b46db072814bc517300d6878f51e4af0aebfd1df92d2fb615d90c0f6bf76a02a

Adjustments for Non-Cash Items (USD, thousands)

Stock-Based Compensation (USD, thousands)

Changes in Working Capital (USD, thousands)

Capital Expenditures (CapEx) (USD, thousands)

Proceeds from / Repayments of Debt (USD, thousands)

Share Repurchases (USD, thousands)

Dividend Payments (USD, thousands)

Net Change in Cash (USD, thousands)

672ec2a13132b6c7f55653496e1c81b98390b725353054d5fc25cc9c07b413eb

Enphase Energy, Inc. is a global energy technology company that offers smart, easy-to-use solutions for managing solar generation, storage, and communication on a single platform **[0001463101-24-000024_enph-20231231.htm:108]**. The company sells microinverter units, IQ Gateway and IQ Energy Router, cloud-based monitoring services, storage solutions, EV charging solutions, and various design and support services **[0001463101-24-000024_enph-20231231.htm:108]** **[0001463101-24-000024_enph-20231231.htm:89]**. Enphase Energy generates revenue by selling these solutions to distributors, large installers, OEMs, and strategic partners, with revenue recognized when control of goods or services is transferred to customers **[0001463101-24-000024_enph-20231231.htm:108]** **[0001463101-24-000024_enph-20231231.htm:89]**.

1. **Microinverter Units and Related Accessories** - Provides advanced microinverter technology for converting solar energy into usable electricity, along with necessary accessories for installation and operation.
2. **IQ Gateway and IQ Energy Router** - Offers devices that facilitate communication and energy management between solar systems and the grid.
3. **Storage Solutions** - Delivers energy storage systems that allow users to store solar energy for later use, enhancing energy independence and reliability.
4. **Cloud-Based Enlighten Monitoring Services** - Supplies a cloud-based platform for monitoring and managing solar energy systems, providing insights and analytics over time.
5. **Electric Vehicle (EV) Charging Solutions** - Develops solutions for charging electric vehicles, integrating with solar and storage systems for efficient energy use.
6. **Design, Proposal, Permitting, and Lead Generation Services** - Offers comprehensive services to support the design, proposal, and permitting processes for solar installations, as well as generating leads for service providers.
7. **Platform for Cleantech Asset Owners** - Connects cleantech asset owners with a local and on-demand workforce of service providers, facilitating maintenance and operational tasks.

27a21bcdeba814bed9622f2504666e838ccff889359a0dc9a76d9441fd041af7

| Metric / Quarter                                      | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|-------------------------------------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| **IQ8 Microinverters Peak Output Power (W AC)**       | N/A     | **384**  **[0001463101-23-000085_enph-20230331.htm:36]** **[0001463101-23-000083_a2023q1exx991pressrelease.htm:1]**  | **384**  **[0001463101-23-000140_enph-20230630.htm:40]** **[0001463101-23-000138_a2023q2exx991pressrelease.htm:1]** **[0001463101-23-000138_a2023q2exx991pressrelease.htm:0]**  | **384**  **[0001463101-23-000165_enph-20230930.htm:39]** **[0001463101-23-000163_a2023q3exx991pressrelease.htm:3]**  | **384**  **[0001463101-24-000013_a2023q4exx991pressrelease.htm:1]** **[0001463101-24-000024_enph-20231231.htm:9]**  | **480**  **[0001463101-24-000071_enph-20240331.htm:28]** **[0001463101-24-000070_a2024q1exx991pressrelease.htm:1]**  | **480**  **[0001463101-24-000119_enph-20240630.htm:33]**  | **480**  **[0001463101-24-000141_enph-20240930.htm:33]**  |
| **IQ8 Microinverters Continuous DC Current (A)**      | N/A     | **14**  **[0001463101-23-000083_a2023q1exx991pressrelease.htm:1]**  | **14**  **[0001463101-23-000140_enph-20230630.htm:40]**  | **14**  **[0001463101-23-000165_enph-20230930.htm:39]**  | **14**  **[0001463101-24-000024_enph-20231231.htm:9]**  | **14**  **[0001463101-24-000071_enph-20240331.htm:28]**  | **14**  **[0001463101-24-000119_enph-20240630.htm:33]**  | **14**  **[0001463101-24-000141_enph-20240930.htm:33]**  |
| **Number of Microinverters Shipped**                  | **4,873,702**  **[0001463101-23-000015_a2022q4exx991pressrelease.htm:0]**  | N/A     | **5,198,441**  **[0001463101-23-000138_a2023q2exx991pressrelease.htm:0]**  | **3,905,239**  **[0001463101-23-000163_a2023q3exx991pressrelease.htm:0]**  | **1,595,677**  **[0001463101-24-000013_a2023q4exx991pressrelease.htm:0]**  | **1,382,195**  **[0001463101-24-000070_a2024q1exx991pressrelease.htm:0]**  | N/A     | **1,731,768**  **[0001463101-24-000140_a2024q3exx991pressrelease.htm:0]**  |
| **IQ Battery Storage Usable Capacity (kWh) - 10.1**   | **10.1**  **[0001463101-23-000025_enph-20221231.htm:10]**  | **10.1**  **[0001463101-23-000085_enph-20230331.htm:37]**  | **10.1**  **[0001463101-23-000140_enph-20230630.htm:41]**  | **10.1**  **[0001463101-23-000165_enph-20230930.htm:40]**  | **10.1**  **[0001463101-24-000024_enph-20231231.htm:9]**  | **10.1**  **[0001463101-24-000071_enph-20240331.htm:28]**  | **10.1**  **[0001463101-24-000119_enph-20240630.htm:33]**  | **10.1**  **[0001463101-24-000141_enph-20240930.htm:33]**  |
| **IQ Battery Storage Usable Capacity (kWh) - 3.4**    | **3.4**  **[0001463101-23-000025_enph-20221231.htm:10]**  | **3.4**  **[0001463101-23-000085_enph-20230331.htm:37]**  | **3.4**  **[0001463101-23-000140_enph-20230630.htm:41]**  | **3.4**  **[0001463101-23-000165_enph-20230930.htm:40]**  | **3.4**  **[0001463101-24-000024_enph-20231231.htm:9]**  | **3.4**  **[0001463101-24-000071_enph-20240331.htm:28]**  | **3.4**  **[0001463101-24-000119_enph-20240630.htm:33]**  | **3.4**  **[0001463101-24-000141_enph-20240930.htm:33]**  |

dcc1811c133abd729d8be2b0ef82978abe1bd56eed642dad92c84c183e916c5f

| Metric (USD) | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|--------------|---------|---------|---------|---------|---------|---------|---------|---------|
| U.S. Revenue (thousands) | N/A | **$472,961**  **[0001463101-23-000085_enph-20230331.htm:5]**  | **$417,600**  **[0001463101-23-000140_enph-20230630.htm:6]**  | **$350,400**  **[0001463101-23-000165_enph-20230930.htm:6]**  | **$1,469,108**  **[0001463101-24-000024_enph-20231231.htm:160]**  | **$149,974**  **[0001463101-24-000071_enph-20240331.htm:6]**  | **$198,712**  **[0001463101-24-000119_enph-20240630.htm:6]**  | **$284,000**  **[0001463101-24-000141_enph-20240930.htm:6]**  |
| International Revenue (thousands) | N/A | **$253,055**  **[0001463101-23-000085_enph-20230331.htm:5]**  | **$293,500**  **[0001463101-23-000140_enph-20230630.htm:6]**  | **$200,600**  **[0001463101-23-000165_enph-20230930.htm:6]**  | **$821,678**  **[0001463101-24-000024_enph-20231231.htm:160]**  | **$113,365**  **[0001463101-24-000071_enph-20240331.htm:6]**  | **$104,746**  **[0001463101-24-000119_enph-20240630.htm:6]**  | **$96,800**  **[0001463101-24-000141_enph-20240930.htm:6]**  |
| Total Revenue (thousands) | N/A | **$726,016**  **[0001463101-23-000085_enph-20230331.htm:5]**  | **$711,100**  **[0001463101-23-000140_enph-20230630.htm:6]**  | **$551,100**  **[0001463101-23-000165_enph-20230930.htm:6]**  | **$2,290,786**  **[0001463101-24-000024_enph-20231231.htm:160]**  | **$263,339**  **[0001463101-24-000071_enph-20240331.htm:6]**  | **$303,458**  **[0001463101-24-000119_enph-20240630.htm:6]**  | **$380,900**  **[0001463101-24-000141_enph-20240930.htm:6]**  |

