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
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: A Look Back At 2019
A Look Back At 2019 We did a few things well and need to make other things better Exceeded Introduced Further financial target new generation improved quality of 30-20-10 IQTM products and customer service Forecasting 500Ku Fixed Strong Growth in Microinverters from supply chain growth in Internatio
Slide 7: Our Core Differentiation
Our Core Differentiation Semiconductor Software Ensemble TM Energy Management Technology SOLAR GRID GENERATOR AC STORAGE LOADS Predictive Software-Defined Home Energy Control Architecture Management 7 | © 2019 Enphase Energy, Inc.
Slide 8: Operational Excellence: Customer Experience
Operational Excellence Customer Experience Quality Customer Service 5X 54% 1 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 Promo
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 Product Innovation, Maximizing Value, M
Slide 10: Scalable Business Model
Scalable Business Model CAPEX Lite OPEX Efficient No Big Headcount 1 Factories 35% 47% 4% INDIA/CHINA NA EMEA 14% ANZ Capacity of 3.5M Microinverters and 120MWh Storage Per Quarter in Q4’20 2 3 1 Percentage of worldwide headcount as of Q3’19 2 Estimated CAPEX spending $25M for 2020 doubles capacity
Slide 11: Ensemble
Ensemble TM Great technology Great products Laying the and intellectual enabling new vectors financial foundation property of profitable growth for the next decade 11 | © 2019 Enphase Energy, Inc.
Slide 12: Residential Solar
Residential Solar $4B 2022 SAM 1 $2.5B 2019 SAM 1 Introduce Ensemble™, Enter New Regions, Focus on Tier 3/4 Intallers 1 Source: 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 SA
Slide 13: Europe Growth Plan
Europe Growth Plan Target To Grow Revenue 2X By 2020 Double Transfer Sales Headcount Top Talent to in 6 Months Europe ICELAND FINLAND NORWAY SWEDEN NORTH SEA ESTONIA BALTIC SEA DENMARK LATVIA LITHUANIA Enter Focus LUXEMBURG 8 Countries Small Systems IRELAND BELARUS in 2020 Social Housing Roofing UNI
Slide 14: New Vectors of Profitable Growth
New Vectors of Profitable Growth 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 $500M 2022 SAM 2 2019 SAM 1 One-stop-shop, Reliable, Scalable, Simple, Safe 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 SAM1 Reliable, Rapid Shutdown Compliant, World Class Cost Source:1GTM/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 | © 201
Slide 17: Offgrid Solar and Storage
Offgrid Solar and Storage Focus on Indian Market Providing Farmers Solar Water Pump Reliable Source of Energy $2B 2022 SAM1 Standalone System Reducing Energy Poverty $1.5B 2022 SAM 2 Air Cooler Mitigating Extreme Heat $0.5B 2022 SAM3 Source: MNRE, Govt. of India; CEEW India; India Census Data 2011;
Slide 18: Recap
Recap Increasing SAM from $3.3B in 2019 to $12.5B in 2022 Residential Residential Small Commercial Offgrid Solar Storage Solar Solar & Storage 1 1 1 1 $4B $3B $1.5B $4B 1 All the numbers refer to 2022 SAM 18 | © 2019 Enphase Energy, Inc.
