Enphase Energy Inc

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements reflecting our current expectations and involves risks and uncertainties. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “intend,” “potential” or “continue” or the negative of these terms or other comparable terminology. Such statements, include but are not limited to statements regarding: our expectations as to future financial performance, including expenses, liquidity sources and cash requirements; the capabilities, performance and competitive advantage of our technology and products and planned changes; timing of new product releases, and the anticipated market adoption of our current and future products; our expectations regarding demand for our products; our business strategies, including anticipated trends and operating conditions; growth of and development in markets we target, and our expansion into new and existing markets; our performance in operations, including factors affecting our supply chain; our product quality and customer service; our expectations regarding geopolitical developments, such as the conflicts in Russia-Ukraine and Israel and the Gaza Strip and inflationary pressures and their impact on our business operations, financial performance and the markets in which we, our suppliers, manufacturers and installers operate; and the importance of and anticipated benefits from government incentives for solar products, including through changes in the tax laws, rules and regulations. You should be aware that the forward-looking statements contained in this report are based on our current views and assumptions, and are subject to known and unknown risks, uncertainties and other factors that may cause actual events or results to differ materially. For a discussion identifying some of the important factors that could cause actual results to vary materially from those anticipated in the forward-looking statements, see below, those discussed in the section entitled “Risk Factors” herein and those included in our Annual Report on Form 10-K for the year ended December 31, 2023 filed on February 9, 2024 (the “Form 10-K”). Unless the context requires otherwise, references in this report to “Enphase,” “we,” “us” and “our” refer to Enphase Energy, Inc. and its consolidated subsidiaries.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements reflecting our current expectations and involves risks and uncertainties. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “intend,” “potential” or “continue” or the negative of these terms or other comparable terminology. Such statements, include but are not limited to statements regarding: our expectations as to future financial performance, including expenses, liquidity sources and cash requirements; the capabilities, performance and competitive advantage of our technology and products and planned changes; timing of new product releases, and the anticipated market adoption of our current and future products; our expectations regarding demand for our products; our business strategies, including anticipated trends and operating conditions; growth of and development in markets we target, and our expansion into new and existing markets; our performance in operations, including factors affecting our supply chain; our product quality and customer service; our expectations regarding the macroeconomic environment, geopolitical developments that may impact our business operations, financial performance and the markets in which we, our suppliers, manufacturers and installers operate; and the importance of and anticipated benefits from government incentives for solar products, including through changes in the tax laws, rules and regulations. You should be aware that the forward-looking statements contained in this report are based on our current views and assumptions, and are subject to known and unknown risks, uncertainties and other factors that may cause actual events or results to differ materially. For a discussion identifying some of the important factors that could cause actual results to vary materially from those anticipated in the forward-looking statements, see below, those discussed in the section entitled “Risk Factors” herein and those included in our Annual Report on Form 10-K for the year ended December 31, 2023 filed on February 9, 2024 (the “Form 10-K”). Unless the context requires otherwise, references in this report to “Enphase,” “we,” “us” and “our” refer to Enphase Energy, Inc. and its consolidated subsidiaries.

Previous wording

We are a global energy technology company. We deliver smart, easy-to-use solutions that manage solar generation, storage and communication on one platform. Our intelligent microinverters work with virtually every solar panel made, and when paired with our smart technology, result in one of the industry’s best-performing clean energy systems. As of March 31, 2024, we have shipped approximately 75 million microinverters, and over 4.1 million Enphase residential and commercial systems have been deployed in more than 150 countries.

Current wording

We are a global energy technology company. We deliver smart, easy-to-use solutions that manage solar generation, storage and communication on one platform. Our intelligent microinverters work with virtually every solar panel made, and when paired with our smart technology, result in one of the industry’s best-performing clean energy systems. As of June 30, 2024, we have shipped approximately 76.3 million microinverters, and over 4.3 million Enphase residential and commercial systems have been deployed in more than 150 countries.

Previous wording

As we have a growing global footprint, we are subject to risk and exposure from the evolving macroeconomic environment, including the effects of increased global inflationary pressures and interest rates, fluctuations in foreign currency exchange rates, potential economic slowdowns or recessions and geopolitical pressures, including the unknown impacts of current and future trade regulations and the armed conflicts in Ukraine, the Gaza Strip and nearby areas. We continuously monitor the direct and indirect impacts of these circumstances on our business and financial results.

