0001178913-20-002995 | 10-Q | XBRL Viewer | Solaredge Technologies INC

977

(2,964)

(1,987)

(696)

(849)

(1,545)

Balance (in shares) at Mar. 31, 2019

19,016

(1,041)

17,975

Balance at Mar. 31, 2019

$ 5

417,385

(1,220)

210,149

626,319

71,198

697,517

47,501,363

Balance at Dec. 31, 2018

$ 5

371,794

(524)

191,133

562,408

8,318

570,726

Balance (in shares) at Dec. 31, 2018

46,052,802

67,089

Balance (in shares) at Sep. 30, 2019

93,771

Balance at Sep. 30, 2019

$ 5

450,459

(3,356)

284,904

732,012

5,176

737,188

48,576,288

Balance at Mar. 31, 2019

$ 5

417,385

(1,220)

210,149

626,319

71,198

697,517

Balance (in shares) at Mar. 31, 2019

47,501,363

Issuance of Common Stock upon exercise of employee and nonemployees stock-based awards

3,455

Issuance of Common Stock upon exercise of employee and non-employee stock options, shares

466,062

Equity based compensation expenses to employees and nonemployee

11,372

(528)

(65,551)

(66,079)

325

545

870

Balance (in shares) at Jun. 30, 2019

33,128

(215)

32,913

Balance at Jun. 30, 2019

$ 5

431,684

(895)

243,277

674,071

5,977

680,048

47,967,425

Issuance of Common Stock upon exercise of employee and nonemployees stock-based awards

^[1]

1,176

Issuance of Common Stock upon exercise of employee and non-employee stock options, shares

608,863

Equity based compensation expenses to employees and nonemployee

17,609

(10)

(612)

(622)

(2,461)

(286)

(2,747)

Balance (in shares) at Sep. 30, 2019

41,627

41,724

Balance at Sep. 30, 2019

$ 5

450,459

(3,356)

284,904

732,012

5,176

737,188

48,576,288

Balance at Dec. 31, 2019

$ 5

475,792

(1,809)

337,682

811,670

Balance (in shares) at Dec. 31, 2019

48,898,062

Issuance of Common Stock upon exercise of employee and nonemployees stock-based awards

^[1]

3,308

Issuance of Common Stock upon exercise of employee and non-employee stock options, shares

701,431

Equity based compensation expenses to employees and nonemployee

12,773

(3,581)

Balance (in shares) at Mar. 31, 2020

42,248

Balance at Mar. 31, 2020

$ 5

491,873

(5,390)

379,930

866,418

49,599,493

Balance at Dec. 31, 2019

$ 5

475,792

(1,809)

337,682

811,670

Balance (in shares) at Dec. 31, 2019

48,898,062

Balance (in shares) at Sep. 30, 2020

122,667

Balance at Sep. 30, 2020

$ 5

574,326

(2,643)

460,349

1,032,037

51,207,310

Balance at Mar. 31, 2020

$ 5

491,873

(5,390)

379,930

866,418

Balance (in shares) at Mar. 31, 2020

49,599,493

Issuance of Common Stock upon exercise of employee and nonemployees stock-based awards

^[1]

5,806

Issuance of Common Stock upon exercise of employee and non-employee stock options, shares

476,258

Equity based compensation expenses to employees and nonemployee

13,961

1,948

Balance (in shares) at Jun. 30, 2020

36,668

Balance at Jun. 30, 2020

$ 5

511,640

(3,442)

416,598

924,801

50,075,751

Issuance of Common Stock upon exercise of employee and nonemployees stock-based awards

^[1]

10,091

Issuance of Common Stock upon exercise of employee and non-employee stock options, shares

1,131,559

Equity based compensation expenses to employees and nonemployee

16,259

Equity component of convertible senior notes, net

36,336

799

Balance (in shares) at Sep. 30, 2020

43,751

Balance at Sep. 30, 2020

$ 5

$ 574,326

$ (2,643)

$ 460,349

$ 1,032,037

51,207,310

[1]	Represents an amount less than $1

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash flows provided by operating activities:
Net income	$ 122,667	$ 92,612
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property, plant and equipment	16,376	12,532
Amortization of intangible assets	7,081	7,514
Amortization of debt discount and debt issuance costs	168
Amortization of premium and accretion of discount on available-for-sale marketable securities, net	602
Stock-based compensation expenses	42,993	38,685
Deferred income tax benefit, net	(5,263)	(4,923)
Other adjustments, net	224	657
Changes in assets and liabilities:
Inventories, net	(121,999)	15,746
Prepaid expenses and other assets	37,871	(19,795)
Trade receivables, net	118,044	(114,572)
Operating lease right-of-use assets and liabilities, net and effect of exchange rate differences	(459)	2,138
Trade payables, net	(35,499)	21,301
Employees and payroll accruals	3,132	15,329
Warranty obligations	23,155	49,633
Deferred revenues and customers advances	(24,283)	19,516
Other liabilities	10,619	39,561
Net cash provided by operating activities	195,429	175,934
Cash flows from investing activities:
Proceeds from sales and maturities of available-for-sale marketable securities	116,419	119,570
Purchase of property, plant and equipment	(90,553)	(39,679)
Investment in available-for-sale marketable securities	(36,781)	(103,711)
Withdrawal from (investment in) restricted bank deposits	25,538	(243)
Business combination, net of cash acquired		(38,435)
Withdrawal from (investment in) bank deposits	(14,667)	4,101
Other investing activities	743
Net cash provided by (used in) in investing activities	699	(58,397)
Cash flows from financing activities:
Proceeds from issuance of convertible senior notes, net	618,269
Repayment of bank loans	(15,194)	(5,142)
Proceeds from bank loans	15,185	232
Proceeds from issuance of shares under stock purchase plan and upon exercise of stock-based awards	19,205	4,940
Change in non-controlling interests		(67,089)
Other financing activities	(152)	(1,248)
Net cash provided by (used in) financing activities	637,313	(68,307)
Increase in cash and cash equivalents	833,441	49,230
Cash and cash equivalents at the beginning of the period	223,901	187,764
Effect of exchange rate differences on cash and cash equivalents	(9,233)	10,348
Cash and cash equivalents at the end of the period	1,048,109	247,342
Supplemental disclosure of non-cash activities:
Purchase of property, plant and equipment	10,438
Operating lease, right of use asset	$ 796	$ 36,174

GENERAL

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

GENERAL

NOTE 1:-GENERAL

a.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 of a solar PV system 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), (iii) a related cloud-based monitoring platform, that collects and processes information from the power optimizers and inverters of a solar PV system to enable customers and system owners as applicable, to monitor and manage the applicable solar PV system and (iv) a storage solution that is used to increase energy independence and maximize self-consumption for homeowners by utilizing a battery that is sold separately by third party manufacturers, to store and supply power as needed.

The Company and its subsidiaries sell their intelligent inverter solution products worldwide through large distributors and electrical equipment wholesalers to smaller solar installers as, well as directly to large solar installers and engineering, procurement and construction firms (“EPCs”).

The Company has expanded its activity to other areas of smart energy technology through acquisitions. The Company now offers energy solutions which include lithium-ion cells, batteries and energy storage systems (“Energy Storage”), electric vehicle, or EV components and charging capabilities (“e-Mobility”), uninterrupted power supply solutions (“UPS”), as well as the manufacture of automated machines for industries (“Automation Machines”).

b.Recent accounting pronouncements not yet adopted:

In August 2020, the FASB issued ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (ASU 2020-06), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity. Among other changes, ASU 2020-06 removes from U.S. GAAP the liability and equity separation model for convertible instruments with a cash conversion feature, and as a result, after adoption, entities will no longer separately present in equity an embedded conversion feature for such debt. Similarly, the embedded conversion feature will no longer be amortized into income as interest expense over the life of the instrument. Instead, entities will account for a convertible debt instrument wholly as debt unless (1) a convertible instrument contains features that require bifurcation as a derivative under ASC Topic 815, Derivatives and Hedging, or (2) a convertible debt instrument was issued at a substantial premium. Among other potential impacts, this change is expected to reduce reported interest expense, increase reported net income, and result in a reclassification of certain conversion feature balance sheet amounts from stockholders’ equity to liabilities as it relates to the Company’s convertible senior notes. Additionally, ASU 2020-06 requires the application of the if-converted method to calculate the impact of convertible instruments on diluted earnings per share (EPS), which is consistent with the Company’s accounting treatment under the current standard. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, with early adoption permitted for fiscal years beginning after December 15, 2020, and can be adopted on either a fully retrospective or a modified retrospective basis. The Company is currently evaluating the timing, method of adoption and overall impact of this standard on its consolidated financial statements.

F - 12

SOLAREDGE TECHNOLOGIES, INC.

AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

U.S. dollars in thousands (except share and per share data)

NOTE 1:-GENERAL (Cont.)

c.Recently issued and adopted pronouncements:

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The FASB subsequently issued amendments to ASU 2016-13, which have the same effective date and transition date of January 1, 2020. This standard requires entities to estimate an expected lifetime credit loss on financial assets ranging from short-term trade accounts receivable to long-term financings and report credit losses using an expected losses model rather than the incurred losses model that was previously used, and establishes additional disclosures related to credit risks. For available-for-sale (“AFS”) debt securities with unrealized losses, the standard eliminates the concept of other-than-temporary impairments and requires allowances to be recorded instead of reducing the amortized cost of the investment.

This standard limits the amount of credit losses to be recognized for AFS debt securities to the amount by which carrying value exceeds fair value and requires the reversal of previously recognized credit losses if fair value increases.

The Company adopted Topic 326 effective January 1, 2020, based on the composition of the Company’s trade receivables, investment portfolio and other financial assets, current economic conditions and historical credit loss activity. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

The condensed consolidated financial statements for the nine months ended September 30, 2020 are presented under the new standard, while comparative periods presented are not adjusted and continue to be reported in accordance with the Company’s historical accounting policy (see Note 7).

d.Basis of Presentation:

The unaudited condensed consolidated financial statements and accompanying notes have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). In management’s opinion, the unaudited condensed consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. The Company’s interim period results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year.

The significant accounting policies applied in the annual consolidated financial statements of the Company as of December 31, 2019, contained in the Company’s Annual Report on Form 10-K filed with the SEC on February 27, 2020, have been applied consistently in these unaudited interim condensed consolidated financial statements, except for ASC 815 - Derivatives and Hedging (see Note 6), the adoption of ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) (see Note 7) and ASC 470-20 "Debt with Conversion and Other Options" (see Note 8).

e.Concentrations of supply risks:

The Company depends on two contract manufacturers and several limited or single source component suppliers. Reliance on these vendors makes the Company vulnerable to possible capacity constraints and reduced control over component availability, delivery schedules, manufacturing yields, and costs. These two contract manufacturers collectively accounted for 47.4% and 42.3% of the Company’s trade payables as of September 30, 2020 and December 31, 2019, respectively.

F - 13

SOLAREDGE TECHNOLOGIES, INC.

AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

U.S. dollars in thousands (except share and per share data)

NOTE 1:-GENERAL (Cont.)

In September 2020 the Company has commenced the production ramp up of its manufacturing facility in the North of Israel, “Sella 1”. The Company expects ramp up to continue until the second quarter of 2021.

f.Use of estimates:

The preparation of financial statements in conformity with U.S. 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, 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 AFS debt securities, or an increase in the Company’s insurance liabilities as of the time of a relevant measurement event.

g.Certain prior period amounts have been reclassified to conform to the current period presentation.

INVENTORIES

9 Months Ended

Sep. 30, 2020

Inventory Disclosure [Abstract]

INVENTORIES

NOTE 2:-INVENTORIES

	September 30, 2020		December 31, 2019


Raw materials	$	116,339	$	64,714
Work in process		22,536		20,752
Finished goods		158,152		85,332

	$	297,027	$	170,798

MARKETABLE SECURITIES

9 Months Ended

Sep. 30, 2020

Marketable Securities [Abstract]

MARKETABLE SECURITIES

F - 14

SOLAREDGE TECHNOLOGIES, INC.

AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

U.S. dollars in thousands (except share and per share data)

NOTE 3:-MARKETABLE SECURITIES

The following table summarizes the AFS marketable debt securities as of September 30, 2020:

	Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value

AFS – matures within one year:
Corporate bonds	$	108,306	$	878	$	(11	)	$	109,173
Governmental bonds		1,398		14		-			1,412
		109,704		892		(11	)		110,585

AFS – matures after one year:
Corporate bonds		20,822		184		(3	)		21,003

Total	$	130,526	$	1,076	$	(14	)	$	131,588

The following table summarizes the AFS marketable debt securities as of December 31, 2019:

	Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value

AFS – matures within one year:
Corporate bonds	$	91,677	$	196	$	(28	)	$	91,845

AFS – matures after one year:
Corporate bonds		117,692		336		(250	)		117,778
Governmental bonds		1,398		-		-			1,398
		119,090		336		(250	)		119,176

Total	$	210,767	$	532	$	(278	)	$	211,021

As of September 30, 2020, the Company did not record an allowance for credit losses for its AFS marketable debt securities.

WARRANTY OBLIGATIONS

9 Months Ended

Sep. 30, 2020

Product Warranties Disclosures [Abstract]

WARRANTY OBLIGATIONS

NOTE 4:-WARRANTY OBLIGATIONS

Changes in the Company’s product warranty obligations for the nine months ended September 30, 2020 and 2019 were as follows:

	Nine months ended September 30,
	2020			2019


Balance, at beginning of period	$	172,563		$	121,826
Additions and adjustments to cost of revenues		74,465			79,791
Usage and current warranty expenses		(51,334	)		(30,263	)

Balance, at end of period		195,694			171,354
Less current portion		(65,080	)		(45,887	)

Long-term portion	$	130,614		$	125,467

FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

NOTE 5:-FAIR VALUE MEASUREMENTS

In accordance with ASC 820, the Company measures its cash equivalents, foreign currency derivative contracts, and marketable securities, at fair value using the market approach valuation technique. Cash equivalents and marketable securities are classified within Level 1 or Level 2 based on whether these assets are valued using quoted market prices or alternative pricing sources and models utilizing market observable inputs. Foreign currency derivative contracts are classified within the Level 2 value hierarchy, as the valuation inputs are based on quoted prices and market observable data of similar instruments.

The following table sets forth the Company’s assets that were measured at fair value as of September 30, 2020 and December 31, 2019, by level within the fair value hierarchy:

		Fair value measurements as of
	Fair Value	September 30,			December 31,
Description	Hierarchy	2020			2019


Assets:
Cash equivalents:
Money market mutual funds	Level 1	$	721,088		$	527

Derivative instruments asset:
Options and forward contracts not designated as hedging instruments	Level 2	$	780		$	-

Short-term marketable securities:
Corporate bonds	Level 2	$	109,173		$	91,845
Governmental bonds	Level 2	$	1,412		$	-

Long-term marketable securities:
Corporate bonds	Level 2	$	21,003		$	117,778
Governmental bonds	Level 2	$	-		$	1,398

Liabilities:
Derivative instruments liability:
Options and forward contracts not designated as hedging instruments	Level 2	$	(1,119	)	$	-

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

9 Months Ended

Sep. 30, 2020

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

NOTE 6:-DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

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 nine months ended September 30, 2020, 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 six 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.

As of September 30, 2020, the Company had no derivative instruments that were designated as cash flow 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 expense (income), net.

As of September 30, 2020, the Company entered into forward contracts to sell Australian dollars (“AUD”) for U.S. dollars in the amount of AUD 7.5 million.

As of September 30, 2020, the Company entered into put and call options to sell Euro ("EUR") for U.S. dollars in the amount of EUR 45 million.

As of September 30, 2020, the Company entered into put and call options to sell U.S. dollars for South Korean Won in the amount of USD 48.6 million.

The fair value of derivative assets as of September 30, 2020, was $780, which was recorded in prepaid expenses and other current assets in the Condensed Consolidated Balance Sheets.

The fair value of derivative liabilities as of September 30, 2020, was $1,119, which was recorded in accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets.

As of December 31, 2019 and for the year then ended, the Company had no derivative instruments (see Note 5).

For the three and nine months ended September 30, 2020, the Company recorded a loss in the amount of $1,450 and $959, respectively, in “financial income, net” related to the derivative assets not designated as hedging instruments.

F - 18

SOLAREDGE TECHNOLOGIES, INC.

AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

U.S. dollars in thousands (except share and per share data)

NOTE 6:-DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Cont.)

The following table provides details about reclassifications out of accumulated other comprehensive income (loss):

Details about Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified from Accumulated Other Comprehensive Loss										Affected Line Item in the Statements of Income
	Three months ended					Nine months ended
	September 30, 2020					September 30, 2020
	2020			2019		2020			2019

Unrealized gains on cash flow hedges, net	$	90		$	-	$	189		$	-	Cost of revenues
		353			-		623			-	Research and development
		75			-		136			-	Sales and marketing
		87			-		153			-	General and administrative

		605			-		1,101			-	Total, before income taxes

		(74	)		-		(135	)		-	Income tax expense

	$	531		$	-	$	966		$	-	Total, net of income taxes

CREDIT LOSSES

9 Months Ended

Sep. 30, 2020

Receivables [Abstract]

CREDIT LOSSES

NOTE 7:-CREDIT LOSSES

Effective January 1, 2020, the Company adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, prospectively. This ASU replaces the incurred loss impairment model with an expected credit loss impairment model for financial instruments, including trade receivables. The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements.

