ENPH 10-K & 10-Q changes, risk factors and insider trading

InOutside addition,the United States, several European countries, including Germany, Belgium, Italy, the NetherlandsAustria and the United Kingdom,Netherlands, have adopted reductions in or ended their NEM or FiT programs. Certain countries have proposed or enacted higher grid fees or taxes levied on renewable energy. These and related developments have significantly impacted the solar industry in Europe and may adversely affect the future demand for solar energy solutions in Europe,those which could adversely impact our results of operations.markets.

Among other government-established incentives, NEM and related policies have supported the growth of on-grid rooftop solar products, and changes to such policies may reduce demand for electricity from our solar service offerings. NEM is a tariffed utility rate program that permits a consumer to sell the excess solar energy that the consumer’s solar panels produce to the electric utility company at a predetermined price. The most basic type of NEM tariff pays consumers the retail rate for electricity that their solar panels export to the grid, less certain “non-bypassable” fees paid by the consumer. However, certain states have sought to move away from retail rate NEM crediting for compensating excess solar generation. For example, in DecemberCalifornia, 2022,CPUC approved NEM 3.0, which substantially reduced the CPUC adopted a “NEM 3.0” policy, also known as the Net Billing Tariff,compensation that unbundlessolar exportcustomers compensationcan from retail rates and instead bases it on a tool called the Avoided Cost Calculator (“ACC”), which estimates the utility costs that are avoidedearn by exportsselling from distributed generation for each hour of the year. The CPUC did seek to ease the transition for theexcess solar market by adopting small “adders”energy to the electric grid. The average hourly ACC export valuesrate forunder NEM 3.0 is approximately $0.05/kWh to $0.08/kWh compared to the firstprior several yearsaverage of the$0.25/kWh tariff.to Nevertheless,$0.35/kWh theseunder ACC-basedNEM export compensation values are significantly lower than retail rates for most hours of the year and may therefore increase payback periods, and thereby reduce demand, for solar-only systems. Similarly, in November 2023, the2.0. CPUC also adopted changes to its “Virtual NEM” and “NEM Aggregation” programs that prohibit multi-meter commercial or agricultural property owners from netting solar energy generated at or adjacent to those properties against import charges recorded on the meters at the property, except for residential account holders in a multi-family residential property. These types of modifications to NEM policies have impacted and could further harm our business, both in California, where we have derived a significant portion of historical revenues in the United States, and in other state and national jurisdictions,jurisdictions if pursuedsimilar there.changes are adopted.

Reductions in, or eliminations or expirations of, governmental incentives (including the ITC) or NEM policies in regions where we focusBecause our sales efforts could result in decreased demand for and lower revenue from solar PV systems, which would adversely affectcustomers’ sales of solar power are typically into the on-grid market, the reduction, elimination or expiration of government subsidies and economic incentives for on-grid solar electricity may negatively affect the competitiveness of rooftop solar electricity relative to centralized sources of electricity (including from conventional thermal or utility-scale renewable generation) and could harm or halt the growth of the solar electricity industry and our products.business. In addition, our ability to successfully penetrate new geographic markets may depend on new countries adopting and maintaining tax credits, tax incentives, NEM policies, or other programs to promote solar electricity and storage, to the extent such incentives or programs are not currently in place. Furthermore, electric utility companies may establish rate structures or interconnection requirements that could be harmful to the solar industry and adversely affect our sales.sales and our overall business.

Competitors in the inverter market include, among others, SolarEdge, Huawei, Tesla, Sungrow Power Supply Co., Ltd., Growatt New Energy Co., Ltd and other companies offering string inverters with and without solar optimizers. Competitors in the storage market include Tesla, SolarEdge, Huawei, BYD, Franklin Solar Battery, and other producers of battery cells and integrated storage systems market. Competitors in the EV charger market include Wallbox, ChargePoint, Tesla, JuiceBoxTesla and EVBox,EVBox Group, among others.

Several of our existing and potential competitors are significantly larger than we are and may have greater financial, marketing, distribution and customer support resources and may have significantly broader brand recognition, especially in certain markets. In addition, some of our competitors have more resources and experience in developing or acquiring new products and technologies and creating market awareness for these offerings. Further, certain competitors may be able to develop new products more quickly than we can and may be able to develop products that are more reliable or that provide more functionality than ours. In addition, some of our competitors have the financial resources to offer competitive products at aggressive or below-market pricing levels, which may have caused and could in the future cause us to lose sales or market share or require us to lower prices of our products in order to compete effectively. Suppliers of solar products, particularly solar modules, have experienced eroding prices over the last several years and as a result many have faced margin compression and Enphase Energy, Inc. | 2025 Form 10-K | 20 declining revenues. If we have to reduce our prices, or if we are unable to offset any future reductions in our average selling prices (“ASPs”) by increasing our sales volume, reducing our costs and expenses or introducing new products, our revenue and gross profit would suffer.

We currently offer solar energy systems targeting the residential and commercial markets throughout the world, and we intend to continue to expand into other international markets. Our success in new geographic and product markets will depend on a number of factors, such as:

A disruption could also occur in one of our contract manufacturers’ facilities due to any number of reasons, such as equipment failurefailure, contaminated materials, process deviations, the effects of climate change and related extreme weather events, or social, geopolitical or health factors, including pandemics or widespread health epidemics such as the COVID-19 pandemic, which could adversely impact manufacturing yields or delay product shipments. In addition, we may face periods of constrained supply for key components necessary for the manufacture of our products. A constrained supply environment could affect component availability, lead times and cost and could increase the likelihood of unexpected cancellations or delays of previously committed supply of key components. As a result, we could incur additional costs that would adversely affect our gross profit, and product shipments to our customers could be delayed beyond the schedules requested, which would negatively affect our revenue, competitive position and reputation.

