Enphase Energy Inc. reported first‑quarter 2026 revenue of $282.9 million, a 20.6% decline from the $343.3 million reported in Q4 2025 and a year‑over‑year drop from $356.1 million in Q1 2025. The revenue figure sits within the consensus range of $281.9 million to $283.4 million, meaning the company met or narrowly beat expectations. The decline is largely driven by a 48% sequential drop in U.S. sales and a 23% drop in U.S. revenue, while European revenue grew 36% quarter‑over‑quarter, offsetting some of the U.S. weakness.
Enphase’s non‑GAAP earnings per share were $0.47, beating the consensus estimate of $0.43–$0.44 by $0.03–$0.04. The beat is attributed to disciplined cost management and a higher battery attach rate, which helped offset the revenue decline. Management noted that operating expenses fell to $77 million from $78.8 million in Q4 2025, a modest decrease that contributed to the earnings beat.
The company’s non‑GAAP gross margin contracted to 43.9% from 46.1% in Q4 2025 and 48.9% in Q1 2025. Margin compression is largely due to reciprocal tariffs and the sale of 2025 production tax credits, which reduced GAAP gross margin by 6.7 percentage points. "GAAP gross margin was negatively impacted by 6.7 percentage points from the sale of our 2025 PTC, which totaled $235 million and were sold at 93% of face value," said CFO Mandy Yang.
Battery shipments totaled 103.1 MWh, but the fact‑check does not confirm a 36% sequential decline. Management highlighted a 47% increase in battery attach rates, though the figure is not corroborated by external sources. The company shipped 1.41 million microinverters and generated free cash flow of $83 million.
Enphase guided for Q2 2026 revenue of $280–$310 million and operating expenses of $75–$79 million. "Our Q2 revenue guidance is $280 million to $310 million, including approximately $85 million of safe harbor revenue," said CEO Badri Kothandaraman. Management also noted that Q2 sell‑through expectations are roughly 10%–15% below their prior view, citing unfavorable weather conditions and TPO financing challenges. The guidance signals a stabilization after the Q1 headwinds.
Market reaction was muted, with shares falling 4.5% in after‑market trading, 10% overnight, and 8.6% pre‑market. Investors focused on declining margins, weaker U.S. demand, and tariff‑driven pressure, despite the EPS beat. The company’s outlook remains cautious, with management emphasizing the need to navigate the post‑25D tax‑credit cycle and intensifying competition in Europe.
"We reported quarterly revenue of $282.9 million, shipped 1.41 million microinverters and 103 megawatt hours of batteries and generated free cash flow of $83 million," said CEO Badri Kothandaraman. "Our U.S. commercial microinverter sales more than doubled in Q1 as compared to Q4, driven by positive market reception for IQ9 microinverters." He added, "Competition remains intense across Europe, particularly from low-cost string inverter and battery providers." Kothandaraman also announced the development of an IQ solid‑state transformer for AI data centers, stating, "We are excited to announce today the development of our IQ solid‑state transformer product for AI data centers."
"Since we exited the channel with a high inventory in Q1, we are undershipping approximately $25 million compared to the real demand."
"Our Q1 sell‑through results and Q2 sell‑through expectations are roughly 10% to 15% below our prior view, citing unfavorable weather conditions and TPO financing challenges."
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