Enphase Energy Inc. reported its first-quarter earnings, with adjusted earnings per share (EPS) of $0.68, missing the consensus estimate of $0.70. Revenue for the quarter came in at $356.1 million, below the expected $361.43 million. The company highlighted strong shipments of batteries and microinverters, but noted a softening in U.S. demand, offset by gains in Europe, particularly with the ramp-up of the IQ Battery 5P. Enphase is also shipping fewer megawatts than it did four years ago, with its stock closing at $46.34 after the earnings release. Following the earnings release, Enphase's stock experienced a significant decline, dropping 10% after hours and further decreasing to 84% from its all-time highs. The company also faces challenges from upcoming U.S. tariffs on battery imports from China, which CEO Badri Kothandaraman indicated would impact gross margins by 6% to 8% in the third quarter, with a smaller 200 basis points impact expected in the second quarter due to pre-tariff inventory. In response to the earnings miss and the anticipated tariff impact, Enphase Energy received two downgrades. Morgan Stanley downgraded the stock to Underweight from Equalweight, lowering the price target to $36 from $67, citing similar factors affecting their downgrade of SolarEdge Technologies. Barclays reiterated an Overweight rating but noted a potential 600 to 800 basis points hit to gross margins due to tariffs by the third quarter.