SEDG’s solar comeback: margin gains, batteries, and a real reset

The thesis

SolarEdge (SEDG) is trying to turn a rough solar cycle into a real recovery story by leaning into smarter inverters, home batteries and better cost control. In Q1 2026, revenue jumped to about $310.5 million, up roughly 46% versus a year ago, with gross margin improving for the sixth quarter in a row to about 23.5% on a non-GAAP basis.[2][4] They shipped around 50,500 inverters, 2.4 million power optimizers and 331 MWh of batteries, showing real demand for their hardware.[4][5] Management is guiding Q2 2026 revenue up again to $325–$355 million and expects to be near break-even at the midpoint, which is a key milestone for a company that’s still losing money today.[2][4] The setup is: revenue and margins recovering, losses narrowing, and a big installed base in the U.S. and Europe that can power a longer-term turnaround.

▲ Catalysts

• + Q2 2026 earnings, estimated around August 6, 2026 — watch if revenue hits the $325–$355M guidance and losses shrink.[3][4]
• + Growing battery shipments: 331 MWh of batteries sold in Q1 2026, tying SolarEdge deeper into home and business energy storage.[4][5]
• + Six straight quarters of margin improvement; management aiming to be near operating break-even at Q2 2026 guidance midpoint.[2][4]
• + Ongoing policy support for rooftop solar and batteries in the U.S. and Europe, helping demand for inverters and optimizers through 2026.[2][4][5]

▼ Risks

• ! Still losing money: GAAP net loss of about $57.4M in Q1 2026, and EPS of roughly -$0.43.[1][2][3][4]
• ! U.S. revenue dropped sequentially in Q1 2026, showing that demand can be choppy when interest rates and policy shift.[1]
• ! Solar is highly competitive, with rivals in inverters, batteries and full-home energy systems squeezing prices and margins.[2][4]
• ! Turnaround could stall if guidance for Q2 2026 revenue and margins is missed, or if policy support for solar weakens.[2][3][4]