EVgo Inc. Q1 FY2025 Earnings Call

Hello and welcome to the EVgo Inc. Q1 2025 earnings call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session, and if you would like to ask a question during this time, please press star, one on your telephone keypad. I would now like to turn the conference over to Heather Davis, Vice President of Investor Relations. You may begin.

Good morning and welcome to EVgo’s first quarter 2025 earnings call. My name is Heather Davis and I’m the Vice President of Investor Relations at EVgo. Joining me on today’s call are Badar Khan, EVgo’s Chief Executive Officer, and Stephanie Lee, Executive Vice President, Accounting and Finance. Our CFO Paul Dobson is out this week due to a loss in the family a few days ago. Today we will be discussing EVgo’s first quarter 2025 financial results, followed by a Q&A session. Today’s call is being webcast and can be accessed on 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 quarterly reports on Form 10-Q. The company’s SEC filings are 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 measures, including a reconciliation to the corresponding GAAP measures can be found in the earnings material available on the Investors section of our website. With that, I’ll turn the call over to Badar Khan, EVgo’s CEO.

EVgo had yet another record quarter of strong results. Customer consumption on our network continues to rise with average daily throughput per public stall rising by 36% versus the same quarter last year and up more than fivefold in three years. The combination of higher throughput per stall and more stalls resulted in an overall public network throughput growth of 60% versus last year, with Q1 representing the 13th consecutive quarter of double-digit year-over-year growth in charging revenues, which is every single quarter since we’ve been a public company. Total revenue grew 36% year-over-year and a near tenfold growth in three years. We added over 180 new operational stalls this quarter, including extended stalls, and now have over 4,200 operational stalls. Finally, we began the year with a strong cash balance and prospects. We ended the quarter with $171 million in cash, cash equivalents and restricted cash, and at the start of April we received the next quarterly advance from the DoE loan as expected. As you all know, in December 2024 after an 18-month process, we closed on a $1.25 billion loan guarantee with the Department of Energy loan programs office that secures financing for our trajectory past adjusted EBITDA breakeven this year, leverage free cash flow breakeven next year, and more than triples our installed base over the next five years throughout the United States. This puts us in a particularly strong competitive position within the EV fast charging landscape. Looking at the macro environment, the impact of tariffs on EVgo, both directly and indirectly, is expected to be relatively minimal. That’s because only approximately 25% of the total capex cost per stall is subject to tariffs, with the remainder being domestically sourced equipment and raw materials and construction costs. Our fiscal 2025 net capex estimate includes capex for 2025 vintage stalls as well as spend incurred in 2025 for 2026 vintage stalls. In fiscal ’25, we expect to incur around $45 million to $50 million on imported chargers; however, we already have either in inventory or on shipping containers just under half of that spend for imported equipment, therefore we expect an impact of around $4 million to $5 million depending on what the final tariff rate might be for these imports, but we negotiate with our suppliers and whether we’re able to expand our existing U.S. sourced production. In addition, we expect to deliver $10 million in capex efficiencies this year that more than offset the estimated impact of tariffs in 2025. Because we are an owner-operator and not an equipment seller, none of this is expected to impact adjusted EBITDA for our charging business. This past quarter saw particularly strong growth in non-Tesla EV sales, which grew over 35% compared to Q1 last year. Chevy Equinox EV, Honda Prologue, and Hyundai Ionic 5 are amongst some of the best selling non-Tesla models. It’s especially encouraging to see this as the MSRP for the Equinox starts at around $35,000. Importantly, our business is increasingly not reliant on new EV sales in any one year and instead reliant on the overall number of EVs on the road. We estimate less than 10% of 2025 revenue to come from new EVs purchased this year, and that percentage will shrink going forward as the EV car park grows. In addition, EVs sold in the U.S. appear to have more domestic content on average versus ICE vehicles, therefore tariffs may have a bigger impact on ICE vehicles than EVs in the U.S. According to the DoE, the nationwide growth of DC fast charging stations has in fact been flat for the past seven quarters, with Q1 actually showing a 16% decline from the prior quarter. In a higher tariff environment, we expect the supply of new fast charging will continue to fall. That is because roughly half of new fast chargers deployed are sold to site hosts by companies like ChargePoint, which will likely see slower growth as site hosts pause or reconsider what they may view as discretionary investments outside of their core business, especially if these companies were relying on federal incentives that may also be on hold. Seven percent of new fast chargers that are funded by automotive OEMs other than Tesla are also likely to see slower growth as OEMs allocate capital to other priorities. Tesla’s share of new fast charging has declined from around 70% in 2022 to less than 20% in the most recent quarter. Unlike other OEMs, it’s unclear whether Tesla remains committed to the growth of fast charging, given their other priorities. Oil and gas companies funding DCSC chargers made up only 1% of new chargers this past quarter, according to DoE, and have already announced changes to their capital allocation priorities. That leaves 14% of new chargers funded by a large number of small private companies that we expect will struggle to attract financing in this environment, especially because of their small scale. Unlike almost every other fast charging owner and operator, EVgo is singularly focused on fast charging and has the financing in place allowing us to continue to grow. As a result, demand for fast charging represented by the growth in EV VIO far exceeds the supply of fast charging stations nationwide. This supply-demand imbalance has been one of the factors driving the fivefold growth in EVgo’s throughput per public stall over the past three years and will continue to drive growth in throughput per stall for the foreseeable future. S&P Global’s most recent base case forecast from March this year that takes into account the new administration’s policies on electric