Enphase Energy (ENPH) 10-Q 3 Aug 16 2016 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Jul. 29, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	Enphase Energy, Inc.
Entity Central Index Key	1,463,101
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
Amendment Flag	false
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q2
Current Fiscal Year End	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		46,744,842

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Cash	$ 8,200
Current assets:
Cash and cash equivalents	8,243	$ 28,452
Accounts receivable, net of allowances of $2,773 and $1,808 at June 30, 2016 and December 31, 2015, respectively	48,973	46,099
Inventory	39,295	40,800
Prepaid expenses and other assets	7,925	6,417
Total current assets	104,436	121,768
Property and equipment, net	34,591	32,118
Goodwill	3,745	3,745
Intangibles, net	1,852	2,220
Other assets	7,885	5,677
Total assets	152,509	165,528
Current liabilities:
Accounts payable	37,610	25,569
Accrued liabilities	21,987	19,292
Deferred revenues, current	5,844	3,915
Warranty obligations, current (includes $3,201 and $2,601 measured at fair value at June 30, 2016 and December 31, 2015, respectively)	6,726	7,072
Borrowings under revolving credit facility	12,450	17,000
Total current liabilities	84,617	72,848
Long-term liabilities:
Deferred revenues, noncurrent	29,743	25,115
Warranty obligations, noncurrent (includes $4,852 and $3,581 measured at fair value at June 30, 2016 and December 31, 2015, respectively)	23,340	23,475
Other liabilities	2,352	2,641
Total liabilities	140,052	124,079
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.00001 par value, 10,000 shares authorized; none issued and outstanding	0	0
Common stock, $0.00001 par value, 100,000 shares authorized; 46,744 and 45,821 shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively	0	0
Additional paid-in capital	231,248	224,732
Accumulated deficit	(218,591)	(183,073)
Accumulated other comprehensive loss	(200)	(210)
Total stockholders’ equity	12,457	41,449
Total liabilities and stockholders’ equity	$ 152,509	$ 165,528

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Allowances, accounts receivable	$ 2,773	$ 1,808
Warranty obligations, current at fair value	3,201	2,601
Warranty obligations, non-current at fair value	$ 4,852	$ 3,581
Preferred stock, par value (in usd per share)	$ 0.00001	$ 0.00001
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in usd per share)	$ 0.00001	$ 0.00001
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	46,744,000	45,821,000
Common stock, shares outstanding (in shares)	46,744,000	45,821,000

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Income Statement [Abstract]
Net revenues	$ 79,185	$ 102,093	$ 143,306	$ 188,746
Cost of revenues	65,049	69,066	117,410	127,695
Gross profit	14,136	33,027	25,896	61,051
Operating expenses:
Research and development	13,091	12,786	26,157	26,216
Sales and marketing	9,987	12,508	20,202	24,445
General and administrative	6,846	8,102	14,413	16,307
Total operating expenses	29,924	33,396	60,772	66,968
Loss from operations	(15,788)	(369)	(34,876)	(5,917)
Other income (expense), net:
Interest expense	(212)	(87)	(364)	(165)
Other income (expense)	(379)	79	302	(448)
Total other expense, net	(591)	(8)	(62)	(613)
Loss before income taxes	(16,379)	(377)	(34,938)	(6,530)
Provision for income taxes	(344)	(226)	(580)	(393)
Net loss	$ (16,723)	$ (603)	$ (35,518)	$ (6,923)
Net loss per share, basic and diluted (in usd per share)	$ (0.36)	$ (0.01)	$ (0.77)	$ (0.16)
Shares used in computing net loss per share, basic and diluted	46,620	44,319	46,415	44,136

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Statement of Comprehensive Income [Abstract]
Net loss	$ (16,723)	$ (603)	$ (35,518)	$ (6,923)
Other comprehensive income (loss):
Foreign currency translation adjustments	204	1	10	(285)
Comprehensive loss	$ (16,519)	$ (602)	$ (35,508)	$ (7,208)

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash flows from operating activities:
Net loss	$ (35,518)	$ (6,923)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	5,388	5,054
Provision for doubtful accounts	1,331	99
Net loss on disposal of assets	28	275
Non-cash interest expense	56	80
Stock-based compensation	5,707	6,296
Revaluation of contingent consideration liability	0	(900)
Changes in operating assets and liabilities:
Accounts receivable	(4,205)	(22,295)
Inventory	1,505	(12,464)
Prepaid expenses and other assets	(3,697)	(4,077)
Accounts payable, accrued and other liabilities	15,338	6,712
Warranty obligations	(481)	(177)
Deferred revenues	6,557	5,049
Net cash used in operating activities	(7,991)	(23,271)
Cash flows from investing activities:
Purchases of property and equipment	(7,510)	(6,260)
Purchases of intangible assets	(678)	0
Net cash used in investing activities	(8,188)	(6,260)
Cash flows from financing activities:
Proceeds from borrowings under revolving credit facility	10,000	17,000
Payments under revolving credit facility	(14,550)	0
Payments for deferred financing costs	(130)	0
Contingent consideration payment related to prior acquisition	(29)	0
Proceeds from issuance of common stock under employee stock plans	809	2,744
Net cash (used in) provided by financing activities	(3,900)	19,744
Effect of exchange rate changes on cash	(130)	(358)
Net decrease in cash and cash equivalents	(20,209)	(10,145)
Cash and cash equivalents—Beginning of period	28,452	42,032
Cash and cash equivalents—End of period	8,243	31,887
Supplemental disclosures of non-cash investing and financing activities:
Purchases of fixed and intangible assets included in accounts payable	$ 938	$ 1,611

