Q2 2019 Earnings Call
Good day and welcome to the Solar age conference call for the second quarter ended June Thirtyth 2019. This call is being webcast live on the company's website at Www Dot Solaredge dot com in the investors section on the event calendar page.
This call is the sole property and copyright of Solaredge with all rights reserved and any recording reproduction or transmission of this call without the express written consent of salary is prohibited.
You may listen to a webcast replay of this call by visiting the event calendar page of the solar H. Investor website, I would now like to turn the call over to Erica Mannion at Sapphire Investor Relations Investor Relations for silver rich.
Good afternoon. Thank you for joining us to discuss Stoneridges operating results for the second quarter ended June 32018, as well as the company's outlook for the third quarter of 2019 with me today are Guy Sella, founder Chairman and CEO and Ronnie fire Chief Financial Officer.
I will begin with a brief review of the results for the second quarter ended June 32019.
Ronan will review the financial results for the second quarter, followed by the company's outlook for the third quarter of 2019.
Then we will open the call up for questions.
Please note that this call will include forward looking statements that involve risks and uncertainties that could cause actual results to differ materially from management's current expectations.
We encourage you to review the Safe Harbor statements contained in our press release and the soccer slides published today for a more complete description.
All material contained in the webcast is the sole property and copyright of Solaredge technologies with all rights reserved. Please know this presentation describes certain non-GAAP measures, including non-GAAP net income and non-GAAP net diluted earnings per share, which are not measures prepared in accordance with U.S. GAAP.
The non-GAAP measures are presented in this presentation as we believe they provide investors with a means of evaluating and understanding how the company's management evaluates the company's operating performance.
These non-GAAP measures should not be considered in isolation from a substitute for or superior to financial measures prepared in accordance with U.S. GAAP.
Listeners, who do not have a copy of the quarter ended June 32019 press release or the presentation may obtain a copy by visiting the investors section of the company's website.
Now I will turn the call over to CEO Guy Sella.
Thank you Erica good afternoon, and thank you all for joining us on our conference call today.
I'm happy to report that we couldn't do their second quarter with very strong results.
We are reporting record revenues for the quarter.
We had within $25 million.
And increase of 20% from last quarter and about 43% from the same quarter last year.
These revenues also include a record quarter in our food business offered approximately $307 million.
We are presenting our solar business in our non solar business separately in order to enable our analysts and investors give full transparency for our solar business and its continued flexibility.
Separate from the results attributes to our recent acquisitions.
[noise] [laughter] give gross margin for this quarter was 34.1% while non-GAAP gross margin was 35.7 and non-GAAP gross margin for solar product was just dogs. This 37 cents.
[noise], let's look at me to lead to more depth into these very positive results.
Our revenues once again reached a record high this quarter alone record non-GAAP net income and record net diluted non-GAAP , earning per share.
94 cents.
Revenues from our solar business increased from last quarter by 21%.
Very rarely driven by the growth of our business in Europe continued trend strain in the United States. These miss in developmental few more.
This quarter Europe represent 48% to four solar revenues, which is an all time high.
He finds our growth slowing strengths in this region.
You know second quarter, we shipped 1.3 gigawatts of AC nameplate Inverters.
Approximately 430 megawatts, which will shift to our mirth.
Commercial sales comprised 44.3% to 4000 megawatts cheap these schools.
[noise] overall, we should reap point, that's a million power optimizers and hundred Tensixty thousand inverters, yet another quarter.
Also worth noting is that when we ended first quarter. This year, we announced that we had more than 1 million full system money towards in our board.
This quarter alone it could be another hundred Tenfifty thousand systems were added to our money for sleep, representing consistent growth in our installed base.
I want to take this opportunity to highlight some aspects of our business and I'd say some additional noteworthy Memphis.
Our solar business continues to be very strong.
Interrupted growth he says requiring we think our production capacity at an even faster pace then we'll see it in pieces. They did at the beginning of the year.
