Press Release
Enphase Energy Reports Financial Results for the Third Quarter of 2023
We reported quarterly revenue of
Financial highlights for the third quarter of 2023 are listed below:
- Quarterly revenue of
$551 .1 million - GAAP gross margin of 47.5%; non-GAAP gross margin of 48.4%, inclusive of net
IRA benefit of 2.6% - GAAP operating income of
$118 .0 million; non-GAAP operating income of$167 .6 million - GAAP net income of
$114 .0 million; non-GAAP net income of$141 .8 million - GAAP diluted earnings per share of
$0.80 ; non-GAAP diluted earnings per share of$1.02 - Free cash flow of
$122 .0 million; ending cash, cash equivalents, and marketable securities of$1 .78 billion
Our revenue and earnings for the third quarter of 2023 are provided below, compared with the prior quarter:
(In thousands, except per share and percentage data)
GAAP | Non-GAAP | ||||||||||||||||||||||
Q3 2023 | Q2 2023 | Q3 2022 | Q3 2023 | Q2 2023 | Q3 2022 | ||||||||||||||||||
Revenue | $ | 551,082 | $ | 711,118 | $ | 634,713 | $ | 551,082 | $ | 711,118 | $ | 634,713 | |||||||||||
Gross margin | 47.5 | % | 45.5 | % | 42.2 | % | 48.4 | % | 46.2 | % | 42.9 | % | |||||||||||
Operating expenses | $ | 144,024 | $ | 153,022 | $ | 132,475 | $ | 99,027 | $ | 98,162 | $ | 78,587 | |||||||||||
Operating income | $ | 117,989 | $ | 170,320 | $ | 135,441 | $ | 167,593 | $ | 230,468 | $ | 193,962 | |||||||||||
Net income | $ | 113,953 | $ | 157,191 | $ | 114,812 | $ | 141,849 | $ | 205,599 | $ | 175,513 | |||||||||||
Basic EPS | $ | 0.84 | $ | 1.15 | $ | 0.85 | $ | 1.04 | $ | 1.51 | $ | 1.29 | |||||||||||
Diluted EPS | $ | 0.80 | $ | 1.09 | $ | 0.80 | $ | 1.02 | $ | 1.47 | $ | 1.25 |
Total revenue for the third quarter of 2023 was
Our non-GAAP gross margin was 48.4% in the third quarter of 2023, compared to 46.2% in the second quarter of 2023, driven by increased net
We exited the third quarter of 2023 with
In
Our capital expenditures were
IQ8™ Microinverters constituted approximately 86% of all our microinverter shipments during the third quarter of 2023. We recently started shipping IQ8 Microinverters into the
Our IQ Battery shipments increased to 86.2 megawatt hours in the third quarter of 2023, from 82.3 megawatt hours in the second quarter of 2023. We recently introduced IQ Batteries into
We began shipments of our microinverters in the third quarter of 2023 from our contract manufacturer
Solargraf℠, our cloud-based design and proposal software platform, now provides NEM 3.0 functionality for solar and battery systems in
BUSINESS HIGHLIGHTS
On
On
On
On
On
On
On
On
Enphase Energy recently announced the growing deployments of Enphase systems powered by IQ Microinverters in
FOURTH QUARTER 2023 FINANCIAL OUTLOOK
For the fourth quarter of 2023, Enphase Energy estimates both GAAP and non-GAAP financial results as follows:
- Revenue to be within a range of
$300.0 million to$350.0 million , which includes shipments of 80 to 100 megawatt hours of IQ Batteries - GAAP gross margin to be within a range of 46.0% to 49.0% with net
IRA benefit and 38.0% to 41.0% before netIRA benefit - Non-GAAP gross margin to be within a range of 48.0% to 51.0% with net
IRA benefit and 40.0% to 43.0% before netIRA benefit. Non-GAAP gross margin excludes stock-based compensation expense and acquisition related amortization - Net
IRA benefit to be within a range of$26.0 to$28.0 million based on estimated shipments of one million units ofU.S. manufactured microinverters - GAAP operating expenses to be within a range of
$142.0 million to$146.0 million - Non-GAAP operating expenses to be within a range of
$85.0 million to$89.0 million , excluding$57.0 million estimated for stock-based compensation expense and acquisition related expenses and amortization - GAAP and non-GAAP annualized effective tax rate with
IRA benefit is expected to be within a range of 21.0% to 23.0%
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Use of non-GAAP Financial Measures
Enphase Energy has presented certain non-GAAP financial measures in this press release. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either exclude or include amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in
These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same captions and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies. In addition, these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Enphase Energy’s results of operations as determined in accordance with GAAP. As such, these non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Enphase Energy uses these non-GAAP financial measures to analyze its operating performance and future prospects, develop internal budgets and financial goals, and to facilitate period-to-period comparisons. Enphase Energy believes that these non-GAAP financial measures reflect an additional way of viewing aspects of its operations that, when viewed with its GAAP results, provide a more complete understanding of factors and trends affecting its business.
