ENPH - Earnings call transcript Q4 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Enphase Energy's Fourth Quarter 2020 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference to your speaker today, Adam Hinckley. sir. ahead, go Please

Adam Hinckley

Chief thank discuss joining XXXX Enphase are President today's and conference Belur, results. quarter Eric After Products XXXX. ended on issued call press call and Enphase's December Kothandaraman, the to Energy's and Badri Officer; you results afternoon, us the Enphase Officer. release today, for XX, today's Chief On Executive Good fourth announcing Branderiz, closed for Officer Chief a Financial Raghu market its fourth quarter

management performance Enphase statements limited and and and including installation significant our differ call, technology in of conference and tools make to forward-looking Energy's operate capabilities service, and not events this During our expectations. of financial in forward-looking our we but including partners will and sales customer uncertainties in materially to and capability the the to, we Energy's target, Enphase from could the operations, statements, These make manufacturing involve the and products, these changes. of the actual related anticipated available which results Enphase the markets statements the our of timing and performance, risks growth expected expected future regulatory the the in

non-GAAP duty statements which December any the see no discussion and you risks XX-K of will place note adjusted first the these as and a XXXX not a with a filed XX-K financial or undertakes in future cautions of forward-looking be are of For that obligation website. posted unless to complete financial ended expectations. update a measures of and reliance section please charges. the in also has its Also, Relations GAAP more events annual otherwise earnings or Form year any Energy certain expressed quarter and have Investor Company The information, XX, on on the non-GAAP to undue the measures Enphase on found used for uncertainties, the been financial changes basis call be noted annual in on report the the SEC provided in its XXXX. reconciliation to with to can ended SEC this exclude the is release forward-looking December new statements file which on please which year of Company's report result its for measures Form on XX, XXXX, today,

like I'd Badri introduce President Executive of to Chief Officer Now Kothandaraman, Enphase Energy. and Badri?

Badrinarayanan Kothandaraman

million, percentage for achieved fourth and reported thanks margin and afternoon, joining We financial discuss had XXXX results. flow a a revenue Good the of strong to free of revenue million. as approximately shipped This quarter XX% $XXX.X We fourth quarter. X.X XX%, XX% today of operating approximately million gross our a and non-GAAP generated good XX.X% quarter income, XX%, $XX.X all margin, We basis. XX% microinverters, exited gross XX%. expense operating us cash at on non-GAAP means, of

finances our financial will call. reminder, Eric into is XX%. XX%, in greater XX%, a As the details our about model baseline later go

we servicing how discuss now customers. Let's are

and India homeowners. in personnel worldwide installers working four experience locations, Europe, are U.S., home Australia and supporting while customer Our all still the from

Our XX% QX was XX% compared Score to QX, in Net Net America compared Promoter Promoter Score QX. and our to XX% North worldwide XX% in was

in storage QX than fielded more systems. relating wait as installers onboarded call average we our and minutes new increased Our time to call more five to

the about homeowners increased improved bring wait under are system, working system this features. our commission and times system, back the are Enphase of ramp to as learning them also minute. a volumes -- are happy not installers the has to our increase in We call are about Storage to The and learning how

manufacturing. now Let's about talk

I'm had to in operations out. XXXX When the we manufacturing pandemic back and production the two the in producing to ramp times The was QX. played QX QX. cut Mexico more in level in million as with flexing manufacturing than in target quickly met and began, then up team units QX. than the more pleased demand factory X ramp a very did Our of surge of great that meet job in QX our QX of XXXX our

As strategy and our in began during free started QX. Salcomp, chain customers locations to production supply shipping at and microinverter of globally, to production to part XXXX cost-competitive of diversify India tariff we October

production quarterly in million add a India high and X.X we well We expect the produce very in QX. units the space The line have line production with art quality ramp second with approximately a automated state capacity going of is same and to capacity. a to of microinverters the XXX,XXX

past seen semiconductor supply on-board chain. have the a our microinverter same the over installers. to time, we uptick as economic stressed several in systems for continue strong broad activity We global increase new the At months, has demand the in

working of this manageable constraints put the components a high of than situation constraints availability along a second seeing to are existing which into the we AC voltage as early very XXXX, We should are XXXX. supply XXXX. experienced semiconductor the shortage late perspective, more used the quarter easing constraints the in help few for new in our increase FET into To we we see on suppliers components our with coupled the hard microinverters, qualifying, suppliers a have us,

delivering first will cell our and supplier planned, began our QX XXXX. capacity ramping of packs In half terms be as throughout in battery of second pack supply, the

of available us the We XXXX. third have hours to megawatt expect in XXX to quarter

suppliers, supply discussions adequate two cell although continuing for with have additional we We with are supplier packs diversification. geographic of

move now Let's on to regions. the

XX% We all XX% distributors during which sell-through nearly from record. The in and was in U.S. was quarter record and for was of growth from sequentially. QX, the QX. a mix increased quite regions The distributors strong and market to installers. saw U.S. Our revenue up also revenue U.S. XX% installers our XX% respectively. was international revenue sequential from sell-through microinverters to QX

QX end remained at slightly to of lower a our inventory the XX the of for channel than range target As result, weeks. microinverters X

through remain to to due levels inventory supply low the channel constraints. these QX of demand end expect strong the semiconductor and at We

megawatt We QX. from Revenue as Annualizing systems with annual our gain an would regions we excited Europe XXXX. record in On the XX% the have and put in revenue recently in of XX% I'm compared the doubling us achieving XX% team's to target continued In entered new close increased sequentially. QX. shipped hours reported of QX more revenue Europe, pleased continue pre-pandemic performance growth markets We for revenue basis, traction. about QX I'm projected XXXX the revenue the very to we increased from in ramping to shipments storage Europe nicely. our region. our

strong be system for in yet continued QX Network the of QX. growing and favorable to built for later another Installer or record market Storage quarterly in our record installer well The In demand our solar. the third results smarter will introducing and driver. results European Enphase Enphase as safer were on fueled we quarter the growth also and Australia, We high-power XXXX, sell-through achieved XA launch EIN as count a adding microinverters as by shift plus IQ towards our of regulations environment our competitive

revenue. In the systems as the Enphase our Storage we introduce record microinverter fourth our storage Puerto well systems. to quarterly Rico America, of market during Australian Latin strength for showed our as expect quarter XXXX. reported for system We

QX. Now that bookings the let's have covered we regions, overall for discuss

for QX. exceeds our guidance for demand significantly range high-end QX of the customer Our

discussed by as constrained the availability are semiconductor We earlier. we component

take is priority hard care top customer working disruption. and our teams to Our of are installers, to minimize our

costs have in We into to customer expedite guidance, in units already number of we hands. QX ensure factored our put maximum

compared XX to megawatt unique We a rollout. shipped cover at in by one hours storage had Enphase Around Let's QX. QX. Storage system our XXX representing QX, storage approximately systems of of installers end XX% commissioned of the least growth

are to earlier installers mistakes them for from and errors. homeowners tremendously learning enduring and our thankful are and We the with

feedback. as of We as have our of to selling, short we internal new attribute for bit the systems. installing made to actively complex expectations very a Overall, this our did and category work our new a this and system, result with on in process commissioning pleased than release updates and product I market much our as product more is we consuming solar-only fall growing interest QX. with as we time are many sales storage although little that shipment a well installers ramping their software

the how to know installs. strength best-in-class system responsibility microinverter being the the naturally they installer of demand both a plus best. a to has of storage installers tail solar default that good Enphase long ease experience so doing With service for solar-only systems prioritizing ensure business and therefore into

announcements we continued addition shipment agreement storage announced Sunnova, large Solar. to steady installers, XXXX. a Solar and Momentum volumes in installers. in We the provide of into Optimum number long confidence are working tail In recently with a ramp These with

