FREMONT, Calif., Feb. 08, 2022 (GLOBE NEWSWIRE) -- Enphase Energy, Inc. (NASDAQ:ENPH), a global energy technology company and the world's leading supplier of microinverter-based solar and battery systems, announced today financial results for the fourth quarter of 2021, which included the summary below from its President and CEO, Badri Kothandaraman.

We reported record quarterly revenue of $412.7 million in the fourth quarter of 2021, along with 40.2% for non-GAAP gross margin. We shipped approximately 3,033,891 microinverters, or 1,082 megawatts DC, and 100.2 megawatt hours of Enphase IQ™ Batteries.

Financial highlights for the fourth quarter of 2021 are listed below.

Record revenue of $412.7 million
GAAP gross margin of 39.6%; non-GAAP gross margin of 40.2%
GAAP operating income of $57.7 million; non-GAAP operating income of $97.7 million
GAAP net income of $52.6 million; non-GAAP net income of $102.8 million
GAAP diluted earnings per share of $0.37; non-GAAP diluted earnings per share of $0.73
Cash flow from operations of $97.2 million
Ending cash, cash equivalents and marketable securities balance of $1.0 billion after completing $300.0 million of common stock repurchases in December 2021

Our revenue and earnings for the fourth quarter of 2021 are provided below, compared with those of the prior quarter and the year ago quarter:

(In thousands, except per share data and percentages)

	GAAP									Non-GAAP
	Q4 2021			Q3 2021			Q4 2020			Q4 2021			Q3 2021			Q4 2020
Revenue	$	412,719		$	351,519		$	264,839		$	412,719		$	351,519		$	264,839
Gross margin		39.6	%		39.9	%		46.0	%		40.2	%		40.8	%		40.2	%
Operating expenses	$	105,619		$	103,007		$	42,824		$	68,182		$	57,341		$	34,193
Operating income	$	57,695		$	37,351		$	79,114		$	97,725		$	85,932		$	72,356
Net income	$	52,591		$	21,809		$	72,991		$	102,779		$	84,157		$	71,342
Basic EPS	$	0.39		$	0.16		$	0.57		$	0.76		$	0.62		$	0.56
Diluted EPS	$	0.37		$	0.15		$	0.50		$	0.73		$	0.60		$	0.51

Our revenue and earnings for the fiscal year 2021 are given below, compared with those of the prior year:

(In thousands, except per share data and percentages)

	GAAP						Non-GAAP
	FY 2021			FY 2020			FY 2021			FY 2020
Revenue	$	1,382,049		$	774,425		$	1,382,049		$	774,425
Gross margin		40.1	%		44.7	%		40.7	%		40.1	%
Operating expenses	$	338,590		$	159,542		$	220,918		$	118,296
Operating income	$	215,832		$	186,439		$	341,054		$	192,504
Net income	$	145,449		$	133,995		$	340,314		$	188,526
Basic EPS	$	1.09		$	1.07		$	2.54		$	1.50
Diluted EPS	$	1.02		$	0.95		$	2.41		$	1.37

Total revenue increased 17%, compared to the third quarter of 2021. We were able to meet the surge in customer demand while successfully navigating supply constraints and logistics challenges. Strong demand for our IQ™ Microinverters continued in the fourth quarter of 2021, while shipments of our IQ Batteries increased approximately 53%, compared to the third quarter of 2021. Our non-GAAP gross margin was 40.2% in the fourth quarter of 2021, compared to 40.8% in the third quarter of 2021, primarily due to product mix.

Non-GAAP operating expenses increased to $68.2 million in the fourth quarter of 2021, compared to $57.3 million in the prior quarter, primarily due to additional investment in product launches, R&D, and IT infrastructure. Non-GAAP operating income was $97.7 million in the fourth quarter of 2021, compared to $85.9 million in the third quarter of 2021.

We exited the fourth quarter of 2021 with $1.0 billion in cash, cash equivalents and marketable securities and generated $97.2 million in cash flow from operations in the fourth quarter of 2021. Capital expenditures were $13.2 million in the fourth quarter of 2021, compared to $12.7 million in the third quarter of 2021.