Current wording

As we have a growing global footprint, we are subject to risk and exposure from the evolving macroeconomic environment, including the effects of increased global inflationary pressures, tariffs and interest rates, fluctuations in foreign currency exchange rates, potential economic slowdowns or recessions, geopolitical pressures and potential regulatory changes through future legislative action or by a new presidential administration, including the unknown impacts of current and future trade regulations. We continuously monitor the direct and indirect impacts of these circumstances on our business and financial results.

Previous wording

Demand for Products. The demand environment for our products experienced a broad-based slowdown beginning in the second quarter of 2023 in the United States and in the second half of 2023 in Europe that continued into the first quarter of 2024. This resulted in elevated inventory with distributors and installers, and as a result we sold fewer microinverters to distributors and installers during the second half of 2023 compared to the first half of 2023 as they responded to this slower demand environment. In the United States, this slowdown was primarily the result of higher interest rates and the transition from Net Energy Metering 2.0 (“NEM 2.0”) to Net Energy Metering 3.0 (“NEM 3.0”) in California, which has increased the payback period for our customers in California. In Europe, this slowdown was primarily the result of a decrease in purchases in the second half of 2023 after the initial surge of sales related to onset of the armed conflict in Ukraine in 2022, and overall channel inventory correction. In addition, there has been increased uncertainty in net energy metering policies and solar export penalties in a key European market. The phase out of net energy metering in that market was ultimately not approved but solar export penalties are still causing uncertainty among consumers. We expect some of these trends in the United States and Europe to continue to have an adverse effect on our revenue in 2024.

Current wording

In the United States, this slowdown was primarily the result of higher interest rates and the transition from Net Energy Metering 2.0 (“NEM 2.0”) to Net Energy Metering 3.0 (“NEM 3.0”) in California, which has increased the payback period for our customers in California. In Europe, this slowdown was primarily the result of a decrease in purchases in the second half of 2023 after the initial surge of sales related to onset of the armed conflict in Ukraine in 2022, and overall channel inventory correction. In addition, there has been increased uncertainty in net energy metering policies and solar export penalties in a key European market. The phase out of net energy metering in that market was ultimately not approved but solar export penalties are still causing uncertainty among consumers. While we believe we have made the appropriate corrections to our channel inventory, some of the foregoing trends in the United States and Europe could continue to have an adverse effect on our results of operations in 2024.

Previous wording

IQ Microinverters. We ship IQ8™ series microinverters into 24 countries worldwide. We are also shipping IQ8 Microinverters with peak output power of 480 W AC for the small-commercial market in North America, and grid-tied applications in South Africa, Mexico, Brazil, India, Vietnam, Thailand, the Philippines, France, Spain, Columbia, Panama and Costa Rica. The new IQ8 Microinverters are designed to maximize energy production and can manage a continuous DC current of 14 amperes, supporting higher powered solar modules through increased energy harvesting.

Current wording

IQ Microinverters. We ship IQ8™ series microinverters into 43 countries worldwide. We are also shipping IQ8 Microinverters with peak output power of 480 W AC for the small-commercial market in North America, and grid-tied applications in South Africa, Mexico, Brazil, India, Thailand, the Philippines, France, Spain, Columbia, Panama, Costa Rica, and nine Caribbean countries. The new IQ8 Microinverters are designed to maximize energy production and can manage a continuous DC current of 14 amperes, supporting higher powered solar modules through increased energy harvesting.

Previous wording

IQ Batteries. Our Enphase IQ Battery storage systems, with usable and scalable capacity of 10.1 kWh and 3.4 kWh for the United States, and 10.5 kWh and 3.5 kWh for Europe and other international countries, are based on our Ensemble OS™ energy system, which powers the world’s first grid-independent microinverter-based storage systems. We currently ship our Enphase IQ Battery storage systems to customers in the United States, Canada, Mexico, Belgium, Germany, Austria, France, the Netherlands, Switzerland, Spain, Portugal, Sweden, Denmark and Greece. Enphase IQ Batteries in Europe can be installed with both single-phase and three-phase third-party solar energy inverters, enabling homeowners to upgrade their existing home solar systems with a residential battery storage solution that reduces costs while providing increased self-reliance.

