Christina Carrabino - IR Badri Kothandaraman - President and CEO Eric Branderiz - CFO Raghu Belur - Chief Product Officer.

Colin Rusch - Oppenheimer & Company Brad Meikle - Williams Trading Eric Stine - Craig-Hallum Philip Shen - ROTH Capital Partners Carter Driscoll - B. Riley FBR Pavel Molchanov - Raymond James.

Good day, ladies and gentlemen, and welcome to the Enphase Energy's Third Quarter 2018 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct the question-and-answer session and instructions will follow at that time. [Operator Instructions] And as a reminder, this call is being recorded.

I would now like to turn the call over to Christina Carrabino. Please go ahead..

Good afternoon, and thank you for joining us on today's conference call to discuss Enphase Energy's third quarter 2018 results. On today's call are Badri Kothandaraman, Enphase's President and Chief Executive Officer; Eric Branderiz, Chief Financial Officer; and Raghu Belur, Chief Products Officer.

After the market closed today, Enphase issued a press release announcing the results for its third quarter ended September 30, 2018.

During this conference call, Enphase management will make forward-looking statements, including but not limited to, statements related to Enphase Energy's financial performance, market demands for its current and future products, advantages of its technology, and market trends.

These forward-looking statements involve significant risks and uncertainties, and Enphase Energy's actual results and the timing of events could differ materially from these expectations.

For a more complete discussion of the risks and uncertainties, please see the company's annual report on Form 10-K for the year ended December 31, 2017, which is on file with the SEC, and the quarterly report on Form 10-Q for the quarter, and nine months ended September 30, 2018, which will be filed with the SEC in the fourth quarter of 2018.

Enphase Energy cautions you not to place any undue reliance on forward-looking statements, and undertakes no duty or obligation to update any forward-looking statements as a result of new information, future events, or changes in its expectations.

Also, please note that financial measures used on this call are expressed on a non-GAAP basis unless otherwise noted, and have been adjusted to exclude certain charges.

The Company has provided a reconciliation of these non-GAAP financial measures to GAAP financial measures in its earnings release posted today, which can also be found in the Investor Relations section of its Web site. Now, I'd like to introduce Badri Kothandaraman, President and Chief Executive Officer of Enphase Energy.

Badri?.

energy generation, which is the grid agnostic microinverter, energy storage which is the Encharge battery with capacities of 3.3 kilowatt hour, 10 kilowatt hour, and 13.2 kilowatt hour, communication and control, which consists of the automatic transfer switch that provides fine grain load control, and the combiner box circuitry, and the fourth component is Enlighten which is the IoT cloud software.

The IQ system with its sophisticated software capabilities can address use cases ranging from grid-tied to off-grid and any possible hybrid configuration in between. In addition, the grid agnostic feature of the microinverter can be turned on and off through software remotely.

This is just one of the many software configurable options in the IQ8 system enabling a future service business within our install base.

Consequently, the Ensemble technology enables Enphase to transition from a pure-play microinverter solar company to a complete energy management system's company, bringing about a substantial growth opportunity for us.

We expect our revenue potential to increase from approximately $2,000 per home selling pure microinverter systems to over $10,000 per home selling complete energy management systems with Ensemble solar and storage technology.

We anticipate introducing the grid agnostic IQ8 systems to customers in the first-half of 2019, and realize meaningful revenue by Q4 2019, while still adhering to 30-20-10. We also expect to release the pure off-grade microinverter solution in Q4 of '18 in limited quantities as we previously discussed.

We have completed the necessary safety certification and the off-grid product is currently being field tested. In summary, our top priority is to improve profitability quarter-on-quarter, creating shareholder value.

In the near-term, our focus is to optimize the supply chain to meet additional demand, unlocking our growth vectors, and providing outstanding customer experience. In the next few years, Ensemble represents the transformative opportunities for Enphase to increase our revenue manifold by providing a complete home energy management system.

With that, I will turn the call over to Eric for his review of our financial results.

Eric?.

Thanks, Badri. I will provide more details related to our third quarter 2018 financial results as well as our business outlook for the fourth quarter. As a reminder, the financial measures that I'm going to provide are on a non-GAAP basis, unless otherwise noted.

