ENPH FREMONT, Calif., Feb. 18, 2020 (GLOBE NEWSWIRE) -- Enphase Energy, Inc. (ENPH), a global energy technology company and the world’s leading supplier of solar microinverters, announced today financial results for the fourth quarter of 2019, which included the summary below from its President and CEO, Badri Kothandaraman.
Highlights for the fourth quarter of 2019 included:
Revenue of $210.0 million, including approximately $36.4 million of safe harbor revenue
Cash flow from operations of $102.3 million; ending cash balance of $296.1 million, including restricted cash
GAAP gross margin of 37.1%; non-GAAP gross margin of 37.3%
GAAP operating expenses of $33.4 million; non-GAAP operating expenses of $26.1 million
GAAP operating income of $44.4 million; non-GAAP operating income of $52.3 million
GAAP net income of $116.7 million, including an income tax benefit of $72.2 million; non-GAAP net income of $52.0 million
GAAP diluted EPS of $0.88, including an income tax benefit of $0.54; non-GAAP diluted EPS of $0.39
Our revenue and earnings for the fourth quarter of 2019 are given below, compared with those of the prior quarter and the year ago quarter:
(In thousands, except per share data and percentages)
GAAP Non-GAAP
Q4 2019 Q3 2019 Q4 2018 Q4 2019 Q3 2019 Q4 2018
Revenue $ 210,032 $ 180,057 $ 92,289 $ 210,032 $ 180,057 $ 92,289
Gross margin 37.1 % 35.9 % 30.5 % 37.3 % 36.2 % 30.7 %
Operating income $ 44,442 $ 33,706 $ 5,003 $ 52,277 $ 40,166 $ 8,565
Net income $ 116,666 $ 31,099 $ 709 $ 52,038 $ 39,466 $ 5,092
Basic EPS $ 0.95 $ 0.25 $ 0.01 $ 0.42 $ 0.32 $ 0.05
Diluted EPS $ 0.88 $ 0.23 $ 0.01 $ 0.39 $ 0.30 $ 0.04
Our revenue and earnings for the fiscal year 2019 are given below, compared with those of the prior year:
(In thousands, except per share data and percentages)
GAAP Non-GAAP
FY 2019 FY 2018 FY 2019 FY 2018
Revenue $ 624,333 $ 316,159 $ 624,333 $ 316,159
Gross margin 35.4 % 29.9 % 35.7 % 30.2 %
Operating income $ 102,729 $ 1,596 $ 126,952 $ 20,535
Net income (loss) $ 161,148 $ (11,627 ) $ 124,205 $ 10,013
Basic EPS $ 1.38 $ (0.12 ) $ 1.06 $ 0.10
Diluted EPS $ 1.23 $ (0.12 ) $ 0.95 $ 0.10
Our fourth quarter revenue was $210.0 million, including approximately $36.4 million of safe harbor revenue. We shipped approximately 677 megawatts DC, or 2,112,725 microinverters. Fourth quarter revenue increased 17% sequentially and 128% year-over year. Product innovation and customer experience remain the cornerstones of our growth strategy. We achieved volume shipments of IQ 7A™, our highest power microinverter, during the fourth quarter as our customers continued to seek module-level power electronics optimal for high-efficiency solar modules.
Our non-GAAP gross margin was 37.3%, an increase of 110 basis points from 36.2% in the third quarter of 2019. Expedite fees were within the range expected in the normal course of business, as component supply remained stable. Non-GAAP operating expenses were $26.1 million, compared to $25.0 million in the prior quarter. Non-GAAP operating income was $52.3 million, compared to $40.2 million in the prior quarter.
We exited the fourth quarter with $296.1 million in cash, including restricted cash, and generated $102.3 million in cash flow from operations. The restricted cash is related to the first quarter of 2020 safe harbor deliveries and is expected to become unrestricted at the end of April 2020. Inventory was $32.1 million at the end of the fourth quarter of 2019, compared to $30.2 million at the end of the third quarter of 2019, and $16.3 million at the end of the fourth quarter of 2018.
For the full year 2019, revenue was $624.3 million, compared to $316.2 million in 2018. We generated $139.1 million of cash flow from operations in 2019, compared to $16.1 million in 2018. GAAP net income was $161.1 million, resulting in diluted earnings per share of $1.23. Non-GAAP net income was $124.2 million, resulting in diluted earnings per share of $0.95. We are pleased to report that 2019 was the first full year of GAAP profitability in Enphase’s history.
Shipments of our Encharge™ battery storage system utilizing our Ensemble™ energy management technology remain on track for March 2020. We are pleased with the pre-orders received and are ramping installer training to support the product launch.
BUSINESS HIGHLIGHTS
On November 18, 2019 Enphase Energy announced it signed a strategic supply agreement with Sunrun Inc., the nation’s leading home solar, battery storage and energy services company. As part of the agreement, Enphase will provide its seventh-generation Enphase IQ™ microinverters to Sunrun for use in its residential solar business. Sunrun’s customers will benefit from Enphase’s IQ 7™ and IQ 7+™ microinverters, which leverage Enphase’s unique software-defined architecture and semiconductor integration for excellent reliability and economies of scale.
On November 20, 2019, Enphase Energy announced the availability of pre-orders for battery storage systems based on its Ensemble energy management technology. Solar installers can place pre-orders for Encharge 3™ or Encharge 10™ storage systems, which offer usable and scalable capacity of 3.4 kWh and 10.1 kWh, respectively. The storage systems feature Enphase embedded grid-forming microinverters that enable the Always-On functionality. These systems are compatible with both new and existing Enphase IQ solar systems with IQ 6™ or IQ 7 microinverters and provide a simple upgrade path for Enphase’s existing solar customers.
On December 12, 2019, Enphase Energy hosted an Analyst Day and announced a new baseline financial model of 35% gross margin, 15% operating expenses and 20% operating income, all as a percentage of revenue on a non-GAAP basis. Enphase discussed several new products, including Encharge storage systems, IQ 8™ microinverters for the residential market, IQ 8D™ microinverters for the small commercial market, and Ensemble-in-a-Box for the India off-grid market. Enphase also forecasted its served available market growing from $3.3 billion in 2019 to $12.5 billion in 2022, which the company believes provides an opportunity for profitable growth.
