SEDG - Earnings call transcript Q2 2024 | SolarEdge Technologies, Inc.

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Operator

Hello, and welcome to the SolarEdge conference call for the second quarter ended June 30, 2024. This call is being webcast live on the company's website at www.solaredge, in the Investors section on the Event Calendar page. This call is the sole property and copyright of SolarEdge, with all rights reserved and any recording, reproduction or transmission of this call without the expressed written consent of SolarEdge is prohibited.

You may listen to a webcast replay of this call by visiting the event calendar page of the SolarEdge Investor website.

I would now like to turn the call over to J.B. Relations Investor of Head for SolarEdge. Lowe, begin. Please

John Lowe

the then you, us to Good quarter XXXX. June well With everyone. quarter are the for Executive afternoon, Zvi the review brief review XXXX. results joining for for second Ronen ended the Officer; ended followed a Ronen as as financial second XXXX, Lando, you Faier, me third Thank XX, outlook of by discuss of second outlook for the with third of will Chief Thank results for the the will begin Jess. company's XXXX. Zvi SolarEdge's Chief Financial today for results XX, quarter operating and Officer. quarter June quarter, the the company's

for call We open questions. will the then

include our from management's the expectations. to this that could safe Please statements harbor that uncertainties release, you will for statements of involve current a materially actual and contained SEC note risks results differ review press cause description today our more that the this forward-looking and We in posted encourage to complete the of risks website call our with call such ahead and filings uncertainties. on slides

considered as or non-GAAP financial measures net prepared of be with measures, a which the SEC These accordance this presentation because in with not in believe certain release, operating note describes to presented Reconciliation be this our and and per are GAAP. how GAAP. investors in performance. The non-GAAP of these U.S. and that provide means are presentation understanding with we management earnings found non-GAAP superior presentation in measures income net substitutes can non-GAAP evaluates not U.S. Please company's measures measures in company's from, the they filings. accordance diluted for, share, including evaluating prepared non-GAAP isolation should measures earnings

copy by over the copy the I the have section Relations material visiting not a of do a now Ziv. release or the ended company's of call supplemental turn XXXX may to XX, quarter press Investor obtain who the website. Listeners June will

Zvi Lando

Good you, approximately joining were quarter Revenues highlights afternoon, for million revenues all concluded quarter solar from from were with of in non-solar while on businesses J.B. conference you Starting our million. Thank revenue. approximately $XXX our and with our the second $XXX results. approximately $XX call. thank We us million, our business

shipped power inverters XX,XXX we batteries. and quarter, of This hours optimizers, XXX X million megawatt

with up quarter, Our sell-through demand for by million, the we expectations. our first line meaning was quarter XX% the approximately undershipped $XXX approximately in million, from $XXX

regional we the Before breakdown, we and to I'd into recent our the volatile solar this address the focus market. time and in to navigate like as moves business strengthen the areas dive company key we have our made

are We areas. X on focusing

through The growing share first business and their the our customers our satisfaction supporting and success. of is

we made to customer customer year, of last through ease to experience product have our significant improvements the installation the service and products. Over quality and of

resulting We seeing sell-through are in efforts. positive data from already these momentum

a position space. improve in share build storage new by envelope energy the we execution which in our is of product generation, hardware aimed map, and Second our serve technology road the and advancements and is segments management pushing profitability segments software to in and of

XX and commercial growth new released trackers system, generated in mount gradual products over our last seeing are revenue ground We inverter from the including XXX-kilowatt storage. months,

release including the U.S. months, markets. and next on generation next within we XX inverters, products for also are We excited will European optimizers the and batteries the of residential that and focused

run revenue will remarks. in our sizing such channel the company rate. and are his true this with is clearing touch a position Ronen Third infrastructure financial that is healthy business we inventory in post for our further stability ensuring growth when on aligned

And second our of details now results. quarter the to

the suggest second reports market Generally, segment. residential flat U.S. in the quarter. installations relatively with Starting that were

and general While inverters rose sell-through this the U.S. installers, the storage growing where XX% to system, optimizers and We the benefits and have quarter-over-quarter. the the towards recognition across the strong traditionally DC-coupled we large our space attribute in periods during backup of been of XX% growth recently our and market grew sell-through in battery in of a our in trend residential in outage country. extended experienced the several have market events quarter-over-quarter TPOs position as particular,

in are the California installations and Puerto where up were strength, batteries particular, Rico in our second We in seeing of quarter. substantially

content now on the the begin towards optimizers domestic beginning focused are U.S. the products XXXX. to our are shipping momentum domestic in shift content residential domestic maintaining through residential of and We and expect market inverters in we shipping content as batteries

monitoring, quarter U.S. standardizing capabilities their and encouraged cutting-edge global enhanced to portfolio first commercial. from a the interested low the remain systems. U.S. management year-over-year. market XX% enterprise increasingly and as seasonally quarter-over-quarter cybersecurity We Sell-through large features, highly panel sophisticated our customers Moving our in level was by C&I due energy potential safety up are to XX% solution of up on

Added to interest products very are shipping we to content end for domestic expect year. that the before commercial we this begin the is strong seeing of this

to Moving the in in Netherlands QX continued the residential declined fact, The be straight to for quarter. and, slow third in Europe. market

relatively the down optimizers sell-through in For up XX%. European the in second not and was year sell-through over In the market our of half in with last quarters, X% is X%. X there has SolarEdge, quarter been residential batteries C&I for quarter-over-quarter, countries. up in most expectation was second inverters the flat general, XX% acceleration the an and commercial, In Europe up and

the which time, remain storage battery, inventory sluggish. the recently residential which benefit in likely final that commercial stages position incentive is In the our in years, plan we program, in recent Until the market of commercial include Between in a to the approval. regulatory Italian market strong European channels likely eco-bonus share residential Italian will of program, however, market, our the our a commercial will significantly boosted market and special released are Italian a to from C&I component. however, equivalent this consumption in products

Markets the up was the region, in In International second million, quarter-over-quarter. $XX revenue quarter XX%

supply record market, quarter. nice We revenues making discussed in as the The we are various to global quarterly ESG to in posted infrastructure in standardize on many X cases, related and order Scope ratings. Scope momentum strides the second corporate is address we meet and customers equipment chain emission what above standards, for in to our safety enterprise their here where X Thailand requirements

the progress third be on the continuing of and to quarter. expect inventory U.S. We normalized clearing channel by largely in the are the end to make channels

behavior the European are changing of the hand In to levels compared targeting Europe, the of markets distributors part clearing XXXX days to slower past inventory the of early lower in who holding will extend into above-mentioned likely due recovery process on practices. and

to will revenue our During the channel this demand products. period, for track inventory, underlying the clears below as our continue