As presented in the “Reconciliation of Non-GAAP Financial Measures” tables below, each of the non-GAAP financial measures excludes one or more of the following items for purposes of calculating non-GAAP financial measures to facilitate an evaluation of Enphase Energy’s current operating performance and a comparison to its past operating performance:
Stock-based compensation expense. Enphase Energy excludes stock-based compensation expense from its non-GAAP measures primarily because they are non-cash in nature. Moreover, the impact of this expense is significantly affected by Enphase Energy’s stock price at the time of an award over which management has limited to no control.
Acquisition related expenses and amortization. This item represents expenses incurred related to Enphase Energy’s business acquisitions, which are non-recurring in nature, and amortization of acquired intangible assets, which is a non-cash expense. Acquisition related expenses and amortization of acquired intangible assets are not reflective of Enphase Energy’s ongoing financial performance.
Restructuring and asset impairment charges. Enphase Energy excludes restructuring and asset impairment related charges due to the nature of the expenses being unplanned and arising outside the ordinary course of continuing operations. These costs primarily consist of fees paid for cash-based severance costs and asset write-downs of property and equipment, and other contract termination costs resulting from restructuring initiatives.
Non-cash interest expense. This item consists primarily of amortization of debt issuance costs and accretion of debt discount because these expenses do not represent a cash outflow for Enphase Energy except in the period the financing was secured and such amortization expense is not reflective of Enphase Energy’s ongoing financial performance.
Non-GAAP income tax adjustment. This item represents the amount adjusted to Enphase Energy’s GAAP tax provision or benefit to report the non-GAAP tax amount based on cash tax expense and reserves for periods prior to 2023. Effective
Free cash flow. This item represents net cash flows from operating activities less purchases of property and equipment.
Conference Call Information
Enphase Energy will host a conference call for analysts and investors to discuss its third quarter 2023 results and fourth quarter 2023 business outlook today at
Forward-Looking Statements
This press release contains forward-looking statements, including statements related to Enphase Energy’s expectations as to its fourth quarter of 2023 financial outlook, including revenue, storage shipments, gross margin before and after net
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, a global energy technology company based in
© 2023
Contact:
Investor Relations
ir@enphaseenergy.com
ENPHASE ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended | Nine Months Ended | ||||||||||||||||||
2023 |
2023 |
2022 |
2023 |
2022 |
|||||||||||||||
Net revenues | $ | 551,082 | $ | 711,118 | $ | 634,713 | $ | 1,988,216 | $ | 1,606,201 | |||||||||
