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 express written consent of SolarEdge is prohibited. You may listen to a webcast replay of this call by visiting the event calendar page of the SolarEdge Investor website. I would now like to turn the call over to 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 Q2 ended June 30, 2019, as well as the company's outlook for the Q3 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 Q2 ended June 30, 2019. Ronen will review the financial results for the Q2, followed by the company's outlook for the Q3 of 2019.
Then we will open the call up for questions. Please note that this call will include forward looking statements that involve risks and uncertainties that could cause actual results to differ materially from management's current expectations. We encourage you to review the Safe Harbor statements contained in our press release and the slides published today for a more complete description. All material contained in the webcast is the 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 measured 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 substitutes for or superior to financial measures prepared in accordance with U. S.
GAAP. Listeners who do not have a copy of the quarter ended 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 2nd quarter with very strong results. We are reporting record revenues for the quarter of $325,000,000 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 $307,000,000 We are presenting 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 separate from the results attribute to our recent acquisitions.
GAAP gross margin for this quarter 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 represents 48% of our solar revenues, which is an all time high, signifying our growing strength in this region. In our Q2, we shipped 1.3 gigawatt of AC nameplate inverters, approximately 430 megawatt of which was shipped to America. Commercial sales comprised 44 point 3% of our total megawatt chip this quarter.
Overall, we shipped 3,700,000 power optimizers and 160,000 inverters yet another quarter. Also worth noting is that when we ended Q1 this year, we announced that we had more than 1,000,000 solar system monitored in our portal. This quarter alone, an 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 matters. 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 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 States, despite the tariff increase on Made in China product, sales are on the rise and we have significant backlog for the 3rd and 4th quarter that is driving our very strong outlook. The production adjustments to accommodate these growing needs are substantial. This quarter alone, 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 expedite shipping cost in the 4th 4 coming 2 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 2 automated optimizer lines and 1 inverter line installed in the new site. We expect 1st mass production shipment in the Q3 of this year. We continue to increase our investment in R and D and related expenditures in order to further improve quality of existing product to introduce new products and to drive down product costs. Among our new product is our 3 phase residential on grid storage inverter to be used with 3rd party low voltage batteries. We expect mass production of this inverter to begin in the Q4 of this year.
At Inte Solar, we announced another new development underway. We introduced a single phase HU Wave inverter that integrates the management of an on grid solar storage and home energy management into 1 inverter. The combination of all of this function into 1 inverter will simplify installation, improve system ROI and increase self consumption. This new offering is scheduled for mass production during Q3 of this year. Also showcased at InteSolar 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 twenty twenty, while we continue to support storage compatibility with multiple battery vendors. The batteries will be able to either AC or DC coupled. As mentioned, when we purchased Kokam, technological innovation requires significant financial investment and years of dedication and hard work for skilled R and D engineers. The work is now well underway in Korea with plans for Kokam's new mass cell production factory. Our plant capacity for this factory is 1 to 1.8 gigawatt depending on cell type and blend.
The current estimation for the total investment requires is approximately $50,000,000 to $60,000,000 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 $49,000,000 We reported cash flow from operation of about $51,000,000 and total cash and investment net of debt of $352,000,000 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 technology, bringing new products and new offering to the solar market, while developing new products and new offerings for the other 3 business pillars, which are based on the 3 acquisitions that we completed. All of these while managing 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 Q2 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, one time asset disposal, change in deferred taxes, one time 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 standard and the adoption of the newly enacted leasing accounting standard as well as non GAAP open 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 form a to GAAP results discussed on this call is available on our website and in the press release issued today. For the Q2 of 2019, total revenues were $325,000,000 a 20% increase compared to $271,900,000 last quarter and a 43% increase compared to $227,100,000 for the same quarter last year.