Moving of the we to and in my for Intersolar At the focus of optimization products commercial expand announced our software-based global June, to energy ONE start and product map. road in platform I for discussed the on C&I, second our remarks, in area Munich industrial SolarEdge rollout applications.

and become and strategy software a protection. as enhanced SolarEdge requirements management ONE is our for and share systems piece to margin complex cybersecurity and sophisticated energy require capture market C&I more key of

features ahead. to started additional already in We quarters services adding the we'll sell recurring and be have software

well SolarEdge we acquisition and and integration added go-to-market SolarEdge on organic as Hark C&I of the is Wevo. of assets based for a of through the combination capabilities ONE technical as developed by

Let's a made in talk of cybersecurity. the decisions. share in a growing customers, C&I In have about go-no-go a bit recent factor months, segment, especially procurement cybersecurity their

from government bases and been While installations this long for or to universities norm new the military of stations. sensitive common customers buildings, types like gas is becoming has it all

have significant which is We this differentiator. real expertise a built area, in becoming

At several the place regulations critical countries already comprehensive have infrastructure. for cybersecurity same grid putting time, in more started

regulation meaningful should bodies and with set from us as position to comply rules are with as competition. quickly We be dialogues any in many regulatory a result, which have apart new to we further the expect a these drafted, new

In more to are for fact, the RE+ attending those on workshop learn any join systems are leading invite to month we about we this California solar of cybersecurity critical topic. in next that

optimize energy new for inverter will reduce X-phase our cost next-generation available European unveiled next-generation that This per we our designed systems are backup that the next-generation This attached countries. of install comprised inverter markets Intersolar, increasingly X-phase at significantly German-speaking inverter times year, and be fully significantly reducing will solar installation we on seeing will costs. to residential Also and to and battery. simpler next solution larger rooftops in watt is be also

a trajectory seen the of quarter, a has in made first recent Europe. batteries to that commercial in space In is market the This think we the outdoor residential follow growth we storage years. similar shipments potential to our second

within an indoor released expand storage be will XXXX. will offering battery Our that in commercial

silicon XXXX. American level backup North power and collar. system costly next-generation for and market which is will the based pre-equipped will while released features come This PV our we on month, beyond current will much phase next deliver inverter power elements system half an second greater RE+ interface will include carbide enhanced The and with be our panel inverter main to topology new expected in offering. battery be The inverter, above the efficiency, advanced residential means also of system more upgrades. avoiding to switching single and displaying install that safety backup PCS, customers meter new At can be

to This a LFP-based new modular scalable we Also our be will from next-generation at battery that X.X level. in DC-coupled and our the kilowatt XX to module optimization hour RE+, module-level battery. solution bring be will expertise showcasing battery U.S.-made will

improvement relative current will offering. represent also expect We it a phase structure single cost to our our in significant

this now Our in orders or tracker gain megawatts of installed that are scheduled have the be There are process year. product approximately megawatts continues confirmed installed and installation, additional that XX to approximately also XXX for to momentum. been are

month, our our run QX. XXX second single operations. we as megawatts XXX of megawatts achieved during to in of rate facility, approximately inverters Moving we announced manufactured In we phase quarter. last the Austin, And Texas target

produced in States announced XX% for believe ITC Florida. we racking the customers in today. is paired the when in our our optimizers use optimizers to U.S.-made that first the available safe to second the allow domestically United the elective in qualify adder market, second shipment facility TPO manufacturing with our content the XX,XXX inverters contract from harbor equipment domestic the quarter also of and We U.S. that manufacture We of

the year. the of commercial We are domestic available on also to by track content have end product

produced well. we begin domestically installations the to incentives. storage mentioned designated plus access installers credit to products also as shipping TPO and market enable first is opportunity which As of expect quarter an able the bonus access in the are exciting to IRA XXXX, solar the more for storage above, as various These expected solar batteries to are

we underlying our To to quarterly today. product channel which million cash revenue technological and to road at now a flow products in I stabilization in quarter we should the business remarks, clearing and and return enable which growth taking of of us hand The already map and the conclude in my set profitability of represents a continued inventory to stage additional post it environment, over more will we be are $XXX expect for actions gains in revenue clearing market taken XXXX steps to $XXX level post the surpass have second areas inventory with quarterly million, will and innovation. share Ronen.

Ronen Faier

quarter sales you, good Revenues were and residential -- revenues for second $XXX.X which the million. everyone. solar attached from Zvi, includes were batteries segment, the PV our Thank solar Total $XXX.X and commercial million. afternoon, of the

XX% representing from million, revenues revenues. United solar this our quarter the Solar of $XX States were

were revenues. were $XX Europe XX% the of million, solar solar our from of revenues World revenues total representing representing Solar of million, solar $XX.X our Rest revenues. XX%

On just we for international to shipped the a megawatts XXX total States, to XXX to shipments. United under basis, and megawatts Europe, megawatts XXX of megawatts markets, XXX the megawatt

As rates, mainly installation in necessarily trends. in geographical the revenues or competitive not last of X our mix inventory the and of long-term channels environments quarters, result a does the levels is represent

majority residential. XX% hour this quarter total with international shipments remaining we Europe shipped of megawatt the the of XX% the to markets. shipped the commercial megawatt while batteries, XXX products, and In were were second quarter,

still XXX were on shipments lower approximately basis shipments of represent Our quarter, percentage drag points but margins. as U.S. this a total a battery our significant of

In of than to the we imbalances the inventory quarter, second distribution to ratio revenue products inverters channels, in mix, portion of the within a as due our higher well a shipped larger last in continued commercial optimizers quarter. the as

quarter, watt last $X.XXX, was a per increase battery ASP a from this As XX% revenues, $X.XXX result, excluding quarter.

optimizers to of this the typical ratio ratio was While the is XX:X. XX:X, inverter quarter

