Today, thank you for standing by. Welcome to the Fluence Energy Inc. Q2 2026 Earnings C onference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Chris Shelton Vice President of Investor Relations. Please go ahead. Good morning, welcome to Fluence Energy's second quarter earnings call. Joining me on this morning's call are Julian Nebreda our President and Chief Executive Officer and Ahmed Pasha our Chief Financial Officer. A copy of our earnings presentation, press release, and supplementary metric sheet covering financial results along with supporting statements, schedules, including reconciliations and disclosures regarding non-GAAP financial measures, are posted on the investor relations section of our website at fluenceenergy.com. During the course of this call, Fluence management may make certain forward-looking statements regarding various matters related to our business, including, but not limited to, statements related to our future financial and operational performance, future market growth and related opportunities, anticipated growth and business strategy, liquidity and access to capital, expectations related to pipeline, order intake, and contracted backlog, future results of operations, the impact of the One Big Beautiful Bill Act, projected costs, beliefs, assumptions, prospects, plans and objectives of management, and the timing of any of the foregoing. Such statements are based upon current expectations and certain assumptions and are therefore subject to certain risks, uncertainties, and other important factors which could cause actual results to differ materially. Please refer to our SEC filings for more information regarding these risks, uncertainties and important factors. You are cautioned not to place undue reliance on these forward-looking statements which speak only as of today. Also, please note that the company undertakes no duty to update or revise forward-looking statements for new information. This call will also reference non-GAAP measures that we view as important in assessing the performance of our business, including adjusted EBITDA, adjusted gross profit and adjusted gross profit margin. A reconciliation of these non-GAAP measures to the most comparable GAAP measures is available in our earnings materials on the investor relations website. Following our prepared remarks, we will conduct a question-and-answer session with our team. Thank you very much. I'll now turn the call over to Julian. Thank you, Chris, and welcome to everyone joining us today. Turning to slide 4. Since our February call, we made meaningful progress on order intake, our U.S. domestic supply chains, and our product roadmap as we position Fluence to capture expanding global demand for energy storage. Our business model keeps us close to customers, so we can anticipate their needs early and respond quickly with the right products, applications, and commercial structures. This morning, I'll highlight our momentum across the business, and then Ahmed will review our financial results for the quarter and our current fiscal 2026 outlook. Here are the key highlights for the quarter. First, order activity is accelerating versus fiscal 2025. As of today, we've signed approximately $2 billion of orders this year, which is double the amount signed through the same period last year. Our record backlog was $5.6 billion at the end of the second quarter. We expect it to grow further based on execution so far this year. Second, second quarter adjusted gross profit margin was 11.1%, which is within our full-year expectation of 11%-13%, a meaningful improvement versus Q1 and more reflective of the disciplined execution we deliver historically. Third, based on our first half performance and visibility into the remainder of the year, we are reaffirming our fiscal 2026 guidance for revenue, ARR, and adjusted EBITDA. Fourth, we ended the quarter on March 31 with approximately $900 million of total liquidity, reinforcing a strong financial position. Please turn to slide 5 for more details on order intake. Our expanded commercial effort is translating to stronger conversion into signed orders. During the quarter, higher lithium prices temporarily slowed some customer decisions, but momentum re-accelerated as prices stabilized. For third quarter to date, we have signed over $600 million of additional orders. For the first seven months of this fiscal year, order intake totals approximately $2 billion, we expect the total for all of fiscal 2026 to significantly exceed the level from fiscal 2025. Most of the orders these years have come from our core customer segment, developers and utilities. It is important to note that 50% of our orders this year come from new customers, a signal of the early results from our expanding commercial effort. Please turn to slide 6 as I detail our progress with new customer segments. Since our February call, we executed master supply agreements with two major hyperscalers. The selection process for both of these MSAs was subject to multiple rounds of review. In each case, Fluence was chosen after meeting criteria specific for each customer. In one case, the customer's process began with 26 different best vendors. Fluence was the first to complete all qualifications to sign a global MSA. In the other case, the customer had requirements which made it hard for many competitors to comply with. In both cases, we believe Fluence's understanding of customer requirements, rapid response time, and differentiated products were key in driving this engagement. These MSAs established Fluence as a qualified supplier, positioning us to bid on expected near-term data center projects for both hyperscalers. With the additional progress with one of these customers over the past few months, we expect to sign the initial order from one of their data center projects within the third quarter. In addition, since our prior call, we have successfully developed a proprietary solution to handle the extreme power usage fluctuations experienced in data centers. Fluence excels at this based on our deep experience with advanced