Enphase Energy, Inc. · NASDAQ:ENPH

Enphase Energy — Investor Day (December 2019)

48 slides from Enphase Energy's investor day presentation, Dec 12, 2019

Slide 1: Analyst Day: Profitable Growth
Analyst Day Profitable Growth December 12, 2019
Slide 2: Safe Harbor: Use of Forward-Looking Statements
Safe Harbor Use of Forward-Looking Statements This presentation contains forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements concerning financial performance and guidance, including re
Slide 3: Agenda
Agenda Badri Kothandaraman Chief Executive Officer Raghu Belur Chief Product Officer Arthur Souritzidis | Marc Jones CEO - Momentum Solar CEO - Sunpro Solar Eric Branderiz Chief Financial Officer Q & A Product Demos Fremont HQ
Slide 4: Badri Kothandaraman, Chief Executive Officer
Badri Kothandaraman Chief Executive Officer
Slide 5: 2019 Financial Performance
2019 Financial Performance $619M $122M Revenue Operating Income +96% +495% Assumes midpoint of Q4’19 guidance 5 | © 2019 Enphase Energy, Inc. All numbers are Non-GAAP. Refer to appendix for GAAP reconcilition
Slide 6: 2019 achievements and progress
&1TTP'FHP&Y࣢ <JINI࣢FKJ\࣢YMNSLX\JQQFSISJJIYTRFPJTYMJWYMNSLXGJYYJW Exceeded Introduced Further financial target SJ\LJSJWFYNTS improved quality of 30-20-10 IQTM products and customer service Forecasting 500Ku Fixed Strong Growth in Microinverters from supply chain LWT\YMin Internatio
Slide 7: Our Core Differentiation
Our Core Differentiation Semiconductor 8TKY\FWJ *SXJRGQJTM Energy Management Technology SOLAR GRID GENERATOR AC STORAGE LOADS Predictive 8TKY\FWJ)JKNSJI Home Energy Control Architecture Management 7 | © 2019 Enphase Energy, Inc.
Slide 8: Operational Excellence: Customer Experience
Operational Excellence Customer Experience Quality Customer Service 5X 1 54%1 Better than Worldwide M Series NPS 500 dppm 30 sec Reliability Wait Time Target Target Laser Focus on Quality and Customer Service 15X refers to actual results of IQ 7TM Microinverters as of Q3’19, NPS refers to Net Promot
Slide 9: Operational Excellence: Gross Margin Management
Operational Excellence Gross Margin Management Price Cost Value Based Product Pricing Innovation Performance, ASIC, Transformers, Quality, Service FETs, Connectors Product Supply Chain Segmentation Optimization IQ 7/7+/7X/7A™ Tariff, Expedites, Procurement, CM 5WTIZHY.SST[FYNTS2F]NRN_NSL;FQZJ2
Slide 10: Scalable Business Model
8HFQFGQJ'ZXNSJXX2TIJQ CAPEX Lite OPEX Efficient No Big Headcount1 Factories 35% INDIA/CHINA 47% 4% EMEA NA 14% ANZ Capacity 23of 3.5M Microinverters and 120MWh Storage Per Quarter in Q4’20 1 Percentage of worldwide headcount as of Q3’19 2 Estimated CAPEX spending $25M for 2020 doubles capacity 3 1
Slide 11: Ensemble: laying the foundation for the next decade
*SXJRGQJ TM Great technology Great products Laying the and intellectual enabling new vectors KNSFSHNFQ࣢KTZSIFYNTS UWTUJWY^࣢ TKUWTKNYFGQJ࣢LWT\YM for the next decade 11 | © 2019 Enphase Energy, Inc.
Slide 12: Residential Solar
Residential Solar $4B 1 2022 SAM $2.5B 2019 SAM 1 .SYWTIZHJ*SXJRGQJ™*SYJW3J\7JLNTSX+THZXTS9NJW.SYFQQJWX 1Source: GTM/Wood Mackenzie Research (US PV Market Forecast) 2019, IHS Research (IHS EMEA Report 2019), SunWiz Research 2019, ENPH Estimates 12 | © 2019 Enphase Energy, Inc. 2022 SAM
