Government grants represent benefits provided by federal, state, or local governments that are not subject to the scope of Accounting Standards Codification (“ASC”) 740. The Company recognizes a grant when it has reasonable assurance that it will comply with the grant’s conditions and that the grant will be received. Government grants that are not related to long-lived assets are considered income-based grants, which are recognized as a reduction to the related cost of activities that generated the benefit.

In August 2022, the United States enacted the Inflation Reduction Act of 2022 (“IRA”), which includes credits under the Advanced Manufacturing Production Tax Credit (“AMPTC”), to incentivize clean energy component sourcing and production, including for the production of microinverters in the United States. The IRA provides for an AMPTC on microinverters of 11 cents per alternating current watt basis. The AMPTC on microinverters decreases by 25% each year beginning in 2030 and ending after 2032. The Company recognized credits under AMPTC as a reduction to cost of revenues in the condensed consolidated statements of operations for the microinverters manufactured in the United States and sold to customers. Such credit is also reflected as an increase to grant receivable or prepaid income tax on the Company’s condensed consolidated balance sheets within prepaid expenses and other current assets.


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025

	(in thousands)
Transactions recorded to cost of revenues:
AMPTC generated	$	71,133	$	61,041	$	130,945	$	114,671
Discount from sale of AMPTC generated during 2025(1)	—		—		(18,905)		—


Adjustments to record AMPTC generated in period at fair value	(6,211)		—		(11,431)		—
Net benefit from AMPTC reducing cost of revenues	$	64,922	$	61,041	$	100,609	$	114,671

(1) In March 2026, the Company entered into an agreement for the sale of $235.0 million of AMPTC it generated during 2025 at 93% of face value, resulting in a discount of approximately $16.5 million. The Company also incurred approximately $2.5 million in transaction-related fees.