Press Release
Enphase Energy Reports Financial Results for the Third Quarter of 2024
We reported quarterly revenue of
Financial highlights for the third quarter of 2024 are listed below:
- Quarterly revenue of
$380 .9 million - GAAP gross margin of 46.8%; non-GAAP gross margin of 48.1% with net IRA benefit
- Non-GAAP gross margin of 38.9%, excluding net IRA benefit of 9.2%
- GAAP operating income of
$49 .8 million; non-GAAP operating income of$101 .4 million - GAAP net income of
$45 .8 million; non-GAAP net income of$88 .4 million - GAAP diluted earnings per share of
$0.33 , non-GAAP diluted earnings per share of$0.65 - Free cash flow of
$161 .6 million; ending cash, cash equivalents, and marketable securities of$1 .77 billion
Our revenue and earnings for the third quarter of 2024 are provided below, compared with the prior quarter:
(In thousands, except per share and percentage data)
| GAAP | Non-GAAP | ||||||||||||||||||||||
| Q3 2024 | Q2 2024 | Q3 2023 | Q3 2024 | Q2 2024 | Q3 2023 | ||||||||||||||||||
| Revenue | $ | 380,873 | $ | 303,458 | $ | 551,082 | $ | 380,873 | $ | 303,458 | $ | 551,082 | |||||||||||
| Gross margin | 46.8 | % | 45.2 | % | 47.5 | % | 48.1 | % | 47.1 | % | 48.4 | % | |||||||||||
| Operating expenses | $ | 128,383 | $ | 135,367 | $ | 144,024 | $ | 81,612 | $ | 81,706 | $ | 99,027 | |||||||||||
| Operating income | $ | 49,788 | $ | 1,799 | $ | 117,989 | $ | 101,411 | $ | 61,080 | $ | 167,593 | |||||||||||
| Net income | $ | 45,762 | $ | 10,833 | $ | 113,953 | $ | 88,402 | $ | 58,824 | $ | 141,849 | |||||||||||
| Basic EPS | $ | 0.34 | $ | 0.08 | $ | 0.84 | $ | 0.65 | $ | 0.43 | $ | 1.04 | |||||||||||
| Diluted EPS | $ | 0.33 | $ | 0.08 | $ | 0.80 | $ | 0.65 | $ | 0.43 | $ | 1.02 | |||||||||||
Total revenue for the third quarter of 2024 was
Our non-GAAP gross margin was 48.1% in the third quarter of 2024, compared to 47.1% in the second quarter of 2024. Our non-GAAP gross margin, excluding net IRA benefit, was 38.9% in the third quarter of 2024, compared to 41.0% in the second quarter of 2024.
Our non-GAAP operating expenses were
We exited the third quarter of 2024 with
In the third quarter of 2024, we repurchased 434,947 shares of our common stock at an average price of
We shipped 172.9 megawatt hours of IQ Batteries in the third quarter of 2024, compared to 120.2 megawatt hours in the second quarter of 2024. We are now shipping our third generation of IQ Batteries, the IQ® Battery 5P™, to
During the third quarter of 2024, we shipped approximately 1,176,000 microinverters from our contract manufacturing facilities in
During the third quarter of 2024, we launched AI-based software that is designed to optimize energy use by integrating solar and consumption forecasting with electricity tariff. This is intended to help consumers maximize savings as energy markets become increasingly complex, such as with dynamic electricity rates in parts of
BUSINESS HIGHLIGHTS
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FOURTH QUARTER 2024 FINANCIAL OUTLOOK
For the fourth quarter of 2024,
- Revenue to be within a range of
$360.0 million to$400.0 million , which includes shipments of 140 to 160 megawatt hours of IQ Batteries - GAAP gross margin to be within a range of 47.0% to 50.0% with net IRA benefit
- Non-GAAP gross margin to be within a range of 49.0% to 52.0% with net IRA benefit and 39.0% to 42.0% excluding net IRA benefit. Non-GAAP gross margin excludes stock-based compensation expense and acquisition related amortization
- Net IRA benefit to be within a range of
$38.0 million to$41.0 million based on estimated shipments of 1,300,000 units ofU.S. manufactured microinverters - GAAP operating expenses to be within a range of
$135.0 million to$139.0 million - Non-GAAP operating expenses to be within a range of
$81.0 million to$85.0 million , excluding$54.0 million estimated for stock-based compensation expense, acquisition related expenses and amortization
For 2024, GAAP and non-GAAP annualized effective tax rate with IRA benefit, excluding discrete items, is expected to be within a range of 17.0% to 19.0%.
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Use of non-GAAP Financial Measures
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.
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.
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.
