Generac (GNRC) 14 Feb 242023 Q4 Earnings call transcript

Good day, and welcome to Generac Holdings Fourth Quarter and Full Year 2023 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to Kris Rosemann, Senior Manager, Corporate Development and Investor Relations. Please go ahead.

Good morning, and welcome to our fourth quarter and full year 2023 earnings call. everyone us thank morning. to like for this joining I'd and Aaron Officer; Officer. With is President Chief Financial me today Chief Jagdfeld, Executive Ragen, and York

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

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

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

call turn Aaron. I the will over to now

Valentine's today. Thanks, Kris. joining for Good us you morning, and Day. thank Happy everyone,

that. I think say can I

operating generators Our as quarter fourth quarter performance environment. in softer-than-expected to year-over-year despite home returned of a the power shipments growth results reflect outage strong continued improvement in standby

experienced significant favorable and tailwinds basis. quarter, year-over-year driven both expansion and price We also cost in mix on sequential a margin the by

from the generated during the the net inventory quarter. Residential In generator cash addition, prior sales sales quarter. lower generator portable sales of flat as approximately the to X% shipments core year home were increased standby in quarter record on $X.XX reduction flow X% levels. we continued in sales growth the overall free offset our Year-over-year, billion, in increased and product

end channels offset quarter as broader in the with telecom by C&I fourth continued softness year and in strength product domestic sales line approximately markets. prior were in was the rental strong C&I

International approximately XXXX. results consecutive quarter of C&I want annual more an compounded Global EBITDA. billion, XX% year X segment the both over fourth product resulting year full and to our sales the record provide our for those in all-time in year I our in record sales of sales, growth a some $X.X years. category, reached double-digit sales third highlights for This in growth XXXX net strong full discussing nearly included rate performance detail, Before in adjusted

headwinds product the helped related The strength to backlog to benefit inventory the excess elevated our categories products our home standby field residential C&I levels has of offset period in comparable a and in included that of in reduction. generator strong XXXX

benefit Although the our increased home impacted market the shipments to event leads a XXXX. of during year, the despite outage these were or full factors for the sales by major year having during not consultations

in capital of our drive additional respect our to in of helped and XXXX. we inventory the improving Additionally, million to deployment $XXX repurchases, our operations levels, cash completed to cash an all-time record reduction solutions with with while from performance flow to return for during share maps margin the generation robust year year. full provided in advancing year, products flow our This the the second road continued continuing half also together flexibility as invest

XXXX as in for capacity significant to opened and of stationary in Nevada, our Wisconsin we excellence capabilities C&I facility a manufacturing Reno, products. on We engineering increase ground and continue engineering make to an in new manufacturing in investments center broke

decentralize, during compelling with electrical the for the stationary the future market the grid solutions and to also applications. We domestic microgrid continue launch products digitize C&I of storage advanced new help energy year, introduction decarbonize including to

engagement a team product the smart their to In helping platform. addition, to line, Ecobee doorbell camera launched drive

monitoring our Ecobee manage hub and of and common central towards our progress devices solutions products to propane home generators the as important interface using through platform and residential vision made tank also solutions. building our suite We of our for user a of integration standby the

a help drive range. awareness help We investments to new our XXXX a commercial accelerate -- generator stationary of to introduced of and broader for home to standby the provider investment residential energy markets solutions EV Additionally, strategic we incremental powering Smarter World European ] C&I a in further we Strategy category minority our demographic [ advertising Enterprise as made consumer Raifo campaign made it's leading solutions both a storage storage in that provider move acquired a charging for power systems, Wallbox, of of applications. and

Generac broader energy Our in ecosystem proposition homes our seed energy to solutions result of are We're integrating partner as in that an with technology Wallbox the global and further collaboration Wallbox's Board charging forward the of addition investment and to the building Wallbox commercial we businesses. is as look Directors. excited on technology portfolio expected with to expand value to EV in well industry the innovative leader the of a for

the that XXXX, role severe as increasingly energy the coupled and will solutions market. U.S. the throughout demonstrated believe we were can that the display Importantly, weather, longer-term the our growth our in on provide megatrends drive continued important evolution further the full of to products grid with

power Although for in the the quarter XXXX, despite America, major average hours which outage above a being U.S. outage fourth XXXX events and during since throughout the North year activity long-term the across were number baseline. numerous that of there any outage drove occur weather did scale not lowest power severe did smaller monthly the experience regions events fourth quarter

the magnitude In Grid climate frequent Power addition well. as the power higher to weather-related reactions disruptions, legislative and also are and increasingly impacting to change regulatory

siting to time, solar incentivized side, utility continues sources, challenges. data accelerating in face build rapidly center trends electrification cooking transportation and is permitting increasing being demand infrastructure power baseload traditional scale, wind On thermal but the as supply growing the and are intermittent and are heating, power-hungry to and they same are and relative and around telecom out. At to nature continue

assessment, resource shortfalls of winter. long-term are the of creating during risk extreme as particularly challenges majority supply heat reliably summer significant and periods the American to the These U.S. or during and utilities demand, warn Canada. and reliability across operators changes XXXX its Corporation, match the of and are the continued the grid Reliability elevated Electric to struggling North cold of In during NERC,

supply availability creating are than imbalance, As risk and so leading time more key forecasts electricity to peak of in future demand a any recent potential higher outages around history.

we of significant a will for As our into these continue resiliency there the to result portfolio be expect factors, efficiency power opportunities well solutions energy future. and of

we Specifically for category, generator the home standby opportunity still penetration a remains. believe massive

in the of value addressable the standby unattached generator only As market X.XX% XXXX. the of had at homes in a than U.S. greater of $XXX,XXX installed home single-family end

significant our XX%, as on solutions share penetration this also continue billion for well we Furthermore, mega on further for concerned $X business believe worth executing category. every that global is to with greater value. prices. we term, Generac is home market businesses challenges vision, opportunities the to about Near position believe volatile incredibly we lead energy are Generac important energy-related lie help and navigating product the unique approximately than solve of trends puts in focused owners are C&I which commercialization our of reliability to power And positioned issues incremental same strategic a and and a ahead. X% products market These create of

home continued increased shipments year our a power discussing and home during activity, despite the field softer-than-expected which results more XX% inventory consultations quarter. standby in Now the outage from weighed destocking approximately quarter Fourth detail. on prior also

vulnerability month January. the in pushed contributed storms conservation to sent markets, and activity consumer XXXX, outage awareness record of of to the electrical grid. for early unseasonably in to levels severe Power However, of driven power notices cold select related also spike winter by in temperatures the homeowners demand the

year an As these the factors, a in month. all-time were January record for this result of home of consultations

the Our we to to in the our during to lower residential the Dealer capacity. quarter, and softer increase prior train contractors, approximately quarter continued non-dealer execute dealer outage moderately count. on trends activity consultations. further offset productivity of and impact improved with quarter, count fourth rates overall the at power close X,XXX to line ended the initiatives helping home fourth helping in improved Notably, year installation

at level in which from in fourth that record the of fourth activations, in increasing of further installations, for end the the previous category a helped higher demand. is the market standby quarter the the are home of to quarter, slightly XXXX, importantly, all-time belief reduce our quarterly demand for More and new proxy baseline standby fourth record support in our number distribution were the providing activations under an of generators ship as continue channels a holding The home record further to quarter. level quarter we

