Richard Newstead/Moment via Getty Images EVgo (NASDAQ:EVGO) is a leading player in the US electric vehicle / EV charging space, operating a network of over 2,700 fast charging stations with over 785,000 customer accounts as of September 2023. They focus on DC fast charging, which can significantly reduce charging time compared to regular outlets. The company went public on NASDAQ in 2020 at $9.8 on debut day. However, partly due to the post-pandemic challenging macro situation, all-time share performance ha ...

LOS ANGELES--(BUSINESS WIRE)--EVgo Inc. (NASDAQ: EVGO), one of the nation’s largest public fast charging networks for electric vehicles (EVs), today announced the awardees of its second annual National EV Charging Recognition Program, presented by Connect the Watts™. Launched in 2022, the program celebrates leaders in deployment excellence, recognizing EV Charging Heroes from all areas of the EV charging ecosystem based on an evaluation of their commitment to fast charger deployment via innovative actions, ...

LOS ANGELES--(BUSINESS WIRE)--EVgo Inc. (Nasdaq: EVGO) (“EVgo” or the “Company”), one of the nation’s largest public fast charging networks for electric vehicles (EVs), today announced certain preliminary financial and operating results for fiscal year 2023. The Company announced preliminary 2023 throughput of approximately 130 gigawatt-hours (“GWh”). Utilization on the EVgo network in December 2023 was over 19% up from 15% in September 2023. EVgo ended 2023 with over 3,500 stalls in operation or under cons ...

In 2023, EV charging stocks had difficulty, led by ChargePoint (NYSE:CHPT) which lost more than 75% of its value. ChargePoint saw its revenues fall by 12% during the most recent quarter with losses nearly doubling. Combine that with greater troubles across the EV sector, and it’s easy to understand the reason it fell dramatically.Regardless, the EV charging sector is bigger than ChargePoint alone. The necessity of building out EV infrastructure remains. Currently, the sector is experiencing a common phase t ...

LOS ANGELES--(BUSINESS WIRE)--EVgo Inc. (NASDAQ: EVGO) (“EVgo” or the “Company”), one of the nation’s largest public fast charging networks for electric vehicles (EVs), today announced an extension of its agreement with Toyota Motor North America, Inc. (Toyota) to provide drivers who purchase or lease a new 2024 bZ4x with one year of complimentary fast charging on EVgo’s nationwide network. First announced in February 2022, the ongoing collaboration between EVgo and Toyota to offer complimentary charging ...

[Cautionary Statement Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) This section highlights forward-looking statements, their inherent risks, uncertainties, and assumptions, cautioning against reliance - This section highlights that the report contains forward-looking statements, which are not guarantees of future performance and are subject to various risks, uncertainties, and assumptions Readers should not rely on them as predictions of future events[7](index=7&type=chunk)[10](index=10&type=chunk) - Key risks include changes affecting EVgo's business, cyclical demand, revenue fluctuations, capital market disruptions, competition, ability to adapt to industry standards, EV market growth, expansion capabilities, new feature development, integration of acquisitions, personnel retention, legal risks, dependence on third-party contractors, capital access, supply chain issues, regulatory changes, partnerships, intellectual property, and general economic/political conditions[7](index=7&type=chunk)[8](index=8&type=chunk)[11](index=11&type=chunk) [Frequently Used Terms](index=6&type=section&id=Frequently%20Used%20Terms) This section defines key terms used throughout the Quarterly Report, including 'Board of Directors,' 'DCFC,' 'EV,' and 'OEM' - This section defines key terms used throughout the Quarterly Report, such as 'Board of Directors,' 'Business Combination Agreement,' 'Class A common stock,' 'DCFC' (direct current fast charging), 'EV' (electric vehicle), 'OEM' (original equipment manufacturer), 'SEC' (U.S Securities and Exchange Commission), and various company-specific entities like 'EVgo Inc.' and 'EVgo OpCo'[13](index=13&type=chunk)[14](index=14&type=chunk)[15](index=15&type=chunk)[16](index=16&type=chunk)[17](index=17&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk) [PART I. FINANCIAL INFORMATION](index=10&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents EVgo Inc.'s unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements](index=10&type=section&id=Item%201.%20Financial%20Statements) This section presents EVgo Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations and comprehensive income (loss), statements of stockholders' deficit, and statements of cash flows, along with detailed notes explaining significant accounting policies, revenue recognition, lease accounting, and other financial details for the periods ended September 30, 2023, and December 31, 2022 [Condensed Consolidated Balance Sheets](index=10&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents EVgo Inc.'s unaudited condensed consolidated balance sheets as of September 30, 2023, and December 31, 2022 Condensed Consolidated Balance Sheets (in thousands) | Metric | Sep 30, 2023 (unaudited) | Dec 31, 2022 | | :-------------------------------- | :----------------------- | :----------- | | Total assets | $817,297 | $729,724 | | Total liabilities | $248,862 | $212,598 | | Redeemable noncontrolling interest | $661,804 | $875,226 | | Total stockholders' deficit | $(93,369) | $(358,100) | - Total assets increased by **$87.6 million** (**12.0%**) from December 31, 2022, to September 30, 2023, primarily driven by an increase in property, equipment, and software, net[45](index=45&type=chunk) - Total liabilities increased by **$36.3 million** (**17.0%**) over the nine-month period, with significant increases in accounts payable and noncurrent deferred revenue[45](index=45&type=chunk) - Stockholders' deficit improved significantly, reducing from **$(358.1) million** to **$(93.4) million**, largely due to an increase in additional paid-in capital[47](index=47&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) This section presents EVgo Inc.'s unaudited condensed consolidated statements of operations and comprehensive income (loss) for the specified periods Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :------------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Revenue | $35,107 | $10,509 | $110,959 | $27,285 | | Gross profit (loss) | $604 | $(3,208) | $6,174 | $(4,552) | | Operating loss | $(36,372) | $(40,046) | $(112,591) | $(107,015) | | Net loss | $(28,257) | $(50,922) | $(98,877) | $(89,191) | | Net loss attributable to Class A common stockholders | $(9,721) | $(13,218) | $(29,823) | $(23,138) | | Net loss per share, basic and diluted | $(0.09) | $(0.19) | $(0.34) | $(0.33) | - Revenue for the three months ended September 30, 2023, increased by **234% YoY** to **$35.1 million**, and for the nine months, it increased by **307% YoY** to **$111.0 million**, indicating **strong growth**[50](index=50&type=chunk) - Gross profit turned positive for both the three-month (**$0.6 million**) and nine-month (**$6.2 million**) periods in 2023, compared to losses in the prior year, reflecting **improved operational efficiency**[50](index=50&type=chunk) - Net loss decreased for the three months ended September 30, 2023, to **$(28.3) million** from **$(50.9) million** YoY, but increased for the nine months to **$(98.9) million** from **$(89.2) million** YoY[50](index=50&type=chunk) [Condensed Consolidated Statements of Stockholders' Deficit](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Deficit) This section presents EVgo Inc.'s unaudited condensed consolidated statements of stockholders' deficit for the specified periods Condensed Consolidated Statements of Stockholders' Deficit (in thousands) | Metric | Dec 31, 2022 | Sep 30, 2023 | | :-------------------------------- | :----------- | :----------- | | Total Stockholders' Deficit | $(358,100) | $(93,369) | | Class A Common Stock (shares) | 70,248 | 102,721 | | Additional Paid-In Capital | $17,533 | $142,543 | | Accumulated Deficit | $(375,660) | $(235,942) | - The total stockholders' deficit significantly decreased from **$(358.1) million** at December 31, 2022, to **$(93.4) million** at September 30, 2023, primarily due to substantial increases in additional paid-in capital from equity offerings[51](index=51&type=chunk) - Additional paid-in capital increased by **$125.0 million**, largely from the issuance of Class A common stock under an equity offering (**$123.4 million net**) and the ATM program (**$5.7 million net**)[51](index=51&type=chunk) - The accumulated deficit improved from **$(375.7) million** to **$(235.9) million**, despite ongoing net losses, due to adjustments related to redeemable noncontrolling interest[51](index=51&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=16&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents EVgo Inc.'s unaudited condensed consolidated statements of cash flows for the specified periods Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :----------------------------------- | :-------------------------- | :-------------------------- | | Net cash used in operating activities | $(29,781) | $(57,337) | | Net cash used in investing activities | $(123,843) | $(133,322) | | Net cash provided by financing activities | $135,840 | $6,458 | | Net decrease in cash, cash equivalents and restricted cash | $(17,784) | $(184,201) | - Net cash used in operating activities significantly decreased by **$27.6 million** (**48.1%**) to **$(29.8) million** for the nine months ended September 30, 2023, compared to the prior year, primarily due to increased cash flows from deferred revenue and operating income[60](index=60&type=chunk)[248](index=248&type=chunk) - Net cash provided by financing activities increased substantially to **$135.8 million**, up from **$6.5 million** in the prior year, driven by proceeds from Class A common stock issuances through an equity offering and the ATM program[60](index=60&type=chunk)[250](index=250&type=chunk) - The net decrease in cash, cash equivalents, and restricted cash was **$(17.8) million** for the nine months ended September 30, 2023, a significant improvement from the **$(184.2) million** decrease in the prior year[60](index=60&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=18&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes explaining significant accounting policies, revenue recognition, lease accounting, and other financial details [Note 1 – Description of Business and Nature of Operations](index=18&type=section&id=Note%201%20%E2%80%93%20Description%20of%20Business%20and%20Nature%20of%20Operations) This note describes EVgo Inc.'s business as an owner and operator of a public DC fast charging network for EVs in the U.S - EVgo Inc owns and operates a public direct current (DC) fast charging network for electric vehicles (EVs) in the U.S., partnering with OEMs, fleet operators, retail hosts, and governments[63](index=63&type=chunk) - The Company was incorporated in Delaware on August 4, 2020, and consummated a business combination with CRIS on July 1, 2021, adopting an 'Up-C' structure[65](index=65&type=chunk)[66](index=66&type=chunk) - As of September 30, 2023, EVgo Holdings held **65.4%** of EVgo OpCo Units and Class B common stock, representing a **67.4%** voting interest in the Company[68](index=68&type=chunk) [Note 2 – Summary of Significant Accounting Policies](index=19&type=section&id=Note%202%20%E2%80%93%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines significant accounting policies, including estimates and recent adoptions, used in financial