ChargePoint (CHPT) 1 Jun 232024 Q1 Earnings call transcript

Ladies and gentlemen, good afternoon, my name is Lisa, and I'll be your conference operator for today's call. At this time, I would like to welcome everyone to the ChargePoint First Quarter Fiscal 2024 Earnings Conference Call and Webcast. All participant lines have been placed on a listen-only mode to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session.

I would now like to turn the call over to Patrick Hamer, ChargePoint's Vice President of Capital Markets and Investor Relations. ahead. go please Patrick,

accessed thank discuss joining XXXX ChargePoint's is can This and our section conference at website earnings on call call investors.chargePoint.com. be and webcast to first being the you afternoon Investors us of for today's results. on Good quarter fiscal

XXXX, Executive announcing ended Officer. on we This today's Chief issued Pasquale can results Jackson, quarter Rex which our Romano, are me and found XXth, our website. release for be afternoon April the With our press on call Officer also Chief Financial our

are call, remind will our cause could We'd that quarter forward-looking many expectations. like to to beyond you results the actual which risks for making during of materially including our the statements, control involve from conference XXXX. our These uncertainties statements management and forward-looking fiscal differ second be and outlook of

of as these we apply statements statements the no update call. after forward-looking today obligation to and These undertake

actual For release a with differ, Xrd, on on description factors SEC to of and please on certain more website and could our detailed today the Form Form earnings filed our SEC with results XXXX X-K. refer April the to posted our XX-K filed cause that

the to measures for of we our on earnings our section. on please of section Quarterly Investors website Results in And call posted non-GAAP transcript the under historical Also, this Investor which Relations the reconcile website. note we'll periods use and certain GAAP certain this that to financial posting be the in call release our investor finally, presentation

over to that, Pasquale. with it And turn I'll

of guidance points sequentially gross strong first and million us joining all range the a at Patrick, to margin quarter. high delivered Thank $XXX at you you, and two We for thank Revenue XX%. improved our was end non-GAAP today.

year-over-year in still a Europe in EV at ChargePoint's and quarter decade's long growth in that To the results first cycle. EV XX% America We and beginning the only achieved and largest market are history. growth North the of installed into perspective, the base in second quarter is rate put did a these we while single-digits, the

this achieved a midst of macroeconomic also We the environment. growth in challenging

resilience and Diversification continues across our to business. to verticals geographies contribute

So due would we a growth purchases. what less American believe than liked delay have saw while Commercial in we to in Residential is and we discretionary North

to continued margin We improvement. growth see overall in

Rex But guidance the will of to largest long-term history. you magnitude opportunity would sense the QX address ChargePoint's second ahead guidance of the for the us, the quarter. quarter just of of in a that make midpoint give

EBITDA. measure last programs. bonus use give You'll as non-GAAP profitability also health drive we our two of a towards proxy week. is our we as of business management metric of This statement EBITDA the filed as adjusted To one hear some non-GAAP we components context, Rex and annual adjusted in about key talk of disclosed the our

the results, we're continually Beneath our scale. top-line and operations improving future investing for

improved changes and consistently margins have making supply our cost recovering while optimizing from issues operations. gross our products to We the of chain meaningful

systems. making our necessary business operations managing Also our scale, are expenses carefully as the and we investments operating in support while internal we

delivering to infrastructure customers. to dependable committed are our We

drivers So on and use can everywhere. depend it, it it find

to QX, back Europe Turning particularly strong areas and fleet. two growth, we saw of

and more the QX. segment over history, of fleet time entering quarterly billings, to vehicles as year-over-year increased of Meanwhile, delivered our percentage on For than limitations XX% fleet QX's the a from supply in first revenue. ChargePoint's despite billings relative Europe demand, doubled

in to growth see encouraged areas. We're continued these resilience

every software the for on nearly Beyond products. fueling industry-leading continued our offer focus hardware to financials, and we vertical. We

North America and deliver to help kind adoption our solutions Our that customers of EV accelerate EV driver continue the experience will Europe. across

and more better for a partners positive the EV entire growth that ChargePoint, which feedback experience, delivers value environment. driver the drives benefits infrastructure loop The our charging across EV drivers better brief, in In ecosystem.