controls and track record managing fast response systems. Based on our discussion, we believe these capabilities will be an important differentiator for data center customers concerned with quality of power. Finally, we're seeing increasing interest in SmartStack for applications requiring longer duration energy storage. SmartStack density provides a competitive advantage for these applications because of its smaller footprint. Please turn to slide seven as I discuss our growing pipeline. A key piece of our commercial strategy has been the growth of our pipeline, which has increased by 35% so far this fiscal year. We're seeing opportunities in the U.S. market beginning to outpace our other markets, with projects concentrated in California and Arizona, as well as the MISO markets in the Midwest. Most of the growth is from our core customer base, as I mentioned earlier, but also in part by new customer segments, including data centers and other large energy users, increasingly adopting storage solutions. Since our last call, our data center pipeline has increased by over 30%, including projects from both major hyperscalers I just discussed. We expect data center projects to make an increasing contribution to order intake during the fourth quarter of this year, building on the initial order we expect in the next few weeks. Fluence's business model is intended to keep us close to customers, which we believe puts us in a privileged position to spot evolving needs early and to respond quickly. That insight informs our product design, the applications we support, and the technical, operational, and commercial terms our customers require, backed by a sales organization with deep, long-standing relationships. In short, we have positioned Fluence to be on the leading edge of BESS. We view the components we use as commodities, which we integrate into finished products to meet customer needs. Combined with our long-standing technical expertise and hands-on experience and our deep understanding of different markets around the world, we believe Fluence is uniquely positioned to deliver and help our customers maximize the benefit of investing in battery projects. We have evolved our product to accommodate a growing number of customer demands, including market-leading density, digital solutions optimizing operations and profitability, reduced total cost of ownership, large-scale fire testing, and industry-leading reliability. Fluence was also the first to offer a complete U.S. domestic supply chain, an important advantage for our U.S. customers. We offer a one-stop solution from early project development through delivery and installation, and continuing over the full operating life of each project. We combine in-house EPC expertise, with a dedicated service organization that optimizes performance and extends asset life, resulting in industry-leading operational methods. Please turn to slide nine for an update on SmartStack. Product innovation remains another key differentiator for Fluence. SmartStack sets the industry standard for energy density, enabling customers to fit more than 500 MWh of storage per acre, with additional improvements planned. We designed SmartStack to lower total cost of owners through modular architecture, easier maintenance access, and more than 98% reliability, delivering more electricity and more value to our customers. Its flexible design supports a broad range of cell types across multiple manufacturers, including pouch cells commonly used in electric vehicles. Importantly, SmartStack packaging and modular architecture addresses the density challenges typically associated with pouch format in stationary storage. I'm pleased to report that our first SmartStack has reached substantial completion and commenced commercial operation. Our growing SmartStack backlog reflects the smart, strong interest in our product. Please turn to slide 10 for an update on our domestic supply strategy. As I just mentioned, we recognize the importance of our U.S. domestic supply chain early. Today, we have U.S. production for all major components, including battery cells from our supplier in Smyrna, Tennessee, which has been operating since 2025. Building on our existing U.S. supply, as we announced in February, we signed an agreement with another source of domestically produced battery cells beginning in fiscal 2027. We believe this incremental capacity strengthened our supply position and supports delivery against our growing order book. We're also evaluating additional supply options to help support Fluence growth beyond 2027. Our current position gives us flexibility as additional proposed U.S. supply comes online. Based on our experience, converting EV battery production to BESS cells can take a year or more. When exploring additional proposed supply lines, we plan to evaluate each facility's timeline to first production, its ramp speed, its technical characteristics, and how its location could strengthen and optimize our current U.S. domestic supply network. Let me also update you on FEOC compliance for our cell supply in Smyrna, Tennessee. AESC closed a deal to sell a majority interest of its facility to Fixx Energy, a subsidiary of Longroad Energy. Ownership changed hand on March 31, 2026, and the facility continues to produce cells that qualify for tax credits under the One Big Beautiful Bill Act. We moved quickly to establish a relationship with a new owner and have signed a new supply agreement covering the next few years. We are confident in their plan to sustain the strong production level we've seen this year. Looking ahead, we believe we're well-positioned to benefit from growing diversity in U.S. cell supply and the impact additional capacity may have on battery pricing. Internationally, we competed in markets that have seen meaningful declines in average sales prices for several years, and those lower prices expanded demand by enabling new applications. It's reasonable to expect similar dynamics in the U.S. Importantly, we have executed successfully through the inflationary pricing cycles before. With