Our customers’ decisions to purchase our products are influenced by a number of factors outside of our control, including, among others, retail energy prices, the macroeconomic environment, government regulation, incentives and liquidity constraints of solar installers. Although we have agreements with our customers, these agreements generally do not have long-term purchase commitments and are generally terminable by either party after a relatively short notice period. In addition, these customers may decide to no longer use, or to reduce the use of, our products and services for other reasons that may be out of our control. We may also be affected by events impacting our large customers that result in them decreasing their orders with us or impairing their ability to pay for our products, whether due to a decrease in demand from the end markets they serve or the deterioration in the financial condition or bankruptcy of any such customer or the solar installers they resell to, or a significant decrease in their business. During the year ended December 31, 2024, one of our customers filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code. We evaluated the carrying amount of a customer intangible asset related to that customer and determined that the carrying amount of the asset as of December 31, 20242025 is recoverable. Additionally,However, netthe accounts receivable related to that customer of allowance$6.2 formillion creditwas losseswritten-off asduring ofthe year ended Enphase Energy, Inc. | 2025 Form 10-K | 25 December 31, 2024, included $6.2 million that relates to the one customer.2025. We regularly monitor and evaluate the credit status of our customers and attempt to adjust sales terms as appropriate, which may not be successful. The loss of, or events affecting, any of our large customers has had from time to time, and could in the future have a material adverse effect on our business, financial condition and results of operations.

We design and make complex products and they may contain undetected or latent errors or defects. Complex hardware and software systems, such as our products, can often contain undetected errors when first introduced or as new versions are released. In the past, we have experienced latent defects only discovered once the microinverters or batteries are deployed in the field. Changes in our supply chain or the failure of our suppliers to otherwise provide our Texas manufacturing facility or our third-party contract manufacturers with components or materials that meet our specifications could introduce defects into our products. As we grow our product volumes, the chance of manufacturing defects could increase. In addition, new product introductions or design changes made for the purpose of cost reduction, performance improvement or improved reliability could introduce new design defects that may impact the performance and life of our products. Any design or manufacturing defects or other failures of our products to perform as expected could cause us to incur significant service and re-engineering costs, divert the attention of our engineering personnel from product development efforts and significantly and adversely affect installer and customer satisfaction, market acceptance and our business reputation. Furthermore, if we are unable to correct manufacturing defects or other failures of products in a manner satisfactory to our customers, our results of operations, customer satisfaction and our business reputation could be adversely affected.

If we fail to retain our key personnel or if we fail to attract additional qualified personnel, we may not be able to maintain or achieve our anticipated level of growth and our business could suffer.

All of our employees, including our senior management, are free to terminate their employment relationships with us at any time. Competition for highly skilled executives and employees in the technology industry is intense, and our competitors have targeted individuals in our organization that have desired skills and experience. If we are not able to continue to attract, train and retain our leadership team and our qualified employees necessary for our business, the progress of our product development programs could be hindered, and we could be materially adversely affected. To help attract, retain and motivate our executives and qualified employees, we use stock-based incentive awards, including restricted stock units. If the value of such stock awards does not appreciate as measured by the performance of the price of our common stock, or if our share-based compensation otherwise ceases to be viewed as a valuable benefit, our ability to attract, retain and motivate our executives and employees could be weakened, which could harm our business and results of operations. Also, if the value of our stock awards Enphase Energy, Inc. | 2025 Form 10-K | 26 increases substantially, this could potentially create substantial personal wealth for our executives and employees and affect our ability to retain our personnel. In addition, any restructuring plans may adversely impact our ability to attract and retain key employees.

We have taken steps, including reducing our global workforce, streamlining our operations and internal reorganizations, to increase operational efficiencies and execution, reduce operating costs, and better align our workforce and cost structure with current market condition.conditions. We may take similar steps in the future as we seek to realize operating synergies, meet our strategic priorities and profitability objectives, or to reflect more closely changes in our business needs. These changes could be disruptive to our business, including our research and development efforts, and could result in significant expense, including accounting charges for inventory and technology-related write-offs, workforce reduction costs and charges relating to consolidation of excess facilities. Substantial expense or charges resulting from restructuring activities could adversely affect our results of operations and use of cash in those periods in which we undertake such actions.

Our business has experienced periods of rapid growth,growth in the past, and in the future, we may continue to grow our business rapidly. Growth in our business could place significant demands on our management, operations, systems, accounting, internal controls and financial resources, and it may also negatively impact our ability to retain key personnel. If we experience difficulties in any of these or other areas, we may not be able to expand our business successfully or effectively manage our growth. Any failure by management to manage our growth and to respond to changes in our business could have a material adverse effect on our business, financial condition and results of operations.

If we are unsuccessful in continuing to expand our direct-to-consumer sales channel by driving purchases through our website,website or third-party websites, our business and results of operation could be harmed.

Although we primarily sell our solutions and products directly to solar distributors, who resell to installers and integrators, and the developers of third-party solar financing offerings, who then in turn integrate our products into complete solar PV installations for residential and commercial system owners, we have recently invested significant resources in our direct-to-consumer sales channel through our website,website and third-party websites, and our future growth relies, in part, on our ability to attract consumers through this channel. Expanding our direct-to-consumer sales model will require significant expenditures in marketing, software development and infrastructure. Further, the success of direct-to-consumer sales through our website is also subject to general business regulations and laws, as well as federal, state, foreign and provincial regulations and laws specifically governing the internet and e-commerce.e- Enphase Energy, Inc. | 2025 Form 10-K | 27 commerce. These regulations and laws may cover taxation, tariffs, privacy, data protection, pricing, distribution, electronic contracts and other communications, consumer protection and intellectual property. These laws and regulations can be complex, difficult to interpret and may change over time. Continued regulatory limitations and other obstacles interfering with our ability to sell our products directly to consumers could have a negative and material impact our business, prospects, financial condition and results of operations.

We are dependent on information technology systems, infrastructure and data. We or third parties upon whichwhom we relyinteract with could be subject to breaches of our information technology systems caused by system security risks, failure of our data protection, cyber-attacks and erroneous or non-malicious actions or failures to act by our employees or others with authorized access to our networks,others, which could cause significant reputational, legal and financial damages.

Like many companies, in the ordinary course of business we process, useuse, transfer, generate, disclose, secure, transmit and store a wide variety of confidential and proprietary information including personal information and other sensitive information relating to our business, products and services. The secure maintenance of this information is critical to our business and reputation. Despite our implementation of security measures, our systems are vulnerable to damages from computer viruses, computer denial-of-service attacks, ransomware, supply chain attacks, worms and other malicious software programs or other attacks, covert introduction of malware to computers and networks, unauthorized access, including impersonation of authorized users, social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), efforts to discover and exploit any security vulnerabilities or securities weaknesses and other similar issues and disruptions. In particular, severe ransomware attacks are becoming increasingly prevalent – particularly for companies like ours that interact with critical infrastructure or manufacturing – and can lead to significant interruptions in our operations, and ability to provide our products or services. Although we make significant efforts to maintain the security, availability,confidentiality, integrity and confidentialityavailability of our information technology and related systems Enphase Energy, Inc. | 2024 Form 10-K | 26 and have implemented measures to manage the risk of a security breach or disruption, there can be no assurance that our security efforts and measures will be effective, or that attempted security breaches or disruptions would not be successful or damaging.