vehicles suggests 31% of new car sales being fully electric by 2030, slightly above where China already is today. The downside forecast is 21% of new car sales, below where China is today, translating to between 19 million and 26 million EVs on the road by 2030. This is half of the target established by the Biden administration of 50% of new car sales by 2030. S&P Global’s forecast for the supply of DCSC grows to 135,000 stalls by 2030 from around 50,000 at the end of 2024. In order to maintain the current ratio of EV to DCSC, the industry would need to deploy 40,000 fast chargers a year, which is over three times what was built in 2024. Given that we’ve now had seven flat to declining quarters of growth in DCSC supply, a flat growth scenario of no faster growth than today may even be too optimistic in a higher tariff environment. The result is a growing ratio of EV VIO to DCSC which has driven the growth in EVgo throughput historically and a significantly higher ratio in both S&P’s base and downside forecasts, which we expect will drive ongoing growth in EVgo throughput and utilization per stall, in addition to growth due to network expansion for the foreseeable future. In a higher tariff environment, we may see impacts to both the numerator and denominator in this ratio, leaving the overall supply-demand picture potentially even more attractive for EVgo than without the impact of tariffs. Let’s now turn to progress on our four key priorities: improving our customer experience, operating and capex efficiencies, capturing and retaining high-value customers, and securing additional complementary non-dilutive financing to accelerate growth. As always, improving our customer experience remains our number one priority and our strong momentum from last year has continued this quarter. Customers want a charger to be available when they pull up to an EVgo station, and we are deploying larger sites where our standard configuration is now six to eight stalls per site. At the end of the first quarter, 21% of our sites had six stalls or more. We continue to deploy ultra-fast high-power chargers. The number of stalls served by a 350 kilowatt charger is now 52%, up from 38% a year ago. Autocharge+, our seamless plug and charge capability continued to gain significant traction in Q1 with auto enrollments from OEM partners. Autocharge+ accounted for 27% of sessions initiated. Finally, our key customer success metric, or One and Done, increased 4 percentage points this quarter versus last year with 95% of sessions resulting in a successful charge on the first try. In summary, another great quarter of achievement in improving our customer experience. We’ve also made excellent progress on our efficiency priorities. Most notably, we took the MOU with Delta Electronics we signed last October and converted it into a signed joint development agreement to co-develop the next generation of charging architecture. EVgo and Delta are making meaningful progress on this initiative that’s expected to lower our gross capex per stall by 30%. We anticipate production of these stalls to begin in the second half of 2026 and we plan to have a prototype by the second quarter of this year. We continue to drive operational efficiencies in our business with call center costs per call declining 37% in Q1 versus last year. Our 2025 vintage capex per stall is expected to be roughly $135,000, which is an 8% reduction from 2024 vintage stalls including the impact of tariffs. EVgo’s operations team has been diligently working to lower capex and we’re delivering savings from lower contractor construction pricing, material sourcing, and increased use of pre-fabricated skids. We expect further improvements in G&A as a percentage of revenue for 2025 while investing in the growth of our business. We also continue to make great progress on our growth priority of capturing and retaining high-value customers. Fifty-five percent of EVgo’s throughput came from ride share, OEM charging credit, and subscription accounts in Q1. This provides EVgo with a relatively predictable base load level of demand on our network. In order to drive overall utilization up while mitigating the impact of congestion, thanks to the investments we have made in our customer marketing platform and dynamic pricing, we are now averaging double-digit utilization in the overnight hours, effectively opening up capacity for more drivers during the peak hours. We expect the next major update to our dynamic pricing algorithms in the fourth quarter of this year. We launched native NACS connectors at our first site in February and the pilot of technology validation is going well. We anticipate adding more NACS connectors to sites over the course of 2025. Later this year, we plan to launch the first of 400 new flagship stalls in partnership with GM, with the goal of delivering an elevated customer experience. As a reminder, these sites will feature up to 20 stalls and come with ultra-fast 350 kilowatt chargers, canopies, ample lighting, pull-through stations and security cameras, and like all EVgo sites will be located near a diverse set of amenities that customers can take advantage of while charging. Finally, we expect to expand the number of dedicated stalls serving autonomous vehicle partners, which could represent a very attractive source of potential growth for EVgo given we estimate we have a 20% share of operational sites serving this segment today. As for financing the growth of the business, we have now received both the first and second quarterly advances on our $1.25 billion loan guarantee with the DoE LTO. This loan ensures we are fully funded to add at least 7,500 stalls, more than tripling our installed base over the next five years. Looking ahead to the rest of the year, we expect to complete the transfer of our 2024 vintage 30C income tax credits. Over the course of this year, we expect around 30% of our 2025 vintage capex to be offset from state, local and federal grants, utility incentives, OEM payments, and 30C. The federal incentives in the form of a technology-neutral 30C alternative fuels credit and NEVI represent approximately 10% of our 2025 vintage capex. As we’ve said before, we are not particularly reliant on federal incentives and our next generation architecture program is targeting at least a 30% reduction in gross capex per stall, significantly more than the value of these federal incentives. Finally, given the very strong cash flows from our operating assets, we continue to receive inbound interest and evaluate additional complementary non-dilutive financing opportunities that would help fund the growth of any charging stations not included in the DoE loan funding to accelerate our growth and to provide diversity in our funding sources. Stephanie Lee will now cover our financial performance for Q1 together with our outlook for 2025.

