Q4 2022 EVgo Inc Earnings Call
Speaker 1: Thanks for watching!
Speaker 2: Good day and welcome to the EVgo fourth quarter and full year 2022 earnings call. Today's call is being recorded. I would now like to turn the call over to Heather Davis, Vice President of Investor Relations. Please go ahead.
Speaker 2: Hi everyone and welcome to EVgo's fourth quarter and full year 2022 earnings call. My name is Heather Davis and I am the head of investor relations at EVgo.
Speaker 2: Joining me on today's call are Kathy Zoe, EVgo's Chief Executive Officer, and Olga Shevrenkova, the company's Chief Financial Officer.
Speaker 2: Jonathan Levy, EVgo's Chief Commercial Officer, will join us for the Q&A portion of the call.
Speaker 2: Today, we will be discussing EVgo's financial results for the fourth quarter in full year 2022 and initial outlook for 2023 followed by a Q&A session.
Speaker 2: Today's call is being webcast and can be accessed on the investor section of our website at investors.evgo.com.
Speaker 2: The call will be archived and available there along with the company's earnings release and investor presentation after the conclusion of this call.
Speaker 2: During the call, management will be making forward-looking statements that are subject to risks and uncertainties, including expectations about future performance.
Speaker 2: Factors that could cause actual results to differ materially from our expectations are detailed in our FCC filings, including in the Risk Factor section of our most recent annual report on Form 10-K .
Speaker 2: The company's SEC filings are available on the investor section of our website.
Speaker 2: These forward-looking statements apply as of today, and we undertake no obligation to update these statements after the call.
Speaker 2: Also, please note that we will be referring to certain non-GAAP financial measures on this call.
Speaker 2: Information about these non-GAAP measures, including a reconciliation to the corresponding GAAP measures, can be found in the earnings materials available on the investor section of our website. With that, I'll turn the call over to Kathy Azoy, EVgo's CEO .
Speaker 3: Hello everyone.
Speaker 4: Thank you for joining today.
Speaker 4: EVgo achieved record revenue in 2022, reflecting the continued growth of our ultra-fast DC charging network, our blue ribbon partnerships, and our industry-leading technology offerings.
Speaker 4: In our first full year as a public company, revenue and adjusted EBITDA were at the high end of our guidance range. This accomplishment is something I'd like to thank the entire EVgo team for.
Speaker 4: We look forward to continuing to grow and deliver in 2023.
Speaker 4: On today's call, I'll focus on a few themes from the year that we see the building blocks to EVgo's long-term opportunities.
Speaker 4: 1. Growth, 2. Execution, and 3. Innovation.
Speaker 4: Starting with growth, a foundational element to the EVgo investment story.
Speaker 4: When we look back, we may view 2022 as a pivotal turning point in the electrification of America's transportation sector.
Speaker 4: Everywhere you look, whether it's sales trends, OEM investments, government initiatives, or even Super Bowl ads on TV, we're seeing a fundamental shift in our country's attitude toward electric vehicles.
If you've listened to one of our calls before, you know how passionate I am about the electrification of transportation in the US.
We see data point after data point that confirms the market is rapidly accelerating.
In 2022, there were more than 800,000 fully electric vehicles sold in the US.
An increase of over 70% from 2021 according to Cox Automotive.
Battery electric vehicle sales accounted for nearly 6% of all vehicles sold, up from 3% in 2021.
This growth occurred despite an overall declining market with US auto sales overall falling by 8% in 2022.
This growth is beginning to accelerate, too. BEV sales increase by 72% year-over-year in the fourth quarter, and most forecasts expect the U.S. to easily eclipse the million battery-elected vehicles sold figure in 2023, an exciting milestone.
And EV sales should only continue to grow, as automakers are set to introduce dozens of new models by the end of 2024, including a number of more affordable options.
as well as models with longer ranges and faster charging rates.
A Reuters estimate last quarter noted that the world's top automakers are planning to spend approximately $1.2 trillion through 2030 to develop and produce millions of EV batteries and the raw materials used in their production.
This estimate is 2x what Reuters had previously calculated just a year earlier.
This is an astonishing once-in-a-lifetime type of investment, and we believe EV bill will be positioned to capture outsized throughput growth on our network as more and more cars hit the road.
Notably, California, our top market, continues to lead the way.
The state announced that 19% of all new cars sold in California were EVs compared to the 6% for the entire country.
California's leading position is reflected in our own growth, with kilowatt-hour throughput continuing to rise rapidly across our charging network here.
We're also seeing strong growth in many other markets, including Florida, Texas, Washington, and New York.
Another exciting aspect of all this growth is how EVs are drawing younger consumers into the fold, who are both environmentally conscious and also tech-savvy, ideal EVgo customers.
An IHS market survey indicated that through the first nine months of 2022, 44% of all EV buyers were under 45, a substantial increase in the 35% of buyers from this age group for all new vehicles purchased over the same period.
