Hello, everyone, and welcome to EVgo's Third Quarter 2022 Earnings Call. My name is Heather Davis, and I am the new Head of Investor Relations at EVgo. Joining me on today's call are Cathy Zoi, EVgo's CEO; and Olga Shevorenkova, the company's Chief Financial Officer. Today, we will be discussing EVgo's financial results for the third quarter of 2022, followed by a Q&A session. Today's call is being webcast and can be accessed from the Investors section of our website at investors.evgo.com. The call will be archived and available there, along with the company's earnings release and investor presentation after the conclusion of this call. During the call, management will be making forward-looking statements that are subject to risks and uncertainties, including expectations about future performance. Factors that could cause actual results to differ materially from our expectations are detailed in our SEC filings, including the Risk Factors section of our most recent Annual Report on Form 10-K and in the quarterly report on Form 10-Q that we will be filing soon and which will be available on the Investors section of our website. These forward-looking statements apply as of today, and we undertake no obligation to update these statements after the call. Also, please note that we will be referring to certain non-GAAP financial measures on this call. Information about these non-GAAP financial measures, including a reconciliation to the corresponding GAAP measures, can be found in the earnings materials available on the Investors section of our website. With that, I'll turn the call over to Cathy Zoi, EVgo's CEO.

Good afternoon, everyone, and thank you for joining today. Before I begin with an update on the quarter, I'd like to take a moment to recognize a few new additions to our team at EVgo. First, I'm pleased to welcome Heather Davis, our new Head of Investor Relations, who kicked off our call today. Heather brings more than 20 years of Investor Relations and corporate finance experience. I know you all will enjoy getting to work with her. Second, we recently hired a new Chief Revenue Officer, Tanvi Chaturvedi, who joins us from Google. Tanvi will focus on turbocharging our retail revenue growth by transforming the fast-charging user experience. As CRO, Tanvi will lead our go-to-market functions, including all consumer revenue growth initiatives, marketing, advertising, and expansion and use of the PlugShare app. Prior to joining EVgo, Tanvi held numerous leadership positions at Google, most recently responsible for delivering growth and monetization of the Google Nest Smart Home Product Portfolio and Services business. Previously, she also held leadership positions at Procter & Gamble's Consumer businesses and served as a technology investment banker at J.P. Morgan. Now, turning to the quarter; EVgo experienced a solid quarter as we continued to harness our technology-driven approach to lead the ultrafast EV charging marketplace. On today's call, I'll focus on a few themes from the quarter that we see as key drivers of growth. One, the strength of our operational foundation; two, our strong commercial progress as we make headway with existing and new partners; three, our commitment to technology as a source of advancement and innovation; and lastly, some important updates across the regulatory front, which we expect will drive substantial investment in the EV charging space in 2023 and beyond. Today, nearly 140 million Americans live within 10 miles of an EVgo charger, which is a testament to the foundation of operational excellence we established in order to now accelerate our growth. Our footprint continues to grow across the country, and we're excited to see accelerating momentum as more and more Americans adopt EVs. In fact, we recently announced that we have surpassed 500,000 customer accounts on our platform. The third quarter of 2022 saw a record number of EVs sold in the U.S. with more than 210,000 new fully electric vehicles purchased during the three months, according to EV-Volumes. The market share for EVs continues to increase every quarter, and we expect these trends to only accelerate as we head into 2023. Reuters recently calculated that the world's top automakers are planning to spend nearly $1.2 trillion through 2030 to develop and produce EVs. This is a twofold increase over the estimates that they had projected just a year earlier. The market is coming, and EVgo is at the forefront. A major component of this effort is the work we are doing on the commercial side of the business as we continue to build out our partnerships across all aspects of the ecosystem. On the fleet side, we signed a new behind-the-fence deal with MHX Solutions, which is a full-service logistics operation based in California and our first EVgo Optima deployment for a Class 8 truck fleet. This comes on the heels of the agreement we signed with a major investor-owned utility last quarter. Additionally, EVgo signed a new agreement for a dedicated fast charging hub with an existing autonomous vehicle fleet partner as well as an agreement with a different AV fleet partner to repurpose a former dedicated site to meet its own growing needs. We're really excited about the progress in our fleet business, which we believe is driven in large part by our technology advantage and more on that in a few moments. Building on the momentum created in July, with the announcement of the EVgo eXtend deal with the pilot company, we are pleased to