ChargePoint (CHPT) 31 Aug 222023 Q2 Earnings call transcript

Ladies and gentlemen, good afternoon. My name is Emma and I will be your conference operator for today’s call. At this time, I would like to welcome everyone to the ChargePoint Second Quarter Fiscal 2022 Earnings Conference Call and Webcast. [Operator Instructions] I would now like to turn the call over to Patrick Hamer, ChargePoint’s Vice President of Capital Markets and Investor Relations. Patrick, please go ahead.

you ChargePoint’s us results. second thank call today’s and discuss to quarter afternoon for on joining conference Good fiscal XXXX call our webcast the brought is be This on accessed and Investors at website can of investors.chargepoint.com. section being Pasquale With our Officer Chief Officer. Chief our Romano, me Jackson, call Rex Executive today’s Financial on are and which found on our afternoon, a release press be This announcing results can we issued for the quarter, website. our make fiscal you that quarter during conference forward-looking We statements, year like will including fiscal to remind full would third call, and the outlook. management XXXX risks These forward-looking actual uncertainties, statements from are which beyond differ to control involve our cause and could many of and expectations. materially our results today These no we undertake update our forward-looking as obligation call. statements of and these apply to statements after

to Investors which of finally, reconcile posting detailed cause SEC call, with with on SEC Investor the Relations transcript our Quarterly release our note section. non-GAAP periods description I that that this refer posted the factors we the and website. Results our please differ, Pasquale. use GAAP today certain more over and actual earnings filed X-K. to June our our certain the Form of measures And we that, the investor in filed call financial could to we on on earnings on please X, posted turn will for to Form our XXXX and And presentation release of a to be this historical Also, the XX-Q section it website under results on with For website will

posted pleased growth the quarter to milestone all historic in quarter, $XXX you thank execution joining. our of closely QX call. history. is report million we the our major improvement attach have And guidance QX $XXX vehicle high the in peaked as XXXX. on end another revenue strong arrival vehicles. another above rate provided sales our According of said of BloombergNEF, Notably, and am I million, as before, rates, to Patrick company’s combustion you, tracks XX-year the QX Thank we in for first

As the future is to this and of and company’s revenue XX% strength consumers accelerating Year-over-year growth incredibly embrace at revenue an sequential business geographies. XX% across demonstrate of transition continue EVs the rate, growth to of the strong. verticals

We realized gross continues have category operating by as to supply The improved QX chain be affected margin from and the dislocations. forecasted. leverage

Rex As of strategy on and purchase higher we price earnings upward and means the assurance worked excess components support headwinds, recent This costs. expand supply trajectory. covered our source variances we and tirelessly in logistics continue operations calls, the land and growth. prioritize to margin rest impressive strong to growth of to the team our Despite XX% QX in Net, with sequentially, percentage our more will points our pleased for on color second year. performance provide non-GAAP deliver that in in while we up X gross quite are outlook achieving quarter, the

are our And sequential annual DC approximately an ports Of installed ports our subscription. of XX,XXX grew are I to way that and will software XX,XXX and Europe those, Our network to in XXX,XXX, over of fast. increase year-over-year base X%. and of XX% a over increase commercial management remind verticals these generates each track progress you one of is as under fleet in ports

our over now to in Complementing include count, this, this roaming a residences is reach XXX,XXX see As ports North in and Europe. chargers single-family demand. do we reminder, not strong we for continue where America home also

rely differentiated discussed and new ultimately on customers. now billings DC continued that us and call, XXXX our of approximately quarter our customers count everything fleet of new and upfront New On Fortune one-third and for of of we the and XX% XX% we first the solutions telling customers Fortune are the XXXX QX customers platforms. And in manufacturing Customers infrastructure. and as our XXth meaningfully quarter of contributed AC optimization from build-out ramping our us charging are planning and additionally, consultation commercial through comprehensive. XXX

lagged during quarter which with Commercial, the XX% rate a verticals. in to business year-over-year growth the sequentially. accelerated perspective from pandemic of the XX% up now Turning and global

Regarding live combined higher, software, and particularly depot, charging costs sequentially. take-home first charging strong and strong. AC year-over-year remains our year-over-year reinventing limited. solutions the of of to QX, Starbucks, continues have a over up XX% DC and increase strong, if growth that supply XXX% for heavy vertical constraints. operational sequentially the and Residential demand duty for the up road for a billings with important the billings sequential Fleet fleet trip. vehicles with with XX% In quarter, over year quarter. XXX% following residential partnership readiness charging. and The demand XX% from significantly strong continues growth step on-route Europe the Volvo remarkably the would first with vehicle second quarter an not with was its across light last and to grew commercial management balance our chain vertical first quarter, went been for site Billings be in were in The XXX% in versus

Turning to policy.

national electric model program. infrastructure to business us the sets up vehicle Our operationalize well U.S.

across after includes and categories. infrastructure was close Additionally, stimulus signed the fleet the the which of and Act for passenger Inflation both Reduction vehicles quarter, shortly

programs engaged with Our remains industry. ensure charging federal and and healthy policy state self-sufficient agencies to team to a help shape

programs our we these of previously, discussed not do positive. views include cash flow or in turning federal long-term guidance As

long too. have can We for that what is planet good business for said be good the

gasoline billion X.X XXX,XXX avoided million metric XXX greenhouse have and Our of over network has of and drivers to-date gas emissions. tons gallons cumulative over over we these electric miles estimate fueled