We have provided reconciliations of these non-GAAP financial measures to GAAP financial measures in our earnings release posted today, which also can be found in the Investor Relations section of our Web site. Total revenue for the third quarter of 2018 was $78 million, an increase of 3% sequentially, and an increase of 1% year-over-year.

We shipped approximately 204 megawatts DC in the third quarter of 2018, an increase in megawatts of 1% sequentially, and a decrease of 12% from the year-ago quarter. The megawatts shipped represented about 665,000 microinverters, approximately 78% of which were IQ7.

Non-inverter revenue, which includes our AC Battery Storage Solution and Envoy Communications Gateway and accessories increased as a percentage of revenue compared to our prior quarter. Non-GAAP gross margin for the third quarter of 2018 was 32.8%, compared to 30.5% for the second quarter.

We are pleased with the continued progress that we have made expanding our gross margins. The increases reflect the targeted initiatives of our pricing management, transition to IQ7, and the $3.3 million milestone achievement from an IQ8 partner.

We continue to be impacted by component shortages, which negatively affected our Q3 gross margin by approximately 2% due to expedite fees. Non-GAAP operating expenses were $18.6 million for the third quarter of 2018, compared to $19 million in Q2 and $16.9 million for the third quarter in 2017.

GAAP operating expenses were $25.6 million for the third quarter of 2018, compared to $23.3 million in Q2, and $22.4 million for the third quarter of 2017.

GAAP operating expenses for the third quarter included $3.7 million of stock-based compensation expenses, $2.6 million of restricting expenses, and approximately $700,000 of acquisition-related expenses and amortization.

On a non-GAAP basis, income from operations was $7 million, compared to $4.1 million in Q2, and a loss of $102,000 in the year-ago quarter. This improvement in operating income for the year-ago quarter is reflective of our hard work and underscores our commitment of establishing a solid financial foundation.

On a non-GAAP basis, net income was $4.6 million, resulting in basic earnings per share of $0.05 and diluted earnings per share of $0.04. Now turning to the balance sheet, inventory levels were $17.9 million for the third quarter, compared to $17.5 million in the second quarter, and $25.3 million in the year-ago quarter.

We ended at 30 [ph] days of inventory on hand as of September 30, up from 30 days last quarter, and down from 38 days in the year-ago quarter. Inventory management remains one of our key cash management initiatives in 2018. We exited the quarter with a total cash balance of $116.2 million, compared to $58.5 million in Q2.

The Q3 balance includes both net proceeds of approximately $62.7 million from a convertible debt offering, and a payment to SunPower of $50 million. We generated $6.8 million in cash flows from operations, as well as approximately $11.9 million in positive adjusted free cash flow.

The $6.8 million in cash from operations in Q3 would have been $12.8 million as we allocated $6 million out of the $50 million payment to SunPower in operating cash flow for the acquired customer relationship intangible. Now, let's discuss our outlook for the fourth quarter of 2018.

We expect our revenue for the fourth quarter of 2018 to be within our range of $80 million to $90 million. Turning to margins, we expect GAAP and non-GAAP gross margin to be within a range of 31% to 34%. Note that our Q4 gross margin guidance includes approximately 2% of higher expedite fees, resulting from industry-wide component shortages.

We expect our GAAP operating expenses to be within a range of $25 million to $28 million, including a total of approximately $7.2 million or $50 million [ph] in stock-based compensation expenses, additional restructuring expenses, and acquisition-related expenses, and amortization.

We expect non-GAAP operating expenses to be a range of $18.5 million to $20.5 million. With that, I will now open the line for questions..

Thank you. [Operator Instructions] Our first question comes from the line of Colin Rusch with Oppenheimer & Company. Your line is now open..

Thanks so much, guys. Can we break down that 10,000 per home opportunity.

How much of that is energy storage and Ensemble? And then could you break it down between what's hardware and what's actually software and service type revenue?.

Yes, so Colin, today we ship a microinverter system that is roughly on the average $100. This includes a microinverter, the Envoy, the Combiner Box, the Cable, and usually there are 20 microinverters per home. So that makes it -- a microinverter system is about $2,000 per home.

When we go to the home energy management system powered by Ensemble, we are now talking about additional storage, and then we are talking about an automatic transfer switch in addition to our usual Combiner Box, and we are talking about software.

So if you think about it, let's say, for anything from eight to 10 kilowatt hour system, you are right, that the storage will be the $8,000, the storage plus ATS.

