In Short : Enphase Energy releases financial results for Q4 2023, indicating the company’s performance and outlook. These reports likely detail revenue, profits, and strategic initiatives, providing insights into Enphase Energy’s position in the renewable energy market and its plans for future growth.
In Detail : FREMONT, Calif. : Enphase Energy, Inc. (NASDAQ: ENPH), a global energy technology company and the world’s leading supplier of microinverter-based solar and battery systems, announced today financial results for the fourth quarter of 2023, which included the summary below from its President and CEO, Badri Kothandaraman.
We reported quarterly revenue of $302.6 million in the fourth quarter of 2023, along with 50.3% for non-GAAP gross margin. We shipped 1,595,677 microinverters, or approximately 660.1 megawatts DC, and 80.7 megawatt hours of IQ® Batteries.
Financial highlights for the fourth quarter of 2023 are listed below:
Quarterly revenue of $302.6 million
GAAP gross margin of 48.5%; non-GAAP gross margin of 50.3%, with net IRA benefit
Non-GAAP gross margin of 41.8%, excluding net IRA benefit of 8.5%
GAAP operating loss of $10.2 million; non-GAAP operating income of $65.6 million
GAAP net income of $20.9 million; non-GAAP net income of $73.5 million
GAAP diluted earnings per share of $0.15; non-GAAP diluted earnings per share of $0.54
Free cash flow of $15.4 million; ending cash, cash equivalents, and marketable securities of $1.70 billion
Our revenue and earnings for the fourth quarter of 2023 are provided below, compared with the prior quarter:
(In thousands, except per share and percentage data)
Our revenue and earnings for the fiscal year 2023 are provided below, compared with the prior year:
(In thousands, except per share and percentage data)
Total revenue for the fourth quarter of 2023 was $302.6 million, compared to $551.1 million in the third quarter of 2023. Our revenue in the United States for the fourth quarter of 2023 decreased approximately 35%, compared to the third quarter of 2023. Our revenue in Europe decreased approximately 70%, compared to the third quarter of 2023. The declines were primarily the result of reduced shipments to manage high inventory at our distribution partners along with a further softening in demand.
Our non-GAAP gross margin was 50.3% in the fourth quarter of 2023, compared to 48.4% in the third quarter of 2023, driven by increased net IRA benefit. Our non-GAAP gross margin, excluding net IRA benefit, was 41.8% in the fourth quarter of 2023, compared to 45.8% in the third quarter of 2023, driven by product mix. Our non-GAAP operating expenses were $86.6 million in the fourth quarter of 2023, compared to $99.0 million in the third quarter of 2023. Our non-GAAP operating income was $65.6 million in the fourth quarter of 2023, compared to $167.6 million in the third quarter of 2023.
We exited the fourth quarter of 2023 with $1.70 billion in cash, cash equivalents, and marketable securities and generated $35.5 million in cash flow from operations in the fourth quarter of 2023. Our capital expenditures were $20.1 million in the fourth quarter of 2023, compared to $23.8 million in the third quarter of 2023. Capital expenditure requirements decreased due to a reduction in our U.S. manufacturing spending.
In July 2023, our Board of Directors approved a share repurchase program with authorization to purchase up to $1.0 billion of shares of our common stock. In the fourth quarter of 2023, we repurchased 1,183,246 shares of our common stock at an average price of $84.51 per share for a total of approximately $100.0 million.
We started shipping IQ8P™ Microinverters with peak output AC power of 480 W for the small-commercial market in North America, and grid-tied residential applications in South Africa, Mexico, Brazil, and India. We introduced IQ8™ Microinverters into more countries in Europe – Austria, Italy and Belgium. Our newest product, the IQ8X™ microinverter with peak output AC power of 384 W for panels with high DC voltage, is shipping to customers in the United States. We now ship IQ8 Microinverters into 21 countries worldwide.
