Enphase Energy, Inc. (NASDAQ: ENPH), a global energy management
technology company and the world’s leading supplier of
microinverter-based solar-plus-storage systems, announced today
financial results for the third quarter of 2020, which
included the summary below from its President and CEO, Badri
Kothandaraman.
We reported revenue of $178.5 million in
the third quarter of 2020, along with a record 41.0% for non-GAAP
gross margin. We shipped approximately 478 megawatts DC, or
1,442,743 microinverters.
The financial highlights for the third quarter
of 2020 are listed below. The GAAP numbers include an approximate
$23 million refund on tariffs which were previously paid on
microinverters imported to the U.S. from China. The non-GAAP
numbers do not include the tariff refund:
- Revenue of $178.5 million
- Cash flow from operations of $67.5 million; ending cash
balance of $661.8 million
- GAAP gross margin of 53.2%; record non-GAAP gross margin of
41.0%
- GAAP operating income of $51.8 million; non-GAAP operating
income of $43.7 million
- GAAP net income of $39.4 million; non-GAAP net income of
$41.8 million
- GAAP diluted earnings per share of $0.28; non-GAAP diluted
earnings per share of $0.30
Our revenue and earnings for the third quarter
of 2020 are provided below, compared with those of the prior
quarter and the year ago quarter:
(In thousands, except per share data and
percentages)
|
GAAP |
|
Non-GAAP |
|
Q3 2020 |
|
Q2 2020 |
|
Q3 2019* |
|
Q3 2020 |
|
Q2 2020 |
|
Q3 2019* |
Revenue |
$ |
178,503 |
|
|
$ |
125,538 |
|
|
$ |
180,057 |
|
|
$ |
178,503 |
|
|
$ |
125,538 |
|
|
$ |
180,057 |
|
Gross margin |
53.2 |
% |
|
38.5 |
% |
|
35.9 |
% |
|
41.0 |
% |
|
39.6 |
% |
|
36.2 |
% |
Operating expenses |
$ |
43,222 |
|
|
$ |
37,533 |
|
|
$ |
31,000 |
|
|
$ |
29,571 |
|
|
$ |
26,024 |
|
|
$ |
25,037 |
|
Operating income |
$ |
51,759 |
|
|
$ |
10,854 |
|
|
$ |
33,706 |
|
|
$ |
43,675 |
|
|
$ |
23,700 |
|
|
$ |
40,166 |
|
Net income (loss) |
$ |
39,362 |
|
|
$ |
(47,294 |
) |
|
$ |
31,099 |
|
|
$ |
41,760 |
|
|
$ |
23,549 |
|
|
$ |
39,466 |
|
Basic EPS |
$ |
0.31 |
|
|
$ |
(0.38 |
) |
|
$ |
0.25 |
|
|
$ |
0.33 |
|
|
$ |
0.19 |
|
|
$ |
0.32 |
|
Diluted EPS |
$ |
0.28 |
|
|
$ |
(0.38 |
) |
|
$ |
0.23 |
|
|
$ |
0.30 |
|
|
$ |
0.17 |
|
|
$ |
0.30 |
|
* Revenue for the third quarter
of 2019 of $180.1 million included approximately $8.0 million of
safe harbor revenue.
Our non-GAAP gross margin increased to 41.0%
from 39.6% in the second quarter of 2020, driven by disciplined
pricing and cost management. Non-GAAP operating expenses increased
to $29.6 million in the third quarter of 2020, compared to
$26.0 million in the prior quarter, primarily due to an
increase in our engineering and sales headcount to support
innovation and growth. Non-GAAP operating income was
$43.7 million, compared to $23.7 million in the prior
quarter.
We exited the third quarter with $661.8 million
in cash and generated $67.5 million in cash flow from
operations. Inventory was $37.5 million at the end of the third
quarter of 2020, compared to $31.2 million at the end of the second
quarter of 2020. The sequential increase in inventory was driven by
the purchase of battery cell packs to support the increased
shipments of Encharge™ storage systems in the fourth quarter of
2020, along with the expected increase in microinverter
shipments.
