GlobeNewswire Inc | Oct 26, 2021 04:05PM EDT

October 26, 2021

FREMONT, Calif., Oct. 26, 2021 (GLOBE NEWSWIRE) -- Enphase Energy, Inc. (NASDAQ: ENPH), a global energy technology company and the worlds leading supplier of microinverter-based solar and battery systems, announced today financial results for the third quarter of2021, which included the summary below from its President and CEO, Badri Kothandaraman.

We reported record quarterly revenue of $351.5million in the third quarter of 2021, along with 40.8% for non-GAAP gross margin. We shipped approximately 2,599,575 microinverters, or 913megawatts DC, and 65 megawatt hours of Enphase Storage systems.

Financial highlights for the third quarter of 2021 are listed below.

-- Record revenue of $351.5million -- GAAP gross margin of 39.9%; non-GAAP gross margin of 40.8% -- GAAP operating income of $37.4million; non-GAAP operating income of $85.9million -- GAAP net income of $21.8million, non-GAAP net income of $84.2million -- GAAP diluted earnings per share of $0.15; non-GAAP diluted earnings per share of $0.60 -- Cash flow from operations of $113.4million -- Ending cash, cash equivalents and marketable securities balance of $1.4billion

Our revenue and earnings for the third quarter of 2021 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 Q3 2021 Q2 2021 Q3 2020 Q3 2021 Q2 2021 Q3 2020Revenue $ 351,519 $ 316,057 $ 178,503 $ 351,519 $ 316,057 $ 178,503 Gross margin 39.9 % 40.4 % 53.2 % 40.8 % 40.8 % 41.0 %Operating $ 103,007 $ 68,401 $ 43,222 $ 57,341 $ 51,696 $ 29,571 expensesOperating $ 37,351 $ 59,400 $ 51,759 $ 85,932 $ 77,165 $ 43,675 incomeNet income $ 21,809 $ 39,351 $ 39,362 $ 84,157 $ 74,676 $ 41,760 Basic EPS $ 0.16 $ 0.29 $ 0.31 $ 0.62 $ 0.55 $ 0.33 Diluted EPS $ 0.15 $ 0.28 $ 0.28 $ 0.60 $ 0.53 $ 0.30

Total revenue increased 11% compared to the second quarter of 2021. We worked diligently to meet the surge in customer demand while successfully navigating global component supply constraints and logistics challenges.

Our non-GAAP gross margin was 40.8% in both the third and second quarter of 2021, as higher logistics and expedite costs were partially offset by a price increase on microinverters and cost management. Non-GAAP operating expenses increased to $57.3million in the third quarter of 2021, compared to $51.7million in the prior quarter, primarily due to additional investment in R&D and marketing programs, along with increased hiring. Non-GAAP operating income was $85.9million in the third quarter of 2021, compared to $77.2million in the second quarter of 2021.

We exited the third quarter of 2021 with $1.4billion in cash, cash equivalents and marketable securities and generated $113.4million in cash flow from operations. Capital expenditures were $12.7million in the third quarter of 2021, compared to $16.4million in the second quarter of 2021.

Strong demand for our microinverter systems continued in the third quarter of 2021, while shipments of our Enphase Storage systems increased approximately 51%, compared to the second quarter of 2021. Our Load Control feature gained significant adoption during the third quarter. This feature provides homeowners the ability to conserve their energy consumption by shedding non-essential loads during an outage and thereby extending the backup duration. We also made several software and hardware updates to reduce commissioning times.

Product innovation remains at the cornerstone of our growth strategy. Yesterday, we announced our all-new, all-in-one Energy System with IQ8 solar microinverters for customers in North America. Since the companys inception, we invested in custom application specific integrated circuit (ASIC) chips for our microinverters, and today we see the payoff with a software-defined microinverter smart enough to form a microgrid. Many homeowners often assume that their solar systems will function if the sun is shining, even during a power outage. This has unfortunately not been true until today. Now, with IQ8 homeowners can realize the true promise of solar to make and use their own power. IQ8 solar microinverters can provide Sunlight Backup during an outage, even without a battery.