Rex Rex, Now, I you. to over discuss to this to before we turn will Q&A. to financials move over

Please our GAAP reminder, principally our assets are and acquisitions. comments to amortization we stock-based and see related Thanks, in release where as costs to Pasquale restructuring quick for and afternoon compensation, calls, of good reconciliations. A previous non-GAAP, everyone. exclude earnings my intangible non-recurring non-GAAP

up XX% our announced and was range to revenue previously above $XXX sequentially, year-on-year $XX QX, guidance million. of XX% million $XXX For million,

could fundamentally from for As All have all constraints uptick quarters commercial supply were across a welcome products we healthy build. verticals we but a demand multiple running, strong persisted. with what business, and in AC standpoint shifted we

revenue As from sequentially. down XX% was before, work XX% million QX X% higher backlog revenue XXX% up a that XX% meaningful XX% ending supply into and total was year-on-year of Other at total existing up of translated $X backlog million sequentially. revenue and constraints year-on-year, XX% percentage we revenue, year-on-year of and demand strong at sequentially. the sequentially our increased systems million down $XX at our quarter, revenue during charging XX% grew backlog XX% and $XX QX. XX% Network and Subscription of

in the to to to percentage As we system and two before, subscription have systems. The due growth activation. systems sales and shipments is growth charging network heavily timing quarters of by charging revenue discussed network dependent upon back-end is one tied growth trails the subscription mix loaded of

is of revenue Our deferred payments, quarter subscription and QX. finishing future which commitments continues the the million up grow existing customer revenue, at at end to from from million, recurring $XXX $XXX

in Commercial X them workplace fleet last retail other North sequentially. recovered split. quarter. perspective, QX a grew commercial you the area and this as Europe customers improved Turning quarter, well to which XX%, we percentages XX%, verticals, report year-over-year points during perspective, X%. approximates billings and and geographic as worked Europe QX XX% In revenue and XXX% were from supply constraints quarter the From XX% contribution was in our revenue the from chain delivered and billings $XX America XX%. million second team XX% demand was revenue the a residential know, and from

for associated chain. to margin. Turning with points the supply variance which was Non-GAAP gross million cost QX X includes gross or XX%, price logistical purchase of margin $X

challenges, at expect increase second of and products, to gross fundamentals improving however, for recovery $XX lower margin a newer improvements improving in for year-on-year QX XX% expenses technology-driven Non-GAAP of We price Despite and variances half. we are encouraged million, QX. margin X%. a operating purchase the were continued decrease the drive demonstrated in our sequential ASPs these

we margin OpEx a to sequentially as QX, over of flat in second to goal compensation QX. drop calendar stated XXX% percentage new expenses perspective, from QX Excluding by quarter. in mention a $XX.X And we costs particularly operating was driven OpEx managing as which leverage with momentarily, finish gross QX up in essentially from our cash and expect From our operating pleased strong higher XX% we was leverage is against in Stock-based on revenue challenges. environmentally flow on end focus will the introduction this the metric, guidance product $XX.X see delivering for of are year, the in XXXX. an achieving I million to of million, key positive free

brands year refresh approximately remember may step QX level do would we there. out there you in a so to year, at QX annual from stair is We QX through last QX, our of level. next expense expect typically in this As

Looking with XXX cash, the short-term we as had in shares at cash finished approximately and XXXX. million million We July $XXX of investments. XX, quarter outstanding

third for million XXX% $XXX we quarter to XXXX, fiscal million, and of the to at Turning revenue midpoint. to sequentially up the $XXX year-on-year guidance expect up be XX%

million, guidance $XXX for annual I call revenue expense turn range guidance to operator the confirming and million. $XXX margin XX%, $XXX that, the million million of of XX% Question-and-Answer our With to also to Session to non-GAAP are We of gross $XXX annual questions. operating will guidance back

first question comes from Oppenheimer. line Rusch of Your Thank with the you. Instructions] [Operator Colin

line now Your open. is

Thanks on here first so this one. jam much. two then I questions am going in to

front? are if out, that guys that come any funds indications Nevi for any prepared you starting well. And So in have you in of are will indications vehicle the America? a the to guys. get seeing around that first, infrastructure on I to of or what could comment as squeeze fleet I commercial follow-up. And activity preparations then Thanks, North then also around

Hi, two answer Colin. to Happy those questions.

have on related – earnings other consistent forms been have we on we in. calls presented been first take one have Nevi very that to and to We the comments

than with the company in take XX-year policy a expect. in that always things engaging we you longer As experience heavily have

the form manifest ground for the in the any of for to year with anything program of X respect run will significant predict state the thereafter we as expectation too don’t at what at this point years there be to equipment year the and so And will this actually have hard and next any programs It’s schedule X-year duration. Nevi. all, flow material kind in

we of class – It’s that the verticals. net is our range. car battery verticals affects and beyond that’s the one in upside. segment passenger that with the the And So your vertical, a dealing of treat many one it just for we great it tailwind driving in of that’s are business as

we than as that how we because will do. next to conservative respect we always we again, has more for and treat imagination upside year, completely plan with into So all it very be will going life