Thank you Badar. Over the last three years, we have grown our operational installed based by 2.5 times while our revenues have grown over 12 times. Increasing our scale and maintaining our focus on cost allows us to deliver improving bottom line performance. We continue to expect to achieve our target of adjusted EBITDA breakeven in 2025. Our public network throughput per stall has grown over three times in the last two years, significantly outpacing our charging stall growth. This accelerated performance is driven by multiple factors we’ve previously discussed, namely EV vehicle miles traveled parity with ICE, significant growth in ride share, increased multi-family dwellers among EV drivers, increasing vehicle charge rates, and larger, less efficient EVs coming to market. Throughput per public stall was 266 kilowatt hours per stall per day in Q1 compared to 196 a year ago and roughly flat sequentially, which reflects the seasonal shift from Q4 to Q1 as we saw last year. In the first quarter, total public network utilization increased to 24%, up from 19% a year ago. Sixty-seven percent of our public stalls had utilization greater than 15%. Fifty-four percent of our public stalls had utilization greater than 20%, and 32% of our public stalls had utilization greater than 30%. Each of these utilization categories has grown significantly over the last two years as the entire utilization curve is shifting to the right. Total throughput on the public network during the first quarter was 83 gigawatt hours, a 60% increase compared to last year. Revenue for Q1 was $75 million, which represents a 36% year-over-year increase. This growth was primarily driven by charging networks and extended revenue. Total charging network revenues of $47.1 million grew from $31.6 million, exhibiting a 49% year-over-year increase. Extended revenues of $23.5 million increased from $19.2 million in the prior year, delivering growth of 23%. Charging network gross margin in the first quarter was 37.1%, down 370 basis points from the prior year. The prior year quarter included $2.5 million of breakage revenue from one of our OEM charging credit programs which is winding down, and similar levels of breakage were therefore not expected to recur. Excluding the impact of breakage revenue, our charging network gross margin would have grown 130 basis points year-over-year. Compared to the fourth quarter of 2024, charging network gross margin declined primarily due to higher maintenance costs incurred to improve the reliability of our charging experience and higher property taxes, which typically increase from January 1 of each year. Our extended revenue for the first quarter was up from the prior year due to more construction projects in process or completed and the recognition of certain construction change order costs that were incurred in the prior year. Adjusted gross profit was $25.4 million in the first quarter of 2025, up from $17.3 million in the first quarter of 2024. Adjusted gross margin was 33.7% in Q1, an increase of 240 basis points compared to last year. Adjusted G&A as a percentage of revenue also improved from 44.4% in the first quarter of 2024 to 41.6% in Q1 of this year, demonstrating the operating leverage effect. Adjusted EBITDA was negative $5.9 million in the first quarter of 2025, a $1.3 million improvement versus negative $7.2 million in the first quarter of 2024. Now turning to our 2025 guidance, EVgo continues our top line growth and path to profitability in 2025. Our stall growth outlook for the year remains the same with 1,200 to over 1,400 new stalls, comprised of 750 to 815 public network stalls, 50 to 85 dedicated network stalls, and 450 to 550 EVgo extended stalls. We continue to expect total revenue in the range of $340 million to $380 million. As a reminder, we estimate only 10% of our total 2025 revenues are tied to new EV sales. We continue to expect charging network revenue to be two-thirds of full year revenue. We anticipate sequential quarterly growth in our charging network revenues as we continue to expect quarter-over-quarter and year-over-year throughput growth. Similar to last year, we expect to see higher summer electricity costs impacting Q3 charging network gross margin. We continue to expect full year extended revenue to be broadly flat to last year with slightly lower revenues in the second half of 2025. We expect growth in full year ancillary revenue with most of that growth in Q4, driven by the dedicated fleet business. We expect adjusted G&A to increase modestly throughout 2025 as we continue to make investments in areas such as our next-generation charging infrastructure. We continue to expect improvements in charging network gross margin and adjusted G&A as a percentage of revenue, driving bottom line adjusted EBITDA improvement. We therefore continue to target adjusted EBITDA breakeven in 2025 with a range of negative $5 million to positive $10 million. We continue to expect fiscal capex net of offsets to be in the range of $160 million to $180 million. We are wrapping up our mobilizations with approximately 75% of our 2025 vintage public network stalls expected to operationalize in the second half of 2025. Q4 is expected to account for approximately 50% of total 2025 public network stalls.