returned home in As XXXX, of further and to normal gap of and channels the continue certain the we shipments have this align and quarter exited patterns, ordering activations between year. activations overall to expect to as and market narrowed standby we shipments later first regions the

rate approximately a to XXXX, release in sales mid-teens this expect home sales line we press standby guidance increase growth the at disclosed For with our in morning. residential

in year-over-year the generator average. expect home the we Additionally, basis in baseline power that each a sales quarter increase standby throughout with year, activity to line is outage historical assuming on

smart addition home compared led increased as and year, residential fourth to continued growth by with at Solutions Products also Ecobee the key partners. In Technology presence shipments prior their driving energy standby thermostat Sales to of to to returning professional generator and growth, continued momentum by share there quarter our during market contractors the with in expanding gain further retail team the as our

satisfied expertise and smart received and doorbell industry quarter Ecobee consumers to well continued their positive XXXX The launch in delivering Ecobee more than connected consistently of with technology fourth homes, ecosystem. we camera experiences. products residential customer and was finished showcase can installed our a cross-sell experts by to giving service of large customers capabilities us base rolling as our X.X energy work out towards we million that

were is integrate Puerto value while technology providing fourth resiliency demonstrating provide power energy independence grid operators Energy and is expected experienced energy multiple to setting. technologies in our Rico Ecobee for additional to Massachusetts Smart for energy in storage the managing our capabilities, of next in a energy home's another to to our storage quarter systems to services distributed the ability during in aggregating Rico utilize expected grid Puerto important to residents. programs resources residential and systems, and plant for by event clean grants support Massachusetts The awarded the include our over Thermostats virtual program energy utilize energy needs Department also these our several The we program from years. focused as solutions We

as partnership distribution minority creates fourth seat made commercial the future global in Wallbox our in energy also will technology the Wallbox our of residential we to bidirectional Board an which increasingly The increases emerging an residential penetration of during Directors networks. important opportunity future. brings mentioned, believe on As ecosystem the quarter, charging we play industry-leading development. electric a the investment collaboration which access the provides C&I critical across future role previously for for vehicles and in and

gross products expect $XXX we sales home energy $XXX rate storage, and range solutions devices energy of million, for XXXX, technology connectivity residential services, For management in to XX%. charging to year-over-year a approximately energy be services, of including and growth and EV million a

We later be commercially next-generation to residential system, half continue to building energy this out investments our meaningful make the which energy ecosystem, storage year. including expected our is of in available in second

customers now a provide on flat I the C&I in the to Global to declined softness sales and for would quarter C&I approximately fourth industrial like industrial on product shipments fourth products. to XXXX, to commentary increased and $X.X the standby our our full distributors the year-over-year Domestic billion. XX% applications. rental product commercial for year direct basis in some continued channels offset and sales quarter beyond strength in approximately during were modestly and sales as other telecom

Shipments a American quarter. fourth distributor in North channel rate robust grew at of the generators through C&I our again

by increased in in Shipments natural extended patterns remained the activity impacted quoting gas lines, strong used being very at the applications a rate in quarter. fourth of peak standby the traditional XXXX. product half second of off order experienced year earlier the projects resilient beyond Although despite generators during levels time were

continue in other leading As solutions C&I natural generators, of markets. beyond standby energy and gas the end applications pioneer new for we to provider technology generator market opportunities

multi-asset in We facilitate with increasingly are solutions platforms. grid our gas our generators products our storage, to pairing development of C&I such natural and comprehensive smart as advanced services applications, controls ready grid connectivity, working the and emerging

the higher products shipments we today's beyond time While putting we growth on pressure a of applications And rates as project than XXXX. Sales believe this is result, weaker fourth impacted rental are patterns and national opportunity, an important declined customers the equipment standby for prior negatively from in expect in long-term related be as independent stronger to lines. order the interest to year our year quarter prior comparisons. remained

continue we projects equipment vertical sold that softness the into products XXXX believe market to has growth overall Despite infrastructure-related given our critical the runway in for is the future this that leverage cyclical impacting need substantial that normal expectations, channels. our end this for rental

particularly prior As expected, as national quarter compared customers declined capital during when telecom year the customers again shipments level fourth further to the quarter, expenditures. to these reduced very strong

will our weighing Given visibility, national telecom to in XXXX on our remain current overall quarters, we soft accounts the expect coming outlook. shipments

shipments have increasingly we cycles we experienced spending that critical market, and have domestic related change the related we lower Russia-Ukraine market XX and war abate. total declines energy security secular the sales not this power years been Mexican portable in near-term network reliability. the However, greater in to communications and concerns these well believe as pressured of wireless counts significantly Internationally, resulting sales, hub over CapEx continue as requiring nature shipments cyclicality global intersegment to the of are from of as our Europe increasing to trend and the were tower primarily serving operations generators the intercompany longer-term telecom lower from will services by

Helping in remains grew Asia strategic expansion growing East other during the implement at markets rate a markets footprint. to this focus East the as opportunities underserved moving us sales we playbook International net India, Middle a significant global for offset quarter. the such further across of and geographic growth emerging important international penetration strong continued forward with an and as generic and weakness,

return weakness expected in by in sales morning, XX% certain to growth certain offset year in than markets. global which beyond direct in in our to end we help is full customers as this and and business more positive In our a standby offset C&I expect to our regions to release softness disclosed XXXX, to decline closing again, to rental channels. and began this grow believe morning, C&I sales quarter As fourth overall shipments our press momentum residential reflect as for we product telecom, results cyclical should customers approximately other product

believe out of for of both in XXXX. the continuing focus our products are to and and nearing the This shipments to us momentum overhang home expect on in gives We we technology for field longer-term realize residential these end ecosystems. year-over-year building strong inventory generators excess standby C&I in energy confidence growth vision

earnings gives powering power acquisitions the the investments, flexibility capital to execute of as to is cash of return record quarter in performance trends mega prioritize remain Our flow strategy all, opportunistically our Smarter shareholders. fourth business Most and and longer-term is World organic our support strategic ever. importantly and opportunities that evidence continued strong intact us our the further of firmly a conviction in as enterprise our on

on XXXX I'll year call results for now fourth our provide further and quarter our York the to York? details XXXX. to and full over outlook turn

Aaron. Thanks,

year contributions sales to Net of favorable $X.XX approximate favorable the prior $XXX to products in fourth compared acquisitions quarter XXXX from on and the shipments increase quarter. acquisitions to Ecobee. an more The fourth currency to during consolidated detail. $XXX The combination decreased increased year the fourth comparison. This increased tough partially as fourth modest of Growth revenue product billion. foreign portable $X.XX during generators Residential sales was Europe, approximately results given at during class. year. in Looking the X% U.S. the increase revenue driven home contributions billion lower year a for XXXX at in a by a by prior looking XX% of an the approximate billion million impact net strong standby sales residential XXXX million quarter energy X% Net full had X% the quarter. and in product quarter prior by product to technology and compared combination growth in full XX% was from shipments for impact generator had sales sales of led X% $X.XX currency offset on foreign by in more year. Briefly in as the and

rental Commercial acquisition million refuse X% core to million Contributions slightly and to the of $XXX quarter. currency to telecom year and fourth due approximately sales as for storage contributed shipments an $XXX distributors by sales compared and domestic in industrial emerging addition during offset to prior and partially weakness in the foreign the for from to customers applications, increase industrial customers, strengthening growth decline increased in This is product equipment in the to sales our beyond quarter C&I XXXX product national quarter. direct international into sales standby markets.

