Enphase Energy Reports Net Income Drop of 75% in Q1 on Weak Demand

The company reported revenue of $263.3 million in Q1 2024, a 63.7% decrease YoY


Microinverter and battery storage supplier Enphase Energy recorded a net income of $48 million during the first quarter (Q1) of 2024, a year-over-year (YoY) decrease of 75% from $192.32 million as the demand in its primary U.S. market witnessed a drop.

In Q1 of 2024, the company reported quarterly revenue of $263.3 million, a 63.7% decrease YoY.

Enphase’s revenue in the U.S. declined by roughly 34% compared to the fourth quarter (Q4) of 2023. The drop in revenue was attributed to seasonal factors and a continued softening in U.S. demand, as they persisted in reducing shipments to manage channel inventory.

Badri Kothandaraman, President & Chief Executive Officer, said, “In the U.S., we see stable share for our microinverters and batteries based on both internal and third-party data. There have been several changes in the market over the last year, including a shift away from loans and towards lease and PPAs. Our continued strong market share is a testament towards our installer relationships and the differentiated value proposition we provide them with our products.”

Conversely, the company’s revenue in Europe increased by approximately 70% compared to Q4 2023.

The operating income amounted to $39 million, excluding $60.8 million for stock-based compensation and $7.3 million for amortization of intangible assets and restructuring. This marks a fall of 83.3% on a YoY basis compared to $233.56 million.

Kothandaraman added, “We have been managing through a period of slowdown in demand. We believe Q1 was the bottom quarter. Europe has already begun to recover, and we expect the non-California states to bounce back in Q2.”

The company closed with $1.63 billion in cash, cash equivalents, and marketable securities, generating $49.2 million in cash flow from operations.

Capital expenditures for the same period amounted to $7.4 million, a decrease from $20.1 million in Q4 2023, primarily due to reduced U.S. manufacturing spending.

During this quarter, the company repurchased 332,735 shares of common stock at an average price of $126.21 per share, totaling around $42 million.

Enphase also began shipping its “IQ8P Microinverters,” which claim to offer peak output AC power of 480W. These target the small-commercial market in North America and grid-tied residential applications in several countries, including South Africa, Mexico, Brazil, India, Thailand, the Philippines, France, and Spain. Currently, IQ8 microinverters are shipped to 24 countries worldwide.

Enphase shipped 75.5 MWh of IQ Batteries, now in their third generation, to various regions, including the U.S., Puerto Rico, Australia, the United Kingdom, and Italy. Over 4,900 installers worldwide are certified to install their IQ Batteries.

Approximately 506,000 microinverters were shipped from their contract manufacturing facilities in the U.S. during Q1 2024, qualifying for 45X production tax credits.

Upon full ramp-up, the company anticipates achieving a global capacity of approximately 7.25 million microinverter units per quarter, with 5 million units in the U.S.

The company’s profit for the Q4 of the financial year 2023 fell 65% from the previous year as the Nasdaq-listed company faced slowing demand and high inventory levels at its distribution partners.

Enphase’s net income also fell by 19% in the third quarter, owing to adverse macroeconomic conditions. Specifically, revenue within the U.S. decreased by about 16%.

Last year, Mercom reported that inverter costs increased by over 10% as manufacturers struggled to meet demand due to the limited availability of semiconductors, crucial components for inverter manufacturing.