And even then, we are only scratching the surface because the software component, like for example, the grid agnostic service capability will be available as software, which we are still thinking about it, but we are thinking of having a yearly software fee there, which can be rolled out through our IoT system via the cloud.

So you're right, it's at least $10,000, and we expect to get more..

Okay.

And then, just on the component shortage, obviously you guys are working through the issues on this, but how can we expect that to start flowing through over the next several quarters in terms of your ability to actually serve the revenue or the opportunity that you think you have in front of you with your customers?.

I mean, just stepping back and looking at it, the supply shortage is on the high-voltage transistors. These are the 600-volt transistors. They are complicated devices to make. The people who usually make this, I'm talking about the general suppliers who make it are a handful.

They are basically STMicroelectronics, Infineon, Alpha & Omega Semiconductor, On Semi, Toshiba, these are the usual suspects. We have done our homework. We have three of these five suppliers on our AVL today. Despite that, those guys are facing unprecedented demand due to EV charging. So their demand exceeds the supply that they have.

We recognized this problem about six to eight months ago. I invested money, creating a dedicated line for us to create capacity, and that line is coming on board in January of 2019. So I expect majority of my supply problems to be gone in Q1 of '19..

Okay. Thanks so much, guys. I'll hop into queue..

All right, thank you..

Thank you. Our next question comes from the line of Brad Meikle with Williams Trading. Your line is now open..

Hey, guys, thanks for the question. So just to follow-up on the power -- the line that you're brining on I guess is the power MOFSET line exclusively or could you talk more about how broad the shortages are, and what capacity you're bringing on. Thanks..

Yes, I mean, to basically give you a color, we walked away from $10 million of demand in Q3, and at this point in time, we are fully booked for Q4 to the guidance that I gave you. And it is only early November right now. So obviously the demand is outstripping supply from our end.

In terms of the investment with the supplier, I'm not going to provide too much of details, but all I can say is that we are switching to that supplier as our preferred supplier, and they basically have given us assured capacity.

They are a very reputed, very reliable supplier, and we expect to -- you know, between that source and our existing other two sources, we expect to have more than the available demand that we need. So I expect the problem to be gone in Q1 of '19..

Okay.

Could you elaborate at all in terms of whether it's generally within the industry -- specialty memory shortage as well or is it really the power MOFSETs, capacitors, passive components primarily?.

Yes. I mean, look, the power MOFSETs 600 volts is by far the biggest shortage. Yes, there are problems on MLCCs, everybody knows that, but we have been able to resolve that through spot buys. It's not pretty.

It affects our gross margins by a couple of percent, as Eric said, but we are getting by there with the shortage of MLCCs, but the high-voltage transistor FET is an esoteric device.

It's made only by the five suppliers I said, and therefore that's a little bit more complex, and like what I said, we believe we have put in the right actions six to eight months ago, and the capacity is coming onboard now. It is at the right time, and I think this should be behind us soon..

Okay, thanks. On a separate topic, can you talk about your being sold out for Q4, what's your visibility into the first quarter at this point, and could you share some thoughts generally on 2019 revenue growth and opportunities that you're looking at? Thanks..

Well, we're not -- we don't give guidance normally for more than a quarter out, but in general, I'll give you some color on 2019, our four vectors for profitable growth they are turning on, you know, IQ7 is catching on, our balance sheet is very robust now, and that is enabling customers to come back to us, especially, you know, and you already know about the SunPower transaction, so that is going to add about $60 million to $70 million annualized in the second-half of '19.

Then we have other relationships on the AC modules. On top of it, we are introducing high-power and high-performance products that are high gross margin as well. The biggest icing on the cake is Ensemble. Ensemble Solar and Storage is -- yes, of course new product development is always very complicated.

You can hardly predict the exact timelines you're going to get, but if we are on track there, which we are right now, our revenue per home is going to increase by manifold, and that can be transformational for Enphase..

Thanks. And the second part of that was just around the first quarter.

Do you think the supply problem gets better in the first quarter? Can you grow your amount shift base on that? And are you sold out in the first quarter already? What's your visibility into the quarter?.

Yes, I mean, like what I said, I'm not going to provide guidance for Q1 of '19, but like what I said, our balance sheet is robust, we really feel good, customers are coming back, demand is strong.