X% revenue our to growth due offerings sales XX.X% was relative result our quarter of as connectivity and to million and favorable Net XX.X% services of in services. Ecobee and as fourth in as mix, to production products growth prior aftermarket margin lower $XXX the abated Core the X% parts, in XXXX. owned industrial distributors, supply service sales efficiencies to approximately to material was sales domestic primarily subscription increased fourth year. for compared Gross of and million other the costs from year $XXX service challenges chain quarter a compared C&I prior profit raw the logistics

Operating for or XXXX. and current The fourth and million the our the more of items year believe higher ongoing to expenses not quarter costs. million these quarters in operations. million, information on $X This of of we X% and are reconciliation $XX prior was See $XX our also indicative primarily employee onetime increase that include schedules items. driven year marketing compared as increased respectively, earnings approximately release by

for $XXX the was of as of XX.X% defined interest, $XXX year. net in million to noncontrolling in quarter in net as before sales compared the release, or or earnings EBITDA fourth million XX% deducting our Adjusted sales prior

XX.X% I Domestic for in reporting results sales, year. now compared increased quarter deducting to including or total our compared non-controlling for to prior segments. segment interest $XXX XX.X% X% million prior two million net before year year. will For XXXX, discuss million EBITDA was financial or in the as $XXX in the to $XXX million the intersegment sales the full of adjusted sales, as briefly $XXX

EBITDA year as or XX.X%. million Adjusted XX.X% sales the for $XXX $XXX compared segment to million, total prior of representing in the was

an and compared the International to were prior the XX% sales, decreased XX% For year margins the sales, compared in including the domestic to contribution segment in sales million the full full EBITDA prior over approximately sales year for XX.X% year acquisitions, Adjusted year. in total resulting from XX.X% total intersegment the $X.XX currency segment growth billion. XXXX, segment decreased million prior core XX% including in total foreign to as X% $XXX quarter quarter, sales year $XXX approximate decline. to

EBITDA as the sales million for in Adjusted the or XX.X% non-controlling segment deducting $XX.X compared interests million or year before for to quarter. $XX.X total of was XX.X% prior

total For segment Adjusted $XXX International EBITDA the XX.X% interests to of non-controlling in increased compared of during prior the year for over margins prior year the X% XXXX year. were the XXXX, for before full sales year million. to full XX.X% deducting as segment sales total

performance Now our higher $XX was in rates. compared the year in year consolidated switching to of due million GAAP $XX quarter back a million the income compared as disclosed income approximately to as of to additional on quarter prior to our company current earnings for the expense million basis, quarter the the borrowings for fourth 'XX $X and XXXX. for The net interest includes release, interest of financial fourth net

of repeat $X.XX GAAP effective fourth the tax rate as the fourth year. effective tax a per that net in XX.X% tax million the XXXX in driven the to to an prior primarily was for for year. year rate tax or the Diluted on were effective in an XX.X% increase in income for was discrete or million quarter the of compared current $X.XX benefits basis year. year income quarter prior GAAP current The $XX taxes rate share quarter in the by of compared not did prior company $XX.X

$XXX redeemable strong as period interest in in $XX.X by year-over-year lower to the company, quarter that net million period. the primarily share adjustment share. the nonc-ontrolling earnings the or increase of income driven or earnings in This value was current in in unfavorable growth per net The was year share redemption a adjusted net in compares income $X.XX an share. prior as Adjusted per our $X.XX recorded prior year well in income million the for year relative defined release, current as net $XXX year to was million count per

due as $XXX quarter, record free Cash flow, as the inventory the earnings. fourth same offset $XXX in The operations our significant capital improvement $XX as to an free in quarter all-time prior cash year million compared primarily quarter higher current This million earnings and partially higher in operating to flow release, during quarterly from last the reduction expenditures quarter. million was million was in $XXX and defined a to cash year in year. flow was million $XXX compared the during was of by

outstanding at the was the ratio basis. X.Xx of Total a in at the debt resulting quarter quarter gross fourth leverage of end billion, debt the as-reported $X.XX of end an on

common during Additionally, fourth million. our million of for we the X.X shares repurchased approximately approximately quarter, stock $XXX

of Directors in the our morning, company's of that Board repurchase press million disclosed our previous a common period, balance new XX-month program. stock this of to replacing program for repurchase over the up the As a on $XXX stock remaining approved the has allows release

refuse million million earnings cash in the year, was in the systems, was XXXX, We investment the defined flow, of in of approximately minus cash prior storage $XXX the full minority flow the of deployed $XX capital Pramac $XX compared with an remaining XXXX. in as $XXX operations all-time in ownership record our XX% to in to acquisition million interest as the And $XXX compared and strategically free release, million For purchase as from minority Wallbox. of million year.

additional growth. capacity future support expenditures million In for $XXX addition, capital totaled to organic

repurchased the year. common second X.X also $XXX opportunistically the during shares stock of of our million for million approximately We half

other and shareholder operate a continue will opportunities. accelerate powering allocation our Moving and forward, execute as capital framework we within to value-enhancing balanced disciplined our Smarter World we strategy enterprise

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

sales more this a release projected morning, we're with is growth standby shipments that period. full as sales be This closely the be generator aligned home anticipates our increase expected press to to initiating for net return in by year during disclosed activations XXXX. led to guidance higher XXXX As are

also our system Ecobee energy drive to to XXXX, later energy residential we as our in distribution growth and strong and expect next-generation and our grow solutions. products We with continue launch expand sales storage technology we

Overall, we in sales to XXXX. expect residential product mid-teens the grow range for

in to However, end for pressures rental than customers, the category, to beyond be more product expected are around offset continued offset C&I our certain than or cyclical and telecom, more standby expected growth C&I markets in world. broader

As are year. sales to global prior decline C&I a XXXX in compared by the and approximately result, projecting we to XX%

to As a prior currency. to X% the result expect which net for benefit of these increase year X% compared we foreign favorable consolidated includes slight a between year, from factors, to as sales full the

of which with a believe the of year, the the outage longer-term such higher assumes level a Category power add hurricane not benefit guidance or sales. winter power this million to the $XX we in during during Consistent $XXX with or X of storm, assume line does this landed our baseline activity Importantly, event major could as average. approach, year major historical outage a outlook million

normal XX% the weighted. and result a seasonality, line outlook, expect be As overall we weighted being net top in being in sales sales half the historical in approximately this in XX% of to approximately second sales half line resulting with first

prior product the first C&I solid a offset in Specifically shipments. by residential sales flat to we growth for nearly year quarter, quarter, net decline with expect first the product overall in from sales be

the QX year, XXXX each seasonal With we point for product throughout class the expect sales the year. sequentially being to increase low of

expect favorable impact sales continued to gross at for of year-over-year standby Looking throughout costs improvement year. drive our realization input higher margin and from home lower the expectations we mix year the volumes the full XXXX,

result, for a year to expect full to XXX the gross basis approximately margins as we As by XXXX. compared increase points

of higher basis margins we impact sales mix input with expected approximately by costs. realization to on gross sequential favorable first second and lower improvement year-over-year also range. are These second points increase the in XX.X% gross of to XX% perspective, to from quarter in approximately projected basis XXX seasonality in result into XX% expect half a year, half From standby gross shipments factors margins the the margin due home a to to the

to position strategic business continue and focus initiatives on heavily respect a With longer-term across needed the markets, our in in for maintaining invest resources to and our enterprise. supporting existing innovation, the expenses, new operating we executing to growth heavy

these sales result a to of approximately expenses of XX% operating as we for XXXX. year percentage expect investments, As a be full the

