Welcome to the SolarEdge Conference call for the Q4 and year ended December 31st, 2024. This call is being webcast live on the company's website at www.solaredge.com and the Investors' section on the events calendar page. This call is the sole property and copyright of SolarEdge. With all rights reserved, any recording, reproduction, or transmission of this call without the express 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. Please begin. Good morning. Thank you for joining us to discuss SolarEdge's Operating Results for the Q4 ended December 31st, 2024, as well as the company's outlook for the Q1 of 2025. With me today are Shuki Nir, Chief Executive Officer, and Ariel Porat, Chief Financial Officer. Shuki will begin with a brief review of the results for the Q4 ended December 31st, 2024. Ariel will review the financial results for the Q4, followed by the company's outlook for the Q1 of 2025. 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 earnings press release, the slide presentation posted on our website ahead of this call today, and our filings with the SEC for a more complete description of such risks and uncertainties. Please note during this earnings call, we may refer to 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 being presented 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. Reconciliation of these measures can be found in our earnings press release, slide presentation, and SEC filings. 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 December 31st, 2024 press release or the supplemental material may obtain a copy by visiting the Investor Relations section of the company's website. I will now turn the call over to Shuki. Thank you, J.B. Good morning, everyone, and thank you for joining today. SolarEdge is a global leader in renewable energy solutions, recognized for its innovation, engineering excellence, and strong customer relationships. While we've faced challenges, the long-term potential in solar storage and energy management has never been stronger. That's why I feel both honored and excited to step into this leadership role at such a pivotal time. Since joining SolarEdge several months ago, I've spent my time diving into the business, listening to customers, and connecting with our global team. These experiences and my learnings have helped me form a clear understanding of where we are and what we need to do differently moving forward. Everything I have seen and heard tells me we have significant strengths to build on. Demand for electricity is growing relentlessly. Solar is among the most cost-effective sources of energy, and SolarEdge is well-positioned to lead this market due to the unique combination of our innovative technology, brilliant people, loyal distributors, over 70,000 installer partners, and the millions of homes and businesses that benefit from SolarEdge systems on a daily basis. Our financial results in recent quarters have been disappointing to our shareholders and employees, and it is clear we need to significantly change the way we operate to win back customers, extend our technological leadership, and return to growth. To drive this turnaround, I have identified four key priorities: strengthening our financials, regaining market share, accelerating innovation, and ramping up U.S. manufacturing. These initiatives will not only help us navigate the current environment but also position us for sustained long-term growth. A key pillar of our turnaround is strengthening our financials. In Q4, we generated approximately $26 million in free cash flow, above our forecast and ahead of schedule. We expect to generate positive free cash flow in Q1 2025 and remain free cash flow positive for the year. This progress will be driven by disciplined cash management, inventory reductions, and a fast transition to U.S. domestic content. Positive cash flow is an essential first step, but our turnaround includes a relentless focus on operational efficiency to drive our return to profitability. In early 2025, we made a very difficult decision to make additional headcount and expense reductions. We will continue to implement cost-saving measures by focusing on core projects, markets, and product lines. We are evaluating the outlook for our e-Mobility and SolarGik tracker businesses. Our second priority is regaining market share. As you may recall, back in November 2024, we launched a campaign to partner with our channel customers in Europe and international markets. The objective is to bring more attractive offerings to installers, help our distribution partners reduce their inventory levels, attract new customers, and grow share. More recently, we have simplified our go-to-market structure to enhance agility, flattened the organization to get closer to our customers, and strengthened our partnership with distributors and installers. Our sales team is now laser-focused on reinforcing our core value proposition. We are a technology company developing industry-leading hardware and software solutions that enable the generation of more energy and increase the ROI of our customers. Our solutions include advanced safety and cybersecurity capabilities, which have become increasingly important in recent quarters. Our value extends beyond just product. We have been heavily investing in delivering an excellent customer experience. We believe that our service and support organization stands out for its excellence in the industry, with less than two-minute average waiting times at our worldwide call centers. Our third key priority for 2025 is accelerating innovation across both residential and commercial markets, ensuring we remain at the forefront of smart energy solutions. In residential, we continue to prioritize energy management software, which we see as a key driver for future growth. We believe we are the hardware vendor with one of the most sophisticated energy management software capabilities. In Europe, we recently introduced the SolarEdge ONE controller. This new product integrates third-party devices such as EV chargers and heat pumps into the SolarEdge Home ecosystem, optimizing energy usage and maximizing savings. Moving to our next-generation residential portfolio called Nexus, which includes