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BUSINESS COMBINATIONS | 12 Months Ended
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Dec. 31, 2023
Business Combination and Asset Acquisition [Abstract] |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS Acquisition of GreenCom Networks AG (“GreenCom”) On October 10, 2022, the Company completed the acquisition of GreenCom, a privately-held company, for paid cash consideration of approximately $34.9 million. GreenCom provided Internet of Things (IoT) software solutions for customers to connect and manage a wide range of distributed energy devices within the home. This acquisition added headcount to the Company’s engineering team in Europe to introduce the IQ Energy Router family of devices in Germany and Austria beginning in June 2023, which are designed to allow the integration of select third-party EV chargers and heat pumps into the Company’s solar and battery systems. The acquisition has been accounted for as a business combination under the acquisition method, and accordingly, the approximately $34.9 million purchase price is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values on the acquisition date. The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the acquisition date, which are subject to change within the measurement period as the fair value assessments are finalized (in thousands):
Net tangible liabilities acquired |  | $ | (118) |
Intangible assets |  | 13,900 |
Deferred tax asset, net |  | 4,578 |
Goodwill |  | 16,536 |
Net assets acquired |  | $ | 34,896 |
The excess of the consideration paid over the fair values assigned to the assets acquired and liabilities assumed represents the goodwill resulting from the acquisition. Goodwill is primarily attributable to expected synergies in the Company’s solar offerings and cross-selling opportunities. None of the goodwill is expected to be deductible for German income tax purposes. Intangible assets consist primarily of developed technology and customer relationships. Developed technology includes a combination of unpatented technology, trade secrets, computer software and research processes that facilitates home energy management through integration of existing and planned new products in renewable energy sector. Customer relationships relates to GreenCom’s ability to sell current and future offerings, as well as products built around the current offering, to its existing customers. The following table shows the fair value of the separately identifiable intangible assets at the time of acquisition and the period over which each intangible asset will be amortized:
|  | Preliminary Fair Value |  | Useful Life
|  | (In thousands) |  | (Years)
Developed technology |  | $ | 8,000 |  |  | 5
Customer relationships |  | 5,900 |  |  | 5
Total identifiable intangible assets |  | $ | 13,900 |  |  |
Pro forma financial information has not been presented for the GreenCom acquisition as the impact to the Company’s consolidated financial statements was not material. The Company incurred and accrued costs related to acquisition of $1.8 million that were recorded in general and administrative expenses in the accompanying consolidated statements of operations for the year ended December 31, 2022. Acquisition of SolarLeadFactory, LLC. (“SolarLeadFactory”) On March 14, 2022, the Company completed the acquisition of SolarLeadFactory, a privately-held company. SolarLeadFactory provides high quality leads to solar installers. As part of the purchase price, the Company paid approximately $26.1 million in cash on March 14, 2022. The acquisition has been accounted for as a business combination under the acquisition method, and accordingly, the total purchase price is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values on the acquisition date. The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the acquisition date, which are subject to change within the measurement period as the fair value assessments are finalized (in thousands):
Net tangible assets acquired |  | $ | 2,239 |
Intangible assets |  | 11,200 |
Goodwill |  | 12,612 |
Net assets acquired |  | $ | 26,051 |
The excess of the consideration paid over the fair values assigned to the assets acquired and liabilities assumed represents the goodwill resulting from the acquisition. Goodwill is primarily attributable to expected synergies in the Company’s solar offerings and cross-selling opportunities. The entire goodwill amount is expected to be deductible for U.S. federal income tax purposes over 15 years. Intangible assets consist primarily of developed technology and customer relationships. Developed technology includes a combination of unpatented technology, trade secrets, computer software and research processes that represent the foundation for the existing and planned new products to facilitate the generation of new content. Customer relationships relates to SolarLeadFactory’s ability to sell current and future offerings, as well as products built around the current offering, to its existing customers. The following table shows the fair value of the separately identifiable intangible assets at the time of acquisition and the period over which each intangible asset will be amortized:
|  | Fair Value |  | Useful Life
|  | (In thousands) |  | (Years)
Developed technology |  | $ | 3,600 |  |  | 5
Customer relationships |  | 7,600 |  |  | 5
Total identifiable intangible assets |  | $ | 11,200 |  |  |
Pro forma financial information has not been presented for the SolarLeadFactory acquisition as the impact to the Company’s consolidated financial statements was not material. The Company incurred and accrued costs related to acquisition of $0.4 million that were recorded in general and administrative expenses in the accompanying consolidated statements of operations for the year ended December 31, 2022 Acquisition of ClipperCreek, Inc. (“ClipperCreek”) On December 31, 2021, the Company completed the acquisition of ClipperCreek, a privately-held company. ClipperCreek offers electric vehicle charging solutions for residential and commercial customers in the United States. As part of the purchase price, the Company paid approximately $113.1 million and $3.2 million in cash on December 31, 2021 and June 2, 2022, respectively. The acquisition has been accounted for as a business combination under the acquisition method, and accordingly, the total purchase price is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values on the acquisition date. The following table summarizes the fair values of the assets acquired and liabilities (in thousands):