8b6ecef11bc50313115556d19555ce86a45b17b03d3e4d758c8189a3616ec688

1. As you mentioned, revenues in Europe were down significantly this quarter, with a 34% decrease in sell-through compared to Q2  **[ENPH_3403209_2]** . Given the challenging business environment and declining power prices, what specific strategies are you implementing to reverse this trend and when do you expect to see improvement in this region?
2. With the anticipated launch of the IQ9 microinverters delayed to the second half of 2025  **[ENPH_3403209_26]** , how are you addressing the risk of losing market share to competitors in the interim, especially considering the demand for higher power solutions in both residential and commercial markets?
3. You've indicated that the bankruptcy of a large U.S. customer will impact your Q4 revenue  **[ENPH_3403209_4]** . Can you elaborate on the extent of your exposure to this customer and what measures you're taking to mitigate risks associated with customer concentration moving forward?
4. In previous years, Enphase focused on cost reduction and passing savings to customers, but recently there seems to be less emphasis on cost-cutting in microinverters  **[ENPH_3403209_25]** . With the upcoming IQ9 potentially reducing costs, how do you plan to balance cost savings and pricing strategy to regain competitive advantage, and why hasn't there been more progress in cost reduction recently?
5. Given concerns about potential changes to the 30% residential tax credit under the IRA and its importance to the U.S. market  **[ENPH_3403209_28]** , how are you preparing for possible policy shifts that could negatively impact demand, and what is your strategy to diversify market dependence away from such incentives?

56e5aaef808efc56363b22472b08e15d5de080cc604a352afe339e841d18ddc6

7358da00c1f885d0bb430856cc6ec2f454c329d3d06b4d0d0e9d2ea36596bed6

United States

International

- Netherlands

- Others

Total Revenue

2b18a0c4d42f41f3a20f4a520715a1e09c0d01617ed7d486889c433c0e39345a

**IQ8 Microinverters Peak Output Power (W AC)**

**IQ8 Microinverters Continuous DC Current (A)**

**Number of Microinverters Shipped**

**IQ Battery Storage Usable Capacity (kWh) - 10.1**

**IQ Battery Storage Usable Capacity (kWh) - 3.4**

b0f1fb5d41a5d6db10f427b7314b683456e4e7b243741531e4445c98313302fe

- Point in Time

- Over Time

d655a150efff10724df5c57a36d220c254e84dd24deaf2028f8120af5f05ab0c

- SolarEdge Technologies, Inc. - Competitor in the inverter and storage markets  **[0001463101-24-000024_enph-20231231.htm:27]** **[0001463101-24-000024_enph-20231231.htm:14]** .
- Tesla, Inc. - Competitor in the inverter, storage, and EV charger markets  **[0001463101-24-000024_enph-20231231.htm:27]** **[0001463101-24-000024_enph-20231231.htm:14]** .
- Huawei Technologies Co. Ltd. - Competitor in the inverter and storage markets  **[0001463101-24-000024_enph-20231231.htm:27]** **[0001463101-24-000024_enph-20231231.htm:14]** .
- Sungrow Power Supply Co., Ltd. - Competitor in the inverter market  **[0001463101-24-000024_enph-20231231.htm:27]** **[0001463101-24-000024_enph-20231231.htm:14]** .
- Growatt New Energy Co., Ltd. - Competitor in the inverter market  **[0001463101-24-000024_enph-20231231.htm:27]** **[0001463101-24-000024_enph-20231231.htm:14]** .
- LG Chem - Competitor in the storage market  **[0001463101-24-000024_enph-20231231.htm:27]** **[0001463101-24-000024_enph-20231231.htm:14]** .
- BYD - Competitor in the storage market  **[0001463101-24-000024_enph-20231231.htm:27]** **[0001463101-24-000024_enph-20231231.htm:14]** .
- Wallbox - Competitor in the EV charger market  **[0001463101-24-000024_enph-20231231.htm:27]** **[0001463101-24-000024_enph-20231231.htm:14]** .
- ChargePoint Holdings, Inc. - Competitor in the EV charger market  **[0001463101-24-000024_enph-20231231.htm:27]** **[0001463101-24-000024_enph-20231231.htm:14]** .
- JuiceBox - Competitor in the EV charger market  **[0001463101-24-000024_enph-20231231.htm:27]** **[0001463101-24-000024_enph-20231231.htm:14]** .
- EVBox - Competitor in the EV charger market  **[0001463101-24-000024_enph-20231231.htm:27]** **[0001463101-24-000024_enph-20231231.htm:14]** .

c7f335ad8d92553d718cd05cd13379548a2bf2c19769947c9cc73f4ef1ea6d38

**Quarterly guidance for Q4 2024:**
- **Revenue**: $360 million to $400 million  **[ENPH_3403209_3]** **[ENPH_3403209_6]**  (lowered from $370 million to $410 million  **[ENPH_3393967_3]** **[ENPH_3393967_6]** )  
- **Shipments**: 140 to 160 megawatt hours  **[ENPH_3403209_3]** **[ENPH_3403209_6]**  (lowered from 160 to 180 megawatt hours  **[ENPH_3393967_3]** **[ENPH_3393967_6]** )  
- **GAAP Gross Margin**: 47% to 50%  **[ENPH_3403209_6]**  (raised from 45% to 48%  **[ENPH_3393967_6]** )  
- **Non-GAAP Gross Margin**: 49% to 52% with net IRA benefit, 39% to 42% before net IRA benefit  **[ENPH_3403209_6]**  (raised from 47% to 50% with net IRA benefit, 39% to 42% before net IRA benefit  **[ENPH_3393967_6]** )  
- **Net IRA Benefit**: $38 million to $41 million  **[ENPH_3403209_7]**  (raised from $30 million to $33 million  **[ENPH_3393967_6]** )  
- **GAAP Operating Expenses**: $135 million to $139 million  **[ENPH_3403209_7]**  (lowered from $138 million to $142 million  **[ENPH_3393967_6]** )  
- **Non-GAAP Operating Expenses**: $81 million to $85 million  **[ENPH_3403209_7]**  (raised from $79 million to $83 million  **[ENPH_3393967_6]** )  
- **Annualized Effective Tax Rate**: 18% ± 1%  **[ENPH_3403209_7]**  (no change from prior guidance 18% ± 1%  **[ENPH_3393967_6]** )