report that pre-engineering work has already begun at certain Pilot Flying J sites. We also received our first eXtend Workplace purchase orders to deploy and manage L2 and some DC fast charging stalls for General Motors employees at four different company facilities. This highlights EVgo's ability to partner with large commercial organizations for Workplace solutions. As we've shared previously, we are open to both owning sites or managing them on behalf of others, and in many cases, it's better for us and our partners for them to own the chargers. In this case, GM is able to provide a unique benefit for its employees, relying on EVgo to install and operate the chargers. The key to winning the land grab for charging infrastructure is site control, where we secured multiple new agreements with national brand names, which will provide EVgo with access to high-quality properties in prime locations across the U.S., among these is our agreement with Home Improvement powerhouse Lowe's. Additionally, we expanded our existing site footprint at several large grocery chains, including Kroger, Safeway, and WinCo. We also energized the first of many sites in development at Target, which are now available on the EVgo app and PlugShare. The addition of new national retail site host partners in the home improvement, grocery, and restaurant sectors, complemented by deepening engagements with a number of our existing portfolio partners has significantly increased EVgo's pipeline for station locations at every corner of the U.S. In fact, when we overlay specific store locations of these well-known brands with EVgo's own proprietary network planning tool that accounts for the numerous vectors that make charging infrastructure viable, we've added nearly 10,000 potential charging stalls that pass our internal investment hurdles today and could be added to EVgo's development pipeline. This rapidly expanding pipeline of premium station locations with strong unit economics combined with the cost-sharing potential arising from forthcoming federal funding provides EVgo with the opportunity to widely invest capital to expand our footprint to new places. With this in mind, after we file our third quarter 10-Q, EVgo is planning to file a prospective supplement to our recently filed S-3 to facilitate at-the-market sales of up to $200 million of our common stock. We plan to use the proceeds of this ATM program to opportunistically raise additional capital in order to take advantage of this robust and accelerating EV infrastructure sector. Turning to our performance; once again, the theme is about growth and execution. During the quarter, stalls in operation or under construction increased to 2,625. We added a record 188 stalls during this quarter. And year-to-date, we have energized 487 new stalls on our network, 2.4 times more than the same period last year. Additionally, our active engineering and construction development pipeline reached its largest point ever at 4,534 stalls. As a reminder, while we want to invest in growing our network, we also remain laser-focused on overall profitability in the business and building sites that clear our internal rate of return or margin hurdle. The biggest issue we're facing on the installation front right now is timing on the utility side. At the end of the quarter, EVgo had installed over 130 stalls that were still awaiting utility power, with more than 100 of those being delayed more than six weeks. Unfortunately, persistent utility labor shortages and transformer supply chain constraints exacerbate utility work backlogs at the front and back end of the charger development process. We expect utility-related delays will continue to be an issue as power companies gear up for transportation electrification and work to make power systems resilient to the effects of climate change. EVgo will continue to work cooperatively with our utility partners and local governments to address these issues. We believe these challenges can be addressed by working side-by-side. Throughput this quarter was 12.1 gigawatt hours, an increase of 51% over the third quarter of 2021, driven by ongoing EV adoption across the U.S. and increasing rideshare electrification. While the rebound in rideshare electrification was a bit slower than anticipated during the first part of 2022 due to the lack of EVs available to rideshare drivers, both Uber and Lyft have indicated that their electrification plans will be accelerating going forward. Uber recently stated that the company is focused on doubling the number of EVs on the road over the next year from 25,000 to 50,000 as it strives to be fully electric by 2030. Remember, EVgo sees an outsized impact as rideshare drivers convert to EVs given that they drive about three times more than average. On the retail side, we are encouraged by recent developments on the OEM front. Despite the challenges some of our OEM partners have had supplying cars to the market earlier this year, the future looks bright. Cadillac has begun shipping its new LYRIQ model. Chevy Bolt and Bolt EUV sales have recovered following the resolution of their battery recall. And Toyota and Subaru reopened sales with the bZ4X following their recall. We expect to see greater contributions from our preferred partners moving forward, and we continue to see growth in Tesla drivers charging on the EVgo network, which brings me to the topic of technology. Simply put, EVgo is a technology powerhouse. This is our key differentiator