Thanks, everyone, for joining us today. I want to introduce Zvi Alon, CEO of Tigo. And to spend our time today, maybe I want to kind of open up the floor to you to share a little bit about Tigo, where you are today, and then kind of how you think about 2025. That'd be great.
I'm in New York, I think. I'm just joking anyhow. So Tigo is in the business of designing and selling products in supporting the solar installations globally. We service predominantly three different components within the energy generation. One is in the general family of MLPE, Module-Level Power Electronics, which is a piece of electronics, hardware, and software that resides in the back side of the PV module. And it performs three different functions: monitoring to get information about how the panel is behaving. The second one is rapid shutdown, which is required by law in pretty much any rooftop, specifically in the U.S. and growing number of countries all over the world. And the last component is optimization, which is increasing the energy production by any PV module. It's a little secret. When people look at solar installations, they all see the PV modules with the recognized.
They're all connected in series, and they're behaving as good as the weakest one in the link. So Tigo has uniquely patented technology, which, regardless of the production of any one specific panel, will maximize the energy generated by the PV modules. So that's product number one. The second product line we have is storage solutions for residential market, predominantly. And the last component is a software component, which is addressing two main issues. One is reduction on O&M cost, essentially fleet management and things like that for customers who have multiple sites. And the last piece of the software component is the ability to predict consumption and production of energy requirements or supply. And obviously, that's what allows our customers to either make money or lose money if they don't produce enough to be able to sell or vice- versa.
They produce too much and there aren't too many buyers. It's an AI-based solution. We launched it about a year, slightly over a year ago, and we focused on the market in Israel, specifically. Originally, we ventured into Europe and the U.S. earlier this year, and I'm happy to share that we have about 80% or 90% market share in Israel right now with that software. That's Tigo. Oh, we have installations in seven continents, and we serve with the same identical product in an open system, all market segments, residential, commercial, and utility. We announced a few months back that we won, and it's actually being installed as we speak. What we believe is the largest installation in the world with MLPE in Spain, 142 MW. We also announced recently that we won a floating system in Brazil with 97,000 units, which is also huge.
We're servicing all market segments.
Sweet. Thank you for that. So maybe could you maybe talk a little bit about the competitive landscape? It seems like probably SolarEdge would be a competitor, maybe. And tell us more, where do you kind of come across them? Do you come across, I'm guessing, C&I and Resi? And then who else do you think are the competitors in your space? And how does Tigo's technology differentiate versus theirs?
The different solutions in the MLPE space are divided into two main groups. There is the Enphase camp with a microinverter, which is a higher cost, higher priced product and positioned to support very well the residential market, predominantly the smaller installations, the eight, nine kW and below. It's doing it very well because price is less of an issue. If you go to systems which are larger, they use string inverters, which is the SolarEdge architecture and Tigo architecture. SolarEdge is a closed system. You have to buy all components for them for the system to work. Whereas in our case, we're an open system where we work with any inverter. We have actually thousands of inverters from many suppliers who work with our optimizers or rapid shutdown devices.
Also, another differentiator, and then we'll get into the more specific market segments, is that Enphase does not play really in the C&I space or in the utility space at all. The penetration in the C&I is very small. SolarEdge, on the other hand, does play in the other two markets, but it's different products, different solutions which are not even compatible with each other. Big differentiator with us, where it's the same MLPE unit. You can take an MLPE unit that was installed on your house and go to the largest utility system, install it there, it would work identical, regardless of the inverter on your house or the inverter on that other side. So we compete in being an open system solution as opposed to a closed system solution. We sell it to pretty much all other suppliers.
We compete with the fact that it's the same identical product that services all markets. So you don't need to have an inventory of product A versus B versus C. We compete on the fact that we are the highest efficiency. We are at 97.6%, 99.7%, I'm sorry, percent efficiency with 0.2 failure rate, highest quality in the market. Nobody can compete with us in that space. And we produce the maximum energy for the customers. We also have a fairly strong monitoring system that is a big differentiator. So from a competitive positioning perspective, we are priced competitively with the SolarEdge solution. We are priced very competitively with the Enphase solution. And we don't see them competing in the higher level systems. Like that system is an example that I just mentioned, the 142-MW in Spain. SolarEdge was not competing on that system.
