Enphase Energy, Inc. ($ENPH)

Good morning, and thank you for joining us on today's call to discuss Enphase Energy's business. With us today is Badri Kothandaraman, Enphase's President and Chief Executive Officer. [Operator Instructions] Please note that management may be making forward-looking statements about the company's current plans and expectations with respect to its business, technology and products. Actual results may differ materially from current plans and expectations, so I encourage you to read our SEC filings where we discuss the risks inherent to our business. You'll find detailed discussions in our filings with the SEC including our annual report on Form 10-K for fiscal year 2025 and our quarterly report on Form 10-Q for the quarter ended March 31, 2026. Please note that non-GAAP financial measures referenced during this presentation are reconciled to their most directly comparable GAAP financial measures found in the investor presentation posted on our website at investor.enphase.com. With that, I will turn the call over to Enphase Energy's President and Chief Executive Officer Mr. Badri Kothandaraman to give a short report on the company.

Good morning. Quick overview of the company's as usual founded in 2006, approximately 2,700 employees. I'm talking to you from Fremont, California, that's our headquarters, customers, distributors, installers, homeowners as well as business owners. We have shipped approximately 87.8 million microinverters cumulative big numbers, over 5 million systems in more than 165 countries. We are rapidly making progress in storage. We have shipped over 2.5 gigawatt hour of storage. 2025 revenue was approximately $1.5 billion. We are profitable. Let's go to the next page. Brief recap here. Coal differentiation is a semiconductor integration. You see the Zoom there on the left, and that's our ASIC. That's our chip, that's our silicon, custom silicon. We continue to innovate on that silicon IQ uses silicon card Swift along that was the same in IQ8 as well going forward for the next generation, we are working on a on a custom silicon called Kestrel, and that will also be used in our solid state transformer. So a lot of innovation happening on the custom silicon. That's the brain. That helps us to do predictive control, which keeps the architecture to a single stage in converting DC to AC and vice versa. Software-defined architecture, most of the issues that arise, be it a quality issue customer issue, we will be able to usually take care of it with software. And our product is incredibly flexible. It is 1 hardware and software defined according to the country of operation. [indiscernible] energy management technology, basically, it is the architecture on how an AC coverage system works and how we interact, how each component interacts with the other. But the general concept is it's a distributed architecture to scope, and that's the AC bus that you see on the on the right. Everything we do, for example, micro inverters have -- are in the convert DC from solar into AC for the home storage basically takes the AC and then you have microinverters inside storage, [indiscernible]. I get an EV charger, for example, bidirectionally, we charge that taps into the DC port of the car. There are inverters, reforming inverters that once again, DC converted into ACI and so on. So as coupled architecture. It's modular it helps us to extend the architecture regardless of when a customer bought the system, he should be able to upgrade the system with the latest and greatest products. Next. So that's the benefit that what I talked about, semiconductor technologies, software and are consumed is higher quality. So I told you about the single stage single stage possible cause of our custom silicon, and that means fewer components, reduced heat on the batteries, no high-voltage DC. We operate at low voltage HTC. LFP, very safe chemistry. We believed in LFP right from the get-go. We haven't changed it. And the industry has altered upon. I talked about the flexibility efficiency is high once again because we have a single-stage architecture. So supply chain, quality, efficiency, cost, all of them are interrelated and all points towards our semiconductor technology with the ASIC. Again, our quality targets have not changed. 500 defects in defective parts per million. That means it's a 0.05% number. And we continue to do well there. Margins, our gross margins are quite good. We are in the mid-40s, and it is possible because of 2 things. One is value-based pricing and the other is working on world-class costs. We continue to do that well. We established a team, and I joined the company in 2017. The team is growing from strength to strength. Our customer service is also one of the strongest points. Worldwide NPS has now climbed from the 70s into the 80s now, which is good. And we are taking it to the next level. We are introducing an AI assistant in the homeowner app, 100,000 homeowners have that today already, and we are planning to extend it across the fleet very, very soon. and that can do some pretty amazing