The amendment requires entities to consider forward-looking information to estimate expected credit losses, resulting in earlier recognition of losses for receivables that are current or not yet due, which were not considered under the previous accounting guidance. As stated above, the Company did not record a noncash cumulative effect adjustment on the opening consolidated balance sheet as of January 1, 2020, due to immateriality.

The Company is exposed to credit losses primarily through sales of products. The Company’s expected loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions and a review of the status of customers' trade accounts receivables.

Due to the short-term nature of such receivables, the estimate of amount of accounts receivable that may not be collected is based on aging of the accounts receivable balances, the financial condition of customers and the Company’s historical experience with similar customers. Additionally, specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default.

The Company’s monitoring activities include timely account reconciliation, dispute resolution, payment confirmation, consideration of customers' financial condition and macroeconomic conditions. Balances are written off when determined to be uncollectible. The Company considered the current and expected future economic and market conditions surrounding the COVID-19 pandemic and determined that the estimate of credit losses was not significantly impacted as of September 30, 2020. Estimates are used to determine the allowance. The allowance is based on assessment of anticipated payment and other historical, current and future information that is reasonably available.

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:

	Nine months ended September
	30, 2020


Balance, at beginning of period	$	2,473
Provision for expected credit losses		4,595
Amounts written off charged against the allowance and others		(378	)

Balance, at end of period	$	6,690

CONVERTIBLE SENIOR NOTES

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

CONVERTIBLE SENIOR NOTES

NOTE 8:-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 Company accounts for its Notes in accordance with ASC 470-20 "Debt with Conversion and Other Options". The Company separately accounts for the liability and equity components of convertible debt instruments. The liability component at issuance is recognized at fair value, based on the fair value of a similar instrument that does not have a conversion feature. The equity component is based on the excess of the principal amount of the debentures over the fair value of the liability component, after adjusting for an allocation of debt issuance costs, and is recorded in additional paid-in capital. Debt discount is amortized as additional non-cash interest expense over the expected life of the debt using the effective interest rate method. In accounting for the issuance costs related to the Notes, the issuance costs incurred were allocated between the liability and equity components based on their relative values.

The Company’s Notes are included in the calculation of diluted EPS if the assumed conversion into common shares is dilutive, using the “if-converted” method. This involves adding back the periodic 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 11).

F - 21

SOLAREDGE TECHNOLOGIES, INC.

AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

U.S. dollars in thousands (except share and per share data)

NOTE 8:-CONVERTIBLE SENIOR NOTES (Cont.)

The Convertible Senior Notes consisted of the following as of September 30, 2020:

	September 30,
	2020


Liability:
Principal	$	632,500
Unamortized debt discount		(48,703	)
Unamortized issuance costs		(13,465	)
Net carrying amount	$	570,332

Equity component:
Amount allocated to conversion option	$	48,834
Deferred taxes liability, net		(11,368	)
Allocated issuance costs		(1,130	)
Equity component, net	$	36,336

As of September 30, 2020, the debt discount and debt issuance costs of the Notes will be amortized over the remaining period of approximately 5 years.

The annual effective interest rate of the liability component is 2.10% for the Notes which remains unchanged from the Notes issuance date.

The following table presents the total amount of interest expenses recognized related to the Notes for the three and nine months ended September 30, 2020:

	September 30, 2020

Amortization of debt discount	$	131
Amortization of debt issuance costs		37

Total interest expenses	$	168

Total initial issuance costs of $14,632 related to the Notes were allocated between the liability and equity components in the same proportion as the allocation of the total proceeds to the liability and equity components. Issuance costs attributable to the liability component are being amortized to interest expense over the respective term of the Notes using the effective interest rate method. The issuance costs attributable to the equity component were netted against the respective equity component in additional paid-in capital. The Company initially allocated issuance costs of $13,502 and $1,130 to the liability and equity components, respectively.

As of September 30, 2020, the if-converted value of the Notes did not exceed the principal amount.

COMMITMENTS AND CONTINGENT LIABILITIES

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENT LIABILITIES

NOTE 9:-COMMITMENTS AND CONTINGENT LIABILITIES

a.Guarantees:

As of September 30, 2020, contingent liabilities exist regarding guarantees in the amounts of $18,643, $2,176 and $240 in respect of bank loans, office rent lease agreements and other transactions, respectively.

b.Contractual purchase obligations:

The Company has contractual obligations to purchase goods and raw materials.

These contractual purchase obligations relate to inventories held by contract manufacturers and purchase orders initiated by the contract manufacturers and suppliers, which cannot be cancelled without penalty. The Company utilizes third parties to manufacture its products. In addition, it acquires raw materials or other goods and services, including product components, by issuing to suppliers authorizations to purchase based on its projected demand and manufacturing needs.

As of September 30, 2020, the Company had non-cancellable purchase obligations totaling approximately $326,661 out of which the Company already recorded a provision for loss in the amount of $3,118.

As of September 30, 2020, the Company had off-balance sheet contractual obligations for capital expenditures totaling approximately $114,526. These commitments reflect purchases of automated assembly lines and other machinery related to the Company’s manufacturing.

c.Legal claims:

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 infringe two of the plaintiff’s patents. In its complaint, SMA requests inter alia an injunction and a determination for a claim for damages for sales in Germany. Plaintiff also asserted a value in dispute of EUR 5.5 million (approximately $6,450) 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. 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. The Company believes that it has meritorious defenses to the claims asserted and intends to vigorously defend against the remaining lawsuit.

F - 23

SOLAREDGE TECHNOLOGIES, INC.

AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

U.S. dollars in thousands (except share and per share data)

NOTE 9:-COMMITMENTS AND CONTINGENT LIABILITIES (Cont.)

In May 2019, the Company was served with three lawsuits by Huawei Technologies Co., Ltd., a Chinese entity (“Huawei”), against the Company's two Chinese subsidiaries and its equipment manufacturer in China. The lawsuits, filed in the Guangzhou intellectual property court, allege infringement of three patents and ask for an injunction of manufacture, use, sale and offer for sale, and damage awards of Chinese yuan (“CNY”) 30 million (approximately $4,250). A first-instance judgment was issued on August 7, 2020 ordering the Company to pay damages in the amount of approximately CNY 10.5 million (approximately $1,550), including court fees, with respect of one of the patents, which was recorded in general and administrative expenses. The Company has filed an appeal with the Supreme People’s Court of China. Following the receipt of the lawsuits, the Company filed three lawsuits in China against Huawei for unauthorized use of patented technology of the Company. These lawsuits are still in process and judgements have not been rendered. The Company believes that it has meritorious defenses to the claims asserted by Huawei and the judgement of the first instance court and intends to vigorously defend against these lawsuits.

In August 2019, the Company was served with a lawsuit by certain former shareholders of S.M.R.E S.p.A (“SMRE”), against its Italian subsidiary that purchased the shares of SMRE in the tender offer which followed the SMRE Acquisition. The shareholders who tendered their shares are asking for the difference between EUR 6 per share, which is the amount they tendered their shares, and EUR 6.77 per share, for a total award of EUR 2.7 million (approximately $3,150). The Company believes it has meritorious defenses to the claims asserted and intends to vigorously defend against this lawsuit.

In December 2019, the Company received a lawsuit filed by a former consultant of the Company and its Israeli subsidiary in the amount of NIS 25.5 million (approximately $7,400) claiming damages caused relating to a terminated consulting agreement and stock options therein. The Company believes it has meritorious defenses to the claims asserted and intends to vigorously defend against this lawsuit.

As of September 30, 2020, accrued amounts for legal claims of $1,709, were recorded in accrued expenses and other current liabilities.

STOCKHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

STOCKHOLDERS' EQUITY

NOTE 10:-STOCKHOLDERS’ EQUITY

a.Common Stock:

	Number of shares
	Authorized as of		Issued as of		Outstanding as of
	September 30, 2020	December 31, 2019	September 30, 2020	December 31, 2019	September 30, 2020	December 31, 2019

Stock of $0.0001 par value:
Common stock	125,000,000	125,000,000	51,207,310	49,081,457	51,207,310	48,898,062

b.Stock 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 grant were transferred to the Company’s 2015 Global Incentive Plan (the “2015 Plan”) and are reserved for future issuances under the 2015 plan.

F - 24

SOLAREDGE TECHNOLOGIES, INC.

AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

U.S. dollars in thousands (except share and per share data)

NOTE 10:-STOCKHOLDERS’ EQUITY (Cont.)

