[Management View]
Revenue for Q2 2025 was $363.2 million, including $40.4 million in safe harbor revenue. Key metrics include 1,530,000 microinverters and 190.9 megawatt hours of IQ batteries shipped. Gross margin was 48.6% non-GAAP, impacted by tariffs. Strategic priorities focus on product innovation, supply chain diversification, and expanding lease financing access.

[Outlook]
Guidance for Q3 2025 revenue is $330 million to $370 million, with IQ Battery shipments of 190–210 megawatt hours. Non-GAAP gross margin expected at 43%-46% with IRA benefits. Future plans include launching fifth-generation batteries and IQ9 microinverters, targeting cost reduction and new market opportunities.

[Financial Performance]
YoY trends show a slight increase in revenue and shipments. Non-GAAP gross margin decreased from 48.9% in Q1 to 48.6% in Q2. GAAP gross margin also saw a slight decline. Operating expenses were controlled, with a focus on reducing costs.

[Q&A Highlights]
Question 1: Can you elaborate on the creative financing structures for TPO providers and your market share with them?
Answer: Enphase has a healthy market share with both cash loan and TPO customers. The company is working to bring lease financing access to long tail installers to prevent market erosion. Details will be shared soon, possibly in the next earnings call. Enphase expects a 20% drop in TAM in 2026 due to 25D, and is focusing on reducing installation costs and lead generation costs.

Question 2: How do you intend on managing field inventories with distributors for the balance of the year?
Answer: Enphase expects a 25B increase in demand, which will help normalize channel inventory levels by the end of the year.

Question 3: Did you share how much safe harbor you expect in the Q3 revenue?
Answer: Q3 revenue guidance does not include any safe harbor. Enphase is ready to service TPO partners once they finalize their plans.

Question 4: Can you walk us through the assumptions of how you get to the 20% TAM reduction in 2026?
Answer: Enphase expects the leasing market to increase slightly while the cash and loan market will decrease significantly. Key markets like California and the East Coast will remain attractive due to high utility rates.

Question 5: How quickly can you implement the strategies for working with the long tail on PPO and financing, and what are the incremental costs?
Answer: Operating costs to facilitate these strategies are not meaningfully higher. Innovation in batteries and microinverters will help reduce costs and improve margins.

Question 6: Could you discuss how the dynamics will work for the 4Q safe harboring?
Answer: TPO partners have until June 30 to finalize their safe harbor inventory and strategy. Enphase expects installers to expand their crews to cater to the demand rush.

Question 7: Can you talk about your ability to upsell in existing home orders on either chargers or batteries?
Answer: Enphase's AC-coupled solutions allow easy addition of batteries and EV chargers without touching the existing solar system. This market segment is very important, with significant advantages in customer acquisition and product flexibility.

Question 8: What growth looks like outside of the US and EU markets?
Answer: Australia is expected to resume growth starting from Q3 due to a new battery rebate. India is seeing steady growth, and Japan is ramping up with new products.

Question 9: Could you quantify the tariff impact on the Q3 earnings guidance?
Answer: The tariff impact is estimated at 4% on gross margin, with 1% from microinverters and 3% from batteries. Enphase is working on diversifying supply chains and launching fifth-generation batteries to mitigate tariff effects.

Question 10: Thoughts on when the treasury might issue guidance for safe harbor plans?
Answer: Enphase does not know when the treasury will release guidance. TPO partners are monitoring the situation closely.

Question 11: Any additional demographic information about the TPO players you are in discussions with?
Answer: Enphase works with every TPO and is having conversations with almost 80% of them on safe harbor. Some installers are confident in selling cash and loans, while others are pivoting towards lease and PPA.

Question 12: Is using your own balance sheet part of the potential scenarios for helping tail customers get financing?
Answer: Enphase is not looking at leveraging its balance sheet but has a history of working closely with installers and can vet them effectively.

Question 13: Are there any internal cost reduction efforts to lower overhead OpEx?
Answer: Enphase continuously adjusts expenses without compromising on R&D or customer service. The company evaluates both labor and non-labor costs to optimize operations.

[Sentiment Analysis]
Analysts and management maintained a positive tone, focusing on strategic initiatives and product innovations to navigate market challenges. There was a sense of urgency and confidence in addressing future demand and cost reduction.

[Quarterly Comparison]
| Metric | Q2 2025 | Q1 2025 |
|----------------------------|---------------|---------------|
| Revenue | $363.2 million| $353.6 million|
| Microinverter Shipments | 1,530,000 | 1,410,000 |
| IQ Battery Shipments | 190.9 MWh | 44.1 MWh |
| Non-GAAP Gross Margin | 48.6% | 48.9% |
| GAAP Gross Margin | 46.9% | 47.2% |
| Non-GAAP Operating Expenses| $77.8 million | $79.4 million |
| GAAP Operating Expenses | $133.5 million| $136.3 million|
| Non-GAAP Income from Ops | $98.6 million | $94.6 million |
| GAAP Income from Ops | $37.0 million | $31.9 million |
| Non-GAAP Net Income | $89.9 million | $89.2 million |
| GAAP Net Income | $37.1 million | $29.7 million |
| Free Cash Flow | $18.4 million | $14.6 million |

[Risks and Concerns]
Risks include tariff impacts, potential market contraction in 2026, and uncertainties related to safe harbor guidance. Enphase is addressing these risks through supply chain diversification, product innovation, and strategic partnerships.

[Final Takeaway]
Enphase is navigating a challenging market environment with strategic initiatives focused on product innovation, cost reduction, and expanding financing access. The company is well-positioned to lead through industry transitions, leveraging its strong relationships with installers and TPO partners. Despite potential market contraction, Enphase's focus on innovation and strategic measures aims to sustain demand and drive growth.