Based in Europe have picked up significantly and we have added meaningful fears in Brazil alone, we steady growth in Asia Pacific.
[noise] into United States. Despite these terrorist increase.
Well, maybe in China for all the students are on the right.
And we have significant backlog for the third and fourth quarter or did you forget rising are very strong.
The production adjustments to accommodate these growing needs are substantial.
This quarter alone we see so many 15 capacity by approximately 25%.
We expect it to all just to continue to meet this growth in demand.
We will need to increase our expedited shipping costs in the fourth forthcoming two quarters and diesel once again have a temporary impact on our gross margin, which is also embedded into our guidance.
To this end the ramp up of our Vietnam any factoring facility is well underway and there are already two ultamate to the optimizer line in wanting for two line installed in the new site.
We expect first mass production shipments in the third quarter of this year.
[noise], we continued to increase our investment in R&D and related expenditures in Oregon.
Further improved well fuel for existing product to introduce new products into dry dog product.
And moan Garen, new product use our three phase for these residential own breed storage and grow through to be used to be third party low voltage that for me.
We expect mass production of de converted to begin in the fourth quarter of this year.
At the Intersolar, we announced.
Another new development underway, we introduced a single phase HD wave inverter that integrates the managements, often on solar storage and home energy management into watching for.
The combination of all of these functions into one inverter will simplify installation improve system ROI and increase self consumption.
This new offering you schedule for mass production during Q3 of this year.
Also showcase it into solar were sold rich commercial is essential batteries, which will be added to the storage offering in order to provide a comprehensive storage solution.
Designed to provide flexible solar plus storage installation option hillary's batteries are expected to be available worldwide in the first half of 2020 why do we continue to support storage compatibility with most people battery vendors.
The batteries will be able to eat through a C or D C topical.
As mentioned when we purchased Qualcomm technological innovation requires significant financial investment and years of dedication and hard work force killed R&D engine years.
The work is now well underway in Korea, we Flynn for Coke comes new Mat sales production factory.
Our blends to 554. This factory is one to 1.8 gigawatt defending themselves type in Blaine.
[noise] the current estimation for the total investment requires.
He is approximately $50 million to $60 million for the equipment building and infrastructure, we expect between cure these expenditures over the coming 18 to 24 months.
So rich will many fixtures some of the equipment in house and other equipment will be ordered by year end.
The factories being designed to enable expansion for a total of 5.2 to three gigawatts cell production.
[noise] I would like to conclude with a brief loop with our bottom line numbers.
Our non-GAAP net income was $49 million.
We reported cash flow from operation of about $51 million in total cash and investments net of debt.
$352 million.
These figures are following the conclusion of the tender offer if memory at the end of April .
Our financial strength, which positions us.
Well to continue to develop innovative technology, bringing new products and new offerings to the solar market, while developing new products can you offerings for the other three business fillers.
Which are based on the frequency shouldn't that be completed.
All of this while managing effective cost reduction plan.
And before I hand, the speaker overthrow Nan, who will review our financial results.
Thank you Guy and good afternoon, everyone.
Before starting the review of our financial results for the second quarter of 2019, I would like to remind listeners that while the overview will be on a GAAP basis in certain cases, I will be discussing non-GAAP numbers and measures, which exclude stock based compensation onetime asset disposal change in deferred taxes onetime acquisition related expenses amortization and depreciation of acquired assets and cost of product adjustment related to the acquisition of SM are equal come into European Division.
Finance expenses related to the implementation of the revenue recognition standards and the adoption of the newly enacted leasing accounting standards as well as non-GAAP open and earning per share.
I will conclude the DC introduction by noting that the effect of the new acquisitions closed in the past several quarters on the GAAP results is meaningful as a result of 'em workstation of accounting elements identified in the preliminary purchase price allocation studies that we recently performed.
For a reconciliation of the pro forma to GAAP results discussed on this call is available on our website and in the press release issued today.
