Enphase Energy Inc (ENPH)

Inventory turnover

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Cost of revenue (ttm)	US$ in thousands	701,245	672,733	759,100	980,584	1,232,398	1,490,441	1,568,169	1,491,584	1,356,258	1,191,712	1,036,076	913,141	827,627	721,123	593,484	482,379	428,444	417,694	449,523	461,147
Inventory	US$ in thousands	165,004	158,837	176,068	207,893	213,595	174,114	166,111	150,563	149,708	146,451	130,266	96,436	74,400	65,405	37,756	34,876	41,764	37,535	31,186	34,617
Inventory turnover		4.25	4.24	4.31	4.72	5.77	8.56	9.44	9.91	9.06	8.14	7.95	9.47	11.12	11.03	15.72	13.83	10.26	11.13	14.41	13.32

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $701,245K ÷ $165,004K
= 4.25

Enphase Energy Inc's inventory turnover ratio has shown fluctuating trends over the past few years. The ratio started at 13.32 in March 2020 and gradually increased to 15.72 by June 2021, indicating that the company was selling its inventory more efficiently during this period.

However, from September 2021 onwards, there was a decline in the inventory turnover ratio, dropping to 8.14 by September 2022. This decrease suggests that Enphase Energy Inc was holding onto its inventory for a longer period before selling it, which may lead to higher carrying costs and potential risks related to obsolescence.

Despite a slight improvement in inventory turnover in the following quarters, the ratio declined significantly to 4.25 by December 2024. Such a low inventory turnover ratio indicates that Enphase Energy Inc may be experiencing challenges in managing its inventory effectively, potentially leading to excess inventory levels or slow-moving stock.

Overall, the declining trend in Enphase Energy Inc's inventory turnover ratio highlights the importance for the company to closely monitor and optimize its inventory management practices to ensure efficient utilization of resources and mitigate any adverse impacts on profitability and liquidity.