Enphase Energy, Inc. · NASDAQ:ENPH
Enphase Energy — Investor Day (November 2021)
68 slides from Enphase Energy's investor day presentation, Nov 16, 2021
Slide 1: Investor Day November 16, 2021: Transformation Solar to Energy
INVESTOR DAY NOVEMBER 16, 2021 Transformation Solar to Energy
Slide 2: Safe Harbor
Safe Harbor 2© 2021 Enphase Energy, Inc. 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 our anticipated fin
Slide 3: Badri Kothandaraman, Chief Executive Officer
Badri Kothandaraman Chief Executive Officer 3© 2021 Enphase Energy, Inc.
Slide 4: Agenda
Strategy Badri Kothandaraman Chief Executive Officer Installer Perspective Raul Vergara Cutler Bay, Chief Executive Officer Product Innovation Raghu Belur Chief Product Officer Installer Perspective Suleman Khan Swell, Chief Executive Officer ESG Lisan Hung General Counsel Financial Update Eric Bran
Slide 5: Great Technology, Innovative Products, Massive Market
Great Technology Products Market Innovative Massive 5© 2021 Enphase Energy, Inc. Transformation Solar to Energy
Slide 6: 2021 So Far
2021 So Far 1 As of Sept. 30, 2021 2 Total for the year assumes Q1'21 to Q3’21 actual and mid-point of Q4'21 guidance 3 Non–GAAP gross margin assumes Q1'21 to Q3'21 actual and mid-point of Q4'21 guidance. Refer to Appendix for reconciliation to the most comparable GAAP measure. 4 Includes Enphase sy
Slide 7: Our Core Competencies
Our Core Competencies Semiconductors Software Ensemble™ Solar Grid Generator EV Fuel cell Load control Storage AC 7© 2021 Enphase Energy, Inc.
Slide 8: Core Competencies: Semiconductors
8 55nm digital ASIC enabling microgrids Blazing fast response times Software-defined power Analog ASICs for more integration OUR CORE COMPETENCIES Semiconductors © 2021 Enphase Energy, Inc. The Swift ASIC in IQ8™ can respond quickly to changing grid conditions, 1000x faster than IQ7™
Slide 9: Core Competencies: Software
Software 9 Autonomous decision making of DERs IQ System Controller for on-site control Seamlessly transfers control between grid forming and grid following resources Enphase Cloud control for user settings Full-fledged IoT system © 2021 Enphase Energy, Inc. 1 Includes the IQ Gateway 2 Enphase intern
Slide 10: Ensemble
10 Distributed architecture Hierarchical control A virtual area is a cluster of home(s) AC marketplace DER selection based on marginal cost Ensemble TM © 2021 Enphase Energy, Inc. OUR CORE COMPETENCIES
Slide 11: Customer Experience and Quality
Customer Experience Quality Microinverter failure rate of 0.05% is a reality Added focus on battery quality Head start with LFP and 15-year limited warranty Network Operations Centre 11 Target NPS > 70; 1 minute wait times 24x7 operations worldwide Outage response teams Fleet analytics Service © 202
Slide 12: Global Supply Chain
Global Supply Chain 12 Manufacturing sites Distribution centers Sydney, Australia Fuyong, Shenzhen, China Futian, Shenzhen, China Chennai, India Venlo, Netherlands Guadalajara, Mexico Long Beach, CA, USA Cell pack suppliers Xiaoshan, Hangzhou, China Dongguan, Guangdong, China © 2021 Enphase Energy,
Slide 13: Gross Margin: Pricing and Cost
Gross Margin 13 Value-based pricing discipline Microinverters: grid-forming, quality, service, power Storage: all-in-one, LFP, modular, genset integration Load control and up to 15-year limited warranty Modest price increases to counter increase in CPI Pricing Cost Alive and well on purchasing and n
Slide 14: Business Principles
14 Executive team and core architects in Fremont Product teams in Bangalore, Christchurch, Austin, Montreal Service and Sales teams globally New product, software and marketing investments in 2022 OPEX Spending CAPEX Technology-focused spending No deviation from CM model Continue globalization of su
Slide 15: Our Strategy
Our Strategy Build best-in-class home energy systems and deliver them to homeowners through our installer and distribution partners, enabled by a comprehensive digital platform 15© 2021 Enphase Energy, Inc.