Remote work hasfor becomesome moreworkers common and haspresents increased risks to our information technology and related systems, as morethese of our employeesworkers utilize network connections, computers and devices outside our premises or network, including working at home, while in transit and in public locations.

The techniques used in attempted cyber-attacks and intrusions are sophisticated and constantly evolving and may be difficult to detect for long periods of time. Recent techniques include artificial intelligence (“AI”) tools and coordinated attacks, which increases the volume and sophistication of cybersecurity attacks. We may be unable to anticipate these techniques or implement adequate preventative measures. Although to date we haveare not experiencedaware of any material breaches of our systems that could have material adverse effect on our business, attacks and intrusions on our systems will continue and we may experience a breach of our systems that compromises sensitivevaluable company information or customer data including personal information. In addition, hardware, software, or applications we develop or procure from third parties may contain defects in design or manufacture or other problems that could unexpectedly compromise information security. Intentional or non-malicious breaches by employees or others may pose a risk that sensitivevaluable data, including our intellectual property, trade secrets or personal information of our employees, customers or users, or other business partners may be exposed to unauthorized persons or to the public, or that risks of loss or misuse of this information could occur. Furthermore, if we experience a significant data security breach, we could be exposed to reputational damage and significant costs, including to rebuild our systems, modify our products and services, defend litigation, respond to government enforcement actions, pay damages or take other remedial steps, any of which could adversely affect our business, results of operations and financial condition. In addition, we may be required to incur significant costs to protect against Enphase Energy, Inc. | 2025 Form 10-K | 28 damage caused by these disruptions or security breaches in the future. These risks, as well as the number and frequency of cybersecurity events globally, may also be heightened during times of geopolitical tension or instability.

We are a global energy technology company. We deliver smart, easy-to-use solutions that manage solar generation, storage and communication on one platform. Our intelligent microinverters work with virtually every solar panel made, and when paired with our smart technology, result in one of the industry’s best-performing clean energy systems. As of December 31, 2024,2025, we have shipped approximately 80.086.4 million microinverters, and approximatelymore 4.7than 5.1 million Enphase residential and commercial systems have been deployed in more thanover 160 countries.

We sell primarily to solar distributors who combine our products with others, including solar module products and racking systems, and resell to installers in each target region. In addition to our solar distributors, we sell directly to select large installers, OEMs and strategic partners. Our OEM customers include solar module manufacturers who integrate our microinverters with their solar module products and resell to both distributors and installers. Strategic partners include providersa variety of companies, including industrial equipment suppliers, module companies, energy suppliers and developers of third-party solar financingfinance solutions.offerings (such as TPOs). We also sell certain products and services to homeowners primarily in support of our warranty services and legacy product upgrade programs, via our online store.

To reducemitigate supply chain riskrisks and taketariff advantageexposure and to leverage U.S. manufacturing incentives, we continued to operate our domestic manufacturing footprint, including our in‑house manufacturing facility and our partnership with Flex. These arrangements maintained a combined manufacturing capacity of newapproximately incentives for domestic manufacturing, we expanded our operations with contract manufacturers in the United States with a capacity to produce five millionfive-million microinverters per quarter. Beginning in the second half of 2024, we began shipping residential and commercial microinverters,microinverters and batteries,batteries with higher domestic content from our U.S. contractmanufacturing manufacturers,facilities, which are expected to help certain solar and battery projects qualify for the domestic content bonus tax credit. The domestic content bonus tax credit is only available to commercial asset owners, which includes commercial businesses adding solar and PPApower purchase agreements/lease providers who own residential solar projects.

Global Events Affecting our Business and Operations

We generate revenue from the sale of our various solutions,products, which include microinverter units and related accessories, IQ Battery and related accessories, IQ PowerPack 1500 and related accessories, EV charging solutions, IQ Combiner, IQ Gateway and IQ Energy Router, as well as from the sale of services, which include cloud-based monitoring services, EV charging solutions, design, proposal, permitting, installation and leadsolar appointment generation services, as well as a platform matching cleantech asset owners to a local and on-demandEnphase workforceCare of service providers, distributors, large installers, OEMs and strategic partners.services.

Our revenue is affected by changes in the volume and average selling prices (“ASPs”) of our various solutions and related accessories, supply and demand, sales incentives, government incentives and competitive product offerings. Our revenue growth is dependent on our ability to compete effectively in the marketplace by remaining cost competitive, macroeconomic conditions, favorable regulatory environment, developing and introducing new products that meet the changing technology,technology and the performance requirements of our customers, the diversification and expansion of our revenue base, and our ability to market our products in a manner that increases awareness for microinverter technology and differentiates us in the marketplace.

Cost of revenues is comprised primarily of product costs, warranty, manufacturing and installation servicesservices, support personnel, logistics costs, freight costs, inventory write-downs, hosting services costs related to our cloud-based monitoring services, depreciation of manufacturing and test equipment, amortization of capitalized software development costs related to our cloud-based monitoring services, lead acquisition costs and design and proposal services, employee-related expenses associated with proposal and permitting services and design and proposal service customer support. AMPTC earned under the IRA for U.S. manufactured microinverters shipped to customers in the years ended December 31, 2024 and 2023 are treated as a reduction to cost of revenues.

Our product costs are impacted by technological innovations, such as advances in semiconductor integration and new product introductions, economies of scale resulting in lower component costs, and improvements in production processes and automation. Certain costs, primarily personnel and depreciation and amortization of test equipment and capitalized software development costs, are not directly affected by sales volume.

We outsource some of our manufacturing to third-party contract manufacturers and generally negotiate product pricing with them on a quarterly basis. We believe our contract manufacturing partners have sufficient production capacity to meet the anticipated demand for our products for the foreseeable future. However, shortages in the supply of certain key raw materials could adversely affect our ability to meet customer demand for our products. We contract with third parties, including one of our contract manufacturers, to serve as our logistics providers by warehousing and delivering our products in the United States, Canada, Mexico, Europe, Australia, New Zealand, India, Brazil, the Philippines, Thailand, South Africa, and certain other Central American and Asian countries.

