• Revenue: $382.7 million for Q4 2024.
• Gross Margin (Non-GAAP): 53.2% for Q4 2024.
• Gross Margin (GAAP): 51.8% for Q4 2024.
• Operating Expenses (Non-GAAP): $83.3 million for Q4 2024.
• Operating Expenses (GAAP): $143.5 million for Q4 2024.
• Net Income (Non-GAAP): $125.9 million for Q4 2024.
• Net Income (GAAP): $62.2 million for Q4 2024.
• Diluted Earnings Per Share (Non-GAAP): $0.94 for Q4 2024.
• Diluted Earnings Per Share (GAAP): $0.45 for Q4 2024.
• Free Cash Flow: $159.2 million for Q4 2024.
• Cash and Marketable Securities: $1.72 billion at the end of Q4 2024.
• Microinverters Shipped: Approximately 878 megawatts DC in Q4 2024.
• IQ Batteries Shipped: 152.4 megawatt hours in Q4 2024.
• Share Repurchase: 2,883,438 shares repurchased in Q4 2024 at an average price of $69.25 per share.

• Warning! GuruFocus has detected 6 Warning Signs with ENPH.

Release Date: February 04, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Enphase Energy Inc (NASDAQ:ENPH) reported strong financial performance with a quarterly revenue of $382.7 million and a gross margin of 53% on a non-GAAP basis.
• The company shipped approximately 2 million microinverters and 152 megawatt hours of batteries, generating a free cash flow of $159 million.
• Enphase Energy Inc (NASDAQ:ENPH) maintained a high Net Promoter Score of 78% for customer service, with reduced average call wait times.
• The company is expanding its product offerings with new introductions such as the IQ Battery 5Ps, IQ EV chargers, and the IQ9 microinverters, which are expected to drive future growth.
• Enphase Energy Inc (NASDAQ:ENPH) is focusing on geographic expansion, with plans to introduce its full suite of products across more European countries and other regions like India and Southeast Asia.

Negative Points

• Enphase Energy Inc (NASDAQ:ENPH) experienced a 25% decline in revenue in Europe for Q4 compared to Q3, indicating challenges in the region.
• Battery sales in the US were down 8% in Q4 compared to Q3 due to lesser channel restocking.
• The company faces uncertainties around government policies and regulatory changes, which could impact future operations.
• There is a noted difficulty for installers in the market, with cash flow issues and a shift from loan to lease models.
• Enphase Energy Inc (NASDAQ:ENPH) is dealing with a challenging business environment in Europe, with weak demand in markets like the Netherlands and France.

Q & A Highlights

Q: Can you explain the impact of the $95 million Safe Harbor revenue on your Q1 guidance and any potential for additional Safe Harbor deals this year? A: The $95 million Safe Harbor revenue would have been recognized over eight quarters, approximately $12 million per quarter. For Q1, this adds to the baseline, making it $322 million when added to the $310 million baseline. This aligns with typical seasonality. We are in discussions with customers about potential future Safe Harbor deals, but nothing is confirmed yet.

Q: What is the outlook for battery storage growth, and how does the introduction of the new 10C battery affect this? A: We expect sequential growth in battery storage throughout 2025. The third-generation battery is gaining traction, and the new FlexPhase variant for Europe supports both 3-phase and single-phase configurations. In the US, the fourth-generation battery, with a smaller footprint and integrated architecture, is expected to drive growth. We anticipate strong traction from installers and continuous business growth.

Q: Can you provide details on the Safe Harbor revenue split between microinverters and batteries, and any customer specifics? A: The Safe Harbor revenue is mostly from microinverters. We define Safe Harbor as sales expected to be installed over a year. We do not disclose customer names or specifics, but the $95 million is considered Safe Harbor, translating to $12 million of core revenue per quarter.

Q: How do you view the potential for margin improvement with new product introductions like IQ9 and the fourth-generation battery? A: We expect margin improvements with new products. IQ9, using gallium nitride technology, offers cost reductions and higher power output. The fourth-generation battery integrates power conversion and battery management, reducing costs. We aim for steady gross margin improvement through product advancements and cost efficiencies.

Q: What is the status of the Meter Collar pilot with California utilities, and what are the next steps? A: The Meter Collar has passed UL certification, and we are in discussions with California utilities for additional testing. Each utility has different requirements, and we are working with all three simultaneously. Our experience has been positive, and we are progressing through the necessary steps for approval.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.