and sets us apart. Our investments to create a seamless integration between EVgo's hardware and software aim to create a differentiated experience for our customers as well as high-value margins for our investors and other stakeholders. We often hear from our B2B partners that EVgo has pioneered functionality that no one else has cracked. One example of this is Autocharge+. Launched in September across the country, Autocharge+ sets a new bar for a streamlined EV charging experience by simplifying the process between a charge and a payment session. Once EV drivers self-register through the EVgo app, they can start a charging session at an EVgo station without a credit card, RFID, or even swiping the app on their phone. In the few weeks since we've launched, we've seen enrollment skyrocket and positive feedback from both new and existing drivers taking advantage of this faster and more convenient program. Notably, as Autocharge+ is also available for Teslas, EVgo was looking forward to welcoming even more Tesla drivers to our network. On the fleet side, as I mentioned earlier, our technology here is truly a game changer. EVgo Optima is our homegrown proprietary cloud-based software platform that helps ensure fleet EVs are charged in a manner that optimizes the logistics needs and operating costs. The user-friendly interface provides fleet managers with easy access to the most important data, while integrated customer service provides seamless communication, helping to ensure fleet uptime and service level agreements are met. The early feedback from fleet managers has been extremely positive as EVgo Optima has been built from the ground up as a fleet-centric application, rather than a repurposed adaptation of software meant for retail drivers like that being offered by some of our competitors. On the OEM front, we continue to work with our partners to leverage EVgo Inside APIs, which are designed to seamlessly integrate into an automaker's branded asset. This provides an automaker with the ability to offer its customers a fully integrated EVgo charging experience without switching between apps. We believe we're truly ahead of the market here. And finally, we're really proud of our efforts to lead the EV charging industry forward in terms of global standards and interoperability testing. EVgo is on the Board of CharIN, the leading global association promoting global charging standards with CCS, MCS, and 15118 emerging as a de facto fast charging standard. And our EVgo Innovation Lab is a go-to for OEMs developing new EVs and for manufacturers developing new equipment to charge those EVs. In fact, in addition to a principal EVgo lab location in El Segundo, California, we also have three remote testing locations set up at OEM facilities. This distributed approach enables automakers to test vehicles much earlier in the process, sometimes even before a prototype has been officially released. EVgo retains access to the testing software and remotely manages the process and supports the OEM's design and commercialization process. Turning to slide 8, you'll find a brief update on the National Electric Vehicle Infrastructure Program, or NEVI. In late September, the U.S. government approved all 50 state plans plus Washington D.C. and Puerto Rico, meaning that states are now eligible to start the process to award their fiscal year 2022 and fiscal year 2023 allocated funds. The first round of investment in fiscal year 2022, which totaled $650 million, will help to build EV chargers covering approximately 75,000 miles of highway. We anticipate the first solicitation from the states this quarter or in Q1 2023 with initial funds deployed during the course of the year in 2023, which will be based on state procurement, RFP processes, and finalization of federal minimum standards. Additionally, the tax credit in the Inflation Reduction Act or IRA, and in particular, the changes to U.S. Code 30C represent tailwinds for our industry and our business. We are pleased with these developments and believe they will serve to reduce carbon emissions as the world continues to embrace electric vehicles. That said, we expect it to take some time for the benefits to be recognized in our financial performance as the Treasury Department is conducting requests for information prior to issuing guidance on the specifics of how the 30C tax credit will be applied. Other key provisions in the IRA, including the revisions to the Consumer EV Tax Credit, 30D, the first-ever Used EV Tax Credit, 25E, and the Commercial Vehicle Tax Credit 45W should also support acceleration of EV adoption with some key implementation questions also pending IRS guidance. We believe 30C and the other tax credits in the IRA will benefit EVgo, but we're not expecting to realize those benefits financially in the very near term. As one of the longest running, largest, and most reliable public fast-charging operators in the U.S., EVgo's mission is to expedite mass adoption of electric vehicles for everyone. This quarter in service to that mission, EVgo launched the Connect the Watts National EV Charging Recognition Program. This program will celebrate leaders in the EV charging ecosystem for their achievements in driving the electrification of transportation. By recognizing these leaders, EVgo hopes to bring awareness and inspiration to the community working to electrify our transportation system. And with that, I will turn the call over to Olga to talk more about our financial results.