Given these trends, it's no wonder that virtually every automaker is investing in new EV models, which should help them attract loyal consumers for their brands for decades to come. And it's also why we've invested so heavily in building out the best and most reliable fast charging network.
We believe this growth, fueled by technology-enabled innovation, will continue to be our focus in 2023 and beyond.
and to build and operate the best network in the US and ensure both environmental and financial sustainability, we invest only in charging solutions that we expect to deliver our targeted financial return.
We believe this approach will deliver substantial growth and value for our investors.
as EV adoption continues to accelerate across the U.S.
The themes of growth and execution were consistent across our results in 2022.
EVgo increased stalls in operation or under construction to over 2,800 at the end of the year, growing 47%.
For the full year 2022, we energized nearly 670 new stalls on our network, a 131% increase in 2021.
We delivered nearly $55 million in revenue for the year at the high end of our guidance, representing year-over-year revenue growth of 146%.
Full year network throughput was 44.6 GWh and an increase of 69% from 2021.
We're seeing rapid growth well beyond California, with utilization topping 10% in markets such as Austin, Las Vegas, and West Palm Beach. In 2022, we continue to expand EVgo's suite of innovative business partnerships, where we work with automakers, retailers, and fleet operators to develop new solutions and products that meet the needs of these professionals.
to meet evolving needs in this young sector.
General Motors remains one of our most important partners, with GM and EVgo now working together on urban public charging, charging on highway corridors, workplace charging, fleet solutions, and tech-enabled services.
EVgo has made tremendous progress on the EVgo-owned urban charging program set to build 3,250 high-powered DC fast charging cells over the next few years.
That partnership had now deployed ultra-fast 350-kilowatt charging stations on EVgo's network in 35 metropolitan markets across 22 states. Building on this success, EVgo continued to deepen our relationship with GM by launching a collaboration with GM and Pilot Companies.
agreeing to deploy up to 2,000 charging cells at around 500 pilot and flying J locations across the U.S.
With 78% of the continental US interstate system within 10 miles of a pilot or flying J, we see incredible potential for this project, which is part of the EVgo extend business.
These future stations are also well aligned with the priorities of the federal government's National Electric Vehicle Initiative, or NEVI, program, deploying $5 billion to build out a nationwide charging network starting with interstate corridor sites. I'll share more on NEVI later.
Blue Chip OEM partnerships are a key pillar of our retail growth strategy, and 2022 was a banner year for EVgo, as we secured multiple new agreements with leading automakers for EVgo inside integration, charging credit programs, and more.
In addition to our foundational partnerships with GM and Nissan, EVgo entered into a commercial agreement with Subaru to provide drivers of the 2023 Solterra EV SUV with the option to receive a $400 charging credit on the EVgo public fast charging network.
EVgo also announced a commercial agreement with Toyota to provide drivers of the new Toyota BZ4X battery electric SUV with one year of complimentary charging on EVgo's nationwide network. Continuing our partnership with GM, EVgo commenced a commercial agreement to offer drivers of the 2023 Cadillac lyrics the option of two years of unlimited public fast charging on our network.
In December , we announced the launch of a new B2C charging discount program for Rideshare drivers on the LISP platform.
This expansion of EVgo and Lyft collaboration demonstrates our shared commitment to achieving mass EV adoption and increases access to convenient fast charging infrastructure for Rideshare drivers.
This also applies to our Uber partnership, which continued to grow in 2022, with new in-app technical and marketing collaborations helping drive increased throughput on EVgo's network.
On the fleet side, EVgo continues to work with large operators and delivery fleets as they undertake their first product to get to know the EV's face. We signed a new behind the fence agreement with a large national food and beverage company in the fourth quarter, through which EVgo will install and manage private charging stalls for the company's fleet.
Earlier in 2022, we signed an agreement with MHX Solutions, representing our first EVgo optimized deployment for a Class 8 truck fleet.
And EVgo has continued to expand our fleet business with the January 2023 signing of a significant new agreement with an existing autonomous vehicle partner.
The Hub's business at EVgo was a core part of our sleep strategy, with sustained interest from our existing AV partners and other sleep needing access to dedicated charging away from their own decodes.
While it's still early days, we're excited to have EVgo's fleet business grow alongside the EV investment fleet operators are making as more vehicles become available to them. This growth is a testament to the team at EVgo. We've been delivering on EVgo's growth plans and our partners' growth plans since we attract and retain employees who want to work for a mission-driven company.
Similarly, our relationships with suppliers have enabled us to have charging equipment available even with disruptions other companies have seen in their supply chains.
EVgo's slate of blue ribbon partnerships is closely related to our commitment to creation of a first-class driver experience.
That starts with reliability and continuous improvement of the EVGo network. As a leader in public charging since 2010, we continually assess our network and determine where investments can help meet and exceed our customers' expectations for ultra-fast charging today and in the coming years.
Under our comprehensive maintenance and reliability program, which we formally launched as EVgo Renew, we upgraded over 100 stalls and retired approximately 160 stalls in 2022.
Last year, we largely focused on our legacy 50 kilowatt chargers.