It's not like they cannot, but it would not be efficient implementation, so those are the main differentiators. There are some other suppliers. Some of them are Chinese and in closed systems. To name a couple is Huawei as an example, which is not selling in the U.S., but we see them outside and Sungrow. I can tell you that with those two companies, their product is a closed system product and works only in a segment of their business, not all, and we work with all the other segments within the same those two same names. So our market is really much more broad in that perspective.
When you just going back to the 142-MW project, when you were bidding for that, who did you kind of come across in terms of if it's not SolarEdge, if it's not these guys?
There were a couple of Chinese suppliers with a rapid shutdown device that we competed with. We won the project despite the fact we were priced higher than them based on quality of the product, the experience which we have in the market. We have installations all over the world with those guys, and they didn't have as much yet or proof that they can work with large systems. So those were the main differentiators. It was not price.
Got it. Got it. And then maybe talking about the different markets, I know that you guys are pretty much kind of all over the world and are targeting newer markets. But maybe if we can talk about some of the legacy European markets, Germany, Netherlands, Italy, I know you guys have some presence there as well. Maybe can you talk about how that's shaping up?
Sure. First of all, about us, as I mentioned, our product segment agnostic. So we service all three markets, and by geography, we're servicing different markets as well. Like in the U.S., most of our market is in the C&I space, not as much as in the residential. In Europe, we are stronger in the residential and less so in the C&I. In Asia-Pacific, the majority of our market is C&I and utility scale. So it really depends on the market, specifically what's happening in the market. Last year, 2023, was bad for everyone in the market. We hit a wall in the middle of the year. Pretty much everyone, all suppliers. The market didn't behave very well. There was an oversupply, overstocking for everyone, and we knew it was going to take some time for it to clear up.
We came out back in August of last year, and we shared that based on the analysis we did on the number of installs which we see, if it continues the same way, we see a recovery for ourselves, for Tigo, in sometimes late Q1 2024 or early Q2 2024. And we have been consistent. And despite the fact that Q4 was for us very disastrous, like many others, we since then have demonstrated growth quarter- over- quarter. And to the point that even our cash consumption came down substantially. We used only about $700,000 cash last quarter. So we improved it substantially. As far as the markets themselves, markets are very challenging right now. And it depends by which geography. The U.S. this year, residential is impacted and not going to be growing anytime soon for the rest of this couple of weeks we have left.
The projections we believe are more positive for 2025. We believe that we started to see a better momentum coming up. I will support what pretty much is being stated out by many analysts that maybe next year it's going to be 5%-15% growth as opposed to 2024, approximately. Europe, again, it depends by which country. Netherlands, very bad. I don't see a recovery anytime soon. It's really very challenging. Germany, on the other hand, we believe is sort of flattish to maybe an increase. We are doing, by the way, very well in Germany. We're grabbing market share, not so well in Netherlands. Italy, we believe, hit the bottom, and it's going to be more positive next year. And we're starting to see some good signs already. U.K. is doing well, growing nicely. It really depends on which country.
If you go to Asia-Pacific, again, Australia is keeping up nicely. Malaysia, Vietnam, all the other countries are actually growing very fast. And so it really, you need to be segmented as you go through and serve a global market.
Fair enough. So for Tigo, how do you think about, like you said, Europe, Netherlands is slow, U.S. 5%-15%, and Asia is also strong. But so do you think your revenue mix kind of shifting in 2022? Or maybe if you can tell us what it is today and then how do you see that shifting in 2024?
So last year, Europe was about 70%, approximately, give or take. This year, I think it's going to probably be more 60% plus as opposed to 70%. And obviously, this year is more challenging than last year. We believe that Europe has a chance to grow faster next year to above the 60+ % that we are doing this year. And similarly, the U.S. stands a chance to grow as well for us the way we see it right now.
