ChargePoint(CHPT) - 2025 Q2 - Quarterly Results

Second Quarter Fiscal Year 2025 Financial Results ChargePoint reported Q2 FY25 revenue of $108.5 million, a 28% decrease, with improved gross margin and reduced net loss Q2 FY25 Financial Highlights Q2 FY25 revenue declined to $108.5 million, yet gross margin significantly improved, and net loss substantially decreased Q2 FY25 Key Financials (YoY Comparison) | Metric | Q2 FY25 (Millions) | Q2 FY24 (Millions) | YoY Change | | :---------------------- | :----------------- | :----------------- | :--------- | | Revenue | $108.5 | $150.5 | -28% | | Networked Charging Systems Revenue | $64.1 | $114.6 | -44% | | Subscription Revenue | $36.2 | $30.0 | +21% | | GAAP Gross Margin | 24% | 1% | +23 pp | | Non-GAAP Gross Margin | 26% | 3% | +23 pp | | GAAP Operating Expense | $88.3 | $124.5 | -29% | | Non-GAAP Operating Expense | $66.4 | $88.9 | -25% | | GAAP Net Loss | $(68.9) | $(125.3) | -45% | | Non-GAAP Pre-tax Net Loss | $(43.0) | $(86.1) | -50% | | Non-GAAP Adjusted EBITDA Loss | $(34.1) | $(81.2) | -58% | - Gross margin improvement was primarily due to a $28.0 million inventory impairment charge taken in the prior year related to legacy supply-chain costs and supply overruns on a particular DC product[2] - As of July 31, 2024, cash and cash equivalents were $243.7 million, with the company's $150 million revolving credit facility remaining undrawn and no debt maturities until 2028[2] - Approximately 431 million shares of common stock were outstanding as of July 31, 2024[2] Key Business Developments ChargePoint partnered with LG, launched Omni Port for universal EV charging, and introduced an AI tool for faster station diagnosis - ChargePoint and LG Electronics formed a strategic relationship to leverage technology and expertise for future EV charging innovations, potentially including commercial charging solutions, LG's smart home solutions, home energy storage, and charging with out-of-home advertising[3] - Launched Omni Port to solve EV connector confusion, enabling drivers of all EV makes to charge in any parking space regardless of connector type[3] - Introduced a new AI-powered driver support tool to rapidly accelerate the diagnosis and repair of charging stations in the field[3] Strategic Actions and Future Outlook The company implemented a reorganization to reduce operating expenses and provided guidance for Q3 FY25 and FY26 Reorganization and Operating Expense Reduction ChargePoint initiated a reorganization, reducing its global workforce by 15% to achieve significant annualized operating expense savings - ChargePoint announced a reorganization involving a reduction of its global workforce by approximately 15%[4] Estimated Annualized Operating Expense Reductions (Millions) | Metric | Estimated Reduction (Millions) | | :-------------------------- | :----------------------------- | | Annualized GAAP Operating Expenses | $41 | | Annualized Non-GAAP Operating Expenses | $38 | - The company estimates aggregate restructuring costs of approximately $10 million, primarily consisting of severance payments and employee benefits, expected to be incurred during the third and fourth fiscal quarters[4] Fiscal Year 2025 Guidance ChargePoint projects Q3 FY25 revenue between $85 million and $95 million, aiming for positive non-GAAP Adjusted EBITDA in fiscal year 2026 Q3 FY25 Revenue Guidance (Millions) | Metric | Guidance (Millions) | | :-------------- | :------------------ | | Q3 FY25 Revenue | $85 to $95 | - The company is concentrating on returning to growth and streamlining operations[5] - ChargePoint targets achieving positive non-GAAP Adjusted EBITDA during fiscal year 2026[5] Company Information and Disclosures This section covers company background, forward-looking statement caveats, non-GAAP financial measures, and contact information About ChargePoint ChargePoint, established in 2007, is a leading provider of networked EV charging solutions across North America and Europe - ChargePoint