bea4f8ea9190ea14bbbca4c4dc04ad0f2deb666b0cb159b3192f1130719d2392

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: Q4 2024
- **Guidance**:
  - **Revenue**: $360 million to $400 million  **[ENPH_3403209_3]** **[ENPH_3403209_6]** .
  - **Shipments**: 140 to 160 megawatt hours of IQ batteries  **[ENPH_3403209_3]** **[ENPH_3403209_6]** .
  - **GAAP Gross Margin**: 47% to 50%  **[ENPH_3403209_6]** .
  - **Non-GAAP Gross Margin**: 49% to 52% with net IRA benefit, 39% to 42% before net IRA benefit  **[ENPH_3403209_6]** .
  - **Net IRA Benefit**: $38 million to $41 million based on shipments of 1.3 million units of U.S. microinverters  **[ENPH_3403209_7]** .
  - **GAAP Operating Expenses**: $135 million to $139 million, including $54 million for stock-based compensation, acquisition-related expenses, and amortization  **[ENPH_3403209_7]** .
  - **Non-GAAP Operating Expenses**: $81 million to $85 million  **[ENPH_3403209_7]** .
  - **Annualized Effective Tax Rate**: 18%, plus or minus 1%, excluding discrete items for 2024  **[ENPH_3403209_7]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: Q3 2024
- **Guidance**:
  - **Revenue**: $370 million to $410 million  **[ENPH_3393967_3]** **[ENPH_3393967_6]** .
  - **Shipments**: 160 to 180 megawatt hours of IQ batteries  **[ENPH_3393967_3]** **[ENPH_3393967_6]** .
  - **GAAP Gross Margin**: 45% to 48%  **[ENPH_3393967_6]** .
  - **Non-GAAP Gross Margin**: 47% to 50% with net IRA benefit, 39% to 42% before net IRA benefit  **[ENPH_3393967_6]** .
  - **Net IRA Benefit**: $30 million to $33 million, based on estimated shipment of 1.1 million units of U.S.-made microinverters  **[ENPH_3393967_6]** .
  - **GAAP Operating Expenses**: $138 million to $142 million, including $59 million for stock-based compensation, acquisition-related amortization, and restructuring  **[ENPH_3393967_6]** .
  - **Non-GAAP Operating Expenses**: $79 million to $83 million  **[ENPH_3393967_6]** .
  - **Annualized Effective Tax Rate**: 18% plus or minus 1% with net IRA benefit, excluding discrete items for 2024  **[ENPH_3393967_6]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: Q2 2024
- **Guidance**:
  - **Revenue**: $290 million to $330 million  **[ENPH_3380283_5]** **[ENPH_3380283_3]** .
  - **IQ Batteries Shipments**: 100 to 120 megawatt hours  **[ENPH_3380283_5]** **[ENPH_3380283_3]** .
  - **GAAP Gross Margin**: 42% to 45%  **[ENPH_3380283_5]** .
  - **Non-GAAP Gross Margin**: 44% to 47% with net IRA benefit, 39% to 42% before net IRA benefit  **[ENPH_3380283_5]** .
  - **Net IRA Benefit**: $14 million to $17 million on estimated shipments of 500,000 units of U.S. microinverters  **[ENPH_3380283_5]** .
  - **GAAP Operating Expenses**: $134 million to $138 million, including $56 million for stock-based compensation, acquisition-related amortization, and restructuring and asset impairment charges  **[ENPH_3380283_6]** .
  - **Non-GAAP Operating Expenses**: $78 million to $82 million  **[ENPH_3380283_6]** .
  - **Annualized Effective Tax Rate**: 18%, plus or minus 1% with IRA benefit, excluding discrete items for 2024  **[ENPH_3380283_6]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: Q1 2024
- **Guidance**:
  - **Revenue**: $260 million to $300 million  **[ENPH_3372053_3]** **[ENPH_3372053_6]** .
  - **Shipments**: 70 to 90 megawatt hours of IQ batteries  **[ENPH_3372053_6]** .
  - **GAAP Gross Margin**: 42% to 45%  **[ENPH_3372053_6]** .
  - **Non-GAAP Gross Margin**: 34% to 47% with net IRA benefits, 40% to 43% before net IRA benefits  **[ENPH_3372053_6]** .
  - **Net IRA Benefit**: $12 million to $14 million on estimated shipments of 500,000 units of U.S. manufactured microinverters  **[ENPH_3372053_6]** .
  - **GAAP Operating Expenses**: $144 million to $148 million, including $64 million for stock-based compensation, acquisition-related expense, amortization, and restructuring and impairment charges  **[ENPH_3372053_6]** .
  - **Non-GAAP Operating Expenses**: $80 million to $84 million  **[ENPH_3372053_6]** .
  - **Tax Rate**: GAAP and non-GAAP annualized effective tax rate, excluding discrete items for 2024, to be 20% plus or minus 2% with IRA benefit  **[ENPH_3372053_6]** .

c3ee5bcf018f9d3e63fbafda98bdcc51e0ccfa9f5eaa787e9adfefe591df4d8e

| Name                  | Position                                      | Start Date         | Short Bio                                                                                                                                                                                                 |
|-----------------------|-----------------------------------------------|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Badrinarayanan Kothandaraman | President and Chief Executive Officer     | September 2017     | Badrinarayanan Kothandaraman joined Enphase Energy, Inc. as COO in April 2017 and became CEO in September 2017. He previously worked at Cypress Semiconductor for 21 years and holds eight U.S. patents  **[0001463101-24-000049_enph-20240404.htm:9]** **[0001463101-23-000061_enph-20230406.htm:10]** . |
| Mandy Yang            | Executive Vice President and Chief Financial Officer | February 15, 2022 | Mandy Yang has been CFO since February 15, 2022. She was previously VP and Chief Accounting Officer at Enphase and has over 20 years of experience in finance roles, including at Tesla and SunPower  **[0001463101-24-000049_enph-20240404.htm:26]** **[0001463101-23-000061_enph-20230406.htm:25]** . |
| David Ranhoff         | Executive Vice President and Chief Commercial Officer | December 1, 2017  | David Ranhoff joined Enphase as VP and CCO in December 2017. He was previously President and CEO of GCL Solar Materials and held leadership roles at SunEdison. He will transition to Commercial Advisor on July 1, 2024  **[0001463101-24-000049_enph-20240404.htm:26]** **[0001463101-23-000061_enph-20230406.htm:25]** **[0001463101-23-000061_enph-20230406.htm:58]** . |
| Mary Erginsoy         | Vice President and Chief Accounting Officer   | April 24, 2024     | Mary Erginsoy will serve as VP and Chief Accounting Officer starting April 24, 2024. She oversees the company's accounting functions and is a beneficial owner of Enphase Energy's securities  **[0001463101-24-000084_xslF345X02/wk-form3_1714769102.xml:0]** .                                |

2c4a0b6a5c9d6b61c74ba3097f6ca2de321f603b5900824e35357bafaf08ac94

| Program Details          | Program 1       |
|--------------------------|-----------------|
| Approval Date            | July 2023  **[0001463101-24-000141_enph-20240930.htm:27]** **[0001463101-24-000141_enph-20240930.htm:53]** |
| End Date/Duration        | July 26, 2026  **[0001463101-24-000141_enph-20240930.htm:27]** **[0001463101-24-000141_enph-20240930.htm:53]** |
| Total additional amount  | **$1.0 billion**  **[0001463101-24-000141_enph-20240930.htm:27]** **[0001463101-24-000141_enph-20240930.htm:53]** |
| Remaining authorization  | **$598.3 million** as of September 30, 2024  **[0001463101-24-000141_enph-20240930.htm:27]** **[0001463101-24-000141_enph-20240930.htm:53]** |
| Details                  | The program allows for repurchase of up to $1.0 billion of common stock, utilizing available working capital through open market purchases or privately negotiated transactions, including Rule 10b5-1 plans. It is part of the company's capital management strategy and can be discontinued or amended at any time.  **[ENPH_3255965_3]** **[0001463101-24-000141_enph-20240930.htm:27]** **[0001463101-24-000141_enph-20240930.htm:41]** **[0001463101-24-000119_enph-20240630.htm:41]** **[0001463101-24-000119_enph-20240630.htm:51]** |

99db709e8c2017bf6cad27136cc997e23a2d8af7038135d99f219ba8e582358f

| Name                   | Start Date | End Date | Reason for Change |
|------------------------|------------|----------|-------------------|
| Deloitte & Touche LLP  | 2010  **[0001463101-24-000024_enph-20231231.htm:98]**  | Present  | Current auditor   |

3f79f7236e100748c5b31273eaade1dea76ae85c56ae243f993837462c829718

820f8ac3f7e212f097ef765a110d5b7d57828d4e536cdfc4b1e20700ecaa8b4f

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

1. **U.S. Market Outlook**  
   **Q:** Any concerns about U.S. demand given higher interest rates?  
   **A:** Despite higher interest rates, our U.S. sell-through data is encouraging. California is recovering from NEM 3.0 impacts, with sell-through up **13%** quarter-over-quarter. We expect incremental improvement in 2025, driven by potential rate cuts, the **10% domestic ITC adders**, and rising utility prices.

