ENPH · Enphase Energy, Inc.

Enphase Energy's Q1 2026 results showed revenue of $282.9 million, a decline from $343.3 million in Q4 2025, primarily driven by a 23% drop in US revenue due to the expiration of the federal residential clean energy tax credit under Section 25D and seasonal factors, with sell-through demand down 48% quarter-over-quarter. Europe revenue increased 36% quarter-over-quarter, providing some offset. Non-GAAP gross margin contracted to 43.9% from 46.1%, pressured by a 4.3 percentage point tariff impact, down slightly from 5.1 points prior quarter. Non-GAAP operating expenses dipped to $77.0 million from $78.8 million, yielding operating income of $47.3 million versus $79.4 million previously. The company generated strong free cash flow of $83.0 million, bolstered by $102.9 million in operating cash flow, ending with a robust $930.6 million in cash, cash equivalents, and marketable securities after settling $632.5 million in convertible notes. Shipments included 1.39 million microinverters from US facilities and 103.1 MWh of IQ Batteries, down from 150.1 MWh prior quarter. Key one-time items included a $235.0 million sale of advanced manufacturing production tax credits at a discount, impacting GAAP gross margin by 6.7%, and $18.7 million spent on anti-dilution share withholding. Business highlights feature the announcement of IQ SST, a 1.25 MW solid-state transformer for AI data centers, with prototypes advancing and full demos planned later in 2026, signaling expansion into high-growth data center markets. Q2 guidance projects revenue of $280-310 million, including $85 million safe harbor shipments and 100-110 MWh IQ Batteries, with non-GAAP gross margin of 44-47% despite 3% tariff headwind, reflecting cautious optimism amid US challenges but supported by product ramps and international momentum.