Enphase Energy, Inc.

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements reflecting our current expectations and involves risks and uncertainties. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “intend,” “potential,” “aim” or “continue” or the negative of these terms or other comparable terminology. Such statements, include but are not limited to statements regarding: our expectations as to future financial performance, including revenue, cost of revenue, expenses, liquidity, cash requirements, and our ability to maintain and grow our profitability; the capabilities, performance and competitive advantage of our technology and products and planned changes; the timing of new product releases, and the anticipated market adoption of our current and future products; expectations regarding the development of our 1.25 megawatt (“MW”) IQ® Solid-State Transformer (“IQ SST”) product for data centers; our expectations regarding, and our ability to meet, demand for our products; our business strategies, including anticipated trends and operating conditions; growth of and development in markets in which we target, and our expansion into new and existing markets; our performance in operations, including our supply chain management and manufacturing operations and timelines; our product quality and customer service; our expectations regarding qualification of our products for domestic content credit under U.S. tax laws and our ability to meet Foreign Entity of Concern (“FEOC”) requirements for our U.S. products; our expectations regarding macroeconomic events and geopolitical developments, including the effects of tariffs, which may impact our business operations, financial performance and the markets in which we, our suppliers, manufacturers and installers operate; our expectations regarding potential growth through engagement in the third-party ownership (“TPO”) market; expectations regarding the increased variability in the timing of revenue recognition and cash flows related to safe harbor agreements; expectations regarding the commercial microinverter market opportunity in the United States; market risks associated with financial instruments and foreign currency exchange rates; and the importance of government incentives for solar products, including the impact of recent changes in the tax laws, rules and regulations. You should be aware that the forward-looking statements contained in this report are based on our current views and assumptions, and are subject to known and unknown risks, uncertainties and other factors that may cause actual events or results to differ materially. For a discussion identifying some…

Excerpt shortened here; the source contains the full paragraph.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements reflecting our current expectations and involves risks and uncertainties. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “intend,” “potential,” “aim” or “continue” or the negative of these terms or other comparable terminology. Such statements, include but are not limited to statements regarding: our expectations as to future financial performance, including revenue, cost of revenue, expenses, liquidity, cash requirements, and our ability to maintain and grow our profitability; the capabilities, performance and competitive advantage of our technology and products and planned changes; the timing of new product releases, and the anticipated market adoption of our current and future products; expectations regarding the development of our 1.25 megawatt (“MW”) IQ® Solid-State Transformer (“IQ SST”) product for data centers; our expectations regarding, and our ability to meet, demand for our products; our business strategies, including anticipated trends and operating conditions; growth of and development in markets in which we target, and our expansion into new and existing markets; our performance in operations, including our supply chain management and manufacturing operations and timelines; our product quality and customer service; our expectations regarding qualification of our products for domestic content credit under U.S. tax laws and our ability to meet Foreign Entity of Concern (“FEOC”) requirements for our U.S. products; our expectations regarding macroeconomic events and geopolitical developments, including the effects of tariffs, which may impact our business operations, financial performance and the markets in which we, our suppliers, manufacturers and installers operate; our expectations regarding potential growth through engagement in the third-party ownership (“TPO”) market; expectations regarding the increased variability in the timing of revenue recognition and cash flows related to safe harbor agreements; expectations regarding our commercial microinverter products; market risks associated with financial instruments and foreign currency exchange rates; and the importance of government incentives for solar products, including the impact of recent changes in the tax laws, rules and regulations. You should be aware that the forward-looking statements contained in this report are based on our current views and assumptions, and are subject to known and unknown risks, uncertainties and other factors that may cause actual events or results to differ materially. For a discussion identifying some of the important factors that …

Excerpt shortened here; the source contains the full paragraph.

Previous wording

We are a global energy technology company. We deliver smart, easy-to-use solutions that manage solar generation, storage and communication on one platform. Our intelligent microinverters work with virtually every solar panel made, and when paired with our smart technology, result in one of the industry’s best-performing clean energy systems. As of June 30, 2026, we have shipped approximately 89.4 million microinverters, and more than 5.3 million Enphase residential and commercial systems have been deployed in over 165 countries.

Current wording

We are a global energy technology company. We deliver smart, easy-to-use solutions that manage solar generation, storage and communication on one platform. Our intelligent microinverters work with virtually every solar panel made, and when paired with our smart technology, result in one of the industry’s best-performing clean energy systems. As of September 30, 2026, we have shipped approximately 90.8 million microinverters, and more than 5.3 million Enphase residential and commercial systems have been deployed in over 165 countries.

Previous wording

These legislative and regulatory developments have impacted and may in the future negatively impact our eligibility for certain tax credits, the attractiveness of our offerings to solar and storage system lease providers, or the overall demand for our products. If we are unable to meet the revised domestic content or FEOC requirements, our ability to qualify for these incentives could be impaired, which may adversely affect our revenue, gross margins, business operations and competitive position.

Current wording

These legislative and regulatory developments have affected our eligibility for certain tax credits, the attractiveness of our offerings to solar and storage system lease providers, and demand for our products. In addition, if we are unable to satisfy the revised domestic content or FEOC requirements, our ability, or the ability of our customers, to qualify for such incentives could be impaired, which could adversely affect our revenue, gross margins, business operations and competitive position.

Previous wording

In June 2026, we entered into an agreement for the sale of up to $150.0 million of AMPTC we generated during 2026 at 93% of face value. Of such $150.0 million, in June 2026 we sold $37.5 million of AMPTC generated in the first quarter of 2026 for approximately $34.9 million and incurred approximately $0.5 million in transaction-related fees.

