0001463101-19-000157 | 10-Q | XBRL Viewer

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COVER PAGE - shares	9 Months Ended
COVER PAGE - shares	Sep. 30, 2019	Oct. 22, 2019
Cover page.
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2019
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	707
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	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		122,385,775
Entity Central Index Key	0001463101
Amendment Flag	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Current Fiscal Year End	--12-31
Entity Bankruptcy Proceedings, Reporting Current	false

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 203,046	$ 106,237
Accounts receivable, net	133,689	78,938
Inventory	30,231	16,267
Prepaid expenses and other assets	24,551	20,860
Total current assets	391,517	222,302
Property and equipment, net	23,532	20,998
Operating lease, right of use asset	11,407
Intangible assets, net	31,761	35,306
Goodwill	24,783	24,783
Other assets	40,669	36,548
Total assets	523,669	339,937
Current liabilities:
Accounts payable	60,692	48,794
Accrued liabilities	39,991	29,010
Deferred revenues, current	34,295	33,119
Warranty obligations, current	8,757	8,083
Debt, current	3,084	28,155
Total current liabilities	146,819	147,161
Long-term liabilities:
Deferred revenues, noncurrent	85,746	76,911
Warranty obligations, noncurrent	25,867	23,211
Other liabilities	11,970	3,250
Debt, noncurrent	100,978	81,628
Total liabilities	371,380	332,161
Commitments and contingent liabilities (Note 9)
Stockholders’ equity:
Common stock, $0.00001 par value, 150,000 shares and 150,000 shares authorized; and 122,306 shares and 107,035 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively	1	1
Additional paid-in capital	453,566	353,335
Accumulated deficit	(301,847)	(346,302)
Accumulated other comprehensive income	569	742
Total stockholders’ equity	152,289	7,776
Total liabilities and stockholders’ equity	$ 523,669	$ 339,937

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Common stock, par value (in usd per share)	$ 0.00001	$ 0.00001
Common stock, shares authorized (in shares)	150,000,000	150,000,000
Common stock, shares issued (in shares)	122,306,000	107,035,000
Common stock, shares outstanding (in shares)	122,306,000	107,035,000

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Income Statement [Abstract]
Net revenues	$ 180,057	$ 78,002	$ 414,301	$ 223,870
Cost of revenues	115,351	52,738	270,937	157,589
Gross profit	64,706	25,264	143,364	66,281
Operating expenses:
Research and development	11,085	8,165	29,213	25,247
Sales and marketing	9,551	7,375	26,038	20,430
General and administrative	9,895	7,510	28,358	21,423
Restructuring charges	469	2,588	1,468	2,588
Total operating expenses	31,000	25,638	85,077	69,688
Income (loss) from operations	33,706	(374)	58,287	(3,407)
Other expense, net
Interest income	894	321	1,698	568
Interest expense	(2,286)	(2,790)	(7,388)	(7,599)
Other expense, net	(943)	(379)	(6,904)	(1,077)
Total other expense, net	(2,335)	(2,848)	(12,594)	(8,108)
Income (loss) before income taxes	31,371	(3,222)	45,693	(11,515)
Provision for income taxes	(272)	(248)	(1,211)	(821)
Net income (loss)	$ 31,099	$ (3,470)	$ 44,482	$ (12,336)
Net income (loss) per share:
Basic (in USD per share)	$ 0.25	$ (0.03)	$ 0.39	$ (0.13)
Diluted (in USD per share)	$ 0.23	$ (0.03)	$ 0.35	$ (0.13)
Shares used in per share calculation:
Basic (in shares)	122,123	102,798	114,720	97,257
Diluted (in shares)	133,611	102,798	131,114	97,257

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 31,099	$ (3,470)	$ 44,482	$ (12,336)
Other comprehensive income (loss):
Foreign currency translation adjustments	155	346	(173)	649
Comprehensive income (loss)	$ 31,254	$ (3,124)	$ 44,309	$ (11,687)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY (DEFICIT) - USD ($)
$ in Thousands

Total

Common Stock and Additional Paid-In Capital

Retained Earnings

Accumulated Other Comprehensive Income (Loss)

Balance, beginning of period at Dec. 31, 2017

$ 287,257

$ (295,727)

$ (656)

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Cumulative-effect adjustment to additional paid in capital and other

^[1]

(38,948)

Issuance of common stock from exercise of equity awards, net

2,156

Payment of withholding taxes related to net share settlement of equity awards

Conversion of convertible notes due 2023, net

Equity component of convertible notes due 2024, net

Cost of convertible notes hedge related to the convertible notes due 2024

Sale of warrants related to the convertible notes due 2024

Issuance of common stock, net

19,771

Issuance of common stock related to acquisition

32,319

Stock-based compensation expense and other

9,671

Net income (loss)

$ (12,336)

(12,336)

Foreign currency translation adjustments

649

Balance, end of period at Sep. 30, 2018

4,156

351,174

(347,011)

(7)

Balance, beginning of period at Jun. 30, 2018

313,779

(343,541)

(353)

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Cumulative-effect adjustment to additional paid in capital and other

^[1]

Issuance of common stock from exercise of equity awards, net

633

Payment of withholding taxes related to net share settlement of equity awards

Conversion of convertible notes due 2023, net

Equity component of convertible notes due 2024, net

Cost of convertible notes hedge related to the convertible notes due 2024

Sale of warrants related to the convertible notes due 2024

Issuance of common stock, net

Issuance of common stock related to acquisition

32,319

Stock-based compensation expense and other

4,443

Net income (loss)

(3,470)

Foreign currency translation adjustments

346

Balance, end of period at Sep. 30, 2018

4,156

351,174

(347,011)

(7)

Balance, beginning of period at Dec. 31, 2018

7,776

353,336

(346,302)

742

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Cumulative-effect adjustment to additional paid in capital and other

^[1]

(27)

Issuance of common stock from exercise of equity awards, net

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 due 2024, net

35,114

Cost of convertible notes hedge related to the convertible notes due 2024

(36,313)

Sale of warrants related to the convertible notes due 2024

29,818

Issuance of common stock, net

Issuance of common stock related to acquisition

Stock-based compensation expense and other

14,241

Net income (loss)

44,482

Foreign currency translation adjustments

(173)

Balance, end of period at Sep. 30, 2019

152,289

453,567

(301,847)

569

Balance, beginning of period at Jun. 30, 2019

449,803

(332,946)

414

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Cumulative-effect adjustment to additional paid in capital and other

^[1]

Issuance of common stock from exercise of equity awards, net

303

Payment of withholding taxes related to net share settlement of equity awards

(2,348)

Conversion of convertible notes due 2023, net

Equity component of convertible notes due 2024, net

Cost of convertible notes hedge related to the convertible notes due 2024

Sale of warrants related to the convertible notes due 2024

Issuance of common stock, net

Issuance of common stock related to acquisition

Stock-based compensation expense and other

5,784

Net income (loss)

31,099

Foreign currency translation adjustments

155

Balance, end of period at Sep. 30, 2019

$ 152,289

$ 453,567

$ (301,847)

$ 569

[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 and the adoption of Accounting Standards Codification (“ASC”) No. 606, “Revenue Recognition” on January 1, 2018.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Cash flows from operating activities:
Net income (loss)	$ 44,482	$ (12,336)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	11,551	6,950
Provision for doubtful accounts	408	668
Asset impairment	0	1,636
Non-cash interest expense	4,173	1,880
Financing fees on extinguishment of debt	2,152	0
Fees paid for repurchase and exchange of convertible notes due 2023	6,000	0
Stock-based compensation	14,000	9,911
Changes in operating assets and liabilities:
Accounts receivable	(56,139)	10,671
Inventory	(13,964)	8,112
Prepaid expenses and other assets	(8,634)	(3,995)
Intangible assets	0	(6,000)
Accounts payable, accrued and other liabilities	18,656	4,672
Warranty obligations	3,330	2,368
Deferred revenues	10,781	(10,280)
Net cash provided by operating activities	36,796	14,257
Cash flows from investing activities:
Purchases of property and equipment	(7,368)	(2,384)
Acquisition	0	(9,000)
Net cash used in investing activities	(7,368)	(11,384)
Cash flows from financing activities:
Issuance of convertible notes due 2024, net of issuance costs	127,481	0
Purchase of convertible note hedges	(36,313)	0
Sale of warrants	29,819	0
Fees paid for repurchase and exchange of convertible notes due 2023	(6,000)	0
Principal payments and financing fees on debt	(45,658)	(5,664)
Proceeds from issuance of common stock, net of issuance costs	0	19,771
Proceeds from debt, net of issuance costs	0	68,352
Proceeds from exercise of equity awards	2,925	2,151
Payment of withholding taxes related to net share settlement of equity awards	(4,438)	0
Net cash provided by financing activities	67,816	84,610
Effect of exchange rate changes on cash	(435)	(463)
Net increase in cash and cash equivalents	96,809	87,020
Cash and cash equivalents—Beginning of period	106,237	29,144
Cash and cash equivalents—End of period	203,046	116,164
Supplemental disclosures of non-cash investing and financing activities:
Acquisition funded by issuance of common stock	0	19,219
Acquisition funded by accrued liabilities	0	6,000
Purchases of fixed assets included in accounts payable	926	125
Accrued interest payable unpaid upon exchange of convertible notes due 2023	$ 833	$ 0