Cost of revenues | 289,069 | 387,776 | 366,797 | 1,076,490 | 942,307 | ||||||||||||||
Gross profit | 262,013 | 323,342 | 267,916 | 911,726 | 663,894 | ||||||||||||||
Operating expenses: | |||||||||||||||||||
Research and development | 54,873 | 60,043 | 44,188 | 172,045 | 119,163 | ||||||||||||||
Sales and marketing | 55,357 | 58,405 | 55,257 | 178,383 | 150,189 | ||||||||||||||
General and administrative | 33,794 | 34,397 | 32,436 | 104,456 | 102,647 | ||||||||||||||
Restructuring charges | — | 177 | 594 | 870 | 594 | ||||||||||||||
Total operating expenses | 144,024 | 153,022 | 132,475 | 455,754 | 372,593 | ||||||||||||||
Income from operations | 117,989 | 170,320 | 135,441 | 455,972 | 291,301 | ||||||||||||||
Other income (expense), net | |||||||||||||||||||
Interest income | 19,669 | 16,526 | 3,680 | 49,235 | 4,936 | ||||||||||||||
Interest expense | (2,196 | ) | (2,219 | ) | (2,255 | ) | (6,571 | ) | (7,159 | ) | |||||||||
Other income (expense), net | 1,883 | (33 | ) | (2,611 | ) | 2,276 | (5,208 | ) | |||||||||||
Total other income (expense), net | 19,356 | 14,274 | (1,186 | ) | 44,940 | (7,431 | ) | ||||||||||||
Income before income taxes | 137,345 | 184,594 | 134,255 | 500,912 | 283,870 | ||||||||||||||
Income tax provision | (23,392 | ) | (27,403 | ) | (19,443 | ) | (82,895 | ) | (40,261 | ) | |||||||||
Net income | $ | 113,953 | $ | 157,191 | $ | 114,812 | $ | 418,017 | $ | 243,609 | |||||||||
Net income per share: | |||||||||||||||||||
Basic | $ | 0.84 | $ | 1.15 | $ | 0.85 | $ | 3.06 | $ | 1.80 | |||||||||
Diluted | $ | 0.80 | $ | 1.09 | $ | 0.80 | $ | 2.92 | $ | 1.70 | |||||||||
Shares used in per share calculation: | |||||||||||||||||||
Basic | 136,165 | 136,607 | 135,633 | 136,491 | 135,056 | ||||||||||||||
Diluted | 143,863 | 145,098 | 145,962 | 145,081 | 144,058 |
ENPHASE ENERGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
2023 |
2022 |
||||
ASSETS | |||||
Current assets: | |||||
Cash and cash equivalents | $ | 290,075 | $ | 473,244 | |
Marketable securities | 1,493,809 | 1,139,599 | |||
Accounts receivable, net | 560,286 | 440,896 | |||
Inventory | 174,114 | 149,708 | |||
Prepaid expenses and other assets | 80,346 | 60,824 | |||
Total current assets | 2,598,630 | 2,264,271 | |||
Property and equipment, net | 173,005 | 111,367 | |||
Operating lease, right of use asset, net | 21,164 | 21,379 | |||
Intangible assets, net | 79,147 | 99,541 | |||
213,193 | 213,559 | ||||
Other assets | 215,275 | 169,291 | |||
Deferred tax assets, net | 253,528 | 204,872 | |||
Total assets | $ | 3,553,942 | $ | 3,084,280 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||
Current liabilities: | |||||
Accounts payable | $ | 90,116 | $ | 125,085 | |
Accrued liabilities | 434,825 | 295,939 | |||
Deferred revenues, current | 114,031 | 90,747 | |||
Warranty obligations, current | 40,750 | 35,556 | |||
Debt, current | 94,665 | 90,892 | |||
Total current liabilities | 774,387 | 638,219 | |||
Long-term liabilities: | |||||
Deferred revenues, non-current | 366,032 | 281,613 | |||
Warranty obligations, non-current | 148,116 | 95,890 | |||
Other liabilities | 53,762 | 43,520 | |||