For the second quarter of 2019 total revenues were $325 million, a 20% increase compared to $271.9 million last quarter, and a 43% increase compared to $227.1 million for the same quarter last year.
Revenues from the sale of solar product for $306.7 million and were driven by strong growth in all regions regions.
Revenues from Europe reached an all time high and represented 48% of our solar revenues, reflecting strong growth, mainly in the Netherlands, Germany, Sweden and Poland.
You S. solar revenues also increased this quarter to $124.7 million, which continued to increase quarter over quarter and represented 41% of our sort of revenues.
Rest of the world sort of revenues were 11% and reached an all time high this quarter.
Our top 10, 'cause solar customers represented 63% of our quarterly sooner revenues and increased from the last quarter and two customers accounted for more than 10% of revenues.
Blended ASP increased this quarter, mainly due to price increases in the United States, which were implemented to mitigate the negative impact of the increase in tariffs on Chinese made products from 10% to 25%.
This quarter revenues from our non solar products were $18.3 million, mostly driven by the sales of lithium ion batteries and energy storage product and to a lesser extent revenues of automated machinery product from its cemetery and from U.P.S. products.
As the sales of those non solar activities are correct right with the positive seasonal effect towards year end. We expect these revenues to continue and grow in the coming two quarters.
GAAP gross margin for the quarter was 34.1% compared to 31.7% in the prior quarter and 36.1% in the same quarter last year.
non-GAAP gross margin this quarter was 35.7% compared to 32.8% in the prior quarter and 36.5% in the same quarter last year.
non-GAAP gross margin for disorder activities was 36.9% compared to 34.3% in the last quarter back to the normal 36% to 38% level.
This increase is primarily attributed to a more favorable geographic and product mix as well as well as successful implementation of cost reduction measures.
In the manufacturing of our products.
In addition expenses related to our warranty accrual represented a lower percentage of revenue as we continue to decrease the per unit cost or replaced units and improve our logistic processes.
Although U.S. tariff increase were entirely taken on by our customers. The net arpus medic effect on the U.S. of the U.S., a custom tariffs negatively impacted margins this quarter by approximately 80 basis points.
non-GAAP gross margin for our non sooner activities was 14.9% compared to 13.1% in the previous quarter.
Most of this increase is related to the sale of storage products, where we continue to see margin improvements.
As anticipated SMB margins negatively impacted this number.
Looking at gross margins for the next quarters, It's got as Guy mentioned before we're facing strong demand for our products. In addition, the Chinese new year, which significantly significantly slows down production you celebrate that this year very early heading to the capacity planning complexity.
Over the last month, we increased the capacity in China and are now ramping the Vietnam facility. So we're confident that our production capacity is sufficient to meet this growing demand.
What we cannot control without adding expenses, even shipment timing, we expect that in order to meet the growing demand we will increase our expedited shipment expenditures in the next few quarters.
The negative impact of additional shipping expenses on top of those already incurred in Q2 are estimated at 250 basis points for Q3.
So these we will also add the arithmetic effect of increasing tariffs on Chinese made products that will once again impact our Q3 margin.
Expectedly by about 180 basis points.
The increased revenues net of additional cost of good will positively impact our bottom line and we expect the negative impact of the gross margins to ease in Q2 2020.
Moving to operating expenses.
In total operating expenses for the second quarter, which included a full quarter of Esa Murray were $65.3 million or 20.1% of revenues compared to 58.1 million or 21.4% of revenues in the prior quarter and 241.3% or 18.2% of revenue for the same quarter last year.
On a non-GAAP basis operating expenses for the second quarter were $54.9 million or 16.9% of revenues compared to 48% million. They were 48 million or 17.7% of revenue in the prior quarter and 35.1 million or 15.5% of revenue for the same quarter last year, which did not include any of the acquired businesses.
Of these non-GAAP increase in operating expenses $5.1 million were related to our solar activities.