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
Non-GAAP income tax adjustment. This item represents the amount adjusted to Enphase Energy’s GAAP tax provision or benefit to exclude the income tax effects of GAAP adjustments such as stock-based compensation, amortization of purchased intangibles, and other non-recurring items that are not reflective of
Non-GAAP net income per share, diluted.
Net IRA benefit. This item represents the advanced manufacturing production tax credit (AMPTC) from the IRA for manufacturing microinverters in
Free cash flow. This item represents net cash flows from operating activities less purchases of property and equipment.
Conference Call Information
Forward-Looking Statements
This press release contains forward-looking statements, including statements related to Enphase Energy’s expectations as to its fourth quarter of 2024 financial outlook, including revenue, shipments of IQ Batteries by megawatt hours, gross margin with net IRA benefit and excluding net IRA benefit, estimated shipments of
A copy of this press release can be found on the investor relations page of Enphase Energy’s website at https://investor.enphase.com.
About
© 2024
Contact:
Investor Relations
ir@enphaseenergy.com
, INC. | |||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||
| (In thousands, except per share data) | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||
, | , | , | , | , | |||||||||||||||
| Net revenues | $ | 380,873 | $ | 303,458 | $ | 551,082 | $ | 947,670 | $ | 1,988,216 | |||||||||
| Cost of revenues | 202,702 | 166,292 | 289,069 | 516,825 | 1,076,490 | ||||||||||||||
| Gross profit | 178,171 | 137,166 | 262,013 | 430,845 | 911,726 | ||||||||||||||
| Operating expenses: | |||||||||||||||||||
| Research and development | 47,843 | 48,871 | 54,873 | 150,925 | 172,045 | ||||||||||||||
| Sales and marketing | 49,671 | 51,775 | 55,357 | 154,753 | 178,383 | ||||||||||||||
| General and administrative | 30,192 | 33,550 | 33,794 | 98,924 | 104,456 | ||||||||||||||
| Restructuring and asset impairment charges | 677 | 1,171 | — | 3,755 | 870 | ||||||||||||||
| Total operating expenses | 128,383 | 135,367 | 144,024 | 408,357 | 455,754 | ||||||||||||||
| Income from operations | 49,788 | 1,799 | 117,989 | 22,488 | 455,972 | ||||||||||||||
| Other income, net | |||||||||||||||||||
| Interest income | 19,977 | 19,203 | 19,669 | 58,889 | 49,235 | ||||||||||||||
| Interest expense | (2,237 | ) | (2,220 | ) | (2,196 | ) | (6,653 | ) | (6,571 | ) | |||||||||
| Other income (expense), net | (16,785 | ) | (7,566 | ) | 1,883 | (24,264 | ) | 2,276 | |||||||||||
| Total other income, net | 955 | 9,417 | 19,356 | 27,972 | 44,940 | ||||||||||||||
| Income before income taxes | 50,743 | 11,216 | 137,345 | 50,460 | 500,912 | ||||||||||||||
| Income tax provision | (4,981 | ) | (383 | ) | (23,392 | ) | (9,962 | ) | (82,895 | ) | |||||||||
| Net income | $ | 45,762 | $ | 10,833 | $ | 113,953 | $ | 40,498 | $ | 418,017 | |||||||||
| Net income per share: | |||||||||||||||||||
| Basic | $ | 0.34 | $ | 0.08 | $ | 0.84 | $ | 0.30 | $ | 3.06 | |||||||||
| Diluted | $ | 0.33 | $ | 0.08 | $ | 0.80 | $ | 0.30 | $ | 2.92 | |||||||||
| Shares used in per share calculation: | |||||||||||||||||||
| Basic | 135,329 | 135,646 | 136,165 | 135,621 | 136,491 | ||||||||||||||
| Diluted | 139,914 | 136,123 | 143,863 | 136,236 | 145,081 | ||||||||||||||
, INC. | |||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
| (In thousands) | |||||
| (Unaudited) | |||||
, | , | ||||
| ASSETS | |||||
| Current assets: | |||||
| Cash and cash equivalents | $ | 256,325 | $ | 288,748 | |