We started production shipments of IQ8 Microinverters for customers in North America in the fourth quarter of 2021. IQ8 solar microinverters can form a microgrid during a power outage using only sunlight, providing backup power even without a battery. IQ8's grid-forming technology eliminates traditional ratio requirements between solar system size and battery size. With IQ8, any home can adopt Enphase technology for backup, even with no battery or a small battery.

We completed the acquisition of ClipperCreek in the fourth quarter of 2021. Founded in 2006, ClipperCreek offers electric vehicle (EV) charging solutions for residential and commercial customers in the U.S. The increasing penetration of EVs has implications for home energy management. Homes will consume significantly more power with an EV and the large EV battery could be used for backup and grid services in the future. This acquisition will soon leverage our power conversion and software platform to manage loads and resources within the home.

We continued to make excellent progress on our installer digital platform. We acquired 365 Pronto, Inc. during the fourth quarter of 2021. The company offers a predictive software platform dedicated to simplifying maintenance by matching cleantech asset owners to a local and on-demand workforce of service providers. Our two prior acquisitions, which provide proposal software and permitting services for installers, continue to do well with new features slated for release this year.

For the full year 2021, revenue was $1,382.0 million, compared to $774.4 million in 2020. We generated a record $352.0 million in cash flow from operations in 2021, compared to $216.3 million in 2020. GAAP net income was $145.4 million, resulting in diluted earnings per share of $1.02. Non-GAAP net income was $340.3 million, resulting in Non-GAAP diluted earnings per share of $2.41.

BUSINESS HIGHLIGHTS

On Nov. 29, 2021 Enphase Energy announced that its microinverter-based solar systems are becoming increasingly preferred for commercial installations by government and community organizations in Australia seeking to offset daytime electricity costs and make progress towards net zero goals. Enphase's distributed and all-AC architecture combined with panel-level monitoring ensures that Enphase microinverter-based solar systems are smart and safer choices for solar assets installed on commercial facilities.

On Dec. 2, 2021 Enphase Energy announced its participation in Arizona Public Service (APS) Residential Battery Pilot grid services program. The program offers homeowners with Enphase IQ Batteries in APS's service territory two ways to participate and earn money through one-time, upfront incentives. More Arizonans than ever before will get to experience the benefits of Enphase solar and battery systems, while also helping to make the grid more reliable.

On Jan. 27, 2022, Enphase Energy and Semper Solaris, one of the nation's leading home solar and battery contractors headquartered in California, announced a strategic partnership focused on deploying Enphase Energy Systems, powered by IQ Microinverters and IQ Batteries, across California. Enphase Energy Systems and the Enphase^® App give households enhanced control and flexibility, enabling them to optimize their home energy system around various rate structures through self-consumption, seamless participation in grid services programs, and the ability to go off-grid.

Enphase Energy recently announced that Enphase installers in Southern California, Washington, D.C. area, New York, Colorado, Illinois, Washington, Pennsylvania, Massachusetts, and Arizona have seen growing deployments of the Enphase Energy System powered by IQ Microinverters and IQ Batteries. Enphase customers are interested in energy resilience during power outages and harsh weather conditions that threaten their electric supply.

FIRST QUARTER 2022 FINANCIAL OUTLOOK

For the first quarter of 2022, Enphase Energy estimates both GAAP and non-GAAP financial results as follows:

Revenue to be within a range of $420 million to $440 million, which includes shipments of 110 to 120 megawatt hours of Enphase IQ Batteries
GAAP gross margin to be within a range of 37.0% to 40.0%; non-GAAP gross margin to be within a range of 38.0% to 41.0%, excluding stock-based compensation expenses and acquisition related amortization
GAAP operating expenses to be within a range of $130.5 million to $133.5 million, including $63.0 million estimated for stock-based compensation expenses and acquisition related costs and amortization
Non-GAAP operating expenses to be within a range of $67.5 million to $70.5 million, excluding $63.0 million estimated for stock-based compensation expenses and acquisition related costs and amortization

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Use of Non-GAAP Financial Measures

The Company has presented certain non-GAAP financial measures in this press release. To view a description of non-GAAP financial measures used and the non-GAAP reconciliation schedule for the periods presented, click here.