The EVgo Renew is not a one-and-done effort. We continue to evaluate sites for upgrading based on charger performance, available power at the site, driver demand, and EV growth projections for that geography.
Turning to innovation.
Innovation is baked into everything EVgo does, as you can tell from the technology undergirding the commercial agreements I've already mentioned.
As another example, we recently announced an agreement with Amazon to support an Alexa-enabled EV charging experience.
EVgo is Amazon's first charging network partner in the US for this collaboration, which will allow drivers to ask Alexa to help them find and navigate some nearby EV charging stations and seamlessly initiate and pay for charging sessions at EVgo stations. This charging experience will leverage both PlugShare and EVgo inside.
to switch between apps.
In addition to Amazon, we have leveraged the EVgo Inside APIs with Toyota, Lyft, and Uber, among others.
Another EVgo innovation, Auto Charge Plus, initially launched with GM this year and is now available on the EVgo network for more than 20 EV models, a number that includes Tesla using the CCS adapter.
Auto Charge Plus offers a seamless plug charge and go experience for EV drivers with more and more sessions being initiated with Auto Charge Plus on the network every month.
With ClubShare, which is a Yelp app for EV charging that EVgo purchased in 2021, we now have more than 3 million registered users worldwide, and we continue to adapt and innovate the technology to better serve EV drivers.
Last year we enhanced the PlugShare platform with Pay with PlugShare and PlugShare Premium.
To leverage the platform's unique user base and monetize its broad reach, we also launched direct and indirect advertising on Plugshare.
Further, Plugshare is a great resource for companies who want to understand driver behavior in the emerging U.D. market.
The analytics PlugShare can provide on a fee-for-service basis are important to a variety of players in the EV ecosystem, as well as to our own operations.
Our Easy Build Innovation Lab is a go-to for automakers developing new EVs and manufacturers developing new equipment to charge those EVs.
In fact, in addition to a principal easy-go lab in El Cagundo, California, we also have three testing locations set up at OEM facilities.
This distributed approach enables automakers to test vehicles much earlier in the development cycle, sometimes even before prototypes have been officially released.
EVgo retains access to the testing software and remotely manages the testing in support of the OEM's design and commercialization process.
And with a relentless focus on customer experience, we enhanced the EVgo mobile app to enable more sophisticated charging session diagnostics to help us better serve our customers into the future.
And the app is gaining traction with EV drivers. In 2022, we more than doubled the monthly average app users and app initiated charging sessions.
And now on policy, we also want to provide a quick update on the National Electric Vehicle Infrastructure Program, or NEVI, and other government initiatives. policy continues to provide an important tailwind, not just for EVgo, but the whole sector.
A couple of highlights for 2022 and looking forward.
Last year was a very active year in terms of utility proceedings, with outcomes in states such as California, Colorado, and Georgia yielding material electricity savings for EVGo's owned and operated business.
Similarly, prior legislative interventions in Illinois, New York, and Massachusetts led to state regulatory proceedings that are expected to yield multi-million dollar benefits to because business goes in the incentive and in electricity savings.
As we work to accelerate that 12 to 18 month charger deployment timeframe for the whole industry, utilities and local permitting authorities continue to be important partners.
In January 2023, EVgo announced the first Connect the Lots Charging Heroes.
In all world charging heroes include utilities National Grid and PSEng, site hosts like CDL and Shopcore and contractors like OWL and WB Engineering.
These companies are all in on the role they are key to playing in transportation electrification.
Timeframes are unfortunately not accelerating across the board though. With respect to utility processes, I would note that we and our peers are seeing some utility timelines get longer rather than shorter, arising from delays on transformer procurements as well as from competing utility priorities of grid management and system upgrades.
EVgo will continue to work collaboratively with utilities and be helpful where we can in reducing bottlenecks in their processes.
With implementation of the bipartisan infrastructure law and inflation reduction acts underway, billions of dollars of incentive funding are poised to accelerate EV charging deployment and EV adoption overall.
The IRA contained an expansion and extension of 30C, the Alternative Refueling Property Tax Credit.
With a new transferability provision, that should make it easier for companies like EVgo without federal tax liability to monetize the value of the credit. The IRA also revised the consumer EV tax credit under 30D, as well as first-time tax credits for used and commercial EV sales under 25E.
and 45W, respectively. On the bipartisan infrastructure law, the Federal Highway Administration finally issued a final minimum technical standard early in 2023 for the $5 billion in neti formula funds flowing through state DOTs to build out charging infrastructure across priority corridors and other projects. I would caution, however, that there are some critical details that will influence how quickly things are changing quickly.
requirements that have limited the applicability of the full tax credit for many EVs.
And for the NEVI funding, there are actually 50 plus different programs, with each state having an approved plan and wide discussion on processes, timelines, and program specifics.
At this point, most states are already behind the originally anticipated schedule for funding awards given the delay in final technical standards being promulgated.
EDO continues to engage directly with state DOTs to reduce friction and avoid further delays on the times of deployed charging, but notes that the funds have still not begun to flow from the states to charging project partners.