| Marketable securities | 1,510,299 | 1,406,286 | |||
| Accounts receivable, net | 232,225 | 445,959 | |||
| Inventory | 158,837 | 213,595 | |||
| Prepaid expenses and other assets | 203,195 | 88,930 | |||
| Total current assets | 2,360,881 | 2,443,518 | |||
| Property and equipment, net | 148,444 | 168,244 | |||
| Operating lease, right of use asset, net | 28,120 | 19,887 | |||
| Intangible assets, net | 51,152 | 68,536 | |||
| 214,292 | 214,562 | |||
| Other assets | 185,448 | 215,895 | |||
| Deferred tax assets, net | 275,854 | 252,370 | |||
| Total assets | $ | 3,264,191 | $ | 3,383,012 | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||
| Current liabilities: | |||||
| Accounts payable | $ | 112,417 | $ | 116,164 | |
| Accrued liabilities | 189,819 | 261,919 | |||
| Deferred revenues, current | 129,556 | 118,300 | |||
| Warranty obligations, current | 35,755 | 36,066 | |||
| Debt, current | 99,931 | — | |||
| Total current liabilities | 567,478 | 532,449 | |||
| Long-term liabilities: | |||||
| Deferred revenues, non-current | 354,210 | 369,172 | |||
| Warranty obligations, non-current | 148,477 | 153,021 | |||
| Other liabilities | 62,392 | 51,008 | |||
| Debt, non-current | 1,200,261 | 1,293,738 | |||
| Total liabilities | 2,332,818 | 2,399,388 | |||
| Total stockholders’ equity | 931,373 | 983,624 | |||
| Total liabilities and stockholders’ equity | $ | 3,264,191 | $ | 3,383,012 | |
, INC. | |||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||||||
| (In thousands) | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||
, | , | , | , | , | |||||||||||||||
| Cash flows from operating activities: | |||||||||||||||||||
| Net income | $ | 45,762 | $ | 10,833 | $ | 113,953 | $ | 40,498 | $ | 418,017 | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||||
| Depreciation and amortization | 20,103 | 20,484 | 19,448 | 60,724 | 53,867 | ||||||||||||||
| Net amortization (accretion) of premium (discount) on marketable securities | (2,904 | ) | (1,030 | ) | 5,094 | (1,109 | ) | (12,611 | ) | ||||||||||
| Provision for doubtful accounts | 2,704 | 1,897 | 653 | 4,471 | 1,282 | ||||||||||||||
| Asset impairment | 17,568 | 6,241 | 903 | 24,141 | 903 | ||||||||||||||
| Non-cash interest expense | 2,173 | 2,157 | 2,114 | 6,462 | 6,254 | ||||||||||||||
| Net loss (gain) from change in fair value of debt securities | 741 | 1,931 | (1,910 | ) | 1,730 | (5,408 | ) | ||||||||||||
| Stock-based compensation | 45,940 | 52,757 | 43,814 | 159,530 | 157,635 | ||||||||||||||
| Deferred income taxes | (5,276 | ) | (14,076 | ) | (11,499 | ) | (27,644 | ) | (38,295 | ) | |||||||||
| Changes in operating assets and liabilities: | |||||||||||||||||||
| Accounts receivable | 49,414 | 82,183 | (34,752 | ) | 208,956 | (118,249 | ) | ||||||||||||
| Inventory | 17,231 | 31,825 | (8,003 | ) | 54,758 | (24,406 | ) | ||||||||||||
| Prepaid expenses and other assets | (64,149 | ) | (42,810 | ) | (15,383 | ) | (117,856 | ) | (57,376 | ) | |||||||||
| Accounts payable, accrued and other liabilities | 32,088 | (23,944 | ) | 9,903 | (58,140 | ) | 117,128 | ||||||||||||
| Warranty obligations | 7,053 | 15 | 8,151 | (4,855 | ) | 57,420 | |||||||||||||
| Deferred revenues | 1,690 | (1,401 | ) | 13,369 | (5,265 | ) | 105,169 | ||||||||||||
| Net cash provided by operating activities | 170,138 | 127,062 | 145,855 | 346,401 | 661,330 | ||||||||||||||
| Cash flows from investing activities: | |||||||||||||||||||
| Purchases of property and equipment | (8,533 | ) | (9,636 | ) | (23,848 | ) | (25,540 | ) | (90,326 | ) | |||||||||
| Purchases of marketable securities | (319,190 | ) | (300,053 | ) | (470,766 | ) | (1,091,511 | ) | (1,743,674 | ) | |||||||||
