EVgo Inc. Q2 FY2025 Earnings Call

Thank you for standing by. My name is Kate, and I will be your conference operator today. At this time, I would like to welcome everyone to the EVgo Q2 2025 Earnings Call. Please go ahead.

Good morning, and welcome to EVgo's second 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 Paul Dobson, EVgo's Chief Financial Officer. Today, we will be discussing EVgo's second 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 in 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 materials available on the Investors section of our website. With that, I'll turn the call over to Badar Khan, EVgo's CEO.

Thank you, Heather. EVgo had yet another excellent quarter with strong operational performance and achievement of important strategic milestones. We had particularly strong revenue this quarter, up 47% versus the same quarter last year. Adjusted EBITDA was more than $6 million better than last year, bringing us closer to our goal of breakeven adjusted EBITDA for the full year. We had 4,350 stalls in operation and ended the quarter with $183 million in cash, cash equivalents, and restricted cash, which is $12 million higher than the prior quarter. Most importantly, this does not include $65 million in gross proceeds from the first drawdown from our commercial bank facility and expected 30C sale proceeds in August. On July 23, we closed on the largest and first-of-its-kind commercial bank financing for charging infrastructure in the U.S. for $225 million with the ability to expand to $300 million and have already received a $48 million first drawdown. This is a major strategic milestone for the company, enabling us to accelerate our expansion and diversify our funding sources with low-cost, non-dilutive capital. As you will see, we expect to be able to increase our ending 2029 public stall guidance by approximately 3,500 more stalls than we had previously estimated to roughly 14,000 stalls. Strategically, EVgo is now very well positioned competitively as one of the best capitalized players in the sector. As always, we are focused on being disciplined in allocating capital, leveraging debt funding sources, and the growth of our balance sheet. At this time, we do not have a request in front of the DOE LPO for our next advance. One of the many attractive features of the DOE loan is that there is no time limit on when we need to request advances for specific tranches of eligible costs we incur other than the overall 5-year availability period. Finally, we've passed enough milestones this year to be able to forecast a reduction in net CapEx per stall for 2025 vintage stalls by 28% versus our initial expectations. A reduction in net CapEx per stall of this magnitude results in significantly higher returns. The outlook for EVgo as an owner-operator of DC fast charging remains very bright, with demand growth outstripping supply growth. The latest independent forecasts project that the increase in electric vehicles in operation is outpacing the more modest increase in the number of DCFC stalls in the U.S. These forecasts take into account all of the federal administration's policies in electric vehicles, which result in EV VIO being over 4x higher than today by 2030. As we're seeing from GM, Ford, and many others, major automakers continue to prioritize a growing lineup of affordable electric vehicles that appeal to all customer segments. Forecasts of the growth in DCFC stalls are not as robust, but anecdotally, we see a slowdown taking place among both a large number of smaller companies, who are likely going to struggle to attract capital in this environment, and also a small number of larger companies whose parents may be allocating capital to other priorities. The DCFC forecast represents the industry continuing to grow at the same pace it did over the last 12 months. As a result, we expect that the recent trend of more electric vehicles per fast charger is likely to continue, resulting in a promising macro environment for EVgo in this coming 5-year period, which we expect will continue to drive up both EVgo market share and throughput per stall. This macro environment continues to be supplemented by multiple additional tailwinds that continue to show positive trends, such as the electrification of rideshare, autonomous electric vehicles, and more affordable vehicles in both the new and used electric vehicle markets, attracting more customers without at-home charging and thus reliant on public fast charging. In June, Uber disclosed that the number of their EV drivers globally was up more than 60% versus the year prior. In the U.S., only just over one-third had a dedicated home charger. We are very pleased to close the commercial bank facility provided by a syndicate of global project finance banks led by SMBC and including Royal Bank of Canada, ING, Bank of Montreal, and Investec. With an initial 325 basis point spread, this loan demonstrates the creditworthiness of our business that these commercial banks see and the confidence they have in the resilience of the cash flows generated by the ultrafast charging infrastructure EVgo is building across the United States, to give customers more choices to charge their electric vehicles. This facility is complementary and incremental to our $1.25 billion DOE loan with a similar structure and standard project finance terms. It offers tremendous flexibility and can be used to finance the build-out of more EVgo-owned stall types, including dedicated hubs for autonomous vehicle partners. We received a $48 million advance on July 24, and we have the ability to draw down on the facility monthly. We have the ability to go faster and build a higher number of stalls or go slower with lower deployment targets. All new EVgo-owned stalls can now be leveraged going forward. Additionally, this bank facility represents an important milestone in establishing long-term relationships with commercial lenders. We believe the opening of the commercial bank project financing market as a source of capital for public fast charging infrastructure reflects the maturity of the company, the profitability of the EVgo network, and confidence in management. With the financing we now have in place, together with our targeted CapEx per stall and reinvesting excess operational cash flow over the next 5 years, we now expect to be able to more than quintuple our annual stall build schedule from 825 stalls in 2025 to up to 5,000 by 2029. That rate of growth in 2029 is more than double our earlier estimates. This accelerated pace meaningfully differentiates EVgo amongst U.S. fast charging companies and results in a scale that will become harder for others to replicate over time, deepening the competitive moat around our business. The second strategic development this quarter is that we're now forecasting a 28% reduction in 2025 vintage net CapEx per stall from our original estimate. This