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION	9 Months Ended
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION	Sep. 30, 2019
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 connect solar generation, storage and management 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. The year-end condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the U.S. The Company filed audited consolidated financial statements, which included all information and notes necessary for such a complete presentation in conjunction with its Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 15, 2019 (“Form 10‑K”). 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 (loss), stockholders’ equity (deficit) and cash flows for the interim periods indicated. The results of operations for the three and nine months ended September 30, 2019 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, inventory valuation, accrued warranty obligations, and incremental borrowing rate for right-of-use assets and lease liability. 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. Summary of Significant Accounting Policies Except for the accounting policies for leases, updated as a result of adopting new accounting standard related to leases, 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 2018 Annual Report on Form 10-K. Leases The Company determines if an arrangement is or contains a lease at inception. Operating lease assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments over the lease term. Operating lease assets and liabilities are recognized based on the present value of the remaining lease payments discounted using the Company’s incremental borrowing rate. Operating lease assets also include initial direct costs incurred and prepaid lease payments, minus any lease incentives. The Company’s lease terms include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense is recognized on a straight-line basis over the lease term. The Company combines the lease and non-lease components in determining the operating lease assets and liabilities. Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842).” ASU 2016-02 requires an entity to recognize a right-of-use asset and lease liability for all leases with terms of more than 12 months. The guidance requires lessees to recognize all leases, with certain exceptions, on their balance sheets, whether operating or financing, while continuing to recognize the expenses on their income statements in a manner similar to current practice. The guidance states that a lessee must recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying asset for the lease term. On January 1, 2019, the Company adopted ASU 2016-02 using the modified retrospective transition option of applying the new standard at the adoption date for all leases with terms greater than 12 months. The Company elected certain practical expedients upon adoption and as such did not reassess the following: 1) whether any expired or existing contracts are or contain leases; 2) lease classification for any expired or existing leases; 3) initial direct costs for any expired or existing leases; 4) whether existing or expired land easements are or contain leases; and 5) regarding the lease term, from a hindsight perspective, whether or not the Company is reasonably certain to exercise the lease options. However, the Company will evaluate new or modified land easements under the new guidance after the commencement date. The Company also elected the practical expedient to not separate lease and non-lease components. The adoption of ASU 2016-02 on January 1, 2019 resulted in an increase in operating leases, right of use asset of $8.4 million, an increase in other liabilities of $6.8 million, an increase in accrued liabilities and other of $1.5 million and a decrease in other assets of $0.1 million on the Company’s consolidated balance sheets with no impact on the Company’s consolidated statements of operations. In June 2018, the FASB issued ASU 2018-07, “Compensation - Stock Compensation: Improvements to Non-employee Share-Based Payment Accounting.” ASU 2018-07 was issued to provide guidance on share-based payments granted to non-employees in exchange for goods or services used or consumed in an entity’s own operations and supersedes the guidance in ASC 505-50, “Equity-Based Payments to Non-Employees.” ASU 2018-07 aligns much of the guidance on measuring and classifying non-employee awards with that of awards to employees. The Company adopted ASU 2018-07 on January 1, 2019 using the modified retrospective basis. The adopted standard did not have a material impact on the consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Effective 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 is currently evaluating the impact this update will have on its consolidated financial statements.

REVENUE RECOGNITION

9 Months Ended

Sep. 30, 2019

Revenue from Contract with Customer [Abstract]

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 September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
	(In thousands)
Primary geographical markets:
United States	$	150,686	$	54,880	$	328,281	$	148,268
International	29,371		23,122		86,020		75,602
Total	$	180,057	$	78,002	$	414,301	$	223,870

Timing of revenue recognition:
Products delivered at a point in time	$	170,152	$	68,256	$	384,888	$	193,564
Products and services delivered over time	9,905		9,746		29,413		30,306
Total	$	180,057	$	78,002	$	414,301	$	223,870

Contract Balances

Receivables, and contract assets and contract liabilities from contracts with customers are as follows:



	September 30, 2019		December 31, 2018
	(In thousands)
Receivables	$	133,689	$	78,938
Short-term contract assets (Prepaid expenses and other assets)	14,170		13,516
Long-term contract assets (Other assets)	37,211		34,148
Short-term contract liabilities (Deferred revenues)	34,295		33,119
Long-term contract liabilities (Deferred revenues)	85,746		76,911

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, 2019. 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 assets (prepaid expenses and other assets) and contract liabilities (deferred revenues) during the period are as follows (in thousands):



Contract Assets
Balance on December 31, 2018	$	47,664
Amount recognized	(10,988		)
Increase	14,705
Balance as of September 30, 2019	$	51,381



Contract Liabilities
Balance on December 31, 2018	$	110,030
Revenue recognized	(29,413		)
Increase due to billings	39,424
Balance as of September 30, 2019	$	120,041

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, 2019
	(In thousands)
Fiscal year:
2019 (remaining three months)	$	10,045
2020	32,100
2021	25,903
2022	20,881
2023	15,102
Thereafter	16,010
Total	$	120,041

OTHER FINANCIAL INFORMATION

9 Months Ended

Sep. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Other Financial Information

OTHER FINANCIAL INFORMATION

Accounts Receivable, Net

Accounts receivable, net consist of the following:



	September 30, 2019			December 31, 2018
	(In thousands)
Accounts receivable	$	136,002		$	81,076
Allowance for doubtful accounts	(2,313		)	(2,138		)
Accounts receivable, net	$	133,689		$	78,938

Inventory

Inventory consist of the following:



	September 30, 2019		December 31, 2018
	(In thousands)
Raw materials	$	2,140	$	970
Finished goods	28,091		15,297
Total inventory	$	30,231	$	16,267

Accrued Liabilities

Accrued liabilities consist of the following:



	September 30, 2019		December 31, 2018
	(In thousands)
Salaries, commissions, incentive compensation and benefits	$	5,582	$	4,107
Customer rebates and sales incentives	16,848		8,527
Freight	4,887		7,286
Operating lease liabilities, current	3,067		—
Other	9,607		9,090
Total accrued liabilities	$	39,991	$	29,010

GOODWILL AND INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

The Company’s goodwill and purchased intangible assets as of September 30, 2019 and December 31, 2018 are as follows:



	September 30, 2019							December 31, 2018
	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:
Patents and licensed technology	—		—			—		1,665		(1,665		)	—
Developed technology	13,100		(2,547		)	10,553		13,100		(909		)	12,191
Customer relationships	23,100		(2,178		)	20,922		23,100		(271		)	22,829
Total purchased intangible assets	$	36,486	$	(4,725	)	$	31,761	$	38,151	$	(2,845	)	$	35,306

In August 2018, the Company acquired certain finite-lived intangible assets in its acquisition of SunPower Corporation’s (“SunPower”) microinverter business, primarily developed technology and customer relationships, pursuant to an Asset Purchase Agreement (“APA”). See Note 20. “Acquisition,” of the notes to consolidated financial statements included in Item 8 of the Company’s 2018 Annual Report on Form 10-K for additional information related to this acquisition.

Amortization expense related to finite-lived intangible assets are as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
	(In thousands)
Developed technology, and patents and licensed technology	$	546	$	485	$	1,638	$	637
Customer relationships	636		—		1,907		—
Total amortization expense	$	1,182	$	485	$	3,545	$	637

Amortization of developed technology, patents and licensed technology is primarily recorded to sales and marketing expense. The developed technology acquired from the Company’s acquisition of SunPower’s microinverter business is embedded in the microinverters that SunPower sells 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”) negotiated 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

9 Months Ended

Sep. 30, 2019

Product Warranties Disclosures [Abstract]

WARRANTY OBLIGATIONS

The Company’s warranty activities were as follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
	(In thousands)
Warranty obligations, beginning of period	$	32,994		$	31,642		$	31,294		$	29,816
Accruals for warranties issued during period	1,571			689			3,741			2,222
Changes in estimates	3,884			1,997			5,387			4,825
Settlements	(3,780		)	(2,467		)	(8,282		)	(6,242		)
Increase due to accretion expense	562			514			1,663			1,453
Other	(607		)	(191		)	821			110
Warranty obligations, end of period	34,624			32,184			34,624			32,184
Less: current portion	(8,757		)	(9,117		)	(8,757		)	(9,117		)
Noncurrent	$	25,867		$	23,067		$	25,867		$	23,067

FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

The accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.

The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An asset’s or liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value:


•	Level 1—Valuations based on quoted prices in active markets for identical assets or liabilities that the Company is able to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of such assets or liabilities do not entail a significant degree of judgment.


•	Level 2—Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.


•	Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

The following table presents the Company’s liabilities that were measured at fair value on a recurring basis and its categorization within the fair value hierarchy.



	Fair Value Hierarchy	September 30, 2019		December 31, 2018
		(In thousands)
Warranty obligations
Current		$	5,647	$	4,288
Non-current		11,337		7,469
Total warranty obligations measured at fair value	Level 3	$	16,984	$	11,757

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 September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
	(In thousands)
Balance at beginning of period	$	14,856		$	12,837		$	11,757		$	9,791
Accruals for warranties issued during period	1,571			689			3,741			2,222
Changes in estimates	2,676			853			3,536			2,848
Settlements	(2,074		)	(1,135		)	(4,534		)	(2,857		)
Increase due to accretion expense	562			514			1,663			1,453
Other	(607		)	(191		)	821			110
Balance at end of period	$	16,984		$	13,567		$	16,984		$	13,567

Quantitative and Qualitative Information about Level 3 Fair Value Measurements

As of September 30, 2019 and December 31, 2018, 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, 2019	December 31, 2018
Warranty obligations for microinverters sold since January 1, 2014	Discounted cash flows	Profit element and risk premium	14%	16%
	Discounted cash flows	Credit-adjusted risk-free rate	16%	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 $0.1 million increase to the liability. Decreasing the profit element and risk premium by 100 basis points would result in a $0.1 million reduction of the liability. Increasing the discount rate by 100 basis points would result in a $0.7 million reduction of the liability. Decreasing the discount rate by 100 basis points would result in a $0.8 million increase to the liability.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

RESTRUCTURING

9 Months Ended

Sep. 30, 2019

Restructuring and Related Activities [Abstract]

RESTRUCTURING

Restructuring expense consist of the following:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019			2018
	(In thousands)
Redundancy and employee severance and benefit arrangements	$	469	$	613	$	1,568		$	613
Asset impairments	—		1,636		—			1,636
Lease loss reserves	—		339		(100		)	339
Total restructuring charges	$	469	$	2,588	$	1,468		$	2,588

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 expects to complete this restructuring in 2019.