to you On the mature respect look seeing the those are are are seeing transit at scale because most of that segment category the second point with – with that we if vehicles, fleet mature the respect number with now, to that bus, we product. OEMs serve for

vehicle a and on to So very, but and as it, hit vehicles the lot you bet going a It’s relatively that it’s transit And do is off expect to start start of overlap back deployment vehicle just the the will us conservative now with has see their just It right vehicle about XXX want X to pilot don’t OEMs that, comes through it But logo get yard thing commercial haulers that gets is a respect vehicles passenger ramps wins. to be you again, as side, Light production that But the kind the integration hard to XX on just off next to on a there year planning, very, to integrated. customers with vehicles. or ground until segment as X to etcetera. very, it ease when we fleet yet. it. isn’t we because or limited, vehicle nicely. ground of get same for with a moving class X software into volume

are that groundwork all we So now. laying

And me a it guys. That’s of sense helpful. [ph]. this gives Thanks,

Bill of line the with JPMorgan. from comes Peterson question next Your

now is Your open. line

but of Hi, understand us was you I are excess help the what of guess, a then mix how for Yes. lag, of to thought you view similar And at hoping in better what the can trends beginning the quarter, I I you in of relates I thanks about in it maybe taking you able the there, the sequential was sort we as are quarter? questions. of guess think kind to the think, trends point in the on what quarter, guidance, terms seasonality? of deliver should second seeing

Rex. it’s Bill, Hi,

in from up part had relatively picked what was the It commercial of vertical that speaking, we the recovery. terms quarter, of nice a the course, had in as of very the our performance So business in little that remarks, prepared lagged most a we nice the said pandemic. during the one

very to bang coming then you. And that very, be So had teams in the out, with to we a see to operations nice honest performance very back. welcome just from product

So was than It thing. one one something mentioned. anything the it no else I like thing other wasn’t outperformed commercial

were of little the at we outperform systemic could a for end able to so again, that And quarter, bit but QX. I the nothing describe

bit QX. QX So if to grow of and QX the is little think the and from we I QX QX you you good from to think in from we are QX rest to well, able to of what outlandish there nicely growth look Obviously, teams it well. guidance those hitting the at not year, up were of backing a our see terms for yes, and do we us QX, backlog the but have a clearly, our supply QX math chains and we as numbers. And just can nice and for up –

So, of it today. consistent would of more up right it’s be a expect but pushing think this we where external we just a that the would is now envelope, environment changes, external keep more game the ball until clearing the where breakouts weather function a – any considerably from I of is C

answers So hopefully, your that question.

is second... seasonality. European mostly that guess just up Yes, the But the I for

Hello. Go ahead.

Yes, go ahead.

from ahead. say – go seasonality to perspective going just was I a

please. Yes,

You first.

too. Okay, answer Europe, can you

Yes.

Okay.

should improvement about the reiteration the hardware year guess see I the margins stepping guidance, software of to down a and view, step GAAP point margin? and sequential in how up, nice services we factor about? XX% full from I just range the So, I least the margins think for forward? at we about margins should driving going guess to what in the to the margins going was key you full that that’s be that talked reason to year in segment think and presume how a of XX%

are And you side so of being as software the to specific that?

how to am I could well why breakdown understand stepped as Well, the you be the if provided we I quarter? mean you software But would I range the mean, trying get that down to helpful. in second margin

okay. Yes,

a business. quarter. to field expect There lot out comes things And from warranty improvements. it’s a given new So low have we the are most do – down provide margins and there at the there We have host line product. obviously it’s operational and just being happening we is support From we XX%, subscription our because that look accomplish and broad both up happen I which and why a software here components lower subscription profile. a perspective can gross want they hardware that component what that against have you work just a big the and the from product is grinding XX% baseline. perspective. of start to software SaaS to our to gross to good And – call that we there think design from high level than What our pure a you from able cost is a if continually software bar support obviously pretty again on quarter introductions coming a something think is would therefore perspective, XX% as do. less we or going costs last process think is bring Assure the I the from a finished everyday. from side it And center obviously is put to new scale, that baseline, our warranty line, And just you we speak a we don’t a on cost and supply people off there is are includes that the margin that I thing of a going really is baseline from driver not be those think imagine high is I to everything to base a it negotiating and got know

we into are and will investing would we do but scale heavily efficiency there over I as that we continue next year. expect to you gains So see go that, for and time will

Thanks. you to as sorry And can European, to the interrupt back get you earlier.

asked about thought this Yes. I you question seasonality.

had So this good a a growth such quarter. last quarter a Europe, really not Sequential Europe big great as but quarter that’s was number, quarter.

beautifully part So of the you in executing did is I more Europe think ever as this we’ve QX and will strategy, about that area. which the here this in a if higher. QX that transition on year, speculate the And think time momentum you we’re I on seasonality broadly, gotten we happen what of talk had mention, got map I company’s QX obviously, year, lot first to nice but company. definitely was can’t a

hope I yet. but that would I So that, we reproduce could don’t know

nice seems a the execution. That Thanks. again job on

Thanks.

comes Your from of the Stifel. with Stephen next question Gengaro line

line now open. Your is

little it kind recently. was fits the how part could Thank into business, curious been overall and you talk just advertising of about your it it good the is just into opportunity sort portfolio. I’m there bit product about afternoon, about everybody. portfolio, think ChargePoint’s how fits basically and you of curious if you talk of of I some the a side there how that and sort