statement preparation - The condensed consolidated financial statements are unaudited and prepared in accordance with GAAP, consolidating the accounts of the Company and its subsidiaries[70](index=70&type=chunk) - Significant estimates include variable consideration for revenue, depreciable lives of assets, asset retirement obligations, fair value of operating lease assets/liabilities, share-based compensation, earnout liability, and warrant liabilities[73](index=73&type=chunk) - The Company adopted ASU 2021-08 (Business Combinations) and ASC 326 (Credit Losses) prospectively on January 1, 2023, with no material impact on financial statements[82](index=82&type=chunk)[83](index=83&type=chunk) - As of September 30, 2023, two customers comprised **41.5%** of net accounts receivable, and one customer represented **29.6%** of revenue for the three months ended September 30, 2023[76](index=76&type=chunk) [Note 3 – Revenue Recognition](index=22&type=section&id=Note%203%20%E2%80%93%20Revenue%20Recognition) This note details EVgo's revenue recognition policies and disaggregates revenue by type for the specified periods Revenue Disaggregation (in thousands) | Revenue Type | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Charging revenue, retail | $13,357 | $5,176 | $29,057 | $13,067 | | Charging revenue, commercial | $4,042 | $678 | $8,175 | $2,041 | | Charging revenue, OEM | $1,477 | $252 | $3,015 | $592 | | Regulatory credit sales | $1,807 | $1,178 | $4,635 | $4,684 | | Network revenue, OEM | $1,114 | $448 | $4,555 | $1,825 | | eXtend revenue | $10,475 | $1,543 | $54,048 | $1,754 | | Ancillary revenue | $2,835 | $1,234 | $7,474 | $3,322 | | **Total revenue** | **$35,107** | **$10,509** | **$110,959** | **$27,285** | - Total revenue for the three months ended September 30, 2023, increased by **234% YoY** to **$35.1 million**, and for the nine months, it increased by **307% YoY** to **$111.0 million**[85](index=85&type=chunk) - eXtend revenue showed the most significant growth, increasing by **579% YoY** to **$10.5 million** for the three months and by **over 999% YoY** to **$54.0 million** for the nine months, driven by increased projects and equipment sales[85](index=85&type=chunk) - Contract liabilities increased by **$19.2 million** (**33%**) to **$77.0 million** as of September 30, 2023, reflecting the timing difference between cash receipt and performance obligation satisfaction[86](index=86&type=chunk) [Note 4 – Lease Accounting](index=26&type=section&id=Note%204%20%E2%80%93%20Lease%20Accounting) This note describes EVgo's operating lease agreements for charging stations, offices, and warehouses, and presents associated costs and income - EVgo has operating lease agreements with Site Hosts for charging stations and leases offices/warehouses, with terms generally ranging from one to 15 years[89](index=89&type=chunk) Operating Lease Costs (in thousands) | Lease Cost Type | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Operating lease costs (Cost of sales) | $1,731 | $824 | $4,522 | $1,915 | | Operating lease costs (G&A) | $1,073 | $1,036 | $3,513 | $2,316 | | Variable lease costs (Cost of sales) | $559 | $122 | $1,376 | $309 | | Variable lease costs (G&A) | $44 | $34 | $101 | $70 | | Short-term lease costs | $10 | $24 | $69 | $68 | | **Total lease costs** | **$3,417** | **$2,040** | **$9,581** | **$4,678** | - Total lease costs increased by **67.5% YoY** for the three months and **104.8% YoY** for the nine months ended September 30, 2023, reflecting business expansion[90](index=90&type=chunk) Operating Lease Income (in thousands) | Lease Income Type | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :---------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Fixed lease income | $542 | $152 | $1,534 | $616 | | Sublease income | $403 | $99 | $937 | $117 | | **Total operating lease income** | **$945** | **$251** | **$2,471** | **$733** | [Note 5 – Property, Equipment and Software, Net](index=29&type=section&id=Note%205%20%E2%80%93%20Property,%20Equipment%20and%20Software,%20Net) This note details EVgo's property, equipment, and software, net, including changes and related depreciation and amortization expenses Property, Equipment and Software, Net (in thousands) | Asset Category | Sep 30, 2023 | Dec 31, 2022 | | :------------------------------------ | :----------- | :----------- | | Total property, equipment and software | $477,481 | $357,710 | | Less accumulated depreciation and amortization | $(79,554) | $(49,598) | | **Property, equipment and software, net** | **$397,927** | **$308,112** | - Net property, equipment, and software increased by **$89.8 million** (**29.2%**) from December 31, 2022, to September 30, 2023, primarily due to increased charging station installation costs and equipment[95](index=95&type=chunk) Depreciation, Amortization, Impairment, and Loss on Disposal (in thousands) | Expense Type | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :------------------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Depreciation of property and equipment (Cost of sales) | $10,328 | $6,508 | $27,214 | $16,493 | | Amortization of capital-build liability | $(1,709) | $(1,321) | $(4,970) | $(3,751) | | Impairment expense | $1,789 | $1,254 | $7,614 | $3,248 | | **Total** | **$12,323** | **$7,528** | **$34,475** | **$18,984** | [Note 6 – Intangible Assets, Net](index=29&type=section&id=Note%206%20%E2%80%93%20Intangible%20Assets,%20Net) This note details EVgo's intangible assets, net, including gross carrying amounts, accumulated amortization, and remaining amortization periods Intangible Assets, Net (in thousands, as of Sep 30, 2023) | Asset Category | Gross Carrying Amount | Accumulated Amortization | Net Carrying Value | Remaining Weighted Average Amortization Period | | :--------------------- | :-------------------- | :----------------------- | :----------------- | :--------------------------------------------- | | Site Host relationships | $41,500 | $(12,829) | $28,671 | 8.3 years | | Customer relationships | $19,000 | $(15,154) | $3,846 | 1.0 years | | Developed technology | $14,000 | $(3,408) | $10,592 | 10.8 years | | User base | $11,000 | $(6,121) | $4,879 | 1.8 years | | Trade name | $5,000 | $(1,087) | $3,913 | 12.8 years | | **Total** | **$90,500** | **$(38,599)** | **$51,901** | | - Total net intangible assets were **$51.9 million** as of September 30, 2023, with Site Host relationships being the largest component at **$28.7 million**[96](index=96&type=chunk) - Amortization of intangible assets was **$2.9 million** for both the three months ended September 30, 2023 and 2022, and **$8.7 million** for both the nine months ended September 30, 2023 and 2022[96](index=96&type=chunk) [Note 7 – Asset Retirement Obligations](index=31&type=section&id=Note%207%20%E2%80%93%20Asset%20Retirement%20Obligations) This note explains EVgo's asset retirement obligations, representing estimated costs to remove charging stations and restore sites - Asset retirement obligations represent the estimated costs to remove charging stations and restore sites[97](index=97&type=chunk) Asset Retirement Obligation Activity (in thousands, 9 Months Ended Sep 30, 2023) | Activity | Amount | | :-------------------------------- | :------- | | Balance as of December 31, 2022 | $15,473 | | Liabilities incurred | $2,606 | | Accretion expense | $1,665 | | Change in estimate | $(14) | | Liabilities settled | $(375) | | **Balance as of September 30, 2023** | **$19,355** | - The balance of asset retirement obligations increased by **$3.9 million** (**25.1%**) to **$19.4 million** as of September 30, 2023, primarily due to newly incurred liabilities and accretion expense[97](index=97&type=chunk) [Note 8 – Equity](index=31&type=section&id=Note%208%20%E2%80%93%20Equity) This note details changes in EVgo's equity, including proceeds from Class A common stock issuances under ATM Program and equity offerings - EVgo sold 889,340 shares of Class A common stock under its ATM Program in April 2023, generating net proceeds of approximately **$5.7 million**[98](index=98&type=chunk) - The Company completed an underwritten equity offering of 30,123,129 shares of Class A common stock, generating net proceeds of **$123.4 million** during the three months ended June 30, 2023[99](index=99&type=chunk) - Issuance costs of **$0.4 million** for the nine months ended September 30, 2023, were recorded as a reduction of additional paid-in capital[100](index=100&type=chunk) [Note 9 – Commitments and Contingencies](index=31&type=section&id=Note%209%20%E2%80%93%20Commitments%20and%20Contingencies) This note outlines EVgo's significant commitments and contingencies, including infrastructure agreements and purchase order commitments - EVgo has a Pilot Infrastructure Agreement with Pilot Travel Centers LLC and General Motors LLC to build, operate, and maintain **up to 2,000 DC fast charging stalls**, with construction milestones and potential liquidated damages for delays[101](index=101&type=chunk)[102](index=102&type=chunk) - The GM Agreement requires EVgo to install **3,250 charger stalls** by March 31, 2026, with **44%** by December 31, 2023, and maintain **95% network availability**, facing potential liquidated damages of **up to $15.0 million** for non-compliance[105](index=105&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk) - EVgo has a Nissan Agreement for joint marketing, charging credit programs, and a capital-build program, with potential penalties for failing to meet the Build Schedule[109](index=109&type=chunk) - As of September 30, 2023, EVgo had **$76.0 million** in short-term purchase order commitments for charging equipment and **$14.7 million** in other material commitments[115](index=115&type=chunk) [Note 10 – Fair Value Measurements](index=37&type=section&id=Note%2010%20%E2%80%93%20Fair%20Value%20Measurements) This note provides information on fair value measurements of EVgo's financial assets and liabilities, including cash, earnout, and warrant liabilities Fair Value of Financial Assets and Liabilities (in thousands) | Item | Level | Sep 30, 2023 Balance | Level | Dec 31, 2022 Balance | | :-------------------------------- | :---- | :------------------- | :---- | :------------------- | | Cash equivalents (Money market funds) | 1 | $201,125 | 1 | $150,125 | | Earnout liability | 3 | $855 | 3 | $1,730 | | Warrant liability – Public Warrants | 1 | $5,381 | 1 | $10,164 | | Warrant liability – Private Placement Warrants | 3 | $1,138 | 2 | $2,140 | | **Total liabilities** | | **$7,374** | | **$14,034** | - The fair value of earnout liability decreased from **$1.7 million** to **$0.9 million**, and warrant liabilities decreased from **$12.3 million** to **$6.5 million**, primarily due to market-to-market adjustments[117](index=117&type=chunk)[169](index=169&type=chunk) - Private Placement Warrants were valued using a Monte Carlo simulation methodology (Level 3) as of September 30, 2023, with a stock price of **$3.38** and expected volatility of **71%**[120](index=120&type=chunk) [Note 11 – Income Taxes](index=40&type=section&id=Note%2011%20%E2%80%93%20Income%20Taxes) This note details EVgo's provision for income taxes, including a full valuation allowance against net deferred tax assets - EVgo's provision for income taxes primarily relates to federal and state jurisdictions where business is conducted, specifically concerning its ownership in EVgo OpCo[122](index=122&type=chunk) - A full valuation allowance has been established against net deferred tax assets as of September 30, 2023, and December 31, 2022, due to significant uncertainty regarding future realization of tax benefits[123](index=123&type=chunk) - There were no unrecognized tax benefits for uncertain tax positions as of September 30, 2023, and December 31, 2022[124](index=124&type=chunk) [Note 12 – Tax Receivable Agreement](index=41&type=section&id=Note%2012%20%E2%80%93%20Tax%20Receivable%20Agreement) This note describes EVgo's Tax Receivable Agreement (TRA), obligating the Company to pay TRA Holders 85% of net cash savings - EVgo entered into a Tax Receivable Agreement (TRA) in connection with the CRIS Business Combination, obligating the Company Group to pay TRA Holders **85%** of net cash savings from certain tax basis increases[125](index=125&type=chunk) - Payments under the TRA are expected to be substantial and could be accelerated upon early termination or change of control, potentially impacting EVgo's liquidity[247](index=247&type=chunk) - As of September 30, 2023, no transactions have occurred that would trigger the recording of a liability under the TRA[126](index=126&type=chunk) [Note 13 – Net Loss Per Share](index=41&type=section&id=Note%2013%20%E2%80%93%20Net%20Loss%20Per%20Share) This note presents the calculation of EVgo's net loss per share for Class A common stockholders, including basic and diluted figures Net Loss Per Share (in thousands, except per share data) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :------------------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net loss attributable to Class A common stockholders | $(9,721) | $(13,218) | $(29,823) | $(23,138) | | Weighted average common stock outstanding, basic and diluted | 102,687 | 68,621 | 86,449 | 68,507 | | **Net loss per share – basic and diluted** | **$(0.09)** | **$(0.19)** | **$(0.34)** | **$(0.33)** | - Net loss per share for Class A common stockholders improved to **$(0.09)** for the three months ended September 30, 2023, from **$(0.19)** in the prior year, but slightly deteriorated to **$(0.34)** for the nine months from **$(0.33)**[127](index=127&type=chunk) - Potentially dilutive securities, including Public Warrants, Private Placement Warrants, RSUs, and stock options, totaling **27.6 million shares** (2023) and **21.9 million shares** (2022), were excluded from diluted EPS calculation due to their antidilutive effect[129](index=129&type=chunk) [Note 14 – Share-Based Compensation](index=43&type=section&id=Note%2014%20%E2%80%93%20Share-Based%20Compensation) This note details EVgo's share-based compensation expense, including the impact of RSU and stock option awards Total Share-Based Compensation Expense (in thousands) | Expense Category | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Cost of sales | $58 | $28 | $121 | $65 | | General and administrative expenses | $6,043 | $6,865 | $20,902 | $17,376 | | **Total share-based compensation expense** | **$6,101** | **$6,893** | **$21,023** | **$17,441** | - Total share-based compensation expense decreased by **11.5% YoY** for the three months ended September 30, 2023, but increased by **20.5% YoY** for the nine months, primarily in general and administrative expenses[130](index=130&type=chunk) - A transition agreement with the former CEO, Catherine Zoi, resulted in a modification of RSU and stock option awards, with an incremental fair value of **$4.2 million** recognized over the period to her separation date[130](index=130&type=chunk) - As of September 30, 2023, unrecognized share-based compensation expense was approximately **$2.6 million** for stock options (over **1.5 years**) and **$29.4 million** for unvested RSUs (over **1.5 years**)[133](index=133&type=chunk)[136](index=136&type=chunk) [Note 15 – Redeemable Noncontrolling Interest](index=47&type=section&id=Note%2015%20%E2%80%93%20Redeemable%20Noncontrolling%20Interest) This note explains the classification and changes in EVgo's redeemable noncontrolling interest, representing EVgo Holdings' economic ownership - As of September 30, 2023, EVgo Holdings held **195,800,000 EVgo OpCo Units**, representing a **65.6% economic ownership interest** in EVgo OpCo and a **65.4% voting interest** in the Company[139](index=139&type=chunk) - The EVgo OpCo Units are classified as redeemable noncontrolling interest (temporary equity) due to a cash redemption feature outside the Company's control[140](index=140&type=chunk) Reconciliation of Changes in Redeemable Noncontrolling Interest (in thousands, 9 Months Ended Sep 30, 2023) | Activity | Amount | | :-------------------------------------------------------------------------------- | :------- | | Balance as of December 31, 2022 | $875,226 | | Net loss attributable to redeemable noncontrolling interest | $(69,054) | | Equity-based compensation attributable to redeemable noncontrolling interest | $1,843 | | Adjustment to revise redeemable noncontrolling interest to its redemption value at period-end | $(146,211) | | **Balance as of September 30, 2023** | **$661,804** | [Note 16 – Subsequent Events](index=49&type=section&id=Note%2016%20%E2%80%93%20Subsequent%20Events) This note discloses significant events occurring after the reporting period, including real estate sales and associated lease agreements - In November 2023, EVgo subsidiaries sold three parcels of real estate for an aggregate purchase price of **$16.5 million**, receiving net proceeds of **$14.6 million**[143](index=143&type=chunk) - Concurrently, the Real Estate Subsidiaries entered into **ten-year lease agreements** with the purchaser for these parcels, with **six 5-year renewal options** and conditional termination rights[143](index=143&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=50&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on EVgo's financial condition and results of operations, detailing revenue streams, cost components, key performance indicators, and factors influencing the business It includes a comprehensive analysis of financial performance for the three and nine months ended September 30, 2023 and 2022, liquidity, capital resources, and critical accounting policies [Overview](index=50&type=section&id=Overview) EVgo is a leader in EV charging solutions, building and operating infrastructure for individual drivers, rideshare, commercial fleets, and businesses, with its network powered by renewable energy certificates since 2019 - EVgo is a leader in EV charging solutions, building and operating infrastructure for individual drivers, rideshare, commercial fleets, and businesses, with its network powered by renewable energy certificates since 2019[146](index=146&type=chunk) - The Company employs a flexible business model with multiple revenue streams, including direct electricity sales (retail, commercial, OEM), regulatory credit sales (e.g., LCFS), network services for OEMs, eXtend services (hardware, design, O&M for customer-owned assets), and various software-driven ancillary services[147](index=147&type=chunk)[148](index=148&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk) - EVgo's offerings aim to attract Site Hosts by providing EV charging capabilities at no cost, often with additional revenue from license payments[148](index=148&type=chunk) [Recent Developments](index=54&type=section&id=Recent%20Developments) The global economy faces disruption from geopolitical instability, rising inflation, and slowing economic growth, which could impact EVgo's operating and financial results - The global economy faces disruption from geopolitical instability (Ukraine, Israel, Middle East), rising inflation, slowing economic growth, and financial system concerns, which could impact EVgo's operating and financial results[152](index=152&type=chunk)[153](index=153&type=chunk) - Government EV initiatives like the Bipartisan Infrastructure Law and Inflation Reduction Act provide incentives for EV adoption and charging infrastructure, but new requirements (e.g., Buy America, domestic content) may cause delays or increased costs for EVgo and its suppliers[154](index=154&type=chunk)[155](index=155&type=chunk) - Badar Khan was appointed to succeed Catherine Zoi as the Company's Chief Executive Officer, effective around November 9, 2023[158](index=158&type=chunk) [Key Components of Results of Operations](index=56&type=section&id=Key%20Components%20of%20Results%20of%20Operations) This section outlines EVgo's primary revenue streams, cost components, and other income/expense items that influence its operating results - Revenue is primarily generated from charging services (retail, commercial, OEM), eXtend offerings, regulatory credit sales, and ancillary services[159](index=159&type=chunk) - Cost of sales includes cost of revenue (energy, O&M, warranty, site lease) and depreciation, net of capital-build amortization, which is partially offset by third-party funding[160](index=160&type=chunk)[161](index=161&type=chunk) - Operating expenses consist of general and administrative expenses (payroll, IT, customer service, professional services) and depreciation, amortization, and accretion (non-charging equipment, intangible assets, asset retirement obligations)[163](index=163&type=chunk)[164](index=164&type=chunk) - Other income/expense items include interest income, unrealized gains/losses on marketable securities, and changes in fair value of warrant and earnout liabilities[167](index=167&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk) [Key Performance Indicators](index=58&type=section&id=Key%20Performance%20Indicators) EVgo uses Network Throughput and Number of DC Stalls to measure operational performance, and Total Receipts to monitor commercial performance and liquidity - EVgo uses Network Throughput (total GWh consumed on its network, excluding eXtend) and Number of DC Stalls (energized, inspected, commissioned) to measure operational performance[172](index=172&type=chunk)[174](index=174&type=chunk) Network Throughput and DC Stalls | Metric | Sep 30, 2023 | Sep 30, 2022 | | :------------------------------------------ | :----------- | :----------- | | Network throughput (GWh) for the three months ended | 37 | 12 | | Network throughput (GWh) for the nine months ended | 80 | 30 | | Number of DC Stalls on EVgo Network (in thousands) as of | 2.7 | 2.1 | - Network throughput increased significantly, with **37 GWh** for the three months (up **208% YoY**) and **80 GWh** for the nine months (up **167% YoY**) ended September 30, 2023[174](index=174&type=chunk) - Receipts (total revenue + change in deferred revenue) are used to monitor commercial performance, liquidity, and growth, as OEM customers often pay in advance[175](index=175&type=chunk) Total Receipts (in thousands) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :------------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | GAAP revenue | $35,107 | $10,509 | $110,959 | $27,285 | | GAAP changes in deferred revenue | $7,216 | $4,116 | $26,155 | $3,544 | | **Total Receipts** | **$42,323** | **$14,625** | **$137,114** | **$30,829** | | Year-over-year percentage change in total Receipts | **189%** | | **345%** | | [Factors Affecting EVgo's Operating Results](index=59&type=section&id=Factors%20Af%20ecting%20EVgo's%20Operating%20Results) EVgo's operating results are influenced by EV adoption, market competition, government incentives, technology risks, and regulatory credit market dynamics - EVgo's revenue growth is directly tied to the adoption and usage of EVs; factors like consumer perception, range anxiety, charging convenience, and supply chain issues can impact EV sales[178](index=178&type=chunk)[180](index=180&type=chunk) - Competition in the EV charging industry is increasing, with factors like charger count, location, reliability, charging speed, software offerings, and brand reputation being key competitive differentiators[182](index=182&type=chunk) - Government mandates, incentives (e.g., tax credits like Section 30C, NEVI program), and regulatory programs significantly influence the EV market, but changes or new requirements (e.g., Buy America) could adversely affect EVgo's business and increase