Enphase Energy, Inc., a global energy technology company and the world’s leading supplier of microinverter-based solar and battery systems, announced financial results for the first quarter of 2024, which included the summary below from its President and CEO, Badri Kothandaraman.
Enphase Energy reported quarterly revenue of $263.3 million in the first quarter of 2024, along with 46.2% for non-GAAP gross margin. The company shipped 1,382,195 microinverters, or approximately 603.6 megawatts DC, and 75.5-megawatt hours of IQ® Batteries.
Financial highlights for the first quarter of 2024 are listed below:
- Quarterly revenue of $263.3 million
- GAAP gross margin of 43.9%; non-GAAP gross margin of 46.2% with net IRA benefit
- Non-GAAP gross margin of 41.0%, excluding net IRA benefit of 5.2%
- GAAP operating loss of $29.1 million; non-GAAP operating income of $39.0 million, which excludes $60.8 million of stock-based compensation and $7.3 million for amortization of intangible assets and restructuring
- GAAP net loss of $16.1 million; non-GAAP net income of $48.0 million
- GAAP diluted loss per share of $0.12; non-GAAP diluted earnings per share of $0.35
- Free cash flow of $41.8 million; ending cash, cash equivalents, and marketable securities of $1.63 billion
The revenue and earnings for the first quarter of 2024 are provided below, compared with the prior quarter:
(In thousands, except per share and percentage data)
| GAAP | Non-GAAP | ||||||||||||||||||||||
| Q1 2024 | Q4 2023 | Q1 2023 | Q1 2024 | Q4 2023 | Q1 2023 | ||||||||||||||||||
| Revenue | $ | 263,339 | $ | 302,570 | $ | 726,016 | $ | 263,339 | $ | 302,570 | $ | 726,016 | |||||||||||
| Gross margin | 43.9 | % | 48.5 | % | 45.0 | % | 46.2 | % | 50.3 | % | 45.7 | % | |||||||||||
| Operating expenses | $ | 144,607 | $ | 156,893 | $ | 158,708 | $ | 82,587 | $ | 86,551 | $ | 98,375 | |||||||||||
| Operating income (loss) | $ | (29,099 | ) | $ | (10,231 | ) | $ | 167,663 | $ | 38,994 | $ | 65,587 | $ | 233,562 | |||||||||
| Net income (loss) | $ | (16,097 | ) | $ | 20,919 | $ | 146,873 | $ | 47,956 | $ | 73,474 | $ | 192,319 | ||||||||||
| Basic EPS | $ | (0.12 | ) | $ | 0.15 | $ | 1.07 | $ | 0.35 | $ | 0.54 | $ | 1.41 | ||||||||||
| Diluted EPS | $ | (0.12 | ) | $ | 0.15 | $ | 1.02 | $ | 0.35 | $ | 0.54 | $ | 1.37 | ||||||||||
Total revenue for the first quarter of 2024 was $263.3 million, compared to $302.6 million in the fourth quarter of 2023. The revenue in the United States for the first quarter of 2024 decreased approximately 34%, compared to the fourth quarter of 2023. The revenue in Europe increased approximately 70%, compared to the fourth quarter of 2023. The decline in revenue for the first quarter of 2024 compared to the fourth quarter of 2023 was the result of seasonality and a further softening in U.S. demand, while we continued to reduce shipments to manage channel inventory.
The non-GAAP gross margin was 46.2% in the first quarter of 2024, compared to 50.3% in the fourth quarter of 2023, primarily driven by lower net IRA benefits. The non-GAAP gross margin, excluding net IRA benefit, was 41.0% in the first quarter of 2024, compared to 41.8% in the fourth quarter of 2023, primarily driven by lower volume. The non-GAAP operating expenses were $82.6 million in the first quarter of 2024, compared to $86.6 million in the fourth quarter of 2023. The non-GAAP operating income was $39.0 million in the first quarter of 2024, compared to $65.6 million in the fourth quarter of 2023.
Enphase Energy exited the first quarter of 2024 with $1.63 billion in cash, cash equivalents, and marketable securities and generated $49.2 million in cash flow from operations in the first quarter of 2024. The capital expenditures were $7.4 million in the first quarter of 2024, compared to $20.1 million in the fourth quarter of 2023. Capital expenditure requirements decreased due to a reduction in U.S. manufacturing spending.
