SOLAREDGE TECHNOLOGIES, INC.SEDG

SOLAREDGE TECHNOLOGIES, INC. Leases Disclosure

10-KFiled Feb 25, 20263 min read
NOTE 8:       LEASES
 
The following table summarizes the Company’s lease-related assets and liabilities recorded in the consolidated balance sheets:
 
   
As of December 31,
  
Description
  
Classification on the consolidated Balance Sheet
  
2025
    
2024
  
Assets:
                
Operating lease assets, net of lease incentive obligation
  
Operating lease right-of use assets, net
  
$
48,178
    
$
41,393
  
Finance lease assets
  
Property, plant and equipment, net
    
17,848
      
46,610
  
Total lease assets
      
$
66,026
    
$
88,003
  
Liabilities:
                    
Operating leases short term
  
Accrued expenses and other current liabilities
  
$
15,959
    
$
11,861
  
Finance leases short term
  
Accrued expenses and other current liabilities
    
1,547
      
3,382
  
Operating leases long term
  
Operating lease liabilities
    
36,648
      
30,018
  
Finance leases long term
  
Finance lease liabilities
    
18,558
      
39,159
  
Total lease liabilities
      
$
72,712
    
$
84,420
  
 
The following table presents certain information related to the operating and finance leases:
 
   
Year ended December 31,
  
   
2025
    
2024
  
Finance leases:
            

Amortization of right-of-use-assets

  
$
 3,239    
$
 3,127  

Interest on lease liabilities

  

$

 930    

$

 973  
Weighted average remaining lease term in years
    
12.74
      
14.38
  
Weighted average annual discount rate
    
1.80
%
    
2.30
%
Operating leases:
                
Operating lease costs
  
$
15,310
    
$
17,503
  
Weighted average remaining lease term in years
    
10.43
      
10.67
  
Weighted average annual discount rate
    
6.28
%
    
4.76
%
 
The following table presents supplemental cash flows information related to the lease costs for operating and finance leases:
 
   
Year ended December 31,
  
   
2025
    
2024
  
Cash paid for amounts included in measurement of lease liabilities:
            
Operating cash flows for operating leases
  
$
15,849
    
$
17,685
  
Operating cash flows for finance leases
  
$
323
    
$
350
  
Financing cash flows for finance leases
  
$
3,285
    
$
2,877
  

 

The following table reconciles the undiscounted cash flows for each of the first five years and the total of the remaining years of the operating and finance lease liabilities recorded in the consolidated balance sheets:
 
   
Operating Leases
    
Finance Leases
  
2026
  
$
16,495
    
$
1,557
  
2027
    
6,730
      
1,557
  
2028
    
5,107
      
1,557
  
2029
    
4,009
      
1,588
  
2030
    
3,916
      
1,681
  
Thereafter
    
30,702
      
14,609
  
Total lease payments
  
$
66,959
    
$
22,549
  
Less amount of lease payments representing interest
    
(14,352
)
    
(2,444
)
Present value of future lease payments
  
$
52,607
    
$
20,105
  
Less current lease liabilities
    
(15,959
)
    
(1,547
)
Long-term lease liabilities
  
$
36,648
    
$
18,558
  
 
As of December 31, 2025, a lease previously classified as a finance lease was reclassified as an operating lease following an approximately 40% reduction in the leased asset’s scope.
 
As of December 31, 2025, the Company has a non-cancelable lease commitment for the initial term of the lease of approximately $274,237 for new offices in Israel, which has not yet commenced. The lease is expected to commence during the next twelve months. The initial term of the lease agreement is 15 years commencing on the transfer of possession, and with an option to extend the lease for additional periods of up to 10 years, subject to the conditions of the lease agreement. In November 2025, the Company amended its lease agreement with the developer of its new campus to reduce the leased area. In connection with the amendment, the Company agreed to make a lease modification payment of $28,828, recorded under other long-term assets, which is accounted for as prepaid lease consideration under ASC 842, of which $3,143 had been paid as of December 31, 2025.

Historical Timeline

Fiscal YearFiled
2025Feb 25, 2026Showing above
2023Feb 26, 2024
2021Feb 22, 2022
2020Feb 19, 2021
2019Feb 27, 2020
2017Feb 20, 2018
2016Aug 17, 2016

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

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