DESCRIPTION OF BUSINESS AND BAS

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION	6 Months Ended
	Jun. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION	DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Description of Business Enphase Energy, Inc. and subsidiaries (the “Company”) delivers simple, innovative and reliable energy management solutions that advance the worldwide potential of renewable energy. Our semiconductor-based microinverter system converts direct current (DC) electricity to alternating current (AC) electricity at the individual solar module level, and brings a system-based, high technology approach to solar energy generation leveraging our design expertise across power electronics, semiconductors, networking, and cloud-based software technologies. Since inception, the Company has shipped approximately 12 million microinverters representing over 3 gigawatts of solar PV generating capacity, and more than 500,000 Enphase residential and commercial systems have been deployed in over 100 countries. Basis of Presentation and Consolidation The accompanying condensed consolidated financial statements are presented in accordance with accounting principles generally accepted in the U.S, or GAAP. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in the consolidation. Unaudited Interim Financial Information These accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. In the opinion of management, these unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring items, considered necessary to present fairly the Company's financial condition, results of operations, comprehensive income (loss) and cash flows for the interim periods indicated. The results of operations for the three and six months ended June 30, 2016 are not necessarily indicative of the operating results for the full year. Certain information and footnote disclosures typically included in annual consolidated financial statements have been condensed or omitted. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 . There have been no material changes in the Company’s significant accounting policies during the six months ended June 30, 2016 , as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 . Reference is made to the disclosures therein for a summary of all of the Company’s significant accounting policies. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Significant estimates and assumptions reflected in the financial statements include revenue recognition, inventory valuation and accrued warranty obligations. These estimates are based on information available as of the date of the financial statements; therefore, actual results could differ materially from management’s estimates using different assumptions or under different conditions. Recently Issued Accounting Pronouncements Not Yet Effective In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers,” which will replace most existing revenue recognition guidance under U.S. GAAP. The updated standard’s core principle is that revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The standard generally requires an entity to identify performance obligations in its contracts, estimate the amount of variable consideration to be received in the transaction price, allocate the transaction price to each separate performance obligation, and recognize revenue as obligations are satisfied. In addition, the updated standard requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. In 2015, the FASB issued guidance to defer the effective date to fiscal years beginning after December 15, 2017 with early adoption for fiscal years beginning December 15, 2016. The guidance permits the use of either a retrospective or cumulative effect transition method. In March 2016, the FASB issued ASU 2016-08, “Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” which clarifies the guidance in ASU 2014-09 and has the same effective date as the original standard. During the three months ended June 30, 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing”; ASU 2016-11, “Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting”; and ASU 2016-12, “Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients.” These amendments are intended to improve and clarify the implementation guidance of ASU 2014-09 and have the same effective date as the original standard. The Company has not yet selected a transition method and is currently evaluating the impact of adoption on the consolidated financial statements. In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements—Going Concern.” The update provides U.S. GAAP guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and about related footnote disclosures. For each reporting period, management will be required to evaluate whether there are conditions or events that raise substantial doubt about a company’s ability to continue as a going concern within one year from the date the financial statements are issued. The amendments in this update are effective for the annual period ending after December 15, 2016 and for annual and interim periods thereafter. The Company is currently evaluating the impact of adoption on the consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory,” which requires most entities to measure most inventories at the lower of cost or net realizable value ("NRV"). This simplifies the evaluation from the current method of lower of cost or market, where market is based on one of three measures (i.e. replacement cost, net realizable value, or net realizable value less a normal profit margin). ASU 2015-11 does not apply to inventories measured under the last-in, first-out method or the retail inventory method, and defines NRV as the “estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.” ASU 2015-11 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted for any interim and annual financial statements that have not yet been issued. The Company is currently evaluating the impact of adoption on the consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities,” which amends certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Changes to the current guidance include the accounting for equity investments, the presentation and disclosure requirements for financial instruments, and the assessment of valuation allowance on deferred tax assets related to available-for-sale securities. In addition, ASU 2016-01 establishes an incremental recognition and disclosure requirement related to the presentation of fair value changes of financial liabilities for which the fair value option has been elected. Under this guidance, an entity would be required to separately present in other comprehensive income the portion of the total fair value change attributable to instrument-specific credit risk as opposed to reflecting the entire amount in earnings. ASU 2016-01 is effective for fiscal years and interim periods beginning after December 15, 2017, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. The Company is currently evaluating the impact of adoption on the consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting,” which will simplify the income tax consequences, accounting for forfeitures and classification on the Statements of Consolidated Cash Flows. ASU 2016-09 is effective for fiscal years and interim periods beginning after December 15, 2016, with early adoption permitted. The Company is currently evaluating the impact of adoption on the consolidated financial statements.

INVENTORY

INVENTORY	6 Months Ended
	Jun. 30, 2016
Inventory Disclosure [Abstract]
INVENTORY	INVENTORY Inventory as of June 30, 2016 and December 31, 2015 consists of the following (in thousands): June 30, December 31, Raw materials $ 2,100 $ 2,202 Finished goods 37,195 38,598 Total inventory $ 39,295 $ 40,800

WARRANTY OBLIGATIONS

WARRANTY OBLIGATIONS	6 Months Ended
	Jun. 30, 2016
Product Warranties Disclosures [Abstract]
WARRANTY OBLIGATIONS	WARRANTY OBLIGATIONS The Company’s warranty activities during the three and six months ended June 30, 2016 and 2015 were as follows (in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Warranty obligations, beginning of period $ 29,659 $ 34,163 $ 30,547 $ 33,940 Accruals for warranties issued during period 1,029 1,202 1,737 2,307 Changes in estimates 607 180 765 238 Settlements (2,237 ) (1,715 ) (3,956 ) (2,865 ) Increase due to accretion expense 434 210 818 371 Other 574 (277 ) 155 (228 ) Warranty obligations, end of period $ 30,066 $ 33,763 $ 30,066 $ 33,763 Less current portion $ (6,726 ) $ (7,251 ) Noncurrent $ 23,340 $ 26,512 As of June 30, 2016 , the $30.1 million in warranty obligations included $8.1 million measured at fair value (see Note 4, Fair Value Measurements ).