Conference Call Information

Enphase Energy will host a conference call for analysts and investors to discuss its fourth quarter 2021 results and first quarter 2022 business outlook today at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). The call is open to the public by dialing (877) 644-1284; participant passcode 3394425. A live webcast of the conference call will also be accessible from the "Investor Relations" section of the Company's website at investor.enphase.com. Following the webcast, an archived version will be available on the website for approximately one year. In addition, an audio replay of the conference call will be available by calling (855) 859-2056; participant passcode 3394425, beginning approximately one hour after the call.

Forward-Looking Statements

This press release contains forward-looking statements, including statements related to Enphase Energy's expectations as to future financial performance, expense levels, liquidity sources, the capabilities, advantages, features and performance of our technology and products, including the ability to simplify and reduce installation time, our business strategies and anticipated demand for and availability of our products and services, the impact to our installation partners and homeowners, and the capabilities and performance of our partners. These forward-looking statements are based on the Company's current expectations and inherently involve significant risks and uncertainties. Enphase Energy's actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of certain risks and uncertainties including those risks described in more detail in the Company's most recent Annual Report on Form 10-K and other documents on file with the SEC and available on the SEC's website at www.sec.gov. Enphase Energy undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events or changes in its expectations, except as required by law.

A copy of this press release can be found on the investor relations page of Enphase Energy's website at investor.enphase.com.

About Enphase Energy, Inc.

Enphase Energy, a global energy technology company based in Fremont, CA, is the world's leading supplier of microinverter-based solar and battery systems that enable people to harness the sun to make, use, save, and sell their own power—and control it all with a smart mobile app. The company revolutionized the solar industry with its microinverter-based technology and builds all-in-one solar, battery, and software solutions. Enphase has shipped more than 42 million microinverters, and approximately 1.9 million Enphase-based systems have been deployed in more than 130 countries. For more information, visit enphase.com.

Enphase Energy, Enphase, the "e" logo, IQ, and certain other names and marks are registered trademarks of Enphase Energy, Inc. Other names are for informational purposes and may be trademarks of their respective owners.

Contact:

Karen Sagot

Enphase Energy, Inc.

Investor Relations

ir@enphaseenergy.com

ENPHASE ENERGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

	Three Months Ended									Year Ended
	December 31, 2021			September 30, 2021			December 31, 2020			December 31, 2021			December 31, 2020
Net revenues	$	412,719		$	351,519		$	264,839		$	1,382,049		$	774,425
Cost of revenues (1)		249,405			211,161			142,901			827,627			428,444
Gross profit		163,314			140,358			121,938			554,422			345,981
Operating expenses:
Research and development		31,589			29,411			15,801			105,526			55,921
Sales and marketing		44,470			39,296			14,139			128,974			52,927
General and administrative		29,560			34,300			12,884			104,090			50,694
Total operating expenses		105,619			103,007			42,824			338,590			159,542
Income from operations		57,695			37,351			79,114			215,832			186,439
Other income (expense), net
Interest income		414			110			673			695			2,156
Interest expense		(12,689	)		(12,628	)		(5,901	)		(45,152	)		(21,001	)
Other income (expense), net		5,236			874			503			6,050			(799	)
Loss on partial settlement of convertible notes (2)		(115	)		—			(3,037	)		(56,497	)		(3,037	)
Change in fair value of derivatives (3)		—			—			—			—			(44,348	)
Total other expense, net		(7,154	)		(11,644	)		(7,762	)		(94,904	)		(67,029	)
Income before income taxes		50,541			25,707			71,352			120,928			119,410
Income tax benefit (provision)		2,050			(3,898	)		1,639			24,521			14,585
Net income	$	52,591		$	21,809		$	72,991		$	145,449		$	133,995
Net income per share:
Basic	$	0.39		$	0.16		$	0.57		$	1.09		$	1.07
Diluted	$	0.37		$	0.15		$	0.50		$	1.02		$	0.95
Shares used in per share calculation:
Basic		134,920			134,721			126,980			134,025			125,561
Diluted		141,480			141,220			145,990			142,878			141,918