Perfect. And then maybe kind of touching on Europe and then we can kind of talk about the U.S. a little bit. What's been your conversations in terms of the inventory levels, the channel, the inventory levels that it seems like, at least from what we're hearing, still stuffed, still difficult? Again, it depends, region by region, or country by country, but if you could kind of help us there.
I am very happy to share. We do not have an inventory problem in the channel. Do not. The majority, if not all, of our orders we've received in the last two plus quarters have been to replenish inventory that they didn't have. They need products. So Tigo, hardly has any inventory problem left, and majority of it was in Europe, was not in the U.S. or in any other places, so like everyone else, we got really hammered in Europe in the second part of 2023, but this year, we see continuously growing demand. And most of it is for shipments within a quarter to maybe four months or so. So it's fairly short-term type stuff. I know that other suppliers still have a major inventory issue in the channel, but for us, we don't see any more pressure from the market.
I would also share that we, I believe, are probably the only supplier who did not reduce prices. We did not compete on price at all during this whole period. Not to say we didn't have situations where we were tempted to or we were being challenged, but we opted not to change our pricing. So far, it's holding up and paying, and we are growing nicely, not at the same rate, but growing nicely quarter- to- quarter with the maintained price we've had now for several years, by the way.
Got it. So then how do you think about maybe pricing going in 2025? Obviously, we have heard, again, European is kind of cutting pricing, Chinese is cutting pricing. How do you kind of see that shaking out next year?
The majority of the impact from the situation, the market, and the Chinese flooding was on the battery component, not on the MLPE at all, and less on the inverter. The biggest component that was impacted was the battery by far, and it went down like, I don't know, 70%. It has been crazy, but what we see right now is some stabilization on the lower level of the price per kWh , so it's fairly stable right now. Not to say there will not be any small adjustments, but it would not be as severe as what we've seen in the last year, and so it will be a little bit more predictable. Now, I would also say that there is a competing element to that, which is the number of new Chinese suppliers in the inverter space and battery is so huge and growing.
I don't know what would be the impact because I don't believe the market can take so many. There's just too many. And we get early indication to that phenomena because I would say majority of them certify their product to work with us. So we get exposure to who's coming and deploying new names months before they show up in the market. And so I can tell you that the number of certification processes we're going through is at all-time high right now. It's a record high. And I don't know how it's going to behave in the market. Not all of them will survive. But there is also, we don't hear much about it, but we know that there are not a large number, a small number of suppliers, inverter suppliers who are on the brink of closing down because of their internal competition.
But you are seeing more players kind of come in. And do you know regionally where you're seeing that in Europe?
Look, the flip side of the suppliers, because they're having challenges to get into the market and challenges in supporting the market. So many of them opt to use a private label approach in Europe. And so we see many local private labels of inverters we know where it's coming from. And I don't know that that's a sustainable process for a long time. Maybe it's just temporary.
Got it. Got it. That's helpful. And then maybe pivoting a little bit to the U.S. in terms of, I guess, pricing, how do you see that shaking out here? And I think you've talked about being more not necessarily Resi exposed, but if you can just kind of talk more about that.
Pricing in the U.S., I guess, I don't know if it will be a major factor more than domestic content. So I think that that will pretty much drive more of the adoption of new suppliers, those who would be able to fall within the category of domestic content, ROI and others. But I believe that even Tesla is sending messages to the market that the discounted version is going to be lapsing before year-end. Those are the messages we get. So prices are going to start coming back to some more normal, I guess, post the pressure we had.
Got it. And I'm guessing domestic content is not a big part of your conversations in the U.S.
No. No. Our contribution on the MLP is fairly small. So it's a non-issue. And besides, following the first Trump administration, when the duty was imposed, we started developing up, moving out of China, and we started doing CM and contract manufacturing in Thailand. Majority of manufacturing is coming from Thailand. It's not exposed to the duty. So it's a non-issue for us. Whatever happens with China, it will be transparent to us. We don't care.
Fair enough. That's helpful. I do want to stop here for a moment and maybe open up the floor to see if anybody has any questions, please.
Just two questions. One is if you're coming from distribution channel administration here in the U.S., what is the kind of resistance points do you get from distributors in general, if any? And then second, related to this European market, you mentioned actually that so you cater more to the larger systems, like more than eight kW. So fundamentally, why in Europe, given that actually they have smaller systems for Resi, why Resi is more popular than C&I?
