Good morning, and thank you for joining us on today's call to discuss Enphase Energy's business. With us today are Mr. Steve Gomo, Chair of the Board of Directors, and Badri Kothandaraman, the company's President and Chief Executive Officer. After the presentation is completed, we will take written questions. To submit a question, please use the Q&A tab at the top of the Teams app. We have turned off your microphones and will only be taking written questions. We will try to respond to as many questions as possible. Please note that management may be making forward-looking statements about the company's current plans and expectations with respect to its business, technology, and products. Actual results may differ materially from current plans and expectations, so I encourage you to read our SEC filings where we discuss the risks inherent to our business. You will find detailed discussions in our filings with the SEC, including our annual report on Form 10-K for fiscal year 2024 and our quarterly report on Form 10-Q for the quarter ended March 31st, 2025. Please note that non-GAAP financial measures referenced during this presentation are reconciled to the most directly comparable GAAP financial measures found in the investor presentation posted on our website at investor.enphase.com. With that, I will turn the call over to Enphase Energy's President and Chief Executive Officer, Mr. Badri Kothandaraman, to give a short report on the company. All right. Good morning and welcome. Quick recap about Enphase. We were founded in 2006. Right now, 2,850 employees. The headquarters is in Fremont, California. That is where I'm talking to you from. Our customers are distributors. Distributors sell to installers. Installers sell to homeowners. We have very healthy relationships with distributors, installers, and homeowners. 2,000 installers in the Enphase installer network worldwide as of March 31st, 2025. This is a special network, the Enphase installer network. This basically is a three-tier network, and the installers have to work hard in order to earn their way into this network. It comes with both requirements as well as benefits. Approximately 81.5 million microinverters shipped. You can think about it as we have a total of 4.8 million systems, 81.5 million microinverters. If you divide 81.5 by 4.8, approximately about 17 or 18 microinverters per system. That's the average number of microinverters per system. We are nearing the 2 GWh mark on our battery storage systems. Batteries are a relatively new business. It's a new business for us. We started shipping batteries in 2016, and that was a very small battery, a kilowatt-hour. Then we introduced a real big battery system, 10 kWh system in 2020. Our 2024 revenue was $1.3 billion. Cash flow from operations was $513.7 million in 2024, and we are quite profitable. Next page. Here you see the relative challenges we have had going from 2023 to 2024 and now in 2025. Basically, when the interest rates essentially went up and the macroeconomic conditions declined, our revenues in 2023 started declining, and that is in the light blue bars that you can see. Then we found ourselves where we had a bloated channel. Therefore, we could not ship any more into the channel. You look at the green bars in 2024, you see the green bars are quite low because what we did was to regulate and not ship excess into the channel, and we had to wait for the channel to bleed. In 2024, and even towards the end of 2023, we started correcting. In 2024, you can see sequentially the green bars started to go up in Q1 to Q2 to Q3 to Q4. In 2025, the revenues are flattish there. Essentially, you can boil it down into two factors. In the U.S., it is macroeconomic conditions, high interest rates, as well as the NEM 3.0 transition, which was very painful, but it is now behind us, and installers have gotten adjusted to. That caused a little bit of turmoil. Europe business also was a little challenging for us. There also, each country has its own nuances. I'm not going to go into that number. For Enphase, what we are doing is essentially innovate. Innovate our way out of this. If you're following the company, you're seeing that our new product engine is very, very active. Our main focus is on building the world's best microinverters and battery systems. I'll cover a lot more on our new products. Top right graph is gross margins. Typically, in a company, when the revenue goes down, gross margin usually goes down because there are a lot of fixed costs. We have managed to keep that in check. We have a world-class cost initiative that focuses on cents for microinverters because every cent matters there. That team is doing a great job. You can see Q4 of 2024, we were at 53% in non-GAAP gross margin. Even in 2025, the Q1, we reported 49% there. Our operating expenses in terms of dollars are in check. We have taken the appropriate actions in order to size our teams right for the revenue. It is not much to talk about there. As a result, our operating income is quite