Thank you. Your first question comes from Andres Sheppard with Cantor Fitzgerald. Your line is open.

Hi everyone, good morning. Congratulations on another great quarter, and thank you so much for taking our questions. Maybe just to start, you touched on this briefly in your prepared remarks, hoping for maybe a bit more color. I’m wondering if you can maybe just give us a bit more cadence in terms of guidance for the rest of the year, particularly around cost of energy, ASPs, you mentioned Q3, I think will be the weakest, but basically ASPs, gross margin, and how we should think about the ramp-up of the DoE loan stalls throughout the rest of the year. Thank you.

Andres, yes, we’ve provided guidance that hasn’t changed since the last quarter. On the ramp-up of the loan, we provided a stall build schedule on the last quarterly call, and that remains the same, so that’s 750 to 850 stalls, public network stalls for the full year, together with about 50 to 85 dedicated stalls, 450 to 550 stalls through our extend program, so that hasn’t changed. What also hasn’t changed, we expect about 75% of the public stalls to be in the second half of the year, about 50% in Q4, so you can work out Q2 given we’ve got Q1. In terms of the rest of the year, Q3 is typically the quarter, as we saw last year where we got higher energy costs, that will really be the same shape for this year. In terms of average selling price, I’d expect us to see prices where they are today, maybe slightly expanding. Stephanie, any other comments in terms of guidance?

No, I think that covers it.

Got it, okay. That’s super helpful. Appreciate all that color. Maybe just a bit of an odd question, but as we are seeing an acceleration in autonomous vehicles and self-driving technology, can you maybe remind us what is EVgo’s strategy to try to capture some of this market and how you might address autonomous vehicle charging in the future? Thank you.

Yes, as we mentioned last quarter, we specifically outlined the number of stalls dedicated to the autonomous vehicle segment, which are distinct from our overall stall count. In 2024, we significantly increased the number of stalls serving this segment, more than doubling what we previously had. While there isn't extensive data, we estimate that we hold about a 20% share of the dedicated stalls for this market, which is encouraging. These stalls operate under a different cash flow model; they generate contracted cash flows, unlike our public stalls that depend on charging revenue. We are enthusiastic about this development and believe it could provide substantial growth for our business, especially since the regulations in this area appear to be more favorable than in the past.