Current wording

IQ Batteries. Our Enphase IQ Battery storage systems, with usable and scalable capacity of 10.1 kWh and 3.4 kWh for the United States, and 10.5 kWh and 3.5 kWh for Europe and other international countries, are based on our Ensemble OS™ energy system, which powers the world’s first grid-independent microinverter-based storage systems. We currently ship our Enphase IQ Battery storage systems to customers in the United States, Puerto Rico, Canada, Mexico, Australia, New Zealand, Belgium, Germany, the United Kingdom, Italy, Austria, France, the Netherlands, Switzerland, Spain, Portugal, Sweden, Denmark and Greece. Enphase IQ Batteries in Europe can be installed with both single-phase and three-phase third-party solar energy inverters, enabling homeowners to upgrade their existing home solar systems with a residential battery storage solution that reduces costs while providing increased self-reliance.

Previous wording

Our latest Enphase System, which features the new IQ® Battery 5P and IQ8 Microinverters. The IQ Battery 5P is modular with 5 kWh capacity and the IQ8 Microinverters provide a peak output power of 384 W. The IQ Battery 5P is also available for customers in Australia, the United States, Puerto Rico, the United Kingdom and Italy. The IQ

Current wording

Our latest Enphase Energy System, which features the new IQ® Battery 5P and IQ8 Microinverters. The IQ Battery 5P is modular with 5 kWh capacity and the IQ8 Microinverters provide a peak output power of 384 W. The IQ Battery 5P is available for customers in Australia, New Zealand, the United States, Puerto Rico, Mexico, Canada, the United Kingdom, Italy, France, the Netherlands, and Luxembourg. The IQ Battery 5P is modular by design and is designed to deliver 3.84 kW continuous power and 7.68 kW peak power, which allows homeowners to start heavy loads like air conditioners easily during power outages.

Previous wording

Electric Vehicle (“EV”) Chargers. The increasing penetration of EVs has implications for home energy management, as households not only consume significantly more power with an EV, but also have a large battery that can be used for both backup and grid service. Our EV chargers are compatible with most EVs sold in North America. Customers are able to purchase Enphase-branded EV chargers with a charging power range between 32 amperes and 64 amperes.

Current wording

Electric Vehicle (“EV”) Chargers. Our EV chargers are compatible with most EVs sold in North America. Customers are able to purchase Enphase-branded EV chargers with a charging power range between 32 amperes and 64 amperes.

Previous wording

Our smart Enphase IQ® EV Chargers sold in the United States and Canada are Wi-Fi-equipped and include smart control and monitoring capabilities. The IQ EV Charger is designed to seamlessly integrate into our solar and battery system to help homeowners maximize electricity cost savings by charging directly from solar energy.

Current wording

Our smart IQ® EV Chargers sold in the United States and Canada are Wi-Fi-equipped and include smart control and monitoring capabilities. The IQ EV Charger is designed to seamlessly integrate into our solar and battery system to help homeowners maximize electricity cost savings by charging directly from solar energy.

Previous wording

Net revenues decreased by $462.7 million, or 64%, in the three months ended March 31, 2024, as compared to the same period in 2023, driven primarily by a 71% and 26% decrease in microinverter units and IQ Batteries Megawatt-hours (“MWh”) shipped, respectively. We sold approximately 1.4 million microinverter units in the three months ended March 31, 2024, as compared to approximately 4.8 million units in the three months ended March 31, 2023. We shipped 75.5 MWh of IQ Batteries in the three months ended March 31, 2024, as compared to 102.4 MWh shipped in the three months ended March 31, 2023. The decrease in total net revenues was partially offset by an increase in average selling price (“ASP”) for our microinverters, primarily due to a favorable product mix as we sold more IQ8 microinverters relative to IQ7™ microinverters. The overall decrease in net revenues was due to a broad-based slowdown that began in the second quarter of 2023 in the United States and the second half of 2023 in Europe that resulted in elevated inventory with distributors and installers, and as a result we sold fewer microinverters to distributors and installers during the first quarter of 2024, as compared to the same period in 2023. In the United States, this slowdown was primarily the result of higher interest rates, high channel inventory and the transition from NEM 2.0 to NEM 3.0 in California. Higher interest rates resulted in larger monthly costs and longer pay-back periods for those customers who financed their systems. In Europe, this slowdown was primarily driven by a softer customer demand as utility rates dropped, policy changes were implemented, and the impacts of the Ukraine war were felt to be less impactful. This resulted in oversupply and the resulting channel inventory correction.