healthy. The green bars basically are hovering around the mid-20%s. In Q4 of 2024, you see 30%, 31.5%. Even in a quarter, a weak quarter like Q1, we make over 26% operating income. We are highly profitable. Next. Core differentiation. These are the reasons why we think we're valuable: semiconductor integration and predictive control. Our microinverter basically focuses on continuous component reduction. Everything we do focuses on how to reduce the component count by heavy integration into custom ASICs, digital ASIC, analog ASICs. Predictive control allows us to have a single-stage microinverter and not the traditional dual-stages competition. When you have a single stage, then you have a less number of components. Less number of components means power dissipation is less. Power dissipation is less means your efficiency is high. When the power dissipation is less, your quality also becomes very good. Our quality, one of the main reasons we are differentiated is our PPM. Defective parts per million is 500 DPPM. That's our target. That's 0.05%. Software-defined architecture. This is becoming more and more valuable for us and our customers. Basically, I'll just give you an example there. I can actually be sitting here in the room. I can simply press a button, and I can take my system completely off the grid. What happens is when I press the button, the signal goes to the cloud, goes to the home router, then goes to the gateway at the home, and then instructs the appropriate device in the battery system to open up a relay, disconnecting the home from the grid. We are a complete IoT manufacturer. The important thing for you to know is that that base microinverter is only one hardware. We can modify it into various forms. We can adjust power. We can adjust functionality. We can produce any SKU we want. We can tweak it according to the regulatory conditions that exist in every one of those countries. One hardware SKU and a software-defined architecture enables us to enter a lot of countries without any hardware. For example, for Japan, we just entered Japan, and we did not have to do any hardware change there. It was all done in software. The last one on the right, we have always believed in an AC coupled architecture. We believe the grid is AC, as you all know, and everything that we do is a distributed AC architecture. Our solar is basically one microinverter for every panel, all distributed, so that if there is one microinverter that fails, the others actually produce. The same concept in the batteries as well. Each battery, for example, in our third-generation battery, it has six microinverters in a 5 kWh battery. If one microinverter does not work, the battery continues to function. Modularity is key for us. People, according to their needs, can add things in time. Generator integration, for example. Generators produce a sine wave AC, can be directly integrated into our home energy management system. EV, the same thing. All right. Next. The power of those three things, semiconductors, software, as well as the ensemble technology, results in us having very high quality, fewer components, reduced thermals, like what I said. We place extraordinary emphasis on safety. No high-voltage DC. Even in our batteries, while the competitors do high-voltage DC of several hundreds of volts, ours is low-voltage DC. LFP battery chemistry, lithium iron phosphate. We are big believers of that. And right since 2016, we have stuck to LFP chemistry, and everyone is now moving to LFP chemistry. I already talked about the modular design. The AC marketplace that we have gives us a lot of flexibility to expand systems over time. Exceptional value. Higher efficiency. The AI-based home energy management is something new. Essentially, now we are able to, based upon forecasting your PV, based upon forecasting your consumption, we are able to apply algorithms in order to maximize savings. This software is actually running for NEM 3.0. This software is running for homes in Netherlands where dynamic tariffs are active and a few other European countries as well. I talked about the supply chain efficiency. Everything. Our philosophy of designing basically leads us to one hardware platform. We do not need to have multiple hardware SKUs. One hardware platform, tweak software to handle individual region's requirement, for example. Because we are semiconductors, we can scale to deep submicron technology, and therefore we can make things ultra low cost. The net effect of all of that is we take customer experience very seriously. All of these decisions are catered towards providing customers a great experience because a PV customer stays with us for 25 years. A great experience is no phone call at all to us. That is why we build very high quality into our systems. Okay. Next. This is what I talked about. Quality 0.05%. That is the reliability target for microinverters. Our customer service, worldwide NPS, I talk about this number in every earnings call. 77% is a reasonable number. We are looking