Enphase’s Q3 2026 revenue declined on a YoY basis, as its global sell-through fell short of guidance
Its customer and partner pipeline for IQ SST expanded to over 50 in the reporting quarter
The company expects lower revenue in Q4 2026 as it faces continued pressure in residential solar markets
Enphase Energy, the US-based provider of microinverters, energy storage systems (ESS), and EV charging solutions, reported $293.3 million in Q3 2026 revenue, down 28.5% year-on-year (YoY).
The reported revenue was slightly higher than the previous quarter’s $291.9 million when the company returned to profitability (see Enphase Energy’s Q2 2026 Revenue Rises As Europe Offsets US Weakness). The increase in revenue was less than anticipated due to softer residential solar demand.
US revenue rose about 3% from the previous quarter, but European revenue fell about 11%, reflecting seasonal factors and continued weakness in some solar markets.
Badri Kothandaraman, Enphase President and CEO, said the company’s US residential solar business continues to face challenges from high interest rates and the expiration of the Section 25D federal tax credit.
The California-based company’s global sell-through rose just 1% sequentially against an expected growth of 10%. US sell-through rose $5 sequentially but fell 35% YoY, while European sell-through fell 12% sequentially due to seasonality and softer demand, particularly in France.
Enphase’s profitability also weakened during the quarter as its net income fell to $23.38 million, down over 35% QoQ and almost 65% YoY. Gross margin fell to 43.3%, down from 60% and 47.8%, respectively.
It shipped approximately 1.42 million IQ microinverters or 655.2 MW DC. It also shipped 129.9 MWh of IQ batteries, up from 113.8 MWh in the previous quarter.
On the technology front, Enphase demonstrated its IQ Solid-State Transformer (IQ SST) for AI data centers (AIDC), converting 13.8 kV AC to 800 V DC at its research and development (R&D) laboratory in Austin, Texas. The system maintained a stable 800 V DC output during rapid load changes simulating the power demands of AI computing racks, according to the company.
Enphase said it plans to validate the technology at 34.5 kV and demonstrate a MW-scale system by the end of 2026. It is targeting customer pilot programs in 2027. Commercial shipments are expected to begin in 2028.
For Q4 2026, Enphase targets revenue in the range of $225 million and $255 million. This includes close to $51.2 million of safe harbor revenue, but assumes sell-through to be down 10% compared with Q3 2026. The revenue guidance includes shipments of 100 MWh to 120 MWh of IQ Batteries. Enphase said it is about 70% booked to the midpoint of its revenue guidance.
GAAP gross margin is guided in the range of 38% to 41%, while operating expenses are expected to range between $119 million and $123 million. Speaking to analysts, Kothandaraman said that management will look at its annual operating plan as it approaches 2027. He added, “And we are not going to be afraid to make all of the necessary changes in order to be profitable.”
The CEO also identified five growth drivers for 2027, namely: the IQ Battery G5, the Propel prepaid lease program, commercial solar products, unidirectional and bidirectional EV chargers, and IQ SST technology for AIDC. The company expects residential battery shipments to rise from 450 MWh in 2026 to approximately 675 MWh in 2027.