I am fully booked already for Q, and this is only the beginning of November, I still have two more months if customers order, they are going to go to Q1 by default. So we feel good about Q1..

Thanks, Badri. And last question is just -- and thank you for the time.

We've heard reports, you know, we do a lot of surveys and checks with installers, and a lot of discussions we've had indicate that the SolarEdge failure rates are in the 10% to 15% range as compared with, I think you're in the 0.2 % range, and this drives warranty reserves, and so it's created a lot of speculation on whether -- how appropriate warranty reserves are.

So, is there a point where you can share what your failure rates are with us, so that we can back-in to those numbers more precisely?.

We are not going to be talking about competition, but I'll talk about our strategy. Our quality business process is something which I learned from my previous company, over the last 21 years, and that is based upon what is called as the Root Cause Corrective Action Methodology.

And that is, you review your quality failures every week, you look at the root cause, you ask yourself five whys, you put in containment actions in place, you put in interim corrective actions, you then look at permanent corrective actions, and then you change the culture of the company so that everybody reacts to quality in the same way and it is number one priority.

That's what we are trying to do here at Enphase. So my target personally is to get to 500 PPM. 500 PPM is 0.05%, if I'm doing the math. So that is my target, to get to 500 PPM, and we are working day and night to achieve that target.

We have a great leader in place in quality, and like what I told you, we engage in root cause corrective action to fix the problems..

Excellent, thank you..

Yes, thank you, Brad..

Thank you. Our next question comes from the line of Eric Stine with Craig-Hallum. Your line is now open..

Hi, everyone.

Was just wondering on the guidance, the guide, the revenue range wider than normal, and so just curious, I mean is that in place -- is it all component shortages, or are there some other factors that are driving that it's a $10 million range?.

That's a good question. I deliberately did this because our supply situation is a little bit like what I told you, we are short of supply. We are getting good news every day. Sometimes we get some bad news everyday. So we thought we should guide to the right range for you, and I felt that range was $80 million to $90 million..

Okay. And then, in terms of the 30-20-10, just doing the quick math, it looks like a little bit -- the midpoint or a little bit above on revenues would get you to that 10% level for op margins.

I mean below the revenue line, can you just talk about some of the puts and takes that get you to the high-end of that range?.

I mean you're right.

That's exactly how we are thinking about it too, you know, the gross margin around that range, 32.5 is the midpoint of guidance, and the OpEx in the midpoint of guidance gets us to 30-20-10, and the way I want you guys to think about 30-20-10 is that's our target operating model, and sometimes we maybe -- sometimes we'll overshoot gross margin, sometimes we'll undershoot gross margin.

Then you should really go by the guidance there, but that's our model. That's what we are sticking to. In terms of our OpEx, for example, we are restructuring the company to achieve 20% OpEx, what does that mean, right. As customers come back to us, we have a strong balance sheet; customers are coming back to us. We are starting to grow top line.

We're starting to invest in Ensemble.

We don't want to -- I mean, we want still be very careful on OpEx, which is why we have made the decision to have the right people at the right places, and therefore, we are shifting majority of execution teams to India and New Zealand to control costs, while we will add selected strategic talent in the U.S., India and New Zealand will be a massive base for us in terms of controlling the OpEx.

So that's why we are confident that 20% OpEx model is the right long-term model for us. So that explains to you 30-20-10..

Yes. Okay, thanks for that.

And then last one, just for Eric, just to clarify, I missed it, the milestone payment in the third quarter, the amount that that was, and then is that something that you expect to get as well, a third milestone payment in the fourth?.

Yes, and it will be 700k..

Okay.

And what was -- I'm sorry; what was the 3Q number?.

The 3Q, 3.3..

Okay, thank you..

You're welcome..

Thank you. Our next question comes from the line of Philip Shen with ROTH Capital Partners. Your line is now open..

Hi, everyone. Thanks for the questions. So, first one is on pricing.

Can you talk about how much you may be passing pricing on -- how much higher is pricing in Q4 in the U.S, and then how much do you expect to raise price in Q1?.

So, Phil, with regarding the tariffs, you know that we had the 10% tariff, 301 tariffs effective September 24, and basically, what we communicated to our customers is we will absorb a portion of that while we will pass on a portion of that. So, roughly that is actually equal, so average about 3% to 4% price increases to customers in Q4.