our most powerful residential inverter to date, a modular battery, and a Meter Collar Solution. We have just begun the alpha phase and are on track to deliver initial volumes of Nexus products during the Q4 of 2025. We believe that the Nexus solution will allow us to be more competitive in the marketplace. It generates more energy, shortens installation and commissioning times, addresses additional market segments, and reduces our cost structure. Moving to C&I, we are getting excellent traction with our commercial battery product. We have already sold this product in Germany, the Netherlands, Italy, the U.K., France, Spain, the Czech Republic, Poland, Hungary, Taiwan, and South Africa. We see commercial storage as a strategic growth area for us. And here again, customers are choosing our storage product in particular because of the energy management solution we offer around it. Our fourth focus area for 2025 is ramping up our U.S. manufacturing. We are now manufacturing inverters, optimizers, and batteries in the U.S., and have already created nearly 2,000 jobs at our facilities. Our Austin facility has ramped up to a run-rate capacity of over 70,000 inverters per quarter, and our Florida facility is on track to reach a run-rate capacity of 2 million optimizers per quarter in Q1 2025. We have started reaping the benefits from this build-out by offering our customers a reliable supply of domestic content inverters, optimizers, and batteries. This allowed the signing of safe harbor agreements with two residential customers in late December, supporting them in their goal to lock in attractive project economics. We have also started to ramp up our domestic content commercial inverter manufacturing, with initial volumes expected at the end of the Q1. We recently signed a supply agreement with Summit Ridge Energy, one of the largest developers of C&I solar in the U.S. This agreement demonstrates the competitive advantage that our domestic content product will deliver, particularly in large-scale rooftop solar. Before handing over to Ariel to discuss the financials, I'll provide a high-level update on the regions. Our sell-through for Q4 was approximately $400 million. In North America, our sell-through was down 17% quarter-over-quarter. Our channel inventories here remained largely normalized. While there is additional uncertainty in the U.S. market due to potential policy changes, the long-term underlying fundamentals of the solar market are healthy. In Europe, our sell-through was roughly flat quarter-over-quarter. The European market remains challenged due to continued macro headwinds, and we expect the vast majority of our distribution partners to reach normalized inventory levels by the end of Q2 2025. To summarize, we have to focus on what we can control. We have to get back to our roots of passion for innovation. We have to implement best-in-class execution across everything we do, and we have to make fast and sometimes tough decisions to right-size the company. By doing so, we will accelerate our turnaround and position SolarEdge to reach its exciting full potential as a leader in solar storage and smart energy management in the years to come. I look forward to sharing our progress with you in the quarters ahead, and with that, I will turn it over to Ariel. Thank you very much, Shuki, and good morning, everyone. As Shuki discussed, strengthening our financials and specifically working towards positive free cash flow generation is our top priority. In November, we saw the first tranche of 45X advanced manufacturing production credits. This first tranche was backed by inverters that were eligible for a $0.065 per watt credit. In December, we saw the second tranche of 45X credits that were backed by both inverters and optimizers, making them eligible for the full $0.11 per watt credit. The liquidity provided by the sale of these credits has enhanced our cash position and has further strengthened our balance sheet. The sale of 45X credits is now a normal course of our business, and we will not report it separately in the future. In terms of our expenses, we continued refocusing our business and further reducing costs. In November, we announced the closure of our energy storage division in South Korea. In January, we made the difficult decision to further reduce headcount by approximately 400 employees worldwide. We intend to take further steps to rationalize our cost structure by focusing on core projects, concentrating our global footprint on profitable markets, and exiting non-strategic markets and product lines. Our target with these cost reduction measures is to lower our non-GAAP OpEx to a range of $85-$90 million per quarter by the end of 2025. Before reviewing the results of the Q4, I would like to address two items that impacted our financials in Q4. First, we impaired and wrote off various assets during the quarter, starting with inventory. This quarter, we wrote down $115 million of inventory, of which approximately $87 million net is related to our solar business. This is excess inventory on our balance sheet that we no longer expect to sell, given our expectation that the recovery in the European markets will take longer than anticipated. The remaining $28 million, which was excluded from non-GAAP, is related to both inventory and non-cancelable, non-returnable items that are related to our energy storage division in Korea. In addition, we wrote down and impaired $23 million of long-lived assets and other assets, all excluded from non-GAAP. The majority of this amount relates to impairment of PP&E and other assets of our Korea storage division. The second topic I would like to point out is that during the preparation of the audited financial statements and subsequent to filing the Form 10-Q for the Q3 of 2024, the company considered an amended agreement with a customer, which was signed on December 21, 2024. In connection with such amendments, the company determined it was appropriate to revise previously reported revenues and loans receivables with this customer in the amount of $25.5 million for the three and nine months ended September 30, 2024. The impact on the company's consolidated financial information as of September 30, 2024, was a relocation of the $25.5 million of cash received in Q3 from the customer to a reduction of the loan and, accordingly, a reduction of revenues. The revision for the various line items appears in the earnings release, presentations, and supplemental tables. And now I will go into the quarterly results. Total revenues for the Q4 were $196.2 million. Revenues from our solar segment were $189 million. Solar revenues from the U.S. this quarter amounted to $114 million, representing 60% of our solar revenues. Solar revenues from Europe amounted to $44.8 million, representing 24% of our solar revenues. International market solar revenues amounted to $30.3 million, representing 16% of our total solar revenues. On a megawatt basis, we shipped 384 megawatts to the United States, 231 megawatts to Europe, and 280 megawatts to the international markets for approximately 895 megawatts of total shipments. 