FREMONT, Calif., Feb. 09, 2021 (GLOBE NEWSWIRE) — Enphase Energy, Inc. (NASDAQ: ENPH), a global energy management technology company and the world’s leading supplier of microinverter-based solar-plus-storage systems, announced today financial results for the fourth quarter of 2020, which included the summary below from its President and CEO, Badri Kothandaraman.
We reported revenue of $264.8 million in the fourth quarter of 2020, along with 40.2% for non-GAAP gross margin. We shipped approximately 762 megawatts DC, or 2,292,132 microinverters.
The financial highlights for the fourth quarter of 2020 are listed below. The GAAP numbers include an approximate $16.5 million approved refund on tariffs that were previously paid on microinverters imported to the U.S. from China. The tariff refund is excluded from all non-GAAP numbers.
- Revenue of $264.8 million
- Cash flow from operations of $84.2 million; ending cash balance of $679.4 million
- GAAP gross margin of 46.0%; non-GAAP gross margin of 40.2%
- GAAP operating income of $79.1 million; non-GAAP operating income of $72.4 million
- GAAP net income of $73.0 million; non-GAAP net income of $71.3 million
- GAAP diluted earnings per share of $0.50; non-GAAP diluted earnings per share of $0.51
Our revenue and earnings for the fourth quarter of 2020 are provided below, compared with those of the prior quarter and the year ago quarter:
(In thousands, except per share data and percentages)
| GAAP | Non-GAAP | ||||||||||||||||||||||
| Q4 2020 | Q3 2020 | Q4 2019* | Q4 2020 | Q3 2020 | Q4 2019* | ||||||||||||||||||
| Revenue | $ | 264,839 | $ | 178,503 | $ | 210,032 | $ | 264,839 | $ | 178,503 | $ | 210,032 | |||||||||||
| Gross margin | 46.0 | % | 53.2 | % | 37.1 | % | 40.2 | % | 41.0 | % | 37.3 | % | |||||||||||
| Operating expenses | $ | 42,824 | $ | 43,222 | $ | 33,439 | $ | 34,193 | $ | 29,571 | $ | 26,140 | |||||||||||
| Operating income | $ | 79,114 | $ | 51,759 | $ | 44,442 | $ | 72,356 | $ | 43,675 | $ | 52,277 | |||||||||||
| Net income | $ | 72,991 | $ | 39,362 | $ | 116,666 | $ | 71,342 | $ | 41,760 | $ | 52,038 | |||||||||||
| Basic EPS | $ | 0.57 | $ | 0.31 | $ | 0.95 | $ | 0.56 | $ | 0.33 | $ | 0.42 | |||||||||||
| Diluted EPS | $ | 0.50 | $ | 0.28 | $ | 0.88 | $ | 0.51 | $ | 0.30 | $ | 0.39 | |||||||||||
| * Revenue for the fourth quarter of 2019 of $210.0 million included approximately $36.4 million of safe harbor revenue. | |||||||||||||||||||||||
Our revenue and earnings for the fiscal year 2020 are given below, compared with those of the prior year:
(In thousands, except per share data and percentages)
| GAAP | Non-GAAP | ||||||||||||||
| FY 2020 | FY 2019 | FY 2020 | FY 2019 | ||||||||||||
| Revenue | $ | 774,425 | $ | 624,333 | $ | 774,425 | $ | 624,333 | |||||||
| Gross margin | 44.7 | % | 35.4 | % | 40.1 | % | 35.7 | % | |||||||
| Operating expenses | $ | 159,542 | $ | 118,516 | $ | 118,296 | $ | 95,943 | |||||||
| Operating income | $ | 186,439 | $ | 102,729 | $ | 192,504 | $ | 126,952 | |||||||
| Net income | $ | 133,995 | $ | 161,148 | $ | 188,526 | $ | 124,205 | |||||||
| Basic EPS | $ | 1.07 | $ | 1.38 | $ | 1.50 | $ | 1.06 | |||||||
| Diluted EPS | $ | 0.95 | $ | 1.23 | $ | 1.37 | $ | 0.95 | |||||||
We accelerated our progress on digital transformation. We recently completed the acquisition of Sofdesk Inc. in the first quarter of 2021. Sofdesk is a leading provider of design software for residential solar installers and roofing companies. We also recently signed a definitive agreement to acquire the Solar Design Services business of DIN Engineering Services LLP. The business provides proposal drawings and permit plan sets to installers with rapid turnaround and high precision. These acquisitions are expected to enhance the capabilities of our digital platform, enabling our installers to simplify the sales process and improve the buying experience for homeowners.
