Enphase Energy Inc. remains on track to begin shipping its integrated battery-equipped energy management technology in March and is moving to grow its market in European countries following strong fourth-quarter 2019 earnings, Enphase officials said during a Feb. 18 earnings call.
While customers in the U.S. still account for the vast majority of pre-orders and sales for inverter and rooftop solar-plus-storage products and such sales are expected to remain high for a few more quarters, Enphase is "putting (in) a lot of effort to grow our international business" and especially in Europe, Enphase President, CEO and Director Badri Kothandaraman said in the company's fourth-quarter 2019 earnings call.
Enphase, a supplier of power electronics for home solar installations, expects by early March to increase its sales force and staffing through both internal transfers and new hires in the Netherlands, Belgium, France, Germany, and Spain, Kothandaraman stated. In particular, he said Enphase is looking to win "the long-tail installers by focusing on quality and customer experience," such as through increasing installer training significantly in Europe and tracking installer visit metrics diligently. The company aims to double European sales in 2020 from about $68 million in 2019.
Enphase reported GAAP net income of $116.7 million for Q4, including an income tax benefit of $72.2 million, which was up from the prior quarter by $85.6 million and significantly higher than the $709,000 in income for the fourth quarter of 2018.
The company had $210 million in total revenues for the fourth quarter of 2019, including approximately $36.4 million of safe harbor revenue, a 17% increase from the prior quarter and a 128% increase year-over-year. The company in the fourth quarter of 2019 shipped about 2.1 million microinverters totaling about 677 MW, Enphase said in a Feb. 18 news release.
The company's diluted earnings per share increased to 88 cents per share in the fourth quarter of 2019 from 23 cents per share in the third quarter and from one cent per share in the fourth quarter of 2018.
Kothandaraman said Enphase is "pleased" with the pre-orders for its Encharge battery storage system that uses Ensemble energy management technology, which allows customers to keep the power on in their homes during blackouts, and is ramping up installer training to support the product launch. The company has about 70 installers and 22 installation companies lined up that will begin installing beta systems in the first or second week of March, he said.
Kothandaraman was asked about how the company is handling potential challenges in production and exporting products from its manufacturers in China while that country is working to contain the new coronavirus. He said that the company does not expect to encounter significant problems if the situation remains the same.
Most of the company's raw material resources are hours away from Wuhan, China, which is where the new virus first appeared in late 2019, Kothandaraman explained. But he acknowledged that the manufacturing throughput from the company's factory, which is also not in Wuhan, is at about half of full capacity. The CEO also noted that getting products out of China "is getting difficult... and we are paying attention to that."
To some extent, the company is offsetting these supply chain risks by increasing its production from its facilities in Mexico, Kothandaraman said.
"We are very happy that Mexico is running well, and provides us a good backup to service global demand in the event of supply disruptions elsewhere," Kothandaraman said. The manufacturer in Mexico is producing a little more than 50,000 microinverter units per week and Enphase is aiming to double that capacity to 1 million microinverters per quarter by the fourth quarter of 2020, "and we are making very good progress towards that goal," Kothandaraman said. But he added that Enphase is also looking to ramp up battery capacity in China.