is an exciting milestone. Even including the impact of global tariffs, we are still expecting an 8% improvement in vintage gross CapEx per stall versus what we initially expected for 2025. This improvement is driven by savings from lower contractor pricing, material sourcing, and increased use of prefabricated skids. Today, however, I'm able to share that we now expect vintage CapEx offsets to be around 50% higher than we originally expected because more stalls we're operationalizing this year are expected to have state grants associated with them. Unlike many other charging companies, we have a large enough project pipeline, where we can now move the timing of operationalizing assets from one quarter to another and from one year to another. That flexibility allows us to capture more state grants wherever those opportunities may arise. The capital offsets come from three sources: state and utility incentives, OEM infrastructure payments, and federal incentives like 30C. Our forecasted performance this year is a reminder that regardless of recent changes to federal incentives, state grants incentives are alive and well. 30C will remain in effect for assets placed in service until the end of June 2026, which is nine months longer than many other incentives created by the IRA. As a result, we expect net vintage CapEx per stall to be significantly lower this year, materially enhancing our return on capital, especially considering the top 15% of our stalls are already generating $50,000 in cash flow per stall per year against a net onetime average CapEx of $74,000. Two consequences of shifting our project portfolio to capture state grants are that a certain number of stalls that were due to be operationalized in Q3 will now shift to Q4. Secondly, stalls with state grants tend to be a little less productive in terms of throughput per stall in the first year or two than other stalls without state grants. However, the lower CapEx more than makes up for it when we look at project returns. Our long-term expectation is to continue lowering gross CapEx per stall as a result of our next-generation charging architecture that remains on track for the end of next year. That said, we conservatively do not assume capital offsets are as high as the last two years, which still results in very favorable project returns, especially given the higher annual cash flow per stall levels we expect to reach by 2029. Let's now briefly turn to progress on our four key priorities: Improving the customer experience, operating in CapEx efficiencies, capturing and retaining high-value customers, and securing additional complementary nondilutive financing to accelerate growth. Improving customer experience remains our top priority, and our strong momentum from last year continues. This quarter, we experienced lower uptime on certain equipment types due to faulty firmware updates that were largely rectified in July, and we decided to take that opportunity to tackle some legacy hardware issues across multiple charger types that resulted in higher associated maintenance costs. These efforts are fully aligned with our goal to continually improve the customer experience, and we are already seeing these efforts pay off with much higher throughput per stall in July. Building larger public sites with six to eight stalls is now our standard configuration. At the end of the second quarter, 24% of our sites had six stalls or more. We continue to deploy high-power chargers. The number of stalls served by a 350-kilowatt charger is now 57%, up from 41% a year ago and 25% two years ago. Autocharge+, our seamless plug-and-charge capability, continued to gain traction, accounting for 28% of sessions initiated. Finally, our customer success metric, One & Done, increased one percentage point this quarter versus last year, with 95% of sessions resulting in a successful charge on the first try. As we detailed in our first quarter earnings call in May, we expect that the impact of increased tariffs on our CapEx will be more than offset with capital efficiencies we've identified and implemented, and there is near zero impact on our operating costs from tariffs. EVgo continues to meet all our milestones in the development of our next-generation charging architecture we are jointly developing with Delta Electronics. We are on track to have our prototype and initial deployment in the back half of 2026. We remain focused on improving the profitability of the overall business while investing in the future growth of the company. We expect continued improvement in G&A as a percent of revenue throughout 2025. Over half of our throughput in Q2 came from frequent use sources: rideshare, OEM charging credit programs, and EVgo subscription plans. This quarter, we've added to our dynamic pricing, digital marketing, and customer acquisition and reactivation capabilities with the deployment and use of AI agents to optimize and increase the effectiveness of our campaigns. In certain geographies, we launched seasonal-based pricing to help cover the increased costs from summer utility tariffs. Our second pilot site with native NACS cables went live in June. The focus of the initial pilot in February was to validate technology. And for the second pilot, our focus is to get an early read on our ability to attract Tesla drivers with the NACS cables installed. While it remains very early, we are encouraged by the fact that since going live with the NACS cables, this site has had significantly more usage from Tesla drivers than it had prior to installing the NACS cables. Once we scale these cables across the rest of our network and because our charging stations are faster than Tesla and closer to where Tesla drivers live, work, and go about their lives, we expect to see potentially significant growth in usage per stall. This is because we expect to attract a greater share of Tesla drivers than before, and these drivers still make up the majority of EVs on the road. In August, we expect to add 30 more NACS cables to more sites, and we expect to add around 100 NACS cables to sites on a retrofit basis through the rest of the year. Finally, we are constructing our first flagship sites with General Motors. We look forward to opening these stations, which will feature up to 20 stalls and offer features like overhead canopies, lighting for an elevated customer experience. We've made huge strategic progress on financing this quarter with the closing of a low-cost commercial bank facility. We expect to close our second sale of 30C income tax credits this week for our 2024 vintage portfolio for an anticipated $17 million of gross proceeds. As I said earlier, we now expect 45% CapEx offsets for our 2025 vintage stalls. Paul will now cover more detail on the commercial bank facility and how that relates to higher long-term estimates, our financial performance for Q2, and our updated outlook for 2025.