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	6 Months Ended
	Jun. 30, 2016
Fair Value Disclosures [Abstract]
FAIR VALUE MEASUREMENTS	FAIR VALUE MEASUREMENTS The accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An asset’s or liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value: • Level 1—Valuations based on quoted prices in active markets for identical assets or liabilities that the Company is able to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of such assets or liabilities do not entail a significant degree of judgment. • Level 2—Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. • Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement. The following table presents the Company’s assets and liabilities that were measured at fair value on a recurring basis and its categorization within the fair value hierarchy at June 30, 2016 and December 31, 2015 (in thousands): Fair Value June 30, December 31, Assets: Foreign currency forward contracts Level 2 $ 12 $ 86 Liabilities: Foreign currency forward contracts Level 2 $ 1 $ 9 Warranty obligations Level 3 8,053 6,182 Contingent consideration Level 3 444 473 Derivative Instruments The Company utilizes foreign currency forward contracts from time to time to reduce the impact of foreign currency fluctuations arising from both sales and purchases denominated in Euros and the British Pound Sterling. At June 30, 2016 and December 31, 2015 , the notional amounts of the Company’s foreign currency forward contracts outstanding were $0.7 million and $2.4 million , respectively. For the three and six months ended June 30, 2016 and 2015 , gains and losses from foreign currency forward contracts recorded in other income (expense), net were insignificant. Fair Value Option for Warranty Obligations Related to Microinverters Sold Since January 1, 2014 The Company’s warranty obligations related to microinverters sold since January 1, 2014 provide the Company the right, but not the requirement, to assign its warranty obligations to a third-party. Under Accounting Standards Codification (“ASC”) 825—Financial Instruments, (“fair value option”), an entity may choose to elect the fair value option for such warranties at the time it first recognizes the eligible item. The Company made an irrevocable election to account for all eligible warranty obligations associated with microinverters sold since January 1, 2014 at fair value. This election was made to reflect the underlying economics of the time value of money for an obligation that will be settled over an extended period of up to 25 years. The Company estimates the fair value of warranty obligations by calculating the warranty obligations in the same manner as for sales prior to January 1, 2014 and applying an expected present value technique to that result. The expected present value technique, an income approach, converts future amounts into a single current discounted amount. In addition to the key estimates of failure rates, claim rates and replacement costs, the Company used certain Level 3 inputs which are unobservable and significant to the overall fair value measurement. Such additional assumptions included a discount rate based on the Company’s credit-adjusted risk-free rate and compensation comprised of a profit element and risk premium required of a market participant to assume the obligation. The following table provides information regarding changes in nonfinancial liabilities related to the Company’s warranty obligations measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the periods indicated (in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Balance at beginning of period $ 6,489 $ 4,783 $ 6,182 $ 3,562 Accruals for warranties issued during period 1,018 1,136 1,713 2,183 Changes in estimates (280 ) — (479 ) — Settlements (182 ) (49 ) (336 ) (85 ) Increase due to accretion expense 434 210 818 371 Other 574 (277 ) 155 (228 ) Balance at end of period $ 8,053 $ 5,803 $ 8,053 $ 5,803 Contingent Consideration Liability The following table provides information regarding changes in financial liabilities related to the contingent consideration liability arising from a previous acquisition measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the periods indicated (in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Balance at beginning of period $ 473 $ 2,404 $ 473 $ 2,300 Revaluations — (1,004 ) — (900 ) Contingent consideration payment (29 ) — (29 ) — Balance at end of period $ 444 $ 1,400 $ 444 $ 1,400 Quantitative and Qualitative Information about Level 3 Fair Value Measurements As of June 30, 2016 , the significant unobservable inputs used in the fair value measurement of the Company’s liabilities designated as Level 3 are as follows: Item Measured at Fair Value Valuation Technique Description of Significant Unobservable Input Percent Used (Weighted-Average) Warranty obligations for microinverters sold since January 1, 2014 Discounted cash flows Profit element and risk premium 17% Credit-adjusted risk-free rate 23% Contingent consideration liability Probability-weighted discounted cash flows Risk-adjusted discount rate 17% As of December 31, 2015 , the significant unobservable inputs used in the fair value measurement of the Company’s liabilities designated as Level 3 are as follows: Item Measured at Fair Value Valuation Technique Description of Significant Unobservable Input Percent Used (Weighted-Average) Warranty obligations for microinverters sold since January 1, 2014 Discounted cash flows Profit element and risk premium 17% Credit-adjusted risk-free rate 25% Contingent consideration liability Probability-weighted discounted cash flows Risk-adjusted discount rate 17% Sensitivity of Level 3 Inputs Warranty Obligations Each of the significant unobservable inputs is independent of the other. The profit element and risk premium are estimated based on requirements of a third-party participant willing to assume the Company’s warranty obligations. The credit-adjusted risk free rate (“discount rate”) is determined by reference to the Company’s own credit standing at the fair value measurement date. Increasing or decreasing the profit element and risk premium input by 100 basis points would not have a material impact on the fair value measurement of the liability. Increasing the discount rate by 100 basis points would result in a $0.2 million reduction of the liability. Decreasing the discount rate by 100 basis points would result in a $0.2 million increase to the liability. Contingent Consideration Liability Changes in assumed probability adjustments with respect to achievement of target metrics can materially impact the fair value measurement of contingent consideration as of the acquisition date and for each subsequent period. Assumptions about the probability and amount of payout require less subjectivity over the course of the earnout period as management refines estimates based on actual events. Due to the short duration of the remaining earnout period, increasing or decreasing the risk-adjusted discount rate by 100 basis points would not have a material impact on the fair value measurement of the contingent consideration liability.

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS	6 Months Ended
	Jun. 30, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
GOODWILL AND INTANGIBLE ASSETS	GOODWILL AND INTANGIBLE ASSETS The following table presents the details of the Company’s goodwill and purchased intangible assets as of June 30, 2016 and December 31, 2015 (in thousands): June 30, 2016 December 31, 2015 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Goodwill $ 3,745 $ — $ 3,745 $ 3,745 $ — $ 3,745 Other indefinite-lived intangibles $ 286 $ — $ 286 $ 286 $ — $ 286 Intangible assets with finite lives: Customer relationships $ 900 $ (270 ) $ 630 $ 900 $ (180 ) $ 720 Patents and licensed technology 1,665 (729 ) 936 1,665 (451 ) 1,214 Total $ 2,565 $ (999 ) $ 1,566 $ 2,565 $ (631 ) $ 1,934 In July 2014, the Company purchased certain patents related to system interconnection and photovoltaic AC module construction. The patents are being amortized over their legal life of 3 years . The customer relationship intangible asset associated with a prior acquisition is being amortized on a straight-line basis over its estimated useful life of 5 years . In October 2015, the Company licensed certain technology related to ASIC development for a 3 year term, which is also its estimated useful life. For the six months ended June 30, 2016 , amortization expense related to intangible assets was $0.4 million . As of June 30, 2016 , estimated future amortization expense related to finite-lived intangible assets was as follows: Year (In thousands) 2016 (remaining 6 months) $ 367 2017 610 2018 409 2019 180 Total $ 1,566

DEBT

DEBT	6 Months Ended
	Jun. 30, 2016
Short-term Debt [Abstract]
DEBT	DEBT Revolving Credit Facility The Company maintains a $50.0 million revolving credit facility with Wells Fargo Bank, N.A. (“Wells Fargo”) that was entered into in November 2012, as first amended on February 14, 2014. On December 18, 2015, the Company entered into an amended and restated revolving credit agreement with Wells Fargo (the “Revolver”) which extended the maturity date to November 7, 2019 and added an uncommitted accordion feature that could increase the size of the facility by $25.0 million , subject to the satisfaction of certain conditions. Availability under the Revolver is subject to a borrowing base calculation that limits availability to a percentage of eligible domestic accounts receivable plus a percentage of the value of eligible domestic inventory, less certain reserves. Borrowings under the Revolver bear interest in cash at an annual rate equal to, at the Company’s option, either LIBOR or a “base rate” that is comprised of, among other things, the prime rate, plus a margin that is between 1.0% and 3.75% depending on the currency borrowed and the specific term of repayment. The Revolver requires the Company to pay an unused line fee between 0.25% and 0.375% based on the average daily unused portion of the revolving credit commitment. The Revolver is secured by a first-priority security interest on substantially all assets of the Company other than intellectual property and contains customary affirmative and negative covenants (including restrictions on the Company’s ability to make dividend payments) and events of default. In addition, the Revolver requires the Company to maintain at least $15.0 million of liquidity at all times, consisting of cash on hand and undrawn availability under the Revolver (defined as borrowing base less outstanding borrowings under the Revolver) of at least $5.0 million . The Company was in compliance with such covenants as of June 30, 2016 . As of June 30, 2016 , outstanding borrowings under the Revolver were $12.5 million . Based upon its eligible borrowing base, net of the restrictions concerning minimum liquidity requirement, the Company could ha ve borrowed an additional $10.0 million . The weighted-average interest rate related to the outstanding balance was 5.0% . In July 2016, the Company entered into an amendment to the Revolver with Wells Fargo. The amendment, among other things, allowed the Company to incur indebtedness related to the term loans described below and increased the amount of undrawn availability that must be maintained as part of the Revolver’s $15.0 million minimum liquidity covenant from $5.0 million to $12.5 million . Term Loan In July 2016, the Company entered into the Term Loan Agreement with lenders that are affiliates of Tennenbaum Capital Partners, LLC. Under the agreement, the lenders committed to advance term loans in an aggregate principal amount of up to $25.0 million with a maturity date of July 1, 2020. The Company borrowed the entire $25.0 million of term loan commitments on the loan closing date. Monthly payments due through June 30, 2017 are for interest only, followed by consecutive equal monthly payments of principal plus accrued interest beginning on July 1, 2017 and continuing through the maturity date. The term loan provides for an interest rate per annum equal to the higher of (i) 10.25% and (ii) LIBOR plus 9.5625% , subject to a 1.0% reduction if we achieve minimum levels of Revenue and EBITDA (each as defined in the Term Loan Agreement) for the twelve consecutive month period ending June 30, 2017 as set forth in the Term Loan Agreement. In addition, the Company paid a commitment fee of 3.3% of the loan amount upon closing and a closing fee of 10.0% of the loan amount is payable in four equal installments at each anniversary of the closing date. We may elect to prepay the loan by incurring a prepayment fee between 1% and 3% of the principal amount of the term loan depending on the timing and circumstances of prepayment. The term loan is secured by a second-priority security interest on substantially all our assets except intellectual property. The Term Loan Agreement does not contain any financial covenants, but is subject to customary affirmative and negative covenants including restrictions on creation of liens, dispositions of assets, dividends, mergers, or changing the nature of its business, in each case, subject to certain customary exceptions. In addition, the Term Loan Agreement contains certain customary events of default including, but are not limited to, failure to pay interest, principal and fees or other amounts when due, material breach of any representation or warranty, covenant defaults, cross defaults to other material indebtedness and events of bankruptcy.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Jun. 30, 2016
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES The Company is not currently involved in any material legal proceedings. The Company may become involved in various legal proceedings and claims that arise in the ordinary course of business. Such matters are subject to uncertainty and there can be no assurance that such legal proceedings will not have a material adverse effect on its business, results of operations, financial position or cash flows. The Company believes its cash on hand of $8.2 million as of June 30, 2016 and proceeds received in July 2016 from the $25.0 million term loan (see Note 6, Debt ), together with borrowings expected to be available under its Revolver, will be sufficient to fund its operations and satisfy its working capital needs, capital asset purchases, indebtedness payments and outstanding commitments for at least the next 12 months. If the Company is unable to meet its projected performance targets or manage its inventory levels to align with anticipated demand, its liquidity could be adversely impacted and it may need to seek additional sources of liquidity. If additional sources of liquidity are needed, the Company may consider new debt or equity offerings, but there is no assurance that such transactions could be consummated on acceptable terms or at all. Failure to raise sufficient capital when needed could have a material adverse effect on its business, results of operations and financial position.

