Colin Rusch: Thanks so much. Guys, can you talk a little bit about incremental geographies that you guys might be able to move into that are growing at a healthy rate, particularly in the rest of the world or other geographies that you’re ending up exiting out of here in this transition?
Zvi Lando: Yes, I think we spoke about Europe and it’s not necessarily — there are some markets that are beginning to evolve that you would have never mentioned their names before and I addressed some of them in the past, like Slovenia or Romania and a few places like that, and they’re usually influenced from some central country nearby. For instance, in some of these, it’s mostly influenced from Italy. And these are slowly evolving markets. And from our central location, again, in this case Italy, we will oversee or we will be active in these markets as well. There are other markets that are not — they did exist before, but they’re picking up recently. And then we increase our presence in those markets. And the glaring cases like that are countries like Spain and Greece.
By the way, years back in 2012, we had market share in Greece. It was probably, I don’t know, 60% or 70%. And then the market was quiet for many years. And now it’s back. We have a huge installed base in Greece, and our growth rate in Spain is very, very high. But it’s still a relatively small number. So there are a few countries where it’s a completely new dynamic. And there are some countries that were small markets that are beginning to grow a bit faster. And those would be the examples within Europe. Outside of Europe, there’s a lot of talk in Brazil and definitely our momentum in Brazil is positive. In Asia, Thailand is a market that is growing quickly. Taiwan is a market that is growing quickly. The Philippines is a market that is growing and evolving.
And at the same time, for instance, we realized that the Korean market is not what we expected it to be. And we reduced the level of activity in the Korean market. So there are opportunities in these markets. But I think under the current circumstances and interest rate environment, Europe and the U.S. are much larger in terms of the potential to gain share and see improvements in demand compared to growth in some of these markets, although we are benefiting from it.
Colin Rusch: That’s super helpful. And then the follow up is really about the internal battery cell manufacturing and how that’s ramping up and getting the sell through on the batteries and some of the inventory that you’re mentioning there, how you’re dealing with and expecting to manage your third party sell agreements along with that internal production?
Zvi Lando: Yes, I think — I’ll try to answer in two ways. As you know, our current offering is based on — our residential batteries is based on third party sales. And we intended to ramp the factory and shift over to using the sales from the factory for offering to these markets. At the current time considering the lower installation rate, it’s increasing but it’s lower than what we anticipated. We don’t expect that shift to happen in 2024. And in 2024, our residential battery offering will continue to be based on our third party sales. And meanwhile, we are ramping the factory and we will continue to ramp the factory and sell those sales as we ramp to customers of our storage business that some of them are historical that we’ve been selling to for years and now we will have more capacity and a better cost structure.
And some of them are new customers of non-solar related energy storage or high fee rate cell applications. So in 2024, our solar attached single phase batteries will continue to be based on the third party cell supply that we have today.
Colin Rusch: Okay. Thanks so much, guys.
Operator: We’ll take our next question from Mark Strouse of JPMorgan.
Mark Strouse: Great. Thanks for taking our questions. Two of them please. I think the first one just following up on Brian’s question, it kind of sounds like the distributor cancellations, the order cancellations and delays that you saw, it accelerated in the latter half of the quarter. Has that now stabilized? I’m just trying to get a sense of — you mentioned some upside risks to that 600 million to 700 million. What gives you comfort that there’s no further downside to that number?
Zvi Lando: Yes, so maybe, Mark, your first data point, actually our highest ever sell-through month globally or actually in Europe ever was June. So in June of 2023, we reached a record or our distributors reached the record of sell through of our products. And then July, the sell through was a bit lower, but July is typically a vacation month in Europe. So the shift in pattern was around the summer and the picture got clearer, as mentioned during the — to our distributors, and then to us in the second half of the quarter. And that is where the installation rate decline took place. And as we said, from a quarter-over-quarter perspective from Q3 to Q2 across all of Europe, if I remember correctly, the number was 22% quarter-over-quarter reduction, although it was still higher than the same quarter of last year.
We are looking at installation rates, because the indicator of sell through, we receive it at a later date until all of the distributors collect their information and provide it to us. The indicator that is less accurate but we have a much more live view is the indicator of installation rates and connection to the monitoring. And connection to the monitoring in recent weeks, in the last couple of months, in Europe has been up in places like Germany, Austria, Switzerland, some of the other countries and has been down in the Netherlands, as we reported. But overall, the installation rate has been relatively stable across Europe since the drop that we saw towards the end of the summer and the end of the third quarter and going into the fourth quarter.
Now is that — does that give confidence that it won’t go down further or when will it begin to pick up and in that rate, that obviously we have judgment but not true visibility. But this is the data point on which we are setting the baseline scenario in the revenue — in the stabilized revenue projection that we gave.
Mark Strouse: Okay. Thanks, Zvi. And then just a follow up, can you talk about your appetite to kind of lean into your balance sheet during this macro downturn? You’ve got — because of your balance sheet you might have some wherewithal that some of your competitors may not have. Can you talk about the appetite to lean into R&D to potentially look at some M&A so that you’re even better positioned coming out of this downturn competitively?
Zvi Lando: So I’ll use the opportunity, Mark, to give a broader perspective that it’s not directly related to the balance sheet, partially related to the balance sheet and partially related to the P&L. With all this going on, it’s important to put in perspective that we are firm believers not only in the long term, but also the midterm trajectory of this market. And the core markets that we serve which are rooftop solar of residential and C&I. And not only in the long-term growth of these markets for PV and inverters and optimizers but also the evolution of the broader solutions that we’re seeing that includes batteries, EV chargers, smart energy management, software to manage them, grid services, applications, cyber protection.