Thank you, Badar. I'll walk us through the summary loan terms for this facility. Flexible loan structure allows EVgo to build over 1,500 new public and dedicated stalls over the next 3 years and finances the 400 existing public stalls we added as collateral. As Badar mentioned earlier, the facility allows us to finance stalls that wouldn't have been eligible for debt financing under the DOE loan. The interest rate is SOFR plus 3.25% with a 25 basis point increase at the beginning of year 5. The facility has a 5-year term and a 3-year deployment period. EVgo will be able to draw against the loan facility monthly after a stall is operationalized for 60% of costs, including CapEx, capitalized G&A, and deployment expenses. As collateral for the loan, EVgo contributed 400 operational stalls into a project level SPV, and we received $48 million of gross proceeds in July after closing. We expect to see incremental network growth from this facility starting in 2026, as it typically takes EVgo 12 to 18 months to get a site operational. In terms of expected stalls in operation, we are now including estimates of growth net of removals, averaging roughly 130 per year through our EVgo ReNew program over this entire period, where we are removing legacy equipment from the network. EVgo now is fully capitalized to have roughly 14,000 projected public stalls by the end of 2029, which will increase operational efficiencies by leveraging economies of scale. This is approximately 3,500 stalls more than our previous estimate. As described in our fourth quarter 2024 earnings call in March, our unit economics continue to grow, and we expect to realize the operating leverage in our model through increased throughput per stall per day and leveraging fixed costs per stall, dependent costs such as rent, and a reduction in maintenance costs through our next-generation charging architecture. EVgo anticipates that in 2029, our stalls will generate $90,000 to $104,000 per year in revenue, charging network gross margin per stall in the range of 50% to 52%, and annual cash flow per stall in the $38,000 to $47,000 range. Adjusted EBITDA generation is also particularly strong. Because these per stall cash flows include all costs other than fixed costs, which will be covered this year, the stall base cash flows fall straight to the bottom line. By 2029, the additional roughly 5,000 stalls that we plan to build that year will generate approximately $200 million incremental adjusted EBITDA annually. As we have discussed before, this represents a very compelling annual return on an onetime net CapEx per stall of $95,000. Applying this high and low-end annual cash flow per stall from our unit economics to the anticipated stalls in operation at the end of 2029, you have a compelling business with $1.2 billion to $1.5 billion in annual revenue from the owned and operated charging business, generating $380 million to $570 million in annual adjusted EBITDA at 32% to 38% margins. We are assuming our total adjusted G&A increases up to 2x in real dollar terms as we add to our growth G&A to build out the network, which again demonstrates the operating leverage in this business as the network is growing 4x. With the full utilization of the current loans, we expect to exit 2029 with a low net debt to adjusted EBITDA ratio of under 2.5x, which provides us with additional debt capacity to finance growth well into the future. Since infrastructure companies with predictable adjusted EBITDA generation and margins typically have higher leverage ratios of 5 to 6x, our expected ratio of less than 2.5 would provide us with significant incremental leverage capacity. Now, turning to more detail on our second quarter results. Over the past 3 years, we have grown our operational stall base by 2.6x, while our revenues have grown 14x. Increasing our scale and maintaining our focus on costs allows us to deliver improving bottom line performance. Our public network throughput per stall has grown 2.5x in the last 2 years, significantly outpacing our public charging network stall growth of 1.4x. Throughput per public stall was 281 kilowatt hours per stall