Analysis of Geographic Areas
Enphase Energy Inc. operates in 2 regions: United States and International.
Area Asset Turnover
Enphase Energy Inc., asset turnover by geographic area
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| United States | 13.67 | 32.38 | 29.42 | 32.10 | 31.25 |
| International | 13.52 | 9.99 | 6.14 | 5.91 | 8.27 |
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).
- United States Asset Turnover
- The asset turnover ratio in the United States showed a generally stable trend from 2019 through 2021, with values around 29 to 32. The ratio increased slightly from 31.25 in 2019 to 32.1 in 2020, then decreased to 29.42 in 2021. In 2022, there was a recovery with the ratio climbing back to 32.38. However, there was a significant decline in 2023, with the asset turnover dropping sharply to 13.67, indicating a substantial reduction in asset efficiency within the U.S. market during that year.
- International Asset Turnover
- The international asset turnover ratio exhibited more variability over the same period. It started at 8.27 in 2019 and declined to 5.91 in 2020, reflecting a reduction in efficiency. This was followed by a minor increase to 6.14 in 2021. The ratio then improved more notably in 2022 to 9.99, suggesting enhanced utilization of assets internationally. By 2023, the international asset turnover ratio rose further to 13.52, nearly matching the previous year's sharp decline in the U.S. ratio and indicating a strong upward trend in international operational efficiency.
- Comparative Insights
- Comparing both regions, the U.S. market started with much higher asset turnover ratios than the international segment. Despite some fluctuations, the U.S. asset turnover remained relatively stable until 2022. The pronounced drop in 2023 contrasts with the international trend, which saw consistent improvement and ultimately a significant increase in asset turnover. This suggests a shift in operational dynamics, where international asset utilization has strengthened considerably, while U.S. efficiency has deteriorated markedly in the most recent year.
Area Asset Turnover: United States
Enphase Energy Inc.; United States; area asset turnover calculation
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Net revenues | 1,469,108) | 1,761,846) | 1,108,801) | 637,879) | 523,577) |
| Long-lived assets | 107,448) | 54,406) | 37,685) | 19,870) | 16,754) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 13.67 | 32.38 | 29.42 | 32.10 | 31.25 |
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 2023 Calculation
Area asset turnover = Net revenues ÷ Long-lived assets
= 1,469,108 ÷ 107,448 = 13.67
The annual data for the United States geographic area reflects several notable trends in financial performance and asset management over the five-year period ending December 31, 2023.
- Net Revenues
- Net revenues demonstrate a strong overall growth trend from 2019 to 2022, increasing from approximately $523.6 million in 2019 to about $1.76 billion in 2022. This represents a compound growth trajectory over these years, with the most significant jump occurring between 2020 and 2021 where net revenues rose by about 74%. However, in 2023, net revenues declined to approximately $1.47 billion, indicating a contraction of about 17% from the previous year. This reversal suggests potential challenges or market contractions impacting sales or revenues in that latest period.
- Long-lived Assets
- Long-lived assets follow a consistent upward trend throughout all periods, increasing substantially from $16.8 million in 2019 to $107.4 million by the end of 2023. The asset base expanded more than sixfold over these five years, with noticeable acceleration in asset additions particularly between 2022 and 2023, where the asset value nearly doubled. This pattern signals ongoing investments in long-term resources or infrastructure, potentially supporting capacity expansion or technological improvements.
- Area Asset Turnover
- The area asset turnover ratio, which measures the efficiency of asset use in generating revenues, remains relatively stable around the 30–32 range from 2019 through 2022. This indicates that the company maintained a consistent ability to generate revenues from its asset base despite asset growth. However, there is a pronounced decline in 2023 where the ratio drops sharply to approximately 13.67. This decrease highlights a significant reduction in revenue generation efficiency relative to the asset base, likely influenced by the simultaneous decline in revenues alongside a sharp increase in long-lived assets.
In summary, the data reveal a period of robust revenue growth coupled with expanding assets up to 2022, followed by a revenue decline in 2023 alongside rapid asset accumulation. The drop in asset turnover during 2023 suggests that the additional assets have not yet translated into proportional revenue gains, indicating a potential lag in asset utilization or market challenges impacting returns on investment during that year.
Area Asset Turnover: International
Enphase Energy Inc.; International; area asset turnover calculation
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Net revenues | 821,678) | 569,007) | 273,248) | 136,546) | 100,756) |
| Long-lived assets | 60,796) | 56,961) | 44,482) | 23,115) | 12,182) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 13.52 | 9.99 | 6.14 | 5.91 | 8.27 |
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 2023 Calculation
Area asset turnover = Net revenues ÷ Long-lived assets
= 821,678 ÷ 60,796 = 13.52
- Net Revenues
- There is a consistent and significant upward trend in net revenues over the five-year period. The figure increased from approximately US$100.8 million in 2019 to US$821.7 million in 2023, representing more than an eightfold increase. This indicates robust growth in revenue generation in the international geographic area.
