Press Release
Enphase Energy Reports Financial Results for the First Quarter of 2020
We are pleased to report revenue of
Highlights for the first quarter of 2020 included:
- Revenue of
$205 .5 million, including approximately$44.5 million of safe harbor revenue - Cash flow from operations of
$39 .2 million; ending cash balance of$593.8 million - GAAP gross margin of 39.2%; non-GAAP gross margin of 39.5%
- GAAP operating expenses of
$36 .0 million; non-GAAP operating expenses of$28 .5 million - GAAP operating income of
$44 .7 million; non-GAAP operating income of$52 .8 million - GAAP net income of
$68 .9 million, including a gain of$15.3 million from changes in fair value of derivatives and an income tax benefit of$11 .9 million; non-GAAP net income of$51 .9 million - GAAP diluted EPS of
$0.50 ; non-GAAP diluted EPS of$0.38
Our revenue and earnings for the first quarter of 2020 are given 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 2020 | Q4 2019 | Q1 2019 | Q1 2020 | Q4 2019 | Q1 2019 | ||||||||||||||||||
Revenue | $ | 205,545 | $ | 210,032 | $ | 100,150 | $ | 205,545 | $ | 210,032 | $ | 100,150 | |||||||||||
Gross margin | 39.2 | % | 37.1 | % | 33.3 | % | 39.5 | % | 37.3 | % | 33.5 | % | |||||||||||
Operating expenses | $ | 35,963 | $ | 33,439 | $ | 26,205 | $ | 28,508 | $ | 26,140 | $ | 22,288 | |||||||||||
Operating income | $ | 44,712 | $ | 44,442 | $ | 7,134 | $ | 52,773 | $ | 52,277 | $ | 11,282 | |||||||||||
Net income | $ | 68,936 | $ | 116,666 | $ | 2,765 | $ | 51,875 | $ | 52,038 | $ | 9,528 | |||||||||||
Basic EPS | $ | 0.56 | $ | 0.95 | $ | 0.03 | $ | 0.42 | $ | 0.42 | $ | 0.09 | |||||||||||
Diluted EPS | $ | 0.50 | $ | 0.88 | $ | 0.02 | $ | 0.38 | $ | 0.39 | $ | 0.08 | |||||||||||
Our non-GAAP gross margin increased to 39.5% from 37.3% in the fourth quarter of 2019, driven by disciplined pricing and cost management. Non-GAAP operating expenses were
We exited the first quarter with
As a result of global shelter-in-place rules, our engineering and certification activities experienced a slowdown. Consequently, we were unable to ship our Encharge™ battery storage system during the first quarter of 2020 as planned. We now expect shipments to begin in
Our Board of Directors has authorized the repurchase of up to
Although there is short-term uncertainty due to COVID-19, we have tremendous confidence in the strength of our business in the long term. We have a flexible and resilient supply chain, aided by our strong contract manufacturing partners. We are laser-focused on operational excellence and customer experience. Our balance sheet is strong, enabling us to invest in organic and inorganic growth even in today’s difficult times. We are investing heavily in new products that create unmatched value, based on our three pillars of differentiation: semiconductors, software and Ensemble™.
BUSINESS HIGHLIGHTS
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SECOND QUARTER 2020 FINANCIAL OUTLOOK
For the second quarter of 2020, Enphase Energy estimates both GAAP and non-GAAP financial results as follows:
- Revenue to be within a range of
$115 million to$130 million - GAAP and non-GAAP gross margin to be within a range of 37% to 40%
- GAAP operating expenses to be within a range of $33 million to $35 million, including
$7 .5 million estimated for stock-based compensation expenses and acquisition related amortization - Non-GAAP operating expenses to be within a range of
$25 .5 million to$27 .5 million, excluding$7 .5 million estimated for stock-based compensation expenses and acquisition related amortization
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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 2020 results and second quarter 2020 business outlook today at
Forward-Looking Statements
This press release contains forward-looking statements, including statements related to Enphase Energy’s expectations as to future financial performance; the capabilities, advantages, and performance of our technology and products; the availability of our products and their market adoption; the quality and ease of maintaining and monitoring our products; the training and capabilities of installers; and the impact of the COVID-19 pandemic. These forward-looking statements are based on the Company’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 the Company’s most recent Annual Report on Form 10-K and other documents on file with the
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, delivers smart, easy-to-use solutions that manage solar generation, storage and communication on one intelligent platform. The Company revolutionized the solar industry with its microinverter technology and produces a fully integrated solar-plus-storage solution. Enphase has shipped more than 27 million microinverters, and over 1.1 million Enphase systems have been deployed in more than 130 countries. For more information, visit www.enphase.com.
