COVER PAGE
COVER PAGE - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 20, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-35480 | |
Entity Registrant Name | Enphase Energy, Inc. | |
Entity Incorporation, State | DE | |
Entity Tax Identification Number | 20-4645388 | |
Entity Address, Address Line One | 47281 Bayside Parkway | |
Entity Address, City or Town | Fremont | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94538 | |
City Area Code | 877 | |
Local Phone Number | 774-7000 | |
Title of 12(b) Security | Common Stock, $0.00001 par value per share | |
Trading Symbol | ENPH | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 126,332,567 | |
Entity Central Index Key | 0001463101 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End | --12-31 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 661,792 | $ 251,409 |
Restricted cash | 0 | 44,700 |
Accounts receivable, net of allowances of $348 and $564 at September 30, 2020 and December 31, 2019, respectively | 122,386 | 145,413 |
Inventory | 37,535 | 32,056 |
Prepaid expenses and other assets | 28,521 | 26,079 |
Total current assets | 850,234 | 499,657 |
Property and equipment, net | 35,187 | 28,936 |
Operating lease, right of use asset, net | 14,487 | 10,117 |
Intangible assets, net | 26,839 | 30,579 |
Goodwill | 24,783 | 24,783 |
Other assets | 51,998 | 44,620 |
Deferred tax assets, net | 88,812 | 74,531 |
Total assets | 1,092,340 | 713,223 |
Current liabilities: | ||
Accounts payable | 48,148 | 57,474 |
Accrued liabilities | 52,203 | 47,092 |
Deferred revenues, current | 41,738 | 81,783 |
Warranty obligations, current (includes $7,560 and $6,794 measured at fair value at September 30, 2020 and December 31, 2019, respectively) | 10,760 | 10,078 |
Debt, current | 103,670 | 2,884 |
Total current liabilities | 256,519 | 199,311 |
Long-term liabilities: | ||
Deferred revenues, noncurrent | 115,757 | 100,204 |
Warranty obligations, noncurrent (includes $18,188 and $13,012 measured at fair value at September 30, 2020 and December 31, 2019, respectively) | 33,019 | 27,020 |
Other liabilities | 14,387 | 11,817 |
Debt, noncurrent | 256,452 | 102,659 |
Total liabilities | 676,134 | 441,011 |
Commitments and contingencies (Note 9) | ||
Stockholders’ equity: | ||
Common stock, $0.00001 par value, 200,000 shares and 150,000 shares authorized; and 126,270 shares and 123,109 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively | 1 | 1 |
Additional paid-in capital | 540,738 | 458,315 |
Accumulated deficit | (124,177) | (185,181) |
Accumulated other comprehensive loss | (356) | (923) |
Total stockholders’ equity | 416,206 | 272,212 |
Total liabilities and stockholders’ equity | $ 1,092,340 | $ 713,223 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowances, accounts receivable | $ 348 | $ 564 |
Warranty obligations, current at fair value | 7,560 | 6,794 |
Warranty obligations, non-current at fair value | $ 18,188 | $ 13,012 |
Common stock, par value (in usd per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 200,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 126,270,000 | 123,109,000 |
Common stock, shares outstanding (in shares) | 126,270,000 | 123,109,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Net revenues | $ 178,503 | $ 180,057 | $ 509,586 | $ 414,301 |
Cost of revenues | 83,522 | 115,351 | 285,543 | 270,937 |
Gross profit | 94,981 | 64,706 | 224,043 | 143,364 |
Operating expenses: | ||||
Research and development | 15,052 | 11,085 | 40,120 | 29,213 |
Sales and marketing | 14,645 | 9,551 | 38,788 | 26,038 |
General and administrative | 13,525 | 9,895 | 37,810 | 28,358 |
Restructuring charges | 0 | 469 | 0 | 1,468 |
Total operating expenses | 43,222 | 31,000 | 116,718 | 85,077 |
Income from operations | 51,759 | 33,706 | 107,325 | 58,287 |
Other expense, net | ||||
Interest income | 110 | 894 | 1,483 | 1,698 |
Interest expense | (5,993) | (2,286) | (15,100) | (7,388) |
Other expense, net | (1,031) | (943) | (1,302) | (6,904) |
Change in fair value of derivatives | 0 | 0 | (44,348) | 0 |
Total other expense, net | (6,914) | (2,335) | (59,267) | (12,594) |
Income before income taxes | 44,845 | 31,371 | 48,058 | 45,693 |
Income tax benefit (provision) | (5,483) | (272) | 12,946 | (1,211) |
Net income | $ 39,362 | $ 31,099 | $ 61,004 | $ 44,482 |
Net income per share: | ||||
Basic (in USD per share) | $ 0.31 | $ 0.25 | $ 0.49 | $ 0.39 |
Diluted (in USD per share) | $ 0.28 | $ 0.23 | $ 0.44 | $ 0.35 |
Shares used in per share calculation: | ||||
Basic (in shares) | 126,109 | 122,123 | 125,084 | 114,720 |
Diluted (in shares) | 141,820 | 133,611 | 140,207 | 131,114 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 39,362 | $ 31,099 | $ 61,004 | $ 44,482 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | 797 | 155 | 567 | (173) |
Comprehensive income | $ 40,159 | $ 31,254 | $ 61,571 | $ 44,309 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY - USD ($) $ in Thousands | Total | Common Stock and Additional Paid-In Capital | Accumulated deficit | Accumulated Other Comprehensive Income (Loss) | Cumulative Effect, Period of Adoption, AdjustmentCommon Stock and Additional Paid-In Capital | [1] | Cumulative Effect, Period of Adoption, AdjustmentAccumulated deficit | [1] |
Balance, beginning of period at Dec. 31, 2018 | $ 353,336 | $ (346,302) | $ 742 | $ 27 | $ (27) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock from exercise of equity awards | 2,925 | |||||||
Payment of withholding taxes related to net share settlement of equity awards | (4,438) | |||||||
Conversion of convertible notes due 2023, net | 58,857 | |||||||
Equity component of convertible notes | 35,114 | |||||||
Cost of convertible notes hedge related to the convertible notes | (36,313) | |||||||
Sale of warrants related to the convertible notes | 29,818 | |||||||
Stock-based compensation expense and other | 14,241 | |||||||
Net income | $ 44,482 | 44,482 | ||||||
Foreign currency translation adjustments | (173) | (173) | ||||||
Balance, end of period at Sep. 30, 2019 | $ 152,289 | 453,567 | (301,847) | 569 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201807Member | |||||||
Balance, beginning of period at Jun. 30, 2019 | 449,803 | (332,946) | 414 | 0 | 0 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock from exercise of equity awards | 303 | |||||||
Payment of withholding taxes related to net share settlement of equity awards | (2,348) | |||||||
Conversion of convertible notes due 2023, net | 0 | |||||||
Equity component of convertible notes | 25 | |||||||
Cost of convertible notes hedge related to the convertible notes | 0 | |||||||
Sale of warrants related to the convertible notes | 0 | |||||||
Stock-based compensation expense and other | 5,784 | |||||||
Net income | $ 31,099 | 31,099 | ||||||
Foreign currency translation adjustments | 155 | 155 | ||||||
Balance, end of period at Sep. 30, 2019 | $ 152,289 | 453,567 | (301,847) | 569 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201807Member | |||||||
Balance, beginning of period at Dec. 31, 2019 | $ 272,212 | 458,316 | (185,181) | (923) | 0 | 0 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock from exercise of equity awards | 4,708 | |||||||
Payment of withholding taxes related to net share settlement of equity awards | (52,042) | |||||||
Conversion of convertible notes due 2023, net | 0 | |||||||
Equity component of convertible notes | 116,300 | |||||||
Cost of convertible notes hedge related to the convertible notes | (117,108) | |||||||
Sale of warrants related to the convertible notes | 96,351 | |||||||
Stock-based compensation expense and other | 34,214 | |||||||
Net income | 61,004 | 61,004 | ||||||
Foreign currency translation adjustments | 567 | 567 | ||||||
Balance, end of period at Sep. 30, 2020 | $ 416,206 | 540,739 | (124,177) | (356) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201807Member | |||||||
Balance, beginning of period at Jun. 30, 2020 | 534,868 | (163,539) | (1,153) | $ 0 | $ 0 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock from exercise of equity awards | 541 | |||||||
Payment of withholding taxes related to net share settlement of equity awards | (9,069) | |||||||
Conversion of convertible notes due 2023, net | 0 | |||||||
Equity component of convertible notes | 0 | |||||||
Cost of convertible notes hedge related to the convertible notes | 0 | |||||||
Sale of warrants related to the convertible notes | 0 | |||||||
Stock-based compensation expense and other | 14,399 | |||||||
Net income | $ 39,362 | 39,362 | ||||||
Foreign currency translation adjustments | 797 | 797 | ||||||
Balance, end of period at Sep. 30, 2020 | $ 416,206 | $ 540,739 | $ (124,177) | $ (356) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201807Member | |||||||
[1] | Includes the adoption of Accounting Standards Update (“ASU”) 2018-07, “Compensation - Stock Compensation: Improvements to Non-employee Share-Based Payment Accounting” on January 1, 2019 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 61,004 | $ 44,482 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 12,750 | 11,551 |
Provision for doubtful accounts | 254 | 408 |
Non-cash interest expense | 13,516 | 4,173 |
Financing fees on extinguishment of debt | 0 | 2,152 |
Fees paid for repurchase and exchange of convertible notes due 2023 | 0 | 6,000 |
Stock-based compensation | 34,214 | 14,000 |
Change in fair value of derivatives | 44,348 | 0 |
Deferred income taxes | (14,507) | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 23,533 | (56,139) |
Inventory | (5,479) | (13,964) |
Prepaid expenses and other assets | (10,451) | (8,634) |
Accounts payable, accrued and other liabilities | (9,200) | 18,656 |
Warranty obligations | 6,681 | 3,330 |
Deferred revenues | (24,509) | 10,781 |
Net cash provided by operating activities | 132,154 | 36,796 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (11,707) | (7,368) |
Net cash used in investing activities | (11,707) | (7,368) |
Cash flows from financing activities: | ||
Issuance of convertible notes, net of issuance costs | 312,420 | 127,481 |
Purchase of convertible note hedges | (89,056) | (36,313) |
Sale of warrants | 71,552 | 29,819 |
Fees paid for repurchase and exchange of convertible notes due 2023 | 0 | (6,000) |
Principal payments and financing fees on debt | (2,269) | (45,658) |
Proceeds from exercise of equity awards and employee stock purchase plan | 4,708 | 2,925 |
Payment of withholding taxes related to net share settlement of equity awards | (52,042) | (4,438) |
Net cash provided by financing activities | 245,313 | 67,816 |
Effect of exchange rate changes on cash and cash equivalents | (77) | (435) |
Net increase in cash and cash equivalents | 365,683 | 96,809 |
Cash, cash equivalents and restricted cash—Beginning of period | 296,109 | 106,237 |
Cash and cash equivalents—End of period | 661,792 | 203,046 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Purchases of fixed assets included in accounts payable | 2,132 | 926 |
Accrued interest payable unpaid upon exchange of convertible notes due 2023 | $ 0 | $ 833 |
DESCRIPTION OF BUSINESS AND BAS
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2020 | |
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. (the “Company”) is a global energy technology company . The Company delivers smart, easy-to-use solutions that manage solar generation, storage and communication on one intelligent platform. The Company revolutionized the solar industry with its microinverter technology and produces a fully integrated solar-plus-storage solution . Basis of Presentation and Consolidation The accompanying condensed consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States (“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 consolidation. Unaudited Interim Financial Information These accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of 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 , stockholders’ equity and cash flows for the interim periods indicated. The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the operating results for the full year. 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, allowance for doubtful accounts, stock-based compensation, inventory valuation, accrued warranty obligations, fair value of debt derivatives, fair value of acquired intangible assets and goodwill, useful lives of acquired intangible assets and property and equipment, incremental borrowing rate for right-of-use assets and lease liability, probable loss recovery of tariff refunds, legal contingencies, and tax valuation allowance. 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. The worldwide spread of the COVID-19 virus has resulted in a global slowdown of economic activity which decreased demand for a broad variety of goods and services, including from our customers, while also disrupting sales channels and marketing activities for an unknown period of time and may continue to create significant uncertainty in future operational and financial performance. The Company expects this to have negative impact on its sales and its results of operations. In preparing the Company’s condensed consolidated financial statements in accordance with GAAP, the Company is required to make estimates, assumptions and judgments that affect the amounts reported in its financial statements and the accompanying disclosures. Estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require the exercise of judgment. As of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates, judgments or revise the carrying value of its assets or liabilities. These estimates may change, as new events occur and additional information is obtained, and are recognized in the condensed consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to the Company’s financial statements. Summary of Significant Accounting Policies There have been no significant changes to the Company’s significant accounting policies in Note 2. “Summary of Significant Accounting Policies,” of the notes to consolidated financial statements included in Item 8 of the Company’s 2019 Annual Report on Form 10-K other than the inclusion of the commitments and contingencies policies below. Commitments and Contingencies In the normal course of business, the Company is subject to loss contingencies and loss recoveries, such as legal proceedings and claims arising out of its business as well as tariff refunds. An accrual for a loss contingency or loss recovery is recognized when it is probable and the amount of loss or recovery can be reasonably estimated. See Note 9. “Commitments and Contingencies” below for additional information. Recently Issued Accounting Pronouncements Not Yet Effective In August 2020, the FASB issued Account Standard Update (“ASU”) 2020-06, “Debt - Debt with Conversion and Other Options (subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (subtopic 815-40),” which reduces the number of accounting models in ASC 470-20 that require separate accounting for embedded conversion features. As a result, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost as long as no other features require bifurcation and recognition as derivatives. By removing those separation models, the effective interest rate of convertible debt instruments will be closer to the coupon interest rate. Further, the diluted net income per share calculation for convertible instruments will require the Company to use the if-converted method. The treasury stock method should no longer be used to calculate diluted net income per share for convertible instruments. The amendment will be effective for the Company beginning after December 15, 2021 and early adoption is permitted. The Company is evaluating the accounting, transition and disclosure requirements of the standard. Recently Adopted Accounting Pronouncements In August 2018, the FASB issued ASU 2018-15, “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” to reduce diversity in practice in accounting for the costs of implementing cloud computing arrangements that are service contracts. ASU 2018-15 allows entities to apply the guidance in the ASC 350-40, “Intangibles–Goodwill and Other–Internal-Use Software,” to determine which implementation costs are eligible to be capitalized as assets in a cloud computing arrangement that is considered a service contract. ASU 2018-15 is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period. Entities have the option to apply the guidance prospectively to all implementation costs incurred after the date of adoption or retrospectively and are required to make certain disclosures in the interim and annual period of adoption. The Company adopted the new standard effective January 1, 2020 on a prospective basis and the adoption of this guidance did not have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with a current expected credit loss (CECL) model which will result in earlier recognition of credit losses. On January 1, 2020, the Company on a prospective basis adopted Topic 326, the measurement of expected credit losses under the CECL model is applicable to financial assets measured at amortized cost, including accounts receivable. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION Disaggregated Revenue The Company has one business activity, which is the design, manufacture and sale of solutions for the solar photovoltaic (“PV”) industry. Disaggregated revenue by primary geographical market and timing of revenue recognition for the Company’s single product line are as follows: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (In thousands) Primary geographical markets: United States $ 139,924 $ 150,686 $ 420,315 $ 328,281 International 38,579 29,371 89,271 86,020 Total $ 178,503 $ 180,057 $ 509,586 $ 414,301 Timing of revenue recognition: Products delivered at a point in time $ 166,729 $ 170,152 $ 475,707 $ 384,888 Products and services delivered over time 11,774 9,905 33,879 29,413 Total $ 178,503 $ 180,057 $ 509,586 $ 414,301 Contract Balances Receivables, and contract assets and contract liabilities from contracts with customers are as follows: September 30, December 31, (In thousands) Receivables $ 122,386 $ 145,413 Short-term contract assets (Prepaid expenses and other assets) 16,973 15,055 Long-term contract assets (Other assets) 48,792 42,087 Short-term contract liabilities (Deferred revenues) 41,738 81,783 Long-term contract liabilities (Deferred revenues) 115,757 100,204 The Company receives payments from customers based upon contractual billing schedules. Accounts receivable are recorded when the right to consideration becomes unconditional. Contract assets include deferred product costs and commissions associated with the deferred revenue and will be amortized along with the associated revenue. The Company had no asset impairment charges related to contract assets in the three and nine months ended September 30, 2020 . Significant changes in the balances of contract assets (prepaid expenses and other assets) during the period are as follows (in thousands): Contract Assets Balance on December 31, 2019 $ 57,142 Amount recognized (12,942 ) Increase 21,565 Balance as of September 30, 2020 $ 65,765 Contract liabilities are recorded as deferred revenue on the accompanying condensed consolidated balance sheets and include payments received in advance of performance obligations under the contract and are realized when the associated revenue is recognized under the contract. Significant changes in the balances of contract liabilities (deferred revenues) during the period are as follows (in thousands): Contract Liabilities Balance on December 31, 2019 $ 181,987 Revenue recognized (78,614 ) Increase due to billings 54,122 Balance as of September 30, 2020 $ 157,495 Remaining Performance Obligations Estimated revenue expected to be recognized in future periods related to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period are as follows: September 30, (In thousands) Fiscal year: 2020 (remaining three months) $ 11,888 2021 39,344 2022 34,296 2023 28,483 2024 23,259 Thereafter 20,225 Total $ 157,495 |
OTHER FINANCIAL INFORMATION
OTHER FINANCIAL INFORMATION | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Other Financial Information | OTHER FINANCIAL INFORMATION Accounts Receivable, Net The Company receives payments from customers based upon contractual billing schedules. Accounts receivable are recorded when the right to consideration becomes unconditional. Accounts receivable, net consist of the following: September 30, December 31, (In thousands) Accounts receivable $ 122,734 $ 145,977 Allowance for doubtful accounts (348 ) (564 ) Accounts receivable, net $ 122,386 $ 145,413 Allowance for Doubtful Accounts The Company maintains allowances for doubtful accounts for uncollectible accounts receivable. Management estimates anticipated losses from doubtful accounts based on financial health of customers, days past due, collection history and existing economic conditions. The following table sets forth activities in the allowance for doubtful accounts for the periods indicated. Three Months Ended Nine Months Ended September 30, 2020 (In thousands) Balance, at beginning of the period $ 296 $ 564 Net charges to expenses 70 254 Write-offs, net of recoveries (18 ) (470 ) Balance, at end of the period $ 348 $ 348 Inventory Inventory consist of the following: September 30, December 31, (In thousands) Raw materials $ 7,148 $ 4,197 Finished goods 30,387 27,859 Total inventory $ 37,535 $ 32,056 Accrued Liabilities Accrued liabilities consist of the following: September 30, December 31, (In thousands) Salaries, commissions, incentive compensation and benefits $ 5,494 $ 5,524 Customer rebates and sales incentives 19,965 24,198 Freight 3,861 4,908 Operating lease liabilities, current 4,245 3,170 Other 18,638 9,292 Total accrued liabilities $ 52,203 $ 47,092 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS The Company’s goodwill and purchased intangible assets as of September 30, 2020 and December 31, 2019 are as follows: September 30, 2020 December 31, 2019 Gross Accumulated Amortization Net Gross Accumulated Amortization Net (In thousands) Goodwill $ 24,783 $ — $ 24,783 $ 24,783 $ — $ 24,783 Intangible assets: Other indefinite-lived intangibles $ 286 $ — $ 286 $ 286 $ — $ 286 Intangible assets with finite lives: Developed technology 13,100 (4,730 ) 8,370 13,100 (3,093 ) 10,007 Customer relationships 23,100 (4,917 ) 18,183 23,100 (2,814 ) 20,286 Total purchased intangible assets $ 36,486 $ (9,647 ) $ 26,839 $ 36,486 $ (5,907 ) $ 30,579 Amortization expense related to finite-lived intangible assets are as follows: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (In thousands) Developed technology, and patents and licensed technology $ 545 $ 546 $ 1,637 $ 1,638 Customer relationships 702 636 2,103 1,907 Total amortization expense $ 1,247 $ 1,182 $ 3,740 $ 3,545 Amortization of developed technology, patents and licensed technology is recorded to sales and marketing expense. The developed technology acquired from the Company’s acquisition of SunPower Corporation’s (“SunPower”) microinverter business in August 2018 was embedded in the microinverters that SunPower sold to its customers. The Company does not actively use the developed technology acquired from SunPower and holds the developed technology to prevent others from using it. Accordingly, the Company accounts for the developed technology as a defensive intangible asset and amortizes the associated value over a period of six years from the date of acquisition. The master supply agreement (“MSA”) entered into with SunPower in August 2018 provides the Company with the exclusive right to supply SunPower with module level power electronics for a period of five years , with options for renewals. The exclusivity arrangement extends throughout the term of the MSA, which comprises all of the expected cash flows from the customer relationship intangible asset, and was a condition to, and was an essential part of the acquisition of SunPower’s microinverter business by the Company. As the fair value ascribed to the customer relationship intangible asset represents payments to a customer, the Company amortizes the value of the customer relationship intangible asset as a reduction to revenue using a pattern of economic benefit method over a useful life of nine years . |
WARRANTY OBLIGATIONS
WARRANTY OBLIGATIONS | 9 Months Ended |
Sep. 30, 2020 | |
Product Warranties Disclosures [Abstract] | |
WARRANTY OBLIGATIONS | WARRANTY OBLIGATIONS The Company’s warranty activities were as follows: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (In thousands) Warranty obligations, beginning of period $ 37,907 $ 32,994 $ 37,098 $ 31,294 Accruals for warranties issued during period 1,939 1,571 4,229 3,741 Changes in estimates 3,869 3,884 7,294 5,387 Settlements (3,274 ) (3,780 ) (9,122 ) (8,282 ) Increase due to accretion expense 832 562 2,410 1,663 Other 2,506 (607 ) 1,870 821 Warranty obligations, end of period 43,779 34,624 43,779 34,624 Less: current portion (10,760 ) (8,757 ) (10,760 ) (8,757 ) Noncurrent $ 33,019 $ 25,867 $ 33,019 $ 25,867 Changes in Estimates For the three and nine months ended September 30, 2020 , the Company recorded additional warranty expense of $3.9 million and $7.3 million , respectively, based on continuing analysis of field performance data and diagnostic root-cause failure analysis primarily relating to its prior generation products. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2020 | |
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. Level 1. The Compa ny considers all highly liquid investments, such as certificates of deposit and money market instruments with maturities of three months or less at the time of acquisition to be cash equivalents. For all periods presented, its cash balances consist of amounts held in non-interest-bearing and interest-bearing deposits and money market accounts and are within Level 1 of the fair value hierarchy because they are valued using quoted market prices for identical instruments in active markets. As of September 30, 2020 , cash and cash equivalents balance includes money market funds of $651.6 million . Level 2. Convertible Notes due 2025 Derivatives On March 9, 2020 , the Company issued $320 million aggregate principal amount of 0.25% convertible senior notes due 2025 (the “ Notes due 2025 ”). Concurrently with the issuance of Notes due 2025 , the Company entered into privately-negotiated convertible note hedge and warrant transactions which in combination are intended to reduce the potential dilution from the conversion of the Notes due 2025 . On May 20, 2020 , at the Company’s annual meeting of stockholders, the stockholders approved an amendment to its certificate of incorporation to increase the number of authorized shares of the Company’s common stock. As a result, the Company satisfied the share reservation condition (as defined in the relevant indenture associated with the Notes due 2025 ). 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 Company’s election. Accordingly, on May 20, 2020 , the embedded derivative liability, convertible notes hedge and warrants liability were remeasured at a fair value of $116.3 million , $117.1 million and $96.4 million , respectively, 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. See Note 8 . “Debt” for additional information related to these transactions. The fair value of the Convertible notes embedded derivative was estimated using Binomial Lattice model and the fair value of Convertible notes hedge and Warrants liability was estimated using Black-Scholes-Merton model. The significant observable inputs, either directly or indirectly, and assumptions used in the models to calculate the fair value of the derivatives include the Company’s common stock price, exercise price of the derivatives, risk-free interest rate, volatility, annual coupon rate and remaining contractual term. Notes due 2025 and Notes due 2024 . The Company carries the Notes due 2025 and Notes due 2024 (as defined below) at face value less unamortized discount and issuance costs on its condensed consolidated balance sheets. The fair value of the Notes due 2025 and Notes due 2024 of $506.9 million and $408.8 million , respectively, was determined based on the closing trading prices per $100 principal amount as of the last day of trading for the period. The Company considers the fair value of the Notes due 2025 and Notes due 2024 to be a Level 2 measurement as they are not actively traded. Level 3 . Wa rranty Obligations. The following table presents the Company’s warranty obligation that were measured at fair value on a recurring basis and its categorization within the fair value hierarchy. September 30, December 31, 2019 (In thousands) Level 3 Level 3 Liabilities: Warranty obligations Current $ 7,560 $ 6,794 Non-current 18,188 13,012 Total warranty obligations measured at fair value 25,748 19,806 Total liabilities measured at fair value $ 25,748 $ 19,806 Fair Value Option for Warranty Obligations Related to Microinverters Sold Since January 1, 2014 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. Three Months Ended Nine Months Ended 2020 2019 2020 2019 (In thousands) Balance at beginning of period $ 21,132 $ 14,856 $ 19,806 $ 11,757 Accruals for warranties issued during period 1,939 1,571 4,229 3,741 Changes in estimates 1,279 2,676 2,877 3,536 Settlements (1,940 ) (2,074 ) (5,444 ) (4,534 ) Increase due to accretion expense 832 562 2,410 1,663 Other 2,506 (607 ) 1,870 821 Balance at end of period $ 25,748 $ 16,984 $ 25,748 $ 16,984 Quantitative and Qualitative Information about Level 3 Fair Value Measurements As of September 30, 2020 and December 31, 2019 , the significant unobservable inputs used in the fair value measurement of the Company’s liabilities designated as Level 3 are as follows: Percent Used (Weighted Average) Item Measured at Fair Value Valuation Technique Description of Significant Unobservable Input September 30, December 31, Warranty obligations for microinverters sold since January 1, 2014 Discounted cash flows Profit element and risk premium 15% 14% Credit-adjusted risk-free rate 13% 16% 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 the profit element and risk premium input by 100 basis points would result in a $0.2 million increase to the liability. Decreasing the profit element and risk premium by 100 basis points would result in a $0.2 million reduction of the liability. Increasing the discount rate by 100 basis points would result in a $1.3 million reduction of the liability. Decreasing the discount rate by 100 basis points would result in a $1.4 million increase to the liability. |
RESTRUCTURING
RESTRUCTURING | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING | RESTRUCTURING Restructuring expense consist of the following: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (In thousands) Redundancy and employee severance and benefit arrangements $ — $ 469 $ — $ 1,568 Lease loss reserves (benefit) — — — (100 ) Total restructuring charges $ — $ 469 $ — $ 1,468 2018 Plan In the third quarter of 2018, the Company began implementing restructuring actions (the “2018 Plan”) to lower its operating expenses. The restructuring actions include reorganization of the Company’s global workforce, elimination of certain non-core projects and consolidation of facilities. The Company completed its restructuring activities under the 2018 Plan in 2019. |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT The following table provides information regarding the Company’s long-term debt. September 30, December 31, (In thousands) Convertible notes Notes due 2025 $ 320,000 $ — Less: unamortized discount and issuance costs (68,510 ) — Carrying amount of Notes due 2025 251,490 — Notes due 2024 132,000 132,000 Less: unamortized discount and issuance costs (30,488 ) (35,815 ) Carrying amount of Notes due 2024 101,512 96,185 Notes due 2023 5,000 5,000 Less: unamortized issuance costs (112 ) (143 ) Carrying amount of Notes due 2023 4,888 4,857 Sale of long-term financing receivable recorded as debt 2,232 4,501 Total carrying amount of debt 360,122 105,543 Less: current portion of convertible notes and long-term financing receivable recorded as debt (103,670 ) (2,884 ) Long-term debt $ 256,452 $ 102,659 Convertible Senior Notes due 2025 On March 9, 2020 , the Company issued $320.0 million aggregate principal amount of the Notes due 2025 . The Notes due 2025 are general unsecured obligations and bear interest at an annual rate of 0.25% per year, payable semi-annually on March 1 and September 1 of each year, beginning September 1, 2020 . The Notes due 2025 are governed by an indenture between the Company and U.S. Bank National Association, as trustee. The Notes due 2025 will mature on March 1, 2025 , unless earlier repurchased by the Company or converted at the option of the holders. The Company may not redeem the notes prior to the maturity date, and no sinking fund is provided for the notes. The Notes due 2025 may be converted, under certain circumstances as described below, based on an initial conversion rate of 12.2637 shares of common stock per $1,000 principal amount (which represents an initial conversion price of $81.54 per share). The conversion rate for the Notes due 2025 will be subject to adjustment upon the occurrence of certain specified events but will not be adjusted for accrued and unpaid interest. In addition, upon the occurrence of a make-whole fundamental change (as defined in the relevant indenture), the Company will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its notes in connection with such make-whole fundamental change. The Company received approximately $313.0 million in net proceeds, after deducting the initial purchasers’ discount, from the issuance of the Notes due 2025 . The Notes due 2025 may be converted prior to the close of business on the business day immediately preceding September 1, 2024 , in multiples of $1,000 principal amount, at the option of the holder only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2020 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the “trading price” (as defined in the relevant indenture) per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events. On and after September 1, 2024 until the close of business on the second scheduled trading day immediately preceding the maturity date of March 1, 2025 , holders may convert their notes at any time, regardless of the foregoing circumstances. Upon the occurrence of a fundamental change (as defined in the