changeover of continued to we index of the electric the believe on are or drive electrification result, And from an betting OEM for as mobility. we are regardless fossil a vertical. fuels We

more to give off our Rex, little to handing continued on few update let Before color me key you on growth. a you a statistics

side, and to milestone we in quarter approximately to ecosystem and access XXX,XXX give last a network roaming on we these EV and up and a drivers site network ecosystem world-class XXX,XXX active delivering America the ports host ports ports. such These ChargePoint's XXX,XXX North OEMs providers. are are On ChargePoint as and partners ports the recently fuel passed customers of under critical drivers strategic over partners to Europe. management card of ports roaming XXX,XXX from

on Approximately located the XX,XXX ports in of at QX DC approximately and end of the network, the fast-charging one-third our ChargePoint overall Europe. our ports XXX,XXX XX,XXX of up from approximately

count of XX reflects XXXX customers. penetration expand strong rebuy XX% XXX Fortune the XXXX our of rates. the solutions, our the stickiness our We as excellent and of land Fortune our XX% strategy, given and This and

of fueled million tons our quarter, has estimate the now X.XX gallons From approximately that X.X metric as avoiding end miles million perspective billion approximately greenhouse the gas gasoline emissions. XXX we network an over and environmental electric of cumulative of of

it the into business as we we're of innings ahead So heading that highly despite you'll the We're long-term market you opportunity. continues. transition map ChargePoint while in that green against CapEx is environment, And differentiated not shows this growth hear progress from when ensuring made We put the intensive. turn current of world road the economic ChargePoint black our Rex, early scales all that EV running the significant that together, remarkable a

you over Rex, for to financials.

Pasquale. Thanks,

reminder, and Network to network lines. we a reconcile report three subscriptions, As hardware. to results see our along revenue systems, our and connected earnings GAAP is systems other, that charging release we charging where continue please our non-GAAP recall to

hardware, assure revenue and our services hardware, coverage and consists warranties, certain bundle other connecting of offering ChargePoint-as-a-service and include subscriptions, non-material that cloud we recurring Subscriptions into services where our items. warranty software professional

was QX good QX, our from a largest the the compared quarter announced expected the range years. indicated, a second of million, two to over and company's million for $XXX QX previously of contributions of ever As and as guidance XX% million, notably QX past midpoint start year had when we year-on-year the $XXX Pasquale solid seasonally revenue down with to $XXX up above

Network million network of in systems charging million at $XX seasonality. from XX% typical from down QX $XXX was revenue due XX% XX% year-on-year. QX, and QX grew systems charging revenue, to

Subscription call. XX% revenue last at $XX and million XX% was total year-on-year, million above sequentially, $XXX in we revenue, up referenced run of the rate up our again annual

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

early believe is a in what growth long we this We're days of see EV especially recurring to encouraged very continued revenues curve. decade's in adoption our the

Other revenue revenue year-on-year. increased and million $X at X% total of XX%

XX%, verticals, first in and commercial X% particularly to XX%, strong performance XX%, other fleet were percentages Turning residential reflecting fleet. a quarter billings

Commercial its and America year-on-year, fleet from generally perspective, geographic up Residential was grew XX% was billings and North while maintained percentage. a From QX at XX% XX% was XXX%. consistent year-on-year, grew revenue XX%. Europe

mentioned, continues on Europe of North basis As percentage outpace XX% America a year-on-year. to Pasquale

of Turning up margin, non-GAAP, for QX XX% eight QX gross XX% QX XX% to was in and from from year. up points last sequentially is

pressures, diminishing is improvement significant combination primarily scale. of supply This improvements operational logistics better expense and chain and a

believe our investment considerable we our support We and differentiators reliability, and for because and critical support in our host infrastructure drivers our continue both driver customers.

margin gross improvement year. We expect this continued non-GAAP in

of payroll X% expenses and X% Non-GAAP for year-on-year increases a QX reflecting compensation primarily increase as annual Xst. well million $XX operating increase sequential effective a of taxes April were as

of As leverage. out improvements deliver rest will and operating we expenses look carefully the manage to in XXXX, we to expect

XXX% XXXX, our XXXX and you recall our may our of in investments forward OpEx at calendar approximately in was As reflects significant revenue. which business,

In again this QX for second particularly that expect were continued revenue improvements took and year, XXXX, in down In XX% the but to we we in QX, the seasonality, given XX% half. at XX% year.

Given the EBITDA, and We our Pasquale's goal to this adjusted our calculate I'd trajectory, release profitability. EBITDA. we non-GAAP path with better associated in loss the today interest, adjusted take and metric non-GAAP depreciation. our expand net back added press taxes to regarding like reconciliation add income and of illustrating To this also comments on

year-on-year business Using two-thirds adjusted to was of QX year. to is cut this Thanks QX low. a approximately look this component metric, loss by further of We The a our million this improvement loss depreciation EBITDA of by $XX model. non-GAAP XX%.