Net tangible assets acquired |  | $ | 8,387 |
Intangible assets |  | 37,800 |
Goodwill |  | 70,119 |
Net assets acquired |  | $ | 116,306 |
The excess of the consideration paid over the fair values assigned to the assets acquired and liabilities assumed represents the goodwill resulting from the acquisition. Goodwill is primarily attributable to expected synergies in the Company’s solar offerings and cross-selling opportunities. The entire goodwill amount is expected to be deductible for U.S. federal income tax purposes over 15 years. Intangible assets consist primarily of trade name and order backlog. Trade name intangible is attributable to marketing goods and services under the ClipperCreek brand and order backlog pertains to purchase orders with customers yet to be fulfilled. The following table shows the fair value of the separately identifiable intangible assets at the time of acquisition and the period over which each intangible asset will be amortized:
|  | Fair Value |  | Useful Life
|  | (In thousands) |  | (Years)
Order backlog |  | $ | 600 |  |  | Based on actual shipments
Trade name |  | 37,200 |  |  | 5
Total identifiable intangible assets |  | $ | 37,800 |  |  |
The consolidated unaudited proforma revenue and net income for the two years presented below, which includes the acquisition of ClipperCreek, assuming the acquisition occurred on January 1, 2020, were (in thousands);
|  |  | Years Ended December 31,
|  |  |  |  | 2021 |  | 2020 |  |
Net revenues |  |  |  |  | $ | 1,401,803 |  |  | $ | 790,791 |  |  |
Net income |  |  |  |  | $ | 145,798 |  |  | $ | 139,126 |  |  |
The Company incurred and accrued costs related to this acquisition of $0.3 million and $0.5 million that were recorded in general and administrative expenses in the consolidated statements of operations for the years ended December 31, 2022 and 2021, respectively. Acquisition of 365 Pronto, Inc. (“365 Pronto”) On December 13, 2021, the Company completed the acquisition of 365 Pronto, a privately-held company. 365 Pronto provides an online platform for clean technology installation and service landscape by matching asset owners with an on-demand qualified workforce in the United States. As part of the purchase price, the Company paid approximately $69.9 million in cash on December 13, 2021. The acquisition has been accounted for as a business combination under the acquisition method, and accordingly, the total purchase price is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values on the acquisition date. The results of operations of 365 Pronto have been included in the Company’s consolidated statement of operations from the acquisition date. In addition to the purchase price above, the Company was obligated to pay up to approximately $7.0 million and $4.0 million in shares of common stock of the Company in the three months ended March 31, 2023 and June 30, 2023, respectively, subject to achievement of certain revenue, operational and employment targets, of which $6.3 million and $4.0 million was paid in the three months ended March 31, 2023 and June 30, 2023 respectively. As the nature of the additional payments represented an in-substance service period of certain key employees of 365 Pronto and was subject to other conditions, these payments were accounted for as a post-combination expense and were recognized ratably over the term of the measurement period presuming the conditions were met. The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands):
Net tangible assets acquired |  | $ | 38 |
Intangible assets |  | 19,500 |
Deferred tax liabilities |  | (2,906) |
Goodwill |  | 53,280 |
Net assets acquired |  | $ | 69,912 |
The excess of the consideration paid over the fair values assigned to the assets acquired and liabilities assumed represents the goodwill resulting from the acquisition. Goodwill is primarily attributable to expected synergies in the Company’s solar offerings and cross-selling opportunities. None of the goodwill is expected to be deductible for U.S. federal income tax purposes. Intangible assets consist primarily of developed technology and customer relationship intangibles. Intangible assets attributable to developed technology include a combination of unpatented technology, trade secrets, computer software and research processes that represent the foundation for the existing and planned new products to facilitate the generation of new content. Customer relationship intangibles relate to 365 Pronto’s software ability to sell current and future offerings, as well as products built around the current offering, to its existing customers. The following table shows the fair value of the separately identifiable intangible assets at the time of acquisition and the period over which each intangible asset will be amortized:
|  | Fair Value |  | Useful Life
|  | (In thousands) |  | (Years)
Developed technology |  | $ | 18,400 |  |  | 5
Customer relationship |  | 1,100 |  |  | 5
Total identifiable intangible assets |  | $ | 19,500 |  |  |
Pro forma financial information has not been presented for the 365 Pronto acquisition as the impact to the Company’s consolidated financial statements was not material. The Company incurred and accrued costs related to this acquisition of $0.1 million and $0.5 million that were recorded in general and administrative expenses in the consolidated statements of operations for the years ended December 31, 2022 and 2021, respectively. Acquisition of DIN Engineer Service LLP’s (“DIN”) Solar Design Services Business On March 31, 2021, the Company completed its acquisition of DIN’s solar design services business. DIN's solar design services business provides outsourced proposal drawings and permit plan sets for residential solar installers in North America and was acquired to enhance the Company’s digital transformation effort. As part of the purchase price, the Company paid approximately $24.8 million in cash at closing on March 31, 2021. The acquisition has been accounted for as a business combination under the acquisition method; accordingly, the total purchase price is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values on the acquisition date. The results of operations of DIN’s solar design services business have been included in the Company’s consolidated statement of operations from the acquisition date. In addition to the purchase price summarized above, the Company was obligated to pay up to (i) approximately $5.0 million in equal monthly installments over the course of one year following the acquisition date; and (ii) approximately $5.0 million payable on the one year anniversary following the acquisition date, subject to the achievement of certain revenue and operational targets, which was paid in April 2022. As both additional payments required continuous employment of certain key employees of DIN and were subject to other conditions, these payments were accounted for as post-combination expense and recognized ratably over the term of measurement period. The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands):