Our non-GAAP software operating expenses as a percentage of sooner revenues were 15.3% compared to 16.6% last quarter, representing a continued operational leverage we achieved as our solar revenues grow.
The remaining increase in non-GAAP operating expenses of $1.8 million is mainly derived from the addition of operating expenses if memory for a full quarter, which he did not fully encounter in Q1, and our continued investment in R&D and investment in developing our new businesses.
The bottom line result, he that our GAAP operating income for the quarter was $45.4 million compared to $28 million in the previous quarter and $40.7 million for the same period last year.
non-GAAP operating income for the quarter was $61 million compared to $41.2 million in the previous quarter and $47.8 million for the same period last year.
Financial income for the quarter was zero point $8 million compared to financial expense of $6.2 million into previous quarter, and a financial expense of $2.5 million for the same period last year.
This quarter, we had a tax expense of $13.2 million compared to $3.9 million in the prior quarter and $3.6 million for the same period last year.
Our non-GAAP tax expenses were $14.2 million compared to $4.9 million in the previous quarter and $5.3 million for the same period last year.
These 22% tax rate, which is higher than our annual forecast of approximately 15% tax rate is impacted by an increase in our guilty tax provision related to an increase of our forecasted profitability. This year.
GAAP net income for the second quarter was $33.1 million compared to GAAP net income of $19 million for the previous quarter and $34.6 million for the same quarter last year.
non-GAAP net income was a record $49.3 million compared to a non-GAAP net income of $32.9 million in the previous quarter and $40.6 million for the same quarter last year.
The nonsolar activities resulted in a $5.6 million non-GAAP net loss this quarter compared to a net loss of $2.8 million in the previous quarter, mostly related to seasonality into storage business and the inclusion of the full quarter of SMB activity in our financials.
GAAP net diluted earning per share was 66 cents for the second quarter compared to 39 cents in the previous quarter and 72 cents for the same quarter last year.
non-GAAP net diluted EPS was a record 94 cents compared to 64 cents in the previous quarter and 82 cents in the same quarter last year.
Our non-GAAP net diluted EPS was negatively impacted by approximately 11 cents as a result of the net losses related to our non solar activities.
Turning now to the balance sheet.
As of June 32019, cash cash equivalents bank deposits restricted bank deposits and investments were $373.6 million compared to $398.7 million on March 30, Onest 2019.
During the second quarter, we generated $50.8 million in cash from operation.
Actual cash paid in the second quarter for the purchase of the remaining SM or researchers was $64.7 million.
In addition, our balance sheet includes net debt of $22 million related to loans taken by coal come in as summary prior to the acquisition.
We repaid some of them are worried that this quarter and are expecting to continue to do so in the upcoming quarters.
In relation to the Coke come debt. Our current plans are to maintain this debt until we finalize the our final capital needs for Qualcomm relating to increasing our cell manufacturing capacity.
Hey, our net increased this quarter, reaching $237.8 million compared to $187.5 million last year last quarter.
Dsos this quarter in the solar business was 74 days, an increase from 68 days last quarter.
This increase is the result of higher shipment concentration in the later part of the quarter.
As of June 32019, our inventory level net of reserves was at $148.9 million compared to $150.8 million in the prior quarter.
Approximately $42 million of this amount relates to non solar inventory the majority of which is raw materials held by Qualcomm.
Moving now to guidance for the third quarter of 2019.
We expect revenues to be within the range of $395 million to $410 million.
Revenues from the sale of solar products are expected to be within the range of $375 million and $390 million.
We expect gross margins to be within the range of 32% to 34%.
Gross margins from sort or activities are expected to be within the range of 33% to 35%.
I will now turn the call over to the operator to open it up for questions operator. Please.
Thank you if you would like to ask a question. Please signal by pressing star one on your telephone keypad. If you were using a speaker phone. Please make sure. Your mute function is turned off to allow your signal to reach our equipment.
Again press Star one to ask a question.
