US based solar microinverter and battery supplier Enphase Energy, Inc has reported a strong Q4/2022 with a 'record' quarterly revenue of $724.7 million reflecting an annual improvement of more than 75%, contributing to its annual revenues for 2022 growing more than 68% to $2.3 billion.
Management attributes 14% sequential growth in Q4/2022 revenues to strong demand for its Enphase Energy Systems. Sales in the US grew close to 15% and in Europe by around 21% since previous quarter. It sold nearly 1.95 GW DC capacity in the form of 4,873,702 microinverters along with 122.1 MWh Enphase IQ batteries. Close to 55% of all its microinverter shipments comprised IQ8 microinverters.
GAAP net income for the company grew significantly to $153.7 million, up from $52.6 million a year back.
As for 2022, its GAAP gross margin was reported as 41.8% and operating income rose over 100% to $448.26 million, while net income grew to $397 million compared to $145.45 million.
Enphase' manufacturing plans for the US remain on track with domestic manufacturing to begin in Q2/2023 with a new contract manufacturing partner and in H2/2023 with 2 existing contract partners (see Enphase Energy To Open Manufacturing Lines In US).
President and CEO Badri Kothandaraman shared that at the end of Q4/2022, quarterly production capacity of microinverters at Enphase was 5 million which it expects to grow to 6 million with Flex Romania starting manufacturing by the end of Q1/2023. By the end of 2023, it targets to open 6 manufacturing lines with 4.5 million microinverters, taking its quarterly capacity to over 10 million.
Guidance
Enphase has shared the guidance for Q1/2023 expecting between $700 million and $740 million revenues comprising shipments of 100 MWh to 120 MWh of IQ batteries. It has guided for GAAP gross margin to stay within a range of 40.0% to 43.0% and GAAP operating expenses between $177.0 million to $181.0 million.
Philip Shen of Roth Capital Partners calls this Q1 guide as 'likely backward-looking as far as Q2/2022' since it sees US residential solar as deteriorating even as Enphase can still be expected to gain in this market in the near term. "Moreover, a lack of product obsolescence allows distributors to carry inventory for longer and with less fear in contrast to modules which can have wattage change within six months," he added.
During the call with analysts, Kothandaraman said the company is fully booked for Q1/2023 with strong demand from Europe. He admitted to the US business to be 'slightly down' citing seasonality and macroeconomic environment.
He explained, "We are seeing that our distributor and installer partners are a little more cautious in booking orders. We normally have a six-month order visibility, and that has been somewhat reduced as our partners watch their spending closely.