Current wording

The overall decrease in net revenues during both the three and six months ended June 30, 2024 as compared to the same periods in 2023 was due to a broad-based slowdown that began in the second quarter of 2023 in the United States and the second half of 2023 in Europe that resulted in elevated inventory with distributors and installers, and as a result we sold fewer microinverters to distributors and installers during the first half of 2024, as compared to the same period in 2023. In the United States, this slowdown was primarily the result of higher interest rates, high channel inventory and the transition from NEM 2.0 to NEM 3.0 in California. Higher interest rates resulted in larger monthly costs and longer pay-back periods for those customers who financed their systems. In Europe, this slowdown was primarily driven by a softer customer demand as utility rates dropped, policy changes were implemented, and the impacts of the Ukraine war were felt to be less impactful. This resulted in oversupply, financial stresses throughout the industry and the resulting channel inventory correction.

Previous wording

Cost of revenues decreased by $251.8 million, or 63%, in the three months ended March 31, 2024, as compared to the same period in 2023, primarily due to the lower volume of microinverter units and IQ Batteries shipped, as well as from the benefit recognized from tax credits of $18.6 million under the Advanced Manufacturing Production Tax Credit (“AMPTC”) enacted under the Inflation Reduction Act of 2022 for U.S. manufactured microinverters shipped to customers during the three months ended March 31, 2024.

Current wording

Cost of revenues decreased by $221.5 million, or 57%, in the three months ended June 30, 2024, as compared to the same period in 2023, primarily due to the lower volume of microinverter units shipped, as well as from the benefit recognized from tax credits of $24.3 million under the Advanced Manufacturing Production Tax Credit (“AMPTC”) enacted under the Inflation Reduction Act of 2022 for U.S. manufactured microinverters shipped to customers in the three months ended June 30, 2024, partially offset by $5.9 million incremental cost for manufacturing in the U.S., thereby providing a net benefit of $18.4 million (“Net IRA benefit”).

Previous wording

Gross margin decreased by 1.1 percentage points in the three months ended March 31, 2024, as compared to the same period in 2023. The decrease was primarily due to product mix and relatively higher fixed overheads, which was partially offset by (i) the benefit recognized from tax credits under the AMPTC of approximately 7.1 percentage points, (ii) a warranty benefit from change in estimates for a decrease in product replacement costs related to Enphase IQ Battery storage systems, and (iii) an increase in ASP for microinverters in the three months ended March 31, 2024.

Current wording

Gross margin decreased by 0.3 percentage points in the three months ended June 30, 2024, as compared to the same period in 2023. The decrease was primarily due to product mix and relatively higher fixed overhead costs, partially offset by recognition of 6.1 percentage point Net IRA benefit and an increase in ASP for microinverters in the three months ended June 30, 2024.

Previous wording

Research and development expense decreased by $2.9 million, or 5%, in the three months ended March 31, 2024, as compared to the same period in 2023. The decrease was primarily due to restructuring actions from the 2023 Restructuring Plan that lowered equipment costs by $4.0 million, partially offset by $1.1 million of higher personnel-related expenses. The increase in personnel-related expenses was primarily due to an increase in stock-based compensation costs due to the timing of retention programs for employees. The amount of research and development expenses may fluctuate from period to period due to the differing levels and stages of development activity for our products.

Current wording

Research and development expense decreased by $14.1 million, or 12% in the six months ended June 30, 2024, as compared to the same period in 2023. The decrease was primarily due to actions implemented in connection with the 2023 Restructuring Plan that lowered equipment and professional services costs by $7.6 million and personnel-related expenses by $6.5 million due to a reduction in headcount. The amount of research and development expenses may fluctuate from period to period due to the differing levels and stages of development activity for our products.