We started production shipments of our Encharge
storage systems to customers in North America in July and ramped
volume throughout the third quarter of 2020. The feedback from both
installers and homeowners has been positive. Installers like the
system’s modularity and having a single provider of a rooftop power
electronics and battery storage systems, while homeowners value the
product’s differentiated functionality, industrial design,
reliability, safety, and ability to get on and off-grid from a
smartphone app. The Encharge storage system features Enphase Power
Start™ technology, allowing homeowners to start motor-driven
appliances, such as air conditioners and pumps, in off-grid mode
with optimal system size. In addition, the Enlighten™ energy
management software platform gives homeowners the power of insight
into the performance of their solar and storage systems. We are
excited about the ability to offer our customers peace of mind with
our energy independent solution.
Demand for our core microinverter products
rebounded strongly in the third quarter of 2020. We experienced
record sell-through from distribution to installers, resulting in
channel inventory slightly below the low end of our typical target
range. Sales to distributors improved significantly and was
broad-based geographically. We were also pleased to report our
first quarter of significant revenue from the sale of Encharge
storage systems.
BUSINESS HIGHLIGHTS
On Aug. 17, 2020, Enphase Energy announced a
strategic partnership with Sonnenstromfabrik (CS Wismar GmbH), one
of Europe’s most modern, high-quality manufacturers of solar
modules, to develop the first high-efficiency Enphase Energized™ AC
module (ACM) utilizing the Enphase IQ 7+™ microinverters for the
European residential solar markets.
On Aug. 26, 2020 Enphase Energy announced that
Solargain, one of Australia's largest and most experienced solar
energy providers, selected Enphase microinverters as the premium
inverter solution for its turnkey retail solar offerings in
Australia. Solargain was selected by IKEA as its Australian partner
to support IKEA's in-store and online solar offering and Australian
consumers purchasing a Solargain-IKEA solar system can select
Enphase IQ 7+ microinverters.
On Aug. 31, 2020, Enphase Energy announced that
Enphase IQ 7A™ microinverters for high-power monofacial and
bifacial solar modules are shipping to customers in Australia and
Europe. IQ 7A microinverters, support up to 450W high-power
modules, targeting residential and commercial solar
applications.
On Sept. 21, 2020, Enphase Energy announced it
entered into partnerships with three solar distribution companies
in Belgium and the Netherlands–Carbomat Group, Libra Energy and
Solarclarity, further strengthening Enphase’s presence in the
European solar market.
On Oct. 20, 2020, Enphase Energy announced that
SunCool Energy has started offering the Enphase Encharge storage
system to customers in South Florida. Encharge storage systems
feature Enphase Ensemble™ energy management technology, which
powers the world’s first fully integrated, grid-agnostic
microinverter-based solar-plus-storage system.
FOURTH QUARTER 2020 FINANCIAL
OUTLOOK
For the fourth quarter of 2020, Enphase Energy estimates both
GAAP and non-GAAP financial results as follows:
- Revenue to be within a range of $245.0 million to $260.0
million; revenue guidance does not include any safe harbor
shipments
- GAAP gross margin to be within a range of 37.0% to 40.0%,
excluding the recovery of the remaining $16.0 million tariff refund
that has not yet been approved; non-GAAP gross margin to be within
a range of 38.0% to 41.0%, excluding tariff refund and stock-based
compensation expenses
- GAAP operating expenses to be within a range of
$51.0 million to $54.0 million, including
$16.0 million estimated for stock-based compensation expenses
and acquisition related amortization
- Non-GAAP operating expenses to be within a range of
$35.0 million to $38.0 million, excluding
$16.0 million estimated for stock-based compensation expenses
and acquisition related amortization
Follow Enphase Online
- Read the Enphase blog.
- Follow @Enphase on Twitter.
- Visit us on Facebook and LinkedIn.
- Watch Enphase videos on YouTube.
Use of Non-GAAP Financial Measures
The Company has presented certain non-GAAP
financial measures in this press release. To view a description of
non-GAAP financial measures used and the non-GAAP reconciliation
schedule for the periods presented, click here.
Conference Call Information
Enphase Energy will host a conference call for
analysts and investors to discuss its third quarter 2020 results
and fourth quarter 2020 business outlook today at 4:30 p.m. Eastern
Time (1:30 p.m. Pacific Time). The call is open to the public by
dialing (877) 644-1284; participant passcode 3662778. A live
webcast of the conference call will also be accessible from the
“Investor Relations” section of the Company’s website at
investor.enphase.com. Following the webcast, an archived version
will be available on the website for approximately one year. In
addition, an audio replay of the conference call will be available
by calling (855) 859-2056; participant passcode 3662778,
beginning approximately one hour after the call.
