COVER PAGE
COVER PAGE - shares | 6 Months Ended | |
Jun. 30, 2023 | Jul. 21, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-35480 | |
Entity Registrant Name | Enphase Energy, Inc. | |
Entity Incorporation, State | DE | |
Entity Tax Identification Number | 20-4645388 | |
Entity Address, Address Line One | 47281 Bayside Parkway | |
Entity Address, City or Town | Fremont | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94538 | |
City Area Code | 707 | |
Local Phone Number | 774-7000 | |
Title of 12(b) Security | Common Stock, $0.00001 par value per share | |
Trading Symbol | ENPH | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 136,355,373 | |
Entity Central Index Key | 0001463101 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --12-31 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 |
Current assets: | |||
Cash and cash equivalents | $ 278,676 | $ 473,244 | |
Marketable securities | 1,521,816 | 1,139,599 | |
Accounts receivable, net of allowances of $1,322 and $979 at June 30, 2023 and December 31, 2022, respectively | 520,306 | 440,896 | |
Inventory | 166,111 | 149,708 | |
Prepaid expenses and other assets | 73,880 | 60,824 | |
Total current assets | 2,560,789 | 2,264,271 | |
Property and equipment, net | 151,657 | 111,367 | |
Operating lease, right of use asset, net | 22,954 | 21,379 | |
Intangible assets, net | 85,960 | 99,541 | |
Goodwill | 214,290 | 213,559 | |
Other assets | 195,283 | 169,291 | |
Deferred tax assets, net | 234,949 | 204,872 | |
Total assets | 3,465,882 | 3,084,280 | |
Current liabilities: | |||
Accounts payable | 79,075 | 125,085 | |
Accrued liabilities | 425,285 | 295,939 | |
Deferred revenues, current | 109,176 | 90,747 | |
Warranty obligations, current | 36,686 | 35,556 | $ 29,197 |
Debt, current | 93,383 | 90,892 | |
Total current liabilities | 743,605 | 638,219 | |
Long-term liabilities: | |||
Deferred revenues, non-current | 354,296 | 281,613 | |
Warranty obligations, non-current | 144,029 | 95,890 | 67,354 |
Other liabilities | 50,251 | 43,520 | |
Debt, non-current | 1,201,114 | 1,199,465 | |
Total liabilities | 2,493,295 | 2,258,707 | |
Commitments and contingencies (Note 9) | |||
Stockholders’ equity: | |||
Common stock, $0.00001 par value, 300,000 shares authorized; and 136,006 shares and 136,441 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively | 1 | 1 | |
Additional paid-in capital | 858,039 | 819,119 | |
Accumulated earnings | 189,539 | 17,335 | |
Accumulated other comprehensive loss | (6,852) | (10,882) | |
Treasury stock, at cost | (68,140) | 0 | |
Total stockholders’ equity | 972,587 | 825,573 | $ 450,999 |
Total liabilities and stockholders’ equity | $ 3,465,882 | $ 3,084,280 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance | $ 1,322 | $ 979 |
Common stock, par value (in usd per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 136,006,000 | 136,441,000 |
Common stock, shares outstanding (in shares) | 136,006,000 | 136,441,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||||
Net revenues | $ 711,118 | $ 530,196 | $ 1,437,134 | $ 971,488 |
Cost of revenues | 387,776 | 311,191 | 787,421 | 575,510 |
Gross profit | 323,342 | 219,005 | 649,713 | 395,978 |
Operating expenses: | ||||
Research and development | 60,043 | 39,256 | 117,172 | 74,975 |
Sales and marketing | 58,405 | 53,588 | 123,026 | 94,932 |
General and administrative | 34,397 | 32,125 | 70,662 | 70,211 |
Restructuring charges | 177 | 0 | 870 | 0 |
Total operating expenses | 153,022 | 124,969 | 311,730 | 240,118 |
Income from operations | 170,320 | 94,036 | 337,983 | 155,860 |
Other income (expense), net | ||||
Interest income | 16,526 | 796 | 29,566 | 1,256 |
Interest expense | (2,219) | (2,168) | (4,375) | (4,904) |
Other income (expense), net | (33) | (456) | 393 | (2,597) |
Total other income (expense), net | 14,274 | (1,828) | 25,584 | (6,245) |
Income before income taxes | 184,594 | 92,208 | 363,567 | 149,615 |
Income tax provision | (27,403) | (15,232) | (59,503) | (20,818) |
Net income | $ 157,191 | $ 76,976 | $ 304,064 | $ 128,797 |
Net income per share: | ||||
Basic (in USD per share) | $ 1.15 | $ 0.57 | $ 2.23 | $ 0.96 |
Diluted (in USD per share) | $ 1.09 | $ 0.54 | $ 2.11 | $ 0.91 |
Shares used in per share calculation: | ||||
Basic (in shares) | 136,607 | 135,196 | 136,650 | 134,768 |
Diluted (in shares) | 145,098 | 143,725 | 145,608 | 143,602 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 157,191 | $ 76,976 | $ 304,064 | $ 128,797 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | 431 | (2,570) | 1,508 | (2,306) |
Marketable securities | ||||
Change in net unrealized gain (loss) on marketable securities, net of tax | (549) | (1,351) | 2,522 | (6,919) |
Comprehensive income | $ 157,073 | $ 73,055 | $ 308,094 | $ 119,572 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Marketable Securities, income tax benefit | $ (193) | $ (475) | $ 886 | $ (2,431) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common stock and paid-in capital | Common stock and paid-in capital Cumulative Effect, Period of Adoption, Adjustment | Accumulated Income (Deficit) | Accumulated Income (Deficit) Cumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Income (Loss) | Treasury stock, at cost |
Balance, beginning of period at Dec. 31, 2021 | $ 837,925 | $ (207,967) | $ (405,737) | $ 25,710 | $ (2,020) | $ 0 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock from exercise of equity awards and employee stock purchase plan | 4,587 | ||||||
Payment of withholding taxes related to net share settlement of equity awards | (14,807) | ||||||
Stock-based compensation | 93,736 | ||||||
Net income | $ 128,797 | 128,797 | |||||
Foreign currency translation adjustments | (2,306) | (2,306) | |||||
Change in net unrealized gain (loss) on marketable securities, net of tax | (6,919) | ||||||
Balance, end of period at Jun. 30, 2022 | 450,999 | 713,474 | (251,230) | (11,245) | 0 | ||
Balance, beginning of period at Mar. 31, 2022 | 666,512 | (328,206) | (7,324) | 0 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock from exercise of equity awards and employee stock purchase plan | 4,183 | ||||||
Payment of withholding taxes related to net share settlement of equity awards | (5,463) | ||||||
Stock-based compensation | 48,242 | ||||||
Net income | 76,976 | 76,976 | |||||
Foreign currency translation adjustments | (2,570) | (2,570) | |||||
Change in net unrealized gain (loss) on marketable securities, net of tax | (1,351) | ||||||
Balance, end of period at Jun. 30, 2022 | 450,999 | 713,474 | (251,230) | (11,245) | 0 | ||
Balance, beginning of period at Dec. 31, 2022 | 825,573 | 819,120 | 17,335 | (10,882) | 0 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock from exercise of equity awards and employee stock purchase plan | 596 | ||||||
Issuance of common stock related to 365 Pronto, Inc. post combination expense | 10,307 | ||||||
Payment of withholding taxes related to net share settlement of equity awards | (84,635) | ||||||
Stock-based compensation | 112,652 | ||||||
Purchases of treasury stock, at cost | (68,140) | ||||||
Repurchase of common stock | (131,860) | ||||||
Net income | 304,064 | 304,064 | |||||
Foreign currency translation adjustments | 1,508 | 1,508 | |||||
Change in net unrealized gain (loss) on marketable securities, net of tax | 2,522 | ||||||
Balance, end of period at Jun. 30, 2023 | 972,587 | 858,040 | 189,539 | (6,852) | 68,140 | ||
Balance, beginning of period at Mar. 31, 2023 | 812,619 | 164,208 | (6,734) | 0 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock from exercise of equity awards and employee stock purchase plan | 556 | ||||||
Issuance of common stock related to 365 Pronto, Inc. post combination expense | 4,000 | ||||||
Payment of withholding taxes related to net share settlement of equity awards | (12,790) | ||||||
Stock-based compensation | 53,655 | ||||||
Purchases of treasury stock, at cost | (68,140) | ||||||
Repurchase of common stock | (131,860) | ||||||
Net income | 157,191 | 157,191 | |||||
Foreign currency translation adjustments | 431 | 431 | |||||
Change in net unrealized gain (loss) on marketable securities, net of tax | (549) | ||||||
Balance, end of period at Jun. 30, 2023 | $ 972,587 | $ 858,040 | $ 189,539 | $ (6,852) | $ 68,140 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 304,064 | $ 128,797 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 34,419 | 28,102 |
Net amortization (accretion) of premium (discount) on marketable securities | (17,705) | 2,703 |
Provision for doubtful accounts | 629 | 131 |
Asset impairments | 0 | 1,200 |
Non-cash interest expense | 4,140 | 4,025 |
Net (gain) loss from change in fair value of debt securities | (3,498) | 129 |
Stock-based compensation | 113,821 | 100,861 |
Deferred income taxes | (26,796) | 15,617 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (83,497) | 27,546 |
Inventory | (16,403) | (55,866) |
Prepaid expenses and other assets | (41,993) | (21,352) |
Accounts payable, accrued and other liabilities | 107,225 | 10,228 |
Warranty obligations | 49,269 | 22,878 |
Deferred revenues | 91,800 | 38,094 |
Net cash provided by operating activities | 515,475 | 303,093 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (66,478) | (21,066) |
Business acquisitions, net of cash acquired | 0 | (27,680) |
Purchases of marketable securities | (1,272,908) | (60,061) |
Maturities and sale of marketable securities | 911,804 | 193,033 |
Net cash provided by (used in) investing activities | (427,582) | 84,226 |
Cash flows from financing activities: | ||
Proceeds from exercise of equity awards and employee stock purchase plan | 596 | 4,587 |
Payment of withholding taxes related to net share settlement of equity awards | (84,635) | (14,807) |
Repurchase of common stock | (200,000) | 0 |
Net cash used in financing activities | (284,039) | (10,220) |
Effect of exchange rate changes on cash and cash equivalents | 1,578 | (942) |
Net increase (decrease) in cash and cash equivalents | (194,568) | 376,157 |
Cash and cash equivalents—Beginning of period | 473,244 | 119,316 |
Cash and cash equivalents—End of period | 278,676 | 495,473 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Purchases of property and equipment included in accounts payable | 8,310 | 2,783 |
Purchases of property and equipment through tenant improvement allowance | $ 0 | $ 748 |
DESCRIPTION OF BUSINESS AND BAS
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Description of Business Enphase Energy, Inc. (the “Company”) is a global energy technology company. The Company delivers smart, easy-to-use solutions that manage solar generation, storage and communication on one platform. The Company revolutionized the solar industry with its microinverter technology and produces a fully integrated solar-plus-storage solution. Basis of Presentation and Consolidation The accompanying condensed consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States (“GAAP”). The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Unaudited Interim Financial Information These accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial reporting. In the opinion of management, these unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring items, considered necessary to present fairly the Company’s financial condition, results of operations, comprehensive income, stockholders’ equity and cash flows for the interim periods indicated. The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the operating results for the full year. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Significant estimates and assumptions reflected in the financial statements include revenue recognition, allowance for doubtful accounts, stock-based compensation, deferred compensation arrangements, inventory valuation, accrued warranty obligations, fair value of investments, debt derivatives, convertible notes and contingent consideration, fair value of acquired intangible assets and goodwill, useful lives of acquired intangible assets and property and equipment, incremental borrowing rate for right-of-use assets and lease liability. These estimates are based on information available as of the date of the financial statements; therefore, actual results could differ materially from those estimates due to risks and uncertainties, including uncertainty in the ongoing semiconductor supply and logistics constraints. The year-end condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States. The Company filed audited consolidated financial statements, which included all information and notes necessary for such a complete presentation in conjunction with its Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the SEC on February 13, 2023 (the “Form 10‑K”). Summary of Significant Accounting Policies Except for the accounting policy for treasury stock added as a result of the common stock repurchased but not yet retired by the Company during the three months ended June 30, 2023, and government grants benefits recognized following the enactment of the Inflation Reduction Act of 2022 (“IRA”), there have been no changes to the Company’s significant accounting policies as described in Note 2, “Summary of Significant Accounting Policies” of the notes to consolidated financial statements included in Part II, Item 8 of the Form 10-K. Recently Adopted Accounting Pronouncements In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2021-08, "Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers" (“ASU 2021-08”). ASU 2021-08 requires an acquirer to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, “Revenue from Contracts with Customers,” as if it had originated the contracts. This should generally result in an acquirer recognizing and measuring the acquired contract assets and contract liabilities consistent with how they were recognized and measured in the acquiree’s financial statements. The Company adopted ASU 2021-08 effective January 1, 2023. The adoption of ASU 2021-08 did not have an impact on the Company’s condensed consolidated financial statements. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION Disaggregated Revenue The Company has one major business activity, which is the design, manufacture and sale of solutions for the solar photovoltaic industry. Disaggregated revenue by primary geographical market and timing of revenue recognition for the Company’s single product line are as follows: Three Months Ended Six Months Ended 2023 2022 2023 2022 (In thousands) Primary geographical markets: U.S. $ 417,582 $ 422,628 $ 890,543 $ 792,120 International 293,536 107,568 546,591 179,368 Total $ 711,118 $ 530,196 $ 1,437,134 $ 971,488 Timing of revenue recognition: Products delivered at a point in time $ 684,122 $ 511,865 $ 1,385,774 $ 936,014 Products and services delivered over time 26,996 18,331 51,360 35,474 Total $ 711,118 $ 530,196 $ 1,437,134 $ 971,488 Contract Balances Receivables, and contract assets and contract liabilities from contracts with customers, are as follows: June 30, December 31, (In thousands) Receivables $ 520,306 $ 440,896 Short-term contract assets (Prepaid expenses and other assets) 38,073 32,130 Long-term contract assets (Other assets) 122,982 100,991 Short-term contract liabilities (Deferred revenues, current) 109,176 90,747 Long-term contract liabilities (Deferred revenues, non-current) 354,296 281,613 The Company receives payments from customers based upon contractual billing schedules. Accounts receivable are recorded when the right to consideration becomes unconditional. Contract assets include deferred product costs and commissions associated with the deferred revenue and will be amortized along with the associated revenue. The Company had no asset impairment charges related to contract assets for the six months ended June 30, 2023. Significant changes in the balances of contract assets (prepaid expenses and other assets) as of June 30, 2023 are as follows (in thousands): Contract Assets Contract Assets, beginning of period $ 133,121 Amount recognized (17,658) Increased due to shipments 45,592 Contract Assets, end of period $ 161,055 Contract liabilities are recorded as deferred revenue on the accompanying condensed consolidated balance sheets and include payments received in advance of performance obligations under the contract and are realized when the associated revenue is recognized under the contract. Significant changes in the balances of contract liabilities (deferred revenues) as of June 30, 2023 are as follows (in thousands): Contract Liabilities Contract Liabilities, beginning of period $ 372,360 Revenue recognized (51,360) Increased due to billings 142,472 Contract Liabilities, end of period $ 463,472 Remaining Performance Obligations Estimated revenue expected to be recognized in future periods related to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period are as follows: June 30, (In thousands) Fiscal year: 2023 (remaining six months) $ 55,492 2024 105,360 2025 97,787 2026 81,815 2027 62,174 Thereafter 60,844 Total $ 463,472 |
OTHER FINANCIAL INFORMATION
OTHER FINANCIAL INFORMATION | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
OTHER FINANCIAL INFORMATION | OTHER FINANCIAL INFORMATION Inventory Inventory consists of the following: June 30, December 31, (In thousands) Raw materials $ 30,993 $ 34,978 Finished goods 135,118 114,730 Total inventory $ 166,111 $ 149,708 Accrued Liabilities Accrued liabilities consist of the following: June 30, December 31, (In thousands) Customer rebates and sales incentives $ 219,814 $ 153,916 Income tax payable 81,271 16,146 VAT payable 35,511 19,852 Liability due to supply agreements 35,368 17,341 Freight 18,653 35,011 Salaries, commissions, incentive compensation and benefits 14,575 18,009 Operating lease liabilities, current 5,773 5,371 Post combination expense accrual — 9,138 Liabilities related to restructuring activities 186 714 Other 14,134 20,441 Total accrued liabilities $ 425,285 $ 295,939 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETSThe Company’s goodwill as of June 30, 2023 and December 31, 2022 were as follows: Goodwill June 30, December 31, (In thousands) Goodwill, beginning of period $ 213,559 $ 181,254 Goodwill acquired — 33,354 Currency translation adjustment 731 (1,049) Goodwill, end of period $ 214,290 $ 213,559 The Company’s purchased intangible assets as of June 30, 2023 and December 31, 2022 were as follows: June 30, 2023 December 31, 2022 Gross Additions Accumulated Amortization Net Gross Additions Accumulated Amortization Net (In thousands) Intangible assets: Other indefinite-lived intangibles $ 286 $ — $ — $ 286 $ 286 $ — $ — $ 286 Intangible assets with finite lives: Developed technology 51,044 — (22,166) 28,878 38,650 12,394 (17,260) 33,784 Customer relationships 55,106 — (24,607) 30,499 41,021 14,085 (19,702) 35,404 Trade names 37,700 — (11,403) 26,297 37,700 — (7,633) 30,067 Order backlog 600 — (600) — 600 — (600) — Total purchased intangible assets $ 144,736 $ — $ (58,776) $ 85,960 $ 118,257 $ 26,479 $ (45,195) $ 99,541 During the three months ended June 30, 2023, intangible assets acquired increased by less than $0.1 million due to the impact of foreign currency translation. Amortization expense related to finite-lived intangible assets were as follows: Three Months Ended Six Months Ended 2023 2022 2023 2022 (In thousands) Developed technology $ 2,455 $ 2,010 $ 4,910 $ 3,876 Customer relationships 2,454 2,067 4,908 3,825 Trade names 1,885 1,885 3,770 3,770 Order backlog — 323 — 600 Total amortization expense $ 6,794 $ 6,285 $ 13,588 $ 12,071 Amortization of developed technology is recorded to cost of sales, amortization of customer relationships and trade names are recorded to sales and marketing expense, and amortization of certain customer relationships is recorded as a reduction to revenue. The expected future amortization expense of intangible assets as of June 30, 2023 is presented below (in thousands): June 30, Fiscal year: 2023 (remaining six months) $ 13,585 2024 24,538 2025 23,032 2026 19,473 2027 5,046 Total $ 85,674 |