63% of total megawatt shipments this quarter were commercial and utility products, and the remaining 37% were residential. In Q4, we shipped 130 MWh of batteries, with the majority shipped to Europe. ASP per watt, excluding battery shipments, was $0.208, up 2% from Q3. Higher pricing in the U.S. and a higher mix of shipments to the U.S. market more than offset our price reductions and promotions in Europe and international markets. Our blended ASP per kWh on all PV-attached batteries was $262 in Q4, down from $317 in Q3. This decrease is largely due to price reductions and promotions, as well as a higher mix of non-U.S. shipments. Revenues this quarter from our non-solar business amounted to $6.9 million. As we have announced the closure of our energy storage business in Korea, going forward, we will not report segments in our financial reporting. Consolidated GAAP gross margin for the quarter was a negative 57.2% compared to negative 309.1% in the previous quarter, largely impacted by the impairment charges and write-downs taken in both Q3 and Q4. Non-GAAP consolidated gross margin this quarter was negative 39.5% compared to the negative 305% in Q3. This was largely impacted by the impairment charges and write-downs taken in both Q3 and Q4. Excluding the net impairments and write-downs of approximately $87 million, non-GAAP gross margins in Q4 would have been 4.8%, which was above our guidance range. Solar segment gross margin this quarter was negative 38.8% compared to the negative 285.4% in Q3. This was largely impacted by the impairment charges and write-downs taken in both Q3 and Q4. Excluding the net impairments and write-downs of approximately $87 million, solar segment gross margins in Q4 would have been 7.3%, which was above our guidance range. On a non-GAAP basis, operating expenses for the Q4 were $106.8 million compared to $116.3 million in the previous quarter. GAAP operating loss in Q4 was $263.7 million compared to an operating loss of $1.11 billion in Q3. Non-GAAP operating loss for Q4 was $184.1 million compared to a non-GAAP operating loss of $833.6 million in Q3. GAAP net loss was $287.4 million in Q4 compared to a GAAP net loss of $1.23 billion in Q3. Our non-GAAP net loss was $202.5 million in Q4 compared to a non-GAAP net loss of $899.8 million in Q3. GAAP net loss per share was $5 in Q4 compared to $21.58 in Q3. Non-GAAP net loss per share was $3.52 in Q4 compared to $15.78 in Q3. Turning now to the balance sheet. As of December 31, 2024, cash, cash equivalents, restricted cash, bank deposits, restricted bank deposits, and investments were approximately $767 million. Net of debt, this amount was approximately $82 million. This quarter, cash provided by operating activities was approximately $38 million. Net of approximately $12 million in CapEx, free cash flow generated in the quarter was approximately $26 million. AR net decreased this quarter to $160.4 million compared to $239.4 million last quarter. Our inventory level, net of reserves, was $645.9 million compared to $798.4 million in the previous quarter. This figure is, of course, inclusive of the $115 million in impairments we took in inventory in Q4. During the quarter, we consumed roughly $90 million of finished goods. Turning now to our guidance for the Q1 of 2025. We are guiding revenues to be within the range of $195 million-$215 million. We expect non-GAAP gross margin to be within the range of 6%-10%. We expect our non-GAAP operating expenses to be within the range of $98 million-$103 million. As Shuki mentioned, we expect to generate positive free cash flow in the Q1. I will now turn the call over to the operator to open it up for questions. Thank you. And at this time, if you would like to ask a question, please press the star and one on your telephone keypad. Y ou may remove yourself from the queue at any time by pressing star two. In the interest of time, we do ask that you limit yourself to one question and one follow-up question. Once again, that is star and one to ask a question. And we will take our first question from Brian Lee with Goldman Sachs. Please go ahead. Hey, guys. Good morning. Thanks for taking the questions. Kudos on the cash flow performance here. I guess the first question I had was on that topic. Free cash flow positive in Q1. You guys are ahead of schedule, it looks like. I think in the past, you're talking about positive free cash flow in the first half of this year. What level of free cash flow compared to Q4 should we be expecting in Q1? Should it be in that $20 million-$30 million positive range again? And then what's the sort of level expected for the full year? And then related to that, kind of as you think about moving into the back half of the year, you've got debt maturity to address now that you're moving into free cash flow positive levels. Kind of what's the update on the strategy around that? And then I had a follow-up. Hi, Brian. Thank you very much for the question. Yeah. As you know, we're not guiding for the second half or for the full year, but we did want to say that we will be free cash flow positive. In terms of Q1, there are many, many moving parts, so we did not disclose how much will be the free cash flow, but we are certain it will be positive. If we talk about our convert, we still have the same strategy that we had until now. If