Enphase Energy (NASDAQ:ENPH) shares dropped more than 15% after-hours following the company’s reported Q1 earnings results.
While Q1 EPS of $1.37 and revenue of $726 million came in above the consensus estimates of $1.21 and $719.28M, respectively, Q2/23 guidance missed expectations.
Revenue in the U.S. fell approximately 9% quarter-over-quarter due to seasonality and macroeconomic conditions, while revenue in Europe increased by around 25%.
Non-GAAP gross margin was 45.7% in Q1, compared to 43.8% in Q4/22, driven by increased IQ8™ product mix and improved logistics.
The company expects Q2/23 revenue in the range of $700M-$750M, missing the consensus estimate of $773M.
Roth MKM analysts said the beat was "modest" with shares down on guidance miss.
"The stock is indicating down, and we expect it to stay lower for some time. While management conceded that it is lowering pricing on a one-off basis, it is focused on maintaining price & margins over volume. As the US resi solar environment continues to deteriorate, we see risk for the company to lower pricing... Maintain Buy on technology leadership," the analysts wrote in a client note.
Goldman Sachs analysts added:
"While a near-term reset on topline growth will be disappointing for investors, we believe ENPH's long term growth fundamentals remain intact driven by its growing exposure to robust demand in Europe, the roll out of storage across more markets, and as installers adapt their selling motion to NEM 3.0 in California and higher interest rates elsewhere. In addition, we would expect investors to more confidently underwrite IRA manufacturing credits following ENPH's estimation of the net benefit of the credits and the specific timing of its US ramp. We remain Buy rated."
(Additional reporting by Senad Karaahmetovic)