$XXX we with quarter million, cash, the at $XXX quarter. from last finished million down Looking

our have in been In raw QX, finished meaningfully inventory As forced level, loss. on a the issues prior also and as table we in progress, materials recent solidly operating quarters. quarters, goods primary our negative to on driver we to leaving is us increasing the flow do which helped cash business move in inventory managed avoid from free supply of break or chain and WIP work our of number to

and QX us helped look the will up we sets forward, grow will QX for as Inventory it and for in we vary but business. build QX. well expect us with This

We $XX used in the likely cash program. our ATM million adding QX, very in through

will of We on a the also quarter-by-quarter options. continued assess liquidity evaluate to non-dilutive and use basis ATM

on with three consistent QX the a past close key million other couple stock-based To $XX figures, compensation was of in quarters.

cycle annual compensation Our includes equity.

approximately step-up QX April three for We XX, to as to the XXXX. be shares XXX constant our expect So approximately ensuing fairly stock-based had be and we annual compensation quarters. $X of and in million million outstanding

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

being in being flow of QX XXXX to by cash remain Venezuela. positive We to positive are committed calendar adjusted committed EBITDA and

In expected growth we summary, achieved to achieve significant headwinds. we've the despite

scale. even our operational invest in while at to continue We excellence march we profitability

be our Our confidence business EBITDA CapEx adjusted trajectory. we business consider to our health indicator strong gives differentiated overall our and not the metric, of intensive us of model in is which a

operator I'll to the turn call the that questions. back With for

Instructions] [Operator Daoud question our you. Gabe with Cowen. We'll Thank from first take

embedded remarks, color internal remarks we kind maybe if the that progressed give forecast. comment a snaps I you your commercial what's earlier and year about I we appreciate missed all in could you and how curious the just wanted residential, Hey, bit be through may the that thanks on guys, noted, more rest in prepared maybe on own your as guys just hit this of of prepared some to the Pasquale. back just of

employees or all converting uncertainty. It's fossil very to Businesses a pressure electric hi, adjust customers discretionary simple vehicle. fuel market have beauty from we to So, deal is base keep Actually, their the can for the because utilization this businesses, timing a charging answer. macroeconomic installed their the with the of commercial there need right keep for businesses EVs -- now, that Gabe. sits

point as the earnings we in doesn't on to went optionality previous but in I'll the that addressing So need need that away, our What commercial commented you though to pandemic. calls we've the of go exists. customers delay something through is some

areas other vertical we've of the business went during abrupt pandemic pretty shifted and our business verticals the other from by situation in an meaningfully picked the we across up into placed mix geos, and because work broadly business places the The been home Slack. because in

deal financially. didn't with discontinuity we to So massive have the

You're that play here again. think I out seeing

I turned growth basis, still year to in QX So very we think quarter-to-quarter on aggressive this QX last year. a

healthy geo-diversity up business balloon It's exerts that especially XXX% evidenced as QX XX% of step-up the enough a the It's pressure its the were fleet similar QX. strong now is performing that verticals on and year-over-year to the just water given up percentage Europe that take the in to diverse Slack. different and macroeconomic

perished, the where away clears in that that demand up, it's get not hope answered we're So it a situation the back as has macroeconomic and think we it. position gone we'll

where fairly maybe a medium as you Is us last what's just I'll fleet mile fleet Yeah, within vehicle versus seeing vehicle a more curious in how you side maybe on also it just heavy is just shift momentum But there that's give Maybe and and it it great Europe can momentum growth you given Pasquale. Could and follow-up ask bit the strong the that -- price is guys. still just then on exactly billings duty? guess mix more we're just and or in about US? I in reported is color. particular. the and I fleet? are on it the strong that Thanks really color Thanks, you logistics? driving on similar? the guess say Or light-duty just Is momentum constrained fleet, what the demand

with backwards pretty It's go Europe between North to question. America fleets. easier balanced follow-up and It's your

if it's producing fuel match right you'd OEMs demand, As my limited now, electric. conversion remarks, prepared were penetration I and from faster quantities see in said in to vehicles to fossil vehicle

macro components softer previous calls, a expand customer. I've as these cost what the within -- it's consistently with way aligned slanted well businesses to slanted for obviously much that they but it's serve actually looking done the It's and vehicles not that meaningful mentioned these and of is that's a in cost by everyone's land, are structures are in the of savings meaningful

good it's that's, that dependency to things things think, just the on I a a producing When so come And future. complicated, of uncoil, starts a for given vehicle is OEMs indicator bit to at there that in scale. there

mentioned One of regarding the that's most I that before spots bright fleet the transit mature is segment. because

so we quarters, no that well, shift to worth reporting. but that's the worth do continue -- general segment there And between mix see been has that's quite in materially

Okay.

Okay, great. I'll rest That's helpful. take Thanks, guys. offline. the

We'll take next question Oppenheimer. from our Rusch with Colin

dynamics with conversations having kind talk property volume much like rates detail upgrading what's rental as on us cycle, and Can so they in you looking around cost-to-capital a the Thanks the US through and when market? guys. With more amenities? sales the you bit of looks commercial folks deployments? with Can of at give it happening a work little you're about changes, owners bit commercial

conversation past. conversations dealing been to with changed. dealing bag of are a the landlord? above now the be in you combination? property So any you with Are tenant? situational. in is commercial the is of that mixed it manager? the the not you The Are And all Colin, with hasn't it's than different Are you really dealing dealing tend with the

developers You their an right property portfolio more -- keen more take now kind broadly property by driven activities. in in tenant hotspots interest as and charging seeing tenant amenity versus are of a more in managers

certainly as back and in we're all back we're seen -- a statistics we many is moving larger moving in general, think, have not But -- that returned office the been I the we reported, situation to you've way. haven't of dominant there But component are to because snapped to in-office.