Our non-GAAP gross margin was 40.2% in the fourth quarter of 2020, compared to 41.0% in the third quarter due to higher shipping and logistics costs. We experienced constraints in the global semiconductor supply chain during the quarter and expedited products to meet customer demand. Non-GAAP operating expenses increased to $34.2 million in the fourth quarter of 2020, compared to $29.6 million in the prior quarter, primarily due to increased hiring and R&D. Non-GAAP operating income was $72.4 million, compared to $43.7 million in the prior quarter.
We exited the fourth quarter of 2020 with $679.4 million in cash and generated $84.2 million in cash flow from operations. Inventory was $41.8 million at the end of the fourth quarter of 2020, compared to $37.5 million at the end of the third quarter of 2020. The sequential increase in inventory was driven by the planned increase of raw materials for our Enphase Storage systems in anticipation of the production ramp in 2021.
Strong demand for our microinverter systems across all regions continued in the fourth quarter of 2020, while shipments of our newly ramped Enphase Storage systems increased approximately 35% compared to the third quarter. We achieved record microinverter system sell-through from distributors to installers in the fourth quarter of 2020, resulting in lower than usual channel inventory as we exited the quarter.
For the full year 2020, revenue was $774.4 million, compared to $624.3 million in 2019. We generated a record $198.9 million free cash flow in 2020, compared to $124.3 million in 2019. GAAP net income was $134.0 million, resulting in diluted earnings per share of $0.95. Non-GAAP net income was $188.5 million, resulting in diluted earnings per share of $1.37. We are pleased to report that 2020 was a record year for non-GAAP profitability and free cash flow generation.
BUSINESS HIGHLIGHTS
On Nov. 9, 2020, Enphase Energy announced that Cutler Bay Solar Solutions, Florida’s largest family-owned solar-plus-storage installation company, deployed more than 1.5 MWh of Enphase Storage systems. The installations include a combination of Enphase Encharge 10™ and Encharge 3™ storage systems, which offer usable and scalable battery storage capacities of approximately 10.1 kWh and 3.4 kWh, respectively.
On Nov. 12, 2020, Enphase Energy announced a strategic partnership with DMEGC Solar to develop high-efficiency Enphase Energized™ AC modules (ACM) for the European residential solar market. These ACMs are currently available in France and the Netherlands.
On Dec. 14, 2020, Enphase Energy announced the launch of its Enphase Installer Network (EIN) in Australia. The EIN recognizes a network of trusted installers that deliver exceptional homeowner experiences using Enphase products and enables them to grow their business with a range of innovative digital tools and exclusive benefits.
On Jan. 6, 2021, Enphase Energy announced the expansion of its long-term relationship with Sunnova International Inc. to include Enphase Storage systems. Sunnova will empower its network of solar dealers in the U.S. to provide a simple upgrade path for existing Enphase homeowners as well as homeowners who are new to solar and storage.
On Jan. 14, 2021, Enphase Energy announced that Solar Optimum, an EIN Platinum member, will start offering Enphase Storage systems with a team dedicated to growing Enphase storage adoption and promoting Enphase’s all-in-one solar plus storage products as the premier home energy management solution.
On Jan. 26, 2021, Enphase Energy announced the closing of its acquisition of Sofdesk Inc., headquartered in Montreal, Canada. Sofdesk’s Solargraf™ integrated software platform offers the industry’s leading digital tools and services designed to simplify and accelerate the end-to-end sales process across the residential solar industry. Sofdesk also offers Roofgraf™, a software product that enables roofing contractors to generate homeowner proposals using advanced machine learning technology.
