GlobeNewswire Inc | Feb 9, 2021 04:05PM EST

February 09, 2021

FREMONT, Calif., Feb. 09, 2021 (GLOBE NEWSWIRE) -- Enphase Energy, Inc. (NASDAQ: ENPH), a global energy management technology company and the worlds leading supplier of microinverter-based solar-plus-storage systems, announced today financial results for the fourth quarter of2020, which included the summary below from its President and CEO, Badri Kothandaraman.

We reported revenue of $264.8million in the fourth quarter of 2020, along with 40.2% for non-GAAP gross margin. We shipped approximately 762megawatts DC, or 2,292,132 microinverters.

The financial highlights for the fourth quarter of 2020 are listed below. The GAAP numbers include an approximate $16.5 million approved refund on tariffs that were previously paid on microinverters imported to the U.S. from China. The tariff refund is excluded from all non-GAAP numbers.

-- Revenue of $264.8million -- Cash flow from operations of $84.2million; ending cash balance of $679.4million -- GAAP gross margin of 46.0%; non-GAAP gross margin of 40.2% -- GAAP operating income of $79.1million; non-GAAP operating income of $72.4million -- GAAP net income of $73.0million; non-GAAP net income of $71.3million -- GAAP diluted earnings per share of $0.50; non-GAAP diluted earnings per share of $0.51

Our revenue and earnings for the fourth quarter of 2020 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 2020 Q3 2020 Q4 2019* Q4 2020 Q3 2020 Q4 2019*Revenue $ 264,839 $ 178,503 $ 210,032 $ 264,839 $ 178,503 $ 210,032 Gross margin 46.0 % 53.2 % 37.1 % 40.2 % 41.0 % 37.3 %Operating $ 42,824 $ 43,222 $ 33,439 $ 34,193 $ 29,571 $ 26,140 expensesOperating income $ 79,114 $ 51,759 $ 44,442 $ 72,356 $ 43,675 $ 52,277 Net income $ 72,991 $ 39,362 $ 116,666 $ 71,342 $ 41,760 $ 52,038 Basic EPS $ 0.57 $ 0.31 $ 0.95 $ 0.56 $ 0.33 $ 0.42 Diluted EPS $ 0.50 $ 0.28 $ 0.88 $ 0.51 $ 0.30 $ 0.39 * Revenue for the fourth quarter of 2019 of $210.0 million includedapproximately $36.4 million of safe harbor revenue.

Our revenue and earnings for the fiscal year 2020 are given below, compared with those of the prior year:

(In thousands, except per share data and percentages)

GAAP Non-GAAP FY 2020 FY 2019 FY 2020 FY 2019Revenue $ 774,425 $ 624,333 $ 774,425 $ 624,333 Gross margin 44.7 % 35.4 % 40.1 % 35.7 %Operating expenses $ 159,542 $ 118,516 $ 118,296 $ 95,943 Operating income $ 186,439 $ 102,729 $ 192,504 $ 126,952 Net income $ 133,995 $ 161,148 $ 188,526 $ 124,205 Basic EPS $ 1.07 $ 1.38 $ 1.50 $ 1.06 Diluted EPS $ 0.95 $ 1.23 $ 1.37 $ 0.95

We accelerated our progress on digital transformation. We recently completed the acquisition of Sofdesk Inc. in the first quarter of 2021. Sofdesk is a leading provider of design software for residential solar installers and roofing companies. We also recently signed a definitive agreement to acquire the Solar Design Services business of DIN Engineering Services LLP. The business provides proposal drawings and permit plan sets to installers with rapid turnaround and high precision. These acquisitions are expected to enhance the capabilities of our digital platform, enabling our installers to simplify the sales process and improve the buying experience for homeowners.

Our non-GAAP gross margin was 40.2% in the fourth quarter of 2020, compared to 41.0% in the third quarter due to higher shipping and logistics costs. We experienced constraints in the global semiconductor supply chain during the quarter and expedited products to meet customer demand. Non-GAAP operating expenses increased to $34.2million in the fourth quarter of 2020, compared to $29.6million in the prior quarter, primarily due to increased hiring and R&D. Non-GAAP operating income was $72.4million, compared to $43.7million in the prior quarter.