Current wording

In June 2026, we entered into an agreement for the sale of up to $150.0 million of AMPTC we generated during 2026 at 93% of face value. Of the $150.0 million, we sold $75.0 million of AMPTC generated in the first and second quarters of 2026 for approximately $69.8 million and incurred approximately $0.7 million in transaction-related fees.

Previous wording

Trade Tariff Uncertainties. The impact of new or existing tariffs, trade restrictions or retaliatory actions on us, the solar industry and our customers continues to create uncertainty and adversely affect our business operations. On February 20, 2026, the United States Supreme Court issued a decision invalidating certain tariffs previously imposed under the International Emergency Economic Powers Act ("IEEPA"). Following this ruling, the U.S. Court of International Trade directed U.S. Customs and Border Protection (“CBP”) to establish a process for the submission and review of refund claims related to eligible IEEPA tariffs. On April 20, 2026, CBP launched an online portal through which companies may submit refund requests for eligible IEEPA tariffs. We received refunds and associated interest of approximately $41.0 million and $11.0 million in the three months ended June 30, 2026 and in July 2026, respectively, from CBP related to tariffs paid during fiscal 2025 and the first quarter of fiscal 2026, of which $45.4 million was recognized as a reduction to cost of revenues during the three and six months ended June 30, 2026, $1.6 million was recognized as interest income in the three and six months ended June 30, 2026, and $5.0 million was capitalized as a cost of inventory as of June 30, 2026.

Current wording

Trade Tariff Uncertainties. The impact of new or existing tariffs, trade restrictions or retaliatory actions on us, the solar industry and our customers continues to create uncertainty and adversely affect our business operations. On February 20, 2026, the United States Supreme Court issued a decision invalidating certain tariffs previously imposed under the International Emergency Economic Powers Act ("IEEPA"). Following this ruling, the U.S. Court of International Trade directed U.S. Customs and Border Protection (“CBP”) to establish a process for the submission and review of refund claims related to eligible IEEPA tariffs. On April 20, 2026, CBP launched an online portal through which companies may submit refund requests for eligible IEEPA tariffs. We received refunds and associated interest of approximately $52.0 million during the nine months ended September 30, 2026 from CBP related to tariffs paid during fiscal 2025 and the first quarter of fiscal 2026, of which approximately $1.6 million and $47.0 million was recognized as a reduction to cost of revenues during the three and nine months ended September 30, 2026, respectively; approximately $0.1 million and $1.7 million was recognized as interest income in the nine months ended September 30, 2026, respectively; and approximately $3.3 million was capitalized as a cost of inventory as of September 30, 2026.

Previous wording

Furthermore, following the Supreme Court's decision, the Administration imposed a temporary import surcharge under Section 122 of the Trade Act of 1974 (“Section 122”). The surcharge was initially set at 10% ad valorem on all imports, and subsequently increased to 15%, the statutory maximum, with certain exceptions for specified commodities (e.g., electronics, critical minerals) and United States-Mexico-Canada Agreement qualified products. The surcharge took effect on February 24, 2026, for a maximum period of 150 days. On May 7, 2026, the U.S. Court of International Trade held that the Section 122 proclamation was invalid. The government has appealed the ruling, and the Federal Circuit issued a temporary stay pending appeal. On July 23, 2026, following an investigation initiated on June 2, 2026 under Section 301 of the Trade Act of 1974, the Administration announced new tariffs ranging from 10% to 12.5% on imports from 60 trading partners. These tariffs were announced shortly before the expiration of the Section 122 tariffs on July 24, 2026. The tariffs apply to many of the countries from whom we source materials and can include some products material to our business. The evolving legal status, and expiration of the Section 122 tariffs creates additional uncertainty regarding our tariff exposure and any potential recovery of Section 122 duties paid during the quarter. If the Section 122 proclamation is ultimately held invalid and refund mechanisms are established, we may be eligible to recover some or all of the Section 122 duties paid. However, the outcome of the appeal and the availability, timing and amount of any potential refunds remain uncertain and are subject to further judicial and administrative proceedings. No receivable for potential Section 122 tariff refunds has been recognized as of June 30, 2026.

Current wording

Furthermore, following the Supreme Court's decision, the Administration imposed a temporary import surcharge under Section 122 of the Trade Act of 1974 (“Section 122”). The surcharge was initially set at 10% ad valorem on all imports, and subsequently increased to 15%, the statutory maximum, with certain exceptions for specified commodities (e.g., electronics and critical minerals) and United States-Mexico-Canada Agreement qualified products. The surcharge took effect on February 24, 2026, for a maximum period of 150 days. On May 7, 2026, the U.S. Court of International Trade held that the Section 122 proclamation was invalid. The government appealed the ruling, and the Federal Circuit issued a temporary stay pending appeal. As of the date of this filing, the appeal remains pending. On July 23, 2026, following an investigation initiated on June 2, 2026 under Section 301 of the Trade Act of 1974, the Administration announced new tariffs of 10% or 12.5% on imports from 60 trading partners. These tariffs were announced shortly before the expiration of the Section 122 surcharge on July 24, 2026. The tariffs apply to many of the countries from whom we source materials and can include some products material to our business. The evolving legal status, and expiration of the Section 122 surcharge creates additional uncertainty regarding our tariff exposure and any potential recovery of Section 122 duties paid to date. If the Section 122 proclamation is ultimately held invalid and refund mechanisms are established, we may be eligible to recover some or all of the Section 122 duties paid. However, the outcome of the appeal and the availability, timing and amount of any potential refunds remain uncertain and are subject to further judicial and administrative proceedings. No receivable for potential Section 122 tariff refunds has been recognized as of September 30, 2026.