(1)	We sought refunds totaling approximately $38.9 million plus $0.6 million accrued interest on tariffs previously paid from September 24, 2018 to March 31, 2020 for certain microinverters that qualify for the tariff exclusion on Chinese imported microinverter products that fit the dimensions and weight limits within a Section 301 Tariff exclusion under U.S. note 20(ss)(40) to subchapter III of chapter 99 of the Harmonized Tariff Schedule of the United States. The refund request was subject to review and approval by the U.S. Customs and Border Protection; therefore, we assessed the probable loss recovery in the three and twelve months ended December 31, 2020 was equal to the $16.5 million and $39.5 million, respectively, approved refund requests available to us prior to the date our financial statements were expected to be issued. As of the three and twelve months ended December 31, 2020, we had recorded $15.9 million and $38.9 million, respectively as a reduction to cost of revenues, and $0.6 million as interest income, in our consolidated statements of operations as the approved refunds relate to paid tariffs previously recorded to cost of revenues.
(2)	Loss on partial settlement of convertible notes of $0.1 million for the three months ended December 31, 2021, primarily relates to the non-cash loss on settlement of $1.1 million remaining aggregate principal amount of the Notes due 2024. Loss on partial settlement of convertible notes of $56.5 million for the year ended December 31, 2021 primarily relates to the $9.6 million non-cash loss on settlement of $88.2 million remaining aggregate principal amount of the Notes due 2024, $9.5 million non-cash loss on partial settlement of $217.8 million aggregate principal amount of the Notes due 2025 and $37.5 million non-cash inducement loss incurred on repurchase of Notes due 2025. Loss on partial settlement of convertible notes of $3.0 million for the three and twelve months ended December 31, 2020 primarily relates to the non-cash loss on partial settlement of $43.9 million aggregate principal amount of the Notes due 2024.
(3)	Change in fair value of derivatives of $44.3 million for the year ended December 31, 2020, represents changes in fair value of the conversion option in the Notes due 2025, as well as the convertible note hedge and warrant transactions. Initially, conversion of the Notes due 2025 would be settled solely in cash as a result of the Company not having the necessary number of authorized but unissued shares of its common stock available to settle the conversion option of the Notes due 2025 in shares; therefore, the conversion option, convertible note hedge and warrant transactions were classified as derivatives that required marked-to-market accounting. On May 20, 2020, at the Company's annual meeting of stockholders, the stockholders approved an amendment to its certificate of incorporation to increase the number of authorized shares of the Company's common stock. As a result, the Company will now be able to settle the Notes due 2025, convertible notes hedge and warrants through payment or delivery, as the case may be, of cash, shares of its common stock or a combination thereof, at the Company's election. Accordingly, on May 20, 2020, the conversion option, convertible note hedge and warrant transactions were remeasured at fair value and were then reclassified to additional paid-in-capital in the condensed consolidated balance sheet in the second quarter of 2020 and are no longer remeasured as long as they continue to meet the conditions for equity classification.

ENPHASE ENERGY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

	December 31, 2021		December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	119,316	$	679,379
Marketable securities		897,335		—
Accounts receivable, net		333,626		182,165
Inventory		74,400		41,764
Prepaid expenses and other assets		37,784		29,756
Total current assets		1,462,461		933,064
Property and equipment, net		82,167		42,985
Operating lease, right of use asset, net		14,420		17,683
Intangible assets, net		97,758		28,808
Goodwill		181,254		24,783
Other assets		118,726		59,875
Deferred tax assets, net		122,470		92,904
Total assets	$	2,079,256	$	1,200,102
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	113,767	$	72,609
Accrued liabilities		157,912		76,542
Deferred revenues, current		62,670		47,665
Warranty obligations, current		19,395		11,260
Debt, current		86,052		325,967
Total current liabilities		439,796		534,043
Long-term liabilities:
Deferred revenues, noncurrent		187,186		125,473
Warranty obligations, noncurrent		53,982		34,653
Other liabilities		16,530		17,042
Debt, noncurrent		951,594		4,898
Total liabilities		1,649,088		716,109
Total stockholders' equity		430,168		483,993
Total liabilities and stockholders' equity	$	2,079,256	$	1,200,102

