Good day and welcome to the SolarEdge Conference Call for the Second Quarter Ended June 30, 2019. This call is being webcast live on the Company's website at www.solaredge.com in the Investors section on the Event 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 Erica Mannion at Sapphire Investor Relations, Investor Relations for SolarEdge..

Good afternoon. Thank you for joining us to discuss SolarEdge's operating results for the second quarter ended June 30, 2019, as well as the Company's outlook for the third quarter of 2019. With me today are Guy Sella, Founder, Chairman and CEO; and Ronen Faier, Chief Financial Officer.

Guy will begin with a brief review of the results for the second quarter ended June 30, 2019. Ronen will review the financial results for the second quarter, followed by the Company's outlook for the first quarter of 2019. Then, we will open the call up to 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 and the slides published today, for a more complete description.

All material contained in the webcast is a 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, as we believe they provide investors with the 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 substitute for or superior to financial measures prepared in accordance with U.S. GAAP. Listeners who do not have a copy of the quarter ended June 30, 2019 press release or the presentation, may obtain a copy by visiting the Investors section of the Company's website.

Now, I will turn the call over to CEO, Guy Sella..

Thank you, Erica. Good afternoon. And thank you all for joining us on our conference call today. I’m happy to report that we concluded our second quarter with very strong results. We are reporting record revenues for the quarter of $325 million, an increase of 20% from last quarter and about 43% from the same quarter last year.

These revenues also include a record quarter in our solar business of approximately $307 million.

Representing our solar business and our non-solar business separately in order to enable analysts and investors to have full transparency of our solar business and its continued profitability separates from the results attributed to our recent acquisitions.

GAAP gross margin for this quarter was 34.1% while non GAAP gross margin was 35.7%, and non GAAP gross margin for solar products was just under 37%. Let's look with a little more depth into these very positive results.

Our revenues once again reached a record high this quarter along with record non-GAAP net income and record net diluted non-GAAP earnings per share of $0.94.

Revenues from our solar business increased from last quarter by 21%, primarily driven by the growth of our business in Europe, continued strength in the United States business and development of new markets. This quarter, Europe represented 48% of our solar revenues, which is an all-time high, signifying our growing strength in this region.

In our second quarter, we shipped 1.3 gigawatts of AC nameplate inverters, approximately 430 megawatt of which we’ll ship to America. Commercial sales comprised 44.3% of our total megawatt shipped this quarter. Overall, we shipped 3.7 million power optimizers and 160,000 inverters yet another quarter.

Also worth noting is that when we ended first quarter this year, we announced that we had more than 1 million solar system monitors in our portal. This quarter alone, additional 115,000 systems were added to our monitored fleet, representing consistent growth in our installed base.

I want to take this opportunity to highlight some aspects of our business and to address some additional noteworthy measures. Our solar business continues to be very strong, and the rapid growth in sales require increasing our production capacity at an even faster pace than what we had anticipated at the end beginning of the year.

Sales in Europe have picked up significantly and we have added meaningful sales in Brazil along with steady growth in Asia Pacific. In the United Stated, despite the tariff increase on made in China products, sales are on the rise and we have significant backlog for the third and fourth quarters that is rising our very strong outlook.

The production adjustments to accommodate these growing needs are substantial. This quarter loan, we increased our manufacturing capacity by approximately 25%.

We expect that in order to continue to meet this growth in demand, we will need to increase our expedited shipping costs in the forthcoming two quarters and this will once again have a temporary impact on our gross margins, which is also embedded into our guidance.

To this end, the ramp-up of our Vietnam manufacturing facility is well underway and there are already two automated optimizer lines and in one virtual line installed in the new site. We expect first mass production shipment in the third quarter of this year.

We continue to increase our investment in R&D and related expenditures in order to further improve quality of existing products to introduce new products and to drive down product costs. Among our new products is our 3-phase residential on-grid storage inverter to be used with third-party low voltage batteries.

We expect mass production of this inverter to begin in the fourth quarter of this year. At Intersolar, we announced another new development underway. We introduced a single phase HD-Wave inverter that integrates the management of an ongoing solar storage and home energy management into one inverter.

The combination of all of this function into one inverter will simplify installation, improve system ROI and increase sales consumption. This new offering is scheduled for mass production during Q3 of this year.

