Earnings Call Transcript - EVGO Q1 2026

Operator, Operator

Good day, and thank you for standing by. Welcome to the EVgo Q1 2026 Earnings Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Heather Davis, Vice President of Investor Relations. Please go ahead.

Heather Davis, Vice President, Investor Relations

Good morning, and welcome to EVgo's first quarter 2026 earnings call. My name is Heather Davis, and I am the Vice President of Investor Relations at EVgo. Joining me on today's call are Badar Khan, EVgo's Chief Executive Officer; and Keefer Lehner, EVgo's Chief Financial Officer. Today, we will be discussing EVgo's first quarter 2026 financial results and our outlook for the year, 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 definitions and applicable reconciliations 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.

Badar Khan, Chief Executive Officer

Thank you, Heather. EVgo's first quarter was in line with our expectations. We delivered solid results, headlined by record first quarter revenues of $110 million, a 45% year-over-year increase. Increased revenues were largely driven by the continued growth of our operating network, eXtend and two new contracts at dedicated AV hubs locations. Throughput on our public network increased to 91 gigawatt hours in the quarter. Stalls in operation across the EVgo network were 5,280 with over 200 new stalls added in Q1. Adjusted EBITDA was negative $7 million in the quarter as we continue to invest in the long-term growth of the business by expanding our operations and deployment teams and our next-generation charging architecture. We ended the quarter with a healthy balance sheet with $150 million in cash. We continue to make great progress on our next-generation charging architecture that we expect to start rolling out to the field by the end of the year. This will not only deliver improved reliability and an enhanced customer experience, but is also expected to lower CapEx per stall and will further underpin our long-term unit economics that we believe will result in recurring adjusted EBITDA generation at the $0.5 billion level by 2030. We've achieved some noteworthy milestones on the next-gen architecture, including completion of the first system build of the power cabinet and dispenser, successful vehicle charging with EVgo-developed controllers and firmware and the start of long-term reliability testing. EVgo has excellent partnerships with rideshare companies who we believe partner with us in part because of our enormous scale advantage versus the dozens of smaller operators and because of the value their drivers get on the EVgo network. Rideshare drivers are already around one quarter of our network throughput and we continue to deepen our partnership with Uber, where we are working towards finalization of an agreement where they guarantee a minimum level of utilization that incentivizes us to build more and larger charging stations in key urban metros. This would not only meet rising demand from the segment, but further accelerate the electrification of rideshare. We have excellent relationships with our site host partners from grocery stores to retail stores. And this quarter, we had a record number of new stalls signed under long-term leases, around three times the same quarter last year, most of which will come online nine to twelve months after signing. This level of site lease signings is an indication of the value our site partners believe EVgo brings and their confidence in our ability to deliver fast-charging stalls as we continue ramping up stall deployments. We have over 100 stalls operational with NACS connectors and continue to target having over 500 NACS stalls available across the network by the end of the year at approximately 15% of our sites. Strategically, by deploying NACS connectors across our network, we are effectively more than doubling our addressable market where drivers with NACS inlets can charge without an adapter. And importantly, we've agreed an amendment to our loan with the DOE Office of Energy Dominance Financing with the current administration, which we believe increases certainty and reduces complexity of go-forward draws and further enhances our already strong liquidity profile. DOE's loan program has historically been designed as a bridge to commercial financeability. In the case of EVgo, this is exactly what happened. Less than a year after closing the DOE loan, we closed our commercial bank financing of up to $300 million. The combination of the amended DOE loan and commercial bank facility gives EVgo the capital it needs to deliver on our previously communicated build targets. EVgo successfully drew under the loan three times in 