Yes.

started commercial, engage certain one from – our that side, get etcetera, it Stephen, us shopping retailers, ways certain many from sub as with view of started. verticals a And malls, could So charging. or get EV it’s we inside of way say, for to they

enough – or side in subscription, the we or, We partnerships, around into we very me, engagement saw hardware it you of on we the a really market. the excuse from view look to of the throw recent cost any get at look an as at within narrow quiver. where is the good which model And advertising it or brought We financing to another that. at we some bundle site that our are models the a not complementary So announcements well. to substantial of service and some narrow developed set, that look way that it’s applications. an But some kind is just off where we offset going we’ve as hour that engagement of very charging, partners naturally probably revenue have a charging an as it optional some get another is set same a as

again, think as So of don’t just numerically. – think I it’s business. I broadening it change about a it the will

Our a doesn’t go-forward our more on gives needle change It it options. our basis, forecast. customers just

it Is it is or of incorporated systems charges? in something your into tandem with sort your

Well, there the that’s that that do of and a between the on And are is left don’t always advertising – association ads it the traffic is delivering site. model stuff reasons number a But very the flexible course, for respect. this. separate at have is that of depending different fixed you device we charging very We are financial integration they built applications like in very when two we way ports. the the because

yes, an right? yields the site’s And at it’s flexible. answer short it’s that best your So is, there local partnerships to yes, So statistics, that economic site outcome solution the through some engineered is very integrations. question a for

Great. it. color. for Thanks the Got

of Cowen. Your Daoud next the with question comes Gabe from line

open. now Your is line

on mentioned, is question decrease Guys, would there Bill’s remarks that and the just stock-based else comp you Thanks prepared so just a going quick for sequential earlier in the is clarification it a afternoon, the Rex? maybe so step-up anything subs that or on just gross all drive you, – hoping on Thank far. that just margin, everybody.

So question, that’s GAAP a Gabe, right?

a on points. it GAAP XXX basis, declined about basis That’s it right looks like because

it’s So else? comp if anything stock-based or just

is obviously, a is as line, it’s intangibles The But would big because swinger, main stock-based be amortization then differentiator well. comp, mostly there the a one, big right? of that’s is not the in and

as So well. sorry, amortization

XX% gross on are the we product. we One a is because you perspective estimates. margin, half shaded we’ve guess a something should it eye up the doing see you to the also of non-GAAP fundamentals what for we track building, which hope going current year. that selling standpoint, closer from that we think – tell us models that’s lower low thing if to – it is going the from But can So that what guidance get the – – we marching QX there, an that what of the it confirmed we to back should making do, of of when we’re look the that’s from but some should at And at – the in street. out driving down operationally look the business a be just to to you you and up in to said you is were what margin is and you, got I number obviously something would revenue the My have on. keep at from

a Got have And it. levers previously obviously helpful. the just you then get we just are more lot those I highlighted guess. that little Thanks, a progressing, said margin, on could you – specific curious guys That’s color how and Rex. already maybe if but on

So be ASP the it would increase.

also new you introduced the think on module CPE XXX. power I a

you the those so So making guys. if are far? expected and just Thanks, curious progressing how impact two that’s that

Yes.

ASPs. with start I’ll So

calendar and last I’m did in we then the that I this we very had sure early in think occurring that late. we we covered fairly the call, was one another pretty one adjustment had year

order I QX. actually we think that impact to impact it in was norms in in that enormous June, do seen we see on and haven’t expect so on

a thing. my in and Europe in the expect remarks, mostly in QX, not side. So North across America. the product kicking QX That’s – I’ve do we ASPs said And improved to fundamentally that’s see this

I some benefits there. some get we that optimism good will So have do

it performance QX. version and in new is provide mentioned module. We power rolling only the produced that and do That being of module benefits volume out. a new QX as power hits cost you products, not terms In have but benefits, here will also

gross as stuff where Board So the costs lower there then the existing work prices components we’re just margin, and that’s doing components contributor. performance, far necessary as is out generally, either then on both. for swap to across higher another And or

helpful. it. Rex. Got Super Thanks,

you, Thank Gabe.

the of from comes with James line question next West Evercore. Your

line Your open. now is

Hi, good guys. afternoon,

Hi, James.

– Pat, at next wanted are they into but this ramp vehicle I little a and pretty mentioned point, more. your piece They going Obviously, coming. and Hi, to were the coming fleet they year, a are So are are, you that’s going bit big be dig limited to vehicles to business. chunky of significantly,

are guess supply I about big your surge contract manufacturers what’s chain, thinking in that your or handle So ramping how pretty going you expanding probably your a to capacity be volumes. to

in volume are will the the that use vehicles ramp universally, James, a little the two fleet. may use hardware remember, profile And still to to it increase is different and the we some markets. platforms same same due options be bit have There a configuration between commercially we it.

I be So improving a naturally sophistication one. we’re we we’ve an all, that’s company, running of would back to always reasonable public since there. by ongoing first evidenced look Two, we’ve lot chain process the of of forecasters forecast at the managed records we’re accurately things optimization our base, a that and and that been can as think supply CM you the

CapEx capacity dedicate scale that to we’re the respect of limited to and can CM So our more matched as We the are with with – will. not at test capacity. and labor the course, infrastructure. more all to think We with our just well we downstream, to factories, a manufacturing needs. CM partners, ability pretty much And respect control they we matter,

see as more real don’t So factor net-net, see vehicle still fleet, on supply the I limiting being limited. it chain I

Okay.

