Income Tax Expense (Benefit)
Effective Income Tax Rate (EITR)
Components of Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities, Classification
Adjustments to Financial Statements: Removal of Deferred Taxes
Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

SolarEdge Technologies Inc., income tax expense (benefit), continuing operations

US$ in thousands

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Domestic	56,957)	(7,872)	1,842)	10,093)	13,894)
Foreign	37,473)	37,564)	24,936)	29,590)	2,276)
Current taxes	94,430)	29,692)	26,778)	39,683)	16,170)
Domestic	(8,954)	(3,682)	2,794)	(3,414)	(1,284)
Foreign	(2,100)	(7,956)	(6,228)	(2,623)	(5,809)
Deferred taxes	(11,054)	(11,638)	(3,434)	(6,037)	(7,093)
Income taxes, net	83,376)	18,054)	23,344)	33,646)	9,077)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

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Item	Description	The company
Current taxes	Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.	SolarEdge Technologies Inc. current taxes increased from 2020 to 2021 and from 2021 to 2022.
Deferred taxes	Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.	SolarEdge Technologies Inc. deferred taxes decreased from 2020 to 2021 but then slightly increased from 2021 to 2022.
Income taxes, net	Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	SolarEdge Technologies Inc. income taxes, net decreased from 2020 to 2021 but then increased from 2021 to 2022 exceeding 2020 level.

SolarEdge Technologies Inc., effective income tax rate (EITR) reconciliation

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Statutory tax rate	21.00%	21.00%	21.00%	21.00%	21.00%
Income tax at rate other than the U.S. statutory tax rate	-10.80%	-7.40%	-6.90%	-5.00%	-12.70%
Losses and timing differences for which valuation allowance was provided	5.20%	2.70%	4.40%	1.30%	0.00%
Prior year income taxes (benefit)	2.90%	-4.40%	-0.40%	0.10%	0.00%
R&D Capitalization and other effects of TCJA	18.90%	0.10%	0.00%	-0.70%	-1.00%
Disallowable and allowable deductions	13.20%	2.00%	-2.60%	2.30%	-0.50%
Other individually immaterial income tax items, net	-3.30%	-4.40%	-1.30%	-0.20%	-0.20%
Effective tax rate	47.10%	9.60%	14.20%	18.80%	6.60%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

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Item	Description	The company
Effective tax rate	Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	SolarEdge Technologies Inc. effective tax rate decreased from 2020 to 2021 but then increased from 2021 to 2022 exceeding 2020 level.

SolarEdge Technologies Inc., components of deferred tax assets and liabilities

US$ in thousands

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Research and Development carryforward expenses	9,335)	2,479)	1,843)	4,994)	9,482)
Carryforward tax losses	19,916)	19,635)	20,468)	6,318)	4,155)
Stock based compensation expenses	9,863)	12,140)	6,400)	4,898)	3,160)
Deferred revenue	8,954)	8,078)	5,609)	3,621)	1,268)
Lease liabilities	6,520)	—)	—)	—)	—)
Inventory Impairment	627)	1,326)	1,977)	2,442)	1,471)
Allowance and other reserves	30,242)	10,911)	4,372)	7,305)	3,072)
Gross deferred tax assets, net	85,457)	54,569)	40,669)	29,578)	22,608)
Valuation allowance	(23,777)	(14,648)	(9,634)	(2,317)	—)
Deferred tax assets, net	61,680)	39,921)	31,035)	27,261)	22,608)
Intercompany transactions	(6,292)	(6,099)	—)	—)	—)
Right-of-use assets	(6,618)	—)	—)	—)	—)
Convertible Note	—)	—)	(11,830)	—)	—)
Purchase price allocation	(4,617)	(6,406)	(16,122)	(15,424)	(9,408)
Deferred tax liabilities, net	(17,527)	(12,505)	(27,952)	(15,424)	(9,408)
Net deferred tax assets (liabilities)	44,153)	27,416)	3,083)	11,837)	13,200)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

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Item	Description	The company
Gross deferred tax assets, net	Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	SolarEdge Technologies Inc. gross deferred tax assets, net increased from 2020 to 2021 and from 2021 to 2022.
Deferred tax assets, net	Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	SolarEdge Technologies Inc. deferred tax assets, net increased from 2020 to 2021 and from 2021 to 2022.
Net deferred tax assets (liabilities)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting.	SolarEdge Technologies Inc. net deferred tax assets (liabilities) increased from 2020 to 2021 and from 2021 to 2022.

SolarEdge Technologies Inc., deferred tax assets and liabilities, classification

US$ in thousands

		Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
	Deferred tax assets, net	44,153)	27,572)	11,676)	16,298)	14,699)
	Deferred tax liabilities, net	—)	156)	8,593)	4,461)	1,499)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

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Item	Description	The company
Deferred tax assets, net	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent.	SolarEdge Technologies Inc. deferred tax assets, net increased from 2020 to 2021 and from 2021 to 2022.
Deferred tax liabilities, net	Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent.	SolarEdge Technologies Inc. deferred tax liabilities, net decreased from 2020 to 2021 and from 2021 to 2022.