The 2015 Plan became effective upon the consummation of the IPO. The 2015 Plan provides for the grant of options, RSUs and other share-based awards to directors, employees, officers, and nonemployees of the Company and its Subsidiaries. As of September 30, 2020, a total of 12,828,270 shares of common stock were reserved for issuance under the 2015 Plan (the “Share Reserve”).

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 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 September 30, 2020, an aggregate of 8,627,031 shares of common stock are still available for future grant under the 2015 Plan.

A summary of the activity in the stock options granted to employees and members of the board of directors for the nine months ended September 30, 2020 and related information are as follows:

	Number of Options			Weighted average exercise price		Weighted average remaining contractual term in years		Aggregate intrinsic Value

Outstanding as of December 31, 2019		2,112,009			15.44		3.58		168,229
Granted		59,558			101.81
Exercised		(1,434,129	)		10.93
Outstanding as of September 30, 2020		737,438			31.18		5.79		152,776

Vested and expected to vest as of September 30, 2020		728,547			31.01		6.85		151,055

Exercisable as of September 30, 2020		497,011			23.48		6.32		106,792

The aggregate intrinsic value 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 nine months ended September 30, 2020 was $239,397.

The weighted average grant date fair values of options granted to employees and executive directors during the nine months ended September 30, 2020 was $53.65.

F - 25

SOLAREDGE TECHNOLOGIES, INC.

AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

U.S. dollars in thousands (except share and per share data)

NOTE 10:-STOCKHOLDERS’ EQUITY (Cont.)

A summary of the activity in the RSUs granted to employees and directors for the nine months ended September 30, 2020 is as follows:

	Number of RSUs			Weighted average grant date fair value

Unvested as of December 31, 2019		2,742,589			52.77
Granted		606,666			180.66
Vested		(807,986	)		43.34
Forfeited		(166,461	)		65.30
Unvested as of September 30, 2020		2,374,808			87.78

c.Employee Stock Purchase Plan (“ESPP”):

The Company adopted an ESPP. As of September 30, 2020, a total of 2,687,451 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 10% of their salaries to purchase common stock shares up to an aggregate limit of $10 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 September 30, 2020, 578,778 common stock shares had been purchased under the ESPP.

As of September 30, 2020, 2,108,673 common stock shares 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.

F - 26

SOLAREDGE TECHNOLOGIES, INC.

AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

U.S. dollars in thousands (except share and per share data)

NOTE 10:-STOCKHOLDERS’ EQUITY (Cont.)

d.Stock-based compensation expense for employees and non-employees:

The Company recognized stock-based compensation expenses related to stock options, RSUs and PSUs granted to employees and non-employee consultants and ESPP in the condensed consolidated statement of income for the three and nine months ended September 30, 2020 and 2019, as follows:

	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019

Cost of revenues	$	2,730	$	1,691	$	7,362	$	4,696
Research and development		6,904		4,269		18,129		11,935
Selling and marketing		4,066		2,779		10,703		7,905
General and administrative		2,559		2,628		6,799		7,907
Other operating expenses		-		6,242		-		6,242

Total stock-based compensation expense	$	16,259	$	17,609	$	42,993	$	38,685

As of September 30, 2020, there were total unrecognized compensation expenses in the amount of $207,529 related to non‑vested equity‑based compensation arrangements granted under the Company’s Plans. These expenses are expected to be recognized during the period from October 1, 2020 through October 31, 2024.

EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

EARNINGS PER SHARE

NOTE 11:-EARNINGS PER SHARE

Basic net Earnings Per Share (“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."

No shares were excluded from the calculation of diluted net EPS due to their anti-dilutive effect for the three and nine months ended September 30, 2020.

334,096 and 304,725 shares were excluded from the calculation of diluted net earnings per share due to their anti-dilutive effect for the three and nine months ended September 30, 2019, respectively.

F - 27

SOLAREDGE TECHNOLOGIES, INC.

AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

U.S. dollars in thousands (except share and per share data)

NOTE 11:-EARNINGS PER SHARE (Cont.)

The following table presents the computation of basic and diluted net EPS attributable to SolarEdge Technologies, Inc. for the periods presented:

	Three months ended September 30,					Nine months ended September 30,
	2020		2019			2020		2019

Basic EPS:
Numerator:
Net income	$	43,751	$	41,724		$	122,667	$	92,612
Net (income) loss attributable to Non-controlling interests		-		(97	)		-		1,159
Net income attributable to SolarEdge Technologies, Inc.	$	43,751	$	41,627		$	122,667	$	93,771

Denominator:
Shares used in computing net earnings per share of common stock, basic		50,529,691		48,195,020			49,842,399		47,637,023

Diluted EPS:
Numerator:
Net income	$	43,751	$	41,724		$	122,667	$	92,612
Notes due 2025 (1)		137		-			137		-
Net (income) loss attributable to Non-controlling interests		-		(97	)		-		1,159
Undistributed earnings reallocated to non-vested stockholders		-		(270	)		-		(569	)
Net income attributable to SolarEdge Technologies, Inc.	$	43,888	$	41,357		$	122,804	$	93,202

Denominator:
Shares used in computing net earnings per share of common stock, basic		50,529,691		48,195,020			49,842,399		47,637,023
Weighted average effect of dilutive securities:
Non-vested PSUs		-		(334,096	)		-		(304,725	)
Notes due 2025 (1)		197,984		3,220,670			65,995		2,603,340
Effect of stock-based awards		2,416,513		-			2,715,281		-
Shares used in computing net earnings per share of common stock, diluted		53,144,188		51,081,594			52,623,675		49,935,638

(1) See Note 8 for additional details.

OTHER OPERATING EXPENSES (INCOME)

9 Months Ended

Sep. 30, 2020

Other Income and Expenses [Abstract]

OTHER OPERATING EXPENSES (INCOME)

NOTE 12:-OTHER OPERATING EXPENSES (INCOME)

At the time of the acquisition of Kokam Co., Ltd. (“Kokam”), Kokam had an outstanding claim against it for damages. The claim was settled for an amount of $4,900, which was recognized as an expense in other operating expenses in the consolidated statement of income in the year ended December 31, 2019. In March 2020, the Company was indemnified for the full amount by a major selling shareholder of Kokam. For the nine months ended September 30, 2020, the Company recognized this as other operating income.

INCOME TAXES

9 Months Ended

Sep. 30, 2020

Income Taxes

INCOME TAXES

NOTE 13:-INCOME TAXES

a.Income taxes are comprised as follows:

	Three months ended September 30,						Nine months ended September 30,
	2020			2019			2020			2019

Current period taxes	$	2,976		$	10,418		$	23,717		$	29,327
Deferred tax income, net and others		(568	)		(3,148	)		(7,525	)		(4,922	)

Taxes on income	$	2,408		$	7,270		$	16,192		$	24,405

b.Uncertain tax positions:

	September 30, 2020		December 31, 2019

Balance at January 1,	$	9,532	$	8,499
Increases related to current year tax positions		602		1,033

	$	10,134	$	9,532

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

SEGMENT INFORMATION

NOTE 14:-SEGMENT INFORMATION

Following the completion of three acquisitions during 2018 and 2019, the Company has changed its segments measurement, beginning in 2019. The purpose of the new measurement is to provide the Company’s chief operating decision maker (“CODM”) better information to assess segment performance and to make resource allocation decisions. The Company now operates in five different operating segments: Solar, Critical Power (formerly known as UPS), Energy Storage, e-Mobility and Automation Machines.

The Company's Chief Executive Officer is the CODM who makes resource allocation decisions and assesses performance based on the financial information presented on a consolidated basis, accompanied by disaggregated information about revenues and contributed profit by the operating segments.

Segment profit is comprised of gross profit for the segment less operating expenses that do not include amortization, 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 commingled. The Company’s CODM does not regularly review asset information by segments and, therefore, the Company does not report asset information by segment.

F - 29

SOLAREDGE TECHNOLOGIES, INC.

AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

U.S. dollars in thousands (except share and per share data)

NOTE 14:-SEGMENT INFORMATION (cont.)

The Company identified one operating segment as reportable – the Solar segment. The other operating segments are insignificant individually and in the aggregate and therefore their results are presented together under “All other”.

The Solar segment includes the design, development, manufacture, and sales of an intelligent inverter solution designed to maximize power generation at the individual PV module level. The solution consists mainly of the Company’s power optimizers, inverters and cloud-based monitoring platform.

The “All other” category includes the design, development, manufacturing and sales of UPS products, energy storage products, e-Mobility products and automated machines. Intersegment sales are a source of revenue for one of the operating segments included in the “All other” category.

The Company accounts for intersegment sales as if the sales were to third parties, that is, at current market prices.