Coming commissioning for in are top a reduce labor similar times to at -- on facing storage of nicely We despite the commissioning back more expect to With solar constraints, process shipment incentivize negative industry them tail just as installers helps help profit major installs. commissioning should than to our and and our sub-XX only. long and sell storage solar improved predictable QX. installation the made once the storage crew scheduling They This installers. times seasonality plus them hours. to helps should on to in QX modifications have again to we grow rate QX priority each installers be storage focusing the help

possibility features upgrade Enphase storage generator are new to our are owners out a lot more overload. additional through resilience coming compatibility We more approximately compatible systems MXXX announced in MXXX the working with we Storage power and Let's our now make provides and systems. control control, Enphase with to talk We're based XXX% about load of include with. Enphase These products additional the existing power. that U.S. a XXX,XXX also that expanded it The solar compatibility, achieving on energy system program. system recently

expect features We release these to shortly.

down generators cover switch one install. a when the ATS, system. either our not can certain app. level. necessary the behavior driving add configure a Enphase me the an can transfer simplifying to system the automatic system, Homeowners can the generator Let charges or their battery by fails cost quickly on Enphase when is grid and their thereby from them below generator generator's With turn The Homeowners immediately one.

blackout is on is next turn in a called the customer significant and a the PCS, more software is when dollars at up, The experience. based not not providing to software output will power or state a automatically grid add when of main charge homeowner's of off a homeowner an the is an solved its if last up with ensures does regulate function storage does the expensive. is that of of good capability way grid This behavior app. and such loads which increase during on amount by load pool system system to a a the feature avoids in as an current which identify expensive control to a is the Next problem Power both this connecting critical Motor reconfigure solve called intelligent feature, a start the control it, pumps of One to this non-critical able and as wants He the not can pump which load can will system hardware homeowner Enphase new load met up to is oversize center manner, overload. she need he the center. throw a four can load main control. XXX% have home. then to and problem system load via feature solar The or to be during one homeowner Enphase system. the them based With This storage. which such The -- well fails home the We important blackout Start. the to thereby power outage, battery. ACs the upgrade our to

duration we in of value. inverters start have maximize their Storage with does and to not motors that blackout. to homeowner size increased short optimize power in this his our for up addition, the capability system the Enphase the system home to supply ensuring feature micro will An rated order In XXX% help

without X alpha Next, on our we microinverter. already with solar and have We Enphase sites. grid various systems progress storage IQ X running at are IQ independent making

installations complete shipping begin We expect beta and expect in to production QX. to

residential service, Our digital a IQ commissioning, owner. capture provide solution on the to small to XD to proposal permit provide sophisticated microinverter a microinverter comprehensive management. tools we complete is system system a performance solution, Similar commercial for includes expect solution the design tracking and The Watts XXX that the AC platform making journey installer to and based platform development and software, entire fleet and maintenance, the and will progress. package of activation operations similar

shipping start production and We installations QX. begun expect in have here alpha to

Let me next talk previously Box. station to referred in portable power about our Ensemble as a

energy homeowners who X.X good such provide product. will up via yet system. for to are a plan provide for be of outage. refrigerators view here, and It this solar but first full behind cloud peak devices, in is the X.X to a in kilowatts on of the kilowatts consumer will invest during We storage as continuous hours The Enphase energy support a doors basic as hours little It go, have our keep forward. going will product security We outdoors. will storage, go you not connected as ready home's mobile an a and few X.X kilowatt power. on bit This appliances the as lights, or a are It well product starter when controlled app.

of XXXX. We this quarter product expect to fourth the during release

digital two acquisition I'm now about our recent Let's announcements. transformation. cover excited

one for use proposal Sofdesk solar roofing Sofdesk. is Montreal, Headquartered design software and first The in by companies. and provide

proposed second and design is the the Based Noida, plan services solar sets and business permit installers. rapid business DIN The the to acquisition announcement proposal Engineering. drawings effective India of cost in provides of

the digital homeowners. platform. process soft the enhanced significant acquisition to to simplify and will by providing By of reducing such These acquisitions cost capabilities add tools sales the and expect close QX. end to an aim for to providing We our services we this experience buying while installers, two

aspects to of platform. Turning digital the other our

and forward and a homeowner or We selective launched Europe on to EIN have our during look focused America and quality Australia installers launching QX in in EIN onboarded next. We North installation to XXX through in Enphase experience. our Installer process now EIN Network, highly India

platform sales and variety process make installers digital tools can to EIN Our enjoy of a services and installation and the easier. Enphase's faster on

In improved to systems Officer, enable addition, System highly tool storage We interactive provide Installers as products his we With over growth full experience. brands our and accurate sizing to an worldwide are Her can CMO, I a to and and strength demand, in leading some this as our Estimator our of various Enphase the Enphase tool to home digital recently the home ramp recognized global Marketing Chief announced transformation appliances. have electrification at look we consumer upcoming energy modified leverage has homeowner of joined world's Eric? Enphase accelerate transition as key we are that Allison In about of Johnson with experience the efforts. is finances. our the in the of will our establish leader performance, happy independence. excited product we our our our hand storage new of call that, for review to systems, Eric summary,

Eric Branderiz

XXXX good results XXXX. and quarter details as first of everyone. more fourth Badri, well our quarter I to business will related afternoon, for outlook Thanks, of financial provide our the as

non-GAAP the today, to We in of in these have release provided GAAP posted found reconciliation earnings of be measures website. our can IR financial our also section which

the of during systems in QX megawatt-hours revenue did for significant shipped revenue and XX% QX XXXX sequentially XX very XXXX. include our was harbor equivalent which from megawatt-hours microinverter of and revenue for we storage pleased increased approximately QX $XXX.X shipments demand not systems the microinverters pandemic. increase DC is quarter. Total in the million any XX XXXX to are XXX of power. megawatt-hours in XX.X the with safe Total We despite megawatts The

of them accrued shipments. refunds some size the met approximately an million requested approved our of plus criteria, discussed, which on $XX to interest certain previously XXX As and for totaling were $XX we microinverter been in refunds weight respective tariffs We cost qualifying the a units of million was Section exclusion associated interest accounted were were approved in they recorded accrued quarters other QX the reduction as approved and for sold QX XXXX. million XXXX goods This expenses. where have in of in and $XX prior

