Enphase Energy stock slides on disappointing Q4 outlook, tariff headwinds

[Enphase headquarters in Silicon Valley]
Sundry Photography/iStock Editorial via Getty Images

Enphase Energy (NASDAQ:ENPH [https://seekingalpha.com/symbol/ENPH]) shares dropped nearly 9% in premarket trading Wednesday after the solar inverter maker issued a weaker-than-expected Q4 revenue forecast and said tariffs had weighed on margins.

The company expects fourth-quarter revenue of $310 million–$350 million, below the $382.97 million consensus estimate. Enphase guided for an adjusted gross margin of 42%–45%, including about five percentage points of negative impact from reciprocal tariffs.

In the third quarter, adjusted gross margin improved to 49.2% from 48.1% a year ago, though tariffs reduced margins by 4.9 percentage points, compared with about two points in Q2.

Enphase said on its post-earnings call that it expects limited exposure to new China-related tariffs, as it continues shifting its supply chain out of China. Earlier this year, U.S. officials imposed steep tariffs on most solar cells imported from Southeast Asia following complaints about unfair pricing.

The company and other renewable energy firms also face uncertainty after the passage of President Trump’s “One Big Beautiful Bill Act”, which accelerates the phase-out of clean energy tax credits.

For Q3, Enphase posted adjusted earnings of $0.90 per share, beating estimates [https://seekingalpha.com/news/4509703-enphase-energy-non-gaap-eps-of-0_90-beats-by-0_24-revenue-of-410_43m-beats-by-40_83m] by $0.24, with revenue up 7.8% year over year to $410.43 million—its highest level in two years. U.S. revenue surged 29% sequentially, driven by stronger demand and safe harbor-related sales.

Enphase ended the quarter with $1.48 billion in cash and marketable securities and generated $13.9 million in operating cash flow. Free cash flow fell sharply to $5.9 million, down from $161.6 million a year earlier.

Enphase Energy (NASDAQ:ENPH [https://seekingalpha.com/symbol/ENPH]) shares are down nearly 47% year-to-date. Short interest in the company stands at 21.34%.

MORE ON ENPHASE ENERGY

* Enphase Energy, Inc. (ENPH) Q3 2025 Earnings Call Transcript [https://seekingalpha.com/article/4834358-enphase-energy-inc-enph-q3-2025-earnings-call-transcript]
* Enphase: More Pain In 2026 - Structural Risks Remain [https://seekingalpha.com/article/4828287-enphase-more-pain-in-2026-structural-risks-remain]
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* Enphase Energy outlines $310M–$350M Q4 revenue guidance while advancing U.S. battery production and TPO strategy [https://seekingalpha.com/news/4509952-enphase-energy-outlines-310m-350m-q4-revenue-guidance-while-advancing-u-s-battery-production]
* Enphase Energy Non-GAAP EPS of $0.90 beats by $0.24, revenue of $410.43M beats by $40.83M [https://seekingalpha.com/news/4509703-enphase-energy-non-gaap-eps-of-0_90-beats-by-0_24-revenue-of-410_43m-beats-by-40_83m]