• Revenue: $380.9 million for Q3 2024.

• Gross Margin: 48.1% non-GAAP, 46.8% GAAP for Q3.

• Operating Expenses: $81.6 million non-GAAP, $128.4 million GAAP for Q3.

• Net Income: $45.8 million GAAP for Q3.

• Diluted Earnings Per Share: $0.33 GAAP, $0.65 non-GAAP for Q3.

• Free Cash Flow: $161.6 million for Q3.

• Cash and Cash Equivalents: $1.7 billion at the end of Q3.

• Microinverters Shipped: Approximately 1.7 million units in Q3.

• Batteries Shipped: 172.9 megawatt hours in Q3.

• Q4 Revenue Guidance: $360 million to $400 million.

• Q4 Gross Margin Guidance: 47% to 50% GAAP, 49% to 52% non-GAAP.

• Warning! GuruFocus has detected 5 Warning Signs with ENPH.

Release Date: October 22, 2024

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

Positive Points

• Enphase Energy Inc (NASDAQ:ENPH) reported a quarterly revenue of $380.9 million, with a significant shipment of 1.7 million microinverters and 172.9 megawatt hours of batteries.

• The company achieved a 48% gross margin and generated free cash flow of $161.6 million in Q3 2024.

• Enphase Energy Inc (NASDAQ:ENPH) is expanding its product portfolio with the introduction of higher domestic content SKUs for microinverters, which qualify for a 10% domestic content ITC adder.

• The company is actively expanding its market presence, with plans to introduce new products in Europe, including the IQ8 series of microinverters and IQ EV chargers.

• Enphase Energy Inc (NASDAQ:ENPH) is on track to launch its fourth-generation battery in early 2025, which is expected to reduce installation costs by approximately $300 per kilowatt hour.

Negative Points

• The company's Net Promoter Score slightly decreased to 78% in Q3 from 79% in Q2, with increased average call wait times due to higher call volumes.

• Enphase Energy Inc (NASDAQ:ENPH) experienced a 15% decline in revenue from Europe compared to Q2, with a 34% decrease in product sell-through in the region.

• The company faced challenges in the European market due to declining power prices, slow economic growth, and limited consumer confidence.

• A large US customer declared bankruptcy in Q3, impacting Enphase Energy Inc (NASDAQ:ENPH)'s revenue, although the company expects to recover a substantial portion through distribution channels.

• The guidance for Q4 2024 indicates a potential slowdown in Europe and a slight decrease in battery shipments compared to Q3 due to channel restocking.

Q & A Highlights

Q: Can you provide insights into the battery sell-through and shipment expectations for Q4, and how does this compare to Q3? A: Badrinarayanan Kothandaraman, President and CEO, explained that the channel inventory for batteries has been normalized, with shipments and sell-through now at equilibrium. For Q4, they expect battery shipments to be between 140-160 megawatt hours, with a similar US versus international split as their revenue, which is approximately 75% US and 25% international.