Enphase’s third quarter featured revenue growth that surpassed Wall Street estimates, but the market reacted negatively due to concerns about the sustainability of this momentum. Management attributed the quarter’s top-line performance to strong U.S. demand, normalization of microinverter channel inventory, and a record quarter for battery shipments. CEO Badrinarayanan Kothandaraman highlighted the impact of safe harbor revenue pull-forward and noted, “We reported quarterly revenue of $410.4 million, our highest revenue level in 2 years.” However, management expressed caution regarding elevated battery channel inventory and ongoing international headwinds, particularly in Europe.
Is now the time to buy ENPH? Find out in our full research report (it’s free for active Edge members).
Enphase (ENPH) Q3 CY2025 Highlights:
- Revenue: $410.4 million vs analyst estimates of $366.4 million (7.8% year-on-year growth, 12% beat)
- Adjusted EPS: $0.90 vs analyst estimates of $0.66 (37.2% beat)
- Adjusted EBITDA: $101.1 million vs analyst estimates of $102 million (24.6% margin, 0.8% miss)
- Revenue Guidance for Q4 CY2025 is $330 million at the midpoint, below analyst estimates of $374.4 million
- Operating Margin: 16.1%, up from 13.1% in the same quarter last year
- Sales Volumes rose 2.2% year on year (-55.7% in the same quarter last year)
- Market Capitalization: $3.86 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Enphase’s Q3 Earnings Call
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Colin Rusch (Oppenheimer): Asked about channel inventory levels for Q1 and if the 8 to 10 week rule of thumb applies. CEO Badrinarayanan Kothandaraman explained they are being "abundantly cautious" to avoid overloading the channel ahead of 2026.
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Brian Lee (Goldman Sachs): Questioned the sharp drop in non-U.S. revenue and if Europe’s weakness was company-specific. Kothandaraman pointed to policy changes and increased competition, especially in the Netherlands and France, and outlined product cost reductions as a recovery strategy.
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Philip Shen (ROTH Capital Partners): Queried on safe harbor mechanisms and the potential impact of prepaid lease models. Management described flexibility in supporting both the 5% and physical work test approaches, and highlighted efforts to partner with TPOs for new financing models.
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Dylan Nassano (Wolfe Research): Asked about operating expense management heading into 2026. Kothandaraman said expense trimming would track revenue but core innovation and customer service investments would be protected.
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Julien Dumoulin-Smith (Jefferies): Sought clarity on the cadence of 2026 revenue recovery and the role of product innovation and PPL in mitigating headwinds. Management cited a mix of external factors and new products as drivers for a potential second-half rebound.
Catalysts in Upcoming Quarters
Looking ahead, our analysts will watch (1) the pace of channel inventory normalization and destocking, (2) early adoption and cost impact of the IQ9 microinverter and fifth-generation batteries, and (3) the rollout and traction of new financing structures such as prepaid leases. Execution on transitioning supply chains away from China and progress in key international markets will also be key signposts for recovery.
Enphase currently trades at $29.44, down from $36.75 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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