10-Q · July 28, 2026
Enphase delivered a sequential profitability recovery in Q2, with GAAP EPS of $0.27 and gross margin of 60.0%, but revenue of $291.9 million was down 20% year over year as U.S. and European demand remained weak. The…
Earnings analysis · 10-Q
ENPH earnings analysis
Filed October 27, 2026 · Our reading of the company's report
The latest report
Enphase delivered a weak third quarter, with revenue down 29% year over year to $293.329 million, gross margin falling to 43.3% and diluted GAAP EPS declining to $0.17 from $0.50. U.S. demand was the primary drag…
Read full summary
Enphase delivered a weak third quarter, with revenue down 29% year over year to $293.329 million, gross margin falling to 43.3% and diluted GAAP EPS declining to $0.17 from $0.50. U.S. demand was the primary drag following expiration of the residential clean-energy tax credit, while lower product volumes, pricing and fair-value adjustments pressured profitability. Operating cash flow improved to $143.284 million for the first nine months and debt fell substantially after the $632.5 million Notes due 2026 repayment, but tariff exposure, channel weakness, investment losses and substantial purchase obligations remain significant risks.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.17
- Segment
- Single reportable segment: solar photovoltaic solutions; Q3 2026 revenue $293.329 million, down 29% year over year from $410.427 million. U.S. revenue was $233.491 million and international revenue was $59.838 million.
What stood out
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Revenue declined 29% year over year
Q3 2026 revenue was $293.329 million, down $117.098 million, or 29%, from $410.427 million in Q3 2025. Management attributed the decline primarily to a 33% decrease in IQ Battery MWh shipped, a 22% decrease in microinverter units sold and product price decreases.
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Margins and GAAP EPS deteriorated
Gross margin fell to 43.3% from 47.8% year over year, while operating income declined to $6.466 million from $66.159 million. Diluted GAAP EPS decreased to $0.17 from $0.50.
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U.S. demand remained the key weakness
U.S. revenue declined 33% to $233.491 million from $349.982 million, primarily reflecting expiration of the federal residential clean energy tax credit. International revenue was relatively stable at $59.838 million versus $60.445 million, with European revenue increasing by approximately $6.8 million.
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Operating cash flow improved
Nine-month operating cash flow increased to $143.284 million from $88.961 million, helped by approximately $218.1 million and $69.8 million of net proceeds from AMPTC sales. Capital expenditures were $45.752 million, implying approximately $97.532 million of nine-month cash flow after capital expenditures.
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Debt reduction strengthened the balance sheet
Cash and cash equivalents were $380.398 million and marketable securities were $551.448 million at September 30, 2026, versus $474.318 million and $1.039 billion, respectively, at December 31, 2025. Total debt declined to $573.163 million from $1.204 billion after repayment of $632.5 million of Notes due 2026.
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Inventory fell while deferred revenue stayed elevated
Inventory decreased to $243.707 million from $288.047 million at December 31, 2025, while accounts receivable increased to $249.939 million from $229.881 million. Deferred revenue remained substantial at $525.706 million, including approximately $51.7 million of Q4 2026 safe-harbor prepayments or billings.
What to watch
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Persistent channel and demand weakness
Management says prolonged solar-industry demand softness has contributed to distributor and installer liquidity problems, bankruptcies and business closures. Q3 IQ Battery shipments fell 33% to 129.9 MWh and microinverter units sold fell 22% to approximately 1.4 million.
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Tariff and China supply exposure
The updated trade risk disclosure cites new tariffs of 10% or 12.5% on imports from 60 trading partners. LFP battery cells used in storage products are supplied solely by two vendors in China, leaving the company exposed to supply disruption and tariff-driven cost increases.
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Uncertain future tariff recoveries
The company has submitted additional tariff refund claims but recognized no receivable because approval and timing remain uncertain. It received approximately $52.0 million of refunds and associated interest in the first nine months, including $47.0 million recognized as a reduction of cost of revenues.
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Investment valuation losses pressured earnings
Other expense included a $26.5 million non-cash decrease in the fair value of debt securities in Q3, versus $3.2 million in Q3 2025. This contributed to a $10.037 million net other expense despite $6.466 million of operating income.
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Committed cash requirements remain material
The company had approximately $262.4 million of component and inventory-related purchase obligations and $41.4 million of operating lease liabilities at September 30, 2026. It also had $573.163 million of Notes due 2028 outstanding.
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New ten-patent litigation matter
Tigo Energy Innovations filed a patent complaint on August 19, 2026 alleging infringement of ten patents by certain Enphase products. The complaint seeks unspecified damages and other relief, and the company cannot reasonably estimate any potential loss.
Management's outlook
The 10-Q provides no numeric revenue or EPS guidance. Management states that the European business environment is expected to remain constrained in Q4 2026. The separate October 27, 2026 earnings release disclosed Q4 revenue and margin guidance, but those figures are not repeated in this 10-Q.
Earlier filings 4
10-Q · April 28, 2026
Enphase reported Q1 2026 revenue of $282.9 million and non‑GAAP diluted EPS of $0.47 while GAAP diluted EPS was a loss of $(0.06). Revenue declined materially versus the prior-year quarter ($356.0M in 2025Q1) and vs.…
10-K · February 17, 2026
Enphase presents a product-led strategy centered on integrated microinverters, batteries, EV chargers and software, pushing into higher-domestic-content U.S. manufacturing and new product launches (IQ Battery 10C,…
10-Q · October 28, 2025
Enphase reported Q3 net revenue of $410,427,000 (up from $380,873,000 a year earlier) with gross margin of 47.8% and operating margin of 16.1%, driving diluted EPS of $0.50. Liquidity remains sizeable with cash and cash…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.