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Core Insights - Enphase Energy reported Q3 2025 revenue of $410.4 million, a 13% increase from $363.2 million in Q2, marking the highest revenue in two years, driven by stronger U.S. demand and safe-harbor sales [1][2][6] - Non-GAAP EPS reached $0.90, reflecting a 30% increase from $0.69 in Q2, indicating a strong sequential earnings recovery [1][6] - The company anticipates a sequential decline in Q4 due to softer volumes and tariff headwinds [1] Financial Performance - Q3 revenue: $410.4 million, up 13% from Q2 [6] - Non-GAAP Gross Margin: 49.2%, up from 48.6%, despite a 4.9-percentage-point drag from tariffs [2][6] - Non-GAAP Operating Income: $123.4 million, a 25% increase from $98.6 million [6] - Non-GAAP Net Income: $117.3 million, up 30% from $89.9 million [6] - Free Cash Flow: $5.9 million, down from $18.4 million due to working-capital movements [6] Revenue Breakdown - U.S. Revenue: Increased approximately 29% quarter-over-quarter, driven by robust installer activity and safe-harbor shipments [6] - Europe Revenue: Decreased about 38%, reflecting demand softness and inventory correction [6] Product and Operations - Enphase shipped approximately 1.77 million microinverters and a record 195 MWh of IQ Batteries in Q3 [2] - The installer base for IQ Batteries expanded to over 19,500 globally [6] - New product rollout includes the 4th-gen Enphase Energy System in the U.S. [6] Q4 2025 Guidance - Expected revenue: $310–$350 million, excluding safe-harbor shipments [6] - Gross margin guidance: GAAP 40–43%; non-GAAP 42–45%, each including approximately 5 percentage points tariff impact [6] - Operating expenses: GAAP $130–134 million; non-GAAP $77–81 million [6]

Core Insights - Enphase Energy reported a revenue of $410 million, significantly exceeding estimates, driven by record battery shipments and strong margins [1] Financial Performance - The company achieved a revenue of $410 million, surpassing analyst expectations [1] - Record battery shipments contributed to the overall revenue growth and margin strength [1] Market Position - Enphase Energy's performance indicates a strong position in the renewable energy sector, particularly in battery technology [1] - The increase in battery shipments reflects growing demand in the market [1]

Core Viewpoint - Enphase Energy has forecasted fourth-quarter revenue that falls below Wall Street estimates, indicating potential challenges in meeting market expectations [1] Company Summary - Enphase Energy reported that U.S. President Donald Trump's tariffs have negatively impacted its profit margins, suggesting external economic factors are affecting the company's financial performance [1]

Financial Performance - Enphase Energy reported quarterly earnings of $0.9 per share, exceeding the Zacks Consensus Estimate of $0.62 per share, and up from $0.65 per share a year ago, representing an earnings surprise of +45.16% [1] - The company posted revenues of $410.43 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 13.44%, compared to year-ago revenues of $380.87 million [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.67 on revenues of $368.58 million, and for the current fiscal year, it is $2.64 on revenues of $1.45 billion [7] - The estimate revisions trend for Enphase Energy was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The solar industry, to which Enphase Energy belongs, is currently ranked in the top 38% of over 250 Zacks industries, suggesting that stocks in the top 50% outperform those in the bottom 50% by more than 2 to 1 [8] - Another company in the same industry, Shoals Technologies Group, is expected to report quarterly earnings of $0.12 per share, reflecting a year-over-year change of +50%, with revenues anticipated to be $130.33 million, up 27.6% from the previous year [9][10]