The following table presents information on reportable segments profit (loss) for the periods ended September 30, 2020:

	Three months ended September 30, 2020					Nine months ended September 30, 2020
	Solar		All other			Solar		All other

Revenues	$	312,480	$	25,615		$	1,030,175	$	71,476
Cost of revenues		203,590		21,283			673,751		61,974
Gross profit		108,890		4,332			356,424		9,502
Research and development		26,466		7,421			79,923		17,481
Sales and marketing		15,160		2,328			48,803		6,650
General and administrative		10,593		1,210			28,467		9,228
Segments profit (loss)	$	56,671	$	(6,627	)	$	199,231	$	(23,857	)

The following table presents information on reportable segments profit (loss) for the periods ended September 30, 2019:

	Three months ended September 30, 2019					Nine months ended September 30, 2019
	Solar		All other			Solar		All other

Revenues	$	387,772	$	22,784		$	947,586	$	59,851
Cost of revenues		250,493		16,058			610,335		47,927
Gross profit		137,279		6,726			337,251		11,924
Research and development		23,707		2,754			66,219		8,235
Sales and marketing		16,551		2,256			48,900		6,273
General and administrative		7,473		2,045			21,542		6,546
Segments profit (loss)	$	89,548	$	(329	)	$	200,590	$	(9,130	)

F - 30

SOLAREDGE TECHNOLOGIES, INC.

AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

U.S. dollars in thousands (except share and per share data)

NOTE 14:-SEGMENT INFORMATION (cont.)

The following table presents information on reportable segments reconciliation to consolidated revenues for the periods presented:

	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020			2019

Solar segment revenues	$	312,480	$	387,772	$	1,030,175		$	947,586
All other segment revenues		25,615		22,784		71,476			59,851
Adjustment of intersegment revenues		-		-		(487	)		-
Consolidated revenues	$	338,095	$	410,556	$	1,101,164		$	1,007,437

The following table presents information on reportable segments reconciliation to consolidated operating income for the periods presented:

	Three months ended September 30,						Nine months ended September 30,
	2020			2019			2020			2019

Solar segment profit	$	56,671		$	89,548		$	199,231		$	200,590
All other segment loss		(6,627	)		(329	)		(23,857	)		(9,130	)
Segments operating profit		50,044			89,219			175,374			191,460
Amounts not allocated to segments:
Stock based compensation expenses		(16,259	)		(11,367	)		(42,993	)		(32,443	)
Amortization		(2,833	)		(3,409	)		(8,169	)		(8,671	)
Legal settlement (see Note 11)		-			-			4,900			-
Cost of products adjustments		-			(107	)		(313	)		(1,108	)
Other unallocated expenses		(558	)		(14	)		(558	)		(1,515	)
Non recurring expenses		-			(8,305	)		-			(8,305	)
Adjustments:
Intersegment profit		-			-			(107	)		-
Consolidated operating income	$	30,394		$	66,017		$	128,134		$	139,418

Schedule of AFS Marketable Debt Securities

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (a)
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+ Details

INVENTORIES (Tables)

9 Months Ended

Sep. 30, 2020

Inventory Disclosure [Abstract]

Schedule of Inventories

	September 30, 2020		December 31, 2019


Raw materials	$	116,339	$	64,714
Work in process		22,536		20,752
Finished goods		158,152		85,332

	$	297,027	$	170,798

MARKETABLE SECURITIES (Tables)

9 Months Ended

Sep. 30, 2020

Marketable Securities [Abstract]

The following table summarizes the AFS marketable debt securities as of September 30, 2020:

	Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value

AFS – matures within one year:
Corporate bonds	$	108,306	$	878	$	(11	)	$	109,173
Governmental bonds		1,398		14		-			1,412
		109,704		892		(11	)		110,585

AFS – matures after one year:
Corporate bonds		20,822		184		(3	)		21,003

Total	$	130,526	$	1,076	$	(14	)	$	131,588

The following table summarizes the AFS marketable debt securities as of December 31, 2019:

	Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value

AFS – matures within one year:
Corporate bonds	$	91,677	$	196	$	(28	)	$	91,845

AFS – matures after one year:
Corporate bonds		117,692		336		(250	)		117,778
Governmental bonds		1,398		-		-			1,398
		119,090		336		(250	)		119,176

Total	$	210,767	$	532	$	(278	)	$	211,021

WARRANTY OBLIGATIONS (Tables)

9 Months Ended

Sep. 30, 2020

Product Warranties Disclosures [Abstract]

Schedule of Warranty Obligations

Changes in the Company’s product warranty obligations for the nine months ended September 30, 2020 and 2019 were as follows:

	Nine months ended September 30,
	2020			2019


Balance, at beginning of period	$	172,563		$	121,826
Additions and adjustments to cost of revenues		74,465			79,791
Usage and current warranty expenses		(51,334	)		(30,263	)

Balance, at end of period		195,694			171,354
Less current portion		(65,080	)		(45,887	)

Long-term portion	$	130,614		$	125,467

FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Schedule of Assets and Liabilities Measured at Fair Value

The following table sets forth the Company’s assets that were measured at fair value as of September 30, 2020 and December 31, 2019, by level within the fair value hierarchy:

		Fair value measurements as of
	Fair Value	September 30,			December 31,
Description	Hierarchy	2020			2019


Assets:
Cash equivalents:
Money market mutual funds	Level 1	$	721,088		$	527

Derivative instruments asset:
Options and forward contracts not designated as hedging instruments	Level 2	$	780		$	-

Short-term marketable securities:
Corporate bonds	Level 2	$	109,173		$	91,845
Governmental bonds	Level 2	$	1,412		$	-

Long-term marketable securities:
Corporate bonds	Level 2	$	21,003		$	117,778
Governmental bonds	Level 2	$	-		$	1,398

Liabilities:
Derivative instruments liability:
Options and forward contracts not designated as hedging instruments	Level 2	$	(1,119	)	$	-

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables)

9 Months Ended

Sep. 30, 2020

Schedule of Reclassifications of Other Comprehensive Income Loss

The following table provides details about reclassifications out of accumulated other comprehensive income (loss):

Details about Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified from Accumulated Other Comprehensive Loss										Affected Line Item in the Statements of Income
	Three months ended					Nine months ended
	September 30, 2020					September 30, 2020
	2020			2019		2020			2019

Unrealized gains on cash flow hedges, net	$	90		$	-	$	189		$	-	Cost of revenues
		353			-		623			-	Research and development
		75			-		136			-	Sales and marketing
		87			-		153			-	General and administrative

		605			-		1,101			-	Total, before income taxes

		(74	)		-		(135	)		-	Income tax expense

	$	531		$	-	$	966		$	-	Total, net of income taxes

CREDIT LOSSES (Tables)

9 Months Ended

Sep. 30, 2020

Receivables [Abstract]

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:

	Nine months ended September
	30, 2020


Balance, at beginning of period	$	2,473
Provision for expected credit losses		4,595
Amounts written off charged against the allowance and others		(378	)

Balance, at end of period	$	6,690

CONVERTIBLE SENIOR NOTES (Tables)

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Schedule of Convertible Senior Notes

The Convertible Senior Notes consisted of the following as of September 30, 2020:

	September 30,
	2020


Liability:
Principal	$	632,500
Unamortized debt discount		(48,703	)
Unamortized issuance costs		(13,465	)
Net carrying amount	$	570,332

Equity component:
Amount allocated to conversion option	$	48,834
Deferred taxes liability, net		(11,368	)
Allocated issuance costs		(1,130	)
Equity component, net	$	36,336

Schedule of Interest Expense Recognized

The following table presents the total amount of interest expenses recognized related to the Notes for the three and nine months ended September 30, 2020:

	September 30, 2020

Amortization of debt discount	$	131
Amortization of debt issuance costs		37

Total interest expenses	$	168

STOCKHOLDERS' EQUITY (Tables)

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

Schedule of Composition of Common Stock Capital

a.Common Stock:

	Number of shares
	Authorized as of		Issued as of		Outstanding as of
	September 30, 2020	December 31, 2019	September 30, 2020	December 31, 2019	September 30, 2020	December 31, 2019

Stock of $0.0001 par value:
Common stock	125,000,000	125,000,000	51,207,310	49,081,457	51,207,310	48,898,062

Schedule of Stock Option Activity

A summary of the activity in the stock options granted to employees and members of the board of directors for the nine months ended September 30, 2020 and related information are as follows:

	Number of Options			Weighted average exercise price		Weighted average remaining contractual term in years		Aggregate intrinsic Value

Outstanding as of December 31, 2019		2,112,009			15.44		3.58		168,229
Granted		59,558			101.81
Exercised		(1,434,129	)		10.93
Outstanding as of September 30, 2020		737,438			31.18		5.79		152,776