Previous wording

As of June 30, 2026, contract liabilities included in deferred revenues, current and deferred revenues, non-current on the condensed consolidated balance sheet includes approximately $105.8 million prepayments or billings under the ITC Five Percent Safe Harbor method for products to be delivered in the third and fourth quarters of 2026, and approximately $45.6 million prepayments or billings under the Physical Work Test beginning-of-construction method. Product deliveries and revenue recognition associated with these arrangements may occur over multiple periods through the second quarter of 2031 and are dependent on the timing of product shipment and satisfaction of performance obligations. As a result, the timing and structure of these safe harbor arrangements have contributed to increased variability in the timing of revenue recognition and cash flows between reporting periods.

Current wording

As of September 30, 2026, contract liabilities included in deferred revenues, current and deferred revenues, non-current on the condensed consolidated balance sheet includes approximately $51.7 million in prepayments or billings under the ITC Five Percent Safe Harbor method for products to be delivered in the fourth quarter of 2026, and approximately $46.8 million in prepayments or billings under the Physical Work Test beginning-of-construction method. Product deliveries and revenue recognition associated with these arrangements may occur over multiple periods through the second quarter of 2031 and are dependent on the timing of product shipment and satisfaction of performance obligations. As a result, the timing and structure of these safe harbor arrangements have contributed to increased variability in the timing of revenue recognition and cash flows between reporting periods.

Previous wording

Demand for Products. The prolonged softness in demand in the solar industry has continued to adversely impact certain distributors and installers, contributing to reduced liquidity, bankruptcies and business closures across the channel. These disruptions have negatively affected our revenue and profitability and could result in higher allowances for credit losses in the future. In Europe, the overall business environment across the region is still challenging, and is expected to remain constrained in 2026. In the United States, uncertainty related to changes in legislation, including from the OBBBA, which eliminated or reduced existing tax credits for clean energy programs, as well as evolving U.S. trade and tariff policies, may further contribute to market volatility and adversely impact customer demand for our products, pricing and our financial performance.

Current wording

Demand for Products. The prolonged softness in demand in the solar industry has continued to adversely impact certain distributors and installers, contributing to reduced liquidity, bankruptcies and business closures across the channel. These disruptions have negatively affected our revenue and profitability and could result in higher allowances for credit losses and loss from change in fair value of debt securities in the future. In Europe, the overall business environment across the region is still challenging, and is expected to remain constrained in the fourth quarter of 2026. In the United States, uncertainty arising from changes in legislation, including the elimination or reduction of existing tax credits for clean energy programs under the OBBA, as well as evolving U.S. trade and tariff policies, has contributed, and may continue to contribute, to market volatility and adversely affect customer demand for our products, our pricing and our financial performance.

Previous wording

IQ Microinverters. We ship IQ8™ Microinverters into 58 countries worldwide. Our IQ8P™ Residential Microinverters and IQ8P-3P™ Commercial Microinverters, with peak output power of 480 W AC, are designed to maximize energy production and can manage a continuous DC current of 14 amperes, supporting higher powered solar modules through increased energy harvesting. The IQ8P-3P Commercial Microinverter is offered for commercial and industrial applications in North America, Mexico, Colombia, Panama, Costa Rica and 13 Caribbean countries. The IQ8P Residential Microinverter is offered for residential and small commercial applications in North America and for grid-tied applications in South Africa, Mexico, Brazil, India, Thailand, the Philippines, France, Spain, Switzerland, the United Kingdom, Italy, Portugal, Poland, Turkey, Colombia, Panama, Costa Rica, Vietnam, Malaysia, Australia, Fiji, and 13 Caribbean countries.

Current wording

IQ Microinverters. We ship IQ8™ Microinverters into 60 countries worldwide. Our IQ8P™ Residential Microinverters and IQ8P-3P™ Commercial Microinverters, with peak output power of 480 W AC, are designed to maximize energy production and can manage a continuous DC current of 14 amperes, supporting higher powered solar modules through increased energy harvesting. The IQ8P-3P Commercial Microinverter is offered for commercial and industrial applications in North America, Mexico, Colombia, Panama, Costa Rica and 13 Caribbean countries. The IQ8P Residential Microinverter is offered for residential and small commercial applications in North America and for grid-tied applications in South Africa, Mexico, Brazil, India, Thailand, the Philippines, France, Spain, Switzerland, the United Kingdom, Italy, Portugal, Poland, Turkey, Colombia, Panama, Costa Rica, Vietnam, Malaysia, Australia, Fiji, North Macedonia and 13 Caribbean countries.

Previous wording

We ship our IQ8HC™ Microinverters, IQ8X™ Microinverters, IQ8P-3P Commercial Microinverters, IQ9N-3P Commercial Microinverters, IQ9S-3P Commercial Microinverters, IQ9N Residential Microinverters, IQ® Battery 5Ps and IQ®Battery 10Cs supplied from manufacturing facilities in the United States with higher domestic content than previous models, that when paired with other U.S.-made solar equipment may qualify for the domestic content bonus tax credit under the Inflation Reduction Act of 2022.

Current wording

We ship our residential and commercial microinverters and domestic batteries supplied from manufacturing facilities in the United States with higher domestic content than previous models, that when paired with other U.S.-made solar equipment may qualify for the domestic content bonus tax credit under the Inflation Reduction Act of 2022.

Previous wording

Our IQ Battery 10C is now shipping in the United States, including Puerto Rico and Bermuda. This battery provides a base capacity of 10 kWh and is designed to easily scale up to 80 kWh as a homeowner's energy requirements grow. Delivering 7.1 kVA continuous output and 90 A of PowerStart TM capability per 10 kWh unit, the IQ Battery 10C is engineered to seamlessly support heavy household loads like HVAC units and pool pumps, without requiring additional neutral-forming hardware.