Forward-Looking Statements
This press release contains forward-looking
statements, including statements related to Enphase Energy’s
expectations as to future financial performance, expense
levels, the capabilities, advantages, and performance of our
technology and products, our business strategies and anticipated
demand for our products. These forward-looking statements are based
on the Company’s current expectations and inherently involve
significant risks and uncertainties. Enphase Energy’s actual
results and the timing of events could differ materially from those
anticipated in such forward-looking statements as a result of
certain risks and uncertainties including those risks described in
more detail in the Company’s most recent Annual Report on Form 10-K
and other documents on file with the SEC and available on the SEC’s
website at www.sec.gov. Enphase Energy undertakes no duty or
obligation to update any forward-looking statements contained in
this release as a result of new information, future events or
changes in its expectations, except as required by law.
A copy of this press release can be found on the
investor relations page of Enphase Energy’s website at
investor.enphase.com.
About Enphase Energy, Inc.
Enphase Energy, a global energy technology
company, delivers smart, easy-to-use solutions that manage solar
generation, storage and communication on one intelligent platform.
The Company revolutionized the solar industry with its
microinverter technology and produces a fully integrated
solar-plus-storage solution. Enphase has shipped more than
30 million microinverters, and approximately
1.3 million Enphase systems have been deployed in more
than 130 countries. For more information, visit
www.enphase.com.
Enphase Energy®, the Enphase logo, Encharge,
Power Start, Enlighten, Enphase Energized, IQ 7+, IQ 7A, Ensemble,
and other trademarks or service names are the trademarks of Enphase
Energy, Inc. Other names are for informational purposes and may be
trademarks of their respective owners.
Contact:Adam HinckleyEnphase
Energy, Inc.Investor
Relationsir@enphaseenergy.com +1-707-763-4784 x7354
ENPHASE ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(In thousands, except per share
data)(Unaudited)
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, 2020 |
|
June 30, 2020 |
|
September 30, 2019 |
|
September 30, 2020 |
|
September 30, 2019 |
Net revenues |
$ |
178,503 |
|
|
$ |
125,538 |
|
|
$ |
180,057 |
|
|
$ |
509,586 |
|
|
$ |
414,301 |
|
Cost of revenues (1) |
83,522 |
|
|
77,151 |
|
|
115,351 |
|
|
285,543 |
|
|
270,937 |
|
Gross profit |
94,981 |
|
|
48,387 |
|
|
64,706 |
|
|
224,043 |
|
|
143,364 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Research and development |
15,052 |
|
|
13,192 |
|
|
11,085 |
|
|
40,120 |
|
|
29,213 |
|
Sales and marketing |
14,645 |
|
|
12,371 |
|
|
9,551 |
|
|
38,788 |
|
|
26,038 |
|
General and administrative |
13,525 |
|
|
11,970 |
|
|
9,895 |
|
|
37,810 |
|
|
28,358 |
|
Restructuring charges |
— |
|
|
— |
|
|
469 |
|
|
— |
|
|
1,468 |
|
Total operating expenses |
43,222 |
|
|
37,533 |
|
|
31,000 |
|
|
116,718 |
|
|
85,077 |
|
Income from operations |
51,759 |
|
|
10,854 |
|
|
33,706 |
|
|
107,325 |
|
|
58,287 |
|
Other expense, net |
|
|
|
|
|
|
|
|
|
Interest income |
110 |
|
|
282 |
|
|
894 |
|
|
1,483 |
|
|
1,698 |
|
Interest expense |
(5,993 |
) |
|
(5,952 |
) |
|
(2,286 |
) |
|
(15,100 |
) |
|
(7,388 |
) |
Other expense, net |
(1,031 |
) |
|
653 |
|
|
(943 |
) |
|
(1,302 |
) |
|
(6,904 |
) |
Change in fair value of derivatives (2) |
— |
|
|
(59,692 |