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION	6 Months Ended
	Jun. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
STOCK-BASED COMPENSATION	STOCK-BASED COMPENSATION The Company has adopted certain equity incentive and stock purchase plans as described in the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 . Equity Awards Activity Stock Options The following is a summary of stock option activity for the six months ended June 30, 2016 (in thousands, except per share data): Number of Shares Outstanding Weighted- Average Exercise Price per Share Outstanding at December 31, 2015 8,173 $ 5.36 Granted 2,065 2.18 Exercised (348 ) 0.29 Canceled (489 ) 7.52 Outstanding at June 30, 2016 9,401 4.73 The intrinsic value of options exercised in the six months ended June 30, 2016 was $0.7 million . As of June 30, 2016 , the intrinsic value of options outstanding was $2.6 million based on the closing price of the Company’s stock as of June 30, 2016 . Restricted Stock Units The following is a summary of restricted stock unit activity for the six months ended June 30, 2016 (in thousands, except per share data): RSUs Weighted Average Outstanding at December 31, 2015 1,313 $ 9.31 Granted 4 2.14 Vested (243 ) 9.00 Canceled (128 ) 6.58 Outstanding at June 30, 2016 946 9.70 The total intrinsic value of restricted stock units that were vested in the six months ended June 30, 2016 was $0.5 million . As of June 30, 2016 , the intrinsic value of restricted stock units outstanding was $1.9 million based on the closing price of the Company’s stock as of June 30, 2016 . Stock-Based Compensation Expense Compensation cost for all stock-based awards expected to vest is measured at fair value on the date of grant and recognized ratably over the requisite service period. The following table summarizes the components of total stock-based compensation expense included in the condensed consolidated statements of operations for the periods presented (in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Cost of revenues $ 305 $ 318 $ 612 $ 582 Research and development 980 1,158 2,106 2,238 Sales and marketing 588 942 1,200 1,707 General and administrative 835 889 1,789 1,769 Total $ 2,708 $ 3,307 $ 5,707 $ 6,296 The following table summarizes the various types of stock-based compensation for the periods presented (in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Stock options and restricted stock units $ 2,236 $ 2,874 $ 4,720 $ 5,400 Employee stock purchase plan 472 433 987 896 Total $ 2,708 $ 3,307 $ 5,707 $ 6,296 The following table presents the weighted-average grant date fair value of options granted for the periods presented and the assumptions used to estimate those values using a Black-Scholes option pricing model: Three Months Ended Six Months Ended 2016 2015 2016 2015 Weighted average grant date fair value $ 1.49 $ 6.90 $ 1.32 $ 6.38 Expected term (in years) 4.1 4.4 4.5 4.5 Expected volatility 85.9 % 72.7 % 79.1 % 72.0 % Annual risk-free rate of return 1.1 % 1.3 % 1.2 % 1.3 % Dividend yield 0.0 % 0.0 % 0.0 % 0.0 % As of June 30, 2016 , there was approximately $14.8 million of total unrecognized compensation cost related to unvested equity awards expected to be recognized over a weighted-average period of 2.4 years.

INCOME TAXES

INCOME TAXES	6 Months Ended
	Jun. 30, 2016
Income Tax Disclosure [Abstract]
INCOME TAXES	INCOME TAXES The Company has used the discrete tax approach in calculating the tax expense for the three and six months ended June 30, 2016 and 2015 due to the fact that a relatively small change in the Company’s projected pre-tax net income (loss) could result in a volatile effective tax rate. Under the discrete method, the Company determines its tax (expense) benefit based upon actual results as if the interim period was an annual period. The tax provisions recorded were primarily related to income taxes attributable to its foreign operations. Under Accounting Standards Codification 740, “Income Taxes,” a provision for income taxes must be provided on the undistributed earnings of foreign subsidiaries unless such earnings are deemed to be permanently reinvested outside the United States. Prior to the second quarter of 2016, the Company did not provide for U.S. tax on foreign unremitted earnings because the Company considered such earnings to be permanently reinvested outside the U.S. During the second quarter of 2006, due to recent developments in its business, the Company determined that subsidiaries with cumulative earnings were not deemed to be permanently invested. Accordingly, during the quarter ended June 30, 2016, the Company recorded income tax expense of $0.1 million on cumulative foreign earnings of approximately $4.5 million that the Company determined no longer meet the criteria to be considered permanently invested.