acquisition-related margin for XXXX, financial refunds, to sequential GAAP engineering, excluded more have expenses related compared constraint. to $XX.X increase from cost XXXX. operating expect We cost decline for annual per for GAAP per XXXX. XXXX of diluted XXXX. $XX.X QX QX for due of $XXX,XXX in to $X.XX non-GAAP $XX income expenses net $X.XX million We XX% for primarily to to Non-GAAP net of compare million and million. of accurate was $XX.X XXXX assets. million business per from compared basis, was -- Non-GAAP approved for QX experience due operations present earnings expenses operating XXXX. QX a and refunds compared for QX supply QX our million operations XXXX non-GAAP income QX to for cost $XX.X to QX compared XXXX innovation. to $XX.X from share was million of income million basis, compared for are report The an QX a logistics $XX XXXX. compared QX to was operating of basis, component for in XXXX. was $XX.X QX share GAAP to million share for trust expenses GAAP the compared XXXX and XX tariff further XXXX. stock-based On quarter, for gross compared XX% expenses per XXXX performance. XXXX non-GAAP ongoing logistics XX.X% tariff income $XX.X gross a compensation diluted income earnings amortization million to were on XXXX. pleased $XXX.X were QX XXXX. for of of intangible This share hiring for margin On of for XXXX. QX the higher in QX was to to sequential resulted including net million QX million for $X.XX for basis, acquired GAAP excluded earnings XXXX. QX QX to million during diluted QX million for for $X.XX QX $XX.X XXXX $XX.X the The GAAP compared a mainly -- net non-GAAP million focused was refunds $XX.X we On $X.XX and XXXX income don't shipping for $X.X record On any which employees results million picture QX was GAAP was $XX.X

the of turning at of $XX.X compared was Inventory XXXX. $XX.X increase working anticipation The sequential sheet in was end end materials Storage balance production -- in XXXX. the QX Enphase for million planned of by front. the increase systems and Now the to QX million of ramp the the at driven XXXX raw $XX. capital inventory in to our

Although the in days, value compared decreased inventory outstanding This in of QX. sequential days XX of days dollar by increased volumes decrease QX. in to the sequentially, shipment higher XX days inventory was of driven inventory to

Our share in quarter due a were XX with to share We customers. remain capital compared we our at $XXX.X million QX what repurchases working of increase The XXXX. exited $XXX.X end management QX receivables XXXX. cycle. for collection was not days days XX the efficient committed is DSO nominally cash million XXXX higher due QX. down prior in of target always did and for revenue XXXX full We end QX cash conversion $XXX.X our any slightly make compared $XXX.X to to sequential We authorization. and million, at driving the against to management. to repurchase do $XXX days our balance of QX Accounts million decreased XX will right is million of the from

to of issuance $XX.X vesting tax XXX,XXX million withhold QX. spent employee cover approximately the in on that shares we prevented transactions However, on stock

QX, of of QX, transactions the $XX.X to average the million year per issuance share cover price also money of $XX.X at price. convertible of the the deep For million million partial additional spent of have XXXX, conversion prevented million on In notes notes repurchase XXXX. withhold Since approximately calendar we we shares. we and X.X an $XX.X received to commercial on due compared request spent the $XX as the are the end in

flow. million shares. the the free principal XXXX. will and conversion $XX.X In amount requesting $XX.X from cash QX occur this cash We flow in in and to operations repay Settlement we in expect million amount in of money QX generated cash XXXX, in

expenditure costs, free contract year we our cash mainly $X.X app calendar XXXX, increase, ramp Capital software for million XXX Storage $XX.X generated the with for the -- million capacity our million. Enlighten record of partner. manufacturing production manufacturing second development flow. was for XXXX expenditure For Capital was and Enphase $XXX.X IT QX, enhancements,

quarter Now XXXX. of for discuss let's our outlook the first

range our a quarter We the within $XXX million. to revenue million expect be to $XXX for of

within them which shipping margin customers within ensure XX%, in We and and XX% gross service to be gross stock-based a logistics a and we as guidance be getting XX% possible. to expect compensation to a XX% of GAAP of many units further expenses. includes cost as non-GAAP range margin margin increase gross The our excludes best range to are to

We estimated to expenses a operating million, $XX within expect and compensation to stock-based and approximately total a our million including of million expenses expenses amortization. $XX of GAAP for be range acquisition-related $XX

like to not within business. $XX We would our Design range expect DIN's do guidance. Sofdesk of be a OpEx to non-GAAP Services the All guidance expenses upon Solar acquisition, but operating million. million I include include touch estimates $XX to the

new Business are system. digital operating building investment plan expenses not is The we our in and Design at the maintain we The taking accruals. a to QX to the The product plans and home that a quite increasing same blocks lead QX. innovation and installers. eyes to model Hire to hiring baseline acquisition, reasons. acquisition homeowners Services incentive related consolidation world-class the expenses financial growth support management non-GAAP for operating from development in is revenue. Solar At platform Sofdesk are enable us XX% time, build off our Our energy DIN of to of and plus to best-in-class and bit increase create to two due are

Before mention back couple like to a would I for operator of things. the to questions, turning the call

innovation. to Sustainability of and at proud publish weeks and do are we few what core our at is the we Enphase, clean a continue we enable as we through First, report of energy-independence our inaugural ago. energy ESG team

added proud to dedication the are has now Index will and accomplishment. the S&P to want hard been we line work recently this Enphase questions. and I I Second, of Enphase of for entire added With very the acknowledge team. the has recently that, -- XXX open

Operator

Thank you. first Our comes Sachs. Instructions] from [Operator Lee with Brian question Goldman

line now open. is Your

Brian Lee

guys. sounds is like you're persist here. you and leaving of QX? that's quarter. related some if QX on hit sort bit. little great did gross Is Hey, and questions the of the you into we see? the on it know that Maybe some to to percent given I here that, table Thanks taking more a And a incur? is shortages on the congrats bps, a there could business on for you first dig on additional guidance costs micro kind that side, as demand assuming battery us system, I'm having But micro on on both it had there's some is well. I freight Encharge well give the the sense expected a impact sort into it you supply what can side QX, logistics side of Can of quantify guess the as what than and XXX also to for margins, then as the

Badrinarayanan Kothandaraman

Yeah.