) |
|
— |
|
|
(44,348 |
) |
|
— |
|
Total other expense, net |
(6,914 |
) |
|
(64,709 |
) |
|
(2,335 |
) |
|
(59,267 |
) |
|
(12,594 |
) |
Income before income
taxes |
44,845 |
|
|
(53,855 |
) |
|
31,371 |
|
|
48,058 |
|
|
45,693 |
|
Income tax benefit
(provision) |
(5,483 |
) |
|
6,561 |
|
|
(272 |
) |
|
12,946 |
|
|
(1,211 |
) |
Net income (loss) |
$ |
39,362 |
|
|
$ |
(47,294 |
) |
|
$ |
31,099 |
|
|
$ |
61,004 |
|
|
$ |
44,482 |
|
Net income (loss) per
share: |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.31 |
|
|
$ |
(0.38 |
) |
|
$ |
0.25 |
|
|
$ |
0.49 |
|
|
$ |
0.39 |
|
Diluted |
$ |
0.28 |
|
|
$ |
(0.38 |
) |
|
$ |
0.23 |
|
|
$ |
0.44 |
|
|
$ |
0.35 |
|
Shares used in per share
calculation: |
|
|
|
|
|
|
|
|
|
Basic |
126,109 |
|
|
125,603 |
|
|
122,123 |
|
|
125,084 |
|
|
114,720 |
|
Diluted |
141,820 |
|
|
125,603 |
|
|
133,611 |
|
|
140,207 |
|
|
131,114 |
|
(1) We sought refunds totaling approximately $39
million plus accrued interest on tariffs previously paid from
September 24, 2018 to March 31, 2020 for certain microinverters
that qualify for the tariff exclusion on Chinese imported
microinverter products that fit the dimensions and weight limits
within a Section 301 Tariff exclusion under U.S. note 20(ss)(40) to
subchapter III of chapter 99 of the Harmonized Tariff Schedule of
the United States. The refund request is subject to review and
approval by the U.S. Customs and Border Protection; therefore, we
have assessed the probable loss recovery in the three and nine
months ended September 30, 2020 is equal to the $23.0 million
approved refund requests available to us prior to issuance of the
financial statements on October 27, 2020. As of both the
three and nine months ended September 30, 2020, we have recorded
$23.0 million as a reduction to cost of revenues in our condensed
consolidated statements of operations as the approved refunds
relate to paid tariffs previously recorded to cost of revenues,
therefore, we recorded the corresponding approved tariff refunds as
credits to cost of revenues in the current period.
(2) Change in fair value of derivatives of $44.3
million for the nine months ended September 30, 2020, represents
changes in fair value of the conversion option in the Notes due
2025, as well as the convertible note hedge and warrant
transactions. Initially, conversion of the Notes due 2025 would be
settled solely in cash as a result of the Company not having the
necessary number of authorized but unissued shares of its common
stock available to settle the conversion option of the Notes due
2025 in shares; therefore, the conversion option, convertible note
hedge and warrant transactions were classified as derivatives that
required marked-to-market accounting. On May 20, 2020, at the
Company’s annual meeting of stockholders, the stockholders approved
an amendment to its certificate of incorporation to increase the
number of authorized shares of the Company’s common stock. As a
result, the Company will now be able to settle the Notes due 2025,
convertible notes hedge and warrants through payment or delivery,
as the case may be, of cash, shares of its common stock or a
combination thereof, at the Company’s election. Accordingly, on
May 20, 2020, the conversion option, convertible note hedge
and warrant transactions were remeasured at fair value and were
then reclassified to additional paid-in-capital in the condensed
consolidated balance sheet in the second quarter of 2020 and are no
longer remeasured as long as they continue to meet the conditions
for equity classification.
