Enphase Q3 Revenue Falls 29% as US Sell-Through Drops 35%

• Enphase Energy's third-quarter revenue fell to $293.3 million from $410.4 million a year earlier.
• US sell-through dropped 35% year on year; Enphase cited higher interest rates and the end of the Section 25D tax credit.
• The company guided fourth-quarter revenue to $225 million to $255 million and expects sell-through to fall 10% from the third quarter.

Enphase Energy's third-quarter revenue fell to $293.3 million from $410.4 million a year earlier, as US sell-through dropped 35% over the same period. The Fremont, California-based microinverter maker reported the results on Oct. 27 and guided fourth-quarter revenue to $225 million to $255 million.

Revenue was almost flat against $291.9 million in the second quarter. Global sell-through rose about 1% from the previous quarter. Enphase had expected 10% growth, and the shortfall helped put revenue at the low end of its guidance range.

US sell-through rose 5% from the second quarter. Chief Executive Badri Kothandaraman cited "higher interest rates and the expiration of the Section 25D federal tax credit" as headwinds for its core US residential market. The credit for customer-owned systems ended with 2025. SEIA and Wood Mackenzie expect US residential solar installations to shrink 23% in 2026. European sell-through fell 12% from the second quarter, with demand softest in France.

The quarter in numbers

• 28.5% lower revenue than the $410.4 million of the third quarter of 2025 (list.solar calculation).
• 1.42 million or so IQ microinverters shipped, or 655.2 MWdc, about 461 W per unit (list.solar calculation).
• 129.9 MWh of IQ Batteries shipped, 14% more than the 113.8 MWh of the second quarter (list.solar calculation).
• 29% of revenue, or $85.0 million, came from safe-harbor sales (list.solar calculation).
• 45.0% non-GAAP gross margin, down from 46.8%; reciprocal tariffs cut about 1.3 percentage points.
• $240 million at the midpoint of the fourth-quarter guide, 18% below third-quarter revenue (list.solar calculation).
• 995 MWdc of US residential solar installed in the second quarter of 2026, down 12% year on year, according to SEIA and Wood Mackenzie.

GAAP net income fell to $23.4 million from $66.6 million a year earlier. Cash, cash equivalents and marketable securities stood at $931.8 million at the end of September.

Enphase is building an IQ solid-state transformer for AI data centers. At its Austin, Texas, lab, 132 power modules converted 13.8 kV AC to 800 V DC. The next steps are operation at 34.5 kV and a megawatt-scale demonstration by the end of 2026. Customer pilots are planned for 2027, with commercial shipments from 2028.

The fourth-quarter outlook includes 100 MWh to 120 MWh of battery shipments and about $51.2 million of safe-harbor revenue. It assumes sell-through falls 10% from the third quarter. Enphase expects a non-GAAP gross margin of 40% to 43%, including about 2 points of tariff impact.