costs[183](index=183&type=chunk)[185](index=185&type=chunk)[186](index=186&type=chunk) - Technology risks include reliance on mobile operating systems and third-party software (like Driivz), and the need to adapt to evolving EV technology (e.g., NACS standard adoption by OEMs), requiring significant investment[187](index=187&type=chunk) - Revenue from regulatory credits (e.g., LCFS) is subject to market and supply/demand dynamics, leading to price volatility and dependence on continued governmental support for these programs[189](index=189&type=chunk) [Results of Operations for the Three Months Ended September 30, 2023 and 2022](index=64&type=section&id=Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20September%2030,%202023%20and%202022) This section analyzes EVgo's financial performance for the three months ended September 30, 2023 and 2022, detailing revenue, costs, and profitability [Revenue](index=66&type=section&id=Revenue_3M) This section details EVgo's revenue breakdown for the three months ended September 30, 2023 and 2022, by various revenue streams Revenue (in thousands, 3 Months Ended Sep 30) | Revenue Type | 2023 | 2022 | Change ($) | Change (%) | | :-------------------------- | :----- | :----- | :--------- | :--------- | | Charging revenue, retail | $13,357 | $5,176 | $8,181 | 158% | | Charging revenue, commercial | $4,042 | $678 | $3,364 | 496% | | Charging revenue, OEM | $1,477 | $252 | $1,225 | 486% | | Regulatory credit sales | $1,807 | $1,178 | $629 | 53% | | Network revenue, OEM | $1,114 | $448 | $666 | 149% | | eXtend revenue | $10,475 | $1,543 | $8,932 | 579% | | Ancillary revenue | $2,835 | $1,234 | $1,601 | 130% | | **Total revenue** | **$35,107** | **$10,509** | **$24,598** | **234%** | - Total revenue increased by **$24.6 million** (**234%**) to **$35.1 million**, primarily driven by eXtend revenue (up **$8.9 million** or **579%**) and retail charging revenue (up **$8.2 million** or **158%**)[191](index=191&type=chunk) - Commercial and OEM charging revenues also saw substantial growth, increasing by **496%** and **486%** respectively, due to higher charging volumes[193](index=193&type=chunk)[194](index=194&type=chunk) [Cost of Sales](index=68&type=section&id=Cost%20of%20Sales_3M) This section analyzes EVgo's cost of sales for the three months ended September 30, 2023 and 2022 - Cost of revenue increased by **$17.4 million** (**203%**) to **$25.9 million**, mainly due to **$8.3 million** in eXtend costs, **$6.6 million** in energy/variable charging costs, and **$1.6 million** in fixed charging costs[200](index=200&type=chunk) - Depreciation, net of capital-build amortization, increased by **$3.4 million** (**66%**) to **$8.6 million**, reflecting the growth of EVgo's charging network[201](index=201&type=chunk) [Gross Profit (Loss) and Gross Margin](index=68&type=section&id=Gross%20Profit%20(Loss)%20and%20Gross%20Margin_3M) This section analyzes EVgo's gross profit (loss) and gross margin for the three months ended September 30, 2023 and 2022 - Gross profit improved to **$0.6 million** from a gross loss of **$3.2 million** in the prior year, driven by increased charging and eXtend revenues[202](index=202&type=chunk) - Gross margin improved significantly to **1.7%** from **negative 30.5%**, due to better leveraging of charging station costs and higher margins on eXtend and charging revenue[202](index=202&type=chunk) [Operating Expenses](index=68&type=section&id=Operating%20Expenses_3M) This section details EVgo's operating expenses for the three months ended September 30, 2023 and 2022 - General and administrative expenses slightly decreased by **$0.3 million** (**1%**) to **$32.0 million**, mainly due to lower professional services and insurance costs, partially offset by lower insurance recoveries[203](index=203&type=chunk) - Depreciation, amortization, and accretion expenses increased by **$0.5 million** (**10%**) to **$5.0 million**, primarily due to higher software amortization[204](index=204&type=chunk) [Operating Loss and Operating Margin](index=68&type=section&id=Operating%20Loss%20and%20Operating%20Margin_3M) This section analyzes EVgo's operating loss and operating margin for the three months ended September 30, 2023 and 2022 - Operating loss improved by **$3.7 million** (**9%**) to **$(36.4) million**, driven by increased gross profit[205](index=205&type=chunk) - Operating margin improved to **negative 103.6%** from **negative 381.1%**, reflecting better leveraging of operating expenses and improved gross margin[205](index=205&type=chunk) [Interest Income](index=68&type=section&id=Interest%20Income_3M) This section details EVgo's interest income for the three months ended September 30, 2023 and 2022 - Interest income increased by **$1.3 million** (**77%**) to **$2.9 million**, due to higher cash and cash equivalents held in high-interest accounts[206](index=206&type=chunk) [Other Income (Expense), Net](index=68&type=section&id=Other%20Income%20(Expense),%20Net_3M) This section details EVgo's other income (expense), net, for the three months ended September 30, 2023 and 2022 - Other income, net, was de minimis compared to an expense of **$0.3 million** in the prior year, primarily due to losses on investments in 2022[207](index=207&type=chunk) [Changes in Fair Values of Warrant and Earnout Liabilities](index=70&type=section&id=Changes%20in%20Fair%20Values%20of%20Warrant%20and%20Earnout%20Liabilities_3M) This section details changes in fair values of EVgo's warrant and earnout liabilities for the three months ended September 30, 2023 and 2022 - A **$5.2 million** gain was recorded from changes in fair values of warrant and earnout liabilities, a significant improvement from a **$12.2 million** loss in the prior year, due to a decrease in fair values[208](index=208&type=chunk) [Income Taxes](index=70&type=section&id=Income%20Taxes_3M) This section details EVgo's income taxes for the three months ended September 30, 2023 and 2022 - No income taxes were due for the three months ended September 30, 2023 and 2022, due to a full valuation allowance on net deferred tax assets[209](index=209&type=chunk) [Net (Loss) Income](index=70&type=section&id=Net%20(Loss)%20Income_3M) This section analyzes EVgo's net loss for the three months ended September 30, 2023 and 2022 - Net loss decreased to **$(28.3) million** from **$(50.9) million**, driven by the **$17.4 million** impact from fair value changes in liabilities, **$3.8 million** gross profit improvement, and **$1.3 million** interest income increase[210](index=210&type=chunk) [Results of Operations for the Nine Months Ended September 30, 2023 and 2022](index=70&type=section&id=Results%20of%20Operations%20for%20the%20Nine%20Months%20Ended%20September%2030,%202023%20and%202022) This section analyzes EVgo's financial performance for the nine months ended September 30, 2023 and 2022, detailing revenue, costs, and profitability [Revenue](index=72&type=section&id=Revenue_9M) This section details EVgo's revenue breakdown for the nine months ended September 30, 2023 and 2022, by various revenue streams Revenue (in thousands, 9 Months Ended Sep 30) | Revenue Type | 2023 | 2022 | Change ($) | Change (%) | | :-------------------------- | :------- | :------- | :--------- | :--------- | | Charging revenue, retail | $29,057 | $13,067 | $15,990 | 122% | | Charging revenue, commercial | $8,175 | $2,041 | $6,134 | 301% | | Charging revenue, OEM | $3,015 | $592 | $2,423 | 409% | | Regulatory credit sales | $4,635 | $4,684 | $(49) | (1)% | | Network revenue, OEM | $4,555 | $1,825 | $2,730 | 150% | | eXtend revenue | $54,048 | $1,754 | $52,294 | >999% | | Ancillary revenue | $7,474 | $3,322 | $4,152 | 125% | | **Total revenue** | **$110,959** | **$27,285** | **$83,674** | **307%** | - Total revenue increased by **$83.7 million** (**307%**) to **$111.0 million**, primarily driven by a **$52.3 million** increase in eXtend revenue (**over 999% growth**) and a **$16.0 million** increase in retail charging revenue (**122% growth**)[213](index=213&type=chunk) - Commercial and OEM charging revenues also experienced significant growth of **301%** and **409%** respectively, due to higher charging volumes and customer enrollments[215](index=215&type=chunk)[216](index=216&type=chunk) [Cost of Sales](index=74&type=section&id=Cost%20of%20Sales_9M) This section analyzes EVgo's cost of sales for the nine months ended September 30, 2023 and 2022 - Cost of revenue increased by **$63.4 million** (**332%**) to **$82.5 million**, mainly due to a **$41.7 million** increase in eXtend costs, **$14.2 million** in energy/variable charging costs, and **$6.2 million** in fixed charging costs[222](index=222&type=chunk) - Depreciation, net of capital-build amortization, increased by **$9.5 million** (**75%**) to **$22.2 million**, reflecting the expansion of EVgo's charging network[223](index=223&type=chunk) [Gross Profit (Loss) and Gross Margin](index=74&type=section&id=Gross%20Profit%20(Loss)%20and%20Gross%20Margin_9M) This section analyzes EVgo's gross profit (loss) and gross margin for the nine months ended September 30, 2023 and 2022 - Gross profit improved to **$6.2 million** from a gross loss of **$4.6 million** in the prior year, driven by increased gross profit from eXtend and charging revenues[224](index=224&type=chunk) - Gross margin improved to **5.6%** from **negative 16.7%**, due to better leveraging of charging station costs and higher margins on eXtend and charging revenue[224](index=224&type=chunk) [Operating Expenses](index=74&type=section&id=Operating%20Expenses_9M) This section details EVgo's operating expenses for the nine months ended September 30, 2023 and 2022 - General and administrative expenses increased by **$14.3 million** (**16%**) to **$104.2 million**, primarily due to a **$10.4 million** increase in payroll expenses from higher headcount and a **$4.4 million** increase in impairment expense[225](index=225&type=chunk) - Depreciation, amortization, and accretion expenses increased by **$2.0 million** (**16%**) to **$14.5 million**, mainly due to higher software amortization[226](index=226&type=chunk) [Operating Loss and Operating Margin](index=74&type=section&id=Operating%20Loss%20and%20Operating%20Margin_9M) This section analyzes EVgo's operating loss and operating margin for the nine months ended September 30, 2023 and 2022 - Operating loss deteriorated by **$5.6 million** (**5%**) to **$(112.6) million**, driven by increased general and administrative expenses, partially offset by increased gross profit[227](index=227&type=chunk) - Operating margin improved to **negative 101.5%** from **negative 392.2%**, reflecting improved leveraging of operating expenses and gross margin[227](index=227&type=chunk) [Interest Expense](index=74&type=section&id=Interest%20Expense_9M) This section details EVgo's interest expense for the nine months ended September 30, 2023 and 2022 - No interest expense was incurred for the nine months ended September 30, 2023, compared to a de minimis amount in the prior year[228](index=228&type=chunk) [Interest Income](index=74&type=section&id=Interest%20Income_9M) This section details EVgo's interest income for the nine months ended September 30, 2023 and 2022 - Interest income increased by **$4.8 million** (**205%**) to **$7.1 million**, due to higher cash and cash equivalents held in high-interest accounts[229](index=229&type=chunk) [Other Income (Expense), Net](index=76&type=section&id=Other%20Income%20(Expense),%20Net_9M) This section details EVgo's other income (expense), net, for the nine months ended September 30, 2023 and 2022 - Other income, net, was de minimis compared to an expense of **$0.8 million** in the prior year, primarily due to losses on investments in 2022[231](index=231&type=chunk) [Changes in Fair Values of Warrant and Earnout