The following table provides information regarding changes in the Company’s 2018 Plan accrued restructuring balance for the periods indicated.



	Redundancy and Employee Severance and Benefits			Lease Loss Reserves and Contractual Obligations			Total
	(In thousands)
Balance as of December 31, 2018	$	904		$	288		$	1,192
Charges	1,568			—			1,568
Cash payments	(1,620		)	—			(1,620		)
Non-cash settlement and other	(852		)	(288		)	(1,140		)
Balance as of September 30, 2019	$	—		$	—		$	—

2016 Plan

In the third quarter of 2016, the Company began implementing restructuring actions (the “2016 Plan”) to lower its operating expenses. The restructuring actions have included reductions in the Company’s global workforce, the elimination of certain non-core projects, consolidation of office space at the Company’s corporate headquarters and the engagement of management consultants to assist the Company in making organizational and structural changes to improve operational efficiencies and reduce expenses. The Company completed its restructuring activities under the 2016 Plan in 2017.

The following table provides information regarding changes in the Company’s 2016 Plan accrued restructuring balance for the periods indicated.



	Lease Loss Reserves and Contractual Obligations
	(In thousands)
Balance as of December 31, 2018	$	1,591
Other ⁽¹⁾	(1,591		)
Balance as of September 30, 2019	$	—

(1)

Adoption of ASU 2016-02.

DEBT

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

DEBT

The following table provides information regarding the Company’s long-term debt.



	September 30, 2019			December 31, 2018
	(In thousands)
Convertible notes
Notes due 2024	$	132,000		$	—
Less: unamortized discount and issuance costs	(37,484		)	—
Carrying amount of Notes due 2024	94,516			—

Notes due 2023	5,000			65,000
Less: unamortized issuance costs	(152		)	(2,361		)
Carrying amount of Notes due 2023	4,848			62,639

Term loan	—			41,524
Less: unamortized discount and issuance costs	—			(1,059		)
Carrying amount of term loan	—			40,465

Sale of long-term financing receivable recorded as debt	4,698			6,679
Total carrying amount of debt	104,062			109,783
Less: current portion term loan	—			(25,417		)
Less: current portion of long-term financing receivable recorded as debt	(3,084		)	(2,738		)
Long-term debt	$	100,978		$	81,628

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 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.

Upon conversion of any of the notes, the Company will pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and common stock, at the Company’s election.

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.

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, 2019, the unamortized deferred issuance cost for the Notes due 2024 was $3.1 million on the condensed consolidated balance sheet.

The following table presents the total amount of interest cost recognized relating to the Notes due 2024:



	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
	(In thousands)
Contractual interest expense	$	330	$	422
Amortization of debt discount	1,523		1,939
Amortization of debt issuance costs	165		210
Total interest cost recognized	$	2,018	$	2,571

The effective interest rate on the liability component Notes due 2024 was 7.75% for each of the three and nine months ended September 30, 2019, which remain unchanged from the date of issuance. The remaining unamortized debt discount was $34.4 million as of September 30, 2019, will be amortized over approximately 4.7 years.

The Company carries the Notes due 2024 at face value less unamortized discount and issuance costs on its condensed consolidated balance sheet. The fair value of the Notes due 2024 was determined to be $201.3 million 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 2024 to be a Level 2 measurement as they are not actively traded.

Convertible Note 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, 2019, 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, 2019, the Warrants had not been exercised and remained outstanding.

Given that the transactions meet certain accounting criteria, the convertible note hedge transactions and the warrants 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 September 30, 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.

During the nine months ended September 30, 2019, the Company recognized $6.0 million inducement cost in other expense, net on the Company’s condensed consolidated statement of operations and reclassed $2.0 million of deferred issuance costs, offset by $0.8 million in accrued interest in additional paid in capital on the Company’s condensed consolidated balance sheet as of September 30, 2019 related to the exchange of $60.0 million aggregate principal amount of the Notes due 2023 consummated by the Company on June 5, 2019.

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 September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
	(In thousands)
Contractual interest expense	$	43	$	325	$	1,176	$	325
Amortization of debt issuance costs	10		64		235		64
Total interest costs recognized	$	53	$	389	$	1,411	$	389

Term Loan

In July 2016, the Company entered into a Loan and Security Agreement (the “Original Term Loan Agreement”) with lenders that are affiliates of Tennenbaum Capital Partners, LLC. In February 2017, the Company entered into an Amended and Restated Loan and Security Agreement (the “Loan Agreement”) that amended and restated the Original Term Loan Agreement. The Loan Agreement provided for a $25.0 million secured term loan to the Company (the “New Term Loan”), which is in addition to the $25.0 million secured term loan borrowed by the Company under the Original Term Loan Agreement (together with the “New Term Loan” the “Term Loans”).

On January 28, 2019, the Company repaid in full the remaining principal amount of the Term Loans of approximately $39.5 million plus accrued interest and fees.

COMMITMENTS AND CONTINGENT LIABILITIES

9 Months Ended

Sep. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENT LIABILITIES

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 September 30, 2019		Nine Months Ended September 30, 2019
	(In thousands)
Operating lease costs	$	1,161	$	2,909

The components of lease liabilities are presented as follows:



	September 30, 2019
	(In thousands)
Operating lease liabilities, current (Accrued liabilities)	$	3,067
Operating lease liabilities, noncurrent (Other liabilities)	10,268
Total operating lease liabilities	$	13,335

Supplemental lease information:
Weighted average remaining lease term	5.7 years
Weighted average discount rate	8.6%

Supplemental cash flow and other information related to operating leases, are as follows:



	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,019	$	2,613

Non-cash investing activities:
Lease liabilities arising from obtaining right-of-use assets	$	—	$	4,834

Undiscounted cash flows of operating lease liabilities as of September 30, 2019 are as follows:



	Lease Amounts
	(In thousands)
Year:
2019 (remaining three months)	$	1,019
2020	4,137
2021	4,217
2022	2,906
2023	2,169
2024 and thereafter	1,586
Total lease payments	16,034
Less: imputed lease interest	(2,699		)
Total lease liabilities	$	13,335

As previously disclosed in the Company’s Annual Report on Form 10-K and under the previous lease accounting standard ASC 840, “Leases,” the aggregate future minimum lease payments under the Company’s noncancelable operating leases, as of December 31, 2018, are as follows:



	Lease Amounts
	(In thousands)
Year:
2019	$	3,738
2020	3,532
2021	3,276
2022	1,810
2023	945
Thereafter	1,252
Total	14,553
Sublease income to be recognized in the future under noncancelable subleases	(922		)
Net operating lease minimum payments	$	13,631

Litigation

From time-to-time, the Company may be involved in litigation relating to claims arising out of its operations. The Company is not currently involved in any material legal proceedings; however, the Company may be involved in material legal proceedings in the future. Such matters are subject to uncertainty and there can be no assurance that such legal proceedings will not have a material effect on its business, results of operations, financial position or cash flows.

STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2019

Share-based Payment Arrangement [Abstract]

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 September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
	(In thousands)
Cost of revenues	$	497	$	330	$	1,114	$	945
Research and development	1,411		878		3,255		2,645
Sales and marketing	1,541		1,151		3,900		2,509
General and administrative	1,996		1,692		5,013		3,812
Restructuring	331		—		718		—
Total	$	5,776	$	4,051	$	14,000	$	9,911

The following table summarizes the various types of stock-based compensation expense for the periods presented.



	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
	(In thousands)
Stock options, RSUs, and PSUs	$	5,546	$	3,708	$	13,528	$	9,001
Employee stock purchase plan	230		343		472		910
Total	$	5,776	$	4,051	$	14,000	$	9,911

As of September 30, 2019, there was approximately $33.6 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 2.3 years.

No income tax benefit has been recognized relating to stock-based compensation expense and no tax benefits have been realized from exercised stock options for the three and nine months ended September 30, 2019.

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 September 30,		Nine Months Ended September 30,
	2019	2018	2019			2018
Weighted average grant date fair value	**	**	$	9.16		$	2.83
Expected term (in years)	**	**	3.8			4.0
Expected volatility	**	**	89.1		%	88.5		%
Annual risk-free rate of return	**	**	2.1		%	2.6		%
Dividend yield	**	**	—		%	—		%

** No options were granted during the three months ended September 30, 2019 and 2018.

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 Shares Outstanding		Weighted- Average Exercise Price per Share		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value ⁽¹⁾
	(In thousands)				(Years)	(In thousands)
Outstanding at December 31, 2018	6,772		$	1.76
Granted	43		14.58
Exercised	(2,222	)	1.20			$	21,844
Canceled	(102	)	4.07
Outstanding at September 30, 2019	4,491		$	2.11	4.5	$	90,358
Vested and expected to vest at September 30, 2019	4,491		$	2.11	4.5	$	90,358
Exercisable at September 30, 2019	3,085		$	2.32	4.3	$	61,415

(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, 2019 is based on the closing price of the Company’s stock fair value on September 30, 2019 or the earlier of the last trading day prior to September 30, 2019, if September 30, 2019 is a non-trading day. The Company’s stock fair value used in this computation was $22.23 per share.

The following table summarizes information about stock options outstanding at September 30, 2019.



	Options Outstanding				Options Exercisable
Range of Exercise Prices	Number of Shares	Weighted- Average Remaining Life	Weighted- Average Exercise Price		Number of Shares	Weighted- Average Exercise Price
	(In thousands)	(Years)			(In thousands)
$0.64 —– $1.11	848	5.2	$	0.82	567	$	0.78
$1.29 —– $1.29	1,000	5.0	1.29		500	1.29
$1.31 —– $1.31	1,601	4.5	1.31		1,205	1.31
$1.37 —– $7.68	899	3.5	4.17		699	4.66
$7.77 —– $14.58	143	3.8	11.57		114	10.82
Total	4,491	4.5	2.11		3,085	2.32

Restricted Stock Units

The following is a summary of RSU activity.