We expect to margins we first year. costs grow half, second to EBITDA these from sequentially as throughout our leverage half the improve helping to

deducting operating to margins result interests in full of a our XXXX. expense XX.X% margin approximately and expectations, gross expected XX.X% EBITDA for As adjusted to non-controlling the before for compared are be to XX.X% year,

EBITDA adjusted to From year. we expect a we seasonality significantly perspective, improve margins as move the throughout

improved returning for the Specifically, XX% the mid-XX% fourth in regarding quarter. the year, the first to range, in the lowest quarter, then throughout the and adjusted sequentially EBITDA margins be are expected year to approximately

second adjusted are first result, margins XXX nearly a half basis margins. EBITDA half As the be points higher to than expected

in capitalize these discussed, robust presented we continue to solutions growth and as products Aaron the by markets. energy investments Additionally, our significant to technology on opportunities make long-term residential

we XXXX, basis expect XXX XXXX. dilute points technology approximately the a level currently for to EBITDA our residential experienced similar As result, XXX energy of in margins dilution to to full by year the

per As earnings assist for practice, we're guidance and additional normal cash with full providing year free is modeling the XXXX. our adjusted details share also flow to

net tax items we back adjusted reflected tax our should per Importantly, effective and rate. adjusted at income be for of add estimates using earnings expected arrive net share, appropriate

tax full our for GAAP year is to tax XXXX. to be GAAP XXXX, expected XX.X% rate effective For XX% rate between compared XX% as to

no assuming to in We with and million, million line approximately expense principal sulfur during revolver expect XXXX the or market year, interest $XX to throughout declined $XX rates be term additional expectations. loan assuming prepayments

X% capital the to our high capacity end at incremental expenditures and expectations. growth support historical as to range net future our of Our forecasted of other year. the for approximately projects manufacturing add projected execute be are sales we C&I

guidance. CapEx to to be is compensation approximately to to in be forecast year. $XX million flow expected year expense intangible XXXX, XXXX, XXXX. half assumed $XX $XXX the is year. approximately is generation cash during expense our expected to the Operating to in and for GAAP in free Stock to be $XX million XXXX of million million Depreciation expected between is weighted million million $XX to $XX amortization expenses similar toward the the second be given disproportionately

builds the For conversion to of be monetize expect as at income net continue capital years. XXX% cash flow free from full we working approximately strong adjusted year, we to prior

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

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

[Operator Genuity. Canaccord Instructions] with Gianarikas Our first question comes from George

and just ] the Would is Can the on [ that the us assumed mid-teens. for focus that you growth HSB residential you guidance buttress activation and underlying XXXX maybe for what growth year? the help just understand

that in we activation overall in residential that what on didn't home guided a expect tied mean, I similar the current big-ticket mean, not obviously, year-over-year, somewhere rate mid-teens the want in standby, to a an the I to softer we we discretionary. way. said George, consumer we're take We that expecting grow aggressive assumptions. assumption Yes. the to decline. environment prepared range remarks, with Obviously, category to

fact the rest to here is that the going that in inventory QX, while here of of of continue year. abate some in lot is of that that for the in QX and a field the will destock XXXX, Again,

the that assuming chunk field on growth. market we aren't fact that we modest of declining, the that have but good is a So that don't standby inventory the home is some growth overhang year-over-year

that holding outage of that baseline, and power we higher in In about. assumption the baseline of kind the it line. new kind absence guide with being It's talked of above we activity

that think we where that assumption, that both is big So assumptions I -- remarks, generators of don't drive rates and said of with consumer demand think the could prepared kind portable opportunities, in I level. actually. kind the elevated remain that outages, and remain even somewhat could for right, baseline York think major could include But kind flattish discretionary here, with home at in items in any environment ticket and we include we standby additional of

with next question Halloran Baird. Michael from Our comes

thinking about could energy is understanding other more product And little a word, for the the Could versus revenue things, but that launches? going But you newer pieces York's right there, what maybe line? cadencing bringing new don't importantly, XX% market? talk kind I being the dilution be growth? on side margin into thought year-over-year, of the Maybe How and that do heard obviously, certainly, more you Obviously, of expectations impacting the be if market. start the you you're rebranding to comment revenue but impact process you about expecting you're the you're talk know how the the to tech launched expect to products. better a just how the the of about the that

that right development the the I Thanks, actually, are Yes. now XXXX, kind we're exit market Mike. right, mean our both storage are and mean and products, energy next-generation have top we're going we these make QX. should energy hit as of get which later better if the year new and it be products sure for going not we leading, storage talked QX to which that the devices, about. at into here for the a products in get of of this because I to market, the we part the been market of lot

allocated top amount of really traction. launch. modest So will We we that only more get very it a to think have line

of headway, out the the a particular. We've in confidence lot work new been of I obviously, We think there, building installers of products the with and we're distribution, market. have a to call do, market regaining the it the rebranding, doing but to you work in making need those lot get we

with growth there's also just growth the the the we not so, Ecobee, right? us but continue not that been ton side. take and to And has do a there. what they user for only on They achieve asset to experience, a technology growth That fantastic us, relative continued competencies to that to share. bring in of see its we're trying curve, just just

we've around, and glass we've But is on seamlessly and/or kind that solutions of everything products have -- acquired to it. we're lot of it got organically that pane and of all bringing a of our got platform. everything lot we want work So but single We've calling same together putting a reference synchronously, the is it kind to technologies of work.

And 'XX, the operate the so storage next will hit products micro early they market we pane year scenes, get platform. all will each be behind introduce device, when which -- of as the new all the those single so glass in will to product, inverter next-generation this within products we

generator. we've standby see If thermostat, some can tank device. happens you of now be standby home running together you utility already pieces propane, seen to got if propane home your monitoring started on how to We've generator this your can fuel a an that status homeowner the evidence weave Ecobee level a the see has year. have You've status generators If of you visible.

get these together of to are pieces all woven So starting and integrated.

those We're Wallbox as the with the into market. going do the roll same to products

and I building great ecosystem they they're smart they're tremendous with, products again, thermostats And all a top-notch bring their So a integrate able the the -- and life. what Ecobee kind it that doorbell out, at they that adept very of just with been really have on market to in camera, this do. top of help team, think has to

next One moment for question. our

Capital Hammond Markets. Our next Jeff from comes KeyBanc question with

quarter. you bit levels? the the us sounds where This destocking into the maybe versus see there's standby give on Tarantino channel little Could Jeff. first is for normal lingering more home inventories on some color David you a It like

that, destocking? the you have And on an from tailwind on get do how maybe . that of million all upcoming maybe the absence this So year? give update much we Do of could left? $XXX we us

Yes. Thanks, Dave.

field of the even in wiping down. of Look, painful demand, close believe that QX. sure. -- We this for of that and saw got to kind ourselves, gone overproduced X been close last an over most said, and inventory. we out ahead it normal a we kind into we've that process going quarters. as very were just pattern kind So working been getting call We'll field market very inventory. line expectations, abnormal our with to has excess we ahead of the QX QX to that order We be we is then And exit in we to of of return as starting -- we were

markets, that always are probably That inventory to higher always customers has going You're pockets have existed. channels, levels that than field normal. have

I can a that's underperforming an and that other that's don't or you you have get got cadence. a market happen, channel channels. to maybe in normal you've If mean, event just