2. **Europe Market Outlook**  
   **Q:** What is your outlook for Europe in 2025 amid current headwinds?  
   **A:** Europe may be stressed in Q4, but we believe we're at the bottom. In the Netherlands, NEM uncertainty is resolving, and we expect a shift to solar plus storage plus software. In France, despite some headwinds, fundamentals are strong. We're introducing new products like **3-phase batteries with backup** and **IQ Balcony Solar**, expanding our served available market by **$4 billion**. We anticipate a rebound sooner rather than later.

3. **Competition from Tesla Powerwall 3**  
   **Q:** Are you losing market share to Tesla's Powerwall 3?  
   **A:** Our data shows we're holding share. In California, our sell-through is up **13%** quarter-over-quarter. We offer advantages like higher power production, reliability, longer warranties of **15 years**, and **lower installed costs** with our upcoming **fourth-generation battery**. We believe our AC architecture and serviceability set us apart.

4. **Impact of SunPower Bankruptcy**  
   **Q:** How is SunPower's bankruptcy affecting your revenue?  
   **A:** SunPower's bankruptcy represents a headwind of **$10–15 million** in Q4. While we don't expect immediate recovery, we're working with installers to regain this revenue in coming quarters. Increased microinverter sell-through helps offset this impact.

5. **New Product Launches**  
   **Q:** When will IQ9 microinverters and new batteries launch?  
   **A:** We'll introduce commercial IQ9 microinverters in the second half of **2025**, addressing both **208V and 480V** markets. Residential IQ9 microinverters will follow, offering **10% higher power** at similar costs. Our **fourth-generation battery** launches in Q1 2025, reducing installed costs by **$300 per kilowatt-hour**.

6. **Revenue Guidance and Headwinds**  
   **Q:** Can you quantify the headwinds affecting Q4 revenue guidance?  
   **A:** In Q4, battery shipments are projected at **140–160 MWh** versus **170 MWh** in Q3, a **$15 million** difference. SunPower's bankruptcy adds a **$10–15 million** headwind. Europe continues to show slight weakness. However, increased microinverter sell-through is a positive offset.

7. **EV Charger Strategy**  
   **Q:** What's your plan for EV chargers and attach rates into 2025?  
   **A:** We're expanding our EV charger offerings in both the U.S. and Europe. In Europe, we're introducing second-generation **IQ EV Chargers** across **14 countries**, targeting a served available market of **$1.4 billion**. Our chargers feature innovative capabilities like starting with single-phase and switching to three-phase, integrating seamlessly with our solar and battery systems.

8. **Commercial Market Expansion**  
   **Q:** How is your traction in the commercial market evolving?  
   **A:** Our **IQ8P** microinverters are ideal for small commercial installs between **20 and 200 kW**. We've deployed over **380 sites**, including a **214 kW** system at our Fremont building. We're addressing the **480V** market with IQ9 in the second half of **2025**. Domestic manufacturing enables commercial asset owners to gain an extra **10% ITC**.

9. **Gross Margins and Pricing Strategy**  
   **Q:** Any changes in pricing strategy amid market conditions?  
   **A:** We're not dropping prices and continue to price based on value. While U.S. manufacturing increases costs by **10–15%**, we adjust pricing to cover this, creating value of **$0.40 to $0.50 per watt** for our customers due to domestic content benefits.

10. **Domestic Content Strategy and ITC Adders**  
    **Q:** How are you leveraging domestic content for ITC benefits?  
    **A:** We're shipping microinverters with increased domestic content, enabling customers to receive an additional **10% ITC**. Batteries with domestic content will start shipping in November. We expect **10–15%** of U.S. shipments to be domestic content SKUs in Q4, with a steady ramp thereafter.

11. **Use of Cash and Buybacks**  
    **Q:** How do you plan to deploy your **$1.8 billion** cash balance?  
    **A:** Our priorities are capital for expansion, strategic M&A in areas like energy management software and bidirectional EV chargers, and systematic share buybacks. We've been executing buybacks over the past few quarters and will continue to do so opportunistically.

12. **India Market Opportunity**  
    **Q:** Can you be competitive in India's price-sensitive market?  
    **A:** We're targeting India's premium segment, introducing a **5 kWh** battery ideal for a market where power outages occur **five times a day**. We're working with luxury builders to integrate our solutions, tapping into a significant need for reliable power backup.

13. **TPO Market Share**  
    **Q:** How is your share in the TPO market developing?  
    **A:** We have strong relationships with all TPO providers and are collaborating on domestic content solutions. We're shipping domestic content microinverters now and will start shipping batteries with domestic content in November, enhancing our position in this market.

14. **Cost Reduction Initiatives**  
    **Q:** How are you addressing cost reductions to benefit customers?  
    **A:** With IQ9, we're delivering **10% higher power** at similar costs by leveraging **gallium nitride** technology. We're reducing battery costs by eliminating the system controller and integrating components, cutting installed costs by **$300 per kilowatt-hour**. We're also exploring balance-of-system savings and leveraging AI-powered software to enhance ROI for homeowners.

15. **ITC Policy Stability**  
    **Q:** Any concerns about changes to the 30% residential ITC?  
    **A:** We believe the probability of the ITC being altered is very low, possibly zero. The ITC is vital for the U.S. market and economy, supporting job creation and the transition to renewables. Disruption would be detrimental to all stakeholders.

31382cfcab93707625a09435d8cee8ccdbe2e872c40259fc2ce7d84f63c205fd

- Total Revenue: $380.873 million (−31% YoY)  **[0001463101-24-000141_enph-20240930.htm:2]** **[0001463101-23-000165_enph-20230930.htm:2]**   
- United States Revenue: $284.033 million (−19% YoY)  **[0001463101-24-000141_enph-20240930.htm:6]** **[0001463101-23-000165_enph-20230930.htm:6]**   
- International Revenue: $96.840 million (**−52%** YoY)  **[0001463101-24-000141_enph-20240930.htm:6]** **[0001463101-23-000165_enph-20230930.htm:6]**   
- Operating Income (EBIT): $49.79 million (−58% YoY)  **[0001463101-24-000141_enph-20240930.htm:2]** **[0001463101-23-000165_enph-20230930.htm:2]**   
- Net Income: $45.76 million (**−60%** YoY)  **[0001463101-24-000141_enph-20240930.htm:2]** **[0001463101-23-000165_enph-20230930.htm:2]**   
- Diluted EPS: $0.34 (−58% YoY)  **[0001463101-24-000141_enph-20240930.htm:2]** **[0001463101-23-000165_enph-20230930.htm:2]**   

