ENPH quarterly: My thoughts on Sales

I read the transcript; the things that stood out the most for me have to do with Sales, so I thought I’d submit some thoughts for your consideration.

Here are some specifics regarding challenges $ENPH sees right now for making sales:

Installers figuring out how to sell batteries (…and in particular their new third-generation battery) based on the notion that under NEM 3.0 the higher cost of the batteries will be offset by the opportunity to utilize batteries to make money selling energy back to the grid.

I noted that Badri stated that in order to make that happen, Enphase has to first sell this concept to their Installers (see Acquisitions, below).

Installers figuring out how to adjust their deal parameters to accomodate higher interest rates; specifically by charging lower Installer fees and compensating with higher APR on loans.

And again, several times in the call, Badri mentioned the challenge of first having to sell this concept to their Installers.

Badri seemed more optimistic regarding sales OUTSIDE OF THE USA: He sees continuation of the existing trend of sales going along at a great clip for several reasons including increased overall demand, addition of additional Countries to sell into and addition of additional products to sell

The thing I took away from the call is just how they are dependent on their Installers to hit their Sales targets, at least in the USA.

…It makes sense, then, that they have made some acquisitions they hope will help their Installers:

  1. They “acquired a company called SolarLeadFactory that basically helps in providing leads to installers.” Their goal is to provide Installers access to higher-quality leads such that close rate improves from 2-3% to more like 10% (…I have some experience with Sales; 10% definitely seems like a lofty goal).

  2. They acquired a company called SolarGraph: Design and Proposal software: “…basically estimates what a homeowner can save and provide him most accurate payback calculations depending on its consumption. So that’s Solargraf, and that is now helping us a lot. 1,000 installers are using it with NEM 3.0, it is helping us to sell the NEM 3.0 more clearly to our installers and show them the value of a solar plus storage system.”

  3. They are buying a company that has software that digitizes/automates/speeds-up the permitting process, thus alleviating a pain point for their Installers.

  4. They bought a software company called 365 Pronto that provides an online marketplace to facilitate Operations/Maintenance proposals between Installers and Customers. The Installers get access to Customers, the Customers get a mechanism that makes it easier to shop around and Enphase gets a transaction fee

It’s good that they are taking proactive action to improve their sales by making life better for their Installers, and maybe a touch disconcerting that they have to work so hard to keep sales going along.

I was surprised to learn just how much they do to help their Installers make sales, they are doing a lot including

  • Teaching their Installers specific tactics for selling batteries
  • Teaching their Installers specific tactics for making sales despite higher interest rates
  • Obtaining higher-quality sales leads for their Installers
  • Putting software in the hands of their Installers (Solargraph) that makes it easier for their Installers to communicate the benefits of an installation to prospective Customers

I suppose that’s probably par-for-the-course, and I’m certainly glad they are helping their Installers make Sales, but there seems to be some friction to the Sales process in that they first have to sell the Installers on the Sales techniques/tactics, and train them on the techniques/tactics, and subsequently rely on the Installers to effectively utilize those techniques/tactics.

Overall, I don’t find anything alarming in the numbers or in the content of the call. Seems like minor, short-term tactical issues against a backdrop of enormous demand for their solutions.


Thanks for starting a thread on this Intjudo. Here are my Enphase thoughts before reading the transcript:

Growth was totally flat QoQ, never a good look for any growth company. BUT, as evidenced by their past results and alluded to in prior conference calls, it’s Q1 seasonality (which tends to be a weak quarter), just more intense than usual.

–What is not seasonality, is that they are guiding to just 3% growth for next quarter. Many of you (like me) have probably gotten used to companies that sand bag their guidance big time and trounce their own estimates. Enphase is not one of those companies. Their biggest guidance beat of the last three years is 3%, so I think if you’re being very optimistic, you assume they get to 6% QoQ growth next quarter. If you’re playing it safe, you assume <3% growth, since they have been known to miss guidance sometimes. So at the end of Q2, half the year is gone, and they may only have 3%-4% growth to show for it. No bueno.

–The problem is that U.S. growth was -9% QoQ. European sales buoyed overall growth by growing 25% QoQ. But European sales are not a big enough percent of overall sales to move overall revenue growth for the quarter beyond 0%.

Although analyzing quarter over quarter paints a dark picture, looking at the YoY improvements are eye popping. Net income is up 190% to $147 million from $52 million last year, while free cash flows are up 148% YoY, and revenues are up 65% YoY. That said, it’s hard to imagine there is some big spike in revenue growth coming in Q3 or Q4.

In summary, my first thoughts (without having read the transcript yet) are that this quarter is a bit disappointing, but not terrible. Because they don’t offer annual guidance, we are left to make our own assumptions of what we think will happen in the second half of the year. And because they are telling us Q2 won’t be so great, it is increasingly likely that 2023 as a whole will not be a great year for them either.

And just for context, I have a 2% trial position in Enphase.


Enphase valuation has become quite compelling following the pre-market drop. I’ve now initiated a long position and my reasoning is below
1/ Following the drop to around $180, we are getting a business at roughly 30x2023 earnings which is attractive for a business which is operationally very efficient and expected to grow earnings at a rate of 30%+ for the foreseeable future.
2/ Long term solar thematic are not impacted by todays results as they continue to show growth in different geographies and ENPH is a top dog in this thematic.
3/ Weak Q2 is down to macro-economic factors and California’s NEM 2.0 ending both of which are temporary factors that are not thesis buster for a company with long run-way
Long ENPH and looking to add more at more attractive valuation points.


Below the long term trend line. Not a good look.

I do not own this stock. I’ve said this before, but I recommend that anyone who is interested in this company spend some time researching Small Modular Reactor nuclear. I listen to a lot of podcasts from a variety of sources, and I’ve heard compelling arguments made for SMRs lately from multiple people. If SMR’s start to be widely deployed, then solar is less attractive.



" If SMR’s start to be widely deployed, then solar is less attractive."

I found this podcast, which presents a thoughtful analysis of the role of all energy sources, including fossil fuels, nuclear and solar, to be helpful. Of course, the decision-makers do not always follow the optimal path.


Which is the optimal path? It depends on who is funding the path! If I have a house in the suburbs perfect for solar panels, will I worry about climate change or about reducing my energy costs? As “thoughtful analysis” as the podcast may be, I think it’s irrelevant to investing in Enphase.

Denny Schlesinger


I agree with following the money trail . Specifically though, I was referencing the discussion about SMRs as a solution - the Doombergers feel that they are sub-optimal so if they are viewed as an alternative to solar, it would impact ENPH.