We'll pause for just a moment to allow everyone an opportunity to signal for questions.
[noise] well take our first question from the heat and line of credit Suisse.
Hey, Thanks for taking my question and congratulations on the quarter.
Just with regards to the guidance. So can you just talk about how much of the revenue growth was driven by the U.S. business.
And specifically for the U.S. business or how should we think about the mix between organic growth was says demand pull in from the safe Harbor for the tax credits.
[noise].
So in general while we do not provide a breakdown for the exact revenues that will come from each and every region. We expect us to lead their revenues growth this quarter as we mentioned in previous calls.
The U.S market is usually correct arrived with a stronger second half and this is something that we also see at this point and therefore I would say that significant amount of this growth is coming from the U.S at least for Q3, we do not yet.
Encounter any safe Harbor.
Income.
At least for Q3.
Got it and then.
Just maybe on Q2 and probably until Q3 also can you just talk about the split between the residential and the commercial business for the U.S. markets just trying to understand.
How would you think about market share gains in both those segments for the quarter.
So.
In general we see that our commercial to residential ratio is very similar worldwide. Then you know sometimes changes from quarter to quarter, but in general It was this quarter, 44.3% and the US was not that dramatically different than what we see in the rest of the world. One thing to say, though is that you need to take into account that when we're shipping products. We're shipping them based on the demand that we see worldwide based on seasonality that we see in markets and.
You know inventory that our customers are holding so I'm not sure that it is possible to derive based on one quarter with our at the market share gains or losses, you can simply derived was we're shipping into the market itself, but not what these really installed there.
Got that.
That's helpful and just one last question just talk about the.
The drivers for the gross margin beat was the guidance in Q2 now jump back into queue. Thanks.
Yes sure.
So I think it's a combination of several things. The first thing that we see continued cost reduction that we do on the product we continue.
To come with new product generations to keep negotiate and keep increase.
Our manufacturing efficiencies and logistic efficiencies as much as we send product I think that and everything that happened. This quarter was the fact that as we said actually last year, we sold that the warranty.
Accrual for this quarter was already lower compared to the last quarters due to some efficiencies that we see on the per unit cost that we have for each and every shipments that were doing so the combination of these cost reductions better logistics and lower warranty expenses drove this growth and in addition to these of course, we also see.
From time to time changes in the mix of products. This quarter, we had the more favorable.
Mix of products related to.
To to the previous quarter.
Well, we can take our next question from Colin Rusch of Oppenheimer.
Okay and congrats on the strong performance I'm, just looking at Qualcomm in the Capex number that you guys walked us through could you talk us through what the Delta is between 50, and 70 million and where you'll end up from a capacity standpoint with that said.
So Dan total cost for the new factory will be 50, c. $50 million to $60 million before they possible extension.
They total capacities one point to 1.8. The main reason we currently are blending it Dan.
Factory to produce all day current available sales.
With the new sales, we need for our products and for all Dole promoting.
At this point, we believe that that once the factory will be ER in production, a we will be able already to reduce the amount of sales.
That we are selling and therefore, the capacity will be closer to one point 25 at 1.8, but it's a bit too far away to estimate they need to sell for the they needed cells for the expected sales.
Okay. That's helpful. I have a couple of follow ups offline and then just in terms of the design roadmap on the solar side could you talk with us a little bit about the cadence of cost reduction and evolution of the technology over the next call. It six quarters. It seems like there's a little bit more there than than we'd expected I just love to understand kind of what that roadmap looks like for you guys right now.
So I think that Ah, it's pretty clear the first that we have.
Three elements that we need to further or improve when compared to our competitors. The first one is the storage and as I reported a will come out in Q3 with the inverter that p. free phase residential mainly for the European market before or let's call. It the air out massive storage Europe already reached about 80% of new residential installation base in three phase Inverters.
Today, No one has in the market and effective three phase inverters. The support storage. This will be the first effective a 48 volt sorry any storage inverter.