Slide 16: Quarterly Revenue, 48% CAGR
$55 $75 $77 $79 $70 $76 $78 $92 $100 $134 $180 $210 $206 $125 $178 $265 $301 $316 $352 $400 $- $50.0 $100.0 $150.0 $200.0 $250.0 $300.0 $350.0 $400.0 Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21 Q2 '21 Q3 '21 Q4 '21* Revenue C
Slide 17: The Enphase Energy System
The Enphase Energy System 17© 2021 Enphase Energy, Inc. I Q B A T T E R Y I Q M I C R O I N V E R T E R M A I N L O A D C E N T E R E V C H A R G E R E N P H A S E C L O U D I Q L O A D C O N T R O L L E R I Q S Y S T E M C O N T R O L L E R U T I L I T Y M E T E R G E N E R A T O R O R F U E L C E
Slide 18: Solar Microinverters: Residential and Commercial SAM
2022 SAM $4.8B 2025 SAM $6.2B Leverage increasing global TAM Strong performance in US; Europe 2X from 2020 to 2021 Added Italy, Brazil in 2021; Japan 2023 Ship IQ8™ Dec'21 and IQ8D™ Mar’22 Innovate further with IQ9™ and IQ9D™ 18 2022 SAM $0.2B 2025 SAM $2.0B Solar IQ8H™ which caters to 1 panel produ
Slide 19: IQ Battery
19 IQ Battery™ 3/10 (T) shipping now US, Germany, Belgium; 1,000+ certified US installers IQ Battery 5P in 2022 worldwide 2X power and lower cost (7.68 kW peak power for 5 kWh) Next generation IQ Battery in 2023 Focus on energy density: big step down in cost Storage 2022 SAM $2.3B 2025 SAM $4.5B © 2
Slide 20: Portable Energy System
Launching in US and India 1H’22 Energy security plus Energy-On-The-Go High quality cloud-connected device Roadmap: Integrate into Ensemble™ platform Portable Energy System 2022 SAM $0.5B 2025 SAM $2.5B 20© 2021 Enphase Energy, Inc. 11 1 Enphase internal data THE ENPHASE ENERGY SYSTEM RESIDENTIAL The
Slide 21: IQ Load Controller
Strategic—makes every install a "whole home backup" Today: 4—circuit load control Basic and smart control options through Enphase App 2022: Target 12-circuit control and 24-circuit monitoring IQ Load Controller™ 21© 2021 Enphase Energy, Inc. THE ENPHASE ENERGY SYSTEM The IQ Load Controller™ availabl
Slide 22: EV Charger
EVs in US growing at CAGR of 40% Acquiring ClipperCreek: High-quality, Versatile support 1 in 7.5 non-Tesla vehicles is a ClipperCreek charger Accretive to our installers plus DTC Roadmap: Reduce costs; add smarts, V2X EV Charger 2022 SAM $0.2B 2025 SAM $6B 22© 2021 Enphase Energy, Inc. 44 1 US data
Slide 23: AC Fuel Cell
Target specifications include 1.25kW AC power, 10-year limited warranty | 67% reduction in CO2 emissions | 99.9% reduction in CO emissions1 Made by Upstart Power and powered by IQ8™ Resilience Adder: Turns on, tops up battery and turns off Reliable, low maintenance and low emissions Grid-tied capabi
Slide 24: Generator Integration
Enables glitch-free transition for homeowners User-configurable options through the app AC-coupled architecture doesn't limit output power Compatible with the installed base of HSB generators Generator Integration 24© 2021 Enphase Energy, Inc. Usable Power Gen. Type Start type 2-wire, Utility Sense
Slide 25: Grid Services
A homeowner in Rhode Island can make as much as $1,536/year for each 10 kWh Battery from the ConnectedSolutions program Getting started: 8+ programs in pipeline Business models: Aggregators and utilities Mainly on batteries today, other DERs to follow Enrollment, opt in/out and tracking for homeowne
Slide 26: Our Data
Our Data 26© 2021 Enphase Energy, Inc. 1 Enphase internal data as of Sept. 30, 2021 2 Extrapolations till 2025 assuming 15% market growth per year, not Enphase specific 2021 5-min reporting 2025 1-min reporting 1.7 M+ sites 39 M+ devices 62 B+ data points per day 97 TB+ data per year 4.8 M+ sites 10
Slide 27: Opportunities from Data and AI
Opportunities 27© 2021 Enphase Energy, Inc. Internal OperationsGrid OperatorsInstallersHomeowners New Services Accurate models for prediction of failures Automation of the returns business process Preventive maintenance alerts Learning AHJ Database for high-quality permits Efficient and controlled r
Slide 28: The Enphase Installer Platform Vision
