Enphase Energy Reports Financial Results for the Third Quarter of 2024

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 third quarter of 2024, which included the summary below from its President and CEO, Badri Kothandaraman.

Enphase Energy reported quarterly revenue of $380.9 million in the third quarter of 2024, along with 48.1% for non-GAAP gross margin. The company shipped 1,731,768 microinverters, or approximately 730.0 megawatts DC, and 172.9 megawatt hours of IQ^® Batteries.

Financial highlights for the third quarter of 2024 are listed below:

• Quarterly revenue of $380.9 million
• GAAP gross margin of 46.8%; non-GAAP gross margin of 48.1% with net IRA benefit
• Non-GAAP gross margin of 38.9%, excluding net IRA benefit of 9.2%
• GAAP operating income of $49.8 million; non-GAAP operating income of $101.4 million
• GAAP net income of $45.8 million; non-GAAP net income of $88.4 million
• GAAP diluted earnings per share of $0.33, non-GAAP diluted earnings per share of $0.65
• Free cash flow of $161.6 million; ending cash, cash equivalents, and marketable securities of $1.77 billion

Enphase Energy’s revenue and earnings for the third quarter of 2024 are provided below, compared with the prior quarter:

Total revenue for the third quarter of 2024 was $380.9 million, compared to $303.5 million in the second quarter of 2024. Enphase Energy’s revenue in the United States for the third quarter of 2024 increased approximately 43% compared to the second quarter of 2024. The increase was due to higher shipments to distributors as inventory returned to normal levels. The company’s revenue in Europe decreased by approximately 15% for the third quarter of 2024, compared to the second quarter of 2024. The decline in revenue was the result of a further softening in European demand.

Enphase Energy’s non-GAAP gross margin was 48.1% in the third quarter of 2024, compared to 47.1% in the second quarter of 2024. Its non-GAAP gross margin, excluding net IRA benefit, was 38.9% in the third quarter of 2024, compared to 41.0% in the second quarter of 2024.

Enphase Energy’s non-GAAP operating expenses were $81.6 million in the third quarter of 2024, compared to $81.7 million in the second quarter of 2024. Its non-GAAP operating income was $101.4 million in the third quarter of 2024, compared to $61.1 million in the second quarter of 2024.

Enphase Energy exited the third quarter of 2024 with $1.77 billion in cash, cash equivalents, and marketable securities and generated $170.1 million in cash flow from operations in the third quarter of 2024. Its capital expenditures were $8.5 million in the third quarter of 2024, compared to $9.6 million in the second quarter of 2024.

In the third quarter of 2024, Enphase Energy repurchased 434,947 shares of its common stock at an average price of $114.48 per share for a total of approximately $49.8 million. The company also spent approximately $6.3 million by withholding shares to cover taxes for employee stock vesting reducing the diluted shares by 59,607 shares.

Enphase Energy shipped 172.9 megawatt hours of IQ Batteries in the third quarter of 2024, compared to 120.2 megawatt hours in the second quarter of 2024. The company is now shipping its third generation of IQ Batteries, the IQ^® Battery 5P™, to the United States, Puerto Rico, Mexico, Canada, Australia, the United Kingdom, Italy, France, the Netherlands, Luxembourg, and Belgium. More than 9,000 installers worldwide are certified to install Enphase Energy’s IQ Batteries, compared to more than 7,400 installers worldwide in the second quarter of 2024.

During the third quarter of 2024, Enphase Energy shipped approximately 1,176,000 microinverters from its contract manufacturing facilities in the United States that were booked for 45X production tax credits. Enphase Energy began shipping IQ8HC™ Microinverters with higher domestic content, produced at its contract manufacturing facilities in the United States. The company expect to begin shipping its commercial microinverters, and batteries with higher domestic content, produced at the United States contract manufacturing facilities in the fourth quarter of 2024.

During the third quarter of 2024, Enphase Energy launched AI-based software that is designed to optimize energy use by integrating solar and consumption forecasting with electricity tariffs. This is intended to help consumers maximize savings as energy markets become increasingly complex, such as with dynamic electricity rates in parts of Europe and NEM 3.0 in California. The company is gearing up to launch its second-generation IQ^® EV charger, the 3-Phase IQ Battery with backup, and the IQ^® Balcony Solar Kit all for the European market – pushing the boundaries of innovation. Finally, the fourth-generation energy system, featuring the IQ^® Meter Collar, 10 kWh IQ Battery, and enhanced IQ^® Combiner, is expected to debut in the United States in early 2025, targeting a substantial reduction in installation costs.