Vested and expected to vest as of September 30, 2020		728,547			31.01		6.85		151,055

Exercisable as of September 30, 2020		497,011			23.48		6.32		106,792

Schedule of RSU Activity

A summary of the activity in the RSUs granted to employees and directors for the nine months ended September 30, 2020 is as follows:

	Number of RSUs			Weighted average grant date fair value

Unvested as of December 31, 2019		2,742,589			52.77
Granted		606,666			180.66
Vested		(807,986	)		43.34
Forfeited		(166,461	)		65.30
Unvested as of September 30, 2020		2,374,808			87.78

Schedule of Recognized Stock-Based Compensation Expense

	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019

Cost of revenues	$	2,730	$	1,691	$	7,362	$	4,696
Research and development		6,904		4,269		18,129		11,935
Selling and marketing		4,066		2,779		10,703		7,905
General and administrative		2,559		2,628		6,799		7,907
Other operating expenses		-		6,242		-		6,242

Total stock-based compensation expense	$	16,259	$	17,609	$	42,993	$	38,685

Schedule of Computation of Basic and Diluted Net Earnings (Loss) Per Share

Tabular disclosure of an entity's stock, including par or stated value per share, number and dollar amount of share subscriptions, shares authorized, shares issued, shares outstanding, number and dollar amount of shares held in an employee trust, dividend per share, total dividends, share conversion features, par value plus additional paid in capital, the value of treasury stock and other information necessary to a fair presentation, and EPS information. Stock by class includes common, convertible, and preferred stocks which are not redeemable or redeemable solely at the option of the issuer. Includes preferred stock with redemption features that are solely within the control of the issuer and mandatorily redeemable stock if redemption is required to occur only upon liquidation or termination of the reporting entity. If more than one issue is outstanding, state the title of each issue and the corresponding dollar amount; dollar amount of any shares subscribed but unissued and the deduction of subscriptions receivable there from; number of shares authorized, issued, and outstanding.

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+ Details

EARNINGS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

The following table presents the computation of basic and diluted net EPS attributable to SolarEdge Technologies, Inc. for the periods presented:

	Three months ended September 30,					Nine months ended September 30,
	2020		2019			2020		2019

Basic EPS:
Numerator:
Net income	$	43,751	$	41,724		$	122,667	$	92,612
Net (income) loss attributable to Non-controlling interests		-		(97	)		-		1,159
Net income attributable to SolarEdge Technologies, Inc.	$	43,751	$	41,627		$	122,667	$	93,771

Denominator:
Shares used in computing net earnings per share of common stock, basic		50,529,691		48,195,020			49,842,399		47,637,023

Diluted EPS:
Numerator:
Net income	$	43,751	$	41,724		$	122,667	$	92,612
Notes due 2025 (1)		137		-			137		-
Net (income) loss attributable to Non-controlling interests		-		(97	)		-		1,159
Undistributed earnings reallocated to non-vested stockholders		-		(270	)		-		(569	)
Net income attributable to SolarEdge Technologies, Inc.	$	43,888	$	41,357		$	122,804	$	93,202

Denominator:
Shares used in computing net earnings per share of common stock, basic		50,529,691		48,195,020			49,842,399		47,637,023
Weighted average effect of dilutive securities:
Non-vested PSUs		-		(334,096	)		-		(304,725	)
Notes due 2025 (1)		197,984		3,220,670			65,995		2,603,340
Effect of stock-based awards		2,416,513		-			2,715,281		-
Shares used in computing net earnings per share of common stock, diluted		53,144,188		51,081,594			52,623,675		49,935,638

(1) See Note 8 for additional details.

INCOME TAXES (Tables)

9 Months Ended

Sep. 30, 2020

Income Taxes Tables

Schedule of Taxes on Income

a.Income taxes are comprised as follows:

	Three months ended September 30,						Nine months ended September 30,
	2020			2019			2020			2019

Current period taxes	$	2,976		$	10,418		$	23,717		$	29,327
Deferred tax income, net and others		(568	)		(3,148	)		(7,525	)		(4,922	)

Taxes on income	$	2,408		$	7,270		$	16,192		$	24,405

Schedule of Uncertain Tax Positions

b.Uncertain tax positions:

	September 30, 2020		December 31, 2019

Balance at January 1,	$	9,532	$	8,499
Increases related to current year tax positions		602		1,033

	$	10,134	$	9,532

SEGMENT INFORMATION (Tables)

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Schedule of Reportable Segments and Operating Income

The following table presents information on reportable segments profit (loss) for the periods ended September 30, 2020:

	Three months ended September 30, 2020					Nine months ended September 30, 2020
	Solar		All other			Solar		All other

Revenues	$	312,480	$	25,615		$	1,030,175	$	71,476
Cost of revenues		203,590		21,283			673,751		61,974
Gross profit		108,890		4,332			356,424		9,502
Research and development		26,466		7,421			79,923		17,481
Sales and marketing		15,160		2,328			48,803		6,650
General and administrative		10,593		1,210			28,467		9,228
Segments profit (loss)	$	56,671	$	(6,627	)	$	199,231	$	(23,857	)

The following table presents information on reportable segments profit (loss) for the periods ended September 30, 2019:

	Three months ended September 30, 2019					Nine months ended September 30, 2019
	Solar		All other			Solar		All other

Revenues	$	387,772	$	22,784		$	947,586	$	59,851
Cost of revenues		250,493		16,058			610,335		47,927
Gross profit		137,279		6,726			337,251		11,924
Research and development		23,707		2,754			66,219		8,235
Sales and marketing		16,551		2,256			48,900		6,273
General and administrative		7,473		2,045			21,542		6,546
Segments profit (loss)	$	89,548	$	(329	)	$	200,590	$	(9,130	)

Schedule of Reportable Segments Reconciliation to Consolidated Revenues

The following table presents information on reportable segments reconciliation to consolidated revenues for the periods presented:

	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020			2019

Solar segment revenues	$	312,480	$	387,772	$	1,030,175		$	947,586
All other segment revenues		25,615		22,784		71,476			59,851
Adjustment of intersegment revenues		-		-		(487	)		-
Consolidated revenues	$	338,095	$	410,556	$	1,101,164		$	1,007,437

The following table presents information on reportable segments reconciliation to consolidated operating income for the periods presented:

	Three months ended September 30,						Nine months ended September 30,
	2020			2019			2020			2019

Solar segment profit	$	56,671		$	89,548		$	199,231		$	200,590
All other segment loss		(6,627	)		(329	)		(23,857	)		(9,130	)
Segments operating profit		50,044			89,219			175,374			191,460
Amounts not allocated to segments:
Stock based compensation expenses		(16,259	)		(11,367	)		(42,993	)		(32,443	)
Amortization		(2,833	)		(3,409	)		(8,169	)		(8,671	)
Legal settlement (see Note 11)		-			-			4,900			-
Cost of products adjustments		-			(107	)		(313	)		(1,108	)
Other unallocated expenses		(558	)		(14	)		(558	)		(1,515	)
Non recurring expenses		-			(8,305	)		-			(8,305	)
Adjustments:
Intersegment profit		-			-			(107	)		-
Consolidated operating income	$	30,394		$	66,017		$	128,134		$	139,418

GENERAL (Narrative) (Details)	9 Months Ended	12 Months Ended
GENERAL (Narrative) (Details)	Sep. 30, 2020	Dec. 31, 2019
Accounts Payable [Member]
Organization Consolidation and Presentation of Financial Statements [Line Items]
Concentration risk (as a percent)	47.40%	42.30%

INVENTORIES (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Inventory Disclosure [Abstract]
Raw materials	$ 116,339	$ 64,714
Work in process	22,536	20,752
Finished goods	158,152	85,332
Inventories, net	$ 297,027	$ 170,798

MARKETABLE SECURITIES (Schedule of AFS Marketable Debt Securities) (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
AFS - matures within one year, Amortized cost	$ 109,704
AFS - matures within one year, Gross unrealized gains	892
AFS - matures within one yearr, Gross unrealized losses	(11)
AFS - matures within one year, Fair value	110,585
AFS - matures after one year, Amortized cost		$ 119,090
AFS - matures after one year, Gross unrealized gains		336
AFS - matures after one year, Gross unrealized losses		(250)
AFS - matures after one year, Fair value		119,176
Amortized cost	130,526	210,767
Gross unrealized gains	1,076	532
Gross unrealized losses	(14)	(278)
Fair value	131,588	211,021
Corporate bonds [Member]
AFS - matures within one year, Amortized cost	108,306	91,677
AFS - matures within one year, Gross unrealized gains	878	196
AFS - matures within one yearr, Gross unrealized losses	(11)	(28)
AFS - matures within one year, Fair value	109,173	91,845
AFS - matures after one year, Amortized cost	20,822	117,692
AFS - matures after one year, Gross unrealized gains	184	336
AFS - matures after one year, Gross unrealized losses	(3)	(250)
AFS - matures after one year, Fair value	21,003	117,778
Governmental bonds [Member]
AFS - matures within one year, Amortized cost	1,398
AFS - matures within one year, Gross unrealized gains	14
AFS - matures within one yearr, Gross unrealized losses
AFS - matures within one year, Fair value	$ 1,412
AFS - matures after one year, Amortized cost		1,398
AFS - matures after one year, Gross unrealized gains
AFS - matures after one year, Gross unrealized losses
AFS - matures after one year, Fair value		$ 1,398