charging So effectively people in that's so basically to biggest in buildings. the the to continue move shift lot proportionately component aren't is the driving workplace will probably component to office the if parking down office, at utilization commercial

going in. goes that in to office. mean proportional in doesn't charging are the there the days It number of isn't It just folks

if synchronized. three of We will go in lot you go -- the days also it remind you the three same on not five, days generates in amount you utilization these parking is if are it's or pressure if in they

of going the it well, So and macro think there. things there's and puts up. in gets that other the this it as I goes a continues of a lot are -- takes And by on lot -- complexity as confused gets

and So we've managing we're it got good closely. visibility it into

Excellent. I've That's other super got two helpful. things.

that the these of business there chargers, how guys very to the for closely and are -- the may an changing it's the of opportunity Just is efforts that some and that tracking then looking of be near-term? for update desperate, some level, there give state consolidate could also you potential these not that non-filling at be a meaningful little streamlining just you a could you're level anything network even us bit for on if national at sense going or and in permitting Europe whether US a

one take backwards. It is to easier that

look management most the to and lot either chargers, charger usually some almost revenue programs, that non-network dependent, includes a of to port of I the benefits of a programs some anyway of managed for primarily subsidy can to energy but reporting, of, our some be at a of not connected requirements for meet lot I think level grid. consolidation but set all If have some the of mean, basic there's at is network requirement give you subsidy

it's to by in chargers infrastructure there, of with most and what don't replaced to if chargers. of chargers should easier about likely up them processing tear a will gear, is that they the the think lot way out because leading out, just necessary managed the is the are communication electrical have work So unmanaged you laying there get the the

a growth that's change expect so is That's not quickly, only yet as something that as replacement see the swamps scaling So but would time. cost-effective a that things over swap market very it, out cycle, of those we I significant the because would sort out.

things respect prepared a want With the point just to of to remarks. I couple in to you permitting,

the they've and only and look total they've you on of means gone that full If at installation, also through gone not our in activated management but activation. software under network terms through ports

customers DC the use sort and decided read to ports want we was all how but from And uniformly of they went means XXX,XXX QX, that can ports That to between pretty XXX,XXX it you stuff. the remarks, in spread AC. and that

built last is numbers in representative instantaneous which is at through and gone of months is of previous we sold activation process we the that pipeline because an have ports construction the time. that the process installation into the already not our That's some sold thing or of ports in representative that set quarter. interesting is the that not months What's and

port of So print you're delays growth this seeing -- rate shadow in the the the permitting through.

big our Now, the for lot fast-charging big a fleet Yeah, customers. to delays programs. right, corridor the the programs, continue see big be stuff, a permitting for we challenge transit of

again add for customers, in customers' for some would been a or utility we absolutely has applaud necessary will But interconnect to accelerate change that will accelerate, help the streamlining infrastructure. it any ability certainly permit to a our challenge the because of streamlining while, it

numbers, from numbers. they're into faster, So guide, it built our it's us. are can into built make you're into They're headline built into delays hearing our If everything built upside. go our we that

our take James [Operator ISI. Instructions] West question We'll Evercore with from next

days that be -- the the expected? what's to on there? thoughts Or Tesla Wanted the I two what Is it take it Ford, it mean and that? the Hey, around your is were of ask nothingburger? the out that? of us showing superchargers something and there's is your What's a of a to good announcement about sort afternoon Rex. couple network alignment, ago, guys. supercharger opening Hey, Pat. out Thanks, their

one So asked you could have have I that bet question. if would of

would So right still an installed and has the they the mind time base around the player, in been are since crystallize in the that, I terms that United been way shortest network now of it share in is causing sitting it charger reason lots Supercharger to market on of vehicles our a has think they're your the verticals, we're dominant for to buy all in and effectively the pressure Tesla's want the to that's our outsized States because Tesla there, up in XX%-ish car parking if have around beginning customers and now, utilization road, that generating the who and across customers to are ChargePoint buy products our revenue in weren't the across services. vertical, no

the that is ships with of into the impair because Tesla net-net on numbers, in adapter it's AC So since whatever it Supercharger with built said, chargers, the beginning it's easy, having time, AC our network effect our chargers fast an Now side, okay? is anything. particular, the doesn't

that's no there. So literally -- there's a impact

the on On side, AC cables I holsters. mean the DC chargers our modular side, and have modular

if obviously So us particular not be extra time of need very possible use direct using cable about to have versus ability element Tesla around to innovative ways able thinking the is address a an to people get spending we're for the to charger now and arises, increase adapter cases those to problems. expensive a what on today, use some in to cable the like is add ability

us stay at a bad So all. don't wouldn't there as for be it I pretty we'll long-term but tuned, -- thing read innovative I

Got it.