On Feb. 3, 2021, Enphase Energy announced that Momentum Solar will now promote and install Enphase Storage systems in addition to Enphase Solar systems as its all-in-one home energy management solution to homeowners. Momentum Solar currently serves customers throughout the U.S. with operations in New Jersey, New York, Connecticut, Pennsylvania, Florida, Texas, California, and Nevada.
On Feb. 8, 2021, Enphase Energy announced that it has agreed to acquire the Solar Design Services business of DIN Engineering Services LLP. Based in Noida, India, the business is a leading provider of outsourced proposal drawings and permit plan sets for residential solar installers in North America. The acquisition is subject to customary closing conditions and regulatory approvals and is currently expected to close by March 31, 2021.
FIRST QUARTER 2021 FINANCIAL OUTLOOK
For the first quarter of 2021, Enphase Energy estimates both GAAP and non-GAAP financial results as follows:
- Revenue to be within a range of $280.0 million to $300.0 million; revenue guidance does not include any safe harbor shipments
- GAAP gross margin to be within a range of 37.0% to 40.0%, as there are no remaining tariff refunds pending approval; non-GAAP gross margin to be within a range of 38.0% to 41.0%, excluding stock-based compensation expenses
- GAAP operating expenses to be within a range of $64.0 million to $67.0 million, including $22.0 million estimated for stock-based compensation expenses and acquisition related costs and amortization
- Non-GAAP operating expenses to be within a range of $42.0 million to $45.0 million, excluding $22.0 million estimated for stock-based compensation expenses and acquisition related costs and amortization
All estimates for the first quarter of 2021 include Sofdesk, but do not include DIN’s Solar Design Services business.
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Use of Non-GAAP Financial Measures
The Company has presented certain non-GAAP financial measures in this press release. To view a description of non-GAAP financial measures used and the non-GAAP reconciliation schedule for the periods presented, click here.
Conference Call Information
Enphase Energy will host a conference call for analysts and investors to discuss its fourth quarter 2020 results and first quarter 2021 business outlook today at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). The call is open to the public by dialing (877) 644-1284; participant passcode 2196494. A live webcast of the conference call will also be accessible from the “Investor Relations” section of the Company’s website at investor.enphase.com. Following the webcast, an archived version will be available on the website for approximately one year. In addition, an audio replay of the conference call will be available by calling (855) 859-2056; participant passcode 2196494, beginning approximately one hour after the call.
Forward-Looking Statements
This press release contains forward-looking statements, including statements related to Enphase Energy’s expectations as to future financial performance, expense levels, liquidity sources, the capabilities, advantages, and performance of our technology and products, including the ability to simplify and speed up solar installation sales processes, our business strategies and anticipated demand for our products, the capabilities and performance of our partners, and the impact to homeowners. These forward-looking statements are based on the Company’s current expectations and inherently involve significant risks and uncertainties. Enphase Energy’s actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of certain risks and uncertainties including those risks described in more detail in the Company’s most recent Annual Report on Form 10-K and other documents on file with the SEC and available on the SEC’s website at www.sec.gov. Enphase Energy undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events or changes in its expectations, except as required by law.
A copy of this press release can be found on the investor relations page of Enphase Energy’s website at investor.enphase.com.
About Enphase Energy, Inc.
Enphase Energy, a global energy technology company, delivers smart, easy-to-use solutions that manage solar generation, storage and communication on one intelligent platform. The Company revolutionized the solar industry with its microinverter technology and produces a fully integrated solar-plus-storage solution. Enphase has shipped more than 32 million microinverters, and approximately 1.4 million Enphase-based systems have been deployed in more than 130 countries. For more information, visit www.enphase.com.
Enphase Energy, Enphase, the E logo, Encharge 3, Encharge 10, Enphase Energized, and other trademarks or service names are the trademarks of Enphase Energy, Inc. Solargraf and Roofgraf are the trademarks of Sofdesk Inc. Other names are for informational purposes and may be trademarks of their respective owners.
Contact:
Adam Hinckley
Enphase Energy, Inc.
Investor Relations
ir@enphaseenergy.com
+1-707-763-4784 x7354
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