Revenues from the sale of solar products were $306,700,000 and were driven by strong growth in all regions. Revenues from Europe reached a whole time high and represented 48% of our solar revenues reflecting strong growth mainly in the Netherlands, Germany, Sweden and Poland. U. S. Solar revenues also increased this quarter to $124,700,000 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 2 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 $18,300,000 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 a 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 products. In addition, expenses related to our warranty accrual represented a lower percentage of revenue as we continue to decrease the per unit cost of our replaced units and improve our logistic processes.
Although U. S. Tariff increase were entirely taken on by our customers, the net arithmetic effect on the U. S. 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 margins negatively impacted this number.
Looking at gross margins for the next quarters. 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 this 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 are 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 2 50 basis points for Q3. To this, we will also add the arithmetic effect of increasing tariffs on Chinese made products that will once again impact our Q3 margins, 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 2nd quarter, which included a full quarter of SMRE, were $65,300,000 or 20.1 percent of revenues, compared to $58,100,000 or 21.4 percent of revenues in the prior quarter and to 41.3% or 18.2 percent of revenues for the same quarter last year. On a non GAAP basis, operating expenses for the Q2 were $54,900,000 or 16.9 percent of revenues compared to $48,000,000 or 17.7 percent of revenues in the prior quarter and $35,100,000 or 15.5 percent of revenues for the same quarter last year, which did not include any of the acquired businesses. Of these non GAAP increase in operating expenses, dollars 5,100,000 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 achieve as our solar revenues grow.
The remaining increase in non GAAP operating expenses of $1,800,000 is mainly derived from the addition of operating expenses of SMRE for a full quarter, which we did not fully encounter in Q1 and our continued investment in R and D and investments in developing our new businesses. The bottom line result is that our GAAP operating income for the quarter was $45,400,000 compared 4 $61,000,000 compared to $41,200,000 in the previous quarter $47,800,000 for the same period last year. Financial income for the quarter was $800,000 compared to financial expense of $6,200,000 in the previous quarter and a financial expense of $2,500,000 for the same period last year. This quarter, we had a tax expense of $13,200,000 compared to $3,900,000 in the prior quarter $3,600,000 for the same period last year. Our non GAAP tax expenses were $14,200,000 compared to $4,900,000 in the previous quarter $5,300,000 for the same period last year.
This 22% tax rate, which is 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 2nd quarter was $33,100,000 compared to GAAP net income of $19,000,000 for the previous quarter $34,600,000 for the same quarter last year. Non GAAP net income was a record $49,300,000 compared to a non GAAP net income of $32,900,000 in the previous quarter $40,600,000 for the same quarter last year. The non solar activities resulted in a $5,600,000 non GAAP net loss this quarter compared to a net loss of $2,800,000 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 Q2 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 $373,600,000 compared to $398,700,000 on March 31, 2019. During the Q2, we generated $50,800,000 in cash from operation.
Actual cash paid in the Q2 for the purchase of remaining SMRE shares was $64,700,000 In addition, our balance sheet includes net debt of $22,000,000 related to loans taken by Kokam and SMRE prior to the acquisition. We repaid some of SMRE debt this quarter and are expecting to continue and 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 $237,800,000 compared to $187,500,000 last year 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 $148,900,000 compared to $150,800,000 in the prior quarter. Approximately $42,000,000 of this amount relates to non solar inventory, the majority of which is raw materials held by Kokam. Moving now to guidance for the Q3 of 2019. We expect revenues to be within the range of $395,000,000 to $410,000,000 Revenues from the sale of solar products are expected to be within the range of $375,000,000 $390,000,000 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? Thank 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 pull in from the Safe Harbor for the tax credits?
So in general, we do not provide breakdown 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 a 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.
Got that. And just maybe on Q2 and probably on 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 1 quarter what are the market share gains or losses. You can simply derive what we're shipping into the market itself, but not what is really installed there.
Got it. That's helpful. And just one last question. Could you just talk about the drivers for the gross margin beat versus the guidance in Q2? And I'll jump back in the queue.
Thanks.