an approximate 50% decline in ASPs over the past two years, we more than double our adjusted gross margin. Although we expect ASPs to continue to decline for the balance of fiscal 2026, we are forecasting approximately 50% revenue growth with adjusted gross margins in the range of 11%-13%, reflecting the strength of our execution and operating model. To conclude, we're seeing accelerating demand, improving execution, and expanding opportunity across both our core and emerging customer segments. With a record backlog, a strengthening U.S. domestic supply position, and a differentiated product platform, we are committed to delivering for customers and creating long-term value for shareholders. With that, I'll turn the call over to Ahmed to discuss our financial results. Good morning, everyone. Since our previous earnings call, we have continued to capitalize on strong demand trends in our industry while maintaining a disciplined focus on delivering on our fiscal year 2026 commitments. We also maintained a strong liquidity that provides us flexibility to execute on our growth expectations. More specifically, starting with slide 12, we generated Q2 2026 revenue of $465 million, up 8% year-over-year. Approximately $80 million of revenue was pushed into Q3 due to two issues. Specifically, roughly half was attributable to a customs issue in Vietnam, with the remainder due to shortage of loading equipment in Spain. Both issues have since been resolved. The delayed shipments have been received. We are current on the quarter's deliveries with no further delays. To confirm, we do not have any material exposures to the Middle East conflict, as none of our shipments utilize the Strait of Hormuz. Our adjusted gross profit for the quarter was $51 million, representing an adjusted gross margin of 11.1%. This result is within our full year expectations of 11%-13% and reflects a meaningful improvement from the first quarter level as well as comparable quarter for FY 2025. The primary driver of the improvement was consistent execution and operational discipline across our portfolio. Adjusted EBITDA for the second quarter was negative $9 million, an improvement of $21 million compared to the second quarter of last year. The improvement reflects higher gross margin, lower operating cost, and $6 million gain from unwinding an FX derivative. This offset is a $6 million loss on the same FX derivative recorded in the first quarter of 2026, with no net year-to-date impact. Turning to slide 13 for an update on our adjusted gross margin progression and how disciplined execution translates to returns for our stakeholders. As you can see, our rolling 12 months adjusted gross margin is 12.4%, marking two full years of consistent double-digit returns. We believe this progression underscores the durability of our margin profile, even in the dynamic pricing environment. Importantly, it reflects the product, commercial, and supply chain actions we have taken across the portfolio. These actions position us for continued margin improvement beyond this year. Turning to slide 14 for an update on our liquidity position. We ended the second quarter with total liquidity of approximately $900 million, which includes approximately $430 million in total cash. During the quarter, we invested $220 million in inventory to support deliveries that underpin our second half fiscal 2026 revenue. We will invest approximately $100 million in inventory during Q3 to support second half deliveries. Liquidity is expected to return to $900 million levels by the fiscal year-end, driven by execution on our backlog and new orders. Bottom line, our liquidity position fully supports delivery of our fiscal 2026 commitments. Turning to slide 15 for our fiscal year 2026 guidance. We are reaffirming our guidance ranges for revenue, ARR, and adjusted EBITDA, reflecting our strong visibility into the year and continued momentum we see across our business. More specifically, we expect revenue in the range of $3.2 billion to $3.6 billion, with a midpoint of $3.4 billion. We expect approximately 70% in the second half, consistent with the weighting of revenue last year. We expect roughly 30% of second half revenue in Q3 and the remainder in Q4, again, consistent with last year. With all equipment ordered and production tracking as planned, we are confident in delivering on our customer commitments and our full year revenue goals. We expect annual recurring revenue, or ARR, to reach approximately $180 million by the end of fiscal 2026, up from $148 million in fiscal 2025. We continue to expect adjusted EBITDA in the range of $40 million to $60 million for the full year. In summary, we are committed to achieving full revenue and profitability outlook for fiscal 2026. We remain laser-focused on ensuring disciplined execution for our customers and delivering value to our shareholders. With that, I will now turn the call back to Julian for his closing remarks. Thanks, Ahmed. Let me close with a few key takeaways. First, strong execution. Our second quarter performance, record $5.6 billion backlog, and on-track production levels support our confidence in our fiscal 2026 guide. We ended the quarter with approximately $900 million of liquidity, which we believe provides us with the flexibility to fund growth. Second, order momentum accelerating. Order intake has doubled year to date, led by orders from both new and existing customers, an indication of strong demand in the U.S. and the positioning of our business. Third, e xpanding customer base. We are in an excellent position to capture a portion of the rapidly expanding data center demand with the signing of MSAs with two major hyperscalers after meeting all of their commercial and technical requirements. We expect to execute the first purchase order with one of these customers within the third quarter. In conclusion, we are positioning our company to continue profitable growth and to deliver value to our customers and shareholders. With that, we are now prepared to take your questions. Thank you. Thank you. At this time, we will