What’s going on here?
Enphase Energy just reported its best quarterly revenue in two years, smashing Wall Street expectations as US demand surged and outweighed weaker European sales.
What does this mean?
In the third quarter of 2025, Enphase took in $410.4 million in revenue – well above analysts’ $366.4 million forecast – signaling a sharp rebound for the solar tech firm. Adjusted earnings per share came in at $0.90, handily beating the predicted $0.64, with adjusted net income reaching $117.3 million. The standout was a 29% jump in US sales, as customers accelerated purchases ahead of policy changes. On the flip side, European sales sank 38%, and reciprocal tariffs led to a 4.9 percentage point hit to gross margins. Looking forward, Enphase expects a softer patch ahead, guiding for fourth-quarter revenue between $310 million and $350 million, along with more margin pressure.
Why should I care?
For markets: A balancing act for investors.
Enphase shares are holding steady, trading at a price/earnings ratio of 15 – unchanged from last quarter, reflecting measured investor expectations. The analyst consensus is a cautious ‘hold’, highlighting mixed views with 11 buys and 16 holds versus 9 sells. But compared to peers in renewable energy equipment and services – who are generally rated a ‘buy’ – Enphase’s 12-month median price target of $40 (about 8% above current levels) suggests the market sees upside, though near-term uncertainty is top of mind.
The bigger picture: Shifting policies shake up renewables.
Enphase’s strong US performance stands out in a sector where global uncertainty is becoming the norm. Tariff-driven margin hits and sliding European demand reveal how policy changes can quickly swing the fortunes of even top firms. As customers move to lock in purchases ahead of shifting regulations, solar companies like Enphase face an environment where regional swings and trade policy significantly impact growth. The way leaders adapt over coming quarters could signal where renewable energy goes from here.