We exited the fourth quarter of 2020 with $679.4million in cash and generated $84.2million in cash flow from operations. Inventory was $41.8million at the end of the fourth quarter of 2020, compared to $37.5million at the end of the third quarter of 2020. The sequential increase in inventory was driven by the planned increase of raw materials for our Enphase Storage systems in anticipation of the production ramp in 2021.

Strong demand for our microinverter systems across all regions continued in the fourth quarter of 2020, while shipments of our newly ramped Enphase Storage systems increased approximately 35% compared to the third quarter. We achieved record microinverter system sell-through from distributors to installers in the fourth quarter of 2020, resulting in lower than usual channel inventory as we exited the quarter.

For the full year 2020, revenue was $774.4 million, compared to $624.3 million in 2019. We generated a record $198.9 million free cash flow in 2020, compared to $124.3 million in 2019. GAAP net income was $134.0 million, resulting in diluted earnings per share of $0.95. Non-GAAP net income was $188.5 million, resulting in diluted earnings per share of $1.37. We are pleased to report that 2020 was a record year for non-GAAP profitability and free cash flow generation.

BUSINESS HIGHLIGHTS

On Nov. 9, 2020, Enphase Energy announced that Cutler Bay Solar Solutions, Floridas largest family-owned solar-plus-storage installation company, deployed more than 1.5 MWh of Enphase Storage systems. The installations include a combination of Enphase Encharge 10 and Encharge 3 storage systems, which offer usable and scalable battery storage capacities of approximately 10.1 kWh and 3.4 kWh, respectively.

On Nov. 12, 2020, Enphase Energy announced a strategic partnership with DMEGC Solarto develop high-efficiency Enphase Energized AC modules (ACM) for the European residential solar market. These ACMs are currently available inFranceandthe Netherlands.

On Dec. 14, 2020, Enphase Energy announced the launch of its Enphase Installer Network (EIN) in Australia. The EIN recognizes a network of trusted installers that deliver exceptional homeowner experiences using Enphase products and enables them to grow their business with a range of innovative digital tools and exclusive benefits.

On Jan. 6, 2021, Enphase Energy announced the expansion of its long-term relationship with Sunnova International Inc. to include Enphase Storage systems. Sunnova will empower its network of solar dealers in theU.S.to provide a simple upgrade path for existing Enphase homeowners as well as homeowners who are new to solar and storage.

On Jan. 14, 2021, Enphase Energy announced that Solar Optimum, an EIN Platinum member, will start offering Enphase Storage systems with a team dedicated to growing Enphase storage adoption and promoting Enphases all-in-one solar plus storage products as the premier home energy management solution.

On Jan. 26, 2021, Enphase Energy announced the closing of its acquisition of Sofdesk Inc., headquartered in Montreal, Canada. Sofdesks Solargrafintegrated software platform offers the industrys leading digital tools and services designed to simplify and accelerate the end-to-end sales process across the residential solar industry. Sofdesk also offers Roofgraf, a software product that enables roofing contractors to generate homeowner proposals using advanced machine learning technology.

On Feb. 3, 2021, Enphase Energy announced that Momentum Solar will now promote and install Enphase Storage systems in addition to Enphase Solar systems as its all-in-one home energy management solution to homeowners. Momentum Solar currently serves customers throughout the U.S. with operations in New Jersey, New York, Connecticut, Pennsylvania, Florida, Texas, California, and Nevada.

On Feb. 8, 2021, Enphase Energy announced that it has agreed to acquire the Solar Design Services business of DIN Engineering Services LLP. Based in Noida, India, the business is a leading provider of outsourced proposal drawings and permit plan sets for residential solar installers in North America. The acquisition is subject to customary closing conditions and regulatory approvals and is currently expected to close by March 31, 2021.

FIRST QUARTER 2021 FINANCIAL OUTLOOK

For the first quarter of 2021, Enphase Energy estimates both GAAP and non-GAAP financial results as follows:

-- Revenue to be within a range of $280.0 million to $300.0 million; revenue guidance does not include any safe harbor shipments -- GAAP gross margin to be within a range of 37.0% to 40.0%, as there are no remaining tariff refunds pending approval; non-GAAP gross margin to be within a range of 38.0% to 41.0%, excluding stock-based compensation expenses -- GAAP operating expenses to be within a range of $64.0million to $67.0million, including $22.0million estimated for stock-based compensation expenses and acquisition related costs and amortization -- Non-GAAP operating expenses to be within a range of $42.0million to $45.0million, excluding $22.0million estimated for stock-based compensation expenses and acquisition related costs and amortization

All estimates for the first quarter of 2021 include Sofdesk, but do not include DINs Solar Design Services business.

