Return to $450–$500 Million Revenue Run Rate
Q: When will you return to $450–$500 million of normalized revenue?
A: We are very optimistic about returning to the $450 million run rate. Our sell-in revenue in Q2 was $303.5 million, and the midpoint of our Q3 guidance is $390 million, showing strong growth. Our battery business is healthy, growing from 75.5 MWh in Q1 to 120 MWh in Q2, with guidance of 160 to 180 MWh in Q3. Customer demand increased by 5% compared to Q1, and our Q3 bookings are over 85%, the healthiest they've been in a year. We have normalized our channel inventory, and we're optimistic about growth in Q4. "

Gross Margin Outlook and IRA Benefits
Q: How will the IRA benefits impact your gross margins and pricing strategy?
A: We expect our non-GAAP gross margins without IRA to continuously improve. In batteries, cell pack prices are declining, and we're making our microinverters for batteries in the U.S. We're transitioning from third to fourth-generation architecture, enhancing serviceability. Most of the IRA benefits come from microinverters; we're only now starting to ramp batteries. We're working on domestic content, setting up factories to manufacture enclosures in the U.S. The incentives, around $0.40 per watt or 10% of project cost, could ultimately benefit the end consumer. We'll be looking to charge for value, but it's too early to quantify the exact benefits. "

Battery Shipments Growth Into Q4
Q: Will battery shipments continue to grow sequentially into Q4?
A: While it's early to guide for Q4, we do expect battery shipment growth to continue. Our worldwide shipments increased from 75.5 MWh in Q1 to 120 MWh in Q2, and we're guiding 160 to 180 MWh in Q3. "

Competitive Landscape and Market Share
Q: What's the competitive landscape, and are you gaining market share?
A: We have a strong value proposition compared to centralized big-box solutions, offering better performance, reliability, and safety with our 25-year warranty and no high-voltage DC. In California, battery attach rates for NEM 3.0 are over 90%, and half of our NEM 3.0 solar installations are attaching Enphase batteries. Our grid-tied batteries are easy to install, and we're introducing a new 10 kWh battery. We believe decentralization and distributed architecture win in the long run for cost, performance, and reliability. "

Domestic Content Incentives and Impact on Q4
Q: How will domestic content incentives affect demand in Q4?
A: Domestic content is a conversation we're actively having, and we expect it to benefit us in Q4. While little to none of our Q3 numbers include domestic content, we're working on increasing our domestic content by manufacturing enclosures in the U.S. This positions us well with lease PPA and commercial asset owners, potentially driving demand. "

European Market and Underpenetrated Regions
Q: How are you addressing underpenetrated markets in Europe?
A: We're optimistic about growth in Europe, especially in Q4. Despite seasonality in Q3, we're underpenetrated in many countries like the U.K., Italy, Spain, Belgium, Switzerland, and others. We're introducing our entire product portfolio—including microinverters, batteries, EV chargers, energy management software, and Solargraf—to these markets. Customers want safety, savings, and an all-in-one experience, and we're working to meet those needs. "

Cash Management and Debt Repayment Plans
Q: How do you plan to manage your balance sheet and upcoming debt maturities?
A: Our first priority is to invest in business needs. We're also looking at potential M&A opportunities. If we find fewer opportunities, we'll consider repurchasing shares. We have about $102 million due in March next year, which we can easily pay off with cash. The $632 million convertible due in 20 months gives us optionality to pay off or partially refinance later, depending on the rate environment. "

Impact of NEM 3.0 on Battery Attach Rates
Q: How is NEM 3.0 affecting battery attach rates in California?
A: Battery attach rates for NEM 3.0 in California are over 90%, with 60% of our installations now being NEM 3.0. Grid-tied batteries improve bill offset significantly under NEM 3.0. We expect the full conversion to NEM 3.0 over the next 2–3 quarters to drive significant growth in our battery business. Our California sell-through revenue was up 7% from Q1 to Q2, with battery revenue up 14%. "