Debt, non-current | 1,196,947 | 1,199,465 | |||
Total liabilities | 2,539,244 | 2,258,707 | |||
Total stockholders’ equity | 1,014,698 | 825,573 | |||
Total liabilities and stockholders’ equity | $ | 3,553,942 | $ | 3,084,280 |
ENPHASE ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended | Nine Months Ended | ||||||||||||||||||
2023 |
2023 |
2022 |
2023 |
2022 |
|||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||
Net income | $ | 113,953 | $ | 157,191 | $ | 114,812 | $ | 418,017 | $ | 243,609 | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||||
Depreciation and amortization | 19,448 | 17,828 | 14,664 | 53,867 | 42,766 | ||||||||||||||
Net amortization (accretion) of premium (discount) on marketable securities | 5,094 | (10,157 | ) | (612 | ) | (12,611 | ) | 2,091 | |||||||||||
Provision for doubtful accounts | 653 | 449 | (79 | ) | 1,282 | 52 | |||||||||||||
Asset impairment | 903 | — | — | 903 | 1,200 | ||||||||||||||
Non-cash interest expense | 2,114 | 2,106 | 2,065 | 6,254 | 6,090 | ||||||||||||||
Net gain from change in fair value of debt securities | (1,910 | ) | (1,754 | ) | (519 | ) | (5,408 | ) | (390 | ) | |||||||||
Stock-based compensation | 43,814 | 54,166 | 52,296 | 157,635 | 153,157 | ||||||||||||||
Deferred income taxes | (11,499 | ) | (10,615 | ) | 115 | (38,295 | ) | 15,732 | |||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||||
Accounts receivable | (34,752 | ) | (3,968 | ) | (46,226 | ) | (118,249 | ) | (18,680 | ) | |||||||||
Inventory | (8,003 | ) | (15,548 | ) | (16,185 | ) | (24,406 | ) | (72,051 | ) | |||||||||
Prepaid expenses and other assets | (15,383 | ) | (20,536 | ) | 526 | (57,376 | ) | (20,826 | ) | ||||||||||
Accounts payable, accrued and other liabilities | 9,903 | 24,685 | 32,060 | 117,128 | 42,288 | ||||||||||||||
Warranty obligations | 8,151 | 34,681 | 9,329 | 57,420 | 32,207 | ||||||||||||||
Deferred revenues | 13,369 | 40,715 | 25,764 | 105,169 | 63,858 | ||||||||||||||
Net cash provided by operating activities | 145,855 | 269,243 | 188,010 | 661,330 | 491,103 | ||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||
Purchases of property and equipment | (23,848 | ) | (44,002 | ) | (8,948 | ) | (90,326 | ) | (30,014 | ) | |||||||||
Purchases of marketable securities | (470,766 | ) | (577,521 | ) | (512,176 | ) | (1,743,674 | ) | (572,237 | ) | |||||||||
Maturities and sale of marketable securities | 494,804 | 557,471 | 184,123 | 1,406,608 | 377,156 | ||||||||||||||
Investments in private companies | (15,000 | ) | — | (1,000 | ) | (15,000 | ) | (1,000 | ) | ||||||||||
Business acquisitions, net of cash acquired | — | — | — | — | (27,680 | ) | |||||||||||||
Net cash provided by (used in) investing activities | (14,810 | ) | (64,052 | ) | (338,001 | ) | (442,392 | ) | (253,775 | ) | |||||||||
Cash flows from financing activities: | |||||||||||||||||||
Proceeds from exercise of equity awards and employee stock purchase plan | 719 | 556 | 693 | 1,315 | 5,280 | ||||||||||||||
Repurchase of common stock | (110,000 | ) | (200,000 | ) | — | (310,000 | ) | — | |||||||||||