So that talking big we've I would excess for X thing quarters say nonstop. the that been level, field inventory about here

think end finish was year. of down $XXX watching the be we then your in was to spot going by QX. market That gone Day. the we we're QX actually And come million quarter. the about is believe, effectively We undershipping a definitely come end and in second the is That seeing I to Investor we're estimate our at part number QX, XXXX. good in date in down largely We it saw as to of the the the holding and gave it by here be

standby. for what undershipped that's So in home the we 'XX market

as we're that you'll a to first Now get a obviously, But that a still all growth. chunk QX, things on XXXX as in back tailwind, the that, question. given talked won't we working again, tailwind think, And about get here. of down that we I

William comes Blair. Brian question from next with Our Drab

wondering quantification what's color was sequentially? give I happening IHCs more can around year-over-year or with the you any

sure, Brian. Yes,

We So QX, well aligns the kind IHCs things. power and soften that really saw average. a actually with the below in baseline outage largely environment of of couple was

lowest fact, was the QX. in So it

remarks, I think in we since prepared XXXX. said our

right? chunk So good environment of kind for pretty a that fit low outages. with And half, of the second

lot the IHCs were spite year. no in count. last But year. of didn't the year activity certainly activity, in of that, on major a We see up throughout Total

more traded normally, of the outage activity. a then So starting I And to in interesting hot the got a outage importantly, that category localized activity. on of think thing quite fourth in a quarter. softness probably to see, And category, the pretty we January, of weather spite more we was quite bit start. importantly, off There is bit in the has which are really one

markets didn't But shortfalls evidence but it taken where it extreme outages cold IHC of actually that market activity, potential what we're of these media in around the of also a power result had activity. because is outages, but where that really and drove now notifications to trendous the -- send actually IHC information some flowing utilities right? haven't into weather reports seeing out in January other it activity. is So place Without -- drove in having outage amount

but way -- of a there's I at outage looking which kind -- it's So look only probably activity now, to to is for our at say not disconnect don't want proxy are sales that's purely the leads. IHC,

-- just one I this. kernel would other to

see also improvement for We the fourth in in to modest IHC. a continue close rates quarter

year. And about speaks those interest in rates. So think prospects some the assumed product, I not but And QX only we story close We that's kind it the out to conversion to improve. of last we've see because close rates -- encouraging buyers. of to talked that kind recovery were actually rates then after into started the had saw continued on obviously, we've close initially, of flatten this going but of that

us those gives in that encouraging that's shoots, certainly gave us So are signs. consumer guide are products. confidence I think, the green have, think you confidence anyway There will, this I morning if to us the gives around lead we -- power and in

Our Oppenheimer next from comes Christopher Co. question & Glynn with

half, question. half Grant me before you XX%, XX% split Did first a second for sales? clarification my say

that's Yes, correct.

Great. Okay.

month And saw all you better have last close Did quarter. quarters for improvement? in that of fourth October you than October the each rates mentioned account XQ for preceded following that it? Or bump. the what was curious quarter, up October mean, at the in on a each nice baked topic. month I For

way. the call I improving, honest. be Yes. other we Thanks, add, the on We October, quarter, not pretty each it's you're modest, all It some was -- we saw don't was it like Chris. going but that have to improvement. did for the it -- was I that month just say the QX pacing correct.

quarter, it again up the was modestly. For

it quarter. can drop didn't -- I the off negative set assume would it was have So that think us you because that for

modest I are we go quarter. for to pre-pandemic the of to close of question, your high, of if long pandemic-induced of pacing, hit kind back month So kind assuming each on the that assumption kind for to the don't again, or got rates improvement to apologize get that XXXX, that. pace. have We way a kind the the will. We've assumption But of continue you

XXXX where of the out. think Chris, I kind QX we we say, peaked is was, peak, of

utility off recovery about of to good then things news seeing now question the we're or that their temperatures be funnel immediately extended is maybe it. because turn fall Either outages but to sales -- the reports aren't kind could experiencing our if they're answer people from that there previous about an as or reduce The the at we've power about previous risk color times notifications And we been of their the concerned I they about consumption. -- off they pursuant of into outages, recovery. don't got or think coming other that if do things local and outage that maybe hearing they're mode. and my more in media we've saw cold lead more really question, with from or additional

that's see that conversion to homeowners those sales experienced people if the that hunt get funnel. those you I could energy cycle your we it's it's or And I reduce will going evidence say are facing for a be for mean on -- need blackouts. that outage. zero Those a they haven't you we message, you when and are homeowner and you're scary an degrees that's coming people a consumption longer to things things. be solutions. are When outside, immediately into text and seeing send

to recover our engage coming and means to And that who rates necessarily it that product efforts that. continue -- and category. level to that just of aware than the to to truly some that's We that people bad we're more little important bit in result our have in lead think more a there. the a thing. investigating nurturing that, for that even diligent take a category think close remain could efforts don't really that we our into homeowners the we just So funnel as of think could sales it's We efforts very longer interest

XXXX. modest close improvement a the over kind the of of again, assumption, course So rates,

Our Revich next comes question with Goldman from Jerry Sachs.

Aaron, can just outlook. margin the about talk you

and XX% at had fourth you XX% So of annual rate looking in XX%. quarter. equivalent margins guidance And we're the seasonally, a that's

So you what's you just beyond to or guiding to the XXX folks basis drivers the... Can R&D point are other margin on degradation areas? seasonality normal that expand compared the

about Yes, operating talk -- prepared I investments. in expense the our did

resources resources Investor significant expecting in to opportunities. after Day percentage as we growth. opportunities. those our the are those add as we of lot sales last a we drive We growth So XXXX necessary long-term those a as continue to of add up to go to to want September, talked At here our go we about

all you not it's Energy -- that that the industrial and power it's Technologies -- across consumer products. that's So -- really business, of business, our just had is incurred, our our business, before our revenue

to revenue relative before And 'XX. add maybe that costs that and looking to in -- percentage OpEx probably of will we believe you're maybe XXXX that's just that the you sales, at. to And math increase as need those with the a the our square up

Yes.

one last on Jerry, comment I just think, that.

and our of necessary I to investing think been market We have both successful being odds continues We investments those heavily future for the improve as change. here. the are think

to can. on much in still we nature. side want we fact renewables are and those of the is in are decarbonize favor of is just operators. The ahead of assets storage my lot is is -- as challenge utility significant We grid there the supply in prepared talked thermal as we And talked the the think which grid a continue They evidence that a costs of high. a -- renewables, changing. ream traditional we all is around about I to course, grid remarks. are I intermittent to agree, retire There it as challenge,

the plants. of utility storage cost out And with balance is to difficult large-format building those renewable

demand demand what have which with -- side, has we're relatively You been muted an which now seen muted. this increase decades. The sales electric Retail in haven't as over the is seeing, the on just of last of we side couple relatively the been couple that's decades either maybe some some population but of offset gains, or usage devices in been growth has efficiency power some changing. been of the growth by the growth has offset, that

innings weather for And super stress the certainly And mismatch that around as weather the putting cooking early again, there. around particular, and on around and and dramatic supply is it's patterns of seeing in up, around we're pick demand. cooling, grid. severe these But incredible creating volatile heating cleaning more opportunities electrification trends transportation,

here. be -- And place the at so time better in better with assembled couldn't I solutions don't a again, a products and that we we've

of to, do, work the the And XXX is year, To obviously, business was lot to build great We're work to about a very working dilution deploy EBITDA margin. these owners. out talking we're ecosystems in the points the level investment for XXX here, hard and that. that those have to We -- certainly homeowners effect. to is to York and throughout what referring on basis

Technologies. Energy For

For Energy Technologies.