relevant indenture), holders may require the Company to repurchase all or a portion of their Notes due 2025 for cash at a price equal to 100% of the principal amount of the notes to be repurchased plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. For the period from March 9, 2020, the issuance date, through May 19, 2020, the number of authorized and unissued shares of the Company’s common stock that are not reserved for other purposes was less than the maximum number of underlying shares that would be required to settle the Notes due 2025 into equity. Accordingly, unless and until the Company had a number of authorized shares that were not issued or reserved for any other purpose that equaled or exceeded the maximum number of underlying shares (“share reservation condition”), the Company would be required to pay to the converting holder in respect of each $1,000 principal amount of notes being converted solely in cash in an amount equal to the sum of the daily conversion values for each of the 20 consecutive trading days during the related observation period. However, following satisfaction of the share reservation condition, the Company could settle conversions of notes through payment or delivery, as the case may be, of cash, shares of the Company’s common stock or a combination of cash and shares of its common stock, at the Company’s election. In accounting for the issuance of the Notes due 2025 , on March 9, 2020 , the conversion option of the Notes due 2025 was deemed an embedded derivative requiring bifurcation from the Notes due 2025 (“host contract”) and separate accounting as an embedded derivative liability, 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. The proceeds from the Notes due 2025 were first allocated to the embedded derivative liability and the remaining proceeds were then allocated to the host contract. On March 9, 2020 , the carrying amount of the embedded derivative liability of $68.7 million representing the conversion option was determined using the Binomial Lattice model and the remaining $251.3 million was allocated to the host contract. The difference between the principal amount of the Notes due 2025 and the fair value of the host contract (the “debt discount”) is amortized to interest expense using the effective interest method over the term of the Notes due 2025 . On May 20, 2020 , at the Company’s annual meeting of stockholders, the stockholders approved an amendment to the Amended and Restated Certificate of Incorporation to increase the number of authorized shares of the Company’s common stock, par value $0.00001 per share, from 150,000,000 shares to 200,000,000 shares (the “Amendment”). The Amendment became effective upon filing with the Secretary of State of Delaware on May 20, 2020 . As a result, the Company satisfied the share reservation condition. The Company may now settle the Notes due 2025 and warrants issued in conjunction with the Notes due 2025 through payment or delivery, as the case may be, of cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company’s election. Accordingly, on May 20, 2020 , the embedded derivative liability was remeasured at a fair value of $116.3 million and was then reclassified to additional paid-in-capital in the condensed consolidated balance sheet in the second quarter of 2020 and is no longer remeasured as long as it continues to meet the conditions for equity classification. The Company recorded the change in the fair value of the embedded derivative in other expense, net in the condensed consolidated statement of operations during the nine months ended September 30, 2020 . The following table presents the fair value and the change in fair value for the convertible note embedded derivative (in thousands): Convertible note embedded derivative (In thousands) Fair value as of March 9, 2020 $ 68,700 Change in the fair value (23,600 ) Fair value as of March 31, 2020 45,100 Change in the fair value 71,200 Fair value as of May 20, 2020 $ 116,300 Debt issuance costs for the issuance of the Notes due 2025 were approximately $7.6 million , consisting of initial purchasers' discount and other issuance costs. In accounting for the transaction costs, the Company allocated the total amount incurred to the Notes due 2025 host contract. Transaction costs were recorded as debt issuance cost (presented as contra debt in the condensed consolidated balance sheet) and are being amortized to interest expense over the term of the Notes due 2025 . The following table presents the total amount of interest cost recognized relating to the Notes due 2025 : Three Months Ended Nine Months Ended (In thousands) Contractual interest expense $ 200 $ 449 Amortization of debt discount 3,110 6,922 Amortization of debt issuance costs 380 848 Total interest cost recognized $ 3,690 $ 8,219 The derived effective interest rate on the Notes due 2025 host contract was determined to be 5.18% , which remain unchanged from the date of issuance. The remaining unamortized debt discount was $61.8 million as of September 30, 2020 , will be amortized over approximately 4.4 years . Notes due 2025 Hedge and Warrant Transactions In connection with the offering of the Notes due 2025 , the Company entered into privately-negotiated convertible note hedge transactions pursuant to which the Company has the option to purchase a total of approximately 3.9 million shares of its common stock (subject to anti-dilution adjustments), which is the same number of shares initially issuable upon conversion of the notes, at a price of $81.54 per share, which is the initial conversion price of the Notes due 2025 . The total cost of the convertible note hedge transactions was approximately $89.1 million . The convertible note hedge transactions are expected generally to reduce potential dilution to the Company’s common stock upon any conversion of the Notes due 2025 and/or offset any cash payments the Company is required to make in excess of the principal amount of converted notes, as the case may be. As of September 30, 2020 , the Company had not purchased any shares under the convertible note hedge transactions. Additionally, the Company separately entered into privately-negotiated warrant transactions (the “ Warrants ”) whereby the Company sold warrants to acquire approximately 3.9 million shares of the Company’s common stock (subject to anti-dilution adjustments) at an initial strike price of $106.94 per share. The Company received aggregate proceeds of approximately $71.6 million from the sale of the Warrants . If the market value per share of the Company’s common stock, as measured under the Warrants , exceeds the strike price of the Warrants , the Warrants will have a dilutive effect on the Company’s earnings per share, unless the Company elects, subject to certain conditions, to settle the Warrants in cash. Taken together, the purchase of the convertible note hedges and the sale of the Warrants are intended to reduce potential dilution from the conversion of the Notes due 2025 and to effectively increase the overall conversion price from $81.54 to $106.94 per share. The Warrants are only exercisable on the applicable expiration dates in accordance with the agreements relating to each of the Warrants . Subject to the other terms of the Warrants, the first expiration date applicable to the Warrants is June 1, 2025 , and the final expiration date applicable to the Warrants is September 23, 2025 . As of September 30, 2020 , the Warrants had not been exercised and remained outstanding. For the period from March 9, 2020, the issuance date of the convertible notes hedge and warrant transactions, through May 19, 2020, the number of authorized and unissued shares of the Company’s common stock that are not reserved for other purposes was less than the maximum number of underlying shares that will be required to settle the Notes due 2025 through the delivery of shares of the Company’s common stock. Accordingly, the convertibles note hedge and the warrant transactions could only be settled on net cash settlement basis. As a result the convertible note hedge and the warrants transaction were classified as a Convertible notes hedge asset and Warrants liability, respectively, in the condensed consolidated balance sheet and the change in fair value of derivatives was included in other expense, net in the condensed consolidated statement of operations . On May 20, 2020 , at the Company’s annual meeting of stockholders, the stockholders approved the Amendment, and as a result, the Convertible notes hedge asset and Warrants liabilities were remeasured at a fair value of $117.1 million and $96.4 million , respectively, and were then reclassified to additional paid-in-capital in the condensed consolidated balance sheet in the second quarter of 2020 and is no longer remeasured as long as they continue to meet the conditions for equity classification. The change in the fair value of the Convertible notes hedge asset and Warrants liability were recorded in other expense, net in the condensed consolidated statements of operations during the nine months ended September 30, 2020 . The following table presents the fair value and the change in fair value for the Convertible notes hedge asset and Warrants liability: Convertible notes hedge Warrants liability (In thousands) Fair value as of March 9, 2020 $ 89,056 $ 71,552 Change in the fair value (41,171 ) (32,915 ) Fair value as of March 31, 2020 47,885 38,637 Change in the fair value 69,223 57,715 Fair value as of May 20, 2020 $ 117,108 $ 96,352 Convertible Senior Notes due 2024 On June 5, 2019 , the Company issued $132.0 million aggregate principal amount of 1.0% convertible senior notes due 2024 (the “ Notes due 2024 ”). The Notes due 2024 are general unsecured obligations and bear interest at an annual rate of 1.0% per year, payable semi-annually on June 1 and December 1 of each year, beginning December 1, 2019 . The Notes due 2024 are governed by an indenture between the Company and U.S. Bank National Association, as trustee. The Notes due 2024 will mature on June 1, 2024 , unless earlier repurchased by the Company or converted at the option of the holders. The Company may not redeem the notes prior to the maturity date, and no sinking fund is provided for the notes. The Notes due 2024 may be converted, under certain circumstances as described below, based on an initial conversion rate of 48.7781 shares of common stock per $1,000 principal amount (which represents an initial conversion price of $20.5010 per share). The conversion rate for the Notes due 2024 will be subject to adjustment upon the occurrence of certain specified events but will not be adjusted for accrued and unpaid interest. In addition, upon the occurrence of a make-whole fundamental change (as defined in the relevant indenture), the Company will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its notes in connection with such make-whole fundamental change. The Company received approximately $128.0 million in net proceeds, after deducting the initial purchasers’ discount, from the issuance of the Notes due 2024 . The Notes due 2024 may be converted on any day prior to the close of business on the business day immediately preceding December 1, 2023 , in multiples of $1,000 principal amount, at the option of the holder only under any of the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2019 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to $26.6513 ( 130% of the conversion price) on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the “trading price” (as defined in the relevant indenture) per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events. On and after December 1, 2023 until the close of business on the second scheduled trading day immediately preceding the maturity date of June 1, 2024 , holders may convert their notes at any time, regardless of the foregoing circumstances. Upon the occurrence of a fundamental change (as defined in the relevant indenture), holders may require the Company to repurchase all or a portion of their Notes due 2024 for cash at a price equal to 100% of the principal amount of the notes to be repurchased plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. As of September 30, 2020 , the sale price of the Company’s common stock was greater than or equal to $26.6513 ( 130% of the notes conversion price) for at least 20 trading days (whether consecutive or not) during a period of 30 consecutive trading days preceding the quarter-ended September 30, 2020 . As a result, as of September 30, 2020 , the Notes due 2024 are convertible at the holders’ option through December 31, 2020 . Accordingly, the Company classified the net carrying amount of the Notes due 2024 of $101.5 million as Debt, current on the condensed consolidated balance sheet as of September 30, 2020 . As of October 27, 2020 , the Company has received the request for conversion of approximately $5.4 million in principal amount of Notes due 2024 , of which the Company has elected to settle the aggregate principal amount of the Notes due 2024 in a combination of cash and any excess in shares of the Company’s common stock in accordance with the applicable indenture. Such conversion will be settled in December 2020. In accounting for the issuance of the Notes due 2024 , on June 5, 2019, the Company separated the Notes due 2024 into liability and equity components. The carrying amount of the liability component of approximately $95.6 million was calculated by using a discount rate of 7.75% , which was the Company’s borrowing rate on the date of the issuance of the notes for a similar debt instrument without the conversion feature. The carrying amount of the equity component of approximately $36.4 million , representing the conversion option, was determined by deducting the fair value of the liability component from the par value of the Notes due 2024 . The equity component of the Notes due 2024 is included in additional paid-in capital in the condensed consolidated balance sheet and is not remeasured as long as it continues to meet the conditions for equity classification. The difference between the principal amount of the Notes due 2024 and the liability component (the “debt discount”) is amortized to interest expense using the effective interest method over the term of the Notes due 2024 . The Company separated the Notes due 2024 into liability and equity components, this resulted in a tax basis difference associated with the liability component that represents a temporary difference. The Company recognized the deferred taxes of $0.3 million for the tax effect of that temporary difference as an adjustment to the equity component included in additional paid-in capital in the condensed consolidated balance sheet. Debt issuance costs for the issuance of the Notes due 2024 were approximately $4.6 million , consisting of initial purchasers' discount and other issuance costs. In accounting for the transaction costs, the Company allocated the total amount incurred to the liability and equity components using the same proportions as the proceeds from the Notes due 2024 . Transaction costs attributable to the liability component were approximately $3.3 million , were recorded as debt issuance cost (presented as contra debt in the condensed consolidated balance sheet) and are being amortized to interest expense over the term of the Notes due 2024 . The transaction costs attributable to the equity component were approximately $1.3 million and were netted with the equity component in stockholders’ equity. As of September 30, 2020 and December 31, 2019 , the unamortized deferred issuance cost for the Notes due 2024 was $2.4 million and $2.9 million , respectively, on the condensed consolidated balance sheets. The following table presents the total amount of interest cost recognized relating to the Notes due 2024 : Three Months Ended Nine Months Ended 2020 2019 2020 2019 (In thousands) Contractual interest expense $ 330 $ 330 $ 990 $ 422 Amortization of debt discount 1,645 1,523 4,828 1,939 Amortization of debt issuance costs 166 165 498 210 Total interest cost recognized $ 2,141 $ 2,018 $ 6,316 $ 2,571 The effective interest rate on the liability component Notes due 2024 was 7.75% for the three and nine months ended September 30, 2020 , which remains unchanged from the date of issuance. The remaining unamortized debt discount was $28.0 million and $32.9 million as of September 30, 2020 and December 31, 2019 , respectively, will be amortized over approximately 3.7 years from September 30, 2020 . Notes due 2024 Hedge and Warrant Transactions In connection with the offering of the Notes due 2024 , the Company entered into privately-negotiated convertible note hedge transactions pursuant to which the Company has the option to purchase a total of approximately 6.4 million shares of its common stock (subject to anti-dilution adjustments), which is the same number of shares initially issuable upon conversion of the notes, at a price of $20.5010 per share, which is the initial conversion price of the Notes due 2024 . The total cost of the convertible note hedge transactions was approximately $36.3 million . The convertible note hedge transactions are expected generally to reduce potential dilution to the Company’s common