EVgo (EVGO) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics - Revenue for Q3 2024 was $67.5 million, a 92% year-over-year increase, driven by growth in charging network and eXtend revenues [27] - Charging network revenue grew 98% year-over-year to$ 43.1 million, with retail, commercial, and OEM charging revenue each at least doubling [27] - eXtend revenue increased 109% year-over-year to $21.9 million [27] - Adjusted EBITDA loss improved to$ 8.9 million, a $5.4 million improvement compared to Q3 2023 [32] - Cash, cash equivalents, and restricted cash stood at$ 153.4 million as of September 30, 2024 [33] - The company generated $12.1 million in cash from operations in Q3 2024, marking the second consecutive quarter of positive cash flow [33] Business Line Data and Key Metrics - Operational stalls grew by 34% year-over-year, with 270 new stalls added in Q3 2024, bringing the total to 3,680 stalls [28] - Customer accounts increased by 57% year-over-year to over 1.2 million [28] - Network throughput more than doubled year-over-year to 78 gigawatt hours, with utilization increasing to 22% from 14% a year ago [29] - 56% of EV gross throughput came from Rideshare, OEM charging credit, and subscription accounts in Q3 [25] - The company added over 147,000 new customer accounts in Q3, a 39% increase compared to the same period last year [25] Market Data and Key Metrics - The company now has operational stalls in 40 states, with strong growth in throughput across all states, indicating widespread EV adoption in the US [6] - Over 40% of new stalls are expected to be in marginalized areas, aligning with the Justice 40 initiative [11] - The EV market in the US is transitioning from early adopters to the mass market, driven by more affordable vehicles [9] - The ratio of EVs to public fast charging stalls is expected to grow to nearly 180 by 2030, up from just under 90 at the end of 2023 [16] Company Strategy and Industry Competition - The company is focused on improving the customer experience, operating efficiencies, capturing high-value customers, and securing financing to achieve free cash flow breakeven [19] - EVgo is co-developing next-generation charging architecture with Delta Electronics, targeting a 30% reduction in gross CAPEX per stall [8][23] - The company is leveraging partnerships with rideshare companies and OEMs to drive predictable demand and growth [15][25] - EVgo is working on securing non-dilutive financing opportunities, including a$ 1.05 billion DOE loan, to accelerate stall deployment [9][26] Management Commentary on Operating Environment and Future Outlook - Management expects to achieve adjusted EBITDA breakeven in 2025, driven by continued EV adoption and operational efficiencies [36] - The company raised its 2024 revenue guidance midpoint by $2.5 million and adjusted EBITDA guidance midpoint by$ 4 million, reflecting strong performance and lower energy costs [34] - Management is confident in closing the DOE loan, which would accelerate stall deployment and improve unit economics [12][40] - The company sees significant growth opportunities from rideshare electrification, autonomous vehicles, and cable standardization [18][48] Other Important Information - EVgo completed the sale of 30C income tax credits for 2023 vintage stalls, generating $11 million in gross proceeds [26] - The company is deploying larger sites with 6-8 stalls per site, with 18% of sites having 6 or more stalls at the end of Q3 [19] - Autocharge+ adoption is growing, with 21% of sessions initiated through the seamless plug-and-charge experience [20] - The company is working on flagship sites with GM, featuring up to 20 or more stalls with advanced amenities [21] Q&A Session Summary Question: DOE Loan Closing Conditions and Timeline [39] - Management is confident in closing the DOE loan, with conditions largely within their control and no expectation of a lengthy process [40] Question: Near-Term Growth Drivers and eXtend Revenue [41] - Management expects continued growth in throughput and raised guidance for 2024, with eXtend revenue expected to decrease in Q4 due to project timing [42][43] Question: Utilization Rates Compared to Industry Averages [44] - EVgo's utilization rates are higher than many competitors due to strategic site selection and urban-focused deployments [45][46] Question: Autonomous Vehicle Charging Strategy [47] - The company sees autonomous vehicles as a significant growth opportunity and is building dedicated hubs for AV clients [48] Question: Tesla Charging Opportunity [50] - EVgo expects to attract Tesla drivers once the NACS connector is standardized, leveraging its urban network [51][52] Question: Expense Burden for DOE-Funded Expansion [54] - The company plans to leverage existing infrastructure and talent, with a focus on prudent growth and meeting EBITDA breakeven targets [55] Question: Alternative Funding Options [58] - EVgo is evaluating non-dilutive financing options to complement the DOE loan and expand stall deployment [59][60] Question: Delta Electronics Partnership and CAPEX Savings [61] - The partnership aims to reduce CAPEX per stall by 30% through improved customer experience and cost-efficient designs [62] Question: High Utilization Sites and DOE-Funded Sites [64] - The company expects no material difference in unit economics between current sites and those funded by the DOE loan, with continued improvements in utilization [65][66] Question: 30C Monetization Strategy [70] - EVgo is exploring strategies to maximize 30C monetization, potentially moving to semi-annual sales [70] Question: Rideshare and OEM Subscription Breakdown [71] - 56% of throughput comes from Rideshare and OEM subscriptions, with Rideshare accounting for 24% of commercial revenue [71]