Enphase Energy Inc (ENPH) 2017 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Enphase Energy's Fourth Quarter 2017 Financial Results Conference Call. (Operator Instructions) As a reminder, this conference call may be recorded.

女士們、先生們，美好的一天，歡迎參加 Enphase Energy 2017 年第四季財務業績電話會議。（操作員說明）謹此提醒，本次電話會議可能會被錄音。

I would now like to introduce your host for today's conference, Ms. Christina Carrabino. Ma'am, you may begin.

現在我想介紹今天會議的主持人克里斯蒂娜·卡拉比諾女士。女士，您可以開始了。

Good afternoon, and thank you for joining us on today's conference call to discuss Enphase Energy's Fourth Quarter and Year-end 2017 Results. On today's call are Badri Kothandaraman, Enphase's President and Chief Executive Officer; Bert Garcia, Chief Financial Officer; and Raghu Belur, Chief Product Officer.

下午好，感謝您參加今天的電話會議，討論 Enphase Energy 的 2017 年第四季和年底業績。參加今天電話會議的有 Enphase 總裁兼執行長 Badri Kothandaraman；伯特·加西亞，財務長；和 Raghu Belur，首席產品長。

After the market closed today, Enphase issued a press release announcing the results for its fourth quarter and year ended December 31,2017. During the course of this conference call Enphase management will make forward-looking statements, including but not limited to statements related to Enphase Energy's financial performance, market demands for its current and future products, advantages of its technology and market trends. These forward-looking statements involve significant risks and uncertainties, and Enphase Energy's actual results and the timing of events could differ materially from these expectations. For a more complete discussion of the risks and uncertainties, please see the company's quarterly report on Form 10-Q for the quarter ended September 30, 2017, which is on file with the SEC; and the annual report on Form 10-K for the year ended December 31,2017, which will be filed with the SEC in the first quarter of 2018.

今天收盤後，Enphase 發布新聞稿，宣布截至 2017 年 12 月 31 日的第四季和全年業績。在本次電話會議期間，Enphase 管理層將做出前瞻性聲明，包括但不限於與 Enphase Energy 的財務表現、當前和未來產品的市場需求、技術優勢和市場趨勢相關的聲明。這些前瞻性陳述涉及重大風險和不確定性，Enphase Energy 的實際結果和事件發生的時間可能與這些預期有重大差異。有關風險和不確定性的更完整討論，請參閱本公司截至 2017 年 9 月 30 日的季度 10-Q 表格季度報告，該報告已向 SEC 備案；以及截至2017年12月31日的10-K表格年度報告，該報告將於2018年第一季向美國證券交易委員會提交。

Enphase Energy cautions you not to replace any undue reliance on forward-looking statements and undertakes no duty or obligations to update any forward-looking statements as a result of new information, future events or changes in its expectations.

Enphase Energy 提醒您不要取代對前瞻性陳述的任何不當依賴，並且不承擔因新資訊、未來事件或預期變更而更新任何前瞻性陳述的責任或義務。

Also, please note that financial measures used on this call are expressed on a non-GAAP basis unless otherwise noted and have been adjusted to exclude certain charges. The company has provided reconciliations of these non-GAAP financial measures to GAAP financial measures in its earnings release posted today, which can also be found in the Investor Relations section of its website.

另請注意，除非另有說明，本次電話會議中使用的財務指標均以非公認會計原則為基礎，並已進行調整以排除某些費用。該公司在今天發布的收益報告中提供了這些非公認會計原則財務指標與公認會計原則財務指標的調節表，該報告也可以在其網站的投資者關係部分找到。

Now I'd like to introduce Badri Kothandaraman, President and Chief Executive Officer of Enphase Energy. Badri?

現在我想介紹一下Enphase Energy公司總裁兼執行長Badri Kothandaraman。巴德里？

Good afternoon, and thanks for joining us today to discuss our fourth quarter and full year 2017 financial results.

下午好，感謝您今天加入我們討論我們的 2017 年第四季和全年財務表現。

We had a profitable quarter. We reported revenue of $79.7 million for the fourth quarter of 2017, at the higher end of guidance. Our non-GAAP gross margin in the fourth quarter was 24.2%, also at the higher end of guidance. Our non-GAAP operating income was $1.3 million. This return to profitability represents a significant milestone for the company. My top priority at Enphase is to build a solid financial foundation by improving operations and fortifying the balance sheet. We are making excellent progress toward achieving our target 30-20-10 financial operating model. We are targeting 30% gross margin, 20% operating expenses and 10% operating income all by the fourth quarter of 2018.

我們有一個獲利的季度。我們報告 2017 年第四季的收入為 7,970 萬美元，處於指導值的上限。我們第四季的非 GAAP 毛利率為 24.2%，也處於指引值的較高水準。我們的非 GAAP 營業收入為 130 萬美元。此次恢復盈利對公司來說是一個重要的里程碑。我在 Enphase 的首要任務是透過改善營運和強化資產負債表來建立堅實的財務基礎。我們正在朝著實現 30-20-10 財務營運模式的目標取得巨大進展。我們的目標是到 2018 年第四季毛利率達到 30%，營運費用達到 20%，營運收入達到 10%。

In 2017, we sequentially increased our non-GAAP gross margin every quarter from 13.3% in Q1 '17 to 24.2% in Q4 '17. This margin improvement came from the IQ 6 transition, supply chain optimization and pricing management.

2017 年，我們每季的非 GAAP 毛利率都從 17 年第一季的 13.3% 增加到 17 年第四季的 24.2%。這一利潤率的提高來自於 IQ 6 轉型、供應鏈優化和定價管理。

On supply chain optimization, we were laser focused on IQ 6 transition in 2017. We successfully executed on multi-sourcing strategies for our microinverter components and accessories in addition to reducing overhead costs. In short, we went through a major cultural transformation and developed systematic business processes for achieving world-class [costs] with cross-functional teams spanning the entire company.

在供應鏈優化方面，2017 年我們將重點放在 IQ 6 過渡。除了降低管理成本外，我們還成功地對微型逆變器組件和配件執行了多採購策略。簡而言之，我們經歷了重大的文化轉型，並開發了系統的業務流程，以透過涵蓋整個公司的跨職能團隊來實現世界一流的[成本]。

We introduced IQ 7 in the fourth -- in the first quarter of 2018. We expect IQ 7 transition to be fully complete in 2018, leading to further improvement in our gross margin. It is important to note that IQ 7 is a worldwide product SKU, and every one of our regions will transition to IQ 7. This is a notable difference from IQ 6, which was primarily a North American product.

我們在 2018 年第四季（第一季）推出了 IQ 7。我們預計 IQ 7 過渡將於 2018 年全面完成，從而進一步改善我們的毛利率。值得注意的是，IQ 7 是一款全球產品 SKU，我們的每個地區都將過渡到 IQ 7。

Another lever that is instrumental in gross margin improvement is pricing management. We have been disciplined in keeping pricing flat for the last couple of quarters. We have established a dedicated pricing team, led by a senior executive, to underscore its importance. The pricing management in 2017 was focused on transactional control, which is establishing policies and procedures and executing them rigorously. In 2018, we will focus our efforts on value creation for installers through product segmentation, for example, introducing high-performance AC modules with our partners. In recent interviews which we conducted with installers on their AC module experience, they reported installation time savings up to 20%, logistic savings up to 10% and simpler inspection procedures when compared to a discrete solution.

另一個有助於提高毛利率的槓桿是定價管理。過去幾季我們一直嚴格要求定價不變。我們建立了一個由高階主管領導的專門定價團隊，以強調其重要性。2017年的定價管理重點是交易控制，即制定政策和程序並嚴格執行。2018年，我們將重點透過產品細分為安裝商創造價值，例如與合作夥伴一起推出高性能空調模組。在我們最近對安裝人員進行的關於交流模組經驗的訪談中，他們表示與分立解決方案相比，安裝時間節省高達 20%，物流節省高達 10%，並且檢查程序更簡單。

In summary, we are confident of achieving our 30-20-10 financial model by Q4 '18 with continued cost management via supply chain optimization and IQ transition, combined with pricing management.

總而言之，我們有信心在 18 年第 4 季實現我們的 30-20-10 財務模型，透過供應鏈優化和 IQ 轉型以及定價管理來持續進行成本管理。

Now turning to the balance sheet. We exited the fourth quarter with a cash balance of $29.1 million and recently closed a $20 million private equity investment. This additional liquidity will allow us to grow our market share as well as accelerate our cost-savings initiatives. We have also sharpened our focus on improving AR, AP and inventory management business processes to improve the cash conversion cycle. Bert will go into greater detail about our financial results later in the call.