stock upon any conversion of the Notes due 2024 and/or offset any cash payments the Company is required to make in excess of the principal amount of converted notes, as the case may be. As of September 30, 2020 , and through the date of this quarterly report, the Company had not purchased any shares under the convertible note hedge transactions. Additionally, the Company separately entered into privately-negotiated warrant transactions (the “ Warrants ”) whereby the Company sold warrants to acquire approximately 6.4 million shares of the Company’s common stock (subject to anti-dilution adjustments) at an initial strike price of $25.2320 per share. The Company received aggregate proceeds of approximately $29.8 million from the sale of the Warrants . If the market value per share of the Company’s common stock, as measured under the Warrants , exceeds the strike price of the Warrants , the Warrants will have a dilutive effect on the Company’s earnings per share, unless the Company elects, subject to certain conditions, to settle the Warrants in cash. Taken together, the purchase of the convertible note hedges and the sale of the Warrants are intended to reduce potential dilution from the conversion of the Notes due 2024 and to effectively increase the overall conversion price from $20.5010 to $25.2320 per share. The Warrants are only exercisable on the applicable expiration dates in accordance with the Warrants . Subject to the other terms of the Warrants, the first expiration date applicable to the Warrants is September 1, 2024 , and the final expiration date applicable to the Warrants is April 22, 2025 . As of September 30, 2020 , and through the report date, the Warrants had not been exercised and remained outstanding. Given that the transactions meet certain accounting criteria, the Notes due 2024 hedge and the warrants transactions are recorded in stockholders’ equity, and they are not accounted for as derivatives and are not remeasured each reporting period. Convertible Senior Notes due 2023 In August 2018 , the Company sold $65.0 million aggregate principal amount of 4.0% convertible senior notes due 2023 (the “ Notes due 2023 ”) in a private placement. On May 30, 2019 , the Company entered into separately and privately negotiated transactions with certain holders of the Notes due 2023 resulting in the repurchase and exchange, as of June 5, 2019 , of $60.0 million aggregate principal amount of the notes in consideration for the issuance of 10,801,080 shares of common stock and separate cash payments totaling $6.0 million . As of both September 30, 2020 and December 31, 2019 , $5.0 million aggregate principal amount of the Notes due 2023 remain outstanding. The remaining outstanding Notes due 2023 are general unsecured obligations and bear interest at a rate of 4.0% per year, payable semi-annually on February 1 and August 1 of each year. The Notes due 2023 are governed by an indenture between the Company and U.S. Bank National Association, as trustee. The remaining outstanding Notes due 2023 will mature on August 1, 2023 , unless earlier repurchased by the Company or converted at the option of the holders. The Company may not redeem the remaining Notes due 2023 prior to the maturity date, and no sinking fund is provided for such notes. The remaining Notes due 2023 are convertible, at a holder’s election, in multiples of $1,000 principal amount, into shares of the Company’s common stock based on the applicable conversion rate. The initial conversion rate for such notes is 180.0180 shares of common stock per $1,000 principal amount of notes (which is equivalent to an initial conversion price of approximately $5.56 per share). The conversion rate and the corresponding conversion price are subject to adjustment upon the occurrence of certain events but will not be adjusted for any accrued and unpaid interest. Holders of the remaining Notes due 2023 who convert their notes in connection with a make-whole fundamental change (as defined in the applicable indenture) are, under certain circumstances, entitled to an increase in the conversion rate. Additionally, in the event of a fundamental change, holders of the remaining Notes due 2023 may require the Company to repurchase all or a portion of their notes at a price equal to 100% of the principal amount of notes, plus any accrued and unpaid interest, including any additional interest to, but excluding, the repurchase date. Holders may convert all or any portion of their Notes due 2023 at their option at any time prior to the close of business on the business day immediately preceding the maturity date, in multiples of $1,000 principal amount. The following table presents the amount of interest cost recognized relating to the contractual interest coupon and the amortization of debt issuance costs of the Notes due 2023 . Three Months Ended Nine Months Ended 2020 2019 2020 2019 (In thousands) Contractual interest expense $ 50 $ 43 $ 150 $ 1,176 Amortization of debt issuance costs 10 10 30 235 Total interest costs recognized $ 60 $ 53 $ 180 $ 1,411 Sale of Long-Term Financing Receivables The Company entered into an agreement with a third party in the fourth quarter of 2017 to sell certain current and future receivables at a discount. In December 2017, the third party made an initial purchase of receivables that resulted in net proceeds to the Company of $2.8 million . This transaction was recorded as debt on the accompanying consolidated balance sheets, and the debt balance was relieved in January 2019 as the underlying receivables were settled. During the year ended December 31, 2018, the third party made three additional purchases of receivables that resulted in total net proceeds to the Company of $5.6 million . These transactions were recorded as debt on the accompanying condensed consolidated balance sheets, and the total associated debt balance will be relieved by September 2021 as the underlying receivables are settled. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Operating Leases The Company leases office facilities under noncancelable operating leases that expire on various dates through 2028, some of which may include options to extend the leases for up to 12 years . The components of lease expense are presented as follows: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (In thousands) Operating lease costs $ 1,274 $ 1,161 $ 3,776 $ 2,909 The components of lease liabilities are presented as follows: September 30, December 31, (In thousands) Operating lease liabilities, current (Accrued liabilities) $ 4,245 $ 3,170 Operating lease liabilities, noncurrent (Other liabilities) 12,417 9,542 Total operating lease liabilities $ 16,662 $ 12,712 Supplemental lease information: Weighted average remaining lease term 5.6 years 5.5 years Weighted average discount rate 8.1% 8.6% Supplemental cash flow and other information related to operating leases, are as follows: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (In thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,252 $ 1,019 $ 3,411 $ 2,613 Non-cash investing activities: Lease liabilities arising from obtaining right-of-use assets $ 3,798 $ — $ 6,739 $ 4,834 Undiscounted cash flows of operating lease liabilities as of September 30, 2020 are as follows: Lease Amounts (In thousands) Year: 2020 (remaining three months) $ 1,345 2021 5,436 2022 4,155 2023 3,518 2024 2,523 2025 and thereafter 2,686 Total lease payments 19,663 Less: imputed lease interest (3,001 ) Total lease liabilities $ 16,662 Purchase Obligations The Company has contractual obligations related to component inventory that its primary contract manufacturer procures on its behalf in accordance with its production forecast as well as other inventory related purchase commitments. As of September 30, 2020 , these purchase obligations totaled approximately $115.1 million . Letter of Credits The Company had a standby letter of credit that expired on April 30, 2020 in the aggregate amount of $44.7 million , primarily in connection with one of its customer contracts. The letter of credit served as a performance security for product delivered to the customer in the first quarter of 2020. No amounts were drawn against this letter of credit. As of September 30, 2020 , the Company has no letter of credit outstanding. Litigation The Company is subject to various legal proceedings relating to claims arising out of its operations that have not been fully resolved. The outcome of litigation is inherently uncertain. If one or more legal matters were resolved against the Company in a reporting period for amounts above management’s expectations, the Company’s business, results of operations, financial position and cash flows for that reporting period could be materially adversely affected. As of October 27, 2020 , the Company is not currently a party to any matters that the management expects will have an adverse material effect on the Company’s consolidated financial position, results of operations or cash flows. Contingencies On March 26, 2020, the Office of the United States Trade Representative (the “USTR”) announced certain exclusion requests related to tariffs 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 “Tariff Exclusion”). The Tariff Exclusion applies to covered products under the China Section 301 Tariff Actions (“Section 301 Tariffs”) taken by the USTR exported from China to the United States from September 24, 2018 until August 7, 2020. Accordingly, the Company has 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. The refund request is subject to review and approval by the U.S. Customs and Border Protection; therefore, the Company has assessed the probable loss recovery in the three and nine months ended September 30, 2020 is equal to the approved refund requests available to us prior to issuance of the financial statements on October 27, 2020. As of September 30, 2020 , the Company had 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 , the Company has recorded $23.0 million as a reduction to cost of revenues in the Company’s condensed consolidated statements of operations as the approved refunds relate to paid tariffs previously recorded to cost of revenues, therefore, the Company recorded the corresponding approved tariff refunds as credits to cost of revenues in the current period. T h e tariff refund receivable of $7.0 million is recorded as a reduction of accounts payable to Flex Ltd. and affiliates (“Flex”), the Company’s manufacturing partner and the importer of record who will first receive the tariff refunds, on the Company’s condensed consolidated balance sheet as of September 30, 2020 . Potential tariff refunds not recorded as of September 30, 2020 totaled approximately $16.0 million plus accrued interest and will be recognized as a reduction to cost of revenues if and when approved. Although the Company feels its requests for refunds are supportable, it cannot be sure such requests will not be challenged by the government. The Company is also unable to predict the timing of receipt of any amounts approved. The Tariff Exclusion expired on August 7, 2020 and those microinverter products now are subject to tariffs. The Company continues to pay Section 301 Tariffs on its storage and communication products and other accessories imported from China which are not subject to the Tariff Exclusion. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Stock-based Compensation Expense Stock-based compensation expense 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. Three Months Ended Nine Months Ended 2020 2019 2020 2019 (In thousands) Cost of revenues $ 1,294 $ 497 $ 3,237 $ 1,114 Research and development 4,248 1,411 9,430 3,255 Sales and marketing 3,952 1,541 9,504 3,900 General and administrative 4,905 1,996 12,043 5,013 Restructuring — 331 — 718 Total $ 14,399 $ 5,776 $ 34,214 $ 14,000 The following table summarizes the various types of stock-based compensation expense for the periods presented. Three Months Ended Nine Months Ended 2020 2019 2020 2019 (In thousands) Stock options, RSUs, and PSUs $ 13,781 $ 5,546 $ 32,415 $ 13,528 Employee stock purchase plan 618 230 1,799 472 Total $ 14,399 $ 5,776 $ 34,214 $ 14,000 As of September 30, 2020 , there was approximately $74.7 million of total unrecognized stock-based compensation expense related to unvested equity awards, which are expected to be recognized over a weighted-average period of 2.2 years . Valuation of Equity Awards Stock Options The fair value of each option granted was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions: • Expected term— The expected term of the option awards represents the period of time between the grant date of the option awards and the date the option awards are either exercised, converted or canceled, including an estimate for those option awards still outstanding. The Company used the simplified method, as permitted by the SEC for companies with a limited history of stock option exercise activity, to determine the expected term for its option grants. • Expected volatility— The expected volatility was calculated based on the Company’s historical stock prices, supplemented as necessary with historical volatility of the common stock of several peer companies with characteristics similar to those of the Company. • Risk-free interest rate— The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the time of grant and with a maturity that approximated the Company’s expected term. • Dividend yield— The dividend yield was based on the Company’s dividend history and the anticipated dividend payout over its expected term. 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 Nine Months Ended 2020 2019 2020 2019 Weighted average grant date fair value ** ** $ 38.45 $ 9.16 Expected term (in years) ** ** 3.8 3.8 Expected volatility ** ** 86.4 % 89.1 % Annual risk-free rate of return ** ** 0.1 % 2.1 % Dividend yield ** ** — % — % ** No stock options were granted during the three months ended September 30, 2020 and 2019 . Restricted Stock Units The fair value of the Company’s restricted stock units (“RSU”) awards granted is based upon the closing price of the Company’s stock price on the date of grant. Performance Stock Units The fair value of the Company’s non-market performance stock units (“PSU”) awards granted was based upon the closing price of the Company’s stock price on the date of grant. The fair value of awards of the Company’s PSU awards containing market conditions was determined using a Monte Carlo simulation model based upon the terms of the conditions, the expected volatility of the underlying security, and other relevant factors. Equity Awards Activity Stock Options The following is a summary of stock option activity. Number of Weighted- Weighted- Aggregate (1) (In thousands) (Years) (In thousands) Outstanding at December 31, 2019 4,097 $ 2.18 Granted 11 64.17 Exercised (1,062 ) 2.41 $ 56,357 Canceled (82 ) 6.94 Outstanding at September 30, 2020 2,964 $ 2.19 3.8 $ 238,224 Vested and expected to vest at September 30, 2020 2,964 $ 2.19 3.8 $ 238,224 Exercisable at September 30, 2020 2,349 $ 2.22 3.7 $ 188,809 (1) The intrinsic value of options exercised is based upon the value of the Company’s stock at exercise. The intrinsic value of options outstanding, vested and expected to vest, and exercisable as of September 30, 2020 is based on the closing price of the last trading day during the period ended September 30, 2020 . The Company’s stock fair value used in this computation was $82.59 per share. The following table summarizes information about stock options outstanding at September 30, 2020 . Options Outstanding Options Exercisable Range of Exercise Prices Number of Weighted- Weighted- Number of Weighted- (In thousands) (Years) (In thousands) $0.70 —– $1.11 687 4.3 $ 0.82 554 $ 0.82 $1.29 —– $1.29 1,000 4.0 1.29 750 1.29 $1.31 —– $1.31 709 3.5 1.31 563 1.31 $1.37 —– $14.58 557 3.1 5.44 479 5.96 $64.17 —– $64.17 11 6.6 64.17 3 64.17 Total 2,964 3.8 $ 2.19 2,349 $ 2.22 Restricted Stock Units The following is a summary of RSU activity. Number of Weighted- Weighted- Aggregate (1) (In thousands) (Years) (In thousands) Outstanding at December 31, 2019 4,263 $ 7.19 Granted 1,262 40.76 Vested (1,705 ) 6.87 $ 78,855 Canceled (84 ) 20.78 Outstanding at September 30, 2020 3,736 $ 18.37 1.13 $ 308,555 Expected to vest at September 30, 2020 3,736 $ 18.37 1.13 $ 308,555 (1) The intrinsic value of RSUs vested is based upon the value of the Company’s stock when vested. The intrinsic value of RSUs outstanding and expected to vest as of September 30, 2020 is based on the closing price of the last trading day during the period ended September 30, 2020 . The Company’s stock fair value used in this computation was $82.59 per share. Performance Stock Units The following is a summary of PSU activity. Number of Weighted- Weighted- Aggregate (1) (In thousands) (Years) (In thousands) Outstanding at December 31, 2019 955 $ 9.83 Granted 989 31.12 Vested (1,450 ) 10.20 $ 52,144 Canceled — — Outstanding at September 30, 2020 494 $ 51.10 0.4 $ 40,793 (1) The intrinsic value of PSUs vested is based upon the value of the Company’s stock when vested. The intrinsic value of PSUs outstanding and expected to vest as of September 30, 2020 is based on the closing price of the last trading day during the period ended September 30, 2020 . The Company’s stock fair value used in this computation was $82.59 per share. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES For the three and nine months ended September 30, 2020 , the Company’s income tax provision of $5.5 million and income tax benefit of $12.9 million , respectively, on a net income before income taxes of $44.8 million and $48.1 million , respectively, calculated using the annualized effective tax rate method, was primarily due to tax deduction from employee stock compensation as a discrete event, partially offset by projected tax expense in the U.S. and foreign jurisdictions that are profitable. For the three and nine months ended September 30, 2019 , the Company’s income tax provision of $0.3 million and $1.2 million , respectively, on income before income taxes of $31.4 million and $45.7 million , respectively, calculated using the discrete tax approach, was primarily related to income taxes attributable to its foreign operations. For the three and nine months ended September 30, 2020 , in accordance with FASB guidance for interim reporting of income tax, the Company has computed its provision for income taxes based on a projected annual effective tax rate while excluding loss jurisdictions which cannot be benefited. The Company used the discrete tax approach in calculating the tax expense for the three and nine months ended September 30, 2019 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 provision recorded was primarily related to income taxes attributable to its foreign operations. |