ENPHASE ENERGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Three Months Ended									Year Ended
	December 31, 2021			September 30, 2021			December 31, 2020			December 31, 2021			December 31, 2020
Cash flows from operating activities:
Net income	$	52,591		$	21,809		$	72,991		$	145,449		$	133,995
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		10,972			8,313			5,353			32,439			18,103
Provision for doubtful accounts		27			179			171			477			425
Loss on partial settlement of convertibles notes		115			—			3,037			56,497			3,037
Deemed repayment of convertible notes attributable to accreted debt discount		(133	)		—			(3,132	)		(15,718	)		(3,132	)
Non-cash interest expense		12,494			12,430			5,309			44,387			18,825
Gain on settlement of debt securities		(6,569	)		—			—			(6,569	)		—
Change in fair value of debt securities		111			(784	)		—			(3,042	)		—
Stock-based compensation		37,176			46,954			8,289			114,286			42,503
Change in fair value of derivatives		—			—			—			—			44,348
Deferred income taxes		(2,451	)		1,337			(2,610	)		(31,241	)		(17,117	)
Changes in operating assets and liabilities:
Accounts receivable		(58,091	)		5,462			(57,854	)		(151,160	)		(34,321	)
Inventory		(5,618	)		(27,648	)		(4,229	)		(29,258	)		(9,708	)
Prepaid expenses and other assets		(8,123	)		(3,568	)		(4,185	)		(26,885	)		(14,636	)
Accounts payable, accrued and other liabilities (1)		45,396			24,897			44,895			117,183			35,695
Warranty obligations		5,417			7,574			2,134			27,016			8,815
Deferred revenues		13,859			16,399			14,011			78,167			(10,498	)
Net cash provided by operating activities		97,173			113,354			84,180			352,028			216,334
Cash flows from investing activities:
Purchases of property and equipment		(13,208	)		(12,682	)		(8,851	)		(52,258	)		(20,558	)
Purchases of marketable securities		(389,466	)		(545,490	)		—			(934,956	)		—
Maturities of marketable securities		—			35,000			—			35,000			—
Investments in private companies		—			(13,000	)		(5,010	)		(58,000	)		(5,010	)
Settlement of investment in private companies		26,569			—			—			26,569			—
Business acquisitions, net of cash acquired		(180,413	)		—			—			(235,652	)		—
Purchase of intangible asset		—			(250	)		—			(250	)		—
Net cash used in investing activities		(556,518	)		(536,422	)		(13,861	)		(1,219,547	)		(25,568	)
Cash flows from financing activities:
Issuance of convertible notes, net of issuance costs		—			—			—			1,188,439			312,420
Purchase of convertible note hedges		—			—			—			(286,235	)		(89,056	)
Sale of warrants		—			—			—			220,800			71,552
Principal payments and financing fees on debt		(272	)		—			(306	)		(1,694	)		(2,575	)
Partial repurchase of convertible notes		(935	)		—			(40,728	)		(290,247	)		(40,728	)
Repurchase of common stock		(300,000	)		—			—			(500,000	)		—
Proceeds from exercise of equity awards and employee stock purchase plan		3,800			42			3,687			7,484			8,395
Payment of withholding taxes related to net share settlement of equity awards		(8,825	)		(3,313	)		(16,288	)		(29,136	)		(68,330	)
Net cash provided by (used in) financing activities		(306,232	)		(3,271	)		(53,635	)		309,411			191,678
Effect of exchange rate changes on cash and cash equivalents		(653	)		(376	)		903			(1,955	)		826
Net increase (decrease) in cash and cash equivalents		(766,230	)		(426,715	)		17,587			(560,063	)		383,270
Cash, cash equivalents and restricted cash—Beginning of period		885,546			1,312,261			661,792			679,379			296,109
Cash and cash equivalents —End of period	$	119,316		$	885,546		$	679,379		$	119,316		$	679,379

