Good day, ladies and gentlemen, and welcome to your Enphase Energy's Second Quarter 2014 Financial Results Conference Call. At this time, all participants will be in a listen only mode. But later, there will be a chance to ask questions and instructions will be given at that time. And as a reminder, today's conference is being recorded. And now, I would like to turn it over to your host, Kristina Karabinov.
Good afternoon, and thank you for joining us on today's conference call to discuss Enphase Energy's Q2 results for the period ended June 30, 2014. This call is also being broadcast live over the web and can be accessed in the Investors section of Enphase Energy's website at www.enphase.com. On today's call are Paul Naughey, Enphase Energy's Chief Executive Officer and Chris Senesal, Chief Financial Officer. After the market closed today, Enphase issued a press release announcing the results for its Q2 ended June 30, 20 14. We are providing an accompanying presentation with our earnings call that you can access in the Investors section of our company's website.
During the course of 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 microinverters, advantages of its technology, market trends and future financial performance. These forward looking statements are based on the company's current expectations and inherently involve significant risks and uncertainties. Enphase Energy's actual results and the timing of events could differ materially from those anticipated in such forward looking statements as a result of these risks and uncertainties. Factors that could cause results to be different from these statements include factors the company described in its press release of today, especially under the section entitled Forward Looking Statements, as well as those detailed in the section entitled Risk Factors of the company's report on Form 10 ks for the year ended December 31, 2013. Copies of these documents may be obtained from the SEC or by visiting the Investors section of the company's Web site.
Enphase Energy cautions you not to place 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 and have been adjusted to exclude certain charges. The company has provided reconciliations 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 website. Now I'd like to introduce Paul Nahi, Chief Executive Officer of Enphase Energy. Paul?
Good afternoon, and thanks for joining us today to discuss our Q2 2014 financial results. As usual, I'll start with my opening remarks and touch on some key highlights for the quarter, and then Chris will take us through the Q2 financials and the outlook for the Q3. After that, we'll open up the call for Q and A. We are very happy with our financial results for the Q2 of 2014. We reported record revenue of $82,000,000 an increase of 41% year over year and up 42% sequentially.
This top line performance was mainly driven by surging demand and strong business momentum in our core U. S. Residential market, where Enphase is the leading inverter company, as well as market share gains in the residential and commercial solar markets in the U. K. And Australia.
The non GAAP gross margin for the Q2 was also a company record at 33%, representing a 490 basis point improvement over the Q2 of 2013. The combination of accelerated top line growth and further gross margin expansion 2nd quarter financial results, but I will say that I'm extremely pleased with our continued progress and momentum. The 2nd quarter's financial results reflect the growing demand for Enphase microinverter systems and our ability to execute on the key initiatives critical to our success. These key initiatives include providing superior technology, reducing system costs, growing market share, expanding our geographic presence and continuing to chart our path to profitability and sustainable positive cash flows. I'm pleased to share tangible evidence of the progress we're making in these areas and I'm very proud of the entire Enphase team for their continued hard work and dedication.
During the Q2 of 2014, we shipped 132 megawatts, an increase of 54% year over year. Since inception, we've shipped over 1.2 gigawatts of Enphase microinverter systems. We're the highest volume inverter company in the world with more than 5,700,000 units shipped and Enphase systems have produced over 2 terawatt hours of clean energy. The global demand for solar continues to grow rapidly and is expected to be 49 gigawatts in 2014, an increase of over 30% compared to 2013. The U.
S. Solar market is especially robust. According to GTM Research, 2014 is expected to be another year of significant growth in the U. S. With a forecast of 6.6 gigawatts of PV installed, up 39% over 2013 and nearly double the market size in 2012.
As for Enphase, our 2nd quarter U. S. Revenue was up 50% year over year. In our core U. S.
Residential market, we saw significant customer demand for our microinverter system with our current and new customers from the larger third party finance companies to the smaller professional solar installers. Recently, a GTM research report named Enphase the number 1 North American residential PV monitoring company. According to the report, Enphase is noted as the fastest growing residential PV monitoring provider in the world. We currently monitor over 160,000 systems globally and collect over 500 gigabytes of performance data daily. The Enphase system combines advanced hardware and software solutions to give solar professionals a competitive edge in their business.