you remember, I'm sure you know that our convert has a zero-coupon bond. This is why currently our plan is to continue to wait and pay it out from the balance sheet because we know we have enough cash to do so. This is, of course, coupled with the fact that we have gone back to free cash flow generation even sooner than expected. Having said this, obviously, we're always assessing different options that are available in the market, and we'll take the right decision at the right point in time. Thank you. Okay. Fair enough. And just a question on, I think, Shuki, you mentioned $400 million of sell-through. Actual revenue recognition right now is running around half that level based on the Q4 results and the Q1 guide. So kind of what's the delta there? When do you expect to sort of have sell-in, kind of match-up to sell-through? Is it all just inventory in Europe? Or maybe walk us through kind of the cadence of having those sort of converge a bit. And then no mention on safe harbor. Could you talk about the impact of safe harbor either on the results or for the balance of this year? Thank you. Thank you, Brian. So as it pertains to your first question, like you said, there is a gap between our revenue and the underlying POS. And the main reason for that is obviously the channel inventory levels that are in Europe. As we mentioned, our expectation is that most of the channel inventory in Europe is going to be cleared by the end of the Q2. So we could expect that the sell-in and the sell-out are going to converge around that time. Obviously, as you know, it changes from month to month and from distributor to distributor, but high-level speaking, that's going to be the direction. As for the safe harbor, as we mentioned before, we are not disclosing specific details about the safe harbor. Thank you. And we will take our next question from Christine Cho with Barclays. Please go ahead. Good morning. Thank you for taking my question. If I could just do a follow-up to that safe harbor question. In the cash flow statement, I see that there was a little over $100 million in prepayment/deferred revenue. Is it reasonable to think that that was prepayments tied to safe harbor, or is there anything else that could be in there that we should be aware about? Hi, Christine. Thank you so much for the question. Yeah. Some of this was actually the safe harbor, but some of it was actually other topics where we have agreements with our customers to put some restricted cash. So this is definitely not the full amount. Okay. And then so we saw two 45X monetizations during the quarter. Can you just talk about how we should think about the cadence of future 45X monetizations in 2025? Is it like one a quarter, once every two quarters? Yeah. So first of all, I think I'm very excited about the fact that we have proven to ourselves that we can do this also already for the second time. We sold twice this in the Q4. The first time was backed only by our inverters for $0.065 per watt. And the second time was actually backed up by inverters and optimizers together, making us eligible for $0.11 per watt. We believe that we can actually sell this in the following quarter, which means we can accumulate the IRA tax credits and sell them in the following quarter. But of course, as usual, this depends on demand and how the market will develop. Thank you. And we will take our next question from Colin Rusch with Oppenheimer. Please go ahead. Thanks so much. Given what your comments are on the reserving, I just want to get a better sense of how many customers may go through similar renegotiations here and what sort of risk there may be to any of your receivables that you still have outstanding. Thanks, Colin. Look, I think, first of all, the revision was a conservative accounting treatment. It was related to the amendment with the contract with the customer, as we mentioned. We don't usually give loans to customers. This is not part of our normal course of business. So I wouldn't say I don't believe this could be affected again in the next time. Okay. Thanks for that. And then just in terms of the new products and the development activity that you're working on, when can we start seeing some of the newer products and revised designs start coming to market? And how should we think about the initial target markets for those products? Yes. Thank you for that question, Colin. I'll take it. So as we said, we are very excited about the new product line that we're about to release towards the end of the year. It's a combination of our largest residential inverter that we've ever made together with a battery. And the inverters are both for the three-phase and the single-phase, so both. The first markets in which we are going to introduce them are going to be the U.S. and Germany, being the biggest and the largest opportunity market. And we are very excited about the opportunity that these products will bring to us as they open new segments and are going to allow us to increase our market share, but also it's a cost-reduced type of product that will hopefully allow us to expand our margins as well. Thank you. And we will take our next question from Mark Strouse with J.P. Morgan. Please go ahead. Great. Excuse me. Thanks for taking our questions. On the last call, we talked about some pricing actions that you were doing, excuse me, primarily in Europe. Can you just give us an update there a s you expect the channel inventory to clear by the end of 2Q, like you're saying, can you talk about kind of the cadence of your pricing? Are you expecting that to kind of normalize throughout that same timeframe or any reason that it might be kind of accelerating the pace of those one way or the other? I have a follow-up. Thank you. Yeah. Thank you for the question. I appreciate that. Yes, as we said before, we started the promotions with our distribution partners back in November. And as we said, we expect to see the initial results coming in the Q2. As you know, these things, it takes time between the distributor to the installer until we see the impact on market share and actual installations. And so we haven't seen a major impact yet. The market in Europe, as you know, is not that great at this time of the year. And