And the recently finalized federal Buy America waiver for NEBI funded projects will likely present significant near-term supply chain challenges as the whole EV charging industry works to onshore the production of EV chargers, especially 350 kilowatt fast markets.
While EVgo wholeheartedly supports the goals of Buy America and has been working with our suppliers on their on-sharing strategies for many months, the reality is that a meaningful domestic supply chain comprised of numerous manufacturing and assembly facilities will take time to be able to produce at scale.
Across the sector, we anticipate delays from contracting to installation for most applicants as the supply chain ramps.
The upshot is that due to equipment supply uncertainty, recipients of MEVY funds under the currently crafted Buy America Rule may see potential 2023 projects shift to 2024. But notwithstanding the potential near-term delays arising from new government requirements, the trend line is up and to the right.
The opportunity ahead of EVgo to build state-of-the-art charging infrastructure that meets our rigorous financial criteria remains vast.
As Ola will describe, in 2023 we expect to continue our site development and revenue growth to deliver financial results that capitalize on the accelerating electrification needs of the transportation sector. With that, I'll turn the call over to Evie Go, CFO , to talk about our 2022 results and our guidance for 2023.
Thank you. It is the end of the year with strong growth momentum as we continue to rapidly build out our network and execute on our contracts.
I will first cover the results for the fourth quarter and then for the full year of 2022.
Evidont active engineering and construction stall development pipeline grew by 29% in 2022 vs 2021 and in the year at approximately 4,000 stalls.
Iggo added over 180 new stalls to our network during the quarter, and stalls in operation or under construction, were over 2,800 at quarter end.
Fourth quarter revenue of $27.3 million with 283% year-over-year.
This substantial increase was driven by increased retail charging revenue and continued execution of our EVgo Xtend contract with Pilot Flying J in partnership with General Motors.
Under this multi-hundred million dollar multi-year contract, we recognize revenue in four phases for every site.
The first one, re-engineering work in downtown sites. The second one, charging equipment delivery.
Revenue is recognized when charging equipment changes title upon arrival at our facilities and subsequent payment by PMJ.
The third one, construction.
Revenues recognize proportionally to work being done on the site.
And then finally the fourth one, operational monthly fees once the site goes operational. In the fourth quarter, we accomplished certain three engineering works and took delivery of the first charging equipment shipment.
Adjusted gross margins declined from 28.2% in Q4 2021 to 18.3% in Q4 2022 due to a decrease in the percentage contribution of regular credit sales.
to the revenue mix and the year-over-year reduction in LCFS prices.
We reported adjusted EBITDA of negative $20.1 million in Q4 2022 versus negative $16.3 million in Q4 2021. GNA is percent of revenue
declined from 267% in Q4 2021 to 92% in Q4 2022, illustrating the leverage IVGO started realizing from its investments in GNA, both administrative and growth-driven payroll and non-payroll investments.
Top-X was $66.4 million during the fourth quarter as IWIGO accelerated charter deployment and continued to execute against our long-term strategic plan.
Top X was $66.4 million during the fourth quarter as IBBO accelerated charter deployments and continued to execute against our long-term strategic plans. As a reminder,
All our charging infrastructure deployments go through a rigorous underwriting process and pencil to our targeted financial returns. IZGO raised $10.4 million in next receipts by issuing 1.6 million shares of Class A comp
to dissolve.
EVgo added nearly 670 new stalls to our network during the year, versus approximately 290 added in 2021, an increase of 131%
Again, tolls and operations are under construction, where over 2,800 at year end, with approximately 2,200 of those being operational.
Customer accounts increased by 63% year-over-year and year-over-year throughput growth of 69% and exceeded year-over-year operational stall growth of 29%
2022 revenue of $54.6 million grew an impressive 146% year-over-year.
driven by an increase in retail charging revenue, extend revenue primarily through execution of the PFJ contract and the full year contribution of flux share revenue versus partial in 2021.
Adjusted gross margin of 24.3% improved by 90 basis points over 2021, driven by accelerated LCFS credits in the first half of 2022 and the full year of contribution from the Plaxair acquisition. To learn more about Lo Rhode's returns go to www.lores Mate.org
The full year adjusted EBITDA was negative $80.2 million compared to negative $51.4 million in 2021. Adjusted DNA as percent of revenue.
declined from 255% in 2021 to 171% in 2022, illustrating the leverage EVgo started realizing from its investments in GNA.
We relentlessly look to optimize and leverage our investments in the company and remain agile in our cost structure as the industry growth projections evolve.
In 2023, we are optimizing our G&A spend around charger pipeline growth and execution and delivering of contractual commitment. The topic was $200.3 million in 2022.
led by the new stall deployment and including 4.6 million of the new capex, 15.9 million land purchases and 14.3 million of capitalized payroll and non-payroll expenses.
Turning to network trends in the year.
As you may know, EVgo's revenue is leveraged to increasing EV adoption as greater number of EVs on the road, help drive throughput and increase utilization at EVgo's fast charges.