Okay. prepared these their getting are in of And then to potential where you’re deliveries? they customers when for talking process fleet your

I of answer that – frankly, I just curve. it on some They depends There to the their hiring industry, then this. Well, up mean is customers that nascent things understanding kind bit on been out are utility of get in and there others depends the way have industry, more a little learning customer. are the of the the our already obviously, people piloting And it etcetera, industry, ready are things. mean, are for vehicle

again, I But that that we consultative spectrum. shopping. well. further And bit software, have really a for to be a can aptitude the can less design-build really up it’s we have support in comprehensive and engaged fantastic want customers certainly customers learning that we as stand very for one-stop curve, services that they So because more, are think

in again, – at be think I and curves. were I I the the shoes the your looking still modeling, if So real – at would vehicle

I fleet to the business excuse is our be inextricably think into – like me, much vertical. or penetration commercial going vehicle tied to

Alright.

Okay, got Pat. Thanks, it.

Capital. the with [Operator next Your question line comes from of today Irwin Instructions] Craig Roth

Your line is now open.

Hi, good for Thanks evening. taking questions. my

obviously I we SPAC do third fiscal time the of were some historic performance And can at items give feel progress the around the more merger? maybe and trajectory in some We levels behind the So and a there moving color made quarter. that uplift was issues fourth hoping are direct look the how at us really discrete to shared you a targeted you you. little could chain quarters. longer-term bit supply about provide the that should recovering good are the in levels But that that performance of

it’s supply Environmentally, to specifics. last demand from back electric I margin. easier for the and question answer by Craig, think into it then the a vehicles work exceed long

So basically production and side rough goods, there macro vehicle capacity to consumer most on the consume crystal vehicle the if on one hit to OEMs. environment to the going is has But for electric the macro environment. of begins ball a no the sufficient macro patches be demand environment still if the some

have electronic where it broad-based pretty a trend see much the the respect much but factors environment sticky year are continued still and of chain mouths should macro, components, but a be we right more that much And to It should supply to now is the electronic points actually The to around associated where we aligned with still to more What centering still will we’re improving we supply as chain much less see So there with not is facing in was growth. actually see feed, sheet seeing more But want pressure with a now. the is broad-based don’t bit exclusively, a into from that’s growth randomness are. we ago, more we think well centering softening everything to components. so plastic presumptuous. metal there.

helpful. continuing. plan sure. headwinds think surprised easier I changing as aren’t a it But it’s subsides. a when the all Hopefully, one because to again, for ball is has anyone headwinds then perfect color that’s of So don’t pleasantly bit to And be there the crystal for

That’s hugely Excellent. helpful.

So if if I could squeeze one possible. in, another

you’re are the investing can what You’re growth for the R&D teams? on maybe for areas or hiring are bid focused your we really you right? head company is with share the focus salesmen, at right Are at and now? you looking that on ChargePoint priority growing, the engineers, count, additions, headcount So a us

I outlined. slightly mean, performance it’s you the than as managing had we’re gross to our guidance expenses still, range hiring beginning at year – operating of said, the lower the margin

we And basically and you pretty are shaping much we’re the still still board. so OpEx, hiring across said, but growing, as

a most as in can biggest quarter-over-quarter, of where the pressures scale In think which about years. company, a that’s don’t company see you growing companies in of infrastructure couple XX% the are terms our effectively

there. a what what scale needs imagine from doing support the infrastructure ahead can in operations, only we’re of laying perspective, in You internally in not

So really, positions are a lot getting are of really in infrastructural company the investment. the really

that our be the business team. or rate. a manual as automated that systems with is like at is investing doing you’re used for Very we’re thing two. can in fashion heavily reason applications and a some when what steps quickly, business quickly we less in in you something we’re handle handle eclipses internal what our growth quarter Another And that internal to could

thing tell I’d time an It’s as rate of line I growing closer our rearview of than what the interesting – so close the objects scale team fast. because appear. are – in you’re that they unprecedented all in the the is applicable here issues issues So

a not a thinks and preloaded and most we invest a that With every the R&D before before whole just go, So we’re XX that’s qualitatively the still can over it how management and so public, lens. companies you the growth investments we were in use charge growing here to else do. as – private need lot were we about pretty last R&D but like R&D, was years, pointer in said, where literally much sales that

– things enable are it’s towards to the weighted more going scale. heavily in so much evenly we’re to now and And long-term much that weighted us more

Thank for that. growth. Congratulations impressive this really on you

Thank you.