conduct the question and answer session. Our first question comes from George Gianarikas from CG. Your line is now open. Hi, everyone. Good morning, George. Good morning. Good morning. Thank you for taking my questions. My first one is on the competitive landscape. You know, how are you viewing the recent trend of some cell manufacturers vertically integrating? Specifically, you know, how are you looking at their push for market share and any impact on pricing? Thanks. We have seen both CATL and BYD become, come and integrate vertically. We have not worked in the past with BYD, but we have worked with CATL. It hasn't really changed the intensity of the market, if you tell the truth. The value, the ability to meet customer needs at a reasonable price hasn't changed effectively. We continue. We're growing our backlog. We're growing our winning projects the same as we are. So we feel confident it hasn't really made a big difference in the competitive environment. We attracted 50% of our new sales are new customers. We are, I don't see it as a challenge. It's not so new, by the way. I mean, it has happened in the past. The change of CATL was big, but not a major change in the competitive landscape from our point of view. Thank you. Maybe as a follow-up, first, you know, congrats on the two hyperscaler MSAs. You know, if you could You did this a little bit, but if you could pull back the curtain a bit on the mechanics of those wins. You know, specifically, what did the validation process look like, and what do you think was the primary differentiator for you that allowed you to win those? Thank you. Yeah. Two things. We went through a very strict commercial and operational and technical say evaluation. In one of the cases, there were 26 players. I will say the majority will not make it, you know. There's a limited number of people who could, or companies that could meet these very stringent requirements. Our ability, our deep knowledge, our, you know, deep experience managing fast response systems in Europe especially, and having the infrastructure and the technology capability to prove their case to them very, very quickly is what made a difference. You know, we have the labs, we have the technicians. We do this every day. We know how the applications work. We understand how the grid codes work globally, and that made a big difference that we were the first ones. We believe that will continue to be what will keep us ahead of the market. We are now, you know, some of our competitors are still trying to figure out how to meet the criteria. We're thinking how to exceed their, you know, what they need and trying to offer them more value and more capabilities, and that's what we bring to the table. Thanks. Thank you. Thank you, George. Our next question comes from Julien Dumoulin-Smith from Jefferies. Your line is open. Hey, good evening, guys. Nicely done. I gotta hand it to you guys, really. Kudos here on seeing it through. Thank you. Absolutely, Julian. Look, I wanted to ask you in particular here, as it pertains to hyperscaler orders, what specific product are they following up with you guys with? You know, I know there's been some ambiguity in the marketplace as to whether or not you have the right product and the product positioning for the hyperscalers. To get this kind of confirmation with two, as you guys just flagged in particular, is quite notable. Can you speak to the specific deployment permutation that they're using you guys with? You know, is it a BTM, FTM? Is it a capacity support, load shifting? And then also, how do they think about the domestic contents or FEOC compliance? You know, is that another nuance that we should consider? Just can you speak to the product and more broadly in these wins? Yeah Whether this is a leading indicator for further orders like this in coming quarters. Yeah. So on, in terms of what they're asking for, different than what I said in the last call when we're looking at portfolio that was a little bit more mixed. Now that we concentrated in these hyperscalers, their main need is quality of power, helping them manage the fluctuation of the data centers and helping us do it quickly and effectively. That's what they need, and that's what we prove with our advanced controls and our products. We can prove very quickly to them that we can do it. I will say, you know, if I can brag, better than anyone else, you know? That's what is driving this. If you go beyond the hyperscalers into kind of the developers world, it seems to be that they or not seems to be what we have experienced, more of, you know, speed to power and meeting, you know, grid codes and it's a little bit more mixed, but with these two hyperscaler has been quality of power they may ask. In terms of domestic content, it wasn't a requirement from them or something they were specifically looking at. I think that as we have explained today in the competitive position of domestic content, the, you know, value it can create and the tremendous branding opportunity of having a product that is built here by American, for America here, especially as these two hyperscalers, most of their business is in the U.S. I think they are, you know, seriously considering that part. Their objectives were meeting their quality of power, meeting their technical and commercial objectives, and that's where they concentrated on, and that's how we move it. In terms of these 2 MSAs, they have behind, you know, significant pipeline that we expect that within the next year will convert into, you know, the orders. We won't necessarily win them all, but it will be a significant amount of demand that we see behind this that we will convert. Having these MSAs gives us, you know, will put us in a very good position to capture it. This is a hurdle in order to compete. Not many people can do it, and I think gives us a stamp of approval that when we make an offer, they know that we will deliver what we're promising. Awesome, guys. Quickly, Ahmed, can you speak to the slide has this interesting commentary that says, you know, you're gonna invest