Enphase Energy, Inc. announced financial results for the fourth quarter and year-end 2017, which included the summary below from its President and CEO, Badri Kothandaraman. Highlights for the quarter included:
- Revenue of $79.7 million, at the higher end of guidance
- GAAP gross margin of 23.8%; non-GAAP gross margin of 24.2%
- GAAP operating loss of $2.1 million; non-GAAP operating income of $1.3 million
- GAAP EPS of $(0.03); non-GAAP EPS of $0.01
- Ending cash balance of $29.1 million
Our revenue and earnings for the fourth quarter are given below, compared with those of the prior quarter and the year ago quarter:
Our revenue and earnings for the fiscal year 2017 are given below, compared with those of the prior year:
Our fourth quarter revenue was $79.7 million, an increase of 3% sequentially from $77.0 million. We shipped 221 megawatts DC and 755,000 microinverters. Our non-GAAP gross margin was 24.2%, an increase of 240 basis points from 21.8% in the prior quarter. The increase was primarily due to the IQ 6 transition in North America, supply chain optimization and pricing management. Our non-GAAP operating expenses were $18.0 million, an increase of 6% compared to the prior quarter, due to investments in IQ 8 platform development. We are very pleased to report non-GAAP operating income of $1.3 million and net income of $683,000, which resulted in basic and diluted earnings per share of $0.01. This return to profitability represents a significant milestone for the company.
We exited the quarter with approximately $29.1 million in cash. Inventory was $26 million in the fourth quarter, compared to $25.3 million in the third quarter, and down from $32 million in the fourth quarter of 2016.
In summary, we are well on track towards achieving our 30-20-10 target operating model by the end of 2018. We are targeting 30% gross margin, 20% operating expenses and 10% operating income, all by the fourth quarter of 2018.
- Enphase opened an R&D center in Bangalore, India to establish a best-in-class technology development center. India is an important part of Enphase's overall global strategy, as the country is driving the growth in solar with its ambitious targets for clean energy. Our presence in India enables us to leverage the enormous talent available to grow Enphase worldwide.
- Enphase announced the availability of its IQ Combiner+™ with the IQ Envoy. The IQ Combiner+ consolidates residential solar interconnection equipment into a single enclosure and streamlines PV and storage installations by providing a consistent, pre-wired solution for residential applications.
- Enphase completed its transition to IQ 6 in North America in 2017, contributing to gross margin expansion. We began shipping IQ 7 microinverters to customers in the U.S. during the first quarter of 2018. IQ 7 will be phased into worldwide markets throughout 2018.
- On February 12, 2018, Enphase announced a strategic partnership with Panasonic Corporation of North America for the development of high efficiency AC modules, using our 320W IQ 7X Microinverter which is compatible with 96-cell DC modules.
- On February 9, 2018, Enphase sold 9,523,809 million shares of its common stock in a private placement at a price per share of $2.10 for gross proceeds of $20 million.
First Quarter 2018 Financial Outlook
For the first quarter of 2018, Enphase estimates both GAAP and non-GAAP financial results as follows:
- Revenue to be within a range of $65 million to $70 million
- GAAP and non-GAAP gross margin to be within a range of 22% to 25%
- Non-GAAP operating expense to be within a range of $17.5 million to $18.5 million
- GAAP operating expense to be within a range of $19.5 million to $20.5 million, including an estimated $2.0 million of stock-based compensation expense