5122430338fd93a8c72abe8fee9951457497008ea161379f70bf03b5895f36ec

| Year | Amount Due (in millions) | Debt Type              | Interest Rate (%) | % of Total Debt                                                                 |
|----------|------------------------------|----------------------------|-----------------------|------------------------------------------------------------------------------------|
| 2025     | 102.2  **[0001463101-24-000141_enph-20240930.htm:16]** **[0001463101-24-000141_enph-20240930.htm:41]**              | Convertible Notes due 2025 | 0.25  **[0001463101-24-000141_enph-20240930.htm:23]** **[0001463101-24-000141_enph-20240930.htm:24]**        | 7.9% = (102.2 / 1300.2) * 100  **[0001463101-24-000141_enph-20240930.htm:16]** **[0001463101-24-000141_enph-20240930.htm:41]**                                           |
| 2026     | 632.5  **[0001463101-24-000141_enph-20240930.htm:16]** **[0001463101-24-000141_enph-20240930.htm:41]**              | Convertible Notes due 2026 | 0.0  **[0001463101-24-000141_enph-20240930.htm:16]** **[0001463101-24-000141_enph-20240930.htm:20]**         | 48.6% = (632.5 / 1300.2) * 100  **[0001463101-24-000141_enph-20240930.htm:16]** **[0001463101-24-000141_enph-20240930.htm:41]**                                          |
| 2028     | 575.0  **[0001463101-24-000141_enph-20240930.htm:16]** **[0001463101-24-000141_enph-20240930.htm:41]**              | Convertible Notes due 2028 | 0.0  **[0001463101-24-000141_enph-20240930.htm:16]** **[0001463101-24-000141_enph-20240930.htm:17]**         | 44.2% = (575.0 / 1300.2) * 100  **[0001463101-24-000141_enph-20240930.htm:16]** **[0001463101-24-000141_enph-20240930.htm:41]**                                          |

e0ec127fd9c2f011eb25b91e70dc002656c5e5e07325fff8e401a6a4a192e181

Number of microinverter units sold (million units)

IQ Batteries MWh shipped (Megawatt-hours (MWh))

Cumulative number of microinverters shipped (million units)

Cumulative number of Enphase residential and commercial systems deployed (million systems)

Number of countries with Enphase residential and commercial systems deployed (countries)

Remaining Performance Obligations (USD millions)

d8636d461fc6c80685f184c9b719a30543f31126039d38905cf0587b100e5855

dc1768e2640535cadb548497dca837ef706ecb53a2371df51c145bb2af8a29a5

1. **Demand Outlook and Recovery**  
   **Q:** Is Q1 the bottom, and what's the magnitude of Q2 pickup?  
   **A:** Management expects **Q1 to be the bottom**, with end customer demand of **$450 million to $500 million**.  **[ENPH_3372053_7]**  They undershipped **$147 million** in Q4 and plan to undership **$130 million** in Q1 to reduce channel inventory.  **[ENPH_3372053_7]**  They anticipate sell-in numbers to improve in Q2, with seasonal demand better and inventory levels normalized.  **[ENPH_3372053_7]** 

2. **Battery Margins Expansion**  
   **Q:** How are battery margins expanding, and what's the outlook?  
   **A:** Battery sell-through in Q4 was the highest ever at **140 megawatt-hours**.  **[ENPH_3372053_8]**  Gross margins on batteries are expected to continuously improve due to lower cell pack costs, manufacturing microinverters in the U.S., and architectural advancements in new battery generations.  **[ENPH_3372053_8]**  This margin expansion is anticipated to positively impact overall gross margins.  **[ENPH_3372053_8]** 

3. **Operating Expense Reduction**  
   **Q:** What's the plan for OpEx and compensation going forward?  
   **A:** In December, they implemented restructuring affecting about **10% of the workforce**.  **[ENPH_3372053_9]**  Non-GAAP OpEx reduced from **$99 million** in Q3 to **$86 million** in Q4.  **[ENPH_3372053_9]**  They aim for a quarterly run rate of **$75 million to $80 million** by the second half of 2024 through spending cuts and not backfilling positions.  **[ENPH_3372053_9]** 

4. **Gross Margin Outlook and IRA Impact**  
   **Q:** How is gross margin trending, and what's the IRA impact?  
   **A:** The non-GAAP gross margin before the IRA benefit in Q1 is expected to be in line with Q4.  **[ENPH_3372053_34]**  However, with reduced U.S. shipments, the IRA benefit decreases, leading to a **5 percentage point** reduction in non-GAAP gross margin including IRA.  **[ENPH_3372053_34]**  They plan to ship only **500,000 units** in Q1, reducing the IRA benefit by **$13 million**.  **[ENPH_3372053_34]** 

5. **Pricing Environment Stability**  
   **Q:** Are there changes in pricing or discounts affecting margins?  
   **A:** Management indicates no notable change in the pricing environment.  **[ENPH_3372053_9]**  They manage special pricing adjustments tightly, and gross margins reflect this stability.  **[ENPH_3372053_9]** 

6. **Inventory Management and Manufacturing**  
   **Q:** How are you managing inventory and scaling manufacturing capacity?  
   **A:** They aim to reduce inventory from about **$200 million** (110 days) to a best-in-class level of **30 days**.  **[ENPH_3372053_11]**  Shipped **900,000 units** from U.S. factories in Q4 but plan to ship **500,000** in Q1 to align production with demand.  **[ENPH_3372053_11]**  Two-thirds of future microinverters will be made in the U.S., adjusting capacity based on demand.  **[ENPH_3372053_11]** 

7. **European Market Recovery**  
   **Q:** What's the outlook for Europe, especially the Netherlands?  
   **A:** Europe is expected to recover earlier than the U.S., potentially by the end of Q1.  **[ENPH_3372053_14]**  In the Netherlands, after a downturn due to policy uncertainties, they see signs of recovery with increased focus on solar plus batteries and energy management software.  **[ENPH_3372053_15]**  They anticipate a steady uptick as the bottom may be behind them.  **[ENPH_3372053_15]** 

8. **Impact of Installer Bankruptcies**  
   **Q:** How will installer bankruptcies affect demand and destocking?  
   **A:** Bankruptcies like ADT Solar cause short-term friction, but the industry is resilient.  **[ENPH_3372053_13]**  End customer demand remains, and other installers are expected to pick up the volume, possibly within a quarter.  **[ENPH_3372053_13]** 

9. **SunPower Contract Expiration**  
   **Q:** What's the status of the SunPower exclusivity contract?  
   **A:** The exclusivity contract with SunPower ends in Q1.  **[ENPH_3372053_26]**  Discussions are ongoing, but specific details are confidential, and no revenue impact was disclosed.  **[ENPH_3372053_26]** 

10. **Opportunities in C&I Market**  
    **Q:** Can you provide an update on the IQ8P introduction in the C&I market?  
    **A:** The IQ8P product was introduced in Q4, targeting installations from 20 to 200 kilowatts, such as schools and small businesses.  **[ENPH_3372053_18]**  They expect meaningful revenue this year, with shipments increasing quarter over quarter.  **[ENPH_3372053_18]** 

26928e5a05f72bbbb19830d3009c9a04e74aaf4fd410ac15180375f9631b1e6a

- Despite clearing channel inventory, Enphase Energy's demand has remained **relatively stable at about $400 million per quarter**, indicating limited growth in underlying demand.  **[ENPH_3393967_10]**
- **Industry peers are reporting reduced demand and challenging market conditions in Europe**, which may suggest market weakness that could affect Enphase despite their optimism.  **[ENPH_3393967_23]**
- **Competitors are reporting 5% to 10% price declines in Europe**, but Enphase is **not planning to adjust pricing**, potentially leading to competitive disadvantages in the European market.  **[ENPH_3393967_24]**

