Enphase (ENPH) Q1 FY26 earnings call: guidance and Q&A

What are the safe harbor expectations for Q3, and what are the core revenue trends for Q3 and Q4 given the weaker start to the year?

Badri estimated Q3 safe harbor revenue between $40 million and $50 million. He acknowledged Q1 and Q2 sell-through expectations are 10-15% below prior views due to TPO financing challenges and unfavorable weather. He highlighted Propel's momentum (200 installers, 200 originations/week, 84% battery attach), green shoots in Europe (significant April battery activation increases), and upcoming new products (5th gen battery, bidi charger, commercial battery, IQ9S) as potential drivers for the second half.

“But if I were to give you a number that between $40 million and $50 million is what I expect safe harbor revenue for Q3, and that's my opinion there.”

asked by Brian Lee · answered by Badrinarayanan Kothandaraman

Can you provide a sense of the revenue dollar opportunity for IQ SST and how Enphase's offering differs from competitors?

Raghu emphasized Enphase's distributed architecture, single-stage resonant converter, high-frequency design, custom ASIC, and GaN devices. He highlighted sub-millisecond response times, the potential to eliminate side car batteries, high reliability (targeting 5-9s uptime), U.S. supply chain, and low EMI signature as key differentiators. Badri added that over 80 engineers are working on SST, with a full system demo targeted for year-end, and revenue expected from 2028.

“So think about it our single-stage resonant converter, which is what is our core technology that we have developed since the inception of the company, high-frequency design, soft switching, custom ASIC and then wide band gap devices.”

asked by Brian Lee · answered by Raghuveer Belur

What was the C&I revenue in Q1, and what is the outlook for Q2 and beyond, including expected growth?

Badri stated that Q1 C&I revenue was in the 'high single digits,' slightly above $5 million. He expects the C&I business to be lumpy initially but to grow continuously, driven by the safe harbor window for commercial installers and new IQ9 products (IQ9 and the upcoming IQ9S).

“We did in Q1 a little more than $5 million. We did in the high single digits. A little more than $5 million.”

asked by Praneeth Satish · answered by Badrinarayanan Kothandaraman

Where is the channel inventory primarily located, in the U.S. or Europe?

Badri confirmed that the channel inventory is "mostly the U.S."

“It's mostly the U.S.”

asked by Colin Rusch · answered by Badrinarayanan Kothandaraman

Given the Q2 sell-through weakness and TPO challenges, what is the qualitative and quantitative outlook for Q3 and Q4, particularly regarding the Propel program?

Badri reiterated the 10-15% sell-through shortfall for Q1/Q2. He expressed a 'wish' to reach 500 Propel originations per week by the end of Q4. He highlighted Propel's potential, Europe's green shoots, IQ Battery 10C progress, and small commercial opportunities as key drivers, emphasizing focus on controllable factors despite market turbulence.

“My wish is to basically get up to a run rate of 500 originations a week by the end of Q4. And that's my wish.”

asked by Philip Shen · answered by Badrinarayanan Kothandaraman

What are the limiting factors for expanding the Propel program to other states, and is its positive impact more for 2027 and beyond?

Badri explained that the pilot phase is crucial for validating the entire chain from originations to monetization, which can take 4-5 months, ensuring flawless execution and ease of business for installers. He agreed that the positive impact of Propel is expected more in the second half of the year and into 2027.

“All of that needs to execute flawlessly. Ease of doing business for the installers is very critical. We cannot keep changing parameters on the installers. We need to be able to -- TPO needs to be able to monitor -- I mean, to monetize the tax credits properly.”

asked by Eric Stine · answered by Badrinarayanan Kothandaraman