Thanks.

from Your next with comes question Shreyas the Patil line of Research. Wolfe

Your line is now open.

shipments the everybody. on that in what demand not could supply – more there what that is supply have to within trying constraint? the we supply – seeing growth the in ability your the environment. just demand or the And ask for level think I one through underlying you’re also, wanted a guess chain Hi, the about impact margin and been I how think to is the the what of just to should that quarter? I’m to revenue was if unconstrained underlying

Yes. Hi, Shreyas. This is Rex.

adverse purchase variances sort logistics about price impact points the we $X or percentage expediting of things costs, would we’re unusually call quarter as million quoting, or X it’s So things. that costs of the in

that’s consistent by the and way. issues been X get this it’s of a in X X%. we different X year. So QX, X, And then to We points quarter, this two had – reasonably at

question on we where the the do is the going I Obviously, of question earlier, is as second see we’re to mentioned be So part that. going? that – working

did – – so NPI that hit transition QX, product some of note, should also gross we a there in had QX. costs issues some introduction – product transition the One was costs had In product we we you have that things new margin. that

there. So fundamentally, it do there could some we upside think additional been – have

I happen revenue QX, have will to QX, margin. that, could I help us and but went [indiscernible] what on And XX% drive been and then of a question think, plus, backlog. we with in We’ve another have went large QX – what’s going a up number not see then issues it given is XX% chain up easing QX. it of the in actually of growth that the very the So kind think gross some supply we into to

we would So different. on literally give it would build that. I you be everything ship top number, we you everything, just but a can higher a and is number substantially question materially can’t if have a anything imagine the line. could about and There

high good OpEx? could OpEx support some how assuming level, And at squeeze versus that the OpEx and pretty QX the there drivers in, is of just in drivers I’m even one QX. got – wondering that what were of how you year about look improvement there. in flow if cash And you’re the then is like breakeven Okay. then marketing overall then back but towards QX especially thinking improvement But looked just into main even sales to look it just just will from terms improvement I half. free and about leverage the next And like a kind like obviously, think in guidance leverage of improvement continued continued obviously, of you target? some

Yes.

So some was main all, – of I in was that there about NPI I costs just XX. first so The mid-XXs, the of mentioned baseline, QX QX earlier. to delta is think the

effectively expenses QX XX% look it’s to people. you if flat. are So operating QX, of our

the fast else obviously slightly too that looking trying because to we where OpEx the managing anybody one things even do target balance hiring have in that. then and want to positive margin So cash being losses But we at versus we because grow to the between consider flow of be gross didn’t XXXX. did the is we with being it slower of we’re take

two some So, months. of turning down been over we have last doing that the

mean differential disconnect a because expenses complete just is sequentially. as be to I QX I into in going and complete rate got and there. you sequentially we is through think year there growth the significant the next leverage between top go operating have So, QX, line a

don’t but the see us. to see So, be much, of rate it’s to from much perspective. going actually I down, giving increase line itself a the going the top is better increase keep very number much getting trailing the I going rate that leverage of

helpful. Okay. so That’s Thanks much. very

Summerville from next line Matt comes Your Davidson. question with D.A. the of

line now Your is open.

basis want law or gap? a a worth follow Pasquale bunch the of how of words, finer XXX hit, point much I on close how then other I that In alone up pricing do much hoping of was put being? And could to points the a Thanks. just There solve potentially will end on EVs accelerate maybe comment decade. is just by next other How you. your middle XXX% thoughts of California’s mandated go-forward briefly Thank change California. strategy? states that overall on does inform typically that or the pricing

strategy I you place don’t combustion globally. great virtually forward look don’t combustion the especially the they all question. the And in I the to already centered respect around different been different put places R&D put think to auto number been on at substantially changes that’s platforms reason And to maintain lot internal are is impossible if bans XXXX already the and what’s electric the in sell are in – it internal is most side And because it’s in of with planet, Europe. at vehicles, optimize a the all. side place in end. OEMs think our on battery them, the about

the been that changes lot So, it put think don’t the materially think bans rate of has is, of in I electric support adoption California vehicles. materially in really of I the don’t already it net terms really a it have changes. But done what place. of with aligning I

stated one And then or put now, buying think I it the to demand auto retirement Consumer all begins way, vehicles that to but don’t you entire have one only meet their going out. got, a for You studies, gotten the outside when to supply this I demand OEMs will you I have call. two got will effect worked that of accelerate auto supply manufacturing I at value all electric on And thing a ship look when have in are and because exceeded when there is pressure their come the And refit vehicle. OEM the of by right. up transformations to other good residual vehicles. for consumers, question forums commented an earnings I already ban when have early any is our ultimately curve it think perspective supply. from – have much the cycles of to an an have consumer vehicles to have interesting in they vehicles on chain ICE infrastructure electric

just So, on I to PPV like speak, since to I to question electric – it’s going out let will turn there, he was back take to cleanup, that margin, conversion the certain I batting think I ASP so am date Rex? dangling previously because him vehicles. versus Rex on the the it’s commenting one.

Yes.

where the running two-thirds a a about as this I in those on logistics about – earlier, timeframe several do does is they now points those go ASPs and seem We external And can for we that are to and I you focused X on then And positive given definitely coming those row. to to price a down. and see is said, think think getting they hot be And our improving going to but actually we in think And that which problems basis said XXX points of The have question, – least ASP move done, Pat been put quarters QX. by and your think be a base, as effect a full a now I or at that, hard piece PPV the to do the quickly, costs. away covered that other been it’s having I third the going problem nicely narrower, as have increases sign. get are that changes. have QX very more northward broad market do were So, for are is, bit. everywhere. opposed you

to QX. they imagine, get you as you take announced effect until in June, you really QX, but don’t So, can them

as I think I the naturally that a decline. other follow-up. so then will the environment things nice will And think improves, And be

that the more next So, will place, than I to better as months a in those would things substantially would be like six over actually two think cover… we converge that

