US microinverter supplier Enphase Energy has published its financial results for the fourth quarter of 2023, which includes a total revenue of US$302.5 million in the quarter, and revenue of US$2.3 billion in the 2023 financial year.
The company’s revenue has fallen for a third consecutive quarter, from US$711 million in the second quarter of 2023 to US$551.1 million in the third quarter of the year, but its gross margin has improved, increasing from 47.5% to 48.5% between the third and fourth quarters of 2023. Enphase’s operating income and net income have also fallen, from US$118 million to a loss of US$10.2 million, and US$114 million to US$20.9 million, respectively.
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Enphase suggested that a decline in equipment sales in Europe contributed to this decline, with a 70% fall in the company’s European revenue between the third and fourth quarters of 2023.
Imports of overseas-made solar equipment are a growing concern for the European solar sector – with the leadership of the European Solar Manufacturing Council telling PV Tech Premium as much earlier this year – and actors in Europe are increasingly interested in manufacturing their own equipment, rather than relying on imports from industry giants such as the US and China.
“The declines were primarily the result of reduced shipments to manage high inventory at our distribution partners along with a further softening in demand,” added Enphase president and CEO Badri Kothandaraman.
Stable year-on-year financial results
The company’s results are slightly more encouraging on a longer time frame, with operating income stabilising, and net income increasing, between the 2022 and 2023 financial years. Enphase posted total revenue of US$2.3 billion in both years, and the company announced that it had sold 1.6 million microinverters, with a power conversion capacity of 660MW, alongside batteries with a storage output of 80.7MWh, and these strong sales figures are likely to have driven much of these results.
Enphase also plans to expand its manufacturing capacity in the US, which could help protect the company’s financial results from fluctuations in demand from markets, such as Europe. Kothandaraman noted that Enphase expects to ramp up microinverter production at its South Carolina facility, and the company started work at a similar facility in Texas in September last year, as part of a US$60 million investment into US-based manufacturing capacity, to take advantage of financial incentives offered by the Inflation Reduction Act (IRA).
In the fourth quarter of the year, the company also started shipping new products, including the IQ8P microinverter in North America, and the IQ8 microinverter in new European markets, including Austria, Belgium and Italy.
However, Enphase has also announced plans to close down operations at manufacturing plants in Romania, and the US state of Wisconsin, alongside layoffs of 10% of its workforce, suggesting that the company’s recent financial struggles could impact its ability to meet its manufacturing and distribution targets.