	Number of Shares Outstanding		Weighted- Average Fair Value per Share at Grant Date		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value ⁽¹⁾
	(In thousands)				(Years)	(In thousands)
Outstanding at December 31, 2018	4,352		$	3.52
Granted	1,997		10.86
Vested	(1,317	)	3.62			$	18,853
Canceled	(461	)	4.54
Outstanding at September 30, 2019	4,571		$	6.60	1.3	$	101,604
Expected to vest at September 30, 2019	4,571		$	6.60	1.3	$	101,604

(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, 2019 is based on the closing price of the Company’s stock on September 30, 2019 or the earlier of the last trading day prior to September 30, 2019, if September 30, 2019 is a non-trading day. The Company’s stock fair value used in this computation was $22.23 per share.

Performance Stock Units

The following is a summary of PSU activity.



	Number of Shares Outstanding		Weighted- Average Fair Value per Share at Grant Date		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value ⁽¹⁾
	(In thousands)				(Years)	(In thousands)
Outstanding at December 31, 2018	1,330		$	4.66
Granted	1,052		9.48
Vested	(1,026	)	4.63			$	9,925
Canceled	(364	)	5.16
Outstanding at September 30, 2019	992		$	9.63	0.5	$	22,050

(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, 2019 is based on the closing price of the Company’s stock on September 30, 2019 or the earlier of the last trading day prior to September 30, 2019, if September 30, 2019 is a non-trading day. The Company’s stock fair value used in this computation was $22.23 per share.

INCOME TAXES	9 Months Ended
INCOME TAXES	Sep. 30, 2019
Income Tax Disclosure [Abstract]
INCOME TAXES	INCOME TAXES The Company used the discrete tax approach in calculating the tax expense for the three and nine months ended September 30, 2019 and 2018 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. The Company intends to continue maintaining a full valuation allowance on its deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances. If the Company continues to maintain profitability, there is a reasonable possibility that, within the next 12 months, sufficient positive evidence may become available to reach a conclusion that a significant portion, or all, of the valuation allowance will no longer be needed. As such, the Company may release a significant portion, or all, of its valuation allowance against its deferred tax assets within the next 12 months. This release, if any, would result in the recognition of certain deferred tax assets and a decrease to income tax expense for the period such release is recorded.

NET INCOME (LOSS) PER SHARE

9 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

NET INCOME (LOSS) PER SHARE

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) 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 employee stock purchase program (“ESPP”), the Notes due 2023, the Notes due 2024 and warrants issued in conjunction with the Notes due 2024. 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, warrants, Notes due 2024 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 (loss) per share.

The following table presents the computation of basic and diluted net income (loss) per share for the periods presented.



	Three Months Ended September 30,					Nine Months Ended September 30,
	2019		2018			2019		2018
	(In thousands, except per share data)
Numerator:
Net income (loss)	$	31,099	$	(3,470	)	$	44,482	$	(12,336	)
Notes due 2023 interest and financing costs, net	39		—			1,046		—
Adjusted net income (loss)	$	31,138	$	(3,470	)	$	45,528	$	(12,336	)

Denominator:
Shares used in basic per share amounts:
Weighted average common shares outstanding	122,123		102,798			114,720		97,257

Shares used in diluted per share amounts:
Weighted average common shares outstanding	122,123		102,798			114,720		97,257
Effect of dilutive securities:
Employee stock-based awards	9,200		—			8,937		—
Warrants	100		—			—		—
Notes due 2024	1,288		—			385		—
Notes due 2023	900		—			7,072		—
Weighted average common shares outstanding for diluted calculation	133,611		102,798			131,114		97,257

Basic and diluted net income (loss) per share
Net income (loss) per share, basic	$	0.25	$	(0.03	)	$	0.39	$	(0.13	)
Net income (loss) per share, diluted	$	0.23	$	(0.03	)	$	0.35	$	(0.13	)

The following outstanding shares of common stock equivalents were excluded from the calculation of the diluted net income (loss) per share attributable to common stockholders because their effect would have been antidilutive.



	Three Months Ended September 30,		Nine Months Ended September 30,
	2019	2018	2019	2018
	(In thousands)
Employee stock-based awards	11	13,328	112	13,077

Diluted earnings per shares for the three and nine months ended September 30, 2019 includes the dilutive effect of stock options, RSUs, PSUs, and 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 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 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 $20.5010 per share for the Notes due 2024. The Company’s weighted average common stock price since the issuance of the Notes due 2024 was above the conversion price, resulting in an impact on the diluted net income per share.

Diluted earnings per shares for the three and nine months ended September 30, 2018, excludes potential common stock issuable under stock options, RSUs, PSUs, and shares to be purchased under the ESPP and the Notes due 2023, as the Company incurred a net loss during these periods and including such shares would have been antidilutive.

RELATED PARTY	9 Months Ended
RELATED PARTY	Sep. 30, 2019
Related Party Transactions [Abstract]
Related Party	RELATED PARTY The Company sells products to SunPower under the August 2018 MSA, which as of September 30, 2019 and December 31, 2018 via its wholly owned subsidiary, held 6.5 million shares and 7.5 million shares, respectively, of the Company’s common stock. Revenue recognized under the MSA for the three and nine months ended September 30, 2019 was $29.5 million and $50.7 million, respectively, net of amortization of the customer relationship intangible asset (see Note 4. “Goodwill and Intangible Assets”). At September 30, 2019 and December 31, 2018, the Company had accounts receivable of $24.7 million and $10.3 million, respectively, from SunPower. 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, 2019 and December 31, 2018, $5.0 million aggregate principal amount of the Notes due 2023 were outstanding. See Note 8. “Debt” for additional information related to this purchase.

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Policies)

9 Months Ended

Sep. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

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. The year-end condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the U.S. The Company filed audited consolidated financial statements, which included all information and notes necessary for such a complete presentation in conjunction with its Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 15, 2019 (“Form 10‑K”).

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Significant estimates and assumptions reflected in the financial statements include revenue recognition, inventory valuation, accrued warranty obligations, and incremental borrowing rate for right-of-use assets and lease liability. 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.

Leases

The Company determines if an arrangement is or contains a lease at inception. Operating lease assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments over the lease term.

Operating lease assets and liabilities are recognized based on the present value of the remaining lease payments discounted using the Company’s incremental borrowing rate. Operating lease assets also include initial direct costs incurred and prepaid lease payments, minus any lease incentives. The Company’s lease terms include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense is recognized on a straight-line basis over the lease term.

The Company combines the lease and non-lease components in determining the operating lease assets and liabilities.

New Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842).” ASU 2016-02 requires an entity to recognize a right-of-use asset and lease liability for all leases with terms of more than 12 months. The guidance requires lessees to recognize all leases, with certain exceptions, on their balance sheets, whether operating or financing, while continuing to recognize the expenses on their income statements in a manner similar to current practice. The guidance states that a lessee must recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying asset for the lease term. On January 1, 2019, the Company adopted ASU 2016-02 using the modified retrospective transition option of applying the new standard at the adoption date for all leases with terms greater than 12 months. The Company elected certain practical expedients upon adoption and as such did not reassess the following: 1) whether any expired or existing contracts are or contain leases; 2) lease classification for any expired or existing leases; 3) initial direct costs for any expired or existing leases; 4) whether existing or expired land easements are or contain leases; and 5) regarding the lease term, from a hindsight perspective, whether or not the Company is reasonably certain to exercise the lease options. However, the Company will evaluate new or modified land easements under the new guidance after the commencement date. The Company also elected the practical expedient to not separate lease and non-lease components. The adoption of ASU 2016-02 on January 1, 2019 resulted in an increase in operating leases, right of use asset of $8.4 million, an increase in other liabilities of $6.8 million, an increase in accrued liabilities and other of $1.5 million and a decrease in other assets of $0.1 million on the Company’s consolidated balance sheets with no impact on the Company’s consolidated statements of operations.

In June 2018, the FASB issued ASU 2018-07, “Compensation - Stock Compensation: Improvements to Non-employee Share-Based Payment Accounting.” ASU 2018-07 was issued to provide guidance on share-based payments granted to non-employees in exchange for goods or services used or consumed in an entity’s own operations and supersedes the guidance in ASC 505-50, “Equity-Based Payments to Non-Employees.” ASU 2018-07 aligns much of the guidance on measuring and classifying non-employee awards with that of awards to employees. The Company adopted ASU 2018-07 on January 1, 2019 using the modified retrospective basis. The adopted standard did not have a material impact on the consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Effective

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 is currently evaluating the impact this update will have on its consolidated financial statements.