NET INCOME PER SHARE
NET INCOME PER SHARE | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
NET INCOME PER SHARE | NET INCOME PER SHARE Basic net income per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted net income per share is computed in a similar manner, but it also includes the effect of potential common shares outstanding during the period, when dilutive. Potential common shares include Stock Options, RSUs, PSUs, shares to be purchased under the Company’s ESPP, the Notes due 2023 , the Notes due 2024 , Warrants issued in conjunction with the Notes due 2024 , and from May 20, 2020 to the end of the reporting period, the Notes due 2025 and Warrants issued in conjunction with the Notes due 2025 . See Note 8. “Debt” for additional information. The dilutive effect of potentially dilutive common shares is reflected in diluted earnings per share by application of the treasury stock method for stock options, RSUs, PSUs, Notes due 2024 , warrants issued in conjunction with the Notes due 2024 , Notes due 2025 , warrants issued in conjunction with the Notes due 2025 and shares to be purchased under the ESPP, and by application of the if-converted method for the Notes due 2023 . To the extent these potential common shares are antidilutive, they are excluded from the calculation of diluted net income per share. The following table presents the computation of basic and diluted net income per share for the periods presented. Three Months Ended Nine Months Ended 2020 2019 2020 2019 (In thousands, except per share data) Numerator: Net income $ 39,362 $ 31,099 $ 61,004 $ 44,482 Notes due 2023 interest and financing costs, net 44 39 133 1,046 Adjusted net income $ 39,406 $ 31,138 $ 61,137 $ 45,528 Denominator: Shares used in basic per share amounts: Weighted average common shares outstanding 126,109 122,123 125,084 114,720 Shares used in diluted per share amounts: Weighted average common shares outstanding 126,109 122,123 125,084 114,720 Effect of dilutive securities: Employee stock-based awards 6,330 9,200 7,123 8,937 Warrants (issued in conjunction with Notes due 2024) 4,013 100 3,251 — Notes due 2024 4,468 1,288 3,849 385 Notes due 2023 900 900 900 7,072 Weighted average common shares outstanding for diluted calculation 141,820 133,611 140,207 131,114 Basic and diluted net income per share Net income per share, basic $ 0.31 $ 0.25 $ 0.49 $ 0.39 Net income per share, diluted $ 0.28 $ 0.23 $ 0.44 $ 0.35 The following outstanding shares of common stock equivalents were excluded from the calculation of the diluted net income per share attributable to common stockholders because their effect would have been antidilutive. Three Months Ended Nine Months Ended 2020 2019 2020 2019 (In thousands) Employee stock-based awards 36 11 64 112 Warrants (issued in conjunction with Notes due 2025) 2,342 — 2,832 — Notes due 2025 854 — 1,458 — Total 3,232 11 4,354 112 Diluted earnings per share for the three and nine months ended September 30, 2020 includes the dilutive effect of stock options, RSUs, PSUs, shares to be purchased under the ESPP, the Notes due 2023 , the Notes due 2024 and warrants issued in conjunction with the Notes due 2024 . Certain common stock issuable under stock options, RSUs, PSUs, Notes due 2025 and warrants issued in conjunction with the Notes due 2025 have been omitted from the diluted net income per share calculation because including such shares would have been antidilutive. Diluted earnings per share for the three and nine months ended September 30, 2019 includes the dilutive effect of stock options, RSUs, PSUs, shares to be purchased under the ESPP, the Notes due 2023 , Notes due 2024 and warrants issued in conjunction with the Notes due 2024 . Certain common stock issuable under stock options, RSUs and PSUs have been omitted from the diluted net income per share calculation because including such shares would have been antidilutive. Since the Company has the intent and ability to settle the aggregate principal amount of the Notes due 2024 and Notes due 2025 in cash and any excess in shares of the Company’s common stock, the Company uses the treasury stock method for calculating any potential dilutive effect of the conversion spread on diluted net income per share, if applicable. In order to compute the dilutive effect, the number of shares included in the denominator of diluted net income per share is determined by dividing the conversion spread value of the “in-the-money” Notes due 2024 and Notes due 2025 by the Company’s average share price during the period and including the resulting share amount in the diluted net income per share denominator . The conversion spread will have a dilutive impact on net income per share of common stock when the average market price of the Company’s common stock for a given period exceeds the conversion price of $20.50 per share and $81.54 per share for the Notes due 2024 and Notes due 2025 |
RELATED PARTY
RELATED PARTY | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY | RELATED PARTY In 2018 , a member of the Company’s board of directors and one of its principal stockholders, Thurman John Rodgers, purchased $5.0 million aggregate principal amount of the Notes due 2023 in a concurrent private placement. As of both September 30, 2020 and December 31, 2019 , $5.0 million aggregate principal amount of the Notes due 2023 were outstanding. See Note 8 . “Debt” for additional information related to this purchase. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | <div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;color:#000000;font-weight:bold;">SUBSEQUENT EVENTS</font></div><div style="line-height:120%;padding-bottom:8px;padding-top:8px;text-align:justify;text-indent:36px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;color:#000000;font-style:italic;font-weight:bold;">Business Combination</font></div></div> |
DESCRIPTION OF BUSINESS AND B_2
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
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 United States (“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 consolidation. |
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, allowance for doubtful accounts, stock-based compensation, inventory valuation, accrued warranty obligations, fair value of debt derivatives, fair value of acquired intangible assets and goodwill, useful lives of acquired intangible assets and property and equipment, incremental borrowing rate for right-of-use assets and lease liability, probable loss recovery of tariff refunds, legal contingencies, and tax valuation allowance. 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. The worldwide spread of the COVID-19 virus has resulted in a global slowdown of economic activity which decreased demand for a broad variety of goods and services, including from our customers, while also disrupting sales channels and marketing activities for an unknown period of time and may continue to create significant uncertainty in future operational and financial performance. The Company expects this to have negative impact on its sales and its results of operations. In preparing the Company’s condensed consolidated financial statements in accordance with GAAP, the Company is required to make estimates, assumptions and judgments that affect the amounts reported in its financial statements and the accompanying disclosures. Estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require the exercise of judgment. As of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates, judgments or revise the carrying value of its assets or liabilities. These estimates may change, as new events occur and additional information is obtained, and are recognized in the condensed consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to the Company’s financial statements. |
Commitments and Contingencies | Commitments and Contingencies In the normal course of business, the Company is subject to loss contingencies and loss recoveries, such as legal proceedings and claims arising out of its business as well as tariff refunds. An accrual for a loss contingency or loss recovery is recognized when it is probable and the amount of loss or recovery can be reasonably estimated. |
Recently Adopted And Recently Issued Not Yet Effective Accounting Pronouncements | Recently Issued Accounting Pronouncements Not Yet Effective In August 2020, the FASB issued Account Standard Update (“ASU”) 2020-06, “Debt - Debt with Conversion and Other Options (subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (subtopic 815-40),” which reduces the number of accounting models in ASC 470-20 that require separate accounting for embedded conversion features. As a result, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost as long as no other features require bifurcation and recognition as derivatives. By removing those separation models, the effective interest rate of convertible debt instruments will be closer to the coupon interest rate. Further, the diluted net income per share calculation for convertible instruments will require the Company to use the if-converted method. The treasury stock method should no longer be used to calculate diluted net income per share for convertible instruments. The amendment will be effective for the Company beginning after December 15, 2021 and early adoption is permitted. The Company is evaluating the accounting, transition and disclosure requirements of the standard. Recently Adopted Accounting Pronouncements In August 2018, the FASB issued ASU 2018-15, “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” to reduce diversity in practice in accounting for the costs of implementing cloud computing arrangements that are service contracts. ASU 2018-15 allows entities to apply the guidance in the ASC 350-40, “Intangibles–Goodwill and Other–Internal-Use Software,” to determine which implementation costs are eligible to be capitalized as assets in a cloud computing arrangement that is considered a service contract. ASU 2018-15 is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period. Entities have the option to apply the guidance prospectively to all implementation costs incurred after the date of adoption or retrospectively and are required to make certain disclosures in the interim and annual period of adoption. The Company adopted the new standard effective January 1, 2020 on a prospective basis and the adoption of this guidance did not have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with a current expected credit loss (CECL) model which will result in earlier recognition of credit losses. On January 1, 2020, the Company on a prospective basis adopted Topic 326, the measurement of expected credit losses under the CECL model is applicable to financial assets measured at amortized cost, including accounts receivable. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. |
Fair Value Measurement | 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. |
Earnings Per Share | Basic net income per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted net income per share is computed in a similar manner, but it also includes the effect of potential common shares outstanding during the period, when dilutive. Potential common shares include Stock Options, RSUs, PSUs, shares to be purchased under the Company’s ESPP, the Notes due 2023 , the Notes due 2024 , Warrants issued in conjunction with the Notes due 2024 , and from May 20, 2020 to the end of the reporting period, the Notes due 2025 and Warrants issued in conjunction with the Notes due 2025 . See Note 8. “Debt” for additional information. The dilutive effect of potentially dilutive common shares is reflected in diluted earnings per share by application of the treasury stock method for stock options, RSUs, PSUs, Notes due 2024 , warrants issued in conjunction with the Notes due 2024 , Notes due 2025 , warrants issued in conjunction with the Notes due 2025 and shares to be purchased under the ESPP, and by application of the if-converted method for the Notes due 2023 . To the extent these potential common shares are antidilutive, they are excluded from the calculation of diluted net income per share. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Revenue Disaggregation | Disaggregated revenue by primary geographical market and timing of revenue recognition for the Company’s single product line are as follows: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (In thousands) Primary geographical markets: United States $ 139,924 $ 150,686 $ 420,315 $ 328,281 International 38,579 29,371 89,271 86,020 Total $ 178,503 $ 180,057 $ 509,586 $ 414,301 Timing of revenue recognition: Products delivered at a point in time $ 166,729 $ 170,152 $ 475,707 $ 384,888 Products and services delivered over time 11,774 9,905 33,879 29,413 Total $ 178,503 $ 180,057 $ 509,586 $ 414,301 |
Summary of Contract Assets and Contract Liabilities, and Changes in Balances from Contracts with Customers | Significant changes in the balances of contract liabilities (deferred revenues) during the period are as follows (in thousands): Contract Liabilities Balance on December 31, 2019 $ 181,987 Revenue recognized (78,614 ) Increase due to billings 54,122 Balance as of September 30, 2020 $ 157,495 Receivables, and contract assets and contract liabilities from contracts with customers are as follows: September 30, December 31, (In thousands) Receivables $ 122,386 $ 145,413 Short-term contract assets (Prepaid expenses and other assets) 16,973 15,055 Long-term contract assets (Other assets) 48,792 42,087 Short-term contract liabilities (Deferred revenues) 41,738 81,783 Long-term contract liabilities (Deferred revenues) 115,757 100,204 Significant changes in the balances of contract assets (prepaid expenses and other assets) during the period are as follows (in thousands): Contract Assets Balance on December 31, 2019 $ 57,142 Amount recognized (12,942 ) Increase 21,565 Balance as of September 30, 2020 $ 65,765 |
Summary of Estimated Revenue Expected to be Recognized in Future Periods | Estimated revenue expected to be recognized in future periods related to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period are as follows: September 30, (In thousands) Fiscal year: 2020 (remaining three months) $ 11,888 2021 39,344 2022 34,296 2023 28,483 2024 23,259 Thereafter 20,225 Total $ 157,495 |
OTHER FINANCIAL INFORMATION (Ta
OTHER FINANCIAL INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Accounts Receivable, Net | Accounts receivable, net consist of the following: September 30, December 31, (In thousands) Accounts receivable $ 122,734 $ 145,977 Allowance for doubtful accounts (348 ) (564 ) Accounts receivable, net $ 122,386 $ 145,413 |
Schedule of Allowance for Doubtful Accounts | The following table sets forth activities in the allowance for doubtful accounts for the periods indicated. Three Months Ended Nine Months Ended September 30, 2020 (In thousands) Balance, at beginning of the period $ 296 $ 564 Net charges to expenses 70 254 Write-offs, net of recoveries (18 ) (470 ) Balance, at end of the period $ 348 $ 348 |
Schedule of Inventory | Inventory consist of the following: September 30, December 31, (In thousands) Raw materials $ 7,148 $ 4,197 Finished goods 30,387 27,859 Total inventory $ 37,535 $ 32,056 |