In our all, first implement financials mid- measures to inventory, price the help have quarter. as in reductions partners within distribution of the quarter, XXXX, discussed. to high translate in the to these to we second we average In range in promotions began balanced reach level channel single-digit we to reflected which effect be our expect started of previously the to to

per ASP quarter, and previous per geographic down in was The largely price reductions this hour hour on to previously blended batteries Our $XXX the all decrease mix $XXX TV-attached due kilowatt announced shifts. quarter. is from kilowatt

nonsolar margin a of compared Revenues $XX.X in was XX.X% for higher our this other we from from as quarter, from revenues. gross segments storage business, prior energy negative comprising X.X% the quarter were the GAAP negative in million. resulted to Consolidated quarter all a the economies our scale that benefited

quarter, compared includes benefit. margin to XXX gross to IRA benefit. compared net consolidated Gross This this quarter the in including of of for the solar quarter. X.X% negative prior basis net negative margin our Non-GAAP points in X.X% prior segment IRA amount was X.X% X.X% was basis XXX points

this saw in Our first what direct to gross similar quarter. we relatively margin quarter the was

second as to warranty decreased expenses the of as basis cost goods revenues, percentage our offset additional U.S. increase manufacturing. the In a higher seasonal of of our a related points ramp-up approximately of and by economies by non-GAAP other XXX quarter, scale expenses result related to in sold of revenues

product fact warranty-related the on an reliability dollar lower our it's over decrease in Notably, an expenses absolute accruals of improve the year-over-year and that well yielded to measures revenues as basis. XX% impact as

was sales our negative XX% nonsolar last from to a business. quarter, compared margin our Gross nonsolar negative result segment of storage a higher in XX.X%

the quarter-over-quarter for were million quarter $XXX.X the a the on to The is the million $XXX.X roll-off items Our expenses second expenses reduced that non-GAAP in compared in quarter. to basis, largely first operating onetime increase non-GAAP of related prior quarter. -- operating

we of first implemented million, measures we impact reduction anticipate $XXX to reductions in $XXX stabilize the the cost the the taken range we of in in the to recent third operating Following the have quarters, million including and workforce quarters. expenses

push significant new continue We to our expenditures allowing product will down while work to development. resources for

operating $XXX.X loss was in to million the quarter. million for previous in the quarter operating quarter previous $XXX.X loss operating of the per of GAAP loss to quarter. $XXX.X was operating Non-GAAP an million compared $XXX.X compared million loss

this loss was $XXX.X loss million the compared quarter for million the $XX.X operating quarter to segment Operating Operating segment loss the million previous solar quarter. the this $X.X compared $XXX.X operating million loss of of for previous to nonsolar in was in quarter.

income the quarter compared early in the Non-GAAP convertible the of to notes represents a of the financial $X.X part income expense GAAP convertible income financial $X.X our previous majority debt million for XXXX redemption of million million, September non-GAAP other was the XXXX quarter. which of issuance. was as $XX.X

million the tax benefit previous of tax non-GAAP quarter non-GAAP one. to was in benefit compared Our $XX.X $XX.X million this

climb non-GAAP we tax upon Our the for and was rate to XX% XX%, it to expect back return profitability. quarter towards

GAAP net second the previous for to loss $XXX.X the a in million compared quarter. net $XXX.X GAAP loss quarter was million of

net in the quarter. of to was loss loss million $XXX.X net a previous non-GAAP compared non-GAAP Our $XXX.X million

compared GAAP was loss the per $X.XX previous Non-GAAP to $X.XX $X.XX quarter loss share $X.XX per previous in quarter. second to the net diluted share net compared quarter. the diluted for was in

balance Turning now to sheet. the

As of restricted cash, and XXXX, bank equivalents, $XXX June XX, approximately investments amount cash $XXX bank is this million. million. deposits, Net cash of were debt, deposits

losses. net million. our This a operating quarter, largely activities cash utilization This was reported was used result $XX of in cash

exceeded cash vendor Working was capital second collections quarter payments. a the as in source of far

However, consumption a in of accumulation delayed tax credits reimbursement and increased we IR expected. higher initially than an resulted cash

receipt legal million acquisitions as quarter in both well of manufacturing minority Cash of CapEx our following authorization. regulatory Wevo, of related the to which AMPEERS, included investment U.S. the share and closed the to to this of activities, $XX addition related as

to long-term $XX In increased addition, customers we by million. credit

approximately we shares Additionally, per of a million. repurchased of of cash for this price $XX stock average quarter, our XXX,XXX was of the million. for share, flow common an quarter $XXX Free $XX.XX purchase use gross total

a to in million to reduced to step range down anticipate the In be burn the cash burn free expect the third quarter, to $XX million quarter. fourth of our and we again $XX

receivable expect this of to compared positive flow decreased million the to last to $XXX quarter. in $XXX.X Accounts We quarter be XXXX. net half first cash million

As days first in DSO the XXX we quarter from second days brought down XXX a the quarter. result, in to

We particularly by terms customers in collections payment lengthened successfully continue Dutch despite made European to customers in make and market. from the

XX, net our $X.X of level inventory billion prior June As quarter. at reserve of $X.XX approximately was compared to in billion the

Our in days average quarter quarter. second inventory XXX from first XXX days days to in the decreased the

time U.S.-made line U.S. as have it quarter, content. accelerated the the for relates demand seeing our manufacturing we particularly significant are to ramp we of products, This domestic given

in that note slower elevated level remained the in our while to declined would recovery second due Europe. they inventory the largely I quarter,

We inventory of end continue levels $X.X XXXX decline to to to expect approximately our the billion. through

used late In substantial due issued of part to repurchase convertible raise June, financial in portion of term. long of focus ensuring capitalize stability XXXX the XXXX. This $XXX the and the notes third and ourselves on in will portion to area million notes due we of our proceeds a company was that positioning convertible opportunities a our strengthen

items Before to our the quarter our guidance, a assets evaluation turning of capitalization, of to light is in value of and impairment the as of to in third in-depth determine in stock book result third the the whether an price required. quarter decline conduct intend we market of our certain

We will our give the quarter. next in update earnings for call and testing on our third this Form XX-Q impairment an on

third Turning now of quarter for to the our XXXX. guidance

range $XXX million. guiding within revenues to million $XXX are the We of be to

negative range approximately to benefit. We positive including points IRA net expect non-GAAP gross margin of X%, to the be XXX X% basis within of

$XXX to We million. expenses non-GAAP operating the of expect million range within $XXX our be to

be expected $XXX the basis to X%, to including net segment within Revenues margins million range solar to X% IRA million. XXX solar the $XXX Gross points of range approximately the from of is from of expected be benefit. within to the segment are

operator now will over call to for it I turn open the questions. to the up

Operator

Shen Partners. go Capital Roth We'll Instructions] with Philip to [Operator first

Philip Shen

between sounds associated And like margins revenue be could this And look I realized with normalized it. it cadence the when of you mentioned you normalized might in the be quarterly it missed So might if 'XX. the back half XXX? million the of and revenue? to the on like now. what margins might be sounds like $XXX If closer call, it hit What sorry now

Ronen Faier

you, Phil. Thank

million we a $XXX XX% that normalized that XXXX. all, of be margins. expect at quarter gross margins expect to correction, And point we first to So of of second the we arrive level in gross stated around

X relatively The in related next -- is of gross growth through a and way, which relatively we our moderate there impacts modest in the is margins the expenses. XXXX in to by and That will QX we actually, the that the to a going quarters revenues, some quarter. seasonal going by also yield in until also, QX get increase be see warranty of this support supported expenses in

the that with QX XXXX. sorry, be that therefore, QX will will to happen most economies a revenue, be the margins QX between to gross will -- scale of accompanied accompanied of million, So we're once similar QX the we see growth will in given $XXX growth getting in to between strong

Operator

if Mr. mute Lee We'll take check your Goldman our is line open, Brian next with Lee, you question your button. from could Sachs.