Sales and marketing expense includes personnel-related expenses, travel, trade shows, marketing, customer support and other indirect costs. We expect to continue to make the necessary investments to enable us to execute our strategy to increase our market penetration geographically and enter into new markets by expanding our customer base of distributors, large installers, OEMs and strategic partners. We currently offer solutions targeting the residential and commercial markets in the United States, Canada, Mexico, Puerto Rico, Europe, Australia, New Zealand, India, Brazil, the Philippines, Thailand, South Africa, Central America, the Caribbean and certain Asian countries. We expect to continue to expand the geographic reach of our product offerings and explore new sales channels in addressable markets in the future.

General and administrative expense includes personnel-related expenses for our executive, finance, human resources, information technology and legal organizations, facilities costs, and fees for professional services. Fees for professional services consist primarily of outsideexternal legal, accounting and information technology consulting costs.

Restructuring and asset impairment charges are the net charges resulting from restructuring initiatives implemented in 2022, 2023 and 2024 to increase operational efficiencies and execution, reduce operating costs, and better align our workforce and cost structure with current market conditions, as well as reflect our business needs, strategic priorities and ongoing commitment to profitable growth. Charges from the restructuring initiatives primarily consisted of employee severance and one-time benefits, workforce reorganization charges, contract termination charges, and asset impairment charges. Refer to Note 12.11. “Restructuring and Asset Impairment Charges,” of the notes to consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information.

Other income, netnet, primarily consists of interest income on our cash, cash equivalents, restricted cash and marketable securities, amortization of discount or premium on purchase of cash equivalents and marketable securities, gains or losses upon conversion of foreign currency transactions into U.S. dollars, interest expense, changes in fair value of contingent consideration, non-cash interest expense related to the accretion of debt discount and amortization of deferred financing costs, non-cash charges recognized for loss on partial settlement of convertible notes, and the change in fair value of our debt securities.investment in public and private companies.

Net revenues decreasedincreased by $960.4$142.6 million, or 42%,11%, in the year ended December 31, 2024,2025, as compared to the same period in 2023,2024, driven primarily by a 58%36% increase in IQ Batteries MWh shipped, partially offset by a 2% decrease in microinverter units shipped, partially offset by an increase in ASP for our microinverters as we sold more IQ8 microinverters relative to IQ7 microinverters.sold. During the year ended December 31, 2024,2025, we sold approximately 6.5 million microinverter units, as compared to approximately 15.56.4 million microinverter units in the year ended December 31, 2023. The decrease in net revenues was also partially offset by a 48% increase in IQ Batteries MWh shipped. During the year ended December 31, 2024, weand shipped 521.0706.1 MWh of IQ Batteries, as compared to 351.6approximately 6.5 million microinverter units and 521 MWh of IQ Batteries shipped in the year ended December 31, 2023.2024.

Cost of revenues decreasedincreased by $531.2$84.7 million, or 43%,12%, infor the year ended December 31, 2024,2025, as compared to the same period in 2023,2024. This increase was primarily duedriven toby theincreased lower volumeMWh of microinverterIQ unitsBatteries sold,shipped, ashigher welltariffs asand fromindirect themanufacturing benefitcosts. This increase in cost of revenues was partially offset by benefits recognized from tax credits of $157.5 million under the AMPTC for U.S. manufactured microinverters and IQ Batteries MWh shipped to customerscustomers. inThe AMPTC benefits recognized were $238.7 million for the year ended December 31, 2024,2025, as compared to cost of revenues of $53.5$157.5 million infor the same period in 2023. The benefit recognized from the AMPTC was partially offset by $38.3 million and $11.6 million of incremental cost for manufacturing in the United States in the year ended December 31, 2024 and December 31, 2023, respectively, thereby providing a Net IRA benefit of $119.2 million and $41.9 million, respectively.2024.

Gross margin increaseddecreased by 1.10.7 percentage points in the year ended December 31, 2024,2025, as compared to the same period in 2023.2024. The increasedecrease was primarily due to product mix and increased tariff costs, partially offset by the recognition of a 9.016.2 percentage point of Net IRAAMPTC benefit in the year ended December 31, 2024,2025, as compared to a 1.811.8 percentage point Net IRAAMPTC benefit in the same period in 2023,2024, due to a higher proportion of sales from U.S. manufactured microinverters and anIQ increaseBattery inMWh ASP for microinverters, partially offset by product mix and relatively higher fixed overhead costs.shipped.

Research and development expense decreased by $26.0$12.2 million, or 11%,6%, in the year ended December 31, 2024,2025, as compared to the same period in 2023.2024. The decrease was primarily due to actions implemented in connection with the restructuring initiatives implemented inat 2023the andend of 2024 that lowered personnel-related expenses by $16.2 million due to a reduction in headcount by $7.7 million and lowered equipmentequipment, supplies and professional services costs by $9.8$4.6 million. The amount of research and development expenses may fluctuate from period to period due to the differing levels and stages of development activity for our products.

Sales and marketing expense decreased by $25.2$9.0 million, or 11%,4%, in the year ended December 31, 2024,2025, as compared to the same period in 2023.2024. The decrease was primarily due to actions implemented in connection with the restructuring initiatives implemented inat 2023the andend of 2024 that lowered professional services and advertising costs by $14.6 million and personnel-related expenses by $10.6$2.8 million dueas a result of moving certain functions to acost reductionefficient inregions headcount.and leveraging advanced artificial intelligence tools, lowered professional services by $3.2 million and other sales and marketing operating expenses by $3.0 million.

General and administrative expense decreasedincreased by $7.0$4.9 million, or 5%,4%, in the year ended December 31, 2024,2025, as compared to the same period in 2023.2024. The decreaseincrease was primarily due to actionsa implemented$3.5 million increase in connection with the restructuring initiatives implemented in 2023 and 2024 that lowered professional services and facilities expense by $4.8 million and loweredhigher personnel-related costs by $2.2 millionexpenses due to aour reductionbonus inprogram headcount.and stock-based compensation and $1.4 million higher legal and other professional services.