For the year 2022, EVGo's throughput growth significantly exceeded stall growth. Again, 69% growth for throughput vs 29% growth for operational stall.
EV sales continued to climb throughout the year with over 2.2 million EVs in operation compared to 1.5 million in 2021. And we have observed increased utilization across our network.
This was driven by an increasing retail throughput of 74% year over year and sleep of 65% year over year.
For fleet, Rideshare partners continue to add EVs, leading to addition of high-frequency customers to EVGO's public network.
EVO's partnerships with autonomous vehicle companies are also positioning us to benefit from the emerging adoption of self-driving robotaxis and delivery services.
We are also off to a great start in 2023, with average daily throughput volumes quarter to date in Q1 2023, approximately 20% higher than in the previous quarter Q4 2022.
As Kathy mentioned, as in the end of 2022, EVgo has several markets that have double-digit utilization.
Looking at these markets more deeply, we see that each of them is fairly developed with high EV penetration rates and a strong EV station footprint.
This reinforces our strategy to deploy stations and markets with strong, all-accelerating and easy penetration and offering charging in the best locations.
An excellent customer experience. Flexible pricing plan.
and additional data-driven services. In an environment where competition intensifies,
It is even more important to focus on delivering the best customer experience, which includes enhanced reliability and convenient interfaces and services, such as auto charge. Sales of EVs outside of California continue to increase. In 2022
63% of all EV sales were in markets outside of California.
These markets are important to EDGLE as we continue to build out our fast charging network.
of our kilowatt hours were dispensed outside of California, up from 32% in 2021.
Demonstrating that the market for EV electrification and consequently EV charging is becoming truly national. The market for EV electrification and consequently EV charging is becoming truly national.
IZGO is well prepared as two-thirds of our 2022 new solar edition were outside of California and in 2023 we expect to continue to build across the country.
Now, let me give an overview of EVgo's charging network pricing strategy. Philosophically, our strategy is centered around flexible pricing status for our customers versus a one-size-fits-all approach.
We are working towards introducing fully dynamic pricing over time, similar to leaks and over throat.
and are already offering certain elements of such dynamism today. We have time-lapse pricing with early burdens of peak hours, allowing drivers to unlock lower prices at certain times of the day.
There is also location-based pricing to incorporate attributes like availability of other businesses in the area, utility-specific tariffs, traffic intensity, overall attractiveness, and other market attributes.
EVgo's subscription plans offer value for drivers based on their frequency of expected charging.
Our subscription plans have been gaining traction among our customer base and we continue to experiment with such plans designs.
Turning to the 2023 guidance. If you go to the 2016 2023 full year revenue guidance.
Currently, there are 2023 guidance. The EGO is introducing 2023 full year revenue guidance of $105 million.
250 million dollars.
This guidance range is informed by the biomedical requirements for NEHRI funded projects issued at the end of February , which are more accepted than previously expected, given the nascent state of domestic bus charging manufacturing capacity.
As a result, inputs on specific project timelines remain uncertain and are dependent on domestic capacity coming online. IZIGO's current main suppliers, including the pilot Flying J project, are
have factored under construction with U.S. charger production plans for late 2023. These developments have affected our 2023 PFJ execution plans and shifted some anticipated revenue from 2023 into 2024.
Other factors informing the guidance range are the implications a potential economic recession may have on EV sales, the LCFS price environment, and the speed of ride share electrification.
We expect to provide quarterly updates to our annual guidance and anticipate updating the market accordingly in our earnings calls.
We expect full years 2023 adjusted EBITDA of negative 78 million dollars to negative 60 million dollars.
We expect to have a total of 3,400 to 4,000 DC fast charging cells in operation under construction at the end of 2023.
This magic includes PFJ stalls. With this, I will turn the call over to the operator for questions. Thank you. If you would like to ask a question on the phone lines today, please press star 1 on your telephone keypad to remove yourself from the queue. It's star 1 again. Please limit yourself to one question and one follow-up.
And if you would like to ask additional questions, you may re-enter the queue. We'll take our first question from James West with Evercore ISI.
Hey, good morning, Kathy Olga, Heather. Hey, James. Hi, James.
So quick first one for me and I think you've gone through most of this but I want to make sure I'm getting this correct. The guide for the number of stalls that will be installed, fast charging stalls in operation under construction of 3400 to 4000. I think the low end is kind of similar growth to this year. The high end obviously is accelerated.
have done.
Yeah, James, thanks for the question. Yeah, so first of all, this number does include PFJ stalls, not just if you go on stalls, just to confirm that. And the range is informed by both, all of the above, by both the potential uncertainties within thearies may address some of the certain issues.
Okay, okay, fair enough. Thanks, Olga. And then the follow-up for me, we've seen some recent pricing changes from your competition. In fact, they're raising pricing to come to your level of pricing or where you guys have been mostly pricing, as I understand it. Are you seeing any other competitive moves on pricing that...
either kind of make you think you can raise pricing further or the price is going to be stable at this level given what the other competition is doing because it seems like we're in a little bit of an elastic market, so the lowest everyone in this list is now.