forward to increase that even further. We do not want customers to wait. Our target is always less than a minute. We are a little bit higher now, as I noted in the last earnings call, which we have already gotten under control. Pricing. Pricing, we have a dedicated pricing team. We price based upon value, and we have segmentation in these products. These products are segmented according to power levels. Of course, our product innovation I talked about, we have a separate ASIC design team that focuses on the next-generation ASIC. For example, IQ10 will have a brand new ASIC that will be capable of taking us to a megahertz switching. It will provide even more enhanced security, enhanced PLC functionality, and a lot of other bells and whistles. Of course, supply chain, I talked about world-class costs. Our team has done an extraordinary job. For example, in the recent announcement of the tariffs, we did not have to worry much about microinverters because we had already diversified the supply chain. We are extending the same concept to batteries now. Okay. Next. Our business model, no big factories. We do not own any factories. It is a CapEx-like model. We rely on contract manufacturing partners. OpEx efficiency. We have a large fraction of our engineering workforce is in India, and we get extraordinary talent there in India. We are able to get our OpEx under check. Okay. Next. This one is important. It is a global supply chain. We have four manufacturing sites today. Two of them are in the U.S, in Arlington, as well as in South Carolina, Columbia. These two of them can do 5 million microinverters a quarter. 85%, or I would say 80% of our global microinverter shipments today are from the U.S, are from these two factories. Only 20% of our overall microinverter shipments is made outside the U.S. We are already running quite well in the U.S factories. All microinverters now, if we bring out, for example, we plan to bring out IQ9 later this year, and that will right away start in both those factories. We are leveraging the Inflation Reduction Act to bring high-tech manufacturing and jobs to the U.S. The production tax credit, also called 45x credit, basically gives us incentives to make microinverters in the U.S, and that's a driving force. That helps us to actually compensate for the very high cost of manufacturing in the U.S. Batteries. Batteries, the story is quite similar, but some nuances there. Our cell pack suppliers are still in China, and we are going through a globalization effort on batteries to diversify that. Basically, we are well into the process of sourcing cells, non-China cells. We expect to have non-China cell pack shipping early next year. In terms of manufacturing of batteries, we bring in the cell packs from China, but we make most of the other components in Arlington, Texas. Approximately, I would say 30%-40% of our overall battery shipments come from Arlington, Texas today. That's relatively new, starting in Q1 of this year. Next. Advancing a sustainable future for all. This is what we do by definition. What we ship basically reduces carbon footprint. The one figure, only one figure I'm going to point out is 107 TWh of clean energy production. It's a cumulative estimate based upon all the Enphase system managed data from 2006. It's a big number. Right. Next. Our strategy hasn't changed. Build best-in-class home energy systems, which is microinverters, batteries, and deliver them to homeowners through our installer and distributor partners, enabled by a comprehensive installer platform. What do I mean by best-in-class home energy system? You can see there the IQ microinverters. You can see the IQ Combiner. That basically houses the gateway along with any combination of the PV circuits that come in. System controller. That basically isolates the home from the grid and the battery, of course. You also see the IQ EV Charger there on the right, and the Enphase App, the Enphase Cloud. That is what we call as the Enphase Energy System. Okay. Next. Go back to the previous one. I want to point out to you, this is what our fourth-generation battery is going to look like. That is the fourth-generation battery. You can see that the wall looks kind of empty now. The battery is on the right-hand side. That is a box of 10 kWh. The one in the middle is the combiner box that basically combines solar and batteries. And then you have, if you carefully look at the meter, there is a meter collar there. The meter collar is the way our—it's a backup switch. Basically, there's a relay in the meter collar that will open in the event of a grid outage. Our system is substantially simplified. This is the fourth-generation system we are going to start shipping imminently. Next. Before that, a quick recap on our microinverter portfolio. World's first grid-farming microinverter. What does that mean? This microinverter produces power even in the absence of the grid, as long as sunlight is still there. It can do sunlight backup. It can provide power even when the grid is