things. Similar AIS system for the installers also is coming, where the installers will be able to get a very quick snapshot of everything in their fleet, and they will be able to intensify issues and it will help them to soon onto the right issues. Cost, of course, cost, like what I said, cost very closely related to the -- to our architecture to the semiconductor architecture to the ASIC. They are all interring together. The architecture dictates components because in a single stage means less number of components that we have. And semiconductors are [indiscernible] now. So we take advantage of [indiscernible] and we focus on both digital integration, which I talked about ASIC as well as analog integration, too, so we can integrate a bunch of things into high-volume low-cost semiconductors. Next. Business models have not changed. It's an efficient manufacturing footprint. OpEx, most of our engineering development is in India, along with New Zealand is our -- it's still our key place where we do brand-new microinverter architectures Next. The supply chain not much has changed. We are predominantly making most of our micro inverters, I would say, greater than 95% of our microinverters in the U.S. Basically, we get production tax credits there. which is good. And we also make at least, I would say, 50%, maybe 40% of our battery volumes in the U.S., too, and that is increasing. Globalization is important for us, and we are slowly but surely diversifying away from China on batteries. Next. So this is a big deal. This is what we do. We -- contrary to other companies that have to extract things for ESG. ESG is what we do. we ship microinverters that basically prevent CO2. So these are the -- these are statistics over time. So big one to note is 137 terawatt hours of clean energy production over time. Next, this is important. I'm going to slowly walk you through this, build best-in-class distributed energy systems and deliver them to homes and businesses. through our installer and distribution partners, enabled by a comprehensive platform. We are getting more into commercial. So that's why the business is there. and distributed energy system. I talked about Ensemble, which is the distributor architecture. So installer and distribution partners are very important for us. So our business is through our installers. So therefore, a lot of our decisions are based upon the ease of doing business for distributors, installers and ultimately which is why the installer platform is very critical for us, how to ensure that we are easy to do business with and how to ensure that installers can get their job done with not only with the products but also with tools and software. Next actually go back to that page. I'd like to point out the picture there. That's the fourth generation system that -- the one on the left is the meter color. The meter collar, we introduced it last year, June time frame to the market. It is now qualified in 64 utilities across the country, qualified in all the major utilities in California. And that basically makes backup very, very easy and we expect this to help our business considerably as we run this more to more utilities across the nation. So a brief recap on what does the Enphase Energy system contain -- we started with microinverters. You see on the roof, you have microinverter, that's where the company started. The basic building block for us is still the microinverter, the semiconductor-based software-defined micro invert. So you see microinverters there and then you see the battery there, and I talked about the [indiscernible]. You have an EV charger there that is now becoming bidirectional. The Enphase app Yes. So system is slowly growing. So solar, batteries, EV chargers, home energy management. Next. So this is the one I was telling here, the more clearer picture. The left is the meter collar and the right most boxes a 10-kilowatt hour battery, which is our fourth generation battery. It's more compact than our third generation. And we started shipping this from June last year. This one, IQ9. IQ9 is our ninth generation grid farming microinverter based on GaN technology. As power becomes higher and higher, silicon has got some limitations GaN can handle a lot more power. So we started shipping commercial microinverters based on GaN for 27 watts in December. Till now in phase -- do not have a 3-phase 480-volt product in the U.S., and that has changed in the last 6 months. We have started shipping and we have also started shipping in select places, the IQ9 and residential microinverters as well. And that's going to become more mainstream in this quarter. Today, we announced that we were taking 3 orders on a product, which is IQ9, [indiscernible]. The 48-volt is line-to-line, it's returned 77 that is line neutral. So why is Q9 important? While this product that you're seeing here [indiscernible], IQ9 is 548 watts. In the commercial business, the panels are now quite high wattage. The panels can go anywhere from 600 watts to 650 watts. And when you have 650 watts commercial panel, you need the correct microinverter to be