WARRANTY OBLIGATIONS (Details) - USD ($) $ in Thousands	9 Months Ended
WARRANTY OBLIGATIONS (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Sep. 30, 2019
Changes in the Company's product warranty liability
Balance, at beginning of period	$ 172,563	$ 121,826
Additions and adjustments to cost of revenues	74,465	79,791
Usage and current warranty expenses	(51,334)	(30,263)
Balance, at end of period	195,694	171,354
Less current portion	(65,080)	(45,887)
Long-term portion	$ 130,614	$ 125,467

FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Money Market Mutual Funds [Member] \| Level 1 [Member]
Fair value of assets	$ 721,088	$ 527
Derivative instruments asset Options and forward contracts not designated as hedging instruments [Member] \| Level 2 [Member]
Fair value of assets	780
Fair value of liabilities	(1,119)
Short-term corporate bonds [Member] \| Level 2 [Member]
Fair value of assets	109,173	91,845
Short-term governmental bonds [Member] \| Level 2 [Member]
Fair value of assets	1,412
Long-term corporate bonds [Member] \| Level 2 [Member]
Fair value of assets	21,003	117,778
Long-term governmental bonds [Member] \| Level 2 [Member]
Fair value of assets		$ 1,398

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Narrative) (Details) $ in Thousands, € in Millions, $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2020 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2020 EUR (€)	Sep. 30, 2020 AUD ($)
Derivative [Line Items]
Fair value of derivative assets	$ 780	$ 780
Loss of financial expenses net	1,450	959
Fair value of derivative liabilities	1,119	1,119
Foreign exchange forward contracts [Member] \| Australia, Dollars [Member]
Derivative [Line Items]
Forward/option contracts				$ 7.5
Put and Call Options [Member] \| Euro [Member]
Derivative [Line Items]
Forward/option contracts \| €			€ 45
Put and Call Options [Member] \| USD [Member]
Derivative [Line Items]
Forward/option contracts	$ 48,600	$ 48,600

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Schedule of Reclassifications of Other Comprehensive Income Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Cost of Revenues	$ 230,032	$ 271,247	$ 750,130	$ 671,348
Research and development	40,817	30,747	115,610	86,451
Sales and marketing	21,924	22,026	67,113	64,325
General and administrative	14,928	12,214	45,077	37,590
Total, before income taxes	77,669	73,292	222,900	196,671
Income tax expense	2,408	7,270	16,192	24,405
Total, net of income taxes	43,751	41,724	122,667	92,612
Unrealized gains on cash flow hedges, net [Member] \| Amount Reclassified from Accumulated Other Comprehensive Loss [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Cost of Revenues	90		189
Research and development	353		623
Sales and marketing	75		136
General and administrative	87		153
Total, before income taxes	605		1,101
Income tax expense	(74)		(135)
Total, net of income taxes	$ 531		$ 966

CREDIT LOSSES (Schedule of Allowance for Credit Losses) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2020 USD ($)
Receivables [Abstract]
Balance, at beginning of period	$ 2,473
Provision for expected credit losses	4,595
Amounts written off charged against the allowance and others	(378)
Balance, at end of period	$ 6,690

CONVERTIBLE SENIOR NOTES (Narrative) (Details)	1 Months Ended	9 Months Ended
CONVERTIBLE SENIOR NOTES (Narrative) (Details)	Sep. 25, 2020 USD ($) d $ / shares	Sep. 30, 2020 USD ($)
Debt Instrument [Line Items]
Issuance costs		$ 1,130,000
Convertible Senior Notes due 2025 [Member]
Debt Instrument [Line Items]
Principal amount sold	$ 632,500
Effective interest	0.00%	2.10%
Maturity date	Sep. 15, 2025
Conversion amount	$ 1,000
Conversion days \| d	30
Conversion rate \| $ / shares	$ 3.5997
Amount of conversion	$ 1,000
Conversion price \| $ / shares	$ 277.80
Amortized period		5 years
Issuance costs		$ 14,632
Allocated Issuance costs		13,502
Liability and equity components		$ 1,130

CONVERTIBLE SENIOR NOTES (Schedule of Convertible Senior Notes) (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Liability:
Principal	$ 632,500
Unamortized debt discount	(48,703)
Unamortized issuance costs	(13,465)
Net carrying amount	570,332
Equity component:
Amount allocated to conversion option	48,834
Deferred taxes liability, net	(11,368)
Allocated issuance costs	1,130
Equity component, net	$ 36,336

CONVERTIBLE SENIOR NOTES (Schedule of Interest Expense Recognized) (Details) $ in Thousands	3 Months Ended
	Sep. 30, 2020 USD ($)
Debt Disclosure [Abstract]
Amortization of debt discount	$ 131
Amortization of debt issuance costs	37
Total interest expenses	$ 168

COMMITMENTS AND CONTINGENT LIABILITIES (Details) € / shares in Units, $ in Thousands, € in Millions, ₪ in Millions, ¥ in Millions	1 Months Ended		9 Months Ended			12 Months Ended
	Aug. 31, 2019 USD ($)	Aug. 31, 2019 EUR (€) € / shares	Sep. 30, 2020 USD ($)	Sep. 30, 2020 CNY (¥)	Sep. 30, 2020 EUR (€)	Dec. 31, 2019 USD ($)	Dec. 31, 2019 ILS (₪)
Non-cancelable purchase obligations			$ 326,661
Provision for loss			3,118
Contractual obligations for capital expenditures			114,526
Lawsuit claims			4,250
Difference amount of tendered shares for shareholders of SMRE	$ 3,150
Damages Paid			1,550
Accured amount of legal claims			1,709
Former Consultant and Israeli Subsidiary [Member]
Lawsuit claims						$ 7,400
SMRE [Member] \| Minimum [Member]
Difference amount per share of tendered shares for shareholders of SMRE \| € / shares		€ 6
SMRE [Member] \| Maximum [Member]
Difference amount per share of tendered shares for shareholders of SMRE \| € / shares		€ 6.77
Euro [Member] \| SMRE [Member]
Difference amount of tendered shares for shareholders of SMRE \| €		€ 2.7
RMB [Member]
Lawsuit claims \| ¥				¥ 30.0
Damages Paid \| ¥				¥ 10.5
Israel, New Shekels \| Former Consultant and Israeli Subsidiary [Member]
Lawsuit claims \| ₪							₪ 25.5
Patents [Member]
Value in dispute			6,450
Patents [Member] \| Euro [Member]
Value in dispute \| €					€ 55.0
Bank loans [Member]
Guarantees amount			18,643
Office Rent Lease Agreements [Member]
Guarantees amount			2,176
Other Transactions [Member]
Guarantees amount			$ 240

STOCKHOLDERS' EQUITY (Narrative) (Details) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2020 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense \| $	$ 207,529
Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Intrinsic value of options exercised \| $	$ 239,397
Weighted average grant date fair value of options granted \| $ / shares	$ 53.65
Maximum [Member] \| Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options available for future grant under the plan	10,000,000
2007 Plan, Transferred to 2015 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options available for future grant under the plan	379,358
2015 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options reserved for issuance under the plan	12,828,270
2015 Plan [Member] \| Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Annual increase percentage	5.00%
2015 Plan [Member] \| Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options available for future grant under the plan	8,627,031
ESPP [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options reserved for issuance under the plan	2,687,451
Number of options available for future grant under the plan	2,108,673
Maximum number of excess shares authorized	487,643
Number of Common stock purchased	578,778
Maximum percentage of salary	10.00%
Maximum amount authorized per person \| $	$ 10
Maximum percentage of common stock	85.00%
ESPP [Member] \| Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Annual increase percentage	1.00%

STOCKHOLDERS' EQUITY (Schedule of Composition of Common Stock Capital) (Details) - $ / shares	Sep. 30, 2020	Dec. 31, 2019
Common stock capital
Par value	$ 0.0001	$ 0.0001
Authorized	125,000,000	125,000,000
Common stock, issued shares	51,207,310	49,081,457
Common stock, outstanding shares	51,207,310	48,898,062