The Enphase Installer Platform Vision 28 Lead Management Design and Proposal Operations and Maintenance Installation and Commissioning Financing and Contract Permit Plan Sets 1 2 3 4 5 6 Provide leads directly into the Installer CRM platform Solargraf Pro™makes state-of-the-art design and proposal s
Slide 29: Design and Proposal
Design and Proposal 900+ installers today Launching Q1’22: Shading, 3D, Storage Battery sizing: modes and appliances Comprehensive tariffs and incentives Roadmap: SLDs, AHJ design rule checks 29© 2021 Enphase Energy, Inc.1 Enphase internal data Financing and Contract Permit Plan Sets Brings Fintech
Slide 30: Just the Beginning: $23 Billion SAM by 2025
Just The Beginning Over 300 patents Home Energy systems and digital platform $23 Billion SAM by 2025 Great Technology Products Market Innovative Massive 1 Wood Mackenzie and Enphase internal data 1 30© 2021 Enphase Energy, Inc.
Slide 31: Raul Vergara, Cutler Bay Solar Solutions
Raul Vergara Chief Executive Officer Cutler Bay Solar Solutions 31© 2021 Enphase Energy, Inc.
Slide 32: About Us: Cutler Bay Solar Solutions
Founded in 2013 with 3 employees; 50 employees today South Florida HQ; family owned and operated Install locations in South Florida with expansion plans into Central Florida Dedication to fantastic customer experience Heavy involvement in rooftop solar activism and education in South Florida communi
Slide 33: Installations
33 Installations 978 Solar Systems 35,719 microinverters 972 IQ Batteries™ 3.3 MWh of storage 100% Energized By Enphase © 2021 Enphase Energy, Inc. CUTLER BAY SOLAR SOLUTIONS
Slide 34: Thank you!
34 Thank you! © 2021 Enphase Energy, Inc.
Slide 35: Raghu Belur, Chief Product Officer
Raghu Belur Chief Product Officer 35© 2021 Enphase Energy, Inc.
Slide 36: Ensemble
Ensemble Distributed architectures always win AC architecture is simple and universal IQ8™ is a foundational element Hierarchical control: Primary, Secondary and Tertiary control TM 36© 2021 Enphase Energy, Inc. THE ENPHASE ENERGY SYSTEM
Slide 37: Ensemble is a Generalized Solution
Ensemble is a generalized solution Architecture is extensible beyond a single home Enables coordination of nested areas Transactive energy 37© 2021 Enphase Energy, Inc. Ensemble TM THE ENPHASE ENERGY SYSTEM
Slide 38: The IQ9 Family: Best-in-Class Power Density
High power microinverters for 600 W single and dual modules 50% more power density compared to IQ8TM GaN allows for high power and fast switching of AC FETs Has > 1000x less resistance than silicon for given voltage 2x switching frequency reduces transformer size by 30% New gate driver ASIC reduces
Slide 39: IQ9 Best-in-Class Power Density
Best-in-Class Power Density 39 IQ8™ Transformer ~30% smaller GaN Devices up to 200% faster New Gate Driver ASIC Reduces part count © 2021 Enphase Energy, Inc. IQ9™ Streamlined Chassis ~15% lower footprint 1 Compared to IQ8 1 1 1 1 THE IQ9TM FAMILY
Slide 40: IQ9 Best-in-Class Power Density
Best-in-Class Power Density 40© 2021 Enphase Energy, Inc. Transformer ~30% smaller GaN Devices up to 200% faster New Gate Driver ASICs Reduces part count Streamlined Chassis >15% lower footprint Two pieces 1 1 1 1 IQ9™ 1 Compared to IQ8 THE IQ9TM FAMILY
Slide 41: Next Generation IQ Battery: Minimizing Overhead
Minimizing Overhead From Cell Pack to Product 41© 2021 Enphase Energy, Inc. 1 1 Target specifications subject to change THE NEXT GENERATION IQ BATTERYTM ~50 Wh/L ~100 Wh/L IQ Battery 3T™ Next generation IQ Battery™
Slide 42: Next Generation IQ Battery: Minimizing Overhead
Minimizing Overhead From Cell Pack to Product 42© 2021 Enphase Energy, Inc. ~50 Wh/L ~100 Wh/L IQ Battery 3T™ Next generation IQ Battery™ IQ9D-BAT™ with Battery Mgmt. Battery Pack Battery Pack IQ8X-BAT™ Battery Mgmt. 1 1 Target specifications subject to change THE NEXT GENERATION IQ BATTERYTM
Slide 43: Integrating Power Conversion with Battery Management