is creating a new fueling network to move people and goods on electricity[7] - Since 2007, ChargePoint has offered one of the largest EV charging networks and a comprehensive portfolio of charging solutions[7] - Their cloud subscription platform and software-defined charging hardware are designed for every charging scenario, from home and multifamily to workplace, parking, hospitality, retail, and transport fleets in North America and Europe[7] Forward-Looking Statements This section cautions that forward-looking statements are subject to risks and uncertainties, and actual results may differ materially - The press release contains forward-looking statements regarding potential operating expense savings, reorganization costs, projected Q3 FY25 revenue, and the goal to achieve positive non-GAAP Adjusted EBITDA[9] - Actual results could differ materially due to significant factors such as macroeconomic trends, supply chain disruptions, dependence on EV adoption, competition, and risks detailed in SEC filings[9] - The company does not assume any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, except as required by applicable law[9] Use of Non-GAAP Financial Measures ChargePoint utilizes non-GAAP financial measures to provide supplemental insight into core operating performance, excluding specific non-cash and non-recurring items - ChargePoint uses non-GAAP financial measures internally and believes they are useful for investors to evaluate ongoing operating results and trends, providing supplemental information regarding underlying operating performance[10] - Non-GAAP measures exclude items such as stock-based compensation expense, restructuring costs, amortization expense of acquired intangible assets, and non-cash charges related to tax liabilities and litigation settlements[11][13][14] - The presentation of non-GAAP financial measures is not meant to be considered in isolation or as a substitute for comparable GAAP measures, and investors are cautioned about limitations, including the recurring nature of some excluded items like stock-based compensation[10][15] Investor and Media Contacts This section lists the contact details for ChargePoint's investor relations and media communications teams - Investor Relations contact: Patrick Hamer, Vice President, Capital Markets and Investor Relations (Patrick.Hamer@chargepoint.com, investors@chargepoint.com)[16] - Press contacts: John Paolo Canton, Vice President, Communications (JP.Canton@chargepoint.com) and AJ Gosselin, Director, Corporate Communications (AJ.Gosselin@chargepoint.com, media@chargepoint.com)[16] Preliminary Condensed Consolidated Financial Statements This section presents the preliminary condensed consolidated statements of operations, balance sheets, and cash flows Statements of Operations This section details the preliminary condensed consolidated statements of operations for the three and six months ended July 31, 2024 and 2023 Preliminary Condensed Consolidated Statements of Operations (in thousands) | Metric | Three Months Ended July 31, 2024 | Three Months Ended July 31, 2023 | Six Months Ended July 31, 2024 | Six Months Ended July 31, 2023 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Revenue | $108,539 | $150,494 | $215,582 | $280,523 | | Total Cost of Revenue | $82,954 | $149,369 | $166,387 | $248,863 | | Gross Profit | $25,585 | $1,125 | $49,195 | $31,660 | | Total Operating Expenses | $88,331 | $124,457 | $179,079 | $234,914 | | Loss from Operations | $(62,746) | $(123,332) | $(129,884) | $(203,254) | | Net Loss | $(68,874) | $(125,255) | $(140,673) | $(204,643) | | Net Loss per Share, basic and diluted | $(0.16) | $(0.35) | $(0.33) | $(0.58) | | Weighted average shares outstanding | 427,532,688 | 355,876,807 | 425,434,765 | 353,008,473 | Balance Sheets This section presents the preliminary condensed consolidated balance sheets as of July 31, 2024, and January 31, 2024 Preliminary Condensed Consolidated Balance Sheets (in thousands) | Metric | July 31, 2024 | January 31, 2024 | | :-------------------------------- | :------------ | :--------------- | | Cash and Cash Equivalents | $243,263 | $327,410 | | Total Current Assets | $652,911 | $742,683 | | Inventories | $228,519 | $198,580 | | Total Assets | $1,003,777 | $1,103,363 | | Total Current Liabilities | $320,983 | $330,153 | | Total Liabilities | $772,887 | $775,687 | | Total Stockholders' Equity | $230,890 | $327,676 | Statements of Cash Flows This section outlines the preliminary condensed consolidated statements of cash flows for the six months ended July 31, 2024 and 2023 Preliminary Condensed Consolidated Statements of Cash Flows (in thousands) | Metric | Six Months Ended July 31, 2024 | Six Months Ended July 31, 2023 | | :-------------------------------------------------------- | :----------------------------- | :----------------------------- | | Net Loss | $(140,673) | $(204,643) | | Net Cash Used in Operating Activities | $(113,706) | $(190,602) | | Net Cash Provided by (Used in) Investing Activities | $(7,301) | $95,123 | | Net Cash Provided by Financing Activities | $6,926 | $64,048 | | Net Decrease in Cash, Cash Equivalents, and Restricted Cash | $(114,147) | $(30,663) | | Cash, Cash Equivalents, and Restricted Cash at End of Period | $243,663 | $263,899 | Reconciliation of GAAP to Non-GAAP Financial Measures This section provides detailed reconciliations of GAAP to non-GAAP financial measures for key performance indicators Reconciliation of GAAP to Non-GAAP Financial Measures This section details the reconciliation of GAAP to non-GAAP financial measures for gross profit, operating expenses, and Adjusted EBITDA loss Non-GAAP Gross Profit Reconciliation (in thousands) | Metric | Three Months Ended July 31, 2024 | Three Months Ended July 31, 2023 | Six Months Ended July 31, 2024 | Six Months Ended July 31, 2023 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | GAAP Gross Profit | $25,585 | $1,125 | $49,195 | $31,660 | | Stock-based compensation expense | 1,526 | 1,938 | 2,610 | 2,933 | | Amortization of intangible assets | 764 | 766 | 1,526 | 1,532 | | Non-GAAP Gross Profit | $27,875 | $3,829 | $53,331 | $36,125 | | GAAP Gross Margin | 24% | 1% | 23% | 11% | | Non-GAAP Gross Margin | 26% | 3% | 25% | 13% | Non-GAAP Operating Expenses Reconciliation (in thousands) | Metric | Three Months Ended July 31, 2024 | Three Months Ended July 31, 2023 | Six Months Ended July 31, 2024 | Six Months Ended July 31, 2023 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | GAAP Operating Expenses | $88,331 | $124,457 | $179,079 | $234,914 | | Stock-based compensation expense | (17,243) | (33,161) | (37,758) | (56,130) | | Amortization of intangible assets | (2,264) | (2,273) | (4,525) | (4,545) | | Other adjustments (2) | (2,392) | (105) | (4,001) | (105) | | Non-GAAP Operating Expenses | $66,432 | $88,918 | $132,795 | $174,136 | | GAAP Operating Expenses (% of revenue) | 81% | 83% | 83% | 84% | | Non-GAAP Operating Expenses (% of revenue) | 61% | 59% | 62% | 62% | Non-GAAP Adjusted EBITDA Loss Reconciliation (in thousands) | Metric | Three Months Ended July 31, 2024 | Three Months Ended July 31, 2023 | Six Months Ended July 31, 2024 | Six Months Ended July 31, 2023 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | GAAP Net Loss | $(68,874) | $(125,255) | $(140,673) | $(204,643) | | Stock-based compensation expense | 18,769 | 35,099 | 40,368 | 59,063 | | Amortization of intangible assets | 3,028 | 3,039 | 6,051 | 6,077 | | Other adjustments (2) | 2,392 | 105 | 4,001 | 105 | | Provision for income taxes | 1,648 | 905 | 2,056 | 478 | | Depreciation | 4,423 | 3,925 | 8,844 | 7,941 | | Interest income | (2,118) | (1,840) | (5,326) | (4,300) | | Interest expense | 6,560 | 2,926 | 13,171 | 5,853 | | Other expense (income), net | 38 | (68) | 888 | (642) | | Non-GAAP Adjusted EBITDA Loss | $(34,134) | $(81,164) | $(70,620) | $(130,070) | | Non-GAAP Adjusted EBITDA Loss (% of revenue) | (31)% | (54)% | (33)% | (46)% |