Shares of SolarEdge dropped 13.5% after the earnings release as investors reacted negatively to cautious commentary on near-term growth due to a sluggish U.S. residential market and uncertainty around tax credit policies that have slowed demand and installer activity.

• Revenue grew 46% year-over-year in Q1 2026, marking the fifth consecutive quarter of growth.
• Gross margins expanded alongside revenue growth, with an expectation to approach breakeven operating profit in Q2.
• U.S. residential market weakened at the start of the year amid tax credit policy changes and FEOC-related funding delays, creating strain on installer cash flows and slowing market activity.
• Business momentum is stronger in the U.S. Commercial & Industrial segment, driven by scalable products compliant with domestic content and FEOC requirements, enabling structural market share gains.
• European markets started slow but improved in March and April, led by stronger battery demand, with Q2 Nexis production fully booked by European customers.