Enphase Energy Reports Financial Results for the First Quarter of 2022

April 26, 2022 at 4:05 PM EDT

FREMONT, Calif., April 26, 2022 (GLOBE NEWSWIRE) -- Enphase Energy, Inc. (NASDAQ: ENPH), a global energy technology company and the world’s leading supplier of microinverter-based solar and battery systems, announced today financial results for the first quarter of 2022, which included the summary below from its President and CEO, Badri Kothandaraman.

We reported record quarterly revenue of $441.3 million in the first quarter of 2022, along with 41.0% for non-GAAP gross margin. We shipped approximately 2,838,693 microinverters, or 1,029 megawatts DC, and 120.4 megawatt hours of Enphase IQ™ Batteries.

Financial highlights for the first quarter of 2022 are listed below.

  • Record quarterly revenue of $441.3 million
  • GAAP gross margin of 40.1%; non-GAAP gross margin of 41.0%
  • GAAP operating income of $61.8 million; non-GAAP operating income of $114.5 million
  • GAAP net income of $51.8 million; non-GAAP net income of $109.7 million
  • GAAP diluted earnings per share of $0.37; non-GAAP diluted earnings per share of $0.79
  • Cash flow from operations of $102.4 million
  • Ending cash, cash equivalents, and marketable securities balance of $1.1 billion

Our revenue and earnings for the first quarter of 2022 are provided below, compared with those of the prior quarter and the year ago quarter:

(In thousands, except per share data and percentages)

  GAAP   Non-GAAP
  Q1 2022   Q4 2021   Q1 2021   Q1 2022   Q4 2021   Q1 2021
Revenue $ 441,292     $ 412,719     $ 301,754     $ 441,292     $ 412,719     $ 301,754  
Gross margin   40.1 %     39.6 %     40.7 %     41.0 %     40.2 %     41.1 %
Operating expenses $ 115,149     $ 105,619     $ 61,563     $ 66,250     $ 68,182     $ 43,699  
Operating income $ 61,824     $ 57,695     $ 61,386     $ 114,529     $ 97,725     $ 80,232  
Net income $ 51,821     $ 52,591     $ 31,698     $ 109,670     $ 102,779     $ 78,702  
Basic EPS $ 0.39     $ 0.39     $ 0.24     $ 0.82     $ 0.76     $ 0.60  
Diluted EPS $ 0.37     $ 0.37     $ 0.22     $ 0.79     $ 0.73     $ 0.56  

Our total revenue increased 7% compared to the fourth quarter of 2021. Our microinverter unit shipments were down 6%, compared to the fourth quarter of 2021. Our IQ Battery shipments were up 20%, compared to the fourth quarter of 2021. Our non-GAAP gross margin was 41.0% in the first quarter of 2022, compared to 40.2% in the fourth quarter of 2021, driven by reduced expedite costs.

Non-GAAP operating expenses were $66.3 million in the first quarter of 2022, compared to $68.2 million in the fourth quarter of 2021, primarily due to lower marketing spend. Non-GAAP operating income was $114.5 million in the first quarter of 2022, compared to $97.7 million in the fourth quarter of 2021.

We exited the first quarter of 2022 with $1.1 billion in cash, cash equivalents, and marketable securities and generated $102.4 million in cash flow from operations in the first quarter of 2022. Capital expenditures were $12.4 million in the first quarter of 2022, compared to $13.2 million in the fourth quarter of 2021.

Shipments of IQ8™ Microinverters continued to ramp strongly in the first quarter of 2022. IQ8 Microinverters can form a microgrid during a power outage using only sunlight, providing backup power even without a battery. IQ8’s grid-forming technology eliminates traditional ratio requirements between solar system size and battery size. And, with our Sunlight Jump Start™ feature, IQ8 Microinverters can restart a home energy system using sunlight only after prolonged grid outages that may result in a fully depleted battery.

Shipments of IQ™ Batteries increased to 120.4 megawatt hours in the first quarter of 2022, compared to 100.2 megawatt hours in the fourth quarter of 2021. We shipped batteries to the U.S., Germany, and Belgium during the first quarter, and continued to make several updates to improve the installer and homeowner experience. We now have more than 1,300 installers in the U.S. that are certified to install our batteries.