現在轉向資產負債表。我們第四季結束時的現金餘額為 2,910 萬美元，最近完成了 2,000 萬美元的私募股權投資。這些額外的流動性將使我們能夠擴大市場份額並加速我們的成本節約計劃。我們也更重視改善 AR、AP 和庫存管理業務流程，以改善現金週轉週期。伯特將在稍後的電話會議中更詳細地介紹我們的財務表現。

Now turning to our markets. The fourth quarter revenue in the U.S. was up 4% sequentially. We completed the transition to our IQ 6 product for our North American customers during the third quarter, and substantially, all fourth quarter inverter shipments to the region were IQ 6.

現在轉向我們的市場。美國第四季營收季增 4%。我們在第三季為北美客戶完成了向 IQ 6 產品的過渡，基本上，在第四季度向該地區發貨的所有逆變器均為 IQ 6。

In Europe, revenue was up 1% sequentially and 66% year-on-year. We maintained our market share lead in France and grew market share in Netherlands. We look forward to introducing IQ in Europe and increasing our served available market by entering Germany and Austria.

在歐洲，營收季增 1%，年增 66%。我們在法國保持市場份額領先地位，並在荷蘭增加市場份額。我們期待將 IQ 引入歐洲，並透過進入德國和奧地利來擴大我們所服務的可用市場。

In APAC region, revenue increased 51% sequentially as the demand for our products continued to grow, and we added to our customer base. India is starting to ramp revenue for us, and we expect the business to grow significantly in 2018. Both IQ 6+ and IQ 7+ are already certified for India. We opened an R&D center in Bangalore, India during the fourth quarter. Our presence in India enables us to leverage the enormous talent available to grow the business worldwide while maintaining control on the OpEx. In addition, we see a growing commercial opportunity for Enphase in India as the country is powering the growth of solar with its ambitious target for clean energy.

在亞太地區，隨著對我們產品的需求持續成長以及我們的客戶群不斷擴大，營收季增了 51%。印度正開始增加我們的收入，我們預計 2018 年業務將大幅成長。IQ 6+ 和 IQ 7+ 均已獲得印度認證。我們於第四季在印度班加羅爾開設了研發中心。我們在印度的業務使我們能夠利用大量可用人才來發展全球業務，同時保持對營運支出的控制。此外，我們看到 Enphase 在印度的商業機會不斷增長，因為該國正在透過其雄心勃勃的清潔能源目標來推動太陽能的成長。

In the Latin American market, the fourth quarter revenue was down 58% sequentially as a continued result of the devastating hurricanes in Puerto Rico that occurred last August and September impacting overall shipments to the region. Mexico, however, remains a strong market for Enphase.

在拉丁美洲市場，由於去年 8 月和 9 月發生在波多黎各的毀滅性颶風持續影響了該地區的整體出貨量，第四季營收季減了 58%。然而，墨西哥仍然是 Enphase 的一個強勁市場。

Moving on to products. We released IQ 7 in January 2018. IQ 7 is segmented into 3 variants: the 250-watt AC IQ 7 for 60-cell modules; the 295-watt AC IQ 7+ for 60- and 72-cell modules; and the 320-watt AC IQ 7X for 96-cell modules. Note that IQ 6 was not compatible with 96-cell modules. IQ 7X fills that gap now and makes that market available to us. We have started shipping IQ 7 to our U.S. customers, and we expect to start shipping to rest of the world in the second quarter. We are experiencing the industry-wide component shortages in our IQ 7 rollout, and we are working diligently through the issues.

轉向產品。我們於 2018 年 1 月發布了 IQ 7。IQ 7 分為 3 個版本： 60 芯模組的 250 瓦 AC IQ 7；適用於 60 片和 72 片電池模組的 295 瓦 AC IQ 7+；以及 96 芯模組的 320 瓦 AC IQ 7X。請注意，IQ 6 與 96 芯模組不相容。IQ 7X 現在填補了這一空白，讓我們能夠進入這個市場。我們已開始向美國客戶運送 IQ 7，預計第二季開始向世界其他地區運送。在 IQ 7 的推出過程中，我們遇到了全行業的組件短缺問題，我們正在努力解決這些問題。

We recently announced a strategic partnership with Panasonic Corporation of North America for the development of high-efficiency AC modules using our IQ 7X microinverter, which addresses 96-cell modules. In addition, we are working with several other partners on IQ 7-based AC modules.

我們最近宣布與北美松下公司建立策略合作夥伴關係，利用我們的 IQ 7X 微型逆變器開發高效交流模組，該逆變器適用於 96 芯模組。此外，我們正在與其他幾個合作夥伴合作開發基於 IQ 7 的 AC 模組。

While IQ 7 provides us with a good platform for growth in 2018 worldwide, IQ 8, based on our grid-agnostic, always-on Ensemble technology, has the capability to transform our future by increasing -- by creating new market opportunities. So one of solar's biggest challenges is that it is grid tied. What that means is if the grid is failing and the sun is still shining, there will be no production out of your solar system. To address this limitation, we have invented a microinverter technology that is completely grid agnostic. The Enphase system's capability is further enhanced when the Ensemble technology is incorporated into our AC Battery storage solution. With IQ 8, you can have a system that will continuously provide energy regardless of the presence or absence of the grid, that is solar during the day and storage at night. This is what we refer to as always on. We continued to make progress on IQ 8 during the fourth quarter.

雖然 IQ 7 為我們在 2018 年全球範圍內的成長提供了良好的平台，但 IQ 8 基於我們與電網無關、始終在線的 Ensemble 技術，有能力透過增加創造新的市場機會來改變我們的未來。因此，太陽能面臨的最大挑戰之一是它併網。這意味著，如果電網故障而陽光仍然照耀，那麼太陽系將不會產生任何生產。為了解決這個限制，我們發明了一種完全與電網無關的微型逆變器技術。當 Ensemble 技術融入我們的交流電池儲存解決方案時，Enphase 系統的功能會進一步增強。有了 IQ 8，您就可以擁有一個無論是否有電網都可以持續提供能源的系統，即白天提供太陽能，晚上提供儲存能源。這就是我們所說的始終開啟。第四季我們在 IQ 8 方面繼續取得進展。

The ASIC used in IQ 8 represents a mini power plant and is the brain of the microinverter. We are pleased to report that the ASIC is fully functional, demonstrating the feasibility of Ensemble technology. The ASIC has 5 million gates and is made in 55-nanometer state-of-the-art technology at TSMC, enabling very high-speed digital signal processing. We are continuing to productize IQ 8, and we expect to introduce it in 2019. We will update you on IQ 8's progress over the coming quarters.

IQ 8 中使用的 ASIC 代表微型發電廠，是微型逆變器的大腦。我們很高興地報告，ASIC 功能齊全，證明了 Ensemble 技術的可行性。該 ASIC 擁有 500 萬個閘門，採用台積電最先進的 55 奈米技術製造，可實現超高速數位訊號處理。我們正在繼續將 IQ 8 產品化，預計在 2019 年推出。我們將向您通報 IQ 8 在未來幾季的最新進展。

In summary, we are encouraged by our overall progress in 2017. Our 30-20-10 transformation is going well. We are committed to creating a solid financial foundation with further gross margin expansion and sustained profitability in 2018. I would like to thank our employees for their hard work and dedication and our customers, partners and shareholders for their continued support and interest in Enphase.

總而言之，我們對 2017 年的整體進展感到鼓舞。我們的 30-20-10 轉型進展順利。我們致力於在2018年打造堅實的財務基礎，進一步擴大毛利率並實現持續獲利。我要感謝我們的員工的辛勤工作和奉獻精神，以及我們的客戶、合作夥伴和股東對 Enphase 的持續支持和關注。

Now I will turn the call over to Bert for his review of our financial results. Bert?

現在我將把電話轉給伯特，請他審查我們的財務表現。伯特？

Thanks, Badri. I'll provide more details related to our fourth quarter and fiscal year 2017 financial results as well as our business outlook for the first quarter. As a reminder, the financial measures that I'm going to provide are on a non-GAAP basis, unless otherwise noted.

謝謝，巴德里。我將提供有關我們第四季度和 2017 財年財務業績以及第一季業務前景的更多詳細資訊。提醒一下，除非另有說明，我將提供的財務指標均以非公認會計原則為基礎。

Total revenue for the fourth quarter 2017 was $79.7 million, an increase of 3% sequentially. Total net revenue for DC watt decreased from 11% -- by 11% in the fourth quarter of 2016, consistent with our expectations for year-over-year reductions in ASPs. Total revenue for 2017 was $286.2 million, representing shipments of approximately 2.9 million microinverters and 837 megawatts DC, a 1% year-over-year decrease in megawatts shipped. We shipped approximately 221 megawatts DC in the fourth quarter of 2017, a decrease in megawatts of 4% sequentially. The megawatts shipped represented 755,000 microinverters, approximately 73% of which were our new IQ Microinverter Systems.

