Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

Enphase Energy Inc., consolidated cash flow statement

US$ in thousands

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income	438,936)	397,362)	145,449)	133,995)	161,148)
Depreciation and amortization	74,708)	58,775)	30,846)	18,103)	14,119)
Net amortization (accretion) of premium (discount) on marketable securities	(15,561)	(2,632)	1,593)	—)	—)
Provision for doubtful accounts	1,153)	119)	477)	425)	217)
Asset impairment	10,603)	1,200)	—)	—)	1,124)
Non-cash interest expense	8,380)	8,167)	44,387)	18,825)	6,081)
Financing fees on extinguishment of debt	—)	—)	—)	—)	2,152)
Fees paid for repurchase and exchange of convertible notes due 2023	—)	—)	—)	—)	6,000)
Loss on partial settlement of convertibles notes	—)	—)	56,497)	3,037)	—)
Deemed repayment of convertible notes attributable to accreted debt discount	—)	—)	(15,718)	(3,132)	—)
Gain on settlement of debt securities	—)	—)	(6,569)	—)	—)
Net gain from change in fair value of debt securities	(8,078)	(735)	(3,042)	—)	—)
Stock-based compensation	212,857)	216,802)	114,286)	42,503)	20,176)
Change in fair value of derivatives	—)	—)	—)	44,348)	—)
Deferred income taxes	(43,348)	3,633)	(31,241)	(17,117)	(73,375)
Accounts receivable	(12,478)	(107,556)	(151,160)	(34,321)	(68,745)
Inventory	(63,887)	(75,273)	(29,258)	(9,708)	(15,789)
Prepaid expenses and other assets	(59,777)	(68,423)	(26,885)	(14,636)	(14,293)
Accounts payable, accrued and other liabilities	(22,149)	133,416)	117,183)	35,695)	22,200)
Warranty obligations	57,641)	57,773)	27,016)	8,815)	5,804)
Deferred revenues	117,780)	122,189)	78,167)	(10,498)	72,248)
Changes in operating assets and liabilities	17,130)	62,126)	15,063)	(24,653)	1,425)
Adjustments to reconcile net income to net cash provided by operating activities	257,844)	347,455)	206,579)	82,339)	(22,081)
Net cash provided by operating activities	696,780)	744,817)	352,028)	216,334)	139,067)
Purchases of property and equipment	(110,401)	(46,443)	(52,258)	(20,558)	(14,788)
Purchase of intangible asset	—)	—)	(250)	—)	—)
Investments in private companies	(15,000)	(16,000)	(58,000)	(5,010)	—)
Redemption of investment in private companies	—)	—)	26,569)	—)	—)
Business acquisitions, net of cash acquired	—)	(62,162)	(235,652)	—)	—)
Purchases of marketable securities	(2,081,431)	(907,430)	(934,956)	—)	—)
Maturities and sale of marketable securities	1,840,477)	660,129)	35,000)	—)	—)
Net cash used in investing activities	(366,355)	(371,906)	(1,219,547)	(25,568)	(14,788)
Issuance of convertible notes, net of issuance costs	—)	—)	1,188,439)	312,420)	127,413)
Purchase of convertible note hedges	—)	—)	(286,235)	(89,056)	(36,313)
Sale of warrants	—)	—)	220,800)	71,552)	29,818)
Fees paid for repurchase and exchange of convertible notes due 2023	—)	—)	—)	—)	(6,000)
Principal payments and financing fees on debt	—)	—)	(1,694)	(2,575)	(45,855)
Partial repurchase of convertible notes	—)	—)	(290,247)	(40,728)	—)
Proceeds from exercise of equity awards and employee stock purchase plan	13,870)	10,370)	7,484)	8,395)	4,985)
Payment of withholding taxes related to net share settlement of equity awards	(120,646)	(27,496)	(29,136)	(68,330)	(8,198)
Repurchase of common stock	(409,998)	—)	(500,000)	—)	—)
Net cash provided by (used in) financing activities	(516,774)	(17,126)	309,411)	191,678)	65,850)
Effect of exchange rate changes on cash and cash equivalents	1,853)	(1,857)	(1,955)	826)	(257)
Net increase (decrease) in cash and cash equivalents	(184,496)	353,928)	(560,063)	383,270)	189,872)
Cash and cash equivalents, beginning of period	473,244)	119,316)	679,379)	296,109)	106,237)
Cash and cash equivalents, end of period	288,748)	473,244)	119,316)	679,379)	296,109)

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).

