US Market Drives Enphase Energy’s Q3 2024 Revenues

US-based solar PV microinverter and battery solutions supplier Enphase Energy improved its GAAP revenues in Q3 2024 to $380.9 million, up by 25.5% sequentially, thanks to the revenue growth of 43% in the US. This increase is attributed to higher shipments to distributors as inventory returned to normal levels.  

However, due to ‘further softening’ in demand in Europe, its revenue in this region dropped by approximately 15% over the same period. On a year-on-year (YoY) basis, its Q3 revenues declined by more than 30%.  

Its operating income of $49.78 million went up significantly from the $1.79 million reported in the previous quarter, and net income of $45.76 million rose from $10.8 million last quarter. However, both these values reflected a YoY decline of more than 57% and 59%, respectively (see Enphase Energy Lowered Channel Inventory While Exiting Q2/2024).  

Shipments 

During Q3 2024, it shipped 1,731,768 or around 730 MW DC microinverters out of which 1,176,000 were shipped from the contract manufacturing facilities in the US. These were booked for 45X production tax credits.  

Enphase President and CEO, Badri Kothandaraman said, “We began shipping IQ8HC™ Microinverters with higher domestic content, produced at our contract manufacturing facilities in the United States. We expect to begin shipping our commercial microinverters, and batteries with higher domestic content, produced at our United States contract manufacturing facilities in the fourth quarter of 2024.” 

It also shipped 172.9 MWh of IQ batteries during the period, up from 120.2 MWh in the previous quarter. It is now shipping the 3rd generation of IQ batteries, the IQ Battery 5P, to various markets. The company has expanded its IQ Battery installer base to more than 9,000, compared to over 7,400 in Q2.  

New products 

Going forward, it plans to launch its 2nd generation IQ EV charger, 3-phase IQ Battery with backup, and IQ Balcony Solar Kit for all of Europe.   

The company plans to unveil its 4th generation energy system IQ Meter Collar, 10 kWh IQ Battery, and enhanced IQ Combiner for the US market in early 2025. This should bring down installation costs, according to Enphase.  

Guidance  

Nonetheless, the management has offered cautious guidance for Q4 expecting its revenues to range between $360 million and $400 million, including shipments of 140 MWh to 160 MWh of IQ Batteries. GAAP gross margin is forecast within 47% to 50% with net IRA benefit.  

The net IRA benefit is expected to be $38 million to $41 million, according to its estimated shipments of 1,300,000 units of US manufacturing microinverters. GAAP operating expenses will range between $135 million and $139 million.     

For 2024, GAAP and non-GAAP annualized effective tax rate with Inflation Reduction Act (IRA) benefit, excluding discrete items, is expected to be within a range of 17% to 19%.   

While the management cited a weaker EU market for the weak Q4 guidance, Philip Shen of ROTH MKM believes the company faces risk from the growing presence of Tesla’s Powerwall 3 that’s likely to take substantial storage/inverter share. Enphase’s new battery/collar/combiner should help meaningfully, he added, but it will take time to ramp.