Enphase Energy®, the Enphase logo, Encharge, Ensemble, IQ, IQ 7X, Enphase Energized, and other trademarks or service names are the trademarks of
Contact:
Investor Relations
ir@enphaseenergy.com
+1-707-763-4784 x7354
ENPHASE ENERGY, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) |
|||||||
Three Months Ended |
|||||||
2020 | 2019 | ||||||
Net revenues | $ | 205,545 | $ | 100,150 | |||
Cost of revenues | 124,870 | 66,811 | |||||
Gross profit | 80,675 | 33,339 | |||||
Operating expenses: | |||||||
Research and development | 11,876 | 8,524 | |||||
Sales and marketing | 11,772 | 7,433 | |||||
General and administrative | 12,315 | 9,880 | |||||
Restructuring charges | — | 368 | |||||
Total operating expenses | 35,963 | 26,205 | |||||
Income from operations | 44,712 | 7,134 | |||||
Other income (expense), net | |||||||
Interest income | 1,091 | 211 | |||||
Interest expense | (3,155 | ) | (3,751 | ) | |||
Other expense, net | (924 | ) | (481 | ) | |||
Change in fair value of derivatives (1) | 15,344 | — | |||||
Total other income (expense), net | 12,356 | (4,021 | ) | ||||
Income before income taxes | 57,068 | 3,113 | |||||
Income tax benefit (provision) | 11,868 | (348 | ) | ||||
Net income | $ | 68,936 | $ | 2,765 | |||
Net income per share: | |||||||
Basic | $ | 0.56 | $ | 0.03 | |||
Diluted | $ | 0.50 | $ | 0.02 | |||
Shares used in per share calculation: | |||||||
Basic | 123,531 | 108,195 | |||||
Diluted | 138,104 | 115,863 |
(1)
ENPHASE ENERGY, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) |
|||||||
2020 |
2019 |
||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 549,144 | $ | 251,409 | |||
Restricted cash | 44,700 | 44,700 | |||||
Accounts receivable, net | 95,484 | 145,413 | |||||
Inventory | 34,617 | 32,056 | |||||
Prepaid expenses and other assets | 27,752 | 26,079 | |||||
Total current assets | 751,697 | 499,657 | |||||
Property and equipment, net | 30,500 | 28,936 | |||||
Operating lease, right of use asset | 11,986 | 10,117 | |||||
Intangible assets, net | 29,332 | 30,579 | |||||
24,783 | 24,783 | ||||||
Other assets | 47,798 | 44,620 | |||||
Deferred tax assets, net | 86,806 | 74,531 | |||||
Convertible notes hedge | 47,885 | — | |||||
Total assets | $ | 1,030,787 | $ | 713,223 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 34,538 | $ | 57,474 | |||
Accrued liabilities | 49,817 | 47,092 | |||||
Deferred revenues, current | 39,022 | 81,783 | |||||
Warranty obligations, current | 9,678 | 10,078 | |||||
Debt, current | 100,567 | 2,884 | |||||
Total current liabilities | 233,622 | 199,311 | |||||
Long-term liabilities: | |||||||
Deferred revenues, noncurrent | 106,205 | 100,204 | |||||
Warranty obligations, noncurrent | 27,823 | 27,020 | |||||
Other liabilities | 13,077 | 11,817 | |||||
Debt, noncurrent | 295,216 | 102,659 | |||||
Warrants liability | 38,637 | — | |||||
Total liabilities | 714,580 | 441,011 | |||||
Total stockholders’ equity | 316,207 | 272,212 | |||||
Total liabilities and stockholders’ equity | $ | 1,030,787 | $ | 713,223 | |||
ENPHASE ENERGY, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) |
|||||||||||
Three Months Ended | |||||||||||
2020 |
2019 |