Financial Data and Key Metrics Changes - The company reported quarterly revenue of $410.4 million, the highest level in two years, with a gross margin of 49% [5][29] - Non-GAAP net income for Q3 was $117.3 million, resulting in a non-GAAP diluted earnings per share of $0.90, compared to $0.69 in Q2 [30][31] - The company generated free cash flow of $5.9 million in Q3 [5] Business Line Data and Key Metrics Changes - The company shipped 1.77 million microinverters and a record 195 megawatt-hours of batteries in Q3 [5] - Non-GAAP gross margin for Q3 was 49.2%, compared to 48.6% in Q2 [29] - The fourth-generation battery constituted 40% of total battery shipments in the U.S. during Q3 [43] Market Data and Key Metrics Changes - U.S. revenue increased by 29% in Q3 compared to Q2, while international revenue decreased by 38% [9][11] - The overall sell-through of products was up 9% in Q3 compared to Q2 [9] - In Europe, the company faced challenges, with revenue decreasing significantly, particularly in the Netherlands and France [9][11] Company Strategy and Development Direction - The company is focusing on expanding its battery retrofit opportunities and enhancing its product offerings, including the launch of the IQ9 GAN microinverter [17][22] - The strategy includes transitioning to non-China sources for battery components and leveraging partnerships to capture market share [17][18] - The company anticipates a rebound in the second half of 2026 driven by rising power prices and new financing solutions [17][27] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding Q4 revenue guidance due to inventory management and the impact of safe harbor revenue pulled into Q3 [15][39] - The company expects a larger than normal seasonal decline in Q1 2026 but anticipates recovery through the rest of the year [16][17] - Management highlighted the importance of innovation in response to competition, particularly in the European market [52] Other Important Information - The company is working closely with TPO partners on safe harbor planning and is well-positioned to support both methods of safe harbor [15][66] - The company has approximately $280 million of production tax credit receivable on its balance sheet [31][32] - The company is evaluating opportunities to accelerate the monetization of its production tax credits [33] Q&A Session Summary Question: Inventory dynamics going into Q1 next year - Management anticipates an overall sell-through for Q4 to be between $350 million to $400 million, aiming for 8 to 10 weeks' worth of inventory in the channel [38] Question: Pricing dynamics for the new battery - Management stated that they are not raising prices and are focused on capturing market share, despite tariffs impacting costs [40][41] Question: Non-U.S. revenue performance - Management acknowledged seasonality and competition in Europe, particularly in the Netherlands and France, and emphasized the potential for battery sales in 2026 [46][48] Question: Margin guidance for Q4 - Management explained that margins are impacted by reciprocal tariffs, with expectations of a gross margin of 43.5% for Q4 [54][59] Question: Safe harbor approach using the physical work test - Management discussed the custom product approach for TPO partners and the benefits of the physical work test for revenue recognition [63][66] Question: Prepaid lease concept and CNI market outlook - Management expressed optimism about the prepaid lease model and its potential to revive the market, while also noting opportunities in the small-scale CNI market [67][68]

Financial Data and Key Metrics Changes - Enphase reported quarterly revenue of $410.4 million, the highest level in two years, with a gross margin of 49% [5][29] - Non-GAAP gross margin for Q3 was 49.2%, compared to 48.6% in Q2, while GAAP gross margin was 47.8%, up from 46.9% in Q2 [29][30] - Free cash flow generated in Q3 was $5.9 million, with total cash equivalents and marketable securities at $1.48 billion [5][31] Business Line Data and Key Metrics Changes - The company shipped 1.77 million microinverters and a record 195 MW-hours of batteries in Q3 [5] - U.S. battery production increased to 67.5 MW-hours in Q3 from 46.9 MW-hours in Q2 [7] - Safe harbor revenue for Q3 was $70.9 million, compared to $40.4 million in Q2 [9][29] Market Data and Key Metrics Changes - U.S. revenue increased by 29% in Q3 compared to Q2, while international revenue decreased by 38% [9] - In Europe, overall sell-through decreased by 27%, negatively impacting revenue by approximately $25 million compared to Q2 [9][11] - The U.S. and international revenue mix for Q3 was 85% and 15%, respectively [9] Company Strategy and Development Direction - Enphase is focusing on enhancing customer experience through AI-powered assistance and improving operational efficiency [7][8] - The company is transitioning its supply chain away from China to mitigate tariff impacts and is on track to source non-China cell packs by the end of the year [8][17] - Enphase aims to capture growth in the battery retrofit market in the Netherlands, estimating a $2 billion opportunity [10] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for Q4, anticipating elevated demand due to homeowners seeking to capture expiring tax credits [14][15] - The company expects a larger than normal seasonal decline in Q1 2026, estimating revenue of $250 million, but anticipates recovery in the second half of 2026 [16][17] - Management highlighted three external drivers for potential recovery: rising U.S. power prices, declining interest rates, and new financing solutions [17] Other Important Information - Enphase is actively engaged in over 53 virtual power plant (VPP) programs worldwide, indicating a strong market presence [21] - The company is launching new products, including the IQ9 commercial microinverter and IQ EV Charger, to strengthen its market position [22][23] Q&A Session Summary Question: Can you talk about inventory dynamics going into Q1 next year? - Management indicated a cautious approach, aiming for 8 to 10 weeks of inventory in the channel as they enter Q1 [38] Question: Can you discuss pricing dynamics for the new battery? - Management confirmed no price increases are being implemented, focusing instead on capturing market share despite tariff impacts [40] Question: What is the outlook for non-U.S. revenue? - Management acknowledged seasonality and competition in Europe, particularly in the Netherlands and France, but expressed optimism for future growth through battery sales [45][46] Question: Can you clarify the margin guidance for Q4? - Management explained that the anticipated decline in margins is primarily due to a 5% reciprocal tariff impact, with expectations of recovery as battery costs decrease [52][56]

