Enphase Energy, Inc. reported quarterly revenue of $356.1 million for the first quarter of 2025, which missed Wall Street's expectations. This figure represents a 13% decrease in U.S. revenue quarter-over-quarter, attributed to seasonality and softening demand, partially offset by $54.3 million in safe harbor revenue.
European revenue, however, increased approximately 7% quarter-over-quarter, primarily driven by higher battery sales as the company ramped shipments of its IQ Battery 5P with FlexPhase. The non-GAAP gross margin was 48.9%, a decrease from 53.2% in the prior quarter, mainly due to lower bookings of 45X production tax credits and product mix.
Non-GAAP operating expenses decreased to $79.4 million due to restructuring actions initiated in Q4 2024, resulting in a non-GAAP operating income of $94.6 million. Enphase repurchased 1,594,105 shares for $100.0 million and paid off $102.2 million in convertible senior notes. For the second quarter of 2025, the company provided revenue guidance between $340 million and $380 million, including approximately $40 million in Safe Harbor revenue, and anticipated a 2 percentage point impact on gross margins from new tariffs on battery components.
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