PVTIME – Enphase Energy, Inc. (NASDAQ: ENPH), a global energy technology company and the world’s leading supplier of microinverter-based solar and battery systems, announced financial results for the fourth quarter of 2021, which included the summary below from its President and CEO, Badri Kothandaraman.
We reported record quarterly revenue of $412.7 million in the fourth quarter of 2021, along with 40.2% for non-GAAP gross margin. We shipped approximately 3,033,891 microinverters, or 1,082 megawatts DC, and 100.2 megawatt hours of Enphase IQ™ Batteries.
Financial highlights for the fourth quarter of 2021 are listed below.
- Record revenue of $412.7 million
- GAAP gross margin of 39.6%; non-GAAP gross margin of 40.2%
- GAAP operating income of $57.7 million; non-GAAP operating income of $97.7 million
- GAAP net income of $52.6 million; non-GAAP net income of $102.8 million
- GAAP diluted earnings per share of $0.37; non-GAAP diluted earnings per share of $0.73
- Cash flow from operations of $97.2 million
- Ending cash, cash equivalents and marketable securities balance of $1.0 billion after completing $300.0 million of common stock repurchases in December 2021
Our revenue and earnings for the fourth quarter of 2021 are provided below, compared with those of the prior quarter and the year ago quarter:
(In thousands, except per share data and percentages)
Total revenue increased 17%, compared to the third quarter of 2021. We were able to meet the surge in customer demand while successfully navigating supply constraints and logistics challenges. Strong demand for our IQ™ Microinverters continued in the fourth quarter of 2021, while shipments of our IQ Batteries increased approximately 53%, compared to the third quarter of 2021. Our non-GAAP gross margin was 40.2% in the fourth quarter of 2021, compared to 40.8% in the third quarter of 2021, primarily due to product mix.
Non-GAAP operating expenses increased to $68.2 million in the fourth quarter of 2021, compared to $57.3 million in the prior quarter, primarily due to additional investment in product launches, R&D, and IT infrastructure. Non-GAAP operating income was $97.7 million in the fourth quarter of 2021, compared to $85.9 million in the third quarter of 2021.
We exited the fourth quarter of 2021 with $1.0 billion in cash, cash equivalents and marketable securities and generated $97.2 million in cash flow from operations in the fourth quarter of 2021. Capital expenditures were $13.2 million in the fourth quarter of 2021, compared to $12.7 million in the third quarter of 2021.
We started production shipments of IQ8 Microinverters for customers in North America in the fourth quarter of 2021. IQ8 solar microinverters can form a microgrid during a power outage using only sunlight, providing backup power even without a battery. IQ8’s grid-forming technology eliminates traditional ratio requirements between solar system size and battery size. With IQ8, any home can adopt Enphase technology for backup, even with no battery or a small battery.
We completed the acquisition of ClipperCreek in the fourth quarter of 2021. Founded in 2006, ClipperCreek offers electric vehicle (EV) charging solutions for residential and commercial customers in the U.S. The increasing penetration of EVs has implications for home energy management. Homes will consume significantly more power with an EV and the large EV battery could be used for backup and grid services in the future. This acquisition will soon leverage our power conversion and software platform to manage loads and resources within the home.
We continued to make excellent progress on our installer digital platform. We acquired 365 Pronto, Inc. during the fourth quarter of 2021. The company offers a predictive software platform dedicated to simplifying maintenance by matching cleantech asset owners to a local and on-demand workforce of service providers. Our two prior acquisitions, which provide proposal software and permitting services for installers, continue to do well with new features slated for release this year.
For the full year 2021, revenue was $1,382.0 million, compared to $774.4 million in 2020. We generated a record $352.0 million in cash flow from operations in 2021, compared to $216.3 million in 2020. GAAP net income was $145.4 million, resulting in diluted earnings per share of $1.02. Non-GAAP net income was $340.3 million, resulting in Non-GAAP diluted earnings per share of $2.41.
BUSINESS HIGHLIGHTS
On Nov. 29, 2021 Enphase Energy announced that its microinverter-based solar systems are becoming increasingly preferred for commercial installations by government and community organizations in Australia seeking to offset daytime electricity costs and make progress towards net zero goals. Enphase’s distributed and all-AC architecture combined with panel-level monitoring ensures that Enphase microinverter-based solar systems are smart and safer choices for solar assets installed on commercial facilities.
On Dec. 2, 2021 Enphase Energy announced its participation in Arizona Public Service (APS) Residential Battery Pilot grid services program. The program offers homeowners with Enphase IQ Batteries in APS’s service territory two ways to participate and earn money through one-time, upfront incentives. More Arizonans than ever before will get to experience the benefits of Enphase solar and battery systems, while also helping to make the grid more reliable.
On Jan. 27, 2022, Enphase Energy and Semper Solaris, one of the nation’s leading home solar and battery contractors headquartered in California, announced a strategic partnership focused on deploying Enphase Energy Systems, powered by IQ Microinverters and IQ Batteries, across California. Enphase Energy Systems and the Enphase® App give households enhanced control and flexibility, enabling them to optimize their home energy system around various rate structures through self-consumption, seamless participation in grid services programs, and the ability to go off-grid.
Enphase Energy recently announced that Enphase installers in Southern California, Washington, D.C. area, New York, Colorado, Illinois, Washington, Pennsylvania, Massachusetts, and Arizona have seen growing deployments of the Enphase Energy System powered by IQ Microinverters and IQ Batteries. Enphase customers are interested in energy resilience during power outages and harsh weather conditions that threaten their electric supply.
FIRST QUARTER 2022 FINANCIAL OUTLOOK
For the first quarter of 2022, Enphase Energy estimates both GAAP and non-GAAP financial results as follows:
- Revenue to be within a range of $420 million to $440 million, which includes shipments of 110 to 120 megawatt hours of Enphase IQ Batteries
- GAAP gross margin to be within a range of 37.0% to 40.0%; non-GAAP gross margin to be within a range of 38.0% to 41.0%, excluding stock-based compensation expenses and acquisition related amortization
- GAAP operating expenses to be within a range of $130.5 million to $133.5 million, including $63.0 million estimated for stock-based compensation expenses and acquisition related costs and amortization
- Non-GAAP operating expenses to be within a range of $67.5 million to $70.5 million, excluding $63.0 million estimated for stock-based compensation expenses and acquisition related costs and amortization