CASH EQUIVALENTS AND MARKETABLE
CASH EQUIVALENTS AND MARKETABLE SECURITIES | 6 Months Ended |
Jun. 30, 2023 | |
Cash and Cash Equivalents [Abstract] | |
CASH EQUIVALENTS AND MARKETABLE SECURITIES | CASH EQUIVALENTS AND MARKETABLE SECURITIES The cash equivalents and marketable securities consist of the following: As of June 30, 2023 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash Equivalents Marketable Securities (In thousands) Money market funds $ 134,398 $ — $ — $ 134,398 $ 134,398 $ — Certificates of deposit 49,544 3 (76) 49,471 — 49,471 Commercial paper 119,203 — (306) 118,897 — 118,897 Corporate notes and bonds 339,972 29 (3,148) 336,853 — 336,853 U.S. Treasuries 354,112 35 (398) 353,749 — 353,749 U.S. Government agency securities 666,104 166 (3,424) 662,846 — 662,846 Total $ 1,663,333 $ 233 $ (7,352) $ 1,656,214 $ 134,398 $ 1,521,816 As of December 31, 2022 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash Equivalents Marketable Securities (In thousands) Money market funds $ 165,407 $ — $ — $ 165,407 $ 165,407 $ — Certificates of deposit 31,874 13 (130) 31,757 — 31,757 Commercial paper 148,832 10 (171) 148,671 50,764 97,907 Corporate notes and bonds 168,887 2 (3,313) 165,576 — 165,576 U.S. Treasuries 301,349 8 (132) 301,225 4,094 297,131 U.S. Government agency securities 554,035 — (6,807) 547,228 — 547,228 Total $ 1,370,384 $ 33 $ (10,553) $ 1,359,864 $ 220,265 $ 1,139,599 The following table summarizes the contractual maturities of the Company’s cash equivalents and marketable securities as of June 30, 2023: Amortized Cost Fair Value (In thousands) Due within one year $ 1,357,928 $ 1,352,679 Due within one to three years 305,405 303,535 Total $ 1,663,333 $ 1,656,214 All available-for-sale securities have been classified as current, based on management's intent and ability to use the funds in current operations. |
WARRANTY OBLIGATIONS
WARRANTY OBLIGATIONS | 6 Months Ended |
Jun. 30, 2023 | |
Product Warranties Disclosures [Abstract] | |
WARRANTY OBLIGATIONS | WARRANTY OBLIGATIONS The Company’s warranty obligation activities were as follows: Three Months Ended Six Months Ended 2023 2022 2023 2022 (In thousands) Warranty obligations, beginning of period $ 146,034 $ 83,579 $ 131,446 $ 73,377 Accruals for warranties issued during period 16,344 11,311 32,515 20,221 Changes in estimates (10,363) 17,063 (6,635) 21,975 Settlements (5,092) (6,590) (13,986) (12,471) Increase due to accretion expense 3,907 1,828 7,452 3,343 Change in discount rate (1) 31,797 (9,609) 31,797 (9,609) Other (1,912) (1,031) (1,874) (285) Warranty obligations, end of period 180,715 96,551 180,715 96,551 Less: warranty obligations, current (36,686) (29,197) (36,686) (29,197) Warranty obligations, non-current $ 144,029 $ 67,354 $ 144,029 $ 67,354 (1) See Note 7, “Fair Value Measurements” for additional information about the monetary impact for change in the discount rate. Changes in Estimates During the three months ended June 30, 2023, the Company recorded a $10.4 million decrease in warranty expense from change in estimates, of which $14.4 million related to a decrease in product replacement costs related to Enphase IQ™ Battery systems and $2.1 million related to decrease in product replacement costs for all other products, partially offset by $6.1 million for increasing the warranty period for the Enphase IQ Battery from 10 years to 15 years. During the three months ended June 30, 2022, the Company recorded $17.1 million in warranty expense from change in estimates, of which $13.3 million related to continuing analysis of field performance data and diagnostic root-cause failure analysis primarily for Enphase IQ Battery storage systems and $3.8 million due to an increase in labor reimbursement rates. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An asset’s or liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value: • Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities that the Company is able to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of such assets or liabilities do not entail a significant degree of judgment. • Level 2 - Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. • Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement. The following table presents assets and liabilities measured at fair value on a recurring basis using the above input categories: June 30, 2023 December 31, 2022 (In thousands) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets: Cash and cash equivalents: Money market funds $ 134,398 $ — $ — $ 165,407 $ — $ — Commercial paper — — — — 50,764 — U.S. Treasuries — — — — 4,094 — Marketable securities: Certificates of deposit — 49,471 — — 31,757 — Commercial paper — 118,897 — — 97,907 — Corporate notes and bonds — 336,853 — — 165,576 — U.S. Treasuries — 353,749 — — 297,131 — U.S. Government agency securities — 662,846 — — 547,228 — Other assets Investments in debt securities — — 60,275 — — 56,777 Total assets measured at fair value $ 134,398 $ 1,521,816 $ 60,275 $ 165,407 $ 1,194,457 $ 56,777 Liabilities: Warranty obligations Current $ — $ — $ 27,282 $ — $ — $ 30,740 Non-current — — 123,258 — — 75,749 Total warranty obligations measured at fair value — — 150,540 — — 106,489 Total liabilities measured at fair value $ — $ — $ 150,540 $ — $ — $ 106,489 Notes due 2028 , Notes due 2026 and Notes due 2025 The Company carries the Notes due 2028 and Notes due 2026 at face value less issuance costs on its condensed consolidated balance sheets. The Company carries the Notes due 2025 at face value less unamortized discount and issuance costs on its condensed consolidated balance sheets. As of June 30, 2023, the fair value of the Notes due 2028, Notes due 2026 and Notes due 2025 was $543.6 million, $594.7 million and $261.6 million, respectively. The fair value as of June 30, 2023 was determined based on the closing trading price per $100 principal amount as of the last day of trading for the period. The Company considers the fair value of the Notes due 2028, Notes due 2026 and Notes due 2025 to be a Level 2 measurement as they are not actively traded. Refer to Note 8 , “Debt,” for additional information about the Company’s outstanding debt. Investments in debt securities In January 2021, the Company invested approximately $25.0 million in a privately-held company. The Company concluded the investment qualifies as an investment in a debt security, as it accrues interest and principal plus accrued interest becomes payable back to the Company at certain dates unless it is converted to equity at a pre-determined price. As the investment includes a conversion option, the Company has elected to account for this investment under the fair value option and any change in fair value of the investment is recognized in “Other income (expense), net” in the Company’s condensed consolidated statement of operations for that period. Further, the Company has concluded that the Company’s investment in a debt security is considered to be a Level 3 measurement due to the use of significant unobservable inputs in the valuation model. The fair value was determined using discounted cash flow methodology and assumptions include implied yield and change in estimated term of investment being held-to-maturity. In September 2021, the Company invested approximately $13.0 million in secured convertible promissory notes issued by the stockholders of a privately-held company. The investment qualifies as an investment in a debt security and will accrete interest and principal plus accrued interest that becomes payable at certain dates unless it is converted to equity at a pre-determined price. As the investment includes a conversion option, the Company has elected to account for this investment under the fair value option and any change in fair value of the investment is recognized in “Other income (expense), net” in the Company’s condensed consolidated statement of operations for that period. Principal plus accrued interest receivable of the investment approximates the fair value. In December 2022, the Company took a non-voting participating interest of approximately $15.0 million in a loan held by a privately-held company. The debt security qualifies as an investment in a debt security and interest will be payable on a monthly basis. The principal becomes repayable at a certain date when a qualified equity investment or a junior debt is raised, or as long as certain applicable payment conditions are satisfied. The accreted interest is recognized in “Other income (expense), net” in the Company’s condensed consolidated statement of operations for that period. Principal plus unpaid accrued interest receivable of the investment approximates the fair value. Investment in debt securities is recorded in “Other assets” on the accompanying condensed consolidated balance sheet as of June 30, 2023 and December 31, 2022. The changes in the balance in investments in debt securities during the period were as follows: Three Months Ended Six Months Ended 2023 2022 2023 2022 (In thousands) Balance at beginning of period $ 58,521 $ 39,926 $ 56,777 $ 41,042 Fair value adjustments included in other income (expense), net 1,754 987 3,498 (129) Balance at end of period $ 60,275 $ 40,913 $ 60,275 $ 40,913 Warranty obligations Fair Value Option for Warranty Obligations Related to Products Sold Since January 1, 2014 The Company estimates the fair value of warranty obligations by calculating the warranty obligations in the same manner as for sales prior to January 1, 2014 and applying an expected present value technique to that result. The expected present value technique, an income approach, converts future amounts into a single current discounted amount. In addition to the key estimates of return rates and replacement costs, the Company used certain Level 3 inputs which are unobservable and significant to the overall fair value measurement. Such additional assumptions are based on the Company’s credit-adjusted risk-free rate (“discount rate”) and compensation comprised of a profit element and risk premium required of a market participant to assume the obligation. The following table provides information regarding changes in nonfinancial liabilities related to the Company’s warranty obligations measured at fair value on a recurring basis using significant unobservable inputs designated as Level 3 for the periods indicated: Three Months Ended Six Months Ended 2023 2022 2023 2022 (In thousands) Balance at beginning of period $ 119,508 $ 61,586 $ 106,489 $ 51,007 Accruals for warranties issued during period 16,344 11,120 32,369 19,890 Changes in estimates (12,925) 14,692 (11,680) 18,591 Settlements (6,179) (4,668) (14,013) (8,724) Increase due to accretion expense 3,907 1,828 7,452 3,343 Change in discount rate 31,797 (9,609) 31,797 (9,609) Other (1,912) (1,026) (1,874) (575) Balance at end of period $ 150,540 $ 73,923 $ 150,540 $ 73,923 Quantitative and Qualitative Information about Level 3 Fair Value Measurements As of June 30, 2023 and December 31, 2022, the significant unobservable inputs used in the fair value measurement of the Company’s liabilities designated as Level 3 were as follows, of which the monetary impact for change in discount rate is captured in “Change in discount rate” in the table above: Percent Used (Weighted Average) Item Measured at Fair Value Valuation Technique Description of Significant Unobservable Input June 30, December 31, Warranty obligations for products sold since January 1, 2014 Discounted cash flows Profit element and risk premium 17% 16% Credit-adjusted risk-free rate 8% 13% Sensitivity of Level 3 Inputs - Warranty Obligations Each of the significant unobservable inputs is independent of the other. The profit element and risk premium are estimated based on the requirements of a third-party participant willing to assume the Company’s warranty obligations. The discount rate is determined by reference to the Company’s own credit standing at the fair value measurement date, which improved in the three and six months ended June 30, 2023 contributing to the 5% decline in discount rate and associated increase in warranty expense in the same period captured in “Change in discount rate” in the table above. Under the expected present value technique, increasing the profit element and risk premium input by 100 basis points would result in a $1.1 million increase to the liability. Decreasing the profit element and risk premium by 100 basis points would result in a $1.1 million reduction of the liability. Increasing the discount rate by 100 basis points would result in a $9.2 million reduction of the liability. Decreasing the discount rate by 100 basis points would result in a $10.3 million increase to the liability. |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT The following table provides information regarding the Company’s debt: June 30, December 31, (In thousands) Convertible notes Notes due 2028 $ 575,000 $ 575,000 Less: unamortized debt issuance costs (6,062) (6,705) Carrying amount of Notes due 2028 568,938 568,295 Notes due 2026 632,500 632,500 Less: unamortized debt issuance costs (5,320) (6,307) Carrying amount of Notes due 2026 627,180 626,193 Notes due 2025 102,175 102,175 Less: unamortized debt discount (7,979) (10,229) Less: unamortized debt issuance costs (813) (1,054) Carrying amount of Notes due 2025 93,383 90,892 Notes due 2023 5,000 5,000 Less: unamortized issuance costs (4) (23) Carrying amount of Notes due 2023 4,996 4,977 Total carrying amount of debt 1,294,497 1,290,357 Less: debt, current (93,383) (90,892) Debt, non-current $ 1,201,114 $ 1,199,465 The following table presents the total amount of interest cost recognized in the condensed consolidated statement of operations relating to the Notes: Three Months Ended Six Months Ended 2023 2022 2023 2022 (In thousands) Notes due 2028 Amortization of debt issuance costs $ 327 $ 327 $ 643 $ 643 Total interest cost recognized $ 327 $ 327 $ 643 $ 643 Notes due 2026 Amortization of debt issuance costs $ 502 $ 502 $ 987 $ 987 Total interest cost recognized $ 502 $ 502 $ 987 $ 987 Notes due 2025 Contractual interest expense $ 64 $ 64 $ 128 $ 128 Amortization of debt discount 1,144 1,088 2,249 2,137 Amortization of debt issuance costs 123 123 241 241 Total interest cost recognized $ 1,331 $ 1,275 $ 2,618 $ 2,506 Notes due 2023 Contractual interest expense $ 50 $ 50 $ 100 $ 100 Amortization of debt issuance costs 10 10 20 20 Total interest costs recognized $ 60 $ 60 $ 120 $ 120 Convertible Senior Notes due 2028 On March 1, 2021, the Company issued $575.0 million aggregate principal amount of our 0.0% convertible senior notes due 2028 (the “Notes due 2028”). The Notes due 2028 will not bear regular interest, and the principal amount of the Notes due 2028 will not accrete. The Notes due 2028 are general unsecured obligations and are governed by an indenture between the Company and U.S. Bank National Association, as trustee. The Notes due 2028 will mature on March 1, 2028, unless earlier repurchased by the Company or converted at the option of the holders. The Company received approximately $566.4 million in net proceeds, after deducting the initial purchasers’ discount, from the issuance of the Notes due 2028. The initial conversion rate for the Notes due 2028 is 3.5104 shares of common stock per $1,000 principal amount of the Notes due 2028 (which represents an initial conversion price of approximately $284.87 per share). The conversion rate for the Notes due 2028 will be subject to adjustment upon the occurrence of certain specified events but will not be adjusted for any accrued and unpaid special interest, if any. In addition, if a make-whole fundamental change or a redemption with respect to the Notes due 2028 occurs prior to the maturity date, under certain circumstances as specified in the relevant indenture, the Company will increase the conversion rate for the Notes due 2028 by a number of additional shares of the Company’s common stock for a holder that elects to convert its notes in connection with such make-whole fundamental change or redemption. Upon conversion, the Company will settle conversions of the Notes due 2028 through payment or delivery, as the case may be, of cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company’s election. The Company may not redeem the Notes due 2028 prior to September 6, 2024. The Company may redeem for cash all or any portion of the Notes due 2028, at the Company’s election, on or after September 6, 2024, if the last reported sale price of the Company’s common stock has been greater than or equal to 130% of the conversion price then in effect for the Notes due 2028 ( i.e. $370.33, which is 130% of the current conversion price for the Notes due 2028) for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption. The redemption price will equal 100% of the principal amount of the Notes due 2028 to be redeemed, plus accrued and unpaid special interest, if any to, but excluding, the relevant redemption date. No sinking fund is provided for the Notes due 2028. The Notes due 2028 may be converted on any day prior to the close of business on the business day immediately preceding September 1, 2027, in multiples of $1,000 principal amount, at the option of the holder only under any of the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2021 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price for the Notes due 2028 ( i.e. , $370.33 which is 130% of the current conversion price for the Notes due 2028) on each applicable trading day; (2) during the five In accounting for the issuance of the Notes due 2028 on March 1, 2021, the Company separated the Notes due 2028 into liability and equity components. The carrying amount of the liability component of approximately $415.0 million was calculated