We shipped 80.7 megawatt hours of IQ Batteries in the fourth quarter of 2023. We now ship our third generation of IQ Batteries, the IQ® Battery 5P, to the United States, Puerto Rico, Australia, and the United Kingdom. We launched this battery in Italy during the fourth quarter of 2023. More than 4,700 installers worldwide are certified to install our IQ Batteries.
We continued to release new features in Solargraf℠, our cloud-based design and proposal software platform during the fourth quarter of 2023. We began offering electrical design and single line diagram features while continuing to offer NEM 3.0 functionality for solar and battery systems in California. The software platform is currently available to installers in the United States, Germany, Austria, and Brazil.
We shipped approximately 913,000 microinverters manufactured in the United States to customers in the fourth quarter of 2023. As part of our plan to streamline manufacturing, we are ceasing operations at our contract manufacturing locations in Romania and Wisconsin. We will focus on manufacturing microinverters in the United States with our two existing contract manufacturing partners in South Carolina and Texas. Once these two U.S. sites have fully ramped production, we expect to have a global capacity of approximately 7.25 million microinverter units per quarter, of which 5 million units of capacity will be in the United States.
BUSINESS HIGHLIGHTS
On Jan. 29, 2024, Enphase Energy announced that it started shipping IQ8HC™ and IQ8X Microinverters with peak output AC power of 384 W designed to seamlessly pair with a full range of solar modules up to 540 W DC.
On Jan. 23, 2024, Enphase Energy announced that it started shipping IQ8 Microinverters in Belgium, with peak output AC power of 384 W, to support newer, high-powered solar modules.
On Dec. 13, 2023, Enphase Energy announced that it is expanding its support for virtual power plants (VPPs) through grid services programs across the United States powered by the IQ Battery 5P.
On Dec. 5, 2023, Enphase Energy announced the launch of the IQ Battery 5P and IQ8 Microinverters, for customers in Italy.
On Nov. 30, 2023, Enphase Energy announced that it started shipping IQ8P Microinverters, with a peak output AC power of 480 W, in Mexico to support newer, high-powered solar modules.
On Nov. 16, 2023, Enphase Energy announced the launch of its new IQ8 Commercial Microinverters, featuring the IQ8P-3P™ Microinverter which enables a peak output AC power of 480 W, for the small commercial solar market in North America.
On Nov. 13, 2023, Enphase Energy announced that it started shipping IQ8P Microinverters, with peak output AC power of 480 W, in Brazil to support newer, high-powered solar modules.
On Nov. 2, 2023, Enphase Energy announce that it started shipping IQ8 Microinverters, with peak output AC power of 384 W, in Austria to support newer, high-powered solar modules.
On Oct. 30, 2023, Enphase Energy announced the launch of IQ8 Microinverters to support high-powered modules and the IQ Energy Router™ family of devices in Switzerland.
FIRST QUARTER 2024 FINANCIAL OUTLOOK
For the first quarter of 2024, Enphase Energy estimates both GAAP and non-GAAP financial results as follows:
Revenue to be within a range of $260.0 million to $300.0 million, which includes shipments of 70 to 90 megawatt hours of IQ Batteries
GAAP gross margin to be within a range of 42.0% to 45.0%, with net IRA benefit
Non-GAAP gross margin to be within a range of 44.0% to 47.0% with net IRA benefit and 40.0% to 43.0% 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 $12.0 to $14.0 million based on estimated shipments of 500,000 units of U.S. manufactured microinverters
GAAP operating expenses to be within a range of $144.0 million to $148.0 million
Non-GAAP operating expenses to be within a range of $80.0 million to $84.0 million, excluding $64.0 million estimated for stock-based compensation expense, acquisition related expenses and amortization, and restructuring and asset impairment charges
For 2024, GAAP and non-GAAP annualized effective tax rate with IRA benefit, excluding discrete items, is expected to be within a range of 19.0% to 21.0%