Thank you. As Cathy mentioned, we experienced a solid quarter with strong momentum on the execution side as we rapidly build out our network. EVgo increased our active engineering and construction store development pipeline by 82% year-over-year, reaching a record 4,534 stores at quarter end. The noticeable increase includes the addition of the stores from the Pilot Flying J deal we announced last quarter. We added 188 new stores to our network during the quarter, and stalls in operation or under construction totaled 2,625 at quarter end. Customer accounts increased by 60% year-over-year and year-over-year throughput growth of 51% continued to exceed year-over-year operational stall growth of 33%. We delivered $10.5 million of revenue in the third quarter, representing an increase of 70% year-over-year. Growth was driven by increases in retail charging revenue, up 62% year-over-year and increased ancillary revenues, including the initiation of pre-engineering work on the PFJ contract and growth in PlugShare and regulatory credit sales. As expected, we experienced a sequential decline in regulatory credit sales following the accelerated monetization efforts in the first half of the year. Regulatory credit sales totaled $1.2 million, a year-over-year increase of 72%, but a substantial sequential quarter-over-quarter decline. This, combined with the seasonal impact of summer rate electricity tariffs and lower LCFS credit prices, contributed to an anticipated decline in adjusted gross margin. The decline of adjusted gross margin from 22.2% in Q3 2021 to 19% in Q3 2022 is caused primarily by lower LCFS prices this year. While EVgo experienced high energy costs in 2022, this was largely offset by improved leverage of network fixed operating costs. As a reminder, our business model has significant built-in leverage that is realized with increased charging volumes. We reported adjusted EBITDA of negative $22.2 million versus negative $14.3 million in Q3 2021, which reflects our investment in the people and infrastructure required to capture the growth in front of us and expand our moat. CapEx was $61.6 million this quarter as we accelerated charger deployments and executed against our long-term strategic plan. As a reminder, all of our charging infrastructure deployment goes through a rigorous underwriting process and pencils to low double-digit pretax unlevered IRRs at the project level. EVgo has been putting public charging stations in operation since 2010. And while that created an unparalleled expertise and track record, it also places ongoing demands on EVgo to ensure we're meeting and exceeding our customer expectations through an appropriate level of investments in maintenance and network upgrades. EVgo is actively expanding its current network maintenance and reliability program, which we call EVgo ReNew. The goal of this program is to both improve charger uptime and to enhance the customer experience in our continued pursuit of EV fast charging leadership. We have upgraded 125 stalls year-to-date and are working with site hosts to evaluate additional stalls in 2023. We are largely focused on our legacy 50 kilowatt chargers, some of which are reaching the expected end of life. We apply a rigorous analytical approach to this program with a focus on upgrading and/or expanding sites in high demand and future growth locations. In some cases, we will seek to upgrade the chargers with high-power models or even expand the site. We may also opt to retire a particular charger, removing that underperforming site from our network. Before we open up the call for Q&A, I would like to share our updated full year 2022 operational and financial guidance. First, we are reconfirming full year 2022 revenue guidance of $48 million to $55 million. This range is driven by the timing of Pilot Flying J equipment deliveries. We're narrowing full year 2022 adjusted EBITDA guidance to negative $85 million to negative $80 million as we've been actualizing the hiring pace throughout the year. We are revising our network throughput guidance for the full year of 2022 to 42 gigawatt to 45 gigawatt hours. This revision is associated with permitting delays on a couple of dedicated stations in the San Francisco Bay Area, EV delivery delays by our OEM partners, and the recovery of rideshare starting later than expected in the year. With respect to stalls, we expect to have a total of 2,800 to 3,100 DC fast charging stalls operational or under construction as of year-end. As Cathy mentioned, the resource challenges at municipalities and utilities across the U.S. have given rise to delays in approving and energizing fast charging stations. Hence, we are adjusting stall guidance to reflect this persistent sector reality. It is important to remember that such delays don't have any material near-term financial impact on EVgo's business. Our existing network has the capacity to accommodate the growing traffic. With this, I will turn the call over to the operator for questions.