Fair Value Measurement


•	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

REVENUE RECOGNITION (Tables)

9 Months Ended

Sep. 30, 2019

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 September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
	(In thousands)
Primary geographical markets:
United States	$	150,686	$	54,880	$	328,281	$	148,268
International	29,371		23,122		86,020		75,602
Total	$	180,057	$	78,002	$	414,301	$	223,870

Timing of revenue recognition:
Products delivered at a point in time	$	170,152	$	68,256	$	384,888	$	193,564
Products and services delivered over time	9,905		9,746		29,413		30,306
Total	$	180,057	$	78,002	$	414,301	$	223,870

Summary of Contract Assets and Contract Liabilities, and Changes in Balances from Contracts with Customers

Significant changes in the balances of contract assets (prepaid expenses and other assets) and contract liabilities (deferred revenues) during the period are as follows (in thousands):



Contract Assets
Balance on December 31, 2018	$	47,664
Amount recognized	(10,988		)
Increase	14,705
Balance as of September 30, 2019	$	51,381



Contract Liabilities
Balance on December 31, 2018	$	110,030
Revenue recognized	(29,413		)
Increase due to billings	39,424
Balance as of September 30, 2019	$	120,041

Receivables, and contract assets and contract liabilities from contracts with customers are as follows:



	September 30, 2019		December 31, 2018
	(In thousands)
Receivables	$	133,689	$	78,938
Short-term contract assets (Prepaid expenses and other assets)	14,170		13,516
Long-term contract assets (Other assets)	37,211		34,148
Short-term contract liabilities (Deferred revenues)	34,295		33,119
Long-term contract liabilities (Deferred revenues)	85,746		76,911

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, 2019
	(In thousands)
Fiscal year:
2019 (remaining three months)	$	10,045
2020	32,100
2021	25,903
2022	20,881
2023	15,102
Thereafter	16,010
Total	$	120,041

OTHER FINANCIAL INFORMATION (Tables)

9 Months Ended

Sep. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Accounts Receivable

Accounts receivable, net consist of the following:



	September 30, 2019			December 31, 2018
	(In thousands)
Accounts receivable	$	136,002		$	81,076
Allowance for doubtful accounts	(2,313		)	(2,138		)
Accounts receivable, net	$	133,689		$	78,938

Schedule of Inventory

Inventory consist of the following:



	September 30, 2019		December 31, 2018
	(In thousands)
Raw materials	$	2,140	$	970
Finished goods	28,091		15,297
Total inventory	$	30,231	$	16,267

Schedule of Accrued Liabilities

Accrued liabilities consist of the following:



	September 30, 2019		December 31, 2018
	(In thousands)
Salaries, commissions, incentive compensation and benefits	$	5,582	$	4,107
Customer rebates and sales incentives	16,848		8,527
Freight	4,887		7,286
Operating lease liabilities, current	3,067		—
Other	9,607		9,090
Total accrued liabilities	$	39,991	$	29,010

GOODWILL AND INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill and Intangible Assets

The Company’s goodwill and purchased intangible assets as of September 30, 2019 and December 31, 2018 are as follows:



	September 30, 2019							December 31, 2018
	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:
Patents and licensed technology	—		—			—		1,665		(1,665		)	—
Developed technology	13,100		(2,547		)	10,553		13,100		(909		)	12,191
Customer relationships	23,100		(2,178		)	20,922		23,100		(271		)	22,829
Total purchased intangible assets	$	36,486	$	(4,725	)	$	31,761	$	38,151	$	(2,845	)	$	35,306

Schedule of Amortization Expense

Amortization expense related to finite-lived intangible assets are as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
	(In thousands)
Developed technology, and patents and licensed technology	$	546	$	485	$	1,638	$	637
Customer relationships	636		—		1,907		—
Total amortization expense	$	1,182	$	485	$	3,545	$	637

WARRANTY OBLIGATIONS (Tables)

9 Months Ended

Sep. 30, 2019

Product Warranties Disclosures [Abstract]

Summary of Warranty Activities

The Company’s warranty activities were as follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
	(In thousands)
Warranty obligations, beginning of period	$	32,994		$	31,642		$	31,294		$	29,816
Accruals for warranties issued during period	1,571			689			3,741			2,222
Changes in estimates	3,884			1,997			5,387			4,825
Settlements	(3,780		)	(2,467		)	(8,282		)	(6,242		)
Increase due to accretion expense	562			514			1,663			1,453
Other	(607		)	(191		)	821			110
Warranty obligations, end of period	34,624			32,184			34,624			32,184
Less: current portion	(8,757		)	(9,117		)	(8,757		)	(9,117		)
Noncurrent	$	25,867		$	23,067		$	25,867		$	23,067

FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the Company’s liabilities that were measured at fair value on a recurring basis and its categorization within the fair value hierarchy.



	Fair Value Hierarchy	September 30, 2019		December 31, 2018
		(In thousands)
Warranty obligations
Current		$	5,647	$	4,288
Non-current		11,337		7,469
Total warranty obligations measured at fair value	Level 3	$	16,984	$	11,757

Schedule of Changes in Nonfinancial Liabilities Related to Warrant Obligations Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs



	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
	(In thousands)
Balance at beginning of period	$	14,856		$	12,837		$	11,757		$	9,791
Accruals for warranties issued during period	1,571			689			3,741			2,222
Changes in estimates	2,676			853			3,536			2,848
Settlements	(2,074		)	(1,135		)	(4,534		)	(2,857		)
Increase due to accretion expense	562			514			1,663			1,453
Other	(607		)	(191		)	821			110
Balance at end of period	$	16,984		$	13,567		$	16,984		$	13,567

Summary of Significant Unobservable Inputs used in the Fair Value Measurement of Liabilities Designated as Level 3

As of September 30, 2019 and December 31, 2018, 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, 2019	December 31, 2018
Warranty obligations for microinverters sold since January 1, 2014	Discounted cash flows	Profit element and risk premium	14%	16%
	Discounted cash flows	Credit-adjusted risk-free rate	16%	16%

RESTRUCTURING (Tables)

9 Months Ended

Sep. 30, 2019

Restructuring and Related Activities [Abstract]

Restructuring and Related Costs

Restructuring expense consist of the following:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019			2018
	(In thousands)
Redundancy and employee severance and benefit arrangements	$	469	$	613	$	1,568		$	613
Asset impairments	—		1,636		—			1,636
Lease loss reserves	—		339		(100		)	339
Total restructuring charges	$	469	$	2,588	$	1,468		$	2,588

Schedule of Restructuring Reserve by Type of Cost

The following table provides information regarding changes in the Company’s 2018 Plan accrued restructuring balance for the periods indicated.



	Redundancy and Employee Severance and Benefits			Lease Loss Reserves and Contractual Obligations			Total
	(In thousands)
Balance as of December 31, 2018	$	904		$	288		$	1,192
Charges	1,568			—			1,568
Cash payments	(1,620		)	—			(1,620		)
Non-cash settlement and other	(852		)	(288		)	(1,140		)
Balance as of September 30, 2019	$	—		$	—		$	—

The following table provides information regarding changes in the Company’s 2016 Plan accrued restructuring balance for the periods indicated.



	Lease Loss Reserves and Contractual Obligations
	(In thousands)
Balance as of December 31, 2018	$	1,591
Other ⁽¹⁾	(1,591		)
Balance as of September 30, 2019	$	—

(1)

Adoption of ASU 2016-02.

DEBT (Tables)

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Schedule of Debt

The following table provides information regarding the Company’s long-term debt.



	September 30, 2019			December 31, 2018
	(In thousands)
Convertible notes
Notes due 2024	$	132,000		$	—
Less: unamortized discount and issuance costs	(37,484		)	—
Carrying amount of Notes due 2024	94,516			—

Notes due 2023	5,000			65,000
Less: unamortized issuance costs	(152		)	(2,361		)
Carrying amount of Notes due 2023	4,848			62,639

Term loan	—			41,524
Less: unamortized discount and issuance costs	—			(1,059		)
Carrying amount of term loan	—			40,465

Sale of long-term financing receivable recorded as debt	4,698			6,679
Total carrying amount of debt	104,062			109,783
Less: current portion term loan	—			(25,417		)
Less: current portion of long-term financing receivable recorded as debt	(3,084		)	(2,738		)
Long-term debt	$	100,978		$	81,628

The following table presents the total amount of interest cost recognized relating to the Notes due 2024:



	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
	(In thousands)
Contractual interest expense	$	330	$	422
Amortization of debt discount	1,523		1,939
Amortization of debt issuance costs	165		210
Total interest cost recognized	$	2,018	$	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 September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
	(In thousands)
Contractual interest expense	$	43	$	325	$	1,176	$	325
Amortization of debt issuance costs	10		64		235		64
Total interest costs recognized	$	53	$	389	$	1,411	$	389

COMMITMENTS AND CONTINGENT LIABILITIES (Tables)

9 Months Ended

Sep. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Components of Lease

The components of lease expense are presented as follows:



	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
	(In thousands)
Operating lease costs	$	1,161	$	2,909

The components of lease liabilities are presented as follows:



	September 30, 2019
	(In thousands)
Operating lease liabilities, current (Accrued liabilities)	$	3,067
Operating lease liabilities, noncurrent (Other liabilities)	10,268
Total operating lease liabilities	$	13,335

Supplemental lease information:
Weighted average remaining lease term	5.7 years
Weighted average discount rate	8.6%

Supplemental cash flow and other information related to operating leases, are as follows:



	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,019	$	2,613

Non-cash investing activities:
Lease liabilities arising from obtaining right-of-use assets	$	—	$	4,834

Schedule of Future Minimum Rental Payments for Operating Leases

Undiscounted cash flows of operating lease liabilities as of September 30, 2019 are as follows:



	Lease Amounts
	(In thousands)
Year:
2019 (remaining three months)	$	1,019
2020	4,137
2021	4,217
2022	2,906
2023	2,169
2024 and thereafter	1,586
Total lease payments	16,034
Less: imputed lease interest	(2,699		)
Total lease liabilities	$	13,335

Schedule of Future Minimum Rental Payments for Operating Leases (Prior Year)



	Lease Amounts
	(In thousands)
Year:
2019	$	3,738
2020	3,532
2021	3,276
2022	1,810
2023	945
Thereafter	1,252
Total	14,553
Sublease income to be recognized in the future under noncancelable subleases	(922		)
Net operating lease minimum payments	$	13,631

STOCK-BASED COMPENSATION (Tables)

9 Months Ended

Sep. 30, 2019

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 September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
	(In thousands)
Cost of revenues	$	497	$	330	$	1,114	$	945
Research and development	1,411		878		3,255		2,645
Sales and marketing	1,541		1,151		3,900		2,509
General and administrative	1,996		1,692		5,013		3,812
Restructuring	331		—		718		—
Total	$	5,776	$	4,051	$	14,000	$	9,911

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 September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
	(In thousands)
Stock options, RSUs, and PSUs	$	5,546	$	3,708	$	13,528	$	9,001
Employee stock purchase plan	230		343		472		910
Total	$	5,776	$	4,051	$	14,000	$	9,911

Summary of the Weighted-Average Grant Date Fair Value of Options Granted



	Three Months Ended September 30,		Nine Months Ended September 30,
	2019	2018	2019			2018
Weighted average grant date fair value	**	**	$	9.16		$	2.83
Expected term (in years)	**	**	3.8			4.0
Expected volatility	**	**	89.1		%	88.5		%
Annual risk-free rate of return	**	**	2.1		%	2.6		%
Dividend yield	**	**	—		%	—		%

Summary of Stock Option Activity

The following is a summary of stock option activity.