Okay. On the distribution in the U.S., the only pushback we got really was related to the number of weeks' delivery, but not much more than that, because it fluctuated over the last year, as you know. And initially, we were able to supply sooner, and they got used to it. And as the market is improving, then we get back to normalcy. And so there is some pushback and some unrest. But in general, I can tell you the behavior is going back to some normal in the U.S. as well. So not too much pressure. Now, you asked the second question on the eight kW comment I made and the pricing. If you look at microinverter adoptions in Europe, the majority started in France, which is a microinverter country. Enphase is doing very well there. And most of them are smaller systems, the majority.
And it's very hard to penetrate with string inverters to that market for everyone. So I mean, everyone. We do have a market segment, but it's fairly small in France. You go to Germany, most of the systems are three-phase and larger, 10 kW and above, okay? Majority. And as a matter of fact, with heat pumps and EVs and whatever, it's actually growing even beyond. We're starting to see a drive to the 15 kW three-phase and 20 kW for residential, which is really going in the reverse direction of France. So it really depends in which country, and you need to really decipher it by itself to decide where do you tackle and put your resources to expand your market or not, okay? Yes.
Can you elaborate on the question around Tesla? Why do you think that the discounting that they. Thank you. Just the question is on Tesla, if you can elaborate why you think the discounting there is no longer sustainable, and you also gave it a timeline year-end. Thank you.
We just got exposed to various communications that were sent out addressing the issue of discounts for the rest of this year. As a matter of fact, it was dated. And so I'm referencing what we have seen that was sent out. Because Tesla, when they came out to the market, they priced their product very aggressively. The market reacted. And as it's a very well-known fact, they had some supply issues. It's hard to get their products, which is good for them or bad. It depends how you look at it. And so based on the latest comments we've seen, it looks like this heavily discounted or priced very aggressively is coming to an end. That's what we see. It's not any official statement. It's just papers we've seen, electronic papers, I guess.
Maybe, I guess, since you're on that topic, could you talk a little bit about just market share? I think in your last earnings call, you've talked about getting repeat orders, right, from customers. How about new orders from customers? I guess that could be an indicator of market share. If you can, I'll shed some light there.
In Europe, and specifically Germany, we talked about Germany. We know that the top three distributors in Germany are sharing with us information that we became the largest component sales percentage-wise that they have in their portfolio. So it was obviously taken from someone because we were not there before. We also know by outside sources that the number of units we all announce we ship every quarter is indicating that we are growing market share compared to others. The latest one from Wood Mackenzie, I believe, demonstrated that we are up to 12% or 13% or something like that, which is very nice for us.
Yeah. Yeah. No, that's fair. That's fair. Then I know that also you've kind of talked about expanding to kind of newer markets. Where do you see the opportunity going from here?
So in Europe, we're doing well. It has been our largest market share globally, our largest market globally. And we will continue to expand inside Europe, obviously, to seize the opportunity to grab market share from others. We are investing heavily in Asia-Pacific and in Brazil specifically. And the latest announcement, which we shared, the 97,000-unit floating system in Brazil, was the result of an effort that took quite some time. And we believe there is much more behind. And also, Brazil just adopted the rapid shutdown three months ago as mandatory in three states. And it's going to propagate all over in Brazil. So the rest of Brazil will adopt it, we believe, within the next year, which will drive more of the MLPE sales in Brazil. So we are investing there. We are also investing in Asia-Pacific, specifically Vietnam, Malaysia, Singapore.
They all adopted rapid shutdown in the last year, year and a half. We see a major increase in deployment there. The Philippines did it about two years ago. We are the single largest supplier of devices into the Philippines. It has been growing nice. Now it's sort of plateauing to a fixed rate, which is good.
Got it. I know you've kind of touched on the rapid shutdown a little bit. Maybe how does that competitive mode change? Are you seeing, or maybe is that some form of patent protection you have there, or if you can just kind of shed some light there?