Interest income of $62.7 million decreased in the year ended December 31, 2025, as compared to $77.3 million increased in the year ended December 31, 2024, as compared to $69.7 million for the year ended December 31, 2023, primarily due to higherlower average cash, cash equivalents and marketable securities, and lower interest rates.

Other expense, net, of $10.9 million in the year ended December 31, 2025 primarily consisted of $9.8 million non-cash expense related to change in the fair value of debt securities, $1.0 million net loss due to foreign currency denominated monetary assets and liabilities and $0.2 million change in the fair value of our tax equity fund investment, partially offset by $0.1 million realized gain from sale of marketable securities. Other expense, net, of $25.5 million in the year ended December 31, 2024,2024 primarily related to $23.0 million impairment of investments in private companies,companies and $5.0 million net loss due to foreign currency denominated monetary assets and liabilitiesliabilities, partially offset by a $2.0 million non-cash net gain related to change in the fair value of debt securities, $0.3 million of miscellaneous other income and $0.2 million realized gain from sale of marketable securities. Other income, net, of $6.5 million in the year ended December 31, 2023, primarily related to a $8.7 million non-cash net gain related to change in the fair value of debt securities, partially offset by a $2.1 million net loss due to foreign currency denominated monetary assets and liabilities and $0.1 million in realized loss on investments.

The income tax provision was $17.5$32.7 million in the year ended December 31, 2024,2025, as compared to an income tax provision of $74.2$17.5 million in the same period in 2023.2024. The decreaseincrease was primarily due to lowerhigher projected tax expense as our operations in U.S. and foreign jurisdictions were lessmore profitable in 2024 as compared to the same period in 2023, partially offset by2025, an increase in tax expense from equity compensation shortfalls in 20242025, and prior year true up adjustments in 2025, as compared to the same period in 2023.2024.

As of December 31, 2024,2025, we had $1.7$1.3 billion in net working capital, including cash, cash equivalents, restricted cashequivalents and marketable securities,securities of approximately $1.5 billion, of which approximately $1.6$1.4 billion were held in the United States. Our cash, cash equivalents, restricted cashequivalents and marketable securities primarily consist of U.S. Government agency securities and treasuries, money market mutual funds, corporate notes,notes and bonds, commercial paper and bonds,certificate of deposit, and both interest-bearing and non-interest-bearing deposits, with the remainder held in various foreign subsidiaries. We consider amounts held outside the United States to be accessible and have provided for the estimated withholding tax liability on the repatriation of our foreign earnings.

Changes in the United States trade environment, including the imposition of import tariffs, hashave and could adversely affect the amount or timing of our revenue, results of operations or cash flows.

On February 20, 2026, the U.S. Supreme Court ruled that tariffs imposed by the U.S. under IEEPA were invalid. The U.S. Supreme Court did not address refunds or remedies but instead remanded the matter to the Court of International Trade to address remedies. In response, the President issued an executive order rescinding the IEEPA tariffs and directing agencies to take measures to cease collection of the tariffs. However, a presidential proclamation was issued imposing a tarifftemporary import surcharge ofunder Section 122. The surcharge was initially set at least 10% underad the balance of payments provision in Section 122 of the Trade Act of 1974valorem on all importsimports, and subsequently increased to 15%, the statutory maximum, with certain exceptions for certainspecified commodities (e.g., electronics, critical minerals) and United States-Mexico-Canada Agreement qualified products. The tariffssurcharge under this statute went intotook effect on February 24, 2026, andfor willa remainmaximum inperiod effect forof 150 daysdays. (On May 7, 2026, the maximumU.S. Court of International Trade held that the Section 122 proclamation was invalid on the basis that it did not satisfy the statutory requirements of the Trade Act of 1974. The government has appealed the ruling, and the Federal Circuit issued a temporary stay pending appeal. With the expiration of the Section 122 tariffs, on July 23, 2026, the Administration announced new tariffs ranging from 10% to 12.5% on 60 trading partners as part of an investigation under Section 301 of the statuteTrade Act of 1974 (“Section 301”). that began on June 2, 2026. The tariffs apply to many of the countries from who we source materials and can include some products material to our business. The evolving legal status, and expiration of the Section 122 tariffs creates additional uncertainty regarding our tariff exposure and any potential recovery of Section 122 duties paid during the quarter. The ultimate impact of these newly enacted and potential future tariffs or other restrictions on international trade will depend on various factors, including the ultimate level of tariffs, the duration such tariffs remain in place, and how other countries respond to U.S. tariffs. Due to broad uncertainty regarding the timing, content and extent of any regulatory changes in the United States or abroad, we cannot predict the impact, if any, that these changes could have to our business, financial condition and results of operations. If the Section 122 tariffs are ultimately invalidated and not replaced, we may benefit from reduced tariff costs on imported components; however, any replacement tariffs imposed under Enphase Energy, Inc. | 2026 Form 10-Q | 47 alternative statutory authorities, such as Section 301 or Section 232 of the Trade Expansion Act of 1962 or Section 338 of the Tariff Act of 1930, could result in tariff rates that are equal to or higher than the current Section 122 surcharge and could remain in effect for significantly longer periods.

We have moved a significant portion of our manufacturing to the United States, while retaining limited contract manufacturing in China and India. However, certain components necessary for our products are still required to be imported from outside the United States. For example, LFP battery cells used in our storage products are still supplied solely by two vendors in China. Although we are in the process of searching for other vendors outside of China for future supplies, the expertise and industry for the LFP battery cell is primarily in China, and it will require significant effort to identify alternative, qualified suppliers with the right expertise to develop our battery cells. The resulting environment of retaliatory trade or other practices or additional trade restrictions or barriers, if implemented on a broader range of products or components that we source from outside the United States, could harm our ability to obtain necessary Enphase Energy, Inc. | 2026 Form 10-Q | 42 product components or to sell our products at prices customers are willing to pay, which could have a material adverse effect on our business, prospects, results of operations and cash flows.