2017 年第四季總營收為 7,970 萬美元，季增 3%。2016 年第四季度，直流瓦特的總淨收入下降了 11%，下降了 11%，這與我們對平均售價年減的預期一致。2017年總營收為2.862億美元，微型逆變器出貨量約290萬台，直流發電量為837兆瓦，較去年同期下降1%。2017 年第四季，我們的直流出貨量約為 221 兆瓦，比上一季減少 4%。出貨量為 755,000 兆瓦微型逆變器，其中約 73% 是我們新的 IQ 微型逆變器系統。

As Badri mentioned, we completed the transition to our IQ 6 products for our North American customers during the third quarter. And as a result, substantially all fourth quarter shipments to these regions were our IQ 6 product.

正如 Badri 所提到的，我們在第三季為北美客戶完成了向 IQ 6 產品的過渡。因此，在第四季度向這些地區發貨的基本上都是我們的 IQ 6 產品。

Non-inverter revenue, which includes our AC Battery storage solution, Envoy Communications Gateway and all accessories, increased as a percentage of revenue compared to our prior quarter results.

與上一季業績相比，非逆變器收入（包括我們的交流電池儲存解決方案、Envoy 通訊閘道和所有配件）佔收入的百分比有所增加。

Non-GAAP gross margin for the fourth quarter of 2017 was 24.2% compared to 21.8% for the third quarter. We're pleased with the progress we have made with our gross margin expansion. The increase reflects the transition to our IQ Microinverter System in North America and the improvements to date we've implemented on our supply chain optimization initiatives and pricing management. Gross margin was negatively impacted by approximately 1%, related to expedite fees that we incurred because of industry-wide component shortages.

2017 年第四季非 GAAP 毛利率為 24.2%，第三季為 21.8%。我們對毛利率擴張所取得的進展感到滿意。這一成長反映了我們在北美向 IQ 微型逆變器系統的過渡，以及迄今為止我們在供應鏈優化計劃和定價管理方面實施的改進。毛利率受到約 1% 的負面影響，這與我們因全行業零件短缺而產生的加急費用有關。

Non-GAAP operating expense increased approximately $1 million sequentially from $16.9 million in Q3 to $18 million in Q4, primarily due to an increase in R&D expenses related to the development of our IQ 8 product. As compared to the fourth quarter of 2016, we reduced non-GAAP operating expenses by 23% or $5.5 million, reflecting the cumulative impact of restructuring actions and operational efficiencies we've implemented. Non-GAAP operating expense in the fourth quarter of 2017 excluded $2 million of restructuring charges and $1.2 million of stock-based compensation expense.

非 GAAP 營運費用較上季增加約 100 萬美元，從第三季的 1,690 萬美元增加到第四季的 1,800 萬美元，主要是由於與 IQ 8 產品開發相關的研發費用增加。與 2016 年第四季相比，我們將非 GAAP 營運費用減少了 23%，即 550 萬美元，反映了我們實施的重組行動和營運效率的累積影響。2017 年第四季的非 GAAP 營運費用不包括 200 萬美元的重組費用和 120 萬美元的股票補償費用。

Non-GAAP operating expense for 2017 was $72.8 million compared to $107.6 million in 2016. This 32% decrease is reflective of our hard work and commitment towards establishing a solid financial foundation. We believe, we've laid the groundwork for 2018 to be successful and grow our business.

2017 年非 GAAP 營運費用為 7,280 萬美元，而 2016 年為 1.076 億美元。32% 的下降反映了我們為建立堅實的財務基礎所做的努力和承諾。我們相信，我們已經為 2018 年的成功和業務發展奠定了基礎。

On a non-GAAP basis, income from operations was $1.3 million compared to an operating loss of $104,000 in Q3. We are extremely pleased with -- that we've achieved non-GAAP operating profitability. Our non-GAAP net income was $683,000 resulting in $0.01 per share compared to a non-GAAP net loss of $964,000 in Q3 or a loss of $0.01 per share.

以非公認會計準則計算，營運收入為 130 萬美元，而第三季營運虧損為 104,000 美元。我們非常高興我們實現了非公認會計原則營運獲利。我們的非 GAAP 淨利潤為 683,000 美元，每股虧損 0.01 美元，而第三季非 GAAP 淨虧損為 964,000 美元，每股虧損 0.01 美元。

On a full year basis, non-GAAP net loss for 2017 was $20.5 million or a loss of $0.25 per share compared to a non-GAAP net loss of $52.4 million or a loss of $1.06 per share in 2016. The significant year-over-year improvement underscores the substantial work we've done over the past 12 months to solidify our financial footing.

以全年計算，2017 年非 GAAP 淨虧損為 2,050 萬美元，即每股虧損 0.25 美元，而 2016 年非 GAAP 淨虧損為 5,240 萬美元，即每股虧損 1.06 美元。同比的顯著改善突顯了我們在過去 12 個月中為鞏固財務基礎所做的大量工作。

Now turning to the balance sheet. Inventory was $26 million for the fourth quarter compared to $25.3 million in the third quarter and $32 million in the year-ago quarter. As Badri mentioned, inventory management is one of our key cash management initiatives in 2018. We exited the quarter with total cash balance of $29.1 million, a slight increase from the Q3 balance. On February 9, we sold approximately 9.5 million shares of the company's common stock and a private equity investment at a price of $2.10 per share for gross proceeds of $20 million.

現在轉向資產負債表。第四季庫存為 2,600 萬美元，而第三季庫存為 2,530 萬美元，去年同期庫存為 3,200 萬美元。正如 Badri 所提到的，庫存管理是我們 2018 年關鍵的現金管理措施之一。本季末，我們的現金餘額總額為 2,910 萬美元，比第三季餘額略有增加。2 月 9 日，我們以每股 2.10 美元的價格出售了約 950 萬股公司普通股和私募股權投資，總收益為 2,000 萬美元。

Now let's discuss our outlook for the first quarter of 2018. We expect our revenue for the first quarter of 2018 to be within the range of $65 million to $70 million. Turning to margins, we expect GAAP and non-GAAP gross margin to be within a range of 22% to 25%. Note that our Q1 gross margin guidance includes the negative impact of higher expedite fees resulting from industry-wide component shortages. We expect our non-GAAP operating expense for the first quarter to be within a range of $17.5 million to $18.5 million and GAAP operating expense to be with a range of $19.5 million to $20.5 million, including an estimated $2 million of stock-based compensation expense.

現在讓我們來討論一下我們對 2018 年第一季的展望。我們預計 2018 年第一季的營收將在 6,500 萬美元至 7,000 萬美元之間。談到利潤率，我們預計 GAAP 和非 GAAP 毛利率將在 22% 至 25% 的範圍內。請注意，我們的第一季毛利率指引包括因全行業零件短缺而導致的加急費上漲的負面影響。我們預計第一季的非 GAAP 營運費用將在 1,750 萬美元至 1,850 萬美元之間，GAAP 營運費用將在 1,950 萬美元至 2,050 萬美元之間，其中包括估計 200 萬美元的股票薪資費用。

Now I'll open up the line for questions.

現在我將開通提問熱線。

(Operator Instructions) Our first question comes from Eric Stine from Craig-Hallum.

（操作員說明）我們的第一個問題來自 Craig-Hallum 的 Eric Stine。

Maybe just start with the IQ 7 and just to confirm, did you say you're rolling that out in Q2? And as we think about some of the new markets you're entering, I mean, which ones should we look to be meaningful contributors first maybe in Europe and also in Asia?

也許只是從 IQ 7 開始，只是為了確認一下，你是說你會在第二季推出它嗎？當我們考慮您正在進入的一些新市場時，我的意思是，我們應該首先考慮哪些市場成為有意義的貢獻者，也許是在歐洲，也可能是在亞洲？

So let me talk about the IQ 7 rollout. We announced that we are rolling out IQ 7 in Q1 of '18, which is this quarter. So we have already done that in North America. We are going to roll out IQ 7 in the rest of the world in the second quarter of 2018. And let me remind you of all the benefits of IQ 7. So IQ 7 produces 4% more power, it's about 17% smaller and 19% lighter than IQ 6, providing a value to installers. It is a single worldwide SKU, so that it improves product velocity and operational efficiency, which is inventory. And IQ 7 expands our served available market, which is primarily in Europe and Asia Pacific. When I'm talking about Europe, I mean Germany and Austria. When I'm talking about APAC, I mean India. So -- and if you note, the rest of the world product is moving from the fifth generation of microinverter to the seventh generation of microinverter, which is IQ 7, so that is gross margin expansion. And IQ 7 ACM will inherit those benefits. The last one, which is icing on the cake, is IQ 7X. Note that IQ 6 was not compatible to 96-cell modules, and IQ 7X changes that. Our 320-watt AC IQ 7X is comparable to 96-cell modules, and it has 97.5% CEC efficiency. So it addresses a huge portion of the market in North America which was not available to us previously in IQ 6.

