Economic Value Added (EVA)
EVA is registered trademark of Stern Stewart.
Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.
Economic Profit
Enphase Energy Inc., economic profit calculation
US$ in thousands
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2023 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 521,640 – 18.70% × 1,302,318 = 278,102
- Net Operating Profit After Taxes (NOPAT)
- The net operating profit after taxes experienced a decline from 168,136 thousand USD in 2019 to 132,831 thousand USD in 2020. However, it showed significant growth in the subsequent years, reaching 255,560 thousand USD in 2021 and peaking at 575,824 thousand USD in 2022. In 2023, there was a slight decrease to 521,640 thousand USD, but the overall trend across the five-year period remains strongly positive.
- Cost of Capital
- The cost of capital demonstrated a gradual decline over the observed period, decreasing from 19.44% in 2019 to 18.7% in 2023. This reduction indicates a slightly lower required return on invested capital, which could potentially enhance economic profitability if operating profits are maintained or improved.
- Invested Capital
- Invested capital increased substantially from 528,927 thousand USD in 2019 to 951,473 thousand USD in 2020. Following this, it decreased to 779,239 thousand USD in 2021 but then sharply increased again, reaching 1,285,383 thousand USD in 2022 and slightly rising to 1,302,318 thousand USD in 2023. This suggests aggressive capital deployment in the later years, potentially to support business growth or expansion initiatives.
- Economic Profit
- Economic profit fluctuated significantly during the period. It started positively at 65,325 thousand USD in 2019, then turned negative with a loss of 47,597 thousand USD in 2020, indicating that returns were below the cost of capital in that year. Recovery occurred in 2021 with economic profit increasing to 110,005 thousand USD, followed by a substantial rise to 333,213 thousand USD in 2022. In 2023, economic profit declined to 278,102 thousand USD but remained well above earlier years, reflecting sustained value creation despite the recent decrease.
- Overall Analysis
- The financial metrics indicate an initial struggle in 2020, evidenced by decreased NOPAT and a negative economic profit. From 2021 onwards, the company showed strong recovery and growth in operating profit and economic profit, supported by increased invested capital. The steadily declining cost of capital is a favorable factor enhancing economic profitability. The decline in economic profit in 2023, despite high operating profit, may warrant further investigation to understand underlying causes. The trend suggests effective capital deployment and operational improvement in the majority of the observed period, contributing to overall value creation.
Net Operating Profit after Taxes (NOPAT)
Enphase Energy Inc., NOPAT calculation
US$ in thousands
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in allowance for doubtful accounts.
3 Addition of increase (decrease) in deferred revenues.
4 Addition of increase (decrease) in warranty obligations.
5 Addition of increase (decrease) in liabilities related to restructuring activities.
6 Addition of increase (decrease) in equity equivalents to net income.
7 2023 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 24,022 × 7.00% = 1,682
8 2023 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 10,521 × 21.00% = 2,209
9 Addition of after taxes interest expense to net income.
10 2023 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 69,728 × 21.00% = 14,643
11 Elimination of after taxes investment income.
The annual financial data reveals significant trends in both net income and net operating profit after taxes (NOPAT) over the five-year period ending December 31, 2023.
- Net Income
- Net income experienced a decline from 2019 to 2020, decreasing from $161,148 thousand to $133,995 thousand. This was followed by a moderate recovery in 2021, with net income rising to $145,449 thousand. A substantial increase occurred in 2022, where net income nearly tripled compared to the previous year, reaching $397,362 thousand. The upward trend continued into 2023, with net income rising further to $438,936 thousand.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT showed a similar pattern to net income but with more pronounced fluctuations. It decreased slightly from $168,136 thousand in 2019 to $132,831 thousand in 2020. In 2021, NOPAT nearly doubled to $255,560 thousand, indicating a strong improvement in operating profitability. A significant surge occurred in 2022, with NOPAT reaching $575,824 thousand, which more than doubled the previous year’s figure. However, in 2023, there was a notable decrease to $521,640 thousand, representing a decline compared to 2022 but still substantially above values from earlier years.
- Overall Trends and Insights
- Both net income and NOPAT reflect a recovery and growth trajectory after an initial dip in 2020, suggesting that the company improved profitability after the economic challenges that year. The dramatic increases in 2022 indicate a period of exceptional operational performance. The slight decline in NOPAT in 2023, despite continuing growth in net income, might indicate changes in operational efficiency or expense structure that merit further examination. The general upward trend for both metrics over the five years suggests strengthening financial health and enhanced value generation.