The following discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements reflecting our current expectations and involves risks and uncertainties. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “intend,” “potential,” “aim” or “continue” or the negative of these terms or other comparable terminology. Such statements, include but are not limited to statements regarding: our expectations as to future financial performance, including revenue, cost of revenue, expenses, liquidity, cash requirements, and our ability to maintain and grow our profitability; the capabilities, performance and competitive advantage of our technology and products and planned changes; the timing of new product releases, and the anticipated market adoption of our current and future products; expectations regarding the development of our 1.25 megawatt (“MW”) IQ® Solid-State Transformer (“IQ SST”) product for data centers; our expectations regarding, and our ability to meet, demand for our products; our business strategies, including anticipated trends and operating conditions; growth of and development in markets in which we target, and our expansion into new and existing markets; our performance in operations, including our supply chain management and manufacturing operations and timelines; our product quality and customer service; our expectations regarding qualification of our products for domestic content credit under U.S. tax laws and our ability to meet Foreign Entity of Concern (“FEOC”) requirements for our U.S. products; our expectations regarding macroeconomic events and geopolitical developments, including the effects of tariffs, which may impact our business operations, financial performance and the markets in which we, our suppliers, manufacturers and installers operate; our expectations regarding potential growth through engagement in the third-party ownership (“TPO”) market; expectations regarding the increased variability of in the timing of revenue recognition and cash flows related to safe harbor agreements; expectations regarding the commercial microinverter market opportunity in the United States; market risks associated with financial instruments and foreign currency exchange rates; the anticipated benefits and risks relating to acquisitions and investments; and the importance of government incentives for solar products, including the impact of recent changes in the tax laws, rules and regulations. You should be aware that the forward-looking statements contained in this report are based on our current views and assumptions, and are subject to known and unknown risks, uncertainties and other factors that may cause actual events or results to differ materially. For a discussion identifying some of the important factors that could cause actual results to vary materially from those anticipated in the forward-looking statements, see below, those discussed in the section entitled “Risk Factors” herein and those included in our Annual Report on Form 10-K for the year ended December 31, 2025 filed on February 17, 2026 (the “Form 10-K”). Unless the context requires otherwise, references in this report to “Enphase,” “we,” “us” and “our” refer to Enphase Energy, Inc. and its consolidated subsidiaries.

We are a global energy technology company. We deliver smart, easy-to-use solutions that manage solar generation, storage and communication on one platform. Our intelligent microinverters work with virtually every solar panel made, and when paired with our smart technology, result in one of the industry’s best-performing clean energy systems. As of MarchJune 31,30, 2026, we have shipped approximately 87.889.4 million microinverters, and more than 5.25.3 million Enphase residential and commercial systems have been deployed in over 165 countries.

The Enphase® Energy System brings a high technology, networked approach to solar generation plus energy storage, by leveraging our design expertise across power electronics, semiconductors and cloud-based software technologies. Our integrated approach to energy solutions maximizes a home’s energy potential while providing advanced monitoring and remote maintenance capabilities. The Enphase Energy System uses a single technology platform for seamless management of the whole solution,solution of IQ® Microinverters, IQ® Batteries, IQ® Load Controllers, and IQ® EV Charger, allowing rapid commissioning with the Enphase® Installer App, consumption monitoring with our IQ® Combiner™ device with our Enphase IQ® Gateway™ device, and our Enphase® App, a cloud-based energy management platform. System owners can use the Enphase App to monitor their home’s solar generation, energy storage and consumption from any web-enabled device. Unlike some of our competitors, who utilize a traditional inverter, or offer separate components of solutions, we have built-in system redundancy in both photovoltaic generation and energy storage, eliminating the risk that comes with a single point of failure. Further, the nature of our cloud-based, monitored system allows for remote firmware and software updates, enabling cost-effective remote maintenance and ongoing utility compliance.

The OBBBA scales back the Investment Tax Credit (the “ITC”) available under Section 25D of the Internal Revenue Code of 1986, as amended (the “Code”), for residential solar and storage systems purchased through cash or loans. Under the new law, the Section 25D credit expired on December 31, 2025. In addition, the OBBBA imposes new timing requirements for eligibility under Section 48E of the Code, which governs ITCs for leased solar and storage systems. Specifically, solar-only projects that dodid not commence construction within 12 months of the OBBBA’s enactment must be placed in service by December 31, 2027 in order to remain eligible for the credit. Energy storage projects are not subject to this placed-in-service deadline; however, the ITC for storage systems will begin to phase down in 2034 — decreasing to 75% in 2034, 50% in 2035 and phasing out entirely by 2036.

Additionally, the OBBBA introduces new compliance requirements under the Foreign Entity of Concern (“FEOC”) provisions for both Section 48E of the Code and the Advanced Manufacturing Production Tax Credit (“AMPTC”) under Section 45X of the Code. These provisions establish an escalating threshold of non-FEOC content that must be met by solar and storage projects beginning construction in 2026 and by manufactured components produced beginning in 2026.

In February 2026, the U.S. Treasury Department of the Treasury and the Internal Revenue Service (“IRS”) issued guidance under the OBBBA’s FEOC provisions applicable to Sections 48E and 45X of the Code, including rules and interim safe harbors for determining whether projects or manufactured components receive material assistance from prohibited foreign entities. Treasury and the IRS have indicated that additional proposed regulations and safe harbor tables are expected, including guidance addressing ownership, effective control, debt, licensing arrangements and anti‑circumvention matters, which could make the compliance requirements more restrictive over time.

Trade Tariff Uncertainties. The impact of new or existing tariffs, trade restrictions or retaliatory actions on us, the solar industry and our customers continuecontinues to create uncertainty and impactadversely onaffect our business operations. On February 20, 2026, the United States Supreme Court issued a decision invalidating certain tariffs previously imposed under the International Emergency Economic Powers Act ("IEEPA"). Following this ruling, the U.S. Court of International Trade issued an order directingdirected U.S. Customs and Border Protection (“CBP”) to establish a process for the submission and review of refund claims related to affectedeligible IEEPA tariffs. On April 20, 2026, CBP launched an online portal through which companies may submit refund requests for eligible IEEPA tarifftariffs. refundWe requests.received Submitted claims are subject to reviewrefunds and validationassociated byinterest CBP,of approximately $41.0 million and $11.0 million in the approval,three timing,months ended June 30, 2026 and amountin ofJuly any2026, refundsrespectively, remain subject tofrom CBP determination. Based on our submitted refund requests related to tariffs paid during fiscal 2025 and the first quarter of fiscal 2026, weof maywhich be$45.4 eligiblemillion was recognized as a reduction to receivecost tariffof refunds.revenues However, becauseduring the approvalthree and timingsix months ended June 30, 2026, $1.6 million was recognized as interest income in the three and six months ended June 30, 2026, and $5.0 million was capitalized as a cost of suchinventory refunds remain uncertain and are contingent upon CBP’s review and validation process, no assurance can be given that any refunds will be realized. Furthermore, following the Supreme Court’s decision, the Administration announced the impositionas of newJune global30, tariffs of up to 15% under the provisions of Section 122 of the Trade Act of 1974.2026.