438ba4502b6034fefa040a73630d0e52052af2bf9d4fde6a1cfe898ba8326cea

- **Enphase's battery business is performing exceptionally well**, with shipments increasing from **75.5 MWh in Q1** to **120 MWh in Q2**, and an expected **170 MWh in Q3**, indicating strong growth momentum in this segment.  **[ENPH_3393967_10]**
- **Significant growth opportunities in Europe** as Enphase is **underpenetrated in multiple countries**; the company is expanding its product portfolio and presence in countries like **Germany (sell-through up 7% from Q1 to Q2)**, and introducing new products such as **Balcony Solar**, **three-phase batteries**, and **IQ EV chargers**, which positions Enphase for substantial international growth.  **[ENPH_3393967_23]** **[ENPH_3393967_10]**
- **Improving gross margins and cost reductions** through **continuous innovation**, including making microinverters and batteries in the U.S., expecting **non-GAAP gross margins without IRA to continuously improve**, and leveraging domestic manufacturing incentives, which enhances Enphase's competitive positioning and profitability.  **[ENPH_3393967_8]**

49a19050cefdb42cf8a0ac6c5ad4c0c91c83b034c89501509d99813690d7d06e

1. **Demand Outlook and Guidance**  
   **Q:** How is demand expected to trend, and what is your guidance?  
   **A:** In Q1, our sell-through demand was **$376 million**, with reported revenue of **$263.3 million**.  **[ENPH_3380283_10]**  We under-shipped by **$113 million** to reduce channel inventory.  **[ENPH_3380283_10]**  For Q2, we're guiding revenue of **$290 million to $330 million**, with estimated sell-through of **$400 million**, implying an under-shipment of **$90 million**.  **[ENPH_3380283_10]**  We expect sell-through to continuously increase in the second half due to improving markets in Europe and the U.S., and new product introductions.  **[ENPH_3380283_10]** 

2. **Gross Margin Outlook**  
   **Q:** Why is gross margin guidance lower for Q2?  
   **A:** We guided non-GAAP gross margins of **39% to 42%** for Q2 without the IRA credit, slightly lower due to an increased mix of battery products.  **[ENPH_3380283_14]**  As our battery to microinverter ratio increases, initial battery margins are lower, but we're improving margins through cost reductions, U.S. manufacturing for tax credits, and new integrated architectures.  **[ENPH_3380283_14]** 

3. **Battery Business Performance**  
   **Q:** How is your battery business performing?  
   **A:** Our battery sell-through in Q1 was **128 megawatt-hours**, only **8%** down from Q4's **140 megawatt-hours**, outperforming seasonal trends.  **[ENPH_3380283_8]**  We guided Q2 battery shipments of **100 to 120 megawatt-hours**.  **[ENPH_3380283_8]**  The battery channel is lean, and we expect continued growth as every market transitions to solar plus storage.  **[ENPH_3380283_8]** 

4. **Market Share Gains**  
   **Q:** Are you gaining market share in the U.S. residential market?  
   **A:** We believe we're gaining market share due to our strong relationships with installers, providing value-added services like proposal tools, permitting, and training.  **[ENPH_3380283_19]**  Installers switching to us ramp up over time, and we expect these gains to reflect in future sell-through increases.  **[ENPH_3380283_19]** 

5. **California Market and NEM 3.0**  
   **Q:** How is NEM 3.0 affecting your business in California?  
   **A:** California was a wildcard in Q1, with sell-through down **30%**, but we're increasingly confident.  **[ENPH_3380283_12]**  Load shifting is significant, with **50%** of NEM 3.0 systems attaching our battery.  **[ENPH_3380283_21]**  Our upcoming meter collar product will simplify installations, piloting by year-end.  **[ENPH_3380283_21]** 

6. **New Product Development (IQ9)**  
   **Q:** Can you provide an update on IQ9 development?  
   **A:** IQ9 will come in **427W** and **548W** versions, using gallium nitride technology for higher power and efficiency with a smaller form factor.  **[ENPH_3380283_13]**  Pilots start later this year, with commercial release in first half of 2025.  **[ENPH_3380283_13]**  Ramp-up to full production typically takes **4 to 6 quarters**.  **[ENPH_3380283_13]** 

7. **Inventory Management Improvements**  
   **Q:** How are you improving channel visibility to prevent inventory issues?  
   **A:** We're implementing metrics across the sales process using tools like Solargraf, tracking leads through activations.  **[ENPH_3380283_26]**  Regular reviews and statistical controls help us balance sell-in and sell-through, avoiding over-shipment.  **[ENPH_3380283_26]** 

8. **Capital Allocation and Share Repurchases**  
   **Q:** What's your approach to share repurchases and cash allocation?  
   **A:** In Q1, we spent about **$100 million** on share repurchases and anti-dilution measures.  **[ENPH_3380283_31]**  We plan to continue repurchasing shares as long as the stock remains attractive.  **[ENPH_3380283_31]** 

9. **Competitive Landscape and Pricing Strategy**  
   **Q:** How do you compete with products like Tesla's Powerwall 3 on pricing?  
   **A:** We focus on the value we offer, including safety, reliability, and superior technology.  **[ENPH_3380283_16]**  With our fourth-generation battery, we'll continue to reduce costs and improve margins, adjusting pricing if needed to provide more value compared to competitors.  **[ENPH_3380283_16]** 

10. **European Market Growth**  
    **Q:** What drives demand in Europe, particularly in Germany?  
    **A:** Self-consumption is key due to feed-in tariff inversion, where buying electricity costs more than selling excess.  **[ENPH_3380283_30]**  VPP programs and home energy management systems enhance ROI, with opportunities expanding as EVs become bidirectional assets.  **[ENPH_3380283_30]** 

11. **SunPower Relationship**  
    **Q:** Any updates on your exclusivity arrangement with SunPower?  
    **A:** Our relationship with SunPower remains strong; it's business as usual.  **[ENPH_3380283_24]**  We are in discussions and will update when there's a signed contract.  **[ENPH_3380283_24]** 

12. **Sourcing of Gallium Nitride Components**  
    **Q:** Are you concerned about sourcing gallium nitride components?  
    **A:** We have reliable sources for gallium nitride transistors from existing suppliers and are not worried about sourcing issues.  **[ENPH_3380283_28]** 

13. **Installer Capacity in California**  
    **Q:** Can installers in California handle growth if demand returns?  
    **A:** Yes, installers are savvy and nimble, managing lean operations and adapting with financing options like leases and PPAs.  **[ENPH_3380283_22]**  We're confident they can respond to increased demand.  **[ENPH_3380283_22]** 

0a1cf9496a03ca6d6ac63db1e04ef0ebac7ed5370cb7572f8a5bb9a8e6e2cc94

- **Regulatory risks in the U.S.:** Enphase's growth is heavily dependent on the 30% residential tax credit from the IRA, and any disruption to this incentive would negatively impact the overall market and the general economy  **[ENPH_3403209_28]** .
- **Increasing competition from Tesla's Powerwall 3:** Demand for Tesla's Powerwall 3 is substantial and widespread, raising concerns that Enphase may **lose market share** to Tesla, especially until Enphase's new battery system is released  **[ENPH_3403209_17]** .
- **Challenging business environment in Europe:** Enphase reported a **34% decline in product sell-through in Europe** in Q3 compared to Q2, citing lower power prices, slow economic growth, and limited consumer confidence  **[ENPH_3403209_2]** .