Wonderful, thank you so much. Really appreciate it. Congratulations in the quarter again. We’ll pass it on.

Thanks Andres.

The next question comes from Chris Dendrinos with RBC Capital Markets. Your line is open.

Yes, good morning, and thanks for taking the question.

Absolutely.

I guess maybe on the financing side of things, it was great to see that you all got that second advance from the DoE. I guess maybe on the private side, and you mentioned you’re exploring some funding options, can you provide an update on timing around that and maybe what specifically are you all kind of looking at as far as options go? Thanks.

We are very pleased with our current financing situation. We anticipate quarterly advances as outlined in the agreement we signed with the Department of Energy in December, and the recent second quarter advance met our expectations and plans. Regarding additional financing, our assets are generating strong cash flows, which continues to attract significant interest from parties looking to help grow the business. We're exploring opportunities, particularly in areas not eligible for DoE funding, such as the AV sector. It also makes sense for us to diversify our funding sources. We're in ongoing discussions and if we find an appealing opportunity with potential partners, we would aim to move forward, possibly within this year.

Got it, and then I guess maybe just a follow-up on that point around it being attractive and the ability to accelerate, are you indicating that you would look to potentially accelerate activity if you find an attractive arm of financing? Is that correct? Thanks.

Yes, over the course of the five years, the schedule that we’ve laid out on the last two calls showed what the stall build schedule would look like under DoE loan financing, and so what we’re looking at is both from a balance sheet and operational perspective what would it take to increase that level of stall build-out. What we’ve got today gets us to about 11,000 stalls in about five years’ time, and we provided those economics on the last two calls. What we’re asking ourselves is, what would it take to accelerate that scheduled build-out over the next five years.

Got it, thank you.

The next question comes from Chris McNally with Evercore ISI. Your line is open.

Thanks so much, team, and thanks for taking the call. Appreciate all the 2030 comments - I think we all see the huge growth in the car park that will eventually come. I think our question is around maybe your views on the potential changes of revoking IRA and the EV/EPA mandates which may come. Our thought is what if we get that worst case scenario in the upcoming tax bill in the second half, where incentives are removed and 2030 targets are removed. My question is how does EVgo potentially change their roll-out strategy geographically within the U.S.? Places like California become even more valuable given EV density, whereas maybe expansion states, there’s a change in the math as a result of regulation changes, so big picture question, but would appreciate your thoughts.

Yes, Chris, taking a moment to reflect, our focus is not on selling cars; rather, we are selling kilowatt hours. The key drivers for our business are the demand for kilowatt hours, indicated by the growth in electric vehicle registrations, and the availability of industry-wide DC fast chargers. This interplay of demand and supply affects kilowatt hour sales. Even in the most conservative forecasts, which consider potential changes in federal policies regarding electric vehicle sales, we anticipate the ratio of cars to fast chargers will nearly double. The current supply-demand scenario remains promising, especially since the number of chargers has only increased by about a third over the last three years, while our throughput per charging stall has expanded fivefold. We view this as a robust situation; the business model for operating fast chargers proves to be quite resilient. Regarding your specific inquiries, if certain states continue to provide incentives for electric vehicles while others do not, we would naturally expect to see a rise in EV sales in those incentivized states. Our network plan, which we regularly update, incorporates these forecasts, allowing flexibility in our approach. We currently have identified around 30,000 charging stalls across the U.S. that align with our return expectations, providing us with substantial flexibility to adapt to demand changes.

That's great to hear. Do you have any insights on the medium-term geographic plans? Specifically, if we're discussing electric vehicle vehicle-in-operation, with your forecast estimating a range of 20 to 26 and a car park penetration of about 7% to 10%, which markets do you find most appealing in terms of returns? We see California as a key player, as it is nearing penetration ratios similar to those in Europe. What general guidelines can we use to determine when a market becomes particularly attractive, once it reaches a certain penetration level of the car park?

Yes, look - for us when we think about returns, we’re obviously thinking about the productivity of the stalls and the kilowatt hours, the throughput per stall per day, but we’re also taking into account the cost of the stalls, or the capex, the cost of construction might vary across the United States, the availability of incentives. I will tell you that overall utilization, as we showed today, is 24%. We actually have higher utilization outside California. We’ve got more throughput in aggregate outside California. Some of our fastest and top states today are places like Texas, Florida, Arizona, Michigan, and none of these states is in the Clean Cars II program that California has adopted, so I expect to see growth in those states continue as they have done in the last couple years.