Current wording

Our fourth-generation residential Enphase Energy System consists of two advanced storage solutions: the IQ® Battery 10C and the IQ® Battery 10CS. Both battery models share the same advanced architecture and integrated microinverters. Each model provides a base capacity of 10 kWh and is designed to easily scale up to 80 kWh as a homeowner's energy requirements grow. Delivering 7.1 kVA continuous output and 90 A of PowerStart™ capability per 10 kWh unit, both batteries are engineered to seamlessly support heavy household loads like HVAC units and pool pumps, without requiring additional neutral-forming hardware. The primary distinction is the physical form: the IQ Battery 10C is designed to be 30% more energy-dense and occupy 62% less wall space than previous models, while the IQ Battery 10CS features a slim, split-module design that reduces cabinet depth for tight spaces. The IQ Battery 10C are now shipping in the United States, including Puerto Rico and Bermuda. Both battery models now work with existing third-party solar systems for grid-forming and grid-tied solutions, providing whole-home backup, multi-day outage resilience, and unified energy monitoring. No replacement of existing solar equipment is required.

Previous wording

Our fourth-generation Enphase Energy System features the IQ®Battery 10C, IQ®Meter Collar and IQ®Combiner 6C. The IQ Battery 10C is designed to be 30% more energy-dense, occupy 60% less wall space, and cost less than previous models. The IQ Meter Collar simplifies whole-home backup by providing microgrid interconnection device functionality, while the IQ Combiner 6C further streamlines installation by consolidating interconnection equipment into one enclosure. Together, these components are designed to simplify the entire backup installation process and enhance reliability.

Current wording

To complete this fourth-generation residential ecosystem, our balance-of-system components provide versatile interconnection options. The IQ® Meter Collar simplifies whole-home backup by providing microgrid interconnection device functionality, while the IQ® Combiner 6C further streamlines installation by consolidating interconnection equipment into one enclosure. Together, these components are designed to simplify the entire backup installation process and enhance reliability.

Previous wording

We continue to expand the deployment of the IQ Battery 5P with FlexPhase™ technology, an AC-coupled, modular 5 kWh battery with 3.84 kVA of continuous power per unit, for both single-phase and three-phase applications. This product is currently shipping to Austria, Germany, Switzerland, Luxembourg, Poland, France, Spain, Portugal, the Netherlands, Greece, Romania, Croatia, Finland, Malta, Estonia, India, Belgium, Slovenia, Slovakia, Denmark, Latvia, Lithuania, Sweden, Hungary, Bulgaria, North Macedonia, and Australia. The standard IQ Battery 5P continues to ship in the United States, Cayman Islands, Australia, New Zealand, Puerto Rico, Mexico, Canada, the United Kingdom, Italy, France, the Netherlands, Luxembourg, Belgium, Romania and India. These Enphase IQ Batteries in Europe can be installed with both single-phase and three-phase third-party solar energy inverters, enabling homeowners to upgrade their existing home solar systems with a residential battery storage solution that reduces costs while providing increased self-reliance.

Current wording

We continue to expand the deployment of the IQ Battery 5P with FlexPhase™ technology, an AC-coupled, modular 5 kWh battery with 3.84 kVA of continuous power per unit, for both single-phase and three-phase applications. This product is currently shipping to Austria, Germany, Switzerland, Luxembourg, Poland, France, Spain, Portugal, the Netherlands, Ireland, Greece, Romania, Croatia, Finland, Malta, Estonia, India, Belgium, Slovenia, Slovakia, Denmark, Latvia, Lithuania, Sweden, Hungary, Bulgaria, North Macedonia and Australia. The standard IQ Battery 5P continues to ship in the United States, Cayman Islands, Australia, New Zealand, Puerto Rico, Mexico, Canada, the United Kingdom, Italy, France, the Netherlands, Luxembourg, Belgium, Romania and India. These Enphase IQ Batteries in Europe can be installed with both single-phase and three-phase third-party solar energy inverters, enabling homeowners to upgrade their existing home solar systems with a residential battery storage solution that reduces costs while providing increased self-reliance.

Previous wording

Our older Enphase IQ Battery 3T and IQ Battery 10T storage systems, have a usable capacity of 10.1 kWh and 3.4 kWh for the United States, and 10.5 kWh and 3.5 kWh for Europe and other international countries. We currently ship these IQ Battery storage systems customers in the United States, Puerto Rico, Canada, Mexico, Australia, New Zealand, Belgium, Germany, the United Kingdom, Italy, Austria, France, the Netherlands, Luxembourg, Finland, Switzerland, Spain, Portugal, Sweden, Denmark and Greece.

Current wording

Our older Enphase IQ Battery 3T and IQ Battery 10T storage systems, have a usable capacity of 3.4 kWh and 10.1 kWh for the United States, and 3.5 kWh and 10.5 kWh for Europe and other international countries. We currently ship these IQ Battery storage systems to customers in the United States, Puerto Rico, Canada, Mexico, Australia, New Zealand, Belgium, Germany, the United Kingdom, Italy, Austria, France, the Netherlands, Luxembourg, Finland, Switzerland, Spain, Portugal, Sweden, Denmark and Greece.