Q1, we don't yet have visibility whether the tariff is going to be a 25% tariff or not. So, in the event, it is 25%, our strategy will be very similar. We will share the cost increases with our customers..

Okay, great.

And then, as it relates to the SunPower volume, you made it very clear what the revenue contribution can be in the back-half of next year, but to what degree -- how much ACM volume could you see in Q4 of this year, and also in Q1? My sense is your volumes might be ramping up decently, is it possible to share what kind of mix ACM for SunPower might be in Q4 and/or Q1? Thanks..

Yes, in Q4 we are starting to ramp. We expect volume shipments in Q4. Q1 will be a really nice ramp. I expect to get most of it in Q1, and we should complete the ramp by Q2..

Okay, great.

And then, as it relates to -- and I know you can't provide guidance, but in the event that we have a 25% tariff on the 301, and in the event that you raised pricing in a way that you talked about, suffice to say, do you expect margins to be roughly in line with what you are experiencing now? Is there some degree of maybe even upside with the price increases, but if you can talk about the Q1 margin might look like or even the cadence as we go by quarter throughout '19, that would be really helpful.

Thanks, Badri..

Yes. Okay, thank you, Phil. So we don't guide to our gross margins in Q1, but I will give you some color. In general, we're making a lot of progress on gross margin. We are working on costs day and night. We are working on the architectural innovation. We are working on accessories, dropping out overhead.

In addition, as we transition to higher-power higher-performance products, our gross margin is naturally better. So we actually feel good about gross margins in Q1. And like what I said, this is the solar industry, we have 201, we have 301, I'm not sure what comes next. So obviously we are cautious, but we really feel good about gross margins..

Okay, good. That's great color. And then finally, in terms of that partner for IQ8, can you give us a little bit more information on that. I know you introduced it last quarter.

When do you expect commercial business to come from this partner? Can you share more about this partner, in what country this partner might be based in, and then beyond them, are there opportunities similar to them that could be in the near-term, call it, the next six months to one year that could be supportive as well? Thanks..

Right, while we cannot give too many details, the opportunities are outside the U.S., that is one. And the partner is currently doing field trials with our off-grid version product, and we have completed all the safety certifications. So we do expect a ramp in the first-half of 2019, yes, as I said.

And with regarding other opportunities, yes, we are bullish about other opportunities, especially in regions like where I am from. In my hometown, in my city, there is no power for eight hours a day in summer. I mean, those are the places where it can actually really help. Off-grid solar and storage will be a game-changer for India as well.

And granted, we need to work with the partner there too, I mean the opportunities are big there..

Great.

And then, one last follow-up on that, in terms of the ramp in the first-half next year, can you quantify that in any way, are we talking about tens of millions or single millions?.

I cannot quantify it yet, Phil, no..

Okay, great. Thanks for all the color, Badri. I'll pass it on..

Yes, thank you..

Thank you. Our next question comes from the line of Carter Driscoll with B. Riley FBR. Your line is now open..

Good afternoon, gentlemen.

So, of the 10 million that you think you couldn't satisfy this quarter, do you think that was a lost opportunity went to competitors? Could it have been pushed out? And then at all if you could qualify -- if so, maybe the mix of customers that were not able to be satisfied with that either regionally or by type?.

Yes, I mean, the $10 million was evenly spread between both long tail [ph] as well as the Tier 1 customers. They're going nowhere, they are going to stick with us, and we are going to service them in Q4..

Okay. Okay, excellent.

Can you talk about -- if could quantify the kind of tariff mitigation impact from Flex in 2Q relative to your pricing strategy in 4Q and 1Q, I mean do you anticipate you would be able to lower your prices in response to having Flex up and running, or would that be an incremental margin add?.

Well, first, I will answer the question on Flex. Basically we expect the Flex capacity to come on board in Q2 of '19. In Q2, we expect to service 50% of the North American demand from Mexico. In Q3, we expect that 50% to go to 90%. We've already put the additional capacity in terms of -- capital we've already invested the capital for that.

With regarding your question on pricing, we're going to look at the pricing environment at the point in time and we will make a decision that is right for our customers..

Okay. I guess you talked about when you were not in a stronger financial position just a couple years ago that relationships with the Tier 1 installers was more transactional.

Would you characterize it as moving towards more of a relationship, or have you achieved any of those longer-term relationships or solidified them, is that a fair statement now or would that be still an unfolding process?.