Integrating Power Conversion with Battery Management 43 IQ9D-BAT Inverter™ Enabler for the next generation IQ Battery™ Combined battery and power management Single board replaces seven from before Single firmware image Max Power Peak Power 3000 W1500 W © 2021 Enphase Energy, Inc. 343 mm154 mm 61 mm
Slide 44: Microgrid Interconnect Device in the Collar
Microgrid Interconnect Device (MID) in the Collar Simplifies and speeds up installs, while improving quality Enables storage for meter-main-combo homes without rewiring Pre-installed CTs reduces installation errors Requires utility approval Meter Collar 44 Rating Compliance Communication CANUL414200
Slide 45: EV Charger Key Specifications
EVs globally growing nearly 30% per year till 2025 Smart charging will be a requirement (source, rate, duration) Bi-directional V2H and V2G adds resiliency to home and grid Ongoing debate on charging via the EV's AC or DC port Integration into Ensemble™ will enhance customer experience Power Grid Co
Slide 46: Solid Oxide Fuel Cell
Solid Oxide Fuel Cell with IQ8™ power management Resiliency Adder: Energy device tops up IQ™ batteries Easy install, modular, and scalable Ongoing focus to optimize cost and power Power Cycles Fuel efficiency 2–3x2501.25KW AC Fuel Cell 46© 2021 Enphase Energy, Inc. Cold Zone Air Exhaust Power output
Slide 47: Grid Services
60% increased demand due to EV and electrification Intelligent and connected DERs Distributed cloud architecture more scalable, safer, and less expensive Grid Services 47© 2021 Enphase Energy, Inc. 1 1 Enphase internal assumptions THE ENPHASE ENERGY SYSTEM
Slide 48: We Have It All
We Have It All Over 300 patents Home energy systems and digital platform Simple and Universal Great Technology ProductsArchitecture InnovativeAC 48© 2021 Enphase Energy, Inc.
Slide 49: Suleman Khan, Swell
49© 2021 Enphase Energy, Inc. Suleman Khan Chief Executive Officer Swell
Slide 50: About Us: Swell
About Us Launched in 2015 as a Residential Energy Storage Platform • Sales, installation & financing of ES / PV+ES systems (via DTC & Channel) • VPP Aggregator-Operator interfacing between homeowners and utilities 100+ employees across four business units • Customer Acquisition • Project Fulfillment
Slide 51: Swell VPP Technology Platform
51 A platform for the mass deployment and management of DERs providing VPP enablement services to utilities and partners powered by an end-to-end technology platform. Enhanced retail consumer experience Energy procurement cost management Grid/network cost management+ + Swell VPP technology platform
Slide 52: Swell Virtual Power Plants
52 Swell OC VPP | VPP Homes: 2,000 The Need The decommissioning of the San Onofre nuclear plant led to diminished capacity for SCE in the Irvine, CA area. The Solution SCE has commissioned Swell to establish a 20 MWh Virtual Power Plant to restore a portion of this lost capacity. Swell 805 VPP | VPP
Slide 53: Lisan Hung, General Counsel
53© 2021 Enphase Energy, Inc. Lisan Hung General Counsel
Slide 54: Advancing a Sustainable Future for All
54© 2021 Enphase Energy, Inc. Advancing a sustainable future for all Committing to a robust approach Aligning with our Investment Community Developing technology and products to make energy accessible and reliable Reducing environmental impact in our operations and designing products with smaller fo
Slide 55: Eric Branderiz, Chief Financial Officer
55© 2021 Enphase Energy, Inc. Eric Branderiz Chief Financial Officer
Slide 56: Revenue and Gross Margin
56© 2021 Enphase Energy, Inc. 1 Non–GAAP measures. Refer to Appendix for reconciliation to the most comparable GAAP measure 2 2021 assumes Q1'21 to Q3'21 actual and mid-point of Q4'21 guidance 48% Revenue CAGR Consistently profitable Retaining our baseline financial model based on current macro Reve
Slide 57: EBITDA, Free Cash Flow, Cash and Debt
57© 2021 Enphase Energy, Inc. Strong cash position Access to capital markets when needed • Best terms in history for green convertible notes issued in March 2021 • 5-year term at zero coupon and 70% conversion premium Sustainable cash generation model Quick cash conversion cycle 1 Non–GAAP measures.
