Enphase Q3 Revenue Falls 29% to $293.3M as Q4 Guidance Steps Down to $225M to $255M
Enphase reported third-quarter revenue of $293.3 million and non-GAAP EPS of $0.41, then guided fourth-quarter revenue below this quarter's level as U.S. residential solar demand stays weak.
Enphase Energy (ENPH) reported third-quarter revenue of $293.3 million on Tuesday, roughly flat from the second quarter but down about 29% from a year ago, and guided fourth-quarter revenue to $225 million to $255 million. Non-GAAP earnings were $0.41 a share, down from $0.90 a year earlier. CEO Badri Kothandaraman said the core U.S. residential solar market continues to face headwinds.
The quarter in numbers
| Metric | Q3 2026 | Q2 2026 | Q3 2025 | vs. Q3 2025* |
|---|---|---|---|---|
| Revenue | $293.3M | $291.9M | $410.4M | -28.5% |
| Non-GAAP gross margin | 45.0% | 46.8% | 49.2% | -4.2 pts |
| GAAP gross margin | 43.3% | 60.0% | 47.8% | -4.5 pts |
| Non-GAAP operating income | $53.6M | $56.7M | $123.4M | -56.6% |
| Non-GAAP net income | $54.0M | $61.5M | $117.3M | -54.0% |
| Non-GAAP diluted EPS | $0.41 | $0.46 | $0.90 | -54.4% |
| GAAP diluted EPS | $0.17 | $0.27 | $0.50 | -66.0% |
*By our calculation. Investment impairments reduced EPS by $0.15 on a GAAP basis and $0.14 on a non-GAAP basis. Operating cash flow was about $0.1 million, capital spending was $11.5 million and non-GAAP free cash flow was negative $11.4 million. Cash, equivalents and marketable securities ended the quarter at $931.8 million.
Results against guidance
Enphase had guided third-quarter revenue to $290 million to $320 million, so the $293.3 million result landed near the low end. Non-GAAP gross margin of 45.0% was inside the 44% to 47% range. Battery shipments of 129.9 MWh were a hair under the 130 to 150 MWh guided range, though up from 113.8 MWh in the second quarter. The company also shipped about 1.42 million microinverters, or 655.2 MW DC.
Demand and tariffs
Global sell-through rose about 1% from the second quarter. U.S. sell-through rose 5% sequentially but fell 35% from a year earlier, while European sell-through fell 12% sequentially. Reciprocal tariffs cut non-GAAP gross margin by about 1.3 points in the quarter, down from about 2.0 points in the second quarter, and Enphase has received about $52 million in tariff refunds over the first nine months of 2026, $47 million of which reduced cost of revenues.
Fourth-quarter outlook
| Q4 2026 guidance | Range |
|---|---|
| Revenue | $225M to $255M, including about $51.2M of safe harbor revenue |
| Battery shipments | 100 to 120 MWh |
| Non-GAAP gross margin | 40.0% to 43.0%, including about 2.0 points of tariff impact |
| GAAP gross margin | 38.0% to 41.0% |
| Non-GAAP operating expenses | $76M to $80M |
| Sell-through assumption | Down about 10% |
By our calculation, the revenue range implies a sequential decline of 13% to 23% from the third quarter, or about 18% at the midpoint. The battery guide is also below the 129.9 MWh shipped in the third quarter.
The longer-term bet
Enphase demonstrated its IQ SST solid-state transformer converting 13.8 kV AC to 800 VDC at its Austin lab and said it has more than 50 customer and partner prospects. Customer pilots are planned for 2027, with commercial shipments expected to begin in 2028. The company also pointed to new battery and commercial microinverter products as growth drivers.
Stock reaction
Enphase shares traded around $29.67 in Tuesday's regular session, down about 2.3%, before the results were released after the close.
Sources: Enphase Energy, third-quarter 2026 financial results (Oct. 27). This is informational, not a recommendation to buy or sell.
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