Generac (GNRC) 3 May 232023 Q1 Earnings call transcript

Good day, and thank you for standing by. Welcome to the First Quarter 2023 Generac Holdings Inc. Earnings 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]. today's being that advised be conference recorded. is Please

please to conference Mike over I Relations. Senior would your the like now Sir, Investor and Mr. And to hand speaker Corporate Development ahead. go VP, Harris, today,

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

statements. call provided risks We contain made by in Generac today Certain will actual forward-looking forward-looking well information statements and and this on other or our cause those could from these statements. results as presentation involve begin that forward-looking statements may during differ commenting to from by uncertainties its as employees time-to-time materially

earnings filings associated and statements list see for identify expressions release the or Please SEC a that or words of such risk factors. our

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

is US these Additional measures, regarding measures filings. and information our to including comparable earnings SEC release GAAP available reconciliation in

the now will to Aaron. call I over turn

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

Our due first shipments favorable continued adjusted quarter margins EBITDA our EPS and better globally. cost expected were price of products and Adjusted to commercial industrial strong dynamics. expected, than also net were higher to adjusted than sales primarily EBITDA due

expectations with field quarter. Additionally, at declined inventory levels of in the our generators rate consistent home a standby

XX% sales quarter. as overall the to compared well net a core year strong of elevated products. energy standby million, Residential declined was a backlog prior decline the That also of home in generators, during by Year-over-year, product as sales XX% decreased standby to clean decreased as quarter. for and inventory includes sales excess and XX% significant benefit generators field levels for home impacted $XXX

to reduced leverage, These unfavorable channels offset affected lower quarterly and margin headwinds driven price mix, XX% and favorable home standby margin mostly all-time Global with Adjusted dynamics. most continued in internationally, operating energy domestically. sales approximately negatively were by investments. an record, significant growth cost all regions shipments and strength sales EBITDA increased C&I product was by by technology

U.S. more demand strong discussing standby significantly was of power category well first multiple while detail, long-term were in the tracking highest larger regions, for indicators level quarter outages in results began we the Now during the XXXX. declined above of first marking the the the quarter outage power outage the with quarter quarter, first quarter. outages average baseline leading exceptionally for our in shipments in during activity localized our since activity several Baseline in home

Home consultations or almost growth states. sales leads in year broad-based period were up prior all significantly over experienced the with

fourth were which softer approximately seasonally sequentially the and record continued is coming first during in unusual off for quarter, we're of home flat Additionally, a quarter, strength highly this the of month the April. as particularly consultations quarter,

For first than baseline new times in four more home period standby the category a historical perspective, quarter XXXX, level higher than and our demand. the home that supporting were reached of higher generator belief has consultations comparable

of the end an year. XXX residential prior from Our dealers quarter, the the than XXXX of more count increase was at dealer over

continue While expect coming dealer our bandwidth. this on our a is a sequential installation to grow to significantly as basis over slight seasonal headwinds, count years due decline we expanding we focus the on to

in multiple year the the to in deep the notable period, in comparison prior installs XXXX. included a prior from proxy Texas strength a for which are were related Central by region the regions slightly and which backlog year of due activations declined the in impacted that to Activations, severe weather South freeze saw challenging

our the decline and remained quarter sequentially number levels ending Days also with elevated. line quarter of quarter, units of meaningfully inventory the norms continued the to inventory generators historical The decreased with towards but number falling normalized relative to of and field expectations. first more during in prior approximately field standby in home the

decline to second to demand. in orders market inventory the higher field end the expect standby further shipments quarter, of in We and resulting relative lower another home quarter

more second half as the levels of we returning to the Before enter normalized year.

to increase our dealers the priority Our talent successfully signs as grow help home generator installation is initiative which a network, businesses. standby We’ve company. remains of recently momentum to their capacity needed talent we the find for early launched top dealer our showing

this key electrical contractor’s community recently markets, contractor also elevating the with We training brand resources Florida. a providing and Texas partnership and in including further Generac the trade announced independent electrical and the group, within additional

project we designed further optimize dealers to to simplify product Additionally, we These sustainable skilled tighter installation are process. of number a are identified installation provide opportunities that labor challenges, for help but in markets. project focused several solving timelines, addition enhancements, the related overall initiatives also management improvement only on not term capacity near have believe can solutions to

advantage continuing competitive Generac’s our scale, expand market. could and distribution standby as in to home We further believe well focus these overall solutions given the expertise unparalleled as increase

mid-February, home Consistent call the first fourth shipments quarter we standby with in provided our quarter in the current destocking channel mark the on the expected earnings process. comments trough for

field robust far We returns normalized thus in outage support home this levels. average continue further growth XXXX, expectation. above to return and in growth in year-over-year environment consultations to year, anticipate the to second a of as The half inventory the sales more

range to reliance to demonstrated as they face accept and the willing are supply unanticipated by power liability, The are to less as have utilities has actions major threats continues own of driven that weather, in their display environment was and spikes power deteriorating been off on level and longer they're improve of businesses the in taking events demand. outage shortfalls limited severe quarters, that recent electricity on one grow, and to And operators Outage full no grid resiliency. consumers storms.

some residential technology energy our I'd and like provide now commentary products on solutions.

us these unprecedented to levels support. markets to number a demand not has This reinforced our area attractive highly by that in by of for temporary supported are strategically facing success market business of energy headwinds our clean we're policy strong end offerings, important While and our residential changed. opportunities access gives further commitment of

We expect this for services billion. digit resulting energy grid EV market grow XXXX, a and charging, market MLPEs, strong opportunity storage, the CAGR addressable will through management domestic combined to more double $XX in monitoring residential and at home serve than of solar

the year. the to power During in pressure products, to of cell under rebuild for of we these shipments our last quarter operations large and storage the quarter, first customer continue systems remained that following energy cease a of add as loss distribution third

progress our channel customers upgrade care program. we are partners participating to of and taking make SnapRS in committed Additionally, good campaign that quarter. And to the we on our continue in remain this the

positioned appeal efforts, to residential continued market share feature offerings. as smart consumer gains. addition management In the storage sales, number positive our rich energy momentum device with capabilities ecobee’s and highlight of product resulting a remain And monitoring well of together thermostat and awards, in our that our

release of latest will ecobee’s in leveraging Ecobee’s and our already devices, which initiative, strong ecosystem. residential customer and expertise user the satisfaction single experience validating the user development. interface scores of of glass have central expertise act hub that as since pane our heavily improved our generation energy XXXX further We're

resources ongoing increasingly grid. to announced that another enrolling We the And EV to part management evolving the value facilitate of consumers. to of of remain a customer next tailwind to business the to generation leading on challenges management prior of the noting and load strategic and recognize strong our in innovative growth energy EV off sales area policymakers as utilities flexible potential quarter as remains software services robust policy solutions a the solution We’ve and interest with low transition minority grid. this It's be digital year provider also our believe help regulators our investment of power a facing will load support recently worth grid offerings base. effort

XXXX, services We technology from continue $XXX deliver $XXX for gross energy of expenses long energy percentage to for expected XXXX. solutions term to and a home year technology million continue and our and of a full software for Operating as sales sales build are in elevated be million success. residential the hardware combination between foundation to we to expect as growth, position to products

on part and business, an product the are with four focus towards part over energy most new the as create the solutions, past value the our residential the of for we leadership years the focused eye integrating deeply tightening acquired running this ecosystem. we've on With our can where consumer believe more platform teams our we of

future. competencies support, and improved With that develop with become sales products energy competitive and Smart our we and marketing, evident logistics, we the generation can time the global focus to leveraging as in and customer create and distribution, Energy will sourcing services and over we our by lead believe home advantages technology execution, continue core residential around

the provide significant I the and over prior sales and over C&I commentary have products, quarter. which gears grew in Switching also product want our expectations last few to all-time record. the on again to XX% once some quarter, as experienced Global products multiple end years, mobile the C&I outperformed our growth for levels backlog and at And backup world. power for support year products of megatrends these remained the quarterly an at around the record demand

quarter. quarter standby C&I significantly the North C&I and to equipment, rental distributor grew other backlog our An in trends applications. for national rate. channel across customers of channel for by distributors, strong grew Shipments in first channels, order at Shipments industrial first also the beyond highlighted including products a direct strength telecom again domestic generators all and increased American

ongoing improve in robust sustained power and and the market nicely for on highlighting strength share important channel. Quoting basis, year-over-year rates and demand gains activity our backup close this remains a

the generation harden as power at first rate existing shipments comparison, their several As telecom North as to telecom to increased a our backup national their to build prior sites quarter larger customers a and strong customers American leading Xg out of the national networks. compared during provider continue deploy robust to generators year fifth of the to market, prior to also

in remains and hub further channel and investment increasingly critical wireless shipment a secular for resiliency. in expand, customers this are power order communications year, in tower patterns infrastructure trend the telecom backup of in of for to the as the nature While lumpy expected half be second certain network counts requires global

critical also customers, construction This of that to refresh will infrastructure towers power necessary need these We of essential and continue in secular growth equipment as products independent will trend mobile be experienced by national for supported investments tremendous their And to for they require projects. another the and significant is complete. rental and our end market expand quarter light years fleets.

from an during Natural gas in quarter traditional traction also We once projects to as continue applications increased demand believe again of rate. energy first grid these at grew drive new see markets and the shipments market opportunity products these of in beyond growth exceptional expected exciting we generators are this solutions. volatile for used standby emergency the concerns early innings to are as very stability further

Additionally, the operations. the of customers to for the need have offerings models been direct which capital innovating business traditionally add that their to as-a-service initial businesses generator marketplace, our reduces required the large outlays developing are this vertical for in resiliency dramatically by

robust growth year driven over total first in key sales macroeconomic foreign where continued remains shipments and a amid regions, and during growth excluding year strength XX% the geopolitical momentum sales was Europe, the with currency. impact homes most net for from notably top XX% uncertainty. power core and across of increased the priority businesses by acquisitions, ongoing security when Core Internationally, contributions as unfavorable quarter, of impact

direct leverage cost meaningfully to regions, as margins growth in connections. new growing for dynamics, infrastructure due has sales the our price see higher experiencing rapidly increasing an favorable emerge EBITDA where and sales market we're homes with long-term on during size our segment power country its volumes. backup characteristics the a also gas such number India, performance, businesses also positive for broad operating beginning with and electrical International momentum quarter, increased of and of Supplementing unique potential solutions. developing we're improved primarily population, developing international coverage, and This to natural

opportunity. address solutions We are large currently market building to out C&I gas and of this our residential full range

a to ownership of storage XXXX. the in Pramac, the remaining network during acquired and acquired along distribution Pramac our in is expansion, minority driver solutions Additionally, since in we energy key early sold first across leading stationary portable the interest of bringing through mobile been a our majority world. designer successful we interest And XX% and the manufacturer XXX%. a with total it quarter, international broad generators, company has a ownership

this presence, our Through focused element important Pramac the aspirations. an international of combination investment, strategic growth global and has become of

made own our of meaningful As parts and side its our in in experiencing the we've energy category been early innings on is that product residential the of evolution very global evolution, business, progress technology we've here similarly C&I XXXX. towards

our and and gas our solutions, added now In connectivity energy natural and energy the generators for stationary meter systems, beyond portfolio. solutions addition we've internationally behind mobile storage storage applications, to domestically standby to advanced both controls product

February, international, commercial, Systems, developer based supplier In Storage REFU for storage platform we customers. German hardware and services a software, advanced products, of and acquired energy and industrial

new partnership of meter announced North energy supplier with We our systems also in for stationary series branded of the recently the market, behind American storage C&I leading storage solutions. a Generac

positions in strength And solutions represent These the of technology around robust. our initial rapidly and energy extremely compete C&I these key coming our long-term our to opportunity storage markets. categories existing ability our I'm confident is world within leverage C&I in the developments into product our will to in initiative The remain growing years. advancing foray capabilities for this market, for a Generac

quarter closing to That reducing work the term In progress categories. with focus our current inventory results overall drove ahead continued energy execution product as we in our of making trough as we're represents fuel the are in for near pleased categories believe performance first by global home morning, momentum sales C&I said, on levels. expectations. we power systems. product impacting prior we're a extremely in to our continue rebuild And addressing that encouraged this residential storage cycle, residential the our sell our And standby the challenges that we're we

incremental in the robust support consultations standby activity of expectations in in outage product addition, to over growth here year. the sales provides year so residential year strength category in level half our home XXXX, the In far to power for and home resulting for return generators the of second

EBITDA the resilient, execute solutions. to more our success on energy Importantly, for sustainable margin long-term and efficient we're to maintaining our as term full guidance, year lead near we initiatives, position in adjusted our net and sustained sales evolution Generac and mission

our the like York? first quarter now results, call XXXX. I'd discuss to details to on York, to and over turn provide additional for outlook

Aaron. Thanks,

Looking unfavorable in at billion had contributions quarter. year quarter from acquisitions, impact the on as of approximate quarter revenue $XXX first first more recent combination quarter. XX% growth during million detail. and XXXX The to first favorable currency the from results an in $X.XX impact to the sales Net during XXXX, decreased X% prior net of compared the foreign

by residential to declined product consolidated $XXX product year. for the net million sales the to at first Briefly looking quarter in prior compared million sales class, $XXX XX% as

in discuss standby shipments Aaron home power storage detail, residential systems As in and generators product lower sales. energy of cell growth this decline

Commercial distributors, in based the and million domestically, industrial telecom of and during across quarter. for internationally, strong beyond equipment, acquisitions and currency direct particular quarter. was from industrial year unfavorable for first quarter standby sales regions very were broad most core to nearly other all the The growth in channels product applications. by strengths sales national with foreign to customers rental XXXX fully domestic Contributions of increased offset compared XX% as million the prior impact the $XXX recent $XXX

service to approximately this services XXXX. products of to The million as $XXX increased Net growth growth sales warranty acquisition of approximately along the X% due growth Core extended to additional revenue offerings, technology parts growth sales service for aftermarket service energy was capabilities. and and in recognition. with primarily quarter compared first million in XX% the of $XX XX% other given environments electronic our for contributed continued category their and

year. of together the logistics, to reduction margin to prior impact efforts. with the and year implemented Gross pricing from compared in cost to offset unfavorable sales first mix, standby XX.X% profit plant commodities, mostly mix a by costs of XX.X% significant home actions previously other input decline lower was sharp due This compared efficiency improved given is realization in prior quarter,

our XX% and million, the increased Operating costs, year. earnings and of interest $XXX as non-controlling expenses expenses first recurring the million employee compared impact driven net defined in higher marketing, the in sales the before net compared or This as million XX.X% as was $XX sales quarter of to by first XX.X% to is quarter acquisitions. prior for primarily or certain recent deducting Adjusted in XXXX. expenses of and operating EBITDA release increase regulatory and of from $XXX legal promotion

higher a percent prior sales as EBITDA to primarily was expenses compared given the percent lower operating the of The lower the driven year. sales, by

total financial segments. our results segment to year. including intersegment, briefly to XX% I'll the discuss for in Domestic the sales, prior reporting million quarter, sales two decreased as million in compared $XXX $XXX

for quarter. acquisitions of growth With revenue approximately contributing the the impact X%

the prior segment of quarter due mix and reduce million, margin total to $XX the domestic EBITDA sales on was operating a representing shipments. compared the sales. to in for X.X% Adjusted lower XX.X% in unfavorable million EBITDA The $XXX margin year was leverage primarily lower as

In actions and costs. energy factors the offset negatively previously were input acquisitions, of during by partially and the technology addition, the growth realization continued These margins impact of quarter. affected investments pricing lower implemented

to total prior increased segments excludes including sales year. which currency, million in compared prior the compared the the approximately year million Core International and the acquisitions impact quarter, quarter. sales $XXX to as to sales XX% intersegment $XXX XX% of increased

higher Adjusted of driven favorable segment deducting non-controlling before primarily prior of was million, is EBITDA in volumes. increase the year. This operating for net dynamics by price compared the and to margin $XX for as or improved sales, interest cost million, XX% sales or $XX leverage XX% and

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

was our of the income compared for company release in $XXX quarter the first million, for million net disclosed $XX GAAP As the quarter earnings in to XXXX.

the effective year current prior or first earnings to $X tax equity due The quarter. million increase for as expense rate and base the approximately lower of tax during an additional income rates. current to higher or borrowings the year rate pretax in XX.X% was prior current a tax effective The quarter from rate of to on due interest of million year the million interest includes year. effective income $XX in taxes net lower benefit $XX GAAP primarily XX.X% compensation a an compared year in were

basis in in share. $X.XX was adjusted quarter, compares Diluted year. on company, of first net million $XXX quarter a year our or release to the million share. $X.XX for the GAAP company per defined the in net for to as in for XXXX $X.XX This the $XX or prior per share Adjusted year of income net prior income was income $X.XX compared earnings the current the per

$XX used prior as in quarter. to to compared first last million in earnings operations $XX million negative cash The $XX negative cash flow negative million negative was recent a free Cash in million was as $XX And a payment as same of year. our flow planning modest release compared related tax tax to $XX million cash the year to defined primarily earnings flow free operating due for in and quarter decline acquisition. the lower was one-time

This quarter by lower our and rates the stabilized was inventory in year as for production levels. receipts mostly capital offset products residential reduced current working we and investment material

at Freddie the $XX outstanding Storage $XXX use acquisition. one-time million REFU Outstanding $XXX debt to tax payment year those the during a a was the $XX of as million fund from end the quarter, the for basis. $X.XX million gross times planning current X.XX borrowings on debt debt quarter at tax proceeds billion, we quarter cash increased Mac leverage and in million an purposes, buyout, the ratio as end Total reported resulting of of the first

on further outlook provide for our now comments XXXX. will I that With

disclosed our in the year maintaining XXXX. for we're this prior press As full outlook morning, release our

standby the decline in quarter, year, teens growth by category expect be residential a in the year second to year. continue in second inventory sales of range returning the half home to the the product to high impacted compared field prior before resulting the We in full higher levels will year-over-year

digit year. up to year single Our of outlook a prior sales product challenging half the for come grow the mid second comparisons rate the remains increasingly C&I during at year to as high in we unchanged against

which to to currency. from approximately includes full to result, prior continue X% year X% minus as acquisitions and year, a for between decline sales we the XX% minus to foreign overall impact As to expect favorable net X% the compared

a guidance does That with average. outage this is during Importantly, the Consistent of our power assumes of approach, level historical benefit the outage this remainder longer the term not outlook activity power year. baseline a year. assume the with in the event major of during line

impacts demand conditions. power be macroeconomic assume meaningfully does deep outlook this that standby rather for that, products spending to overall outages, Additionally, XXXX. during than prolonged, Having a tend environment recessionary by not consumer our said home more driven

weighted. We sales being and to backlog. sales more continue to year first inventory being normal field half and the the approximately With excluding net seasonality consistent the excess weighted of with half second weighted as sales to the expect XX% normalizes be back now overall in approximately half in XX%

expectations full for approximately year anticipate Our of points as over margin levels. unchanged, gross also XXX improvement gross XXXX XXXX basis margin the we are

home continue improvements expect higher gross For of overhead of with mix, and first the costs, improved quarterly realization move initiatives as input We quarter to the reduction our lower standby seasonality with year. low cost point we along absorption, sales we anticipate sequential throughout perspective, a margins shipments the year. improved resulting generators, for mark will from

expected margins. than margins first approximately to with basis higher progressively points of half are half XXXX margins gross XXX XXXX to throughout the second be improve year, Gross

our executing strategic supporting continue and initiatives focus to end investing future strength innovation, gives confidence continued markets growth. The to heavily the for us on on

expense continued the approximately be net As amortization we operating to these excluding the year. for a percentage improving result of full sales, expect leverage with year of operating intangible throughout a investments, XX% XXXX expenses as

the in operating was XXXX. improve higher primarily to extent a improving seasonality a volumes gross we expenses and for before still margins of of gross XX% and by expectations, the leverage margin to full adjusted expected margins perspective, throughout lesser for significantly on adjusted approximately driven sequentially the that XX% deducting EBITDA margin are discussed, sales year, second interest, year. these improve the non-controlling previously operating expected to Given to be expected EBITDA expense From half

be points second half year to adjusted detail first and for providing XXX We're flow cash updated margins. free share modeling basis guidance consist expect than XXXX. EBITDA half to higher continue earnings margin also with adjusted approximately per we Accordingly, full

effective is XXXX, And year of tax be the to previous our to expected for XXXX. XX% tax rate as XX% rate our GAAP to XX.X% approximately compared full For guidance XX%. GAAP

The mix deductions, year-over-year income share compensation of XXXX and foreign increased based lower tax for increase high higher is jurisdictions, expectations by in primarily and tax to higher income compared XXXX. driven and

expense of during pay as Interest expected loan Interest is in and approximately additional a expected we the half assuming prepayments revolver indebtedness. rate elevated be portion moderate is the to million, principal $XX and year, And the more still assuming year. no term back our XXXX. SOFR of cash rates expense swaps down our throughout favorable, flows outstanding to become interest

Our REFU to the net addition forecasted is be due million million year. capital million compared XXXX, for to forecast are X% to $XX to expense. sales of be our expense a projected approximately the $XX expenditures previous proxy of related storage $XX in guidance Depreciation now to of depreciation the

at expectations expense are million during approximately amortization $XXX intangible Gap, unchanged year. the

Importantly, estimates add to net appropriate rate. should at expected adjusted be items effects tax reflected using income adjusted per earnings were this back share, XX% and arrive the net

disproportionately to seasonality follow cash is year expected the second Stock flow compensation free million $XX historical towards half is be expected being are between to year. Operating the the in to $XX of XXXX. for expense still and weighted million generation

of off capital flow free at moderate to cash For over year, net adjusted peak levels. XXX% well levels will the strong conversion full be working expect income we

XXXX, decrease average compared in XXXX. completed year weighted shares, share is expected full share reflects million repurchases in diluted as approximately XX count to which shares to to were XX.Xmillion that still Our the

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

Instructions] will Tommy First come Inc. question Stephens from Moll [Operator

open. Your is line

pre-pandemic close and you morning, updates about talk to year, for my progress questions. there IHCs on Aaron, Maybe prior or as those Can structurally you. in to pandemic? a of taking is through pre it's looks the some wanted there. do period. compared see the update hear somewhere a like? you on level? to in us the Thank of related landing the range topic, Or on good the And constructive I And here? something thanks rates different it Good you the year what of kind

not we fact, thanks. been very sales Tommy. the last had if you the in the that consultations. we deep that record freeze, actually, record in it for have so would volume QX, as saw lead if was a QX, the QX it copying, We said, would been was, have Thanks, a record Yes, QX we -- Texas, out, were when by for XXXX, encouraged take

Just baseline. for the Yeah.

So I as pretty mean, that fact, was April here it robust. through And was carried in it in well.

enough, talked interestingly previous we've like, call. rates, about this Close

ago. well been of our about but year pandemic, still we're So off pre last year, rates, so beginning close those bottomed a of they have recovering, kind they

nicely perspective, ago. those close cost from we're rates a up a off from So year

we continue previously, is as will clearly we the pandemic mentioned an times year, think anymore. see go, end as pre getting big to this part the levels think down, far we've lead that to As to still by we've do got a we recover of which And story, ways a issue back that, just of isn't progress.

we So, is thing how we'll our homeowners. course, seeing year, the are softening there, of there’s know, note with potentially side half as watch, the just You rates? impact for in back as we're uptake rates options does of continued a financing that close a close in seeing economy, the

QX. program on And the in incredible down of, spite had you in in that's residential dramatically category we our fact, financing In know, XX% being the growth quarter. financing up was

of to out as the maybe are a option economy. there spite of way concerns that there looking are in that know do we at as consumers a slowdown products, So the around these an in financing, their improve affordability

to giving And what levels improvements don't continuing guidance return not or at that's close I quite year. by prior see there again, the this our think sequentially, least specific are think pre but over year. the we that we'll contemplates. pandemic guide kind of So, not to on don't rates, I that

we as us to continue for upside that's there. maybe So, recover

Thank our you. next please, moment question. for One

will come Michael next Baird. Our Halloran of question from

is open. line Your

everyone. morning, Good

we've York of reference So, storms an a quick of because put that obviously when prepared piece an to certainly you Would negative out the the lot level how from home perspective standby positive so let's just to and train are that high on of of you've Aaron, into to tracked it the maintain stick know, be pretty demand positive side. there's heard maybe is thought the the on why questions New in just great. you seen underlying kind remarks. that moving had stable, you the also But in confidence a think and but around things that historical underlying sustainability economy, can commentary would of And, understand heard made positive IHC concern perspective. in love the certainly half you know laying the I perspective, kind from be, back going why past, or

think deep what here Yes, got But confidence the for to And around half us, that's gives second. area the pop some trends, of these I'll obviously I Mike. of focus us and just out second that. year. a talking an And in we've experience the

mature it, consultation a those they it, product XX actually period leads, call indicator leading the the days you So installed. to category the of sales think us, over about when gets and a which we important XXX are when way do from to for

we demand it kind in good market of we think a term terms were. next have a quarter, of quarter So half, near end as we the visibility, perhaps, the view right, and think on that pretty

under because That destock market right, serving place. coupled process this shipping like take with the we're market under we're to demand, the and we're right allowing to fact that now,

home relative standby been the of would to shipping shipments low, QX, So pace with demand artificially pace, that, what been, the could say had just we matching have kind I right.

of that, out here. were talked we field So that about of because step inventory challenges the much with we've

year. So you that's have debate, of going as get enter to that put improve, normal those the second we're those said, to going to there. we're think we as levels back together, and We more pacing that's something that we half the

is particular, half it's levels always to do normal of return a more installations. challenging the there, right, because category QX for difficult year, quarter to the we the also So in normal have just seasonality, first you

the many In actually driven with weather to fact, challenges also able outage QX. of some we the reasons provided saw why product by them our terms environment, crews this install of in being so installed consultations some home QX, to in being

irony So to bit so future. a of it little the an we that of a and of bit look take a kind was out of though, there. it, But

value to that got term economically I And broadly, Speaking and XXXX mortgage, the of in you or in of back people backdrop, to that obviously, a you your are XXXX, the not maybe same experience in happened this can right to economy be home then. the the -- careful our then your recessionary, housing of prices of when have prices, kind that now would values, think, ’XX use, relative concerned but point Well, collapsing necessarily I the it's to back kind softening home kind I pullback at I about category, the argue with this we're in slowdown ‘XX. last to the mortgage, particular, directly look of when say rest in I experiencing just I economic more housing housing would is experience type related

we ever residential ever, time, pegged category, a like, back was thought there pegged the investment, actually what right, our business in if this And ticket our item, would for worst get when category ’XX you discretionary at been back residential think we that tied would part to in you a as have that of have grew we this then. big ‘XX environment

of of goes all, over of the buyers to age category XX. -- mean, I the older XX% the there's a first I so category right, bunch and are for reasons that. of So,

I I of they're of don't insulated increase tools, we're want so our the pullbacks. necessarily in economic But from say say to less they probably would affected. an use the I seeing also financing mentioned, And tool. use that are financing

decades and I outages, still today So interested company, think my I three think still of have almost over things the every category power the here, thing economy is become that in category day the help week. buyers. biggest we And that shop some of who the homeowners the time the Trump are

were of that terms maybe vacation about, you're get becomes out, home list, or you thinking kitchen power's to a top the go family your pool home, that reshuffled, right when the categories new spend your we -- or gets what priority mean, into your list. even the I maybe value remodel to a on, discretionary home the further of in generator going down in or your And income the infusion. put generator equity

why relatively I three over category just we think think of last the has largely. how been that's think decades. the I resilient about anyway, kind So And it

our Thank for question. moment you. next One please

Jeff will question Hammond Capital of next Markets Our KeyBanc from come Inc.

open. is line Your

Hey, good guys. morning,

maybe came a just what if in what the could given of think number one, I out inventory Thanks. just looks start? from you there, of quantify you how much can the raising channel strong XQ XQ? in commercial like kind sneak and prevents And you in Just, think bar that you the

there. mentioned inventory, I describe, the inventory thing right. meaningful Yes. the inventory, questions, on field we've way and the big Thanks, Jeff. the to before at we a was That good All of this it decrease numbers think field look the in days was really

times, in So February. we we of, to That to double where kind I thought about last we here think, X.X progress were we QX third year, made down was needed of got when to quarter, we mentioned, kind about in and be. call the the we

here. wasn't history, progress. that seasonally installs we of the that of at seasonality, way said the of line, “normal”. we the about Now our in a linear pull means. Because is the we're also looking making the But and categories, to debate X.X primarily good that normal think down times, all That's be QX we're wasn't range some There's kind somewhere going X.X what to it of in where just want times like X.XX end demand robust. normally we're QX, at from just it right in works, we linearly knew going And see to we to end we're dropped remaining very we X.X be. kind feel we the the to market fact being by buoyed again, one to lower But progressing QX. in

like going we get get is So this to there, we to to we're going to the be, where down line. to feel need

why would of C&I. not the didn't kind QX. in outperformance kind say outperformance primarily guidance take I of reason The the why up the Now, out, on came point you from based just

internationally business Pramac crushing So business, we significant we part our now team, been that last expansion here own of the was which acquire to which C&I XXX% our were awesome, as able is over it, seven a company especially of a is years. awesome. they've global And

that some talked one the couple of in of one right, always marketplace. there, of to our lumpiness about the drivers, to said, a big is back major as channel some telecom of the telecom kind business. in got there verticals we of all that and the as of companies, the are our the half year we've we that a we've products, those delivered But co-locators relative And seeing the us, product for accounts get wireless installed partners And well they've in serve lot of now. kind of

looks through, So some so like. that maybe they're is they working in that maybe of pulled got it what --,

spending cycle right Xg to generation spending for -- CapEx them to as or we what about fifth next of kind on going now they they need their all networks do the CapEx as talked terms and technology generation networks. technologies. secular and this indications, is all They're forward, harden about But think building their a in telecom, to of

really the that. that's simple really from up time. There's But see the we the And It's time kind a in some And that's, answer. related back why half. to to we think just, moving of so That's that lumpiness it. it's pieces we kind underneath didn't really guide that. that's take of just

you. Thank

is from Glynn your Oppenheimer, come of will open. question next Our line Christopher

consultations significantly morning, home all states. almost the the Thank wanted you. the guys. to you up for Good in I about mentioned ask -- HSP were

also a into And of second residential in in least you growth Does want to bit. biased if in I line respect bit XQ? expectation are positive then for clarify that in include a that resi growth explicitly see that So not, the Or top the XQ? you little dive half. to from

the I'll first. Yes, are thanks, quarter. a return that third growth in seeing Chris. starting Yes, Maybe we just to address

consultations, what Xx pre So was about I base. of in that around the met broad is home off from based, just and you pandemic to pre we expectation that kind And up the again, pandemic, dramatically periods all consultations almost think really Almost of what this is encouraging general pre this, as know, think, we've the period, today. is commentary you I residential. in way very the to mentioned recall, that specifically, and pandemic really being More may that right. different from more guidance states,

and market. of kind you for X% that's of step stress when enough broad again, today, to at think $XXX,XXX back, that that a I fit we're value. pandemic still us can't at we in share I opportunity. billion of Every nature than market family, $X And the the look category you single encouraging greater product And this pre is home I speaks to when is standby really XX% journey, think penetration less growth U.S. a than generators, of is have based House and in is this X% penetrated just where you it

So growth Canada when obviously also us, look of there examples we that and and at as well. the in about think the of we experiencing states, ahead a couple opportunity we're in

been homeowners I talk seeing, the grid because seeing have of of been the cause four also four think on for people category can that what what's whether well we're deliver, what those ago, outages outages causing and we So has think states, kind in different outages. Canada outages. we still And outages, the territories is years largely, is ago, to struggling much it's are and behind and most businesses what right. is drove provinces increasing the as But years because to as fire here and in as us U.S. of they experiencing, also today those frequency from and I what's just the duration have

happens what through that electrify cooling transportation, be demand. I cooking, rapidly. outstripped over is Carolinas by Christmas to display on in Christmas This was everything, and holiday. you're seeing full heating, So And over the the seen very mean demand supply by race it we as

demand cold, up so was with had it And Carolinas got keep enormous heat system the it amount struggling turned that demand unplanned. their heaters, because with system baseboard it. the pumps surge electric created on everybody in that companies which an to utility on up and of So the keep that struggled their to were

to brownouts order the system they to So to had rolling resort blackouts rolling up. in keep

our and I just also think, that of and step about talk five our accelerate the so highest part seeing of kind when let's think, back, story you see as between the growth we rates. growth the growth, just look most And we're we a rate difference that's states, five And of years the a top today top going penetration think the basic where four terms are at, penetration -- forward. in I from I ago being states standpoint, states

not So like market to the a you of like, saturated in it's you states, continuing to the grow. where of get point kind they're

we if say, time. question states over point the it you penetrated, it I that an top five years, growth standpoint, evidence have the almost a over look several XX% five that also then last from a at states the seen might top just you always accelerates, they are would emirate definitely fact, is there's tipping to, In maybe state it whether and gets

more very So continues to to it's the rates penetration become accelerate category businesses. for the continue to as to how And as and apparent awareness to grid this continue around these almost deepens. interesting homeowners see challenges reliability,

Thank you.

JPMorgan. Our from of will Strouse Mark come next question

is open. line Your

very year? Good go York, imply of then questions. benefiting and on I of this regarding our the And based price is the much morning. Yes. comments does wanted gross that pricing, back guidance of is what action, that for comment future How your C&I. to Thank to pricing taking you action kind margin. broad a the resi, kind

first board. least at the applied for it across the for quarter most it's, Yes, the

price the side, of the last June kicked X standby On home with resi side, that and in increase particularly XXXX.

standby the here were there side, there C&I So XXXX. them the on in then increase should We But And that process price that continue we're the side. so. home another round analyzing that on the XXXX. number XXXX in increases still of through in in a of of came had on was beginning price

the side. half first yet, So the impact home you I'd as in side as half yet say the the a analyzed some but still more in price on back haven't benefit standby C&I of we

please you. question. Thank next One moment, our for

the of Our Brian Blair. next from Drab come William question of line will

Your open. line is

good morning. Brian. Tyler Hey, on This is for

transition what ecobee, for Can $XXX year to distribution just the clean $XXX And doing each year? energy And to million full the the there to million want of with up to are then resi, power products. what is in kind the -- follow like capabilities? cell a the guide full improve give of clean their clean So direction for energy. some services I of the you to kind products and you potential grid and that,

Yes. Thanks, Tyler.

longevity acquired had at for that upgrade the there, and of So took the the we've we've the length. upgrade charge good through also of -- with the campaign, And last we're yes, we to mean component, with replace that of confidence, that talked companies but SnapRS not year by about we going very obviously, overall component third marketplace. campaign the hard progress a last the one making right, quarter only that XQ struggled to way. this so rebuild I we we're customer that the the execution stumbled working distribution, loss in with that in

a days of the duty to seen markets I we're right? mean, getting constantly that challenging have OEMs, struggle. of that for involved products, think running we're care And would they period that you the marks different It's different with the today, standby Like over distribution on that kind partners we're the a warranty the course rooftop-mounted environment, I I issues tell that electronics with and They've early lot from high cycle of long of in deal terms a of taking can most part. campaign OEMs, solar issues.

lot. a run they So

back year. I of and that inventory little think, to imagine, more that pretty of last a with excited way doing some can So good and it's that. closure of there, green nearly the partner QX the to with field year ground something of the strides bit the for the standby we're degree making market same kind as had us. the distribution in shoots through working work It probably well, We've that through the about There you that. too. kind really We was kind rebuilding as of towards that we some, through good of of had but what learned to to there, our I a home work field was halt some lot we're think the half we're inventory we a wasn't got abrupt there as in business

had rules around forward, finalized. the has and also that market the I to X.X some, NEM waiting of some what's of things? say, throughout credits to for that terms we right see and in homeowners IRA gets recover clearer for to would as What that really around jobs market year. be tax some that the does distribution lessen So And and going continue mean new partners available to

which our alongside here give well very great. launching line to well. year, breakdowns really has thermostats. of really doing Already some I They're mean different to is half received obviously, cam the channel partners smart in second going tell called not today out We're being of excited remarks smart of today, which the smart sell a pieces, doorbell about. the we're the that that by be doing specific going on product they thermostat specifically the prepared in we are but that we -- can you been ecobee, their

well. placement excited half do there a the will where some the have second had very as And in that of They're products we've to nice these some year. we'll of load-ins carry wins couple

story here that's in also low XXX with that continue the about of we're then base, rate growth of guide and we And the in but I again, services previously. grid talking QX. a them there's about potential and operators part about nice So of a small here to manage a bridge the talked digital but of see -- these XXX to still lot off help a a grid to solutions lot of base, shortfalls importance types of utilities of discussion these growing meeting that

potential see at a Concerto that the way -- to like services They another grid of our something when heart you deal spikes just see as platform toolkit supply they with to team. in is tool our in platform And that shortfalls Concerto in see the demand.

So guess that, those services momentum come in green off bottomed. and the think good it's ecobee I shoots like feel we're businesses the We to bottom come to we the but going in on QX, more I ahead team. and for message here. good all like things

from Our Goldman Jerry next question will of Sachs. Revich come

line Your open. is

about the embedded context quarter Good for just Yes, a could talk hi. outlook folks margin towards versus promotions if morning, cost maybe I'm fourth you just in of you guidance back doing the as some everyone. your well them go not pricing ago. level the of year wondering within doing as year-over-year that declines and outline expectations are

improvement if just Just don't wondering XQ much And margin realization? price the we cost? from how year-over-year much if how That could does expect price that pressure be bridge of mind. in you we would helpful,

we're low XX% range that those QX, is to we're to know used I EBITDA that get by about. back talked Jerry, this as York. Yes. contemplating margins we

talked points just in first XXX we mix half. to so second at standby half, that about XXX half, I'd roughly, basis about say, second is home improve and Specifically, half, seasonally first the -- about and that half first dramatically mix improvement basis half, relative a should second of EBITDA half, points let's margin XXX with, we XXX there, quarter standby that first improve X% right second first in half. function least of as X% just normalize the increase first margin going inventory of get you sequentially, as say, to Home half

cost We improve sequentially got commodities, first continued XXX, we're absorption, half, input are half in its costs that better second that We've there. X% number improvement with anticipating just inefficiencies, half, about second working X% on of improvement. plant first about will a logistics, improvement again, half reductions of

just leverage And much higher then the OpEx -- on remaining that on volumes operating sales really infrastructure. X% our leveraging is the

a like modest. really by that's Year-over-year, sequentially. Most bridge pricing year-over-year have the will on said, lapped So the of probably QX. be they'll basis at I least

just that lot improvement QX most QX and year. of to year-over-year a that year improvements as that of -- last the well improvement will from as drive mix year-over-year more So this cost will drive is

Our Osha Guggenheim. next question come of will from Joseph

line Your open. is

Thanks Residential through much. Obviously, a to Clean go Energy wanted return the this I bit. business as little reset. very to you

inverter the up One the in drives of of the parts and of come the architectures residential X at same complexity advancing lot questions, around architecture fact I that other system. home sort is a think, you're the parallel that's of which time, the

intend maybe wondering give to have if us any some able today those terms architectures. I'm to So clarity forward you you're of multiple in with when might or we clarity move how

it's on that's one bit, focused Joe, a bought a think years. We one Yes, a that publicly of got on particular platform you with technology bit brand-new maybe four great. we And last lot the great little running you've this, a We've question. because talked about but not over been maybe a is this and I quite which space team business. in

lift was so heavy we if as think we've always much focus, -- the companies I acquired. kind with coming first deploy is will, the that all it And knew of there you that best integrating of I technology, on can, the we as to of there think Like is a right? of viewpoint order how that

them at what right? -- value, Some of the out start where add and a trying of figure is more the some level can we like scale to them ecobee up, most

"win", to if similar which about agnostic inverter achieve of it we a I -- fight we see don't right? about bit see two little speaking to just which much a strictly technology mean, as as paths technologies, this inverter VHS a we're outcome, as think I that going right? I Betamax know kind you're as different is

we'll cover are too And I There's available. just which us. think how much go? architectures? different -- -- point or use that different it, in different I to you might we for are efficient path -- -- can it's to of I much architecture Is have best having be of time, your the become way just is too X really calorie over right ground, if which may I the do much clearer burn technologies the that that most think ground think become if that architectures to kind terms about -- paraphrase that will support it

start we could next-generation is you may cognizant DC-coupled, thinking this to market there's that go huge and standpoint. And be we where working those out been -- of have through as be a storage be as solar. we are already have they they could be on want in to we our AC-coupled their products, about that though have inverter storage existing able homes architecture invested homes from to in to And add terms an there

and we do serve put that -- the market. we we a that do a entire -- to So we sure then how existing make keep how can solar market get product that

which -- solar have that. market looking in we need to we If that So only, on or And plus that's that percentage keeps means be don't of still want great. we the installs know installed. Today, XX%, storage rates market That us that and market. to are high a We product attachment storage, limit participate in we is in then at being to to for believe. too we that's going solar we're right? need just the just solar limiting have that a to we XX% focus growing, they're for us, there's new

most gets most there a where finding important. that is value So us add and and economically can pathway us really there get we the

that So an September. on for have that. more we've Day do Investor here come scheduled We to got

figure continuing long to us going sense exactly but we'll term. that that look is most team in just what's discuss in and out So that think to the for I detail strategically the September, more make be prepared at to know

of Sandler. come question next from Harrison Our will Piper Kashy

open. is Your line

taking for thanks And morning. question. Good the

the So a from financing and there's market banking of a lot perspective. uncertainty in

you if operations financing how a uncertain environment your curious impacting could you. of sense channel for partners? is Just dealer the give us and Thank

that It's They they by a points and they're you might that, would are American that their but obviously, great lot card their they impacted pays not. the like different question. be think dealers credit on by programs. they of card, Express a accumulate We largely

to also being of kind credit payments been very They use one has big program path tend paying program plan we that's us. a very a our card to aggressively, to their them level, so see been floor And financing that and dealer kind have the days. to of program out us. allows successful derisk cost the have to inventory subsidized ability It We for we XXX in. want for bring product some have and

Exactly. They don't bear that cost.

really for our floor first days, free plan XXX get financing. cost it's the So they

we for of that kind So them. derisk

if heard direct housing in project-based exposure, they're the to like were their any compression. see much haven't terms we more of a There way right? them of kind of is of challenges going business slow seeing where down, overall and to So in probably more

as that's in flow, of And because right, of as on their a kind they're But go, course, of basis. we've there, progress like real projects terms a out risk talked. they paid

any kind if of or up, view. any where seen directly evidence is we That that around probably feel So heard haven't to progress project were our that's flow they But that or dry that. flow would more pain.

will question Gianarikas Canaccord George Genuity. of come from next Our

open. line is Your

had And it I'm outage good believe not, during yet. a And I my and customer morning. not thanks Hi, question. actually this power taking or call, a for Generac

see on your this there's spasms is related to to projects continues jump it financial sort project-related How impact the C&I may does seeing we impact that if actually How much we're on one with business? previous that regards in my of some markets. So of that that to question just renewables?

would remarks less and Typically, question. late they though our great we want in So is it's It's it a look both you more interesting emotional res reacts as the here cycles, It's spending. to us. how Q&A, right? that's as terms prepared typically at to nonresidential cycle, tends for to be And on react. power we've business sensitive homeowners, because I you of an probably even early-cycle outages so construction business business more tell a see today, an Yes, mentioned of economic happen, that category. indicator

down I could res in think C&I slow category that that future the as in late side, you and construction cycle, Although breakdown. non may is the that see

really step the has second, about for for important telecom vertical think to you us have a megatrend, if one major You there. back

of and a prepared up-cycle the terms telcos. in the in in secular very spending remarks in said the some of market I much for As here Q&A, CapEx

a vertical us. for that's so And important really

outages, power, the occurring of The with much been -- other in is, as just just yourself, I like struggling businesses increasing the one think, backup they're the residential, same what's right? rate spoilage if happen inventory you're destruction frequently. are manufacturer Like particular. interrupting processes their having It's in in of streams. they're outages when It's revenue of causing process, or more things a penetration

around as referred being So part or to a as hadn't it we're the past strategy resiliency, added right, businesses right? of recovery power it to backup thought disaster of lot in their about power seeing that strategies, businesses

strategies So generators with include driving the codes seeing California their seeing sites. power be as and We in or in added standards backup requirement. that to DR requirement backup power that. saw We're telecommunications didn't a backup now are for We're also generator. hours a XX increasing of

health years facilities, what adopted minimum the XX ago and are also Florida in of that spaces, adopt of those We care facilities the have a of hours several those care seeing types power. states requirement elderly certain spaces a backup

Those are codes and standards. new

be seeing the you're spend maybe for future, need to by of softness think increasing the of more construction it's going nonresidential potentially resiliency. in than I offset the in So kind some

of refer in as and that you're spending the trends some in matter. And we are megatrends telecom seeing secular to them these for that infrastructure

on the renewables on project. not we're or necessarily focused utility scale And side, front-of-the-meter

those So projects necessarily any wouldn't breakdowns financing with impact that.

next Schafer will Capital come Markets. Our question from Donovan Northland of

Your line is open.

guys. for questions. Thanks Hi, the taking

of that results them had I kind I this outage inventory these faster rolls, following be you down there characteristics. into in actually logic So if like right East installation find the Coast, will, Coast, maybe could Canada, the thinking weaker, bottleneck will of Gulf get of expected, drive like diversification geographic different was it's was even all than channel help that -- the thesis again a more the where these Coast West geographies and going that of events roles probabilistically, dice, the you kind more there here be under pocket like would you might labor or you the the

your your aggregate in based inventory the above in with that, that analysis, call the fact, historical the was activity yes, outage average. clear on in drawdown expectations, also line clear but was well in pretty You're

have installation there comes bottleneck perhaps the in But is optimistic more it if of labor home I bottleneck more So the probably you back to of really year? end the of we first assuming that lead restriction -- that it for activity you just of doesn't than some like you just not kind baseline for continuing have it this, is going the that generators remainder uniform the down I'm and quarter, above-average outlook in of then is already standby if what's outlook, you having an kind going just get on installation basically that the figuring If if kind into typical the thinking. since the disconnect second already sight was to you or could of don't you're or on there's there? average your

the cluster gave about nature of the there probably also a it, if ice of you Midwest how just they're have because the Ian, some diverse, unfolding geographically you the Coast are to your Hurricane events, from will, commentary an unique these Christmas, signal, interesting there, on We've be then you get Quebec just storms you East data. it'd And storms, a update talked because and nice outages. there's in were clear got

Hurricane how in point. Ian time installations seen -- are -- you was at this at the happening? I the any this Just those and ago unfolding? long that mean point are demand from Have surge a

fleshing out of kind that. just So

Yes. Thanks, Donovan.

in or of that's out XXX high -- than of times the we longer to and what said I say processes when years a COVID sales sales down is is a lead today probably elevation because thesis maybe a was, a as couple as say, I when that elongated installed, that in mainly correct. with there's that that be, longer some it from again, it used so XX, gets what cases. between or sense XXX there elevated it think involved. appreciating days, kind But we've shorter it lead get kind days where anywhere markets from to was you And and So driving some it's that's becomes of process. your ago, permitting there's That's permitting would and aren't permitting time when it were

sales let got So a right? we really funnel. to leads, It's sales those

that process in of the takes So and then they there's at some And the conversion go top funnel. time. conversion process a

year, of that's and kind anticipate second us that weaker backdrop kind reading the as get half to exit in start of the talking gives definitely guide of the that's would the we what second overall. the kind spite QX we about through. And So maybe the that of half economically of going into here we're around confidence

So that. feel good about we really

parts we what the year California, this But not was installers do and just would of on Northeast ground. It's installation was quarter. of a our can't Cal, weather get weather in because in we saw the just terms those lowest the is even bandwidth, just Northern product always Upper and Midwest In also think sets get tough particular. QX in you winter in in the out I aggressive installs that could Cal, Southern install so say that always just and

on -- expanded. in tailwinds are headwinds, by every way. year, going progress created side. this expanded consultation Every for good we the expand. we're it's headwinds installation We making So those That sales category, been It's year, continue leads which created and for us on bandwidth. indications is sales to really saw some the in actually us all the we've installation to

believe year, our them of efforts adding make really So we reason to don't out to have our refocused looking we've any right? efficient, ever for for after us, topped time of of -- that kind as distribution ways we improving partners, more kind for realizing was that And there. kind last constraint product, first we've the said we a new around

told year up in the making because couldn't installation one we're stood call last to people. We they the expand install, now find they reasons they So talent crews full helping something us of network, is they that need. hire dealers installation bandwidth couldn't it hire them dealer our we force, -- helping easier talent and which we

that right? have They partners, scale put effort dealer of towards kind we or the can they how we said, and a of with out solve kind have we lot okay, we together, outcomes. things let's X,XXX X,XXX of channel So when meaningful those partners can figure have

line mature your right the is things kind kind think maybe sales the we're take all those think around leads happen. I of into And time into making of consideration thesis what So installation. letting just I didn't

So that's as of exit the expect that we half of QX year. coming, we kind and and the see to second enter

Satish Wells Our Praneeth of next question will from come Fargo.

is open. line Your

what pane it being single Thanks. I about I somewhat know terms in glass, display. eco can you it's of limited but talked actually the of guess

of having you're So it is with and there Google wondering and being launching later home Amazon that thought the with I'm and compete integrated, and display year processing the maybe in this smart doorbell like? HSB upgrading of a ecobee the and capabilities the smart really

Yes, absolutely. Great question.

we that of great thing. in love is fantastic the about things is One ecobee the display

beta if you now. ecobee and -- have that It it's right the hell, my one cool ecobee your it cool doorbell, be in pushes as house It's anywhere mean, thermostat. multiple got the doorbell house, you're cam, I If actually a more if cool. I to your one of thermostat can I your doorbell like In device. is you displays features you the anywhere have the really. on thermostats. It's of have fact, camera in -- somebody can honest, with the near on have thermostat trial

want we energy in we do I your a if status running to did, you it -- will that to use mean, you your tell as Generac when running the during for It's if But this key will your generator an exercise ecobee of really it's power use may generator. to thermostat it it, the and as screen, fault in we the tell it's outage. the will central think the going on you reasons hub want one give in opportunity It home for the to cam. you use We just you you generator the messages it I'll will tell and I you show show it why have on the So have. tell doorbell -- you home, the It that. a display. of make have any ability will point It me thermostat, you right? obviously, mode. that It we're ecobee you to will the integrated, when is

which to device tank to Then our heater into integrated next. water be integrate docket tank switches and look is the we're like the devices on Other our next. monitoring on those integrating into device our going our disconnect energy to LP going are at also ecobee -- storage that utility, We're be thermostat.