Also showcased in the Intersolar were SolarEdge commercial and residential batteries which will be added to the storage offering in order to provide a comprehensive storage solution.

Designed to provide flexible solar plus storage installation options, solar batteries are expected to be available worldwide in the first half of 2020, while we continue to support storage compatibility with multiple battery vendors. The batteries will be able to either AC or DC output.

As mentioned, when we purchased Kokam, technological innovation required significant financial investment and years of education and hard work for skilled R&D engineers. The work is now well underway in Korea with plans for Kokam’s new mass cells production factory.

Our planned capacity for this factory is 1 to 1.8 gigawatts depending of sales, type and blend. The current estimation for the total investment required is approximately $50 million to $60 million for the equipment, building and infrastructure. We expect to incur these expenditures over the coming 18 to 24 months.

SolarEdge will manufacture some of the equipment in-house and other equipment will be ordered by year-end. The factory is being designed to enable expansion for a total of 5.2 to 3 gigawatts of cell production. I would like to conclude with a brief look at our bottom line numbers. Our non-GAAP net income was $49 million.

We reported cash flow from operation of about $51 million and total cash and investments net of debt of $352 million. This figure follows the conclusion of the tender offer of SMRE at the end of April.

Our financial strength positions us well to continue to develop innovative technologies, bringing new products and new offerings to the solar market, while developing new products and new offerings for the other three business pillars which are based on the three acquisitions that we completed, all of this while managing the effective cost reduction plan.

And with this, I hand the speaker over to Ronen, who will review our financial results..

Thank you, Guy, and good afternoon, everyone.

Before starting the review of our financial results for the second quarter of 2019, I would like to remind listeners that while the overview will be on a GAAP basis, in certain cases, I will be discussing non-GAAP numbers and measures, which exclude stock-based compensation, onetime asset disposal, change in deferred taxes, onetime acquisition related expenses, amortization and depreciation of acquired assets and cost of product adjustments related to the acquisition of SMRE, Kokam and the UPS division, finance expenses related to the implementation of the revenue recognition standards and the adoption of the newly enacted leasing accounting standards as well as non-GAAP earnings per share.

I will conclude this introduction by noting that the effect of the new acquisitions closed in the past several quarters on the GAAP results is meaningful, as a result of amortization of accounting elements identified in the preliminary purchase price allocation studies that we recently performed.

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. For the second quarter of 2019, total revenues were $325 million, a 20% increase compared to $271.9 million last quarter and 43% increase compared to $227.1 million for the same quarter last year.

Revenues from the sale of solar products were $306.7 million and were driven by strong growth in all regions. Revenues from Europe reached an all-time high and represented 48% of our total revenues, reflecting strong growth, mainly in the Netherlands, Germany, Sweden and Poland. U.S.

solar revenues also increased this quarter to $124.7 million, which continued to increase quarter-over-quarter and represented 41% of our solar revenues. Rest-of-the world solar revenues were 11% and reached an all-time high this quarter.

Our top 10 solar customers represented 63% of our quarterly solar revenues, an increase from the last quarter, and two customers accounted for more than 10% of revenues.

Blended ASP increased this quarter, mainly due to price increases in the United States, which were implemented to mitigate the negative impact of the increase in tariffs on Chinese made products from 10% to 25%.

This quarter, revenues from our non-solar products were $18.3 million, mostly driven by the sales of lithium ion batteries and energy storage products, and to a lesser extent, revenues of automated machinery products from SMRE and from UPS products.

As the sales of those non-solar activities are characterized with the positive seasonal effect towards year-end, we expect these revenues to continue and grow in the coming two quarters. GAAP gross margin for the quarter was 34.1% compared to 31.7% in the prior quarter, and 36.1% in the same quarter last year.

Non-GAAP gross margin this quarter was 35.7% compared to 32.8% in the prior quarter and 36.5% in the same quarter last year. Non-GAAP gross margin for the solar activities was 36.9% compared to 34.3% in the last quarter, back to the normal 36% to 38% level.

This increase is primarily attributed to a more favorable geographic and product mix as well as successful implementation of cost reduction measures in the manufacturing of our product.