In March of 2022, we acquired SolarLeadFactory LLC, which provides high-quality leads to solar installers in the U.S. Our objective is to substantially increase lead volumes and improve conversion rates to drive down the customer acquisition costs for our installers. This was our fourth acquisition to strengthen the installer platform, with the prior acquisitions focused on solar design and proposal software, permitting services, and operations and maintenance (O&M) software. We aim to create an end-to-end installer platform to simplify installers’ lives by reducing soft costs and manual processes.

BUSINESS HIGHLIGHTS

On Feb. 28, 2022, Enphase Energy announced steady growth in its Enphase Installer Network (EIN) in Victoria, Australia due to market-leading partner support, state-run initiatives, and growing homeowner demand for safer, smarter, and more reliable solar systems.

On March 21, 2022, Enphase Energy announced that installers in Spain have seen an increase in deployments of residential solar energy systems, powered by IQ7+™ and IQ7A™ Microinverters. Residential solar deployments in Spain are growing exponentially as favorable regulatory developments and high electricity prices are motivating homeowners to make the switch to a more sustainable clean energy generation.

On March 28, 2022, Enphase Energy announced that Vermont-based utility Green Mountain Power (GMP) will offer Enphase® Energy Systems to its customers in a cutting-edge battery lease grid services pilot program. Homeowners can also enroll in GMP’s “Bring Your Own Device” grid services program, which enables customers with their own Enphase Energy Systems to participate and earn an up-front incentive.

On April 4, 2022, Enphase Energy announced it has expanded its nearly 15-year relationship with global diversified manufacturer Flex®. Starting in the first quarter of 2023, Flex’s factory in Timisoara, Romania will begin manufacturing Enphase microinverters for the European market, addressing the region’s rapid growth and demand for residential solar due to rising energy prices and the increased adoption of electric vehicles and heat pump technology.

On April 11, 2022, Enphase Energy announced the launch of its EIN in France. The EIN is a network of highly experienced installers that have a proven track-record of delivering exceptional homeowner experiences using Enphase products.

Enphase Energy recently announced that installers in South Carolina, Iowa, Nevada, Oklahoma, Wisconsin, Oregon, New Jersey, Ohio, and Utah have seen growing deployments of the Enphase Energy System powered by IQ® Microinverters and IQ Batteries.

SECOND QUARTER 2022 FINANCIAL OUTLOOK

For the second quarter of 2022, Enphase Energy estimates both GAAP and non-GAAP financial results as follows:

  • Revenue to be within a range of $490 million to $520 million, which includes shipments of 130 to 140 megawatt hours of Enphase IQ™ Batteries
  • GAAP gross margin to be within a range of 37.0% to 40.0%; non-GAAP gross margin to be within a range of 38.0% to 41.0%, excluding stock-based compensation expenses and acquisition related amortization
  • GAAP operating expenses to be within a range of $127.5 million to $130.5 million, including $57.0 million estimated for stock-based compensation expenses and acquisition related costs and amortization
  • Non-GAAP operating expenses to be within a range of $70.5 million to $73.5 million, excluding $57.0 million estimated for stock-based compensation expenses and acquisition related costs and amortization

Follow Enphase Online

Use of Non-GAAP Financial Measures

The Company has presented certain non-GAAP financial measures in this press release. To view a description of non-GAAP financial measures used and the non-GAAP reconciliation schedule for the periods presented, click here.

Conference Call Information

Enphase Energy will host a conference call for analysts and investors to discuss its first quarter 2022 results and second quarter 2022 business outlook today at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). The call is open to the public by dialing (877) 644-1284; participant passcode 9774335. A live webcast of the conference call will also be accessible from the “Investor Relations” section of the Company’s website at investor.enphase.com. Following the webcast, an archived version will be available on the website for approximately one year. In addition, an audio replay of the conference call will be available by calling (855) 859-2056; participant passcode 9774335, beginning approximately one hour after the call.

Forward-Looking Statements

This press release contains forward-looking statements, including statements related to Enphase Energy’s expectations as to its second quarter of 2022 financial outlook and expense levels; the capabilities, advantages, features and performance of its technology and products, including the ability to simplify and reduce installation time; its business strategies and anticipated demand for and availability of its products and services; the impact to its installation partners and homeowners; the capabilities and performance of its partners; and the manufacture of microinverters in European market to address rapid growth. These forward-looking statements are based on Enphase Energy’s current expectations and inherently involve significant risks and uncertainties. Enphase Energy’s actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of certain risks and uncertainties including those risks described in more detail in its most recent Annual Report on Form 10-K for the year ended December 31, 2021 and other documents on file with the SEC from time to time and available on the SEC’s website at www.sec.gov. Enphase Energy undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events or changes in its expectations, except as required by law.