Liabilities](index=76&type=section&id=Changes%20in%20Fair%20Values%20of%20Warrant%20and%20Earnout%20Liabilities_9M) This section details changes in fair values of EVgo's warrant and earnout liabilities for the nine months ended September 30, 2023 and 2022 - A **$6.7 million** gain was recorded from changes in fair values of warrant and earnout liabilities, compared to a **$16.3 million** gain in the prior year, reflecting a smaller decrease in fair value[232](index=232&type=chunk) [Income Taxes](index=76&type=section&id=Income%20Taxes_9M) This section details EVgo's income taxes for the nine months ended September 30, 2023 and 2022 - Income taxes and effective tax rates were de minimis for the nine months ended September 30, 2023 and 2022[233](index=233&type=chunk) [Net (Loss) Income](index=76&type=section&id=Net%20(Loss)%20Income_9M) This section analyzes EVgo's net loss for the nine months ended September 30, 2023 and 2022 - Net loss increased to **$(98.9) million** from **$(89.2) million**, driven by increased G&A expenses and the impact from fair value changes in liabilities, partially offset by increased gross profit and interest income[234](index=234&type=chunk) [Non-GAAP Financial Measures](index=76&type=section&id=Non-GAAP%20Financial%20Measures) EVgo uses non-GAAP financial measures like Adjusted Cost of Sales, Adjusted Gross Profit (Loss), Adjusted General and Administrative Expenses, EBITDA, and Adjusted EBITDA to evaluate performance and manage the business, believing they offer valuable insight into underlying business performance - EVgo uses non-GAAP financial measures like Adjusted Cost of Sales, Adjusted Gross Profit (Loss), Adjusted General and Administrative Expenses, EBITDA, and Adjusted EBITDA to evaluate performance and manage the business, believing they offer valuable insight into underlying business performance[235](index=235&type=chunk)[236](index=236&type=chunk) Adjusted Gross Profit (Loss) and Margin (in thousands) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | GAAP gross profit (loss) | $604 | $(3,208) | $6,174 | $(4,552) | | Adjusted Gross Profit | $9,281 | $2,006 | $28,539 | $8,254 | | GAAP gross margin | 1.7% | (30.5%) | 5.6% | (16.7%) | | Adjusted Gross Margin | 26.4% | 19.1% | 25.7% | 30.3% | Adjusted EBITDA (in thousands) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | GAAP net loss | $(28,257) | $(50,922) | $(98,877) | $(89,191) | | EBITDA | $(17,561) | $(42,847) | $(69,144) | $(66,198) | | Adjusted EBITDA | $(14,248) | $(22,153) | $(44,868) | $(60,166) | | EBITDA Margin | (50.0%) | (407.7%) | (62.3%) | (242.6%) | | Adjusted EBITDA Margin | (40.6%) | (210.8%) | (40.4%) | (220.5%) | - Adjusted Gross Margin improved to **26.4%** for the three months ended September 30, 2023, from **19.1%** in the prior year, and Adjusted EBITDA improved to **$(14.2) million** from **$(22.2) million**[238](index=238&type=chunk)[242](index=242&type=chunk) [Liquidity and Capital Resources](index=79&type=section&id=Liquidity%20and%20Capital%20Resources) As of September 30, 2023, EVgo had $228.7 million in cash and equivalents, and $186.0 million in working capital, deemed sufficient for twelve months of operations - As of September 30, 2023, EVgo had **$228.7 million** in cash, cash equivalents, and restricted cash, and working capital of **$186.0 million**, which management believes is sufficient for current working capital and capital expenditure requirements for at least **twelve months**[244](index=244&type=chunk) - Primary liquidity sources include cash flows from the CRIS Business Combination, revenue, government grants, and proceeds from Class A common stock sales (ATM Program, equity offering)[245](index=245&type=chunk) - Cash used in operating activities decreased to **$(29.8) million** for the nine months ended September 30, 2023, from **$(57.3) million** in the prior year, while cash provided by financing activities significantly increased to **$135.8 million** from **$6.5 million**[248](index=248&type=chunk)[250](index=250&type=chunk) - EVgo has material cash requirements for operating leases, purchase commitments (e.g., **$76.0 million** for charging equipment), and other liabilities, which it expects to fund through existing cash and future financing or operations[115](index=115&type=chunk)[252](index=252&type=chunk) [Critical Accounting Policies and Estimates](index=83&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Critical accounting estimates include revenue recognition, business combinations, and warrant liabilities, with EVgo benefiting from relaxed reporting requirements as an emerging growth company - Critical accounting estimates include revenue recognition (determining performance obligations, distinctness, and allocation of transaction price), business combinations, and warrant liabilities[255](index=255&type=chunk) - Revenue recognition requires significant judgment in identifying performance obligations, determining standalone selling prices (SSPs), and recognizing revenue over time or at a point in time[256](index=256&type=chunk)[257](index=257&type=chunk)[258](index=258&type=chunk)[259](index=259&type=chunk) - Warrants are classified as equity or liability based on specific terms and accounting guidance, with liability-classified warrants remeasured at fair value each period using a Monte Carlo simulation methodology[260](index=260&type=chunk)[261](index=261&type=chunk) - As an 'emerging growth company' (EGC) and 'smaller reporting company,' EVgo benefits from relaxed reporting requirements, including delayed adoption of new accounting standards and reduced disclosure obligations[262](index=262&type=chunk)[263](index=263&type=chunk)[264](index=264&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=87&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a 'smaller reporting company,' EVgo Inc is not required to provide quantitative and qualitative disclosures about market risk under Regulation S-K Item 305(e) - EVgo is exempt from providing quantitative and qualitative disclosures about market risk due to its status as a 'smaller reporting company' under Regulation S-K[265](index=265&type=chunk) [Item 4. Controls and Procedures](index=87&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that EVgo's disclosure controls and procedures were not effective as of September 30, 2023, due to identified material weaknesses in internal control over financial reporting The Company is implementing a remediation plan to address these weaknesses, including hiring additional personnel, enhancing risk assessment, and improving process-level and IT controls - Management concluded that EVgo's disclosure controls and procedures were **not effective** as of September 30, 2023, due to material weaknesses in internal control over financial reporting[267](index=267&type=chunk) - Identified material weaknesses include lacking sufficient trained resources for internal control, ineffective risk assessment, and inadequate information and communication processes, leading to deficiencies in process-level and general IT controls[272](index=272&type=chunk) - The remediation plan involves hiring additional accounting and financial reporting personnel, providing ongoing training, designing a comprehensive risk assessment process, implementing controls over information completeness/accuracy, and strengthening process-level and IT controls[273](index=273&type=chunk) - Despite the material weaknesses, management believes the condensed consolidated financial statements fairly present the Company's financial position, results of operations, and cash flows[268](index=268&type=chunk) [PART II. OTHER INFORMATION](index=90&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part provides other information, including legal proceedings, risk factors, and exhibits, supplementing financial disclosures [Item 1. Legal Proceedings](index=90&type=section&id=Item%201.%20Legal%20Proceedings) EVgo is not currently a party to any material legal proceedings, though it may be subject to ordinary course lawsuits, investigations, and claims Contingent liabilities from such litigation are not expected to materially adversely affect the Company's financial position - EVgo is **not currently a party to any material legal proceedings**[275](index=275&type=chunk) - The Company may be subject to ordinary course lawsuits, investigations, and claims, but contingent liabilities are not expected to have a material adverse effect on its financial position[113](index=113&type=chunk)[114](index=114&type=chunk) [Item 1A. Risk Factors](index=90&type=section&id=Item%201A.%20Risk%20Factors) This section supplements the risk factors previously disclosed in EVgo's Annual Report on Form 10-K, highlighting a new risk related to the Company's reliance on mobile operating systems, networks, and standards it does not control, as well as its partnership with Driivz for its software platform - EVgo's business relies on mobile operating systems (e.g., Android, iOS) and networks it does not control; changes in these systems could degrade application functionality or favor competitors[277](index=277&type=chunk) - A significant portion of EVgo's software platform depends on its partnership with Driivz, headquartered in Israel; geopolitical tensions or conflict involving Israel could disrupt Driivz's services and adversely impact EVgo's business[278](index=278&type=chunk) - The Company's ability to maintain its partnership with Driivz is critical, as a transition to another software offering could pose a material challenge[278](index=278&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=90&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item is not applicable to the current report - This section is marked as '**Not applicable**'[279](index=279&type=chunk) [Item 3. Defaults Upon Senior Securities](index=90&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the current report - This section is marked as '**Not applicable**'[280](index=280&type=chunk) [Item 4. Mine Safety Disclosures](index=90&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the current report - This section is marked as '**Not applicable**'[281](index=281&type=chunk) [Item 5. Other Information](index=90&type=section&id=Item%205.%20Other%20Information) This item indicates that there is no other information to report - This section states '**None**'[282](index=282&type=chunk) [Item 6. Exhibits](index=92&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including organizational documents, warrant agreements, and certifications - The exhibit index includes the Third Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws, Specimen Class A Common Stock Certificate, Warrant Agreement, and various employment and transition agreements[286](index=286&type=chunk) - Certifications from the Chief Executive Officer and Chief Financial Officer (Sarbanes-Oxley Act Section 302 and 906) are included, along with XBRL Instance Document and Taxonomy Extension files[286](index=286&type=chunk) [Signatures](index=94&type=section&id=Signatures) This section contains the required signatures certifying the submission of the quarterly report - The report is signed by Catherine Zoi, Chief Executive Officer, and Olga Shevorenkova, Chief Financial Officer, on November 8, 2023, certifying its submission[289](index=289&type=chunk)[291](index=291&type=chunk)

Key Financial Highlights Q2 2023 Quarterly Revenue, Margin and Cash Flow Update Q2'23 Q2'22 (unaudited, dollars in thousands) Cash flows used in operating activities $ (3,182) $ (18,539) Capital expenditures $ 34,811 $ 44,017 | --- | --- | --- | --- | --- | --- | |--------------------------------------------------------------------------|-------|------------|-------|------------|-------------------------| | (unaudited, dollars in thousands) \nNetwork Throughput (GWh) 24.9 10.1 | | Q2'23 | | Q2'22 \n | Bette ...

[Cautionary Statement Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) The report contains forward-looking statements subject to risks and uncertainties detailed in SEC filings - The report contains forward-looking statements regarding future financial performance, business strategies, market size, expansion plans, and operational results[7](index=7&type=chunk)[10](index=10&type=chunk) - Key risks include changes affecting EVgo's business, cyclical demand, revenue fluctuations, capital market conditions, competition, supply chain disruptions, and general economic conditions[7](index=7&type=chunk)[11](index=11&type=chunk) [Frequently Used Terms](index=6&type=section&id=Frequently%20Used%20Terms) This section defines key terminology used throughout the report, such as DCFC, EV, and OEM - This section defines key terms used throughout the Quarterly Report, such as 'Company' (EVgo Inc and its subsidiaries), 'DCFC' (direct current fast charging), 'EV' (electric vehicle), and 'OEM' (original equipment manufacturer)[13](index=13&type=chunk)[22](index=22&type=chunk)[34](index=34&type=chunk) [PART I. FINANCIAL INFORMATION](index=10&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents the company's unaudited financial statements and management's analysis of financial performance [Item 1. Financial Statements](index=10&type=section&id=Item%201.%20Financial%20Statements) This section presents EVgo's unaudited condensed consolidated financial statements and accompanying notes [Condensed Consolidated Balance Sheets](index=10&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheets show an increase in total assets and a reduction in the total stockholders' deficit Condensed Consolidated Balance Sheets | (in thousands) | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash, cash equivalents and restricted cash | $257,126 | $246,193 | | Total current assets | $297,146 | $275,484 | | Property, equipment and software, net | $383,822 | $308,112 | | Total assets | $823,135 | $729,724 | | **Liabilities** | | | | Total current liabilities | $81,218 | $87,345 | | Total liabilities | $232,545 | $212,598 | | Redeemable noncontrolling interest | $783,200 | $875,226 | | Total stockholders' deficit | $(192,610) | $(358,100) | [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) The company's revenue grew significantly, turning a gross loss into a gross profit year-over-year Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) | (in thousands, except per share data) | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $50,552 | $9,076 | $75,852 | $16,776 | | Gross profit (loss) | $5,529 | $(744) | $5,570 | $(1,344) | | Operating loss | $(33,587) | $(37,054) | $(76,219) | $(66,969) | | Net (loss) income | $(21,539) | $16,997 | $(70,620) | $(38,269) | | Net (loss) income attributable to Class A common stockholders | $(7,026) | $4,479 | $(20,102) | $(9,920) | | Net (loss) income per share, basic | $(0.08) | $0.06 | $(0.25) | $(0.14) | [Condensed Consolidated Statements of Stockholders' Deficit](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Deficit) The stockholders' deficit improved due to noncontrolling interest adjustments and proceeds from equity offerings - For the six months ended June 30, 2023, total stockholders' deficit improved from **$(358,100) thousand to $(192,610) thousand**, primarily due to a significant redeemable noncontrolling interest adjustment to fair value of **$727,990 thousand**, and proceeds from equity offerings[51](index=51&type=chunk) - Class A common stock outstanding increased from **70,247,726 shares** at December 31, 2022, to **102,593,985 shares** at June 30, 2023, reflecting issuances under equity offerings and share-based compensation plans[51](index=51&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=16&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from financing activities offset cash used in operations and investing, resulting in a net cash increase Condensed Consolidated Statements of Cash Flows | (in thousands) | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(22,525) | $(38,370) | | Net cash used in investing activities | $(99,898) | $(106,836) | | Net cash provided by financing activities | $133,356 | $5,032 | | Net increase (decrease) in cash, cash equivalents and restricted cash | $10,933 | $(140,174) | | Cash, cash equivalents and restricted cash, end of period | $257,426 | $345,007 | [Notes to Condensed Consolidated Financial Statements](index=18&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations of accounting policies, revenue, leases, and other financial components [Note 1 – Description of Business and Nature of Operations](index=18&type=section&id=Note%201%20%E2%80%93%20Description%20of%20Business%20and%20Nature%20of%20Operations) EVgo operates a public DC fast charging network for EVs in the US under an 'Up-C' corporate structure - EVgo owns and operates a public DC fast charging network for EVs in the US, supporting all EV models and charging standards[60](index=60&type=chunk) - The company operates under an **'Up-C' structure** following the CRIS Business Combination on July 1, 2021, consolidating EVgo OpCo's financial results and recording a redeemable noncontrolling interest[63](index=63&type=chunk)[65](index=65&type=chunk) - As of June 30, 2023, EVgo Holdings held **65.5% economic ownership** and a **67.4% voting interest** in EVgo Inc[65](index=65&type=chunk) [Note 2 – Summary of Significant Accounting Policies](index=19&type=section&id=Note%202%20%E2%80%93%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines EVgo's accounting policies, use of estimates, and adoption of new accounting standards - The condensed consolidated financial statements are unaudited and prepared in accordance with GAAP, consolidating the Company and its subsidiaries[67](index=67&type=chunk) - Significant estimates include variable consideration for revenue, depreciable lives of assets, asset retirement obligations, fair value of operating leases, and share-based compensation[70](index=70&type=chunk) - EVgo adopted ASU 2021-08 (Business Combinations) and ASC 326 (Credit Losses) prospectively on January 1, 2023, with **no material impact** on financial statements[79](index=79&type=chunk)[80](index=80&type=chunk) - As of June 30, 2023, two customers comprised **39.9% of net accounts receivable**, and one customer represented **57.3% of revenue** for the six months ended June 30, 2023, indicating significant customer concentration[73](index=73&type=chunk) [Note 3 – Revenue Recognition](index=22&type=section&id=Note%203%20%E2%80%93%20Revenue%20Recognition) This note details EVgo's revenue streams and highlights a 22% increase in contract liabilities Disaggregated Revenue | (in thousands) | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Charging revenue, retail | $9,085 | $4,389 | $15,700 | $7,891 | | Charging revenue, commercial | $2,418 | $654 | $4,133 | $1,363 | | Charging revenue, OEM | $986 | $189 | $1,538 | $340 | | Regulatory credit sales | $1,613 | $2,128 | $2,828 | $3,506 | | Network revenue, OEM | $742 | $887 | $3,441 | $1,377 | | eXtend revenue | $33,281 | $131 | $43,573 | $211 | | Ancillary revenue | $2,427 | $698 | $4,639 | $2,088 | | **Total revenue** | **$50,552** | **$9,076** | **$75,852** | **$16,776** | - Contract liabilities increased by **$12.5 million (22%) to $70.2 million** as of June 30, 2023, compared to $57.8 million as of December 31, 2022, reflecting the timing difference between cash receipt and performance obligation satisfaction[84](index=84&type=chunk) [Note 4 – Lease Accounting](index=26&type=section&id=Note%204%20%E2%80%93%20Lease%20Accounting) EVgo has operating lease commitments of $45.5 million for assets not yet in possession - EVgo has operating leases with Site Hosts for charging stations and leases offices/warehouses, with terms generally ranging from **one to 15 years**[87](index=87&type=chunk) - Estimated operating lease commitments for assets not yet in possession totaled **$45.5 million** as of June 30, 2023[88](index=88&type=chunk) Lease Costs and Income | (in thousands) | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Operating lease costs (Cost of sales) | $2,791 | $1,091 | | Operating lease costs (General and administrative expenses) | $2,440 | $1,280 | | Total lease income | $1,526 | $762 | [Note 5 – Property, Equipment and Software, Net](index=29&type=section&id=Note%205%20%E2%80%93%20Property,%20Equipment%20and%20Software,%20Net) Net property, equipment, and software increased to $383.8 million, driven by investments in charging stations Property, Equipment and Software, Net | (in thousands) | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Charging station installation costs | $160,750 | $121,820 | | Construction in process | $116,883 | $104,395 | | Charging station equipment | $105,642 | $79,031 | | Total property, equipment and software, net | $383,822 | $308,112 | Depreciation and Amortization | (in thousands) | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Depreciation of property and equipment (Cost of sales) | $16,886 | $9,985 | | Amortization of capital-build liability (Cost of sales) | $(3,261) | $(2,430) | | Impairment expense | $5,825 | $1,994 | | Total depreciation, amortization, impairment, and loss on disposal | $22,146 | $11,495 | [Note 6 – Intangible Assets, Net](index=29&type=section&id=Note%206%20%E2%80%93%20Intangible%20Assets,%20Net) Net intangible assets totaled $54.8 million, with amortization expense of $5.8 million for the period Intangible Assets, Net | (in thousands) | Net Carrying Value (June 30, 2023) | Remaining Weighted Average Amortization Period | | :--- | :--- | :--- | | Site Host relationships | $29,535 | 8.6 years | | Customer relationships | $4,867 | 1.3 years | | Developed technology | $10,844 | 11.0 years | | User base | $5,567 | 2.1 years | | Trade name | $3,992 | 13.0 years | | **Total intangible assets, net** | **$54,805** | | - Amortization of intangible assets was **$5.8 million** for both the six months ended June 30, 2023, and June 30, 2022[93](index=93&type=chunk) [Note 7 – Asset Retirement Obligations](index=31&type=section&id=Note%207%20%E2%80%93%20Asset%20Retirement%20Obligations) Asset retirement obligations increased to $18.5 million due to new liabilities and accretion expense Asset Retirement Obligations | (in thousands) | Six Months Ended June 30, 2023 | | :--- | :--- | | Balance as of December 31, 2022 | $15,473 | | Liabilities incurred | $2,019 | | Accretion expense | $1,081 | | Balance as of June 30, 2023 | $18,477 | [Note 8 – Equity](index=31&type=section&id=Note%208%20%E2%80%93%20Equity) EVgo raised approximately $129.1 million in net proceeds from equity offerings in the first half of 2023 - In April 2023, EVgo sold 889,340 shares of Class