we expect that the value we bring to our distributors and our customers with these price promotions is going to help us gain share over there. We've actually energized our sales team. And together with the other improvements that we've made to the customer service and the open and closed communication with these customers, we believe that we're going to see some positive results. Okay. And then on the 45X side, I understand what you said about the transfers becoming part of normal course now, so you're not going to break out that cash flow anymore. When the tax credits are generated, though, are you still going to provide information in your 10-Q as far as kind of the actual generation each quarter just based on the unit volume? Thank you. Yes. Thank you. Of course, we will continue to give this information, but as you mentioned, rightfully, this is part of our normalized business now, and we won't report it separately. But yes, on the 10-Q, yes. Thank you. And we will take our next question from Andrew Percoco with Morgan Stanley. Please go ahead. Thanks so much. Good morning, guys. Thanks for taking the question here. I just wanted to come back to the write-down for a second on the inventory side. Obviously, the second one we've seen in two quarters. I'm just trying to get a better understanding of what drove that, and is there a potential risk that we continue to see that next quarter as we roll ahead? Yeah. Thanks, Andrew. As I mentioned in the prepared remarks, the main reason for this was basically that we saw that Europe is weaker than we thought. We obviously consistently evaluate every quarter all the items on our balance sheet, specifically, of course, or especially at the end of the year. This is why we have decided now, after also reviewing everything, after having discussed with the markets, we believe that Europe is actually a bit weaker. To the best of our ability, this is currently the best judgment that we have now. And this is why we took these actions. Okay. Understood. That makes sense. And maybe shifting gears to the U.S. for a second. I think you said sell-through was down 17% quarter-over-quarter. Can you maybe just discuss your latest expectations for growth throughout the balance of 2025? Maybe some of the sell-through weakness was seasonal in nature in the Q4, but just curious your latest thinking in the U.S. just given maybe some of the policy uncertainty as well as elevated rates in the U.S. Yeah. Thank you for this question. As you know, we don't provide guidance for the Q2 or for the year. But that said, we are focused on turning around the business. And as we shared with you, financial stability is our top priority. And we've already achieved the positive free cash flow ahead of schedule, and we expect that free cash flow to remain through the year. And because we are going to continue optimizing our cost structure and bringing innovative solutions to the market together with the clearing of the inventory in Europe, we believe that towards the back half, we believe that it gives us a good view into what I believe will be a stronger momentum as we go forward through the year. Thank you. And we will take our next question from Philip Shen with Roth Capital Partners. Please go ahead. Hi all. Thanks for taking my questions. First one is a follow-up on the $25 million recategorization of revenue and loans. I was wondering if you could give us a little bit more color on this customer. Was it a U.S. resi customer? How much more in terms of loans do you have outstanding with this customer? And how much more risk is there that there could be, I guess, restatements? Thanks. Hi, Phil. Thank you so much. I'm sure you can understand that we have disclosed publicly everything that we can disclose, and we cannot disclose further details on this topic. Okay. All right. Thanks, Ariel. As a follow-up on pricing, you guys talked about the price actions that you recently took. Given the fact that the market is weaker than expected in Europe, do you anticipate more price action ahead? And can you talk about the competitive dynamics in Europe? Are they becoming more intense, less intense? We wrote recently that some of your Chinese competitors might be offering Powerwall-like offerings where the inverter and the storage box are combined. And so I was wondering, I know you have new products coming out by year-end of this year, but between now and then, you may have to compete with some of these other offers. So I was wondering, how are you competing against these new offerings from others and just what the competitive dynamics are? Thanks. Yeah. Thank you for your questions. I'll try to answer all of them. And if by coincidence I don't answer all the parts of your question, please remind me of that. So with regard to the pricing action that we took, as we mentioned, we feel that it was the right move to make. It is done together with our distribution partners, and it's in an attempt to regain our market share and to increase our in-house share within current installers and gain new customers. And as we said, we are going to see initial results for that in the Q2. So until then, we are not entertaining anything significant in terms of additional p rice move. When we get the results, we'll evaluate where we are and we'll take the necessary actions. As I mentioned earlier, one of our four initiatives is to gain market share. Pricing is not the only lever to gain market share. We are working closely with our customers in order to bring them more value, whether it's value in terms of new products, better service, and other things that they find valuable, such as better installability of the equipment. When you refer to other competitors in Europe, I'd like to remind you that the SolarEdge solution is a premium solution. We provide not only the inverter and the optimizers and the battery, but actually a suite of software solutions that help people manage their energy better, both in residential and the C&I segments. Especially in Europe, energy management is becoming something that brings a ton of value to the customers because of dynamic tariffs, sometimes negative tariffs. And the ability to actually smartly manage the production and consumption