Goodwill and Intangible Asset Disclosure
Adjustments to Financial Statements: Removal of Goodwill
Adjusted Financial Ratios: Removal of Goodwill (Summary)
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Enphase Energy Inc., balance sheet: goodwill and intangible assets

US$ in thousands

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Goodwill	214,562)	213,559)	181,254)	24,783)	24,783)
Other indefinite-lived intangibles	286)	286)	286)	286)	286)
Developed technology	51,044)	51,044)	38,650)	13,100)	13,100)
Customer relationships	51,299)	55,106)	41,021)	26,421)	23,100)
Trade names	37,700)	37,700)	37,700)	—)	—)
Order backlog	600)	600)	600)	—)	—)
Intangible assets with finite lives, gross	140,643)	144,450)	117,971)	39,521)	36,200)
Accumulated amortization	(72,393)	(45,195)	(20,499)	(10,999)	(5,907)
Intangible assets with finite lives, net	68,250)	99,255)	97,472)	28,522)	30,293)
Purchased intangible assets	68,536)	99,541)	97,758)	28,808)	30,579)
Goodwill and intangible assets	283,098)	313,100)	279,012)	53,591)	55,362)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

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Item	Description	The company
Goodwill	Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.	Enphase Energy Inc. goodwill increased from 2021 to 2022 and from 2022 to 2023.
Purchased intangible assets	Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Enphase Energy Inc. purchased intangible assets increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.
Goodwill and intangible assets	Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Enphase Energy Inc. goodwill and intangible assets increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level.

Enphase Energy Inc., adjustments to financial statements

US$ in thousands

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Adjustment to Total Assets
Total assets (as reported)	3,383,012)	3,084,280)	2,079,256)	1,200,102)	713,223)
Less: Goodwill	214,562)	213,559)	181,254)	24,783)	24,783)
Total assets (adjusted)	3,168,450)	2,870,721)	1,898,002)	1,175,319)	688,440)
Adjustment to Stockholders’ Equity
Stockholders’ equity (as reported)	983,624)	825,573)	430,168)	483,993)	272,212)
Less: Goodwill	214,562)	213,559)	181,254)	24,783)	24,783)
Stockholders’ equity (adjusted)	769,062)	612,014)	248,914)	459,210)	247,429)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Enphase Energy Inc., Financial Data: Reported vs. Adjusted

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Enphase Energy Inc., adjusted financial ratios

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total Asset Turnover
Reported total asset turnover	0.68	0.76	0.66	0.65	0.88
Adjusted total asset turnover	0.72	0.81	0.73	0.66	0.91
Financial Leverage
Reported financial leverage	3.44	3.74	4.83	2.48	2.62
Adjusted financial leverage	4.12	4.69	7.63	2.56	2.78
Return on Equity (ROE)
Reported ROE	44.62%	48.13%	33.81%	27.69%	59.20%
Adjusted ROE	57.07%	64.93%	58.43%	29.18%	65.13%
Return on Assets (ROA)
Reported ROA	12.97%	12.88%	7.00%	11.17%	22.59%
Adjusted ROA	13.85%	13.84%	7.66%	11.40%	23.41%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Financial ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Enphase Energy Inc. adjusted total asset turnover ratio improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Enphase Energy Inc. adjusted financial leverage ratio decreased from 2021 to 2022 and from 2022 to 2023.
Adjusted ROE	A profitability ratio calculated as net income divided by adjusted shareholders’ equity.	Enphase Energy Inc. adjusted ROE improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Enphase Energy Inc. adjusted ROA improved from 2021 to 2022 and from 2022 to 2023.

Enphase Energy Inc., Financial Ratios: Reported vs. Adjusted

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	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Net revenues	2,290,786)	2,330,853)	1,382,049)	774,425)	624,333)
Total assets	3,383,012)	3,084,280)	2,079,256)	1,200,102)	713,223)
Activity Ratio
Total asset turnover¹	0.68	0.76	0.66	0.65	0.88
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Net revenues	2,290,786)	2,330,853)	1,382,049)	774,425)	624,333)
Adjusted total assets	3,168,450)	2,870,721)	1,898,002)	1,175,319)	688,440)
Activity Ratio
Adjusted total asset turnover²	0.72	0.81	0.73	0.66	0.91

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ Total asset turnover = Net revenues ÷ Total assets
= 2,290,786 ÷ 3,383,012 = 0.68

² Adjusted total asset turnover = Net revenues ÷ Adjusted total assets
= 2,290,786 ÷ 3,168,450 = 0.72

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Enphase Energy Inc. adjusted total asset turnover ratio improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Total assets	3,383,012)	3,084,280)	2,079,256)	1,200,102)	713,223)
Stockholders’ equity	983,624)	825,573)	430,168)	483,993)	272,212)
Solvency Ratio
Financial leverage¹	3.44	3.74	4.83	2.48	2.62
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Adjusted total assets	3,168,450)	2,870,721)	1,898,002)	1,175,319)	688,440)
Adjusted stockholders’ equity	769,062)	612,014)	248,914)	459,210)	247,429)
Solvency Ratio
Adjusted financial leverage²	4.12	4.69	7.63	2.56	2.78

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ Financial leverage = Total assets ÷ Stockholders’ equity
= 3,383,012 ÷ 983,624 = 3.44

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity
= 3,168,450 ÷ 769,062 = 4.12

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Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Enphase Energy Inc. adjusted financial leverage ratio decreased from 2021 to 2022 and from 2022 to 2023.

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Net income	438,936)	397,362)	145,449)	133,995)	161,148)
Stockholders’ equity	983,624)	825,573)	430,168)	483,993)	272,212)
Profitability Ratio
ROE¹	44.62%	48.13%	33.81%	27.69%	59.20%
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Net income	438,936)	397,362)	145,449)	133,995)	161,148)
Adjusted stockholders’ equity	769,062)	612,014)	248,914)	459,210)	247,429)
Profitability Ratio
Adjusted ROE²	57.07%	64.93%	58.43%	29.18%	65.13%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 438,936 ÷ 983,624 = 44.62%

² Adjusted ROE = 100 × Net income ÷ Adjusted stockholders’ equity
= 100 × 438,936 ÷ 769,062 = 57.07%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as net income divided by adjusted shareholders’ equity.	Enphase Energy Inc. adjusted ROE improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Net income	438,936)	397,362)	145,449)	133,995)	161,148)
Total assets	3,383,012)	3,084,280)	2,079,256)	1,200,102)	713,223)
Profitability Ratio
ROA¹	12.97%	12.88%	7.00%	11.17%	22.59%
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Net income	438,936)	397,362)	145,449)	133,995)	161,148)
Adjusted total assets	3,168,450)	2,870,721)	1,898,002)	1,175,319)	688,440)
Profitability Ratio
Adjusted ROA²	13.85%	13.84%	7.66%	11.40%	23.41%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ ROA = 100 × Net income ÷ Total assets
= 100 × 438,936 ÷ 3,383,012 = 12.97%

² Adjusted ROA = 100 × Net income ÷ Adjusted total assets
= 100 × 438,936 ÷ 3,168,450 = 13.85%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Enphase Energy Inc. adjusted ROA improved from 2021 to 2022 and from 2022 to 2023.

Enphase Energy Inc. (NASDAQ:ENPH)

Analysis of Goodwill and Intangible Assets

Goodwill and Intangible Asset Disclosure

Adjustments to Financial Statements: Removal of Goodwill

Enphase Energy Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

Enphase Energy Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)