讓我來談談 IQ 7 的推出。我們宣布將在 18 年第一季（即本季）推出 IQ 7。所以我們已經在北美做到了這一點。我們將於 2018 年第二季在世界其他地區推出 IQ 7。讓我提醒您 IQ 7 的所有優勢。它是單一的全球SKU，因此它提高了產品速度和營運效率，即庫存。IQ 7 擴大了我們服務的可用市場，主要在歐洲和亞太地區。當我談論歐洲時，我指的是德國和奧地利。當我談論亞太地區時，我指的是印度。因此，如果您注意到的話，世界其他地區的產品正在從第五代微型逆變器轉向第七代微型逆變器，即 IQ 7，所以這是毛利率的擴張。IQ 7 ACM 將繼承這些優勢。最後一項更是錦上添花，IQ 7X。請注意，IQ 6 與 96 芯模組不相容，IQ 7X 改變了這一點。我們的 320 瓦 AC IQ 7X 與 96 片電池模組相當，並且具有 97.5% 的 CEC 效率。因此，它解決了北美市場的很大一部分問題，而這在先前的 IQ 6 中是無法實現的。

Okay. Got it. That is extremely helpful. And I guess just talking about the benefits there on the installation side, and I guess this also kind of works with the AC module as well, just you mentioned a positive feedback from installers. Just curious how that is playing in the market given that it sounds like in response to the tariffs, that a lot of installers are choosing to absorb that cost rather than pass it on,

好的。知道了。這非常有幫助。我想只是談論安裝方面的好處，我想這也適用於交流模組，剛才您提到了安裝人員的積極回饋。只是好奇這在市場上的表現如何，因為這聽起來像是對關稅的回應，許多安裝商選擇吸收該成本而不是轉嫁成本，

Yes, so let me start with the AC module. So the AC module provides a lot of value by absorbing the field assembly of the module and microinverter into the factory by integration. You know that we announced ACM partnerships with LG, Jinko, SolarWorld and Waaree in 2017. We started shipping microinverters to our ACM partners from June 2017, and they started hitting the channel in October of 2017. We have also involved -- I mean, been heavily involved, along with our partners, in training and evangelizing ACM with installers. I'd like to remind you once again that our interviews with installers have indicated up to 20% savings on installation time and 10% savings on logistics. We are working with a number of other module partners and will announce them when we are ready. We already told you about the Panasonic partnership as well for IQ 7X ACM, which addresses 96-cell modules. Let me now come to the 201 case. So the 201 case has created some headwinds on our ACM progress. The tariff inadvertently affects the ACM while the intention of the tariff was only for cells and modules, so we are actually diligently working on getting exclusion on the microinverter portion of the ACM tariff, and we are working with the USTR on that.

是的，讓我從交流模組開始。因此，透過整合將模組和微型逆變器的現場組裝吸收到工廠中，AC模組提供了許多價值。您知道，我們在 2017 年宣布與 LG、晶科、SolarWorld 和 Waaree 建立 ACM 合作夥伴關係。我們從 2017 年 6 月開始向 ACM 合作夥伴運送微型逆變器，他們於 2017 年 10 月開始進入渠道。我們也與我們的合作夥伴一起，積極參與安裝人員的 ACM 培訓和宣傳。我想再次提醒您，我們對安裝人員的訪談表明，安裝時間最多可節省 20%，物流費用最多可節省 10%。我們正在與許多其他模組合作夥伴合作，並將在準備就緒時宣布它們。我們已經向您介紹了松下與 IQ 7X ACM 的合作關係，該產品適用於 96 芯模組。現在讓我來談談201案例。因此，201 案例為我們的 ACM 進展帶來了一些阻力。關稅無意中影響了 ACM，而關稅的目的只是針對電池和組件，因此我們實際上正在努力爭取排除 ACM 關稅中的微型逆變器部分，並且我們正在與 USTR 合作解決這個問題。

Is that -- I mean, is there -- I mean, any thoughts on how long that process could be? Or just play that one by ear?

我的意思是，有沒有關於這個過程需要多長時間的想法？或只是見機行事？

Well, we are going to submit our response within the allowed time. We are going to actually submit the response in 30 days. The allowed time is 60 days. And after that, I think they will probably take another 30 days.

好吧，我們將在允許的時間內提交我們的回應。我們將在 30 天內實際提交回覆。允許的時間為 60 天。之後，我想他們可能還需要 30 天。

It's a government process, so...

這是政府程序，所以...

Yes, it is a government process, so it's not going to be predictable.

是的，這是一個政府程序，所以它是不可預測的。

Our next question comes from Jeff Osborne from Cowen and Company.

我們的下一個問題來自考恩公司的傑夫·奧斯本。

Congratulations on the results and margin expansion. I was wondering if you could just touch on the component MOSFET and IGBT shortage that you've talked about and others have talked about in the space. Yes, 2-part question. One is how long do you think it'll last. And then I think it's part of the guidance; you talked about that impacting gross margins. Is there any way to quantify what that impact is?

祝賀我們所取得的成果和利潤率的擴大。我想知道您是否可以談談您和其他人在該領域討論過的 MOSFET 和 IGBT 組件短缺問題。是的，分為兩部分的問題。一是你認為它會持續多久。然後我認為這是指導的一部分；您談到了這對毛利率的影響。有什麼方法可以量化這種影響嗎？

Yes. So let me give you some color on the component shortages. I'll give you a little bit of history as well. We experienced significant component shortages throughout 2017. These component shortages were mainly on high-voltage FETs and on memories. Our gross margin was negatively impacted by 1% to 2% due to expedite fees in Q3 '17 and Q4 '17. In Q1 '18, we see continued pressure on the same components. In fact, we think this component shortage will persist throughout 2018 and even into early 2019. And it is top priority for us as a management team. We are always working on a 3-horizon framework to tackle this: in the short term, it is basically hustle like hell, which is blocking and tackling; in the medium term, create viable options, look at alternate sources, make our design more flexible, even changing layout; and in the long term, given our improved liquidity position, create long-term supply agreements with our partners. So to answer your question, I expect the same 1% to 2% impact to gross margin in Q1 of '18. And we have incorporated that in our guidance.

是的。那麼讓我來跟大家介紹一下組件短缺的情況。我也會向您介紹一些歷史。2017 年我們經歷了嚴重的零件短缺。這些元件短缺主要集中在高壓 FET 和記憶體上。由於 2017 年第 3 季和 17 年第 4 季的加急費用，我們的毛利率受到了 1% 至 2% 的負面影響。在 18 年第一季度，我們看到相同組件持續面臨壓力。事實上，我們認為這種零件短缺現象將持續整個 2018 年，甚至持續到 2019 年初。這是我們管理團隊的首要任務。我們一直致力於建立一個三層面的框架來解決這個問題：短期內，基本上是地獄般的忙碌，即阻塞和解決；從中期來看，創造可行的選擇，尋找替代來源，使我們的設計更加靈活，甚至改變佈局；從長遠來看，鑑於我們流動性狀況的改善，與我們的合作夥伴簽訂長期供應協議。因此，為了回答你的問題，我預計 18 年第一季的毛利率也會受到 1% 到 2% 的影響。我們已將其納入我們的指導中。

Yes, as I was going to say, I mean, you knew about the shortage in '17. In the spring, I think it started. So I assume that's factored in to the 30-20-10 plan, or should we discount that by a few points?

是的，正如我要說的，我的意思是，你在 17 年就知道短缺的情況。我想是從春天開始的。所以我認為這已納入 30-20-10 計劃中，或者我們應該將其打折扣幾個點？

No, you should not discount that. It is already factored into our 30-20-10.

不，你不應該低估這一點。它已經計入我們的 30-20-10 中。

Okay. I wanted to double check on that. And then can you just talk about the cadence of OpEx throughout the year? Is the McKinsey study still going on? And how does that progress as the second half evolves?

好的。我想仔細檢查一下。那麼您能談談全年營運支出的節奏嗎？麥肯錫的研究還在繼續嗎？隨著下半年的發展，這項進展如何？

The McKinsey study is done. It was finished in Q4 of '17. So let me give you a little bit of color on our OpEx. We have reduced our OpEx significantly from $108 million in 2016 to $73 million in 2017. Our current OpEx is a little bit high. It is at 22% of revenue. I would like it to be at a model of 20%, consistent with the 30-20-10 operating model. And we have certain investments that we want to make on the IQ 7 -- I mean, on the IQ 8 platform, which we are not going to compromise. With that in mind, we also established an R&D center in India, where we do expect to get to our long-term 20% OpEx target and have absolute -- and have the adequate capacity.

