Enphase Energy exceeded expectations and reported $205.5 million in revenue last quarter. Year-over-year, Enphase’s first quarter revenue rose 105%. On yesterday afternoon’s call, Enphase also revealed that it will be announcing a new microinverter manufacturing location in the fourth quarter.
“We are pleased with the first quarter, considering Covid-19,” Badri Kothandaraman, CEO of Enphase Energy said. During Q1, the global solar microinverter supplier’s cash flow from operations came in at $39.2 million and GAAP gross margins improved from 37.1% in Q4 2019 to 39.2% for Q1 2020.
In Q1, Enphase shipped two million microinverters, but Covid-related shelter-in-place rules meant that it was unable to ship its Encharge battery storage system as planned; shipments of Encharge are now slated to begin in June.
Even though concerns about supply disruptions from China arose in mid-February, Covid-19 truly started to exert downward pressure on the residential solar industry during the last three weeks of the first quarter and throughout the first month of Q2. In April, the U.S. market, for example, saw a 30% to 50% industry-wide drop in residential installations; California and New York registered the steepest drops.
For the residential solar industry, Covid-19 has set in motion a few positive long-term trends, however. Electronic permitting has started to take root, and self-sufficiency is at the forefront of people’s minds, Kothandaraman said, noting that a drive toward self-sufficiency could spur greater interest in energy security and energy savings. Also, with kitchen table sales off the table, installers are starting to embrace digital tools and virtual selling, he said.
With this last shift in mind, Enphase is embarking on a multi-year plan that will involve developing a digital platform that can be used throughout an entire residential solar sales and customer service process – from scheduling appointments and designing contracts, to permitting, planning and activation, etc… The idea is that this type of powerful end-to-end platform could help Enphase sell more of its solar and storage products, while also supporting its customer base and its network of small and medium installers, which are under increased pressure to digitize.
During yesterday’s earnings call, Enphase pointed out that its strong balance sheet puts it in a position to invest in organic and inorganic growth. But Kothandaraman also noted that cash is king right now. “We want to make sure that we are not spending money unless we have to,” he added. Enphase’s cashflow generation remains strong; it finished Q1 with a cash balance of $593.8 million
Enphase said that it is still on course to release its IQ8 microinverter, its IQ8D dual inverter and its Ensemble in a Box products during the second half of this year. It also said that it still expects to achieve a 5% battery attachment rate by year’s end.