Enphase Energy Inc

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 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.

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 September 30, 2024, we have shipped approximately 78.0 million microinverters, and over 4.5 million Enphase residential and commercial systems have been deployed in more than 160 countries.

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 half of 2024. This demand environment has negatively impacted several distributors and installers, resulting in reduced liquidity, bankruptcy and business closures, which has affected our revenue, days sales outstanding, and allowances for doubtful accounts. The slower demand environment also resulted in elevated inventory with distributors and installers in past quarters, and as a result we sold fewer microinverters to distributors and installers during the first half of 2024 compared to the first half of 2023 in response to this slower demand environment.

Current 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 third quarter of 2023 in Europe that continued into 2024. This demand environment has negatively impacted several distributors and installers, resulting in reduced liquidity, bankruptcy and business closures, which has affected our revenue and profitability, days sales outstanding and allowances for doubtful accounts. The slower demand environment also resulted in elevated inventory with distributors and installers in past quarters, and as a result we sold fewer microinverters to distributors and installers during the nine months ended September 30, 2024 compared to the same period in 2023 in response to this slower demand environment.

Previous 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.

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 beginning in the third quarter 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 the fourth quarter of 2024.

Previous 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.

Current wording

IQ Microinverters. We ship IQ8™ series microinverters into 51 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, Vietnam, and 13 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, 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.

Current wording

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, Luxembourg, Finland, 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 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.

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, Luxembourg, and Belgium. 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. 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, which support both J1772 and North American Charging Standard (“NACS”) connectors with a charging power range between 32 amperes and 64 amperes.

Previous wording

Net revenues decreased by $407.7 million, or 57%, in the three months ended June 30, 2024, as compared to the same period in 2023, driven primarily by a 73% decrease in microinverter units shipped, partially offset by an increase in average selling price (“ASP”) for our microinverters as we sold more IQ8 microinverters relative to IQ7™ microinverters. During the three months ended June 30, 2024, we sold approximately 1.4 million microinverter units as compared to approximately 5.2 million microinverter units in the three months ended June 30, 2023. The decrease in total net revenues was partially also offset by a 46% increase in IQ Batteries Megawatt-hours (“MWh”) shipped. During the three months ended June 30, 2024, we shipped 120.2 MWh of IQ Batteries as compared to 82.3 MWh shipped in the three months ended June 30, 2023.

Current wording

Net revenues decreased by $170.2 million, or 31%, in the three months ended September 30, 2024, as compared to the same period in 2023, driven primarily by a 56% decrease in microinverter units shipped, partially offset by an increase in average selling price (“ASP”) for our microinverters as we sold more IQ8 microinverters relative to IQ7™ microinverters. During the three months ended September 30, 2024, we sold approximately 1.7 million microinverter units, as compared to approximately 3.9 million microinverter units in the three months ended September 30, 2023. The decrease in net revenues was also partially offset by a 101% increase in IQ Batteries Megawatt-hours (“MWh”) shipped. During the three months ended September 30, 2024, we shipped 172.9 MWh of IQ Batteries, as compared to 86.2 MWh shipped in the three months ended September 30, 2023.

Previous wording

Net revenues decreased by $870.3 million, or 61%, in the six months ended June 30, 2024, as compared to the same period in 2023, driven primarily by a 72% decrease in microinverter units shipped, partially offset by an increase in ASP for our microinverters as we sold more IQ8 microinverters relative to IQ7™ microinverters. During the six months ended June 30, 2024, we sold approximately 2.8 million microinverter units as compared to approximately 10.0 million microinverter units in the six months ended June 30, 2023. The decrease in total net revenues was partially also offset by a 6% increase in IQ Batteries MWh shipped. During the six months ended June 30, 2024, we shipped 195.7 MWh of IQ Batteries as compared to 184.7 MWh shipped in the six months ended June 30, 2023.

Current wording

Net revenues decreased by $1.0 billion, or 52%, in the nine months ended September 30, 2024, as compared to the same period in 2023, driven primarily by a 68% decrease in microinverter units shipped, partially offset by an increase in ASP for our microinverters as we sold more IQ8 microinverters relative to IQ7 microinverters. During the nine months ended September 30, 2024, we sold approximately 4.5 million microinverter units, as compared to approximately 13.9 million microinverter units in the nine months ended September 30, 2023. The decrease in net revenues was also partially offset by a 36% increase in IQ Batteries MWh shipped. During the nine months ended September 30, 2024, we shipped 368.6 MWh of IQ Batteries, as compared to 270.9 MWh shipped in the nine months ended September 30, 2023.

Previous 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.