(1)

As of December 31, 2020, we have received $24.8 million of tariff refunds and accrued for $14.7 million tariff refunds that were approved, however, not yet received on or before December 31, 2020. In the three months and twelve months ended December 31, 2020, we have recorded $15.9 million and $38.9 million, respectively, as a reduction to cost of revenues, and $0.6 million as interest income, in our consolidated statements of operations as the approved refunds relate to paid tariffs previously recorded to cost of revenues, therefore, we recorded the corresponding approved tariff refunds as credits to cost of revenues in the current period. The tariff refund receivable of $14.7 million is recorded as a reduction of accounts payable to Flex Ltd. and affiliates ("Flex"), our manufacturing partner and the importer of record who will first receive the tariff refunds, on the condensed consolidated balance sheet as of December 31, 2020.

ENPHASE ENERGY, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(In thousands, except per share data and percentages)

(Unaudited)

	Three Months Ended									Year Ended
	December 31, 2021			September 30, 2021			December 31, 2020			December 31, 2021			December 31, 2020
Gross profit (GAAP)	$	163,314		$	140,358		$	121,938		$	554,422		$	345,981
Stock-based compensation		2,409			2,915			522			7,366			3,759
Tariff refunds		—			—			(15,911	)		—			(38,940	)
Acquisition related amortization		184			—			—			184			—
Gross profit (Non-GAAP)	$	165,907		$	143,273		$	106,549		$	561,972		$	310,800

Gross margin (GAAP)		39.6	%		39.9	%		46.0	%		40.1	%		44.7	%
Stock-based compensation		0.6	%		0.9	%		0.2	%		0.6	%		0.5	%
Tariff refunds		—	%		—	%		(6.0	)%		—	%		(5.1	)%
Acquisition related amortization		—	%		—	%		—	%		—	%		—	%
Gross margin (Non-GAAP)		40.2	%		40.8	%		40.2	%		40.7	%		40.1	%

Operating expenses (GAAP)	$	105,619		$	103,007		$	42,824		$	338,590		$	159,542
Stock-based compensation (1)		(34,767	)		(44,039	)		(7,767	)		(106,920	)		(38,744	)
Acquisition related expenses and amortization		(2,670	)		(1,627	)		(864	)		(10,752	)		(2,502	)
Operating expenses (Non-GAAP)	$	68,182		$	57,341		$	34,193		$	220,918		$	118,296

⁽¹⁾ Includes stock-based compensation as follows:
Research and development	$	11,712		$	10,999		$	3,271		$	33,927		$	12,701
Sales and marketing		13,090			15,472			2,044			37,434			11,548
General and administrative		9,965			17,568			2,452			35,559			14,495
Total	$	34,767		$	44,039		$	7,767		$	106,920		$	38,744

Income from operations (GAAP)	$	57,695		$	37,351		$	79,114		$	215,832		$	186,439
Stock-based compensation		37,176			46,954			8,289			114,286			42,503
Tariff refunds		—			—			(15,911	)		—			(38,940	)
Acquisition related expenses and amortization		2,854			1,627			864			10,936			2,502
Income from operations (Non-GAAP)	$	97,725		$	85,932		$	72,356		$	341,054		$	192,504

Net income (GAAP)	$	52,591		$	21,809		$	72,991		$	145,449		$	133,995
Stock-based compensation		37,176			46,954			8,289			114,286			42,503
Tariff refunds		—			—			(16,538	)		—			(39,567	)
Acquisition related expenses and amortization		2,854			1,627			864			10,936			2,502
Non-cash interest expense		12,494			12,430			5,309			44,387			18,825
Loss on partial settlement of convertible notes		115			—			3,037			56,497			3,037
Change in fair value of derivatives		—			—			—			—			44,348
Non-GAAP income tax adjustment		(2,451	)		1,337			(2,610	)		(31,241	)		(17,117	)
Net income (Non-GAAP)	$	102,779		$	84,157		$	71,342		$	340,314		$	188,526

