Enphase Revenue Rebounds as Safe-Harbor Shipments Climb
Safe-harbor agreements supplied $84.3 million of second-quarter revenue, nearly triple the prior quarter’s contribution.
Enphase Energy (ENPH), the solar-energy technology company, returned to sequential revenue growth in the second quarter as stronger European demand and safe-harbor shipments offset another decline in its U.S. business.
Revenue rose 3.2% from the first quarter to $291.9 million, reversing three consecutive sequential declines, though it remained 19.6% below the year-earlier period. Revenue excluding safe-harbor shipments fell about $40.8 million sequentially to $207.6 million, leaving those agreements responsible for the quarter’s increase.
Safe-harbor revenue accounted for about 29% of the total, up from 12% in the first quarter and 6% in the fourth quarter. U.S. revenue declined approximately 3%, moderating from a 23% drop in the prior quarter, while European revenue increased approximately 35% after a 36% rebound in the first quarter.
Microinverter shipments rose about 13% to 1.59 million units, while shipped wattage increased 16% to 725.2 megawatts, reflecting a shift toward higher-power products. IQ Battery shipments grew 10.4% sequentially to 113.8 megawatt-hours but remained 24.2% below the fourth-quarter level.
Non-GAAP gross margin expanded to 46.8% from 43.9% as reciprocal-tariff pressure eased for a second consecutive quarter. GAAP gross margin reached 60.0%, lifted by $45.4 million of a newly disclosed $52.0 million tariff refund; Enphase also recorded $1.6 million as interest income and capitalized $5.0 million in inventory.
Non-GAAP operating income increased 19.9% sequentially to $56.7 million, though it remained 42.5% below a year earlier. Enphase reported GAAP net income of $36.1 million after a $7.4 million first-quarter loss, with the tariff refund contributing to the turnaround. Free cash flow fell to $25.9 million from $83.0 million as operating cash flow declined.
For the third quarter, Enphase expects revenue of $290 million to $320 million and battery shipments of 130 to 150 megawatt-hours. Safe-harbor revenue is expected to decline to about $75 million, while the projected non-GAAP gross margin of 44% to 47% includes an approximately two-percentage-point tariff drag. The company forecasts non-GAAP operating expenses of $76 million to $80 million, above the quarterly range targeted in its January restructuring plan.
Enphase also began shipping its IQ9S-3P commercial microinverter and launched the IQ9N residential model. The coming IQ Battery G5 is expected to offer about 50% greater energy density at roughly 40% lower cost than the fourth-generation IQ Battery 10C, adding a product transition to an outlook still reliant on safe-harbor sales.