In addition, we recently announced that our home energy systems will soon integrate with most leading models of home standby AC generators, providing enhanced performance and a glitch-free transition for homeowners during power outages. Homeowners canalso monitor real-time power flow,startand stop their generator remotely, set quiet hours toprevent their generator from operatinguntiltheir batteries fall below a designated threshold,and control itall withthe Enphase app. The newfeature functions without a generator automatic transfer switch and eliminates the power glitches that reset home electronic appliances when switching to generator power.

We continued to make excellent progress on digital transformation. Both of our recent acquisitions achieved record revenue in the third quarter of 2021. Enphase Montreal, which provides design and proposal software, added a significant number of new installers. We plan to release several new software features next year to improve the installer experience. Enphase Noida, which provides proposal and permitting services, also experienced a significant increase in customer demand and is focused on automating the creation of permit plan sets to further expand the installer base.

BUSINESS HIGHLIGHTS

On Aug. 26, 2021, Enphase Energy announced that it renewed its partnership with Grid Alternatives, a national nonprofit providing access to clean, affordable, renewable energy, transportation, and jobs to economic and environmental justice communities. Enphase will continue donating its industry-leading microinverter technology as part of the partnership to help GRID achieve its mission of accelerating a rapid, equitable transition to a world powered by renewable energy.

On Sept. 21, 2021, Enphase Energy announced its participation in Hawaiian ElectricsBattery Bonus grid services program.The program offers a new incentive for homeowners onthe island ofOahuwho install a new home battery.Existing Hawaiian Electric net energy metering (NEM) customersenrolling in the Battery Bonus programare also eligible to add up to 5 kW of new solar capacity totheirroofs without losing their existing NEM rate agreement, resultingin even more savings.

On Sept. 27, 2021, Enphase Energy announced it had entered the Brazilian solar market with the introduction of its IQ7+ microinverters. Enphase started shipping IQ7+ microinverters for residential and small commercial installers acrossBrazil starting inOct. 2021.

On Sept. 29, 2021 Enphase Energy announced that it further strengthened its presence in the European residential solar market with its expansion intoItaly. Enphase is providing the IQ7 family of microinverters, Q-Relay safety devices, and Enphase Envoy communications gateways, which connect Enphase systems to the Enphase Enlighten monitoring platform to residential installers acrossItaly.

On Oct. 18, 2021 Enphase Energy announced that it started shipping its Encharge battery storage system to customers in Belgium, further expanding the products availability in the European solar market. The Encharge battery storage system is also currently available to customers in Germany and North America. The Encharge battery storage system offers configurations ranging from 3.5kWh to 42kWh, along with the option to upgrade and expand through the lifetime of the system.

FOURTH QUARTER 2021 FINANCIAL OUTLOOK

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

-- Revenue to be within a range of $390 million to $410 million, which includes shipments of 90 to 100 megawatt hours of Enphase Storage systems -- GAAP gross margin to be within a range of 37.0% to 40.0%; 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 $119.0million to $122.0million, including $52.0million estimated for stock-based compensation expenses and acquisition related costs and amortization -- Non-GAAP operating expenses to be within a range of $67.0 million to $70.0 million, excluding $52.0 million estimated for stock-based compensation expenses and acquisition related costs and amortization. The non-GAAP estimates include increased investments in new products, software, and marketing, and a $3.6 million accrual for post combination expenses from prior acquisitions

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 third quarter 2021 results and fourth 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 1167185. 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 passcode1167185, 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, features and performance of our technology and products, including the ability to simplify and reduce installation time, our business strategies and anticipated demand for and availability of our products, the impact to homeowners, and the capabilities and performance of our partners. 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 based in Fremont, CA, is the world's leading supplier of microinverter-based solar and battery systems that enable people to harness the sun to make, use, save, and sell their own powerand control it all with a smart mobile app. The company revolutionized the solar industry with its microinverter-based technology and builds all-in-one solar, battery, and software solutions. Enphase has shipped more than 39million microinverters, and over 1.7millionEnphase-based systems have been deployed in more than 130countries. For more information, visit www.enphase.com.