So start go high, and quite it high let high customer quality and is Demand and quite again once is high back attribute experience. me I customer there, demand to with our the microinverters.

goes are in on, that constraints the the high. the is CEOs product, we helping the components two supply with that the high-voltage we micro is already much we that's So have qualifying as components, from our they the quantify more actually guidance as to now. those specific of can. going how is are significantly There FET well the are ASIC that higher and the am said, our more of so name and demand and one FET. other And AC into that drive not to are the is coming of an it constrained There is, they compared semiconductor industry-wide drivers issue are as touch basically, multiple I'm game much high-end companies basically right while expediting the the I direct sources, I as

April. basically early to -- caught We all yeah expect by get by up

this ensure priority is top all to care that of take Our we customers. through of

they running will takes order lines we to and ensure whatever do have So affected. are it that their not in

that's the So microinverter on side.

we about of We of and On then of megawatt-hours we last 'XX, XX about capacity. had will -- have as already side, QX storage that the said capacity megawatt-hours of -- we enough capacity. we have as quarter, will have of XXX we

on Compared third higher than storage happy have We we about about, amount on of shipping capacity side, we megawatt in do more storage did, back again the quarter. side. to QX how with And the pretty third started ramp. expect similar enough reflecting a the or we the once I'm And the quarter, in I do hours QX. did we to XX% QX, compared for to did QX. storage

installed get So one I more come some it. what statistics for Enphase on have you Storage XXX to storage, let system. me flavor least so like plus said, companies a at about that Essentially, a installation install -- installation unique

companies. XXX over unique installation trained have We

them overall we from we in seeing -- of lot installation learnt lot and one what We a We have the homeowners, as personnel. than we've installers well as mainly X,XXX more one. a are by improving trained -- process, are

things a little are bit the doing the more, we -- I although we prepared wish fixing said right achieved problems. think I but by I So remarks, yeah, in these

the installer's and the needs achieve experience are on short-term For all for will to order that seamless. is work, the -- never sure the about. commissioning Ease making installer, of we of compromise is what to care in is that. the all example, our we are time about business taking of Therefore we is commissioning doing hours and us, in it process about all improving sub-XX it time

replacement. panel more So is, installers the often with very rewriting examples storage main and usually struggle on

it of their systems. point pain of solve that. to Ease are learning a are and So installers storage business, the on for doing that's big on infancy the use ease steps to in to we comes -- still other how homeowners working doing when

installer's that gave are so of compared we needed, hope do to And I very industry-wide focus problem, I coming peers storage, and We'll text are long-term. fact the on. schemes actually on-grid is homeowner is financing which transition back to financing summarize, messaging, intelligent storage. not taking that is our right behavior of is go be miss it to of clip, that's design our the takes the industry changes all that. do QX last thing on to we, in kind you that one the it working but means some to similar there And are needs lot QX, responsibility to intelligent again about a take more are on seamless starts is homeowners intelligent some and do seamless the way. while And a sure now do from first an most the is QX. often the place. the in of growing permitting and Once to to And We storage also one to working storage the So miss This bit faster need which seamless, were compared simplify -- the I'm we and their rate QX Very that for people the flavor, notification, that care a also us do course, from -- to be control, little needs I'm to of it which on. educate storage, in needs is Enphase business. Enphase in XX% innovative many if the to whatever accelerating people I more overall. load doing going nice to at to property off-grid change and and of are power ease is

making our focus. care system take our installers, of easiest will storage that's training to install, We our and

Brian Lee

of I on I if upon of the super Badri, numbers, back and color. did question had that will into million Encharge touched million -- in Thanks revenue QX, that's Maybe this. seems second But you $XX it the well helpful of then batteries kind just some the plus like guidance. maybe million, $XX and in you a $XX range be based into QX on

the solar the is, those as I with and side, new then not And what question a right your there on question it's to shipments change of the sort necessary up to is So not assume is used near-term? are you're no revenue to are given keeping rates know on just and the product in ranges are -- on capacity. as first second swift batteries installation fair pricing

XXX hours When the shippable in you so maybe surge really of you're megawatt get to shipments kind lining XX% think guys. XX, do Thanks up have to You've of kind talked we'd you capacity megawatt hours capacity? applicable capacity about QX, closer targeting. place, your by being want with XX

Badrinarayanan Kothandaraman

revenue right. is the for ballpark Your

one is, I gain. second long-term The a it's I what mean like said,

we business for we once of doing installers, ramp. ease expect the So the fix to

as progress and X the As are tail making significant well with you the X see, long Tier as installers we installers. both

going You saw releases, will forward. the lot of you all a see more press

So clip. we grow to continue at a nice

to need You are third can the talking already we to do math. that supplier grow and might XX%, continue at will we soon a those in we people. this If happen XXXX,

Brian Lee

guys. All pass I'll right, thanks it on.

Operator

Thank you.

comes Our Moses Barclays. with next question from Sutton

line Your is open. now

Moses Sutton

Hi, thanks for the taking congrats quarter. our on questions and

what you the X X? might IQ expect X still? or So you X shipping IQ start IQ out What's X about might time, a versus shifting of the that premium? the in be on toward installers IQ -- we versus jury on you'll question is XQ. standalone should more pricing over majority And IQ say range How think

Badrinarayanan Kothandaraman

I With will now, we're pricing regarding X adopt a microinverter going system. yes. the think we to over right IQ it's no-brainer, is independent about willing IQ are people to few a X, within answer X is be very It's Yeah, -- talk of exact to a to not months going market, grid whether going so IQ but the happen are we mean, that soon.

So released. system with smaller promoting adoption lot obviously are with of prefer might X and a to we I is combinations a when the IQ buy will in IQ of expect the people X. And high And be out be some cases storage therefore, it to there it. heck

Moses Sutton

Great.

forward. or need How U.S. to be Looking of of installers you installers the gave Encharge? trained system. already percent the still in using training much What your trained on left number I process? products know U.S. now [indiscernible] is

Badrinarayanan Kothandaraman

we thousand a reported in usually XXX U.S. fast. numbers, That up with couple the unique work of I on very those installation we installers are of and companies. numbers we number catching Look, mean,

couple So basically expect that we within quarters everyone to of train matters. a

Moses Sutton

-- back from on What's the the it. revenue you maybe these for got even jump if in possible? gross me that bolt-on annualized And just it, and queue. M&As recent Got and I'll more contribution two profit, one

Badrinarayanan Kothandaraman

now. break numbers to out going right not those We're

Moses Sutton

you. Got Thank Understood. it.

Operator

you. Thank

Strouse next comes Our from Morgan. question J.P. Mark with

line Your open. now is

Mark Strouse

Yeah, our good for taking much very evening. Thank you questions.

is your in to some included if forward, ITC stand-alone storage retrofit of in if So to what environment knows the kind has since then you at changed, who of since but think that follow-up a was do talk going about would looking be the macro Enphase? how is to a changed what's quite -- a you going energy impact just bit future Specifically XQ And call. Can all have revision ITC, customer your Thanks. extended? kind conversations activity. for that happen for

Raghu Belur

hi, happened Obviously, extension. this that's is very was Clearly Raghu. us. the change is ITC the thing in positive that something Yeah, for administration first

numbers harbor As see have no them. in you a our safe result, all

With interesting around that architecture a And it right to on standalone is nice our a means the that itself probably are regards system. that very took being was we worked now, the fact to in the lends -- very is Congress that So are really standalone are change a place. well bills is that about thing storage. AC significant one that coupled the that one some

but the resiliency storage well as participate as services. substantial well that the as in in combination providing the grid So both for as providing value-added the One participating in services terms plus as to example. participating in device interconnect such value even well terms add microgrid extend a our thinking we of plus a resiliency in also safety as of -- standalone device, someday power both can outage portable of services now in an of value-added could station, event your into homeowner

So we are that now. really are discussions about on storage excited standalone right the going

Mark Strouse

Okay.

