Enphase Energy (ENPH) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue was $363.2 million, up 20% year-over-year, with 1.53 million microinverters and 190.9 MWh of batteries shipped; U.S. revenue grew 3% sequentially, while international revenue rose 11% over Q1, but European demand softened.

• Gross margin improved to 46.9% (GAAP), aided by U.S. manufacturing tax credits, with non-GAAP gross margin at 48.6% (with IRA benefit); operating income was $37 million (GAAP), and net income reached $37.1 million.

• Free cash flow was $18.4 million, with cash, cash equivalents, and marketable securities totaling $1.53 billion at quarter end.

• Customer service NPS improved to 79% in Q2 from 77% in Q1, with reduced call wait times.

• Launched new products, including IQ Battery 10C, IQ Balcony Solar System, and expanded EV charger offerings in multiple regions.

Financial highlights

• Q2 2025 net revenues: $363.2 million (up 20% year-over-year); gross margin: 46.9% (GAAP), 48.6% (non-GAAP, with IRA benefit); net income: $37.1 million (GAAP), $89.9 million (non-GAAP); diluted EPS: $0.28 (GAAP), $0.69 (non-GAAP).

• Operating expenses for Q2 2025: $133.5 million (GAAP), $77.8 million (non-GAAP), including $49.5 million in stock-based compensation.

• Free cash flow was $18.4 million; capital expenditures were $8.2 million.

• Cash, cash equivalents, and marketable securities as of June 30, 2025: $1.53 billion.

• Repurchased 702,948 shares for $30 million in Q2 2025; $268.7 million remains under the repurchase program.

Outlook and guidance

• Q3 2025 revenue expected between $330 million and $370 million, with 190–210 MWh of IQ battery shipments.

• GAAP gross margin guidance: 41–44% (including 3–5% tariff impact); non-GAAP gross margin: 43–46% with IRA benefit, 33–36% before IRA benefit.

• Net IRA benefit expected between $34–38 million in Q3; 1.2 million U.S.-made microinverter shipments anticipated.

• Non-GAAP operating expenses projected at $78–82 million for Q3 2025.

• 2025 tax rate expected at 19–21% GAAP and 15–17% non-GAAP.