Slide 13: Europe Growth Plan
*ZWTUJ,WT\YM5QFS Target To Grow Revenue 2X By 2020 )TZGQJ 9WFSXKJW Sales Headcount Top Talent to in 6 Months Europe ICELAND FINLAND NORWAY SWEDEN NORTH SEA ESTONIA BALTIC SEA LATVIA DENMARK Enter Focus LITHUANIA LUXEMBURG 8 Countries Small Systems BELARUS IRELAND in 2020 Social Housing UNITED KING
Slide 14: New Vectors of Profitable Growth
3J\;JHYTWXTK5WTKNYFGQJ,WT\YM Increasing SAM from $3.3B in 2019 to $12.5B in 2022 Residential Residential Small Commercial Offgrid Solar Storage Solar Solar & Storage 14 | © 2019 Enphase Energy, Inc.
Slide 15: Residential Storage
Residential Storage New Installs $2B 1 2022 SAM 1 Enphase Installed Base $1B 2 $500M 2022 SAM 2019 SAM 1 4SJXYTUXMTU7JQNFGQJ8HFQFGQJ8NRUQJ8FKJ 1 Source: GTM/Wood Mackenzie Research (Global Energy Storage Outlook 2019), IHS Research (IHS EMEA Report 2019), ENPH Estimates 2022 SAM of 3.6GWh:
Slide 16: Small Commercial Solar
Small Commercial Solar $1.5B 1 2022 SAM $300M 2019 SAM 1 7JQNFGQJ7FUNI8MZYIT\S(TRUQNFSY<TWQI(QFXX(TXY Source:1 GTM/Wood Mackenzie Research (US State DG Market Prospector) 2019, IHS Research (IHS EMEA Report 2019), ENPH Estimates 2022 SAM of 11GW: NA/LATAM 4.2GW, EMEA 3GW, APAC 3.8GW 16 | © 2
Slide 17: Offgrid Solar and Storage
Offgrid Solar and Storage Focus on Indian Market Providing Farmers Solar Water Pump 7JQNFGQJ8TZWHJTK*SJWL^ $2B 2022 SAM1 Standalone System Reducing Energy Poverty $1.5B 2022 SAM 2 Air Cooler Mitigating $0.5B Extreme Heat 2022 SAM3 Source: MNRE, Govt. of India; CEEW India; India Census Data 2011;
Slide 18: Recap: Increasing SAM from $3.3B to $12.5B
Recap Increasing SAM from $3.3B in 2019 to $12.5B in 2022 Residential Residential Small Commercial Offgrid Solar Storage Solar Solar & Storage $4B1 $3B 1 $1.5B1 $4B1 1All the numbers refer to 2022 SAM 18 | © 2019 Enphase Energy, Inc.
Slide 19: Conclusion
Conclusion Revenue Q3’18 Q4’18 Q1’19 Q2’19 Q3’19 Three Pillars of Relentless Focus Ensemble™ SAM Expanding Differentiation: on Customer Enables from $3.3B in 2019 Semiconductor, Experience and New Vectors to $12.5B in 2022 Software and GM Management for Profitable Ensemble™ with a Scalable Growth Bu
Slide 20: Raghu Belur, Chief Product Officer
Raghu Belur Chief Product Officer
Slide 21: The Power of Semiconductors and Software
9MJ5T\JWTK8JRNHTSIZHYTWX8TKY\FWJFSI*SXJRGQJӴ High Quality Safety Higher Efficiency, Fewer Components No High Voltage DC IoT System, Over-the-air Upgrades Lithium Iron Phosphate Chemistry Flexibility Exceptional Value Modular Design Grid Independence AC Market Place AC Module Supply Chain Eff
Slide 22: Ensemble Energy Management Technology
*SXJRGQJTM *SJWL^2FSFLJRJSY9JHMSTQTL^ Automatically manages energy resources in your home such as solar, storage, grid, loads and generator SOLAR GRID GENERATOR AC STORAGE LOADS (Backup, Time of Use) 22 | © 2019 Enphase Energy, Inc.
Slide 23: In the Customer's Home: Ensemble 1.0
4SYMJ(ZXU࣢TK*SXJRGQJ™ 1.0 Enlighten92 Cloud WiFi/Cellular Wireless 1 .6Ӵ.6Ӵ 3 2 .6Ӵ 1 3 *SUT\JWӴ HTRGNSJW X\NYHM M P<M P<M 5T\JW1NSJ(TRRZSNHFYNTS Main Load Panel Wireless Generator 2 *SHMFWLJӴ storage system Home Loads IQ 8Ӵ *SHMFWLJӴ8YTWFLJ8^XYJR2FPJX9MJ8^XYJR&Q\F^X4SӴ 23 |