Payment of withholding taxes related to net share settlement of equity awards | (8,465 | ) | (12,790 | ) | (4,589 | ) | (93,100 | ) | (19,396 | ) | |||||||||
Net cash used in financing activities | (117,746 | ) | (212,234 | ) | (3,896 | ) | (401,785 | ) | (14,116 | ) | |||||||||
Effect of exchange rate changes on cash and cash equivalents | (1,900 | ) | (326 | ) | (4,003 | ) | (322 | ) | (4,945 | ) | |||||||||
Net increase (decrease) in cash and cash equivalents | 11,399 | (7,369 | ) | (157,890 | ) | (183,169 | ) | 218,267 | |||||||||||
Cash and cash equivalents—Beginning of period | 278,676 | 286,045 | 495,473 | 473,244 | 119,316 | ||||||||||||||
Cash and cash equivalents —End of period | $ | 290,075 | $ | 278,676 | $ | 337,583 | $ | 290,075 | $ | 337,583 |
ENPHASE ENERGY, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data and percentages)
(Unaudited)
Three Months Ended | Nine Months Ended | ||||||||||||||||||
2023 |
2023 |
2022 |
2023 |
2022 |
|||||||||||||||
Gross profit (GAAP) | $ | 262,013 | $ | 323,342 | $ | 267,916 | $ | 911,726 | $ | 663,894 | |||||||||
Stock-based compensation | 2,708 | 3,398 | 3,188 | 9,775 | 8,826 | ||||||||||||||
Acquisition related amortization | 1,899 | 1,890 | 1,445 | 5,686 | 4,189 | ||||||||||||||
Gross profit (Non-GAAP) | $ | 266,620 | $ | 328,630 | $ | 272,549 | $ | 927,187 | $ | 676,909 | |||||||||
Gross margin (GAAP) | 47.5 | % | 45.5 | % | 42.2 | % | 45.9 | % | 41.3 | % | |||||||||
Stock-based compensation | 0.6 | 0.5 | 0.5 | 0.5 | 0.5 | ||||||||||||||
Acquisition related amortization | 0.3 | 0.2 | 0.2 | 0.2 | 0.3 | ||||||||||||||
Gross margin (Non-GAAP) | 48.4 | % | 46.2 | % | 42.9 | % | 46.6 | % | 42.1 | % | |||||||||
Operating expenses (GAAP) | $ | 144,024 | $ | 153,022 | $ | 132,475 | $ | 455,754 | $ | 372,593 | |||||||||
Stock-based compensation (1) | (41,106 | ) | (50,768 | ) | (49,108 | ) | (147,860 | ) | (144,331 | ) | |||||||||
Acquisition related expenses and amortization | (3,891 | ) | (3,884 | ) | (4,186 | ) | (11,429 | ) | (11,662 | ) | |||||||||
Restructuring and asset impairment charges | — | (208 | ) | (594 | ) | (901 | ) | (594 | ) | ||||||||||
Operating expenses (Non-GAAP) | $ | 99,027 | $ | 98,162 | $ | 78,587 | $ | 295,564 | $ | 216,006 | |||||||||
(1) Includes stock-based compensation as follows: | |||||||||||||||||||
Research and development | $ | 19,285 | $ | 23,765 | $ | 17,400 | $ | 64,528 | $ | 47,395 | |||||||||
Sales and marketing | 13,297 | 14,515 | 20,069 | 49,231 | 55,302 | ||||||||||||||
General and administrative | 8,524 | 12,488 | 11,639 | 34,101 | 41,634 | ||||||||||||||
Total | $ | 41,106 | $ | 50,768 | $ | 49,108 | $ | 147,860 | $ | 144,331 | |||||||||
Income from operations (GAAP) | $ | 117,989 | $ | 170,320 | $ | 135,441 | $ | 455,972 | $ | 291,301 | |||||||||
Stock-based compensation | 43,814 | 54,166 | 52,296 | 157,635 | 153,157 | ||||||||||||||
Acquisition related expenses and amortization | 5,790 | 5,774 | 5,631 | 17,115 | 15,851 | ||||||||||||||
Restructuring and asset impairment charges | — | 208 | 594 | 901 | 594 | ||||||||||||||