Follow Enphase Online

-- Read the Enphase blog. -- Follow @Enphase on Twitter. -- Visit us on Facebook and LinkedIn. -- Watch Enphase videos on YouTube.

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 2020 results and first quarter 2021 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 2196494. A live webcast of the conference call will also be accessible from the Investor Relations section of the Companys 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 2196494, beginning approximately one hour after the call.

Forward-Looking Statements

This press release contains forward-looking statements, including statements related to Enphase Energys expectations as to future financial performance, expense levels, liquidity sources, the capabilities, advantages, and performance of our technology and products, including the ability to simplify and speed up solar installation sales processes, our business strategies and anticipated demand for our products, the capabilities and performance of our partners, and the impact to homeowners. These forward-looking statements are based on the Companys current expectations and inherently involve significant risks and uncertainties. Enphase Energys 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 Companys most recent Annual Report on Form 10-K and other documents on file with the SEC and available on the SECs 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 Energys website at investor.enphase.com.

About Enphase Energy, Inc.

Enphase Energy, a global energy technology company, delivers smart, easy-to-use solutions that manage solar generation, storage and communication on one intelligent platform. The Company revolutionized the solar industry with its microinverter technology and produces a fully integrated solar-plus-storage solution. Enphase has shipped more than 32 million microinverters, and approximately 1.4millionEnphase-based systems have been deployed in more than 130countries. For more information, visit www.enphase.com.

Enphase Energy, Enphase, the E logo, Encharge 3, Encharge 10, Enphase Energized, and other trademarks or service names are the trademarks of Enphase Energy, Inc. Solargraf and Roofgraf are the trademarks of Sofdesk Inc. Other names are for informational purposes and may be trademarks of their respective owners.

Contact:Adam HinckleyEnphase Energy, Inc.Investor Relationsir@enphaseenergy.com+1-707-763-4784 x7354



ENPHASE ENERGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except per share data)(Unaudited) Three Months Ended Years Ended December 31, December September December December December 31, 30, 31, 31, 31, 2020 2020 2019 2020 2019Net revenues $ 264,839 $ 178,503 $ 210,032 $ 774,425 $ 624,333 Cost of 142,901 83,522 132,151 428,444 403,088 revenues (1)Gross profit 121,938 94,981 77,881 345,981 221,245 Operating expenses:Research and 15,801 15,052 11,168 55,921 40,381 developmentSales and 14,139 14,645 10,690 52,927 36,728 marketingGeneral and 12,884 13,525 10,450 50,694 38,808 administrativeRestructuring ? ? 1,131 ? 2,599 charges Totaloperating 42,824 43,222 33,439 159,542 118,516 expensesIncome from 79,114 51,759 44,442 186,439 102,729 operationsOther expense, netInterest 673 110 815 2,156 2,513 incomeInterest (5,901 ) (5,993 ) (2,303 ) (21,001 ) (9,691 )expenseOther expense, (2,534 ) (1,031 ) 1,467 (3,836 ) (5,437 )netChange in fairvalue of ? ? ? (44,348 ) ? derivatives(2) Total other (7,762 ) (6,914 ) (21 ) (67,029 ) (12,615 )expense, netIncome before 71,352 44,845 44,421 119,410 90,114 income taxesIncome taxbenefit 1,639 (5,483 ) 72,245 14,585 71,034 (provision)Net income $ 72,991 $ 39,362 $ 116,666 $ 133,995 $ 161,148 Net income per share:Basic $ 0.57 $ 0.31 $ 0.95 $ 1.07 $ 1.38 Diluted $ 0.50 $ 0.28 $ 0.88 $ 0.95 $ 1.23 Shares used inper share calculation:Basic 126,980 126,109 122,630 125,561 116,713 Diluted 145,990 141,820 132,872 141,918 131,644

(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 are expected to be issued. As of the three 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.

