Enphase Energy sidesteps logistics challenges to post record quarterly revenue

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Enphase will start shipments of its IQ8 microinverters to Europe and Australia in the second half of the year. Image: Enphase.

Microinverter supplier Enphase Energy sidestepped ongoing global logistics challenges in the opening quarter of 2022 to post record quarterly revenues.

Enphase posted revenues of US$441.3 million in the three months ending 31 March 2022, passing the top end of its guidance for the period, despite a 6% drop in sequential microinverter shipments, falling to 2.8 million units or 1,022MWdc.

Shipments of its battery energy storage product continued to climb, however, recording a 20% quarterly increase to 120.4MWh.

The company expects to introduce the latest iteration of its IQ series of microinverters, the IQ8, to Europe and Australia during the second half of 2022 after launching in the US late last year.

Speaking to investors and analysts following the results disclosure, Enphase chief executive Badri Kothandaraman stated supply chains are still “under stress”, but its microinverter manufacturing remained stable after it had qualified alternative suppliers.

Nevertheless, Kothandaraman said the business was remaining “vigilant” in regards to the global supply chain.

Kothandaraman added that Enphase’s quarterly manufacturing capacity had surpassed 5 million, with Mexico leading the way with 2.25 million. 1.5 million units are manufactured in India with the rest coming from China.

An automated factory in Romania is currently under construction as part of a partnership with Flex and will be operational in Q1 2023. It will have a quarterly capacity of 750,000 units which will “support the increased demand and to improve delivery times to customers in Europe” added Kothandaraman.

Meanwhile, in terms of batteries shipments to Europe, the company is currently shipping them to Germany and Belgium and will plan on entering newer markets in Europe during the year.

It is also on track to add a third cell pack supplier in the second half of the year, but has not disclosed how much it will add to the current total capacity of 180MWh per quarter.

Lead times for the batteries are still at 14 to 16 weeks similar to the previous quarter due to the ongoing global logistic challenges, however these could come down once port congestion and shipping constraints improve.

In guidance for Q2 2022, Enphase has forecast revenue to be within US$490-520 million, including shipments of 130 – 140MWh of battery energy storage products.

“Our overall customer demand for Q2 is quite robust for both microinverters and batteries and exceeds the higher end of our guidance range. The component availability is better than what we have experienced in the last 18 months, but there are still global challenges, which are not specific to Enphase. We remain optimistic that the lead times will come down by the end of this year,” said Kothandaraman.

Analyst commentary was sourced from Motley Fool.

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