I would say, it's work in progress, and the reason I say work in progress is we have started the discussions what the Tier 1 love is the Ensemble product. The Ensemble Solar and Storage is a game-changer for anybody.

It provides the clear value proposition, AC marketplace, a complete solar and storage solution, grid agnostic solution, and that is difficult to get from anybody else in such an elegant form. So the discussions with Tier 1s are progressing very well, and we'll announce more when we are ready..

Okay.

I mean, just two quick ones, you see anyone anywhere close to maybe not with an integrated level, but offering something similar to Ensemble at this point, or next quarter or two, even if they're trying to cobble something together?.

This is Raghu. We cannot say for sure, but if you look at architecturally how we are building our -- we are -- it's microinverter-based, heavy on semiconductors, and leveraging Moore's Law, and all of it is built around like I said a custom ASIC, which is a 55-nanometer technology with an ARM core embedded in each one of those ASICs.

So, it uses -- it's a very high-speed architecture that performs very complex computations, and manages this AC bus or this AC marketplace at an extremely high rate. So architecturally, we don't know, but I think it's going to be challenging for the string inverters. However, as we get the product out into the marketplace, I think we'll know more.

I just wanted to say that our architecture is quite unique, and it's built around semis and software, and I think that gives us some very unique capabilities that we're leveraging to release the Ensemble technology..

Okay. Thank you, Raghu. And then just last one, is any noticeable incremental spend in S&M for rollout of Ensemble? Just because you're going to different geographies or there's different tape-outs you know, get product -- early product to some customers, or just trying to get a sense of what that might be OpEx line..

Well, in general, we are adding more sales and marketing heavy hitters across the board, and that is true in general, because as we grow our top line, as we introduce complicated products like Ensemble, it is more of a solution sell. It's more of a technical sell. So we are adding heavy hitters there.

I expect we will continue to add incremental talent in the sales and marketing side, but you still need to think about a long-term OpEx model at 20%..

Yes. Excellent. Okay, I think I'll stop on. Thanks, gentlemen..

Our next question comes from the line of Amit Dayal with H.C. Wainwright. Amit Dayal, your line is now open. If your line is on mute, can you please un-mute your line? Our next question comes from the line of Pavel Molchanov with Raymond James. Your line is now open..

Thanks for taking my question, guys. You referenced the SunPower exemption for the 201, and my understanding is there are some additional rounds of exemptions that have yet to be granted.

Is there any sense of, you know, what has been the reason why yours has not been processed to-date, is it just administrative slowness or is there something substantive that has been impeding the process?.

We don't know this, Pavel, so we don't have an answer..

Okay.

Any guidance on when you're anticipating or when you're being told this process will run its course?.

Well, we have talked [ph] expecting something, but on the other end, the way we have sidestepping this problem is by engaging -- I mean the partners are actually building factories in the U.S. So we are sidestepping this problem, and I think it's not a big deal for us in the long-term..

Okay, I hear you. Let me ask a quick one about the battery. You've been selling the kind of first-generation battery product I think for about two years now.

With those sales having moved I imagine fairly slowly, what are the learnings or lessons that you've gleaned that will influence how you're going to go about selling this integrated solution going forward?.

Yes, it's pretty simple. We have shipped over 25 megawatt hours till date on the ACB 1.0. The main target markets have been Europe as well as Australia. So let me let me tell you the good, it's an Enphase system, so you can expect the high quality and easy installation. It is also very highly modeler. It can be scaled very easily.

If you want to build a 3 kilowatt hour system, you have to buy three of those, string it together, you're done. On the other hand, the negatives are two. One is we're being told that although we do value-based pricing, our prices are high. That's one. Number two is it doesn't support backup.

And I'll add a third one; the capacity of that system is quite low. So we're solving all of these problems, and we are basically building 10 kilowatt hour system and 13.2 kilowatt hour system, while still keeping the modularity of 3.3 kilowatt hour building blocks. That's what we're doing right now..

All right, I appreciate the color, guys..

Thank you..

Thank you. [Operator Instructions] Thank you. This concludes our question-and-answer session. I would now like to turn the call back to Badri Kothandaraman for closing remarks..

Hi, thank you for joining us today and for your continued support of Enphase. I look forward to speaking with you again on our call next quarter..

Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program. You may all disconnect. Everyone have a great day..