Enphase shares drop 15.7% after hours, Q4 revenue forecast cut

Enphase Energy Inc. (ENPH) said in a filing on Oct. 27 that third-quarter 2026 revenue was $293.3 million, and that it expects fourth-quarter revenue of $225.0 million to $255.0 million, below the range it gave in July.

Shares fell 15.7% in after-hours trading as of 5:10 p.m. ET, from a regular-session close of $29.74.

The Fremont, California company designs semiconductor-based energy technologies spanning solar, batteries, EV charging, energy management, and virtual power plants. Its results were released in a press release furnished to the Securities and Exchange Commission as Exhibit 99.1.

Here's how the company did:

• Revenue: $293.3 million vs. $410.4 million a year earlier
• GAAP diluted EPS: $0.17 vs. $0.50 a year earlier
• Non-GAAP diluted EPS: $0.41 vs. $0.90 a year earlier

GAAP operating income was $6.5 million, compared with $66.2 million a year earlier. GAAP net income was $23.4 million, compared with $66.6 million.

Impairment in investments reduced GAAP diluted EPS by $0.15 and non-GAAP diluted EPS by $0.14, the company said.

The company ended the quarter with $931.8 million in cash, cash equivalents and marketable securities. It generated about $0.1 million in operating cash flow and spent $11.5 million on capital expenditures.

Fourth-quarter 2026 guidance

For the fourth quarter, the company expects revenue of $225.0 million to $255.0 million, including about $51.2 million of safe harbor revenue. That range is below the $290.0 million to $320.0 million it gave on July 28.

The company expects non-GAAP gross margin of 40.0% to 43.0%, down from the 44.0% to 47.0% range it gave in July. Non-GAAP operating expenses are expected at $76.0 million to $80.0 million, the same as the July range.

The outlook assumes sell-through will be down 10% from the third quarter. IQ Battery shipments are expected at 100 to 120 MWh, against the 130 to 150 MWh in the July outlook.

Regional sales and sell-through

Revenue in the United States rose about 3% from the second quarter. The company said the increase was smaller than it anticipated because of soft residential solar demand.

Revenue in Europe fell about 11%, the company said, citing summer seasonality and continued weakness in certain solar markets.

Global sell-through rose about 1% sequentially, below the company's expectation of 10% growth, and placed revenue at the low end of its guidance range. U.S. sell-through rose 5% sequentially but fell 35% from a year earlier.

IQ Battery shipments were 129.9 MWh, up from 113.8 MWh in the second quarter.

Costs, charges and cash

Non-GAAP gross margin was 45.0%, down from 46.8% in the second quarter. The company attributed the decline to product mix and said reciprocal tariffs reduced gross margin by about 1.3 percentage points.

The company received about $52.0 million in tariff refunds during the first nine months of 2026 from U.S. Customs and Border Protection. It excluded the refunds from its non-GAAP results.

The company also said it demonstrated 13.8 kV AC to 800 VDC conversion with its IQ Solid-State Transformer (IQ SST) technology at its Austin, Texas R&D lab. Customer pilots are on track for 2027, with commercial shipments expected to begin in 2028.

Net income has swung between profit and loss in recent quarters, from $38.7 million in the fourth quarter of 2025 to a loss of $7.4 million in the first quarter of 2026, according to its SEC filings.