In addition, expenses related to our warranty accrual represented a lower percentage of revenue as we continue to decrease the per unit cost or replaced units and improve our logistic processes. Although U.S. tariff increases were entirely taken on by our customers, the net arithmetic effect of the U.S.

custom tariffs negatively impacted margins this quarter by approximately 80 basis points. Non-GAAP gross margin for our non-solar activities was 14.9% compared to 13.1% in the previous quarter. Most of this increase is related to the sale of storage products, where we continue to see margin improvements.

As anticipated, SMRE margin negatively impacted this number. Looking at gross margins for the next quarter. As Guy mentioned before, we’re facing strong demand for our products. In addition, the Chinese New Year, which significantly slows down production, is celebrated the year very early, adding to the capacity planning complexity.

Over the last month, we increased the capacity in China and are now ramping the Vietnam facility, so we're confident that our production capacity is sufficient to meet this growing demand. What we cannot control without adding expenses is shipment time.

We expect that in order to meet the growing demand, we will increase our expedited shipment expenditures in the next few quarters. The negative impact of additional shipping expenses on top of those already incurred in Q2, are estimated at 250 basis points for Q3.

To these, we will add arithmetic effect of increasing tariffs on Chinese made products that will once again impact our Q3 margin expectedly by about 180 basis points. The increased revenues net of additional cost of goods will positively impact our bottom line, and we expect the negative impact of the gross margins to ease in Q2 2020.

Moving to operating expenses. In total, operating expenses for the second quarter, which included a full quarter of SMRE, were $65.3 million or 20.1% of revenues compared to $58.1 million or 21.4% of revenue in the prior quarter and to 41.3% or 18.2% of revenue for the same quarter last year.

On a non-GAAPP basis, operating expenses for the second quarter were $54.9 million or 16.9% of revenues compared to $48 million or 17.7% of revenues in the prior quarter and $35.1 million or 15.5% of revenues for the same quarter last year, which did not include any of the acquired businesses.

Of this non-GAAP increase in operating expenses, $5.1 million were related to our solar activities. Our non-GAAP solar operating expenses as percentage of solar revenues were 15.3% compared to 16.6% last quarter, representing a continued operational leverage we achieved as our solar revenues grow.

The remaining increase in non-GAAP operating expenses of $1.8 million is mainly derived from the additional operating expenses of SMRE for a full quarter, which we did not fully encounter in Q1, and our continued investment in R&D, and investments in developing our new businesses.

The bottom line result is that our GAAP operating income for the quarter was $45.4 million, compared to $28 million in the previous quarter, and $40.7 million for the same period last year. Non-GAAP operating income for the quarter was $61 million, compared to $41.2 million in the previous quarter, and $47.8 million for the same period last year.

Financial income for the quarter was $0.8 million compared to financial expense of $6.2 million in the previous quarter, and a financial expense of $2.5 million for the same period last year. This quarter, we had a tax expense of $13.2 million, compared to $3.9 million in the prior quarter and $3.6 million for the same period last year.

Our non-GAAP tax expenses were $14.2 million, compared to $4.9 million in the previous quarter and $5.3 million for the same period last year.

This 22% tax rate, which is a higher than our annual forecast of approximately 15% tax rate, is impacted by an increase in our GILTI tax provision related to an increase of our forecasted profitability this year.

GAAP net income for the second quarter was $33.1 million, compared to GAAP net income of $19 million for the previous quarter and $34.6 million for the same quarter last year. Non-GAAP net income was a record $49.3 million, compared to a non-GAAP net income of $32.9 million in the previous quarter, and $40.6 million for the same quarter last year.

The non-solar activities resulted in a $5.6 million in non-GAAP net loss this quarter, compared to a net loss of $2.8 million in the previous quarter, mostly related to seasonality in the storage business and the inclusion of the full quarter of SMRE activities in our financials.

GAAP net diluted earnings per share was $0.66 for the second quarter compared to $0.39 in the previous quarter and $0.72 for the same quarter last year. Non-GAAP net diluted EPS was a record $0.94 compared to $0.64 in the previous quarter and $0.82 in the same quarter last year.

