Enphase's second quarter was marked by a mix of strong revenue growth and operational challenges, resulting in a negative market reaction. Management attributed the 19.7% year-on-year revenue increase to higher seasonal demand in the U.S. and robust sales of both microinverters and battery systems. CEO Badrinarayanan Kothandaraman noted, “Our battery technology road map has been advancing rapidly with a laser focus on driving down installation costs and unlocking scale.” However, operational headwinds came from elevated microinverter channel inventory and a 2% gross margin impact from tariffs, signaling some execution hurdles despite overall sales momentum.

Is now the time to buy ENPH? Find out in our full research report (it’s free).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions Enphase’s Q2 Earnings Call

• Praneeth Satish (Wells Fargo) asked about the company's plans to expand lease financing to smaller installers and the expected timeframe. CEO Badrinarayanan Kothandaraman explained that partnerships are being developed but details will be shared in the next quarter.
• Philip Shen (ROTH Capital) inquired about the timing and magnitude of policy-driven demand. Kothandaraman indicated that a significant uptick is expected in early Q4 as installers ramp up capacity to secure expiring tax credits.
• Brian Lee (Goldman Sachs) questioned the incremental costs of new strategic initiatives. Kothandaraman responded that operating expense increases should be limited, as existing data and platforms are leveraged for expansion.
• Colin Rusch (Oppenheimer) asked about upselling existing customers on new products. Chief Products Officer Raghuveer Belur highlighted that Enphase’s AC-coupled architecture simplifies adding batteries or EV chargers to existing systems, reducing customer acquisition costs.
• Maheep Mandloi (Mizuho) sought clarification on tariff exposure and mitigation. Kothandaraman detailed how product redesigns and supply chain shifts are intended to reduce future tariff impacts, especially with the launch of new battery generations.

Catalysts in Upcoming Quarters

In coming quarters, our analysts will be monitoring (1) the pace at which Enphase brings new battery and microinverter products to market and their impact on cost structure, (2) the effectiveness of channel inventory management as policy-driven demand shifts materialize, and (3) the success of expanding lease financing and installer services to the long tail of the market. Progress in international market adoption and the ability to offset tariff pressures will also be key signposts.

Enphase currently trades at $34.93, down from $42.50 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).

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