compared with it. So one obvious was to make our 548 watts, and that was easy to make with our GaN platform. And of course, this is made in the U.S., which is important for the commercial stim owners, and it means it is [indiscernible] Okay. Next. Just a recap of batteries. We entered the battery business. Originally, we entered it in a very small way in 2016, we introduced what we call first-generation batteries in Australia. That was a very small battery, a kilowatt hour. But then we really started getting into the battery business in 2020. So batteries that you see on the left are the ones we shipped at that time, 3-kilowatt hours, 3.3-kilowatt-hour building blocks and the 10 kilowatt-hour battery would be 3 of the 3.3 kilowatt hours. The one on the right-hand side is our third-generation product, and that is being used a lot by Europe. Europe uses uses the flex faced version of the third generation because it is -- everything is phased there. 3-phase backup is important. Again, this -- the third generation has got substantially higher power than it's got double the power of the first and second generation. Next. Then I talked about the fourth generation product. We introduced it in June. The main event here is the meter color. And of course, the compactness of the battery 62% lesser wall space compared to our third generation. Now we are working on our fifth generation. We expect to pilot the battery there. That will be even more smaller, even more constructive [indiscernible] prismatic cells and the form factor is quite amazing. -- we will be able to have a stack of 30-kilowatt hours, which means to the end consumer, it will guess one box on the wall. Okay, next. Power match technology, this is also an interesting feature. Basically, what this means is you can see on the right, our -- that's the third generation battery. It's got 6 microinverters in it. And when the home is consuming less what, for example, 500 watts, which is typical for the most part, 80% to 85% of the time, the home consumes less nominal power 500. So all of the inverters in the battery do not need to be on. And that's the advantage of an architecture where it is distributed architecture, which means you have I have 6 of these micro inverters, 640 watts each. So in the case I just now described, I would not have. I mean I would have 5 of them in standby. I would only have one microinverter active. And what's the advantage of that? All inverters, they need current, meaning they burn current to operate. That's called as a tear loss, which is the inherent inherently, they need circuitry in them to be active. And so that consumes current. And by putting them into standby mode, we can eliminate that so we can exactly exactly tailored these microinverters are cording to the low, while that is not exactly possible. If you have 1 monolithic string inverter. If you have 1 monolithic string inverter, if your consumption is 500-watt that string inverter is still active. So this is a big deal. It helps you to say kilowatt hours and stored energy, for example, can last up to 40% longer than competition. So that's available now with the over-the-air software upgrade for both third generation and fourth generation, and it will be defaulted default for us going forward. Next. This is a new one. This is an IQ world commercial battery as we -- you saw we got into the 3-phase solar business in the U.S. This will complement solar business and because batteries are getting popular, they save money, basically self-consumption -- they provide backup. There is demand charges. So batteries are getting very popular for commercial. And this is for the small commercial business. We are talking about tools, hospitals gas stations, small businesses, many more applications there. It's a 80-kilowatt hour. This is an 8-kilowatt hour cabinet that you see, and that can be 25 of these can be strung together in a site giving up to 2-megawatt hours. It is -- it supports 2-hour and 4-hour configuration, which means that kilowatts of continuous power for a 2-hour configuration. Once again, uses exactly our principles, which is distributed architecture uses 314 MPR prismatic cells a 5-year warranty. So this is, again, taking it to a next level here. This -- we expect to pilot this product in Q1 2017. Thank EV charger. We have introduced EV charger into -- we first introduced it into Europe. And a few months ago, we introduced into the U.S. And this is a beautiful product. It is a completely redesigned product. It's got a lot of bells and visuals, green charging, supports dynamic pace switching, dynamic load balancing which is dynamic load balancing is quite simple, which is, let's say, you have a fixed main panel rating at home, let us say that it's 100 amperes. And you have turned down your charge. The charge is charging at its maximum current. And then certainly, you've turned something else on in the home, that consumes a lot of current. The charger is capable of throttling down itself in order for you to still meet your name so that your breaker doesn't trip. So once again, very, very smart, a