We'll take our first question from Gabriel Daoud with Cowen.

Hey, everybody. Good afternoon. Thanks for all the prepared remarks. Olga, I was maybe hoping to just dig into just the guidance a bit more. I understand that there's maybe a decent contribution from Flying J and that's kind of what helps you get to full year. But is there any way to maybe just quantify what the Flying J impact would be this year at all?

Sure. So we the reason why we still give the same guidance in the range of $7 million is that the exact contribution from Pilot Flying J will depend on the timing of hardware units delivered to our warehouse. And we are currently scheduled to take that delivery over the month of December, which has holidays in it. The short answer is that it's going to depend and that's going to drive the difference between the $48 million and $55 million. On an exact Pilot Flying J contribution this year, I would refrain from giving the exact number because that's not the number we report separately. But what I would say that I think would help you is that the vast majority of PFJ revenues will come in Q4. And in Q3, we recognized some of it. It was still small. And I think by doing a simple math, that would probably lead you to the answer, but we will not disclose that exact number.

That’s helpful. I’d like to know more about the trends on the fleet side, Cathy. You mentioned this a lot in your prepared remarks, but could you elaborate on the partnership with MHX? What revenue model did they choose, like charging, service, or customer-owned? Since it's Class 8, I'm guessing they opted for 350. Is there any interest in a megawatt charger? I'm curious about the details of that partnership and what you’re observing in general on the fleet side.

What we're generally seeing is that it's still very early for the fleets to access the vehicles. There is a lot of interest from every fleet we know. They are all considering how to approach last mile and middle mile delivery. This feels more like the first truck rather than the first cab for MHX. The business models differ. As we've mentioned before, we are willing to own the assets or have the customer own them. Currently, fleets seem to prefer owning the chargers, while we provide a service model where we build and operate the chargers for them and offer guarantees upfront.

We'll take our next question from Bill Peterson with J.P. Morgan.

This is Mahima Kakani on for Bill Peterson. To start, can you elaborate on EVgo's current timeline for the replacement or upgrade of older chargers? Approximately like how many chargers would that be and at what pace will they be replaced at? And then, maybe a follow-up, will that impact the rate of new charging installations overall? Thank you.

Hi. Thanks so much for this question. So, we are currently evaluating how many stalls we will be upgrading or replacing or maybe even retiring next year. We are not ready to give the exact number, but it's going to be in the hundreds, and we will update the market as that program is coming along. That program will be focused on our older chargers, our older 50 kilowatt chargers. We want to just also make a remark that not all of our old 50 kilowatt chargers are underperforming; a lot of them are functioning greatly and have no issues, but there is a cohort of really old ones which are near to their expected end of life. And those are the ones which have given us problems. And those are the ones which we are mostly focusing on. But what we also want to say is that our ReNew program and our kind of customer experience or customer enhancement improvement program doesn't just focus on the replacement or retiring of chargers or upgrading the chargers; it also is being focused on improving overall end-to-end customer experience, including the convenience of an app, convenience of notifications, and a variety of different things our cross-functional teams are focusing on. And we would also like to remind a challenge we're experiencing as an industry on its own that we have various equipment on our network, which is charging various car models. So the match — and sometimes the problem is not the hardware, sometimes the problem is not the software, but sometimes the problem is a compatibility issue between innovative first-time new cars on the market, the innovate first-time new chargers on our network and our competitors' network. What really sets EVgo apart is that we have our lab, where we're able to test various equipment in combination with various EVs. And that already has given us quite a lead way and we'll continue to do it and even reinforce next year the importance of overall customer experience, which is being helped, again, by a variety of things: new hardware, upgraded hardware, operational maintenance practices, software convenience, and overall customer experience convenience, and its lab test and allowing for high-class compatibility.

Thanks so much for that color. Maybe if I can sneak in another one. Are you still experiencing inflation on the supply and labor side?

We are still experiencing some of it. We would like to probably say that it has abated in H2 versus H1. We're still seeing some of the labor costs experiencing inflationary pressure, but it's not to the level we observed in the first half of this year. So we're remaining hopeful for next year.

We'll take our next question from David Kelley with Jefferies.

Hi, this is Gavin Kennedy on for David Kelly. Thanks for taking my question. Can you just provide more info on the installation issue that you mentioned in the prepared remarks? How many stalls were affected this quarter? And can you quantify at all the expected increase going forward of stalls affected? And how should we think about labor and transformer constraints generally into 2023?

Yes. Hey Gavin, Cathy here. I think the — when we reached the end of the quarter, we had 130 — just to go back, it takes us — EVgo about 4 to 8 weeks to actually do the construction of a charging station. And as I've said to you guys many times before, at the moment, it's kind of an 18-month all-in end-to-end cycle time from an idea of building a charging station to getting it energized by the utility. We started to see that decline a bit, getting it closer to down to 12 months, but now the long hold is utilities. So the utility work backlog associated with transformer shortages, like when we're building the configurations that we're building now, which is ultrafast 50 kilowatt chargers, more stalls that always require a transformer upgrade. So we are at the mercy of the utilities having those, and we have a couple of utility folks on our Board, and in our Board meeting last week, there was a gush. It is just — it's taking very long lead times to get those transformers these days. So in a nutshell, in summary, I guess, I would say we're thinking that, that may continue to be an issue. What we are doing to help out with that is we are proactively providing our utility partners where we want to build with our own 18-month, 24-month forward-looking plans overlaid with their grid, so we can say, okay, which ones are going to be easy, which ones are going to be harder? Can you guys go ahead and place orders for the transformer now because this is the configuration? And that's been very, very well received where we've been doing that. So we're hopeful that by working side by side, as I said in my remarks, we'll be able to get all of this stuff moving and helping utilities do what they need to do to make sure that they can accommodate all of the growth on the grids.