of energy is something that can generate a lot of value to our customers. The second thing that is working in our favor is obviously something that you're very familiar with, is the MLPE solution, the optimizers that we bring. Basically, we generate more power compared to other string inverters in a given set of modules. And the third thing that I would mention here is the importance of safety and cybersecurity has increased recently. And we believe that customers appreciate the level of safety and the level of cybersecurity resilience that we bring to the picture. Thank you. And we will take our next question from Maheep Mandloi with Mizuho. Please go ahead. Hi. This is David Benjamin on for Maheep. Can you give a little bit more color around your current strategy around batteries for the remainder of the year until we get to the new products? I know you had some higher-priced inputs that were dragging the margins. Are you going to continue to offer those products? I have a follow-up. Yeah. Thank you for your question. So yes, both in Europe and in the U.S., we offer batteries to our customers, and we intend to continue doing so until the new products are arriving. The current environment in the U.S. is such that with the recent change of 48E, which considers the battery and the solar system as separate for domestic content purposes, actually positions us very well vis-à-vis our competition. We are seeing actually some we believe that there is some uptick that we can expect for our battery solution, for our storage solution. Overall, the batteries are very, very good. As you know, the SolarEdge solution comprises of DC coupling. When you have the SolarEdge inverter coupled with the SolarEdge battery, the customer basically benefits from much less conversions, which by definition means better usage or better efficiency of their energy. That is going to be the case until the end of the year. In that case, we're going to introduce our next generation. These batteries are actually over there. The solution, as I said, is about the complete solution. We actually paid extra attention to the installability of the batteries. It's going to be a modular solution. So our customers can choose to sell or to buy one battery model or two or three. And that modularity, first of all, allows them to have an entry-level deal and then to upsell. And secondly, it's much, much easier to carry them. The serviceability is going to be better. So it's a product that is actually going to make our customers' lives much better and much easier. Great. Thanks for that. And then just a follow-up on that. Can you talk a little bit about attach rates for the commercial segment and resi in Europe and the U.S.? At the moment, you asked about commercial attach rate of storage? Yeah. Okay. So at the moment, industry-wide, the attach rate of storage to commercial is quite low. We are excited about the opportunity in that area, and we believe that the attach rate is going to actually grow. But at this stage, as I said, it's a pretty low attach rate. Our product offering, actually, this is why we said it in the prepared remarks, the product that we offer is actually positively received in different markets because they do anticipate the attach rate to go up. Thank you. And we will take our next question from Chris Dendrinos with RBC Capital Markets. Please go ahead. Hi. Good Good morning, and thanks for taking the question. I wanted to go back to the next-gen product launches and specifically just kind of hone in a bit more around any kind of operational impacts that that launch might have, I guess, specifically tied to the cost structure. And should we be thinking that this next-gen launch improves the manufacturing cost structure? And then can you, I guess, specifically comment on anything that might happen with the margin profile there? Yeah. Thank you for your question. I'll start, and then when we get to the margin profile, if Ariel has really something to add, you can. So as I mentioned, we are excited about the new product solution that we are going to introduce. We believe, and at this stage, all indications are that the cost structure is going to actually improve, and we try to design these products for manufacturability, and we expect to ramp them up in our U.S. manufacturing facility. As I mentioned, a major part of our turnaround story is the ramp-up of our U.S. manufacturing. We've already created more than almost 2,000 jobs in the U.S. in our Florida and Texas facilities, and we expect to be able to ramp up the manufacturing of the new products in the U.S., which provides for some additional benefits, as you know. Yeah. Thank you. Maybe from a gross margin perspective, of course. As Shuki mentioned before, from a priorities perspective, our number one priority is financial stability. Also here, of course, we strive to improve our gross margins. When we develop and design the new products, of course, we also make sure that the gross margins are better. We use different components, different capabilities, different software installability. This will actually allow us to improve our gross margin or reduce the cost positions compared to our current generation of products. Thank you. We will take our next question from Julien Dumoulin-Smith with Jefferies. Please go ahead. H ey, good morning, team. Thank you guys very much. Appreciate it. Nicely done. Pleasure to meet. Just with respect to the cost structure here, can you speak a little bit to what sort of an ongoing run rate would be? And we just want to come back to the conversation from earlier. You identify ongoing cost cuts, but also some of the impacts here from the announcements in the last handful of weeks and months. How do you think about 1 Q guide here being representative of that, or what do you think a good run rate? I appreciate you guys aren't providing a full year or ongoing guidance here, but I just wanted to get a little bit more sense there. And then separately and related, you talked by mid-year about having inventories seemingly normalized with respect to your solar products. You disclosed about a $600 million-ish total inventory today. Can you break that down a little bit? What else is in that number as