Enphase Energy, Inc.

Previous wording

Changes in the United States trade environment, including the imposition of import tariffs, has and could adversely affect the amount or timing of our revenue, results of operations or cash flows.

Current wording

Changes in the United States trade environment, including the imposition of import tariffs, have and could adversely affect the amount or timing of our revenue, results of operations or cash flows.

Previous wording

On February 20, 2026, the U.S. Supreme Court ruled that tariffs imposed by the U.S. under IEEPA were invalid. The U.S. Supreme Court did not address refunds or remedies but instead remanded the matter to the Court of International Trade to address remedies. In response, the President issued an executive order rescinding the IEEPA tariffs and directing agencies to take measures to cease collection of the tariffs. However, a presidential proclamation was issued imposing a tariff surcharge of at least 10% under the balance of payments provision in Section 122 of the Trade Act of 1974 on all imports with certain exceptions for certain commodities (e.g., electronics, critical minerals) and United States-Mexico-Canada Agreement qualified products. The tariffs under this statute went into effect on February 24, 2026, and will remain in effect for 150 days (the maximum under the statute). The ultimate impact of these newly enacted and potential future tariffs or other restrictions on international trade will depend on various factors, including the ultimate level of tariffs, the duration such tariffs remain in place, and how other countries respond to U.S. tariffs. Due to broad uncertainty regarding the timing, content and extent of any regulatory changes in the United States or abroad, we cannot predict the impact, if any, that these changes could have to our business, financial condition and results of operations.

Current wording

On February 20, 2026, the U.S. Supreme Court ruled that tariffs imposed by the U.S. under IEEPA were invalid. The U.S. Supreme Court did not address refunds or remedies but instead remanded the matter to the Court of International Trade to address remedies. In response, the President issued an executive order rescinding the IEEPA tariffs and directing agencies to take measures to cease collection of the tariffs. However, a presidential proclamation was issued imposing a temporary import surcharge under Section 122. The surcharge was initially set at 10% ad valorem on all imports, and subsequently increased to 15%, the statutory maximum, with certain exceptions for specified commodities (e.g., electronics, critical minerals) and United States-Mexico-Canada Agreement qualified products. The surcharge took effect on February 24, 2026, for a maximum period of 150 days. On May 7, 2026, the U.S. Court of International Trade held that the Section 122 proclamation was invalid on the basis that it did not satisfy the statutory requirements of the Trade Act of 1974. The government has appealed the ruling, and the Federal Circuit issued a temporary stay pending appeal. With the expiration of the Section 122 tariffs, on July 23, 2026, the Administration announced new tariffs ranging from 10% to 12.5% on 60 trading partners as part of an investigation under Section 301 of the Trade Act of 1974 (“Section 301”) that began on June 2, 2026. The tariffs apply to many of the countries from who we source materials and can include some products material to our business. The evolving legal status, and expiration of the Section 122 tariffs creates additional uncertainty regarding our tariff exposure and any potential recovery of Section 122 duties paid during the quarter. The ultimate impact of these newly enacted and potential future tariffs or other restrictions on international trade will depend on various factors, including the ultimate level of tariffs, the duration such tariffs remain in place, and how other countries respond to U.S. tariffs. Due to broad uncertainty regarding the timing, content and extent of any regulatory changes in the United States or abroad, we cannot predict the impact, if any, that these changes could have to our business, financial condition and results of operations. If the Section 122 tariffs are ultimately invalidated and not replaced, we may benefit from reduced tariff costs on imported components; however, any replacement tariffs imposed under alternative statutory authorities, such as Section 301 or Section 232 of the Trade Expansion Act of 1962 or Section 338 of the Tariff Act of 1930, could result in tariff rates that are equal to or higher than the current Section 122 surcharge and could remain in effect for significantly longer periods.

Previous wording

We have moved a significant portion of our manufacturing to the United States, while retaining limited contract manufacturing in China and India. However, certain components necessary for our products are still required to be imported from outside the United States. For example, LFP battery cells used in our storage products are still supplied solely by two vendors in China. Although we are in the process of searching for other vendors outside of China for future supplies, the expertise and industry for the LFP battery cell is primarily in China, and it will require significant effort to identify qualified suppliers with the right expertise to develop our battery cells. The resulting environment of retaliatory trade or other practices or additional trade restrictions or barriers, if implemented on a broader range of products or components from outside the United States, could harm our ability to obtain necessary product components or to sell our products at prices customers are willing to pay, which could have a material adverse effect on our business, prospects, results of operations and cash flows.

Current wording

We have moved a significant portion of our manufacturing to the United States, while retaining limited contract manufacturing in China and India. However, certain components necessary for our products are still required to be imported from outside the United States. For example, LFP battery cells used in our storage products are still supplied solely by two vendors in China. Although we are in the process of searching for other vendors outside of China for future supplies, the expertise and industry for the LFP battery cell is primarily in China, and it will require significant effort to identify alternative, qualified suppliers with the right expertise to develop our battery cells. The resulting environment of retaliatory trade or other practices or additional trade restrictions or barriers, if implemented on a range of products or components that we source from outside the United States, could harm our ability to obtain necessary product components or to sell our products at prices customers are willing to pay, which could have a material adverse effect on our business, prospects, results of operations and cash flows.