Good afternoon, and welcome to the Enphase Energy fourth quarter 2022 financial results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press Star, then one on your telephone keypad. To withdraw your question, please press Star then two. We ask that you please limit yourself to one question and one follow-up. If you have further questions, you may re-enter the question queue. Please note today's event is being recorded. I would now like to turn the conference over to Karen Sagot. Please go ahead. Good afternoon. Thank you for joining us on today's conference call to discuss Enphase Energy's fourth quarter 2022 results. On today's call are Badri Kothandaraman, our President and Chief Executive Officer, Mandy Yang, our Chief Financial Officer, and Raghu Belur, our Chief Products Officer. After the market closed today, Enphase issued a press release announcing the results for its fourth quarter ended December 31st, 2022. During this conference call, Enphase management will make forward-looking statements, including, but not limited to, statements related to our expected future financial performance, the capabilities of our technology and products, and the benefits to homeowners and installers, our operations, including manufacturing, customer service, and supply and demand, anticipated growth in existing and new markets, the timing of new product introductions, and regulatory matters. These forward-looking statements involve significant risks and uncertainties, and our actual results and the timing of events could differ materially from these expectations. For a more complete discussion of the risks and uncertainties, please see our most recent Form 10-K and 10-Qs filed with the SEC. We caution you not to place any undue reliance on forward-looking statements and undertake no duty or obligation to update any forward-looking statements as a result of new information, future events, or changes in expectations. Please note that financial measures used on this call are expressed on a non-GAAP basis, unless otherwise noted, and have been adjusted to exclude certain charges. We have provided a reconciliation of these non-GAAP financial measures to GAAP financial measures in our earnings release furnished with the SEC on Form 8-K, which can also be found in the investor relations section of our website. Now I'd like to introduce Badri Kothandaraman, President and Chief Executive Officer of Enphase Energy. Badri. Good afternoon, thank you for joining us today to discuss our fourth quarter 2022 financial results. We had a good quarter. We reported record quarterly revenue of $724.7 million, shipped approximately 4.9 million microinverters and 122 MWh of batteries, and generated free cash flow of $237.3 million. Approximately 55% of our Q4 microinverter shipments were IQ8. We exited the fourth quarter at 44% gross margin, 12% operating expenses, and 32% operating income, all as a percentage of revenue on a non-GAAP basis. Mandy will go into our financials later in the call. Let's now discuss how we are servicing customers. Our Q4 net promoter score worldwide was 71%, compared to 70% in Q3. Our North American net promoter score was 74% compared to 71% in Q3. Our average call wait time was quite down to 1.6 minutes compared to 4.8 minutes in Q3. We staffed our teams well, focused on root cause fixes of customer issues and improved our business processes. Let's talk about microinverter manufacturing. Our overall supply environment remains quite stable in general. There are issues that crop up from time to time. Our teams are staying on top of them. Our quarterly capacity was 5 million microinverters exiting Q4. We are on track to begin manufacturing at Flex Romania starting this quarter, enabling us to service Europe better. This will enable a total quarterly capacity of 6 million microinverters exiting Q1. We are going to increase this capacity even more with U.S. manufacturing. Let's cover that now. As we discussed last quarter, we are pleased that the IRA will help bring back high-tech manufacturing to the U.S. and stimulate the economy through the creation of jobs. We are excited to service the U.S. customers better with local manufacturing. We plan to begin U.S. manufacturing of our microinverters in second quarter of 2023 with a new contract manufacturing partner and in the second half of 2023 with our two existing contract manufacturing partners. We plan to open six manufacturing lines by the end of this year, adding a quarterly capacity of 4.5 million microinverters, bringing our total quarterly capacity to more than 10 million microinverters as we exit 2023. We continue to await the details of IRA implementation from the U.S. Department of the Treasury. Let's cover the regions. Our U.S. and international revenue mix for Q4 was 71% and 29% respectively. In the U.S., our revenue increased 15% sequentially and 59% year-on-year. We had record quarterly revenue, record quarterly sell-through for our microinverters, and record quarterly installer count in the fourth quarter. Our microinverter channel inventory was quite healthy at the end of the fourth quarter, while our storage channel inventory was a little elevated. I'll go into more details about our batteries later in the call. In Europe, our revenue increased 21% sequentially and more than 130% year-on-year, led by strong demand in Netherlands, France, Germany, Belgium, Spain, Portugal, and the U.K. We had record sell-through and record installer count in Q4 as we continued to grow our business. We started shipping our IQ8 microinverters into Netherlands and France in Q4. We are working hard to introduce IQ8 into other European countries shortly. We are currently shipping IQ Batteries into Germany and Belgium. We expect to start shipping IQ Batteries into Austria, France, Netherlands and Spain in the first half of this year. Our GreenCom Networks acquisition, which closed in the fourth quarter, helps to integrate Enphase microinverters and batteries with third-party EV chargers and heat pumps, enabling homeowners to control their devices from one app, which is the Enphase App. We are integrating the GreenCom offering with the Enphase ecosystem and expect to make it available to our European installers shortly. I'll provide some color on Latin America, Australia, and Brazil. In Latin America, our revenue doubled year-over-year. We had steady growth in our solar plus storage business in Puerto Rico during 2022. In Australia, the solar market continued to recover in Q4 after a weak first half of the year. We expect to introduce IQ Battery batteries in Australia along with IQ8 microinverters in the second quarter of 2023. As for Brazil, we experienced significant quarter-over-quarter revenue growth as we saw increased deployment of our IQ7 family of microinverters. The residential solar market in Brazil continues to grow rapidly. We have a very strong team in place, and we are excited about our future growth in the country. The emerging residential markets in Brazil, Mexico, Spain and India are all moving to high wattage panels. In order to service them better, we plan to introduce a high-power 480 W AC microinverter in the second quarter. Let's discuss our overall company outlook for Q1. We expect our Q1 revenue for the company to be within a range of $700 million-$740 million. We are fully booked for Q1 right now. Let me provide some additional information on the key regions. First, about Europe, then about the U.S. Our Europe business is very strong, as I noted. Note that we also doubled our revenue from 2020 to 2021 and more than doubled again from 2021 to 2022. We have a strong team in place and are quite bullish about 2023. We expect to introduce IQ batteries and IQ8 microinverters into many more countries in Europe as we progress through the year. Our value proposition is our differentiated home energy management systems, combined with high quality and great customer experience. As for Q1, we expect healthy growth compared to Q4, consistent with the overall growth in the European market. Let's now cover the U.S. We expect our U.S. business to be slightly down in Q1 compared to Q4, primarily driven by seasonality and the macroeconomic environment. We are seeing that our distributor and installer