per day in Q2 compared to 230 a year ago, a 22% increase and up 6% sequentially. After a recent firmware update and incremental investment in Q2 maintenance, July average daily throughput approached 300 kilowatt hours per stall per day. In the second quarter, total public network utilization increased to 22%, up from 20% a year ago. Total throughput on the public network during the second quarter was 88 gigawatt hours, a 35% increase compared to last year. Revenue for Q2 was $98 million, which represents a 47% year-over-year increase with growth in nearly all revenue categories. Total charging network revenues were $51.8 million, exhibiting a 46% year-over-year increase. eXtend revenues were $37.4 million, delivering growth of 35%. We delivered more charging equipment to PFJ in the second quarter than anticipated as they accelerated their purchasing. Ancillary revenues of $8.8 million were up 157% versus last year, driven primarily by growth of the hubs business for autonomous vehicle companies. Charging network gross margin in the second quarter was 37.2%, up 210 basis points from the prior year. Adjusted gross profit of $28.4 million in the second quarter of 2025 is up from $17.7 million in the second quarter of 2024. Adjusted gross margin was 28.9% in Q2, an increase of 240 basis points compared to last year. Adjusted G&A as a percentage of revenue also improved from 38.5% in the second quarter of 2024 to 30.9% in Q2 of this year, demonstrating the operating leverage effect. Adjusted EBITDA was negative $1.9 million in the second quarter of 2025, a $6 million improvement versus the second quarter of 2024. Now turning to our 2025 guidance. EVgo anticipates we will add 800 to 850 new public and dedicated stalls in 2025, with over half the stalls going operational in the fourth quarter. Total fiscal net CapEx has been reduced to $140 million to $160 million, reflecting the capital efficiencies we are realizing this year and faster expected development timelines, resulting in less capital spend in 2025 for 2026 vintage stalls. In addition, we forecast to add new eXtend stalls of 475 to 525 this year. Revenue for the full year is expected to be $350 million to $380 million, an increase of $5 million at the midpoint compared to our prior guidance. Charging network revenue is estimated to be roughly 60% of total revenues in 2025. We're expecting sequential improvement in the third and fourth quarters for charging network revenues. We expect the 2025 charging network margin profile to be like 2024. Our third quarter charging network margin will decrease seasonally due to higher summer electricity rates and resume its upward trajectory in Q4. Full year eXtend revenues are anticipated to increase around 25% versus last year, and ancillary revenues will be more than double this year. We expect both eXtend and ancillary revenues will be lower than Q2 in the third quarter. Xtend revenues are expected to be relatively evenly distributed in the third and fourth quarter. Ancillary revenues are anticipated to have a much higher fourth quarter following revenue recognition milestones. We're investing in accelerating the growth of EVgo, including investments in our operations and deployment team to increase stall growth as well as our next-generation architecture. Adjusted G&A for 2025 is expected to be flat to the Q4 2024 run rate plus inflation, reflecting investments in growth with some offsets due to efficiencies. These investments for accelerated growth will continue in 2026, and we therefore anticipate similar growth in adjusted G&A next year. EVgo continues to make progress towards adjusted EBITDA breakeven. In 2025, we continue to expect adjusted EBITDA in the range of negative $5 million to positive $10 million. Following our anticipated revenue trajectory for the back half of the year, we expect Q3 adjusted EBITDA to be negative and lower than Q2 and positive for the fourth quarter. Topline growth financed with low-cost nondilutive capital, coupled with leverage in our operating model is expected to deliver compelling shareholder returns. We look forward to keeping you apprised of our progress.