Brian Lee

sorry Yes. about hear Can you that. me,

might have I think mute. been on I

John Lowe

Yes, we hear you.

Brian Lee

flow free when to outstanding expect to of think million period, still flow a maybe the back rate, frame. run now maybe just cash time the in math, free interim, about that you'll like cash Phil's or just 'XX up flow between that's follow and sounds and the QX run million in converts the I positive rate kind like you When on it burn sounds get of another But have $XXX-plus the Maybe it you if also $XXX cash neutral. question. you to do

to looking things you're of guess I how just what to Are going is of in a as could but not value? monetize? review 'XX? potentially in look to of you strategic there look And potential be the address here wide-ranging asset wondering, through divestitures, you place part that? determining the you're So there is to going into strategy write-downs is just that review terms scope

Ronen Faier

you, Thank Brian.

reduce of the going that constantly in to I'll to to other can assets which of start our do question. rather order business second do Actually, is than from we side. that the the So to related mostly on book profitability, we're elements cost or is do the either the part review the improve something value we that

So this the in to be assets. will of whatever review we related book do our mostly value

usage and that in Now in actually given when assumption also the look still see, between a fourth we is you take, million believe again, general, we the to see $XX that cash give $XX in the your would of I we possible or at -- number is that quarter that around and this or as above then cash million, we million $XXX accumulation that next in something keeps assume fact that, have. lower will debt the the a be number us all quarter. anywhere much And that that

to -- needs way, also September while exercised. which intend timing this important fact to it, new of basically the only repaid has $XXX and convert do, was about the be the $XXX changed. million though, part is issued of the We're our more greenshoe the actually strategy have and 'XX, that returning by that The debt, is we now the we million here, another in

little a it's 'XX. only be bit of returned amount So in a bigger will

see the cash enough So that that way is we have everything. in we cash to we enough general, support that have it

of the IRA that acceleration burn that actually and the to you The this do last and in we where world, now after of quarter the U.S. right IRA a have In already incurred. of the very ITC normal it. manufacturing credits thing that is very you been Part have it would like important. developed see is would the it is had a I the been could being state, related sold credit, result an market there the

have is year. thing the yet now. during will not of million And credits Right credit selling end this expect is this be to by year, not right accumulated of that the the part that for but $XXX we we see And market claimed now, XXx yet ITC the there. approximately of such, as

cannot frame credits We immediately, is the increasing the means we're in that accumulation by turn, are time This, manufacturing. utilizing way, sell we accelerating of that, our which IRA cash.

to IRA kind before have an of of all million the when of either the market credits selling open recover expect these this these of assets, end for will and We accumulated year, $XXX we I it's in that when or Or third will of more matter financials else, think a the we ask reports simply X a file pay X second or or for direct tax we quarters. our quarter.

So the in that I by have that IRS. burn and you see happen, as, aside just say, money we from be it. it that to essence, be equivalent that the of putting expecting cash money we is part of And on it to as should actually IRS confidence the is long right now feel paid in something almost viewed getting level should would the as

Operator

Our Mark next question comes Strouse from JPMorgan. with

Mark W. Strouse

Can just talk it does kind maybe lower out of channel expected, yet? $XXX pushed million the how in-market frame. to to kind have of come versus that later in out the selling your market, than cash lower demand kind up time or following that's you To there on into weighing a clear Just extent you're there question. that it Brian's your gets how trying about is flow of a improving

Ronen Faier

Sure, Mark.

by for start the I'll thank that of So you and question. first all, -- Mark, yes, saying

data we for at million. that sell-through start I'll above have on already by based QX the So we saying that $XXX are today

we expect a growth see, to a million Europe. we products that trackers, result but now, to the XXX-kilowatt to the is very a is of to that battery, places in natural massive something start So see especially right demand, expect much already Italy it not product other today we of our we are a to that we see which to the inverter, commercial growth rather and add the see new the where this related lot and in $XXX

additional that growth very feel view prepared with comfortable stone we a increases that fact said and in also we stepping the will our as it as follow see sales. general, to expect given more remarks, in we $XXX So million, do we the to in the

Now to when utilization cash, there this get at number. are look planning stages to are think when I cash that we we X above

the do sales getting is First and paid we we a into majority, the something That that the inventory to usage actually, will see to that and for. we releasing inventories of most come over from manufacturing that all have Most we've of of lot that is will the have. will of the not already all, that if this the States. inventory will the Europe growth we involve expect of come European in to next paid of going means the cash that United Europe quarters from come already And most from few for. number

will one thing So that's see. that we

and will clear we only our will will already in $XXX pace from that be cash it's we how what will that for. be that to to cross need the means products from million, therefore, throughout the needed. much Once And been will and be to and be most least of return growth we not warehouses, manufacturing paid that inventories then cash assume even getting this. then financed growth XXXX, the of question and flow will at of should positive a channel, XXXX, of But XXXX, because

Operator

question comes Colin Our from with next Rusch Oppenheimer.

Colin Rusch

Sorry to share you there -- and competitive how innovation is by you in a the landscape taking about little start about is I here, big bit how that, like products happening? an can change cadence on was bit opportunity invest little talk innovating a to you fast continue for Guys, how And the as of mute. the much more aggressively?

Zvi Lando

thanks, Colin. So

of very actually we're efficiencies remarks, that we with is success. are in their first focused share a growth mentioned is the of success via to the I service is on step focused in literally their improved terms enabling think and on of ease It where regard, customers. as our our situation prepared translating I share that in installation. And growth

quarter And in of us. is the And high back that versus evidenced the I us either also translating second by more it's or quarter. coming installers sell-through increase the think ratio first to to trusting in

