TenQ

The Enphase Energy story

Enphase Energy makes rooftop solar microinverters and batteries, with growth dependent on whether storage and financed solar systems can offset weaker U.S. homeowner demand after a federal tax credit expired.

Written from Enphase Energy's own filings with the SEC, and rewritten when it publishes a new earnings release. Updated 2026-09-30.

  • $30.91share price, last close
  • $4.1Bmarket value
  • 13/36TenQ Score checks passed
  • 16.4%growth a year the price assumes

The story in brief

  • Financing shapes demand. By July 2026, Enphase had executed approximately $1.08 billion of agreements with third-party owners, making financed solar projects an important part of its response to weaker homeowner demand.
  • Refunds lifted margins. In the quarter to June 2026, $45.4 million of tariff refunds increased GAAP gross profit and improved GAAP gross margin by 15.6 percentage points.
  • Cash exceeds debt. At June 2026, cash and short-term investments of $938 million exceeded total debt of $573 million, while free cash flow over the last twelve months was $153 million.

What drives the business

  • Enphase has expanded from solar microinverters into an integrated home energy platform covering batteries, load control, EV charging and grid services, with more than 5.1 million residential and commercial systems deployed by December 2025.
  • Solar distributors and installers connect that platform to homeowners, and one unnamed customer accounted for approximately 39% of net revenue in 2025.
  • Agreements executed with third-party owners through July 2026 totaled approximately $1.08 billion, comprising $202.4 million under the 5% ITC Safe Harbor and $878.6 million under the Physical Work Test.
  • In the quarter to June 2026, Enphase shipped approximately 1.59 million IQ Microinverters and 113.8 MWh of IQ Batteries, with more than 25,000 installers worldwide certified to install its batteries.
  • Revenue reached $291.9 million in the quarter to June 2026, including $84.3 million of safe harbor revenue, as European revenue increased approximately 35% from the preceding quarter while U.S. revenue decreased approximately 3%.

What the price assumes

At $30.91, the reverse DCF implies operating earnings, used as a stand-in for free cash flow, grow 16.4% a year for ten years at a 10.2% discount rate.

Enphase delivered operating earnings growth of 18.5% a year over the last 5 years, but the TenQ check sets a lower bar of 11.3%, reflecting that record slowing halfway to 4%.

The implied growth exceeds that moderated bar despite revenue growth of -10.4% over the last twelve months and -14.2% a year over the last three years.

Value ENPH on your own assumptions

What could change the story

  • The federal 30% Residential Clean Energy Tax Credit ended on December 31, 2025, reducing near-term demand from homeowners paying with cash or loans and increasing the importance of financing.
  • Safe harbor agreement execution and the timing of revenue recognition and cash flows can make the large third-party owner agreements an uneven source of reported growth.
  • The 60.0% GAAP gross margin in the quarter to June 2026 benefited materially from tariff refunds, so it does not establish a recurring margin level.
  • An operating margin of 8.3% fell below the TenQ sector comparison of 10.7%, while return on capital employed of 4.7% missed the check’s 10.0% bar.
  • Stock-based pay of $197 million exceeded free cash flow of $153 million over the last twelve months, making equity compensation a substantial cost alongside positive cash generation.

What to watch next

  • For the quarter to September 2026, Enphase expects revenue of $290.0 million to $320.0 million, including approximately $75.0 million of safe harbor shipments, making revenue outside those shipments an important measure of demand.
  • Battery shipment guidance of 130 to 150 MWh provides a direct comparison with 113.8 MWh shipped in the quarter to June 2026.
  • Guidance calls for GAAP gross margin of 42.0% to 45.0% and non-GAAP gross margin of 44.0% to 47.0%, both including approximately 2 percentage points of reciprocal tariff impact, alongside non-GAAP operating expenses of $76.0 million to $80.0 million.
  • Enphase expects a full-system IQ Solid-State Transformer demonstration later in 2026, while its potential multi-gigawatt AI infrastructure opportunities remain at customer engagement and proposal stages.

Sources

Back to the ENPH report