additional in inventory during the third quarter, but you're gonna rebuild liquidity towards $900 million by fiscal year-end. When you say rebuilding liquidity, is that from the capital raise in some ways or is that just kind of organic cash flow? Julien, I would not read too much in between the lines there. I think it was more as we invest because we have roughly $2.5 billion of revenue in the second half, we will be delivering that. We're building up the inventory. As we deliver the inventory, we'll be collecting. At the end of the day, our liquidity will be back at $900 million levels by the end of the year, consistent with what we told you when we gave our guidance for the year. That was the intent there. Awesome. Just to clarify from earlier, how many other suppliers are MSAs with you guys? I mean, very, very selective, Julien. We, they all fit in my hand, I think, and I have fingers left, you know. We don't have the specific information, but we understand they are very, very selective. Very, very few people have been able to do it today. They might, you know, they're probably working on it, but let's see if they get there. Got it. All right. Awesome. I'll leave it there. Congrats again, guys. Speak to you soon. Thank you. Thank you, Julien. Thank you. Thank you. Our next question comes from Brian Lee from Goldman Sachs. Please go ahead. Hey, Brian. Good morning. Hey, Julian, good morning. Thanks for taking the questions. Congrats on the strong backlog here and the hyperscaler updates. I had a couple questions, I guess, on hyperscaler MSAs. Not sure how much you can provide, but would love to, you know, maybe get some detail around, you know, quantification of the size of the deals, how many MW, over what years, and is it over multiple sites that are already identified? Maybe just if you could elaborate a bit more on kind of the scope of these two MSA deals and how meaningful they are in terms of, you know, quantitative impact. Yeah. I'll tell you the majority or the grand majority of our pipeline is, you know, is supported by deals that are behind these two MSAs. These deals are, and that pipeline is several different data centers around that they have around the U.S. mostly. That's what it is. In terms of a financial, you know, and our current pipeline is 12 gigas, so that gives you a sense. We're not providing the financial numbers around it as it's too early, and we're competing, as you know, so we are not providing those numbers today. As my expectation is that as we end the fourth quarter and bring hopefully a good number of these projects, and I can offer numbers in a, you know, including everything and though not necessarily be providing commercial, I will provide you more financial metrics of this. Okay. Fair enough. Yeah, we'll look forward to that. Then maybe just, you know, zooming out a little bit, 'cause this is a new business for you and obviously very high growth potential. What's sort of the deployment schedule, I guess? Can you help us kind of, you know, visualize as you go into some of these, whether they're RFPs or bake offs, you know, what's the timeline for submitting your design and your proposal to, you know, when one is, you know, finalized and then when you get a PO to when you're gonna deliver to site, kind of what are the sequence of events and how long is that timeline? Yeah. They are in a hurry, generally. Most of these projects, as I said, well, I don't know if I mentioned, but the pipeline we have, we believe will convert into orders during the year, within a year, so quicker than generally we're in a pipeline that comes into our things. Very tight schedules for delivery that, you know, we can meet because you know, we've been working on our speed for some time. You know, I cannot give you today a specific rule, this is what I want, but generally, I'll say a lot faster than the conversion rate we have for our order, from pipeline to orders, and a lot faster of the conversion rate from orders to revenue than what we do in our normal utility and developer type of Especially with these two hyperscalers. The case of the developers, it's a little bit different, as those are more project type that they're looking for permits and stuff, those will probably take a little longer. Okay. Understood. Maybe last one, if I could squeeze it in, just on the gross margin bounce back. I know that's been a focus for you guys for a little while, so nice to see it back to the range. Even on the lower volume here in 2Q, you know, that was a pretty impressive gross margin rebound. What does that maybe entail for the back half of the year? Is there? Volume leverage and some of the efficiencies from this quarter that can spill over? Is there any potential upward bias to margins as you kind of move through the rest of the year? I'll give Ahmed to. Hey, Brian. In terms of the gross margin, you're right, an 11% gross margin we earned, which is higher than what we had in Q1. In year to go, we just reaffirmed our guidance where we said 11%-13%. We will be somewhere in the middle of that range for our year to go. I think at least that is our goal is about 12%. We will definitely be better than what we earned in Q2. Okay. Thanks, guys. I'll pass it on. Thank you, Brian. Thank you. Thank you. Our next question comes from Dylan Nassano from Wolfe Research. Please go ahead. Hey, Dylan. Good morning. Hey, how are you doing? Just wanted to check on the broader data center pipeline. Any updated thinking there in terms of, you know, how much of that kind of fits your previous criteria of pipeline versus leads? I noticed there's this, 6 GWh kind of target for what gets included. Just how did you come up with that number? Any, any thinking around there would be helpful. Thanks. Yeah. I'll tell you that our numbers for our pipeline and leads. Our pipeline went up like 30% from last quarter. We concentrated a lot on the hyperscalers, and so a good driver of that has been the hyperscalers, so roughly at 12 gigas. Our leads are three times that, you know. Generally the same as or close to what, or essentially the same that we had last quarter. We converted some into pipeline, and we were able to replenish. That's the rule. The 6 gigas, I don't know what you're reference to, Dylan, if I'm sorry. It's on slide 6 at the bottom. It says, "Classified assistance, 6 GWh or more. Let me check. In any event, strong growth, a great opportunity here, and I think that by concentrating on hyperscalers, if I can, you know, while we get the, the point on this, we are in a, in a market segment that we expect will transact faster and that we will convert into execution quickly. Yeah, Dylan, that 6 GWh, that's, it's not a pipeline. That's how we classify an LDES project, so anything over 6 GWh. Oh, okay. Sorry. Yeah, that's for- Okay long duration storage. Thanks for the clarification. Yeah, yeah. Those are long duration storage, so they need to be more than six hours, you know, to be long duration. That's the definition of long duration for us. For us, yeah. Yeah, six and more. Okay. That makes sense. Yeah. I didn't know what it was. Sorry for that. My mistake. I mean, it looks like revenue was kind of lower than analyst expectations, even kind of including this $80 million. I just wanted to check, was there any other seasonality in the quarter beyond or other disruptions beyond the shipping stuff that you guys noted? No, there was none. I think, if you recall, when we gave our guidance, Q4, we did say that about one-third of our revenue in the first half and the rest. Given, frankly, we don't give quarterly guidance, I think that was the only difference reason why there's a difference. Overall, from internal perspective, as I mentioned, you know, the $80 million of this shipping delay was the only reason why we were lower on the revenue for Q2, but that we have the shipment we have already received, so we feel pretty good on year to go. If I can add one point, our indication of where we see revenue divided among quarters is more indicative. You can model it and solve, but, you know, we don't run the company on a quarterly basis, to be very clear. We run it on a yearly basis. That's why we intend to meet our yearly numbers. We try clearly to what we indicate to meet it, but it's not, we do not provide quarterly guidance, Dylan. I know it creates some confusion, it's a way to try to help you model and at the same time give the flexibility to manage things effectively and efficiently within the company. Sounds good. Thank you. Thank you, Dylan. Thank you. Our next question comes from Joseph Osha from Guggenheim Partners. Please go ahead. Hey, Joe. How are you? Just fine. How are you? Thanks for taking my call. Yeah, I'm all right. Thanks. I wanted to drill down a little bit on two product details. You know, Julian, you said that hyperscalers and data center more broadly tends to be more about product quality or power quality. Is the implication then that we're seeing shorter duration configurations, say, you know, an hour or two as opposed to four? That's my first question. The second question, just to confirm, you know, thinking about the inverters, are you generally being asked to deliver a response time of 10 milliseconds or less? Those are my two questions. Thanks. Yeah, on the first one, they tend to be shorter duration, you're right. They are, you know, say we don't provide anything smaller than two hours. two hours is what we do. Ideally, that's where the market is trending, but they tend to be shorter than that. Even though our main point to the data centers, we engage with them and the developer and the hyperscalers, the great beauty of our technology compared to other technologies that are trying to resolve this, is that we can stack business models on top. We can do quality of power, help them with, you know, doing some of the work of resolving some of the deficiencies of interconnection or backup. We can help them on certain voltage. We can help them on many fronts. I think that as they're looking at the asset, they are expanding also their view of what this can do. That was the on that point. On the second one, generally, I would say that, sorry, the second one? Can we check? Yeah, it's just. The 10. Yeah, 10 milliseconds. Sorry. Got it. Sorry, got confused. No, the 10, because I was answering there. I said they we're not providing the actual number, but it's very short, you know? That's the way I would put it. You know, we're not providing the actual number because it is proprietary to the solution and to the people we're working with, but it is very, very short. Significantly shorter than 100 milliseconds we tend to do for transmission systems and European qualifications. Just to follow up on that very quickly, that would probably, I assume, create the need for inverters with, you know, wide band gap MOSFETs and some of the exotic stuff. Yeah. Yeah, yeah. You need inverters that can help provide that capability. That capability is very much dependent on the inverter you use. Okay. We work with inverter companies. We have done this, you know, in Europe for many years, we know exactly who do this, how they do it, and their strategy very well. You know, we have that. Our advanced controls work very well with these inverters and have the processing time to ensure the whole system responds on that, not behind the inverter as it's supposed to. Okay. Thank you, guys. Thank you very much. Yeah. Welcome. Thank you. Our next question comes from Jon Windham from UBS. Please go ahead. Good morning, Jon. Good morning. Thanks. Good Thanks. Good Thanks. Good morning, Julian. David. Nice result. I was wondering if you could talk about the U.S. storage market continues to grow at a rapid pace. Are you able to provide us sort of where you are on being able in sort of capacity in gigawatt hours to provide over the next 12 months? Just sort of thoughts on the roadmap to keeping up with the market growth over the next two or three years. We see the U.S. market growing, expanding significantly, that's great. What we have, as you know, we have our domestic products, our flagship solution in the U.S. We have the AESC capacity. We enter into with