(2) 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 May20, 2020, at the Companys annual meeting of stockholders, the stockholders approved an amendment to its certificate of incorporation to increase the number of authorized shares of the Companys 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 Companys election. Accordingly, on May20, 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, December 31, 2020 2019ASSETS Current assets: Cash and cash equivalents $ 679,379 $ 251,409 Restricted cash ? 44,700 Accounts receivable, net 182,165 145,413 Inventory 41,764 32,056 Prepaid expenses and other assets 29,756 26,079 Total current assets 933,064 499,657 Property and equipment, net 42,985 28,936 Operating lease, right of use asset, net 17,683 10,117 Intangible assets, net 28,808 30,579 Goodwill 24,783 24,783 Other assets 59,875 44,620 Deferred tax assets, net 92,904 74,531 Total assets $ 1,200,102 $ 713,223 LIABILITIES AND STOCKHOLDERS? EQUITY Current liabilities: Accounts payable $ 72,609 $ 57,474 Accrued liabilities 76,542 47,092 Deferred revenues, current 47,665 81,783 Warranty obligations, current 11,260 10,078 Debt, current 325,967 2,884 Total current liabilities 534,043 199,311 Long-term liabilities: Deferred revenues, noncurrent 125,473 100,204 Warranty obligations, noncurrent 34,653 27,020 Other liabilities 17,042 11,817 Debt, noncurrent 4,898 102,659 Total liabilities 716,109 441,011 Total stockholders? equity 483,993 272,212 Total liabilities and stockholders? equity $ 1,200,102 $ 713,223

ENPHASE ENERGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands)(Unaudited)

Three Months Ended Year Ended December September December December December 31, 30, 31, 31, 31, 2020 2020 2019 2020 2019Cash flowsfrom operating activities:Net income $ 72,991 $ 39,362 $ 116,666 $ 133,995 $ 161,148 Adjustments toreconcile netincome to net cash providedby operatingactivities:Depreciationand 4,475 4,765 2,568 17,225 14,119 amortizationProvision fordoubtful 171 69 (191 ) 425 217 accountsAsset ? ? 1,124 ? 1,124 impairmentLoss onpartialrepurchase of 3,037 ? ? 3,037 ? convertiblesnotes due 2024Deemedrepayment ofconvertiblenotes due 2024 (3,132 ) ? ? (3,132 ) ? attributableto accreteddebt discountNon-cashinterest 5,309 5,422 1,908 18,825 6,081 expenseFinancing feeson ? ? ? ? 2,152 extinguishmentof debtFees paid forrepurchase andexchange of ? ? ? ? 6,000 convertiblenotes due 2023Stock-based 8,289 14,399 6,176 42,503 20,176 compensationChange in fairvalue of ? ? ? 44,348 ? derivativesDeferred (2,610 ) 5,060 (73,375 ) (17,117 ) (73,375 )income taxesChanges inoperating assets andliabilities:Accounts (57,854 ) (32,633 ) (12,606 ) (34,321 ) (68,745 )receivableInventory (4,229 ) (6,349 ) (1,825 ) (9,708 ) (15,789 )Prepaidexpenses and (3,307 ) (917 ) (5,659 ) (13,758 ) (14,293 )other assetsAccountspayable,accrued and 44,895 26,189 3,544 35,695 22,200 otherliabilitiesWarranty 2,134 5,872 2,474 8,815 5,804 obligationsDeferred 14,011 6,262 61,467 (10,498 ) 72,248 revenues Net cashprovided by 84,180 67,501 102,271 216,334 139,067 operatingactivitiesCash flowsfrom investing activities:Purchases ofproperty and (8,851 ) (3,903 ) (7,420 ) (20,558 ) (14,788 )equipmentPurchase ofinvestment in (5,010 ) ? ? (5,010 ) ? privatecompany Net cashused in (13,861 ) (3,903 ) (7,420 ) (25,568 ) (14,788 )investingactivitiesCash flowsfrom financing activities:Issuance ofconvertible ? ? (68 ) 312,420 127,413 notes, net ofissuance costsPurchase ofconvertible ? ? ? (89,056 ) (36,313 )note hedgesSale of ? ? ? 71,552 29,818 warrantsFees paid forrepurchase andexchange of ? ? ? ? (6,000 )convertiblenotes due 2023Principalpayments and (306 ) (636 ) (198 ) (2,575 ) (45,855 )financing feeson debtPartialrepurchase of (40,728 ) ? ? (40,728 ) ? convertiblenotes due 2024Proceeds fromexercise ofequity awards 3,687 (138 ) 2,060 8,395 4,985 and employeestock purchaseplanPayment ofwithholdingtaxes related (16,288 ) (8,390 ) (3,760 ) (68,330 ) (8,198 )to net sharesettlement ofequity awards Net cashprovided by (53,635 ) (9,164 ) (1,966 ) 191,678 65,850 financingactivities Effect ofexchange ratechanges on 903 104 178 826 (257 )cash and cashequivalentsNet increasein cash, cashequivalents 17,587 54,538 93,063 383,270 189,872 and restrictedcashCash, cashequivalentsand restricted 661,792 607,254 203,046 296,109 106,237 cash?Beginningof periodCash. cashequivalentsand restricted $ 679,379 $ 661,792 $ 296,109 $ 679,379 $ 296,109 cash?End ofperiod