thanks. Okay,

question our from next America. Reid We'll with of Morgan take Bank

done and drivers my on the question growth taking nicely in everyone. in Thanks Europe. fleet Hi, for

how year. Just rest think you through strength elaborate that if should maybe on about the of curious the can we

here through segments, growth after year quarter. to those are how scale Just expected wanting understand to the in two here in first the nice some particular,

optimization to structure no and competitive for continue there's for in be cost I a are to customers reasons. that is fleets, the It's hard our then electrification. electrifying would fleets are fleet long-term, cycle. for long-term in the learning long discretion There in strong, these curve business expect and most drops and

to be it long-term. in So have their to to the start today not they an need business impediment

ahead that expect be basis. go-forward regardless very US environment of a to we So Europe currently macroeconomic is in of the on EV the adoption. segment strong

to be see continue Europe correspondingly drive, supporting to electric is a fuels now more in consistent mandate from the long-term, -- policy all between the drive we There it of to any don't Europe. the strong. electric expect US major We fossil across from and difference transition to

have not-too-distant shift structures internationally will to over favorably OEMs chains to the Remember cost operate supply EVs and future. and

I inevitable it's for for you'll mentioned a I that markets, continue to think company. strong be think very the see I all is So an but conversion both reasons Europe conclusion currently, rate in to going the

sub-vertical that sub-geo expect would I should growth we see we from strong would or say. that So

also, the about of later Great. then you just OpEx you all scaling inflection the about Thank about a talked positive leverage this through you. we And how And year? think can talk discipline operating should year. towards kind

very kind Just the help the line. continue curious as pieces again if moving you look OpEx you there topline can to scaling disciplined a of quantify still

Yeah.

quarters short number the stay next So year, of that a answer of we the obviously to going number and in of consistent QX the is close some staying it. rest out last three we be to gates like to this we'd the for there'll very year, were variations and close -- of have each

I we're So pretty within try tight operate to going a range. think to

take the offline. Great. rest I'll Thanks.

you. Thank

Morgan. Thanks,

Davidson. next Matt with D.A. from our take Summerville question We'll

Thanks.

levers how And question of we through function to bps 'XX? play of the of sequentially, here year? similar a as on gross something move we we XXX quarter-on-quarter to just a gross sit balance kind Should bit your step margin improvement up main margins are that we should more what the kind the that? improvement conservative for out expect fiscal First, a to as expect

Yeah.

a discussed is confident in of going be to place for goes it's today. don't it quarter-on-quarter, we QX vehicle or peg 'XX be is up I anyone but So two up, would I'm the than electric I whatever, numbers should it we parking better a we've before, say continued a the that our that number, want these towards is point it to seeing, but we I the we think or think, as go said, expect to mix-dependent, to be improvements. here don't might we're that to very going year, end towards head whether

to So decline year. to expect continue this it

And between say then EBITDA going the the $XX now the comment made your fourth you of compared with and Rex loss you or say entirety actual you. $XX the the scale Thank Is are bridge million in to that revenue of expecting? roughly are from by thereabouts? million Are any thinking and that cost remarks. just from so expense there cut you're respect towards to quarter, Or contemplated two-thirds there? growth cuts

It's revenue the years you grow than to above. actually QX. we what QX, QX would with of in all done Clearly, consistent you up the do, start line, and a hope is because lot QX which better we've end prior in in

that So clearly helps.

We flattish expect are helps during territory, keep disciplined margin and you math if to we OpEx lot. definitely can improve make the on a that then pretty the And in quickly. that year gross work

We'll Delaney take from our with Goldman next Sachs. Mark question

I in question. understand hoping better the of for and of and much thanks to guess the was I good first. my taking chain afternoon, to gross stick impact some terms dynamics, theme margin very supply Yes, P&L the

margin, back terms Thanks. a in shipment chain, supply for broadly You year? recent hitting more then something supply talking your I guys points terms that of in chain, headwind, about balance And stand at most how hold And impact. you of the much around, XXX of as the think this basis could one speak you of of where progressing? do was like to the how see point, you chain if think quarter does target that have been you headwind it of gross a supply

Mark. Yeah, thanks for question, the

probably quarter. is take up quarter to chain did a start, the two couple can impacted had that five that then been another us. have and to about, and last charges. year we've So write-offs per logistics We points that PPV/supply impact There closer we it it's six talking we of

six just no want frame perspective. to specifically, or closer are the supply supply from a chain, gotten So it's much, that really much there, percentage that has points that question to better five I

glad and I through was snapped really quarter we to So this see.

think in to on love I'd in actually and business of because table I prior inventory, said I some jeez whack. to calls prior had quarters out build we've right, lead backlog the

nice a to back we're So rhythm now.

think can gets as there sitting to that from you are now prior inventory. imagine, that's deals that supplied we perspective a cut there, build had in I some

a see We the I XXX% perspective, back through won't overnight. to and normal, an existing is you operational work say So much of but through, logistics have from obviously thing. are chain would inventory sell disappear supply a to pretty that which impact that real-time