Slide 24: IQ 8 Residential Microinverter
IQ 8™ Residential Microinverter World’s First Grid Forming Microinverter System 24 | © 2019 Enphase Energy, Inc.
Slide 25: Encharge Storage System
EnchargeӴ Storage System Available In Two Configurations 10.1kWh 3.4kWh 4SJXYTUXMTU7JQNFGQJ8HFQFGQJ8NRUQJ8FKJ 25 | © 2019 Enphase Energy, Inc.
Slide 26: Ensemble 2.0 Grid-Agnostic System
,JFWNSLZUKTW࣢*SXJRGQJ™ 2.0 Enlighten92 Cloud WiFi/Cellular Wireless + .6Ӵ *SUT\JWӴ IQ 8Ӵ HTRGNSJW X\NYHM M 5T\JW1NSJ(TRRZSNHFYNTS Main Load Panel PCS Wireless 5T\JW Control System Generator *SHMFWLJӴ storage system Home Loads IQ 8Ӵ &IINYNTSTK.6Ӵ,WNI.SIJUJSIJSY8TQFW8NLSNKNHFSYQ^.RUWT[JX
Slide 27: IQ 8D Commercial Microinverter
IQ 8D™ Commercial Microinverter One 640WAC Microinverter Supports Two 400WDC Panels 50% Greater 5T\JW Density1 500 dppm 7JQNFGNQNY^ 9FWLJY 97.5% Efficiency IQ 8™ IQ 8D™ 1 Power Density in W/cm3 compared to IQ 8™ 27 | © 2019 Enphase Energy, Inc.
Slide 28: Offgrid Solar and Storage: Enphase IQ 8 Box
Offgrid Solar and Storage *SXJRGQJ.S&'T]Ӵ AC Power Communication Battery Sockets Module Microinverter 2 Battery Smart Phone Solar Panel Connectivity Inputs 1.2P<M &(5T\JW LFP1 8THPJYX Battery Solar Microinverters 8ZUUTWYX2ZQYNUQJ&UUQNHFYNTSXKTWYMJ.SINFS2FWPJY 1 Lithium Iron Phosphate 28 |
Slide 29: Solar Water Pump
Solar Water Pump 5WTGQJR Farmers in India have unreliable and intermittent grid power Current solutions with Variable Frequency Drive (VFD) and Inverters are inefficient Current Solutions 1 3 Utility Solar Controller Solar Grid Water Pump (VFD) Water Pump 2 Solar Panels 8\NYHM String Utility Grid In
Slide 30: Air Cooler
Air Cooler 5WTGQJR No viable solution for extreme heat in certain regions of India Both grid and diesel generators are unreliable Current Solutions 1 2 Utility Grid Air Cooler Diesel Generator Air Cooler Enphase Solution *SXJRGQJ-JQUX5WT[NIJF 7JQNFGQJ8TZWHJTK*SJWL^ Rugged, Simple and Safe Sol
Slide 31: Standalone System
Standalone System 5WTGQJR 1 Over 300 million people in Asia, mainly in India, are living in energy poverty Current solutions with DC systems are inefficient Current Solutions Solar Panels )(8^XYJR\NYM DC Appliances Lead Acid Battery Enphase Solution *SXJRGQJ-JQUX5WT[NIJF ;NFGQJ8TZWHJTK*SJW
Slide 32: Recap: Increasing SAM from $3.3B to $12.5B
Recap Increasing SAM from $3.3B in 2019 to $12.5B in 2022 Residential Residential Small Commercial Offgrid Solar Storage Solar Solar & Storage ™ ™ ™ *SXJRGQJ IQ 8 Encharge IQ 8D .S&'T]™ $4B1 $3B 1 $1.5B 1 $4B1 1All the numbers refer to 2022 SAM 32 | © 2019 Enphase Energy, Inc.
Slide 34: Conclusion
Conclusion SOLAR GRID GENERATOR AC STORAGE LOADS Semiconductors Software Defined Ensemble™ One-stop-shop Bring Greater Architecture Enables New for Home Efficiencies in Creates Flexible Categories of Energy Integration and Future Proof Products Management Designs 34 | © 2019 Enphase Energy, Inc.
Slide 35: Introducing Momentum Solar and Sunpro Solar
Introducing 9\TTK4ZW 9TU(ZXYTRJWX Arthur Souritzidis Marc Jones Founder and Chief Executive Officer Founder and Chief Executive Officer