That’s really great. Helpful info on the micro market, the examples you gave. Thank you so much, team.

Absolutely.

The next question comes from Bill Peterson with JP Morgan. Your line is open.

Yes hi, good morning. Thanks for taking the questions, and nice job on the quarterly execution. It’s nice to see the reiteration of the financial and other factors. On the loan, it sounds like all systems are go, but just to remove any doubt, is there any remaining items that you and the team are working through? I guess I just want to understand how the current engagements are, are they constructive or are they still probing around the edges and doing further investigations? We understand that a lot of people at the LPO have left or are being forced out, leaving at their own will, whatever. What’s your current level of engagement with the LPO?

Bill, we’re having a very productive collaboration with the LPO team. I can’t comment on their overall staffing levels, but I can say that the people we’re working with are the same ones we’ve been collaborating with for the past several months. Our quarterly advances, both first and second, as well as our monthly draws and reimbursements, are proceeding according to our agreement, and everything is going as we expected. You could say this is typical business activity for us. We’re several months into this now and are pleased with the progress.

That’s great. Just wanted to make sure. Then I had some clarifying questions on the tariffs, and thanks for the color on that. What are the assumptions around tariff rates to get to this $4 million to $5 million? I guess think 32% on Taiwan as an example, is that the right way? I guess on this $10 million in efficiencies, can you provide any additional color on that? It sounds like you’re getting that anyway, regardless of where the tariff environment still stands. Then maybe looking into next year, it sounds like you reiterated the sort of 30% capex reduction with the program you have with Delta, but is that reduction still assuming the same tariff environment we have today? How do you get there?

Yes, the $4 million to $5 million figure refers to the fiscal year and not the vintage year. This represents the impact on the capital spending for the calendar year that we will incur in 2025, which is based on approximately $45 million to $50 million in equipment imports. We already have about half of this equipment either in the U.S. or on shipping containers, so there will be no tariff on that portion. We expect to face a 10% tariff on a quarter of the equipment that isn’t here yet and about a 32% tariff on another quarter; this is how we arrive at the $4 million to $5 million estimate. Regarding efficiencies, last quarter we reported a 9% improvement in our vintage 2024 capital expenditures per stall, reducing our original estimate of about $160 million by 9%. For this year, we anticipate an 8% reduction compared to our 2024 ending figures, thanks to our operations team efficiently managing tasks. We expected construction pricing and material sourcing, including prefab skids, to constitute about 40% of our mix this year, but it will be slightly higher while the cost per skid will be a bit lower, which is simply routine business activity. As for FY26, we have not given specific guidance for vintage FY26 capital expenditures, but it will likely reflect the benefits from the cost savings we've achieved. In the second half of ’26, we will begin implementing our new charging architecture developed with Delta Electronics, which is projected to improve our estimated $160 million to begin in 2024 by 30%. We believe this gives EVgo a significant competitive advantage over numerous other fast charging companies, as we can leverage our scale and partnership with a global leader to lower capital expenditures. Overall, we are very satisfied with our current position.

Thanks for all the details, Badar. It’s terrific to hear that, and again congrats on the quarter.

Thanks so much.

The next question comes from Chris Pierce with Needham & Company. Your line is open.

Hey, good morning everyone.

Good morning.

Can you explain how dynamic pricing works, particularly in relation to increasing utilization during overnight hours? I'm considering the cost savings for the driver, but I noticed that you increased the average selling price per watt in the mid-single digits year-over-year. I'm curious about the pricing power on your network and how these two aspects are balanced.

With dynamic pricing, we are focused on maximizing our margins. In certain areas, we may increase prices, while in others, we could decrease them, all aimed at enhancing margin. This approach is a significant competitive advantage for us compared to numerous smaller companies in the fast charging sector that do not prioritize utilization for various reasons. Our investments in marketing, understanding our customers, and dynamic pricing, which essentially serves as pricing signals, are helping us influence charging times throughout the day. We aim to open up peak hours for price inelastic customers, and this strategy is yielding positive results. We anticipate rolling out the next round of algorithms for dynamic pricing in the fourth quarter, which will introduce a higher level of sophistication. This is not an entirely new concept; we are applying successful methodologies from other sectors to our business.