However don't. to chain a also place. you the then thing And supply back really good

any once work higher existing So hitting be previously inventory that had our will prices stride. we those through

we fair think it's So but past of well to I worst that say are the it.

you. Thank

next Gengaro Our Stifel. question comes with from Stephen

NEVI kind the where as your as Good what far afternoon, me, to to get and for customers trying on I process insights funding? kind are processes gentlemen. thing in secure where of stand of wanted One your on into your also, thought we read funding, timing, but have do you

Stephen. Sure,

right over shortly, we're working effectively facts to comments where I've where not half the work back road something general, their we the a while the a that within requirements, across positionally base the board our with and amenity requirements having NEVI, as that hard give States as and aligned some trip. customers customer due has on do, states NEVI there giving in NEVI they to just program location are So that past that do where applications want are in structure, they around live on to you exactly within proposals with well are programs the little four are United well made would changed the applications are have position a driver

NEVI from the generally multiple different our in applications sets responses orchestrating things, the program, we folks two that's by as we're and customer to those base, we how combining approach provider So it. the sometimes way, with are technology of

meet sites and trying state's to So our customer together customer as this of optimal into us base by looking orchestrate think or base potential of the put set to to requirements trying that.

Okay, great, that's helpful.

of you more of an of time? realization will just it a you Or point expect over think like funds kind are when flowing? would a smooth, be the So revenues kind inflection those do smooth,

what whoosh Yeah, no so to industry. bang I this referred Stephen, all an as is

just about said and think whoosh I It's you there, all If right? bang. what no

stuff, NEVI into to starting So right? you this start we timing XXXX all of the get as will of while see build to momentum,

programs market It's let not and are going you -- doesn't a sharp be implemented, going like going is just to and to going -- state build that to implemented. something doesn't along state programs suddenly to programs let it's are build where programs go you just this vertical you discontinuity state how how on there's just state

VW at Just Appendix that program in to look bigger revenue and the a in magnitude similar doesn't would contributed over D to smoothly have way impact. and we programs you our let NEVI contributed to it expect increasing it that a

So consistent expect discontinuity and moon and the The stars align that future. sun there and happen I could the just in with the not could out some wouldn't history.

We'll JPMorgan. with Peterson Bill take our next question from

good Yeah, to nice gross and hi, see margin the afternoon improvement.

to the in strength and vantage I I we're are are to way like in your for some to to some this guess the continue, this Europe point saw the ceiling. starting debt commercial current Or still in and make Just quarter, are of from Is people, mean the are I sounds start does continued residential. on guess some I slowdown Is trends terms other What unlock first right guidance past point? in it? unlock? fleet, commercial areas of think it still waiting at it of just kind what the residential sure clarify saying to but quarter, to that that or discretionary about guess, the there you're and in -- like when want relative you

thanks for Yes, question. Bill, the

fast EVs did parameters around that's of are look But to is OEMs which hard point, like is sale move the QX, So right? residential all, of from of how deliver hands their into up to of a eye consumers but it forward to one does gauge, cars, function on put ability the we OEMs to the and an on in your great. a looking catching not First that. keep

a isn't imperative it's have although an construction a Commercial lot to is in. to the This this other got work, mostly nice to is back put tied of areas where to you've and there's infrastructure anymore. just new because

happier So and commercial it's -- as less constrained. the sector

sector be think coming goodness in our they existing our business. both customers in I down back. of Obviously, back the to keep commercial benefit will -- that the for because Thank

existing nice a what looking are in our we're they for So QX. revenue underpinning very at and very,

but would then of bigger harder would it predict fleets, you the front middle end, then to funny it's than per it's in and you you the terms -- customer. fleets, back fleet, on expect. didn't smaller And be the And end, tends expect it's mention a to on little than because

with stuff could that or [indiscernible] stuff see. wildly is but that inconsistent to blend of a So a QX we we've just QX. don't going that meaningfully seen the be be the little know it's I in

Yes.

Okay. question. to second my Thanks. leading That's a good

parameters you good given flattish. keep gross So expansion you've some some do guess, that expect margin, of kind OpEx any I for

has about the good nearly into on to two-thirds quarter. the we the that's year. US EV XX% holistically, third-party IHS really I in improvement forecast, guess, So think this back if growth fourth But

it growth above Europe calendar XX% in think I has for EV year. the

year-on-year in be growth think there network but quarter in any to back is reason charging that kind XX%, the your Your at kind year the current systems, of growth, systems wouldn't of range? half that XX% of least

we I adjusted pretty haven't think made prepared put in two-thirds. percentage the about then is strong half, wouldn't in I in wouldn't you can saying shape -- approximately percentage looking I obviously I very frankly and second one So the forward what look comment the my remarks, tells thinking bad a we're and to that by it half, our think we've thought to that, I a to that years we're the the right? terms. EBITDA year terms, but I exactly a express would two at and of done we loss second cut ability those which say Well, have going It frankly, row. do we're in last