2019 |
|||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 68,936 | $ | 116,666 | $ | 2,765 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 3,844 | 2,568 | 3,572 | ||||||||
Provision for doubtful accounts | 104 | (191 | ) | — | |||||||
Asset impairment | — | 1,124 | — | ||||||||
Non-cash interest expense | 2,722 | 1,908 | 1,490 | ||||||||
Financing fees on extinguishment of debt | — | — | 2,152 | ||||||||
Stock-based compensation | 7,515 | 6,176 | 3,290 | ||||||||
Change in fair value of derivatives | (15,344 | ) | — | — | |||||||
Deferred income taxes | (12,500 | ) | (73,375 | ) | — | ||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | 49,637 | (12,606 | ) | (3,266 | ) | ||||||
Inventory | (2,560 | ) | (1,825 | ) | 3,296 | ||||||
Prepaid expenses and other assets | (5,009 | ) | (5,659 | ) | (2,413 | ) | |||||
Accounts payable, accrued and other liabilities | (22,066 | ) | 3,544 | 4,851 | |||||||
Warranty obligations | 403 | 2,474 | (252 | ) | |||||||
Deferred revenues | (36,460 | ) | 61,467 | 1,578 | |||||||
Net cash provided by operating activities | 39,222 | 102,271 | 17,063 | ||||||||
Cash flows from investing activities: | |||||||||||
Purchases of property and equipment | (3,353 | ) | (7,420 | ) | (658 | ) | |||||
Net cash used in investing activities | (3,353 | ) | (7,420 | ) | (658 | ) | |||||
Cash flows from financing activities: | |||||||||||
Issuance of convertible notes, net of issuance costs (1) | 313,011 | (68 | ) | — | |||||||
Purchase of convertible note hedges (1) | (89,056 | ) | — | — | |||||||
Sale of warrants (1) | 71,552 | — | — | ||||||||
Principal payments and financing fees on debt | (1,148 | ) | (198 | ) | (44,731 | ) | |||||
Proceeds from exercise of equity awards and employee stock purchase plan | 1,979 | 2,060 | 1,664 | ||||||||
Payment of withholding taxes related to net share settlement of equity awards | (34,267 | ) | (3,760 | ) | (1,355 | ) | |||||
Net cash provided by (used in) financing activities | 262,071 | (1,966 | ) | (44,422 | ) | ||||||
Effect of exchange rate changes on cash and cash equivalents | (205 | ) | 178 | (133 | ) | ||||||
Net increase (decrease) in cash, cash equivalents, and restricted cash | 297,735 | 93,063 | (28,150 | ) | |||||||
Cash, cash equivalents and restricted cash—Beginning of period | 296,109 | 203,046 | 106,237 | ||||||||
Cash, cash equivalents and restricted cash—End of period | $ | 593,844 | $ | 296,109 | $ | 78,087 |
(1)
ENPHASE ENERGY, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (In thousands, except per share data and percentages) (Unaudited) |
|||||||||||
Three Months Ended | |||||||||||
2020 |
2019 |
2019 |
|||||||||
Gross profit (GAAP) | $ | 80,675 | $ | 77,881 | $ | 33,339 | |||||
Stock-based compensation | 606 | 536 | 231 | ||||||||
Gross profit (Non-GAAP) | $ | 81,281 | $ | 78,417 | $ | 33,570 | |||||
Gross margin (GAAP) | 39.2 | % | 37.1 | % | 33.3 | % | |||||
Stock-based compensation | 0.3 | % | 0.2 | % | 0.2 | % | |||||
Gross margin (Non-GAAP) | 39.5 | % | 37.3 | % | 33.5 | % | |||||
Operating expenses (GAAP) | $ | 35,963 | $ | 33,439 | $ | 26,205 | |||||
Stock-based compensation (1) | (6,909 | ) | (5,623 | ) | (3,003 | ) | |||||