麥肯錫的研究已經完成。它於 17 年第四季完成。那麼，讓我為您介紹一下我們的營運支出。我們將營運支出從 2016 年的 1.08 億美元大幅降低至 2017 年的 7,300 萬美元。我們目前的營運支出有點高。它佔收入的22%。我希望它的模型為 20%，與 30-20-10 營運模型一致。我們希望在 IQ 7 上進行某些投資——我的意思是，在 IQ 8 平台上，我們不會妥協。考慮到這一點，我們也在印度建立了一個研發中心，我們確實希望在那裡實現 20% 營運支出的長期目標，並擁有絕對的、足夠的能力。

Our next question comes from Brad Meikle from AMPAC.

我們的下一個問題來自 AMPAC 的 Brad Meikle。

Could you talk a little bit about -- just with the IQ 7, 8 and the 6 road map, how has that changed the tone with your customers? And how does that -- how do you view your market share trending in 2018? And also along with that, what do you -- how do you see the end market growing?

您能否談談 - 僅透過 IQ 7、8 和 6 路線圖，這如何改變了您客戶的基調？您如何看待 2018 年的市佔率趨勢？除此之外，您如何看待終端市場的成長？

Right. IQ 7, like what I said, it produces more power, it is 17% smaller, 19% lighter than IQ 6, so it provides intrinsic value. It's a single worldwide SKU, and extremely important there is the single hardware SKU. And every country is a software profile, so it's a software configurable architecture. And so therefore, in terms of product velocity, operational efficiency, in terms of managing inventory, IQ 7 will be fantastic. IQ 7 increases our served available market in Europe and Asia Pacific. We are going to go after new markets in Germany and as well as Austria and mainly India. As I told you, the rest of the world is moving from not the sixth generation but the fifth generation to the seventh generation, so you can see the intrinsic gross margin expansion, which we are so focused on. Getting to 30-20-10, achieving 10% profit by the end of Q4 '18 is the topmost priority for us. And we talked about IQ 7 -- I mean, we talked about ACM in general, and IQ 7-based ACM will inherit a lot of these benefits. And now to talk about IQ 7X, that will address about 500 megawatts of market in North America, which was not previously available to us; now it's available. And with our focus on long-tail and high-performance IQ 7X, it's consistent with our strategy of expanding gross margin.

正確的。IQ 7，就像我說的，它產生更多的功率，比 IQ 6 小 17%，輕 19%，因此它提供了內在價值。它是單一的全球 SKU，並且極其重要的是單一硬體 SKU。每個國家都是一個軟體配置文件，因此它是一個軟體可配置架構。因此，就產品速度、營運效率和庫存管理而言，IQ 7 將非常出色。IQ 7 擴大了我們在歐洲和亞太地區的服務市場。我們將尋求德國、奧地利以及主要是印度的新市場。正如我告訴你的那樣，世界其他地區正在從第五代而不是第六代轉向第七代，因此你可以看到我們非常關注的內在毛利率擴張。到 2010 年 3 月 20 日，在 18 年第四季末實現 10% 的利潤是我們的首要任務。我們討論了 IQ 7——我的意思是，我們總體上討論了 ACM，基於 IQ 7 的 ACM 將繼承很多這些好處。現在談談 IQ 7X，它將解決北美約 500 兆瓦的市場，這是我們以前無法獲得的；現在可以使用了。而且我們專注於長尾和高效能 IQ 7X，這與我們擴大毛利率的策略是一致的。

So how does the IQ 7X compare to the SolarBridge solution that SunPower is shipping today for their 96-cell modules? Could you give us a sense for what the performance characteristics and price differences may be?

那麼，IQ 7X 與 SunPower 今天為其 96 電池模組提供的 SolarBridge 解決方案相比如何？您能否讓我們了解一下性能特徵和價格差異可能是什麼？

Brad, this is Raghu. I think performance-wise, it's much more efficient. The CEC efficiency of the SunPower SolarBridge product, I believe, is 95% or 95.5%, and we are 97.5%. That's a pretty substantial improvement in efficiency. And efficiency, as you know, also drives things such as -- of course, drives energy yield but also drives the power dissipation and reliability as well. Obviously, we are driving the -- we are driving our cost down effectively through silicon integration. The IQ 7 actually has a new ASIC on it compared to even the IQ 6. We went from a 2.8 million gate ASIC to a 3.8 million gate ASIC on the 7, and the 7X has the same ASIC as well. So I can say that we are driving our cost down. Of course, price is a very complex thing to talk about, and we can't talk about it on -- this way.

布拉德，這是拉古。我認為從性能角度來看，它的效率要高得多。我認為SunPower SolarBridge產品的CEC效率是95%或95.5%，我們是97.5%。這對效率來說是一個相當大的提高。如您所知，效率也會推動諸如能源產量的成長，但也會推動功耗和可靠性的成長。顯然，我們正在推動——我們正在透過矽整合有效地降低成本。與 IQ 6 相比，IQ 7 實際上配備了新的 ASIC。所以我可以說我們正在降低成本。當然，價格是一件非常複雜的事情，我們不能以這種方式談論它。

Excellent. And I guess that -- how quickly do you think that the IQ 7 could ramp in -- so these new geographies like India and Germany?

出色的。我猜想——你認為 IQ 7 會以多快的速度出現——那麼印度和德國等新地區呢？

Well, so let me talk a little bit about the timing of the IQ 7 transition. Like what I said, we have introduced IQ 7 in North America in the first quarter of 2018 already, so IQ 7 is shipping as we speak. We expect to introduce IQ 7 to rest of the world in the second quarter. And we are very careful in ramping our new products, because Enphase stands for quality and reliability first. So we want to make sure that we do a lot of beta testing in the rest of the world, and then we released -- we release the product in a controlled fashion, which is why IQ 7 is a complex transition for the rest of the world. And the entire supply chain of IQ 7 will ramp up in the next 6 months. While I did talk about the supply constraints, we are mitigating those constraints by qualifying additional sources and making the design flexible. And we expect to mitigate those issues in the next 4 to 6 months. So that's basically the color on the transition.

好吧，讓我談談 IQ 7 轉變的時間。正如我所說，我們已於 2018 年第一季在北美推出了 IQ 7，因此 IQ 7 正在出貨。我們預計在第二季向世界其他地區推出 IQ 7。我們在推出新產品時非常謹慎，因為 Enphase 代表著品質和可靠性第一。因此，我們希望確保在世界其他地方進行大量 Beta 測試，然後我們以受控的方式發布產品，這就是為什麼 IQ 7 對於其他地方來說是一個複雜的過渡。IQ 7的整個供應鏈將在未來6個月內加速。雖然我確實談到了供應限制，但我們正在透過限定其他來源並使設計靈活來減輕這些限制。我們預計在未來 4 到 6 個月內緩解這些問題。這基本上就是過渡的顏色。

My last question is on the growth rate of the market. If you look at your regional customers that I think are growing the most rapidly across the sector, they're doing obviously better than SolarCity, who has been in decline for the last year or so. Can you characterize what you're seeing in terms of the year-on-year increases likely to be seen this year for the small and medium-size customers that have been taking share from the larger nationwide TPO installers.

我的最後一個問題是關於市場的成長率。如果你看看我認為在整個行業中成長最快的區域客戶，他們的表現明顯好於 SolarCity，而 SolarCity 在過去一年左右的時間裡一直在下降。您能否描述一下您所看到的情況，即今年中小型客戶可能會從全國範圍內較大的 TPO 安裝商手中奪取份額，從而實現同比增長。

Yes, I'll probably give you a little bit of color on market share in North America. We believe we are holding share in North America. And the way we think about market share, let me actually elaborate on that. Our top priority is to build a solid financial foundation. We are focused on consistent profitability, than growing market share at any cost. We are consciously walking away from empty-calorie business that is very low-margin businesses. Our products are actually ideal for long-tail installers who value our ease of use and high quality. And we are introducing high-performance products, such as IQ 7X, IQ 7-based ACM, which are ideal for the long-term -- I mean, long-tail markets. So we expect the long-tail markets to grow significantly, and we have the ideal products for that, and we expect that to be a significant expansion in our gross margin.