A copy of this press release can be found on the investor relations page of Enphase Energy’s website at investor.enphase.com.

About Enphase Energy, Inc.

Enphase Energy, a global energy technology company based in Fremont, CA, is the world's leading supplier of microinverter-based solar and battery systems that enable people to harness the sun to make, use, save, and sell their own power—and control it all with a smart mobile app. The company revolutionized the solar industry with its microinverter-based technology and builds all-in-one solar, battery, and software solutions. Enphase has shipped more than 45 million microinverters, and over 2.0 million Enphase-based systems have been deployed in more than 135 countries. For more information, visit www.enphase.com.

© 2022 Enphase Energy, Inc. All rights reserved. Enphase Energy, Enphase, the “e” logo, IQ, IQ7+, IQ7A, IQ8, Sunlight Jump Start, and certain other names and marks are trademarks of Enphase Energy, Inc. Other names are for informational purposes and may be trademarks of their respective owners.

Contact:
Karen Sagot
Enphase Energy, Inc.
Investor Relations
ir@enphaseenergy.com

ENPHASE ENERGY, INC. 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
(In thousands, except per share data) 
(Unaudited)

  Three Months Ended
  March 31,
2022
  December 31,
2021
  March 31,
2021
Net revenues $ 441,292     $ 412,719     $ 301,754  
Cost of revenues   264,319       249,405       178,805  
Gross profit   176,973       163,314       122,949  
Operating expenses:          
Research and development   35,719       31,589       21,818  
Sales and marketing   41,344       44,470       19,622  
General and administrative   38,086       29,560       20,123  
Total operating expenses   115,149       105,619       61,563  
Income from operations   61,824       57,695       61,386  
Other income (expense), net          
Interest income   460       414       73  
Interest expense   (2,736 )     (12,689 )     (7,329 )
Other income (expense), net   (2,141 )     5,236       573  
Loss on partial settlement of convertible notes (1)         (115 )     (56,369 )
Total other expense, net   (4,417 )     (7,154 )     (63,052 )
Income before income taxes   57,407       50,541       (1,666 )
Income tax benefit (provision)   (5,586 )     2,050       33,364  
Net income $ 51,821     $ 52,591     $ 31,698  
Net income per share:          
Basic $ 0.39     $ 0.39     $ 0.24  
Diluted $ 0.37     $ 0.37     $ 0.22  
Shares used in per share calculation:          
Basic   134,327       134,920       131,303  
Diluted   144,617       141,480       146,442  
                       

(1) Loss on partial settlement of convertible notes of $0.1 million for the three months ended December 31, 2021, primarily relates to the non-cash loss on settlement of $1.1 million remaining aggregate principal amount of the Notes due 2024. Loss on partial settlement of convertible notes of $56.4 million for the three months ended March 31, 2021 primarily relates to the $9.5 million non-cash loss on partial settlement of $87.1 million aggregate principal amount of the Notes due 2024, $9.4 million non-cash loss on partial settlement of $217.7 million aggregate principal amount of the Notes due 2025 and $37.5 million non-cash inducement loss incurred on repurchase of Notes due 2025.

ENPHASE ENERGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)
(Unaudited)

  March 31,
2022
  December 31,
2021
ASSETS      
Current assets:      
Cash and cash equivalents $ 251,850   $ 119,316
Marketable securities   811,621     897,335
Accounts receivable, net   358,310     333,626
Inventory   96,436     74,400
Prepaid expenses and other assets   40,566     37,784
Total current assets   1,558,783     1,462,461
Property and equipment, net   85,073     82,167
Operating lease, right of use asset, net   19,442     14,420
Intangible assets, net   103,173     97,758
Goodwill   195,637     181,254
Other assets   120,878     118,726
Deferred tax assets, net   180,291     122,470
Total assets $ 2,263,277   $ 2,079,256
LIABILITIES AND STOCKHOLDERS’ EQUITY      
Current liabilities:      
Accounts payable $ 104,738   $ 113,767
Accrued liabilities   169,146     157,912
Deferred revenues, current   68,693     62,670
Warranty obligations, current   23,960     19,395
Debt, current   87,219     86,052
Total current liabilities   453,756     439,796
Long-term liabilities:      
Deferred revenues, noncurrent   202,711     187,186
Warranty obligations, noncurrent   59,619     53,982
Other liabilities   19,259     16,530
Debt, noncurrent   1,196,950     951,594
Total liabilities   1,932,295     1,649,088
Total stockholders’ equity   330,982     430,168
Total liabilities and stockholders’ equity $ 2,263,277   $ 2,079,256
           