Business Highlights

• On Oct. 16, 2024, Enphase Energy announced that it started shipping IQ8™ Microinverters to support newer, high-powered solar panels in select countries and territories, including the Netherlands, Austria, New Caledonia, and Malta.
• On Oct. 9, 2024, Enphase Energy announced that it is expanding its support for grid services programs – or virtual power plants (VPPs) – in New Hampshire, North Carolina, and California, powered by the new IQ Battery 5P.
• On Oct. 3, 2024, Enphase Energy announced the launch of its IQ8X™ Microinverters in Australia, and that all IQ8 Microinverters activated starting Oct. 1, 2024 in Australia come with an industry-leading 25-year limited warranty, currently the longest standard residential warranty in the Australian market.
• On Sept. 24, 2024, Enphase Energy announced the launch of its most powerful Enphase^® Energy System™ to-date, featuring the new IQ Battery 5P and IQ8 Microinverters, for customers in India.
• On Sept. 16, 2024, Enphase Energy announced that it started shipping the IQ Battery 5P in Belgium. Enphase also introduced IQ^® Energy Management, its new AI-based energy management software to enable support for dynamic electricity rates and the integration of third-party EV chargers and heat pumps in Belgium.
• On Sept. 10, 2024, Enphase Energy announced initial shipments of IQ8HC Microinverters supplied from contract manufacturing facilities in the United States with higher domestic content than previous models. The microinverters have SKUs with a “DOM” suffix, indicating the increased amount of domestic content.
• On Sept. 4, 2024, Enphase Energy announced a solution for expanding legacy net energy metering (NEM) solar energy systems in California without penalty using new Enphase Energy Systems configurations with IQ^® Microinverters, IQ Batteries, and Enphase Power Control.
• On Aug. 27, 2024, Enphase Energy announced the availability of pre-orders for IQ Battery 5Ps produced in the United States. Pre-orders are also available for IQ8HC Microinverters, IQ8P-3P™ Microinverters, and IQ8X Microinverters produced in the United States with higher domestic content.
• On Aug. 19, 2024, Enphase Energy announced that it started shipping the IQ Battery 5P in the Netherlands. Enphase also introduced IQ Energy Management, its new energy management software to enable support for dynamic electricity rates and the integration of third-party EV chargers and heat pumps in the Netherlands.
• On Aug. 8, 2024, Enphase Energy announced the launch of its new North American Charging Standard (NACS) connectors for its entire line of IQ EV Chargers. NACS connectors and charger ports have recently become the industry standard embraced by several major automakers for electric vehicles (EVs).
• On Aug. 5, 2024, Enphase Energy announced that it started shipping IQ8P™ and IQ8HC Microinverters to support newer, high-powered solar panels in select countries throughout the Caribbean.
• On Aug. 1, 2024, Enphase Energy announced that it started shipping IQ8 Microinverters to support newer, high-powered solar modules in select countries throughout Europe, including France, Germany, Spain, Bulgaria, Estonia, Slovakia, and Croatia.

Fourth Quarter 2024 Financial Outlook

For the fourth quarter of 2024, Enphase Energy estimates both GAAP and non-GAAP financial results as follows:

• Revenue to be within a range of $360.0 million to $400.0 million, which includes shipments of 140 to 160 megawatt hours of IQ Batteries
• GAAP gross margin to be within a range of 47.0% to 50.0% with net IRA benefit
• Non-GAAP gross margin to be within a range of 49.0% to 52.0% 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 $38.0 million to $41.0 million based on estimated shipments of 1,300,000 units of U.S. manufactured microinverters
• GAAP operating expenses to be within a range of $135.0 million to $139.0 million
• Non-GAAP operating expenses to be within a range of $81.0 million to $85.0 million, excluding $54.0 million estimated for stock-based compensation expense, acquisition-related expenses and amortization

For 2024, GAAP and non-GAAP annualized effective tax rates with IRA benefits, excluding discrete items, are expected to be within a range of 17.0% to 19.0%.