Got it. Thank you. And then as a follow-up, since announcing your first major partnership with Pilot GM, can you talk about any additional traction your company is seeing with your EVgo eXtend offering specifically? Are you or your customers showing more interest in pivoting towards this asset-light model?

You bet. Look, we are excited to be able to accelerate EV electrification transportation how we can and where we can deliver double-digit returns. Hence, the provision or the creation of the EVgo eXtend business and the launching of our big pilot project was — we're very pleased about that last quarter. We have a number of very active live interested significant conversations happening to do more of that across the board. And as soon as we get those deals inked, we will be so excited to share them with you.

We'll take our next question from Alex Vrabel with Bank of America.

Hey guys. Thanks for having me on the call. Just curious, I mean when you guys think about some of these software issues or initiatives that you're putting through here, I'm thinking specifically on Autocharge+. Can you quantify — I mean, I guess, any sort of financial uplift you see on a customer basis where that customers are coming more often on a more recurring basis? I mean, how do you quantify some of these initiatives into profitability, if that makes sense?

Well, Alex, what I would say about Autocharge+ is that this is primarily about creating a seamless customer experience in charging. Let's make it easy. Let's grow the market more quickly by making it just the life experience of charge. And our — we've been out there for a few weeks with this, and the response we've had so far has been pretty fantastic that people that are both new EV drivers and then existing EV drivers are getting to take advantage of it or saying, oh my gosh, this is fantastic. I just drive up and I plug in because EVgo has my car, and it's just simple. For us, it's about making sure that the drivers have a great experience, and that will, in turn, create more interest in drivers to use the EVgo network. So we haven't quantified it specifically, but we feel like we've got a responsibility to provide a great customer experience, and that will deliver great financial results for us, for our company.

Got it. Now that makes sense. And then I guess just kind of looking forward, I guess, a little bit higher level here. When you think about some of the policy tailwinds that you'll see here, whether 4Q or 1Q when we see some of the solicitations as well as IRA, I mean how do you think about repositioning your footprint, whether that's your counterparties or customers you're aligned with or geographically to best capture those possible credits or funding that are in the pipeline here?

Yeah. So we have — like we have a really cool network planning tool that is ours. And what drives it is where can we deliver — where can we pass our own internal viability for making investments? And what the big giant cost of money coming to the federal government, whether it's grant money through NEVI or whether it's 30C tax credits, are going to enable us to have more locations penciled profitably for us and for our shareholders. So we are literally taking a look at the different grant programs that have been now approved, all 50 of them by the federal government, where do we want to be, where are good EV markets, what are the structures of those programs, and we put that into our own planning tools and then we send our site host team, okay, let's still find some great sites there. So it actually reduces the economics and allows us to extend our footprint profitably more quickly.

We'll take our next question from Andres Sheppard with Cantor Fitzgerald.

Hey guys. Congrats on the quarter. And thanks for taking my question. I am trying to maybe just understand. So revenue guidance is unchanged for the year. And so in order to meet the bottom end of guidance, you'd have to have over $20 million revenue in Q4. So just help me understand like what the thinking around there is? I know usually Q4 is a little bit heavier weighted, but do you still remain confident in achieving that guidance just given where things are currently?

So just to clarify, the big difference between Q4 and Q3 will be the full execution on the PFJ contract full speed. And that will add the revenue. So our core business, we do not expect to double quarter-over-quarter. We do expect a healthy growth, but it will be in line with what you've seen in prior quarters. But the key contributor to the expected Q4 over Q3 growth will be the execution of the Pilot Flying J contract and namely, we're going to be taking the delivery of equipment pieces coming out of our supplier, and that's the moment where they get transferred to our customer. So we do, as of now, we remain confident that we will get those pieces here in the United States. They are on the way. The deliveries are scheduled over the month of December, as I mentioned in my response to Gabe's question. And as of now, we don't have any information that would tell us that that won't happen. So that would give us confidence that we will be able to meet the guidance.