We do have patent protection. And we do collect IP licensing from a number of competitors, which we're happy they're paying us, obviously. We are happier to beat them, but in any event, at least we're collecting some fees. We've collected millions of dollars over the last few years in licensing. And I want to say something else, which is also critical to understand us. Traditionally, over the last several years, I mean, seven, eight, 10 years, we have been introducing the optimizer specifically, but not only, at the highest power rating in the market. We are number one in the market, have been since 10 years ago. And we are ahead of the market. We just introduced a few months ago the TS4-X family of products, which are rated at 800 W.
There is no single PV module in the world that does 800 W and 25 amps, which is the next generation PV modules, high powered, high current, and they are predominantly aimed at large C&I and utility scale projects, supporting bifacial in pretty much any PV module in the world. We are the only ones in that space, and we have been traditionally doing so, and as a first product introduction, I am happy to share that it had been adopted very quickly. We were surprised by the number of units we have received orders for, which is also an indication as to where the market is going for the higher powered PV modules, higher currents, so you can get more energy from a square meter, whatever, high efficiency, and we are ahead of everyone else, and we have been so.
Prior to the TS4-X family, the current shipping product has been rated at 700 W. And we have been shipping it now for three and a half, four years, probably two years before the 700 W panels. They are still today, they are not available. You can get about 600 W, 620 W, but not much more than that. So we are ahead of the market. And that's open system. And being ahead of the market with the specification is really the key drivers for us.
Got it. That's helpful. Maybe, I guess, jumping on it a little bit, going back to the U.S., the C&I space, Enphase has kind of talked about tapping into that market, introducing some new product lines to kind of break in there. Are you hearing anything on that front, or are you seeing anything, or what are your expectations there in terms of having conversations with customers?
If I understand well what they're claiming and saying, I do listen to them, is that they will be using a similar type of an architecture to go after the C&I market, and I think that price-wise, it might be a challenge for them, but I wish them success, but I don't know. I'm just saying that if it's the same product with the same price range, it will be a challenge. Yeah.
Okay. That's good. I want to see if there are any other questions from the audience. Please.
Do you see any facts or risk that is dumping tariffs on the manufacturer in the U.S. or in general for your price of the product?
As I mentioned, on the MLPE side, hardly any impact. We don't manufacture in China. Of what we ship here to the U.S., not a problem at all. On domestic content, it's a small component of the system. So it doesn't have much of an impact yet. We'll see if it will change. On the other hand, on the inverter and the storage, like many others, we take actions to make sure we're not exposed to it. And so we will not be negatively impacted. So we can continue to play here in the U.S. I will share something else, which is an interesting phenomenon that we started seeing in the last two, three months. Lithuania adopted rules that you cannot install systems which are being monitored by Chinese manufacturers.
And it became law, which obviously is impacting the supply to Lithuania and systems installed in Lithuania and how it's going to get propagated. We believe that we will start seeing similar effects in other places because energy, needless to say, is a critical resource. And you want to make sure you have control of that critical resource, even though it's distributed. And so we don't know what the impact is going to be there. And similarly, what will be the impact here in the U.S. if similar restrictions are going to start being applied? It's understood why, but it's not yet.
Thanks. That's helpful. I know we're close to time. So maybe I'll just ask one last question. Is there any kind of last remarks, thoughts on, as we enter 2025 in the Resi space and in the C&I space, kind of what you see out there and also utility, I guess?
Look, as I've indicated, I do believe that 2025 is going to be better than 2024, not just for the Resi, but the Resi, C&I, and utility. All market segments will be doing better, and I think that that's the market in general. For us specifically, is to continue and make sure that we make the right moves to increase our market share as some of our competitors are having difficulties recovering from this major change that happened, and so to the extent that it takes them another one, two, three quarters to recover, for us, it's an opportunity to grab market share, but the market is going to be a bit more positive for everyone. It only depends what's the overhang that they have, and I don't want to make any comments about any other suppliers, but some have a bigger problem than others. We don't.
We've cleaned it all.
Awesome. Thank you so much, Zvi, for your time. Really appreciate it.
Most welcome. Thank you very much.