lot of other features here, seamless integration into Enphase's ecosystem help [indiscernible] savings. So this is starting to ramp nicely in both Europe as well as America next. Based on that charter architecture, this is a bidirectional charger. What is a bidirectional charger. The charter on the previous page does not have any active circuitry in it. While this one, this bidirectional charger has got grid-forming microinverters inside the chart. And what does it do? This charger taps into the DC port of the car and convert energy from the car into the home. DC from the car into AC for the home. So can do B2H, which is vehicle to home, which means providing backup for the home as well as vehicle to grid and participate in grid services. You can see here, again, the architecture is very simple [indiscernible] color that we already have, which is actually hidden behind the meter and then one by directionally each other. You can only start with this -- you don't need solar. And that -- this will give you a vehicle to home. Well, of course, solar would be the right economic choice because you need to pay for the charging. So solar would be a good economic choice. This can work. You can have a solar system and you can have a [indiscernible]. That will work, too. In addition, you can have a solar home battery as well as a bidirectional EV charger with the carpet. So it's extremely flexible, and we expect to start shipping this product in Q4. Next, energy management. This is energy management, more popular in Europe than the U.S. So customers have things like third-party EV chargers, heat pumps, hot water heaters, so we are able to basically with the IQ Energy router, we are able to take all of those and then interface it with our home energy management system so that customer only has got 1 app to work with. And we have a nice feature called AI-based optimization. So a customer doesn't need to bother how to extract maximum efficiency, how to extract full self consumption out of this setup. This will be done automatically for next. Installer platform, I'll just briefly touch upon this. This solar graph is our installer platform. And it consists of lead management, design and proposal, working with various financing companies, generation of is automated permit plan sets. And of course, we have our installation and commissioning software plus O&M. We do O&M with Enphase care. Enphase care is getting slowly popular among our fleet. Next. Let me cover AI and Enphase is offering now IQS stands for solid state transformer. Let's go to the next page. We announced this a couple of weeks ago. This product is for AI data centers. There are 3 constraints emerging here. Demand is growing much faster than the AI dedicated capacity and the power infrastructure. That's one. AI loads can swing from idle to full power several times per second, dressing the grid. And then the legacy architectures today have too many conversion stages between grid and compute. So all of these 3 things need to be addressed because the rack power is slowly increasing. Today, it's the order of of the order of 100 kilowatts and that is increasing to a megawatt soon in a couple of years. And so whatever architecture that is present today will not work in the future. Next. This talks about the demand supply gap next. Just a quick background, why we think we are entitled to play in this area is that what we are talking about is power electronics, that's what we have experienced in -- we have shipped 9 generations of microinverters we have shipped. This is what we do for a living 87.8 million microinverters, 5 million systems. And and a lot of things I already talked about. So we think our architecture is perfect for addressing the challenges with the data centers. Okay. Next. This is our IQ solid state transformer. This is a 1.25-megawatt building block. It is a super cluster of 342 power modules and each power module is approximately, you can think about it as approximately 4 kilowatts. We will support 35 kV and 15 kV class, which means what's the definition? I mean, what does the solid-state transformer do takes medium voltage AC and converts it into 800 gold DC. Medium voltage AC is the 35 kV class 35,000 gold class and 15,000 volts at [indiscernible]. What's car below voltage in the industry is actually may not seem low voltage to us, but that's the terminology, that's 800 [indiscernible]. So the 800-volt DC is directly going to go into the AI rack, and then you're going to have that 800 volts further step down to approximately 1 boat, which is where the NVIDIA chips operate. So -- the architecture is going to get substantially simplified. There are several power conversions, stages in between today, today's architecture is not an [indiscernible]. It is approximately 50 world DC. So NVIDIA introduced the 800 BDC architecture. The entire industry is working to support that ecosystem and what we are going to be doing is to introduce and SST volume shipments in 2028, planned pilots in 2027. And there may be something like for SSDs per skid, which is the last comment, which