Slide 58: Simple Capital Allocation
58© 2021 Enphase Energy, Inc. Simple Capital Allocation Due To Scalable Business Model Value Distributing Stable and Mature Business Value Creating High Growth Stage Invest in Organic Growth Sustain growth and retain competitiveness CapEx Lite: Invest in capacity, global supply chain diversification
Slide 59: Increasing Our Share of Wallet Per Home
59© 2021 Enphase Energy, Inc. Increasing Our ‘Share Of Wallet’ Per Home 1 Enphase internal data and approximate estimates 2 Exiting 2021 based on mid-point of Q4’ 21 guidance 3 Refers to IQ7, IQ7+, IQ7X, IQ7A and IQ8, IQ8+, IQ8M, IQ8A, IQ8H with 20 micros per home 4 Assumes 10 kWh battery 2019 2021
Slide 60: Residential Solar and Storage Outlook
60© 2021 Enphase Energy, Inc. Residential Solar Projecting to ship ~10.2Mu microinverters, ~3.5GWdc in 20211 SAM assumed to grow at a baseline of 15% CAGR from 2021 through 20252 Expect to grow faster than market based on product differentiation Microinverter capacity available at > 5Mu/Q exiting 20
Slide 61: Full Home Electrification Is Inevitable
Great 61 Technology Products Market Innovative Massive Transformation Full home electrification is inevitable © 2021 Enphase Energy, Inc.
Slide 62: Q&A
Q&A 62© 2021 Enphase Energy, Inc.
Slide 63: 63©
63© 2021 Enphase Energy, Inc.
Slide 64: Appendix
Appendix 64© 2021 Enphase Energy, Inc.
Slide 65: GAAP to Non-GAAP Reconciliation
65© 2021 Enphase Energy, Inc. GAAP To Non-GAAP Reconciliation 1 2021 assumes Q1'21 to Q3'21 actual and mid-point of Q4’21 guidance $ in millions 2017 2018 2019 2020 2021 1 GAAP gross profit 56.0$ 94.4$ 221.2$ 346.0$ 545.1$ Stock-based compensation 1.1 1.1 1.7 3.7 9.0 Tariff refunds - - - (38.9) - No
Slide 66: GAAP to Non-GAAP Reconciliation
66© 2021 Enphase Energy, Inc. GAAP To Non-GAAP Reconciliation 1 2021 assumes Q1'21 to Q3'21 actual and mid-point of Q4’21 guidance $ in millions 2017 2018 2019 2020 2021 1 GAAP net income (loss) (45.2)$ (11.6)$ 161.1$ 134.0$ 119.2$ Interest expense, net 7.9 9.6 7.2 18.8 45.5 Depreciation and amortiz
Slide 67: SAM Market Data
67© 2021 Enphase Energy, Inc. SAM Market Data 1 Wood Mackenzie and Enphase internal estimates and pricing assumptions 2 Excludes retrofit opportunities 3 Enphase internal estimates 4 S&P Platts, Harrison Research and ENPH/ClipperCreek internal estimates 5 Excludes estimated TLSA vehicles from Harris
Slide 68: Trademarks and Copyright Notice
© 2021 Enphase Energy. All rights reserved. Enphase, the "e" logo, IQ, IQ7, IQ7+, IQ7X, IQ7A, IQ8, IQ8+, IQ8M, IQ8A, IQ8D, IQ8H,IQ9, IQ9D, IQ9D-BAT Inverter, IQ Battery, IQ Battery 3T, IQ Gateway, Ensemble, Solargraf Pro, and certain other names and marks are registered trademarks of Enphase Energy,