Installers are leveraging our Enlighten software to streamline the installation process, provide billing information, monitor their sites as well as optimize operations and maintenance through automated fleet management. We made tremendous progress in many areas of our U. S. Business during the Q2 as we continue to support our existing customers well as look to new partners, end markets and channel expansion as ways to accelerate our growth. We're very proud of our existing partnerships with the leading solar installers and financing companies.
They've been doing an amazing job in driving solar adoption by providing clean, renewable energy, giving the consumer money every month. The solar financing landscape is evolving rapidly and Enphase is supporting our installers by developing partnerships with the most respected and innovative financing companies in the world. We're helping our residential and commercial installers by working with companies offering many different solar financing options, including leases, loans and innovative programs that offer system owners even more choices. For the U. S.
Commercial solar market, we recently announced our partnership with Technology Credit Corporation, a financial products and services firm, to offer financing packages installer integrators and customers in the small to medium sized commercial solar PV market. Financing for the small to medium sized commercial market can be challenging and has been underserved. TCC's experience in providing attractively priced, creatively structured financial packages to commercial installers and customers helps fill a notable gap in the market. The new home market is another example of a relatively untapped channel in which Enphase is thriving. Lennar Homes 2020 program is a big success and they're now expanding it into more Lennar communities.
In addition, we're partnering with other installers to address this growing market. For instance, Leonard Roofing, a regional California roofing and solar PV contractor partnered with Bishop Homes in Grover Beach, California and with California Home Builders, a Southern California real estate development company to install Enphase microinverter systems in their new housing developments. Projects such as these are further evident that solar and Enphase systems are being incorporated as a standard new home feature alongside LED lighting and energy efficient appliances. The reliability and ease of installation makes our microinverter system uniquely suited to non traditional markets as well. We're partnering with local installers and financing companies in many island regions to promote the deployment of Enphase microinverter systems in those areas.
As an example, we expanded our partnership with Cenova by launching into the U. S. Virgin Islands, where Enphase microinverters will be Cenova's exclusive inverter for this region. We're proud to work with Sunnova to be the first to bring affordable energy to homeowners in the U. S.
Virgin Islands. We recently formed a strategic agreement with North State Solar Energy, naming the company as an Enphase American Pride partner for the installation of Enphase's new American Pride microinverters in commercial and residential solar installations within key agricultural counties throughout Northern and Central California. As an American solar success story ourselves, we value North State Solar's commitment to local communities and community job preservation. An important attribute of our microinverter system is our ability to generate more energy than traditional inverters, providing our customers with a better return on their investment. This advantage has been recognized across the solar industry and is embedded in many solar calculators.
As another example of this, we worked with MOD Solar a new partnership to further increase efficiency in the solar industry. Their software will incorporate Enphase Energy's production calculations into the MOD Solar platform so that proposals will reflect the production boost their customers can achieve by installing an Enphase system. This partnership is yet another way to advance solar growth as our technology makes the solar installation more productive and easier to manage. Turning to our international business. We continue to be pleased with the top line contribution as revenue in Canada, Europe and Australia was up 38% sequentially.
During the Q2, we started offering our 4th generation Enphase system, the M250 microinverter to the U. K, our core European markets and Australia. By leveraging the successful introduction of our 4th generation system in the U. S. Last year, we continue to raise the bar for inverter quality, performance and reliability in these regions.
In Europe, we increased our market share and presence by leveraging existing partnerships and developing new ones. During the Q2, I visited with several customers in Europe and came away more confident than ever that Enphase is poised for success. Our market share continues to increase and the Enphase brand is becoming very well known and respected in every market we are in. In Australia, we made great progress and posted strong second quarter results. Revenue in Australia was up 184% sequentially and we gained market share with some major residential installers and expanded our distribution channel by partnering with some well regarded industry players including Australian Microinverters and Solar Plus Solutions, a subsidiary of L&H Group.
We place great importance on our distribution strategy and are pleased to partner with companies such as these who have the commercial breadth and depth needed to support our increasingly sophisticated installer network. Our market leading technology has been well received in both the Australian and New Zealand markets with our products being installed in a host of high profile sites such as the Richmond Football Club's iconic Hunt Road Stadium and a national New Zealand landmark, the Auckland War Memorial Museum. I'll close my Q2 comments by acknowledging our outstanding financial results. Our quarterly top line growth of 41% year over year, record gross margins and a healthy balance sheet highlight the success of our business model and our ability to execute. We have long believed that our high technology business model, world class products and superior customer support will help sustain our long term growth, margin expansion and allow us to continually develop new and innovative products and systems.