not there. Up to 384 W, residential market shipping to 58 countries worldwide. Most notable recently is Japan. IQ9 is coming. IQ9 will be 10% higher AC power. IQ9 will use gallium nitride technology. IQ9 will have two flavors. One, basically an incremental from the 384 W, and then one which is higher than the 480 W that we have now. Okay. Next. This is another microinverter that we have in the IQ8 family that takes up the power a notch, 480 W AC power. This is for emerging markets as well as the small commercial market. If you see all of the residential market in emerging countries, the version of this in IQ9 would be a 548 W microinverter. There is one more very important thing in the IQ9 space, which I will cover now, is historically we have not played in the 480 V three-phase market in North America. With IQ9 and with the GaN technology, we are able to make a 480 V three-phase small commercial microinverter. That is the bulk of the small commercial market. All of that will be made in the U.S right here. That will be available by the end of the year. Next. Just quick recap on the batteries. The one on the left is a First Generation and Second Generation Battery. The First and Second Generation with the identical functionality but slightly different form factors. The one on the right-hand side is the Third Generation Battery. It is a 5 kWh battery with double the power of the first and second generation. Recently, we added three-phase backup. Big deal. For all the European countries, three-phase backup is necessary. For example, even in Australia, in India, other emerging markets, three-phase backup is a requirement now. We started shipping three-phase battery with backup early this year. Next. This is the fourth-generation battery that I talked about. The fourth-generation battery, what is the key thing? It makes backup seamless with the meter collar. The 10 kWh battery, nice power, 7 kW of power. No system controller required because now you have a compact collar, 30% more energy density than the prior battery, 62% lesser wall space than the prior generation. LFP chemistry as usual. No dangerous high-voltage DC. We operate at low-voltage DC paired with the collar and combiner, 15-year warranty. We have completed testing with PG&E and several other utilities. That is coming imminently. Next. We recently made two press releases. One is for Germany and the other for Belgium. We are actually shipping the balcony solar product to Germany and Belgium. Cool product. Basically, in Germany and Belgium, you can feed up to 800 W AC into a wall socket. We can do exactly that. On our balcony gateway, we also have another auxiliary socket, which can support additional appliances. Let us say that the grid power goes out, then the power will still be available in the auxiliary socket of the balcony gateway where appliances can be plugged in so that they can stay powered even during a daytime grid outage. We are going to roll that out to all countries in Europe as well as emerging markets. You can consider this as a small solar system there, anywhere from two to eight panels. Okay. Next. We introduced the IQ Power Pack 1500. It is starting to gain traction right now. Energy security for the home, very important for places like Puerto Rico right now. Energy on the go. This is when you are off-grid. Again, the same philosophy. You can call this as an Enphase in a box. It is lithium iron phosphate chemistry, 1.5 kWh. Nice peak power, nice continuous power. It is connected to Wi-Fi as well as cellular. It's got a lot of ports for you to connect, and it's currently shipping to the U.S and Canada. This is starting to do well for us. Next. Just go back to that. Just to highlight, we are going to now extend this power pack into various countries, and we are also going to have AC power pack extensions so that you can buy an AC pack extension for this main unit. Each would be a 1.5 kWh extension. Next. The IQ EV charger is a good story as well. We just started shipping our second-generation IQ EV charger to Europe, to 14 countries in Europe. 22 kW, three-phase. It can do green charging. It can switch between three-phase and single-phase. That's important, especially in Europe where not enough PV may be available in order to do three-phase. At that time, it can switch to single-phase, charge on single-phase, and then switch back to three-phase. Dynamic load balancing. If your home consumes a lot more power, the EV charger can throttle itself to consume less. The MID meter is required for basically accounting for office-based EV chargers. OCPP, of course. The last one is a very interesting case as well. There is the concept of AC bidirectional, which is the inverter is already in the car. The car can provide AC to charge the home. This charger provides 15118 support for that. Okay. Next. Bidirectional EV charger. Now, here I'm talking about where it's a DC, meaning car provides DC, and there is an extra box that takes 1,000 V DC from the car and converts it into 240 V AC for the