The products second indeed step second the -- innovation. new and is

with segments presence of are next-generation strong aimed that and inverter single already Some single-phase like at in we are the battery. them next-generation a phase

offering And segments that for some we not of are it's for, an ideal but one. have them the

the that Like inverter, and for Europe, the which a larger XX-kilowatt installation, low reduced segment. also becoming in with differentiator. Germany, we this for large which inverter solution is able be with power, potential we and residential In power is inverter residential innovative high X a and a for much installations and inverters solution an cost high are today to -- becoming will one of support in do efficiencies the key performance, also in ends next-generation a our is both larger of XX-kilowatt at which with at

that innovation the in. there's we in are So segments

There like ideal parts are segments serve in new the indoor or we that storage in we are in today to outdoor. an for solutions commercial we are that segments don't then manner. the innovation that both evolving completely don't serve And there and for

that is components. But seeing what would we're I today around, say, X innovation is

and with is power The old-fashioned efficiency increased safety. harvest, together the first

more whole lot room a They optimization The more are the and which expensive extends interaction. area reduction of large grid extent, that and management, electricians. for more cost in cost resources, There's take And second innovation the is install. and software cybersecurity to is installers installation the space. third a of complex. a lot into reduction systems They time take to and because the energy

innovation these on X in we're very segments. focused So

new what the a with seeing very and conversions is And faster this customers. of result about we as of And are we're when high. releasing software, turnarounds that, impact capabilities of type of features feel essentially, talk you in cadence

Operator

We'll Stanley. with move Andrew Percoco next to Morgan

Andrew Percoco

already continuing that understand time, guys questions want that that markets. in a some today come clearly much will but stronger you have there's it destocking some at mean to revenue pushed asked. that key your maybe for higher a back undership in get deteriorate demand same continue of But just environment. the of feels the been underlying your happening, At to look the are to right. up that is cycle to still like lot margins set posting to I business just I and I

have to you're of by what if maybe continues sustain to the doesn't the of discuss second just liquidity extent actually XXXX. quarter to kind this pushed and of cleared to the sheet such your get some internally that maybe right, to you this balance fixed doing costs that yourselves rationalize can the destocking So to you

Ronen Faier

first Sure, the all, Andrew. question. you for thank And much very of

actually at So see see sell-through by point the U.S. the in U.S. was of We do in XX% on in the we opposite. a almost bit residential, QX which you all. at it about I'll flat. in where only in view, XX% in saying about And the Europe, place sale It our over increased was deterioration over little start it of commercial. commercial where Actually, that do increasing. the not saw is X%, deteriorating

cost the But of that of see lot this in reasoning a other changes have we the and I the reductions. do that of So of case, took there. also and to of elements some not the the we that base think is question, convert part raised

call of way First of first would to costs how able we cash expenses variable cost sold. I control in all, at operating is, it, reduce the to we our are when of the and, goods all, look

short force painful very something implemented And actually, cutting reduction a of not quarter, by have is approximately necessary help before. here, the third very And did $XX that this activities that that term. to as for very reducing we were It compared beginning is was. we more were where will us by million something we as in expenses the it at the

but some painful By did now we right will not because of we long them are is them the much. that term, so invest way, thought need something the that it for we

and power of We of lower-cost if moving some regions, many were AI make and tools to can like centers our our activities course, term more they respond every can of a to even coast lower order applying that pricing migrating that representatives translate we some languages as speed and different local. support conversations our are in completely way have, increasing areas, they of our talk language we sure to allows to renegotiating that to in efforts renegotiating if

lot things a done are being of there. So

in our on are on United need all fact manufacturing cost that But a we of take but to the the we that the that that doing thing have to do here, manufacturing. expenses what help course, that reduction, inventory have in we even of a we're we And fact doesn't measures sell. our that lot the And next to given products, lot The of of reduction. we are are continuing again, already we we products the have cost States, inventory looking at reduce is, to -- related costs.

to in getting is this something do But sell-through a general, would the order to to pushing relatively spending a time other say we in that bit the reduce efficient that expenses that pushing fact do can, reduce operating to cost, yes, normalized. all is -- stable the we on way items, of we're using time. things, reduce the I more timing see that a be little that, we indeed if in So

by we And of if are we of million needed, to debt XXXX, and deferred needed until delayed have these the about XXXX. that $XXX all basically return we not it end of

also something the water inventories ship, cleared. So sailing this the continue us of buys so this that enough can are we is below being while securely kill

Operator

next move Gosai America. Bank with We'll of to Dimple

Dimple Gosai

Quick question.

And I did battery guidance, mix? margin gross you of what So this your single-phase can margin hand at have? you impact to you inventory product would on many more gross extent specifically, sales quarter? As on how years elaborate look say

Ronen Faier

Sure.

all, of the for again. thank question first So you

the this a quarter. of very would approximately drag this the on batteries I of bigger this revenues gross dependent our portion represented that little is lower. bit we margins batteries the are, revenues have points So because product single-phase overall say, The And the always, I'll a from basis themselves. is XXX much on start

now this product in growth in to we it these fact comes products product, is sell-through have it when the actually that of is the quickly general, enough given U.S. the in relatively where that directed. we're seeing products sell that a market In the it mostly products see we we rationing right can this basically

be these of then. our of XXXX, usage will fact next-generation product need that batteries we But given ration to the until ready half only towards the the second

to these expect batteries the by quarter. these So batteries anymore. not not we of maybe until third middle up than will in And have will then, we the somewhere longer use simply XXXX,

our how this, also is saw have the products we compared international to the right gross is that the we're than as influence are margins. to what to margins residential were much portion And it quarter Other much commercial, we XX% the Actually, commercial higher. quarter, of much getting that Europe actually we also last we of by on lower the products. megawatts as sold -- that shipped way, them the of is this -- the selling markets of the now in that of with going see and commercial see products related this quarter are majority characterized

we U.S. there. as expectation the for we residential market residential enjoying expect will see that And also once margins, will do to and some is again, the start that better the Europe next are in also grow years, help

Operator

We'll next with go Levy to Jordan Truist.

Jordan Levy

in kind of in confidence lie You that then those talked inventory want of of just And how about of lot approach sort maybe you undershipment kind complicated clearing sense kind and that all the of along to levels where this, next a lines, dynamic of guys your first I half a of year of thing. Europe? kind but have get

Zvi Lando

sure Yes. And looking, properly. that make look on number make. sell-through. sales we question the a reports from I'm per part at that's I we the trying understand are and we distributors But how get to our they

it And installed, an obviously -- and soon as it is inverter see track the and installation. installations we we and connects as

basis So a basis, are channel on accurately able a on to business the product basis. we view underlying on a country and quite

of from little coming seeing have bit installed first are And for second we where visibility million is are being which opportunity. in the $XXX in $XXX second this quarter share is expectations. the ones is we're and we this quarter, from and the quarter, the our good million terms when the which basis underlying above gaining in So and where products growing in are countries business about more to that there the a

of shipment. course, then, we what the ship under relative quantify to And to

no of European the $XX we're inventory the in international run already was the how inventory and a the to year, So rate XXXX for the by basis at third quarter, third our and the which of XXXX of under expectation this is routine market beginning this the U.S. plan clearing much in the this of of of -- the of shipping quarter segment, this end most the pretty revenue of and -- quarter and and leads at about a million.