Enphase Energy, Enphase, the E logo, IQ8, IQ7+, IQ7, Q-Relay, Envoy, Enlighten, Encharge and other trademarks or service names are the trademarks of Enphase Energy, Inc.

Contact:Karen SagotEnphase Energy, Inc.Investor Relationsir@enphaseenergy.com

ENPHASE ENERGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except per share data)(Unaudited)

Three Months Ended Nine Months Ended September June 30, September September September 30, 2021 30, 30, 30, 2021 2020 2021 2020Net revenues $ 351,519 $ 316,057 $ 178,503 $ 969,330 $ 509,586 Cost of 211,161 188,256 83,522 578,222 285,543 revenues (1)Gross profit 140,358 127,801 94,981 391,108 224,043 Operating expenses:Research and 29,411 22,708 15,052 73,937 40,120 developmentSales and 39,296 25,586 14,645 84,504 38,788 marketingGeneral and 34,300 20,107 13,525 74,530 37,810 administrativeTotaloperating 103,007 68,401 43,222 232,971 116,718 expensesIncome from 37,351 59,400 51,759 158,137 107,325 operationsOther income (expense), netInterest 110 98 110 281 1,483 incomeInterest (12,628 ) (12,506 ) (5,993 ) (32,463 ) (15,100 )expenseOther income 874 (633 ) (1,031 ) 814 (1,302 )(expense), netLoss onpartialsettlement of ? (13 ) ? (56,382 ) ? convertiblenotes (2)Change in fairvalue of ? ? ? ? (44,348 )derivatives(3)Total other (11,644 ) (13,054 ) (6,914 ) (87,750 ) (59,267 )expense, netIncome before 25,707 46,346 44,845 70,387 48,058 income taxesIncome taxbenefit (3,898 ) (6,995 ) (5,483 ) 22,471 12,946 (provision)Net income $ 21,809 $ 39,351 $ 39,362 $ 92,858 $ 61,004 Net income per share:Basic $ 0.16 $ 0.29 $ 0.31 $ 0.69 $ 0.49 Diluted $ 0.15 $ 0.28 $ 0.28 $ 0.65 $ 0.44 Shares used inper share calculation:Basic 134,721 135,094 126,109 133,719 125,084 Diluted 141,220 141,533 141,820 143,091 140,207

(1) We sought refunds totaling approximately $39 million plus 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 is subject to review and approval by the U.S. Customs and Border Protection; therefore, we have assessed the probable loss recovery in the three and nine months ended September 30, 2020 is equal to the $23.0 million approved refund requests available to us prior to issuance of the financial statements on October 27, 2020. As of both the three and nine months ended September 30, 2020, we have recorded $23.0 million as a reduction to cost of revenues in our condensed 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 three and nine months ended September 30, 2020.

(2) Loss on partial settlement of convertible notes of less than $0.1 million for the three months ended June 30, 2021, primarily relates to the non-cash loss on partial settlement of $0.1 million aggregate principal amount of the Notes due 2025. Loss on partial settlement of convertible notes of $56.4 million for the nine months ended September 30, 2021 primarily relates to the $9.5 million non-cash loss on partial settlement of $87.1 million aggregate principal amount of the Notes due 2024, $9.5 million non-cash loss on partial settlement of $217.8 million aggregate principal amount of the Notes due 2025 and $37.5 million non-cash inducement loss incurred on repurchase of Notes due 2025.