Eric Branderiz

ITC, potentially homeowners, think terms a idea cash the financing. it Badri -- I extended and the is payments that mentioned into that very refund, even mean about appealing, Because be think ITC that storage, a could of right. I In they look at

ramp the of watt right. adoption as on All per can cost create we cost and cost to hour that accelerated, reducing and things help down, per keeps kilowatt going keeps those and

those welcome things. we So

Mark Strouse

question your anyway profile? thank in that, kind acquisition Okay, with to then customers? particular. to create just an margin there -- of stickier these on follow-up relationship corporate Sofdesk with for Is your is target the rationale well Or financial I kind a of would financially standalone meet Moses's you. idea mean And in they as acquisitions

Badrinarayanan Kothandaraman

Yeah.

we make installers, that's to want platform, them We it to to it our tail a permitting our So, -- product, software, got buy would our easy lot do we business them like like -- our more stay give right. our services to Therefore, buy you love on want them. buy long for we'd give coming. and to we them

Mark Strouse

thank very you much. Okay,

Eric Branderiz

In at own those terms transactions and look financially, we of stand feet. their they on

there. So is rest that that assured

Mark Strouse

Got it, thank you.

Operator

you. Thank

Our of with next question comes from Li Bank Aric America.

line Your open. now is

Aric Li

Hey, guys. Congrats quarter. the on

trend Just quick question industry... revenue the a storage for on storage across [indiscernible]

Eric Branderiz

Aric you got a really bad connection there.

Aric Li

better me hear now? you Can

Badrinarayanan Kothandaraman

We cannot hear you well.

Aric Li

me Can you better hear now?

Eric Branderiz

Yeah.

Just keep up top. it

Badrinarayanan Kothandaraman

Slightly better.

Aric Li

Okay.

on storage. First

any existing amount third would your discussions your to follow-up beyond there color to the And ongoing supply of right provide with there? a industry expect you after the And is now, the expand capacity across supplier two question suppliers? supplier you With about talk can that. you around constraints storage near-term can

Badrinarayanan Kothandaraman

now have suppliers. two right Yeah, we so qualified Okay.

The first one ramped we with. well have already

to one just The the of a two supplier, we to usually then in in are said months And we go in we suppliers. supply it qualify passed, suppliers X maybe multiple basically the XX already that ramping, from that megawatt talking fourth into that expect short quarter a quarter. of process XXX QX, to hours. to we And these to started QX product. of megawatt anywhere XX XXXX, are that up by between time us the meaning they to 'XX, shipping get is we us we the supply if find hours. rather the third had we second In takes And

starting those We are discussions right now.

Aric Li

clarify, just more And supplier to are going a you this to or that saying still year it. would on third Got into you to contribute XXXX? expect that's bring

Badrinarayanan Kothandaraman

a have we if it. supplier will third need ready We

So starting yes, we activities, that's are correct. those

Aric Li

currently updates where IQ X, any just then And this in you. that R&D is time? are provide you. phase? it there? color on provide can you If the on you thank of any Thank at development still testing the cycle, or Is stands Okay, developed being it can there

Badrinarayanan Kothandaraman

a at I widespread, can on smaller. my can I I GaN becoming IQ process transformers, a One because is at more run is, like to areas. producing it actually basically are our AC becoming X. innovation. can I are transistors In are And how power the reduce silicon, the Because devices that the some GaN, the X the to can we smaller, time. Yeah, sizes see now lot focused entire GaN FET a are IQ frequency, on of can a GaN higher XXX we'd transformer get frequency. sizes. higher widespread. now AC transformer advantage XX The lot GaN footprint ECAPS, working run volt semiconductor at on obviously than vision this cheaper, gives is on they faster, IQ few my Right through reduce my a we reduce FETs footprint

Of and about sophisticated prototype looking be take substantially well. etc. DC able semiconductor course, also as we we reliability, to I need to that -- I XX themes, those meaning of next-generation a to next number today expect demonstrate drivers the have all Alternatives will vehicles to that less with of those packaging porting our FETs, months. GaN, XX may to working and speaking as We'll me maybe is both we And of well at to this well qualifying between and et cetera. AC our -- cooling components alternatives to theoretically collapse as lot as on be to FETs, and be so think components. we there. have gate our Using the

name We more a than lot We're going our CTO an is Hans, on. R&D discussions those a Whenever of is that Eric have started investment year-ago, So And is his means he guy. of before. all investing actually says lot our CTO mean team he -- Branderiz is there behind team. CFO hired innovation, he outstanding and in it. the a we

Aric Li

long talk it any pass is I'll installers tail training can question and you Could points last on And you going? traction progress here. How with data one us that or on it. process Got Europe? give in about the just

Badrinarayanan Kothandaraman

story. a -- actually installers mean, I tail Europe Long is great

Day, we that more, I And the salespeople now folks. in we I even have, sales would XXXX or the five in Analyst remember increased, Europe. you that maybe time had If quadrupled reported only of say, number had at

France. great That ramping team have Netherlands, in Belgium, in is We team a there. in

opened Poland, offices up recently have We Spain. in

where installers are We there. more and onboard effort training installers We've and we and in the a launched Germany, in more getting of massive also of sales more and there. have lot SAE teams process

into also in We third solution the Europe storage quarter. our introduce will

it's the XX% know, is a attach market, of with -- tariffs Germany you big X feed-in PV it's so rate gigawatt being As because of small.

said we're it's but clear bunch -- market a a we So say and it's that that, of having are almost. about very will market, There have significant excited suppliers, sure differentiation. supporting experience making matured but that in long take we'll installers, our time tail of us quality, on a the with focus customer I'm region. bit little relentless It progress start of

Aric Li

you. Thank

Operator

Thank you.

Our next with Rusch from question Colin Oppenheimer. comes

open. is now line Your

Colin Rusch

that IQ commercial And making progress XD? pre-selling the right you've in market got going give Can Thanks in a so of you now? you're the sense guys. activity us the much, the

Badrinarayanan Kothandaraman

Yeah.

we commercial So about clearly, segment. as XD brings value IQ lot talked of into the

We're itself. fleet everything and system we two a and it's a one, one -- permitting inverted Just to itself things, connects second services leverage end-to-end at design is, a etc. along as panels we very sophisticated the has power remind -- O&M management, with come this that into -- our with looking the -- as proposal package, and everybody platform, it device. tracking the device And higher thing it looking XX% got two solution stand-alone as the at complete just digital are want to a from it the performance design density IQ XX XD to not services

bringing to set solution at complete So a we're the market. looking

right We installs are have in alpha alpha now, happening. we

process X as the are improvement we IQ to with it's a simpler. We We IQ X installation much but commercial IQ from -- commercials doing doing small the small are well, -- is significant were XD.

and come of there, to report progress. more more will progress lot make we So as we

Colin Rusch

solar. just in the thinking the terms then about And integration generators of of storage Great. and with

the anyone capability guys a you the and you sort formation competitive has of you think landscape, that else can to functionality how for long take before out similar you the at it have look grid speak As in the will differentiation marketplace?