Cash Operating Taxes
Enphase Energy Inc., cash operating taxes calculation
US$ in thousands
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
- Income Taxes Provision for (Benefit From)
- The income taxes provision exhibited a volatile trend over the five-year period. It started with a negative value of -$71,034 thousand in 2019, indicating a tax benefit or credit situation. This negative provision decreased substantially to -$14,585 thousand in 2020 and further to -$24,521 thousand in 2021, showing fluctuations in tax benefits during these years. However, in 2022, there was a significant reversal, with the provision turning positive to $54,686 thousand, indicating a tax expense. This upward trend continued in 2023, reaching $74,203 thousand, which suggests increasing tax liabilities or reduced tax benefits in these latter years.
- Cash Operating Taxes
- Cash operating taxes demonstrated a steady and strong upward trajectory throughout the analyzed period. Beginning at $3,653 thousand in 2019, the amount nearly doubled to $6,809 thousand in 2020, more than doubled again to $16,301 thousand in 2021, and saw a dramatic rise to $54,271 thousand in 2022. The growth culminated at $108,957 thousand in 2023, representing an approximately 30-fold increase from the 2019 figure. This continuous increase suggests substantially higher cash tax outflows, potentially reflecting improved profitability, changes in tax regulations, or reduced tax incentives.
Invested Capital
Enphase Energy Inc., invested capital calculation (financing approach)
US$ in thousands
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 Addition of capitalized operating leases.
2 Elimination of deferred taxes from assets and liabilities. See details »
3 Addition of allowance for doubtful accounts receivable.
4 Addition of deferred revenues.
5 Addition of warranty obligations.
6 Addition of liabilities related to restructuring activities.
7 Addition of equity equivalents to stockholders’ equity.
8 Removal of accumulated other comprehensive income.
9 Subtraction of construction in process.
10 Subtraction of marketable securities.
The financial data over the five-year period reveals key trends in the company's capital structure and financial positioning.
- Total Reported Debt & Leases
- The total reported debt and leases exhibit a significant increase from 2019 to 2020, more than tripling from approximately $118.3 million to $350.6 million. This upward trajectory accelerates further in 2021 when debt nearly triples again to over $1.05 billion. In 2022, the total debt continues to rise but at a moderated pace, reaching approximately $1.31 billion, and remains relatively stable through 2023.
- Stockholders’ Equity
- Stockholders’ equity shows growth overall, with a notable increase from $272.2 million in 2019 to nearly $484 million in 2020. However, in 2021 there is a decline to about $430.2 million. Following this dip, equity increases substantially in 2022 to $825.6 million and reaches $983.6 million by 2023, nearly doubling from the previous year and demonstrating a strengthening equity base in recent periods.
- Invested Capital
- Invested capital fluctuates over the period with an initial sharp increase from $528.9 million in 2019 to $951.5 million in 2020. It then decreases to $779.2 million in 2021 before sharply rising again in 2022 to $1.29 billion and remaining relatively stable through 2023 at about $1.30 billion. This pattern suggests periods of investment expansion followed by some consolidation before significant capital deployment resumes.
Overall, the data indicates a trend of increasing leverage over the five years, especially between 2019 and 2021, followed by stabilization in debt levels. Equity has grown robustly after a slight setback in 2021, supporting a stronger capital base by 2023. Invested capital reflects these financing changes, showing corresponding increases that suggest strategic growth initiatives or acquisitions that require elevated capital investment. The stabilization in debt alongside rising equity towards the end suggests an effort to balance the capital structure for sustained financial health.
Cost of Capital
Enphase Energy Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 16,626,446) | 16,626,446) | ÷ | 17,878,768) | = | 0.93 | 0.93 | × | 19.83% | = | 18.44% | ||
| Debt3 | 1,228,300) | 1,228,300) | ÷ | 17,878,768) | = | 0.07 | 0.07 | × | 4.64% × (1 – 21.00%) | = | 0.25% | ||
| Operating lease liability4 | 24,022) | 24,022) | ÷ | 17,878,768) | = | 0.00 | 0.00 | × | 7.00% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 17,878,768) | 1.00 | 18.70% | ||||||||||
Based on: 10-K (reporting date: 2023-12-31).
1 US$ in thousands
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 29,015,256) | 29,015,256) | ÷ | 30,840,481) | = | 0.94 | 0.94 | × | 19.83% | = | 18.66% | ||
| Debt3 | 1,800,777) | 1,800,777) | ÷ | 30,840,481) | = | 0.06 | 0.06 | × | 4.64% × (1 – 21.00%) | = | 0.21% | ||
| Operating lease liability4 | 24,448) | 24,448) | ÷ | 30,840,481) | = | 0.00 | 0.00 | × | 6.50% × (1 – 21.00%) | = | 0.00% | ||
| Total: | 30,840,481) | 1.00 | 18.87% | ||||||||||
Based on: 10-K (reporting date: 2022-12-31).