EBITDA to to 'XX that, said Having we increase expecting start margins our 'XX. all from

question with Stephen next from comes Our Stifel. Gengaro

So me. things two for

should energy at able but if side, you're in we from picture and you expect dissipate the I'm sort when sure new about to this start technology not Analyst painted margin to Day, of first to The comment, you and but -- that your talk 'XX? that drag

we're still idea, Yes, start that is in would to achieve We business we path on would 'XX. laid here. we breakeven. laid September our out as in absolutely. at But the And that out Day as at Investor levels idea, then we the the and breakeven be in

abatement impact. that year. will of dilution just start not see an going this you to to happen So It's

really 'XX accelerates. and in So it it starts

we would.. 'XX is what

in by Cut right? half 'XX, Exactly.

from with Strouse comes Mark JPMorgan. question next The

could. by margin the in about the would assume I to quick if XX%. X%. expectations a XQ Residential grew Can part start driven wanted in highest of XXXX. And is with just good clarification embedded I question, that? I that pricing a That XXXX, your mix. revenue since gross you guide for be that for talk then are

as said business you and true, of the grew home what growth? was the If well. upwards offset that X% maybe Energy get grew think Tech that's I to standby to

Yes.

that. me let unpack So

events. And portable So tough again, comp with a QX, gens major was last mostly really it outage environment year. a no power soft and in

Europe. Here and in

the we to the York's really had And energy we've Ukraine -- soft. a they business. side -- last said come a European gens result, haven't saw our war, seen to year a haven't come well, we the security concerns we pass tough off portable also Russia, tour Yes. with really core and out of that products point, some products Correct. throughout -- of concerns, called the We as they as this And there. year were just year,

clean So and also soft. business. was But by in the offset growth growth HSP XX% also that energy that in some was

little there terms this had we mean year, On can the just I additional of out quite then price question, to were investments we've of some got in scale business, around I'll of the round costs the we've margin I'll touch piece on just as modest, they of a of quick, make the the that price. cover price But the -- real to small. and York would say, kind discussion. in bit it's seen that I but we that

big no price. There's

So the it... of rest

as of growth. referred that say standby than our grow will margin be half obviously, and tailwind home resi you mix, gross is, margin to fact, faster business, C&I that that gross increase in I'd to a

still won't continuing over realization we the cost were the supply beginning 'XX the here. say, really spilled that the from those largely abate in feeling we're I'd chain cost were, is XXXX half 'XX, other are -- The we in that of experiencing to that into see of pressures XXXX,

'XX sell build from I that a think inventory we that those were costs, headwind. over our we as into be Logistics through costs won't headwind as that inventory,

need we'll as production the there's anymore. to sort don't of obviously space store lot absorption, lower -- warehousing As behind up our levels a plants we as storage we bring favorable have much and of warehousing our scenes, the inventory inventory down, ramp in costs we our that's overhead

builder costs down. will that come So

now enhancement company -- cascade efficiencies. plant reduction company. our we sort general program profitability And throughout we our it's always then the the that Just part initiatives across DNA of that cost is of have

we those of in initiatives and we half goals realize for projects the we'll And the have year. that believe second

it important So of the terms an cost as improvement. side of in the of gross well side it margin is

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

there's So kind of ask In telecom of the of mentioned of I want -- applies rental comes you some in also on side the the it C&I what and seems believe it it to like. for accounts the And course, is the bucket. I business. been first softness But has the interesting. that. has significance, beyond increasingly the that. order I me wrong believe part become into of on rock in an if that release, of Enchanted goes I'm Correct important

of in that beyond And comment If there? standby of on can what ends? rock the it the you so is weakness when if to Enchanted you're agreement kind kind I'm tied curious seeing and

believe was 'XX. I 'XX it this either or expiring in

potential renewed generator being natural can comment on have data you to you data for all expect back largest -- be center up. the know you center I at that demand for If if have believe gas I you helpful. and

appreciated. be would those on color any So

Yes. Thanks, Donovan.

we And we the I we asset broke plant additional globally. here Wisconsin be side. business. the ground grows. maybe to for few on yes, long-term global as evidenced new C&I need been us that a of business over because the there. X CAGR years, fourth the good by last have -- absolute quarter for has as close to a a in fact, conviction capacity We is here would truly It's lot market a tear just see in it an spend today billion think in a $X.X It XX%. So on the minutes on long-term

strong the It's been cycles a called out back year. kind But for we of work with start three We I'll XX% a C&I through Historically, the around with the us. half in serving this telecom. Specifically, certain seen specifically here telecom, the of soften started been We've -- had with important that -- year called C&I. that remarks. of really the have start kind in of my this see in walk we up the way We XXXX, areas in vertical year. year different markets. strong I'll we on prepared an earlier really to always telecom

So what it line kind saw. in we of fell with

any 'XX, look were rebound we more Tier all supplier would quickly more XX%, you -- they've think major all them. to on by the We're of at can a here I it of X But that cut kind hopeful carriers. many all evidence their wireless call of of of it. right in and now, for based transcripts CapEx kind year-over-year the guide roughly

some kind in So a I degree what that's we're think for seeing of proxy to telecom.

We've and CapEx. seen off we've years. for serving of been to XX cycle But on this that And tend before. they market movie

is pacing it the the network. the build-out of of of Some

sometimes priorities, sometimes of Some other things. balancing it is they're M&A, other capital

we've a here seen That come 'XX. that's So absolutely. feel before. that we through in And will get back, like just going cycle we're to

you've we're and of of come seen accounts Again, to the CapEx rental come be all couple them. customers is lower a major The is year-over-year. other out, And their a rental in going that accounts, particular. national to the accounts one say out supplier rental rental the

So guidances. of there's types few of we're Power -- particular, categories the pretty & that refleeting of that, And in kind in working we kind supply, been the of over off particular, we're last those a heavy in Light. cycle in years

we you've are those got into or channels. where those power manufacture products put the temporary temporary lighting, So and

them of leading kind before for a utilization they to kind equipment. to to be start cycle. now need to through And gone of rates They've got they new wait they've purchasing heavy refi where get the

the X last our that in participation our and seen about market in we've cycle times again, over So plus ownership decade years. that

So that's just cycle.