Badrinarayanan Kothandaraman

your yeah, generator right. is So, the question,

think generator the low is to I a So integration unique us.

with interconnect We a what that transfers are have need device is generator the switch, -- we typically you automatic so because require or of which instance, smart microgrid for don't switch, we integration. an

So that function us. is effectively done in software for

system the simply by There just generator connecting So entire energy the managed the the management that is now by into the managed advantages. a system. device, of few act by other and are device

As into everything is a integrate the result storage the in of the parallel way we AC system. now run the domain to can that generator

when on system the as homeowner turn of the instantly grid on as, automatically grid that up a state is make off as example, instantly, can and generator a configure turn level. level the system charge state fails, such fails for it the what reached generator then decisions you turns the their example, when when soon fails. has will grid and Or on only -- certain for the at is, turn at charge of another back the turn -- So a on means once

a functionality is for Another there example quiet right. period,

during all it of this you reduce configure in all generators pollution. You up can software, so can configure it noise that you start up time can don't night, the saying,

rich experience. very a it's So

get You exactly to power app. is how on flow your in the see can real-time

our much, platform. into solution integrating common So generator more a with one-stop-shop well-integrated much

Colin Rusch

much, Thanks so guys. right. All

Badrinarayanan Kothandaraman

Thank you.

Operator

you. Thank

comes Shen Partners. Our with Philip Capital next ROTH from question

now Your line open. is

Philip Shen

Hi, you is second add results. question everyone, the strong My on in on might first you the India. congrats line think when

need line? So demand, up have ramp to is and see? not And given why in you to do how decision low you made the already the second channel inventory not, overwhelming else what the if

Badrinarayanan Kothandaraman

microinverter remind No, have a capacity. line. add to million a To half second have already the we everybody, made we decision

sources. another Basically, line, We have another to in months are million about take which interim meantime, we six -- board, a to adding the that going have is will microinverters. We invest half in come on

there in reached come see is, microinverters China, necessity a IQ going Then a see lot Guard to more lot We Because have to capacity. to quarters, with Guard. to going we million in be which one a order X increase two Fuyong in us our create soon for we very do just are what as capacity. in and we the we our we capacity to of -- have Guard plant. well investing is have

We be working it. on are going to

Philip Shen

Okay. Thanks, Badri.

maybe line you come year, China, capacity, in what in run is India, the add online, the the by rate at, expect Mexico, all to quarterly the and QX? you the second maybe when you we're So fully, up end of if do think India

Badrinarayanan Kothandaraman

capacity India I purely specific this say would question, between the a million say, not is for. about year, end about by would X units the months. is for on overall I capacity On we'll is what your and prepared Well, the per of demand, and so six be million this number -- I X quarter

Philip Shen

think even do ends it there. be the your And weren't disappointed by What's the you reasonable on Okay, you'd to by of quarter view great. if talked mix, and international, think last the mix as getting about perhaps latest on what the would and and being this you of be to then relates year, end that international up year? I U.S. XX%-XX% end you

Badrinarayanan Kothandaraman

systems, which the entirely curve by storage a We it are threw Right. shipping ball U.S. in

the international Now storage systems. -- we to ship system have

we'll In addition the solar to doing ramping be exactly on systems, that.

of by see tough. as may year, a the of year next end possibility. maybe So I be it middle definitely, this But XX%-XX%

Philip Shen

on. pass Badri. it great. I'll Okay, Thanks,

Operator

Thank you.

Craig question Our from next comes Eric Hallum. with Stine

Your is open. now line

Eric Stine

your $X a front? billion. mean the just on might this just that Maybe and on -- made make about any business on areas there growth? the mean I your everyone. And Hi, acquisition from pushing seem development like sticking acquisitions they're that flow, know cash soon given the be few or balance Any perspective sense will capital more strategic are more product you've small on free in is areas side. or really with just allocation, I I strong cash organic

Eric Branderiz

The that have. our is framework that cash growth we challenge we organic critical. be to going are both way also more mean, with because generate I

is approach going active. be So the acquisition to very

them is have also acquisitions, lot both pipeline of own right targets. We of to M&A we to around our our digital Adam, and of find Badri of working rules the the in things a the need candidates healthy, need we very that Actually Raghu his With clock. complement are or platform. -- set has pipeline which

that's very throughout see should year. we to be -- a So, more area, the going so you active

Eric Stine

platform, Eric, but guess okay. I not, the other Yeah, you Any think potential details geographies on thinking mean may just take. I that but on, about you or mean pass it's anything, maybe any details whether new areas mentioned you -- I digital

Raghu Belur

business, I going continue we is we how view for have our right. what -- so internally Yeah, on clear strategy our very a have we're think to long-term growing

transacting where micro-grid and microgrids being about talking are we've and We interconnecting talked about -- this in think then the home pools we about every microgrids as a homes significant and going the etc. forming of about talk We electrified, happen, are all of appliances EV getting between which electrification electrification to the further them. across the increase energy demand that will in past,

to how we we -- order product plans. in at, a context So It's specifics, healthy -- -- our our meet that but we what mentioned, have we an had, digital that looking while you piece we can't are about should vision. as pipeline of we are transformation as area provide with thinking Eric the strategic some a our have both M&A you well have digital about as give

Eric Branderiz

within And space, there on are confines no the companies right.

now areas. So is into that other we sectors, expanding thinking are software and other

pipeline diversified very, sources, multiple a right. very it's So from

Raghu Belur

And international it's as well.

in So of two we U.S., world, of saying, across the neither the the done, as are -- two he's just looking but we actually are those acquisitions have the yeah.

Eric Branderiz

acquisitions of the and company ability going important. is to to is one the absorb other very the integrate those And be

to Jeff used I it acquisitions the So integration in be very so are a McNeil's organization, with organization, active finance confident will XXXX. very on deal place feel in we

Eric Stine

Maybe Yeah, one last me. from helpful. just no, very that's

it how before updating XX%,XX% took the any many XX%, on officially new XX%, thoughts long the to you're that? I see on the at operating XX%, from to to I XX%, I'm mean, to XX%, thoughts mean go quarters for model. you'd now you sustained XX%, think that XX%, how like you update target trying Just

Eric Branderiz

existing in mid-short term. time, But manufacturing the guiding with is higher continue slide CapEx launching are we that company, long-term, -- -- a control that you're plans, frame framework conservatively the mean new to provide the got business make framework. When want this on with what I year, but we happen. CapEx that's sure you the call manufacturing entering we thing and can other products short-term, right. an new the baseline are And be and the right. we the Yeah, the We we the markets, is did, think we've in a and cash going is model don't have that at the are same responsible things OpEx the of lot when our the to of you current guidance that's quarter I of generating. right framework, planning for In the long-term, midpoint approach. operating short Remember, the to

Analyst can if when until framework do you this there an to an afford So like stay should that is update. update Day, get we

Eric Stine

Okay, thank you.

Operator

Thank you.

