Enphase Energy Q3 Revenue Reaches $293.3 Million as EPS Falls to $0.17

Enphase Energy (ENPH ) reported third-quarter 2026 revenue of $293.3 million on Oct. 27, 2026, with GAAP diluted earnings per share of $0.17 and non-GAAP diluted EPS of $0.41, according to the company’s quarterly results release. The company said GAAP and non-GAAP diluted EPS were reduced by $0.15 and $0.14, respectively, due to impairment in investments. The release, datelined Fremont, California, included a results summary from President and Chief Executive Officer Badri Kothandaraman.

Revenue compared with $291.9 million in the second quarter of 2026 and $410.4 million in the third quarter of 2025. GAAP gross margin was 43.3%, compared with 60.0% in the second quarter and 47.8% a year earlier; non-GAAP gross margin was 45.0%, versus 46.8% and 49.2% in those periods. GAAP operating income was $6.5 million, compared with $51.5 million in the second quarter and $66.2 million a year earlier, while non-GAAP operating income was $53.6 million, versus $56.7 million and $123.4 million in those periods. GAAP net income was $23.4 million, compared with $36.1 million in the second quarter and $66.6 million a year earlier; non-GAAP net income was $54.0 million, versus $61.5 million and $117.3 million in those periods. The condensed consolidated statements of operations show a loss before income taxes of $3.571 million for the quarter, other expense, net of $26.622 million, and an income tax benefit of $26.958 million.

Third-quarter revenue included $85.0 million of safe harbor revenue, compared with $84.3 million in the second quarter. Revenue in the United States increased approximately 3%, which the company described as a smaller than anticipated increase due to soft residential solar demand. Revenue in Europe decreased approximately 11%, which the company attributed to summer seasonality and continued weakness in certain solar markets.

Global sell-through increased approximately 1% sequentially, below the company’s expectation of 10% growth, contributing to revenue at the low end of its guidance range. U.S. sell-through increased 5% sequentially but declined 35% year over year, a result the company said was broadly in line with third-party reports of U.S. residential solar market trends. European sell-through declined 12% sequentially, reflecting seasonality and softer demand, particularly in France.

The decrease in non-GAAP gross margin from the second quarter was driven by product mix, according to the company. Reciprocal tariffs reduced gross margin by approximately 1.3 percentage points in the third quarter, down from approximately 2.0 percentage points in the second quarter. Non-GAAP operating expenses were $78.4 million, compared with $79.8 million in the prior quarter.

Enphase said it shipped approximately 1.42 million IQ Microinverters, or 655.2 megawatts DC, and 129.9 megawatt hours of IQ Batteries during the quarter; battery shipments compared with 113.8 megawatt hours in the second quarter. More than 26,000 installers worldwide are now certified to install IQ Batteries, up from more than 25,000.

The company exited the quarter with $931.8 million in cash, cash equivalents and marketable securities. Cash flow from operations was approximately $0.1 million, and capital expenditures were $11.5 million, compared with $14.4 million in the second quarter. The company’s non-GAAP reconciliation table shows negative free cash flow of $11.37 million for the quarter, a measure the company defines as net cash from operating activities less purchases of property and equipment.

IQ SST Demonstration and AI Data Center Pipeline

Enphase said it successfully demonstrated 13.8 kV AC to 800 VDC conversion using its IQ Solid-State Transformer technology at its research and development lab in Austin, Texas. The demonstration brought together 132 power modules, with 44 connected in series on each of three phases operating as a single integrated system, and the company said IQ SST maintained a stable 800 VDC output during rapid load changes that simulate the dynamic power demands of AI compute racks.

By converting medium-voltage AC directly to 800 VDC, IQ SST is designed to eliminate multiple stages of conventional power conversion, reduce energy losses, and deliver more usable power to AI compute, according to the company. Its next stated milestones are to validate operation at 34.5 kV and to demonstrate a megawatt-scale system by the end of 2026.

During the quarter, Enphase more than doubled its IQ SST customer and partner pipeline to over 50, and it said it is actively engaged with a leading hyperscaler and a global AI computing leader whose technical requirements are helping shape its product architecture and roadmap. The company said it remains on track for customer pilots in 2027, with commercial shipments expected to begin in 2028. On Oct. 26, 2026, Enphase announced with Infineon Technologies (IFX.SW ) that it will deploy what the companies called the world’s first 900 V GaN monolithic bidirectional switch devices in its IQ SST power modules.

Enphase said its core U.S. residential solar market continues to face headwinds from higher interest rates and the expiration of the Section 25D federal tax credit. It named five growth drivers heading into 2027: the fifth-generation IQ Battery G5 for global residential storage markets; the Propel prepaid lease program to drive U.S. residential solar and battery adoption; commercial solar with IQ9 Commercial Microinverters and the upcoming IQ Battery C80 in the United States; unidirectional and bidirectional EV chargers for global markets; and IQ SST for next-generation AI data centers.

Fourth-Quarter 2026 Outlook

For the fourth quarter of 2026, Enphase estimated revenue of $225.0 million to $255.0 million, including shipments of 100 to 120 MWh of IQ Batteries. The outlook includes approximately $51.2 million of safe harbor revenue and assumes sell-through will decline 10% compared with the third quarter of 2026.

The company estimated GAAP gross margin of 38.0% to 41.0% and non-GAAP gross margin of 40.0% to 43.0%, each including approximately 2.0 percentage points of reciprocal tariff impact, with the non-GAAP figure excluding stock-based compensation expense and acquisition-related amortization. GAAP operating expenses are estimated at $119.0 million to $123.0 million, and non-GAAP operating expenses at $76.0 million to $80.0 million, excluding an estimated $43.0 million for stock-based compensation expense and acquisition-related amortization.

Enphase received approximately $52.0 million in tariff refunds and associated interest from U.S. Customs and Border Protection during the nine months ended Sept. 30, 2026, related to tariffs imposed under the International Emergency Economic Powers Act that were invalidated following the U.S. Supreme Court ruling in Learning Resources, Inc. v. Trump. Approximately $1.6 million and $47.0 million of the refunds were recognized as a reduction to cost of revenues in the three- and nine-month periods, respectively; approximately $0.1 million and $1.7 million were recognized as interest income in those periods; and approximately $3.3 million was capitalized as a cost of inventory. Of the refunds recognized as a reduction to cost of revenues, $43.3 million of tariff costs had been recorded in prior periods and was excluded from the company’s non-GAAP measures along with the associated $1.7 million of interest.

In the first quarter of 2026, Enphase sold $235.0 million of Advanced Manufacturing Production Tax Credits generated in 2025 at 93% of face value, resulting in a discount of approximately $16.5 million, and incurred approximately $2.5 million in transaction-related fees; the company excluded those amounts from its non-GAAP measures for that quarter.

For the nine months ended Sept. 30, 2026, revenue was $868.1 million, compared with $1,129.7 million a year earlier, and GAAP net income was $52.1 million, compared with $133.4 million. The cash flow statement shows a $632.5 million settlement of Notes due 2026 during the nine-month period. Total assets were $2.88 billion at Sept. 30, 2026, compared with $3.51 billion at Dec. 31, 2025.

Enphase said it would host a conference call for analysts and investors at 4:30 p.m. Eastern Time on Oct. 27, 2026, with a live webcast available from the investor relations section of its website and an archived version available for approximately one year afterward.