We can now open the call for Q&A.

Maybe first on the CapEx trends and offsets here. Great to see. I was just wondering if there was a geographic trend that's driving the capital offsets going to 45%. Were you targeting states in a different way based on demand that you're seeing? Or were there changes in state incentives? Just wondering what shifted that geographic trend around.

Yes. Well, thank you, David, for the question. I think that one of the key things we wanted to communicate here is that, not only are we focused on EBITDA generation with strong margins, but we are also very much focused on delivering strong returns on capital for shareholders. And so, being able to lower our vintage CapEx per stall by almost 30% is very much aligned with that. Our first priority, of course, is to lower gross CapEx per stall, which is a trajectory we've been on for some time, and we've been successful at, and we are looking to continue with our next-generation architecture. On the offsets, we're absolutely pleased with where we are this year. We had a very high level of offsets for vintage 2024 in the 50% range. This year, the offsets are also looking like they're going to be very strong. We've seen that already for our first half year deployments where offsets are at that 45% range. These grants are really coming from all over the United States, to be perfectly honest. For the first half of the year, we have a lot of grants in California, but the rest are coming from states like Florida, Ohio, Pennsylvania, and Washington. It's really all over the United States. A key point here is that regardless of what happens with federal incentives, state grants and utility incentives remain alive and well.

And I was just wondering, any updates on the DOE loan in terms of availability, any recent conversations you've had around drawdowns that you would highlight? I know you're not currently looking for one, but I'm curious just for any background color there.

Yes. I mean, the project is performing very strongly, and that's the nature of the dialogue that we have with the DOE. It represents excellent credit quality, which hopefully you can see from our earnings today. We are not dependent on the IRA or 30C remaining in place, so our dialogue with the DOE LPO staff remains very productive. The big strategic news this quarter is that we are no longer reliant on just one source of financing. The proceeds from the commercial bank loan and the gross proceeds from 30C are three times what a quarterly advance would have been from the DOE this quarter. We are very focused on not just being disciplined in our allocation of capital, but also disciplined in the growth of our balance sheet. The good news is that there is really no time limit on when we request advances for eligible CapEx with the DOE loan other than the 5-year availability period. We can incur the CapEx now, and if we want to drop it into the DOE loans at some point within the next 5 years, we can or with the commercial bank facility. Of course, the commercial bank facility also allows us to fund stalls that are not eligible for the DOE loan, which I think is also very attractive. It allows all of our stalls at this point to be leveraged going forward.

I wanted to ask a little bit on the utilization rate this quarter. And I think you mentioned that there was a firmware update that went through. And then in July, you all had, I guess, maybe a significant increase in the utilization rate as that got rectified. Can you maybe just provide a bit more detail about that? Maybe how long the issue was lasting and sort of what you're seeing now coming out of that?