Current wording

The overall decrease in net revenues during both the three and nine months ended September 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 third quarter 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 nine months ended September 30, 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 from 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 $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”).

Current wording

Cost of revenues decreased by $86.4 million, or 30%, in the three months ended September 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 $46.6 million in the three months ended September 30, 2024, as compared to $18.5 million in the same period in 2023, under the Advanced Manufacturing Production Tax Credit (“AMPTC”) enacted under the IRA for U.S. manufactured microinverters shipped to customers. The benefit recognized from the AMPTC was partially offset by $11.4 million and $4.1 million of incremental cost for manufacturing in the United States in the three months ended September 30, 2024 and September 30, 2023, respectively, thereby providing a net benefit of $35.2 million and $14.4 million, respectively (“Net IRA benefit”).

Previous 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.

Current wording

Gross margin decreased by 0.7 percentage points in the three months ended September 30, 2024, as compared to the same period in 2023. The decrease was primarily due to product mix, relatively higher fixed overhead costs and a $4.6 million higher warranty expense for changes in estimates in the three months ended September 30, 2024, as compared to a $2.0 million lower warranty expense for changes in estimates in the three months ended September 30, 2023, partially offset by the recognition of a 9.2 percentage point Net IRA benefit in the three months ended September 30, 2024, as compared to a 2.6 percentage point Net IRA benefit in the three months ended September 30, 2023, and an increase in ASP for microinverters.

Previous wording

Cost of revenues decreased by $473.3 million, or 60%, in the six months ended June 30, 2024, as compared to the same period in 2023, primarily due to the lower volume of microinverter units, as well as from the benefit recognized from tax credits of $42.9 million under the AMPTC for U.S. manufactured microinverters shipped to customers during the six months ended June 30, 2024, partially offset by $10.8 million incremental cost for manufacturing in the U.S., thereby providing a Net IRA benefit of $32.1 million.

Current wording

Cost of revenues decreased by $559.7 million, or 52%, in the nine months ended September 30, 2024, as compared to the same period in 2023, primarily due to the lower volume of microinverter units, as well as from the benefit recognized from tax credits of $89.5 million in the nine months ended September 30, 2024, as compared to $20.6 million in the same period in 2023, under the AMPTC for U.S. manufactured microinverters shipped to customers. The benefit recognized from the AMPTC was partially offset by $22.2 million and $4.5 million of incremental cost for manufacturing in the United States in the nine months ended September 30, 2024 and September 30, 2023, respectively, thereby providing a Net IRA benefit of $67.3 million and $16.1 million, respectively.

Previous wording

Gross margin decreased by 0.6 percentage points in the six 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 a 5.7 percentage point Net IRA benefit and an increase in ASP for microinverters in the six months ended June 30, 2024.

Current wording

Gross margin decreased by 0.4 percentage points in the nine months ended September 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 the recognition of a 7.1 percentage point Net IRA benefit in the nine months ended September 30, 2024, as compared to a 0.8 percentage point Net IRA benefit in the same period in 2023, and an increase in ASP for microinverters.

Previous wording

Research and development expense decreased by $11.2 million, or 19%, in the three 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 (as defined below) that lowered personnel-related expenses by $7.6 million due to a reduction in headcount and equipment and professional services costs by $3.6 million. 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 $7.0 million, or 13%, in the three months ended September 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 (as defined below) that lowered personnel-related expenses by $4.0 million due to a reduction in headcount and equipment, and professional services costs by $3.0 million. In the fourth quarter of 2023, we implemented a restructuring plan (the “2023 Restructuring Plan”) designed to increase operational efficiencies and execution, reduce operating costs, and better align our workforce and cost structure with current market conditions, and our business needs, strategic priorities and ongoing commitment to profitable growth. 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

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.

Current wording

Research and development expense decreased by $21.1 million, or 12%, in the nine months ended September 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 $10.6 million and personnel-related expenses by $10.5 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

Sales and marketing expense decreased by $6.6 million, or 11% in the three 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 professional services and advertising costs by $5.2 million and personnel-related expenses by $1.4 million due to a reduction in headcount.

Current wording

Sales and marketing expense decreased by $5.7 million, or 10%, in the three months ended September 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 professional services and advertising costs by $4.3 million and personnel-related expenses by $1.4 million due to a reduction in headcount.

Previous wording

Sales and marketing expense decreased by $17.9 million, or 15%, 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 professional services and advertising costs by $9.8 million and personnel-related expenses by $8.1 million due to a reduction in headcount.

Current wording

Sales and marketing expense decreased by $23.6 million, or 13%, in the nine months ended September 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 professional services and advertising costs by $14.2 million and personnel-related expenses by $9.4 million due to a reduction in headcount.

