- Revenue and Margin Performance Reported $343.3M revenue, 46.1% non-GAAP gross margin (above guidance), and $37.8M free cash flow in Q4.
- Product Shipments and Backlog Shipped 1.55M microinverters and 150MWh batteries; IQ9 microinverter backlog exceeds 50,000 units for Q1 2026.
- Battery Innovation Launched fifth-gen battery with 50% higher energy density and 40% lower cost, targeting pilots in Q3 2026 and shipments by Q4.
- Market Dynamics U.S. revenue fell 13% QoQ due to $20.3M safe harbor decline vs. Q3’s $70.9M, but sell-through rose 21% to a 2+ year high.
Financial Performance
The company's financial performance was strong, with a non-GAAP operating income of 23% as a percentage of revenue. The GAAP operating expenses were $129.6 million, while non-GAAP operating expenses were $78.8 million. The company's guidance for Q1 2026 revenue is between $270 million and $300 million, with a GAAP gross margin of 40% to 43%. The revenue guidance includes approximately $35 million of safe harbor revenue.
Operational Highlights
Enphase Energy shipped 1.55 million microinverters and 150-megawatt hours of batteries in Q4. The company's global customer service NPS was 79% in Q4, up from 77% in Q3. The average call wait time was 1.6 minutes, indicating a high level of customer satisfaction. The company is making progress in its battery business, with the IQ batteries continuing to ramp up in the U.S.
Valuation Metrics
Enphase Energy's current valuation metrics indicate a P/E Ratio of 39.31, a P/B Ratio of 6.23, and a P/S Ratio of 4.59. The EV/EBITDA ratio stands at 24.03. With an ROE of 18.25% and an ROIC of 4.8%, the company's profitability metrics are notable. Analysts estimate next year's revenue growth at 10.9%, which may impact the company's valuation multiples.
Growth Prospects
The company is making significant progress in its fifth-generation battery development, which is expected to have a higher energy density and lower cost. Enphase Energy is also exploring prepaid lease programs, which could offset the impact of the 25D tax credit going away. The company's storage business is expected to boom, with every state likely to adopt battery storage in the next 10 years.
Regional Performance
In Europe, Enphase Energy's revenue decreased by 29% in Q4 compared to Q3, while sell-through decreased by 23%. The company is seeing a potential for predemand in the Netherlands ahead of the loss of net metering, with customers wanting to self-consume early and avoid a gap in their solar system's value.