Yes, 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 quarters due to some efficiencies that we see on the per unit costs that we have for each and every shipment 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.
Thanks so much, guys. And congrats on the strong performance. Just looking at Kokam and the CapEx number that you guys walked us through, could you talk us through what the delta is between the $50,000,000 $70,000,000 and where you'll end up from a capacity standpoint with that spend?
So the total cost for the new factory will be $50,000,000 to $60,000,000 before the possible expansion. The total capacity is to 1.8. The main reason we currently planning the factory to produce all the current available sales with the new sales we need for our product 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 to 1.8, but it's a bit too far away to estimate the needed sales for the expected sales.
Okay. 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, 6 quarters? It seems like there's a little bit more there than we'd expected.
I love to understand kind of what that roadmap looks like for you guys right now?
So I think that it's pretty clear. The first, we have 3 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 batteries. So that's why we are developing this first product first, but no one has 3 phase inverters specifically 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 2 to 6 and probably more quarters. In 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 the beginning of 2020 as well. What I didn't mention and we'll give more details in the coming two calls is that we are developing a full range of much larger commercial 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 product, which is a combination of improving the quality. While I think we solved all the major or it weren't major, but all the problems that we suffered from like 2, 3 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 and D, improve the existing products and reduce their costs.
Okay. Thanks so much guys.
Thank you. We'll take our next question from Philip Shen of Roth Capital Partners.
Hi, guys. Congrats on the strong results. I'd like to talk about a more general question about demand. I was wondering if you think through all your shipment mix and your megawatts in 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? Thanks.
As far as I know and correct me if I'm wrong, there is no geography today where the subsidy is really influences. 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 2nd 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 haven't been done yet.
Okay. But it sounds like demand is very strong in the back half, so that's great. In terms of thank you, Guy. 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 1 or 2 years in a meaningful way?
Yes. We're working on, I think, unique, brilliant solution. I would expect that we will be able to put first alphas of this solution sometime by the end of 2020 and to offer it in 2021. But since it's really innovative development with lots of really core topologies and core concepts, Antti will 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 4.30 megawatts or 440, sorry. Can you talk about how many megawatts you shipped to the European market in Q2?
Well, Nayan?
Yes. I'll pull it and give it in the after call. Okay? Okay. Great.
Congrats again and thanks to both of you. I'll pass it on.
Thank you. We'll take our next question from Jeff Osborne of Cowen and Company.
Yes. Congratulations guys on the results. A couple of quick ones here. Ronen, you mentioned that the expedite fees would be in place through, I believe, Q2 of 2020. 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 that 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 6 weeks that usually products are on sea when you send it using marine shipment instead of air shipments 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 shipping excess capacity that we manufacture compared to demand using ocean freight and then the ocean freight will displace the air shipments.
Got it. That's helpful. And then you mentioned in response to a prior questioner's question about safe harboring and not seeing any in the Q3 period. Can you just share with us any broad strokes around conversations for Q4 or Q1 delivery? 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 regulations. I can tell you that there are discussions that are taking place. All of them are also discussed in the, I would 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.
Got it. My last question is just can you remind us as you formulate your guidance, here we are 5 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.
All right.
Good to hear. Thank 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 remarks, in all of the last calls, people were asking us about the market share of us against the other MLP company. This time, it haven't been asked, 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 Gruintech 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, per Drintech Media again, the other MLP company market share shrunk from 20 3.1 in Q1 2018 to 17.1 in Q1 2019. As you may know, the other MLP company acquired the microinverter business of SunPower on August 2018. And since this quarter, they also include the sales of SunPower.
Even when combining or into taking into the share of the other MLP company, the SunPower microinverter 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 as these are affected by customer inventory. I hope this will give you the motivation to get into the numbers of market share from Green Tech Media rather from the shipment numbers that companies reported on themselves. And now I will go to my summary. In summary, our 2nd 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 offering in the solar 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.