Yes, so James, I think as Olga mentioned in the prepared remarks, we have a pretty sophisticated approach to pricing. First of all, pricing, we have to make money on every kilowatt hour dispensed. That's sort of a given, right? So we've always priced to make money.
But interestingly, as the market evolves, we're leaning into the dynamic pricing capabilities and our early forays into that where we're offering early bird pricing in certain markets and location-based pricing. The customers seem to like it. So we're going to continue to develop sophistication of that and we think that's going to actually help people three days a week.
please customers and give us more upside headroom as we go forward. Thanks, Kathy. Thanks, all.
these customers and give us more upside headroom as we go forward. Got it. Okay. All right. Thanks, Kathy. Thanks, all. Thank you.
We'll take our next question from Gabe Dowd with TD Helen. Thank you. Morning, everybody. Thanks for the prepared remarks. I was maybe hoping to get a little more color on the 23 guide, maybe just on the revenue side. Could you indicate how much is stemming from Xtend versus just the legacy charging business? Thank you, Meter.
So we probably would defer to our charge and this is our core business rather than legacy We don't disclose the sweet
For the guide, what we could say, and to reiterate, that the range which you see 105 to 150 which you see 105 to 150 is mostly informed by...
timeline uncertainties within the execution of PFJ contracts. So nearly all of it is informed by potential volatility and expense. So again we won't be disclosing how much of the total guide is PFJ revenue but we will be reporting it as we go through the year.
Let me just underscore, Gabe, just to build on what Olga said, is let's just be really, really clear that the PSJ is a multi-hundred million dollar, multi-year contract. What we're talking about with that variability means that things that might... The things that could happen in 2023 would just get simply shifted to 2024. We were working from that point on, but what the other works? But it's... There are certain barriers that could happen really quickly than we thought that in the last 30 years, where you've got the last thing you should learn is that you should limit yourself to President-Elect
It's a forecasting thing for you and for us, I suppose, but it doesn't materially affect the overall health of the business in any way. Correct. Okay. Okay. Okay, understood. Thanks for that. And then maybe just a follow-up. If I look at capital spend in 22, call it 200 million or so. If you, I guess, kind of spend that again in 23, the 200 million relative to what's on the balance sheet. Just to add to that, I think that's a good point. I think that's a good point. I think that's a good point. I think that's a good point. I think that's a good point. I think that's a good point. I think that's a good point.
we stand without cash balance today, we are fine for the duration of this year and most of next year. So we do not have our growth plans as-sized to be able to go through again the most of next year and of course this year. We remain opportunistic. will to, will to continue until we re-use the 2050 at least the trajectory order of the ongoing growth for the 2021.
you know, for capital, there is an opportunity to present itself, and we feel it's the right thing to do, and we like how the markets look like, we will take that opportunity. So that's what I would say about the capital stretch, and regarding other sources of funds, you know, as part of our DNA, we have the whole team focusing on.
looking at securing grant funds. So that is part of our strategy. And that some of it is baked into our forecast as well. And I don't know, Cassie, if you have any thoughts on that. Yeah, I mean, I think that Gabe, you mentioned the DOE loan program. And that is certainly an exciting possibility. The timetables on that are as you can see,
Thanks everyone. Thank you. Thank you.
We'll take our next question from Mahit Mandloy with Credit Suisse. Hey, good morning. Thanks for taking the questions yet.
Just following the previous question on, or maybe tackling the margins from a different angle here. In terms of OpEx, how should we think about that in the year here, like a similar run rate to Q4? I know in February we talked about, uh,
some structural changes of the company. But just curious how to think about that going forward. Yeah, thanks, Mahit. So we did go through some payroll efficiencies.
earlier this year. However, we still will be fulfilling certain positions, mostly in operations teams needed to help us focus on execution of our pipeline and existing commitments.
Q4 is a fine proxy, but you'll see some movements throughout the year as the effects of efficiencies were introduced earlier this year come into play. And as we continue to ramp up, probably not as significantly as last year, but yet there will be a ramp up on operations headcount, which you would also see throughout this year as well. Thank you.
On the domestic content question earlier, how early do you think the suppliers can move into the US? The wondering when each speaks to different groups and?
Have they given you a timeline yet? And it is predominantly Delta, head for the PHA?
Well, yes, so we have two major suppliers for our fast chargers, it's both Delta and Signet, and they both have domestic production facilities under construction right now and are aiming for the latter part of this year to have those go online. And once they go online, we need to obviously test the equipment that comes out because for us, safety and reliability is of utmost importance. So we're hopeful, end of this year, that we'll be able to sort of...
get access to those US manufactured fast 350 chargers, 350 kilowatt chargers and get them moving. But that's why you see the variability in our revenue range there. And then just one last housekeeping. I'm sorry if I missed this. Did you talk about CAPEX needs for this year? We don't explicitly guide to the CAPEX, but we do guide to the
Hey, good morning, Kathy. Good morning, Olga. Good morning, Heather. Thanks for taking our questions and congrats on the quarter. Looks like the stock is reacting very well. So congrats again on the news. Most of our questions have been asked, maybe touching on revenue guidance once more.