Previous wording

New Products in Development. In April 2026, we announced that we are developing our 1.25 MW IQ SST product for data centers, a distributed solid-state transformer platform designed to convert medium-voltage AC directly to low-voltage DC in a single stage. The IQ SST will be built as a supercluster of 342 power modules, with each module powered by our custom Kestrel ASIC and high-frequency GaN-based power platform. The architecture is designed to deliver native 800 V DC output for next-generation AI racks, fast response on the order of 1 to 3 milliseconds, built-in redundancy, and serviceability through hot-swappable modules. We expect full system demonstrations later this year.

Current wording

New Products in Development. In April 2026, we announced that we are developing our 1.25 MW IQ SST product for data centers, a distributed solid-state transformer platform designed to convert medium-voltage AC directly to low-voltage DC in a single stage. The IQ SST will be built as a supercluster of 342 power modules, with each module powered by our custom Kestrel ASIC and high-frequency GaN-based power platform. The architecture is designed to deliver native 800 V DC output for next-generation AI racks, sub-millisecond response to dynamic AI loads, built-in redundancy, and serviceability through hot-swappable modules, and is designed to scale to racks up to 5 MW. We expect customer pilots in 2027 and commercial shipments to begin in 2028. These timelines are subject to technical, supply chain, and customer-qualification risks, and there is no assurance that we will achieve these milestones on schedule or at all, or that our development efforts will result in commercial sales.

Previous wording

Net revenues decreased by $71.3 million, or 20%, in the three months ended June 30, 2026, as compared to the same period in 2025, driven primarily by a 40% decrease in IQ Batteries MWh shipped and product price decreases, partially offset by a 4% increase in microinverter units sold. During the three months ended June 30, 2026, we sold approximately 1.6 million microinverter units and shipped 113.8 MWh of IQ Batteries, as compared to approximately 1.5 million microinverter units and 190.9 MWh of IQ Batteries shipped in the three months ended June 30, 2025.

Current wording

Net revenues decreased by approximately $117.1 million, or 29%, in the three months ended September 30, 2026, as compared to the same period in 2025, driven primarily by a 33% decrease in IQ Batteries MWh shipped, a 22% decrease in microinverter units sold and product price decreases. During the three months ended September 30, 2026, we sold approximately 1.4 million microinverter units and shipped 129.9 MWh of IQ Batteries, as compared to approximately 1.8 million microinverter units and 195.0 MWh of IQ Batteries shipped in the three months ended September 30, 2025.

Previous wording

Net revenues in the United States were $226.9 million in the three months ended June 30, 2026, as compared to $271.3 million in the same period in 2025, a decrease of $44.4 million, or 16%, primarily due to the expiration of the federal residential clean energy tax credit under Section 25D of the Internal Revenue Code. Microinverter shipments that are associated with safe harbor transactions with customers were $84.3 million and $40.4 million in the three months ended June 30, 2026 and 2025, respectively.

Current wording

Net revenues in the United States were approximately $233.5 million in the three months ended September 30, 2026, as compared to approximately $350.0 million in the same period in 2025, a decrease of $116.5 million, or 33%, primarily due to the expiration of the federal residential clean energy tax credit under Section 25D of the Code. Microinverter shipments that are associated with safe harbor transactions with customers were approximately $85.0 million and $70.9 million in the three months ended September 30, 2026 and 2025, respectively.

Previous wording

Net revenues decreased by $144.5 million, or 20%, in the six months ended June 30, 2026, as compared to the same period in 2025, driven primarily by a 40% decrease in IQ Batteries MWh shipped, 2% decrease in microinverter units sold and product price decreases. During the six months ended June 30, 2026, we sold approximately 3.0 million microinverter units and shipped 216.9 MWh of IQ Batteries, as compared to approximately 3.1 million microinverter units and 361 MWh of IQ Batteries shipped in the six months ended June 30, 2025.

Current wording

Net revenues decreased by approximately $261.6 million, or 23%, in the nine months ended September 30, 2026, as compared to the same period in 2025, driven primarily by a 38% decrease in IQ Batteries MWh shipped, an 8% decrease in microinverter units sold and product price decreases. During the nine months ended September 30, 2026, we sold approximately 4.4 million microinverter units and shipped 346.8 MWh of IQ Batteries, as compared to approximately 4.8 million microinverter units and 556.0 MWh of IQ Batteries shipped in the nine months ended September 30, 2025.

Previous wording

Net revenues in the United States were $460.8 million in the six months ended June 30, 2026, as compared to $534.6 million in the same period in 2025, a decrease of $73.8 million, or 14%, primarily due to the expiration of the federal residential clean energy tax credit under Section 25D of the Internal Revenue Code. Microinverter shipments that are associated with safe harbor transactions with customers were $118.8 million and $94.7 million in the six months ended June 30, 2026 and 2025, respectively.

Current wording

Net revenues in the United States were approximately $694.2 million in the nine months ended September 30, 2026, as compared to approximately $884.6 million in the same period in 2025, a decrease of $190.3 million, or 22%, primarily due to the expiration of the federal residential clean energy tax credit under Section 25D of the Code. Microinverter shipments that are associated with safe harbor transactions with customers were approximately $203.8 million and $165.6 million in the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

Net revenues from international markets were $65.0 million in the three months ended June 30, 2026, as compared to $91.8 million in the same period in 2025, a decrease of $26.8 million, or 29%, primarily driven by lower shipments to customers in Europe driven by continued softening in demand and delayed purchasing activity. In addition, demand in certain European markets was impacted by macroeconomic conditions, regulatory and incentive framework transitions, and lower electricity prices compared to the same period in 2025, which reduced near‑term installation activity and delayed project starts.

