Enphase Guides Q4 Revenue To $225 Million-$255 Million As U.S. Solar Demand Stays Soft
The solar microinverter maker's third-quarter sell-through grew about 1% against an expected 10%, and it now guides fourth-quarter sales lower.
Enphase Energy, which makes solar microinverters and home batteries, guided fourth-quarter revenue to $225.0 million to $255.0 million, below the $293.3 million it booked in the third quarter. The company said soft U.S. residential demand left third-quarter sales at the low end of its guidance range.
Sell-through missed by nine points
Third-quarter revenue of $293.3 million compares with $410.4 million a year earlier and $291.9 million in the second quarter. It included $85.0 million of safe harbor revenue, against $84.3 million in the second quarter.
Global sell-through, meaning product sold on to end customers, rose about 1% from the prior quarter. The company had expected 10% growth. U.S. sell-through rose 5% sequentially but fell 35% from a year earlier, which the company said was broadly in line with third-party reports on the U.S. residential market. European sell-through fell 12% sequentially, with France particularly soft.
U.S. revenue rose about 3%, a smaller gain than anticipated, while European revenue fell about 11%. The company said its core U.S. market faces higher interest rates and the expiration of the Section 25D federal tax credit.
Earnings and the fourth-quarter outlook
Profit was $0.17 per share on a standard-accounting basis and $0.41 on an adjusted basis; an impairment in investments cut those figures by $0.15 and $0.14. Standard-accounting net income was $23.4 million, against $36.1 million in the second quarter and $66.6 million a year earlier. Adjusted gross margin was 45.0%, down from 46.8% in the second quarter, which the company attributed to product mix. Tariffs cut about 1.3 percentage points from margin.
The company ended the quarter with $931.8 million in cash, cash equivalents and marketable securities. Operating cash flow was about $0.1 million, and it shipped 129.9 megawatt hours of batteries, up from 113.8 in the second quarter.
For the fourth quarter, Enphase guided battery shipments of 100 to 120 megawatt hours and adjusted gross margin of 40.0% to 43.0%. The outlook includes about $51.2 million of safe harbor revenue and assumes sell-through falls 10% from the third quarter.
A data center bet on solid-state power
Enphase makes microinverters, which convert solar power at each panel, along with batteries, EV chargers and an app for monitoring. It is also developing the IQ SST, a solid-state transformer aimed at AI data centers. The company said it demonstrated 13.8 kV AC to 800 VDC conversion at its Austin, Texas lab, using 132 power modules.
The pipeline of IQ SST customers and partners more than doubled during the quarter to over 50, and it is engaged with a leading hyperscaler and a global AI computing leader. Next up: validating operation at 34.5 kV and demonstrating a megawatt-scale system by the end of 2026.
Customer pilots for the IQ SST are on track for 2027, the company said, with commercial shipments expected to begin in 2028.
Sources
- 8-K Filing — Enphase Energy, Inc. (ENPH) — SEC EDGAR
- Exhibit a2026q3exx991pressrelease.htm — Enphase Energy, Inc. 8-K exhibit — SEC EDGAR
- Enphase Energy Reports Financial Results for the Third — globenewswire.com