home. That's this product. This product will also use GaN fully, and we expect to introduce this product in 2026. Next. In the home now, homeowners have solar. They have batteries. They have EV chargers. They have heat pumps. How are they going to get all of these working? They have third-party EV chargers. Many in Europe have third-party heat pumps. They have solar systems, storage systems. Things can get confusing. What we have is IQ Energy Management, which will support third-party EV chargers and heat pumps. It'll bring it into our app so homeowners can only use the Enphase App. They can use the Enphase App, and they can see everything about their EV charger, about their heat pump, about solar and storage, and they can have everything working in concert. This is a big deal. As systems get complex with these four things, this becomes a requirement. Hot water heater compatibility is another big deal. For example, in France, there are hot water heaters everywhere. In France, for people who only have solar, it is not very lucrative today because there is feed-in tariff. Feed-in tariff means whatever PV you export to the grid is not compensated well. You do not want to export any PV. Therefore, you want to conserve PV. The conserving PV can be done many fronts. You can add a battery, but you can also steer the PV to a hot water heater that you already have in the home. We are introducing hot water heater compatibility there so that the self-consumption for people with solar only is substantially increased and their savings goes up. Next. The Enphase installer platform, this one I will cover briefly. Lead management, we did an acquisition called Solar Lead Factory, which we do provide leads to our installers. Solargraf, this is a design and proposal software. We have around 1,000-plus installers on this platform. We help them generate design and proposals. It's also connected to various financing platforms. Solar graf has got an auto permit plan set where you can generate your permit plans in very quick time. The two, three, and four are all Solar graf. We have enhanced Solar graf in the last three years quite a bit. We have the Enphase Installer Toolkit where our focus is on improving commissioning time of our solar and storage systems. Of course, operations and maintenance is we bought another small company called 365 Pronto, and we are helping installers with their O&M services with the Pronto Platform. Our focus is on ease of doing business for installers and these tools, all of them from start to finish. They aim to provide that. Okay. Next. Just to recap, basically, we talked about technology. We talked about the semiconductor architecture, semiconductor software, AC coupled architecture. We have over 400 patents globally, innovative products. That is our lifeblood. Innovation is our lifeblood. Solar, storage, energy management, EV chargers. That is what we are about. We service a big market, a $25 billion SAM. That number is going to grow as we enter into the small commercial market with IQ9. That number will be up a notch. We are looking forward to that. That is it. Now I will take questions. As a reminder, to submit a question, please use the Q&A tab at the top of the Teams app. We've turned off your microphones, and we'll only be taking written questions, and we'll try to respond to as many as possible. Okay. Are there upgrade paths for current owners with older systems minus from 2018? In that case, can the old inverter be recycled? Yes, the older inverters can be recycled. Yes, there are upgrade paths. We do have programs where we upgrade customers from older M-series or even IQ7s and replace with IQ8. I would have this person get in touch with us. We can take care of these. Recently, I'm happy that three or four years back in the shareholder meeting, there was a question on how can I make IQ, you're introducing IQ8s, but they are not compatible to IQ7s in the same string. My answer four years back was we had not planned it, and we wanted to introduce IQ8, but I am happy to say now that our team has worked hard on it. We just did a press release last week where IQ7s and IQ8s are compatible to each other now with the latest software and on the same string. That means that if you have a system with IQ7 microinverters, if you want to add three or four more, you can easily add it to an existing string. You do not need another gateway. There is no complexity there. Anything else? Okay. Gotcha. Any other questions? Yeah. Yeah. It seems like one of your significant advantages is the innovation, the technology that you have, the R&D. As you said, it is getting a little more complicated with the integrated energy management system and all the new products. Sometimes it can be hard to articulate that advantage in a simple message to both the distributors and your customers. Have you guys thought about investing a little bit more in marketing or messaging to try to simplify that message and the advantages that you have in the marketplace? Yes. Yes, we do. The