In its Q2 2026 earnings call on July 28 — the second quarterly call in a row in which the company posted a 20% year-over-year decline in revenue — Enphase CEO Badri Kothandaraman asserted the company was well positioned to weather the storm of a U.S. residential solar market in the depths of a slump that shows no signs of improving.
“We are not stopping and waiting. We are not waiting for things to improve. We are taking matters into our own hands,” Kothandaraman said, in response to a question from Roth Capital Partners analyst Philip Shen late in the call.
Specifically, Kothandaraman cited actions the company has taken in the European market, where Enphase posted a 35% increase in sales in the second quarter. He explained that the company had adjusted its prices in Europe to address some concerns about the value offered by its third-generation microinverters.
Kothandaraman further explained that Europe is “increasingly becoming a battery-led market,” because of low feed-in tariffs in France and the pending expiration of net metering in Norway. He characterized the company’s sales efforts in those countries as a “flywheel” that builds a back-and-forth relationship between the company and the local installers it assists in earning new sales.
As for the company’s stateside business, Kothandaraman touted the company’s hardware partnership with SolSource Solutions and TriBeam Financial to offer pre-paid leases that include Enphase microinverter and battery systems under a third-party financing product called Propel, with ongoing operations and maintenance services also provided by the inverter maker.
In Q2, Propel expanded its reach from four to six states, with a plan to double that number by the end of Q3. Kothandaraman pointed to a 75% battery attachment rate for the nearly 200 installations initiated each week under the program, and said he expects the company’s upcoming fifth-generation batteries to drive demand.
Outside of the residential market, Enphase is continuing the development process for new products like its IQ Vault 80 commercial battery and IQ SST solid-state transformer.
The IQ Vault battery is designed to hold 80 kWh of energy and connect to commercial three-phase systems of 480 or 208 volts, offering 40 kW of continuous power output.
The IQ SST transformer, first announced the same day as the company’s Q1 2026 earnings call, will offer a scalable transformer solution targeted at the AI data center market. The IQ SST uses the company’s famous distributed architecture, known for its redundancy and scalability.
On the call, Kothandaraman and Enphase chief product officer Raghu Belur explained that the modular architecture allows the company to adapt the design of the IQ SST to numerous different configurations — including DC-to-DC products — without changes to the underlying power module.
Belur said the company expects to build a full SST product by the end of the year, something he said would “open the gates for much bigger conversation(s) and pilots.” Kothandaraman said the timeline for the product will include pilot projects in 2027 and volume shipments by 2028.
Kothandaraman was also asked on the call about the recent decision by the FCC to ban all new inverter models from foreign companies, news that had broken the same afternoon as the Enphase earnings release. The CEO explained that, while the residential segment of the company’s business would not be much affected, he did see an opportunity for the small commercial side to gain market share.
In providing the company’s guidance for Q3, Kothandaraman said the company expects revenue of $290 million to $320 million, and said it currently was “over 70% booked to the midpoint” of that guidance.
If it achieves the midpoint figure of $305 million, the company would post 25.7% lower revenue for Q3 than its Q3 2025 figure of $410.4 million.
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