	Number of Shares Outstanding		Weighted- Average Exercise Price per Share		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value ⁽¹⁾
	(In thousands)				(Years)	(In thousands)
Outstanding at December 31, 2018	6,772		$	1.76
Granted	43		14.58
Exercised	(2,222	)	1.20			$	21,844
Canceled	(102	)	4.07
Outstanding at September 30, 2019	4,491		$	2.11	4.5	$	90,358
Vested and expected to vest at September 30, 2019	4,491		$	2.11	4.5	$	90,358
Exercisable at September 30, 2019	3,085		$	2.32	4.3	$	61,415

(1)

Summary of Stock Option Outstanding

The following table summarizes information about stock options outstanding at September 30, 2019.



	Options Outstanding				Options Exercisable
Range of Exercise Prices	Number of Shares	Weighted- Average Remaining Life	Weighted- Average Exercise Price		Number of Shares	Weighted- Average Exercise Price
	(In thousands)	(Years)			(In thousands)
$0.64 —– $1.11	848	5.2	$	0.82	567	$	0.78
$1.29 —– $1.29	1,000	5.0	1.29		500	1.29
$1.31 —– $1.31	1,601	4.5	1.31		1,205	1.31
$1.37 —– $7.68	899	3.5	4.17		699	4.66
$7.77 —– $14.58	143	3.8	11.57		114	10.82
Total	4,491	4.5	2.11		3,085	2.32

Summary of Restricted Stock Unit Activity

The following is a summary of RSU activity.



	Number of Shares Outstanding		Weighted- Average Fair Value per Share at Grant Date		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value ⁽¹⁾
	(In thousands)				(Years)	(In thousands)
Outstanding at December 31, 2018	4,352		$	3.52
Granted	1,997		10.86
Vested	(1,317	)	3.62			$	18,853
Canceled	(461	)	4.54
Outstanding at September 30, 2019	4,571		$	6.60	1.3	$	101,604
Expected to vest at September 30, 2019	4,571		$	6.60	1.3	$	101,604

(1)

Share-based Compensation, Performance Shares Award Outstanding Activity

The following is a summary of PSU activity.



	Number of Shares Outstanding		Weighted- Average Fair Value per Share at Grant Date		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value ⁽¹⁾
	(In thousands)				(Years)	(In thousands)
Outstanding at December 31, 2018	1,330		$	4.66
Granted	1,052		9.48
Vested	(1,026	)	4.63			$	9,925
Canceled	(364	)	5.16
Outstanding at September 30, 2019	992		$	9.63	0.5	$	22,050

(1)

NET INCOME (LOSS) PER SHARE (Tables)

9 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

Schedule of Computation of Basic and Diluted Net Loss Per Share

The following table presents the computation of basic and diluted net income (loss) per share for the periods presented.



	Three Months Ended September 30,					Nine Months Ended September 30,
	2019		2018			2019		2018
	(In thousands, except per share data)
Numerator:
Net income (loss)	$	31,099	$	(3,470	)	$	44,482	$	(12,336	)
Notes due 2023 interest and financing costs, net	39		—			1,046		—
Adjusted net income (loss)	$	31,138	$	(3,470	)	$	45,528	$	(12,336	)

Denominator:
Shares used in basic per share amounts:
Weighted average common shares outstanding	122,123		102,798			114,720		97,257

Shares used in diluted per share amounts:
Weighted average common shares outstanding	122,123		102,798			114,720		97,257
Effect of dilutive securities:
Employee stock-based awards	9,200		—			8,937		—
Warrants	100		—			—		—
Notes due 2024	1,288		—			385		—
Notes due 2023	900		—			7,072		—
Weighted average common shares outstanding for diluted calculation	133,611		102,798			131,114		97,257

Basic and diluted net income (loss) per share
Net income (loss) per share, basic	$	0.25	$	(0.03	)	$	0.39	$	(0.13	)
Net income (loss) per share, diluted	$	0.23	$	(0.03	)	$	0.35	$	(0.13	)

Schedule of Potentially Dilutive Securities Excluded from the Computation of Diluted Net Loss Per Share



	Three Months Ended September 30,		Nine Months Ended September 30,
	2019	2018	2019	2018
	(In thousands)
Employee stock-based awards	11	13,328	112	13,077

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION - Impact of Recently Adopted Accounting Pronouncements (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Jan. 01, 2019	Dec. 31, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease, right of use asset	$ 11,407
Other liabilities	11,970		$ 3,250
Accrued liabilities	39,991		29,010
Other assets	$ 40,669		$ 36,548
Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease, right of use asset		$ 8,400
Other liabilities		6,800
Accrued liabilities		1,500
Other assets		$ (100)

REVENUE RECOGNITION - Narrative (Details) - USD ($)	3 Months Ended	9 Months Ended
REVENUE RECOGNITION - Narrative (Details) - USD ($)	Sep. 30, 2019	Sep. 30, 2019
Revenue from Contract with Customer [Abstract]
Contract asset impairment charges	$ 0	$ 0

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, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Net revenues	$ 180,057	$ 78,002	$ 414,301	$ 223,870
Products delivered at a point in time
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Net revenues	170,152	68,256	384,888	193,564
Products and services delivered over time
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Net revenues	9,905	9,746	29,413	30,306
United States
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Net revenues	150,686	54,880	328,281	148,268
International
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Net revenues	$ 29,371	$ 23,122	$ 86,020	$ 75,602

REVENUE RECOGNITION - Summary of Contract Assets and Contract Liabilities from Contracts with Customers (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Revenue from Contract with Customer [Abstract]
Receivables	$ 133,689	$ 78,938
Short-term contract assets (Prepaid expenses and other assets)	14,170	13,516
Long-term contract assets (Other assets)	37,211	34,148
Short-term contract liabilities (Deferred revenues)	34,295	33,119
Long-term contract liabilities (Deferred revenues)	$ 85,746	$ 76,911

REVENUE RECOGNITION - Summary of Significant Changes in the Balances of Contract Liabilities and Assets (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($)
Contract Assets
Balance, beginning of period	$ 47,664
Amount recognized	(10,988)
Increase	14,705
Balance, end of period	51,381
Contract Liabilities
Balance, beginning of period	110,030
Revenue recognized	(29,413)
Increase due to billings	39,424
Balance, end of period	$ 120,041

REVENUE RECOGNITION - Summary of Estimated Revenue Expected to be Recognized in Future Periods (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Revenue from Contract with Customer [Abstract]
Total estimated revenue expected to be recognized in future periods	$ 120,041
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01
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]: 2019-10-01
Revenue from Contract with Customer [Abstract]
Total estimated revenue expected to be recognized in future periods	$ 10,045
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01
Revenue from Contract with Customer [Abstract]
Total estimated revenue expected to be recognized in future periods	$ 32,100
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]: 2021-01-01
Revenue from Contract with Customer [Abstract]
Total estimated revenue expected to be recognized in future periods	$ 25,903
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	$ 20,881
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	$ 15,102
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	$ 16,010
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 - Accounts Receivable (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accounts receivable	$ 136,002	$ 81,076
Allowance for doubtful accounts	(2,313)	(2,138)
Accounts receivable, net	$ 133,689	$ 78,938

OTHER FINANCIAL INFORMATION - Inventory (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Raw materials	$ 2,140	$ 970
Finished goods	28,091	15,297
Total inventory	$ 30,231	$ 16,267

OTHER FINANCIAL INFORMATION - Accrued Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Salaries, commissions, incentive compensation and benefits	$ 5,582	$ 4,107
Customer rebates and sales incentives	16,848	8,527
Freight	4,887	7,286
Lease Liabilities Included in Accounts Payable, Accrued and Other Liabilities	3,067	0
Other	9,607	9,090
Total accrued liabilities	$ 39,991	$ 29,010

GOODWILL AND INTANGIBLE ASSETS - Schedule of Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
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	38,151
Accumulated Amortization	(4,725)	(2,845)
Net	31,761	35,306
Patents and licensed technology
Intangible assets with finite lives:
Gross	0	1,665
Accumulated Amortization	0	(1,665)
Net	0	0
Developed technology
Intangible assets with finite lives:
Gross	13,100	13,100
Accumulated Amortization	(2,547)	(909)
Net	10,553	12,191
Customer relationship
Intangible assets with finite lives:
Gross	23,100	23,100
Accumulated Amortization	(2,178)	(271)
Net	$ 20,922	$ 22,829

GOODWILL AND INTANGIBLE ASSETS - Amortization Expense (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
	Aug. 09, 2018	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets		$ 1,182	$ 485	$ 3,545	$ 637
Developed technology, and patents and licensed technology
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets		546	485	1,638	637
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets		$ 636	$ 0	$ 1,907	$ 0
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 of Warranty Activities (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Changes in the Company's product warranty liability
Warranty obligations, beginning of period	$ 32,994	$ 31,642	$ 31,294	$ 29,816
Accruals for warranties issued during period	1,571	689	3,741	2,222
Changes in estimates	3,884	1,997	5,387	4,825
Settlements	(3,780)	(2,467)	(8,282)	(6,242)
Increase due to accretion expense	562	514	1,663	1,453
Other	(607)	(191)	821	110
Warranty obligations, end of period	34,624	32,184	34,624	32,184
Less: current portion	(8,757)	(9,117)	(8,757)	(9,117)	$ (8,083)
Noncurrent	$ 25,867	$ 23,067	$ 25,867	$ 23,067	$ 23,211

FAIR VALUE MEASUREMENTS - Schedule of Liabilities Measured at Fair Value on a Recurring Basis (Details) - Recurring - Level 3 - Total warranty obligations measured at fair value - USD ($) $ in Thousands	Sep. 30, 2019	Jun. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Dec. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warranty obligations, current	$ 5,647		$ 4,288
Warranty obligations, non-current	11,337		7,469
Obligations measured at fair value	$ 16,984	$ 14,856	$ 11,757	$ 13,567	$ 12,837	$ 9,791

