Microinverter supplier Enphase Energy has offered a lower-than-expected guidance revenue for Q3 2023, on the back of a stagnating second quarter.
The company registered a revenue of US$711 million in Q2 2023, down from the previous quarter’s US$726 million with revenue down in the US by 12%, while Europe numbers increased by 25% from Q1 2023.
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Results during Q2 2023 in the US were lower than usual, as the market experienced a slowdown due to high interest rates with Q2 sell-through of microinverters being nearly flat over the previous quarter when the company was expecting an increase over Q1 2023, according to Badri Kothandaraman, CEO at Enphase.
In its financial outlook for Q3 2023, Enphase Energy expects revenue to be between US$550-600 million, a nearly US$200 million drop from the high-end guidance for Q2 2023 when the company gave a range of US$700-750 million.
Speaking about the lower revenue guidance in Q3 2023, Kothandaraman said: “Our microinverter sell-through in the US peaked in Q4 2022. The sell-through in H1 2023 in both Q1 and Q2 was approximately 20% below Q4 due to the high interest rate environment in the US. Our sell-in to the channel was only 10% down in H1 2023 relative to Q4. We were expecting a seasonally up Q2 in 2023 but that didn’t materialise. This has increased the inventory in the channel.
“Plus we are assuming the same level of uncertainty continues going forward. Therefore, we are taking aggressive and prudent actions in the US to manage down the channel inventory, and this is reflected in our light Q3 guidance.”
However, the impact is not the same across the country, with California performing 34% higher in Q2 2023 than it did during the same period last year, due to a backlog of NEM 2.0 installations that is expected to continue over the summer with NEM3.0 having a bigger impact in microinverter sales during Q3 2023, while other states had a sell-through decrease of 6% and 11% from Q1 2023 and Q2 2022, respectively. Texas, Florida and Arizona fared much worse results than other states.
Earlier this month Enphase inaugurated one of its six manufacturing facilities, located in South Carolina – which was visited by the US President, Joe Biden – and in partnership with manufacturing company Flex. For the current quarter (Q3 2023) the company expects to start shipments from a third US contracted facility.
During Q2 2023, Enphase shipped 5,198,441 microinverters totalling 2.1GWdc, increasing for the fifth month in a row and with shipments higher in the first half of the year than the whole of 2021, as shown in the chart below. Its batteries on the other continue to see a decrease in shipments for Q3 in a row with 82.3MWh of Enphase IQ Batteries, down from 102.4MWh shipments during Q1 2023.
If the US market registered lower than usual results for Q2 2023, Europe on the other hand remained strong, however summer seasonality during Q3 2023 might slow down that growth. France and the Netherlands have continued to be strong markets for Enphase and has started to gain traction in Germany, both for residential solar and batteries.
For H2 2023, the microinverter supplier aims to introduce its IQ8 microinverters and batteries in newer markets in Europe, including Sweden, Denmark, Greece, Italy and the UK.
Kothandaraman announced during an earnings call that the company authorised a US$1 billion share repurchase programme, following a previous repurchase programme launched in March 2021 that acquired US$500 million of shares back.
Earnings call commentary was sourced from Seeking Alpha.