(3) Change in fair value of derivatives of $44.3 million for the nine months ended September 30, 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 May 20, 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 May 20, 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)

September 30, December 31, 2021 2020ASSETS Current assets: Cash and cash equivalents $ 885,546 $ 679,379 Marketable securities 508,577 ? Accounts receivable, net 273,012 182,165 Inventory 65,405 41,764 Prepaid expenses and other assets 35,541 29,756 Total current assets 1,768,081 933,064 Property and equipment, net 73,445 42,985 Operating lease, right of use asset, net 15,185 17,683 Intangible assets, net 43,146 28,808 Goodwill 61,038 24,783 Other assets 136,111 59,875 Deferred tax assets, net 133,158 92,904 Total assets $ 2,230,164 $ 1,200,102 LIABILITIES AND STOCKHOLDERS? EQUITY Current liabilities: Accounts payable $ 92,213 $ 72,609 Accrued liabilities 139,243 76,542 Deferred revenues, current 59,232 47,665 Warranty obligations, current 16,728 11,260 Debt, current 86,039 325,967 Total current liabilities 393,455 534,043 Long-term liabilities: Deferred revenues, noncurrent 177,249 125,473 Warranty obligations, noncurrent 50,784 34,653 Other liabilities 20,617 17,042 Debt, noncurrent 940,244 4,898 Total liabilities 1,582,349 716,109 Total stockholders? equity 647,815 483,993 Total liabilities and stockholders? equity $ 2,230,164 $ 1,200,102

ENPHASE ENERGY, INC.

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

Three Months Ended Nine Months Ended September June 30, September September September 30, 2021 30, 30, 30, 2021 2020 2021 2020Cash flows fromoperating activities:Net income $ 21,809 $ 39,351 $ 39,362 $ 92,858 $ 61,004 Adjustments toreconcile netincome to net cash providedby operatingactivities:Depreciationand 8,313 7,596 4,765 21,467 12,750 amortizationProvision fordoubtful 179 257 69 450 254 accountsLoss on partialsettlement of ? 13 ? 56,382 ? convertiblesnotesDeemedrepayment ofconvertiblenotes ? (6 ) ? (15,585 ) ? attributable toaccreted debtdiscountNon-cashinterest 12,430 12,307 5,422 31,893 13,516 expenseChange in fairvalue of debt (784 ) (932 ) ? (3,153 ) ? securitiesStock-based 46,954 15,312 14,399 77,110 34,214 compensationChange in fairvalue of ? ? ? ? 44,348 derivativesDeferred income 1,337 5,240 5,060 (28,790 ) (14,507 )taxesChanges inoperating assets andliabilities:Accounts 5,462 (44,812 ) (32,633 ) (93,069 ) 23,533 receivableInventory (27,648 ) (2,880 ) (6,349 ) (23,640 ) (5,479 )Prepaidexpenses and (3,568 ) (10,154 ) (917 ) (18,762 ) (10,451 )other assetsAccountspayable,accrued and 24,897 10,514 26,189 71,787 (9,200 )otherliabilities (1)Warranty 7,574 5,385 5,872 21,599 6,681 obligationsDeferred 16,399 28,469 6,262 64,308 (24,509 )revenuesNet cashprovided by 113,354 65,660 67,501 254,855 132,154 operatingactivitiesCash flows frominvesting activities:Purchases ofproperty and (12,682 ) (16,428 ) (3,903 ) (39,050 ) (11,707 )equipmentPurchases ofmarketable (545,490 ) ? ? (545,490 ) ? securitiesMaturities ofmarketable 35,000 ? ? 35,000 ? securitiesInvestments inprivate (13,000 ) (20,000 ) ? (58,000 ) ? companiesBusinessacquisitions, ? ? ? (55,239 ) ? net of cashacquiredPurchase ofintangible (250 ) ? ? (250 ) ? assetNet cash usedin investing (536,422 ) (36,428 ) (3,903 ) (663,029 ) (11,707 )activitiesCash flows fromfinancing activities:Issuance ofconvertible ? (949 ) ? 1,188,439 312,420 notes, net ofissuance costsPurchase ofconvertible ? ? ? (286,235 ) (89,056 )note hedgesSale of ? ? ? 220,800 71,552 warrantsPrincipalpayments and ? (344 ) (636 ) (1,422 ) (2,269 )financing feeson debtPartialrepurchase of ? (79 ) ? (289,312 ) ? convertiblenotesRepurchase of ? (200,000 ) ? (200,000 ) ? common stockProceeds fromexercise ofequity awards 42 3,428 (138 ) 3,684 4,708 and employeestock purchaseplanPayment ofwithholdingtaxes related (3,313 ) (7,813 ) (8,390 ) (20,311 ) (52,042 )to net sharesettlement ofequity awardsNet cashprovided by(used in) (3,271 ) (205,757 ) (9,164 ) 615,643 245,313 financingactivitiesEffect ofexchange ratechanges on cash (376 ) (224 ) 104 (1,302 ) (77 )and cashequivalentsNet increase(decrease) in (426,715 ) (176,749 ) 54,538 206,167 365,683 cash and cashequivalentsCash, cashequivalents andrestricted 1,312,261 1,489,010 607,254 679,379 296,109 cash?Beginningof periodCash and cashequivalents?End $ 885,546 $ 1,312,261 $ 661,792 $ 885,546 $ 661,792 of period