Thanks, Chris. Yes, we did have a faulty firmware update at the beginning of the quarter in Q2, which has been largely addressed at this point. Given that we had these issues, we did proactively take that opportunity to address some legacy charger issues at the same time and invested in maintenance to get a stronger network. We thought that made sense to tackle both issues at the same time. As we said on the call, we can see average throughput per stall for July approach 300, which is quite a bit higher than what we saw in the Q2 average. I think what's really most interesting here is that as an indication of true demand on the network, the average throughput on the chargers where we weren't experiencing these issues was meaningfully higher than the chargers where we were taking these steps on maintenance and the firmware.

And then maybe on the NACS cable, you highlighted some promising initial results from some of the deployments that you've done so far. I guess how are you thinking about deploying those longer term? And what are you looking for that would drive you to accelerate deployment? Or are you already seeing things given the results you've seen so far that would drive you to try to accelerate the deployment of those NACS cables?

Chris, I think the NACS cable and the autonomous vehicle space are both really interesting sources of upside for the company here. We can talk about the AV space maybe later on. But on the NACS, we had a couple of pilot sites in the first half of the year. One was around technology validation, and the second site was geared around whether we can attract more Tesla drivers. I would say that the team is really quite excited about the results. They are early, but what I said on the call is that Tesla driver usage was significantly higher on that site than pre-installation of the NACS cable. I think it's early days, and we have about 30 cables, NACS cables, installed in August. We're looking at 100 for the full year. These are all retrofits before we start doing original equipment connectors next year. If we continue to see what we saw so far, for sure we’ll be looking at our ability to deploy more NACS cables. But we want to be certain about this. Everything we’ve done at EVgo has been very thoughtful and analytically based.

This is Sikuo Yang on for Bill. Your updated build schedule looks quite robust, especially in the '28 to '29 timeframe. Can you help us understand why the builds are so back half weighted if you have the liquidity available to you now? And how do you think about balancing the EV VIO to DCFC ratio across the market versus capturing market share early on from competitors?

Yes. I mean, I think on the build schedule, there are really three things that have increased the schedule versus what we indicated about six months ago after the DOE loan. Those are the commercial bank facility and the fact that we are lowering our CapEx per stall. We've been talking about it for a year, but we've never reflected that lower CapEx per stall in our long-term forecast. Lastly, we are generating quite a significant excess operational cash flow, and we thought for simplicity's sake we would assume that we'd reinvest that cash flow into new stalls. The reality is, as Paul said, we've actually got a reasonable amount of capacity for additional leverage in the back half of this 5-year period. Regardless, we think that's a good enough proxy. That results in a significant increase of stalls that we're now fully capitalized for, which I think is the important point.

Maybe to follow up on an earlier question about utilization. Should we expect to see any kind of seasonality from here on out? And do you maybe expect to see increased usage by Tesla users with the NACS integration driving higher utilization over time? Also, do you recognize that we've seen third-party reports that utilization fell in the second quarter across the U.S. public network. So if there's anything else to call out there, that would be great.

We do have seasonality in charge rates typically. Charge rates tend to be lower in the winter months and higher in the summer months. We saw healthy growth in throughput per stall sequentially, and that was because of rising charge rates. The higher the charge rate, the less the utilization we need for the same kilowatt hours dispensed. Our long-term forecast is actually only 23% to 26% utilization with an 80-kilowatt charge rate, translating to about 60% greater usage per stall than today. If we look back over the last 3 years, our charge rates have actually grown about 20 kilowatts in the last 3 years. Three years ago, only 12% of our chargers were 350 kilowatt. Today, it's about 57%. This is a tailwind we've been talking about, and we’re seeing that come through. So it's not just about utilization; it's really also about utilization and charge rate driving throughput per stall up.

Congratulations on the quarter. A lot of our key questions have been asked, but I wanted to hone in on self-driving technology. As we're ramping up robotaxis and self-driving across the country, curious if you can give us a sense of your strategy to capture as much of this market share as possible. How are you thinking about capturing the autonomous vehicles that are ramping up? What are some plans to differentiate EVgo?