partners are a little more cautious in booking orders. We normally have a six-month order visibility, that has been somewhat reduced as our partners watch their spending closely. On the sell-through of our microinverters, while December was quite strong for us, we saw more pronounced seasonality in January than normal. There are a couple of interesting observations I thought I will share with you. Even with the pronounced seasonality in sell-through in January, we'd like to point out that our activations are holding up. The second point to also note is that, in conversations with our installers and distributor partners, they have started to see originations pick up in January when compared to December. Although the data we have is limited, these 2 points make us cautiously optimistic about Q2. We have also seen some analyst reports about a possible shift from loans to PPA due to the high prevailing interest rates. We work with thousands of installers every quarter. Our installer base is very diverse. Both small and large installers that offer cash loans and PPA options to homeowners. Any shift from one type of financing to another only has a minor impact to our business, almost negligible. No matter what the conditions are, our approach at Enphase does not change. We manage for the long term. The basic thesis on going solar and storage remains intact, aided by a few factors. First, the utility rates, which are rising in many states across the U.S. Second, the 30% ITC tax credit, which has been extended for 10 years with the IRA. Third, the desire for energy independence and tackling climate change. At Enphase, we will continue to make best-in-class home energy systems with a laser focus on product innovation, quality, and customer experience. Let's switch to talking about batteries. We shipped 122 MWh of IQ batteries in Q4. We have now certified approximately 2,300 installers worldwide since the introduction of IQ batteries into North America, Germany, and Belgium. Our installers in North America experienced a median commissioning time of 91 minutes exiting Q4 compared to 118 minutes in Q3. We made significant software changes to improve communication, grid transitions, and commissioning time, and I'm quite happy with the performance of the team. We saw slightly higher sell-through of our batteries in Q4 versus Q3. We've also got a number of feedback from the installers about the fact of improved performance in terms of commissioning. We plan to ship 100 MWh- 120 MWh of IQ Batteries in Q1. We also expect to start ramping our third-generation IQ Battery in North America and Australia in the second quarter. This battery has got 5 kWh, 2x the power compared to our existing battery, and 30-minute commissioning time, in addition to being easier to install and service. We expect the higher charge discharge rate as well as the 5 kWh modularity to be uniquely beneficial to the homeowners under the upcoming NEM 3.0 tariff in California. With the significant changes we are making to our IQ Battery, we are confident that storage installations will become as efficient as microinverters. As a result, the profitability for installers should get better. We expect our battery business to perform well in the second half of the year, both due to our third-generation battery as well as NEM 3.0 adoption in California. Let's now talk about our product for the small commercial solar market in the U.S. We are on track to pilot the IQ8P product and release it to production in the second half of the year. As our panel power continues to increase rapidly, we are increasing the power of the microinverter by 50% from 320 W to 480 W AC while sticking to the single panel architecture. This product, as well as the 480 W residential microinverter for emerging markets, share the same design. Let's discuss EV chargers. We shipped approximately 7,600 EV chargers in Q4 as compared to 6,370 chargers in Q3. We began manufacturing Enphase-branded EV chargers at our contract manufacturing facility in Mexico this quarter, helping us to increase capacity and reduce costs. We expect to introduce IQ smart EV chargers to customers in the U.S. in the second quarter. These chargers will provide connectivity and control, enabling use cases like green charging and allow homeowners visibility into the operation of their Enphase solar plus storage plus EV charger system through the app. We recently demonstrated our bidirectional EV charger technology combining vehicle-to-home, vehicle-to-grid, and green charging functionality. This new bidirectional EV charger, along with Enphase's solar and battery storage, can all be controlled from the Enphase App, empowering homeowners to make, use, save, and sell their own power. We are working with standards organization, EV manufacturers, and regulators to bring this technology to market in 2024. Let me give you a quick update on our Enphase Installer Network or EIN. We have now onboarded more than 1,300 installers to our EIN worldwide through a highly selective process focused on install quality and exceptional experience to homeowners across the globe. Let's discuss the installer platform. We made several updates to the Solargraf design and proposal software during the fourth quarter, incorporating battery design and proposal, document management, consumption modeling, and several other improvements as requested by our installer partners. In addition, we made significant strides in automating the creation of permit plan sets with Solargraf software. We now have over 1,000 installers using Solargraf software. I'd like to comment on NEM 3.0 in California. The CPUC has finalized its decision on NEM 3.0 in Q4. While we wish the export rates had been stepped down a little more gradually, the policy is generally in the right direction for incentivizing homeowners to adopt storage. The next step is for installers to educate homeowners to increase adoption of NEM 3.0, companies like Enphase need to help in making this transition possible. That's where Solargraf's design and proposal engine comes in. Installers will be able to use Solargraf to provide homeowners with a proposal that optimizes their bills under NEM 3.0 tariff to minimize payback and maximize ROI. The advantage with Solargraf is that the underlying algorithm used by its engine will be the same as what is used in the actual operation of the Enphase home energy system. As the system complexity increases with solar, batteries, EV chargers, and dynamic rate structures such as NEM 3.0, the tight coupling of Solargraf and actual product operation will maximize value to homeowners. In summary, we are quite pleased with our performance. As a reminder, our strategy is to build best-in-class home energy systems and deliver them to homeowners through our installer and distributor partners, enabled by the installer platform. We have many new products that are coming out in 2023 that will increase our served available market and positively contribute to the top line. We look forward to introducing IQ8 microinverters worldwide, introducing IQ Batteries into more countries in Europe, launching our 3rd generation battery in North America and Australia, as well as introducing our highest power 480 W IQ8P microinverter for both the U.S. small commercial and emerging residential markets. We are also excited about the upcoming Solargraf functionality, especially the NEM 3.0 functionality. Finally, the work we are doing to bring both smart EV chargers as well as bi-directional EV charging capabilities to the market. With that, I will now turn the call to Mandy for a review of our financials. Mandy? Thanks, Badri. Good afternoon, everyone. I will provide more details related to our fourth quarter of 2022 financial results, as well as our business outlook for the first quarter of 2023. We have provided reconciliations of this non-GAAP to GAAP financial measures in our earnings release posted today, which can also be found in the IR section of our website. Total revenue for Q4 was $724.7 million, representing an increase of 14% sequentially and a quarterly record. We ship approximately 1,952.4 MW DC of microinverters and 122.1 MWh of IQ batteries in the quarter. Non-GAAP growth margin for Q4 was 43.8%, compared to 42.9% in