Schedule of Accrued Liabilities | Accrued liabilities consist of the following: September 30, December 31, (In thousands) Salaries, commissions, incentive compensation and benefits $ 5,494 $ 5,524 Customer rebates and sales incentives 19,965 24,198 Freight 3,861 4,908 Operating lease liabilities, current 4,245 3,170 Other 18,638 9,292 Total accrued liabilities $ 52,203 $ 47,092 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill and Intangible Assets | The Company’s goodwill and purchased intangible assets as of September 30, 2020 and December 31, 2019 are as follows: September 30, 2020 December 31, 2019 Gross Accumulated Amortization Net Gross Accumulated Amortization Net (In thousands) Goodwill $ 24,783 $ — $ 24,783 $ 24,783 $ — $ 24,783 Intangible assets: Other indefinite-lived intangibles $ 286 $ — $ 286 $ 286 $ — $ 286 Intangible assets with finite lives: Developed technology 13,100 (4,730 ) 8,370 13,100 (3,093 ) 10,007 Customer relationships 23,100 (4,917 ) 18,183 23,100 (2,814 ) 20,286 Total purchased intangible assets $ 36,486 $ (9,647 ) $ 26,839 $ 36,486 $ (5,907 ) $ 30,579 |
Schedule of Amortization Expense | Amortization expense related to finite-lived intangible assets are as follows: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (In thousands) Developed technology, and patents and licensed technology $ 545 $ 546 $ 1,637 $ 1,638 Customer relationships 702 636 2,103 1,907 Total amortization expense $ 1,247 $ 1,182 $ 3,740 $ 3,545 |
WARRANTY OBLIGATIONS (Tables)
WARRANTY OBLIGATIONS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Product Warranties Disclosures [Abstract] | |
Summary of Warranty Activities | The Company’s warranty activities were as follows: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (In thousands) Warranty obligations, beginning of period $ 37,907 $ 32,994 $ 37,098 $ 31,294 Accruals for warranties issued during period 1,939 1,571 4,229 3,741 Changes in estimates 3,869 3,884 7,294 5,387 Settlements (3,274 ) (3,780 ) (9,122 ) (8,282 ) Increase due to accretion expense 832 562 2,410 1,663 Other 2,506 (607 ) 1,870 821 Warranty obligations, end of period 43,779 34,624 43,779 34,624 Less: current portion (10,760 ) (8,757 ) (10,760 ) (8,757 ) Noncurrent $ 33,019 $ 25,867 $ 33,019 $ 25,867 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Liabilities Measured at Fair Value on a Recurring Basis | The following table presents the Company’s warranty obligation that were measured at fair value on a recurring basis and its categorization within the fair value hierarchy. September 30, December 31, 2019 (In thousands) Level 3 Level 3 Liabilities: Warranty obligations Current $ 7,560 $ 6,794 Non-current 18,188 13,012 Total warranty obligations measured at fair value 25,748 19,806 Total liabilities measured at fair value $ 25,748 $ 19,806 The following table presents the fair value and the change in fair value for the Convertible notes hedge asset and Warrants liability: Convertible notes hedge Warrants liability (In thousands) Fair value as of March 9, 2020 $ 89,056 $ 71,552 Change in the fair value (41,171 ) (32,915 ) Fair value as of March 31, 2020 47,885 38,637 Change in the fair value 69,223 57,715 Fair value as of May 20, 2020 $ 117,108 $ 96,352 |
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. Three Months Ended Nine Months Ended 2020 2019 2020 2019 (In thousands) Balance at beginning of period $ 21,132 $ 14,856 $ 19,806 $ 11,757 Accruals for warranties issued during period 1,939 1,571 4,229 3,741 Changes in estimates 1,279 2,676 2,877 3,536 Settlements (1,940 ) (2,074 ) (5,444 ) (4,534 ) Increase due to accretion expense 832 562 2,410 1,663 Other 2,506 (607 ) 1,870 821 Balance at end of period $ 25,748 $ 16,984 $ 25,748 $ 16,984 |
Summary of Significant Unobservable Inputs used in the Fair Value Measurement of Liabilities Designated as Level 3 | As of September 30, 2020 and December 31, 2019 , the significant unobservable inputs used in the fair value measurement of the Company’s liabilities designated as Level 3 are as follows: Percent Used (Weighted Average) Item Measured at Fair Value Valuation Technique Description of Significant Unobservable Input September 30, December 31, Warranty obligations for microinverters sold since January 1, 2014 Discounted cash flows Profit element and risk premium 15% 14% Credit-adjusted risk-free rate 13% 16% |
RESTRUCTURING (Tables)
RESTRUCTURING (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | Restructuring expense consist of the following: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (In thousands) Redundancy and employee severance and benefit arrangements $ — $ 469 $ — $ 1,568 Lease loss reserves (benefit) — — — (100 ) Total restructuring charges $ — $ 469 $ — $ 1,468 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The following table provides information regarding the Company’s long-term debt. September 30, December 31, (In thousands) Convertible notes Notes due 2025 $ 320,000 $ — Less: unamortized discount and issuance costs (68,510 ) — Carrying amount of Notes due 2025 251,490 — Notes due 2024 132,000 132,000 Less: unamortized discount and issuance costs (30,488 ) (35,815 ) Carrying amount of Notes due 2024 101,512 96,185 Notes due 2023 5,000 5,000 Less: unamortized issuance costs (112 ) (143 ) Carrying amount of Notes due 2023 4,888 4,857 Sale of long-term financing receivable recorded as debt 2,232 4,501 Total carrying amount of debt 360,122 105,543 Less: current portion of convertible notes and long-term financing receivable recorded as debt (103,670 ) (2,884 ) Long-term debt $ 256,452 $ 102,659 The following table presents the total amount of interest cost recognized relating to the Notes due 2025 : Three Months Ended Nine Months Ended (In thousands) Contractual interest expense $ 200 $ 449 Amortization of debt discount 3,110 6,922 Amortization of debt issuance costs 380 848 Total interest cost recognized $ 3,690 $ 8,219 The following table presents the total amount of interest cost recognized relating to the Notes due 2024 : Three Months Ended Nine Months Ended 2020 2019 2020 2019 (In thousands) Contractual interest expense $ 330 $ 330 $ 990 $ 422 Amortization of debt discount 1,645 1,523 4,828 1,939 Amortization of debt issuance costs 166 165 498 210 Total interest cost recognized $ 2,141 $ 2,018 $ 6,316 $ 2,571 The following table presents the amount of interest cost recognized relating to the contractual interest coupon and the amortization of debt issuance costs of the Notes due 2023 . Three Months Ended Nine Months Ended 2020 2019 2020 2019 (In thousands) Contractual interest expense $ 50 $ 43 $ 150 $ 1,176 Amortization of debt issuance costs 10 10 30 235 Total interest costs recognized $ 60 $ 53 $ 180 $ 1,411 |
Schedule of Derivative Instruments | The following table presents the fair value and the change in fair value for the convertible note embedded derivative (in thousands): Convertible note embedded derivative (In thousands) Fair value as of March 9, 2020 $ 68,700 Change in the fair value (23,600 ) Fair value as of March 31, 2020 45,100 Change in the fair value 71,200 Fair value as of May 20, 2020 $ 116,300 |
Schedule of Fair Value Of Convertible Notes Hedge and Warrants Liability | The following table presents the Company’s warranty obligation that were measured at fair value on a recurring basis and its categorization within the fair value hierarchy. September 30, December 31, 2019 (In thousands) Level 3 Level 3 Liabilities: Warranty obligations Current $ 7,560 $ 6,794 Non-current 18,188 13,012 Total warranty obligations measured at fair value 25,748 19,806 Total liabilities measured at fair value $ 25,748 $ 19,806 The following table presents the fair value and the change in fair value for the Convertible notes hedge asset and Warrants liability: Convertible notes hedge Warrants liability (In thousands) Fair value as of March 9, 2020 $ 89,056 $ 71,552 Change in the fair value (41,171 ) (32,915 ) Fair value as of March 31, 2020 47,885 38,637 Change in the fair value 69,223 57,715 Fair value as of May 20, 2020 $ 117,108 $ 96,352 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Components of Lease | The components of lease expense are presented as follows: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (In thousands) Operating lease costs $ 1,274 $ 1,161 $ 3,776 $ 2,909 The components of lease liabilities are presented as follows: September 30, December 31, (In thousands) Operating lease liabilities, current (Accrued liabilities) $ 4,245 $ 3,170 Operating lease liabilities, noncurrent (Other liabilities) 12,417 9,542 Total operating lease liabilities $ 16,662 $ 12,712 Supplemental lease information: Weighted average remaining lease term 5.6 years 5.5 years Weighted average discount rate 8.1% 8.6% Supplemental cash flow and other information related to operating leases, are as follows: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (In thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,252 $ 1,019 $ 3,411 $ 2,613 Non-cash investing activities: Lease liabilities arising from obtaining right-of-use assets $ 3,798 $ — $ 6,739 $ 4,834 |
Schedule of Future Minimum Rental Payments for Operating Leases | Undiscounted cash flows of operating lease liabilities as of September 30, 2020 are as follows: Lease Amounts (In thousands) Year: 2020 (remaining three months) $ 1,345 2021 5,436 2022 4,155 2023 3,518 2024 2,523 2025 and thereafter 2,686 Total lease payments 19,663 Less: imputed lease interest (3,001 ) Total lease liabilities $ 16,662 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
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. Three Months Ended Nine Months Ended 2020 2019 2020 2019 (In thousands) Cost of revenues $ 1,294 $ 497 $ 3,237 $ 1,114 Research and development 4,248 1,411 9,430 3,255 Sales and marketing 3,952 1,541 9,504 3,900 General and administrative 4,905 1,996 12,043 5,013 Restructuring — 331 — 718 Total $ 14,399 $ 5,776 $ 34,214 $ 14,000 |
Summary of Stock-Based Compensation Associated with Each Type of Award | The following table summarizes the various types of stock-based compensation expense for the periods presented. Three Months Ended Nine Months Ended 2020 2019 2020 2019 (In thousands) Stock options, RSUs, and PSUs $ 13,781 $ 5,546 $ 32,415 $ 13,528 Employee stock purchase plan 618 230 1,799 472 Total $ 14,399 $ 5,776 $ 34,214 $ 14,000 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | 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 Nine Months Ended 2020 2019 2020 2019 Weighted average grant date fair value ** ** $ 38.45 $ 9.16 Expected term (in years) ** ** 3.8 3.8 Expected volatility ** ** 86.4 % 89.1 % Annual risk-free rate of return ** ** 0.1 % 2.1 % Dividend yield ** ** — % — % ** No stock options were granted during the three months ended September 30, 2020 and 2019 . |
Share-based Compensation, Performance Shares Award Outstanding Activity | The following is a summary of PSU activity. Number of Weighted- Weighted- Aggregate (1) (In thousands) (Years) (In thousands) Outstanding at December 31, 2019 955 $ 9.83 Granted 989 31.12 Vested (1,450 ) 10.20 $ 52,144 Canceled — — Outstanding at September 30, 2020 494 $ 51.10 0.4 $ 40,793 (1) The intrinsic value of PSUs vested is based upon the value of the Company’s stock when vested. The intrinsic value of PSUs outstanding and expected to vest as of September 30, 2020 is based on the closing price of the last trading day during the period ended September 30, 2020 . The Company’s stock fair value used in this computation was $82.59 per share. |
Summary of Stock Option Activity | The following is a summary of stock option activity. Number of Weighted- Weighted- Aggregate (1) (In thousands) (Years) (In thousands) Outstanding at December 31, 2019 4,097 $ 2.18 Granted 11 64.17 Exercised (1,062 ) 2.41 $ 56,357 Canceled (82 ) 6.94 Outstanding at September 30, 2020 2,964 $ 2.19 3.8 $ 238,224 Vested and expected to vest at September 30, 2020 2,964 $ 2.19 3.8 $ 238,224 Exercisable at September 30, 2020 2,349 $ 2.22 3.7 $ 188,809 (1) The intrinsic value of options exercised is based upon the value of the Company’s stock at exercise. The intrinsic value of options outstanding, vested and expected to vest, and exercisable as of September 30, 2020 is based on the closing price of the last trading day during the period ended September 30, 2020 . The Company’s stock fair value used in this computation was $82.59 per share. |
Summary of Stock Option Outstanding | The following table summarizes information about stock options outstanding at September 30, 2020 . Options Outstanding Options Exercisable Range of Exercise Prices Number of Weighted- Weighted- Number of Weighted- (In thousands) (Years) (In thousands) $0.70 —– $1.11 687 4.3 $ 0.82 554 $ 0.82 $1.29 —– $1.29 1,000 4.0 1.29 750 1.29 $1.31 —– $1.31 709 3.5 1.31 563 1.31 $1.37 —– $14.58 557 3.1 5.44 479 5.96 $64.17 —– $64.17 11 6.6 64.17 3 64.17 Total 2,964 3.8 $ 2.19 2,349 $ 2.22 |
Summary of Restricted Stock Unit Activity | The following is a summary of RSU activity. Number of Weighted- Weighted- Aggregate (1) (In thousands) (Years) (In thousands) Outstanding at December 31, 2019 4,263 $ 7.19 Granted 1,262 40.76 Vested (1,705 ) 6.87 $ 78,855 Canceled (84 ) 20.78 Outstanding at September 30, 2020 3,736 $ 18.37 1.13 $ 308,555 Expected to vest at September 30, 2020 3,736 $ 18.37 1.13 $ 308,555 (1) The intrinsic value of RSUs vested is based upon the value of the Company’s stock when vested. The intrinsic value of RSUs outstanding and expected to vest as of September 30, 2020 is based on the closing price of the last trading day during the period ended September 30, 2020 . The Company’s stock fair value used in this computation was $82.59 per share. |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Net Income Per Share | The following table presents the computation of basic and diluted net income per share for the periods presented. Three Months Ended Nine Months Ended 2020 2019 2020 2019 (In thousands, except per share data) Numerator: Net income $ 39,362 $ 31,099 $ 61,004 $ 44,482 Notes due 2023 interest and financing costs, net 44 39 133 1,046 Adjusted net income $ 39,406 $ 31,138 $ 61,137 $ 45,528 Denominator: Shares used in basic per share amounts: Weighted average common shares outstanding 126,109 122,123 125,084 114,720 Shares used in diluted per share amounts: Weighted average common shares outstanding 126,109 122,123 125,084 114,720 Effect of dilutive securities: Employee stock-based awards 6,330 9,200 7,123 8,937 Warrants (issued in conjunction with Notes due 2024) 4,013 100 3,251 — Notes due 2024 4,468 1,288 3,849 385 Notes due 2023 900 900 900 7,072 Weighted average common shares outstanding for diluted calculation 141,820 133,611 140,207 131,114 Basic and diluted net income per share Net income per share, basic $ 0.31 $ 0.25 $ 0.49 $ 0.39 Net income per share, diluted $ 0.28 $ 0.23 $ 0.44 $ 0.35 |
Schedule of Potentially Dilutive Securities Excluded from the Computation of Diluted Net Income Per Share | The following outstanding shares of common stock equivalents were excluded from the calculation of the diluted net income per share attributable to common stockholders because their effect would have been antidilutive. Three Months Ended Nine Months Ended 2020 2019 2020 2019 (In thousands) Employee stock-based awards 36 11 64 112 Warrants (issued in conjunction with Notes due 2025) 2,342 — 2,832 — Notes due 2025 854 — 1,458 — Total 3,232 11 4,354 112 |
REVENUE RECOGNITION - Summary o
REVENUE RECOGNITION - Summary of Disaggregated Revenue by Primary Geographical Market and Timing of Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Net revenues | $ 178,503 | $ 180,057 | $ 509,586 | $ 414,301 |
Products delivered at a point in time | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Net revenues | 166,729 | 170,152 | 475,707 | 384,888 |
Products and services delivered over time | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Net revenues | 11,774 | 9,905 | 33,879 | 29,413 |
United States | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Net revenues | 139,924 | 150,686 | 420,315 | 328,281 |
International | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Net revenues | $ 38,579 | $ 29,371 | $ 89,271 | $ 86,020 |
REVENUE RECOGNITION - Summary_2
REVENUE RECOGNITION - Summary of Contract Assets and Contract Liabilities from Contracts with Customers (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Revenue from Contract with Customer [Abstract] | ||
Receivables | $ 122,386 | $ 145,413 |
Short-term contract assets (Prepaid expenses and other assets) | 16,973 | 15,055 |
Long-term contract assets (Other assets) | 48,792 | 42,087 |
Short-term contract liabilities (Deferred revenues) | 41,738 | 81,783 |
Long-term contract liabilities (Deferred revenues) | $ 115,757 | $ 100,204 |
REVENUE RECOGNITION - Narrative
REVENUE RECOGNITION - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | ||
Contract asset impairment charges | $ 0 | $ 0 |
REVENUE RECOGNITION - Summary_3
REVENUE RECOGNITION - Summary of Significant Changes in the Balances of Contract Liabilities and Assets (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Contract Assets | |
Balance, beginning of period | $ 57,142 |
Revenue recognized | (12,942) |
Increase | 21,565 |
Balance, end of period | 65,765 |
Contract Liabilities | |
Balance, beginning of period | 181,987 |
Revenue recognized | (78,614) |
Increase due to billings | 54,122 |
Balance, end of period | $ 157,495 |
REVENUE RECOGNITION - Summary_4
REVENUE RECOGNITION - Summary of Estimated Revenue Expected to be Recognized in Future Periods (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Revenue from Contract with Customer [Abstract] | |