We have moved a significant portion of our manufacturing to the United States while continuing to utilize contract manufacturing in China and India. However, certain critical components for our products are still sourced from outside the United States. For example, lithium iron phosphate (“LFP”) battery cells used in our storage products are still supplied solely by two vendors located in China. Although we are in the process of searching for other vendors outside of China for future supplies, the expertise and industry for the LFP battery cell is primarily in China, and it will require significant effort to identify alternative, qualified suppliers with the right expertise to develop our battery cells.

Safe Harbor Agreements. DuringWe theexecuted yearagreements ended December 31, 2025, and continuing year‑to‑dateyear-to-date through the date of this filing on April 28, 2026, we expanded our engagement in the TPO market through the execution of additional safe harbor agreementsdeadline with solarTPO customers for products totaling approximately $1,081.1 million, of which $202.4 million is under the ITC Five Percent Safe Harbor method and battery$878.6 financingmillion companiesis thatunder offerthe leasePhysical andWork powerTest purchasebeginning-of-construction agreement structures to homeowners.method. These arrangements are designed to support customers’ qualification for investment tax creditsITC and have become an increasingly important growth channel for U.S. residential solar and battery adoption following the expiration of the residential Investment Tax CreditITC under Section 25D of the Code on December 31, 2025.

IQ Microinverters. We ship IQ8™ Microinverters into 58 countries worldwide. Our IQ8P™ 3PResidential Microinverters and IQ8P-3P™ Commercial Microinverters, with peak output power of 480 W AC, are designed to maximize energy production and can manage a continuous DC current of 14 amperes, supporting higher powered solar modules through increased energy harvesting. TheseThe microinvertersIQ8P-3P areCommercial Microinverter is offered for commercial and industrial applications in North America, Mexico, Colombia, Panama, Costa Rica and 13 Caribbean countries. The IQ8P Residential Microinverter is offered for residential and small commercial applications in North America and for grid-tied applications in South Africa, Mexico, Brazil, India, Thailand, the Philippines, France, Spain, Switzerland, the United Kingdom, Italy, Portugal, Poland, Turkey, Colombia, Panama, Costa Rica, Vietnam, Malaysia, AustraliaAustralia, Fiji, and 13 Caribbean countries.

We began shipping our new IQ9N-3P™ Commercial Microinverter in December 2025. This is the first microinverter powered by advanced gallium nitride (“GaN”) technology and designed for three-phase 480Y/277 V (wye) grid configurations, without using external transformers. The IQ9N-3P Commercial Microinverter helps simplify design complexity, lowers installation and balance of system costs, and improves system efficiency for 480 V commercial projects.

In 2025, we released a software update in our Enphase IQ® Gateway™ device that enables homeowners with existing legacy IQ7™ Microinverter-based systems to expand their solar capacity with IQ8 Microinverters. This Enphase Energy, Inc. | 2026 Form 10-Q | 35 software facilitates seamless interoperability between legacy and current system architectures and is available in North America, Europe, Australia, South Africa, the Philippines and other key markets.

We ship our IQ8HC™ Microinverters, IQ8X™ Microinverters, IQ8P-3P Commercial Microinverters, IQ9N-3P Commercial Microinverters, IQ9S-3P Commercial Microinverters, IQ9N Residential Microinverters, IQ® Battery 5Ps and IQ® Battery 10Cs supplied from manufacturing facilities in the United States with higher domestic content than previous models, that when paired with other U.S.-made solar equipment couldmay qualify for the domestic content bonus tax credit under the Inflation Reduction Act of 2022.

In February 2026, we announced the introduction of Enphase Power Control™ software with our Enphase IQ® Gateway™ device for IQ9™ and IQ8™ Microinverter-based small commercial solar systems. Enphase Power Control™ software simplifies interconnections, reduces permitting complexity, and avoids costly utility upgrades, making it easier and more cost-effective to design and install small commercial microinverter systems. This software solution is designed to help installers reduce costs, simplify interconnection requirements, and enable projects that might otherwise not proceed due to unfavorable project economics.

We continue to expand the deployment of the IQ Battery 5P with FlexPhase™, technology, an AC-coupled, modular 5 kWh battery with 3.84 kVA of continuous power per unit, for both single-phase and three-phase applications. TheThis product is currently shipping to Austria, Germany, Switzerland, Luxembourg, Poland, France, Spain, Portugal, the Netherlands, Greece, Romania, Croatia, Finland, Malta, Estonia, India, Belgium, Slovenia, Slovakia, Denmark, Latvia, Lithuania, Sweden, Hungary, BulgariaBulgaria, North Macedonia, and Australia. The standard IQ Battery 5P continues to ship in the Enphase Energy, Inc. | 2026 Form 10-Q | 32 United States, Cayman Islands, Australia, New Zealand, Puerto Rico, Mexico, Canada, the United Kingdom, Italy, France, the Netherlands, Luxembourg, Belgium, Romania and India. These Enphase IQ Batteries in Europe can be installed with both single-phase and three-phase third-party solar energy inverters, enabling homeowners to upgrade their existing home solar systems with a residential battery storage solution that reduces costs while providing increased self-reliance.

In December 2025, we launched our PowerMatch™ technology, a battery software upgrade in Europe. PowerMatch intelligently adjusts IQ Battery output to match a home’s real-time power needs,needs by activating only the microinverters needed, delivering more usable energy, higher efficiency, longer battery life and greater long-term savings. The efficiency gains achieved with this technology can improve battery performance by as much as 40%. In May 2026, we expanded PowerMatch technology to North America, making it available to homeowners with qualifying IQ Battery systems in the United States and Canada.