Q3. The increase was driven by a favorable IQ8 product mix. GAAP gross margin was 42.9% for Q4. Non-GAAP operating expenses were $87.7 million for Q4, compared to $78.6 million for Q3. The increase was driven by international growth, customer service, and R&D. GAAP operating expenses were $153.7 million for Q4, compared to $132.5 million for Q3. GAAP operating expenses for Q4 included $59.4 million of stock-based compensation expenses and $4.9 million of acquisition-related expenses and amortization for acquired intangible assets, and $1.8 million of restructuring and asset impairment charges. On a non-GAAP basis, income from operations for Q4 was $229.4 million, compared to $194 million for Q3. On a GAAP basis, income from operations was $157 million for Q4, compared to $135.4 million for Q3. On a non-GAAP basis, net income for Q4 was $212.4 million, compared to $175.5 million for Q3. This resulted in non-GAAP diluted earnings per share of $1.51 for Q4, compared to $1.25 for Q3. GAAP net income for Q4 was $153.8 million, compared to GAAP net income of $114.8 million for Q3. This resulted in GAAP diluted earnings per share of $1.06 for Q4, compared to $0.80 for Q3. We exited Q4 with a total cash equivalents, and marketable securities balance of $1.61 billion, compared to $1.42 billion at the end of Q3. In Q4, we generated $253.7 million in cash flow from operations, and $237.3 million in free cash flow. CapEx was $16.4 million for Q4, compared to $8.9 million for Q3. The increase was primarily due to investment in additional contract manufacturing sites and R&D equipment. CapEx for the full year of 2022 was $46.4 million. Let's discuss our outlook for the first quarter of 2023. We expect our revenue for the first quarter of 2023 to be within a range of $700 million-$740 million, which includes shipments of 100 MWh-120 MWh of IQ batteries. We expect GAAP gross margin to be within a range of 40%-43%, and non-GAAP gross margin to be within a range of 41%-44%, which excludes stock-based compensation expenses and acquisition-related amortization. We assume a conservative euro FX rate in our Q1 guidance, and we don't expect significant impact to our financials from fluctuations in FX rates. We expect our GAAP operating expenses to be within a range of $177 million-$181 million, including approximately $77 million for stock-based compensation expenses, restructuring charges for site consolidation, acquisition-related expenses and amortization. We expect our non-GAAP operating expenses to be within a range of $100 million-$104 million. Moving to tax. Since we have utilized most of our net operating loss and research tax credit carryforward in 2022, we are now a significant U.S. cash taxpayer. We expect GAAP and non-GAAP annualized effective tax rate for 2023 to be at 22% ±2% before any IRA impact. In closing, we are pleased with our 2022 financial performance. We grew our revenue by 69% year-over-year while expanding our non-GAAP growth margin to 42.6% in 2022. We increased non-GAAP diluted earnings per share by 92% to $4.62 per share in 2022, and generated record free cash flow of $698.4 million, more than double from 2021. With that, I will now open the line for questions. We will now begin the question-and-answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the key. To withdraw your question, please press star then two. We ask that you please limit yourself to one question and one follow-up. If you have further questions, you may reenter the question queue. At this time, we will pause momentarily to assemble the roster. Our first question will come from Colin Rusch of Oppenheimer. Please go ahead. Thanks so much, guys. You know, I appreciate all the detail here. Can you talk about how your pricing strategy is evolving here, you know, as you move into different configurations for the devices and you continue to try to monetize the value here? Are there areas where you can increase price a little bit? Are you trying to hold it flat? Just talk to us about how that's evolving here. The pricing in general right now is very stable. We do value-based pricing. We look at pricing versus the next best alternative, and we usually look at what value do we add in compared to that alternative. Typically, the things we focus on for microinverters are how is our quality compared to competition? How is our customer experience compared to competition? How is our ease of use compared to competition? Is the product a lot more easier to install? That matters to the installers. They once they install, they do not want to come back to that site again. They need excellent support. We look at all of these puts and takes. We look at it versus the next best alternative. We price our products. We are extremely disciplined there. We also have a segmentation strategy, which means that, you know, we look at different flavors of power, and we price it according to the value those provide. You know, in batteries, our strategy has been similar. With the first two product in our generation, first generation and second generation batteries, we fell a little bit short in terms of the differentiating features. Now with the third generation, I think we are going to be quite unique. We have a modularity of 5 kWh. We will have double the power compared to the prior generation, which means a 5 kWh battery will have 3.84 kW of continuous power and 7.68 kW of peak power, which is amazing power. In addition, that's gonna have 30 minutes commissioning time, the thing that we didn't get right on the first two generations. With batteries, we are back into the value space again, and we will price those products accordingly. The short answer to your question, pricing is quite stable now. Okay, excellent. As you look at making a bigger push into the commercial rooftop market, can you talk a little bit about the preparation in the channel in terms of education and training on the product, what you're seeing already in terms of sell-through with some of the legacy products as you prepare to really get into full swing by the middle or latter part of the year? Right. This product, you know, we had originally three years ago, we started with introducing the IQ8D product, and that at that time was a good idea. It was 640 W AC, and that microinverter covered two panels. We got excited by that. We worked on it, that product, it took us some time to work on it because not only we had to get the microinverter right, we had to get the entire chain right, which is the microinverter, you know, performance, the gateway performance, most important, the software performance. We needed a proper design and proposal engine like Solargraf. It took us quite a bit of time. We realized a few months ago. That, yes, we can come with that product, we can release that product out, but that product is gonna fall short in terms of power, because the panel power in the commercial, you know, business has moved to, let's say, greater than 500 W. Two panels would be 1,000 W. 1,000 W over 640 W is a DC/AC ratio of more than 1.5. 