A common stock under its ATM Program, generating approximately **$5.7 million** in net proceeds[95](index=95&type=chunk) - During the three months ended June 30, 2023, EVgo completed an underwritten equity offering of 30,123,129 shares of Class A common stock, resulting in **$123.4 million** in net proceeds[96](index=96&type=chunk) [Note 9 – Commitments and Contingencies](index=31&type=section&id=Note%209%20%E2%80%93%20Commitments%20and%20Contingencies) EVgo has significant contractual commitments for charger installation and equipment purchases - EVgo is committed to building, operating, and maintaining up to **2,000 DC fast charging stalls** for Pilot Company and GM under the Pilot Infrastructure Agreement[98](index=98&type=chunk)[99](index=99&type=chunk) - Under the GM Agreement, EVgo must install **3,250 charger stalls by March 31, 2026**, facing potential liquidated damages of up to **$15.0 million** for non-compliance[105](index=105&type=chunk)[106](index=106&type=chunk) - As of June 30, 2023, EVgo had **$56.1 million** in outstanding short-term purchase order commitments for charging equipment[114](index=114&type=chunk) [Note 10 – Fair Value Measurements](index=36&type=section&id=Note%2010%20%E2%80%93%20Fair%20Value%20Measurements) This note details the fair value measurements of EVgo's financial assets and liabilities Fair Value Measurements | (in thousands) | Level | June 30, 2023 Balance | December 31, 2022 Balance | | :--- | :--- | :--- | :--- | | Cash equivalents (Money market funds) | 1 | $216,125 | $150,125 | | Earnout liability | 3 | $1,297 | $1,730 | | Warrant liability – Public Warrants | 1 | $9,328 | $10,164 | | Warrant liability – Private Placement Warrants | 2 | $1,965 | $2,140 | | **Total liabilities at fair value** | | **$12,590** | **$14,034** | - The earnout liability is valued using a **Monte Carlo simulation**, with key assumptions including a stock price of $4.00, risk-free interest rate of 4.49%, and expected volatility of 85%[116](index=116&type=chunk) [Note 11 – Income Taxes](index=38&type=section&id=Note%2011%20%E2%80%93%20Income%20Taxes) EVgo's income tax provision was de minimis due to a full valuation allowance on its deferred tax assets - EVgo's income tax expense was **de minimis** for the three and six months ended June 30, 2023 and 2022, primarily due to a full valuation allowance on deferred tax assets[120](index=120&type=chunk) - A **full valuation allowance** has been established against net deferred tax assets as of June 30, 2023, and December 31, 2022, due to significant uncertainty regarding future realization of tax benefits[121](index=121&type=chunk) [Note 12 – Tax Receivable Agreement](index=40&type=section&id=Note%2012%20%E2%80%93%20Tax%20Receivable%20Agreement) No liability has been triggered under the Tax Receivable Agreement as of June 30, 2023 - The Tax Receivable Agreement (TRA) mandates EVgo to pay TRA Holders **85% of net cash savings** from certain tax basis increases[124](index=124&type=chunk) - As of June 30, 2023, **no transactions have occurred** that would trigger the recording of a liability by the Company under the TRA[125](index=125&type=chunk) [Note 13 – Net (Loss) Income Per Share](index=40&type=section&id=Note%2013%20%E2%80%93%20Net%20(Loss)%20Income%20Per%20Share) This note provides the computation of basic and diluted net loss per share for Class A common stockholders Net (Loss) Income Per Share | (in thousands, except per share data) | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Net (loss) income attributable to Class A common stockholders, basic and diluted | $(6,967) | $4,433 | $(19,919) | $(9,817) | | Weighted average common stock outstanding, basic | 85,320 | 68,545 | 78,196 | 68,449 | | Net (loss) income per share – basic | $(0.08) | $0.06 | $(0.25) | $(0.14) | | Net (loss) income per share – diluted | $(0.08) | $0.06 | $(0.25) | $(0.14) | - Potentially dilutive securities, including **14,949 thousand Public Warrants** and **7,050 thousand RSUs**, were excluded from diluted EPS calculation for the six months ended June 30, 2023, as their impact was antidilutive[128](index=128&type=chunk) [Note 14 – Share-Based Compensation](index=42&type=section&id=Note%2014%20%E2%80%93%20Share-Based%20Compensation) Share-based compensation expense increased to $14.9 million for the six-month period Share-Based Compensation Expense | (in thousands) | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Cost of sales | $63 | $37 | | General and administrative expenses | $14,859 | $10,511 | | **Total share-based compensation expense** | **$14,922** | **$10,548** | - As of June 30, 2023, unrecognized share-based compensation expense was approximately **$3.9 million for stock options** (expected over 1.6 years) and **$31.5 million for unvested RSUs** (expected over 1.5 years)[133](index=133&type=chunk)[135](index=135&type=chunk) [Note 15 – Redeemable Noncontrolling Interest](index=45&type=section&id=Note%2015%20%E2%80%93%20Redeemable%20Noncontrolling%20Interest) The redeemable noncontrolling interest, measured at fair value, decreased to $783.2 million - EVgo Holdings held 195,800,000 EVgo OpCo Units as of June 30, 2023, representing a **65.6% economic ownership interest** in EVgo OpCo[138](index=138&type=chunk) - The redeemable noncontrolling interest is classified as **temporary equity** and measured at fair value at each reporting period[139](index=139&type=chunk)[140](index=140&type=chunk) Redeemable Noncontrolling Interest | (in thousands) | Six Months Ended June 30, 2023 | | :--- | :--- | | Balance as of December 31, 2022 | $875,226 | | Net loss attributable to redeemable noncontrolling interest | $(50,518) | | Adjustment to revise redeemable noncontrolling interest to its redemption value at period-end | $(42,378) | | **Balance as of June 30, 2023** | **$783,200** | [Note 16 – Subsequent Events](index=47&type=section&id=Note%2016%20%E2%80%93%20Subsequent%20Events) In July 2023, EVgo granted approximately 1.3 million restricted stock units to employees - In July 2023, EVgo granted approximately **1,300,000 restricted stock units (RSUs)** to employees, with a fair value of **$5.2 million**, vesting annually over three years[142](index=142&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=47&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial results, key performance indicators, liquidity, and critical accounting policies [Overview](index=47&type=section&id=Overview) EVgo operates EV charging infrastructure with multiple revenue streams, including charging and eXtend services - EVgo is a key leader in EV charging solutions, building and operating infrastructure for individual drivers, rideshare and commercial fleets, and businesses[144](index=144&type=chunk) - Revenue streams include charging services (retail, commercial, OEM), regulatory credit sales, network revenue (OEM), and **eXtend revenue** (hardware, design, O&M for customer-owned assets)[145](index=145&type=chunk)[146](index=146&type=chunk)[148](index=148&type=chunk)[149](index=149&type=chunk)[154](index=154&type=chunk) [Recent Developments](index=50&type=section&id=Recent%20Developments) Macroeconomic factors have caused operational disruptions, while government initiatives present both opportunities and challenges - The global economy's disruption, including COVID-19, the Ukraine conflict, and inflation, has impacted EVgo's operations through construction delays and supply chain constraints[151](index=151&type=chunk)[152](index=152&type=chunk)[153](index=153&type=chunk)[155](index=155&type=chunk) - Government EV initiatives provide incentives but also impose new requirements (e.g., **'Buy America' rules**) that could lead to sourcing delays or increased costs[156](index=156&type=chunk)[157](index=157&type=chunk) [Key Components of Results of Operations](index=52&type=section&id=Key%20Components%20of%20Results%20of%20Operations) This section defines the key components of EVgo's financial results, including revenue and operating expenses - EVgo's revenue is primarily from charging services, eXtend offerings, regulatory credit sales, and ancillary services[159](index=159&type=chunk) - Cost of sales includes energy usage fees, site operating and maintenance, warranty, and site lease/rent expenses[160](index=160&type=chunk)[161](index=161&type=chunk) - Operating expenses consist of general and administrative expenses (payroll, IT, customer service) and depreciation, amortization, and accretion not related to charging equipment[163](index=163&type=chunk)[164](index=164&type=chunk) [Key Performance Indicators](index=55&type=section&id=Key%20Performance%20Indicators) Network Throughput, Number of DC Stalls, and Receipts are key metrics used to evaluate performance Key Performance Indicators | Metric | June 30, 2023 | June 30, 2022 | | :--- | :--- | :--- | | Network throughput (GWh) for three months | 24.9 | 10.1 | | Network throughput (GWh) for six months | 42.8 | 18.1 | | Number of DC stalls on EVgo network | 2,518 | 1,937 | Total Receipts | (dollars in thousands) | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | GAAP revenue | $50,552 | $9,076 | $75,852 | $16,776 | | GAAP changes in deferred revenue | $(2,842) | $(11) | $18,939 | $(572) | | **Total Receipts** | **$47,710** | **$9,065** | **$94,791** | **$16,204** | | Year-over-year percentage change in total Receipts | 426% | | 485% | | [Factors Affecting EVgo's Operating Results](index=56&type=section&id=Factors%20Affecting%20EVgo's%20Operating%20Results) Operating results are influenced by EV adoption, competition, government incentives, and technology risks - EVgo's revenue growth is directly tied to the **adoption and usage of passenger and commercial EVs**[178](index=178&type=chunk) - The EV charging industry is **highly competitive**, with factors like charger count, location, reliability, and pricing influencing market share[182](index=182&type=chunk) - Government incentives are crucial for the EV market, but changes in requirements or reductions could negatively impact EVgo's business[183](index=183&type=chunk)[184](index=184&type=chunk)[186](index=186&type=chunk) - Technology risks, including the rapid shift towards the **NACS standard** by OEMs, could require significant investments to adapt EVgo's infrastructure[187](index=187&type=chunk)[188](index=188&type=chunk) - Revenue from regulatory credit sales is exposed to market dynamics, leading to **price volatility** that can materially affect future results[188](index=188&type=chunk) [Results of Operations for the Three Months Ended June 30, 2023 and 2022](index=61&type=section&id=Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20June%2030,%202023%20and%202022) Revenue increased 457% to $50.6 million, driven by eXtend revenue, turning a gross loss into a gross profit