是的，我可能會給您一些關於北美市場份額的資訊。我們相信我們在北美持有股份。我們思考市場佔有率的方式，讓我詳細闡述。我們的首要任務是建立堅實的財務基礎。我們專注於持續的獲利能力，而不是不惜一切代價擴大市場份額。我們有意識地放棄那些利潤率非常低的空熱量業務。我們的產品實際上非常適合重視我們的易用性和高品質的長尾安裝人員。我們正在推出高效能產品，例如 IQ 7X、基於 IQ 7 的 ACM，它們是長期（我的意思是長尾市場）的理想選擇。因此，我們預計長尾市場將顯著成長，並且我們擁有理想的產品，我們預計這將顯著提高我們的毛利率。

Our next question comes from Philip Shen from Roth Capital Partners.

我們的下一個問題來自 Roth Capital Partners 的 Philip Shen。

The first question is on the IQ 7 rollout and just to put a finer point on things, Badri. Would it be possible to give us a sense of what the mix of products might be by quarter? Historically, you guys have done that with prior generations of product release. By when do you think we could see a 100% IQ 7 mix, for example; and along the way, what could the quarters possibly look like in Q2, Q3 and so forth?

第一個問題是關於 IQ 7 的推出，Badri，只是為了更詳細地闡述這一點。能否讓我們了解一下每季的產品組合？從歷史上看，你們在前幾代產品發布中已經做到了這一點。例如，您認為我們什麼時候可以看到 100% IQ 7 的組合；在此過程中，第二季、第三季等季度可能會是什麼樣子？

So I'll just give you some color on the IQ 6 transition, then I'll talk about the IQ 7 transition, so you get the full picture. The IQ 6 transition took us 3 to 4 quarters to complete. The IQ 7 platform, it uses the same accessories as IQ 6 for North America. However, the IQ 7 platform is brand new in the rest of the world. It is a huge learning curve for the rest of the world. We think, therefore, in combination, the IQ 7 transition will take us approximately 3 to 4 quarters. We expect to complete the IQ 7 transition by the fourth quarter of 2018. Like what I said, we have already starting shipping in North America in this quarter. We expect to introduce it in rest of the world in Q2, of '18, and we are confident of meeting our 30-20-10 by Q4 of '18.

因此，我將為您提供有關 IQ 6 過渡的一些顏色，然後我將討論 IQ 7 過渡，以便您了解完整情況。IQ 6 的過渡花了我們 3 到 4 個季度的時間才完成。IQ 7平台，它使用與北美IQ 6相同的配件。然而，IQ 7 平台在世界其他地區是全新的。對於世界其他地區來說，這是一個巨大的學習曲線。因此，我們認為，綜合起來，IQ 7 的過渡將需要大約 3 到 4 個季度的時間。我們預計在 2018 年第四季完成 IQ 7 過渡。正如我所說，我們已經在本季開始在北美發貨。我們預計將在 18 年第二季將其引入世界其他地區，並且我們有信心在 18 年第四季之前實現 30-20-10。

Great. And then you mentioned a couple of times earlier already that there is possibly meaningful margin benefit as the rest of the world converts to IQ 7 since they're coming from the, I think, Gen 5 or M250. So can you quantify in some fashion what that margin benefit might be?

偉大的。然後您之前已經多次提到，隨著世界其他地區轉向 IQ 7，可能會帶來有意義的利潤收益，因為我認為它們來自 Gen 5 或 M250。那麼你能以某種方式量化利潤率收益是多少嗎？

Yes, I mean -- I'm going to talk about gross margin in general, so we have 3 levers on gross margin: the pricing management, supply chain optimization and IQ 7 transition. On pricing management, we are focused, like what I said in the prepared remarks, on transactional control in 2017, and then 2018 will be about offering high-value products like IQ 7X and IQ 7-based ACM. On supply chain optimization, we are focused not only on the microinverter but also focused heavily on cost reducing the accessories as well as reducing our overhead. And note that a significant portion of our revenue does come from accessories, so it's important for us to control cost there. We -- in terms of overhead, we are looking at all aspects, which is variance, logistics, warranty, and are tackling those. The last one is obviously IQ 7 transition, which has clear benefits in terms of BOM reduction, in terms of [fam] expansion, in terms of IQ 7X, but it is not the only thing in our gross margin expansion. So bottom line, we are changing the way we work on pricing and costs. It is not just about IQ 7. In combination of these 3 things, which is pricing management, supply chain optimization and IQ 7 transition, we will get to the 30-20-10 by Q4 '18.

是的，我的意思是——我將總體討論毛利率，因此我們對毛利率有 3 個槓桿：定價管理、供應鏈優化和 IQ 7 過渡。在定價管理方面，就像我在準備好的演講中所說的那樣，2017 年我們的重點是交易控制，然後 2018 年將提供高價值產品，例如 IQ 7X 和基於 IQ 7 的 ACM。在供應鏈優化方面，我們不僅專注於微型逆變器，還專注於降低配件成本以及減少我們的管理費用。請注意，我們收入的很大一部分確實來自配件，因此控製成本對我們來說很重要。就管理費用而言，我們正在考慮各個方面，即差異、物流、保修，並正在解決這些問題。最後一個顯然是IQ 7過渡，它在BOM減少方面、在[fam]擴張方面、在IQ 7X方面具有明顯的好處，但這並不是我們毛利率擴張的唯一事情。因此，最重要的是，我們正在改變定價和成本方面的工作方式。這不僅僅是關於 IQ 7。

Great. And one last one here for me. I think if you look at the blended company numbers, the blended ASP from Q3 was about $0.38; in Q4, $0.41, if my numbers are right there. So you actually have had some degree of, perhaps, price increase. Some of our discussions with customers have been that you've been able to -- you've actually been raising some pricing out there, perhaps, not the MSRP necessarily but reducing the rebates out there. So historically, we see 7% to 10% price erosion year-on-year. Clearly, we're not in that situation now. In fact, it might be going the other way. How do you expect -- and I know pricing discipline and management is a core part of your strategy, as you just mentioned. But as you look ahead, do you expect ASPs to continue to rise, or should we just -- should we expect a flat kind of curve ahead?

偉大的。最後一張是給我的。我認為如果你看一下混合公司的數據，第三季的混合平均售價約為 0.38 美元；如果我的數字正確的話，第四季的價格為 0.41 美元。所以你實際上可能已經有一定程度的價格上漲。我們與客戶的一些討論是，您實際上已經提高了一些定價，也許不一定是建議零售價，而是減少了折扣。因此，從歷史上看，我們看到價格年減 7% 至 10%。顯然，我們現在不處於這種情況。事實上，事情可能會走向相反的方向。您有何期望——正如您剛才提到的，我知道定價紀律和管理是您策略的核心部分。但當你展望未來時，你預期平均售價會繼續上升，還是我們應該預期未來的曲線會平坦？

Right, that's a good question. Our revenue includes a mix of inverter and non-inverter sales, but non-inverter revenue was up sequentially as a percentage of our mix compared to Q3. Our non-inverter revenue, when I defined that, that's basically your accessories, which is Envoy Combiner Box and the AC Battery. So you got to be careful in looking at those numbers to draw a conclusion. But what we are doing is very clear. We are walking away from empty-calorie businesses. We are focused on profitability as a company. We will achieve 30-20-10 by Q4 of '18. So having said that, I believe we maintained pricing flat for the last couple of quarters. Then what's our strategy in 2018? We have modeled a 2% reduction every quarter in 2018, so that's what we modeled. And all our financials, all our operating plans, 30-20-10, et cetera, takes into account that. And we are focused, like what I said, on value-creating products like IQ 7X, like IQ 7-based ACM, like IQ 8, which will come in 2019, which is an enormous differentiator for us. So that's our focus.

是的，這是個好問題。我們的收入包括逆變器和非逆變器銷售的組合，但與第三季相比，非逆變器收入占我們組合的百分比連續上升。當我定義時，我們的非逆變器收入基本上是您的配件，即 Envoy 匯流箱和交流電池。因此，您必須仔細查看這些數字才能得出結論。但我們正在做的事情非常明確。我們正在遠離空熱量的企業。作為一家公司，我們專注於獲利能力。我們將在 18 年第四季實現 30-20-10。話雖如此，我相信過去幾季我們的定價保持不變。那麼2018年我們的策略是什麼呢？我們對 2018 年每季減少 2% 進行了建模，這就是我們的建模結果。我們所有的財務狀況、所有的營運計畫、30-20-10 等等，都考慮到了這一點。正如我所說，我們專注於創造價值的產品，例如 IQ 7X、基於 IQ 7 的 ACM，以及將於 2019 年推出的 IQ 8，這對我們來說是一個巨大的差異化因素。這就是我們的重點。

Our next question comes from Colin Rusch from Oppenheimer.

我們的下一個問題來自奧本海默的 Colin Rusch。

You talked a little bit about the high-voltage FETs. Can you talk specifically about silicon carbide sourcing and any sort of mitigation that you're doing around EV demand for those materials to mitigate any sort of price increases?