| Maturities and sale of marketable securities | 215,241 | 282,063 | 494,804 | 994,677 | 1,406,608 | ||||||||||||||
| Investments in private companies | — | — | (15,000 | ) | — | (15,000 | ) | ||||||||||||
| Net cash used in investing activities | (112,482 | ) | (27,626 | ) | (14,810 | ) | (122,374 | ) | (442,392 | ) | |||||||||
| Cash flows from financing activities: | |||||||||||||||||||
| Partial settlement of convertible notes | (5 | ) | — | — | (7 | ) | — | ||||||||||||
| Repurchase of common stock | (49,794 | ) | (99,908 | ) | (110,000 | ) | (191,698 | ) | (310,000 | ) | |||||||||
| Proceeds from issuance of common stock under employee equity plans | 14 | 6,769 | 719 | 7,969 | 1,315 | ||||||||||||||
| Payment of withholding taxes related to net share settlement of equity awards | (6,286 | ) | (7,473 | ) | (8,465 | ) | (73,801 | ) | (93,100 | ) | |||||||||
| Net cash used in financing activities | (56,071 | ) | (100,612 | ) | (117,746 | ) | (257,537 | ) | (401,785 | ) | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | 2,638 | (374 | ) | (1,900 | ) | 1,087 | (322 | ) | |||||||||||
| Net increase (decrease) in cash and cash equivalents | 4,223 | (1,550 | ) | 11,399 | (32,423 | ) | (183,169 | ) | |||||||||||
| Cash and cash equivalents—Beginning of period | 252,102 | 253,652 | 278,676 | 288,748 | 473,244 | ||||||||||||||
| Cash and cash equivalents —End of period | $ | 256,325 | $ | 252,102 | $ | 290,075 | $ | 256,325 | $ | 290,075 | |||||||||
, INC. | |||||||||||||||||||
| RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | |||||||||||||||||||
| (In thousands, except per share data and percentages) | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||
, | , | , | , | , | |||||||||||||||
| Gross profit (GAAP) | $ | 178,171 | $ | 137,166 | $ | 262,013 | $ | 430,845 | $ | 911,726 | |||||||||
| Stock-based compensation | 2,948 | 3,730 | 2,708 | 10,860 | 9,775 | ||||||||||||||
| Acquisition related amortization | 1,904 | 1,890 | 1,899 | 5,685 | 5,686 | ||||||||||||||
| Gross profit (Non-GAAP) | $ | 183,023 | $ | 142,786 | $ | 266,620 | $ | 447,390 | $ | 927,187 | |||||||||
| Gross margin (GAAP) | 46.8 | % | 45.2 | % | 47.5 | % | 45.5 | % | 45.9 | % | |||||||||
| Stock-based compensation | 0.8 | 1.3 | 0.6 | 1.1 | 0.5 | ||||||||||||||
| Acquisition related amortization | 0.5 | 0.6 | 0.3 | 0.6 | 0.2 | ||||||||||||||
| Gross margin (Non-GAAP) | 48.1 | % | 47.1 | % | 48.4 | % | 47.2 | % | 46.6 | % | |||||||||
| Operating expenses (GAAP) | $ | 128,383 | $ | 135,367 | $ | 144,024 | $ | 408,357 | $ | 455,754 | |||||||||
| Stock-based compensation(1) | (42,992 | ) | (49,027 | ) | (41,106 | ) | (148,670 | ) | (147,860 | ) | |||||||||
| Acquisition related expenses and amortization | (3,102 | ) | (3,463 | ) | (3,891 | ) | (10,027 | ) | (11,429 | ) | |||||||||
| Restructuring and asset impairment charges | (677 | ) | (1,171 | ) | — | (3,755 | ) | (901 | ) | ||||||||||
| Operating expenses (Non-GAAP) | $ | 81,612 | $ | 81,706 | $ | 99,027 | $ | 245,905 | $ | 295,564 | |||||||||
| (1)Includes stock-based compensation as follows: | |||||||||||||||||||
| Research and development | $ | 19,790 | $ | 20,210 | $ | 19,285 | $ | 64,550 | $ | 64,528 | |||||||||
| Sales and marketing | 14,237 | 16,784 | 13,297 | 49,199 | 49,231 | ||||||||||||||
| General and administrative | 8,965 | 12,033 | 8,524 | 34,921 | 34,101 | ||||||||||||||
| Total | $ | 42,992 | $ | 49,027 | $ | 41,106 | $ | 148,670 | $ | 147,860 | |||||||||
| Income from operations (GAAP) | $ | 49,788 | $ | 1,799 | $ | 117,989 | $ | 22,488 | $ | 455,972 | |||||||||
| Stock-based compensation | 45,940 | 52,757 | 43,814 | 159,530 | 157,635 | ||||||||||||||
