Enphase Energy (ENPH) Q1 2021 earnings summary

Executive summary

• Q1 revenue was $301.8 million, up 14% QoQ; shipments totaled ~830 MW DC, or 2,452,765 microinverters.

• Strong worldwide solar and storage demand drove record quarterly revenue in the U.S., Europe, and Australia, despite normal Q1 seasonality.

• Acquired Sofdesk and DIN Engineering Services’ Solar Design Services business to expand digital tools and installer services.

Financial highlights

• Revenue was $301.8 million versus $264.8 million in Q4 2020 and $205.5 million in Q1 2020; Q1 2020 included ~$44.5 million of safe harbor revenue.

• GAAP gross margin was 40.7%; non-GAAP gross margin was 41.1%, up from 40.2% in Q4, driven by pricing discipline and cost management.

• GAAP operating income was $61.4 million; non-GAAP operating income was $80.2 million. Non-GAAP operating expenses rose to $43.7 million from $34.2 million QoQ.

• GAAP net income was $31.7 million, including a $56.4 million non-cash loss on partial convertible-note settlements; non-GAAP net income was $78.7 million.

• GAAP diluted EPS was $0.22; non-GAAP diluted EPS was $0.56.

Outlook and guidance

• Q2 2021 revenue guidance: $300.0 million to $320.0 million.

• Q2 GAAP gross margin guidance: 37.0%–40.0%; non-GAAP: 38.0%–41.0%, excluding stock-based compensation.

• Q2 GAAP operating expenses: $70.0 million–$73.0 million, including $17.0 million for stock compensation and acquisition costs/amortization; non-GAAP: $53.0 million–$56.0 million, excluding those items.

• Non-GAAP expense guidance includes increased investment in products, software, and marketing, plus a $3.5 million accrual for acquisition deferred consideration; guidance includes both acquisitions for the full quarter.