you think about getting to the mid-year and having a little bit more sell-in versus sell-through normalize a little bit? Yeah. Thank you. So again, I think, as you rightfully said, we don't guide for the year. But we do believe that Q1 still has a relatively low revenue. This is seasonality. When we look at the year, I think we spoke about this before. We believe that we will go by seasonality. We do have the safe harbor. And in the second half of the year, we will have the inventory clearing. Of course, with a lower revenue, this will help us increase our gross margin. In addition to that, we're also working on reducing our cost structure everywhere. We announced the closure of Kokam and other initiatives that we also launched with reduction in forces and others. We gave a new operating expense target for the end of the year. And with that, basically, we will be able to improve our cost positions. We also have some fixed portions that we're working on in the cost structure. And I'm very happy and excited that already we were able to reduce it a bit. We're looking at different levers, I would say, to pull here in order to reduce those. Some of them, for example, are the under-utilization that we had in our Kokam facility that we are now closing. So putting all these together, I would say that Q1 does not represent the full year. And we believe that we can even increase our gross margin and improve our cost additions going further. In terms of the inventory, I hope I remember your question correct. Yeah, we have 600, give or take, approximately $600 million of inventory now. And we believe that for the U.S., we still need to manufacture. We will continue to manufacture to service the U.S. market. And for Europe, we will go back to normalized levels of inventory in our channels and will consume our inventory. And we'll go back to normalized levels of inventory also on our balance sheet by the end of the year. Thank you. And we will take our next question from Moses Sutton with BNP Paribas. Please go ahead. Thanks for squeezing me in. So just continuing on the gross margins, where are incremental gross margins on U.S. residential inverters? So is it 25%-30%? Basically, I'm referring to if you exclude the distortions from fixed COGS that have held back the margins at these lower revenue levels, where would you say the range of unit margins are for an inverter, an incremental one-fold? Yeah. Thank you so much. We don't disclose this. This is part of our cost structure that we don't break down into different components. Thank you. And we will take our next question from Dylan Nassano with Wolfe Research. Please go ahead. Hey, good morning. I know safe harbor has been kind of covered a couple of times already. I apologize if I missed this, but did you say how much of the 1Q guide includes safe harbor? Yeah. As we mentioned, we're not disclosing this. After discussing with our customers, we decided that we're not disclosing this. And if you look at Q1, and again, as for the year, we expect normal cadence of seasonal shipments. As I said before, if we look at the U.S., specifically for the first half of the year, of course, safe harbor will have a certain impact. But also in the second half, once the inventory channels in Europe are clear, we expect a very positive impact there. So I would say seasonality impact for the full year and throughout the quarters. Thank you. And we will take our next question from Kashy Harrison with Piper Sandler. Please go ahead. Taking the question. Just two quick ones for me, and I'll spit them out there right now. On the restricted cash disclosure of $135 million, can you just provide more context on the driver there? And then as you just think about the European market more broadly, you mentioned that it's weaker than you expected. Do you expect the European end market to grow in 2025, remain flat, decline? Just maybe some thoughts on how you're thinking about Europe just broadly as a market in 2025. Thank you. Thanks, Kashy. In terms of the restricted cash, as you asked, yes, part of it is actually some of the safe harbor, but also some of it we set aside as part of some commercial agreements that we have with some of our customers and some of our vendors. So I can't break it down, but it's definitely not all the safe harbor. Yes. And as for the European market, our expectation at the moment, similar I believe to others in the industry, is that unfortunately the market is going to slightly decline this year. Even though the market is going to decline, our expectation is that we are going to gain share. We would like to gain share in the market, as we talked about in my prepared remarks. Thank you. And we will take our next question from Ameet Thakkar with BMO Capital Markets. Please go ahead. Hi. Thanks for squeezing me in. Just two quick ones for me. I appreciate that the plan is to still, I guess, retire the debt with the liquidity on hand. I was just wondering, in the second half of the year, as you kind of approach kind of normalized inventory levels and around $400 million of kind of underlying demand, how much liquidity do you kind of expect to kind of need to have on the balance sheet to kind of support the level of working capital that would be associated with that level of demand? All right. Thank you. Yeah. We still believe that a good rule of thumb to look at these things for our company is looking at next quarter's cost of goods sold for this to run the business. Thank you. And we will take our next question from Jeff Osborne with TD Cowen. Please go ahead. Thank you. A couple of quick ones on my side. I was wondering if for the Q4, if you could rank order the drivers of free cash flow. I think you mentioned $19 million of finished goods reduction, but could you disclose what the 45X payments were in Q4? It doesn't sound like you're going to disclose the prepay, but maybe of those three items, if you could rank order them and disclose 45X for the Q4. And then as it relates to the Q4 and looking out to Q1, did you disclose, maybe I missed it, but how many optimizers and inverters you made in the U.S. that would be subject to 45X payments so that we could sort of bracket or dimensionalize how much cash could be coming