New Products in Development. OnIn April 28, 2026, we announced that we are developing our 1.25 MW IQ SST product for data centers, a distributed solid-state transformer platform designed to convert medium-voltage AC directly to low-voltage DC in a single stage. The IQ SST will be built as a supercluster of 342 power modules, with each module powered by our custom Kestrel ASIC and high-frequency GaN-based power platform. The architecture is designed to deliver native 800 V DC output for next-generation AI racks, fast response on the order of 1 to 3 milliseconds, built-in redundancy, and serviceability through hot-swappable modules. We have completed feasibility, built working power modules, converged on the system design, and have more than 80 engineers working on the program. We expect full system demonstrations latelater this year, customer pilots in 2027 and volume shipments in 2028.year.

Net revenues decreased by $73.2$71.3 million, or 21%,20%, in the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025, driven primarily by a 39%40% decrease in IQ Batteries MWh shipped and 8%product decreaseprice decreases, partially offset by a 4% increase in microinverter units sold. During the three months ended MarchJune 31,30, 2026, we sold approximately 1.41.6 million microinverter units and shipped 103.1113.8 MWh of IQ Batteries, as compared to approximately 1.5 million microinverter units and 170.1190.9 MWh of IQ Batteries shipped in the three months ended MarchJune 31,30, 2025.

Net revenues in the United States were $233.9$226.9 million in the three months ended MarchJune 31,30, 2026, as compared to $263.2$271.3 million in the same period in 2025, a decrease of $29.3$44.4 million, or 11%,16%, primarily due to the expiration of the federal residential clean energy tax credit under Section 25D of the Internal Revenue Code. Microinverter shipments that are associated with safe harbor transactions with customers were $34.5$84.3 million and $54.3$40.4 million in the three months ended MarchJune 31,30, 2026 and 2025, respectively.

Net revenues from international markets were $49.0$65.0 million in the three months ended MarchJune 31,30, 2026, as compared to $92.8$91.8 million in the same period in 2025, a decrease of $43.9$26.8 million, or 47%,29%, primarily driven by lower shipments to customers in Europe driven by continued softening in demand and delayed purchasing activity. In addition, demand in certain European markets was impacted by macroeconomic conditions, regulatory and incentive framework transitions, and lower electricity prices compared to the same period in 2025, which reduced near‑term installation activity and delayed project starts.

Cost of revenues decreased by $5.3$75.8 million, or 3%,39%, for the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025. This decrease was primarily driven by $45.4 million IEEPA tariff refunds and a decreased40% decrease in MWh of IQ Batteries andMWh microinverter units shipped and lower tariffs.shipped.

Gross margin decreasedincreased by 11.713.1 percentage points in the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025. The decreaseincrease was primarily due to 6.715.6 percentage points from the saleIEEPA oftariff taxrefunds, creditspartially generatedoffset during 2025, 1.8 percentage points from reduction in fair value of AMPTC generated during the three months ended March 31, 2026, andby lower shipment volumes of microinverters and IQ Batteries,Batteries whichthat resulted in unfavorable absorption of fixed manufacturing and supply chain costs over a lower revenue base, partially offset by lower tariffs.base.

Research and development expense decreasedincreased by $5.3$0.2 million, or 11%,1%, in the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025. The decreaseincrease was primarily due to a $1.3 million increase in equipment and professional services for IQ SST and other next generation products, partially offset by actions in connection with the restructuring initiatives implemented at the beginning of 2026 that lowered personnel-related expenses as a result of a reduction in headcount by $4.5 million, lowered professional services costs by $0.4 million and other equipment costs by $0.4$1.1 million. The amount of research and development expenses may fluctuate from period to period due to the differing levels and stages of development activity for our products.

Sales and marketing expense decreased by $0.9$5.2 million, or 2%,10%, in the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025. The decrease was primarily due to actions in connection with the restructuring initiatives implemented at the beginning of 2026 that lowered personnel-related expenses by $4.4 million and professional services, advertising and corporate expenses by $0.7 million as a result of moving certain functions to more cost efficient regions and leveraging advanced artificial intelligence tools.

General and administrative expense decreased by $0.8$2.7 million, or 2%,8%, in the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025. The decrease was primarily due to actions in connection with the restructuring initiatives implemented at the beginning of 2026 that lowered personnel-related expenses by $1.3$1.9 million and lowered equipment and other corporate costs by $0.5 million, partially offset by advisory and legal fees of $1.0$0.8 million.

Restructuring and asset impairment charges of $3.8$1.0 million in the three months ended MarchJune 31,30, 2026, primarily consisted of $3.5employee related expenses. Restructuring charges of $3.3 million in the three months ended June 30, 2025, primarily consisted of $1.5 million of asset impairment charges, $1.0 million of employee related expenses and $0.3$0.8 million of contract termination charges. Restructuring and asset impairment charges of $3.2 million in the three months ended March 31, 2025, primarily consisted of employee severance, one-time benefits and other employee related expenses.

Interest income of $12.6$12.2 million decreased in the three months ended MarchJune 31,30, 2026, as compared to $17.0$14.9 million in the three months ended MarchJune 31,30, 2025, primarily due to lower average cash, cash equivalents and marketable securities, and lower interest rates.

Interest expenseexpense, net, of $0.6$0.3 million in the three months ended MarchJune 31,30, 2026, primarily included amortization of debt issuance costs with our 0.0% convertible senior notes due 2028 (the “Notes due 2026 and the Notes due 2028.2028”). Interest expense of $2.0$0.8 million in the three months ended MarchJune 31,30, 2025, primarily included $2.0$0.8 million for coupon interest, debt discount amortization for the Notes due 2025 and amortization of debt issuance costs forwith theour Notes0.0% convertible senior notes due 2025,2026 (the “Notes due 2026”) and the Notes due 2028.2028, and other interest.

Other income,expense, net, of $3.8$1.4 million in the three months ended MarchJune 31,30, 2026, primarily consisted of $1.7$2.6 million gainnon-cash expense related onto change in the salefair value of patents,debt a $1.4 million realized gain from sale of marketable securities,securities and a $0.8$0.4 million net foreign currency gainloss from remeasurement of monetary assets and liabilities, partially offset by $0.1$1.6 million decreasetariff interest refund. Other expense, net, of $8.9 million in the three months ended June 30, 2025, primarily consisted of $9.5 million non-cash expense related to change in the fair value of ourdebt securities and $0.1 million change in tax equityequity, fundpartially investment.offset by $0.7 million net gain due to foreign currency denominated monetary assets and liabilities.