Enphase Energy Stock Sinks on Weaker-Than-Expected Results, Expected Tariffs Hit By Aaron Rennie Full Bio A former Senior Publishing Editor on the Dow Jones Newswires team at The Wall Street Journal, Aaron earned a Bachelor's degree in Economics from the University of Michigan and a Master's in Journalism from Columbia University. Learn about our editorial policies Published April 23, 2025 08:23 AM EDT Cheng Xin / Getty Images Close Shares of Enphase Energy (ENPH) fell sharply in premarket trading Wednesday, a day after the solar and battery systems provider's first-quarter results fell short of analysts' estimates and it warned of an expected hit to gross margins because of tariffs on China. The Fremont, Calif.-based energy technology firm reported adjusted earnings per share (EPS) of $0.68 on revenue of $356.1 million. Analysts polled by Visible Alpha were looking for $0.73 and $362 million, respectively. On the earnings call, CEO Badri Kothandaraman said the firm anticipates a hit to its future results because of tariffs, according to a transcript provided by AlphaSense. "We currently source battery cell packs from China," Kothandaraman said. "These tariffs are expected to reduce our gross margin by approximately 2% in Q2 of 2025. The effect of the tariffs is limited in Q2 due to us having pre-tariff inventory." "Starting in Q3, we anticipate a 6% to 8% total gross margin impact after accounting for pricing adjustments," Kothandaraman added. "We expect the gross margin impact to gradually lessen over the subsequent quarters as our mitigation efforts take effect." Shares dropped over 11% in premarket trading. They entered the day down more than 20% in 2025. Do you have a news tip for Investopedia reporters? Please email us at [email protected] Article Sources Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy. Enphase Energy. "Enphase Energy Reports Financial Results for the First Quarter of 2025." Take the Next Step to Invest Advertiser Disclosure × The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace. Read more News Markets News Stocks & Bond News Partner Links Take the Next Step to Invest Advertiser Disclosure × The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.