Enphase Energy, Inc. announced financial results for the second quarter of 2018, which included the summary below from its President and CEO, Badri Kothandaraman. Highlights for the quarter included:
- Revenue of $75.9 million, including a $2.0 million milestone payment from a partner on IQ 8
- IQ 7 shipments at 22% of all microinverters
- GAAP gross margin of 29.9%; non-GAAP gross margin of 30.5%
- GAAP operating loss of $0.6 million; non-GAAP operating income of $4.1 million
- GAAP EPS of $(0.04); non-GAAP EPS of $0.02
- Ending cash balance of $58.5 million
Revenue and earnings for the second quarter are given below, compared with those of the prior quarter and the year ago quarter:
Our second quarter revenue was $75.9 million, an increase of 8% sequentially from $70.0 million, and an increase of 2% year-over-year. We shipped 203 megawatts DC, or 675,000 microinverters. Our non-GAAP gross margin was 30.5%, an increase of 400 basis points from 26.5% in the prior quarter. The increase was primarily due to pricing management, supply chain optimization, transition to IQ 7, and the IQ 8 milestone payment. Our non-GAAP operating expenses were $19.0 million, an increase of 7% compared to the prior quarter. We are very pleased to report non-GAAP operating income of $4.1 million, our third consecutive quarter of non-GAAP operating income. Non-GAAP net income was $1.6 million, which resulted in basic non-GAAP earnings per share of $0.02.
We exited the quarter with $58.5 million in cash. Inventory was $17.5 million in the second quarter, at the lowest point since 2014, compared to $18.5 million in the first quarter and $20.8 million in the second quarter of 2017.
In summary, we are pleased with our continued progress towards our 30-20-10 target operating model, which we expect to achieve in the fourth quarter of 2018.
- Enphase announced a definitive agreement to acquire SunPower's microinverter business for $25 million in cash and 7.5 million shares of Enphase common stock. Enphase will become the exclusive microinverter supplier for SunPower's residential business in the U.S. Enphase's IQ 7XS microinverter offers 97.5% CEC efficiency and was designed specifically for SunPower's X Series 96-cell PV modules with peak AC output power of 320W and a Maximum Power Point (MPP) tracking range of 53-64V. We are on track to close at the end of the third quarter of 2018 subject to product qualification and other closing conditions under the definitive asset purchase agreement.
- Enphase announced it started shipping its IQ 7X microinverters to solar distributors in the U.S. The Enphase IQ 7X Micro™ is the highest power and highest efficiency variant of the seventh-generation IQ family of microinverters. The Enphase IQ 7X Micro is ideal for integration into AC Modules (ACMs).
- Enphase announced the introduction of IQ 7 in Europe during the second quarter at the Intersolar Europe tradeshow. This introduction represented Enphase's entry into the German and Austrian solar markets, while expanding its presence in other solar markets such as France, Benelux, UK, and Switzerland.
- Enphase introduced IQ 7 in Australia and New Zealand during the second quarter. IQ 7 microinverters offer state-of-the-art power performance, are lightweight (1.08 kg) and offer a compact form factor (212 mm x 175 mm x 30 mm). With 96.5% efficiency, IQ 7 microinverters produce up to 23% more power at nearly half the weight of Enphase's fifth-generation S-series microinverters, which they replace in Australia and New Zealand.
- On July 19, 2018, Enphase announced the addition of 'Service-on-the-Go' for the Enlighten Manager, which provides detailed diagnostic capabilities, as well as fleet management tools, and the Installer Tool Kit platforms. As part of the Enphase customer experience initiative, Service-on-the-Go enables a solar installer to request a return and quickly activate a new microinverter in an existing system from the field using a smartphone or computer, 24 hours a day, seven days a week.
- On July 24, 2018 Enphase announced that Momentum Solar, one of the fastest growing home solar service providers in the U.S., chose Enphase to be its exclusive inverter supplier. Enphase's seventh-generation IQ microinverters will be interoperable with Enphase Ensemble™, a technology that will enable new grid-agnostic solar use cases in eighth-generation Enphase microinverters and enhance Momentum Solar's ability to bring grid-agnostic solar to eligible homeowners.
Third Quarter 2018 Financial Outlook
For the third quarter of 2018, Enphase estimates both GAAP and non-GAAP financial results as follows:
- Revenue to be within a range of $76 million to $82 million
- GAAP and non-GAAP gross margin to be within a range of 30% to 33%
- Non-GAAP operating expense to be within a range of $18.0 million to $19.0 million
- GAAP operating expense to be within a range of $22.0 million to $23.0 million, including an estimated $4.0 million of stock-based compensation expense.