SolarEdge Technologies Inc., adjustments to financial statements

US$ in thousands

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Adjustment to Total Assets
Total assets (as reported)	4,265,949)	2,892,060)	2,437,109)	1,494,624)	964,472)
Less: Noncurrent deferred tax assets, net	44,153)	27,572)	11,676)	16,298)	14,699)
Total assets (adjusted)	4,221,796)	2,864,488)	2,425,433)	1,478,326)	949,773)
Adjustment to Total Liabilities
Total liabilities (as reported)	2,089,583)	1,582,021)	1,351,352)	682,954)	393,746)
Less: Noncurrent deferred tax liabilities, net	—)	156)	8,593)	4,461)	1,499)
Total liabilities (adjusted)	2,089,583)	1,581,865)	1,342,759)	678,493)	392,247)
Adjustment to Total SolarEdge Technologies, Inc. Stockholders’ Equity
Total SolarEdge Technologies, Inc. stockholders’ equity (as reported)	2,176,366)	1,310,039)	1,085,757)	811,670)	562,408)
Less: Net deferred tax assets (liabilities)	44,153)	27,416)	3,083)	11,837)	13,200)
Total SolarEdge Technologies, Inc. stockholders’ equity (adjusted)	2,132,213)	1,282,623)	1,082,674)	799,833)	549,208)
Adjustment to Net Income Attributable To SolarEdge Technologies, Inc.
Net income attributable to SolarEdge Technologies, Inc. (as reported)	93,779)	169,170)	140,322)	146,549)	128,833)
Add: Deferred income tax expense (benefit)	(11,054)	(11,638)	(3,434)	(6,037)	(7,093)
Net income attributable to SolarEdge Technologies, Inc. (adjusted)	82,725)	157,532)	136,888)	140,512)	121,740)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

SolarEdge Technologies Inc., Financial Data: Reported vs. Adjusted

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SolarEdge Technologies Inc., adjusted financial ratios

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net Profit Margin
Reported net profit margin	3.02%	8.61%	9.62%	10.28%	13.75%
Adjusted net profit margin	2.66%	8.02%	9.38%	9.86%	12.99%
Total Asset Turnover
Reported total asset turnover	0.73	0.68	0.60	0.95	0.97
Adjusted total asset turnover	0.74	0.69	0.60	0.96	0.99
Financial Leverage
Reported financial leverage	1.96	2.21	2.24	1.84	1.71
Adjusted financial leverage	1.98	2.23	2.24	1.85	1.73
Return on Equity (ROE)
Reported ROE	4.31%	12.91%	12.92%	18.06%	22.91%
Adjusted ROE	3.88%	12.28%	12.64%	17.57%	22.17%
Return on Assets (ROA)
Reported ROA	2.20%	5.85%	5.76%	9.81%	13.36%
Adjusted ROA	1.96%	5.50%	5.64%	9.50%	12.82%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

Financial ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	SolarEdge Technologies Inc. adjusted net profit margin ratio deteriorated from 2020 to 2021 and from 2021 to 2022.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	SolarEdge Technologies Inc. adjusted total asset turnover ratio improved from 2020 to 2021 and from 2021 to 2022.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	SolarEdge Technologies Inc. adjusted financial leverage ratio decreased from 2020 to 2021 and from 2021 to 2022.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	SolarEdge Technologies Inc. adjusted ROE deteriorated from 2020 to 2021 and from 2021 to 2022.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	SolarEdge Technologies Inc. adjusted ROA deteriorated from 2020 to 2021 and from 2021 to 2022.

SolarEdge Technologies Inc., Financial Ratios: Reported vs. Adjusted

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	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net income attributable to SolarEdge Technologies, Inc.	93,779)	169,170)	140,322)	146,549)	128,833)
Revenues	3,110,279)	1,963,865)	1,459,271)	1,425,660)	937,237)
Profitability Ratio
Net profit margin¹	3.02%	8.61%	9.62%	10.28%	13.75%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income attributable to SolarEdge Technologies, Inc.	82,725)	157,532)	136,888)	140,512)	121,740)
Revenues	3,110,279)	1,963,865)	1,459,271)	1,425,660)	937,237)
Profitability Ratio
Adjusted net profit margin²	2.66%	8.02%	9.38%	9.86%	12.99%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

¹ Net profit margin = 100 × Net income attributable to SolarEdge Technologies, Inc. ÷ Revenues
= 100 × 93,779 ÷ 3,110,279 = 3.02%

² Adjusted net profit margin = 100 × Adjusted net income attributable to SolarEdge Technologies, Inc. ÷ Revenues
= 100 × 82,725 ÷ 3,110,279 = 2.66%

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Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	SolarEdge Technologies Inc. adjusted net profit margin ratio deteriorated from 2020 to 2021 and from 2021 to 2022.

