Good day, ladies and gentlemen, and welcome to the Enphase Energy's Fourth Quarter 2016 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to introduce your host for today's conference, Ms. Christina Carrabino. You may begin.

Good afternoon and thank you for joining us on today's conference call to discuss Enphase Energy's fourth quarter and year ended 2016 results. On today's call are Paul Nahi, Enphase Energy's President and Chief Executive Officer, and Bert Garcia, Chief Financial Officer. After the market closed today, Enphase issued a press release announcing the results for its fourth quarter and fiscal year ended December 31, 2016. 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, 2016, which is on file with the SEC, and the annual report on Form 10-K for the year ended December 31, 2016 which will be filed with the SEC in the first quarter of 2017. Enphase Energy cautions you not to place any undue reliance on forward-looking statements and undertakes no duty or obligation to update any forward-looking statements as a result of new information, future events or changes in its expectations. Also, please note that certain 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 also can be found in the Investor Relations section of its Web-site. Now, I'd like to introduce Paul Nahi, President and Chief Executive Officer of Enphase Energy. Paul?

Good afternoon and thanks for joining us today to discuss our fourth quarter and full year 2016 financial results. We reported revenue of $90.6 million for the fourth quarter of 2016. We shipped approximately 194 megawatts AC or 815,000 microinverters, an increase in megawatts of 50% compared to the fourth quarter of 2015. GAAP gross margin was 17.9% and non-GAAP gross margin was 18.2%. We have currently more than 580,000 Enphase systems deployed in over 100 countries. Since inception, we have shipped over 13 million microinverters, representing more than 3 gigawatts of installed generating capacity. Enphase systems have produced approximately 8 terawatt hours of clean, renewable energy. For the full-year 2016, we reported revenue of $322.6 million and shipped a record 726 megawatts AC or 3.1 million microinverters. GAAP gross margin was 18% and non-GAAP gross margin was 18.4%. Enphase has been executing on a business strategy detailed in late 2015. We are gaining market share by offering competitive pricing, enabled by aggressive cost reductions and providing a richer more comprehensive energy solution for our customers. In addition, we are committed to reduce our cost structure with a goal of enabling consistent profitability. Our lower pricing strategy put pressure on revenue and gross margin during 2016. As a result, we took several actions in the second half of 2016 and in the first quarter of 2017 to reduce our operating expenses in order to create a faster path to sustained profitability. Bert will go into more detail about these actions and our financial results later in the call.. We saw the effectiveness of our lower pricing strategy with new customer wins and an increasing share with existing customers. During the second half of 2016, we had significant market share growth in almost every geography in which we participate. Based on…

Thanks, Paul. I'll provide more details related to our fourth quarter and fiscal year 2016 financial results as well as our current financial status and 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. Total revenue for the fourth quarter of 2016 was $90.6 million, an increase of 2% sequentially and an increase of 38% compared to the fourth quarter of 2015. Total revenue for 2016 was $322.6 million, down approximately 10% from fiscal 2015. We shipped approximately 194 megawatts AC or 225 megawatts DC in the fourth quarter of 2016, a decrease in megawatts of 5% sequentially and an increase in megawatts of 50% compared to the fourth quarter of 2015. The megawatt shipped represented 815,000 microinverters. All of them were our fourth and fifth-generation microinverter systems. Non-inverter revenue increased 22% sequentially, driven by increased penetration of our AC Battery storage solution. In 2016, we shipped a record 3.1 million microinverters, representing 726 megawatts AC or approximately 845 megawatts DC, a 3% year-over-year increase. GAAP gross margin for the fourth quarter of 2016 was 17.9%. Non-GAAP gross margin was 18.2%, sequentially flat from Q3. Non-GAAP gross margin excludes approximately $281,000 of stock-based compensation expense. For the full year of 2016, GAAP gross margin was 18% and non-GAAP gross margin was 18.4%. As discussed in our last call, at the end of Q3 we made the difficult decision to reduce our global workforce by approximately 11% and eliminate certain non-core projects, resulting in approximately $20 million of annualized non-GAAP expense savings, starting in the fourth quarter of 2016. This restructuring initiative was materially complete in the fourth quarter. As a result, non-GAAP operating expense was $23.4 million for the fourth quarter compared to $28.6…

[Operator Instructions] Our first question comes from Colin Rusch with Oppenheimer. Your question please.

Our next question comes from Jeff Osborne with Cowen and Company. Your question please.

Our next question comes from Vishal Shah with Deutsche Bank. Your question please.

Our next question comes from Michael Morosi with Avondale Partners. Your question please.

Our next question comes from Philip Shen with ROTH Capital. Your question please.

Our next question comes from Brad Meikle of Craig-Hallum Capital. Your question please.

Our next question comes from Edwin Mok with Needham & Company. Your question please.

[Operator Instructions] Our next question comes from Krish Sankar with BOA Merrill Lynch. Your question please.

Our next question comes from Philip Shen with ROTH Capital. Your question please.

[Operator Instructions] I show no further questions at this time. I would like to turn the call back over to Mr. Nahi for closing remarks.

Thank you for joining us today. We look forward to speaking with you again next quarter.

Thank you. Ladies and gentlemen, that does conclude today's conference. Thank you for your participation. You may now disconnect. Have a wonderful day.