Net Income and Profitability: Net income exhibited fluctuations over the five-year period, initially declining from 161,148 thousand USD in 2019 to 133,995 thousand USD in 2020, then rising modestly to 145,449 thousand USD in 2021. A significant surge occurred in 2022, with net income reaching 397,362 thousand USD, further increasing to 438,936 thousand USD in 2023. This suggests improved profitability and operational performance particularly in the last two years.
Depreciation, Amortization, and Non-Cash Expenses: Depreciation and amortization expenses consistently increased year-over-year, nearly quintupling from 14,119 thousand USD in 2019 to 74,708 thousand USD by 2023. Net amortization of premiums and discounts on marketable securities showed volatility, turning negative in recent years. Non-cash interest expense peaked in 2021 at 44,387 thousand USD and then declined sharply.
Provision for Doubtful Accounts and Asset Impairments: The provision for doubtful accounts stayed relatively low with some fluctuations, notably increasing to 1,153 thousand USD in 2023. Asset impairment was minor in 2019 and 2022 but jumped substantially in 2023 to 10,603 thousand USD, indicating some valuation challenges or write-downs in assets.
Financing and Debt-Related Items: Various financing fees, losses on convertible notes, and debt settlement gains reveal active debt restructuring from 2019 through 2021, with major charges such as a 56,497 thousand USD loss on partial settlement of convertible notes in 2021. Issuance of convertible notes peaked sharply in 2021 at 1,188,439 thousand USD. Partial repurchases of convertible notes also occurred significantly in 2020 and 2021.
Stock-Based Compensation and Shareholder Expenses: Stock-based compensation increased dramatically from 20,176 thousand USD in 2019 to a peak of 216,802 thousand USD in 2022, and slightly decreased to 212,857 thousand USD in 2023, highlighting increased employee incentives or share-based pay. Payments for withholding taxes related to equity awards rose substantially, peaking at 120,646 thousand USD in 2023. The company also repurchased common stock for substantial amounts in 2021 and 2023, reflecting shareholder return strategies.
Working Capital Changes: Key working capital accounts such as accounts receivable, inventory, and prepaid expenses showed consistent decreases, especially large negative changes in accounts receivable in 2021 and 2022, indicating effective collection or changes in sales terms. Accounts payable and accrued liabilities increased up to 2022 but fell sharply in 2023. Warranty obligations significantly rose from 5,804 thousand USD in 2019 to about 57,641 thousand USD in 2023, reflecting increased post-sale liabilities.
Operating Cash Flows: Net cash provided by operating activities increased substantially, peaking at 744,817 thousand USD in 2022 before a slight decline to 696,780 thousand USD in 2023, reflecting strong operational cash generation. Adjustments reconciling net income to cash provided also increased markedly, showing significant non-cash charges driving cash flow improvements.
Investing Activities: Investing cash flow was consistently negative, with extreme outflows in 2021 due to business acquisitions and large purchases of marketable securities. Although the magnitude of investing outflows decreased in 2022 and 2023, purchases of property and equipment increased sharply in 2023 to 110,401 thousand USD, signaling ramped-up capital expenditure. Investments in private companies fluctuated with a large investment in 2021 and partial redemption in the same year.
Financing Activities: Net cash from financing activities surged in 2021 to 309,411 thousand USD driven by convertible note issuances and equity transactions but turned negative in 2022 and more markedly in 2023, with cash outflows related to stock repurchases and other liabilities. This shift suggests a transition from capital raising to capital return or debt reduction strategy.
Liquidity Position: Cash and cash equivalents showed a volatile pattern: significant increases in 2020 (+383,270 thousand USD) and 2022 (+353,928 thousand USD), but a major decrease in 2021 (-560,063 thousand USD) and 2023 (-184,496 thousand USD). The ending cash position reflects this volatility, with a peak in 2020 at 679,379 thousand USD followed by declines.

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Enphase Energy Inc. (NASDAQ:ENPH)

Cash Flow Statement