d5abf897109c63d5062938815a50e5444b0c5b112d589cd9b2ef44bd511ba805

- Enphase Energy has guided down its gross margins by about 500 basis points sequentially due to unfavorable product mix and underutilization, with microinverter sales down compared to the prior quarter.  **[ENPH_3372053_30]**
- The company is experiencing inventory buildup, leading to under-shipment of approximately $130 million in Q1 to reduce channel inventory, which may indicate weaker demand or overstocking issues, particularly impacting the U.S. market more heavily in Q1.  **[ENPH_3372053_12]** **[ENPH_3372053_19]**
- The transition to NEM 3.0 in California has been slower than anticipated, with installers facing difficulties selling these systems due to complexity, added upfront battery costs, and high interest rates; Enphase acknowledges the need to do more to support installers during this transition.  **[ENPH_3372053_29]**

5d0db283eeece4672984e7728ca201f44bbb4899cc9ad25d76c2fecc44cad7ae

- **Enphase is diversifying its product portfolio rapidly**, entering new countries and expanding battery sales, which could drive significant revenue growth.  **[ENPH_3372053_19]**
- **The company is introducing new products with cost reductions**, such as GaN-based IQ9 microinverters and the fourth-generation battery with improved architecture, which should improve margins and competitiveness.  **[ENPH_3372053_31]**
- **Enphase has a strong value proposition against competition**, offering superior technology and integrated solutions, including energy management software, EV chargers, and bidirectional chargers, which can increase revenue per home and strengthen its market position.  **[ENPH_3372053_19]** **[ENPH_3372053_36]**

c644d051d1d751ab3e7e0a03916b63ba6494c03081c493de6c8b83a7f751086a

1. **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.  **[ENPH_3393967_7]** 

2. **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.  **[ENPH_3393967_8]** 

3. **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.  **[ENPH_3393967_9]** 

4. **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.  **[ENPH_3393967_9]** 

5. **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.  **[ENPH_3393967_9]** 

6. **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.  **[ENPH_3393967_7]** 

7. **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.  **[ENPH_3393967_22]** 

8. **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%**.  **[ENPH_3393967_14]** 

7f227c27e6906983aa260db9e14e6e25e83b50af0e93a062164c092da6896602

- **Enphase Energy is undershipping to end customer demand, with **$113 million** in under shipments in Q1 and expecting **$90 million** in under shipments in Q2, suggesting potential weakening demand or inventory issues.**  **[ENPH_3380283_23]**
- **Microinverter pricing decreased by approximately **4%-5%** quarter-over-quarter, which may indicate pricing pressure and could negatively impact margins.**  **[ENPH_3380283_9]**
- **Uncertainty around the transition from NEM 2.0 to NEM 3.0 in California, including legal challenges and installers adjusting to new regulations, may impact future demand and create challenges in revenue forecasting.**  **[ENPH_3380283_32]** **[ENPH_3380283_28]** **[ENPH_3380283_18]**

0390b8b0d7f1a475c1a8cbaa9d0a3c167f3c3101b6ea29e40dbdd6c667558473

- **Enphase Energy** is introducing a range of innovative products in 2025, including the new **IQ9 microinverters** with **10% more power** at similar cost, allowing participation in new markets like the **480-volt market**, and a fourth-generation battery with a **60% smaller footprint** and **reduced installation cost** of **$300 per kilowatt hour**, expected to drive growth throughout the year.  **[ENPH_3414336_11]** ,  **[ENPH_3414336_9]**
- The company expects **sequential growth in battery sales throughout 2025**, supported by positive reception of new battery products like the **FlexPhase battery** in Europe, which offers **backup on all three phases** and aims to convert the entire European market to this product, and the fourth-generation battery in the U.S., gaining strong traction with installers.  **[ENPH_3414336_9]**
- Enphase's competitive advantages include **modular and serviceable battery systems** with longer warranties compared to competitors (**15-year warranty** vs. **10-year warranty**), **superior microinverter technology** that optimizes energy production at the per-panel level, and new software solutions like the **Busbar Power Control Software**, enhancing customer appeal and potentially supporting market share gains.  **[ENPH_3414336_26]**

94323b0bebde3fec68b957d946ebb8e422ce842a9adfba9c10d9aa79dd37dc28

- Enphase Energy's revenues in Q1 and Q2 2025 will include **$95 million** from safe harbor sales, with **$50 million** recognized in Q1 and **$45 million** in Q2, which may pull forward revenue from future quarters and potentially mask underlying demand weakness.  **[ENPH_3414336_21]** **[ENPH_3414336_3]** **[ENPH_3414336_30]**
- The company faces uncertainty due to a potential tariff on battery anode materials from an ongoing anti-dumping and countervailing duties (**AD/CVD**) investigation, which could increase costs and affect margins. Enphase is working on diversifying its supply chain, but the outcome remains uncertain.  **[ENPH_3414336_11]**
- **Competition from Tesla's Powerwall is increasing** in the storage and inverter markets, as indicated by their significant market share gains, which could erode Enphase's market share in these segments. Enphase acknowledges previous limitations in its backup capabilities and plans to address them with its fourth-generation battery.  **[ENPH_3414336_26]**

8054920857a444d21837dc44cc308ae35241505b7745d4da09a1b689bd782fb0

1. **Safe Harbor Revenue Impact**  
   **Q:** How does safe harbor revenue affect your guidance?  
   **A:** Enphase recognized **$95 million** in safe harbor revenue, with **$50 million** in Q1 and the remaining **$45 million** expected in Q2.  **[ENPH_3414336_8]** **[ENPH_3414336_21]**  This revenue, primarily from microinverters, will be recognized over **eight quarters**, adding about **$12 million** per quarter to core revenue.  **[ENPH_3414336_10]**  The safe harbor deals help mitigate risks related to domestic content changes and ITC step-downs.  **[ENPH_3414336_17]** 

2. **Battery Storage Growth and New Products**  
   **Q:** What's the outlook for battery storage and new products?  
   **A:** Enphase expects to sequentially grow in batteries throughout **2025**.  **[ENPH_3414336_9]**  They are introducing the fourth-generation battery with a **60% smaller** wall space, integrating power conversion and battery management for a more compact form factor.  **[ENPH_3414336_9]** **[ENPH_3414336_18]**  Piloting is set for **March**, with ramping expected in Q2 and reaching **50%** of battery mix in a couple of quarters.  **[ENPH_3414336_18]**  Additionally, they're developing a fifth-generation battery, targeting release in **Q1 '26**, aiming for higher energy density and cost reductions.  **[ENPH_3414336_19]** 

3. **Margin Outlook and Pricing Strategy**  
   **Q:** Can we expect margin improvements with new products?  
   **A:** Enphase anticipates improving gross margins through advancements like the IQ9 microinverter and fourth-generation battery.  **[ENPH_3414336_12]**  The IQ9 offers **10% more power** at similar cost, utilizing gallium nitride technology for intrinsic cost reductions.  **[ENPH_3414336_12]**  The new battery reduces installation costs by **$300 per kilowatt hour**, enhancing competitiveness in both grid-tied and backup scenarios.  **[ENPH_3414336_9]** **[ENPH_3414336_12]**  Enphase maintains pricing based on value added, supported by a robust cost reduction program.  **[ENPH_3414336_12]** 

4. **Installer Channel Health**  
   **Q:** How is the health of the installer channel?  
   **A:** Installers are facing difficulties, particularly with cash flow and financing options.  **[ENPH_3414336_13]**  While Enphase's receivables are in good shape due to working with distributors, installers are experiencing challenges.  **[ENPH_3414336_13]**  In California, activities have stabilized, and installers are becoming more confident in selling under NEM 3.  **[ENPH_3414336_13]** 

5. **Capital Return and Share Buybacks**  
   **Q:** Will you increase share buybacks given your strong position?  
   **A:** Enphase prioritizes business needs and M&A opportunities.  **[ENPH_3414336_15]**  With excess cash, they consider share buybacks if the share price is below intrinsic value.  **[ENPH_3414336_15]**  In the last quarter, they repurchased **2.8 million shares** for about **$200 million**  **[ENPH_3414336_15]** **[ENPH_3414336_23]**  and plan to execute a similar strategy moving forward.  **[ENPH_3414336_23]** 