by using a discount rate of 4.77%, which was the Company’s borrowing rate on the date of the issuance of the Notes due 2028 for a similar debt instrument without the conversion feature. The carrying amount of the equity component of approximately $160.0 million, representing the conversion option, was determined by deducting the fair value of the liability component from the par value of the Notes due 2028. The equity component of the Notes due 2028 was included in additional paid-in capital in the condensed consolidated balance sheet through December 31, 2021 and was not remeasured. The difference between the principal amount of the Notes due 2028 and the liability component (the “debt discount”) was amortized to interest expense using the effective interest method over the term of the Notes due 2028 through December 31, 2021. Through December 31, 2021, the Company separated the Notes due 2028 into liability and equity components which resulted in a tax basis difference associated with the liability component that represents a temporary difference. The Company recognized the deferred taxes of $40.1 million for the tax effect of that temporary difference as an adjustment to the equity component included in additional paid-in capital in the condensed consolidated balance sheet. Debt issuance costs for the issuance of the Notes due 2028 were approximately $9.1 million, consisting of initial purchasers' discount and other issuance costs. In accounting for the transaction costs, the Company allocated the total amount incurred to the liability and equity components using the same proportions as the proceeds from the Notes due 2028. Transaction costs attributable to the liability component were approximately $6.6 million, which were recorded as debt issuance cost (presented as contra debt in the condensed consolidated balance sheet) and are being amortized to interest expense over the term of the Notes due 2028. The transaction costs attributable to the equity component were approximately $2.5 million and were netted with the equity component in stockholders’ equity. Following the adoption ASU 2020-06, “Debt - Debt with Conversion and Other Options (subtopic 470-20)” (“ASU 2020-06”) as of January 1, 2022, the Company no longer records the conversion feature of Notes due 2028 in equity. Instead, the Company combined the previously separated equity component with the liability component, which together is now classified as debt, thereby eliminating the subsequent amortization of the debt discount as interest expense. Similarly, the portion of issuance costs previously allocated to equity was reclassified to the carrying amount of Notes due 2028 and is amortized over the remaining term of the notes. Accordingly, the Company recorded a net decrease to additional paid-in capital by approximately $117.3 million, net of tax to remove the equity component separately recorded for the conversion features associated with the Notes due 2028 and equity component associated with the issuance costs, an increase of approximately $141.3 million in the carrying value of Notes due 2028 to reflect the full principal amount of the Notes due 2028, net of issuance costs, a decrease to deferred tax liability of approximately $36.0 million, and a decrease to accumulated deficit of approximately $12.0 million, net of tax in the Company’s consolidated balance sheet with no impact on the Company’s consolidated statements of operations. As of June 30, 2023, the unamortized deferred issuance cost for the Notes due 2028 was $6.1 million on the condensed consolidated balance sheet. Notes due 2028 Hedge and Warrant Transactions In connection with the offering of the Notes due 2028, the Company entered into privately-negotiated convertible note hedge transactions (“Notes due 2028 Hedge”) pursuant to which the Company has the option to purchase a total of approximately 2.0 million shares of its common stock (subject to anti-dilution adjustments), which is the same number of shares initially issuable upon conversion of the Notes due 2028, at a price of $284.87 per share, which is the initial conversion price of the Notes due 2028. The total cost of the convertible note hedge transactions was approximately $161.6 million. The convertible note hedge transactions are expected generally to reduce potential dilution to the Company’s common stock upon any conversion of the Notes due 2028 and/or offset any cash payments the Company is required to make in excess of the principal amount of converted notes, as the case may be. Additionally, the Company separately entered into privately-negotiated warrant transactions (the “2028 Warrants”) whereby the Company sold warrants to acquire approximately 2.0 million shares of the Company’s common stock (subject to anti-dilution adjustments) at an initial strike price of $397.91 per share. The Company received aggregate proceeds of approximately $123.4 million from the sale of the 2028 Warrants. If the market value per share of the Company’s common stock, as measured under the 2028 Warrants, exceeds the strike price of the 2028 Warrants, the 2028 Warrants will have a dilutive effect on the Company’s earnings per share, unless the Company elects, subject to certain conditions, to settle the 2028 Warrants in cash. Taken together, the purchase of the Notes due 2028 Hedge and the sale of the 2028 Warrants are intended to reduce potential dilution from the conversion of the Notes due 2028 and to effectively increase the overall conversion price from $284.87 to $397.91 per share. The 2028 Warrants are only exercisable on the applicable expiration dates in accordance with the Notes due 2028 Hedge. Subject to the other terms of the 2028 Warrants, the first expiration date applicable to the Notes due 2028 Hedge is June 1, 2028, and the final expiration date applicable to the Notes due 2028 Hedge is July 27, 2028. Given that the transactions meet certain accounting criteria, the Notes due 2028 Hedge and the 2028 Warrants transactions are recorded in stockholders’ equity, and they are not accounted for as derivatives and are not remeasured each reporting period. Convertible Senior Notes due 2026 On March 1, 2021, the Company issued $575.0 million aggregate principal amount of 0.0% convertible senior notes due 2026 (the “Notes due 2026”). In addition, on March 12, 2021, the Company issued an additional $57.5 million aggregate principal amount of the Notes due 2026 pursuant to the initial purchasers’ full exercise of the over-allotment option for additional Notes due 2026. The Notes due 2026 will not bear regular interest, and the principal amount of the Notes due 2026 will not accrete. The Notes due 2026 are general unsecured obligations and are governed by an indenture between the Company and U.S. Bank National Association, as trustee. The Notes due 2026 will mature on March 1, 2026, unless repurchased earlier by the Company or converted at the option of the holders. The Company received approximately $623.0 million in net proceeds, after deducting the initial purchasers’ discount, from the issuance of the Notes due 2026. The initial conversion rate for the Notes due 2026 is 3.2523 shares of common stock per $1,000 principal amount of the Notes due 2026 (which represents an initial conversion price of approximately $307.47 per share). The conversion rate for the Notes due 2026 will be subject to adjustment upon the occurrence of certain specified events but will not be adjusted for accrued and unpaid interest. In addition, if a make-whole fundamental change or a redemption with respect to the Notes due 2026 occurs prior to the maturity date, under certain circumstances as specified in the relevant indenture, the Company will increase the conversion rate for the Notes due 2026 by a number of additional shares of the Company’s common stock for a holder that elects to convert its notes in connection with such make-whole fundamental change or redemption. Upon conversion, the Company will settle conversions of Notes due 2026 through payment or delivery, as the case may be, of cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company’s election. The Company may not redeem the Notes due 2026 prior to the September 6, 2023. The Company may redeem for cash all or any portion of the Notes due 2026, at the Company’s election, on or after September 6, 2023, if the last reported sale price of the Company’s common stock has been greater than or equal to 130% of the conversion price then in effect for the Notes due 2026 ( i.e ., $399.71, which is 130% of the current conversion price for the Notes due 2026) for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption. The redemption price will equal 100% of the principal amount of the Notes due 2026 to be redeemed, plus accrued and unpaid special interest, if any, to, but excluding, the relevant redemption date for the Notes due 2026. The redemption price will be increased as described in the relevant indentures by a number of additional shares of the Company in connection with such optional redemption by the Company. No sinking fund is provided for the Notes due 2026. The Notes due 2026 may be converted on any day prior to the close of business on the business day immediately preceding September 1, 2025, in multiples of $1,000 principal amount, at the option of the holder only under any of the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2021 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price of the Notes due 2026 ( i.e ., $399.71, which is 130% of the current conversion price for the Notes due 2026) on each applicable trading day; (2) during the five In accounting for the issuance of the Notes due 2026 on March 1, 2021, the Company separated the Notes due 2026 into liability and equity components. The carrying amount of the liability component of approximately $509.0 million was calculated by using a discount rate of 4.44%, which was the Company’s borrowing rate on the date of the issuance of the Notes due 2026 for a similar debt instrument without the conversion feature. The carrying amount of the equity component of approximately $123.5 million, representing the conversion option, was determined by deducting the fair value of the liability component from the par value of the Notes due 2026. The equity component of the Notes due 2026 was included in additional paid-in capital in the condensed consolidated balance sheet through December 31, 2021 and was not remeasured. The difference between the principal amount of the Notes due 2026 and the liability component (the “debt discount”) was amortized to interest expense using the effective interest method over the term of the Notes due 2026 through December 31, 2021. Through December 31, 2021, the Company separated the Notes due 2026 into liability and equity components which resulted in a tax basis difference associated with the liability component that represents a temporary difference. The Company recognized the deferred taxes of $31.0 million for the tax effect of that temporary difference as an adjustment to the equity component included in additional paid-in capital in the condensed consolidated balance sheet. Debt issuance costs for the issuance of the Notes due 2026 were approximately $10.0 million, consisting of initial purchasers' discount and other issuance costs. In accounting for the transaction costs, the Company allocated the total amount incurred to the liability and equity components using the same proportions as the proceeds from the Notes due 2026. Transaction costs attributable to the liability component were approximately $8.0 million, which were recorded as debt issuance cost (presented as contra debt in the condensed consolidated balance sheet) and are being amortized to interest expense over the term of the Notes due 2026. The transaction costs attributable to the equity component were approximately $2.0 million and were netted with the equity component in stockholders’ equity. Following the adoption of ASU 2020-06 as of January 1, 2022, the Company no longer records the conversion feature of Notes due 2026 in equity. Instead, the Company combined the previously separated equity component with the liability component, which together is now classified as debt, thereby eliminating the subsequent amortization of the debt discount. Similarly, the portion of issuance costs previously allocated to equity was reclassified to the carrying amount debt and is amortized over the remaining term of the notes. Accordingly, the Company recorded a net decrease to additional paid-in capital by approximately $90.6 million, net of tax to remove the equity component separately recorded for the conversion features associated with the Notes due 2026 and equity component associated with the issuance costs, an increase of approximately $103.2 million in the carrying value of its Notes due 2026 to reflect the full principal amount of the Notes due 2026 outstanding net of issuance costs, a decrease to deferred tax liability of approximately $26.3 million, and a decrease to accumulated deficit of approximately $13.7 million, net of tax in the Company’s consolidated balance sheet with no impact on the Company’s consolidated statements of operations. As of June 30, 2023, the unamortized deferred issuance cost for the Notes due 2026 was $5.3 million on the condensed consolidated balance sheet. Notes due 2026 Hedge and Warrant Transactions In connection with the offering of the Notes due 2026 (including in connection with the issuance of additional Notes due 2026 upon the initial purchasers’ exercise of their over-allotment option), the Company entered into privately-negotiated convertible note hedge transactions (the “Notes due 2026 Hedge”) pursuant to which the Company has the option to purchase a total of approximately 2.1 million shares of its common stock (subject to anti-dilution adjustments), which is the same number of shares initially issuable upon conversion of the Notes due 2026, at a price of $307.47 per share, which is the initial conversion price of the Notes due 2026. The total cost of the Notes due 2026 Hedge was approximately $124.6 million. The Notes due 2026 Hedge are expected generally to reduce potential dilution to the Company’s common stock upon any conversion of the Notes due 2026 and/or offset any cash payments the Company is required to make in excess of the principal amount of converted notes, as the case may be. Additionally, the Company separately entered into privately-negotiated warrant transactions, including in connection with the issuance of additional Notes due 2026 upon the initial purchasers’ exercise of their over-allotment option (the “2026 Warrants”), whereby the Company sold warrants to acquire approximately 2.1 million shares of the Company’s common stock (subject to anti-dilution adjustments) at an initial strike price of $397.91 per share. The Company received aggregate proceeds of approximately $97.4 million from the sale of the 2026 Warrants. If the market value per share of the Company’s common stock, as measured under the 2026 Warrants, exceeds the strike price of the 2026 Warrants, the 2026 Warrants will have a dilutive effect on the Company’s earnings per share, unless the Company elects, subject to certain conditions, to settle the 2026 Warrants in cash. Taken together, the purchase of the Notes due 2026 Hedge and the sale of the 2026 Warrants are intended to reduce potential dilution from the conversion of the Notes due 2026 and to effectively increase the overall conversion price from $307.47 to $397.91 per share. The 2026 Warrants are only exercisable on the applicable expiration dates in accordance with the 2026 Warrants. Subject to the other terms of the 2026 Warrants, the first expiration date applicable to the Warrants is June 1, 2026, and the final expiration date applicable to the 2026 Warrants is July 27, 2026. Given that the transactions meet certain accounting criteria, the Notes due 2026 Hedge and the 2026 Warrants transactions are recorded in stockholders’ equity, and they are not accounted for as derivatives and are not remeasured each reporting period. Convertible Senior Notes due 2025 On March 9, 2020, the Company issued $320.0 million aggregate principal amount of our 0.25% convertible senior notes due 2025 (the “Notes due 2025”). The Notes due 2025 are general unsecured obligations and bear interest at an annual rate of 0.25% per year, payable semi-annually on March 1 and September 1 of each year, beginning September 1, 2020. The Notes due 2025 are governed by an indenture between the Company and U.S. Bank National Association, as trustee. The Notes due 2025 will mature on March 1, 2025, unless earlier repurchased by the Company or converted at the option of the holders. The Company may not redeem the notes prior to the maturity date, and no sinking fund is provided for the notes. The Notes due 2025 may be converted, under certain circumstances as described below, based on an initial conversion rate of 12.2637 shares of common stock per $1,000 principal amount (which represents an initial conversion price of $81.54 per share). The conversion rate for the Notes due 2025 will be subject to adjustment upon the occurrence of certain specified events but will not be adjusted for accrued and unpaid interest. In addition, upon the occurrence of a make-whole fundamental change (as defined in the relevant indenture), the Company will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its notes in connection with such make-whole fundamental change. The Company received approximately $313.0 million in net proceeds, after deducting the initial purchasers’ discount, from the issuance of the Notes due 2025. The Notes due 2025 may be converted prior to the close of business on the business day immediately preceding September 1, 2024, in multiples of $1,000 principal amount, at the option of the holder only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2020 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five As of June 30, 2023 and December 31, 2022, the sale price of the Company’s common stock was greater than or equal to $106.00 (130% of the notes conversion price) for at least 20 trading days (whether consecutive or not) during a period of 30 consecutive trading days preceding the quarter-ended June 30, 2023 and December 31, 2022. As a result, the Notes due 2025 are convertible at the holders’ option through September 30, 2023. Accordingly, the Company classified the net carrying amount of the Notes due 2025 of $93.4 million and $90.9 million as Debt, current on the condensed consolidated balance sheet as of June 30, 2023 and December 31, 2022, respectively. From July 1, 2023 through the date this Quarterly Report on Form 10-Q is available to be issued, the Company has not received any requests for conversion of the Notes due 2025. For the period from March 9, 2020, the