In the first quarter of 2024, Enphase Energy repurchased 332,735 shares of its common stock at an average price of $126.21 per share for a total of approximately $42.0 million. The company also spent approximately $60.0 million by withholding shares to cover taxes for employee stock vesting and options in the first quarter of 2024, which reduced the diluted shares by 480,735 shares.
Enphase Energy is now shipping IQ8P™ Microinverters with a peak output AC power of 480 W for the small-commercial market in North America, and grid-tied residential applications in South Africa, Mexico, Brazil, India, Thailand, the Philippines, France, and Spain. Enphase Energy currently ship IQ8™ Microinverters to 24 countries worldwide.
Enphase Energy shipped 75.5 megawatt hours of IQ Batteries in the first quarter of 2024. The company now ship our third generation of IQ Batteries, the IQ® Battery 5P™, to the United States, Puerto Rico, Australia, the United Kingdom, and Italy. More than 4,900 installers worldwide are certified to install our IQ Batteries.
During the first quarter of 2024, we shipped approximately 506,000 microinverters from our contract manufacturing facilities in the United States that qualified for 45X production tax credits. Once fully ramped, we expect to have a global capacity of approximately 7.25 million microinverter units per quarter, of which 5 million units of capacity will be in the United States.
Business Highlights
On April 22, 2024, Enphase Energy announced a new strategic relationship with Octopus Energy Group, a global energy and tech company, focused on deploying Enphase IQ8 Microinverters and IQ Battery 5P in the United Kingdom.
On April 18, 2024, Enphase Energy announced the launch of the IQ® Combiner Lite in the Netherlands to simplify installation and commissioning of small-scale solar installations on homes categorized as “social housing,” where rent is capped by the Dutch government to increase accessibility for people with low incomes.
On April 11, 2024, Enphase Energy announced the launch of Enphase Power Control software that can integrate with the Enphase® Energy System™ in North America, enabling Enphase Power Control to dynamically control the power produced by an Enphase Energy System.
On April 2, 2024, Enphase Energy announced that it started shipping IQ8P Microinverters, with a peak output AC power of 480 W, in France and Spain to support newer, high-powered solar modules.
On March 28, 2024, Enphase Energy announced that it started shipping IQ8P Microinverters, with a peak output AC power of 480 W, in Thailand and the Philippines to support newer, high-powered solar modules.
On March 7, 2024, Enphase Energy announced an expanded strategic relationship with Semper Solaris focused on deploying Enphase’s IQ8 Microinverters and the IQ Battery 5P.
On Feb. 26, 2024, Enphase Energy announced that it started shipping the IQ Battery 5P and IQ8 Microinverters, to customers in Italy.
On Feb. 20, 2024, Enphase Energy announced key improvements and new features for Solargraf®, its cloud-based design, proposal, and permitting software platform which is used by solar installers to create system proposals and design documents for residential and commercial customers.
On Feb. 14, 2024, Enphase Energy applauded the Dutch Senate’s decision on Feb. 13, 2024, to provide certainty for the solar energy market in the Netherlands by rejecting a bill that would have phased out net energy metering (NEM).
Second Quarter 2024 Financial Outlook
For the second quarter of 2024, Enphase Energy estimates both GAAP and non-GAAP financial results as follows:
- Revenue to be within a range of $290.0 million to $330.0 million, which includes shipments of 100 to 120 megawatt hours of IQ Batteries
- GAAP gross margin to be within a range of 42.0% to 45.0% with net IRA benefit
- Non-GAAP gross margin to be within a range of 44.0% to 47.0% with net IRA benefit and 39.0% to 42.0% excluding net IRA benefit. Non-GAAP gross margin excludes stock-based compensation expense and acquisition-related amortization
- Net IRA benefit to be within a range of $14.0 million to $17.0 million based on estimated shipments of 500,000 units of U.S. manufactured microinverters
- GAAP operating expenses to be within a range of $134.0 million to $138.0 million
- Non-GAAP operating expenses to be within a range of $78.0 million to $82.0 million, excluding $56.0 million estimated for stock-based compensation expense and acquisition-related amortization, and restructuring and asset impairment charges
For 2024, GAAP and non-GAAP annualized effective tax rate with IRA benefit, excluding discrete items, is expected to be within a range of 17.0% to 19.0%.
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