您談到了一些有關高壓 FET 的內容。您能否具體談談碳化矽的採購以及您為緩解電動車對這些材料的需求而採取的任何緩解措施，以緩解任何形式的價格上漲？

So yes -- this is Raghu. As Badri mentioned about industry-wide component shortage on the high-voltage FETs and memory as well, we actually do not use silicone carbide diodes in this generation of -- in the IQ generation of the product.

是的，這就是 Raghu。正如 Badri 提到的全行業高壓 FET 和記憶體元件短缺問題，我們實際上在這一代 IQ 世代產品中沒有使用碳化矽二極體。

Okay, so that's all gone. Okay. And then can you talk a little bit about the pricing dynamics and the AC module offering and how that's supporting your price dynamics as you go through the balance of 2018?

好吧，一切都過去了。好的。然後您能否談談定價動態和交流模組產品，以及在您度過 2018 年餘下時間時，它們如何支持您的價格動態？

Right. So in terms of the AC modules, so basically, I talked to you about the interviews with installers. And the interviews with installers have so far indicated up to 20% savings in installation time, up to 10% savings in logistics, and these are clear value levers for the AC module that offer clear benefits to the installers. And therefore, when we discuss pricing with our partners, it basically takes into account this value. And we make sure that we share some of this value with the installers as well.

正確的。就交流模組而言，基本上，我與您討論了安裝人員的訪談。迄今為止，對安裝人員的訪談表明，安裝時間最多可節省 20%，物流費用最多可節省 10%，這些都是 AC 模組的明顯價值槓桿，可為安裝人員帶來明顯的好處。因此，當我們與合作夥伴討論定價時，基本上都會考慮到這個價值。我們也確保與安裝人員分享部分價值。

(Operator Instructions) And our next question comes from Edwin Mok from Needham & Company.

（操作員說明）我們的下一個問題來自 Needham & Company 的 Edwin Mok。

So first, just to -- since we talk about ACM here, just a follow-up. Is that a way to think about how much your volume has been on ACM? It sounds like 440 ships on product with ACM already, right? And with IQ 7 coming, do you have a target percentage of these sales that will come from ACM, let's say, exiting this year?

首先，既然我們在這裡談論 ACM，那麼這只是一個後續行動。這是一種衡量您在 ACM 上的交易量的方法嗎？聽起來 440 的產品已經配備了 ACM，對吧？隨著 IQ 7 的到來，您是否有一個來自 ACM 的銷售額的目標百分比，比方說，今年退出？

Edwin, it's Bert. So we're not breaking out the, discreetly, volumes for ACM at this point. But as you mentioned, we are very excited about the progress we're making. And as noted in our recent announcement with Panasonic, I think there's equal excitement with some of our partners that this is a product category that has tremendous upside and tremendous promise. So again, as this develops, we'll continue to talk about it and give you guys as much color as possible. At this point, we're not breaking it out.

埃德溫，我是伯特。因此，我們目前不會謹慎地公佈 ACM 的捲數。但正如您所提到的，我們對所取得的進展感到非常興奮。正如我們最近與松下宣布的那樣，我認為我們的一些合作夥伴同樣感到興奮，因為這是一個具有巨大優勢和巨大前景的產品類別。所以，隨著事態的發展，我們將繼續討論它，並為大家提供盡可能多的資訊。在這一點上，我們還沒有打破它。

Okay, that's fair. And then for the quarter, your non-inverter cells went up, right? Is that a way to think about -- and maybe you can help us by explaining what part of your non-inverter cells was drive -- what product was driving that growth? Is it just so happened that you're buying more combiner box this quarter? Or did you have growth in battery this quarter? I think that product has been out for a little bit and maybe just kind of tied to battery. How -- what are you guys seeing in the market in terms of adoption? And what do you think can change that or accelerate that adoption?

好吧，這很公平。然後在本季度，您的非逆變器電池數量有所增加，對嗎？這是一種思考的方式嗎？您本季購買更多匯流箱是碰巧嗎？或本季電池業務有成長嗎？我認為該產品已經推出一段時間了，可能只是與電池有關。就採用率而言，你們在市場上看到了什麼？您認為什麼可以改變這種情況或加速這種採用？

Yes, we are seeing an uptick in ACB sales compared to the previous quarter. And the uptick we are seeing quarter-on-quarter comes from both Europe as well as Australia. And solar plus storage is extremely central to our strategy as we develop IQ 8, and we remain committed to it. With regarding the other portion on the accessories, yes, we ship, yes, a little bit more combiner boxes as well as Envoys in Q4 of '17. Yes, that's correct.

是的，與上一季相比，我們看到 ACB 銷售額有所上升。我們看到的季度環比增長來自歐洲和澳洲。在我們開發 IQ 8 時，太陽能+儲存對於我們的策略至關重要，我們將繼續致力於這項策略。關於配件的其他部分，是的，我們在 17 年第四季運送了更多的匯流箱和特使。對，那是正確的。

I see. Okay, great, that's helpful. And then last question I have is on the 30-20-10 model, right? If I look at this quarter OpEx and your OpEx guidance, as you said, your OpEx is ticking up a little bit, right? That would push your revenue to hit your 30-20-10 number to like how about $19 million range, right, like to say take 20% OpEx being $18 million, right? Is that how we should -- we are thinking about the 30-20-10 model now or -- I just want to make sure I understand that correctly.

我懂了。好的，太好了，很有幫助。我的最後一個問題是關於 30-20-10 模型，對吧？如果我看看本季度的營運支出和您的營運支出指導，正如您所說，您的營運支出略有上升，對嗎？這將使您的收入達到 30-20-10 的數字，大約為 1900 萬美元，對吧，比如說 20% 的營運支出是 1800 萬美元，對吧？我們應該這樣做嗎——我們現在正在考慮 30-20-10 模型，或者——我只是想確保我理解正確。

Yes, so that's certainly one way to look at it. Of course, as you know, we aren't going to be providing guidance beyond next quarter. But yes, I mean, if you just do the simple math, I think you could probably back into it that way. Again, the most important thing is we are absolutely committed and confident in our ability to get to 30-20-10. I think that's kind of bottom line. If you haven't picked that up, that is definitely what we're focused on.

是的，這當然是看待它的一種方式。當然，如您所知，我們不會在下個季度之後提供指導。但是，是的，我的意思是，如果你只做簡單的數學計算，我想你可能會以這種方式回到它。再說一次，最重要的是我們絕對致力於並有信心達到 30-20-10 的目標。我認為這是底線。如果您還沒有意識到這一點，那這絕對是我們關注的重點。

Our next question comes from Pavel Molchanov from Raymond James.

我們的下一個問題來自雷蒙德·詹姆斯的帕維爾·莫爾恰諾夫。

You alluded to the tariff issue on AC modules imported into the U.S. I'm curious just mechanically, how would you get an exemption for a product that is physically attached to an imported module that is otherwise covered by the tariff? I mean, it seems like just administratively, that might be a bit of a hassle now.

您提到了進口到美國的交流模組的關稅問題。我的意思是，這似乎只是行政上的，現在可能有點麻煩。

This is Raghu. So let me give you some color on that. So clearly, the ACM is a very natural technological evolution to the standalone microinverter and because of the value that it provides by absorbing all the field assembly into the factory. Now the 201 case has inadvertently affected the ACM by the ad valorem ruling. But if you go back to what the intent of the 201 was, it was limited to cells and modules, and inverters should be outside the scope of 201. However, the government has unintentionally created the situation so, of course, increasing the cost of our micro by 30%. In -- only in an ACM case, Senate incentivizes the string inverter technology as an example. So doing that is very bad for innovation and a step backwards in terms of the advancement of technology. And clearly, that was not what the intent of the government was, right? So what's -- the good news here is the USTR has now published a process for exclusion. And that process for exclusion is a detailed explanation and reasoning for exclusion via a questionnaire, and they have given us some time to go submit all of the details behind it. And they've given us 60 days to do it, and we're going to turn around and do it in the next 30 days. We also looked at the mechanics of how this exclusion can take place, that if you think about how the customs and border patrol, how they would tariff it, there's actually some precedence here back in the days. Memory devices had a similar issue, and they established a process for separating out the 2 values and then taxing or tariffing the value appropriate to the right component. In our case, it would be the DC module. In the unlikely event that such an exclusion is not granted, we have an alternate path. So one of the key features of our ACM solution is that, that micro is detachable from the module. So what this means is that the module can be connected to the microinverter after importing the DC module into the U.S. So while this will increase the costs a little bit, but it will be much less than the 30% of the tariff.