Everybody's using low voltage batteries. So that's why we are developing the first product first but no. One has in three phase inverters, specifically for incidental to support storage. So that's the first AD product it will be in the market and we believe that it will contribute to grade growth in the coming here at two to six and probably more quarters.
In the natural addition to that is our own batteries with the combination of what we developed in house and the Kokomo acquisition. We can now develop much faster residential and commercial and batteries and those as I mentioned will be available in the beginning of 2020 as well.
What they didn't mention and that will give more details in the coming ER ER. Two calls is that we are developing a full range of much larger commercial inverters to be able to reduce the cost.
At a simplified installation and to be able to take even bigger market share in the commercial with a much better fit product than anything we see today in the market.
And the third element of course is the constant improvement of our product, which is a combination of improving the quality a while I think we solved all the major or it weren't major but all the problems that we suffered from like two three quarters ago, we still know like any other product and that's why the evolution is happening or how to improve those product and and we add take major part of R&D improve the existing products and reduce their cost.
Okay. Thanks, so much for us.
Thank you we'll take our next question from Philip Shen of Roth Capital Partners.
Hi, guys congrats on the strong results.
I'd like to talk about a more general question about demand was wondering if you think through.
All your shipment mix and your megawatts and the destinations what percentage of your demand currently do you think.
Is coming from and subsidize geographies. So the U.S. market is obviously subsidized.
And there might be a policies that supports certain countries, but which if you were to think through it what percentage of your 1.335 Gigawatts do you think is driven by unsubsidized demand and the reason why I ask this question is I'm trying to open peoples eyes up to the fact that solar is becoming.
Much more.
Economic as opposed to being subsidy driven.
Thanks.
As far as a as far as I know in and that and correct me if I'm wrong. There is no geography today, where the subsidies really influences. So I would say that they are all too vast majority of the demand is coming from and geographies this or not subsidized or did the subsidies really negligible.
Okay great.
Shifting.
Gears to.
The your capacity ramp it sounds like Vietnam is is ramping up as well.
Can you give a little more color on how thats going and then also.
When do you expect all of your shipments into the U.S. TV Terror free.
So.
As I gave all the data we it's moving according to plan, we will start mass production. In Q3, we are eight we didn't analyze that and second part of the question because we need to analyze and the demand the demand in the U.S.
Today that we see today for the second part of the year is dramatically bigger than what we see though in the end of 2018. So these analyses of when we will meet the higher demand haven't been done yet.
Okay.
But it sounds like demand is very strong in the back half so thats great or in terms of you. Thank you guys in terms of the utility scale product I know you just talked about.
Having a line that serves the much larger commercial inverters.
Can you update us on what your expectations are for the utility segment is that a segment that could that you could address.
And the next one or two years in a in a meaningful way.
Ah Yes, we're working on they think are unique brilliant solution I would expect that we will then be able to put a asked first Alfonso Steve solution sometime by the end of 2020 into operating 2020 , one, but since it's a really innovative development with lots of ER really core topologies and core concept onto we'll have the first units working I think that it won't be responsible to ensure any a substantial information.
Great. One last quick housekeeping question are you share the megawatts into the U.S. I think for Q2 of 430 megawatts or more for 440, sorry can you talk about how many megawatts you shipped to the European market in Q2.
Well then.
Yeah, I'll pull it I'll pull it and give it in Dr coal.
Okay. Okay.
Great Congrats again.
And thanks to both Rick I'll pass it on.
Thank you again to ask a question. Please press star one well take our next question from Jeff Osborne of Cowen and company.
Yeah, Congratulations guys on the results a couple of quick ones here Ronan <unk>, you mentioned that the expedite fees would be in place through I believe Q2 up 20.
Is that just a line of sight into demand in the U.S. in Q4 and Q Weiner.
Can you just talk about why you made that comment relative to the Vietnam facility ramping up I'm trying to get a.
