Shares of Enphase Energy, Inc. (ENPH) experienced a decline in after-hours trading following the release of its second-quarter earnings for Fiscal Year 2025. The company reported earnings per share of $0.69, exceeding analysts’ expectations of $0.62. Additionally, Enphase reported a robust year-over-year sales growth of 19.7%, with revenue reaching $363.2 million, slightly outperforming the anticipated $359.4 million.
In the U.S. market, Enphase saw a modest 3% revenue increase compared to the previous quarter, attributed primarily to seasonal trends. However, this was partially countered by decreased safe harbor revenue from customers planning longer-term installations. Conversely, the company observed a significant 11% quarter-over-quarter revenue growth in Europe, mainly fueled by increased sales of microinverters and batteries, particularly the newly launched IQ Battery 5P with FlexPhase technology.
During the quarter, Enphase successfully shipped 1.53 million microinverters, marking an increase from 1.4 million year-over-year but remaining flat compared to the previous quarter. Notably, microinverter shipments have decreased since their peak in 2023, as highlighted by Main Street Data.
Looking ahead, Enphase has provided a cautious revenue guidance for Q3 2025, projecting between $330 million and $370 million, which is below the analysts’ forecast of $368.4 million. The company expects a non-GAAP gross margin between 43% and 46%, along with non-GAAP operating expenses ranging from $78 million to $82 million. This conservative outlook may be a contributing factor to the stock’s after-hours movement.
Analysts maintain a Hold rating on ENPH stock, reflecting a mixed sentiment with seven Buy ratings, seven Holds, and 11 Sell ratings in the past three months. The average price target remains at $40.86 per share, suggesting a potential downside risk of nearly 4%. It is important to note that these estimates are likely to be reassessed in light of the recent earnings release.
Amidst these fluctuations, the ongoing global transition towards renewable energy solutions presents a potential for long-term growth for Enphase, particularly as they continue to innovate and adapt to market demands.