Enphase Energy, Inc. Q1 FY2026 earnings call

• Customer service NPS net promoter score was 82% in Q1, average call wait time ~1.4 minutes. Began soft rollout of Enphase AI assistant in homeowner app to ~100,000 homeowners, expect to pilot for installers this quarter.
• In Q1, shipped ~1.39 million microinverters from Texas and South Carolina facilities and booked 45X production tax credits. Shipped 49.5 megawatt hours of IQ batteries from Texas facility.
• U.S. commercial microinverter sales more than doubled in Q1. Europe revenue increased 36% in Q1, seeing green shoots in April with solar and battery activations up double digits. Australia bullish on battery opportunity with federal program.
• Q2 revenue guidance 280 million to $310 million including ~$85 million safe harbor revenue. Battery guidance 100 to 110 megawatt hours. Prepaid lease adoption continues to build momentum with Propel program expanding.
• Products: IQ Batteries 10C has smaller footprint, etc. Fifth generation AC coupled battery to begin pilots in Q3, ship in Q4. IQ Vault commercial battery to begin pilots in Q127. IQ9 three-phase commercial microinverter launched, higher power IQ9S in Q3. IQ bidirectional EV charger in advanced discussion with auto OEMs, target initial availability in Q4. IQ Solid State Transformer for AI data centers in development.

Quarterly revenue was $282.9 million. Shipped 1.41 million microinverters and 103 megawatt hours of batteries. U.S. and international revenue mix in Q1 was 83% and 17% respectively. U.S. revenue declined 23% sequentially due to lower residential solar and battery demand. Europe revenue increased 36% in Q1. Safe harbor revenue increased to $34.5 million in Q1. Non-GAAP gross margin was 44%, operating expenses 27%, operating income 17% as percentage of revenue.

• Q2 revenue guidance 280 million to $310 million including ~$85 million safe harbor revenue. Battery guidance 100 to 110 megawatt hours. Q2 revenue guidance anticipates under shipping and market demand by $25 million to correct for Q1 overshipment.
• Safe harbor revenue for Q2 estimated $85 million, Q3 expected between $40 and $50 million.
• Expect modest underlying sell-through growth in Q2 compared to Q1. Offset pressure in second half through prepaid lease adoption, U.S. commercial growth, and potential international recovery.

Q: Brian Lee with Goldman Sachs asked about safe harbor expectations for 3Q, core revenue trends into 3Q and 4Q, and SST.

A: Safe harbor revenue for Q2 is $85 million, Q3 expected $40 - $50 million. Q1 and Q2 sell-through below prior view due to challenges, but encouraged by Propel and Europe green shoots. SST has detailed development timeline.

Q: Praneesh Satish with Wells Fargo asked about installer landscape changes and CNI revenue.

A: Not to talk about specific customers, expect to get fair share of redistributed demand. Q1 CNI revenue a little more than $5 million, CNI lumpy but expected to grow.

Q: Colin Rush with Oppenheimer asked about geographic distribution of channel inventory and SST customer maturity.

A: Mostly in U.S. Have talked to up to 20 prospective customers, targeting full demonstration system this year, pilots in 2027, volume shipments in 2028.

Q: Philip Shen with Roth Capital Partners asked about Q3 and 4 outlook, SST margins.

A: Various factors like Propel, Europe, IQ battery, small commercial, but early to tell SST margins.

Q: Julian DeMolin-Smith with Jefferies asked about Propel ramping, tax equity.

A: Wish to get to 500 originations a week by end of Q4, piloting in four states, tax equity not commented on now.

Q: Eric Stein with Craig Hallam asked about Propel expanding to other states.

A: Pilot to check entire chain execution, will expand when ready.

Q: Dylan Nassano with Wolf Research asked about durability of Europe bump.

A: Uncertain, but batteries are good, Europe advancing to battery-first market, making necessary pricing and product steps.

Q: Vic Rambagri with Citi asked about 2Q guidance tariff impact, non-China battery cell supply.

A: $50 million refund claim submitted, expected 90 - 120 days. Progress on non-China battery cell supply, but outlook on mix not detailed.