NET LOSS PER SHARE

NET LOSS PER SHARE	6 Months Ended
	Jun. 30, 2016
Earnings Per Share [Abstract]
NET LOSS PER SHARE	NET LOSS PER SHARE The following table presents the computation of basic and diluted net loss per share for the periods presented (in thousands, except per share data): Three Months Ended Six Months Ended 2016 2015 2016 2015 Numerator: Net loss $ (16,723 ) $ (603 ) $ (35,518 ) $ (6,923 ) Denominator: Weighted average common shares outstanding 46,620 44,319 46,415 44,136 Net loss per share, basic and diluted $ (0.36 ) $ (0.01 ) $ (0.77 ) $ (0.16 ) As the Company incurred a net loss for all periods presented, potential dilutive securities from employee stock options, restricted stock units and warrants have been excluded from the diluted net loss per share computations because the effect of including such shares would have been anti-dilutive. The following table sets forth the potentially dilutive securities excluded from the computation of the diluted net loss per share (in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Employee stock options 9,285 8,738 8,723 8,683 Restricted stock units 979 1,640 1,071 1,537 Warrants to purchase common stock 99 111 105 111 Total 10,363 10,489 9,899 10,331

DESCRIPTION OF BUSINESS AND B17

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Policies)	6 Months Ended
	Jun. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation and Consolidation	Basis of Presentation and Consolidation The accompanying condensed consolidated financial statements are presented in accordance with accounting principles generally accepted in the U.S, or GAAP. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in the consolidation.
Unaudited Interim Financial Information	Unaudited Interim Financial Information These accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. In the opinion of management, these unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring items, considered necessary to present fairly the Company's financial condition, results of operations, comprehensive income (loss) and cash flows for the interim periods indicated. The results of operations for the three and six months ended June 30, 2016 are not necessarily indicative of the operating results for the full year. Certain information and footnote disclosures typically included in annual consolidated financial statements have been condensed or omitted. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 .
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Significant estimates and assumptions reflected in the financial statements include revenue recognition, inventory valuation and accrued warranty obligations. These estimates are based on information available as of the date of the financial statements; therefore, actual results could differ materially from management’s estimates using different assumptions or under different conditions.
Recently Issued Accounting Pronouncements Not Yet Effective	Recently Issued Accounting Pronouncements Not Yet Effective In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers,” which will replace most existing revenue recognition guidance under U.S. GAAP. The updated standard’s core principle is that revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The standard generally requires an entity to identify performance obligations in its contracts, estimate the amount of variable consideration to be received in the transaction price, allocate the transaction price to each separate performance obligation, and recognize revenue as obligations are satisfied. In addition, the updated standard requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. In 2015, the FASB issued guidance to defer the effective date to fiscal years beginning after December 15, 2017 with early adoption for fiscal years beginning December 15, 2016. The guidance permits the use of either a retrospective or cumulative effect transition method. In March 2016, the FASB issued ASU 2016-08, “Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” which clarifies the guidance in ASU 2014-09 and has the same effective date as the original standard. During the three months ended June 30, 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing”; ASU 2016-11, “Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting”; and ASU 2016-12, “Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients.” These amendments are intended to improve and clarify the implementation guidance of ASU 2014-09 and have the same effective date as the original standard. The Company has not yet selected a transition method and is currently evaluating the impact of adoption on the consolidated financial statements. In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements—Going Concern.” The update provides U.S. GAAP guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and about related footnote disclosures. For each reporting period, management will be required to evaluate whether there are conditions or events that raise substantial doubt about a company’s ability to continue as a going concern within one year from the date the financial statements are issued. The amendments in this update are effective for the annual period ending after December 15, 2016 and for annual and interim periods thereafter. The Company is currently evaluating the impact of adoption on the consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory,” which requires most entities to measure most inventories at the lower of cost or net realizable value ("NRV"). This simplifies the evaluation from the current method of lower of cost or market, where market is based on one of three measures (i.e. replacement cost, net realizable value, or net realizable value less a normal profit margin). ASU 2015-11 does not apply to inventories measured under the last-in, first-out method or the retail inventory method, and defines NRV as the “estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.” ASU 2015-11 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted for any interim and annual financial statements that have not yet been issued. The Company is currently evaluating the impact of adoption on the consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities,” which amends certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Changes to the current guidance include the accounting for equity investments, the presentation and disclosure requirements for financial instruments, and the assessment of valuation allowance on deferred tax assets related to available-for-sale securities. In addition, ASU 2016-01 establishes an incremental recognition and disclosure requirement related to the presentation of fair value changes of financial liabilities for which the fair value option has been elected. Under this guidance, an entity would be required to separately present in other comprehensive income the portion of the total fair value change attributable to instrument-specific credit risk as opposed to reflecting the entire amount in earnings. ASU 2016-01 is effective for fiscal years and interim periods beginning after December 15, 2017, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. The Company is currently evaluating the impact of adoption on the consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting,” which will simplify the income tax consequences, accounting for forfeitures and classification on the Statements of Consolidated Cash Flows. ASU 2016-09 is effective for fiscal years and interim periods beginning after December 15, 2016, with early adoption permitted. The Company is currently evaluating the impact of adoption on the consolidated financial statements.
Income Taxes	The Company has used the discrete tax approach in calculating the tax expense for the three and six months ended June 30, 2016 and 2015 due to the fact that a relatively small change in the Company’s projected pre-tax net income (loss) could result in a volatile effective tax rate. Under the discrete method, the Company determines its tax (expense) benefit based upon actual results as if the interim period was an annual period.

INVENTORY (Tables)

INVENTORY (Tables)	6 Months Ended
	Jun. 30, 2016
Inventory Disclosure [Abstract]
Summary of Inventory	Inventory as of June 30, 2016 and December 31, 2015 consists of the following (in thousands): June 30, December 31, Raw materials $ 2,100 $ 2,202 Finished goods 37,195 38,598 Total inventory $ 39,295 $ 40,800

WARRANTY OBLIGATIONS (Tables)

WARRANTY OBLIGATIONS (Tables)	6 Months Ended
	Jun. 30, 2016
Product Warranties Disclosures [Abstract]
Summary of Warranty Activities	The Company’s warranty activities during the three and six months ended June 30, 2016 and 2015 were as follows (in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Warranty obligations, beginning of period $ 29,659 $ 34,163 $ 30,547 $ 33,940 Accruals for warranties issued during period 1,029 1,202 1,737 2,307 Changes in estimates 607 180 765 238 Settlements (2,237 ) (1,715 ) (3,956 ) (2,865 ) Increase due to accretion expense 434 210 818 371 Other 574 (277 ) 155 (228 ) Warranty obligations, end of period $ 30,066 $ 33,763 $ 30,066 $ 33,763 Less current portion $ (6,726 ) $ (7,251 ) Noncurrent $ 23,340 $ 26,512