6. **Tariffs and Supply Chain**  
   **Q:** Are there concerns about tariffs affecting new products?  
   **A:** Enphase does not expect any impact on tariffs for microinverters or the IQ9.  **[ENPH_3414336_14]**  They have diversified their supply chain, manufacturing in the U.S. and India, with limited exposure to tariff risks.  **[ENPH_3414336_14]**  The gallium supply chain for IQ9 is secure, with suppliers based in Europe, North America, and Japan.  **[ENPH_3414336_14]** 

7. **Domestic Content and IRA Impact**  
   **Q:** Do your batteries qualify for domestic content incentives?  
   **A:** Enphase's batteries have well over **40%** domestic content and already qualify for incentives.  **[ENPH_3414336_22]**  They are manufacturing batteries in Texas and shipped **6.7 megawatt hours** of batteries in Q4, expecting to ship more in Q1.  **[ENPH_3414336_22]** 

8. **Acceleration of Product Development**  
   **Q:** What's driving faster battery product launches?  
   **A:** Enphase has improved its battery development cycle, leveraging an expert team.  **[ENPH_3414336_19]**  After releasing the third-generation battery in **June 2023**, they are piloting the fourth generation now and plan to release the fifth generation in **Q1 '26**.  **[ENPH_3414336_19]**  This steady cadence of releases every **12 to 18 months** enhances competitiveness and cost structure.  **[ENPH_3414336_19]** 

9. **Competition and Market Share**  
   **Q:** How are you addressing competition from Tesla Powerwall?  
   **A:** While not commenting directly on competitors, Enphase focuses on offering best-in-class products.  **[ENPH_3414336_26]**  The upcoming fourth-generation battery will be competitive in both grid-tied and backup scenarios, offering a **15-year warranty** versus competitors' **10-year warranty**.  **[ENPH_3414336_26]**  Enphase emphasizes modularity, safety, and serviceability, with most issues resolved on-site.  **[ENPH_3414336_26]** 

10. **European Market Outlook**  
    **Q:** What's the outlook for the European market amid falling electricity rates?  
    **A:** Falling electricity rates, like the **15%** reduction in France on February 1, present headwinds.  **[ENPH_3414336_27]**  However, Enphase sees Europe as attractive due to low solar penetration and increasing EV adoption.  **[ENPH_3414336_27]**  They're introducing comprehensive home energy management solutions to maximize self-consumption and savings for homeowners.  **[ENPH_3414336_27]** 

da2f492e771ae4cef6f582bbf750ed1cee681bf3eea2760e92c40bfd696adb47

47ec0963937219ce03d273b7c314c58806a9eefae9b3ca762238ee7b5adf98c8

- **Enphase has strong financial flexibility with approximately $1.8 billion in cash**, which they plan to use for expansion, selective mergers and acquisitions (particularly in energy management software and EV chargers), and **opportunistic share buybacks** to enhance shareholder value.  **[ENPH_3403209_27]**
- **Enphase is poised to capture additional market share** following the bankruptcy of a large competitor, as they are working closely with the affected installers and expect to regain or exceed the lost revenue in upcoming quarters.  **[ENPH_3403209_16]** **[ENPH_3403209_14]**
- **Enphase is launching new, innovative products**, such as the fourth-generation battery system in Q1 2025, which will **reduce installed costs by approximately $300 per kilowatt hour** and make them highly competitive for backup applications, positioning them well for future growth and market share gains.  **[ENPH_3403209_17]** **[ENPH_3403209_21]**

9983a7f044389108dfc1997db16812e2ff855aa9eae5b29202c18ab79fe7b89b

- **Strong growth and optimism in European markets**: Enphase Energy's overall sell-through in Germany was up **28% in Q1 compared to Q4**, indicating strong momentum in this market.  **[ENPH_3380283_2]**  The company plans to launch its **three-phase battery solution** in Germany later this year, further enhancing its product offerings in the region.  **[ENPH_3380283_2]**
- **Increasing demand and positive outlook for energy storage solutions**: The company's **battery sell-through was only down 8% in Q1**, which is better than the expected seasonality of 20%.  **[ENPH_3380283_8]**  Enphase is guiding **100-120 MWh** of battery shipments in Q2, up from **75.5 MWh** shipped in Q1, reflecting the company's confidence in its storage business.  **[ENPH_3380283_8]** **[ENPH_3380283_3]**  The CEO stated that "**storage is a good story for us**," with expectations that "**over the long term, every market [will] transition to solar plus storage**".  **[ENPH_3380283_8]**
- **Competitive advantages and upcoming innovations**: Enphase is poised to launch its **fourth-generation battery** later in the year, which will have a "**great cost structure and an elegant form factor due to the integrated battery management and power conversion architecture**".  **[ENPH_3380283_3]**  The company emphasizes its significant benefits over competitors, including safety features, higher production efficiency, enhanced reliability, and the **best warranty in the industry** at **15 years**.  **[ENPH_3380283_16]**

273d8e2b8df645db9715aceb3851c8d138db6bfa42965314ccafebed824363b6

323f0558139364c671811105113ccb48d42d0d5662c1fa6e03fa257d49706cfe

**Quarterly guidance for Q1 2025:**  
- **Revenue**: $340 million to $380 million  **[ENPH_3414336_3]** **[ENPH_3414336_7]** **[ENPH_3414336_6]**  (lowered from $360 million to $400 million  **[ENPH_3403209_3]** **[ENPH_3403209_6]** )  
- **Safe Harbor Revenue**: $50 million  **[ENPH_3414336_3]** **[ENPH_3414336_7]** **[ENPH_3414336_6]**  (no prior guidance)  
- **IQ Battery Shipments**: 150 to 170 MWh  **[ENPH_3414336_3]** **[ENPH_3414336_6]**  (raised from 140 to 160 MWh  **[ENPH_3403209_3]** **[ENPH_3403209_6]** )  
- **GAAP Gross Margin**: 46% to 49%  **[ENPH_3414336_7]**  (lowered from 47% to 50%  **[ENPH_3403209_6]** **[ENPH_3403209_7]** )  
- **Non-GAAP Gross Margin**: 48% to 51%  **[ENPH_3414336_7]**  (lowered from 49% to 52%  **[ENPH_3403209_6]** **[ENPH_3403209_7]** )  
- **Non-GAAP Gross Margin (excluding net IRA benefit)**: 38% to 41%  **[ENPH_3414336_7]**  (lowered from 39% to 42%  **[ENPH_3403209_7]** )  
- **Net IRA Benefit**: $36 million to $39 million  **[ENPH_3414336_7]**  (lowered from $38 million to $41 million  **[ENPH_3403209_7]** )  
- **GAAP Operating Expenses**: $143 million to $147 million  **[ENPH_3414336_7]**  (raised from $135 million to $139 million  **[ENPH_3403209_7]** )  
- **Non-GAAP Operating Expenses**: $81 million to $85 million  **[ENPH_3414336_7]**  (no change from $81 million to $85 million  **[ENPH_3403209_7]** )  
- **Tax Rate**: 18%, plus or minus 1%  **[ENPH_3414336_7]**  (no change from 18%, plus or minus 1%  **[ENPH_3403209_7]** )  
- **Microinverter Shipments**: 1.2 million units  **[ENPH_3414336_7]** **[ENPH_3414336_1]**  (lowered from 1.3 million units  **[ENPH_3403209_7]** )  

1d998e9044f208b29e2545d431a469c4ef44393ca6085cf82758a1d9cd3d8739

Enphase Energy Inc (ENPH)

Financials