporting units, the Company recorded
a loss of $80,534
and $6,788,
respectively (see Note 9).
2
In October 2022, the Company recorded a loss of $26,917
and $245
as a result of an impairment test performed on e-Mobility and Automation Machines, respectively, a loss of $1,226
due to the discontinuance of Critical Power activities (see Note 8) and other miscellaneous items.
3
In the year ended December 31, 2021, the Company received a payment of $859
out of the SolarEdge Korea (formerly Kokam) acquisition escrow, with regards to a working capital adjustment. In the year ended December
31, 2020, the Company was indemnified for an amount of $4,900
out of the escrow, with regards to a legal claim of SolarEdge Korea (formerly Kokam) that was settled in arbitration.
|
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INCOME TAXES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of deferred tax liabilities and assets |
Significant components of the Company’s deferred tax liabilities and assets are as follows:
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| Schedule of Uncertain Tax Positions |
e.
Uncertain tax positions are comprised as follows:
|
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| Schedule of Income (Loss) Before Taxes |
f.
Income before income taxes are comprised as follows:
|
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| Schedule of Income taxes |
g.
Income taxes (tax benefit) are comprised as follows:
|
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| Schedule of Reconciliation Between the Theoretical Tax Expense and the Actual Tax Expense (Benefit) |
A
reconciliation between the theoretical tax expense and the actual tax expense as reported in the consolidated statements of income is
as follows:
|
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FINANCIAL (EXPENSES) INCOME, NET (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Nonoperating Income (Expense) [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Financial Expenses (Income), Net |
|
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SEGMENT, GEOGRAPHIC AND PRODUCT INFORMATION (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Reportable Segments and Operating Income |
The “All other” category includes the design, development, manufacturing and sales of energy storage products, e-Mobility products, UPS products and automated machines The following table presents information on reportable segments profit (loss) for the period presented:
|
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| Schedule of Reportable Segments Reconciliation to Consolidated Revenues |
The following table presents information on reportable segments reconciliation to consolidated revenues for the periods presented:
The following table presents information on reportable segments reconciliation to consolidated operating income for the periods presented:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Revenues Within Geographic Areas |
b. Revenues by geographic, based on Customers’ location:
(*) Except for Germany, Netherlands and Italy |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Revenues By Product Family |
c. Revenues by type:
|
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| Schedule of Long-lived Assets By Geographic Region |
d. Long-lived assets by geographic location:
(*) Long-lived assets are comprised of property and equipment, net and Operating lease right-of-use assets, net. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Significant Accounting Policies [Line Items] | |||
| Reduction of fixed assets | $ 7,359 | $ 4,842 | |
| Prepaid expenses and other current assets | 9,233 | ||
| Impairment of long-lived assets | 29,037 | 2,209 | $ 1,471 |
| Impairment of goodwill | 90,104 | ||
| Capitalized implementation costs related to ERP conversion | 3,457 | ||
| Severance pay | |||
| Severance expenses | 17,202 | 14,231 | 10,598 |
| Shipping and handling costs | |||
| Shipping and handling costs | $ 257,753 | 116,574 | 101,597 |
| Warranty obligations | |||
| Minimum term of warranty obligation for StorEdge products. | 10 years | ||
| Minimum term of warranty obligations for inverters | 12 years | ||
| Minimum term of warranty obligations for power optimizers | 25 years | ||
| Maximum extended product warranty period | 25 years | ||
| Derivative financial instruments | |||
| Cumulative effect of adopting ASU 2020-06 on retained earnings | $ 2,884 | ||
| Cumulative effect of adopting ASU 2020-06 on additional paid-in capital | 36,336 | ||
| Cumulative effect of adopting ASU 2020-06 on convertible senior notes | 45,282 | ||
| Cumulative effect of adopting ASU 2020-06 on deferred tax liabilities | 11,830 | ||
| Advertising expenses | 11,090 | 6,323 | $ 4,199 |
| Accrued Exchange Fee Rebate | $ 176,706 | $ 152,717 | |
| Sales Revenue, Goods, Net [Member] | Customer Concentration Risk [Member] | Major Customer One [Member] | |||
| Derivative financial instruments | |||
| Concentration risk percentage | 18.50% | 30.90% | 14.80% |
| Accounts Receivable [Member] | Customer Concentration Risk [Member] | Major Customer One [Member] | |||
| Derivative financial instruments | |||
| Concentration risk percentage | 42.20% | 39.30% | |
| Accounts Payable [Member] | Supplier Concentration Risk [Member] | Two Contract Manufacturers [Member] | |||
| Derivative financial instruments | |||
| Concentration risk percentage | 34.30% | 27.90% | |
| Israeli Ministry Of Economy And Industry [Member] | Sella One Factory [Member] | |||
| Significant Accounting Policies [Line Items] | |||
| Subsidy amount | $ 7,000 | ||
| Chungcheongbuk-do Province Of South Korea [Member] | Sella Two Factory [Member] | |||
| Significant Accounting Policies [Line Items] | |||
| Subsidy amount | $ 12,000 | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Allowance for Credit Losses) (Details) $ in Thousands |
12 Months Ended |
|---|---|
|
Dec. 31, 2022
USD ($)
| |
| Accounting Policies [Abstract] | |
| Balance, at beginning of period | $ 2,626 |
| Increase in provision for expected credit losses | 679 |
| Amounts written off charged against the allowance and others | (103) |
| Balance, at end of period | $ 3,202 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Estimated Useful Lives of Property and Equipment) (Details) |
12 Months Ended |
|---|---|
Dec. 31, 2022 | |
| Buildings and plants [Member] | |
| Property, Plant and Equipment [Line Items] | |
| Property and equipment, depreciation rate | 2.50% |
| Buildings and plants [Member] | Minimum [Member] | |
| Property, Plant and Equipment [Line Items] | |
| Property and equipment, depreciation rate | 2.50% |
| Buildings and plants [Member] | Maximum [Member] | |
| Property, Plant and Equipment [Line Items] | |
| Property and equipment, depreciation rate | 5.70% |
| Computers and peripheral equipment [Member] | |
| Property, Plant and Equipment [Line Items] | |
| Property and equipment, depreciation rate | 33.30% |
| Computers and peripheral equipment [Member] | Minimum [Member] | |
| Property, Plant and Equipment [Line Items] | |
| Property and equipment, depreciation rate | 14.30% |
| Computers and peripheral equipment [Member] | Maximum [Member] | |
| Property, Plant and Equipment [Line Items] | |
| Property and equipment, depreciation rate | 33.30% |
| Office furniture and fixtures [Member] | |
| Property, Plant and Equipment [Line Items] | |