Financial Data and Key Metrics Changes - Enphase Energy reported quarterly revenue of $410.4 million, the highest level in two years, with a gross margin of 49% and operating income of 30% on a non-GAAP basis [4][25][26] - Non-GAAP diluted earnings per share increased to $0.90 for Q3, compared to $0.69 in Q2, while GAAP diluted earnings per share rose to $0.50 from $0.28 [27][29] - The company generated free cash flow of $5.9 million and exited Q3 with total cash and marketable securities of $1.48 billion [4][27] Business Line Data and Key Metrics Changes - Enphase shipped 1.77 million microinverters and a record 195 megawatt-hours of batteries in Q3 [4][25] - The U.S. battery production increased to 67.5 megawatt-hours in Q3 from 46.9 megawatt-hours in Q2 [5] - Safe harbor revenue for Q3 was $70.9 million, up from $40.4 million in Q2 [7][25] Market Data and Key Metrics Changes - U.S. revenue increased by 29% in Q3 compared to Q2, while international revenue decreased by 38% [7][8] - The overall sell-through of products was up 9% in Q3 compared to Q2 [7] - In Europe, the business environment remains challenging, with significant declines in revenue and sell-through, particularly in the Netherlands and France [8][9][10] Company Strategy and Development Direction - Enphase is focusing on enhancing customer experience through AI-powered assistance and improving operational efficiency [5][6] - The company is transitioning its supply chain away from China to mitigate tariff impacts and is on track to source non-China cell packs by the end of 2025 [6][12] - Enphase plans to capture growth opportunities in the battery retrofit market and expand into the 480-volt commercial solar market with new products [14][23] Management's Comments on Operating Environment and Future Outlook - Management anticipates a seasonal decline in Q1 2026 following the expiration of the 25(d) tax credit, estimating revenue of $250 million for that quarter [13][61] - External drivers such as rising power prices, declining interest rates, and new financing solutions are expected to support recovery in the second half of 2026 [14][22] - The company remains confident in its ability to execute and deliver growth across various vectors despite uncertainties in the market [15][23] Other Important Information - Enphase is actively engaged in over 53 virtual power plant (VPP) programs worldwide, indicating a strong focus on partnerships and innovative energy solutions [17] - The company is preparing to launch its fifth-generation battery system, which is expected to significantly reduce system costs [23][24] Q&A Session Summary Question: Inventory dynamics for Q1 next year - Management indicated a cautious approach to inventory, aiming for 8 to 10 weeks' worth as they enter Q1 2026, with a focus on maintaining a healthy channel setup [33] Question: Pricing dynamics for new battery products - Management confirmed no price increases for the new battery, focusing on capturing market share despite tariff impacts on costs [34] Question: Non-U.S. revenue performance and recovery outlook - Management acknowledged seasonality and competition in Europe, particularly in the Netherlands and France, but expressed optimism for recovery through battery sales and new product introductions [38][40] Question: Margin guidance and impacts - Management explained that margins are impacted by reciprocal tariffs, particularly on batteries, and indicated expectations for recovery as costs decrease with new product launches [45][46] Question: Safe harbor approach and physical work test - Management discussed the custom product approach for the physical work test, emphasizing its benefits for TPO partners and revenue stability [52][54] Question: Prepaid lease concept and CNI market outlook - Management expressed interest in the prepaid lease model and noted potential strength in the small-scale CNI market as residential EPCs shift focus [56][60]

