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Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

Economic Profit
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

Enphase Energy Inc., economic profit calculation

US$ in thousands

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net operating profit after taxes (NOPAT)¹	521,640)	575,824)	255,560)	132,831)	168,136)
Cost of capital²	16.69%	16.84%	16.67%	16.93%	17.34%
Invested capital³	1,302,318)	1,285,383)	779,239)	951,473)	528,927)

Economic profit⁴	304,266)	359,338)	125,639)	(28,207)	76,426)

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).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2023 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 521,640 – 16.69% × 1,302,318 = 304,266

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Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	Enphase Energy Inc. economic profit increased from 2021 to 2022 but then slightly decreased from 2022 to 2023.

Enphase Energy Inc., NOPAT calculation

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)
Deferred income tax expense (benefit)¹	(47,188)	(137)	(31,241)	(17,117)	(72,950)
Increase (decrease) in allowance for doubtful accounts²	1,523)	(611)	1,128)	(102)	(1,574)
Increase (decrease) in deferred revenues³	115,112)	122,504)	76,718)	(8,849)	71,957)
Increase (decrease) in warranty obligations⁴	57,641)	58,069)	27,464)	8,815)	5,804)
Increase (decrease) in liabilities related to restructuring activities⁵	2,390)	714)	—)	—)	(2,783)
Increase (decrease) in equity equivalents⁶	129,478)	180,539)	74,069)	(17,253)	454)
Interest expense	8,839)	9,438)	45,152)	21,001)	9,691)
Interest expense, operating lease liability⁷	1,682)	1,589)	1,166)	1,521)	1,093)
Adjusted interest expense	10,521)	11,027)	46,318)	22,522)	10,784)
Tax benefit of interest expense⁸	(2,209)	(2,316)	(9,727)	(4,730)	(2,265)
Adjusted interest expense, after taxes⁹	8,311)	8,711)	36,591)	17,792)	8,520)
Interest income	(69,728)	(13,656)	(695)	(2,156)	(2,513)
Investment income, before taxes	(69,728)	(13,656)	(695)	(2,156)	(2,513)
Tax expense (benefit) of investment income¹⁰	14,643)	2,868)	146)	453)	528)
Investment income, after taxes¹¹	(55,085)	(10,788)	(549)	(1,703)	(1,985)
Net operating profit after taxes (NOPAT)	521,640)	575,824)	255,560)	132,831)	168,136)

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).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in allowance for doubtful accounts.

³ Addition of increase (decrease) in deferred revenues.

⁴ Addition of increase (decrease) in warranty obligations.

⁵ Addition of increase (decrease) in liabilities related to restructuring activities.

⁶ Addition of increase (decrease) in equity equivalents to net income.

⁷ 2023 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 24,022 × 7.00% = 1,682

⁸ 2023 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 10,521 × 21.00% = 2,209

⁹ Addition of after taxes interest expense to net income.

¹⁰ 2023 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 69,728 × 21.00% = 14,643

¹¹ Elimination of after taxes investment income.

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Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	Enphase Energy Inc. NOPAT increased from 2021 to 2022 but then slightly decreased from 2022 to 2023.

Enphase Energy Inc., cash operating taxes calculation

US$ in thousands

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Income taxes provision for (benefit from)	74,203)	54,686)	(24,521)	(14,585)	(71,034)
Less: Deferred income tax expense (benefit)	(47,188)	(137)	(31,241)	(17,117)	(72,950)
Add: Tax savings from interest expense	2,209)	2,316)	9,727)	4,730)	2,265)
Less: Tax imposed on investment income	14,643)	2,868)	146)	453)	528)
Cash operating taxes	108,957)	54,271)	16,301)	6,809)	3,653)

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
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	Enphase Energy Inc. cash operating taxes increased from 2021 to 2022 and from 2022 to 2023.