Now, I'll turn it over to Chris for his review of our financial results.
Thank you, Paul. First, I will start by providing some more detail on the financial results for the Q2 of 2014 and then I will turn to the business outlook. As a reminder, the financial measures that I'm going to provide are on a non GAAP basis unless otherwise noted. During the Q2, we saw explosive growth in the solar market, resulting in accelerated demand for end phase microinverter systems. Total revenue for the Q2 of 2014 was $82,000,000 exceeding the high end of our revenue outlook of $69,000,000 to $73,000,000 that we provided last quarter.
Revenue for the Q2 of 2014 increased 41% compared to the Q2 of 2013. On a sequential basis, revenue was up 42% from the Q1 of 2014. As Paul mentioned, the large year over year and sequential revenue growth was driven by strong overall demand for solar in our core U. S. Residential markets as well as the growing demand for Enphase microinverter systems and increased contributions from our international markets including the U.
K. And Australia. We shipped 132 Megawatts AC or 152 Megawatts DC during the Q2 of 2014, which is an increase of 54% on a year over year basis. The 132 megawatts shipped represents approximately 598,000 microinverters, of which over 85% was our 4th generation microinverter system. We have now completed the switch to the 4th generation system in the U.
S. And started the transition process in Europe and Australia as well. The U. S. Market accounted for 85% of our total revenue in the Q2, while international revenue was approximately 15 percent of total revenue.
We saw nice growth in the international markets, especially in the U. K. And Australia, but currently our business in the U. S. Driven by the strong business momentum in the residential market is growing slightly faster than our international business.
Gross margin for the Q2 of 2014 was a company high of 33%, an increase of 4.90 basis points compared to the Q2 of 2013 and an increase of 30 basis points compared to the Q1 of 2014, as our product cost reductions continue to outpace price reductions. Operating expenses during the Q2 of 2014 were $27,000,000 R and D expenses were $10,400,000 sales and marketing expense were $9,800,000 and G and A expenses were $6,800,000 The increase in operating expenses was mainly driven by higher R and D project expenses and compensation related costs, including an increase and catch up of incentive accruals as well as certain new hires in support of the acceleration of our top line growth and consistent with our balanced profitable growth strategy. These non GAAP operating expenses excluded $2,300,000 in stock based compensation expenses. Our non GAAP operating income for the 2nd quarter was 6 $1,000 resulting in our 2nd quarter of positive operating income and in line with our breakeven model that we introduced 1.5 years ago. For the Q2 of 2014, the net loss was $400,000 or a net loss of $0.01 per share compared to a net loss of $4,800,000 or $0.12 per share in the Q2 of 2013.
On a GAAP basis, the net loss for the Q2 of 2014 was $3,000,000 or a net loss of $0.07 per share. Looking at the income statement on a year over year basis, I'm very pleased with our top line growth and gross margin improvements as well as a significant improvement to our bottom line. Turning to the balance sheet. Cash flow from operations during the Q2 was almost breakeven, while our net cash flow was negative $2,300,000 Days sales outstanding was 52 days and inventories on hand was 26 days. Capital expenditures during the Q2 of 2014 were $2,200,000 and depreciation and amortization was $2,000,000 We repaid approximately $1,300,000 of our existing term debt.
We exited the 2nd quarter with a total cash balance of $37,600,000 $6,500,000 of term debt. As a reminder, our working capital facility remains undrawn. We remain confident that our cash position and credit facility, combined with our focus on working capital management and drive towards profitability, provide adequate liquidity to support the growth of our business. Now let's discuss our outlook for the Q3 of 2014. We believe the strong demand for our microinverter systems and favorable industry conditions provide the foundation for a strong third quarter.
We expect revenue for the Q3 to be in the range of $93,000,000 to $98,000,000 At the midpoint of the revenue outlook range, revenue would be up 54% compared to the Q3 of 2013. We expect gross margin to be within a range of 32% to 34% and we expect non GAAP operating expenses to be approximately flat to up 4% compared to the Q2 of 2014 as we continue to invest in the company's growth. And now I will open the line for questions.
So we'll take our first from Philip Shen from ROTH Capital Partners. Phil, please go ahead.
Hey guys, congrats on a great quarter.
