Demand Outlook and Guidance
Q: How is demand expected to trend, and what is your guidance?
A: In Q1, our sell-through demand was $376 million, with reported revenue of $263.3 million. " We under-shipped by $113 million to reduce channel inventory. " For Q2, we're guiding revenue of $290 million to $330 million, with estimated sell-through of $400 million, implying an under-shipment of $90 million. " We expect sell-through to continuously increase in the second half due to improving markets in Europe and the U.S., and new product introductions. "

Gross Margin Outlook
Q: Why is gross margin guidance lower for Q2?
A: We guided non-GAAP gross margins of 39% to 42% for Q2 without the IRA credit, slightly lower due to an increased mix of battery products. " As our battery to microinverter ratio increases, initial battery margins are lower, but we're improving margins through cost reductions, U.S. manufacturing for tax credits, and new integrated architectures. "

Battery Business Performance
Q: How is your battery business performing?
A: Our battery sell-through in Q1 was 128 megawatt-hours, only 8% down from Q4's 140 megawatt-hours, outperforming seasonal trends. " We guided Q2 battery shipments of 100 to 120 megawatt-hours. " The battery channel is lean, and we expect continued growth as every market transitions to solar plus storage. "

Market Share Gains
Q: Are you gaining market share in the U.S. residential market?
A: We believe we're gaining market share due to our strong relationships with installers, providing value-added services like proposal tools, permitting, and training. " Installers switching to us ramp up over time, and we expect these gains to reflect in future sell-through increases. "

California Market and NEM 3.0
Q: How is NEM 3.0 affecting your business in California?
A: California was a wildcard in Q1, with sell-through down 30%, but we're increasingly confident. " Load shifting is significant, with 50% of NEM 3.0 systems attaching our battery. " Our upcoming meter collar product will simplify installations, piloting by year-end. "

New Product Development (IQ9)
Q: Can you provide an update on IQ9 development?
A: IQ9 will come in 427W and 548W versions, using gallium nitride technology for higher power and efficiency with a smaller form factor. " Pilots start later this year, with commercial release in first half of 2025. " Ramp-up to full production typically takes 4 to 6 quarters. "

Inventory Management Improvements
Q: How are you improving channel visibility to prevent inventory issues?
A: We're implementing metrics across the sales process using tools like Solargraf, tracking leads through activations. " Regular reviews and statistical controls help us balance sell-in and sell-through, avoiding over-shipment. "

Capital Allocation and Share Repurchases
Q: What's your approach to share repurchases and cash allocation?
A: In Q1, we spent about $100 million on share repurchases and anti-dilution measures. " We plan to continue repurchasing shares as long as the stock remains attractive. "

Competitive Landscape and Pricing Strategy
Q: How do you compete with products like Tesla's Powerwall 3 on pricing?
A: We focus on the value we offer, including safety, reliability, and superior technology. " With our fourth-generation battery, we'll continue to reduce costs and improve margins, adjusting pricing if needed to provide more value compared to competitors. "

European Market Growth
Q: What drives demand in Europe, particularly in Germany?
A: Self-consumption is key due to feed-in tariff inversion, where buying electricity costs more than selling excess. " VPP programs and home energy management systems enhance ROI, with opportunities expanding as EVs become bidirectional assets. "

SunPower Relationship
Q: Any updates on your exclusivity arrangement with SunPower?
A: Our relationship with SunPower remains strong; it's business as usual. " We are in discussions and will update when there's a signed contract. "

Sourcing of Gallium Nitride Components
Q: Are you concerned about sourcing gallium nitride components?
A: We have reliable sources for gallium nitride transistors from existing suppliers and are not worried about sourcing issues. "

Installer Capacity in California
Q: Can installers in California handle growth if demand returns?
A: Yes, installers are savvy and nimble, managing lean operations and adapting with financing options like leases and PPAs. " We're confident they can respond to increased demand. "