| Property and equipment, depreciation rate | 7.00% |
| Office furniture and fixtures [Member] | Minimum [Member] | |
| Property, Plant and Equipment [Line Items] | |
| Property and equipment, depreciation rate | 7.00% |
| Office furniture and fixtures [Member] | Maximum [Member] | |
| Property, Plant and Equipment [Line Items] | |
| Property and equipment, depreciation rate | 25.00% |
| Machinery and Equipment [Member] | |
| Property, Plant and Equipment [Line Items] | |
| Property and equipment, depreciation rate | 10.00% |
| Machinery and Equipment [Member] | Minimum [Member] | |
| Property, Plant and Equipment [Line Items] | |
| Property and equipment, depreciation rate | 9.00% |
| Machinery and Equipment [Member] | Maximum [Member] | |
| Property, Plant and Equipment [Line Items] | |
| Property and equipment, depreciation rate | 33.30% |
| Laboratory Equipment [Member] | |
| Property, Plant and Equipment [Line Items] | |
| Property and equipment, depreciation rate | 10.00% |
| Laboratory Equipment [Member] | Minimum [Member] | |
| Property, Plant and Equipment [Line Items] | |
| Property and equipment, depreciation rate | 7.00% |
| Laboratory Equipment [Member] | Maximum [Member] | |
| Property, Plant and Equipment [Line Items] | |
| Property and equipment, depreciation rate | 20.00% |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Estimate Fair Value of Stock Options and Warrants) (Details) - Employee and Executive Director [Member] |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Employee Stock Option [Member] | |||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
| Risk-free interest | 0.00% | 0.43% | 1.73% |
| Dividend yields | 0.00% | 0.00% | 0.00% |
| Volatility | 0.00% | 60.74% | 58.98% |
| Expected option term in years | 5 years 5 months 23 days | 6 years | |
| Estimated forfeiture rate | 0.00% | 0.00% | 0.00% |
| ESPP [Member] | |||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
| Dividend yields | 0.00% | 0.00% | 0.00% |
| Expected option term in years | 6 years | 6 years | 6 years |
| ESPP [Member] | Minimum [Member] | |||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
| Risk-free interest | 1.64% | 0.03% | 0.09% |
| Volatility | 71.28% | 48.39% | 55.95% |
| ESPP [Member] | Maximum [Member] | |||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
| Risk-free interest | 4.70% | 0.10% | 1.63% |
| Volatility | 71.97% | 76.05% | 92.57% |
| PSU [Member] | |||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
| Risk-free interest | 1.77% | 0.00% | 0.00% |
| Dividend yields | 0.00% | 0.00% | 0.00% |
| Volatility | 67.42% | 0.00% | 0.00% |
| PSU [Member] | Minimum [Member] | |||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
| Expected option term in years | 1 year | ||
| PSU [Member] | Maximum [Member] | |||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
| Expected option term in years | 3 years | ||
MARKETABLE SECURITIES (Narrative) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Marketable Securities Schedule Of Contractual Maturities Details [Abstract] | |||
| Proceeds from maturity of available-for-sale | $ 201,974 | $ 187,375 | $ 141,839 |
| Proceeds from sale of available-for-sale securities | 29,236 | 14,813 | |
| Realized loss | $ 434 | $ 16 | |
MARKETABLE SECURITIES (Schedule of Available-For-Sale Securities) (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Marketable Securities [Line Items] | ||
| Available for-sale - matures within one year, amortized cost | $ 246,327 | $ 168,038 |
| Available for-sale - matures within one year, gross unrealized gains | 0 | 23 |
| Available for-sale - matures within one year, gross unrealized losses | (5,210) | (333) |
| Available for-sale - matures within one year, fair value | 241,117 | 167,728 |
| Available for-sale - matures after one year, amortized cost | 672,488 | 487,918 |
| Available for-sale - matures after one year, gross unrealized gains | 80 | 9 |
| Available for-sale - matures after one year, gross unrealized losses | (27,077) | (5,699) |
| Available for-sale - matures after one year, fair value | 645,491 | 482,228 |
| Amortized cost | 918,815 | 655,956 |
| Gross unrealized gains | 80 | 32 |
| Gross unrealized losses | (32,287) | (6,032) |
| Fair value | 886,608 | 649,956 |
| Corporate bonds [Member] | ||
| Marketable Securities [Line Items] | ||
| Available for-sale - matures within one year, amortized cost | 222,482 | 160,462 |
| Available for-sale - matures within one year, gross unrealized gains | 0 | 23 |
| Available for-sale - matures within one year, gross unrealized losses | (4,657) | (320) |
| Available for-sale - matures within one year, fair value | 217,825 | 160,165 |
| Available for-sale - matures after one year, amortized cost | 657,238 | 474,412 |
| Available for-sale - matures after one year, gross unrealized gains | 80 | 9 |
| Available for-sale - matures after one year, gross unrealized losses | (26,460) | (5,580) |
| Available for-sale - matures after one year, fair value | 630,858 | 468,841 |
| Governmental bonds [Member] | ||
| Marketable Securities [Line Items] | ||
| Available for-sale - matures within one year, amortized cost | 23,845 | 7,576 |
| Available for-sale - matures within one year, gross unrealized gains | 0 | 0 |
| Available for-sale - matures within one year, gross unrealized losses | (553) | (13) |
| Available for-sale - matures within one year, fair value | 23,292 | 7,563 |
| Available for-sale - matures after one year, amortized cost | 15,250 | 13,506 |
| Available for-sale - matures after one year, gross unrealized gains | 0 | 0 |
| Available for-sale - matures after one year, gross unrealized losses | (617) | (119) |
| Available for-sale - matures after one year, fair value | $ 14,633 | $ 13,387 |
INVENTORIES, NET (Narrative) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Inventory Disclosure [Abstract] | |||
| Inventory Write-down | $ 10,170 | $ 7,142 | $ 8,864 |
INVENTORIES, NET (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Inventory Disclosure [Abstract] | ||
| Raw materials | $ 503,257 | $ 247,386 |
| Work in process | 23,407 | 13,863 |
| Finished goods | 202,537 | 118,894 |
| Inventories | $ 729,201 | $ 380,143 |
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
||||||
|---|---|---|---|---|---|---|---|---|
| Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||||||||
| Vendor non-trade receivables | $ 147,597 | [1] | $ 71,041 | [2] | ||||
| Government authorities | 55,670 | 63,440 | ||||||
| Prepaid expenses and other | 37,815 | 42,511 | ||||||
| Prepaid expenses and other current assets | $ 241,082 | $ 176,992 | ||||||
| ||||||||
PROPERTY, PLANT AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Property, Plant and Equipment [Line Items] | |||
| Gross Property, plant and equipment | $ 728,499 | $ 560,879 | |
| Less - accumulated depreciation | 184,530 | 150,500 | |
| Total property, plant and equipment, net | 543,969 | 410,379 | |
| Depreciation expenses | 40,580 | 29,359 | $ 22,355 |
| Land [Member] | |||
| Property, Plant and Equipment [Line Items] | |||
| Gross Property, plant and equipment | 13,070 | 13,829 | |
| Buildings and plants [Member] | |||
| Property, Plant and Equipment [Line Items] | |||
| Gross Property, plant and equipment | 152,218 | 62,519 | |
| Computers and peripheral equipment [Member] | |||
| Property, Plant and Equipment [Line Items] | |||
| Gross Property, plant and equipment | 46,376 | 44,960 | |