Slide 36: Introducing Momentum Solar
Introducing Founded in 2009 Momentum Solar Enabling customers to take control over rising energy costs by generating cleaner, price-protected power Industry leading growth; recognized by Deloitte and Inc.500 as fastest growing residential solar company in the nation Over 2,000 employees with operati
Slide 37: Strategic Partnership
Strategic Partnership >JFW*SI*RUQT^JJ(TZSY Optimal Performance 2016 362 Durable Equipment NJ Long-term Warranties 2017 Simplified O&m 618 3/3>+1(& Best-in-class Monitoring 2018 Installation Efficiency 1,166 3/3>+1(&9=5&(9 Product Innovation Supply Chain Management 2019 (
Slide 38: Introducing Sunpro Solar
Introducing Founded in 2008 Sunpro Solar Sunpro Solar is one of the leading providers of rooftop solar for Gulf Coast and Southeast regions Ranked #8 for 2019 in Solar Power World’s Magazine - Top Solar Rooftop Contractors Worldwide Approximately 1100 employees with operations in Louisiana, Mississi
Slide 39: Sunpro Solar and Enphase in 2019
*SJWLN_JIG^ 50 MW 170,000 Installed Enphase in 2019 Inverters Revenue Current Territories 39 | © 2019 Enphase Energy, Inc.
Slide 40: Eric Branderiz, Chief Financial Officer
Eric Branderiz Chief Financial Officer
Slide 41: New Baseline Financial Model
3J\'FXJQNSJ+NSFSHNFQ2TIJQ 35% 15% 20% Gross Operating Operating Margin Expenses1 Income1 Pricing Management Executive Leadership in the U.S. Sustainable Profitability New Products Core teams in India & New Zealand Strong Cash Generating Model Cost Reductions No Compromise on Innovation 1 All numb
Slide 42: Revenue Growth Framework
7J[JSZJ,WT\YM+WFRJ\TWP Residential Residential Small Commercial Offgrid Solar Storage Solar Solar & Storage $2K1 revenue Adds Over $8K $1.5B SAM in 2022 Blue Ocean per home now revenue2 per home Opportunity 2020 17% SAM CAGR ~5% ENPH attach3 Product launch 2020 to 2022 on new homes in Product laun
Slide 43: Strong Balance Sheet
Strong Balance Sheet Adjusted FCF $80M 1 2019 $22M 2018 ($33M) $250M Ending Cash1 2017 $106M Ending Cash $29M Ending Cash 12019 assumes midpoint of Q4’19 guidance. Refer to Appendix for adjusted FCF reconciliation to the most comparable GAAP measure 2019 ending cash is subject to prepayments receive
Slide 44: Conclusion
Conclusion 35-15-20 Revenue Growth Strong Balance Laying The Our New Baseline Framework Sheet and Healthy Financial Financial Model Built on Ensemble™ Free Cash Foundation Flow Generation For The Next Decade 44 | © 2019 Enphase Energy, Inc.
Slide 45: Q & A
Q & A
Slide 46: Appendix
Appendix
Slide 47: GAAP to Non-GAAP Reconciliation
,&&5YT3TS,&&57JHTSHNQNFYNTS 1 1 $ in Millions Q1’19 Q2’19 Q3’19 Q4’19 FY19 Income (loss) from operations (GAAP) $7.1 $17.4 $33.7 $40.3 $98.5 Stock-based compensation expenses, restructuring and acquisition $4.2 $5.8 $6.5 $7.0 $23.5 realted amortization .SHTRJ QTXXKWTRTUJWFYNTSX 3TS,&&5 $1
Slide 48: Thank You
Thank You © 2019 Enphase Energy, Inc. All rights reserved. Enphase Energy®, the Enphase logo, Encharge, Encharge 3, Encharge 10, Always-On, Ensemble-In-A-Box, Enlighten, Enlighten Manager, Empower, Ensemble, Envoy, MyEnlighten, IQ, IQ 6, IQ 7, IQ 7+, IQ 7A, IQ 7X, IQ 8, IQ 8D and other trademarks or