ENPHASE ENERGY, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS(In
thousands)(Unaudited)
|
September 30, 2020 |
|
December 31, 2019 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
661,792 |
|
|
$ |
251,409 |
|
Restricted cash |
— |
|
|
44,700 |
|
Accounts receivable, net |
122,386 |
|
|
145,413 |
|
Inventory |
37,535 |
|
|
32,056 |
|
Prepaid expenses and other assets |
28,521 |
|
|
26,079 |
|
Total current assets |
850,234 |
|
|
499,657 |
|
Property and equipment, net |
35,187 |
|
|
28,936 |
|
Operating lease, right of use asset, net |
14,487 |
|
|
10,117 |
|
Intangible assets, net |
26,839 |
|
|
30,579 |
|
Goodwill |
24,783 |
|
|
24,783 |
|
Other assets |
51,998 |
|
|
44,620 |
|
Deferred tax assets, net |
88,812 |
|
|
74,531 |
|
Total assets |
$ |
1,092,340 |
|
|
$ |
713,223 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
48,148 |
|
|
$ |
57,474 |
|
Accrued liabilities |
52,203 |
|
|
47,092 |
|
Deferred revenues, current |
41,738 |
|
|
81,783 |
|
Warranty obligations, current |
10,760 |
|
|
10,078 |
|
Debt, current |
103,670 |
|
|
2,884 |
|
Total current liabilities |
256,519 |
|
|
199,311 |
|
Long-term liabilities: |
|
|
|
Deferred revenues, noncurrent |
115,757 |
|
|
100,204 |
|
Warranty obligations, noncurrent |
33,019 |
|
|
27,020 |
|
Other liabilities |
14,387 |
|
|
11,817 |
|
Debt, noncurrent |
256,452 |
|
|
102,659 |
|
Total liabilities |
676,134 |
|
|
441,011 |
|
Total stockholders’ equity |
416,206 |
|
|
272,212 |
|
Total liabilities and stockholders’ equity |
$ |
1,092,340 |
|
|
$ |
713,223 |
|
ENPHASE ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS(In
thousands)(Unaudited)
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, 2020 |
|
June 30, 2020 |
|
September 30, 2019 |
|
September 30, 2020 |
|
September 30, 2019 |
Cash flows from
operating activities: |
|
|
|
|
|
|
|
|
|
Net (loss) income (1) |
$ |
39,362 |
|
|
$ |
(47,294 |
) |
|
$ |
31,099 |
|
|
$ |
61,004 |
|
|
$ |
44,482 |
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
4,765 |
|
|
4,141 |
|
|
3,857 |
|
|
12,750 |
|
|
11,551 |
|
Provision for doubtful accounts |
69 |
|
|
81 |
|
|
201 |
|
|
254 |
|
|
408 |
|
Non-cash interest expense |
5,422 |
|
|
5,372 |
|
|
1,907 |
|
|
13,516 |
|
|
4,173 |
|
Financing fees on extinguishment of debt |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
2,152 |
|
Fees paid for repurchase and exchange of convertible notes due
2023 |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
6,000 |
|
Stock-based compensation |
14,399 |
|
|
12,300 |
|
|
5,776 |
|
|
34,214 |
|
|
14,000 |
|
Change in fair value of derivatives |
— |
|
|
59,692 |
|
|
— |
|
|
44,348 |
|
|
— |
|
Deferred income taxes |
5,060 |
|
|
(7,067 |
) |
|
— |
|
|
(14,507 |
) |
|
— |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
Accounts receivable |
(32,633 |
) |
|
6,529 |
|
|
(37,035 |
) |
|
23,533 |
|
|
(56,139 |
) |
Inventory |
(6,349 |
) |
|
3,430 |
|
|
(10,137 |
) |
|
(5,479 |
) |
|
(13,964 |
) |
Prepaid expenses and other assets |
(917 |
) |
|
(4,525 |
) |
|
934 |
|
|
(10,451 |
) |
|
(8,634 |
) |
Accounts payable, accrued and other liabilities (1) |
26,189 |
|
|
(13,323 |
) |
|
1,851 |
|
|
(9,200 |
) |
|
18,656 |
|
Warranty obligations |
5,872 |
|
|
406 |
|
|
1,631 |
|
|
6,681 |
|
|
3,330 |
|
Deferred revenues |
6,262 |
|
|
5,689 |
|
|
4,877 |
|
|
(24,509 |
) |
|
10,781 |
|
Net cash provided by operating activities |
67,501 |
|
|
25,431 |
|
|
4,961 |