Operator

question comes Bank. from Our at Blanchard next Corinne Deutsche

Corinne Blanchard

revenue take little that any there could anything can inventory, So can you see is that your and you is one question more that is with XXXX through XQ to on anything of call but in we mean, do that the maybe go a you enter I maybe inventory, there normalized measure sooner? coming very faster?

Zvi Lando

I XXXX, much clear channels that question. to have. remaining all we close Thanks extent was of -- our trying Yes. a exactly that what for And reflected is all, of and the to first our this to help And do. is message main in inventory of for is the the that large as obviously, our think this to we're objective

a offering, optimizers. already and need are of our management and is same our customers the is where because is deficit complex. they places inverters. And some Now breadth inventory inventory in other optimizers, -- the need There of there product time, at places in

our move they installers to or So some and clearing directing in mating opportunity parts to able some projects of the which mentioned inventory. missing that order help promotions the to price the a bigger to portions in extent Ronen well distributors cases, reductions move on the be prepared are have as by that are that efforts the remarks, or between of large inventory, so have to effectively between channels our as were in in

global of not and of special and and on this means year what and and these of into are order next the in a the support we quarter first to on regional looking by So on the promotions channel focused level, clear or likely end level optimizing indeed again the through country is year. only and a

Operator

Dylan We'll Nassano with Wolfe Research. go next to

Dylan Nassano

of the In in back Europe. remarks distributors to the spoken past, distributors the OEMs patterns changes of were purchasing number stocked. about you've to wanted they've Can just around reducing I go how prepared are to provide inverter taking up brands said way, another in I channel? update guess much and space kind they an third-tier that just in process? you how still second- are the on where Or

Zvi Lando

at one So at look it we're being executed. that and a need a is this you distributor trend to seeing time. qualitative definitely But comment,

Now from inventories that doesn't in second- second of mean types market sub-distribution various still that and in third-tier they suppliers. or and remaining are tier the not

to that have card But as similar of, is with the in period distributors, large a power our to in rationalized tier Europe a term, combination mix of the more general card non-European with that before module-level some but case, there large line first declining. shortage the there pre-XXXX something their string local than to third-tier extent, -- much and inverters and still of around said, -- are line shorter string, volumes products with a still before, but second- are electronics than gradually as I moving are and

Operator

Capital Markets. We'll to move Chris RBC next at Dendrinos

Christopher Dendrinos

today? your to rationalization you refine is opportunity the capacity global further an question have manufacturing optimized balances, going go there as Or My manufacturing continue supply, do you and to cost on to believe forward? the wanted back that is, I efforts. manufacturing question inventory ramp U.S. footprint to footprint you

Zvi Lando

United for the United States, challenge are the of is it a process It indeed we have of manufacturing and a is -- ramping of and in the we States. the question. outside still shut Thanks down number facilities

not So an now. right optimized point at we are

is result some are complete to optimize. yet closure cases, affected the to able not as haven't fully -- margin of a our of we factories underutilization or still for this gross and that been underutilization that, have transition And during come still we that by costs

a in But we're forecast for It facility in States. is leave going manufacturing XXXX. full the United U.S. footprint probably a ramped one optimized that where the us are to So facilities yet. and Austin will and Florida it's the and we in reach few outside not for the have that optimized XXXX of seeing to quarters take

Operator

to move next Barclays. We'll Christine Cho with

Christine Cho

a question. just I had clarification

necessarily the in talked kilowatt only you said producing think should And who that right? how manufacturing. competitively think is, that will XX I for inverters. if have you guess, need U.S. domestic I think streamlining that I facilities up you size. customers content you've that I your may want about Is And about be past, that the but how don't inverter that sets

Zvi Lando

we kilowatts that the power, up which a capable XX.X is on and customer. is manufacturing inverter backup grid backup are The of the power to of for fit with requirement inverter

gives it them of actually for they benefit applications. the have and for, targeting buying the amount aiming it connection on-grid when are for So a that they are PV they a system grid that

is benefit XX.X% is doesn't it of The them. not their a competitiveness expense to the -- backup capability does at it make -- not come it

Operator

We'll Kashy next move to with Harrison Piper Sandler.

Kashy Harrison

well. on And yes, here sliding a thanks in as me for

on include the response the the Phil's real question, So to clarify did points gross XXX quick, to margins just XXx? XX% basis of

And then maybe just a bigger question. picture

Intersolar. for You X-phase a talked new resi Europe of at products suite about

within content You're storage products also the talking domestic for and U.S. solar about

of the the goods I in how you curious, inventory want product do think risk you're And about year? if next launching was so newer just Europe, distributors the finished obsolescence

similarly, that of content within installers the discussing. sudden, are if same domestic then And that the U.S., and really the risk focused a distributors just on all you're

Ronen Faier

Kashy, the Thanks, question. for

into there I related something think domestic and is here the new products bit the have little first new here we well, are we of this at that to course, in we product X X-phase content So and But to are a to are, yes, account. past looking later manufacture all, of starting products. take actually, transitioning, when elements done as that

will beginning any time mostly selling we by of will that this new this that other product inventory. it other approaching that you one a of segment of so example, to products XX which is is that The that the it that between the this X-phase the And that And today product discussing we're up, ramp a we're for fact residential market not also mostly than we're that our for to of is, time some therefore, much that XXXX, product X-phase first consume have exactly product the when installations when the large cannibalizing expect here, at XX the see done. by is that the we addressing, much, very is means, of the kilowatts all, first today, in is come Germany. and not we will

areas The are we play are basically we that the we producing products the we're second which geographical selling new in product doing thing when can new fact lines actually them. that is within or

the for regions product more And of this sell or other our new products, ability having helping timing, locations very the So the continuing that for inventory the and can United Europe with a X-phase markets with international in us. States. in if while but we're to we only example, inventories is are releasing both start selling a in to X-phase while we much therefore, play importantly, generation

X the on is this So phase.

interest content the answer. of But TPO another important relatively is loan used for made down, of this be is products inventory there. a loan it's, And to expect content, that market. there similar while are the know market domestic a rates that And element all, domestic to life. see by first as can I coming the we is market go will way, mostly we that also back installation On expect still that here, the you some

to to, so use as for products, can and for Unfortunately, product well. this bad, from need this we time, time we good replace

a to lead -- view done way old none would support products I that we way we writing the didn't and minimal So products purposes. are, it off, we that it really rationalizing the write anything to sometimes we continue the very marginal We've in to successfully not sense, say, in that use because for in in off even past, general, is write-offs. a introducing will or

something this is in at complex, to when already little down that we more accrue bit -- run most of harder is The introductions of well, inventory light QX, to our least we not find evaluated that products. as of end these or product the reason did thing write by levels Now any it inventory, becomes have simply a to course, with important this delicately. we'll that know is to but

this regular So also on is do something very a that we basis.

