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There aren’t a lot of publicly traded solar companies out there - most of the companies in the solar sector are relatively small operations. However, two companies in the public sphere are subject to lots of buzz and the contrast between them is intriguing. We are talking about Enphase Energy (which went public at the end of March) and SolarCity (whose long anticipated IPO is scheduled for… sometime soon?).
Enphase had its IPO on March 30, with shares priced at $6.00, and the IPO raised total gross proceeds of $61.9 million. As of the market’s opening today, Enphase (ENPH) was trading at $8.33/share. On May 10 the newly public company published its first quarterly earnings report with some strong numbers. Total net revenues grew 136% from the first quarter of last year, going from $18.1 to $42.6 million. Units sold in the quarter more than doubled from 123,000 last year to 292,000 this year, and gross margin increased from 14.7% to 21.8%.
As impressive as those revenue and growth figures are, they have yet to translate into a profit for the company, with the quarterly loss increasing to $10.2 million, up from $9.3 million last year. That loss worked out to $-5.38/share. Nevertheless, that loss was significantly less than the consensus prediction of the four analysts covering the company (by $3/share), and the stock is presently rated as a “strong buy” by two and a “buy” by the other two.
The keys for Enphase will be to continue growing market share (even in the face of growing - if dubious - micro-inverter competition from string/central inverter players like SMA), continue to innovate and keep costs down. It will be intersting to see how they build on this strong start in the coming years. (Full disclosure - I do not own any Enphase stock.)
Which brings us to SolarCity which announced on April 30 that it had filed a “draft” registration statement with the SEC on April 26. While normally a filing with the SEC is a matter of public record, under recent changes in the law, companies with less than a billion dollars in annual revenue can file draft registration statements with the SEC, revise the document based on the agency’s feedback, and only make the filing public once it is actually approved by the SEC. This is particularly interesting given that it had been reported that SolarCity had delayed its filing while working out “accounting issues” related to its business model of leasing solar power systems. (As one pundit put it, “Apparently not all lease accounting is the same.") Also still outstanding, apparently, is the issue of Sunpower’s lawsuit for theft of trade secrets against SolarCity.
The purpose of the pre-IPO disclosures to the public is to allow potential investors to get a look at how the company is actually doing - revenues, profits (or losses), costs, salaries, etc. This is of particular interest in conjunction with SolarCity given its unusual business model that has lead to questions about its practices being raised from a number of quarters (including this blog). Unfortunately, SolarCity has opted - as is its right under the law - to keep that information secret, at least for now.
Assuming that at some point SolarCity actually has to put its cards on the table, we will follow-up on this story.