Enphase reports 3Q revenue rebound, aided by new storage product

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Enphase Energy reported a 42% quarter-over-quarter revenue rebound in Q3 2020, aided by the new Encharge storage system, which contributed 10% to the company’s total third quarter revenue.

In the U.S., Enphase credited volume shipments of Encharge, which began in July, to the market’s 39% quarter-over-quarter revenue gain. “Resiliency is top of mind for people working from home,” Badri Kothandaraman, Enphase’s president and CEO said during yesterday’s earnings call. Enphase hopes to be ready to introduce Encharge in Germany and Italy in the third quarter of next year.

About 78% of Enphase’s overall $178.5 million in Q3 revenue was generated in the U.S., but Q3 revenue growth from Europe, which came in at 67%, was materially stronger. “We added several new installers and distributors during the quarter, including top distributors in Belgium and Netherlands,” Kothandaraman said. In Q3, Enphase also launched its IQ 7A microinverter in Europe and announced a strategic partnership with module manufacturer Sonnenstromfabrik to develop a high efficiency Enphase Energized AC module for the European residential solar market.

“I am pleased with our team’s performance in Europe, and I’m excited about the region’s projected growth,” Kothandaraman said, adding that Enphase will continue to hire in the region as it sees opportunities arise.

Due to an increase in Enphase’s engineering and sales headcount, non-GAAP operating expenses rose to $29.6 million in Q3, compared to $26 million in the prior quarter. Overall, Enphase hired 113 new employees in the quarter.

Enphase’s non-GAAP figures do not include about $23 million in tariff refunds on U.S. microinverter imports from China.

“We are very pleased to have returned to year-over-year revenue growth – after excluding safe harbor revenue from the prior year – and despite the challenging economic environment resulting from the pandemic,” Eric Branderiz, Enphase’s chief financial officer said. According to Enphase, some of its microinverter products met an exclusion to the Section 301 Tariffs that it has been paying on imports to the U.S. from China.

Looking forward

For next quarter, Enphase said that it thinks that revenue, excluding any safe harbor shipments, will fall within a $245 million to $260 million range.

“We cannot predict how COVID-19 is going to play out in November or December. So, that’s always a risk. However, we feel very good about the progress we are making and the demand that we are seeing for both microinverters and Encharge,” Kothandaraman said.

When the company started shipping its Encharge system in July, it also introduced online training and certification for its long-tail installers. Within the first few weeks of the product’s rollout, Enphase identified a few things to iron out, Kothandaraman said, adding that his company is currently laser focused on maximizing its installers’ productivity. “We expect to get this activity done in the fourth quarter through software upgrades to our Enlighten platform,” he noted.

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