another supplier for additional capacity, and we are looking at additional capacity for the 28 going forward. We have enough capacity to cover our, you know, the pipeline we see and the conversion rate we expected. We don't provide specifically the numbers, but it's multi-giga capacity, we have seen no problems. We are putting the whole infrastructure that delivers that multi-giga offering in the U.S. with our domestic content offering. We can also import equipment if we need to, but our preference is to do the domestic content solution. Perfect. Thank you. Maybe just a quick follow-up. There's been a lot of commentary on the gross margin. Historically, some of the issue has been that operating, OpEx, as a percentage of revenue has basically been offsetting the positive gross margin. Just your thoughts on internal initiatives to get the OpEx number down to drive bottom line profitability and free cash flow. Thanks. Yeah. The operating costs are a percentage of revenue is essentially a function of growth of the top line. If you follow it carefully, you'll see that operating revenue goals, you know, it's very much followed. Our costs are very, very stable, and our, you know, how much of our cost represents out of our revenue depends on how much we can grow revenue. We have an operating leverage that we believe that we can grow this company, that we can keep our costs down at half the rate of growth of our top line, which adds tremendously value. You'll see it when you look at the numbers. It's very, very clear. It's an operating leverage, you know, formula. Yeah. Unfortunately, as you know, last year, we didn't grow. That's where the operating revenue, the percentage of revenue of cost of revenue was a little higher than what we expected. Our goal is. I appreciate that. I mean, our goal is that we basically create the operating leverage, and we do have that. As the revenue grows, we will maintain that cost discipline, and the cost will be reduced, increasing at less than half of the growth in our revenue, as Julian just mentioned. I think that's our key focus from my perspective. Thanks so much. Thank you. Thank you. Thank you. Our next question comes from Ameet Thakkar from BMO Capital Markets. Please go ahead. Hey, Ameet. How are you? I'm very well, thank you, Julian. Thanks for taking my questions. It looked like ASPs, if we'll get revenue and kind of your revenue recognition megawatts for the quarter were up pretty nicely, quarter-over-quarter. I was just wondering, was there a lot more EPC work this quarter, or is this kind of maybe of the level we should be thinking about for the balance of the year for modeling purposes? I've got one follow-up. Yeah. Thanks, Ameet. As this number, as you said, it moves up and down quarter after quarter based on the mix of the sales. So I wouldn't read too much on it, you know? We are assigned to meet our financial objectives independent of where the ASPs go up or down, you know. Our planning assumption's that they will continue coming down. We are designed to make money and make it successful. I'll say even more, when every time we have seen ASPs come down, what happens that demand expands at a rate that is much bigger than the reduction in revenue that comes out of the lower ASP. We, you know, I wouldn't read too much on it. I know that that's something that you care about a lot. I mean, the analysts care a lot about, but it is not a big driver of our business financial results. Great. I know you had mentioned earlier, in answering one of the kind of questions before, about the kind of your pipeline's 12 GW. Yeah, I think you said that the vast majority of that is data center related. Is that right? You know, is it a little bit over half or is it substantially all of that 12 GW pipeline is data center related? We have a 12 GW pipeline of data. All of it is 12 data center related. I said that a great majority was connected to the two MSAs that we just signed. The 12 GWh are all of it is data center related, of which the great majority, so more than 60. Okay. Yeah, or more, you know, a good portion of it, I don't wanna give a number, comes from the, supports these two MSAs we just signed. Understood. Thank you so much. Yeah, yeah. Thank you. Our next question comes from David Arcaro from Morgan Stanley. Please go ahead. Hey. Thank you. Hello. Good morning. I was wondering, are there other MSA opportunities that you're currently working on? Is that something that you would expect most hyperscalers to be, you know, pursuing on the storage front? Yeah. We are looking at it. These are the two that had more urgent needs and, you know, so but we're looking to work with all of them, you know. We believe their problems are similar, and that we can, you know, meet their needs, you know, with our capabilities. We hope to work with all of them, yeah. Yeah, makes sense. Any, are there any active now or any sense of timing as to when those opportunities might pop up? It seems like they're all very active on the data center side of things. Yeah. I imagine looking at storage, so is that also, you know, a near-term opportunity? I think that I cannot give you a real sense of timing of when they will happen, as it would depends on where they are and what they're doing. I mean, the two that we have signed are people who are very clear what they need. They're in a hurry to win, and they seem to be ahead of the market if you ask me. Yeah, you know, but we're working with everybody. We are contacting all of them, working with them, and they just these two are ahead. Got it. Okay, great. The 50% proportion of new customers I thought was notable. I was just wondering, could you give any characteristics of kind of who those customers are, what type of the customers they are? Is it the traditional profile of developers and utilities that you would see or any specific locations? Curious, curious if it's a new profile. I mean, I'll say this is a result of the great work that Jeff Monday, who joined us as our VP of Growth, has done since he arrived. He really has, you know, invested significantly