Enphase Energy — Investor Day (December 2019) on 6ix

Enphase Energy — Investor Day (December 2019)

Slide 1: Analyst Day: Profitable Growth

Slide 2: Safe Harbor: Use of Forward-Looking Statements

Slide 3: Agenda

Slide 4: Badri Kothandaraman, Chief Executive Officer

Slide 5: 2019 Financial Performance

Slide 6: 2019 achievements and progress

Slide 7: Our Core Differentiation

Slide 8: Operational Excellence: Customer Experience

Slide 9: Operational Excellence: Gross Margin Management

Slide 10: Scalable Business Model

Slide 11: Ensemble: laying the foundation for the next decade

Slide 12: Residential Solar

Slide 13: Europe Growth Plan

Slide 14: New Vectors of Profitable Growth

Slide 15: Residential Storage

Slide 16: Small Commercial Solar

Slide 17: Offgrid Solar and Storage

Slide 18: Recap: Increasing SAM from $3.3B to $12.5B

Slide 19: Conclusion

Slide 20: Raghu Belur, Chief Product Officer

Slide 21: The Power of Semiconductors and Software

Slide 22: Ensemble Energy Management Technology

Slide 23: In the Customer's Home: Ensemble 1.0

Slide 24: IQ 8 Residential Microinverter

Slide 25: Encharge Storage System

Slide 26: Ensemble 2.0 Grid-Agnostic System

Slide 27: IQ 8D Commercial Microinverter

Slide 28: Offgrid Solar and Storage: Enphase IQ 8 Box

Slide 29: Solar Water Pump

Slide 30: Air Cooler

Slide 31: Standalone System

Slide 32: Recap: Increasing SAM from $3.3B to $12.5B

Slide 33: Enphase product demos: It's a game changer

Slide 34: Conclusion

Slide 35: Introducing Momentum Solar and Sunpro Solar

Slide 36: Introducing Momentum Solar

Slide 37: Strategic Partnership

Slide 38: Introducing Sunpro Solar

Slide 39: Sunpro Solar and Enphase in 2019

Slide 40: Eric Branderiz, Chief Financial Officer

Slide 41: New Baseline Financial Model

Slide 42: Revenue Growth Framework

Slide 43: Strong Balance Sheet

Slide 44: Conclusion

Slide 45: Q & A

Slide 46: Appendix

Slide 47: GAAP to Non-GAAP Reconciliation

Slide 48: Thank You