Previous wording

General and administrative expense decreased by $0.8 million, or 2%, in the three 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 $1.8 million due to a reduction in headcount, partially offset by a $1.0 million increase in facility and corporate expenses.

Current wording

General and administrative expense decreased by $3.6 million, or 11%, in the three months ended September 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 professional services and facilities expense.

Previous 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.

Current wording

General and administrative expense decreased by $5.5 million, or 5%, in the nine months ended September 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 professional services and facilities expense by $3.6 million and lower personnel-related costs by $1.9 million due to a reduction in headcount.

Previous 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”).

Current wording

Restructuring and asset impairment charges incurred in connection with the 2023 Restructuring Plan increased by $0.7 million, or 100%, in the three months ended September 30, 2024, as compared to the same period in 2023.

Previous wording

Restructuring charges of $1.2 million in the three months ended June 30, 2024, primarily consisted of $0.9 million of employee related expenses, $0.3 million of contract termination charges and less than $0.1 million of asset impairment charges. Restructuring charges of $0.2 million in the three months ended June 30, 2023, primarily consisted of one-time termination benefits and other employee-related expenses.

Current wording

Restructuring charges of $0.7 million in the three months ended September 30, 2024, primarily consisted of $0.6 million of asset impairment charges and $0.1 million of one-time termination benefits and other employee-related expenses.

Previous 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.

Current wording

Restructuring charges of $3.8 million in the nine months ended September 30, 2024, primarily consisted of $1.6 million of contract termination charges, $1.2 million of employee severance, one-time benefits and other employee related expenses, and $1.0 million of asset impairment charges. Restructuring charges of $0.9 million in the three months ended September 30, 2023, primarily consisted of one-time termination benefits and other employee-related expenses.

Previous wording

Interest income of $38.9 million increased in the six months ended June 30, 2024, as compared to $29.6 million for the six months ended June 30, 2023, primarily due to an increase in interest rates.

Current wording

Interest income of $20.0 million increased in the three months ended September 30, 2024, as compared to $19.7 million for the three months ended September 30, 2023, primarily due to higher average balances.

Previous 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.

Current wording

Other expense, net, of $16.8 million in the three months ended September 30, 2024, primarily related to a $17.0 million impairment of investment in a private company and a $0.5 million net loss due to foreign currency denominated monetary assets and liabilities, partially offset by $0.6 million non-cash net gain related to change in the fair value of debt securities and $0.1 million in realized gain on investments. Other income, net, of $1.9 million expense in the three months ended September 30, 2023 related to a $1.9 million non-cash net gain related to a change in the fair value of debt securities and a $0.1 million net gain due to foreign currency denominated monetary assets and liabilities, partially offset by $0.1 million in realized loss on investments.

Previous 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.

Current wording

Interest income of $58.9 million increased in the nine months ended September 30, 2024, as compared to $49.2 million for the nine months ended September 30, 2023, primarily due to an increase in interest rates.

Previous 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.

Current wording

Interest expense of $6.7 million in the nine months ended September 30, 2024, primarily included $6.7 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 $6.6 million in the nine months ended September 30, 2023, primarily related to $6.6 million for coupon interest expense, debt discount amortization with the Notes due 2025, and amortization of debt issuance costs with the Notes due 2023, Notes due 2025, Notes due 2026 and Notes due 2028.

Previous wording

Other income, net, of $7.5 million in the six months ended June 30, 2024, primarily related to $6.0 million impairment of investment in a private company, $1.0 million non-cash net loss related to change in the fair value of debt securities, and $0.5 million net loss due to foreign currency denominated monetary assets and liabilities. Other income, net, of $0.4 million in the six months ended June 30, 2023, primarily related to a $3.9 million non-cash net gain related to a change in the fair value of debt securities, partially offset by a $3.5 million net loss due to foreign currency denominated monetary assets and liabilities.

Current wording

Other expense, net, of $24.3 million in the nine months ended September 30, 2024, primarily related to $23.0 million impairment of investments in private companies, $1.1 million net loss due to foreign currency denominated monetary assets and liabilities, and $0.3 million non-cash net loss related to change in the fair value of debt securities, partially offset by $0.1 million in realized gain on investments. Other income, net, of $2.3 million in the nine months ended September 30, 2023, primarily related to a $5.4 million non-cash net gain related to a change in the fair value of debt securities and $0.4 million in realized gain on investments, partially offset by a $3.5 million net loss due to foreign currency denominated monetary assets and liabilities.

