Enphase Energy: Is Its Focus On Increasing Battery Efficiency and Cost Reduction Paying Off?

Enphase Energy reported its financial results for the first quarter of 2025 with revenue amounting to $356.1 million. This marked a decline from the previous quarter, largely attributed to typical seasonal patterns and reduced customer demand in the U.S., aggravated by financial challenges faced by a national lease provider. Of this revenue, approximately $54 million was attributed to safe harbor agreements. The company’s gross margin, at 49% on a non-GAAP basis, saw a decrease partly due to product mix changes and lower bookings of production tax credits. This margin is expected to face further pressure from upcoming tariffs, particularly on batteries sourced from China, which could reduce margins by 6% to 8% by Q3 2025, although mitigation strategies are in place to offset this impact gradually by mid-2026.