way we go to market is through our installers. Installers are the ones who are sitting at the kitchen table, and they basically articulate the value proposition. For us, it is all about the installers, training the installers to make sure that they are positioned to sell this value proposition properly. In addition, the Solar graf tool that I showed you actually incorporates all of these elements so that they can show a proposal in 10 minutes to the installers saying, "This is what happens if you have a battery, if you have solar, if you have your third-party, if you have your third-party EV charger, third-party heat pump. If you have this, this is how much money you can save." We do not do, yeah, of course, we do not do enough homeowner marketing. However, we have a huge installer network. In Europe alone, I am probably stating from my memory here. We work with 10,000 installers there. We find that the clearer that they are, the higher the probability of a sale is because homeowners are confused by, "I have so many options. So many options." They're not going to make those decisions lightly, meaning they're going to shop around. They're going to understand the details and everything. There's nothing like an installer coming and saying, "This is the best in the market. This is the best in the market. This has got—it's a one-stop shop. It's one company for everything. It's 24/ 7 open. It's got solar. It's got storage. It's got EV chargers. It can manage your heat pumps. It can manage your third-party devices." Here is the value proposition. That's our strategy. I think it's also with another point that Badri made earlier, and that is he went into detail in the microinverters. He went into detail in the batteries. He went into detail in the AC coupling. Most homeowners don't relate to that. That's where that software-based core comes into play. That basically softens and simplifies everything that the homeowner has to deal with. From this app, I can load balance. I can turn my system on, off, change it, whatever the case may be. I think that that value is actually the most important value from the end user standpoint. All the points he was making about the technology, etc., etc., the installers use that because they have to have the second-order understanding to be able to tell the customer how this works. Really, as a homeowner, the app softens all this and makes it extremely easy. This is the integration of all that technology. I understand that as a long-time investor, right? I see it as huge value. I have worked for premier technology companies that have superior technology. At times, it's been hard to simplify that message and translate that message down to the homeowner and down to the distributor and down to the installer. I think that's something you have to keep working on and refine that message. You do have to refine fresh sauce and boil it down, boil it down, boil it down until it's like one, perfect. Everybody's articulating the same message. We have a very good training team. That's their job, is to basically make sure things are bone simple for installers. Yeah. Go ahead, Nilu. I would like to help you understand a little bit this problem because this is also, for me, essential, both as a shareholder but also a partner of Enphase. If we remember the beginning of the 20th century, there was a debate between Edison and Tesla about which type of current is going to be used. AC, DC. AC won. In one sentence, what Enphase does is the following. Enphase delivers distributed solar systems based on AC current. None of the other companies in the world do that. Enphase is the only company that actually delivers a system or solar system with AC current from the PV module. None of them actually—SolarEdge, Tesla—all of them are DC companies. Why is this important? This is important both from the efficiency point of view, from the safety of fire hazard. Also, when you talk about homeowners, it is more natural to have already AC in the house instead of having the DC system, which is not as efficient. I think this is one—my advice, Badri, if I may, as a shareholder, we need to underscore more because that's a simple message in explaining the rest. On the other hand, the other important thing is the following. I was talking to Badri about this thing. Enphase is not necessarily a solar company. Enphase is a semiconductor software and cloud company with applications in solar. That's extremely important. Another thing which is extremely important, Badri, underscore that we're talking about one single SKU. All the other vendors—Tesla, SolarEdge, European guys, Huawei, which is actually in Europe, very important—all of them have different types of inverters for different types of installations. This is what I would like to—but again, this is my advice—to talk to analysts for them to understand the difference between Enphase technology and the rest of the world. It's kind of the same difference between if you want personal computers, smartphones, and mainframes—Enphase