| Office furniture and equipment [Member] | |||
| Property, Plant and Equipment [Line Items] | |||
| Gross Property, plant and equipment | 10,911 | 10,772 | |
| Laboratory and testing equipment [Member] | |||
| Property, Plant and Equipment [Line Items] | |||
| Gross Property, plant and equipment | 58,454 | 41,365 | |
| Machinery and equipment [Member] | |||
| Property, Plant and Equipment [Line Items] | |||
| Gross Property, plant and equipment | 315,155 | 201,406 | |
| Leasehold improvements [Member] | |||
| Property, Plant and Equipment [Line Items] | |||
| Gross Property, plant and equipment | 85,147 | 73,991 | |
| Assets under construction and payments on account [Member] | |||
| Property, Plant and Equipment [Line Items] | |||
| Gross Property, plant and equipment | $ 47,168 | $ 112,037 | |
LEASES (Schedule of Lease-Related Assets and Liabilities) (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Assets: | ||
| Total lease assets | $ 115,688 | $ 88,895 |
| Liabilities: | ||
| Operating leases long term | 46,256 | 38,912 |
| Finance leases long term | 45,385 | 40,508 |
| Total lease liabilities | 111,087 | 94,023 |
| Accrued expenses and other current liabilities [Member] | ||
| Liabilities: | ||
| Operating leases short term | 16,183 | 12,728 |
| Finance leases short term | 3,263 | 1,875 |
| Operating lease liabilities [Member] | ||
| Liabilities: | ||
| Operating leases long term | 46,256 | 38,912 |
| Other long term liabilities [Member] | ||
| Liabilities: | ||
| Finance leases long term | 45,385 | 40,508 |
| Operating lease right-of use assets, net [Member] | ||
| Assets: | ||
| Operating lease assets, net of lease incentive obligation | 62,754 | 47,137 |
| Property, plant and equipment, net [Member] | ||
| Assets: | ||
| Finance lease assets | $ 52,934 | $ 41,758 |
LEASES (Schedule of Information Related to Operating and Finance Leases) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
| Finance leases: | ||
| Finance lease cost | $ 4,196 | $ 2,065 |
| Weighted average remaining lease term in years | 16 years 3 months 10 days | 16 years 5 months 4 days |
| Weighted average annual discount rate | 2.30% | 1.93% |
| Operating leases: | ||
| Operating lease cost | $ 15,901 | $ 14,890 |
| Weighted average remaining lease term in years | 8 years 3 months 29 days | 10 years 3 months |
| Weighted average annual discount rate | 2.17% | 1.68% |
LEASES (Schedule of Supplemental Cash Flow Information Related to Leases) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
| Cash Paid For Amounts Included In Measurement Of Lease Liabilities [Abstract] | ||
| Operating cash flows for operating leases | $ 16,343 | $ 14,890 |
| Operating cash flows for finance leases | 420 | 523 |
| Financing cash flows for finance leases | $ 2,834 | $ 1,293 |
LEASES (Schedule of Operating and Finance lease liabilities) (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Operating leases | ||
| 2023 | $ 16,330 | |
| 2024 | 14,746 | |
| 2025 | 7,338 | |
| 2026 | 4,246 | |
| 2027 | 3,285 | |
| Thereafter | 22,085 | |
| Total lease payments | 68,030 | |
| Less amount of lease payments representing interest | (5,591) | |
| Present value of future lease payments | 62,439 | |
| Less current lease liabilities | (16,183) | |
| Long-term lease liabilities | 46,256 | $ 38,912 |
| Finance lease | ||
| 2023 | 3,298 | |
| 2024 | 3,369 | |
| 2025 | 3,539 | |
| 2026 | 3,539 | |
| 2027 | 4,083 | |
| Thereafter | 40,445 | |
| Total lease payments | 58,273 | |
| Less amount of lease payments representing interest | (9,625) | |
| Present value of future lease payments | 48,648 | |
| Less current lease liabilities | (3,263) | |
| Finance lease liabilities | $ 45,385 | $ 40,508 |
INTANGIBLE ASSETS, NET (Narrative) (Details) - USD ($) $ in Thousands |
1 Months Ended | 12 Months Ended | |||
|---|---|---|---|---|---|
Oct. 31, 2022 |
Jun. 30, 2022 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Indefinite-Lived Intangible Assets [Line Items] | |||||
| Amortization expenses | $ 9,096 | $ 10,176 | $ 9,479 | ||
| Goodwill and Intangible Asset Impairment | $ (90,104) | $ 0 | $ 0 | ||
| Automation Machines [Member] | |||||
| Indefinite-Lived Intangible Assets [Line Items] | |||||
| Amount of impairment loss | $ 245 | ||||
| Goodwill and Intangible Asset Impairment | 245 | ||||
| Critical Power [Member] | |||||
| Indefinite-Lived Intangible Assets [Line Items] | |||||
| Gain (loss) on intangible assets | $ 1,226 | ||||
| Goodwill and Intangible Asset Impairment | 1,226 | ||||
| Technology [Member] | |||||
| Indefinite-Lived Intangible Assets [Line Items] | |||||
| Amount of impairment loss | $ 26,917 | ||||
INTANGIBLE ASSETS, NET (schedule of acquired intangible assets) (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Finite-lived intangible assets: | ||
| Gross intangible assets | $ 40,416 | $ 87,826 |
| Less - accumulated amortization | (20,487) | (28,965) |
| Total intangible assets, net | 19,929 | 58,861 |
| Current Technology [Member] | ||
| Finite-lived intangible assets: | ||
| Gross intangible assets | 29,196 | 74,976 |
| Customer Relationships [Member] | ||
| Finite-lived intangible assets: | ||
| Gross intangible assets | 2,958 | 3,946 |
| Trade names [Member] | ||
| Finite-lived intangible assets: | ||
| Gross intangible assets | 3,287 | 3,929 |
| Assembled Workforce [Member] | ||
| Finite-lived intangible assets: | ||
| Gross intangible assets | 3,575 | 3,575 |
| Patents [Member] | ||
| Finite-lived intangible assets: | ||
| Gross intangible assets | $ 1,400 | $ 1,400 |
INTANGIBLE ASSETS, NET (schedule of future amortization expense) (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Goodwill and Intangible Assets Disclosure [Abstract] | ||
| 2023 | $ 5,736 | |
| 2024 | 5,717 | |
| 2025 | 3,890 | |
| 2026 | 3,826 | |
| 2027 | 558 | |
| 2028 and thereafter | 202 | |
| Total intangible assets, net | $ 19,929 | $ 58,861 |
GOODWILL (Narrative) (Details) - USD ($) $ in Thousands |
1 Months Ended | 12 Months Ended | |||
|---|---|---|---|---|---|
Oct. 31, 2022 |
Jun. 30, 2022 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Goodwill [Line Items] | |||||
| Accumulated goodwill impairment losses | $ 90,104 | ||||
| Impairment goodwill | $ (90,104) | $ 0 | $ 0 | ||
| e-Mobility components and telematics [Member] | |||||
| Goodwill [Line Items] | |||||
| Goodwill, Impairment Loss | $ 80,534 | ||||
| Impairment goodwill | 26,917 | ||||
| Automation Machines [Member] | |||||
| Goodwill [Line Items] | |||||
| Goodwill, Impairment Loss | 6,788 | ||||
| Impairment goodwill | 245 | ||||
| Critical Power [Member] | |||||
| Goodwill [Line Items] | |||||
| Goodwill, Impairment Loss | $ 2,782 | ||||
| Impairment goodwill | $ 1,226 | ||||
GOODWILL (Details) - USD ($) $ in Thousands |
12 Months Ended | |
|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
| Acquired Finite-Lived Intangible Assets [Line Items] | ||
| Goodwill at January 1 | $ 129,629 | $ 140,479 |
| Foreign currency adjustments | (8,336) | (10,850) |
| Accumulated impairment losses | (90,104) | |
| Goodwill at December 31 | 31,189 | 129,629 |
| Solar [Member] | ||
| Acquired Finite-Lived Intangible Assets [Line Items] | ||
| Goodwill at January 1 | 30,505 | 33,255 |
| Foreign currency adjustments | (1,737) | (2,750) |
| Accumulated impairment losses | 0 | |
| Goodwill at December 31 | 28,768 | 30,505 |
| All other [Member] | ||
| Acquired Finite-Lived Intangible Assets [Line Items] | ||