Enphase Energy Inc., invested capital calculation (financing approach)

US$ in thousands

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Debt, current	—)	90,892)	86,052)	325,967)	2,884)
Debt, non-current	1,293,738)	1,199,465)	951,594)	4,898)	102,659)
Operating lease liability¹	24,022)	24,448)	15,750)	19,751)	12,712)
Total reported debt & leases	1,317,760)	1,314,805)	1,053,396)	350,616)	118,255)
Stockholders’ equity	983,624)	825,573)	430,168)	483,993)	272,212)
Net deferred tax (assets) liabilities²	(247,181)	(200,043)	(119,501)	(92,468)	(73,666)
Allowance for doubtful accounts³	2,502)	979)	1,590)	462)	564)
Deferred revenues⁴	487,472)	372,360)	249,856)	173,138)	181,987)
Warranty obligations⁵	189,087)	131,446)	73,377)	45,913)	37,098)
Liabilities related to restructuring activities⁶	3,104)	714)	—)	—)	—)
Equity equivalents⁷	434,984)	305,456)	205,322)	127,045)	145,983)
Accumulated other comprehensive (income) loss, net of tax⁸	1,988)	10,882)	2,020)	(434)	923)
Adjusted stockholders’ equity	1,420,596)	1,141,911)	637,510)	610,604)	419,118)
Construction in process⁹	(29,752)	(31,734)	(14,332)	(9,747)	(8,446)
Marketable securities¹⁰	(1,406,286)	(1,139,599)	(897,335)	—)	—)
Invested capital	1,302,318)	1,285,383)	779,239)	951,473)	528,927)

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).

¹ Addition of capitalized operating leases.

² Elimination of deferred taxes from assets and liabilities. See details »

³ Addition of allowance for doubtful accounts receivable.

⁴ Addition of deferred revenues.

⁵ Addition of warranty obligations.

⁶ Addition of liabilities related to restructuring activities.

⁷ Addition of equity equivalents to stockholders’ equity.

⁸ Removal of accumulated other comprehensive income.

⁹ Subtraction of construction in process.

¹⁰ Subtraction of marketable securities.

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Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	Enphase Energy Inc. invested capital increased from 2021 to 2022 and from 2022 to 2023.

Enphase Energy Inc., cost of capital calculations

Dec 31, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	16,626,446)	16,626,446)	÷	17,878,768)	=	0.93	0.93	×	17.67%	=	16.43%
Debt³	1,228,300)	1,228,300)	÷	17,878,768)	=	0.07	0.07	×	4.64% × (1 – 21.00%)	=	0.25%
Operating lease liability⁴	24,022)	24,022)	÷	17,878,768)	=	0.00	0.00	×	7.00% × (1 – 21.00%)	=	0.01%
Total:	17,878,768)					1.00					16.69%

Based on: 10-K (reporting date: 2023-12-31).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	29,015,256)	29,015,256)	÷	30,840,481)	=	0.94	0.94	×	17.67%	=	16.62%
Debt³	1,800,777)	1,800,777)	÷	30,840,481)	=	0.06	0.06	×	4.64% × (1 – 21.00%)	=	0.21%
Operating lease liability⁴	24,448)	24,448)	÷	30,840,481)	=	0.00	0.00	×	6.50% × (1 – 21.00%)	=	0.00%
Total:	30,840,481)					1.00					16.84%

Based on: 10-K (reporting date: 2022-12-31).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	19,513,074)	19,513,074)	÷	21,010,462)	=	0.93	0.93	×	17.67%	=	16.41%
Debt³	1,481,638)	1,481,638)	÷	21,010,462)	=	0.07	0.07	×	4.63% × (1 – 21.00%)	=	0.26%
Operating lease liability⁴	15,750)	15,750)	÷	21,010,462)	=	0.00	0.00	×	7.40% × (1 – 21.00%)	=	0.00%
Total:	21,010,462)					1.00					16.67%

Based on: 10-K (reporting date: 2021-12-31).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	24,965,624)	24,965,624)	÷	26,464,798)	=	0.94	0.94	×	17.67%	=	16.67%
Debt³	1,479,423)	1,479,423)	÷	26,464,798)	=	0.06	0.06	×	5.70% × (1 – 21.00%)	=	0.25%
Operating lease liability⁴	19,751)	19,751)	÷	26,464,798)	=	0.00	0.00	×	7.70% × (1 – 21.00%)	=	0.00%
Total:	26,464,798)					1.00					16.93%

