SolarEdge Technologies Inc (SEDG)

Interest coverage

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	-1,708,292	-1,656,738	-588,194	-277,654	40,205	272,623	373,756	259,410	166,120	212,321	194,328	213,875	207,139	195,697	159,677	134,083	157,730	178,662	214,285	229,673
Interest expense (ttm)	US$ in thousands	0	7,901	15,802	15,802	39,351	31,724	56,682	70,993	52,893	52,619	19,760	6,175	1,450	6,239	6,407	5,934	5,330	5,303	5,147	4,909
Interest coverage		—	-209.69	-37.22	-17.57	1.02	8.59	6.59	3.65	3.14	4.04	9.83	34.64	142.85	31.37	24.92	22.60	29.59	33.69	41.63	46.79

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-1,708,292K ÷ $0K
= —

The interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt. A higher ratio indicates the company is more capable of covering its interest payments.

Analyzing SolarEdge Technologies Inc's interest coverage ratio over the period from March 2020 to December 2024, several trends are evident. The ratio fluctuated significantly during this period, ranging from a high of 142.85 in December 2021 to a low of -209.69 in September 2024.

Initially, the interest coverage ratio was consistently high, indicating the company's strong ability to cover its interest payments. However, starting from June 2022, the ratio began decreasing substantially. This decline continued, leading to negative interest coverage ratios in the latter part of 2024. A negative ratio implies that the company's operating income is not sufficient to cover its interest expenses.

The significant deterioration in SolarEdge Technologies Inc's interest coverage ratio from June 2022 onwards may indicate potential financial distress and raise concerns about the company's ability to meet its debt obligations. It is crucial for stakeholders and investors to closely monitor the company's financial performance and debt management strategies in response to these declining ratios.