Current wording

Net revenues from international markets were approximately $173.8 million in the nine months ended September 30, 2026, as compared to approximately $245.1 million in the same period in 2025, a decrease of $71.3 million, or 29%, primarily driven by lower shipments to customers in Europe during the first half of 2026 driven by continued softening in demand. In addition, demand in certain European markets was impacted by macroeconomic conditions, regulatory and incentive framework transitions, and lower electricity prices compared to the same period in 2025, which reduced near‑term installation activity and delayed project starts.

Previous wording

Cost of revenues decreased by $75.8 million, or 39%, for the three months ended June 30, 2026, as compared to the same period in 2025. This decrease was primarily driven by $45.4 million IEEPA tariff refunds and a 40% decrease in IQ Batteries MWh shipped.

Current wording

Cost of revenues decreased by approximately $48.0 million, or 22%, for the three months ended September 30, 2026, as compared to the same period in 2025. This decrease was primarily driven by a 33% decrease in IQ Batteries MWh shipped and a 22% decrease in microinverter units shipped.

Previous wording

Gross margin increased by 13.1 percentage points in the three months ended June 30, 2026, as compared to the same period in 2025. The increase was primarily due to 15.6 percentage points from the IEEPA tariff refunds, partially offset by lower shipment volumes of IQ Batteries that resulted in unfavorable absorption of fixed manufacturing and supply chain costs over a lower revenue base.

Current wording

Gross margin decreased by 4.5 percentage points in the three months ended September 30, 2026, as compared to the same period in 2025. The decrease was primarily due to product price decreases, lower shipment volumes of IQ Batteries and microinverters that resulted in unfavorable absorption of fixed manufacturing and supply chain costs over a lower revenue base, and 1.9 percentage point impact for adjustment to record AMPTC generated in period at fair value.

Previous wording

Cost of revenues decreased by $81.2 million, or 21%, for the six months ended June 30, 2026, as compared to the same period in 2025. This decrease was primarily driven by $45.4 million IEEPA tariff refunds, a 40% decrease in IQ Batteries MWh shipped and a 2% decrease in microinverter units shipped.

Current wording

Cost of revenues decreased by approximately $129.1 million, or 22%, for the nine months ended September 30, 2026, as compared to the same period in 2025. This decrease was primarily driven by approximately $47.0 million in IEEPA tariff refunds, a 38% decrease in IQ Batteries MWh shipped and an 8% decrease in microinverter units shipped.

Previous wording

This decrease in cost of revenues was partially offset by a $18.9 million loss from the sale of tax credits generated during 2025.

Current wording

This decrease in cost of revenues was partially offset by an approximately $18.9 million loss from the sale of tax credits generated during 2025.

Previous wording

Gross margin increased by 0.8 percentage points in the six months ended June 30, 2026, as compared to the same period in 2025. The increase was primarily due to 7.9 percentage points from the IEEPA tariff refunds, partially offset by 3.3 percentage points from the sale of tax credits generated during 2025, and lower shipment volumes of microinverters and IQ Batteries, which resulted in unfavorable absorption of fixed manufacturing and supply chain costs over a lower revenue base.

Current wording

Gross margin decreased by 1.0 percentage point in the nine months ended September 30, 2026, as compared to the same period in 2025. The decrease was primarily due to product price decreases, lower shipment volumes of microinverters and IQ Batteries, which resulted in unfavorable absorption of fixed manufacturing and supply chain costs over a lower revenue base, 2.0 percentage point impact for adjustment to record AMPTC generated in period at fair value, and 2.2 percentage points from the sale of tax credits generated during 2025, partially offset by 5.4 percentage points from the IEEPA tariff refunds.

Previous wording

Research and development expense increased by $0.2 million, or 1%, in the three months ended June 30, 2026, as compared to the same period in 2025. The increase was primarily due to a $1.3 million increase in equipment and professional services for IQ SST and other next generation products, partially offset by actions in connection with the restructuring initiatives implemented at the beginning of 2026 that lowered personnel-related expenses as a result of a reduction in headcount by $1.1 million. The amount of research and development expenses may fluctuate from period to period due to the differing levels and stages of development activity for our products.

Current wording

Research and development expense decreased by approximately $2.1 million, or 4%, in the three months ended September 30, 2026, as compared to the same period in 2025. The decrease was primarily due to actions in connection with the restructuring initiatives implemented at the beginning of 2026 that lowered personnel-related expenses as a result of a reduction in headcount by approximately $5.6 million, partially offset by approximately $3.5 million increase in equipment and professional services for IQ SST and other next generation products. The amount of research and development expenses may fluctuate from period to period due to the differing levels and stages of development activity for our products.

Previous wording

Research and development expense decreased by $5.1 million, or 5%, in the six months ended June 30, 2026, as compared to the same period in 2025. The decrease was primarily due to actions in connection with the restructuring initiatives implemented at the beginning of 2026 that lowered personnel-related expenses as a result of a reduction in headcount by $5.6 million, partially offset by higher professional services costs of $0.4 million. The amount of research and development expenses may fluctuate from period to period due to the differing levels and stages of development activity for our products.

Current wording

Research and development expense decreased by approximately $7.1 million, or 5%, in the nine months ended September 30, 2026, as compared to the same period in 2025. The decrease was primarily due to actions in connection with the restructuring initiatives implemented at the beginning of 2026 that lowered personnel-related expenses as a result of a reduction in headcount by approximately $11.1 million, partially offset by approximately $4.0 million increase in equipment and higher professional services costs. The amount of research and development expenses may fluctuate from period to period due to the differing levels and stages of development activity for our products.

Previous wording

Sales and marketing expense decreased by $5.2 million, or 10%, in the three months ended June 30, 2026, as compared to the same period in 2025. The decrease was primarily due to actions in connection with the restructuring initiatives implemented at the beginning of 2026 that lowered personnel-related expenses by $4.4 million and professional services, advertising and corporate expenses by $0.7 million as a result of moving certain functions to more cost efficient regions and leveraging advanced artificial intelligence tools.

