Mary Powell: Yes. And of course, we are looking forward to the deployment of Lunar, and their storage capabilities, and we are already working with Lunar on their grid share capabilities, which are quite powerful.
Colin Rusch: Thank you so much.
Operator: Thank you. Our next question comes from the line of Maheep Mandloi with Mizuho. Please proceed with your question.
Maheep Mandloi: Hey, good evening. Thanks for squeezing me in. Just a question on the systems and product business, saw the gross margins were bit weaker in the quarter, which probably led to the lower platform margins. So, I was just trying to understand the drivers there, and how should we think about the platform contribution going forward, especially after the distribution sale you talked about a month ago?
Danny Abajian: Yes, happy to hit that. So, during the quarter we made a decision to wind down our AEE distribution business, and in connection with that, there was a one-time non-cash charge on inventory impairment of $22 million. That definitely weighed heavily on the gross margin in the period. As we thought about that business, we became the higher margin and value-generating components of that business, but that did weigh in, and as we move on from that, that sort of help restore some of that margins. If we look at that line item in total, it includes our distribution business, it includes our cash sales, it includes our home upgrades business, which is ancillary to the solar install. If we just look at the cash system sales component in that line, a couple of line items, that gross margin is a healthy double-digit number.
Maheep Mandloi: Got it. Thank you. Appreciate that. And then, just on cash generation, just looking at your slide 14 there, the orange bars from 2Q to 4Q seemed probably more in line with the $200 million cash generation exiting Q4, is that fair, or like, we could probably see some upside to that now, those numbers starting 2Q as well, with all the levels you talked about?
Danny Abajian: Yes, I think that what you see on the bar charts on the bottom-left of slide 14 is what I think you’re looking at. Obviously that’s a directional picture, but I think illustrates in here is a return of a lot of the working capital we incurred in Q1, returning that in Q2, and then in Q3 and Q4 moving more towards that run rate, exit rate that we see falling within our guidance range. I would say that’s the general picture there. I’m not sure if that’s the part of your question.
Maheep Mandloi: No, it’s just like, reading those, it looks like for Q4 that implies on $50 million of cash generation, and so, that come and sit with the $200 million or like, the exit run rate is something else or not the Q4 number here?
Danny Abajian: Yes, within the $200 million to $500 million is what’s implied there.
Maheep Mandloi: All right, sounds good, thank you.
Operator: Thank you. Our next question comes from the line of Dylan Nassano with Wolfe Research. Please proceed with your question.
Dylan Nassano: Hey, good afternoon, everyone. Mary, you briefly hit on the early renewal program in your opening remarks. I was just wondering if you had any more color if could share on how that program has been progressing since your last update?
Mary Powell: Yes. So, we actually, as I described, we are going to be using this year to run a number of different approaches on renewals, and then scale as we exit ’24 into ’25. So, we concluded that program, which again, we were really pleased with, 70% positive interaction on early renewals, and now we are launching our re-powering and renewal with add-on storage pilots, and that begins in May. So, at our next call, we’ll be able to update you on that next one, super encouraged by our first one, ruling out a different flavor, seeing what the uptake will be on that, and then, getting ready to scale as we exit the year.
Danny Abajian: And I would just add, I take this as kind of like us beginning more of a concerted focus around understanding our portfolio that’s now close to reaching a million customers, and investing in providing additional products and services like the battery to these homes. And as we focus on that opportunity that’s in front of us, I know there is a lot of cash generation addition that can come as we effectively manage the portfolio.
Dylan Nassano: Got it, yes, appreciate that color. All my other questions have been asked and answered. Thanks.
Mary Powell: Great, thank you.
Operator: Thank you. That concludes the time that has been allocated for Q&A. You may now disconnect.