1.5 is not acceptable in this business. The right number is between 1.2 and 1.25. We regrouped. We told the installers we are gonna make a quick change. Going back to the single panel, single micro architecture, we are increasing the power, leveraging what we did on the IQ8D, so it was not lost. We increased. We used that architecture, we basically are introducing now a product that is a 480 W AC product. That will take care up to 650 W of panel power. Also accompanied by that product, we need the entire platform. What I talk about an installer platform, which is starting from lead generation, qualification, because this is a design win business. It's not like the residential business. There is some cycle time. You have to capture opportunities properly. You spend a lot of time in understanding, analyzing the ROI. The tools need to be excellent for that. You need to help the installers through that entire process. I think we are finally almost ready there. We are looking to introduce, you know, beta test with the installers in the second quarter using the entire flow. We are planning to release to the, you know, release it, start ramping in the third quarter. It's gonna take us a few quarters to ramp because like what I said, this is not like the residential, you know, business. It's a design win business. We have to work with customers for an extended period of time and then, you know, convince them of the value proposition, and we'll start winning. Our basic pieces there is the same, you know, product innovation, great quality and support customers well, which is customer experience. Great. Thanks so much, guys. Thank you. The next question comes from Philip Shen of ROTH Capital Partners. Please go ahead. Everyone, thanks for taking my questions. Congrats on the strong Q4 and Q1. Badri, one thing that I noted in your prepared remarks was that you talked about how some of your customers are experiencing more caution, or they're a little more cautious in booking orders. Normally, you have a six-month order visibility, and that has been somewhat reduced, as your partners watch their spending closely. Can you expand on that a little bit and help us understand, you know, when do you expect to get back to your six-month visibility? You talked about originations improving in January, but based on some of the conversations we're having in the industry, it seems like there is a fair amount of tumult and challenge out there with, you know, trade credit being pulled back and some bankruptcies and just some challenges out there. How do you expect to navigate that overall and, you know, perhaps share gain is one source of strength, but just wanted to understand, you know, as we look through the rest of the year beyond Q1, how do you expect the year to develop? Thanks. Yeah. I mean, look, seasonality has always existed in the solar industry from Q4 to Q1. You know, historically, I would say that that seasonality is a 15% number. That means, in general, the sell-through in Q1 is usually 15% down compared to the sell-through in Q4. Now, right now, I'm giving you a lot of data from January, and that's the data we have. Our Q4 was very strong, including December. January, we started to experience a little more than 15%. That's why I said more pronounced seasonality. Of course, you know, we think it is due to the macroeconomic environment. What we see, what we saw interestingly was the activations remained the same. I mean, approximately the same. They were a little bit down. They didn't have that much of a seasonality. That basically was somewhat good because the customer demand, at least whatever we saw was, I mean, did not get that much affected. Having said that, I think the installers are quite cautious. Therefore, they basically, you know, are only buying what they need from the distributors, which is a stark difference from 2022, where they were focused on supply. They were focused on maximizing what they had in their warehouse. Now it is that they are worried about their spending. They're worried about their OpEx. They're worried about their cash flow. Therefore, they are going to make sure they do exactly what is required. That's why I think, and I don't have a crystal ball, I cannot be sure. That's why I think we are seeing, you know, some customers who used to book six, nine months ahead now will not book so much ahead. They'll be a little more conservative. You know, with regarding your question on more, you know, that the originations, whether they are improving or not, this is the data. We work with thousands of installers. We have a very strong sample set. We talk to a lot of distributors. Some of our distributors service hundreds of long tail installers. We, you know, we don't see originations ourselves. We only what I reported to you is anecdotal information. We hear that, you know, originations, and especially originations in California, are back to being strong in January. That's what we hear. I think that is, you know, that's why I said that plus the fact of we are not seeing that much of a change in activations finds me to a cautiously optimistic Q2 versus Q1. Okay, great. Thanks, Badri. Shifting gears to the IRA. You know, I think on the last call, you were talking about the ability to get the majority of that credit. Was wondering if you could comment on the latest you see in terms of the microinverter credits. Do you expect to get the vast majority of that? In terms of the timing of the Section 45X or manufacturing PTC guidelines, some of our checks suggest this could be released much later than originally expected, maybe in a year later. Just curious if that impacts your plans at all and if you can talk about CapEx required for the facilities and factories, that would be great. Thanks. Yeah. I'll answer the question in reverse. CapEx required, basically an auto line, is roughly 750,000 units. An auto line costs us, including test, et cetera, anywhere from $8 million-$10 million per line. If we have to do six lines, that's anywhere, close to $50 million-$60 million. That's the CapEx spending. Now, to answer your question, do we expect to get the vast majority? Yes, we do. Does the announcement or the treasury indication change our plans? No, it does not. We are going to start manufacturing in the second quarter. We are going to ramp up a couple of lines with a new contract manufacturer in the second quarter. We are going to start the remaining lines. Totally, we will have six manufacturing lines by the end of 2023, with three contract manufacturing partners. Great. Thanks very much for the color, Badri. I'll pass it on. Thank you. The next question comes from Brian Lee of Goldman Sachs. Please go ahead. Hey, guys. Good afternoon. Thanks for taking the questions. Kudos on the solid execution. First question I had was just around NEM 3.0. You know, I think, there's different implications of that policy uncertainty near term and medium term from what we're hearing. So maybe just wanted to get your thoughts. You know, near term, you know, some views out there that maybe there's a pull forward on demand in California. Would be curious, you know, what you're seeing with respect to that. And then, you know, kind of in the medium term, we're hearing the industry is still maybe trying to figure out how to navigate this. So, you know, curious how you specifically are thinking about the second half of 2023 in the U.S. Are you kind of base casing California to be down significantly? How do you see yourself navigating that if that's the case? You know, are you driving more product to other states, focusing more on Europe? Just curious, just how you'd be thinking about, you know, planning into that period of higher policy uncertainty in the back half. Had a follow-up. Yeah. On NEM 3.0, we aren't really seeing any pull forward right now. In talks with a few installers in California, both big and small, like what I said, the originations are up strongly. They are all quite optimistic. You know, maybe we will see something soon. That's why I talked about an optimistic Q2. So far, we haven't seen any pull forward demand yet. Now, on talking about NEM 3.0 in general, NEM 3.0 is gonna be incredibly positive for us because NEM 3.0, I mean, just so everybody gets it, I'll talk about NEM 3.0, the features of NEM 3.0. Basically, you know, Yeah, previously, the import and export rate were the same. Therefore, when you exported electrons with the solar system didn't really matter. As long as you exported, it got directly subtracted from what you imported. That's why it's called net metering. That was NEM 2.0. With NEM 3.0, it matters when you export these electrons. You have 24 hours a day, 365 days a year. Basically 8,760 data points. There is an export rate for each of those data points. Each of those hours, there is an export rate. But what it works out to be is if you are interested in a pure solar system, your payback drops, you know, understandably from, let's say, five years, it increases actually to something like seven or seven and a half years with a pure solar system. The moment you add batteries, you can add batteries in steps of 5 kWh, 10 kWh, 15 kWh. The moment you add batteries, that payback comes right back in to that five to six year period. That is a stark difference with NEM 2.0. With NEM 2.0, the grid was the battery. Batteries didn't have an ROI because batteries were primarily for resilience only. With NEM 3.0, batteries are gonna be financially