issuance date, through May 19, 2020, the number of authorized and unissued shares of the Company’s common stock that are not reserved for other purposes was less than the maximum number of underlying shares that would be required to settle the Notes due 2025 into equity. Accordingly, unless and until the Company had a number of authorized shares that were not issued or reserved for any other purpose that equaled or exceeded the maximum number of underlying shares (the “Share Reservation Condition”), the Company would have been required to pay to the converting holder in respect of each $1,000 principal amount of notes being converted solely in cash in an amount equal to the sum of the daily conversion values for each of the 20 consecutive trading days during the related observation period. However, following satisfaction of the Share Reservation Condition, the Company could settle conversions of notes through payment or delivery, as the case may be, of cash, shares of the Company’s common stock or a combination of cash and shares of its common stock, at the Company’s election. As further discussed below, the Company satisfied the Share Reservation Condition during May 2020. In accounting for the issuance of the Notes due 2025, on March 9, 2020, the conversion option of the Notes due 2025 was deemed an embedded derivative requiring bifurcation from the Notes due 2025 (the “host contract”) and separate accounting as an embedded derivative liability, 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. The proceeds from the Notes due 2025 were first allocated to the embedded derivative liability and the remaining proceeds were then allocated to the host contract. On March 9, 2020, the carrying amount of the embedded derivative liability of $68.7 million representing the conversion option was determined using the Binomial Lattice model and the remaining $251.3 million was allocated to the host contract. The difference between the principal amount of the Notes due 2025 and the fair value of the host contract (the “debt discount”) is amortized to interest expense using the effective interest method over the term of the Notes due 2025. On May 20, 2020, at the Company’s annual meeting of stockholders, the stockholders approved an amendment to the Amended and Restated Certificate of Incorporation to increase the number of authorized shares of the Company’s common stock, par value $0.00001 per share, from 150,000,000 shares to 200,000,000 shares (the “Amendment”). The Amendment became effective upon filing with the Secretary of State of Delaware on May 20, 2020. As a result, the Company satisfied the Share Reservation Condition. The Company may now settle the Notes due 2025 and warrants issued in conjunction with the Notes due 2025 (the “2025 Warrants”) through payment or delivery, as the case may be, of cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company’s election. Accordingly, on May 20, 2020, the embedded derivative liability was remeasured at a fair value of $116.3 million and was then reclassified to additional paid-in-capital in the condensed consolidated balance sheet in the second quarter of 2020 and is no longer remeasured as long as it continues to meet the conditions for equity classification. The Company recorded the change in the fair value of the embedded derivative in other expense, net in the condensed consolidated statement of operations during the year ended December 31, 2020. The Company separated the Notes due 2025 into liability and equity components which resulted in a tax basis difference associated with the liability component that represents a temporary difference. The Company recognized the deferred taxes of $0.2 million for the tax effect of that temporary difference as an adjustment to the equity component included in additional paid-in capital in the condensed consolidated balance sheet. Debt issuance costs for the issuance of the Notes due 2025 were approximately $7.6 million, consisting of initial purchasers' discount and other issuance costs. In accounting for the transaction costs, the Company allocated the total amount incurred to the Notes due 2025 host contract. Transaction costs were recorded as debt issuance cost (presented as contra debt in the condensed consolidated balance sheet) and are being amortized to interest expense over the term of the Notes due 2025. Partial repurchase of Notes due 2025 Concurrently with the offering of the Notes due 2026 and Notes due 2028, the Company entered into separately- and privately-negotiated transactions to repurchase approximately $217.7 million aggregate principal amount of the Notes due 2025. The Company paid $217.7 million in cash and issued approximately 1.67 million shares of its common stock to the holders of the repurchased notes with an aggregate fair value of $302.7 million, representing the conversion value in excess of the principal amount of the Notes due 2025, which were fully offset by shares received from the Company’s settlement of the associated note hedging arrangements discussed below. The total amount of $217.7 million paid to partially settle the repurchases of the Notes due 2025 was allocated between the liability and equity components of the amount extinguished by determining the fair value of the liability component immediately prior to the note repurchases and allocating that portion of the conversion price to the liability component in the amount of $184.5 million. The residual of the conversion price of $4.3 million of the repurchased Notes due 2025, net of inducement loss of $37.5 million for additional shares issued, was allocated to the equity component of the repurchased Notes due 2025 as an increase of additional paid-in capital. The fair value of the note settlement for such repurchases was calculated using a discount rate of 4.35%, representing an estimate of the Company's borrowing rate at the date of repurchase with a remaining expected life of approximately 4.1 years. As part of the settlement of the repurchase of the Notes due 2025, the Company wrote-off the $38.5 million unamortized debt discount and $4.1 million debt issuance cost apportioned to the principal amount of Notes due 2025 repurchased. The Company recorded a loss on partial settlement of the repurchased Notes due 2025 of $9.4 million in Other income (expense), net in the three months ended March 31, 2021, representing the difference between the consideration attributed to the liability component and the sum of the net carrying amount of the liability component and unamortized debt issuance costs. Further, the Company also recorded loss on inducement of $37.5 million in Other income (expense), net in the three months ended March 31, 2021, representing the difference between the fair value of the shares that would have been issued under the original conversion terms with respect to the repurchased Notes due 2025. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Operating Leases The Company leases office facilities under noncancellable operating leases that expire on various dates through 2032, some of which may include options to extend the leases for up to 12 years. The components of lease expense are presented as follows: Three Months Ended Six Months Ended 2023 2022 2023 2022 (In thousands) Operating lease costs $ 2,416 $ 2,052 $ 5,008 $ 3,989 The components of lease liabilities are presented as follows: June 30, December 31, (In thousands except years and percentage data) Operating lease liabilities, current (Accrued liabilities) $ 5,773 $ 5,371 Operating lease liabilities, non-current (Other liabilities) 20,311 19,077 Total operating lease liabilities $ 26,084 $ 24,448 Supplemental lease information: Weighted average remaining lease term 5.6 years 5.3 years Weighted average discount rate 6.7% 6.5% Supplemental cash flow and other information related to operating leases, were as follows: Three Months Ended Six Months Ended 2023 2022 2023 2022 (In thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,788 $ 1,325 $ 3,490 $ 2,843 Non-cash investing activities: Lease liabilities arising from obtaining right-of-use assets $ 2,852 $ — $ 4,368 $ 6,742 Undiscounted cash flows of operating lease liabilities as of June 30, 2023 were as follows: Lease Amounts (In thousands) Year: 2023 (remaining six months) $ 3,752 2024 6,691 2025 5,940 2026 4,252 2027 2,882 Thereafter 7,857 Total lease payments 31,374 Less: imputed lease interest (5,290) Total lease liabilities $ 26,084 Purchase Obligations The Company has contractual obligations related to component inventory that its contract manufacturers procure on its behalf in accordance with its production forecast as well as other inventory related purchase commitments. As of June 30, 2023, these purchase obligations totaled approximately $633.4 million. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS' EQUITY In May 2021, the board of directors authorized a share repurchase program (the “2021 Repurchase Program”) pursuant to which the Company was authorized to repurchase up to $500.0 million of the Company’s common stock, from time to time in the open market or through structured repurchase agreements with third parties, $200.0 million of which was remaining as of March 31, 2023. During the three and six months ended June 30, 2023, the Company repurchased and subsequently retired 1,254,474 shares of common stock from the open market at an average cost of $159.43 per share for a total of $200.0 million. Of the 1,254,474 shares repurchased, 833,517 shares were retired as of June 30, 2023 and recorded as “Repurchase of common stock” in the accompanying condensed consolidated statements of changes in stockholders’ equity. The remaining 420,957 shares repurchased were retired in July 2023 and recorded as “Treasury stock, at cost” in the accompanying consolidated statements of changes in stockholders’ equity. The full |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Stock-based Compensation Expense Stock-based compensation expense for all stock-based awards, which includes shares purchased under the Company’s 2011 Employee Stock Purchase Plan (“ESPP”), restricted stock units (“RSUs”) and performance stock units (“PSUs”), expected to vest is measured at fair value on the date of grant and recognized ratably over the requisite service period. In addition, as part of certain business acquisitions, the Company is obligated to issue shares of common stock of the Company as payment subject to achievement of certain targets. For such payments, the Company records stock-based compensation classified as post-combination expense recognized ratably over the measurement period presuming the targets will be met. The following table summarizes the components of total stock-based compensation expense included in the condensed consolidated statements of operations for the periods presented: Three Months Ended Six Months Ended 2023 2022 2023 2022 (In thousands) Cost of revenues $ 3,398 $ 3,131 $ 7,067 $ 5,638 Research and development 23,765 16,266 45,243 29,995 Sales and marketing 14,515 22,176 35,934 35,233 General and administrative 12,488 11,491 25,577 29,995 Total $ 54,166 $ 53,064 $ 113,821 $ 100,861 The following table summarizes the various types of stock-based compensation expense for the periods presented: Three Months Ended Six Months Ended 2023 2022 2023 2022 (In thousands) Stock options, RSUs and PSUs $ 51,852 $ 47,228 $ 108,809 $ 91,340 Employee stock purchase plan 1,803 1,014 3,843 2,396 Post combination expense accrual (Accrued liabilities) 511 4,822 1,169 7,125 Total $ 54,166 $ 53,064 $ 113,821 $ 100,861 As of June 30, 2023, there was approximately $407.6 million of total unrecognized stock-based compensation expense related to unvested equity awards, which are expected to be recognized over a weighted-average period of 2.8 years. Equity Awards Activity Stock Options The following table summarizes stock option activity: Number of Weighted- Weighted- Aggregate (1) (In thousands) (Years) (In thousands) Outstanding at December 31, 2022 1,464 $ 1.83 Granted — — Exercised (92) 1.64 $ 15,375 Canceled — — Outstanding at June 30, 2023 1,372 $ 1.85 1.5 $ 227,200 Vested and expected to vest at June 30, 2023 1,372 $ 1.85 1.5 $ 227,200 Exercisable at June 30, 2023 1,372 $ 1.85 1.5 $ 227,200 (1) The intrinsic value of options exercised is based upon the value of the Company’s stock at exercise. The intrinsic value of options outstanding, vested and expected to vest, and exercisable as of June 30, 2023 is based on the closing price of the last trading day during the period ended June 30, 2023. The Company’s stock fair value used in this computation was $167.48 per share. The following table summarizes information about stock options outstanding at June 30, 2023: Options Outstanding Options Exercisable Range of Exercise Prices Number of Weighted- Weighted- Number of Weighted- (In thousands) (Years) (In thousands) $0.70 —– $1.11 422 2.0 $ 0.89 422 $ 0.89 $1.29 —– $1.29 858 1.2 1.29 858 1.29 $1.31 —– $5.53 65 1.7 4.43 65 4.43 $14.58 —– $14.58 20 2.8 14.58 20 14.58 $64.17 —– $64.17 7 3.8 64.17 7 64.17 Total 1,372 1.5 $ 1.85 1,372 $ 1.85 Restricted Stock Units The following table summarizes RSU activity: Number of Weighted- Weighted- Aggregate (1) (In thousands) (Years) (In thousands) Outstanding at December 31, 2022 2,253 $ 181.01 Granted 423 214.80 Vested (691) 142.41 $ 140,740 Canceled (147) 176.87 Outstanding at June 30, 2023 1,838 $ 203.65 1.3 $ 307,877 Expected to vest at June 30, 2023 1,838 $ 203.65 1.3 $ 307,865 (1) The intrinsic value of RSUs vested is based upon the value of the Company’s stock when vested. The intrinsic value of RSUs outstanding and expected to vest as of June 30, 2023 is based on the closing price of the last trading day during the period ended June 30, 2023. The Company’s stock fair value used in this computation was $167.48 per share. Performance Stock Units The following summarizes PSU activity: Number of Weighted- Weighted- Aggregate (1) (In thousands) (Years) (In thousands) Outstanding at December 31, 2022 376 $ 197.82 Granted 383 240.72 Vested (375) 195.81 $ 79,438 Canceled (19) 227.35 Outstanding at June 30, 2023 365 $ 243.30 1.7 $ 61,087 Expected to vest at June 30, 2023 365 $ 243.30 1.7 $ 61,087 (1) The intrinsic value of PSUs vested is based upon the value of the Company’s stock when vested. The intrinsic value of PSUs outstanding and expected to vest as of June 30, 2023 is based on the closing price of the last trading day during the period ended June 30, 2023. The Company’s stock fair value used in this computation was $167.48 per share. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES For the three months ended June 30, 2023 and 2022, the Company’s income tax provision totaled $27.4 million and $15.2 million, respectively, on a net income before income taxes of $184.6 million and $92.2 million, respectively. For the six months ended June 30, 2023 and 2022, the Company’s income tax provision totaled $59.5 million and $20.8 million, respectively, on a net income before income taxes of $363.6 million and $149.6 million, respectively. For both the three and six months ended June 30, 2023 and 2022, the income tax provision was calculated using the annualized effective tax rate method and was primarily due to projected tax expense in the U.S. and foreign jurisdictions that are profitable, partially offset by a tax deduction from employee stock compensation reported as a discrete event. For the three and six months ended June 30, 2023 and 2022, in accordance with FASB guidance for interim reporting of income tax, the Company has computed its provision for income taxes based on a projected annual effective tax rate while excluding loss jurisdictions which cannot be benefited. |
NET INCOME PER SHARE
NET INCOME PER SHARE | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
NET INCOME PER SHARE | NET INCOME PER SHARE Basic net income per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted net income per share is computed in a similar manner, but it also includes the effect of potential common shares outstanding during the period, when dilutive. Potential common shares include stock options, RSUs, PSUs, shares to be purchased under the Company’s ESPP, the Notes due 2023, Notes due 2025, Notes due 2026, Notes due 2028, and the 2025 Warrants. Refer to Note 8 . “Debt,” for additional information about the Company’s outstanding debt. The following table presents the computation of basic and diluted net income per share for the periods presented: Three Months Ended Six Months Ended 2023 2022 2023 2022 (In thousands, except per share data) Numerator: Net income $ 157,191 $ 76,976 $ 304,064 $ 128,797 Convertible senior notes interest and financing costs, net 1,651 662 3,255 1,304 Adjusted net income $ 158,842 $ 77,638 $ 307,319 $ 130,101 Denominator: Shares used in basic per share amounts: Weighted average common shares outstanding 136,607 135,196 136,650 134,768 Shares used in diluted per share amounts: Weighted average common shares outstanding used for basic calculation 136,607 135,196 136,650 134,768 Effect of dilutive securities: Employee stock-based awards 1,760 3,042 2,155 3,399 Notes due 2023 900 900 900 900 Notes due 2025 1,253 — 1,253 — 2025 Warrants 503 512 575 460 Notes due 2026 2,057 2,057 2,057 2,057 Notes due 2028 2,018 2,018 2,018 2,018 Weighted average common shares outstanding for diluted calculation 145,098 143,725 145,608 143,602 Basic and diluted net income per share Net income per share, basic $ 1.15 $ 0.57 $ 2.23 $ 0.96 Net income per share, diluted $ 1.09 $ 0.54 $ 2.11 $ 0.91 Diluted earnings per share for the three and six months ended June 30, 2023 and 2022 includes the dilutive effect of potentially dilutive common shares by application of the treasury stock method for stock options, RSUs, PSUs, ESPP, the 2025 Warrants, the 2026 Warrants, the 2028 Warrants and includes potentially dilutive common shares by application of the if-converted method for the Notes due 2025, Notes due 2026 and Notes due 2028. To the extent these potential common shares are antidilutive, they are excluded from the calculation of diluted net income per share. Further, the Company under the relevant sections of the indentures, irrevocably may elect to settle principal in cash and any excess in cash or shares of the Company’s common stock for its Notes due 2025, Notes due 2026 and Notes due 2028. If and when the Company makes such election, there will be no adjustment to the net income and the Company will use the average share price for the period to determine the potential number of shares to be issued based upon assumed conversion to be included in the diluted share count. The following outstanding shares of common stock equivalents were excluded from the calculation of the diluted net income per share attributable to common stockholders because their effect would have been antidilutive: Three Months Ended Six Months Ended 2023 2022 2023 2022 (In thousands) Employee stock-based awards 1,226 572 1,006 598 2028 Warrants 2,477 2,425 2,046 2,735 2026 Warrants 2,524 2,471 2,085 2,788 Notes due 2025 — 1,253 — 1,253 Total 6,227 6,721 5,137 7,374 |