Based on: 10-K (reporting date: 2020-12-31).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	7,278,663)	7,278,663)	÷	7,491,633)	=	0.97	0.97	×	17.67%	=	17.17%
Debt³	200,258)	200,258)	÷	7,491,633)	=	0.03	0.03	×	7.57% × (1 – 21.00%)	=	0.16%
Operating lease liability⁴	12,712)	12,712)	÷	7,491,633)	=	0.00	0.00	×	8.60% × (1 – 21.00%)	=	0.01%
Total:	7,491,633)					1.00					17.34%

Based on: 10-K (reporting date: 2019-12-31).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Enphase Energy Inc., economic spread ratio calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in thousands)
Economic profit¹	304,266)	359,338)	125,639)	(28,207)	76,426)
Invested capital²	1,302,318)	1,285,383)	779,239)	951,473)	528,927)
Performance Ratio
Economic spread ratio³	23.36%	27.96%	16.12%	-2.96%	14.45%
Benchmarks
Economic Spread Ratio, Competitors⁴
Advanced Micro Devices Inc.	-19.23%	-18.95%	37.78%	11.52%	-6.61%
Analog Devices Inc.	-6.87%	-8.23%	-11.50%	-6.56%	-5.03%
Applied Materials Inc.	19.04%	28.90%	24.43%	12.60%	12.22%
Broadcom Inc.	9.61%	8.03%	-1.35%	-6.90%	-6.60%
Intel Corp.	-13.28%	-6.85%	10.34%	16.01%	14.10%
KLA Corp.	25.21%	27.46%	16.13%	4.97%	6.46%
Lam Research Corp.	11.51%	26.12%	25.58%	8.58%	5.12%
Micron Technology Inc.	-25.50%	2.34%	-2.19%	-7.80%	2.38%
NVIDIA Corp.	-8.90%	33.30%	13.73%	-0.27%	60.33%
ON Semiconductor Corp.	0.42%	2.32%	-2.03%	-13.35%	-9.90%
Qualcomm Inc.	3.75%	30.19%	27.59%	12.63%	14.02%
Texas Instruments Inc.	15.72%	36.39%	35.00%	30.15%	29.83%

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).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2023 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 304,266 ÷ 1,302,318 = 23.36%

⁴ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic spread ratio	The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital.	Enphase Energy Inc. economic spread ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023.

Enphase Energy Inc., economic profit margin calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in thousands)
Economic profit¹	304,266)	359,338)	125,639)	(28,207)	76,426)

Net revenues	2,290,786)	2,330,853)	1,382,049)	774,425)	624,333)
Add: Increase (decrease) in deferred revenues	115,112)	122,504)	76,718)	(8,849)	71,957)
Adjusted net revenues	2,405,898)	2,453,357)	1,458,767)	765,576)	696,290)
Performance Ratio
Economic profit margin²	12.65%	14.65%	8.61%	-3.68%	10.98%
Benchmarks
Economic Profit Margin, Competitors³
Advanced Micro Devices Inc.	-49.09%	-46.99%	14.24%	5.15%	-3.35%
Analog Devices Inc.	-24.68%	-30.85%	-73.91%	-21.32%	-15.39%
Applied Materials Inc.	12.76%	16.69%	15.59%	9.59%	8.47%
Broadcom Inc.	16.81%	15.02%	-3.18%	-19.05%	-17.54%
Intel Corp.	-22.55%	-9.64%	11.58%	16.86%	15.79%
KLA Corp.	20.03%	23.21%	15.89%	5.56%	9.02%
Lam Research Corp.	10.02%	18.95%	18.26%	8.40%	4.47%
Micron Technology Inc.	-87.75%	4.01%	-3.66%	-15.38%	3.95%
NVIDIA Corp.	-7.04%	22.32%	10.73%	-0.34%	24.63%
ON Semiconductor Corp.	0.55%	2.61%	-2.28%	-17.50%	-12.30%
Qualcomm Inc.	3.29%	20.11%	16.62%	9.53%	12.38%
Texas Instruments Inc.	20.27%	31.91%	31.31%	27.03%	25.01%

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).

¹ Economic profit. See details »

² 2023 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net revenues
= 100 × 304,266 ÷ 2,405,898 = 12.65%

³ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin.	Enphase Energy Inc. economic profit margin improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023.

Enphase Energy Inc. (NASDAQ:ENPH)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin