Generac (GNRC) 2 Nov 222022 Q3 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Generac Third Quarter 2022 Earnings Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question and answer session. [Operator Instructions] Please be advised that today's conference is being recorded. to conference like speaker to now Mr. today, would hand over the your I Vice Development President, Senior Harris, Mike Corporate and Relations. Investor ahead. go Please

Good Officer; everyone our I'd to is Aaron morning. morning, XXXX and today Ragen, and call. Chief Chief President earnings Officer. Executive With third me like York joining for quarter thank Jagdfeld, us and this to welcome Financial

from and made as today and begin commenting on contain provided identify see statements to our differ our other such associated risk Certain statements uncertainties words for well as call materially Please or may actual by to Generac release during will involve by of statements. filings presentation We and statements. SEC the this forward-looking that employees could time earnings a or time information factors. cause that forward-looking from expressions results risks its list statements these forward-looking or

to measures will we non-GAAP during certain addition, call. today's make In reference

measures comparable these regarding will the information Additional Aaron. SEC call filings. over release now GAAP measures, in I turn to reconciliation to our earnings and U.S. is including available

Mike. Thanks, and morning, joining you Good us today. for everyone, thank

European increased generators, sales clean products net relative energy year product product were XX% sales acquisitions, Momentum partially prior to strength weaker of with the the from C&I third Year-over-year, in by October of X% than prior expected across acquisitions all the of product storage was and XX%, offset energy on results commercial led primarily residential channels XX. in driven and led recent increased which acquisitions. overall the sales of strong. residential remains the and generators during Our shipments foreign grew we the home growing quarter home and and region, announced to the from preliminary the compared with The quarter line standby driven the Overall in currency. growth $X.XX lower shipments sales impact systems. recent PWRcell industrial by standby quarter lower sales of impact product by expectations. billion, sales contribution domestically, category our still core growth in by while excludes XX% by

Now consultations rate at in last drove prior long-term the power occurred results the the the the lower total above of the quarter U.S. detail, Hurricane year. sales mid-teens outage a well in were year, third discussing quarter which home in remained grew over leads activity generator to which quarter and Baseline standby baseline Hurricane our prior in when more activity quarter during Ian, average Ida. Home power the the or week the included long-term outage sales average. above compared

year-over-year quarter to tied began the we the return XXXX for and tracking any second we the growth from quarter Ian. month of XXXX experienced However, in for was October resulting to given the third since in total metrics Hurricane highest of

installs, We our experience XXX increase continue dealer our with the which quarter compared to to sequential a third to are nearly quarter dealer net distribution network as for we dealers grow base prior of and focus Activations, continued on year. the expanding in a sequentially. approximately X,XXX proxy ended partners, residential the growth in

an to However, home our ability in and continues for the production shortages capacity constrained was growth in constrained our for lead to dealer lagged by materials preliminary Furthermore, labor production quarters by to availability, power permitting installation. as in fully complete certain in generators in homeowners installing output. times. needed our announcement, utility-related delays, be from mentioned we standby of prior extended our The base demand contractors installation backup service

strength despite orders from inventory end-customer field our channel in of the continued resulted this and All elevated in expected partners, of demand. levels lower-than

providing increase challenges, training these Importantly, home contractors. additional to resources specific existing to for number help and a locally labor expand forces such initiatives installation working as their on activation of to non-dealer dealers bandwidth are we address standby to installation

quotation projects streamline by permitting Other working dealer from scheduling home the and and within efficiency-related packages to processes sales channel that funnel top optimize dealers are local creating initiatives We sales favor generators. have to and in replicating leads enhance universal the include certain the utilities. refinement to in standby capacity simplifying past approval more of install those to dealer allocation successes the

in and intensified also quarter. dealer have expect expand of count we sequential Importantly, further strong we overall to growth our the quarter another efforts fourth

count have we of have as ramped in times, output recently production which initiatives home quarters. benefited lead growth production standby from generators our our to mostly dealer levels prior Our now normal shorter returned

In-home orders constraints third capacity that in is installation fundamentals important declined the meaningfully category standby consultations by improved underlying contract Although still Dealer measured by to demand quarter. productivity, time that quarter. per a meaningfully per it second home improvements grew, the close partners, key day market third the quarter. rates from have and and reiterate strong time signing installation lower channel continue resulted compared sequential dealer during of our of as an all during and activations high to elevated remains supported between rebound dealer-related the in while to metrics number as to the

need is and the contract dealer close end-customer gap of pace suggests all addition, survey further allocated approximately strong In highlighting the the to installation demand our half customer the data an to inventory between to increase of installs capacity. field active

sequential events, the in we growth inventory evidence expect as progress we and our While the their decline Even to mentioned channel backlogs a basis level demand. half of the persist through sales are second that major the levels a first on of modest through elevated previously and standby maintain in order we significant higher of no year first year-over-year beginning and new of normalize. make half inventory, working only partners headwinds sequential expect the field in from sales baseline home XXXX, when to a XXXX, improvements field assuming provide as half outage

products, and both years has weather-related the past baseline the underpinned events to can was in critical over infrastructure past key power ageing as polar through higher levels been major as which be having tripled the growth power home and several years since period quarters comes hurricanes, driven as home reach flatter experienced years, category two for in has such the by rate tied helping vortexes. rapidly time increased several comparing XX% last increase demand become vulnerable ice have outages has power the in a step category penetration to struggled increasing businesses. as market This successive can the our from and to activations XX just grid reliably growth the several XX standby last and category around top annual generators more standby a an a rates pattern increased decades normalizes. in over to XXXX nation’s distribution by The of in that supply outage notable the dealer than impact expanded With underinvested followed The events over The alone. the to heat increase have has homeowners growth four evidenced the events product the count be outage years grid X,XXX. new the of occurred increased by period each approximate latest of the grown for these demand. high three day as nearly periods XXXX growth outage activity awareness number to in electrical steps at more major and the power category waves, first storms Over of in more with severity of function that of time and XXXX comparable per growth doubled, of X,XXX home by than compounded metrics consultations mid-teens

will scrambling next increasing utilities of the megatrends as and category. leaving rectify several Grid in has concerns done avoid new this operators years have supply causing widening over growth Additionally, decarbonization gap drive emerged resiliency we we demand have that the and believe been rolling many been accelerate and blackouts to situation. to trends past grid little between step a the believe

work of home of intact. remote also essentially demographic in We homes trends remains megatrend the levels aging are and to electrification to The continues shift increased believe as the or grow persist will place. driving hybrid where

the PWRcell subsequently rates systems for significant. the residential confident I’d storage impacted as in challenges of shipments liquidity the bankruptcy. energy seized that a in now quarter trajectory were long-term operations the negatively remains clean by large customer category of our mid-single-digit energy to like intact, standby filed nationwide for growth products megatrends home third we these the significant the that and and are penetration firmly range, With still discuss

Additionally, energy for of storage warranty-related our certain address quarter, components system. during we to the PWRcell within upgrade the a continued matters

these and service with these have efforts part engaged As underway. the assist completion well this companies to a third-party of upgrades of we of are effort, number

in quarter, million warranty we comprised $XX result charge our solar-plus very for opportunity energy but The longer that continues quarter a a million $XX storage from items, a clean million the of third the disappointing, important business energy As $XX strategic an debt the bad recorded of represent believe these experienced reserve in we we Generac to an were and challenges market charge. term.

expand and installation quarter's distribution efforts need reputable by have us with this sales to our products. further focusing companies these results on for our demonstrated partnering However, the high-quality, for

restoring in residential in vital dealers coverage Importantly, the warranty competitive we a space. upgrade clean play supporting the program are committed that our participating they are in energy to as role our

out generator product our broaden and beta and quarter like late the PV new December. and We as in year. of update phased as this system I'd provide anticipate we microinverter offering half began balance quick energy update for the full battery AC-coupled last during testing innovations to which year. acquisition, market through as on storage will on storage, commercial beginning AC of to continue bring we also our a addition, launch a half enables as product our PWRcell this continue announced called the we the in now quarter continues the In targeted XXXX to PWRmicro, commercial an well the a ecobee our of the completed the Work roll second integration. second to first that

response on of teams energy have devices hardware grid amid ecobee focused been concerns services During for validated through positive have grid to solutions our demand products. potential programs stability the prices. of initial and indications for seen for distribution ongoing thermostats other period opportunities identifying creation around higher Generac's we ecobee's alongside value energy ecobee’s and and and cross-selling we clean continues smart developing between partners be are demand Generac's Synergies ownership, rising and

the our strategy, diversified the by of residential accessed be leveraging to our accelerate begun interface. grid continue sales controlled ecobee pipeline. the energy efforts as on and glass ultimately color also some help core have single user team our to will which also a We and ecosystem of that they is a I execute development of on additional team to to talented Connected Devices provide pane growing want services

expanded further have synergies work extract mix We as alongside Generac grid of our offer Concerto our across commercial platform. efforts hardware services software our an teams to increasing to they

devices microinverters, to contracts contract unique Energy, Our team our remains grid platform wins The continues a grid Public monitoring is for Software-as-a-Service opportunities management-related in be to call, of comprehensive suite to distributed programs Pearlstone our long-term grow. ability as grid market including core Service, and and management Concerto to our for Generac's energy demonstrates aimed resource solutions number solutions of the of with a proving capacity Dominion is storage, programs. U.K.-based to announced megawatts vision. Arizona the since attractive a unmatched end-to-end quarter differentiator of as highly second and with and and Energy services deliver solutions competitive services program devices strategic at services residential as number well which connected We and energy performance

compared million. energy clean $XXX between of and now to of sales impacted the $XXX combination million our customer the the approximately XXXX. technology full However products issue, million along loss year year near-term deliver services XXXX, a expect $XXX demand our quarter, warranty-related full outlook for We the the the to to has with of as and guidance during major specific for previous

the improving we're drive last also President the remains we as President of new over management as along Norm beginning quality team clean and addition energy Vice in With will as with of in investment work a developed Our our Norm Officer, noise Senior Generac's the people team company performance these years. solutions key our industry of product expertise forward. mind, Chief new of the and and help the well and offering, that in of focused we've that while experience, Senior Policy. President his the involved Tap further clean integrated technologies focal leadership the for Technology robust technology continued a broaden three talented of building acquired bring and technical decades Vice as energy development and area products of to with processes organization, this Finance, August the a in

policy long-term value-creating has more been market the this the for investments. necessary for favorable Inflation Additionally, visibility Act providing Reduction never backdrop with the

We important leadership more suite will to cleaner, technology more role energy team grid. continue transition an to and electric reliable build we a and sustainable out solutions of our products play expect the and to as in our

As a result energy improving XXXX the the strong strong the of growth to results investments technology outlook year. we throughout return for market, clean full this sales and these to with for year expect sequentially

larger and core during prior visibility that levels the Shipments on expanded global impact XXXX. and to the led momentum acquisitions North into grew further backlog in as and third sequential as as of applications. growth across will We net remain quarters on invest for customers giving prior trends significantly hardening C&I highlighting year Our third to again through customers in quarter national the exceptionally to close durability the demand quarter by at backlog excellent compared sales products activity compared Upgrades in-shipments counts infrastructure resiliency. the telecom C&I products stationary for sites on key well the well increased elevated, business increased basis, prior American their the backup the C&I levels, C&I for several to which networks. for order continue growth ahead year. in of to and category a continue the as megatrends network excludes expect expand. we as existing foreign channel to rates month our as XX% distributor will as of These quarter or our in nation's solid remained again for national generators power increasingly of October, as-reported equipment, are the continue remain to quarter, C&I the one quarter channel of increased that products global as XX% a and from in their in the market an currency basis. perform considered continue us telecom this share years and record the in our was also networks indicate Quoting sales the part drive the require our year, coming as in trends continue and as basis to backup national XG the build-out Both strength and power to for customers. domestic our power and strength hub demand of experienced telecom fifth compared Shipments generation during distributor C&I continued third the of industrial rental in critical infrastructure in well gains,

early and equipment opportunity, quarters our our the experienced innings natural to the with gas for national also equipment in growth of in rate. as to to continues also remain growing we with new exceptional stability of are demand the energy in emergency megatrend innovative beyond substantial continued ahead drive refresh are We in the We this for invest solutions. these used to for traditional anticipate concerns standby the will expected and products of continued further an applications need these quarter environment exciting robust and demand at mobile generators very sales they believe in their products as infrastructure projects out. interest expand markets volatile growth market quarter grid play the for as around improvements Strong critical customers rental customer for We another independent fleets.

step platform the and interface C&I vision shortly connectivity available foundation assets. a acquisition our stranded C&I took previously single efforts Concerto monitoring of in for longer-term make generation a after grid use Blue our creating end generator software a in connection industrial forward Blue of generators to by distributed quarter programs C&I that of suite Pillar, an also and enables backup solutions connectivity can connected a developer Pillar's the platform significant Internet control. services will with for user Things energy We provide of for

in to are European region of Concerns in on the generators in across to has Our The Europe's quarter momentum, in amid and growth third the total benefit complex during highlighted was foreign rise sales ramps market International continued macroeconomic most region quarter very conditions to year-over-year as notably regions, security a certain, with and when acquisitions and by Ukraine impact conflict continent energy effect globe. resiliency providing portable need production for in further seen quarters. businesses product around all sources Longer-term Generac the across Europe experience the intersegment have excluding strong Core with and the on less products of however, as branches. volatile, recent remain American the Mexico Latin remarkably power our strength power lines, market. subsequent sales the XX% The core currency. the the telecom segment generators over increased sales for as XX% of the the of total and the European continued increased of sales security. homes total growth strong demand war notably sales independence due heightened most unfavorable driven the facility but growing to focus trends substantially continuous awareness also through has end C&I demand North region in across America and energy dependence are geopolitical we our and has for on backup

the anticipates view in were continued disappointed this third for below existing place into we challenges year. prior the strong our the demand underlying But expectations. our given year-over-year strong believe C&I were results action global that plans in our we products, our address closing, we have Looking throughout quarter growth In preliminary to backlog, entire XXXX morning, and fundamentals business. the

now we simultaneously add we sources, secular intermittent homes, firmly and emphasis intact, grows reliance leadership of and supporting installation home supply for weather grid's world market that continue the New remain category strategy solutions the to the quality XXXX. area preliminary end growing become our Smarter around has clean to the electrification in baseline electricity the to volatile the growth bottlenecks believe over the opportunity from to our want demand more invest pursuing increased year views as and our example of innovative Hurricane is long-term underway. XXXX our our for far and imbalance an products results, further, of home York? enterprise the we renewable lead the Ian growth as ease innovation, we generation business. while as confident latest and The of to megatrends businesses the themes to normalizes, standby technology resolved, turn next I are product generation provide in are and further and standby energy and details a initiatives our help clearer. demand Important and evolution company's for Powering the the And quarter we increasingly this our will patterns, and on on remain call World severe the transportation. on brought confident grid. strategic new to will power on higher York outlook is well and third

Thanks, Aaron.

quarter million as quarter. million and in more regions, cost net the XX.X% currency as compared net strength experience $XX third quarter. products warranty headwind headwinds from certain with in million management for internationally. growth product in our sales acquisitions foreign sales an $XXX price slight parts XXXX offerings was to quarter. in domestically internationally a and was of more in at currency as to sales for XX% shipments to equipment, to net prior channels and looking third detail, parts Gross to during year energy the impact of sales both the X% domestically in the had combination from XX% quarter increased to approximately modest the quarter of partially business, million sales strong the during the increased XX% due a sales contributions X% made profit year, rate $XXX compared in the offset was impact provided third up on over to storage revenue foreign than for services unfavorable from to majority the strong quarter. margin grew prior million XXXX acquisition over all standpoint. we Contributions and generator quarter of weakness third the a of revenue quarter. growth $XXX XX% category quarter was foreign revenue unfavorable increased during across industrial X% unfavorable compared quarter at broad-based standby net growth and prior billion margin sales the mid-teens the systems. channels. prior $XXX of currency and $XXX product Contributions million the $XXX growth of The increasing the industrial during sales in the impact the net with prior acquisitions from most approximate third class. the recognition, national energy service third the and XXXX, Residential in contributed compared product results a million The and Briefly year representing to extended to year net for other core core compared Looking third of as category services strength comparable. X% of across continue product strong growth along by by back consolidated in rental quarter and at from sales XX.X% XXXX. of aftermarket year. the our to This particular in telecom, growth, Net a and as ecobee solid for year the sales growth Home Commercial to of Core increase percent residential distributor the PWRcell prior $X.XX

in revenue segment EBITDA EBITDA expenses $XX.X prior by the a as margin third million continued This for quarter. due sales. standby of clean representing as the price lower lower pretax margins impact home is energy a a of product an in $XXX and marketing $XXX to impacted and the the related release, the including year clean product spend a the driven million includes XX% cost filed sales, prior $XXX sales, growth increase of To million results was that higher primarily million for recent sales, compared of in In increased of as XX% also to defined XX.X% primarily favorable the warranty-related of net as product interest, quarter. year in to increase sales $XX.X Adjusted primarily compared expense bad proportion year Domestic sales $XX.X expenses of headwinds. quarter briefly XX.X% in earnings remaining contributing prior quarter year. XX.X% lesser as will compared million energy domestic I for was mix, million discuss our debt X% margin or quarter, for was current acquisitions deducting million the to less the approximately for increased or of to $XXX total driven reporting sales $XXX The addition, comprised now Operating customer intangible to or X EBITDA, extent, intersegment net compared charges matters. to the in of in noncontrolling third our or of segment negatively a the recent acquisitions expense. segments. the quarter million employee and Adjusted acquisitions in was increase higher XX.X% $XXX million, in costs for increase. $XXX a higher bankruptcy with charge The recurring million from and operating amortization net by also contributed to the financial before XXXX.

offset investments acquisitions In margins unfavorable an higher than in percentage the continued expense quarter, the had impact currency, segment compared compared of and operating expenses effect $XX.X net the sales year. before addition, million for million the the as quarter increased a the growth deducting came sales acquisitions to relative non-controlling on or and compared XX.X% on Core margin mostly to future performance as volumes. leverage in $XXX prior operating by expected as to during including by favorable impacted total higher impact million sales for to of EBITDA intersegment in year quarter. International net of prior sales, million of excludes XX% which or prior was approximately of XX% on interests expectations. lower a sales, $XX to shipment lower-margin for as total sales, $XXX significantly sales, the the mix the was increased intersegment segment XX.X% which This operating Adjusted year. in volumes higher was of

our to of the back switching Now for financial a consolidated performance basis. third quarter XXXX on

compares disclosed As warranty-related of $XXX taxes prior an reduction for the was our the capital tax in income third versus $XXX during GAAP basis net $X.XX $X.XX year million million million the year as net positive or Cash matters. per prior effective was on Adjusted GAAP GAAP to quarter the free the a basis. clean in XX.X% $XX net prior free as decline income bad per multiple quarter And of This cash effective company The to quarter same the negative income in defined $XX prior year. or positive the income year. million share was was drove for income year. the release, $XX energy $XX $X.XX earnings per in discrete primarily as taxes was was prior during compared payments our tax that net the $X.XX down rate flow, share. share. negative $XXX quarter for GAAP million increased tax capital earnings or by the $XX.X as Diluted of was current flow defined the income the in compared quarter, million, XXXX in compared in in compared rate due to prior and working on compared $XX our current net in offset third partially versus third cash for tax expenditures. third year current last operating year year an the to $XX.X $XX.X quarter lower earnings, totaling adjusted in in year items higher million release, the related million net earnings million the the The as due income million charges pretax from XXXX. the quarter. company, for of tax operations in as flow quarter to company quarter to to year of The the debt or year and to includes levels million was lower – to current rate the XX.X% a release

of the X.X XXXX, at end basis. million billion $X.XX leverage outstanding $XXX comprised debt $X.XX at Also, the $X.XX end of our ratio on total quarter the revolving of XX, resulting and hand of facility. third approximately a approximately on As the availability billion gross cash September quarter of times an was have of of billion, debt we in credit of on as-reported liquidity,

July our a during XXX,XXX Board stock our of our repurchased In now new a repurchase million which the up stock allows provide for of that repurchase to outlook. over further program that, $XXX.X our exhausted existing Additionally, third program. on quarter, stock stock million, updated Directors the of XXXX, period. With we shares our comments approved I for XX-month common previously will XXX common of repurchase

outlook sequential the still higher X% gross our as quarter expectation XX% offsetting percentage sales residential pre-release, to improvement. sequential to an margins year XX% the improvement growth includes both which This of and acquisitions the third partially over As low foreign for assumes Also a products line expected noncontrolling to to pre-release This be XXXX during similar on with full mid-XX% basis, our increased the within X% In a net quarter the approximately margin a EBITDA in for as-reported the to XXXX previously still and EBITDA XX%. currency. year. compared pre-release, margin to the XX% of prior net expect gross from and in line increase in rate net margin at impact to an range guidance adjusted are C&I before reflects compared approximate our updated sales adjusted operating sales, disclosed year. expenses we prior with the between in fourth revenue to deducting sales levels, modest EBITDA as X ago in interests with margins weeks we

XXXX. provide the preliminary comments anticipates to net growth Now for first sales experience remarks, I'd in view a consolidated year-over-year on Summarizing regarding earlier like our further the XXXX initial basis. for weakness half that will of our some Aaron's framework year

return products in in home as in decline strong a and into generator launch and year the in as to the out overall growth in XXXX. sequentially we modestly to to sales of only much the growth technology continue to our of year more robust significant we this to XXXX. face previously decline build the solid growth expected our Again, XXXX inventories experience discussed, half expect modest second the of year, resulting normalize, the for first net field anticipate sales full growth compared as XXXX. to Clean full standby in to new presence, market, second Aaron energy results sales prior is half sales distribution sequential year improving sales headwinds resulting as But growth the during XXXX. over expected We half expand for is

view activity product growth assumes recessionary the not is the for does long-term XXXX. and prolonged anticipates assume a preliminary consumer sales during that in environment baseline throughout outage line year. strong growth preliminary XXXX impacts meaningfully that average, power Our spending This guidance with continued C&I

when results and Additionally, assist the free full guidance update Shifting we share provide next report cash we our this details in is XXXX to provide will of now and XXXX. preliminary for fourth a flow adjusted year. earnings additional we per year into modeling forecast, a XXXX, detailed to quarter with early will look more back mid-February

tax is GAAP approximately quarter of of rate GAAP effective effective year, now for be expected Our to XX.X% rate resulting XX.X%. year XXXX the in approximately a full fourth the tax

still Stock expense is $XXX reflecting $XX to expense year remainder an between higher million outstanding $XX Depreciation million XXXX, approximately million. compensation year. to expected for from interest $XX XXXX. to This expected million, expected million previously $XXX now no is still million be expected of we intangible to to $XX approximately the previous $XX approximately debt expense in the GAAP full For the amortization is guidance $XX year. benchmark be for in changes million interest be and rates. be additional of expense million than to assumes $XX increase to $XX to million, still expect 'XX in the million

year share Our weighted diluted XX.X million previous to the approximately expected average full guidance XX million to XX.X be count compared is now shares. million shares of to

investment net net projected X.X% capital compared is expected the sales of net level prior cash X% to X% approximately to the in Free conversion of to to our forecasted begins Our capital closer to off. flow adjusted working guidance as to of fourth to be year quarter for the of in approximately expenditures XXX% be X.X% sales. now income are

XXXX At updated for like This the could outlook open potential acquisitions this does this incremental or time, not up drive we'd concludes prepared share to shareholder reflect remarks. repurchases additional that questions. value. call Finally, our

with our Instructions] question Baird. And first from [Operator Halloran comes Michael

open. Your line now is

guys. good morning, Hey,

Very good morning, Mike.

through today question. second to second about people So by first surprise talked is just the kind of being want that caught happened installation the Obviously, but potentially how changed. think quickly headwind to you and of lot in between what a challenges a quarter, talk quarter magnitude I the

about misaligned the the you so question? was dynamic That’s you what that could talk with first And in channel. maybe happening the got

only Yeah, surprise, Mike, a our Yeah, great channel and by question this even is that partners. Aaron. us caught obviously it's one but not

the peak as began over we've would as hit to home working of we we predicted the our of we output years hard kind second quarter. last and quarter stride been couple we with kind think hit our – – and we the standby. exited of third the I We've really very we levels quadrupled output

really to sign negative And we’re was partners. bring a new high close at on important having on so And to impact really thought knew impact because producing wanted it's was we a negative having times ability rates, we we that channel that a that our because down, rate. lead our

we you hard the the do on as in shipping year-over-year, call, for activation the same to that and what is our out – with at to we the we get floodgates market. to so and that all working And we're see really end So kind started second product of of open rate, it, which our was it said it our installation, proxy was we installations, output the rate but increase. our on up that mentioned at wasn't increasing commensurate the quarter,

And people. were one-off so building. we helping for prepared to then place could. dealers ahead installation of programs been the in had get just them we And end, the lot we it's but we channel partners And inventory point get field – to a our to that, install to that obviously, see number actually of we coming. several products. And non-dealer inflection these it's a that quarters them could for We this, and weren't change hire channel trying about this had rate talking contractors in of able to and a X,XXX we who on have we conversations, partners, degree thought just of the ton

successively we levels, how bandwidth here the had and we never model, of past, unconstrained that probably modeled model it as that was out. that barrier. was simple in with played by of had is, answer bandwidth happen had be output our the rate we I've the in the a cycles in the these before, six flaw never and installation new the peak installation So hit the flaw We actually kind seen the not seen way.

it, higher kind when And shipping and rates at only stacked of that So really marginally problem. at unfortunately, rates. those you're was quick the installing up

the they started to and to stack field credit. run room, run started of out So physically out up, of inventory

and in soon like, as efforts, from standby what do we on together, understand it It's that's through And redoubled And installation as became dealers the those so quickly tripled want ago. to clear we to did and accelerated why what information very folks deferrals see prerelease other saw And we the so what efforts we channel home happened this saw can we bandwidth. a again, is of to that can put increase our QX. this we we've we weeks it. they couple all our because orders okay, quarter, and get very here and during on is cancellations partners the quarter

if of So anyway, kind you will, question. answering home first That's the that's for standby. in your a issue nutshell

what inventory pretty take are take how super of a on it's in the I long release closures, where have that's underlying related, and sync a I'd timeframe sync and going right-size hard are the happening to what's with of consultation to at. having metrics I and the can to idea and for the just the guess about helpful installers pieces gave how thinking et in the the press underlying love But and good I to with channel a the still cetera pretty it side, time time take the lot still going it's So, kind healthy I'm it's think conversation you sense maybe the prepared up. that with to calling around you're healthy a if of that bandwidth remarks demand.

maybe are to the where Yeah, probably about head that should I levels believe get be. they today, field currently way best think inventory your double is around that we

so the bad capacity additional we’ve the right that market output levels. put news, the the And into the that's of installation That's increasing to right? ahead

run the Midwest normally into because to weather country a The installation the parts just installations, into and year. that get of to as and installations because next modeling is we seasonally are – of the coming seasonally, increase of capacity period into going do harder We low here that turn course, like we're we because the QX QX, are where the is much of winter. Northeast cold of challenge, page and

deal challenge improve really, a have though we are seasonal even to to It's this can't got are year-over-year, We we unfortunately, hard targeting fix. one the So nature. with. that's just installations we've going to

first needed the And half. in so as as to it necessarily quickly won't we increase

normal We of on it. prepared because the to challenge, again, back And indicative deposit a we it's times. the remarks in lead of it. dealers, half there the inventory meaning a got that's we're Now that good we our field it's is, still spoken backlog. customer pull have what out news A installation for, against said has contract when customer is got is today now mostly

some out products, We things we're have that. models - of couple a cool liquid still there, like

if up a bumping all So is against mostly these for you we're quoted product, to being these you or be upgrades, there we up gas you over in are the constraints you normal of people homeowner some QX. are and have permitting component ends localized or but happening our a lead lead still going But we've are get just that's – times, longer our issues and supportive channel of where meter and constraints, partner, country they’d partners here where constraints, what are us of that whether because constraints try channel times call delays.

growing year, said by to we're half the year in the they're for next the think again, so total year that, that think really take and that's category. the for incoming prepared ease, we of those half put But year really in going second in so the on first challenge. next down home through remarks, order and help. will we modestly going that as the it's rate of through that's likely category to first get We of pressure the that working to and And to this the again only the back for standby our through half and

market so I anyway, the about it’s end is that's you think when that So all together, we feel longer put it – supportive. good pretty term

makes That sense.

talking category before bit. So normalizing is couple little this quarters relatively start in for the half on is the year rate next saying about things inflection and you're the a catching potential basically, quarters from you're run as up standby from back home there a a few sequentials normal the what of

Right. Return return half. normal second the growth in seasonality, to to

Yes.

will That's the guide only still overall. half moderately down kind company category, for again, but the going And year, clarify first just overall second for grow, of then kind the half considerably, that. just modestly of down be to our for is to next

that. for it. Thanks sense. Appreciate of lot a Makes Yes.

thanks, Mike. Yes,

comes with question Hammond next Jeff our from And you. Key. Thank

Your line is open. now

guys. morning, good Hey,

Good morning, Jeff.

Hey Jeff.

of drawdown demand Hey comping as the and thinking year the about just guide, of for kind want this like underlying what how about that that thinking you're the you're on of kind backlog category. for you're to seeing then kind would – imply I understand just the

obviously, year mean, heavily first comp, backlog two of quarters we're that's the year. the is of against part in comping year we'll the half kind a that be without again, so that of I headwind the having big for we that next we benefit down of were because and Yeah, next as backlog the – bringing get first of this into

of it. a big that's part So

that the down trying to then standby point comp because being are the And here back... the Aaron's bringing category backlog about home moderately in half, of like that's some down that you second headwind we're in

half, to Moderately XXXX. but growth the second returning in yes, in total, for

Yes, for the standby.

Okay, okay.

For standby. We're talking just standby.

headwind standby. Yes, that on we've backlog just an talking got yes. driving – We're But the that. that's

that, what's driving exactly. That's

well. And your as inventory? with you then, elevated inventories doing bit your your like about just looks a destock what should are production we you are own guys levels own of just how this as think It And get reset?

the they saw negative QX. through Yes, work third back quarter, see the flow you We the and for free around that capital in cash are in driving quarter. increase that read coming just

able lot our business more are certain industrial down. definitely we we better business, at in in material we of other on the goods on side kind as hard and faster are basically centers our components engines a next year get standby hitting of We go distribution in because really as and factories raw slowed that to we're bring struggling a our shorter So, and us, standby levels supply. there with could a production But feed if down that's still relates those and coming home but first constrained to low actually side, inventory working higher, even finished to category industrial in both home in breakers of starting position the as of levels, inventory would half things we it have in materials be and our our well. should are particular. dichotomy, kind we still It's into the slow industrial basically get the then through slow some we seeing to QX material and down factories with fact, materials our to, are and

Blair. And Brian Drab Thank you. our comes William with question from next

line open. Your now is

questions. taking for thanks Hi, the

Hey, Brian.

to clean, morning. shifting Maybe hey, good

a to minute. shifting for Just energy clean

to energy down I clarify... that around growing business was that implies $XXX you're us that that $XXX It you looks so and like right and million $XXX million guidance XX% $XXX now think million, the this So, that's storage can what like or in giving is market something Is the about XXXX for million. year.

mixed the that market ours in there second they comments is some of growth. Yes, there year of about the really market is in operations customer loss ceased out of July. the But, still here, growing, yes, half although major the

in work should channel do all the we to hurts So expand to honestly, year, we've continuing definitely partners, us to of Brian. got our that, hard that more have doing along but channel the been

going this So, down year. be unfortunately, that's to

Looking return fill for going think so cycles reset, next XXXX that painful here reset to which But new with of learning of lesson us customers tribulations year. to your to for are market partners for partners rather learning and as kind in disappointing, lot growth us customers that you're of going pick storage, a the we just energy there, on to being dealer and on through we a of and is the I kind of is – some a there. year carefully. and Again, some trials we up but having of the end

half. up about up you you company can more and am year, clarify exactly the second to all expected said I in one the you're – half company question, Okay. prepared that terms first just I to for remarks, modestly just in is full wondering, think second sequentially for be saying in Thanks. it's then, total But half? that be down you'd standby of total my about the second And year-over-year XXXX what time home

Yes, this is York.

total a total to in second I bit we in growth by half. mainly second to had company clean the But said So the total we think bit yes, total company first to we energy for solid weakness important growth little of the just company, a driven little home discussion standby build returned half, clarify, so as company, there. note, of, maybe half,

full You decline would only total together be for year, company. XXXX. year then for put a that that modest That's full all

then of year the weakness much the then So first standby half prior more sales half home specifically, growth half second second half, in to sequential modest again, and first in over the decline a growth year. from

but relative So the maybe down home half modest it's a to little for much bit, decline standby. more first

Thank you.

Mark comes with Our from question. question your JPMorgan. proceed Strouse with next Please

questions. morning. margins somewhat of talk easing just had. the good of mix first some kind should Thanks for year? of you that Yes, of how issues factory you've offsetting our the about we and taking lower through about can curious think half York, if next with kind absorption forward? supply of margins HSB going lower chain the HSB, the And that of then Just

a business, Yes. seasonality, think QX return mentioned then home seasonality QX normal to the lowest meaning standby catch return I you No, for curve usually the is to in point. backlog, Aaron point you the is lowest the once

sequentially element. from a were mix QX standpoint, XXXX. that mean, to heavy I inflationary we mix margin should decline because of from just of because XXXX expect, would XXXX, pretty QX that in you QX – mainly some recall pressures But, gross So, facing that

there. how see a that changes to look, price our we I given nice the the margins sequentially the models together a into gross still that's in So next are year, going relative going - you'd to expect putting going cost would we standpoint, cost just yes, the from slight to would some I benefit runrate. just decline first half maybe price But are of mix see mix on expect but

most a reduction then for broader bankrupt? business. backfill on itself of clarify the And some Is that needing has that Power actual with to there issue by the just driven the product is to Or of Okay. Clean solution? the revenue reconfiguring actual gone is outlook customer in the the there

related that to is the restore our customer Yeah effect trust, the the market primary here customer. the base I majority and in say got national That’s there got the a lot being course But to of be component said, solar sales us installation a degree. we've market. forward. a solar a to companies here. important speaking too, a had are bit. storage painful and to and right, with of for established, learning loss this, we've challenges obviously, to of spillover was to It is will going the is the over of new the companies, existence But has diversification learn the a lot and every this some like the in going in well really I customer market of of probably There focus kind the of lesson. OEM And national almost the kind markets’

So, again, batteries. warranty it's but indicate is being I am penetration XX-year I rates the on are years severe very low not market. trying environment. mounter that should on periods expect warranty mounted, a that, environment, these the people components, pretty a rooftop long. for to periods new rooftop The mean, XX products. are The very electronics

So of you've lot high and that. bar is have unfortunately pretty a a pretty, with companies got struggled pretty got a – there quality-wise you’ve there a

of we, part an couple our strategy We it's Now, going I forward. very feel a committed like future. of One, we think to this. think, important think the We it's things. we're

for can represents think of great I opportunities fit it some our with brand. what Generac terms in

our and in expertise of distribution these areas. Our some

to So greater than we finance to had great thought. this. obviously, we're committed a originally investment is The sheet be going got needed, to be it. We've able balance to

and a here. take just our to it. based experiences try on technology clear can't scale You start-up That's

to going work a more are around to lot that. we have So do

we're in to that. do We're teams. it are of We mentioned and this our future. an We started some it be remarks part think to term. that do prepared continue we committed more is, of to going it's in longer major going talent in important and to We put morning, that to We've that. have again, player a are to going to the this the

with We to here I the lumps that this take that. But that in of we will our in success have are lot end, going term.. a the great comes longer believe humility and

Joseph from next with our question And Guggenheim you. Thank comes Osha Partners.

Your line is open.

Thanks.

Hi, Joe. Morning.

is more I spend lot business. business. size a time is a good which talked energy a great. clean to Ecobee the on wanted bit about We've storage,

us about look to So what sense wondering the a to don't get challenges So couple some might two stuff, other business next could before, you want bit that look give are of other can to as you've now inverters? the And of note, I'm we the you with products, that people's questions. breakdown detailed, pivot the given my year. some a that talked if see but as the roughly maybe talked you've about – you AC that of Obviously, on product those we like? got too this the more alongside a selling into of perhaps related you little safety couple

Joe, questions. Yes. great

Just then first the I'll coupled get AC to and let piece solution. on touch ecobee me the

run. well - So there on first – ecobee, struggled availability it's great of this component they've It’s a in really half year company, really the with the year.

up at at being really their and and around expectations expectations a as the things. quarter. own they've our have things here looking third So they as to quarter ever But quarter under-delivered They're fourth exited a company their big looking that. bit picked highest just

a to higher And cost-effective strong, can which can you response mitigate -- like a to thermostat the type higher are those inside I even these prices, more. to assuming of products, enhance to program, you thermostat that a and that. tie pay I year, a Homeowners, kind services grid that's energy not even to right? probably one program, buy connect of opportunity after back back. that payback and prices, you of the demand even a are go The lot for think, think that, energy of looking can is really solutions smart paybacks way really

business. that about excited really So

and nicely going think not going I announced will here grown doing it, It's when forward. break pieces don't continue want this and year grow because every to quarter that million. $XXX into down to we something the to it's we're get we like

thermostats just So, going single but glass they we initiative be the opportunities that run I it's of to the team have have, a as think within bigger devices lot talked this they that... disconnect be switches, like smart at smart or microinverters connecting sitting or PV central pane a that it think that great the we've and charging, see the heart all water system energy business, of or that the of ultimately heater of whether upside home storage of We is about, there. or generators load EV expertise to well is And things that. management, one

this did right? hear $XXX you I say year, million for

No, was that the was That back runrate. we said in their we announced December. when deal what

right. All Okay.

nicely. grown They've

now. area third-party the Yes, market the firmware our things they've grown nicely definitely PWRcell AC coupling with me, can And coupled from to then and that update the that the since power into microinverter or accept been one pushing – the ACQUISITION, get third-party AC we've on then. excuse a inverters a of is focal PV, the the

So we to feel good that commercial forward. be we about going focus that's and as go a for area really teams our

that So forward of looking see that getting that. to think some success marketplace we'll and that we the traction in

you. Thank

bet. You

you. Thank

comes next Sachs. with Goldman Jerry Our question Revich from

now Your line open. is

a that wonder Aaron, In of today? seasonality can rate you talk good sequentially normalized fourth the installs on business. visibility low up we production term hi, now everyone. if where normal you the think based morning, the standby in to I tend your runrate business be are double-digits about could Yes, quarter, be up at have the for as I

won't because plenty well. rates got issue, bringing as because we're inventory, of of down inventory and the Well, those production be we've field

rates, if – the we up We'll production won't quarter. that around be So, the question be fourth in is lower.

today. So is we dealers we that's And quarter. expect in that into the which and peak added we XXX fourth our to quarter normally, in the that helpful again, see, seasonally guide capacity, But built alone, again, for new does continue that. installation

by we all more add quarter need the but. to know if don't here I end in our year, peak and but well, Jerry the question, We dealers your hitting be the rates not, or the guidance. pacing fourth answering to contemplated installation are again, for in of I'm that's

first would normal quarter production mentioned the be well. you down earlier, And seasonality Yes. as in as

from new And additional to that order assumptions that I'm head we baseline to at on after am see incoming so is obviously Or of I trying rate? outage you the Does down a running quarter? baseline, it, there wondering, million understand, baseline every that making match And is that rates installation the standby risk going first peak. event, into, are order major right, higher the and revenue as there based but step the in today on be capacity just down? we call without a is $XXX any quarter just

no. No,

going have said we've that they work is what field their as inventory to continue going – rate So to we're down. order headwinds is the to there

of "normal" about got about right, where the of So about time which already and the be the that year, field of But inventory, should this half sold. is again, field at so doubling they've of really – in we is double. days inventory terms double – is problem,

just have get installed. they So to it

So going is be to because – that, of order the we rate that. until through not artificially we're depressed get

will... increase that I of basically the the hurricane backlog guess, dealers will our

impacted. the rates that we could of And are today But field the continue Florida where Yes, of half this that no, order low inventory. artificially right-size exactly. some effectively year we think the of and seeing inventory in of first that the right, drawdown Ian next as we that regions, we'll are the to accelerate field see in particular, end through in year

have some we’re as in satisfying here the backlog fourth we remember, And that well. quarter

a Exactly. That's point. good

you. Thank

question Mandloi Suisse. comes with from next Our Credit Maheep

Your line open. is now

then for QX you and C&I there? all and should first and maybe our inventory taking you're over the Should I channel in given have the any in-house on a OpEx on questions. for go. gross opine expect just first And margins Thanks Hey. half. the i could on projects QX the But just data Can if you on guidance for enough consolidations? follow-up points seeing – HSB changes in we the half

QX. I percentage OpEx, This to in of the a relative sales quarter think, tweak bit OpEx to I as may here fourth little up is alluded it. York. a

on reversals in in seasonality won't some just Just there QX some that actually some repeat. spend accrual is QX,

So, a sequentially, in a percentage just of sales, in increase dollars both as modeling what modest we're and our guidance. OpEx

about think in on should XXXX? it guidance any And we how

for margins on still mean, just OpEx. I framework – – the We're and we're we're gross the working still we for gave framework top-line. No. the

year think we on going margin side hold discussions So the to next for on next off quarter. are until I

Thank you.

Sandler. Our Harrison Kashy next Piper with from comes question

is line Your now open.

taking Good morning the for and you thank questions.

so So of And segments, segments both Can the just strong. dig the first and one those the in from you in detail maybe just on other into both strength C&I some me, quite I QX? so continuation speak specific a early? XXXX now of have of gives And that to follow-up. then, seeing growth entering right you're the confidence you strong a maybe indicators calendar

stride. really, business really Yes, hitting the C&I of and a its number been quarters Kashy, ripping along has here for

share C&I. the Everything in distribution was We're basically in market. We seeing our industrial in are taking channel. up

that company So vertical was a is the telecom up. important our for really vertical

that past the more it of categorized to as area in would to nicely. and mobile was up up prepared off even beyond fleets is applications. internationally, in national business rental there. kind lot mostly as the business of refer same Again, C&I, I and a as call Our that this up which one was so was refleet we – accounts remarks also I the our top think their early Probably inning, just than that very we continue was opportunities standby out

they into natural gas sold they So, as have are emergency where can power, called large to into times backup-type otherwise generators mainly sold that applications are significant used support been of natural applications normally generators, during C&I be being gas upon backup stress. the emergency grid also of but would still

that. outages, heat waves, things So, like

connected grids was software generator platform, our the grid we're micro us. market kind in a services for can demand up So programs, remotely by of the a Concerto programs or operator on or energy-as-a-service through utility types of switched that and think large really seeing where be grid oftentimes quarter

quickly small here it's projects, Now it's in that business the but conversations potential pretty in are people the quality very and good. pipeline still for we having looks with the growing really on totality, future, projects

oriented growth. C&I are in So our much capacity that adding around accommodate to we so that factories

grows struggled that as grid capacity, it that on from the really scramble think additional kind we've fundamental imbalance, part we side, capacity, utility decarbonization additional so, This - are supply-demand the of because additional the there, that can issues making in sheet scale test demand trend investments the utilities And identified coming and that the a of manufacturing so instability many the capacity, it's have grid particular. summer over here metal electrification business of we're of and had mega we of transportation. to everything, be ready the of rapid fabrication inclusive sources and for operators

pretty the snap demand or exacerbated challenges on year can plant there was you February The that in region going And some get other offline a that are were demand. over major of last significant capacity disruption, in the certain But if the has ERCOT in which that major sources is they the a Now gotten out what this margins that's at challenges. in in market. in to of Midwest, remarkable. able to end, even underlying outages, West, reserve it happened down of levels, the there's supply-demand in cause ERCOT the is was excess reserve get they margins margins markets what heart where supply, where or the goes margins, spike really is avoid any down gets compressed what cold reserve kind really here the have to those happened the And dramatically have reserve critical of Texas. were or you in some kind kind or the interruption of

into fossil so fuel has a natural really support. grid come the generators, as opportunity than potential burn obviously, much gas generators, to And to assets the use generators, purposes generators, use these but for cleaner, of which diesel focus opportunity

in in C&I what of a was So happened that kind nutshell.

mentioned, the also businesses, business have As That our you some areas was very encompasses nicely. of the been as other nicely, monitoring that encompasses growing other well. up of some category

segments, third we classifications, or two between the really quarter. nice in saw those So, not segments those product but growth

give And for just the XXXX confidence you're so indicators early that you seeing on? the

business. a that business. backlog has is C&I the business so, I been backlog always Yes, mean, a

business provides story in became over But the home the fact size C&I that built and which has in custom been weeks the got not we there some always that, a last on it kernel of the the great new So two been cases, is the times the lead at backlog years us. on that, never always has XX, product. This been It's way. backlog has out business. standby, products you've this a is XX look backlog, depending go visibility for business

very So good we about feel that.

and to – – XG their or our You hardening spending trends midstream fifth-generation of and like of customers telecom CapEx come a that. through that's their are investments they indicating you types that going are customers customers investment, to going that that public if spends continue to their areas, made We of country. but this passed build-out tell those for the massive their the There's around that are only to, they infrastructure lot networks, to and account the look year. the are budgets build-out and as, bridges we kind seeing their also statements, business continue all going at mega national of that, that of some rental the CapEx rental ports The the sell get for of around Act airports these into roads of the again, infrastructure serve us continues and telecom to grow and be to had Infrastructure XXXX existing networks. the our some did not to earlier need believe

think in XXXX. I again, good. is there really the lot quality into going the of things pipeline, these – So have that yet said, the legs feels the those We of newer some C&I. standby as opportunities, opportunities then, And like microgrid that beyond a around of

Yes, that is for promising the fact remains book-to-bill next strong year.

our And from you. from next Praneeth Thank Satish question Wells Fargo. comes

Your line is now open.

Good focus a would the for we of normalized. been second, if morning. second inventory only have be XXXX by then could you that but would thought I issues down, HSB could I and just half Thanks. or have the guess mentioned installation on resolved that field the

am the second strong so just a and what's in it could So of demand be I wondering XXXX, half that where kind of for driving HSB view is up? there that scenario given is

is backlog here alluded won't the satisfying repeat. XXXX that No, I that in there it some Yes. we that before half think mean, of second I to were

a, little guess, looking So bit there a at XXXX. XXXX is when you're versus of headwind year-over-year I

outages. major any contemplate doesn't also guide The

be Yeah, would upside. that

if for where you're upside, we looking So could grow...

We did outages some have year. this

Mother Nature Yes, happens. things happen.

framework from would But in scenario first get is definitely – inventory these for resolving for the seeing XXXX. we're situation we backlog a as definitely growth XXXX the second backlog first inherent But half, sequentially, that here, half in in that's here here see where to headwind how field it sequentially things of second think second of the half an XXXX. would an of our here that grow. inherent least could So through at terms be challenges half, the you half in I

third-party are needed Got it. just that gears a then, elaborate And in that switching mentioned enlisting for and installers what new to That's on you're helpful. PWRcell, batteries then, that being of produced? fixed on has And component been you component certain be so Can upgraded that is? kind component you repairs.

Yes.

higher upgrade We rate of the what we'd failure shutoff that It's device component. have to an mounted it path previous device, that generation rooftop that like has device on see. a and than a is

replacing proactively customers. for we're those So devices

So interruption systems. they their see of an the production don't of

have and complete. So, have here to but forward we've time. some the a forward path had get everything for upgrades path – got just is We

third-party, became of loss were in We up, that service that took the warranty do folks is to of additional in going the that upgrade, in to a what's are third-party we our partner so speed but needed total channel that of charge with and why there. there the help that's the relying us help the channel And to some quarter. enlist be reserve obvious And bunch that we in reflected that companies effort we to are brought largest others, partners, that. here going of on that

Thank you.

from Our Schafer next Donovan Northland from question Markets. comes Capital

open. line now Your is

the me? Thanks Hi, guys. questions. you for taking Hey hear can

Yes.

Good. okay. Okay,

is installers was I more on maybe use terms from and of, channel is I the in curious, concentrated like Home on big-box willingness just the the So, the partners a tend retailers warehouse lower smaller pattern kind be or it tail installers? side, credit. the or Lowe's Depot side maybe regional to any of installers of home access kind orders in limited, there smaller potentially and the standby longer on think of even space or to more

any So, it disproportionately is a I of in then have kind one And am just if follow-up. of those curious areas? I

fits Whereas Not they homeowner a a wholesaler channels a that. by with if pretty of and kind and us, so, a pace. dramatically, have you it's the you in contractor has much you for of has Donovan. the business the this a traditionally when us they one comes dramatically. changed they if stock. homeowner at buys are at comes non-dealer where our – that's because retailer signed channel, hasn't historical I contract home products nothing a generally stocking only That's Like the or in way in just dealers, we the or the buy of from of do terms will, "stocking look channels" look the standby have mix within mean, channel mix, some mean, changed I right? those

nothing So I the going different on answer about think dramatically channel-to-channel there. mix question, to your is there

of a kind look – could just, puts and in Southeast what's on just question and of you – saying, is you've using both is the tailwinds in got crisis stability and simultaneously, lot but industrial, Okay. because And feels in going be it really follow-up be you in and natural takes and the fees and people my of because business at Europe and gas. - on is But going kind then, a next what's shouldn't of that focusing headwinds a on like much. Asia, we I Europe, around commercial Europe, guys then of there there and my as you've parts there, you global going other have to all are are India also so kind energy are why lot this got when

they be back want seen to against of any like there's thing if and gas CapEx be that. might up. might the generator resistance to and that longer-term much as a for there rely more on so short-term more And sets natural don't infrastructure invest so installing diesel a even Maybe

Europe. is and of there the sort potential a of of like Eastern and Western seems Europe takes it lot puts just So, differences there versus

So specifically a could unfolding you you and Europe are for more just how of go what businesses? exactly little like that's bit detail under in your seeing kind on

diesel mean, market. It's C&I Yes, question. yes. generator a and I Europe been has good has mostly always a

So that's just set. to level

gas think base or generation margins away. pipeline some connections. not That the but on of there. only for with There – about on going We the to it's seen heating, fuels. like limit and come that, it help yes, We think European be away can Natural the sets people carbon-intense because on to recently are on a natural it's it want a right off would edges to answer coming shift It's most maybe for energy that there not gross nothing But in cleanly. also coal the the growth I natural the like a I continue further gas cooking. gen discussion, is - improvements other here a populous there anything consumption nothing. emissions focus margins, in do confused say the the up to the have extraction gas forms anything is isn't plentifully market, cleaning should global gas well edges, for from emissions needed people emissions. here, of here. available, thing foolish a from think India, almost as to is is And the more is of really burns I Natural for in gas, further society populous, whether or that us as fuel as

other themselves reality places like that where the to taken going tank be natural it they've connections. places natural might on gas a to new the limitation California, in you again, just can propane the seeing U.S. in some So like they've Berkeley, are it's you see anyway. like – get edges, The of we close here taken it is are – it on off gas not

propane off generators mean, are I fruitless well. So it's a effort kind of the of as

actually gas. It's need don't don't you pipeline pipeline. you helpful, need but So

there America natural outside gas of home be generator natural think is be going propane even that in is I and to growth of C&I part and the North again, to gens standby plenty gas world our there So, gens. the – are is world, of going view generator

comes final with our you. And from Thank Boroditsky Saree question Jefferies.

Your line is now open.

for Thanks me fitting in.

the standby year? to So a magnitude how only you the of you're of year. in about half second home in commentary, the going you about back thinking first the half frame of just the talked the the Could decline decline just modest help

frame necessarily didn't out. we No, that

at looking more I full solid company look year. half the – modest to in returning when second only in a decline you resulting the think total is growth what total we're the for the at for company

a sort magnitude what So, get total for – half the the that means on you of can first of basis.

as to to that in half. on know C&I You continue going strong based that comments our is first be the

our So be the improving year you'll business sequentially see We'll throughout clean energy growth in XXXX. there.

of for sort the you leaves some gives framework put basically all that together. – to so pieces And you how

that with it you kind then sales go provide puts of thoughts Okay. on at than And and you where XXXX faster then, where when we guidance. us from this end from estimate grew any seems home penetration an gave that you anticipated a at Could of standby the like on there? year out rate could

we're Well, around ending. pen we X% anticipate rate is year, where this

guidance these then, as we here. and people the how So, have, in we – that's awareness company particular point not materially the kind been say and cycles on our it have haven't in ready off we off we have going – you the off, next didn't out, that previous you dramatically the step of functions levels down up to work are dramatic increase Investor to you actually, of was update baseline baseline it level, higher distribution doesn't long going and with have of Day, I comes know peak increase kind then of did change normalizes up, Again, level. for I that level our long-range who straight then are the a new that at the in around where of guidance. than growth a would step And and we peak to growth. baseline you are happen kind But standby, cycles have to learning a a comes line. home the growth

have grower. it's targets. long-term of We'll review function a So more step the to

But another long-range are We – them prepared terms morning. year Day are Investor not update not to sure, have if to have before guidance. then going of we in the this we'll next for updating

Thank to back remarks. closing over like Mike the for Harris you. would any conference turn I now to

goodbye. We in you mid-February. again joining our to fourth look We everyone and Gap] us Thank for to [Audio morning. thank want discussing and forward this quarter

participating. you. This you Thank Thank concludes today's conference call. for

disconnect. may You now