| Goodwill at January 1 | 99,124 | 107,224 |
| Foreign currency adjustments | (6,599) | (8,100) |
| Accumulated impairment losses | (90,104) | |
| Goodwill at December 31 | $ 2,421 | $ 99,124 |
INVESTMENT IN PRIVATELY-HELD COMPANY (Narrative) (Details) - USD ($) $ in Thousands |
1 Months Ended | 12 Months Ended | ||||
|---|---|---|---|---|---|---|
Jul. 20, 2022 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Feb. 01, 2021 |
Jan. 31, 2021 |
|
| Schedule of Equity Method Investments [Line Items] | ||||||
| Sale of investment | $ 24,362 | $ 0 | $ 0 | |||
| Auto Grid Systems [Member] | ||||||
| Schedule of Equity Method Investments [Line Items] | ||||||
| Equity investment in privately held company without readily determinable fair value | $ 16,643 | $ 5,000 | $ 11,643 | |||
| Sale of investment | $ 24,362 | |||||
| Recognized gain on sale of investment | $ 7,719 | |||||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Narrative) (Details) - Foreign exchange forward contracts [Member] - NIS [Member] $ in Millions |
Dec. 31, 2022
USD ($)
|
|---|---|
| Put option [Member] | |
| Derivative [Line Items] | |
| Forward/option contracts | $ 194 |
| Call option [Member] | |
| Derivative [Line Items] | |
| Forward/option contracts | $ 18 |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Schedule of fair values of outstanding derivative instruments) (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Derivative assets of options and forward contracts: | ||
| Total derivative assets | $ 0 | $ 4,009 |
| Derivative liabilities of options and forward contracts: | ||
| Total derivative liabilities | (1,874) | (169) |
| Designated cash flow hedges [Member] | Prepaid expenses and other current assets [Member] | ||
| Derivative assets of options and forward contracts: | ||
| Total derivative assets | 0 | 992 |
| Designated cash flow hedges [Member] | Accrued expenses and other current liabilities [Member] | ||
| Derivative liabilities of options and forward contracts: | ||
| Total derivative liabilities | (1,874) | 0 |
| Non-designated hedges [Member] | Prepaid expenses and other current assets [Member] | ||
| Derivative assets of options and forward contracts: | ||
| Total derivative assets | 0 | 3,017 |
| Non-designated hedges [Member] | Accrued expenses and other current liabilities [Member] | ||
| Derivative liabilities of options and forward contracts: | ||
| Total derivative liabilities | $ 0 | $ (169) |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Schedule of Gains (losses) on derivative instruments recognized in our income statements) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Financial expenses, net [Member] | Non-designated hedges [Member] | |||
| Trading Activity, Gains and Losses, Net [Line Items] | |||
| Gains (losses) on derivative instruments | $ 4,716 | $ 9,417 | $ (4,013) |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Gains (losses) on derivative instruments recognized in the consolidated comprehensive income statements) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Other Comprehensive Income (Loss) [Member] | Designated cash flow hedges [Member] | Foreign exchange contracts [Member] | |||
| Trading Activity, Gains and Losses, Net [Line Items] | |||
| Gains (losses) on derivative instruments recognized in the consolidated comprehensive income | $ (8,965) | $ 3,289 | $ 966 |
FAIR VALUE MEASUREMENTS (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Level 1 [Member] | Cash [Member] | ||
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
| Fair value of assets | $ 695,004 | $ 508,389 |
| Level 1 [Member] | Money Market Funds [Member] | ||
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
| Fair value of assets | 25,149 | 21,680 |
| Level 1 [Member] | Deposits [Member] | ||
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
| Fair value of assets | 62,959 | 20 |
| Level 2 [Member] | Derivative instruments [Member] | ||
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
| Fair value of liabilities | (1,874) | (169) |
| Level 2 [Member] | Derivative instruments [Member] | ||
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
| Fair value of assets | 0 | 4,009 |
| Level 2 [Member] | Short-term corporate bonds [Member] | ||
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
| Fair value of assets | 217,825 | 160,165 |
| Level 2 [Member] | Short-term governmental bonds [Member] | ||
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
| Fair value of assets | 23,292 | 7,563 |
| Level 2 [Member] | Long-term corporate bonds [Member] | ||
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
| Fair value of assets | 630,858 | 468,841 |
| Level 2 [Member] | Long-term governmental bonds [Member] | ||
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
| Fair value of assets | $ 14,633 | $ 13,387 |
WARRANTY OBLIGATIONS (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Changes in the Company's product warranty liability | |||
| Balance, at the beginning of the period | $ 265,160 | $ 204,994 | $ 172,563 |
| Additions and adjustments to cost of revenues | 239,401 | 150,684 | 102,832 |
| Usage and current warranty expenses | (119,504) | (90,518) | (70,401) |
| Balance, at end of the period | 385,057 | 265,160 | 204,994 |
| Less current portion | (103,975) | (71,480) | (62,614) |
| Long term portion | $ 281,082 | $ 193,680 | $ 142,380 |
DEFERRED REVENUES (Schedule of Balances of Deferred Revenues) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Revenue Recognition and Deferred Revenue [Abstract] | |||
| Balance, at the beginning of the period | $ 169,345 | $ 140,020 | $ 160,797 |
| Revenue recognized | (23,017) | (26,093) | (72,046) |
| Increase in deferred revenues and customer advances | 67,249 | 55,418 | 51,269 |
| Balance, at the end of the period | 213,577 | 169,345 | 140,020 |
| Less current portion | (26,641) | (17,789) | (24,648) |
| Long term portion | $ 186,936 | $ 151,556 | $ 115,372 |
DEFERRED REVENUES (Schedule Estimated Revenues Expected To Recognized In Future To Performance Obligations) (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|---|---|---|---|---|
| Deferred Revenue Arrangement [Line Items] | ||||
| Deferred revenues | $ 213,577 | $ 169,345 | $ 140,020 | $ 160,797 |
| 2023 [Member] | ||||
| Deferred Revenue Arrangement [Line Items] | ||||
| Deferred revenues | 26,641 | |||
| 2024 [Member] | ||||
| Deferred Revenue Arrangement [Line Items] | ||||
| Deferred revenues | 10,891 | |||
| 2025 [Member] | ||||
| Deferred Revenue Arrangement [Line Items] | ||||
| Deferred revenues | 10,160 | |||
| 2026 [Member] | ||||
| Deferred Revenue Arrangement [Line Items] | ||||
| Deferred revenues | 9,691 | |||
| 2027 [Member] | ||||
| Deferred Revenue Arrangement [Line Items] | ||||
| Deferred revenues | 7,565 | |||
| Thereafter [Member] | ||||
| Deferred Revenue Arrangement [Line Items] | ||||
| Deferred revenues | $ 148,629 |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Payables and Accruals [Abstract] | ||
| Accrued expenses | $ 117,638 | $ 57,158 |
| Government authorities | 67,514 | 22,631 |
| Operating lease liabilities | 16,183 | 12,728 |
| Accrual for sales incentives | 6,790 | 3,048 |
| Provision for legal claims | 43 | 11,622 |
| Other | 5,944 | 2,192 |
| Total accrued expenses and other current liabilities | $ 214,112 | $ 109,379 |
CONVERTIBLE SENIOR NOTES (Narrative) (Details) $ / shares in Units, $ in Thousands |