RELATED PARTY
RELATED PARTY | 6 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY | RELATED PARTY In 2018, a member of the Company’s board of directors and one of its principal stockholders, Thurman John Rodgers, purchased $5.0 million aggregate principal amount of the Notes due 2023 in a concurrent private placement. As of both June 30, 2023 and December 31, 2022, $5.0 million aggregate principal amount of the Notes due 2023 were outstanding. Refer to Note 8 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Investment in a privately-held company In July 2023, the Company invested $15.0 million in cash in a privately-held company. The investment does not require consolidation into the Company’s financial statements because the privately-held company is not a variable interest entity and the Company does not hold a majority voting interest. Share repurchase program |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net income | $ 157,191 | $ 76,976 | $ 304,064 | $ 128,797 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2023 | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | During the three months ended June 30, 2023, Mandy Yang, our Vice President and Chief Financial Officer, and an officer for purposes of Section 16 of the Exchange Act, terminated her equity trading plan put in place in accordance with Rule 10b5-1(c)(1) under the Exchange Act. Ms. Yang’s trading plan was terminated on May 2, 2023 during an open insider trading window. An equity trading plan is a written document that preestablishes the amounts, prices and dates (or formula for determining the amounts, prices and dates) of future purchases or sales of our stock, including sales of shares acquired under our employee and director equity plans. |
Mandy Yang [Member] | |
Trading Arrangements, by Individual | |
Name | Mandy Yang |
Title | Vice President and Chief Financial Officer, and an officer |
Rule 10b5-1 Arrangement Terminated | false |
DESCRIPTION OF BUSINESS AND B_2
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying condensed consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States (“GAAP”). The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Unaudited Interim Financial Information These accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial reporting. In the opinion of management, these unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring items, considered necessary to present fairly the Company’s financial condition, results of operations, comprehensive income, stockholders’ equity and cash flows for the interim periods indicated. The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the operating results for the full year. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Significant estimates and assumptions reflected in the financial statements include revenue recognition, allowance for doubtful accounts, stock-based compensation, deferred compensation arrangements, inventory valuation, accrued warranty obligations, fair value of investments, debt derivatives, convertible notes and contingent consideration, fair value of acquired intangible assets and goodwill, useful lives of acquired intangible assets and property and equipment, incremental borrowing rate for right-of-use assets and lease liability. These estimates are based on information available as of the date of the financial statements; therefore, actual results could differ materially from those estimates due to risks and uncertainties, including uncertainty in the ongoing semiconductor supply and logistics constraints. |
Treasury Stock, at Cost | Treasury Stock, at Cost The Company accounts for treasury stock at cost per Accounting Standards Codification (“ASC”) 505. This results in a reduction of stockholders’ equity on the Company’s condensed consolidated balance sheet and on the |
Government Grants | Government Grants Government grants represent benefits provided by federal, state, or local governments that are not subject to the scope of ASC 740. The Company recognizes a grant when it has reasonable assurance that it will comply with the grant’s conditions and that the grant will be received. Government grants that are not related to long-lived assets are considered income-based grants, which are recognized as a reduction to the related cost of activities that generated the benefit. In August 2022, the U.S. enacted the IRA , which includes extension of the investment tax credit as well as a new advanced manufacturing production tax credit (“AMPTC”), to incentivize clean energy component sourcing and production, including for the production of microinverters. The IRA provides for an AMPTC on microinverters of 11 cents per alternating current watt basis. The AMPTC on microinverters decreases by 25% each year beginning in 2030 and ending after 2032. The Company recognized the benefit of credits from AMPTC as a reduction to cost of revenues in the condensed consolidated statement of operations for the microinverters manufactured in the United States and sold to customers in the three and six months ended June 30, 2023. Such credit is also reflected as a reduction of income tax payable on the Company’s condensed consolidated balance sheets within accrued liabilities. |
Recently Adopted Accounting Pronouncement | Recently Adopted Accounting Pronouncements In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2021-08, "Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers" (“ASU 2021-08”). ASU 2021-08 requires an acquirer to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, “Revenue from Contracts with Customers,” as if it had originated the contracts. This should generally result in an acquirer recognizing and measuring the acquired contract assets and contract liabilities consistent with how they were recognized and measured in the acquiree’s financial statements. The Company adopted ASU 2021-08 effective January 1, 2023. The adoption of ASU 2021-08 did not have an impact on the Company’s condensed consolidated financial statements. |
Fair Value Measurement | The accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An asset’s or liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value: • Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities that the Company is able to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of such assets or liabilities do not entail a significant degree of judgment. • Level 2 - Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. |
Earnings Per Share | Basic net income per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted net income per share is computed in a similar manner, but it also includes the effect of potential common shares outstanding during the period, when dilutive. Potential common shares include stock options, RSUs, PSUs, shares to be purchased under the Company’s ESPP, the Notes due 2023, Notes due 2025, Notes due 2026, Notes due 2028, and the 2025 Warrants. Refer to Note 8 . “Debt,” for additional information about the Company’s outstanding debt. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Revenue Disaggregation | Disaggregated revenue by primary geographical market and timing of revenue recognition for the Company’s single product line are as follows: Three Months Ended Six Months Ended 2023 2022 2023 2022 (In thousands) Primary geographical markets: U.S. $ 417,582 $ 422,628 $ 890,543 $ 792,120 International 293,536 107,568 546,591 179,368 Total $ 711,118 $ 530,196 $ 1,437,134 $ 971,488 Timing of revenue recognition: Products delivered at a point in time $ 684,122 $ 511,865 $ 1,385,774 $ 936,014 Products and services delivered over time 26,996 18,331 51,360 35,474 Total $ 711,118 $ 530,196 $ 1,437,134 $ 971,488 |
Summary of Contract Assets and Contract Liabilities, and Changes in Balances from Contracts with Customers | Receivables, and contract assets and contract liabilities from contracts with customers, are as follows: June 30, December 31, (In thousands) Receivables $ 520,306 $ 440,896 Short-term contract assets (Prepaid expenses and other assets) 38,073 32,130 Long-term contract assets (Other assets) 122,982 100,991 Short-term contract liabilities (Deferred revenues, current) 109,176 90,747 Long-term contract liabilities (Deferred revenues, non-current) 354,296 281,613 Significant changes in the balances of contract assets (prepaid expenses and other assets) as of June 30, 2023 are as follows (in thousands): Contract Assets Contract Assets, beginning of period $ 133,121 Amount recognized (17,658) Increased due to shipments 45,592 Contract Assets, end of period $ 161,055 Significant changes in the balances of contract liabilities (deferred revenues) as of June 30, 2023 are as follows (in thousands): Contract Liabilities Contract Liabilities, beginning of period $ 372,360 Revenue recognized (51,360) Increased due to billings 142,472 Contract Liabilities, end of period $ 463,472 |
Summary of Estimated Revenue Expected to be Recognized in Future Periods | Estimated revenue expected to be recognized in future periods related to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period are as follows: June 30, (In thousands) Fiscal year: 2023 (remaining six months) $ 55,492 2024 105,360 2025 97,787 2026 81,815 2027 62,174 Thereafter 60,844 Total $ 463,472 |
OTHER FINANCIAL INFORMATION (Ta
OTHER FINANCIAL INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Inventory | Inventory consists of the following: June 30, December 31, (In thousands) Raw materials $ 30,993 $ 34,978 Finished goods 135,118 114,730 Total inventory $ 166,111 $ 149,708 |
Schedule of Accrued Liabilities | Accrued liabilities consist of the following: June 30, December 31, (In thousands) Customer rebates and sales incentives $ 219,814 $ 153,916 Income tax payable 81,271 16,146 VAT payable 35,511 19,852 Liability due to supply agreements 35,368 17,341 Freight 18,653 35,011 Salaries, commissions, incentive compensation and benefits 14,575 18,009 Operating lease liabilities, current 5,773 5,371 Post combination expense accrual — 9,138 Liabilities related to restructuring activities 186 714 Other 14,134 20,441 Total accrued liabilities $ 425,285 $ 295,939 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The Company’s goodwill as of June 30, 2023 and December 31, 2022 were as follows: Goodwill June 30, December 31, (In thousands) Goodwill, beginning of period $ 213,559 $ 181,254 Goodwill acquired — 33,354 Currency translation adjustment 731 (1,049) Goodwill, end of period $ 214,290 $ 213,559 |
Schedule of Acquired Indefinite-lived Intangible Assets by Major Class | The Company’s purchased intangible assets as of June 30, 2023 and December 31, 2022 were as follows: June 30, 2023 December 31, 2022 Gross Additions Accumulated Amortization Net Gross Additions Accumulated Amortization Net (In thousands) Intangible assets: Other indefinite-lived intangibles $ 286 $ — $ — $ 286 $ 286 $ — $ — $ 286 Intangible assets with finite lives: Developed technology 51,044 — (22,166) 28,878 38,650 12,394 (17,260) 33,784 Customer relationships 55,106 — (24,607) 30,499 41,021 14,085 (19,702) 35,404 Trade names 37,700 — (11,403) 26,297 37,700 — (7,633) 30,067 Order backlog 600 — (600) — 600 — (600) — Total purchased intangible assets $ 144,736 $ — $ (58,776) $ 85,960 $ 118,257 $ 26,479 $ (45,195) $ 99,541 |
Schedule of Acquired Finite-Lived Intangible Assets by Major Class | The Company’s purchased intangible assets as of June 30, 2023 and December 31, 2022 were as follows: June 30, 2023 December 31, 2022 Gross Additions Accumulated Amortization Net Gross Additions Accumulated Amortization Net (In thousands) Intangible assets: Other indefinite-lived intangibles $ 286 $ — $ — $ 286 $ 286 $ — $ — $ 286 Intangible assets with finite lives: Developed technology 51,044 — (22,166) 28,878 38,650 12,394 (17,260) 33,784 Customer relationships 55,106 — (24,607) 30,499 41,021 14,085 (19,702) 35,404 Trade names 37,700 — (11,403) 26,297 37,700 — (7,633) 30,067 Order backlog 600 — (600) — 600 — (600) — Total purchased intangible assets $ 144,736 $ — $ (58,776) $ 85,960 $ 118,257 $ 26,479 $ (45,195) $ 99,541 |
Schedule of Amortization Expense | Amortization expense related to finite-lived intangible assets were as follows: Three Months Ended Six Months Ended 2023 2022 2023 2022 (In thousands) Developed technology $ 2,455 $ 2,010 $ 4,910 $ 3,876 Customer relationships 2,454 2,067 4,908 3,825 Trade names 1,885 1,885 3,770 3,770 Order backlog — 323 — 600 Total amortization expense $ 6,794 $ 6,285 $ 13,588 $ 12,071 The expected future amortization expense of intangible assets as of June 30, 2023 is presented below (in thousands): June 30, Fiscal year: 2023 (remaining six months) $ 13,585 2024 24,538 2025 23,032 2026 19,473 2027 5,046 Total $ 85,674 |
CASH EQUIVALENTS AND MARKETAB_2
CASH EQUIVALENTS AND MARKETABLE SECURITIES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Cash and Cash Equivalents [Abstract] | |
Debt Securities, Available-for-sale | The cash equivalents and marketable securities consist of the following: As of June 30, 2023 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash Equivalents Marketable Securities (In thousands) Money market funds $ 134,398 $ — $ — $ 134,398 $ 134,398 $ — Certificates of deposit 49,544 3 (76) 49,471 — 49,471 Commercial paper 119,203 — (306) 118,897 — 118,897 Corporate notes and bonds 339,972 29 (3,148) 336,853 — 336,853 U.S. Treasuries 354,112 35 (398) 353,749 — 353,749 U.S. Government agency securities 666,104 166 (3,424) 662,846 — 662,846 Total $ 1,663,333 $ 233 $ (7,352) $ 1,656,214 $ 134,398 $ 1,521,816 As of December 31, 2022 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash Equivalents Marketable Securities (In thousands) Money market funds $ 165,407 $ — $ — $ 165,407 $ 165,407 $ — Certificates of deposit 31,874 13 (130) 31,757 — 31,757 Commercial paper 148,832 10 (171) 148,671 50,764 97,907 Corporate notes and bonds 168,887 2 (3,313) 165,576 — 165,576 U.S. Treasuries 301,349 8 (132) 301,225 4,094 297,131 U.S. Government agency securities 554,035 — (6,807) 547,228 — 547,228 Total $ 1,370,384 $ 33 $ (10,553) $ 1,359,864 $ 220,265 $ 1,139,599 |
Investments Classified by Contractual Maturity Date | The following table summarizes the contractual maturities of the Company’s cash equivalents and marketable securities as of June 30, 2023: Amortized Cost Fair Value (In thousands) Due within one year $ 1,357,928 $ 1,352,679 Due within one to three years 305,405 303,535 Total $ 1,663,333 $ 1,656,214 |
WARRANTY OBLIGATIONS (Tables)
WARRANTY OBLIGATIONS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Product Warranties Disclosures [Abstract] | |
Summary of Warranty Activities | The Company’s warranty obligation activities were as follows: Three Months Ended Six Months Ended 2023 2022 2023 2022 (In thousands) Warranty obligations, beginning of period $ 146,034 $ 83,579 $ 131,446 $ 73,377 Accruals for warranties issued during period 16,344 11,311 32,515 20,221 Changes in estimates (10,363) 17,063 (6,635) 21,975 Settlements (5,092) (6,590) (13,986) (12,471) Increase due to accretion expense 3,907 1,828 7,452 3,343 Change in discount rate (1) 31,797 (9,609) 31,797 (9,609) Other (1,912) (1,031) (1,874) (285) Warranty obligations, end of period 180,715 96,551 180,715 96,551 Less: warranty obligations, current (36,686) (29,197) (36,686) (29,197) Warranty obligations, non-current $ 144,029 $ 67,354 $ 144,029 $ 67,354 (1) See Note 7, “Fair Value Measurements” for additional information about the monetary impact for change in the discount rate. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table presents assets and liabilities measured at fair value on a recurring basis using the above input categories: June 30, 2023 December 31, 2022 (In thousands) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets: Cash and cash equivalents: Money market funds $ 134,398 $ — $ — $ 165,407 $ — $ — Commercial paper — — — — 50,764 — U.S. Treasuries — — — — 4,094 — Marketable securities: Certificates of deposit — 49,471 — — 31,757 — Commercial paper — 118,897 — — 97,907 — Corporate notes and bonds — 336,853 — — 165,576 — U.S. Treasuries — 353,749 — — 297,131 — U.S. Government agency securities — 662,846 — — 547,228 — Other assets Investments in debt securities — — 60,275 — — 56,777 Total assets measured at fair value $ 134,398 $ 1,521,816 $ 60,275 $ 165,407 $ 1,194,457 $ 56,777 Liabilities: Warranty obligations Current $ — $ — $ 27,282 $ — $ — $ 30,740 Non-current — — 123,258 — — 75,749 Total warranty obligations measured at fair value — — 150,540 — — 106,489 Total liabilities measured at fair value $ — $ — $ 150,540 $ — $ — $ 106,489 |
Summary of Significant Unobservable Inputs used in the Fair Value Measurement of Assets Designated as Level 3 | The changes in the balance in investments in debt securities during the period were as follows: Three Months Ended Six Months Ended 2023 2022 2023 2022 (In thousands) Balance at beginning of period $ 58,521 $ 39,926 $ 56,777 $ 41,042 Fair value adjustments included in other income (expense), net 1,754 987 3,498 (129) Balance at end of period $ 60,275 $ 40,913 $ 60,275 $ 40,913 |
Schedule of Changes in Nonfinancial Liabilities Related to Warrant Obligations Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs | The following table provides information regarding changes in nonfinancial liabilities related to the Company’s warranty obligations measured at fair value on a recurring basis using significant unobservable inputs designated as Level 3 for the periods indicated: Three Months Ended Six Months Ended 2023 2022 2023 2022 (In thousands) Balance at beginning of period $ 119,508 $ 61,586 $ 106,489 $ 51,007 Accruals for warranties issued during period 16,344 11,120 32,369 19,890 Changes in estimates (12,925) 14,692 (11,680) 18,591 Settlements (6,179) (4,668) (14,013) (8,724) Increase due to accretion expense 3,907 1,828 7,452 3,343 Change in discount rate 31,797 (9,609) 31,797 (9,609) Other (1,912) (1,026) (1,874) (575) Balance at end of period $ 150,540 $ 73,923 $ 150,540 $ 73,923 |