It's pretty decent range on the guidance, so maybe if you could just help us better understand kind of what are the main assumptions driving this variance and also what kind of seasonality might we expect. I think historically Q1 has been a little bit on the lower end, but it sounds like it's progressing well with the network throughput, so just wondering on seasonality there as well.
Sure. So the first question on the range, it is mostly informed by the timing of extended revenue and namely PFJ contract execution and to be more precise the timing of the charge and delivery on our facilities. This is when they change title as I mentioned in my prepared remarks.
different revenue numbers. That is the main factor affecting the range. And then you have other factors which are also important but maybe less in magnitude which is actual construction timelines for PFJ contract and then on the core business it's EV sales.
So our retail business is quite correlated to number of electrical vehicles on the US roads and depending on how many will be sold.
to the market this year it will create some volatility and then on top of it we we don't know what's going to happen with those CFS price and and we would have a baked baked in there as well so all of those factors do affect the size of the range.
Do you want to repeat the second question? Sorry. Yeah, no problem. It's just part of seasonality. What kind of seasonality? Seasonality, right. Yeah, I think it's just part of seasonality.
Yeah, so you know what, it is interesting because every year there is a seasonality pattern which is a normal seasonality pattern on how EVs are driving. So there are no EVs, all cars are driving and that's a stable pattern and you can see how the SQ1 is a little weaker, picks up by the summer, then you again see it pick up around the holidays later in the year.
seasonality. Last year for example the Q1 was even worse than seasonality would suggest because there were some COVID spikes and people were like restraining themselves from going out. This year we see a lot of growth because we see actually pretty strong sales in Q1 and pretty strong...
We will continue to monitor and report back to the market and explain why and what is happening, but you're absolutely right. If the last Q1 didn't see as much of growth versus previous quarters, we probably would see this one. We will continue to monitor and report back to the market and explain why and why not
Got it. That's very helpful. I appreciate all that context. Maybe as a quick follow-up question for Kathy here, I'm curious, you know, there's been some consolidation in the sector. I'm curious to maybe get your views on M&A or if you might expect any further consolidation in the sector either this year or next year. Thank you. Yeah, look, I'm not exactly sure. What we know is with...
in the near term, M&A activity may be impacted by recessionary fears that are looming, so that might stymie it a little bit. In any case, look, we at EVgo, we're just going to go and execute our business and continue to do what we do well. We'll just watch that space just like you will.
Wonderful. Thank you so much. Congrats again. I'll pass it on. Thank you. We'll take our next question from David Kelly with Jefferies.
Hi, good morning and thanks for taking my questions. Maybe just a couple of follow-ups from my end and wanted to start with earlier CAPEX discussion. As we think about mixed contributors to that implied stall growth in 2023, should we expect any meaningful change in per stall?
mostly coming from our efforts on negotiating equipment prices and also because we are now focusing on a bit of a larger size meaning more stolster size which creates efficiencies and will continue to update the market if that potentially changes. Okay got it that's helpful thank you and then one quick follow-up on on fleet.
You know, we are seeing a bit slower rollout of EVs in the US, mainly due to supply chain shortages, but they're out there. And then we have the growing macro uncertainty. So curious if you're seeing any impact on or hearing of any kind of increased near term hesitation.
from some of your fleet customers, understanding the longer term plans of rollout are fully intact, but have they pulled back at all on expectations for the next 6, 12 months here? Yeah, so we think of fleet in three buckets. We have Rideshare Fleet, which is on our public network, and that's going great.
fleets large and small buying their first batches of EVs and working with charging partners like EVgo to gain some experience on electrification or transportation.
buying their first batches of EVs and working with charging partners like EVgo to gain some experience on electrification or transportation.
Okay, got it. Thank you. That's really helpful. Thanks. We'll take your next question from Alex. Thanks, guys, for taking the question. I hate to sort of go back to what we've talked about already, but just on sort of the capital markets future here.
that would take sort of half your cash position away with the EBITDA part as well. What I guess is there any further color you can offer and also to understand is there any use of the ATM embedded in that statement that you made earlier?
Yeah sure so we spend roughly 200 million dollars last year on car packs and the majority of it was gross car packs so a lot of stalls we plan to put in operations this year. We've already pre-spent money last year including paid equipment and some of the construction as well.
So, and that's normal for our business. You have to spend money kind of sometimes up to three, four quarters earlier than the stove go operational. So that might affect your math. So we've already done quite a bit of work last year. There was a big push here for us on that front.
The second point, when we think about our capital needs, let us not forget that a lot of times when we deploy our assets, we do take advantage of incentives which exist. And now with CIRDE-C coming in place and other incentives available that does affect CAPACs.