Slide 19: Conclusion
Conclusion $180 $160 Revenue $140 $120 $100 $77.0 $79.7 $75.9 $80 $74.7 $70.0 $60 $40 $20 $0 Q2’17 Q3’17 Q4’17 Q1’18 Q2’18 Q3’18 Q4’18 Q1’19 Q2’19 Q3’19 ACT ACT ACT ACT ACT Three Pillars of Relentless Focus Ensemble™ SAM Expanding Differentiation: on Customer Enables from $3.3B in 2019 Semiconductor
Slide 20: Raghu Belur, Chief Product Officer
Raghu Belur Chief Product Officer
Slide 21: The Power of Semiconductors, Software and Ensemble
The Power of Semiconductors, Software and Ensemble™ 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 Effi
Slide 22: Ensemble Energy Management Technology
Ensemble Energy Management Technology TM 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: On the Cusp of Ensemble 1.0
On the Cusp of Ensemble™ 1.0 EnlightenTM Cloud WiFi/Cellular Wireless 3 2 1 IQ 6™/IQ 7™ 1 IQ™ Enpower™ combiner 3 switch M 10.1kWh 3.4kWh Power Line Communication Main Load Panel Wireless Generator 2 Encharge™ storage system IQ 8™ Home Loads Encharge™ Storage System Makes The System Always-On™ 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
Encharge™ Storage System Available In Two Configurations 10.1kWh 3.4kWh One-stop-shop, Reliable, Scalable, Simple, Safe 25 | © 2019 Enphase Energy, Inc.
Slide 26: Gearing up for Ensemble 2.0
Gearing up for Ensemble 2.0 ™ EnlightenTM Cloud WiFi/Cellular Wireless + IQ™ Enpower™ IQ 8™ combiner switch M Power Line Communication Main Load Panel PCS Wireless Power Control System Generator Encharge™ storage system IQ 8™ Home Loads Addition of IQ 8™ Grid-Independent Solar Significantly Improves
Slide 27: IQ 8D Commercial Microinverter
IQ 8D™ Commercial Microinverter One 640WAC Microinverter Supports Two 400WDC Panels 50% Greater Power Density 1 500 dppm Reliability Target 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
Offgrid Solar and Storage Ensemble-In-A-Box™ AC Power Communication Battery Sockets Module Microinverter Battery 2 Smart Phone Solar Panel Connectivity Inputs 1.2 kWh 1 AC Power LFP Sockets Battery Solar Microinverters Supports Multiple Applications for the Indian Market 1 Lithium Iron Phosphate 28
Slide 29: Solar Water Pump
Solar Water Pump Problem 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 Switch String Utility Grid In
Slide 30: Air Cooler
Air Cooler Problem 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 Ensemble Helps Provide a Reliable Source of Energy Air Cooler Rugged, Simple an
Slide 31: Standalone System
Standalone System Problem 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 DC System with DC Appliances Lead Acid Battery Enphase Solution Ensemble Helps Provide a Viable Source of Energy
Slide 32: Recap
Recap Increasing SAM from $3.3B in 2019 to $12.5B in 2022 Residential Residential Small Commercial Offgrid Solar Storage Solar Solar & Storage Ensemble IQ 8™ Encharge™ IQ 8D™ In-A-Box™ 1 1 1 1 $4B $3B $1.5B $4B 1 All the numbers refer to 2022 SAM 32 | © 2019 Enphase Energy, Inc.
Slide 33: Ensemble: It's a game changer...
Ensemble TM It’s a game changer... 33 | © 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 Two of Our Top Customers
Introducing Two of Our Top Customers 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: Momentum Solar
Strategic Partnership Year-End Employee Count Optimal Performance 2016 362 Durable Equipment NJ Long-term Warranties 2017 Simplified O&m 618 NJ - NY - FL - CA Best-in-class Monitoring Installation Efficiency 1,166 2018 NJ - NY - FL - CA - TX -PA - CT 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: 100% Energized by Enphase
100% Energized by 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
New Baseline Financial Model 35% Gross 15% Operating 20% Operating Margin Expenses 1 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 num
Slide 42: Revenue Growth Framework
Revenue Growth Framework Residential Residential Small Commercial Offgrid Solar Storage Solar Solar & Storage 1 $2K revenue Adds Over $8K $1.5B SAM in 2022 Blue Ocean per home now revenue2per 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 2019 1 $22M 2018 ($33M) $250M Ending Cash 1 $106M 2017 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 receiv
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
GAAP to Non-GAAP Reconciliation 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 realted amortization $4.2 $5.8 $6.5 $7.0 $23.5 Income (loss) from operations (Non-GAAP) $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