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Revenues	3,110,279)	1,963,865)	1,459,271)	1,425,660)	937,237)
Total assets	4,265,949)	2,892,060)	2,437,109)	1,494,624)	964,472)
Activity Ratio
Total asset turnover¹	0.73	0.68	0.60	0.95	0.97
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Revenues	3,110,279)	1,963,865)	1,459,271)	1,425,660)	937,237)
Adjusted total assets	4,221,796)	2,864,488)	2,425,433)	1,478,326)	949,773)
Activity Ratio
Adjusted total asset turnover²	0.74	0.69	0.60	0.96	0.99

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

¹ Total asset turnover = Revenues ÷ Total assets
= 3,110,279 ÷ 4,265,949 = 0.73

² Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= 3,110,279 ÷ 4,221,796 = 0.74

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	SolarEdge Technologies Inc. adjusted total asset turnover ratio improved from 2020 to 2021 and from 2021 to 2022.

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Total assets	4,265,949)	2,892,060)	2,437,109)	1,494,624)	964,472)
Total SolarEdge Technologies, Inc. stockholders’ equity	2,176,366)	1,310,039)	1,085,757)	811,670)	562,408)
Solvency Ratio
Financial leverage¹	1.96	2.21	2.24	1.84	1.71
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted total assets	4,221,796)	2,864,488)	2,425,433)	1,478,326)	949,773)
Adjusted total SolarEdge Technologies, Inc. stockholders’ equity	2,132,213)	1,282,623)	1,082,674)	799,833)	549,208)
Solvency Ratio
Adjusted financial leverage²	1.98	2.23	2.24	1.85	1.73

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

¹ Financial leverage = Total assets ÷ Total SolarEdge Technologies, Inc. stockholders’ equity
= 4,265,949 ÷ 2,176,366 = 1.96

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total SolarEdge Technologies, Inc. stockholders’ equity
= 4,221,796 ÷ 2,132,213 = 1.98

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Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	SolarEdge Technologies Inc. adjusted financial leverage ratio decreased from 2020 to 2021 and from 2021 to 2022.

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net income attributable to SolarEdge Technologies, Inc.	93,779)	169,170)	140,322)	146,549)	128,833)
Total SolarEdge Technologies, Inc. stockholders’ equity	2,176,366)	1,310,039)	1,085,757)	811,670)	562,408)
Profitability Ratio
ROE¹	4.31%	12.91%	12.92%	18.06%	22.91%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income attributable to SolarEdge Technologies, Inc.	82,725)	157,532)	136,888)	140,512)	121,740)
Adjusted total SolarEdge Technologies, Inc. stockholders’ equity	2,132,213)	1,282,623)	1,082,674)	799,833)	549,208)
Profitability Ratio
Adjusted ROE²	3.88%	12.28%	12.64%	17.57%	22.17%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

¹ ROE = 100 × Net income attributable to SolarEdge Technologies, Inc. ÷ Total SolarEdge Technologies, Inc. stockholders’ equity
= 100 × 93,779 ÷ 2,176,366 = 4.31%

² Adjusted ROE = 100 × Adjusted net income attributable to SolarEdge Technologies, Inc. ÷ Adjusted total SolarEdge Technologies, Inc. stockholders’ equity
= 100 × 82,725 ÷ 2,132,213 = 3.88%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	SolarEdge Technologies Inc. adjusted ROE deteriorated from 2020 to 2021 and from 2021 to 2022.

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net income attributable to SolarEdge Technologies, Inc.	93,779)	169,170)	140,322)	146,549)	128,833)
Total assets	4,265,949)	2,892,060)	2,437,109)	1,494,624)	964,472)
Profitability Ratio
ROA¹	2.20%	5.85%	5.76%	9.81%	13.36%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income attributable to SolarEdge Technologies, Inc.	82,725)	157,532)	136,888)	140,512)	121,740)
Adjusted total assets	4,221,796)	2,864,488)	2,425,433)	1,478,326)	949,773)
Profitability Ratio
Adjusted ROA²	1.96%	5.50%	5.64%	9.50%	12.82%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

¹ ROA = 100 × Net income attributable to SolarEdge Technologies, Inc. ÷ Total assets
= 100 × 93,779 ÷ 4,265,949 = 2.20%

² Adjusted ROA = 100 × Adjusted net income attributable to SolarEdge Technologies, Inc. ÷ Adjusted total assets
= 100 × 82,725 ÷ 4,221,796 = 1.96%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	SolarEdge Technologies Inc. adjusted ROA deteriorated from 2020 to 2021 and from 2021 to 2022.

SolarEdge Technologies Inc. (NASDAQ:SEDG)

Analysis of Income Taxes

Income Tax Expense (Benefit)

Effective Income Tax Rate (EITR)

Components of Deferred Tax Assets and Liabilities

Deferred Tax Assets and Liabilities, Classification

Adjustments to Financial Statements: Removal of Deferred Taxes

SolarEdge Technologies Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

SolarEdge Technologies Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)