Our non-GAAP net diluted EPS was negatively impacted by approximately $0.11 as a result of the net losses related to our non-solar activities. Turning now to the balance sheet. As of June 30, 2019, cash, cash equivalents, bank deposits, restricted bank deposits and investments were $373.6 million compared to $398.7 million on March 31, 2019.

During the second quarter, we generated $50.8 million in cash from operations. Actual cash paid in the second quarter for the purchase of remaining SMRE shares was $64.7 million. In addition, our balance sheet includes net debt of $22 million related to loans taken by Kokam and SMRE prior to the acquisition.

We repaid some of SMRE debt this quarter and are expecting to continuing to do so in the upcoming quarters. In relation to the Kokam debt, our current plans are to maintain this debt until we finalize our final capital needs for Kokam relating to increasing our cell manufacturing capacity.

AR net increased this quarter, reaching $237.8, compared to $187.5 million last quarter. DSO this quarter in the solar business was 74 days, an increase from 68 days last quarter. This increase is a result of higher shipment concentration in the later part of the quarter.

As of June 30, 2019, our inventory level net of reserves was at $148.9 million compared to $150.8 million in the prior quarter. Approximately $42 million of this amount relates to non-solar inventory, the majority of which is raw materials held by Kokam. Moving now to guidance for the third quarter of 2019.

We expect revenues to be within the range of $395 million to $410 million. Revenues from the sale of solar products are expected to be within the range of $375 million and $390 million. We expect gross margins to be within the range of 32% to 34%. Gross margins from solar activities are expected to be within the range of 33% to 35%.

I will now turn the call over to the operator to open it up for questions.

Operator, please?.

[Operator instructions] We'll take our first question from Maheep Mandloi of Credit Suisse..

Hey. Thanks for taking the question and congratulations on the quarter. Just with regards to the guidance, could you just talk about how much of the revenue growth is driven by the U.S.

business? And specifically for the U.S business, how should we think about the mix between organic growth versus demand pool and from the safe harbor for the tax credits?.

So, in general, while we do not provide breakdown for the exact revenues that will come from each and every region, we expect the U.S. to lead the revenues growth this quarter. As we mentioned in previous calls, the U.S market is usually characterized with stronger second half. And this is something that we also see at this point.

And therefore, I would say that significant amount of this growth is coming from the U.S. At least for Q3, we do not yet encounter any safe harbor income at least for Q3. .

Just maybe on Q2 and probably on to Q3 also, could you just talk about the split between the residential and the commercial business for the U.S.

markets? Just trying to understand how do you think about market share gains in both those segments for the quarter?.

So, in general, we see that our commercial to residential ratio is very similar worldwide and sometimes changes from quarter-to-quarter. But in general, it was this quarter 44.3% and the U.S. was not dramatically different than what we see in the rest of the world.

One thing to say, though, is that you need to take into account that when we're shipping products, we're shipping them based on the demand that we see worldwide, based on seasonality that we see in markets and inventories that our customers are holding.

So, I'm not sure that it is possible to derive based on one quarter what are the market share gains or losses? You can simply derive what we're shifting into the market itself but not what is really installed there. .

Just one last question, could you just talk about the drivers for the gross margin beat versus the guidance in Q2? I’ll jump back in the back queue. .

Sure. So, I think it's a combination of several things. The first thing that we see is continued cost reduction that we do on the product. We continue to come with new product generations to keep negotiate, and keep increase our manufacturing efficiencies and logistic efficiencies, as much as we send products.

I think that another thing that happened this quarter was the fact that as we said actually last year, we saw that the warranty accrual for this quarter was already lower compared to the last quarter, due to some efficiencies that we see on the per unit costs that we have for each and every shipments that we’re doing.

So, the combination of these cost reductions, better logistics, and lower warranty expenses drove this growth. And in addition to this, of course, we also see from time-to-time, changes in the mix of products. This quarter, we had the more favorable mix of products related to the previous quarter..

Thank you. We'll take our next question from Colin Rusch of Oppenheimer..

Looking at Kokam and the CapEx number that you guys walked us through, could you talk us through what the delta is between the $50 million to $70 million and where you’ll end up from a capacity standpoint with that spend?.

So, the total cost for the new factory will be $50 million to $60 million before the possible expansion. The total capacity is 1 to 1.8. The main reason, we currently are planning the factory to produce all the current available sales with the new sales we need for our products and for all the automotive.

