Enphase Energy (ENPH) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $303.5 million, up 15% sequentially but down 57% year-over-year, with 1.4 million microinverters and 120.2 MWh of batteries shipped; U.S. revenue grew 32% sequentially while Europe was flat.

• Net income for Q2 2024 was $10.8 million, down from $157.2 million in Q2 2023, reflecting lower sales and higher fixed costs as a percentage of revenue.

• Free cash flow was $117.4 million, and cash, equivalents, and marketable securities totaled $1.65 billion at quarter end.

• Battery business showed strong growth, with shipments rising from 75.5 MWh in Q1 to 120.2 MWh in Q2, and guidance of 160–180 MWh for Q3.

• The company implemented a restructuring plan to align costs with market conditions, incurring $1.2 million in Q2 restructuring charges.

Financial highlights

• GAAP gross margin was 45.2% (down 0.3 points year-over-year); non-GAAP gross margin was 47.1% with $18.4 million IRA benefit.

• GAAP operating income was $1.8 million; non-GAAP operating income was $61.1 million.

• GAAP net income was $10.8 million ($0.08 EPS); non-GAAP net income was $58.8 million ($0.43 EPS).

• Cash flow from operations was $127.1 million; free cash flow was $117.4 million; capex was $9.6 million.

• Repurchased 891,896 shares for $99.9 million; $648.1 million remains authorized.

Outlook and guidance

• Q3 2024 revenue guidance: $370–$410 million, with 160–180 MWh of battery shipments.

• GAAP gross margin expected at 45%–48%; non-GAAP at 47%–50% with IRA benefit, 39%–42% without.

• Net IRA benefit for Q3 expected at $30–33 million on 1.1 million U.S.-made microinverter shipments.

• GAAP operating expenses forecasted at $138–$142 million; non-GAAP at $79–$83 million.

• Management expects continued headwinds from high interest rates and policy uncertainty, with restructuring to continue in H2 2024.