Operator

next UBS. We'll take from our Jon question with Windham

Jonathan Windham

back. to just go I want

held by, Europe. in I of changes the some behavior You had your mentioned installers amount being with in believe, inventory comments prepared of

appreciate little you were I'd could on about give you more there. If talking really bit what just color it. a

Zvi Lando

Yes. Thanks for the question.

were I Europe. Europe. to and think we only in distributors distribution if -- referring it's in not And and

would it's order in to respond to worth evident. hold If, want more of a to distributor think about Europe, to I challenging period, a prior opportunities. market quarter typical current be inventory in the able a bit to

hold level seeing are to point maybe less inventory. reach are that now that, they and We of them half trying of or even holding than a where X/X

inventory with from will that their fit being clear business mind, So and of in bit they discussing. buying it's of that is level that level channels resume the by time a their been -- that take -- patterns that desire that and that goal, it reach level extending to little the the it our we've

Ronen Faier

have of will have are dollars their they're This much well. fact a warehouses, warehouse that inventory. the Zvi's that lean half But answer, of we of is allows cleared millions the products. in inventories what way tens they they go a to within that or you holding. level are a also footing knowing from at to Germany And also that millions take, in means least more that their also them be of of inventory back is that our if delivery, distributor Jon, behavior once our something And to example, the know previous day truck to or that we're as for hundreds managing

Operator

with move back Canaccord. check Mr. mute Moeller, next We'll Austin We'll him. button. with you check your to Moeller may

Osha I'll Partners. move with Joseph Guggenheim to next

Joseph Osha

course, assumptions underpin inputs give there the one you cash where as are and, number is Returning some to talked to the issue, model headed. to sense that inventory you burn of big of us about? accounts the your cash the are your operating the what trade Can

Ronen Faier

mentioned, of it what billion $X.X to first that year billion we compared are today. general, at we all, of approximately end moves the is where as of be So expect, really to in at the $X.X inventory

I'll towards will 'XX. answer will but it how then, So into answer I move also forward

the quarter the next thing your exist means majority, an example, and Europe first based to on our sold of products of sitting saw Europe revenues, is if warehouses. that take last get that are was be over estimate margin about assumptions, if vast all this. will on revenues QX QX in the that our for can go the you of already gross and happened take not And general, -- assumption, in that that the that inventory and take inventories that XX% you'll XX% out So

to the The have, very today. purchase approximately much second thing you or if at new going inventory million something are be is that used even billion also look that components our local decrease and are going that quite And those $XXX this the to is consumed $X.X domestic the we're we of raw content that inventory utilize utilizing selling we and materials Today, products reduces through that of of substantially. that also here. we're

approximately so would million we to of into look want end that year. this be -- I expect we and say if the that towards again, to $XXX

a not once say us say, And compared take significantly end will have increase assume majority, at materials. the to just vast the good that material If would year. around, the end are of we 'XX XXXX, be the $XXX during that on sales in not Europe. raw materials And into would growing not you of assume let's point, I year, I product that that assumption our again, at raw inventory if million to all at will that enough of look be 'XX. raw of the we'll to

proportions calculation. So basically Europe, this are make again, models whatever for you can

that So that's it. at we look the way

various trying, accelerate that other and usage course, are them. to We the have of products we of

on big the that margins next the the second batteries the don't a Samsung make before single are of I batteries product phase that have here, batteries the made we drag really product and accelerating half we're we can to related are because our of that sales not cells think only year. that

will would I to only this. exception say, that So the be,

Operator

Julien to next Dumoulin-Smith Jefferies. go We'll with

Julien Dumoulin-Smith

were especially back third domestic talking And and about for the quarter May you and is time. guys think can are gross go your margin to impacting here, that as U.S. I where view fourth optimizers the shipments and what about of quarter. how of competitive the Can qualifying content? portion clarify inverters some of in now Appreciate recovery. you others that landscape

is the XX% market to achieved that products I and as they're year? in the here expansion and Florida heard about next XXX that as Austin here, share the expectations reasonably ramping which the how content and reaching expectations that already your But competitors market selling, high margin how share expectations domestic in your rate well run comments have your impact your up. here megawatts success impacting for does

Ronen Faier

So it, all are Julien, already started domestic products in answering product I'll contact And actually, We help and actually will we from shipping me domestic start be and if right those I'm delivered shipping need the not already QX. general, will we'll now reach in But please by of completing. here content, that that on, make all States, from in majority products be sold for here the those there. the of United that now. we

believe full that our market domestic domestic share So we we'll of expect really fact accelerating the that losses related be not given to kind content, see any content. we to

is, related and accelerating of we're by QX. the QX. one cash come we're investments this the This that batteries doing at the QX, in started some beginning of are we in will to Now way, that

we now gross this domestic to until expensive, is good it question especially negligible going supply again I see because would optimized. on your is us, -- to part be margin products and more a to chain of So say, is hand, meet very hunting where actually related question and a going meet really, the to one is making

everything not including by given I harming will a customers means be fact just higher, manufacturing XX% having elements, credit we can cost it expenses increasing, in would they by will at the will be that is here the next of amounts on something that years say, the way that a get higher of given our to the entire more And where actually believe very margin. we some having won't service and that that us installation gross goes that ITC significantly recover and these least those content domestic the our through that benefit

the question. So the that of of hope I answered all elements

Operator

move with Canaccord. Steinhardt to We'll next Andrew Instructions] [Operator

Andrew Steinhardt

quick ones. X Just

month, news SunPower the last speaking, bankruptcies First, the guess, of just the and bankruptcy I clearing with generally slowed PM&M installer channel. have recent out the sales

the batteries Powerwall Have U.S.? here. guess second a I a then the in latest in direction And to different started share question home just from significant the take any Tesla

Ronen Faier

answer the start general, the and is usually, question that At in to market. course, I'll with means companies the of bankruptcies of changing Zvi before see PM&M serve of and demand themselves, end, are fulfilling that simply go first U.S. are that SunPower -- installers starting is today impacted to installation and second are out that installers maybe relatively ones that is the that In problem remaining the but will the started significantly business, bankruptcies continue relation So large believe we see the will demand one. not demand. And to of the course know, by bankruptcies or we and the market is that slowing do We the lower. there, not those this we the names do bankruptcies. installers in

fact not little coming see I a better be these given see it maybe scale expect from some even will you'll economies the to of bit that do installers.

