Enphase’s fourth quarter was marked by a decline in sales volumes and revenue, yet delivered results above Wall Street’s expectations, prompting a strong positive response from the market. Management attributed the outperformance to operational discipline, effective channel management, and U.S. customers accelerating purchases before the Section 25D tax credit expiration. CEO Badrinarayanan Kothandaraman highlighted that “the strong demand trends at the beginning of Q4 continued till the end of the year, driven by increased solar and battery installations ahead of the expiring tax credit.” The company also benefited from improvements in customer service and progress on AI-driven support tools.
Is now the time to buy ENPH? Find out in our full research report (it’s free for active Edge members).
Enphase (ENPH) Q4 CY2025 Highlights:
- Revenue: $343.3 million vs analyst estimates of $336.9 million (10.3% year-on-year decline, 1.9% beat)
- Adjusted EPS: $0.71 vs analyst estimates of $0.58 (21.4% beat)
- Adjusted EBITDA: $60.23 million vs analyst estimates of $91.21 million (17.5% margin, 34% miss)
- Revenue Guidance for Q1 CY2026 is $285 million at the midpoint, above analyst estimates of $263.3 million
- Operating Margin: 6.5%, down from 14.3% in the same quarter last year
- Sales Volumes fell 23% year on year (26.2% in the same quarter last year)
- Market Capitalization: $6.58 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Enphase’s Q4 Earnings Call
- Philip Shen (ROTH Capital Partners) asked about sales linearity and whether Q2 revenue would improve from Q1's low point. CEO Badrinarayanan Kothandaraman confirmed an expected sequential increase, citing tailwinds from higher utility rates and new financing options.
- Brian Lee (Goldman Sachs) questioned the impact and duration of reciprocal tariffs on margins. Kothandaraman responded that ongoing innovation—especially the IQ9 microinverter and fifth-generation battery—would help offset tariff pressures.
- Praneeth Satish (Wells Fargo) inquired about the expansion timeline for prepaid lease pilots and whether nationwide coverage was realistic by year-end 2026. Kothandaraman stated the company is still piloting but aims to scale quickly once operational cycles are validated.
- Colin Rusch (Oppenheimer) pressed for clarity on channel inventory levels, particularly in Europe and Australia. Kothandaraman answered that inventory is at normal or lean levels and managed tightly.
- Christopher Dendrinos (RBC Capital Markets) asked about the impact of recent price cuts in Europe on demand. Kothandaraman indicated the reductions were implemented to address competitive pressures and expects them to improve future demand.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be monitoring (1) the pace and breadth of prepaid lease program adoption and its effect on sales volumes, (2) the commercial impact of new product launches, such as the IQ9 microinverter and fifth-generation battery, and (3) further expansion into commercial solar and EV charging markets. Execution on cost reduction initiatives and the ability to maintain gross margins despite tariffs and competitive pressures remain key indicators.
Enphase currently trades at $50.15, up from $37.28 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
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