Product Developments - The company’s IQ8 Microinverters have a peak output power of 480 W and are designed to maximize energy production, supporting higher powered solar modules [166]. - The new IQ Battery 10C is designed to be 30% more energy-dense and occupy 60% less wall space compared to previous models, enhancing the overall energy management system [173]. - The company’s IQ Energy Management solution integrates with solar and battery systems to enable smart management of variable electricity rates, enhancing control over energy consumption [173]. - The company’s new IQ9N-3P Commercial Microinverter, powered by advanced gallium nitride technology, simplifies design complexity and lowers installation costs for commercial projects [169]. - The company announced the launch of the new IQ Bidirectional EV Charger architecture, featuring vehicle-to-home and vehicle-to-grid capabilities, enhancing energy management for homeowners [176]. - The IQ EV Charger 2 supports up to 22 kW of charging and has been expanded to 14 countries in Europe, with pre-orders opened in the U.S. in September 2025 [174]. - The company’s IQ Balcony Solar System, launched in Germany and Belgium, allows apartment residents to generate solar energy from limited outdoor spaces [173]. Financial Performance - Net revenues for the three months ended September 30, 2025, increased by $29.6 million, or 8%, to $410.4 million compared to the same period in 2024 [177]. - Microinverter units sold increased by 2% to approximately 1.8 million units, while IQ Batteries shipped increased by 13% to 195.0 MWh during the same period [178]. - Net revenues in the United States rose by $66.0 million, or 23%, to $350.0 million, primarily driven by $70.9 million of microinverter shipments associated with safe harbor transactions [179]. - International net revenues decreased by $36.4 million, or 38%, to $60.4 million, attributed to softening demand in Europe due to slower economic growth and policy changes [180]. - Gross margin for the three months ended September 30, 2025, increased to 47.8%, up from 46.8% in the same period in 2024, driven by a higher proportion of sales from U.S. manufactured products [184][186]. Expenses and Costs - Research and development expenses decreased by $0.6 million, or 1%, to $47.8 million for the three months ended September 30, 2025, primarily due to restructuring initiatives [190]. - Sales and marketing expenses decreased by $1.2 million, or 3%, to $48.4 million for the three months ended September 30, 2025, due to reduced costs from restructuring initiatives [192][193]. - General and administrative expenses increased by $2.9 million, or 10%, to $30.2 million for the three months ended September 30, 2025, mainly due to higher personnel-related expenses [195][196]. - General and administrative expenses increased by $2.2 million, or 2%, in the nine months ended September 30, 2025, primarily due to a $2.3 million rise in personnel-related expenses [197]. - Restructuring and asset impairment charges were $7.8 million in the nine months ended September 30, 2025, compared to $3.8 million in the same period in 2024, representing a 107% increase [200]. Cash Flow and Debt - Cash, cash equivalents, and marketable securities decreased by 16% to $1.48 billion as of September 30, 2025, from $1.77 billion as of September 30, 2024 [212]. - Total debt decreased by 7% to $1.20 billion as of September 30, 2025, down from $1.30 billion as of September 30, 2024 [213]. - The company expects to fund its short-term cash requirements from existing cash, cash equivalents, and marketable securities, as well as cash generated from operations [214]. - Net cash provided by operating activities decreased by $257.4 million for the nine months ended September 30, 2025, compared to the same period in 2024, primarily due to $110.3 million of microinverter shipments associated with prepaid orders [220]. - Net cash provided by investing activities for the nine months ended September 30, 2025, was $83.3 million, primarily from the maturities of $178.8 million of marketable securities, net of purchases [221]. - Net cash used in financing activities for the nine months ended September 30, 2025, was approximately $243.4 million, primarily from the repurchase of common stock totaling $130.0 million under the 2023 Repurchase Program [223]. - The company used $102.2 million towards the settlement of the Notes due 2025 during the nine months ended September 30, 2025 [223]. - The net decrease in cash and cash equivalents for the nine months ended September 30, 2025, was $62.2 million, compared to a decrease of $32.4 million in the same period of 2024 [219]. Market and Regulatory Environment - The One Big Beautiful Bill Act of 2025 introduces significant changes to clean energy tax credit programs, including the expiration of the Investment Tax Credit for residential solar and storage systems on December 31, 2025 [154]. - The prolonged softness in demand has negatively impacted certain distributors and installers, contributing to reduced liquidity and higher allowances for credit losses [164]. - The company is actively exploring alternative suppliers for lithium iron phosphate battery cells, which are currently sourced exclusively from two vendors in China [160]. - Interest income decreased by 20% to $47.4 million in the nine months ended September 30, 2025, down from $58.9 million in the same period in 2024 [205]. - Total other income, net, increased by 11% to $31.0 million in the nine months ended September 30, 2025, compared to $28.0 million in the same period in 2024 [201]. - The income tax provision rose to $32.7 million in the nine months ended September 30, 2025, a 228% increase from $10.0 million in the same period in 2024 [210].

Exhibit 99.1 Enphase Energy Reports Financial Results for the Third Quarter of 2025 FREMONT, Calif., Oct. 28, 2025 - Enphase Energy, Inc. (NASDAQ: ENPH), a global energy technology company and the world's leading supplier of microinverter-based solar and battery systems, announced today financial results for the third quarter of 2025, which included the summary below from its President and CEO, Badri Kothandaraman. We reported quarterly revenue of $410.4 million in the third quarter of 2025, along with 49.2 ...