That quickly. one last that's grown interesting. beyond standby. been is It's very area the an then is very And

customers have that type type they time like ones. kind not side, of or in couldn't additional a perhaps response monetize program, can we a of utility backup, help are generator only gas finding and in and use way the the and in other customers program a They're where of got sell typical others the particular, there. in emergency these in there's on lot for would we We they generators Generac generator We've that sell before. that So that some deploy value they demand right? support program, grid a asset can that gas

think was disaster kind it of They -- it kind insurance policy. had really of a to type a as a purchase response before, purely of an

relatively as not in we've use. also by very everything so over last context been stayed interesting very out And it hyperscale. year not of if and that's so gas has Underpinned there. data obviously outage, centers, growth centers, customer is couple smaller a more we something quickly, years. continue it's the But infrequent to it still Generac now I gens, a edge important rise, -- small a called they're an experience opportunity. right? an I these the growing a data year, but necessarily that used would you you are after of return do, create in natural gas would mean as return, give that prices have been electricity way low, to prices necessarily This

diesel gens not are going manufactured be Hyperscale are very We're business large by centers using our that today. still in data competitors. that to

center center data serving the in markets fashion. those those use monetized So we're that want assets more a or really to data operators edge of

able that diesel. economically You with to do be wouldn't

it generator because than gens level of do takes density of the same a diesel. lower power more for to thing. is a with that's lot each the for it That's it can to You gas economically physics just the get is -- gas, density, protection but a

You to level. -- can't still But we higher -- interest get it So we rate opportunity. seeing out a it's with remarks will We around think this temporary. a is interest the more what return just get We it's time just those morning great there, rates we're prepared market when a think that. in out that's lines, projects environment, kind right? pushed the return of normal called

is? Do No. we know when that

-- seeing anywhere do and between the to don't that economists the I watching them come what the of goes of hear rates that you that. changes, think, we're know. think in that see bring we pick We're and environment, as on think shouldn't listened them, number, year. lot of some that a back only been XX but projects, rate we kind -- projects into obviously have of I mix. your I not a it's those around your Take but but cuts those lot down, delayed economics and this zero

Our next Piper Kashy question Harrison comes Sandler. from with

I sticking since Aaron, just guys long for, companies rental have a we're time. you about as years serving said C&I been out, it. and really think, talking XX maybe you for So telecom with pointed you

recover average? take a for topic years? Just And So on typically help X on something of then how walk the down to year, drove drops this about through X and you that can it think stays spending rates following level interest of long similarly, us up it where that. that the Is for does maybe us weakness rates, years, in segment? this

through just Was that -- business. we think how level trying the the Is level if and the it impacts thought at X%, we on is segment is to the -- standby rates beyond got it Was is and X% X% it back? when another trying benchmark. the think to just some to when Just of around it get X%?

Thanks, Kashy. Yes.

rental X usually depending as terms want they've of in what their they the as X, to and we activities out. So forward telecom on year strategy of of of try similarly, to -- a category, cycles, plays when unique X market. the Those be the a quarters. types acquired happened how industry, is on an just historically refleeting integration can There X kind or had, how example, do X be situation a an with we've how deploy merger, they consolidation that and Sprint seen out T-Mobile, on kind typically, in rental can the they on pause depending play respect unique. that CapEx major in creates those to more networks those the that historically, But going to And of customer, the acquisitions, of the carriers rationalize quarters can standpoint. kind or the has whenever cycles and acquisition depending situations. Those by assets the that there's it generally like in be telecon thing from side, and

of and gas and mean applications. used utilization go in Sometimes better the oil certain they're up, can in as gas, influenced prices that in oil equipment they're those regions where

vary, we've And X X but reliably. The to quarters. would the Historically, pretty can I beyond standby... seen say so timing

because I'm it it to can they turn we on if Like fast. off see sell going direct, to tend do turn or turn say quickly too. can you fast it, they they it

abrupt tend spending, can point. We be their off. on and capital orders as it good purchase pretty Really see Yes. York to them both while said, be, their can

that So closely. we watch very

of rental the we're in to capacity midrange our that market product, that the goes expanding refer we product as markets at the aimed some and reasons would of range One really we're is of C&I, temporary for actually which what as telecom market after well. power

aggressive products. our the terms customers. with share stance America and It's in strongest the our kind of there North in of that's are -- where And absolutely mid-range see we we these manufacturer

have segments, We XXXX. in bit outsized in is C&I of maybe getting why an competitors our we're more in than perhaps -- with share the some some a which these hurt of little

centers. competitors our of focused more a hyperscale on are Some the data little

there. don't said before, I As products we have

some So the competitors I as maybe our 'XX, we're at in from think the way markets of differ looking result. of some a

impacts on It's kind rate level projects standby the question we elongate kind of saw kind the your us. market, new of answer what To of starting to interest of kind beyond in cycle. to

So haven't through environment rate it's there new. been category, that with a product a higher rate so we

So lot belt. there. got we've We're get a our of trying cycles learning to under

ton really the It because one case differently It that the give the project end know market. we the depends costs the there market. of factors. So is a pencils rate in you every particular an just out customer on local use a the of in in utility project market, do on size, exact are every products thing the I can't depends

level cooling tell interest I rate like off if on. that interest level rate it you called it would we a don't say would say where So could there's will turn know X.X% back being we where to a vice versa, specific we specific that and I that we get

ton economics that just to markets, and factors on going into one. each go of depend improving I think that's a a particular in of just lot there's

Our next Joseph Osha question Guggenheim. with comes from

for I have questions product two you.

silicon time there. terms about were you're get the to with you The in in selling we pipe some the I I'm curious might What product AC see the outlook for the one strategy, as talking can second, given alongside architecture whether how you DC have storage. come. couple talking the coupled other for out point products tell relates -- micros, in if know and wait XXXX inverters first about people's of at line during us we an to to storage as you still you you be can some storage generators there. what about that we your particular is updated update storage And of the

Good Joe. all Yes. of questions, Thanks, those.

I the very to people didn't think truly launched product that was It really We -- who be unplugged a years grid, a was from we grid. so on isolated, aimed of a the couple at be ago. small of to independent wanted see it. from receptivity that generator the ton DC question,

battery to the AC an is coupling a as act as and opportunity our environment And going allow AC it's we forward a What to AC customers. better take existing to in charger probably think generator of opposed a products as is actually small host a product, AC-coupled through DC. generator an a

-- scale a even we the -- just So it's though offer away value our have terms us in louder. bit not -- it's structure, be bit generator terms just just just it's leverage to of allows taking it's a is, of cost we of quite there, because to better as we platform, but generators -- but -- can little the efficient frankly, AC bit it we might a in are little AC customers, little value better which

They consume not a maybe fuel, more materially. -- little use but little a

but to capability storage experience, from the The we year, not of a lower next-generation with We of asking capabilities AC Pika that you're it, coupling to cost product can sophisticated system. there away we're line. the So as inverters. of an more, the I'll generator it we is with that couple the kind going product architecture, it's new moving better That's so most later efficient for more today broader products improve AC kind headed this kind DC to call the coupling have going the battery inverter, direction and AC we a the generators, we're small our a a products, a and part coupling, can question, AC of stand-alone competitors experience, Pika the make take strategically experience as really a forward. introduce as

us to sets to offer forward if And are And a still then most up we is doing efficient microinverter go we going that clean believe I products efficient course, -- that. the coupling of nicely as the -- Pika way implementation, to that XXXX. do with you're there continue trip into mean we're products. the DC round sheet

a that out success. for have But and for and micro so at And we strategy our to now. system, roll continue place out in as least the we there's architecture think as we build inverters

I to think go. need tell us the we market where directionally will

a going in before to name product a we AC particular, would again, trying have because we're from to to inverter long forward. of think will solutions. There's us micro to test we've get and today, coupled capable kind in taken with reliability the to market a pointed that the are products out in architectures long of a on going on, got heavy way agree you proud do, to standpoint solutions we to proficient to stand time go with our support I the market some put very probably customers. that. is both for load time tend you, and that and But a we're our it's