you looked buy people said, well, us back here did why Our December that of 'XX. in has been and at ecobee premise

going home, You're every solar Only HVAC have standby right? storage a percentage and home almost right, X% homes need ones in HVAC, thermostat, less no, we generator hub the than into the smaller have a has But storage. even and anyway. home of nice

And every thermostat. home has a

amount just So with that's and a of cost a the the power has for home opportunity, the to it. us it tremendous device of raw low opportunity inside enter

on In principal wall processing in the of and of terms memory, the fact, founder the too. Lombard, the display terms tell of your Stuart effectively, that's like fantastic, that the company you the iPhone that quality, mounted power, who in is they're would

use, it's product that is user product, is user and use you Their use and you the is the app the easy If tremendous. smart, with that it's interface experience -- their right? intuitive, to

sense your thermostats. by your in in save the one you to understand sensors presence is the the energy react can you they in ability these documented are where of their their home, of well home, Like to terms installing ability presence,

forward. important single-pane-of-glass it we think be really strategy So like the going experience. is part And we we and that user product having just like our incredibly central the the of

The next Jordan of Truist. Levy question will come from

is line open. Your

be quick towards M&A? opportunity the sense you and through me what to side. Just for how segments for after get move landscape of might wanted closing just one on M&A a as some a view the current your these the directed I deals, we year of appetite recent

has decade for total. question. front here and is out. companies hanging acquired thanks, active -- able the XX-plus on been call M&A We've the been thank but Jordan, the take This over you very to the now in and Yes, last be to long, glad

grown, into we through those really worked. think energy as then grown And company forward. not -- going we've And evolution deals also, Not our the gone on presence all As acquisitions, the spaces. as a through adjacent very about and we've into We've geographic it's but learned been have technology an only rewarding. presence lot.

better right? you to others. have have I Some organically, we different much first an our done when only in today a tell position in never worked than But one growing find would XXXX. We that ourselves than prior we acquisition were

we're we're space. thinking in this what acquisitions, as to far in still for about future active going the As be

The really little year platform, over Rolling had management in bit and here charging U.K., channel types with us bolt-on that seen was add in summer enhance stationary product there a like storage Energy around was adding EV the those to You've We do investment or around before products. to a a couple nature, Energy energy management. acquisition, primarily really rental we energy Resources right, Storage more some to trying EV of us the the about before, portfolio last after Germany pieces basis. Concerto acquisition we REFU was over the gave great year go in off-grid done C&I the did on made that

C&I But we've is a that after. go got we market also knew stationary market the that

say, EV there, it's organic entry, get label -- be later It with term to on effort we residential it's charging, I we private partnering so We're will look areas market. an as at, believe we still I longer continue technology And Generac, side. unique are EV much REFU to Storage But opportunities to couple think to here -- notable I the going our say have want was I an continues right? the is to that honestly, but to a energy to year with for a gaps to in way enter particular, where evolve We're don't us going think, accelerate effort. market need. what to this of somebody. there is a as and We're space as not charger

just and that in space. high maybe something in remain So have really that high valuations been space,

think could change, on area active differently, technology anything as there. C&I of residential on side, were And energy side have bit about the we've should maybe for like but gone the done that we picture internationally that little after we've we then energy an technology to on product become the well you then and So it a the internationally, things that some outside That's don't as point. the anything of C&I pieces North we fit energy really additional this storage might find at an side. side, America residential

something for to of be acqui other also, of at. couple to us And to way has us a our help development then done might looking look the a markets we Obviously, or enter where acqui-hire we've hire, there's environment. acquired a employment at in with -- that maybe if companies acquisition So the through an picture tech the on markets base accelerate of changed Europe environment, and couple the just put again, continue that's here that go. we look had as at and to in to we're things in with back, firms of it active the people bigger pulling years. the challenging remain but of time us front. front to Opportunities on as been last are not going of maybe couple kind some come hire and be going to But

will next from [indiscernible] Our come Credit question Suisse.

is open. line Your

the question. taking much Thank for Good morning. so you

quarterly out cadence stepping the of here. Just

the you lot alluded have of are home-energy acquisitions, the effect your level you've in-house a the to residential clean Could through thinking we've as of about lot years? two energy How of demand in sort say, you on remarks, company in medium seen are term, five you announcements bidirectional announcements many kindly on beyond and/or a home parts chargers. vehicle-to-home Within the to space, of M&A-based puzzle clean that you And contextualize three standby made? ambitions EV energy the charging your prepared your business. of in

course, watch a at you're I Yes. people be going No, rates. Fundamentally, sitting battery to charge, we're it. they're as we or most ability think carport to -- is an EV be that going with plug charger of control time right? -- really to the for to that charge interest the going think there charge the look, large home, to in great obviously, charging, that going of EVs, have penetration you're great watching I in, So EV And want its charging garage critical. vehicle kind going of question. you're rate to the to that and And do your are of

Now level some of do type some home with level of both and a energy those with can today charger you of system. integration management two

home purpose, use to directional going of for By perhaps resiliency either for course, able purposes. think least I in and would you're opportunity export battery that EV the at of charging, bidirectional to other that use indicate don't an grid that to power it some charging see impact do standby medium the on be we to term, much on or the the three- generators. five-year window, to

just the power I in having your mobility. flat for think to become EV particular, I out to that. for think reason as that think, that, going at a resiliency or don't much homes going to be outages want maybe and much, long-duration to to two and backup is it's perhaps to that home homeowners -- level the to -- as for going willing in rates I be perhaps view, you're is for stationary simple. more fairly have are single pen outages solve a ubiquitous some my longer go generator I EVs, trade way from storage available term EV of

mobility your buy is see the a It I long space to, technology. and how it. we're way, a about codes view bidirectional I -- charging right what mindset level near they actually okay, and unregulated the is relative fact, on seeing of a could may once In think increased of out, it's because new to generators feel we some that see EV how my first an goes what somewhat standards if is all, you power people even and and around by think and term, resiliency interest term perhaps depending that, --

OEMs terms auto large OEMs, their a in charge warranty in with And fairly of rates, to battery a the control whether the cycles, for that open much that their as rates. discharge third of will question the charge of what control how of also right? battery, give the there's the basically mean party And terms they cycles, -- discharge does

do point. fairly resolved get a I open time. over it at is this question That will think

quite just are that approach of EV understand X. to it bit space with level charger. beyond to how effort towards organic the end, a got want beyond some an putting so internally looking efforts to And the design we here that the do at we're level charging X We've teams

I getting structure level is X then energy integrating first charging for the think and thing first our own together -- management. the that of and home into us put business deeply order infrastructure that

in can there it So not what the -- vehicle. of may take And do in capability homeowner the help for there's of the what only charge add also cycle operator that what homes, who struggle of manage is terms cost utility or local their hard a but charging ones may pretty difficult to benefit that most infrastructure. it that has upgrade EV because people the to vehicle, the grid they coming to are of talk on the that as charging going homeowner the we the are terms to

pretty that the fact, lines, charging the mean, I serve just electrical where The the that's an cases, can a those draw is EV poles, in Those are by home. use EV transformers energy charger. in And local draw adding being implemented. the double some very heavy significant loads. neighborhoods home's at

to for going the great when day of forward. to we interest great I We're and us in September, an that So there's lot to bit that. IR on get come think a area but more a going unpack question little

will would I That Q&A remarks. conference like turn the closing the now Harris to end for to Mike session. back

forward goodbye. we us second and We in and morning, for to XXXX want to Thank early our discussing look thank results quarter with you joining this earnings August. again, everyone you,

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

pleasant have now disconnect, and You may a day.