Net income per share, basic (GAAP)	$	0.39		$	0.16		$	0.57		$	1.09		$	1.07
Stock-based compensation		0.28			0.35			0.07			0.85			0.34
Tariff refunds		—			—			(0.13	)		—			(0.32	)
Acquisition related expenses and amortization		0.02			0.01			0.01			0.08			0.02
Non-cash interest expense		0.09			0.09			0.04			0.33			0.15
Loss on partial settlement of convertible notes		—			—			0.02			0.42			0.03
Change in fair value of derivatives		—			—			—			—			0.35
Non-GAAP income tax adjustment		(0.02	)		0.01			(0.02	)		(0.23	)		(0.14	)
Net income per share, basic (Non-GAAP)	$	0.76		$	0.62		$	0.56		$	2.54		$	1.50

Shares used in basic per share calculation GAAP and Non-GAAP		134,920			134,721			126,980			134,025			125,561

Net income per share, diluted (GAAP)	$	0.37		$	0.15		$	0.50		$	1.02		$	0.95
Stock-based compensation		0.27			0.34			0.07			0.81			0.31
Tariff refunds		—			—			(0.12	)		—			(0.28	)
Acquisition related expenses and amortization		0.02			0.01			0.01			0.08			0.02
Non-cash interest expense		0.09			0.09			0.04			0.32			0.14
Loss on partial settlement of convertible notes		—			—			0.02			0.40			0.02
Change in fair value of derivatives		—			—			—			—			0.33
Non-GAAP income tax adjustment		(0.02	)		0.01			(0.01	)		(0.22	)		(0.12	)
Net income per share, diluted (Non-GAAP) (2)	$	0.73		$	0.60		$	0.51		$	2.41		$	1.37

Shares used in diluted per share calculation GAAP		141,480			141,220			145,990			142,878			141,918
Shares used in diluted per share calculation Non-GAAP (3)		140,680			140,516			139,527			141,181			137,469

Net cash provided by operating activities (GAAP)	$	97,173		$	113,354		$	84,180		$	352,028		$	216,334
Purchases of property and equipment		(13,208	)		(12,682	)		(8,851	)		(52,258	)		(20,558	)
Deemed repayment of convertible notes due 2024 and notes due 2025 attributable to accreted debt discount		133			—			3,132			15,718			3,132
Free cash flow (Non-GAAP)	$	84,098		$	100,672		$	78,461		$	315,488		$	198,908

(2)

Calculation of non-GAAP diluted net income per share for the three months ended December 31, 2021, September 30, 2021 and December 31, 2020, as well as the years ended December 31, 2021 and 2020, excludes convertible notes due 2023 interest expense, net of tax of less than $0.1 million in each period from non-GAAP net income.

(3)

Effect of dilutive in-the-money portion of convertible senior notes and warrants are included in the GAAP weighted-average diluted shares in periods where the Company has GAAP net income. The Company excluded the in-the-money portion of convertible notes due 2024 totaling 38 thousand shares, 45 thousand shares and 5,063 thousand shares in the three months ended December 31, 2021, September 30, 2021 and December 31, 2020, respectively, and 768 thousand and 4,449 thousand shares for the year ended December 31, 2021, and 2020, respectively, from non-GAAP weighted-average diluted shares as the Company entered into convertible note hedge transactions that reduce potential dilution to the Company's common stock upon any conversion of the notes due 2024. The Company excluded the in-the-money portion of convertible notes due 2025 totaling 763 thousand shares, 658 thousand shares and 1,401 thousand shares in the three months ended December 31, 2021, September 30, 2021 and December 31, 2020, respectively, and 929 thousand shares for the year ended December 31, 2021, from non-GAAP weighted-average diluted shares as the Company entered into convertible note hedge transactions that reduce potential dilution to the Company's common stock upon any conversion of the notes due 2025.

Enphase Energy Reports Financial Results for the Fourth Quarter of 2021