Net tangible assets acquired |  | $ | 1,281 |
Intangible assets |  | 11,700 |
Goodwill |  | 11,804 |
Net assets acquired |  | $ | 24,785 |
The excess of the consideration paid over the fair values assigned to the assets acquired and liabilities assumed represents the goodwill resulting from the acquisition. Goodwill is primarily attributable to expected synergies in the Company’s solar offerings and cross-selling opportunities. None of the goodwill is expected to be deductible for U.S. federal income tax purposes. Intangible assets consist primarily of customer relationship intangibles. Customer relationship intangibles relate to the ability of the acquired DIN solar design services business to sell current and future offerings, as well as products built around the current offerings, to its existing customers. The following table shows the fair value of the separately identifiable intangible assets at the time of acquisition and the period over which each intangible asset will be amortized:
|  | Preliminary Fair Value |  | Useful Life
|  | (In thousands) |  | (Years)
Customer relationship |  | $ | 11,700 |  |  | 5
Pro forma financial information has not been presented for the DIN's solar design services business acquisition as the impact to the Company’s consolidated financial statements was not material. The Company incurred costs related to this acquisition of $1.9 million that were recorded in general and administrative expenses in the accompanying consolidated statements of operations for the year ended December 31, 2021. Acquisition of Sofdesk Inc. (“Sofdesk”) On January 25, 2021, the Company completed the acquisition of Sofdesk, a privately-held company. Sofdesk provides design tools and services software for residential solar installers and roofing companies and was acquired to enhance the Company’s digital transformation efforts. As part of the purchase price, the Company (i) paid approximately $32.0 million in cash on January 25, 2021 and (ii) was liable for up to approximately $3.7 million of contingent consideration payable during the first quarter of 2022, of which the Company recorded a liability of approximately $3.5 million representing the fair value of the contingent consideration. The Company paid $3.7 million of contingent consideration in February 2022. The contingent consideration was subject to remeasurement at each reporting period until paid. The acquisition date fair value of the purchase price was approximately $35.5 million, which consisted of the following (in thousands):
Cash consideration |  | $ | 31,988 |
Fair value of contingent consideration |  | 3,500 |
Total |  | $ | 35,488 |
In addition to the purchase price discussed above, the Company was obligated to pay up to approximately $3.7 million, during the first quarter of 2022, subject to continued employment of key employees of Sofdesk. As this payment was contingent upon the continuous service of the key employees, it was accounted for as a post-combination expense and recognized ratably over the term of measurement period. The accrued post combination expense of $3.7 million was paid in February 2022. The acquisition has been accounted for as a business combination under the acquisition method, and accordingly, the total purchase price is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values on the acquisition date. The results of operations of Sofdesk have been included in the Company’s consolidated statement of operations from the acquisition date. The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands):
Net tangible assets acquired |  | $ | 1,441 |
Intangible assets |  | 9,200 |
Deferred tax asset |  | 457 |
Goodwill |  | 24,390 |
Net assets acquired |  | $ | 35,488 |
The excess of the consideration paid over the fair values assigned to the assets acquired and liabilities assumed represents the goodwill resulting from the acquisition. Goodwill is primarily attributable to expected synergies in the Company’s solar offerings and cross-selling opportunities. None of the goodwill is expected to be deductible for U.S. federal income tax purposes. Intangible assets consist primarily of developed technology, customer relationship intangibles and trade name intangibles. Intangible assets attributable to developed technology include a combination of unpatented technology, trade secrets, computer software and research processes that represent the foundation for the existing and planned new products to facilitate the generation of new content. Customer relationship intangibles relate to Sofdesk’s software ability to sell current and future offerings, as well as products built around the current offering, to its existing customers. Trade name intangibles are attributable to marketing goods and services under the Solargraf SM and Roofgraf SM brands. The following table shows the fair value of the separately identifiable intangible assets at the time of acquisition and the period over which each intangible asset will be amortized:
|  | Fair Value |  | Useful Life
|  | (In thousands) |  | (Years)
Developed technology |  | $ | 6,900 |  |  | 5
Customer relationship |  | 1,800 |  |  | 5
Trade name |  | 500 |  |  | 5
Total identifiable intangible assets |  | $ | 9,200 |  |  |
Pro forma financial information has not been presented for the Sofdesk acquisition as the impact to the Company’s consolidated financial statements was not material. The Company incurred costs related to this acquisition of $2.0 million that were recorded in general and administrative expenses in the accompanying consolidated statements of operations for the year ended December 31, 2021.

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