Enphase misses Q1 2025 revenue target, trims margin outlook on tariffs

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From pv magazine USA

Enphase Energy has reported its first-quarter 2025 earnings, narrowly missing Wall Street expectations for revenue. It posted $356.1 million in revenue for the first quarter, below expectations of $362 million.

The microinverter and storage solutions specialist shipped 1.2 million microinverters and 44.1 MWh of its IQ Battery residential battery storage products in the first quarter. It said that more than 10,900 installers worldwide are certified to install them.

It lowered its second-quarter 2025 revenue guidance to $360 million, below analyst estimates of $375 million. It cited weakened demand in the US residential solar market, higher costs from tariff enforcement, and continued uncertainty around US  clean energy tax credits.

Revenue in the United States declined 13% from the previous quarter, while European revenue rose 7%. Enphase attributed the increase in Europe to stronger sales of its IQ Battery 5P.

The company posted a gross margin of 48.9% in the first quarter, down from 53.2% in the fourth quarter of 2024. It forecast a gross margin of 42.0% to 45.0% for the second quarter, attributing a 2% margin impact to new tariffs. Enphase sources its battery cells from China.

“Starting in Q3, we anticipate a 6% to 8% total gross margin impact after accounting for pricing adjustments,” said Enphase Energy CEO Badri Kothandaraman.

The company said it expects tariff-related impacts on gross margin to ease by the second quarter of 2026, following a decline through the third quarter of 2025, as it diversifies its battery cell supply chain away from China, where tariffs currently stand at 145%.

Enphase ended the first quarter of 2025 with $1.53 billion in cash, cash equivalents, restricted cash, and marketable securities. It generated $48.4 million in operating cash flow during the quarter.

It said it plans to launch new products for the US market, including its fourth-generation home battery and a meter collar designed to help solar projects avoid expensive electrical upgrades.

Its stock fell 13.5% in the trading session following the release of its earnings report.

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