At this point, we believe that once the factory will be in production, we will be able already to reduce the amount of sales that we are selling and therefore the capacity will be closer to 1.25 at 1.8. But, it's a bit too far away to estimate the needed sales for -- the needed sales for the expected sales..

Okay. And that’s helpful. I’ll have a couple of follow-ups offline. And then, just in terms of the design roadmap on the solar side, could you talk with us a little bit about the cadence of cost reduction and evolution of the technology over the next, call it, six quarters? It seems like there is a little bit more there than we’d expected.

I’d just like to understand what that road map looks like for you guys right now..

So, I think that it’s pretty clear. The first -- we have three elements that we need to further improve when compared to our competitors. The first one is the storage. And as I reported, we’ll come out in Q3 with inverter that is 3-phase residential mainly for the European market.

Before, let's call it, the era of massive storage, Europe already reached about 80% of new residential installation based on 3-phase inverters. Today no one has in the market an effective 3-phase inverter that supports storage. This will be the first effective 48-volt storage. Any storage inverter -- everybody is still using low-voltage batteries.

So, that's why we are developing this first product first. But no one has in 3-phase inverter for residential to support storage. So, that’s the first product that will be in the market. And we believe that it will contribute great growth in the coming two to six and probably more quarters.

And the natural addition to that is our own batteries with the combination of what we developed in-house and the Kokam acquisition, we can now develop much faster residential and commercial batteries. And those as I mentioned will be available in beginning of 2020 as well.

What I didn’t mention and will give more details in the coming two calls is that we are developing a full range of much larger commercially inverters to be able to reduce the cost, simplified installation and to be able to take even bigger market share in the commercial with a much better fit product than anything we see today in the market.

And the third element of course, is the constant improvement of our products which is a combination of improving the quality, while I think we solved all the major -- or weren’t major, but all the problems that we suffered from like two, three quarters ago, we still know like any other product, and that’s why evolution is happening, how to improve those products.

And we take major part of R&D, improve the existing products and reduce our cost..

We will take our next question from Philip Shen of Roth Capital Partners. .

I would like to talk about a more general question about demand. I was wondering, if you think through all your shipment mix and your megawatts and the destinations, what percentage of your demand currently do you think is coming from unsubsidized geographies.

So, the U.S market is obviously subsidized and there might be policies that support certain countries, but which -- if you were to think through it, what percentage of your 1.335 gigawatts do you think is driven by unsubsidized demand? And the reason why I ask this question is I’m trying to open people's eyes up to the fact that solar is becoming much more economic as opposed to being subsidy-driven..

As far as, I know, and correct me if I'm wrong, there is no geography today where the subsidies really influence. So, I would say that all to vast majority of the demand is coming from geographies that are not subsidized or that the subsidy is really negligible..

Okay, great. Shifting gears to your capacity ramp, it sounds like Vietnam is ramping up well. Can you give a little bit more color on how that's going? And then also, when do you expect all of your shipments into the U.S.

to be tariff-free?.

So, as I gave all the data, we -- it's moving according to plan. We’ll start mass production in Q3. We didn't analyze the second part of the question, because we need to analyze the demand. The demand in the U.S. today that we see today for the second part of the year is dramatically bigger than what we saw in the end of 2018.

So, this analysis of when we will meet the higher demand hasn't been done yet..

Okay. But, it sounds like demand is very strong in the back half. So, that's great. In terms of the utility scale product, I know you just talked about having a line that serves the much larger commercial inverters.

Can you update us on what your expectations are for the utility segment? Is that a segment that could -- that you could address in the next one or two years in a meaningful way?.

Yes, we're working on I think unique, brilliant solution. I would expect that we'll be able to put first output of this solution sometime by the end of 2020 and to offer it in 2021.

But since it's a really innovative development with lots of really core to qualities and core concepts, until we have the first unit working, I think that it won’t be responsible to share any substantial information..

Great. One last quick housekeeping question. You shared the megawatts into the U.S. I think for Q2 of 430 megawatts -- or 440. Sorry.

Can you talk about how many megawatts you shipped to the European market in Q2?.

Yes. I'll pull it and give it after call..