Current wording

Sales and marketing expense decreased by approximately $3.3 million, or 7%, in the three months ended September 30, 2026, as compared to the same period in 2025. The decrease was primarily due to lowered personnel-related expenses by approximately $4.3 million as a result of moving certain functions to more cost efficient regions and leveraging advanced artificial intelligence tools, partially offset by approximately $0.6 million increase in provision for credit losses and approximately $0.4 million increase in professional services and advertising.

Previous wording

Sales and marketing expense decreased by $6.0 million, or 6%, in the six months ended June 30, 2026, as compared to the same period in 2025. The decrease was primarily due to actions in connection with the restructuring initiatives implemented at the beginning of 2026 that lowered personnel-related expenses by $4.8 million and professional services, advertising and corporate expenses by $1.2 million as a result of moving certain functions to more cost efficient regions and leveraging advanced artificial intelligence tools.

Current wording

Sales and marketing expense decreased by approximately $9.3 million, or 6%, in the nine months ended September 30, 2026, as compared to the same period in 2025. The decrease was primarily due to actions in connection with the restructuring initiatives implemented at the beginning of 2026 that lowered personnel-related expenses by approximately $9.1 million as a result of moving certain functions to more cost efficient regions and leveraging advanced artificial intelligence tools, and approximately $0.8 million lower equipment costs, partially offset by approximately $0.6 million increase in provision for credit losses.

Previous wording

General and administrative expense decreased by $2.7 million, or 8%, in the three months ended June 30, 2026, as compared to the same period in 2025. The decrease was primarily due to actions in connection with the restructuring initiatives implemented at the beginning of 2026 that lowered personnel-related expenses by $1.9 million and lowered equipment and other corporate costs by $0.8 million.

Current wording

General and administrative expense decreased by approximately $6.2 million, or 6%, in the nine months ended September 30, 2026, as compared to the same period in 2025. The decrease was primarily due to actions in connection with the restructuring initiatives implemented at the beginning of 2026 lowered personnel-related expenses by approximately $7.1 million, partially offset by approximately $0.9 million increase in professional services costs and other corporate costs.

Previous wording

Restructuring and asset impairment charges of $1.0 million in the three months ended June 30, 2026, primarily consisted of employee related expenses. Restructuring charges of $3.3 million in the three months ended June 30, 2025, primarily consisted of $1.5 million of asset impairment charges, $1.0 million of employee related expenses and $0.8 million of contract termination charges.

Current wording

Restructuring and asset impairment credit of approximately $0.1 million in the three months ended September 30, 2026, primarily consisted of employee related benefits. Restructuring charges of approximately $1.3 million in the three months ended September 30, 2025, primarily consisted of approximately $0.7 million of contract termination charges and approximately $0.6 million of employee-related expenses.

Previous wording

Restructuring and asset impairment charges of $4.8 million in the six months ended June 30, 2026, primarily consisted of $4.4 million of employee related expenses, $0.3 million of contract termination charges and $0.1 million of asset impairment. Restructuring charges of $6.5 million in the six months ended June 30, 2025, primarily consisted of $4.4 million of employee related expenses, $1.5 million of asset impairment charges and $0.6 million of contract termination charges.

Current wording

Restructuring and asset impairment charges of approximately $4.7 million in the nine months ended September 30, 2026, primarily consisted of approximately $4.4 million of employee related expenses and approximately $0.3 million of contract termination charges. Restructuring charges of approximately $7.8 million in the nine months ended September 30, 2025, primarily consisted of approximately $4.9 million of employee related expenses, approximately $1.4 million of asset impairment charges and approximately $1.5 million of contract termination charges.

Previous wording

Interest income of $24.8 million decreased in the six months ended June 30, 2026, as compared to $31.9 million in the six months ended June 30, 2025, primarily due to lower average cash, cash equivalents and marketable securities, and lower interest rates.

Current wording

Interest income of approximately $16.9 million increased in the three months ended September 30, 2026, as compared to approximately $15.4 million in the three months ended September 30, 2025, primarily due to interest income earned on long-term accounts receivable and outstanding refund for 2024 AMPTCs through our 2024 tax return filed in April 2025, partially offset by lower average cash, cash equivalents and marketable securities, and lower interest rates.

Previous wording

Interest expense, net, of $0.3 million in the three months ended June 30, 2026, primarily included amortization of debt issuance costs with our 0.0% convertible senior notes due 2028 (the “Notes due 2028”). Interest expense of $0.8 million in the three months ended June 30, 2025, primarily included $0.8 million for the amortization of debt issuance costs with our 0.0% convertible senior notes due 2026 (the “Notes due 2026”) and the Notes due 2028, and other interest.

Current wording

Interest expense, net, of approximately $0.3 million in the three months ended September 30, 2026, primarily included amortization of debt issuance costs with our 0.0% convertible senior notes due 2028 (the “Notes due 2028”). Interest expense of approximately $0.8 million in the three months ended September 30, 2025, primarily included approximately $0.8 million for the amortization of debt issuance costs with our 0.0% convertible senior notes due 2026 (the “Notes due 2026”) and the Notes due 2028.

Previous wording

Other expense, net, of $1.4 million in the three months ended June 30, 2026, primarily consisted of $2.6 million non-cash expense related to change in the fair value of debt securities and a $0.4 million net foreign currency loss from remeasurement of monetary assets and liabilities, partially offset by $1.6 million tariff interest refund. Other expense, net, of $8.9 million in the three months ended June 30, 2025, primarily consisted of $9.5 million non-cash expense related to change in the fair value of debt securities and $0.1 million change in tax equity, partially offset by $0.7 million net gain due to foreign currency denominated monetary assets and liabilities.

