Enphase, PV Microinverter Builder, Still Growing Revenue and Margin

Still the solar microinverter frontrunner, Enphase continues to execute. Profitability not yet achieved and losses continue.

Eric Wesoff May 07, 2013

Eric Wesoff

Editor-at-Large
Greentech Media

Eric Wesoff is Editor-at-Large at Greentech Media. Prior to joining GTM, Eric Wesoff founded Sage Marketing Partners in 2000 to provide sales and marketing-consulting services to venture-capital firms and their portfolio companies in the alternative energy and telecommunications sectors. Mr. Wesoff has become a well-known, respected authority and speaker in these fields.

His expertise covers solar power, fuel cells, biofuels and advanced batteries. His strengths are in market research and analysis, business development and due diligence for investors. He frequently consults for energy startups and Silicon Valley's premier venture capitalists.

Microinverter market leader Enphase Energy (Nasdaq:ENPH) just announced its financial results for the first quarter of 2013, its fifth quarter as a public firm.

First quarter 2013 highlights include:

Revenue of $45.6 million (at the top end of guidance and up 7 percent year-to-year)
Shipped 315,000 units in Q1 -- approximately 68 megawatts
Gross margin of 26.8 percent, up and in line with guidance
First-quarter net loss was $10.4 million
Renewal of supplier agreement with Vivint Solar
Operating expenses flat at $20.4 million

Paul Nahi, the CEO of Enphase, said it was "a very good start to 2013." Nahi set the stage by speaking of a global 33-gigawatt solar market in 2013, up 10 percent from 2012, with pricing stabilizing as markets consolidate.

Enphase guided to a Q2 2013 revenue within a range of $56 million to $60 million, and a gross margin within a range of 26 percent to 28 percent.

During last quarter's earnings call, CFO Kris Sennesael said that breakeven happens when quarterly revenue hits $80 million at 30 percent gross margin. In a conversation after that earnings call, CEO Paul Nahi declined to say exactly when that milestone will occur.

Enphase shipped more than 1.5 million inverters in 2012, for a total of more than 3 million units shipped since its founding. Net loss in 2012 was $38.2 million and $32.3 million in 2011. Enphase claimed a 35 percent inverter market share in U.S. residential solar installations in the fourth quarter.

In the last quarter, there's been a great deal of consolidation in the inverter market, with ABB acquiring Power-One and Advanced Energy acquiring REFUsol to become the number-three player in the PV inverter market. Nahi noted that ABB's interest in solar is "a validation that the solar industry is set to grow domestically and internationally."

Nahi also noted that the firm's fourth-generation product will go to market in 2013; the fifth-generation product is now in labs and on test rooftops.