Along with the NACS cable, I think this is one of the two sources of upside in the business that's likely not in anyone's forecast. We think it's a really interesting and potentially significant source of upside if indeed the AV space grows. We have been building and operating dedicated sites for autonomous vehicle partners for a number of years. Last year, we more than doubled the number of stalls at these dedicated sites to serve the space to 110 stalls. Our public disclosure separates it out in our stall disclosure. As Paul said in our guidance, we expect to see more than a doubling of ancillary revenues this year over last year. We think the kind of parties we work with are pleased with the way that we're able to deploy fast charging speeds that are appropriate for those vehicles. We’re excited about the dialogue that we're having with them.

Can you remind us what the key catalysts to look for in Q3 and Q4 are?

We are just focused on executing the business, Andres. We're fully capitalized at this point. The charger issues we talked about, the firmware and our choice to invest in the maintenance of some of these legacy issues is largely behind us. We expect to be wrapped up with that activity by early Q3. Just watch us execute.

Do you think that as you get into next year you'll be positive EBITDA in every quarter?

We're not going to get into the guidance for 2026; it's just so early. But throughput per stall per day continues to rise. That's going to be a big driver of growth in the business, and that's what we're seeing.

You mentioned the economics of some chargers driven by grants being a bit lighter in the beginning of the life cycle. Will we see this in the throughput per stall metrics?

It can a little bit. These are not federal incentives, and the state and utility space is very productive and supportive for EV charging infrastructure build-out. Even if they are a little less productive in the first periods, these are strong returns on capital invested. We expect to deploy capital that's delivering strong returns for shareholders. The pipeline we have, which a lot of other smaller charging companies just don't have, allows us to be flexible with our deployment timing and capitalizes upon grants. Yes, we did move some of our sites around, pushing some from Q3 into Q4, but that was worth it because of the level of offsets.

Is there any targeted marketing for Tesla drivers, given some negative sentiment towards Elon? Any campaigns in that vein?

We try not to get too political about stuff. Our analytical approach is placing NACS cables where we know there are Tesla drivers. We're deploying these NACS cables over the course of this year in locations that will attract Tesla drivers. We have AI agents creating messages to target customers. We believe that deploying faster charging stations and being closer to where they live will yield results. This should be a successful approach.

Can you share any commentary on the strength we had in ancillary revenues in the second quarter?

Yes, we had strong non-charging revenue overall in the quarter, both ancillary and in eXtend. So with the eXtend business, we saw a higher level of equipment sales as our partners sought to bring forward their purchases. A large part of ancillary revenue growth is due to our hubs business. We set our guidance for the year based on better visibility into the hubs business's revenue. We expect ancillary revenues to more than double from last year and a much higher fourth quarter as well due to revenue recognition in the hubs business.

Aren't you adding some expenses to the model? Can you talk a little about your investment priorities for the next couple of years?

The single biggest use of cash in this business is the capital that goes into charging infrastructure. Our focus is on capital efficiencies per stall. The first priority is lowering gross CapEx per stall. We're investing in our next-generation charging architecture, taking ownership of the firmware, which is crucial for the customer experience. We're also investing in marketing and customer outreach through AI agents while continuing our investment in the algorithms behind our site selection.

Can you share about the firmware issue? What kind of a headwind was this on throughputs across the network?

We said that in July, the firmware issues are largely behind us. We did put some stalls into maintenance, as we were experiencing issues in customer experience. If you look at our July throughput, it was approaching 300 kilowatt hours per stall per day, which is significantly higher than what we saw in the average in Q2.

Are you seeing increased competition for rideshare drivers? More people realizing how interesting this business is or the frequency with which these drivers have to charge?

It's hard to know, as many companies in the space are private and small. Rideshare remains a steady contributor to our kilowatt hours. We're thrilled as rideshare is a significant source of upside beyond the electric vehicles to DCFC charging ratio, which is also a macro factor benefitting the business. We're excited about the opportunities here.

I will now turn the call back to Badar Khan, CEO, for closing remarks.

Thank you, everyone.

Ladies and gentlemen, that concludes today's call. You may now disconnect. Thank you, and have a great day.