Thanks very much.
Hey, so you guys provided some great Q3 guidance. What do you see in Q4? And how do you see it evolving given your discussions with your customers today?
Well, Phil, as you know, we only provide 1 quarter at a time guidance. So I'm not really going to provide guidance here for the Q4. Having said that, just in general, if you look at the last couple of years and at the normal seasonal trends, we have seen anywhere 4th quarter is kind of like a flattish quarter in terms of sequential growth compared to the Q3. Sometimes it has been down 5% sequentially. Sometimes it has been up 5% sequentially.
And so again, I'm not providing any specific guidance for the Q4, but that's a normal seasonal trend.
Okay, great. And this one's for Paul. Thank you, Chris. Paul, can you walk us through your vision of how Enphase shapes and molds solar financing? What is your view of how the no money down loan, for example, shapes the demand in the industry as we go forward here?
Sure. What I think is important to remember is that, first of all, Enphase is completely neutral as to the forms of financing. We encourage all forms of financing available and are encouraged by the different unique and creative products that are out there. One of the advantages of an Enphase system is that we provide more energy for the owner of the system. So whether it's a residential owner or a lease owner, the return on investment is simply going to be better with Enphase.
The other advantage of an Enphase system as it relates to alternative forms of financing, let's say non lease or PPA forms of financing is that the O and M, the operations and maintenance associated with Enphase is much lower than it would be with a traditional inverter. As a result, it's well within reach of a lot more people. As an example, what would be the most recent announcement we made or one of the most recent announcements we made with Mosaic included EES or Enphase Energy Services, which is where we will actually provide the support, the O and M support for the customer. But our view, our long term view and this is true not just domestically but internationally is that we will see a variety of financing options and they will likely change post the ITC expiration. And what's important for us is to make sure that we support each and every kind to make sure that our customers have every option available to them.
Great. One more and I'll jump back in queue. Changing gears to the international exposure that you have, can you talk about the market share that you had in the U. K. And Australia in the quarter?
So it's too early for us to talk about specific market share in those countries. What I can say is that they are increasing. We feel very good about the progress we're making in terms of market share, in terms of brand recognition, in terms of our reach towards installers and distributors. What's becoming very clear is that the value proposition that is resonating so well in the United States resonates equally with customers in the APAC region or the EMEA region. So we remain more confident than ever of our ability to succeed and perform in these countries.
Okay. Thank you. And we'll take our next question coming from Colin Rusch from Northland Capital. So Colin, please go ahead.
Thanks so much. Could you walk us through what's going on with these accrued liabilities? It's a pretty big jump there. I would love to get some detail on what's happening there as well as with the accounts receivable growing so much quarter over quarter?
Right. So first on the accrued liabilities. As you can see, our operating expense came in at $27,000,000 that included some catch up on incentive accruals that end up in the accrual line. I think that was driving most of the increase there. In terms of receivables, obviously, our top line was up 42% sequentially.
That, of course, results in a higher receivable balance as well. It's slightly more than the 42% sequentially the receivables. Some of the sales was in the second half of the quarter as the business continued to grow. We don't see any collection issues with our world class customers that we have. So I think it's part of growing so fast.
We will have to continue to invest in working capital going forward.
Okay. And then as you continue to invest in R and D and the platform, can you talk a little bit about what you're expecting to see come out of those efforts and that spend, obviously up 20% on that R and D spend. Can you talk a little bit about the cost out programs and the cadence that you're expecting out of that and how that is going to impact your gross margins going forward? And then what other programs you have on the horizon that you can talk about
now? Sure. So it's important to remember that we are 1st and foremost a high technology company in the solar space. As a pipeline right now are products that are very much along the lines of the microinverter itself as it's applied to the commercial space, as it's applied to the utility space. We obviously have next generation microinverters for the residential space that add features and functions as well as reducing cost.
So there is a tremendous amount of work going on in all of these areas. All of it is very, very exciting. And then there is a lot more that I am not at liberty to talk about at this moment, but what we'd love to do is just invite everybody to the Solar Power International Trade Show that's occurring at the end of October, where we will be announcing some new products and introducing some new services. But it is it's a mix of products along the lines of cost reduction, performance and future enhancements and looking at new areas, new spaces that round out Energy Management.
Okay, perfect. I'll follow-up offline. Thanks guys.
Thank you. Thank you.