is on the side of distributed computing, smartphones, personal computers versus all the other vendors who are still stuck in the mainframe era. I understand that. that. Thank you. Thank you. There is one other question. Okay. In the U.S., what is the current payback period for the average homeowner who invests in an Enphase system? How has that changed from 2020, and where do you see that in three years? Basically, around, let's say, 2020, when the interest rates—2021, 2022, actually—when the interest rates were low. At that time, the payback period in California was around three to four years. The payback period in Texas, Florida, all of them were under 10 years, maybe around 8 years. After that, post the interest rates, the interest rates going high, what has happened is the payback period has now gone a little beyond 10 years in Texas and beyond 10 years in Florida. Why? Because, I mean, it's relatively simple to follow, is with the interest rates, with the interest rates being high and with the electricity rates being not so high in Texas and Florida, the monthly payments are too much. It doesn't pay back your system in less than 10 years. In all of the places where the utility rates aren't as high, the payback has significantly—meaning payback period has significantly increased as of today. That's why those states like Texas, Florida have seen the demand fall. On the other hand, in the East Coast, the rates are not as high as California but still high. Those are still okay today. Payback period less than 10. California right now, with NEM 3.0, the payback is between six to seven years in California. Does it make sense? The utility rates are high. They really are. The really are. The utility rates may get higher. Solar plus batteries avoids you to import electricity from the grid. That is the question there. How has that changed and where do I see it in three years? In three years, I see the utility rates continuing to go high. I do see that. I do see the payback situation getting better and better. Okay. As a shareholder, I'm very interested in how Enphase is mitigating the risks of the proposed ITC rollback. How does the dynamic tariff currently looking lower than envisioned at the last earnings call affect pricing? The first one, just for the people who do not follow that question. There has been the reconciliation bill draft came out on Tuesday. What that—well, the positives from that are keeping the 45x credit. The negative is elimination of the residential tax credits for cash and loans, effective 2026. That is what this question is about. This is obviously not good at all. Not good at all. We are going to fight against this. A lot of our installers, they rely on cash and loans. We got about 10,000 installers in the U.S. I would say maybe the composition of business is cash and loans amount to about 40% of the business today. Lease is about 60% today. That 40% is handled by thousands of installers. It is going to create a problem with jobs. A lot of companies are going to face tough circumstances. The solar market, it's going to be turbulent for a while because it has been done abruptly. Long term, I'm also not a believer in subsidy. I don't want subsidies for the long term. When you do something so abruptly, you're going to have several installers go out of business. That is what we are going to be talking about, an intelligent phase-out. It's a phased approach for the residential tax credit. That is what we'd like to have. We are going to lobby, along with several industry advocacy groups which are coming together and do. I'll also pivot to saying one more, that we are agnostic to any channel. We do business with lease providers. We do business with cash. We do business with loans. We don't fake anybody like that. We do business with many lease providers too. When the market moves to that, let's say in 2026, we are confident that we'll get our fair share there. More lease providers are going to come into the mix. While we think it is going to have a disruption for the short term because of the abruptness of it, long term, I don't expect any big problems. Also, one more important thing is when you have the lease providers, they actually own the asset. For the lease providers, the asset is very important that it's of good quality. They want the asset that they own to be of good quality, to have limited, meaning lesser operations and maintenance. That is where our quality comes in. We are the perfect target for somebody who wants a very high-quality product so they can have it as an asset without much maintenance because we do everything for them upfront. Definitely, in the short term, it is a little bit abrupt. We are going to fight against that. In the long term, we think we do not expect any material benefits for us. Would it ever make sense to acquire a leasing entity, a subsidiary of Enphase? If you think about it, I mean, I look at all problems long term. If we do it just because of the tax credit, this problem is going to happen again