STOCKHOLDERS' EQUITY (Schedule of Stock Option Activity) (Details) - Option [Member] - Employees and Members of Board of Directors [Member] $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2020 USD ($) $ / shares shares
Number of Options
Outstanding as of December 31, 2019 \| shares	2,112,009
Granted \| shares	59,558
Exercised \| shares	(1,434,129)
Outstanding as of September 30, 2020 \| shares	737,438
Vested and expected to vest as of September 30, 2020 \| shares	728,547
Exercisable as of September 30, 2020 \| shares	497,011
Weighted average exercise price
Outstanding as of December 31, 2019 \| $ / shares	$ 15.44
Granted \| $ / shares	101.81
Exercised \| $ / shares	10.93
Outstanding as of September 30, 2020 \| $ / shares	31.18
Vested and expected to vest as of September 30, 2020 \| $ / shares	31.01
Exercisable as of September 30, 2020 \| $ / shares	$ 23.48
Weighted average remaining contractual term in years
Outstanding as of December 31, 2019	3 years 6 months 29 days
Outstanding as of September 30, 2020	5 years 9 months 14 days
Vested and expected to vest as of September 30, 2020	6 years 10 months 6 days
Exercisable as of September 30, 2020	6 years 3 months 25 days
Aggregate intrinsic Value
Outstanding as of December 31, 2019 \| $	$ 168,229
Outstanding as of September 30, 2020 \| $	152,776
Vested and expected to vest as of September 30, 2020 \| $	151,055
Exercisable as of September 30, 2020 \| $	$ 106,792

STOCKHOLDERS' EQUITY (Schedule of RSU Activity) (Details) - Restricted Stock Units (RSUs) [Member] - Employees and Members of Board of Directors [Member]	9 Months Ended
	Sep. 30, 2020 $ / shares shares
Number of RSUs
Unvested as of December 31, 2019 \| shares	2,742,589
Granted \| shares	606,666
Vested \| shares	(807,986)
Forfeited \| shares	(166,461)
Unvested as of September 30, 2020 \| shares	2,374,808
Weighted average grant date fair value
Unvested as of December 31, 2019 \| $ / shares	$ 52.77
Granted \| $ / shares	180.66
Vested \| $ / shares	43.34
Forfeited \| $ / shares	65.30
Unvested as of September 30, 2020 \| $ / shares	$ 87.78

STOCKHOLDERS' EQUITY (Schedule of Recognized Stock-Based Compensation Expense) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	$ 16,259	$ 17,609	$ 42,993	$ 38,685
Cost of revenues [Member]
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	2,730	1,691	7,362	4,696
Research and development [Member]
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	6,904	4,269	18,129	11,935
Selling and marketing [Member]
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	4,066	2,779	10,703	7,905
General and administrative [Member]
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	2,559	2,628	6,799	7,907
Other operating expenses [Member]
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense		$ 6,242		$ 6,242

EARNINGS PER SHARE (Narrative) (Details) - shares	3 Months Ended	9 Months Ended
EARNINGS PER SHARE (Narrative) (Details) - shares	Sep. 30, 2019	Sep. 30, 2019
Earnings Per Share [Abstract]
Anti-dilutive securities	334,096	304,725

EARNINGS PER SHARE (Schedule of Computation of Basic and Diluted Net Earnings (Loss) Per Share) (Details) - USD ($)
$ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2020

Jun. 30, 2020

Mar. 31, 2020

Sep. 30, 2019

Jun. 30, 2019

Mar. 31, 2019

Sep. 30, 2020

Sep. 30, 2019

Numerator:

Net (income) loss attributable to Non-controlling interests

$ 43,751

$ 41,724

$ 122,667

$ 92,612

(97)

1,159

Net income attributable to SolarEdge Technologies, Inc.

$ 43,751

$ 36,668

$ 42,248

$ 41,627

$ 33,128

$ 19,016

$ 122,667

$ 93,771

Denominator:

Shares used in computing net earnings per share of common stock, basic

50,529,691

48,195,020

49,842,399

47,637,023

Numerator:

Net (income) loss attributable to Non-controlling interests

$ 43,751

$ 41,724

$ 122,667

$ 92,612

Notes due 2025

^[1]

137

(97)

1,159

Undistributed earnings reallocated to non-vested stockholders

(270)

(569)

Net income attributable to SolarEdge Technologies, Inc.

$ 43,888

$ 41,357

$ 122,804

$ 93,202

Denominator:

Shares used in computing net earnings per share of common stock, basic

50,529,691

48,195,020

49,842,399

47,637,023

Weighted average effect of dilutive securities:

Non-vested PSUs

(334,096)

(304,725)

Notes due 2025

^[1]

197,984

3,220,670

65,995

2,603,340

Effect of stock-based awards

2,416,513

2,715,281

Shares used in computing net earnings per share of common stock, diluted

53,144,188

51,081,594

52,623,675

49,935,638

[1]	See Note 8 for additional details.

OTHER OPERATING EXPENSES (INCOME) (Details) $ in Thousands	12 Months Ended
OTHER OPERATING EXPENSES (INCOME) (Details) $ in Thousands	Dec. 31, 2019 USD ($)
Other Operating Expenses Abstract
A settlement of pre-acquisition legal claim against Kokam	$ 4,900

INCOME TAXES (Schedule of Taxes on Income) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Income Taxes Schedule Of Taxes On Income Details
Current period taxes	$ 2,976	$ 10,418	$ 23,717	$ 29,327
Deferred tax income, net and others	(568)	(3,148)	(7,525)	(4,922)
Taxes on income	$ 2,408	$ 7,270	$ 16,192	$ 24,405

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

INCOME TAXES (Schedule of Uncertain Tax Positions) (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Balance at January 1,	$ 9,532	$ 8,499
Increases related to current year tax positions	602	1,033
Closing balance	$ 10,134	$ 9,532

SEGMENT INFORMATION (Schedule of Reportable Segments and Operating Income) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Segment Reporting Information [Line Items]
Revenues	$ 338,095	$ 410,556	$ 1,101,164	$ 1,007,437
Cost of revenues	230,032	271,247	750,130	671,348
Gross profit	108,063	139,309	351,034	336,089
Research and development	40,817	30,747	115,610	86,451
Sales and marketing	21,924	22,026	67,113	64,325
General and administrative	14,928	12,214	45,077	37,590
Segments profit (loss)	43,751	41,724	122,667	92,612
Solar segment profit	56,671	89,548	199,231	200,590
All other segment loss	(6,627)	(329)	(23,857)	(9,130)
Segments operating profit	50,044	89,219	175,374	191,460
Amounts not allocated to segments:
Stock based compensation expenses	(16,259)	(11,367)	(42,993)	(32,443)
Amortization	(2,833)	(3,409)	(8,169)	(8,671)
Legal settlement (see Note 11)			4,900
Cost of products adjustments		(107)	(313)	(1,108)
Other unallocated expenses	(558)	(14)	(558)	(1,515)
Non recurring expenses		(8,305)		(8,305)
Adjustments:
Intersegment profit			(107)
Consolidated operating income	30,394	66,017	128,134	139,418
Solar [Member]
Segment Reporting Information [Line Items]
Revenues	312,480	387,772	1,030,175	947,586
Cost of revenues	203,590	250,493	673,751	610,335
Gross profit	108,890	137,279	356,424	337,251
Research and development	26,466	23,707	79,923	66,219
Sales and marketing	15,160	16,551	48,803	48,900
General and administrative	10,593	7,473	28,467	21,542
Segments profit (loss)	56,671	89,548	199,231	200,590
All Other [Member]
Segment Reporting Information [Line Items]
Revenues	25,615	22,784	71,476	59,851
Cost of revenues	21,283	16,058	61,974	47,927
Gross profit	4,332	6,726	9,502	11,924
Research and development	7,421	2,754	17,481	8,235
Sales and marketing	2,328	2,256	6,650	6,273
General and administrative	1,210	2,045	9,228	6,546
Segments profit (loss)	$ (6,627)	$ (329)	$ (23,857)	$ (9,130)

SEGMENT INFORMATION (Schedule of Reportable Segments Reconciliation to Consolidated Revenues) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Segment Reporting Information [Line Items]
Revenues	$ 338,095	$ 410,556	$ 1,101,164	$ 1,007,437
Solar Segment Revenues [Member]
Segment Reporting Information [Line Items]
Revenues	312,480	387,772	1,030,175	947,586
All Other Segment Revenues [Member]
Segment Reporting Information [Line Items]
Revenues	25,615	22,784	71,476	59,851
Adjustment of Intersegment Revenues [Member]
Segment Reporting Information [Line Items]
Revenues			$ (487)