|
|
132,154 |
|
|
36,796 |
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
|
Purchases of property and equipment |
(3,903 |
) |
|
(4,451 |
) |
|
(4,192 |
) |
|
(11,707 |
) |
|
(7,368 |
) |
Net cash used in investing activities |
(3,903 |
) |
|
(4,451 |
) |
|
(4,192 |
) |
|
(11,707 |
) |
|
(7,368 |
) |
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
|
Issuance of convertible notes, net of issuance costs |
— |
|
|
(591 |
) |
|
(559 |
) |
|
312,420 |
|
|
127,481 |
|
Purchase of convertible note hedges |
— |
|
|
— |
|
|
— |
|
|
(89,056 |
) |
|
(36,313 |
) |
Sale of warrants |
— |
|
|
— |
|
|
— |
|
|
71,552 |
|
|
29,819 |
|
Fees paid for repurchase and exchange of convertible notes due
2023 |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(6,000 |
) |
Principal payments and financing fees on debt |
(636 |
) |
|
(485 |
) |
|
(536 |
) |
|
(2,269 |
) |
|
(45,658 |
) |
Proceeds from exercise of equity awards and employee stock purchase
plan |
(138 |
) |
|
2,867 |
|
|
303 |
|
|
4,708 |
|
|
2,925 |
|
Payment of withholding taxes related to net share settlement of
equity awards |
(8,390 |
) |
|
(9,385 |
) |
|
(2,348 |
) |
|
(52,042 |
) |
|
(4,438 |
) |
Net cash provided by (used in) financing activities |
(9,164 |
) |
|
(7,594 |
) |
|
(3,140 |
) |
|
245,313 |
|
|
67,816 |
|
Effect of exchange rate changes on cash and cash equivalents |
104 |
|
|
24 |
|
|
(542 |
) |
|
(77 |
) |
|
(435 |
) |
Net increase in cash and cash
equivalents |
54,538 |
|
|
13,410 |
|
|
(2,913 |
) |
|
365,683 |
|
|
96,809 |
|
Cash, cash equivalents and
restricted cash—Beginning of period |
607,254 |
|
|
593,844 |
|
|
205,959 |
|
|
296,109 |
|
|
106,237 |
|
Cash and cash equivalents—End
of period |
$ |
661,792 |
|
|
$ |
607,254 |
|
|
$ |
203,046 |
|
|
$ |
661,792 |
|
|
$ |
203,046 |
|
(1) As of September 30, 2020, we have received
$16.0 million of tariff refunds and accrued for $7.0 million tariff
refunds that were approved, however, not yet received on or before
September 30, 2020. As of both the three and nine months ended
September 30, 2020, we have recorded $23.0 million as a reduction
to cost of revenues in our condensed consolidated statements of
operations as the approved refunds relate to paid tariffs
previously recorded to cost of revenues, therefore, we recorded the
corresponding approved tariff refunds as credits to cost of
revenues in the current period. The tariff refund receivable of
$7.0 million is recorded as a reduction of accounts payable to Flex
Ltd. and affiliates (“Flex”), our manufacturing partner and the
importer of record who will first receive the tariff refunds, on
the condensed consolidated balance sheet as of September 30,
2020.
ENPHASE ENERGY,
INC.RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES(In thousands, except per share data and
percentages)(Unaudited)
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, 2020 |
|
June 30, 2020 |
|
September 30, 2019 |
|
September 30, 2020 |
|
September 30, 2019 |
Gross profit (GAAP) |
$ |
94,981 |
|
|
$ |
48,387 |
|
|
$ |
64,706 |
|
|
$ |
224,043 |
|
|
$ |
143,364 |
|
Stock-based compensation |
1,294 |
|
|
1,337 |
|
|
497 |
|
|
3,237 |
|
|
1,114 |
|
Tariff refunds |
(23,029 |
) |
|
— |
|
|
— |
|
|
(23,029 |
) |
|
— |
|
Gross profit
(Non-GAAP) |
$ |
73,246 |
|
|
$ |
49,724 |
|
|
$ |
65,203 |
|
|
$ |
204,251 |
|
|
$ |
144,478 |
|
|
|
|
|
|
|
|
|
|
|
Gross margin
(GAAP) |
53.2 |
% |
|
38.5 |
% |
|
35.9 |
% |