Summary of Significant Unobservable Inputs used in the Fair Value Measurement of Liabilities Designated as Level 3 | As of June 30, 2023 and December 31, 2022, the significant unobservable inputs used in the fair value measurement of the Company’s liabilities designated as Level 3 were as follows, of which the monetary impact for change in discount rate is captured in “Change in discount rate” in the table above: Percent Used (Weighted Average) Item Measured at Fair Value Valuation Technique Description of Significant Unobservable Input June 30, December 31, Warranty obligations for products sold since January 1, 2014 Discounted cash flows Profit element and risk premium 17% 16% Credit-adjusted risk-free rate 8% 13% |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The following table provides information regarding the Company’s debt: June 30, December 31, (In thousands) Convertible notes Notes due 2028 $ 575,000 $ 575,000 Less: unamortized debt issuance costs (6,062) (6,705) Carrying amount of Notes due 2028 568,938 568,295 Notes due 2026 632,500 632,500 Less: unamortized debt issuance costs (5,320) (6,307) Carrying amount of Notes due 2026 627,180 626,193 Notes due 2025 102,175 102,175 Less: unamortized debt discount (7,979) (10,229) Less: unamortized debt issuance costs (813) (1,054) Carrying amount of Notes due 2025 93,383 90,892 Notes due 2023 5,000 5,000 Less: unamortized issuance costs (4) (23) Carrying amount of Notes due 2023 4,996 4,977 Total carrying amount of debt 1,294,497 1,290,357 Less: debt, current (93,383) (90,892) Debt, non-current $ 1,201,114 $ 1,199,465 The following table presents the total amount of interest cost recognized in the condensed consolidated statement of operations relating to the Notes: Three Months Ended Six Months Ended 2023 2022 2023 2022 (In thousands) Notes due 2028 Amortization of debt issuance costs $ 327 $ 327 $ 643 $ 643 Total interest cost recognized $ 327 $ 327 $ 643 $ 643 Notes due 2026 Amortization of debt issuance costs $ 502 $ 502 $ 987 $ 987 Total interest cost recognized $ 502 $ 502 $ 987 $ 987 Notes due 2025 Contractual interest expense $ 64 $ 64 $ 128 $ 128 Amortization of debt discount 1,144 1,088 2,249 2,137 Amortization of debt issuance costs 123 123 241 241 Total interest cost recognized $ 1,331 $ 1,275 $ 2,618 $ 2,506 Notes due 2023 Contractual interest expense $ 50 $ 50 $ 100 $ 100 Amortization of debt issuance costs 10 10 20 20 Total interest costs recognized $ 60 $ 60 $ 120 $ 120 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Components of Lease | The components of lease expense are presented as follows: Three Months Ended Six Months Ended 2023 2022 2023 2022 (In thousands) Operating lease costs $ 2,416 $ 2,052 $ 5,008 $ 3,989 The components of lease liabilities are presented as follows: June 30, December 31, (In thousands except years and percentage data) Operating lease liabilities, current (Accrued liabilities) $ 5,773 $ 5,371 Operating lease liabilities, non-current (Other liabilities) 20,311 19,077 Total operating lease liabilities $ 26,084 $ 24,448 Supplemental lease information: Weighted average remaining lease term 5.6 years 5.3 years Weighted average discount rate 6.7% 6.5% Supplemental cash flow and other information related to operating leases, were as follows: Three Months Ended Six Months Ended 2023 2022 2023 2022 (In thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,788 $ 1,325 $ 3,490 $ 2,843 Non-cash investing activities: Lease liabilities arising from obtaining right-of-use assets $ 2,852 $ — $ 4,368 $ 6,742 |
Schedule of Future Minimum Rental Payments for Operating Leases | Undiscounted cash flows of operating lease liabilities as of June 30, 2023 were as follows: Lease Amounts (In thousands) Year: 2023 (remaining six months) $ 3,752 2024 6,691 2025 5,940 2026 4,252 2027 2,882 Thereafter 7,857 Total lease payments 31,374 Less: imputed lease interest (5,290) Total lease liabilities $ 26,084 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of the Components of Total Stock-Based Compensation Expense | The following table summarizes the components of total stock-based compensation expense included in the condensed consolidated statements of operations for the periods presented: Three Months Ended Six Months Ended 2023 2022 2023 2022 (In thousands) Cost of revenues $ 3,398 $ 3,131 $ 7,067 $ 5,638 Research and development 23,765 16,266 45,243 29,995 Sales and marketing 14,515 22,176 35,934 35,233 General and administrative 12,488 11,491 25,577 29,995 Total $ 54,166 $ 53,064 $ 113,821 $ 100,861 |
Summary of Stock-Based Compensation Associated with Each Type of Award | The following table summarizes the various types of stock-based compensation expense for the periods presented: Three Months Ended Six Months Ended 2023 2022 2023 2022 (In thousands) Stock options, RSUs and PSUs $ 51,852 $ 47,228 $ 108,809 $ 91,340 Employee stock purchase plan 1,803 1,014 3,843 2,396 Post combination expense accrual (Accrued liabilities) 511 4,822 1,169 7,125 Total $ 54,166 $ 53,064 $ 113,821 $ 100,861 |
Summary of Stock Option Activity | The following table summarizes stock option activity: Number of Weighted- Weighted- Aggregate (1) (In thousands) (Years) (In thousands) Outstanding at December 31, 2022 1,464 $ 1.83 Granted — — Exercised (92) 1.64 $ 15,375 Canceled — — Outstanding at June 30, 2023 1,372 $ 1.85 1.5 $ 227,200 Vested and expected to vest at June 30, 2023 1,372 $ 1.85 1.5 $ 227,200 Exercisable at June 30, 2023 1,372 $ 1.85 1.5 $ 227,200 (1) The intrinsic value of options exercised is based upon the value of the Company’s stock at exercise. The intrinsic value of options outstanding, vested and expected to vest, and exercisable as of June 30, 2023 is based on the closing price of the last trading day during the period ended June 30, 2023. The Company’s stock fair value used in this computation was $167.48 per share. |
Summary of Stock Option Outstanding | The following table summarizes information about stock options outstanding at June 30, 2023: Options Outstanding Options Exercisable Range of Exercise Prices Number of Weighted- Weighted- Number of Weighted- (In thousands) (Years) (In thousands) $0.70 —– $1.11 422 2.0 $ 0.89 422 $ 0.89 $1.29 —– $1.29 858 1.2 1.29 858 1.29 $1.31 —– $5.53 65 1.7 4.43 65 4.43 $14.58 —– $14.58 20 2.8 14.58 20 14.58 $64.17 —– $64.17 7 3.8 64.17 7 64.17 Total 1,372 1.5 $ 1.85 1,372 $ 1.85 |
Summary of Restricted Stock Unit Activity | The following table summarizes RSU activity: Number of Weighted- Weighted- Aggregate (1) (In thousands) (Years) (In thousands) Outstanding at December 31, 2022 2,253 $ 181.01 Granted 423 214.80 Vested (691) 142.41 $ 140,740 Canceled (147) 176.87 Outstanding at June 30, 2023 1,838 $ 203.65 1.3 $ 307,877 Expected to vest at June 30, 2023 1,838 $ 203.65 1.3 $ 307,865 (1) The intrinsic value of RSUs vested is based upon the value of the Company’s stock when vested. The intrinsic value of RSUs outstanding and expected to vest as of June 30, 2023 is based on the closing price of the last trading day during the period ended June 30, 2023. The Company’s stock fair value used in this computation was $167.48 per share. |
Share-based Compensation, Performance Shares Award Outstanding Activity | The following summarizes PSU activity: Number of Weighted- Weighted- Aggregate (1) (In thousands) (Years) (In thousands) Outstanding at December 31, 2022 376 $ 197.82 Granted 383 240.72 Vested (375) 195.81 $ 79,438 Canceled (19) 227.35 Outstanding at June 30, 2023 365 $ 243.30 1.7 $ 61,087 Expected to vest at June 30, 2023 365 $ 243.30 1.7 $ 61,087 (1) The intrinsic value of PSUs vested is based upon the value of the Company’s stock when vested. The intrinsic value of PSUs outstanding and expected to vest as of June 30, 2023 is based on the closing price of the last trading day during the period ended June 30, 2023. The Company’s stock fair value used in this computation was $167.48 per share. |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Net Income (Loss) Per Share | The following table presents the computation of basic and diluted net income per share for the periods presented: Three Months Ended Six Months Ended 2023 2022 2023 2022 (In thousands, except per share data) Numerator: Net income $ 157,191 $ 76,976 $ 304,064 $ 128,797 Convertible senior notes interest and financing costs, net 1,651 662 3,255 1,304 Adjusted net income $ 158,842 $ 77,638 $ 307,319 $ 130,101 Denominator: Shares used in basic per share amounts: Weighted average common shares outstanding 136,607 135,196 136,650 134,768 Shares used in diluted per share amounts: Weighted average common shares outstanding used for basic calculation 136,607 135,196 136,650 134,768 Effect of dilutive securities: Employee stock-based awards 1,760 3,042 2,155 3,399 Notes due 2023 900 900 900 900 Notes due 2025 1,253 — 1,253 — 2025 Warrants 503 512 575 460 Notes due 2026 2,057 2,057 2,057 2,057 Notes due 2028 2,018 2,018 2,018 2,018 Weighted average common shares outstanding for diluted calculation 145,098 143,725 145,608 143,602 Basic and diluted net income per share Net income per share, basic $ 1.15 $ 0.57 $ 2.23 $ 0.96 Net income per share, diluted $ 1.09 $ 0.54 $ 2.11 $ 0.91 |
Schedule of Potentially Dilutive Securities Excluded from the Computation of Diluted Net Income (Loss) Per Share | The following outstanding shares of common stock equivalents were excluded from the calculation of the diluted net income per share attributable to common stockholders because their effect would have been antidilutive: Three Months Ended Six Months Ended 2023 2022 2023 2022 (In thousands) Employee stock-based awards 1,226 572 1,006 598 2028 Warrants 2,477 2,425 2,046 2,735 2026 Warrants 2,524 2,471 2,085 2,788 Notes due 2025 — 1,253 — 1,253 Total 6,227 6,721 5,137 7,374 |
DESCRIPTION OF BUSINESS AND B_3
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details) | 6 Months Ended |
Jun. 30, 2023 shares | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Treasury shares repurchased (in shares) | 420,957 |
REVENUE RECOGNITION - Summary o
REVENUE RECOGNITION - Summary of Disaggregated Revenue by Primary Geographical Market and Timing of Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Net revenues | $ 711,118 | $ 530,196 | $ 1,437,134 | $ 971,488 |
Products delivered at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 684,122 | 511,865 | 1,385,774 | 936,014 |
Products and services delivered over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 26,996 | 18,331 | 51,360 | 35,474 |
U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 417,582 | 422,628 | 890,543 | 792,120 |
International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | $ 293,536 | $ 107,568 | $ 546,591 | $ 179,368 |
REVENUE RECOGNITION - Summary_2
REVENUE RECOGNITION - Summary of Contract Assets and Contract Liabilities from Contracts with Customers (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Receivables | $ 520,306 | $ 440,896 |
Short-term contract assets (Prepaid expenses and other assets) | 38,073 | 32,130 |
Long-term contract assets (Other assets) | 122,982 | 100,991 |
Short-term contract liabilities (Deferred revenues, current) | 109,176 | 90,747 |
Long-term contract liabilities (Deferred revenues, non-current) | $ 354,296 | $ 281,613 |
REVENUE RECOGNITION - Narrative
REVENUE RECOGNITION - Narrative (Details) | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Contract asset impairment charges | $ 0 |
REVENUE RECOGNITION - Summary_3
REVENUE RECOGNITION - Summary of Significant Changes in the Balances of Contract Liabilities and Assets (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Contract Assets | |
Balance, beginning of period | $ 133,121 |
Amount recognized | (17,658) |
Increased due to shipments | 45,592 |
Balance, end of period | 161,055 |
Contract Liabilities | |
Balance, beginning of period | 372,360 |
Revenue recognized | (51,360) |
Increased due to billings | 142,472 |
Balance, end of period | $ 463,472 |
REVENUE RECOGNITION - Summary_4
REVENUE RECOGNITION - Summary of Estimated Revenue Expected to be Recognized in Future Periods (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total estimated revenue expected to be recognized in future periods | $ 463,472 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total estimated revenue expected to be recognized in future periods | $ 55,492 |
Total estimated revenue expected to be recognized in future periods, expected timing | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total estimated revenue expected to be recognized in future periods | $ 105,360 |
Total estimated revenue expected to be recognized in future periods, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total estimated revenue expected to be recognized in future periods | $ 97,787 |
Total estimated revenue expected to be recognized in future periods, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total estimated revenue expected to be recognized in future periods | $ 81,815 |
Total estimated revenue expected to be recognized in future periods, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total estimated revenue expected to be recognized in future periods | $ 62,174 |
Total estimated revenue expected to be recognized in future periods, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total estimated revenue expected to be recognized in future periods | $ 60,844 |
Total estimated revenue expected to be recognized in future periods, expected timing |
OTHER FINANCIAL INFORMATION - I
OTHER FINANCIAL INFORMATION - Inventory (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw materials | $ 30,993 | $ 34,978 |
Finished goods | 135,118 | 114,730 |
Total inventory | $ 166,111 | $ 149,708 |
OTHER FINANCIAL INFORMATION - A
OTHER FINANCIAL INFORMATION - Accrued Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Customer rebates and sales incentives | $ 219,814 | $ 153,916 |
Income tax payable | 81,271 | 16,146 |
VAT payable | 35,511 | 19,852 |
Liability due to supply agreements | 35,368 | 17,341 |
Freight | 18,653 | 35,011 |
Salaries, commissions, incentive compensation and benefits | 14,575 | 18,009 |
Operating lease liabilities, current | 5,773 | 5,371 |
Post combination expense accrual | 0 | 9,138 |
Liabilities related to restructuring activities | 186 | 714 |
Other | 14,134 | 20,441 |
Total accrued liabilities | $ 425,285 | $ 295,939 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Schedule of Goodwill (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 213,559 | $ 181,254 |
Goodwill acquired | 0 | 33,354 |
Currency translation adjustment | 731 | (1,049) |
Ending balance | $ 214,290 | $ 213,559 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Schedule of Acquired Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Other indefinite-lived intangibles | $ 286 | $ 286 |
Intangible assets with finite lives: | ||
Additions | 0 | 26,479 |
Accumulated Amortization | (58,776) | (45,195) |
Net | 85,674 | |
Total purchased intangible assets, Gross | 144,736 | 118,257 |
Total purchased intangible assets, Net | 85,960 | 99,541 |
Developed technology | ||
Intangible assets with finite lives: | ||
Gross | 51,044 | 38,650 |
Additions | 0 | 12,394 |
Accumulated Amortization | (22,166) | (17,260) |
Net | 28,878 | 33,784 |
Customer relationship | ||
Intangible assets with finite lives: | ||
Gross | 55,106 | 41,021 |
Additions | 0 | 14,085 |
Accumulated Amortization | (24,607) | (19,702) |
Net | 30,499 | 35,404 |
Trade names | ||
Intangible assets with finite lives: | ||
Gross | 37,700 | 37,700 |
Additions | 0 | 0 |
Accumulated Amortization | (11,403) | (7,633) |
Net | 26,297 | 30,067 |
Order backlog | ||
Intangible assets with finite lives: | ||
Gross | 600 | 600 |
Additions | 0 | 0 |
Accumulated Amortization | (600) | (600) |
Net | $ 0 | $ 0 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | $ 6,794 | $ 6,285 | $ 13,588 | $ 12,071 |
Developed technology | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | 2,455 | 2,010 | 4,910 | 3,876 |
Customer relationships | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | 2,454 | 2,067 | 4,908 | 3,825 |
Trade names | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | 1,885 | 1,885 | 3,770 | 3,770 |
Order backlog | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | $ 0 | $ 323 | $ 0 | $ 600 |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS - Expected Future Amortization Expense (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 (remaining six months) | $ 13,585 |
2024 | 24,538 |
2025 | 23,032 |
2026 | 19,473 |
2027 | 5,046 |
Total | $ 85,674 |
GOODWILL AND INTANGIBLE ASSET_6
GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) $ in Millions | 3 Months Ended |
Jun. 30, 2023 USD ($) | |
GreenCom | |
Finite-Lived Intangible Assets [Line Items] | |
Increase in intangible assets acquired | $ 0.1 |
CASH EQUIVALENTS AND MARKETAB_3
CASH EQUIVALENTS AND MARKETABLE SECURITIES - Schedule of Investments (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 1,663,333 | $ 1,370,384 |
Gross Unrealized Gains | 233 | 33 |
Gross Unrealized Losses | (7,352) | (10,553) |
Fair Value | 1,656,214 | 1,359,864 |
Cash Equivalents | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 134,398 | 220,265 |
Marketable Securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 1,521,816 | 1,139,599 |
Money market funds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 134,398 | 165,407 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 134,398 | 165,407 |
Money market funds | Cash Equivalents | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 134,398 | 165,407 |
Money market funds | Marketable Securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 0 | 0 |
Certificates of deposit | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 49,544 | 31,874 |
Gross Unrealized Gains | 3 | 13 |
Gross Unrealized Losses | (76) | (130) |
Fair Value | 49,471 | 31,757 |
Certificates of deposit | Cash Equivalents | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 0 | 0 |
Certificates of deposit | Marketable Securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 49,471 | 31,757 |
Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 119,203 | 148,832 |
Gross Unrealized Gains | 0 | 10 |
Gross Unrealized Losses | (306) | (171) |
Fair Value | 118,897 | 148,671 |
Commercial paper | Cash Equivalents | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 0 | 50,764 |
Commercial paper | Marketable Securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 118,897 | 97,907 |
Corporate notes and bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 339,972 | 168,887 |
Gross Unrealized Gains | 29 | 2 |
Gross Unrealized Losses | (3,148) | (3,313) |
Fair Value | 336,853 | 165,576 |
Corporate notes and bonds | Cash Equivalents | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 0 | 0 |
Corporate notes and bonds | Marketable Securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 336,853 | 165,576 |
U.S. Treasuries | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 354,112 | 301,349 |
Gross Unrealized Gains | 35 | 8 |
Gross Unrealized Losses | (398) | (132) |
Fair Value | 353,749 | 301,225 |
U.S. Treasuries | Cash Equivalents | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 0 | 4,094 |
U.S. Treasuries | Marketable Securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 353,749 | 297,131 |
U.S. Government agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 666,104 | 554,035 |
Gross Unrealized Gains | 166 | 0 |
Gross Unrealized Losses | (3,424) | (6,807) |