Previous wording

General and administrative expense decreased by $1.1 million, or 3%, in the three months ended March 31, 2024, as compared to the same period in 2023. The decrease was primarily due to restructuring actions from the 2023 Restructuring Plan that lowered facility and equipment costs by $0.9 million and legal and professional services by $0.2 million.

Current wording

General and administrative expense decreased by $1.9 million, or 3%, in the six months ended June 30, 2024, as compared to the same period in 2023. The decrease was primarily due to actions implemented in connection with the 2023 Restructuring Plan that lowered personnel-related costs by $1.7 million due to a reduction in headcount and professional services by $0.8 million, partially offset by a $0.6 million increase in corporate expenses.

Previous wording

Restructuring and asset impairment charges increased by $1.2 million, or 175%, in the three months ended March 31, 2024, as compared to the same period in 2023, as we implemented a new restructuring plan in the fourth quarter of 2023 to increase operational efficiencies, reduce operating costs, and to better align our workforce and cost structure with current market conditions, our business needs and strategic priorities.

Current wording

Restructuring and asset impairment charges incurred in connection with the 2023 Restructuring Plan increased by $1.0 million, or 562%, in the three months ended June 30, 2024, as compared to the same period in 2023, as we implemented a new restructuring plan in the fourth quarter of 2023 to increase operational efficiencies, reduce operating costs, and to better align our workforce and cost structure (the “2023 Restructuring Plan”).

Previous wording

Restructuring charges of $1.9 million in the three months ended March 31, 2024, primarily consisted of $1.3 million of contract termination charges, $0.3 million of asset impairment charges, and $0.3 million of employee severance and one-time benefits. Restructuring charges of $0.7 million in the three months ended March 31, 2023, primarily consisted of one-time termination benefits and other employee-related expenses.

Current wording

Restructuring charges of $3.1 million in the six months ended June 30, 2024, primarily consisted of $1.6 million of contract termination charges, $1.1 million of employee severance, one-time benefits and other employee related expenses, and $0.4 million of asset impairment charges. Restructuring charges of $0.9 million in the three months ended June 30, 2023, primarily consisted of one-time termination benefits and other employee-related expenses.

Previous wording

Interest income of $19.7 million increased in the three months ended March 31, 2024, as compared to $13.0 million for the three months ended March 31, 2023, primarily due to an increase in interest rates.

Current wording

Interest income of $19.2 million increased in the three months ended June 30, 2024, as compared to $16.5 million for the three months ended June 30, 2023, primarily due to an increase in interest rates.

Previous wording

Other income, net, of $0.1 million in the three months ended March 31, 2024, primarily related to $0.9 million non-cash net gain related to change in the fair value of debt securities, $0.1 million in realized gain on investments, partially offset by $0.9 million net loss due to foreign currency denominated monetary assets and liabilities. Other income, net, of $0.4 million in the three months ended March 31, 2023, primarily related to a $1.8 million non-cash net gain related to a change in the fair value of debt securities, partially offset by $1.4 million net loss due to foreign currency denominated monetary assets and liabilities.

Current wording

Other expense, net, of $7.6 million in the three months ended June 30, 2024, primarily related to $6.0 million impairment of investment in a private company, $1.9 million non-cash net loss related to change in the fair value of debt securities, $0.1 million in realized loss on investments, partially offset by $0.4 million net gain due to foreign currency denominated monetary assets and liabilities. Other expense, net of less than $0.1 million expense in the three months ended June 30, 2023 related to a $2.1 million net loss due to foreign currency denominated monetary assets and liabilities, partially offset by a $2.1 million non-cash net gain related to change in the fair value of debt securities and interest income.

Previous wording

Interest expense of $2.2 million in the three months ended March 31, 2024, primarily included $2.2 million for the coupon interest, debt discount amortization with the Notes due 2025 and amortization of debt issuance costs with the Notes due 2025, Notes due 2026 and Notes due 2028. Interest expense of $2.2 million in the three months ended March 31, 2023, primarily related to $2.2 million for the coupon interest expense, debt discount amortization with the Notes due 2025, amortization of debt issuance costs with the Notes due 2023, Notes due 2025, Notes due 2026 and Notes due 2028.