Company. Ricchiuti Jim & from comes question Needham with next Our

now is open. line Your

James Ricchiuti

changing year you. know market given wondering days but so? pricing of trending view thank in government -- of you seeing this initiatives. in a competitive policy I supportive I'm just how potentially guess, the landscape -- how out it's the and you're in terms looking early storage, what I or your the afternoon. wondering might next trends for Good be Hi, more is demand I'm just over

Raghu Belur

have is, I continually pricing comes etc. right. view particularly things the to -- and like around we our it value, our add to when view is think trend,

be storage, that and how storage entire that, or a a it integrate, system just right. a whole not load integration. -- widget that it's as part about has solar, management, integral is means -- complete of an So is thinking generator storage that as includes energy solution battery, does the management an to a it what thing solution includes a

are have where have the saw seen etc. working company, -- announcement the with we we You you fuel cell

that's not and for think So in for think the add the it about it. can it's we do about specific how us widget partners a terms and of solution We we homeowner. value pricing, really complete installer not widgets a how and about our specific

James Ricchiuti

Okay. long year tail respect change And so? or your installers -- we anticipate Fair think X, to installers the over should as is about and with next Tier one mix any storage enough. Tier the we X

Raghu Belur

No.

Badrinarayanan Kothandaraman

right. we I today have think what is

James Ricchiuti

very Thanks much. Okay.

Raghu Belur

Thank you.

Operator

you. Thank

Mandloi Maheep Suisse. from Credit comes with question next Our

open. now is line Your

Maheep Mandloi

for taking question's Hi, questions. maybe you. thanks the for this Badri,

for say so solution, the Encharge you well, On in to products as applicable just be installers. storage delays with you which seems -- more time did other impacting seeing wanted are understand you specific by also other that competitors or product as some is taking those competitors, installation the That market to the there's it's to something to your in that is if delays? launched there your to train

Badrinarayanan Kothandaraman

storage on installers. not but I'm them our Right job of going storage is so once, installs that they you done tail in competitors, take can this can product to we expect. start other train Many we have have the not doing comment but as a long of them -- supporting And even demand pride to may in our lot July. seamlessly. now, introduced they our

December, long major tail As of installation plus installed Enphase of win unique XXX the that's system, installers, end one have for a Storage companies us.

XX to week, XX to installers add every continue We there.

over on. there, focused installers win, will up there thousands better and game are I'm because We have a companies That's trained be installation we XXX our can can job sure I'm we amp again. but which a also sure plus unique there, do we of

over to the roughly got least train, we trained terms people, have at X,XXX people every In installer two has folks. of assuming

a on have do unique things would -- it's we model. tail. -- I long the say So business We we focus

installation is Our we And going take it's that's away we're make long-term the that will do, what to smooth there. not seamless, a job game. and to ball off

Maheep Mandloi

cost? Thanks in maybe soft just and that Could I the new about acquisitions per customer of you. solar in on the the couple developers explanation. of the Got have costs. $X,XXX goal talk the you reducing for And think digital soft about terms like strategy. what's $X,XXX, here talked

quick down idea to what's process a it the is So is to or after probably as of And well. kind that have bring follow-up similar and here what in like cost thinking soft here? just the Australia, Europe your Thanks.

Raghu Belur

Yeah.

our So, our with installers best the goal our provide soft possible. partners service outcome to goal cost is what an is, of is

And our so as the it's well actually, partners as homeowner.

detailed way etc. a the both permission well So all we have leads our the installation as commissioning, with starting commissioning, mapped out as very to design entire the process journey installers of for homeowners, procurement, both permitting, installation as how O&M, proposal, operate through well

are acquisitions we're these And important a powerful so do that elements amazing where create if is with bringing that in very I on the the clear we be journey, soft to and that installer that about partners. talking is great value we long-tail natural very reduction outcome about cost. job focus we of starting going this think then for a platform are that an our of But

Eric Branderiz

talking streamlining, and counties, the reduce or focus things And hardware, the are you're into locations. the different you has takes part reduce cost approaches, quite When different back which of the of multiple here panel, the about this example are multiple different simplifying the for timing, that of value is industry for Maheep time. cost permitting, it everybody tangible. long there a easiest a of thinking about, So the chain, easy been

right. incorporates all which O&M and tackling that said And problem. are the are the post that's we as complex And the by many acquisitions Raghu more pretty to much commission point basically lead-gen of the understanding tackle much a those problem problem digitizing the it, tackling. is that from standard So and that, fill these and solving aspect that problem And view we individual in we fronts, right, way gaps. through are of every process

Raghu Belur

Yeah.

Maheep Mandloi

housekeeping. that's And Got it. No, just helpful. then just last one,

that microinverters shipped storage the for the include quarter, or in product just solar megawatts the So that's does the shipped well, as to shipments?

Raghu Belur

on to get We that. back will have you to

have only and that to I on that. think But to is, includes basically you it answer will back solar get include now, my inside the batteries. the are does right the off-the-cuff pure not microinverters microinverters we it

Maheep Mandloi

Thanks for right. questions. taking All

Operator

you. Thank

question JMP Securities. with next comes Osha from Joseph Our

Your line is open. now

Joseph Osha

taking for I've got completely questions. my two Thanks question. there. Hi, unrelated

to business, The really in a the We've see then bit your Might of dorms get alluded as AMS little sold the first Badri. management dorms Enbala regards you kind investment of this utilities? offer make you've customers an fully relates to infrastructure capability get we to sort storage out. a software seen your with integrated sold, to go

Raghu Belur

won't we sell. value but that So we single with added see with Clearly, any here's view. talk our storage every obviously specifics, time a general you in that system service

have the we that I of natural or out into how on least storage. I these pretty fit And as in our that's that continue DERs already those So in DERs are are management can to here extension think there. and East programs we it's and called whether participate incorporate programs, platform. California coordination out a number ramp there for number given pretty platform, Coast platforms. are of -- that -- think on are even in existing us ensure step we we coordinated of powerful weather our these onto into people a can what's platforms given our have on is those of There fit first that partnerships that that that will with There we who at

that's for natural think I extension pretty us. a

Joseph Osha

Okay.

And so interesting. that's

have a that? well AutoGrid say, with you making problem somebody sure not would You operate or like that

Badrinarayanan Kothandaraman

if existing programs there do would Absolutely, it. Yes. are we

Joseph Osha

Okay.

Badrinarayanan Kothandaraman

cases fact in -- -- standardized anyway. are There getting in is etc.

Joseph Osha

the question completely of the second unrelated is where the is, way headed? energy then or high mentioned surprised world And or your that kind was about device is FETs, silicon you in MOSFETs interesting hearing this we imagine I didn't bandgap you it's talk carbide, a GaN wide of all can

Badrinarayanan Kothandaraman

our reduce the No, interesting We're on but mention go, on carbide. technologies. GaN, help we GaN mean, They that will footprint, working we to GaN silicon us are companies. is support GaN everything think way GaN want. is the silicon and with -- not surface. I I think I a few only we are did obviously scratching high-power. two

Joseph Osha

to So can that -- guess couple assume the individual silicon next bandgap little obviously, of overtime you're see moment we high-power at we just go I years. wide the expect I Is probably sockets idea? those the over probably reasonably and -- overtime,

Badrinarayanan Kothandaraman

Yeah.

Raghu Belur

Yeah.