in from Q1 from that line item alone? That would be helpful. Thank you. Hi, Jeff. Yeah. Sorry. We decided that, again, as I said in the beginning, that from a 45X perspective, this is part of our normal business now, and we will not disclose this anymore going forward. We believe that we can generate a lot also going forward, even more so than we have generated in the previous quarters and also in 4Q, simply because we are ramping up our facility. And once we're ramped up, we can generate much more. As I said before, obviously, it depends on demand and how the market progresses on this. We have decided not to disclose this. Also, regarding your second question, sorry, we decided not to disclose this as well. Thank you. And we will take our next question from Jon Windham with UBS. Please go ahead. Perfect. Thanks for taking the questions. In the Q4, it looks like you had a good tailwind from working capital with receivables down and deferred revenue up pretty substantially. Interested in your thoughts on how much more runway there is on working capital efficiency? Yeah. Thank you. First of all, I'm sure that we have much more to do on this as well. We're working on improving this all the time. Part of the things that we're doing is also working with our suppliers to see how we can also improve our inventory management. We have started using automations in our U.S. facility to help us also improve the efficiency of this and be more accurate on how much we need to produce. I think this will definitely bring and improve our net working capital. And as usual, we're very focused on improving our operational efficiency going forward and focusing on improving our cash position. So we are looking very, very much and closely both on our AR and on our AP as well. And we'll report to you how we progress in the future. Thank you. And we will take our next question from Dimple Gosai with Bank of America. Please go ahead. Hi there. Thank you for taking my question. I guess I wanted to talk a little bit more about the gross margin guide. Can you kind of talk to us a little bit about how you're thinking about that? Is that mostly because you've written down all of the inventory? Is there a higher mix of U.S. shipments, the fixed COGS component? Just trying to kind of understand or get a better sense of how you kind of have guided that or thought the thinking behind it. Hi, Dimple. Yeah. Thank you so much. Basically, you, I think, mentioned most of the components that we have. First of all, I think the main reason why we're improving is for two main reasons. One, as you mentioned, we reduced the fixed COGS portion. To name a few things, one thing is the under-utilization that we had in Sella 2. Definitely, once we decided to close down our storage division in Korea, this will go down. A second topic is, of course, the warranty. I'm very happy that, as I said, in the last few quarters, we have done a lot of progress on improving the warranty on improving the quality, sorry, thus reducing the warranty, which is also a fixed part in our costs. So this has also had a really good impact. We'll have a really good impact also in the future. I think the third bullet point that you touched, which is also correct, is higher IRA benefits. It's higher IRA also, as you can see, in the Q4. I believe, or we believe, also going forward in the next two quarters, the U.S. market will have a predominant ratio from the entire revenue. So it's both components together. The U.S. is bigger from our perspective currently. Also the fact that we get IRA credits. Baking all of this together, these are the main levers that we see for the gross margin. Thank you. We will take our next question from Joseph Osha with Guggenheim Partners. Please go ahead. Thanks. Returning to this question about cash generation in the second half of the year, obviously, you are going to be putting some working capital to work as you reramp the business. Would you be able to generate cash flow from operations without 45X, or is getting positive free cash flow dependent on monetizing those credits? Yeah. Thanks, Joe. I mean, of course, monetizing the 45X credits is part of our ongoing business and is part of our building blocks now. But of course, once we have more demand, our working capital should improve. But as I said, this implies the fact that we have much more demand and better outlook. As I said before, I believe that once the situation in Europe improves and we start and we go back to the normalized channels in the second half of 2025. W e will continue to sell even more from our balance sheet because we have inventory from our balance sheet that pertains to Europe. This, of course, does not mean that we have to invest more cash into it because the inventory already exists, and as for the additional working capital that we need for the U.S., we will fund it and then sell the credits, as you rightfully mentioned, and it will more than fund itself. Thank you, and we will take our last question from Austin Moeller with Canaccord. Please go ahead. Hi. Have the price reductions had a positive impact in the European market relative to competing Chinese products? Yeah. Thank you for your question. As we said, we believe that we will see the impact of the price promotions and the campaigns that we launched back in November only in the Q2. So we believe that it will make an impact, but we haven't seen and we haven't reported anything yet. Thank you. It appears that we have reached our allotted time for questions. I will now turn the program back to Shuki Nir for any additional or closing remarks. Yeah. Thank you, everyone, for joining us today. We appreciate that. Just to summarize what we said, we have to focus on what we can control, and we have to get back to our roots of passion for innovation. We have to implement best-in-class execution across everything we do. When we do that, we will turn the business around and bring SolarEdge back to where it deserves to be. We will keep you updated as we make progress and appreciate your time. Thank you very much for joining the call. Thank you. This does conclude today's presentation. Thank you for your participation. 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