Enphase Energy, Inc. (NASDAQ:ENPH) Q2 2020 Earnings Conference Call - Final Transcript

Aug 04, 2020 • 04:30 pm ET

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Enphase Energy, Inc. (NASDAQ:ENPH) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by and welcome to the Enphase Energy's Second Quarter 2020 Financial Results Conference Call. [Operator Instructions]. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions].

I would now like to hand the conference over to your speaker, Mr. Adam Hinckley. Please go ahead, sir.

Executive
Adam Hinckley

Good afternoon and thank you for joining us on today's conference call to discuss Enphase Energy's second quarter 2020 results.

On today's call are Badri Kothandaraman, Enphase's President and Chief Executive Officer; Eric Branderiz, Chief Financial Officer; and Raghu Belur, Chief Products Officer.

After the market close today, Enphase issued a press release announcing the results for its second quarter ended June 30, 2020. During this conference call, Enphase management will make forward-looking statements, including, but not limited to, statements related to Enphase Energy's expected future financial performance; the capabilities, availability and market adoption of our current and future technology and products, our performance and the performance of our installation partners in sales and operations, and our expectations as to the impact of the COVID-19 pandemic. These forward-looking statements involve significant risks and uncertainties, and Enphase Energy's actual results and the timing of events could differ materially from these expectations.

For a more complete discussion of the risks and uncertainties, please see the company's annual report on Form 10-K for the year ended December 31, 2019, which is on file with the SEC, and quarterly report on Form 10-Q for the second quarter ended June 30, 2020, which will be filed during the third quarter of 2020.

Enphase Energy cautions you not to place any undue reliance on forward-looking statements and undertakes no duty or obligation to update any forward-looking statements as a result of new information, future events or changes in its expectations.

Also, please note that financial measures used on this call are expressed on a non-GAAP basis, unless otherwise noted, and have been adjusted to exclude certain charges. The company has provided a reconciliation of these non-GAAP financial measures to GAAP financial measures in its earnings release posted today, which can also be found in the Investor Relations section of its Web site.

Now, I'd like to introduce Badri Kothandaraman, President and Chief Executive Officer of Enphase Energy. Badri?

Executive
Badri Kothandaraman

Good afternoon, and thanks for joining us today to discuss our second quarter 2020 financial results. I hope all of you are staying safe and healthy. Our team did a good job of navigating a difficult macro environment caused by COVID-19. We reported revenue of $125.5 million, shipped approximately 1.1 million microinverters while driving channel inventory back to healthy levels, achieved record non-GAAP gross margin of 39.6% and generated strong free cash flow of $21 million.

In addition, we began shipping our Encharge storage system featuring Ensemble energy management technology. This is an important product release for Enphase. More on this shortly. We exited the second quarter at approximately 40, 21, 19. This means 40% gross margin, 21% operating expenses and 19% operating income, all