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, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at beginning of period	$ 14,856	$ 12,837	$ 11,757	$ 9,791
Accruals for warranties issued during period	1,571	689	3,741	2,222
Changes in estimates	2,676	853	3,536	2,848
Settlements	(2,074)	(1,135)	(4,534)	(2,857)
Increase due to accretion expense	562	514	1,663	1,453
Other	(607)	(191)	821	110
Balance at end of period	$ 16,984	$ 13,567	$ 16,984	$ 13,567

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, 2019	Dec. 31, 2018
Profit element and risk premium
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warranty obligations for microinverters sold since January 1, 2014	0.14	0.16
Credit-adjusted risk-free rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warranty obligations for microinverters sold since January 1, 2014	0.16	0.16

FAIR VALUE MEASUREMENTS - Narrative (Details) $ in Millions	9 Months Ended
FAIR VALUE MEASUREMENTS - Narrative (Details) $ in Millions	Sep. 30, 2019 USD ($)
Fair Value Disclosures [Abstract]
Increase in liability as a result of increasing the profit element and risk premium input by 100 basis points	$ 0.1
Decrease in liability as a result of decreasing the profit element and risk premium input by 100 basis points	0.1
Decrease in liability as a result of increasing the discount rate by 100 basis points	0.7
Increase in liability as a result of decreasing the discount rate by 100 basis points	$ 0.8

RESTRUCTURING - Summary of Restructuring Charges (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Restructuring Cost and Reserve [Line Items]
Restructuring charges	$ 469	$ 2,588	$ 1,468	$ 2,588
Asset impairment	0	1,636	0	1,636
Redundancy and employee severance and benefit arrangements
Restructuring Cost and Reserve [Line Items]
Restructuring charges	469	613	1,568	613
Lease loss reserves
Restructuring Cost and Reserve [Line Items]
Lease loss reserves	$ 0	$ 339	$ (100)	$ 339

RESTRUCTURING - Rollforward (Details) $ in Thousands	9 Months Ended
RESTRUCTURING - Rollforward (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Restructuring Plan 2018
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning	$ 1,192
Charges	1,568
Cash payments	(1,620)
Non-cash settlement and other	(1,140)
Restructuring reserve, ending	0
Restructuring Plan 2018 \| Employee Severance and Benefits
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning	904
Charges	1,568
Cash payments	(1,620)
Non-cash settlement and other	(852)
Restructuring reserve, ending	0
Restructuring Plan 2018 \| Lease Loss Reserves and Contractual Obligations
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning	288
Charges	0
Cash payments	0
Non-cash settlement and other	(288)
Restructuring reserve, ending	0
Restructuring Plan 2016 \| Lease Loss Reserves and Contractual Obligations
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning	1,591
Non-cash settlement and other	(1,591)
Restructuring reserve, ending	$ 0

DEBT - Long-term debt (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Total carrying amount of debt	$ 104,062	$ 109,783
Debt, current	(3,084)	(28,155)
Long-term debt	100,978	81,628
Convertible Notes \| Convertible Senior Note Due 2024
Debt Instrument [Line Items]
Long-term debt, gross	132,000	0
Less unamortized discount and issuance costs	(37,484)	0
Total carrying amount of debt	94,516	0
Convertible Notes \| Convertible Senior Notes Due 2023
Debt Instrument [Line Items]
Long-term debt, gross	5,000	65,000
Total carrying amount of debt	4,848	62,639
Less: unamortized issuance costs	(152)	(2,361)
Secured Debt \| Term Loan Agreement, July 2016
Debt Instrument [Line Items]
Long-term debt, gross	0	41,524
Less unamortized discount and issuance costs	0	(1,059)
Total carrying amount of debt	0	40,465
Debt, current	0	(25,417)
Financing Receivable \| Financing Receivable Recorded as Debt
Debt Instrument [Line Items]
Long-term debt, gross	4,698	6,679
Debt, current	$ (3,084)	$ (2,738)

DEBT - Convertible Senior Notes due 2024 (Details) $ / shares in Units, shares in Millions		9 Months Ended
	Jun. 05, 2019 USD ($) trading_day $ / shares shares	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)
Debt Instrument [Line Items]
Payment for bonds hedge		$ 36,313,000	$ 0
Proceeds from sale of warrants	$ 29,800,000	$ 29,819,000	$ 0
Convertible Notes \| Convertible Senior Note Due 2024
Debt Instrument [Line Items]
Debt instrument face amount	$ 132,000,000.0
Interest rate	1.00%
Conversion ratio	0.0487781
Principal amount multiples	$ 1,000
Debt conversion price (in USD per share) \| $ / shares	$ 20.5010
Proceeds from convertible debt	$ 128,000,000.0
Convertible note, liability component	$ 95,600,000
Effective percentage rate	7.75%	7.75%
Convertible note, equity component	$ 36,400,000
Debt issuance costs	4,600,000
Unamortized debt issuance costs	3,300,000	$ 3,100,000
Debt issuance costs, allocated to capital	$ 1,300,000
Unamortized discount		$ 34,400,000
Remaining discount amortization period		4 years 8 months 12 days
Conversion shares (in shares) \| shares	6.4
Warrants sold (in shares) \| shares	6.4
Warrants issued, strike price (in USD per share) \| $ / shares	$ 25.2320
Period One \| Convertible Notes \| Convertible Senior Note Due 2024
Debt Instrument [Line Items]
Number of threshold trading days \| trading_day	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 threshold percentage	98.00%
Period Two \| Convertible Notes \| Convertible Senior Note Due 2024
Debt Instrument [Line Items]
Threshold percentage	100.00%
Convertible Notes \| Level 2
Debt Instrument [Line Items]
Obligations measured at fair value		$ 201,300,000

DEBT - Schedule of Convertible Senior Notes due 2024 (Details) - Convertible Notes - Convertible Senior Note Due 2024 - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Debt Instrument [Line Items]
Contractual interest expense	$ 330	$ 422
Amortization of debt discount	1,523	1,939
Amortization of debt issuance costs	165	210
Total interest cost recognized	$ 2,018	$ 2,571

DEBT - Convertible Senior Notes due 2023 (Details) - Convertible Senior Notes Due 2023		1 Months Ended	3 Months Ended	9 Months Ended
	Jun. 05, 2019 USD ($) shares	Aug. 31, 2018 USD ($) $ / shares	Sep. 30, 2019 USD ($)	Sep. 30, 2019 USD ($)
Debt Instrument [Line Items]
Conversion shares (in shares) \| shares	10,801,080
Fees paid for repurchase and exchange of convertible notes				$ 6,000,000.0
Convertible Notes
Debt Instrument [Line Items]
Debt instrument face amount		$ 65,000,000.0	$ 5,000,000.0	5,000,000.0
Interest rate		4.00%
Debt converted	$ 60,000,000.0
Fees paid for repurchase and exchange of convertible notes			6,000,000
Conversion ratio		0.180018
Principal amount multiples		$ 1,000
Debt conversion price (in USD per share) \| $ / shares		$ 5.56
Redemption price percentage		100.00%
Reclassification Adjustment \| Convertible Notes
Debt Instrument [Line Items]
Deferred issuance costs			2,000,000.0	2,000,000.0
Accrued interest			$ 800,000	$ 800,000

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, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Debt Instrument [Line Items]
Contractual interest expense	$ 43	$ 325	$ 1,176	$ 325
Amortization of debt issuance costs	10	64	235	64
Total interest cost recognized	$ 53	$ 389	$ 1,411	$ 389

DEBT - Term Loan (Details) - USD ($)	Jan. 28, 2019	Feb. 28, 2017	Jul. 31, 2016
Debt Instrument [Line Items]
Repayments of debt	$ 39,500,000
Tennenbaum Capital Partners, LLC \| Secured Debt \| Amended Tennenbaum Capital Partners LLC Agreement
Debt Instrument [Line Items]
Debt instrument face amount		$ 25,000,000.0	$ 25,000,000.0

COMMITMENTS AND CONTINGENT LIABILITIES - Narrative (Details)	Sep. 30, 2019
Commitments and Contingencies Disclosure [Abstract]
Term of lease contract, maximum renewal term	12 years

COMMITMENTS AND CONTINGENT LIABILITIES - Lease Expense Components (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Commitments and Contingencies Disclosure [Abstract]
Operating lease costs	$ 1,161	$ 2,909

COMMITMENTS AND CONTINGENT LIABILITIES - Lease Liabilities (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Operating lease liabilities, current (Accrued liabilities)	$ 3,067
Operating lease liabilities, noncurrent (Other liabilities)	10,268
Total operating lease liabilities	$ 13,335
Weighted average remaining lease term	5 years 8 months 12 days
Weighted average discount rate	8.60%

COMMITMENTS AND CONTINGENT LIABILITIES - Supplemental Cash Flow and Other Information (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Commitments and Contingencies Disclosure [Abstract]
Operating cash flows from operating leases	$ 1,019	$ 2,613
Lease liabilities arising from obtaining right-of-use assets	$ 0	$ 4,834

COMMITMENTS AND CONTINGENT LIABILITIES - Schedule of Minimum Lease Payments Under Noncancelable Operating Leases (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
2019 (remaining three months)	$ 1,019
2020	4,137
2021	4,217
2022	2,906
2023	2,169
Thereafter	1,586
Total lease payments	16,034
Less: imputed lease interest	(2,699)
Total lease liabilities	$ 13,335

COMMITMENTS AND CONTINGENT LIABILITIES - Non-cancelable Operating Leases (Details) $ in Thousands	Dec. 31, 2018 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2019	$ 3,738
2020	3,532
2021	3,276
2022	1,810
2023	945
Thereafter	1,252
Total	14,553
Sublease income to be recognized in the future under noncancelable subleases	(922)
Net operating lease minimum payments	$ 13,631