is 5 megawatts per skip. Once again, each SST is 125 megawatts first bullet. And you see in the picture there are 342 power modules there. Next. That's the building block. That's the power module. So for kVA power module distributed architecture, single-stage power conversion because of the ASIC advantage I talked about, that's the custom [indiscernible] game GaN provides us with switching efficiency and high power, 98.5% peak peak efficiency brand-new transformer design. Probably the biggest complexity is the transformer design because now you're talking about going from 35 kV class, to 800 [indiscernible] soft switching design. We are able to -- because we operate because we operate at the microinverter scale, we have our soft switching design, low EMI, plastic enclosure, Therefore, we can target microinverter class reliability results also built in redundancy into these -- into the product because the availability we need to cater to the data centers is [indiscernible]. So that requires us to have clever redundancy, which is what the distributed architecture automatic that it gives next heart of the power module. It's not anything different from what we have today, [indiscernible] fifth-gen custom, 22-nanometer custom silicon powering the single-stage converter, multi-code software, built in communication, security and citadel function. Now we have 2 sections in the power module. One is medium voltage, and that's tens of thousands of words and then the other is low voltage. -- there is now a fiber optic interface between the 2 for communication there. GaN BDS. BDS is a bidirectional Fitch, that helps us to go from for [indiscernible] bidirectional switch for our IQ microinverters. This enables compact, very high efficiency power conversion and of course, got fast switching, which is not easy to do when you start switching at with silicon carbide, for example, next Who do we believe we have an advantage because our response time, because we are single stage, our response time is very good, millisecond response. Because the sub-melt in response is good. that is potential for us to reduce or eliminate the car infrastructure. Site car infrastructure has got the BBU battery backup units and capacity and backup units as we might need a little bit of the CBU, but the BBU is -- can be potentially eliminated. And there is more work to be done there, obviously. [indiscernible] availability I talked about it, lower field service [indiscernible] a whole point is to have built-in redundancy. So it is easy, meaning field service will not be necessary. But if a service were necessary hot swap is possible. U.S. supply chain One of the problems is that the transformer supply chain is completely full now. This is the traditional transformer supply chain. And that is completely full. But what we are doing is now a semiconductor-based software-defined supply chain. That's what we bring in, and we have experience doing that till now. So you will no longer rely on the traditional transformer sure. And we can do all of this in the U.S. It's high volume. It's -- these are high-volume components available and semiconductors. And we know how to do [indiscernible] A quick overview on the financials. Basically, you can see 2025 was not bad. We grew from 2024 a bit there. 2026 is interesting because what we just went through Q1 '26 was the first quarter where the 25D tax credit was eliminated for cash and loan business. Obviously, that was not a desired result, but we have to look forward, not look back. And so the industry is adjusting adjust. We have our plans there. You heard a robust introduction of new product pipeline. You saw the expansion into commercial. You saw the for into data centers. And in addition, we are working with a few partners on prepaid leases. And this prepaid lease helps us to restore the '25 [indiscernible] the cash and loan customer base. It helps us to bring that back. So we are excited about that product, the prepaid lease product, and we expect that to start ramping through the year. But you can see the healthy thing here is regardless of the macro, we continue to make money, and we continue to generate positive free cash flow. Next. So conclusion, so we are proud of our tech 550 patents and pending implications. Now we not only have products for residential, we are branching aggressively into commercial and data centers. The SAM served available market is $19 billion as of today, but that is going to expand when we introduce the product for the data centers, that's going to expand significantly when we introduce product for and the small commercial batteries early next year, that SAM is going to expand. So -- and then the bidirectional culture when we introduce that SAM is also going to expand data electric vehicles. So that's a massive market. So that's it. Okay. Thank you.

[Operator Instructions]

I do see a question here. Any planned demo in 2026 for [indiscernible] USA data centers? In 2026, our internal plans are to get a full system demo first internally, and then we expect to be doing pilots in 2027. Any questions?