FAIR VALUE MEASUREMENTS (Tables

FAIR VALUE MEASUREMENTS (Tables)	6 Months Ended
	Jun. 30, 2016
Fair Value Disclosures [Abstract]
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis	The following table presents the Company’s assets and liabilities that were measured at fair value on a recurring basis and its categorization within the fair value hierarchy at June 30, 2016 and December 31, 2015 (in thousands): Fair Value June 30, December 31, Assets: Foreign currency forward contracts Level 2 $ 12 $ 86 Liabilities: Foreign currency forward contracts Level 2 $ 1 $ 9 Warranty obligations Level 3 8,053 6,182 Contingent consideration Level 3 444 473
Schedule of Changes in Nonfinancial Liabilities Related to Warrant Obligations Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs	The following table provides information regarding changes in nonfinancial liabilities related to the Company’s warranty obligations measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the periods indicated (in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Balance at beginning of period $ 6,489 $ 4,783 $ 6,182 $ 3,562 Accruals for warranties issued during period 1,018 1,136 1,713 2,183 Changes in estimates (280 ) — (479 ) — Settlements (182 ) (49 ) (336 ) (85 ) Increase due to accretion expense 434 210 818 371 Other 574 (277 ) 155 (228 ) Balance at end of period $ 8,053 $ 5,803 $ 8,053 $ 5,803
Summary of Changes in Financial Liabilities Related to Contingent Consideration Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs	The following table provides information regarding changes in financial liabilities related to the contingent consideration liability arising from a previous acquisition measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the periods indicated (in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Balance at beginning of period $ 473 $ 2,404 $ 473 $ 2,300 Revaluations — (1,004 ) — (900 ) Contingent consideration payment (29 ) — (29 ) — Balance at end of period $ 444 $ 1,400 $ 444 $ 1,400
Summary of Significant Unobservable Inputs used in the Fair Value Measurement of Liabilities Designated as Level 3	As of June 30, 2016 , the significant unobservable inputs used in the fair value measurement of the Company’s liabilities designated as Level 3 are as follows: Item Measured at Fair Value Valuation Technique Description of Significant Unobservable Input Percent Used (Weighted-Average) Warranty obligations for microinverters sold since January 1, 2014 Discounted cash flows Profit element and risk premium 17% Credit-adjusted risk-free rate 23% Contingent consideration liability Probability-weighted discounted cash flows Risk-adjusted discount rate 17% As of December 31, 2015 , the significant unobservable inputs used in the fair value measurement of the Company’s liabilities designated as Level 3 are as follows: Item Measured at Fair Value Valuation Technique Description of Significant Unobservable Input Percent Used (Weighted-Average) Warranty obligations for microinverters sold since January 1, 2014 Discounted cash flows Profit element and risk premium 17% Credit-adjusted risk-free rate 25% Contingent consideration liability Probability-weighted discounted cash flows Risk-adjusted discount rate 17%

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS (Tables)	6 Months Ended
	Jun. 30, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Goodwill and Intangible Assets	The following table presents the details of the Company’s goodwill and purchased intangible assets as of June 30, 2016 and December 31, 2015 (in thousands): June 30, 2016 December 31, 2015 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Goodwill $ 3,745 $ — $ 3,745 $ 3,745 $ — $ 3,745 Other indefinite-lived intangibles $ 286 $ — $ 286 $ 286 $ — $ 286 Intangible assets with finite lives: Customer relationships $ 900 $ (270 ) $ 630 $ 900 $ (180 ) $ 720 Patents and licensed technology 1,665 (729 ) 936 1,665 (451 ) 1,214 Total $ 2,565 $ (999 ) $ 1,566 $ 2,565 $ (631 ) $ 1,934
Schedule of Estimated Future Amortization Expense Related to Finite-Lived Intangible Assets	For the six months ended June 30, 2016 , amortization expense related to intangible assets was $0.4 million . As of June 30, 2016 , estimated future amortization expense related to finite-lived intangible assets was as follows: Year (In thousands) 2016 (remaining 6 months) $ 367 2017 610 2018 409 2019 180 Total $ 1,566

STOCK-BASED COMPENSATION (Table

STOCK-BASED COMPENSATION (Tables)	6 Months Ended
	Jun. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Summary of Stock Option Activity	The following is a summary of stock option activity for the six months ended June 30, 2016 (in thousands, except per share data): Number of Shares Outstanding Weighted- Average Exercise Price per Share Outstanding at December 31, 2015 8,173 $ 5.36 Granted 2,065 2.18 Exercised (348 ) 0.29 Canceled (489 ) 7.52 Outstanding at June 30, 2016 9,401 4.73
Summary of Restricted Stock Unit Activity	The following is a summary of restricted stock unit activity for the six months ended June 30, 2016 (in thousands, except per share data): RSUs Weighted Average Outstanding at December 31, 2015 1,313 $ 9.31 Granted 4 2.14 Vested (243 ) 9.00 Canceled (128 ) 6.58 Outstanding at June 30, 2016 946 9.70
Summary of the Components of Total Stock-Based Compensation Expense	The following table summarizes the components of total stock-based compensation expense included in the condensed consolidated statements of operations for the periods presented (in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Cost of revenues $ 305 $ 318 $ 612 $ 582 Research and development 980 1,158 2,106 2,238 Sales and marketing 588 942 1,200 1,707 General and administrative 835 889 1,789 1,769 Total $ 2,708 $ 3,307 $ 5,707 $ 6,296
Summary of Stock-Based Compensation Associated with Each Type of Award	The following table summarizes the various types of stock-based compensation for the periods presented (in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Stock options and restricted stock units $ 2,236 $ 2,874 $ 4,720 $ 5,400 Employee stock purchase plan 472 433 987 896 Total $ 2,708 $ 3,307 $ 5,707 $ 6,296
Summary of the Weighted-Average Grant Date Fair Value of Options Granted	The following table presents the weighted-average grant date fair value of options granted for the periods presented and the assumptions used to estimate those values using a Black-Scholes option pricing model: Three Months Ended Six Months Ended 2016 2015 2016 2015 Weighted average grant date fair value $ 1.49 $ 6.90 $ 1.32 $ 6.38 Expected term (in years) 4.1 4.4 4.5 4.5 Expected volatility 85.9 % 72.7 % 79.1 % 72.0 % Annual risk-free rate of return 1.1 % 1.3 % 1.2 % 1.3 % Dividend yield 0.0 % 0.0 % 0.0 % 0.0 %

NET LOSS PER SHARE (Tables)

NET LOSS PER SHARE (Tables)	6 Months Ended
	Jun. 30, 2016
Earnings Per Share [Abstract]
Schedule of Computation of Basic and Diluted Net Loss Per Share	The following table presents the computation of basic and diluted net loss per share for the periods presented (in thousands, except per share data): Three Months Ended Six Months Ended 2016 2015 2016 2015 Numerator: Net loss $ (16,723 ) $ (603 ) $ (35,518 ) $ (6,923 ) Denominator: Weighted average common shares outstanding 46,620 44,319 46,415 44,136 Net loss per share, basic and diluted $ (0.36 ) $ (0.01 ) $ (0.77 ) $ (0.16 )
Schedule of Potentially Dilutive Securities Excluded from the Computation of Diluted Net Loss Per Share	The following table sets forth the potentially dilutive securities excluded from the computation of the diluted net loss per share (in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Employee stock options 9,285 8,738 8,723 8,683 Restricted stock units 979 1,640 1,071 1,537 Warrants to purchase common stock 99 111 105 111 Total 10,363 10,489 9,899 10,331

DESCRIPTION OF BUSINESS AND B24

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details) system in Millions, microinverter in Millions, watt in Billions	Jun. 30, 2016systemcountrywattmicroinverter
Microinverter [Member]
Product Information [Line Items]
Number of product shipped | microinverter	12
Number of watts | watt	3
Residential And Commercial Systems [Member]
Product Information [Line Items]
Number of product deployed | system	0.5
Number of countries in which product is deployed | country	100

INVENTORY - Summary of Inventor

INVENTORY - Summary of Inventory (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Schedule of inventory
Raw materials	$ 2,100	$ 2,202
Finished goods	37,195	38,598
Total inventory	$ 39,295	$ 40,800