attractive. It is complex. NEM 3.0 is definitely complex. The installers need to demystify it for the homeowners. That's where an engine like Solargraf and other engines come in, where if we are able to show this to the homeowner, we think it is a no-brainer. The homeowner will always pick solar plus storage. To add some more variance to it. Germany, for example, if you look at Germany, this is exactly what happened. They call it as a feed-in tariff, there is not 8,760 different rates for those hours, but they have one rate which is a much reduced rate. Therefore, self-consumption becomes the norm in Germany. No one thinks about exporting solar, right? Batteries have an 80% attached there. This is going in the same direction. Going in the same direction. In Germany, you have grid-tied batteries because power doesn't go out there much. It goes out maybe once a year. You have grid-tied batteries. Grid-tied batteries means you know, the installation is simpler and it is cheaper. I'm not sure whether California will go in that direction. Time will tell because we do have some power, you know, we do have resilience issues as well, but I'm sure markets will evolve a little in that direction too. Bottom line, we are incredibly optimistic. We got the right batteries for it with the third generation battery. We got the modularity, which I think will start becoming popular. Grid-tied may become popular, but we'll be ready to do either grid-tied or, you know, off grid, on grid, you know, with backup. Things are looking, you know, we like NEM 3.0. Of course, we didn't like the fact the step down happened, you know, right away. I think in the long term, it's an okay decision. This is Raghu. I wanna make one more comment to what Badri said. The, obviously the battery is the third generation of our battery is uniquely valuable for in this, in this NEM 3.0 environment. In addition, it's also the optimization engine that we will be running, right? The engine has to, in near real time, every hour make a decision on whether it is charging the battery, discharging the battery, managing the load, et cetera. All of that energy management engine becomes extremely valuable and extremely critical. It all begins with the design engine itself. What we mentioned this as Badri mentioned it in his script, that design engine, the engine that you run in order to design the system, is actually the same engine that you run to actually operate the system. Bringing those two pieces together is extremely critical and extremely valuable. That's what we are spending a lot of time optimizing our engine and building out the design as well as the operation. It starts with a battery and it, that software is becoming extremely critical. Yeah. No, I appreciate the call. Maybe two quick follow-up. You know, the long term thesis I get, I guess on a shorter to medium term basis, as you mentioned, Badri, the change is immediate. You know, the industry is still trying to figure it out. I guess, what are you hearing from installers? Are they ready to, you know, convert customers up, you know, upsell customers to batteries starting as early as the second half? Are we gonna have pretty meaningful friction here until, you know, the market figures out the new rules and I guess some of the macro uncertainty which you even alluded to earlier, kind of settles out? Secondly, if I just look at your numbers, you know, battery volumes per your shipment guidance, in Q1 will be down year-on-year for the first time since you guys started breaking that out. Batteries all of a sudden don't look like they're growing for you. What should we be thinking about for the next few quarters into the back half? Like, does NEM 3.0 drive growth again, or is this a sort of more uncertain period of battery growth, at least in the next couple of quarters until, again, the market kind of figures it out? We think you should think that NEM 3.0 is gonna be great for us. We are going to be growing, you know, along with NEM 3.0, we are gonna be growing. In addition, we are gonna be growing outside California on two, because... I'm not sure whether you caught the color in what I said. The, we are working on the battery transition right now. The second generation product is gonna give way to the third generation. We have fixed all of our issues in the field for the most part in terms of commissioning and, you know, all of the software performance is quite stable right now. We are getting ready for the transition of the third generation battery. The third-generation battery I pointed to you on the benefits, power, the 30-minute commissioning time, and modularity. We think that, you know, starting in the second half of the year, we think NEM 3.0 will be a huge catalyst for this in California. In addition, we expect to also see very healthy growth outside California. Your other question. We talk to a number of installers all the time. We recently talked to a bunch of California installers on exactly this, whether are they ready. Most of them are quite optimistic about increasing their battery attach, because for the first time, you know, with batteries, the payback will be, you know, a very good payback between five and six years. I think many, you know, installers, you know, of course, are worried about, you know, the customers having to shell out a little bit more upfront. With the ITC 30% tax credit and with an incredible payback, they think the sale will be more easier than what you think. We are, you know, we are quite bullish about NEM 3.0, and especially our third generation battery in that context. All right. That's great. Best of luck, guys. I'll pass it on. The next question comes from Mark Strouse of JP Morgan Chase & Co. Please go ahead. Great. Thanks very much for taking our questions. A lot of focus on the U.S. markets, but I just wanted to go back to your comments about Europe. That's obviously been very strong the last couple of years, kind of doubling each year. I know you don't guide annually, but just kinda how should we think about that market, in 2023? Do you think kind of a, an approximate doubling is, kind of the base case that we should be expecting from here? Well, as you said, we do not guide, you know, something annually. European market is growing. At least our internal reports talk about a served available solar market of about 13 GW in 2023. The markets to really, you know, the markets that are really driving are Netherlands, Germany, Spain, France, Italy, and, you know, even actually Austria, Poland, et cetera. They're all becoming quite significant markets. In addition, you know, battery attach is also growing. Like what I stated in the prior question, you know, answering the prior question, the attach rate on batteries in Germany is 80%. Solar plus storage is growing healthily. The geopolitical situation accelerated it last year, and that's continuing. You know, what's our positions? We have a very differentiated product. We have microinverters on the roof which are very high quality, easy to install. We have a huge customer service, you know, operation there in France and in Germany, and we take care of customers well. On batteries, we are just starting to ramp, and we have introduced our batteries in two countries, Germany as well as Belgium. We expect to introduce to many more countries this year, and that will happen every quarter. We expect to add a lot more battery revenue there. I forgot to mention, IQ8s, we'll be introducing IQ8s into every country in Germany. I mean, every country in Europe shortly. On top of it, we bought this company called GreenCom Networks. Their job is to network third-party EV chargers and third-party heat pumps to the Enphase solar and storage system. Therefore, homeowners, you know, can operate, can optimize their system from one app, can see everything that is happening. To answer your question, the market is growing, the market is growing really significantly. That's what I told you, 13 GW. We are well-positioned due to our differentiating value proposition, and we recently bought a company, GreenCom Networks, that is even going to make that situation better, where we provide a complete home energy management system to our installers. Got it. Okay. Then maybe Badri would