|
44.0 |
% |
|
34.6 |
% |
Stock-based compensation |
0.7 |
% |
|
1.1 |
% |
|
0.3 |
% |
|
0.6 |
% |
|
0.3 |
% |
Tariff refunds |
(12.9 |
)% |
|
— |
% |
|
— |
% |
|
(4.5 |
)% |
|
— |
% |
Gross margin
(Non-GAAP) |
41.0 |
% |
|
39.6 |
% |
|
36.2 |
% |
|
40.1 |
% |
|
34.9 |
% |
|
|
|
|
|
|
|
|
|
|
Operating expenses
(GAAP) |
$ |
43,222 |
|
|
$ |
37,533 |
|
|
$ |
31,000 |
|
|
$ |
116,718 |
|
|
$ |
85,077 |
|
Stock-based compensation (1) |
(13,105 |
) |
|
(10,963 |
) |
|
(4,948 |
) |
|
(30,977 |
) |
|
(12,168 |
) |
Restructuring and asset impairment charges |
— |
|
|
— |
|
|
(469 |
) |
|
— |
|
|
(1,468 |
) |
Acquisition related expenses and amortization |
(546 |
) |
|
(546 |
) |
|
(546 |
) |
|
(1,638 |
) |
|
(1,638 |
) |
Operating expenses
(Non-GAAP) |
$ |
29,571 |
|
|
$ |
26,024 |
|
|
$ |
25,037 |
|
|
$ |
84,103 |
|
|
$ |
69,803 |
|
|
|
|
|
|
|
|
|
|
|
(1) Includes stock-based
compensation as follows: |
|
|
|
|
|
|
|
|
|
Research and development |
$ |
4,248 |
|
|
$ |
3,263 |
|
|
$ |
1,411 |
|
|
$ |
9,430 |
|
|
$ |
3,255 |
|
Sales and marketing |
3,952 |
|
|
3,610 |
|
|
1,541 |
|
|
9,504 |
|
|
3,900 |
|
General and administrative |
4,905 |
|
|
4,090 |
|
|
1,996 |
|
|
12,043 |
|
|
5,013 |
|
Restructuring |
— |
|
|
— |
|
|
— |
|
|
$ |
— |
|
|
$ |
718 |
|
Total |
$ |
13,105 |
|
|
$ |
10,963 |
|
|
$ |
4,948 |
|
|
$ |
30,977 |
|
|
$ |
12,168 |
|
|
|
|
|
|
|
|
|
|
|
Income from operations
(GAAP) |
$ |
51,759 |
|
|
$ |
10,854 |
|
|
$ |
33,706 |
|
|
$ |
107,325 |
|
|
$ |
58,287 |
|
Stock-based compensation |
14,399 |
|
|
12,300 |
|
|
5,445 |
|
|
34,214 |
|
|
13,282 |
|
Tariff refunds |
(23,029 |
) |
|
— |
|
|
— |
|
|
(23,029 |
) |
|
— |
|
Restructuring and asset impairment charges |
— |
|
|
— |
|
|
469 |
|
|
— |
|
|
1,468 |
|
Acquisition related expenses and amortization |
546 |
|
|
546 |
|
|
546 |
|
|
1,638 |
|
|
1,638 |
|
Income from operations
(Non-GAAP) |
$ |
43,675 |
|
|
$ |
23,700 |
|
|
$ |
40,166 |
|
|
$ |
120,148 |
|
|
$ |
74,675 |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
(GAAP) |
$ |
39,362 |
|
|
$ |
(47,294 |
) |
|
$ |
31,099 |
|
|
$ |
61,004 |
|
|
$ |
44,482 |
|
Stock-based compensation |
14,399 |
|
|
12,300 |
|
|
5,445 |
|
|
34,214 |
|
|
13,282 |
|
Tariff refunds |
(23,029 |
) |
|
— |
|
|
— |
|
|
(23,029 |
) |
|
— |
|
Restructuring and asset impairment charges |
— |
|
|
— |
|
|
469 |
|
|
— |
|
|
1,468 |
|
Acquisition related expenses and amortization |
546 |
|
|
546 |
|
|
546 |
|
|
1,638 |
|
|
1,638 |
|
Non-recurring debt prepayment fees and non-cash interest |
5,422 |
|
|
5,372 |
|
|
1,907 |
|
|
13,516 |
|
|
11,297 |
|
Change in fair value of derivatives |
— |
|
|
59,692 |
|
|
— |
|
|
44,348 |
|
|
— |
|
Non-GAAP income tax adjustment |
5,060 |
|
|
(7,067 |
) |
|
— |
|
|
(14,507 |
) |
|
— |
|
Net income
(Non-GAAP) |
$ |
41,760 |
|
|
$ |
23,549 |
|
|
$ |
39,466 |
|
|
$ |
117,184 |
|
|
$ |
72,167 |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share, basic (GAAP) |
$ |
0.31 |
|
|
$ |
(0.38 |
) |
|
$ |
0.25 |
|
|
$ |
0.49 |
|
|
$ |
0.39 |
|
Stock-based compensation |
0.12 |
|
|
0.10 |
|
|
0.05 |
|
|
0.28 |
|
|
0.12 |
|
Tariff refunds |
(0.18 |
) |
|
— |
|
|
— |
|
|
(0.18 |
) |
|
— |
|
Restructuring and asset impairment charges |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
0.01 |
|
Acquisition related expenses and amortization |
— |
|
|
— |
|
|
— |
|
|
0.01 |
|
|
0.01 |
|
Non-recurring debt prepayment fees and non-cash interest |
0.04 |
|