這是拉古。那麼讓我給你一些顏色。顯然，ACM 是獨立微型逆變器的一種非常自然的技術演進，因為它透過將所有現場組裝吸收到工廠中來提供價值。現在201案無意中受到了ACM從價裁決的影響。但如果你回到201的意圖，它僅限於電池和組件，逆變器應該不在201的範圍內。然而，政府卻無意中造成了這種情況，所以我們的微型機成本當然增加了30%。僅在 ACM 案例中，參議院以激勵串聯逆變器技術為例。因此，這樣做對於創新非常不利，並且是技術進步的倒退。顯然，這不是政府的意圖，對吧？那麼，好消息是美國貿易代表辦公室現已發布了排除程序。排除的過程是透過問卷對排除進行詳細的解釋和推理，他們給了我們一些時間來提交背後的所有詳細資訊。他們給了我們 60 天的時間來完成這項工作，我們將在接下來的 30 天內完成這項工作。我們也研究了這種排除如何發生的機制，如果你考慮海關和邊境巡邏隊如何徵收關稅，那麼過去實際上有一些優先權。儲存設備也有類似的問題，他們建立了一個流程來分離這兩個值，然後對適合正確組件的值徵稅或徵收關稅。在我們的例子中，它將是直流模組。萬一這種排除未被批准的情況，我們還有一條替代途徑。因此，我們 ACM 解決方案的關鍵特徵之一是，該微型元件可與模組分離。那麼這意味著，將直流組件進口到美國後，就可以將組件連接到微型逆變器上，所以雖然這會增加一點成本，但比30%的關稅要少得多。

Okay, interesting. So that's plan B, I suppose.

好吧，有趣。我想這就是B計劃。

Yes.

是的。

Regarding the battery, when you talk about your margin structure, including the 30-20-10 target, what assumptions does that make for the profitability of the battery? Or is it just so small in your sales mix that it doesn't really matter either way?

關於電池，當您談論您的利潤結構（包括 30-20-10 目標）時，這對電池的盈利能力做出了哪些假設？還是它在您的銷售組合中太小了，以至於無論哪種方式都無關緊要？

Well, although we are seeing an uptick in the ACB sales, it is still a small percentage of our sales mix. We are working -- like what I said, we are working on IQ 8. And IQ 8, as a platform, will have a new AC Battery configuration, and that will come out in 2019. It'll have a great cost structure, but for now, it is a low percentage of our sales.

嗯，雖然我們看到 ACB 銷售額有所上升，但它仍然只占我們銷售組合的一小部分。我們正在努力——就像我所說的，我們正在開發 IQ 8。它的成本結構很好，但目前它占我們銷售額的比例很低。

Our next question comes from Vishal Shah from Deutsche Bank.

我們的下一個問題來自德意志銀行的 Vishal Shah。

Can you talk about the margin profile of your shipments in the U.S. versus in international markets? And also, in the first quarter or the first half of the year, what percentage of your shipments will be to the U.S. market?

能談談你們在美國和國際市場的出貨利潤嗎？另外，第一季或上半年，你們的出貨量將占到美國市場的比例是多少？

Yes. So broadly speaking, our shipments -- our products' shipments in rest of world are perhaps slightly less margin rich than U.S. products, just very, very small, though, and it's really related to the configuration of those products; so again, not significant differences there. With respect to the mix, U.S. versus rest of world, it's still about 70-30.

是的。所以從廣義上講，我們的出貨量——我們的產品在世界其他地方的出貨量可能比美國產品的利潤率略低，但非常非常小，但這確實與這些產品的配置有關；再說一次，那裡沒有顯著差異。就比例而言，美國與世界其他地區的比例仍約為 70-30。

So you still expect U.S. shipments to be 70% in the first half?

那麼您仍預計上半年美國出貨量將達到70%？

That's right.

這是正確的。

Is the industry showing any signs of slowdown post the 201 case and until you get some clarity on your -- on the ACM ruling or not really?

在 201 案發生後，直到您對 ACM 的裁決有了一些清晰的了解之前，該行業是否顯示出任何放緩的跡象？

So we're not seeing much impact on U.S. [rates] related to the 201 trade case. As Raghu mentioned, there is a little bit of uncertainty with respect to the ACM product, with respect, again, to that exclusion. But as he mentioned, we're working very, very quickly to work through that and to relieve that uncertainty. But no, we're not seeing a big impact at all with respect to 201 at this point.

因此，我們沒有看到 201 貿易案對美國[利率]產生太大影響。正如 Raghu 所提到的，ACM 產品存在一點不確定性，再次強調這項排除。但正如他所提到的，我們正在非常非常迅速地解決這個問題並消除這種不確定性。但不，目前我們還沒有看到 201 產生重大影響。

And what percentage of your Q4 shipments were from ACM?

Q4 出貨量中來自 ACM 的百分比是多少？

Again, we're not breaking that out, as I've mentioned before.

再次強調，正如我之前提到的，我們不會打破這個局面。

Okay. And then as far as the non-inverter revenues are concerned, like how should we think about the margin profile of that part of the business? And when do you think it's going to be meaningful enough for you to report a separate percentage as -- of the mix?

好的。那麼就非逆變器收入而言，我們該如何考慮這部分業務的利潤狀況？您認為什麼時候報告混合的單獨百分比才有意義？

So the -- in terms of when we think we're going to have enough data or when we're going to start breaking that as a percent of the mix, that's a good question. I'm not sure we're prepared to do that at this point. But what's your first question? Sorry, remind me.

因此，就我們何時認為我們將擁有足夠的數據或何時我們將開始打破該數據佔混合數據的百分比而言，這是一個很好的問題。我不確定我們現在是否準備好這樣做。但你的第一個問題是什麼？抱歉，提醒一下。

What is the margin profile of that business relative to your inverters? I mean, is it similar margin or better margin?

該業務相對於您的逆變器的利潤狀況如何？我的意思是，是類似的利潤還是更好的利潤？

Yes, again, sorry, Vishal, we're not prepared to break out the margin differential between inverter and non-inverter.

是的，再次抱歉，維沙爾，我們不準備打破逆變器和非逆變器之間的裕度差異。

Okay, fine. And one final question. As you approach this 30-20-10 model, how should we think about the cash allocation profile of the business? I mean, are you going to be cash flow positive for the rest of the year through every single quarter? Or is it going to take some time?

好的。最後一個問題。當您採用 30-20-10 車型時，我們應該如何考慮企業的現金分配狀況？我的意思是，今年剩餘時間每季的現金流都會為正嗎？還是需要一些時間？

So if you've noticed over the last several quarters, our cash has been improving, holding aside even the $20 million recent investment. Our cash has been improving in the sense that we've been reducing burn sequentially every quarter. We see that improving in 2018. Again, a lot of the work that we've done to restructure the company continues and will continue to bear fruit into 2018. Again, we talk about it as a process, not an event. And that process will continue into 2018 and will yield benefits certainly not only in terms of profitability but in terms of cash flow as well. We've said, I think, pretty consistently that we believe 2018 will be a year where we get sustainably profitable, and I think that follows through the cash as well.

因此，如果您注意到過去幾個季度，我們的現金狀況一直在改善，甚至不考慮近期 2000 萬美元的投資。我們的現金一直在改善，因為我們每季都在連續減少燒錢。我們看到這種情況在 2018 年有所改善。同樣，我們為公司重組所做的大量工作仍在繼續，並將在 2018 年繼續取得成果。再次強調，我們將其視為一個過程，而不是一個事件。這個過程將持續到 2018 年，不僅會帶來獲利能力，還會帶來現金流方面的好處。我認為，我們非常一致地表示，我們相信 2018 年將是我們實現可持續盈利的一年，我認為這也將透過現金實現。

(Operator Instructions) And I am showing no further questions from our phone line. I would now like to turn the conference back over to Badri Kothandaraman for any closing remarks.

（操作員說明）我的電話線上沒有顯示任何其他問題。現在我想將會議轉回巴德里·科坦達拉曼 (Badri Kothandaraman) 發表閉幕詞。

So thank you for joining us today. We have stabilized our cash position and are very pleased to be profitable in the fourth quarter of 2017. And we are working hard to achieve our 30-20-10 model in Q4 '18 and creating a solid financial foundation. We look forward to speaking with you again in the next couple of months.

感謝您今天加入我們。我們已經穩定了現金狀況，很高興能夠在 2017 年第四季實現獲利。我們正在努力在 18 年第 4 季實現 30-20-10 模式，並創造堅實的財務基礎。我們期待在接下來的幾個月內再次與您交談。

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program, and you may all disconnect. Everyone, have a wonderful day.

女士們、先生們，感謝你們參加今天的會議。這確實結束了程序，你們都可以斷開連接。祝大家有美好的一天。