ENPHASE ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)
(Unaudited)

  Three Months Ended
  March 31,
2022
  December 31,
2021
  March 31,
2021
Cash flows from operating activities:          
Net income $ 51,821     $ 52,591     $ 31,698  
Adjustments to reconcile net income to net cash provided by operating activities:          
Depreciation and amortization   15,558       10,972       5,558  
Provision for doubtful accounts   147       27       14  
Loss on partial settlement of convertibles notes         115       56,369  
Deemed repayment of convertible notes attributable to accreted debt discount         (133 )     (15,579 )
Non-cash interest expense   1,979       12,494       7,156  
Gain on settlement of debt securities         (6,569 )      
Change in fair value of debt securities   1,116       111       (1,437 )
Stock-based compensation   47,797       37,176       14,844  
Deferred income taxes   3,165       (2,451 )     (35,367 )
Changes in operating assets and liabilities:          
Accounts receivable   (24,224 )     (58,091 )     (53,719 )
Inventory   (22,036 )     (5,618 )     6,888  
Prepaid expenses and other assets   (3,042 )     (8,123 )     (5,040 )
Accounts payable, accrued and other liabilities   (1,805 )     45,396       36,376  
Warranty obligations   9,906       5,417       8,640  
Deferred revenues   22,061       13,859       19,440  
Net cash provided by operating activities   102,443       97,173       75,841  
Cash flows from investing activities:          
Purchases of property and equipment   (12,375 )     (13,208 )     (9,940 )
Purchases of marketable securities         (389,466 )      
Maturities of marketable securities   76,735              
Investments in private companies               (25,000 )
Settlement of investment in private companies         26,569        
Business acquisitions, net of cash acquired   (24,625 )     (180,413 )     (55,239 )
Net cash provided by (used in) investing activities   39,735       (556,518 )     (90,179 )
Cash flows from financing activities:          
Issuance of convertible notes, net of issuance costs               1,189,388  
Purchase of convertible note hedges               (286,235 )
Sale of warrants               220,800  
Principal payments and financing fees on debt         (272 )     (1,078 )
Partial repurchase of convertible notes         (935 )     (289,233 )
Repurchase of common stock         (300,000 )      
Proceeds from exercise of equity awards and employee stock purchase plan   404       3,800       214  
Payment of withholding taxes related to net share settlement of equity awards   (9,344 )     (8,825 )     (9,185 )
Net cash provided by (used in) financing activities   (8,940 )     (306,232 )     824,671  
Effect of exchange rate changes on cash and cash equivalents   (704 )     (653 )     (702 )
Net increase (decrease) in cash and cash equivalents   132,534       (766,230 )     809,631  
Cash and cash equivalents—Beginning of period   119,316       885,546       679,379  
Cash and cash equivalents —End of period $ 251,850     $ 119,316     $ 1,489,010  
                       

ENPHASE ENERGY, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data and percentages)
(Unaudited)

  Three Months Ended
  March 31,
2022
  December 31,
2021
  March 31,
2021
Gross profit (GAAP) $ 176,973     $ 163,314     $ 122,949  
Stock-based compensation   2,507       2,409       982  
Acquisition related amortization   1,299       184        
Gross profit (Non-GAAP) $ 180,779     $ 165,907     $ 123,931  
           
Gross margin (GAAP)   40.1 %     39.6 %     40.7 %
Stock-based compensation   0.6 %     0.6 %     0.4 %
Acquisition related amortization   0.3 %     %     %
Gross margin (Non-GAAP)   41.0 %     40.2 %     41.1 %
           
