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Enphase(ENPH) - 2024 Q4 - Annual Report
ENPHEnphase(ENPH)2025-02-08 00:06
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Financial Performance - Net revenues for the year ended December 31, 2024, were 1,330,383,adecreaseof421,330,383, a decrease of 42% compared to 2,290,786 in 2023[384]. - Gross profit for 2024 was 629,138,downfrom629,138, down from 1,058,388 in 2023, reflecting a gross margin decline[384]. - Net income for 2024 was 102,658,asignificantdropfrom102,658, a significant drop from 438,936 in 2023, resulting in a diluted net income per share of 0.75[384].−Comprehensiveincomefor2024was0.75[384]. - Comprehensive income for 2024 was 98,294, down 78.1% from 447,830in2023[388].−Cashprovidedbyoperatingactivitiesin2024was447,830 in 2023[388]. - Cash provided by operating activities in 2024 was 513,693, a decrease of 26.2% from 696,780in2023[395].−TotalrevenuefortheyearendedDecember31,2024,was696,780 in 2023[395]. - Total revenue for the year ended December 31, 2024, was 1,330.4 million, a decrease of 41.9% from 2,290.8millionin2023[471].CashandLiquidity−EnphaseEnergyreportedcash,cashequivalents,restrictedcash,andmarketablesecuritiesof2,290.8 million in 2023[471]. Cash and Liquidity - Enphase Energy reported cash, cash equivalents, restricted cash, and marketable securities of 1,717.6 million as of December 31, 2024, compared to 1,695.0millionin2023,indicatingaslightincrease[355].−Cashandcashequivalentsroseto1,695.0 million in 2023, indicating a slight increase[355]. - Cash and cash equivalents rose to 369,110 in 2024 from 288,748in2023,indicatingimprovedliquidity[383].−Cashandcashequivalentsattheendof2024were288,748 in 2023, indicating improved liquidity[383]. - Cash and cash equivalents at the end of 2024 were 464,116, up from 288,748attheendof2023[395].−Totalcash,cashequivalents,andrestrictedcashincreasedto288,748 at the end of 2023[395]. - Total cash, cash equivalents, and restricted cash increased to 464.1 million in 2024 from 288.7millionin2023,reflectingagrowthof60.7288.7 million in 2023, reflecting a growth of 60.7%[396]. - The company's cash equivalents, restricted cash, and marketable securities totaled 1,539,890,000 as of December 31, 2024, with money market funds comprising 191,410,000[500].AssetsandLiabilities−TotalcurrentassetsasofDecember31,2024,were191,410,000[500]. Assets and Liabilities - Total current assets as of December 31, 2024, were 2,327,084, down from 2,443,518in2023[383].−Totalliabilitiesincreasedto2,443,518 in 2023[383]. - Total liabilities increased to 2,416,660 in 2024 from 2,399,388in2023,withlong−termdebtat2,399,388 in 2023, with long-term debt at 1,201,089[383]. - Accounts receivables as of December 31, 2024, were 223.7million,adeclineof50.1223.7 million, a decline of 50.1% compared to 446.0 million in 2023[472]. - Total contract liabilities increased to 579.2millionin2024from579.2 million in 2024 from 487.5 million in 2023, with 110.3millionrepresentingcashprepaymentsforproductstobedeliveredin2025[477].−Totalinventorydecreasedto110.3 million representing cash prepayments for products to be delivered in 2025[477]. - Total inventory decreased to 165.0 million in 2024 from 213.6millionin2023,withrawmaterialsat213.6 million in 2023, with raw materials at 38.7 million and finished goods at 126.3million[479].ResearchandDevelopment−Researchanddevelopmentexpensesdecreasedto126.3 million[479]. Research and Development - Research and development expenses decreased to 201,315 in 2024 from 227,336in2023,indicatingareductionininvestmentinnewtechnologies[384].−TheCompanyexpensesresearchanddevelopmentcostsasincurred,whichprimarilyconsistofexpensedequipmentforproductdevelopment,personnelcosts,andotherprofessionalcosts[457].WarrantyandImpairment−Thecompany′swarrantyobligationsincreasedto227,336 in 2023, indicating a reduction in investment in new technologies[384]. - The Company expenses research and development costs as incurred, which primarily consist of expensed equipment for product development, personnel costs, and other professional costs[457]. Warranty and Impairment - The company's warranty obligations increased to 192,889 in 2024 from 189,087in2023,reflectingongoingcommitmentstoproductreliability[383].−Thewarrantytermformicroinverterunitsistypically15yearsforfirstandsecondgenerationunitsandupto25yearsforsubsequentgenerationunits[443].