give you a little bit of a break. Mandy, can I ask, I mean, we're all doing the math on the domestic manufacturing tax credits, I mean, is there any color that you can share yet as far as kind of the upside from the tax credit, the potential downside from, you know, higher input costs? Just kind of the blended average, the appropriate way to be thinking about that U.S. manufacturing from here. I mean, net-net, we expect a net benefit of, you know, between $20 and $30 a unit. I'm giving you a wide range right now because we do have some puts and takes, and we will refine it as we go. Got it. Okay. Thank you very much. The next question comes from Steve Fleishman of Wolfe Research. Please go ahead. Thank you. You're growing your production capacity, you're doubling it from 5 million a quarter to 10 million, you said, I think, by your end of 2023. Could you give us a sense of your conviction that the demand will be there to meet that doubling of production? Yeah. Look, if you look at our past growth rates, you can see it. We grew up, I think, 2021 to 2022, we grew 59%. At that time, I think end of 2021, we were doing, if I remember right, around 3-ish million units a quarter. End of 2022, we are now, we just reported 5-ish million units a quarter. You can see there, that's a nice growth. You know, our long-term thesis on solar is, we are extremely bullish. We, you know, especially with countries like Europe and with our strong position in the U.S., with, you know, our rapid entry into other emerging markets. You know, we think it is the right call, to basically invest in the right manufacturing, especially given the IRA benefits. Even if we don't use all 10 million units per quarter, we will use it sooner or later. I think the ROI is well worth it, especially considering the net benefit to us. Our logic was quite simple. We weren't worried. We did a few back of the envelope calculations. We thought it is the right thing for us to invest in these lines. Fortunately, we have very strong and great contract manufacturing partners who need to do a lot of the heavy lifting. You know, our capital that we set out is quite limited. They do a lot of the heavy lifting, like what they are doing today, and two of them are existing contract manufacturers, so we have deep relationships, and we are gonna work with them in the long term. We thought that's the right decision for us to do, and we basically accelerated that effort. Once we make a decision, it takes us a few quarters. In the past, it has taken us four to six quarters to ramp up the lines. Our thesis is quite bullish on solar, and we think that's the right call. Okay. No, that's. Ultimately expect, you know, obviously significant volume growth from that. On margins, you mentioned, I mean, you've had the gross margin hold up well, but then the $20-$30 that you just mentioned, is that a gross margin benefit net of costs? That the net, you know, the IRA gives you an incentive, which is $0.11 a unit. $0.11 per AC watt. Now, every microinverter that we make, you know, let's say a microinverter that we make 320 AC watts. 320 AC watts multiplied by $11, right? That number is roughly about $35. That $35 is the net benefit. Now it takes us some incremental cost to manufacture in the U.S. versus manufacturing in Mexico. Call that as some delta, right? It also takes us, you know, we want to make sure our contract manufacturing partners are healthy as well. Therefore, they share a little bit of that incentive. The net benefit for us would be that $35 minus the incremental cost adder, minus the benefit we pass on to our contract manufacturing partners. That number is what I reported as $20-$30 net benefit per unit. That's all incremental to what we have today. Great. I'll leave it there. Thank you. The next question comes from Jeff Osborne of Cowen and Co. Please go ahead. Hey, good afternoon, Badri. Two quick ones. You touched a lot on Europe, but I was wondering if you can specifically drill down on the visibility you have there, in terms of Q1 and Q2. Yeah. Europe is actually the opposite. We do have good visibility. We do have the strong orders. You know, partners, our installer partners, distributor partners, they rely on us for supply. A few of them even come to our headquarters, quite routinely. That's something that we are starting to see, and we also visit them quite a bit. I think we do have decent visibility there. Great to hear. Either for yourself or Mandy, I didn't know if there's a way of doing sort of a gross margin walk between Q3 and Q4. Certainly, the IQ8 cycle is helping, but wasn't sure if that's the complete story. If there's a mix issue in terms of ancillary equipment or softer battery sales that led to the strength in the quarter. How do we think about the gross margin walk to get to the high end of the range for next quarter? It's mostly about IQ8 mix. The IQ8 mix is 55% in Q4. That means out of the 4.8 million microinverters that we shipped worldwide, 55% are IQ8. That's principally contributing to the gross margin. That number, the 55% was how much, Mandy, in Q3? It was 47% in Q3. Yes. 47% in Q3. That number, we expect that number to be a little greater than 60% in Q1. That explains the margin. I appreciate that. A very quick follow-up. As IQ8 grows in Europe, is that accretive or dilutive to the results that you just reported? That will be accretive. Got it. Thank you. That's all I had. The next question comes from Ameet Thakkar of BMO Capital Markets. Please go ahead. Good afternoon, Badri. Thanks for squeezing me in. Just a, I guess a follow-up on that last line of questioning, but I think you guys had targeted to get to 90% in terms of IQ8 mix by the end of the second quarter. I think you just said 60% is kind of what's baked in for the first quarter. Are you guys running a little bit behind on that? We are running a little behind, I would say. Rather we are gonna introduce IQ8 into several countries in Europe, in the near term. In Q2, we'll probably be at, you know, maybe a little lower than 80%. I think in Q3, we should probably catch up to that 90%. Great. Thanks for that. You know, I think this time last year when we had this call, and certainly a battery kind of uptake in California will increase and that might change things. I think you guys said that like California was roughly 20% of total revenues, you know, post the initial NEM 3.0 proposal. I was just wondering if you could kind of give us kind of a refresh on where 2022 ended up in terms of California as a percent of total revenues. Those numbers are right. Yeah. California, the revenue is approximately 20% of our total revenue. That's correct. It's still 20%, then in 2022? Yeah, that's right. Okay, great. Thank you. The next question comes from Julien Dumoulin-Smith of Bank of America. Please go ahead. Hey, good afternoon, team. Thanks for the time. Appreciate it. Just first off, wanted to come back to the margin question and talk a little bit more about structural margin expectations. I know we talked about value pricing earlier. Can you elaborate a little bit on where you stand vis-à-vis your margin expectations through the course of this year? You talked about pricing integrity. Maybe there's a little bit of mix here question between storage and the other products here. How do you think about the evolution of margins here through the course of the year, especially as you think about mix? A little bit of a nuance from earlier, if I can follow up. On utilization, obviously, you're fully utilized today. You think about bringing on that capacity. Is there any margin impact from underutilization as you bring on some of this, you know, given the comments about, the backlog dynamic? Right. On the margin question, as we convert more of our mix to IQ8A, you know, margins will get incrementally better, and we will take care of it in our margin guide. Like what I have told you, margin is not always about pricing. It is about lot of focus on costs. We have an initiative called World-Class Costs in the company, where we continuously focus on every small nit, you know, whether it's a capacitor, whether it's a resistor, the gate driver, the AC FET, the potting, plastics, the cables, the connectors. Transformer. We have a large team