Previous wording

The income tax provision was $5.0 million in the six months ended June 30, 2024, as compared to an income tax provision of $59.5 million in the same period in 2023. The decrease was primarily due to tax expense from equity compensation shortfalls, offset by 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.

Current wording

The income tax provision was $5.0 million in the three months ended September 30, 2024, as compared to an income tax provision of $23.4 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 the same period in 2023, and tax expense from equity compensation shortfalls, partially offset by a discrete tax benefit from the impairment of an investment in a private company.

Previous 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.

Current wording

The income tax provision was $10.0 million in the nine months ended September 30, 2024, as compared to an income tax provision of $82.9 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 the same period in 2023, and tax expense from equity compensation shortfalls, partially offset by a discrete tax benefit from the impairment of an investment in a private company.

Previous wording

As of June 30, 2024, we had $1.7 billion in net working capital, including cash, cash equivalents and marketable securities of $1.6 billion, of which approximately $1.6 billion were held in the United States. Our cash, cash equivalents and marketable securities primarily consist of U.S. treasuries, money market mutual funds, corporate notes, commercial paper and bonds and both interest-bearing and non-interest-bearing deposits, with the remainder held in various foreign subsidiaries. We consider amounts held outside the United States to be accessible and have provided for the estimated income tax liability on the repatriation of our foreign earnings.

Current wording

As of September 30, 2024, we had $1.8 billion in net working capital, including cash, cash equivalents and marketable securities of $1.8 billion, of which approximately $1.7 billion were held in the United States. Our cash, cash equivalents and marketable securities primarily consist of U.S. treasuries, money market mutual funds, corporate notes, commercial paper and bonds and both interest-bearing and non-interest-bearing deposits, with the remainder held in various foreign subsidiaries. We consider amounts held outside the United States to be accessible and have provided for the estimated income tax liability on the repatriation of our foreign earnings.

Previous 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.

Current wording

Our cash, cash equivalents and marketable securities decreased by $17.3 million for the nine months ended September 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 six months ended June 30, 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 $8.6 million for the nine months ended September 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 June 30, 2024, we repurchased 891,896 shares, for an aggregate amount of $99.9 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 September 30, 2024, we repurchased 434,947 shares, for an aggregate amount of $49.8 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 $339.2 million for the six months ended June 30, 2024, as compared to the same period in 2023, primarily due to lower revenue.

Current wording

Cash flows from operating activities consisted of our net income 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 $314.9 million for the nine months ended September 30, 2024, as compared to the same period in 2023, primarily due to lower revenue.

Previous 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.

Current wording

For the nine months ended September 30, 2024, net cash used in investing activities of $122.4 million was primarily from the purchase of $96.9 million of marketable securities, net of maturity and sale, partially offset by $25.5 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 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.

Current wording

For the nine months ended September 30, 2023, net cash used in investing activities of $442.4 million was primarily from the maturity and sale of $337.1 million of marketable securities, net of purchases and $90.3 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, and $15.0 million used in the investment in a private company.

Previous 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.

Current wording

For the nine months ended September 30, 2024, net cash used in financing activities of approximately $257.5 million was primarily from $191.7 million used to repurchase our common stock under the 2023 Repurchase Program, payment of $73.8 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 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.

Current wording

For the nine months ended September 30, 2023, net cash used in financing activities of approximately $401.8 million was primarily from $310.0 million used to repurchase our common stock under our share repurchase programs, and the payment of $93.1 million in employee withholding taxes related to net share settlement of equity awards, partially offset by $1.3 million net proceeds from employee stock option exercises and purchases under our employee stock purchase plan.

Previous wording

Our condensed consolidated financial statements are prepared in accordance with GAAP. In connection with the preparation of our condensed consolidated financial statements, we are required to make assumptions and estimates about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We base our assumptions, estimates and judgments on historical experience, current trends and other factors that management believes to be relevant at the time our condensed consolidated financial statements are prepared. On a regular basis, we review the accounting policies, assumptions, estimates and judgments to ensure that our condensed consolidated financial statements are presented fairly and in accordance with GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates. To the extent that there are material differences between these estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected.

Current wording

Our condensed consolidated financial statements are prepared in accordance with Generally Accepted Accounting Principles (“GAAP”). In connection with the preparation of our condensed consolidated financial statements, we are required to make assumptions and estimates about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We base our assumptions, estimates and judgments on historical experience, current trends and other factors that management believes to be relevant at the time our condensed consolidated financial statements are prepared. On a regular basis, we review the accounting policies, assumptions, estimates and judgments to ensure that our condensed consolidated financial statements are presented fairly and in accordance with GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates. To the extent that there are material differences between these estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected.