Welcome to the SolarEdge conference call for the Q3 ended September 30, 2023. This call is being webcast live on the company's website at www.solaredge.com in the Investors section on the Events Calendar page. This call is the sole property and copyright of SolarEdge, with all rights reserved, and any recording, reproduction, or transmission of this call without the expressed written consent of SolarEdge is prohibited. You may listen to a webcast replay of this call by visiting the Event Calendar page of the SolarEdge investor website. I would now like to turn the call over to J.B. Lowe, Head of Investor Relations for SolarEdge. Thank you, Leo, and good afternoon, everyone. Thank you for joining us to discuss SolarEdge's operating results for the Q3, ended September 30, 2023, as well as the company's outlook for the Q4 of 2023. With me today are Zvi Lando, Chief Executive Officer, and Ronen Faier, Chief Financial Officer. Zvi will begin with a brief review of the results for the Q3, ended September 30, 2023. Ronen will then review the financial results for the Q3, followed by the company's outlook for the Q4 of 2023. We will then open the call for questions. Please note that this call will include forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from management's current expectations. We encourage you to review the safe harbor statements contained in our press release, the slides published today, and/or filings with the SEC for a more complete description of such risks and uncertainties. All material contained in the webcast is the sole property and copyright of SolarEdge Technologies, with all rights reserved. Please note, this presentation describes certain non-GAAP measures, including non-GAAP net income and non-GAAP net diluted earnings per share, which are not measures prepared in accordance with U.S. GAAP. The non-GAAP measures are presented in this presentation because we believe that they provide investors with a means of evaluating and understanding how the company's management evaluates the company's operating performance. These non-GAAP measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with U.S. GAAP. Listeners who do not have a copy of the quarter ended September 30, 2023, press release or the supplemental material may obtain a copy by visiting the Investor Relations section of the company's website. Now, I will turn the call over to Zvi. Thank you, J.B. Good afternoon, and thank you all for joining us on our conference call today. As reflected in our preliminary announcement a few weeks ago, and in the guidance we are giving today, we are going through challenging times in terms of general market dynamics and specific inventory trends related to our products. In the call today, we will share details of Q3 sales and megawatt sell-through data aggregated from distributors in some of the regions, and our latest estimates of underlying business levels in the near future, and estimate how long it will take to reach the associated revenue level. Before getting into the regional picture, I want to start with high-level perspective. During 2022, and in particular, the H2 of 2022, our industry went through an unprecedented surge in demand, which we attributed to geopolitical and other reasons discussed in our prior calls. Indicators in the beginning of 2023 were that demand would continue to increase this year, in particular in Europe. This led to a buildup of significant backlog for our products, in particular, because at the time, we faced operational challenges to supply all the demand. Specifically, this was related to three-phase commercial inverters that were in high demand and low supply in the late part of 2022, and our supply improved dramatically in early 2023. Additionally, in early 2023, we released in Europe a differentiated three-phase residential offering of a backup inverter and battery, which our customers were waiting for and excited to adopt. As a result of these factors, our shipments in the H1 of 2023 were at record levels, and we were in the process of increasing capacity to meet the elevated channel demand. However, market demand began to slow in the Q3, and distributors began to experience financial challenges. As a result, we received a large amount of requests to cancel or push out orders. We should note that while these orders are technically binding on our distributors, the nature of our relationship with these customers is such that we accommodated most of these requests. As a result, our Q3 revenue and Q4 expected revenues are significantly lower than our run rate in recent quarters, while the infrastructure we built to support the anticipated sale growth has created a burden that is putting pressure on our margins in the near term. I will describe when and how we believe our revenue will reach a level that reflects stabilized market demand, post-inventory corrections, and Ronen will elaborate on the margin and financial infrastructure impact of the short-term actions we are taking. Now, let's go over the highlights of our Q3 results. We concluded the quarter with revenues of approximately $725 million. Revenues from our solar business were $676 million, while revenues from our non-solar businesses were $49 million. This quarter, we shipped 3.3 million power optimizers and 274,000 inverters. Additionally, this quarter, we shipped 121 MWh of residential batteries, down from 269 MWh last quarter. Our solar business revenues declined quarter-over-quarter by 29% and by 14% year-over-year, driven by market slowdown and high inventory of our products in the channels. Moving now to market-by-market dynamics. Starting in Europe, as already described, during the second part of the Q3, we experienced significant unexpected cancellations and pushout of existing backlog from our European distributors. Although the dynamics are consistent with what we cautioned during our Q2 earnings call, the magnitude grew much greater than we anticipated. We also note that the European market is a diverse one, and each country comes with its own regulatory environment and energy-related dynamics. I will give some color on what we see on per country basis in some of the top countries in which we operate. According to market reports, Germany, which is the largest rooftop solar market in Europe, is on track this year to connect to the grid more than 10 gigawatts of solar, compared to 7.5 gigawatts in 2022. The government has announced a long-term goal to reach 215 gigawatts by 2030, which, in order to be achieved, would require annual installation of approximately 20 gigawatts per year, indicating the expected long-term strength of the German market. Consistent with this trend, our residential Energy Hub three-phase inverter, introduced in April of this year, and our three-phase battery are optimized for the German market. We continue to see good adoption of this solution. From a demand perspective, our sell-through in Germany in the Q3 was up 44% year-over-year and down 37% quarter-over-quarter from the peak levels typically seen in the Q2. The Swiss and Austrian market, which revenue-wise, are about 1/3 of the size of our revenue in Germany, utilize the same portfolio of products as Germany, and similarly grew significantly so far in 2023 and are expected to continue to grow in 2024. In fact, Switzerland was a record revenue quarter for us in Q3, and we are well positioned to continue growth in these markets in 2024. Sell-through in these markets was up 213% year-over-year and up 42% quarter-over-quarter. Moving to the Netherlands. The market in the Netherlands is dramatically down from peak levels due to uncertainty around government policies and the phaseout of net metering, which may become clearer after the elections in November. That said, there are several trends that we believe will work in our favor in the mid and long term in this market. The increased implementation of dynamic tariffs, combined with the phaseout of net metering, is likely to increase the number of full system installations with batteries, EV charging, and advanced home energy management capabilities, similar to the SolarEdge ONE platform that we launched at Intersolar in June. Additionally, depending on changes in regulation, the Netherlands could have a large potential for upsell and retrofit of existing installations with additional products, including batteries and EV chargers, as well as software capabilities, which is a great opportunity for SolarEdge, given our market leadership and vast installed base in this country. Furthermore, there has been a push for new residential homes to be built with three-phase service in what has traditionally been a single-phase market. This will enable the use of our differentiated three-phase offering that we have been successful with in Germany, as described earlier. Sell-through of our products in the combined Belgian and Netherlands market were up 4% year-over-year and down 25% quarter-over-quarter. In Italy, the residential market has been sluggish since the Super bonus tax credit ended earlier this year, and we saw our point of sale of residential products in this market decline year- over- year by 48%. On the other hand, the commercial market has seen significant growth and has largely, largely offset the decline in the residential market. Our point of sale data for commercial products in Italy was up 216% year- over- year in the Q3. Overall, our megawatt sell-through in Italy was up 85% year- over- year and down 6% quarter- over- quarter. All in all, the underlying demand in the European market was strong in the nine-month period ended September 30, although below the much elevated expectation heading into the year, leading to the inventory buildup that I described earlier. On an aggregated basis, in Europe, our sell-through in the Q3 was up 34% year-over-year and down 22% quarter-over-quarter. Moving to the U.S., we have not seen a significant change in market dynamics since our Q2 call. The market is still being adversely impacted by high interest rates and uncertainties around the pace of adoption of NEM 3.0 systems in California. In commercial, we are seeing a slight improvement as projects that were on hold appear to be moving forward, possibly related to availability of low-priced modules. In our data, sell-through in the Q3 for residential was down 13% quarter-over-quarter, and commercial was up 8% quarter-over-quarter. Battery sell-through was up 31% quarter-over-quarter. We expect these market dynamics to continue without significant change in the coming quarters. In the rest of the world, our Q3 revenues were relatively stable, and we do not see dramatic shifts in overall revenue over the next several quarters. The rest of world markets are largely dominated by commercial installations, which are impacted by the higher interest rate environment. Local dynamics in specific countries are largely offsetting each other. Taking into account these market dynamics, we use the demand patterns represented by the sell-through data discussed above, to model the time we think it will take to run down the inventory level and have estimated a normalized level of revenue and margin following the inventory corrections. We used our sell-through data for the Q3 of 2023 as a baseline and did not include potential additional revenue from new products that we will discuss separately, for market share improvements that we are working on and for which we see positive signs. This modeling currently indicates, in a non-inventory challenged environment, a revenue run rate of approximately $600 million-$700 million per quarter. Using this model and looking at inventory data that we received from our distributors, we estimate the correction could take two to three quarters of gradual improvement quarter-over-quarter. Moving to the operational side, we are, of course, already taking measures to adjust our cost base to this projected level of business. To align with reduced demand, we have discontinued manufacturing of our products in Mexico and reduced capacity in China. In parallel, we are ramping up manufacturing in our U.S. facility, where we expect to ship 12,000 Energy Hub inverters in the Q4, ramping to a run rate of 50,000 units per quarter. Additionally, we are targeting for a second site to begin producing commercial inverters and optimizers by the Q2 of 2024. An additional step of cost reduction is our decision to discontinue our light commercial vehicle, e-Mobility activity, which we consider as non-core, and as such, we delivered final kits to Stellantis in October. We intend to continue making adjustments to achieve the levels of profitability at the revenue run rate discussed earlier, which Ronen will elaborate on in his comments. Moving on to products. We recently installed our first 330-kilowatt inverter in the U.S., following similar installations that have been running for some time in Europe and Asia. This product is specifically targeting Community Solar and Agri- PV applications. We will be ramping production in the Q4 for further deliveries globally in 2024. This will expand our offering for these ground mount applications beyond the tracker product that we released a few months ago. This quarter, we are also announcing the approval by our board of directors of a share repurchase program, which reflects our confidence in the future growth of our company. The plan authorizes the repurchase of up to $300 million of the company's stock through 2024. I would like now to address the ongoing situation in Israel and how it is affecting our company. We have seen no disruption to our ability to manufacture and deliver products and services to our customers. Approximately 11% of our Israel-based workforce, which is approximately 6% of our global workforce, has been called up for reserve duty, and we are prioritizing and reallocating resources between projects to make sure that the impact to our business is minimal. To conclude my remarks, setting aside recent and upcoming inventory corrections, we believe the underlying demand for our products, while at a reduced level from the H1 of 2023, is above our projected Q4 revenue and represents our strong position in the market. On top of this, our global sales force is energized and focused on gaining market share based on the products and improvements, improvements made to our core portfolio in the last 12-18 months. This, together with the new products we have developed for the new segments we have entered, should create an opportunity for incremental growth at a faster rate than the solar market in the coming year. I will now hand it over to Ronen. Thank you, Zvi, and good afternoon, everyone. This financial review includes a GAAP and non-GAAP discussion. Full reconciliation of the pro forma to GAAP results discussed on this call is available on our website and in the press release issued today. Segment profit is comprised of gross profit for the segment, less operating expenses that do not include amortization of purchased intangible assets, impairments of goodwill and intangible assets, stock-based compensation expenses, and certain other items. Total revenues for the Q3 were $725.3 million, a 27% decrease compared to $991.3 million in the last quarter, and a 13% decrease compared to $836.7 million for the same quarter last year.... Revenues from our solar segment, which include the sales of residential batteries and trackers, were $676.4 million, a 29% decrease compared to $947.4 million last quarter, and a 14% decrease compared to $788.6 million for the same quarter last year. Solar revenues from the United States this quarter were $195.7 million, similar to the last quarter, and 22% increase from the same quarter last year, representing approximately 29% of our solar revenues. Solar revenues from Europe were $419.2 million, a 39% decrease from the last quarter and 12% increase from the same quarter last year, representing 62% of our solar revenues. In Europe, we saw a meaningful quarter-over-quarter revenue drop across the board, with noticeable declines in Germany, with 43% decline, Netherlands with 40% decline, U.K. with 41% decline, and Poland with 67% decline. On a positive side, revenues in Switzerland grew this quarter by 11%, reaching a record high, and in France, revenues grew by 37%. Significant portion of our revenues decline in Europe are attributed to lower sales of batteries, where a combination of inventories in the beginning of the quarter and lower demand than anticipated by our customers led to an accumulation of large quantities in the channels. Rest of world solar revenues were $61.5 million, a 3% decrease compared to the last quarter, and flat compared to the Q3 of last year, representing approximately 9% of our solar revenues. On a megawatt basis, we shipped 774 MW of inverters to the United States, 2.6 GW to Europe, and 467 MW to the rest of the world, totaling 3.8 GW of quarterly inverter shipments. During the quarter, we continued to ship a higher ratio of inverters relative to optimizers in order to catch up with previous optimizer sales. During the quarter, 66% of our MW shipments were commercial products, and the remaining 34% were residential. Since the beginning of the year, we have shipped approximately 7.1 GW of commercial products worldwide, compared to the 5.2 GW shipped in all of 2022. In the Q3, we shipped 121 MWh of our residential batteries, a decrease from 269 MWh last quarter. While our battery sales in Europe decreased significantly, battery sales in the United States remained relatively stable, and we continue to see a steady increase in installation rates in the United States. Average selling per watt this quarter, excluding battery revenues, was $0.164, a 13% decrease from $0.188 last quarter. This ASP per watt decrease is predominantly a result of a lower optimizer shipment mix during the quarter, an increase in the weight of commercial inverters in our overall mix, and the weaker euro. In general, our prices did not change this quarter. Our battery ASP per kilowatt hour was $475, slightly down from $479 last quarter, mostly a result of a weaker euro. Revenues this quarter from our non-solar segment were $48.7 million, an increase from $43.7 million last quarter. Consolidated GAAP gross margins for the quarter was 19.7%, down from 32% in the prior quarter and down from 26.5% in the same quarter last year. Non-GAAP gross margin this quarter was 20.8%, compared to 32.7% in the prior quarter and 37.3% for the same quarter last year. Gross margin for the solar segment was 24%, compared to 34.7% in the prior quarter and 28.3% in the same quarter last year. I would like now to address the decrease in our gross margins in the Q3 and provide color on the Q4 and the quarters ahead. Our cost of goods sold are comprised of variable costs that are correlated to the product mix and volume shipped, such as manufacturing costs, shipping and logistics expenses, et cetera. In addition, we have other indirect costs that are not volume or mix specific, such as warranty costs related to our existing and growing install base, contract manufacturer claims related to adjustment made to the manufacturing levels, and costs associated with our operation and support department, et cetera. These costs are not correlated to the volumes of product shipped and usually require some time to be adjusted to significant changes in revenues. Of the total quarter-over-quarter reduction of 1,070 basis points in the solar segment margins, approximately 160 basis points are attributed to higher portion of commercial products and lower portion of optimizers within our product mix, customer mix, and the devaluation of the euro against the U.S. dollar. The remaining 910 basis points decline are mostly related to the allocation of our indirect costs over a lower revenue base. Around a third of the 910 basis points are related to warranty and service costs across our existing and growing install base that do not change when revenues decline. Approximately 200 basis points are related to the allocation of our operations, quality, and support organizations over lower revenues. The remaining amount is a result of a higher percentage of logistic costs due to increased storage expenses and underutilization costs to contract manufacturers. In the Q3, we have also recorded a one-time expense related to the discontinuation of manufacturing in Mexico. These economies of scale will persist and even worsen in the Q4 as revenues are abnormally low. Noteworthy is that these indirect costs were down quarter- over- quarter on an absolute basis, and due to the actions in process, we expect them to be significantly lower again in the Q4 in absolute value. We expect margins to gradually improve in the first and Q2 and of the next year, as we will continue to reduce costs and as our revenues return to a more normalized level. Gross margin for our non-solar segment was -22.8%, compared to -9.6% in the previous quarter. On a non-GAAP basis, operating expenses for the Q2 were $128 million, or 17.6% of revenues, compared to $133.3 million, or 13.4% of revenues in the prior quarter, and $108.3 million, or 12.9% of revenues for the same quarter last year. Non-GAAP operating income for the quarter was $23.1 million, compared to $191 million in the previous quarter, and $120.2 million for the same period last year. The solar segment generated operating income of $45.7 million this quarter, down from $207 million in the last quarter. The non-solar segment generated an operating loss of $22.6 million, compared to an operating loss of $16.1 million in the previous quarter. Non-GAAP financial loss for the quarter was $7.4 million, compared to a non-GAAP financial income of $4.4 million in the previous quarter. The loss was largely a result of a weaker euro during the quarter. Our non-GAAP tax expense was $46.6 million, compared to $38 million in the previous quarter, and $34.5 million for the same period last year. The unusual result is mostly due to the amortization of R&D expenses for tax purposes, as well as temporarily higher tax rate related to the quarterly tax calculation methodology. We expect our annual non-GAAP tax rate for the entire 2023 to be within 22%-24%. GAAP net loss for the Q3 was $61.2 million, compared to a GAAP net income of $119.5 million in the previous quarter, and GAAP net income of $24.7 million in the same quarter last year. Our non-GAAP net loss was $31 million, compared to a non-GAAP net income of $157.4 million in the previous quarter, and a non-GAAP net income of $54.1 million in the same quarter last year. GAAP net diluted loss per share was $1.08 for the Q3, compared to a GAAP net diluted earnings per share of $2.03 in the previous quarter, and a GAAP net diluted earnings per share of $0.43 for the same quarter last year. Non-GAAP net diluted loss per share was $0.55, compared to a non-GAAP net diluted earnings per share of $2.62 in the previous quarter, and non-GAAP net diluted earnings per share of $0.91 in the same quarter last year. As mentioned by Zvi, we expect that the stabilized solar revenue levels after the inventory correction has run its course, will be approximately $600 million-$700 million quarterly. Under this scenario, corporate Non-GAAP gross margins are targeted to be 30%-32%, including approximately 500 basis points of benefits from IRA manufacturing tax credit, and operating profit margins are targeted to be at 11%-14% after implementing cost reduction activities. I reiterate that this scenario is based on no improvement in demand from our Q3 sell-through levels and assumes no incremental revenues or margin from new products. Turning now to the balance sheet. As of September 30, 2023, cash, cash equivalents, bank deposits, restricted bank deposits, and investments were $1.5 billion. Net of debt, this amount is $831.4 million. This quarter, cash generated from operations was $40.6 million, as a reduction in our receivables account and raw materials inventories were partially offset by an increase in finished good inventories. As we had anticipated, we swung back to cash flow from operations generation in the Q3, and we expect to see greater cash flow from operations in the Q4. Accounts receivable net decreased this quarter to $940 million compared to $1.15 billion last quarter, representing 149 days outstanding. This increase in customers' day sales outstanding resulted from extended payment terms provided to our customers, especially in Europe, in order to assist them handling with higher inventory levels than desired, as previously described. As of September 30, our inventory level, net of reserve, was at $1.2 billion, compared to $984.2 million in the last quarter. The increase is solely attributed to higher finished goods inventories, a result of the abrupt slowdown in shipments, offset by a decrease in raw material inventory. Turning to our guidance for the Q4 of 2023. We're guiding revenues to be within a range of $300 million-$350 million. We expect non-GAAP gross margin to be within a range of 5%-8%, including approximately 130 basis points of net IRA manufacturing tax credit. We expect our non-GAAP operating expenses to be within the range of $126 million-$130 million. Revenues from the solar segment are expected to be within the range of $275 million-$320 million. Gross margin from our solar segment is expected to be within the range of 7%-10%, including approximately 130 basis points of net IRA manufacturing tax credit. I will now turn the call over to the operator to open it up for questions. At this time, if you would like to ask a question, please press star one now on your telephone keypad. Again, to ask a question that is star one. To remove yourself from the queue, you may press star two. We'll take our first question from Philip Shen of Roth MKM. Hi, everyone. Thanks for taking my questions. I wanted to explore the correction cadence some more as it relates to, you know, Q4. You have this $300 million-$350 million revenue range, and you talked about how things could grow gradually in the coming two-three quarters or the subsequent two-three quarters. So, could you can you quantify in any way Q1, Q2, and even Q3 is kind of a revenue number with either, either a three or a four in front of it, more reasonable? And then when we get back to Q4, once you're post corre- post correction, do you jump right away to that $600 million-$700 million? And then as it relates to margins, could you do the same kind of sketch for that as well? You talked about things gradually improving, but the margin challenge this quarter was, or for the guide here in Q4, very much has to do with mix. Would you expect your mix to be very similar, for Q1 through three of next year as well? Thanks. Okay, Philip. First of all, thank you for the question, and I hope that I'll capture everything. If not, please, correct me. So, I will start by saying that, you know, forecasting the cadence of change is, in particular, complicated right now because of the fact that the changes that we've seen were relatively fast. But in a way that we are analyzing the markets, and we analyze them based on U.S., Europe, and rest of the world, we're basically looking at the overall shipments that we did compared to the rate of sell-through data, as Zvi mentioned in his prepared remarks. And when we look at them, we basically see that right now the numbers that we see are representing approximately 50% of our normalized level. Now, when it comes to the correction, there is a little bit of difference, I would say, between the U.S. and Europe. First of all, starting from Europe, we usually see that Q4 is a down quarter compared to Q3, and then Q1 is not necessarily up compared to Q4 because of seasonality. And here, winter plays a very important role. The way that we see it is that we should see a higher growth in or revenues in Q1 in Europe already, because first of all, we do understand that in the composition of the inventory within the distribution channels, we have both commercial and residential products. They're not evenly distributed, and therefore, we believe that some of the products, even though maybe on, let's say, single-phase, you see a little bit of a higher revenue, sorry, a higher inventory than commercial. They will run out of commercial and will need to grow a little bit faster. We see, for example, that in the last quarters, we shipped a little bit more inverters than optimizers. We believe that right now, optimizers level may be a little bit lower than should be at the end of Q1. And therefore, we do expect to see a relatively linear growth in Europe going from this quarter into the, let's say, second and Q3, again, with heavy reliance on how winter looks like. If it is going to be a light winter where you see a lot of installations, as you saw last year, you will see a little bit of a steeper growth from Q4 to Q1, and then a little bit of a slower growth to Q2, and then back to Q3. If it's going to be a hard winter, then you will see a little bit of a flatter line compared to Q4, but then a bigger increase. When it comes to the U.S., in the U.S., we actually do not expect a lot of changes in the overall situation of our revenues, because as we've mentioned since the beginning of the year, this is a market where it's relatively predictable or the slowdown was relatively predictable. The channels are behaving in a more linear manner. You don't see so much seasonality as you can see. Therefore, we expect to see, I would say, relatively similar revenues, let's say, from this quarter to the following quarters, maybe with a little bit of slowdown in Q4 because of the end of the year. Rest of the world is expected to be, I would say, relatively similar with a small linear growth. Now I'll try to summarize how things would look like. Because if we see that U.S. and rest of world should be, I would say, relatively similar to where they are today, with, again, a little bit of a drop at the beginning in Q4, we do expect to see, I would say, pretty linear growth from Q4 into, let's say, Q3, where we may normalize at the $600 million-$700 million. Should be relatively... Sorry? Q1. Yeah, from Q1 until the Q3, where we're supposed to be seeing the $600 million-$700 million, we should be pretty linear. If we will see that the winter is going to be a little bit lighter, we will see more impact on Q1, and then, yes, it may be starting with a four. But again, right now, I will simply need to see how the winter develops there and how the overall inventory clearing is going away. From a margin point of view, it's a little bit different, because on the variable areas, we do not see major changes happening over the next three quarters. You know, the price that we pay for our products from a bill of material point of view, of course, this is something that does not change materially. The thing that will really get a little bit better as we move forward is all of the, I would call, non-variable items. So let's try to look at some of them. First of all, as mentioned in the prepared remarks, when you work with contract manufacturers and as good as they are in supporting you, after building a very large capacity, aiming at growth, that, of course, we see now that is not happening, we see that our contract manufacturers have fixed costs that we will have to help them cover, when the changes or the reduction in the production level is going down. And this is weighing on our revenues, both in Q4 and in Q1, because this is the time that it takes for them to make these adjustments, and especially given the fact that at that time, the basis of revenues is going to be also lower. So therefore, these economies of scale are working extra hours. We believe that around Q2, we will have much less of these chargers that will go away. At the same time, we have, prior to any cost reductions that we will do in efficiencies, relatively flat expenses on the support department, because we do not want to reduce the support level that we give today to our existing fleet and to our operation team. And therefore, here, it's mostly going to be related to the fact that, you know, the more revenues you have, you have a higher denominator, and therefore, the percentage is going a little bit better. So if I try to summarize all of this, here, I do expect to see that you will not see a linear growth in growth margins, but it will be more tilted, or the improvement will be more tilted towards, again, Q2 of 2024 and the Q3. This is also, by the way, related to the fact that we will continue to ramp up our U.S. factory and see more IRAs. So it's a lot of moving parts, but I would say quite linear revenue return and less linear, more inclined towards Q2 gross margin change. Again, sorry for the many moving parts, but that's the complexity of the business. No problem. Thank you for all the coverage there, Ronen. Shifting to cash flow and balance sheet. I know you guys have a lot of cash and marketable securities. Was wondering if you could share a little bit more on how you expect cash flow to be in the coming quarters as you kinda follow this correction. Do you expect... How much burn do you see for Q4, and then you know, through Q3 of next year? Mm-hmm. And then how do you expect working capital to trend? I see the inventory line has gone up healthily or substantially. And, you know, when do you expect the bulk of that to kinda normalize as well? Thanks. Okay. So here, the answer is that when you're growing, you actually usually need a little bit more working capital because, you know, you are manufacturing, you increase inventories, then you give customer credits, and then, and that means that you consume a little bit more of working capital. When we look at cash flow for the next three quarters, let's talk about cash flow from operations, and let's also talk, by the way, about free cash flow, because this is a result also of capital investments. So from a cash flow from operations, we expect to see actually an increase in the cash flow from operations generation. As I mentioned in my prepared remarks, we have generated about $41 million this quarter. We expect to see much higher number in the Q4 and numbers to continue and increase towards Q1 and Q2, simply because of the fact that we have relatively large customer balances from the quarters that we shipped and sold a little bit more. As I mentioned, we also increased a little bit payment terms for our European customers, and therefore, within Q3, sorry, Q4 and Q1, we will collect relatively heavily on those. ... When you look at the inventory levels that we're carrying, we're carrying quite high inventory levels because, again, we were anticipating growth, and that means that we're going to start consuming this inventory over time. This will also go back to the cash. And when it comes to paying to our vendors, the fact is that this is more correlated to your manufacturing levels. So therefore, when you're manufacturing less, you're actually paying less to your payables. So that means that we expect to see an accelerating cash flow from operations within Q4 and Q1, and hopefully starting to see, again, growth in revenues starting to impact cash flow in Q2, but it's still supposed to be positive and, and, and of course, because of the fact that we still collect and using inventory. The second part is, how do we translate it to free cash flow? And here as well, part of the activities that we're taking right now is to reduce our capital expenditures. A lot of our capital expenditures last year were aimed at increasing manufacturing capacity almost everywhere around the world. That means procurement of automatic assembly lines. That means, for example, payments for contract manufacturers to take more areas and make them suitable. This is something that of course, right now, other than the investments that we do in the U.S. manufacturing, will be very much reduced. In addition to this, of course, at this time, you're investing a little bit more in areas that, when you're growing, you're allowing yourself to do, like, you know, maybe a little bit of newer labs or bigger labs. And that means that also, not only we'll see higher cash flow from operations, we will see lower cash flow in investing activities. So overall, we should see an accelerating growth in cash. We'll take our next question from Corinne Blanchard of Deutsche Bank. Hi, good afternoon. Thank you for taking my question. Could you maybe, I mean, I know you provided a very good overview with the previous question, but would you be able to give a little bit more color about the U.S. and maybe break it by state? Which area you're seeing strong demand and which one are weak, and how we should be thinking about it going into next year? Yes, so Corinne, I'm referring to our data set that we use for this purpose is the installation rate, that the main indicator for us are monitoring connections to our monitoring portal. So I can say that overall, the non-residential, the connection rate recently for the last, you know, call it 10, 12 weeks, has been relatively flat. And when we break it down by states, it's showing a small decline in California and an increase in some of the other states, for instance, Puerto Rico, and other states around the nation. This is on the residential inverter point of view. For batteries, we're seeing a consistent increase in connection rate, and this is coming from California, because although installation rates are down, installation of batteries are up from the historical pace, because many of those that are installing in California are installing with batteries. And we also see some increase in battery installations in other states. Again, Puerto Rico is an example. So this is the residential picture, where California is slightly down and other states accumulated or slightly up. And overall, the rate of installation for residential in the U.S. is relatively flat. On commercial, as I mentioned also in the prepared remarks, we see on the installation the same type of pattern that we're seeing on the sell-through data, where after some period of installation rates of commercial being relatively flat, we're seeing a gradual increase. Not dramatic, but still a positive trend on installation and connections of commercial projects. And as I mentioned, this is across the country, with some specifically in the markets that are strong for commercial. And, we believe it's projects that have been held for some time because of people waiting for clarity on the IRA or for understanding the interest rate dynamics and the fact that there are low-cost modules and people understand that there won't be clarity on some of those elements for some time. So they're moving ahead with the projects that were on hold, and we expect this trend to continue. All right, thank you. And, maybe for a follow-up, switching a little bit here, but could you talk about the competition that you're seeing in the U.S.? Tesla is coming out with new products, so what do you expect there, and maybe what does that mean in terms of pricing pressure over the next three or four quarter? Yeah, we, we didn't get naturally into, in this call, into a lot of product conversation, especially not on the, the single-phase portfolio. But we, we are feeling good about our current single-phase portfolio. We've recently, ... Introduced some improvements, have gained a lot of positive feedback on the reliability of the recently released product, released product, and the installation times and ease of installation of both the inverters and the batteries. And we feel that we're in a good trajectory from a market share perspective, in the U.S., in particular, in what we call the mid-tier installers. So we have always been strong with the large tier. We are a bit weaker in the long tail, and we've been, we believe we've been gaining some ground in the mid-tier. But these are incremental dynamics. We don't see a major change of pattern. And as a result or related or unrelated, we don't see major expectation for price changes in the U.S. market for the inverter offering. Batteries in general, not only in the U.S., the battery market is more in an oversupply type of dynamic and here and there for volume purposes, we might reduce battery pricing. But on the inverters and optimizers, we see price stability and expect it to continue. Right. Thank you. We'll take our next question from Brian Lee of Goldman Sachs. Hey, guys. Thanks for taking the questions. I had a couple here. Just maybe bigger picture, 'cause there's a lot of moving parts as well as, you know, numbers that are moving quite, quite dramatically from what we've seen just the past couple quarters. So maybe to start, you know, you're talking about this normalized level of $600 million-$700 million of revenue, gross margins being 30%-32% at that level, but then that's including 500 basis points. So, you know, core business is like 25%-27% gross margin. Yeah, but if I look at, you know, 2022, you were doing that level of revenues and doing higher, you know, gross margins without the IRA benefit. And even back then, you were struggling with the euro and and some component issues, but, you know, higher than 25%-27% gross margin. So I don't know. It just seems like structurally, margins here are lower, even if you do get back to the $600 million-$700 million revenue level. What, what's kinda driving that? And maybe help us reconcile it a bit. And why can't you maybe take more costs out of the system? 'Cause it feels like you're just... Again, margins are now the target is lower than what you had prior, because, you know, prior you weren't including 500 basis points from IRA. Mm-hmm. So, sure, Brian, and thank you for the question. So, in general, I think that there are two, two areas here. The one I will start by saying is that, as we mentioned from the very beginning, the way that we are looking at this normalized level is the level that we see as a base, based on the point of sale data that we saw in Q3, across the board. Which we, by the way, believe that, and again, we took it out of being cautious here, after what we saw, at least in the last month and a half, actually, or months ago. And therefore, we are still trying to evaluate whether this normalized level is really the new level that will go for several years from then, from that point, or that maybe in some cases this should be actually a little bit of a higher rate. And that means that from adjusting our expense level is something that we are going to look very cautiously at each and every expense, making sure that we are making all the necessary adjustments and that we are taking all cost reduction activities that we're able to do, but not returning to a situation that if the market is going up, and we did see this, you know, boom-bust sometimes cycles within this market. We're finding ourselves again, having to chase after capacity and having to air ship product, because again, this is something that we've seen in the last years as well. So I would say that from the beginning, while modeling, we took a very cautious approach into how we should build our expense base and how we are going to operate the company, assuming that this is not necessarily the level that we will see two or three quarters down the road. It doesn't mean, and I think that that's the big difference between modeling and actually going into the real world assumption. It doesn't mean that we will not do whatever effort needed in order to make sure that we are indeed capitalizing on every cost reduction activity that we can do, but we wanted to be a little bit more cautious in modeling here. So that, that's, I would call it from the very beginning, the limitation of the model itself. The second element that we need to take here is the fact that we do see that our commercial percentage within our portfolio continues to grow. As mentioned before, in this quarter, 66% of the megawatts shipped was actually commercial products. This is the record high that we see. Maybe it's a little bit tilted toward commercial because of the fact that these were products that we were lacking because of components before, but still, we do see that at least in the commercial applications, we're getting stronger, our offering is good and we're growing, and we wanted to give a little bit of attention to this as well. And the last thing that's related here is the fact that we do expect that we will continue to see maybe a little bit more growth in other areas that will allow us to grow a little bit further, like new products. And again, while we don't put the revenue here being conservative, these are usually products that are characterized with, at least at the beginning, lower gross margins. So in general, I would say that we try to be here a little bit more conservative in the way that we are modeling things. We will be making every effort to adjust to the new level as we see it, and of course, we will learn as long as we're moving. And by the way, we intend to continue and give you, in the next calls, a little bit of, you know, color about how do we see the normalized level, because we do believe that we will gather more information. And this increase in commercial that will also allow us, by the way, to increase the revenue base, is something that we see. In general, I can tell you that we're aiming to get, of course, you know, to the highest profitability possible and higher margins possible. This will be our action for the next 2-3 quarters. Okay. I appreciate that additional context. And then just maybe, you know, kind of a follow-up to some of the earlier questions. I could see, you know, investors growing concerned that this is more than just an inventory correction, given, you know, the magnitude and also the duration. Like, how do you think about the share position here, whether in U.S. or Europe or both? Like, do you, can you provide some evidence or data points or anything that gives you the comfort that, you know, this is everyone going through the same correction, versus maybe there is some share loss here that you guys are experiencing? And, you know, one of the things I guess, you know, we hear a lot about is, there are two peers, like SMA and Sungrow, who have had recent updates that were relatively positive. I know they're not all positive in the inverter space these days, but just maybe give us a sense of what you see out there data-wise, feedback-wise, that gives you comfort it's not a share issue at all? Thank you. Yeah. Yeah, thanks, Brian. Obviously, it's something that we look at very closely, and I'll give you a data point that is, you know, it's subjective, and it's worth what it is. Focusing on the markets that we serve, obviously, we don't serve the utility market, and we don't... So some of the names that you're referring to are related to dynamics in the utility market that are different. But we recently sampled with one of the largest European distributors, and I'll take a step back, actually. Related also to what I said in my earlier comments, in the latter part of 2022, we definitely sensed that we were losing share just based on availability. So, the demand was very strong. The demand was very strong for our products. We couldn't supply all of it, and there were installers that, in the urgency to install, that were long-term SolarEdge installers, tried other products. We mapped that out, and once availability became less of a concern for us, we in a systematic way in every country identified the installers that we knew based on our monitoring system have decreased their usage of SolarEdge because of lack of availability, and have been going back and recovering those one by one to be using SolarEdge once availability was no longer a constraint. And recently, we sat with one of the largest distributors, pan-European distributor, and went through their share picture from an inverter or supplier's point of view. And this also relates to something that I mentioned in the call last quarter, that during periods of shortage, people bring on and they widen their line card to include more brands. And then as the market goes back to normal, they reduce the line card. And with this distributor, going country by country, overall, we saw they reported an increase of our share in their sales in 2023. This was in the first eight months of 2023, relative to the same period in 2022. So we've been looking at that at a high level of detail. And although there are fluctuations, and as I said, we haven't recovered all of the share that we lost due to availability in the H2 of 2022, we are optimistic about the signs that we've been seeing since the beginning of 2023 in recovering that share. So, we don't see that as part of the dynamics that are related to the inventory situation that we described. Okay, understood. I'll pass it on. Thanks, guys. Thank you. Our next question is from Colin Rusch of Oppenheimer. Thanks so much. You know, guys, can you talk a little bit about incremental geographies that you guys might be able to move into that are growing at a healthy rate, particularly in the rest of the world or other geographies that you're ending up exiting out of here in this transition? Yeah, I think we spoke about Europe. And it's not necessarily. There are some markets that are beginning to evolve that you would've never mentioned their names before, and I addressed some of them in the past, like Slovenia or Romania, and a few places like that. And they're usually influenced from some central country nearby. For instance, in some of these, it's mostly influenced from Italy. And these are slowly evolving markets. And from our central location, again, in this case Italy, we will oversee or we will be active in these markets as well. There are other markets that are not, they weren't—they did exist before, but they're picking up recently, and then we increase our presence in those markets. The glaring cases like that are countries like Spain and Greece. By the way, years back in 2012, we had market share in Greece that was probably, I don't know, 60% or 70%. The market was quiet for many years, and now it's back. We have a huge install base in Greece, and our growth rate in Spain is very, very high, but it's still relatively small numbers. So there are, like I said, there are a few countries where it's a completely new dynamic, and there are some countries that were small markets that are beginning to grow a bit faster, and those would be the examples within Europe. Outside of Europe, you know, there's a lot of talk in Brazil, and definitely our momentum in Brazil is positive. In Asia, Thailand is a market that is growing quickly. Taiwan is a market that is growing quickly. The Philippines is a market that is growing and evolving. And at the same time, for instance, we realize that the Korean market is not what we expected it to be, and we reduced the level of our activity in the Korean market. So there are opportunities in these markets, but I think under the current circumstances and interest rate environment, the Europe and the U.S. are much larger in terms of the potential to gain share and see improvement in demand compared to growth in some of these markets, although we are benefiting from it. That's super helpful. And then the follow-up is really about the internal battery cell manufacturing and how that's ramping up. And, you know, given the sell-through on the batteries and some of the inventory that you're mentioning there, how you're dealing with and expecting to manage your third-party cell agreements along with that internal production? Yes, I think so try to answer in two ways. As you know, our current offering is based on our residential batteries is based on third-party cells. And we intended to ramp the factory and shift over to using the cells from the factory for that, for offering to these markets. At the current time, considering the lower installation rate, you know, it's increasing, but it's lower than what we anticipated. We don't expect that shift to happen in 2024. And in 2024, our residential battery offering will continue to be based on our third-party cells. And meanwhile, we're ramping the factory, and we will continue to ramp the factory, but and sell those cells as we ramp to customers of our storage business, that some of them are historical, that we've been selling to for years, and now we will have more capacity and a better cost structure. And some of them are new customers of non-solar-related energy storage or high C-rate cell applications. So, in 2024, our solar-attached single-phase batteries will be continue to be based on the third-party cell supply that we have today. Okay. Thanks so much, guys. We'll take our next question from Mark Strouse of JP Morgan. Great, thanks for taking our questions. Two of them, please. I think the first one, just following up on Brian's question. The-- it kind of sounds like the distributor cancellations, the order cancellations and delays that you saw accelerated in the latter half of the quarter. Has that now stabilized? I'm just trying to get a sense of, you know, you mentioned some upside risks to that $600 million-$700 million. What gives you comfort that there's no further downside to that number? Yeah. So maybe, Mark, first, a data point. Actually, our highest ever sell-through month globally, or actually in Europe, ever, was June. So in June 2023, we reached a record or our distributors reached a record of sell-through for our