1 Months Ended | 12 Months Ended | ||
|---|---|---|---|---|
|
Sep. 25, 2020
USD ($)
d
$ / shares
|
Dec. 31, 2022
USD ($)
|
Dec. 31, 2021
USD ($)
|
Dec. 31, 2020
USD ($)
|
|
| Debt Instrument [Line Items] | ||||
| Amortization of debt discount and debt issuance costs | $ 2,916 | $ 2,903 | $ 3,185 | |
| Convertible Senior Notes due 2025 [Member] | ||||
| Debt Instrument [Line Items] | ||||
| Debt conversion, description | On September 25, 2020, the Company sold $632,500 aggregate principal amount of its 0.00% convertible senior notes due 2025 (the “Notes”). The Notes were sold pursuant to an indenture, dated September 25, 2020 (the “Indenture”), between the Company and U.S. Bank National Association, as trustee (the “Trustee”). The Notes do not bear regular interest and mature on September 15, 2025, unless earlier repurchased or converted in accordance with their terms. The Notes are general senior unsecured obligations of the Company. Holders may convert their Notes prior to the close of business on the business day immediately preceding June 15, 2025 in multiples of $1,000 principal amount, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on December 31, 2020 (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five-business-day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of the Notes for each trading day of that five consecutive trading day period was less than 98% of the product of the last reported sale price of the common stock and the conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events as described in the Indenture. In addition, holders may convert their Notes, in multiples of $1,000 principal amount, at their option at any time beginning on or after June 15, 2025, and prior to the close of business on the second scheduled trading day immediately preceding the stated maturity date of the Notes, without regard to the foregoing circumstances. The initial conversion rate for the Notes was 3.5997 shares of common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $277.80 per share of common stock, subject to adjustment upon the occurrence of certain specified events as set forth in the Indenture. | |||
| Principal amount sold | $ 632,500 | |||
| Coupon rate | 0.00% | |||
| Maturity date | Sep. 15, 2025 | |||
| Conversion amount | $ 1,000 | $ 1,000 | ||
| Conversion days | d | 30 | |||
| Conversion rate | $ / shares | $ 3.5997 | |||
| Amount of conversion | $ 1,000 | |||
| Conversion price | $ / shares | $ 277.8 | |||
| Amortization of debt discount and debt issuance costs | $ 2,480 | |||
| Amortized term | 2 years 8 months 12 days | |||
| Effective interest | 0.47% | |||
| Amount by which the if-converted value of the Notes exceeded the principal amount | $ 12,452 | |||
| Senior Notes [Member] | Level 2 [Member] | ||||
| Debt Instrument [Line Items] | ||||
| Estimated fair value of notes | $ 831 | |||
CONVERTIBLE SENIOR NOTES (Schedule of Convertible Senior Notes) (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Liability: | ||
| Principal | $ 632,500 | $ 632,500 |
| Unamortized issuance costs | (8,049) | (10,965) |
| Net carrying amount | $ 624,451 | $ 621,535 |
OTHER LONG TERM LIABILITIES (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Other Liabilities Disclosure [Abstract] | ||
| Tax liabilities | $ 3,830 | $ 5,105 |
| Accrued severance pay | 9,848 | 10,632 |
| Other | 2,078 | 3,805 |
| Other non-current liabilities | $ 15,756 | $ 19,542 |
STOCK CAPITAL (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands |
1 Months Ended | 12 Months Ended | |||
|---|---|---|---|---|---|
Mar. 17, 2022 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Mar. 31, 2015 |
|
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
| Underwriters discounts and commissions | $ 27,140 | ||||
| Offering costs | $ 834 | ||||
| Number of shares of common stock reserved for issuance pursuant to stock awards under the plan | 10,000,000 | ||||
| Capitalized stock-based compensation | $ 380 | ||||
| Equity based compensation expenses to employees and nonemployees | 7,747 | $ 19,113 | $ 7,847 | ||
| Tax benefit realized from share-based compensation | 10,171 | 13,379 | 11,263 | ||
| Unrecognized compensation expense | 343,473 | ||||
| IPO [Member] | |||||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
| Common stock shares sold in public offerings | 2,300,000 | ||||
| Per share price of common stock sold | $ 295 | ||||
| IPO [Member] | Underwriting Agreement [Member] | |||||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
| Common stock shares sold in public offerings | 300,000 | ||||
| Underwriters discounts and commissions | $ 27,140 | ||||
| Offering costs | 834 | ||||
| Proceeds from secondary public offering, net of issuance costs | $ 650,526 | ||||
| Option [Member] | Employees and Members of Board of Directors [Member] | |||||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
| Intrinsic value of options exercised | $ 37,948 | $ 65,668 | $ 251,564 | ||
| Weighted average grant date fair values options granted to employees and executive directors | $ 168.71 | $ 62.11 | |||
| Option [Member] | 2007 Plan [Member] | |||||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
| Number of shares of common stock reserved for issuance pursuant to stock awards under the plan | 18,047,085 | ||||
| Number of shares available for future grant under the plan | 9,410,816 | ||||
| Option [Member] | 2015 Plan [Member] | |||||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
| Number of shares available for future grant under the plan | 8,617,974 | 379,358 | |||
| Percentage of common shares increase automatically each year | 5.00% | ||||
| ESPP [Member] | |||||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
| Number of shares of common stock reserved for issuance pursuant to stock awards under the plan | 3,662,737 | ||||
| Number of shares available for future grant under the plan | 2,923,861 | ||||
| Number of Common stock purchased | 738,876 | ||||
| Period of plan increase automatically number of shares | 487,643 | ||||
| Percentage of common shares increase automatically each year | 1.00% | ||||
| Maximum percentage of salary | 15.00% | ||||
| Aggregate limit per participant | $ 15 | ||||
| Purchase price of common stock, percent | 85.00% | ||||
STOCK CAPITAL (Summary of the Activity in the Share Options) (Details) - Option [Member] - Employees and Members of Board of Directors [Member] - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | |
|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
| Number of options | ||
| Outstanding at the beginning of the period | 474,280 | |
| Exercised | (135,008) | |
| Forfeited or expired | (243) | |
| Outstanding at the end of the period | 339,029 | 474,280 |
| Weighted average exercise price | ||
| Outstanding at the beginning of the period | $ 44.68 | |
| Exercised | 29.77 | |
| Forfeited or expired | 5.01 | |
| Outstanding at the end of the period | $ 50.64 | $ 44.68 |
| Weighted average remaining contractual term in years | ||
| Outstanding | 4 years 10 months 9 days | 5 years 2 months 19 days |
| Aggregate intrinsic Value | ||
| Outstanding | $ 79,414 | $ 112,479 |
| Exercised | $ 0 | |
| Vested and expected to vest at the end of the period | ||
| Number of options | 338,345 | |
| Weighted average exercise price | $ 50.45 | |
| Weighted average remaining contractual term in years | 4 years 10 months 6 days | |