[indiscernible], if you could tell us a little bit what the dynamics of the worldwide markets? Where do you see most opportunities, U.S. versus Europe back in May, can give us a perspective of this point of view. SP-4

U.S., again, is an attractive market for us. In U.S., the dynamics are -- the dynamics have changed in the last few years. Originally, solar Solar was the thing to do. So net metering drove that lot. The economics were good. And then all of a sudden solar becomes not very sustainable because of the duck curve. So you find in the U.S., although most of the states are still solar, you are slowly but surely seeing them all gravitate towards solar plus storage. So net metering is getting replaced with the form of net metering example, California, where there there is not much of export incentives. So every state, my prediction is every state sooner or later in the next 10 years. will become solar plus storage. So I think we are well positioned there. So the batteries that will -- the systems that will win are systems that can effectively integrate solar batteries, things like the bidirectional EV charger and do proper energy management. So that's my perspective there. And I'm talking mainly about the solar plus battery business, not yet talking about data center. Coming to Europe. Europe is actually a little bit ahead of the U.S. In Europe, many countries have already recognized that recognize the value of self-consumption. Many countries have something curves a feed-in tariff, which is really another way to say that your export incentive is gradually reducing. Some countries have the export tariff close to 0. Like for example, France, 2 or 3 years back, France had an export had an export incentive. Now that export incentive is approximately 0, which is like EUR 0.04 per kilowatt hour. It's very, very less. So Germany moved to solar plus storage. Netherlands is now needing solar plus storage because they are considering to eliminate net metering. France is doing its own thing. They're also going to solar plus to [indiscernible]. And so every country is going in that direction, and that will happen much sooner. In the U.S., I said 10 years, but in Europe, it's already there. for the most part. So therefore, what people are looking for. They are Europe consumers are are quite cost sensitive. So they are looking for -- they are looking for us to give them cost-effective solutions on solar, batteries, by die, bidirectional EV chargers, we believe, will take off in Europe as well. So that -- and the key is to make sure the system -- it's a full system all in one system and available for them at low system prices, where I think the -- in Europe, today, if you ask me, I have to be candid about it, there is a lot of Chinese product in Europe what happened was when the Ukraine crisis happened, at that time, the demand skyrocketed at that time everyone realized that supply was a massive problem. And so the Chinese suppliers recognized this first and they started ramping up their presence in Europe ever since that. So -- and they do -- these are not bad products. they do service the customers recently, but they are point products. The fine products means it is not a full solution, but it is, let us say, a battery. So where Enphase can win is if we not only help in overall system cost reduction. But if we if we offer a comprehensive energy management solution and all in once we use that comprises of solar, batteries, bidirectional chargers normally be chargers, heat pumps, hot water heaters everything around doing home energy management that will be a lot more value added to the consumer. And what we are doing on our new products, the fifth generation battery, for example, will eliminate the illusion that Enphase products or in phase batteries are high priced. This one will -- it will not -- it's going to be cost effective. volume-wise and it uses 10 MPR prismatic cells. So it's very, very compact. The energy density is actually 50% higher than our than our fourth-generation battery, which means that the size, the cost the functionality is going to be always an AC corporate functionality. [indiscernible] I talked about Power match. We are able to do power match because we have micro inverters in there. We are able to shut them off. So we are able to do a lot of innovation there to add value. So that's what I see. So I see demand going up for solar and batteries. I see us innovating there with IQ9 on the solar side, so fifth generation battery with our commercial battery with the [indiscernible] product. And then the last one is -- I mean last but not least, the data center opportunity is huge for us. The data center opportunity, once again, it solves a real problem for the data centers, which is simplifying power conversion. And the [indiscernible] conversion is simplified now instead of having multiple stages from medium [indiscernible], you now have on solid-state transformer there. And it uses not a brand new architecture. It uses the architecture that we have tried and tested for years. [indiscernible] There is an uphill in terms of market penetration regarding assist many data centers already, how do you plan to penetrate