We'll Piper take Sandler. question next our Potter from Alex with

where know uptime satisfaction, reliability. I a the Perfect. be. past want those done on I for question, Thanks. metrics you've them to a guess, you maybe big customer the in had I would weren't company, focus

in also but the into impact Just in would be that possible maybe both, addressing growth extent P&L knowing guess, of to terms inning also and Thanks. I qualitatively, interested translate what in, you're useful to interesting. that,

that answer the to question. angles A lot of on

our all, warranty for the we're programs. the labor of and for systems of those since uptime. We've speak charging a parts We've the proud other packages different programs of First I company. purchase very can't reliability manufacturers, and variety had but of the of beginning customers encouraged to

that We high before. as rate those commented programs, have of attach very a on we've

connected effectively. to are network chargers our our All

something a from their general failures a of but mine the They're mobile and cannot us catastrophic uptime have good a said, in we will a network doubling are in And tell harder we have are little that hygiene. have boy, state down on are a app as hygiene visibility or the now and in that good we to when a on whether drivers mechanical spot, network coal perspective. is we few they chargers with not. pocket broken. even There network failure canary nice So

because parts very very, We day business inventory. were had There no hand-to-mouth around true quickly, delay because some pandemic. we not can were was there -- in the was are -- on most obviously, of inventory we and we next spare turn during impacted now cases. relief, we very, That

entire cycle industry that So has in repair that terms I the delay, think now. hurt subsided of

revamped fleet. support, support driver operations board, completely in have We the especially support, our station-owner across

et self-maintainers, for We spares, labor have a lot in stocking warranty, of of new cetera. of parts programs and forward fleet training

we're handle rotation. remarks, get think we to you've confident. good to it over it We're So shape closely. prepared not to is a big as multiple And my seen in quite to in watch our We're that. to going is, times it going respect ability now, with continue actually

to Rex that expense we've earlier areas operating what question took area focus and a any earnings And was several is with calls, changes. over expense focus There respect lived operating respect cetera. et are on is envelope operating what our operations, flattish a for a efforts reliability, expense, inside but not support have inside with expense to we flattish last and operating consistently we the said living that

moving we perspective, looked construction point can and the a of biggest view now. because emphasis we be not right products are commented -- So Is differentiator that of at is our reliable, believe has hardware from also inward. previously that, we've from you it a to the software are only have

a also incredibly features the so be but rate support that parts repair to our easy forward uptime they're subcomponents infrastructure support that designed need So be rapid stocking and to can we be they're will spare so effectively that designed all repaired at of, an think build able are we be can very support the of to out of there the our to number customers. minimum to cycle for most great, also to it requirements all charging of meet of

huge on side. huge. investment So Absolutely our

comes from Shreyas Wolfe Patil Research. next question Our with

question. so taking for thanks my Hey, much

fast You mix. guys verticals talked to have the diversity due fleet a there talked anything more charger relates little a consider think charging that DC I in margin to there as being revenue. your is the about Is workplace you've the about it to from amongst past, weaker how higher in your perspective? was strongest, business

we how that. Just should about curious think

Yes.

but And It single-family opposed a to as to be home, that. product-specific more -- is actually it's has about So home single-family tends that We've right? margin. talked healthy, not but so specific fleet and products we've are some Strongest to power strong some our operations. that made recently and the of as AC upgraded improvements. which as we higher margins other commercial into put products, AC long-standing vertical

on or that get of where margin effort from lot certain to very call you've brand than portfolio, modular do. that a Plus, we put at the -- is in ultimately getting robust model really our DC and which because what behind lower can better. better we you those a progress new good and you And actually so fit is -- to are commercial and number fleet. launched getting applications We which the then and expect obviously, AC Express a a But margins had everything good are goes, architecture be products

commercial wouldn't product major vertical, products of our because all our it's I by of So products both say verticals, go it's into fleet. the by -- and

that a you. hope more I from helps so it But product it's perspective. So of think --

Morningstar. take We'll question next Brett Castelli our with from

you. hi, Yeah, thank

new AC the up on you rollout the legacy? you. mentioned that you product the then that the versus just also, Just product any Rex, can previous touch talk you're the of of actually I following think, sort legacy between of on Can question. that CPXXXX, new side. differences and mix margin product today? new seeing the you on kind Thank the between more about And

to itself, for particular. Rex the and in I'll question space address so can the talk about speak, that carved is out margin

that product. over per products, not applications, it's and lot out to for but in Xk necessary brought obviously high-end that things has We scenarios. lower-cost also, a medium-duration can provide the it's parking as it brought the needed, and most it time down Xk the flagship We out series. port more a currently where replace of roll power It is into not

product. So is across every verticals that has to vertical, applicable the it that make Xk other the because it have not to it superior single features it applicable other to are necessarily may features although board

into for Xk situation will commercial it product, a products the if I getting or some an Xk fleet AC is with typically is what vertical goes detail the more say fleet light Without it too using so much because is on the in have segment, that that. do not we specific, mix are use commercial, typically the using light scenarios more although lightweight it's

fleet, some uptick the product in the And in there's particular, correlation primary in there. is use we the So Europe. Xk

-- commentary that I So the should in from the I we that primary product, say, use AC Europe. made

dependent fleet they the Europe let to more corresponding the dependent. Rex, those the Xk, the you So I'll Europe are take pulls comments one that Xk margin the The right? other, in I and are made fleet strength question. than Xk and the business regard and strength

Yes.

we've actually portfolio evolving in product build the is yet et had the America Europe. from in legal nice may certifiable So because don't side, next-gen perspective, of said, be now that third-party both margins the we to process. is it's obviously, similar able there cetera, that Xk. and preserve features, but It we anymore to positive leverage we're has higher AC all in not do Pat works Europe, way Xk, America It's local product as the hardware, the a And as product because and to have recall, in product, requirements, on in and you to a better helping the Xk margin a way. the to and performance, and that North North margin on premium it's then what's a us to

a improvement nice that's been So margin from in us perspective for Europe. a

Our comes Citi. Michaeli with Itay question from next

Great. Thanks. Good afternoon.

two ones Just for quick me.

And build commercial maybe you maximize to utilization comment customer customers. could roughly Rex, year? the hoping of the per particularly among we know what is charges, at capital seeing on but of you're curious a I working se, utilization And your level about every maybe I of should terms just First, rest in there? inventory how think what second, QX, looking in high for you're seeing was on not the

the very the first, different second. take take Two questions. Rex, you I'll

In of It's standard a utilization obviously terms in our sales is customers. sees reporting -- team our network. data utilization, to as our feature

-- subvertical, site. it's the context because is the during measured be the comment meaningful hours you the of have because in network utilization in that measured as be to hard has differently utilization whole give utilization hours. the the to it's measured operation And and of a at any in so I'll on

the example is you to give stadium. easiest a And

a stadiums then utilization have stadium We an have basis there's The is event on they're at and only that XXX% stadium lot active on XX-hour, a XXX-day over booked. of year unless event horrible utilization Measured there's basis, customers. a when a stadium. an

that goes to the very very, rebuy the across all at see you proxy And made board. it So down that, rates. in we've for it. look the the about best measure if how to comments strong past you utilization And is want

the the in be. more expansion. them revenue that's to out you and as because And it with think answer start customers that drive experimentation, buy see some Rex rebuy rate in smaller to because questions, buys segment one mentioned the his it's And initial an the the within are of let tends majority discretionary. than than they a be expect and bigger utilization where you to the the The is the be commercial follow-on quarter should of then especially

is the strong, on so for, is rate is rebuy can the it Is it's growing? because use utilization it the the network? best So strong proxy and you guys

items Yes, went question. we inventory the and up No that's in from being lead on a a long obsolescence have actually because to not million. almost kick on capital and In QX, a these truth, of very $XX and to time question our of curse inventory lot low in popped stuff able materials and products. things working a quickly risk up get lot we raw bills some blessing

having and blend we can a have through quarters of pretty back-end therefore, we loaded getting that most like So finished to and inventory good companies. that move goods

end And the so really a quarter knowing need that the meet is at you to can ship, to of what demand ship good thing. you

will inventory the down think a revenue. I So come on meaningfully basis percentage relative to

QX, the bigger coming the to the those needed relative we down chain because If grows. of out of will it the generally, that then bring that, inventory working in at And to in you like the reasons we're question size is help supply company, as capital the be look company than issue. but

this improve will And actually so think the later definitely I of part picture that, that year.

our take Guggenheim with question Partners. We'll Joseph from next Osha

about little Thanks. a your ambition business? Fleets about might I of thanks. that talked We and bit how I'm earlier. just given the the Hi, your NEVI CARB are begin wondering, one thoughts to have the Clean timetable into what question. rule, Advanced layer

fleet the business. in I mean you saw strength the

one innovation in to of And so -- policy with United the also is the the and and interesting. usually fleet leads incentives. respect obviously way business States California is

United perspective, it's we're fleet just and in a that's pervasive necessarily and Europe seeing your across structure California. electrify cost fleet hotspoted just from for pretty business because But a not the good States to business

And it very line with in to like build. any tends on is the it comments this once, and all you at hit program, doesn't NEVI,

it it need because for that's and the just It have vehicles contribute And demand to move. expect will remember, variable I electrification you be but infrastructure it to So don't there. contribute. can't will the drive, again, it will charging over the time biggest able drive vehicle to

doesn't mean in can follow but order. necessarily the incentive going it are to there, structure You have perfect that the vehicles

disconnect. your and Thank now participation, We you, This presentation. appreciate everyone. may today's concludes you