|
0.05 |
|
|
0.02 |
|
|
0.11 |
|
|
0.10 |
|
Change in fair value of derivatives |
— |
|
|
0.48 |
|
|
— |
|
|
0.35 |
|
|
— |
|
Non-GAAP income tax adjustment |
0.04 |
|
|
(0.06 |
) |
|
— |
|
|
(0.12 |
) |
|
— |
|
Net income per share, basic (Non-GAAP) |
$ |
0.33 |
|
|
$ |
0.19 |
|
|
$ |
0.32 |
|
|
$ |
0.94 |
|
|
$ |
0.63 |
|
|
|
|
|
|
|
|
|
|
|
Shares used in basic per share
calculation GAAP and Non-GAAP |
126,109 |
|
|
125,603 |
|
|
122,123 |
|
|
125,084 |
|
|
114,720 |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share, diluted (GAAP) |
$ |
0.28 |
|
|
$ |
(0.38 |
) |
|
$ |
0.23 |
|
|
$ |
0.44 |
|
|
$ |
0.35 |
|
Stock-based compensation |
0.11 |
|
|
0.09 |
|
|
0.04 |
|
|
0.26 |
|
|
0.10 |
|
Restructuring and asset impairment charges |
— |
|
|
— |
|
|
0.01 |
|
|
— |
|
|
0.01 |
|
Tariff Refunds |
(0.17 |
) |
|
— |
|
|
— |
|
|
(0.17 |
) |
|
— |
|
Acquisition related expenses and amortization |
— |
|
|
— |
|
|
0.01 |
|
|
0.01 |
|
|
0.01 |
|
Non-recurring debt prepayment fees and non-cash interest |
0.04 |
|
|
0.04 |
|
|
0.01 |
|
|
0.10 |
|
|
0.09 |
|
Change in fair value of derivatives |
— |
|
|
0.48 |
|
|
— |
|
|
0.33 |
|
|
— |
|
Non-GAAP income tax adjustment |
0.04 |
|
|
(0.06 |
) |
|
— |
|
|
(0.11 |
) |
|
$ |
— |
|
Net income per share, diluted (Non-GAAP) (2)
(4) |
$ |
0.30 |
|
|
$ |
0.17 |
|
|
$ |
0.30 |
|
|
$ |
0.86 |
|
|
$ |
0.56 |
|
|
|
|
|
|
|
|
|
|
|
Shares used in diluted per share calculation GAAP |
141,820 |
|
|
125,603 |
|
|
133,611 |
|
|
140,207 |
|
|
131,114 |
|
Shares used in diluted per
share calculation Non-GAAP (3) (4) |
137,352 |
|
|
135,770 |
|
|
132,323 |
|
|
136,359 |
|
|
130,729 |
|
(2) Calculation of non-GAAP diluted net income
per share for the three months ended September 30, 2020,
June 30, 2020 and September 30, 2019 excludes convertible
notes due 2023 interest expense, net of tax of less than
$0.1 million in each period from non-GAAP net income.
Calculation of non-GAAP diluted net income per share for the nine
months ended September 30, 2020 and September 30, 2019
excludes convertible notes due 2023 interest expense, net of tax of
less than $0.1 million and $0.9 million, respectively, from
non-GAAP net income.
(3) Effect of dilutive in-the-money portion
of convertible senior notes and warrants are included in the GAAP
weighted-average diluted shares in periods where the Company has
GAAP net income. The Company excluded the in-the-money portion of
convertible notes due 2024 totaling 4,468 thousand shares, 3677
thousand shares and 1,288 thousand shares in the three months ended
September 30, 2020, June 30, 2020 and September 30,
2019, respectively, and 3,849 thousand shares and 385 thousand
shares for the nine months ended September 30, 2020 and
September 30, 2019, respectively for non-GAAP weighted-average
diluted shares as the Company entered into convertible note hedge
transactions that reduce potential dilution to the Company’s common
stock upon any conversion of the notes due 2024.
(4) Effect of dilutive in-the-money portion of
Stock Options, RSUs, PSUs, shares to be purchased under the
Company’s ESPP, the Notes due 2023 and the warrants issued in
conjunction with the Notes due 2024 are included in the non-GAAP
weighted-average diluted shares in periods where the Company has
non-GAAP net income, which totaled 10,167 thousand shares in the
three months ended June 30, 2020.
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