1 US$ in thousands
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 19,513,074) | 19,513,074) | ÷ | 21,010,462) | = | 0.93 | 0.93 | × | 19.83% | = | 18.42% | ||
| Debt3 | 1,481,638) | 1,481,638) | ÷ | 21,010,462) | = | 0.07 | 0.07 | × | 4.63% × (1 – 21.00%) | = | 0.26% | ||
| Operating lease liability4 | 15,750) | 15,750) | ÷ | 21,010,462) | = | 0.00 | 0.00 | × | 7.40% × (1 – 21.00%) | = | 0.00% | ||
| Total: | 21,010,462) | 1.00 | 18.68% | ||||||||||
Based on: 10-K (reporting date: 2021-12-31).
1 US$ in thousands
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 24,965,624) | 24,965,624) | ÷ | 26,464,798) | = | 0.94 | 0.94 | × | 19.83% | = | 18.71% | ||
| Debt3 | 1,479,423) | 1,479,423) | ÷ | 26,464,798) | = | 0.06 | 0.06 | × | 5.70% × (1 – 21.00%) | = | 0.25% | ||
| Operating lease liability4 | 19,751) | 19,751) | ÷ | 26,464,798) | = | 0.00 | 0.00 | × | 7.70% × (1 – 21.00%) | = | 0.00% | ||
| Total: | 26,464,798) | 1.00 | 18.96% | ||||||||||
Based on: 10-K (reporting date: 2020-12-31).
1 US$ in thousands
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 7,278,663) | 7,278,663) | ÷ | 7,491,633) | = | 0.97 | 0.97 | × | 19.83% | = | 19.27% | ||
| Debt3 | 200,258) | 200,258) | ÷ | 7,491,633) | = | 0.03 | 0.03 | × | 7.57% × (1 – 21.00%) | = | 0.16% | ||
| Operating lease liability4 | 12,712) | 12,712) | ÷ | 7,491,633) | = | 0.00 | 0.00 | × | 8.60% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 7,491,633) | 1.00 | 19.44% | ||||||||||
Based on: 10-K (reporting date: 2019-12-31).
1 US$ in thousands
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Enphase Energy Inc., economic spread ratio calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Economic profit1 | 278,102) | 333,213) | 110,005) | (47,597) | 65,325) | |
| Invested capital2 | 1,302,318) | 1,285,383) | 779,239) | 951,473) | 528,927) | |
| Performance Ratio | ||||||
| Economic spread ratio3 | 21.35% | 25.92% | 14.12% | -5.00% | 12.35% | |
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Advanced Micro Devices Inc. | -21.96% | -21.65% | 35.04% | 8.79% | — | |
| Analog Devices Inc. | -8.57% | -9.94% | -13.19% | -8.19% | -6.62% | |
| Applied Materials Inc. | 16.35% | 26.27% | 21.77% | 10.03% | 9.72% | |
| Broadcom Inc. | 7.52% | 6.09% | -3.21% | -8.63% | -8.30% | |
| Intel Corp. | -14.90% | -8.38% | 8.66% | 14.29% | — | |
| KLA Corp. | 24.01% | 26.29% | 14.91% | 3.81% | — | |
| Lam Research Corp. | 7.87% | 22.78% | 18.15% | 2.27% | — | |
| Micron Technology Inc. | -27.06% | 0.70% | -3.86% | -9.40% | — | |
| NVIDIA Corp. | -11.04% | 31.16% | 11.60% | -2.42% | — | |
| Qualcomm Inc. | 2.80% | 29.24% | 26.65% | 11.69% | — | |
| Texas Instruments Inc. | 15.01% | 35.66% | 34.28% | 29.43% | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 Economic profit. See details »
2 Invested capital. See details »
3 2023 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 278,102 ÷ 1,302,318 = 21.35%
4 Click competitor name to see calculations.
- Economic Profit
- The economic profit demonstrates significant fluctuations over the analyzed periods. Initially, there was a positive economic profit of 65,325 thousand US dollars at the end of 2019. This was followed by a notable decline into negative territory in 2020, with a loss of 47,597 thousand US dollars. Subsequently, the company recovered, posting a positive economic profit of 110,005 thousand US dollars in 2021. This upward trend continued strongly in 2022, reaching a high of 333,213 thousand US dollars before slightly declining to 278,102 thousand US dollars in 2023. Overall, the company exhibited resilience with a robust recovery and growth in economic profit after the downturn in 2020.