Income from operations (Non-GAAP) | $ | 167,593 | $ | 230,468 | $ | 193,962 | $ | 631,623 | $ | 460,903 | |||||||||
Net income (GAAP) | $ | 113,953 | $ | 157,191 | $ | 114,812 | $ | 418,017 | $ | 243,609 | |||||||||
Stock-based compensation | 43,814 | 54,166 | 52,296 | 157,635 | 153,157 | ||||||||||||||
Acquisition related expenses and amortization | 5,790 | 5,774 | 5,631 | 17,115 | 15,851 | ||||||||||||||
Restructuring and asset impairment charges | — | 208 | 594 | 901 | 594 | ||||||||||||||
Non-cash interest expense | 2,114 | 2,106 | 2,065 | 6,254 | 6,092 | ||||||||||||||
Non-GAAP income tax adjustment | (23,822 | ) | (13,846 | ) | 115 | (61,413 | ) | 15,732 | |||||||||||
Net income (Non-GAAP) | $ | 141,849 | $ | 205,599 | $ | 175,513 | $ | 538,509 | $ | 435,035 | |||||||||
Net income per share, basic (GAAP) | $ | 0.84 | $ | 1.15 | $ | 0.85 | $ | 3.06 | $ | 1.80 | |||||||||
Stock-based compensation | 0.32 | 0.40 | 0.39 | 1.15 | 1.13 | ||||||||||||||
Acquisition related expenses and amortization | 0.04 | 0.04 | 0.04 | 0.13 | 0.12 | ||||||||||||||
Restructuring and asset impairment charges | — | — | — | 0.01 | — | ||||||||||||||
Non-cash interest expense | 0.02 | 0.02 | 0.01 | 0.04 | 0.05 | ||||||||||||||
Non-GAAP income tax adjustment | (0.18 | ) | (0.10 | ) | — | (0.44 | ) | 0.12 | |||||||||||
Net income per share, basic (Non-GAAP) | $ | 1.04 | $ | 1.51 | $ | 1.29 | $ | 3.95 | $ | 3.22 | |||||||||
Shares used in basic per share calculation GAAP and Non-GAAP | 136,165 | 136,607 | 135,633 | 136,491 | 135,056 | ||||||||||||||
Net income per share, diluted (GAAP) | $ | 0.80 | $ | 1.09 | $ | 0.80 | $ | 2.92 | $ | 1.70 | |||||||||
Stock-based compensation | 0.32 | 0.39 | 0.37 | 1.17 | 1.11 | ||||||||||||||
Acquisition related expenses and amortization | 0.04 | 0.05 | 0.05 | 0.12 | 0.12 | ||||||||||||||
Restructuring and asset impairment charges | — | 0.01 | 0.01 | 0.01 | 0.01 | ||||||||||||||
Non-cash interest expense | 0.02 | 0.02 | 0.02 | 0.04 | 0.05 | ||||||||||||||
Non-GAAP income tax adjustment | (0.16 | ) | (0.09 | ) | — | (0.40 | ) | 0.12 | |||||||||||
Net income per share, diluted (Non-GAAP) (2) | $ | 1.02 | $ | 1.47 | $ | 1.25 | $ | 3.86 | $ | 3.11 | |||||||||
Shares used in diluted per share calculation GAAP | 143,863 | 145,098 | 145,962 | 145,081 | 144,058 | ||||||||||||||
Shares used in diluted per share calculation Non-GAAP (3) | 138,535 | 139,770 | 140,634 | 139,753 | 139,983 | ||||||||||||||
Net cash provided by operating activities (GAAP) | $ | 145,855 | $ | 269,243 | $ | 188,010 | $ | 661,330 | $ | 491,103 | |||||||||
Purchases of property and equipment | (23,848 | ) | (44,002 | ) | (8,948 | ) | (90,326 | ) | (30,014 | ) | |||||||||
Free cash flow (Non-GAAP) | $ | 122,007 | $ | 225,241 | $ | 179,062 | $ | 571,004 | $ | 461,089 | |||||||||
(2) Calculation of non-GAAP diluted net income per share for the three months ended
(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 we have GAAP net income. We excluded convertible Notes due 2025, Notes due 2026 and Notes due 2028 totaling 5,328 thousand shares in each of the three months ended
Source: Enphase Energy, Inc.