Fair Value | 662,846 | 547,228 |
U.S. Government agency securities | Cash Equivalents | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 0 | 0 |
U.S. Government agency securities | Marketable Securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | $ 662,846 | $ 547,228 |
CASH EQUIVALENTS AND MARKETAB_4
CASH EQUIVALENTS AND MARKETABLE SECURITIES - Schedule of Contractual Maturity (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Cash and Cash Equivalents [Abstract] | ||
Contractual maturities, Due within one year, Amortized Cost | $ 1,357,928 | |
Contractual maturities, Due within one year, Fair Value | 1,352,679 | |
Contractual maturities, Due within one to three years, Amortized Cost | 305,405 | |
Contractual maturities, Due within one to three years, Fair Value | 303,535 | |
Amortized Cost | 1,663,333 | $ 1,370,384 |
Fair Value | $ 1,656,214 | $ 1,359,864 |
WARRANTY OBLIGATIONS - Summary
WARRANTY OBLIGATIONS - Summary of Warranty Activities (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Changes in the Company's product warranty liability | |||||
Warranty obligations, beginning of period | $ 146,034 | $ 83,579 | $ 131,446 | $ 73,377 | |
Accruals for warranties issued during period | 16,344 | 11,311 | 32,515 | 20,221 | |
Changes in estimates | (10,363) | 17,063 | (6,635) | 21,975 | |
Settlements | (5,092) | (6,590) | (13,986) | (12,471) | |
Increase due to accretion expense | 3,907 | 1,828 | 7,452 | 3,343 | |
Change in discount rate | 31,797 | (9,609) | 31,797 | (9,609) | |
Other | (1,912) | (1,031) | (1,874) | (285) | |
Warranty obligations, end of period | 180,715 | 96,551 | 180,715 | 96,551 | |
Less: warranty obligations, current | (36,686) | (29,197) | (36,686) | (29,197) | $ (35,556) |
Warranty obligations, non-current | $ 144,029 | $ 67,354 | $ 144,029 | $ 67,354 | $ 95,890 |
WARRANTY OBLIGATIONS - Narrativ
WARRANTY OBLIGATIONS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Product Warranty Liability [Line Items] | ||||
Changes in estimates | $ (10,363) | $ 17,063 | $ (6,635) | $ 21,975 |
Minimum | ||||
Product Warranty Liability [Line Items] | ||||
Product warranty, term | 10 years | 10 years | ||
Maximum | ||||
Product Warranty Liability [Line Items] | ||||
Product warranty, term | 15 years | 15 years | ||
Product Replacement Costs Related To Enphase IQ Battery Systems | ||||
Product Warranty Liability [Line Items] | ||||
Changes in estimates | $ (14,400) | $ (20,500) | ||
Product Replacement Costs Related To Other Products | ||||
Product Warranty Liability [Line Items] | ||||
Changes in estimates | (2,100) | (2,100) | ||
Change In Warranty Period | ||||
Product Warranty Liability [Line Items] | ||||
Changes in estimates | $ 6,100 | 6,100 | ||
Field Performance Data And Diagnostic Root-Cause Failure Analysis | ||||
Product Warranty Liability [Line Items] | ||||
Changes in estimates | 13,300 | $ 9,900 | 13,300 | |
Labor Reimbursement Rate | ||||
Product Warranty Liability [Line Items] | ||||
Changes in estimates | $ 3,800 | 3,800 | ||
Expedited Freight Costs And Replacement Costs | ||||
Product Warranty Liability [Line Items] | ||||
Changes in estimates | $ 4,900 |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Assets [Abstract] | ||
Marketable securities: | $ 1,656,214 | $ 1,359,864 |
Certificates of deposit | ||
Assets [Abstract] | ||
Marketable securities: | 49,471 | 31,757 |
Commercial paper | ||
Assets [Abstract] | ||
Marketable securities: | 118,897 | 148,671 |
Corporate notes and bonds | ||
Assets [Abstract] | ||
Marketable securities: | 336,853 | 165,576 |
U.S. Treasuries | ||
Assets [Abstract] | ||
Marketable securities: | 353,749 | 301,225 |
U.S. Government agency securities | ||
Assets [Abstract] | ||
Marketable securities: | 662,846 | 547,228 |
Recurring | Level 1 | ||
Assets [Abstract] | ||
Investments in debt securities | 0 | 0 |
Total assets measured at fair value | 134,398 | 165,407 |
Warranty obligations | ||
Current | 0 | 0 |
Non-current | 0 | 0 |
Total warranty obligations measured at fair value | 0 | 0 |
Total liabilities measured at fair value | 0 | 0 |
Recurring | Level 1 | Certificates of deposit | ||
Assets [Abstract] | ||
Marketable securities: | 0 | 0 |
Recurring | Level 1 | Commercial paper | ||
Assets [Abstract] | ||
Marketable securities: | 0 | 0 |
Recurring | Level 1 | Corporate notes and bonds | ||
Assets [Abstract] | ||
Marketable securities: | 0 | 0 |
Recurring | Level 1 | U.S. Treasuries | ||
Assets [Abstract] | ||
Marketable securities: | 0 | 0 |
Recurring | Level 1 | U.S. Government agency securities | ||
Assets [Abstract] | ||
Marketable securities: | 0 | 0 |
Recurring | Level 1 | Money market funds | ||
Assets [Abstract] | ||
Cash and cash equivalents | 134,398 | 165,407 |
Recurring | Level 1 | Commercial paper | ||
Assets [Abstract] | ||
Cash and cash equivalents | 0 | 0 |
Recurring | Level 1 | U.S. Treasuries | ||
Assets [Abstract] | ||
Cash and cash equivalents | 0 | 0 |
Recurring | Level 2 | ||
Assets [Abstract] | ||
Investments in debt securities | 0 | 0 |
Total assets measured at fair value | 1,521,816 | 1,194,457 |
Warranty obligations | ||
Current | 0 | 0 |
Non-current | 0 | 0 |
Total warranty obligations measured at fair value | 0 | 0 |
Total liabilities measured at fair value | 0 | 0 |
Recurring | Level 2 | Certificates of deposit | ||
Assets [Abstract] | ||
Marketable securities: | 49,471 | 31,757 |
Recurring | Level 2 | Commercial paper | ||
Assets [Abstract] | ||
Marketable securities: | 118,897 | 97,907 |
Recurring | Level 2 | Corporate notes and bonds | ||
Assets [Abstract] | ||
Marketable securities: | 336,853 | 165,576 |
Recurring | Level 2 | U.S. Treasuries | ||
Assets [Abstract] | ||
Marketable securities: | 353,749 | 297,131 |
Recurring | Level 2 | U.S. Government agency securities | ||
Assets [Abstract] | ||
Marketable securities: | 662,846 | 547,228 |
Recurring | Level 2 | Money market funds | ||
Assets [Abstract] | ||
Cash and cash equivalents | 0 | 0 |
Recurring | Level 2 | Commercial paper | ||
Assets [Abstract] | ||
Cash and cash equivalents | 0 | 50,764 |
Recurring | Level 2 | U.S. Treasuries | ||
Assets [Abstract] | ||
Cash and cash equivalents | 0 | 4,094 |
Recurring | Level 3 | ||
Assets [Abstract] | ||
Investments in debt securities | 60,275 | 56,777 |
Total assets measured at fair value | 60,275 | 56,777 |
Warranty obligations | ||
Current | 27,282 | 30,740 |
Non-current | 123,258 | 75,749 |
Total warranty obligations measured at fair value | 150,540 | 106,489 |
Total liabilities measured at fair value | 150,540 | 106,489 |
Recurring | Level 3 | Certificates of deposit | ||
Assets [Abstract] | ||
Marketable securities: | 0 | 0 |
Recurring | Level 3 | Commercial paper | ||
Assets [Abstract] | ||
Marketable securities: | 0 | 0 |
Recurring | Level 3 | Corporate notes and bonds | ||
Assets [Abstract] | ||
Marketable securities: | 0 | 0 |
Recurring | Level 3 | U.S. Treasuries | ||
Assets [Abstract] | ||
Marketable securities: | 0 | 0 |
Recurring | Level 3 | U.S. Government agency securities | ||
Assets [Abstract] | ||
Marketable securities: | 0 | 0 |
Recurring | Level 3 | Money market funds | ||
Assets [Abstract] | ||
Cash and cash equivalents | 0 | 0 |
Recurring | Level 3 | Commercial paper | ||
Assets [Abstract] | ||
Cash and cash equivalents | 0 | 0 |
Recurring | Level 3 | U.S. Treasuries | ||
Assets [Abstract] | ||
Cash and cash equivalents | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | |||
Jun. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2021 | Jan. 31, 2021 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Decrease in discount rate | 5% | |||
Increase in liability as a result of increasing the profit element and risk premium input by 100 basis points | $ 1,100 | |||
Decrease in liability as a result of decreasing the profit element and risk premium input by 100 basis points | 1,100 | |||
Increase in liability as a result of decreasing the discount rate by 100 basis points | 9,200 | |||
Decrease in liability as a result of increasing the discount rate by 100 basis points | 10,300 | |||
Debt Securities, One | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investments in debt securities | $ 25,000 | |||
Debt Securities, Two | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investments in debt securities | $ 13,000 | |||
Non-Voting Debt Security | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investments in debt securities | $ 15,000 | |||
Level 2 | Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investments in debt securities | 0 | $ 0 | ||
Level 2 | Recurring | Convertible Notes | Notes due 2028 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Notes payable fair value | 543,600 | |||
Level 2 | Recurring | Convertible Notes | Notes due 2026 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Notes payable fair value | 594,700 | |||
Level 2 | Recurring | Convertible Notes | Notes due 2025 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Notes payable fair value | $ 261,600 |
FAIR VALUE MEASUREMENTS - Debt
FAIR VALUE MEASUREMENTS - Debt Securities Schedule of Fair Value (Details) - Investments in debt securities - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance at beginning of period | $ 58,521 | $ 39,926 | $ 56,777 | $ 41,042 |
Fair value adjustments included in other income (expense), net | 1,754 | 987 | 3,498 | (129) |
Balance at end of period | $ 60,275 | $ 40,913 | $ 60,275 | $ 40,913 |
FAIR VALUE MEASUREMENTS - Sch_2
FAIR VALUE MEASUREMENTS - Schedule of Changes in Nonfinancial Liabilities Related to Warrant Obligations Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Change in discount rate | $ 31,797 | $ (9,609) | $ 31,797 | $ (9,609) |
Recurring | Total warranty obligations measured at fair value | Level 3 | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance at beginning of period | 119,508 | 61,586 | 106,489 | 51,007 |
Accruals for warranties issued during period | 16,344 | 11,120 | 32,369 | 19,890 |
Changes in estimates | (12,925) | 14,692 | (11,680) | 18,591 |
Settlements | (6,179) | (4,668) | (14,013) | (8,724) |
Increase due to accretion expense | 3,907 | 1,828 | 7,452 | 3,343 |
Change in discount rate | 31,797 | (9,609) | 31,797 | (9,609) |
Other | (1,912) | (1,026) | (1,874) | (575) |
Balance at end of period | $ 150,540 | $ 73,923 | $ 150,540 | $ 73,923 |
FAIR VALUE MEASUREMENTS - Summa
FAIR VALUE MEASUREMENTS - Summary of Significant Unobservable Inputs used in the Fair Value Measurement of Liabilities Designated as Level 3 (Details) - Recurring - Level 3 - Warranty obligations for products sold since January 1, 2014 | Jun. 30, 2023 | Dec. 31, 2022 |
Profit element and risk premium | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warranty obligations, measurement input | 17% | 16% |
Credit-adjusted risk-free rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warranty obligations, measurement input | 8% | 13% |
DEBT - Long-term debt (Details)
DEBT - Long-term debt (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Mar. 01, 2021 |
Debt Instrument [Line Items] | |||
Total carrying amount of debt | $ 1,294,497 | $ 1,290,357 | |
Less: debt, current | (93,383) | (90,892) | |
Debt, non-current | 1,201,114 | 1,199,465 | |
Convertible Notes | Notes due 2028 | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 575,000 | 575,000 | |
Less: unamortized debt issuance costs | (6,062) | (6,705) | $ (6,600) |
Total carrying amount of debt | 568,938 | 568,295 | |
Convertible Notes | Notes due 2026 | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 632,500 | 632,500 | |
Less: unamortized debt issuance costs | (5,320) | (6,307) | |
Total carrying amount of debt | 627,180 | 626,193 | |
Convertible Notes | Notes due 2025 | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 102,175 | 102,175 | |
Less: unamortized debt discount | (7,979) | (10,229) | |
Less: unamortized debt issuance costs | (813) | (1,054) | |
Total carrying amount of debt | 93,383 | 90,892 | |
Less: debt, current | (102,200) | ||
Convertible Notes | Notes due 2023 | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 5,000 | 5,000 | |
Less: unamortized debt issuance costs | (4) | (23) | |
Total carrying amount of debt | $ 4,996 | $ 4,977 |
DEBT - Schedule of Interest Cos
DEBT - Schedule of Interest Cost Recognized In Statements Of Operations (Details) - Convertible Notes - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Notes due 2028 | ||||
Debt Instrument [Line Items] | ||||
Amortization of debt issuance costs | $ 327 | $ 327 | $ 643 | $ 643 |
Total interest cost recognized | 327 | 327 | 643 | 643 |
Notes due 2026 | ||||
Debt Instrument [Line Items] | ||||
Amortization of debt issuance costs | 502 | 502 | 987 | 987 |
Total interest cost recognized | 502 | 502 | 987 | 987 |
Notes due 2025 | ||||
Debt Instrument [Line Items] | ||||
Contractual interest expense | 64 | 64 | 128 | 128 |
Amortization of debt discount | 1,144 | 1,088 | 2,249 | 2,137 |
Amortization of debt issuance costs | 123 | 123 | 241 | 241 |
Total interest cost recognized | 1,331 | 1,275 | 2,618 | 2,506 |
Notes due 2023 | ||||
Debt Instrument [Line Items] | ||||
Contractual interest expense | 50 | 50 | 100 | 100 |
Amortization of debt issuance costs | 10 | 10 | 20 | 20 |
Total interest cost recognized | $ 60 | $ 60 | $ 120 | $ 120 |
DEBT - Convertible Senior Notes
DEBT - Convertible Senior Notes due in 2028 Narrative (Details) $ / shares in Units, $ in Thousands, shares in Millions | Mar. 01, 2021 USD ($) tradingDay $ / shares shares | Jun. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | Jan. 01, 2022 USD ($) | Dec. 31, 2021 USD ($) |
Debt Instrument [Line Items] | |||||
Deferred taxes | $ 234,949 | $ 204,872 | |||
Additional paid in capital | (858,039) | (819,119) | |||
Retained earnings (Accumulated deficit) | (189,539) | (17,335) | |||
Notes due 2028 | Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2020-06 | |||||
Debt Instrument [Line Items] | |||||
Additional paid in capital | $ 117,300 | ||||
Convertible debt | 141,300 | ||||
Deferred income tax liabilities | 36,000 | ||||
Retained earnings (Accumulated deficit) | $ 12,000 | ||||
Convertible Notes | Notes due 2028 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument face amount | $ 575,000 | ||||
Interest rate | 0% | ||||
Proceeds from convertible debt | $ 566,400 | ||||
Conversion ratio | 0.0035104 | ||||
Debt conversion price (in USD per share) | $ / shares | $ 284.87 | ||||
Convertible note, liability component | $ 415,000 | ||||
Convertible note, equity component | 160,000 | ||||
Deferred taxes | $ 40,100 | ||||
Debt issuance costs | 9,100 | ||||
Unamortized debt issuance costs | 6,600 | $ 6,062 | $ 6,705 | ||
Debt issuance costs, allocated to capital | $ 2,500 | ||||
Conversion shares (in shares) | shares | 2 | ||||
Payment for bonds hedge | $ 161,600 | ||||
Warrants issued, strike price (in USD per share) | $ / shares | $ 397.91 | ||||
Proceeds from sale of warrants | $ 123,400 | ||||
Convertible Notes | Notes due 2028 | Discount rate | |||||
Debt Instrument [Line Items] | |||||
Measurement input | 0.0477 | ||||
Period One | Convertible Notes | Notes due 2028 | |||||
Debt Instrument [Line Items] | |||||
Threshold percentage | 130% | ||||
Stock trigger price (in USD per share) | $ / shares | $ 370.33 | ||||
Number of threshold trading days | tradingDay | 20 | ||||
Number of consecutive trading days | tradingDay | 30 | ||||
Measurement period percentage of stock price trigger | 98% | ||||
Period Two | Convertible Notes | Notes due 2028 | |||||
Debt Instrument [Line Items] | |||||
Threshold percentage | 100% | ||||
Number of consecutive trading days | tradingDay | 5 | ||||
Business day period after measurement period | 5 days |
DEBT - Convertible Senior Not_2
DEBT - Convertible Senior Notes due in 2026 Narrative (Details) $ / shares in Units, shares in Millions | Mar. 01, 2021 USD ($) tradingDay $ / shares shares | Jun. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | Jan. 01, 2022 USD ($) | Dec. 31, 2021 USD ($) | Mar. 12, 2021 USD ($) |
Debt Instrument [Line Items] | ||||||
Deferred taxes | $ 234,949,000 | $ 204,872,000 | ||||
Additional paid in capital | (858,039,000) | (819,119,000) | ||||
Retained earnings (Accumulated deficit) | (189,539,000) | (17,335,000) | ||||
Notes due 2026 | Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2020-06 | ||||||
Debt Instrument [Line Items] | ||||||
Additional paid in capital | $ 90,600,000 | |||||
Convertible debt | 103,200,000 | |||||
Deferred income tax liabilities | 26,300,000 | |||||
Retained earnings (Accumulated deficit) | $ 13,700,000 | |||||
Convertible Notes | Notes due 2026 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument face amount | $ 575,000,000 | $ 57,500,000 | ||||
Interest rate | 0% | |||||
Proceeds from convertible debt | $ 623,000,000 | |||||
Conversion ratio | 0.0032523 | |||||
Debt conversion price (in USD per share) | $ / shares | $ 307.47 | |||||
Convertible note, liability component | $ 509,000,000 | |||||
Convertible note, equity component | 123,500,000 | |||||
Deferred taxes | $ 31,000,000 | |||||
Debt issuance costs | 10,000,000 | $ 8,000,000 | ||||
Debt issuance costs, allocated to capital | $ 2,000,000 | |||||
Conversion shares (in shares) | shares | 2.1 | |||||
Payment for bonds hedge | $ 124,600,000 | |||||
Warrants issued, strike price (in USD per share) | $ / shares | $ 397.91 | |||||
Proceeds from sale of warrants | $ 97,400,000 | |||||
Unamortized debt issuance costs | $ 5,320,000 | $ 6,307,000 | ||||
Convertible Notes | Notes due 2026 | Discount rate | ||||||
Debt Instrument [Line Items] | ||||||
Measurement input | 0.0444 | |||||
Period One | Convertible Notes | Notes due 2026 | ||||||
Debt Instrument [Line Items] | ||||||
Threshold percentage | 130% | |||||
Stock trigger price (in USD per share) | $ / shares | $ 399.71 | |||||
Number of threshold trading days | tradingDay | 20 | |||||
Number of consecutive trading days | tradingDay | 30 | |||||
Measurement period percentage of stock price trigger | 98% | |||||
Period Two | Convertible Notes | Notes due 2026 | ||||||
Debt Instrument [Line Items] | ||||||
Threshold percentage | 100% | |||||
Number of consecutive trading days | tradingDay | 5 | |||||
Business day period after measurement period | 5 days |
DEBT - Convertible Senior Not_3
DEBT - Convertible Senior Notes due in 2025 Narrative (Details) | 2 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Mar. 01, 2021 USD ($) shares | Mar. 09, 2020 USD ($) tradingDay $ / shares shares | May 19, 2020 tradingDay shares | Jun. 30, 2021 USD ($) shares | Mar. 31, 2021 USD ($) shares | Jun. 30, 2023 USD ($) $ / shares shares | Jun. 30, 2021 USD ($) | Dec. 31, 2022 USD ($) $ / shares shares | May 20, 2020 USD ($) $ / shares shares | |
Debt Instrument [Line Items] | |||||||||
Principal amount outstanding | $ 1,294,497,000 | $ 1,290,357,000 | |||||||
Common stock, par value (in usd per share) | $ / shares | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||||