in business development, identified all these customers, which are, you know, I'll say, were not the typical we used to work before, but are new developers or utilities that we have not contacted in the past, and now he has made significant progress. This is a global effort that we're doing, not only in the U.S., but outside of the U.S. You know. We, I will say that, as we said during the call, these are customers that are within our normal or our core customer segments, you know, utilities and developers globally. Great kudos to our sales organization that has really invested into developing and bringing these new customers in, into the mix. Right. Okay. Understood. Thanks so much. Yeah. Welcome. Thank you. Do I. Our next question comes from Ben Kallo from Baird. Please go ahead. Hey, thanks. Ben Kallo here. Hey, Ben Kallo. back on data centers. Hey, good morning. Could you just talk a little bit, you know, because of the specific product they're looking for and the size, if you could talk about just pricing and margin, how we should think about that on these bigger deals. Also my second question, just, you know, outside of the U.S., where do you see pockets of demand? Just remind us how, you know, margin compares internationally versus the U.S. Thanks very much, guys. In terms of data centers, I will say, as we said, duration shorter. I'll say the margin's in line with our, you know, our guidance of 10%-15%. That's what we'll say. Generally, that's what it is. And most of their needs are quality of power, which we do this for grids globally. We're doing for them here, and I think it works well. You know, very successful. In terms of margins change market per market. Depends on the competitive environment. As we tend, we go within our 10%-15% range, but there are markets that are a little bit more or they go through this more competition than others. I would say that, you know, markets like the U.S. and the U.S. is probably a little bit on the high side, the U.K. on the lower side. You know, it changes market per market. But our 10-15 range works for all these markets. Okay. Thank you. Our next question comes from Maheep Mandloi from Mizuho. Please go ahead. Hey, Maheep. Hey, hey, morning and thanks for the questions and Maxeon and on the MSAs. A question on the MSAs with the hyperscalers. Do they have any special requirements on the battery types? Just like the general batteries you have for the BESS industry or is it a high C-rate? Just curious if on the supply side, if you need to make any changes on the cell sourcing for that. Thanks. We make any battery grade, you know, as well. We make any battery grade, you know, the battery is a commodity, whatever they need. I think the main driver is density. In short, that comes out of our packaging, our capabilities. No real need on LFP. Clearly, nobody goes to the NMC for many reasons, you know, brand or supplier is not, it's not relevant for them. Whatever battery we put in our systems, we can make it to great things. Thanks. Then separately, like, we saw some battery suppliers proposing high C-rate batteries which go inside the data center for 800 volt DC. Is that something of interest, are you exploring? Yeah you guys are looking at, outside the data center? Thanks. Yeah, yeah. We're looking at it. You know, our product roadmap includes among not only this, many other elements that we're looking at to continue improving our offering to data centers and to pro solutions. One option is this high C-rate batteries that will go into data centers. You know, have some limitations, but it's part of our product roadmap that we have for whether it will happen or not, we'll see. It's not anytime soon. Understood. Thank you. Thanks. This will work. Thank you. Our next question comes from Moses Sutton from BNP Paribas. Please go ahead. Thanks for squeezing me in. Congrats on the great update. As these data center opportunities convert into reality, how do we think about the ratio watt for watt, meaning the watts of load to the watts of storage? We've seen examples out there of, you know, gigawatt data center might need 800 MW of batteries. Yeah A fifth of that, right? Depending on their need. Yeah. What do these projects start to look like right now as we're connecting sort of a data center TAM in gigawatt terms to the storage opportunity too, that you're converting against? Too early to give you a rule of thumb that we can calculate. We clearly have some views, but it's too early to give you a premature rule of thumb how to think a gigawatt will take this amount of battery. We will over time, I think that we'll be able to develop that as it becomes more clear. Today that we cannot do. What we have, you know, as I said, a 12 giga pipeline ahead of us of which we wanna convert into orders, a good portion of it within the next 12 months. That's what, you know, that's what we're concentrating on. As we learn more about this and we see how the industry develops, we'll provide you a rule of thumb that will give you a better sense of the whole market. Got it. That's helpful. We'll look forward for that. Yeah. Then on the MSAs, what's the nature of the exclusivity from what you've won? Like, are there multiple vendors? I couldn't tell if you were answering that in some of the earlier questions. For those hyperscalers, are you one of a few players? Are you exclusive? Is that a geographic- No. exclusivity? How do we think of that? One of a few players. One of a very, very limited number of players. This is a competitive process. You know, these are not, these are not, you know, directed somehow, or at least not yet. Maybe we'll be able to take them there at some point. Very good. You know, very limited players and a competitive process as we move forward. Thank you, everybody, for participating today. You know, we'll be available, Chris will be available, I also will be available, and Ahmed Pasha clearly to answer any questions you may have on this side. Bye-bye. Thank you for your participation in today's conference. This does conclude the program, and you may now disconnect.