(1) As of September 30, 2020, we have received $16.0 million of tariff refunds and accrued for $7.0 million tariff refunds that were approved, however, not yet received on or before September 30, 2020. As of both the three and nine months ended September 30, 2020, we have recorded $23.0 million as a reduction to cost of revenues in our condensed 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 $7.0 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 September 30, 2020.

ENPHASE ENERGY, INC.RECONCILIATION OF NON-GAAP FINANCIAL MEASURES(In thousands, except per share data and percentages)(Unaudited)

Three MonthsEnded Nine Months Ended September June 30, September September September 30, 2021 30, 30, 30, 2021 2020 2021 2020Gross profit $ 140,358 $ 127,801 $ 94,981 $ 391,108 $ 224,043 (GAAP)Stock-based 2,915 1,060 1,294 4,957 3,237 compensationTariff refunds ? ? (23,029 ) ? (23,029 )Gross profit $ 143,273 $ 128,861 $ 73,246 $ 396,065 $ 204,251 (Non-GAAP) Gross margin 39.9 % 40.4 % 53.2 % 40.3 % 44.0 %(GAAP)Stock-based 0.9 % 0.4 % 0.7 % 0.6 % 0.6 %compensationTariff refunds ? % ? % (12.9 ) ? % (4.5 ) % %Gross margin 40.8 % 40.8 % 41.0 % 40.9 % 40.1 %(Non-GAAP) Operatingexpenses $ 103,007 $ 68,401 $ 43,222 $ 232,971 $ 116,718 (GAAP)Stock-basedcompensation (44,039 ) (14,252 ) (13,105 ) (72,153 ) (30,977 )(1)Acquisitionrelated (1,627 ) (2,453 ) (546 ) (8,082 ) (1,638 )expenses andamortizationOperatingexpenses $ 57,341 $ 51,696 $ 29,571 $ 152,736 $ 84,103 (Non-GAAP) ^(1) Includesstock-based compensationas follows:Research and $ 10,999 $ 5,467 $ 4,248 $ 22,215 $ 9,430 developmentSales and 15,472 5,335 3,952 24,344 9,504 marketingGeneral and 17,568 3,450 4,905 25,594 12,043 administrativeTotal $ 44,039 $ 14,252 $ 13,105 $ 72,153 $ 30,977 Income fromoperations $ 37,351 $ 59,400 $ 51,759 $ 158,137 $ 107,325 (GAAP)Stock-based 46,954 15,312 14,399 77,110 34,214 compensationTariff refunds ? ? (23,029 ) ? (23,029 )Acquisitionrelated 1,627 2,453 546 8,082 1,638 expenses andamortizationIncome fromoperations $ 85,932 $ 77,165 $ 43,675 $ 243,329 $ 120,148 (Non-GAAP) Net income $ 21,809 $ 39,351 $ 39,362 $ 92,858 $ 61,004 (GAAP)Stock-based 46,954 15,312 14,399 77,110 34,214 compensationTariff refunds ? ? (23,029 ) ? (23,029 )Acquisitionrelated 1,627 2,453 546 8,082 1,638 expenses andamortizationNon-cashinterest 12,430 12,307 5,422 31,893 13,516 expenseLoss onpartialsettlement of ? 13 ? 56,382 ? convertiblenotesChange in fairvalue of ? ? ? ? 44,348 derivativesNon-GAAPincome tax 1,337 5,240 5,060 (28,790 ) (14,507 )adjustmentNet income $ 84,157 $ 74,676 $ 41,760 $ 237,535 $ 117,184 (Non-GAAP)