| Aggregate intrinsic Value | $ 79,315 | |
| Exercisable at the end of the period | ||
| Number of options | 300,865 | |
| Weighted average exercise price | $ 38.52 | |
| Weighted average remaining contractual term in years | 4 years 6 months 29 days | |
| Aggregate intrinsic Value | $ 73,875 | |
STOCK CAPITAL (Schedule of RSUs and PSUs Activity) (Details) |
12 Months Ended |
|---|---|
|
Dec. 31, 2022
$ / shares
shares
| |
| Restricted Stock Units (RSUs) [Member] | |
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
| Unvested at beginning of period | shares | 1,759,972 |
| Granted | shares | 683,548 |
| Vested | shares | (805,872) |
| Forfeited | shares | (149,133) |
| Unvested at end of period | shares | 1,488,515 |
| Weighted average grant date fair value, beginning of period | $ / shares | $ 189.25 |
| Weighted average grant date fair value, granted | $ / shares | 266.06 |
| Weighted average grant date fair value, vested | $ / shares | 131.79 |
| Weighted average grant date fair value, forfeited | $ / shares | 214.65 |
| Weighted average grant date fair value, end of period | $ / shares | $ 232.05 |
| Phantom Share Units (PSUs) [Member] | |
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
| Unvested at beginning of period | shares | 108,595 |
| Granted | shares | 40,637 |
| Unvested at end of period | shares | 149,232 |
| Weighted average grant date fair value, beginning of period | $ / shares | $ 296.4 |
| Weighted average grant date fair value, granted | $ / shares | 294.48 |
| Weighted average grant date fair value, end of period | $ / shares | $ 295.88 |
STOCK CAPITAL (Schedule of Stock-based Compensation Expense for Employees and Nonemployee) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
| Share-based Payment Arrangement, Expense | $ 145,539 | $ 102,593 | $ 67,309 |
| Cost of Sales [Member] | |||
| Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
| Share-based Payment Arrangement, Expense | 21,818 | 18,743 | 11,082 |
| Research and Development Expense [Member] | |||
| Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
| Share-based Payment Arrangement, Expense | 63,211 | 45,424 | 27,048 |
| Selling and Marketing Expense [Member] | |||
| Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
| Share-based Payment Arrangement, Expense | 31,017 | 22,834 | 19,413 |
| General and Administrative Expense [Member] | |||
| Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
| Share-based Payment Arrangement, Expense | $ 29,493 | $ 15,592 | $ 9,766 |
COMMITMENTS AND CONTINGENT LIABILITIES (Narrative) (Details) $ in Thousands, € in Millions |
12 Months Ended | ||
|---|---|---|---|
|
Dec. 31, 2021
EUR (€)
|
Dec. 31, 2021
USD ($)
|
Dec. 31, 2022
USD ($)
|
|
| Loss Contingencies [Line Items] | |||
| Non-cancelable purchase obligations | $ 1,590,229 | ||
| Provision for loss | 7,002 | ||
| Contractual obligations for capital expenditures | 73,955 | ||
| Patents [Member] | |||
| Loss Contingencies [Line Items] | |||
| Value in dispute | $ 5,866 | ||
| Patents [Member] | Euro [Member] | |||
| Loss Contingencies [Line Items] | |||
| Value in dispute | € | € 5.5 | ||
| Office Rent Lease Agreements [Member] | |||
| Loss Contingencies [Line Items] | |||
| Guarantees amount | 5,655 | ||
| Other Transactions [Member] | |||
| Loss Contingencies [Line Items] | |||
| Guarantees amount | $ 1,372 | ||
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (schedule of changes in aoci) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
| Beginning balance | $ (27,319) | $ 3,857 | $ (1,809) |
| Revaluation | (59,249) | (29,649) | 6,836 |
| Tax on revaluation | 6,508 | 900 | (204) |
| Other comprehensive income (loss) before reclassifications | (52,741) | (28,749) | 6,632 |
| Reclassification | 7,760 | (2,758) | (1,101) |
| Tax on reclassification | (809) | 331 | 135 |
| Gains (Losses) reclassified from accumulated other comprehensive income | 6,951 | (2,427) | (966) |
| Net current period other comprehensive income (loss) | (45,790) | (31,176) | 5,666 |
| Ending balance | (73,109) | (27,319) | 3,857 |
| Unrealized gains (losses) on available-for-sale marketable securities [Member] | |||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
| Beginning balance | (4,709) | 240 | 264 |
| Revaluation | (26,944) | (6,283) | 45 |
| Tax on revaluation | 5,583 | 1,346 | (69) |
| Other comprehensive income (loss) before reclassifications | (21,361) | (4,937) | (24) |
| Reclassification | 736 | (16) | 0 |
| Tax on reclassification | (115) | 4 | 0 |
| Gains (Losses) reclassified from accumulated other comprehensive income | 621 | (12) | 0 |
| Net current period other comprehensive income (loss) | (20,740) | (4,949) | (24) |
| Ending balance | (25,449) | (4,709) | 240 |
| Unrealized gains on cash flow hedges [Member] | |||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
| Beginning balance | 874 | 0 | 0 |
| Revaluation | (9,890) | 3,735 | 1,101 |
| Tax on revaluation | 925 | (446) | (135) |
| Other comprehensive income (loss) before reclassifications | (8,965) | 3,289 | 966 |
| Reclassification | 7,024 | (2,742) | (1,101) |
| Tax on reclassification | (694) | 327 | 135 |
| Gains (Losses) reclassified from accumulated other comprehensive income | 6,330 | (2,415) | (966) |
| Net current period other comprehensive income (loss) | (2,635) | 874 | 0 |
| Ending balance | (1,761) | 874 | 0 |
| Foreign currency translation adjustments on intra-entity transactions that are of a long-term investment in nature [Member] | |||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
| Beginning balance | (17,420) | 0 | 0 |
| Revaluation | (20,540) | (17,420) | 0 |
| Tax on revaluation | 0 | 0 | |
| Other comprehensive income (loss) before reclassifications | (20,540) | (17,420) | 0 |
| Reclassification | 0 | 0 | 0 |
| Tax on reclassification | 0 | 0 | 0 |
| Gains (Losses) reclassified from accumulated other comprehensive income | 0 | 0 | 0 |
| Net current period other comprehensive income (loss) | (20,540) | (17,420) | 0 |
| Ending balance | (37,960) | (17,420) | 0 |
| Unrealized gains (losses) on foreign currency translation [Member] | |||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
| Beginning balance | (6,064) | 3,617 | (2,073) |
| Revaluation | (1,875) | (9,681) | 5,690 |
| Tax on revaluation | 0 | 0 | 0 |
| Other comprehensive income (loss) before reclassifications | (1,875) | (9,681) | 5,690 |
| Reclassification | 0 | 0 | 0 |
| Tax on reclassification | 0 | 0 | 0 |
| Gains (Losses) reclassified from accumulated other comprehensive income | 0 | 0 | 0 |
| Net current period other comprehensive income (loss) | (1,875) | (9,681) | 5,690 |
| Ending balance | $ (7,939) | $ (6,064) | $ 3,617 |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (schedule of reclassifications of other comprehensive income loss) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | |||
| Cost of revenues | $ 2,265,631 | $ 1,334,547 | $ 997,912 |
| Research and development | 289,814 | 219,633 | 163,123 |
| Sales and marketing | 159,680 | 119,000 | 95,985 |
| General and administrative | 112,496 | 82,196 | 63,119 |
| Total, before income taxes | 678,528 | 422,179 | 318,798 |
| Income taxes | (83,376) | (18,054) | (23,344) |
| Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | 93,779 | 169,170 | 140,322 |
| Unrealized gains (losses) on available-for-sale marketable securities [Member] | Amount Reclassified from Accumulated Other Comprehensive Income (Loss) [Member] | |||
| Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | |||
| Financial income (expenses), net | (736) | 16 | (0) |
| Income taxes | 115 | (4) | 0 |
| Total, net of income taxes | (621) | 12 | (0) |
| Unrealized gains (losses) on cash flow hedges [Member] | Amount Reclassified from Accumulated Other Comprehensive Income (Loss) [Member] | |||
| Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | |||
| Cost of revenues | (801) | 333 | 189 |
| Research and development | (4,142) | 1,645 | 623 |
| Sales and marketing | (959) | 334 | 136 |
| General and administrative | (1,122) | 430 | 153 |
| Total, before income taxes | (7,024) | 2,742 | 1,101 |
| Income taxes | 694 | (327) | (135) |
| Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | (6,330) | 2,415 | 966 |
| Total reclassifications for the period | $ (6,951) | $ 2,427 | $ (966) |
EARNINGS PER SHARE (Schedule of Computation of Basic and Diluted Net Earnings (Loss) Per Share) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Numerator: | |||
| Net income | $ 93,779 | $ 169,170 | $ 140,322 |
| Denominator: | |||
| Shares used in computing net earnings per share of common stock, basic | 55,087,770 | 52,202,182 | 50,217,330 |
| Numerator: | |||
| Net income attributable to common stock, basic | $ 93,779 | $ 169,170 | $ 140,322 |
| Notes due 2025 | 2,203 | 2,134 | 0 |
| Net income attributable to common stock, diluted | $ 95,982 | $ 171,304 | $ 140,322 |
| Denominator: | |||
| Shares used in computing net earnings per share of common stock, basic | 55,087,770 | 52,202,182 | 50,217,330 |
| Notes due 2025 | 2,276,818 | 2,276,818 | 0 |
| Effect of stock-based awards | 736,061 | 1,492,030 | 2,578,146 |
| Shares used in computing net earnings per share of common stock, diluted | 58,100,649 | 55,971,030 | 52,795,476 |
| Shares excluded from the calculation of diluted net EPS due to their anti-dilutive effect | 207,980 | 132,133 | 715,510 |
GOODWILL IMPAIRMENT AND OTHER OPERATING EXPENSES (INCOME), NET (Narrative) (Details) - USD ($) $ in Thousands |
1 Months Ended | 12 Months Ended | ||
|---|---|---|---|---|
Oct. 31, 2022 |
Jun. 30, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| e-Mobility components and telematics [Member] | ||||
| Other Operating Income Expenses [Line Items] | ||||
| Goodwill, Impairment Loss | $ 80,534 | |||
| Automation Machines [Member] | ||||
| Other Operating Income Expenses [Line Items] | ||||
| Goodwill, Impairment Loss | $ 6,788 | |||
| Critical Power [Member] | ||||
| Other Operating Income Expenses [Line Items] | ||||
| Goodwill, Impairment Loss | $ 2,782 | |||
| SMRE Acquisition [Member] | ||||
| Other Operating Income Expenses [Line Items] | ||||
| A settlement of pre-acquisition legal claim against Kokam | $ 859 | $ 4,900 | ||
GOODWILL IMPAIRMENT AND OTHER OPERATING EXPENSES (INCOME), NET (Schedule of Other Opearting Expenses) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Other Operating Income Expenses [Abstract] | |||
| Impairment goodwill | $ 90,104 | $ 0 | $ 0 |
| Impairment of long-lived assets | 29,037 | 2,209 | 1,471 |
| Sale of assets | (2,603) | 0 | 0 |
| SolarEdge Korea (formerly Kokam) purchase escrow | 0 | (859) | (4,900) |
| Goodwill impairment and other operating expenses (income), net | $ 116,538 | $ 1,350 | $ (3,429) |
INCOME TAXES (Narrative) (Details) $ in Thousands, ₪ in Billions |
1 Months Ended | 12 Months Ended | ||||
|---|---|---|---|---|---|---|
Dec. 22, 2017 |
Dec. 31, 2022
ILS (₪)
|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2018
USD ($)
|
Dec. 31, 2022
USD ($)
|
|
| Income Taxes [Line Items] | ||||||
| Corporate tax rate (as a percent) | 35.00% | 21.00% | 21.00% | 21.00% | ||
| U.S. income tax rate for foreign subsidiaries earnings | 15.50% | |||||
| U.S. income tax rate for foreign subsidiaries earnings for other net current assets on remaining earnings | 8.00% | |||||
| Total tax liability | $ 8,500 | |||||
| Tax rate after amendment to Investments law In Development area A | 7.50% | |||||
| Tax rate before amendment to Investments law In Development area A | 9.00% | |||||
| Tax rate In other areas | 16.00% | |||||
| Tax rate for preferred technological enterprises (PTE) in other areas | 12.00% | |||||
| Annual revenue | ₪ | ₪ 10 | |||||
| Foreign Subsidiaries [Member] | ||||||
| Income Taxes [Line Items] | ||||||
| Carryforward tax losses | $ 83,391 | |||||
| Israel [Member] | Subsidiaries [Member] | ||||||
| Income Taxes [Line Items] | ||||||
| Corporate tax rate (as a percent) | 23.00% | |||||
| Tax exempt profits | $ 289,900 | |||||
INCOME TAXES (Schedule of Deferred Tax Liabilities And Assets) (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
||
|---|---|---|---|---|
| Deferred tax assets, net: | ||||
| Research and Development carryforward expenses | $ 9,335 | $ 2,479 | ||
| Carryforward tax losses | [1] | 19,916 | 19,635 | |
| Stock based compensation expenses | 9,863 | 12,140 | ||
| Deferred revenue | 8,954 | 8,078 | ||
| Lease liabilities | 6,520 | 11,168 | ||
| Inventory Impairment | 627 | 1,326 | ||
| Allowance and other reserves | 30,242 | 10,229 | ||
| Total Gross deferred tax assets, net | 85,457 | 65,055 | ||
| Less, Valuation Allowance | (23,777) | (14,648) | ||
| Total deferred tax assets, net | 61,680 | 50,407 | ||
| Deferred tax liabilities, net: | ||||
| Intercompany transactions | (6,292) | (6,099) | ||
| Right-of-use assets | (6,618) | (10,486) | ||
| Purchase price allocation | (4,617) | (6,406) | ||
| Total deferred tax liabilities, net | (17,527) | (22,991) | ||
| Recorded as: | ||||
| Deferred tax assets, net | 44,153 | 27,572 | ||
| Deferred tax liabilities, net | 0 | (156) | ||
| Net deferred tax assets | $ 44,153 | $ 27,416 | ||
| ||||
INCOME TAXES (Schedule of Uncertain Tax Positions) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Income Tax Disclosure [Abstract] | |||
| Balance, at the beginning of the period | $ 2,192 | $ 10,564 | $ 9,532 |
| Increases related to current year tax positions | 564 | 635 | 757 |
| Increase for tax positions related to prior years | 0 | 0 | 275 |
| Decreases related to prior year tax positions | 0 | (9,007) | 0 |
| Balance, at end of the period | $ 2,756 | $ 2,192 | $ 10,564 |
INCOME TAXES (Schedule of Income (Loss) Before Taxes) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Income Tax Disclosure [Abstract] | |||
| Domestic | $ 47,324 | $ 13,659 | $ 33,909 |
| Foreign | 129,831 | 173,565 | 129,757 |
| Income before income taxes | $ 177,155 | $ 187,224 | $ 163,666 |
INCOME TAXES (Schedule of Income taxes) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Current taxes: | |||
| Domestic | $ 56,957 | $ (7,872) | $ 1,842 |
| Foreign | 37,473 | 37,564 | 24,936 |
| Total current taxes | 94,430 | 29,692 | 26,778 |
| Deferred taxes: | |||
| Domestic | (8,954) | (3,682) | 2,794 |
| Foreign | (2,100) | (7,956) | (6,228) |
| Total deferred taxes | (11,054) | (11,638) | (3,434) |
| Income taxes, net | $ 83,376 | $ 18,054 | $ 23,344 |
INCOME TAXES (Schedule of reconciliation between the theoretical tax expense and the actual tax expense (benefit)) (Details) |
1 Months Ended | 12 Months Ended | ||
|---|---|---|---|---|
Dec. 22, 2017 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Income Tax Disclosure [Abstract] | ||||
| Statutory tax rate | 35.00% | 21.00% | 21.00% | 21.00% |
| Effect of: Income tax at rate other than the U.S. statutory tax rate | (10.80%) | (7.40%) | (6.90%) | |
