Enphase Energy hit by low Q2 demand, targets ‘significant growth’ in Europe

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Image: Enphase Energy.

Microinverter supplier Enphase Energy saw its Q2 revenue shrink 6% year-on-year as it was affected by reduced demand as a result of COVID-19.

Total revenue for Q2 stood at US$125.5 million, 39% lower than the US$205.5 million reported in the previous quarter and down 6% on the corresponding period a year ago.

Microinverter shipments were down 45% from Q1 to 355MW, representing around 1.09 million units, and were a reduction on the 416MW shipped in Q2 2019.

California-based Enphase also said it posted a GAAP net loss for Q2 2020 of US$47.3 million, compared to net income of US$68.9 million for the first quarter of 2020.

In a conference call with analysts, Enphase CEO Badri Kothandaraman said the company did well to navigate the “difficult macro environment” caused by coronavirus.

“COVID-19 created a significant downward pressure on demand during the second quarter of 2020,” he said. “With many countries implementing shelter-in-place restrictions, all aspects of daily life were impacted.”

While the US market was the company’s hardest-hit region as a result of solar insulation shutdowns in California and several north-eastern states, Europe stood out as a strong performer, with revenues increasing 8% on Q1.

With distributor gains made in new markets such as Germany, Poland and Spain as well as the firm's existing markets of the Netherlands and Belgium, Enphase is now expanding its sales force in all key regions in the continent – and at a higher amount than was previously panned.

Kothandaraman expects the company “to grow significantly” in Europe during Q3 but is doubtful that its target of doubling revenue in the market on an annual basis will be achieved.

During the second quarter, Enphase began shipping its Encharge storage system featuring Ensemble energy management technology. The Enphase Encharge 10 and Encharge 3 storage systems offer scalable battery storage capacities of 10.1kWh and3.4kWh respectively.

The company also announced in June a collaboration with module producer Q CELLS to develop an AC module aimed at the US residential solar market. Combining Enphase’s IQ microinverters and Q CELLS’ ‘Q.ANTUM DUO’ monocrystalline half-cell technology, the new Q.PEAK DUO BLK-G6+/AC modules began shipping last month.

Enphase started to see activity pick up toward June as installers become more proficient in closing online sales and as building departments accelerated online permits.

The company expects Q3 revenue to be in the range of US$160 million – 175 million, lower than the US$180.1 million recorded in the same quarter last year.

“We are optimistic about the resurgence in market demand for the third quarter and excited about the ramp of our Encharge battery storage systems,” said Kothandaraman.

Transcript from Seeking Alpha.

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