Home energy technology company Enphase (NASDAQ: ENPH) revenue met expectations in Q2 CY2026, but sales fell by 19.6% year on year to $291.9 million. The company expects next quarter’s revenue to be around $305 million, in line with analysts’ estimates. Its non-GAAP profit of $0.46 per share was in line with analysts’ consensus estimates.
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Enphase (ENPH) Q2 CY2026 Highlights:
- Revenue: $291.9 million vs analyst estimates of $290.2 million (19.6% year-on-year decline, 0.6% beat)
- Adjusted EPS: $0.46 vs analyst estimates of $0.46 (in line)
- Revenue Guidance for Q3 CY2026 is $305 million at the midpoint, roughly in line with what analysts were expecting
- Operating Margin: 17.7%, up from 10.2% in the same quarter last year
- Free Cash Flow Margin: 8.9%, up from 5.1% in the same quarter last year
- Sales Volumes rose 12.1% year on year (0.5% in the same quarter last year)
- Market Capitalization: $5.01 billion
Company Overview
The first company to successfully commercialize the solar micro-inverter, Enphase (NASDAQ: ENPH) manufactures software-driven home energy products.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Regrettably, Enphase’s sales grew at a tepid 4.6% compounded annual growth rate over the last five years. This fell short of our benchmark for the industrials sector and is a tough starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Enphase’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 3.3% annually. 
We can dig further into the company’s revenue dynamics by analyzing its number of units sold, which reached 1.58 million in the latest quarter. Over the last two years, Enphase’s units sold averaged 5.8% year-on-year declines. Because this number is lower than its revenue growth, we can see the company benefited from price increases. 
This quarter, Enphase’s revenue fell by 19.6% year on year to $291.9 million but beat Wall Street’s estimates by 0.6%. Company management is currently guiding for a 25.7% year-on-year decline in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to decline by 8.2% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and implies its products and services will see some demand headwinds.
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Operating Margin
Enphase has been an efficient company over the last five years. It was one of the more profitable businesses in the industrials sector, boasting an average operating margin of 14.2%. This result isn’t surprising as its high gross margin gives it a favorable starting point.
Looking at the trend in its profitability, Enphase’s operating margin decreased by 6.1 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.
This quarter, Enphase generated an operating margin profit margin of 17.7%, up 7.5 percentage points year on year. The increase was driven by stronger leverage on its cost of sales (not higher efficiency with its operating expenses), as indicated by its larger rise in gross margin.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions.
Enphase’s unimpressive 6% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.
Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.
Although it wasn’t great, Enphase’s two-year annual EPS growth of 4.2% topped its two-year revenue performance.
We can take a deeper look into Enphase’s earnings to better understand the drivers of its performance. Enphase’s operating margin has expanded over the last two years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.
In Q2, Enphase reported adjusted EPS of $0.46, down from $0.69 in the same quarter last year. This print was close to analysts’ estimates. Over the next 12 months, Wall Street expects Enphase’s full-year EPS to shrink by 18.1% from $2.54 to $2.08.
Key Takeaways from Enphase’s Q2 Results
Enphase delivered an in-line quarter, meeting analysts’ revenue and EPS expectations, while its guidance for the next quarter was also broadly consistent with consensus. The stock rose 1.9% to $36.95 immediately following the results.
Is Enphase an attractive investment opportunity right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).