So its a best of those variables at play and how they relate to each other.
So I think the answer is not necessarily just related to the demand, but also related to how production and overall shipment is behaving over the next few quarters as I mentioned in my script.
We are able to increase our capacity very well and as Guy mentioned, we increase it about a 25% up from Q1 to Q2, and we believe that you know what we build in China and what we're building now in Vietnam will be able to say to suffice for everything. The main problem is actually how do you ship everything and how do you bridge. The six weeks that usually a products are on a c. When you said it using marine shipment instead of air shipments that take only a few days. This is the only gap that we're not able to.
To bridge so in general the reason that I said to a Q2 2020 is because we take into account the demand that we see for Q3 and Q4 and know what we need to ship and what is there a production plan and shipping capacity outside of our factories into the United States.
Compared to the demand we understand that in Q1 because of the early Chinese new year, we will have a little bit of disruption in the manufacturing that again, we'll have to be compensated. Although we will have more capacity with expedited shipments to meet the demand while in Q2, we will already have capacity in place in our factories at the same time, we will be able to start shipping excess capacity that we manufacture compare to the men using ocean freight and then the ocean freight will displace the air shipments.
Got it that's helpful.
And then you mentioned in response to a prior questioners question about safe harboring you're not seeing any in my Q3 period can you just share with us any broad strokes around conversations for Q4 Q1 will agree do you anticipate that people would be safe harboring optimizers endorsing burgers.
With you folks are not.
I suggest that you know we will talk about that you know once we see more how this is formulating because you know the safe Harbor rules are relatively.
I would say complicated given work needs to be taken this year what needs to be paid this year and there are various ways to basically pay or get product in order to enjoy the safe Harbor regulations I can tell you that there are discussions that are taking place all of them are also discussed in there.
I would call it broader frame of what can be produced and what can be shipped and while we are assuming that we will see some safe harbors the shape or form and numbers will be disclosed I believe closer towards the end of the year.
Got it my last question is just can you remind us as you formulate your guidance here, we are five weeks into the quarter, what typically visibility do you have into the guidance provided historically a door for this quarter, you mentioned, great visibility and longer lead times, where we have very very very good visibility into the numbers. We gave you.
Hi, good games. Thank you.
Thank you at this time, we have no further questions I will turn it back to Guy Sella for closing remarks.
[noise] just before the closing remark in all of the last calls people were asking us about the market share of the US again, the other MLP company beside me there haven't been asked but they decided to a healthier beat then give you the details from the only objective source in the market.
So as we are as we said in the past there is no ability for a company to measure market share of newly installed system. The only one that I see constantly ease greentech media.
Since Q1, 2018, Greentech media show steady growth of Solaredge market share in the U.S. residential market from 45.7% in Q1 2018 to 59.5 in Q1 2019.
At the same time tell Greentech media again, the other MLP company Marketshare front from 23.1 in Q1 2018 17.1 in Q1 2019.
[noise] as you May know.
The other MLP company acquired the micro inverter business for Sunpower on Oahu, and 2018 and seen this quarter. They're also include the sales of Sunpower.
At.
Even when combining all into taking into the share of the other MLP company the Sunpower ER.
Micro inverter business since Q4 2018, the combined share decreased from 29.2% in Q4 2018 to 26.8 in Q1 2018 and 19.
And lastly to those who try to calculate market share from reported shipment. The shipment number are not representing market share trends and these are effected by customer inventory.
I hope these that will give you the motivation to get into the numbers of market share from Greentech media, rather from the shipment numbers that the companies that reported on themselves.
And now we'll go to my summary in summary, our second quarter results show continued successful execution of our business strategy with record revenues and consistently stable profitability. We are well positioned to continue the growth of our business with new product offering in the solar business and are confident that our acquired business will in time also create value far beyond the solar market, which is currently.
Thank you all very much for joining us on today's call all the best.
Thank you ladies and gentlemen. This concludes today's conference you may now disconnect.