2025 and this amendment is a reflection of two things: first, the success we've had in securing additional private market funding and acknowledgment that additional debt capital is available to EVgo in the commercial markets. And secondly, it reflects the current administration's view of the importance of this essential infrastructure build-out across the U.S. Our fast-charging infrastructure is performing well and better than originally modeled when the loan was underwritten. Much of the loan remains the same and I'll highlight a few key updates. The size of the loan has been updated to $750 million, which includes $625 million in borrowings and up to $125 million in capitalized interest. EVgo can draw up to 80% of total eligible project costs. However, because the loan is currently overcollateralized, we can draw up to 95% of eligible project costs on an incremental basis until total leverage hits the 65% loan-to-value ratio. A redundant construction risk-related reserve account of $35 million is eliminated because debt funding occurs after stall completion, which reduces restricted cash for EVgo, further improving our liquidity profile. On May 1st, EVgo received our next advance of $81 million, bringing our cash balance on May 1st to $223 million. Other key terms remain the same as the original agreement. The availability period remains five years with a term of 17 years. The interest rate on the loan remains very attractive at treasury plus approximately 1.2% and we're able to request advances quarterly. We already have the strongest balance sheet we've had in many years and these changes result in even more free cash available to be reinvested into the business. EVgo has ample liquidity with the DOE loan and our commercial facility. And as of May 1st, we currently have up to $640 million available principal capacity on our two credit facilities, inclusive of the incremental availability. Between the DOE loan and our commercial credit facility and reinvestment of profits, we expect to have 12,500 to 13,900 EVgo public stalls by the end of 2029, which is unchanged from our previously stated build targets. Given the strong recurring and high-margin cash flows being generated from our charging infrastructure, we believe and the market has acknowledged that this is an infrastructure asset class that should be levered. We will continue to explore other nondilutive financing, all while maintaining a healthy balance sheet to reduce our cost of capital to even lower levels or allow us to grow faster or both. We believe the long-term growth outlook for EVgo remains very attractive. Projections for 2030 EV VIO are near 16 million, representing a 20% CAGR. Recent volatility in the oil market makes the ongoing total cost of ownership for EVs even more compelling for American drivers. Sales of new EVs in Q1 are rebounding from the Q4 lows and are expected to accelerate throughout the year, adding to VIO. The market for used EVs has been very strong and we can see that over the past few quarters, quarterly sales of used EVs has approached the 100,000 units level with Q1 just under half the level of new BEV sales. Q1 used EV sales have more than doubled versus three years ago and are projected to continue to accelerate going forward. Drivers of used EVs are often customers of public charging networks. This is because used car buyers are more likely to live in multifamily housing and multifamily residents tend to charge more frequently on public networks. As a result, we expect to see the serviceable addressable market for public fast charging to increase faster than overall VIO growth, with growth in public fast charging remaining more resilient compared to growth in the overall EV market. Prices for used EVs have nearly reached parity with their internal combustion engine counterparts, given the surge in EV leases following the passage of the IRA. Approximately 1.5 million leases are expected to expire between 2026 and 2028, resulting in a significant number of these cars switching hands from their original owner to an owner that is more likely to utilize public fast charging. As a reference, there's no reason why the battery electric vehicle market over time will not resemble the broader automotive market, where the vast majority of all cars on the road are used. This is a significant tailwind for the business as it was not long ago that a secondary market for EVs did not exist. So not only do we see enormous growth in overall BEV/VIO, but we expect that the average car will be charging more, both of which result in a favorable long-term outlook for EVgo. Now I'll turn it over to Keefer to share more details on the quarter and EVgo's 2026 outlook.