Current wording

Interest expense of $4.4 million in the six months ended June 30, 2024, primarily included $4.4 million for the coupon interest, debt discount amortization with the Notes due 2025 and amortization of debt issuance costs with the Notes due 2025, Notes due 2026 and Notes due 2028. Interest expense of $4.4 million in the six months ended June 30, 2023, primarily related to $4.4 million for coupon interest expense, debt discount amortization with the Notes due 2025, amortization of debt issuance costs with the Notes due 2023, Notes due 2025, Notes due 2026 and Notes due 2028.

Previous wording

The income tax provision was $4.6 million in the three months ended March 31, 2024, as compared to $32.1 million in the same period in 2023. The decrease was primarily due to tax expense from equity compensation shortfalls, offset by tax benefit from year-to-date loss before income taxes as the U.S. and foreign jurisdictions are less profitable in 2024 as compared to 2023.

Current wording

The income tax provision was $0.4 million in the three months ended June 30, 2024, as compared to an income tax provision of $27.4 million in the same period in 2023. The decrease was primarily due to lesser projected tax expense as our operations in U.S. and foreign jurisdictions were less profitable in 2024 as compared to 2023, partially offset by a discrete tax benefit from the impairment of an investment in a private company.

Previous wording

Our cash, cash equivalents and marketable securities decreased by $148.8 million for the three months ended March 31, 2024, as compared to the same period in 2023, primarily due to repurchases of common stock pursuant to our share repurchase program and payments of withholding taxes related to net share settlement of equity awards.

Current wording

Our cash, cash equivalents and marketable securities decreased by $154.1 million for the six months ended June 30, 2024, as compared to the same period in 2023, primarily due to repurchases of common stock pursuant to our share repurchase program and payments of withholding taxes related to net share settlement of equity awards, partially offset by cash generated from operations.

Previous wording

Total carrying amount of debt increased by $3.5 million for the three months ended March 31, 2024, as compared to the same period in 2023, primarily due to accretion of debt discount and issuance costs.

Current wording

Total carrying amount of debt increased by $3.5 million for the six months ended June 30, 2024, as compared to the same period in 2023, primarily due to accretion of debt discount and issuance costs.

Previous wording

Repurchase of Common Stock. In July 2023, our board of directors authorized a share repurchase program (the “2023 Repurchase Program”) pursuant to which we were authorized to repurchase up to $1.0 billion of our common stock. The repurchases could be funded from available working capital and could be executed from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases or privately negotiated transactions, including through Rule 10b5-1 plans. The program may be discontinued or amended at any time and expires on July 26, 2026. During the three months ended March 31, 2024, we repurchased 332,735 shares, for an aggregate amount of $42.0 million.

Current wording

Repurchase of Common Stock. In July 2023, our board of directors authorized a share repurchase program (the “2023 Repurchase Program”) pursuant to which we were authorized to repurchase up to $1.0 billion of our common stock. The repurchases could be funded from available working capital and could be executed from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases or privately negotiated transactions, including through Rule 10b5-1 plans. The program may be discontinued or amended at any time and expires on July 26, 2026. During the three months ended June 30, 2024, we repurchased 891,896 shares, for an aggregate amount of $99.9 million.

Previous wording

Cash flows from operating activities consisted of our net income (loss) adjusted for certain non-cash reconciling items, such as stock-based compensation expense, non-cash interest expense, change in the fair value of debt securities, deferred income taxes, asset impairment, depreciation and amortization, and changes in our operating assets and liabilities. Net cash provided by operating activities decreased by $197.0 million for the three months ended March 31, 2024, as compared to the same period in 2023, primarily due to lower revenue as well as relatively higher personnel-related and facility fixed costs.

Current wording

Cash flows from operating activities consisted of our net income (loss) adjusted for certain non-cash reconciling items, such as stock-based compensation expense, non-cash interest expense, change in the fair value of debt securities, deferred income taxes, asset impairment, depreciation and amortization, and changes in our operating assets and liabilities. Net cash provided by operating activities decreased by $339.2 million for the six months ended June 30, 2024, as compared to the same period in 2023, primarily due to lower revenue.