| Acquisition related expenses and amortization | 5,006 | 5,353 | 5,790 | 15,712 | 17,115 | ||||||||||||||
| Restructuring and asset impairment charges | 677 | 1,171 | — | 3,755 | 901 | ||||||||||||||
| Income from operations (Non-GAAP) | $ | 101,411 | $ | 61,080 | $ | 167,593 | $ | 201,485 | $ | 631,623 | |||||||||
| Net income (GAAP) | $ | 45,762 | $ | 10,833 | $ | 113,953 | $ | 40,498 | $ | 418,017 | |||||||||
| Stock-based compensation | 45,940 | 52,757 | 43,814 | 159,530 | 157,635 | ||||||||||||||
| Acquisition related expenses and amortization | 5,006 | 5,353 | 5,790 | 15,712 | 17,115 | ||||||||||||||
| Restructuring and asset impairment charges | 677 | 1,171 | — | 3,755 | 901 | ||||||||||||||
| Non-cash interest expense | 2,173 | 2,157 | 2,114 | 6,462 | 6,254 | ||||||||||||||
| Non-GAAP income tax adjustment | (11,156 | ) | (13,447 | ) | (23,822 | ) | (30,775 | ) | (61,413 | ) | |||||||||
| Net income (Non-GAAP) | $ | 88,402 | $ | 58,824 | $ | 141,849 | $ | 195,182 | $ | 538,509 | |||||||||
| Net income per share, basic (GAAP) | $ | 0.34 | $ | 0.08 | $ | 0.84 | $ | 0.30 | $ | 3.06 | |||||||||
| Stock-based compensation | 0.34 | 0.39 | 0.32 | 1.17 | 1.15 | ||||||||||||||
| Acquisition related expenses and amortization | 0.04 | 0.04 | 0.04 | 0.12 | 0.13 | ||||||||||||||
| Restructuring and asset impairment charges | 0.01 | 0.01 | — | 0.03 | 0.01 | ||||||||||||||
| Non-cash interest expense | 0.02 | 0.02 | 0.02 | 0.05 | 0.04 | ||||||||||||||
| Non-GAAP income tax adjustment | (0.10 | ) | (0.11 | ) | (0.18 | ) | (0.23 | ) | (0.44 | ) | |||||||||
| Net income per share, basic (Non-GAAP) | $ | 0.65 | $ | 0.43 | $ | 1.04 | $ | 1.44 | $ | 3.95 | |||||||||
| Shares used in basic per share calculation GAAP and Non-GAAP | 135,329 | 135,646 | 136,165 | 135,621 | 136,491 | ||||||||||||||
| Net income per share, diluted (GAAP) | $ | 0.33 | $ | 0.08 | $ | 0.80 | $ | 0.30 | $ | 2.92 | |||||||||
| Stock-based compensation | 0.33 | 0.38 | 0.32 | 1.17 | 1.17 | ||||||||||||||
| Acquisition related expenses and amortization | 0.04 | 0.04 | 0.04 | 0.12 | 0.12 | ||||||||||||||
| Restructuring and asset impairment charges | 0.01 | 0.01 | — | 0.03 | 0.01 | ||||||||||||||
| Non-cash interest expense | 0.02 | 0.02 | 0.02 | 0.05 | 0.04 | ||||||||||||||
| Non-GAAP income tax adjustment | (0.08 | ) | (0.10 | ) | (0.16 | ) | (0.24 | ) | (0.40 | ) | |||||||||
| Net income per share, diluted (Non-GAAP)(2) | $ | 0.65 | $ | 0.43 | $ | 1.02 | $ | 1.43 | $ | 3.86 | |||||||||
| Shares used in diluted per share calculation GAAP | 139,914 | 136,123 | 143,863 | 136,236 | 145,081 | ||||||||||||||
| Shares used in diluted per share calculation Non-GAAP | 135,839 | 136,123 | 138,535 | 136,236 | 139,753 | ||||||||||||||
| Income-based government grants (GAAP) | $ | 46,552 | $ | 24,329 | $ | 18,532 | $ | 89,498 | $ | 20,583 | |||||||||
| Incremental cost for manufacturing in | (11,396 | ) | (5,950 | ) | (4,085 | ) | (22,228 | ) | (4,491 | ) | |||||||||
| Net IRA benefit (Non-GAAP) | $ | 35,156 | $ | 18,379 | $ | 14,447 | $ | 67,270 | $ | 16,092 | |||||||||
| Net cash provided by operating activities (GAAP) | $ | 170,138 | $ | 127,062 | $ | 145,855 | $ | 346,401 | $ | 661,330 | |||||||||
| Purchases of property and equipment | (8,533 | ) | (9,636 | ) | (23,848 | ) | (25,540 | ) | (90,326 | ) | |||||||||
| Free cash flow (Non-GAAP) | $ | 161,605 | $ | 117,426 | $ | 122,007 | $ | 320,861 | $ | 571,004 | |||||||||
(2) Calculation of non-GAAP diluted net income per share for the three and nine months ended
This press release was published by a CLEAR® Verified individual.
Source: Enphase Energy, Inc.