Keefer Lehner, Chief Financial Officer

Thank you, Badar. We ended Q1 with 5,280 stalls in operation, a more than three times increase compared to the end of 2021. We added 200 new total stalls to the network in Q1 2026, including 100 new public EVgo-owned stalls. Our customer base continues to grow and we look forward to welcoming more native NACS drivers to our network as we deploy more stalls in 2026 with NACS connectors. Total energy dispensed on EVgo's network was 373 gigawatt hours for the trailing 12 months, a 21% increase from the TTM period ended Q1 2025. Charging gross margin was 39% over the last 12 months, expanding by two percentage points over the prior year's TTM. Adjusted EBITDA margin improved to 3% on a trailing 12-month basis as we get closer to the operational inflection point where charging network gross profit alone is expected to cover all of our G&A costs. Our throughput on the public network during the first quarter was 91 gigawatt hours, a 10% increase compared to last year. Throughput per stall per day was 257 kilowatt hours in the quarter. Q1 2026 throughput was impacted by the ongoing maturation of the record high number of new stalls deployed in Q4 2025 as we elected to select sites with slightly lower throughput potential in order to capture a higher amount of state grant funding as expected lifetime economics were attractive. It was also driven by lower usage of our legacy equipment, several severe winter storms as well as seasonally lower vehicle miles traveled. Revenue for Q1 2026 was $110 million, which represents a 45% year-over-year increase with growth across all three revenue categories. Total charging network revenue was $56 million, an 18% increase versus prior year, driven primarily by a larger operating network, representing our 17th consecutive quarter of double-digit year-over-year charging revenue growth. eXtend revenue was $33 million, delivering growth of 41% over the same period in 2025, driven by an increase in construction revenues and equipment sales. And AV and ancillary revenue was $21 million, up over 300%, driven by gain on sales for two dedicated AV hubs locations. It's important to note that almost half of the anticipated 2026 AV ancillary revenue was recognized in the first quarter. Charging network gross profit was $20 million, a 15% increase compared to the prior year. Charging network gross margin was 36%, a percentage point lower than last year. First quarter adjusted gross profit was $30 million, up 17% against the prior year. Adjusted gross margin was 27% in Q1, a decrease of 660 basis points over the same period in 2025, driven primarily by higher non-charging revenue contribution. Adjusted G&A for the quarter was $37 million, an increase of 19% compared to prior year as we are investing in network scale and accelerating stall deployment. As a percentage of revenue, the first quarter of 2026 was 34% compared to 42% in the first quarter of 2025. The above resulted in an adjusted EBITDA loss of $7 million in the first quarter of 2026. Turning to our outlook and guidance for 2026. Our new stall guidance remains unchanged from the last quarter with 1,400 to 1,650 new stalls expected to be added over the year, including 350 to 400 eXtend stalls, approximately 100 of which were deployed in Q1. The growth in public stalls deployed is expected to be around 70% year-over-year and the vast majority of the 2026 public build plan is expected to be deployed in the back half of the year with a significant weighting towards Q4. We are reaffirming our recently provided 2026 total revenue and adjusted EBITDA guidance of $410 million to $470 million and negative $20 million to positive $20 million, respectively. Charging network revenue should be around 70% of 2026 total revenue. Charging revenue is expected to increase each quarter sequentially and on a year-over-year basis. At the midpoint, charging network revenue is expected to be up 40%. eXtend revenue for 2026 is expected to be $80 million to $90 million. AV and ancillary revenues are anticipated to be $40 million to $50 million for full year 2026 with just under half that amount realized in Q1. Adjusted G&A for the year is still anticipated to be $150 million to $155 million as we continue to invest in our scale and deployment of new chargers. Q1 and Q4 are expected to be the strongest quarters for the non-charging business, eXtend and AV and ancillary, representing approximately 75% of our non-charging revenues. As a result, we expect Q2 to be our softest quarter of the year with revenue and margins leading to an estimated Q2 revenue of $75 million to $85 million and an adjusted EBITDA loss of $12.5 million to $7.5 million. We expect modest sequential improvement into Q3. Q4 is expected to be our strongest quarter of the year by a wide margin. We should drive improved incremental margins and sustainable profitability on a go-forward basis. With that, we will open the call to Q&A.

Operator, Operator

Our first question will come from the line of Chris Dendrinos of RBC Capital Markets.

Christopher Dendrinos, Analyst, RBC Capital Markets

Maybe to start out here, I'm looking at the charging network performance and two things stand out. I think you talked through a little bit of the dynamics around the lower throughput this quarter, but maybe talk to the cadence of that increase going through the rest of the year? And then separately, on the margin performance in that segment as well. Are you seeing some of the leverage or operational leverage points that you're expecting to see in the longer-term outlook?