−TheCompanyrecordedassetimpairmentchargesof189,087 in 2023, reflecting ongoing commitments to product reliability[383]. - The warranty term for microinverter units is typically 15 years for first and second generation units and up to 25 years for subsequent generation units[443]. - The Company recorded asset impairment charges of 2.3 million, 5.7million,andzerofortheyearsendedDecember31,2024,2023,and2022,respectively,relatedtopropertyandequipment[432].−TheCompanyrecordedintangibleassetimpairmentchargesof5.7 million, and zero for the years ended December 31, 2024, 2023, and 2022, respectively, related to property and equipment[432]. - The Company recorded intangible asset impairment charges of 3.5 million, 3.8million,andzerofortheyearsendedDecember31,2024,2023,and2022,respectively,associatedwithdevelopedtechnologyandcustomerrelationshipintangibleassets[441].−Thecompanyrecordeda3.8 million, and zero for the years ended December 31, 2024, 2023, and 2022, respectively, associated with developed technology and customer relationship intangible assets[441]. - The company recorded a 3.5 million impairment charge for developed technology and customer relationships for the year ended December 31, 2024, due to a decline in fair value[499]. Acquisitions - The acquisition of GreenCom Networks AG was completed for approximately 34.9million,enhancingthecompany′sengineeringcapabilitiesinEurope[484].−TheacquisitionofGreenComwascompletedforapproximately34.9 million, enhancing the company's engineering capabilities in Europe[484]. - The acquisition of GreenCom was completed for approximately 34.9 million, with net assets acquired valued at 34,896,000,including34,896,000, including 16,536,000 in goodwill attributed to expected synergies in solar offerings[485][491]. - The fair value of identifiable intangible assets from the GreenCom acquisition totaled 13,900,000,withdevelopedtechnologyvaluedat13,900,000, with developed technology valued at 8,000,000 and customer relationships at 5,900,000,bothamortizedover5years[488].−TheacquisitionofSolarLeadFactorywascompletedforapproximately5,900,000, both amortized over 5 years[488]. - The acquisition of SolarLeadFactory was completed for approximately 26.1 million, with net assets acquired valued at 26,051,000,including26,051,000, including 12,612,000 in goodwill expected to be deductible for U.S. federal income tax purposes over 15 years[490][491]. - The fair value of identifiable intangible assets from the SolarLeadFactory acquisition totaled 11,200,000,withdevelopedtechnologyvaluedat11,200,000, with developed technology valued at 3,600,000 and customer relationships at 7,600,000,bothamortizedover5years[494].ForeignCurrencyandRiskManagement−Salesdenominatedineurosaccountedfor217,600,000, both amortized over 5 years[494]. Foreign Currency and Risk Management - Sales denominated in euros accounted for 21% of net revenues in 2024, down from 28% in 2023 and 17% in 2022, reflecting fluctuations in foreign currency exposure[351]. - The company anticipates that a hypothetical 10% adverse change in foreign exchange rates would not materially impact its financial condition or results of operations[352]. - The company has not engaged in any foreign currency hedging transactions, indicating a straightforward approach to managing currency risk[352]. - The company reported a foreign currency translation adjustment of (4,715) in 2024, compared to a gain of 1,190in2023[392].OperationalRisks−Manufacturingproblemscouldleadtodelaysinproductshipments,adverselyaffectingrevenueandcompetitiveposition[19].−EnphaseEnergy′sexpectationsregardingdemandforitsproductsarecriticalforfuturefinancialperformance,withpotentialimpactsfrommacroeconomiceventsandsupplychaindisruptions[16].−Thecompanyfacesrisksrelatedtothereductionorexpirationofgovernmentsubsidiesforsolarenergy,whichcouldnegativelyaffectdemandforitsproducts[19].StockholderEquityandRepurchase−Thecompanyrepurchased1,190 in 2023[392]. Operational Risks - Manufacturing problems could lead to delays in product shipments, adversely affecting revenue and competitive position[19]. - Enphase Energy's expectations regarding demand for its products are critical for future financial performance, with potential impacts from macroeconomic events and supply chain disruptions[16]. - The company faces risks related to the reduction or expiration of government subsidies for solar energy, which could negatively affect demand for its products[19]. Stockholder Equity and Repurchase - The company repurchased 391,364 worth of common stock in 2024, slightly down from 409,998in2023[395].−Totalstockholders′equityattheendof2023was409,998 in 2023[395]. - Total stockholders' equity at the end of 2023 was 983,624, an increase from $825,573 at the end of 2022[391].