Okay, and is it safe to say you haven’t seen any demand signals or anything that would cause you to back off the level of pricing power you think you have in the network?

Chris, I didn’t fully capture the question, but I think the question is have we seen anything that would cause us to back off. The answer is no.

Okay, and then just lastly, housekeeping, can you remind me on the typical seasonality? I know this is sort of a young business and you’ve had the growth you’ve had, so it’s hard to pick out the seasonality, but network throughput down modestly, but how should we think about seasonality the rest of the year and then when you layer on stall growth too? How should we think about the cadence of network throughput?

Yes, look - the network throughput was actually kind of flat, to be honest. We had some rounding, so last quarter we rounded up, this quarter we’re rounding down, so network throughput is kind of broadly flat, which is pretty much where it was almost exactly last year between Q4 and Q1, and so we expected that certainly. We’d expect to see network throughput obviously grow in Q2 and Q3 and Q4 in the same shape we saw last year sequentially from Q4 to Q1. That really aligns with VMT - vehicle miles traveled for EVs across the United States, so that’s really how we think about the profile.

Okay, thank you.

Again ladies and gentlemen, if you have a question, it is star, one on your telephone keypad. Your next question comes from Craig Irwin with Roth Capital Partners. Your line is open.

Hi, good morning Badar, morning everyone. Thanks for taking my question. I wanted to ask about the progress with the Tesla connectors, the NACS connectors you mentioned earlier in your prepared remarks. Can you maybe frame out for us where you’re at with this? Are you really just in testing, or will we potentially see dozens or more stations retrofit over the course of the year? Is it fair for us to start asking about the new customers added that are Tesla customers? I know you’ve had another strong quarter with 119,000 new customers, but is the Tesla fleet starting to layer in and help you on the demand side?

Craig, given that a significant portion of our overall EV VIO consists of Tesla drivers and that our charging stations offer faster 350-kilowatt options located closer to where drivers, including Tesla users, live and work, we are keen to target this segment. However, we must ensure that the systems work correctly. Over the past quarter, we've been focused on technology validation, specifically regarding connectivity and speed. At 350 kilowatts, we need to ensure that we are using the right cables that can handle higher speeds than Tesla superchargers. Additionally, we must closely monitor the impact of removing CCS connectors to avoid decreasing demand before the NACS cable can compensate for the loss. Our approach is dictated by data, and we are evaluating sites nationwide for the opportunity to replace underperforming CCS cables with NACS cables, especially in areas where Tesla drivers are prevalent. We anticipate starting the rollout of these cables, likely on a retrofit basis, possibly around 100 to 150 throughout this year. For our next-generation charging architecture, expected in the second half of next year, we intend to implement all NACS cables from the start, if not even sooner with the current generation of chargers.

Excellent, thank you for that update. My next question is on the extend revenue. Again, this quarter was pretty strong, and it’s nice to see you building a network out there with partners, incremental profits, incremental driver service is always a good thing. Do you have potential for other extend customers that could come in over the course of the next year, and how should we think about the shape of extend growth, the revenue contribution in this year? Is it going to be as back-end loaded as the stall build-out, or is this something that’s going to be a little more linear as we look at the year?

We are not actively seeking more extend partners and have a strong relationship with PFJ, the product company. We are rolling out 2,000 stalls through this partnership. We provided an illustrative build schedule in the last quarter that shows what this might look like through 2028. This year, the extend business is mostly flat in terms of revenue compared to last year, with a slight decline in the second half versus the first half. The revenues from extend include both equipment sales and construction revenues, which can sometimes vary, but we anticipate overall results to be similar to last year, possibly a bit lower in the second half compared to the first half.

Thank you for that. I’ll take the rest of my questions offline.

Absolutely, thanks Craig.

This concludes the question and answer session. I’ll turn the call to Badar Khan for closing remarks.

Well, thank you everyone. We had yet another strong quarter with strong balance sheet. We are in a particularly strong competitive position. Together with the business model that’s minimally impacted by tariffs and a supply-demand picture that should underpin continued growth, we are well on our way to delivering adjusted EBITDA breakeven this year, and I look forward to providing updates throughout the course of this year. Thanks very much, everyone.

This concludes today’s conference call. Thank you for joining. You may now disconnect.