products. So... And then July, the sell-through was a bit lower, but July is typically a vacation month in Europe. So the shift in pattern was around the summer, and the picture got clear, as mentioned, during the to our distributors and then to us in the H2 of the quarter. And that is where the installation rate decline took place. And as we said, from a quarter-over-quarter perspective, from Q3 to Q2 across all of Europe, if I remember correctly, the number was 22%, quarter-over-quarter reduction, although it was still higher than the same quarter of last year. We are looking at installation rates because the indicator of sell-through we receive at a later date until all of the distributors collect their information and provide it to us. The indicator that is less accurate, but we have a much more live view, is the indicator of installation rate and connection to the monitoring. And the connection to the monitoring in recent weeks, in the last couple of months in Europe, has been up in places like Germany, Austria, Switzerland, some of the other countries, and has been down in the Netherlands, as we reported. But overall, the installation rate has been relatively stable across Europe since the drop that we saw towards you know the end of the summer and the end of the Q3, and going into the Q4. Now, is that you know does that give confidence that it won't go down further? Or when will it begin to pick up? That rate obviously we have, you know, judgment, but not true visibility. But this is the data point on which we are setting the baseline scenario, and in the revenue in the stabilized revenue projection that we gave. Okay. Thanks, Zvi. And then just a follow-up. Can you talk about your appetite to kind of lean into your balance sheet during this macro downturn? I mean, you've got—because of your balance sheet, you might have some wherewithal that some of your competitors may not have. Can you talk about the appetite to lean into R&D, to potentially look at some M&A, so that you're even better positioned coming out of this downturn, competitively? So you know what? I'll use the opportunity, Mark, to give a broader perspective that is not directly related to the balance sheet, partially related to the balance sheet, but partially related to the P&L. With all that's going on, it's important to put in perspective that we are firm believers in not only in the long term, but also the midterm trajectory of this market. And the core markets that we serve, which are rooftop solar of residential and C&I. Not only in the, you know, the long-term growth of these markets for PV and inverters and optimizers, but also the evolution of the broader solutions that we're seeing that include batteries, EV chargers, smart energy management software to manage them, grid services, applications, you know, cyber protection. So at the highest level for us, in terms of priority, is to continue and develop the portfolio of products that is going to serve these markets and put us in the leadership or keep us in the leadership position that we are. And we see this situation and the modeling that we give also as a transient, that is not sure how long it will take and when it will happen, but in a market that is attractive, that has long-term value, and that we are very well positioned to lead. And that includes the answer to the question that you have. And where we see the potential to strengthen, accelerate, or improve our differentiation along those served markets, we will use also our balance sheet to do so, definitely. Thank you. Our next question comes from Julian Dumoulin-Smith of Bank of America. Your line is open, sir. Thank you, operator. Appreciate it. Good afternoon, team. Really appreciate the opportunity. Look, just to kind of circle back here to square one, can we recap a little bit about how we got here, right? I mean, I know we're talking very specifically about the trajectory of the recovery, but can we step back a little bit and understand, you talked a moment ago about June 2023 being a high watermark. But, you know, obviously there was some share insider transactions during the summer. And then obviously, things rapidly deteriorated. How do we get confidence on the outlook here? Can you walk us through a little bit more of the sort of month-by-month playbook from that June 2023 watermark to where we are today, if you will, through the course of the year? Obviously, how it gives you the confidence in 4Q, but just how this happened so swiftly at such a pace that we didn't see this, or presumably you guys didn't identify it earlier in its coming. Again, I just really wanna step back and kind of highlight that, and how swiftly the cycle moved, and what are the parameters that perhaps lessons learned that you guys would identify today after what sort of transpired here, if you don't mind. And I appreciate your thoughtfulness around this. Yeah, Julian, thank you for the question. So, I'll start maybe by going back to Q1, because we need to understand that, again, this pattern that we see is coming after 2022, that was a COVID year. And when we're trying to analyze the business and see where it's going, we're looking at, I would say, three major sets of data. The first one is, of course, how much we're shipping and where we're shipping it. Second is what is the point of sale data that we see coming out from our distributors, and as mentioned by Zvi, it's something that we measure on a monthly basis. And then we're looking at the inventory levels that are basically a result of these two things. Up until the very beginning of Q1, we saw that our shipping is almost one-to-one correlated and merged with the point of sale data that we saw from our distributors. So that means that on one hand, you saw very little inventory days in the channel. If you recall from our calls at that time, we said that in some cases we saw close to zero inventory of Three-Phase products, and we sometimes saw one or one and a half months of Single-Phase products. This is something that we have looked at consistently. At the beginning of Q1, we started to see a relief when it comes to our ability to manufacture Single-Phase products. We saw gradual relief that actually materialized in full only in Q3 this year, in our ability to provide three-phase products, especially the commercial products. What we saw is that during Q1 and into Q2 and Q3, we came back to the normality of a growing market, where our shipment into the channel are higher than the actual point of sale. When we took the two ratios, our sales into the channels and the point of sale data, we saw that the overall days inventory on hand are ranging between 60-90 days, which is the normal level that we would usually see. By the way, it depends based on the distributor. Some of them would like to be at a higher level because they're less efficient or more distributed, and some will be more tight. But we started to see a very nice correlation between the two. We saw a very steep increase in the point of sale data, sell-through data, and therefore, we felt comfortable with the numbers that we're shipping, and we continue to monitor all the time the inventory on-hand days. Now, when we're getting the reports on a monthly basis, usually it happens around the 20th of the following month. So, I would say that when we started July, we at the 20th of July, approximately, got the June numbers from Europe that were significantly higher than everything that we've seen before. These were record high number. And as such, our customers continued to make orders and, or to accept orders because the backlog was also already there. If you remember, we had a very large backlog. Comes the end of August, we are receiving the July data, which is lower than June, but this is again, typical because we see a lot of vacations happening in Europe around this time, and we see a decline. But by the way, not a huge decline, but we do see a decline. Usually, August numbers are either flat or I would say relatively, similar to the ones that we see in July. So comes the end, after the 20th of September, that we're getting the August numbers from Europe and the United States, and we see that August is down compared to July. Again, not dramatically down, but it is down. But at that time, this is very end of September, our distributors start to see, and by the way, we do not, but they start to see that September is not materializing as they expected. And usually, the pattern that we used to see over the last, I would say, several years, is that usually you see a slower July and, August compared to June, but then you see a jump in September. Actually, we were told by them that the expectation is to see a very strong September, and, and they acted upon this. But when they started to see that September is not materializing, this is the last, I would say, two weeks of the quarter, we saw an increasing declines of orders