- Invested Capital
- Invested capital shows a general increasing trend throughout the years. Starting at 528,927 thousand US dollars in 2019, the capital almost doubled by 2020 to 951,473 thousand US dollars. It then decreased somewhat in 2021 to 779,239 thousand US dollars, followed by a substantial increase in 2022 to 1,285,383 thousand US dollars, and a slight further increase to 1,302,318 thousand US dollars in 2023. This pattern suggests significant investment and reinvestment activities, particularly in 2020 and 2022, which may be aligned with strategic growth or asset acquisitions.
- Economic Spread Ratio
- The economic spread ratio mirrors the trends observed in economic profit, indicating variations in returns relative to the cost of capital. It started at a strong positive 12.35% in 2019, dropped sharply to -5% in 2020, reflecting the negative economic profit of that year. The ratio then recovered to 14.12% in 2021, further increasing to a peak of 25.92% in 2022 before declining somewhat to 21.35% in 2023. This suggests improvements in capital efficiency and profitability after 2020, with particularly high returns in 2022, although a slight pullback is evident in the most recent period.
Economic Profit Margin
Enphase Energy Inc., economic profit margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Economic profit1 | 278,102) | 333,213) | 110,005) | (47,597) | 65,325) | |
| Net revenues | 2,290,786) | 2,330,853) | 1,382,049) | 774,425) | 624,333) | |
| Add: Increase (decrease) in deferred revenues | 115,112) | 122,504) | 76,718) | (8,849) | 71,957) | |
| Adjusted net revenues | 2,405,898) | 2,453,357) | 1,458,767) | 765,576) | 696,290) | |
| Performance Ratio | ||||||
| Economic profit margin2 | 11.56% | 13.58% | 7.54% | -6.22% | 9.38% | |
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Advanced Micro Devices Inc. | -56.05% | -53.68% | 13.21% | 3.93% | — | |
| Analog Devices Inc. | -30.79% | -37.24% | -84.75% | -26.61% | -20.26% | |
| Applied Materials Inc. | 10.96% | 15.17% | 13.89% | 7.63% | 6.74% | |
| Broadcom Inc. | 13.16% | 11.39% | -7.56% | -23.82% | -22.06% | |
| Intel Corp. | -25.30% | -11.79% | 9.70% | 15.04% | — | |
| KLA Corp. | 19.07% | 22.22% | 14.69% | 4.27% | — | |
| Lam Research Corp. | 6.91% | 16.82% | 14.63% | 2.64% | — | |
| Micron Technology Inc. | -93.12% | 1.20% | -6.45% | -18.55% | — | |
| NVIDIA Corp. | -8.74% | 20.89% | 9.07% | -3.13% | — | |
| Qualcomm Inc. | 2.46% | 19.48% | 16.05% | 8.82% | — | |
| Texas Instruments Inc. | 19.36% | 31.27% | 30.66% | 26.38% | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 Economic profit. See details »
2 2023 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net revenues
= 100 × 278,102 ÷ 2,405,898 = 11.56%
3 Click competitor name to see calculations.
- Economic Profit
- The economic profit exhibited significant fluctuations throughout the periods. In 2019, it was positive at 65,325 thousand USD, followed by a notable decline to a negative value of -47,597 thousand USD in 2020. Subsequently, economic profit demonstrated a strong recovery with a large increase to 110,005 thousand USD in 2021. This upward momentum continued sharply into 2022, reaching 333,213 thousand USD, before experiencing a decline to 278,102 thousand USD in 2023. The overall trend indicates volatility with a substantial rebound post-2020 and a slight reduction in the final year.
- Adjusted Net Revenues
- Adjusted net revenues showed consistent and robust growth over the analyzed periods, with figures rising from 696,290 thousand USD in 2019 to 765,576 thousand USD in 2020. There was a marked acceleration in revenue growth in 2021 and 2022, reaching 1,458,767 thousand USD and 2,453,357 thousand USD respectively. In 2023, revenues slightly decreased to 2,405,898 thousand USD, indicating potential stabilization or minor contraction after rapid expansion. The general trend is one of significant and rapid revenue growth, especially from 2020 to 2022.
- Economic Profit Margin
- The economic profit margin mirrored the volatility of economic profit itself. It started at a healthy level of 9.38% in 2019 but turned negative in 2020, registering -6.22%, reflecting the economic profit loss during that period. The margin then improved considerably, climbing to 7.54% in 2021 and further to a peak of 13.58% in 2022. In 2023, there was a slight decline to 11.56%. This indicates that despite some margin contraction in the latest year, the profitability margins remain above earlier levels and demonstrate a resilient recovery post-2020 downturn.