And our next question is coming from Josh Baraboo from Canaccord. Josh, your line is now open.
Hi, thanks. Obviously, given the strong guidance, it doesn't look like you're seeing any push outs of projects from the antidumping or countervailing measures that have come out. I'm just curious to hear your general thoughts on that and how it may affect you going forward.
Sure. So clearly pricing going up is not good for anybody in the industry. We all have a responsibility to continue to reduce prices make solar more affordable and more available to more and more parts of the world. However, it's what's happening right now is certainly being recognized by Enphase and the entire solar industry. I think what's important to note here is that the industry in the United States is very robust.
It has tremendous momentum. And while it might be slightly affected by some of these numbers, I think overall, we should not expect a very material difference to demand. Based on the latest data that we have, we think that the effect of these pricing changes could mean somewhere in the neighborhood of $0.10 a watt on the module side, which while meaningful is very likely not catastrophic. So we need to work hard to continue to reduce prices, all of us, all the in this space. But I think again, the industry and the companies are mature enough and have enough momentum that they can withstand something like this.
Great. And back towards some of the discussions we were you were having on the different types of financing. Do you have the level of visibility to either quantify the risk premium or ideally the decrease in the risk premium in the interest rates of Enphase Solar Systems? Do you have that level of granularity?
I don't have that level of granularity available offhand right now. What I can say is that in many of these cases, the fact that Enphase produces more energy allows consumer. And because of the reliability, which we have embedded many times with some of the largest financing companies in the world, allows for a better financing option and better financing terms for an Enphase system. So I think we're in very, very good shape, but I can't quantify exactly what you're asking for.
Got you. All right. That's it for me. I'll pass it on. Thanks.
Thanks. Thank you.
And our next question is from Vishal Shah from Deutsche Bank. Vishal, please go ahead.
Hi. This is Jeremiah on the line for Vishal. Congrats on great results guys.
Thank you.
Maybe I just wanted
to touch again on the international side of things. It sounds like you're progressing well there. Would your focus going forward be more along the lines of expanding market share in the existing international markets or potentially expanding the TAM?
Both. Both. We are very focused on establishing the and growing the beachheads we currently have in the APAC region in Australia as well as in EMEA, which is both in the U. K. As well as France.
We're going to be expanding our market share in all the countries we're currently in, but we really just started our expansion into Continental Europe. There are many countries, significant countries that we're not in. So we're going to continue that geographic expansion as well. It's important to note that Continental Europe especially is a bit of a challenged environment right now. So you're going to see some ups and downs there.
However, we very firmly believe in the long term potential of that market. So we are going continue to invest and grow the infrastructure there, while we gain share, grow markets and then we can take advantage of the growth that we see coming in the next few years.
Okay. Thanks. And I guess sort of along the same lines, you guys have started to get involved more in commercial. Could you speak a bit to the opportunity there and kind of the time horizon?
I can speak to part of that. So we definitely see a very large opportunity for Enphase in the commercial market. We already have a very sizable market share in the small commercial market. We have not really entered the large commercial market yet. Although we do have some large commercial installations, those and even the small commercial installations are effectively being done with our residential product.
What we have said several times now is that we are well underway in the development of a purpose built commercial microinverter and not just the hardware itself, but the entire system to support the commercial market. We have not announced the timing of that yet, but initial discussions with potential installer partners as well as the progress we're making Molchanov
from Raymond James.
Please go ahead. Hi, Pavel. Molchanov from Raymond James. Please go ahead.
Thanks very much. I know that you're not breaking out revenue by product or by segment. But can you give us a sense of kind of what percentage of your mix currently is hardware versus software or the new O and M revenues?
So we don't break that out. And part of the reason we don't break that out is because we view it as a system that when you're buying an Enphase system, you're buying the hardware, you're buying the monitoring platform. And in many cases, for the installer, they're leveraging our monitoring platform for their O and M infrastructure, for billing, for a whole host of different reasons. So we don't separate the 2 right now. We view it as a single system.
And if you're referring to Enphase Energy Services, that is still very young and in development. And as that progresses, we'll provide more data on that.
Okay. And along the same lines, I know you've talked directionally in the past about potentially having some kind of additional revenue opportunity from selling analytics to utilities utilities that kind of thing big data. What's kind of the latest on that front?