| Losses and timing differences for which valuation allowance was provided | 5.20% | 2.70% | 4.40% | |
| Prior year income taxes (benefit) | 2.90% | (4.40%) | (0.40%) | |
| R&D Capitalization and other effects of TCJA | 18.90% | 0.10% | 0.00% | |
| Disallowable and allowable deductions | 13.20% | 2.00% | (2.60%) | |
| Other individually immaterial income tax items, net | (3.30%) | (4.40%) | (1.30%) | |
| Effective tax rate | 47.10% | 9.60% | 14.20% | |
FINANCIAL (EXPENSES) INCOME, NET (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Nonoperating Income (Expense) [Abstract] | |||
| Exchange rate (loss) gain, net | $ (1,547) | $ (22,493) | $ (33,065) |
| Interest income on marketable securities | 10,551 | 2,973 | 3,750 |
| Convertible note | (2,916) | (2,903) | (3,185) |
| Hedging | 4,716 | 9,417 | (4,013) |
| Financing component expenses related to ASC 606 | (7,038) | (5,771) | (4,887) |
| Bank charges | (1,584) | (1,991) | (2,048) |
| Interest income, net | 1,402 | 183 | 67 |
| Other | (268) | 670 | (1,644) |
| Financial income (expense), net | $ 3,316 | $ (19,915) | $ (21,105) |
SEGMENT, GEOGRAPHIC AND PRODUCT INFORMATION (Schedule of Reportable Segments and Operating Income) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Segment Reporting Information [Line Items] | |||
| Revenues | $ 3,110,279 | $ 1,963,865 | $ 1,459,271 |
| Cost of Revenue | 2,265,631 | 1,334,547 | 997,912 |
| Gross profit | 844,648 | 629,318 | 461,359 |
| Research and Development Expense | 289,814 | 219,633 | 163,123 |
| Selling and Marketing Expense | 159,680 | 119,000 | 95,985 |
| General and Administrative Expense | 112,496 | 82,196 | 63,119 |
| Segments profit (loss) | 93,779 | 169,170 | 140,322 |
| Solar segment profit | 486,862 | 368,746 | 255,728 |
| All other segment loss | (45,137) | (47,387) | (36,844) |
| Segments operating profit | 441,725 | 321,359 | 218,884 |
| Amounts not allocated to segments: | |||
| Stock based compensation expenses | (145,539) | (102,593) | (67,309) |
| Amortization and depreciation of acquired assets | (9,478) | (10,812) | (9,336) |
| Impairment of goodwill and long-lived assets | (119,141) | 0 | 0 |
| Disposal of assets related to Critical Power | (4,314) | 0 | 0 |
| Other unallocated income (expenses), net | 2,867 | (815) | 322 |
| Consolidated operating income | 166,120 | 207,139 | 142,561 |
| Solar [Member] | |||
| Segment Reporting Information [Line Items] | |||
| Revenues | 2,921,175 | 1,787,280 | 1,357,261 |
| Cost of Revenue | 2,050,147 | 1,136,896 | 882,420 |
| Gross profit | 871,028 | 650,384 | 474,841 |
| Research and Development Expense | 196,381 | 143,173 | 110,567 |
| Selling and Marketing Expense | 118,154 | 85,309 | 66,823 |
| General and Administrative Expense | 69,631 | 53,156 | 41,723 |
| Segments profit (loss) | 486,862 | 368,746 | 255,728 |
| All Other [Member] | |||
| Segment Reporting Information [Line Items] | |||
| Revenues | 188,490 | 176,167 | 102,804 |
| Cost of Revenue | 181,923 | 169,582 | 95,280 |
| Gross profit | 6,567 | 6,585 | 7,524 |
| Research and Development Expense | 29,016 | 30,506 | 25,417 |
| Selling and Marketing Expense | 9,687 | 9,930 | 8,562 |
| General and Administrative Expense | 13,001 | 13,536 | 10,389 |
| Segments profit (loss) | $ (45,137) | $ (47,387) | $ (36,844) |
SEGMENT, GEOGRAPHIC AND PRODUCT INFORMATION (Schedule of Reportable Segments Reconciliation) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Segment Reporting Information [Line Items] | |||
| Revenues | $ 3,110,279 | $ 1,963,865 | $ 1,459,271 |
| Solar Segment Revenues [Member] | |||
| Segment Reporting Information [Line Items] | |||
| Revenues | 2,921,175 | 1,787,280 | 1,357,261 |
| All Other Segment Revenues [Member] | |||
| Segment Reporting Information [Line Items] | |||
| Revenues | 188,490 | 176,167 | 102,804 |
| Revenues From Financing Componen [Member] | |||
| Segment Reporting Information [Line Items] | |||
| Revenues | 614 | 418 | 0 |
| Adjustment of Intersegment Revenues [Member] | |||
| Segment Reporting Information [Line Items] | |||
| Revenues | $ 0 | $ 0 | $ (794) |
SEGMENT, GEOGRAPHIC AND PRODUCT INFORMATION (Summary of Revenues Within Geographic Areas) (Details) $ in Thousands |
12 Months Ended | ||||
|---|---|---|---|---|---|
|
Dec. 31, 2022
USD ($)
|
Dec. 31, 2021
USD ($)
|
Dec. 31, 2020
USD ($)
|
|||
| Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
| Number of reportable segments | 1 | ||||
| Total revenues | $ 3,110,279 | $ 1,963,865 | $ 1,459,271 | ||
| United States [Member] | |||||
| Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
| Total revenues | 1,133,798 | 786,019 | 613,090 | ||
| Europe [Member] | |||||
| Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
| Total revenues | [1] | 528,197 | 297,684 | 233,583 | |
| Germany [Member] | |||||
| Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
| Total revenues | 449,160 | 191,066 | 118,350 | ||
| Netherlands [Member] | |||||
| Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
| Total revenues | 382,226 | 222,103 | 199,498 | ||
| Italy [Member] | |||||
| Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
| Total revenues | 330,565 | 181,644 | 74,598 | ||
| Rest of the world [Member] | |||||
| Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
| Total revenues | $ 286,333 | $ 285,349 | $ 220,152 | ||
| |||||
SEGMENT, GEOGRAPHIC AND PRODUCT INFORMATION (Summary of Revenues by Product Family) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Revenue from External Customer [Line Items] | |||
| Total revenues | $ 3,110,279 | $ 1,963,865 | $ 1,459,271 |
| Inverters [Member] | |||
| Revenue from External Customer [Line Items] | |||
| Total revenues | 1,137,142 | 828,101 | 641,799 |
| Optimizers [Member] | |||
| Revenue from External Customer [Line Items] | |||
| Total revenues | 1,135,040 | 828,542 | 625,465 |
| Residential batteries [Member] | |||
| Revenue from External Customer [Line Items] | |||
| Total revenues | 429,119 | 19,531 | 0 |
| e-Mobility components and telematics [Member] | |||
| Revenue from External Customer [Line Items] | |||
| Total revenues | 94,446 | 68,946 | 13,399 |
| Communication [Member] | |||
| Revenue from External Customer [Line Items] | |||
| Total revenues | 72,812 | 24,111 | 41,771 |
| Other Products [Member] | |||
| Revenue from External Customer [Line Items] | |||
| Total revenues | $ 241,720 | $ 194,634 | $ 136,837 |
SEGMENT, GEOGRAPHIC AND PRODUCT INFORMATION (Schedule of Long-Lived Assets) (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Revenues from External Customers and Long-Lived Assets [Line Items] | ||
| Total long-lived assets | $ 606,723 | $ 457,517 |
| Israel [Member] | ||
| Revenues from External Customers and Long-Lived Assets [Line Items] | ||
| Total long-lived assets | 333,740 | 271,700 |
| korea [Member] | ||
| Revenues from External Customers and Long-Lived Assets [Line Items] | ||
| Total long-lived assets | 201,731 | 118,209 |
| China [Member] | ||
| Revenues from External Customers and Long-Lived Assets [Line Items] | ||
| Total long-lived assets | 34,230 | 30,412 |
| Europe [Member] | ||
| Revenues from External Customers and Long-Lived Assets [Line Items] | ||
| Total long-lived assets | 21,282 | 21,547 |
| Others [Member] | ||
| Revenues from External Customers and Long-Lived Assets [Line Items] | ||
| Total long-lived assets | $ 15,740 | $ 15,649 |
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