Total estimated revenue expected to be recognized in future periods | $ 157,495 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-10-01 | |
Revenue from Contract with Customer [Abstract] | |
Total estimated revenue expected to be recognized in future periods | $ 11,888 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total estimated revenue expected to be recognized in future periods, expected timing | 3 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Total estimated revenue expected to be recognized in future periods | $ 39,344 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total estimated revenue expected to be recognized in future periods, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Total estimated revenue expected to be recognized in future periods | $ 34,296 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total estimated revenue expected to be recognized in future periods, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Total estimated revenue expected to be recognized in future periods | $ 28,483 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total estimated revenue expected to be recognized in future periods, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Total estimated revenue expected to be recognized in future periods | $ 23,259 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total estimated revenue expected to be recognized in future periods, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Total estimated revenue expected to be recognized in future periods | $ 20,225 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total estimated revenue expected to be recognized in future periods, expected timing |
OTHER FINANCIAL INFORMATION - A
OTHER FINANCIAL INFORMATION - Accounts Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accounts receivable | $ 122,734 | $ 145,977 |
Allowance for doubtful accounts | (348) | (564) |
Accounts receivable, net | $ 122,386 | $ 145,413 |
OTHER FINANCIAL INFORMATION -_2
OTHER FINANCIAL INFORMATION - Accounts Receivable, Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Balance, at beginning of year | $ 296 | $ 564 | |
Provision for doubtful accounts | 70 | 254 | $ 408 |
Write-offs, net of recoveries | (18) | (470) | |
Balance, at end of year | $ 348 | $ 348 |
OTHER FINANCIAL INFORMATION - I
OTHER FINANCIAL INFORMATION - Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw materials | $ 7,148 | $ 4,197 |
Finished goods | 30,387 | 27,859 |
Total inventory | $ 37,535 | $ 32,056 |
OTHER FINANCIAL INFORMATION -_3
OTHER FINANCIAL INFORMATION - Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Salaries, commissions, incentive compensation and benefits | $ 5,494 | $ 5,524 |
Customer rebates and sales incentives | 19,965 | 24,198 |
Freight | 3,861 | 4,908 |
Operating lease liabilities, current | 4,245 | 3,170 |
Other | 18,638 | 9,292 |
Total accrued liabilities | $ 52,203 | $ 47,092 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Schedule of Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill, Gross | $ 24,783 | $ 24,783 |
Goodwill, Net | 24,783 | 24,783 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Other indefinite-lived intangibles, Gross | 286 | 286 |
Intangible assets with finite lives: | ||
Gross | 36,486 | 36,486 |
Accumulated Amortization | (9,647) | (5,907) |
Net | 26,839 | 30,579 |
Developed technology | ||
Intangible assets with finite lives: | ||
Gross | 13,100 | 13,100 |
Accumulated Amortization | (4,730) | (3,093) |
Net | 8,370 | 10,007 |
Customer relationship | ||
Intangible assets with finite lives: | ||
Gross | 23,100 | 23,100 |
Accumulated Amortization | (4,917) | (2,814) |
Net | $ 18,183 | $ 20,286 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Amortization Expense (Details) - USD ($) $ in Thousands | Aug. 09, 2018 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization of intangible assets | $ 1,247 | $ 1,182 | $ 3,740 | $ 3,545 | |
Developed technology, and patents and licensed technology | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization of intangible assets | 545 | 546 | 1,637 | 1,638 | |
Customer relationships | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization of intangible assets | $ 702 | $ 636 | $ 2,103 | $ 1,907 | |
SunPower’s | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Agreement for exclusive supplier rights, period | 5 years | ||||
SunPower’s | Developed technology, and patents and licensed technology | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization period for acquired intangible assets | 6 years | ||||
SunPower’s | Customer relationships | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization period for acquired intangible assets | 9 years |
WARRANTY OBLIGATIONS - Summary
WARRANTY OBLIGATIONS - Summary of Warranty Activities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Changes in the Company's product warranty liability | |||||
Warranty obligations, beginning of period | $ 37,907 | $ 32,994 | $ 37,098 | $ 31,294 | |
Accruals for warranties issued during period | 1,939 | 1,571 | 4,229 | 3,741 | |
Changes in estimates | 3,869 | 3,884 | 7,294 | 5,387 | |
Settlements | (3,274) | (3,780) | (9,122) | (8,282) | |
Increase due to accretion expense | 832 | 562 | 2,410 | 1,663 | |
Other | 2,506 | (607) | 1,870 | 821 | |
Warranty obligations, end of period | 43,779 | 34,624 | 43,779 | 34,624 | |
Less: current portion | (10,760) | (8,757) | (10,760) | (8,757) | $ (10,078) |
Noncurrent | $ 33,019 | $ 25,867 | $ 33,019 | $ 25,867 | $ 27,020 |
WARRANTY OBLIGATIONS - Narrativ
WARRANTY OBLIGATIONS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Product Warranties Disclosures [Abstract] | ||||
Additional warranty expense | $ 3,869 | $ 3,884 | $ 7,294 | $ 5,387 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) | 9 Months Ended | ||||
Sep. 30, 2020 | May 20, 2020 | Mar. 31, 2020 | Mar. 09, 2020 | Jun. 05, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Warrants obligations measured at fair value | $ 96,400,000 | ||||
Increase in liability as a result of increasing the profit element and risk premium input by 100 basis points | $ 200,000 | ||||
Decrease in liability as a result of decreasing the profit element and risk premium input by 100 basis points | 200,000 | ||||
Decrease in liability as a result of increasing the discount rate by 100 basis points | 1,300,000 | ||||
Increase in liability as a result of decreasing the discount rate by 100 basis points | 1,400,000 | ||||
Convertible Notes | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Convertible notes embedded derivative | 117,100,000 | ||||
Convertible Notes | Convertible Senior Notes Due 2025 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Debt instrument face amount | $ 320,000,000 | ||||
Interest rate | 0.25% | ||||
Convertible notes embedded derivative | 116,300,000 | $ 45,100,000 | $ 68,700,000 | ||
Warrants obligations measured at fair value | $ 96,352,000 | $ 38,637,000 | $ 71,552,000 | ||
Convertible Notes | Convertible Senior Notes Due 2024 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Debt instrument face amount | $ 132,000,000 | ||||
Interest rate | 1.00% | ||||
Level 1 | Money market funds | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Cash and cash equivalents | 651,600,000 | ||||
Level 2 | Recurring | Convertible Notes | Convertible Senior Notes Due 2025 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Notes payable fair value | 506,900,000 | ||||
Level 2 | Recurring | Convertible Notes | Convertible Senior Notes Due 2024 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Notes payable fair value | $ 408,800,000 |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Liabilities: | ||||||
Warranty obligations, current | $ 10,760 | $ 10,078 | $ 8,757 | |||
Warranty obligations, non-current | 33,019 | 27,020 | 25,867 | |||
Total warranty obligations measured at fair value | 43,779 | $ 37,907 | 37,098 | $ 34,624 | $ 32,994 | $ 31,294 |
Recurring | Level 3 | ||||||
Liabilities: | ||||||
Warranty obligations, current | 7,560 | 6,794 | ||||
Warranty obligations, non-current | 18,188 | 13,012 | ||||
Total warranty obligations measured at fair value | 25,748 | 19,806 | ||||
Total liabilities measured at fair value | $ 25,748 | $ 19,806 |
FAIR VALUE MEASUREMENTS - Sch_2
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 - Total warranty obligations measured at fair value - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance at beginning of period | $ 21,132 | $ 14,856 | $ 19,806 | $ 11,757 |
Accruals for warranties issued during period | 1,939 | 1,571 | 4,229 | 3,741 |
Changes in estimates | 1,279 | 2,676 | 2,877 | 3,536 |
Settlements | (1,940) | (2,074) | (5,444) | (4,534) |
Increase due to accretion expense | 832 | 562 | 2,410 | 1,663 |
Other | 2,506 | (607) | 1,870 | 821 |
Balance at end of period | $ 25,748 | $ 16,984 | $ 25,748 | $ 16,984 |
FAIR VALUE MEASUREMENTS - Summa
FAIR VALUE MEASUREMENTS - Summary of Significant Unobservable Inputs used in the Fair Value Measurement of Liabilities Designated as Level 3 (Details) - Recurring - Level 3 - Warranty obligations for microinverters sold since January 1, 2014 | Sep. 30, 2020 | Dec. 31, 2019 |
Profit element and risk premium | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warranty obligations, measurement input | 0.15 | 0.14 |
Credit-adjusted risk-free rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warranty obligations, measurement input | 0.13 | 0.16 |
RESTRUCTURING - Summary of Rest
RESTRUCTURING - Summary of Restructuring Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 0 | $ 469 | $ 0 | $ 1,468 |
Redundancy and employee severance and benefit arrangements | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 0 | 469 | 0 | 1,568 |
Lease loss reserves (benefit) | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring reserve, accrual adjustment | $ 0 | $ 0 | $ 0 | $ (100) |
DEBT - Long-term debt (Details)
DEBT - Long-term debt (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | May 20, 2020 | Mar. 31, 2020 | Mar. 09, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | |||||
Total carrying amount of debt | $ 360,122 | $ 105,543 | |||
Less: current portion of convertible notes and long-term financing receivable recorded as debt | (103,670) | (2,884) | |||
Long-term debt | 256,452 | 102,659 | |||
Convertible Notes | |||||
Debt Instrument [Line Items] | |||||
Convertible notes embedded derivative | $ 117,100 | ||||
Convertible Notes | Convertible Senior Notes Due 2025 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | 320,000 | 0 | |||
Less unamortized discount and issuance costs | (68,510) | 0 | |||
Total carrying amount of debt | 251,490 | 0 | |||
Convertible notes embedded derivative | $ 116,300 | $ 45,100 | $ 68,700 | ||
Convertible Notes | Convertible Senior Notes Due 2024 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | 132,000 | 132,000 | |||
Less unamortized discount and issuance costs | (30,488) | (35,815) | |||
Total carrying amount of debt | 101,512 | 96,185 | |||
Less: current portion of convertible notes and long-term financing receivable recorded as debt | (101,500) | ||||
Convertible Notes | Convertible Senior Notes Due 2023 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | 5,000 | 5,000 | |||
Less unamortized discount and issuance costs | (112) | (143) | |||
Total carrying amount of debt | 4,888 | 4,857 | |||
Financing Receivable | Financing Receivable Recorded as Debt | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 2,232 | $ 4,501 |
DEBT - Convertible Senior Notes
DEBT - Convertible Senior Notes due in 2025 Narrative (Details) | Mar. 09, 2020USD ($)trading_day$ / sharesshares | Jun. 05, 2019USD ($) | Sep. 30, 2020USD ($)$ / sharesshares | Sep. 30, 2019USD ($) | May 20, 2020USD ($)$ / sharesshares | May 19, 2020shares | Mar. 31, 2020USD ($) | Dec. 31, 2019$ / sharesshares |
Debt Instrument [Line Items] | ||||||||
Common stock, par value (in usd per share) | $ / shares | $ 0.00001 | $ 0.00001 | $ 0.00001 | |||||
Common stock, shares authorized (in shares) | shares | 200,000,000 | 200,000,000 | 150,000,000 | 150,000,000 | ||||
Payment for bonds hedge | $ 89,056,000 | $ 36,313,000 | ||||||
Proceeds from sale of warrants | $ 29,800,000 | $ 71,552,000 | $ 29,819,000 | |||||
Warrants obligations measured at fair value | $ 96,400,000 | |||||||
Convertible Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Convertible notes embedded derivative | 117,100,000 | |||||||
Convertible Notes | Convertible Senior Notes Due 2025 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument face amount | $ 320,000,000 | |||||||
Interest rate | 0.25% | |||||||
Conversion ratio | 0.0122637 | |||||||
Debt conversion price (in USD per share) | $ / shares | $ 81.54 | |||||||
Proceeds from convertible debt | $ 313,000,000 | |||||||
Convertible notes embedded derivative | 68,700,000 | 116,300,000 | $ 45,100,000 | |||||
Embedded derivative, host contract | 251,300,000 | |||||||
Debt issuance costs | $ 7,600,000 | |||||||
Effective percentage rate | 5.18% | |||||||
Unamortized discount | $ 61,800,000 | |||||||
Remaining discount amortization period | 4 years 4 months 24 days | |||||||
Conversion shares (in shares) | shares | 3,900,000 | |||||||
Payment for bonds hedge | $ 89,100,000 | |||||||
Warrants issued, strike price (in USD per share) | $ / shares | $ 106.94 | |||||||
Proceeds from sale of warrants | $ 71,600,000 | |||||||
Warrants obligations measured at fair value | $ 71,552,000 | $ 96,352,000 | $ 38,637,000 | |||||
Period One | Convertible Notes | Convertible Senior Notes Due 2025 | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of threshold trading days | trading_day | 20 | |||||||
Number of consecutive trading days | trading_day | 30 | |||||||
Threshold percentage | 130.00% | |||||||
Period Two | Convertible Notes | Convertible Senior Notes Due 2025 | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of consecutive trading days | trading_day | 5 | |||||||
Threshold percentage | 100.00% | |||||||
Measurement period percentage of stock price trigger | 98.00% |
DEBT - Schedule of Convertible
DEBT - Schedule of Convertible Senior Notes due in 2025 (Details) - Convertible Notes - Convertible Senior Notes Due 2025 - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Debt Instrument [Line Items] | ||
Contractual interest expense | $ 200 | $ 449 |
Amortization of debt discount | 3,110 | 6,922 |
Amortization of debt issuance costs | 380 | 848 |
Total interest cost recognized | $ 3,690 | $ 8,219 |
DEBT - Convertible Note Embedde
DEBT - Convertible Note Embedded Derivative (Details) - Convertible Notes - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended |
Mar. 31, 2020 | May 20, 2020 | |
Debt Instrument [Line Items] | ||
Embedded derivative, ending balance | $ 117,100 | |
Convertible Senior Notes Due 2025 | ||
Debt Instrument [Line Items] | ||
Embedded derivative, beginning balance | $ 68,700 | 45,100 |
Embedded derivative, change in the fair value | (23,600) | 71,200 |
Embedded derivative, ending balance | $ 45,100 | $ 116,300 |
DEBT - Convertible Notes Hedge
DEBT - Convertible Notes Hedge and Warrant Liability (Details) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | May 20, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Debt Instrument [Line Items] | ||||||
Convertible notes hedge, change in the fair value | $ 0 | $ 0 | $ (44,348) | $ 0 | ||
Warrants liability, ending balance | $ 96,400 | |||||
Convertible Notes | Convertible Senior Notes Due 2025 | ||||||
Debt Instrument [Line Items] | ||||||
Convertible notes hedge, beginning balance | $ 89,056 | 47,885 | ||||
Convertible notes hedge, change in the fair value | (41,171) | 69,223 | ||||
Convertible notes hedge, ending balance | 47,885 | 117,108 | ||||
Warrants liability, beginning balance | 71,552 | 38,637 | ||||
Warrants liability, change in fair value | (32,915) | 57,715 | ||||
Warrants liability, ending balance | $ 38,637 | $ 96,352 |
DEBT - Convertible Senior Not_2
DEBT - Convertible Senior Notes due 2024 Narrative (Details) $ / shares in Units, shares in Millions | Oct. 27, 2020USD ($) | Mar. 09, 2020trading_day | Jun. 05, 2019USD ($)trading_day$ / sharesshares | Sep. 30, 2020USD ($)trading_day$ / shares | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) |
Debt Instrument [Line Items] | ||||||
Debt, current | $ 103,670,000 | $ 2,884,000 | ||||
Deferred tax assets, net | 88,812,000 | 74,531,000 | ||||
Payment for bonds hedge | 89,056,000 | $ 36,313,000 | ||||
Proceeds from sale of warrants | $ 29,800,000 | 71,552,000 | $ 29,819,000 | |||
Convertible Notes | Convertible Senior Notes Due 2024 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument face amount | $ 132,000,000 | |||||
Interest rate | 1.00% | |||||
Debt conversion price (in USD per share) | $ / shares | $ 20.5010 | |||||
Proceeds from convertible debt | $ 128,000,000 | |||||
Conversion ratio | 0.0487781 | |||||
Debt, current | $ 101,500,000 | |||||
Convertible note, liability component | $ 95,600,000 | |||||
Effective percentage rate | 7.75% | 7.75% | ||||
Convertible note, equity component | $ 36,400,000 | |||||
Deferred tax assets, net | 300,000 | |||||
Debt issuance costs | 4,600,000 | |||||
Unamortized debt issuance costs | 3,300,000 | $ 2,400,000 | 2,900,000 | |||