So there's actually a lot of work going on there. Again, it's interesting to note that at 500 gigabytes of data every day, Enphase collects and manages more data on a daily basis than Twitter does. So we actually have a tremendous IP infrastructure to support the data collection and analytics as well as the data itself. And we are exploring multiple ways to leverage that data into new customers and new markets. Again, it's a bit too early to have that discussion, but I can say there's a lot of internal work going on to leverage this tremendous resource that we have.
Okay. So in other words, you haven't monetized it yet, but you hope to in the future?
Again, I would qualify that. I think that the data is being monetized every day through the microinverter itself. But if you're referring to the data only, that's exactly correct.
Okay. Appreciate it.
Sure.
Okay. Thank you. And our next question comes from Pierre Maccagno from Dougherty. Please go ahead.
Hi, Chris. Congratulations on the very good quarter.
Thank you.
Do you
have any comments on possible penetration into China?
So our first target in that region will very likely be Japan and we are still early in the exploration of that market itself. We're working through the technical issues. We're working through the go to market and partnership issues. We're feeling very confident, but we don't we're not ready to make any specific announcements there yet. We do not, as of now, have any direct plans to get into China.
Clearly over time that will be an important market for us. But in the foreseeable future, there's a lot of other low hanging fruit that we'll be going after first.
Okay. And then any comment on SolarCity? I understand they don't use microinverters. And can you expand on the possibility of this changing in the future? Or what are your thoughts there?
That sounds more like a question for SolarCity than it does for Enphase. What I can say is that we have the the majority of the largest, most successful, the fastest growing companies in the U. S. And in the world right now use Enphase microinverter systems. They use it because it generates more energy, because it simplifies the installation process, they can become more efficient.
And of course in all the O and M ease of doing business on the operations and maintenance side as well. So we're very, very comfortable with the growth in customers that we have, the breadth of customers that we have and candidly the quality of customers. When you look at what we're doing with very large vertically integrated installers that are just doing tremendously, it's very exciting. We have a 2 tier distribution strategy and our distribution partners are also doing very, very well. Interestingly, electrical distribution is really doing well.
It's really taking off and that's addressing the small to medium sized installers, which is growing also. So it's a very wide and broad market and we are, I think, executing quite well and being able to attract the best all these different segments.
Thanks. So and my last follow-up regarding touching again on the antidumping duties, have you gotten any type of feedback from customers applying any pricing pressure or these conversations I mean are they taking place at all or not?
Are you referring to pricing pressure with Enphase or with the modules?
For Enphase microinverters.
So we have pricing discussions with all of our customers every day. That's been going on for 7, 8 years now. So is there anything new happening there? No. The dynamics change year to year, quarter to quarter.
But the fact is that we have to continuously work to reduce our our costs. We recognize that as our responsibility. And if you look historically, we've been able to significantly reduce our prices somewhere in the neighborhood of 10% plus on a year over year basis. So we are we take that responsibility seriously and we are feel very good about our ability to maintain the pricing level that our customers are demanding.
So as of now, no, there's no effect of the antidumping duties then?
Again, I'm not sure how to answer that question. I think that there is very likely an effect. How big an effect that is probably questionable and how big of an effect that would have on overall demand is yet again different than how much of an effect that would have on Enphase. As far as we're concerned, as I mentioned earlier, I do think that prices going up is not good and could have an effect on demand. However, the industry is robust and strong and I think we can overcome this.
Okay. Thank you very much.
Thank you. Thank you,
sir. Our next question comes from Steve Baumann from Avastar Capital. Please go ahead.
Hi, guys. Thanks for taking the question. Chris, just a quick one. What's the diluted share count going to be next quarter? It looks like you guys are probably going to be even GAAP profitable?
Right. So the basic share count is more like 42,000,000 shares. If you add in the dilutive impact of equity instruments, which are out there, you're looking more to like 47,000,000 shares.
Great. That's it for me. Thanks very much.
Okay. And at the moment, that actually concludes our Q and A session for today. I'd like to turn it back to the host for any concluding remarks.
Okay. Thank you all for joining our call. All of us at Enphase are committed to developing successive generations of microinverter system, expanding our technology leadership position, growing our business in our core markets. All of us are looking forward to expanding into new geographies, new segments and exploring untapped market opportunities. Enphase is going to be exhibiting exciting new products at the Solar Power International Trade Show in Las Vegas on October 20 through 23 and we hope to see you there.