Operating expenses (GAAP) $ 115,149     $ 105,619     $ 61,563  
Stock-based compensation (1)   (45,290 )     (34,767 )     (13,862 )
Acquisition related expenses and amortization   (3,609 )     (2,670 )     (4,002 )
Operating expenses (Non-GAAP) $ 66,250     $ 68,182     $ 43,699  
           
(1)Includes stock-based compensation as follows:          
Research and development $ 13,729     $ 11,712     $ 5,749  
Sales and marketing   13,057       13,090       3,537  
General and administrative   18,504       9,965       4,576  
Total $ 45,290     $ 34,767     $ 13,862  
           
Income from operations (GAAP) $ 61,824     $ 57,695     $ 61,386  
Stock-based compensation   47,797       37,176       14,844  
Acquisition related expenses and amortization   4,908       2,854       4,002  
Income from operations (Non-GAAP) $ 114,529     $ 97,725     $ 80,232  
           
Net income (GAAP) $ 51,821     $ 52,591     $ 31,698  
Stock-based compensation   47,797       37,176       14,844  
Acquisition related expenses and amortization   4,908       2,854       4,002  
Non-cash interest expense   1,979       12,494       7,156  
Loss on partial settlement of convertible notes         115       56,369  
Non-GAAP income tax adjustment   3,165       (2,451 )     (35,367 )
Net income (Non-GAAP) $ 109,670     $ 102,779     $ 78,702  
           
Net income per share, basic (GAAP) $ 0.39     $ 0.39     $ 0.24  
Stock-based compensation   0.36       0.28       0.11  
Acquisition related expenses and amortization   0.04       0.02       0.03  
Non-cash interest expense   0.01       0.09       0.05  
Loss on partial settlement of convertible notes               0.43  
Non-GAAP income tax adjustment   0.02       (0.02 )     (0.26 )
Net income per share, basic (Non-GAAP) $ 0.82     $ 0.76     $ 0.60  
           
Shares used in basic per share calculation GAAP and Non-GAAP   134,327       134,920       131,303  
           
Net income per share, diluted (GAAP) $ 0.37     $ 0.37     $ 0.22  
Stock-based compensation   0.34       0.27       0.11  
Acquisition related expenses and amortization   0.04       0.02       0.03  
Non-cash interest expense   0.02       0.09       0.05  
Loss on partial settlement of convertible notes               0.40  
Non-GAAP income tax adjustment   0.02       (0.02 )     (0.25 )
Net income per share, diluted (Non-GAAP) (2) $ 0.79     $ 0.73     $ 0.56  
           
Shares used in diluted per share calculation GAAP   144,617       141,480       146,442  
Shares used in diluted per share calculation Non-GAAP (3)   139,289       140,680       141,746  
           
Net cash provided by operating activities (GAAP) $ 102,443     $ 97,173     $ 75,841  
Purchases of property and equipment   (12,375 )     (13,208 )     (9,940 )
Deemed repayment of convertible notes due 2024 and notes due 2025 attributable to accreted debt discount         133       15,579  
Free cash flow (Non-GAAP) $ 90,068     $ 84,098     $ 81,480  
                       

(2) Calculation of non-GAAP diluted net income per share for the three months ended March 31, 2022, December 31, 2021 and March 31, 2021, excludes convertible notes due 2023 interest expense, net of tax of less than $0.1 million in each period from non-GAAP net income.

(3) Effect of dilutive in-the-money portion of convertible senior notes and warrants are included in the GAAP weighted-average diluted shares in periods where the Company has GAAP net income. The Company excluded the in-the-money portion of convertible notes due 2024 totaling 38 thousand shares and 2,984 thousand shares in the three months ended December 31, 2021 and March 31, 2021, respectively, from non-GAAP weighted-average diluted shares as the Company entered into convertible note hedge transactions that reduce potential dilution to the Company’s common stock upon any conversion of the notes due 2024. The Company excluded the in-the-money portion of convertible notes due 2025 totaling 1,253 thousand shares, 763 thousand shares and 1,713 thousand shares in the three months ended March 31, 2022, December 31, 2021 and March 31, 2021, respectively, from non-GAAP weighted-average diluted shares as the Company entered into convertible note hedge transactions that reduce potential dilution to the Company’s common stock upon any conversion of the notes due 2025.


Primary Logo

Source: Enphase Energy, Inc.