Common stock, shares authorized (in shares) | shares | 150,000,000 | 300,000,000 | 300,000,000 | 200,000,000 | |||||
Deferred taxes | $ 234,949,000 | $ 204,872,000 | |||||||
Debt, current | 93,383,000 | 90,892,000 | |||||||
Warrants obligations measured at fair value | $ 96,400,000 | ||||||||
Convertible Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Convertible notes embedded derivative | 117,100,000 | ||||||||
Convertible Notes | Notes due 2025 | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument face amount | $ 320,000,000 | ||||||||
Interest rate | 0.25% | ||||||||
Conversion ratio | 0.0122637 | ||||||||
Debt conversion price (in USD per share) | $ / shares | $ 81.54 | ||||||||
Proceeds from convertible debt | $ 313,000,000 | ||||||||
Number of consecutive trading days | tradingDay | 20 | ||||||||
Principal amount outstanding | 93,383,000 | 90,892,000 | |||||||
Convertible notes embedded derivative | 68,700,000 | 116,300,000 | |||||||
Embedded derivative, host contract | $ 251,300,000 | ||||||||
Deferred taxes | 200,000 | ||||||||
Debt issuance costs | $ 7,600,000 | ||||||||
Partial repurchase of convertible notes | $ 217,700,000 | ||||||||
Exercise of warrants related to convertible senior notes (in shares) | shares | 1,670,000 | 485 | |||||||
Equity component of convertible senior notes, net | $ 302,700,000 | $ 100,000 | |||||||
Convertible note, liability component | 184,500,000 | ||||||||
Residual conversion price | $ 4,300,000 | ||||||||
Induced conversion of convertible debt expense | $ 37,500,000 | ||||||||
Remaining expected life | 4 years 1 month 6 days | ||||||||
Write off of debt discount | $ 38,500,000 | ||||||||
Write off of deferred debt issuance cost | $ 4,100,000 | ||||||||
Loss on partial settlement of convertible notes | $ 9,400,000 | ||||||||
Conversion of debt | $ 100,000 | ||||||||
Debt, current | $ 102,200,000 | ||||||||
Effective percentage rate | 5.18% | ||||||||
Unamortized discount | $ 7,979,000 | $ 10,229,000 | |||||||
Remaining discount amortization period | 1 year 8 months 12 days | ||||||||
Conversion shares (in shares) | shares | 3,900,000 | ||||||||
Payment for bonds hedge | $ 89,100,000 | ||||||||
Warrants issued, strike price (in USD per share) | $ / shares | $ 106.94 | ||||||||
Proceeds from sale of warrants | $ 71,600,000 | ||||||||
Convertible notes hedge settlements, shares received (in shares) | shares | 1,900,000 | ||||||||
Warrants unwound, shares issued (in shares) | shares | 1,800,000 | ||||||||
Convertible notes hedge transaction, options outstanding (in shares) | shares | 1,300,000 | ||||||||
Warrants outstanding (in shares) | shares | 1,300,000 | ||||||||
Convertible Notes | Notes due 2025 | Discount rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Measurement input | 0.0435 | ||||||||
Period One | Convertible Notes | Notes due 2025 | |||||||||
Debt Instrument [Line Items] | |||||||||
Number of threshold trading days | tradingDay | 20 | ||||||||
Number of consecutive trading days | tradingDay | 30 | ||||||||
Threshold percentage | 130% | ||||||||
Stock trigger price (in USD per share) | $ / shares | $ 106 | $ 106 | |||||||
Period Two | Convertible Notes | Notes due 2025 | |||||||||
Debt Instrument [Line Items] | |||||||||
Number of consecutive trading days | tradingDay | 5 | ||||||||
Threshold percentage | 100% | ||||||||
Business day period after measurement period | 5 days | ||||||||
Measurement period percentage of stock price trigger | 98% |
DEBT - Convertible Senior Not_4
DEBT - Convertible Senior Notes due 2023 Narrative (Details) - Convertible Notes - Notes due 2023 | 1 Months Ended | |||
Jun. 05, 2019 USD ($) shares | Aug. 31, 2018 USD ($) $ / shares | Jun. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Debt Instrument [Line Items] | ||||
Debt instrument face amount | $ 65,000,000 | $ 5,000,000 | $ 5,000,000 | |
Interest rate | 4% | |||
Debt converted | $ 60,000,000 | |||
Conversion shares (in shares) | shares | 10,801,080 | |||
Fees paid for repurchase and exchange of convertible notes | $ 6,000,000 | |||
Conversion ratio | 0.1800180 | |||
Debt conversion price (in USD per share) | $ / shares | $ 5.56 | |||
Redemption price percentage | 100% |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) $ in Millions | Jun. 30, 2023 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Term of lease contract, maximum renewal term | 12 years |
Purchase obligation | $ 633.4 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Lease Expense Components (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Operating lease costs | $ 2,416 | $ 2,052 | $ 5,008 | $ 3,989 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Lease Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease liabilities, current (Accrued liabilities) | $ 5,773 | $ 5,371 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued Liabilities, Current | Accrued Liabilities, Current |
Operating lease liabilities, non-current (Other liabilities) | $ 20,311 | $ 19,077 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other Liabilities, Noncurrent | Other Liabilities, Noncurrent |
Total operating lease liabilities | $ 26,084 | $ 24,448 |
Weighted average remaining lease term | 5 years 7 months 6 days | 5 years 3 months 18 days |
Weighted average discount rate | 6.70% | 6.50% |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES - Supplemental Cash Flow and Other Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Operating cash flows from operating leases | $ 1,788 | $ 1,325 | $ 3,490 | $ 2,843 |
Lease liabilities arising from obtaining right-of-use assets | $ 2,852 | $ 0 | $ 4,368 | $ 6,742 |
COMMITMENTS AND CONTINGENCIES_5
COMMITMENTS AND CONTINGENCIES - Schedule of Minimum Lease Payments Under Noncancelable Operating Leases (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
2023 (remaining six months) | $ 3,752 | |
2024 | 6,691 | |
2025 | 5,940 | |
2026 | 4,252 | |
2027 | 2,882 | |
Thereafter | 7,857 | |
Total lease payments | 31,374 | |
Less: imputed lease interest | (5,290) | |
Total lease liabilities | $ 26,084 | $ 24,448 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2023 | May 31, 2021 | |
Equity, Class of Treasury Stock [Line Items] | |||
Treasury shares repurchased (in shares) | 420,957 | ||
2021 Repurchase Program | |||
Equity, Class of Treasury Stock [Line Items] | |||
Repurchase program, shares authorized (in shares) | $ 500,000,000 | ||
Repurchase of common stock | $ 200,000,000 | ||
Repurchase of common stock (in shares) | 1,254,474 | 1,254,474 | |
Average cost, shares repurchased (in usd per share) | $ 159.43 | $ 159.43 | |
Stock repurchased and retired during period (in shares) | 833,517 | ||
Treasury shares repurchased (in shares) | 420,957 |
STOCK-BASED COMPENSATION - Summ
STOCK-BASED COMPENSATION - Summary of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | $ 54,166 | $ 53,064 | $ 113,821 | $ 100,861 |
Stock options, RSUs and PSUs | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 51,852 | 47,228 | 108,809 | 91,340 |
Employee stock purchase plan | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 1,803 | 1,014 | 3,843 | 2,396 |
Post combination expense accrual (Accrued liabilities) | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 511 | 4,822 | 1,169 | 7,125 |
Cost of revenues | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 3,398 | 3,131 | 7,067 | 5,638 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 23,765 | 16,266 | 45,243 | 29,995 |
Sales and marketing | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 14,515 | 22,176 | 35,934 | 35,233 |
General and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | $ 12,488 | $ 11,491 | $ 25,577 | $ 29,995 |
STOCK-BASED COMPENSATION - Su_2
STOCK-BASED COMPENSATION - Summary of Stock-Based Compensation Expense Associated with Each Type of Award (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 54,166 | $ 53,064 | $ 113,821 | $ 100,861 |
Stock options, RSUs and PSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 51,852 | 47,228 | 108,809 | 91,340 |
Employee stock purchase plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 1,803 | 1,014 | 3,843 | 2,396 |
Post combination expense accrual (Accrued liabilities) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 511 | $ 4,822 | $ 1,169 | $ 7,125 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) 10Q $ in Millions | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Share-Based Payment Arrangement [Abstract] | |
Total unrecognized compensation cost | $ 407.6 |
Weighted-average recognition period for unrecognized compensation cost | 2 years 9 months 18 days |
STOCK-BASED COMPENSATION - Su_3
STOCK-BASED COMPENSATION - Summary of Stock Option Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended |
Jun. 30, 2023 USD ($) $ / shares shares | |
Number of Shares Outstanding | |
Outstanding, beginning balance (in shares) | shares | 1,464 |
Granted (in shares) | shares | 0 |
Exercised (in shares) | shares | (92) |
Canceled (in shares) | shares | 0 |
Outstanding, ending balance (in shares) | shares | 1,372 |
Shares outstanding, vested and expected to vest (in shares) | shares | 1,372 |
Shares outstanding, exercisable (in shares) | shares | 1,372 |
Weighted- Average Exercise Price per Share | |
Outstanding, beginning balance (in usd per share) | $ 1.83 |
Granted (in usd per share) | 0 |
Exercised (in usd per share) | 1.64 |
Canceled (in usd per share) | 0 |
Outstanding, ending balance (in usd per share) | 1.85 |
Weighted-average exercise price, vested and expected (in usd per share) | 1.85 |
Weighted-average exercise price, exercisable (in usd per share) | $ 1.85 |
Weighted-Average Remaining Contractual Term | |
Outstanding | 1 year 6 months |
Vested and expected to vest | 1 year 6 months |
Exercisable | 1 year 6 months |
Aggregate Intrinsic Value | |
Exercised | $ | $ 15,375 |
Outstanding | $ | 227,200 |
Vested and expected to vest | $ | 227,200 |
Exercisable | $ | $ 227,200 |
Share price (in usd per share) | $ 167.48 |
STOCK-BASED COMPENSATION - Su_4
STOCK-BASED COMPENSATION - Summary of Stock Options Outstanding (Details) shares in Thousands | 6 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Options outstanding, number of shares (shares) | shares | 1,372 |
Options outstanding - weighted- average remaining life | 1 year 6 months |
Options outstanding - weighted- average exercise price (usd per share) | $ 1.85 |
Options exercisable - number of shares exercisable (shares) | shares | 1,372 |
Options exercisable - weighted-average exercise price (usd per share) | $ 1.85 |
$0.70 —– $1.11 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price range, lower limit (usd per share) | 0.70 |
Exercise price range, upper limit (usd per share) | $ 1.11 |
Options outstanding, number of shares (shares) | shares | 422 |
Options outstanding - weighted- average remaining life | 2 years |
Options outstanding - weighted- average exercise price (usd per share) | $ 0.89 |
Options exercisable - number of shares exercisable (shares) | shares | 422 |
Options exercisable - weighted-average exercise price (usd per share) | $ 0.89 |
$1.29 —– $1.29 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price range, lower limit (usd per share) | 1.29 |
Exercise price range, upper limit (usd per share) | $ 1.29 |
Options outstanding, number of shares (shares) | shares | 858 |
Options outstanding - weighted- average remaining life | 1 year 2 months 12 days |
Options outstanding - weighted- average exercise price (usd per share) | $ 1.29 |
Options exercisable - number of shares exercisable (shares) | shares | 858 |
Options exercisable - weighted-average exercise price (usd per share) | $ 1.29 |
$1.31 —– $5.53 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price range, lower limit (usd per share) | 1.31 |
Exercise price range, upper limit (usd per share) | $ 5.53 |
Options outstanding, number of shares (shares) | shares | 65 |
Options outstanding - weighted- average remaining life | 1 year 8 months 12 days |
Options outstanding - weighted- average exercise price (usd per share) | $ 4.43 |
Options exercisable - number of shares exercisable (shares) | shares | 65 |
Options exercisable - weighted-average exercise price (usd per share) | $ 4.43 |
$14.58 —– $14.58 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price range, lower limit (usd per share) | 14.58 |
Exercise price range, upper limit (usd per share) | $ 14.58 |
Options outstanding, number of shares (shares) | shares | 20 |
Options outstanding - weighted- average remaining life | 2 years 9 months 18 days |
Options outstanding - weighted- average exercise price (usd per share) | $ 14.58 |
Options exercisable - number of shares exercisable (shares) | shares | 20 |
Options exercisable - weighted-average exercise price (usd per share) | $ 14.58 |
$64.17 —– $64.17 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price range, lower limit (usd per share) | 64.17 |
Exercise price range, upper limit (usd per share) | $ 64.17 |
Options outstanding, number of shares (shares) | shares | 7 |
Options outstanding - weighted- average remaining life | 3 years 9 months 18 days |
Options outstanding - weighted- average exercise price (usd per share) | $ 64.17 |
Options exercisable - number of shares exercisable (shares) | shares | 7 |
Options exercisable - weighted-average exercise price (usd per share) | $ 64.17 |
STOCK-BASED COMPENSATION - Su_5
STOCK-BASED COMPENSATION - Summary of Restricted Stock Unit Activity and Performance Stock Units (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | |
Aggregate Intrinsic Value | ||
Share price (in usd per share) | $ 167.48 | |
Restricted stock units | ||
Number of Shares Outstanding | ||
Outstanding, beginning balance (in shares) | 2,253 | |
Granted (in shares) | 423 | |
Vested (in shares) | (691) | |
Canceled (in shares) | (147) | |
Outstanding, ending balance (in shares) | 1,838 | |
Number of shares outstanding, expected to vest (in shares) | 1,838 | |
Weighted Average Fair Value per Share at Grant Date | ||
Outstanding, beginning balance (in usd per share) | $ 181.01 | |
Granted (in usd per share) | 214.80 | |
Vested (in usd per share) | 142.41 | |
Canceled (in usd per share) | 176.87 | |
Outstanding, ending balance (in usd per share) | 203.65 | |
Weighted-Average Fair Value per Share at Grant Date, Expected to vest (in usd per share) | $ 203.65 | |
Weighted-Average Remaining Contractual Term | ||
Outstanding | 1 year 3 months 18 days | |
Expected to vest | 1 year 3 months 18 days | |
Aggregate Intrinsic Value | ||
Outstanding | $ 307,877 | |
Vested | 140,740 | |
Aggregate intrinsic value, expected to vest | $ 307,865 | |
Performance shares | ||
Number of Shares Outstanding | ||
Outstanding, beginning balance (in shares) | 376 | |
Granted (in shares) | 383 | |
Vested (in shares) | (375) | |
Canceled (in shares) | (19) | |
Outstanding, ending balance (in shares) | 365 | |
Number of shares outstanding, expected to vest (in shares) | 365 | |
Weighted Average Fair Value per Share at Grant Date | ||
Outstanding, beginning balance (in usd per share) | $ 197.82 | |
Granted (in usd per share) | 240.72 | |
Vested (in usd per share) | 195.81 | |
Canceled (in usd per share) | 227.35 | |
Outstanding, ending balance (in usd per share) | 243.30 | |
Weighted-Average Fair Value per Share at Grant Date, Expected to vest (in usd per share) | $ 243.30 | |
Weighted-Average Remaining Contractual Term | ||
Outstanding | 1 year 8 months 12 days | |
Expected to vest | 1 year 8 months 12 days | |
Aggregate Intrinsic Value | ||
Outstanding | $ 61,087 | |
Vested | 79,438 | |
Aggregate intrinsic value, expected to vest | $ 61,087 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Income tax provision | $ 27,403 | $ 15,232 | $ 59,503 | $ 20,818 |
Net income before income taxes | $ 184,594 | $ 92,208 | $ 363,567 | $ 149,615 |
NET INCOME PER SHARE - Schedule
NET INCOME PER SHARE - Schedule of Computation of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Numerator: | ||||
Net income | $ 157,191 | $ 76,976 | $ 304,064 | $ 128,797 |
Convertible senior notes interest and financing costs, net | 1,651 | 662 | 3,255 | 1,304 |
Adjusted net income | $ 158,842 | $ 77,638 | $ 307,319 | $ 130,101 |
Denominator: | ||||
Weighted average common shares outstanding (in shares) | 136,607 | 135,196 | 136,650 | 134,768 |
Employee stock-based awards (in shares) | 1,760 | 3,042 | 2,155 | 3,399 |
Weighted average common shares outstanding for diluted calculation (in shares) | 145,098 | 143,725 | 145,608 | 143,602 |
Basic and diluted net income per share | ||||
Net income per share, basic (in USD per share) | $ 1.15 | $ 0.57 | $ 2.23 | $ 0.96 |
Net income per share, diluted (in USD per share) | $ 1.09 | $ 0.54 | $ 2.11 | $ 0.91 |
Notes due 2025 | ||||
Denominator: | ||||
Warrants (in shares) | 503 | 512 | 575 | 460 |
Convertible Notes | Notes due 2023 | ||||
Denominator: | ||||
Notes due (in shares) | 900 | 900 | 900 | 900 |
Convertible Notes | Notes due 2025 | ||||
Denominator: | ||||
Notes due (in shares) | 1,253 | 0 | 1,253 | 0 |
Convertible Notes | Notes due 2026 | ||||
Denominator: | ||||
Notes due (in shares) | 2,057 | 2,057 | 2,057 | 2,057 |
Convertible Notes | Notes due 2028 | ||||
Denominator: | ||||
Notes due (in shares) | 2,018 | 2,018 | 2,018 | 2,018 |
NET INCOME PER SHARE - Schedu_2
NET INCOME PER SHARE - Schedule of Potentially Dilutive Securities Excluded from the Computation of Diluted Net Income Per Share (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 6,227 | 6,721 | 5,137 | 7,374 |
Employee stock-based awards | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 1,226 | 572 | 1,006 | 598 |
Warrants | Notes due 2028 | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 2,477 | 2,425 | 2,046 | 2,735 |
Warrants | Notes due 2026 | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 2,524 | 2,471 | 2,085 | 2,788 |
Notes due | Notes due 2025 | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 0 | 1,253 | 0 | 1,253 |
RELATED PARTY (Details)
RELATED PARTY (Details) - Convertible Notes - Notes due 2023 - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2018 | Aug. 31, 2018 |
Related Party Transaction [Line Items] | ||||
Debt instrument face amount | $ 5,000,000 | $ 5,000,000 | $ 65,000,000 | |
Thurman John Rodgers | ||||
Related Party Transaction [Line Items] | ||||
Debt instrument face amount | $ 5,000,000 | $ 5,000,000 | $ 5,000,000 |
SUBSEQUENT EVENTS - Narrative (
SUBSEQUENT EVENTS - Narrative (Details) - Subsequent Event $ in Millions | Jul. 27, 2023 USD ($) |
Subsequent Event [Line Items] | |
Payments to acquire investments | $ 15 |
2023 Repurchase Program | |
Subsequent Event [Line Items] | |
Repurchase program, shares authorized (in shares) | $ 1,000 |
Uncategorized Items - enph-2023
Label | Element | Value |
Accounting Standards Update [Extensible Enumeration] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2020-06 [Member] |