WARRANTY OBLIGATIONS - Summary

WARRANTY OBLIGATIONS - Summary of Warranty Activities (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Changes in the Company's product warranty liability
Warranty obligations, beginning of period	$ 29,659	$ 34,163	$ 30,547	$ 33,940
Accruals for warranties issued during period	1,029	1,202	1,737	2,307
Changes in estimates	607	180	765	238
Settlements	(2,237)	(1,715)	(3,956)	(2,865)
Increase due to accretion expense	434	210	818	371
Other	574	(277)	155	(228)
Warranty obligations, end of period	30,066	33,763	30,066	33,763
Less current portion	(6,726)	(7,251)	(6,726)	(7,251)	$ (7,072)
Noncurrent	$ 23,340	$ 26,512	$ 23,340	$ 26,512	$ 23,475

WARRANTY OBLIGATIONS - Narrativ

WARRANTY OBLIGATIONS - Narrative (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014
Product Warranty Liability [Line Items]
Warranty obligations, end of period	$ 30,066	$ 29,659	$ 30,547	$ 33,763	$ 34,163	$ 33,940
Recurring | Warranty obligations for microinverters sold since January 1, 2014 | Level 3
Product Warranty Liability [Line Items]
Fair value liabilities	$ 8,053	$ 6,489	$ 6,182	$ 5,803	$ 4,783	$ 3,562

FAIR VALUE MEASUREMENTS - Sched

FAIR VALUE MEASUREMENTS - Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Recurring - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014
Level 2
Assets:
Foreign currency forward contracts	$ 12		$ 86
Liabilities:
Foreign currency forward contracts	1		9
Level 3 | Warranty obligations
Liabilities:
Fair value liabilities	8,053	$ 6,489	6,182	$ 5,803	$ 4,783	$ 3,562
Level 3 | Contingent consideration
Liabilities:
Fair value liabilities	$ 444		$ 473

FAIR VALUE MEASUREMENTS - Narra

FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Discounted cash flows | Recurring | Level 3 | Contingent consideration
Derivative [Line Items]
Decrease to fair value measurement as a result of 100 basis point increase	$ 0.2
Increase to fair value measurement as a result of 100 basis point decrease	0.2
Not designated as hedging instrument | Foreign exchange forward
Derivative [Line Items]
Notional amount of foreign currency	$ 0.7	$ 2.4

FAIR VALUE MEASUREMENTS - Sch30

FAIR VALUE MEASUREMENTS - Schedule of Changes in Nonfinancial Liabilities Related to Warrant Obligations Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Details) - Level 3 - Recurring - Warranty obligations - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at beginning of period	$ 6,489	$ 4,783	$ 6,182	$ 3,562
Accruals for warranties issued during period	1,018	1,136	1,713	2,183
Changes in estimates	(280)	0	(479)	0
Settlements	(182)	(49)	(336)	(85)
Increase due to accretion expense	434	210	818	371
Other	574	(277)	155	(228)
Balance at end of period	$ 8,053	$ 5,803	$ 8,053	$ 5,803

FAIR VALUE MEASUREMENTS - Summa

FAIR VALUE MEASUREMENTS - Summary of Changes in Financial Liabilities Related to Contingent Consideration Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Details) - Next Phase Solar, Inc. - Contingent consideration - Recurring - Level 3 - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at beginning of period	$ 473	$ 2,404	$ 473	$ 2,300
Revaluations	0	(1,004)	0	(900)
Contingent consideration payment	(29)	0	(29)	0
Balance at end of period	$ 444	$ 1,400	$ 444	$ 1,400

FAIR VALUE MEASUREMENTS - Sum32

FAIR VALUE MEASUREMENTS - Summary of Significant Unobservable Inputs used in the Fair Value Measurement of Liabilities Designated as Level 3 (Details) - Discounted cash flows - Recurring - Level 3	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Warranty obligations for microinverters sold since January 1, 2014
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Profit element and risk premium	17.00%	17.00%
Credit-adjusted risk-free rate	23.00%	25.00%
Contingent consideration liability
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Risk-adjusted discount rate	17.00%	17.00%

GOODWILL AND INTANGIBLE ASSET33

GOODWILL AND INTANGIBLE ASSETS - Schedule of Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Goodwill, gross	$ 3,745	$ 3,745
Goodwill	3,745	3,745
Other indefinite-lived intangibles	286	286
Intangible assets with finite lives:
Intangibles assets with finite lives, gross	2,565	2,565
Intangibles assets with finite lives, accumulated amortization	(999)	(631)
Total	1,566	1,934
Customer relationships
Intangible assets with finite lives:
Intangibles assets with finite lives, gross	900	900
Intangibles assets with finite lives, accumulated amortization	(270)	(180)
Total	630	720
Patents and licensed technology
Intangible assets with finite lives:
Intangibles assets with finite lives, gross	1,665	1,665
Intangibles assets with finite lives, accumulated amortization	(729)	(451)
Total	$ 936	$ 1,214

GOODWILL AND INTANGIBLE ASSET34

GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Millions	1 Months Ended			6 Months Ended
	Oct. 31, 2015	Dec. 31, 2014	Jul. 31, 2014	Jun. 30, 2016
Finite-Lived Intangible Assets [Line Items]
Amortization expense related to intangible assets				$ 0.4
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Useful life		5 years
Patents and licensed technology
Finite-Lived Intangible Assets [Line Items]
Useful life			3 years
ASIC development
Finite-Lived Intangible Assets [Line Items]
Useful life	3 years

GOODWILL AND INTANGIBLE ASSET35

GOODWILL AND INTANGIBLE ASSETS - Schedule of Estimated Future Amortization Expense Related to Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
2016 (remaining 6 months)	$ 367
2,017	610
2,018	409
2,019	180
Total	$ 1,566	$ 1,934

DEBT - Narrative (Details)

DEBT - Narrative (Details) - USD ($)	3 Months Ended
	Jun. 30, 2016	Jul. 31, 2016	Dec. 31, 2015	Dec. 18, 2015
Short-term Debt [Line Items]
Outstanding borrowings	$ 12,450,000		$ 17,000,000
Line of Credit | Wells Fargo Bank | Revolving credit facility
Short-term Debt [Line Items]
Credit line facility	50,000,000
Credit line facility, accordion feature				$ 25,000,000
Amount of liquidity required for debt compliance	15,000,000
Amount of undrawn credit for debt compliance	5,000,000
Outstanding borrowings	12,500,000
Remaining borrowing capacity	$ 10,000,000
Weighted average interest rate	5.00%
Line of Credit | Wells Fargo Bank | Revolving credit facility | Amendment To Revolver
Short-term Debt [Line Items]
Amount of liquidity required for debt compliance	$ 15,000,000
Amount of undrawn credit for debt compliance	$ 5,000,000
Line of Credit | Wells Fargo Bank | Revolving credit facility | Amendment To Revolver | Subsequent event
Short-term Debt [Line Items]
Amount of undrawn credit for debt compliance		$ 12,500,000
Line of Credit | Wells Fargo Bank | Revolving credit facility | LIBOR | Minimum
Short-term Debt [Line Items]
Basis spread on variable rate	1.00%
Unused capacity, commitment fee percentage	0.25%
Line of Credit | Wells Fargo Bank | Revolving credit facility | LIBOR | Maximum
Short-term Debt [Line Items]
Basis spread on variable rate	3.75%
Unused capacity, commitment fee percentage	0.375%