Previous wording

For the three months ended March 31, 2024, net cash provided by investing activities of $17.7 million was primarily from the maturities of $25.1 million of marketable securities, net of purchases, partially offset by $7.4 million used in purchases of test and assembly equipment for U.S. manufacturing, related facility improvements and information technology enhancements, including capitalized costs related to internal-use software.

Current wording

For the six months ended June 30, 2024, net cash used in investing activities of $9.9 million was primarily from the maturity and sale of $7.1 million of marketable securities, net of purchases, partially offset by $17.0 million used in purchases of test and assembly equipment for U.S. manufacturing, related facility improvements and information technology enhancements, including capitalized costs related to internal-use software.

Previous wording

For the three months ended March 31, 2023, net cash used in investing activities of $363.5 million was primarily from the purchase of $341.1 million marketable securities, net of sale and maturities, $22.5 million used in purchases of test and assembly equipment to expand our supply capacity, related facility improvements and information technology enhancements, including capitalized costs related to internal-use software companies.

Current wording

For the six months ended June 30, 2023, net cash used in investing activities of $427.6 million was primarily from the maturity and sale of $361.1 million of marketable securities, net of purchases and $66.5 million used in purchases of test and assembly equipment to expand our supply capacity, related facility improvements and information technology enhancements, including capitalized costs related to internal-use software.

Previous wording

For the three months ended March 31, 2024, net cash used in financing activities of approximately $100.9 million was primarily from payment of $60.0 million in employee withholding taxes related to net share settlement of equity awards, $42.0 million used to repurchase our common stock under our share repurchase program, and less than $0.1 million from the partial settlement of the Notes due 2025, partially offset by $1.2 million net proceeds from employee stock option exercises.

Current wording

For the six months ended June 30, 2024, net cash used in financing activities of approximately $201.5 million was primarily from $141.9 million used to repurchase our common stock under the 2023 Repurchase Program, payment of $67.5 million in employee withholding taxes related to net share settlement of equity awards, and less than $0.1 million from the partial settlement of the Notes due 2025, partially offset by $8.0 million net proceeds from employee stock option exercises and purchases under our employee stock purchase plan.

Previous wording

For the three months ended March 31, 2023, net cash used in financing activities of approximately $71.8 million was primarily from the payment of $71.8 million in employee withholding taxes related to net share settlement of equity awards.

Current wording

For the six months ended June 30, 2023, net cash used in financing activities of approximately $284.0 million was primarily from $200.0 million paid to repurchase our common stock under the 2021 Repurchase Program, and the payment of $84.6 million in employee withholding taxes related to net share settlement of equity awards, partially offset by $0.6 million net proceeds from employee stock option exercises and purchases under our employee stock purchase plan.

Previous wording

Our contractual obligations primarily consist of our Notes due 2028, Notes due 2026 and Notes due 2025, obligations under operating leases and inventory component purchases. As of March 31, 2024, there have been no material changes from our disclosure in the Form 10-K, except that the Notes due 2025 mature in less than a year and are classified as Debt, current on the condensed consolidated balance sheet as of March 31, 2024. For more information on our future minimum operating leases and inventory component purchase obligations as of March 31, 2024, refer to Note 10, “Commitments and Contingencies - Purchase Obligations” and for more information on our notes and other related debt, refer to Note 9, “Debt” of the notes to condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

Our contractual obligations primarily consist of the Notes due 2028, Notes due 2026 and Notes due 2025, obligations under operating leases and inventory component purchases. As of June 30, 2024, there have been no material changes from our disclosure in the Form 10-K, except that the Notes due 2025 mature in less than a year and are classified as Debt, current on the condensed consolidated balance sheet as of June 30, 2024. For more information on our future minimum operating leases and inventory component purchase obligations as of June 30, 2024, refer to Note 10, “Commitments and Contingencies - Purchase Obligations” and for more information on our notes and other related debt, refer to Note 9, “Debt” of the notes to condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

We consider an accounting policy to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the condensed consolidated financial statements.

Current wording

We consider an accounting policy to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the condensed consolidated financial statements. There have been no changes to our critical accounting policies as described in our Form 10-K for the year ended December 31, 2023.