Got it. Thanks Olga. I really appreciate that. And maybe just as a follow-up, I just want to clarify, in regards to NEVI. So, it looks like you're targeting initial funds being deployed in 2023. I am wondering, can you give us — are you able to quantify how many programs or projects you have applied for grant funding so far, or just any more color there would be helpful?

Yeah. Andres, it's just starting. And I guess we have learned by doing the appendix D over the past four years to try to pinpoint timing of state programs and procurement processes is a fool's errand. So we will be applying for NEVI wherever it makes sense with our network planning model and where we can make money. I just — we cannot predict exactly when those funds, when those checks will get cut. And in some cases, the money won't necessarily even be delivered until the stations are energized, right? It depends on the structure of each of the programs. So we will plan on it. But again, in terms of like the cash flows — it's going to be very unclear for a while.

We'll take our next question from Maheep Mandloi with Credit Suisse.

Hi, this is David Benjamin on for Maheep. Thanks for taking our question. I was wondering if you could talk about uptime and how that's tracking in light of recent criticisms on the industry lately, especially considering the high uptime requirements for incentives like NEVI.

Yes. So the uptime, we actually are still tracking to our high 90%s of time that we made commitments to. One of the reasons that we are actually really excited about our EVgo ReNew program, though, is that we can actually — like we rigorously are watching what's happening with our chargers. And when we start to have troubles, we get out there, and we will be replacing chargers that are being particularly problematic on that. So we're quite conscious of making sure that uptime is maximized, and not simply because it's a reporting requirement, but we make money when our chargers are operating. So we have a built-in incentive to ensure that we have the highest uptime possible.

We'll take our next question from Noel Parks with Tuohy Brothers.

Hi, good afternoon.

Hi.

Thanks for all the detail; some really fascinating points. Just as an example for one, you were talking about your planning with utilities and giving them sort of like kind of 18 to 24 month forecast for installations. You can envision overlaying it with the grid and helping to identify easy and difficult points of installation. It sounds like it's sort of a classic help them, help you situation. I just wonder how you look at it as you get experience of different utilities as far as the ones that are pretty responsive doing pretty well and the markets where the utility and charge is pretty sluggish. I just wonder do you weigh that into the balance of whether you're going to sort of try to avoid certain areas or try to get a foot in the door earlier maybe in full areas, just the sooner the better. Just curious how you analyze that.

Yes. Well, it's funny; I had a meeting earlier today on the very topic. I mean, so early is always better because utilities are large organizations, and they have a lot of things that they have to worry about, so you want to give them as much information as early as possible. So we do that everywhere. There are places, however, where you might have two utilities side by side. And if we have discovered that one of the utilities is actually pretty switched on and quite responsive and is a great partner, and a mile away, there's a different utility that's much less responsive. You bet that we will look to be building and working with the one that's more collaborative. It's a practical reality because, frankly, EV drivers are not going to care. What they want is reliability, convenience, right? And the one-mile difference, getting more out there more quickly is absolutely what we want to do. I mean, there is a case example of this where Los Angeles Department of Water and Power is basically the City of L.A., and the Southern California Edison, the big investor-owned utilities, are all around it. And SCE is probably best in class in America in terms of EV charging infrastructure collaborations. And I think our competitors would say the same thing. I mean, they're very, very good and very switched on, and their response to their lead times are much quicker on their planning pre-sophisticated than their fellow municipal colleague at LAWP; it’s just a reality.

Right. Thanks. That makes a lot of sense. And I want to turn towards, you brought up your testing, your testing lab, and I am really interested in the whole topic of reputational issues, reputation of a charger brand, reputation of individual vehicles. So I guess if you could maybe just talk a little bit more extensively about what's involved in the charging effort. It sounds like already at its early stage, it's probably a really big task. And also if you're getting any sense of whether EV buyers' sophistication is getting to the point that they are looking critically at, well, what I am hearing about this vehicle, its built to charge its own EMS software is making me lean towards one vehicle or another? Or are we still just so early just getting your hands on a vehicle is still name of the game?

