Enphase Energy, Inc. Q4 FY2025 earnings call

• Financials: Q4 revenue $343.3M, shipped 1.55M microinverters and 150MWh batteries, free cash flow $37.8M. Non-GAAP gross margin 46.1%, operating income $79.4M.
• Operations: Shipped ~1.31M microinverters from Texas and SC facilities, booked Section 45X PTC. Piloted AI assistants in Enphase app and for installers.
• Regions: U.S. revenue down 13% Q4 vs Q3 due to safe harbor; Europe revenue down 29% Q4 vs Q3. Australia sees battery growth opportunity.
• Products: IQ9 3P commercial microinverter shipped, IQ EV charger 2 launched. Fifth-gen battery in development, expected Q3 2026 pilot, Q4 2026 shipping.
• Financing: Supported TPOs, announced 2 orders totaling $123M. Prepaid leases piloted in 4 states with 40 installers.

Enphase Energy reported Q4 2025 revenue of $343.3 million. The U.S. and international revenue mix was 89% and 11% respectively. They shipped 1.55 million microinverters and 150-megawatt hours of batteries. Non-GAAP gross margin for Q4 was 46.1%. In the U.S., revenue decreased 13% Q4 vs Q3 due to safe harbor revenue, but overall sell-through of products increased 21% Q4 vs Q3. Europe saw revenue decrease 29% Q4 vs Q3 with challenging business environment.

• Q1 2026 revenue guidance $270M-$300M, ~90% booked to midpoint. Expect Q1 to be low point with improvement in 2026, esp. H2.
• Accelerate IQ battery density, scale IQ9, unlock battery retrofits in Netherlands and France, ramp IQ EV charger 2, launch fifth-gen battery and IQ9 microinverters.

• Tariffs: Reciprocal tariffs impacting gross margins, need to offset via innovation and new products.
• Market Competition: Intense competition in Europe, pricing pressure; need to control costs and align pricing.
• Regulatory Uncertainty: Changing tax credits, tariffs, and regulatory standards could impact financials.

Q: Phil Shen asked about Q2 revenue and margin expansion.

A: Badri Kothandaraman said Q2 revenue expected up, driven by tailwinds like rising utility rates, new financing, easing rates, and Enphase's initiatives like IQ battery ramp, IQ9 rollout, etc.

Q: Brian Lee asked about tariff offset.

A: Badri Kothandaraman said offset via innovation in IQ9, fifth-gen battery, which offer higher margins and better economics despite tariffs.

Q: Colin Rusch asked about battery inventory and channel lean.

A: Badri Kothandaraman said channel is lean, forward-looking weeks on hand normal; no bloated inventory.

Q: Praneeth Satish asked about prepaid leases timeline.

A: Badri Kothandaraman said piloting in 4 states with 40 installers, early positive feedback, expect to expand after pilot validation.

Q: Eric Stine asked about safe harbor orders.

A: Badri Kothandaraman said too early to forecast, expect Q2 frenzy as TPOs finalize plans by July 1 week.