Microinverter market leader Enphase Energy (Nasdaq:ENPH) just announced its financial results for the fourth quarter and the 2012 fiscal year.
Revenue, volume, margin and market share are up. Operational expenditures are down. Losses continue.
The firm had Q4 revenue of $57.6 million, selling 384,000 units for a record gross margin of 27.9 percent for the quarter -- while shipping more than 1.5 million inverters in 2012 for a total of more than 3 million units since its founding. Operating expenses have been reduced in sequential quarters (for the first time), along with some headcount reductions in the previous quarter.
Net loss in 2012 was $38.2 million and $32.3 million in 2011.
During the earnings call, CFO Kris Sennesael said that breakeven happens when quarterly revenue hits $80 million at 30 percent gross margin. In a conversation after the earnings call, CEO Paul Nahi declined to say exactly when that milestone will occur.
The company guided on the the first quarter, expecting first quarter revenues of $43 million to $46 million (a typical seasonal decline) and gross margin between 26 percent to 28 percent.
2012 highlights included record revenue of $216.7 million, up 45 percent over 2011, and a record gross margin of 25.5 percent.
Enphase claims a 35 percent inverter market share in U.S. residential solar installations in the fourth quarter.
The company saw "demand softening" in the EU in the second half of the year and a U.S. residential market continuing to be driven by third-party financing.
GTM Research Solar Analyst MJ Shiao, who monitors the microinverter market, said, "Enphase is continuing to show that there's strong demand for microinverters, especially in North America. However, a weak balance sheet continues to make many installers and financiers nervous about committing to the Enphase bandwagon despite acknowledgement of its potential value. Adoption of SolarBridge has been on the rise but until Power-One and SMA actually put out their microinverters, the U.S. microinverter market remains in Enphase's control."
Shiao added, "We've seen inverter companies rise and fall with their domestic markets. If Enphase wants to remain competitive, it needs its expansion plans in France, Benelux, the U.K. and Australia to pan out. Italy may be a lost cause at this point, but they are starting from zero market share."