Quite a bit so it's it's not all gross cutbacks. It is upset by certain incentives on ACM we did raise 10.4 million dollars End of last year and we continue to be opportunistic We atm will not probably be the main source of our capital
However, when the situation permits and there is an open trading window, we will take advantage of it.
Got it, that's actually super helpful and then maybe 1 for you Kathy. I know you mentioned there's obviously a litany of things going on in Washington as far as the moving policy pieces. I think the key piece of drama this week is really the tax credit and certainly some generations. We can see there. I mean, how I guess important.
take the opportunity to introduce my marvelous colleague, Jonathan Levy, to answer this one. Jonathan and I got to know each other in that Washington world, and he's our Chief Commercial Officer, and he's going to be joining us for these calls going forward. So I want you guys to get to know him, but this is totally in his zone. So Jonathan, over to you. Thanks, Gabby. And I think, actually, you may be referring in part to some of the comments that Senator Manchin made yesterday. Let's say, so firstly, I'm going to speak with Please Hollandaise Sloan. Great to be having you,OSS and Top your call.
at a conference that I was speaking at, but we are expecting the clarifications from Treasury on the 30D vehicle tax credit for some of the minerals content requirements. I think there's a couple things here, right? A lot of that has to do with where the automakers are planning some of the components and what happens with their supply chain. What we're seeing near term though is demand from consumers is such that you still have
Reservation, availability, I think that demand continues to outstrip the supply. Obviously the tax credit can continue to be a really big tailwind, but we're also as excited about the commercial and use tax credit. And the commercial credit doesn't have the same restrictions that they used in the 30 deep credits have. Yeah, no, that's super helpful and welcome to the team Jonathan. Look forward to connecting for. We'll take our last question from Bill Peterson with JP Morgan.
Hi, good morning. Thanks for taking the question. I wanted to kind of come back to seasonality and first clarification. On the network throughput 20% higher, does that mean we should assume the network throughput in the first quarter is around 17 or so?
And then I guess related that revenues to some of lag network throughput Wonder if you can kind of unpack how to think about that. I guess related to pricing it might probably you know be either subscriptions Pay as you go, you know different type of
related that revenues to somewhat lag network throughput. Wonder if you can kind of unpack how to think about that. I guess related to pricing, it might probably, you know, be you have the subscriptions pay as you go, you know, different types of, I guess, charging.
It means that people are employing. So trying to unpack those four would be very helpful. Thanks. Yeah. So we won't comment on P1 results just yet. Stay with us. That comes relatively soon. But the 20% number on average daily volume is a good proxy for quarter over quarter sequential change. On pricing, oh sorry, on revenue lagging throughput.
And the revenue was around 16, I don't know, 68%, 69%. So I'm not saying lagging. I'm talking about the revenue growth that doesn't exactly match the net worth group growth. That's what I meant by that. I'm trying to understand how to model that too, it's really important to work to the breadth of voters, to make sure
Okay, so thanks for clarifying. It depends on what kind of revenue you are taking into account because we have retail revenue, we have commercial revenue, we have OEM revenue. Commercial revenue, the definition for kilowatt hour pricing would be lower because these guys get volumetric discounts. So the moment that...
revenue line in proportion grows to the total revenue, you will see that effect which you are mentioning. And the same if you include an LCFF pricing into this, that same concept, LCFF pricing went down quite a bit year over year. So I don't know which particular revenue line you run your numbers on, but that contributes to that effect as well. It is right here simply showing how quickly theigh account has decreased
Okay, thanks for that. And then obviously it's a wide range for the year largely on extent, but I guess can you help us understand how we should have it run through in terms of let's say the gross margin? How does it flow through the P&L? For example, if you come in the low end of the range, I presume your actual gross margin would actually be higher. In theesse if if your criterion corporation, which would have completely responsibly been
But if you could help us understand how that flows through the P&L, that would be helpful as a reminder. Yeah, that's a good question. We do not guide on adjusted gross margin. However, even within Xtend, kind of different pieces have slightly different margins and depending if you have more charging revenue versus construction versus pre-engineering, the margin mix might change. So, thank you very much.
So I obviously do have certain forecasts which I look at and it's not necessarily that if you end up with a lower revenue number your adjusted gross margin would be lower. There could be some other factors to play. Also, it could be high, it could be some other factors to play. But again, we just don't guide to adjusted gross margin and we'll be informing the market.
easily for any additional or closing comments. Thank you. Well, thank you, everyone. In closing, let me just say that 2022 was about growth and execution at EVgo, culminating in the company achieving the high end of our revenue and adjusted EBITDA guidance and continuing to lead in the EV charging sector in the US. As we continue to expand as one of the largest fast charging public networks in America, there are no long-term wire towers 100% designed to affectLiquid signed solar panels.
We look to leverage our operational expertise from our decade-long track record and continue driving operational efficiency, deploying capital that meets our robust return requirements. I look forward to sharing our Q1 2023 results very soon. Thanks everyone for joining us. That does conclude today's presentation. Thank you for your participation and you may now disconnect.