Thank Understood. guys. you,

of Piper the with from Your Sandler. next line Kashy Harrison comes question

now Your line open. is

Good afternoon everybody. Thank you for questions. taking the

you can could you ones then, at discussion Thank Rex, that’s Act mentioned supply – And you just about maybe for range two demand to across above big a just at end And just of about Pasquale, the if around Just at – across me. this, picture OpEx? us, the and of are talk clarify me. business the the capacity. be expect you for but you. a how impact your thinking you level, guidance light bottom for Inflation in apologies Reduction of it do for your quick

the balanced will So, one. first What Rex Reduction associated We we well as like is anything we that I don’t it about reasonably lot. the second. take for incentives fleet headline. you as thank will has take what and the dislike here the a vehicles it The the for like Act, about it, is Inflation is question. infrastructure. commercial it about both

as or don’t policies us from whole to perspective look So, and that in always looks And one demand see do shaping that key picture at bill incentive totality speak. effectively hotspots for and as this a large in tried balance, that to to like it it’s that. like create to a as policy hotspots, reasonable the it’s tough that very address in so something

the portion on credits print terms in of based of customers’ incentive the of to impact tax or for always situations So, credit the the kudos authors. given in to with usability what’s is – the IRA. the The the business, wrinkle fine that tax-wise, tax the unique

will cars. call. So, of to and get subsequent we over grease years, the I the think a off business next passenger going couple the limited probably is hard be smaller skids it’s the whole still are on on vehicles think the a it change I does, blocks pressure supply But don’t in and the fleet right. demand relative there margin, again, infrastructure to our to little because necessarily demand companies But the on lot. there, because to both

are the you substantively. into starts And versus my think you the still through range, substantial. Fortune rate gets in don’t If faster. made it top the them don’t that would little – But penetration respect down. of some XX% I the forecast – mass out of it it it’s remarks prepared bit at the frankly, XXX, down to It’s but as I having lower, gets it you that the at move may businesses there, think XX%, our a I Fortune diffuse move to get than you upwards and look better as XX still trickle with blocks of the move incentive off quotes

you do Yes, on you as piece take that things. QX, said math on the would be earlier, gross lower cash if guidance, result, me as at margin. looking we perspective. second. to probably ascertain shading a are Let of that range half going positive say we expenses, for towards operating I the would I One, side, second data from QX two are gross And that around flow on responsible margins that a against the

And estimates. so back expense are our feathering operating we

in would So, to year. half the range be of I lower the expect for that as well

Thank you. Excellent.

of from next the comes America. Bank with Ryan line question Your Greenwald of

Your now open. line is

the guys. Thanks afternoon Good update. the and for time

ultimately and what will Just incremental costs revenue provide to dive a shared? you partnership like and the be guys on bit looks earlier. little a deeper color can from network monetization Any the advertising around partnership discussed how

there. of buying Without right can I model are it one something us are the just the line, the infrastructure. are partners monetization it – how I we What is can couple am a about are does I directly a, provide is from It’s to tell you trying want to don’t looking we I probably end. monetize perspective, our just what you now. we of the venture on commentary what from to infer just like being the at so we it’s speak, not the advertising, any to evasive. supports comment don’t not a on looks confidentiality But want on to I options

it right. will used revenue into the or a look offset a charge sold through the cost monetization partners advertising to customer, particular program point provide our charging-as-a-service is that the that way and the So, on like profit. And we perspective, from a works

advertising are the monetize we to not trying So, basically direct.

this IRA, pause you planned for and the point, you on customers kind for previously Understood. solutions qualification alluded effect? look take to That’s the half credits. clarity helpful. the seen And ultimately nuances any to for of tax second some to At have credit then any bit a

perspective. is from I seeing sales there in may I changing an But in it’s am the no broad IRA large law is account there alarm that brush. do or anything of our stall here that the any that. certainly bells forecast, not numbers, there marketplace significance I have an gotten not force of from am sure any and our

so it leave will I there. Great. much. Thanks

line next question of from Your Fox Steven Fox comes with the Advisors.

is now line open. Your

Good Hi. afternoon.

one for Just me, please.

from related with the side, have a trend be You how mentioned the had curious how etcetera? normal new you commercial now just of to are the going Thanks. some or there, positive uptick Starbucks lag commercial about there COVID. on of was points managers, inflection the hotels you thinking helpful. that from would kind are conversations the like recovering I comments or office Any on recent post-COVID