(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 September December December December 31, 30, 31, 31, 31, 2020 2020 2019 2020 2019Gross profit $ 121,938 $ 94,981 $ 77,881 $ 345,981 $ 221,245 (GAAP)Stock-based 522 1,294 536 3,759 1,650 compensationTariff refunds (15,911 ) (23,029 ) ? (38,940 ) ? Gross profit $ 106,549 $ 73,246 $ 78,417 $ 310,800 $ 222,895 (Non-GAAP) Gross margin 46.0 % 53.2 % 37.1 % 44.7 % 35.4 %(GAAP)Stock-based 0.2 % 0.7 % 0.2 % 0.5 % 0.3 %compensationTariff refunds (6.0 ) (12.9 ) ? % (5.1 ) ? % % % %Gross margin 40.2 % 41.0 % 37.3 % 40.1 % 35.7 %(Non-GAAP) Operatingexpenses $ 42,824 $ 43,222 $ 33,439 $ 159,542 $ 118,516 (GAAP)Stock-basedcompensation (7,767 ) (13,105 ) (5,623 ) (38,744 ) (17,791 )(1)Restructuringand asset ? ? (1,131 ) ? (2,599 )impairmentchargesAcquisitionrelated (864 ) (546 ) (545 ) (2,502 ) (2,183 )expenses andamortizationOperatingexpenses $ 34,193 $ 29,571 $ 26,140 $ 118,296 $ 95,943 (Non-GAAP) ^(1) Includesstock-based compensationas follows:Research and $ 3,271 $ 4,248 $ 1,642 $ 12,701 $ 4,897 developmentSales and 2,044 3,952 1,778 11,548 5,678 marketingGeneral and 2,452 4,905 2,203 14,495 7,216 administrativeTotal $ 7,767 $ 13,105 $ 5,623 $ 38,744 $ 17,791 Income fromoperations $ 79,114 $ 51,759 $ 44,442 $ 186,439 $ 102,729 (GAAP)Stock-based 8,289 14,399 6,159 42,503 19,441 compensationTariff refunds (15,911 ) (23,029 ) ? (38,940 ) ? Restructuringand asset ? ? 1,131 ? 2,599 impairmentchargesAcquisitionrelated 864 546 545 2,502 2,183 expenses andamortizationIncome fromoperations $ 72,356 $ 43,675 $ 52,277 $ 192,504 $ 126,952 (Non-GAAP) Net income $ 72,991 $ 39,362 $ 116,666 $ 133,995 $ 161,148 (GAAP)Stock-based 8,289 14,399 6,159 42,503 19,441 compensationTariff refunds (16,538 ) (23,029 ) ? (39,567 ) ? Restructuringand asset ? ? 1,131 ? 2,599 impairmentchargesAcquisitionrelated 864 546 545 2,502 2,183 expenses andamortizationNon-recurringdebtprepayment 5,309 5,422 1,908 18,825 13,205 fees andnon-cashinterestLoss onpartial 3,037 ? ? 3,037 ? settlement ofNotes due 2024 Three Months Ended Year Ended December September December December December 31, 30, 31, 31, 31, 2020 2020 2019 2020 2019Change in fairvalue of ? ? ? 44,348 ? derivativesNon-GAAPincome tax (2,610 ) 5,060 (74,371 ) (17,117 ) (74,371 )adjustmentNet income $ 71,342 $ 41,760 $ 52,038 $ 188,526 $ 124,205 (Non-GAAP) Net income(loss) per $ 0.57 $ 0.31 $ 0.95 $ 1.07 $ 1.38 share, basic(GAAP)Stock-based 0.07 0.12 0.05 0.34 0.17 compensationTariff refunds (0.13 ) (0.18 ) ? (0.32 ) ? Restructuringand asset ? ? 0.01 ? 0.02 impairmentchargesAcquisitionrelated 0.01 ? ? 0.02 0.02 expenses andamortizationNon-recurringdebtprepayment 0.04 0.04 0.02 0.15 0.11 fees andnon-cashinterestLoss onpartial 0.02 ? ? 0.03 ? settlement ofNotes due 2024Change in fairvalue of ? ? ? 