STOCK-BASED COMPENSATION - Summary of the Components of Total Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation expense	$ 5,776	$ 4,051	$ 14,000	$ 9,911
Total unrecognized compensation cost	33,600		$ 33,600
Weighted-average recognition period for unrecognized compensation cost			2 years 3 months 18 days
Cost of revenues
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation expense	497	330	$ 1,114	945
Research and development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation expense	1,411	878	3,255	2,645
Sales and marketing
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation expense	1,541	1,151	3,900	2,509
General and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation expense	1,996	1,692	5,013	3,812
Restructuring
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation expense	$ 331	$ 0	$ 718	$ 0

STOCK-BASED COMPENSATION - Summary of Stock-Based Compensation Associated with Each Type of Award (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	$ 5,776	$ 4,051	$ 14,000	$ 9,911
Stock options and RSUs and PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	5,546	3,708	13,528	9,001
Employee stock purchase plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	$ 230	$ 343	$ 472	$ 910

STOCK-BASED COMPENSATION - Summary of the Weighted-Average Grant Date Fair Value of Options Granted (Details) - Stock options - $ / shares	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
The fair value of each option granted during the periods
Weighted average grant date fair value (in usd per share)	$ 9.16	$ 2.83
Expected term	3 years 9 months 18 days	4 years
Expected volatility	89.10%	88.50%
Annual risk-free rate of return	2.10%	2.60%
Dividend yield	0.00%	0.00%

STOCK-BASED COMPENSATION - Summary of Stock Option Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($) $ / shares shares
Number of Shares Outstanding
Outstanding, beginning balance (in shares) \| shares	6,772
Granted (in shares) \| shares	43
Exercised (in shares) \| shares	(2,222)
Canceled (in shares) \| shares	(102)
Outstanding, ending balance (in shares) \| shares	4,491
Shares outstanding, vested and expected to vest (in shares) \| shares	4,491
Shares outstanding, exercisable (in shares) \| shares	3,085
Weighted- Average Exercise Price per Share
Outstanding, beginning balance (in usd per share)	$ 1.76
Granted (in usd per share)	14.58
Exercised (in usd per share)	1.20
Canceled (in usd per share)	4.07
Outstanding, ending balance (in usd per share)	2.11
Weighted-average exercise price, vested and expected (in usd per share)	2.11
Weighted-average exercise price, exercisable (in usd per share)	$ 2.32
Weighted-Average Remaining Contractual Term
Outstanding	4 years 6 months
Vested and expected to vest	4 years 6 months
Exercisable	4 years 3 months 18 days
Aggregate Intrinsic Value
Exercised \| $	$ 21,844
Outstanding \| $	90,358
Vested and expected to vest \| $	90,358
Exercisable \| $	$ 61,415
Share price (in USD per share)	$ 22.23

STOCK-BASED COMPENSATION - Summary of Stock Options Outstanding (Details) shares in Thousands	9 Months Ended
	Sep. 30, 2019 $ / shares shares
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Options outstanding, Number of Shares (shares) \| shares	4,491
Options Outstanding - Weighted- Average Remaining Life	4 years 6 months
Options Outstanding - Weighted- Average Exercise Price (usd per share)	$ 2.11
Options Exercisable - Number of Shares Exercisable (shares) \| shares	3,085
Options Exercisable - Weighted-average Exercise Price (usd per share)	$ 2.32
$0.64 —– $1.11
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise price range, lower limit (usd per share)	0.64
Exercise price range, upper limit (usd per share)	$ 1.11
Options outstanding, Number of Shares (shares) \| shares	848
Options Outstanding - Weighted- Average Remaining Life	5 years 2 months 12 days
Options Outstanding - Weighted- Average Exercise Price (usd per share)	$ 0.82
Options Exercisable - Number of Shares Exercisable (shares) \| shares	567
Options Exercisable - Weighted-average Exercise Price (usd per share)	$ 0.78
$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	5 years
Options Outstanding - Weighted- Average Exercise Price (usd per share)	$ 1.29
Options Exercisable - Number of Shares Exercisable (shares) \| shares	500
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	1,601
Options Outstanding - Weighted- Average Remaining Life	4 years 6 months
Options Outstanding - Weighted- Average Exercise Price (usd per share)	$ 1.31
Options Exercisable - Number of Shares Exercisable (shares) \| shares	1,205
Options Exercisable - Weighted-average Exercise Price (usd per share)	$ 1.31
$1.37 —– $7.68
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)	$ 7.68
Options outstanding, Number of Shares (shares) \| shares	899
Options Outstanding - Weighted- Average Remaining Life	3 years 6 months
Options Outstanding - Weighted- Average Exercise Price (usd per share)	$ 4.17
Options Exercisable - Number of Shares Exercisable (shares) \| shares	699
Options Exercisable - Weighted-average Exercise Price (usd per share)	$ 4.66
$7.77 —– $14.58
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise price range, lower limit (usd per share)	7.77
Exercise price range, upper limit (usd per share)	$ 14.58
Options outstanding, Number of Shares (shares) \| shares	143
Options Outstanding - Weighted- Average Remaining Life	3 years 9 months 18 days
Options Outstanding - Weighted- Average Exercise Price (usd per share)	$ 11.57
Options Exercisable - Number of Shares Exercisable (shares) \| shares	114
Options Exercisable - Weighted-average Exercise Price (usd per share)	$ 10.82

STOCK-BASED COMPENSATION - Summary of Restricted Stock Unit Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($) $ / shares shares
Aggregate Intrinsic Value
Share price (in USD per share)	$ 22.23
Restricted stock units
Number of Shares Outstanding
Outstanding, beginning balance (in shares) \| shares	4,352
Granted (in shares) \| shares	1,997
Vested (in shares) \| shares	(1,317)
Canceled (in shares) \| shares	(461)
Outstanding, ending balance (in shares) \| shares	4,571
Number of shares outstanding, expected to vest (in shares) \| shares	4,571
Weighted Average Fair Value per Share at Grant Date
Outstanding, beginning balance (in usd per share)	$ 3.52
Granted (in usd per share)	10.86
Vested (in usd per share)	3.62
Canceled (in usd per share)	4.54
Outstanding, ending balance (in usd per share)	6.60
Weighted-Average Fair Value per Share at Grant Date, Expected to vest (in usd per share)	$ 6.60
Weighted-Average Remaining Contractual Term
Outstanding	1 year 3 months 18 days
Expected to vest	1 year 3 months 18 days
Aggregate Intrinsic Value
Vested \| $	$ 18,853
Outstanding \| $	101,604
Aggregate intrinsic value, expected to vest \| $	$ 101,604

STOCK-BASED COMPENSATION - Summary of Performance Stock Unit Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($) $ / shares shares
Aggregate Intrinsic Value
Share price (in USD per share)	$ 22.23
Performance Shares
Number of Shares Outstanding
Outstanding, beginning balance (in shares) \| shares	1,330
Granted (in shares) \| shares	1,052
Vested (in shares) \| shares	(1,026)
Canceled (in shares) \| shares	(364)
Outstanding, ending balance (in shares) \| shares	992
Weighted Average Fair Value per Share at Grant Date
Outstanding, beginning balance (in usd per share)	$ 4.66
Granted (in usd per share)	9.48
Vested (in usd per share)	4.63
Canceled (in usd per share)	5.16
Outstanding, ending balance (in usd per share)	$ 9.63
Weighted-Average Remaining Contractual Term
Outstanding	6 months
Aggregate Intrinsic Value
Vested \| $	$ 9,925
Outstanding \| $	$ 22,050

NET INCOME (LOSS) PER SHARE - Schedule of Computation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Numerator:
Net income (loss)	$ 31,099	$ (3,470)	$ 44,482	$ (12,336)
Notes due 2023 interest and financing costs, net	39	0	1,046	0
Adjusted net income (loss)	$ 31,138	$ (3,470)	$ 45,528	$ (12,336)
Denominator:
Weighted average common shares outstanding (in shares)	122,123	102,798	114,720	97,257
Employee stock-based awards (in shares)	9,200	0	8,937	0
Warrants (in shares)	100	0	0	0
Weighted average common shares outstanding for diluted calculation (in shares)	133,611	102,798	131,114	97,257
Net income (loss) per share, basic (in USD per share)	$ 0.25	$ (0.03)	$ 0.39	$ (0.13)
Net income (loss) per share, diluted (in USD per share)	$ 0.23	$ (0.03)	$ 0.35	$ (0.13)
Convertible Notes \| Convertible Senior Note Due 2024
Denominator:
Notes due (in shares)	1,288	0	385	0
Convertible Notes \| Convertible Senior Notes Due 2023
Denominator:
Notes due (in shares)	900	0	7,072	0

NET INCOME (LOSS) PER SHARE - Schedule of Potentially Dilutive Securities Excluded from the Computation of Diluted Net Loss Per Share (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Employee stock-based awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	11	13,328	112	13,077

NET INCOME (LOSS) PER SHARE Narrative (Details)	Jun. 05, 2019 $ / shares
Convertible Senior Note Due 2024 \| Convertible Notes
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Debt conversion price (in USD per share)	$ 20.5010

RELATED PARTY Narrative (Details) - USD ($) shares in Millions, $ in Millions	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Sep. 30, 2019	Dec. 31, 2018	Aug. 31, 2018
SunPower’s
Related Party Transaction [Line Items]
Common stock held by related party (in shares)		6.5	7.5
Revenue from related parties	$ 29.5	$ 50.7
Accounts receivable, related parties	24.7	24.7	$ 10.3
Convertible Notes \| Convertible Senior Notes Due 2023
Related Party Transaction [Line Items]
Debt instrument face amount	5.0	5.0		$ 65.0
Thurman John Rodgers \| Convertible Notes \| Convertible Senior Notes Due 2023
Related Party Transaction [Line Items]
Debt instrument face amount	$ 5.0	$ 5.0	$ 5.0