Badar Khan, Chief Executive Officer

Let me touch on the first point and reemphasize that for the quarter, daily throughput per stall is about 3.5% lower than last year. That's driven by three or four factors, none of which are long-term issues. As we said on the last earnings call, we had more severe winter storms this quarter than in the same quarter last year. We also had a record number of stalls deployed in Q4 that typically take three to six months to ramp up, so that's a higher impact this quarter than prior quarters because of the record deployment. Many of these Q4 deployments in 2025 came with much higher CapEx offsets, which is great from a returns perspective, but they also come with lower productivity in throughput for the first year or two. One additional factor is lower throughput from our legacy 50 and 100-kilowatt stalls, especially as we add many faster 350-kilowatt chargers across the network. The good news is that in Q1 about 65% of our throughput is already from 350-kilowatt machines, up from the low-20% range three years ago, and it will be in the mid-90% range by 2030. So in the long term, the performance of sub-350 machines becomes immaterial. None of these factors are long-term issues. For the full year, we expect daily throughput per stall to grow versus last year, ranging from mid-single-digit percent at the low end to high-teens percent at the high end, unchanged from last quarter. Keefer, do you want to address margin?

Keefer Lehner, Chief Financial Officer

To follow up on the second part of your question, we did experience slightly lower charging network gross margin in Q1. It was down one percentage point year-over-year. Average selling price in Q1 came in around $0.61 on a fully loaded basis, which was offset by increased energy costs and elevated payment costs given some of the noise we experienced in the quarter. We don't see that as a structural or long-term shift in the cost structure. Last quarter, we provided a long-term outlook of 50% to 60% gross margin at the charging network level, and we wouldn't expect that outlook to change as we look forward.

Christopher Dendrinos, Analyst, RBC Capital Markets

Got it. And then as a follow-up, on the NACS deployment, I think previously you spoke to slightly lower charging rates on that segment of the market initially. Are you still seeing that? Or is adoption on the NACS portion of the network increasing?

Badar Khan, Chief Executive Officer

We are taking a step back with NACS. We're very excited about deploying NACS across the network because effectively we double our addressable market for people charging without an adapter, which is the majority of drivers. We deployed a small NACS pilot of about 100 stalls in the fall of last year, and since then throughput on those NACS stalls has risen. That's continued to improve since our last update. NACS stalls are still below the throughput level we see in our CCS stalls, and it takes customers who have not been used to charging in our network some time to become familiar with it. Tesla drivers continue to charge at a higher rate every month. We intend to continue the rollout of NACS cables. We'll add about 400 more to get to around 500, which will be approximately 15% of our sites, broadly spread across Q2, Q3 and Q4. We expect that within two to three years most of our sites will have both NACS and CCS connectors, at which point the addressable market will be effectively doubled.

Operator, Operator

Our next question will come from Andres Sheppard of Cantor Fitzgerald.

Anandan (for Andres Sheppard), Analyst, Cantor Fitzgerald

This is Anandan for Andres. Congrats on the quarter. I wanted to touch on AV charging. With Uber partnering with a variety of OEMs for EVs and EVgo named as a partner as well, could you give us some granularity on what you expect for charging demand from AVs?

Badar Khan, Chief Executive Officer

The autonomous vehicle space is an interesting and potentially significant source of upside to our forecast. If the AV space grows as many expect, it could provide substantial demand. We've been operating dedicated sites for autonomous vehicle partners for several years. We have reported dedicated hubs and stores for AV partners for over a year now. We expect to add another 50 to 75 stalls. We had a gain on sale from some of the stores that were in operation in Q1. We're still in the infancy of this market opportunity and are evaluating the best contract structures. The contracts we have today are long-term contracted cash flow, representing good margin with limited risk for us. As this grows, we'll consider different contract structures that make sense for both EVgo and the AV partners or continue with our existing approach. Over the mid- to long-term, just as we've become a partner of choice for rideshare companies given our scale and reliability, we expect there is no reason why we would not become a partner of choice for AV companies.

Anandan (for Andres Sheppard), Analyst, Cantor Fitzgerald

I appreciate the detail. As a quick follow-up on the DOE loan amendment: you eliminated the cash trap and received an $81 million draw on May 1. Could you walk us through how that amendment changes your practical liquidity, the timing of draws and your ability to fund the accelerated owned and operated build-out?

Badar Khan, Chief Executive Officer

I'm pleased with where we are with this DOE loan. If you compare today to this time last year, things have changed materially. A year ago we had $170 million of cash on the balance sheet in Q1 and a $1 billion loan with the prior administration that was largely undrawn. Today, we have an agreement signed with the current administration and a productive collaborative relationship. The loan has been drawn on multiple times. The principal is reduced by $425 million, and since last year we've also secured a commercial bank facility for up to $300 million. More importantly, we've demonstrated the bankability of the company with continued inbound interest in financing the business. As of May 1st, we have $223 million in cash, including the $81 million advance, and up to $640 million of remaining capacity between the two facilities. That gives us enormous runway to continue building out infrastructure toward generating adjusted EBITDA in the hundreds of millions. The amended terms improve liquidity on top of an already strong profile. We will be disciplined in capital allocation; the timing of advances will be driven by balance sheet needs, which are strong today. One great attribute of this loan is there is no timing limit on when we request advances other than the five-year availability period. Between the DOE loan and the commercial facility, and with the higher advance rates, it's roughly another $20,000 per stall of advance capacity versus before. We have no concerns about financing the previously discussed build program or near-term liquidity.

Operator, Operator

Our next question will be coming from the line of Chris Pierce of Needham.

Christopher Pierce, Analyst, Needham

Badar, I want to get a sense on the EV owners you highlighted in the deck. Is there something specific you need to do to market toward these customers, or are they naturally a sweet spot for the network? Have you seen any ramp in new customers from used EV buyers, or is it too early?

Badar Khan, Chief Executive Officer

We have a productive customer engagement platform and the largest number of charging sessions of any public network other than Tesla and Electrify America. We've invested in identifying battery electric vehicle drivers and reaching out to them. We've been deploying AI agents that increase our sophistication in customer engagement and drive strong engagement and demand on our network. There's no distinction in our approach between used EV drivers and new EV drivers; we deploy the same methodology. The important point is not just growth in BEV VIO, but how many of those vehicles charge at public fast chargers. Rideshare electrification, faster charge rates, and vehicles shifting from new to used all increase public charging demand. Used EV owners tend to live in multifamily housing and our data shows drivers in multifamily housing charge 1.5 times more than those in single-family homes. Today there are roughly six million EVs on the road, with about one million used EVs; leases rolling off after the IRA could increase used EVs meaningfully in the coming years. We think that as the market matures, EVs will resemble the broader automotive market where the majority of cars are used, which is a strong tailwind for our business.

Christopher Pierce, Analyst, Needham

Okay. Perfect. One last question. If you look at the model, there's the core charging business and the eXtend construction business, which is rolling off over time. As AV and ancillary grow, could that become a construction business similar to eXtend with gains on sale, or will it become a new revenue line that requires separate guidance? When can charging revenue be the cleaner primary story for new investors?

Badar Khan, Chief Executive Officer

You're right that eXtend has been a valuable source of revenue and will continue to be into 2026 and part of 2027, but its majority revenue will decline in 2027 and convert to a smaller O&M business. Charging revenue has been growing consistently — this was our 17th consecutive quarter of year-over-year charging revenue growth — and we expect charging network revenue to continue growing quarter-over-quarter for several years. The AV opportunity is interesting because a large amount of capital will be required across vehicles, technology, fleet operations and charging. We have capital available for part of that requirement, specifically charging infrastructure, and we're well positioned as a large player. The contracts we've signed to date are long-term with contracted cash flow, which provides stable margin. As AV grows, exposure could look more like our regular charging business — utilization- and throughput-driven — rather than a construction business like eXtend. We're in the early innings, but we've built a competitive advantage in rideshare and see no reason we wouldn't be a partner of choice for AV companies as well.

Operator, Operator

I would now like to turn the conference back to Badar Khan for closing remarks.

Badar Khan, Chief Executive Officer

Thank you, everyone. EVgo had another strong and record quarter. We're expecting 2026 to be an inflection year with around 70% growth in new public stalls added, supported by strong site host and rideshare partnerships. We continue to see a very strong long-term growth outlook and we're pleased to have reached an amended agreement with the DOE, allowing us to scale the company to that $0.5 billion or more in adjusted EBITDA by 2030. I look forward to sharing our progress with you on our future calls. Thanks very much, everyone.

Operator, Operator

This concludes today's program. Thank you for participating. You may now disconnect.