But healthy market. we more this impact the little impact as see goes significant not So them a on general, any actually or time do make by. in bit may

was some But our saled areas of to was bankrupt, impact You at their a the least PM&M, see here. pinpoint size, maybe are do we a not if is which may from maybe being only going not which where, major fire very again, products company see one, given inventory. a exposure, large

Do about... to you talk want

Zvi Lando

around the question, I in is the On the that a it that also the of rate in in reported sell-through is remarks, quarter as also growing, some from our And of -- growing by share the reports, think, out spelled quarter third-party first second the fact -- when evident higher batteries XX% prepared in to we growth market. way. is the second the is

highest of is for the gain California. and we've growth say point -- are expense sure, the geographical out from the state I which who that can of at at Puerto a we share pointed are seen Rico the view,

across share I gains think helps the coming that the board. realize But are from. So it's where

another that and more the that coupled I and in is power reputation configuration applications commissioning view, of and is believe. share in electronics also also element is behind but mentioned installation with positive our a applications point module-level reasons generation for has very a the beneficial before, for ease of DC backup important And battery efficiency gains, we and power the which even from the time, on-grid

Operator

to Next question we'll Percoco Morgan comes return Andrew -- from Stanley. with

Andrew Percoco

of gross inclusive year, to I but the is second it, heard that just like the in sure and earlier is, XX% I XX% your materially margin the XXx? by next of year. back to margin a come you the is this what quarter And not characterized that XX% answer margin it be to if want would lower to that I'm guys question. for normalized expectation have than expectation environment

So if would you provide could that helpful. just on be some that, clarification

Ronen Faier

Yes.

course, Of for and thanks Andrew, question. the

not before for And as well. answering sorry, Kashy,

for Andrew, you, thank So this.

and of the first IRA is the including all, benefit yes, Actually, XX% XXx the benefit.

talking is normalized have about revenue since However, portion of large was And just the to we've all departments $XXX a XX% the mentioned XX%, our bigger COGS of that we when million that this down. we no $XXX almost to expenses to a that the these the revenues item relatively serve, were we of million, million almost as on we along, $XXX to to past need clarify have. that this to $XXX are Actually, related going warranty million. percentage within fixed are

happen. $XXX So we reach maybe we a And to million the happen, believe in expecting expecting grow XX%, $XXX see are there to to will because said, as do will not reach we not eventually of believe this are first we second this. to in this we be, will we in once all, we but and will million, to XX% quarter, market -- will change that, that the the

Operator

Austin Canaccord. with return to We'll Moeller next

Austin Moeller

rooftop acceleration residential for in first near-term there? you do the key given Europe as solar business cash mainly being So my catalyst is what do question here, demand

Ronen Faier

Austin, Can we the question? you well. hear sorry, repeat you couldn't

Austin Moeller

me Can Sure. you hear now?

Ronen Faier

do. we Yes,

Austin Moeller

Europe there? residential What being rooftop do solar as near-term for is catalyst acceleration you in cash mainly given demand view a the business key

Ronen Faier

we increase. sure various QX immediate very with countries is a is to at But is see least that Europe QX countries So different to not first catalyst combination major several this a fact assumption for with there of this and the a say not of all, and that if and growth, the must part this that I'm have behavior. problem always is of the I

the from the the that there is be policy not government the catalyst well companies utility as media that from given growing Dutch market small, call and largest to I for one the is the main that think very actually the right the, fact solar. of coming as I opposition now it, market used inclarity now becoming would around

So that's thing. one

by the able much alternative And or if I interest not a rate is there? anything way, bigger this system you to than matter utility, cash what the why investment to of or cost is no electricity you build will the how because the clarity the when do else you system you have is put sell be think, that would of

beginning other it went actually we've Europe during for at still Russia, that this electricity significantly the quarter that as may in And Ukraine do to midst in history compared the relatively second investments quite historically near not of history And reaching -- changes the know as to see low fact we expect When well low or prices of electricity market, electricity down happen the seen the utility. or countries, really growth we so in prevailing and Europe, in they least in in comes what the year, it. prices almost we needed we the believe the that maybe are given is these prices after to quarter war between the in as that LNG past. prices the at to continue catalyst prices skyrocketed next

in prices will least rates once negatively And I when main dealing see be the catalyst catalyst you in electricity most Europe, not places supporting policy that with that as at usually, will you as are would looking main market in sorry, you I the at are policy, storage. the or supporting interest say relatively think --

just The the Second rates and interest the to in and started already, ago and that expected expected. reduced interest prices continue reduction are is by to about be more months expected move Europe. CEB and electricity are up rates is way, X.X in reduced

up, our push So we but again, think not in or that QX. it eventually assumptions this will QX in

Zvi Lando

in is of and was to more Ronen's grid Europe expected, additional trend the kinds rate to not comments. of X is there. that with you usage but pumps heat complex rate increased more are comments, EVs It's great. the countries management it And Europe And varying regions and the and -- at maybe maybe and that add structures it and just comes still not complexity there. The element that at was that and electricity towards that in more definitely moving all the rate see in

like will variation rate and And registrations we short complex destiny Europe, period you or towards optimization thousands there's wide structures or of we rate get and well. a people feature pushing negative a see every this is time because a that controlling as such across release within consumption their increase, maximizing own sales of only features that other that

on the said is and the on the an to everything all agenda in that, on ESG, And And that political side is commercial which point, has driver we will Europe. is the is in said, of the commercial that that regulatory and side, expectation residential high Europe before, some which agenda the faster additional market growth. decarbonization with still resume at

Operator

We'll to next turn Piper Sandler. Kashy with Harrison

Kashy Harrison

sell-through. follow-up my on the is So

expect I think to you think you think million $XXX drain how you geographic a then sense said you XQ? about XQ much do the XQ? in flagged channel that number trying well. in of sell-through as million $XXX give And XQ. in of to Just mix? Can us I the in

Zvi Lando

the notes Yes, the I to sell-through. just on putting up question the guess, we're answer

XX% think is probably Europe, I of million. remaining or the out from percentage remaining that $XXX of million international which towards $XX I about XX%, point think, not it The was so was the markets, a on is probably the view.

U.S. So roughly. was XX% and I was that think of it's XX% about Europe

we of In type terms quarter, in flat, of second clearing range expect that a little lower in the as to it be it bit third inventory maybe the in was maybe quarter.

Operator

no remarks. questions additional closing now any I With or program other over to Zvi will Lando for holding. turn the back

Zvi Lando

thank good Thank everybody a wishing everyone Jessie. I joining call you. today on just for And and wanted you, Thank evening. to our us

Operator

thank We you Thank you. does today's your for participation. conclude That program.

disconnect at You this may time.

SolarEdge (SEDG) 7 Aug 242024 Q2 Earnings call transcript