in 2029 because it is going to phase out. For the lease providers, it is going to phase out in 2029. Ultimately, what is the solution to it? It is innovation. The cost of solar is $3 a watt. Homeowners pay $3 a watt here. They pay $0.70 a watt in Australia. They pay $2 a watt in Europe. We have to figure out through both business process innovation as well as technology innovation to get that as an industry to a low number so we can mitigate the effects of these subsidies. That is what needs to happen. All things being equal, these companies do not have the ROI that Enphase Energy has. Yes. Yes. On average, it would drag us down. How does Enphase persuade installers who carry both Enphase batteries and Tesla Powerwall to truly represent a clear advantage? To an unknowledgeable homeowner, it is easy for a motivated installer to convince that Tesla Powerwall is cheaper because the homeowner does not understand peak power and the clear safety benefit of lithium iron phosphate chemistry. In fact, our installers, they understand everything properly. They understand everything very well. They sell the benefits of Enphase versus competition. I'm not going to talk much about Tesla. What has been a problem, or I would say an opportunity with our third-generation battery is grid. People buy batteries. I mean, most people buy batteries because they save money. Okay. Therefore, the batteries can have two configurations. Spend very little and get a grid-tied battery which has got no backup. That is true in all of Europe, by the way. That's how Europe operates today. Or go through a little more pain, but it's worth it to have proper backup. Size your system correctly, size your loads correctly, and all that. We do well in one kind with the third-generation system, which is grid-tied batteries. In our third-generation system, the cost of backup was a little bit high because of the extra components. Now we have eliminated that completely with the fourth-generation system. We have eliminated the system controller. We have eliminated the labor there. We have eliminated, with the meter collar, the labor portion becomes very nice and simple to add backup. The cost delta also is very less between no backup and backup. The installers have been asking us for it. Now it is there. We are confident they will sell the value proposition very well. We have had installer summits in the last month. Maybe we would have introduced the fourth-generation system to probably 500-600 installers already in the last month. The reception is very positive. Let me take one last question. Yeah, one last question. What are the hurdles to balcony solar for the U.S? Utah has solved a hurdle here, which is Utah is now allowing, there are certain restrictions that are still there, but they are now allowing 1.2 kW of AC to go into the grid. This needs regulatory hurdle to get solved, but it is now starting with Utah. In Europe, for example, 800 W of AC can be exported to a wall socket from a balcony solar system. We expect other states to soon follow the lead from Utah. We are going to be ready. We already have balcony solar now. We just introduced it in Germany and Belgium. We are going to introduce it in all other European countries and emerging markets because it is really a small system. That is it. We will take this question as well. What's the install time difference between string inverter and microinverter for a typical project with pre-attaching panels to micro speed-up installs? Labor is very expensive. For TPO installers, they could install more houses in a day. Why not look into it? There isn't material difference between installing a string inverter and a microinverter. String inverter is high-voltage DC, so it comes with its own challenges. Microinverter is AC. It is all plug and play. If you've ever installed an Enphase system, it is not complex at all. It is plug and play. The AC cabling is a nice trunk cable, therefore. The microinverters are easy to handle. They can be plugged in. That has not been an issue at all. In terms of pre-attaching the panels to the micros, we have tried that. That's called AC modules. AC modules was a good concept. It saved a little bit. It saved a little bit of labor. However, the downside with AC panels is the versatility, which is basically the installers want the ability to use whatever panel they want and whatever microinverter they want. If you want them to attach it to the panel, then you kind of lose all the benefits that you get in a factory-assembled AC panel. For that reason, it is not taken up. Also, you can understand that it's really not much value creation is there because you aren't fundamentally changing any hardware. You're simply attaching the microinverter to the back of the panel. The value that is generated, it isn't very high. For that reason, although we sold quite a bit of it early, it didn't take off that much. Thank you for your attendance today and for your continued support of Enphase Energy. This concludes our meeting. Thank you.