working on it. Transformers, we have a large team working on it. What you see is a combination of good cost reduction efforts plus good pricing efforts. We'll, you know, if you, if you had noticed, we improved our non-GAAP gross margin guidance from the prior quarter by 1% because of the IQ8A transition, plus the progress we are making on World-Class Costs. I have told before that batteries, we are in our 2nd generation. Every generation, we will improve costs. We will not be in a business until we are convinced we can meet that, you know, our model, the gross margin, the company operating model. On batteries, we are continuously working on it. Our, your 3rd generation battery will be better than the 2nd generation battery. We already have a plan on the fourth generation battery to reduce energy density significantly, so that will be even better. It's a continuous program. Your second- Utilization. Okay, utilization. Utilization is to a first order, negligible impact. Those are the contracts that we have with our partners. Got it. Al right. Good. Great stuff. Then just, if you can comment just quickly on just obviously, loan versus lease, the evolution. What's your ability to deviate and press volumes into the lease markets here, if you think about it that way, versus just helping and enabling your loan customer? We do business with a number of installers who offer leasing. With some of those, we have 100% share. With some of those, we have a healthy share mix. Overall, we are very well positioned. If you have a significant shift between loan and lease, I don't think we will miss a beat. Got it. Great confidence. Thank you. The next question comes from Eric Stine of Craig-Hallum. Please go ahead. Hi, everyone. Thanks for sneaking me in here. Maybe just on the contract manufacturing coming back to the U.S. Obviously, with that, with Romania coming on, it's about better servicing the customer and lead times. I'm just curious, I mean, is there any margin benefit to that as well? You've been servicing global from Asia and Mexico to this point. Any benefit from being closer to the customer? No, net-net, it is a wash because if you think about it depends upon where the raw materials come from. If you have manufacturing, for example, in Europe, unless you move all the raw material factories to Europe, to a first order, you will not get that benefit. Basically, you have to look at it as a full chain, where your total cost is a function of how you transport the raw materials, then you make the product, and then you ship the product to your customers. In the case of Romania, yeah, we are closer to the customers, but you do need to get raw materials to the factory. I would say it is a wash. It's not significant enough to talk about. It will become significant if we are able to do exactly what I said, which is, us, you know, if we are large enough, and if we're able to convince some of our, you know, some of the suppliers to move factories or to open up factories closer to the manufacturing area, definitely, there is some cost to be taken out. Any indications that that is starting to happen? I mean, people coming to the U.S., in light of the tax credits and that sort of thing. Yeah. You know, as we get bigger and bigger, those will eventually happen. You know, right now it is a process. I can't tell you that it's an event. It'll happen one fine day. For example, in Mexico, we have started to see that. Some of our suppliers have set up factories for enclosure, for example, or for connectors. They have started to set up. We are realizing some gain there, but it is an evolution. Okay. Thank you. Thank you. The next question comes from Maheep Mandloi of Credit Suisse. Please go ahead. Hey, thanks for squeezing me in. This is David Benjamin on the line for Maheep Mandloi. I was wondering if you could give us a little insight into the mix for Europe in Q1. We basically told you that the revenue mix between U.S. and international is 71% and 29%, and most of our international revenue is Europe. Okay. That's the same for Q1, you think that's gonna be in line for Q1 as well? We don't usually talk about that mix for Q1. I think it'll be slightly better because, you know, Europe is a little strong in Q1 compared to the U.S. Great. Thanks. Just to follow up, on batteries, can you talk a little bit about what you think, with the new third generation, if you think, or what you think the retrofit opportunity is gonna look like? Yeah. Hi, this is Raghu. I think retrofit in general for storage is gonna be better than before because if you recall, the IRA now has 30% battery ITC, stand-alone battery ITC, which means that you can be decoupled from solar, can come in and add battery later on into the system and still get your 30% ITC. For us at Enphase, we have a unique benefit because we are AC-coupled, we can very easily do that. If you have an existing system, even if it's an older generation, solar system, you can come in and add an AC-coupled battery, you can add it in modularity of 5 kWh. You can grow it how many hour system you want to add. You can add it over time. All of those things are possible, with our system and get access to the 30% ITC credit. Definitely a benefit for retrofit. Great. Thanks very much. The next question comes from Kashy Harrison of Piper Sandler. Please go ahead. Good afternoon, and thank you for taking the questions. Badri, you know, in your prepared remarks, you mentioned that distributors, some of your distributors have started to see a bit of recovery in January. I was just wondering if you'd maybe share some details on, you know, what those distributors are now seeing in terms of year-on-year growth and maybe how that compares to, you know, what they had seen in the prior quarters. No. Those are not our data, so we cannot share those. All I said is basically, you know, there is two things which I said. We are seeing the distributor and installer partners a little more cautious in booking orders. Normally, we have six-month order visibility, that is now somewhat reduced as they watch their spending. Then I also talked about the fact that in our sell-through, which is what the distributors sell to the installers. Our sell-through was quite strong in December, while we saw a little bit more seasonality than normal in the month of January. On the originations which I talked about were basically anecdotal data points from the installers that a few of them have seen the originations pick up in January compared to December. We also have our Solargraf design and proposal engine. We also have another company we bought called SolarLeadFactory, which also deals with you know, selling leads to our installer partners. They're also seeing very similar trends that January is better when compared to December. Although the data we have is limited, I mentioned that these, you know, this point makes us cautiously optimistic for Q2. Fair enough. Thanks for the clarification there. This is my follow-up question. You know, in the event that you're the only major player that's able to capture the microinverter credit, can you speak to your willingness to use the manufacturing credits as a tool to gain market share? In other words, just, you know, passing on all those benefits to the customer and just using that to gain share. That's it for me. Thank you. Yeah. I mean, we normally don't think like that. We think, you know, Yeah, we are quite disciplined. The product must add value, and it must add value compared to the next best alternative. That's the only way for us to win long term. This one is an incremental benefit, and we have to do a lot of work for that. There's a lot of R&D. There's a lot of work we have to do in reliability, in, you know, qualifying these factories, in having, you know, the right operations running there. Of course, I talked about the capital outlay, et cetera. All of those are. We are investing in all of those right now. We are gonna be extremely disciplined. We are not gonna use this as an opportunity to lose the discipline in price. Thank you. Next question comes from Praneeth Satish of Wells Fargo. Please go ahead. Thanks. When you look at the U.S. market, I think you mentioned, more than the typical 15% seasonal slowdown in January. Can