0.35 ? derivativesNon-GAAPincome tax (0.02 ) 0.04 (0.61 ) (0.14 ) (0.64 )adjustmentNet income pershare, basic $ 0.56 $ 0.33 $ 0.42 $ 1.50 $ 1.06 (Non-GAAP) Shares used inbasic pershare 126,980 126,109 122,630 125,561 116,713 calculationGAAP andNon-GAAP Net income pershare, diluted $ 0.50 $ 0.28 $ 0.88 $ 0.95 $ 1.23 (GAAP)Stock-based 0.07 0.11 0.05 0.31 0.15 compensationTariff refunds (0.12 ) (0.17 ) ? (0.28 ) ? Restructuringand asset ? ? 0.01 ? 0.02 impairmentchargesAcquisitionrelated 0.01 ? ? 0.02 0.02 expenses andamortizationNon-recurringdebtprepayment 0.04 0.04 0.01 0.14 0.10 fees andnon-cashinterestLoss onpartial 0.02 ? ? 0.02 ? settlement ofNotes due 2024Change in fairvalue of ? ? ? 0.33 $ ? derivativesNon-GAAPincome tax (0.01 ) 0.04 (0.56 ) (0.12 ) (0.57 )adjustmentNet income(loss) per $ 0.51 $ 0.30 $ 0.39 $ 1.37 $ 0.95 share, diluted(Non-GAAP) Shares used indiluted pershare 145,990 141,820 132,872 141,918 131,644 calculationGAAPShares used inper share 139,527 137,352 132,233 137,469 131,193 calculationNon-GAAP Net cashprovided byoperating $ 84,180 $ 67,501 $ 102,271 $ 216,334 $ 139,067 activities(GAAP)Purchases ofproperty and (8,851 ) (3,903 ) (7,420 ) (20,558 ) (14,788 )equipmentDeemedrepayment ofconvertiblenotes due 2024 3,132 ? ? 3,132 ? attributableto accreteddebt discountFree cash flow $ 78,461 $ 63,598 $ 94,851 $ 198,908 $ 124,279 (Non-GAAP)

(2) Calculation of non-GAAP diluted net income per share for the three months ended December31, 2020, September30, 2020 and December31, 2019 excludes convertible notes due 2023 interest expense, net of tax of less than $0.1million in each period from non-GAAP net income. Calculation of non-GAAP diluted net income per share for the year ended December 31, 2020 and December31, 2019 excludes convertible notes due 2023 interest expense, net of tax of $0.1million and $0.9million, respectively, 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 5,063 thousand shares, 4,468 thousand shares and 639 thousand shares in the three months ended December31, 2020, September30, 2020 and December31, 2019, respectively, and 4,449 thousands and 451 thousand shares for the twelve months ended December31, 2020 and December31, 2019, respectively from non-GAAP weighted-average diluted shares as the Company entered into convertible note hedge transactions that reduce potential dilution to the Companys common stock upon any conversion of the notes due 2024. The Company excluded the in-the-money portion of convertible notes due 2025 totaling 1,401 thousand shares in the three months ended December31, 2020 from non-GAAP weighted-average diluted shares as the Company entered into convertible note hedge transactions that reduce potential dilution to the Companys common stock upon any conversion of the notes due 2025.