Joseph Osha

you All so much. right, thank

Operator

Thank you.

open. question your Wainwright, Our next line is Sameer from Joshi with now HC comes

Sameer Joshi

Thanks Thanks. questions. taking my for

Just digging the a storage. couple, into

question headwinds, it from you sizing change draining in do find going do installations enough, the more And bottlenecks are sort a the not you Encharge products Encharge see any because right. is forward? installers In of versus of terms different? is, the of or of demand it pricing maybe or or customers And you corollary X not -- see is do educated like XX slow a

Badrinarayanan Kothandaraman

through details. like question, I the I even No, Lee's what went told maybe Brian answered I earlier

the within again. site time to the me want a storage. we can place commissioning are and are XX burden install our and is want responsible Enphase. leave that. several to there them we installers things finish to installers, go their hours. excessive, for There to And once squarely come job cover for that they understand wrong on that and on Like things to Basically, installers want they if going are we let on are So some

are rapidly time, that commissioning working We as an with example. them to reduce

have to panel them need The two. often. can three, often is of be that's help storage that several If installers second thousands a dollars. solution, installers. start business main are and to of rewire as the the very installers and one often to we in ease homeowners doing That's create which come these not for Number that, does number they systems, going experience is, calling

to to if going out, -- of your and adjustments in you're you conditioner when three quickly going your grid your air then to your hours on. utility storage from be out, you lifestyle, on-grid haven't out off-grid in made four any switch or run example, external For is grid is is because out is grid

installers -- of people know of power and help they for them. and they So rule lost therefore, off-grid a truck out are run that to not are even storage another have they profit It's that means call do out for go them the them. who installers and

one. off-grid the switch an as for seamlessly make can installers? provide Enphase can load the the lot start cash maturity. getting needs my that installer, lot people the what is to How battle. first saying, Make payments, is set you then can intelligent Enphase to more to automatically not how when your the -- So all so is as So start Enphase I it financing solar even sure -- I easy Enphase's not simple, monthly we in would transparency homeowner, are storage about for yeah, sale and And so eliminate one problems upfront financing seamlessly it with to fight homeowner on there And app that think the in take don't -- Overall that talked entirely control industry, those permitting storage homeowners. mature, control complete that's a cycle overall for comfortable do such that that in cash attain order place then responsibility Enphase system right. turn just consultative all all long. notification industry. for times are things that in will it's provides -- remiss life, system you problems It's our cash industry system happens need it to to to I we AC? are going storage last can being system's acceptable. of be a need if those there, all the to help an complete. they're than and Then with are peers do the -- maximize -- there the And the and designed back is that between upfront. homeowner what is yet more of And too is when to And

that are we'll be those on. So two working problems industry

nice which already Those to a try any -- start lot a we going of to Enphase are on, our much the things are we round order changes ramp in ensure going more -- and to do stuff combo to ramping than industry to in energy put specific it's of that order So need we are now. to influence. we

Sameer Joshi

for Thanks Understood. that.

Eric Branderiz

Enphase. -- are These are the Badri to comments by Sameer. unique So many made not of the

they this or are like so, -- to that are that time, do for get storage then commissioning never And lined now, completed them microinverter this after when it are component an say in microinverter doing hand-to-mouth well with the the product. that, right that, they're everything, installation, takes they might with approaching done great the installation training, product new And really installers before, homeowner initial the training a and crews, with right. we the We we systems, right. everything salvage do and up a and with basically convince they

know time our easy with they will potential pitch. technologies, done So, the they launch right. be believe interest of an completed Xs with that that, Xs we we competitive using switching hard are And decided we they've have Tier in and then Tier with a alternative, long trained, they they from sophisticated, installs our -- that Once they will the have making. our kind because investment that's concurrently, made investment and trade, feel to before. tail, the are products all we they process they know product an our They've system, a to are

those at all are things the being So, same affected time. of

Sameer Joshi

you facing, addressing that encouraging. are you're identified the the Yeah, troubles, have of and teething certainly those. no, that exact sort problems it's actually That's commendable actively

mentioned [ph] outlook not are that support kind of DNI a Am sort -- improving you back-office QX your I included. in some for Just performance the against DNI little was gears wrong? source. at your it revenue-generating a operational switching your that of bit, thought I looking revenues as a

Badrinarayanan Kothandaraman

installers, for to provides you're services Yes, revenue. right. basically permitting not DIN

about, they The how design get hours. the provide permitting our and it we care proposal installers to installers paperwork, the is addition sets that's obvious about services, care tail plan can is because fit permit whole about. Anything In XX -- also again, in for care that what long is us right services. Once we point even more.

Sameer Joshi

several -- Right, And of $XXX have million, there that -- right. had over effort now the these several XXX going last approximately supply And is instances you then constraints. any are upstream? last one, years towards you on sitting

Badrinarayanan Kothandaraman

a No, I such light, of in CapEx massive OpEx be this mean, never this In coming was increase we're case, We're light. out clear. pandemic. expected the going because we demand very to

increase. and Those you should our didn't, such to The well our big customer Now, we high anticipate but -- always product And quality I've target because are mantras. a maybe and have, received. we is DPPM experience. XXX didn't told -- we it's great the obviously is

that, in looking that. going And are past in we way not think But because we as we constrained said in the on severe situations the a and allow we had not and to to adjustments it's mistakes, going somewhat how put That's the the happen. forward no from it's we company so I processes. at right what what having as But there's our need to of are run change we are our to like capital-light approach, business do. approach. this We learn

Sameer Joshi

question. the Thanks for taking

Operator

you. Thank

Our next Susquehanna. question comes from Biju Perincheril with

Your line now is open.

Biju Perincheril

in on can my the rates taking for question. level that early any few trend seeing, rollout what of Thanks the a from you. of see or Obviously, five very to? initial demand years, trends Thank we storage looking you're out product, years attachment but the three -- thoughts

Badrinarayanan Kothandaraman

better so refrained complex attached a it's attached rate. the gave you we than of actually When Because states which you rate, in. megawatt-hours, lot can are a attach you the about we function calculate talking is rate,

be may state. in storage the more popular example, in California other For some than

So the metrics are different.

attach about any So without we cannot why gave megawatt-hours. is talk which context, just we rate you

hours. QX, on about -- growing talked like that's about talk I'd the QX progress what not And I XX%, at rate -- rates, would megawatt-hours. similar clip about, we a So are expect QX megawatt that to are like we to like a to and talk steady what QX attach that's to we making

Biju Perincheril

years we you that lend that low On guidance? or mid-term out sort can when you do of have looking there few megawatt-hours, target a is -- number a just

Badrinarayanan Kothandaraman

us. more for this It's stages It's us is now hard to take give number of now. It'll early for quarters. the us hard product Right a few in brand. a right

Biju Perincheril

Thanks. fair. That's

Operator

at like to remarks. to you. turn now not Kothandaraman showing back Badri call for questions this Thank further time. the I'm closing would any over I

Badrinarayanan Kothandaraman

next of Enphase. joining for support the We quarter. today continued for you you. forward Thank your us you and Thank with speaking again in look to

Operator

for concludes and call. today's conference this Ladies participating. Thank gentlemen, you

may disconnect. You now

Enphase Energy (ENPH) 10 Feb 212020 Q4 Earnings call transcript