you maybe just unpack whether that's more concentrated in states like California or is it more evenly distributed across the country? Well, I mean, in California there is an added complexity due to the weather in the first few weeks of January. I would say, you know, that's, yeah, that's the only difference there. Once the weather is normalized, I think we are gonna find it is equivalent across the states. Okay, got it. Just switching gears, I wanted to ask on the bi-directional charger and what you're working on there. I guess, you know, how much demand do you think there'll be for this product, you know, down the road? I think it's small now, but down the road. When you think about pricing, I mean, how much value do you think you could ascribe to a bi-directional charger given all the opportunities it opens up? Yeah. This is Raghu. To begin with, right, we shouldn't think about a bi-directional EV charger as something standalone by itself. It's a core part of our energy management system. The energy management system will include obviously solar, stationary batteries, bi-directional EV chargers, grid management, et cetera. It is part of that full solution set that we offer. Within that full solution set, the energy management piece, the software that's, you know, federating how the energy should flow, between all of these resources, as well as, into the house. That's the way we think about it. As far as, you know, on a first principle's basis, it would be if you buy an EV, you should buy a bi-directional EV charger. It's really as simple as that in order to gain the most benefit out of it, because if you think back, as we said, it does both of those use cases we talked about, which is both vehicle-to-home as well as vehicle-to-grid. Vehicle-to-home means providing resiliency for the home. You know, it's the resiliency that the IQ8 on the roof provides, the resiliency that our battery, modular battery system provides, the resiliency now, added resiliency that the car can also provide. When it comes to vehicle-to-grid, this is about the ability to leverage the energy that you have stored in your stored in your car, to provide things like grid services or act like a virtual power plant. I think we bring a lot of value to it by being part of our energy system. Really, I would expect that anybody who buys an EV would be naturally motivated to buy the Enphase energy system, which would include the solar, the battery, and the bi-directional EV charger. Got it. Thank you. The next question comes from Sophie Karp of KeyBanc. Please go ahead. Hi, thank you for taking my question. A lot of my questions have been answered, maybe just one last one if I may. You're doubling your capacity and presumably the U.S. market will be going forward served by the manufacturing capacity in the U.S., right? Is there any risk that these capacity additions in the U.S. cannibalize some of your existing, you know, lines outside of the U.S. that are currently important here? Is the international growth that you're expecting so strong that basically your international capacity will just serve outside of the U.S. demand? Thank you. Yeah, I mean, you know, once again, we are, you know, I clarified this actually before. We are very disciplined. We are working with the same contract manufacturers, we can see the business in totality with them. We are not going to basically shortchange them on, you know, their locations elsewhere. It has to be carefully done and we have orchestrated the right plans. Fortunately, you know, for us our business is, you know, healthy, ramping up in Europe. Europe for example as well as U.S. is quite strong usually. It takes us anyway four to six quarters to ramp such lines. What we will do is a careful allocation process to make sure that, you know, all of the factories are correctly loaded. That's what we'll do. Thank you. The next question comes from Corinne Blanchard of Deutsche Bank. Please go ahead. Hey, thank you for taking my question. I just wanted to go back on the 1Q guidance and the range from $7-$740. How much of the softness have you embedded and incorporated into the 1Q guidance? Then I know you commented a little bit, but maybe if you can give even more color on what to expect in California in February and March. Thank you. Can you please repeat that one? We were not able to hear it properly. Sure. I just wanted to get more color on the 1Q guidance in terms of how much of the softness you have incorporated into the guidance, and then your view for California market for February and March. I mean, we gave you a $700 million-$740 million number. We told you clearly Europe is growing quite well. We expect it to grow healthily in Q1 compared to Q4. We also told you that the U.S. business will be slightly down as compared to Q4. That's the color we gave you. As for February and March, I mean, I don't have a crystal ball, but like what I told you, it seems like the originations are starting to improve. We are optimistic things will get better. All right, thank you. That's it for me. Thank you. The next question comes from Pavel Molchanov of Raymond James. Please go ahead. Thanks for the question. Two quick ones about Europe. Now that the European Union is talking about this net zero industrial plan, do you envision receiving any credits or other manufacturing subsidies for your operations in Romania? No, we have not heard about that, about about that or any additional subsidies for our plant in Romania. You know, there is active discussion going on in Europe about about something analogous to the IRA that's being done here. We are tracking pretty closely, and if that happens and there are some benefits for us, we'll obviously avail of it. Other than that, we are not hearing of anything else. Okay. I think other than Europe, your main international exposure is Australia. Can we get a quick update on that? Yeah. Australia basically had a weak first half of 2022, and the fourth quarter is basically recovering back to original levels. The exciting thing for Australia is we are just about to introduce our third generation battery into Australia in the second quarter. In addition, we are also planning to introduce our IQ8 microinverters there. They are gonna have some brand new products and many Australian installers. You know, we meet with the Australian installers once a quarter in a round table, and many of those Australian, you know, installers are excited about third generation products. That will be an incremental revenue for us once we release, yeah, once we release it. Appreciate the update on that. Thanks, guys. Thank you. The next question comes from Sean Milligan of Janney. Please go ahead. Good afternoon, guys. Thanks for taking my question. Could you address or help us understand what% of the battery storage sales are going internationally right now? I know you're introducing that in a number of new markets, can you help us understand how the pace of ramp up in new markets, what we should expect for that over this year? We normally do not break out the batteries between U.S. and Europe. I'll say this, you know, Europe is getting started. You know, U.S. we have introduced batteries now for the last, you know, since Q3 of 2020. Basically two and a half years there. The Europe guys are getting started, but they're rapidly expanding. We have introduced the product in two countries, Germany and Belgium. There are a lot more countries that we plan to introduce in 2023. Immediately, we are going to introduce in four countries, basically Austria, Netherlands, France and I think Switzerland and the fifth one as well, which is Spain. We are going to steadily ramp up the megawatt hours there. When it becomes, you know, we'll actually look at it, yeah, between Mandy and me and see whether we'll start breaking that out for future quarters. Okay, great. Thanks. This concludes our question and answer session. I would like to turn the conference back over to Badri Kothandaraman for any closing remarks. All right. Thank you for joining us today and for your continued support of Enphase. We look forward to speaking with you again next quarter. Bye. The conference is now concluded. Thank you for attending today's presentation, and you may now disconnect.