I call what bang whoosh, industry so is broad. This because no an all it’s

base for level operators, has operators, of to of are The just commercial it’s sure. just everyone have it engagement parking the an a everything it’s the broad-based. estate massive doesn’t wake-up space, And quarter. the retailers expect dislocation sub-verticals hospitality business just across just definitely now, not call we would got from seeing inertia, from board, got too in a in I – a much is real commercial work What operators that So, way. – it’s commercial broad unprecedented. the

of to and materials are counsel charging of each parking our lot. capabilities that in channel, verticals those investing our we how approach our in things sales the specialization their specialization So, get from us support of for possible enable best is all specialization sales scale the force, one to to our of on enablement

think – right. in So, our are seeing growth will I it you you rate,

that it seeing of growth. right. are the kind our And are in evidence of lags – You seeing you remember,

that leading of level just the report a a rate is tremendous force across growth indicator, board. on a interest we the into indicator is Our very lagging sales

next of Riley. with Christopher Souther Your from B. line question comes the

Your open. now line is

taking my question Hey. Thanks here. for

Just as piece the for and increases just market residential bit in how are why about the well up really in side, hardware Maybe steel not broadly then fees well. more am dynamics based. real software Thanks. Europe talked as U.S. talk the about we continues in also about increasing And I quick, think kind little you software curious pricing a there. as as pricing of kind we gain here strategy pick to there? just of time the of around fleet kind over should

question. remind would Chris, repeating you Hi the

muddy got have pretty You line. a

U.S. dynamics or sorry pricing, over curious market that. Yes, talk about driving over residential on time you talked time little can Europe that? are software being hardware ASPs, well. bit then grow increases why we a decline as bit in? I then And really in Thanks. how maybe also the with little Oh, And piece that you popping should not a a about being based. on the fleet also and kind of the am about increasing just about bigger

loud time. that I question. clear heard you Thanks repeating for and the

So, a market a got From very a in on here. America, – yes. front North perspective, have obviously, hardware ASP hardware – the great we position

over competition possible of North are When know. as elasticity relatively there. you Europe, some in market. is highly lot is a It’s that you a there as fragmented, entrant to So, America. we go recent into There

bring do seeing able market are busily be of line for price understand But value be a doing. what are believe honest, better with we is is there, are of to people we term, are we work educate here. the level provides so superior more – And educating that to in there overall or what other integrated to fully to solution to market to full to lack accustomed we a and it, training the of training network the the ChargePoint

an any And escalators have have our which we to prices of software expect adjustment company, place do our most from a what here back then perspective, did annual from we February. – from we on that selling software then So, would in contracts. you in is

thing. and the interesting cost to a expect that’s time would living with from a there to what where doing of then you are of worry, kind very in be content companies space us of the that the I don’t software the love But be is big with out, be to a can’t. would And that up so it’s to just is dollars because that the certainly, the know going just enough I going to shake fleet perspective, And overall but see of we fleet to forecast content software level is know be number attractive. see. over be going creep percentage And do, I going a to I adder that but business rest to dollar will to going meaningful what’s

from comes the of line Citi. Itay with Your next question Michaeli

Your line is now open.

afternoon Great. Thanks. everybody. Good

me. ones two Just quick for

the margin the in the of make point a that then just second that Rex, first that gross half, element the guidance you I much side. margin, sure half how just end on gross the incremental the bridge on clarification, spoken about from revenue accounts lower First, margin, not the the was of that included is much to gross to how have any for for sense of And pricing up? gross want of step margin for call, for that

Yes.

So, commentary is and OpEx and there OpEx shading all. at my margin the to specific was on margin gross on no first clarification, revenue and line gross

annual gun the the that very build. the limiter main guide there am and there confident got the in Obviously, guide I QX our So, to is we sites. ability just have

think half improve that will combination And from that going there. be So, trajectory I And a the is clarifies margin half, price kicking in hurt. can’t then again, a gross again, from to hopefully, second things increases first perspective, it’s, that. the everything of

we what what what get to do, we our of it’s of doing shift us parts. charge everything but are obviously, so lot then, There helpful. work that for with And to are be from charge and paying they they is very CMs, they do and would a a us course,

supply improve you I side fundamentally that is chain to have focus particularly gentleman who hired us think operations So, of Wilmer, and we operations, a by incrementally may things. will I on in we seen Rick there think just better heavily, from getting join

So, an original that nice doing And we strong R&D job have power of team we there. does We are like. very things very a then had module. optimistic a

a below, to it’s module, supposed course, Now better, that’s which, has power faster, new not we you is. the and of it be have but are cheaper, of version what definitely

the the it needs So, why those that back combination things margin gross be. headed is all I is think believe it’s to where of we

It’s Thank you. very helpful.

Thank you.

Patrick today’s concludes to back you. will session. over This I of turn Q&A Q&A call the End Hamer,

Romano, and our Thank to will CEO you, I President. Pasquale Emma, it back and pass

I Well, you. to to people point, to long first of that have really thank when through cross you have of revenue for company list there all, thank people this $XXX to quarter, it get a internally say is and tirelessly worked your of first lot a million a XX-year-old

are the as scale, all here mentioned enviable is team have that to out rate So, pushing they on. to been an the ChargePointers investments, feels to risen growth most proud in have the necessary here them there occasion, really broader And the what companies. it growth to and obviously, an that, give one the even are multiyear the of they stand we I really quarter-over-quarter are we to making for and And doing. answers of foundation

partners. then So, thank thank you want listening. to all our and the And ChargePointers customers out there I our that are to

be that’s to companies, especially could many by for times. for and very and so an they have us, all trusted demanding happen Our through customers under them, to us, trust to honor make this and come

this company. a again, listened that everyone So, into minutes asked modeling there of robust, the out a We have you XX had very a much we are makes thank that in, was for so time. to lot and the questions. bit I of glad that go. And had thanks analysts putting place Q&A, very lot ecosystem large time a it to am quite of we

And Thank you So, appreciate that. we will much. quarter. you we next very to really talk

call. conference today’s for ends you attending. Thank This

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