Non-GAAP Financial Metrics Enphase Energy has presented certain non-GAAP 昀椀nancial measures in this Environmental Social Governance Report 2023. Generally, a non-GAAP 昀椀nancial measure is a numerical measure of a company’s performance, 昀椀nancial position, or cash 昀氀ows that either exclude or include amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States (GAAP). Reconciliation of each non-GAAP 昀椀nancial measure to the most directly comparable GAAP 昀椀nancial measure can be found in the accompanying tables to this press release. Non-GAAP 昀椀nancial measures presented by Enphase Energy include non-GAAP gross pro昀椀t, gross margin, operating expenses, income from operations, net income, net income per share (basic and diluted) and free cash 昀氀ow. These non-GAAP 昀椀nancial measures do not re昀氀ect a comprehensive system of accounting, di昀昀er from GAAP measures with the same captions and may di昀昀er from non-GAAP 昀椀nancial measures with the same or similar captions that are used by other companies. In addition, these non-GAAP measures have limitations in that they do not re昀氀ect all of the amounts associated with Enphase Energy’s results of operations as determined in accordance with GAAP. As such, these non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, 昀椀nancial measures calculated in accordance with GAAP. Enphase Energy uses these non-GAAP 昀椀nancial measures to analyze its operating performance and future prospects, develop internal budgets and 昀椀nancial goals, and to facilitate period-to-period comparisons. Enphase Energy believes that these non-GAAP 昀椀nancial measures re昀氀ect an additional way of viewing aspects of its operations that, when viewed with its GAAP results, provide a more complete understanding of factors and trends a昀昀ecting its business. As presented in the “GAAP to non-GAAP reconciliation” pages, each of the non-GAAP 昀椀nancial measures excludes one or more of the following items for purposes of calculating non-GAAP 昀椀nancial measures to facilitate an evaluation of Enphase Energy’s current operating performance and a comparison to its past operating performance: • Stock-based compensation expense. Enphase Energy excludes stock-based compensation expense from its non-GAAP measures primarily because they are non-cash in nature. Moreover, the impact of this expense is signi昀椀cantly a昀昀ected by Enphase Energy’s stock price at the time of an award over which management has limited to no control. • Acquisition related expenses and amortization. This item represents expenses incurred related to Enphase Energy’s business acquisitions, which are non-recurring in nature, and amortization of acquired intangible assets, which is a non-cash expense. Acquisition related expenses and amortization of acquired intangible assets are not re昀氀ective of Enphase Energy’s ongoing 昀椀nancial performance. • Restructuring and asset impairment charges. Enphase Energy excludes restructuring and asset impairment charges due to the nature of the expenses being unusual and arising outside the ordinary course of continuing operations. These costs primarily consist of fees paid for cash-based severance costs and asset write-downs of property and equipment and acquired intangible assets, and other contract termination costs resulting from restructuring initiatives. • Non-cash interest expense. This item consists primarily of amortization of debt issuance costs and accretion of debt discount because these expenses do not represent a cash out昀氀ow for Enphase Energy except in the period the 昀椀nancing was secured and such amortization expense is not re昀氀ective of Enphase Energy’s ongoing 昀椀nancial performance. • Non-GAAP income tax adjustment. This item represents the amount adjusted to Enphase Energy’s GAAP tax provision or bene昀椀t to present the non-GAAP tax amount based on cash tax expense and reserves for periods prior to 2023. E昀昀ective January 1, 2023, Enphase Energy updated its methodology of computing the non-GAAP income tax adjustment from reporting cash tax expense and reserves to the projected non-GAAP annualized e昀昀ective tax rate as Enphase Energy utilized most of its net operating loss and tax credit carryforwards in the year ended December 31, 2022, and became a signi昀椀cant cash taxpayer in the United States. Going forward, Enphase Energy will exclude the income tax e昀昀ects of GAAP adjustments such as stock-based compensation, amortization of purchased intangibles, and other non-recurring items that are not re昀氀ective of Enphase Energy ongoing 昀椀nancial performance. • Non-GAAP net income per share, diluted. Enphase Energy excludes the dilutive e昀昀ect of in-the-money portion of convertible senior notes as they are covered by convertible note hedge transactions that reduce potential dilution to our common stock upon conversion of the Notes due 2025, Notes due 2026 and Notes due 2028, and includes the dilutive e昀昀ect of employee’s stock-based awards and the dilutive e昀昀ect of warrants. Enphase Energy believes these adjustments provide useful supplemental information to the ongoing 昀椀nancial performance. • Net IRA bene昀椀t. This item represents the advanced manufacturing production tax credit (“AMPTC”) from the IRA for manufacturing microinverters in the United States, partially o昀昀set by the incremental manufacturing cost incurred in the United States relative to manufacturing in Mexico, India, and China. The AMPTC is accounted for by Enphase Energy as an income-based government grants that reduces cost of revenues in the consolidated statements of operations. • Free cash 昀氀ow. This item represents net cash 昀氀ows from operating activities less purchases of property and equipment. 100