Thank you. [Operator instructions] We'll take our next question from Jeff Osborne of Cowen & Company..

A couple of quick ones here. Ronen, you mentioned that the expedite piece would be in place through I believe Q2 of ‘20. Is that just line of sight into demand in the U.S.

in Q4 and Q1 or can you just talk about why you made that comment relative to the Vietnam facility ramping up? I'm trying to get a sense of both of those variables at play and how they interrelate to each other..

So, I think the answer is, not necessarily just related to the demand but also related to how production and overall shipment is behaving over the next few quarters. As I mentioned in my script, we are able to increase our capacity very well. And as Guy mentioned, we increased it about 25% from Q1 to Q2.

And we believe that what we build in China and what we're building now in Vietnam will be able to suffice for everything. The main problem is actually how do you ship everything and how do you bridge the six weeks that usually our products are on sea when you send it using marine shipment instead of air statements that take only a few days.

This is the only gap that we're not able to bridge. So, in general, the reason that I said to Q2 2020 is because we take into account the demand that we see for Q3 and Q4 and know what we need to ship and what is the production plan and shipping capacity outside of our factories into the United States, compared to the demand.

We understand that in Q1 because of the early Chinese New Year, we will have a little bit of disruption in the manufacturing that again will have to be compensated. Although we will have more capacity with expedited shipments to meet the demand, while in Q2, we will already have capacity in place in our factories.

At the same time, we will be able to start seeking excess capacity that we manufacture compared to demand using ocean freight and then the ocean freight will displace the air shipment..

Got it. That’s helpful. And then, you mentioned in response to your prior questioner’s question about safe harboring and not seeing any in Q3 period.

Can you just share with us any broad strokes around conversations for Q4 or for Q1, do you anticipate that people would be safe harboring optimizers and/or inverters with you folks or not?.

I suggest that we will talk about it once we see more how this is formulating. Because the safe harbor rules are relatively I would say complicated, given what needs to be taken this year, what needs to be paid this year and there are various ways to basically pay or get product in order to enjoy the safe harbor regulation.

I can tell you that there are discussions that are taking place. All of them are also discussed in the, I will call it broader frame of what can be produced and what can be shipped. And while we assume that we will see some safe harbors, the shape, form and numbers will be disclosed I believe closer towards the end of the year..

My last question is, can you remind us as you formulate your guidance, here we’re five weeks into the quarter, what typically visibility do you have into the guidance provided, historically and/or for this quarter? You mentioned great visibility and longer lead times..

We have very, very, very good visibility into the numbers we gave you..

Thank you. At this time, we have no further questions. I'll turn it back to Guy Sella for closing remarks..

Just before the closing remark, in all of the last calls, people were asking us about the market share of us against the other MLP companies. This time, it hasn't been us, but I decided to help you a bit and give you the details from the only objective source in the market.

So, as we said in the past, there is no ability for a company to measure market share of newly installed systems. The only one who does it constantly is media Greentech Media. Since Q1 2018, Greentech Media show steady growth of SolarEdge market share in the U.S. residential market from 45.7% in Q1 2018 to 59.5% in Q1 2019.

At the same time, tells Greentech Media again the other MLP company market share from 23.1% into in Q1 2018 to 17.1% to Q1 2019. As you may know, the other MLP company acquired the micro inverter business of SunPower on August 2018. And since this quarter, they also include the sales of SunPower.

Even when combining or taken into -- the share of the other MLP company, the SunPower micro inverter business since Q4 2018, the combined share decreased from 29.2% in Q4 2018 to 26.8% in Q1 2019.

Lastly to those who try to calculate market share from reported shipments, the shipment number are not representing market share trends and these are affected by customer inventory.

I hope this will give you the motivation to get into the numbers of market share from Greentech Media rather from the shipment numbers that Company's reported on themselves. And now will go to my summary.

In summary, our second quarter results show continued successful execution of our business strategy with record revenues and consistently stable profitability.

We are well-positioned to continue the growth of our business with new product offerings in the solid business and are confident that our acquired business will in time also create value far beyond the solar market, which we currently lead. Thank you all very much for joining us on today's call. All the best..

Thank you. Ladies and gentlemen, this concludes today's conference. You may now disconnect..