For eager technology investors who paid $6 a share for nearly 9 million shares of Enphase Energy stock when the company went public in March 2012 and held on, it has been a long, agonizing six years. Last week the company’s shares traded on NASDAQ for less than $4, down a third from the IPO price.
In the company’s recent fourth quarter, based on the earnings report filed Feb. 27, it squeaked by with a $2.1 million loss. The company had about $29 million of cash on hand to fund operations.
The share-price trajectory has been wincing for long-term investors, who saw prices climb to a rooftop peak of almost $17 in Sept. 2014 then tumble to less than 80 cents in summer 2017 before recovering to current levels.
Profitability has eluded the Petaluma-based energy company that makes micro-inverters which attach to the back of individual solar panels to turn their direct current into alternating current — the kind used by most households and businesses. Enphase had full-year 2017 revenue of $286 million, down some 11 percent from 2016 revenue of $323 million.
Enphase endured two major rounds of sharp layoffs from nearly 500 positions to current staffing at 350.
Last year, Enphase Energy’s longtime CEO Paul Nahi resigned. Nahi took Enphase from its early days to revenue of nearly $300 million a year.
Nahi was replaced in September by Badri Kothandaraman. North Bay Business Journal interviewed Kothandaraman six months after he took the reins. Kathandaraman came to Enphase after Thurman John Rodgers plunked $5 million into Enphase stock in January 2017.
Rodgers, who earned a Ph.D. in electrical engineering at Stanford University, innovated with silicon chips, founded Cypress Semiconductor in San Jose in 1982 and ran it until he was ousted by its board in 2016. Cypress had 2017 revenue of about $2.3 billion. Since 2016 Rodgers has battled as a shareholder to resist Chinese equity control of the company he launched. Kothandaraman worked at Cypress Semiconductor from 1995 to 2016.
“I worked with him for a long time,” Kothandaraman said of Rodgers. “He doesn’t make emotional decisions. He gives people a long runway.” Even if company leaders falter, “as long as there’s understanding why the results are bad and a clear path to fix them going forward, that’s what he wants,” Kothandaraman said.
“The business is becoming a lot more global than local,” Kothandaraman said. Enphase sales went from 90 percent in North America to 70 percent. Most international growth for Enphase is in Europe and India, where Kothandaraman placed a research facility in 2017. Germany and Austria present growth opportunities for Enphase in Europe.
“India solar is growing very fast,” he said. “They want to be 40 gigawatts in the commercial and industrial market by 2022. That’s huge.” Now India’s installed solar capacity is below 10 gigawatts, Kothandaraman said. Most Enphase revenue from India so far has come from commercial and industrial rooftop installations.
“We expect to start seeing residential,” he said. “Where Enphases can win is in making high-performance micro-inverters that are suited for India’s harsh and dusty conditions,” and to withstand the country’s five-month monsoon season.
Germany has about 40 gigawatts of installed solar capacity, but the country sees little sunlight during winter. India is “the right place for us to set up an office,” he said, where about 50 Enphase employees work.