For your last question, I think it's your hands on the vehicle. I mean, every — what we hear from the OEMs, notwithstanding their own chip shortages and some of the recalls or whatever, every EV that gets made gets sold, right? So — and that's kind of good news. So we're delighted about that. With respect to the EVs and the charging infrastructure, right now, there are 47 different EV models on American roads. EVgo charges all of them. There's also a bunch of different charger types, which EVgo has used and deployed and tests in our lab. Every single one of those EVs has a different bit of battery signature, a different baseline firmware and software underneath it. Our chargers that we deploy have to be able to talk successfully to every single one of them. So we invite the OEMs and all of the vendors to bring their kit to our lab and our labs and, as I mentioned, lab locations, so that we can actually test it, and it's not just about UL certification. It's about continuing to improve user experience to be able to identify if there's a problem, what sort of problem, where is that problem coming from? And look, it's a young sector, but we are all working on our view, EVgo's view, is to work collaboratively with the vendor — with the charger manufacturers and with the OEMs; we are going to create that driver experience over the next couple of years that the drivers deserve, progress, and we're completely and utterly committed to it.

We'll take our next question from Oliver Huang with TPH.

Good afternoon, and thanks for taking my question. I just had one on the cost side of the equation. I think you all highlighted some higher energy costs that may have impacted adjusted gross margins for the quarter. Wondering if you all might be able to expand on the magnitude of impact in Q3, what sort of increases year-over-year, if any, you all are budgeting on this front when thinking about 2023? And if any of this is being passed off to customers and how you all are positioning yourself to mitigate such impact as we move into 2023 and throughput kind of scales from there?

Yes. Thank you for the question. So when we're comparing Q3 2022 to Q3 2021, there are two reasons why we're seeing slightly higher energy cost per kilowatt hours, and we're seeing like a few cents higher. One is that some of the California utilities did increase the energy portion of their tariffs earlier this year. And the second one, because we continue to open new stations in the rest of the U.S. and very often in new geographies where we haven't yet worked — have been successful in working with local utilities to create EV rates, and they still have demand chargers. As I remind, the major utilities in California have demand chargers, and partially, they don't because we were part of the group, which advocated for that not to be the case, as it doesn't make sense for the EV charging use case. But in the rest of the U.S., you still have geographies where they exist, and they're quite high. And so as we are expanding into those geographies, that does affect our energy costs. On 2023, we're actually working right now with my team on a very detailed forecast and trying to understand and break in on the conservative side how that's going to look next year. We will not share that with the market just yet. All the guidance will be issued during the next call, but that's something we're working on and paying attention to. And we haven't passed that on to the consumer just yet this year, but conceptually, this is how we're thinking about it. But when we're thinking about passing it on to the consumer, we're not just thinking about the margin. We're thinking about it holistically, are we still generating the target return or not. And simultaneously, if we have high utilization in certain places, and we expect that in the future, we will be able to cut equipment costs and so on and so forth, that might by itself solve the issue of rising energy costs and we don't have to pass it on to the consumer. But it might not, and that will be the time when we'll pass it on to the consumer. And just a reminder about our pricing, we were not marking up — we were not a gas tank, right, where you have like a one price per gallon, and that changes daily and it generally follows the overall fossil fuel prices. This is not how we're approaching it. We're approaching it a little bit from a consumer side and supply/demand side and there are various consumers with various price sensitivities, and there are various consumers with various appetite for subscription or pay-as-you-go tariffs, which we're addressing and continue to innovate around it. So again, even if we say we're passing on the consumer, it doesn't necessarily mean as a market up $0.02 at every single pump; our pricing scheme is more sophisticated than that, and it's only going to get more sophisticated over time, including per location and time of use pricing. We do have certain levers to pull. Let's say we could make more expensive 6 AM charging and cheaper 8 AM charging. So that's how we're approaching it, just to really give some context about how the pricing is set and what actually it means to pass on to the consumer; it's a little more sophisticated than what it might sound.

Awesome. Thanks for the color.

And that does conclude the question-and-answer session. I would like to turn the call back over to Cathy Zoi for any additional or closing remarks.

Thanks. Look, our commitment to technology-enabled innovation powers our customer relationship and whether it's Autocharge+ for drivers on the public networks, whether it's our APIs for automakers or fleet software for commercial customers, EVgo is positioned to deliver an exceptional and reliable fast-charging experience and expand our leadership across the market. We're excited about the growing momentum across the EV landscape. I think you could hear it in Olga’s and my voice, and we believe that EVgo is exceptionally well positioned to benefit from the electrification of travel. So, thanks to all of you for joining us. Great questions. Love that you love our sector like we do.

And that concludes today's presentation. Thank you for your participation, and you may now disconnect.