and what effort are you currently doing. So like what I talked about, SST, very -- I mean, brand new segment. There are a few startup players. There are a few established players. And I believe everyone is approaching it with the conventional with the conventional architecture. Our architecture is so unique that if you ask me what do you think the differentiation is the differentiation for us is going to be a fast response time. fast response time, coupled with the distributed architecture, providing the service level with high efficiency is something unique to microinverter architecture, and we expect to be highly differentiated from that perspective. Having said that, it is still early days there. And so there is still some ways for us to go in order to going from prototypes to real full systems to actual pilots running for months and showing the concept of side car optimization. So we do have some work ahead of us. When will bidirectional charger preorder start for delivery in Q4 2026, what is the price we will let you know about the price. But we expect the preorders to begin in -- given the critical importance of GaN, there is there any constraint how much of the substrate comes from China. There is not any constraint right now. Our suppliers don't have any concerns there. Okay, with [indiscernible], how significant is the made in U.S.A. label to gain further market share on full range for that matter, elsewhere in the world. The made in U.S.A. is important for us on a couple of things. One is the domestic content is critical for the third-party TPO suppliers. The domestic content -- products with domestic content enables the third-party the TPO players, third-party owners to get to get the ITC to get ITC tax credit. You get your base. And then if you have domestic content, you can get 10% additional. So therefore, that is a requirement. In addition of what got created by the Biden administration was the IRA. And that provides manufacturing incentives for companies in the U.S. And 1 such incentive is a production tax credit. In order for us to produce inverters in the U.S., we do get production tax we get production tax credit there. So those are the reasons to do it in the U.S. Is it significant in terms of installers like it? Yes, installers who actually were actually in favor of made in U.S.A., they are able to sell that well. But competition -- I expect our competition to also catch up. Do you have a plan to offer step-up transformers for the commercial and utility scale solar technology platform, specifically dedicated ad mounted substation transformers, that go from inverter output voltage to medium voltage for interconnection. No. But if you look at it, what we are trying to do here and one possible application of the SST, which which I haven't yet focused on, but I don't mind sharing is -- if you have a utility scale solar, for example, the utility scale solar, the panel DC voltage is approximately 15 mini panels are strung together and you have 1,500 gold DC. Imagine that 1,500 bold DC directly going to medium voltages, you do not need a low [indiscernible] you can directly go to medium voltage AC to the click. So utility scale solar can benefit a lot through the SST architecture. You don't need the conventional transform. Similarly, you look at your DC fast charge, DC fast charging if you see medium voltage comes in and then there is a custom transformer. And then you have low [indiscernible] and you build a DC charger. So that is not required. You can directly go from medium voltage to low voltage DC with one stage SSP single-stage trend, single-stage conversion from medium voltage to low voltage DC, you can create all of a sudden fast DC charger. -- by reducing the number of stages. So SST has got a number of applications. And right now, we are leveraging the first 1 for the data centers, which will reduce the number of power conversion stages, which will directly take medium voltage AC into the compute track with 800 volts. Is there any plans to reduce microinverter prices to tackle Europe? Yes, we already did last -- late last year in December, around November, December time frame. -- we did reduce our microinverter prices in Europe by 20%. And we also reduced earlier this year, we reduced the microinverter prices in the U.S. as well. by approximately 20% to -- I think, 15% to 20% in Q1. We have also adjusted pricing on batteries. We adjusted pricing on batteries in the U.S. in March, approximately by 10% to 12%, and we adjusted pricing on batteries in Europe just now. the last week. And I said that in the earnings call, we adjusted pricing by another 10% in Europe. So we are able to do that because our cost structure is getting better. And then all of with the reversal of the tariff ruling the EPA, we no longer have to pay a lot of tariffs. So we were able to get approximately improvement of of gross margin there. And we thought that this would be the good investment for us to basically reduce the prices there. And that will be aligned into a fifth generation battery, which is coming.

So that was last question. Thank you again for your attendance today and for your continued support of Enphase Energy.