and a much more pressure to, delay orders. When we received actually close to, I would say again, 15-20 of October, the September data, we actually found that September for the first time for many years, was lower than the actual August numbers. This is the area that was a little bit surprising. Now, the result is, and this is what is leading to our Q4 numbers and guidance, is that again, when you take the inventory levels that you see, that we're continuing to grow up again, because everyone until sometimes the middle of August, expected to see relatively, a similar behavior. Now, you see that the inventory on the hand days are very, very high, much higher than the 90 days that usually are in the channels. This is when we understood together, by the way, with our customers, that December can, or the Q4 cannot look even like the one that was Q3 because of this decrease. The data that we're now waiting for, and again, we do not have yet, is how October looks like. We believe that it's gonna be better than September. I do not have any data to see how big, better it is, but this is the basis of our cautiousness. As you can understand, this is a pattern where the deviation from the pattern that we used to see was something that was actually, I would say, understood in the two to three last weeks of September and not before. And that led to basically the fact that a lot of our cancellations and orders came actually at that point of time or pushouts. So I hope I answered your question. Maybe Julian, on the topic of, of course, you know, the dynamic is, as Ronen described from it, but we need to learn from it. One of the elements that is meaningful, that also we are talking with our distributors and how to handle, is visibility into the inventory levels at the installers. Because what happened as part of this dynamic is, you know, we're coming off of an unprecedented event in terms of the surge in demand, the lack of availability. Everybody was building on inventory, including installers that typically don't take on inventory, and especially inventory of products they prefer to install. Then when they slowed down, they slowed down their orders, but they had inventory, and they consumed it, and that was not visible. So in terms of data points to add to the data that we typically track of installation rates, sell-through, inventory levels at our distributors, is inventory levels at our large installers, that will help have better clarity when fluctuations occur, especially such extreme fluctuations. We'll take our next question from Jeff Osborne of TD Cowen. Hey, great, good evening. Two quick questions on my side. Ronen, what, demand levels were assumed when you talked about a normalization of revenue at $600 million-$700 million? Is that sort of flat, with current levels? That was part one of the question. And part two is just, as the industry normalizes, whenever that is, next summer, why, why wouldn't there be a knife fight in terms of pricing? I know you said there was a sort of stable outlook in the quarter, and in the near term, and payment terms were more important to distributors, but it, it looks like, you know, it's a tech industry with now excess capacity. Obviously, you're rationalizing capacity. I'm not sure others will, but why wouldn't pricing go down meaningfully in the H2 of the year? Okay, so, first of all, I'll start by saying that, yes, as you mentioned, the way that we modeled the normalized level is taking the point of sale data for the last three months as it is, and therefore, yes, if there's going to be recovery in this, then we can see a higher number. I would say that we do take in our numbers, also an assumption about changes in pricing. As you have mentioned, right now, we did not change our prices within Q3, and I'm not sure that we will do anything on the inverter side, at least in Q4, given the fact that we believe that with the inventory levels that you see right now, there is almost zero impact on a changing pricing. First of all, because nobody's taking orders, so, you know, if they're taking very little orders, no reason to change the pricing because everyone is selling the inventory that they have. Plus, we do not see that it can actually change the behavior along the elasticity of demand curves. So I must say that moving forward, we do assume that prices will have to be adjusted in some places. It is going to be very much related, you know, to the offering that we see. For example, the more markets are moving to dynamic rates, these are going actually to products that are a little bit maybe more expensive because of the fact that they're allowing better capabilities. We do believe that maybe in batteries, we will have to adjust down prices, because when we look at the competition today, yes, our prices, I would say, are not the cheapest that you see in the market. And I can tell you that in our stabilization number, there is a baked-in assumption on possible price adjustment that we will need or may need to implement. The reason that we put in there, even if we're not sure if we'll have to take them, is, as I mentioned in my answer to Brian, after this unprecedented event that, you know, that we're missing a quarter, never happened, this company history, we wanted also to be very cautious in the way that we're modeling. We'll take our next question from Jonathan Kees of Daiwa Capital Markets. Your line is open. Great, thanks for taking my questions and, squeezing me in here. I'll keep mine quick in the interest of time. So, I wanted to ask regarding, I guess the, the call up in Israel. You talked about it's about 11% of your staff there, and 6% worldwide. That seems kind of, to me, I guess, somewhat, significant, maybe not material, but significant. I wanted to ask, is that the call up more, across the board, or especially in Israel, is that more like with the, your business folks, your professionals, your, engineers, obviously under 40 and male, or is it across the board in terms of just occupational and the professional level? I'll leave it with that, and I'll take the rest of my questions, offline. Thanks. Yeah. So, a quick correction, it's male and female, so it's not... it's even in that regard. You know, it... Our manufacturing and business activities are mostly operated outside of Israel and not dependent on anything significant in Israel, not infrastructure and not people. And that's why this does not have any impact on our execution towards our customers. From an R&D perspective, there is an impact, as I mentioned. The call-up is quite evenly distributed across the different departments, and that gives us the ability to reallocate and move around people to make sure that the main projects are staffed with critical mass to move them forward. It's actually aligned with the business discussion that we're having over here, that this type of business environment is the right one to focus and to identify what are the real key drivers of the business, and put the right quantity and quality of people on them. So that's what we're doing for both reasons. In that regard, what is important to execute in the business, we are able to support without interruption. Our final question comes from Andrew Percoco of Morgan Stanley. Great. Thanks so much for taking the question here. I just want to discuss some of these backlog cancellations, and apologies if you already answered this. But can you maybe just walk through your decision-making process on why you decided to accommodate those requests? And I guess, how do we gain comfort that this is truly a you know, one-off in nature? And I guess, is there anything that you got in return, maybe concessions on payment terms for future orders, or just to make it maybe a little bit more mutually beneficial in the long run? Thank you. Yeah, I'll keep it short, but, you know, we've been operating in Europe since 2010. We grew our position and market share in multiple countries through building long-term relationships and delivering quality products and services. We've done this with a network of partners, both distribution partners and installation partners, across all of these countries. We intend to continue to do that with them for years to come. So that is at the core of our decision process and consideration, that this is a long-term, huge market. These are quality players that we've been working with, and we will continue to do so. Fluctuations and ups and downs and helping each other out during critical times and not sticking to the letter of the law to force them to take inventory that they don't need and put them in a financial hazard, we thought that's not the right thing to do as part of our long-term view of the future of the market and where we are within that market. This does conclude today's question-and-answer session, as well as our call for this afternoon. You may now disconnect your lines, and everyone, have a great day.