And of that point of for that. basis in going that we're forward. a on us drag. talking It's it. We working that. be XXX to EBITDA huge It's through part that opportunity margins, the big we're think this successful to investment about, committed to we've a piece been XXX there's but

next from Trusit Jordan comes with Our Securities. question Levy

[indiscernible] on Jordan. for

I that dealer the the closed think to years. desire closer and As year it we X,XXX to XX,XXX. talked bring to count, about have relates And the coming with over you the number

you're to talk that sticking some that and there doing the maybe up? you can bring number it to the of work So makes more challenging points

saw -- in a year, Yes, in large think, We XXXX years last leading X,XXX dealer couple added kind that muted we've and imagine, in being the dealer got is, don't process right? XX%, -- the had absolutely. is a to was if 'XX. as account flatlined way, of question. increase over a would that count, I of some XX-month Great more our little there years you've Part dealers you dealer right? by that up anything basis, increases net you've a counts. a of we we So got, eye-popping of us the bought from a -- in for we we haven't basically count over And that the I on they purposes the think, period.

little bit a the think the about So hard talk ourselves about on it. we're and we maybe counts in dealer way we way

of this lot nice our target still network, But look the that that. had particular, that the X,XXX. it's count. the I headwinds think in basis we adds a rollover If were just actually are year, we we of net more total dealers to the of number to ads still gross to the you The than dealer really on at in a had, is XX,XXX targeting kind of some a where of and

adds we in call to we're category, bringing that offset as months, dark in we us and So that a call hasn't them, gross them from we bought put doors. them dark new dealer XX any door we dealers is but that in -- -- When have. we an

necessarily, interested a So years. as will. headwind also that get adding there. people churn talked it's environment, of of to over a softer softer being kind churn happens in had demand of There's certainly, tough more if isn't We power turn a kind you which of to last those the That right? there in that dealers, we happens category churn, that's a added have when lot couple of the you QX outage it's about if the XXXX, environments, dealers were

QX. So we in saw drop in-home consultations off

many headwinds. built to to we've things think One present and that army get zero, term, basically engaging people are So that businesses. trend also that today include primarily that to as going kind we're you're XX a this, people to we've HVAC we but on those with looked a open home contractors. from kind I have interesting years of seeing X,XXX this is XX,XXX to electrical ago deploying I probably out contractors, at there started services noted the of aperture think of of consolidation an And longer

home the of automation. or So this will versa getting business that contracting vice or into business electrical services plumbing of contractors broadening into of HVAC into suite Kind a or the offer.

kind get just then tell bringing HVAC relationships a the of bench, It's of of top that add giving where of of we have to. I opportunity can kind business. the they us with a to of into think dealers that contracting bring introduced upwards the cohorts into that, you ground XX,XXX X.X kind way, is want to and really and in for to on nice it homes new put of if contracting that feeding you fold, that Ecobee devices new would important And us in a in million they terms to sell

category in years all ahead. I'm confident we're the working very those XX,XXX to continues as of So pads, going to the expand get to

of kind the that's but date to haven't we the going definitely happen on So put continues a to pin grow. it's to going category as happen,

comes from Chip MKM. Moore Roth next with question Our

back any cyclical visibility growth to you've investments growth implications C&I to at potential the for for drive infrastructure And X-year a laid some you've to go those here with and for seen point targets some I since there? is wanted out? deterioration start Aaron, that then there Investor in help kick to of Day. maybe

great a it's question. Yes,

I equipment out. think, is moves obviously, think for going cycle kind The anything the cycle, certainly help will for of needle to off telecom there the infrastructure, the sure. shorten terms of play in cycle that rental I

schedules their some just there able networks. kind of themselves. build some into that network There with keep ran installations to the they kind their operators for the set we according being is had headwinds specific originally installation out, which bandwidth that build that like those of customers Some -- is kind at with pace speed some to they to out can of it's of have

We schedules. were giving product to the them according

really there's kind You because that's business but -- could maybe issue not it to it's of there of see with not a we much that cycle probably accelerating. cycle maybe inventory carried talk there's but one result. way somewhat we or say, some if calling field a okay, about I really that two inventory there as for, think point would can We're do customers, I the that to those or that don't we being know

movie it's out But the to cycles just again, way before. the that going think, it think I C&I seen have play out. plays this to we've I

visibility So is The a it question worry one. good us. really doesn't

but dated as we what got CapEx that are unfortunately, listen it them big from about and can plans POs the they a what write our because their big, to They've their use in now, for They things is probably we that write fleet others or of can they pencils, guidance customers same and -- are terms can -- and build-out can when and have we We kind wheel writing plans to that listen big to that's much these we people. are the because networks of world, right? their customers. big term as can for dialogue big best they in build-out POs stop we get the that with them big obviously proxy rental comes forecasts

we're them. business. some our see for all you IDC, continue quoting of we And is be won't pipeline we it, offsetting that, visibility, obviously, When visibility in area our of But unfortunately, look as it's distribution beyond XX%. year there. down we standby probably us is C&I, it of the because call in have terms independent offsetting we're our the growth we -- we and the offset to strength visibility But for out network C&I for is weakest in C&I which know some projects saying going to of this weakness the at our called

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so their order better visibility And a that much think, part these but can think, national volatile as some C&I, not I unfortunately, we much, the of account on be business that customers lot have, more patterns. of in in I in

as out pockets globe And in that that offset that growth the during the the well that rolled question of But plan some long-range we're think of part your was seeing last we we do there LRP the the softness. Investor are we some C&I Day. -- about I around how feel

off beyond team And -- standby customers that that that to I maybe turned think I business, they a think were fast. on as in think when rental turn expecting little select we think just the runs talking but because -- we we certain referring can them we're to Investor things in walking they Day the that through it's bit these think harder telecom materials, they back we were than they

So..

They in have LRP put the exactly. a cycle

just But down line maybe than back think bit harder to things 'XX in it. But call thought. was turning they're maybe the in the 'XX, it be little on with rig in 'XX, LRP they a going

with Housum question Northcoast Research. from Our comes Keith next

one I of to, given on rates. more in terms rate growth Just interest question Can in decline you environment HSPs how time, in is HSPs. the guess, the the me of guys This any focus critical or the terms remind quarter? interest of

Keith. Thanks, Yes.

we've you end. not in much, high as standby a -- interest the think talk at rate, it the rate-sensitive publicly a specifically. actually, is about in interest And made of hours. not as it's category, the but a through times, I we yes, X.X this, sorry home here said if get talked category we've you But know I to wait couple don't this particular, I highly

the higher other way way job environment about feel ticket kind on for rates people margins, the kind large macroeconomic the the the the of about on on have money around purchases or an impact with they security of feel have impacts, challenges people spending the issues but... does be obviously, maybe that Now

a financed. not It's highly

It's highly not a Oddly financed enough. purchase.

a like has through grew been said, it program that a program. financing which last year. Synchrony, have Now we great almost third-party XX% do

of when #X But the So we is peel see that the more thing onion cash. are same XX-month people using as you seeing then using finance. evidence the back, we people

we So going think X.X else's evidence for their think we -- they're doesn't that's necessarily don't deferring I that to payment they're just think not that that somebody cost -- me money that years. use

kind into there are look a cases. their you retired at that the lot and So cases, I all in -- these are probably -- people that paid of are are for have primarily that indications got think who we home don't older that sell they demographic Americans of in they're -- there. And

more the where protecting it's it's them, point it's at any is -- home, their time. -- safety frankly, protecting for their that more interest families. rates I about about And think in it their are protecting about So that than maybe

turn Rosemann for That time, I At concludes to session. like this to remarks. closing the back the call Kris would question-and-answer

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

your Thank for does the in participation you conference. conclude today's program. This

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