Net incomeper share, $ 0.16 $ 0.29 $ 0.31 $ 0.69 $ 0.49 basic (GAAP)Stock-based 0.35 0.11 0.12 0.58 0.28 compensationTariff ? ? (0.18 ) ? (0.18 )refundsAcquisitionrelated 0.01 0.02 ? 0.06 0.01 expenses andamortizationNon-cashinterest 0.09 0.09 0.04 0.24 0.11 expenseLoss onpartialsettlement of ? ? ? 0.42 ? convertiblenotesChange infair value of ? ? ? ? 0.35 derivativesNon-GAAPincome tax 0.01 0.04 0.04 (0.21 ) (0.12 )adjustmentNet incomeper share, $ 0.62 $ 0.55 $ 0.33 $ 1.78 $ 0.94 basic(Non-GAAP) Shares usedin basic pershare 134,721 135,094 126,109 133,719 125,084 calculationGAAP andNon-GAAP Net incomeper share, $ 0.15 $ 0.28 $ 0.28 $ 0.65 $ 0.44 diluted(GAAP)Stock-based 0.34 0.11 0.11 0.55 0.26 compensationTariff ? ? (0.17 ) ? (0.17 )refundsAcquisitionrelated 0.01 0.02 ? 0.06 0.01 expenses andamortizationNon-cashinterest 0.09 0.09 0.04 0.23 0.10 expenseLoss onpartialsettlement of ? ? ? 0.40 ? convertiblenotesChange infair value of ? ? ? ? $ 0.33 derivativesNon-GAAPincome tax 0.01 0.03 0.04 (0.21 ) (0.11 )adjustmentNet incomeper share,diluted $ 0.60 $ 0.53 $ 0.30 $ 1.68 $ 0.86 (Non-GAAP)(2) Shares usedin dilutedper share 141,220 141,533 141,820 143,091 140,207 calculationGAAPShares usedin dilutedper share 140,516 140,931 137,352 141,101 136,359 calculationNon-GAAP (3) Net cashprovided byoperating $ 113,354 $ 65,660 $ 67,501 $ 254,855 $ 132,154 activities(GAAP)Purchases ofproperty and (12,682 ) (16,428 ) (3,903 ) (39,050 ) (11,707 )equipmentDeemedrepayment ofconvertiblenotes due2024 and ? 6 ? 15,585 ? notes due2025attributableto accreteddebt discountFree cashflow $ 100,672 $ 49,238 $ 63,598 $ 231,390 $ 120,447 (Non-GAAP)

(2) Calculation of non-GAAP diluted net income per share for the three months ended September30, 2021, June30, 2021 and September30, 2020, as well as the nine months ended September 30, 2021 and 2020, excludes convertible notes due 2023 interest expense, net of tax of less than $0.1million in each period 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 46 thousand shares, 45 thousand shares and 4,468 thousand shares in the three months ended September30, 2021, June30, 2021 and September30, 2020, respectively, and 1,014 thousand and 3,849 thousand shares for the nine months ended September30, 2021, and 2020, 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 658 thousand shares and 557 thousand shares in the three months ended September30, 2021 and June30, 2021, respectively, and 976 thousand shares for the nine months ended September30, 2021, 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.