Enphase Energy (ENPH) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was $356.1 million, up 35% year-over-year but down from $382.7 million in Q4 2024, with 1.53 million microinverters and 170.1 MWh of batteries shipped.

• Net income was $29.7 million, reversing a net loss of $16.1 million in Q1 2024, with GAAP EPS of $0.22 and non-GAAP EPS of $0.68.

• U.S. revenue comprised 74% of total, declining 13% sequentially due to seasonality and soft demand, while Europe grew 7% on battery sales and new product launches.

• Gross margin was 48.9% non-GAAP (with IRA benefit), 38.3% non-GAAP (without IRA), and 47.2% GAAP, up from 43.9% year-over-year.

• Channel inventory for batteries normalized, but microinverter inventory was slightly elevated due to lower sell-through.

Financial highlights

• Q1 non-GAAP operating income was $94.6 million; GAAP operating income was $31.9 million.

• Q1 non-GAAP net income was $89.2 million; GAAP net income was $29.7 million.

• Free cash flow was $33.8 million; cash, cash equivalents, restricted cash, and marketable securities totaled $1.53 billion at quarter end.

• Share repurchases: 1.59 million shares for $100 million; $298.7 million remains authorized.

• Capital expenditures were $14.6 million in Q1 2025.

Outlook and guidance

• Q2 2025 revenue expected between $340–$380 million, including $40 million in safe harbor revenue and 160–180 MWh of battery shipments.

• Q2 GAAP gross margin expected at 42–45%, non-GAAP at 44–47% (with IRA benefit), and 35–38% (without IRA benefit), including 2% tariff impact.

• Net IRA benefit for Q2 projected at $30–33 million on 1 million U.S.-made microinverters.

• Non-GAAP operating expenses for Q2 expected at $78–82 million.

• 2025 tax rate expected at 21–23% GAAP, 15–17% non-GAAP.