Restructuring and asset impairment charges | — | (1,131 | ) | (368 | ) | ||||||
Acquisition related expenses and amortization | (546 | ) | (545 | ) | (546 | ) | |||||
Operating expenses (Non-GAAP) | $ | 28,508 | $ | 26,140 | $ | 22,288 | |||||
(1) Includes stock-based compensation as follows: | |||||||||||
Research and development | $ | 1,919 | $ | 1,642 | $ | 716 | |||||
Sales and marketing | 1,942 | 1,778 | 999 | ||||||||
General and administrative | 3,048 | 2,203 | 1,288 | ||||||||
Total | $ | 6,909 | $ | 5,623 | $ | 3,003 | |||||
Income from operations (GAAP) | $ | 44,712 | $ | 44,442 | $ | 7,134 | |||||
Stock-based compensation | 7,515 | 6,159 | 3,234 | ||||||||
Restructuring and asset impairment charges | — | 1,131 | 368 | ||||||||
Acquisition related expenses and amortization | 546 | 545 | 546 | ||||||||
Income from operations (Non-GAAP) | $ | 52,773 | $ | 52,277 | $ | 11,282 | |||||
Net income (GAAP) | $ | 68,936 | $ | 116,666 | $ | 2,765 | |||||
Stock-based compensation | 7,515 | 6,159 | 3,234 | ||||||||
Restructuring and asset impairment charges | — | 1,131 | 368 | ||||||||
Acquisition related expenses and amortization | 546 | 545 | 546 | ||||||||
Non-recurring debt prepayment fees and non-cash interest | 2,722 | 1,908 | 2,615 | ||||||||
Change in fair value of derivatives | (15,344 | ) | — | — | |||||||
Non-GAAP income tax adjustment | (12,500 | ) | (74,371 | ) | — | ||||||
Net income (Non-GAAP) | $ | 51,875 | $ | 52,038 | $ | 9,528 | |||||
Net income per share, basic (GAAP) | $ | 0.56 | $ | 0.95 | $ | 0.03 | |||||
Stock-based compensation | 0.06 | 0.05 | 0.03 | ||||||||
Restructuring and asset impairment charges | — | 0.01 | — | ||||||||
Acquisition related expenses and amortization | — | — | 0.01 | ||||||||
Non-recurring debt prepayment fees and non-cash interest | 0.02 | 0.02 | 0.02 | ||||||||
Change in fair value of derivatives | (0.12 | ) | — | — | |||||||
Non-GAAP income tax adjustment | (0.10 | ) | (0.61 | ) | — | ||||||
Net income per share, basic (Non-GAAP) | $ | 0.42 | $ | 0.42 | $ | 0.09 | |||||
Shares used in basic per share calculation GAAP and Non-GAAP | 123,531 | 122,630 | 108,195 | ||||||||
Net income per share, diluted (GAAP) | $ | 0.50 | $ | 0.88 | $ | 0.02 | |||||
Stock-based compensation | 0.06 | 0.05 | 0.03 | ||||||||
Restructuring and asset impairment charges | — | 0.01 | — | ||||||||
Acquisition related expenses and amortization | — | — | 0.01 | ||||||||
Non-recurring debt prepayment fees and non-cash interest | 0.02 | 0.01 | 0.02 | ||||||||
Change in fair value of derivatives | (0.11 | ) | — | — | |||||||
Non-GAAP income tax adjustment | (0.09 | ) | (0.56 | ) | — | ||||||
Net income per share, diluted (Non-GAAP) (2) | $ | 0.38 | $ | 0.39 | $ | 0.08 | |||||
Shares used in diluted per share calculation GAAP | 138,104 | 132,872 | 115,863 | ||||||||
Shares used in diluted per share calculation Non-GAAP (3) | 135,168 | 132,233 | 127,564 |
(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 the in-the-money portion of convertible notes due 2024 totaling 2,936 thousand shares and 639 thousand shares in the three months ended
Source: Enphase Energy, Inc.