Results of Operations | (dollars in thousands) | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Change $ | Change % | | :--- | :--- | :--- | :--- | :--- | | Revenue | $50,552 | $9,076 | $41,476 | 457% | | Cost of revenue | $37,740 | $5,719 | $32,021 | 560% | | Gross profit (loss) | $5,529 | $(744) | $6,273 | 843% | | General and administrative expenses | $34,333 | $32,178 | $2,155 | 7% | | Operating loss | $(33,587) | $(37,054) | $3,467 | 9% | | Net (loss) income | $(21,539) | $16,997 | $(38,536) | (227)% | | Gross margin | 10.9% | (8.2)% | | | | Operating margin | (66.4)% | (408.3)% | | | Revenue by Type | (dollars in thousands) | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Change $ | Change % | | :--- | :--- | :--- | :--- | :--- | | eXtend revenue | $33,281 | $131 | $33,150 | >999% | | Charging revenue, retail | $9,085 | $4,389 | $4,696 | 107% | | Charging revenue, commercial | $2,418 | $654 | $1,764 | 270% | | Regulatory credit sales | $1,613 | $2,128 | $(515) | (24)% | | Ancillary revenue | $2,427 | $698 | $1,729 | 248% | [Results of Operations for the Six Months Ended June 30, 2023 and 2022](index=66&type=section&id=Results%20of%20Operations%20for%20the%20Six%20Months%20Ended%20June%2030,%202023%20and%202022) Revenue increased 352% to $75.9 million, while operating loss widened by 14% due to higher G&A expenses Results of Operations | (dollars in thousands) | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | Change $ | Change % | | :--- | :--- | :--- | :--- | :--- | | Revenue | $75,852 | $16,776 | $59,076 | 352% | | Cost of revenue | $56,657 | $10,565 | $46,092 | 436% | | Gross profit (loss) | $5,570 | $(1,344) | $6,914 | 514% | | General and administrative expenses | $72,222 | $57,606 | $14,616 | 25% | | Operating loss | $(76,219) | $(66,969) | $(9,250) | (14)% | | Net loss | $(70,620) | $(38,269) | $(32,351) | (85)% | | Gross margin | 7.3% | (8.0)% | | | | Operating margin | (100.5)% | (399.2)% | | | Revenue by Type | (dollars in thousands) | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | Change $ | Change % | | :--- | :--- | :--- | :--- | :--- | | eXtend revenue | $43,573 | $211 | $43,362 | >999% | | Charging revenue, retail | $15,700 | $7,891 | $7,809 | 99% | | Charging revenue, commercial | $4,133 | $1,363 | $2,770 | 203% | | Regulatory credit sales | $2,828 | $3,506 | $(678) | (19)% | | Network revenue, OEM | $3,441 | $1,377 | $2,064 | 150% | | Ancillary revenue | $4,639 | $2,088 | $2,551 | 122% | [Non-GAAP Financial Measures](index=70&type=section&id=Non-GAAP%20Financial%20Measures) EVgo uses non-GAAP measures like Adjusted EBITDA to provide additional insights into its performance - EVgo uses non-GAAP measures like Adjusted Cost of Sales, Adjusted Gross Profit, Adjusted General and Administrative Expenses, EBITDA, and **Adjusted EBITDA** to evaluate performance[232](index=232&type=chunk)[233](index=233&type=chunk) Non-GAAP Financial Measures | (dollars in thousands) | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | GAAP revenue | $50,552 | $9,076 | $75,852 | $16,776 | | Adjusted Gross Profit | $12,853 | $3,383 | $19,258 | $6,248 | | Adjusted Gross Margin | 25.4% | 37.3% | 25.4% | 37.2% | | Adjusted General and Administrative Expenses | $23,410 | $23,212 | $49,882 | $44,244 | | Adjusted General and Administrative Expenses as a Percentage of Revenue | 46.3% | 255.8% | 65.8% | 263.7% | | Adjusted EBITDA | $(10,553) | $(19,837) | $(30,620) | $(38,013) | | Adjusted EBITDA Margin | (20.9)% | (218.6)% | (40.4)% | (226.6)% | [Liquidity and Capital Resources](index=72&type=section&id=Liquidity%20and%20Capital%20Resources) Management believes current cash of $257.4 million is sufficient for at least the next twelve months - EVgo has a history of **operating losses and negative operating cash flows**[240](index=240&type=chunk) Liquidity Position | (in thousands) | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Cash, cash equivalents and restricted cash | $257,426 | $246,493 | | Working capital | $215,900 | $188,100 | - Management believes current cash and cash equivalents are **sufficient to meet working capital and capital expenditure requirements** for at least twelve months[240](index=240&type=chunk) - Primary liquidity sources include cash flows from the CRIS Business Combination, revenues, government grants, and proceeds from Class A common stock sales[241](index=241&type=chunk) [Critical Accounting Policies and Estimates](index=75&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Critical accounting policies include revenue recognition and the fair value measurement of warrant liabilities - Critical accounting estimates include **revenue recognition** (determining performance obligations and standalone selling prices) and **warrant liabilities** (equity vs liability classification and fair value measurement)[251](index=251&type=chunk)[252](index=252&type=chunk)[256](index=256&type=chunk) - The fair value of private placement warrants is estimated using a **Monte Carlo simulation methodology**, involving subjective assumptions like stock price, expected term, and volatility[258](index=258&type=chunk) [JOBS Act](index=79&type=section&id=JOBS%20Act) EVgo qualifies as an 'emerging growth company,' allowing it to take advantage of relaxed reporting requirements - EVgo qualifies as an **'emerging growth company' (EGC)** and **'smaller reporting company'** under the JOBS Act[260](index=260&type=chunk)[262](index=262&type=chunk) - As an EGC, EVgo can delay adoption of new accounting standards and has reduced compensation disclosure requirements, potentially affecting comparability with non-EGCs[260](index=260&type=chunk)[261](index=261&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=79&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exempt from these disclosures due to its status as a 'smaller reporting company' - EVgo is exempt from providing quantitative and qualitative disclosures about market risk due to its status as a **'smaller reporting company'**[263](index=263&type=chunk) [Item 4. Controls and Procedures](index=81&type=section&id=Item%204.%20Controls%20and%20Procedures) Management identified material weaknesses in internal controls and has a remediation plan in progress [Management's Evaluation of Disclosure Controls and Procedures](index=81&type=section&id=Management's%20Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Disclosure controls were deemed not effective due to material weaknesses in internal control over financial reporting - As of June 30, 2023, EVgo's disclosure controls and procedures were deemed **not effective** due to material weaknesses in internal control over financial reporting[266](index=266&type=chunk) - Despite the material weaknesses, management believes the condensed consolidated financial statements **fairly present** the company's financial position, results of operations, and cash flows[267](index=267&type=chunk) [Remediation Plan for Existing Material Weaknesses in Internal Control over Financial Reporting](index=81&type=section&id=Remediation%20Plan%20for%20Existing%20Material%20Weaknesses%20in%20Internal%20Control%20over%20Financial%20Reporting) The remediation plan involves hiring personnel, providing training, and designing new controls - Material weaknesses identified include a **lack of sufficient trained resources**, ineffective risk assessment, and inadequate information and communication processes[270](index=270&type=chunk) - The remediation plan involves hiring additional accounting and compliance personnel, providing ongoing training, and implementing new process-level and general IT controls[271](index=271&type=chunk)[272](index=272&type=chunk) - Remediation efforts are ongoing and may extend **beyond fiscal year 2023**[271](index=271&type=chunk) [PART II. OTHER INFORMATION](index=84&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part covers legal proceedings, risk factors, and other required disclosures [Item 1. Legal Proceedings](index=84&type=section&id=Item%201.%20Legal%20Proceedings) EVgo is not currently a party to any material legal proceedings - EVgo is not currently a party to any **material legal proceedings**[274](index=274&type=chunk) [Item 1A. Risk Factors](index=84&type=section&id=Item%201A.%20Risk%20Factors) Key risks include evolving industry standards and intense competition in the EV charging market - The lack of mature industry standards, including the rapid shift towards the **NACS standard** by OEMs, poses risks of incompatibilities and significant adaptation costs[276](index=276&type=chunk)[277](index=277&type=chunk)[279](index=279&type=chunk)[280](index=280&type=chunk) - EVgo faces **significant competition** from numerous established and emerging EV charging companies, utilities, and retailers, as well as alternative charging methods[281](index=281&type=chunk)[282](index=282&type=chunk)[283](index=283&type=chunk)[284](index=284&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=86&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item is not applicable to EVgo for the reporting period [Item 3. Defaults Upon Senior Securities](index=86&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to EVgo for the reporting period [Item 4. Mine Safety Disclosures](index=86&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to EVgo for the reporting period [Item 5. Other Information](index=88&type=section&id=Item%205.%20Other%20Information) No other information is reported under this item [Item 6. Exhibits](index=88&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q - The exhibit index includes corporate documents, warrant agreements, and **CEO/CFO certifications** pursuant to the Sarbanes-Oxley Act[293](index=293&type=chunk) [Signatures](index=90&type=section&id=Signatures) The report is signed by the Chief Executive Officer and Interim Chief Financial Officer - The report is signed by Catherine Zoi, Chief Executive Officer, and Stephanie Lee, Interim Chief Financial Officer, on **August 2, 2023**[298](index=298&type=chunk)

This presentation contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "estimate," "plan," "project," "forecast," "intend," "will," "expect," "anticipate," "believe," "seek," "target," "assume" or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forw ...

EVgo, Inc. (NASDAQ:EVGO) Q1 2023 Earnings Conference Call May 9, 2023 11:00 AM ET Company Participants Heather Davis - Vice President, Investor Relations Cathy Zoi - Chief Executive Officer Olga Shevorenkova - Chief Financial Officer Jonathan Levy - Chief Commercial Officer Conference Call Participants Gabe Daoud - Cowen James West - Evercore ISI Bill Peterson - J.P. Morgan Maheep Mandloi - Credit Suisse Andres Sheppard - Cantor Fitzgerald Operator Thank you for standing by. My name is [Bailey] [ph] and I ...