Jeff Osborne: I appreciate that. A very quick follow-up. As IQ8 grows in Europe, is that accretive or dilutive to the results that you just reported?
Badri Kothandaraman: That will be accreted.
Jeff Osborne: Got it. Thank you. That’s all I have.
Operator: The next question comes from Ameet Thakkar of BMO Capital Markets. Please go ahead.
Ameet Thakkar: Good afternoon Badri. Thanks for squeezing me in. Just I guess a follow-up on that last line of questioning. But I think you guys have targeted to get to 90% in terms of IQ8 mix by the end of the second quarter, I think you just said 60% is kind of what’s baked in for the first quarter. Are you guys running a little bit behind on that?
Badri Kothandaraman: We are running a little behind, I would say. I would €“ I am going to €“ or rather we are going to introduce IQ8 into several countries in Europe in the near-term. So, in Q2, we will probably be at maybe a little lower than 80%. And I think in Q3, we should probably catch up to that 90%.
Ameet Thakkar: Great. Thanks for that. And then I think this time last year when we had this call, and certainly a battery kind of uptake in California will increase, and that might change things. But I think you guys said that like California was roughly 20% of total revenues post the initial NEM 3.0 proposal. I was just wondering if you could kind of give us kind of a refresh on where €˜22 ended up in terms of California as a percent of total revenues.
Badri Kothandaraman: Those numbers are right. Yes. California, the revenue is approximately 20% of our total revenue. That’s correct.
Ameet Thakkar: And it’s still 20% in €˜22?
Badri Kothandaraman: Yes. That’s right.
Ameet Thakkar: Great. Thank you.
Operator: The next question comes from Julien Dumoulin-Smith of Bank of America. Please go ahead.
Julien Dumoulin-Smith: Thank you. Hi. Good afternoon to you. Thanks for the time, appreciate it. Just first off, I wanted to come back to the margin question and talk a little bit more about structural margin expectations. I know we talked about value pricing earlier. Can you elaborate a little bit on where you stand vis-Ã -vis your margin expectations for the course of this year? You talked about pricing, pricing integrity, maybe there is a little bit of mix here question between storage and the other products here. How do you think about the evolution of margins here through the course of the year, especially as you think about mix? And then also a little bit of a nuance from earlier, if I can follow-up. On utilization, obviously, you are fully utilized today. You think about bringing on that capacity. Is there any margin impact from underutilization as you bring on some of this, given the comments about the backlog dynamic?
Badri Kothandaraman: Right. On the margin question, as we convert more of our mix to IQ8, margins will get incrementally better, and we will take care of it in our margin guide. Like what I have told you, margin is not always about pricing. It is about a lot of focus on costs. And we have an initiative called world-class in the company where we continuously focus on every small, whether it’s a capacitor, whether it’s a resistor, the gate driver, the AC fed, the porting, plastics, the cables, the connectors, we have a large team working on the transformers. We have a large team working on it. And what you see is a combination of good cost reduction efforts, plus good pricing efforts. So, we will €“ if you had noticed, we improved our non-GAAP gross margin guidance from the prior quarter by 1% because of the IQ8 transition plus the progress we are making on world-class costs.