DEBT - Term Loan (Details)

DEBT - Term Loan (Details) - Subsequent event - Tennenbaum Capital Partners, LLC	1 Months Ended
	Jul. 31, 2016USD ($)
Line of Credit Facility [Line Items]
Interest rate during period	10.25%
Commitment fee percentage	3.30%
Closing fee (as a percent)	10.00%
Secured debt
Line of Credit Facility [Line Items]
Credit line facility	$ 25,000,000
Amount borrowed	$ 25,000,000
LIBOR
Line of Credit Facility [Line Items]
Interest rate during period	9.5625%
Reduction of interest rate during period (as a percent)	1.00%
Minimum
Line of Credit Facility [Line Items]
Prepayment fee (as a percent)	1.00%
Maximum
Line of Credit Facility [Line Items]
Prepayment fee (as a percent)	3.00%

COMMITMENTS AND CONTINGENCIES -

COMMITMENTS AND CONTINGENCIES - (Details) - USD ($) $ in Millions	Jul. 31, 2016	Jun. 30, 2016
Commitments and Contingencies Disclosure [Abstract]
Cash on hand		$ 8.2
Secured debt | Subsequent event | Tennenbaum Capital Partners, LLC
Long-term Purchase Commitment [Line Items]
Amount borrowed	$ 25

STOCK-BASED COMPENSATION - Summ

STOCK-BASED COMPENSATION - Summary of Stock Option Activity (Details) shares in Thousands	6 Months Ended
	Jun. 30, 2016$ / sharesshares
Number of Shares Outstanding
Outstanding, beginning balance (in shares) | shares	8,173
Granted (in shares) | shares	2,065
Exercised (in shares) | shares	(348)
Canceled (in shares) | shares	(489)
Outstanding, ending balance (in shares) | shares	9,401
Weighted- Average Exercise Price per Share
Outstanding, beginning balance (in usd per share) | $ / shares	$ 5.36
Granted (in usd per share) | $ / shares	2.18
Exercised (in usd per share) | $ / shares	0.29
Canceled (in usd per share) | $ / shares	7.52
Outstanding, ending balance (in usd per share) | $ / shares	$ 4.73

STOCK-BASED COMPENSATION - Narr

STOCK-BASED COMPENSATION - Narrative (Details) $ in Millions	6 Months Ended
	Jun. 30, 2016USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Intrinsic value of options exercised during period	$ 0.7
Intrinsic value of options outstanding	2.6
Total unrecognized compensation cost	$ 14.8
Weighted-average recognition period for unrecognized compensation cost	2 years 4 months 21 days
Restricted stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of stock vested during period	$ 0.5
Intrinsic value of restricted stock units outstanding	$ 1.9

STOCK-BASED COMPENSATION - Su41

STOCK-BASED COMPENSATION - Summary of Restricted Stock Unit Activity (Details) - Restricted stock units shares in Thousands	6 Months Ended
	Jun. 30, 2016$ / sharesshares
RSUs
Outstanding, beginning balance (in shares) | shares	1,313
Granted (in shares) | shares	4
Vested (in shares) | shares	(243)
Canceled (in shares) | shares	(128)
Outstanding, ending balance (in shares) | shares	946
Weighted Average Fair Value per Share at Grant Date
Outstanding, beginning balance (in usd per share) | $ / shares	$ 9.31
Granted (in usd per share) | $ / shares	2.14
Vested (in usd per share) | $ / shares	9
Canceled (in usd per share) | $ / shares	6.58
Outstanding, ending balance (in usd per share) | $ / shares	$ 9.70

STOCK-BASED COMPENSATION - Su42

STOCK-BASED COMPENSATION - Summary of the Components of Total Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Allocation of Stock-based Compensation Expense Included in the Consolidated Statement of Operations [Abstract]
Total stock-based compensation expense	$ 2,708	$ 3,307	$ 5,707	$ 6,296
Cost of revenues
Allocation of Stock-based Compensation Expense Included in the Consolidated Statement of Operations [Abstract]
Total stock-based compensation expense	305	318	612	582
Research and development
Allocation of Stock-based Compensation Expense Included in the Consolidated Statement of Operations [Abstract]
Total stock-based compensation expense	980	1,158	2,106	2,238
Sales and marketing
Allocation of Stock-based Compensation Expense Included in the Consolidated Statement of Operations [Abstract]
Total stock-based compensation expense	588	942	1,200	1,707
General and administrative
Allocation of Stock-based Compensation Expense Included in the Consolidated Statement of Operations [Abstract]
Total stock-based compensation expense	$ 835	$ 889	$ 1,789	$ 1,769

STOCK-BASED COMPENSATION - Su43

STOCK-BASED COMPENSATION - Summary of Stock-Based Compensation Associated with Each Type of Award (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	$ 2,708	$ 3,307	$ 5,707	$ 6,296
Stock options and restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	2,236	2,874	4,720	5,400
Employee stock purchase plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	$ 472	$ 433	$ 987	$ 896

STOCK-BASED COMPENSATION - Su44

STOCK-BASED COMPENSATION - Summary of the Weighted-Average Grant Date Fair Value of Options Granted (Details) - Stock options - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
The fair value of each option granted during the periods
Weighted average grant date fair value (in usd per share)	$ 1.49	$ 6.90	$ 1.32	$ 6.38
Expected term (in years)	4 years 26 days	4 years 5 months 10 days	4 years 6 months	4 years 6 months
Expected volatility	85.90%	72.70%	79.10%	72.00%
Annual risk-free rate of return	1.10%	1.30%	1.20%	1.30%
Dividend yield	0.00%	0.00%	0.00%	0.00%

INCOME TAXES - Narrative (Detai

INCOME TAXES - Narrative (Details) $ in Millions	6 Months Ended
	Jun. 30, 2016USD ($)
Income Tax Disclosure [Abstract]
Deferred tax liabilities, undistributed foreign earnings	$ 0.1
Income (loss) from continuing operations before income taxes, foreign	$ 4.5

NET LOSS PER SHARE - Schedule o

NET LOSS PER SHARE - Schedule of Computation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Numerator:
Net loss	$ (16,723)	$ (603)	$ (35,518)	$ (6,923)
Denominator:
Shares used in computing net loss per share, basic and diluted	46,620	44,319	46,415	44,136
Net loss per share, basic and diluted (in usd per share)	$ (0.36)	$ (0.01)	$ (0.77)	$ (0.16)

NET LOSS PER SHARE - Schedule47

NET LOSS PER SHARE - Schedule of Potentially Dilutive Securities Excluded from the Computation of Diluted Net Loss Per Share (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
The potential common shares outstanding that were excluded from the computation of diluted net loss per share attributable to common stockholders
Total (in shares)	10,363	10,489	9,899	10,331
Employee stock options
The potential common shares outstanding that were excluded from the computation of diluted net loss per share attributable to common stockholders
Total (in shares)	9,285	8,738	8,723	8,683
Restricted stock units
The potential common shares outstanding that were excluded from the computation of diluted net loss per share attributable to common stockholders
Total (in shares)	979	1,640	1,071	1,537
Warrants to purchase common stock
The potential common shares outstanding that were excluded from the computation of diluted net loss per share attributable to common stockholders
Total (in shares)	99	111	105	111