Debt issuance costs, allocated to capital | $ 1,300,000 | |||||
Unamortized discount | $ 28,000,000 | $ 32,900,000 | ||||
Remaining discount amortization period | 3 years 8 months 12 days | |||||
Conversion shares (in shares) | shares | 6.4 | |||||
Payment for bonds hedge | $ 36,300,000 | |||||
Warrants sold (in shares) | shares | 6.4 | |||||
Warrants issued, strike price (in USD per share) | $ / shares | $ 25.2320 | |||||
Period One | Convertible Notes | Convertible Senior Notes Due 2024 | ||||||
Debt Instrument [Line Items] | ||||||
Number of threshold trading days | trading_day | 20 | 20 | ||||
Number of consecutive trading days | trading_day | 30 | |||||
Stock trigger price (in USD per share) | $ / shares | $ 26.6513 | |||||
Threshold percentage | 130.00% | |||||
Measurement period percentage of stock price trigger | 98.00% | |||||
Period Two | Convertible Notes | Convertible Senior Notes Due 2024 | ||||||
Debt Instrument [Line Items] | ||||||
Number of consecutive trading days | trading_day | 5 | |||||
Threshold percentage | 100.00% | |||||
Forecast | Subsequent Event | Convertible Notes | Convertible Senior Notes Due 2024 | ||||||
Debt Instrument [Line Items] | ||||||
Conversion of debt | $ 5,400,000 |
DEBT - Schedule of Convertibl_2
DEBT - Schedule of Convertible Senior Notes due 2024 (Details) - Convertible Notes - Convertible Senior Notes Due 2024 - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Debt Instrument [Line Items] | ||||
Contractual interest expense | $ 330 | $ 330 | $ 990 | $ 422 |
Amortization of debt discount | 1,645 | 1,523 | 4,828 | 1,939 |
Amortization of debt issuance costs | 166 | 165 | 498 | 210 |
Total interest cost recognized | $ 2,141 | $ 2,018 | $ 6,316 | $ 2,571 |
DEBT - Convertible Senior Not_3
DEBT - Convertible Senior Notes due 2023 Narrative (Details) - Convertible Senior Notes Due 2023 | Jun. 05, 2019USD ($)shares | Aug. 31, 2018USD ($)$ / shares | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
Debt Instrument [Line Items] | ||||
Conversion shares (in shares) | shares | 10,801,080 | |||
Fees paid for repurchase and exchange of convertible notes | $ 6,000,000 | |||
Convertible Notes | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | $ 65,000,000 | $ 5,000,000 | $ 5,000,000 | |
Interest rate | 4.00% | |||
Debt converted | $ 60,000,000 | |||
Debt conversion price (in USD per share) | $ / shares | $ 5.56 | |||
Redemption price percentage | 100.00% | |||
Conversion ratio | 0.180018 |
DEBT - Schedule of Convertibl_3
DEBT - Schedule of Convertible Senior Notes due 2023 (Details) - Convertible Notes - Convertible Senior Notes Due 2023 - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Debt Instrument [Line Items] | ||||
Contractual interest expense | $ 50 | $ 43 | $ 150 | $ 1,176 |
Amortization of debt issuance costs | 10 | 10 | 30 | 235 |
Total interest cost recognized | $ 60 | $ 53 | $ 180 | $ 1,411 |
DEBT - Sale of Long - Term Fina
DEBT - Sale of Long - Term Financing Receivables (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended |
Dec. 31, 2017 | Dec. 31, 2018 | |
Financing Receivable | Financing Receivable Recorded As Debt | ||
Debt Instrument [Line Items] | ||
Proceeds from debt, net of issuance costs | $ 2.8 | $ 5.6 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Line of Credit Facility [Line Items] | ||
Term of lease contract, maximum renewal term | 12 years | |
Purchase obligation | $ 115,100,000 | |
Letters of credit outstanding | 0 | |
Letter of credit | ||
Line of Credit Facility [Line Items] | ||
Line of credit | $ 44,700,000 | |
Section 301 Tariff Refunds | ||
Line of Credit Facility [Line Items] | ||
Potential positive impact of approval of requested Tariff refunds | 39,000,000 | |
Tariff refund | 16,000,000 | |
Tariff refund receivable | 7,000,000 | |
Recognized in current period | 23,000,000 | |
Potential tariff refund receivable | $ 16,000,000 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Lease Expense Components (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Operating lease costs | $ 1,274 | $ 1,161 | $ 3,776 | $ 2,909 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Lease Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease liabilities, current (Accrued liabilities) | $ 4,245 | $ 3,170 |
Operating lease liabilities, noncurrent (Other liabilities) | 12,417 | 9,542 |
Total operating lease liabilities | $ 16,662 | $ 12,712 |
Weighted average remaining lease term | 5 years 7 months 6 days | 5 years 6 months |
Weighted average discount rate | 8.10% | 8.60% |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES - Supplemental Cash Flow and Other Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Operating cash flows from operating leases | $ 1,252 | $ 1,019 | $ 3,411 | $ 2,613 |
Lease liabilities arising from obtaining right-of-use assets | $ 3,798 | $ 0 | $ 6,739 | $ 4,834 |
COMMITMENTS AND CONTINGENCIES_5
COMMITMENTS AND CONTINGENCIES - Schedule of Minimum Lease Payments Under Noncancelable Operating Leases (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
2020 (remaining three months) | $ 1,345 | |
2021 | 5,436 | |
2022 | 4,155 | |
2023 | 3,518 | |
2024 | 2,523 | |
2025 and thereafter | 2,686 | |
Total lease payments | 19,663 | |
Less: imputed lease interest | (3,001) | |
Total lease liabilities | $ 16,662 | $ 12,712 |
STOCK-BASED COMPENSATION - Summ
STOCK-BASED COMPENSATION - Summary of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | $ 14,399 | $ 5,776 | $ 34,214 | $ 14,000 |
Total unrecognized compensation cost | 74,700 | $ 74,700 | ||
Weighted-average recognition period for unrecognized compensation cost | 2 years 2 months 12 days | |||
Cost of revenues | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 1,294 | 497 | $ 3,237 | 1,114 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 4,248 | 1,411 | 9,430 | 3,255 |
Sales and marketing | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 3,952 | 1,541 | 9,504 | 3,900 |
General and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 4,905 | 1,996 | 12,043 | 5,013 |
Restructuring | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | $ 0 | $ 331 | $ 0 | $ 718 |
STOCK-BASED COMPENSATION - Su_2
STOCK-BASED COMPENSATION - Summary of Stock-Based Compensation Expense Associated with Each Type of Award (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 14,399 | $ 5,776 | $ 34,214 | $ 14,000 |
Stock options and RSUs and PSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 13,781 | 5,546 | 32,415 | 13,528 |
Employee stock purchase plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 618 | $ 230 | $ 1,799 | $ 472 |
STOCK-BASED COMPENSATION - Su_3
STOCK-BASED COMPENSATION - Summary of the Weighted-Average Grant Date Fair Value of Options Granted (Details) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
The fair value of each option granted during the periods | ||||
Grants in period (in shares) | 0 | 0 | 11,000 | |
Stock options | ||||
The fair value of each option granted during the periods | ||||
Weighted average grant date fair value (in usd per share) | $ 38.45 | $ 9.16 | ||
Expected term | 3 years 9 months 18 days | 3 years 9 months 18 days | ||
Expected volatility | 86.40% | 89.10% | ||
Annual risk-free rate of return | 0.10% | 2.10% | ||
Dividend yield | 0.00% | 0.00% |
STOCK-BASED COMPENSATION - Su_4
STOCK-BASED COMPENSATION - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | |
Number of Shares Outstanding | |||
Outstanding, beginning balance (in shares) | 4,097,000 | ||
Granted (in shares) | 0 | 0 | 11,000 |
Exercised (in shares) | (1,062,000) | ||
Canceled (in shares) | (82,000) | ||
Outstanding, ending balance (in shares) | 2,964,000 | 2,964,000 | |
Shares outstanding, vested and expected to vest (in shares) | 2,964,000 | 2,964,000 | |
Shares outstanding, exercisable (in shares) | 2,349,000 | 2,349,000 | |
Weighted- Average Exercise Price per Share | |||
Outstanding, beginning balance (in usd per share) | $ 2.18 | ||
Granted (in usd per share) | 64.17 | ||
Exercised (in usd per share) | 2.41 | ||
Canceled (in usd per share) | 6.94 | ||
Outstanding, ending balance (in usd per share) | $ 2.19 | 2.19 | |
Weighted-average exercise price, vested and expected (in usd per share) | 2.19 | 2.19 | |
Weighted-average exercise price, exercisable (in usd per share) | $ 2.22 | $ 2.22 | |
Weighted-Average Remaining Contractual Term | |||
Outstanding | 3 years 9 months 18 days | ||
Vested and expected to vest | 3 years 9 months 18 days | ||
Exercisable | 3 years 8 months 12 days | ||
Aggregate Intrinsic Value | |||
Exercised | $ 56,357 | ||
Outstanding | $ 238,224 | 238,224 | |
Vested and expected to vest | 238,224 | 238,224 | |
Exercisable | $ 188,809 | $ 188,809 | |
Share price (in usd per share) | $ 82.59 | $ 82.59 |
STOCK-BASED COMPENSATION - Su_5
STOCK-BASED COMPENSATION - Summary of Stock Options Outstanding (Details) shares in Thousands | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Options outstanding, number of shares (shares) | shares | 2,964 |
Options outstanding - weighted- average remaining life | 3 years 9 months 18 days |
Options outstanding - weighted- average exercise price (usd per share) | $ 2.19 |
Options exercisable - number of shares exercisable (shares) | shares | 2,349 |
Options Exercisable - weighted-average exercise price (usd per share) | $ 2.22 |
$0.70 —– $1.11 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price range, lower limit (usd per share) | 0.70 |
Exercise price range, upper limit (usd per share) | $ 1.11 |
Options outstanding, number of shares (shares) | shares | 687 |
Options outstanding - weighted- average remaining life | 4 years 3 months 18 days |
Options outstanding - weighted- average exercise price (usd per share) | $ 0.82 |
Options exercisable - number of shares exercisable (shares) | shares | 554 |
Options Exercisable - weighted-average exercise price (usd per share) | $ 0.82 |
$1.29 —– $1.29 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price range, lower limit (usd per share) | 1.29 |
Exercise price range, upper limit (usd per share) | $ 1.29 |
Options outstanding, number of shares (shares) | shares | 1,000 |
Options outstanding - weighted- average remaining life | 4 years |
Options outstanding - weighted- average exercise price (usd per share) | $ 1.29 |
Options exercisable - number of shares exercisable (shares) | shares | 750 |
Options Exercisable - weighted-average exercise price (usd per share) | $ 1.29 |
$1.31 —– $1.31 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price range, lower limit (usd per share) | 1.31 |
Exercise price range, upper limit (usd per share) | $ 1.31 |
Options outstanding, number of shares (shares) | shares | 709 |
Options outstanding - weighted- average remaining life | 3 years 6 months |
Options outstanding - weighted- average exercise price (usd per share) | $ 1.31 |
Options exercisable - number of shares exercisable (shares) | shares | 563 |
Options Exercisable - weighted-average exercise price (usd per share) | $ 1.31 |
$1.37 —– $14.58 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price range, lower limit (usd per share) | 1.37 |
Exercise price range, upper limit (usd per share) | $ 14.58 |
Options outstanding, number of shares (shares) | shares | 557 |
Options outstanding - weighted- average remaining life | 3 years 1 month 6 days |
Options outstanding - weighted- average exercise price (usd per share) | $ 5.44 |
Options exercisable - number of shares exercisable (shares) | shares | 479 |
Options Exercisable - weighted-average exercise price (usd per share) | $ 5.96 |
$64.17 —– $64.17 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price range, lower limit (usd per share) | 64.17 |
Exercise price range, upper limit (usd per share) | $ 64.17 |
Options outstanding, number of shares (shares) | shares | 11 |
Options outstanding - weighted- average remaining life | 6 years 7 months 6 days |
Options outstanding - weighted- average exercise price (usd per share) | $ 64.17 |
Options exercisable - number of shares exercisable (shares) | shares | 3 |
Options Exercisable - weighted-average exercise price (usd per share) | $ 64.17 |
STOCK-BASED COMPENSATION - Su_6
STOCK-BASED COMPENSATION - Summary of Restricted Stock Unit Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | |
Aggregate Intrinsic Value | |
Share price (in usd per share) | $ 82.59 |
Restricted stock units | |
Number of Shares Outstanding | |
Outstanding, beginning balance (in shares) | shares | 4,263 |
Granted (in shares) | shares | 1,262 |
Vested (in shares) | shares | (1,705) |
Canceled (in shares) | shares | (84) |
Outstanding, ending balance (in shares) | shares | 3,736 |
Number of shares outstanding, expected to vest (in shares) | shares | 3,736 |
Weighted Average Fair Value per Share at Grant Date | |
Outstanding, beginning balance (in usd per share) | $ 7.19 |
Granted (in usd per share) | 40.76 |
Vested (in usd per share) | 6.87 |
Canceled (in usd per share) | 20.78 |
Outstanding, ending balance (in usd per share) | 18.37 |
Weighted-Average Fair Value per Share at Grant Date, Expected to vest (in usd per share) | $ 18.37 |
Weighted-Average Remaining Contractual Term | |
Weighted- Average Remaining Contractual Term | 1 year 1 month 17 days |
Expected to vest | 1 year 1 month 17 days |
Aggregate Intrinsic Value | |
Vested | $ | $ 78,855 |
Outstanding | $ | 308,555 |
Aggregate intrinsic value, expected to vest | $ | $ 308,555 |
STOCK-BASED COMPENSATION - Su_7
STOCK-BASED COMPENSATION - Summary of Performance Stock Unit Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | |
Aggregate Intrinsic Value | |
Share price (in usd per share) | $ 82.59 |
Performance shares | |
Number of Shares Outstanding | |
Outstanding, beginning balance (in shares) | shares | 955 |
Granted (in shares) | shares | 989 |
Vested (in shares) | shares | (1,450) |
Canceled (in shares) | shares | 0 |
Outstanding, ending balance (in shares) | shares | 494 |
Weighted Average Fair Value per Share at Grant Date | |
Outstanding, beginning balance (in usd per share) | $ 9.83 |
Granted (in usd per share) | 31.12 |
Vested (in usd per share) | 10.20 |
Canceled (in usd per share) | 0 |
Outstanding, ending balance (in usd per share) | $ 51.10 |
Weighted-Average Remaining Contractual Term | |
Weighted- Average Remaining Contractual Term | 4 months 24 days |
Aggregate Intrinsic Value | |
Vested | $ | $ 52,144 |
Outstanding | $ | $ 40,793 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Income taxes (benefit) provision | $ 5,483 | $ 272 | $ (12,946) | $ 1,211 |
Income before income taxes | $ 44,845 | $ 31,371 | $ 48,058 | $ 45,693 |
NET INCOME PER SHARE - Schedule
NET INCOME PER SHARE - Schedule of Computation of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Numerator: | ||||
Net income | $ 39,362 | $ 31,099 | $ 61,004 | $ 44,482 |
Notes due 2023 interest and financing costs, net | 44 | 39 | 133 | 1,046 |
Adjusted net income | $ 39,406 | $ 31,138 | $ 61,137 | $ 45,528 |
Denominator: | ||||
Weighted average common shares outstanding (in shares) | 126,109 | 122,123 | 125,084 | 114,720 |
Employee stock-based awards (in shares) | 6,330 | 9,200 | 7,123 | 8,937 |
Weighted average common shares outstanding for diluted calculation (in shares) | 141,820 | 133,611 | 140,207 | 131,114 |
Net income per share, basic (in USD per share) | $ 0.31 | $ 0.25 | $ 0.49 | $ 0.39 |
Net income per share, diluted (in USD per share) | $ 0.28 | $ 0.23 | $ 0.44 | $ 0.35 |
Convertible Senior Notes Due 2024 | ||||
Denominator: | ||||
Warrants (issued in conjunction with Notes due 2024) (in shares) | 4,013 | 100 | 3,251 | 0 |
Convertible Notes | Convertible Senior Notes Due 2024 | ||||
Denominator: | ||||
Notes due (in shares) | 4,468 | 1,288 | 3,849 | 385 |
Convertible Notes | Convertible Senior Notes Due 2023 | ||||
Denominator: | ||||
Notes due (in shares) | 900 | 900 | 900 | 7,072 |
NET INCOME PER SHARE - Schedu_2
NET INCOME PER SHARE - Schedule of Potentially Dilutive Securities Excluded from the Computation of Diluted Net Income Per Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 3,232 | 11 | 4,354 | 112 |
Employee stock-based awards | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 36 | 11 | 64 | 112 |
Warrants | Convertible Senior Notes Due 2025 | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 2,342 | 0 | 2,832 | 0 |
Notes due | Convertible Senior Notes Due 2025 | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 854 | 0 | 1,458 | 0 |
NET INCOME PER SHARE - Narrativ
NET INCOME PER SHARE - Narrative (Details) - Convertible Notes - $ / shares | Mar. 09, 2020 | Jun. 05, 2019 |
Convertible Senior Notes Due 2024 | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Debt conversion price (in USD per share) | $ 20.5010 | |
Convertible Senior Notes Due 2025 | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Debt conversion price (in USD per share) | $ 81.54 |
RELATED PARTY - Narrative (Deta
RELATED PARTY - Narrative (Details) - Convertible Notes - Convertible Senior Notes Due 2023 - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Aug. 31, 2018 |
Related Party Transaction [Line Items] | ||||
Debt instrument face amount | $ 5,000,000 | $ 5,000,000 | $ 65,000,000 | |
Thurman John Rodgers | ||||
Related Party Transaction [Line Items] | ||||
Debt instrument face amount | $ 5,000,000 | $ 5,000,000 | $ 5,000,000 |