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Enphase Energy Reports Financial Results For The Third Quarter Of 2018

Enphase Energy, Inc., a global energy technology company and the world's leading supplier of solar microinverters, announced today financial results for the third quarter of 2018, which included the summary below from its President and CEO, Badri Kothandaraman.

Highlights for the quarter included:

  • Revenue of $78.0 million, including a $3.3 million milestone achievement from a partner on IQ 8
  • Record ending cash balance of $116.2 million
  • IQ 7 shipments at 78% of all microinverters
  • GAAP gross margin of 32.4%; non-GAAP gross margin of 32.8%
  • GAAP operating expenses of $25.6 million; non-GAAP operating expenses of $18.6 million
  • GAAP operating loss of $(0.4) million; non-GAAP operating income of $7.0 million
  • GAAP diluted EPS of $(0.03); non-GAAP diluted EPS of $0.04

Our revenue and earnings for the third quarter are given below, compared with those of the prior quarter and the year ago quarter:

(In thousands, except per share data)

  GAAP Non-GAAP
    Q3 2018   Q2 2018   Q3 2017   Q3 2018   Q2 2018   Q3 2017
Revenue $ 78,002 $ 75,896 $ 77,038 $ 78,002 $ 75,896 $ 77,038
Gross margin   32.40%   29.90%   21.40%   32.80%   30.50%   21.80%
Operating income (loss) $ (374 $ (558 $ (5,901 $ 6,975 $ 4,133 $ (102
Net income (loss) $ (3,470 $ (3,738 $ (6,854 $ 4,626 $ 1,550 $ (964
Basic EPS $ (0.03 $ (0.04 $ (0.08 $ 0.05 $ 0.02 $ (0.01
Diluted EPS $ (0.03 $ (0.04 $ (0.08 $ 0.04 $ 0.01 $ (0.01

We shipped 204 megawatts DC, or approximately 665,000 microinverters. Our non-GAAP gross margin was 32.8%, an increase of 230 basis points from 30.5% in the prior quarter. Our non-GAAP operating expenses were $18.6 million, compared to $19.0 million in the prior quarter. Non-GAAP net income was $4.6 million, which resulted in basic non-GAAP earnings per share of $0.05 and diluted non-GAAP earnings per share of $0.04. Inventory was $17.9 million in the third quarter, compared to $17.5 million in the second quarter and $25.3 million in the third quarter of 2017.

Customers continued to appreciate our differentiated products, quality and service initiatives during the third quarter. Our strong balance sheet with a $116.2 million cash position was instrumental in driving increased customer demand. Our biggest challenge in the third quarter was meeting this additional demand as we experienced supply shortages which constrained our revenue by more than $10 million. We expect the supply shortages to continue in the fourth quarter of 2018 and have made appropriate investments to alleviate these constraints by early 2019.

In summary, we are pleased with our cash management and progress towards the achievement of our 30-20-10 target financial model. Our immediate priorities are to optimize our supply chain to meet the incremental demand and continue providing outstanding service to our customers worldwide.

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