Current wording

Other expense, net, of approximately $26.6 million in the three months ended September 30, 2026, primarily consisted of approximately $26.5 million non-cash expense related to the decrease in the fair value of debt securities, approximately $0.7 million non-cash guarantee expense and approximately $0.1 million decrease in the fair value of our tax equity fund investment, partially offset by approximately $0.4 million gain on asset sale, $0.2 million of net foreign currency loss from remeasurement of monetary assets and liabilities and approximately $0.1 million tariff refund interest. Other expense, net, of approximately $3.7 million in the three months ended September 30, 2025, primarily consisted of approximately $3.2 million non-cash expense related to the decrease in the fair value of debt securities and approximately $0.5 million decrease in the fair value of our tax equity fund investment.

Previous wording

Interest income of $12.2 million decreased in the three months ended June 30, 2026, as compared to $14.9 million in the three months ended June 30, 2025, primarily due to lower average cash, cash equivalents and marketable securities, and lower interest rates.

Current wording

Interest income of approximately $41.7 million decreased in the nine months ended September 30, 2026, as compared to approximately $47.4 million in the nine months ended September 30, 2025, primarily due to lower average cash, cash equivalents and marketable securities, and lower interest rates.

Previous wording

Interest expense of $1.0 million in the six months ended June 30, 2026, primarily included amortization of debt issuance costs with the Notes due 2026 and the Notes due 2028. Interest expense of $2.9 million in the six months ended June 30, 2025, primarily included the coupon interest, debt discount amortization with the Notes due 2025, and amortization of debt issuance costs with the Notes due 2025, Notes due 2026 and Notes due 2028, and other interest.

Current wording

Interest expense of approximately $1.3 million in the nine months ended September 30, 2026, primarily included amortization of debt issuance costs with the Notes due 2026 and the Notes due 2028. Interest expense of approximately $3.7 million in the nine months ended September 30, 2025, primarily included approximately $3.7 million for the coupon interest and debt discount amortization with our 0.25% convertible senior notes due 2025 (the “Notes due 2025”), and amortization of debt issuance costs with the Notes due 2025, Notes due 2026 and Notes due 2028, and other interest.

Previous wording

Other income, net of $2.3 million in the six months ended June 30, 2026, primarily consisted of $1.6 million tariff interest refund, $1.4 million realized gain from sale of marketable securities, $1.7 million gain related to the sale of patents, and $0.4 million net foreign currency gain from remeasurement of monetary assets and liabilities, partially offset by $2.4 million non-cash expense related to change in the fair value of debt securities and $0.2 million decrease in the fair value of our tax equity fund investment. Other expense, net, of $8.9 million in the six months ended June 30, 2025, primarily consisted of $9.1 million non-cash expense related to change in the fair value of debt securities and $0.1 million in realized loss on investments, partially offset by $0.3 million net gain due to foreign currency denominated monetary assets and liabilities.

Current wording

Other expense, net, of approximately $24.3 million in the nine months ended September 30, 2026, primarily consisted of approximately $29.3 million non-cash expense related to the decrease in the fair value of debt securities, approximately $0.7 million non-cash guarantee expense, approximately $0.7 million realized loss from sale of marketable securities, approximately $0.3 million decrease in the fair value of our tax equity fund investment, partially offset by approximately $2.9 million net foreign currency gain from remeasurement of monetary assets and liabilities, approximately $1.7 million gain related to the sale of patents, approximately $1.7 million tariff interest refund, and approximately $0.4 million of gain on asset sale. Other expense, net, of approximately $12.7 million in the nine months ended September 30, 2025, primarily consisted of approximately $12.3 million non-cash expense related to the decrease in the fair value of debt securities and approximately $0.5 million decrease in the fair value of our tax equity fund investment, partially offset by approximately $0.1 million net gain due to foreign currency denominated monetary assets and liabilities.

Previous wording

For the six months ended June 30, 2026, we recorded an income tax provision of $19.4 million, as compared to an income tax provision of $22.3 million in the same period in 2025. This $3.0 million change primarily reflects the lower profitability in current-year period, principally in the United States, and tax effects related to the IEEPA tariff refund.

Current wording

For the three months ended September 30, 2026, we recorded an income tax benefit of approximately $27.0 million, as compared to an income tax provision of approximately $10.4 million in the same period in 2025. This $37.3 million change primarily reflects the tax benefit related to the impairment of investments in multiple debt securities, and lower profitability in the current-year period, principally in the United States.

Previous wording

The income tax provision for the three months ended June 30, 2026 was calculated using the annualized effective tax rate method and primarily reflects tax benefits associated with the impact of the AMPTC. While AMPTC is directly related to qualifying production and shipment activity and pretax income, it is treated as permanent items for income tax accounting purposes and is excluded from the annualized effective tax rate calculation. As a result, our effective tax rate for the period reflects the impact of these permanent benefits and may not be indicative of the statutory tax rate or expected annual effective tax rate.

Current wording

The income tax benefit for the three months ended September 30, 2026 was calculated using the annualized effective tax rate method and primarily reflects tax benefits associated with the impact of the AMPTC. While AMPTC is directly related to qualifying production and shipment activity and pretax income, it is treated as permanent items for income tax accounting purposes and is excluded from the annualized effective tax rate calculation. As a result, our effective tax rate for the period reflects the impact of these permanent benefits and may not be indicative of the statutory tax rate or expected annual effective tax rate.