- Long-Lived Assets
- Long-lived assets have also increased steadily from US$12.2 million in 2019 to US$60.8 million in 2023. While the asset base has grown roughly five times, the growth rate of assets is slower compared to the growth in net revenues. This suggests that the company has been able to generate higher revenues with a relatively moderate increase in assets.
- Area Asset Turnover
- The area asset turnover ratio exhibits fluctuating but overall improving performance. It decreased from 8.27 in 2019 to 5.91 in 2020, then slightly increased to 6.14 in 2021. Notably, it improved substantially in the last two years, reaching 9.99 in 2022 and 13.52 in 2023. This upward movement reflects more efficient utilization of assets to generate revenues over time, highlighting enhanced operational efficiency in the international segment.
- Overall Insights
- The international geographic area shows strong revenue growth accompanied by moderate asset growth, leading to significant improvement in asset utilization efficiency. The marked increase in the asset turnover ratio in the most recent years emphasizes better management and deployment of assets to drive revenue expansion. These trends collectively suggest positive momentum and increasing operational effectiveness in the international market.
Net revenues
Enphase Energy Inc., net revenues by geographic area
US$ in thousands
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| United States | 1,469,108) | 1,761,846) | 1,108,801) | 637,879) | 523,577) |
| International | 821,678) | 569,007) | 273,248) | 136,546) | 100,756) |
| Total | 2,290,786) | 2,330,853) | 1,382,049) | 774,425) | 624,333) |
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).
- United States Net Revenues
- The net revenues from the United States show a general upward trend from 2019 through 2022, increasing from approximately $523.6 million to $1.76 billion. This represents a substantial growth over the four-year period. However, in 2023, there is a noticeable decline to about $1.47 billion, indicating a contraction compared to the previous year.
- International Net Revenues
- International revenues exhibit strong and consistent growth over the entire period. Starting from roughly $100.8 million in 2019, revenues more than doubled each year until 2022, reaching $569 million. This positive trajectory continues into 2023, with revenues increasing further to approximately $822 million.
- Total Net Revenues
- Total net revenues follow a growth pattern consistent with the combined figures from the United States and international segments. There is a significant rise from $624.3 million in 2019 to $2.33 billion in 2022. However, in 2023, total revenues slightly decline to $2.29 billion, which is primarily driven by the reduced revenues in the United States region despite continued growth internationally.
- Insights and Trends
- The data reveals a strong overall growth momentum in both geographic areas until 2022, which supports substantial expansion in total company revenues. The decrease in U.S. revenues in 2023 marks a deviation from the previous growth trend and suggests potential market saturation or other external factors affecting domestic sales. In contrast, the international market continues to expand robustly, contributing an increasing share to total revenues and partially offsetting the decline experienced in the domestic market.
Long-lived assets
Enphase Energy Inc., long-lived assets by geographic area
US$ in thousands
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| United States | 107,448) | 54,406) | 37,685) | 19,870) | 16,754) |
| International | 60,796) | 56,961) | 44,482) | 23,115) | 12,182) |
| Total | 168,244) | 111,367) | 82,167) | 42,985) | 28,936) |
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).
- Long-Lived Assets in the United States
- Over the five-year period, the United States shows a consistent and substantial increase in long-lived assets. Starting at $16,754 thousand at the end of 2019, the value grew steadily each year, reaching $107,448 thousand by the end of 2023. This represents an overall increase of approximately 541%, indicating significant investment or asset acquisition within the domestic market.
- Long-Lived Assets in International Locations
- The international long-lived assets also demonstrate growth over the same period but at a more moderate pace compared to the United States. The value increased from $12,182 thousand in 2019 to $60,796 thousand in 2023, reflecting a nearly 399% increase. The most notable jump occurred between 2019 and 2021, followed by a slowdown in the rate of growth from 2021 onward.
- Total Long-Lived Assets
- The aggregate long-lived assets reveal a rising trend consistent with the geographic breakdowns. Total assets rose from $28,936 thousand in 2019 to $168,244 thousand in 2023, demonstrating an overall increase of roughly 481%. The growth trajectory is marked by accelerated increases between 2020 and 2022, with a particularly sharp rise in 2023, driven mainly by domestic asset growth.
- Comparative Insights
- The data indicates that domestic long-lived assets constitute the majority of total assets throughout the period, with the gap widening significantly by 2023. While international assets contribute to overall growth, their expansion rate slows in the latter years. The company appears to have intensified investments or asset development primarily within the United States in recent years, suggesting strategic prioritization or market conditions favoring domestic asset expansion.