Table of Contents We could be adversely affected by any violations of the FCPA, the U.K. Bribery Act, and other foreign anti- bribery laws. The U.S. FCPA generally prohibits companies and their intermediaries from making improper payments to non-U.S. government officials for the purpose of obtaining or retaining business. Other countries in which we operate also have anti-bribery laws, some of which prohibit improper payments to government and non-government persons and entities, and others (e.g., the FCPA and the U.K. Bribery Act) extend their application to activities outside of their country of origin. Our policies mandate compliance with all applicable anti-bribery laws. We currently operate in, and may further expand into, key parts of the world that have experienced governmental corruption to some degree and, in certain circumstances, strict compliance with anti-bribery laws may conflict with local customs and practices. In addition, due to the level of regulation in our industry, our entry into new jurisdictions through internal growth or acquisitions requires substantial government contact where norms can differ from U.S. standards. Additionally, the costs of complying with these laws (including the costs of investigations, auditing, and monitoring) could adversely affect our current or future business. Although, we implement policies and procedures and conduct training designed to facilitate compliance with these anti-bribery laws, thereby mitigating the risk of violations of such laws, our employees, subcontractors, agents and partners may take actions in violation of our policies and anti-bribery laws. Any such violation, even if prohibited by our policies, could subject us to criminal or civil penalties or other sanctions, which could have a material adverse effect on our business, financial condition, cash flows, and reputation. From time to time we are involved in a number of legal proceedings and, while we cannot predict the outcomes of such proceedings and other contingencies with certainty, some of these outcomes could adversely affect our business and financial condition. We are, or may become, involved in legal proceedings, government and agency investigations, and consumer, employment, tort and other litigation. We cannot predict with certainty the outcomes of these legal proceedings. The outcome of these legal proceeding could require us to take, or refrain from taking, actions which could negatively affect our operations or could require us to pay substantial amounts of money adversely affecting our financial condition and results of operations. There can also be no assurance that we are adequately insured to protect against all claims and potential liabilities. Additionally, defending against lawsuits and legal proceedings may involve significant expense and could divert the attention of our key personnel. Risks Related to our Financial Condition and Liquidity Our gross profit may fluctuate over time, which could impair our ability to achieve or maintain profitability. Our gross profit has varied in the past and is likely to continue to vary significantly from period to period. Our gross profit may be adversely affected by numerous factors, some of which are beyond our control, including: • changes in customer, geographic or product mix; • increased price competition, including the impact of customer and competitor discounts and rebates; • the impact of inflation and higher interest rates; • our ability to reduce and control product costs, including our ability to make product cost reductions in a timely manner to offset declines in our product prices; • warranty costs and reserves, including changes resulting from changes in estimates related to the long- term performance of our products, product replacement costs and warranty claim rates, as well as changes in the discount rates; • loss of cost savings due to changes in component or raw material pricing or charges incurred due to inventory holding periods if product demand is not correctly anticipated; • introduction of new products; • ordering patterns from our distributors; • price reductions on older products to sell remaining inventory; • component shortages and related expedited shipping costs; • our ability to reduce production costs, such as through technology innovations, in order to offset price declines in our products over time; Enphase Energy, Inc. | 2023 Form 10-K | 34